The Metropolitan District Hartford County, Connecticut
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OFFICIAL STATEMENT DATED JUNE 19, 2014 NEW ISSUE In the opinion of Bond Counsel, based on existing statutes and court decisions and assuming continuing compliance with certain covenants and procedures relating to requirements of the Internal Revenue Code of 1986, as amended (the “Code”), interest on the Notes is excludable from gross income for federal income tax purposes and is not treated as an item of tax preference for purposes of computing the federal alternative minimum tax. Interest on the Notes is, however, includable in adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. In the opinion of Bond Counsel, based on existing statutes, interest on the Notes is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates, and is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the federal alternative minimum tax. See “Tax Matters” herein. THE METROPOLITAN DISTRICT HARTFORD COUNTY, CONNECTICUT $15,000,000 GENERAL OBLIGATION BOND ANTICIPATION NOTES, SERIES E BOOK-ENTRY ONLY DATED DUE June 27, 2014 March 23, 2015 Amount Coupon Yield CUSIP1 $15,000,000 0.750% 0.100% 416489PC0 Underwriter TD SECURITIES (USA) LLC $40,000,000 GENERAL OBLIGATION BOND ANTICIPATION NOTES, SERIES F BOOK-ENTRY ONLY DATED DUE June 27, 2014 December 5, 2014 Amount Coupon Yield CUSIP1 $40,000,000 1.125% 0.082% 416489PB2 The Notes are not subject to redemption prior to maturity as more fully described herein. The Notes will be issued by means of a book-entry-only system and registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Notes. Purchasers of the Notes will not receive certificates representing their ownership interest in the Notes. Principal of, and interest on the Notes will be payable by the District or its agent to DTC or its nominee as registered owner of the Notes. Ownership of the Notes may be in principal amounts of $1,000 or integral multiples thereof. See “Book-Entry-Only Transfer System” herein. The Notes will be general obligations of the District and the District will pledge its full faith and credit to pay the principal of and interest on the Notes when due. Unless paid from other sources, the Notes are payable from general tax revenues from member municipalities. The District is authorized to levy unlimited taxes upon the City of Hartford and the Towns of Bloomfield, East Hartford, Newington, Rocky Hill, West Hartford, Wethersfield and Windsor (the “Member Municipalities”). See “Security and Remedies” herein. U.S. Bank National Association, Corporate Trust Services, 225 Asylum Street, 23rd Floor, Hartford, Connecticut will act as Certifying Agent, Registrar, Transfer Agent and Paying Agent for the Notes. The Notes are offered for delivery when, as and if issued, subject to the approving opinion of Hinckley, Allen & Snyder LLP, Bond Counsel, of Hartford, Connecticut, and Finn Dixon & Herling LLP, Bond Counsel, of Stamford, Connecticut. It is expected that delivery of the Notes in book-entry-only form will be made to DTC in New York, New York on or about June 27, 2014. This cover page contains certain information for quick reference only. It is NOT a summary of these issues. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. ___________________________ 1 Copyright, American Bankers Association. CUSIP® is a registered trademark of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the District and are included solely for the convenience of the holders of the Notes. The District is not responsible for the selection or use of these CUSIP numbers, does not undertake any responsibility for their accuracy, and makes no representation as to their correctness on the Notes or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Notes as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Notes. The Series F Notes were purchased by Morgan Stanley & Co. LLC through a competitive bid process. The Financial Advisor to the District has provided the following sentence for inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the District and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. TABLE OF CONTENTS Part I – Information Concerning the Notes Note Issue Summary Property Tax Levies and Collections ........................... 35 I. Note Information Ten Largest Taxpayers ................................................. 38 Introduction .................................................................. 1 Equalized Net Grand List ............................................. 41 Description of the Notes .............................................. 1 VII. Financial Information Book-Entry-Only Transfer System .............................. 2 Fiscal Year ................................................................... 43 DTC Practices .............................................................. 4 Basis of Accounting and Accounting Policies ............ 43 Security and Remedies ................................................ 4 Budgetary Procedures .................................................. 43 Taxes – Levy, Apportionment, Collection ................... 4 Debt Administration Policy ........................................ 44 Qualification for Financial Institutions ........................ 5 Annual Audit ................................................................ 44 Availability of Continuing Disclosure ......................... 5 Pension Plan ................................................................. 44 Authorization and Purpose ........................................... 5 Other Post Employment Benefits ................................. 45 Use of Note Proceeds ................................................... 6 Investment Policies and Practices ................................ 46 Ratings .......................................................................... 8 District Cash Management Investment Policy............. 46 Tax Matters .................................................................. 8 Risk Management ........................................................ 47 Considerations for Noteholders ................................... 9 Compensated Absences ............................................... 47 II. Legal and Other Information Revenues and Appropriations ...................................... 48 Litigation ...................................................................... 11 Sources of Funds .......................................................... 49 Underwriter .................................................................. 11 General Fund Revenues and Expenditures-District .... 50 Closing Documents ...................................................... 11 Analysis of General Fund Equity - District ................. 50 Concluding Statement .................................................. 12 History of Member Municipality’s Taxation ............... 51 Water Utility Fund Revenues and Expenditures ......... 52 Part II – Information Concerning The Metropolitan District Hydroelectric Fund Revenues and Expenditures ........ 52 I. The Issuer Mid-Connecticut Project Fund Revenues and Description of the District ............................................ 14 Expenditures.............................................................. 53 Organizational Chart .................................................... 15 General Fund Revenues and Expenditures – The District Board ........................................................ 16 Member Municipalities ............................................. 54 Distribution of Commission Membership ................... 16 Analysis of General Equity – Member Powers and Responsibilities of the District Board ...... 16 Municipalities............................................................ 54 Administration .............................................................. 16 VIII. Debt Summary District Chairs and District Officials ........................... 17 Principal Amount of Indebtedness ............................... 62 District Employees ....................................................... 17 Clean Water Fund Program ......................................... 63 District Employees Bargaining Units ......................... 17 Drinking Water State Revolving Fund Program ......... 63 District Functions ......................................................... 17 Annual Bonded Debt Maturity Schedule ..................... 64 II. Water Pollution Control Overlapping and Underlying Net Debt ........................ 66 Facilities for Sewer Service ......................................... 19 Debt Statement ............................................................