April 28, 2020 Bay District Schools Board Book AGENDA BAY DISTRICT SCHOOL BOARD MEETING APRIL 28, 2020 BOARD MEETING – 1:00 P.M. – BOARD ROOM PUBLIC HEARING – 1:45 P.M. – BOARD ROOM EXECUTIVE SESSION – COLLECTIVE BARGAINING (immediately following School Board Meeting)
Call to order and invocation – Steve Moss, Chair Pledge of Allegiance – Bill Husfelt, Superintendent Revision 1
I. APPROVAL OF AGENDA
II. ORGANIZATION REPORTS
A. Association of Bay County Educators
B. Bay Educational Support Personnel Association
C. Bay Education Foundation
III. HEARING FROM THE PUBLIC
IV. LEARNING COMMUNITY NEWS
A. Board Members and Superintendent
B. District Staff
V. CONSENT AGENDA
A. Assistant Superintendent Teaching and Learning Services
1. Contracts/MOUs/Agreements 2020-2021
1
A. B. Human Resources and Employee Support Services
1. Request to Approve Personnel Recommendations/Out of Field Teachers – Page 1
2. Request Revision to the 19-20 District Approved List – Page 7
3. Request Revision to the 19-20 Salary Schedule – Page 13
4. Request Approval of the 2020-2021 Payroll Schedule – Page 9
B. C. Deputy Superintendent
1. Request Approval of Revision to 2020-2021 Staffing Formula - Page 36
2. Request Approval of Additional Units Allocation – Page 47
C. D. Business Support Services
1. Purchasing and Contracting – Page 50
2. Interim / Final Payment
2. 3. Financial Information – Page 52
a. Half Cent Sales Tax Collection Report – Page 60
b. Hurricane Michael Expense Report – Page 61
D. Operational Support Services
1. Request for Review and Approval of Plans – Page 100
VI. ADMINISTRATIVE RECOMMENDATIONS
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1. Lora Frowert, Northside Elementary Principal – Page 102
2. Ivan Beach, Deane Bozeman Principal – Page 103
3. Lisa Solots, Jinks Middle Assistant Principal – Page 104
VII. ACTION ITEMS
A. School Board Members and Attorney
1. Consideration of renaming the music room at Southport Elementary to honor Rhonda Hawley – Page 105
2. Resolution authorizing necessary action for the School Board to issue Series 2020 Certificate of Participation in an amount not to exceed $42M to finance the new school at Panama City Beach – Page 107
B. Recess for a meeting of the Bay Education Facilities Finance Corporation
C. Superintendent
1. 2020 Graduation Plan Recommendation – Page 108
D. Business Support Services
1. Property Insurance Renewal 2020-2021
D. E. Human Resources and Employee Support Services
1. Request to Advertise New/Revised Job Descriptions – Page 109
E. F. Operational Support Services
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1. Bay High Change Order – Culpepper Construction – Page 111
2. Secured Entry Projects – Haney Technical and Bay High GMP – GAC – Page 114
3. Bay Base Secured Entry Projects GMP – Cedar Grove, Cherry Street and Northside Elementary – Page 118
4. Bid Results for Demo old Gym at Rutherford High School - Page 123
5. Mowat Middle School Media Center Hurricane Restoration GMP – Page 126
VIII. PUBLIC HEARING – 1:45 P.M.
A. Bay District Job Descriptions
1. Assistant to the Executive Director – Page 129
IX. EXECUTIVE SESSION – COLLECTIVE BARGAINING (Immediately following School Board Meeting)
4
April 28, 2020 1 BAY COUNTY SCHOOL BOARD APRIL 28, 2020 BOARD MEETING INSTRUCTIONAL PERSONNEL RECOMMENDATIONS
REQUEST TO ENTER INTO AN INSTRUCTIONAL CONTRACT WITH THE FOLLOWING PERSONNEL
NAME COST CENTER DEG CERTIFICATION ASSIGNMENT BEG DATE END DATE
Nunnally, Stacie Cedar Grove BA PreK/Primary Ed 3rd Grade 04-09-2020 05-29-2020
REQUEST FOR EMERGENCY PAID SICK LEAVE
Carter, Amberlyn Waller MA Speech Therapist Speech Therapist 04-22-2020 05-05-2020 Williams, Kristy Rosenwald BA PreK/Primary Ed Teacher on Special Assignment 04-14-2020 04-27-2020 Garrett, Kris Bay Base NA NA Site Manager 04-20-2020 05-01-2020
REQUEST FOR EMERGENCY FMLA EXPANSION
Carter, Amberlyn Waller MA Speech Therapist Speech Therapist 05-06-2020 TBD Williams, Kristy Rosenwald BA PreK/Primary Ed Teacher on Special Assignment 04-28-2020 TBD
RESIGNATION
Spencer, Michelle Merritt Brown MA Ed Lead/Elem Ed/ESE Assistant Administrator 05-29-2020 Hintz-Collins, Deana Lucille Moore MA Elem Ed/MGIC/ESE Autism 05-29-2020 Marcoux, Danielle Lucille Moore BA Elem Ed/Spanish 3rd Grade 05-29-2020 Williams, Lynda Lucille Moore MA Elem Ed Kindergarten 05-29-2020 Dorris, Amanda Northside BA Elem Ed 3rd Grade 05-29-2020 Schatzel, Nina Northside BA Elem Ed/ESOL 4th Grade 05-29-2020 Smith, Cody Northside BA Music Music 05-29-2020 Willard, Emily Northside BA ESOL/PreK/Primary Ed 3rd Grade 05-29-2020 Hayes, Heather Mosley BA English/Reading ELA 03-27-2020 Owens, Sanita Mosley BA MG Math/MGIC Math 05-29-2020 Smith, Allyson Bozeman MA Biology/MG Gen Sci/Social Sci Science 04-24-2020 Greene, Earnest Arnold BA Business Ed/Eng & Tech Ed Other 04-14-2020 Montgomery, Skyler Breakfast Point BA Elem Ed/ESOL/Reading 4th Grade 04-03-2020
REQUEST TO ENTER DROP
Bailey, Janet Breakfast Point MA Guid & Coun Guidance Counselor 07-01-2020 06-31-2025
April 28, 2020 2 DROP TERMINATION
NAME COST CENTER DEG CERTIFICATION ASSIGNMENT BEG DATE END DATE
Simmons, Martha Merritt Brown BA MGIC/Spec Lrn Disb Intervention 06-30-2020 Higgins, Lynn Cherry Street BA Early Childhood/Elem Ed 1st Grade 06-30-2020 Quilling, Constance Hiland Park BA Primary Ed 2nd Grade 06-30-2020
RETIREMENT
Black, Renee Hiland Park MA Elem Ed/Gifted 3rd Grade 06-30-2020 Bergstrom, Kelly Parker MA ESE ESE 05-29-2020 Barton, Jacqueline St. Andrews BA Elem Ed/English/MGIC/ESE ESE 06-30-2020
April 28, 2020 3 BAY DISTRICT SCHOOL BOARD APRIL 28, 2020 BOARD MEETING SUPPORT PERSONNEL RECOMMENDATIONS
REQUEST TO ENTER INTO AN SUPPORT CONTRACT WITH THE FOLLOWING PERSONNEL
NAME COST CENTER ASSIGNMENT F-TIME P-TIME TEMP BEG DATE END DATE
Perkins, Christy Arnold Custodian III X 04-13-2020 05-27-2020 Horne, Jordan Breakfast Point Custodian III X 04-16-2020 05-27-2020
REQUEST FOR TRANSFER
From: Northside From: Clerk I West, Sandra To: Maintenance To: Clerk I X 04-06-2020 06-30-2020
REQUEST FOR EMERGENCY PAID SICK LEAVE
Holland, Kendra Parker Maid X 04-15-2020 04-28-2020 Brown, Dorothy Bay Base Aide X 04-06-2020 04-20-2020 Emory, Paisley Transportation Bus Paraprofessional X 04-06-2020 04-20-2020 Perna, George Transportation Bus Driver X 04-06-2020 04-20-2020
REQUEST FOR EMERGENCY FMLA EXPANSION
Behrend, Tisha Beach Inst. Para X 04-16-2020 TBD Kirby, Melissa Beach Support Para X 04-16-2020 TBD Winchester, Kelly Beach Inst. Para X 04-16-2020 TBD Holland, Kendra Parker Maid X 04-29-2020 TBD Johnson, Kathryn Northside Behavior Para X 04-20-2020 TBD Dibenedictis, Tonya Mosley Clerk X 04-16-2020 TBD Zawacki, Catherine Bozeman Inst. Para X 04-16-2020 TBD Craighead, Jessica Arnold Office Clerk X 04-16-2020 TBD Darvai, Zsuzsanna Arnold Inst. Para X 04-16-2020 TBD Marinez Santana, Glendy Arnold Language Asst X 04-16-2020 TBD Lord, April HR Sub Registrar X 04-20-2020 TBD Johnson, Lisa Bay Base Aide X 04-21-2020 TBD Simon, April Transportation Bus Driver X 04-20-2020 TBD Cosgray, Eric Maintenance Plumber - 12 mo. X 04-15-2020 TBD Shirah, Billy Maintenance Plumber - 12 mo. X 04-15-2020 TBD
April 28, 2020 4 Bush, Melissa Food Service Food Srv Spec. - 12 mo. X 04-29-2020 TBD
RESIGNATION
Allen, Dwight Lucille Moore Paraprofessional X 05-27-2020 Kinnear, Jon-Tytus Lucille Moore Paraprofessional X 05-27-2020 Hill, Hannah Lucille Moore Paraprofessional X 05-27-2020 Perkins, Christy Arnold Maid X 04-09-2020
WITHDRAW FROM DROP
Cutchin, Pamela Rutherford Confidential Secretary X 06-30-2020 Brunson, Rickey Rosenwald Paraprofessional X 06-30-2020
RETIREMENT
Meadows, Linda Cherry Street Inst Paraprofessional X 05-27-2020 Woosley, Rebecca Southport Confidential Secretary X 04-30-2020
DECEASED
Thomas, Charles Haney Maid X 04-06-2020 Heron, David Maintenance HVAC Refrigeration Mechanic X 04-17-2020
LEAVE REINSTATEMENT
NAME COST CENTER ASIGNMENT F-TIME P-TIME HOURS BEG DATE END DATE
Johnson, Debra Operations Asst to Director X 6.00 SK 03-02-2020 03-09-2020 Marshall, Derrik Maintenance Carpenter Helper X 1.00 SK 03-05-2020 03-05-2020 Edenstrom, John Maintenance Semi-Skilled Craftsman X 6.0 SK 03-05-2020 03-10-2020
WILLIAM V. HUSFELT, SECRETARY AND SUPERINTENDENT BAY COUNTY SCHOOL DISTRICT
April 28, 2020 5 STEVEN T. MOSS, CHAIRMAN BAY COUNTY SCHOOL DISTRICT
April 28, 2020 6 April 28, 2020 7 2019-2020 DISTRICT APPROVED LIST
Revision for Approval - April 28, 2020
Cost Position Number Operational Other Center 9101 SUPERINTENDENT OF SCHOOLS Administrative Assistant to the Superintendent 1 100% Assistant to the Director 2 100% Assistant to the School Board Members 1 100% Assistant to the Superintendent 1 100% Director of Communications 1 100% Director of Recovery and FEMA Liaison 1 100% Instructional Specialist Assistant (Mentoring) 1 100% 9105 DEPUTY SUPERINTENDENT Deputy Superintendent 1 100% Assistant to the Deputy Superintendent 1 100% 9102 PROPERTY RECORDS Property Records Manager 1 100% Inventory Clerk I 1 100% Inventory Audit Clerk I 1 100% 9113 HUMAN RESOURCES & EMPLOYEE SUPPORT SERVICES Executive Director of Human Resources & Employee Support 1 100% Services Assistant to Executive Director of Human Resources & Employee 1 100% Support Services Certification/Compliance Human Resource Administrator 1 100% Substitute Teacher Registrar 1 100% Instructional Staffing Specialist I (curr. emp. Only 7/1/20) 1 100% Human Resources Specialist 5 100% District Receptionist 1 100% Title IX Coordinator 1 50% Clerk I 1 100% 9114 MANAGEMENT INFORMATION SYSTEMS Director of Management Information Systems 1 100% Assistant to the Information Services Director 1 100% Application Support Analyst 1 100% Chief of Security Management/Network Operations 1 100% Deputy Director of Information Services 1 100% Network Analyst 3 100% Technical Support Analyst 11 100% Project Manager/IT Support Services 1 100% Project Manager/Network Operations 1 100% Project Manager/Programming Systems 2 100% Senior Systems Administrator 1 100% Supervisor of Security Management/Network Operations 1 100% System Consultant I 2 100% System Consultant II 3 100% Telecom Analyst 1 100% User Support Analyst 1 100% Webmaster 1 100% Remote Systems Analyst 2 100% Security Analyst 2 100%
1 April 28, 2020 8
9116 FACILITIES Executive Director of Facilities 1 100% Assistant to the Executive Director 1 100% Director of Facilities 1 100% Assistant to the Director of Facilities 1 100% Capital Projects Contracts Manager 2 100% Project Manager/Building Code Inspector/Plans Examiner 3 100% Project Manager/Building Official 1 100% Building Automation Systems/Energy Conservation Systems 1 100% Manager 9117 PROCUREMENT, CONTRACTING & MATERIALS MGMT General Manager of Purchasing, Contracting, & Materials 1 100% Management Assistant to Manager of Purchasing, Contracting, & Materials 1 100% Management Purchasing Agent 1 100% Contracts Manager/Inspector 1 100% Purchasing Clerk 1 100% Courier II 1 100% Courier III 1 100% Title IX Coordinator 1 50% Head Custodian IV 1 100% 9118 FINANCE Manager of Financial Services 1 100% Finance Officer 1 100% Assistant Finance Officer 1 100% Bookkeeper I 4 100% Clerk 1 100% 9119 PAYROLL Payroll Officer 1 100% Assistant Payroll Officer 1 100% Payroll Specialist I 4 100% Employee Benefits Manager Fund 710 1 100% Benefits Specialist Fund 710 2 100% 9125 STUDENT SERVICES Director of Student Services 1 100% Assistant to the Director 1 100% Supervisor of Title I & District Assistance 1 100% Assistant to the Title I Supervisor 1 100% Coordinator of Bay BASE (Self-funded) 1 100% Assistant to the Coordinator of Bay BASE (Self-funded) 1 100% Coordinator of Student Placement Options 1 100% Clerk II Bay BASE (Self-funded) 1 100% Instructional Specialist for Student Services 4 100% Instructional Specialist Assistant 3 100% Secretary I 1 100% Records Clerk II (Title I) 1 100% Office Clerk I (Title I) 1 100% Clerk I (PT) 1 100% Instructional Specialist Assistant (Title IV) 1 50% 50% Fund 9126 INSURANCE & RISK MANAGEMENT 710 Insurance and Risk Manager 1 100% Claims Investigator 1 100% District Safety Officer 1 100% Records Clerk I 2 100%
2 April 28, 2020 9
9130 CHIEF FINANCIAL OFFICER BUSINESS SUPPORT SVCS Executive Director for Business Support Services (CFO) 1 100% Assistant to the Executive Director for Business Support Services 1 100% 9131 BEACON LEARNING CENTER Self-funded Project Director of Beacon Learning Center 1 100% Assistant to the Director 1 100% Content Development Leader for Beacon 1 100% Enterprise Office Manager 1 100% Web Database Manager 1 100% Web Technician 2 100% Instructional Specialist for Inservice 2 100% Lead Program Manager for Online Learning 7 100% Program Manager for Online Learning 1 100% System Support Specialist 3 100% System Analyst 1 100% Clerk I 1 100% Clerk I (P-T) 1 100% 9132 ESE Director of ESE & Pre-Kindergarten Services 1 100% Assistant to the Director 1 100% VPK & ESE Pre-K Coordinator (9002) 1 50% 50% Assistant to the Coordinator of Pre-K (VPK & ESE) Education (9002) 1 75% 25% Instructional Specialist for ESE 4 100% Instructional Specialist for ESE 1 50% 50% Audiologist 1 100% Records Clerk I 2 100% Records Clerk II 1 20% 80% Head Custodian IV (SSC) (9002) 1 100% 9132 TEACHING AND LEARNING SERVICES Assistant Superintendent for Teaching and Learning Services 1 100% Assistant to the Assistant Superintendent for Teaching and Learning 1 100% Services Bookkeeper I 1 20% 80% Bookkeeper II 1 100% 9133 CURRICULUM & INSTRUCTIONAL SERVICES Director of Secondary & Adult Instructional Services 1 100% Director of Elementary Instructional Services 1 100% Assistant to the Directors 1 100% Coordinator of Staff Development and Title II 1 50% 50% Assistant to Coordinator of Staff Development & Title II 1 50% 50% Coordinator of Assessment & Accountability 1 100% Coordinator of Teacher & Administrator Appraisal Systems 1 100% Data Specialist 1 100% Testing Clerk 2 100% Instructional Specialist for K-12 & Adult Instructional Services 4 5 100% Instructional Specialist Assistant 2 100% Project Supervisor/Technology and eLearning 1 100% Bookkeeper II 1 50% 50% Supervisor of Career and Technical Education 1 100% Career and Technical Education Coordinator 1 100% Program Specialist 1 100%
