This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the Series 2016 Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, qualification or exemption under the securities laws of such jurisdiction. The City has deemed this Preliminary Official Statement “final,” except for certain permitted omissions, within the contemplation of Rule 15c2‑12 promulgated by the Securities and Exchange Commission. of theSeries2016BondsandSalesTaxRefundingRevenueBonds,2010. Bonds (asdefinedintheBondResolution)payableonaparitywithCity’sSalesTaxRevenueBonds,Series2006,notrefunded proceeds Revenues inaccordancewiththeprovisionsofBondResolution(asdefinedherein).TheSeries2016Bondsarebeingissuedas Additional Revenue Fund.Principalof,premium,ifany,andinterestontheSeries2016Bondsarepayablefromsecuredbyapledgeof Pledged (collectively, the“BondResolution”). by theCityCouncilonSeptember16,2010,andassupplementedResolutionNo.2016-684adoptedAugust 25,2016 and asparticularlyamendedbyResolutionNo.2006-1423adoptedtheCityCouncilonNovember9,20062010-805 adopted applicable laws,andResolutionNo.2001-1209adoptedbytheCityCouncilonOctober4,2001,asamendedsupplementedfromtime totime, including, particularly,Section212.055(2),FloridaStatutes,Chapter166,PartsIIandIII,theCharterofCity, allother “2016 PROJECT”and“THEREFUNDINGPLAN”herein. Tax RevenueBonds,Series2006(the“RefundedBonds”),asdescribedhereinand(iii)paycertaincostsofissuancethe2016Bonds. See various capitalimprovementswithintheCity,asmorefullydescribedherein,(ii)refundalloraportionofCity’scurrentlyoutstanding Sales of, redemptionpremium,ifapplicable,andinterestontheSeries2016BondsshallbepayableinlawfulmoneyofUnitedStates America. the insidecover.U.S.BankNationalAssociation,Miami,Florida,isservingasinitialRegistrarandPayingAgent.Allpaymentsof principal of each year, commencingApril 1,2017. Principal ofthe Series 2016Bonds is payable on October1 of theyears and intheamounts as shown on (as definedherein)forsubsequentdisbursementtotheBeneficialOwners.InterestonSeries2016BondsispayableApril1andOctober principal andinterestpayments will bemadedirectlytosuchregisteredowner which will in turn remit suchpaymentstotheDirect Participants Bonds willbeeffectedthroughDTC’sbook-entrysystemasdescribedherein.AslongCede&Co.istheregisteredownernomineeofDTC, 2016 Bonds(the“BeneficialOwners”)willnotreceivephysicaldeliveryoftheSeriesBonds.Transferownershipin Company (“DTC”).Individualpurchaseswillbemadeinbook-entryformonlydenominationsasdescribedherein.PurchasersoftheSeries “Series 2016Bonds”)asfullyregisteredbonds,whichinitiallywillbeinthenameofCede&Co.,nomineeforTheDepositoryTrust * Preliminary, subjecttochange. This OfficialStatement isdated______,2016. Dated: DateofDelivery discussion ofBondCounsel’sopinionandothertaxconsiderations. be subjecttootherfederalincometaxconsequencesreferredhereinunder“TAXEXEMPTION.”SeeEXEMPTION”forageneral corporations. Suchinterest,however,willbeincludableinthecalculationofacorporation’salternativeminimumtaxableincomeandmay “TAX EXEMPTION,”and(b)notanitemoftaxpreferenceforpurposesthefederalalternative minimum taximposedonindividualsor excludable fromgrossincomeoftheownersthereofforfederaltaxpurposesexceptasotherwisedescribedhereinundercaption and courtdecisionssubjecttotheconditionsdescribedhereinunder“TAXEXEMPTION,”interestonSeries2016Bondsis(a) NEW ISSUE-FULLBOOKENTRY constitutional B source SERIES 2016 B of t payable be the OfficialNotice ofSale. delivery throughthefacilitiesof DTC inNewYork,YorkonoraboutSeptember 28,2016. in connectionwiththeissuance oftheSeries2016Bonds.ItisexpectedthatBonds indefinitiveformwillbeavailablefor Chief AssistantCityAttorney.Public ResourcesAdvisoryGroup,Inc.,St.Petersburg,Florida,is servingasFinancialAdvisortotheCity Miller Olive,P.A.,Tampa,Florida, asDisclosureCounsel.Certainotherlegalmatterswillbepassed uponfortheCitybySalvatoreTerrito, by Nabors,Giblin&Nickerson,P.A., Tampa,Florida,BondCounsel.Certainotherlegalmatters willbepasseduponfortheCitybyBryant Official Statementtoobtaininformationessentialthemakingof aninformedinvestmentdecision. against laws BOND R indebtedness political B h onds onds
e t plainly CITY, The Cityhascovenanted to take all actionsnecessarytocollect,receiveanddeposit the SalesTaxRevenues(asdefined herein)inthe The 2016Bondsarebeingissued pursuant to the authorityofandinfull compliance with theConstitutionandlawsof State ofFlorida, The Series2016Bondsarebeingissuedtoprovideaportionofthefunds(i)financecostsacquisition,constructionandequipping of The Series2016Bondsarenotsubjecttoredemptionpriormaturity. The CityofTampa,Florida(the“City”)isissuingits$51,665,000*SalesTaxRefundingandImprovementRevenueBonds,Series2016 In theopinionofNabors,Giblin&Nickerson,P.A.,Tampa,Florida(“BondCounsel”),underexistingstatutes,regulations,rulings Th Electronic bidsfortheSeries 2016 BondswillbereceivedthroughParityElectronicBid Submission Systemasdescribedin The Series2016Bondsareoffered fordeliverywhen,asandifissuedreceivedbytheUnderwriter, subjecttotheapprovaloflegality This coverpagecontainscertaininformationforquickreference only. Itisnotasummaryofthisissue.Investorsmustreadtheentire h
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$51,665,000* CITY OF TAMPA, FLORIDA Sales Tax Refunding and Improvement Revenue Bonds, Series 2016
Maturities, Principal Amounts, Interest Rates, YIELDS, Prices and INITIAL CUSIP Numbers Maturity Principal Interest Initial CUSIP (October 1)* Amount* Rate Yield Price Numbers** 2017 $4,280,000 2018 4,435,000 2019 4,570,000 2020 4,755,000 2021 4,945,000 2022 5,190,000 2023 5,450,000 2024 5,720,000 2025 6,010,000 2026 6,310,000
* Preliminary, subject to change. ** The City is not responsible for the use of CUSIP numbers, nor is any representation made by the City as to their correctness. The CUSIP numbers provided herein are included solely for the convenience of the readers of this Official Statement. CITY OF TAMPA, FLORIDA
ELECTED OFFICIALS
Bob Buckhorn, Mayor
CITY COUNCIL
Mike Suarez, Chair Harry Cohen, Chair Pro Tem Yvonne Yolie Capin Guido Maniscalco Charlie Miranda Lisa J. Montelione(1) Frank Reddick
APPOINTED OFFICIALS
Julia Mandell, Esq., City Attorney Salvatore Territo, Esq., Chief Assistant City Attorney Sonya C. Little, Chief Financial Officer Shirley Foxx-Knowles, City Clerk
FINANCIAL ADVISOR
Public Resources Advisory Group Inc. St. Petersburg, Florida
BOND COUNSEL
Nabors, Giblin & Nickerson, P.A. Tampa, Florida
DISCLOSURE COUNSEL
Bryant Miller Olive P.A. Tampa, Florida
(1) Lisa Montelione has submitted her resignation effective November 8, 2016. The General Election will be held on November 8, 2016, which will include the election for the new City Council Member for District 7.
No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations in connection with the Series 2016 Bonds other than as contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the City. 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 Series 2016 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City, DTC and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness by and is not to be construed as a representation by the City with respect to any information provided by others. The information and expressions of opinion stated herein are subject to change, and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in the matters described herein since the date hereof. The Underwriter has reviewed the information in this Official Statement in accordance with and as part of its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2016 BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Series 2016 Bonds are qualified in their entirety by reference to the form thereof included in the aforesaid documents and agreements.
NO REGISTRATION STATEMENT RELATING TO THE SERIES 2016 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2016 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.
CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS OFFICIAL STATEMENT CONSTITUTE "FORWARD LOOKING STATEMENTS." SUCH STATEMENTS GENERALLY ARE IDENTIFIABLE BY THE TERMINOLOGY USED, SUCH AS "PLAN," "EXPECT," "ESTIMATE," "BUDGET" OR OTHER SIMILAR WORDS. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, SUBJECT TO ANY CONTRACTUAL OR LEGAL RESPONSIBILITIES TO THE CONTRARY.
THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE A CONTRACT BETWEEN THE CITY AND ANY ONE OR MORE OF THE OWNERS OF THE SERIES 2016 BONDS.
TABLE OF CONTENTS Page
INTRODUCTORY STATEMENT ...... 1 AUTHORITY FOR ISSUANCE ...... 1 2016 PROJECT ...... 2 THE REFUNDING PLAN ...... 2 DESCRIPTION OF THE SERIES 2016 BONDS ...... 3 General ...... 3 Book-Entry Only System ...... 4 No Redemption of Series 2016 Bonds ...... 6 Transfer and Exchange of Series 2016 Bonds ...... 6 Series 2016 Bonds Mutilated, Destroyed, Lost or Stolen ...... 7 SECURITY FOR THE BONDS ...... 7 General ...... 7 Series 2016 Bonds Not a Debt of the City ...... 7 Reserve Funding Option ...... 8 Additional Bonds ...... 8 FLOW OF FUNDS ...... 9 Funds and Accounts ...... 9 Construction Fund ...... 10 Application of Revenue Fund ...... 10 COVENANTS OF THE CITY ...... 12 No Impairment ...... 12 Investments ...... 12 Annual Audit ...... 12 Covenant to Comply with the Requirements of Section 212.055(2), Florida Statutes and the Community Investment Interlocal Agreement ...... 13 Events of Default ...... 13 Acceleration of Maturities ...... 14 DISCRETIONARY SALES SURTAX ...... 14 General ...... 14 History and Authorization ...... 14 Collections ...... 15 Sales Tax Revenues ...... 16 ESTIMATED SOURCES AND USES OF FUNDS ...... 20 DEBT SERVICE REQUIREMENTS FOR THE BONDS ...... 21 AUDITED FINANCIAL STATEMENTS ...... 22 INVESTMENT POLICY ...... 22 TAX EXEMPTION ...... 22 Opinion of Bond Counsel ...... 22 Internal Revenue Code of 1986 ...... 23 Collateral Tax Consequences ...... 23 Other Tax Matters ...... 23 Tax Treatment of Original Issue Discount ...... 24 Tax Treatment of Bond Premium ...... 24 LITIGATION ...... 24 LEGAL MATTERS ...... 25
i VERIFICATION OF ARITHMETICAL COMPUTATIONS ...... 25 RATINGS ...... 25 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ...... 26 CONTINUING DISCLOSURE ...... 26 UNDERWRITING ...... 28 FINANCIAL ADVISOR ...... 28 ENFORCEABILITY OF REMEDIES ...... 28 CONTINGENT FEES ...... 28 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT ...... 29 AUTHORIZATION OF OFFICIAL STATEMENT ...... 29
APPENDIX A – General Information Regarding the City of Tampa APPENDIX B – General Purpose Financial Statements for Fiscal Year Ended September 30, 2015 APPENDIX C – Composite of the Bond Resolution APPENDIX D – Form of Bond Counsel Opinion APPENDIX E – Form of Continuing Disclosure Agreement
ii OFFICIAL STATEMENT relating to
$51,665,000* CITY OF TAMPA, FLORIDA Sales Tax Refunding and Improvement Revenue Bonds, Series 2016
INTRODUCTORY STATEMENT
This Official Statement, including the cover page and the appendices hereto, is furnished with respect to the sale of $51,665,000* aggregate principal amount of Sales Tax Refunding and Improvement Revenue Bonds, Series 2016 (the "Series 2016 Bonds") issued by the City of Tampa, Florida (the "City").
This introduction is not, and is not intended to be, a summary of this Official Statement. It is only a brief description of, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page, inside cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Series 2016 Bonds is made only by means of this Official Statement and is subject in all respects to the information contained herein.
The Series 2016 Bonds are being issued to provide a portion of the funds to (i) finance the costs of acquisition, construction and equipping of various capital improvements within the City, as more fully described herein, (ii) refund all or a portion of the City's currently outstanding Sales Tax Revenue Bonds, Series 2006 (the "Refunded Bonds"), as described herein and (iii) pay certain costs of issuance of the Series 2016 Bonds. See "2016 PROJECT" and "THE REFUNDING PLAN" herein.
The Series 2016 Bonds are being issued as Additional Bonds (as defined in the Bond Resolution) and payable on a parity with the City's Sales Tax Revenue Bonds, Series 2006 (the "Series 2006 Bonds"), not refunded with proceeds of the Series 2016 Bonds and the Sales Tax Refunding Revenue Bonds, Series 2010 (the "Series 2010 Bonds") (the Series 2016 Bonds, the Series 2006 Bonds and the Series 2010 Bonds are hereinafter collectively, the "Bonds").
The purpose of this Official Statement, which includes the cover page, inside cover page and the Appendices, is to present information for the offering of the Series 2016 Bonds by the City. Definitions of certain words and terms having initial capitals used herein and in the hereinafter described Bond Resolution are contained in the Composite of the Bond Resolution attached as APPENDIX C hereto.
AUTHORITY FOR ISSUANCE
The Series 2016 Bonds will be issued pursuant to the authority of and in full compliance with (a) the Constitution and the laws of the State of Florida, including particularly Section 212.055(2), Florida Statutes, Chapter 166, Parts II and III, Florida Statutes, the Charter of the City, and all other applicable laws, and (b) Resolution No. 2001-1209 adopted by the City Council on October 4, 2001, as amended and supplemented from time to time, and as particularly amended by Resolution No. 2006- 1423 adopted by the City Council on November 9, 2006 and Resolution No. 2010-805 adopted by the
*Preliminary, subject to change.
1 City Council on September 16, 2010, and as supplemented by Resolution No. 2016-684 adopted by the City Council on August 25, 2016 (collectively, the "Bond Resolution").
2016 PROJECT
The "2016 Project" is defined to include the construction of stormwater projects; bridge rehabilitation; parks and recreation improvements; construction of a new fire station; improvements to existing fire stations; and the acquisition of public safety vehicles.
THE REFUNDING PLAN
The City has determined that it can achieve present value savings in debt service payments by providing for payment of the Refunded Bonds. Provision for payment will be accomplished through the issuance of the Series 2016 Bonds and the use of a portion of the proceeds thereof, together with other legally available funds of the City, to refund the Refunded Bonds. The callable Refunded Bonds are expected to be redeemed prior to maturity on October 31, 2016 at a redemption price of 100 percent of the principal amount thereof, plus accrued interest to the redemption date.
Upon delivery of the Series 2016 Bonds, U.S. Bank National Association, Orlando, Florida (the "Escrow Agent"), will enter into an Escrow Deposit Agreement (the "Escrow Agreement") with the City to provide for the refunding of the Refunded Bonds. The Escrow Agreement creates an irrevocable escrow deposit trust fund (the "Escrow Fund") which is held by the Escrow Agent. The funds held in the Escrow Fund shall be applied to the payment of principal of, premium and interest on the Refunded Bonds. Immediately upon the issuance and delivery of the Series 2016 Bonds, the City will deposit certain of the proceeds from the sale of the Series 2016 Bonds into the Escrow Fund together with other legally available moneys of the City. Money deposited into the Escrow Fund may be invested in direct United States Treasury obligations (the "Federal Securities") maturing in amounts and bearing interest at rates sufficient, together with any cash held uninvested in the Escrow Fund, to legally defease the Refunded Bonds, or held as uninvested cash, in accordance with the Bond Resolution. The maturing principal amount of and interest on the Federal Securities, if any, and any cash held in the Escrow Fund, in the amounts needed to pay the principal of, premium and interest on the Refunded Bonds, are pledged solely for the benefit of the holders of the Refunded Bonds, and will not be available for payment of debt service on the Series 2016 Bonds.
Grant Thornton LLP will verify the accuracy of the arithmetical computations of the adequacy of the maturing principal amount of, and interest on, the Federal Securities, if any, together with any uninvested amounts, to be held in the Escrow Fund to pay the principal of, premium and interest on the Refunded Bonds through and including the redemption date of October 31, 2016. See "VERIFICATION OF ARITHMETICAL COMPUTATIONS" herein.
In reliance upon the above-referenced schedules and verification, at the time of delivery of the Series 2016 Bonds, Bond Counsel shall deliver an opinion to the City to the effect that the Bond Resolution and the lien created thereby shall be discharged and satisfied with respect to the Refunded Bonds and the City shall be released from the covenants, agreements and obligations of the City contained in the Bond Resolution with respect to the Refunded Bonds.
2 DESCRIPTION OF THE SERIES 2016 BONDS
General
The Series 2016 Bonds shall be issued in fully registered form, in denominations of $5,000 or any integral multiple thereof. The Series 2016 Bonds are dated the date of their delivery, will mature on the dates, and will bear interest at the rates per annum, all as set forth on the inside cover page.
Interest on the Series 2016 Bonds is payable semiannually on each April 1 and October 1, commencing April 1, 2017 (the "Interest Payment Dates"). Interest payable on the Series 2016 Bonds on any Interest Payment Date will be paid by check or draft of U.S. Bank National Association, Miami, Florida (the "Paying Agent" and "Registrar"), as Paying Agent mailed to the registered holder thereof at the address appearing on the registration books of the City maintained by the Registrar at the close of business on the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date, or at the request of such registered holder, by bank wire transfer for the account of such registered holder. Principal of the Series 2016 Bonds is payable on October 1 of the years and in the amounts set forth on the side cover page. All payments of principal of, redemption price, if applicable, and interest on the Series 2016 Bonds are payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts.
The Series 2016 Bonds will be issued initially as book-entry obligations and held by DTC as securities depository. For more information regarding DTC and DTC's book-entry system, see "DESCRIPTION OF THE SERIES 2016 BONDS -- Book-Entry Only System" below.
With respect to Series 2016 Bonds registered in the name of Cede & Co., as nominee of DTC, neither the City, nor the Paying Agent will have any responsibility or obligation to any direct DTC Participant or to any indirect DTC Participant. See "-- Book-Entry Only System" below for the definition of "DTC Participant." Without limiting the immediately preceding sentence, neither the City nor the Registrar and the Paying Agent will have any responsibility or obligation with respect to: (i) the accuracy of the records of DTC or any DTC Participant with respect to any ownership interest in the Series 2016 Bonds; (ii) the delivery to any DTC Participant or any other person other than a Registered Owner, as shown in the registration books kept by the Registrar, of any notice with respect to the Series 2016 Bonds, including any notice of redemption; or (iii) the payment to any DTC Participant or any other person, other than a Registered Owner, as shown in the registration books kept by the Registrar, of any amount with respect to principal of, premium, if any, or interest on the Series 2016 Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Series 2016 Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Series 2016 Bond for the purpose of payment of principal of, premium, if any, and interest with respect to such Series 2016 Bond, for the purpose of giving notices of redemption and other matters with respect to such Series 2016 Bond, for the purpose of registering transfers with respect to such Series 2016 Bond, and for all other purposes whatsoever. The Paying Agent will pay all principal of, premium, if any, and interest on the Series 2016 Bonds only to or upon the order of the respective Registered Owner, as shown in the registration books kept by the Registrar, or their respective attorneys duly authorized in writing, as provided in the Bond Resolution, and all such payments will be valid and effectual to satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Series 2016 Bonds to the extent of the sums so paid. No person other than a Registered Owner, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the
3 obligation of the City to make payments of principal of, premium, if any, and interest on the Series 2016 Bonds pursuant to the provisions of the Bond Resolution.
Book-Entry Only System
THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE CITY BELIEVES TO BE RELIABLE. THE CITY TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF.
SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2016 BONDS, AS NOMINEE OF DTC, CERTAIN REFERENCES IN THIS OFFICIAL STATEMENT TO THE SERIES 2016 BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 2016 BONDS SHALL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2016 BONDS. THE DESCRIPTION WHICH FOLLOWS OF THE PROCEDURES AND RECORD KEEPING WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2016 BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 2016 BONDS TO DIRECT PARTICIPANTS (AS HEREINAFTER DEFINED) OR BENEFICIAL OWNERS OF THE SERIES 2016 BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2016 BONDS, AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC, THE DIRECT PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 2016 BONDS IS BASED SOLELY ON INFORMATION FURNISHED BY DTC. ACCORDINGLY, THE CITY NEITHER MAKES NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS.
DTC will act as securities depository for the Series 2016 Bonds. The Series 2016 Bonds will be issued as fully-registered securities registered 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 Series 2016 Bond certificate will be issued for each maturity of the Series 2016 Bonds as set forth in the inside cover of this Official Statement, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & 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 Direct Participants and
4 the Indirect Participants are collectively referred to herein as the "DTC Participants." DTC has an S&P Global Inc. ("S&P") rating of AA+. The DTC Rules applicable to its DTC Participants are on file with the Securities and Exchange Commission (the "SEC"). More information about DTC can be found at www.dtcc.com.
Purchases of Series 2016 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2016 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2016 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, 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 Series 2016 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2016 Bonds, except in the event that use of the book-entry system for the Series 2016 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2016 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Series 2016 Bonds 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 Series 2016 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2016 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2016 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2016 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2016 Bonds may wish to ascertain that the nominee holding the Series 2016 Bonds for their benefit has agreed to obtain and transmit notices to 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.
Redemption notices shall be sent to DTC. If less than all of the Series 2016 Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2016 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City 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 Series 2016 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
5 Redemption proceeds, distributions, and dividend payments on the Series 2016 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by DTC 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 DTC Participant and not of DTC, the Paying Agent, or the City, 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 City and/or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Series 2016 Bonds at any time by giving reasonable notice to the City or Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, the Series 2016 Bond certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Series 2016 Bond certificates will be printed and delivered to DTC.
No Redemption of Series 2016 Bonds
The Series 2016 Bonds are not subject to redemption prior to maturity.
Transfer and Exchange of Series 2016 Bonds
So long as the Series 2016 Bonds are registered in the name of DTC or its nominee, the following paragraphs relating to registration, transfer and exchange of Series 2016 Bonds do not apply to the Series 2016 Bonds.
All Series 2016 Bonds are transferrable or exchangeable by the Owner thereof, in person or by the Owner’s attorney duly authorized in writing, at the office of the Paying Agent in the books required to be kept by the Paying Agent pursuant to the provisions of the Bond Resolution, upon surrender of such Series 2016 Bonds accompanied by delivery of a duly executed written instrument of transfer or exchange in a form approved by the Paying Agent. Whenever any Series 2016 Bond or Series 2016 Bonds shall be surrendered for transfer or exchange, the Paying Agent shall execute and deliver a new Series 2016 Bond or Series 2016 Bonds of Authorized Denominations of the same aggregate principal amount, except that the Paying Agent may require the paying by any Owner requesting such transfer or exchange of any tax or other governmental required to be paid with respect to such transfer or exchange. All Series 2016 Bonds surrendered pursuant to the provisions of the Bond Resolution shall be cancelled by the Paying Agent, shall not be redelivered and shall be disposed of as directed by the City. The Paying Agent shall not be required to transfer or exchange (i) any Series 2016 Bonds during the period commencing on the date ten days prior to the date of selection of the Series 2016 Bonds for redemption and ending on such date of selection, (ii) any Series 2016 Bond selected for redemption in whole or in part or (iii) any Series 2016 Bonds during the period from any Record Date to the succeeding Interest Payment Date.
6 Series 2016 Bonds Mutilated, Destroyed, Lost or Stolen
The following provisions shall only be applicable if DTC's book-entry only system of registration is discontinued.
If any Series 2016 Bond shall become mutilated, the Paying Agent shall authenticate and deliver a new Series 2016 Bond of like tenor and number in lieu of the mutilated Series 2016 Bond, but only upon surrender to the Paying Agent of the mutilated Series 2016 Bond, and every mutilated Series 2016 Bond surrendered to the Paying Agent shall be cancelled by it and shall not be redelivered and shall be disposed of as directed by the City. If any Series 2016 Bond shall be destroyed, lost or stolen, evidence of such destruction, loss or theft may be submitted to the Paying Agent and if such evidence is satisfactory to the Paying Agent, and the Paying Agent and the City receive indemnity satisfactory to them, the Paying Agent shall authenticate and deliver a new Series 2016 Bond of like tenor and number in substitution for the destroyed, lost or stolen Series 2016 Bond. The Paying Agent may require paying of a sum not exceeding the actual cost of preparing each new Series 2016 Bond authenticated and delivered by it under the Bond Resolution and of the expenses which may be incurred by it under the Bond Resolution. Any replacement Series 2016 Bond authenticated and delivered under the provisions of the Bond Resolution in lieu of or in substitution for any mutilated, destroyed, lost or stolen Series 2016 Bond shall be equally and proportionately entitled to the benefit, protection and security under the Bond Resolution with all other Series 2016 Bonds executed and delivered hereunder; and the Paying Agent shall not be required to treat both the original Series 2016 Bond and any replacement Series 2016 Bond as being Outstanding for the purpose of determining the principal amount of Series 2016 Bonds which may be authenticated and delivered under the Bond Resolution, but both the original and replacement Series 2016 Bond shall be treated as one and the same. Notwithstanding any other provision of the Bond Resolution, rather than authenticating and delivering a new Series 2016 Bond for a mutilated, destroyed, lost or stolen Series 2016 Bond which has been called for redemption, the Paying Agent may make the paying of principal of such mutilated, destroyed, lost or stolen Series 2016 Bond directly to the Owner thereof under such regulations as the Paying Agent may prescribe.
SECURITY FOR THE BONDS
General
All Bonds are secured by a lien upon and a pledge of (1) proceeds allocated and distributed to the City pursuant to the Community Investment Interlocal Agreement (as hereinafter defined) from the levy and collection of the local option discretionary infrastructure sales taxes pursuant to Section 212.055(2), Florida Statutes, Ordinance No. 96-12 enacted by the Board of County Commissioners of Hillsborough County, Florida (the "County") and a referendum conducted pursuant thereto on September 3, 1996 (the "Sales Tax Revenues"), and (2) moneys on deposit in the funds and accounts established under the Bond Resolution and investment earnings thereon, but excluding moneys on deposit in the Rebate Account and the Costs of Issuance Account (collectively, the "Pledged Revenues").
Series 2016 Bonds Not a Debt of the City
THE CITY SHALL NOT IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS OR FOR THE PURCHASE OR REDEMPTION PRICE OF BONDS FROM ANY PRINCIPAL SOURCE EXCEPT THE SALES TAX REVENUES AS PROVIDED IN THE BOND RESOLUTION AND NEITHER THE BONDS, NOR THE INTEREST
7 THEREON, SHALL BE A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF THE CITY OR THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISIONS WHATSOEVER, BUT SHALL BE LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE SALES TAX REVENUES AS PROVIDED IN THE BOND RESOLUTION, AND SUCH FACT SHALL BE PLAINLY STATED ON EACH BOND. THE BONDS SHALL NOT CONSTITUTE THE DEBT OR INDEBTEDNESS OF THE CITY WITHIN THE MEANING OF ANY PROVISION OR LIMITATION OF THE CONSTITUTION OR LAWS OF THE STATE OF FLORIDA, OR ANY HOME RULE CHARTER OF ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE CITY, AND SHALL NEVER CONSTITUTE OR GIVE RISE TO A PECUNIARY LIABILITY OF THE CITY OR A CHARGE AGAINST ITS GENERAL CREDIT OR TAXING POWERS, EXCEPT FROM THE SALES TAX REVENUES AS PROVIDED IN THE BOND RESOLUTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF OR THE CITY IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF THE BONDS OR THE INTEREST THEREON, OR OTHER COSTS INCIDENT THERETO.
Reserve Funding Option
The City has established and created the Series 2016 Reserve Account in the Reserve Fund to secure the Series 2016 Bonds only. The Reserve Requirement which is applicable to the Series 2016 Reserve Account will be determined by the Mayor or during the marketing of the Series 2016 Bonds and may be zero ($0); provided, however, such Reserve Requirement may not exceed an amount equal to the lesser of (1) the Maximum Bond Service Requirement for the Series 2016 Bonds, (2) one hundred twenty- five percent (125%) of the average annual Bond Service Requirement for the Series 2016 Bonds, or (3) 10% of the aggregate stated principal amount of the Series 2016 Bonds. The Series 2016 Bonds shall not be secured by any other account or subaccount in the Reserve Fund, including, without limitation the Series 2006 Reserve Account which secures the Series 2006 Bonds not refunded by the Series 2016 Bonds.
Additional Bonds
Additional Bonds may be issued under the Bond Resolution and a subsequent resolution on a parity with the Bonds as to the pledge of and lien on the Sales Tax Revenues and any previously issued Additional Bonds for any lawful purpose. Additional Bonds may be issued for any one or more of the following purposes: financing the cost of a Project, or the completion thereof or refunding any or all Outstanding Bonds or any Subordinated Indebtedness of the City.
In addition to the conditions precedent to the delivery of the Bonds noted in the Bond Resolution, the Paying Agent or other authenticating agent, as the case may be, shall not authenticate or deliver any Additional Bonds unless it has received the following:
(1) An opinion of Bond Counsel stating the issuance of the Additional Bonds will not adversely affect the exemption from federal income taxes of interest on the Bonds previously issued under the Bond Resolution as set forth in the opinion of Bond Counsel delivered at the time of delivery of the Additional Bonds being issued,
(2) a certificate of the Chief Financial Officer to the following effect:
8 (a) the books and records of the City relating to the collection and receipt of the Sales Tax Revenues have been audited by an independent certified public accountant of suitable experience;
(b) setting forth the amount of Sales Tax Revenues received by the City for any 12 consecutive months out of the 24 consecutive months immediately preceding the date of issuance of the proposed Additional Bonds; and
(c) the Sales Tax Revenues received during such 12 consecutive months were at least equal to 1.50:1 of the Maximum Bond Service Requirement for the Outstanding Bonds and the Additional Bonds with respect to which such certificate is given.
Notwithstanding the foregoing, the certificate described above shall not be required if the Additional Bonds are being issued to refund Outstanding Bonds and the Maximum Bond Service Requirement is not increased for the then current or any subsequent Bond Year.
The City will not issue any other obligations payable from Pledged Revenues, except under the conditions and in the manner provided in the Bond Resolution, or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien thereon in favor of the Bonds and the interest thereon. Notwithstanding the foregoing, the City may at any time or from time to time issue evidences of indebtedness payable in whole or in part out of the Pledged Revenues and which may be secured by a pledge of the Pledged Revenues; provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to the pledge of the Pledged Revenues created by the Bond Resolution. The City shall have the right to covenant with the holders from time to time of any Subordinated Indebtedness to add to the conditions, limitations and restrictions under which any Additional Bonds may be issued pursuant to the Bond Resolution. The City agrees to pay promptly any Subordinated Indebtedness as the same shall become due.
The City may issue notes in anticipation of the issuance of Bonds which shall have such terms and details and be secured in such manner, not inconsistent with the Bond Resolution, as shall be provided by a resolution of the City.
FLOW OF FUNDS
Funds and Accounts
Pursuant to the Bond Resolution, the City created and established the Revenue Fund and the Rebate Account therein, the Construction Fund and accounts therein from time to time, the Debt Service Fund and accounts therein from time to time, the Reserve Fund and the accounts therein from time to time and the Subordinate Debt Fund and the accounts therein from time to time.
