HomeMy WebLinkAboutVarious Purposes l '
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RECEIVE®
28 LIBERTY STREET `2015
NEW YORK, NY IOOOS
WWW.HAWKINS.COM
SOu,thold Town Clerk August 27, 2015
The Town Board of the
Town of Southold, in the
County of Suffolk,New York
Ladies and Gentlemen:
We have acted as Bond Counsel to the Town of Southold (the "Town"), in the
County of Suffolk, a municipal corporation of the State of New York, and have examined a
record of proceedings relating to the authorization, sale and issuance of the $2,800,000 Bond
Anticipation Note for Various Purposes-2015 of the Town (the "Note") dated and delivered on
the date hereof.
In such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity with originals of all
documents submitted to us as copies thereof.
Based upon and subject to the foregoing, and in reliance thereon, as of the date
hereof,we are of the following opinions:
1. The Note is a valid and legally binding general obligation 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 Note and interest thereon, subject to certain statutory limitations. The enforceability of
rights or remedies with respect to such Note may be limited by bankruptcy, insolvency, or other
laws affecting creditors' rights or remedies heretofore or hereafter enacted.
2. • Under existing statutes and court decisions and assuming continuing
compliance with certain tax certifications described herein, (i) interest on the Note 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 Note 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.
The Code establishes certain requirements that must be met subsequent to the
issuance of the Note in order that the interest on the Note be and remain excludable from gross
income under Section 103 of the Code. These requirements include, but are not limited to,
14
requirements relating to the use and expenditure of proceeds of the Note, restrictions on the
investment of proceeds of the Note prior to expenditure and the requirement that certain earnings
be rebated to the federal government. Noncompliance with such requirements may cause the
interest on the Note to become subject to federal income taxation retroactive to the date of
issuance thereof,irrespective of the date on which such noncompliance occurs or is ascertained.
On the date of issuance of the Note, the Town will execute a Tax Certificate
relating to the Note containing provisions and procedures pursuant to which such requirements
can be satisfied. In executing the Tax Certificate, the Town represents that it 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 the interest on the Note will, for federal income tax
purposes,be excluded from gross income.
In rendering the opinion in this paragraph 2, we have relied upon and assumed
(i)the material accuracy of the Town's representations, statements of intention and reasonable
expectations, and certifications of fact contained in the Tax Certificate with respect to matters
affecting the status of the interest on the Note, and (ii) compliance by the Town with the
procedures and certifications set forth in the Tax Certificate as to such tax matters.
3. Under existing statutes, interest on the Note is exempt from personal
income taxes of New York State and its political subdivisions,including The City of New York.
Except as stated in paragraphs 2 and 3 above, we express no opinion as to any
other federal, state or local tax consequences with respect to the`Note or the ownership or
disposition thereof. Further,we express no opinion herein as to 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 the interest on the Note, or under state and local tax
law.
We render our opinion under existing statutes and court decisions as of the date of
issuance of the Note, and we assume no obligation to update, revise or supplement this opinion
after the issue date to reflect any action hereafter taken or not taken, or any facts or
circumstances, or any change in law or in interpretations thereof, or otherwise,that may hereafter
arise or occur, or for any other reason.
We give no assurances as to the accuracy, sufficiency or completeness of the
Official Statement or any 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 Note.
We have examined the Note and, in our opinion, the form of said Note and its
execution are regular and proper.
Very truly yours,
1
1
.12
ONE CHASE MANHATTAN PLAZA
NEW YORK,NY 10005
WWW.HAWKINS.COM
April 8, 2015
The Town Board of the
Town of Southold, in the
County of Suffolk,New York
Capital One Public Funding, LLC
275 Broadhollow Road,4a'Floor
Melville,New York 11747
Ladies and Gentlemen:
We have acted as Bond Counsel to the Town of Southold (the "Town"), in the
County of Suffolk, a municipal corporation of the State of New York, and have examined a
record of proceedings relating to the authorization, sale and issuance of the $729,000 Various
Purposes Bond Anticipation Note-2015 of the Town (the "Note") dated and delivered the date
hereof. In such examination, we have assumed the genuineness of all signatures,the authenticity
of all documents submitted to us as originals and the conformity with originals of all documents
submitted to us as copies thereof.
Based upon and subject to the foregoing, and in reliance thereon, as of the date
hereof,we are of the following opinions:
1. The Note is a valid and legally binding general obligation 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 Note and interest thereon, subject to certain statutory limitations. The enforceability of
rights or remedies with respect to such Note may be limited by bankruptcy, insolvency, or other
laws affecting creditors' rights or remedies heretofore or hereafter enacted.
2. Under existing statutes and court decisions and assuming continuing
compliance with certain tax certifications described herein, (i) interest on the Note 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 Note 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.
The Code establishes certain requirements that must be met subsequent to the
issuance of the Note in order that the interest on the Note be and remain excludable from gross
income under Section 103 of the Code. These requirements include, but are not limited to,
requirements relating to the use and expenditure of proceeds of the Note, restrictions on the
investment of proceeds of the Note prior to expenditure and the requirement that certain earnings
be rebated to the federal government. Noncompliance with such requirements may cause the
interest on the Note to become subject to federal income taxation retroactive to the date of
issuance thereof,irrespective of the date on which such noncompliance occurs or is ascertained.
On the date of issuance of the Note, the Town will execute a Tax Certificate
relating to the Notes containing provisions and procedures pursuant to which such requirements
can be satisfied. In executing the Tax Certificate, the Town represents that it 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 the interest on the Note will, for federal income tax
purposes,be excluded from gross income.
In rendering the opinion in this paragraph 2, we have relied upon and assumed
(i)the material accuracy of the Town's representations, statements of intention and reasonable
expectations, and certifications of fact contained in the Tax Certificate with respect to matters
affecting the status of the interest on the Note, and (ii) compliance by the Town with the
procedures and covenants set forth in the Tax Certificate as to such tax matters.
3. Under existing statutes, interest on the Note is exempt from personal
income taxes of New York State and its political subdivisions, including The City of New York.
Except as stated in paragraphs 2 and 3 above, we express no opinion as to any
other federal, state or local tax consequences with respect to the Note or the ownership or
disposition thereof. Further,we express no opinion herein as to 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 the interest on the Note, or under state and local tax
law.
We render our opinion under existing statutes and court decisions as of the date of
issuance of the Note, and we assume no obligation to update, revise or supplement this opinion
after the issue date to reflect any action hereafter taken or not taken, or any facts or
circumstances, or any change in law or in interpretations thereof, or otherwise,that may hereafter
arise or occur, or for any other reason.
We give no assurances as to the accuracy, sufficiency or completeness of any
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 Note.
The form of said Note is prescribed by Schedule B, 2 of the Local Finance Law of
the State of New York,but we have not examined the executed Note.
Very truly yours,
P t w�i �'•� +'< 7° h. `fit \ � L�� /
yI�\A ,%•m.� .rne /A\ �e� �^:r�.+ • � `g' � u" .iGi uH\ ni %+ .,,u'6•'° Id\ � m .oi ��� I�
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No.8R-1 $2,800,000 $
CUSIP No.844572 PEl J
UNITED STATES OF AMERICA
STATE OF NEW YORK r
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
BOND ANTICIPATION NOTE FOR VARIOUS PURPOSES-2015
4 PRINCIPAL SUM: TWO MILLION EIGHT HUNDRED THOUSAND DOLLARS($2,800,000) ;
INTEREST RATE: One and seventy-five hundredths per centum(1.75%)per annum
DATE OF ISSUE: August 27,2015
MATURITY DATE: August 26,2016
The Town of Southold, in the County of Suffolk, a municipal corp a State-of New York, hereby
acknowledges itself indebted and for value received promises to pay to CEDE& ., a ed owner,or registered assigns
the PRINCIPAL SUM(stated above)on the MATURITY DATE(stated ab ge th interest thereon from the DATE
OF ISSUE(stated above)at the INTEREST RATE(stated above),paya at ty. oth principal of and interest on this :
Note will be paid in lawful money of the United States of America,at th th own Clerk,Town of Southold,Town
Hall,53095 Main Road,PO Boz 1179,Southold,New York
„- Unless this certificate is presented by an authorized repres f e Depository Trust Company to the issuer or its
agent for registration of transfer,exchange or payment,and ertifica ed is registered in the name of Cede&Co.or such
other name as requested by an authorized representative of eposito rust Company and any payment is made to Cede&
Co., ANY TRANSFER, PLEDGE OR OTHER USE F OR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered own of,Ce Co.,has an interest herein.
This Note is the only Note of an autho'ze ombin new and renewal issue,the aggregate principal amount of which
is$2,800,000.
This Note is issued pursuant to a sio f the Local Finance Law,constituting Chapter 33-a of the Consolidated
Laws of the State of New York,vari d re ons adopted by the Town Board on their respective dates,authorizing the
issuance of serial bonds for vari ses ' and for the Town, and the Certificate of Determination executed by the
Supervisor on August 27,2015. b
The faith and cr of o of Southold are hereby irrevocably pledged for the punctual payment of the principal
of and interest on this Note g its terms.
It is hereby certified an ecited that all conditions,acts and things required by the Constitution and statutes of the State
of New York to exist,to have happened and to have been performed precedent to and in the issuance of this Note, exist,have
happened and have been performed,and that this Note,together with all other indebtedness of such Town of Southold,is within
every debt and other limit prescribed by the Constitution of such State.
IN WITNESS WHEREOF, the Town of Southold has caused this Note to be signed by its Supervisor, and its
corporate seal (or a facsimile thereof)to be affixed, impressed, imprinted or otherwise reproduced hereon and attested by its
Town Clerk and this Note to be dated as of the DATE OF ISSUE.
(SEAL)
TOWN OF S OLD
ByAgsaupArvisor
{.
A ST:
Amge--
Town Clerk
'37 O
a
10 1111"!
SWIb ane a .�,.. lean�s
s.caae r.A.,. . ' n n y eei. "e 4:n •' - 1, ` c , u
nv •M1�ue „ ■. � w \ d�'t•: • \w e
au. �� � . 'I ,p\\e0��k• � \p .d Y:>v,n+.,� . • n"'t&".r°"y{' D,j .�
THE DEPOSITORY TRUST COMPANY
55 Water Street
New York,New York 10041 SUBJECT TO COUNT
Attention: Underwriting Packaging Department AND EXAMINATION
Phone: (212)558-8520
Telecopy: (212)344-1533
SAFEKEEPING AGREEMENT
Ref. (Description of issue,number of certificates,number of CUSIPs assigned to issue and$value of securities)
Town of Southold,in the County of Suffolk,New York
$2,800,000 Bond Anticipation Note for Various Purposes-2015,dated August 27,2015,maturing August 26,2016
CUS1P# 844572 PEl (ONE CERTIFICATE) S VALUE $2,800,000
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 control of the above securities for safekeeping.
DTC is authorized to hold these securities in safekeeping until DTC is instructed by telephone or in writing by one of the below designated,
representatives of the ASgent either to: (1)deliver the securities by book-entry to the DTC account of the lead underwriter(or to the DTC
account of its clearing agent)or(2)return the said securities to the Agent.
In the event DTC is instructed to return said securities,DTC shall return the securities to the Agent as soon as practicable,but,in any event,
no later than the DTC business day following the day such instruction is received.
DTC shall hold the Agent, its officers and employees, harmless from any liability, loss, damage, and reasonable expense of any kind in
connection with any loss, damage,theft or destruction 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 of DTC without the specific approval of the Agent
pursuant to this Safekeeping Agreement.
THE AGENT The Depository Trust Company
���By: By: ,�,G'�`
Title: Title: 9UPEWWSOR SSA,
Date: Date:
Authorized Representative of Trustee/Agent
PRINT NAME ORGANIZATION ( )
TELEPHONE NO.
PRINT NAME ORGANIZATION ( )
TELEPHONE NO.
PRINT NAME ORGANIZATION ( )
TELEPHONE NO
DTC accepts authorization of closings on the phone number listed below:
(212)855-3752 (212) 855-3753
(212)855-3755 (212)855-3754
2506739.1 038723 FRMS
Michael Quinn
From: Marie Malsch <mmalsch@jefferies.com>
Sent: Thursday,August 27, 2015 10:37 AM
To: Jarad Bohan; mloguercio@munistat.com;gpeters@munistat.com;
rsikora@munistat.com; nnadelson@munistat.com;tcartwright@munistat.com; Martin
Geiger;William Jackson; Daniel Birmingham; Robert Smith; Christine Cinquemani;John
Cosgrove; Nicole Park; Michael Quinn; Marie Liotta
Cc: Muni-Operations
Subject: RE: CUSIP Confirmation: SOUTHOLD N Y
We are now closed.
Marie Malsch
Assistant Vice President
Municipal Fixed Income
Jefferies LLC
520 Madison Avenue
New York, NY 10022
+1212.336.7103
mmalsch@jefferies.com
From: Marie Malsch
Sent:Thursday, August 27, 2015 9:14 AM
To: Jarad Bohan; mloguercio@munistat.com; gpeters@munistat.com; rsikora@munistat.com; nnadelson@munistat.com;
tcartwright@munistat.com; mgeiger@hawkins.com; wjackson@hawkins.com; dbirmingham@hawkins.com;
rsmith@hawkins.com; CCinquemani@hawkins.com; JCosgrove@hawkins.com; NPark@hawkins.com;
MQuinn@hawkins.com; mliotta@hawkins.com
Cc: Muni—Operations
Subject: RE: CUSIP Confirmation: SOUTHOLD N Y
Good Morning,
The below wire went out this morning, Please give me a call when you are ready to close.
*OUTGOING MONEY TRAN 2,829,095.00
FTJ1508270129966 30000725
CRN: 30000725 RRN: 30000725
B/O: JEFFERIES LLC NJ
DBT: JEFFERIES & COMPANY, INC. HARBORSIDE
FINANCIAL CENTER 705 PLAZA THREE, 7TH FLOOR JERSEY
CITY, NJ 07303-0469
A/C: /630000040 TOWN OF SOUTHOLD
PAY: ABA/021405464 SUFFOLK COUNTY NATIONAL BANK 6
WEST SECOND STREET RIVERHEAD NEW YORK 11901
IMAD: 20150827B1Q8153C001836 TIME: 09:01
Marie Malsch
Assistant Vice President
Municipal Fixed Income
Jefferies LLC
520 Madison Avenue
New York, NY 10022
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-Af No. 5R-1 $729,000
.ffl:
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
A
VARIOUS PURPOSES BOND ANTICIPATION NOTE 2015
PRINCIPAL SUM: SEVEN HUNDRED TWENTY-NINE THOUSAND DOLLARS($729,000)
INTEREST RATE; one and twenty-seven hundredths per centum(1.27%)per annum
DATE OF ISSUE: April 8,2015
MATURITY DATE: April 7,2016
T"he 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 Capital One Public Funding,LLC,Melville,
New York,as registered owner,the PRINCIPAL SUM(stated above)on the MATURITY DATE(stated above),together
with interest thereon from the DATE OF ISSUE (stated above) at the INTEREST RATE (stated above), payable at
maturity. Both principal of and interest on this Note will be paid in lawful money of the United States of America, at the
offices of the Capital One Public Funding,LLC,Melville,New York.
Both principal of and interest on this Note shall be payable only to the registered holder, his legal
representatives,successors or transferees. This Note shall be transferable only upon presentation to such Town Clerk with a
written transfer of title and such Town Clerk shall thereupon register this Note in the name of the transferee in his books and
shall endorse a certificate of such registration hereon. Such transfer shall be dated,and signed by the registered holder,or his
thereto shall be certified
�11"' legal representatives,and it shall be duly acknowledged or proved,or in the alternative the signature
as to its genuineness by an officer of a bank or trust company located and authorized to do business in this State.
This Note is the only Note of an authorized combined renewal issue,the principal amount of which is$729,000.
This Note 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, three bond resolutions duly adopted and amended by the Town Board on their
Certificate of
respective dates, authorizing the issuance of serial bonds for various purposes in and for the Town, and the Certif
Determination executed by the Supervisor as of April 8,2015.
fi The faith and credit of such Town of Southold are hereby irrevocably pledged for the punctual payment of the
e5 1 principal of and interest on this Note according to its terms.
It is hereby certified and recited that all conditions,acts and things required by the Constitution and statutes of the
sir
State of New York to exist;to have happened and to have been performed precedent to and in the issuance of this Note,exist,
have happened and have been performed,and that this Note,together with all other indebtedness of such Town of Southold,
is within every debt and other limit prescribed by the Constitution and laws of such State.
XN
IN WITNESS WHEREOF, the Town of Southold has caused this Note to be signed by its Supervisor, and its
W,• corporate seal (or a facsimile thereof)to be affixed,imprinted,engraved,or otherwise reproduced hereon and attested by its
Town Clerk and this Note to be dated as of the 8th day of April,2015.
TOWN OF SOUTHOLD Baa;F
(SEAL)
By j
Wt lit
ATTEST:
J--I P..tJoy,
a
Town Clerk
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CERTIFICATE OF DETERMINATION OF THE SUPERVISOR
RELATIVE TO AUTHORIZATION, SALE, ISSUANCE, FORM
AND CONTENTS OF A $729,000 VARIOUS PURPOSES
BOND ANTICIPATION NOTE-2015 OF THE TOWN OF
SOUTHOLD,NEW YORK
I, Scott A. Russell, Supervisor of the Town of Southold, in the County of Suffolk,
New York (herein called the "Town"), HEREBY CERTIFY that pursuant to the powers and
duties delegated to me, 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 in paragraphs 1 to 3 hereof, and
subject to the limitations prescribed in said bond resolutions, I have made the following
determinations:
1. A bond anticipation note of the Town in the principal amount of$250,000
shall be issued to renew, in part, the $350,000 bond anticipation note dated April 9, 2014,
maturing April 9, 2015, and heretofore issued in anticipation of the sale of the serial bonds
authorized pursuant to the bond resolution entitled:
"Bond Resolution of the Town of Southold, New York, adopted July
31, 2001 and amended October 21, 2003, appropriating the amount of
$10,500,000, including the amounts of any grants that may be received
from the United States and the State of New York for the increase and
improvement of the facilities of the Fishers Island Ferry District, in
said Town and authorizing the issuance of serial bonds of said Town in
the principal amount of not to exceed $4,800,000 to finance that
portion of said appropriation for which such grants are not available,"
duly adopted and amended by the Town Board on the dates therein referred to, and the
Certificate of Determination executed by the Supervisor on April 9, 2014,the redemption of said
$350,000 note having been provided to the extent of $100,000 from a source other than the
proceeds of serial bonds.
2. A bond anticipation note of the Town in the principal amount of$30,000
shall be issued to renew, in part, the $66,000 bond anticipation note dated April 9, 2014,
maturing April 9, 2015, and heretofore issued in anticipation of the sale of the serial bonds
authorized pursuant to the bond resolution entitled:
"Bond Resolution of the Town of Southold, New York, adopted
August 10, 2010, authorizing the acquisition and installation of
equipment for the fuel management system, stating the estimated
maximum cost thereof is $230,000, appropriating said amount for
such purpose, and authorizing the issuance of$230,000 bonds of
said Town to finance said appropriation,"
2442260.1 034513 CLD
duly adopted by the Town Board on the date therein referred to, and the Certificate of
Determination executed by the Supervisor on April 9,2014,the redemption of said $66,000 bond
anticipation note having been heretofore provided to the extent of$36,000 from a source other
than the proceeds of serial bonds.
3. A bond anticipation note of the Town in the principal amount of$449,000
shall be issued to renew, in part, the $499,000 bond anticipation note dated April 9, 2014,
maturing April 9, 2015, and heretofore issued in anticipation of the sale of the serial bonds
authorized pursuant to the bond resolution entitled:
"Bond Resolution of the Town of Southold, New York, adopted
December 4, 2012, appropriating $861,000 for the increase and
improvement of facilities of the Fishers Island`Ferry District,
including the expenditure of up to $361,000 in available funds of
the District to pay a part of said appropriation; and authorizing the
issuance of not to exceed $500,000 serial bonds of said Town to
finance the balance of said appropriation,"
duly adopted by the Town Board on the date therein referred to, and the Certificate of
Determination executed by the Supervisor on April 9, 2014, the redemption of said $499,000
bond anticipation note having been heretofore provided to the extent of$50,000 from a source
other than the proceeds of serial bonds.
4. Said $250,000 note, said $30,000 note and said $449,000 note shall be
combined for purposes of sale into a single note issue in the aggregate principal amount of
$729,000 (hereinafter referred to as the"Note").
5. The terms,form and details of said Note shall be as follows:
Amount and Title: $729,000 Various Purposes Bond Anticipation Note-2015
Dated: April 8, 2015
Matures: April 7,2016
Number and Denomination: Number 5R-1, at$729,000
Interest Rate per annum: 1.27%
Form of Note: Substantially in accordance with form prescribed by
Schedule B,2 of the Local Finance Law of the State
of New York.
6. The amount of bond anticipation notes and serial bonds originally issued
pursuant to the bond resolution referred to in paragraphs 1 to 3, inclusive, hereof, is (1)
24422601034513 CLD
$4,800,000, (2) $180000 and (3) $500,000. The amount of bond anticipation notes which will
be outstanding after the issuance of the Note, including said Note, will be (1) $250,000, (2)
$30,000 and(3) $449,000.
7. The serial bonds authorized pursuant to the resolutions referred to in
paragraphs 1 and 3, hereof, are for improvements which are assessable. The serial bonds
authorized pursuant to the resolution referred to in paragraph 2, hereof, are for improvements
which are non-assessable
8. Pursuant to said powers and duties delegated to me, I DO HEREBY
AWARD AND SELL said Note to Capital One Public Funding, LLC, Melville, New York,
for the purchase price of$729,000,plus accrued interest, if any, from the date of said Note to the
date of delivery thereof,payable to Capital One Public Funding,LLC as registered owner, and
I FURTHER DETERMINE that said Note shall be payable as to both principal and interest at
Capital One Public Funding, LLC, Melville, New York and shall bear interest at the rate of
one and twenty-seven hundredths per centum(1.27%)per annum,payable at maturity.
9. Said Note shall be executed in the name of the Town by its Supervisor and
the corporate seal of the Town shall be affixed thereto and attested by its Town Clerk.
I HEREBY FURTHER CERTIFY that the powers and duties delegated to me to
issue and sell the Note hereinabove referred to are in full force and effect and have not been
modified, amended or revoked.
IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of April,
2015.
GA6AA;?'
Supervisor
2442260.1034513 CLD
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 true and complete
copy of the Certificate filed with said Town in my office as Town Clerk on April 8, 2015; and
I FURTHER CERTIFY that no bond resolution electing to reassume any of the
powers or duties mentioned in said Certificate and delegated to the Supervisor by the bond
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 8th day of April,
2015.
an-
(SEAL) Town Clerk
2442260.1 034513 CLD
AFFIDAVIT AS TO NO CONFLICT OF INTEREST
STATE OF NEW YORK )
:ss:
COUNTY OF SUFFOLK )
Elizabeth A.Neville, being duly sworn upon her oath deposes and says:
1. I am the duly appointed, qualified and acting Town Clerk of the Town of
Southold, in the County of Suffolk, New York (herein and in Schedule A annexed hereto called
the "Town");
2. That with respect to the contract of sale of the Note of the Town described
in the Certificate of Determination executed by the Supervisor on the 8th day of April, 2015, to
the financial institution indicated in such Certificate, I have made a careful inquiry of each
officer and employee of the Town having the power or duty to (a) negotiate, prepare, authorize
or approve the contract or authorize or approve payment thereunder, (b) audit bills or claims
under the contract, or (c) appoint an officer or employee who has any of the powers or duties set
forth above, as to whether or not such officer or employee has an interest(as defined pursuant to
Article 18 of the General Municipal Law) in such contract;
3. That upon information and belief, as a result of such inquiry, no such
officer or employee has any such interest in said contract unless otherwise noted in Schedule A
annexed hereto and by this reference made a part hereof.
Town Clerk
Subscribed and sworn to before me
this day of April,2015.
Notary Public, State of New York
30HN'A-rUSHMAN=
Notaky i�utttic Mate o/New,York-
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5 n coie, r" !� xp�r� ttgr"R3'f20
2442260.1 034513 CLD
SCHEDULE A
1. is a stockholder of the Purchaser
owning or controlling, directly or indirectly, less than five per centum (5%) of the outstanding
stock thereof but no disclosure of such interest by said officer is required pursuant to said Law.
2. , has an interest in the Purchaser
solely by reason of employment as an officer or employee thereof, but the remuneration of such
employment will not be directly affected as a result of said'contract and the duties of such
employment do not directly involve the procurement, preparation or performance of any such
part of such contract.
3. , has publicly disclosed the nature and
extent of such interest in writing to the governing board of the Town. Such written disclosure
has been made a part of and set forth in the official record of proceedings of the Town.
2442260.1034513 CLD
CERTIFICATES AS TO SIGNATURES,LITIGATION,
AND DELIVERY AND PAYMENT
WE, the undersigned officers of the Town of Southold, in the County of Suffolk,
a municipal corporation of the State of New York (herein referred to as the "Town"), HEREBY
CERTIFY that on or before April 8, 2015, we officially signed and properly executed by manual
signatures a$729,000 Various Purposes Bond Anticipation Note-2015 (the "Note") of the Town,
payable to Capital One Public Funding, LLC, as registered owner, and otherwise described in
Schedule A annexed hereto and by this reference made a part hereof, and that at the time of such
signing and execution and on the date hereof we were and are the duly chosen, qualified and
acting officers of the Town authorized to execute the Note and holding the offices indicated by
the title set opposite our signatures hereto for term expiring on the date set opposite such titles,
and otherwise described in Schedule A annexed hereto and by this reference made a part hereof,
and that at the time of such signing and execution and on the date hereof we were and are the
duly chosen, qualified and acting officers of the Town authorized to execute said Note and
holding the respective offices indicated by the titles set opposite our signatures hereto for terms
expiring on the respective dates set opposite such titles.
WE FURTHER CERTIFY that no litigation of any nature is now pending or
threatened restraining or enjoining the issuance or delivery of said Note or the levy or collection
of any taxes to pay the interest on or principal of said Note, or in any manner questioning the
authority or proceedings for the issuance of said Note or for the levy or collection of said taxes,
or relating to said Note or affecting the validity thereof or the levy or collection of said taxes,
that neither the corporate existence or boundaries of the Town 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 Note has or have been repealed,revoked or rescinded.
WE FURTHER CERTIFY that the seal which is impressed upon this certificate
has been affixed, impressed, imprinted or otherwise reproduced upon said Note and is the legally
adopted,proper and only official corporate seal of the Town.
And I, Scott A. Russell, Supervisor, HEREBY FURTHER CERTIFY that on
April 8, 2015, I delivered or caused the delivery of said Note to Capital One Public Funding,
LLC, Melville, New York, the purchaser thereof, and that at the time of such delivery of said
Note, I received from said purchaser the amount hereinbelow stated, in full payment for said
Note, computed as follows:
Price...............................................................................$729,000.00
Interest on said Note accrued
to the date of such delivery........................................... -0-
Amount Received...........................................................$729,000.00
2442260.1 034513 CLD
r
IN WITNESS WHEREOF, we have hereunto set our hands and said corporate seal
has hereunto been affixed this 8th day of April,2015.
Term of Office
Signature Expires Title
December 31,2015 Supervisor
December 31,20_L7 Town Clerk
(SEAL)
HEREBY CERTIFY that the signatures of the officers of the above-named Town,
which appear above, are true and genuine and that I know said officers and know them to hold
the respective offices set opposite their si ature
John Cushman
Town Comptroller
2442260.1 034513 CLD
r
SCHEDULE A
Amount and Title: $729,000 Various Purposes Bond Anticipation Note-2015
Dated: April 8, 2015
Matures: April 7, 2016
Number and Denomination: Number 5R-1, at$729,000
Interest Rate
per annum: 1.27%
2442260.1 034513 CLD
ATTORNEY'S CERTIFICATE
I, William M. Duffy, Esq., HEREBY CERTIFY that I am a licensed attorney at
law of the State of New York, am the duly chosen, qualified and acting Town Attorney for the
Town of Southold, in the County of Suffolk, a municipal corporation of the State of New York
and herein referred to as the "Town", that no litigation of any nature is now pending or
threatened restraining or enjoining the issuance or delivery of a$729,000 Various Purposes Bond
Anticipation Note-2015 (the "Note") of the Town, payable to Capital One Public Funding,
LLC, Melville, New York, as registered owner, and otherwise described as set forth in
Schedule A annexed hereto and by this reference made a part hereof or the levy or collection of
any taxes to pay the interest on or principal of said Note, or in any manner questioning the
authority or proceedings for the issuance of said Note or for the levy or collection of said taxes,
or relating to said Note or affecting the validity thereof or the levy or collection of said taxes,
that neither the corporate existence or boundaries of the Town 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 Note has or have been repealed,revoked or rescinded.
IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of April,
2015.
Attorney
2442260.1 034513 CLD
SCHEDULE A
Amount and Title: $729,000 Various Purposes Bond Anticipation Note-2015
Dated: April 8, 2015
Matures: April 7, 2016
Number and Denomination: Number 5R-1, at$729,000
Interest Rate
per annum: 1.27%
2442260.1 034513 CLD
CERTIFICATE OF DETERMINATION BY THE SUPERVISOR
RELATIVE TO AUTHORIZATION, SALE, ISSUANCE, FORM
AND CONTENTS OF THE $2,800,000 BOND ANTICIPATION
NOTE FOR VARIOUS PURPOSES-2015 OF THE TOWN OF
SOUTHOLD, IN THE COUNTY OF SUFFOLK,NEW YORK
I, Scott A. Russell, Supervisor of the Town of Southold, in the County of Suffolk,
New York (herein called the "Town"), HEREBY CERTIFY that pursuant to the powers and
duties delegated tome, the chief fiscal officer of the Town, by the Town Board of the Town,
pursuant to the bond resolutions duly adopted and amended and as referred to in the paragraphs
below and subject to the limitations prescribed in said bond resolutions, I have made the
following determinations:
1. A bond anticipation note of the Town in the principal amount of$6,000
shall be issued to renew, in part, the $9,000 bond anticipation note dated August 28, 2014,
maturing August 28, 2015, and heretofore issued in anticipation of the sale of the serial bonds
authorized pursuant to the bond resolution entitled:
"Bond Resolution of the Town of Southold, New York, adopted
July 17, 2007, ratifying the appropriation of $30,000 to finance a
part of the cost of construction of improvements to certain highways
in the Hamlet of Orient, known as Ryder Farm Lane and Park View
Lane; stating the estimated maximum cost thereof is $180,000, with
$150,000 of said cost expected to be paid from other sources; and
authorizing the issuance of $30,000 serial bonds of said Town to
finance said $30,000 appropriation,"
duly adopted by the Town Board on the date therein referred to, and the Certificate of
Determination executed by the Supervisor on August 28, 2014, the redemption of said $9,000
bond anticipation note having been heretofore provided to the extent of $3,000 from a source
other than the proceeds of serial bonds.
2. A bond anticipation note of the Town in the principal amount of$39,000
shall be issued to renew, in part, the $89,000 bond anticipation note dated August 28, 2014,
maturing August 28, 2015, and heretofore issued in anticipation of the sale of the serial bonds
authorized pursuant to the bond resolution entitled.
"Bond Resolution of the Town of Southold, New York, adopted
June 21, 201 1, authorizing the acquisition of equipment for use
by the Highway Department, stating the estimated maximum
cost thereof is $250,000, appropriating said amount for such
purpose, and authorizing the issuance of$250,000 bonds of said
Town to finance said appropriation,"
duly adopted by the Town Board on the date therein referred to, and 'the Certificate of
Determination executed by the Supervisor on August 28, 2014, the redemption of said $89,000
2504809.1 038723 CLD
bond anticipation note having been heretofore provided to the extent of$50,000 from a source
other than the proceeds of serial bonds.
3. A bond anticipation note of the Town in the principal amount of$147,000
shall be issued to renew, in part, the $185,000 bond anticipation note dated August 28, 2014,
maturing August 28, 2015, and heretofore issued in anticipation of the sale of the serial bonds
authorized pursuant to the bond resolution entitled:
"Bond Resolution of the Town of Southold,New York, adopted
June 17, 2014, authorizing the acquisition of a combination
dump/plow/sanding truck for use by the Highway Department,
stating the estimated maximum cost thereof is $185,000,
appropriating said amount for such purpose, and authorizing the
issuance of bonds in the principal amount of not to exceed
$185,000 to finance said appropriation,"
duly adopted by the Town Board on the date therein referred to, and the Certificate of
Determination executed by the Supervisor on August 28, 2014, the redemption of said $185,000
bond anticipation note having been heretofore provided to the extent of$38,000 from a source
other than the proceeds of serial bonds.
4. A bond anticipation note of the Town in the principal amount of$760,000
shall be issued to renew, in part, the $800,000 bond anticipation note dated August 28, 2014,
maturing August 28, 2015, and heretofore issued in anticipation of the sale of the serial bonds
authorized pursuant to the bond resolution entitled:
"Bond Resolution of the Town of Southold, New York, adopted
June 17, 2014, authorizing the replacement of the Bay Avenue
Bridge, stating the estimated maximum cost thereof is $800,000,
appropriating said amount for such purpose, and authorizing the
issuance of bonds in the principal amount of not to exceed
$800,000 to finance said appropriation,"
duly adopted by the Town Board on the date therein referred to, and the Certificate of
Determination executed by the Supervisor on August 28, 2014, the redemption of said $800,000
bond anticipation note having been heretofore provided to the extent of$40,000 from a source
other than the proceeds of serial bonds.
5. (a) A bond anticipation note of the Town in the principal amount of
$675,000 shall be issued to renew, in part, the $825,000 bond anticipation note dated August 28,
2014, maturing August 28, 2015, and heretofore issued in anticipation of the sale of the serial
bonds authorized pursuant to the bond resolution entitled:
"Bond Resolution of the Town of Southold, New York, adopted
September 10, 2013, authorizing the construction of
improvements to Town highway facilities, stating the estimated
maximum cost thereof is $3,500,000, appropriating said amount
2504809 1 038723 CLD
for such purpose, and authorizing the issuance of bonds in the
principal amount of$3,500,000 to finance said appropriation,"
duly adopted by the Town Board on the date therein referred to, and the Certificate of
Determination executed by the Supervisor on August 28, 2014, the redemption of said $825,000
bond anticipation note having been heretofore provided to the extent of$150,000 from a source
other than the proceeds of serial bonds.
(b) A bond anticipation note of the Town in the principal amount of$413,000
shall be issued in anticipation of the sale of the serial bonds authorized pursuant to the resolution
referred to in paragraph 5(a) above.
6. A bond anticipation note of the Town in the principal amount of$510,000
shall be issued in anticipation of the sale of the serial bonds authorized pursuant to the bond
resolution entitled:
"Bond Resolution of the Town of Southold,New York, adopted
June 30, 2015, appropriating $510,000 for the increase and
improvement of facilities of the Southold Solid Waste
Management District, and authorizing the issuance of bonds in
the principal amount of$510,000 to finance said appropriation,"
duly adopted by the Town Board on the date therein referred to.
7. A bond anticipation note of the Town in the principal amount of$250,000
shall be issued in anticipation of the sale of the serial bonds authorized pursuant to the bond
resolution entitled:
"Bond Resolution of the Town of Southold,New York, adopted
May 1, 2015, authorizing the acquisition of a parking lot for
Town parking purposes, stating the estimated maximum cost
thereof is $250,000, appropriating said amount for such
purpose, and authorizing the issuance of bonds in the principal
amount of$250,000 to finance said appropriation,"
duly adopted by the Town Board on the date therein referred to.
8. Said $6,000 note, said $39,000 note, said $147,000 note, said $760,000
note, said $675,000 note, said $413,000 note, said $510,000 and said $250,000 note shall be
combined for purposes of sale into a single note issue in the aggregate principal amount of
$2,800,000 (hereinafter referred to as the "Note").
9. The terms, form and details of said Note shall be as follows:
Amount and Title: $2,800,000 Bond Anticipation Note for Various Purposes-
2015
25048091038723 CLD
Dated: August 27, 2015
Matures: August 26, 2016
Number and
Denomination: Number 8R-1, at$2,800,000
Interest Rate
per annum: 1.75%
The place of payment of principal and interest shall be the office of the Town Comptroller, Town
of Southold, Town Hall, 53095 Main Road, PO Box 1179, Southold,New York, and the form of
note shall be substantially in accordance with the form prescribed by Schedule B,2 of the Local
Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York,
provided that the Note when issued will be (i) registered in the name of Cede & Co. as nominee
of The Depository Trust Company, New York,New York ("DTC") and (ii) deposited with DTC
to be held in trust until maturity. Purchases of ownership interests in the Note will be in book-
entry form in denominations of$5,000, or any integral multiple thereof. Beneficial owners of
the Note will not receive certificates representing their interest in the Note. Unless the Town
determines otherwise, transfers or exchanges of ownership interests in the Note may be
accomplished via book-entry transactions only, as recorded through the book-entry system
established and maintained by DTC or a successor depository.
10. The amount of bond anticipation notes and serial bonds originally issued
pursuant to the bond resolution referred to in paragraphs 1 to 7, inclusive, hereof, is (1) $30,000,
(2) $250,000, (3) $185,000, (4) $800,000, (5) 1,238,000, (6) $510,000 and (7) $250,000. The
amount of bond anticipation notes which will be outstanding after the issuance of the Note,
including said Note, will be (1) $6,000, (2) $39,000, (3) $147,000, (4) $760,000, (5) $1,088,000,
(6) $510,000 and (7) $250,000.
11. The serial bonds authorized pursuant to the resolutions referred to in
paragraphs 1 and 6 are for improvements which are assessable, and the serial bonds authorized
pursuant to the resolutions referred to in paragraphs 2, 3, 4, 5 and 7 are for improvements which
are non-assessable.
12. Pursuant to said powers and duties delegated to me, I DO HEREBY
AWARD AND SELL said Note to Jefferies LLC,New York,New York,for the purchase price
of$2,829,095.00, plus accrued interest, if any, from the date of said Note to the date of delivery
thereof; and I HEREBY FURTHER DETERMINE that said Note shall bear interest at the rate of
one and seventy-five hundredths per centum (1.75%)per annum,payable at maturity.
13. Said Note shall be executed in the name of the Town by its Supervisor and
the corporate seal of the Town or a facsimile thereof shall be affixed, impressed, imprinted or
otherwise reproduced thereon and attested by the Town Clerk.
2504809.1038723 CLD
t
I HEREBY FURTHER CERTIFY that the powers and duties delegated to me to
issue and sell the Note hereinabove referred to are in full force and effect and have not been
modified, amended or revoked.
IN WITNESS WHEREOF, I have hereunto set my hand as of the 27th day of
August, 2015.
Supervisor
2504809.1 038723 CLD
v
47
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 true and complete
copy of the Certificate filed with said Town in my office as Town Clerk on or before August 27,
2015, 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 and exercised by the Supervisor has been adopted by said Town Board.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal of said Town as of the 27th day of
August, 2015.
(SEAL)
Town Clerk
2504809.1038723 CLD
UNDERTAKING TO PROVIDE NOTICES OF EVENTS
Section 1. Definitions
"EMMA" shall mean the Electronic Municipal Market Access System
implemented by the MSRB.
"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, iu 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.
"Purchaser" shall mean the financial institution referred to in the Certificate of
Determination, executed by the Supervisor as of August 27,2015.
"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 $2,800,000 Bond Anticipation Note for
Various Purposes-2015, dated August 27, 2015, maturing on August 26, 2016, and delivered on
the date hereof.
Section 2. Obligation to Provide Notices of Events. (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 to the Electronic Municipal Market Access ("EMMA") System implemented by the
Municipal Securities Rulemaking Board established pursuant to Section 1513(b)(1) of the
Securities Exchange Act of 1934, or any successor thereto or to the functions of such Board
contemplated by the Undertaking, in a timely manner, not in excess of ten (10) business days
after the occurrence of any such event, notice of any of the following events with respect to the
Securities:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults, if material;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
2504809.1 038723 CLD
(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, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed
Issue (IRS Form 5701-TEB) or other material notices of
determinations with respect to the tax status of the Securities, or other
events affecting the tax status of the Securities;
(7) modifications to rights of Securities holders, if material;
(8) Bond calls, if material, and tender offers;
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the
Securities, if material;
(11) rating changes;
(12) bankruptcy, insolvency,receivership or similar event of the Issuer;
Note to clause (12): For the purposes of the event identified in clause
(12) above, the event is considered to occur when any of the following
occur: the appointment of a receiver, fiscal agent or similar officer for
the Issuer in a proceeding under the U.S. Bankruptcy Code or in any
other proceeding under state or federal, law in which a court or
government authority has assumed jurisdiction over substantially all of
the assets or business of the Issuer, or if such jurisdiction has been
assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a
court or governmental authority, or the entry,of an order confirming a
plan of reorganization, arrangement or liquidation by a court or
governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the Issuer;
(13) the consummation of a merger, consolidation, or acquisition involving
the Issuer or the sale of all or substantially all of the assets of the
Issuer, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of
a definitive agreement relating to any such actions, other than pursuant
to its terms, if material; and
(14) appointment of a successor or additional trustee or the change of name
of a trustee, if material.
2504809.1 038723 CLD
y
(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 event except those
events listed above.
Section 3. 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 4. - Parties in Interest. This Undertaking- is executed to assist the
Purchaser to comply with (b)(5) of the Rule and is delivered for the benefit of the Holders. No
other person shall have any right to enforce the provisions hereof or any other rights hereunder.
Section 5. 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);
(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 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
2504809.1 038723 CLD
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 5 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 6. 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 in
accordance with their terms. Upon any such legal defeasance, the Issuer shall provide notice of
such defeasance to the EMMA System. Such notice shall state whether the Securities have been
defeased to maturity or to redemption and the timing of such maturity or redemption.
Section 7. 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 8. 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.
Section 9. No Previous Non-Compliance. Other than as may beset forth in the
Official Statement prepared in connection with the sale of the Securities, the Issuer represents
that in the previous five years it has not failed to comply in all material respects with any
previous undertaking in a written contract or agreement specified in paragraph(b)(5)(i) of the
Rule.
IN WITNESS WHEREOF, the undersigned has duly authorized, executed and
delivered this Undertaking as of August 27, 2015.
TOWN OF SOUTHOLD,NEW YORK
By_ eS
Supervisor
2504809.1 038723 CLD
CERTIFICATES AS TO SIGNATURES, LITIGATION,
AND DELIVERY AND PAYMENT
WE, the undersigned officers of the Town of Southold, in the County of Suffolk,
a municipal corporation of the State of New York (herein referred to as the "Town"), HEREBY
CERTIFY that on or before August 27, 2015, we officially signed and properly executed by
manual signatures the $2,800,000 Bond Anticipation Note for Various Purposes-2015 (the
"Note") of the Town, registered in the name of Cede & Co., as Noteowner and nominee for The
Depository Trust Company and otherwise described in Schedule A annexed hereto and by this
reference made a part hereof, and that at the time of such signing and execution and on the date
hereof we were and are the duly chosen, qualified and acting officers of the Town authorized to
execute said Note and holding the respective offices indicated by the official titles set opposite
our signatures hereto for terms expiring on the respective dates set opposite such titles.
WE FURTHER CERTIFY that no litigation of any nature is now pending or
threatened restraining or enjoining the issuance or delivery of said Note or the levy or collection
of any taxes to pay the interest on or principal of said Note, or in any manner questioning the
authority or proceedings for the issuance of said Note or for the levy or collection of said taxes,
or relating to said Note or affecting the validity thereof or the levy or collection of said taxes;
that neither the corporate existence or boundaries of the Town nor the title of any of the present
officers thereof to their respective offices is being contested; and that no authority or proceedings
f6fthe issuance of said Note has or have been repealed, revoked or rescinded.
WE FURTHER CERTIFY that the seal which is impressed upon this certificate
has been affixed, impressed,imprinted or otherwise reproduced upon said Note and is the legally
adopted,proper and only official corporate seal of the Town.
And I, Scott A. Russell, Supervisor, HEREBY FURTHER CERTIFY that on
August 27, 2015, I delivered or caused the delivery of said Note to The Depository Trust
Company to be held in trust to maturity for Jefferies LLC,New York,New York,the purchaser
thereof, and that at the time of such delivery of said Note,the Town received from said purchaser
the amount hereinbelow stated, in full payment for said Note, computed as follows:
Price................................................................$2,829,095.00
Interest on said Note accrued to the
date of such delivery............................................... -0-
Amount Received............................................$2,829,095.00
2504809 1 038723 CLD
v
IN WITNESS WHEREOF, we have hereunto set our hands and said corporate
seal has hereunto been affixed as of the 27th day of August, 2015.
Term of Office
S' ature Expires Title
December 31, Supervisor
.7)-Ajj� December 31, Town Clerk
2504809.1 038723 CLD
J
CERTIFICATE OF TOWN ATTORNEY
I, William Duffy, Esq., HEREBY CERTIFY that I am a licensed attorney at law
of the State of New York and am the duly chosen, qualified and acting Town Attorney of the
Town of Southold, New York, in the County of Suffolk, a municipal corporation of the State of
New York (herein referred to as the "Town"), that no litigation of any nature is now pending or
threatened restraining or enjoining the issuance or delivery of the Note of the Town, registered in
the name of Cede & Co., as Noteowner and nominee for The Depository Trust Company and
otherwise described as set forth in Schedule A annexed hereto and by this reference made a part
hereof, or the levy or collection of any taxes to pay the interest on or principal of said Note, or in
any manner questioning the authority or proceedings for the issuance of said Note or for the levy
or collection of said taxes, or relating to said Note or affecting the validity thereof or the levy or
collection of said taxes; that neither the corporate existence or boundaries of the Town 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 Note 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 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 or enforce the collection of taxes or other revenues for the
payment of the Note.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of
August, 2015.
Town Attorney
25048091038723 CLD
0
Y
SCHEDULE A
Amount and Title: $2,800,000 Bond Anticipation Note for Various
Purposes-2015
Dated: August 27, 2015
Maturity: August 26, 2016
Number No. 8R-1, at$2,800,000
and Denomination:
Interest Rate 1.75%
per annum:
2504809.1 038723 CLD
TAX CERTIFICATE
I, Scott A. Russell, Supervisor of the Town of Southold, in the County of Suffolk, New
York (the "Issuer"), HEREBY CERTIFY and reasonably expect with respect to the issuance on
August 27, 2015 (the"Issue Date") of the Issuer's $2,800,000 Bond Anticipation Note for
Various Purposes-2015 (the"Notes") as follows in this Tax Certificate(the"Tax Certificate").
Unless the context clearly requires otherwise, all capitalized terms not otherwise defined
herein shall have the meanings set forth in Exhibit A or in the Certificate of Determination (as
defined below),the Code or the Treasury Regulations.
ARTICLE I
GENERAL
1.1. Authorijy of Si nagn torX. I am an officer of the Issuer charged with the
responsibility for the execution, delivery, and issuance of the Notes and I am authorized to act
and I am acting for and on behalf of the Issuer in signing this Tax Certificate.
1.2. Authorization. The Notes are authorized to be issued pursuant to
applicable provisions of the laws of the State of New York, the Local Finance Law, the Charter
of the Issuer, the Certificate of Determination relating to the Notes executed as of August 27,
2015 (the "Certificate of Determination") and various bond resolutions (collectively, the "Bond
Resolution").
1.3. Description of Notes. The Issuer represents that the Notes are described
as set forth in the Certificate of Determination.
1.4. Purpose of Tax Certificate. This Tax Certificate is made and delivered for
the purpose of establishing evidence of the expectations of the Issuer as of the Issue Date as to
future events regarding the amount and use of proceeds of the Notes. It is intended and may be
relied upon for purposes of Code §103 and Code §§141 through 150, and as a certification of
expectations described in Treasury Regulations §1.148-2(b)(2). This Tax Certificate is executed
and delivered as part of the record of proceedings in connection with the issuance of the Notes.
1.5. No Hedge Bonds. As described in Article II hereof, the proceeds of the
Notes will be used for both"new money" and refunding purposes.
(a) As of the Issue Date (i) the Issuer reasonably expects that at least
eighty-five percent (85%) of the spendable proceeds of the Non-Refunding Portion of the Notes
(as defined below) will be used to carry out the governmental purposes of the Notes within three
(3) years of the Issue Date and (ii)not more than fifty percent (50%) of the spendable proceeds
of the Non-Refunding Portion of the Notes will be invested in investment property which would
be acquired with the amounts received as a result of investing original proceeds of the Notes and
would have a substantially guaranteed yield for four(4) years or more.
(b) The Issuer certifies that (i) as of the issue date of the Prior Notes (as
defined below), the Issuer reasonably expected that at least eighty-five percent (85%) of the
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spendable proceeds of the Prior Notes would be used to carry out the governmental purposes of
such issue within three (3) years of the issue date thereof and (ii) not more than fifty percent
(50%) of the spendable proceeds of the Prior Notes was invested in investment property which
(1) was acquired with the amounts received as a result of investing original proceeds of such
issue and (2)had a substantially guaranteed yield for four(4) years or more. For purposes of the
preceding sentence,the Prior Notes includes, as applicable, each issue of obligations refunded by
the Prior Notes.
1.6. Reasonable Expectations. This Tax 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 Notes will not be used in a manner that would cause the Notes to be
"arbitrage Notes" under Code §148 or "private activity bonds" under Code §§103 and 141. 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.
1.7. Sale of the Notes. The Notes were sold in a competitive sale to Jefferies
LLC, New York, New York (the "Purchaser") on August 19, 2015. The Notes are being
delivered to the Purchaser for resale to the general public. The Purchaser is delivering good
funds in exchange for the Notes on the date hereof.
1.8. Single Issue. All the Notes were sold at the same time, pursuant to the
same plan of financing, and are reasonably expected to be paid from substantially the same
source of funds. No other tax-exempt obligations have been or will be sold within fifteen (15)
days of the sale of the Notes pursuant to the same plan of financing as the Notes that are
reasonably expected to be paid from substantially the same source of funds as the Notes.
Accordingly, the Notes are treated as a single issue of obligations for federal income tax
purposes and no other tax-exempt obligations of the Issuer will be treated as part of the same
issue as the Notes for purposes-of complying with federal tax law requirements. For purposes of
this Section, obligations are considered sold on the earlier of the date a commitment letter, bond
purchase agreement or contract of purchase is executed.
1.9. No Federal Guarantee. The Issuer represents that, except for the Gross
Proceeds of the Notes which are (a) invested during the temporary periods referred to in
Article IV, (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 51l(a) of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, or any successor provision to Section 21B(d)(3) of the federal Home
Loan Bank Act, as amended:
(a) No portion of the payment of principal of or interest on the Notes is or will
be guaranteed directly or indirectly by the United States or any agency or instrumentality thereof
(herein"federally Guaranteed"); and
(b) No portion of the Gross Proceeds of the Notes in excess of five percent
(5%) of such Gross Proceeds is or will be (i)used in making loans with respect to which the
payment of principal or interest with is to be federally guaranteed, or (ii) invested directly or
indirectly in federally insured deposits or accounts.
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For purposes of this Tax Certificate, generally, Gross Proceeds consist of Sale Proceeds,
Transferred Proceeds, if any, Investment Proceeds and Replacement Proceeds, if any, of the
Notes.
1.10. Tax Representation. The Issuer will comply with all the procedures and
provisions set forth herein, and will do and perform all acts and things necessary and within its
reasonable control in order to assure that interest paid on the Notes shall be excluded from gross
income of the owners thereof for the purpose of federal income taxation.
1.11. Additional Information. The Issuer will provide such other information as
may be required to assure the exclusion from gross income of interest on the Notes for federal
income taxation purposes.
1.12. Noncompliance. The Issuer shall perform each of the representations
undertaken by it in this Tax Certificate unless, in the written opinion of Bond Counsel,
noncompliance therewith will not cause interest on the Notes to be included in gross income for
purposes of federal income taxation.
1.13. Reliance by Bond Counsel. The representations and certifications of the
Issuer expressed in this Tax Certificate may be relied upon by Bond Counsel in connection with
the rendering of any opinion with respect to the Notes.
1.14. Reliance on Other Parties. In making its representations and certifications
in this Tax Certificate and in establishing its expectations regarding uses of Gross Proceeds of
the Notes to assure compliance with Code §§103 and 141 through 150 generally, the Issuer has
relied on representations and certifications of other parties referenced in this Tax Certificate and
the Exhibits hereto with respect to the certified matters. Based on the various roles and
responsibilities of such other parties with respect to the certified matters, the Issuer believes that
such reliance is reasonable and prudent. The Issuer is unaware of any fact or circumstance that
would cause it to question the accuracy or reasonableness of any such certification. These
certifications include, without limitation: (i) the certificate of the Purchaser relating to the issue
price of the Notes, attached hereto as Exhibit E, and (ii)financing schedules (the "Financing
Schedules"),which are attached hereto as Exhibit F.
1.15. IRS Form 8038-G. Certain information provided by the Purchaser and the
Issuer's financial advisor have been provided to the Issuer and Bond Counsel for the purpose of
completing the IRS Form 8038-G. The Issuer represents that the information contained in the
IRS Form 8038-G is consistent with the computations, schedules and information provided by
the Purchaser and the Issuer's financial advisor. The Issuer has reviewed the IRS Form 8038-G
with respect to the Notes and to the best of its knowledge the information contained therein is
true, accurate and complete. The Issuer acknowledges that Bond Counsel prepared the IRS Form
8038-G on behalf of the Issuer based solely on the information contained in this Tax Certificate
and information provided by the Purchaser and/or the Issuer's financial advisor. The Issuer will
arrange for the filing of IRS Form 8038-G with respect to the Notes by the 15'�' day of the second
month after the calendar quarter in which the Notes are issued.
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1.16. Multipurpose Issue. The Issuer hereby elects, pursuant to Treasury
Regulations §§1.148-9(h) and 1.150-1(c)(3), to treat the portion of the Notes allocable to the
refunding of the Refunded Notes (referred to herein as the "Refunding Portion of the Notes") and
the portion of the Notes allocable to the costs of the Projects (referred to herein as the
"Non-Refunding Portion of the Notes") as separate issues solely for certain federal tax purposes.
ARTICLE II
1
USE OF PROCEEDS
2.1. PgMose(s) of the Notes. The proceeds of the Notes will be used to:
(a) provide moneys for the original financing of various Capital Projects of
the Issuer, (collectively,the "New Money Projects"), as more fully described in the Certificate of
Determination and summarized in Exhibit C attached hereto;
(b) redeem the Issuer's $2,044,000 Bond Anticipation Note for Various
Purposes-2015 maturing on August 28, 2015 (the "Prior Notes") which was heretofore issued to
finance costs of the Refunded Projects (as defined below); and
(c) pay costs of issuance of the Notes, including the Purchaser's
compensation with respect to the Notes.
The Prior Notes to be current refunded with the proceeds of the Refunding
Portion of the Notes is collectively referred to herein as the "Refunded Notes."
2.2. Debt Service Savings. [Intentionally Omitted]
2.3. Proceeds of Prior Notes. (a) The proceeds of the Prior Notes were used
to: (1)refinance certain Bond Anticipation Notes issued by the Issuer, the proceeds of which
were used to finance and refinance all or a portion of the costs of various capital projects of the
Issuer (as summarized in Exhibit C attached hereto) (collectively, the "Refunded Projects," and
together with the New Money Projects, the "Projects"), and (2) pay costs of issuing the Prior
Notes.
(b) The Issuer represents that Private Use (as defined herein), if any, with
respect to the proceeds of the Prior Notes as certified in the tax certificate executed with respect
to the Prior Notes has not changed since the date of issue thereof.
2.4. Amount and Application of Sale Proceeds of the Notes. The Sale
Proceeds will be applied as follows:
Sources Total
Par Amount $2,800,000.00
Original Issue Premium 30,212.00
Total Sources $2.830.212.00
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Uses
Project Expenditures $1,173,000.00
Redemption of Prior Notes 1,627,000.00
Purchaser's Compensation 1,117.00
Cost of Issuance 7,000.00
Additional Proceeds 22,095.00
Total Uses 2.830.212.00
2.5. Excess or Unused Sale Proceeds of the Notes. The Issuer expects the
amount of proceeds of the Notes used to finance the Projects and refund the Prior Notes will not
be less than $2,830,212.00 (including allocable costs of issuance). To the extent not so used,
such proceeds will be (i) used to pay capitalized interest on the Non-Refunding Portion of the
Notes; (ii) applied to the next payment of principal of or interest on the Notes, or (iii) used for
such other purpose as is approved in writing by Bond Counsel.
ARTICLE III
USE OF PROJECTS AND LIMITATIONS ON PRIVATE ACTIVITY
3.1. Ownership/Lease/Sale. While the Notes remain outstanding, all of the
Projects will be owned by the Issuer or another Governmental Unit and will not be owned by or
leased to any person who is not a Governmental Unit. The Projects will not(except to the extent
that any portion of the Projects were financed with grants, if any) be sold or otherwise disposed
of, in whole or in part, except for incidental sales of surplus items the proceeds of which will not
constitute net operating profits or net capital profits to the Issuer, and minor parts or portions as
may be disposed of in the ordinary course of business due to normal wear and tear, obsolescence
or depreciation or similar purposes,prior to the final maturity date of the Notes.
3.2. No Private Loans. While the Notes remain outstanding, none of the
proceeds of the Notes are being or will be used, directly or indirectly, to make loans to persons
other than a Governmental Unit while the Notes remain outstanding. The Issuer will not make
any private loans from the proceeds of the Notes after the Issue Date unless the Issuer has
received a written opinion of Bond Counsel that such private loan will not adversely affect the
exclusion of the interest on the Notes from gross income for purposes of federal income taxation.
3.3. Limitations on Private Use. At all times while the Notes remain
outstanding, less than the lesser of$15,000,000 or ten percent (10%) of either: (a)the aggregate
amount of the proceeds of the Notes are used or expected to be used, directly or indirectly, in a
trade or business carried on by a person other than a Governmental Unit ("Private Use") or
(b)the aggregate present value of the debt service on the Notes during the term thereof is
expected to be, under the terms of the Notes or any underlying arrangement, directly or
indirectly, secured by any interest in property used or to be used for Private Use or in payments
in respect of property used or to be used for Private Use or is to be derived from payments,
whether or not to the Issuer, in respect of property or borrowed money used or to be used for
Private Use. Payments by a person for use of proceeds do not include the portion of any
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payment that is properly allocable to the payment of ordinary and necessary expenses (as defined
under Code §162) directly attributable to the operation and maintenance of the financed property
used by that person. For this purpose, general overhead and administrative expenses are not
directly attributable to those operations and maintenance.
3.4. Unrelated/Related Disproportionate Use. At all times while the Notes
remain outstanding, less than the lesser of $15,000,000 or five percent (5%) of either: (a) the
proceeds of the Notes 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 Projects, including any private loan financing described in Section 3.2
hereof which meets this test or (b) the aggregate present value of the debt service on the Notes
during the term thereof is expected to be, under the terms of the Notes or any underlying
arrangement, directly or indirectly, secured by any interest in property used or to be used for
Private Use or in payments in respect of property used or to be used for Private Use or is to be
derived from payments, whether or not to the Issuer, in respect of property or borrowed money
used or to be used for Private Use. Payments by a person for use of proceeds do not include the
portion of any payment that is properly allocable to the payment of ordinary and necessary
expenses (as defined under Code §162) directly attributable to the operation and maintenance of
the financed property used by that person. For this purpose, general overhead and administrative
expenses are not directly attributable to those operations and maintenance. For purposes of this
Tax Certificate, proceeds of the Notes are allocable to a disproportionate related Private Use to
the extent that the proceeds of the Notes which are to be used to finance property used by a
nongovernmental person in a trade or business which is related to the governmental use of the
property exceeds the proceeds of the Notes which are to be used for the governmental use to
which such Private Use relates.
3.5. Private Use Defined. (a) For purposes of Sections 3.3 and 3.4 hereof,
Private Use consists of any agreement, contract or other arrangement including, without
limitation, leases, management contracts, guarantee contracts, take or pay contracts, put or pay
contracts, output contracts or research contracts which provides for use of any portion of the
Projects by a person(s) who is not a Governmental Unit on a basis different than the general
public. The Issuer will not enter into any such contract or arrangement unless the Issuer has
obtained an opinion from Bond Counsel that such contract or arrangement does not adversely
affect the exclusion of interest on the Notes from gross income for purposes of federal income
taxation. None of the Projects were financed or are being financed or refinanced for use by any
specific user(other than the Issuer).
(b) Use by State or Local Governmental Units. The Projects, including
service or capacity from the Projects, if any, may be used by or on behalf of a Governmental
Unit provided that there is no transfer or flow-through of such use to any person or entity
carrying on any trade or business that does not constitute General Public Use (as defined in
subsection(c)below).
(c) General Public Use. The Projects, including service or capacity from the
Projects, if any, may be used by any person or entity, including any person or entity carrying on
any trade or business without any Private Use arising therefrom, if such use constitutes General
Public Use. "General Public Use" is any arrangement providing for use that is available to the
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general public at either (i) no charge, or(ii) on the basis of rates that are generally applicable and
uniformly applied. For this purpose, rates may be treated as generally applicable and uniformly
applied even if(i) different rates apply to different classes of users, such as volume purchasers, if
the differences in rates are customary and reasonable, or (ii) a specially negotiated rate
arrangement is entered into, but only if the user is prohibited by federal law from paying the
generally applicable rates, and the rates established are as comparable as reasonably possible to
the generally applicable rates. The Issuer imposes generally applicable and uniform rates and
charges, if any, on all users of the facilities, service or capacity of the Projects pursuant to the
schedules of rates and charges adopted by the Issuer from time to time.
(d) No Priority Rights or Other Preferential Benefits. The Projects, including
service or capacity from the Projects, if any, will not be used by any person or entity under any
arrangement that conveys priority rights or other preferential benefits except as may be permitted
by subsection(b) above.
(e) 200 Days General Public Use Arrangements. An arrangement is not
treated as General Public Use if the term of the use under the arrangement, including all renewal
options, is not greater than two hundred (200) days. For this purpose, a right of first refusal to
renew use under the arrangement is not treated as a renewal option if(i)the compensation for the
use under the arrangement is redetermined at generally applicable, fair market value rates that
are in effect at the time of renewal, and (ii) the use of the financed property under the same or
similar arrangements is predominantly by natural persons who are not engaged in a trade or
business.
(f) 100 Days Limited General Public Use Arrangements. The Projects,
including service or capacity from the Projects, if any,may be used by any person or entity under
any arrangement for use (other than as an owner) for a term (including renewal options) not
longer than one hundred (100) days,provided that the arrangement would be General Public Use
except that it is not available on the same basis for use by natural persons because generally
applicable and uniformly applied rates are not reasonably available to natural persons not
engaged in a trade or business and the Projects are not financed for the principal purpose of such
Private Use.
(g) 50 Days Negotiated Arm's-Length Use Arrangements. The Projects,
including service or capacity from the Projects, if any, may be used by any person or entity under
any arrangement (other than as an owner) for a term (including renewal options) not longer than
fifty (50) days, provided the arrangement is negotiated at arm's-length, the compensation paid
for the use is at fair market value and the Projects are not financed for the principal purpose of
such Private Use.