3 April 28, 2020 10
9138 BUSINESS OFFICE Budget & Business Services Manager 1 100% Assistant to the Business Office 1 100% Budget Analyst 1 100% Internal Accounts Auditor 1 100% Bookkeeper I 1 100% 9140 MENTAL HEALTH/STUDENT WELLNESS PROGRAMS Director of Student Wellness Programs 1 100% Assistant to the Director 1 100% Safety Assessment and Intervention Coordinator 1 100% Coordinator of Mental Health Initiative 1 100% Bookkeeper II 1 100% 9200 R.L. YOUNG TRANSPORTATION Director of Transportation 1 100% Assistant to Director of Transportation 1 100% Bookkeeper I 1 100% Office Clerk I 1 100% Certified Mechanic 8 100% Computer Operator I 1 100% Fleet Manager 1 100% Mechanic II 1 100% Route Manager 4 100% Safety Officer/Trainer 2 100% School Bus Driver 135 100% School Bus Paraprofessional 35 100% Service Attendant 1 100% Service Dispatcher 1 100% Transportation Operations Dispatcher 1 100% Transportation Specialist 2 100% Transportation Van Driver 6 100% Vehicle Electronic Technician 1 100% 9205 EXTRA-CURRICULAR ACTIVITIES AND TITLE IX Asst. to Coord. of Extra-Curricular Activities & Title IX Compliance 1 100% 9205 DISTRICT SAFETY AND SECURITY District Safety, Security, and Police Chief 1 100% Background Check Specialist 2 100% District Police Officer 23 100% District Safety, Security, and Assistant Police Chief 1 100% Installation and Maintenance Manager 1 100% Safety & Security Operational Specialist 1 100% Safety & Security Tele-Communicator and Video Specialist 2 100% 9205 OPERATIONAL SERVICES Executive Director for Operational Support Services 1 100% Assistant to the Executive Director for Operational Support Services 1 100% Head Custodian IV (Nelson Building) 1 100% Custodian II (Wellness Center) 1 100% 9220 INSTRUCTIONAL TECHNOLOGY AND MEDIA SERVICES Supervisor of Instructional Technology and Media Services 1 100% Assistant to Supervisor of Instructional Media Services 1 100% District Media Services Multimedia Technician 1 100% District Media Specialist – Instructional Media Services 1 100% Instructional Specialist for K-12 & Adult Instructional Services 1 100% ITV Specialist – Media Services 1 100% ITV Technician – Media Services 1 100% ITV Technology Manager – Media Services 1 100% Records Clerk II 3 2 100% Records Clerk I 1 100% 4 April 28, 2020 11 9230 MAINTENANCE - REDMON WAREHOUSE Supervisor of Maintenance 1 100% Assistant to Supervisor of Maintenance 1 100% Administrator on Special Assignment 1 100% Automotive Mechanic 1 100% Boilerman 2 100% Brick/Block Mason 1 100% Carpenter 5 100% Carpenter Helper 4 100% Carpenter Shop Supervisor 2 100% Clerk I 1 100% Electrical Helper 4 100% Electrical Shop Supervisor 1 100% Electrician 4 100% Equipment Mechanic 1 100% Equipment Operator 2 100% HVAC Controls Mechanic 1 100% HVAC Helper 5 100% HVAC Helper 1 100% HVAC Refrigeration Mechanic 9 100% HVAC Shop Supervisor 1 100% Kitchen Equipment Technician 1 100% Locksmith 2 100% Locksmith Helper 1 100% Logistics Supply Clerk 1 100% Logistics Support Supervisor 1 100% Material Controller/Fleet Manager (Maintenance) 1 100% Painter 3 100% Plumber 5 100% Plumber Helper 4 100% Plumbing/Heating Shop Supervisor 1 100% Semi-Skilled Craftsman (1-Stadium) 10 100% Stadium Custodian II 1 100% Stadium Manager 1 100% Assistant Stadium Manager 1 100% Treatment Plant Operator/Exterminator 1 100% Turf & Irrigation Specialist (Stadium) 1 100% Warehouseman II 1 100% Welding/Sheet Metal Mechanic 1 100% Work Control Technology Specialist 3 100% 9240 WAREHOUSE (Young Center/Kilbourn) Warehouseman I (Warehouse) 1 100% Warehouseman II (Warehouse) 2 100% 9250 FOOD SERVICE Self-funded: Fund 410 Food Service Program Specialist 1 100% Food Service Specialist II 2 100% Food Service System Support Specialist 1 100%
Board Approved: June 25, 2019 Revised/Approved: July 16, 2019, August 13, 2019, August 27, 2019, October 8, 2019, November 12, 2019, January 14, 2020, February 11, 2020, February 25, 2020, March 10, 2020, March 24, 2020, April 14, 2020
5 April 28, 2020 12 April 28, 2020 13 April 28, 2020 14 April 28, 2020 15 April 28, 2020 16 April 28, 2020 17 April 28, 2020 18
April 28, 2020 WILLIAM V. HUSFELT III
SUPERINTENDENT
1311 Balboa Avenue M E M O R A N D U M
Panama City, Florida TO: William V. Husfelt III, Superintendent 32401 FROM: Shirley Baker, Executive Director Human Resources & Employee Support Services
(850) 767-4100 AGENDA ITEM: Request Approval of the 2020-2021 Payroll Schedule Hearing Impaired Access (800) 955-8770 Voice (800) 955-8771 TDD CONSENT OR ACTION (Please circle one)
www.bay.k12.fl.us BUDGET AMOUNT:
Board Members: IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please circle one)
Jerry Register District 1 IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS: Fund Function Object Cost Center Project Program
District 2
SUPERINTENDENT'S RECOMMENDATION:
Pamm Chapman District 3 Approval: ______Disapproval: ______Discussion: ______
Ryan Neves District 4 ______
Superintendent
Steve Moss District 5 Board Action
April 28, 2020 19 April 28, 2020 20 April 28, 2020 21 April 28, 2020 22 April 28, 2020 23 April 28, 2020 24 April 28, 2020 25 April 28, 2020 26 April 28, 2020 27 April 28, 2020 28 April 28, 2020 29 April 28, 2020 30 April 28, 2020 31 April 28, 2020 32 April 28, 2020 33 April 28, 2020 34 April 28, 2020 35 April 28, 2020 36 April 28, 2020 37 April 28, 2020 38 April 28, 2020 39 April 28, 2020 40 April 28, 2020 41 April 28, 2020 42 April 28, 2020 43 April 28, 2020 44 April 28, 2020 45 April 28, 2020 46 April 28, 2020 47 April 28, 2020 48 April 28, 2020 49
April 28, 2020
WILLIAM V. HUSFELT III
SUPERINTENDENT M E M O R A N D U M
1311 Balboa Avenue TO: William V. Husfelt III, Superintendent
Panama City, Florida FROM: Jim Loyed, Executive Director of Business 32401 Support Services
AGENDA ITEM: Purchasing and Contracting
(850) 767-4100
Hearing Impaired Access CONSENT OR ACTION (Please circle one) (800) 955-8770 Voice (800) 955-8771 TDD BUDGET AMOUNT:
www.bay.k12.fl.us IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please see attached back-up indicating appropriate budget strip)
Board Members: IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS:
Fund Function Object Cost Center Project Program Jerry Register District 1
SUPERINTENDENT'S RECOMMENDATION:
Ginger Littleton District 2 Approval: ______Disapproval: ______Discussion: ______
Pamm Chapman
District 3
______Ryan Neves Superintendent
District 4
Board Action Steve Moss
District 5
April 28, 2020 50 M E M O R A N D U M Business & Finance Services William V. Husfelt III, Superintendent - James Loyed, Chief Financial Officer
TO: Superintendent William Husfelt; James Loyed, Chief Financial Officer; and School Board Members
FROM: Dan Fuller, General Manager of Purchasing, Contracting & Materials Management
DATE: April 28, 2020
RE: Purchasing and Contracting Recommendations
1. RFP #20-06 Disaster Recovery and Mental/Behavioral Health Initiative: This RFP was issued to seek qualified applicants to provide consultant and training services to the District towards supporting the mental health needs of Bay District Schools' (BDS) students and staff following Hurricane Michael. In 2019 the RFP was issued and received only one respondent. In order to ensure widest availability and industry fairness the RFP was reissued after one year. IAW District Policy, Florida Statutes and FEMA reimbursement requirements the RFP was published on the District Website, VendorRegistry.com and public notice placed on American Mental Health Counselors Association forum. Again, one respondent submitted a proposal. This project will develop and implement a Plan for Recovery to include, but not be limited to, a determination of mental health supports available in the community, data collection and disaggregation related to impacted personnel and students, intervention training for staff, and development of a long-term plan for recovery and intervention. Recommend re- awarding the project to 7-Dippity Inc. This proposal was initiated by Mrs. Denise Kelley and consultation from Hagerty Inc. Funding is provided by the Re-Start Grant, Project 4006 with a total Not-To-Exceed (NTE) cost of $385,000.00 ($58,250.00 FY20, $326,750.00 FY21).
April 28, 2020 51
April 28, 2020
WILLIAM V. HUSFELT III
SUPERINTENDENT M E M O R A N D U M
1311 Balboa Avenue TO: William V. Husfelt III, Superintendent
Panama City, Florida FROM: Jim Loyed, Executive Director of Business 32401 Support Services
AGENDA ITEM: Financial Information
(850) 767-4100
Hearing Impaired Access CONSENT OR ACTION (Please circle one) (800) 955-8770 Voice (800) 955-8771 TDD BUDGET AMOUNT:
www.bay.k12.fl.us IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please circle one)
Board Members: IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS: Fund Function Object Cost Center Project Program Jerry Register District 1
SUPERINTENDENT'S RECOMMENDATION:
Ginger Littleton
District 2 Approval: ______Disapproval: ______Discussion: ______
Pamm Chapman
District 3
______Ryan Neves Superintendent
District 4
Board Action Steve Moss District 5
April 28, 2020 52 April 28, 2020
William V. Husfelt, III TO: William V. Husfelt, III, District Superintendent Superintendent FROM: Melissa South, Manager of Financial Services
1311 Balboa Avenue RE: Monthly Financial Statements - February 2020 Panama City, Florida Budget Amendments - February 2020 32401 Half Cent Summary - February 2020 Hurricane Michael Summary - February 2020
(850)872-4100 Amendment #28 Hearing Impaired Access General Fund (800)955-8770 Voice This amendment is to increase and decrease revenue and appropriations as noted (800)955-8771 TOO below. The changes to the unappropriated fund balance are itemized on the page following the amendments. Other adjustments are increases and decreases by function and object within the fund. www.bay.k12.fl.us
REVENUE DESCRIPTION AMOUNT
Board Members: 3310 State F.E.F.P $(4,178,384.00) 3344 Discretionary Lottery $ (62,862.00) Jerry Register 3355 Class Size Reduction $ (894,077.00)
District 1 3399 Misc State Revenue - Other $ 6,376.50 3425 Rent School Facilities $ 2,599.50 3462 Post Secondary Voc Course $ 116,737.54 3464 Capital Improvement Fees $ 5,741.57 Ginger Littleton 3465 Post Secondary Lab Fees $ 24,141.14
District 2 3468 Financial Aid Fees $ 11,479.04 3469 Other Student Fees $ 5,741.57 3490 Misc Local Sources $ 17,715.14 3630 Transfer From Capital Project $ 199,965.00 Pamm Chapman
District 3 TOTAL REVENUE INCREASE S (4.744.826.00>
UNAPPROPRIATED FUND BALANCE INCREASE S 0.00
TOTAL S (4.744.826.00) Ryan Neves TOTAL APPROPRIATIONS INCREASE S (4.744.826.00) District 4
Steve Moss
District 5
April 28, 2020 53 April 28, 2020 54 April 28, 2020 55 April 28, 2020 56 April 28, 2020 57 April 28, 2020 58 April 28, 2020 59 April 28, 2020 60 April 28, 2020 61 April 28, 2020 62 April 28, 2020 63 April 28, 2020 64 April 28, 2020 65 April 28, 2020 66 April 28, 2020 67 April 28, 2020 68 April 28, 2020 69 April 28, 2020 70 April 28, 2020 71 April 28, 2020 72 April 28, 2020 73 April 28, 2020 74 April 28, 2020 75 April 28, 2020 76 April 28, 2020 77 April 28, 2020 78 April 28, 2020 79 April 28, 2020 80 April 28, 2020 81 April 28, 2020 82 April 28, 2020 83 April 28, 2020 84 April 28, 2020 85 April 28, 2020 86 April 28, 2020 87 April 28, 2020 88 April 28, 2020 89 April 28, 2020 90 April 28, 2020 91 April 28, 2020 92 April 28, 2020 93 April 28, 2020 94 April 28, 2020 95 April 28, 2020 96 April 28, 2020 97 April 28, 2020 98 April 28, 2020 99
April 22, 2020
WILLIAM V. HUSFELT III M E M O R A N D U M SUPERINTENDENT TO: William V. Husfelt III, Superintendent 1311 Balboa Avenue FROM: Doug Lee, Executive Director for Operational Panama City, Florida Services 32401 AGENDA ITEM: Request for Review and Approval of Plans
(850) 767-4100 CONSENT OR ACTION (Please circle one)
Hearing Impaired Access (800) 955-8770 Voice BUDGET AMOUNT: N/A (800) 955-8771 TDD
IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please circle one) www.bay.k12.fl.us
IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS: Board Members: Fund Function Object Cost Center Project Program
Jerry Register District 1 SUPERINTENDENT'S RECOMMENDATION:
Approval: ______Disapproval: ______Discussion: ______Ginger Littleton District 2
Pamm Chapman
District 3 ______Superintendent
Ryan Neves
District 4 Board Action
Steve Moss District 5
April 28, 2020 100 M E M O R A N D U M Bill Husfelt, Superintendent Lee Walters, Director of Facilities
April 20, 2020
TO: Doug Lee, Executive Director of Operational Support Services
FROM: Leon Walters, Director of Facilities
RE: Facilities Agenda Item – April 28, 2020
CONSENT ITEM: Plans Review and Approval for Shelter Retrofit Projects: The School Board is asked to review and approve the architectural plans for two shelter retrofit projects. The projects are at Deer Point Elementary School and Deane Bozeman School. A representative from JRA Architects will have the plans available at 12:00 PM, one hour prior to the Board Meeting, in the Staff Development Lab. The funding for this project will be on a reimbursement basis from the Florida Department of Emergency Management.