The Revenue Fund, the Construction Fund, the Debt Service Fund, the Reserve Fund and the Subordinate Debt Fund, and all accounts therein shall constitute trust funds for the purposes provided in the Bond Resolution, shall be held by the City and shall at all times be kept separate and distinct from all other funds of the City and used only as provided in the Bond Resolution. Moneys held in the Revenue Fund, the Construction Fund, the Debt Service Fund, the Reserve Fund and the Subordinated Debt Fund and the accounts therein shall be subject to a lien and charge in favor of the holders and registered
9 owners of the Bonds as provided in the Bond Resolution; provided, however, that the Bondholders shall have no lien on or right to payment from amounts on deposit in the Rebate Account.
Construction Fund
Pursuant to the Bond Resolution, the City has established the Series 2016 Project Account in the Construction Fund which shall be used to pay and/or reimburse costs of the 2016 Project. Moneys in the Construction Fund and in each account thereof shall be kept separate and apart from all other funds and accounts of the City, and proceeds of the appropriate Series of Bonds on deposit in the Construction Fund, shall be disbursed by the City from the Construction Fund and applied by the City to pay the Cost of the Project.
Any funds on deposit in the Construction Fund that in the opinion of the City are not immediately necessary for expenditure, as provided in the Bond Resolution, may be invested in Investment Securities, provided that such investments mature or are redeemable at not less than par on or before the date such funds are estimated to be needed for the purposes of the Bond Resolution.
Any liquidated damages or settlement payments received by the City as a result of the breach by any contractor, subcontractor or supplier working or supplying goods for any Project of any representation, warranty or performance guaranty, and all insurance and condemnation proceeds received with respect to damages to or the taking of the during construction or any moneys received by the City as contributions towards of reimbursements of Cost of the Project shall, at the discretion of the City, be deposited into the appropriate account or accounts in the Construction Fund to ensure completion of the Project or shall be deposited into the Debt Service Fund for the redemption of Bonds.
Upon completion of the Project or upon abandonment therefor, any amounts then remaining in the Construction Fund and not reserved by the City for the payment of the Cost of the Project shall be transferred to the Debt Service Fund and used to redeem Bonds in accordance with the Bond Resolution.
Application of Revenue Fund
Commencing as soon as the Sales Tax Revenues shall be received, so long as any Bonds shall be Outstanding under the Bond Resolution, the City shall cause all Sales Tax Revenues to be deposited in and to the credit of the Revenue Fund, and continuing monthly thereafter, the funds in the Revenue Fund shall be disposed of in the following order and priority:
(1) First, by deposit into the Debt Service Fund an amount equal to the sum of (i) one-sixth (1/6th) of the interest maturing on the Bonds on the next interest payment date until there are sufficient funds then on deposit equal to the sum of the next interest payment due on the Bonds; (ii) one-twelfth (1/12th) of all principal (including the Compounded Amount of Capital Appreciation Bonds) maturing on the various Series of Serial Bonds and Term Bonds, if any, that mature annually during the current Bond Year, other than Term Bonds that are otherwise subject to mandatory redemption from Amortization Installments in that Bond Year; (iii) one sixth (1/6th) of all principal maturing (including the Compounded Amount of Capital Appreciation Bonds) on the various Series of Serial Bonds, if any, that mature semiannually on the next maturity date during the current Bond Year; (iv) one-twelfth (1/12th) of the Amortization Installments and redemption premiums, if any, that shall become due and payable during the current Bond Year; and (v) one-sixth (1/6th) of the amount sufficient to pay the next fees and charges of the Paying Agent and Registrar, if any, accruing with respect to the Bonds; until there are
10 sufficient funds then on deposit equal to the sum of the next interest maturing on the Bonds on the next interest payment date, the next principal installment on annual Serial and Term Bonds, if any, the Amortization Installments due in the current Bond Year, if any, and the next fees and charges of the Paying Agent and the Registrar, if any, with respect to the Bonds.
Deposits required pursuant to the foregoing shall be increased each month to the extent required to pay interest next coming due and the principal and redemption premiums on Bonds maturing or subject to mandatory redemption on the next interest payment date, after making allowance for any accrued and capitalized interest, and to make up any deficiency or loss that may otherwise arise in such fund.
Deposits from the Revenue Fund into the Debt Service Fund may be decreased or funds previously deposited therein may be withdrawn and deposited in the manner hereinafter provided in subparagraphs (2) or (3) below, as appropriate, to adjust for Bonds purchased, redeemed or otherwise paid from excess construction funds as provided in the Bond Resolution.
(2) Second, by deposit into the appropriate accounts in the Reserve Fund, amounts which, after taking into account other funds on deposit therein, will be sufficient to make the funds on deposit therein equal to the Reserve Requirement for each such account. If there are not sufficient funds in the Revenue Fund available to make the amounts on deposit in each account in the Reserve Fund equal to the Reserve Requirement for the applicable Series of Bonds, there shall be deposited in each such account an amount equal to the lesser of the Reserve Requirement for such account or the total amount available to be deposited into the Reserve Fund multiplied by a fraction, the numerator of which is the Reserve Requirement of the applicable Series and the denominator of which is the aggregate Reserve Requirement for all Series then Outstanding.
(3) Third, by deposit into the appropriate account in the Subordinate Debt Fund, an amount at least equal to the amount, if any, required to be deposited therein in the then current month to pay principal or amortization installments of and premiums, if any, and interest on each issue of Subordinated Indebtedness coming due in such month, whether as a result of maturity or prior call for redemption, and to provide reserves therefor, as required by a supplemental resolution authorizing such issue of Subordinated Indebtedness.
(4) After making the deposits required in (1), (2) and (3) above, funds remaining in the Revenue Fund equal to one-twelfth (1/12th) of the Bond Service Requirement for the then current Bond Year shall be retained in the Revenue Fund and applied in the next ensuing month to make deposits required in (1) above; all amounts remaining in the Revenue Fund in excess of such retained amount shall be paid to the City to be used for any lawful purpose in accordance with the Act.
The City shall not be required to make any further payments into the Debt Service Fund, including the accounts therein, and the Reserve Fund when the aggregate amount of funds in the Debt Service Fund, including the accounts therein, and in the Reserve Fund are at least equal to the aggregate principal amount of Bonds issued pursuant to the Bond Resolution and then Outstanding, plus the amount of interest then due or thereafter to become due on said Bonds then Outstanding, or if all Bonds then Outstanding have otherwise been defeased pursuant to the Bond Resolution.
For purposes of the preceding paragraph, in determining that moneys held in the Debt Service Fund and the Reserve Fund are at least equal to the principal of and interest on a particular Series of
11 Bonds, the City shall take into account moneys in the Reserve Fund only to the extent that such moneys are held in an account therein related to such Series of Bonds.
COVENANTS OF THE CITY
No Impairment
The pledging of the Pledged Revenues in the manner provided in the Bond Resolution shall not be subject to repeal, modification or impairment by any subsequent ordinance, resolution or other proceedings of the City.
Investments
Moneys held for the credit of the funds and accounts established under the Bond Resolution shall be invested and reinvested by the City in Investment Securities. Such investments or reinvestments shall mature or become available not later than the respective dates, as estimated by the City, that the moneys held for the credit of said funds and accounts will be needed for the purposes of such funds or accounts.
Obligations so purchased as an investment of moneys in any such fund or account shall be deemed at all times to be a part of such fund or account, and shall at all times, for the purposes of the Bond Resolution, be valued annually on September 30 of each year at the market value thereof, exclusive of accrued interest as determined by the City.
All income and profits derived from the investment of moneys in the Revenue Fund (other than the Reserve Fund), and the Debt Service Fund shall be deposited to the credit of the Revenue Fund. All income and profits derived from the investment of funds in the Reserve Fund, if any, shall be retained in the applicable subaccount therein until amounts on deposit in such subaccount equal the applicable Reserve Requirement, and thereafter shall be transferred to the City to be used for any lawful purpose, in accordance with the Act. Notwithstanding the foregoing, income and profits derived from the investment of moneys in the funds and accounts may, at the option of the City, be transferred to the City in order to pay the Rebate Amount.
Annual Audit
The City shall, immediately after the close of each Fiscal Year, cause the financial statements of the City to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, and shall require such accountants to complete their report on the annual financial statements in accordance with applicable law. Such annual financial statements shall contain, but not be limited to, a balance sheet, a statement of revenues, expenditures and changes in fund balance, and any other statements as required by law or accounting convention, and a report by such accountants disclosing any material default on the part of the City of any covenant or agreement in the Bond Resolution which is disclosed by the audit of the financial statements. The annual financial statements shall be prepared in conformity with generally accepted accounting principles. A copy of the audited financial statements for each Fiscal Year shall be furnished to any Bondholder who shall have furnished such Bondholder’s address to the City Clerk and requested in writing that the same be furnished to such Bondholder. The City shall be permitted to make a reasonable charge for furnishing such audited financial statements.
12 Covenant to Comply with the Requirements of Section 212.055(2), Florida Statutes and the Community Investment Interlocal Agreement
The City has covenanted and agreed to apply the proceeds of the Series 2016 Bonds and Pledged Revenues in compliance with (i) the requirements of Section 212.055(2), Florida Statutes and not to take any action or omit to take any action that would impair its right to receive or would result in a reduction of payments of the Sales Tax Revenues, and (ii) the requirements of the Community Investment Interlocal Agreement. Except to the extent required by law, the City will take no action the result of which could be the cancellation or abrogation of the Community Investment Interlocal Agreement and will not agree to or execute any amendment thereto which could result in a reduction of forecasted Sales Tax Revenues below the level which would have been received but for such amendment.
Events of Default
If any of the following events occur, it is hereby declared to constitution an "Event of Default":
(a) default in the due and punctual payment of interest on any Bond, whether at the stated Interest Payment Date thereof, or upon proceedings for redemption thereof;
(b) default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof;
(c) the inability of the City to fulfill its obligations under the Bond Resolution to the extent that the payment of or security for the Bonds is materially adversely affected, for a period of thirty days after the City becomes aware of such condition;
(d) consent by the City to the entry of an order appointing a receiver of the City or its assets;
(e) the filing by the City of a petition for relief under federal bankruptcy or other similar laws, which is not dismissed within thirty days after the date of filing;
(f) consent by the City to the institution of proceedings to effect a composition between the City and its creditors or to adjust the claims of such creditors;
(g) entry of final judgment against the City for the payment of money, which subjects any of the funds pledged under the Bond Resolution to a lien for the payment thereof in contravention of the provisions of the Bond Resolution for which there is no adequate insurance, reserve or bond for the timely payment thereof; and such judgment is not discharged within ninety days from the entry thereof or the judgment is not appealed in a manner that stays its execution; and
(h) The City defaults in the timely performance of any other covenant hereof, and such default continues for thirty days after the City receives written notice of the default from the Bond Insurer or Owners of not less than ten percent of the Bond Obligation. The City shall not be deemed in default under this paragraph if the default can be cured within a reasonable period of time and the City institutes appropriate curative action and diligently pursues such action until the default is corrected.
13 Acceleration of Maturities
In addition to other remedies available under the Bond Resolution upon the occurrence and continuance of an Event of Default specified in paragraphs (a), (b), (c), (d), (e), (f) or (h) of the prior subsection, the Default Trustee may, and at the written direction of any Bond Insurer as to the Bonds of any Series and so long as the Bond Insurer has not failed to comply with its payment obligations under the Bond Insurance Policy, and at the written direction of a majority of the Owners, shall by notice in writing to the City, declare the principal of all of the Bonds then outstanding (if not then due and payable) immediately due and payable, with such premium as may be required for optional redemption immediately, upon such declaration, the Bonds shall be due and payable, notwithstanding anything contained in the Bonds or in the Bond Resolution to the contrary; but, if (i) at any time after such declaration and before the entry of final judgment in any action instituted on account of such default, or before the completion of enforcement of any other remedy under the Bond Resolution moneys shall have accumulated in the appropriate funds and accounts pledged under the Bond Resolution sufficient to pay the principal of all matured Bonds and all arrears of interest, if any upon all Bonds then outstanding (except the principal of any Bonds not then due and payable by their terms, and the interest accrued on such Bonds since the last interest payment date), and the compensation and expenses of the Default Trustee, (ii) all other amounts then payable by the City under the Bond Resolution shall have been paid or a sum sufficient to pay the same shall have been set aside, and (iii) every other default known to the Default Trustee, shall have been remedied to the satisfaction of the Default Trustee, then, the Default Trustee may, and upon the written request of a majority of the Owners, shall by written notice to the City, rescind such declaration but no such rescission shall affect any subsequent default.
DISCRETIONARY SALES SURTAX
General
Chapter 212, Part I, Florida Statutes, as amended, imposes a 6% sales tax on the sales price of the tangible personal property sold at retail in the State of Florida (the "State") subject to certain exemptions therefrom. A similar tax is imposed on the cost price of tangible personal property when the property is not sold, but is used, consumed, distributed or stored for use or consumption in the State. The largest single source of tax receipts in the State is the sales and use tax.
Section 212.055(2), Florida Statutes, as amended, authorizes local governments to impose a discretionary sales surtax of an additional 0.5% or 1% to finance, plan and construct infrastructure projects, among other purposes. However, local governments may not impose the surtax on the portion of any sales amount which exceeds $5,000 on any item of tangible personal property. The levy of the surtax must be pursuant to an ordinance enacted by a majority of the members of the county's governing authority and must be approved by a majority of electors of the county voting in a referendum on the surtax. Distribution of the surtax proceeds may be governed by an interlocal agreement by and among a county, the municipalities therein, and the school district. If no interlocal agreement is in place, then the distribution of surtax proceeds will be governed by Section 218.62, Florida Statutes.
History and Authorization
On July 10, 1996, the Board of County Commissioners of the County, by a majority, enacted Ordinance No. 96-12 which provided for the levying and imposition, throughout the incorporated and unincorporated areas of the County, of an additional tax of 0.5% on all transactions occurring in the
14 County (the "Community Investment Tax"). The Community Investment Tax is in addition to the aforementioned 6% tax and the County's indigent care half-cent sales tax revenues which is set at 0.5%. The proceeds of the Community Investment Tax are to be applied to pay the costs of acquisition and construction of public safety, transportation and educational infrastructure, and a community stadium. On September 3, 1996, the levy of the Community Investment Tax was placed on the ballot and approved by a majority of the electors of the County who voted in the referendum. The Community Investment Tax is effective for a thirty-year period which commenced December 1, 1996.
Collections
The Florida Department of Revenue ("FDOR") has the responsibility to administer, collect, and enforce sales surtaxes, including the Community Investment Tax. The proceeds of each county's discretionary sales surtax collections are transferred to the Discretionary Sales Surtax Clearing Trust Fund (the "Trust Fund"). A separate account in the Trust Fund is established for each county imposing such a surtax. FDOR is authorized to deduct 3% of the total revenue generated for all counties levying a surtax for administrative costs. The amount deducted for administrative costs is required to be used only for those costs solely and directly attributable to the surtax. The total administrative costs are to be prorated among those counties levying the surtax on the basis of the amount collected for a particular county to the total amount collected for all counties. The FDOR has no plans nor does it currently anticipate an increase in the service charge absent a change in the way the FDOR is funded. FDOR is required to submit annually, no later than March 1st, a report detailing the expenses and amounts deducted for administrative costs to the President of the Florida Senate, the Speaker of the Florida House of Representative, and the governing authority of each county levying the surtax. After receipt of such report and after reviewing the FDOR budget, the Florida Legislature may increase the administrative charge but not in excess of the 3% limit.
Pursuant to Section 212.15, Florida Statutes, as amended, vendors are required to remit sales tax receipts by the twentieth (20th) day of the month immediately following the month of collection. No statute prescribes a deadline for remitting surtax proceeds to the local governing bodies. However, according to the accounting division of FDOR and the County, FDOR has consistently remitted the surtax proceeds to such local governing bodies by the end of the month immediately following receipt by FDOR.
Pursuant to Section 212.055(2)(d), Florida Statutes, as amended, the proceeds of any discretionary sales surtax and any interest accrued thereto may be expended to finance, plan and construct infrastructure. Neither the proceeds nor any interest accrued thereto may be used for operational expenses of any infrastructure, except a county that has a population of fewer than 75,000 and that is required to close a landfill may use the proceeds or interest for long-term maintenance costs associated with landfill closure. "Infrastructure" means, among other things, any fixed capital expenditure or fixed capital outlay associated with the construction, reconstruction or improvement of public facilities which have a life expectancy of 5 or more years and any land acquisition, land improvement, design, engineering costs related thereto, and all other professional and related costs required to bring the public facilities into service. Pursuant to Section 212.055(2)(e), Florida Statutes, as amended, school districts, counties and municipalities receiving discretionary sales surtax proceeds may pledge such proceeds for the purpose of servicing new bond indebtedness incurred pursuant to law. Local governments may use the services of the Division of Bond Finance of the State Board of Administration pursuant to the State Bond Act to issue any bonds through the provisions of this Section 212.055(2)(e), Florida Statutes. Counties and municipalities may join together for the issuance of bonds authorized by this subsection.
15 Sales Tax Revenues
Pursuant to Ordinance 96-12 and the affirmative vote of County electors, the County imposed the Community Investment Tax for an initial term of 30 years beginning December 1, 1996. That portion of the Community Investment Tax which is distributed to the City constitutes "Sales Tax Revenues" for purposes of the Bond Resolution and is pledged to the payment of the Bonds issued pursuant to the Bond Resolution. In the Bond Resolution, the City has irrevocably pledged the Sales Tax Revenues to the payment of debt service on the Bonds issued pursuant to the Bond Resolution. See "APPENDIX C – Composite of the Bond Resolution."
The County, the City, the School Board of Hillsborough County (the "School Board"), the City of Plant City, Florida ("Plant City") and the City of Temple Terrace, Florida ("Temple Terrace") entered into an Interlocal Agreement dated July 17, 1996 (the "Community Investment Interlocal Agreement") which provides for the distribution of the Community Investment Tax among the County, the City, the School Board, Plant City and Temple Terrace. The Community Investment Interlocal Agreement provides as follows:
1. In Fiscal Years 2010 through 2026, the first 25% of the Community Investment Tax collected will be distributed to the School Board.
2. Next, disbursements of the Community Investment Tax are required to be made for payment of the cost of debt service on bonds issued by the Tampa Sports Authority to finance or refinance the construction of Raymond James Stadium, other required deposits in respect to such bonds, if any, and certain required annual capital improvement and/or repair payments. Such disbursements shall not exceed $10,610,000 annually through and including Fiscal Year 2022, $10,360,000 in Fiscal Year 2023 and $9,800,000 annually in Fiscal Years 2024 through and including 2026.
3. The remainder of the Community Investment Tax after the distributions in 1 and 2 above collected within the County and deposited in the Trust Fund are distributed to the County, the City, Plant City and Temple Terrace in accordance with the following formula:
County's Share unincorporated area 2/3 incorporated (percentage of total = population + area population Half-Cent Sales total county 2/3 incorporated Tax Revenues) population + area population
Municipal Share = municipality population (percentage of total county 2/3 incorporated Half-Cent Sales population + area population Tax Revenues)
For purposes of the formula above, "population" means the latest official State estimate of population certified prior to the beginning of the local government fiscal year. Should any unincorporated area of the County become incorporated as a municipality, the share received by the participating local governments would be adjusted accordingly.
The Hillsborough County Clerk of the Circuit Court acts as the Chief Financial Officer of the County (the "Clerk"). The Clerk receives the Community Investment Tax revenues from FDOR and acts
16 as the trustee of the Community Investment Tax revenues and retains all such revenues in a separate account until distributed as described above. Disbursements are made monthly by the Clerk on a pro rata basis as received.
Effective October 1, 2001, the structure for the imposition of taxes on telecommunications and other communications services was dramatically changed by Chapter 202, Florida Statutes (the “CST Law”). The CST Law rescinded or modified various taxes imposed on certain telephone and other telecommunications and communications services (including State sales tax and discretionary sales surtax) and replaced the revenues from such taxes with certain revenues from new state and local option taxes imposed on Communications Services. “Communications Services” under the CST Law includes the transmission of voice, data, audio, video or any other information or signals, including cable services, by or through any medium or method currently in existence or in the future devised regardless of the protocol used for such transmission or conveyance.
Such services have historically been taxed if the charges for such services are not stated separately from the charges for communications services on a customer's bill. A portion of the Local Option Communications Services Tax imposed by the CST Law pursuant to Section 202.19(5), Florida Statutes, is intended as a replacement for the discretionary sales surtax on certain communication services (the "Replacement Local Option Communications Services Tax"). Such Replacement Local Option Communications Services Tax is currently levied in the County at a rate of 0.3% (reduced from the 0.5 cents for each dollar of taxable sales imposed under Ordinance No. 96-12) on the sale price of communications services and is included in the Community Investment Tax and the portion of the Community Investment Tax distributed to the City is pledged to the repayment of the Series 2016 Bonds. The Replacement Local Option Communications Services Taxes collected under the CST Law are deposited along with the discretionary sales surtax into the Trust Fund and is then distributed by FDOR to the County. Except for the portion of the Replacement Local Option Communications Services Tax received by the City pursuant to Section 212.055(2), Florida Statutes, no other revenues received by the City pursuant to the CST Law are pledged to the Series 2006 Bonds, not refunded with proceeds of the Series 2016 Bonds, the Series 2010 Bonds nor the Series 2016 Bonds.
The table below provides the total Community Investment Tax collected and distributed in each of the last ten Fiscal Years pursuant to the Community Investment Interlocal Agreement.
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17 HISTORICAL COMMUNITY INVESTMENT TAX COLLECTIONS AND DISTRIBUTIONS
Tampa Fiscal School Sports Hillsborough Temple Year Board Authority County Tampa(1) Terrace Plant City Total(2) 2014-15 $28,167,753 $10,333,588 $54,631,224 $16,627,188 $1,210,596 $1,700,662 $112,671,011 2013-14 26,349,006 9,686,438 51,077,131 15,557,578 1,137,514 1,588,357 105,396,024 2012-13 24,940,146 9,687,000 47,964,264 14,602,917 1,061,675 1,504,582 99,760,584 2011-12 23,943,646 9,051,896 46,167,708 14,112,729 1,035,854 1,462,752 95,774,585 2010-11 22,889,866 9,381,238 43,203,428 13,760,828 972,329 1,351,775 91,559,464 2009-10 22,018,439 9,570,000 41,194,742 13,076,351 920,711 1,293,514 88,073,757 2008-09 22,276,462 9,686,119 41,697,441 13,188,666 948,578 1,308,581 89,105,847 2007-08 24,596,601 9,683,460 46,682,239 14,904,725 1,038,523 1,480,857 98,386,405 2006-07 26,228,662 10,314,000 49,583,364 16,101,603 1,087,115 1,599,903 104,914,647 2005-06 26,781,612 12,064,000 49,332,904 16,230,355 1,106,150 1,611,428 107,126,449
(1) The numbers in this column are Sales Tax Revenues. The Sales Tax Revenues shown in this table were provided by the Hillsborough County Clerk of the Circuit Court, Department of Business and Support Services. In certain instances, such figures may not match the figures in the City of Tampa's Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2015, in part, because the timing differences between the cash basis and the accrual basis. (2) Totals may not foot due to rounding. Source: Hillsborough County Clerk of the Circuit Court, Department of Business and Support Services.
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18 HISTORICAL COVERAGE OF DEBT SERVICE
Fiscal Year Ended September 30, (In Thousands of Dollars) 2011 2012 2013 2014 2015(2)
Sales Tax Revenues(3) $13,761 $14,113 $14,603 $15,558 $16,627
Debt Service on the Series 2006 and 2010 Bonds $4,935 $4,954 $4,952 $4,950 $4,949
Coverage 2.79x 2.85x 2.95x(1) 3.14x 3.36x(3)
(1) For the fiscal year ended September 30, 2013, the City received a refund from the Tampa Sports Authority for prior years’ unused monies in the amount of $2,577,385. This one-time refund is not included as Sales Tax Revenues for such fiscal year for purposes of this table. (2) For the fiscal year ended September 30, 2015, the City received a refund from the Tampa Sports Authority for prior years’ unused monies in the amount of $11,212. This refund is not included as Sales Tax Revenues for such fiscal year. (3) Pro forma debt service coverage for the fiscal year ended September 30, 2015 is expected to be 1.62x, calculated based on Sales Tax Revenues for that period divided by the Maximum Bond Service Requirement on all Bonds following the issuance of the Series 2016 Bonds, assuming a true interest cost of 1.65% on the Series 2016 Bonds. The estimated Sales Tax Revenues for the fiscal year ended September 30, 2016 is $17,338,165. Estimated pro forma debt service coverage for the fiscal year ended September 30, 2016 is expected to be 1.69x, calculated based on estimated Sales Tax Revenues for that period divided by the Maximum Bond Service Requirement on all Bonds following the issuance of the Series 2016 Bonds, assuming a true interest cost of 1.65% on the Series 2016 Bonds. Source: City of Tampa’s Comprehensive Annual Financial Statement for the Fiscal Year Ended September 30, 2015.
The amount of Community Investment Tax distributed to the City is subject to increase or decrease due to (i) increases or decreases in the dollar volume of taxable sales within the County, (ii) legislative changes relating to the sales tax, which may include changes in the scope of taxable sales, changes in the tax rate and changes in the amount of sales tax revenue deposited into the Discretionary Sales Tax Surtax Trust Fund, (iii) changes in the relative population of the City to the relative population of unincorporated County and the other municipalities in County, which affect the percentage of Community Investment Tax Revenues distributed to the City, and (iv) other factors which may be beyond the control of the City or the Bondholders, including but not limited to the potential for increased use of electronic commerce and other internet-related sales activity that could have a material adverse impact upon the amount of sales tax collected by the State and then distributed to the City.
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19 ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of the proceeds of the Series 2016 Bonds, together with other legally available funds of the City, are summarized below:
SOURCES:
Principal Amount of Series 2016 Bonds $ Other Legally Available Funds Original Issue Premium/Discount
Total Sources $
USES:
Deposit to Escrow Fund for the Refunded Bonds $ Deposit to Series 2016 Project Account in the Construction Fund Costs of Issuance(1)
Total Uses $
(1) Includes the fees and out-of-pocket expenses for Bond Counsel, Financial Advisor, Underwriter's Discount, printing, ratings, legal and other associated costs of issuance.
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20 DEBT SERVICE REQUIREMENTS FOR THE BONDS
Series 2016 Bonds Bond Series 2006 Year Ended and 2010 Bonds Total October 1 Debt Service Principal Interest Debt Service Debt Service
Totals
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21 AUDITED FINANCIAL STATEMENTS
The audited financial statements of the City as of September 30, 2015 and for the year then ended, included in the attached "APPENDIX B – General Purpose Financial Statements for Fiscal Year Ended September 30, 2015," have been audited by Crowe Horwath LLP independent auditors, as stated in their report appearing therein. The consent of the City's auditor to include in this Official Statement the aforementioned report was not requested, and the general purpose financial statements of the City are provided only as publicly available documents. The City's auditor was not requested nor did it perform any procedures with respect to the preparation of this Official Statement or the information presented herein.
The Series 2016 Bonds are payable solely from Pledged Revenues as provided in the Bond Resolution. See "SECURITY FOR THE BONDS" herein. The audited financial statements are presented for general information purposes only.
INVESTMENT POLICY
The City's investment policy applies to all funds held by the City other than pension fund assets and bond related accounts. The investment objective of the City is to invest funds in safe, liquid, minimum risk instruments that will provide the maximum amount of interest earnings. The earnings of such instruments are measured by comparisons to the State Local Government Surplus Funds Trust Fund and the Federal funds rate on a monthly basis. The Chief Financial Officer, with the approval and consent of the Mayor, is authorized to invest any funds of the City in United States Government or United States Treasury bonds, certificates, notes or bills, or may arrange interest bearing time deposits with the depositories of the City.
The City's investment policy is to promote investments that enable it to meet its day-to-day requirements. Investments will be made in accordance with known/anticipated cash needs and cash flow requirements. Short term investments are limited to thirty-three percent (33%) of the City's total portfolio. No more than thirty percent (30%) of the City's total portfolio is permitted to be invested in certificates of deposit. All certificates of deposit must be purchased from banks that are collateralized by the State of Florida Local Government Surplus Funds Trust Fund. A maximum of twenty percent (20%) of the total portfolio is permitted to be invested with a single institution. All securities purchased must be backed by the full faith and credit of the United States government.
The City's investment policy may be modified from time to time.
TAX EXEMPTION
Opinion of Bond Counsel
In the opinion of Bond Counsel, the form of which is included as APPENDIX D hereto, the interest on the Series 2016 Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not a specific item of tax preference for federal income tax purposes under existing statutes, regulations, rulings and court decisions. However, interest on the Series 2016 Bonds is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations pursuant to the Internal Revenue Code of 1986, as amended (the "Code"). Failure by the City to comply subsequently to the issuance of the Series 2016 Bonds with certain requirements of the Code, including but not limited to requirements regarding the use, expenditure and
22 investment of bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States, may cause interest on the Series 2016 Bonds to become includable in gross income for federal income tax purposes retroactive to their date of issuance. The City has covenanted in the Bond Resolution to comply with all provisions of the Code necessary to, among other things, maintain the exclusion from gross income of interest on the Series 2016 Bonds for purposes of federal income taxation. In rendering its opinion, Bond Counsel has assumed continuing compliance with such covenants.
Internal Revenue Code of 1986
The Code contains a number of provisions that apply to the Series 2016 Bonds, including, among other things, restrictions relating to the use or investment of the proceeds of the Series 2016 Bonds and the payment of certain arbitrage earnings in excess of the "yield" on the Series 2016 Bonds to the Treasury of the United States. Noncompliance with such provisions may result in interest on the Series 2016 Bonds being included in gross income for federal income tax purposes retroactive to their date of issuance.
Collateral Tax Consequences
Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of, the Series 2016 Bonds. Prospective purchasers of the Series 2016 Bonds should be aware that the ownership of the Series 2016 Bonds may result in other collateral federal tax consequences. For example, ownership of the Series 2016 Bonds may result in collateral tax consequences to various types of corporations relating to (1) denial of interest deduction to purchase or carry such Series 2016 Bonds, (2) the branch profits tax, and (3) the inclusion of interest on the Series 2016 Bonds in passive income for certain Subchapter S corporations. In addition, the interest on the Series 2016 Bonds may be included in gross income by recipients of certain Social Security and Railroad Retirement benefits.
PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2016 BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE BONDHOLDERS, INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES DESCRIBED ABOVE. PROSPECTIVE SERIES 2016 BONDHOLDERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD.
Other Tax Matters
Interest on the Series 2016 Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 2016 Bonds should consult their own tax advisors as to the income tax status of interest on the Series 2016 Bonds in their particular state or local jurisdictions.
During prior years, legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2016 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar to the Series 2016 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2016 Bonds and their market value. No assurance can be given that additional legislative
23 proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 2016 Bonds.
Tax Treatment of Original Issue Discount
Bond Counsel is further of the opinion that the difference between the principal amount of the Series 2016 Bonds maturing on October 1, _____ through and including _____ (the "Discount Bonds") and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Discount Bonds of the same maturity was sold constitutes original issue discount which is excludable from gross income for federal income tax purposes to the same extent as interest on the Series 2016 Bonds. Further, such original issue discount accrues actuarially on a constant interest rate basis over the term of each Discount Bond and the basis of each Discount Bond acquired at such initial offering price by an initial purchaser thereof will be increased by the amount of such accrued original issue discount. The accrual of original issue discount may be taken into account as an increase in the amount of tax-exempt income for purposes of determining various other tax consequences of owning the Discount Bonds, even though there will not be a corresponding cash payment. Owners of the Discount Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Discount Bonds.
Tax Treatment of Bond Premium
The difference between the principal amount of the Series 2016 Bonds maturing on October 1, _____ through and including _____ (the "Premium Bonds") and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond or, in the case of certain of the Premium Bonds that are callable prior to maturity, the amortization period and yield must be determined on the basis of the earliest call date that results in the lowest yield on such Bond. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering to the public at the initial offering price is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Premium Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds.