The term limits described in each of the three foregoing contractual arrangements
(i.e., paragraphs (e), (f) and (g) above) are not required to relate to consecutive days (e.g., if the
contract provides for use of a bond-financed facility for ten (10) days per year for six (6) years,
the contract could not comply with the requirements applicable to contractual arrangements set
forth in paragraph(g) above,because the term of the contract would exceed fifty (50) days.)
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(h) Incidental Use Arrangements. The Projects may be used by any person or
entity where the use is incidental if, except for vending machines, pay telephones, kiosks and
similar uses, the use does not involve the transfer of possession and control of space separated
from other areas of the facility by walls,partitions,barriers and the like,the nonpossessory use is
not functionally related to any other use of such portion of the Project by the same person (other
than a different nonpossessory use) and all nonpossessory uses do not in the aggregate exceed
2.5%of the Projects or such facility.
3.6. Management and Operations Contracts. The Issuer manages and operates
all of the Projects. The Issuer will not enter into any management contract or operating
agreement with any person or entity for management services or operating activities to be
provided at or with respect to the Projects, while the Notes remain outstanding, except: (a) with
respect to contracts or arrangements which do not constitute Private Use of the Projects under
Code §141(b), (b) with respect to contracts or arrangements which satisfy the "safe harbors" set
forth in IRS Rev. Proc. 97-13, 1997-1 C.B. 632, as amended or supplemented from time to time
(each a "Safe Harbor Management Contract") as summarized in Exhibit D attached hereto,
(c)with respect to contracts or arrangements that do not give rise to use of Bond-financed
property by a non-Governmental Unit of more than the amount of such non-qualified use
permitted by the Code, as measured in the aggregate, or (d) in the event that the Issuer receives
an opinion of Bond Counsel that such contracts or arrangements will not adversely affect the
exclusion of the interest on the Notes from gross income for federal income taxation purposes.
3.7. Monitoring and Measurement of Private Activity. (a) The Issuer
represents that it will monitor the amount of Private Use of the Projects to ensure that the
aggregate amount of such use of the Projects will not exceed the applicable limits described in
this Article. The Issuer has established or will establish procedures for monitoring the amount of
Private Use at the Projects. The Issuer will consult with Bond Counsel and other legal counsel
and advisers as necessary to determine whether, and to what extent, if as a result of any Private
Use of the financed or refinanced facilities any remedial action is required under Treasury
Regulation §1.141-12.
(b) The amount of Private Use of a Project is determined according to the
average percentage of Private Use of such Project during the measurement period. To the extent
that the Projects are owned by the Issuer, the measurement period with respect to a Project
(i)begins on the later of the Issue Date of the Notes or the placed-in-service date of the Project,
and (ii) ends on the earlier of the expiration date of the economic life of the Project or the last
maturity of the Notes. The average percentage of Private Use is the average of the percentages
of Private Use during the one-year periods within the measurement period and is to be
determined, with appropriate adjustments, as provided in the Treasury Regulations.
(c) The Issuer also agrees to monitor the amount of private payments and
private security at each Project to ensure that the present value of the aggregate amount of
private payments and private security at the Projects financed with the proceeds of the Notes will
not exceed: (i) five percent (5%) with respect to unrelated or related and disproportionate
Private Use described in Section 3.4 above, and (ii) ten percent (10%) with respect to total
Private Use described in Section 3.3 above, of the present value of the aggregate debt service on
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(the Notes. Such present values are to be determined, with appropriate adjustments, as provided
in the Treasury Regulations.
(d) The Issuer will advise Bond Counsel not less than annually of any change
in the amount of. (i) unrelated or related and disproportionate Private Use described in
Section 3.4 above, (ii) Private Use described in Section 3.3 above, and (iii) the corresponding
amount of private payments and private security arising from any contract or other arrangement
including, without limitation, ownership, leases, management and operation contracts, research
agreements, guarantee contracts, take or pay contracts, put or pay contracts, or other output
contracts or any other action or event described in this Article.
3.8. No Pooled Loan Financings. None of the proceeds of the Notes will be
used directly or indirectly to make or finance loans to two or more ultimate borrowers (including
loans referred to in Section 3.2 hereof and loans to Governmental Units).
ARTICLE IV
ARBITRAGE
4.1. Issue Price. Based on the representations of the Purchaser, as set forth in
Exhibit E attached hereto, the aggregate issue price of the Notes is $2,830,212.00 (the"Issue
Price"), representing the stated principal amount of$2,800,000.00, plus original issue premium
on the Notes in the amount of$30,212.00.
4.2. Note yield and Investment Yield. (a) When used in this Tax Certificate,
the term "yigld" refers to yield computed by the actuarial or present value method using a
360-day year and semiannual compounding, and means that discount rate which, when used in
computing the present value of all payments of principal and interest to be paid on an obligation,
produces an amount equal to the Issue Price thereof in the case of the Notes and the purchase
price in the case of investments purchased with Gross Proceeds of the Notes.
(b) The Notes constitute a Fixed Yield Issue. The yield on the Notes has been
computed by the Purchaser, in compliance with Treasury Regulations §1.148-4,to be 0.659781%
(the "Note yield"). The Note yield will not be affected by subsequent unexpected events, except
to the extent provided in Treasury Regulations §1.148-4(h) when and if the Issuer enters into a
Qualified Hedge or into any transaction transferring, waiving or modifying any right that is part
of the terms of the Notes. The Issuer will consult with Bond Counsel prior to entering into any
of the foregoing transactions.
(c) None of the Notes are subject to mandatory, contingent or optional
redemption.
(d) The Issuer has not entered into any Qualified Hedge with respect to the
Notes.
(e) No amount has been or will be paid by or on behalf of the Issuer to any
entity as a payment for a Qualified Guarantee with respect to the Notes.
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4.3. Temporary Periods. The Issuer will not invest the Gross Proceeds of the
Notes in Investments at yields that are materially higher, as that term is defined in Treasury
Regulations §1.148-2(d) ("MateriallHigher'), than the Note yield except as set forth in this
Section or Article VI below.
(a) Temporary Period for Bond Proceeds Used for Capital Projects. The
Issuer reasonably expects that, as of the date hereof. (i) the Issuer will enter into within six (6)
months after the date hereof a substantial binding obligation to a third party to expend at least
five percent (5%) of the Net Sale Proceeds of the Non-Refunding Portion of the Notes on the
Projects; (ii)the completion of the Projects and use of Net Sale Proceeds Non-Refunding Portion
of the Notes will proceed with due diligence to completion; and (iii) at least eighty-five percent
(85%) of the Net Sale Proceeds of the Non-Refunding Portion of the Notes will be spent on the
Projects within three (3) years of the date hereof. As a result, proceeds of the Non-Refunding
Portion of the Notes used to finance the costs 6f the Projects may be invested without Yield
Restriction for a period not to exceed three (3)years from the date hereof and,thereafter, shall be
invested at a Yield not in excess of the Yield on the Notes plus one-eighth of one percentage
point (1/8%). Investment earnings on obligations acquired with such proceeds may be invested
without Yield Restriction for a period not exceeding three (3) years from the date hereof or one
(1) year from the receipt thereof, whichever is longer, and, thereafter, shall be invested at a Yield
not in excess of the Yield on the Notes plus one-eighth of one percentage point(%8%).
(b) Temporary Period for Current Refunding of the Notes. The proceeds of
the Refunding Portion of the Notes may be invested without Yield Restriction for a period not to
exceed ninety (90) days from the date hereof and, thereafter, shall be invested at a Yield not in
excess of the Yield on the Notes plus one-eighth of one percentage point(1/8%).
(c) Temporary Period for Investment Earnings. Except as otherwise provided
in this Section, investment earnings and all amounts received by the Issuer from the investment
of Gross Proceeds of the Notes may be invested without Yield Restriction for a one (1) year
period beginning on the date of receipt but in no event longer than the temporary period
applicable to the source of such investment.
(d) Temporary Period for Costs of Issuance. Proceeds of the Notes used to
pay costs of issuance of the Notes may be invested without Yield Restriction for a temporary
period not to exceed thirteen(13) months from the Issue Date and will be subject to rebate.
(e) Temporary Period for Bona Fide Debt Service Fund As further discussed
in Section 7.2 below, amounts deposited in a Bona Fide Debt Service Fund may be invested
without Yield Restriction for a period of thirteen (13) months from the date of deposit in such
fund.
(f) Minor Portion. A minor portion of the Gross Proceeds of the Notes may
be invested without Yield Restriction in an amount not exceeding the lesser of(i) $100,000 or
(ii) five percent(5%) of the Sale Proceeds.
4.4. Transferred Proceeds. A portion of the proceeds of the Prior Notes in the
amount of$87,897.52, remains unexpended as of the Issue Date. $1,263.25 is being used to pay
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debt service on the Prior Notes. Such moneys may be invested without Yield Restriction for a
period of three (3) years from the issue date of the Prior Notes. Starting on the third (3rd)
anniversary of the issue date of the Prior Notes, such moneys shall be invested at a Yield not in
excess of the Yield on the Notes. For purposes of determining if such unexpended proceeds of
the Prior Notes satisfy the requirements of the eighteen month spending exception to rebate or
the two year spending exception to rebate, such moneys are treated as proceeds of the Prior
Notes and the measurement of the spending period for such unexpended proceeds begins on the
issue date of the Prior Notes. See Section 5.3(e)hereof.
4.5. Escrow Deposit Fund. [Intentionally Omitted]
4.6. Current Refunding and Redemption Date. The proceeds of the Refunding
Portion of the Notes will be spent within ninety (90) days after the Issue Date to retire or pay
debt service and redemption premium, if any, on the Refunded Notes. The redemption date of
the Refunded Notes is August 28,2015.
4.7. Yield Reduction Payments. Notwithstanding any of the provisions in this
Tax Certificate that require Sale Proceeds of the Notes and investment earnings thereon to be
invested at a yield not in excess of the Note yield, the yield on certain investments acquired with
proceeds of the Notes will not be considered to be higher than the applicable yield limitation
described herein if the Issuer makes or causes to be made Yield Reduction Payments to the
United States Treasury at the time and in the amounts described in Treasury Regulations §1.148-
5(c). The Issuer will consult with Bond Counsel prior to making any investments in reliance on
its eligibility to make Yield Reduction Payments.
4.8. Yield Restricted Money. Amounts that must be Yield Restricted, if any,
will be invested in either: (i) Nonpurpose Investments at a fair market price which produces a
yield not Materially Higher than the Note yield, (ii) SLGS which produce yield not Materially
Higher than the Note yield, or(iii) Tax-Exempt Obligations.
4.9. Universal Cap. (a) On each Valuation Date, the Issuer shall value the
Universal Cap and the Nonpurpose Investments allocable to the Notes thereunder. Nonpurpose
Investments in a Bona Fide Debt Service Fund do not reduce the aggregate value of Nonpurpose
Investments that may be allocated to the Notes under the Universal Cap. Nonpurpose
Investments cease to be allocated to the Notes 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 Notes under the Universal Cap. To the extent
Nonpurpose Investments cease to be allocated to an issue and the value of the Universal Cap
exceeds the value of the remaining Nonpurpose Investments allocated to such issue, other
Nonpurpose Investments may become allocated to the issue, provided that such Nonpurpose
Investments are not already properly allocated to another issue and that such allocation does not
cause the value of Nonpurpose Investments allocated to the Notes to exceed the Universal Cap.
Generally, if Gross Proceeds of the Notes invested in Nonpurpose Investments exceed the
Universal Cap on a Valuation Date, such Nonpurpose Investments cease to be allocated to the
Notes in the following order:
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(i) amounts allocable to Replacement Proceeds,
(ii) amounts allocable to Transferred Proceeds,
(iii) amounts allocable to Sale Proceeds and Investment Proceeds.
(b) Amounts are allocable to only one issue at a time as Gross Proceeds.
Amounts that are original proceeds or transferred proceeds allocable to an issue must be so
allocated to that issue and may not be allocated instead as replacement proceeds to another issue.
Amounts cease to be original proceeds or transferred proceeds allocated to an issue only when
they are properly allocated to an expenditure for a governmental purpose, when they become
transferred proceeds of another issue or when they cease to be allocated to an issue by operation
of the Universal Cap. Where a Nonpurpose Investment ceases to be allocated to the Notes, such
Nonpurpose Investment is subject to 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 Notes.
(c) Notwithstanding anything herein to the contrary,the failure to perform the
determination of Nonpurpose Investments allocable to the Notes as of a Valuation Date shall not
be considered a violation of this provision if the value of Nonpurpose Investments allocated to
the Notes did not exceed the value of the Notes outstanding on such date.
4.10. No Prohibited Payments. The Issuer has not entered into and will not
enter into any transaction to reduce the Yield on the Investment of the Gross Proceeds of the
Notes 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 Note yield had not been
relevant to either party.
4.11. No Overissuance. The proceeds of the Notes, including investment
proceeds,will not exceed the amount necessary for the purpose(s) of the Notes.
4.12. Disposition Receipts. The Issuer will consult with Bond Counsel as to
how to invest and dispose of any amounts received from the condemnation, insurance, or
disposition of any part of the Projects.
4.13. No Replacement Proceeds. No Replacement Proceeds (as defined in
Treasury Regulations §1.148-1(c)) are expected to be created as a result of issuing the Notes, as
the weighted average maturity of the Notes as set forth in Exhibit F attached hereto does not
exceed one hundred twenty percent (120%) of the remaining weighted average economic life of
the Projects as set forth in Exhibit C attached hereto. The average economic life of the Projects
are assumed to have been assigned the "period of probable use" as defined under the State of
New York Local Finance laws. The Issuer confirms that the Notes are outstanding for a period
that is reasonably required to accomplish the governmental purpose of financing the Projects
with the proceeds of the Notes.
4.14. Fair Market Value. The Issuer will not acquire Nonpurpose Investments
at other than an arm's-length,Fair Market Value price.
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ARTICLE V
REBATE
5.1. Rebate Com 1p iance. The Issuer understands that the continued exclusion
of interest on the Notes from gross income for purposes of federal income taxation depends, in
part, upon compliance with the arbitrage limitations imposed by Code §148, including the rebate
requirements described in this Article. The Issuer shall do and perform all acts and things
necessary in order to assure that the arbitrage and rebate requirements of Code §148 are met.
5.2. Calculation of Rebate Amount Code §148(f) requires the payment to the
United States of the excess of the amount earned on the investment of Gross Proceeds of the
Notes in Nonpurpose Investments over the amount that would have been earned had the amount
so invested been invested at a rate equal to the Note yield, together with any income attributable
to such excess. Except as provided below, all Gross Proceeds of the Notes are subject to this
requirement. In order to meet the rebate requirement of the Code, the Issuer will take the
following actions:
(a) Record of Investments. The Issuer will record the date of receipt, amount
and source of any Gross Proceeds of the Notes, e.g., Sale Proceeds, Replacement Proceeds, loan
repayments, investment earnings. For each Nonpurpose Investment acquired with or allocated to
Gross Proceeds of the Notes, 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 of the Notes, its Value on the date the Nonpurpose
Investment is allocated to Gross Proceeds of the Notes, accrued interest due on its purchase date
or allocation date, its face amount, its coupon rate, its yield, the frequency of its interest
payment, its disposition price (excluding any broker or dealer's commission or discount), the
accrued interest due on its disposition date and its disposition date. In addition, the Issuer will
record the date and amount of all expenditures made with Gross Proceeds of the Notes, including
the payment of any Rebate Amount(as defined below).
(b) Method for Computing Yield For each Computation Period, the Issuer
shall determine, if required, the Note yield computed as required by Treasury Regulations
§1.148-4(b). When expressed as a decimal, yield will be accurate to at least four (4) decimal
places.
(c) Eli ig bilit off Qualified Guarantee. Payments for a Qualified Guarantee
will be eligible to be taken into account as Issue Payments for purposes of computing the Note
yield only if the payment for the guarantee represents a reasonable payment for a Qualified
Guarantee.
(d) Computation of Rebate Amount Subject to the special rules set forth in
paragraph (e) of this Section, the Issuer will determine the Rebate Amount on each Computation
Date. The "Rebate Amount"as of any Computation Date is the excess of the Future Value of all
receipts with respect to Nonpurpose Investments over the Future Value of all payments with
respect to the purchase of Nonpurpose Investments or the allocation of such investments to the
proceeds of the Notes, determined as of each Computation Date. To the extent amounts received
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from investments are reinvested, these amounts may be netted against each other and not taken
into account in the Computation of the Rebate Amount. The Issuer shall determine the
nonpurpose receipts and nonpurpose payments as described below.
(i) Receipts. Receipts with respect to Nonpurpose Investments include
(A) actual receipts, amounts actually or constructively received with respect to an
investment, reduced by Qualified Administrative Expenses; (B) 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); (C) Computation Date Receipts, the Market Value (Present Value, in the
case of Investment Contracts and fixed rate investments) of all Nonpurpose Investments
allocated to the issue at the close of business on a Computation Date; and (D)rebate
receipts, any recovery of an overpayment of rebate.
(ii) Payments. Payments with respect to Nonpurpose Investments include
(A) direct payments, the amount of Gross Proceeds of the issue directly used to purchase
the investment, including Qualified Administrative Expenses; (B) constructive payments,
the Value of an investment allocated to (but not directly purchased with) Gross Proceeds
on the date so allocated; (C)Nonpurpose Investments allocated to an issue at the end of
the preceding Computation Period, at the value of the investments at the beginning of the
computation period; (D)rebate payments, payments of rebate amounts when due and
Yield Reduction Payments on Nonpurpose Investments; and (E)the Computation Date
Credit.
(e) Rebate Exceptions. In connection with the rebate requirement the
following exceptions shall apply to the Notes. Under Treasury Regulations §1.148-7(b)(2), the
exceptions to rebate set forth in Subsections 5.2(e)(i), (ii) and (iii) above shall apply separately to
the Non-Refunding Portion of the Notes and the Refunding Portion of the Notes.
(i) $100,000 Bona Fide Debt Service Fund Gross Earnings Exception to
Rebate. Notwithstanding anything in this Section 5.2 to the contrary, if the gross
earnings from the investments held in a Bona Fide Debt Service Fund for the note year in
question, as determined under paragraph (c) above, are less than $100,000 then any
amount earned on such Bona Fide Debt Service Fund shall not be taken into account in
determining the Rebate Amount. In this regard, the $100,000 earnings limitation is
deemed satisfied if the annual debt service on the issue does not exceed $2,500,000. For
purposes of this paragraph,the term"gross earnings"means the aggregate amount earned
on the Nonpurpose Investment in which the Gross Proceeds deposited to a Bona Fide
Debt Service Fund are invested, including amounts earned on such amounts if allocated
to a Bona Fide Debt Service Fund.
(ii) Bona Fide Debt Service Fund Exception to Rebate. If the average
maturity of the Notes is at least five (5) years and the rates of interest do not vary during
the term of the Notes, then any amount earned on the Bona Fide Debt Service Fund
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(other than amounts representing accrued interest or capitalized interest) shall not be
taken into account in determining the Rebate Amount.
(iii) Six-Month Spending Exception to Rebate. Notwithstanding anything in
this Section to the contrary, if all of the Gross Proceeds of the Notes held in any fund or
account (other than the Gross Proceeds held in a Bona Fide Debt Service Fund or any
reasonably required reserve fund), including investment earnings received with respect to
such Gross Proceeds but excluding investment earnings received with respect to such
Gross Proceeds held in the Bona Fide Debt Service Fund, have been expended for the
governmental purpose of the Notes within six (6) months (or ninety-five percent (95%)
within six (6) months and one hundred percent (100%) within one year) after the Issue
Date,then the only Nonpurpose Investments to be taken into account in the calculation of
the Rebate Amount are Nonpurpose Investments acquired with or allocated to Gross
Proceeds of the Notes held in any reasonably required reserve fund and to any Gross
Proceeds of the Notes arising after such six (6) months which were not reasonably
anticipated as of the Issue Date. The existence of sinking fund or pledged fund proceeds
or the expectation that such proceeds will arise within six (6) months of the Issue Date
will make the six-month spending exception to rebate inapplicable. For purposes of this
exception, Gross Proceeds used to pay principal of the Notes are not treated as expended
on the governmental purpose of the Notes. This exception is available for the Gross
Proceeds of the Notes and the Issuer expects the requirements of this exception to rebate
to be met with respect to the Gross Proceeds of the Notes.
(iv) Eighteen-Month Spending Exception to Rebate. The Notes are treated as
meeting the rebate requirement if Gross Proceeds of the Non-Refunding Portion of the
Notes qualify for the initial temporary period under Treasury Regulations §1.148-2(e)(2)
and if the Gross Proceeds of the Non-Refunding Portion of the Notes (other than the
Gross Proceeds held in a Bona Fide Debt Service Fund or any reasonably required
reserve fund and any Gross Proceeds of the Notes arising after eighteen (18) months after
the Issue Date which were not reasonably anticipated as of the Issue Date), including
investment earnings received with respect to such Gross Proceeds but excluding
investment earnings received with respect to such Gross Proceeds held in a debt service
fund, have been expended for the governmental purpose of the Notes in accordance with
the following schedule measured from the Issue Date: (i) at least fifteen percent (15%)
within six (6) months; (ii) at least sixty percent (60%) within twelve (12) months; and
(iii) one hundred percent (100%) within eighteen (18) months; then the only Nonpurpose
Investments to be taken into account in the calculation of the Rebate Amount with respect
to the Notes are Nonpurpose Investments acquired with or allocated to Gross Proceeds of
the Notes held in any reasonably required reserve fund (there are none with respect to the
Notes), and to any Gross Proceeds of the Notes arising after such eighteen (18) months
which were not reasonably anticipated as of the Issue Date. This eighteen month
spending exception to rebate may not be used if Gross Proceeds of the Notes are held in
any fund such as a sinking fund or pledged fund (other than a Bona Fide Debt Service
Fund or any reasonably required reserve fund) as of the Issue Date or if such Gross
Proceeds of the Notes are expected to arise within eighteen(18)months of the Issue Date.
For purposes of this exception, Gross Proceeds of the Notes used to pay principal of the
Notes are not treated as expended on the governmental purpose of the Notes. For
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purposes of determining compliance with the first two spending periods, the amount of
Investment Proceeds included in Gross Proceeds of the Notes is determined based on the
Issuer's reasonable expectations on the Issue Date. The spending requirement for the
third spending period is nevertheless satisfied if the Reasonable Retainage is allocated to
expenditures within thirty (30)months of the Issue Date.
(v) Two-Year Construction Bond Exception to Rebate. (A) A Construction
Issue is treated as meeting the rebate requirement for Available Construction Proceeds of
the Non-Refunding Portion of the Notes if those proceeds are allocated to expenditures
for governmental purposes of the Non-Refunding Portion of the Notes in accordance with
the following schedule, measured from the Issue Date of the Notes: (i) ten percent (10%)
within six (6) months; (ii) forty-five percent (45%) within twelve (12) months;
(iii) seventy-five percent (75%) within eighteen (18) months; and (iv) one hundred
percent (100%) within twenty-four (24) months. The two-year construction bond
exception to rebate is deemed satisfied if the unexpended amount does not exceed the
lesser of three percent (3%) of the Issue Price of the Notes or $250,000. The fourth
spending requirement is considered satisfied if the unexpended amount is attributable to a
Reasonable Retainage and if such amount is allocated to expenditures within three (3)
years of the Issue Date. Expenditures for the governmental purpose of an issue include
payments for interest, but not principal, on the issue, and for principal or interest on
another issue of obligations, unless those payments cause the issue to be a refunding
issue. For purposes of determining compliance with the spending requirements as of the
close of each of the first three (3) spending periods, Available Construction Proceeds
include the amount of future earnings that the Issuer reasonably expected as of the Issue
Date of the Notes. The spending requirement with respect to the fourth and final
spending period is measured by reference to actual earnings.
(B) In the event the Issuer fails to expend the Available Construction
Proceeds in accordance with the schedule set forth in (A) above, unless an election has
been made to pay the one and one half percent (1'/z%) penalty and/or the three percent
(3%) penalty, all Gross Proceeds of the Notes, not otherwise exempted from the
calculation of the Rebate Amount, will be taken into account in the calculation of the
Rebate Amount starting from the Issue Date. If an election has been made to bifurcate
the issue into a Construction Issue and a non-Construction Issue, the two (2)portions will
be treated as separate issues for purposes of computing the Rebate Amount as provided in
Section 5.2 hereof. An issue may not be bifurcated into a Construction Issue and an issue
which satisfies the eighteen month spending exception to rebate. In addition, an issue
may not be bifurcated to include Construction Expenditures in the non-Construction
Issue. An issue which comprises both refunding Notes and new money Notes is
considered to be bifurcated by operation of law.
(C) In connection with the two-year construction bond exception to
rebate, the Issuer hereby makes the following elections: (a) the Issuer reasonably expects
that at least seventy-five percent (75%) of the Available Construction Proceeds will be
applied in respect of Construction Expenditures for property which is owned by a
Governmental Unit or a Tax-Exempt Organization; (b) the Issuer does not elect to
bifurcate the Notes into a Construction Issue and a non-Construction Issue; (c) the Issuer
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does not elect to pay the one and one-half percent (11/2%) penalty or the three percent
(3%) penalty at the close of each semi-annual spending period in respect of which the
spending requirement has not been satisfied; (d)the Issuer does not elect to include in the
two-year expenditure requirement investment earnings on any reserve fund as there is no
such reserve fund with respect to the Notes; (e) the Issuer elects to include in Available
Construction Proceeds the amount of earnings reasonably expected as of the Issue Date
of the Notes to be received for the entire two-year period, for purpose of calculating
whether the relevant semi-annual expenditure requirements have been satisfied; and
(f)the Issuer elects to measure Available Construction Proceeds, for purposes of meeting
the spending requirements for the first three spending periods set forth above, by
reference to the amount of earnings the Issuer reasonably expects as of the Issue Date of
the Notes for the entire two-year spending period, in lieu of actual earnings and expected
earnings as of the end of each spending period.
(D) The Issuer acknowledges that it may only avail itself of one of the
exceptions to rebate set forth in Subsections 5.3(e)(iv) and (v) above.
5.3. Rebate Options. With respect to the investment of the proceeds of the
Notes,the Issuer will:
(a) comply with the requirements of the six-month spending exception to
rebate, the eighteen-month spending exception to rebate or the two-year construction bond
exception to rebate, and if it is unable to comply with any of such requirements, rebate arbitrage
earnings in accordance with the provisions of this Article;
(b) invest all Gross Proceeds of the Notes at all times from the Issue Date
until expended in investments not constituting investment property for purposes of Code §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 Code §103
and is not a preference item for purposes of the alternative minimum tax imposed by Code §55;
(c) invest all Gross Proceeds of the Notes in obligations having a yield that
does not exceed the Note yield; or
(d) comply with the rebate provisions described in this Article.
5.4. Payment to the United States. (a) Unless the Notes are redeemed prior to
such time, the Issuer will pay to the United States, not later than sixty (60) days after each
Installment Computation Date, an amount which, when added to previous rebate payments made
with respect to the Notes, is equal to not less than ninety percent (90%) of the Rebate Amount.
The Issuer will pay to the United States, not later than sixty (60) days after the Notes are fully
paid or redeemed, one hundred percent (100%) of the Rebate Amount. If the final rebate
payment is not made within sixty (60) days after the Final Computation Date, interest on the
Rebate Amount will be deemed to accrue at the underpayment rate under Code §6621,beginning
on the date the Rebate Amount is due and ending on the date ten(10) days before it is paid.
(b) The Issuer will mail each payment to the Internal Revenue Service Center,
Ogden, Utah 84201 or such other address as the Treasury Regulations may require. Each
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payment shall be accompanied by the Form 8038-T (or other prescribed form) and such
information and documents as the Treasury Regulations may require.
5.5. Rebate Regarding Prior Issue. The Issuer understands that it must make a
final rebate accounting and submit a Form 8038-T, if applicable, to the Internal Revenue Service
with any required rebate or penalty payments within sixty (60) days of the final redemption date
of each issue of the Prior Notes being refunded with proceeds of the Notes.
5.6. Engagement of Experts. The Issuer shall, before the date which is the
earlier of(i) the fifth (5t') anniversary of the Issue Date or (ii) the date of the last redemption of
the Notes, engage Hawkins Delafield & Wood LLP or another firm nationally recognized in the
calculation of rebate to perform the calculations necessary to comply with the rebate
requirements of the Code with respect to the Notes, including any exceptions thereto.
ARTICLE VI
ACCOUNTING FOR EXPENDITURES
6.1. Tax Accounting for Expenditures of Bond Proceeds. In general, any
reasonable, consistently applied accounting method may be used to account for expenditures of
proceeds of the Notes for arbitrage and private activity bond compliance purposes under
Treasury Regulations §§1.148-6(d) and 1.141-6. Allocations for these two purposes must be
consistent with each other. Reasonable accounting methods for allocating funds from different
sources to expenditures for the same governmental purpose include any of the following methods
if consistently applied: a specific tracing method; a gross proceeds spent first method; a first-in,
first-out method; or a ratable allocation method. Subject to more restrictive special rules that
may apply to proceeds of the Notes, such as the more restrictive special rules applicable to
expenditures of proceeds for Restricted Working Capital Expenditures (see, Bond-Proceeds-
Spent-Last Accounting Method), and except as otherwise noted in the immediately succeeding
sentence, the Issuer will use a specific tracing method, consistently applied, to account for
expenditures of proceeds of the Notes for purposes of Code §§148 and 141. The expenditure of
money deposited to the Bona Fide Debt Service Fund shall be accounted for on the basis of the
first-in, first-out method of accounting.
(a) Extraordinary Working Capital Items. Gross Proceeds of an issue used for
expenditures for extraordinary,non-recurring items that are not customarily payable from current
revenues, such as casualty losses or extraordinary legal judgments in amounts in excess of
reasonable insurance coverage, or the payments of Extraordinary Working Capital Items. The
exception set forth above shall apply only if the Issuer or a related party does not otherwise
maintain a reserve for such items or set aside other available amounts for such expenses.
(b) Grants. Gross Proceeds of an issue used to make a grant(i.e., a transfer of
money by the Issuer to a transferee that is neither a member of the Issuer's Controlled Group nor
an agent of the Issuer) that imposes on the transferee no obligation or condition to repay any
amount to the Issuer. In this regard, obligations or conditions intended solely to assure the
expenditure of transferred money in accordance with the governmental purpose of the transfer do
not prevent a transfer from qualifying as a grant. The Issuer understands that in the unexpected
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event that a repayment is made with respect to a bond-financed grant, the repaid amount is
treated as unspent proceeds of the Notes as of the repayment date unless expended within sixty
(60) days of the repayment. The amount of grants not meeting the definition above will not be
considered expended until expended by the ultimate recipient. No portion of the proceeds of the
Notes will be applied to finance a grant.
(c) Costs of Issuance and De Minimis Working Capital Items. Gross
Proceeds of an issue used for costs of issuance, administrative costs; qualified guarantees or
hedges;payments of interest on the issue for a period commencing the date hereof and ending on
the later of three (3) years from the date hereof or one (1) year after the date the Projects are
placed in service; rebate or penalty or yield reduction payments;payments of principal or interest
on an issue paid from unexpected excess sale or investment proceeds; and principal or interest on
an issue paid from investment earnings on a reserve or replacement fund that are deposited in a
Bona Fide Debt Service Fund, and Gross Proceeds of an issue used for working capital not in
excess of five percent (5%) of the Sale Proceeds of the Notes that are directly related to the
Capital Expenditures financed by the Notes may be considered spent for arbitrage purposes on a
specific tracing accounting method.
(d) Exception for Commingled Investment Proceeds. Investment proceeds of
the Notes that are deposited into the Issuer's General Fund or other funds and that are
commingled with substantial tax or other revenues from the governmental operations of the
Issuer may be treated as allocated to expenditures for a governmental purpose if such Investment
Proceeds are expected to be spent within six(6)months from the date of commingling.
(e) Allocations of Proceeds to Expenditures. It is understood that any
allocations of the proceeds of the Notes to expenditures herein are preliminary. Pursuant to
Treasury Regulations §§1.141-6(a) and 1.148-6(d)(1)(iii), within eighteen (18) months after the
later of the date on which an expenditure of proceeds of the Notes is made or, if later in the case
of an expenditure for a Capital Project, if any, the Capital Project is placed in service, the Issuer
will make a final allocation of the actual amount of proceeds used for that expenditure by the
Issuer. In any event, such allocation must be made by the date sixty(60) days after the fifth(5th)
anniversary of the Issue Date or the date sixty (60) days after the retirement of the Notes, if
earlier. The Issuer reserves the authority to change any allocation of proceeds to expenditures
and the authority to change the method of accounting of proceeds for the entire period permitted
under Treasury Regulations §§1.141-6 and 1.148-6 and other applicable Treasury Regulations.
6.2. Related Parties and Expenditures. In general, for purposes of tracking
investments and expenditures of Gross Proceeds of the Notes to ensure compliance with the
arbitrage restrictions under Code §148 and the Treasury Regulations, the Issuer will continue to
track investments of proceeds of the Notes and expenditures of the proceeds of the Notes until
paid to parties that are not Related Parties. The Issuer understands that, for arbitrage purposes
under Treasury Regulations §1.148-6(d)(7), unless otherwise within Section 6.3 of this Tax
Certificate, any payment of Gross Proceeds of the Notes to a Related Party of the payer is not an
expenditure of those Gross Proceeds for arbitrage investment tracking purposes. Further in this
regard, for purposes of determining whether the Issuer and another entity are Related Parties, a
special rule under Treasury Regulations §1.150-1(e)(3) provides that a general purpose
governmental entity with its own substantial taxing, eminent domain, and police powers is an
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V
uncontrolled entity (e.g., a city possessing substantial amounts of each of the referenced
sovereign powers is not a controlled entity of a state).
6.3. Expenditures on a Reimbursement Basis of Eligible Original Expenditures
Paid Before Issue Date. No portion of the proceeds of the Notes will be used to reimburse the
Issuer for expenditures incurred and paid thereby with respect to the Projects in anticipation of
the issuance of the Notes.
6.4. Segregated Accounts, Investment Records, and Documentation of
Expenditures. The Issuer will segregate or cause the segregation of all proceeds in one or more
segregated accounts and will maintain necessary investment and expenditure records in order to
assure compliance with the federal tax requirements for the Notes and will segregate or cause the
segregation of proceeds prior to expenditures for governmental purposes in segregated accounts
and will maintain necessary investment and expenditure records for such purposes, including,
without limitation,the following:
(a) investment records necessary to show compliance with any applicable
restrictions as to Yield, to compute the Rebate Amount, and to demonstrate compliance with any
applicable spending exceptions or other requirements under Code §148; and
(b) expenditure records necessary to show the times, amounts and purposes
for which the proceeds are spent on Capital Projects for governmental purposes or otherwise.
ARTICLE VII
DEBT SERVICE
7.1. Source of Repayment of Notes. The principal of and interest on the Notes
(to the extent not paid from proceeds of other Tax-Exempt Obligations of the Issuer) will be paid
from the Issuer's taxes and revenues.
7.2. Debt Service Fund The taxes and revenues used to pay principal and
interest on the Notes, whether or not deposited in a Bona Fide Debt Service Fund, will be
expended within thirteen (13) months of the date of deposit in such fund, or the date of their
accumulation. Any amounts received from the investment of such deposit or accumulation will
be expended within one (1) year of receipt. The Bona Fide 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 note year or one-twelfth of the debt service
on the Notes for the immediately preceding note year. So long as the foregoing conditions are
satisfied, amounts in the Bona Fide Debt Service Fund may be invested until expended without
Yield Restriction.
7.3. Sinking Funds. Except for the Bona Fide Debt Service Fund described
herein, the Issuer has not created or established, and does not expect to create or establish, any
sinking fund, debt service reserve fund, pledged fund or other similar fund which the Issuer
reasonably expects to use to pay principal or interest on the Notes, including without limitation,
any arrangement under which money, securities or obligations pledged directly or indirectly to
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secure the Notes or any contract securing the Notes or any arrangement providing for
compensating balances to be maintained by the Issuer with any holder of the Notes.
7.4. No Negative Pledges. There are no amounts held under any agreement to
maintain amounts at a particular level for the direct or indirect benefit of the holders of the Notes
or guarantor of the Notes, if any, excluding for this purpose amounts in which the Issuer (or a
substantial beneficiary) may grant rights that are superior to the rights of the holders of the Notes
or guarantor of the Notes, if any, and amounts that do not exceed reasonable needs for which
they are maintained and as to which the required level is tested no more frequently than every six
(6) months and that may be spent without any substantial restriction other than a requirement to
replenish the amount by the next testing date.
ARTICLE VIII
MISCELLANEOUS
8.1. Recordkeeping The Issuer shall maintain records to support the
representations, certifications and expectations set forth in this Tax Certificate until the later of
the date three (3) years after the Notes are retired or if the Notes are refunded with proceeds of
Tax-Exempt Obligations, the date three (3) years after the last of such refunding Tax-Exempt
Obligations are retired. The records the Issuer will retain include,but are not limited to:
(a) basic records and documents related to the Notes, including the Certificate
of Determination,this Tax Certificate and the opinion of Bond Counsel,
(b) documentation evidencing the expenditure of the proceeds of the Notes,
(c) documentation evidencing all sources of payment or security for the
Notes,
(d) documentation pertaining to any investment of the Gross Proceeds of the
Notes, including the purchase and sale of securities, SLGS subscriptions, yield calculations for
each class of investment of the proceeds of the Notes and guaranteed investment contracts,
(e) documentation evidencing determinations made pursuant to Articles IV
and V hereof and records of all amounts paid to the United States pursuant to Sections 4.7, 5.4
and 5.5 hereof, and
(f) documentation evidencing determinations made pursuant to Article III
hereof as to the use of the Projects.
ARTICLE IX
POST ISSUANCE TAX COMPLIANCE
9.1. Post-Issuance Written Compliance Policies and Procedures. The Issuer
represents that it has adopted written post-issuance tax compliance policies and procedures to
ensure compliance with applicable requirements of federal tax law with respect to the Notes.
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Such policies and procedures include, among other things, procedures for instituting remedial
actions in the event of any failure to comply with Code §141 relating to "private activity" and
Code §148 relating to arbitrage, Yield Restriction and rebate, and designation of the official
responsible for monitoring compliance with such requirements and to act as its compliance
officer. See Exhibit G attached hereto.
[Signature page follows.]
s
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f
IN WITNESS WHEREOF, I have hereunto set my hand on the 27th day of
August, 2015.
�Q
Name: Scott A.Russell
Title: Town Supervisor
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Table of Exhibits
Exhibit A — Definitions
Exhibit B — Form 8038-G
Exhibit C — Economic Lives and Private Use of Projects Financed with Proceeds of the Notes
Exhibit D — Safe Harbor Management Contracts Guidelines
Exhibit E — Certificate of the Purchaser
Exhibit F — Financing Schedules
Exhibit G — Post-Issuance Tax Compliance Procedures
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EXHIBIT A
DEFINITIONS
"Available Construction Proceeds" means the issue price of the Notes (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 Notes. For purposes of this definition earnings include earnings on any
Tax-Exempt Obligation. If only a portion of the Notes constitutes a Construction Issue, 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 Note year and is depleted at least once each Note year except for a
reasonable carry over amount (not in excess of the earnings on the fund for the immediately
preceding Note year or one-twelfth of the principal and interest payments on the issue for the
immediately preceding Note year).
"Bond Counsel" means Hawkins Delafield & Wood LLP, or any nationally recognized
attorney or firm of attorneys knowledgeable in the requirements of the Code and the Treasury
Regulations and retained by the Issuer.
"Bond-Proceeds-Spent-Last Accounting Method" shall mean the required accounting
method for spending proceeds of an issue on Restricted Working Capital Expenditures under
Treasury Regulations §1.148-6(d)(3), which treats proceeds as spent on a date only to the extent
that the Working Capital Expenditures exceed available amounts, taking into account the
treatment of a reasonable working capital reserve as unavailable, with the determination of
available amounts and reasonable working capital reserves being made in the manner set forth in
the Treasury Regulations.
"Capital Expenditure" means any cost of a type that is property chargeable to the
capital account (or would be so chargeable with a proper election or with the application of the
definition of placed in service under Treasury Regulations §1.150-2(c)) under general federal
income tax principles. Capital Expenditures include 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.
"Capital Project" shall mean all Capital Expenditures, plus related working capital
expenditures to which the de minimis rule under Treasury Regulations §1.148-6(d)(3)(ii)(A)
applies, that carry out the governmental purposes of an issue.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Computation Date" means each Installment Computation Date and the Final
Computation Date.
"Computation Date Credit" means, for any issue of obligations, an amount equal to the
Future Value of$1,650 for each Note year during which there are gross proceeds of the Notes on
a Computation Date other than the Final Computation Date, and $1,650 on the Final
Computation Date. The foregoing computation credit is subject to an annual inflation-based
adjustment announced by the IRS.
"Computation Period" shall mean the period between Computation Dates. The first
Computation Period begins on the Issue Date and ends on the first Computation Date; each
succeeding Computation Period begins on the date immediately following the Computation Date
and ends on the next Computation Date.
"Construction Expenditures" shall mean, except as otherwise provided, Capital
Expenditures allocable to the cost of real property or constructed personal property.
Construction Expenditures do not include expenditures for acquisitions of interests in land or
other existing real property, unless the contract between the seller and the Issuer requires the
seller to build or install the property (e.g., a "turnkey contract"), but only to the extent that the
property has not been built or installed at the time the parties enter into the contract.
For purposes of this definition "constructed personal property" means tangible personal
property (or, if acquired pursuant to a single acquisition contract, properties) or so-called
"specially developed computer software" if. (A) a substantial portion of the property or
properties is completed more than six (6) months after the earlier of the date construction or
rehabilitation commenced or the date the Issuer entered into an acquisition contract; (B)based on
reasonable expectations of the Issuer, if any, or representations of the person constructing the
property, with the exercise of due diligence, completion of construction or rehabilitation (and
delivery to the Issuer) could not have occurred within that six (6) month period; and (C) if the
Issuer itself builds or rehabilitates the property, not more than seventy-five percent (75%) of the
capitalizable cost is attributable to property acquired by the Issuer (e.g., components, raw
materials, and other supplies). "Specially developed computer software"means any programs or
routines used to cause a computer to perform a desired task or set of tasks, and the
documentation required to describe and maintain those programs, provided that the software is
specially developed and is functionally related and subordinate to the real property or other
constructed personal property.
For purposes of this definition "real property" means land and improvements to land,
such as buildings or other inherently permanent structures, including interests in real property;
e.g., "real property" includes wiring in a building, plumbing systems, central heating or air-
conditioning systems, pipes or ducts, elevators, escalators installed in a building, paved parking
areas, roads,wharves and docks,bridges and sewage lines.
For purposes of this definition "tangible personal property" means any tangible property
other than real property, including interests in tangible personal property; e.g., "tangible personal
property" includes machinery that is not a structural component of a building, subway cars, fire
trucks, automobiles, office equipment,testing equipment, and furnishings.
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"Construction Issue" means for purposes of the two-year construction bond exception
to rebate, any issue (or portion thereof) that is not a refunding issue in which all of the Notes are
either (i) Governmental Bonds; (ii) Qualified 501(c)(3) Bonds, or (iii) Qualified Private Activity
Bonds to finance property owned by a Governmental Unit or a 501(c)(3) organization, if at least
seventy-five percent (75%) of the net proceeds of the issue are to be used for expenditures for
construction, reconstruction and rehabilitation of property which is owned by a Governmental
Unit or a 501(c)(3) organization.
"Controlled Group" means a group of entities controlled directly or indirectly by the
same entity or group of entities. In general, "direct control" exists while a controlling entity
possesses either of the following rights or powers and such rights or powers are discretionary and
non-ministerial: the right or power(i) both to approve and to remove without cause a controlling
portion of the governing body of the controlled entity, or (ii)to require the use of funds or assets
of the controlled entity for any purpose of the controlling entity. If one entity (the "Controlling
Entity") directly controls another (the "Controlled Entity'), then the Controlling Entity indirectly
controls any entity controlled directly or indirectly by such Controlled Entity. However, an
entity is not a Controlled Entity if it possesses substantial taxing, eminent domain and police
powers.
"De Minimis Amount" shall mean: (a) in reference to original issue discount (as defined
in Code §1273(a)(1)) or premium on an obligation: (i) an amount that does not exceed two
percent (2%) multiplied by the stated redemption price at maturity; plus (ii) any original issue
premium that is attributable exclusively to reasonable underwriters' compensation; and (b) in
reference to market discount (as defined in Code §1278(a)(2)(A)) or premium on an obligation,
an amount that does not exceed two percent (2%) multiplied by the stated redemption price at
maturity.
"De Minimis Working Capital Items" shall mean Working Capital Expenditures
eligible for the de minimis exception to the Bond-Proceeds-Spent-Last Accounting Method in
Treasury Regulations §1.148-6(d)(3)(ii)(A), and includes:
(a) issuance costs of an issue and Qualified Administrative Costs;
(b) Qualified Guarantee fees and Qualified Hedge payments;
(c) interest on an issue for a period starting on the Issue Date and ending on
the date that is the later of three (3) years from the Issue Date or one (1) year after the
date on which any financed Capital Project is placed in service;
(d) certain Rebate Amounts and Yield Reduction Payments;
(e) other costs that do not exceed five percent (5%) of the Sale Proceeds of an
issue and that are directly related to any Capital Expenditures financed with the issue;
(f) principal or interest on an issue paid from unexpected excess Sale
Proceeds or Investment Proceeds; or
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(g) principal or interest on an issue paid from investment earnings on a
reserve or replacement fund that are deposited in a Bona Fide Debt Service Fund.
"Extraordinary Working Capital Item" shall mean Working Capital Expenditures
eligible for the exception to the Bond-Proceeds-Spent-Last Accounting Method in Treasury
Regulations §1.148-6(d)(3)(ii), which covers 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, and for which no reserve has
been maintained.
"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 of a United
States Treasury Obligation that is purchased directly from the United States Treasury is
its purchase price.
(c) Certificate of Deposit The Fair Market Value of a certificate of deposit
with a fixed interest rate, a fixed payment schedule, and a substantial penalty for early
withdrawal is its purchase price provided the yield on the certificate of deposit is not less
than(i) the yield on reasonably comparable direct obligations of the United States and (ii)
the highest yield published by the provider and currently available from the provider on
reasonably comparable certificates of deposit offered to the public.
(d) Guaranteed Investment Contracts and Yield Restricted Defeasance
Escrows. The Fair Market Value of a guaranteed investment contract or an investment
purchased for a yield restricted defeasance escrow is its purchase price, provided the
issuer of the Notes makes a bona fide solicitation for such contract that satisfies all of the
following requirements:
(i) The bid specifications are in writing and are timely forwarded to potential
providers.
(ii) The bid specifications include all material terms of the bid; material terms
are defined as terms that may directly or indirectly affect the yield or cost
of the investment.
(iii) The bid specifications include a statement notifying potential providers
that submission of a bid is a representation that the potential provider did
not consult with any other potential provider about its bid, that the bid was
determined without regard to any other formal or informal agreement that
the potential provider has with the issuer or any other person (whether or
not in connection with the bond issue), and that the bid is not being
submitted solely as a courtesy to the issuer or any other person for
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purposes of satisfying the requirements of the applicable provisions of the
Treasury Regulations.
(iv) The terms of the bid specifications are commercially reasonable, i.e., there
is a legitimate business purpose for the term other than to increase the
purchase price or reduce the yield of the investment (for example, for
solicitations of investments for a yield restricted defeasance escrow, the
hold firm period must be no longer than the issuer reasonably requires).
(v) With respect to purchases of guaranteed investment contracts only, the
terms of the solicitation take into account the issuer's reasonably expected
deposit and drawdown schedule for the amounts to be invested.
(vi) All potential providers have an equal opportunity to bid, for example, no
potential provider is given the opportunity to review other bids (i.e., a"last
look")before providing a bid.
(vii) At least three reasonably competitive providers are solicited for bids;
reasonably competitive provider is a provider that has an established
industry reputation as a competitive provider of the investments being
purchased.
The bids received must meet all of the following requirements:
(i) The issuer receives at least three bids from providers that the issuer
solicited under a bona fide solicitation, which bids meet the requirements
set forth immediately above and that do not have a material financial
interest in the issue. A lead underwriter in a negotiated underwriting
transaction is deemed to have a material financial interest in the issue until
fifteen (15) days after the Issue Date. In addition, any entity acting as
financial advisor with respect to the purchase of the investment at the time
the bid specifications are forwarded to potential providers has a material
financial interest in the issue. A provider that is a related party to a person
that has a material financial interest in the issue is deemed to have a
material financial interest in the issue.
(ii) At least one of the three bids received is from a reasonably competitive
provider of such types of investments, as described in paragraph (vii)
above.
(iii) If the issuer uses an agent to conduct the bidding process,the agent did not
bid to provide the investment.
The winning bid must be:
(i) In the context of a guaranteed investment contract, the highest yielding
bona fide bid(determined net of any broker's fees).
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(ii) In the context of investments other than guaranteed investment contracts,
the lowest cost bona fide bid (including any broker's fees). The lowest
cost bid is either the lowest cost bid for the portfolio or if the issuer
compares the bids on an investment by investment basis, the aggregate
cost of a portfolio comprised of the lowest cost for each investment. Any
payment received)by the issuer from a provider at the time the investment
is purchased (e.g., an escrow float contract) for a yield restricted
defeasance escrow under a bidding procedure meeting the requirements of
this definition is taken into account in determining the lowest cost bid.
In general, the lowest cost bona fide bid (including any broker's fee) may not be
greater than the cost of the most efficient portfolio comprised exclusively of SLGS
available for purchase from the Bureau of Public Debt. The cost of the most efficient
portfolio of SLGS is to be determined at the time that bids are required to be submitted
pursuant to the terms of the bid specifications. This requirement to compare to the most
efficient SLGS portfolio does rot apply if SLGS are not available for purchase on the
date that bids are required to be submitted because sales of those securities have been
suspended.
The provider of the investments or the obligor on the guaranteed investment
contract certifies the administrative costs that it pays (or expects to pay), if any, to third
parties in connection with supplying the investment.
The issuer must retain t?�e following records with the bond documents until three
years after the last outstanding bond is redeemed:
(i) For guaranteed investment contracts, a copy of the contract, and for other
types of purchas �s,the purchase agreement or confirmation.
(ii) The receipt or o er record of the amount actually paid by the issuer for
the investment, including a record of any administrative costs paid by the
issuer to third parties and the certification of such costs.
(iii) For each bid that is submitted, the name of the person and entity
submitting the bid,the time and date of the bid and the bid results.
(iv) The bid solicitation form and, if the terms of the purchase agreement or
the guaranteed investment contract deviated from the bid solicitation form
or a submitted bid is modified, a brief statement explaining the deviation
and stating the purpose of the deviation. If the issuer replaces an
investment in e winning bid portfolio with another investment, the
purchase price o the investment must be bid under a bidding procedure
meeting the requirements of this definition.
(v) For purchases o investments other than guaranteed investment contracts,
the most efficient portfolio of SLGS, determined at the time that the bids
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were required t be submitted pursuant to the terms of the bid
specifications.
"Final Computation Date" means the day the last obligation that is part of the Notes is
discharged.
"Fixed Yield Bond" means any obligation whose yield is fixed and determinable on its
issue date using the assumptions and rules set forth in Treasury Regulations §1.148-4(b).
"Fixed Yield Investment" shall mean any Investment, the Yield on which is fixed and
determinable on.its Issue Date.
"Fixed Yield Issue" means any issue at any time that each bond included in it and still
outstanding is a Fixed Yield Bond.
"Future Value"' or "FV" of a payment or receipt means the amount, determined by
using the,economic accrual method (the method of computing yield based on the compounding
of interest at the end of each compounding period), equal to the value of such payment or receipt
at the time it is paid or received (or treated as paid or received), plus interest assumed to be
earned and compounded over the period at a rate equal to the yield on the Notes, using the same
compounding interval and financial conventions used to compute yield.
"Governmental Bonds" mean Bonds or other obligations issued as part of an issue the
interest on which is excluded from gross income for federal income tax purposes under Code
§103(a) and which are not Qualified Private Activity Bonds or Qualified 501(c)(3)Bonds.
"Governmental Unit" means a state or local governmental unit as defined in Treasury
Regulations §1.103-1 or any instrumentality thereof, excluding the United States or any agency
or instrumentality thereof.
"Gross Proceeds" shall mean Sale Proceeds, Investment Proceeds, Transferred Proceeds
and Replacement Proceeds. The term "Gross Proceeds" does not include Qualified
Administrative Costs,nor does it include amounts properly within the applicable yield allowance
for acquired purpose investments (one-eighth of one percentage point ('/8%)) or for acquired
program investments (one-and-one-half percentage points (1'/2%)).
"Higher Yielding Investment" shall mean a Nonpurpose Investment, the Yield on
which exceeds the yield on the Notes by more than the spread permitted by the Code and
Treasury Regulations.
"Installment Computation Date" shall mean any date with respect to a Fixed Yield
Bond Issue; with respect to a Variable Yield Bond Issue, the Issuer may treat the last day of any
Note year ending on or before the latest date as of which the first Rebate Amount is required to
be paid (Le., as of not later than the fifth anniversary date of the date of issuance of the Notes) as
a Computation Date, but may not change that treatment after the first payment date; and, after the
first required payment date, the Issuer must consistently treat either the end of each Note year or
the end of each fifth Note year as a Computation Date and may not change these Computation
Dates after the first required payment date. Notwithstanding any of the foregoing,the first rebate
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installment payment must be made on a Computation Date that is not later than five (5) years
after the Issue Date. Subsequent rebate installment payments must be made for a Computation
Date that is not later than five (5) years after the previous Computation Date for which an
installment payment was made (until and excluding the Final Computation Date). The
references herein to the date on which rebate is required to be paid allude to the actual date as of
which the Rebate Amount is required to be calculated and not the 60-day grace period following
such date during which the Rebate Amount, if any, is to be paid.
"Investment" means (i) any security (within the meaning of Code §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 Code §57(a)(5)(C)), (iii) any annuity contract within the meaning
of Code §72, (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 Notes.
"Issue Price" shall mean the initial offering price to the public at which price a
substantial amount of each maturity of the Notes was sold. Ten percent (10%) is a substantial
amount. For this purpose, the term "the public" does not include bond houses, brokers, or
similar Persons or organizations acting in the capacity of underwriters or wholesalers. The Issue
Price generally is the first price at which the Notes were sold to the public and the Issue Price
will not change if part of the issue is subsequently sold at a different price. The Issue Price of
Notes that are not substantially identical is determined separately. The Issue Price of a bond
issue for which a bona fide public offering is made is determined as of the sale date based on
reasonable expectations regarding the initial public offering price. The Issue Price of the Notes
may not exceed their Fair Market Value as of their sale date. If the Notes are privately placed,
the Issue Price is the price paid for them by the first buyer.
"Multipurpose Issue" means an issue the proceeds of which are used for two or more
separate purposes determined in accordance with Treasury Regulations §1.148-9(h).
"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.
"Nonpurpose Receipt" shall mean those receipts of moneys as described in Subsection
5.2(d) of this Tax Certificate.
"Note Year" means each one (1) year period that ends on the day selected by the Issuer.
The first Note year and the last Note year may be short periods. If the Issuer has not selected a
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day before the earlier of the final maturity date of the issue or five (5) years after the Issue Date,
Note year shall mean any year ending on the anniversary of the Issue Date and on the final
maturity date.
"Note Yield" means the yield on the Notes as defined in Section 4.2 of this Tax
Certificate.
"Official Statement" means the Official Statement, if any, of the Issuer relating to the
Notes.
"Person" means any individual, corporation, partnership,joint venture, association,joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Plain Par Bond" means a qualified tender bond or a bond that(i) is issued with original
issue discount equal to not more than two percent(2%) 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 Code §1275, in either case, that pays interest unconditionally payable at least annually,
and (iv)has a lowest stated redemption price not less than its outstanding stated principal
amount.
"Plain Par Investment" means an investment that is an obligation that (i) is issued with
original issue discount (or if acquired on a date other than the'issue date, acquired with market
discount or premium) equal to not more than two 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 Code
§1275 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
(1+i)n
where i equals the discount rate divided by the number of compounding intervals in a
year and n equals the sum of (i) the number of whole compounding intervals for the
period beginning on the date as of which Present Value is computed and ending on the
date the amount is to be received or paid or on a Computation Date and (ii) a fraction the
numerator of which is the length of any short compounding interval during such period
and the denominator of which is the length of a whole compounding interval.
"Private Activity Bond" means a bond which meets the definition contained in,Code
§141(a) and that is not a"qualified bond" as defined in Code §141(e).
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"Qualified 501(c)(3) Bond" means a bond which meets the definition contained in Code
§145.
"Qualified Administrative Costs"mean:
(i) 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 Obligations.
(ii) Regulated Investment Companies and External Commingled Funds. For
publicly offered regulated investment companies (as defined in Code §67(c)(2)(13)) and
commingled funds in which the Issuer and any Controlled Entity do not own more than
ten percent (10%) 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.
(iii) GICs and Investments Purchased for a Yield Restricted Defeasance
Escrow. An amount paid for a broker's commission or similar fee paid with respect to a
guaranteed investment contract or investments purchased for a yield restricted defeasance
escrow will be considered reasonable if(i) the fee does not exceed the lesser of$39,000
or 0.2 percent of the "computational base", or, if more, $4,000, where "computational
base" means (A) for a guaranteed investment contract, the amount reasonably expected,
as of the date the contract is acquired, to be deposited in the guaranteed investment
contract over the term of the contract and (B) for yield restricted defeasance escrows, the
amount of proceeds initially invested in those investments; and (ii) for any issue, the fees
paid, do not exceed $110,000 in the aggregate. In the case of a calendar year after 2015,
each of the dollar amounts set forth above shall be increased by an amount equal to such
dollar amount multiplied by the cost of living adjustment for such calendar year as
described in Treasury Regulations §1.148-5(e)(2)(iii)(B).
(iv) Purpose Investments. Qualified Administrative Costs include costs or
expenses paid, directly or indirectly, to purchase, carry, sell, or retire the ,investment,
costs of issuing, carrying, or repaying the issue, and any underwriters' discount, any of
which are paid by the conduit borrower, even if such payments merely reimburse the
Issuer, but only to the extent the Present Value of those payments does not exceed the
Present Value of the reasonable administrative costs paid by the Issuer using the Note
yield as the discount rate.
(v) 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.
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"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 Notes. The
guarantor must not expect to make any payments other than those pursuant to a direct-pay letter
of credit or similar arrangement for which the guarantor will be immediately reimbursed.
Reasonable procedural or administrative requirements or, in the case of a guarantee against
failure to remarket a qualified tender bond, commercially reasonable limitations based on credit
risk, will not cause the guarantee to be conditional. The guarantor may not be a co-obligor, nor
may the obligor and any related parties combined use more than ten percent of proceeds of the
guaranteed portion of the Notes. 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 Notes, a contract between the Issuer and
any unrelated party entered into to modify the Issuer's risk of interest rate changes with respect
to the Notes that meets the requirements of Treasury Regulations §1.148-4(h). The contract may
be an interest rate swap, an interest rate cap, a futures contract, a forward contract, an option or
may take another form.
"Rebate'Amount" means with respect to the Notes, the amount computed as described
in Section 5.2(d)of this Tax Certificate.
"Replacement Proceeds" means amounts which have a sufficiently direct nexus to the
issue or the governmental purpose of the issue to conclude that the amounts would have been
used for that governmental purpose if the proceeds of the issue were not used for that
governmental purpose. The governmental purpose of a bond issue includes the expected use of
amounts for the payment of debt service on a particular date. For this purpose, the mere
availability or preliminary earmarking of amounts for a purpose does not in and of itself establish
a sufficient nexus to cause those amounts to be Replacement Proceeds. Replacement Proceeds
include funds and amounts held by the Issuer including:
(i) sinking funds, such as debt service funds, redemption funds, reserve funds,
replacement funds, or any other fund, to the extent reasonably expected to be used
directly or indirectly to pay principal or interest on the Notes;
(ii) pledged funds, any amount directly or indirectly pledged to pay principal
or interest on the Notes, cast in any form but providing reasonable assurance that such
amount will be available to pay principal or interest on the Notes, even if the Issuer
encounters financial difficulty;
(iii) negative pledges, amounts held under an agreement to maintain such
amount at a particular level for the direct or indirect benefit of holders or a guarantor of
the Notes, excluding amounts the Issuer, or a Controlled Entity of the Issuer may grant
rights in superior to the rights of the bondholders or the guarantor and amounts not in
A-11
2504874 1 038723 TAGMT
excess of the reasonable needs for which it is maintained, the required level of which is
tested no more frequently than every six (6) months and which may be spent without any
substantial restriction other than a requirement to replenish such amount by the next
testing date; and
(iv) other replacement proceeds, including amounts arising during a period
that the Notes,to the extent reasonably expected by the Issuer as of the issue date, remain
outstanding longer than necessary and amounts arising to the extent proceeds of the
Notes are used to finance a working capital reserve unless all of the Net Sale Proceeds of
the Notes are spent within six (6) months of their issue date, or meet the "small
governmental issuer" exception to rebate or the Issuer traditionally maintained a working
capital reserve. The,amount of the working capital reserve maintained is the average
amount so maintained during annual periods of at least one year, the last of which ends
within a year of the issue date.
"Restricted Working Capital Expenditures" means Working Capital Expenditures
subject to the Bond-Proceeds-Spent-Last Accounting Method in Treasury Regulations
§1.148-6(d)(3)(i) and that are ineligible for any exception to that rule.
"Sale Proceeds" means any amounts actually or constructively received from the sale of
the Notes, 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 Treasury Regulations §1.148-4(b)(4).
"SLGS" means U.S. Treasury Book Entry Securities, State and Local Government
Series.
"Tax Certificate" shall mean this Tax Certificate, as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof.
"Tax-Exempt Obligation" shall mean any obligation described in Code §103(a) the
interest on which is excluded from the federal gross income of the owners thereof and which is
not a"specified private activity bond" as defined in Code §57(a)(5)(C).
"Tax-Exempt Organization" shall mean an entity organized under the laws of the
United States of America or any state thereof which is an organization described in Code
§501(c)(3) and exempt from federal income taxes under Code §501(a), or corresponding
provisions of federal income tax laws from time to time in effect.
"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.
"Treasury Regulations" means the Income Tax Regulations promulgated under Code
§§103 and Code §§141 through 150 and related provisions of the Code applicable to
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2504874 1038723 TAGMT
Tax-Exempt Obligations, as amended from time to time, and any applicable predecessor
provisions of the Code, as amended from time to time.
"Universal Cap" means the maximum value of Nonpurpose Investments which may be
allocated to the Notes and is determined by reference to the Value of all outstanding Notes 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 Notes thereunder are determined. With respect to new
money issues,the first Valuation Date shall be the second year anniversary date of the Issue Date
of the Notes; thereafter, the first day of each Note 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 Notes, shall constitute a Valuation Date. In addition,
the first date of each Note year shall also be a Valuation Date.
"Value" means, in the case of a bond, the Value of the bond and in the case of an
Investment,the Value of the 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 Notes are a
part as the discount factor. In determining the Present Value of a variable rate bond, the initial
interest rate on the bond established by the index or other rate setting mechanism is used to
determine the interest payments on that bond.