/sas
April 28, 2020 101
WILLIAM V. HUSFELT, III ADMINISTRATIVE MEMORANDUM
SUPERINTENDENT
1311 Balboa Avenue To: Bay District School Board Panama City, Florida 32401 From: Shirley Baker Executive Director, Human Resources and Employee Support
Services (850) 872-4100 Hearing Impaired Access Date: April 16, 2020 (800) 955-8770 Voice (800) 955-8771 TDD Re: New Principal Recommendation Northside Elementary School www.bay.k12.fl.us
At the April 28, 2020 School Board meeting, the Superintendent will recommend Lora Frowert as the new principal for Northside Elementary Board Members: School. Ms. Frowert has eleven (11) years of instructional experience and three (3) years of administrative/supervisory experience. Jerry Register The effective start date of this position is December 14, 2020.
District 1 The interview committee convened on April 16, 2020 and evaluated each applicant on the basis of his/her application packet and personal interview. District 2 Applicants Interviewed: Lora Frowert
Stacey Eckles Maegan DeMoss Pamm Chapman Ryan Cottrell District 3 Julie Carmichael
Interview Committee: Susan Ross Pamela Quimuyog Ryan Neves Monica Dobbel District 4 Ruthie Parker
Steve Moss District 5
April 28, 2020 102
WILLIAM V. HUSFELT, III ADMINISTRATIVE MEMORANDUM
SUPERINTENDENT
1311 Balboa Avenue To: Bay District School Board Panama City, Florida 32401 From: Shirley Baker Executive Director, Human Resources and Employee Support
Services (850) 872-4100 Hearing Impaired Access Date: April 17, 2020 (800) 955-8770 Voice (800) 955-8771 TDD Re: New Principal Recommendation Deane Bozeman School www.bay.k12.fl.us
At the April 28, 2020 School Board meeting, the Superintendent will recommend Ivan Beach as the new principal for Deane Bozeman School. Board Members: Mr. Beach has four (4) years of instructional experience and ten (10) years of administrative/supervisory experience. Jerry Register The effective start date of this position is July 1, 2020.
District 1 The interview committee convened on April 17, 2020 and evaluated each applicant on the basis of his/her application packet and personal interview. District 2 Applicants Interviewed: Ivan Beach
Ellen Grainger Richard Hartzer Pamm Chapman District 3 Interview Committee: Alana Simmons
Amy Griffith Sherri Duvall Ryan Neves Jessica Mathis District 4
Steve Moss District 5
April 28, 2020 103
WILLIAM V. HUSFELT, III ADMINISTRATIVE MEMORANDUM
SUPERINTENDENT
1311 Balboa Avenue To: Bay District School Board Panama City, Florida 32401 From: Shirley Baker Executive Director, Human Resources and Employee Support
Services (850) 872-4100 Hearing Impaired Access Date: April 22, 2020 (800) 955-8770 Voice (800) 955-8771 TDD Re: New Assistant Principal Recommendation Jinks Middle School www.bay.k12.fl.us
At the April 28, 2020 School Board meeting, the Superintendent will recommend Lisa Solots as the new assistant principal for Jinks Middle Board Members: School. Ms. Solots has fourteen (14) years of instructional experience and two (2) years of administrative/supervisory experience. Jerry Register The effective start date of this position is July 1, 2020.
District 1 The interview committee convened on April 22, 2020 and evaluated each applicant on the basis of his/her application packet and personal interview. District 2 Applicants Interviewed: Lisa Solots
Deborah McDaniel Brian “Mitch” Kelly Pamm Chapman Jeremy Bunk District 3 Interview Committee: Alana Simmons
Blythe Carpenter Elizabeth Mapoles Ryan Neves Christa Opperman District 4 Coy Hall
Steve Moss District 5
April 28, 2020 104
April 28, 2020
WILLIAM V. HUSFELT III
SUPERINTENDENT M E M O R A N D U M 1311 Balboa Avenue TO: School Board Members Panama City, Florida 32401 FROM: William V. Husfelt III, Superintendent
AGENDA ITEM: Consideration of renaming the Music Room at Southport Elementary to honor Rhonda Hawley (850) 872-4100
Hearing Impaired Access (800) 955-8770 Voice CONSENT OR ACTION (Please circle one) (800) 955-8771 TDD
BUDGET AMOUNT:
www.bay.k12.fl.us
IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please circle one) Board Members:
IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS: Jerry Register Fund Function Object Cost Center Project Program District 1
SUPERINTENDENT'S RECOMMENDATION: District 2
Approval: ______Disapproval: ______Discussion: ______Pamm Chapman District 3
Ryan Neves ______District 4 Superintendent
Steve Moss Board Action District 5
April 28, 2020 105 SOUTHPORT ELEMENTARY SCHOOL 1835 BRIDGE STREET SOUTHPORT, FLORIDA 32409 Phone 850-767-1636 Fax 850-265-3703 www.bayschools.com/schools/ses
“Anchored in Excellence”
Dear Superintendent Husfelt and Bay District School Board,
Southport Elementary would like to petition the Board to rename the Music Room (Building 1 Rm 124). Rhonda Hawley has been a faculty member at Southport Elementary for 35 years (1985 to 2020). Rhonda has spent her entire career in education molding the future of our community through music and patriotism.
Her list of accomplishments is really too long to list. The impact she has left on the community of Southport is even more impressive. In fact, it is a group of former students that on Facebook has over 800 members that is in strong favor of this facility naming initiative.
The following list of accomplishments can be attributed to Rhonda Hawley: ‐ Bay District Outstanding Young Educator nomination ‐ 6 times Southport Teacher of the Year ‐ 2 times Bay District Teacher of the Year Finalist ‐ 4 times Disney’s American Teacher Award nomination ‐ Jefferson Award nomination ‐ Veterans of Foreign Wars, National Citizenship Education Teacher Award ‐ National Society of the Sons of the American Revolution, Martha Washington Medal ‐ International Rotary Foundation, Paul Harris Fellowship ‐ Free Masons of Florida, Award for Outstanding Service ‐ 2 times Grammy Music Teacher Award nominee ‐ Included in Who’s Who in American Women and Who’s Who in American Teachers ‐ Published author and composer of character education program, Keeping the Promise ‐ Creator of the Wings Across the Bridge ‐ Annual Peanut Butter Drive resulting in over 1000 jars of peanut butter to local pantries each year ‐ Coordinator Bay District School’s letter‐writing campaign to 9‐11 1st Responders ‐ 2003 Sharing the Promise trip to Washington D.C., Baltimore, and Philadelphia Mrs. Hawley is well respected and loved in the Southport community and we at Southport Elementary feel that a legacy like hers must be memorialized for generations to come. Therefore, Southport Elementary School respectfully requests that Music Room 1-124 be permanently known as “The Rhonda Hawley Music Room.”
Thank you for your consideration.
April 28, 2020 106
April 28, 2020
WILLIAM V. HUSFELT III
SUPERINTENDENT M E M O R A N D U M
1311 Balboa Avenue TO: William V. Husfelt III, Superintendent
Panama City, Florida FROM: Franklin Harrison, School Board Attorney 32401 AGENDA ITEM: Resolution authorizing necessary action for the School Board to issue Series 2020 Certificate of (850) 767-4100 Participation in an amount not to exceed $42M to finance the new school at Panama City Beach Hearing Impaired Access (800) 955-8770 Voice CONSENT OR ACTION (Please circle one) (800) 955-8771 TDD
BUDGET AMOUNT: www.bay.k12.fl.us
IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please circle one) Board Members:
IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS: Jerry Register Fund Function Object Cost Center Project Program District 1
District 2 SUPERINTENDENT'S RECOMMENDATION:
Approval: ______Disapproval: ______Discussion: ______Pamm Chapman District 3
Ryan Neves ______District 4 Superintendent
Steve Moss District 5 Board Action
April 28, 2020 107 RESOLUTION NO. 20-_____
A RESOLUTION OF THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $42,000,000 AGGREGATE PRINCIPAL AMOUNT OF CERTIFICATES OF PARTICIPATION (SCHOOL BOARD OF BAY COUNTY, FLORIDA MASTER LEASE PROGRAM, SERIES 2020A), EVIDENCING AN UNDIVIDED PROPORTIONATE INTEREST OF OWNERS THEREOF IN BASIC RENT PAYMENTS TO BE MADE UNDER A MASTER LEASE-PURCHASE AGREEMENT BY THE SCHOOL BOARD OF BAY COUNTY, FLORIDA; APPROVING THE SERIES 2020A GROUND LEASE OF CERTAIN LAND OWNED BY THE BOARD TO BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION IN CONNECTION WITH THE LEASE-PURCHASE FINANCING BY THE BOARD OF CERTAIN EDUCATIONAL FACILITIES THEREON; AUTHORIZING THE EXECUTION AND DELIVERY OF LEASE SCHEDULE NO. 2020A TO THE MASTER LEASE-PURCHASE AGREEMENT BETWEEN THE SCHOOL BOARD OF BAY COUNTY, FLORIDA AND THE BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION; AUTHORIZING THE EXECUTION AND DELIVERY OF THE SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT WITH HANCOCK WHITNEY BANK, AS SUCCESSOR TRUSTEE; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFERING STATEMENT WITH RESPECT TO SUCH CERTIFICATES OF PARTICIPATION; DELEGATING TO THE CHAIRMAN AND SUPERINTENDENT THE AUTHORITY TO EXECUTE AND DELIVER A CERTIFICATE PURCHASE CONTRACT RELATING TO THE DELEGATED NEGOTIATED SALE OF SUCH CERTIFICATES IN ACCORDANCE WITH THE PARAMETERS SET FORTH HEREIN; AUTHORIZING ADDITIONAL AGREEMENTS RELATED THERETO; AUTHORIZING THE PURCHASE OF MUNICIPAL BOND INSURANCE; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, ACTING AS THE GOVERNING BODY OF THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA:
SECTION 1. DEFINITIONS. The following terms shall have the following meanings herein, unless the text otherwise expressly requires. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall
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Appendix to page 107 1 include firms and corporations.
“Act" shall mean Chapter 1001 through 1013, Florida Statutes, and other applicable provisions of law.
"Board" means The School Board of Bay County, Florida, acting as the governing body of the District.
"Chairman" means the Chairman of the Board and, in his or her absence or unavailability, the Vice-Chairman or such other person as may be duly authorized to act on his or her behalf.
"Corporation" means the Bay County Educational Facilities Finance Corporation, a Florida not-for-profit corporation.
"District" means the School District of Bay County, Florida.
"Financial Advisor" means Ford & Associates, Inc., as financial advisor to the Board.
"Lease Agreement" means the Master Lease-Purchase Agreement, dated as of November 1, 1994, between the Corporation and the Board, as amended and supplemented.
“Lease Schedule No. 2020A” means Lease Schedule No. 2020A, between the Board and the Corporation.
"Master Trust Agreement" means the Master Trust Agreement, dated as of November 1, 1994, among the Corporation, the Board and the Trustee, as amended and supplemented.
"Secretary" means the Superintendent of the District, who is the ex-officio Secretary of the Board and, in his or her absence or unavailability, any Deputy Superintendent or such other person as may be duly authorized to act on his or her behalf.
“Series 2020A Assignment Agreement” means the Series 2020A Assignment Agreement relating to the Series 2020A Certificates, between the Corporation and the Trustee.
“Series 2020A Assignment of Ground Lease” means the Series 2020A Assignment of Ground Lease relating to the Series 2020A Certificates, between the Corporation and the Trustee.
"Series 2020A Certificates" means the Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A), Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase
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Appendix to page 107 2 Agreement by The School Board of Bay County, Florida, to be executed, authenticated and delivered by the Trustee under the Master Trust Agreement and the Series 2020A Supplemental Trust Agreement.
“Series 2020A Ground Lease” means the Series 2020A Ground Lease Agreement, between the Board and the Corporation, relating to the Series 2020A Project.
“Series 2020A Lease Agreement” means the Lease Agreement as supplemented by Lease Schedule No. 2020A, relating to the Series 2020A Certificates.
“Series 2020A Project” means the educational facilities in Bay County, Florida to be financed with the proceeds of the Series 2020A Certificates, consisting of an elementary school to be located on Back Beach Road in Panama City, Beach, Florida.
"Series 2020A Supplemental Trust Agreement" means the Series 2020A Supplemental Trust Agreement, among the Corporation, the Board and the Trustee and relating to the Series 2020A Certificates.
"Trustee" means Hancock Whitney Bank, a Mississippi state banking corporation, and its successors, agents or assigns.
"Underwriters" means Raymond James & Associates, Inc. and PNC Capital Markets, LLC, and any additional underwriters listed in the Certificate Purchase Contract.
SECTION 2. FINDINGS. It is hereby found and determined that:
(a) The Board has established a master lease-purchase program for the lease- purchase financing of various projects in accordance with the terms of the Lease Agreement and Master Trust Agreement and in connection therewith the Board now desires to execute and deliver the Series 2020A Lease Agreement pursuant to which the Board will lease purchase the Series 2020A Project from the Corporation.
(b) On June 27, 2017, the Board and CRA Architects entered an architectural contract for the design, construction management bidding and construction administrative services for the Series 2020A Project that meets the requirements of Section 1013.64(6)(b)3., Florida Statutes, and, thereby, provides an exemption related to cost per student stations requirements, as specified in such statute.