LITIGATION
There is no pending or, to the knowledge of the City, any threatened litigation against the City of any nature whatsoever which in any way questions or affects the validity of the Series 2016 Bonds, or any proceedings or transactions relating to their issuance, sale, execution, or delivery, or the adoption of the Bond Resolution, or the collection of Pledged Revenues. Neither the creation, organization or existence, nor the title of the present members of the City Council, or other officers of the City is being contested.
24 The City experiences claims, litigation, and various legal proceedings which individually are not expected to have a material adverse effect on the operations or financial condition of the City, but may, in the aggregate, have a material impact thereon. In the opinion of the City Attorney, however, the City will either successfully defend such actions or otherwise resolve such matters without any material adverse consequences on the financial condition of the City.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Series 2016 Bonds are subject to an approving legal opinion of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel, whose approving opinion (a form of which is attached hereto as "APPENDIX D – Form of Bond Counsel Opinion") will be available at the time of delivery of the Series 2016 Bonds. The actual legal opinion to be delivered by Bond Counsel may vary from that text if necessary to reflect facts and law on the date of delivery. Such opinion will speak only as of its date, and subsequent distribution of it by recirculation of this Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinion subsequent to its date.
Bond Counsel has not been engaged to, nor has it undertaken to, review (1) the accuracy, completeness or sufficiency of this Official Statement or any other offering material relating to the Series 2016 Bonds; provided, however, that Bond Counsel will render an opinion to the Underwriter of the Series 2016 Bonds (upon which opinion only the Underwriter may rely) relating to the fairness of the presentation of certain statements which summarize provisions of the Bond Resolution, the Series 2016 Bonds, and federal tax law, and (2) the compliance with any federal or state law with regard to the sale or distribution of the Series 2016 Bonds.
Certain legal matters will be passed upon by Salvatore Territo, Esq., Chief Assistant City Attorney, and by Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel to the City.
VERIFICATION OF ARITHMETICAL COMPUTATIONS
The accuracy of the arithmetical computation of the adequacy of the maturing principal amounts and interest earnings on the Federal Securities, if any, and any uninvested amounts deposited in the Escrow Fund to pay when due all principal of and interest on the Refunded Bonds to the redemption date will be verified for the City by Grant Thornton LLP. Such verification will be based on certain information supplied by Public Resources Advisory Group Inc.
RATINGS
Moody's Investors Service, Inc. ("Moody's), S&P Global Inc. ("S&P") and Fitch Ratings, Inc. ("Fitch") have assigned ratings of "Aa3" (stable outlook), "AA" (stable outlook) and "AA" (stable outlook), respectively, to the Series 2016 Bonds. The ratings reflect only the views of said rating agencies and an explanation of the ratings may be obtained only from said rating agencies. There is no assurance that such ratings will continue for any given period of time or that they will not be lowered or withdrawn entirely by the rating agencies, or any of them, if in their judgment, circumstances so warrant. A downward change in or withdrawal of any of such ratings may have an adverse effect on the market price of the Series 2016 Bonds. An explanation of the significance of the ratings can be received from the rating agencies at the following addresses: Moody's Investors Service, Inc., 7 World Trade Center, 250
25 Greenwich Street, 23rd Floor, New York, New York 10007, S&P Global Inc., 25 Broadway, New York, New York 10004 and Fitch Ratings, Inc., One State Street Plaza, New York, New York 10004.
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS
Pursuant to Section 517.051, Florida Statutes, as amended, no person may directly or indirectly offer or sell securities of the City except by an offering circular containing full and fair disclosure of all defaults as to principal or interest on its obligations since December 31, 1975, as provided by rule of the Office of Financial Regulation within the Florida Financial Services Commission (the "FFSC"). Pursuant to administrative rulemaking, the FFSC has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the City, and certain additional financial information, unless the City believes in good faith that such information would not be considered material by a reasonable investor. The City is not and has not been in default on any bond issued since December 31, 1975 that would be considered material by a reasonable investor.
The City has not undertaken an independent review or investigation of securities for which it has served as conduit issuer. The City does not believe that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2016 Bonds because the City would not have been obligated to pay the debt service on any such securities except from payments made to it by the private companies on whose behalf such securities were issued and no funds of the City would have been pledged or used to pay such securities or the interest thereon.
CONTINUING DISCLOSURE
The City has covenanted for the benefit of the Series 2016 Bondholders to provide certain financial information and operating data relating to the City and the Series 2016 Bonds in each year, and to provide notices of the occurrence of certain enumerated material events. The City has agreed to file annual financial information and operating data and the audited financial statements with each entity authorized and approved by the Securities and Exchange Commission (the "SEC") to act as a repository (each a "Repository") for purposes of complying with Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934 (the "Rule"). Effective July 1, 2009, the sole Repository is the Municipal Securities Rulemaking Board ("MSRB"). The City has agreed to file notices of certain enumerated material events, when and if they occur, with the Repository.
The specific nature of the financial information, operating data, and of the type of events which trigger a disclosure obligation, and other details of the undertaking are described in "APPENDIX E – Form of Continuing Disclosure Agreement" attached hereto. The Continuing Disclosure Agreement shall be executed by the City upon the issuance of the Series 2016 Bonds. These covenants have been made in order to assist the Underwriter in complying with the continuing disclosure requirements of the Rule.
With respect to the Series 2016 Bonds, no party other than the City is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the Rule. The City has generally provided continuing disclosure information with respect to its existing continuing disclosure obligations in accordance with the Rule during the last five (5) years; provided, however, a review of filings made pursuant to prior agreements indicated that: (i) certain filings were late; (ii) certain filings did not include all the disclosure information specifically required; and (iii) a filing was late concerning an upgrade on January 21, 2015 that was made by S&P applicable to the City's various series of Water
26 and Sewer System Revenue Bonds. The City reported such circumstances in accordance with the requirements of the Rule, and cured the filings referenced in (i) and (ii) above as of December 6, 2011, and the filing referenced in (iii) above as of July 6, 2015. Except as described above, in the past five years, the City has complied in all material respects with any prior agreement to provide continuing disclosure information pursuant to the Rule.
However, in order to demonstrate its continued commitment to continuing disclosure best practices, the City has included disclosure of various non-material instances of late filings in this Official Statement in the interest of being fully transparent, as more fully described below. First, the City entered into continuing disclosure undertakings in connection with the issuance by the Tampa Sports Authority of its 1995 Special Purpose Bonds, City of Tampa, Florida, Guaranteed Parking Revenue Series (Tampa Bay Arena Project) and its Taxable 1995 Special Purpose Bonds, City of Tampa, Florida, Surcharge Loan Revenue Series (Tampa Bay Arena Project) (collectively, the "TSA Bonds"). The City as part of its diligence identified in February, 2015 that, while it has satisfied such undertakings through the annual report filed each year with the Electronic Municipal Market Access ("EMMA") in connection with City bonds, the City had not linked such annual reports to the CUSIP numbers for the TSA Bonds. Upon realizing this, on or about February 17, 2015, the City linked the annual reports previously filed for the last five years to the CUSIP numbers for the TSA Bonds. Second, as a one-time occurrence, the City was late in filing fiscal year ended September 30, 2013 audited financial statements with EMMA as required by its continuing disclosure undertakings, and filed an event notice within 180 days of the end of such fiscal year. Beginning in March 2012, the City began installation of an Enterprise Resource Planning ("ERP") system to replace aging, disparate and redundant computer systems for the purpose of increasing productivity and quality of services by improving core administrative processes including accounting, budget, billing, procurement, human resources administration, payroll and code enforcement. The ERP system consisted of software packages that provided single, integrated, real-time data related to the City’s financial, operational and performance efforts. The accounting component of the ERP system was not fully implemented until two months before the fiscal year-end. As a result of the ERP implementation, completion of fiscal year ended September 30, 2013 audited financial statements were delayed, but were filed when such statements became available. The City timely filed fiscal year ended September 30, 2014 audited financial statements with EMMA as required by its continuing disclosure undertakings within 180 days of the end of such fiscal year. Third, the City has not included the table entitled "CITY OF TAMPA, FLORIDA DEBT SERVICE SCHEDULE FOR NON-AD VALOREM REVENUE OBLIGATIONS" as part of its annual filing as required in its continuing disclosure undertaking with respect to its Taxable Non-Ad Valorem Revenue Bonds, Series 2011. The City believes that the information required to be included is contained in its audited financial statements, albeit not in the same format and not all in one place. On or about July 15, 2015, the City filed the updated table in the required format. Fourth, a filing (made on September 20, 2011) was late concerning an upgrade on July 27, 2011 that was made by S&P applicable to the City's various series of Water and Sewer System Revenue Bonds; provided, however, the City did publish the upgraded rating in August 2011 in the Preliminary Official Statement relating to its Water and Sewer Systems Improvement and Refunding Revenue Bonds, Series 2011. Lastly, the City did not file certain event notices related to upgrades and/or downgrades in connection with its Solid Waste System Refunding Revenue Bonds, Series 2010 on November 30, 2011 and March 18, 2014 (insured rating upgrades and downgrades), in connection with its Sales Tax Revenue Bonds, Series 2006 on December 19, 2011, February 28, 2013, May 8, 2013, May 10, 2013, May 21, 2013, March 18, 2014 and May 21, 2014 (insured rating upgrades and downgrades), and in connection with its Water and Sewer Systems Revenue Bonds, Series 2006B on November 30, 2011, January 17, 2013 and March 18, 2014 (insured rating upgrades and downgrades). All such failures were cured on September 1, 2016. In summary, the City does not believe that the failures described in this
27 paragraph to be material failures to comply with any prior agreements to provide continuing disclosure information pursuant to the Rule.
The City fully anticipates satisfying all future disclosure obligations required pursuant to the Rule.
UNDERWRITING
The Series 2016 Bonds are being purchased by ______(the "Underwriter") at an aggregate purchase price of $______(equal to the par amount of the Series 2016 Bonds of $______plus/less a net premium/discount of $______and less an Underwriter's discount of $______). The Underwriter's obligations are subject to certain conditions precedent, and it will be obligated to purchase all of the Series 2016 Bonds if any Series 2016 Bonds are purchased. The Series 2016 Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2016 Bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriter.
FINANCIAL ADVISOR
The City has retained Public Resources Advisory Group Inc., St. Petersburg, Florida, as Financial Advisor in connection with the City's financing plans and with respect to the authorization and issuance of the Series 2016 Bonds. The Financial Advisor is not obligated to undertake and has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in the Official Statement. The Financial Advisor did not participate in the underwriting of the Series 2016 Bonds.
ENFORCEABILITY OF REMEDIES
The remedies available to the owners of the Series 2016 Bonds upon an event of default under the Bond Resolution are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically the federal bankruptcy code, the remedies specified by the Bond Resolution and the Series 2016 Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2016 Bonds, including Bond Counsel's approving opinion, will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. See "APPENDIX C – Composite of the Bond Resolution" attached hereto for a description of events of default and remedies.
CONTINGENT FEES
The City has retained Bond Counsel, Disclosure Counsel and the Financial Advisor with respect to the authorization, sale, execution and delivery of the Series 2016 Bonds. Payment of the fees of such professionals and an underwriting discount to the Underwriter are contingent upon the issuance of the Series 2016 Bonds.
28 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT
The references, excerpts, and summaries of all documents, statutes, and information concerning the City and certain reports and statistical data referred to herein do not purport to be complete, comprehensive and definitive and each such summary and reference is qualified in its entirety by reference to each such document for full and complete statements of all matters of fact relating to the Series 2016 Bonds, the security for the payment of the Series 2016 Bonds and the rights and obligations of the owners thereof and to each such statute, report or instrument. Copies of such documents may be obtained from either the office of the City Clerk, Shirley Foxx-Knowles, 315 East Kennedy Boulevard, Tampa, Florida 33602, telephone (813) 274-8397.
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2016 Bonds.
The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety together with all foregoing statements.
AUTHORIZATION OF OFFICIAL STATEMENT
The execution and delivery of this Official Statement has been duly authorized and approved by the City. At the time of delivery of the Series 2016 Bonds, the City will furnish a certificate to the effect that nothing has come to its attention which would lead it to believe that the Official Statement (other than information herein related to DTC, the book-entry only system of registration and the information contained under the caption "TAX EXEMPTION" as to which no opinion shall be expressed), as of its date and as of the date of delivery of the Series 2016 Bonds, contains an untrue statement of a material fact or omits to state a material fact which should be included therein for the purposes for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.
CITY OF TAMPA, FLORIDA
By Mayor
By: Chief Financial Officer
29 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX A
General Information Regarding the City of Tampa
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GENERAL INFORMATION REGARDING THE CITY OF TAMPA
General
The information contained in this appendix was compiled by the City of Tampa, Florida (the "City") from a number of sources including Hillsborough County, Florida (the "County"), the Hillsborough Area Regional Transit Authority ("HART"), the Hillsborough County Tax Collector, the Hillsborough County Property Appraiser and other sources the City believes to be reliable.
Nothing contained herein represents a warranty by the City, however, as to the completeness or accuracy of material presented or that there will not occur material developments or circumstances subsequent to the date hereof. Some of the information has been obtained from sources not within the control of the City, nor has the City undertaken to independently verify such information.
THE CITY
Background
The City, initially incorporated in 1855 with a second incorporation in 1887, is the largest city in the County, is the county seat, and is the third most populous city in Florida. It is located on the west coast of Florida, approximately 200 miles northwest of Miami, 180 miles southwest of Jacksonville, and 20 miles northeast of St. Petersburg. The City currently occupies 113 square miles and serves a population of 369,075. The City is empowered to levy a property tax on real property located within its boundaries. It is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the City Council.
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A-1 Population
The following table shows the population of the City, the County (of which the City is the county seat) and of the State of Florida at the times indicated.
Historical
Year City County State 1920 51,608 88,257 968,470 1930 101,161 153,519 1,468,211 1940 108,391 180,148 1,897,414 1950 124,681 249,894 2,771,305 1960 274,970 397,788 4,951,560 1970 279,913 490,265 6,791,418 1980 274,340 646,960 9,746,324 1990 280,015 834,054 12,937,926 2000 303,447 998,948 15,982,378 2010 335,709 1,229,226 18,801,310 2011 337,170 1,238,410 19,107,900 2012 338,560 1,247,440 19,355,257 2013 342,830 1,263,050 19,600,311 2014 358,699 1,316,298 19,893,297 2015 369,075 1,349,050 20,271,272
Source: Hillsborough County Planning Commission and Florida Research and Economic Information Database Application and U.S. Census Bureau.
City Government
The City has operated under a strong mayor-council form of government since 1945. Legislative authority is vested in an elected City Council consisting of seven (7) members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and approving the hiring of department head nominees submitted by the Mayor. The Mayor is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City, for drafting the budget and submitting it to the City Council for approval, and for nominating department heads for hiring approval by the City Council. The Mayor and all seven (7) City Council members are elected every four years with a term limit of two consecutive terms. The Mayor and three City Council members are elected at large, and four City Council members are elected from single- member districts within the City. However, the three City Council members who are chosen from one of the three at-large districts may choose to run in a single-member district, and the four City Council members who are elected from a single-member district may run in an at-large district. There are no limits on the number of times the City Council Member may utilize this option. The Mayor, current members of the City Council and expiration of their current terms of office are:
A-2 Mayor and City Council Members Date Term Expires Bob Buckhorn, Mayor March 31, 2019 Mike Suarez, Chair March 31, 2019 Harry Cohen, Chair Pro Tem March 31, 2019 Yvonne Yolie Capin March 31, 2019 Guido Maniscalco March 31, 2019 Charlie Miranda March 31, 2019 Lisa J. Montelione November 8, 2016(1) Frank Reddick March 31, 2019
(1) Lisa Montelione has submitted her resignation effective November 8, 2016. The General Election will be held on November 8, 2016, which will include the election for the new City Council Member for District 7.
The City provides a full range of services, including police and fire protection; the construction of streets, and other infrastructure; recreation and park facilities, convention facilities, and water, wastewater, solid waste, and parking operations. For more information, see "APPENDIX B – General Purpose Financial Statements for Fiscal Year Ended September 30, 2015" attached to this Official Statement.
The annual budget serves as the foundation for the City’s financial planning and control. All departments of the City are required to submit requests for appropriation to the Mayor. The Mayor uses these requests as the starting point for developing the proposed budget. The Mayor then presents this proposed budget to the City Council for review prior to August 15. The City Council is required to hold two public hearings on the proposed budget and to adopt a final budget no later than September 30, the close of the City’s fiscal year.
PROPERTY TAXES
General Information
Ad valorem tax revenues are the product of the assessed valuation of taxable real, personal and other property within the jurisdiction of the taxing unit of government and the tax rate expressed in mills. See "FLORIDA CONSTITUTIONAL LIMITATIONS AND PROPERTY TAX REFORM" herein for information on recent legislation, legislative proposals and constitutional amendments related to property taxes. Ad valorem taxes may not be pledged for the payment of debt obligations of the City maturing more than twelve months from the date of issuance thereof without approval of the electorate of the City. The ad valorem tax revenues of the City are not pledged as security for the payment of the Series 2016 Bonds.
Assessments
The Hillsborough County Property Appraiser is responsible for preparing an annual tax assessment roll based on the "just value" of taxable property within the County as of each January 1. Real property improvements are added to the tax roll on the January 1 as of which they are substantially completed. The tax assessment roll is required to be submitted to the Florida Department of Revenue ("FDOR") by July 1 of each year. The FDOR has statutory authority to review and establish administrative guidelines for the certification of property assessment rolls. Based on those regulations,
A-3 the FDOR certified the tax assessment roll for the County, based on January 1, 2015 property valuations, at 93.8% of just value which is equal to, or greater than the 90% required for certification. The Hillsborough County Property Appraiser used the eight factors enumerated in Chapter 193, Florida Statutes, to arrive at a fair market value in determining just value for purposes of the tax roll. The Hillsborough County Property Appraiser is required by law to revalue property within the County annually and to inspect property every three years.
Tax Rates
Each unit of local government establishes its tax rate (millage) annually. The constitutional limit on City, County and school taxes is ten mills for each unit of government. The limit for special districts is fixed by law, but constitutionally may not exceed ten mills. The limit of HART is 0.5 mills. The limits may be exceeded for debt service on bonds approved by the voters in a referendum. The units of local government are statutorily required to establish their tax rates by October 1 of each year.
Timing
Assessed valuations of property subject to taxation as reflected on a tax roll as of January 1 provide the basis for ad valorem tax revenues in the fiscal year beginning on October 1 in the same calendar year (that is, in the next ensuing fiscal year). Unless otherwise noted herein, the information presented with respect to property assessments and tax levies is presented for the fiscal year in which the tax revenues were or will be received. For example, the information for 2016 tax revenues reflects tax receipts during the fiscal year began October 1, 2015 and ended September 30, 2016, based on property assessments as of January 1, 2015.
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CITY OF TAMPA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY--LAST TEN FISCAL YEARS (In Thousands)
Personal and Other Real Property Property Exemptions Total Percent of Total Assessed Value to Tax Estimated Personal Estimated Total Fiscal Roll Assessed Estimated Assessed Actual Real and Other Assessed Actual Estimated Year Year Value Actual Value (1) Value Value(1) Property Property Value Value (1) Actual Value
2006 2005 $19,794,047 $31,833,662 $2,508,328 $3,747,838 $12,039,615 $1,239,510 $22,302,375 $35,581,500 62.7% 2007 2006 24,219,249 39,073,657 2,571,751 3,708,425 14,854,408 1,136,674 26,791,000 42,782,082 62.6 2008 2007 26,836,867 41,251,302 2,612,228 3,738,405 14,414,435 1,126,177 29,449,095 44,989,707 65.5 2009 2008 26,347,813 40,613,811 2,569,793 4,021,298 14,265,998 1,451,505 28,917,606 44,635,109 64.8 2010 2009 22,850,234 33,972,604 2,581,493 4,039,572 11,122,370 1,458,079 25,431,727 38,012,176 66.9 2011 2010 19,835,790 27,460,623 2,382,004 4,074,018 7,624,833 1,692,014 22,217,794 31,534,641 70.5 2012 2011 19,108,057 26,432,077 2,263,030 3,917,986 7,324,020 1,654,956 21,371,087 30,350,063 70.4 2013 2012 18,787,733 25,999,456 2,334,787 4,008,662 7,211,723 1,673,875 21,122,520 30,008,118 70.4 2014 2013 20,083,413 27,447,148 2,300,056 3,981,519 7,363,735 1,681,463 22,383,469 31,428,667 71.2 2015 2014 21,443,974 28,939,090 2,540,865 4,302,633 7,495,116 1,761,768 23,984,839 33,241,723 72.2
(1) By law, property is assessed at "just value" which should approximate actual value. Source: Hillsborough County Property Appraiser.
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CITY OF TAMPA PROPERTY TAX LEVIES AND COLLECTIONS--LAST TEN FISCAL YEARS (In Thousands)
Outstanding Total Delinquent Collections Taxes Tax Percent Delinquent As Percent Outstanding As Percent of Fiscal Roll Total Tax Current Tax of Levy Tax Total Tax of Current Delinquent Current Year Year Millage Levy Collections Collected Collections Collections Levy Taxes Levy
2006 2005 6.54 $146,471 $140,530 95.94% $492 $141,022 96.28% $912 0.62% 2007 2006 6.41 172,490 165,953 96.21 150 166,103 96.30 727 0.42 2008 2007 5.73 169,640 162,558 95.83 1,079 163,637 96.46 793 0.47 2009 2008 5.73 166,527 159,361 95.70 626 159,987 96.07 1,616 0.97 2010 2009 5.73 145,920 138,843 95.15 548 139,391 95.53 2,602 1.78 2011 2010 5.73 127,877 120,756 94.43 1,280 122,036 95.43 4,111 3.21 2012 2011 5.73 122,960 117,585 95.63 1,823 119,408 97.11 2,809 2.28 2013 2012 5.73 121,555 116,067 95.49 1,327 117,394 96.58 1,721 1.42 2014 2013 5.73 129,045 123,715 95.87 529 124,244 96.28 1,683 1.30 2015 2014 5.73 138,056 132,654 96.09 373 133,027 96.36 509 0.37
Source: Hillsborough County Tax Collector.
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SUMMARY STATEMENT OF THE PRINCIPAL AMOUNT OF CITY DEBT September 30, 2015
General Non-Self Self Obligation Supporting Supporting Debt Debt(1) Debt(2) Tampa Sports Authority Special Purpose Bonds Guaranteed Parking Revenue Bonds, Series 1995 $5,910,000 Tampa Sports Authority Taxable Special Purpose Bonds Surcharge Loan, Series 1995 1,815,000 Utilities Tax Improvement Bonds, Series 1996 54,400,000 Utilities Tax Improvement Bonds, Series 1997 7,865,000 Guaranteed Entitlement Refunding Revenue Bonds, Series 2001 970,000 Utilities Tax and Special Revenue Refunding Bonds, Series 2001B 12,785,000 Sales Tax Revenue Bonds, Series 2006(3) 11,955,000 Utilities Tax Refunding Revenue Bonds, Series 2006(4) 13,955,000 Occupational License Tax Refunding Revenue Bonds, Series 2007 45,725,000 HUD Section 108 Loan Guarantee(5) 6,340,000 Sales Tax Refunding Revenue Bonds, Series 2010 32,885,000 Utilities Tax Revenue Bonds (Federally Taxable Build America Bonds – Direct Payment), Series 2010A 11,610,000 Utilities Tax Revenue Bonds (Federally Taxable Recovery Zone Economic Development Bonds – Direct Payment), Series 2010B 8,045,000 Taxable Non-Ad Valorem Revenue Bonds, Series 2011 17,985,000 Utilities Tax Refunding Revenue Bonds, Series 2012A 23,965,000 Utilities Tax Revenue Bonds, Series 2012B 13,215,000 Taxable Utilities Tax Refunding Revenue Bonds, Series 2012C 7,870,000 Occupational License Tax Refunding Bonds, Taxable Series 2012K-1 (Gulf Breeze Loan) 21,975,000 Non-Ad Valorem Refunding Revenue Bonds, Series 2015 36,880,000 Water and Sewer Systems Refunding Revenue Bonds, Series 2002 $10,465,000 Water and Sewer Systems Refunding Revenue Bonds, Series 2005 7,285,000 Water and Sewer System Revenue Bonds, Series 2006 1,705,000 Water and Sewer System Revenue Bonds, Series 2007 3,465,000 Water and Sewer Systems Improvement and Refunding Revenue Bonds, Series 2011 116,550,000 Water and Sewer Systems Refunding Revenue Bonds, Series 2015 86,790,000 Water and Sewer State Revolving Loan Program 26,708,910 Solid Waste System Refunding Revenue Bonds, Series 2010 54,955,000 Solid Waste System Refunding Revenue Bonds, Series 2013 25,155,000 Total $336,150,000 $333,078,910
(1) Subsequent to September 30, 2015, the City expects to enter into a Non-Revolving Line of Credit, in an amount not to exceed $60,000,000, to be secured by the City’s covenant to budget and appropriate legally available non-ad valorem revenues. (2) Subsequent to September 30, 2015, the City entered into a State of Florida Revolving Fund Loan Agreement for the Water and Wastewater Systems in the principal amount not to exceed $18,843,582, and issued its Water and Wastewater Systems Revenue Bond, Series 2016 in the principal amount of $11,760,000, both secured by net revenues of the Water and Wastewater Systems. (3) The City anticipates refunding all or a portion of the Sales Tax Revenue Bonds, Series 2006 with proceeds from the Sales Tax Refunding and Improvement Revenue Bonds, Series 2016 in principal amount expected to be $51,665,000, which in part finances new money projects. The outstanding amount does not reflect the partial refunding of the Series 2006 Bonds. (4) The City anticipates refunding a portion of the Utilities Tax Refunding Revenue Bonds, Series 2006 with proceeds from the Non-Ad Valorem Refunding Revenue Bonds, Series 2016 in principal amount expected to be $35,840,000, which in part finances new money projects. The outstanding amount does not reflect the partial refunding of the Series 2006 Bonds. (5) Proceeds of this loan were loaned to a private entity for the construction of an entertainment complex in Ybor City. The loan is currently being paid in part by the City from non-ad valorem revenues, and in part by the Ybor Community Redevelopment Agency, because the private entity was unable to make scheduled debt service payments and defaulted on the loan.
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COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT September 30, 2015 (In Thousands)
Percentage of Debt Net Debt Applicable to Share of Outstanding City of Tampa Debt City of Tampa $336,964(1) 100.00% $336,964 Hillsborough County 63,660(2) 35.12 22,357 Hillsborough County School Board 0 0.00 0 Total Overlapping Debt $359,321(3)
(1) The City of Tampa has no bonded debt supported by property taxes; all bonds are secured by non-ad valorem revenue sources. Net Debt Outstanding includes $1,929,769 in capital leases minus $1,115,590 in unamortized discounts. (2) Clerk of Circuit Court, Hillsborough County. (3) The total Overlapping Debt is calculated by multiplying the City of Tampa's Percentage of Debt by the total Net Debt Outstanding in Hillsborough County.
CITY DEVELOPMENT AND FACILITIES
Tampa's economy is based on tourism, agriculture, construction, finance, marine/trade port, health care and other industries. In its earliest days, the City's industrial base developed around heavy industries such as phosphate mining and steel mills, the port and transportation and warehouse facilities. Tampa continues to attract key industries such as corporate headquarters, bioscience, international trade, technology, financial services, manufacturing, and distribution companies.
CITY LOCAL FACILITIES
Recreational Facilities
A variety of entertainment activities may be found in the City including numerous parks, beaches, restaurants with international cuisine, excellent golf courses, racquetball courts, saltwater fishing, tennis and shopping. Recreational facilities that appeal to both City residents and visitors are either located within the City or are only a short drive away. Walt Disney World including Hollywood Studios Theme Park, Universal Studios, and Sea World are all just over an hour's drive to the east. Two- thirds of the state's major attractions lie within a 100-mile radius of Tampa. Busch Gardens located in Tampa is a family adventure park offering an array of fascinating attractions based on exotic encounters with the African continent. It offers an appealing blend of thrilling rides, one of the Country's premier zoos featuring more than 3,000 animals, live shows, restaurants, shops and games. Adventure Island, which is located next to Busch Gardens, is a 30-acre waterpark with a beach volleyball complex, waterslides, pools, and kid-friendly attractions.
The City is home to the Tampa Bay Buccaneers professional football team, who were the NFL Superbowl Champions in 2003. The Tampa Bay Buccaneers and University of South Florida (USF) Bulls football teams play their home games at Raymond James Stadium in Tampa. Raymond James Stadium is
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a combination of modern stadium design and its own innovations. Raymond James Stadium has a seating capacity of 65,890, expandable to 75,000, 12,000 club seats, 195 luxury suites, and 600 points of sale for food, beverages and merchandise. The stadium is currently undergoing substantial renovations and upgrades to include the replacement of two main scoreboards, installation of new sound amplification equipment, and replacement of stadium seating. Raymond James Stadium has hosted special events such as NFL Super Bowl XXXV in 2001, and NFL Super Bowl XLIII in 2009. The City will also host the college football national championship game in January 2017.
In the heart of downtown Tampa's Channelside District, between the Tampa Convention Center and the Florida Aquarium, lies the Amalie Arena, one of the premier entertainment venues in the southeast. It is home of the Tampa Bay Lightning professional hockey team, and 2004 Stanley Cup Champions. The Amalie Arena also hosts many concerts, family shows and sporting events each year. From 2011-2013 Amalie Arena underwent substantial renovation and upgrades totaling over $62 million that include improved, brighter lighting, a party deck, digital pipe organ, restroom renovations, and suite upgrades.
In addition, the New York Yankees professional baseball team has spring training at the County's George M. Steinbrenner Field baseball stadium in Tampa. Proposed improvements to George M. Steinbrenner Field in the approximate amount of $40 million are expected to include the addition of new concourses and fan gathering spots to provide 360 degree views and may be completed as early as the Spring of 2017.
The USF Sun Dome is a multipurpose 11,400-seat arena located on the campus of USF and is home to the National Collegiate Athletic Association's USF Men's and Women's basketball teams as well as other USF events. In 2012, the Sun Dome underwent substantial renovation and upgrade.
Thoroughbred horse racing is also seasonally available in the County.
Source: Busch Gardens, Tampa www.buschgardens.com Adventure Island www.adventureisland.com City of Tampa www.tampagov.net Raymond James Stadium www.raymondjamesstadium.com Tampa Bay Buccaneers www.buccaneers.com Tampa Sports Authority www.tampasportsauthority.com USF Sun Dome http://usfweb2.usf.edu/Sundome
Cultural Facilities
The City offers a variety of cultural facilities to residents and visitors. Lowry Park Zoo was ranked the number-one family-friendly zoo in the United States in 2009 by Parents magazine and in 2004 by Child magazine, five-time winner of the Trip Advisor Certificate of Excellence (2010-2015) and recognized by the State of Florida as a center for Florida wildlife conservation and biodiversity. Natural outdoor exhibits covering 56 acres for more than 1,200 animals from Florida and similar habitats include a Native Florida Wildlife Center and manatee hospital, Asian Gardens, Primate World, Free-Flight Aviaries, Wallaroo Station children's zoo, and Safari Africa. The Zoo also features rides, shows and hands-on interactive exhibits. The Florida Environmental Education Center (Zoo School) is a 17,400 square foot hands-on learning facility that serves more than 170,000 children annually. Programs offered are summer and holiday camps, daycare, and preschool.