"Value of an Investment" means, on any date means, as permitted or required, the
Present Value or the Fair Market Value of the Investment or its outstanding principal amount.
Paragraphs (a)through (f) below specify the valuation methods required or permitted to be used
for the Investments listed:
(a) Fixed Rate Investments. A Fixed Rate Investment may be valued at its
Present Value or at its Fair Market Value on any date unless it is required to be invested
at a restricted yield.
(b) Plain Par Investments. A Plain Par Investment may be valued at its
outstanding stated principal amount on any date (plus interest accrued but unpaid on that
date)unless it is required to be invested at a restricted yield.
(c) AU Investment. Any Investment may be valued at its Fair Market Value
on any date unless it is required to be invested at a restricted yield.
(d) Yield Restricted Investments. An Investment required to be invested at a
restricted yield (for example, an Investment held after the expiration of the applicable
investment temporary period) must be valued at its Present Value as of any date unless
A-13
2504874 1 038723 TAGMT
the Investment is required to be valued at Fair Market Value as provided in paragraph (e)
below.
(e) Mandatory Valuation at Fair Market Value. Subject to paragraph (d)
above, Investments deemed to be acquired or disposed of with respect to Notes (as a
result, for example, of sinking fund deposits or withdrawals) must be valued on the
deemed acquisition or disposition date at Fair Market Value unless (i)the Investment was
allocated from one issue of Tax-Exempt Obligations to another as Transferred Proceeds
or as a result of the application of the Universal Cap rule in which case it may be valued
at Present Value or (ii) the Investment is held in a commingled fund (other than a bona
fide debt service fund or a commingled fund that operates exclusively as a reserve fund,
sinking fund or replacement fund for two or more issues of the Issuer) unless it is an
investment being initially deposited in or withdrawn from a commingled fund.
(f) Special Rule for Transferred Proceeds. Notwithstanding any matter stated
above, the Value of any Nonpurpose Investment allocable to Transferred Proceeds of an
issue of refunding obligations may not exceed the Value of that Investment used for
purposes of applying the arbitrage restrictions to the refunded obligations on the date
proceeds of the refunding obligations are used to redeem the refunded obligations. -
"Working Capital Expenditure" means any cost of a type that does not constitute a
Capital Expenditure.
"Yield" means, as of any Computation Date, the yield computed on an issue of
obligations under Treasury Regulations §1.148-4 and on an Investment under Treasury
Regulations §1.148-5 in either case by compounding interest at the end of each compounding
interval as further described in paragraphs(a) and (b)below:
(a) When used with respect to a Fixed Yield Issue, yield means that discount
rate that, when used in computing the Present Value of (i) all unconditionally payable
payments of principal and interest of or on the Notes included in such Fixed Yield Issue,
(ii) all unconditionally payable fees for Qualified Guarantees and Qualified Hedges on
such Notes 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 Notes comprising the issue (determined using the same discount rate used to
determine the Present Value of payments for principal, interest and Qualified Hedges and
Qualified Guarantees). The yield is computed as of the issue date of the Fixed Yield
Issue by treating each bond included in the issue that is either subject to mandatory or
contingent early redemption or to certain optional redemption provisions as being
redeemed on its expected early redemption date for an amount equal to its Value on that
date. If a Fixed Yield Notes (i)is subject to optional redemptions within five years of its
issue date and the yield not taking into account the optional redemption is more than one-
eighth of one percent (0.125%) 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
one-quarter of one percent (0.25%) 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
A-14
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including such Fixed Yield Notes is computed by treating the Fixed Yield Notes 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 Notes is calculated in the same
manner as yield on a Fixed Yield Issue.
(b) When used with respect to any Investment allocated to an Issue, yield
means the yield on the Investment computed using the same compounding interval and
financial conventions used to calculate the yield on the issue of obligations to which it is
allocated. The yield on an Investment allocated to an issue is the discount rate that,when
used on the date the Investment is first purchased with Gross Proceeds or allocated to
Gross Proceeds of the issue to compute the Present Value on that date of all
unconditionally payable Nonpurpose Receipts from the Investment, produces an amount
equal to the Present Value on that date of all unconditionally payable Nonpurpose
Payments for the Investment.
"Yield Reduction Payments" means periodic payments made on Installment
Computation Dates with respect to certain Investments subject to yield restriction which are
treated as a payment for such Investments that reduces the Yield on such Investment,made to the
United States under Treasury Regulations §1.148-5(c). Yield reduction payments may be made
with respect to (a) Investments allocable to proceeds eligible for a temporary period after such
temporary period has expired, (b) investments allocable to a Variable Yield Issue during any
Computation Period in which at least five percent of the issue is represented by variable yield
Notes, (c) Nonpurpose Investments allocable to Transferred Proceeds of a current refunding
issue to the extent necessary to satisfy yield restriction or of an advance refunding to the extent
that investment in zero yielding Nonpurpose Investments fails to properly restrict the Yield,
(d)purpose investments allocable to certain qualified student loans, (e)Nonpurpose Investments
allocable to a reasonably required reserve or replacement fund that but for its size would be
treated as a reasonably required reserve or replacement fund, to the extent that certain other size
constraints are satisfied, (f) Nonpurpose Investments allocable to Replacement Proceeds by
virtue of the Universal Cap,,and(g) amounts eligible for transitional relief.
"Yield Restricted" or "Yield Restriction" shall mean required to be invested at a yield
that is not materially higher than the Yield on the Notes of the applicable issue under Code §148
and Treasury Regulations §1.148-2.
A-15
2504874 1 038723 TAGMT
EXHIBIT B
FORM 8038-G
(see attached)
2504874 1 038723 TAGMT
r
Form 8038-G Information Return for Tax-Exempt Governmental Obligations
(Rev September 2011) ►Under Internal Revenue Code section 149(e) OMB No.1545-0720
Department of the TreasuryNo-See separate instructions.
Caution:If the issue price is under$100,000,use Form 8038-GC.
Internal Revenue Service
KXMU Reporting Authority If Amended Return,check here ► ❑
1 Issuer's name 2 Issuer's employer identification number(EIN)
Town of Southold 11-6001939
3a Name of person(other than issuer)with whom the IRS may communicate about this return(see instructions) 3b Telephone number of other person shown on 3a
4 Number and street(or P O.box if mad is not delivered to street address) Room/suite 5 Report number(For IRS Use Only)
53095 Main Road 13 ,
6 City,town,or post office,state,and ZIP code 7 Date of issue
Southold,New York 11971 08/27/2015
8 Name of issue 9 CUSIP number
$2,800,000 Bond Anticipation Note for VariousPurposes-2015 844572 PEI
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information(see 10b Telephone number of officer or other
instructions) employee shown on 10a
Scott A.Russell,Supervisor 631 765-1889
Type of Issue(enter the issue price).See the instructions and attach schedule.
11 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12 Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14 Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 Environment(including sewage bonds) . . . . . . . . . . . . . . . . . . . . 15
16 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17 Utilities . . . . . . . 17
18 Other. Describe ►Various Purposes 18 2,800,000.00
19 If obligations are TANS or RANs, check only box 19a . . . . . . . . . . ► ❑
If obligations are BANS,check only box 19b . . . . . . . . . . . . . . . . ►
20 If obligations are in the form of a lease or installment sale,check box . . . . . . . . ► ❑
Description of Obligations. Complete for the entire issue for which this form is being filed.
(a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted (e)Yield
price at maturity average maturity
21 08/26/2016 $ 2,830,212.00, $ 2 800 000.00 0.9972 veErs 0.659781
LiaM Uses of Proceeds of Bond Issue(including underwriters' discount)
22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22 0.00
23 Issue price of entire issue(enter amount from line 21,column(b)) . . . . . . . . 23 2,830 212.00
24 Proceeds used for bond issuance costs(including underwriters'discount). . 24 8,117.00
25 Proceeds used for credit enhancement . . . . . . . . . . . . 25 0.00
26 Proceeds allocated to reasonably required reserve or replacement fund . 26 0.00
27 Proceeds used to currently refund prior issues . . . . . . . . . 27 1,627,000.00
28 Proceeds used to advance refund prior issues . . . . . . . . . 28 0.00
29 Total(add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . 29 1,635,117.00
30 Nonrefunding proceeds of the issue(subtract line 29 from line 23 and enter amount here) . . . 30 1,195,095.00
Description of Refunded Bonds. Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► 0.0027 years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . _ . ► N/A years
33 Enter the last date on which the refunded bonds will be called(MM/DD/YYYY) . . . . . . ► 08/28/2015
34 Enter the date(s)the refunded bonds were issued►(MM/DD/YYYY) 08/28/2014
For Paperwork Reduction Act Notice,see separate instructions. Form 8038-G(Rev.9-2011)
ISA
Form 8038-G(Rev.9-2011) Page 2
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
(GIC)(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a
b Enter the final maturity date of the GIC 10-
C
c Enter the name of the GIC provider Do-
37
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . 37
38a If this issue is a loan made from the proceeds of another tax-exempt issue,check box► ❑and enter the following information:
b Enter the date of the master pool obligation 0-
c
c Enter the EIN of the issuer of the master pool obligation►
d Enter the name of the issuer of the master pool obligation 0-
39
39 If the issuer has designated the issue under section 265(b)(3)(B)(I)(III)(small issuer exception),check box . . . . ► ❑
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate,check box . . . . . . . . . . . . . ► ❑
41a If the issuer has identified a hedge,check here► ❑ and enter the following information:
b Name of hedge provider►
c Type of hedge No-
d
d Term of hedge 110,-
42
42 If the issuer has superintegrated the hedge,check box . . . . . . . . . . . . . . . . . . . . . ► ❑
43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations(see instructions),check box . . . . . . . . P.-
44
44 If the issuer has established written procedures to monitor the requirements of section 148,check box . . . . . ►
45a If some portion of the proceeds was used to reimburse expenditures,check here► ❑ and enter the amount
of reimbursement . . . . . . . . . ►
b Enter the date the official intent was adopted 0-
Under
Under penalties of perjury,I declare that I have examined this return and accompanying schedules and statements,and to the best of my knowledge
Signature and belief,they are true,correct,and complete I further declare that I consent to the IRS's disclosure of the issuer's return information,as necessary to
and process this return,to the person that I have authorized above.
Consent ' 08/27/2015 'Scott A.Russell,Supervisor
Signature of issuer's authorized representative Date Type or print name and title
Paid Check ❑ if
Pnntlrype preparer's name Preparer's signature Date PTIN
Preparer Robert P.Smithself-employed P01085234
Use Only Firm's name ►Hawkins Delafield&Wood LLP Firm's EIN 0-13-55133990
Firm's address ►28 Liberty Street NY NY 10005 Phone no. 212 820-9400
Form 8038-G(Rev 9-2011)
EXHIBIT C
Economic Lives and Private Use of Proiects Financed with Proceeds of the Notes
(see attached)
2504874 1 038723 TAGMT
EXHIBIT C
Town of Southold,New York—Varlous Purposes Note Anticipation Note-2015
(I) Cost of Project assets to be
refinanced with proceeds of the Notes S 2,800,000 00
(2) Face Amount of Notes S 2,800,000 00
Issue Date 8/27/2015
A E C D E F 4 H I J K L M
Ratio of Fmanced Cost of Note Proceeds Acquisition or
Each Asset(B)to Total Allocable to Asset(C) Period in Construction
Cost of Each Project Cost of All Financed x Face Amount of Tax Economic Service Prior Period Following Adjusted Economic Remaining Private Activity
Refinanced with Assets Notes PPU Life*(m Life** Basis of to Issue Date Issue Date Life Weighted Life Private Amount
Protects Notes (from Item(1)) (from Item(2)1 vrs) (in vis) Determination (m vis) (in vrs) (FH or F+I) (D x J) Achvity/ (Bx L)
Orient bV the Sea Road Improvements S 6,00000 00021 $ 6,00000 1000 1000 Town Estimate 8 12 000 188 11,293 15 000% -
Acquisition of Ifthway Payloader&
Skidsteer 39,000 00 00139 39,000 00 1500 1500 Town Estimate 4 19 000 1081 421,734 25 000%
Acqumsmon Highway Department
Truck 147,000 00 00525 147,000 00 500 500 Town Estimate 319 000 181 266,210 96 0 00%
Bay Avenue Bridge Improvements 760,000 00 02714 760,000 00 2000 2000 Town Estimate 1 19 000 1881 14,292,164 38 0 00%
Highway Facility Improvements 675,000 00 02411 675,000 00 2000 2000 Town Estunate 196 000 1804 12 175,890 41 0 00"/0
Highway Facility Improvements 413,000 00 01475 413,000 00 2000 2000 Town Estimate 000 000 2000 8,260.000 00 0001%
Acquisition of Window Turner 510,000 00 01821 510,000 00 1500 1500 Town Estimate 000 000 1500 7,650,000 00 000%
Pike Street Parking Lot Improvement 250,000 00 00893 250,00000 1000 1000 Town Estunate 000 000 1000 2 500,000 00 0 00%
Total $ 2,800,00000 10000 $ 2,800,00000 43,077,29315
*Asset life allowed under State Finance Law
**Asset life allowed for tax purposes pursuant to Note counsel's
analysis
***Based on Note Resolution
Doc 2507811 1038723 Average Economuc Life= Total K 1538 years Aggregate Private = Total M = 0000%
Total D Activity Total B-1
Page t of 1 Useful Life Spreadsheet
EXHIBIT D
SAFE HARBOR MANAGEMENT CONTRACT GUIDELINES
REV.PROC. 97-13,AS AMENDED AND AMPLIFIED
General Rule.
A contract between a state or local governmental unit (a"Qualified User") and a manager
or operator which is not a state or local government unit (a"Provider) for the management of, or
services rendered at, or incentive payment in respect of, a tax-exempt bond-financed facility that
meets the safe-harbor guidelines of Rev. Proc. 97-13 as summarized below and does not
otherwise give the Provider an ownership or leasehold interest in bond-financed property for
federal income tax purposes is treated as not creating any private business use under Section
141(b) of the Internal Revenue Code (the "Code"). In addition, if the guidelines are met, the
burden to prove that the contract creates impermissible private activity would shift to the Internal
Revenue Service ("IRS") in a tax court proceeding. All contracts must be reviewed on a case-
by-case basis.
General Requirements.
1. Reasonable Compensation and No Net Profits. The compensation must be
reasonable,and no portion of the compensation paid to the Provider may in any event be based on
net profits derived from the bond-financed facility. However, compensation that is based on a
percentage either of gross revenues or of expenses (but not both) is permitted. A Productivity
Award does not cause the compensation to be based on a share of net profits. Reimbursement
for actual and direct expenses paid by,the Provider to unrelated persons is not by itself treated as
compensation.
2. No Penalty if Required to be Cancelable. Whenever a contract is required
to be cancelable as described below, it must be possible to cancel it without penalty imposed on
the Qualified User. A "penalty" means: (a) any limitation on the Qualified User's right to
compete with the Provider; (b) any requirement that the Qualified User purchase equipment,
goods or services from the Provider; or (c) any requirement that the Qualified User pay
liquidated damages for cancellation of the contract. A requirement that the Qualified User
reimburse ordinary and necessary expenses of the Provider or a restriction against hiring key
personnel of the Provider is not a penalty. A penalty may exist where provisions of another
contract between the Provider and Qualified User (e.g., a loan or guarantee) impair the practical
ability of the Qualified User to terminate the service contract for example by automatically
terminating when the service contract Ierminates.
3. No o Role or Relationship between Qualified User and Provider. There
must not be any role or relationship between .the Qualified User and the Provider that would
substantially limit the Qualified User's ability to exercise its rights under the contract, including
cancellation rights. This requirement is considered satisfied if (a) not more than 20% of the
voting power of the governing board of the Qualified User is vested in the Provider and its
directors, officers, shareholders and employees, (b) overlapping board members do not include
D-1
2504874.1 038723 TAGMT
the chief executive officers of the service provider or its governing body or the Qualified User or
its governing body, and (c) the Qualified User and the Provider are not "related persons" within
the meaning of Treasury Regulations §1.150-1(b).
Permitted Contract Term and Compensation Arrangements.
The contract term (which includes Renewal Options) and the compensation arrangements
must meet one of the following six requirements:
Contract Maximum Term Limit Permissible Compensation Arrangements
1. Lesser of 15 years (20 years for 1. At least 95% of compensation for each annual period
public utility property) or 80% must be based on a Periodic Fixed Fee. A one-time
of the reasonably expected incentive award during the term of the contract under
useful life of the bond-financed which compensation automatically increases when a
property. No cancellation right gross revenue or expense target (but not both) is reached
required. is permitted if the award is equal to a single, stated dollar
amount.
2. Lesser of 10 years (20 years for 2. At least 80% of compensation for each annual period
public utility property) or 80% must be based on a Periodic Fixed Fee. A one-time
of the reasonably expected incentive award during the term of the contract under
useful life of the bond-financed which compensation automatically increases when a
property. No cancellation right gross revenue or expense target (but not both) is reached
required. is permitted if the award is equal to a single,stated dollar
amount.
3. 5 years. No cancellation right 3. All of the compensation for services is based on a stated
required. amount; a Periodic Fixed Fee; a Capitation Fee; a Per-
Unit Fee; or a combination of the preceding, except that
the compensation for services also may include a
percentage of gross revenues, adjusted gross revenues, or
expenses of the facility (but not both revenues and
expenses). A tiered Productivity Award will be treated
as a stated amount or a Periodic Fixed Fee, as
appropriate.
4. 5 years, cancelable by the 4. At least 50% of compensation for each annual period
Qualified User at the end of 3 must be based on a Periodic Fixed Fee or, alternatively,
years without penalty. 100% must be based on a Capitation Fee or any
combination of Periodic Fixed Fees and Capitation Fees.
5. 3 years, cancelable by the 5. 100% of compensation may be based on a Per-Unit Fee
Qualified User at the end of 2 stated in the contract or otherwise specifically limited by
years without penalty. the governmental service recipient or an independent
third party (e.g., Medicare reimbursement formulas).
Alternatively, 100% of compensation may be based on
any combination ,of Periodic Fixed Fees and Per-Unit
Fees.
D-2
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Contract Maximum Term Limit Permissible Compensation Arrangements
6. 2 years, cancelable by the 6. 100% of compensation may be based on a percentage of
Qualified User at the end of 1 the fees charged at the bond-financed facility except that,
year without penalty. during the start-up period of the facility, it may be based
on either gross revenues, gross revenues adjusted for bad
debt or similar allowances or the expenses of the facility.
This compensation arrangement is available only (i)with
respect to facilities providing services to third parties
(e.g., radiology facilities) or (ii)during an initial start-up
period during which operations have been insufficient to
permit a reasonable estimate of annual gross revenues.
Definitions Relevant to Permissible Compensation Arrangements.
1. Periodic Fixed Fee is a stated dollar amount for services rendered for a
specified period of time. The stated dollar amount may automatically increase according to a
specified objective external standard that is not linked to-the output or efficiency of a facility,
e.g., the Consumer Price Index and similar external indices that track increases in prices in an
area or increases in revenues or costs in an industry are objective external standards.
2. Capitation Fee is a fixed periodic amount payable for each person for
whom services are provided (e.g., an HMO member) as long as the quantity and type of services
actually provided- vary substantially from person to person. A capitation fee may include a
variable component of up to 20% of the total capitation fee designed to protect the Provider
against risks such as catastrophic loss.
3. Per-Unit Fee is a stated amount for each unit of services provided (e.g.,
medical procedure performed, car parked, passenger mile traveled, ton of waste incinerated, unit
of landfill capacity consumed). The stated dollar amount may automatically increase according
to' a specified objective external standard that is not linked to the output or efficiency of a
facility, e.g., the Consumer Price Index and similar external indices that track increases in prices
in an area or increases in revenues or costs in an industry are objective external standards.
4. Productivity Award is (i) a stated dollar amount of additional
compensation based on increases or decreases in gross revenues or reductions in total expenses
(but not both) in any annual period during the term of a contract, or (ii) a stated dollar amount, a
periodic fixed fee, or a tiered system of stated dollar amounts or periodic fixed fees where the
eligibility for the award is based on the quality of the services provided,under the management
contract rather than increases in revenues or decreases in expenses of the facility and the amount
of the productivity award is based solely on the level of performance achieved with respect to the
applicable measure.
5. Renewal Option is a provision under which the Provider has a legally
enforceable right to renew the contract. Thus, for example, a provision under which a contract is
automatically renewed for one-year periods absent cancellation-by either party is not a renewal
option(even if it is expected to be renewed).
D-3
2504874 1038723 TAGMT
Revision of Management Contract.
If the compensation arrangements of a management contract are materially revised, the
requirements for compensation arrangements are retested as of the date of the material revision
and the management contract is treated as one that was newly entered into as of the date of the
material revision.
Certain Exceptions.
Certain arrangements generally are not treated as management contracts that are subject
to the above rules. These include:
(a) Contracts for services that are solely incidental to the primary governmental
function or functions of a bond-financed facility (e.g., contracts for janitorial, office equipment
repair,hospital billing or similar services); '
(b) The mere granting of admitting privileges by a hospital to a doctor, even if those
-privileges are conditioned on the provision of de minimis services, if those privileges are
:available to all qualified physicians in the area, consistent with the size and nature of its
'facilities;
(c) A contract to provide for the operation of a facility or system of facilities that
consists predominantly of public utility property (as defined in Section 168(i)(10) of the Code),
if the only compensation is the reimbursement of actual and direct expenses of the Provider and
reasonable administrative overhead expenses of the Provider; and
(d) A contract to provide for services, if the only compensation is the reimbursement
of the Provider for actual and direct expenses paid by the Provider to unrelated parties.
D-4
2504874.1 038723 TAGMT
EXHIBIT E
CERTIFICATE OF PURCHASER
(see attached)
2504874.1 038723 TAGMT
Issue Price Certificate
August 27, 2015
Town Of Southold,New York
(the"Issuer
Re: $2,800,000 Bond Anticipation Note for Various Purposes-2015
The undersigned, acting on behalf of Jefferies LLC, New York, New York (the
"Purchaser"), hereby represents as follows with respect to the above-captioned notes (the
"Notes"):
(1) On August 19, 2015 (the "Sale Date"), all Notes of all maturities have been the
subject of an initial offering to the general public at the initial reoffering price(s), the initial
reoffering yield(s),and the stated interest rate(s)listed below
Initial Reoffering Initial Reoffering Stated Interest
Lot Par Amount Price Yield Rate
$2,800,000 $101.079 0.66% 1.75%
(2) On the Sale Date, to the best of our knowledge based on our records, the first
price or yield at which at least ten percent(10%) of the Notes was sold to the general public was
not greater than the respective price,or was not lower than the respective yield,shown above.
. (3) Based on the price(s) and yield(s) provided in paragraph (1) above, the initial
offering price of the Notes is equal to $2,830,212.00-(which represents the aggregate par,amount
of the Notes of $2,800,000.00 plus original issue premium on the Notes in the,amount of
$30,212.00.
(4) On the Sale Date, based on our assessment of the then prevailing market
conditions, we had no reason to believe that any of the Notes would be initially sold to the
general public at prices greater than the prices,or yields lower than the yields, shown above.
(5) The prices and yields of the Notes, maturity-by-maturity, shown in paragraph (1)
above,represented our best judgment of the fair market value of the Notes.
(6) All compensation received for underwriting services in connection with the
issuance of the Notes is being paid on the date hereof in the form of a purchase discount in the
amount of$1,117.00, and no part of such compensation includes any payment for any property
or services other than underwriting services relating to the sale and issuance and delivery of the
Notes.
For purposes of this certificate, the term "general public" means the general public of
investors who are purchasing Notes for their own account as ultimate purchasers without a view
to resell and does not include bond houses,brokers and similar persons or organizations acting in
the capacity of underwriters or wholesalers.
We understand that the representations contained herein may be relied upon by the issuer
in making certain of the representations contained in the Tax Certificate executed by the Issuer in
connection with the issuance of the Notes, and we further understand that Hawkins Delafield &
Wood LLP, Bond Counsel to the Issuer, may rely upon this certificate, among other things, in
providing an opinion with respect to the exclusion from gross income of the interest on the Notes
pursuant to Section 103 of the Internal Revenue Code of 1986,as amended.
The undersigned is authorized to execute this certificate on behalf of the Purchaser,
which certifications are not necessarily based on personal knowledge, but may instead be based
on either inquiry deemed adequate by the undersigned or institutional knowledge (or both)
regarding the matters set forth herein.
Jefferies LLC
By:
Name: Jarad Bohan
Title: Vice President
EXHIBIT F
FINANCING SCHEDULES
(see attached)
2504874 1 038723 TAGMT
$2,800,000
Town of Southold,New York
Bond Anticipation Notes for Various Purposes-2015
New Structure Summary And Results
Dated Date August 27,2015
Issue Date August 27,2015
Final Maturity August 26,2016
Optional Redemptions Call Dates Call Price
N/A N/A
N/A N/A
N/A N/A
Arbitrage Yield 0.659781%
N.I.C. 0.660800%
(Net Interest Cost)
W.A.M. 0.9972 Years
(Weighted Average Maturity In Years)
R.W.A.M. (for refundings only)
(Remaining Weighted Average Maturity In Years)
Advance Refundings 0.0027 Years
Arbitrage Yield Target
Par Amount + 2,800,000 00
OIP/(OID) + 30,212.00
Credit Enhancement + -
Accrued Interest + -
Total 2,830,212.00
Adjusted Total for N.I.0
Total Interest Cost + 48,863.89
OIP/(OID) - 30,212 00
Accrued Interest - -
Adjusted Total 18,651.89
2505149_1 xis 8/21/2015 12 29 PM 1 of 3
$2,800,000
Town of Southold,New York
Bond Anticipation Notes for Various Purposes-2015
Arbitrage Yield Analysis
Present
Value to
Maturity Principal Total Annual 08/27/15
'Date Amount Coupon Interest' Debt Service Debt Service 0.659781%
'08/27/15
08/27/15
08/26/16 2,800,000 00 1.750% 48,863 89 2,848,863 89 2,848,863 89 2,830,212.00
Totals 2.800,000.00 48.863.89 2,848.863.89 2.848,863.89 2,830,212.00
Arbitrage Yield Target
;Par Amount + 2,800,000 00 Target: 2,830,212.00
OIP/(OID) + 30,212 00 Variance: (0.00)
;Credit Enhancement + -
Accrued Interest + -
Total 2,830,212.00
Notes
'Interest calculations are based on 30/360 day basis
2505149_1.xls 8/21/2015 12 29 PM 2 of 3
$2,800,000
Town of Southold,New York
r
Bond Anticipation Notes for Various Purposes-2015
Price/Yields,Weighted Average Maturity and Net Interest Cost
Maturity Principal Priced Years to Bond Yield To Call
Date Amount Coupon Yield Price to-- Issue Price Maturity Years Note?
08/27/15
08/27/15
08/26/16 2,800,000 00 1750% 0660% 101 079 Maturity 2,830,212 00 1 00 2,822,350
Totals 2.800,000.00 2.830,212.00 2,822,350.30
Total Interest Cost + 48,863 89 W.A M. = 09972
OIP/(OID) 30,212 00 (Weighted Average Maturity)
Accrued Interest - N I.C. = 0660800%
Adjusted Total 18,651 89 (Net Interest Cost)
2505149_1 As 8/21/2015 12 29 PM 3 of 3
EXHIBIT G
PROCEDURES FOR POST-ISSUANCE
COMPLIANCE WITH FEDERAL TAX LAW
State and local governmental entities, including cities, towns, villages and school
districts, that borrow money on a tax-exempt basis are required to report to the Internal Revenue
Service whether they have established written procedures to comply with applicable
requirements of federal tax law for all issues of federally tax-exempt bonds, bond anticipation
notes, tax anticipation notes, revenue anticipation notes, financing leases, energy performance
contract financings, and any other instruments evidencing the borrowing of money (collectively
the "Obligations'). The procedures set forth herein will assist the Town of Southold, in the
County of Suffolk,New York(the "Issuer") in meeting the post-issuance requirements of federal
tax law necessary to preserve the tax-exempt status of interest on Obligations issued by the
Issuer.
These procedures address Obligations issued for physical facilities and equipment for the
Issuer (the "Capital Obligations") and Obligations issued to finance cash-flow operating
requirements of the Issuer(the "Cash-Flow Obli atg ions').
I. GENERAL PROCEDURES
A. Responsible Official. The chief business officer of the Issuer (herein referred to
as the "Responsible Official") will identify such officers and employee(s), including the Town
Comptroller, who will be responsible for each of the procedures listed below, and will notify
such officers and employee(s) of the responsibilities, and provide those persons with a copy of
these procedures. Upon employee transitions, the Responsible Official will advise the new
personnel of their responsibilities under these procedures and will ensure they understand the
importance of these procedures. If employee positions are restructured or eliminated, the
Supervisor of the Issuer will reassign responsibilities as necessary.
2504874 1 038723 TAGMT
B. Issuance of Obligations.
I. Bond Counsel. The Issuer will retain a firm of nationally-recognized bond
counsel ("Bond Counsel") to deliver a legal opinion in connection with the issuance of all
Obligations. The Responsible Official will consult with Bond Counsel and other legal counsel
and advisors, as needed, following the issuance of Obligations to ensure that applicable post-
issuance requirements are met, so that interest on each issue of Obligations will be excluded
from gross income for federal income tax purposes.
2. Documentation of Tax Requirements. The federal tax requirements
relating to each issue of Obligations will be set forth in a Tax Certificate (the "Tax Certificate")
executed in connection with each issue of Obligations, which will be included in the closing
transcript for each issue of Obligations. The Tax Certificate will contain certifications,
representations, expectations and factual statements relating to the restriction on use of the
facilities financed with Obligations by persons or entities other than the Issuer, changes in use of
the facilities financed or refinanced with the proceeds of Obligations, restrictions applicable to
the investment of the proceeds of any Obligations and other moneys relating to the Obligations,
and arbitrage rebate requirements. The Responsible Official will review the Tax Certificate prior
to the date of issue of each issue of Obligations.
3. Information Reporting. In-connection with each issue of Obligations, the
Issuer is required to file, or shall cause to be filed by Bond Counsel, an IRS Form 8038-G (or, if
applicable, IRS Form 8038-GC). Any such IRS Form filed with the IRS, together with a proof
of filing,will be included as part of the closing transcript for each issue of Obligations, or kept in
the records maintained by Bond Counsel related to the appropriate issue of Obligations. The
Responsible Official shall ascertain that such form has been filed in connection with each issue
of Obligations.
C. Record Retention.
I. General. Copies of all relevant documents and records sufficient to
support that the tax requirements relating to all Obligations have been satisfied, including the
following documents and records, should be maintained by the Issuer:
2504874.1 038723 TAGMT
(a) Closing transcript;
(b) All records of investments, arbitrage reports, returns filed with the IRS
and underlying documents;
(c) Construction contracts,purchase orders, invoices and expenditure and
payment records;
(d) Documents relating to costs reimbursed with the proceeds of Capital
Obligations;
(e) All contracts and arrangements involving Private Use of the property
financed with Capital Obligations;
(f) All reports relating to the allocation of the proceeds of Obligations and
Private Use of property financed with Capital Obligations;
(g) Itemization of property financed with the proceeds of Capital Obligations;
and
(h) In connection with Cash-Flow Obligations, information regarding the
Issuer's revenue, expenditures and available balances sufficient to support
the Issuer's prospective and actual maximum cumulative cash-flow deficit
calculations.
2. Duration of Record Retention. All of the foregoing documents and
records should be retained for the term of the Obligations, plus three (3) years, or if the
Obligations are refunded with the proceeds of a subsequent Obligation, the date three (3) years
after the last of such refunding Obligations are refunded.
D. Capital Obligations.
1. Timely Expenditure of Proceeds of Capital Obligations. At the time of
issuance of Capital Obligations issued to fund original expenditures, the Issuer must reasonably
expect to spend at least 85% of all proceeds within three (3) years of the date of issuance of the
2504874 1 038723 TAGMT
Obligations. In addition, for Capital Obligations, the Issuer must have incurred or expect to
incur within six months after issuance original expenditures of not less than 5% of the amount of
such proceeds, and must expect to complete the project financed with Capital Obligations (the
"Project') and expend the proceeds of such Capital Obligations to pay Project costs with due
diligence. Satisfaction of these requirements allows the proceeds of Capital Obligations issued
for the Project to be invested at an unrestricted yield for three (3) years. Failure to satisfy these
requirements could subject the Issuer to rebate of investment income, and other penalties. The
Responsible Official will monitor the appropriate capital project accounts to ensure that the
proceeds of Capital Obligations are spent within the time period(s) required under federal tax
law.
Capital Obligations issued to refinance outstanding Capital Obligations are
subject to separate expenditure requirements, which shall be outlined in the Tax Certificate
relating to such Obligations. In connection with the issuance of any Capital Obligations issued
to refinance outstanding Capital Obligations, the Responsible Official will confirm that any
rebate obligation due with respect to the original issue and any subsequent refinancing thereof
has been met.
2. Use of Proceeds of Capital Obligations. In general, proceeds (including
investment income on original sale proceeds) of Capital Obligations, other than proceeds used to
pay costs of issuance, should be spent on capital expenditures. For this purpose, capital
expenditures generally mean costs to acquire, construct, or improve property (land,buildings and
equipment). Capital Expenditures include design and planning costs related to the Project, and,
include architectural, engineering, surveying, soil testing, environmental, and other similar costs
incurred in the process of acquiring, constructing, improving or adapting the property. Capital
Expenditures do not include operating expenses of the Project.
3. Use of Facilities Financed with Capital Obligations. For the life of all
Capital Obligations, the Project must be owned and operated by the Issuer. At all times while
Capital Obligations issued for a Project are outstanding, no more than 10% of the proceeds of
such Capital Obligations may used, directly or indirectly, in a trade or business carried on by a
person other than a state or local governmental unit ("Private Use"). Generally, Private Use
2504874 1 038723 TAGMT
1
consists of any contract or other arrangement, including leases, management contracts (for
example, contracts relating to the operation of a school cafeteria or to food service providers),
operating agreements and guarantee contracts which provides for use of the facilities financed
with Capital Obligations by a person who is not a state or local government on a basis different
than the general public. The Project may be used by any person or entity, including any person
or entity carrying on any trade or business, if such use constitutes"General Public Use". General
Public Use is any arrangement providing for use that is available to the general public at either
no charge or on the basis of rates that are generally applicable and uniformly applied.
4. Management or Operating Agreements for Facilities Financed with
Capital Obligations. Any management, operating or service contracts whereby a non-exempt
entity is using facilities financed or refinanced with the proceeds of Capital Obligations must
relate to',portions of the Project that fit within the above-mentioned 10% allowable Private Use,
or the contracts must meet the,IRS safe harbor for management contracts (Rev. Proc. 97-13).
Any renewals of or changes to such contracts should be reviewed by Bond Counsel. The
Responsible Official shall contact Bond Counsel if there may be a lease, sale, disposition or
other change in use of facilities financed or refinanced with the proceeds of Capital Obligations.
E. Cash-Flow Obligations.
1. Proper Sizing of Cash-Flow Obligations-.
(a) If the Issuer is not subject the small issuer exemption from rebate, at the
time of issuance of Cash-Flow Obligations, the Issuer must anticipate that it will incur an actual
maximum cumulative cash-flow deficit on a date on or before the close of the six-month period
commencing on the issue date of the Cash-Flow Obligations equal to at least 90% of the issue
price of the Cash-Flow Obligations.
(b) If the Issuer is subject to the small issuer exemption from rebate, at the
time of issuance of Cash-Flow Obligations, the Issuer must anticipate that it will incur an actual
maximum cumulative cash-flow deficit on a date on or before the close of the twelve-month
period commencing on the issue date of the Cash-Flow Obligations equal to at least 100% of the
2504874 1 038723 TAGMT
issue price of the Cash-Flow Obligations (which may include taking into account the Issuer's
"reasonably required working capital reserve").
(c) The Responsible Official will determine the appropriate amount of Cash-
Flow Obligations to issue.
(d) With respect to Issuers not subject to the small issuer exemption from
rebate, the Responsible Official shall determine whether or not the Issuer has met its requisite
maximum cumulative cash-flow deficit within six months following the date of issuance of the
Cash-Flow Obligations, and shall, to the extent necessary, obtain assistance from the Arbitrage
Rebate Consultant,referred to below.
F. Investment Restrictions;Arbitrage Yield Calculation; Rebate.
1. Investment Restrictions. Investment restrictions relating to the proceeds
of Obligations and other moneys relating to the Obligations are set forth in the Tax Certificate.
The Responsible Official will monitor the investment of the proceeds of Obligations to ensure
compliance with yield restriction rules.
2. Arbitrage Yield Calculation. Investment earnings on the proceeds of
Obligations should be tracked and monitored to comply with applicable yield restrictions and/or
rebate requirements. The Issuer is responsible for calculating (or causing the calculation of)
rebate liability for each issue of Obligations, and for making any required rebate payments. Any
funds of the Issuer set aside or otherwise pledged or earmarked to pay debt service on the
Obligations should be analyzed to assure compliance with the tax law rules on arbitrage, invested
sinking funds and pledged funds (including gifts or donations linked to facilities financed with
Capital Obligations). The Responsible Official will consult with Bond Counsel to confirm that
all relevant arbitrage yield requirements are met.
3. Rebate. On or before the date of any required rebate payment (see below),
the Issuer will retain a nationally recognized arbitrage rebate consultant (the "Arbitrage Rebate
Consultant") to perform rebate calculations that may be required to be made from time to time
with respect to any issue of Obligations. The Responsible Official shall provide the Arbitrage
Rebate Consultant with requested documents and information on a prompt basis, reviewing
2504874 1 038723 TAGMT
applicable 'rebate reports and other calculations and generally interacting with the Arbitrage
Rebate Consultant to ensure the timely preparation of rebate reports and payment of any rebate.
The reports and calculations provided by the Arbitrage Rebate Consultant will
assure compliance with rebate requirements, which require the Issuer to make rebate payments,
if any, no later than the fifth (5th) anniversary date and each fifth(5th) anniversary date thereafter
through the final maturity or redemption date of a Capital Obligation. A final rebate payment, if
due, must be made within sixty (60) days of the final maturity or redemption date of all
Obligations.
Rebate spending exceptions for Capital Obligations are available for periods of 6
months, 18 months and 2 years. The Responsible Official will confer and consult with the
Arbitrage Rebate Consultant to determine whether any rebate spending exception may be met.
In the case of Cash-Flow Obligations, within 60 days of the maturity date of such
Cash-Flow Obligations, if there is concern as to whether the Issuer has met its requisite
maximum cumulative cash-flow deficit, a rebate analyst should be promptly engaged to
determine whether either the six-month spending exception or the statutory safe harbor exception
to the rebate rules was met (in which case no rebate would be owed) or whether the investment
income derived from the proceeds of the Cash-Flow Obligations is subject, in whole or in part,to
rebate.
Copies of all arbitrage rebate reports, related return filings with the IRS (i.e., IRS
Form 8038-T), copies of cancelled checks with respect to any rebate payments, and information
statements must be retained as described above. The Responsible Official will follow the
procedures set forth in the Tax Certificate that relate to compliance with the rebate requirements
with respect to any Obligations.
II. ADDITIONAL PROCEDURES.
A. Periodic Monitoring. The Responsible Official will conduct periodic reviews of
compliance with the foregoing procedures to determine whether any violations have occurred so
that such violations can be remedied through the "remedial action" regulations (Treas. Reg.
Section 1.141-12) or the Voluntary Closing Agreement Program (VCAP) described in IRS
2504874.1 038723 TAGMT
Notice 2008-31 (or successor guidance). If any changes to the terms or provisions of any
Obligations are contemplated, the Responsible Official will consult with Bond Counsel, because
such modifications could jeopardize the tax-exempt status of interest on the Obligations after
they are modified.
B. Use of Facilities. The Responsible Official will maintain records identifying any
Private Use of the facilities or portion of facilities that are financed or refinanced with proceeds
of Capital Obligations. Such records may be kept in any combination of paper or electronic
form. In the event the use of the proceeds of Capital Obligations of the facilities financed or
refinanced with the proceeds of Capital Obligations differs from the representations or factual
statements in the Tax Certificate,the Responsible Official will promptly contact and consult with
Bond Counsel to ensure that there is no adverse effect on the tax-exempt status of the Capital
Obligations and, where appropriate, will remedy any violations through the "remedial action"
regulations (Treas. Reg. Section 1.141-12), the Voluntary Closing Agreement Program (VCAP)
described in IRS Notice 2008-31 (or successor guidance), or as otherwise prescribed by Bond
Counsel.
25048741038723 TAGMT
CERTIFICATE WITH RESPECT TO THE OFFICIAL
STATEMENT OF THE TOWN OF SOUTHOLD, IN THE
COUNTY OF SUFFOLK, NEW YORK, DISTRIBUTED
IN CONNECTION WITH THE SALE OF THE $2,800,000
BOND ANTICIPATION NOTE VARIOUS PURPOSES-
2015
I, Scott A. Russell, Supervisor of the Town of Southold, in the County of Suffolk,
New York (the "Town"), HEREBY CERTIFY that on August 10, 2015, the date of the Official
Statement of the Town prepared in connection with the sale of the $2,800,000 Bond Anticipation
Note for Various Purposes-2015 (the "Note") of the Town and at all times subsequent thereto, up
to and including August 27, 2015, the date of delivery of the Note, the attached Official
Statement of the Town 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. In addition, I FURTHER
CERTIFY that there has been no adverse material change in the financial condition of the Town
since August 10, 2015.
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 Official Statement is not to be construed as a contract or
agreement with the beneficial owners of the Note.
IN WITNESS WHEREOF, I have hereunto set my signature and affixed the
corporate seal of the Town as of the 27th day of August, 2015.
(SEAL)
Supervisor
2504809 1 038723 CLD
OFFICIAL STATEMENT
NEW ISSUE BOND ANTICIPATION NOTES
In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Town, under existing statutes and court decisions and assuming
continuing compliance with certain tax certifications described herein, (i)interest on the Notes 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 Notes is not treated as a
preference item in calculating the alternative minimum tax imposed on individuals and corporations under the Code;however, such interest is included
in the adjusted current earnings of certain corporations for purposes of calculating the alternative minimum tax unposed on such corporations. In
addition, in dee opinion of Bond Counsel to the Town, under existing statutes, interest on the Notes is exempt from personal income taxes of New York
State and its political subdivisions, including The City of New York. See "Tax Matters"herein.
The Town will NOT designate the Notes as "qualified tax-exempt obligations"pursuant to the provision of Section 265(b)(3)of the Code.
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
(the"Town")
$2,800,000
BOND ANTICIPATION NOTES FOR VARIOUS PURPOSES -2015
(the"Notes")
Interest Rate: 1.75%
Reoffering Yield: 0.66%
CUSIP#: 844572PE1
Dated Date:August 27,2015 Maturity Date: August 26,2016
Security and Sources of Payment: The Notes are general obligations of the Town of Southold, Suffolk County,New York(the
"Town"), and will contain a pledge of the faith and credit of the Town for the payment of the principal thereof and interest thereon and,
unless paid from other sources,the Notes are payable from ad valorem taxes which may be levied upon all the taxable real property within
the Town, subject to certain statutory limitations imposed by Chapter 97 of the Laws of 2011, as amended(the"Tax Levy Limit Law").
(See"Tax Levy Limit Law,"herein).
Prior Redemption- The Notes will not be subject to redemption prior to their maturity.
Foran and Denomination: The Notes will be issued as registered notes,and,when issued,will be registered in the name of Cede
&Co.as partnership nominee of The Depository Trust Company,("DTC')New York,New York,or such other name as may be requested
by an authorized representative of DTC, which will act as the securities depository for the Notes. Individual purchases of the Notes may
be made only in book-entry-only form in denominations of$5,000 or integral multiples thereof Noteholders will not receive certificates
representing their ownership interest in the notes purchased. (See"Book-Entry-Only System" herein.)
Payment: Payment of the principal of and interest on the Notes to the Beneficial Owner of the Notes will be made by DTC
Participants and Indirect Participants in accordance with standing instructions 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 will be the responsibility of the DTC
Participant or Indirect Participant and not of DTC or the District, subject to any statutory and regulatory requirements as may be in effect
from time to time. (See "Book-Entry-Only System"herein.) The District will act as Paying agent for the Notes.
The Notes are offered subject to the final approving opinion of Hawkins Delafield & Wood LLP, New York, New York, Bond
Counsel to the Town, and certain other conditions. It is expected that delivery of the Notes will be made on or about August 27, 2015 in
New York,New York, or as otherwise agreed to by the Town and the purchaser.
THE ATTACHED OFFICIAL STATEMENT OF THE TOWN, DATED AUGUST 10, 2015, TOGETHER WITH THIS
REVISED COVER PAGE DATED AUGUST 19, 2015, CONSTITUTE THE TOWN'S FINAL OFFICIAL STATEMENT WITHIN
THE MEANING OF SECURITIES AND EXCHANGE COMMISSION RULE 15C2-12 (THE "RULE"). AS PROVIDED BY SAID
RULE, INFORMATION OMITTED FROM SAID OFFICIAL STATEMENT IS SET FORTH ON THIS COVER PAGE ONLY, AND
EXCEPT FOR SUCH INFORMATION, NO OTHER REVISIONS TO THE OFFICIAL STATEMENT HAVE BEEN MADE. FOR A
DESCRIPTION OF THE TOWN'S AGREEMENT TO PROVIDE NOTICES OF EVENTS AS DESCRIBED IN THE RULE, SEE
"DISCLOSURE UNDERTAKING"HEREIN.
■
Jefferoea
< . �_.F
TOWN OF SOUTHOLD
SUFFOLK COUNTY,NEW YORK
Town Hall
53095 Route 25
PO Box 1179
Southold,NY 11971
Telephone: (631) 765-4333
Fax: (631)765-4157
TOWN BOARD
Scott A. Russell, Supervisor
James Dinizio,Jr.
Jill M.Doherty
Louisa P.Evans
Robert Ghosio Jr.
William P. Ruland
------------------------
Elizabeth A.Neville,Town Clerk
Vincent M. Orlando, Superintendent of Highways
John A. Cushman II,Town Comptroller
William Duffy,Esq.,Town Attorney
George R. Sullivan,Receiver of Taxes
Bond Counsel
Hawkins Delafield&Wood LLP
New York,New York
Prepared with the Assistance of
MUNICIPAL ADVISOR
MUNISTAT SERVICES,INC.
Mumcipal Finance Advisory Service
12 Roosevelt Avenue
Port Jefferson Station,N.Y. 11776
(631) 331-8888
E-mail:info@munistat.com
Website:http://www mumstat.com
No dealer, broker, salesman or other person has been authorized by the Town to give any information or to make any
representations, other than those contained in this Official Statement and if given or made, such other information or
representations must not be relied upon as having been authorized by the Town. This Official Statement does not constitute an
offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes by any person in anyurisdiction in
which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained
by the Town from sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness. The
information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official
Statement nor any sale made hereunder shall,under any circumstances, create any implication that there has been no change in
the affairs df the Town since the date hereof.
TABLE OF CONTENTS
Page
THENOTES.................................................................................................................................................................................1
DESCRIPTIONOF THE NOTES...................................................................... ................................................................................1
OPTIONALREDEMPTION..............................................................................................................................................................1
BOOKENTRY SYSTEM.. ................................. ...........................................................................................................................1
AUTHORIZATIONAND PURPOSE................................................................... ....................................................... ......................3
SECURITYAND SOURCE OF PAYMENT.........................................................................................................................................3
REMEDIESUPON DEFAULT................................................................................................................ .........................................4
THETOWN..................................................................................................................................................................................4
GENERALINFORMATION............................................................... ...... ...................... ...............................................................4
GOVERNMENT.............................................................................................................................................................................5
EMPLOYEES.............................................. .............................................. ..................................................................................5
ECONOMICAND DEMOGRAPHIC INFORMATION.........................................................................................................6
POPULATION CHARACTERISTICS..................................................................................................................................................6
INCOMEDATA........................... .................................................................................................................................................6
UNEMPLOYMENTRATE STATISTICS............................................................................................................................................6
SELECTED LISTING OF LARGER EMPLOYERS IN THE TOWN.........................................................................................................7
INDEBTEDNESSOF THE TOWN............................................................................................................................................7
CONSTITUTIONAL REQUIREMENTS............................ .......... .. ....... ............................................ ..............................................7
STATUTORYPROCEDURE............................................................................................................................................................8
COMPUTATION OF DEBT LIMIT AND CALCULATION OF NET DEBT CONTRACTING MARGIN............ ...........................................9
DEBT SERVICE REQUIREMENTS-OUTSTANDING BONDS........................................ ............................................................ .....10
TREND OF TowN INDEBTEDNESS..............................................................................................................................................10
DETAILS OF SHORT-TERM INDEBTEDNESS OUTSTANDING........................................................................................................10
CALCULATION OF ESTIMATED OVERLAPPING AND UNDERLYING INDEBTEDNESS............................................................ .........11
DEBTRATIOS............................. ........ .....................................................................................................................................11
AUTHORIZEDBUT UNISSUED ITEMS..........................................................................................................................................12
CAPITALPROGRAM................................................................... ..................... ........ ...................................................... .........12
COMMUNITY PRESERVATION FUND..........................................................................................................................................12
LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS..............................................................................................................14
FINANCESOF THE TOWN....................................................................................................................................................14
FINANCIAL STATEMENTS AND ACCOUNTING PROCEDURES.......................................................................................................14
FundStructure and Accounts.......................................................................... ....................................................................14
Basisof Accounting..............................................................................................................................................................14
INVESTMENTPOLICY......... ........ ............................................................................................................................................15
BUDGETARYPROCEDURES.................................................................................................................................. .....................15
FINANCIALOPERATIONS ...........................................................................................................................................................16
i
TABLE OF CONTENTS-CONTINUED
Page
REVENUES.................................... ............................. .......................... ..... ................................................................ ...........16
RealProperty Taxes............. .............................................. .... ............... ................................................ ... ....................16
STATEAID....... ................................................................ ........................................................................................................16
SALESTAx............................................................. .......................................................................... ............................ ..........17
EXPENDITURES.................................................. ......................... .................................................... .......................................17
CONTRIBUTIONS TO THE RETIREMENT SYSTEMS................ ........................................................................ .............................19
OTHERPOST EMPLOYMENT BENEFITS........................................................... ..........................................................................19
REALPROPERTY TAX INFORMATION............................................................................................................................20
REALPROPERTY TAXES..................................................... ................................ .....................................................................20
TAXLEVY AND COLLECTION RECORD........................... ........................................................................... ..............................21
TAxLEVY LIMrr BILL.................................................................................... ..........................................................................21
TAXRATES......................................................................................... ................... .... ............................ ..............................22
LARGETAXABLE PROPERTIES............................... ............................................ .................................. ...................................23
LITIGATION.............................................................................................................................................................................23
NOTEHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS OF THE STATE AND
MUNICIPALITIESOF THE STATE......................................................................................................................................24
TAXMATTERS.........................................................................................................................................................................25
OPINIONOF BOND COUNSEL............................................ ...................... . ................. .............................................................25
CERTAIN ONGOING FEDERAL TAX REQUIREMENTS AND CERTIFICATIONS......................................... ....................... .............25
CERTAIN COLLATERAL FEDERAL TAX CONSEQUENCES........... ........................................ ................ ......................................25
ORIGINALISSUE DISCOUNT....................... ............................................................................ ................ .... ....................... ....26
NOTEPREMIUM.................. ... ........... .................................... ................... ............... .. ................. ............... ......................26
INFORMATION REPORTING AND BACKUP WITHHOLDING................................... ............. . .......................................................26
MISCELLANEOUS................ ........... ..................................... ................................. ..................................................................27
DOCUMENTS ACCOMPANYING DELIVERY OF THE NOTES.....................................................................................27
ABSENCEOF LITIGATION ................................... ... .................... ............... ... .............. .... ....................................................27
LEGALMATTERS.................................... ....................... ................................................................. ............................... ... ....27
CLOSINGCERTIFICATES.................... ..................... .................. ............................... ...............................................................27
DISCLOSUREUNDERTAKING.............................................................................................................................................28
RATING......................................................................................................................................................................................29
MUNCIPALADVISOR............................................................................................................................................................29
ADDITIONALINFORMATION.............................................................................................................................................29
APPENDIXA: FINANCIAL INFORMATION.....................................................................................................................31
APPENDIX B: ANNUAL FINANCIAL REPORT UPDATE DOCUMENT FOR THE FISCAL YEAR ENDED
DECEMBER 31,2014
ii
OFFICIAL STATEMENT
Relating to the
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
$2,800,000
BOND ANTICIPATION NOTES FOR VARIOUS PURPOSES—2015
This Official Statement, including the cover page and appendices thereto,has been prepared by the Town
h "County" and "State" respectively and resents
of Southold, in the County of Suffolk, New York (t e "Town' , y p y
certain information relating to the Town's $2,800,000 Bond Anticipation Notes for Various Purposes —2015 (the
"Notes"). All quotations from and summaries and explanations ofpprovisions of the Constitution and laws of the
State and acts and proceedings of the Town contained herein do not purport to be complete and are qualified in
their entirety by reference to the official compilations thereof and all references to the Notes and the proceedings
of the Town relating thereto are qualified in their entirety by reference to the definitive form of the Notes and such
proceedings.
THE NOTES
Description of the Notes
The Notes are general obligations of the Town. The Town has pledged its faith and credit for the
payment of the principal of and interest on the Notes and, unless paid from other sources, the Notes are payable
from ad valorem taxes which may be levied upon all the taxable real property within the Town, subject to certain
statutory limitations imposed by the Tax Levy Limit Law. (See"Tax Levy Limit Law"herein).
The Notes will be dated and will mature, without option of prior redemption, as reflected on the cover
page hereof.
The Town will act as Paying Agent for the Bonds. Paying agent fees, if any, will be paid by the
purchaser. The Town's contact information is as follows: John A. Cushman H, Town Comptroller, Town of
Southold, Town Hall, 53095 Main Road, PO Box 1179, Southold, New York 11971,Phone (631) 765-4333, Fax
(631)765-1366 and email: j ohn.cushman @town.southold.ny.us.
Optional Redemption
The Notes will not be subject to redemption prior to their maturity.
Book Entry System
DTC will act as securities depository for those Notes issued as book-entry notes. Such Notes will be
issued as fully-registered securities,in the name of Cede &Co. (DTC's partnership nominee) or such other name
as may be requested by an authorized representative of DTC. One fully registered note certificate will be issued
and deposited with DTC for all of the Notes bearing the same rate of interest and CUS1P number.
DTC is limited-purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial Code, and a"clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and
provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal
debt issues, and money market instruments (from over 100 countries that DTC's participants ("Direct
Participants") deposit with DTC. DTC also facilities the post-trade settlement among Direct Participants of sales
and other securities transactions in deposited securities,through electronic computerized book-entry transfers and
pledges between Direct Participants' accounts. This eliminates the need for physical movement of certificates.
1
Direct Participants include both U.S. and non-U.S. securities brokers and dealers,banks,trust companies,
clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of the Depository
Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing
Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is
owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as
both U.S. and non-U.S. securities brokers and dealers,banks, trust companies and clearing corporations that clear
through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found a www.dtce.com and www.dtc.org.
Purchases of Notes under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Notes on DTC's records. The ownership interest of each actual purchaser of each Note
("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, however,
expected to receive written confirmations providing details of the transaction, as well as periodic statements of
their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books
of Direct or Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interest in the Notes, except in the event that u se of the book-entry
system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC are registered in
the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of the Notes with DTC and their registration in the name of Cede & Co., or
such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Notes; DTC's records reflect only the identity of the Direct Participants to whose
accounts such Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping accounts of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to
time.
Beneficial Owners of the Notes may wish to take certain steps to augment the transmission to them of
notices of significant events with respect to the Notes, such as redemptions, tenders, defaults, and proposed
amendments to the Note documents. For example, Beneficial Owners of the Notes may wish to ascertain that the
nominee holding the Notes for their benefit has agreed to obtain and transmit notices to the Beneficial Owners.
In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request
that copies of notices be provided directly to them.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the
Notes unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual
procedures,DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Notes are
credited on the record date(identified in a listing attached to the Omnibus Proxy).
Principal and interestayments on the Notes will be made to Cede & Co. or such other nominee as may
be requested by an authorizedrepresentativeof DTC. DTC's practice is to credit Direct Participants' accounts
upon DTC's receipt of funds and corresponding detail information from the Town on the payable date, in
accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such
Participant and not of DTC (nor its nominee) or the Town, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to
Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of the Town, disbursement of such payments to Direct Participants will be the responsibility of
DTC), and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.
2
DTC may discontinue providing its services as depository with respect to the Notes at any time by diving
reasonable notice to the Town. Under such circumstances, in the event that a successor depository is not
obtained,note certificates are required to be printed and delivered.
Source:The Depository Trust Company,New York,New York.
The information contained in the above section concerning DTC and DTC's book-entry system has been
obtained from sample offering document language supplied by DTC,but the Town takes no responsibility for the
accuracy thereof.
THE TOWN WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO PARTICIPANTS, TO
INDIRECT PARTICIPANTS OR ANY BENEFICIAL OWNER WITH RESPECT TO (1)THE ACCURACY OF
ANY RECORDS MAINTAINED BY DTC, ANY PARTICIPANTS, OR ANY INDIRECT PARTICIPANT; (II)
THE PAYMENT BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT
WITH RESPECT TO THE PRINCIPAL OF OR INTEREST ON THE NOTES; (III) ANY NOTICE WHICH IS
PERMITTED OR REQUIRED TO BE GIVEN TO HOLDERS; OR (IV) THE SELECTION OF THE
BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF
THE NOTES; OR(V)ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER.
THE TOWN CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC WILL DISTRIBUTE TO
DIRECT PARTICIPANTS OR THAT DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL
DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE NOTES (I) PAYMENTS OF THE PRINCIPAL OF
OR INTEREST ON THE NOTES; (II) CONFIRMATION OF THEIR OWNERSHIP INTEREST IN THE
NOTES; OR (III)REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE&CO. AS NOMINEE,AS
REGISTERED OWNER OF THE NOTES, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT
DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SO SERVE AND ACT IN THE
MANNER DESCRIBED IN THE OFFICIAL STATEMENT.
Authorization and Purpose
The Notes are being issued pursuant to the Constitution and statutes of the State of New York including,
among others, the Town Law and the Local Finance Law to provide funding for the following purposes:
Date of Amount Amount Amount to be
Authorization Purpose Outstanding to be Paid Issued
07/17/2007 Orient By the Sea Road Improvements................................. $ 9,000 $ 3,000 $ 6,000
06/15/2010 Wastewater District Improvements....................................... 110,000 110,000 0
06/21/2011 Acquisition of Highway Payloader&Skidsteer.................. 89,000 50,000 39,000
06/19/2012 Highway Police Facility Improvements................................ 26,000 26,000 0
06/17/2014 Acquisition of Highway Dump Truck................................... 185,000 38,000 147,000
06/17/2014 Bay Avenue Bridge Improvements ....................................... 800,000 40,000 760,000
09/10/2013 Highway Facility Improvements........................................... 825,000 150,000 675,000
09/10/2013 Highway Facility Improvements........................................... 0 0 413,000
06/30/2015 Acquisition of Window Turner............................................. 0 0 510,000
05/01/2015 Pike Street Parking Lot Improvements.................................. 0 0 250,000
$2.044.000 $417,000 $2,800,000
For further information regarding bond authorizations of the Town for capital purposes and other matters
relating thereto see"Indebtedness of the Town".
Security and Source of Payment
thereof.Each Note when duly issued and paid for will constitute a contract between the Town and the holder
3
The Notes 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 of and
interest on the Notes, the Town has the power and statutory authorization to levy ad valorem taxes on all taxable
real property in the Town, subject to certain statutory limitations imposed by the Tax Levy Limit Law. (See"Tax
Levy Limit Law herein).
Under the Constitution of the State, the Town is required to pledge its faith and credit for the payment of
the principal of and interest on the Notes, and the State is specifically precluded from restricting the power of the
Town to levy taxes on real estate for the payment of interest on or principal of indebtedness theretofore
contracted. However, the Tax Levy Limit Law imposes a statutory limitation on the Town's power to increase its
annual tax levy. As a result, the power of the Town to levy real estate taxes on all the taxable real property
within the Town is subject to statutory limitations set forth in Tax Levy Limit Law, unless the Town complies
with certain procedural requirements to permit the Town to levy certain year-to-year increases in real property
taxes. (See"Tax Levy Limit Law"herein).
Remedies Upon Default
Under current law, provision is made for contract creditors (including the Noteholders) of the Town to
enforce payments upon such contracts, if necessary, through court action, although the present statute limits
interest on the amount adjudged due to creditors to nine per centum per annum from the date due to the date of
EAs a general rule,property and funds of a municipal corporation serving the public welfare and interest
have not been judicially subjected to execution or attachment to satisfy a judgment, although judicial mandates to
officials to appropriate and pay judgments out of current funds or the proceeds of a tax levy have been issued.
Remedies for enforcement of payment are not expressly included in the Town's contract with holders of
its bonds and notes, although any permanent repeal by statute or constitutional amendment of a Noteholder's
remedial right to judicial enforcement of the contract should, in the opinion of Bond Counsel, be held
unconstitutional.
The State has consented that any municipality in the State may file a petition with any United States
district court or court of bantcy under any provision of the laws o the United States, now or hereafter in
effect, for the composition or addkrupj�ustmentof municipal indebtedness. Subject to such consent, under the United
States Constitution, Congress has jurisdiction over such matters and has enacted amendments to the existing
federal bankruptcy statute, generally to the effect and with the purpose of affording municipal corporations
under certain circumstances, with easier access to judicially approved adjustment of debts, including judiciaj
control over identifiable and unidentifiable creditors.
In recent times, certain events and legislation affecting remedies on default have resulted in litigation.
While courts of final jurisdiction have upheld and sustained the rights of bondholders and noteholders, such
courts might hold that future events, including financial crises as they may occur in the State and in
municipalities of the State, require the exercise by the State of its emergency police powers to assure the
continuation of essential services.
No principal or interest payments on Town indebtedness are past due. The Town has never defaulted in
the payment of the principal of and interest on any indebtedness.
THE TOWN
There follows in this Statement a brief description of the Town, together with certain information
concerning its economy and governmental organization, its indebtedness, current major revenue sources and
expenditures and general and specific funds.
General Information
The Town,with a land area of 54.5 square miles,is located in eastern Suffolk County on the north fork of
Long Island. Settlement tookplace in 1640. The Village of Greenport is located wholly within the Town. The
Town also includes the area of Fishers Island, which is located approximately twelve miles east of the mainland.
Fishers Island is accessible only by water or air. There is also ferry service operating between Orient Point and
New London, Connecticut.
The Town is primarily a rural resort area with substantial shopping facilities available at Greenport, at
various shopping centers within the Town, and at Riverhead just to the west. Commercial and professional
services are available principally in the hamlets of Cutchogue,Mattituck, Southold and the Village of Greenport.
4
Agriculture has been a major industry in the Town since its origins. In recent years, farm crops have
gradually evolved from basic production to nursery crops including shrubs, sod, potted plants and other
ornamentals. A substantial portion of these products are shipped by ferry across Long Island Sound for
distribution throughout New England. A number of vineyards have been established and wine-making is an
important industry.
Southold has both a hospital (Eastern Long Island Hospital) and a life care facility (Peconic Landing).