(c) The Board will cause the Series 2020A Certificates to be executed, authenticated and delivered by the Trustee in connection with the Board's leasing of the Series 2020A Project in accordance with the Series 2020A Supplemental Trust Agreement.
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Appendix to page 107 3 (d) It is in the best interests of the Board to enter the Series 2020A Lease Agreement to finance the Series 2020A Project with the proceeds of the Series 2020A Certificates.
(e) In connection therewith, the Board agrees to enter into the Series 2020A Ground Lease and the Lease Schedule No. 2020A whereby the Board will agree to make Basic Rent Payments sufficient to pay the principal of and interest on the Series 2020A Certificates.
(f) The Board is authorized and empowered by the Act to enter into transactions such as those contemplated by this Resolution, the Series 2020A Ground Lease, the Series 2020A Lease Agreement, the Master Trust Agreement, and the Series 2020A Supplemental Trust Agreement, and to fully perform its obligations thereunder.
(g) The Board hereby finds, determines and declares that due to the recent volatility in the municipal bond market and the complexity of the transactions relating to the Series 2020A Certificates, that it is in the best interest of the Board that the Series 2020A Certificates be sold by a negotiated sale, allowing market entry at the most advantageous time, rather than at a specified advertised date, thereby obtaining the best possible price and interest rate for the Series 2020A Certificates.
(h) The Board has been advised by its Financial Advisor as to the market appropriateness of the Underwriters’ purchase proposal in light of current market levels and conditions and as to acceptance of the Certificate Purchase Contract pursuant to a delegated negotiated sale as provided herein.
(i) The Series 2020A Certificates shall be secured solely as provided in the Master Trust Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020A Ground Lease and the Series 2020A Lease Agreement, it being understood that neither the Series 2020A Certificates nor the interest represented thereby shall be or constitute a general obligation of the Corporation, the District, the Board, Bay County or the State of Florida, or any political subdivision or agency thereof, a pledge of the faith and credit of the Corporation, the District, the Board, Bay County or the State of Florida, or any political subdivision or agency thereof, or a lien upon any property of or located within the boundaries of the District.
SECTION 3. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act and other applicable provisions of law.
SECTION 4. LEASE OF PREMISES. The land constituting the Premises (as defined in the Series 2020A Ground Lease) on which the Series 2020A Project will be constructed and to be identified in Exhibit A attached to the Series 2020A Ground Lease is hereby approved and affirmed for leasing to the Corporation as part of the Financing Program in accordance with the terms and provisions of the Series 2020A Ground Lease.
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Appendix to page 107 4 SECTION 5. AUTHORIZATION OF LEASE-PURCHASE OF THE SERIES 2020A PROJECT. The Board hereby authorizes and affirms the lease purchase of the Series 2020A Project in accordance with the terms of the Series 2020A Lease Agreement.
SECTION 6. APPROVAL OF LEASE SCHEDULE NO. 2020A. The Board hereby authorizes and directs the Chairman to execute Lease Schedule No. 2020A, and the Secretary to attest the same under the seal of the Board, and to deliver Lease Schedule No. 2020A to the Corporation for its execution. Lease Schedule No. 2020A shall be in substantially the form attached hereto as Exhibit A, with such changes, amendments, modifications, omissions and additions as may be approved by such Chairman and in any event, including those changes necessary to reflect the final terms and details of the Series 2020A Certificates, including, without limitation, the schedule of Basic Rent Payments. Execution by the Chairman of Lease Schedule No. 2020A shall be deemed to be conclusive evidence of approval of such changes. The authorization to execute and deliver Lease Schedule No. 2020A is expressly conditioned upon compliance with the terms and conditions set forth in Section 13 hereof with respect to the execution, authentication and delivery of the Series 2020A Certificates.
SECTION 7. APPROVAL OF SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT. The Board hereby authorizes and directs the Chairman of the Board to execute the Series 2020A Supplemental Trust Agreement, and the Secretary to attest the same under the seal of the Board and to deliver the Series 2020A Supplemental Trust Agreement to the Corporation and the Trustee for their execution. The Series 2020A Supplemental Trust Agreement shall be in substantially the form attached hereto as Exhibit B, with such changes, amendments, modifications, omissions and additions as may be approved by said Chairman. Execution by the Chairman of the Series 2020A Supplemental Trust Agreement shall be deemed to be conclusive evidence of approval of such changes. The Board hereby approves the terms of the Series 2020A Certificates as provided in the Series 2020A Supplemental Trust Agreement.
SECTION 8. APPROVAL OF THE SERIES 2020A GROUND LEASE. The Board hereby authorizes and directs the Chairman of the Board to execute the Series 2020A Ground Lease, and the Secretary to attest the same under the seal of the Board and to deliver the Series 2020A Ground Lease to the Corporation for its execution. The Series 2020A Ground Lease shall be in substantially the form attached hereto as Exhibit C, with such changes, amendments, modifications, omissions and additions as may be approved by said Chairman. Execution by the Chairman of the Series 2020A Ground Lease shall be deemed to be conclusive evidence of approval of such changes. The Board hereby approves the terms of the Series 2020A Ground Lease.
SECTION 9. CONSENT TO ASSIGNMENT. The Board hereby acknowledges and consents to the assignment by the Corporation to the Trustee of all of its rights, title and interest in and to Lease Schedule No. 2020A and the Series 2020A Ground Lease by execution and delivery of the Series 2020A Assignment Agreement and the Series 2020A Assignment of
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Appendix to page 107 5 Ground Lease.
SECTION 10. TRUSTEE. Hancock Whitney Bank, and its successors, agents or assigns, as successor Trustee, is hereby confirmed as Trustee in connection with the Series 2020A Certificates.
SECTION 11. PRELIMINARY OFFERING STATEMENT. The distribution of a Preliminary Offering Statement relating to the Series 2020A Certificates in substantially the form attached hereto as Exhibit D, is hereby approved as to form and substance, with such changes as may be approved by the Chairman and Secretary of the Board. The Chairman and Secretary of the Board are hereby authorized to deem such Preliminary Offering Statement as “final” within the meaning of Rule 15c2-12 of the Securities and Exchange Commission, except for certain permitted omissions as provided in such rule. Execution by the Chairman of a certification deeming final the Preliminary Offering Statement shall be deemed to be conclusive evidence of approval of any changes thereto.
SECTION 12. GENERAL AUTHORITY. The members of the Board, the Secretary and the officers, attorneys and other agents or employees of the District are hereby authorized to do all acts and things required of them by this Resolution or desirable or consistent with the requirements of this Resolution, the Series 2020A Lease Agreement, the Master Trust Agreement, the Series 2020A Supplemental Trust Agreement, or the Series 2020A Ground Lease, for the full punctual and complete performance of all the terms, covenants and agreements contained herein or therein, and each member, employee, attorney and officer of the District and the Secretary is hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder.
SECTION 13. APPROVAL OF DELEGATED NEGOTIATED SALE; EXECUTION AND DELIVERY OF CERTIFICATE PURCHASE CONTRACT. Subject to full satisfaction of the conditions set forth in this Section, the Board hereby authorizes a delegated negotiated sale of the Series 2020A Certificates to the Underwriters, in accordance with the terms of the Certificate Purchase Contract to be dated the date of sale and to be substantially in the form attached hereto as Exhibit E (the “Certificate Purchase Contract”), with such changes, amendments, modifications, omissions and additions thereto as shall be approved by the Chairman and the Secretary in accordance with the provisions of this Section, their execution thereof being deemed conclusive evidence of the approval of such changes and full satisfaction of the conditions set forth in this Section. The Certificate Purchase Contract shall not be executed by the Chairman and the Secretary until such time as all of the following conditions have been satisfied:
Receipt by the Secretary of a written offer to purchase the Series 2020A Certificates by the Underwriters substantially in the form of the Certificate Purchase Contract, said offer to
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Appendix to page 107 6 provide for, among other things, (i) the issuance of not exceeding $42,000,000 aggregate principal amount of Series 2020A Certificates at an all-in true interest cost not to exceed 4.25%, (ii) an underwriting discount (including management fee and all expenses) not in excess of $5.00/$1,000.00 of the par amount of the Series 2020A Certificates, and (iii) the final maturity of the Series 2020A Certificates not later than July 1, 2040.
SECTION 14. OFFERING STATEMENT. The form, terms and provisions of the Offering Statement relating to the Series 2020A Certificates, shall be substantially as set forth in the Preliminary Offering Statement. The Chairman and the Secretary are each hereby authorized and directed to execute and deliver said Offering Statement in the name and on behalf of the Board and thereupon to cause such Offering Statement to be delivered to the Underwriters within seven business days of the date of execution of the Certificate Purchase Contract with such changes, amendments, modifications, omissions and additions as may be approved by said Chairman. Said Offering Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chairman, and the information contained therein are hereby authorized to be used in connection with the sale of the Series 2020A Certificates to the public. Execution by the Chairman and the Secretary of the Offering Statement shall be deemed to be conclusive evidence of approval of such changes.
SECTION 15. CONTINUING DISCLOSURE AGREEMENT. The Board hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Resolution, failure of the Board to comply with the Continuing Disclosure Agreement will not be considered an event of default under the Trust Agreement or the Series 2020A Lease Agreement; however any Certificateholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Board to comply with its obligations under this Section. Certificateholders shall not be entitled to any damages for failure of the Board to comply with the terms of the Continuing Disclosure Agreement.
SECTION 16. MUNICIPAL BOND INSURANCE POLICY. The Chairman and Secretary are hereby authorized to request and accept a commitment for municipal bond insurance policy after consulting with the Board’s Financial Advisor to determine net interest cost savings to the Board, and the Chairman and Secretary of the Board are hereby authorized to execute and deliver such additional documents and agreements as may be required as a condition to attest the delivery of such policy. A statement of insurance is authorized to be printed on the Series 2020A Certificates.
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Appendix to page 107 7 SECTION 17. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof.
SECTION 18. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption.
ADOPTED at a regular meeting this 28th day of April, 2020.
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, ACTING AS THE GOVERNING BODY OF THE BAY COUNTY SCHOOL DISTRICT [SEAL]
By:______ATTEST: Chairman
______Superintendent/Secretary
APPROVED AS TO FORM AND LEGAL SUFFICIENCY:
______School Board Attorney
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Appendix to page 107 8 EXHIBIT A
FORM OF LEASE SCHEDULE NO. 2020A
25015/014/01587121.DOCv4
Appendix to page 107 9 Schedule No. 2020A to the Master Lease-Purchase Agreement, dated as of November 1, 1994, between Bay County Educational Facilities Finance Corporation (the "Corporation") and The School Board of Bay County, Florida (the "Board")
THIS LEASE SCHEDULE NO. 2020A (the "Lease Schedule") is hereby entered into under and pursuant to that certain Master Lease-Purchase Agreement, dated as of November 1, 1994, as amended (the "Lease Agreement"), pursuant to which the Corporation has agreed to lease-purchase to the Board and the Board has agreed to lease-purchase from the Corporation, subject to the terms and conditions of the Lease Agreement and the Series 2020A Project as herein described. All defined terms not otherwise defined herein shall have the respective meanings therefor set forth in the Lease Agreement. Reference to "Lease Agreement" herein shall include the terms of this Lease Schedule.
1. Series 2020A Project. The leased property, which is described in Section 6 of this Lease Schedule (the "Series 2020A Project"), has a Maximum Cost of $______, shall be acquired, constructed, and installed, and lease-purchased by the Board from the Corporation pursuant to the terms of the Lease Agreement.
2. Commencement Date; Lease Term; Other Definitions. For purposes of this Lease Schedule and the Lease Agreement:
(a) The Commencement Date for the Series 2020A Project is May __, 2020.
(b) The Initial Lease Termination Date of the lease of the Series 2020A Project is June 30, 2020. The Maximum Lease Term commenced on the Commencement Date thereof and shall finally terminate on June 30, 20__, or the date on which the principal of, prepayment premium, if any, and interest thereon to the due date thereof of Series 2020A Certificates have been made pursuant to Section 12.01 of the Trust Agreement and any Supplemental Rent arising under the Lease Agreement shall have been paid or provided for.
(c) The Completion Date for the Series 2020A Project is expected to be [September 30, 2021.]
(d) The Replacement Amount is $______.
3. Certificates of Participation.
(a) The Certificates of Participation issued under the Trust Agreement, as amended and supplemented, and related to this Lease Schedule are identified as the
25015/014/01587087.DOCv2 1 Appendix to page 107 10 "Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A)" (the "Series 2020A Certificates"), Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease- Purchase Agreement by the Board.
(b) There is no Credit Enhancer for the Series 2020A Certificates.
(c) No Reserve Account is to be established for the Series 2020A Certificates.
(d) The Optional Prepayment Dates for the Series 2020A Certificates is described in the Series 2020A Supplemental Trust Agreement.
(e) The Closure Date of the 2020A Subaccount of the Project Account established for the Series 2020A Project, for purposes of Section 6.03(g) of the Trust Agreement, shall be September 30, 2021.
(f) The Prepayment Amount relating to the Series 2020A Subaccount of the Project Account, for purposes of Section 6.03(g) of the Trust Agreement shall not be applicable.
(g) For purposes of Section 5.08(c) of the Lease Agreement, the portion of the Net Proceeds relating to the Series 2020A Project shall be applied in accordance with Section 12 below.
4. Basic Rent. The Basic Rent payable by the Board to the Corporation with respect to the Series 2020A Project under the Lease Agreement is described in Schedule A attached to this 2020A Schedule. The Basic Rent is due and payable from the Board no later than the 5th day prior to each Basic Rent Payment Date.
5. Use of Certificate Proceeds.
The proceeds of the Series 2020A Certificates shall be disbursed as follows:
Deposit to Series 2020A Subaccount of Costs of Issuance Account established for Series 2020A Certificates
Deposit to Series 2020A Subaccount of Project Account established for Series 2020A Certificates
Total Proceeds
25015/014/01587087.DOCv2 2 Appendix to page 107 11 6. The Series 2020A Project. The Project Description, Project Budget and Project Schedule for the Series 2020A Project are attached hereto as Schedule B.
7. Designated Equipment. A description of the Designated Equipment for the Series 2020A Project is attached hereto as part of Schedule B.
8. The Land. A description of the land is attached hereto as Schedule C. The description of the Land may be amended as provided in the Ground Lease related to the Series 2020A Project.
9. Other Documents. The documents required by Section 3.01(c) of the Lease Agreement to be submitted with this Lease Schedule are attached hereto as Schedule D.
10. Assignment of Lease Agreement. The Corporation hereby acknowledges that all Lease Payments and its rights, title, and interest in this Lease Schedule have been heretofore assigned to the Trustee pursuant to the Series 2020A Assignment Agreement.
11. Property Insurance. With respect to the Series 2020A Certificates, notwithstanding the provisions set forth in Section 5.05 of the Master Lease Agreement related to property insurance coverage, the Board shall purchase and maintain property insurance coverage in amounts and with deductibles and co-insurance provisions as, in the sole judgment of the Board are adequate to protect it and the Projects; but, in no event in an amount less than the amount certified as reasonable by the Division of Emergency Management of the Office of Insurance Regulation of the State of Florida in order to remain qualified for the Federal disaster relief programs.