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The 200,000 square foot Florida Aquarium is among the top aquariums in the world with more than 20,000 aquatic plants and animals from Florida and around the world, 8 exhibits, and a 2-acre outdoor water play area. The Florida Aquarium is ranked in the top 10 aquariums in the country by TripAdvisor.com and ranked in the top 5 "Kid-Friendly Aquariums" by Parents Magazine.
The Straz Center for the Performing Arts (the "Straz Center") is located on a nine-acre site along the east bank of the Hillsborough River. The Straz Center is the fourth largest performing arts institution in the country and provides an environment for a wide variety of world-class events. The 335,000 square- foot Straz Center includes five theaters, a rehearsal hall, coffee shop, and three restaurants. It boasts one of the nation's leading Broadway series and is nationally respected for producing grand opera, as well as presenting a wide variety of concerts, performances and events. Also, the Patel Conservatory, the only accredited performing arts school in the region, offers more than 100 performing arts classes in dance, theater and music for students of all ages and experience levels.
The Tampa Convention Center, located directly on the waterfront in the heart of downtown Tampa, hosts a variety of conventions, tradeshows, and other special events year-round. The 600,000 square foot building offers 200,000 square feet of exhibit space, a 36,000 square foot ballroom, and 36 breakout rooms which total over 42,000 square feet of additional meeting space. Add to that, over 84,000 square feet of flexible space and you have an excellent venue for any meeting, convention or special event. After a busy day of lectures, seminars or classes, attendees are welcome to visit Ybor City or Channelside (restaurants, shops and bars) located just a trolley ride away.
The Museum of Science and Industry ("MOSI"), is a science and technology center focused on engaging visitors through hands-on displays and interactive exhibits on space, astronomy, technology, robotics, and gaming making science real for people of all ages. With a 74-acre campus and over 400,000 square feet for exhibits, MOSI features more over 450 interactive activities including a butterfly garden, historic tree grove, back woods forest preserve, planetarium, hurricane simulator, IMAX Dome theater, NASA's Mission: Moonbase interactive experience, SkyTrail Ropes Course and Zip Line, and more. MOSI is recognized as the largest children's science center in the nation, largest science center in the southeast, and the 5th largest science center in the United States.
The Tampa Bay History Center Museum is located in the Channelside district with exhibits about 12,000 years of Florida history, focusing on the Tampa Bay region. The History Center is affiliated with the Smithsonian Institution providing the museum access to the Smithsonian's collection of more than 138 million artifacts as well as support for educational programs.
Other museums in the area include the Tampa Museum of Art featuring over 26,000 square-feet of exhibition space focusing on antiquities as well as modern and contemporary art, the historic H. B. Plant Museum at the University of Tampa, the Contemporary Art Museum at USF, the Scarfone Gallery at the University of Tampa, the Veteran's Memorial Museum and Park, the Ybor City State Museum, the Florida Museum of Photographic Arts and the Glazer Children's Museum.
Annual events include the Gasparilla Invasion and Parade of the Pirates. This pirate invasion and celebration, held for over a century, pays homage to Tampa's last great mythical buccaneer, Jose Gaspar. The Outback Bowl provides championship college football in January and Plant City's Strawberry Festival in the spring offers world renowned entertainment and a never ending supply of strawberry shortcake.
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Source: Arts Council of Hillsborough County www.tampaarts.com City of Tampa www.tampagov.net Florida Aquarium www.flaquarium.org Lowry Park Zoo www.lowryparkzoo.com Museum of Science and Industry www.MOSI.org Tampa Bay History Center www.tampabayhistorycenter.org Tampa Museum of Art www.tampamuseum.org Tampa Bay Performing Arts Center www.tbpac.org Smithsonian http://www.si.edu
Recent Economic Development Activities
Tampa International Airport ("TIA") has continued to make substantial progress on its $953 million expansion. Already considered one of the most user friendly airports in the world, the planned improvements will further enhance the airport’s reputation by frequent flyers. TIA passenger traffic was up a healthy 7.19% for calendar year 2015 over 2014 statistics.
Port Tampa Bay, another important economic driver for the region, has positioned itself to respond to the widening of the Panama Canal by taking delivery of two new Post Panamax cargo cranes. Handling approximately 37 million tons of cargo last year, Port Tampa Bay continues to drive investment and employment in the region.
The Downtown Riverwalk, a 2.6 mile continuous walkway stretching from the Channelside area to Water Works Park has been completed. The City was awarded a $10.9 million federal TIGER grant in June 2012 to fund the completion of the last remaining section through the middle of downtown. Total estimated cost of the Riverwalk is $32 million. The project has spurred investment in residential and commercial development adjacent to the project.
Julian B. Lane Riverfront Park is undergoing approximately $35 million of improvement to promote a diverse and economically integrated community.
The West Tampa Redevelopment Area focuses on approximately 964 acres-bounded by Armenia Avenue, Columbus Avenue, the Hillsborough River and Interstate 275. The plan recommends reconnecting the streets grids and to strengthen ties with public education and community services. The project will focus on rebuilding the community and providing linkages to the Hillsborough River and emergent activities south of I-275 in North Hyde Park. The project, led by the Tampa Housing Authority and the City of Tampa, will create more than 2,000 new residential units, with a variety of housing styles and affordability. The Housing Authority has identified Bank of America and Related Group of Florida as their development partners. Application was submitted for a Choice Neighborhood Grant to leverage investment by the entities involved in the project. The City of Tampa has taken the first step in recreating the neighborhood by pledging $35 million to reinvent Julian Lane Waterfront Park, a 23-acre park located strategically for the neighborhood along the Hillsborough River. The goal of this project is to create a genuinely diverse and economically integrated community.
Downtown Tampa continues to see a tremendous amount of investment in residential properties. There are currently over 3,000 residential units either recently completed, under construction or about to start construction in the immediate area of downtown. A considerable amount of this investment is being
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made by companies from outside the Tampa area. Outside interests have invested in excess of $300 million in downtown hotels and office buildings in the last year. The construction of the University of South Florida’s Medical school in downtown is expected to spur additional investment.
Construction continues at the Encore project, a 30-acre mixed use, mixed income project owned by the Tampa Housing Authority. The development is located immediately north of the central business district. The development includes the following projects:
• Ella at Encore- 160-unit apartment building for seniors completed in December 2012. Estimated cost of $25 million.
• Trio at Encore- 141-unit apartment building that opened in June 2014. Estimated cost of $26.8 million.
• Reed at Encore- 158-unit apartment building for seniors. Construction began in summer 2013 and opened for business in June 2015. Estimated cost of $28.9 million.
• Tempo at Encore- 203-unit apartment building for families. Expected opening date of fall 2016. Estimated cost of $44.2 million.
Tampa-based developers SoHo Capital have acquired the 37-acre site immediately north of downtown and are moving forward with a new vision to build a historic-style, mixed-use neighborhood called The Heights. The Heights is anchored by adapting the huge Armature Works brick warehouse, and surrounding it with offices, a boutique hotel, a grocery store, 1,600-plus homes and a park on waterfront. Plans call for development to take place in three, two-year phases. The group is currently permitting for infrastructure improvements, a 350 unit residential property and the renovation of the Armature Work.
Job Growth
The Tampa Bay area has created more jobs in the past year than any other area in Florida. The unemployment rate for Hillsborough County stands at 5.0% as of 2015. Major corporate relocations and expansions include Bristol-Myers Squibb Company with approximately 250 employees. The company will add up to 325 additional jobs supporting scientific and technical activities at the site by 2017. Bristol- Myers indicated they "specifically selected Hillsborough County for several reasons, including its talented work force, strong university presence, the Tampa Bay region's business climate, economy, quality of life, and availability of the necessary logistics and office facilities." Johnson and Johnson followed Bristol Meyers Squibb by opening a similar corporate facility that employs 500. Amazon has constructed a million square foot customer fulfillment center that employs over 1,000 employees. USAA, who already employs over a 1,000 in Tampa, has opened a new 500,000 square foot facility to house an additional 1,215 employees.
USF has proposed construction of its new medical school and heart institute in downtown Tampa located at the corner of Meridian Avenue and Channelside Drive. The new Morsani College of Medicine and USF Health Heart Institute will bring together superior medical education, clinical care, and research to improve patient care and health outcomes. The new facility would provide immediate access to Tampa General Hospital, USF's primary teaching hospital as well as proximity to USF's CAMLS (Center for Advanced Medical Learning and Simulation) and the Health Tampa Bay Research and Innovation
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Center at CAMLS. The new medical school also anchors the plan by Tampa Bay Lightning owner and USF partner, Jeff Vinik, to create an economically thriving downtown waterfront environment where people could live, work and play.
Strategic Property Partners’ joint venture, with Bill Gates’ Cascade Investments, plans investing $2 billion development plan for downtown Tampa. From the Tampa Convention Center to the Florida Aquarium, the southern end of downtown would become the city's new entertainment district. The project will include creating a new biotech hub, new office centers, a walkable neighborhood, and enhancing the waterfront. Elements include the relocation of the USF medical school, enhancements to Tampa's Riverwalk and potentially adding a small waterfront park to the back of the Channelside Bay Plaza. Project construction is expected to begin in August of 2016. The project will be built in phases and is expected to take a decade to complete. The project would provide 1.1 million square feet of office space, 660,000 square feet of residential space, 575,000 square feet of hotel/meeting space, 330,000 square feet of USF Downtown Campus, 250,000 square feet of retail space, 50,000 square feet central energy/cooling plant, and 5,000 new parking spaces. The project could potentially generate $35 million in new tax revenue annually.
Source: http://www.tampabay.com/news/business/realestate/after-decade-of-false-starts-new-team-takes- on-the-heights/2142845 http://www.tbo.com/news/business/tampa-metro-area-leads-state-in-job-creation-20151218 http://www.bizjournals.com/tampabay/blog/latin/2013/12/copa-will-fly-larger-aircraft-to-tia.html http://www.invisiontampa.com/West_Riverfront_Plan.html http://www.encoretampa.com
TAMPA BAY AREA DEMOGRAPHIC, ECONOMIC AND OTHER INFORMATION
Hillsborough County
Service, retail, finance, insurance, and real estate sectors lead regional and county industry. Bioscience and other high-tech industries are expanding, thanks in part to research at university and college campuses throughout the area. Manufacturing in the County is also participating in the high-tech trend and is home to companies in the microelectronics, medical devices, software, and defense systems industries.
Transportation
TIA is a major airport for the west central region of Florida serving primarily Hillsborough, Pinellas (which includes the cities of St. Petersburg and Clearwater), Pasco, Manatee, Polk, and Hernando Counties.
TIA, a facility of approximately 3,300 acres, is used primarily for commercial aviation by certified scheduled airlines. TIA is primarily an origin-destination airport and the service region is a large air traffic hub, as defined by the Federal Aviation Administration. During 2015, 18.8 million passengers enplaned and deplaned at the airport, 187.4 million pounds of cargo were handled, and 203.3 million pounds of mail were transported. TIA is highly regarded for its efficiency and passenger convenience receiving numerous awards over the years. In February 2015, TIA was named North America's second- best airport by Airports Council International. The airport also ranks fifth in the world in customer satisfaction for airports serving 15 million to 25 million passengers.
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In 2014, TIA was served by 24 major/national/international, three regional, three Cuba charters, and three air cargo airlines. International passenger traffic at TIA has increased by 52.2% since 2010. In December 2013, Copa Airlines began offering non-stop service between Panama increasing tourism and business opportunities between Latin America and the Tampa Bay area. Alaska Airlines launched daily nonstop service to Seattle from TIA in June of 2014. In February 2015, Silver Airways began nonstop service to the Bahamas from TIA. In September 2015, Lufthansa began offering nonstop service between Frankfurt and Tampa. In 2017 United Airlines will begin non-stop service to San Francisco. Three general aviation airports serve as reliever airports, primarily to accommodate light and medium weight aircraft in the general aviation category. These include Peter O. Knight Airport, a 139-acre facility located six miles southeast of TIA; Plant City Airport, a 199-acre facility located 22 miles east of TIA; and Tampa Executive Airport (formerly Vandenberg Airport), a 407-acre facility located 12 miles east of TIA. In addition, there are two full service general aviation executive terminals located at TIA. TIA also ranked as the second best airport according to a survey conducted by Travel + Leisure magazine in 2015.
AMTRAK provides passenger rail service to major cities throughout the United States. Tampa Union Station, located in Downtown Tampa, offers Amtrak service for the New York-Miami Silver Star passenger trains twice daily (one northbound departure and one southbound departure). Amtrak Thruway motor coach services are also provided from Tampa Union Station for connection with the New York-Miami Silver Meteor trains. Tampa Union Station is located in Downtown Tampa near Ybor City. In 2012, Tampa Union Station's Centennial year, the station was added to the National Register of Historic Railroad Landmarks by the National Railway Historical Society. Restoration of Tampa Union Station was a multi-year effort and was completed in May 1998. At the completion of the restoration, CSX donated the station to the City.
Freight rail service is provided to the County by CSX Transportation Systems. CSX rail units possess some of the world's most technologically advanced terminal equipment and operate on regular schedules throughout the network. Major transports include coal, wood products, phosphate, chemicals, construction materials, semi-tractor trailers, automobiles, and automobile products.
Hillsborough Area Regional Transit Authority ("HART") is the County's public transportation system. HART offers local and express bus routes for residents and visitors alike. Local service provides access to area shopping malls, businesses, government buildings, attractions and recreational facilities seven days a week. HART, with the addition of Rapid Metro and other improvements, has increased ridership to over 15 million annually.
The County is also served by numerous intrastate and interstate motor common carriers, moving goods between the City, other points in Florida, and markets throughout the United States. The City is the transportation hub of the west coast of Florida with major trucking firms maintaining terminals serving Florida and major southern cities.
Three interstates and seven other major highways serve the County. All parts of Florida and bordering states to the north and west can be reached within one day of travel by truck or automobile.
Source: Hillsborough County Aviation Authority/Tampa International Airport, www.tampaairport.com Amtrak, www.amtrak.com Hillsborough Area Regional Transit Authority, www.gohart.org Tampa Union Station, www.tampaunionstation.com
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Port Facilities
Port Tampa Bay (the "Port") is a very significant economic engine in West Central Florida. Port Tampa Bay is one of the nation's most diversified ports; it is the petroleum and energy gateway for West/Central Florida, the largest steel port in Florida, one of the world's premier fertilizer ports, one of the top shipbuilding and repair centers in the Southeast, and a major cruise home port. Designated as a Foreign Trade Zone (FTZ No. 79), Port Tampa Bay is Florida's largest cargo tonnage port. The Port handled 37.4 million tons of cargo and provided a $15 billion annual economic impact. The 5,000- acre Port is home to many businesses which handled 3,093 vessels during fiscal year 2015. With a 43 foot- deep main channel and one of the largest shipbuilding and repair centers in the Southeast, the Port is a full-service facility for shipping lines and is the closest major U.S. port to the Panama Canal. The Port also hosts North America's largest dockside cold storage terminal. More than one million square feet of warehouse/storage space is available at the Port. Proximity to Mexico, the Caribbean cruise market, and developing Central and South American markets make the Port a gateway to several destinations both inbound and outbound. In 2015, cruise passengers coming through the Port Tampa totaled 867,114 and this is expected to increase with the German cruise line, Aida, making seven ports of call in Tampa during the 2016 season.
Seventy-five percent of Port cargo is inbound, and with its location on the west end of Florida's Interstate 4 corridor, the Port is ideally located to supply in-state demands for construction materials, commodities, and consumer products.
Source: Tampa Port Authority, www.tampaport.com
Military Facilities
MacDill Air Force Base is located eight miles south of downtown Tampa on the southwestern tip of the Interbay Peninsula on the west coast of Florida. The host organization is the 6th Air Mobility Fueling Wing, which uses KC-135 Stratotankers and C-37A's to conduct its air mobility mission. It is headquarters for two non-aviation units: the United States Central Command and the United States Special Operations Command.
Source: MacDill Air Force Base
Communications
Six television stations, one local, cable news station, along with twenty-five radio stations serve the City. The only daily newspaper is The Tampa Bay Times. There are also three other weekly, and two monthly newspapers. Verizon and Bright House Networks were the primary providers for telecommunications and cable services, respectively. However, as of 2016, Frontier Communications acquired Verizon and Bright House Networks merged with Charter Communications. There are 40 post offices in the County.
Source: Florida Smart — News and Media Directory Greater Tampa Chamber of Commerce - Committee of One Hundred
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Education
The County also has several universities and colleges. USF serves nearly 48,000 students and 180 degree programs at the undergraduate, graduate, specialty and doctoral levels, including the doctor of medicine. USF is one of the nation's top 50 public research universities; it is one of only four Florida public universities classified by the Carnegie Foundation for the Advancement of Teaching in the top tier of research universities, a distinction attained by only 2.3 percent of all universities. The University of Tampa (UT) is a private university located on approximately 100 acres of prime riverfront land in the heart of downtown Tampa. UT provides about 200 fields of study to 8,037 students enrolled for 2015- 2016 including various graduate studies programs. Hillsborough Community College (HCC) offers an array of business, technical, and health sciences. HCC has five primary campus locations, two satellite locations, a very active distance learning program, and a comprehensive corporate training center.
Also near downtown is the Tampa Law Center of the Stetson University College of Law. Saint Leo University, just north of Tampa, has a center at MacDill Air Force Base and has been recognized as one of the top military-friendly colleges and universities.
Hillsborough County Public Schools is the eighth largest school district in the nation and third largest in Florida with more than 204,089 K-12 students. A total of 250 elementary, middle, senior high, and adult schools accommodate students, both day and evening. All Hillsborough County Public Schools fully meet the standards established by the Florida Department of Education. In addition, all high schools are duly accredited by the Southern Association of Colleges and Schools ("SACS"). All elementary and middle schools meet or exceed SACS standards.
Source: Hillsborough County School District; Hillsborough County School District Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2015 Greater Tampa Chamber of Commerce U.S. Department of Education; Hillsborough County Public Schools
Medical Facilities
The County has fourteen general, specialty, and military hospitals with approximately 4,152 hospital beds, 6,798 assisted living facility beds, and 3,932 nursing home beds. The County has 4,276 physicians with specialists in all types of medicine and medical resources and 819 dentists.
There is no shortage of quality healthcare and resources in the Tampa Bay area. The region has an exceptionally strong network for hospitals, many of which are ranked on "America's Best Hospitals" list by U.S. News and World Report.
• Tampa General Hospital, a 1,011-bed facility, was named one of the nation’s top 50 hospitals for 2014-15 in four specialties: cardiology & heart surgery, nephrology, orthopedics, and urology. It is the only Level 1 Trauma Center in west central Florida and also offers comprehensive burn care and adult solid-organ transplants.
• Moffitt Cancer Center is the only Florida-based cancer center with the National Cancer Institute’s designation of a Comprehensive Cancer Center for its excellence in research and contributions to clinical trials, prevention, and cancer control. Moffitt is ranked as one of the top 20 cancer treatment facilities in the nation.
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• USF Health includes the USF's colleges of medicine, nursing and public health; the schools of biomedical sciences as well as physical therapy and rehabilitation sciences; and the multispecialty USF physicians group. In December 2015, the Morsani College of Medicine and USF Health Heart Institute broke ground at the new downtown Tampa location.
• St. Joseph's Hospital has marked more than 75 years of service to the community and encompasses a children's hospital, women's hospital and heart and cancer institutes.
• Johns Hopkins All Children's Hospital is a Pediatric hospital located in St. Petersburg, Florida. Named a top 50 children's hospital by U.S. News & World Report, Johns Hopkins All Children’s Hospital in St. Petersburg provides world-class care in more than 43 pediatric medical and surgical subspecialties and serves as a major regional referral center for the entire central west coast of Florida.
• James A. Haley Veterans' Hospital serves 116,000 military veterans in the area and is the busiest of four polytrauma facilities in the nation.
• Florida Hospital Tampa is the only Outpatient Therapy Center in Tampa Bay offering both Lee Silverman Voice Treatment (LSVT) for speech communication (LSVT LOUD) and physical/occupational therapy (LSVT BIG) programs.
Source: Florida Department of Health and Florida Agency for Health Care Administration; Greater Tampa Chamber of Commerce, www.tampachamber.com Florida Department of Health, Division of Medical Quality Assurance Florida Agency for Health Care Administration
Tourism
Nationally recognized Busch Gardens is one of the largest tourist attractions in Florida and TIA makes it an ideal stopover for tourists enroute to Central Florida attractions in the area, which includes Disney World, Sea World and Universal Studios.
The Tampa Bay Convention & Visitors Bureau reports that there are more than 2,000 hotel/motel rooms in Hillsborough County.
In 2012, the City hosted the Republican National Convention which drew approximately 50,000 visitors.
Tampa hosted the 15th International Indian Film Academy ("IIFA") Awards in April 2014. Tampa was the first American city to host the IIFA Awards which drew approximately 30,000 visitors and $19.9 million in direct spending and $26.4 million in total spending. The four-day event commenced in Curtis Hixon Park and ended with the awards at Raymond James Stadium.
Source: Tampa/Hillsborough Convention and Visitors Association Visit Tampa Bay per the Tampa Bay Business Journal
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EXCEPT WHERE OTHERWISE SPECIFICALLY NOTED, THE FOLLOWING ECONOMIC DATA IS PRESENTED FOR THE ENTIRE COUNTY. THIS INFORMATION IS NOT AVAILABLE FOR THE CITY ONLY.
The following table sets forth the average "civilian" (i.e., "non-military") labor force, the average number of individuals employed and related unemployment statistics for Hillsborough County.*
Hillsborough County Florida National Calendar Labor Number Number Unemployment Unemployment Unemployment Year Force Employed Unemployed Rate Rate Rate 2005 570,252 548,804 21,448 3.8% 3.7% 5.1% 2006 585,548 566,146 19,402 3.3 3.2 4.6 2007 595,244 570,539 24,705 4.2 4.0 4.6 2008 599,256 560,054 39,202 6.5 6.3 5.8 2009 596,872 533,687 63,185 10.6 10.4 9.3 2010 645,687 576,400 69,287 10.7 11.1 9.6 2011 661,540 598,119 63,421 9.6 10.0 8.9 2012 668,882 615,828 53,054 7.9 8.5 8.1 2013 673,787 629,112 44,675 6.6 7.3 7.4 2014 684,680 644,900 39,780 5.8 6.3 6.2 2015 689,463 655,324 34,139 5.0 5.4 5.3
*The Local Area Unemployment Statistics Program of the Bureau of Labor Statistics revised the historical data back to 1990 and introduced a new methodology only back to 2010. Table was updated to reflect all related changes.
Hillsborough County, Florida Principal Taxpayers (Amount in Thousands)
Percentage of Taxpayer Type of Business Taxes Levied Total Taxes Levied Tampa Electric Company Electric Utility $41,735 2.57% Verizon Communications Inc. Telecommunications 15,383 1.10 Hillsborough County Aviation Authority Airport 10,967 0.71 Camden Operating LP Real Estate 5,379 0.37 Post Apartment Homes LP Real Estate 5,227 0.34 Westfield Shopping Malls 4,917 0.33 Liberty Property Property Management 4,308 0.31 Metropolitan Life Insurance Company Insurance 4,300 0.31 Highwoods/Florida Holding LP Real Estate Management 4,281 0.28 Mosaic Company Mining/Fertilizer Minerals 3,948 0.25 $100,445 6.57%
*Data presented for Hillsborough County as of 2014. Source: Hillsborough County Tax Collector.
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Hillsborough County, Florida Principal Employers
Percentage of Total County Employer Type of Operation Employees Employment Hillsborough County School Board Public Education 25,915 3.79% MacDill Air Force Base Military Base 18,853 2.75 Hillsborough County Government Government 9,846 1.44 University of South Florida Education Services 8,968 1.31 Tampa General Hospital Medical Facilities 7,819 1.14 Publix Super Markets, Inc. Supermarkets 6,969 1.02 St. Joseph's Hospital Medical Facilities 5,869 0.86 HCA West Florida Medical Facilities 4,171 0.61 City of Tampa Government 4,052 0.59 U.S. Postal Service Government 3,154 0.46 95,616 13.97%
Source: Hillsborough County City-County Planning Commission.
PENSION PLANS
General Employees Pension Fund
The City contributes to the City of Tampa General Employees Pension Fund (the "General Employee Fund"), a single employer, defined benefit plan covering virtually all full-time City employees (other than full-time firefighters and police officers) and former employees of the City, whose current governmental employers make contributions for those employees. The General Employee Fund is administered by an independent board of trustees and is accounted for as a separate pension trust fund.
The General Employee Fund was amended in 1981 to provide social security coverage for all future employees of the City. The General Employee Fund was divided into partial City pension with social security and full City pension with no social security. All employees hired on or after October 1, 1981 are automatically covered by social security and partial City pension.
Benefit eligibility requirements and benefit provisions are as follows: for employees hired before October 1, 1981 who contribute to the General Employee Fund, vesting occurs at 6 or more years of service and benefits are distributed at age 55. Monthly benefit amounts are equal to 2.0% of the average monthly salary multiplied by years of service, plus an additional 0.5% of the average monthly salary for each additional year of service for employment after 15 years served on or after January 1, 1975, until the maximum of 30 years.
For employees hired, or elected on or after October 1, 1981 who contribute to social security, vesting occurs with six (6) or more years of service and benefits are distributed at age 62. Benefit amounts are calculated based on the highest three (3) years of salary within the last six (6) years of employment. The monthly pension is equal to 1.2% of the employee's average monthly compensation
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times years of service. Early retirement is permitted for those hired on or after October 1, 1981, who have at least six (6) years of service, and have reached age 55. The accrued normal benefit is reduced 5/12% for each month by which the early retirement precedes normal retirement. Pre-and post-retirement death benefits are also provided. Members with six (6) or more years of credited service who have reached age 55 are eligible to participate in the Deferred Retirement Option Program ("DROP") for up to seven (7) years. During the DROP period, the member makes no further contribution to the fund and accrues a benefit amount equal to what would have been the member's retirement benefit had the member retired as of the date of entry into the DROP program. A DROP participant shall have the opportunity to elect an investment option to be applied to such DROP participant’s account for the plan year when entering the DROP and for each subsequent plan year. In such election, the DROP participant shall choose to have interest accumulate annually, whether positive or negative, at either (i) a rate reflecting the General Employee Fund’s investment performance, as determined by the board of trustees, or (ii) a rate reflective of a low-risk variable rate selected annually by the board of trustees in its sole discretion. This accumulated amount is paid in a lump sum when the member leaves active service at the end of the DROP period. Both DROP benefits and post-retirement benefits receive cost of living adjustments annually; employees hired before October 1, 1981 receive 2.2% and employees hired on or after October 1, 1981 receive 1.2%.
Firefighters and Police Officers Pension Fund
The City contributes to the City of Tampa Firefighters and Police Officers Pension Fund (the "Firefighters and Police Fund"), a single employer, defined benefit plan covering substantially all full- time firefighters and police officers. The Firefighters and Police Fund is administered by an independent board of trustees and is accounted for by the City as a separate pension trust fund.
Benefit eligibility requirements and benefit provisions are as follows: vesting for participants in the Firefighters and Police Fund occurs at 10 years of service, and participants may begin drawing monthly pension benefits at the earlier of attaining age 46 with 10 or more years of service or 20 years of service, regardless of age. The annual pension benefit is 3.15% for each year of service times the employees final average compensation (highest three of the last six years of service), but not less than $100 per month. The Firefighters and Police Fund provides both service and non-service related disability and preretirement death benefits. Effective October 1, 2004, the annual pension benefit was increased from 2.5% to 3.15% for each year of service times the employees final average compensation (highest three of the last six years of service), but not less than $100 per month. The increased benefit is applicable only to plan members actively employed as firefighters or police officers on or after October 1, 2003.
Members with at least 20 years of credited service are eligible to participate in DROP for up to five (5) years. Members entering DROP after 25 years of service are eligible to participate in the DROP for a combined total of 30 years of credited service. During the DROP period, the member accrues a benefit amount equal to what would have been the member's longevity retirement benefit had the member retired as of the date of entry into the DROP program adjusted for net investment returns on fund assets. A DROP participant shall have the opportunity to elect an investment option to be applied to such DROP participant’s account for the plan year when entering the DROP and for each subsequent plan year. In such election, the DROP participant shall choose to have interest accumulate annually, whether positive or negative, at either (i) a rate reflecting the Firefighters and Police Fund’s investment performance, as determined by the board of trustees, or (ii) a rate reflective of a low-risk variable rate selected annually by the board of trustees in its sole discretion. This accumulated amount less the portion
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attributable to the employee's after tax pension contributions may be either rolled over to a tax- qualified vehicle, paid in a lump sum, or some combination of the two (2) based upon the member's request when the member leaves active service at the end of the DROP period.
All eligible retired members and surviving spouses receive a 13th check program benefit payment. The 13th check program benefit, if any, is actuarially determined and is an equal dollar amount for all eligible retirees. One half of that amount is the benefit to eligible surviving spouses. The 13th check benefit was funded by employee contributions from the 13th check benefit's inception in October 1998 through September 30, 2001. Employee contributions to the 13th check benefit ceased September 30, 2001, and the 13th check benefit was then funded by a portion of the investment return in excess of the actuarially assumed rate of return of the fund.
Members terminating employment who are not eligible to retire are entitled to a refund of contributions they made to the Firefighters and Police Fund without interest. Postretirement benefit increases are based on the net change in the average cost of living index with a maximum determined by the actuary and a minimum not below the original benefit for the Firefighters and Police Fund. These benefits are paid from a postretirement adjustment account which had market value of assets of $765,491,752 as of October 1, 2015.
Membership data as of the most recent actuarial valuations for the General Employee Fund and the Firefighters and Police Fund are summarized as follows:
General Employees Firefighters and Police Fund as of Fund as of January 1, 2016(1) October 1, 2015(2) Retirees and beneficiaries receiving benefits 2,329 2,060 Inactive plan members entitled to benefits but not receiving them 558 23 Active plan members 2,168 1,360
(1) The figures presented are from the General Employee’s Actuarial Report, as of January 1, 2016. (2) The figures presented are from the Firefighters and Police Actuarial Report, as of October 1, 2015.
Significant Accounting Policies
Financial information for the two pension funds is prepared using the accrual basis of accounting. Employer and plan member contributions are recognized in the period that contributions are due. Separate audited financial statements are issued for the Firefighters and Police Fund pension plan. Copies of that report may be obtained from the City's accounting department offices at 306 East Jackson Street, Tampa, Florida. No separate audited financial statement is issued for the General Employees Fund.
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Statements of Net Position and Changes in Net Position for the General Employees Fund and Firefighters and Police Officers Fund as of September 30, 2015 are presented below (in thousands).
Statement of Pension Net Position Firefighters and General Police Officers ASSETS Employees Fund Fund Cash and Investments $633,461 $ 1,736,501 Accounts receivable 780 6,598 Interest and dividends receivable 1,248 1,753 Prepaid Costs 11 Capital Assets including Depreciation 531 Total assets 635,489 1,745,394
LIABILITIES Accounts payable 1,682 17,865 Unearned Revenue 3,570 - Total liabilities 5,252 17,865
NET POSITION Held in trust for pension benefits $630,237 $ 1,727,529
Statement of Changes in Pension Net Position ADDITIONS Contributions: Employer $17,243 $17,077 Employees 69 14,044 State 6,485 Total contributions 17,312 37,606
Investment earnings: Interest and dividends 8,796 41,183 Net (decrease) in the fair value of investments (19,335) (128,537) Total investment (loss) (10,539) (87,354) Less investment expense (3,235) (4,838) Net investment (loss) (13,774) (92,192) Total additions/(subtractions) $3,538 ($54,586)
DEDUCTIONS Pension benefits $48,192 $125,717 Administrative expenses 285 1,646 Total deductions 48,477 127,363 Change in net position (44,939) (181,949) Net position - beginning 675,176 1,909,478 Net position - ending $630,237 $1,727,529
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Investments in the two plan funds are reported at fair value according to the independent custodian for each plan and the independent money managers of the assets in each plan using various third party pricing sources. Short-term investments are reported at fair value.