The life care facility is one of only two in New York State. Both are significant employers in the Town.
Southold is also a major tourist destination. Traditionally, the Town has been a summer resort area
utilizing the bays, inlets, Long Island and Block Island Sounds. However, new venues and attractions have
substantially increased the tourism season early in the spring well into the fall.
The main highways in the Town are New York State Route 25 and the North Road. Rail transportation is
provided by the Long Island Rail Road with stations at Mattituck, Southold and Greenport. Ferry service is also
available between Orient Point, east of Greenport, and New London, Connecticut as well as from Greenport to
Shelter Island.Bus service is provided by the County of Suffolk.
Electric service is provided by PSEG Long Island; gas service is provided by National Grid. Fire
protection is the responsibility of volunteer fire and fire protection districts. The Town provides its own police
protection. In the Village of Greenport,electric service and fire protection are provided by the Village.
Government
Subject to the provisions of the State Constitution, the Town operatesursuant to the Town Law, the
General Municipal Law, the Local Finance Law, other laws generally applicable to the Town, and any special
laws specifically applicable to the Town. Under such laws, there is no authority for the Town to have a charter,
but pursuant to the Town Law and other laws generally applicable to home rule, the Town may from time to time
adopt local laws which do not conflict with existing laws as enacted by the State.
The legislative power of the Town is vested in the Town Board, which consists of five members, elected
for a term of four years, and the Supervisor, who is the chief executive officer of the Town, elected for a term of
four years. Such terms are staggered such that two or three councilpersons 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 orpartially within the Town, which relay
on their own taxing powers granted by the State to raise revenues. The school districts use the Town s
assessment roll as their basis for taxation of property located within the Town.
Employees
The Town provides services through approximately 216 union and 59 non-union employees.
The following table presents the number of employees represented by organized labor, the names of the
unions and the contract expiration dates.
Approximate Date
Name of Union Membership Contract Expires
Civil Service Employees Association.............. 164 12-31-16
Police Benevolent Association........................ 52 12-31-14a
a. Contract in negotiation
5
ECONOMIC AND DEMOGRAPHIC INFORMATION
Population Characteristics
The Town has had a population trend, as compared to the County and the State, as indicated below:
Year: Town of Southold Suffolk County New York State
1970................................................................. 16,804 1,127,030 18,241,391
1980................................................................. 19,172 1,284,231 17,557,288
1990................................................................. 19,836 1,321,977 17,990,455
2000................................................................. 20,599 1,419,369 18,976,457
2010................................................................. 23,175 1,518,475 19,541,453
2013................................................................. 22,035 1,495,803 19,487,053
Source: U S.Bureau of the Census.
Income Data
Per Capita Money Income
1990 2000 2010 2013a
Town of Southold $19,037 $27,619 $41,450 $44,248
County of Suffolk 18,481 26,577 35,411 36,594
State of New York 16,501 23,389 30,791 32,083
Median Household Income
1990 2000 2010 2013a
Town of Southold $35,392 $49,898 $83,240 $78,890
County of Suffolk 49,128 65,288 84,235 86,821
State of New York 32,965 43,393 55,217 57,327
Source- United State Bureau of the Census
a Note Based on American Community Survey 3-Year Estimates(2011-2013)
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 inferred from the inclusion of
such data in this Official Statement that the Town is necessarily representative of the County or vice versa.
Suffolk New York
Annual Averages: County State
2010................................................ 7.6% 8.9%
2011................................................ 8.9 8.0
2012................................................ 7.8 8.6
2013................................................ 6.5 7.7
2014................................................ 5.3 6.4
2015 (5 Month Average)................ 5.1 5.9
Source Department of Labor,State of New York
6
Selected Listing of Larger Employers in the Town
Approximate
Name Type No. of Employees
Eastern Long Island Hospital.......................... Hospital 390
Mattituck-Cutchogue UFSD............................ Public School 380
Plum Island ADC............................................ U.S. Govt.Facility 360
Town of Southold............................................ Local Government 275
Peconic Landings............................................. Life Care Community 214
Southold UFSD............................................... Public School 164
San Simeon by the Sound................................ Nursing Home 175
Claudio's Restaurant....................................... Restaurant 120
Greenport UFSD ............................................. Public School 100
Stidd Systems. Marine Parts 75
Village of Greenport....................................... Local Government 73
a. Peconic Landing is in the midst of a$26 million construction project. A portion of such project was financed by the Southold Local
Development Corporation in 2015.
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 Notes:
Purpose and Pledge. The Town shall not give or loan any money or property to or in aid of any
individual or private corporation or private undertaking or give or loan its credit to or in aid of any of the
foregoing or any public corporation.
The Town may contract indebtedness only for a Town purpose and shall pledge its faith and credit for
the payment of principal of and interest thereon.
Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes,
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 as determined by statute or the weighted average period of probable
usefulness thereof; no installment may be more than fifty per centum in excess of the smallest prior installment,
unless the Town has authorized the issuance of indebtedness having substantially level or declining annual debt
service. The Town is required to provide an annual appropriation for the payment of interest due during the year
on its indebtedness and for the amounts required in such year for amortization and redemption of its serial bonds
and bond anticipation notes.
General. The Town is further subject to constitutional limitation by the general constitutionally imposed
duty on the State Legislature to restrict the power of taxation, assessment, borrowing money, contracting
indebtedness and loaning the credit of the Town so as to prevent abuses in the exercise of such powers; however,
as has been noted under "Security and Source of Payment", the State Legislature is prohibited by a specific
constitutional provision from restricting the power of the Town to levy taxes on real estate for the payment of
interest on or principal of indebtedness theretofore contracted. However, the Tax Levy Limit Law imposes a
statutory limitation on the Town's power to increase its annual tax levy, unless the Town complies with certain
procedural requirements to permit the Town to levy certain year-to-year increases in real property taxes. (See
`Tax Levy Limit Law"herein).
7
Statutory Procedure
In general, the State Legislature has authorized the power and procedure for the Town to borrow and
incur indebtedness subject, of course, to the constitutional provisions set forth above. The power to spend
money,however, generally derives from other law,including the Town Law and the General Municipal Law.
Pursuant to the Local Finance Law, the Town authorizes the incurrence of indebtedness by the adoption
of a bond resolution approved by at least two-thirds of the members of the Town Board, except in the event that
the Town determines to subject the bond resolution to voter approval by mandatory referendum, in which case
only a three-fifths vote is required.
The Local Finance Law also provides a twenty-day statute of limitations after publication of a bond
resolution which, in effect, estops thereafter legal challenges to the validity of obligations authorized by such
bond resolution except for alleged constitutional violations. The Town has complied with such requirements
with respect to the bond resolution authorizing the issuance of the Notes.
Each bond resolution usually authorizes the construction, acquisition or installation of the object or
purpose to be financed, sets forth the plan of financing and specifies the maximum maturity of the bonds subject
to the legal (Constitution, Local Finance Law and case law) restrictions relating to the period of probable
usefulness with respect thereto.
Each bond resolution also authorizes the issuance of bond anticipation notes prior to the issuance of
serial bonds. Statutory law in New York permits bond anticipation notes to be renewed each year provided that
principal is amortized and provided that such renewals do not (with certain exceptions) extend more than five
years beyond the original date of borrowing. However, notes issued in anticipation of the sale of serial bonds for
assessable improvements are not subject to such five year limit and may be renewed subject to annual reductions
of prince al for the entire period of probable usefulness of the purpose for which such bonds were originally
issued. (See "Payment and Maturity" under"Constitutional Requirements" herein).
In addition,under each bond resolution, the Town Board may delegate, and has delegated,power to issue
and sell bonds and notes,to the Supervisor,the chief fiscal officer of the Town.
In general, the Local Finance Law contains similar provisions providing the Town with power to issue
general obligation revenue anticipation notes,tax anticipation notes, deficiency notes and budget notes.
Debt Limit The Town has the power to contract indebtedness for any Town purpose so long as the
principal amount thereof shall not exceed seven per centum of the average full valuation of taxable real estate
aggregate 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 and statutory method for
determining the full valuation is calculated by dividing the assessed valuation of taxable real estate by the
respective equalization rates assigned to each assessment roll. Such equalization rates are the ratios which each
of such assessed valuations bear to the respective full valuation of such year, as assigned by the Office of Real
Property Tax Services. The State Legislature is required to prescribe the manner by which such ratios shall be
determined. Average full valuation is determined by adding the full valuations for the most recently completed
assessment roll and the four immediately preceding assessments rolls and dividing the resulting sum of such
addition by five.
There is no constitutional limitation on the amount that may be raised by the Town by tax on real estate
in any fiscal year to pay principal and interest on all indebtedness. However, the Tax Levy Limit Law,imposes a
statutory limitation on the power of the Town to increase its annual tax levy, unless the Town complies with
certain procedural requirements to permit the Town to levy certain year-to-year increases in real property taxes.
(See"Tax Levy Limit Law"herein).
The following pages set forth certain details with respect to the indebtedness of the Town.
8
Computation of Debt Limit and Calculation of Net Debt Contracting Margin
(As of August 10, 2015)
Fiscal Year State
Ending Assessed Equalization Full
December 31: Valuation Rate Valuation
2011................................................................. $108,465,500 1.09% $9,950,963,303
2012................................................................. 108,282,986 1.11 9,755,223,964
2013................................................................. 107,853,985 1.15 9,378,607,391
2014................................................................. 107,615,154 1.18 9,119,928,305
2015................................................................. 107,438,154 1.17 9,182,748,205
Total Five Year Full Valuation................................................................................................ $47,387,471,168
Average Five Year Full Valuation........................................................................................... 9,477,494,234
Debt Limit-7% of Average Full Valuation............................................................................. 663,424,596
Inclusions:
Outstanding Bonds:
GeneralPurposesa........................................................................................................... 34,305,000
Other............................................................................................................................... 0
Sub-Total.............................................................................................................. 34,305,000
Bond Anticipation Notes................................................................................................ 2,773,000
TotalInclusions........................................................................................................................ 37.078,000
Exclusions:
Appropriations for Outstanding Bonds.............................................................................. 775,000
Appropriations for Outstanding Notes............................................................................... 417,000
OtherExclusions................................................................................................................ 0
TotalExclusions....................................................................................................................... 1,192,000
Total Net Indebtedness Prior to the Issuance of the Notes...................................................... 35,886,000
TheNotes................................................................................................................................. 2,800,000
Less: BANs to be Redeemed by the Issuance of the Notes..................................................... 1,627,000
Net Effect of the Issuance of the Notes.................................................................................... 1,173,000
Total Net Indebtedness After the Issuance of the Notes.......................................................... 37,059,000
Net Debt Contracting Margin................................................................................................... $626.365.596
Percent of Debt Limit Exhausted............................................................................................. 5.59%
a. Includes$25,054,547 in bonds outstanding for the preservation of open space. See"Community Preservation Fund"herein.
9
Debt Service Requirements- Outstanding Bonds'
Fiscal Year
Ending
December 31: Principal Interest Total
2015 $2,600,000 $1,392,456 $3,992,456
2016 2,555,000 1,284,594 3,839,594
2017 2,635,000 1,160,127 3,795,127
2018 2,675,000 1,066,094 3,741,094
2019 2,245,000 985,294 3,230,294
2020 2,135,000 909,006 3,044,006
2021 2,195,000 826,556 3,021,556
2022 2,040,000 743,356 2,783,356
2023 2,125,000 662,006 2,787,006
2024 2,180,000 576,256 2,756,256
2025 2,225,000 485,113 2,710,113
2026 2,020,000 394,913 2,414,913
2027 2,060,000 308,675 2,368,675
2028 2,115,000 223,700 2,338,700
2029 2,145,000 142,169 2,287,169
2030 2,180,000 59,109 2,239,109
Totals $48 085 887 $11,219,425 $47.349,425
a. Includes$25,954,047 in bonds issued for the preservation of open space. See"Community Preservation Fund"herein. Does not
reflect payments made to date.
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:
2010 2011 2012 2013 2014
Debt Outstanding End of Year:
Bonds $33,375,000 $44,385,000 $41,730,000 $39,185,000 $36,610,000
Bond Anticipation Notes 6,218,000 2,992,000 1,494,000 1,523,000 2,959,000
Total Debt Outstanding $39.593,000 47.377.000 $43.224,000 139,569.000
Details of Short-Term Indebtedness Outstanding
Bond Anticipation Notes
Amount
Maturity Purposes Outstanding
04/07/2016 Various Purposes.............................................................. $ 729,000
08/28/2015 Various Purposes.............................................................. 2,044,000'
Total..................................................................... $2,773.000
a. To be redeemed by the issuance of the Notes in the amount of$1,627,000 and available funds in the amount of$417,000
10
Calculation of Estimated Overlapping and Underlying Indebtedness
Applicable Applicable
Overlapping Date of Percentage Total Net
Units Report Applicable Indebtedness Indebtedness
County of Suffolk.............................. 02-06-15 3.69% $76,934,473 $48,486,779
Village of Greenport.......................... 11-10-14 100.00 8,797,410 8,444,410
School Districtsa................................
Fishers Island ...................... 06-30-14 100.00 0 0
Greenport.............................. 12-05-14 100.00 8,195,000 7,375,500
Mattituck-Cutchogue .......... 12-15-14 98.49 22,352,306 20,564,121
New Suffolk Common ........ 06-30-14 100.00 0 0
Oysterponds ......................... 06-30-14 100.00 32,558 32,558
Southold ............................. 12-01-14 100.00 3,895,000 3,895,000
Fire District........................................
Cutchogue............................. 12-31-13 100.00 0 0
East Marion.......................... 12-31-13 100.00 35,834 35,834
Fishers Island........................ 12-31-13 100.00 428,600 428,600
Mattituck.............................. 12-31-13 100.00 895,796 895,796
Orient.................................... 12-31-13 100.00 0 0
Southold............................... 12-31-13 100.00 600,000 600,000
Totals........................................ $122,166,976 $90,758,598
Sources Annual Financial Reports on file with the Office of the State Comptroller,or more recently published Official Statements
Debt Ratios
(As of August 10,2015)
Percentage
Amounts Per Cayitab Of Full Value`
Total Direct Debt..................................................................... $37,078,000 $1,600 0.40%
Net Direct Debt....................................................................... 37,059,000 1,599 0.40
Total Direct&Applicable Total Overlapping Debt............... . 159,244,976 6,871 1.73
Net Direct&Applicable Net Overlapping Debt..................... 127,817,598 5,515 1.39
a. Inclusive of the Notes
b. The current estimated population of the Town is 23,175(U S Census)
c. The full valuation of taxable real property in the Town for 2014-15 is$9,182,748,205
11
Authorized But Unissued Items
The following Bonds are authorized but unissued:
Date
Authorized Purpose Amount
08-28-07 Open Space Preservation: Agricultural Lands.................... $3,100,000
08-16-11 Stormwater Mitigation......................................................... 439,100
09-10-13 Highway Facility Improvements.......................................... 2,675 000a
01-02-14 Animal Shelter Improvements.............................................. 330,000
05-01-15 Acquisition of Parking Lot................................................... 250,OOOa
06-30-15 Solid Waste Management Facility Improvements............... 510,000a
Total..................................................................................... $7J 04 100
a. To be financed in whole or part by the issuance of the Notes.
Capital Program
The Town annually adopts a three year Capital Improvement Plan. Projects may be funded by State and
Federal aid,reserves,proceeds of obligations,property taxes or a combination thereof. A summary of the Capital
Budget for 2015-2017 is set forth below:
Department 2015 2016 2017
General Town................................................... $ 466,995 $ 62,000 $ 62,000
Solid Waste District......................................... 1,550,000 -0- -0-
Total..................................................... 2 016 95 62 000 62,000
Sources
Appropriations................................................. $ 466,955 $ 62,000 62,000
Town Debt....................................................... 1,550,000 -0- -0-
Total.................................................... $2,016,995 $ 62,000 $ 62,000
Community Preservation Fund
In 1998, the voters of the five East End towns (East Hampton, Riverhead, Shelter Island, Southampton,
and Southold) approved a referendum creating the Community Preservation Fund (the "Fund"), which is a
conservation program to preserve open space and farmland in the five towns. The fund is financed by a 2% tax
on certain real estate sales. This is a one-time tax that the buyer of real estate is required to pay when purchasing
a new or used home or vacant property. In 2006, the voters in all five towns approved a referendum to extend the
collection of the tax through 2030. Recent legislation has been passed by the Senate and Assembly extending the
life of the program to 2050. If the State approves the legislation, the residents of the Towns would have to
authorize the amendment to the program via another referendum.
The Fund facilitates a voluntary program whereby landowners can sell their land or the development
rights to the land to the respective towns at fair market value. The towns may issue bonds for purchases to be
paid back through the life of the Fund with the 2% tax revenues. When a town finances an acquisition through
the issuance of bonds, Section 64e of Town Law requires the preparation of a report by or on behalf of the Town
Supervisor which demonstrates how such indebtedness will be repaid by the Fund, including an estimate of
projected revenues of the Fund during the period of indebtedness, an accounting of all other indebtedness
incurred against the Fund to be repaid for the same period, and a finding that there will be sufficient revenue to
repay such indebtedness in its entirety from the Fund.
12
The following represents the Town's annual 2% Land Transfer Taxes of the Fund for the five most
recently completed fiscal years and the current budget. Such amounts do not include other revenues received for
grants and interest income.
Fiscal Year
Ending Total Land
December 31: Transfer Taxes
2010............................................................................. $3,869,750
2011............................................................................. 3,570,355
2012............................................................................. 3,842,768
2013............................................................................. 5,023,334
2014............................................................................. 6,060,255
2015 (Budget).............................................................. 5,448,000
As of the date of this Official Statement, there are $25,054,547 in Town's bonds outstanding, the debt
service on which is expected to be paid by the Fund. The following represents the annual debt service
requirements on the Town's outstanding bonds originally issued for the purposes of preserving open space; it
does not reflect payments made to date.
Fiscal Year
Ending
December 31: Principal Interest Total
2015........................................................................... $1,338,500 $1,006,692 $2,345,192
2016........................................................................... 1,364,143 953,959 2,318,102
2017........................................................................... 1,433,861 883,005 2,316,866
2018........................................................................... 1,461,173 833,685 2,294,858
2019........................................................................... 1,473,560 786,455 2,260,015
2020........................................................................... 1,491,947 734,427 2,226,374
2021........................................................................... 1,538,147 677,538 2,215,685
2022........................................................................... 1,563,147 617,523 2,180,670
2023........................................................................... 1,640,497 555,315 2,195,912
2024........................................................................... 1,696,597 489,341 2,185,938
2025........................................................................... 1,729,983 418,923 2,148,906
2026........................................................................... 1,757,982 345,973 2,103,955
2027........................................................................... 1,797.982 270,639 2,068,621
2028........................................................................... 1,856,282 196,265 2,052,547
2029........................................................................... 1,887,355 124,683 2,021,038
2030........................................................................... 1,922,891 51,550 1.974.441
Totals...................................................................... $25.954.0478 945 970 34.900.017
The Town has enacted a debt service policy that is reviewed annually and approved by the Town Board.
The Town Board has determined that an appropriate amount of fund balance should be maintained in the Fund in
order to meet the Town's obligation to repay the bonded indebtedness. As such, the Town has set aside'the
current and ensuing year's debt service to ensure that there is adequate coverage in the Fund.
13
Landfill Closure and Postclosure Care Costs
The Town owns a landfill on a site in the unincorporated area of Cutchogue, commonly known as the
Cutchogue Landfill. The Town ceased accepting waste at its Cutchogue Landfill as of October 8, 1993.
Placement of the final cover, referred to as capping, on the landfill was completed in November 2003. In
addition to placement of the final cover on the landfill, state and federal regulations presently require the Town to
perform certain maintenance and monitoring functions at the site for up to thirty years. The Town has and will
continue to comply with said requirements. The ongoing post closure costs are estimated to be between$27,000
and$30,000 per year from 2015 through 2017. The Town paid$25,805 for such costs in 2014 and will continue
to pay these costs in the future.
Actual costs associated with the capping totaled $7,681,720. Financing for closure activities was
provided in part through a grant from the New York State Department of Environmental Conservation in the
amount of$2,000,000. The balance was provided through a State subsidized loan received in July,2004 from the
New York State Environmental Facilities Corporation. Costs associated with postclosure care will be paid from
charges to future users of the collection facility and site and future tax revenue.
FINANCES OF THE TOWN
Financial Statements and Accounting Procedures
The Town maintains its financial records in accordance with the Uniform System of Accounts for Towns
prescribed by the State Comptroller. The financial records of the Town are audited by independent accountants.
The last such audit made available for public inspection covers the fiscal year ended December 31, 2013. In
addition, the financial affairs of the Town are subject toperiodic compliance review by the Office of the State
Comptroller to ascertain whether the Town has complied with the requirements of various State and Federal
statutes. A summary of the 2014 unaudited financial results of the Town are presented in Appendix A. As
required by law, The Town prepares an Annual Financial Report Update Document (unaudited and not prepared
in accordance with Generally Accepted Accounting Principles "GAAP")for submission to the State Comptroller.
Such report for fiscal year ending 2014 has been filed and a copy of such report is attached as Appendix B.
Fund Structure and Accounts
The Town utilizes fund accounting to record and report its various service activities. A fund represents
both a legal and an accounting entity which segregates the transactions of specific programs in accordance with
special regulations,restrictions or limitations.
There are two basic fund types: governmental funds that are used to account for basic services and
capital projects; and fiduciary funds that account for assets held in a trustee capacity. Account groups, which do
not represent funds, are used to record fixed assets and long-term obligations that are not accounted for in a
specific fund.
The Town presently maintains the following governmental funds: General Fund, Highway Fund,
Community Preservation Fund and Special Districts Funds, and the Capital Projects Fund. Fiduciary funds
consist of a Trust and Agency Fund. There are no proprietary funds. Account groups are maintained for fixed
assets and long-term debt.
Basis of Accounting
The Town's governmental funds are accounted for on a modified accrual basis of accounting. Under the
modified accrual basis, revenues are recognized when they become susceptible to accrual - that is, when they
become "measurable" and "available" to finance expenditures to the current period. Revenues are susceptible to
accrual include real property taxes,intergovernmental revenues (State and Federal aid) and operating transfers.
Expenditures are generally recognized under the modified accrual basis of accounting in which
recognition occurs 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.
14
Investment Policy
Pursuant to State law, including Sections 10 and 11 of the General Municipal Law (the "GML"), the Town is
generally permitted to deposit moneys in banks or trust companies located and authorized to do business in the State. All
such deposits, including special time deposit accounts and certificates of deposit, in excess of the amount insured under
the Federal Deposit Insurance Act, are required to be secured in accordance with the provisions of and subject to the
limitations of Section 10 of the GML.
The Town may also temporarily invest moneys in: (1) obligations of the United States of America; (2)
obligations guaranteed by agencies of the United States of America where the payment of principal and interest are
guaranteed by the United States of America; (3) obligations of the State of New York; (4) with the approval of the New
York State Comptroller,in tax anticipation notes or revenue anticipation notes issued by any municipality, school district,
or district corporation, other than those notes issued by the Town, itself; (5) certificates of participation issued in
connection with installment purchase agreements entered into by political subdivisions of the State pursuant to Section
109-b(10) of the GML; (6) obligations of a New York public benefit corporation which are deemed lawful investments
for municipalities pursuant to the enabling statute of such public benefit corporation; or(7) in the case of moneys held in
certain reserve funds established by the Town pursuant to law,in obligations of the Town.
All of the foregoing investments are required to be payable or redeemable at the option of the owner within such
times as the proceeds will be needed to meet expenditures for purposes for which the moneys were provided and, in the
case of 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, delivered to and held in custody of a bank or trust company
in the State pursuant to a written custodial agreement as provided by Section 10 of the GML.
The Town Board has adopted an investment policy and such policy conforms with applicable laws of the State
governing the deposit and investment of public moneys. All deposits and investments of the Town are made in
accordance with such policy.
Budgetary Procedures
The head of each administrative unit of the Town is required to file detailed estimates of revenues (other than
real property taxes) and expenditures for the next fiscal year with the budget officer(Supervisor)on or before August 1S`
Estimates for each fire district situated within the Town must also be filed with the budget officer by this date. After
reviewing these estimates, the budget officerprepares a tentative budget which includes his recommendations. A budget
message explaining the main features of the budget is also prepared at this time. The tentative budget is filed with the
Town Clerk not later than the 30th of September. Subsequently, the Town Clerk presents the tentative budget to the
Town Board at the regular or special hearing which must be held on or before October 5th. The Town Board reviews the
tentative budget and makes such changes as it deems necessary and that are not inconsistent with the provisions of the
law. Following this review process, the tentative budget and such modifications, if any, as approved by the Board
become the preliminary budget. A public hearing, notice of which must be duly published in the Town's official
newspaper, on the preliminary budget is generally required to be held on the Thursday immediately following the general
election. At such hearing, any person may express his or her opinion concerning the preliminary budget; however, there
is no requirement or provision that the preliminary budget or any portion thereof be voted on by members of the public.
After the public hearing, the Town Board may further change and revise the preliminary budget. The Town Board, by
resolution, adopts the preliminary budget as submitted or amended no later than November 20th, at which time, the
preliminary budget becomes the annual budget of the Town for the ensuing fiscal year. Budgetary control during the year
is the responsibility of the Supervisor who is assisted in this area by the Town Comptroller. Any changes or
modifications to the annual budget, including the transfer of appropriations among line items, must be approved by
resolution of the Town Board. However, the supervisor is authorized to transfer certain budgeted amounts within
departments.
Budget Summaries for the 2014 and 2015 fiscal years may be found in Appendix A.
15
Financial Operations
The Supervisor functions as the chief fiscal officer as provided in Section 2 of the Local Finance Law; in this
role, the Supervisor is responsible for the Town's accounting and financial reporting activities. In addition, the
Supervisor is also the Town s budget officer and must therefore prepare the annual tentative budget for submission to the
Town Board. Pursuant to Section 30 of the Local Finance Law, the Supervisor has been authorized to issue or renew
certain specific types of notes. As required by law, the Supervisor must execute an authorizing certificate which than
becomes a matter of public record.
The Town Board, as a whole, serves as the finance board of the Town and is responsible for authorizing, by
resolution, all material financial transactions such as operating and capital budgets and bonded debt.
Town finances are operated primarily through the General and Special Revenue Funds. The General Fund
receives most of its revenue from real property tax and State aid. Current o erating expenditures are paid from these
funds subject to available appropriations. The Town also has refuse, sewer and wastewater districts,which are accounted
for within separate funds. The primary sources of income for these districts comes from special assessments levied
against district properties at the same time real estate taxes are levied. Capital projects and equipment purchases are
accounted for in special capital projects funds. The Town observes a calendar year(January 1 through December 31)for
operating and reporting purposes.
Revenues
The Town receives most of its revenues from a real property tax on all taxable pro erty situated within the Town
and from State Aid. A summary of such revenues for the five most recently completedpfiscal years may be found in
Appendix A. See also "Tax Levy Limit Law"herein.
Real Property Taxes
See "Real Property Tax Information",herein.
State Aid
The Town receives financial assistance from the State. 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. Additionally, if the State should experience difficulty in borrowing funds in anticipation of the receipt of State
taxes in order to pay State aid to municipalities and school districts in the State,including the Town,in this year or future
years, the Town may be affected by a delay in the receipt of State aid until sufficient State taxes have been received by
the State to make State aid payments.
Based on the unaudited Annual Financial Report Update Document of the Town, which is subject to change, the
Town received approximately 4.72% of its total General Fund operating revenue from State aid in 2014. There is no
assurance, however, that State appropriations for aid to municipalities will continue, either pursuant to existing formulas
or in any form whatsoever. The State is not constitutionally obligated to maintain or continue such aid and, in fact, the
State has reduced funding to municipalities and school districts in certain years in order to balance its own budget.
Although the Town cannot predict at this time whether there will be any delays and/or reductions in State aid in
the current year or in future fiscal years, the Town may be able to mitigate the impact of any delays or reductions by
reducing expenditures, increasing revenues, appropriating other available funds on hand, and/or by any combination of
the foregoing.
16
The following table sets forth the percentage of the Town's General Fund revenue comprised of State aid for
each of the fiscal years 2010 through 2013, and unaudited for 2014.
Year
Ended Total General Fund State and Federal Aid
December 31: Revenue State Aid To Revenues M
2010 $26,082,580 $1,216,047 4.66%
2011 27,207,336 1,133,604 4.17
2012 26,740,120 1,108,200 4.14
2013 26,727,045 1,267,765 4.74
2014(Unaudited) 27,434,304 1,293,819 4.72
Source: Audited financial statements(2009-2013)and the unaudited annual update document for 2014.
Sales Tax
The County of Suffolk shares a portion of the proceeds from its sales tax with towns, villages, and school
districts. These sales tax distributions are done in accordance with sharing agreements based on population,real property
valuation and/or other factors, some of which are required by statue under certain circumstances and others or which are
left to the discretion of the County. All of the sharing agreements must be approved by the county legislature. In 2015,
the County increased the distribution by approximately 15%.
The following table sets forth the Town's share of sales tax revenue for each of the fiscal years 2010 through
2014 and as budgeted for fiscal year ended December 31, 2015.
Year
Ended Sales
December 31: Taxes
2010 $ 855,473
2011 855,473
2012 855,473
2013 855,473
2014 855,473
2015 (Budget) 1,019,873
Source: Town Accounting and Finance Department.
Expenditures
The ma. r categories of expenditure for the Town are General Government Support, Public Safety,
Transportation, Home & Community Services, Economic Assistance and Opportunity and Employee Benefits. A
summary of the expenditures for the five most recently completed fiscal years and the estimated expenditures for the
current fiscal year may be found in Appendix A.
Employee Pension System
Substantially all employees of the Town are members of the New York State and Local Employees' Retirement
System ("ERS") or the State and Local Police and Fire Retirement System ("PFRS" and together with ERS, the
"Retirement System"). The Retirement System is a cost-sharing multiple public employer retirement system. The
obligation of employers and employees to contribute and the benefits to employees are governed by the New York State
Retirement System and Social Security Law (the"Retirement System Law"). The Retirement System offers a wide range
of plans and benefits which are related to years of service and final average salary, vesting of retirement benefits, death
and disability benefits and optional methods of benefit payments. All benefits generally vest after five years of credited
service, except for "Tier 6" employees, as discussed below, whose benefits vest after ten years of credited service. The
Retirement System Law generally provides that all participating employers in the Retirement System are jointly and
severally liable for any unfunded amounts. Such amounts are collected through annual billings to allarticipating
employers. Generally, all employees, except certain part-time employees, participate in the Retirement Spystem. The
Retirement System is non-contributory with respect to members hired prior to July 27, 1976. All members hired on or
17
after July 27, 1976 and before January 1, 2010 must contribute three percent of their gross annual salary towards the costs
of retirement programs until they attain ten years in the Retirement System, at such time contributions become voluntary.
On December 10, 2009, then Governor Paterson signed into law the creation of a new Tier 5, which is effective for new
ERS employees hired on or after January 1, 2010. New ERS employees in Tier 5 contribute 3% of their salaries. There
is no provision for these contributions to cease for Tier 5 employees after a certain period of service.
Pension reform legislation changed the billing cycle for employer contributions to the ERS retirement system to
match budget cycles of the Town. Under the previous method, the Town was not provided with required payment until
after the budget was implemented. Under the reforms implemented, the employer contribution for a given fiscal year is
based on the value of the pension fund on the prior April 1, instead of the following April 1. As a result, the Town is
notified of and can include the actual cost of the employer contribution in its budget. Legislation also required a
minimum payment of 4.5% of payroll each year, including years in which investment performance of the fund would
make a lower employer contribution possible.
In addition, the pension payment date for all local governments was changed from December 15 to February 1
and permits the legislative body of a municipality to establish a retirement contribution reserve fund for the purpose of
financing retirement contributions in the future. The New York State Retirement System has advised the Town that
municipalities can elect to make employer contribution payments in the December or the following February, as required.
If such payments are made in the December prior to the scheduled payment date in February, such payments may be
made at a discount amount.
On March 16, 2012, Governor Cuomo signed into law the new Tier 6 pension program, effective for new ERS
employees hired after April 1, 2012. The Tier 6 legislation provides for increased employee contribution rates of
between 3% and 6%, an increase in the retirement age from 62 years to 63 years, a readjustment of the pension multiplier,
and a change in the time period for final average salary calculation from 3 years to 5 years. Tier 6 employees will vest in
the system after ten years of employment and will continue to make employee contributions throughout employment.
Members of the PFRS are divided into four tiers. The plans adopted for PFRS employees are noncontributory for
Tier 1 and Tier 2 employees. PFRS members that were hired between July 1, 2009 to January 8, 2010 are currently in
Tier 3, which has a 3% employee contribution rate by members. There is no Tier 4 in PFRS. PFRS members hired after
January 9, 2010 are in Tier 5 which also requires a 3% employee contribution. PFRS members hired after April 1, 2012
are in Tier 6, which also originally has a 3% contribution requirement for members for fiscal year 2012-2013; however,
as of April 1, 2013, Tier 6 PFRS members are required to contribute a specific percentage of their annual salary, as
follows, until retirement or until the member has reached 32 years of service credit, whichever occurs first: $45,000.00
or less contributes 3%; $45,000.01 to $55,000.00 contributes 3.5%; $55,000.01 to $75,000.00 contributes 4.5%;
$75,000.01 to$100,000.00 contributes 5.75%; and more than$100,000.00 contributes 6%.
Due to significant capital market declines in the past, the State's Retirement System portfolio has experienced
negative investment performance and severe downward trends in market earnings. As a result of the foregoing, the
employer contribution rate for the State's Retirement System continues to be higher than the minimum contribution rate
established in the past. The State calculates contribution amounts based upon a five-year rolling average. As a result,
contribution rates are expected to remain higher than the minimum contribution rates set by past legislation. To mitigate
the expected increases in the employer contribution rate, various forms of legislationhas been enacted that would permit
local governments to borrow a portion of their required payments from the State pension plan. The Town has not found it
necessary to amortize any payments to the Retirement System.
Pursuant to Chapter 105 of the Laws of 2010, the New York State Legislature authorized local governments to
make available a retirement incentive program with estimated total costs to the Town of $312,837. The cost of the
program is being billed and paid over five years beginning in 2012 and will include interest at 7.5%. The 2014
installment was paid during 2013. Future principal and interest payments to maturity are as follows:
Fiscal Year Ending Total Principal
December 31: Principal Interest And Interest
2015.................................... $62,242 $9,686 $71,928
2016.................................... 66,909 5,019 71,928
Totals ................................. SIZ 151 14 705 143 856
18
Contributions to the Retirement Systems
Fiscal Year Amount
Ending of
December 31: Contribution
2010............................................................................ $2,222,691
2011............................................................................ 3,136,267
2012............................................................................ 3,276,453
2013............................................................................ 4,628,692
2014............................................................................ 3,721,926
2015 (Budget) ............................................................ 4,269,197
Other Post Employment Benefits
The Town provides post-retirement healthcare benefits to various categories of former employees. These costs
may be expected to rise substantially in the future. Accounting rules now require governmental entities, such as the
Town,to account for post-retirement health care benefits as it accounts for vested pension benefits. GASB Statement No.
45 ("GASB 45")described below requires such accounting.
OPEB refers to "other post-employment benefits," meaning benefits other than pension benefits. OPEB consists
primarily of health care benefits, and may include other benefits such as disability benefits and life insurance. Before
GASB 45, OPEB costs were generally accounted for and managed as current expenses in the year paid and were not
reported as a liability on governmental financial statements.
GASB 45 requires municipalities and school districts to account for OPEB liabilities in the same manner as they
already account for pension liabilities. It requires them to adopt the actuarial methodologies used for pensions, with
adjustments for the different characteristics of OPEB and the fact that most municipalities and school districts have not
set aside any funds against this liability. Unlike GASB Statement No. 27, which covers accounting for pensions, GASB
45 does not require municipalities or school districts to report a net OPEB obligation at the start.
Under GASB 45, based on actuarial valuation, an annual required contribution ("ARC") is 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. If a municipality or school district contributes an amount less than the ARC, a net OPEB obligation will result,
which is required to be recorded as a liability on its financial statements.
GASB 45 does not require that the unfunded liability actually be amortized nor that it be advance funded, only
that the municipality or school district account for its unfunded accrued liability and compliance in meeting its ARC.
The Town presents its financial statements under a comprehensive statutory basis of accounting in accordance with
principles prescribed by the Office of the State Comptroller("OSC") of the State of New York.
19
The Town's annual OPEB cost, the amount actually paid and changes to the Town's net OPEB
obligation to the Plan for the year ended December 31,2013 are as follows:
Normal Cost $2,707,968
Amortization of unfunded actuarial liability (UAAL) over 30 years 3,633,408
Interest 254,855
Annual Required Contribution(ARC) 6,626,231
Interest on net other postemployment benefits obligation 1,042,581
Adjustment to ARC (1,507,314)
Annual OPEB cost(expense) 6,161,498
Less: contribution for year ended December 31, 2013 1,498,955
Increase in net OPEB obligation 4,662,543
Net OPEB obligation—beginning of year 26,064,516
Net OPEB obligation—end of year $30 727,059
The Town's unfunded actuarial accrued OPEB liability could have a material adverse impact upon the
Town's finances and could force the Town to reduce services,raise taxes or both.
Actuarial Valuation is required every two years for OPEB plans with more than two hundred members,
or every three years if there are less than two hundred members. Additional information about GASB 45 and
other accounting rules applicable to municipalities and school districts may be obtained from GASB.
In February of 2015, the OSC proposed legislation to provide the State and certain local governments
with the authority to establish trusts in which to accumulate assets for OPEB and to establish an OPEB
investment fund in the sole custody of the State Comptroller for the investment of OPEB assets of the State and
participating eligible local governments. At this time, New York State has not developed guidelines for the
creation and use of irrevocable trusts for the funding of OPEB. As a result, the Town has decided to continue
funding the expenditure on a pay-as-you-go basis.
REAL PROPERTY TAX INFORMATION
Real Property Taxes
The Town derives a major portion of its revenues from a tax on real property (see "Statement of
Revenues, Expenditures and Changes in Fund Balance" in Appendix B, herein.) Property taxes accounted for
approximately 83% of total general fund revenues, for the fiscal year ended 2013. On June 24, 2011, the Tax
Levy Limit Law was enacted, which imposes a tax levy limitation upon the municipalities, school districts and
fire districts in the State, including the Town, without providing an exclusion for debt service on obligations
issued by municipalities and fire districts,including the Town. See"Tax Levy Limit Law,"herein.
20
The following table sets forth the percentage of the Town's General Fund revenue (excluding other
financing sources) comprised of real property taxes for each of the fiscalyears 2010 through 2013, unaudited
figures for 2014 and budgeted figures for he year ending December 31, 2015.
Year Total General Real Real Property
Ended Fund Property Taxes to
December 31: Town Revenue Taxes Revenues M
2010 $26,082,580 $21,532,952 82.56%
2011 27,207,336 21,734,453 79.88
2012 26,740,120 22,412,761 83.82
2013 26,727,045 22,215,752 83.12
2014(Unaudited) 27,434,304 23,042,527 83.99
2015 (Budgeted) 29,911,682 23,191,122 77.53
Source.Audited financial statements(2010-2013),Annual Update Document-unaudited-(2014)and the adopted budget for the fiscal
year ending December 31,2015. The budget revenues include the appropriation of fund balance.
The following table presents the total tax levy and collection performance for each of the last five fiscal
years.
Tax Levy and Collection Record
2011 2012 2013 2014 2015
Total Tax Levy....................... $114,576,777 $117,274,147 $120,372,442 $123,165,036 $126,505,103
Amount Collected.................. 109,539,295 112,913,821 115,755,965 118,579,140 121,356,218
Returned to County
Amount ............................... 5,037,482 4,360,326 4,616,477 4,585,896 5,148,885
Percentage............................ 4.40% 3.72% 3.84% 3.72% 4.07%
Uncollected at End of Year
of Levy............................... None None None None None
Tax Collection Procedure
Property taxes for the Town are collected by the Town tax receiver. Such taxes are due and payable in
equal installments on December 1 and May 10, but may be paid without penalty by January 10 and May 31,
respectively. The penalty added to delinquent taxes is one-twelfth the rate of interest determined by the State
Commissioner of Taxation and Finance. The rate is determined each year by July 15 based on the one-year
constant maturity yield index for United States Treasury securities for the quarter-year ending on the immediately
preceding June 30. The rate is effective for a twelve month period commencing August 1 each year and in no
event will be less than ten per centum per annum.
The Town receives its full levy before the end of its fiscal year. Uncollected amounts are not segregated
by the Town tax receiver, and any deficiency in tax collection is the County's liability.
Tax Levy Limit Law
Prior to the enactment of Chapter 97 of the Laws of 2011 (the"Tax Levy Limit Law") on June 24, 2011,
all the taxable real property within the Town had been subject to the levy of ad valorem taxes to pay the bonds
and notes of the Town and interest thereon without limitation as to rate or amount. However, the Tax Levy Limit
Law imposes a tax levy limitation upon the Town for any fiscal year commencing after May 31, 2012, continuing
through June 15, 2020, unless extended, without providing an exclusion for debt service on obligations issued by
the Town. As a result, the power of the Town to levy real estate taxes on all the taxable real property within the
Town, without limitation as to rate or amount, may be subject to statutory limitations, according to the formulas
set forth in the Tax Levy Limit Law.
21
The following is a brief summary of certain relevant provisions of Tax Levy Limit Law. The summary is not
complete and the full text of the Tax Levy Limit Law should be read in order to understand the details and implications
thereof.
The Tax Levy Limit Law imposes a limitation on increases in the real property tax levy of the Town, subject to
certain exceptions. The Tax Levy Limit Law permits the Town to increase its overall real property tax levy over the tax
levy of the prior year by no more than the "Allowable Levy Growth Factor", which is the lesser of one and two-one
hundredths or the sum of one plus the Inflation Factor; provided, however that in no case shall the levy growth factor be
less than one. The "Inflation Factor" is the uotie of: (i) the average of the 20 National Consumer Price Indexes
determined by the United States Department ofabor for the twelve-month period ending six months prior to the start of
the coming fiscal year minus the average of the National Consumer Price Indexes determined by the United States
Department of Labor for the twelve-month period ending six months prior to the start of the prior fiscal year, divided by:
(ii) the average of the National Consumer Price Indexes determined by the United States Department of Labor for the
twelve-month period ending six months prior to the start of the prior fiscal year, with the result expressed as a decimal to
four places. The Town is required to calculate its tax levy limit for the upcoming year in accordance with the provision
above and provide all relevant information to the New York State Comptroller prior to adopting its budget. The Tax
Levy Limit Law sets forth certain exclusions to the real property tax levy limitation of the Town,including exclusions for
certain portions of the expenditures for retirement system contributions and tort judgments payable by the Town. The
Town Board may adopt a budget that exceeds the tax levy limit for the coming fiscal year, only if the governing board of
the Town first enacts, by a vote of at least sixty percent of the total voting power of the Town Board, a local law to
override such limit for such coming fiscal year.
The Tax Levy Limit Law does not contain an exception from the levy limitation for the payment of debt service
on either outstanding general obligation bonds or notes of the Town or such indebtedness incurred after the effective date
of the Tax Levy Limit Law. As such, there can be no assurances that the Tax Levy Limit Law will not come under legal
challenge for violating (i) Article VIII, Section 12 of the State Constitution for not providing an exception for debt
service on obligations issued prior to the enactment of the Tax Levy Limit Law, (ii) Article VIII, Section 10 of the State
Constitution by effectively eliminating the exception for debt service to general real estate tax limitations, and (iii)
Article VIII, Section 2 of the State Constitution by limiting the pledge of its faith and credit by a municipality or school
district for the payment of debt service on obligations issued by such municipality or school district.
Tax Rates
(Per$100 Assessed Valuation)
Fiscal Year Ending December 31:
2011 2012 2013 2014 2015
General-Townwide.............. $199.96 $206.45 $205.19 $213.29 $215.03
General-Outside Village...... 7.57 5.69 8.41 6.53 2.86
Highway................................. 44.32 46.11 47.98 45.98 45.23
22
Large Taxable Properties
2014-2015 Assessment Rolla
Assessed
Name Type Valuation
LILCO,LIPA Marketspan Keyspan................................... Utility $1,772,822
Peconic Landing at Southold.............................................. Residential Community 1,357,704
Alan Cardinale ................................................................... Shopping Center 422,995
Village of Greenport-Power Plant...................................... Utility 400,000
Fishers Island Dev. Corp. .................................................. Residential Development 354,600
Robins Island Holding LLC............................................... Private Lands 336,900
Damianos,Herodotus......................................................... Vineyard 223,800
New York Telephone/Verizon .......................................... Utility 152,031
E&C Property Holdings ................................................... Commercial 128,400
Levin Family Limited Partnership...................................... Motel&Restaurant 124,950
Anderson,Bradley&Francesca......................................... Farmland&Private Lands 120,200
Norris, Susan...................................................................... Various Properties 111,800
North Fork Bank ................................................................ Bank Building 100,136
Kimogenor Pt Co. .............................................................. Co-Op 94,600
Driftwood Cove.................................................................. Country Club 90,000
' 5.790.938°
a.Assessment Roll established in 2014 for levy and collection of taxes during 2015 Fiscal Year.
b.Represents approximately 5.39%of the total taxable assessed valuation of the Town for 2015.
LITIGATION
The Town of Southold is subject to a number of lawsuits in the ordinary conduct of its affairs. In the opinion of
the Town, after consultation with the Town Attorney, 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:
Nocro Ltd. and The Heritage at Cutcho ue LLC v. Scott A. Russell et al. This action seeks to nullify certain
actions of the Town Board and/or the Planning Board, including the adoption of residential subdivision regulations and
certain resolutions pertaining to the State Environmental Quality Review Act, as well as, compensatory damages in the
sum of $40,000,000 and punitive damages based upon allegations that the Town defendants conspired to deprive the
Plaintiffs of certain constitutional rights. Insurance coverage may be available for potential liability for alleged
compensatory damages. The Suffolk County Supreme Court dismissed all actions against each governmental officer
named personally in the suit. The Town has entered into a Stipulation of Settlement with the Plaintiffs that stays the
action while the Plaintiffs make a site plan application for a 55 and older community at the subject property to the Town
of Southold Planning Board. The Stipulation contains a conceptual plan that shall be the basis for the Plaintiffs'
application to the Town of Southold Planning Board and sets the maximum number of units, the maximum gross floor
area and the required percentage of open space for the project. Upon the Plaintiffs receiving final site plan approval, the
action will be discontinued. Pursuant to the Stipulation,the Plaintiffs may only recommence the litigation based upon the
occurrence of a limited number of events, such as the failure of the Town to abide by the Stipulation.
23
East End Resources LLC v. Town of Southold Planning Board et al. This action arises from a
residential site plan application pending before the Town of Southold Planning Board, seeking the approval of a
multi-unit planned retirement community (the "Application"). Plaintiff/Petitioner alleges that the Town, and its
various agencies, have systematically delayed and sought to defeat the approval of the Application. In this
action, Plaintiff/Petitioner asserts eight claims, seeking declaratory relief compelling the approval of the
Application, as well as compensatory relief in the amount of$20 million as a result of alleged federal and state
constitutional violations. The Town has perfected its appeal of appeal of the Trial Court's denial of the Town's
motion for summary judgment. The Town anticipates that the Appellate Division will hear oral argument on this
matter sometime this fall.
Jackson v. Town of Southold Police Dept., et al. Plaintiffs claim that their Civil Rights were violated
during a County Anti-Drug Task Force raid of their home and are seeking damages in the sum of $3 million
dollars. The warrants at issue in this case were executed by the East End Drug Task Force (EEDTF) under the
auspices of the Suffolk County District Attorney's office. Southold has an officer, Kenneth Richert, who serves
as a designee to the EEDTF. Officer Richert is individually named as a defendant in the lawsuit. The Town was
improperly named as a party based on Plaintiffs' mistaken belief that the warrant was executed by the Southold
Police Department. The Plaintiffs have recently amended their Complaint to add the EEDTF and the DA's office
as defendants. This is a supervisory liability claim and, as such, we do not believe the Town has any significant
liability exposure. The Town Attorney does not believe the claim has any merit. The Court granted the Town's
motion for summary judgment and all claims against the Town of Southold and the Southold Police Department
were dismissed. The claims against Officer Richert are still pending and the County has assumed his defense.
NOTEHOLDER 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 Notes, and investors should be
thoroughly familiar with this Official Statement, includin% 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 rate of unemployment and inflation, termination of commercial operations by corporate
taxpayers and employers, as wen as natural catastrophes, could adversely affect the assessed valuation of
property in the Town and its ability to maintain fund balances and other statistical indices commensurate with its
current credit rating. Accordingly, a decline in the Town's credit rating could adversely affect the market value
of the Notes.
In addition,if and when a holder of any of the Notes should elect to sell a Note 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 Notes. The price or principal value of the Notes is dependent on the prevailing level of interest
rates. If interest rates should increase, the price of a bond or note may decline causing the bond or noteholder to
potentially incur a capital loss if such bond or note is sold prior to its maturity.
The financial condition of the Town as well as the market for the Notes could be affected by a varietyof
factors, some of which are beyond the Town's control. There can be no assurance that adverse events in the Sate
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 Notes. If a 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 borrowing and the market for and market value of outstanding
debt obligations,including the Notes,could be adversely affected.
The Town is dependent in part on financial assistance from the State in the form of State aid. There may
be reductions in State aid to local governments and school districts, including the Town, in the current and future
fiscal years. State aid accounts for a 4.72% portion of the Town's 2014 revenues. The Town does not believe
future State aid reductions will have a material adverse effect on the Town. Should the Town fail to receive State
aid expected from the State in the amounts and at the times expected, occasioned by a delay in the payment of
such monies or by a reduction in State aid,the Town is authorized by the Local Finance Law to provide operating
funds by borrowing on account of such uncollected State aid. (See also"State Aid"herein).
Future amendments to applicable statutes affecting the treatment of interest paid on municipal
obligations, including the Notes, for income taxation purposes could have an adverse effect on the market value
of the Notes (see"Tax Matters"herein).
24
TAX MATTERS
Opinion of Bond Counsel
In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Town, under existing statutes
and court decisions and assuming continuing compliance with certain tax certifications described herein,
(i interest on the Notes is excluded from gross income for Federal income tax purposespursuant to Section 103
of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii)interest on the Notes is not treated as a
reference 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. The Tax Certificate of the Town (the
"Tax Certificate"), which will be delivered concurrently with the delivery of the Notes will contain provisions
and procedures relating to compliance with applicable requirements of the Code. In rendering its opinion, Bond
Counsel has relied on certain representations, certifications of fact, and statements of reasonable expectations
made by the Town in connection with the Notes, and Bond Counsel has assumed compliance by the Town with
certain ongoingprovisions and procedures set forth in the Tax Certificate relating to compliance with applicable
requirements othe Code to assure the exclusion of interest on the Notes 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 Notes is
exempt from personal income taxes of New York State and its political subdivisions, including the City of New
York.
Bond Counsel expresses no opinion regarding any other Federal or state tax consequences with respect to
the Notes. Bond Counsel renders its opinion under existing statutes and court decisions as of the issue date, and
assumes no obligation to update, revise or supplement its opinion after the issue date to reflect any action
hereafter taken or not taken, or any facts or circumstances that may hereafter come to its attention, or changes in
law or in interpretations thereof that may hereafter occur, or for any other reason. 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 Notes, or under state and
local tax law.
Certain Ongoing Federal Tax Requirements and Certifications
The Code establishes certain ongoing requirements that must be met subsequent to the issuance and
delivery of the Notes in order that interest on the Notes be and remain excluded from gross income under Section
103 of the Code. These requirements include,but are not limited to,requirements relating to use and expenditure
of gross proceeds of the Notes, yield and other restrictions on investments of gross proceeds, and the arbitrage
rebate requirement that certain excess earnings on gross proceeds be rebated to the Federal government.
Noncompliance with such requirements may cause interest on the Notes to become included in gross income for
Federal income tax purposes retroactive to their issue date, irrespective of the date on which such noncompliance
occurs or is discovered. The Town, in executin the Tax Certificate, will certify to the effect that the Town will
comply with the provisions and procedures setorth therein and that it will do and perform all acts and things
necessary or desirable to assure the exclusion of
the Code. interest on the Notes from gross income under Section 103 of
Certain Collateral Federal Tax Consequences
The following is a brief discussion of certain collateral Federal income tax matters with respect to the
Notes. It does not purport to address all aspects of Federal taxation that may be relevant to a particular owner of
a Note. 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 Notes.
Prospective owners of the Notes should be aware that the ownership of such obligations may result in
collateral Federal income tax consequences to various categories of persons, such as corporations (including S
corporations and foreign corporations),financial institutions,property and casualty and life insurance companies,
individual recipients of Social Security and railroad retirement benefits, individuals otherwise eligible for the
earned income tax credit, and taxpayers deemed to have incurred or continued indebtedness to purchase or carry
obligations the interest on which is excluded from gross income for Federal income tax purposes. Interest on the
Notes 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.
25
Original Issue Discount
"Original issue discount" ("OID") is the excess of the sum of all amounts payable at the stated maturity
of a Note (excluding certain "qualified stated interest" that is unconditionally payable at least annually at
prescribed rates) over the issue price of that maturity. In general, the "issue price" of a maturity means the first
price at which a substantial amount of the Notes of that maturity was sold (excluding sales to bond houses,
brokers, or similar persons acting in the capacity as underwriters, placement agents, or wholesalers). In general,
the issue price for each maturity of Notes is expected to be the initial public offering price set forth in this
Official Statement. Bond Counsel further is of the opinion that, for any Notes having OID (a "Discount Note"),
OID that has accrued and is properly allocable to the owners of the Discount Notes 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
Notes.
In general, under Section 1288 of the Code, OID on a Discount Note accrues under a constant yield
method, based on periodic compounding of interest over prescribed accrual periods using a compounding rate
determined by reference to the yield on that Discount Note. An owner's adjusted basis in a Discount Note is
increased by accrued OID for purposes of determining gain or loss on sale, exchange, or other disposition of such
Note. Accrued OID may be taken into account as an increase in the amount of tax-exempt income received or
deemed to have been received for purposes of determining various other tax consequences of owning a Discount
Note even though there will not be a corresponding cash payment.
Owners of Discount Notes 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 Notes.
Note Premium
In general, if an owner acquires a Note for a purchase price(excluding accrued interest) or otherwise at a
tax basis that reflects a premium over the sum of all amounts payable on the Note after the acquisition date
(excluding certain "qualified stated interest" that is unconditionally payable at least annually at prescribed rates),
that premium constitutes "note premium" on that Note (a"Premium Note"). In general, under Section 171 of the
Code, an owner of a Premium Note must amortize the note premium over the remaining term of the Premium
Note, based on the owner's yield over the remaining term of the Premium Note determined based on constant
yield principles (in certain cases involving a Premium Note callable prior to its stated maturity date, the
amortization period and yield may be required to be determined on the basis of an earlier call date that results in
the lowest yield on such note). An owner of a Premium Note must amortize the note premium by offsetting the
qualified stated interest allocable to each interest accrual period under the owner's regular method of accounting
against the note premium allocable to that period. In the case of a tax-exempt Premium Note,if the note premium
allocable to an accrual period exceeds the qualified stated interest allocable to that accrual period, the excess is a
nondeductible loss. Under certain circumstances, the owner of a Premium Note may realize a taxable gain upon
disposition of the Premium Note even though it is sold or redeemed for an amount less than or equal to the
owner's original acquisition cost. Owners of any Premium Notes should consult their own tax advisors regarding
the treatment of note 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 note
premium on, sale, exchange, or other disposition of Premium Notes.
Information Reporting and Backup Withholding
Information reporting requirements apply to interest paid on tax-exempt obligations, including the Notes.
In general, such requirements are satisfied if the interest recipient completes, and provides the payor with, a Form
W-9, "Request for Taxpayer Identification Number and Certification,' or if the recipient is one of a limited class
of exempt recipients. A recipient not otherwise exempt from information reporting who fails to satisfy the
information reporting requirements will be subject to `backup withholding," which means that the payor is
required to deduct and withhold a tax from the interest payment, calculated in the manner set forth in the Code.
For the foregoing purpose, a "payor" generally refers to the person or entity from whom a recipient receives its
payments of interest or who collects such payments on behalf of the recipient.
26
If an owner purchasing Notes through a brokerage account has executed a Form W-9 in connection with
the establishment of such account, as generally can be expected, no backup withholding should occur. In any
event, backup withholding does not affect the excludability of the interest on the Notes from gross income for
Federal income tax purposes. Any amounts withheld pursuant to backup withholding would be allowed as a
refund or a credit against the owner's Federal income tax once the required information is furnished to the
Internal Revenue Service.
Miscellaneous
Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal
or state level, may adversely affect the tax-exempt status of interest on the Notes under Federal or state law or
otherwise prevent beneficial owners of the Notes from realizing the full current benefit of the tax status of such
interest. In addition, such legislation or actions (whether currently proposed, proposed in the future, or enacted)
and such decisions could affect the market price or marketability of the Notes. For example, the Fiscal Year
2016 Budget proposed by the Obama Administration recommends a 28% limitation on "all itemized deductions,
as well as other tax benefits" including "tax-exempt interest." The net effect of such a proposal, if enacted into
law, would be that an owner of a tax-exempt obligation with a marginal tax rate in excess of 28% would pay
some amount of Federal income tax with respect to the interest on such tax-exempt obligation,regardless of issue
date.
Prospective purchasers of the Notes should consult their own tax advisors regarding the foregoing
matters.
DOCUMENTS ACCOMPANYING DELIVERY OF THE NOTES
Absence of Litigation
Upon delivery of the Notes, the Town shall furnish a certificate of the Town Attorney, dated the date of
delivery of the Notes,to the effect that there is no controversyor litigation of any nature pending or threatened to
restrain or enjoin the issuance, sale, execution or delivery oftheNotes, or in any way contesting or affecting the
validity of the Notes or any of the proceedings taken with respect to the issuance and sale thereof or the
application of moneys to the payment of the Notes, 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 Notes, which has not
been disclosed in this Official Statement.
Legal Matters
Legal matters incident to the authorization, issuance and sale of the Notes will be subject to the final
approving opinion of the law firm of Hawkins Delafield&Wood LLP,Bond Counsel to the Town with respect to
the Notes, which will be available at the time of delivery of the Notes. Such opinion will be to the effect that the
Notes 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 Notes and interest thereon, subject to the limitations imposed by
the Tax Levy Limit Law. The opinion shall also discuss the treatment of interest on the Notes under applicable
tax laws, as further described in the section entitled "Tax Matters" and shall contain further statements to the
effect that (a) the enforceability of rights or remedies with respect to the Notes may be limited by bankruptcy,
insolvency, or other laws affecting creditors' rights or remedies heretofore or hereafter enacted, and (b) said law
firm gives no assurances as to the adequacy, sufficiency or completeness of the Official Statement of the Town
relating to the Notes, or any additional proceedings, reports, correspondence, financial statements or other
documents, containing financial or other information relative to the Notes which have been or may be furnished
or disclosed to purchasers of the Notes.
Closing Certificates
Upon the delivery of the Notes,the Purchaser will be furnished with the following items: (i) a Certificate
of the Supervisor of the Town to the effect that as of the date of this Official Statement and at all times
subsequent thereto, up to and including the time of the delivery of the Notes, this 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 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 Notes, and having attached thereto a coy of
this Official Statement; (ii) a Certificate signed by the Town Supervisor evidencing payment for the Notes; (iii) a
27
Signature Certificate evidencing the due execution of the Notes, including statements that(a)no litigation of any
nature is pending or threatened, restraining or en oining the issuance and delivery of the 1 otes or the levy and
collection of taxes to pay the principal thereof and interest thereon nor in any manner questioning the
F
and authority under which the Notes were authorized or affecting the validity of the Notes issued
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
Notes have been repealed, revoked or rescinded; ana (iv) a'Tax Certificate executed by the Town'Supervisor, as
described under"Tax Matters " herein.
DISCLOSURE UNDERTAKING
This Official Statement is in a form "deemed final" by the Town for the urposes of Securities and
Exchange Commission Rule 15c2-12 (the "Rule"). At the time of the delivery ofpthe Notes, the Town will
provide an executed copy of its "Undertaking to Provide Notices of Events" (the "Undertaking"). Said
Undertaking will constitute a wntten agreement or contract of the Town for the benefit of holders of and owners
of beneficial interests in the Notes, to provide, or
cause to be provided, to the Electronic Municipal Market
Access ("EMMA") System implemented by the Municipal Securities Rulemaking Board established pursuant to
Section 15B(b)(1) of the Securities Exchange Act of 1934, or any successor thereto, timely notice not m excess
of ten(10)business days after the occurrence of any of the following events with respect to the Notes:
(i) principal and interest payment delinquencies; (ii) non-payment related defaults
if material; ui) unscheduled draws on debt service reserves reflecting financial
difficulties; iv) unscheduled draws on credit enhancements reflecting financial
difficulties; (v) substitution of credit or liquidity providers, or their failure to perform;
(vi) adverse tax opinions, the issuance by the Internal Revenue Service of ro osed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 57b1 FEB) or
other material notices of determinations with respect to the tax status of the Notes, or
other material events affecting the tax status of the Notes; (vii) modifications to rights
of Noteholders if material; (viii) Note calls, if material, and tender offers; (ix)
defeasances; (x� release, substitution, or sale of property securing repayment of the
Notes, if material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership or
similar event of the Town; [note to clause (xii): For the purposes of the event identified
in clause (xii) above, the event is considered to occur when any of the following occur:
the appointment of a receiver, fiscal agent or similar officer for the Town in a
froceeding under the U.S. Bankruptcy Code or in any other proceeding under state or
ederal law in which a court or government authority has assumed jurisdiction over
substantially all of the assets or business of the Town, or if such jurisdiction has been
assumed by leaving the existinggoverning body and officials or officers in possession
but sub'ect to the supervision and orders of a court or governmental authority, or the
entry off an order confirming a plan,of reorganization, arrangement or liquidation by a
court or governmental authon*tv havingg supervision or jurisdiction over substantially all
of the assets or business of the Townl; (xiii) the consummation of a merger
consolidation, or acquisition involving the T1 own or the sale of all or substantially all o
the assets of the Town, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if material; and
(xiv) appointment of a successor or additional trustee or the change of name of a trustee,
if material.
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 Notes; 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.
The Town's Undertaking shall remain in full force and effect until such time as the principal of,
redemption premiums, if any, and interest on the Notes shall have been paid in full. The sole and exclusive
remedy for breach or default under the Undertaking is an action to compel specific performance of the
undertakings of the Town, and no person or entity, including a holder of the Notes, shall be entitled to recover
monetary damages thereunder under any circumstances. Any failure by the Town to comply with the
Undertaking will not constitute a default with respect to the Notes.
The Town reserves the right to amend or modify the Undertaking under certain circumstances set forth
therein; provided that, any such amendment or modification will be done in a manner consistent with Rule 15c2-
12 as then in effect.
28
RATING
The Notes are not rated. Moody's Investors Service ("Moody's") 7 WTC at 250 Greenwich Street,New
York, NY, Phone: (212) 553-4055 and Fax: (212) 298-6761, has assigned a rating of"Aal" to the outstanding
Bonds of the Town. Such rating was upgraded from"Aa2" on July 1, 2015. This rating reflects only the view of
such rating agency and an explanation of the significance of such rating should be obtained from Moody's.
