Official Statement Dated March 15, 2016
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OFFICIAL STATEMENT DATED MARCH 15, 2016 Rating: See “Rating” herein. Moody’s Investors Service, Inc.: Aaa New Issue In the opinion of Locke Lord, LLP, Bond Counsel, based upon an analysis of existing law and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986 (the “Code”). Interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Under existing law, interest on the Bonds is exempt from Massachusetts personal income taxes, and the Bonds are exempt from Massachusetts personal property taxes. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds. The Bonds will not be designated as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code. See “Tax Exemption” herein. TOWN OF BROOKLINE, MASSACHUSETTS $24,810,000 GENERAL OBLIGATION MUNICIPAL PURPOSE LOAN OF 2016 BONDS DATED DUE Date of Delivery March 1 (as shown below) The Bonds are issuable only in fully registered form without coupons and, when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in denominations of $5,000 or any integral multiple thereof. (See "Book-Entry Transfer System" herein.) Principal of the Bonds will be payable March 1 of the years in which the Bonds mature. Interest on the Bonds will be payable March 1 and September 1, commencing September 1, 2016. Principal and semiannual interest on the Bonds will be paid by U.S. Bank National Association, Boston, Massachusetts, as Paying Agent. So long as DTC or its nominee, Cede & Co., is the Bondowner, such payments will be made directly to such Bondowner. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants and Indirect Participants, as more fully described herein. The Bonds are subject to redemption prior to their stated maturity dates as described herein. An opinion of Bond Counsel will be delivered with the Bonds to the effect that the Bonds are valid general obligations of the Town of Brookline, Massachusetts, and that the principal of and interest on the Bonds are payable from taxes that may be levied upon all taxable property in the Town, without limitation as to rate or amount, except as provided under Chapter 44, Section 20 of the General Laws, with respect to that portion of the principal and interest payments that the Town has voted to exempt from the limit imposed by Chapter 59, Section 21C of the General Laws, and subject to the limit imposed by Chapter 59, Section 21C of the General Laws with respect to that portion of principal and interest payments the Town has not voted to exempt from that limit. ________________________________________ MATURITIES, AMOUNTS, RATES, YIELDS AND CUSIPS Due Principal Interest Cusip Due Principal Interest Cusip March 1 Amount Rate Yield 113745 March 1 Amount Rate Yield 113745 2017$ 1,010,000 4.00 % 0.48 % Y80 2030 685,000$ 4.00 % 2.40 % 2D4 2018 995,000 4.00 0.65 Y98 2031 700,000 4.00 2.48 2E2 2019 1,310,000 4.00 0.81 Z22 2032 435,000 3.00 2.80 2F9 2020 1,665,000 4.00 1.00 Z30 2033 450,000 3.00 2.87 2G7 2021 1,680,000 4.00 1.16 Z48 2034 460,000 3.00 2.93 2H5 2022 1,685,000 4.00 1.28 Z55 2035 475,000 3.00 3.00 2J1 2023 1,695,000 4.00 1.49 Z63 2036 490,000 3.00 3.03 2K8 2024 1,705,000 4.00 1.63 Z71 2037 505,000 3.00 3.08 2L6 2025 1,715,000 4.00 1.80 Z89 2038 520,000 3.00 3.12 2M4 2026 1,720,000 4.00 1.94 Z97 2039 535,000 3.00 3.16 2N2 2027 1,285,000 4.00 2.00 2A0 2040 550,000 3.125 3.20 2P7 2028 1,290,000 2 .00 2.22 2B8 2041 570,000 3.25 3.25 2Q5 2029 680,000 2 .25 2.35 2C6 __________________________________ The Bonds are offered subject to the final approving opinion of Locke Lord LLP, Boston, Massachusetts, Bond Counsel, as aforesaid, and to certain other conditions referred to herein and in the Notice of Sale. FirstSouthwest, a division of Hilltop Securities Inc., Boston, Massachusetts LLC (see “Financial Advisory Services of FirstSouthwest, a division of Hilltop Securities Inc.” herein) has acted as Financial Advisor to the Town, with respect to the Bonds. The Bonds in definitive form will be delivered to DTC, or its custodial agent, on or about March 29, 2016, against payment to the Town in federal funds. RAYMOND JAMES & ASSOCIATES TABLE OF CONTENTS Page Page SUMMARY STATEMENT 3 Initiative Petitions 27 NOTICE OF SALE 4 Community Preservation Act 27 OFFICIAL STATEMENT: TOWN FINANCES: The Budget and Appropriation Process 28 THE BONDS: Operating Budget Trends 28 Description of the Bonds 8 Capital Improvements Program 29 Redemption Provisions 8 Revenues 29 Notice of Redemption 8 School Building Assistance Program 30 Record