Contribution Requirements and Contributions Made
City policy and Florida Statutes govern the City and employee contribution requirements for both funds. The City's contribution to the General Employee Fund is an actuarially determined periodic amount that changes gradually over time so that sufficient assets will be available to pay benefits when due. The employees' contribution rate for this fund is currently 7% of gross pay for employees hired before October 1, 1981 and no contribution for employees hired on or after October 1, 1981. The City's contribution to the Firefighters and Police Fund is an actuarially determined periodic amount that is a minimum of 134% of a portion of the employee contribution. The employees' contribution to the fund uses a progressive scale (full scale contribution rate) that ranges from 4% to 25% of earnings, which may be discounted by the actuary. Members who have entered the DROP program for either fund do not make contributions during their DROP participation period. The State makes contributions from taxes on casualty insurance premiums. The State's contribution to the Firefighters and Police Fund for the year ended September 30, 2015 was $6,484,726. The City recognized these on-behalf payments from the State as revenues and expenditures in the governmental fund financial statements.
As reflected in the Notes to the Financial Statements of the City’s Comprehensive Annual Financial Reports, in fiscal years 2014 and 2015 the City implemented two major Governmental Accounting Standards Board ("GASB") Statements, No. 67, Financial Reporting for Pension Plans, an amendment of GASB Statement No. 25, and No. 50, Pension Disclosures. GASB No. 68, Accounting and Financial Reporting for Pensions replaced the prior pension related reporting standards, GASB No. 27, Accounting for Pensions by State and Local Governmental Employees. As a result, the disclosures and measurement focuses have changed significantly. For example, the Annual Required Contribution (ARC) or Net Pension Obligation (NPO) terms have been replaced with the new terms Actuarially Determined Contribution and Net Pension Liability, which have different meanings.
The presentation below for fiscal years 2012, 2013 and 2014 is based on prior disclosure and measurement focuses.
Annual pension cost and contribution information for the last three fiscal years are as follows (in thousands):
General Employee Fund Annual Pension Cost
Year Ended Annual Pension Percentage of APC Net Pension September 30 Cost (APC) Contributed Obligation 2014 $26,288 93.6% $1,623 2013 23,584 96.6 888 2012 22,362 95.2 53
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Firefighters and Police Pension Fund Annual Pension Cost
Year Ended Annual Pension Cost (APC) Percentage of APC Net Pension September 30 City State Contributed Obligation 2014 $17,180 $6,392 100% $0 2013 18,159 6,192 100 0 2012 15,286 6,084 100 0
For fiscal year ended September 30, 2015, GASB No. 67 and No. 68 went into full effect, and have significantly impacted the reporting standards for pension plans and employer financial reporting. The more significant changes are as follows:
• Net Pension Liability calculations changed from reporting net pension obligation (which compares cumulative pension liability and cumulative contributions made) to Net Pension Liability which represents the difference between total pension liability and the Plan’s fiduciary net position (assets valued at the fair market value).
• Annual pension expense is now based on a comprehensive measurement of the annual cost of pension benefits and will no longer be a simple function of annual funding amounts. The Annually Determined Contribution is not equal to expense.
The following tables are based on GASB No. 67 and No. 68 (the information for fiscal years 2013 and 2014 have been restated as if GASB No. 67 and No. 68 had then been in effect).
General Employees Pension Fund (in thousands)
Actuarially Actual EC as Determined Employer Contribution EC as Contributions Required a % Fiscal Contribution Contribution Deficiency % of Covered as a % of Contributions of Year (ADC) (EC) (Excess) ADC Payroll Payroll (ARC) (1) ARC 2015 $17,243 $18,981 ($1,738) 110.0% $127,098 14.93% $17,243 110% 2014 $26,270 $24,615 $ 1,655 93.7% $126,719 19.42% $22,680 108% 2013 $23,584 $22,780 $ 804 96.6% $134,967 16.88% $22,780(2) 100%
(1) The City used the percentage method for funding purposes; therefore, ARC differs from the ADC based on actual pensionable wages during the year. (2) For fiscal year 2013, the ARC was made on a quarterly basis. Effective fiscal year 2014, the ARC is made as a lump sum payment on October 1st of each year. Source: City of Tampa, Florida Comprehensive Annual Financial Report for Fiscal Years Ended September 30, 2015, 2014 and 2013; General Employees Actuarial Reports as of January 1, 2016, 2015 and 2014.
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Firefighters and Police Officers Pension Fund (in thousands)
Actuarially Actual EC Determined Employer Contribution EC as Contributions Required as a Fiscal Contribution Contribution Deficiency % of Covered as a % of Contributions % of Year (ADC) (EC) (Excess) ADC Payroll Payroll (ARC) ARC 2015 $17,077 $17,077 $ - 100% $98,498 17.34% $17,077 100% 2014 $17,180 $17,180 $ - 100% $98,670 17.41% $17,180 100% 2013 $17,404 $17,404 $ - 100% $96,208 18.09% $17,180 100%
Source: City of Tampa, Florida Firefighters and Police Officers Pension Fund Financial Statements for Fiscal Years Ended, September 30, 2015, 2014 and 2013.
The Firefighters and Police Officers Pension Fund has consistently used the percentage method for contributions and continues to make these contributions quarterly.
The reporting and measurement focus changed significantly in fiscal years 2014 and 2015 for local governments as a result of GASB No. 67 and No. 68. In the past, the actuarially determined value of assets, accrued liability and other ratios were reported in the format below. The City has maintained this reporting for the five years shown below to provide continuity and context. However, given the changes in the required methodologies for actuarial valuations, the City will be discontinuing this presentation format in the future and will begin to use the presentation format consistent with GASB No. 67 and No. 68.
The General Employee Pension Fund has an actuarially accrued liability in excess of assets, which amount is being amortized as a level percentage of payroll over the remaining future service of plan participants. The Firefighters and Police Fund has an unfunded actuarially accrued liability that is being amortized as a level percent amount over a closed period.
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General Employee Pension Fund Liability (in thousands)
(Unfunded) or Assets in Excess of Actuarial (Unfunded) or AAL as a Actuarial Accrued Assets in Percentage Actuarial Value of Liability Excess of Funded Covered of Covered Valuation Assets (AAL) - Entry Age AAL Ratio Payroll Payroll Date (a) (b) (a-b) (a/b) (c) ((a-b)/c) 1/1/2010 $564,143 $574,103 ($9,960) 98.3% $149,968 (6.6%) 1/1/2011 567,255 574,793 (7,538) 98.7 136,289 (5.5) 1/1/2012 554,594 561,569 (6,975) 98.8 134,754 (5.2) 1/1/2013 545,524 551,758 (6,234) 98.9 134,967 (4.6) 1/1/2014 615,231 618,464 (3,233) 99.5 126,719 (2.6)
Source: City of Tampa, Florida Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2015, General Employees’ Actuarial Report as of January 1, 2014.
Firefighters and Police Pension Fund Liability (in thousands)
(Unfunded) or Assets in (Unfunded) Excess of Actuarial or AAL as a Actuarial Accrued Assets in Percentage Actuarial Value of Liability Excess of Funded Covered of Covered Valuation Assets (AAL) - Entry Age AAL Ratio Payroll Payroll Date (a) (b) (a-b) (a/b) (c) ((a-b)/c) 10/1/2009 $622,645 $751,787 ($129,142) 82.8% $95,114 (135.8%) 10/1/2010 719,908 786,528 (66,620) 91.5 88,544 (75.2) 10/1/2011 740,168 824,227 (84,059) 89.8 90,739 (92.6) 10/1/2012 919,394 993,832 (74,438) 92.5 96,208 (77.4) 10/1/2013 964,408 1,028,863 (64,455) 93.7 94,875 (67.9)
Source: City of Tampa, Florida Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2014, Firefighters and Police Actuarial Report as of October 1, 2013.
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Funded Status
A traditional measure of the Funded Status (the method required under GASB No. 67 and No. 68) uses the Entry Age Normal Accrued Liability. This accrued liability equals the Present Value of Benefits less the Present Value of Future Entry Age Normal Costs. This accrued liability is independent of the actual plan assets and therefore may be a more reasonable "mile post" of how funded the plan should be. It recognizes future compensation increases and is a measure of where the level of assets should be to date if all participants are proportionately funded over their individual careers as a level percentage of each participant’s compensation. The table below shows the funded status comparing the Entry Age Normal Accrued Liability to both the Market Value and Actuarial Value of Assets:
General Employees Pension Fund
1/1/2016 1/1/2015 Entry Age Normal Accrued Liability $740,288,368 $696,491,313 Market Value of Assets $657,493,326 $692,569,000 Funded Ratio 88.8% 99.4% Actuarial Value of Assets $680,354,293 $666,962,000 Funded Ratio 91.9% 95.8%
Source: General Employees’ Actuarial Report as of January 1, 2016.
Firefighters and Police Officers Pension Fund (Base Plan Only)
10/1/2015 10/1/2014 Entry Age Normal Accrued Liability $1,169,572,192 $1,074,419,281 Market Value of Assets-Base Plan $961,999,944 $992,031,914 Funded Ratio 82.3% 92.3% Actuarial Value of Assets $1,082,056,353 $1,008,559,574 Funded Ratio 92.5% 93.9%
Source: Firefighters and Police Actuarial Report as of October 1, 2015.
Another measure of the Funded Status of a defined benefit plan is the level of funding of the Accumulated Plan Benefits and Vested Benefits. Accumulated Plan Benefits are those future benefit payments that are attributable to employees' service rendered prior to the valuation date based on employees' actual pay histories (or estimates thereof). This measurement of benefits does not take into account the effect of potential future salary increases. Vested Benefits are those benefits which become non-forfeitable after 6 years of service or which are attributable to employee contributions.
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General Employees Pension Fund
1/1/2016 1/1/2015 Actuarial Value of Assets $680,354,293 $650,841,000 Actuarial Present Value of Accumulated Plan Benefits $679,907,478 $624,110,227 Total Vested Benefits Percent Funded 100.1% 104.3% Total Actuarial Present Value of Accumulated Plan $683,502,274 $628,804,931 Benefits Percent Funded 99.5% 103.5%
Source: General Employees’ Actuarial Report as of January 1, 2016.
Firefighters and Police Officers Pension Fund (Base Plan Only)
10/1/2015 10/1/2014 Actuarial Value of Assets $1,082,056,353 $1,008,559,574 Actuarial Present Value of Accumulated Plan Benefits $1,099,741,495 $1,010,803,914 Total Vested Benefits Percent Funded 98.4% 99.8%
Source: Firefighters and Police Actuarial Report as of October 1, 2015.
Firefighters and Police Officers Pension Fund (Base Plan Only)
10/1/2015 10/1/2014 Market Value of Assets $961,999,944 $992,031,914 Total Actuarial Present Value of Accumulated Plan $1,099,741,495 $1,010,803,914 Benefits Percent Funded 87.5% 98.1%
Source: Firefighters and Police Actuarial Report as of October 1, 2015.
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Actuarial Methods and Significant Assumptions
General Employees Fund Firefighters and Police Fund Valuation date January 1, 2016 October 1, 2015 Actuarial cost method Entry age, normal with frozen initial Entry age, normal liability Amortization method Percentage Level percent, closed Remaining amortization 30 years assumptions and methods, period 15 years for actuarial gains and losses Asset valuation method Weighted five-year asset smoothing Actuarial value Actuarial assumptions: Investment rate of return 8.0% 8.5% Projected salary increases* 4.5% 12% to 5% for Firefighters 9% to 4% for Police Officers *Includes inflation at 2.5% 3% Cost of living adjustments 2.2% for employees hired before October 1, None 1981, and 1.2% for employees hired on or after October 1, 1981
EMPLOYEE RELATIONS
The City currently maintains 4,370.10 full-time equivalent allocated positions. Under the Constitution of the State, employees have the right to join together for the purposes of collective bargaining, however strikes by municipal employees, under any conditions, are prohibited by the Florida Constitution.
Currently, the City has four (4) active collective bargaining agreements which are set to expire on September 30, 2016. The total collective bargaining membership is 3,539.98 or 80.8% of the full-time equivalent allocated positions. The City is in the beginning stages of negotiating new collective bargaining agreements. Whether or not there will be an increase in labor expenses above that which has been budgeted is not known at this time. Should labor expenses exceed budget projections as a result of these negotiations, the City would either identify new funding sources or decrease costs associated with existing operating expenses, accordingly.
OTHER POST-EMPLOYMENT BENEFIT PLAN
The City follows GASB No. 45, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other Than Pensions, to account for certain post-employment health care benefits provided by the City. A separate audited GAAP-basis post-employment benefit plan report is not prepared for this defined benefit plan.
Plan Description
The Post-Employment Health Care Benefits Plan is a single-employer defined benefit plan administered by the City. Pursuant to the provisions of Section 112.0801, Florida Statutes, former employees and eligible dependents who retire from the City may continue to participate in the City's fully insured health and hospitalization plan for medical and prescription drug coverages. These retirees
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are completely responsible for payment of their insurance premiums and the City does not contribute toward this payment. However, the City subsidizes the premium rates paid by retirees by allowing them to participate in the plans at blended group (implicitly subsidized) premium rates for both active and retired employees. These rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the plan on average than those of active employees. Medicare eligible retirees are required to enroll in the Federal Medicare program for their primary coverage as soon as they are eligible.
Funding Policy
For the Post-Employment Health Care Benefits Plan, contribution requirements of the City are established and may be amended through recommendations of the City's Insurance Committee. The City has not advance-funded or established a funding methodology for the annual Other Post-Employment Benefit ("OPEB") costs or the net OPEB obligation. As of September 30, 2015, there were 547 retirees and 183 eligible dependents receiving post-employment health care benefits. For the fiscal year ended September 30, 2015, the City provided required contributions of $3,755,157 toward annual OPEB costs, comprised of benefit payments made on behalf of retirees for claims expenses, retention costs, and net of retiree contributions totaling $5,514,419. Required contributions are based on projected pay-as- you-go financing.
Annual OPEB Cost and Net OPEB Obligation
The following table shows the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation for the fiscal year ended September 30, 2015 (in thousands):
Annual required contribution $6,551 Interest on net OPEB obligation 1,024 Amortization of net OPEB obligation (914) Annual OPEB cost 6,661 Contributions made (3,755) Change in net OPEB obligation 2,906 Net OPEB obligation, beginning of year 25,600 Net OPEB obligation, end of year $28,506
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The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation as of September 30, 2015 was as follows (in thousands):
Percentage of Year Ended Annual Annual OPEB Net OPEB September 30 OPEB Cost Contribution Cost Contributed Obligation 2010 $5,240 $2,554 49% $14,550 2011 5,402 2,781 52 17,170 2012 5,289 2,360 45 20,099 2013 5,630 3,251 58 22,478 2014 6,261 3,139 50 25,600 2015 6,661 3,755 56 28,505
Source: City of Tampa, Florida Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2015, Other Post-Employment Benefit Actuarial Report, as of September 30, 2015.
Funded Status and Funding Progress
As of September 30, 2015, the actuarial accrued liability for benefits was $68,945,002, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability of $68,945,002. The covered payroll (annual payroll for active participating employees) was $280,430,730 for the fiscal year ended September 30, 2015, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 24.6%. This schedule presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing relative to the actuarial accrued liability for benefits over time.
The following table illustrates the funding progress history (in thousands):
OPEB Liability
Unfunded Unfunded Actuarial Actuarial Actuarial Actuarial as a Percent Valuation Value of Accrued Accrued Funded Covered of Covered Date Assets Liability Liability Ratio Payroll Payroll 9/30/2010 $0 $54,850 $54,850 0.0% $285,000 19.2% 9/30/2011 0 52,032 52,032 0.0 274,543 19.0 9/30/2012 0 52,239 52,239 0.0 272,941 19.1 9/30/2013 0 55,483 55,483 0.0 266,903 20.8 9/30/2014 0 66,668 66,668 0.0 273,059 24.4 9/30/2015 0 68,945 68,945 0.0 280,431 24.6
Source: Other Post-Employment Benefit Actuarial Report, as of September 30, 2015.
Actuarial Methods and Assumptions
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment and termination, mortality, and the healthcare cost trends.
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Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Projections of benefits for financial reporting purposes are based on the substantive plan provisions, as understood by the employer and participating members, and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and participating members. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
For the fiscal year ended September 30, 2015, the City's OPEB actuarial valuation used the entry age normal cost actuarial method to estimate the unfunded actuarial liability and to determine the annual required contribution. Because the OPEB liability is currently unfunded, the actuarial assumptions included a 4.0% rate of return on invested assets, which is the City's long-term expectation of investment returns under its investment policy. The actuarial assumptions also included a general inflation rate of 2.5% per year, and an annual healthcare cost trend rate of 8.0% for the fiscal year ended September 30, 2015, grading down to an ultimate rate of 5.0% for the fiscal year ending September 30, 2025. The unfunded actuarial accrued liability and gains/losses are being amortized as a level percentage of projected payroll on a closed basis over 30 years.
FLORIDA CONSTITUTIONAL LIMITATIONS AND PROPERTY TAX REFORM
Several constitutional and legislative amendments affecting ad valorem taxes have been approved by voters in the past including the following:
Save Our Homes Amendment. By voter referendum held on November 3, 1992, Article VII, Section 4 of the State Constitution was amended by adding thereto a subsection which, in effect, limits the increases in assessed just value of homestead property to the lesser of (1) three percent of the assessment for the prior year or (2) the percentage change in the Consumer Price Index for all urban consumers, U.S. City Average, all items 1967=100, or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics. Further, the amendment provides that (1) no assessment shall exceed just value, (2) after any change of ownership of homestead property or upon termination of homestead status such property shall be reassessed at just value as of January 1 of the year following the year of sale or change of status, (3) new homestead property shall be assessed at just value as of January 1 of the year following the establishment of the homestead, and (4) changes, additions, reductions or improvements to homestead shall initially be assessed as provided for by general law, and thereafter as provided in the amendment. This amendment is known as the "Save Our Homes Amendment." The effective date of the amendment was January 5, 1993 and, pursuant to a ruling by the Florida Supreme Court, it began to affect homestead property valuations commencing January 1, 1995, with 1994 assessed values being the base year for determining compliance.
Limitations on State Revenue Amendment. In the 1994 general election, State voters approved an amendment to the State Constitution which is commonly referred to as the "Limitation On State Revenues Amendment." This amendment provides that state revenues collected for any fiscal year shall be limited to state revenues allowed under the amendment for the prior fiscal year plus an adjustment for growth. Growth is defined as an amount equal to the average annual rate of growth in State personal income over the most recent twenty quarters times the State revenues allowed under the amendment for the prior fiscal year. State revenues collected for any fiscal year in excess of this limitation are required to be
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transferred to a budget stabilization fund until the fund reaches the maximum balance specified in the amendment to the State Constitution, and thereafter is required to be refunded to taxpayers as provided by general law. The limitation on state revenues imposed by the amendment may be increased by the State Legislature, by a two-thirds vote in each house.
The term "state revenues," as used in the amendment, means taxes, fees, licenses, and charges for services imposed by the State Legislature on individuals, businesses, or agencies outside state government. However, the term "state revenues" does not include: (1) revenues that are necessary to meet the requirements set forth in documents authorizing the issuance of bonds by the State; (2) revenues that are used to provide matching funds for the federal Medicaid program with the exception of the revenues used to support the Public Medical Assistance Trust Fund or its successor program and with the exception of State matching funds used to fund elective expansions made after July 1, 1994; (3) proceeds from the State lottery returned as prizes; (4) receipts of the Florida Hurricane Catastrophe Fund; (5) balances carried forward from prior fiscal years; (6) taxes, licenses, fees and charges for services imposed by local, regional, or school district governing bodies, or (7) revenue from taxes, licenses, fees and charges for services required to be imposed by any amendment or revision to the Florida Constitution after July 1, 1994. This amendment took effect on January 1, 1995, and was first applicable to the State's fiscal year 1995-1996.
Millage Rollback Legislation. In 2007, the Florida Legislature adopted Chapter 2007-321, Laws of Florida, a property tax plan which significantly impacted ad valorem tax collections for Florida local governments. One component of the adopted legislation required counties, cities and special districts to rollback their millage rates for the 2007-2008 fiscal year to a level that, with certain adjustments and exceptions, would generate the same level of ad valorem tax revenue as in fiscal year 2006-2007; provided, however, depending upon the relative growth of each local government's own ad valorem tax revenues from 2001 to 2006, such rolled back millage rates were determined after first reducing 2006-2007 ad valorem tax revenues by zero to nine percent (0% to 9%). In addition, the legislation limited how much the aggregate amount of ad valorem tax revenues may increase in future fiscal years. A local government may override certain portions of these requirements by a supermajority, and for certain requirements, a unanimous vote of its governing body.
The City fell under the 5% ad valorem tax revenue reduction category. As a result, for the fiscal year ended September 30, 2015, the City imposed ad valorem taxes at the millage rate of 5.7326 mills per thousand (down from 6.408 mills per thousand in fiscal year 2006).
Constitutional Amendments Related to Ad Valorem Exemptions. On January 29, 2008, in a special election held in conjunction with the State's presidential primary, the requisite number of voters approved amendments to the Florida Constitution exempting certain portions of a property's assessed value from taxation. These amendments were effective for the 2008 tax year (fiscal year 2008-2009 for local governments). The following is a brief summary of certain important provisions contained in such amendments:
1. Provides for an additional exemption for the assessed value of homestead property between $50,000 and $75,000, thus doubling the existing homestead exemption for property with an assessed value equal to or greater than $75,000.
2. Permits owners of homestead property to transfer their Save Our Homes Amendment benefit (up to $500,000) to a new homestead property purchased within two years of the sale of their
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previous homestead property to which such benefit applied if the just value of the new homestead is greater than or is equal to the just value of the prior homestead. If the just value of the new homestead is less than the just value of the prior homestead, then owners of homestead property may transfer a proportional amount of their Save Our Homes Amendment benefit, such proportional amount equaling the just value of the new homestead divided by the just value of the prior homestead multiplied by the assessed value of the prior homestead. As discussed above, the Save Our Homes Amendment generally limits annual increases in ad valorem tax assessments for those properties with homestead exemptions to the lesser of three percent (3%) or the annual rate of inflation.
3. Exempts from ad valorem taxation $25,000 of the assessed value of property subject to tangible personal property tax.
4. Limits increases in the assessed value of non-homestead property to 10% per year, subject to certain adjustments. The cap on increases would be in effect for a 10-year period, subject to extension by an affirmative vote of electors.
Over the last few years, the Save Our Homes Amendment assessment cap and portability provisions described above have been subject to legal challenge. The plaintiffs in such cases have argued that the Save Our Homes Amendment assessment cap constitutes an unlawful residency requirement for tax benefits on substantially similar property in violation of the equal protection provisions of the Florida Constitution and the Privileges and Immunities Clause of the Fourteenth Amendment to the United States Constitution. The plaintiffs also argued that the portability provision simply extends the unconstitutionality of the tax shelters granted to long-term homeowners by the Save Our Homes Amendment. The courts in each case have rejected such constitutional arguments and upheld the constitutionality of such provisions; however, there is no assurance that any future challenges to such provisions will not be successful.
In addition to the legislative activity described above, the constitutionally mandated Florida Taxation and Budget Reform Commission (required to be convened every 20 years) (the "TBRC") completed its meetings on April 25, 2008 and placed several constitutional amendments on the November 4, 2008 General Election ballot. Three of such amendments were approved by the voters of Florida, which, among other things, do the following: (a) allow the Florida Legislature, by general law, to exempt from assessed value of residential homes, improvements made to protect property from wind damage and installation of a new renewable energy source device; (b) assess specified working waterfront properties based on current use rather than highest and best use; (c) provide a property tax exemption for (i) real property that is perpetually used for conservation (began in 2010), and (ii) land not perpetually encumbered, require the Florida Legislature to provide classification and assessment of land use for conservation purposes solely on the basis of character or use.
Exemption for Deployed Military Personnel. In the November 2010 General Election voters approved a constitutional amendment which provides an additional homestead exemption for deployed military personnel. The exemption equals the percentage of days during the prior calendar year that the military homeowner was deployed outside of the United States in support of military operations designated by the Legislature. This constitutional amendment took effect on January 1, 2011. In March of 2016, HB 7023 was approved by the Governor, which updated the military operations specified for eligibility under this exemption. The bill also extended the application deadline for qualifying service members.
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Other Proposals Affecting Ad Valorem Taxation. During the Florida Legislature's 2011 Regular Session, it passed Senate Joint Resolution 592 ("SJR 592"). SJR 592 allows totally or partially disabled veterans who were not Florida residents at the time of entering military service to qualify for the combat- related disabled veteran's ad valorem tax discount on homestead property. The amendment took effect on January 1, 2013.
During the Florida Legislature's 2012 Regular Session, it passed House Joint Resolution 93 ("HJR 93"). HJR 93 allows the Florida Legislature to provide ad valorem tax relief to the surviving spouse of a veteran who died from service-connected causes while on active duty as a member of the United States Armed Forces and to the surviving spouse of a first responder who died in the line of duty. The amount of tax relief, to be defined by general law, can equal the total amount or a portion of the ad valorem tax otherwise owed on the homestead property. The amendment took effect on January 1, 2013.
Also during the Florida Legislature's 2012 Regular Session, it passed House Joint Resolution 169 ("HJR 169") allowing the Florida Legislature by general law to permit counties and municipalities, by ordinance, to grant an additional homestead tax exemption equal to the assessed value of homestead property to certain low income seniors. To be eligible for the additional homestead exemption the county or municipality must have granted the exemption by ordinance; the property must have a just value of less than $250,000; the owner must have title to the property and maintained his or her permanent residence thereon for at least 25 years; the owner must be age 65 years or older; and the owner's annual household income must be less than $20,000. The additional homestead tax exemption authorized by HJR 169 would not apply to school property taxes. This bill was approved as an amendment to the Florida Constitution by the voters on November 6, 2012.
During the Florida Legislature's 2013 Regular Session, it passed Senate Bill 1830 ("SB 1830"), which was signed into law by the Governor and creates a number of changes affecting ad valorem taxation and which became effective July 1, 2013. First, SB 1830 provides long-term lessees the ability to retain their homestead exemption and related assessment limitations and exemptions in certain instances and extends the time for property owners to appeal value adjustment board decisions on transfers of assessment limitations to conform with general court filing timeframes. Second, SB 1830 inserts the term "algaculture" in the definition of "agricultural purpose" and inserts the terms "aquacultural crops" in the provision specifying the valuation of certain annual agricultural crops, nonbearing fruit trees and nursery stock. Third, SB 1830 allows for an automatic renewal for assessment reductions related to certain additions to homestead properties used as living quarters for a parent or grandparent and aligns related appeal and penalty provisions to those for other homestead exemptions. Fourth, SB 1830 deletes a statutory requirement that the owner of the property must reside upon the property to qualify for a homestead exemption. Fifth, SB 1830 clarifies the property tax exemptions counties and cities may provide for certain low income persons age 65 and older. Sixth, SB 1830 removes a residency requirement that a senior disabled veteran must have been a Florida resident at the time they entered the service to qualify for certain property tax exemptions. Seventh, SB 1830 repeals the ability for certain limited liability partnerships to qualify for the affordable housing property tax exemption. Eighth, SB 1830 exempts property used exclusively for educational purposes when the entities that own the property and the educational facility are owned by the same natural persons.
During the Florida Legislature's 2013 Regular Session, the Florida Legislature passed House Bill 277 ("HB 277"), which was signed into law by the Governor. HB 277 provides that certain renewable energy devices are exempt from being considered when calculating the assessed value of residential property. HB 277 only applies to devices installed on or after January 1, 2013. HB 277 took effect on
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July 1, 2013. The 2016 Florida Legislature passed Joint Resolution 193 (CS/HJR 193), which proposes an amendment to the Florida Constitution to authorize the Legislature, by general law, to exempt the assessed value of solar devices or renewable energy source devices subject to tangible personal property tax from ad valorem taxation, and to prohibit the consideration of the installation of a solar device or a renewable energy source device in determining the assessed value of real property for the purpose of ad valorem taxation, with a designated effective date of January 1, 2018 and an expiration date of December 31, 2037. This CS/HJR 193 is tied to House Bill CS/195, approved by the Governor on March 25, 2016, setting a special election to be held August 30, 2016, submitting to the electors of Florida for approval or rejection the amendment as proposed.
Also during the Florida Legislature's 2013 Regular Session, the Florida Legislature passed House Bill 1193 ("HB 1193"), which was signed into law by the Governor. HB 1193 eliminated three ways in which the property appraiser had authority to reclassify agricultural land as non-agricultural land. Additionally, HB 1193 relieves the value adjustment board of the authority to review the property appraisers. HB 1193 is effective immediately and will apply retroactively to January 1, 2013.
At present, the impact of SB 7830, HB 277 and HB 1193 on the City's finances cannot be accurately ascertained.
During the 2016 Regular Session, another Joint Resolution (CS/HJR 1009) passed, proposing an amendment to the Florida Constitution to grant a full or partial property tax exemption on homestead property to first responders who are totally and permanently disabled as a result of an injury or injuries sustained in the line of duty. If the amendment to the constitution is approved by 60% of the voters in the 2016 general election, the proposed effective date is January 1, 2017.
The 2016 Legislature further passed an amendment in Joint Resolution 275 (CS/HJR 275), clarifying the calculation for use in determining the just value for purposes of homestead tax exemption for certain senior, long-term, low-income residents. If approved by 60% of the voters in the 2016 general election, the proposed amendment will take effect on January 1, 2017, and operates retroactively to January 1, 2013, for persons who received the exemption prior to January 1, 2017. The CS/HJR 275 is tied to House Bill 277, approved by the Governor on March 25, 2016, which states essentially the same intent and purpose, and has the same effective date of CS/HJR 275.
Legislative Proposals Relating to Ad Valorem Taxation. During recent years, various other legislative proposals and constitutional amendments relating to ad valorem taxation and revenue limitation have been introduced in the State legislature. Many of these proposals provide for new or increased exemptions to ad valorem taxation, limit increases in assessed valuation of certain types of property or otherwise restrict the ability of local governments in the State to levy ad valorem taxes at recent, historical levels. There can be no assurance that similar or additional legislation or other proposals will not be introduced or enacted in the future that would, or might apply to, or have a material adverse effect upon, the City’s finances.
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APPENDIX B
General Purpose Financial Statements for Fiscal Year Ended September 30, 2015
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CITY OF TAMPA, FLORIDA Letter of Transmittal April 15, 2016
To the Honorable Mayor, Members of City Council, and Citizens of the City of Tampa:
It is our pleasure to submit this Comprehensive Annual Financial Report (CAFR) for the City of Tampa, Florida (the City) for the fiscal year ended September 30, 2015. The CAFR provides a comprehensive overview of the City’s financial position and the results of operations for the past fiscal year and fulfills the requirements set forth by State law, in accordance with the Florida Statutes Section 166.241 and Chapter 10.550 Rules of the Auditor General. These statutes require all general-purpose local governments to publish a complete set of financial statements, each fiscal year, presented in conformity with Generally Accepted Accounting Principles in the United States (GAAP) and audited in accordance with auditing standards generally accepted in the United States by a firm of licensed certified public accountants.