There can be no assurance that such rating will not be revised or withdrawn, if in the judgment of market price
and the availability of a secondary market for the outstanding bonds and notes of the Town.
MUNCIPAL ADVISOR
Munistat Services, Inc. (the "Municipal Advisor"), is a Municipal Advisor, registered with the Securities
and Exchange Commission and the Municipal Securities Rulemaking Board. The Municipal Advisor serves as
independent financial advisor to the Town on matters relating to debt management. The Municipal Advisor is a
financial advisory and consulting organization and is not engaged in the business of underwriting, marketing, or
trading munici al securities or any other negotiated instruments. The Municipal Advisor has provided advice as
to the plan ofpfinancing and the structuring of the Notes and has reviewed and commented on certain legal
documents, including this Official Statement. The advice on the plan of financing and the structuring of the
Notes was based on materials provided by the Town and other sources of information believed to be reliable.
The Municipal Advisor has not audited, authenticated, or otherwise verified the information provided by the
Town or the information set forth in this Official Statement or any other information available to the Town with
respect to the appropriateness, accuracy, or completeness of disclosure of such information and no guarantee,
warranty, or other representation is made by the Municipal Advisor respecting the accuracy and completeness of
or any other matter related to such information and this Official Statement.
ADDITIONAL INFORMATION
Additional information may be obtained upon request from the office of the Town Comptroller, John A.
Cushman 11, Town of Southold, Town Hall, PO Box 1179, Southold, New York 11971, Phone (631) 765-4333,
Fax (631) 765-4157 or from the office of Munistat Services, Inc., 12 Roosevelt Avenue, Port Jefferson Station,
New York 11776,telephone number 631/331-8888 and website: http://www.munistat.com.
Munistat Services, Inc. may place a copy of this Official Statement on its website at www.munistat.com.
Unless this Official Statement specifically indicates otherwise, no statement on such website is included by
specific reference or constitutes a part of this Official Statement. Munistat Services, Inc. has prepared such
website information for convenience, but no decisions should be made in reliance upon that information.
Typographical or other errors may have occurred in converting original source documents to digital format, and
neither the Town nor Munistat Services, Inc. assumes any liability or responsibility for errors or omissions on
such website. Further, Munistat Services, Inc. and the Town disclaim any duty or obligation either to update or
to maintain that information or any responsibility or liability for any damages caused by viruses in the electronic
files on the website. Munistat Services, Inc. and the Town also assumes no liability or responsibility for any
errors or omissions,unauthorized editing, or for any updates to dated website information.
29
Any statements in this Official Statement involving matters of opinion or estimates, whether or not
expressly stated, are intended as such and not as representations of fact. No representation is made that any of
such statements will be, in fact, realized. This Official Statement is not to be construed as a contract or
agreement between the Town and the original purchasers or owners of any of the Notes.
The preparation and distribution of this Official Statement has been authorized by the applicable
refunding bond resolution of the Town which delegate to the Supervisor the power to sell and issue the Notes.
TOWN OF SOUTHOLD,NEW YORK
By: s/s SCOTT A.RUSSELL
Supervisor and Chief Fiscal Officer
Town of Southold
Southold,New York
August 10, 2015
30
APPENDIX A
FINANCIAL INFORMATION
Balance Sheet
General Fund
Fiscal Year Ending December 31:
2013 2014
ASSETS
Cash and Investments $ 16,219,638 $ 14,881,168
Taxes Receivable 417
Accounts Receivable 55,354 108,120
Due From Other Funds 162,013 884,861
State and Federal Aid Receivables 430,783 83,768
Due From Other Governments 1,062,516 1,026,844
Supply Inventory 2,562 2,230
Prepaid Expenses 940,805 1,049,439
Total Assets $ 18,873,671 $ 18,036,847
LIABILITIES AND FUND EQUITY
Accounts Payable $ 826,307 $ 1,432,182
Judgements and Claims 215,842
Due to Other Funds 2,539,197 3,008,510
Due to Component Units 590,248
Due to Other Governments 21,238 861
Unearned Revenues 5,897,508 5,015,873
Total Liabilities 10,090,340 9,457,426
Fund Balances
Nonspendable Fund Balance 943,367 1,051,668
Restricted 949,338
Assigned 4,192,859 2,995,954
Unassigned 3,647,105 3,582,461
Total Fund Equity 8,783,331 8,579,421
Total Liabilities and Fund Equity $ 18,873,671 $ 18,036,847
Sources: 2013 Audited Financial Reports & 2014 Unaudited Annual Financial Update
Document of the Town("AUD"). The AUD is not prepared in accordance with Generally
Accepted Accounting Principles.
Table itself NOT audited.
Town of Southold
Al
Statement of Revenues,Expenditures and Changes in Fund Balance
General Fund Town Wide
Fiscal Year Ending December 31:
2010 2011 2012 2013 2014
Revenues:
Real Property Taxes $ 21,532,952 $ 21,734,453 $ 22,412,761 $ 22,215,752 $ 23,042,527
Other Real Property Tax Items 84,201 85,765 87,106 88,672 90,140
Non-Property Tax Items 885,473 885,473 885,473 885,473 885,473
Departmental Income 416,600 529,774 365,375 371,612 506,796
Intergovernmental Charges 222,657 271,087 265,515 281,879 318,300
Use of Money&Property 306,952 270,073 258,080 218,061 221,720
Licenses&Permits 261,339 269,551 252,802 399,053 323,828
Fines&Forfeitures 225,311 184,388 171,918 209,013 168,973
Sale of Property&Comp.for Loss 300,228 1,024,171 352,696 - 330,688 148,833
Miscellaneous Local Sources 399,402 310,392 306,501 238,438 239,219
Interfund Revenues 30,000 30,000
State Aid 1,216,047 1,133,604 1,108,200 1,267,765 1,293,819
Federal Aid 231,418 508,605 243,693 190,639 194,676
Total Revenues 26,082,580 27,207,336 26,740,120 26,727,045 27,434,304
Expenditures-
General Government Support 5,125,064 5,796,536 5,674,226 5,463,810 5,965,043
Public Safety 8,626,229 9,247,050 8,680,449 9,308,943 9,363,682
Public Health 33,788 33,788 33,800 33,300 33,300
Transportation 424,568 474,404 474,117 495,712 488,925
Economic Assistance&Opportunity 1,118,864 1,165,355 1,229,260 1,231,227 1,279,830
Culture&Recreation 282,289 277,281 285,985 298,472 299,708
Home&Community Services 402,959 419,977 421,661 403,734 354,646
Employee Benefits 5,911,381 7,534,913 8,192,073 8,526,179 10,322,189
Debt Service Principal&Interest 824,417 800,115 849,415 676,849 735,583
Total Expenditures 22,749,559 25,749,419 25,840,986 26,438,226 28,842,906
Excess(Deficiency)of Revenues Over
Expenditures 3,333,021 1,457,917 899,134 288,819 (1,408,602)
Operating Transfers In 30,000 4,229,705
Operating Transfers Out (453,613) (686,286) (224,372) (404,982) (3,064,993)
Total Other Financing Sources(Uses) (453,613) (656,286) (224,372) (404,982) 1,164,712
Excess(Deficiency)of Revenues and
Other Sources Over Expenditures and
Other Uses 2,879,408 801,631 674,762 (116,163) (243,890)
Fund Balance Beginning of Year 4,543,693 7,423,101 8,224,732 8,899,494 8,783,331
Adjustments
Fund Balance End of Year $ 7,423,101 $ 8,224,732 $ 8,899,494 $ 8,783,331 $ 8,539,441
Sources.Audited Financial Reports of the Town(2010-2013)&Unaudited Annual Update Document for 2014("AUD")
The AUD is not prepared in accordance with Generally Accepted Accounting Principles
Table itself NOT audited.
Town of Southold
A2
Statement of Revenues,Expenditures and Changes in Fund Balance
Highway Fund Town Wide
Fiscal Year Ending December 31.
2010 2011 2012 2013 2014
Revenues-
Real Property Taxes $ 4,032,425 $ 4,586,896 $ 4,762,749 $ 4,935,817 $ 4,719,206
Other Real Property Tax Items 6,477 7,148 7,569 7,749 7,532
Intergovernmental Charges 20,240
Departmental Income 250
Use of Money&Property 5,634 6,583 11,971 9,778 7,927
Licenses&Permits 6,914 10,410 12,322 17,808 20,821
Sale of Property&Comp.for Loss 1,419 9,950 5,624 33,181
Miscellaneous Local Sources 3,399
State Aid 343,024 416,217 338,278 422,878 391,204
Federal Aid 120,630 240,253 463,710 78,979 12,735
Total Revenues 4,516,773 5,277,457 5,599,998 5,498,873 5,192,606
Expenditures:
General Government Support 6,884 6,283 6,610 6,831 7,215
Transportation 2,959,459 3,175,948 3,258,750 3,452,305 3,537,370
Employee Benefits 1,484,619 1,517,515 1,706,967 1,970,194 789,586
Debt Service Principal&Interest 98,070 96,657 187,896 96,281 147,573
Total Expenditures 4,549,032 4,796,403 5,160,223 5,525,611 4,481,744
Excess(Deficiency)of Revenues Over
Expenditures (32,259) 481,054 439,775 (26,738) 710,862
Operating Transfers In 95,000 23,754
Operating Transfers Out (30,000) (129,000) (120,977) (157,671) (915,397)
Total Other Financing Sources(Uses) (30,000) (129,000) (120,977) (62,671) (891,643)
Excess(Deficiency)of Revenues and
Other Sources Over Expenditures and
Other Uses (62,259) 352,054 318,798 (89,409) (180,781)
Fund Balance Beginning of Year 704,725 642,466 994,520 1,313,318 1,223,909
Prior Perdiod Adjustments
Fund Balance End of Year $ 642,466 $ 994,520 $ 1,313,318 $ 1,223,909 $ 1,043,128
Sources:Audited Financial Reports of the Town(2010-2013)&Unaudited Annual Update Document for 2014
The AUD is not prepared in accordance with Generally Accepted Accounting Principles
Town of Southold
A3
Statement of Revenues,Expenditures and Changes in Fund Balance
Non-Major Government Funds
Fiscal Year Ending December 31:
2010 2011 2012 2013 2014
Revenues.
Real Property Taxes $ 3,745,198 $ 3,373,173 $ 3,239,132 $ 3,810,118 $ 3,658,085
Other Real Property Tax Items 4,245 1,364 996 1,415 1,138
Non-Property Tax Items 300,987 314,260 530,485 568,005 612,931
Departmental Income 2,096,830 2,501,551 2,592,333 2,752,197 2,922,160
Intergovernmental Charges
Use of Money&Property 9,005 15,522 9,089 10,060 9,507
Licenses&Permits 144,470 168,084 176,377 191,973 148,388
Sale of Property&Comp for Loss 312,569 358,459 321,485 340,331 385,907
Miscellaneous Local Sources 738 9,983 657 6,909 905
State Aid 156,581 149,462 160,184 251,118 205,055
Federal Aid 304,342 197,389 272,389 43,810 140,874
Total Revenues 7,074,965 7,089,247 7,303,127 7,975,936 8,084,950
Expenditures:
General Government Support 69,800 75,439 85,247 56,449
Public Safety 1,132,118 1,283,580 1,297,524 1,245,237 1,322,805
Public Health
Home&Community Services 3,292,453 3,524,760 3,743,899 3,864,700 4,215,805
Employee Benefits 1,163,979 1,181,638 1,262,617 1,362,722 684,720
Debt Service Principal&Interest 672,725 668,337 685,220 687,086 786,218
Total Expenditures 6,331,075 6,733,754 7,074,507 7,216,194 7,009,548
Excess(Deficiency)of Revenues Over
Expenditures 743,890 355,493 228,620 759,742 1,075,402
Operating Transfers In
Operating Transfers Out (149,234) (325,171) (260,000) (150,000) (642,356)
Total Other Financing Sources(Uses) (149,234) (325,171) (260,000) (150,000) (642,356)
Excess(Deficiency)of Revenues and
Other Sources Over Expenditures and
Other Uses 594,656 30,322 (31,380) 609,742 433,046
Fund Balance Beginning of Year 644,133 1,238,789 1,269,111 1,237,731 1,847,473
Adjustments
Fund Balance End of Year $ 1,238,789 $ 1,269,111 $ 1,237,731 $ 1,847,473 $ 2,280,519
(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
Sources:Audited Financial Reports of the Town(2010-2013)&Unaudited Annual Update Document for 2014
The AUD is not prepared in accordance with Generally Accepted Accounting Principles
Town of Southold
A4
Budget Summary
2015
Fiscal Year Ending December 31,2015
Appropriations&Provisions Less Less. Amount to Be Raised
Fund for Other Uses Estimated Revenues Unexpended Balance by Tax
General $ 29,911,682 $ 3,920,560 $ 2,800,000 $ 23,191,122
General-Outside Village 2,200,586 1,337,870 570,000 292,716
Highway-Townwide 5,547,885 449,319 460,000 4,638,566
Community Development 74,310 74,310 0
Risk Retention Fund 542,000 542,000 0
Community Preservation Fund 9,889,950 5,463,000 4,426,950 0
Employees Health Plan 100,000 (605,000) 705,000 0
Total-Town $ 48,266,413 $ 11,182,059 $ 8,961,950 $ 28,122,404
Orient Road Improvement District 3,340 640 2,700
East-West Fire Protection District 772,136 500 6,800 764,836
Fishers Island Ferry District 4,485,461 3,260,488 436,870 788,103
Solid Waste Management District 4,551,066 2,329,500 50,000 2,171,566
Southold Wastewater District 111,825 3,750 108,075
Fishers Island Sewer District 33,750 33,750 0
F.I Refuse&Garbage District 610,540 51,897 558,643
Orient Mosquito District 86,700 86,700
Subtotal-Special Districts $ 10,654,818 $ 5,676,135 $ 498,060 $ 4,480,623
Orient-East Marion Park District 55,000 15,000 40,000
Southold Park District 327,726 327,726
Cutchogue-New Suffolk Park Dist. 140,000 140,000
Mattituck Park District 527,917 34,435 80,930 412,552
Subtotal-Park Districts $ 1,050,643 $ 49,435 $ 80,930 $ 920,278
Fishers Island Fire District 395,200 25 395,175
Orient Fire District 669,295 51,250 618,045
East Marion Fire District 610,745 86,100 15,000 509,645
Southold Fire District 1,885,031 23,486 1,861,545
Cutchogue Fire District 1,350,633 1,000 1,349,633
Mattituck Fire District 1,890,426 1,890,426
Subtotal-Fire Districts $ 6,801,330 $ 161,861 $ 15,000 $ 6,624,469
Total-All Districts 18,506,791 5,887,431 593,990 12,025,370
Grand Total $ 66,773,204 $ 17,069,490 $ 9,555,940 $ 40,147,774
Source.Adopted Budget of the Town
Town of Southold
A5
Budget Summary
2014
Fiscal Year Ending December 31,2014
Appropriations&Provisions Less- Less: Amount to Be Raised
Fund for Other Uses Estimated Revenues Unexpended Balance by Tax
General $ 29,120,456 $ 3,862,963 $ 1,609,500 $ 23,647,993
General-Outside Village 2,171,884 1,262,800 263,643 645,441
Highway-Townwide 5,599,800 3765369 290,000 4,933,431
Community Development 89,850 94,715 (4,865)
Risk Retention Fund 521,000 532,500 (11,500)
Community Preservation Fund 5,395,500 3,690,758 15785,561 (80,819)
Employees Health Plan 600,000 3,980,890 143,678 (3,524,568)
Total-Town $ 43,498,490 $ 13,800,995 $ 4,092,382 $ 25,605,113
Orient Road Improvement District 3,370 800 2,570
East-West Fire Protection District 778,484 400 998 777,086
Fishers Island Ferry District 3,526,940 2,515,000 50,000 961,940
Solid Waste Management District 4,528,975 2,128,500 158,414 2,242,061
Southold Wastewater District 125,200 15,300 109,900
Fishers Island Sewer District 46,000 32,471 2,129 11,400
F.I.Refuse&Garbage District 965,935 40,000 152,000 773,935 -
Orient Mosquito District 0
Subtotal-Special Districts $ 9,974,904 $ 4,716,371 $ 379,641 $ 4,878,892
Orient-East Marion Park District 140,000 10,000 130,000
Southold Park District 321,300 321,300
Cutchogue-New Suffolk Park Dist 140,000 10,000 130,000
Mattituck Park District 520,225 33,500 150,000 336,725
Subtotal-Park Districts $ 1,121,525 $ 33,500 $ 170,000 $ 918,025
Fishers Island Fire District 1,000 (1,000)
Orient Fire District 657,545 48,028 609,517
East Marion Fire District 609,996 57,400 45,000 507,596
Southold Fire District 1,861,001 22,493 1,838,508
Cutchogue Fire District 1,322,100 1,000 y 1,321,100
Mattituck Fire District 1,854,805 1,854,805
Subtotal-Fire Districts $ 6,305,447 $ 129,921 $ 45,000 $ 6,130,526
Total-All Districts 17,401,876 4,879,792 594,641 11,927,443
Grand Total $ 60,900,366 $ 18,680,787 $ 4,687,023 $ 37,532,556
Source:Adopted Budget of the Town.
Town of Southold
A6
TOWN OF SOUTHOLD
APPENDIX B
ANNUAL FINANCIAL REPORT UPDATE DOCUMENT
FOR THE FISCAL YEAR ENDED DECEMBER 31,2014
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.
All Numbers in This Report
Have Been Rounded To »
The Nearest Dollar
ANNUAL FINANCIAL REPORT
'UPDATE DOCUMENT
For The
TOWN of Southold
County of Suffolk
For the Fiscal Year Ended 12/31/2014
AUTHORIZATION
ARTICLE 3, SECTION 30 of the GENERAL MUNICPAL LAW:
1. ***Every Municipal Corporation***shall annually make a report of its
financial condition to the Comptroller. Such report shall be made by the
Chief Fiscal Officer of such Municipal Corporation***
5. All reports shall be certified by the officer making the same and shall
be filed with the Comptroller*** It shall be the duty ofthe incumbent
officer at the time such reports are required to be filed with the
Comptroller to file such report***
State of NEW YORK
Office of The State Comptroller
Division of Local Government and School Accountability
Albany, New York 12236
Page 1
TOWN OF Southold
*** FINANCIAL SECTION **"
Financial Information for the following funds and account groups are included in the Annual Financial Report filed by
your government for the fiscal year ended 2013 and has been used by the OSC as the basis for preparing this
update document for the fiscal year ended 2014:
(A)GENERAL
(B)GENERAL TOWN-OUTSIDE VG
(CD)SPECIAL GRANT
(DB)HIGHWAY-PART-TOWN
(H)CAPITAL PROJECTS
(K)GENERAL FIXED ASSETS
(SF) FIRE PROTECTION
(SM)MISCELLANEOUS
(SP)PARK
(SR)REFUSE AND GARBAGE
(SS)SEWER
(TA)AGENCY
(W)GENERAL LONG-TERM DEBT
All amounts included in this update document for 2013 represent data filed by your government with
OSC as reviewed and adjusted where necessary.
***SUPPLEMENTAL SECTION ***
The Supplemental Section includes the following sections:
1) Statement of Indebtedness
2)Schedule of Time Deposits and Investments
3) Bank Reconciliation
4) Local Government Questionnaire
5)Schedule of Employee and Retiree Benefits
6)Schedule of Energy Costs and Consumption
7) Schedule of Other Post Employment Benefits (OPEB)
All numbers in this report will be rounded to the nearest dollar.
Page 2
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Balance Sheet
dde'Desc"ription.,. ..-
2013`, ;EdpCode 2014'..
Assets
Cash 12,118,325 A200 10,787,213
Cash In Time Deposits 4,100,695 A201 4,093,393
Petty Cash 618 A210 561
TOOTAL.Cash. _ 16;219,638:. 14;881,168)
Taxes Receivable,Current w 2,614 A250 417
T OTAL Taxes Receivable.(net) 2,614 417
Accounts Receivable 52,740 A380 108,120
TOTAL Other R®ceivables{net) 52,740 �� 108;120.
Due From State And Federal Government 470,783 A410 83,768
TOTAL,State And Fdderal'Aid Receivables - 4701,783 =T %,83J6
Due From Other Funds 370,255 A391 884,861
fOTAL`Due From"Otfier Funds "' 3`70,255 °884;861'
Due From Other Governments 1,042,747 A440 1,026,844
TOTAL.Due From-Other Governments,= � 1,042;7.47 _,, 1;026,844,i
Inventory Of Materials And Supplies 2,562 A445 2,230
1.
OTAL Inventories 2,562 ;2;230
Prepaid Expenses 940,805 A480 1,049,439
T,OTAL.Prepaid:Expenses _ 940;805 X1,049;439
TOTALAssets'and Deferred Outflows otResourcesu'� 19,102,145' 18;036;847
Page 3 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Balance Sheet
ode-Description ` 2013, 9 ::' dpCode- 2014
Accounts Payable 1,042,148 A600 1,432,182
ETOTAL Accounts'Fa able 1;O.A2;148 _ . . = 1,432,18
Due To Other Funds 3,318,512 A630 3,008,510
TOTAL.Due. o,'.OtherFunds_ 3;318,512 3,008;510
Due To Other Governments 20,644 A631 861
TOTAL Due.To`Other Govemrnents 20,544 _ 851
AL",Liapilities, ` 4,381
TQ? ,305a 4;441,5521
Deferred Inflows of Resources
Deferred Inflow of Resources 5,897,508 A691 5,015,873
TOTALaDeferred'Inflows of Resources5,897;508, 5;015;873
OTAL f)eferred Inflows of Resource 5,897;508 ,:5;0 95;8731
Fund Balance
Not in Spendable Form 943,367 A806 1,051,668
iTOTAL Nongpendabte Furid Balance 943;367. 1;05 6681
Insurance Reserve 1,327,758 A863 949,338
m 8
TOTOTALR'est�lcted`Fund Balance` 1,327;758' .949,338
Assigned Appropriated Fund Balance _ 2,775,000 A914 2,995,954
TOTAL Assigned:Fund<Balance. °-' 2,7.75;000. "2,995;954
Unassigned Fund Balance 3,777,206 A917 3,582,460
TOOT L Unassigned Furid Balance. p 3,777;208 3;582;46Q
jT L"Fund£Balddde. 77 8,823,332 8;579,421
TOTAL:Liabilities, ferred inflows.AndFund Balance 19;1,-02;145 18;0 fi
De
Page 4 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Results of Operation
,pd'e.Descdption;` :,. ..:': °; :` .: 20.13 EdpGode. .2014:
Revenues
Real Property Taxes 22,215,752 A1001 23,042,527
TOTAL.f2ea1 Property Taxes' ` • 22;215,752'4 23,042,527
Other Payments In Lieu of Taxes 32,727 A1081 34,435
Interest&Penalties On Real Prop Taxes 55,945 A1090 55,705
TOTAL Real•R`roperty Taz Items 88;672 ' �- =9040'
Non Prop Tax Dist By County 885,473 A1120 885,473
DOTAL Non"P..ropi rty;Tax Items•" 885,473 '885;473
Treasurer Fees 825 A1230 944
Clerk Fees 6,513 A1255 9,159
Other General Departmental Income 7,485 A1289 1,669
Police Fees 5,715 A1520 4,686
Other Public Safety Departmental Income 1,773 A1589 417
Charges-Programs For The Aging 186,008 A1972 204,712
Park And Recreational Charges 112,874 A2001 123,071
Special Recreational Facility Charges 6,175 A2025 120,543
Other Home&Community Services Income 44,245 A2189 41,595
NOTAL"Departmental,lncome ��� ��' t
371;612 °506,796
General Services,Inter Government 221,207 A2210 242,195
Programs For Aging,Other Govts 60,672 A2351 76,105
TOTAL'ante�governm"ental'Charges. �T'^'' _- 281,879 318,300
Interest And Earnings 44,738 A2401 38,701
Rental of Real Property 173,324 A2410 183,018
l3TAL'Use•of"Nloney°Arid=Property;;, 218,061. i - 221y720.
Bingo Licenses 705 A2540 618
Dog Licenses 8,173 A2544 7,432
Permits,Other 390,175 A2590 315,779
TOTAL Licenses And Permits 399;053' ";323,828
Fines And Forfeited Bad 206,738 A2610 168,148
Forfeitures of Deposits 2,275 A2620 825
OTAC F.ine's'And Forfeitures
:209;013 168;973,
Sales of Scrap&Excess Materials 8,267 A2650 5,009
Sales,Other 80 A2655 40
Sales of Real Property 15,555 A2660
Insurance Recoveries 306,787 A2680 143,784
TOTAL Sale of Property'And Compensation.For"Loss 330,688 �- 148;833
Reimbursement of Medicare Part D Exp 68,718 A2700 59,457
Refunds of Prior Year's Expenditures 6,396 A2701 35,115
Gifts And Donations 16,235 A2705 12,101
Employees Contributions 143,719 A2709 131,991
Unclassified(specify) 3,370 A2770 555
TOTAL Miscellaneous Local:Sotirces ' ' _ 238;437 239;219
St Aid,Mortgage Tax 1,142,523 A3005 1,218,596
St Aid-Other(specify) 145,775 A3089 54,723
St Aid,Youth Programs 19,467 A3820 20,500
TOTAL;State A�d. _ _ . � - 1;307;765. ' •" .1;293;819.
Page 5 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Results of Operation
ode--.DescTip#ion. k 201.3 EdpCoae '20:14
Revenues
Fed Aid Other Public Safety 9,226 A4389 19,247
Fed Aid,Transp Cap Proj A4597 43,921
Fed Aid,Programs For Aging 119,000 A4772 111,743
Fed Aid,Disaster Assistance 125,365 A4785 13,285
Fed Aid,Other Home&Community Cap 5,000 A4997 6,481
TOTAL Federal:Aidx `, ° ` H
EOTAe ev nR ues_ w� 26;804,996a����� 27;434;304
Interfund Transfers 4,262,410 A5031 4,229,705
�bTAL lnterfund-Transfers,,, 4;262;410 4;229,705
T�OTAL Other Sources 4,262,410 4,229;705
TOTAL Detail Revenues-And Other Sources 31;067;407 31,664,009
Page 6 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Results of Operation
ode,Description,` } x,2Q13 _ EdpCiide 2014
Expenditures
Legislative Board,Pers Sery 130,192 A10101 135,220
Legislative Board,Contr Expend 95,955 A10104 187,279
-_ .
TQT Legislative Board `•' �"' � 22fi,147v 322;499
Municipal Court,Pers Sery 443,830 A11101 408,103
Municipal Court,Equip&Cap Outlay 1,073 A11102 729
Municipal Court,Contr Expend 63,084 A11104 62,306
TOTAL.Municipal.Court. 507;987 471,13T
Supervisor,pers Sery 221,843 A12201 233,869
Supervisor,equip&Cap Outlay A12202 376
Supervisor,contr Expend 3,127 A12204 3,513
TOTAL Sugeniisoi _ 224,970 237;758
_ �..w. _ _ .s.. .� __.�. _
Dir of Finance,Pers Sery 403,803 A13101 418,678
Dir of Finance,Equip&Cap Outlay 95 A13102
Dir of Finance,Contr Expend 14,302 A13104 32,430
TOTALDi'rof"Finande 418;200 451408
Auditor,Contr Expend 95,750 A13204 130,950
OTAL Auditbr ° p'95,750 130;950
Tax Collection,pers Sery 98,869 A13301 98,527
Tax Collection,equip&Cap Outlay 130 A13302
Tax Collection,contr Expend 22,889 A13304 19,458
TTOTA Taz 6ollectiori
�_ 121,8t38 19.7;985
Assessment,Pers Sery 331,862 A13551 401,634
Assessment,Equip&Cap Outlay 2,321 A13552
Assessment,Contr Expend 28,656 A13554 21,098
TLb-AL;Assessme 77°° -362,840 422,732
Clerk,pers Sery 395,109 A14101 431,037
Clerk,equip&Cap Outlay A14102 290
Clerk,contr Expend 19,645 A14104 20,630
TOI " TAL clerk° _ A 414;7:54 451,957
Law,Pers Sery 364,251 A14201 382,066
Law,Equip&Cap Outlay A14202
Law,Contr Expend 42,512 A14204 51,719
i OT TAL Law, v _ '4 406;763 433 785
Engineer,Pers Sery 159,723 A14401 165,770
Engineer,Equip&Cap Outlay 537 A14402 340
Engineer,Contr Expend 4,418 A14404 8,200
TOTAL-Engineer' 1&4,678 174,311:
Records Mgmt,PerS.SerV. 80,886 A14601 79,382
Records Mgmt,Equip&Cap Outlay A14602 21,508
Records Mgmt,Contr Expend 3,711 A14604 1,456
�fOTAL Rec` Mdr so gmt° ���� a 4,598 102,346
Public Works Admin,Pers Sery 140,000 A14901 169,955
Public Works Admin,Contr Expend 430 A14904 325
�LOTAILPublic Wor
,ks-Admin ° " . K •° =° ;" -'1'40;430 -�1.7Q,279'
Buildings,Pers Sery 680,954 A16201 795,113
Buildings,Equip&Cap Outlay 29,123 A16202 73,989
Page 7 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Results of Operation
2014
odeQescription' ',= - :� `. �' _ = , `.. `•.. '2013x"` ;'E C .
Expenditures
Buildings,Contr Expend 481,741 A16204 473,324
,OTAL.;Buildings 1,191,817 1,342,426
Central Garage,Equip&Cap Outlay A16402
Central Garage,Contr Expend 16,706 A16404 23,477
TOTAL Central Garage, 16,706 23;477,
1�:..,. 6.tra -
Central Print&Mail,Equip&Cap Outlay 50,930 A16702 45,180
Central Print&Mail,contr Expend 32,528 A16704 35,686
TOTAL:Central Print&Mail 83,458, a• _80;865
Central Data Process,Pers Sery 195,913 A16801 205,874
Central Data Process&Cap Outlay 6,342 A16802 21,815
Central Data Process,Contr Expend 292,123 A16804 279,022
TOTAL^Central Data Process�� 49.4,378 _ 4 a 506,71'1
Unallocated Insurance,Contr Expend 359,518 A19104 361,974
TOTAL Unallocated Insurance 359,518 _ 361,974
Municipal Assn Dues,Contr Expend 1,650 A19204 1,650
T(OTAL funicipal"Assn Dues 1;650 ~ 1,650
Payment of Mta Payroll Tax,contr Expend 44,887 A19804 47,075
TOTAL Payment o!Mta.Payroll Tax ` 44,687 47,075
Other General Government,Pers Sery 97,541 A19891 100,999
Other Gen Govt Support,Equip&Cap Outlay 4,315 A19892 12,443
Other Gen Govt Support,Contr Expend 535 A19894 578
TQTAL'Other'.Gen Govt"Support Y 4 102,$91T �� � 114020
OT.4L Generaf Government'Support .` 5,463;810 5,965;043]
Public Safety Comm Sys,Pers Sery 828,907 A30201 861,535
Public Safety Comm Sys,Equip&Cap Outlay 93,155 A30202 63,186
Public Safety Comm Sys,Contr Expend 29,915 A30204 35,439
4. - --
TOTAL-Public Safety Comrrr Sys ., 951,9_77'T � 960;160
Police,Pers Sery 7,458,907 A31201 7,480,745
Police,Equip&Cap Outlay 227,761 A31202 252,032
Police,Contr Expend 429,308 A31204 426,273
DOTAL.Police; _ _ � 8,115,976 --'8159,050
Traffic Control,Equip&Cap Outlay A33102
Traffic Control,Contr Expen 11,545 A33104 12,328
TOTAL Traffic Control ` 11;545 12,328
Fire,Contr Expend w _ 77 A34104 77
TOTAL Fire - _
77, T 77
Control of Animals,Contr Expend 214,845 A35104 217,484
TOTAL Control of Ariinmals° 2'14,845� 217,484.1
Examining Boards,Pers Sery 7,668 A36101 6,567
Examining Boards,Contr Expend 6,377 A36104 6,608
TOTAL'Examining Boards 14;045 - ... �' - 13,174
Civil Defense,Contr Expend _ 478 A36404 _ 1,408
IOTA ILC ivy Defense 478 T 1',40
TOTAL Public Safety 9,308;943 9;363,682
Page 8 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Results of Operation
•ode`.Desi:iipfion - •; ""^ �201,3 _ ,EdpCode `_;` `2074-: •
Expenditures
Public Health,Contr Expend 300 A40104 300
(TQT L Public Health
Narcotic Gwd Council,Contr Expend 33,000 A42104 33,000
(ft7TALNarcotic Guid Counci m 33;000 T 33,000,
TOTAL Health
33,300-
Street
3,300 Street Admin,Pers Sery 300,366 A50101 311,832
IOTALStreetAdrnin ,,, 300;366 a 311y832
Street Lighting,Pers Sery 61,279 A51821 62,787
Street Lighting,Equip&Cap Outlay 432 A51822
Street Lighting,Contr Expend 122,188 A51824 113,815
OTAL.Street.Lighting �
° X183,899 176;602
L z _ _
Off-Street Parking,Contr Expend 11,447 A56504 492
TL QTAL Off-Street Parking 17;447 492
TOTAL Transportation: ~495;712 488,925'
Publicity,Contr Expend 30,000 A64104 40,000
36,90 .m
IOTA°L Rublicity � 30',000. - 40;000
Programs For Aging,Pers Sery 960,879 A67721 974,951
Programs For Aging,Equip&Cap Outlay 2,590 A67722 2,400
Programs For Aging,Contr Expend 237,757 A67724 262,479
TOTAL Program§FiirAging ;1-;201;227 1,239,830
TOTAL Economic;Assistance And Opportunityr 1,234,22T p 1;219,830
Recreation Admini,Pers Sery 80,461 A70201 _ 84,772
Recreation Admini,Equip&Cap Outlay A70202 489
Recreation Admini,Contr Expend 95,744 A70204 104,245
TOTALAecreation Admini,,; 176;206° 189;506°
Special Rec Facility,Pers Sery 90,176 A71801 77,569
Special Rec Facility,Contr Expend 5,401 A71804 6,365
LOTAL`°SpecialRee Facility • :95,577 83,933
Youth Prog,Contr Expend 1,627 A73104 2,496
�aTALYodth.Prog'° '" °1,627. 2;496:
Historian,Pers Sery 18,387 A75101 18,755
TOTAL Historian 18,387_. 18;755
Historical Property,Pers Sery 5,558 A75201 4,000
Historical Property,Contr Expend 267 A75204 17
TOTAL Historical'Pro .e 5,825 -r - - 4,017'.
p rty..
Celebrations,Contr Expend 851 A75504 1,000
LTOTALCelebrafions _ .� 851= 1;0001
TOTAL-Culture"And Recreation 298;472°m 299;708
Environmental Control,Pers Sery 190,418 A80901 191,614
Environmental Control,Equip&Cap Outlay A80902 310
Environmental Control,Contr Expend 21,740 A80904 42,778
j OTAL Environmental;Control 212;158 234;702
Shade Tree,Pers Sery 1,647 A85601 1,680
Shade Tree,Contr Expend 4,927 A85604 6,207
C OTAL' Shade Tree `6,573 7;887
Page 9 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Results of Operation
ade Description , - 2013 -`EdpGode 2014-
Expenditures
Conservation,Equip&Cap Outlay A87102 130
Conservation,Contr Expend 1,569 A87104 1,627
�OTAL Conservation. 1-569. 1,757
Fish And Game,Contr Expend 30,000 A87204 30,000
TOTAL,Fish And'Game 30,000 30,000+
Cemetery,Contr Expend 6 A88104 6
TOTAL Cemeteryy 6 6
Misc Home&Comm Serv,Pers Sery 153,138 A89891 80,294
Misc Home&Comm Serv,Equip&Cap Outlay A89892
Misc Home&Comm Serv,Contr Expend 289 A89894
TOTAL Misc Home&°Comm Serv, 153,427 T� 80,294
TT OTAL•HomeAnd'ConiniunityServices �° M 4D3,734� � 354;646
State Retirement System 1,417,146 A90108 1,311,397
Police&Firemen Retirement,Empl Bnfts 1,920,931 A90158 1,507,786
Social Security,Employer Cont 928,985 A90308 968,775
Worker's Compensation,Empl Bnfts 222,968 A90408 231,233
Unemployment Insurance,Empl Bnfts 23,651 A90508 17,266
Disability Insurance,Empl Bnfts 290,267 A90558 302,664
Hospital&Medical(dental)Ins,Empl Bnft 5,454,189 A90608 5,911,354
Other Employee Benefits(spec) 45,881 A90898 71,715
OTAL Employee Benefits _ 10,304,018 10,322,189
Debt Principal,Serial Bonds 503,400 A97106 513,400
Debt Principal,Bond Anticipation Notes 152,000 A97306 62,980
TOTAL Debt Principal, w 655,400- 576,380
Debt Interest,Serial Bonds 172,018 A97107 158,560
Debt Interest,Bond Anticipation Notes 1,430 A97307 643
TOTi AL Debflnteresf�;� ° �^ 173,449" 159,203
TOTAL`Expenditures 28,368,064 28,842,967
Transfers,Other Funds 2,707,553 A99019 3,064,993
2,707;553 . 3,064,993
TOTAL Operating Transfers _
OT� AL Other Uses _ 2,707;553 3,064;993
RTAL Detail Expenditures�And,Other Uses. ��� � 31,075,617 �� � -31,907,899
Page 10 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Analysis of Changes in Fund Balance
ode�Descri tion.`• °• - °r ' '• • <;2013; :..EdpCode.� _', °:�, 201,d..��
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 8,831,522 A8021 8,823,312
Restated Fund Balance-Beg of Year 8,831,522 A8022 8,823,312
ADD-REVENUES AND OTHER SOURCES 31,067,407 31,664,009
DEDUCT-EXPENDITURES AND OTHER USES 31,075,617 31,907,899
Fund Balance-End of Year 8,823,312 A8029 8,579,421
Page 11 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Budget Summary
ode'Description � , '2014 ' EdpCode 2015"
Estimated Revenues
Est Rev-Real Property Taxes 23,042,527 A1049N 23,191,122
Est Rev-Real Property Tax Items 88,000 Al 099N 90,000
Est Rev-Non Property Tax Items 885,473 A1199N 1,019,873
Est Rev-Departmental Income 356,600 A1299N 368,900
Est Rev-Intergovernmental Charges 467,569 A2399N 497,577
Est Rev-Use of Money And Property 256,000 A2499N 236,000
Est Rev-Licenses And Permits 318,720 A2599N 276,535
Est Rev-Fines And Forfeitures 185,500 A2649N 185,500
Est Rev-Sale of Prop And Comp For Loss 144,625 A2699N 81,000
Est Rev-Miscellaneous Local Sources 158,665 A2799N 32,175
Est Rev-State Aid 1,112,500 A3099N 1,120,500
Est Rev-Federal Aid 7,500 A4099N 12,500
TOTAL Estimated Revenues27;023,679
27,111,682
Estimated-Interfund Transfer 4,283,381 A5031 N -63,000
Appropriated Fund Balance 2,775,000 A599N 3,505,000
TOTAL:Estimated,Other Sources _ J 7,058,381 3;442,000
TOTAL Estimated Revenues-And Other Sources 34,082,060 _ 30,553,682
Page 12 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(A)GENERAL
Budget Summary
ode•Descriptiona a "2014;. `EdpCotle: F L
Appropriations
App-General Government Support 7,317,950 A1999N 6,843,135
App-Public Safety 9,925,069 A3999N 10,325,845
App-Health 34,800 A4999N 34,800
App-Transportation 514,748 A5999N 529,900
App-Economic Assistance And Opportunity 1,359,350 A6999N 1,500,610
App-Culture And Recreation 327,210 A7999N 324,510
App-Home And Community Services 385,841 A8999N 399,943
App-Employee Benefits 10,426,324 A9199N 9,095,732
App-Debt Service 796,400 A9899N 858,700
7QTAL App"ropriatioris';` • ' 39,087,fi92"• - - .:-29;913;175".'
App-Interfund Transfer 2,994,368 A9999N 640,507
t�UTAUOtheir"Uses 2;994;368. "
— w —, ---=— - --= ., --y
OST-TAL Appropriations And Other Uses 34;082,060 . 30,553;682
Page 13 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(B)GENERAL TOWN-OUTSIDE VG
Balance Sheet
201'3.:
Assets
Cash In Time Deposits 813,901 B201 1,011,311
TOTAL Cash „ �^ w mm 813,901 1,011,311
Accounts Receivable 146,541 B380 156,019
TOTAL Other Receivables 14%641 1'56,019
Due From State And Federal Government 15,669 B410 62,863
TOTAL State.And Federal Aid Receivables 15,669 62;863-
Due From Other Funds 237,575 B391� 154,823
TOTAL Due From Other Funds237,575, 15 8
Prepaid Expenses 46,908 B480 71,735
OTAC,Prepaid Expenses' ~Y� .46,908 71,735
TOTAL Assets arid Defeired Outflow`s of Resources" 1,260,593. 1;456;752
Page 14 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(B)GENERAL TOWN-OUTSIDE VG
Balance Sheet
od'eDescriptiori.`':._ .. -. - _ `2013 Ecl `Gotle. ."-201'4
Accounts Payable 9,981 B600 18,338
TOTAL=Accounfs:Ra"able`" "' 9,981. _ 18;338
Due To Other Funds B630
i OTAL Due'To_Other Funds
TOTAL Liabilities - ,._ .. •• -.-�--�-``
9,981 .18;3381
Deferred Inflows of Resources
Deferred Inflow of Resources 231,174 8691 100,379
.
tTOTAL""'Deferred'Inflouvs of Resources_ 231;17 4. 400,37,9.
TOTAL Deferred Inflows of-Rdsources` 231;174 d 100,7
Fund Balance
Not in Spendable Form 46,908 8806 71,735
TOTAL Nonspehd"able Fuse Balance
Assigned Appropriated Fund Balance 200,000 B914 570,400
Assigned Unappropriated Fund Balance 772,531 B915 695,900
TI oTAL Assigned Fund.Balance 972,531< __ - 9,266,300
`rOi TAL Fund Balance 'Wr. - 1,019;439.. 1;338;0361
TOTALLiabiiities,'Deferred-inflows Anif'06nd'balance ".11,160,593-
Page
1;260,593 Page 15 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(B)GENERAL TOWN-OUTSIDE VG
Results of Operation
ode Descfiption `2013 `§r EdpCo ie' 2044,
Revenues
Real Property Taxes 864,689 B1001 669,307
IT AL R6 _'0roperty Taxes, 864;689` 669;307
Other Payments In Lieu ofTaxe& 1,342 B1081 1,053
Interest&Penalties On Real Prop Taxes 17 B1090 15
IOTA Real°Property�Taz Items;- ° ° t 1,358 "- �1;069
Franchises 568,005 B1170 612,931
TOTAL,Non.Property.Tax Items ..° 7--s,". ` ° 568,005 6/2,931
Other General Departmental Income 8,460 B1289 8,550
Safety Inspection Fees 530,612 81560 567,705
Public Health Fees 14,496 B1601 17,254
Zoning Fees 79,750 B2110 107,000
Planning Board Fees 47,700 B2115 131,999
TOTAL Departmental<Income '681,019 832,50,7
Interest And Earnings 3,496 B2401 3,013
OTAL Use of MoneTAnd'Property 3,496„ F ',. - '3;013.
Permits,Other 10,700 B2590 10,850
TOTAL Licerises And-Permits, 10;700 10;850
St Aid,State Revenue Sharing 88,328 B3001 88,328
St Aid,Planning Studies 15,669 B3902 60,551
TOTAL:State Aid 103;997., 148,879
DOTAL Revenues 2;233;264 2;278,556
OTT AL Detail Revenues And UtHer Sources.. ,2,233,264' 2278,556
Page 16 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(B)GENERAL TOWN-OUTSIDE VG
Results of Operation
ode Descri`tion: 2013 EdpCodea,�. -2014
Expenditures
Law,Contr Expend 15,299 B14204 22,975
TAIL Law 22,975
Payment of Mta Payroll Tax,Contr Expend 3,886 B19804 4,040
TOTAL Payment of Mta Payroll fax. 3;886: 4,040.,
OTAL General+Governroen`t Support µ � 1 _. _r �-N ..19,185 i q^27;09"5j
Safety Inspection,Pers Sery 4961,112 B36201 535,809
Safety Inspection,Equip&Cap Outlay 361 B36202
Safety Inspection,Contr Expend 14,674 B36204 13,769
TOTAL Safety,lnspection' X511147 I549,578j
Misc Public Safety,Pers Sery 561 B39891 570
TOTAL Mlsc.Public'Safety .561 570-
TOTAL'Public Safety 511;708 550,148
Zoning,Pers Sery 151,131 B80101 157,837
Zoning,Equip&Cap Outlay 200 B80102
Zoning,Contr Expend 14,499 B80104 13,716
53
TOTAI.Zoning 165,829 171;5 ,,
Planning,Pers Sery 487,218 B80201 500,011
Planning,Equip&Cap Outlay B80202 385
Planning,Contr Expend 37,034 B80204 44,193
L OTAL Planning- 524,252 ^
TOTAL Home And CommunityrServices' 690,081 '716;143
State Retirement,Empl Bnfts 188,799 B90108 176,910
Social Security,Empl Bnfts 87,233 B90308 90,778
Worker's Compensation,Empl Bnfts 11,300 B90408 11,719
Unemployment Insurance,Empl Bnfts 1,594 B90508
Disability Insurance,Empl Bnfts 27,917 B90558 28,793
Other Employee Benefits(spec) 18,352 B90898 6,147
TI OTAL Einployee•Senefits 335,196: 314;3474
OTA^ L,Expenditures 1,556170 1';607,653
Transfers,Other Funds 363,004 B99019 352,306
TOTAL Operating'Transfers 363,004 352 306
T,OTAL Other Uses 363,004 .° 352,306
.. - -
TOTAL Detail Ex end Other Uses 1,919,175 1,959,9b0
Page 17 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(B)GENERAL TOWN-OUTSIDE VG
Analysis of Changes in Fund Balance
Pode'Descriptiom - 2013 EdpGade 2014,_
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 705,349 B8021 1,019,439
Restated Fund Balance-Beg of Year 705,349 B8022 1,019,439
ADD-REVENUES AND OTHER SOURCES 2,233,264 2,278,556
DEDUCT-EXPENDITURES AND OTHER USES 1,919,175 1,959,959
Fund Balance-End of Year 1,019,439 B8029 1,338,036
Page 18 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(B)GENERAL TOWN-OUTSIDE VG
Budget Summary
ode Description 2014,. EdpCode. "2015'
Estimated Revenues
Est Rev-Real Property Taxes 669,307 B1049N 292,716
Est Rev-Real Property Tax Items 1,390 B1099N 1,020
Est Rev-Non Property Tax Items 525,000 B1199N 565,000
Est Rev-Departmental Income 647,150 B1299N 670,150
Est Rev-Use of Money And Property 2,500 B2499N 2,500
Est Rev-Licenses And Permits 11,200 B2599N 11,200
Est Rev-State Aid 115,000 B3099N 88,000
TEOTAL Estimated Revenues 1,9711547 ° 1,630,586 I
Appropriated Fund Balance 200,000 B599N 570,000
NOTAL Estiinated.Other Sources '200,000 570,000
TOTAL Estimated.Revenues-And Other Sources• � 2.1
71,547 ��J 2',200,586 �J
Page 19 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(B)GENERAL TOWN-OUTSIDE VG
Budget Summary
ode.Description ;. 2014` EdpGode 2015,
Appropriations
App-General Government Support 105,300 B1999N 85,500
App-Public Safety 602,370 B3999N 631,970
App-Home And Community Services 801,264 B8999N 794,064
App-Employee Benefits 368,950 B9199N 725,472
2,237,006 . a
#TOTAL Appeopriations _ 1,877,884
App-Interfund Transfer 293,663 B9999N -36,420
TOTAL Other Uses_ 293,663 -36,420
TOTAL Appropriatioris And Other Uses �' 2,171,547 Z20.586�,
Page 20 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(CD)SPECIAL GRANT
Balance Sheet
ode:Descript'ion °2013` dpCode. ;2Q14' --
Assets
Due From State And Federal Government CD410 43,145
TOTAL State And Federal Aid-Recelvable§ 4 43,145;
Due From Other Funds 16,150 CD391
FOTAL Due,From Other Funds 16;150 0
TOTAL Assets anil<Deferred.0utflows`of°Resources • 16,'50. "43,145
Page 21 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(CD)SPECIAL GRANT
Balance Sheet
ode De'ri tion. 201"3' EdpCode. 2014
Accounts Payable 16,150 CD600 35,145
TOTALAccounts Payable ,150
� �w_ �_�. _ »° 16 _
Due To Other Funds CD630 8,000
TOTAL Due To Other Funds
O AL Liabilities � � W16,1W 43,145
Fund Balance
Other Restricted Fund Balance CD899
�T-O—TA—L—Restricted Fund Balance .
TOTS AL Fund Balance 0
TOTAL Liabilities,Deferred Inflows And Fund Balance � � 16,150 43,145{
Page 22 OSC Municipality Code 470379000000
TOWN OF Southold
,Annual Update Document
For the Fiscal Year Ending 2014
(CD)SPECIAL GRANT
Results of Operation
odeDescnption, 2013'
Revenues
Refunds of Prior Year's Expenditures CD2701
DOTAL`Miscellari'eous Local Sou�cgs Y 0 6
Fed Aid,Community Development Act 28,435 CD4910 140,593
O-,TAL Federal Aid " 28,435 140;593
TOTAL Revenues 28,435 140;593
TOTAL'Detai!Revenues And Other§ounces 28,435" 140;593"
Page 23 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(CD)SPECIAL GRANT
Results of Operation
ode Description,', 20!3 E#Code: 201'4
Expenditures
Prov of Public Service,Contr Expen 29,087 CD86764 140,593
TOI TAL-Prov of.Public Ler,ice _ 29,087 140,593
TOTAL Home And Community Services.� 29,087 140,593
T OTAL Expenditures `_� 29;087^ - 140,593
TOTAL.Detail Expenditures.And Other Uses 29,087 A 14Q593
Page 24 OSC Municipality Code 470379000000
TOWN OF Southold
Annual,Update Document
For the Fiscal Year Ending 2014
(CD)SPECIAL GRANT
Analysis of Changes in Fund Balance
ode:Description, ;2013 `:EdpGode,r 2014:',4
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 652 CD8021
Restated Fund Balance-Beg of Year 652 CD8022
ADD-REVENUES AND OTHER SOURCES 28,435 140,593
DEDUCT-EXPENDITURES AND OTHER USES 29,087 140,593
Fund Balance-End of Year CD8029
Page 25 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(DB)HIGHWAY-PART-TOWN
Balance Sheet
ode Descriptiori•. = _. `,`- .2013, -,s. '.EdpGade 2014fl
Assets
Cash In Time Deposits 1,261,004 DB201 667,341
TOTAL Cash, 1;264,004
Accounts Receivable DB380 253
TOTAL"Qther`Receivables(net) a` • �-. - - 0° • '_ ' - 233
Due From State And Federal Government 29,766 DB410 260,034
TOTAL State AndaFedelal Aid Receivables 29j66-,' 261);034°
Due From Other Funds 1,298,810 DB391 1,063,265
TOTAL Que,From Other Funds _ 1;298;810 _ 1;063,265.
Prepaid Expenses 104,291 DB480 165,309
OTAL hTepaid Expenses 104;291. 165,369
TOTAL Asset"s and Deferred'Outflows,of Resources, 2;693,874 ` ' 2;156,203
Page 26 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(DB)HIGHWAY-PART-TOWN
Balance Sheet
ode�Desc�tion . ; ...:„ ..�,➢ �,.,, c ,_ ° . . _ .. .. 4 .. . . .. . . o 'K. EcJpC 3.c..20
Accounts Payable 159,468 DB600 80,001
TO fAL Aecounts•Rayab elel `_ _ _ �� _ 159,468,,, 80,001
Due To Other Funds 34,427 DB630 31,735
TOTAL Due To Otfier Furidsu 34;427'., 31,735
Due To Other Governments 62,256 DB631 160
TOTAL Due To.Other Governriients 62;256' 160,
TOTAL Liabilities ` � �. -• , _ �� `, 256;951� ° �. -, 111,896
Deferred Inflows of Resources
Deferred Inflow of Resources 1,213,781 DB691 1,001,177
TOTAL Deferred Inflovirs`of,Resou'rces: .y- 'y" _ u 1;213,781.',: w'' 1;001;177
_... ;
OTAL Deferred Inflows of-Resources .1,213,781-
Fund
,213;781 Fund Balance
Not in Spendable Form 104,291 DB806 165,309
�TOI TAL Nonspendable.F4hd Balance
Assigned Appropriated Fund Balance 500,650 D6914 528,541
Assigned Unappropriated Fund Balance 618,999 DB915 349,279
TOTALA'ssigned'Fu11- 877 28 0
�l OTAL Fund Balance 1,2
:.-�. __,.,_,,----•-_—_ _.. .-v. . . 23;939 �_r.._..._._.,- 1;04313�Q
TOTAL Cia6ilities,Deferred,,lnflovirs And'Funii'Balance:"' 2,693',871 ` ` 2,156,2
Page 27 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(DB)HIGHWAY-PART-TOWN
Results of Operation
odeDescription-; `� ° �:;_ z,• _ ,=': �:. ". . �' ' ° , EdpC
.2013-� ode, ,:2014
Revenues
Real Property Taxes 4,935,817 DB1001 4,719,206
OTACkiaal P`rope"rfy;razes` 4;935;817 4,719;206"
Other Payments In Lieu of Taxes 7,653 DB1081 7,423
Interest&Penalties On Real Prop Taxes 96 DB1090 109
TOT ,L-Real"Propertyi Tax,items 7;749: ;7;532
Misc Revenue From Other Govt 20,240 DB2389
� TAL,tr terrgovernmental Charges ° 20,240 ��
Interest And Earnings 9,778 DB2401 7,927
TOTAL'Use of"Money And"property=i `9,778 7,927
Permits,Other 17,808 DB2590 20,821
TL,OTAL"Licenses And P-ermits,
Sales of Scrap&Excess Materials 5,621 DB2650 32,127
Insurance Recoveries DB2680 1,054
TOTAL Sale ofProperty And,Compensation For Loss. `"5;621"• 33,181
Refunds of Prior Year's Expenditures -5 DB2701
l OTAL,Miscellaneous.Local Sources -S:M 0
St Aid,Consolidated Highway Aid _ 422,755 DB3501 389,982
St Aid Emergency Disaster Assistance 123 DB3960 1,223
TLOTAL'StateiAid - 422,878 '391,204
Fed Aid,Emergency Disaster Assistance 176,046 DB4960 12,735
TOTAL Federal:Aid- 125,046 W 9 12,736
TOTAL k6e 6n6es 5,595;982. - 5,.192;607
Interfund Transfers 95,000 DB5031 23,754
TOTAL lnterfund Transfers 95,000 4" ' 23,754
TOTAL€Other Sources r 95,000• 23,754
TOTAL Detail Revenues And Other`Sources 5,690;932 5;216;361,
Page 28 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(DB)HIGHWAY-PART-TOWN
Results of Operation
O
odg;DescriptiQn. 201'3` EdpGode;.. 014 a .'
Expenditures
Administration-Contractual 30 DB17104 62
TOTAL AdmiriistrationZoi ntractual
Payment of Mta Payroll Tax,Contr Expend 6,800 DB19804 7,153
ITAL,P.ayment of Mtaof ;Payroll Tax fi;800. .' 7,153
.. _
TOTAL' General Government'Support d:: 6;831 7,215
Y
Maint of Streets,Pers Sery 1,462,753 DB51101 1,478,199
Maint of Streets,Contr Expend 485,870 DB51104 484,823
TAL••Maint of Streets_ 1;948
f DO ;622" 1,963,021`
Perm Improve Highway,Equip&Cap Outlay 422,755 DB51122 389,982
TOT Perm, mP I p'rove.Highway,- 422,755 389;982;
Maint of Bridges,Contr Expend 87, 77 ,500 DB51204
TOTAL Maint"of Bridges 8;500' 0
Machinery,Pers Sery 283,607 DB51301 341,300
Machinery,Equip&Cap Outlay DB51302 106,966
Machinery,Contr Expend 167,705 DB51304 167,021
OTi4L Machinery, 451,312 615;288'
Brush And Weeds,Pers Sery 118,180 DB51401 94,487
Brush And Weeds,Equip&Cap Outlay 200 DB51402 694
Brush And Weeds,Contr Expend 106,191 DB51404 69,857
TOI 7A Brus Ado Weeds �� 224,570- 165,037
Snow Removal,Pers Sery 174,349 DB51421 183,111
Snow Removal,Equip&Cap Outlay DB51422 808
Snow Removal,Contr Expend 169,382 DB51424 220,122
TOTAL,SnowtReritova l 343,731 404;041
OTA
L Transportation ° 3;399,491 3,537;370
State Retirement,Empi Bnfts 470,126 DB90108 414,303
Social Security,Empi Bnfts 153,805 DB90308 158,374
Worker's Compensation,Empi Bnfts 149,672 DB90408 155,220
Disability Insurance,Empl Bnfts 59,060 DB90558 61,688
OTA4 Employee.Benefits`_ 832;662 789,586
Debt Principal,Serial Bonds 70,000 DB97106 70,000
Debt Principal,Bond Anticipation Notes 74,000 DB97306 53,000
TOTAL Debt-Principal, _ ;; 144;000 123;000
Debt Interest,Serial Bonds 24,976 DB97107 23,713
Debt Interest,Bond Anticipation Notes 1,305 DB97307 861
LTOTAL Debt Interest; 26,281 - ' ' 24,573.
TOTAL Expenditures 4,409;265 4 481,744
Page 29 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(DB)HIGHWAY-PART-TOWN
Results of Operation
ode,Description. .._ 2013`' _EdpCode;` ^`2014"
Other Uses
Transfers,Other Funds 1,221,202 DB99019 915,397
TOI ,TAL;Operating Transfers a 1',221;202 " X915;397
OTAL 04her Uses._ 1';221;202 4915,397
TOTAL D''dtail:Exp6nditur'es.,Aid,dtho-fuse"s s 5,630,46T 5;397,141
Page 30 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(DB)HIGHWAY-PART-TOWN
Analysis of Changes in Fund Balance
ode Description 2013:... EdpCode,•, 2014'°
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 1,163,445 DB8021 1,223,909
Restated Fund Balance-Beg of Year 1,163,445 DB8022 1,223,909
ADD-REVENUES AND OTHER SOURCES 5,690,932 5,216,361
DEDUCT-EXPENDITURES AND OTHER USES 5,630,467 5,397,141
Fund Balance-End of Year 1,223,909 DB8029 1,043,134
Page 31 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(DB)HIGHWAY-PART-TOWN
Budget Summary
ode:Descri tion• ;g 2014• EdpCode" ''3`,201'5 "
Estimated Revenues
Est Rev-Real Property Taxes 4,719,206 DB1049N 4,641,266
Est Rev-Real Property Tax Items 7,700 DB1099N 7,700
Est Rev-Use of Money And Property 9,500 DB2499N 9,500
Est Rev-Licenses And Permits 10,000 DB2599N 10,000 _
Est Rev-Sale of Prop And Comp For Loss 2,000 DB2699N 1,500
Est Rev-State Aid 421,100 DB3099N 420,619
TOTAL Estimated•Reveriue'_s. .. `, 5;,169;506 . g 7 5,090,585-
Appropriated Fund Balance 500,650 D6599N 460,640
�QTAL Estimated Other Sources_' 500,650 460;640 . i
OTAL Estimated"Revenues AridmOther Sources �^� " 5,ti70;:156 �- 5,551;225 .'�
Page 32 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(DB)HIGHWAY-PART-TOWN
Budget Summary
Gode Desctip#iori
V" 20141... ' EdpCode', 20.15`
Appropriations
App-Transportation 3,565,650 DB5999N 3,659,637
App-Employee Benefits 889,500 DB9199N 1,829,000
App-Debt Service 148,020 DB9899N 225,790
1 OTAL,Appropriations
Interfund Transfers 1,066,986 DB9999N -163,202
[TOTAL Other Uses '1,066,988 '=163,202`
T TAL Appropriations Anc[other Uses M 5;670,456` 5,551;225''
Page 33 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(H)CAPITAL PROJECTS
Balance Sheet
od6Desdription- -2013. EdpCode `2014
Assets
Cash In Time Deposits 10,144,144 H2O1 12,693,142
TOTAr�T L Cash . 10;1.44,144 12;693,142.
Accounts Receivable 37,473 H380 42,160
TOTALOther,Receivables(net) w 37,473 42,160
Due From State And Federal Government 295,362 H410 561,058
TAL State And.Federal Aid Receivables yry 295,362 ° 561,058
TO
Due From Other Funds 331,147 H391 355,262
T OTAL Due From Other Funds • F° 331,147 355,262
Due From Other Governments 758,601 H440 572,654
l OTAL Due-from Other'Governments 758;601 572;654
TOTAL Assets arid,Deferred Outflows-df Resources 11,566,727 14,224,276
Page 34 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(H)CAPITAL PROJECTS
Balance Sheet
odebescriptiorr, ' _ ` . ,2013- 'Ei3pCode. �?201"4.M ,. ,
Accounts Payable 275,379 H600 491,718
TOTAL_Accounts Payable 275,379491;718
Retained Percentages-Contracts Payable H605
TOTAL Retairied'Percentages 01. 0,
Bond Anticipation Notes Payable 1,523,000 H626 2,959,000
TOTAI:'Notes Pa able. r.. 1,523,000 . 2,959;000
Due To Other Funds 161,590 H630 587,828
TOTAL'Due io Other Funds'° 161590," 587,82
TOTAL Liabilities" - - - 8,9
•
��1 5
4,03 8',5461
y
Deferred Inflows of Resources
Deferred Inflow of Resources H691
TOTAL Deferred'Inflows,.of Respurces'.