12. Redemption Requirements of Section 5.08(c) and (d) of the Master Lease Agreement Not Applicable. Notwithstanding the provisions set forth in Sections 5.08(c) and (d) of the Master Lease Agreement, if the Net Proceeds related to the Series 2020A Project are not greater than the amount of the Lease Payments represented by the Series 2020A Certificates coming due in the immediately following fiscal year under this Schedule No. 2020A, then such amounts shall be used first, to pay the Interest Component of the Series 2020A Certificates for the next two interest Payment Dates and then to pay the Principal Component next coming due. In the event such Net Proceeds are greater than the amount of the Lease Payments represented by the Series 2020A Certificates coming due under this Schedule No. 2020A in the immediately following fiscal year, at the option of the Board, the Board shall apply the portion of the Net Proceeds of such insurance or condemnation award to (i) the acquisition, construction and installation of other Land and/or Buildings to be used for educational purposes that will be subject to this Lease Schedule No. 2020A, or (ii) upon receipt of an approving opinion of Special Counsel, to the Series 2020A Subaccount of the Interest Account, or Series 2020A Subaccount of the Principal Account to be credited against the payments next due to such accounts or subaccounts.
[Remainder of page intentionally left blank]
25015/014/01587087.DOCv2 3 Appendix to page 107 12 IN WITNESS WHEREOF, each of the parties hereto have caused this Lease Schedule No. 2020A to be executed by their proper corporate officers, all as of the 1st day of May, 2020.
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION
By: ______Steve Moss President
Attest: ______William V. Husfelt, III, Secretary
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA
By: ______(SEAL) Steve Moss Chairman
Attest: ______William V. Husfelt, III, Secretary-Superintendent
25015/014/01587087.DOCv2 S-1 Appendix to page 107 13 SCHEDULE A
BASIC RENT SCHEDULE
SERIES 2020A SERIES 2020A TOTAL CERTIFICATE CERTIFICATES CERTIFICATES PRINCIPAL AND BASIC RENT PAYMENT PRINCIPAL INTEREST INTEREST PAYMENT DATE(1) DATE COMPONENT COMPONENT COMPONENTS
______(1) The Basic Rent is due and payable from the Board no later than the 5th day prior to each Basic Rent Payment Date.
25015/014/01587087.DOCv2
Appendix to page 107 14 SCHEDULE B
PROJECT DESCRIPTION, PROJECT BUDGET, PROJECT SCHEDULE AND DESIGNATED EQUIPMENT
The Series 2020A Project consists of the construction and installation of certain educational facilities in the District. Under certain conditions set forth in the Series 2020A Lease Agreement, the School Board may substitute components of the Series 2020A Project and modify Plans and Specifications therefor. The following is a general description of facilities comprising the principal components of the Series 2020A Project:
Elementary School “__”
Construction: A/E fee & Administrative Costs: Other Fees: Furniture/Equipment : Total
The Designated Equipment is: Any personal property included in the Series 2020A Project and paid for with proceeds of the Series 2020A Certificates, as permitted by law.
25015/014/01587087.DOCv2B-1
Appendix to page 107 15 SCHEDULE C
LEGAL DESCRIPTION
25015/014/01587087.DOCv2D-1
Appendix to page 107 16 SCHEDULE D
DOCUMENTS REQUIRED BY SECTION 3.01 OF THE LEASE AGREEMENT
(i) A certified copy of the resolutions duly adopted by the Board authorizing the lease- purchase of the Project described in the Lease Schedule No. 2020A, and the execution and delivery of such Lease Schedule No. 2020A and the Series 2020A Supplemental Trust Agreement relating to the Series 2020A Certificates;
(ii) A certificate of the Chairman of the Board reaffirming the Board's covenants, representations and warranties made hereunder, except as modified by the Lease Schedule No. 2020A, and stating no default has occurred and is continuing under the Lease Agreement;
(iii) An executed copy of the Series 2020A Ground Lease Agreement relating to the Series 2020A Project described in the Lease Schedule No. 2020A;
(iv) An executed copy of the Series 2020A Supplemental Trust Agreement relating to the issuance of the Series 2020A Certificates which shall finance the Series 2020A Project described in the Lease Schedule No. 2020A; and
(v) An executed copy of a Memorandum of Lease with respect to the Series 2020A Project described in the Lease Schedule No. 2020A.
25015/014/01587087.DOCv2D-2
Appendix to page 107 17 EXHIBIT B
FORM OF SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT
25015/014/01587121.DOCv4
Appendix to page 107 18 SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT
by and among
HANCOCK WHITNEY BANK, A MISSISSIPPI STATE BANK, as successor Trustee
and
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, as Lessor
and
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, as Lessee
Dated as of May 1, 2020
Relating to
Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by The School Board of Bay County, Florida
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Appendix to page 107 19 SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT
THIS SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT, dated as of May 1, 2020 (the "Series 2020A Supplemental Trust Agreement"), by and among HANCOCK WHITNEY BANK, A MISSISSIPPI STATE BANK, qualified to do business in the State of Florida, with corporate trust powers and qualified to accept trusts of the type set forth in the Trust Agreement (the "Trustee"), the BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, a not-for-profit corporation duly organized and existing under the laws of the State of Florida (the "Corporation"), and THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, acting as the governing body of the Bay County School District (the "Board"), supplementing the Master Trust Agreement, dated as of November 1, 1994, as amended and supplemented (the "Trust Agreement"), by and among the Trustee, as successor trustee to NationsBank of Florida, N.A., the Corporation and the Board.
W I T N E S S E T H:
WHEREAS, pursuant to the Trust Agreement, the Board, the Trustee, and the Corporation have provided for the issuance of certain Certificates of Participation on behalf of the Board for the financing and refinancing of capital projects of the Board; and
WHEREAS, the Board has further provided for the lease-purchase of certain real and/or personal property from time to time by entering into the Master Lease-Purchase Agreement, dated as of November 1, 1994, as amended and supplemented (the "Lease Agreement"), between the Corporation, as lessor, and the Board, as lessee; and
WHEREAS, pursuant to the Lease Agreement, the Board may from time to time, by execution of a Lease Schedule to the Lease Agreement (a "Lease Schedule"), direct the Corporation to acquire, construct, and lease-purchase to the Board the items of property described in such Lease Schedule (which items of property are collectively referred to herein as the "Projects"); and
WHEREAS, provision for the payment of the cost of acquiring, constructing, and installing each Project will be made by the issuance and sale from time to time of a Series (as defined in the Trust Agreement) of Certificates of Participation issued under the Trust Agreement (the "Certificates"), which shall be secured by and be payable from the right of the Corporation to receive Basic Rent Payments (as defined in the Trust Agreement) to be made by the Board pursuant to the Lease Agreement and related Lease Schedule; and
WHEREAS, at the request of the Board and the Corporation, the Trustee has agreed to deliver a Series of Certificates pursuant to and upon receipt of a Request and Authorization (as
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Appendix to page 107 20 defined in the Trust Agreement) from the Corporation and the Board and the terms of this Series 2020A Supplemental Trust Agreement; and
WHEREAS, the Corporation has assigned by outright assignment to the Trustee all of its right, title and interest in and to the Lease Agreement and the Lease Payments (as defined in the Trust Agreement), other than its rights of indemnification, its obligations pursuant to Section 6.03 of the Lease Agreement, and its right to enter into Lease Schedules from time to time, pursuant to the Series 2020A Assignment Agreement, dated as of May 1, 2020 (the "Series 2020A Assignment"), between the Corporation and the Trustee; and
WHEREAS, each Series of Certificates shall be secured independently from each other Series of Certificates; and
WHEREAS, the Board has caused the Trustee to execute, authenticate, and deliver, under the Trust Agreement, the Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by The School Board of Bay County, Florida (the "Series 2020A Certificates"); and
WHEREAS, the proceeds of the Series 2020A Certificates will be principally used to finance the cost of acquisition, construction, and installation of various educational facilities (the "Series 2020A Project"), as more particularly described in Lease Schedule No. 2020A (as defined herein); and
WHEREAS, the Trustee has received a Request and Authorization from the Corporation and the Board relating to the issuance of the Series 2020A Certificates; and
WHEREAS, the proceeds of the Series 2020A Certificates shall be deposited into the Series 2020A Subaccount of the Project Account and the Series 2020A Subaccount of the Cost of Issuance Account established pursuant to the Trust Agreement; and
WHEREAS, in consideration for the deposit of such funds, the Board has agreed to enter into a Lease Schedule No. 2020A (the "Lease Schedule No. 2020A" and together with the Lease Agreement, the "Series 2020A Lease"), with the Corporation, whereby the Board will lease the Series 2020A Project and agree to make Basic Rent Payments sufficient to pay the Principal Component of and Interest Component on the Series 2020A Certificates; and
WHEREAS, the Series 2020A Certificates shall be secured in the manner provided in the Trust Agreement and shall have the terms and provisions contained in this Series 2020A Supplemental Trust Agreement; and
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Appendix to page 107 21 WHEREAS, all things necessary to make the Series 2020A Certificates, when authenticated by the Trustee and issued as provided herein and in the Trust Agreement, the valid, binding and legal obligations according to the terms thereof, have been done and performed, and the creation, execution, and delivery of this Series 2020A Supplemental Trust Agreement, and the creation, execution, and issuance of the Series 2020A Certificates subject to the terms hereof, have in all respects been duly authorized;
NOW, THEREFORE, THIS SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT WITNESSETH:
ARTICLE I DEFINITIONS
Section 101. Definitions.
Words and terms which are defined in the Trust Agreement shall have the same meanings ascribed to them when used herein, unless the context or use indicates a different meaning or intent. In addition to the words and terms elsewhere defined in this Series 2020A Supplemental Trust Agreement, the following words and terms as used in this Series 2020A Supplemental Trust Agreement shall have the following meanings unless the context or use indicates another or different meaning or intent:
"Lease Agreement" means the Master Lease-Purchase Agreement, dated as of November 1, 1994, by and between the Corporation and the Board as supplemented by the Lease Schedule No. 2020A.
"Lease Schedule No. 2020A" means the Lease Schedule No. 2020A relating to the financing of the Series 2020A Project, dated as of May 1, 2020, between the Corporation and the Board, and which shall be part of the Lease Agreement.
"Master Trust Agreement" means the Master Trust Agreement, dated as of November 1, 1994, by and among the Corporation, the Board and the Trustee.
"Related Documents" means the Master Trust Agreement, this Series 2020A Supplemental Trust Agreement, the Lease Agreement, the Series 2020A Ground Lease Agreement, and the Series 2020A Lease Assignments.
"Series 2020A Account of the Prepayment Fund" means the account established in the Prepayment Fund pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
"Series 2020A Certificates" means the Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) Evidencing an Undivided Proportionate 25015/014/01587088.DOCv2 3
Appendix to page 107 22 Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by The School Board of Bay County, Florida.
"Series 2020A Ground Lease Agreement" means the Series 2020A Ground Lease Agreement, dated as of May 1, 2020, by and between the Board and the Corporation, as amended and supplemented, and relating to the Series 2020A Project.
"Series 2020A Lease Assignments" means, collectively, the Series 2020A Assignment Agreement, dated as of May 1, 2020, between the Corporation to the Trustee, and the Series 2020A Assignment of Ground Lease Agreement, dated as of May 1, 2020, between the Corporation and the Trustee.
"Series 2020A Pledged Accounts" means the Series 2020A Subaccount of the Interest Account, the Series 2020A Subaccount of the Principal Account, the Series 2020A Subaccount of the Project Account, and the Series 2020A Account of the Prepayment Fund.
"Series 2020A Project" means the educational facilities in the District more particularly described on Schedule B to the Lease Schedule No. 2020A to the Lease Agreement.
"Series 2020A Subaccount of the Costs of Issuance Account" means the subaccount established in the Costs of Issuance Account pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
"Series 2020A Subaccount of the Interest Account" means the subaccount established in the Interest Account pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
"Series 2020A Subaccount of the Principal Account" means the subaccount established in the Principal Account pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
"Series 2020A Subaccount of the Project Account" means the subaccount established in the Project Account pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
"Series 2020A Supplemental Trust Agreement" means this instrument, as amended and supplemented.
ARTICLE II. THE SERIES 2020A CERTIFICATES
Section 201. Authorization of Series 2020A Certificates.
There is hereby created a Series of Certificates to be issued under the Trust Agreement 25015/014/01587088.DOCv2 4
Appendix to page 107 23 to be known as "Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida." The aggregate Principal Component of Series 2020A Certificates which may be issued is hereby expressly limited to $______. The Series 2020A Certificates shall be issued for the purposes of (i) funding a portion of the Costs of the Series 2020A Project, and (ii) paying Costs of Issuance of the Series 2020A Certificates. The Series 2020A Certificates shall bear interest from their dated date and shall be issuable as fully registered Series 2020A Certificates without coupons in denominations of $5,000 and integral multiples thereof. The Series 2020A Certificates shall be lettered and numbered R-1 and upward.
(b) Each Series 2020A Certificate shall be dated as of its date of delivery. Interest on the Series 2020A Certificates shall be payable on each Payment Date, commencing January 1, 2021. The Series 2020A Certificates shall be payable in the manner provided in the Trust Agreement.
(c) The Series 2020A Certificates shall bear Interest Component at the respective rates and shall mature on July 1 of each of the years in the respective Principal Components set opposite each year in the following schedule:
Year (July 1) Amount
(f) The Series 2020A Certificates shall be substantially in the form set forth in Exhibit B to the Trust Agreement, with such changes as may be necessary to conform the provisions of this Series 2020A Supplemental Trust Agreement.
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Appendix to page 107 24 Section 202. Issuance of Series 2020A Certificates
The Series 2020A Certificates shall be issued upon delivery to the Trustee of the documents referred to in Section 4.02(a) of the Trust Agreement and the payment of the purchase price therefor.
Section 203. Series 2020A Project
Upon delivery of the Series 2010A Certificates, the proceeds will be used to acquire, construct and install the Series 2020A Project as provided in the Trust Agreement and the Lease Agreement.
Section 204. Letter of Instructions
Attached hereto as Schedule 1 is the Letter of Instructions relating to the Series 2020A Certificates as required by Section 6.12 of the Trust Agreement. The Trustee and the Board agree to abide by the provisions of such Letter of Instructions to the extent applicable to each in accordance with and to the extent of the terms of the Trust Agreement.
ARTICLE III. APPLICATION OF SERIES 2020A CERTIFICATE PROCEEDS
Section 301. Application of Series 2020A Certificate Proceeds.
(a) The proceeds of the Series 2020A Certificates shall be applied by the Trustee as follows:
(i) Deposit to the credit of the Series 2020A Subaccount of the Project Account an amount equal to $______; and
(ii) Deposit to the credit of the Series 2020A Subaccount of the Costs of Issuance Account an amount equal to the Costs of Issuance of $______.
(b) All moneys on deposit in the Subaccounts described in this Section shall be applied in accordance with the terms hereof and shall be disbursed by the Trustee in the manner and for the purposes described in the Trust Agreement.