This CAFR consists of management’s representations concerning the finances of the City of Tampa and the City’s management assumes full responsibility for the completeness and reliability of all of the information presented in this report. The City’s management has established a comprehensive internal control framework that is designed both to protect the City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not exceed anticipated benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
An annual financial audit, performed by independent certified public accountants, is required by Florida Statutes. For Fiscal Year 2015, the independent audit was conducted by Crowe Horwath LLP. The goal of the audit was to provide reasonable assurance that the financial statements of the City of Tampa, for the fiscal year ended September 30, 2015, are free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The auditors expressed an opinion that the City’s financial statements for the fiscal year ended September 30, 2015 are fairly stated in conformity with accounting principles in the United States. This is the most favorable conclusion and is commonly known as an “unmodified” or clean opinion. The Independent Auditor’s Report is presented as the first component of the Financial Section of this report.
The independent audit of the City’s financial statements was part of a broader, federally mandated “Single Audit” designed to meet the special needs of Federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis related to and involving the administration of Federal Awards. The auditing firm, Moore Stephens Lovelace, PA, was contracted to perform the Single Audit of the City’s major grant
1 programs. This audit was designed to meet the requirements of the Single Audit Act of 1996 and related Office of Management and Budget (OMB) Circular A-133 Compliance Supplement 2015. This Supplement was updated with revised guidance procedures in 2015.
GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the Independent Auditor’s Report.
PROFILE OF THE CITY OF TAMPA
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The City of Tampa, initially incorporated in 1855 with a second incorporation in 1887, is the largest city in Hillsborough County, the county seat, and the third most populous city in Florida. It is located on the west coast of Florida, approximately 200 miles northwest of Miami, 180 miles southwest of Jacksonville, and 20 miles northeast of St. Petersburg. The City of Tampa currently occupies 113 square miles and serves a population of approximately 352,957. The City of Tampa is empowered to levy a property tax on real property located within its boundaries and is also empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the Tampa City Council.
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The City of Tampa has operated under a mayor-council form of government since 1945. The mayor is responsible for administering the policies and ordinances of City Council, for overseeing the day-to-day operations of the City, for preparing the annual budget and submitting to City Council for approval, and for nominating department heads for approval by the City Council. Legislative authority is vested in an elected city council consisting of seven (7) members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committee members, and approving department head nominees submitted by the mayor. The mayor and all seven city council members are elected every four (4) years with a term limit of two (2) terms. The mayor and three of the city council members are elected-at- large and four city council members are elected from individual districts within the City of Tampa.
The City of Tampa provides a full range of services, including police and fire protection; the construction of streets, and other public infrastructure; park and recreation facilities; convention accommodations; and water, wastewater, solid waste, and parking operations.
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The City of Tampa is financially responsible for the legally independent Tampa Historic Streetcar, Inc., which is reported separately in the city’s Basic Financial Statements. The City is also financially responsible for the Community Redevelopment Agency (CRA) whose operations are considered part of the City’s operations. More information on these entities can be found on page 259 in the Community Redevelopment Agency Section of the financial statements and in the Tampa Historic Streetcar, Inc. Section located in the appendix of this CAFR.
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The annual budget serves as the foundation for the City of Tampa’s financial planning and control. The City maintains budgetary controls that ensure compliance with legal provisions embodied in the annual appropriated budget submitted by the mayor and adopted by the City Council. All City departments are required to submit requests for appropriation to the mayor. The mayor uses these requests as the basis for developing the proposed budget and presents the proposed budget to City Council for review prior to August 15. The City Council is required to conduct two (2) public hearings for the proposed budget and to adopt a final budget no later than September 30, the close of the City’s fiscal year. The appropriated budget is prepared by fund and department. Department heads may make transfers within a department; however, re-appropriation of funds between capital and operating accounts, and between departments, requires the
2 approval of City Council according to the City Charter. Budget-and-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, utility services tax special revenue fund and the CRA special revenue fund, budget and actual comparisons are presented on pages 53–57 as part of the Basic Financial Statements for the governmental funds. For all other governmental funds with appropriated annual budgets, budget-and-actual comparisons are presented in the Combining and Individual Fund Statements section.
ECONOMIC CONDITION AND OUTLOOK
The information presented in the financial statements is perhaps best understood when it is considered from the specific environment within which the City of Tampa operates.
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The City of Tampa is a diverse city with a diverse economy comprised of a well-established and growing business community that represents retail industrial and emerging technologies. Major features of the economy include the Port of Tampa Bay, Tampa International Airport, the central business district, several professional sports teams, institutions of higher learning, museums and other cultural facilities. The Metropolitan Standard Statistical Area (MSA) economic indicators for Tampa-St. Petersburg-Clearwater are expected to show moderate growth over the next several years. Home sales have increased in the Tampa Bay Area and employment growth is expected to average 2.0% annually. Recent forecasts indicate that population growth for Tampa is expected to average 1.6%.
$LUDQG6HD7UDYHO The City of Tampa is home to two (2) major economic engines in transportation. Port Tampa Bay is the largest port in the State of Florida and currently serves as one of the nation’s most diversified ports, providing a $15 billion annual economic impact and over 80,000 jobs to the region. Port Tampa Bay is the eighth largest cruise port in the United States. Tampa International Airport (TIA) is one of the region’s most significant economic engines, with a total economic output of more than $7 billion. With annual passenger traffic totaling 18,815,425 in the year 2015, plans for expansion are slated to increase passenger traffic to a total of 35,000,000 in the near future.
(PSOR\HUVLQWKH7DPSD%D\$UHD The Tampa Bay Area (including Tampa, St. Petersburg and Clearwater) continues to be the home to a diverse set of industries and employers. The Tampa Bay area is home to large company headquarters such as Publix, Raymond James Financial, Jabil, TECO Energy, Sykes Enterprises and Tech Data.
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The City of Tampa is home to MacDill Air Force Base (AFB), which is a full service support facility for air fueling operations for all aircrafts worldwide. MacDill AFB is also home to the United States Central Command, the United States Special Operations Command and fifty-one (51) other tenant units. MacDill AFB’s economic impact on the Greater Tampa Bay Area was estimated to exceed $4.98 billion, annually, by employing approximately 14,500 military and civilian personnel.
3URIHVVLRQDO6SRUWV The Tampa Bay area is the proud home of several professional sports teams that compete at the major league level including the Tampa Bay Buccaneers which plays in the National Football League (NFL), the Tampa Bay Lightning which plays in the National Hockey League (NHL) and the Tampa Bay Rays, which plays in the Major League Baseball (MLB). The City of Tampa currently hosts the Outback Bowl and the New York Yankees spring training each year.
3 7RXULVPDQG+LJKHU(GXFDWLRQ Tampa offers year-round cultural events and social activities. Major attractions in Tampa include: Busch Gardens, the Florida Aquarium and Lowry Park Zoo. Other cultural venues like the Tampa Museum of Art, Tampa Bay History Center, Glazer Children’s Museum, and the Museum of Science and Industry capture the spirit, history and creative value of Tampa.
Tampa offers a variety of post-secondary educational opportunities. The University of South Florida (USF) offers premier research opportunities in the fields of science and medicine. The University of Tampa (UT) is a private university located on a 100 acre campus adjacent to the Hillsborough River. Tampa is also home to Stetson University of Law. The university focuses on developing students for careers in the legal profession and has a full time enrollment exceeding 760 students. Hillsborough Community College (HCC) is a prominent state college offering two and four year college degrees in Tampa and Hillsborough County. HCC has six (6) campus locations throughout the City of Tampa and Hillsborough County.
Management and Budget Goals
The City implements ongoing budget and management goals that allow the City to enhance its financial health and its image and credibility with the public, rating agencies and investors. The City’s goals in developing the FY2016 budget included:
Creating jobs and growing the City’s economy; Protecting the City’s children; Enhancing the quality for Tampa’s citizens; Improving the City’s infrastructure; Retaining and rewarding City of Tampa employees; Balancing the City of Tampa’s budget without using reserves; and Streamlining regulatory and permitting processes. The City’s ongoing management and budget goals include:
,PSURYLQJ7HFKQRORJ\,QIUDVWUXFWXUH Completing the implementation of an Enterprise Resource Planning (ERP) System to replace out- of-date commercial and in-house developed systems; Upgrading and enhancing the Parks & Recreation management software and citizen access portal to provide high level performance during public enrollments; Completing the implementation of an on-line permitting system to replace the existing 20-year old system; Providing continual upgrades for the Tampa Convention Center that would allow for the hosting of technologically demanding shows; and Operating the City’s INET (intranet) pages with an advanced, content management system that allows for fast editing and publishing of updated information for our customers.
)LVFDO Maintaining a minimum reserve equal to 20% of the general fund and utility services tax special revenue fund’s operating expenditures; Striving to maintain structural balance by keeping recurring expenses in line with recurring revenues; Periodically using private enterprise to supply public services when such agreements are appropriate and cost-effective; Using tax increment financing to combat blight and to promote economic development; Periodically reviewing and adjusting rates, fees and charges to reflect the cost of services; Placing a high priority on seeking matching and “seed” funds to leverage grants and other assistance;
4 Preparing sound maintenance and replacement programs for City equipment and assets; Maintaining high credit ratings to ensure low borrowing costs; Maintaining adequate reserves and fund balances for unforeseen needs and emergencies; Continuing to promote excellence in budgeting and financial reporting; and Developing and maintaining a long-range forecast model to measure the effectiveness of budgetary and financial decisions.
3HUVRQQHO Recognizing employees for exceptional performance and creativity; Providing employee development by promoting training programs; and Offering counseling and referral services for stress, drug abuse and other personal difficulties.
6HUYLFH Providing high quality utility services at reasonable rates; Developing long-range plans to meet demands for City services; Supporting housing programs through public and private partnerships; and Maintaining existing infrastructure and ensuring new development contributes to growth-related infrastructure improvements. ,QWHUJRYHUQPHQWDO Improving planning for growth within the City by coordinating planning agency proposals; Partnering with other local governments in matters of regional interest; Developing proposals for the Hillsborough County legislative delegation agenda on matters requiring state action; and Coordinating with other local governments in order to enhance services and minimize duplication of efforts. %XGJHW+LJKOLJKWV
The FY2016 total budget is $850.2 million. This represents a $26.0 million decrease from the FY2015 level of $876.2 million. This decrease is primarily due to a reduced Wastewater capital improvement program. The FY2016 budget includes:
A $124.3 million capital improvement program which will address a significant amount of deferred infrastructure projects, The replacement of the City’s antiquated utility billing system, and Decreased, city-wide personnel costs of $1.0 million from the FY2015 adopted budget due to the continued changing workforce and savings from lower required pension contributions.
)<)<&DSLWDO,PSURYHPHQW3URJUDP2YHUYLHZ The goal of the City is to improve service to the community through its Capital Improvement Projects (CIP)s. The City’s FY2016-FY2020 Capital Improvement Program contains capital improvement projects totaling $502.7 million. The majority of the capital projects focus on maintaining, repairing and renovating existing City assets such as roads, bridges, parks, public facilities, parking structures, stormwater, wastewater, and water infrastructure.
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In April 2012, the City embarked on developing a broad based master plan, yielding several long-range development plans. “InVision Tampa”, funded by the United States Department of Housing and Urban Development (HUD), identified initiatives that will stimulate economic development and spur community reinvestment. InVision Tampa will position the City of Tampa to be one of the country’s most attractive places to open a business, raise a family and maintain a high quality of life while preserving historic district and neighborhood character. Projects and initiatives include redevelopment of parks and creating a diverse and economically integrated community along the treasured Hillsborough River. Plans also include strong
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City of Tampa Statistical Information
History Port
Initial Incorporation December 15, 1855 Tampa Port Authority Second Incorporation July 15, 1887 Vessels Adoption of Original Charter December 15, 1855 Barge 997 Adoption of Present City Charter October 1, 1975 Cruise 206 Last Amendment July 31, 2008 Tug 941 Vessel 949 General Cargo 1,172,723 net tons Bulk Cargo 36,201,567 net tons Boundaries
City Boundaries Miles of Land Area 113 Airport City Population 352,957 Tampa International Passengers 18,815,425 Cargo 187,356,168 lbs. Government Mail 203,266,320 lbs.
Form of Government Averages Daily Mayor – Council Departures 222 Mayor is elected for a four-year term. Passengers Traveling 51,550 Council members are elected, one from each of four districts and three at-large, for four-year terms. Last Mayoral Election March 3, 2015 Registered Voters 211,158 Votes Cast 26,992 Education Percentage 12.78% Universities Enrolled Next Mayoral Election March 2019 University of South Florida 42,000 University of Tampa 8,037 Stetson University 931 Local Business Public Schools (K-12) SLBE Businesses 494 Hillsborough County 201,431 WMBE Businesses 546
Tampa Central Business Arts & Entertainment District Office Space
Convention Center Number of Office Buildings 53 Number of Events 161 Total Office Space 7.47 million sq. ft. Museums 14 Average Rent $23.49/sq. ft.
*The Statistical Information was provided by the Budget Office of the Revenue and Finance Department.
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Right-of-Way & Parking Leisure & Entertainment
Right-of-Way Facilities Parks 178 Miles of Street Land Area (acres) 3,547 Paved 1,760 Baseball and Softball Fields 81 Unpaved 2 Dog Parks 11 Parking Division Multi-purpose Courts 89 On-Street Meters Spaces 1,792 Tennis, Racquetball Courts 76 Off-Street Spaces 11,925 Playgrounds 78 Football/Soccer Fields 30 Community Centers 28 Boat Ramp Lanes 16 Utilities Pools 14 Fishing Piers 13 Wastewater System Gymnasiums 7 Number of Accounts 109,388 Art Studios 5 Miles of Pipe 1,891 Activity Centers 5 Average Daily Flow (million gals) 64 Marinas 2 Plant Daily Flow Capacity (million gals) 96 Skate Parks 3 Pumping Stations 225 Multi-Purpose Trails 53 Service Area (square miles) 219 Solid Waste System Number of Accounts 85,927 Annual Tonnage of Refuse Collection Public Safety and Disposal 437,600 Tampa Fire Rescue Stormwater Management Curb miles swept annually 23,732 Uniform Employees 648 Miles of Pipe 611 Civilian Employees 48 Miles of Ditches 243 Fire Stations 22 Retention Ponds 118 Number of Boats 4 Water System Response Time: ALS Transport Number of Accounts 130,731 (fractile / 10 min 30 seconds) 90% Miles of Water Mains 2181 Response Time: Fire / EMS Average Daily Demand (million gallons) 62 (fractile / 7 min 30 seconds) 90% Domestic Use Per Capita/Day (gallons) 74 Fire Hydrants 14,040 Tampa Police Department
Uniform Employees 969 Medical Civilian Employees 258 Number of Helicopters 3 Number of Boats 6 Hospitals 10
Sources: http://www.usf.edu https://en.wikipedia.org/wiki/List_of_hospitals_in_Florida http://www.ut.edu/utprofile/ https://www.tampaport.com/about-port-tampa-bay/statistics.aspx http://www.law.stetson.edu/about/home/profile.php#demographics http://www.tampagov.net/dept_minority_business_development/ http://publicschoolsk12.com/all-schools/fl/hillsborough-county/ information_resources/publications.asp http://en.wikipedia.org/wiki/List_of_museums_in_Florida http://www.tampaairport.com/facts-statistics-financials
*The Statistical Information was provided by the Budget Office of the Revenue and Finance Department.
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10 Citizens
City Council Mayor
Neighbor- Chief Revenue City City Internal Public Intergovt. hood Fire of and Police Attorney Clerk Audit Affairs Relations Empower- Rescue Staff Finance ment
Techn- Cable Community Logistics Minority Neighborhood Parks ology Communi- Neighbor- Partnerships Human & Asset Purch- Business Budget Business University and and Accounting cation hood & Neighbor- Resources Manage- asing Develop- Operations Tax & Landlord Recreation Innov- Enhancement hood ment ment Training ation Engagement
Risk and Facilities Insurance Public Works Economic and Utility Opportunity Services
Fleet Planning Transpor- Community Contract and Convention Art Riverwalk Solid tation & Redevelop- Adminis- Wastewater Water Develop- Center Programs Development Waste Stormwater ment tration ment Areas Services
Parking
Legend
Department
Division
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12 CITY LIMITS 75
CITY LIMITS 7 CITY LIMITS CITY LIMITS
275 BUSCH BLVD.
CITY LIMITS
HILLSBOROUGH AVE M L KING BLVD CITY LIMITS 4 6 MABRY DALE 5 KENNEDY 275
GANDY4
MacDill AFB
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16 Crowe Horwath LLP Independent Member Crowe Horwath International
Independent Auditor’s Report
The Honorable Mayor and Members of City Council City of Tampa, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Tampa, Florida, (the “City”), as of and for the year ended September 30, 2015, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the City of Tampa, Florida Firefighters and Police Officers Pension Fund, which represent 66 percent of total assets of the aggregate remaining fund information of the City, and 25 percent of total revenues of the aggregate remaining fund information of the City. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the City of Tampa, Florida Firefighters and Police Officers Pension Fund, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in *RYHUQPHQW$XGLWLQJ6WDQGDUGV, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
(Continued)
17 Opinions
In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund, Utility Services Tax Special Revenue Fund and Community Redevelopment Agency Special Revenue Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1 to the financial statements, in June 2012 the GASB issued GASB Statement No. 68, “$FFRXQWLQJDQG)LQDQFLDO5HSRUWLQJIRU3HQVLRQV” Also, in November 2013 the GASB issued GASB Statement No. 71, “3HQVLRQ 7UDQVLWLRQ IRU &RQWULEXWLRQV 0DGH 6XEVHTXHQW WR WKH 0HDVXUHPHQW 'DWH” Statements 68 and 71 are effective for the City’s fiscal year ending September 30, 2015. These Statements replace the requirements of Statement No. 27, “$FFRXQWLQJIRU3HQVLRQVE\6WDWHDQG/RFDO*RYHUQPHQWDO (PSOR\HUV” and Statement No. 50, “3HQVLRQ'LVFORVXUHV” Statements 68 and 71 establish standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources and expenses as well as identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value and attribute that present value to periods of employee service. Note disclosures and required supplementary information requirements about pensions are also addressed. As a result, net position was restated as of October 1, 2014, for the cumulative effect of the application of this pronouncement. Our opinions are not modified with respect to this matter.
Other Matters
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Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, schedule of funding progress, schedule of investment returns, schedules of changes in the net pension liability and related ratios, and schedules of contributions as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying schedule of expenditures of federal awards and state financial assistance as required by the U.S. Office of Management and Budget Circular A-133, $XGLWVRI6WDWHV/RFDO*RYHUQPHQWVDQG1RQ3URILW 2UJDQL]DWLRQV, and Chapter 10.550, 5XOHVRI WKH$XGLWRU*HQHUDOintroductory section, combining and individual fund statements and schedules, other supplemental information, continuing disclosure section, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.
(Continued)
18 The schedule of expenditures of federal awards and state financial assistance, combining and individual fund statements and schedules, and other supplemental information are the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards and state financial assistance, combining and individual fund statements and schedules, and other supplemental information are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory section, continuing disclosure section, and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with *RYHUQPHQW$XGLWLQJ6WDQGDUGV, we have also issued our report dated April 15, 2016, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with *RYHUQPHQW $XGLWLQJ 6WDQGDUGV in considering the City’s internal control over financial reporting and compliance
Crowe Horwath LLP
Tampa, Florida April 15, 2016
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22 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015
Our discussion and analysis of the City of Tampa’s (the “City”) financial performance provides an overview of the City’s financial activities for the fiscal year ended September 30, 2015. We encourage readers to consider the information presented herein in conjunction with the additional information furnished in our letter of transmittal, which can be found on pages 1-6 of this report. All amounts in this MD&A, unless otherwise indicated, are expressed in thousands of dollars.
Fiscal year 2015 budget theme, “Smarter Investments for Tomorrow’s Tampa” reflects the City’s continued effort to focus on priorities that will improve the quality of life and support Tampa’s economic success for the benefit of all its citizens. The theme is reflective of the City’s three (3) primary strategic goals: Changing Tampa’s Economic DNA Continuing to Empower Neighborhoods Keeping our Streets Safe
To achieve these strategic goals, the City focuses its efforts on providing excellent customer service to the citizens, maintaining and improving aging infrastructure and building financial reserves to promote continued investments in neighborhoods.
In this fiscal year, the City adopted provisions of several Governmental Accounting Standards Board (GASB) Statements. These provisions relate to GASB Statement No. 68 $FFRXQWLQJ DQG )LQDQFLDO 5HSRUWLQJ IRU 3HQVLRQV and GASB Statement No. 71, 3HQVLRQ7UDQVLWLRQIRU&RQWULEXWLRQV0DGH6XEVHTXHQWWRWKH0HDVXUHPHQW'DWHDQ$PHQGPHQWWR *$6% 6WDWHPHQW 1R Statement No. 68 and Statement No. 71 enhances the accountability and transparency of financial information to include revised and new financial note disclosures and a required supplementary information section. With the implementation of the GASB Statement No. 68, the Net Pension Obligation (NPO) has been replaced with a new term, Net Pension Liability (NPL). In this fiscal year, the City has combined the Firefighters and Police Officer’s (F&P) Pension Trust Fund’s NPL along with the General Employee’s Pension Trust Fund’s NPL calculation in the Government-wide Financial Statements. Additional information regarding these changes can be found in the notes to the financial statements beginning on page 83 of this report.
Financial Highlights Government-Wide Level
• The combined total assets of the City of Tampa, at $2.985 billion, plus deferred outflows of resources totaling $64.0 million exceeded its combined total liabilities of $1.016 billion and deferred inflows of $14.1 million at September 30, 2015 by $2.019 billion (net position), an increase of $16.3 million (.8%) in net position compared to the prior year balance of $2.003 billion. • Of this net position amount, $1.688 billion (84%) is invested in capital assets and $124.9 million (6%) is restricted by laws, agreements, or debt covenants leaving $206.6 million (10%) in unrestricted net position. • This unrestricted amount of $206.6 million is a $70.8 million (26%) decrease from the prior year unrestricted net position balance of $277.3 million.