0
TAL Deferred Inflows of Resources ' 0 _ 0
Fund Balance
Assigned Appropriated Fund Balance 1,810,832 H914 8,518,169
Assigned Unappropriated Fund Balance 7,795,927 H915 1,667,561
OTAL_Assigned.Fund-Balance X9,606,758' 10,-185,7_
T AL Pund;Balan¢e _ - 9;606;758'= 100
_ -F
�T-OT—ALLiLiabilities;Deferred Inflows°And Fund-Balance 11,566,727 14,224,7
t
Page 35 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(H)CAPITAL PROJECTS
Results of Operation
ode Description--
Revenues
escription Revenues
Misc Revenue,Other Govts 5,062,511 H2389 6,050,757
NOTAL Intergovernmental Charges J y� F^ f 5,062,511 6,050;757
Interest And Earnings 18,037 H2401 20,389
TOTAL`Use.ofMoney,•And Property _ _ ��J �y 18,037 _ 26,3891
Refunds of Prior Year's Expenditures 55 H2701
TOTP.L Miscellaneous'Local Sources. 55 0
St Aid-Other Home And Community Service 678,225 H3989 134,410
TOTAL State Aid . 678,225 134,410
Fed Aid-Cap Projects 953,591 H4097 2,491,750
Fed Aid,Emergency Disaster Assistance H4960 110,496
Fed Aid,Other Home&Community Cap H4997 1,652,332
TOTAL Federal Aid M u_ 953,591 _ 4,2541,i78
TOTAL Revenues 6,712,419 10,460,134
Interfund Transfers 610,694 H5031 369,288
TOTAL lnterfund Transfers 610,694 369,288
Bans Redeemed From Appropriations 451,000 H5731 326,395•
TOTAL Proceeds of Obligations451,000° 326,3951
TOTAL Other Sources ° �u _ i 1,061,694 ��� 695,683
TOTAL DetaihRevenues And Other Sources 7,774,112 11;155,817
Page 36 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(H)CAPITAL PROJECTS
Results of Operation
ode:Description.: ..,. ;,` g:. �•,•; ..., .•• � �� `. • �;;�" -� -• ".20.13:.. : .x" ,EdpCode,_�. .2014'--
Expenditures
General Govt,Equip&Cap Outlay 158,605' H19972 517,312
TOTAL'General Govt 158,605 , 51.7,312
TOTAL General,Government Support: 158;605; 517;3.12:
Public Safety Cap Proi 185,753 H30972 21,354
Ii OVAL Public=Safety.Cap Proj -185,753'
OTS TAL Public'Safety 185,753.° 21;354
Perm Improve Highway,Equip&Cap Outlay 827,712 H51122 768,948
TT L'Perimlmprove Highway _ .827,712» 768,948
TOTAL Transportation 827 712. 768,94
x
Economic Dev,Equip&Cap Outlay 26,227 H64972 29,111
TOT LA Economic°Dev 26;227 ` .29,111.
TOTAL Ecoriomic;Assistance And Opportunity' • " "" T 26,227 =.29,111.
Sanitation,Equip&Cap Outlay H87972
TOTAL Sanitation r 0
Misc Home&Comm Serv,Equip&Cap Outlay 3,986,448 H89892 6,890,101
f1 OTAL.Misc Home_&Eomm Serv, ., 3;986;448.` "" 6;890;10
OTAL Home AndCommunity.Services 3;986,448 6;890,1'01
__
'Debt Principal,Serial Bonds 1,282,300 H97106 1,297,300
TOTAL Debt Principal"" 1,282;30 - 1;297;300
Debt Interest,Serial Bonds 1,095,689 H97107 1,052,202
Debt Interest,Bond Anticipation Notes 198 H97307 518
LOTmTAL Debf iriferest` {-1;095;887 m 1,052,720
T�OTAL`Expeiidituresv®, - Po_ 7;562,932�A� TR1.0;576;846
Transfers,Other Funds 70,000 H99019
TOTAL Operating Transfers - 70;000' 0
TOTAL Qthec"Uses 70;000'
TOTAL Detail Expenditures An&Other,Uses 4 77;632;932 10;576,846,
Page 37 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(H)CAPITAL PROJECTS
Analysis of Changes in Fund Balance
Code DescPiption' 201.3. EdpCode 2014"
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 9,465,578 H8021 9,606,758
Restated Fund Balance-Beg of Year 9,465,578 H8022 9,606,758
ADD-REVENUES AND OTHER SOURCES 7,774,112 11,155,817
DEDUCT-EXPENDITURES AND OTHER USES 7,632,932 10,576,846
Fund Balance-End of Year 9,606,758 H8029 10,185,730
Page 38 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(K)GENERAL FIXED ASSETS
Balance Sheet
od`e:Description = .2013- EdpCode.:`. 2014
Assets
Land 121,779,907 K101 126,707,115
Buildings 27,379,556 K102 27,415,581
Improvements Other Than Buildings 18,301,529 K103 18,310,844
Machinery And Equipment 16,114,398 K104 16,107,133
Construction Work In Progress 53,345 K105 5,179,739
Infrastructure 80,822,620 K106 81,685,789
R _
--7777�
OTAL'Fixed Assets=(net) , �, 264,451,355 275406
, ;202
[ OTAL Assets and 6ferrel Outflows of Resources 264;451,355 275;406,202
Page 39 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(K)GENERAL FIXED ASSETS
Balance Sheet
6de0eiscription 2013 EdpCode ' , -'2014
Liabilities,Deferred Inflows And Fund Balance
Total Non-Current Govt Assets 264,451,355 K159 275,406,202
TOTAL:Investinents inVon-CurrenMoverrimentAssets '264,451,355275,406,202
TOTAL Fund Balance 264,45,1,355 °� _275,406,202
TOTAL _ 264;451,355 r' 275;406,202
Page 40 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SF)FIRE PROTECTION
Balance Sheet
2013 EdpCode; ,, '2014.,,
Assets
Cash in Time Deposits 27,942 SF201 26,950
QTAL•Cash- _ ' _ '27,942 26;950,
Accounts Receivable SF380 1
TOTAL Other.Receivables(riet) 0,-
•
Due From Other Funds 196,924 SF391 164,519
'61ALCI)ueFrom-OtlierFunds __ .:a 196,924. 164,519.
TOTAL Assets and Deferred Outflows,of Resources 224,866 191,470
Page 41 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SF)FIRE PROTECTION
Balance Sheet
ode.Descrip#ion_': 2013 a'EdpGode 201:4'_.
Accounts Payable 13,136 SF600 13,136
TOTALAccounts'Payatile. 13;136 _.13;136
TI OTAL;Liabilities Y 13,136 13;136
Deferred Inflows of Resources
Deferred Inflow of Resources 196,924 SF691 164,519
TOTAL°Deferred Inflows"of Resource`s :196;924;- 16.4,5"19
OTAL"Deferredatiflows of Resources. " _ -"196;924. ° - T ° 164;519
Fund Balance
Assigned Appropriated Fund Balance 6,800 SF914 6,800
Assigned Unappropriated Fund Balance 8,005 SF915 7,015
TOTAL Assigned Fund Balance "` _ 74,805_ mm 113,8_15
TOTAL Fund Balance�� • _���-w ° 14;805 ' �~�^,,._�_ :13;815
�_�.d.�.�. .�.. .�..� .�..�• mow:=�.� .:.� � -�--_ _ ,
'�'��' 224866��� 191470
TOTAL Liatiil�ties,Deferred Inflows And Fund Balance. •, _ ° ' +,
Page 42 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SF)FIRE PROTECTION
Results of Operation
otle.Description.." 2013 - EdpCode. ; 2014:'
Revenues
Real Property Taxes 731,853 SF1001 771,184
TOTAL Real,PropertyTaXes 731;853 _ 771;184'
Interest&Penalties On Real Prop Taxes 14 SF1090 18
TOTAL-Real,.Property Takifer" 14 11 18
Interest And Earnings 589 SF2401 475
1 OTA -use gwohey And'Property:°u:e 5,89 475
TOTAL'Revenue-+^-s" 732,456 771,677
TOTAL,Detait_Revenues And-Other Sources T 732,456 771,677
Page 43 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SF)FIRE PROTECTION
Results of Operation
ode Descnptiori - ` - -2013°., �,EdpGode�' 2014.
Expenditures
Fire Protection,Contr Expend 733,526 SF34104 772,657
TOi TAL<Fire°Protection 733,526; 772;657;
70TAL,ftblicSafety 733,526` 772,6 7
Interfund Loans 4 SF97957 10
Jr,TAL`Debt Interest 4 10
TAL Expenditures 733,529" 772,667
DOTAL DetailEzpenilitures And:.Other U s 733,529 772;667'
Page 44 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SF)FIRE PROTECTION
Analysis of Changes in Fund Balance
Analysis of of Changes in Fund Balance
Fund Balance-Beginning of Year 15,879 SF8021 14,805
Restated Fund Balance-Beg of Year 15,879 SF8022 14,805
ADD-REVENUES AND OTHER SOURCES 732,456 771,677
DEDUCT-EXPENDITURES AND OTHER USES 733,529 772,667
Fund Balance-End of Year 14,805 SF8029 13,815
Page 45 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SM)MISCELLANEOUS
Balance Sheet
Cbde;Descri p-tion: 2013, EdpGode,, `20,14
_
Assets
Cash 741,348 SM200 1,059,663
Cash In Time Deposits 157,977 SM201 82,492
Petty Cash 1,535 SM210 1,535
TOTAL Cash.,'" 1 900;860- 1;143;691
Accounts Receivable 40,707 SM380 42,278
Allowance For Receivables(Credit) -4,600 SM389 -4,600
TOTAL Othei.;Receivables-(net)
•
Due From State And Federal Government _ 34,294 SM410 11,355
[TO TAL' State And Federal Aid;Receiva6les 3.4,294 11,$55
Due From Other Funds 219,004 SM391 188,173
kOYAL Duie:Erom Other Eurids .219;004 ;188',173
Prepaid Expenses 46,891 SM480 61,132
TQYAL,Prepaid Expense's 46,891 61,1;32
TOTALAssets,and Defe�red'Outflows of Resources 1,237,155 1,442,029
Page 46 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SM)MISCELLANEOUS
Balance Sheet
odeD`esc�iption 2013,.. ry :. dpGode:a 2014.
Accounts Payable s 217,619 SM600 306,284
TOTAL Accounts Payable . _ . ' - ,. "217,6,19
Other Liabilities 9,416 SM688 9,102
TOTAL Other Lia[iilities
-9;416,,, 9,10
Due To Other Funds 585 SM630
OTAL Due To.Other.Funds 585. 0
Due To Other Governments SM631 539
TOTAL Due To Other Governments
TOTAL,Liabilities , 227,620 315,92
Deferred Inflows of Resources
Deferred Inflow of Resources 219,003 SM691 188,173
TOTAL Deferred Inflows of Resources 219,00& 188;173
LOTAL°Deferred triflow"s of�Resources �' �_ 219,003'• 188;17
Fund Balance
Not in Spendable Form 46,891 SM806 61,132
TOTAL Nonspendable Fund Balance; .46;891, _ 61,132 '
Assigned Appropriated Fund Balance SM914 436,870
Assigned Unappropriated Fund Balance 743,640 SM915 439,929
TOTAL Assigned`Fund�Balance __ tt mm _ 743,640
�OTALfund.Balance " ' W� ° F-- 790,531 •- "�, 937;931
TOTAL Liabilities;Deferred`IriflovrsAnd>Fund�Balance� ' �" - � •1;237,155` "s< °'" 1;442;029
Page 47 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SM)MISCELLANEOUS
Results of Operation
ode`gescripfion, - .�� '.2413. =EdpGode. 2014.
Revenues
Real Property Taxes 850,000 SM1001 857,650
IT
OTAL'Real Properly Taxes t° 0,000, 857;650
85
Interest&Penalties On Real Prop Taxes 17 SM1090 20
LOTAL Real'Progerfy'Taz Items _ 17 " 20
Other General Departmental Income 2,881,257 SM1289 2,763,121
�O'fAL Depa°rtmental-Incoine: - � ,; 2;881;262:� 2,763;121
Misc Revenue,Other Govts 28,000 SM2389 28,000
OTAL Intergogernmental Charges. " - 28;000' 28;000
Interest And Earnings 464 SM2401 505
Commissions SM2450
°OTAL Use 0f'MoneyAnd'Properly' > 464--- 505'
Refunds of Prior Year's Expenditures ` 16,930 SM2701
Unclassified(specify) 137 SM2770
OTAL.Miscellaneous..Locai Sources: 17;067° A
St Aid,Other Aid(specify) 972 SM3089 399
TOTAt:S I ., — -" " 972 399,
Federal Aid-Other 32,944 SM4089 19,879
OTAL:Federal Aid` _71, 32,944 - 19,879'
TOTAL Revenues. 3;810;721' 3;669;575
Tj OTAL Detail Revenues And Othe�Sources� y _ �'1810;7211-1� 3,669,5
Page 48 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SM)MISCELLANEOUS
Results of Operation
ode Description, 2013,. EdpCoife ' ';. '2D`14
Expenditures
Other Gen Govt Support,Contr Expend 228,014 SM19894 193,821
TOTAL-10tl r Gen Govt'Support,.' ;28,014 193;821
TOTAL,'Generkd6Vernment Supportth 228;014' 193;821
Insect Control,Pers Sery 45,806 SM40681 32,688
Insect Control,Contr Expend 17,883 SM40684 29,272
Insect Control,Empl Bnfts 8,581 SM40688 7,752
TOTALInsecfi.Control. _72;270 E 69;712j
TOTAL.Healtti•` e72;270 69';712.
Other Transportation,Pers Sery 1,241,400 SM56801 1,302,576
Other Transportation,Ewuip&Cap Outlay 386,862 SM56802 418,378
Other Transportation,Contr Expend 661,074 SM56804 665,810
Other Transportation,Empl Bnfts 481,557 SM56808 530,763
TiJTAL,OtherTransportation. -2,770,892_° 2,917;527
TOTAL Transportation, 'i7,70,892' v�2;917;527
Misc Home&Comm Serv,Contr Expend 10,827 SM89894 2,541
�OTAL°Misc Home'&Rd I rh Ser;: 10,827 2,541
T1(?TAL Home And'Community Seniices` 10,827° u 2,541'
Debt Principal,Serial Bonds 175,000 SM97106 175,000
Debt Principal,Bond Anticipation Notes 100,000 SM97306 100,415
OTAL.pebt Principal-` 275,000 275,415
Debt Interest,Serial Bonds 65,388 SM97107 58,825
Debt Interest,Bond Anticipation Notes o 2,194 SM97307 4,334
X Debftnterest' 67;581 X63,159,
DOTAL:Expenditures
Transfers,Capital Projects Fund 274,041 SM99509
TOTAL,operating:TransferS
TOTAL OtHer
;as," 274,041 0.
TOTAL`Detail Expeniiitures And Other.Uses r 3;698;626 ," 3;522,'175
Page 49 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SM)MISCELLANEOUS
Analysis of Changes in Fund Balance
ode Description: 2013 : Ed Code .. 2014
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 678,436 SM8021 790,531
Restated Fund Balance-Beg of Year 678,436 SM8022 790,531
ADD-REVENUES AND OTHER SOURCES 3,810,721 3,669,575
DEDUCT-EXPENDITURES AND OTHER USES 3,698,626 3,522,175
Fund Balance-End of Year 790,531 SM8029 937,931
Page 50 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SP)PARK
Balance Sheet
;ode Description, 201;3°-' EcijiCode 20114.'
Assets
Cash In Time Deposits 571,560 SP201 750,226
Petty Cash 50 SP210 350
OTAL as 5T[,610' 750,576rA
Due From Other Funds 231,391 SP391 197,955
01$L Due From Other,Funds. 231;391' g 197;955
�.
TOTAL Assets and Deferred Outflows.of Resources ' 803,001. 9,48,530:
Page 51 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SP)PARK
Balance Sheet
ode Description ;2013 Ed Gode 2014'
p:.
Accounts Payable 4,866 SP600 7,584
TOTAL'Accounts Payable. ^' 4;866 __" 7;584,
Other Liabilities 2 SP688 2
TOTAL Oflier Liabilities. 2 2
SOT bilities..:� ;�--,--�, ,4,867
Deferred Inflows of Resources
Deferred Inflow of Resources 231,391 SP691 197,955
TOTAL-DWirred_Inflows ofResources 231,397 _ _19795
�TAL:Deferred Inflows,of,Resources 231,391 ?�.,. 197;955
Fund Balance
Assigned Appropriated Fund Balance 80,930 SP914 93,013
Assigned Unappropriated Fund Balance 485,812 SP915 649,977
742 99l)
°55 42 '742,9
TOTAI:;Liabilities,Deferred,Inflows.And Fund,Balance �������____ ;`803;001 -. ��.�• 948,530
e
Page 52 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SP)PARK
Results of Operation
ade'Description >,2013°: EdpCode 201,4.;..
Revenues
Real Property Taxes 897,594 SP1001 906,160
897 594"" 906 160
UTAL Real Froperfy Taxes, >
Interest&Penalties On Real Prop Taxes 12 SP1090 20
TOTAL�.Real Property�Tax Items. f _ _._.. __ _ 12, - 20
Interest And Earnings 50,754 SP2401 3,275
�OTAL�Use.of"Money,`AndPsoperEy." - " ' " - " 50;754"•n 3
275.
Other Compensation For Loss SP2690 130
TOTAL$ale°'of Pr`operty.A6 .Compensation For Loss ,0 130
Unclassified(specify) 37,729 SP2770 95,087
KOTA-Miscellaneous La]Sources• s 37;729 95_7
Fed Aid,Emergency Disaster Assistance 98,286 SP4960
TOTAL FederalsAiil '__ _ _ �. 98,286
L OTAL'Revenues =1;084,374 1,004,672
I OTAL I, :7
Revenues And Other Sources9,084,$74 9,004;672
Page 53 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SP)PARK
Results of Operation
ode Description ,-' 2013 EdpCode 2014
Expenditures
Parks,Pers Sery 397,383 SP71101 388,813
Parks,Equip&Cap Outlay 419,913 SP71102 76,902
Parks,Contr Expend 322,074 SP71104 273,825
Parks,Empl Bnfts 127,259 SP71108 88,884
TOTAL-Parks_ _ 1,266,628 . '� '828,424
TOTAL Culture And Recreation 1,266,628° X828,424
TOTAL'Exppnditure's 1,266,628 828,424
TOTAL:.Detail:Expenditures And Other Uses 1,266,628 , 828,424
Page 54 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SP)PARK
Analysis of Changes in Fund Balance
ode:DescPiption '2013< '' EdpCode •201'4 .
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 748,996 SP8021 566,742
Restated Fund Balance-Beg of Year 748,996 SP8022 566,742
ADD-REVENUES AND OTHER SOURCES 1,084,374 1,004,672
DEDUCT-EXPENDITURES AND OTHER USES 1,266,628 828,424
Fund Balance-End of Year 566,742 SP8029 742,990
Page 55 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SR)REFUSE AND GARBAGE
Balance Sheet
�Cpdep ... '° =. ;. . 2013. ::EdpG,6de 2014'.,,,
Assets
Cash 215,257 SR200 31,276
Cash In Time Deposits 1,398,397 SR201 1,734,397
Petty Cash 391 SR210 1,050
TOTAL Cash. N -1.,614,044 _ 1;7.66 723
Accounts Receivable _ 92,716 SR380 160,345
�OTAi:Of15er l3eceivables(net)-, _. �� 92,71ti.. 160,345.:
Due From State And Federal Government 119,362 SR410 23,520
1YOTAL S etta Aiidl Federal Aid Receivables` 119;362 Y 23;520
Due From Other Funds 723,713 SR391 593,159
OTAL Due From Other Furids 723,713 mm 593;159
Prepaid Expenses 117',092 SR480 95,960
fOTA_L Rrepaid Expenses . 1'(7,092 95;960
NOTAL•Assets and Deferred Outflows of Resources 2;666,928 , 2;639;707
Page 56 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SR)REFUSE AND GARBAGE
Balance Sheet
odeDescri'tion • ,20,13= EdpCode" _ 2014
Accounts Payable 228,904 SR600 446,855
(TOTAL Accounts Rayable 228,904' 446,855
Due To Other Governments 4,181 SR631 12,547
'TOTAL:Due To.Other Governm erit6, }�4�181: LL 12;54
OTAL 4iabilities � 233,085 459,40
Deferred Inflows of Resources
Deferred Inflow of Resources 679,260 SR691 721,749
TOTAL Deferred Inflows of Resources 721,749;
_ .
TOTAL Deferred Inflowsmof Resburces•• a "' 679;26Q ° 721,7493
Fund Balance
Not in Spendable Form 117,092 SR806 95,960
70TQ1.
.117.,092
Nonspendable.`Fun&Balance,
Assigned Appropriated Fund Balance 456,901 SR914 56,297
Assigned Unappropriated Fund Balance 1,180,590 SR915 1,306,299
T_OTA__LA_ssignedi'urid Balance` _ .� 1;637,;491
OTAL Fund Balance _ • . _' � ~1,•754,583° °' -1;458,556;
TOTAL Liabilities,.Defeired�lnflows-And Fund=Balance • --2�669,928:� �� - 2,639,707
Page 57 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SR)REFUSE AND GARBAGE
Results of Operation
ode:Descriptioh" � , .P ,� • - t �°.� •' ��:2413; . EdpCode. .-2014°.;
Revenues
Real Property Taxes 2,644,226 SR1001 2,660,108
TOTAL Real Property Taxes. • ' - `.2,644;226 _2;660,108.
Interest&Penalties On Real Prop Taxes 52 SR1090 49
TOT R 1 Prope6'taz:items" a � 52„ _ 49
Refuse&Garbage Charges 2,094,556 SR2130 2,091,242
TOTAL:Departnnentalancome.a' 2,094,556': ` 1'091,242
Interest And Earnings 9,293 SR2401 9,624
TOTAL`-Use of MonArf
ey d Rroperty' 9,293,` < 9,624.
Permits,Other 172,813 SR2590 137,538
. -n -P-- - —
TI OTAL Licenses And;Permits • �,172,813
Sales of Scrap&Excess Materials 332,456 SR2650 385,907
Insurance Recoveries 7,875 SR2680
Teity OTAL Sale,of PropAntl"Coriipensation F,or,Loss` _ 3401331 385;907
Refunds of Prior Year's Expenditures 6,909 SR2701 905
Unclassified(specify) SR2770 283
TOTAL Miscellaneous.Local Sources, 6,909. 1,18$
St Aid,Other Aid(specify) 158,541 SR3089 56,129
State Aid Emergency Disaster 97 SR3960 47
TOTAL Mate Ali'i 158;638 • ° 56,176
Federal Aid-Other 36,904 SR4089 281
TI OTAL Federal Aid'
36,904 281
TOTAI:'Revenues r L 5;463,721• 4 5,342;113
LOTAL-Detail.Revende's AndOther Sources 5,4fi3;721 5,342,11$1
Page 58 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SR)REFUSE AND GARBAGE
Results of Operation
ode'Description,' `2013, Ed�iCode; 2t11:4.'
Expenditures
Payment of Mta Payroll Tax,contr Expend 3,452 SR19804 3,516
TOI TAL,Payment"df Mta.Payroll'Ta - '
"14521 3;51`6
OTAL,Geneial>Governr ent Support`` u� °3;452; X 3,516.
Refuse&Garbage,Pers Sery _ 1,128,596 SR81601 1,238,521
Refuse&Garbage,Equip&Cap Outlay 1,006 SR81602 358,798
Refuse&Garbage,Contr Expend 2,388,542 SR81604 2,609,102
�TOTALsRefuse=&".Garbage u 3;518,144 4;206;421
TOI fAL HomeAnd�Comrimuriity Services ' 3;518,144 ". 4,206;421
State Retirement,Empl Bnfts 212,771 SR90108 190,565
Social Security,Empl Bnfts 85,169 SR90308 93,666
Worker's Compensation,Empl Bnfts 77,504 SR90408 81,316
Life Insurance,Empl Bnfts 118 SR90458
Unemployment Insurance,Empl Bnfts SR90508 3,813
Disability Insurance,Empl Bnfts 28,409 SR90558 29,453
Hospital&Medical(dental)Ins,Empl Bnft 56,030 SR90608 74,021
i °460,001m 8itofE4 ;i34"
Debt Principal,Serial Bonds 508,300 SR97106 513,300
Debt Principal,Bond Anticipation Notes 15,000 SR97306
TOTAL` Debt.Principal � ;523,300 513,300
Debt Interest,Serial Bonds 167,216 SR97107 152,019
Debt Interest,Bond Anticipation Notes 75 SR97307
TOTAL Debtlnt6rest. ;167,29,1 152;019•
TAL,Expenditures� _ ' 49;672,'18,8;:,. 5;348;09,0'
Y
Transfers,Other Funds 332,303 SR99019 290,050
I�OTAL Operating:Transfers nw 332;303 :290,050
�I UT'AL OtherUse§ - - 3 2 303:•v' 290;050"
TI�OTAL Detail"Ezperiditures And Other,Uses
J
Page 59 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SR)REFUSE AND GARBAGE
Analysis of Changes in Fund Balance
ade Description', 20:13, Ed Code,. -2014
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 1,295,353 SR8021 1,754,583
Restated Fund Balance-Beg of Year 1,295,353 SR8022 1,754,583
ADD-REVENUES AND OTHER SOURCES 5,463,721 5,342,113
DEDUCT-EXPENDITURES AND OTHER USES 5,004,491 5,638,140
Fund Balance-End of Year 1,754,583 SR8029 1,458,556
Page 60 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SS)SEWER
Balance Sheet
ode°t7escriptidn 4a " =2013 'F. .- :EdpCode `20.
Assets
Cash In Time Deposits 67,733 SS201 68,182
QTAL,Gash, '67,,733 6&;182'
Sewer Rents Receivable SS360 1,901
Accounts-Receivable SS380 4
TOTAL Qtiibr Receiv-ables`(oet)' u d 1;904
Due From Other Funds 26,943 SS391 35,753
DOTAL Due_From'-Other.>Funds: : " 26;943 3 5;73�
:
TOTAL Assets and.Deferred`OutflovirsofResoiirces'; � '94;676' 905,839'
Page 61 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SS)SEWER
Balance Sheet
ode.Descriptiori: 2013. . =EdpGode'"• '20.14•'
Accounts Payable 110 SS600 2,543
TOTAC,Accourits Payable2_543
TOTAL Liabilitiesgw 2;64
.. .1.10' ,.� -, 3
Deferred Inflows of Resources
Deferred Inflow of Resources 26,863 SS691 23,247
TOTAL Deferred`Iriflo'ws of,Resource's. , 26;8_63 X231247
TOTAL Deferred.lnflows of;Resources 26;863 =23,247
Fund Balance
Assigned Appropriated Fund Balance 32,250 SS914 3,750
Assigned Unappropriated Fund Balance 35,452 SS915 76,299
0 n ,
TOTALAss_igned Furid Balance 67,7 2� 80,049
OTAL Fund''Balance 67,702, 80�,049
TOTAL Liabilities Deferred=lnflows.And Fund Balance_ ' 94;676`. ° 185,839
�. �
Page 62 OSC Municipality Code 470379000000
i
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SS)SEWER
Results of Operation
ode'Description 2013;" E dpCode: :," 20'14:1
Revenues
Real Property Taxes 106,300 SS1001 105,200
TOS TAL ReaIrPropeiiy Taxes " ' 106,300 105,200
Interest&Penalties On Real Prop Taxes 2 SS1090 2
Interest&Penalties On Spec Assessments 0 SS1091
TOTAL Real-Property Tax lfems 2 . 21
Sewer Rents 27,149 SS2120 46,020
Sewer Charges 930 SS2122 920
TOI TAL Departmental lncoine', °a 28,079 461940
Interest And Earnings 543 SS2401 264
TOTAL Use.of Money And Property 543. 264
EOT R nues� 934,925 ° 1,52,407
DOTAL Detail Revenues And,Other Sources" 934,925 _ 152,407
Page 63 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SS)SEWER
Results of Operation
ode,Description' 2013 EilpCode_ 2014
Expenditures
Sanitary Sewers,Contr Expend 15,227 SS81204 18,890
TOTAL Sanitary Sewers, 15,227 _ 18,890
Sewage Treat Disp,Contr Expend 39,351 SS81304 281
T AL Sewage Treat Disp 39,351 281
TOTAL Home And Community Services 54,579, 19,171
Debt Principal,Serial Bonds 6,000 SS97106 6,000
Debt Principal,Bond Anticipation Notes 110,000 SS97306 110,000
LOTAL Debt Principal '�116,000 116,000
Debt Interest,Serial Bonds 3,845 SS97107 3,635
Debt Interest,Bond Anticipation Notes 1,650 SS97307 1,254
TOTAL Debt interest 5,495 4,889
TOTAL Expenditures T --— � r 176,074 140;06
TOTAL Detail Expenditures And Other Uses 176,074 . 140;060
Page 64 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SS)SEWER
Analysis of Changes in Fund Balance
O
ode Descrip#ion' „201 3
Analysis of Changes in Fund Balance
Fund Balance-Beginning of Year 108,851 SS8021 67,702
Restated Fund Balance-Beg of Year 108,851 SS8022 67,702
ADD-REVENUES AND OTHER SOURCES 134,925 152,407
DEDUCT-EXPENDITURES AND OTHER USES 176,074 140,060
Fund Balance-End of Year 67,702 SS8029 80,049
Page 65 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SS)SEWER
Budget Summary
ode.Descripfion " ;--' - 201'4~ EdpGode` 2015
Estimated Revenues
Est Rev-Real Property Taxes 105,200 SS1049N 108,075
Est Rev-Departmental Income 33,750 SS1299N 33,750
I OTAL Estimated Revenues 138,950 14.1;825.
Appropriated Fund Balance 32,250 SS599N 3,750
O AL Estimated Other$ources -° 32,250 77 `3,750
�OTALEstimate RuesAnd Ottier Sources 171;200 5
Page 66 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(SS)SEWER
Budget Summary
ode Description LJ
-
Appropriations
App-Home And Community.Services — - 49,000 SS8999N 25,350
App-Debt Service 122,200 SS9899N 120,225
OTAGAppUopriations
NOTAL Appropriation§And.,Other-Uses 7.71,200 M 145;575..
Page 67 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(TA)AGENCY
Balance Sheet
ode°:Descrip#ion. §'- ;2013, --] Ed,pCod`e. 2014
Assets
Cash 23,175,039 TA200 20,276,865
Cash In Time Deposits 226,909 TA201 190,964
DOTAL Cas4 23;401,948 20,467;829'
Due From Other Funds 592 TA391 558
OTAL Due From 11 Other Funds 592 :558
TOTAL Assets and"Deferred Outflows of Resources, 23,402,540 � 20,468,3881
Page 68 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(TA)AGENCY
Balance Sheet
ode Description A 201"3 ' � ;E dpCode 2014
Due To Other Funds 137,390 TA630 2,255
TOTALDue To Other Fuhds 137,390 2;255
Due To Other Governments 22,836,497 TA631 20,000,146
TOTAL Due To Other Governments .22,836,497 20,000, 41 6
Income Executions TA23 13,152
Guaranty&Bid Deposits 428,653 TA30 452,835
TOTAL Agency 6iabilities, -- 428,653.~� ` 465,9871
TOTAL Liabilities = 23,402,540. 20,4 8
TOTAL Liabilities,Deferred Inflows And Fund'Balance" 23;402,540 20,4681388
Page 69 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(W)GENERAL LONG-TERM DEBT
Balance Sheet
od'e-Descriptiari, 12013'7Edpotle'. • 2414 .
Assets
Total Non-Current Govt Liabilities 47,422,997 W129 45,148,674
LOTAL Prouisiori,To,Be Made"Iri"FuturB
'e udgets :'-147;422;997 45,148;67A
TOTAL Assets°andDeferred 0uttlows,of Resources 47,422,997 W� 45,148,674.
Page 70 OSC Municipality Code 470379000000
TOWN OF Southold
Annual Update Document
For the Fiscal Year Ending 2014
(W)GENERAL LONG-TERM DEBT
Balance Sheet
otle:Description 2013, ; Ed Gode., 2014,,
Judgments And Claims Payable W686
Compensated Absences 8,237,997 W687 8,538,674
TQTAL,Other'[iabilitiesY' ___ 'A .8;237;997,. - _ 8,538;874
Bonds Payable 39,185,000 W628 36,610,000
TOTAL`Borid And Lorig Term'=Liabilities' _
36,60,000
00` 1
O AL Liabilities` �mm- �^ _ � "�� 47,422,997 ' " 45,'148,674
TOTAL;Liabilities•; ;47;422,99T.- _____ 45;148,874
Page 71 OSC Municipality Code 470379000000
Office of the State Comptroller TOWN OF Southold 4/2712015
Statement of Indebtedness
For the Fiscal Year Ending 2014
County of:Suffolk -
Municipal Code:470379000000
First Debt Cops Comp Date of Date of Int. Amt.Orig. O/S Beg. Paid Redeemed Prior Yr. Accreted 01S End
Year Code Description Flag Flag Issue Maturity Rate Var? Issued of Year Dur.Year Bond Proc. Adjust. Interest of Year
2003 BAN N New London Terminal Y 09/12/2003 04/12/2017 0.0077. Y $2,475,000 $450,000 $100,000 $0 $0 $350,000
2010 BAN N, Decom Wastewater Y 09/02/2010 08/28/2015 0.007% $700,000 $220,000 $110,000 $0 $0 $110,000
Plant
2011 BAN N Highway Y 09/01/2011 08/31/2016 0.007% $250,000 $139,000 $50,000 $0 $0 $89,000
Payloader/Skidsteer
2012 BAN N Highway/Police Y 08/30/2012 08/30/2017 0.0077o $120,000 $94,000 $68,000 $42,000 $0 $26,000
Facility Improv
2013 BAN N FIFD North Ramp Y 09/12/2013 04/02/2018 0.007% $500,000 $500,000 $1,000 $585 $0 $499,000
Project
2014 BAN N Highway Dump Truck Y 08/28/2014 08/28/2019 0.007% $185,000 $0 $0 $185,000
2014 --BAN N Bay Avenue Bridge Y 08/28/2014 08/28/2019 0.007% $800,000 $0 $0 $800,000
2011 BAN N Fuel Management Y 04/14/2011 04/12/2016 0.007% $180,000 $108,000 $42,000 $5,086 $0 $66,000
System
2014 BAN N Highway Facility Y 08/28/2014 08/28/2019 0.0077. $825,000 $0 $0 $825,000
Improvement
2007 BAN N Orient by the Sea 09/07/2007 09/07/2017 0.007% $30,000 $12,000 $3,000 $0 $0 $9,000
Road Improve
Total for Type/Exempt Status-Sums Issued Amts only made in AFR Year $1,810,000 $1,523,000 $374,000 $47,671 $0 $0 $2,959,000
2007 BOND N 2007 Public Y 04/15/2007 04/15/2030 0.04% Y $14,650,000 $10,850,000 $625,000 $0 30 $10,225,000
Improvement Bonds
2009 BOND N Various Purposes Y 03/15/2009 03/15/2030 3.00% Y $5,283,000 $4,530,000 $185,000 $0 $0 $4,345,000
2005 BOND N FIFD New London Y 03/01/2005 09/01/2021 0.038% Y $3,000,000 $1,550,000 $175,000 $0 $0 $1,375,000
Terminal
2009 BOND N Refunding Bonds 05/01/2009 05/01/2019 2.00% Y $2,125,000 $1,245,000 $225,000 $0 $0 $1,020,000
2005 BOND N Refunding Serial 02/08/2005 02/15/2015 2.50% Y $2,380,000 $220,000 $110,000 $0 $0 $110,000
Bonds
2011 BOND N 2011 Public Y 06/26/2011 08/15/2030 2.00% Y $13,175,000 $12,070,000 $595,000 $0 $0 $11,475,000
Improvement Bonds
2011 BOND N FI Landfill Closure- 03/17/2011 12/15/2014 3.9076 $75,000 $20,000 $20,000 $0 $0 $0
EFC
2004 BOND N Cutchogue Landfill N 07/22/2004 02/15/2018 1.201% Y $3,789,098 $1,525,000 $290,000 $0 $0 $1,235,000
Closure-EFC
2008 BOND N Various Purposes-- Y 05/15/2008 05/15/2030 0.04% Y $8,850,000 $7,175,000 $350,000 $0 $0 $6,825,000
2008
Total for Type/Exempt Status-Sums Issued Amts only made in AFR Year $0 $39,185,000 $2,575,000 $0 $0 $0 $36,610,000
AFR Year Total for All Debt Types-Sums Issued Amts only made in AFR Year $1,610,000 $40,708,000 $2,949,000 $47,671 $0 $0 $39,569,000
Page 72
TOWN OF Southold
Schedule of Time Deposits and Investments
For the Fiscal Year Ending 2014
EDP Code Amount
CASH:
On Hand 9Z2001 - $3,496.36
Demand Deposits 9Z2011 $32,155,017.71
Time Deposits 9Z2021 $21,318,399.86
Total $53,476,913.93
COLLATERAL:
-FDIC Insurance 9Z2014 $4,000,000.00
Collateralized with securities held in
possession of municipality or its agent 9Z2014A $51,561,796.00
Total $55,561,796.00
INVESTMENTS:
-Securities (450) .
Book,Value(cost) 9Z4501
Market Value at Balance Sheet Date 9Z4502
Collateralized with securities held in 9Z4504A
possession of municipality or its agent
- Repurchase Agreements (451)
Book Value (cost) 9Z4511
Market Value at Balance Sheet Date 9Z4512
Collateralized with securities held in 9Z451.4A
possession of municipality or its agent
Page 73 OSC Municipality Code 470379000000
TOWN OF Southold
Bank Reconciliation
For the Fiscal Year Ending 2014
Include All Checking, Savings and C.D.Accounts
Bank Add: Less• Adjusted
Account Bank Deposit Outstanding Bank
Number Balance In Transit Checks Balance
*****-0320 $32,753 $0 $0 $32,753
*****-9677 $1,892,992 $0 $0 $1,892,992
*****-1052 $10,231 $0 $10,229 $2
*****-0040 $1,463,105 $0 $263,105 $1,200,000
*****-5725 $782,900 $0 $0 $782,900
*****-89-1 $48,602 $0 $0 $48,602
*****-5647 $70,503 $0 $0 $70,503
*****-5466 $122,922 $465 $0 $123,386
*****-7685 ($1,648) $35 $0 ($1,613)
*****-5704 $14,700 $0 $250 $14,450
*****-3815 $16,052 $11 $0 $16,063
*****-3781 $19,978 $59 $0 $20,037
*****-5688 $28 $0 $0 $28
*****-9669 $2,100,000 $0 $0 $2,100,000
*****-9685 $1,006,127 $0 $0 $1,006,127
*****-89-2 $5,184 $0 $0 $5,184
*****-9707 $666,022 $0• $0 $666,022
*****-9774 $1,320 $0 $0 $1,320
*****-9812 $27 $0 $0 $27
*****-9820 $119,480 $0 $0 $119,480
*****-9863 $723,153 $0 $0 $723,153
*****-9693 $184,591 $0 $0 $184,591
*****-9871 $444,949 $0 $0 $444,949
*****-3119 $7,139,684 $0 $0 $7,139,684
*****-0303 $3,905,206 $0 $0 $3,905,206
*****-9804 $176,052 $0 $0 $176,052
*****-6352 $210,363 $0 $210,243 $120
*****-9847 $1,368,900 $0 $0 $1,368,900
*****-9715 $26,950 $0 $0 $26,950
*****-8067 $1,037,020 $0 $0 $1,037,020
Page 74 OSC Municipality Code 470379000000
TOWN OF Southold
Bank Reconciliation
For the Fiscal Year Ending 2014
Include All Checking, Savings and C.D.Accounts
Bank - Add. Less: Adjusted
Account Bank Deposit Outstanding Bank
Number Balance In Transit Checks Balance
*****-7759 $64,245 $8,028 $0 $72,273
*****-5021 $2,729 $0 $2,728 $1
*****-0217 $929 $0 $929 $0
*****-OMD1 $22,642 $0 $0 $22,642
*****-OMD2 $10,220 $0 $0 $10,220
*****-NPD 1 $1,734 $0 $0 $1,734
*****-NPD2 $113,641 $0 $0 $113,641
*****-MPD1 $26,239 $0 $8,172 $18,067
*****-MPD2 $11,027 $0 $0 $11,027
*****-SPD 1 $66,186 $0 $233 $65,953
*****-SPD2 $15,915 $0 $0 $15,915
*****-SPD3 $1 $0 $0 $1
*****-MPD1 $9,025 $0 $58 $8,967
*****-MPD2 $514,920 $0 $0 $514,920
*****-9967 $15,343 $454 $0 $15,797
*****-W M D 1 $8,596 $0 $3,140 $5,456
*****-WMD2 $596,971 $0 $0 $596,971
*****-W M D3 $3,929 $0 $0 $3,929
*****-9723 $1,143,520 $0 $0 $1,143,520
*****-9731 $19,160 $0 $0 $19,160
*****-9758 $49,021 $0 $0 $49,021
*****-0099 $55,034 $0 $0 $55,034
*****-9766 $182,449 $0 $0 $182,449
*****-0404 $8,515 $0 $0 $8,515
*****-5354 $18,066 $0 $0 $18,066
*****-2319 $205 $0 $0 $205
*****-4432 $131,678 $0 $5,461 $126,217
*****-1799 $51,575 $0 $59 $51,516
*****-3807 $27,134 $0 $2,206 $24,928
*****-5628 $4,872 $0 $0 $4,872
Page 75 OSC Municipality Code 470379000000
TOWN OF Southold
Bank Reconciliation
For the Fiscal Year Ending 2014
Include All Checking, Savings and C D.Accounts
Bank Add- Less: Adjusted
Account Bank Deposit Outstanding Bank
Number Balance In Transit Checks Balance
*****-4230 $526,819 $0 $0 $526,819
*****-5636 $1,029,000 $0 $0 $1,029,000
*****-9680 $769,860 $0 $0 $769,860
*****-4430 $24,881,081 $0 $0 $24,881,081
*****-0081 $753 $0 $0 $753
*****-0024 $0 $0 $0 $0
Total Adjusted Bank Balance $53,473,418
Petty Cash $3,496.36
Adjustments $.00
Total Cash 9ZCASH * $53,476,914
Total Cash Balance All Funds 9ZCASHB * $53,476,914
*Must be equal
Page 76 OSC Municipality Code 470379000000
TOWN OF Southold
Local Government Questionnaire
For the Fiscal Year Ending 2014
Response
1) Does your municipality have a written procurement policy? Yes
2) Have the financial statements for your municipality been independently audited? Yes
If not, are you planning on having an audit conducted?
3) Does your local government participate in an insurance pool with other local Yes
governments?
4) Does your local government participate in an investment pool with other local Yes
governments?
J
5) Does your municipality have a Length of Service Award Program (LOSAP) No
for volunteer firefighters?
6) Does your municipality have a Capital Plan? Yes
7) Has your municipality prepared and documented a risk assessment plan? No
If yes, has your municipality used the results to design the system of internal
controls?
8) Have you had a change in chief executive or chief fiscal officer during the last No
year?
9) Has your Local Government adopted an investment policy as required by Yes
General Municipal Law, Section 39?
Page 77
TOWN OF Southold
Employee and Retiree Benefits
For the Fiscal Year Ending 2014
Total Full Time Employees: 236
Total Part Time Employees: 269
Account Description Total #of Full #of Part #of Retirees
Code Expenditures Time Time
(All Funds) Employees Employees
9010 State Retirement System $2,298,146.00 175 7 5
90158 Police and Fire Retirement $1,507,785 80 52 2
90258 Local Pension Fund
90308 Social Security $1,438,907.90 236 269 9
90408 Worker's Compensation $510,851.07 236 269 9
Insurance
90458 Life Insurance
90508 Unemployment Insurance $33,021.23 4 4
90558 Disability Insurance $5,710.86 160 163 6
90608 Hospital and Medical $6,236,164.9 207 18 117
(Dental)Insurance
90708 Union Welfare Benefits $402,534.48 201 12 5
90858 Supplemental Benefit Payment to
Disabled Fire Fighters
91890 Other Employee Benefits $93,232.36 206 128 8
Total $12,526,354.69
Computed Total From Financial $12,526,354.69
Section(comparative purposes only)
Page 78 OSC Municipality 470379000000
TOWN OF Southold
Energy Costs and Consumption
For the Fiscal Year Ending 2014
Energy Type Total Total Volume Units Of Alternative
Expenditures Measure Units Of
Measure
asoline $298,185 110,640 gallons
Diesel Fuel $587,8191 170,755 gallons
Fuel Oil $50,200 12,469 gallons
Natural Gas $36,388 32,409 cubic feet herms
Electricity $355,63 1,813,818 kilowatt-hours
oal tons
Page 79 OSC Municipality 470379000000
TOWN OF Southold
Schedule of Other Post Employment Benefits (OPEB)
For the Fiscal Year Ending 2014
Annual OPEB Cost and Net OPEB Obligation
1.Type of Other Post Employment Benefits Plan Agent Multiple-Employer Defined Benefits
2 Annual Required Contribution(ARC) $6,626,231 00
3. Interest on Net OPEB Obligation $1,042,581.00
4 Adjustment to Annual Required Contribution ($1,507,314.00)
5 Annual OPEB Expense $6,161,498.00
6.Less Actual Contribution Made $1,498,955.00
7.Increase in Net OPEB Obligation $4,662,543 00
8.Net OPEB Obligation-beginning of year $26,064,516.00
9.Net OPEB Obligation-end of year $30,727,059.00
10.Total Other Post Employment Benefits as reported in Accounts 683 in
Financial Section,Current Fiscal Year
11.Percentage of Annual OPEB Cost Contributed(Actual Contribution 2433%
Made/Annual OPEB Cost)
Funded Status and Funding Process
12 Actuarial Accrued Liability(AAL) $65,881,679.00
13.Less:Actuarial Value of Plan Assets $000
14.Unfunded Actuarial Accrued Liability(UAAL) $65,881,679.00
15.Funded Ratio(Actuarial Value of Plan Assets/AAL) 00000
16.Annual Covered Payroll(of active employees covered by the plan) $14,268,937 00
17 UAAL as Percentage of Annual Covered Payroll 461.71%
Other OPEB Information
18.Date of most recent actuarial valuation 01/01/2013
19.Actuarial method used Entry Age
20.Assumed rate of return on investments discount rate 400%
21 Amortization period of UAAL(in years) 3000
Page 80 OSC Municipality 470379000000
CERTIFICATION OF CHIEF FISCAL OFFICER
I, Scott Russell , hereby certify that I am the Chief Fiscal Officer of
the Town of Southold and that the information provided in the annual
financial report of the Town of Southold , for the fiscal year ended 12/31/2014
is TRUE and correct to the best of my knowledge and belief.
By entering the personal indentification number assigned by the Office of the State Comptroller to me as
the Chief Fiscal Officer of the Town of Southold , and adopted by me as
my signature for use in conjunction with the filing of the Town of Southold's
annual financial report, I am evidencing my express intent to authenticate my certification of the
Town of Southold's annual financial report for the fiscal year ended 12/31/2014
and filed by means of electronic data transmission.
John A. Cushman Scott Russell
Name of Report Preparer if different Name
than Chief Fiscal Officer
(631)765-4333 Supervisor
Telephone Number Title
53095 Route 25, Southold, NY 11971
Official Address
04/27/2015 (631)765-1889
Date of Certification Official Telephone Number
Page 81 Municipality Code 470379000000
TOWN OF Southold
Financial Comments
For the Fiscal Year Ending 2014
Page 82
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
A. Summary of Significant Accounting Policies-
The financial statements of the Town of Southold have been prepared in conformity with
generally accepted, accounting principles (GAAP) as applied to government 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. Financial Reporting Entity
The Town of Southold, which was established in 1640, is governed by its Charter, the
Local Municipal 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
Supervisor serves as Chief Executive Officer and as Chief Fiscal Officer.
Basic services provided include public safety, health, transportation, economic
assistance and opportunity, culture and recreation, and home and community services.
All governmental activities and functions performed for the Town are its direct
responsibility. No other governmental organizations have been included or excluded
from the reporting entity.
The financial reporting entity consists of (a) the primary government which is the Town
of Southold, (b) organizations for which the primary government is financially
accountable and (c) other organizations for which the' nature and significance of their
relationship with the primary government are such that exclusion would cause the
reporting entity's financial statements to be misleading or incomplete as set forth in
GASB.Statement 14.
The decision to include a potential component unit in the Town's reporting entity is
based on several criteria set forth in GASB 14 including legal standing, fiscal
dependency, and financial accountability. Based on the application of these criteria, the
following is a brief review of certain entities considered in -determining the Town of
Southold's reporting entity.
Certain special districts of the Town of Southold provide sanitation, ferry, and park
services to residents and businesses within the districts. These special districts are
organized under New York State Town law and have separately elected boards. Long-
term debt backed by the full faith and credit of the Town and other financial matters
result in a fiscal interdependency with the Town. Accordingly, these special districts
have been determined to be component units of the Town of Southold and are
presented discretely in a separate column in the combined financial. statements to
emphasize that they are legally separate from the primary government. These districts
include the following:
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
A. Summary of Significant Accounting Policies (continued)
1. Financial Reporting Entity (continued)
The Fishers Island Ferry District, established in 1947
Orient Mosquito District, established in 1916
Fishers Island Waste Management District, established in 1952
Cutchogue-New Suffolk Park District, established in 1953
Orient-East Marion Park District, established in 1969
Southold Park District, established in 1907
Mattituck Park District, established in 1941,
Complete financial statements of these component units can be obtained from their
respective administrative offices:
Orient Mosquito District Fishers Island Waste
Main Road Management District
Orient, NY 11957 Fishers Island, NY 06390
Cutchogue-New Suffolk Orient-East Marion
Park District Park District
P.O. Box 311 Route 25
Cutchogue, NY 11935 Orient, NY 11957
Southold Park District Mattituck'Park District
P.O. Box 959 P.O. Box 1413
Southold, NY 11971 Mattituck, NY 11952
Fishers Island Ferry District
Main Street
Southold, NY 11971
2. Fund Accounting
The Town of Southold uses funds and account groups to report on its financial position
and the results of its operations. , Fund accounting. is designed to demonstrate legal
compliance and to aid financial management by segregating transactions related to
certain government functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. An account
group, however, is a financial reporting device designed to provide accountability for
certain assets and liabilities that are not recorded in the funds because they do not
directly affect net expendable available financial resources.
The Town records its transactions in the fund types and account groups described
below:
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
A. Summary of Significant Accounting Policies (continued)
2. Fund Accounting (continued)
Fund Categories
Governmental Funds - Governmental funds are those through which most
governmental functions are financed. . The acquisition, use and balance 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. The following
are the Town's governmental fund types.
General Fund - 'the principal- operating fund which includes all operations not
required to be recorded in other funds.
Special Revenue Funds - used to account for the proceeds of specific revenue
sources that are legally restricted to expenditures for specific purposes. The
following Special Revenue Funds are utilized:
Highway Funds -To maintain and operate highways.
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.
Capital Protects Fund - used to account for financial resources to be used for the
acquisition or construction of major capital facilities (other than those financed by
special assessment funds and trust funds).
Fiduciary Funds - used to account for assets held by the local government in a
trustee or custodial capacity:
Trust and Agency Funds - used to account for money received and held in the
capacity of trustee, custodian or agent. These include expendable trusts, non-
expendable trusts, and agency funds.
Account Groups
Account Groups are used to establish accounting control and accountability for
general fixed assets and general long-term debt. The two account groups are not
"funds". They are concerned with measurement of financial position and not results of
operations.
TOWN•OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
A. Summary of Significant Accounting Policies (continued)
Account Groups (continued)
The General Fixed Assets Account Group - used to account for land, buildings,
improvements other than buildings, and equipment utilized for general government
purposes, except those accounted for in proprietary funds.
The General Lonq-Term Debt Account Group - used to account for all.long-term debt
except that accounted for in proprietary and special assessment funds.
3. Basis of Accounting/Measurement Focus
Basis of accounting refers to when revenues and expenditures and the related assets
and liabilities are recognized in the accounts and reported in the financial statements.
Basis of accounting relates to the timing of the measurements made, regardless of the
measurement focus. Measurement focus is the determination of what is measured, i.e.
expenditures or expenses.
Modified Accrual Basis - All governmental Funds and Expendable Trust Funds are
accounted for using the modified accrual basis of accounting. -
Under this basis of accounting, revenues are recorded when measurable and available.
Available means collectible within the current period or soon enough thereafter to be
used to pay liabilities of the current period.
Material revenues that are accrued include real property taxes, state and federal aid,
sales tax and certain user charges. If expenditures are the prime factor for determining
eligibility, revenues from federal and state grants are accrued when the expenditure is
made.
Expenditures are recorded when incurred except that:
Expenditures for prepaid expenses and inventory-type items are recognized at the
time of purchase.
Principal and interest on indebtedness are not recognized as an expenditure until due.
Compensated absences, such as vacations and sick leave, which vests or
accumulates, are charged as an expenditure when paid
Account Groups - General fixed assets are recorded at actual or estimated cost or, in
the case of gifts and contributions, at the fair market value at the time received. No
provision for depreciation is made. General long-term debt liabilities are recorded at the
par value of the principal amount. No liability is recorded for interest payable at maturity.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
A. Summary of Significant Accounting Policies (continued)
4. Fund Balances
In fiscal 2011, the Town implemented Governmental Accounting Standards Board'
Statement No. 54, Fund Balance Reporting.and Governmental Fund Type Definitions
(GASB 54). GASB 54 changed the classification of fund balance to focus on the
constraints imposed on resources in governmental funds, instead of the previous
focus on availability for appropriation.
Fund balance is now broken down into five different classifications: nonspendable,
restricted, committed, assigned, and unassigned.
Nonspendable consists of assets that are inherently nonspendable in the current
period either because of their form or because they must be maintained intact,
including prepaid items, inventories, long-term portions of loans receivable, financial
assets held for resale, and principal of endowments.
Restricted consists of amounts that are subject to externally enforceable legal purpose
restrictions imposed by creditors, grantors, contributors, or laws and regulations of
other governments; or through constitutional provisions or enabling legislation.
Committed consists of amounts that are subject to a purpose constraint imposed by a
formal action of.the government's highest level of decision-making authority before the
end of the fiscal year, and that require the same level of formal action to remove the
constraint. The Town Board is the decision-making authority that can, by Local Law,
commit fund balance.
Assigned consists of amounts that are subject to a purpose constraint that represents
an intended use established by the government's highest level of decision-making
authority, or by their designated body or official. The purpose of the assignment must
be narrower than the purpose of the general fund, and in funds other than the general
fund, assigned fund balance represents the residual amount of fund balance. The
Town Board has sole authority to assign fund balance.
Unassigned represents the residual classification for the government's general fund,
and could report a surplus or deficit. In funds other than the general fund, the
unassigned classification should be used only to report a deficit balance resulting from
overspending for specific purposes for which amounts had been restricted, committed,
or assigned.
When resources are available from multiple classifications, the Town spends funds in
the following order: restricted, committed, assigned, unassigned.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
A. Summary of Significant Accounting Policies (continued)
4. Fund Balances (continued)
The Town has, by resolution, adopted a fund balance policy that states the Town
must maintain a minimum unrestricted (the total of committed, assigned, and
unassigned) fund balance of at least 10% percent of the general fund operating
budget. Unrestricted fund balance below the minimum should be replenished within
the succeeding fiscal year.
5. Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other
commitments for the expenditure of monies are recorded for budgetary control purposes
to reserve that portion of the applicable appropriations is employed in all funds.
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.
Encumbrances totaling $1,790,270 were included in the reporting of fund balance as
follows:
General Fund Whole Town $195,954
General Fund Part Town 400
Highway Fund Part Town 67,901
Capital Fund 1,515,605
Solid Waste District 6,297
Fishers Island Sewer District 4,113
6. Assets, Liabilities and Fund Equity
Receivables
Receivables include amounts due from Federal, State, and other governments and
individuals for services provided by the Town. Receivables revenues are recorded as
earned or as specific program expenditures are'incurred.
Inventory - Materials and Supplies
Inventory in the General Fund is valued at cost, using,weighted average cost method.
Inventory in these funds is accounted for under the consumption method.
Property, Plant and Equipment - General
Fixed assets purchased for general governmental purposes are recorded as
expenditures in the governmental funds and are capitalized at cost (or estimated
historical cost for assets purchased prior to 1976) in the General Fixed Assets Account
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
Group. Contributed fixed assets are recorded at fair market value at the date received.
6. Assets, Liabilities and Fund Equity (continued)
Property, Plant and Equipment - General (continued)
Fixed assets consisting of certain infrastructure type improvements other than-buildings,
including roads, bridges, curbs and gutters, streets and sidewalks, drainage and lighting
systems, have not been capitalized. Such assets normally are immovable and of value
only to the Town. Therefore, the purposes of stewardship for capital expenditures can
be satisfied without recording these assets. No depreciation has been provided on
general fixed assets, nor has interest on general fixed assets construction in progress
been'capitalized.
Deferred Revenue
Deferred revenues are those where asset recognition criteria have been met, but which
revenue recognition criteria have not been met. Such amounts have been deemed to
be "measurable" but not "available" pursuant to GAAP.
Long-Term Obligations
Long-term debt is recognized as a liability of a governmental fund when due. For other
long-term obligations, only that portion expected to be financed from expendable
available financial resources is reported as a fund liability of a governmental fund. The
remaining portion of such obligations is reported in the General Long-Term Debt
Account Group.
Fund Equity— Reservations and Designations
Portion's of fund equity are segregated for future use and therefore not available for
future appropriation or expenditure. Amounts reserved for encumbrances, inventory,
and insurance claims, 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.
7. Revenue and Expenditures
Property Taxes
Real property taxes for the ensuing year are levied annually and become a lien on
December 1. Taxes are collected during the period December 1 to May 31 , with the
first half due January 10 and the second half due May 31. Tax payments made during
the period December 1 to December 31 are recognized as revenue in the subsequent
year.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
7. Revenue and Expenditures (continued)
Property Taxes (continued)
Taxes for county purposes (apportioned to the area of the county inside the Town of
Southold) are levied together with taxes for town and special district purposes as a
single bill. The towns and special districts receive the full' amount of their levies
annually out of the first amounts collected on the combined bills. The county assumes
enforcement responsibility for all taxes levied in the towns (and for unpaid county taxes
in the Town).
Unpaid village taxes and school district taxes are turned over to the county for
enforcement. Any such taxes remaining unpaid at year-end are relieved as county
taxes in the subsequent year.
Interfund Revenues
Interfund revenues are quasi-external transactions in the operating funds that represent
amounts charged for services or facilities provided by that operating fund. The amounts
paid by the fund receiving the benefits of the service or facilities are reflected as an
expenditure of that fund.
Operatinq Transfers
Operating transfers represent payments to the Risk Retention Fund and Capital
Projects Fund from other funds for their appropriate share of the risk retention and
capital projects.
Insurance
The Town assumes the liability for most risk including, but not limited to, property
damage and personal injury liability. Judgments and claims are recorded when it is
probable that an asset has been impaired or a liability has been incurred and the
amount of loss can be reasonably estimated.
Compensated Absences
Vested or accumulated vacation or sick leave of governmental funds that is expected to
be liquidated with expendable available financial resources is reported as an
expenditure and a fund liability of the respective fund that will pay it. Amounts of vested
or accumulated vacation or sick leave of governmental funds that are not expected to
be liquidated with expendable available financial resources are reported in the General
Long-Term Debt Account Group. No expenditure is reported for these amounts. In
accordance with the provisions of Statement No. 16 of the Governmental Accounting
Standards Board, Accounting for Compensated Absences, no liability is recorded for
non-vesting accumulating rights to receive sick pay benefits.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
7. Revenue and Expenditures (continued)
Total Columns on the General Purpose Financial Statements
Total columns on the general-purpose financial statements are captioned
"Memorandum Only" to indicate' that they are presented only to facilitate financial
analysis. Data in these columns do not present financial position, results of operations
or changes in financial position in conformity with generally accepted accounting
principles, nor is such data comparable to a consolidation. Interfund eliminations have
not been made in the aggregation of the data.
B. Stewardship, Compliance, Accountability
Budgetary Data
1. Budget Basis of Accounting
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.
2. Budget Policies -The budget policies are as follows:
a. No later than October 1, the Supervisor submits a tentative budget to the Town
Board for the fiscal year commencing the following fiscal year. The tentative
budget includes the proposed means of financing for all funds.
b. After public hearings are conducted to obtain taxpayer comments, no later than
November 20, the Town Board adopts the budget.
c. The Town Board must approve all modifications of the budget. However, the
Supervisor is authorized to transfer certain budgeted amounts within departments.
3. Material Violations of Finance Related Activities
There are no material violations of finance-related provisions.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
B. Stewardship, Compliance, Accountability (continued)
4. Fund Balances
1. Certain funds of the Town apply to areas less than the entire Town. The fund
equity at December 31, 2014 is allocated as follows:
General Fund (Town wide) $ 8,579,421
Special Revenue Funds
General Fund Part Town 1,338,036
Highway Fund -- Part Town 1,041,810
Special District Funds
Orient by the Sea Road Improvement District 1,320
East-West Fire Protection 13,815
Southold Wastewater Disposal 19,221
Fishers Island Sewer 61,829
Solid Waste Management 848,617
Discretely Presented Component Units
Fishers Island Waste Management 609,939
Fishers Island Ferry 905,523
Cutchogue-New Suffolk Park 115,375
Southold Park 81,869
Orient-East Marion Park 29,094
Mattituck Park 516,652
Orient Mosquito 32,408
Total $14.209.497
Deficit Fund Balances
There were no deficit fund balances at December 31, 2014.
C. Detail Notes on all Funds and Account Groups
1. Assets
Cash and Investments
Cash consists of funds deposited in demand accounts, time deposit accounts and
certificates of deposit with maturities of less than three months.
State statutes govern Town investment policies. In addition, the Town has its own
written investment policy. Town monies are deposited in FDIC insured commercial
banks or trust companies located within the state. The Supervisor is authorized to use
demand accounts and certificates of deposits.
Permissible investments include obligations of the U.S. Treasury and U.S. Agencies,
repurchase agreements, obligations of New York State or its localities, 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.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
C. Detail Notes on all Funds and Account Groups (continued)
1. Assets (continued)
The written investment policy requires that repurchase agreements be purchased from
banks located within the state and that underlying securities must be obligations of the
federal government. Underlying securities must have a market value of at least .102
percent of the cost of the repurchase agreement.
Collateral is required for demand deposits and certificates of deposit at 102 percent of
all deposits not covered by federal deposit insurance. Obligations that may be pledged
as collateral are obligations of the United States and its agencies and obligations of the
state and its municipalities and school districts.
Deposits - All deposits, including certificates of deposits, are carried at cost plus
accrued interest. Deposits at year-end were entirely covered by federal depository
insurance or by collateral held by the Town's custodial banks in the Town's name.
At December 31, 2014 the cash in banks was $53,473,418 and collateral held against
cash in banks was $55,561,796 consisting of FDIC insurance and/or securities held in
the name of the Town of Southold.