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Appendix to page 107 25 ARTICLE IV. ESTABLISHMENT OF SERIES 2020A PLEDGED ACCOUNTS
Section 401. Establishment of Series 2020A Pledged Accounts.
In accordance with Section 6.02(b) of the Trust Agreement, there is hereby established with the Trustee, solely for the benefit of the Owners of the Series 2020A Certificates, the following account and subaccounts:
(a) The "School Board of Bay County, Florida Master Lease Series 2020A Subaccount of the Costs of Issuance Account".
(b) The "School Board of Bay County, Florida Master Lease Series 2020A Subaccount of the Interest Account".
(c) The "School Board of Bay County, Florida Master Lease Series 2020A Subaccount of the Principal Account".
(d) The "School Board of Bay County, Florida Master Lease Series 2020A Account of the Prepayment Fund."
(e) The "School Board of Bay County, Florida Master Lease Series 2020A Subaccount of the Rebate Fund."
(f) The "School Board of Bay County, Florida Master Lease Series 2020A Subaccount of the Project Account."
The moneys on deposit in the Account and Subaccounts described in this Section shall be disbursed by the Trustee in the manner and for the purposes described in the Trust Agreement. The moneys in the Series 2020A Pledged Accounts shall be invested solely in the Permitted Investments.
Section 402. Security for Series 2020A Certificates.
The Series 2020A Certificates shall be secured in the manner provided in the Trust Agreement and shall receive all the benefits of the Trust Estate created thereunder; provided, such portion of the Trust Estate (i) which is derived from the sale, re-letting or other disposition of the Series 2020A Project shall be utilized solely for the benefit of the Owners of the Series 2020A Certificates; and (ii) and any cash, securities and investments in the Series 2020A Pledged Accounts shall be utilized solely for the benefit of the Owners of the Series 2020A Certificates. The Owners of the Series 2020A Certificates shall have no claim against, nor receive any benefits from, any portion of the Trust Estate derived from the sale, re-letting or other disposition of 25015/014/01587088.DOCv2 7
Appendix to page 107 26 Projects, other than the Series 2020A Project (excluding Designated Equipment, if any), or any cash, securities and investments in the Pledged Accounts, other than the Series 2020A Pledged Accounts.
Section 403. No Reserve Account.
No subaccounts of the Reserve Account with respect to the Series 2020A Certificates shall be required to be established.
ARTICLE V. PREPAYMENT OF SERIES 2020A CERTIFICATES
Section 501. Prepayment Dates and Prices of Series 2020A Certificates.
(a) The Series 2020A Certificates are subject to prepayment only as provided in this Section 501.
(b) The Series 2020A Certificates are not subject to extraordinary mandatory prepayment prior to maturity pursuant to Section 5.08(c) of the Lease Agreement.
(c) [insert optional prepayment]
(d) Notwithstanding any provisions of the Trust Agreement to the contrary, notice of any prepayment of the Series 2020A Certificates may state that the proposed prepayment is conditioned on there being on deposit in the applicable fund or account on the prepayment date sufficient funds to pay the full prepayment price of the Series 2020A Certificates to be prepaid or any other conditions as may be set forth in such notice of prepayment. In the event the conditions stated in the notice of prepayment are not satisfied on the proposed prepayment date, such prepayment shall not occur and such notice of prepayment shall be of no further force or effect. Except as provided herein, the Series 2020A Certificates shall be called for redemption upon the notice and in the manner provided in Article V of the Trust Agreement. Any partial prepayments shall be applied to the outstanding principal portion of the Series 2020A Certificates in inverse order of maturity or Amortization Installments.
ARTICLE VI. MISCELLANEOUS
Section 601. Provisions Of Trust Agreement Not Otherwise Modified.
Except as expressly modified or amended hereby, the Trust Agreement shall remain in full force and effect. To the extent of any conflict between the terms of the Trust Agreement and this Series 2020A Supplemental Trust Agreement, the terms hereof shall control.
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Appendix to page 107 27 Section 602. Third Party Beneficiaries.
Nothing in this Series 2020A Supplemental Trust Agreement, express or implied, is to or shall be construed to confer upon or to give to any person or party other than the Corporation, and its assignee, the Trustee, and the Board any rights, remedies or claims under or by reason of this Series 2020A Supplemental Trust Agreement or any covenants, condition or stipulation hereof; and all covenants, stipulations, promises and agreements in this Series 2020A Supplemental Trust Agreement contained by or on behalf of the Corporation or the Board shall be for the sole and exclusive benefit of the Corporation, and its assignee, the Purchaser, and the Board.
Section 603. Counterparts.
This Series 2020A Supplemental Trust Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 604. Headings.
Any heading preceding the text of the several Articles hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Series 2020A Supplemental Trust Agreement, nor shall they affect its meaning, construction or effect.
Section 605. Laws and Venue.
The Related Documents and the Series 2020A Certificates shall be governed by applicable federal law and the internal laws of the state of Florida. The Board and Corporation agree that certain material events and occurrences relating to the Related Documents and the Series 2020A Certificates bear a reasonable relationship to the laws of Florida and the validity, terms, performance and enforcement of the Related Documents and the Series 2020A Certificates shall be governed by the internal laws of Florida which are applicable to agreements which are negotiated, executed, delivered and performed solely in Florida. Unless applicable law provides otherwise, in the event of any legal proceeding arising out of or related to the Related Documents and the Series 2020A Certificates, the Board and the Corporation consent to the jurisdiction and venue of any court located in Bay County, Florida.
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Appendix to page 107 28 IN WITNESS WHEREOF, the parties have executed this Series 2020A Supplemental Trust Agreement by their officers thereunto duly authorized as of the date and year first written above.
HANCOCK WHITNEY BANK, A MISSISSIPPI STATE BANK, as Trustee
By: ______John C. Shiroda Vice President
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, as Lessor
By: ______Steve Moss ATTEST: President
______William V. Husfelt, III Secretary
(SEAL) THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, as Lessee
By: ______Steve Moss ATTEST: Chairman
______William V. Husfelt, III Secretary-Superintendent
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Appendix to page 107 29 SCHEDULE 1
LETTER OF INSTRUCTIONS
See Exhibit D to the Tax Certificate as to Arbitrage and the Provisions of Sections 140-150 of the Internal Revenue Code of 1986, as Amended
25015/014/01587088.DOCv2 Schedule 1-1 Appendix to page 107 30 EXHIBIT C
FORM OF SERIES 2020A GROUND LEASE
Appendix to page 107 31 SERIES 2020A GROUND LEASE AGREEMENT
by and between
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, as Lessor
and
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION as Lessee
Dated as of May 1, 2020
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Appendix to page 107 32 TABLE OF CONTENTS
PAGE
Section 1. Leased Premises...... 2 Section 2. Term...... 4 Section 3. Use of Premises...... 4 Section 4. Rental...... 5 Section 5. Ownership of Improvements and Surrender of Premises...... 6 Section 6. Board's Interest not Subject to Certain Liens...... 6 Section 7. INsurance...... 7 Section 8. Condition of Premises, Utilities, Concealed Conditions...... 7 Section 9. Limitation on Leasehold Mortgages, Assignment and Subletting...... 7 Section 10. Utility Easements...... 8 Section 11. Duties Deemed Performed...... 9 Section 12. Taxes and Fees...... 9 Section 13. Default by the Corporation...... 9 Section 14. Remedies of Board...... 10 Section 15. No Waivers...... 10 Section 16. Quiet Enjoyment ...... 10 Section 17. Terms Binding Upon Successors...... 11 Section 18. Condemnation...... 11 Section 19. Non-Merger of Leasehold...... 11 Section 20. Memorandum of Ground Lease...... 11 Section 21. Changes to Property Description...... 12 Section 22. Option to Renew...... 12 Section 23. Estoppel Certificates...... 12 Section 24. Environmental Matters...... 12 Section 25. Nonrecourse Obligation of the Corporation...... 15 Section 26. No Recourse Under Agreement...... 15 Section 27. Radon...... 15 Section 28. Use of the Term "Corporation"...... 15 Section 29. Miscellaneous...... 15
Exhibit A Description of Premises A-1 Exhibit B Description of Servient Property B-1 Exhibit C Form of Ground Lease Supplement C-1 Exhibit D List of Certain Definitions D-1
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Appendix to page 107 33 GROUND LEASE AGREEMENT
THIS SERIES 2020A GROUND LEASE AGREEMENT (hereinafter referred to as the "Ground Lease") is made and entered into as of May 1, 2020 by and between THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, a school board duly organized and existing under the laws of the State of Florida (the "Board"), as lessor, acting as the governing body of the Bay County School District, and the BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, a not-for-profit corporation duly organized and existing under the laws of the State of Florida (the "Corporation"), as lessee.
Capitalized terms not otherwise defined herein shall have the meanings set forth in Exhibit A to the Trust Agreement referred to herein or Exhibit D hereto.
WHEREAS, the Board is or shall be the owner of certain parcels of real property located in Bay County, Florida and described in Exhibit A hereto, as the same may be amended from time to time by the addition of parcels of land to be acquired by the Board in the future pursuant to one or more supplements to this Ground Lease (which, together with any easements or other rights or privileges in adjoining property inuring to the fee simple owner of such land by reason of ownership of such land and together with all parcels of real property hereafter made subject to the Ground Lease, is hereinafter referred to as the "Premises"); and
WHEREAS, the Board desires to lease purchase one or more particular educational facilities to be located on the Premises (individually and collectively, the "Series 2020A Facilities"), pursuant to Lease Schedule No. 2020A to the Lease Agreement, which schedule, upon being executed and delivered by the Board and the Corporation, together with the terms and provisions of the Lease Agreement, constitutes a separate lease (as the same may be amended or supplemented from time to time, the "Series 2020A Lease"); and
WHEREAS, the ground leasing of the Premises, the subleasing of the Premises back to the Board and the lease purchase financing of the Series 2020A Facilities are herein collectively referred to as the "Project"; and
WHEREAS, the Board is or shall be the owner of certain real property more particularly described on Exhibit B attached hereto and made a part hereof as the same may be amended from time to time by the addition of parcels of land to be acquired by the Board in the future pursuant to one or more supplements to this Ground Lease ("Servient Property") which such Servient Property now has or will hereafter have certain buildings, structures and improvements erected and situated thereon (collectively, the "Servient Buildings"); and
WHEREAS, it is anticipated that the Project may be attached to the Servient Property for pedestrian and vehicular ingress, egress and access to and from and between the Premises and the public roads adjoining the Servient Property (hereinafter referred to as "Access"); and may further be dependent upon the Servient Property for utility and other enjoyment of the Premises which such services include, but are not necessarily limited to, drainage, sewer and
25015/014/01587447.DOCv2 1 Appendix to page 107 34 water service, electric and telephone service, gas service and parking of vehicles (collectively, the "Services"); and
WHEREAS, the Corporation desires to acquire from the Board, pursuant to this Ground Lease, and the Board is willing to grant to the Corporation, the right to utilize the Servient Property to the extent reasonably necessary for Access and for the Services and the Corporation and the Board desire to provide for the structural attachment of certain of the components of the Project to the Servient Buildings;
NOW, THEREFORE, in consideration of the mutual agreements and covenants herein contained and for other valuable consideration, the parties hereto agree as follows;
SECTION 1. LEASED PREMISES. (a) Pursuant to the terms and provisions hereof, the Board hereby leases, grants, demises and transfers the Premises and the Project, other than the Designated Equipment, to the Corporation. The Board hereby agrees to make all parcels of real property on which the Project is sited part of the Premises and subject to this Ground Lease. The Board shall execute, deliver and record one or more supplements to the Ground Lease upon acquisition of each such parcel.
(b) The aforesaid leasing, granting, demising and transfer of the Premises also includes the following rights ("Premises Rights") which such Premises Rights shall be deemed to be a part of the Premises:
(i) The right to utilize the Servient Property for Access and for the Services reasonably necessary to the full use and enjoyment of the Premises; provided that the locations on the Servient Property utilized for such purposes shall be reasonably agreed upon by the Corporation and the Board; and provided, further, that the Servient Property Rights shall include, but not necessarily be limited to, the right to utilize for such purposes any portion of the Servient Property (e.g., the Servient Property Rights shall include, but not necessarily be limited to, the right to utilize for appropriate purposes, any drives, parking areas, drainage facilities or sewer, water, gas, electric or telephone lines from time to time located upon the Servient Property, together with the right to "tie-in" or "connect" thereto). If the Series 2020A Lease terminates prior to the termination of this Ground Lease, the Corporation and the Board shall each have the right to install such meters or submeters as may be reasonably appropriate to the end that the Corporation is charged for consumption of such utilities on the Premises.
(ii) The Servient Buildings and the Project may contain certain elements, features or parts which are structural elements of both the Servient Buildings and the Project (hereinafter referred to as "Common Structural Elements"). Such Common Structural Elements include, but are not necessarily limited to the following:
(A) All utility lines, ducts, conduits, pipes and other utility fixtures and appurtenances which are located on or within either the Premises or the
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Appendix to page 107 35 Project on the one hand or the Servient Property or Servient Buildings on the other hand and which, directly or indirectly, in any way, service the other.
(B) All division walls (hereinafter referred to as "Party Walls") between the Project and the Servient Buildings upon the common line between the Premises and the Servient Property (hereinafter referred to as the "Lot Line") provided that the mere fact that such a division wall is found not to be on the Lot Line shall not preclude that division wall from being the Party Wall.
(C) The roof and all roof support structures and any and all appurtenances to such roof and roof support structures including, without limitation, the roof covering, roof trim and roof drainage fixtures (collectively, the "Roofing") to the extent interrelated between the Project and the Servient Buildings. Should the Roofing of any building constituting a portion of the Project extend beyond the Lot Line, the right therefor is hereby granted and should the Roofing of the Servient Building extend beyond the Lot Line onto the Premises, the right therefor is hereby reserved.
(D) The entire concrete floor slab or wood floor system if utilized in lieu thereof and all foundational and support structures and appurtenances thereto to the extent interrelated between the Project and the Servient Buildings (collectively referred to as "Flooring"). Should the Flooring of the Project extend beyond the Lot Line, the right therefor is hereby granted and should the Flooring of the Servient Buildings extend beyond the lot line onto the Premises, the right therefor is hereby reserved.
(iii) The Premises Rights further include that right of the Project to encroach upon the Servient Property as a result of minor inaccuracies in survey, construction or reconstruction or due to settlement or movement. The encroaching Project shall remain undisturbed for as long as same exist and, for so long as such encroachment exists, that portion of the Servient Property on which same exists shall be deemed to be a part of the Premises. In addition, the Premises Rights include the right to utilize that portion of the Servient Property as may be reasonably necessary in order to maintain and repair the Project. The Premises Rights further include cross rights of support and use over, upon, across, under, through and into Common Structural Elements in favor of the Corporation (and like rights are hereby reserved unto the Board) for the continued use, benefit and enjoyment and continued support, service, maintenance and repair of all such Common Structural Elements.