in thousands )LVFDO 23 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 • Governmental net position decreased $29.4 million (going from $881.1 million in 2014 to $851.7 million in 2015); in part due to a new GASB requirement causing the restatement of net position $65.8 million for pension reporting transactions and the change in governmental net position of $36.4 million. FY15 Net Position Restatement – Governmental Funds in thousands Beginning Net Position $ 881,104 NPL Restatement – Pension Trust Funds (65,801) Net Position - Restatement 815,303 Change in Governmental Net Position 36,381 Ending Net Position $ 851,684 • Business-type net position increased $45.7 million (going from $1.122 billion to $1.167 billion) partly due to a net position restatement of $1.4 million for pension reporting during the year, but primarily due to the positive performance of the business-type activities. FY15 Net Position Restatement – Business Type Funds in thousands Beginning Net Position $ 1,122,206 NPL Restatement – Pension Trust Funds (1,358) Net Position - Restatement 1,120,848 Change in Business-Type Net Position 47,071 Ending Net Position $ 1,167,919 Additional information relating to the restatement of the City’s Net Position can be found in the Financial Footnotes (Note 3) on page 98. LQWKRXVDQGV )LVFDO • In governmental activities, revenues totaled $466.9 million while expenses totaled $459.4 million. In the business-type activities, the increases in net position of the water, wastewater and solid waste enterprise funds accounted for the majority of the increase in the net position. LQWKRXVDQGV )LVFDO LQWKRXVDQGV )LVFDO 24 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 As of the close of the current fiscal year, the City’s governmental funds (i.e., general fund, utilities services tax special revenue fund, etc.) reported combined ending fund balances of $192 million. LQWKRXVDQGV )LVFDO Approximately 10% of this amount, $19.4 million, is in unassigned fund balance and the remainder is restricted, committed or assigned for open contracts, programs, debt, etc. The unassigned fund balance of $19.4 million consists of $35.9 million for the general fund and a $16.5 million deficit unassigned fund balance for capital project funds. This deficit will be eliminated with funds from a pending debt issuance in Fiscal Year 2016. Total fund balances in the general fund and utilities services tax special revenue funds combined is $109.1 million, or 32% of combined expenditures of $345.5 million. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Tampa’s Basic Financial Statements. The City of Tampa’s Basic Financial Statements comprise three components: 1) Government-Wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the Financial Statements. This report also contains other supplementary information in addition to the Basic Financial Statements themselves. Government-Wide Financial Statements. The *RYHUQPHQW:LGH)LQDQFLDO6WDWHPHQWV are designed to provide readers with a broad overview of the City of Tampa’s finances in a manner similar to a private-sector business. The 6WDWHPHQWRI1HW3RVLWLRQ presents information on all of the City of Tampa’s assets and liabilities, deferred inflows, and deferred outflows at the end of the fiscal year. The difference between the assets and deferred outflows of resources and its liabilities and deferred inflows of resources is reported as QHWSRVLWLRQ. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Tampa is improving or deteriorating. The 6WDWHPHQW RI $FWLYLWLHV presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, UHJDUGOHVV RI WKH WLPLQJ RI UHODWHG FDVK IORZV. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The Government-Wide Financial Statements distinguish functions of the City of Tampa that are principally supported by taxes and intergovernmental revenues (JRYHUQPHQWDODFWLYLWLHV), from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (EXVLQHVVW\SHDFWLYLWLHV). The governmental activities of the City of Tampa include general government, public safety, public works, economic environment, and culture and recreation. The business-type activities of the City of Tampa include the water utility, wastewater utility, solid waste system, parking facilities, and golf courses. The Government-Wide Financial Statements include the City of Tampa (known as the SULPDU\ JRYHUQPHQW), and the legally independently governed Tampa Historic Streetcar, Inc. for which the City of Tampa is financially accountable. Financial information for this FRPSRQHQWXQLW is reported separately. The Community Redevelopment Agency, although legally independent, functions for all practical purposes as a department of the City of Tampa, and therefore has been included as an integral part of the primary government. The Government-Wide Financial Statements can be found on pages 41-42 of this report. Fund Financial Statements. A IXQG is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Tampa, like other state and local governments, 25 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Tampa can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. *RYHUQPHQWDO IXQGV are used to account for essentially the same functions reported as JRYHUQPHQWDO DFWLYLWLHV in the government-wide financial statements. However, unlike the Government-Wide Financial Statements, governmental fund financial statements focus on QHDUWHUPLQIORZVDQGRXWIORZVRIVSHQGDEOHUHVRXUFHV as well as on EDODQFHVRIVSHQGDEOHUHVRXUFHV available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term funding requirements. Because the focus of governmental funds is narrower than that of the Government-Wide Financial Statements, it is useful to compare the information presented for JRYHUQPHQWDO IXQGV with similar information presented for JRYHUQPHQWDO DFWLYLWLHVin the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near term funding decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between JRYHUQPHQWDOIXQGVand JRYHUQPHQWDODFWLYLWLHV. The City of Tampa maintains thirty (30) individual governmental funds. Information is presented separately in the governmental fund Balance Sheet and in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the general fund, utilities services tax special revenue fund and the community redevelopment agency special revenue fund, which are considered to be major funds. Also, since the City of Tampa adopts an annual appropriated budget for its general fund, utilities services tax special revenue fund, community redevelopment agency and other non-major governmental funds, a budgetary comparison statement has been provided for these funds to demonstrate compliance with this budget. Data for the additional twenty-seven (27) governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is presented in the form of &RPELQLQJ6WDWHPHQWV elsewhere in this report. The governmental fund financial statements can be found on pages 49-57 of this report. Proprietary Funds. The City of Tampa maintains two different types of proprietary funds. (QWHUSULVHIXQGV are used to report the same functions presented as EXVLQHVVW\SHDFWLYLWLHV in the Government-Wide Financial Statements. The City of Tampa uses enterprise funds to account for its water utility, wastewater utility, solid waste system, parking facilities, and golf courses. ,QWHUQDOVHUYLFHIXQGV are an accounting device used to accumulate and allocate costs internally among the City of Tampa’s various functions. The City of Tampa uses internal service funds to account for its fleet maintenance and utility accounting functions. Because these services predominately benefit governmental rather than business-type functions, they have been included within JRYHUQPHQWDODFWLYLWLHV in the Government-Wide Financial Statements. Proprietary funds provide the same type of information as the government-wide statements, only in more detail. The proprietary fund financial statements provide information for the City’s three major enterprise funds: water utility, wastewater utility and the solid waste system. The two non-major funds, the parking division and golf courses are combined into a single aggregated presentation in the proprietary fund financial statements, as are the City’s two internal service funds, fleet maintenance and utility accounting division. Individual fund data for the non-major enterprise funds and the internal service funds is provided in the form of &RPELQLQJ6WDWHPHQWV elsewhere in this report. The proprietary fund financial statements can be found on pages 63-68 of this report. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are QRW reflected in the Government-Wide Financial Statement because the resources of those funds are QRWavailable to support the City of Tampa’s programs. The fiduciary funds include the firefighters and police officers (F&P) pension trust fund, the general employees’ (GE) retirement trust fund and various agency funds. The accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary fund aggregate financial statements can be found on page 73-77 of this report. Individual fund data is provided in the form of &RPELQLQJ6WDWHPHQWV elsewhere in this report. 26 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the Government-Wide and fund financial statements. The Notes to the Financial Statements can be found on pages 83-160 of this report. Other Information. In addition to the Basic Financial Statements and the accompanying notes, this report also presents certain 5HTXLUHG6XSSOHPHQWDU\,QIRUPDWLRQ 56, concerning the City of Tampa’s progress in funding its obligation to provide pension and other postemployment benefits to its employees. Required supplementary information can be found on pages 163-175 of this report. The combining statements referred to earlier in connection with non-major governmental, non-major enterprise, internal service and fiduciary funds are presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages 179-254 of this report. Other Supplementary Information pertaining to the City’s financial activities is located on pages 259-263. Statistical Information. The statistical section, found on pages 269-287, presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information indicates about the City’s overall financial health. Financial Analysis of the Government-wide Financial Statements This section focuses on the net position and changes in net position of the City’s governmental activities and business- type activities present in the Government-wide Statement of Net Position and Statement of Activities. Government-wide Statement of Net Position As noted earlier, the combined total net position of the City may serve over time as a useful indicator of Tampa’s financial position. In the case of the City of Tampa, assets (at $2.990 billion) and Deferred Outflows of Resources of ($64.0 million) exceeded liabilities (at $1.020 billion) and Deferred Inflows of Resources of ($14.1 million) by $2.019 billion (net position) at the close of the most recent fiscal year, an increase of $16.3 million (.8%) over the total net position amount of $2.003 billion in the prior year. This decrease is due to the implementations of GASB Statement Number 68, $FFRXQWLQJ DQG )LQDQFLDO 5HSRUWLQJ IRU 3HQVLRQV and GASB Statement Number 71, 3HQVLRQ 7UDQVLWLRQ IRU &RQWULEXWLRQV 0DGH 6XEVHTXHQW WR WKH 0HDVXUHPHQW 'DWHDQ $PHQGPHQW WR *$6% 6WDWHPHQW 1R requiring the City to restate its beginning Net Position for a total of $67.2 million. 27 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 As illustrated in the table below, by far the largest portion of the City of Tampa’s assets (84%) reflects its investment in capital assets (e.g., land, buildings, furniture, and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently these assets are QRW available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Net position invested in capital assets grew by 6% or $95.3 million during the year (from $1.593 billion to $1.688 billion). An additional portion (8%) of the City of Tampa’s assets, UHVWULFWHGQHWSRVLWLRQ at $124.9 million, represents resources that are subject to external restrictions on how they may be used, e.g., for debt and capital improvements. The restricted net position decreased 7% or $8.3 million during the year. The remaining balance of XQUHVWULFWHGQHWSRVLWLRQ (at $206.6 million) decreased $70.7 million (or 25.5%) during the year and are used to meet the City’s ongoing obligations to citizens, creditors and other agencies (e.g., the CRA, grantors, etc.). Due to the implementation of GASB Statement No. 68, , and the related net position restatement mentioned earlier, the City has experienced a deficit in the unrestricted net position category. The City of Tampa is able to report positive balances in the other two (2) categories of net position, for the government as a whole (decreasing at 1%), as well as for its separate governmental (decreasing 2%) and business-type (growing 3%) activities. City of Tampa's Net Position *RYHUQPHQWDO %XVLQHVV7\SH $FWLYLWLHV $FWLYLWLHV 7RWDO &XUUHQWDQG2WKHU$VVHWV &DSLWDO$VVHWV 7RWDO$VVHWV 'HIHUUHG2XWIORZVRI5HVRXUFHV /RQJ7HUP/LDELOLWLHV2XWVWDQGLQJ 2WKHU/LDELOLWLHV 7RWDO/LDELOLWLHV 'HIHUUHG,QIORZVRI5HVRXUFHV 1HW3RVLWLRQ 1HW,QYHVWPHQWLQ&DSLWDO$VVHWV 5HVWULFWHG 8QUHVWULFWHG 7RWDO1HW3RVLWLRQ 5HVWDWHG Governmental Activities. The SWDWHPHQW RI $FWLYLWLHV divides the activities between governmental activities and business-type activities. Governmental activities increased the City of Tampa’s net position by $7.5 million (before transfers) and increased net position $36.4 million after transfers {e.g., transfers from the enterprise funds for Payment in Lieu of Taxes (PILOT) and Payment in Lieu of Franchise Fees (PILOFF)} but decreased net position $29.4 million after the restatement for the new GASB Statement No. 68 related to financial reporting for Pensions (see restatement table on page 98). Key elements of this change are as follows: • Total revenues were up $48.4 million (from $418.5 million to $466.9 million). A significant portion of this increase is attributed to an increase in property taxes, utilities services taxes and an increase in investment earnings. • Property taxes increased $8.5 million. These increases are the direct result of the continued economic recovery experienced in the Tampa Bay Area. The City’s millage rate of 5.7326 was the same as the rate adopted the previous year, and is well below the maximum 10.0 millage rate allowed by Florida Statutes. 28 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 • All expenses reflect decreases, except public safety due to the GASB Statement No. 68 restatement, over the prior year. Total expenses are down $7.0 million (or 1.5%) from $466.5 million to $459.4 million. Public safety expenditures of $257.5 million are offset by $67.0 million in specific charges and grants and contributions. Overall, 45% of offsetting revenues for governmental activity expenses come from specific charges for services, operating grants and capital grants and contributions. The remaining 55% of revenue supporting governmental activities comes from property taxes (28%) and other taxes (27%). City of Tampa's Changes in Net Position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ity of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 30 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 Business-Type Activities. Business-type activities increased the City of Tampa’s net position by $75.9 million (before transfers) and $47.1 million after transfers (e.g., transfers for Payment in Lieu of Taxes (PILOT) Payment in Lieu of Franchise Fees (PILOFF) to the governmental funds) and $45.7 million after the restatement for the new GASB Statements No. 68 and No. 71 related to financial reporting for Pensions. Key elements of this change are as follows: • Charges for services increased $8.0 million (from $308 million to $316 million). As discussed more fully in the proprietary fund section below, water operating revenues are up $1.0 million (from $98 million to $99 million) wastewater operating revenues increased $2.0 million (from $106 million to $108 million); and solid waste operating revenues increased $4.5 million (from $85.7 million to $90.2 million). • Operating expenses decreased 1%, at $248.7 million compared to $249.5 million in the prior year. As the bar chart below illustrates, unlike governmental activities, business-type activities are typically able to pay for themselves through specific user charges and revenue sources. 31 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 Fund Level Financial Analysis Governmental Funds. As noted earlier, the City of Tampa uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. These funds include governmental funds, proprietary funds and other fund types. The general fund, utilities services tax special revenue fund, community redevelopment agency special revenue funds and a variety of special revenue, debt service and capital project funds are recorded in the governmental funds. The focus of the City of Tampa’s JRYHUQPHQWDOIXQGV is to provide information on near-term inflows, outflows, and balances of VSHQGDEOH resources. Such information is useful in assessing the City of Tampa’s funding requirements. In particular, XQDVVLJQHGIXQGEDODQFH may serve as a useful measure of a government’s net resources at the end of the fiscal year. As of September 30, 2015, the City of Tampa’s governmental funds reported combined ending fund balances of $192.0 million. Approximately 90% of this total amount ($172.7 million) is non-spendable, restricted, committed, or assigned, leaving $19.4 million (10%) as unassigned. The utilities services tax fund balance of $51.1 million is classified as restricted based on its origin, but considered available, as it is used for operations. The general fund is the chief operating fund of the City of Tampa. As of September 30, 2015, the unassigned fund balance for the general fund was $35.9 million, while total fund balance was $57.9 million. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 10.4% of total general fund expenditures, while total fund balance represents 16.8%. The City’s policy requires a minimum of 20% of expenditures for its combined general fund and utilities services tax special revenue fund. Available fund balances in the general fund and utilities services tax special revenue fund total $87.1 million, or 25.17% of combined expenditures. The fund balance of the City of Tampa’s general fund declined $4.2 million during the current fiscal year as a result of operations: • The amended general fund budget reflected an anticipated deficit of $7.5 million. • Franchise fees, miscellaneous charges and investment earnings were $3.2 million, $.7 million and $2.4 million less than budgeted respectively. Insurance revenues are normally reduced by actual insurance costs. In fiscal year 2015, insurance revenues exceeded the expenditures causing a $4.4 million budget variance. On the expenditure side, most expenditures were under budget. • Revenues of $274.9 million were $20.4 million higher compared to 2014 (at $254.5 million). Property tax revenues of $133.0 million increased $8.7 million compared to the prior year. • Actual expenditures, at $345.4 million were $5.8 million higher than the prior year. Public safety expenditures increased $5.0 million. Culture and recreation expenditures slightly increased $.6 million. Public works/Environmental Services expenditures decreased $4.4 million. The fund balance of the utilities services tax special revenue fund increased $3.7 million in 2015, with an ending fund balance amount of $51.1 million. The key factors in this change are as follows: • Expenditures were down 7.2% from $118 thousand in FY14 to $84.5 thousand in fiscal year 2015 • Net transfers decreased $5.8 million compared to 2014. The fund balance in the Community Redevelopment Agency (CRA) major funds increased $746 thousand in 2015, with an ending fund balance of $7.6 million. The key factors in this change are as follows: • Total revenues increased $1.3 million compared to 2014 due to higher tax increment property tax receipts. • Total expenditures decreased $3.1 million compared to 2014 due to the completion of construction projects in the East Tampa and Channel District areas. Proprietary Funds. Includes the water, wastewater, solid waste, parking, and golf course enterprise funds, as well as the fleet and utility accounting internal service funds. 32 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 • In the water utility fund, the change in net position before contributions and transfers was $26.1 million, a $411 thousand decline compared to the prior year as watering restrictions were applied. Operating revenues increased $836 thousand, while expenses increased $1.2 million. • In the wastewater utility fund the change in net position before contributions and transfers was $19.9 million, an increase from the prior year. Operating revenues increased $2.3 million, while operating expenses were up $576 thousand compared to the prior year. • In the solid waste system fund the change in net position before contributions and transfers was $25.0 million, a $6.2 million increase over the prior year as operating revenues increased $4.5 million and operating expenses decreased $978 thousand. • Unrestricted net position of the water utility amounted to $114.3 million, for the wastewater utility $75.1 million, for the solid waste system $39.2 million, and those for the non-major funds amounted to a negative $513 thousand. The total change in net position for the three major funds (water, wastewater and solid waste) was $21.4 million; $9.4 million; and $17.3 million, respectively. Other factors concerning the finances of those funds are addressed in the discussion of the City of Tampa’s business-type activities. General Fund Budgetary Highlights The differences between the original budget and the final amended budget reflect a $2.5 million increase in appropriations. The increased/decreased appropriations are as follows: • $4.8 million increase to public safety. • $0.3 million decrease to culture and recreation. • $0.9 million decrease to environmental services. • $1.2 million decrease to general governmental. • $0.05 million increase in transfers out. The differences between the final budget and actual revenues reflect an increase of $.4 million (actual amount above the budgeted amount) and can be summarized as follows: Intergovernmental revenues and Taxes were up $1.4 million and $.015 million, respectively. Charges for Services were $3.4 million more than budgeted due to higher than expected activity. Fines and Forfeitures and Contributions and Donations were up $1.1 million. Franchise fees and other fees were $3.1 million less than budgeted due to lower than expected activity. Interest Earnings were $2.4 million less than budgeted due to a comparative drop in market value of investments. Capital Asset and Debt Administration Capital Assets. The City of Tampa’s investment in capital assets for its governmental and business-type activities as of September 30, 2015, amounts to $2.3 billion (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery and equipment, park facilities, roads, highways, and bridges. The total net increase in the City of Tampa’s investment in capital assets for the current fiscal year was 1.01% (a 1.00% increase for governmental activities and a .01% decrease for business-type activities). Major capital asset events during the current fiscal year included the following: • Gas tax fund capital improvements totaled $23.2 million for street resurfacing, sidewalks, intersection improvements and other projects. • Utilities services tax special revenue fund capital improvements totaled $6.2 million for Stormwater Basin Water Quality improvements, ERP software implementation and other projects. • Impact fees fund capital improvements totaled $5.1 million for various projects. • Community Investment Tax (CIT) fund capital projects totaled $10.9 million for Julian B. Lane and Perry Harvey Sr. Park improvements project, aquatic facilities, Greco Sports Complex and other projects. During Fiscal 2015, the Water Fund suffered an impairment loss of $1,799,227 due to a change in use of a facility. Additional information on the City of Tampa’s capital assets can be found in Note 8 on pages 114-116 of this report. 33 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 City of Tampa's Capital Assets (Net of depreciation) *RYHUQPHQWDO %XVLQHVV7\SH $FWLYLWLHV $FWLYLWLHV 7RWDO /DQG %XLOGLQJV ,PSURYHPHQWV2WKHU7KDQ%XLOGLQJV ,QWDQJLEOH$VVHWV )XUQLWXUHDQG(TXLSPHQW ,QIUDVWUXFWXUH &RQVWUXFWLRQLQ3URJUHVV 7RWDO Long-Term Debt. As of September 30, 2015, the City of Tampa had revenue bonded debt outstanding in the principal amount of $614.20 million. Debt incurred under the State of Florida revolving loan program totals $26.7 million. HUD Section 108 loans and other notes outstanding at the end of the current fiscal year totaled $28.3 million. The City of Tampa does not pledge its full faith and credit to secure any of its outstanding debt. City of Tampa's Outstanding Debt Revenue Bonds, State Loans, Notes Payable *RYHUQPHQWDO %XVLQHVV7\SH $FWLYLWLHV $FWLYLWLHV 7RWDO 5HYHQXH%RQGV 6WDWHRI)ORULGD5HYROYLQJ/RDQV &5$%DQN/RDQ 1RWHV3D\DEOH 7RWDO The City of Tampa’s outstanding debt declined, by $59.1 million during the current fiscal year after making $86.0 million in principal and interest payments. As of September 30, 2015, the City had no general obligation debt. Other Post-Employment Benefits (OPEB) In accordance with GASB Statement No 45, AFFRXQWLQJ DQG )LQDQFLDO 5HSRUWLQJ E\ (PSOR\HUV IRU 3RVWHPSOR\PHQW %HQHILWV2WKHU7KDQ3HQVLRQVthe Net Other Postemployment Benefit obligation included in the Outstanding Long-Term Liabilities represents the City's unfunded annual required contributions (ARC) pursuant to the actuarial calculations for the accrued cost of eligible retiree health insurance as of September 30, 2015. The net OPEB obligation at the end of fiscal years 2015 and 2014 were $28.5 million and $25.6 million, respectively. 34 City of Tampa, Florida Management’s Discussion and Analysis (MD&A) September 30, 2015 The City seeks to maintain a minimum of an "A" rating from Standard & Poor's rating Services (S&P), Fitch Ratings (Fitch), and Moody's Investor Services (Moody's) for each of its revenue bond programs and issuer credit rating (ICR). The most recent ratings are as shown below: City of Tampa Bond Ratings Standard & Issue Moody's Poor's Fitch Issuer Credit Rating Aa1 AAA AA Non-Ad Valorem Aa2 AA+ AA- Occupational License Aa2 AA+ AA- Sales Tax Aa2 AA+ AA Solid Waste A2 A+ Utilities Tax - Senior Lien Aa2 AA AA Utilities Tax - Subordinate Lien Aa3 AA- AA- Water & Sewer Aa1 AAA AAA Additional information on the City of Tampa's long-term debt can be found in Notes 11 and 12 on pages 120-131 of this report. Economic Factors and Fiscal Year 2016 Budget At November 30, 2015 the unemployment rate for the City of Tampa area was 4.6% which is lower than the rate of 5.7% of a year ago. An 8.3% increase in taxable property valuation (from $24.0 billion to $26.0 billion) is budgeted for 2016. During the current fiscal year, available fund balances in the general fund and utilities services tax special revenue fund increased to $87.0 million. The City of Tampa appropriated $4.6 million of this amount from the general fund for spending in the 2016 fiscal year budget. The property tax millage rate will remain the same for the ninth consecutive year the same at 5.7326 mills in 2016. All of these factors were considered in preparing the City of Tampa’s budget for the 2016 fiscal year. The City continues ongoing communication with the County Property Appraiser and closely monitors national, state and local economic indicators to determine any impact on its financial forecasts. After an increase in property values for fiscal year 2016, it is expected that there will be an additional increase in property values in 2017. Contacting the City’s Financial Management This financial report is designed to provide a general overview of the City of Tampa’s finances, comply with finance- related laws and regulations and demonstrate the City’s commitment to public accountability. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the office of the Chief Financial Officer, City of Tampa, 306 East Jackson Street, 8th Floor North, Tampa, Florida, 33602, (813) 274- 8151, or by visiting our website at: http://www.tampagov.net/dept_accounting. 35 (This page intentionally left blank.) 36 Basic Financial Statements The Basic Financial Statements subsection incorporate governmental, business-type and fiduciary transactions for the City of Tampa, and activities for its Component Units. The Basic Financial Statements are listed below: Government-wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Major Governmental Funds Balance Sheet Statement of Revenues, Expenditures and Changes in Fund Balances Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual Major Proprietary (Enterprise) Funds Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows Fiduciary Funds Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position 37 (This page intentionally left blank) 38 ? @J " = > = ! " > ! \ - Q 39 (This page intentionally left blank) 40 X " Q Z " $ % < ]*]^ _ ^] `_ _^ ]` ]*"]| ~! / !-#& # # -#& (! & & # H H H H 2 2 2 / / H H H H 41 X " Q Z " $ % < ]*]^ _ < ] _| ] < ]<| ]^+]+ ]` ]*"]| ~! 3 ) 4& / #% & '%/## / !-#& # # % ' %"# - - -#& (! #5/ #% ) & # $ # # $ # & & # / !-#& H H H H H H H H I H H H H # # H H H H H H H H /##(#$ 603 4 #7 /##( $ 78 H H H H 42 Fund Financial Statements The Fund Financial Statements include statements for the Major Governmental Funds, the Major Proprietary (Enterprise) Funds and the Fiduciary Funds. This subsection contains the following financial statements: Major Governmental Funds Balance Sheet Statement of Revenues, Expenditures and Changes in Fund Balances Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual Major Proprietary (Enterprise) Funds Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows Fiduciary Funds Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position 43 (This page intentionally left blank) 44 [ ? " " * = + $ Z \] " + $ Z \] " + M + 45 (This page intentionally left blank) 46 ` $ ? z\$- \- "{-% ~ # = ! \ | < |< # ? 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H J H 52 X " Q Z " $ % < ]*]^ _ |]]^\] ! ] `]^+ \|] ! <^+ <^=] ^ \^+ "<<^ ] >>"\+=] <^+ < \< =]^]|< \^+ _| ] < ]<| ]^+]+ ]` ]*"]| ~! : *' % %( % % /#& # # # 3%&4 : H H H H I : 53 X " Q Z " $ % < ]*]^ _ |]]^\] ! ] `]^+ \|] ! <^+ <^=] ^ \^+ "<<^ ] >>"\+=] <^+ < \< =]^]|< \^+ _| ] < ]<| ]^+]+ ]` ]*"]| ~! : *' % %( % % /#& # # # 3%&4 ;/ H H H H I I ;/ + - 3 4 #' % # '% ( 6 ( / . 78 H H H H 54 X " Q Z " $ % < ]*]^ _ |]]^\] ! ] `]^+ \|] ! <^+ <^=] ^ \^+ "<<^ ] >>"\+=] <^+ < \< *< _| `] < |]]^\] \^+ \ ] ]| ] < `] < |]]^\] _| ] < ]<| ]^+]+ ]` ]*"]| ~! : *' % %( % % /#& # # # 3%&4 : H H H H : ;/ ;/ + - 3 4 #' % '% ( 6 ( / . 78 H H H H 55 (This page intentionally left blank.) 56 X " Q Z " $ % < ]*]^ _ |]]^\] ! ] `]^+ \|] ! <^+ <^=] ^ \^+ "<<^ ] >>"\+=] <^+ < \< *< _| `] < |]]^\] \^+ _**\^ |]+]]_`*]^ <=]^ `] < |]]^\] _| ] < ]<| ]^+]+ ]` ]*"]| ~! : *' % %( % % /#& # # # 3%&4 : H H H H : ;/ ;/ + - 3 4 #' % '% ( 6 ( / . 78 H H H H 57 (This page intentionally left blank.) 58 Q &\ * " " ` - Q $ Z \] " - Q " J 59 (This page intentionally left blank) 60 Q$ Q$ \ $X &\- \$Q$ \* "{-% ` ] # ~ ! # ` $ \- \$Q$ \ "{-% | { " > # \ ! ! ! | # | J { " > ! # \ ! ! # | " > ! # \ * " # 61 (This page intentionally left blank) 62 X " Q Z " $ % < ]*]^ _ ^] `_ _^ `|_`| ] <| \^+ ]` ]*"]| ~! -#& (! &( & .9# 2 2* # 2 #9# ! ! ! # & H H H H H H / / 2 63 X " Q Z " $ % < ]*]^ _ ^] `_ _^ _^ ^\]+ `|_`| ] <| \^+ ]` ]*"]| ~! -#& (! &( & .9# 2 2* # 2 #9# ! ! ! # & H H H H H H / . -( . -( . 2 / / H H H H H H 64 X " Q Z " $ % < ]*]^ _ |]]^\] ! ] `]^ ] ! <^+ <^=] ^ \^+ ^] `_ _^ `|_`| ] <| \^+ _| ] < ]<| ]^+]+ ]` ]*"]| ~! -#& (! &( & .9# 2 2* # 2 #9# ! ! ! # & / - : H H H H H H / - ;/ / - ;/ / - . 3 4 / - : 3 ;/ 4 / - : 3 ;/ 4 . 3 4 +- / / ( 6 / ( / . 78 H H H H H H 65 (This page intentionally left blank.) 66 X " Q Z " $ % < ]*]^ _ < _ `|_`| ] <| \^+ _| ] < ]<| ]^+]+ ]` ]*"]| ~! -#& (! &N & .9# #9# 2 2* # 2 ! ! ! # & H H H H H H H H H H H H 67 X " Q Z " $ % < ]*]^ _ < _ _^ ^\]+ `|_`| ] <| \^+ _| ] < ]<| ]^+]+ ]` ]*"]| ~! -#& (! & & .9# #9# 2 2* # 2 ! ! ! # & H H H H H H H H H H H H H H H H H H H H H H H H I H H H H H H 68 " " R # # " - Q " - Q 69 (This page intentionally left blank) 70 " %{ $X "{-% # # " Q } Q " ? \ } $ " > # | # " > ! # 71 (This page intentionally left blank) 72 X " Q Z " $ % < ]*]^ _ +\ <| ^] `_ _^ `]^ _^ |\ \^+ ]` ]*"]| ~! /# H / / H 73 (This page intentionally left blank.) 