Restricted Cash
Restricted Cash consists of assessments collected by the Receiver of Taxes not yet
remitted to the appropriate governmental entity.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
C. Detail Notes on all Funds and Account Groups (continued)
2. Fixed Assets
A summary of changes within the General Fixed Assets Account Group for the Town of
Southold for the year ended December 31, 2014 is as follows:
Balance Balance
01/01/2014 Additions Deletions 12/31/2014
Primary Government:
Land $119,586,559 $5,491,311 $ 564,103 $124,513,767
Buildings & Improvements 13,234,187 36,025 13,270,212
Other Improvements 15,756,291 9,315 15,765,606
Construction in Progress 53,345 5,129,152 2,758 5,179,739
Infrastructure 76,784,978 853,619 77,638,597
Machinery & Equipment 12,488,854 655,937 1,041,587 12,103,204
Total $237.904,214 $12,175.359 $1.608,448 $248.471.125
Balance Balance
01/01/2014 Additions Deletions 12/31/2014
Component Units:
Land $2,193,349 $2,193,349
Buildings & Improvements 14,145,369 14,145,369
Other Improvements 2,545,238 2,545,238
Infrastructure 4,037,642 $ 9,550 4,047,192
Machinery & Equipment 3,625,544 378,385 4,003,929
Total $25,547.142 $ 387.935 $ 0 $26.935.077
3. Interfund Receivables and Payables
Interfund receivables and payables for the primary government at December 31, 2014
were as follows:
Interfund Interfund
Fund Receivables Payables
General Fund Whole Town $ 884,861 $ 2,502,217
General Fund Part Town 154,823
Special Grant Fund 8,000
Highway Fund Part Town 1,063,265 31,735
East-West Fire Protection District 164,519
Solid Waste Management District 472,993
Wastewater Disposal District 23,307
Fishers Island Sewer District 12,446
Capital Projects 355,262 587,828
Trust & Agency 558 2,254
Total Interfund $ 3.132.034 $ 3,132,034
TOWN OF SOUTHOLD'
Notes To Financial Statements
December 31, 2014
C. Detail Notes on all Funds and Account Groups (continued)
4. Due To/From'Primary Government and Component Units
Amount Amount
Receivable Payable
Component Units:
Fishers Island Waste Management District $ 120,166
Fishers Island Ferry District 169,524
Orient Mosquito District 18,649
Cutchogue-New Suffolk Park District 30,114
Southold Park District 70,495
Orient-East Marion Park District 8,604
Mattituck Park District 88,741
Primary Government
General Fund $ 506,293
t
Totals $ 506,293 $ 506.293
5. Indebtedness
Short-Term Debt
Liabilities for bond anticipation notes (BAN's) are generally accounted for in the capital
projects funds. The notes or renewal thereof may not extend, more than two years
beyond the original date of issue unless a portion is redeemed within two years and
within each 12 month period thereafter.
State law requires that BAN's issued for capital purposes be converted to long-term
obligations within five years after the original issue date. Howi✓ver, BAN's issued for
assessable improvement projects may be renewed for periods equivalent to the
maximum life of the permanent financing, provided.that stipulated annual reductions of
principal are made.
To Be Redeemed 2014
Interest Budget
Description Amount Rate Appropriations Bonds
Various Purposes $ 2,044,000 .73% $ 416,000 $ 1,628,000
Various Purposes ' 915,000 .74% 186,000 729,000
Total $ 2,959,000 $ 602,000 $ 2,357.000
TOWN OF SOUTHOLD
Notes,To Financial Statements
December 31, 2014
C. Detail Notes on all Funds and Account Groups (continued)
5. Indebtedness (continued)
Long-Term Debt
a) At December 31, 2014 the total outstanding indebtedness of the Town, excluding the
above obligations aggregated $36,610,000. Of this amount, ,$36,370,800 was
subject to the constitutional debt limit and, combined-with the short-term debt listed
above, represented 5.5% of its debt limit.
b) Serial 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 full faith and credit debt.of the local
government, are recorded in the General Long-Term Debt Account Group. The
provision to be made in future budgets for capital indebtedness represents the
amount exclusive of interest, authorized to be collected in future years from taxpayers
and others for liquidation of the long-term liabilities.
c) Other Long-Term Debt - In addition to the above long-term debt, the local
government had the following non-current liabilities:
• Judgments & Claims Payable — Represents the value of the outstanding
liability due the United States Department of Justice for an action brought
against the Fishers Island Ferry District.
• Compensated Absences - Represents the value of earned and unused
portion of the liability for compensated absences.
d) Summary Long-Term Debt - The following is,a summary of,long-term liabilities
outstanding at December 31, 2014 by fund type and account group:
General Discretely
Long Term Debt Presented
Liability Account Group Component Unit Total
Serial Bonds $ 35,235,000 $ 1,375,000 $ 36,610,000
Compensated Absences 8,538,674 8,538,674
Total Long-Term Debt
Account Group $ 43.773,674 $ 1.375,000 $ 45.148,674
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
C. Detail Notes on all Funds and Account Groups (continued)
5. Indebtedness (continued)
Long-Term Debt (continued)
e) The following is a summary of changes in the long-term'liabilities for the period ended
December 31, 2014:
Bonds and Compensated
Notes Absences
Payable at beginning of
Year $ 39,185,000 $ 8,237,997
Additions
Deletions 2,575,000 300,677
Payable at end of
Year $ 36.610.000 $ 8.538.674
Additions and deletions to compensated absences are shown net since it is
impracticable to determine these amounts separately.
f) The following table summarizes the Town's future debt service requirements for
Serial Bonds as of December 31, 2014:
Year Ending Principal Interest
2015 2,600,000 "1,369;587
2016 2,560,000 1,284,704
2017 2,640,000 1,194,353
2018 2,705,000 1,095,440
2019 2,285,000 1,003,138
2019-2023 10,895,000 3,768,163
2024-2028 10,705,000 1,643,825
2029-2030 2,220,000 63,147
Totals $36.610.000 $11,422.357
6. Retirement System
Plan Description
The Town participates in the New York Employee's Retirement System, the New York
State Policemen's and Firemen's Retirement System and the Public Employee's Group
Life Insurance Plan (Systems). These are cost-sharing multiple-employer retirement
systems. The Systems provide retirement benefit, as well as death and disability
benefits.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
C. Detail Notes on all Funds and Account Groups (continued)
6. Retirement System (continued)
The Town of Southold participates in the New York State and Local Employees'
Retirement System (ERS), the New York State and Local Police and Fire Retirement
System (PFRS) and the Public Employees' Group Life Insurance Plan (Systems).
These are cost-sharing multiple-employer retirement systems. The Systems provide
retirement benefits as well as death and disability benefits. Obligations 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 Systems. The Comptroller shall adopt and may amend rules
and regulations for the administration and transaction of the business of the Systems
and for the custody and control of their funds. The Systems issue a publicly available
financial report that includes financial statements and required supplementary
information. That report may be obtained by writing to the New York State and Local
Retirement Systems, 110 State Street, Albany, NY 12244.
Fundinq Policy
The Systems are noncontributory except for employees who joined the New York State
and Local Employees' Retirement System after July 27, 1976, who contribute 3% of
their salary for the first ten years of membership and employees who joined on or after
January 1, 2010 (ERS) or January 9, 2010 (PFRS) who generally contribute 3% of their
salary for the entire length of service. Under the authority of the NYSRSSL, the
Comptroller annually certifies the,actuarially determined rates used in computing the
employers' contributions based on salaries paid during the Systems' fiscal year ending
March 31. Contributions for the current year and two preceding years were equal to
100% of the contributions required, and were as follows
ERS PFRS
2014 $2,266,683 $ 1,455,243
2013 $2,554,814 $ 2,073,878
2012 $2,066,738 $ 1,209,715
Chapter 260 of the Laws of 2004 of the State of New York was enacted that allows local
employers to bond or amortize a portion of their retirement bill for up to 10 years in
accordance with the following schedule:
• For' State fiscal year (SFY) 2004-05, the amount in excess of 7 percent of
employees' covered pensionable salaries, with the first payment of those pension
costs not due until the fiscal year succeeding that fiscal year in which the
bonding/amortization was instituted.
• For SFY 2005-06, the amount in excess of 9.5 percent of employees' covered
pensionable salaries.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
C. Detail Notes on all Funds and Account Groups (continued)
6. Retirement System (continued)
• For'SFY 2007-08, the amount in excess of 10.5 percent of employees' covered
pensionable salaries.
This law requires participating employers to make payments on a current basis, while
bonding or amortizing existing unpaid amounts relating to the System's fiscal- years
ending March 31, 2005 through 2008. The Town elected to make all payments on a
current basis.
Chapter 57 of the Laws of 2010 of the State of New York was enacted that allows local
employers to amortize a_portion of their retirement bill for 10 years in accordance with
the following stipulations:
• For State fiscal year 2010-11, the amount in excess of the graded rate of 9.5
percent of employees' covered pensionable salaries, with the first payment of
those pension costs not due until the fiscal year succeeding that fiscal year in
which the amortization was instituted.
• For subsequent State fiscal years, the graded rate will increase or decrease by
up to one percent depending on the gap between the increase or decrease in the
System's average rate and the previous graded rate.
• For subsequent State fiscal years in which the System's average rates are lower
than the graded rates, the employer will be required to pay the graded rate. Any
additional contributions made will first be used to pay off existing amortizations,
and then any excess will be deposited into a reserve account and will be used to
offset future increases in contribution rates.
This law requires participating employers to make payments on a current basis, while
amortizing existing unpaid amounts relating to the System's fiscal years when the local
employer opts to participate -in the program. The Town has elected to make its
payments on a current basis.
7. Post Retirement Benefits
In addition to providing pension benefits, the Town provides health insurance coverage
and survivor benefits for retired employees and their survivors. Substantially all Town
employees may become eligible for these benefits if they reach normal retirement age
while working for the Town. Health care benefits and survivors' benefits are provided
through either an insurance company or a self-funded plan whose premiums are based
on the benefits paid during the year.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
C. Detail Notes on all Funds and Account Groups (continued)
7. Post Retirement Benefits (continued)
The Town recognizes the cost of providing benefits by recording its share of insurance
premiums or the actual benefits paid from the General Fund as expenditure in the year
paid. During the year, $5,494,189 was paid on behalf of 115 retirees and 193 active
employees and is recorded as expenditures in the General Fund. The cost of providing
benefits for retirees is not separable from the cost of providing benefits for active
employees.
8. Compensatory 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 and sick' leave and compensatory absences accumulated by
governmental fund type employees have been recorded in the general long-term
obligations account group.
Accumulated vacation and sick leave are recorded as a long-term liability in the general
long-term debt account group if payable from-future financial resources, or as a fund
liability'and expenditures if payable from current resources.
D. Commitments and Contingencies
The Town is self-insured for medical insurance and general liability insurance. The amount
of medical claims outstanding at December 31, 2014 is $802,509. The amount of general
liability claims outstanding at December 31, 2014 is $7,793. These amounts have been
reserved against fund balance in the General Fund. The Town also has established an
insurance reserve in the General Fund for medical and liability claims the outcome of which
are presently unknown.
1. Landfill Closure and Post Closure Care Costs
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.
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
D. Commitments and Contingencies (continued)
1. Landfill Closure and Post Closure Care Costs (continued)
In addition to placement of the final cover on the landfill, state and federal regulations
presently require the Town to perform certain maintenance and monitoring functions at
the site for up to thirty years.
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.
2. Lease Commitments and Leased Assets
The Town leases property and ' equipment under operating leases. Total rental
expenditures on such leases for the fiscal year ended December 31, 2014 were
approximately $467,552. Future obligations over the primary terms of the Town's
leases as of December 31, 2014 are as follows:
2015 $ 333,311
2016, 155,310
2017 125,200
2018 & thereafter 230,447
Total $ 844.268
TOWN OF SOUTHOLD
Notes To Financial Statements
December 31, 2014
E. 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, 2014:
Condensed Balance Sheet
Assets and Other Debits Liabilities
Amounts
to be
Due From Property Provided for Other Bonds and
Current Primary Building& Long-Term Current Long-Term
Assets Government Equipment Debt Liabilities Liabilities
Fishers Island Ferry District $ 1,390,432 $ 169,524 $ 18,685,410 $ 1,375,000 $ 484,909 $1,375,000
Fishers Island Waste Mgt District 750,420 120,166 4,009,647 140,481
Cutchogue-New Suffolk Park Dist. 145,489 30,114 145,705 30,114
Southold Park District 152,364 70,495 1,155,726 70,495
Orient-East Marion Park District 37,698 8,604 432,985 8,604
Mattituck Park District 612,979 88,741 2,474,713 96,327
Orient Mosquito District 51,596 18.649 30.891 19.188
$3 140 978 � $26 93 ,077 1.375.000 �0 $�-
Condensed Statement of Revenues, Expenditures and Changes in Fund Balances
Excess.
(Deficiency)
Expenditures of Revenues
Capital Debt and
Revenues Current Outlay Service Expenditures
Fishers Island Ferry District $ 3,584,553 $ 2,695,511 $ 418,378 $ 338,574 $ 132,090
Fishers Island Waste Mgt District 600,396 648,998 350,516 (399,118)
Cutchogue-New Suffolk Park Dist. 141,041 75,858 48,131 17,052
Southold Park District 362,340 304,936 57,404
Orient-East Marion Park District 40,373 30,248 10,125
Mattituck Park District 460,918 340,480 28,771 91,667
Orient Mosquito District 85,022 69.712 15,310
$ 5 274.643 $ 4,165.743 $ 845,796
1_338
.574 (75.470)
TAX CERTIFICATE
I, Scott A. Russell, Supervisor of the Town of the Town of Southold, in the County of
Suffolk, New York (the "Issuer"), HEREBY CERTIFY and reasonably expect with respect to
the issuance on April 8, 2015 (the"Issue Date") of the Issuer's $729,000 Various Purposes Bond
Anticipation Note-2015 (the"Notes") as follows in this Tax Certificate (the "Tax Certificate").
Unless the context clearly requires otherwise, all capitalized terms not otherwise defined
herein shall have the meanings set forth in Exhibit A or in the Certificate of Determination (as
defined below),the Code or the Treasury Regulations.
ARTICLE I
GENERAL
1.1. Authorily of Si n� atory. I am an officer of the Issuer charged with the
responsibility for the execution, delivery, and issuance of the Notes and I am authorized to act
and I am acting for and on behalf of the Issuer in signing this Tax Certificate.
1.2. Authorization. The Notes are authorized to be issued pursuant to
applicable provisions of the laws of the State of New York, the Local Finance Law, the Charter
of the Issuer, the Certificate of Determination relating to the Notes executed as of April 8, 2015
(the "Certificate of Determination") and various bond resolutions (collectively, the "Note
Resolution").
1.3. Description of Notes. The Issuer represents that the Notes are described
as set forth in the Certificate of Determination.
1.4. Purpose of Tax Certificate. This Tax Certificate is made and delivered for
the purpose of establishing evidence of the expectations of the Issuer as of the Issue Date as to
future events regarding the amount and use of proceeds of the Notes. It is intended and may be
relied upon for purposes of Code §103 and Code §§141 through 150, and as a certification of
expectations described in Treasury Regulations §1.148-2(b)(2). This Tax Certificate is executed
and delivered as part of the record of proceedings in connection with the issuance of the Notes.
1.5. No Hedge Bonds. As described in Article II hereof, the proceeds of the
Notes will be used for refunding purposes. The Issuer certifies that (a) as of the issue date of the
Prior Notes (as defined below), the Issuer reasonably expected that at least eighty-five percent
(85%) of the spendable proceeds of the Prior Notes would be used to carry out the governmental
purposes of such issue within three (3) years of the issue date thereof and (b)not more than fifty
percent (50%) of the spendable proceeds of the Prior Notes was invested in investment property
which (i) was acquired with the amounts received as a result of investing original proceeds of
such issue and (ii) had a substantially guaranteed yield for four (4) years or more. For purposes
of the preceding sentence, the Prior Notes includes, as applicable, each issue of obligations
refunded by the Prior Notes.
1.6. Reasonable Expectations. This Tax Certificate sets forth the facts,
estimates and circumstances now in existence which form the basis for the Issuer's expectation
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that the proceeds of the Notes will not be used in a manner that would cause the Notes to be
"arbitrage bonds" under Code §148 or "private activity bonds" under Code §§103 and 141. 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.
1.7. Sale of the Notes. The Notes are being delivered on the Issue Date to
Capital One Public Funding, LLC, Melville, New York (the "Purchaser"). The Notes are being
purchased by the Purchaser in a direct, private placement transaction and the terms of the sale
and purchase have been established through negotiations between the Purchaser and the Issuer in
an arm's-length transaction. The Purchaser will not receive a fee in connection with its purchase
of the Notes. The Purchaser has advised the Issuer that it is purchasing the Notes for its own
account and not for the purpose of resale to the general public or otherwise. The Purchaser is
delivering good funds in exchange for the Notes on the date hereof.
1.8. Single Issue. All the Notes were sold at the same time, pursuant to the
same plan of financing, and are reasonably expected to be paid from substantially the same
source of funds. No other tax-exempt obligations have been or will be sold within fifteen (15)
days of the sale of the Notes pursuant to the same plan of financing as the Notes that are
reasonably expected to be paid from substantially the same source of funds as the Notes.
Accordingly, the Notes are treated as a single issue of obligations for federal income tax
purposes and no other tax-exempt obligations of the Issuer will be treated as part of the same
issue as the Notes for purposes of complying with federal tax law requirements. For purposes of
this Section, obligations are considered sold on the earlier of the date a commitment letter, bond
purchase agreement or contract of purchase is executed.
1.9. No Federal Guarantee. The Issuer represents that, except for the Gross
Proceeds of the Notes which are (a) invested during the temporary periods referred to in
Article IV, (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 511(a) of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, or any successor provision to Section 2113(d)(3) of the federal Home
Loan Bank Act, as amended:
(a) No portion of the payment of principal of or interest on the Notes is or will
be guaranteed directly or indirectly by the United States or any agency or instrumentality thereof
(herein"federally guaranteed"); and
(b) No portion of the Gross Proceeds of the Notes in excess of five percent
(5%) of such Gross Proceeds is or will be (i)used in making loans with respect to which the
payment of principal or interest with is to be federally guaranteed, or (ii)invested directly or
indirectly in federally insured deposits or accounts.
For purposes of this Tax Certificate, generally, Gross Proceeds consist of Sale Proceeds,
Transferred Proceeds, if any, Investment Proceeds and Replacement Proceeds, if any, of the
Notes.
2
2442450.1 034513 TAGMT
1.10. Tax Representation. The Issuer will comply with all the procedures and
provisions set forth herein, and will do and perform all acts and things necessary and within its
reasonable control in order to assure that interest paid on the Notes shall be excluded from gross
income of the owners thereof for the purpose of federal income taxation.
1.11. Additional Information. The Issuer will provide such other information as
may be required to assure the exclusion from gross income of interest on the Notes for federal
income taxation purposes.
1.12. Noncompliance. The Issuer shall perform each of the representations
undertaken by it in this Tax Certificate unless, in the written opinion of Bond Counsel,
noncompliance therewith will not cause interest on the Notes to be included in gross income for
purposes of federal income taxation.
1.13. Reliance by Bond Counsel. The representations and certifications of the
Issuer expressed in this Tax Certificate may be relied upon by Bond Counsel in connection with
the rendering of any opinion with respect to the Notes.
1.14. Reliance on Other Parties. In making its representations and certifications
in this Tax Certificate and in establishing its expectations regarding uses of Gross Proceeds of
the Notes to assure compliance with Code §§103 and 141 through 150 generally, the Issuer has
relied on representations and certifications of other parties referenced in this Tax Certificate and
the Exhibits hereto with respect to the certified matters. Based on the various roles and
responsibilities of such other parties with respect to the certified matters, the Issuer believes that
such reliance is reasonable and prudent. The Issuer is unaware of any fact or circumstance that
would cause it to question the accuracy or reasonableness of any such certification. These
certifications include, without limitation: (i) the certificate of Purchaser, attached hereto as
Exhibit E, and (ii) the financing schedules (the "Financing Schedules"), which are attached
hereto as Exhibit F.
1.15. IRS Form 8038-G. Certain information provided by the Purchaser and the
Issuer's financial advisor have been provided to the Issuer and Bond Counsel for the purpose of
completing the IRS From 8038-G. The Issuer represents that the information contained in the
IRS Form 8038-G is consistent with the computations, schedules and information provided by
the Purchaser and the Issuer's financial advisor. The Issuer has reviewed the IRS Form 8038-G
with respect to the Notes and to the best of its knowledge the information contained therein is
true, accurate and complete. The Issuer acknowledges that Bond Counsel prepared the IRS Form
8038-G on behalf of the Issuer based solely on the information contained in this Tax Certificate
and information provided by the Purchaser and/or the Issuer's financial advisor. The Issuer will
arrange for the filing of IRS Form 8038-G with respect to the Notes by the 15th day of the second
month after the calendar quarter in which the Notes are issued.
1.16. Rebate; Small Governmental Issuer. References to the Rebate Fund and
any obligations of the Issuer to make rebate payments apply only in the event that the Notes fail
to qualify for the "small governmental issuer" exception to rebate, contained in Code
§148(f)(4)(D) and Treasury Regulations §1.148-8. See Section 5.2(e)(vi)hereof.
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ARTICLE II
USE OF PROCEEDS
2.1. Purpose(s)of the Notes. The proceeds of the Notes will be used to redeem
the Issuer's $915,000 Various Purposes Bond Anticipation Note-2014 maturing on April 9, 2015
(the "Prior Notes"), which was heretofore issued to finance and refinance all or a portion of the
costs of the Projects (as defined below).
The Issuer will use moneys other than proceeds of Notes or other tax-exempt obligations
to pay costs of issuance of the Notes (including Purchaser's compensation).
The portion of the Prior Notes to be current refunded with the proceeds of the Notes are
collectively referred to herein as the "Refunded Notes."
2.2. Debt Service Savings. [Intentionally Omitted]
2.3. Proceeds of Prior Notes. (a) The proceeds of the Prior Notes were used
to: (a)refinance certain Bond Anticipation Notes issued by the Issuer, the proceeds of which
were used to finance and refinance all or a portion of the costs of construction, reconstruction
and improvement of various buildings and capital facilities of the Issuer (as summarized in
Exhibit C attached hereto) (collectively, the "Projects"), and (b) pay costs of issuing the Prior
Notes.
(b) The Issuer represents that Private Use (as defined herein), if any, with
respect to the proceeds of the Prior Notes as certified in the tax certificate executed with respect
to the Prior Notes has not changed since the date of issue thereof.
2.4. Amount and Application of Sale Proceeds. The Sale Proceeds will be
applied as follows:
Sources Total
Par Amount $729,000.00
Original Issue Premium 0.00
Total Sources $729,000.00
Uses
Redemption of Refunded Notes $729,000.00
Additional Proceeds 0.00
Total Uses $729,000.00
2.5. Excess or Unused Sale Proceeds of the Notes. The Issuer expects the
amount of proceeds of the Notes required to refund the Refunded Notes to be $729,000.00
(including costs of issuance). To the extent not so used, such proceeds will be (i) applied to the
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next payment of principal of or interest on the Notes, or (ii) used for such other purpose as is
approved in writing by Bond Counsel.
ARTICLE III
USE OF PROJECTS AND LIMITATIONS ON PRIVATE ACTIVITY
3.1. Ownership/Lease/Sale. The Issuer owns all the Projects. While the Notes
remain outstanding, all of the Projects will be owned by the Issuer or another Governmental Unit
and will not be owned by or leased to any person who is not a Governmental Unit. The Projects
will not (except to the extent that any portion of the Projects were financed with grants, if any)
be sold or otherwise disposed of, in whole or in part, except for incidental sales of surplus items
the proceeds of which will not constitute net operating profits or net capital profits to the Issuer,
and minor parts or portions as may be disposed of in the ordinary course of business due to
normal wear and tear, obsolescence or depreciation or similar purposes, prior to the final
maturity date of the Notes.
3.2. No Private Loans. While the Notes remain outstanding, none of the
proceeds of the Notes are being or will be used, directly or indirectly, to make loans to persons
other than a Governmental Unit while the Notes remain outstanding. The Issuer will not make
any private loans from the proceeds of the Notes after the Issue Date unless the Issuer has
received a written opinion of Bond Counsel that such private loan will not adversely affect the
exclusion of the interest on the Notes from gross income for purposes of federal income taxation.
3.3. Limitations on Private Use. At all times while the Notes remain
outstanding, less than the lesser of$15,000,000 or ten percent (10%) of either: (a)the aggregate
amount of the proceeds of the Notes are used or expected to be used, directly or indirectly, in a
trade or business carried on by a person other than a Governmental Unit ("Private Use") or
(b)the aggregate present value of the debt service on the Notes during the term thereof is
expected to be, under the terms of the Notes or any underlying arrangement, directly or
indirectly, secured by any interest in property used or to be used for Private Use or in payments
in respect of property used or to be used for Private Use or is to be derived from payments,
whether or not to the Issuer, in respect of property or borrowed money used or to be used for
Private Use. Payments by a person for use of proceeds do not include the portion of any
payment that is properly allocable to the payment of ordinary and necessary expenses (as defined
under Code §162) directly attributable to the operation and maintenance of the financed property
used by that person. For this purpose, general overhead and administrative expenses are not
directly attributable to those operations and maintenance.
3.4. Unrelated/Related Disproportionate Use. At all times while the Notes
remain outstanding, less than the lesser of$15,000,000 or five percent (5%) of either: (a) the
proceeds of the Notes 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 Projects, including any private loan financing described in Section 3.2
hereof which meets this test or (b) the aggregate present value of the debt service on the Notes
during the term thereof is expected to be, under the terms of the Notes or any underlying
arrangement, directly or indirectly, secured by any interest in property used or to be used for
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Private Use or in payments in respect of property used or to be used for Private Use or is to be
derived from payments, whether or not to the Issuer, in respect of property or borrowed money
used or to be used for Private Use. Payments by a person for use of proceeds do not include the
portion of any payment that is properly allocable to the payment of ordinary and necessary
expenses (as defined under Code §162) directly attributable to the operation and maintenance of
the financed property used by that person. For this purpose, general overhead and administrative
expenses are not directly attributable to those operations and maintenance. For purposes of this
Tax Certificate, proceeds of the Notes are allocable to a disproportionate related Private Use to
the extent that the proceeds of the Notes which are to be used to finance property used by a
nongovernmental person in a trade or business which is related to the governmental use of the
property exceeds the proceeds of the Notes which are to be used for the governmental use to
which such Private Use relates.
3.5. Private Use Defined. (a) For purposes of Sections 3.3 and 3.4 hereof,
Private Use consists of any agreement, contract or other arrangement including, without
limitation, leases, management contracts, guarantee contracts, take or pay contracts, put or pay
contracts, output contracts or research contracts which provides for use of any portion of the
Projects by a person(s) who is not a Governmental Unit on a basis different than the general
public. The Issuer will not enter into any such contract or arrangement unless the Issuer has
obtained an opinion from Bond Counsel that such contract or arrangement does not adversely
affect the exclusion of interest on the Notes from gross income for purposes of federal income
taxation. None of the Projects were financed or are being refinanced for use by any specific user
(other than the Issuer).
(b) Use by State or Local Governmental Units. The Projects, including
service or capacity from the Projects, if any, may be used by or on behalf of a Governmental
Unit provided that there is no transfer or flow-through of such use to any person or entity
carrying on any trade or business that does not constitute General Public Use (as defined in
subsection(c) below).
(c) General Public Use. The Projects, including service or capacity from the
Projects, if any, may be used by any person or entity, including any person or entity carrying on
any trade or business without any Private Use arising therefrom, if such use constitutes General
Public Use. "General Public Use" is any arrangement providing for use that is available to the
general public at either(i)no charge, or(ii) on the basis of rates that are generally applicable and
uniformly applied. For this purpose, rates may be treated as generally applicable and uniformly
applied even if(i) different rates apply to different classes of users, such as volume purchasers, if
the differences in rates are customary and reasonable, or (ii) a specially negotiated rate
arrangement is entered into, but only if the user is prohibited by federal law from paying the
generally applicable rates, and the rates established are as comparable as reasonably possible to
the generally applicable rates. The Issuer imposes generally applicable and uniform rates and
charges, if any, on all users of the facilities, service or capacity of the Projects pursuant to the
schedules of rates and charges adopted by the Issuer from time to time.
(d) No Priority Rights or Other Preferential Benefits. The Projects, including
service or capacity from the Projects, if any, will not be used by any person or entity under any
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arrangement that conveys priority rights or other preferential benefits except as may be permitted
by subsection(b) above.
(e) 200 Days General Public Use Arrangements. An arrangement is not
treated as General Public Use if the term of the use under the arrangement, including all renewal
options, is not greater than two hundred (200) days. For this purpose, a right of first refusal to
renew use under the arrangement is not treated as a renewal option if(i)the compensation for the
use under the arrangement is redetermined at generally applicable, fair market value rates that
are in effect at the time of renewal, and (ii) the use of the financed property under the same or
similar arrangements is predominantly by natural persons who are not engaged in a trade or
business.
(f) 100 Days Limited General Public Use Arrangements. The Projects,
including service or capacity from the Projects, if any,may be used by any person or entity under
any arrangement for use (other than as an owner) for a term (including renewal options) not
longer than one hundred (100) days, provided that the arrangement would be General Public Use
except that it is not available on the same basis for use by natural persons because generally
applicable and uniformly applied rates are not reasonably available to natural persons not
engaged in a trade or business and the Projects are not financed for the principal purpose of such
Private Use.
(g) 50 Days Negotiated Arm's-Length Use Arrangements. The Projects,
including service or capacity from the Projects, if any, may be used by any person or entity under
any arrangement (other than as an owner) for a term (including renewal options) not longer than
fifty (50) days, provided the arrangement is negotiated at arm's-length, the compensation paid
for the use is at fair market value and the Projects are not financed for the principal purpose of
such Private Use.
The term limits described in each of the three foregoing contractual arrangements
(i.e., paragraphs (e), (f) and (g) above) are not required to relate to consecutive days (e.g., if the
contract provides for use of a bond-financed facility for ten (10) days per year for six (6) years,
the contract could not comply with the requirements applicable to contractual arrangements set
forth in paragraph(g) above,because the term of the contract would exceed fifty(50) days.)
(h) Incidental Use Arrangements. The Projects may be used by any person or
entity where the use is incidental if, except for vending machines, pay telephones, kiosks and
similar uses, the use does not involve the transfer of possession and control of space separated
from other areas of the facility by walls,partitions, barriers and the like,the nonpossessory use is
not functionally related to any other use of such portion of the Project by the same person (other
than a different nonpossessory use) and all nonpossessory uses do not in the aggregate exceed
2.5%of the Projects or such facility.
3.6. Management and Operations Contracts. The Issuer manages and operates
all of the Projects. The Issuer will not enter into any management contract or operating
agreement with any person or entity for management services or operating activities to be
provided at or with respect to the Projects, while the Notes remain outstanding, except: (a) with
respect to contracts or arrangements which do not constitute Private Use of the Projects under
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Code §141(b), (b) with respect to contracts or arrangements which satisfy the "safe harbors" set
forth in IRS Rev. Proc. 97-13, 1997-1 C.B. 632, as amended or supplemented from time to time
(each a "Safe Harbor Management Contract") as summarized in Exhibit D attached hereto, (c)
with respect to contracts or arrangements that do not give rise to use of Note-financed property
by a non-Governmental Unit of more than the amount of such non-qualified use permitted by the
Code, as measured in the aggregate, or(d) in the event that the Issuer receive an opinion of Bond
Counsel that such contracts or arrangements will not adversely affect the exclusion of the interest
on the Notes from gross income for federal income taxation purposes.
3.7. Monitoring and Measurement of Private Activity. (a) The Issuer
represents that it will monitor the amount of Private Use of the Projects to ensure that the
aggregate amount of such use of the Projects will not exceed the applicable limits described in
this Article. The Issuer has established or will establish procedures for monitoring the amount of
Private Use at the Projects. The Issuer will consult with Bond Counsel and other legal counsel
and advisers as necessary to determine whether, and to what extent, if as a result of any Private
Use of the refinanced facilities any remedial action is required under Treasury Regulation
§1.141-12.
(b) The amount of Private Use of a Project is determined according to the
average percentage of Private Use of such Project during the measurement period. To the extent
that the Projects are owned by the Issuer, the measurement period with respect to a Project
(i)begins on the later of the Issue Date of the Notes or the placed-in-service date of the Project,
and (ii) ends on the earlier of the expiration date of the economic life of the Project or the last
maturity of the Notes. The average percentage of Private Use is the average of the percentages
of Private Use during the one-year periods within the measurement period and is to be
determined,with appropriate adjustments, as provided in the Treasury Regulations.
(c) The Issuer also agrees to monitor the amount of private payments and
private security at each Project to ensure that the present value of the aggregate amount of
private payments and private security at the Projects financed with the proceeds of the Notes will
not exceed: (i) five percent (5%) with respect to unrelated or related and disproportionate
Private Use described in Section 3.4 above, and (ii) ten percent (10%) with respect to total
Private Use described in Section 3.3 above, of the present value of the aggregate debt service on
the Notes. Such present values are to be determined, with appropriate adjustments, as provided
in the Treasury Regulations.
(d) The Issuer will advise Bond Counsel not less than annually of any change
in the amount of. (i) unrelated or related and disproportionate Private Use described in
Section 3.4 above, (ii) Private Use described in Section 3.3 above, and (iii) the corresponding
amount of private payments and private security arising from any contract or other arrangement
including, without limitation, ownership, leases, management and operation contracts, research
agreements, guarantee contracts, take or pay contracts, put or pay contracts, or other output
contracts or any other action or event described in this Article.
3.8. No Pooled Loan Financings. None of the proceeds of the Notes will be
used directly or indirectly to make or finance loans to two or more ultimate borrowers (including
loans referred to in Section 3.2 hereof and loans to Governmental Units).
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ARTICLE IV
ARBITRAGE
4.1. Issue Price. The Notes are being purchased in a direct, private placement
transaction. The purchase price being paid by the Purchaser is equal to $729,000.00 (which
represents the aggregate stated principal amount of the Notes).
4.2. Note Yield and Investment Yield. (a) When used in this Tax Certificate,
the term ". i�eld" refers to yield computed by the actuarial or present value method using a
360-day year and semiannual compounding, and means that discount rate which, when used in
computing the present value of all payments of principal and interest to be paid on an obligation,
produces an amount equal to the Issue Price thereof in the case of the Notes and the purchase
price in the case of investments purchased with Gross Proceeds of the Notes.
(b) The Notes constitute a Fixed Yield Issue. The yield on the Notes has been
computed by the Purchaser, in compliance with Treasury Regulations §1.148-4, to be 1.266015%
(the "Note Yield"). The Note Yield will not be affected by subsequent unexpected events,
except to the extent provided in Treasury Regulations §1.148 4(h) when and if the Issuer enters
into a Qualified Hedge or into any transaction transferring,waiving or modifying any right that is
part of the terms of the Notes. The Issuer will consult with Bond Counsel prior to entering into
any of the foregoing transactions.
(c) None of the Notes are subject to mandatory, contingent or optional
redemption.
(d) The Issuer has not entered into any Qualified Hedge with respect to the
Notes.
(e) No amount has been or will be paid by or on behalf of the Issuer to any
entity as a payment for a Qualified Guarantee with respect to the Notes.
4.3. Temporary Periods. The Issuer will not invest the Gross Proceeds of the
Notes in Investments at yields that are materially higher, as that term is defined in Treasury
Regulations §1.148-2(d) ("Materially Higher'), than the Note Yield except as set forth in this
Section or Article VI below.
(a) Temporary Period for Current Refunding. Proceeds of the Notes used to
current refund the Refunded Notes may be invested without Yield Restriction for a period not to
exceed ninety (90) days from the date hereof and, thereafter, shall be invested at a Yield not in
excess of the Yield on the Notes plus one-eighth of one percentage point('/8%).
(b) Temporary Period for Investment Earnings. Except as otherwise provided
in this Section, investment earnings and all amounts received by the Issuer from the investment
of Gross Proceeds of the Notes may be invested without Yield Restriction for a one (1) year
period beginning on the date of receipt but in no event longer than the temporary period
applicable to the source of such investment.
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(c) Temporary Period for Bona Fide Debt Service Fund. As further discussed
in Section 7.2 below, amounts deposited in a Bona Fide Debt Service Fund may be invested
without Yield Restriction for a period of thirteen (13) months from the date of deposit in such
fund.
(d) Minor Portion. A minor portion of the Gross Proceeds of the Notes may
be invested without Yield Restriction in an amount not exceeding the lesser of(i) $100,000 or
(ii) five percent(5%) of the Sale Proceeds.
4.4. No Transferred Proceeds. As of the date hereof, all of the proceeds of the
Prior Notes (including any proceeds of notes or bonds refunded thereby, if any) have been
expended as of the Issue Date and, therefore, no proceeds of the Refunded Notes will become
Transferred Proceeds of the Notes on the date when a portion of the principal of the Refunded
Notes is redeemed from the proceeds of the Notes.
4.5. Escrow Deposit Fund. [Intentionally Omitted]
4.6. Current Refunding and Redemption Date. The proceeds of the Notes will
be spent within ninety (90) days after the Issue Date to retire or pay debt service and redemption
premium, if any, on the Refunded Notes. The redemption date of the Refunded Notes is April
9, 2015.
4.7. Yield Reduction Payments. Notwithstanding any of the provisions in this
Tax Certificate that require Sale Proceeds of the Notes and investment earnings thereon to be
invested at a yield not in excess of the Note Yield,the yield on certain investments acquired with
proceeds of the Notes will not be considered to be higher than the applicable yield limitation
described herein if the Issuer makes or causes to be made Yield Reduction Payments to the
United States Treasury at the time and in the amounts described in Treasury Regulations
§1.148-5(c). The Issuer will consult with Bond Counsel prior to making any investments in
reliance on its eligibility to make Yield Reduction Payments.
4.8. Yield Restricted Money. Amounts that must be Yield Restricted, if any,
will be invested in either: (i) Nonpurpose Investments at a fair market price which produces a
yield not Materially Higher than the Note Yield, (ii) SLGS which produce yield not Materially
Higher than the Note Yield, or(iii) Tax-Exempt Obligations.
4.9. Universal Cap. (a) On each Valuation Date, the Issuer shall value the
Universal Cap and the Nonpurpose Investments allocable to the Notes thereunder. Nonpurpose
Investments in a Bona Fide Debt Service Fund do not reduce the aggregate value of Nonpurpose
Investments that may be allocated to the Notes under the Universal Cap. Nonpurpose
Investments cease to be allocated to the Notes 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 Notes under the Universal Cap. To the extent
Nonpurpose Investments cease to be allocated to an issue and the value of the Universal Cap
exceeds the value of the remaining Nonpurpose Investments allocated to such issue, other
Nonpurpose Investments may become allocated to the issue, provided that such Nonpurpose
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Investments are not already properly allocated to another issue and that such allocation does not
cause the value of Nonpurpose Investments allocated to the Notes to exceed the Universal Cap.
Generally, if Gross Proceeds of the Notes invested in Nonpurpose Investments exceed the
Universal Cap on a Valuation Date, such Nonpurpose Investments cease to be allocated to the
Notes in the following order:
(i) amounts allocable to Replacement Proceeds,
(ii) amounts allocable to Transferred Proceeds,
(iii) amounts allocable to Sale Proceeds and Investment Proceeds.
(b) Amounts are allocable to only one issue at a time as Gross Proceeds.
Amounts that are original proceeds or transferred proceeds allocable to an issue must be so
allocated to that issue and may not be allocated instead as replacement proceeds to another issue.
Amounts cease to be original proceeds or transferred proceeds allocated to an issue only when
they are properly allocated to an expenditure for a governmental purpose, when they become
transferred proceeds of another issue or when they cease to be allocated to an issue by operation
of the Universal Cap. Where a Nonpurpose Investment ceases to be allocated to the Notes, such
Nonpurpose Investment is subject to 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 Notes.
(c) Notwithstanding anything herein to the contrary, the failure to perform the
determination of Nonpurpose Investments allocable to the Notes as of a Valuation Date shall not
be considered a violation of this provision if the value of Nonpurpose Investments allocated to
the Notes did not exceed the value of the Notes outstanding on such date.
4.10. No Prohibited Payments. The Issuer has not entered into and will not
enter into any transaction to reduce the Yield on the Investment of the Gross Proceeds of the
Notes 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 Note Yield had not been
relevant to either party.
4.11. No Overissuance. The proceeds of the Notes, including investment
proceeds,will not exceed the amount necessary for the purpose(s) of the Notes.
4.12. Disposition Receipts. The Issuer will consult with Bond Counsel as to
how to invest and dispose of any amounts received from the condemnation, insurance, or
disposition of any part of the Projects.
4.13. No Replacement Proceeds. No Replacement Proceeds (as defined in
Treasury Regulations §1.148-1(c)) are expected to be created as a result of issuing the Notes, as
the weighted average maturity of the Notes as set forth in Exhibit F attached hereto does not
exceed one hundred twenty percent (120%) of the remaining weighted average economic life of
the Projects as set forth in Exhibit C attached hereto. The average economic life of the Projects
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are assumed to have been assigned the "period of probable use" as defined under the State of
New York Local Finance laws. The Issuer confirms that the Notes are outstanding for a period
that is reasonably required to accomplish the governmental purpose of financing the Projects
with the proceeds of the Notes.
4.14. Fair Market Value. The Issuer will not acquire Nonpurpose Investments
at other than an arm's-length,Fair Market Value price.
ARTICLE V
REBATE
5.1. Rebate Compliance. The Issuer understands that the continued exclusion
of interest on the Notes from gross income for purposes of federal income taxation depends, in
part, upon compliance with the arbitrage limitations imposed by Code §148, including the rebate
requirements described in this Article. The Issuer shall do and perform all acts and things
necessary in order to assure that the arbitrage and rebate requirements of Code §148 are met.
5.2. Calculation of Rebate Amount. Code §148(f) requires the payment to the
United States of the excess of the amount earned on the investment of Gross Proceeds of the
Notes in Nonpurpose Investments over the amount that would have been earned had the amount
so invested been invested at a rate equal to the Note Yield, together with any income attributable
to such excess. Except as provided below, all Gross Proceeds of the Notes are subject to this
requirement. In order to meet the rebate requirement of the Code, the Issuer will take the
following actions:
(a) Record of Investments. The Issuer will record the date of receipt, amount
and source of any Gross Proceeds of the Notes, e.g., Sale Proceeds, Replacement Proceeds, loan
repayments, investment earnings. For each Nonpurpose Investment acquired with or allocated to
Gross Proceeds of the Notes, 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 of the Notes, its Value on the date the Nonpurpose
Investment is allocated to Gross Proceeds of the Notes, accrued interest due on its purchase date
or allocation date, its face amount, its coupon rate, its yield, the frequency of its interest
payment, its disposition price (excluding any broker or dealer's commission or discount), the
accrued interest due on its disposition date and its disposition date. In addition, the Issuer will
record the date and amount of all expenditures made with Gross Proceeds of the Notes, including
the payment of any Rebate Amount(as defined below).
(b) Method for Computing Yield. For each Computation Period, the Issuer
shall determine, if required, the Note Yield computed as required by Treasury_Regulations
§1.148-4(b). When expressed as a decimal, yield will be accurate to at least four (4) decimal
places.
(c) Eli ig bility of Qualified Guarantee. Payments for a Qualified Guarantee
will be eligible to be taken into account as Issue Payments for purposes of computing the Note
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Yield only if the payment for the guarantee represents a reasonable payment for a Qualified
Guarantee.
(d) Computation of Rebate Amount Subject to the special rules set forth in
paragraph (e) of this Section,the Issuer will determine the Rebate Amount on each Computation
Date. The "Rebate Amount" as of any Computation Date is the excess of the Future Value of all
receipts with respect to Nonpurpose Investments over the Future Value of all payments with
respect to the purchase of Nonpurpose Investments or the allocation of such investments to the
proceeds of the Notes, 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 the Rebate Amount. The Issuer shall determine the
nonpurpose receipts and nonpurpose payments as described below.
(i) Receipts. Receipts with respect to Nonpurpose Investments include
(A) actual receipts, amounts actually or constructively received with respect to an
investment, reduced by Qualified Administrative Expenses; (B)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); (C) Computation Date Receipts, the Market Value (Present Value, in the
case of Investment Contracts and fixed rate investments) of all Nonpurpose Investments
allocated to the issue at the close of business on a Computation Date; and (D)rebate
receipts, any recovery of an overpayment of rebate.
(ii) Payments. Payments with respect to Nonpurpose Investments include
(A) direct payments, the amount of Gross Proceeds of the issue directly used to purchase
the investment, including Qualified Administrative Expenses; (B) constructive payments,
the Value of an investment allocated to (but not directly purchased with) Gross Proceeds
on the date so allocated; (C)Nonpurpose Investments allocated to an issue at the end of
the preceding Computation Period, at the value of the investments at the beginning of the
computation period; (D)rebate payments, payments of rebate amounts when due and
Yield Reduction Payments on Nonpurpose Investments; and (E)the Computation Date
Credit.
(e) Rebate Exceptions. In connection with the rebate requirement the
following exceptions shall apply to the Notes.
(i) $100,000 Bona Fide Debt Service Fund Gross Earnings Exception to
Rebate. Notwithstanding anything in this Section 5.2 to the contrary, if the gross
earnings from the investments held in a Bona Fide Debt Service Fund for the bond year
in question, as determined under paragraph (c) above, are less than $100,000 then any
amount earned on such Bona Fide Debt Service Fund shall not be taken into account in
determining the Rebate Amount. In this regard, the $100,000 earnings limitation is
deemed satisfied if the annual debt service on the issue does not exceed $2,500,000. For
purposes of this paragraph,the term "gross earnings"means the aggregate amount earned
on the Nonpurpose Investment in which the Gross Proceeds deposited to a Bona Fide
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Debt Service Fund are invested, including amounts earned on such amounts if allocated
to a Bona Fide Debt Service Fund.
(ii) Bona Fide Debt Service Fund Exception to Rebate. None of the Gross
Proceeds of the Notes qualify for this exception to rebate.
(iii) Six-Month Spending Exception to Rebate. Notwithstanding anything in
this Section to the contrary, if all of the Gross Proceeds of the Notes held in any fund or
account (other than the Gross Proceeds held in a Bona Fide Debt Service Fund or any
reasonably required reserve fund), including investment earnings received with respect to
such Gross Proceeds but excluding investment earnings received with respect to such
Gross Proceeds held in the Bona Fide Debt Service Fund, have been expended for the
governmental purpose of the Notes within six (6) months (or ninety-five percent (95%)
within six (6) months and one hundred percent (100%) within one year) after the Issue
Date,then the only Nonpurpose Investments to be taken into account in the calculation of
the Rebate Amount are Nonpurpose Investments acquired with or allocated to Gross
Proceeds of the Notes held in any reasonably required reserve fund and to any Gross
Proceeds of the Notes arising after such six (6) months which were not reasonably
anticipated as of the Issue Date. The existence of sinking fund or pledged fund proceeds
or the expectation that such proceeds will arise within six (6) months of the Issue Date
will make the six-month spending exception to rebate inapplicable. For purposes of this
exception, Gross Proceeds used to pay principal of the Notes are not treated as expended
on the governmental purpose of the Notes. This exception is available for the Gross
Proceeds of the Notes and the Issuer expects the requirements of this exception to rebate
to be met with respect to the Gross Proceeds of the Notes.
(iv) Eighteen-Month Spending Exception to Rebate. None of the Gross
Proceeds of the Notes qualify for this spending exception to rebate.
(v) Two-Year Construction Bond Exception to Rebate. None of the Gross
Proceeds of the Notes qualify for this spending exception to rebate.
(vi) Small Governmental Issuer Exception to Rebate. The Notes are intended
to qualify for the "small governmental issuer" exception to rebate, contained in Code
§148(f)(4)(D) and Treasury Regulations §1.148-8. The Issuer represents the following:
(w) the Issuer is a Governmental Unit with general taxing powers; (x) none of the
proceeds of the Notes will be used in any manner that cause the Notes to be Private
Activity Bonds; (y) at least ninety-five percent (95%) of the net proceeds of the Notes
will be used for local governmental activities of the Issuer; and (z) the aggregate face
amount of all Tax-Exempt Obligations (other than Private Activity Bonds) issued by the
Issuer (and any subordinate entities thereof) during the current calendar year is not
expected to exceed$5,000,000.
(A) Aggregation of Issues. For purposes of Section 5.2(e)(vi)(z) above, the
Issuer, together with any entities which have issued bonds or notes on
behalf of the Issuer and any entities subordinate to the Issuer, are treated
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as one entity. All Tax-Exempt Obligations issued in this current calendar
year by such entities are counted toward the $5,000,000 limitation.
(B) Current Refundings. Issues issued to currently refund any Tax-Exempt
Obligation, to the extent the amount of the refunding bond does not
exceed the outstanding amount of the refunded bond, shall not be taken
into account in determining the $5,000,000 limitation.
(C) No Abuse. The Issuer was not formed or availed of to avoid the
purposes of the $5,000,000 size limitation and all entities that would
benefit from the avoidance are treated as one issuer.
(D) Amount of Notes Issued. For purposes of Subection 5.2(e)(vi)(z) above,
the term "aggregate face amount" means aggregate stated principal
amount of the Notes, unless there is more than a de minimis amount of
original issue discount or premium, in which case "aggregate face
amount" means the "aggregate issue price" of the Notes (determined
without regard to pre-issuance accrued interest). The term "de minimis
amount" means an amount of discount or premium that does not exceed
two percent (2%) of the stated redemption price at maturity, plus any
original issue premium attributable exclusively to reasonable
underwriters' compensation.
(E) Exclusion of Non-Outstanding Bonds or Notes. For purposes of
Subsection 5.2(e)(vi)(z) above, no Tax-Exempt Obligation shall be taken
into account if it is redeemed within the current calendar year by a later
current refunding issue or if it is not outstanding at the date of issue of the
Notes.
(F) Not Exceeding Amount Allocated. In addition,to the extent the Issuer has
been allocated a portion of the $5,000,000 limitation of one or more
Governmental Units, the Issuer does not expect to issue more Notes than
the amount(s) it has been allocated.
5.3. Rebate Options. With respect to the investment of the proceeds of the
Notes,the Issuer will:
(a) - comply with the requirements of the six-month spending exception to
rebate, the eighteen-month spending exception to rebate, the two-year construction bond
exception to rebate or the small governmental issuer exception to rebate, and if it is unable to
comply with any of such requirements, rebate arbitrage earnings in accordance with the
provisions of this Article;
(b) invest all Gross Proceeds of the Notes at all times from the Issue Date
until expended in investments not constituting investment property for purposes of Code §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 Code §103
and is not a preference item for purposes of the alternative minimum tax imposed by Code §55;
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(c) invest all Gross Proceeds of the Notes in obligations having a yield that
does not exceed the Note Yield; or
(d) comply with the rebate provisions described in this Article.
5.4. Payment to the United States. (a) Unless the Notes are redeemed prior to
such time, the Issuer will pay to the United States, not later than sixty (60) days after each
Installment Computation Date, an amount which, when added to previous rebate payments made
with respect to the Notes, is equal to not less than ninety percent (90%) of the Rebate Amount.
The Issuer will pay to the United States, not later than sixty (60) days after the Notes are fully
paid or redeemed, one hundred percent (100%) of the Rebate Amount. If the final rebate
payment is not made within sixty (60) days after the Final Computation Date, interest on the
Rebate Amount will be deemed to accrue at the underpayment rate under Code §6621,beginning
on the date the Rebate Amount is due and ending on the date ten(10) days before it is paid.
(b) The Issuer will mail each payment to the Internal Revenue Service Center,
Ogden, Utah 84201 or such other address as the Treasury Regulations may require. Each
payment shall be accompanied by the Form 8038-T (or other prescribed form) and such
information and documents as the Treasury Regulations may require.
5.5. Rebate Regarding Prior Notes. The Issuer understands that it must make a
final rebate accounting and submit a Form 8038-T, if applicable, to the Internal Revenue Service
with any required rebate or penalty payments within sixty (60) days of the final redemption date
of each issue of the Prior Notes being refunded with proceeds of the Notes.
5.6. Engagement of Experts. The Issuer shall, before the date which is the
earlier of(i) the fifth (5t') anniversary of the Issue Date or (ii) the date of the last redemption of
the Notes, engage Hawkins Delafield & Wood LLP or another firm nationally recognized in the
calculation of rebate to perform the calculations necessary to comply with the rebate
requirements of the Code with respect to the Notes, including any exceptions thereto.
ARTICLE VI
ACCOUNTING FOR EXPENDITURES
6.1. Tax Accounting for Expenditures of Note Proceeds. In general, any
reasonable, consistently applied accounting method may be used to account for expenditures of
proceeds of the Notes for arbitrage and private activity bond compliance purposes under
Treasury Regulations §§1.148-6(d) and 1.141-6. Allocations for these two purposes must be
consistent with each other. Reasonable accounting methods for allocating funds from different
sources to expenditures for the same governmental purpose include any of the following methods
if consistently applied: a specific tracing method; a gross proceeds spent first method; a first-in,
first-out method; or a ratable allocation method. Subject to more restrictive special rules that
may apply to proceeds of the Notes, such as the more restrictive special rules applicable to
expenditures of proceeds for Restricted Working Capital Expenditures (see, Bond-Proceeds-
Spent-Last Accounting Method), and except as otherwise noted in the immediately succeeding
sentence, the Issuer will use a specific tracing method, consistently applied, to account for
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expenditures of proceeds of the Notes for purposes of Code §§148 and 141. The expenditure of
money deposited to the Bona Fide Debt Service Fund shall be accounted for on the basis of the
first-in, first-out method of accounting.
(a) Extraordinary Working Capital Items. Gross Proceeds of an issue used for
expenditures for extraordinary,non-recurring items that are not customarily payable from current
revenues, such as casualty losses or extraordinary legal judgments in amounts in excess of
reasonable insurance coverage, or the payments of Extraordinary Working Capital Expenditure.
The exception set forth in the preceding sentence shall apply only if the Issuer or a related party
does not otherwise maintain a reserve for such items or set aside other available amounts for
such expenses. No portion of the proceeds of the Notes will be used to pay Extraordinary
Working Capital Items.
(b) Grants. Gross Proceeds of an issue used to make a grant (i.e., a transfer of
money by the Issuer to a transferee that is neither a member of the Issuer's Controlled Group nor
an agent of the Issuer) that imposes on the transferee no obligation or condition to repay any
amount to the Issuer. In this regard, obligations or conditions intended solely to assure the
expenditure of transferred money in accordance with the governmental purpose of the transfer do
not prevent a transfer from qualifying as a grant. The Issuer understands that in the unexpected
event that a repayment is made with respect to a bond-financed grant, the repaid amount is
treated as unspent proceeds of the bonds as of the repayment date unless expended within sixty
(60) days of the repayment. The amount of grants not meeting the definition above will 'not be
considered expended until expended by the ultimate recipient. No portion of the proceeds of the
Notes will be applied to finance a grant.
(c) Costs of Issuance and De Minimis Working Capital Items. Gross
Proceeds of an issue used for costs of issuance, administrative costs; qualified guarantees or
hedges; payments of interest on the issue for a period commencing the date hereof and ending on
the later of three (3) years from the date hereof or one (1) year after the date the Projects are
placed in service; rebate or penalty or yield reduction payments;payments of principal or interest
on an issue paid from unexpected excess sale or investment proceeds; and principal or interest on
an issue paid from investment earnings on a reserve or replacement fund that are deposited in a
Bona Fide Debt Service Fund, and Gross Proceeds of an issue used for working capital not in
excess of five percent (5%) of the Sale Proceeds of the Notes that are directly related to the
Capital Expenditures financed by the Notes may be considered spent for arbitrage purposes on a
specific tracing accounting method.
(d) Exception for Commingled Investment Proceeds. Investment proceeds of
the Notes that are deposited into the Issuer's General Fund or other funds and that are
commingled with substantial tax or other revenues from the governmental operations of the
Issuer may be treated as allocated to expenditures for a governmental purpose if such Investment
Proceeds are expected to be spent within six (6)months from the date of commingling.
(e) Allocations of Proceeds to Expenditures. It is understood that any
allocations of the proceeds of the Notes to expenditures herein are preliminary. Pursuant to
Treasury Regulations §§1.141-6(a) and 1.148-6(d)(1)(iii), within eighteen (18) months after the
later of the date on which an expenditure of proceeds of the Notes is made or, if later in the case
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of an expenditure for a Capital Project, if any, the Capital Project is placed in service, the Issuer
will make a final allocation of the actual amount of proceeds used for that expenditure by the
Issuer. In any event, such allocation must be made by the date sixty(60) days after the fifth (5t')
anniversary of the Issue Date or the date sixty (60) days after the retirement of the Notes, if
earlier. The Issuer reserves the authority to change any allocation of proceeds to expenditures
and the authority to change the method of accounting of proceeds for the entire period permitted
under Treasury Regulations §§1.141-6 and 1.148-6 and other applicable Treasury Regulations.
6.2. Related Parties and Expenditures. In general, for purposes of tracking
investments and expenditures of Gross Proceeds of the Notes to ensure compliance with the
arbitrage restrictions under Code §148 and the Treasury Regulations, the Issuer will continue to
track investments of proceeds of the Notes and expenditures of the proceeds of the Notes until
paid to parties that are not Related Parties. The Issuer understands that, for arbitrage purposes
under Treasury Regulations §1.148-6(d)(7), unless otherwise within Section 6.3 of this Tax
Certificate, any payment of Gross Proceeds of the Notes to a Related Party of the payer is not an
expenditure of those Gross Proceeds for arbitrage investment tracking purposes. Further in this
regard, for purposes of determining whether the Issuer and another entity are Related Parties, a
special rule under Treasury Regulations §1.150-1(e)(3) provides that a general purpose
governmental entity with its own substantial taxing, eminent domain, and police powers is an
uncontrolled entity (e.g., a city possessing substantial amounts of each of the referenced
sovereign powers is not a controlled entity of a state).
6.3. Expenditures on a Reimbursement Basis of Eligible Original Expenditures
Paid Before Issue Date. No portion of the proceeds of the Notes will be used to reimburse the
Issuer for expenditures incurred and paid thereby with respect to the Projects in anticipation of
the issuance of the Notes.
6.4. Segregated Accounts, Investment Records, and Documentation of
Expenditures. The Issuer will segregate or cause the segregation of all proceeds in one or more
segregated accounts and will maintain necessary investment and expenditure records in order to
assure compliance with the federal tax requirements for the Notes and will segregate or cause the
segregation of proceeds prior to expenditures for governmental purposes in segregated accounts
and will maintain necessary investment and expenditure records for such purposes, including,
without limitation,the following:
(a) investment records necessary to show compliance with any applicable
restrictions as to Yield,to compute the Rebate Amount, and to demonstrate compliance with any
applicable spending exceptions or other requirements under Code §148; and
(b) expenditure records necessary to show the times, amounts and purposes
for which the proceeds are spent on Capital Projects for governmental purposes or otherwise.
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ARTICLE VII
DEBT SERVICE
7.1. Source of Repayment of Notes. The principal of and interest on the Notes
(to the extent not paid from proceeds of other Tax-Exempt Obligations of the Issuer)will be paid
from the Issuer's taxes and revenues.
7.2. Debt Service Fund. The taxes and revenues used to pay principal and
interest on the Notes, whether or not deposited in a Bona Fide Debt Service Fund, will be
expended within thirteen (13) months of the date of deposit in such fund, or the date of their
accumulation. Any amounts received from the investment of such deposit or accumulation will
be expended within one (1) year of receipt. The Bona Fide 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 (1/12th) of the
debt service on the Notes for the immediately preceding bond year. So long as the foregoing
conditions are satisfied, amounts in the Bona Fide Debt Service Fund may be invested until
expended without Yield Restriction.
7.3. Sinking. Except for the Bona Fide Debt Service Fund described
herein, the Issuer has not created or established, and does not expect to create or establish, any
sinking fund, debt service reserve fund, pledged fund or other similar fund which the Issuer
reasonably expects to use to pay principal or interest on the Notes, including without limitation,
any arrangement under which money, securities or obligations pledged directly or indirectly to
secure the Notes or any contract securing the Notes or any arrangement providing for
compensating balances to be maintained by the Issuer with any holder of the Notes.
7.4. No Negative Pledges. There are no amounts held under any agreement to
maintain amounts at a particular level for the direct or indirect benefit of the holders of the Notes
or guarantor of the Notes, if any, excluding for this purpose amounts in which the Issuer (or a
substantial beneficiary) may grant rights that are superior to the rights of the holders of the Notes
or guarantor of the Notes, if any, and amounts that do not exceed reasonable needs for which
they are maintained and as to which the required level is tested no more frequently than every six
(6) months and that may be spent without any substantial restriction other than a requirement to
replenish the amount by the next testing date.
ARTICLE VIII
MISCELLANEOUS
8.1. Recordkeeping. The Issuer shall maintain records to support the
representations, certifications and expectations set forth in this Tax Certificate until the later of
the date three (3) years after the Notes are retired or if the Notes are refunded with proceeds of
Tax-Exempt Obligations, the date three (3) years after the last of such refunding Tax-Exempt
Obligations are retired. The records the Issuer will retain include,but are not limited to:
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(a) basic records and documents related to the Notes, including the Certificate
of Determination,this Tax Certificate and the opinion of Bond Counsel,
(b) documentation evidencing the expenditure of the proceeds of the Notes,
(c) documentation evidencing all sources of payment or security for the
Notes,
(d) documentation pertaining to any investment of the Gross Proceeds of the
Notes, including the purchase and sale of securities, SLGS subscriptions, yield calculations for
each class of investment of the proceeds of the Notes and guaranteed investment contracts,
(e) documentation evidencing determinations made pursuant to Articles IV
and V hereof and records of all amounts paid to the United States pursuant to Sections 4.7, 5.4
and 5.5 hereof, and
(f) documentation evidencing determinations made pursuant to Article III
hereof as to the use of the Projects.
ARTICLE IX
POST ISSUANCE TAX COMPLIANCE
9.1. Post-Issuance Written Compliance Policies and Procedures. The Issuer
represents that it has adopted written post-issuance tax compliance policies and procedures to
ensure compliance with applicable requirements of federal tax law with respect to the Notes.
Such policies and procedures include, among other things, procedures for instituting remedial
actions in the event of any failure to comply with Code §141 relating to "private activity" and
Code §148 relating to arbitrage, Yield Restriction and rebate, and designation of the official
responsible for monitoring compliance with such requirements and to act as its compliance
officer. See Exhibit G attached hereto.
[Signature page follows.]
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IN WITNESS WHEREOF, I have hereunto set my hand on the 8th day of
April,20
904A.J�
N e: Scott A. Russell
Title: Supervisor
[signature page to the Tax Certificate]
I
I
Table of Exhibits
Exhibit A — Definitions
Exhibit B — Form 8038-G
Exhibit C — Economic Lives and Private Use of Projects Financed with Proceeds of the Notes
Exhibit D — Safe Harbor Management Contracts Guidelines
Exhibit E — Certificate of the Purchaser
Exhibit F — Financing Schedules
Exhibit G — Post-Issuance Tax Compliance Procedures
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EXHIBIT A
DEFINITIONS
"Available Construction Proceeds" means the issue price of the Notes (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 Notes. For purposes of this definition earnings include earnings on any
Tax-Exempt Obligation. If only a portion of the Notes constitutes a Construction Issue, 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 Note Year and is depleted at least once each Note Year except for a
reasonable carry over amount (not in excess of the earnings on the fund for the immediately
preceding Note Year or one-twelfth of the principal and interest payments on the issue for the
immediately preceding Note Year).
"Bond Counsel" means Hawkins Delafield & Wood LLP, or any nationally recognized
attorney or firm of attorneys knowledgeable in the requirements of the Code and the Treasury
Regulations and retained by the Issuer.
"Bond-Proceeds-Spent-Last Accounting Method" shall mean the required accounting
method for spending proceeds of an issue on Restricted Working Capital Expenditures under
Treasury Regulations §1.148-6(d)(3), which treats proceeds as spent on a date only to the extent
that the Working Capital Expenditures exceed available amounts, taking into account the
treatment of a reasonable working capital reserve as unavailable, with the determination of
available amounts and reasonable working capital reserves being made in the manner set forth in
the Treasury Regulations.
"Capital Expenditure" means any cost of a type that is property chargeable to the
capital account (or would be so chargeable with a proper election or with the application of the
definition of placed in service under Treasury Regulations §1.150-2(c)) under general federal
income tax principles. Capital Expenditures include 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.