(c) Subject to the Permitted Encumbrances, the Board hereby warrants that (i) the Board owns the Premises in fee simple title, has full and insurable title to the fee estate in the Premises and owns unencumbered all such right, title and interest; (ii) all consents to or approvals of this Ground Lease required by law or any agreements or indentures binding upon the Board have been obtained; (iii) the Board has the right to lease the Premises to the
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Appendix to page 107 36 Corporation pursuant to the terms and provisions hereof and to grant to the Board the Premises Rights; and (iv) this Ground Lease complies with all the requirements and restrictions of record applicable to the Premises and the Servient Property. The Board represents and warrants that none of the Permitted Encumbrances has an adverse effect on the use of the Premises or the enjoyment of the leasehold estate therein created under this Ground Lease.
SECTION 2. TERM. The initial term of this Ground Lease (the "Initial Ground Lease Term") shall be for the period commencing on the Commencement Date, and ending on the earlier of (a)(i) the date on which the Series 2020A Certificates, (ii) any Certificates issued to refinance the Series 2020A Facilities and (iii) any Completion Certificates related to the Project, have been paid or provision for payment has been made pursuant to Section 12.01 of the Trust Agreement and any Supplemental Rent arising under the Series 2020A Lease shall have been paid or provided for, or (b) June 30, 20__ (both dates inclusive). As used herein, the expression "term hereof," "Ground Lease Term" or any similar expression refers collectively to the Initial Ground Lease Term and to any renewals of the Initial Ground Lease Term exercised by the Corporation or its assignee as provided in Section 22 hereof.
SECTION 3. USE OF PREMISES. (a) It is the express intent of the parties hereto that, for as long as no Event of Default or Event of Non-Appropriation under the Series 2020A Lease has occurred:
(i) the Premises shall be used by the Corporation as the site for acquisition, construction and installation of the Buildings comprising a portion of the Project;
(ii) the Buildings and Equipment comprising a portion of the Project shall be acquired, constructed and installed by the Board as agent for the Corporation as provided in Section 3.08 of the Series 2020A Lease; and
(iii) title to the Premises and the Project, other than Designated Equipment, shall be subject in all respects to the leasehold estate granted by the Board to the Corporation pursuant to Section 1 hereof, until the earlier of (A) the date on which the Series 2020A Certificates issued under the Trust Agreement shall no longer be Outstanding, and (B) the end of the Ground Lease Term.
(b) If the Series 2020A Lease has been terminated, the Corporation and each Permitted Transferee (as defined in Section 9(b) hereof) may use the Premises for any lawful purpose, in its sole discretion, and may alter, modify, add to or delete from the portions of the Project existing from time to time on the Premises.
(c) Neither the Corporation nor any Permitted Transferee shall use or permit the Premises to be used in violation of any valid present or future laws, ordinances, rules or regulations of any public or governmental authority at any time applicable thereto.
(d) The Board may at any time place portable educational facilities on the Premises.
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Appendix to page 107 37 SECTION 4. RENTAL. (a) So long as the Series 2020A Lease has not been terminated, the Corporation or its assignee shall pay to the Board as and for rental, but solely from the sources set forth herein and in the Series 2020A Lease (it being understood that the obligation of the Corporation to pay rent hereunder is a special, limited and nonrecourse obligation of the Corporation) for the Premises the sum of ten dollars ($10.00) per annum, which sum shall be due in advance on the Commencement Date (pro rated) and annually thereafter on the first day of each Renewal Lease Term.
(b) From and after the date on which the Series 2020A Lease has been terminated, the Corporation or its assignee shall pay as and for rental for the Premises an amount determined by an M.A.I. appraisal to be the fair market rental for the Premises (the "Appraisal"), which Appraisal shall be prepared by an appraiser selected by the Trustee as assignee of the Corporation and approved by the Credit Enhancer, if any, and so long as such Credit Enhancer, if any, is not in default of its payment obligations; provided, however, that such fair market rental and the payment thereof shall be subject to the following adjustments and conditions:
(i) if the Series 2020A Lease has been terminated on a date other than June 30 of any year, the fair market rental determined pursuant to the Appraisal shall be pro rated for the number of days between the date terminated and the next succeeding June 30;
(ii) for each twelve-month period beginning on the July 1 next succeeding the date on which terminated and beginning on each succeeding July 1, the amount of the fair market rental determined by the Appraisal shall be adjusted by the percentage (positive or negative) which is equal to the Implicit Price Deflator of the Consumer Price Index published by the United States Department of Commerce for the region of the United States where Florida is located or for the United States as a whole if not so published for such region;
(iii) the fair market rental due in any year shall be paid in the current year only to the extent that the moneys received by the Trustee as assignee of the Corporation from the exercise of the remedies permitted under the Series 2020A Lease during the preceding twelve months prior to such July 1 exceeded the amounts due the Trustee under the Series 2020A Lease and the Principal and Interest Requirements for such preceding twelve months; provided, however, that any portion of such fair market rental not paid in any year due to the provisions of this clause (iii) shall remain due and payable and shall accumulate from year to year and shall be paid in any future years to the extent that moneys received in such year from the exercise of the remedies permitted by the Series 2020A Lease exceed the Principal and Interest Requirements and the fair market rental due in such years; and
(iv) the failure to pay any portion of the fair market rental in any year due to insufficiencies of moneys realized from the exercise of the remedies permitted under the
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Appendix to page 107 38 Series 2020A Lease (A) shall not give rise to any obligation to pay interest on such unpaid fair market rental, and (B) shall not constitute a default under this Ground Lease by the Corporation or the Trustee as the assignee of the Corporation.
SECTION 5. OWNERSHIP OF IMPROVEMENTS AND SURRENDER OF PREMISES. (a) The Corporation or its assignee shall at all times during the Ground Lease Term have a leasehold estate in the Premises and the Project (other than the Designated Equipment) with full right to vest the use, enjoyment and possession of such leasehold estate therein in a Permitted Transferee.
(b) Possession and use of the Premises, together with all improvements thereon, shall, upon the last day of the Ground Lease Term or earlier termination of this Ground Lease, automatically revert to the Board free and clear of liens and encumbrances other than Permitted Encumbrances without necessity of any act by the Corporation or any Permitted Transferee. Upon such termination of this Ground Lease, the Corporation or its assignee shall peaceably and quietly surrender to the Board the Premises together with any improvements located in or upon the Premises. Upon such surrender of the Premises, the Corporation or any Permitted Transferee, at the reasonable request of the Board, shall execute an instrument in recordable form evidencing such surrender and shall deliver to the Board all books, records, construction plans, surveys, permits and other documents relating to, and necessary or convenient for, the operation of the Premises and the improvements thereof in the possession of the Corporation or any Permitted Transferee.
(c) Any personal property of the Corporation, any Permitted Transferee or any Person which shall remain on the Premises after expiration or earlier termination of the Ground Lease Term and for thirty (30) days after request by the Board for removal, shall, at the option of the Board, be deemed to have been abandoned and may be retained by the Board and the same may be disposed of, without accountability, in such manner as the Board may see fit.
(d) If the Corporation or any Permitted Transferee holds over or refuses to surrender possession of the Premises after expiration or earlier termination of this Ground Lease, the Corporation or any Permitted Transferee shall be a tenant at sufferance and shall pay a rental rate equal to the fair market rental of the Premises determined in the manner provided in Section 4(b) hereof.
(e) The provisions of Section 5(a), 5(b) and 5(c) hereof shall not apply to vending machines or other commercial equipment or trade fixtures located in or about the Premises to the extent that such equipment is readily removable from the Premises without causing material harm or damage thereto and that such equipment is not owned by the Corporation or any Permitted Transferee.
SECTION 6. BOARD'S INTEREST NOT SUBJECT TO CERTAIN LIENS. It is mutually intended, stipulated and agreed that neither the fee simple title to nor any interest of the Board in the Premises or the Project may be subject to liens of any nature arising by reason
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Appendix to page 107 39 of any act or omission of the Corporation or any Person claiming under, by or through the Corporation, including, but not limited to, mechanics' and materialmen's liens.
SECTION 7. INSURANCE. The Corporation covenants and agrees with the Board that the Corporation will cooperate with the Board in providing any information within the Corporation's control necessary for the Board to obtain and maintain in full force and effect insurance coverages desired by the Board or required by the Series 2020A Lease.
SECTION 8. CONDITION OF PREMISES, UTILITIES, CONCEALED CONDITIONS. (a) Except with regard to any environmental conditions and subject to the provisions of this Section 8, the Corporation agrees to accept the Premises in their presently existing condition, "as is."
(b) It is understood and agreed that the Board has determined that the Premises will safely or adequately support the Project, and hereby certifies same to the Corporation.
(c) The Board, at its sole expense, shall bring or cause to be brought to the Premises adequate connections for water, electrical power, storm sewerage and sewerage, and shall arrange with the appropriate utility companies for furnishing such services and shall provide to the Premises water service and capacity sufficient for operation, heating, ventilation and air conditioning equipment, and to the extent necessary to permit the Board to use the Project for the purposes intended or to permit such Project to comply with all requirements of law, the Corporation will provide and construct (but only to the extent of the proceeds of the Series 2020A Certificates available therefor) such roads, streets, sidewalks and other methods of ingress and egress necessary therefor. Nothing herein shall prohibit the Board from dedicating any such utilities or roads, streets and sidewalks to the appropriate governmental authority or duty constituted investor-owned utility as required or permitted by law, and the Corporation or the Trustee as assignee of the Corporation shall cooperate in such dedication by executing any deeds or other instruments required to effect such dedication.
SECTION 9. LIMITATION ON LEASEHOLD MORTGAGES, ASSIGNMENT AND SUBLETTING. (a) If the Series 2020A Lease has been terminated and subject to the terms and conditions herein provided, the Corporation or its assignee may enter into a mortgage or mortgages of the leasehold estate created hereby in the Premises and the Project (other than the Designated Equipment) as security for the performance of its obligations under any financing obtained by the Corporation or its assignee; provided, however, the fee title to the Premises and the Project shall not be subject to, or otherwise encumbered by, any such mortgage; provided, however, that each such leasehold mortgage shall be subject to the provisions of Section 9(d) hereof. Any such mortgage executed by the Corporation or its assignee pursuant to the provisions of the preceding sentence shall be hereinafter called a "Leasehold Mortgage" and the holder of any such mortgage shall be hereinafter called the "Leasehold Mortgagee."
(b) Except as expressly provided in this Section 9(b), the Corporation or its assignee shall not assign this Ground Lease, or any portion hereof, or sublease all or any portion of the
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Appendix to page 107 40 Premises or the Project at any time. Except as expressly permitted in this Section 9(b), any purported assignment, partial assignment or sublease without the Board's prior written consent in violation of this Section 9(b) shall be null and void. So long as the Series 2020A Lease has not been terminated, (i) the Corporation may assign this Ground Lease to the Trustee for the benefit of the Owners of the Series 2020A Certificates, and (ii) the Corporation shall sublet all of the Premises to the Board (the "Initial Sublessee") under the Series 2020A Lease. If the Series 2020A Lease shall have been terminated, the Corporation or its assignee may sublet the Premises or assign its interest in this Ground Lease (a "Permitted Sublease") to any Person for any lawful purpose without the prior consent of the Board; provided, however, that no Permitted Sublease shall relieve the Corporation or its assignee of any of its duties or obligations hereunder without the prior written consent of the Board; provided, however, that each Permitted Sublease shall be subject to the provisions of Section 9(d) hereof. "Permitted Transferee" shall mean a sublessee or assignee permitted by this Section 9(b).
(c) If the Series 2020A Lease shall have been terminated and the Corporation or its assignee proposes to create a Permitted Sublease of any portion of its interest in this Ground Lease, the Corporation or its assignee shall provide written notice thereof to the Board containing addresses of the proposed assignee(s), sublessee(s) or transferee(s); provided, however, that failure to provide such notice shall not affect the validity or effectiveness of any Permitted Sublease to a Permitted Transferee.
(d) If the Series 2020A Lease shall have been terminated, nothing herein shall prevent the Corporation or its assignee from entering into a Leasehold Mortgage or a Permitted Sublease for the Project (other than the Designated Equipment) and individual parcels of land constituting the Premises. It shall not be necessary for a Leasehold Mortgage or a Permitted Sublease to cover all of the Premises.
SECTION 10. UTILITY EASEMENTS. So long as the Series 2020A Lease has not been terminated, the Board reserves the right to grant nonexclusive utility easement, licenses, rights- of-way and other rights or privileges in the nature of easements to others over, under, through, across or on the Premises but only to the extent reasonably necessary to provide services to the Premises or any other real property adjacent to the Premises; provided, however, that such grant and any use permitted thereby is not detrimental to the use or operation of the Premises or to any other uses permitted hereunder after the Ground Lease term, will not impose any cost upon the Corporation or its assignee, will not weaken, diminish or impair lateral or subjacent support to the improvements to the Premises including, without limitation, the Project, will not impair or diminish the security of any Leasehold Mortgagee or Permitted transferee hereunder and the Board agrees to indemnify and save harmless, but only from Available Revenues, the Corporation or its assignee and any Leasehold Mortgagee and Permitted Transferee (whether the interest of such party in the Premises arises prior or subsequent to such grants) against any loss, claim, liability or damages, including legal costs and defense arising or accruing from the use or exercise of such easement.
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Appendix to page 107 41 SECTION 11. DUTIES DEEMED PERFORMED. All obligations of the Corporation hereunder which are assumed by the Initial Sublessee shall be deemed, as between the Board and the Corporation hereunder, fully performed whether or not such Initial Sublessee actually performs same.
SECTION 12. TAXES AND FEES. (a) The Board represents and warrants that this Ground Lease is and will be exempt from ad valorem and intangible taxation. However, for as long as the Series 2020A Lease is in effect, should the Premises thereon or any interest therein ever become subject to any such taxes, the Board agrees to pay any and all such lawful taxes, assessments or charges which at any time may be levied by any federal, state, county, city, or any tax or assessment levying body upon the Premises or the Project, or any interest in this Ground Lease, or any possessory right which the Corporation or its assignee may have in or to the Premises thereon by reason of its use or occupancy thereof or otherwise.
(b) Notwithstanding the foregoing provision, either the Board or the Corporation shall, after notifying the other party hereto of its intention to do so, have the right in its own name or behalf, or in the name and behalf of the other party hereto, to contest in good faith by all appropriate proceedings the amount, applicability or validity of any such tax or assessment, and in connection with such contest, the Board may refrain from paying such tax or assessment. Each party shall, upon request by the other party hereto, assist and cooperate with the other party hereto in any such proceedings.
(c) In the event that the Board shall fail to pay any of the items required under this Section 12, the Corporation may, at its sole option, pay the same and any amounts so advanced therefor by it shall become an additional obligation of the Board and Supplemental Rent under the Series 2020A Lease.