74 X " Q Z " $ % < ]*]^ _ <^=] ^ +\ <| ^] `_ _^ `]^ _^ |\ \^+ _| ] < ]<| ]^+]+ ]` ]*"]| ~! /# H / ( 6 / ( / . 78 H 75 (This page intentionally left blank.) 76 X " Q Z " $ % < ]*]^ _ +\ <| ^] `_ _^ <=]^ \^+ ]` ]*"]| ~! %! 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Q \ \ < =<<` # = < " =< " > ! =< " = < | =< " # # ~ " $ \ * > # ! ~ # ! ! ! ! ! # ! ! ! ! ! # ! ! ! # =< " ^ # ! # ! # + { ~ ! ! ! # ! | < |< ~ ~ > ># # |< |< # ~#~ ! ! |< ! ! ! # |< # | < |< < _ ~ ] ! ! # # # 83 _ <*` - \ @ ?- " - {- -? Q \ @ ` ` _ /` ` ! | + ` + # /` ` " ! ! * # /` ` ! ! ! ! # < ! #~ # R # /` ` > # ~ ^ " ! ! ~~ ~ # # > > > # # ` = ] ` ` =] ` =] ` > " # * ! +|_` ! _ # =] ` ! > > > ! # =] ` " # # ] > # > > # = ] ` ` + < > > > > _ ! ! # = ] | ` ` + " > > > > _ ! ! # # + | # =] ` ` > < | # ~ ] ! ! ! ! ~~ # # > > > # % Q { ! ! # ! 84 _ <*` - \ @ ?- " - {- -? Q \ > ! # > | ~ # < | < <| ! > > ~! ! ! # R > ! <| ! # ! # < ! ! ! # ! # R < _ ~ ] ! ! ~~ # # # +~ + " # ! ! # # ! ! # " ! ! ! # = > ^ ` < # ! ! # < ! # > # # ^ ` R > # ~ # ! ^ ` # ! ! ! # ! ^ ` # ! ! ! # < ! # 85 _ <*` - \ @ ?- " - {- -? Q \ > ` ~ # # = # # R ! > ! # < > # ~ " Z + Z " Q > ! ! ! # | # ! ! # _ ! # _ # ! ! ! ! ! ! # < > # < # \ ! # < ! ! ! ! ! # " > ^ ` " ! | " | ^ ` ^ ` # ` ! ! ! # ! ! # < # # ] # ] ! ! ~ > ! # " # 86 _ <*` - \ @ ?- " - {- -? Q \ > # ] ! # %~ [ ? " ~ # ! ! |< # ~ ? " @ ! ! ! =<<` # ! ! ! ! ! # # ~ { ] $ " @ # # < # ~ $ & $ * $ " @ # |< ! # \~ [ Q &\ * " ~ # ! ! # ~ | { " @ R # # > _ * ! ! # ~ | J { " @ R # ! ! # ~ | " @ ! # # 87 _ <*` - \ @ ?- " - {- -? Q \ > "~ " # # ~ " " @ R ! ! ! ! # ~ { " @ ! # ?~ " " ~ # / ` /` _ = ] =] ` # ~ Q " @ / ` _ ` = ] ` ! # ~ " @ # < ! ! # ~ Z Z % J J Z \/ ~ Z \/ Z @ R ! ! # R ! # < # ! # R ! ! ! # < ! # # # # ~ $ Z Q { $ @ < # #! # #! > # < # < > > # 88 _ <*` - \ @ ?- " - {- -? Q \ > < # # ! # # # > # \ ! # ~ Q @ # = # ! # # ~ @ ! ! ! ! # #! ! ! ! > > ! # ] ! ! ! ! ! ! ! # # + # ! ! ! # =< " ^ # ! ! < # < ] < # # * > # > # !! # _ ! ! # ! ! > > > " > _ " > > _ ] > ] _ ] > ] > # 89 _ <*` - \ @ ?- " - {- -? Q \ > ~ @ < # # < < ! # ~ @ ! ! # | # | ! # ! # ^ > ! ! > # < ! > # ] ! R ! ! ! ! ! # ] # ~ $ @ < ^ ` # ! ! ! # ~ % J J $ @ ! # # ! # # | < # > # 90 _ <*` - \ @ ?- " - {- -? Q \ > ` ` < # # ! ! # ] # ~ @ > ! # ! ! > # # # # # < # ! ! _ ! ! # ! ! > ! # _ ~ ! > # \ ! # ~ @ @ > ! ! > > ! > ! ^ ` # " # " # ! ! # # ` ! # ! ! # 91 _ <*` - \ @ ?- " - {- -? Q \ > > ! ! ! > ! ! # < =< " ^ # ! ! ^ ` # ! ! # ~ \ @ ] # ] # ~ " \/ @ # ~ - ! # # > # +# $ ! ! ! ! # ] ! ! ! # ! ! # ~ # # ! # ! # # %~ ! # ! # ! _ _ # \~ { # ! ! ! # 92 _ <*` - \ @ ?- " - {- -? Q \ @ ! ! # ! ! ! ! # ~ \ " - Q > ~ # ~ - ! > ! > # +~ $ ! ! ! ! _ # ] ! ! ! # ! ! # % ! | ! # ! # ? ! # ~ { \ # ! < " $ # ! ! # % $ # # _ # 93 _ <*` - \ @ ?- " - {- -? Q \ @ $ $ $ # ! < | # ! * " | ] # _ ! # # ! ! # ! " $ # ! ! ~ ! # _ # ~ " J @ # \ =< " ^ # ! # ~ { \ @ =<<` ! # < # ~ " + Q @ # ! # ~ Q $ @ < ~ # # ! # ` > # _ R # ! ! ! ! R # 94 _ <*` - \ @ ?- " - {- -? Q \ @ # _ ! ! # < > # ! R ! # ~ - J ? + &? +* Q + ~! ! =< " ` ? + - ~ Z ! =< " ^ # ! " ! # ! ^ # ! $! # # ? + - ~ Z ! " # $ %& ^ ! ~! # =< " ` ! ~! ? + - ~ Z ' ! # # # ~! # ? + - ~ Z $ ( " # %&) * " # %+ %& ! =< " ! ! =< " # =< " > # ! > ! > ! ~ > # ~! # 95 _ <*` - \ @ ?- " - {- -? Q \ @ ? + - ~ Z , # - ! _`]" _`]" _`]" # _`]" ! =< " # =< " _`]"# ~! # ? + - ~ Z , # - ! _`]" _`]" =< " ^ # ! % =< " _`]" ! _`]"# _`]" ! =< " _`]" ! _`]" # ~! # ? + - ~ Z / , " , 0 " * ! =<<` # =<<` =<<` # # ~! # ? + - ~ Z 1 < ! # # ~! # ? + - ~ Z * !2 , # + ! ^ # ! % > > ! ! ~ # ~! # # 96 _ <*` - \ @ ?- " - {- -? Q \ @ ? + - ~ Z 21 3 * + ! # # ~! ! ~! # # ? + - ~ Z # 4 ! " # $ 56 ! # # ~! # # - \ @ +{%?\ -% +{%?\ $X % ! ! # + Q < =<<` +"= ! ` ! > ! # # < # " # + # * # ] # R _ * * # & * 97 _ <*` - \ @ $\ \ \- " -\ Q - =< " ^ # ! =< " ^ # ! & ' " ( ' $ ) #"* " +% ,- ! ^ ` _ ^`_ ^ ` ^` ! ^` = ] =] ` ` ! ` _ /` ` ^` > # < ! > ! ! Z ! ! ! !~ ! > # ? ^ ` ! _ ! !~! ^ ` < > = ] =] ` !~ ! ~ ^ ` < > ` /` ` ~!! ` + _ /` ! ~! ^ ` ! _ ! ! !~~! + @ ^ ` ! _ ! !! ! < =< " ^ # =] ` !~ ! ^ ` ! _ ! ! !! ! ~ | { " ^ ` ! _ ! ! ~! < =< " ^ # =] ` ! ^ ` ! _ ! ! ! ! | J { " ^ ` ! _ ! ! ! ~ < =< " ^ # =] ` ! ^ ` ! _ ! ! !~! | " ^ ` ! _ ! !! < =< " ^ # =] ` ~! ^ ` ! _ ! ! !! - [ \ " ^ ` ! _ ! ! ! ~~ < =< " ^ # =] ` ! ^ ` ! _ ! ! ! ~! 98 _ <*` - \ @ "{-% + - \ -% -\ Q - " ! # ] ^ ` ! ^ ` # ? " + ! ! ! ! ! # * ^ = { ] $ - [ ? ? ? $ $ " " ^ ` ~ ! > > > ~ ! ~ ! > > > ~ ! + " !~ > > > !~ | _ > > > ! ! ! ! ` / | > > > ! ! ! ! " > > > ! ! ! ! / < > > > ! ! ! ! | > > > ! ! ! ! + / > > > ! ! ! ! ` > > > !~ ! !~ ! = > > > ! ! ~ ! ! ~ ` > > > ! ! ` > > > ! ! ` < !~ !~ ` ` > > > ~!! ~!! > > > ! ! ~ ! ! ~ > > > ~~!~ ~~!~ > > > ! ! 99 _ <*` - \ @ "{-% + - \ -% -\ Q - @ ? " + > { ] $ - [ ? ? ? $ $ " " | ] | > > > ! !~ ! !~ > > > ! !~ ! !~ > > > ! ~!~ ! ~!~ " | / | > > > ~! ~! = = > > > !~! !~! > ~ ! ! > > ~ ! ! + > !~! > ! ! ~! ! ] / ` ] + > > !! > !! ] > > ! ! > ! ! > > > ! ! ! ! > > > ! ! ! ! + ` > > ! ! > ! ! > > ! > ! + > > ~! > ~! | > > ! > ! > !~ > !~ + ^ > > > ! > ! ` > > ~ > ~ > !! ! ! ! ! !! ] / ` ] > > > !! !! = = ! ~ > > > ! ~ & ! ~ > > !! ! ~! < ~! ! > > > ~! ! ! ! > > > ! ! ! ! > > > ! ! \ ~! !~ > > !~! !~! " ! ~!~ !! ! ! !! ! ! 100 _ <*` - \ @ "{-% + - \ -% -\ Q - @ ? " + > % " + < ! \ " ` ! ! | !~ ! ` ~ !~ !~! # Q &\ * " - Q ^ ` ^ < ! | + ! | | = # \ ^ ` + _ | ! + | | ! + ! \ ! | | J | Q ? \ { { { " " ^ < ~ ! ! ~ ! ! ! ~ ~! ! ! ! ! ! | _ < ! ! ! ! ! > > ! ! _ | !~ !~ !~! ! ~! ! ~! ` ` > | " ! ! ~ ! > > > ~!! > | " !~ ! ! !~ > > > ! ! > | " > ~! > > > ~! > | " !! > > > > !! > | " > > ! ! > > ! ! > | " ! ! > > > > ! ! > | " ! ! > > > ! > | ! > > > > ! > | ~ > !~ ! > > > !~ ! > | ! > > > > ! > | ~! > > > > ~! > | !~ > > > > !~ > | > ! > > > ! ` ~! ! !! ! ! > > ! ! ~ $ " ! ! ~ !! ! ~ ! ~ > > ! ~! 101 _ <*` - \ @ "{-% + - \ -% -\ Q - @ Q &\ * " - Q @ | | J | Q ? \ { { { " " ` | ! !~ > > > > ! !~ < ` ! > > > > ! & ! ! > > > > ! ! = * " ! ! > > > > ! ! = ! > > > > ! # !~! > > > > !~! \ + _ | ! ! ! !~ ! ! ~ > > ! ! + + * > > !! > > !! + | | !! !! ! > > ! ! + ! ! !! > > > ! ! \ ! ! !~ !~ ! !~ ! ! ~ !! . !~~ ! !! ~! ! ! ! ~ ! ! ^ ` !~! ~ ! !~ ! ! ! ~! !~!~ ! !! % - Q < ! ! ! # ^ _ ~!~ ! > ! ! ~# & * 102 _ <*` - \ @ Q$ Q\$ X \ ~ Q ] \ ` ` < # < # ~ * # _ " # ^ ` # ^ ~ # < \ # # * # +~ ] ` ! # # + ^ ! ~ + ! ! # < ! ~ ! # # # # # < # ! # ! ! # # ` ! ` < _ ! # ! < " <" # <" # ` < # " ! ! # # # # # ~ ] # > ~! ! # ~ # 103 _ <*` - \ @ %\Q -% -z\ \- ~ % @ # # # ! # ! | < # # Z Q ? ] ! \ ~! !~~ ] ! | !!~ ! ! Q " \/ ` ! ~ < ~! ! > ` !~ ! ! !~ ~!~! Q ? " !~ !! ~ Q ? ! ` ! #! # < ! _ ! * ! \ = \ ! ! ! > ! # < ~! ! ! ! ` ! \# # # ~ $ $ ! # = ! ! # # < ~! ! \# # # # 104 _ <*` - \ @ %\Q -% -z\ \- @ ~ $ ` ! ! ! \# # = < ! > # ~ $ R ` # ! _ ! > # ~ $ < ~! ! ! ! ~# * ! # ! ! ` + < ! # ! < ! # # ` + # ! # < ! ! ! # & * 105 _ <*` - \ @ %\Q -% -z\ \- @ +~ Q Q Q Q @ # ] ! ! # ! # " # < # ~ ? \ } Q " = ] ` + < ~! | $ " z &X * - z " """ ~!~ ! # ~ #~ = " < ! ! ~# # * " << ! ! # # << ! ! # # << ! ! # !~ ! ` < * # [ $ $ ! # ] ! !~ ~# ] !~ ! # | ] ` ~ !! ~ # | | !~ !~ # ~~! ! + # # + ! / ! " ! = < # * < ! / # = < " # ] # ! * > < ] * # | ] ` \" ` ! ! # ~ !~ # 106 _ <*` - \ @ %\Q -% -z\ \- @ ~ $ $ ! # = ! ! # ` # ~ $ # # ` < # ~ $ ` # ~! # ~ $ ! ` # ` ! ` ` # & * 107 _ <*` - \ @ %\Q -% -z\ \- @ ~ " Q } Q " ` _ ` + < ~! | " z &X * \# # ! # \# # < " !~ # " ! # = ^ * < ! # \# # ! # " ! # * * ! > !~ ` >< * #~ [ $ % ~ ~ ] ! !~ _ ` ~! ! ~ ! ~ $ $ # # > #~ ~! # < ! # ~ $ # < # " * # < * # \# # < < * # ! " # 108 _ <*` - \ @ %\Q -% -z\ \- @ ~ " Q } Q " ~ $ # # # ~ $ ! ` # ` ! ` ` # ~ " >\# # # \# # ! # = ! # = ] ` ] ~! % z Q \ + \ + ! ! ~ # < + <\+ ~! ! # ! ~ ! # + + !! #~ ]\|_ ]\| !! ~# " ` ="` ! ! #~ + + ~! ! # ` ! ! ~ #~ | ! # ] ! # + =+ ~! # ~~! ! # 109 _ <*` - \ @ %\Q -% -z\ \- @ ` _ ` ] ~! % z Q \ + \ + ! !~~ # <+ ! # = " ="` ! # + ! # ]\| !~ # ! ~ # ]\| ! ~ # * ]\| !~ # ^ ]\| ! ~ # ! ~# ! ~ ! # ` _ ` # # ~! # = ] ` # & * 110 _ <*` - \ @ %\Q -% -z\ \- @ %~ " \] = ] ` # > # ! # ^ ` # ] ^ ` # ~! # - z + $ Q $ ! + \] & & " z " z ? & * $ * * & {~ ~ * & {~ ~ * & * =+ !~~ # > ! > ! ` ~!! # ! > ! > <\+ !~ # ~~ > ! > !~ ! ~! ! ~! ~ \~ $ # * ! ! # * ! ! # & * 111 _ <*` - \ @ $\ \ z + \ -% {-\ $-\% $\z\-{\ | R > ! ! ! ! - @ $ J @ ? - ] % { ? * = ! ! > > ~! ! ~ ! \ !~~ > > > !~~ > !~~ ^ ! ! ~! > ! ~ ! > > > = < ! ~! ~! > ! ! ! + @ * \ > ! ~ ! ! ! \ > ! ~ > > ! ~ ! > ! > > ! !~ ^ > ~ > > ~ ~~ " > < > ! ~ ! ! ! ! ! ~! ! ! ! ~ ! " " ` > !~ > > !~ > !~ _ < > > > > < > !~ > > !~ > !~ + > ^ ` # # { $ ! # = # < ! { " | ! = ! ~! ~ 112 _ <*` - \ @ $\ \ z + \ -% {-\ $-\% $\z\-{\ @ " > # < ! > { \ ` | " < ~~ = $ # | ! # ! ! # # " ~! # X \ Z + + " = +"= ~!! _*] ` ! ! ` ` ! ! _ _ ` ] _`] !~! _ !! ~ | !~!~ ~ < \ !~!~ ~ | ! ^ > & * 113 _ <*` - \ @ Q \ > ~! + \ + + % [ ? < " + !~ ! !~ ! !~ > ! ! ~! ! ! > ~! ! ` !! !~ ! ~! !~ ! ! ! < " + ~~!~ ! !! ~! ! ! ~ ! ! < " + " ! ! ~! ~! ! ! > ~!~~!~~ _ " ~!~ ! ! ! ! ! > ! ! ] ! !~ ! !~ !! > !~ ! < ! ! ! ! ~! > ! ! !~! ~!~! ! > ! ! ~ < " + ! !~! ~ ! ! ! ! > !~! ~ ! < + " ! ! ! ! ! !~ ! ! ! _ " !! ! ! ! ~!~ ! ! !~ ] !! ! ! !~ ! ! ! < ~!! ! ! ~! > !~! ~ !~!~ !~ ~! ! > !~ ! < + ! ! !! ! ! !! < " + ! ^ ! ! ~! ! ! ! ! ? Z - ! !~~~! !~ ! ! ! ! !~ ! ! ~ 114 _ <*` - \ @ Q \ @ + \ + + % [ + @ < " + ~! ! !~ ! ! > ~! ! ` ~! ~! ~ ! ~! ! ! ! ! ~ ! < " + ~!! !! ! ! ! ! ! < " + " ! ! ! !~ ~! !! _ " ! ! ! ! ! !~ ! ! !! ] ! ! ! ! ~! ! !~ !~ < ~ ! ! ~ !~ ! !~ < " + ! ! ! ! ! ! ~! !! ! < + " ~!~! ~! ~! ! ! ! ! _ " !! ! ! ! ! ! ! !~ ] !! ! ! ~ !! ! ~!! < ! ! !~ ~! < + ! ! ! !! !~ ! ! ! !!~~! < " + ! ^ !~! ! ~ ! ! !~! ! ! !!! + @ Z - !! ! !! ~ ! !~ !! !! ! 115 _ <*` - \ @ Q \ @ + ? ` ! ! ~ | ! ! ` ! !~ = = !! ! + ] > = < !! + @ \ ! ~! \ ! ! ! ! ` ! ! = ! + ] > " > < !! + ! * " ` # * " # ! # # ! > # " ! ! ! ! ! ! # ~!! # ! # & * 116 _ <*` - \ @ - \$"{-% $\ \ z + \ Z Q X + \ Z $ - "\$ Z -% %z - \ $ Q @ ! # | | " ! <# ~! ! $ " = ! ~! \ ~! !~ \ ~!~ + _ ~! ! Q " ^ = ! ~! \ ! ! ~ \ ! !~ + _ ~! ! " " @ | " ! < ! # + ! !! | # _ ` ] ` ! !!# ~! ! ~! # ~ # < _ < _ + # & * 117 _ <*` - \ @ - \$"{-% $\ \ z + \ Z Q X + \ Z $ - "\$ Z -% %z - \ @ @ ! ! ! ! # |< ! # # # " # ` _ ` _ # ~! ! { ] - [ [ - [ ? $ ? \ \ " " " " " " = > > ! > > > ! > > ! ~! ~ > > > ! ~! ~ \ | ~ ! ! > ! ! > ! ! ~ > !! ~~ |< | !! > !~! > > > ! ! ~ ^ = ! ~! ! ~ ~ ! ! !~ ! !! ~! ! \ ] ! ~! ! ! > > > !! \ ] !~! ! ! > > > ! ~! \ ] ! ~! ~ ! > > > > ! ~! ~ > ! > ~! > > ~~! ^ ] ! > ~! ! > ! > ! ~! ! ! !~! ~ ! ! !!~ !~! !! ! !~ & * 118 _ <*` - \ @ \ \ > # !~! ~! # *` X \ Z ! ! ~ ! ! ~ ! ! ! ! ! ! # ? + @ < " ! > * ] ! ~ ! < + ! ! ! ~ !~ *` ~! ? + @ X \ Z > ~ > > ~ > > > > *`R ! > < | > ` *`R !~ > 119 _ <*` - \ @ -?@ \$ + ? - -% %\"\$$\% { " | -% -" | " $\ {$ \ > ~! # < ^ _ ` " _`]" # ^ ` # + \ + + % | $ X ? " ^ ` | " ~~! ~! ~ ! ! ! ! ~ ! ~! !! ^ ~! ! > !~ ! !~! ! ! + > ! > ! > > ! ! ! ! !! ~! ~ !~ ! ~ ! ! !~ ! ~ ~~ ! ! !~ ! \ ` + " ! ! ~!! ! ! !! > " ^ ` ~ ! ! ! ! !! ~~ ! ! !~ ! ! !~ ! !~~ ! ! !~!~ !~!~ < ! ! ! ! ! ! ! ! !!~ > _ ! > ! ~ ! ! _`]" ! !~ ~ ~ ! ! ! ! ! !~ ! ~ ! _`]" ! ! !~! > ! !~ > ? @ ! ~! ~! ! ! ! ! ! ! ~ ! + @ " ^ ` | " ~! ! ! ! ! ! ~ !~ ! ! ! | ~!~!~~ > ! !~ ! ! !~ ! !~~ ! > !~~ ! > > ~ ~!! ! ! !~ ! ~~~! ! ! ! \ ` + " ! ! !~! ~! ! ! ! > + Z - Q ! ~ ! ! ~!! ! ! ~! ~ ! ! ! < ! ! ~ ! ! ~ !~!~ ~! ! < | ! > ! ~ ! !~ ` ! > ! ! > \ | ! ! ! ! ! _`]" ~ !~ ! !~ !~ !! ~ ! ! ~! ! _`]" ! ! ! > ! ! > + @ @ ~ ! ~! ! ! !! ~ ! ! ~! ! 120 _ <*` - \ @ -?@ \$ + ? - -% %\"\$$\% { " | -% -" | " $\ {$ \ @ + _ | | ` # # ! ! # ] # + _ | ~! ? + @ % J $ @ Q /` ` < * + ~! ! > ~! ! < > > > ] > > > =] ` < ~! ! ! !~! ~ ] !~! ! ~! ! ! + _ | ~ !! ~!~ ! ! ! ? + @ % J $ @ Q /` ` ] > =] ` < ] !~~!~~ ! ! ~ ! ! + | !~~ !~ ! ! ~ ! ! ~ & * 121 _ <*` - \ @ -?@ \$ %\+ J # | # ! < | ` | # _ | # # # # ? @ + + % | $ + $ $ X ^ >< ~# > | " # > ~ ! ! > ~ ! ! > < \ | ~# > " # ! ! > ! ~! ! ! " \ " # ~!! > > ~!! > \ | ~# > " ~# ! ! > > ! ! > # > ^ >< " # !~! > !! ! ! !! | # > | " # ~ ! ! > !! ~! ! !! < \ | # > " # ! ! > > ! ! > " \ | # > " # ! ! > > ! ! > _ | " # ! ! > > ! ! > 122 _ <*` - \ @ -?@ \$ %\+ > + + % | $ $ X ? @ $ + \ | # > " # ! ! > ~! ! ~!! ~! ! | # > " # ! ! > ! !! ! = ] | " # ! ! > ! ! ! 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" " ! ! # _ # ` ! ^ ` | ! ! ` ! ` # # ! * " " ~! ~! ~!! ~! ~! " # < ~! ! ! ! ~# " # ] " " # 134 _ <*` - \ @ - -?\- + \ -% \- @ + < < < < # ` ! ^ # > ! !! < !~! < ` " ! ! ! < ` " # < # + ! !~ ! # ~! _ * # < > # ~ > # ! * ~! | ^ # > ! # #! * ] < * # ! ~! ! ! # < ! ! ! ~! ! ! ! # # > > > ! # > ~! ! # ! ! ! ~! ! ~! # ! ! & * 135 _ <*` - \ @ - -?\- + \ -% \- @ < ~! ! _ = !~ !~ \ ` > " ! ~! ! ! \ ~! ! ` ~!~ ! + ` ! ~! = ` ! ! ! ? " ~~! ~! \ !~ ! \ ! ~! ` ! !~ \ " ! ! ! ! ! > # ] ! ! # _ ~! ! = ! ~ | < |< ! ^ = !~ ! = ] ! ~! - \ @ $ - ?\ \- R > = # > = < ` + ` R ] R ! = ! ` / ` _ \ = * ] < ` + + 136 _ <*` - \ @ $ - ?\ \- @ ] # R # ? = ! ~! # ! ~! # Q % # # R ! # R # Q # # | R R # R # # " ! + R ! + ! # ^ > # ~! # \] | R Z ? Z Q * * ! ! ! ! # ` _ * * # { * # ~~ | \ < ! ! # < \ > > # ] ^ _ * ` \ \ > + # ? # ] ! ! \ \ # # 137 _ <*` - \ @ $ - ?\ \- @ \ Q # " " > < < ! ] * < ! ^ # ^ ` ! > ! ! > # ^ ` # = < + / + > # > # #! # # # % > > # % > ~ # < > ~ ! # ] # - \ @ \$ Q @\ Q X \- +\-\" & Q\+ * =< " ^ # ! ) * ! > # < =<<`> > # $ ` > " ` > # ` # ! ! R # # ! ! # * * # 138 _ <*` - \ @ \$ Q @\ Q X \- +\-\" & Q\+ * @ > ! " # > ! ! _`]" _`]" # < ~! ! ! ~ > # ! ~! ! _`]" ! ! ! ! ! # | > > > # * & + * /0+01 R _`]" ! ! R _`]" " X \ ^ ~! ! ~!~ !~ < \ < ! ! !! ~ ! ! < | ! ! !! ^ _`]" _ ^__ ! !~! < ^__ ! ! ] < _`]" <_ ! ! ! ! ~ < _`]" ~!~ ! ~ ~! ! ^__ ~!! !!~ ^__ " ! ! !! ~ ^__ ] !! ~ !! & * 139 _ <*` - \ @ \$ Q @\ Q X \- +\-\" & Q\+ * @ R _`]" ! _`]" ! _`]" Q Q\+ - Q\+ " X Q\+ ~ !~! ! !~ # ! ! ~ ! ! ! !~ # ! !~~ ~ ! ! !~ ! # ! ! ~ ~ ! ! ~!! # ! ! ~ ! ! ~!~ ! ~ # !! ~ ~ ! ! ~ ~! ! # !! " " Q < ~! ! ! ! !! ! ! !# ! ~! ~ > ! # # ` ~ | # ' < # ] ! ! # < # ` ! ! # > ! > # > ! R _`]" # " _`]" ! # ! R > # # ! # > ! # > ~! # ` ~> ~# # 140 _ <*` - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ " $\" ? \$ -% Q \ "" \$ } Q\- - "{-% $ Q >> ` /` _ ` = ] =] ` # # =< " ^ # # ! ! ! >> ` _ ` = ] ` # " # # ] # # ~! ! ! # + # ` _ ` # < + ~ ] ! ! # ^ = ] ` # " Q } Q " Q % ] > # > # / ` _ ` > > + | # < ! ` ` ` ! ` ` # > ! ` ` # Q / ` _ ` > " # < ! + ! ` + # " # # ` _ ` ! > # 141 _ <*` - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ " $\" ? \$ -% Q \ "" \$ } Q\- - "{-% @ Q ` _ ` ~! ! " Q } Q " < !~ | " ! * ~!~ ~ + Q # ` ! # ! ` + ! ! ! # ] _ ! ! < \ ! ! > < \ # > > > # ] _ ! ! # ~# ! # _ ! ~# % $ Q &%$ Q* * + | _ ` +|_` # * +|_` +|_` ~ # + +|_` ! +|_` # 142 _ <*` - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ " $\" ? \$ -% Q \ "" \$ } Q\- - "{-% @ $ ] _ ! ! +|_`# +|_` _ ! ! ! " # ^ # ! ! > ! ! +|_` # < ~! ! +|_` ~! ! # &* Q < ~ # ~ ! ! # _ # ~ ~ _ ~! # ] ~ ~! ! ~ # * # ` > > !~! ~! # " # # ] # ` _ ` # # ` _ ` ~ # ] | ! # * +|_` +|_` # # ` ` ~! ! ! ! # > # ] ~! ! ! ~# ~! ~ ! !# 143 _ <*` - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ " $\" ? \$ -% Q \ "" \$ } Q\- - "{-% @ " # ! ! ! ! ! # ~! # ] ^ ^ ` _ ` # ~ ] ! ! # - Q ~! _ ! ~# ` _ ` # ~ ] ! ! # & * 144 _ <*` - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ " $\" ? \$ -% Q \ "" \$ } Q\- - "{-% @ ` _ ` z + _ ! ~ ` _ > ~ ] + + ! ~ < * ] < ^ * ` * |`> = " < ` = # < | ~# < ] < + < * < | | # ` # $ $ $ " J # ~ # # # ~ # # " J # ~ # # # ~ # # Q J # ~ # # # ~ # # Q J # ~ # # # ~ # # @ \] $ $ ` ` # > # ! ~#># ` ` >> < \ # > ` # ! ! # ~! ! # > # # 145 _ <*` - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ " $\" ? \$ -% Q \ "" \$ } Q\- - "{-% @ % $ # # # " ! # ! > ! =< " ^ # # # ! ~# # ~# /` * " > = | ~! # - Q ^ ` ` ` _ # =< " ^ # + ] ~! &% * Q " - Q - Q Q & * & * & *@& * " | ~! ~ ! !~ ! ! ~!~ ! ~!! ! ! > ! ! ` ! ~! > ! ~! + " ] < ] > > > < > > > ] > ! !~ ! !~ ] > ! ! ! ! > !~! ~ !~! ~ ^ > ! ~! ! ~! | < +|_`! `|<< ~ < ~!~!~ ~!~!~ > " ` ! | ] !~! !~! > < ] > !~ ! !~ ! _ > !~ ~ !~ ~ ^ ~!! ~ ! ! !~~! " ~! ! ! ! !! ! !!~ 146 _ <*` - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ " $\" ? \$ -% Q \ "" \$ } Q\- - "{-% @ ! # ! > > # > > # % $ &~ * &~ * &~ * ^ ` ! ~! !!~ ! !~ Q \] { ? + - ~ ~! ! ! ! % J J $ + _ =< " ^ # + _ | > + > > + > > ! ! ~ ! ! + _ ~! ~! ! + | > + > > + > + ~! ^ ! ! ~ + _ | ! ! > ~! # 147 _ <*` - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ " $\" ? \$ -% Q \ "" \$ } Q\- - "{-% @ " X } $ % J J X \ Z > > > > - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% ? \ } Q " Q ` = ] | # # # # ! ! ! ! # * # # < # # Q % ] > # " > # = ] ` ` + < > > > _ ! ! # = ] ` ` + " > > > _ ! ! # + " ` # + | # 148 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ = ] ` ` ! > > ! # " # # + ! # # < _ ! ! # ` > < | # Q = ] ` ` + < "# > " # * ! ! _ # Q = ] ` ? \ } Q " < !~~ | " " ! " * ! + Q _ ! ! ! # " # # # # < ~ # _ ! ! ! # # # ] _ ! ! ! # # ` > # 149 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ % $ Q &%$ Q* * + | _ ` +|_` # + +|_` +|_` # ! ! +|_` ! +|_`! " # $ ] _ ! ! # < +|_` +|_` +|_`! # +|_` _ ! ! ! " # +|_` # &! " +|_` > < _< _ ! ! # _ ! ! # # +|_` # < ! +|_` ! ! # # " # ! # # ~! ! !# ` ` ! !~!~# & * 150 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ Q &Q Q $ * # ! # # < # # ! # # ` ! # = ] ` # ] ] ] ] * ] ~ | ] ^ # $ $ &Q Q $ * ~! ! > ! ! # # > ! ! # $ &Q Q $ * > # &Q Q $ * # $ &Q Q $ * ~ =< " ^ # # 151 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ - Q &Q Q $ * =< " ~! ! ! ! ` !! ` ^ ` ~!~ ! ^ ` ! ! ` ^ ` ` ` # &Q Q $ * = ] ` z + ! * + ! ` _ > ~ ] < < ! < * ] < ^ * ` * |`> = << ` = # ] < # < * > < | | # ` # ] _ > > # < > + < # < > + " # = > 152 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ &Q Q $ * ` # ~! # @ \] $ $ &Q Q $ * > < > # ! > > ! # > # " _ ! ! @ @ \] \] - $ $ $ $ \/ \# # ] # # \# # ] #~ # ^ >\# # ] + # # ] * ] # # " ] + " > = # # | ] " * # # % $ &Q Q $ * # # " # " ! # ! > # 153 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ - Q &Q Q $ * ^ ` = ] ` ` # =< " + ] ~! &% * Q " - Q - Q Q & * & * & *@& * " | _ ! ! ! ! ! ! ! ~! ! ! > ! ! ` ~! ! > ~! ! + " ] < ] ! ~ > ! ~ < ! ! > ! ! ] > ! ~! ! ~! ] > ! ! ^ > ~! ! ~ ~! ! ~ " ` !! !! > < ] > ! ! ^ ! ! !~ ! !! " | ~! ! !! ~!~ ! ! ! - Q % $ &Q Q $ * = ] ` ` ! # ! > # > # % $ &~ * &~ * &~ * ^ ` ! ! ! ! ! !~ 154 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ - Q &\ $ * = ] ` ~! ! ~! # ^ ` =< " ! ~! " X \ Z Z ` ! ! ! !~~ ` ^ ` ! ! ! ! ^ ` !~! ~!!~~ ` ^ ` ` ` # ! > ! ^ # - Q &\ $ * ` ! ` ^ ` ! ^ ` * ` ! &% * Q " - Q - Q Q & * & * & *@& * " | _ ! ! ! * + ! ! ! ! !~! | ! ! > ! ! ` ! ! > ! ! + " ] < ] !~! > !~! < !! > !! ] > ! ! ! ! ] > ! ! ^ > ~ ! ! ~ ! ! " ` ! ! ! ! > < ] > ~! ! ~! ! ^ ~ ! ! ! ! ~! " | ~! ! ! * + ! !~~ ! ! ~!!~~ 155 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ - Q % $ &\ $ * ! # ! > # > # % $ &~ * &~ * &~ * ` ! ! ~ ! !~~ ~~! ! ` ^ ` ! ! ! ! ! ! ^ ` !! ~ ~!!~~ ! ! Q \] % J J $ { ? + - ~ ~! ! ! ! # + _ =< " ^ # % % J J + " < ] ] * + ! > ! ! < * + ! !~! ~ > ~ ^ + " ] < ] ` * + ! ! ! > ! !~~ ! ! ! % J J % Q + \ + $ $ Q = ~# # !~! ! ! ! ! < = ~# # !! !~! ~ ! ! < = # # !~! ~ ! ! ~! ! ! ~! ! 156 _ <*` - \ &+* @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ ?\-\$ \ Q X\\ } Q\- - ${ "{-% @ < X \ Z ! ! ! ~! ! > > - \ & * @ \ Q X\\ $\ $\ \- -% Q\- - Q - @ + - -? \ \- " " %{ $X -\ Q - + - -? \ \- " " %{ $X -\ Q - Q\- - ${ "{-% \Q \ +\$ Z " ? \ } Q Q } Q Q " " " \ ~ ! ~ ! ! ~ + _ " ~!~! ! ! ~ !~ !~ ] !~! !~ !~ ! ! ! !~ | ] > ~ !! ~ ~ !! ~ ! ~ !! ~ ~~! ! !~ ! ! ~~ < | ! ^ ! ! !~~ !~ ! ~ + | ! ~! ! ! ~!! ` ! > ! < ! > ! 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orm of Continuing Disclosure Agreement [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX E FORM OF CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the "Disclosure Agreement") dated September 28, 2016 is executed and delivered by the City of Tampa, Florida (the "Issuer") in connection with the issuance by the Issuer of its $______Sales Tax Refunding and Improvement Revenue Bonds, Series 2016 (the "Bonds"). The Bonds are being issued pursuant to Resolution No. 2001-1209 adopted by the City Council of the Issuer (the “City Council”) on October 4, 2001, as amended and supplemented from time to time, and as particularly amended by Resolution No. 2006-1423 adopted by the City Council on November 9, 2006 and Resolution No. 2010-805 adopted by the City Council on September 16, 2010, and as supplemented by Resolution No. 2016-684 adopted by the City Council on August 25, 2016 (collectively, the "Resolution"). SECTION 1. PURPOSE OF THE DISCLOSURE AGREEMENT. This Disclosure Agreement is being executed and delivered by the Issuer for the benefit of the holders and Beneficial Owners (defined below) of the Bonds and in order to assist the Participating Underwriters in complying with the continuing disclosure requirements of the Rule (defined below). SECTION 2. DEFINITIONS. In addition to the definitions set forth in the Resolution which apply to any capitalized term used in this Disclosure Agreement, unless otherwise defined herein, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean the Issuer, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "EMMA" shall mean the Electronic Municipal Market Access web portal of the MSRB, located at http://www.emma.msrb.org. "Event of Bankruptcy" shall be considered to have occurred when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governmental 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 Obligated Person. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. E-1 "MSRB" shall mean the Municipal Securities Rulemaking Board. "Obligated Person" shall mean any person, including the Issuer, who is either generally or through an enterprise, fund, or account of such person committed by contract or other arrangement to support payment of all, or part of the obligations on the Bonds (other than providers of municipal bond insurance, letters of credit, or other liquidity or credit facilities). "Participating Underwriters" shall mean the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean each entity authorized and approved by the Securities and Exchange Commission from time to time to act as a repository for purposes of complying with the Rule. As of the date hereof, the Repository recognized by the Securities and Exchange Commission for such purpose is the MSRB, which currently accepts continuing disclosure submissions through EMMA. "Rule" shall mean the continuing disclosure requirements of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Florida. SECTION 3. PROVISION OF ANNUAL REPORTS. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than April 30 following the end of the Issuer's previous fiscal year, commencing with the report for the fiscal year ended September 30, 2016, provide to any Repository in electronic format as prescribed by such Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date provided, further, in such event unaudited financial statements are required to be delivered as part of the Annual Report in accordance with Section 4(a) below. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5. (b) If on the fifteenth (15th) day prior to the annual filing date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Issuer by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Issuer shall either (i) provide the Dissemination Agent with an electronic copy of the Annual Report no later than two (2) business days prior to the annual filing date, or (ii) instruct the Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within the time required under this Agreement, state the date by which the Annual Report for such year will be provided and instruct the Dissemination Agent that a failure to file has occurred and to immediately send a notice to the Repository in substantially the form attached as Exhibit A. E-2 (c) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of any Repository; and (ii) if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided and listing any Repository to which it was provided. SECTION 4. CONTENT OF ANNUAL REPORTS. The Issuer's Annual Report shall contain or include by reference the following: (a) the audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Issuer's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement dated ______, 2016 (the "Official Statement"), and the audited financial statements shall be filed in the same manner as the Annual Report when they become available; and (b) updates of the financial and operating data set forth in the Official Statement, including, but not limited to, information under the captions " HISTORICAL COMMUNITY INVESTEMENT TAX COLLECTIONS AND DISTRIBUTIONS” and “HISTORICAL COVERAGE OF DEBT SERVICE”. The information provided under Section 4(b) may be included by specific reference to documents, including official statements of debt issues of the Issuer or related public entities, which are available to the public on the Repository's Internet Web site or filed with the Securities and Exchange Commission. The Issuer reserves the right to modify from time to time the specific types of information provided in its Annual Report or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the Issuer; provided that the Issuer agrees that any such modification will be done in a manner consistent with the Rule. SECTION 5. REPORTING OF SIGNIFICANT EVENTS. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds. Such notice shall be given in a timely manner not in excess of ten (10) business days after the occurrence of the event, with the exception of the event described in number 15 below, which notice shall be given in a timely manner: 1. principal and interest payment delinquencies; 2. non-payment related defaults, if material; 3. unscheduled draws on debt service reserves reflecting financial difficulties; E-3 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 or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; 7. modifications to rights of the holders of the Bonds, if material; 8. Bond calls, if material, and tender offers; 9. defeasances; 10. release, substitution, or sale of property securing repayment of the Bonds, if material; 11. ratings changes; 12. an Event of Bankruptcy or similar event of an Obligated Person; 13. the consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, 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; 14. appointment of a successor or additional trustee or the change of name of a trustee, if material; and 15. notice of any failure on the part of the Issuer to meet the requirements of Section 3 hereof. (b) The notice required to be given in paragraph 5(a) above shall be filed with any Repository, in electronic format as prescribed by such Repository. SECTION 6. IDENTIFYING INFORMATION. In accordance with the Rule, all disclosure filings submitted in pursuant to this Disclosure Agreement to any Repository must be accompanied by identifying information as prescribed by the Repository. Such information may include, but not be limited to: (a) the category of information being provided; (b) the period covered by any annual financial information, financial statement or other financial information or operation data; E-4 (c) the issues or specific securities to which such documents are related (including CUSIPs, issuer name, state, issue description/securities name, dated date, maturity date, and/or coupon rate); (d) the name of any Obligated Person other than the Issuer; (e) the name and date of the document being submitted; and (f) contact information for the submitter. SECTION 7. TERMINATION OF REPORTING OBLIGATION. The Issuer's obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds, so long as there is no remaining liability of the Issuer, or if the Rule is repealed or no longer in effect. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5. SECTION 8. DISSEMINATION AGENT. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Agreement. The initial Dissemination Agent shall be the Issuer. SECTION 9. AMENDMENT; WAIVER. Notwithstanding any other provision of this Disclosure Agreement, the Issuer may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the holders or Beneficial Owners of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of holders or Beneficial Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or Beneficial Owners of the Bonds. Notwithstanding the foregoing, the Issuer shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being E-5 presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 11. DEFAULT. The continuing disclosure obligations of the Issuer set forth herein constitute a contract with the holders of the Bonds. In the event of a failure of the Issuer to comply with any provision of this Disclosure Agreement, any holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Agreement; provided, however, the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer to comply with the provisions of this Disclosure Agreement shall be an action to compel performance. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Resolution. SECTION 12. DUTIES, IMMUNITIES AND LIABILITIES OF DISSEMINATION AGENT. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. [Remainder of page intentionally left blank] E-6 SECTION 13. BENEFICIARIES. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Dated as of September 28, 2016 CITY OF TAMPA, FLORIDA By: Mayor E-7 EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Tampa, Florida Name of Bond Issue: $______Sales Tax Refunding and Improvement Revenue Bonds, Series 2016 Date of Issuance: September 28, 2016 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Sections 3 and 4(b) of the Continuing Disclosure Agreement dated as of September 28, 2016. The Issuer anticipates that the Annual Report will be filed by ______. Dated:______CITY OF TAMPA, FLORIDA By: Name: Title: E-8 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] CITY OF TAMPA, FLORIDA • SALES TAX REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 2016