"Capital Project" shall mean all Capital Expenditures, plus related working capital
expenditures to which the de minimis rule under Treasury Regulations §1.148-6(d)(3)(ii)(A)
applies,that carry out the governmental purposes of an issue.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Computation Date" means each Installment Computation Date and the Final
Computation Date.
"Computation Date Credit"means, for any issue of obligations, an amount equal to the
Future Value of$1,650 for each Note Year during which there are gross proceeds of the Notes
on a Computation Date other than the Final Computation Date, and $1,650 on the Final
Computation Date. The foregoing computation credit is subject to an annual inflation-based
adjustment announced by the IRS.
"Computation Period" shall mean the period between Computation Dates. The first
Computation Period begins on the Issue Date and ends on the first Computation Date; each
succeeding Computation Period begins on the date immediately following the Computation Date
and ends on the next Computation Date.
"Construction Expenditures" shall mean, except as otherwise provided, Capital
Expenditures allocable to the cost of real property or constructed personal property.
Construction Expenditures do not include expenditures for acquisitions of interests in land or
other existing real property, unless the contract between the seller and the Issuer requires the
seller to build or install the property (e.g., a "turnkey contract"), but only to the extent that the
property has not been built or installed at the time the parties enter into the contract.
For purposes of this definition "constructed personal property" means tangible personal
property (or, if acquired pursuant to a single acquisition contract, properties) or so-called
"specially developed computer software" if. (A) a substantial portion of the property or
properties is completed more than six (6) months after the earlier of the date construction or
rehabilitation commenced or the date the Issuer entered into an acquisition contract; (B)based on
reasonable expectations of the Issuer, if any, or representations of the person constructing the
property, with the exercise of due diligence, completion of construction or rehabilitation (and
delivery to the Issuer) could not have occurred within that six (6) month period; and (C) if the
Issuer itself builds or rehabilitates the property, not more than seventy-five percent (75%) of the
capitalizable cost is attributable to property acquired by the Issuer (e.g., components, raw
materials, and other supplies). "Specially developed computer software"means any programs or
routines used to cause a computer to perform a desired task or set of tasks, and the
documentation required to describe and maintain those programs, provided that the software is
specially developed and is functionally related and subordinate to the real property or other
constructed personal property.
For purposes of this definition "real property" means land and improvements to land,
such as buildings or other inherently permanent structures, including interests in real property;
e.g., "real property" includes wiring in a building, plumbing systems, central heating or air-
conditioning systems, pipes or ducts, elevators, escalators installed in a building, paved parking
areas,roads,wharves and docks, bridges and sewage lines.
For purposes of this definition "tangible personal property" means any tangible property
other than real property, including interests in tangible personal property; e.g., "tangible personal
property" includes machinery that is not a structural component of a building, subway cars, fire
trucks, automobiles, office equipment,testing equipment, and furnishings.
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"Construction Issue" means for purposes of the two-year construction bond exception
to rebate, any issue (or portion thereof)that is not a refunding issue in which all of the bonds are
either (i) Governmental Bonds; (ii) Qualified 501(c)(3) Bonds, or (iii) Qualified Private Activity
Bonds to finance property owned by a Governmental Unit or a 501(c)(3) organization, if at least
seventy-five percent (75%) of the net proceeds of the issue are to be used for expenditures for
construction, reconstruction and rehabilitation of property which is owned by a Governmental
Unit or a 501(c)(3) organization.
"Controlled Group" means a group of entities controlled directly or indirectly by the
same entity or group of entities. In general, "direct control" exists while a controlling entity
possesses either of the following rights or powers and such rights or powers are discretionary and
non-ministerial: the right or power(i)both to approve and to remove without cause a controlling
portion of the governing body of the controlled entity, or (ii)to require the use of funds or assets
of the controlled entity for any purpose of the controlling entity. If one entity (the "Controlling
Entity") directly controls another (the "Controlled Entity"), then the Controlling Entity indirectly
controls any entity controlled directly or indirectly by such Controlled Entity. However, an
entity is not a Controlled Entity if it possesses substantial taxing, eminent domain and police
powers.
"De Minimis Amount" shall mean: (a) in reference to original issue discount(as defined
in Code §1273(a)(1)) or premium on an obligation: (i) an amount that does not exceed two
percent (2%) multiplied by the stated redemption price at maturity; plus (ii) any original issue
premium that is attributable exclusively to reasonable underwriters' compensation; and (b) in
reference to market discount (as defined in Code §1278(a)(2)(A)) or premium on an obligation,
an amount that does not exceed two percent (2%) multiplied by the stated redemption price at
maturity.
"De Minimis Working Capital Items" shall mean Working Capital Expenditures
eligible for the de minimis exception to the Bond-Proceeds-Spent-Last Accounting Method in
Treasury Regulations §1.148-6(d)(3)(ii)(A), and includes:
(a) issuance costs of an issue and Qualified Administrative Costs;
(b) Qualified Guarantee fees and Qualified Hedge payments;
(c) interest on an issue for a period starting on the Issue Date and ending on
the date that is the later of three (3) years from the Issue Date or one (1) year after the
date on which any financed Capital Project is placed in service;
(d) certain Rebate Amounts and Yield Reduction Payments;
(e) other costs that do not exceed five percent (5010) of the Sale Proceeds of an
issue and that are directly related to any Capital Expenditures financed with the issue;
(f) principal or interest on an issue paid from unexpected excess Sale
Proceeds or Investment Proceeds; or
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(g) principal or interest on an issue paid from investment earnings .on a
reserve or replacement fund that are deposited in a Bona Fide Debt Service Fund.
"Extraordinary Working Capital Item" shall mean, Working Capital Expenditures
eligible for the exception to the Bond-Proceeds-Spent-Last Accounting Method in Treasury
Regulations §1.148-6(d)(3)(ii), which covers 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, and for which no reserve has
been maintained.
"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 Treasures ag_tion The Fair Market Value of a United
States Treasury Obligation that is purchased directly from the United States Treasury is
its purchase price.
(c) Certificate of Deposit The Fair Market Value of a certificate of deposit
with a fixed interest rate, a fixed payment schedule, and a substantial penalty for early
withdrawal is its purchase price provided the yield on the certificate of deposit is not less
than(i)the yield on reasonably comparable direct obligations of the United States and(ii)
the highest yield published by the provider and currently available from the provider on
reasonably comparable certificates of deposit offered to the public.
(d) Guaranteed Investment Contracts and Yield Restricted Defeasance
Escrows. The Fair Market Value of a guaranteed investment contract or an investment
purchased for a yield restricted defeasance escrow is its purchase price, provided the
issuer of the Notes makes a bona fide solicitation for such contract that satisfies all of the
following requirements:
(A) The bid specifications are in writing and are timely forwarded to potential
providers.
(B) The bid specifications include all material terms of the bid; material terms
are defined as terms that may directly or indirectly affect the yield or cost
of the investment.
(C) The bid specifications include a statement notifying potential providers
that submission of a bid is a representation that the potential provider did
not consult with any other potential provider about its bid,that the bid was
determined without regard to any other formal or informal agreement that
the potential provider has with the issuer or any other person (whether or
not in connection with the bond issue), and that the bid is not being
submitted solely as a courtesy to the issuer or any other person for
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purposes of satisfying the requirements of the applicable provisions of the
Treasury Regulations.
(D) The terms of the bid specifications are commercially reasonable, i.e., there
is a legitimate business purpose for the term other than to increase the
purchase price or reduce the yield of the investment (for example, for
solicitations of investments for a yield restricted defeasance escrow, the
hold firm period must be no longer than the issuer reasonably requires).
(E) With respect to purchases of guaranteed investment contracts only, the
terms of the solicitation take into account the issuer's reasonably expected
deposit and drawdown schedule for the amounts to be invested.
(F) All potential providers have an equal opportunity to bid, for example, no
potential provider is given the opportunity to review other bids (i.e., a"last
look")before providing a bid.
(G) At least three reasonably competitive providers are solicited for bids;
reasonably competitive provider is a provider that has an established
industry reputation as a competitive provider of the investments being
purchased.
The bids received must meet all of the following requirements:
(A) The issuer receives at least three bids from providers that the issuer
solicited under a bona fide solicitation, which bids meet the requirements
set forth immediately above and that do not have a material financial
interest in the issue. A lead underwriter in a negotiated underwriting
transaction is deemed to have a material financial interest in the issue until
fifteen (15) days after the Issue Date. ' In addition, any entity acting as
financial advisor with respect to the purchase of the investment at the time
the bid specifications are forwarded to potential providers has a material
financial interest in the issue. A provider that is a related party to a person
that has a material financial interest in the issue is deemed to have a
material financial interest in the issue.
(B) At least one of the three bids received is from a reasonably competitive
provider of such types of investments, as described in paragraph (vii)
above.
(C) If the issuer uses an agent to conduct the bidding process,the agent did not
bid to provide the investment.
The winning bid must be:
(A) In the context of a guaranteed investment contract, the highest yielding
bona fide bid(determined net of any broker's fees).
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(B) In the context of investments other than guaranteed investment contracts,
the lowest cost bona fide bid (including any broker's fees). The lowest
cost bid is either the lowest cost bid for the portfolio or if the issuer
compares the bids on an investment by investment basis, the aggregate
cost of a portfolio comprised of the lowest cost for each investment. Any
payment received by the issuer from a provider at the time the investment
is purchased (e.g., an escrow float contract) for a yield restricted
defeasance escrow under a bidding procedure meeting the requirements of
this definition is taken into account in determining the lowest cost bid.
In general, the lowest cost bona fide bid (including any broker's fee) may not be
greater than the cost of the most efficient portfolio comprised exclusively of SLGS
available for purchase from the Bureau of Public Debt. The cost of the most efficient
portfolio of SLGS is to be determined at the time that bids are required to be submitted
pursuant to the terms of the bid specifications. This requirement to compare to the most
efficient SLGS portfolio does not apply if SLGS are not available for purchase on the
date that bids are required to be submitted because sales of those securities have been
suspended.
The provider of the investments or the obligor on the guaranteed investment
contract certifies the administrative costs that it pays (or expects to pay), if any, to third
parties in connection with supplying the investment.
The issuer must retain the following records with the bond documents until three
years after the last outstanding bond is redeemed:
(A) For guaranteed investment contracts, a copy of the contract, and for other
types of purchases,the purchase agreement or confirmation.
(B) The receipt or other record of the amount actually paid by the issuer for
the investment, including a record of any administrative costs paid by the
'issuer to third parties and the certification of such costs.
(C) For each bid that is submitted, the name of the person and entity
submitting the bid,the time and date of the bid and the bid results.
(D) The bid solicitation form and, if the terms of the purchase agreement or
the guaranteed investment contract deviated from the bid solicitation form
or a submitted bid is modified, a brief statement explaining the deviation
and stating the purpose of the deviation. If the issuer replaces an
investment in the winning bid portfolio with another investment, the
purchase price of the investment must be bid-under a bidding procedure
meeting the requirements of this definition.
(E) For purchases of investments other than guaranteed investment contracts,
the most efficient portfolio of SLGS, determined at the time that the bids
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were required to be submitted pursuant to the terms of the bid
specifications.
"Final Computation Date" means the day the last obligation that is part of the Notes is
discharged.
i
i
"Fixed Yield Bond" means any obligation whose yield is fixed and determinable on its
issue date using the assumptions and rules set forth in Treasury Regulations §1.148-4(b). ;
"Fixed Yield Investment" shall mean any Investment, the Yield on which is fixed and
determinable on its Issue Date.
"Fixed Yield Issue" means any issue at any time that each bond included in it and still
outstanding is a Fixed Yield Bond.
"Future Value" or "FV" of a payment or receipt means the amount, determined by
using the economic accrual method (the method of computing yield based on the compounding
of interest at the end of each compounding period), equal to the value of such payment or receipt
at the time it is paid or received (or treated as paid or received), plus interest assumed to be
earned and compounded over the period at a rate equal to the yield on the bonds, using the same
compounding interval and financial conventions used to compute yield.
"Governmental Bonds" mean bonds or other obligations issued as part of an issue the
interest on which is excluded from gross income for federal income tax purposes under Code
§103(a) and which are not Qualified Private Activity Bonds or Qualified 501(c)(3)Bonds.
"Governmental Unit" means a state or local governmental unit as defined in Treasury
Regulations §1.103-1 or any instrumentality thereof, excluding the United States or any agency
or instrumentality thereof.
"Gross Proceeds" shall mean Sale Proceeds, Investment Proceeds, Transferred Proceeds
and Replacement Proceeds. The term "Gross Proceeds" does not include Qualified
Administrative Costs,nor does it include amounts properly within the applicable yield allowance
for acquired purpose investments (one-eighth of one percentage point ('/8%)) or for acquired
program investments (one-and-one-half percentage points (1'/2%)).
"Higher Yielding Investment" shall mean a Nonpurpose Investment, the Yield on
which exceeds the yield on the Notes by more than the spread permitted by the Code and
Treasury Regulations.
"Installment Computation Date" shall mean any date with respect to a Fixed Yield
Bond Issue; with respect to a Variable Yield Bond Issue, the Issuer may treat the last day of any
Note Year ending on or before the latest date as of which the first Rebate Amount is required to
be paid (i.e., as of not later than the fifth anniversary date of the date of issuance of the Notes) as
a Computation Date,but may not change that treatment after the first payment date; and, after the
first required payment date,the Issuer must consistently treat either the end of each Note Year or
the end of each fifth Note Year as a Computation Date and may not change these Computation
Dates after the first required payment date. Notwithstanding any of the foregoing,the first rebate
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installment payment must be made on a Computation Date that is not later than five (5) years
after the Issue Date. Subsequent rebate installment payments must be made for a Computation
Date that is not later than five (5) years after the previous Computation Date for which an
installment payment was made (until and excluding the Final Computation Date). The
references herein to the date on which rebate is required to,be paid allude to the actual date as of
which the Rebate Amount is required to be calculated and not the 60-day grace period following
such date during which the Rebate Amount, if any, is to be paid. ;
"Investment" means (i) any security(within the meaning of Code §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 Code §57(a)(5)(C)), (iii) any annuity contract within the meaning
of Code §72, (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 Notes.
"Issue Price" shall mean the initial offering price to the public at which price a
substantial amount of each maturity of the Notes was sold. Ten percent (10%) is a substantial
amount. For this purpose, the term "the public" does not include bond houses, brokers, or
similar Persons or organizations acting in the capacity of underwriters or wholesalers. The Issue
Price generally is the first price at which the Notes were sold to the public and the Issue Price
will not change if part of the issue is subsequently sold at a different price. The Issue Price of
bonds that are not substantially identical is determined separately. The Issue'Price of a bond
issue for which a bona-fide public offering is made is determined as of the sale date based on
reasonable expectations regarding the initial public offering price. The Issue Price of the Notes
may not exceed their Fair Market Value as of their sale date. If the Notes are privately placed,
the Issue Price is the price paid for them by the first buyer.
"Multipurpose Issue" means an issue the proceeds of which are used for two or more
separate purposes determined in accordance with Treasury Regulations §1.148-9(h).
i
"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.
"Nonpurpose Receipt" shall mean those receipts of moneys as described in Subsection
5.2(d) of this Tax Certificate.
"Note Year" means each one (1) year period that ends on the day selected by the Issuer.
The first Note Year and the last Note Year may be short periods. If the Issuer has not selected a
I
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day before the earlier of the final maturity date of the issue or five (5) years after the Issue Date,
Note Year shall,mean any year ending on the anniversary of the Issue Date and on the final
maturity date.
"Note Yield" means the yield on the Notes as defined in Section 4.2 of this Tax
Certificate.
"Official Statement" means the Official Statement, if any, of the Issuer relating to the
Notes.
"Person" means any individual, corporation, partnership,joint venture, association,joint
stock company, trust, unincorporated organization or government or any agency or political f
subdivision thereof.
"Plain Par Bond"means a qualified tender bond or a bond that(i) is issued with original
issue discount equal to not more than two percent (2%) 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 1
under Code §1275, in either case, that pays interest unconditionally payable at least annually,
and (iv)has a lowest stated redemption price -not less than its outstanding stated principal
amount.
"Plain Par Investment" means an investment that is an obligation that (i) is issued with
original issue discount (or if acquired on a date other than the issue date, acquired with market
discount or premium) equal to not more than two 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 Code
§1275 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= 1 Vn
where i equals the discount rate divided by the number of compounding intervals in a
year and n equals the sum of (i) the number of whole compounding intervals for the
period beginning on the date as of which Present Value is computed and ending on the
date the amount is to be received or paid or on a Computation Date and (ii) a fraction the
numerator of which is the length of any short compounding interval during such period
and.the denominator of which is the length of a whole compounding interval.
"Private Activity Bonds" means a bond which meets the definition contained in Code
§141(a) and that is not a"qualified bond" as defined in Code §141(e).
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"Qualified 501(c)(3)Bond" means a bond which meets the definition contained in Code
§145.
"Qualified Administrative Costs"mean:
(i) 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 Obligations.
(ii) Regulated Investment Companies and External Commingled Funds. For
publicly offered regulated investment companies (as defined in Code §67(c)(2)(B)) and
commingled fiends in which the Issuer and any Controlled Entity do not own more than
ten percent (10%) 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.
(iii) GICs and Investments Purchased for a Yield Restricted Defeasance
Escrow. An amount paid for a broker's commission or similar fee paid with respect to a
guaranteed investment contract or investments purchased for a yield restricted defeasance
escrow will be considered reasonable if(i) the fee does not exceed the lesser of$39,000
or 0.2 percent of the "computational base", or, if more, $4,000, where "computational
base" means (A) for a guaranteed investment contract, the amount reasonably expected,
as of the date the contract is acquired, to be deposited in the guaranteed investment
contract over the term of the contract and (B) for yield restricted defeasance escrows, the
amount of proceeds initially invested in those investments; and (ii) for any issue,the fees
paid, do not exceed $110,000 in the aggregate. In the case of a calendar year after 2015,
each of the dollar amounts set forth above shall be increased by,an amount equal to such
dollar amount multiplied by the cost of living adjustment for such calendar year as
described in Treasury Regulations §1.148-5(e)(2)(iii)(B).
I
(iv) Purpose Investments. Qualified Administrative Costs include costs or
expenses paid, directly or indirectly, to purchase, carry, sell, or retire the investment,
costs of issuing, carrying, or repaying the issue, and any underwriters' discount, any of
which are paid by the conduit borrower, even if such payments merely reimburse the
Issuer, but only to the extent the Present Value of those payments does not exceed the
Present Value of the reasonable administrative costs paid by the Issuer using the Note
Yield as the discount rate.
(v) 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.
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"Qualified Guarantee" means, with respect to a bond, an unconditional transfer, in any
form, of substantially all of the credit risk for all or part of the payments, such as payments for
principal and interest, redemption prices or tender prices, on the guaranteed bonds. The
guarantor must not expect to make any payments other than those pursuant to a direct-pay letter
of credit or similar arrangement for which the guarantor will be immediately reimbursed.
Reasonable procedural or administrative requirements or, in the case of a guarantee against
failure to remarket a qualified tender bond, commercially reasonable limitations based on credit
risk, will not cause the guarantee to be conditional. The guarantor may not be a co-obligor, nor
may the obligor and any related parties combined use more than ten percent of proceeds of the
guaranteed portion of the bonds. The guarantee fee must not exceed a reasonable arm's-length
charge solely for the transfer of the credit risk. A guarantee will not be qualified unless, as of the j
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 Notes, a contract between the Issuer and
any unrelated party entered into to modify the Issuer's risk of interest rate changes with respect
to the Notes that meets the requirements of Treasury Regulations §1.148-4(h). The contract may
be an interest rate swap, an interest rate cap, a futures contract, a forward contract, an option or
may take another form.
"Rebate Amount" means with respect to the Notes, the amount computed as described
in Section 5.2(d) of this Tax Certificate.
"Replacement Proceeds" means amounts which have a sufficiently direct nexus to the
issue or the governmental purpose of the issue to conclude that the amounts would have been
used for that governmental purpose if the proceeds of the issue were not used for that
governmental purpose. The governmental purpose of a bond issue includes the expected use of
amounts for the payment of debt service on a particular date. For this purpose, the mere
availability or preliminary earmarking of amounts for a purpose does not in and of itself establish
a sufficient nexus to cause those amounts to be Replacement Proceeds. Replacement Proceeds
include funds and amounts held by the Issuer including:
(i) sinking funds, such as debt service funds, redemption funds,reserve funds,
replacement funds, or any other fund, to the extent reasonably expected to be used
directly or indirectly to pay principal or interest on the Notes;
(ii) pledged funds, any amount directly or indirectly pledged to pay principal
or interest on the Notes, cast in any form but providing reasonable assurance that such
amount will be available to pay principal or interest on the Notes, even if the Issuer
encounters financial difficulty;
(iii) negative pledges, amounts held under an agreement to maintain such
amount at a particular level for the director indirect benefit of holders or a guarantor of
the Notes, excluding amounts the Issuer, or a Controlled Entity of the Issuer may grant
rights in superior to the rights of the bondholders or the guarantor and amounts not in
a,
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excess of the reasonable needs for which it is maintained, the required level of which is
tested no more frequently than every six (6) months and which may be spent without any
substantial restriction other than a requirement to replenish such amount by the next
testing date; and
(iv) other replacement proceeds, including amounts arising during a period
that the Notes,to the extent reasonably expected by the Issuer as of the issue date,remain
outstanding longer than necessary and amounts arising to the extent proceeds of the
Notes are used to finance a working capital reserve unless all of the Net Sale Proceeds of
the Notes are spent within six (6) months of their issue date, or meet the "small
governmental issuer" exception to rebate or the Issuer traditionally maintained a working
capital reserve. The amount of the working capital reserve maintained is the average
amount so maintained during annual periods of at least one year, the last of which ends
within a year of the issue date.
"Restricted Working Capital Expenditures" means Working Capital Expenditures
subject to the Bond-Proceeds-Spent-Last Accounting Method in Treasury Regulations
§1.148-6(d)(3)(i) and that are ineligible for any exception to that rule.
"Sale Proceeds" means any amounts actually or constructively received from the sale of
the Notes, 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 Treasury Regulations §1.148-4(b)(4).
"SLGS" means U.S. Treasury Book Entry Securities, State and Local Government
Series.
"Tax Certificate" shall mean this Tax Certificate, as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof.
"Tax-Exempt Obligation" shall mean any obligation described in Code §103(a) the
interest on which is excluded from the federal gross income of the owners thereof and which is
not a"specified private activity bond" as defined in Code §57(a)(5)(C).
"Tax-Exempt Organization" shall mean an entity organized under the laws of the
United States of America or any state thereof which is an organization described in Code
§501(c)(3) and exempt from federal income taxes under Code §501(a), or corresponding
provisions of federal income tax laws from time to time in effect.
"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.
"Treasury Regulations" means the Income Tax Regulations promulgated under Code
§§103 and Code §§141 through 150 and related provisions of the Code applicable to
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Tax-Exempt Obligations, as amended from time to time, and any applicable predecessor
provisions of the Code, as amended from time to time.
"Universal Cap" means the maximum value of Nonpurpose Investments which may be
allocated to the Notes and is determined by reference to the Value of all outstanding Notes 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 Notes thereunder are determined. With respect to new
money issues, the first Valuation Date shall be the second year anniversary date of the Issue Date
of the Notes; thereafter, the first day of each Note 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 Note Year shall also be a Valuation Date.
"Value" means, in the case of a bond, the Value of the bond and in the case of an
Investment,the Value of the 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 of a variable rate bond, the initial
interest rate on the bond established by the index or other rate setting mechanism is used to
determine the interest payments on that bond.
"Value of an Investment" means, on any date means, as permitted or required, the
Present Value or the Fair Market Value of the Investment or its outstanding principal amount.
Paragraphs (a) through (f) below specify the valuation methods required or permitted to be used
for the Investments listed:
(a) Fixed Rate Investments. A Fixed Rate Investment may be valued at its
Present Value or at its Fair Market Value on any date unless it is required to be invested
at a restricted yield.
(b) Plain Par Investments. A Plain Par Investment may be valued at its
outstanding stated principal amount on any date (plus interest accrued but unpaid on that
date)unless it is required to be invested at a restricted yield.
(c) Any Investment Any Investment may be valued at its Fair Market Value
on any date unless it is required to be invested at a restricted yield.
(d) Yield Restricted Investments. An Investment required to be invested at a
restricted yield (for example, an Investment held after the expiration of the applicable
investment temporary period) must be valued at its Present Value as of any date unless
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the Investment is required to be valued at Fair Market Value as provided in paragraph(e)
below.
(e) Mandatory Valuation at Fair Market Value. Subject to paragraph (d)
above, Investments deemed to be acquired or disposed of with respect to bonds (as a
result, for example, of sinking fund deposits or withdrawals) must be valued on the
deemed acquisition or disposition date at Fair Market Value unless (i)the Investment was
allocated from one issue of Tax-Exempt Obligations to another as Transferred Proceeds
or as a result of the application of the Universal Cap rule in which case it may be valued
at Present Value or (ii) the Investment is held in a commingled fund (other than a bona
fide debt service fund or a commingled fund that operates exclusively as a reserve fund,
sinking fund or replacement fund for two or more issues of the Issuer) unless it is an
investment being initially deposited in or withdrawn from a commingled fund.
(f) Special Rule for Transferred Proceeds. Notwithstanding any matter stated
above, the Value of any Nonpurpose Investment allocable to Transferred Proceeds of an
issue of refunding obligations may not exceed the Value of that Investment used for
purposes of applying the arbitrage restrictions to the refunded obligations on the date
proceeds of the refunding obligations are used to redeem the refunded obligations.
"Working Capital Expenditure" means any cost of a type that does not constitute a
Capital Expenditure.
"Yield" means, as of any Computation Date, the yield computed on an issue of
obligations under Treasury Regulations §1.148-4 and on an Investment under Treasury
Regulations §1.148-5 in either case by compounding interest at the end of each compounding
interval as further described in paragraphs (a) and (b)below:
(a) When used with respect to a Fixed Yield Issue, yield means that discount
rate that, when used in computing the Present Value of (i) all unconditionally payable
payments of principal and interest of or on the bonds included in such Fixed Yield Issue,
(ii) all unconditionally payable fees for Qualified Guarantees and Qualified Hedges on
such bonds and (iii) all fees expected to be paid for Qualified Guarantees and Qualified
Hedges, produces an amount equal to the sum of the Present Value of the aggregate issue
prices of the bonds comprising the issue (determined using the same discount rate used to
determine the Present Value of payments for principal, interest and Qualified Hedges and
Qualified Guarantees). The yield is computed as of the issue date of the Fixed Yield
Issue by treating each bond included in the issue that is either subject to mandatory or
contingent early redemption or to certain optional redemption provisions as being
redeemed on its expected early redemption date for an amount equal to its Value on that
date. If a Fixed Yield Bonds (i)is subject to optional redemptions within five years of its
issue date and the yield not taking into account the optional redemption is more than one-
eighth of one percent (0.125%) 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
one-quarter of one percent (0.25%) 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
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including such Fixed Yield Bonds is computed by treating the Fixed Yield Bonds 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 parry or termination payments are received with
respect to Qualified Hedges. The yield on a Fixed Yield Bonds is calculated in the same
manner as yield on a Fixed Yield Issue.
(b) When used with respect to any Investment allocated to an Issue, yield
means the yield on the Investment computed using the same compounding interval and
financial conventions used to calculate the yield on the issue of obligations to which it is
allocated. The yield on an Investment allocated to an issue is the discount rate that,when
used on the date the Investment is first purchased with Gross Proceeds or allocated to
Gross Proceeds of the issue to compute the Present Value on that date of all
unconditionally payable Nonpurpose Receipts from the Investment, produces an amount
equal to the Present Value on that date of all unconditionally payable Nonpurpose
Payments for the Investment.
{
"Yield Reduction Payments" means periodic payments made on Installment
Computation Dates with respect to certain Investments subject to yield restriction which are
treated as a payment for such Investments that reduces the Yield on such Investment,made to the
United States under Treasury Regulations §1.148-5(c). Yield reduction payments may be made
with respect to (a) Investments allocable to proceeds eligible for a temporary period after such
temporary period has expired, (b) investments allocable to a Variable Yield Issue during any
Computation Period in which at least five percent of the issue is represented by variable yield
bonds, (c) Nonpurpose Investments allocable to Transferred Proceeds of a current refunding
issue to the extent necessary to satisfy yield restriction or of an advance refimding to the extent
that investment in zero yielding Nonpurpose Investments fails to properly restrict the Yield,
(d)purpose investments allocable to certain qualified student loans, (e) Nonpurpose Investments
allocable to a reasonably required reserve or replacement fund that but for its size would be
treated as a reasonably required reserve or replacement fund, to the extent that certain other size
constraints are satisfied, (f) Nonpurpose Investments allocable to Replacement Proceeds by
virtue of the Universal Cap, and(g) amounts eligible for transitional relief.
« » «
Yield Restricted or Yield Restriction" shall mean required to be invested at a yield
that is not materially higher than the Yield on the Notes of the applicable issue under Code §148
and Treasury Regulations §1.148-2.
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EXHIBIT B
FORM 8038-G
(see attached)
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Form8038—G Information Return for Tax-Exempt Governmental Obligations
(Rev.September 2011) ►Under Internal Revenue Code section 149(e) OMB No.1545-0720
►See separate instructions.
Department of the Treasury Caution:If the issue price is under$100,000,use Form 8038-GC.
Internal Revenue Service
ff• Reporting Authority If Amended Return,check here ► El
1 Issuer's name 2 Issuer's employer identification number(EIN)
Town of Southold 11-6001939
3a Name of person(other than issuer)with whom the IRS may communicate about this return(see instructions) 3b Telephone number of other person shown on 3a
4 Number and street(or P.O.box if mail is not delivered to street address) Room/sulte 5 Report number(For IRS Use Only)
53095 Main Road 3
6 City,town,or post office,state,and ZIP code 7 Date of issue
Southold,New York 11971 04/08/2015
8 Name of issue 9 CUSIP number
$729,000 Various Purposes Bond Anticipation Note-2015 None
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information(see 10b Telephone number of officer or other
instructions) employee shown on 10a
I
Scott A.Russell Supervisor 631 765-1889
Type of Issue (enter the issue price).See the instructions and attach schedule.
11 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12 Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 Transportation . . . . . . . . . . . 13
14 Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 Environment(including sewage bonds) . . . . . . . . . . . . . . . . . . . . 15 �I
16 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
I,
18 Other.Describe ► Various Purposes 18 729 000.00
19 If obligations are TANs or RANs,check only box 19a . . . : . . . . . . . . . ► ❑ _
If obligations are BANS,check only box 19b . . . . . . . . . . . . . . . . ►
20 If obligations are in the form of a lease or installment sale,check box . . . . . . . . ► ❑ " ;;'tw
Description of Obligations.Complete for the entire issue for which this form is being filed.
(a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted (e)Yield
price at maturity average maturity
:210,4/07/2016 $ 729 000.00 $ 729 000.00 0.9972 years 1.26601%
Uses of Proceeds of Bond Issue(including underwriters' discount)
22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . 22 0.00
23 Issue price of entire issue(enter amount from line 21,column(b)) . . . . . . 23 729 000.00
24 Proceeds used for bond issuance costs(including underwriters'discount). 24 0.00
25 Proceeds used for credit enhancement . . . . . . . . . . . . 25 0.00
26 Proceeds allocated to reasonably required reserve or replacement fund 26 0.00 '
27 Proceeds used to currently refund prior issues . . . . . . . . . 27 729 000.00
28 Proceeds used to advance refund prior issues . . . . . . . . . 28 0.001-
29
.00 -29 Total(add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . 29 729,000.00
30 Nonrefunding proceeds of the issue(subtract line 29 from line 23 and enter amount here) . . . 30 0.00
Description of Refunded Bonds.Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► 0.0027 years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► N/A years
33 Enter the last date on which the refunded bonds will be called(MM/DD/yyyy) . . . . . . ► 04/09/2015
34 Enter the date(s)the refunded bonds were issued►(MM/DDNYYI) 04/09/2014
For Paperwork Reduction Act Notice,see separate instructions. Form 8038-G(Rev.9-2011)
i
ISA
rt Form 8038-G(Rev.9-2011) Page 2
MRMW Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract k
(GIC)(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a
b Enter the final maturity date of the GIC 10-
c
c Enter the name of the GIC provider 10-
37
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans 4,.,
to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . 3j
38a If this issue is a loan made from the proceeds of another tax-exempt issue,check box► ❑and enter the following information:
b Enter the date of the master pool obligation►
c Enter the EIN of the issuer of the master pool obligation Po-
d
d Enter the name of the issuer of the master pool obligation►
39 If the issuer has designated the issue under section 265(b)(3)(B)()(III)(small issuer exception), check box . . . . ►
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate,check box . . . . . . . . . . . . . ► ❑
41a If the issuer has identified a hedge,check here► ❑ and enter the following information:
b Name of hedge provider►
c Type of hedge►
d Term of hedge►
42 If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . ► El
43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations(see instructions),check box . . . . . . . . 1110-
44
44 If the issuer has established written procedures to monitor the requirements of section 148,check box . . . . . ►
45a If some portion of the proceeds was used to reimburse expenditures, check here► ❑ and enter the amount
of reimbursement . . . . . . . 10-
b
b Enter the date the official intent was adopted►
Under penalties of perjury,I declare that I have examined this return and accompanying schedules and statements,and to the best of my knowledge
Signature and belief,they are trupaorrect,and complete.I further declare that I consent to the IRS's disclosure of the issuer's return information,as necessary to
and process this return a personthat ave authorized above.
Consent Scott A.Russell Supervisor
Signatu rf issuer's authorized representative Date Type or print name and title
Paid Print/Type preparer's name
Preparer Preparer's signature Date Check Li IifP71N
Robert P.Smith self-employed P01085234
Use Only Firm's name ►l3awldns Delafield&Wood LLP F ►
Firm's EIN 13-55133990
Firm's address ►One Chase Manhattan Plu,4 NY NY 10005 Phone no. 212 820-9400
Form$038-G(Rev.9-2o11)
i
EXHIBIT C
Economic Lives and Private Use of Projects Financed with Proceeds of the Notes
(see attached)
2442450.1 034513 TAGMT
EXHIBIT C
Town of Southold New York-Varies Purposes Bond AnUcipatlun Note-2035
(1) Cost ofProlect assets to be
refinanced with proceeds of theBonds $ 729,000 00
(2) Face Amount of Bonds $ 729,00000
Delivery Date 4/8/2015
g C D E E C H d L K L M
Ratio ofFinauced Cost of Obligation Proceeds Acquisition or
Each Asset(B)to Total Allocable to Asset(C)is Tax Period in Construction
Cost of EachPro)ed Cost of All Financed Face Amount of Bonds Economic Sernce Pnor Period Following Adjusted Remaining
Refinanced with Assets (from Item(2)) PPU Life- Life•• tolssue Date Issue Date Economic Life Weighted Life Pnvate Private Activity Amount
Protect(.) Obligations (from Item(1)) Obligations (myna) (my.) Basis ofDe[eounation On yrs)... (inyra) (F-H rF+1) (D.3) Activity% (BxL)
Fisher's Island Ferry Districtlmprovmeneta $ 250,00000 03429 S 250,00000 2000 2000 Village Estimate 1083 000 9.17 2,291,78082 000%
Acquisition of Fuel Management System Equipment 30,000 00 00412 30,000 00 500 500 Vdlage Estimate 399 000 101 30,410 96 000% -
Fishers Island Ferry District hnprovmenets 449,00000 06159 449.00000 2000 2000 VdlaRc Estimate 199 000 1801 8,085,69041 000%
Total S 729,000 00 10000 $ 729,000 00 10,407,88219
•Asset life allowed under State Finance Law
•'Asset life allowed for tax purposes pursuant to bond counsel's analysis
•"Based on Bond Resolution
Av—geEconomuc Life= Total 1428 years Aggregate Private = TotalM = 0000%
Total ActivityTotal B-1
2442496.1 034513 Page i of 1 Useful Life Spreadsheet
EXHIBIT D
SAFE HARBOR MANAGEMENT CONTRACT GUIDELINES
REV.PROC. 97-13,AS AMENDED AND AMPLIFIED
General Rule.
A contract between a state or local governmental unit(a"Qualified User") and a manager
or operator which is not a state or local government unit(a"Provider) for the management of, or,
services rendered at, or incentive payment in respect of, a tax-exempt bond-financed facility that
meets the safe-harbor guidelines of Rev. Proc. 97-13 as summarized below and does not
otherwise give the Provider an ownership or leasehold interest in bond-financed property for
federal income tax purposes is treated as not creating any private business use under Section
141(b) of the Internal Revenue Code (the "Code"). In addition, if the guidelines are met, the
burden to prove that the contract creates impermissible private activity would shift to the Internal
Revenue Service ("IRS") in a tax court proceeding. All contracts must be reviewed on a case-
by-case basis.
General Requirements.
1. Reasonable Compensation and No Net Profits. The compensation must be
reasonable and no portion of the compensation paid to the Provider may in any event be based on
net profits derived from the bond-financed facility. However, compensation that is based on a
percentage either of gross revenues or of expenses (but not both) is permitted. A Productivity
Award does not cause the compensation to be based on'a share of net profits. Reimbursement
for actual and direct expenses paid by the Provider to unrelated persons is not by itself treated as
compensation.
2. No Penal if Required to be Cancelable. Whenever a contract is required
to be cancelable as described below, it must be possible to cancel it without penalty imposed on
the Qualified User. A "penalty" means: (a) any limitation on the Qualified User's right to
compete with the Provider; (b) any requirement that the Qualified User purchase equipment,
goods or services from the Provider; or (c) any requirement that the Qualified User pay
liquidated damages for cancellation of the contract. A requirement that the Qualified User
reimburse ordinary and necessary expenses of the Provider or a restriction against hiring key
personnel of the Provider is not a penalty. A penalty may exist where provisions of another
contract between the Provider and Qualified User (e.g., a loan or guarantee) impair the practical
ability of the Qualified User to terminate the service contract for example by automatically
terminating when the service contract terminates.
3. No Role or Relationship between Qualified User and Provider. There
must not be any role or relationship between the Qualified User and the Provider that would
substantially limit the Qualified User's ability to exercise its rights under the contract, including
cancellation rights. This requirement is-considered satisfied if (a) not more than 20% of the
voting power of the governing board of the Qualified User is vested in the Provider and its
directors, officers, shareholders and employees, (b) overlapping board members do not include
the chief executive officers of the service provider or its governing body or the Qualified User or
D-1
2442450.1 034513 TAGMT
its governing body, and (c) the Qualified User and the Provider are not "related persons" within
the meaning of Treasury Regulations §1.150-1(b).
Permitted Contract Term and Compensation Arrangements.
The contract term (which includes Renewal Options) and the compensation arrangements
must meet one of the following six requirements:
Contract Maximum Term Limit Permissible Compensation Arrangements
1. Lesser of 15 years (20 years for 1. At least 95% of compensation for each annual period
public utility property) or 80% must be based on a Periodic Fixed Fee. A one-time
of the reasonably expected incentive award during the term of the contract under
useful life of the bond-financed which compensation automatically increases when a
property. No cancellation right gross revenue or expense target (but not both) is reached
required. is permitted if,the award is equal to a single, stated dollar
amount.
2. Lesser of 10 years (20 years for 2. At least 80% of compensation for each annual period
public utility property) or 80% must be based on a Periodic Fixed Fee. A one-time
of the reasonably expected incentive award during the term of the contract under
useful life of the bond-fmanced which compensation automatically increases when a
property. No cancellation right gross revenue or expense target (but not both) is reached
required. is permitted if the award is equal to a single, stated dollar
amount.
3. 5 years. No cancellation right 3. All of the compensation for services is based on a stated
required. amount; a Periodic Fixed Fee; a Capitation Fee; a Per-
Unit Fee; or a combination of the preceding, except that
the compensation for services also may include a
percentage of gross revenues, adjusted gross revenues, or
expenses of the facility (but not both revenues and
expenses). A tiered Productivity Award will be treated
as a stated amount or a Periodic Fixed Fee, as
appropriate.
4. 5 years, cancelable by the 4. At least 50% of compensation for each annual period
Qualified User at the end of 3 must be based on a Periodic Fixed Fee or, alternatively,
years without penalty. 100% must be based on a Capitation Fee or any
combination of Periodic Fixed Fees and Capitation Fees.
5. 3 years, cancelable by the 5. 100% of compensation may be based on a Per-Unit Fee
Qualified User at the end of 2 stated in the contract or otherwise specifically limited by
years without penalty. the governmental service recipient or an independent
third. party (e.g., Medicare reimbursement formulas).
Alternatively, 100% of compensation may be based on
any combination of Periodic Fixed Fees and Per-Unit
Fees.
D-2
24424501 034513 TAGMT
Contract Maximum Term Limit Permissible Compensation Arrangements
6. 2 years, cancelable by the 6. 100% of compensation may be based on a percentage of
Qualified ,User at the end of 1 the fees charged at the bond-financed facility except that,
year without penalty. during the start-up period of the facility, it may be based
on either gross revenues, gross revenues adjusted for bad
debt or similar allowances or the expenses of the facility.
This compensation arrangement is available only (i)with
respect to facilities providing services to third parties
(e.g., radiology facilities) or (ii)during an initial start-up
period during which operations have been insufficient to
permit a reasonable estimate of annual gross revenues.
Definitions Relevant to Permissible Compensation Arrangements.
1. Periodic Fixed Fee is a stated dollar amount for services rendered for a
specified period of time. The stated dollar amount may automatically increase according to a
specified objective external standard that is not linked to the output or efficiency of a facility,
e.g., the Consumer Price Index and similar external indices that track increases in prices in an
area or increases in revenues or costs in an industry are objective external standards.
2. Capitation Fee is a fixed periodic amount payable for each person for
whom services are provided (e.g., an HMO member) as long as the quantity and type of services
actually provided vary substantially from person to person. A capitation fee may include a
variable component of up to 20% of the total capitation fee designed to protect the Provider
against risks such as catastrophic loss.
3. Per-Unit Fee is a stated amount for each unit of services provided (e.g.,
medical procedure performed, car parked, passenger mile traveled, ton of waste incinerated, unit
of landfill capacity consumed). The stated dollar amount may automatically increase according
to a specified objective external standard that is not linked to the output or efficiency of a
facility, e.g., the Consumer Price Index and similar external indices that track increases in prices
in an area or increases in revenues or costs in an industry are objective external standards.
4. Productivity Award is (i) a stated dollar amount of additional
compensation based on increases or decreases in gross revenues or reductions in total expenses
(but not both) in any annual period during the term of a contract, or (ii) a stated dollar amount, a
periodic fixed fee, or a tiered system of stated dollar amounts or periodic fixed fees where the
eligibility for the award is based on the quality of the services provided under the management
contract rather than increases in revenues or decreases in expenses of the facility and the amount
of the productivity award is based solely on the level of performance achieved with respect to the
applicable measure.
5. Renewal Option is a provision under which the Provider has a legally
enforceable right to renew the contract. Thus, for example, a provision under which a contract is
automatically renewed for one-year periods absent cancellation by either party is not a renewal
option(even if it is expected to be renewed).
D-3
2442450.1 034513 TAGMT
Revision of Management Contract.
If the compensation arrangements of a management contract are materially revised, the
requirements for compensation arrangements are retested as of the date of the material revision
and the management contract is treated as one that was newly entered into as of the date of the
material revision.
Certain Exceptions.
Certain arrangements generally are not treated as management contracts.that are subject
to the above rules. These include:
(a) Contracts for services that are solely incidental to the primary governmental
function or functions of a bond-financed facility (e.g., contracts for janitorial, office equipment
repair,hospital billing or similar services);
(b) The mere granting of admitting privileges by a hospital to a doctor, even if those
privileges are conditioned on the provision of de minimis services, if those privileges are
available to all qualified physicians in the area, consistent with the size and nature of its
facilities;
(c) A contract to provide for the operation of a facility or system of facilities that
consists predominantly of public utility property (as defined in Section 168(i)(10) of the Code),
if the only compensation is the reimbursement of actual and direct expenses of the Provider and
reasonable administrative overhead expenses of the Provider; and
(d) A contract to provide for services, if the only compensation is the reimbursement
of the Provider for actual and direct expenses paid by the Provider to unrelated parties.
D-4
2442450.1 034513 TAGMT
EXHIBIT E
CERTIFICATE OF PURCHASER
(see attached)
2442450.1 034513 TAGMT
Issue Price Certificate
April 8,2015
TOWN OF SOUTHOLD
(Issuer)
RE: TOWN OF SOUTHOLD,New York
$729,000 Various Puryoses Bond Anticipation Note-2015(the"Note")
The undersigned,acting on behalf of Capital One Public Funding,LLC,Melville,New
York (the "Purchaser"), hereby represents as follows with respect to the above-captioned note
(the"Note"):
(1) On April 8, 2015 (the "Sale Date"), the Purchaser purchased the Note directly
from the Issuer. The par amount and the stated interest rate for the Note are listed as follows:
Lot Par Amount Stated Interest Rate
$729,000. 1.27%
(2) The Note is being purchased in a direct, private placement transaction and the
terms of the sale and purchase have been established through negotiations between the Purchaser
and the Issuer in an arm's-length transaction. Based upon such negotiations and taking into
account the private placement nature of the transaction,the stated interest rate for the Note is the
fair market value interest rate as of the date hereof,given the purchase price for the Note.
(3) The purchase price for the Note is an amount equal to the aggregate principal
amount of the Note(i.e., $729,000). The Purchaser acknowledges that such price will be relied
on by the Issuer and Hawkins Delafield & Wood LLP, Bond Counsel, as the issue price for
establishing the yield on the Note.
(4) The Purchaser is purchasing the Note for its own account as an investor and/or for
deposit into a fund or trust for the purpose of selling interests in the trust. If the Purchaser, or
any party related to the Purchaser, transfers or sells the Note, or any interest in the Note, to a
fund or trust established by the Purchaser or a related party,the beneficial ownership'of which is
not entirely retained by the Purchaser or related party,or otherwise participates in a reoffering of
,the Note or the offering of any derivative product(e.g.,a tender option)with respect to the Note,
then either(i) such transfer, sale, reoffering or offering will not occur within 60 days of the date
hereof, during which time the Note will be beneficially owned, directly or indirectly, by the
Purchaser or a related party for its exclusive benefit,risk and account,or(ii)both(A)the price at
which the Note is transferred, sold or reoffered and (B), if there be a division and sale of
ownership rights in the Note, the aggregate price at which such rights are sold, will not exceed
the par value of the Note, unless Bond Counsel provides a written opinion that the failure to
satisfy this paragraph(4)will not adversely affect the exclusion from gross income of interest on
the Note.
(5) The Purchaser will not receive any commission or fee in connection with the
purchase of the Note.
The Purchaser understands that the representations contained herein may be relied upon
by the Issuer in making certain of the representations contained in the Tax Certificate executed
by the Issuer in connection with the issuance of the Note, and the Purchaser further understands
that Hawkins Delafield&Wood LLP,Bond Counsel to the Issuer,may rely upon this certificate,
among other things, in providing an opinion with respect to the exclusion from gross income of
the interest on the Note pursuant to Section 103 of the Internal Revenue Code of 1986, as
amended.
[The remainder of this page left blank intentionally.]
The undersigned is authorized to execute this certificate on behalf of the Purchaser,
which certifications are not necessarily based on personal knowledge,but may instead be based
on either inquiry deemed adequate by the undersigned or institutional knowledge (or both)
regarding the matters set forth herein.
Very truly yours,
Capital One Public Funding,LLC,
Melville,New Stork
By:
Name:Catherine DeLuca
Title:Vice President
EXHIBIT F
FINANCING SCHEDULES
(see attached)
2442450 1 034513 TAGMT
$729,000
Town of Southold,New York
Various Purposes Bond Anticipation Note-2015
New Structure Summary And Results
Dated Date April 8,2015
Issue Date April 8,2015
Final Maturity April 7,2016
Optional Redemptions Call Dates Call Price
NIA NIA
NIA NIA
NIA N/A
Arbitrage Yield 1.266015%
N.I.C. 1.270000%
(Net Interest Cost)
W.A.M. 0.9972 Years
(Weighted Average Maturity In Years)
R.W.A.M. (for refundings only)
(Remaining Weighted Average Maturity In Years)
Current Refundings 0.0027 Years
Arbitrage Yield Target
Par Amount + 729,000.00
OIP/(OID) + -
Credit Enhancement + -
Accrued Interest + -
Total 729,000.00
Adjusted Total for N.I.0
Total Interest Cost + 9,23258
OIP/(OID) - -
Accrued Interest - -
Adjusted Total 9,232.58
2442428_1 As 4/3/2015 12 55 PM 1 of 3
$729,000
Town of Southold,New York
Various Purposes Bond Anticipation Note-2015
Arbitrage Yield Analysis
Present
Value to
Maturity Principal Total Annual 04/08/15
Date Amount Coupon Interest' Debt Service Debt Service 1.266015%
04/08/15
04/08/15
04/07/16 729,000.00 1 270% 9,23258 738,232 58 738,232.58 729,000.00
Totals 729,000.00 9,232.58 738.232.58 738,232.58 729,000.00
Arbitrage Yield Target
Par Amount + 729,000.00 Target: 729,000.00
OIP/(OID) + - Variance: -
Credit Enhancement + -
Accrued Interest + -
Total 729,000.00
Notes
'Interest calculations are based on 30/360 day basis.
2442428 1.xls 4/3/2015 12.55 PM 2 of 3
$729,000
Town of Southold,New York
Various Purposes Bond Anticipation Note-2015
Price/Yields,Weighted Average Maturity and Net Interest Cost
Maturity Principal Priced Years to Bond Yield To Call
Date Amount Coupon Yield Price to— Issue Price Maturity Years Note?
04/08/15
04/08/15
04/07/16 729,000 00 1 270% 1.270% 100 000 Maturity 729,000 00 1.00 726,975 -
Totals 729,000.00 729,000.00 726.975.00
Total Interest Cost + 9,23258 W.A.M = 09972
OIP/(OID) - (Weighted Average Malunty)
Accrued Interest - N.I.C. = 1270000%
Adjusted Total 9,232.58 (Net Interest Cost)
2442428-1.xls 4/3/2015 12.55 PM 3 of 3
EXHIBIT G
PROCEDURES FOR POST-ISSUANCE
COMPLIANCE WITH FEDERAL TAX LAW
State and local governmental entities, including cities, towns, villages and school
districts, that borrow money on a tax-exempt basis are required to report to the Internal Revenue
Service whether they have established written procedures to comply with applicable
requirements of federal tax law for all issues of federally tax-exempt bonds, bond anticipation
notes, tax anticipation notes, revenue anticipation notes, financing leases, energy performance
contract financings, and any other instruments evidencing the borrowing of money (collectively
the "Obligations"). The procedures set forth herein will assist the Town of Southold, in the
County of Suffolk,New York(the"Issuer") in meeting the post-issuance requirements of federal
tax law necessary to preserve the tax-exempt status of interest on Obligations issued by the
Issuer.
These procedures address Obligations issued for physical facilities and equipment for the
Issuer (the "Capital Obligations') and Obligations issued to finance cash-flow operating
requirements of the Issuer(the"Cash-Flow Obligations").
I. GENERAL PROCEDURES
A. Responsible Official. The Supervisor of the Issuer (herein referred to as the
"Responsible Official") will identify such officers and employee(s), who will be responsible for
each of the procedures listed below, and will notify such officers and employee(s) of the
responsibilities, and provide those persons with a copy of these procedures. Upon employee
transitions, the Responsible Official will advise the new personnel of their responsibilities under
these procedures and will ensure they understand the importance of these procedures. If
employee positions are restructured or eliminated, the Supervisor of the Issuer will reassign
responsibilities as necessary.
2442450.1 034513 TAGMT
B. Issuance of Obligations.
1. Bond Counsel. The Issuer will retain a firm of nationally-recognized bond
counsel ("Bond Counsel") to deliver a legal opinion in connection with the issuance of all
Obligations. The Responsible Official will consult with Bond Counsel and other legal counsel
and advisors, as needed, following the issuance of Obligations to ensure that applicable post-
issuance requirements are met, so that interest on each issue of Obligations will be excluded
from gross income for federal income tax purposes.
2. Documentation of Tax Requirements. The federal tax requirements
relating to each issue of Obligations will be set forth in a Tax Certificate (the "Tax Certificate")
executed in connection with each issue of Obligations, which will be included in the closing
transcript for each issue of Obligations. The Tax Certificate will contain certifications,
representations, expectations and factual statements relating to the restriction on use of the
facilities financed with Obligations by persons or entities other than the Issuer, changes in use of
the facilities financed or refinanced with the proceeds of Obligations, restrictions applicable to
the investment of the proceeds of any Obligations and other moneys relating to the Obligations,
and arbitrage rebate requirements. The Responsible Official will review the Tax Certificate prior
to the date of issue of each issue of Obligations.
3. Information Reporting. In connection with each issue of Obligations, the
Issuer is required to file, or shall cause to be filed by Bond Counsel, an IRS Form 8038-G (or, if
applicable, IRS Form 8038-GC). Any such IRS Form filed with the IRS, together with a proof
of filing, will be included as part of the closing transcript for each issue of Obligations, or kept in
the records maintained by Bond Counsel related to the appropriate issue of Obligations. The
Responsible Official shall ascertain that such form has been filed in connection with each issue
of Obligations.
C. Record Retention.
I. General. Copies of all relevant documents and records sufficient to
support that the tax requirements relating to all Obligations have been satisfied, including the
following documents and records, should be maintained by the Issuer:
2442450.1 034513 TAGMT
(a) Closing transcript;
(b) All records of investments, arbitrage reports,returns filed with the IRS
and underlying documents;
(c) Construction contracts,purchase orders, invoices and expenditure and
payment records;
(d) Documents relating to costs reimbursed with the proceeds of Capital
Obligations;
(e) All contracts and arrangements involving Private Use of the property
financed with Capital Obligations;
(f) All reports relating to the allocation of the proceeds of Obligations and,
Private Use of property financed with Capital Obligations;
(g) Itemization of property financed with the proceeds of Capital Obligations;
and
(h) In connection with Cash-Flow Obligations, information regarding the
Issuer's revenue, expenditures and available balances sufficient to support
the Issuer's prospective and actual maximum cumulative cash-flow deficit
calculations.
2. Duration of Record Retention. All of the foregoing documents and
records should be retained for the term of the Obligations, plus three (3) years, or if the
Obligations are refunded with the proceeds of a subsequent Obligation, the date three (3) years
after the last of such refunding Obligations are refunded.
D. Capital Obligations.
1. Timely Expenditure of Proceeds of Capital Obligations. At the time of
issuance of Capital Obligations issued to fund original expenditures, the Issuer must reasonably
expect to spend at least 85% of all proceeds within three (3) years of the date of issuance of the
Obligations. In addition, for Capital Obligations, the Issuer must have incurred or expect to
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incur within six months after issuance original expenditures of not less than 5% of the amount of
such proceeds, and must expect to complete the project financed with Capital Obligations (the
"Project") and expend the proceeds of such Capital Obligations to pay Project costs with due
diligence. Satisfaction of these requirements allows the proceeds of Capital Obligations issued
for the Project to be invested at an unrestricted yield for three (3) years. Failure to satisfy these
requirements could subject the Issuer to rebate of investment income, and other penalties. The
Responsible Official will monitor the appropriate capital project accounts to ensure that the
proceeds of Capital Obligations are spent within the time period(s) required under federal tax
law.
Capital Obligations issued to refinance outstanding Capital Obligations are
subject to separate expenditure requirements, which shall be outlined in the Tax Certificate
relating to such Obligations. In connection with the issuance of any Capital Obligations issued
to refinance outstanding Capital Obligations, the Responsible Official will confirm that any
rebate obligation due with respect to the original issue and any subsequent refinancing thereof
has been met.
2. Use of Proceeds of Capital Obligations. In general, proceeds (including
investment income on original sale proceeds) of Capital Obligations, other than proceeds used to
pay costs of issuance, should be spent on capital expenditures. For this purpose, capital
expenditures generally mean costs to acquire, construct, or improve property (land,buildings and
equipment). Capital Expenditures include design and planning costs related to the Project, and
include architectural, engineering, surveying, soil testing, environmental, and other similar costs
incurred in the process of acquiring, constructing, improving or adapting the property. Capital
Expenditures do not include operating expenses of the Project.
3. Use of Facilities Financed with Capital Obligations. For the life of all
Capital Obligations, the Project must be owned and operated by the Issuer. At all times while
Capital Obligations issued for a Project are outstanding, no more than 10% of the proceeds of
such Capital Obligations may used, directly or indirectly, in a trade or business carried on by a
person other than a state or local governmental unit ("Private Use"). Generally, Private Use
consists of any contract or other arrangement, including leases, management contracts (for
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example, contracts relating to the operation of a school cafeteria or to food service providers),
operating agreements and guarantee contracts which provides for use of the facilities financed
with Capital Obligations by a person who is not a state or local government on a basis different
than the general public. The Project may be used by any person or entity, including any person
or entity carrying on any trade or business,if such use constitutes"General Public Use". General
Public Use is any arrangement providing for use that is available to the general public at either
no charge or on the basis of rates that are generally applicable and uniformly applied.
4. Management or Operating Agreements for Facilities Financed with
Capital Obligations. Any management, operating or service contracts whereby a non-exempt
entity is using facilities financed or refinanced with the proceeds of Capital Obligations must
relate to portions of the Project that fit within the above-mentioned 10% allowable Private Use,
or the contracts must meet the IRS safe harbor for management contracts (Rev. Proc. 97-13).
Any renewals of or changes to such contracts should be reviewed by Bond Counsel. The
Responsible Official shall contact Bond Counsel if there may be a lease, sale, disposition or
other change in use of facilities financed or refinanced with the proceeds of Capital Obligations.
E. Cash-Flow Obligations.
1. Proper Sizing of Cash-Flow Obligations.
(a) If the Issuer is not subject the small issuer exemption from rebate, at the
time of issuance of Cash-Flow Obligations, the Issuer must anticipate that it will incur an actual
maximum cumulative cash-flow deficit on a date on or before the close of the six-month period
commencing on the issue date of the Cash-Flow Obligations equal to at least 90% of the issue
price of the Cash-Flow Obligations.
(b) If the Issuer is subject to the small issuer exemption from rebate, at the
time of issuance of Cash-Flow Obligations, the Issuer must anticipate that it will incur an actual
maximum cumulative cash-flow deficit on a date on or before the close of the twelve-month
period commencing on the issue date of the Cash-Flow Obligations equal to at least 100% of the
issue price of the Cash-Flow Obligations (which may include taking into account the Issuer's
"reasonably required working capital reserve").
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(c) The Responsible Official will determine the appropriate amount of Cash-
Flow Obligations to issue.
(d) With respect to Issuers not subject to the small issuer exemption from
rebate, the Responsible Official shall determine whether or not the Issuer has met its requisite
maximum cumulative cash-flow deficit within six months following the date of issuance of the
Cash-Flow Obligations, and shall, to the extent necessary, obtain assistance from the Arbitrage
Rebate Consultant,referred to below.
F. Investment Restrictions; Arbitrage Yield Calculation; Rebate.
1. Investment Restrictions. Investment restrictions relating to the proceeds
of Obligations and other moneys relating to the Obligations are set forth in the Tax Certificate.
The Responsible Official will monitor the investment of the proceeds of Obligations to ensure
compliance with yield restriction rules.
2. Arbitrage Yield Calculation. Investment earnings on the proceeds of
Obligations should be tracked and monitored to comply with applicable yield restrictions and/or
rebate requirements. The Issuer is responsible for calculating (or causing the calculation of)
rebate liability for each issue of Obligations, and for making any required rebate payments. Any
funds of the Issuer set aside or otherwise pledged or earmarked to pay debt service on the
Obligations should be analyzed to assure compliance with the tax law rules on arbitrage,invested
sinking funds and pledged funds (including gifts or donations linked to facilities financed with
Capital Obligations). The Responsible Official will consult with Bond Counsel to confirm that
all relevant arbitrage yield requirements are met.
3. Rebate. On or before the date of any required rebate payment(see below),
the Issuer will retain a nationally recognized arbitrage rebate consultant (the "Arbitrage Rebate
Consultant") to perform rebate calculations that may be required to be made from time to time
with respect to any issue of Obligations. The Responsible Official shall provide the Arbitrage
Rebate Consultant with requested documents and information on a prompt basis, reviewing
applicable rebate reports and other calculations and generally interacting with the Arbitrage
Rebate Consultant to ensure the timely preparation of rebate reports and payment of any rebate.
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The reports and calculations provided by the Arbitrage Rebate Consultant will
assure compliance with rebate requirements, which require the Issuer to make rebate payments,
if any, no later than the fifth(5th) anniversary date and each fifth (5th) anniversary date thereafter
through the final maturity or redemption date of a Capital Obligation. A final rebate payment, if
due, must be made within sixty (60) days of the final maturity or redemption date of all
Obligations.
Rebate spending exceptions for Capital Obligations are available for periods of 6
months, 18 months and 2 years. The Responsible Oficial will confer and consult with the
Arbitrage Rebate Consultant to determine whether any rebate spending exception may be met.
In the case of Cash-Flow Obligations, within 60 days of the maturity date of such
Cash-Flow Obligations, if there is concern as to whether the Issuer has met its requisite
maximum cumulative cash-flow deficit, a rebate analyst should be promptly engaged to
determine whether either the six-month spending exception or the statutory safe harbor exception
to the rebate rules was met (in which case no rebate would be owed) or whether the investment
income derived from the proceeds of the Cash-Flow Obligations is subject, in whole or in part,to
rebate.
Copies of all arbitrage rebate reports, related return filings with the IRS (i.e., IRS
Form 8038-T), copies of cancelled checks with respect to any rebate payments, and information
statements must be retained as described above. The Responsible Official will follow the
procedures set forth in the Tax Certificate that relate to compliance with the rebate requirements
with respect to any Obligations.
II. ADDITIONAL PROCEDURES.
A. Periodic Monitoring. The Responsible Official will conduct periodic reviews of
compliance with the foregoing procedures to determine whether any violations have occurred so
that such violations can be remedied through the "remedial action" regulations (Treas. Reg.
Section 1.141-12) or the Voluntary Closing Agreement Program (VCAP) described in IRS
Notice 2008-31 (or successor guidance). If any changes to the terms or provisions of any
Obligations are contemplated, the Responsible Official will consult with Bond Counsel, because
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Y
a
such modifications could jeopardize the tax-exempt status of interest on the Obligations after
they are modified.
B. Use of Facilities. The Responsible Official will maintain records identifying any
Private Use of the facilities or portion of facilities that are financed or refinanced with proceeds
of Capital Obligations. Such records may be kept in any combination of paper or electronic
form. In the event the use of the proceeds of Capital Obligations of the facilities financed or
refinanced with the proceeds of Capital Obligations differs from the representations or factual
statements in the Tax Certificate,the Responsible Official will promptly contact and consult with
Bond Counsel to ensure that there is no adverse effect on the tax-exempt status of the Capital
Obligations and, where appropriate, will remedy any violations through the "remedial action"
regulations (Treas. Reg. Section 1.141-12), the Voluntary Closing Agreement Program (VCAP)
described in IRS Notice 2008-31 (or successor guidance), or as otherwise prescribed by Bond
Counsel.
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