Date 8 Federal Aid 31 Book-Entry Transfer System 9 Local Options Meals Tax 32 Authorization of the Bonds and Use of Proceeds 10 Water and Sewer Rates and Services 32 Principal Maturities by Purpose 11 Annual Audits 32 Plan of Refunding 11 Financial Statements 32 Verification of Mathematical Computations 11 Combined Balance Sheets - Fiscal Year Ending: Sources and Uses of Bond Proceeds 12 June 30, 2015 33 Tax Exemption 12 June 30, 2014 34 Security and Remedies 13 June 30, 2013 35 Opinion of Bond Counsel 15 Comparative Statement of Revenues and Rating 15 Expenditures (General Fund) 2011-2015 36 Financial Advisory Services of FirstSouthwest, Undesignated/Unassigned General Fund Balance 37 a Division of Hilltop Securities Inc. 15 Stabilization Fund 37 Continuing Disclosure 15 Liability/Catastrophe Fund 37 Investment of Town Funds 37 THE TOWN OF BROOKLINE, MASSACHUSETTS: Description 16 INDEBTEDNESS: Local Government 16 Authorization of General Obligation Bonds Principal Executive Officers 16 And Notes 39 Services 16 Debt Limits 39 Student Enrollments 17 Types of Obligations 39 Population 17 Trend in Revenue Anticipation Note Borrowing 40 Age 17 Direct Debt Summary 41 Labor Force, Employment and Unemployment Rate 17 Debt Ratios 41 Employment by Industry 18 Authorized Unissued Debt and Major Employers 18 Prospective Financing 42 Personal Income 18 Annual Debt Service as of June 30, 2015 42 Building Permits 19 Overlapping Debt 43 Housing 19 Contractual Obligations 43 Economic/Industrial Development 19 Retirement Systems 44 Schedule of Funding Progress 46 PROPERTY TAXATION: Brookline Contributory Reitrement System Tax Levy Computation 20 Funding Schedule 46 Assessed Valuation 21 Other Post-Employment Benefits 47 Classification of Property 21 Collective Bargaining 47 Major Taxpayers 22 LITIGATION 48 State Equalized Valuation 22 Tax Collections 22 APPENDIX A – AUDITED FINANCIAL STATEMENTS Overlay and Abatements 23 AS OF JUNE 30, 2015 Taxes Outstanding 24 Sale of Tax Receivables 24 APPENDIX B – PROPOSED FORM OF LEGAL OPINION Taxation to Meet Deficits 24 Tax Limitation 24 APPENDIX C – PROPOSED FORM OF CONTINUING Unused Levy Capacity 26 DISCLOSURE CERTIFICATE Pledged Taxes 26 Proposition 2 ½ 26 Tax Increment Financing for Development Districts 26 __________________________ The information set forth herein has been obtained from the Town and from other sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness. Any statements made in this Preliminary Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinion and not as representations of fact. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Preliminary Official Statement nor any sale of the Bonds described herein shall, under any circumstances, create any implication that there has been no change in the affairs of the Town of Brookline, since the date hereof. 2 SUMMARY STATEMENT The information set forth below is qualified in its entirety by the information and financial statements appearing elsewhere in the Official Statement. Date of Sale: Tuesday, March 15, 2016, 11:00 A.M. (Eastern Time). Location of Sale: FirstSouthwest, a Division of Hilltop Securities Inc., 54 Canal Street, 3rd Floor, Boston, Massachusetts 02114. Issuer: Town of Brookline, Massachusetts. Issue: $24,810,000 General Obligation Municipal Purpose Loan of 2016 Bonds, see "THE BONDS Book-Entry Transfer System" herein. Official Statement Dated: March 15, 2016. Dated Date of the Bonds: As of their date of delivery. Principal Due: Serially March 1, 2017 through March 1, 2041 as detailed herein. Purpose and Authority: Bond proceeds will be used to finance various capital projects and for refunding bonds in accordance with the Massachusetts General Laws as detailed herein. See “Authorization of the Bonds and Use of Proceeds.” Redemption: The Bonds are subject to redemption prior to their stated maturity dates as described herein. Security: The Bonds are general obligations of the Town, and the principal of and interest on the Bonds are payable from taxes that may be levied upon all taxable property in the Town, without limitation as to rate or amount, except as provided under Chapter 44, Section 20 of the General Laws, with respect to that portion of the principal and interest payments that the Town has voted to exempt from the limit imposed by Chapter 59, Section 21C of the General Laws, and subject to the limit imposed by Chapter 59, Section 21C of the General Laws with respect to that portion of principal and interest payments the Town has not voted to exempt from that limit.