SECTION 13. DEFAULT BY THE CORPORATION. (a) Each of the following events shall be deemed a default by the Corporation hereunder and a breach of this Ground Lease:
(i) if the Corporation or its assignee shall fail to pay, when due, any rent or portion thereof, or any other sum, if any, which the Corporation or its assignee is obligated to pay under the terms and provisions of this Ground Lease, and such rent or other sums, if any, remain unpaid for a period of thirty (3) days after receipt of written notice to the Corporation from the Board;
(ii) if the Corporation or its assignee shall attempt to mortgage the leasehold estate hereby created in violation of Section 9(a) hereof or to assign this Ground Lease, or any portion thereof, or to sublease any portion of the Premises or the Project in violation of Section 9(b) hereof; or
(iii) if the Corporation or its assignee shall use the Premises or the Project for any purposes not permitted by this Ground Lease, and such use shall continue for a period of thirty (30) days after the Board shall have given written notice to the Corporation to desist from such use.
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Appendix to page 107 42 (b) In the event that the item of default set forth in Section 13(a)(iii) above is of such a nature that it cannot be remedied within the time limits therein set forth, then the Corporation or its assignee shall have such additional time as is reasonably necessary to cure such default, provided the Corporation or its assignee diligently commences the curing of such default within said time limits and proceeds to completely cure the same in a timely and diligent manner.
(c) In the event that any Permitted Transferee or Leasehold Mortgagee exists of record at the time that a default occurs hereunder, the Board shall give notice thereof to each such Permitted Transferee and Leasehold Mortgagee and each such party shall have thirty (30) additional days from receipt of such notice to cure such default; provided, however, that if the default is of such a nature that the same cannot be cured in such time, then such party shall have such additional time as is reasonably necessary to cure such default provided that such party diligently commences the curing of such default within such time and proceeds completely to cure same within a timely and diligent manner.
SECTION 14. REMEDIES OF BOARD. Upon the occurrence of any event of default as set forth in Section 13 hereof which has not been cured (and is not in the process of being cured) under Section 13(b) or 13(c) hereof, but not otherwise, the Board may take whatever action at law or in equity may appear necessary or desirable to enforce its rights hereunder; provided, the Board shall not have the right to terminate this Ground Lease until such time as the Series 2020A Certificates have been paid or provision for payment has been made pursuant to the terms and provisions of the Trust Agreement. The Board shall have recourse solely against the leasehold estate of the Corporation or its assignee in the Premises and the Project, and any proceeds thereof, for the payment of any liabilities of the Corporation or its assignee hereunder.
SECTION 15. NO WAIVERS. No waiver by either party hereto at any time of any of the terms, conditions, covenants or agreements of this Ground Lease, or noncompliance therewith, shall be deemed or taken as a waiver at any time thereafter of the same, nor of any other term, condition, covenant or agreement herein contained, nor of the strict and prompt performance thereof by the other party hereto. No delay, failure or omission of the Board to re- enter the Premises, nor by either party hereto to exercise any right, power, privilege or option arising from any default shall impair any right, power, privilege or option, or be construed to be a waiver of any such default, relinquishment thereof or acquiescence therein, and no notice by either party hereto shall be required to restore or revive time as being of the essence hereof after waiver by the Board of default in one or more instances. No option, right, power, remedy or privilege of the Board shall be construed as being exhausted or discharged by the exercise thereof in one or more instances. It is agreed that each and all of the rights, powers, options or remedies given to each party by this Ground Lease are cumulative, and no one of them shall be exclusive of the other or exclusive of any remedies provided by law.
SECTION 16. QUIET ENJOYMENT. The Board agrees that the Corporation or its assignee and any Permitted Transferee, upon the payment of the rent and all other payments
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Appendix to page 107 43 and charges, if any, to be paid by the Corporation under the terms of this Ground Lease, and observing and keeping the agreements and covenants of this Ground Lease on its part to be observed and kept, shall lawfully and quietly hold, occupy and enjoy the Premises and the Project during the term of this Ground Lease, without hindrance or molestation from the Board or anyone claiming by, through or under the Board.
SECTION 17. TERMS BINDING UPON SUCCESSORS. All the terms, conditions and covenants of this Ground Lease shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto.
SECTION 18. CONDEMNATION. In the event that any Person, public or private, shall by virtue of eminent domain or condemnation proceedings, or by purchase in lieu thereof, at any time during the term of this Ground Lease acquire title to the Premises or the Project:
(a) For as long as the Series 2020A Lease has not been terminated, the Net Proceeds resulting therefrom shall be applied pursuant to the Series 2020A Lease.
(b) If the Series 2020A Lease shall have been terminated, (i) if such Person acquires title to such substantial portion thereof that the Corporation determines that it cannot economically make use of the residue for the lawful purposes intended by this Ground Lease, such acquisition of title shall terminate this Ground Lease, effective as of the date on which the condemning party takes possession thereof, and the Net Proceeds resulting therefrom shall be applied first to payment of the amount secured by any Leasehold Mortgage then outstanding hereunder, second, to payment of any outstanding Series 2020A Certificates, and, third, the balance, if any shall be paid to the Board and the Corporation, as their respective interests may appear; and (ii) if such Person acquires title to a portion of the Premises or the Project only, and the Corporation determines that it can economically make beneficial use of the residue thereof for the lawful purposes intended by this Ground Lease, then this Ground Lease shall continue in full force and effect and the Net Proceeds resulting therefrom shall be paid to the Board and the Corporation, as their respective interests appear.
(c) It is understood that the foregoing provisions of this Section 18 shall not in any way restrict the right of the Board or the Corporation to appeal the award made by any court or other public agency in any condemnation proceeding.
SECTION 19. NON-MERGER OF LEASEHOLD. There shall be no merger of this Ground Lease or of the leasehold estate hereby created with the fee estate in the Premises and the Project or any part thereof by reason of the fact that the same Person may acquire or hold, directly or indirectly, this Ground Lease or leasehold estate hereby created or any interest in this Ground Lease or in such leasehold estate and the fee estate in the Premises and the Project or any interest in such fee estate.
SECTION 20. MEMORANDUM OF GROUND LEASE. Unless mutually agreed to the contrary, simultaneously with the execution of this Ground Lease, the Board and the Corporation shall each execute, acknowledge and deliver a Memorandum of Ground Lease
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Appendix to page 107 44 with respect to this Ground Lease. Said Memorandum of Ground Lease shall not in any circumstances be deemed to change or otherwise to affect any of the obligations or provisions of this Ground Lease.
SECTION 21. CHANGES TO PROPERTY DESCRIPTION. The Board reserves the right to substitute other land for, or add land to all or any portion of the Premises described in Exhibit A hereto, as same may be supplemented by supplements to this Ground Lease from time to time. The Board will do so only after notice and public hearing and subsequent adoption of a resolution in accordance with the Act. Upon such substitution the Memorandum of Ground Lease will be supplemented to reflect the change in legal description. Any such supplement shall be substantially in the form of Exhibit C attached hereto. Each substitution of a parcel of land subject to the provisions of this Ground Lease shall require the Consent of the Credit Enhancer, if any. Such consent by the Credit Enhancer, if any, shall be required only if such Credit Enhancer is not in default of its payment obligations under its Credit Facility.
SECTION 22. OPTION TO RENEW. In the event that the Series 2020A Lease shall have been terminated, and the Corporation, or the Trustee as the assignee of the Corporation, excludes the Board from possession of the Project, the Board grants to the Corporation, or the Trustee as the assignee of the Corporation, the right and option to renew this Ground Lease for a period not to exceed five years at a fair market rental to be determined, adjusted and paid in the manner and under the conditions set forth in Section 4(b) of this Ground Lease.
SECTION 23. ESTOPPEL CERTIFICATES. The Board, at any time and from time to time, upon not fewer than thirty (30) days prior written notice from the Corporation, the Trustee as assignee of the Corporation or the Credit Enhancer, if any, will execute, acknowledge and deliver to the Corporation, the Trustee as assignee of the Corporation or any Permitted Transferee, a certificate of the Board certifying that this Ground Lease is unmodified (or, if there have been any modifications, identifying the same), that this Ground Lease is in full force and effect, if it is; and that there is no default hereunder (or, if so, specifying the default). It is intended that any such certificate may be relied upon by the Corporation or the Trustee as assignee of the Corporation or any Permitted Transferee.
SECTION 24. ENVIRONMENTAL MATTERS. The Corporation hereby represents, warrants and covenants to and for the benefit of the Board that following an event of default or non-appropriation under the Series 2020A Lease and during the Ground Lease Term:
(a) the location, construction, occupancy, operation, condition and use of any improvements to the Premises will not violate any applicable law, statute, ordinance, rule, regulation, order or determination of any Governmental Authority, or any restrictive covenant or deed restriction (recorded or otherwise) affecting same, including without limitation all applicable zoning ordinances and building codes, flood disaster, occupational health and safety laws and Environmental Laws;
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Appendix to page 107 45 (b) without limitation of clause (a) immediately above, it will not take any action or refrain from taking any action that would cause such improvements or the Corporation to be in violation of or subject to any existing, pending or threatened investigation, request for information, administrative or consent order or agreement, litigation or settlement by any Governmental Authority or subject to any investigatory or remedial obligations under any Environmental Laws or the common law with respect to the presence or suspected presence of Hazardous Materials Contamination;
(c) it will not take any action or refrain from taking any action that would cause it to be subject to any liability or obligation relating to: (i) the environmental conditions on, under or about the Series 2020A Facilities and the Premises, including without limitation, the air, soil, surface and groundwater conditions; or (ii) the use, management, handling, transport, treatment, generation, storage, disposal, release of discharge of any Hazardous Materials;
(d) it will not do or refrain from doing anything that will require it to obtain or make application for any permits, licenses or similar authorizations to construct, occupy, operate or use, or relating to the existence of any Series 2020A Facilities and the Premises by reason of any Environmental Laws;
(e) it will take all steps necessary to determine that no Hazardous Materials will be located on the Premises or have escaped or been released into the environment, or deposited, spilled, leaked, discharged, or disposed of at, on, from, under or near such Series 2020A Facilities and the Premises or any portion thereof. No portion of such Series 2020A Facilities and the Premises will be used by any person at any time for the generation, disposal, storage, treatment, processing or other handling of Hazardous Materials, nor will any part of such Series 2020A Facilities and the Premises be affected by any Hazardous Materials Contamination;
(f) it will cause each of its contractors, tenants and invitees, including any manager of any improvements of the Premises, to comply in all respects with the requirements of all Governmental Authorities pursuant to Environmental Laws or the common law. The Corporation shall not cause or permit any Hazardous Materials to be brought upon or kept or used on or about the Premises in violation of any Environmental Law or which results in any Hazardous Materials Contamination;
(g) it agrees to immediately notify the Board and to provide the Board with copies of any notifications of discharges or releases or threatened releases or discharges of a Hazardous Material on, upon, into, or from the Premises which are given or required to be given by or on behalf of the Corporation to any Governmental Authorities. Such copies of notifications shall be delivered to the School Board at the same time as they are delivered to the Governmental Authorities. The Corporation further agrees promptly to undertake and diligently pursue to completion any appropriate and legally required or authorized investigation, abatement and remedial containment and cleanup action in the event of any release or discharge, or threatened release or discharge, of a Hazardous Material on, upon, into or from the Premises;
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Appendix to page 107 46 (h) if it shall become aware of or receive notice or other communication concerning any actual, alleged, suspected or threatened violation of Environmental Laws, or liability for any Hazardous Materials Contamination in connection with the Premises or past or present activities of any person thereon, or that any representation set forth in this Section 24 is not or is no longer accurate, including but not limited to notice or other communication concerning any actual or threatened investigation, inquiry, lawsuit, notice, order, writ, or injunction, relating to same, then the Corporation shall deliver to the Board and its assignees, within ten (10) days of the receipt of such notice or communication, a written description of said violation, liability, correcting information, or actual or threatened event or condition, together with copies of any documents evidencing same. Receipt of such notice shall not be deemed to create any obligation on the part of the Board and its assignees to defend or otherwise respond to any such notification;
(i) in the event of any Hazardous Materials Contamination, the Hazardous Materials Contamination shall be immediately remediated by the Corporation and all Hazardous Materials removed from the Premises as required by and in accordance with all Environmental Laws and as necessary to safeguard the public health and the environment, at the Corporation's sole cost and expense. In the course of remediating any Hazardous Material Contamination, or in the event the Corporation is required to remove Hazardous Materials from the Premises by any Governmental Authority, such Hazardous Materials shall be handled, removed, used or disposed or in accordance with all Environmental Laws and prudent industry practices regarding management of such Hazardous Materials;
(j) except in strict compliance with all Environmental Laws, the Corporation shall not cause, permit or suffer any Hazardous Material to be brought upon, treated, kept, stored, disposed of, discharged, released, produced, manufactured, generated, refined or used upon, about or beneath the Premises or any portion thereof by it or by its respective agents, employees, contractors, tenants or invitees, or any other person;
(k) it shall not cause, permit or suffer the existence or the commission by it or by its respective agents, employees, contractors, tenants or invitees, or by any other person of a violation of any Environmental Laws or Hazardous Materials Contamination upon, about or beneath the Premises or any portion thereof; and
(l) it shall not create, or suffer to exist with respect to the Premises, any Lien, security interest or other charge or Encumbrance imposed pursuant to CERCLA or any similar Environmental Law.
Notwithstanding anything herein to the contrary, neither the Corporation nor the Trustee shall be required to remedy a violation of any Environmental Laws or any Hazardous Materials Contamination which existed prior to the termination of the Lease Term of the Series 2020A Lease. In the event that at any time the Lessee's interest hereunder shall be mortgaged, subleased or assigned to a Permitted Transferee, such Permitted Transferee shall be required to agree in writing to the provisions of this Section 24 for the benefit of the School Board. In the
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Appendix to page 107 47 event the Trustee causes a Permitted Transferee to assume the obligations set forth in this Section 24, the Trustee shall be released from such obligations. Moreover, if the Trustee expressly permits the Board to have access to the Premises following termination of the Lease Term of the Series 2020A Lease solely for the purpose of maintaining and securing (as opposed to occupying) the same, the Trustee shall have no liability under this Section 24 and the Board, as owner of the fee interest in the Premises, shall be responsible for the obligations set forth in this Section 24.
SECTION 25. NONRECOURSE OBLIGATION OF THE CORPORATION. Notwithstanding anything to the contrary herein or in any exhibit, instrument, document or paper relating to this Ground Lease or any of the transactions contemplated hereby, the parties hereto hereby acknowledge and agree that upon the assignment by the Corporation of its rights hereunder to the Trustee pursuant to the Assignment of Series 2020A Lease and Assignment of Ground Lease Agreement, the Corporation shall have no further obligation, liability or responsibility hereunder and no party hereto nor their successors or assigns shall look to the Corporation for any damages, expenses, fees, charges or claims with respect to the failure of any obligations hereunder to be performed.
SECTION 26. NO RECOURSE UNDER AGREEMENT. All covenants, stipulations promises, agreements and obligations of the parties hereto contained in this Ground Lease shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the parties hereto, respectively, and not of any member, officer, employee or agent of the parties hereto in an individual capacity, and no recourse shall be had for the payment of rent pursuant to Section 4 hereof or for any claim based thereon under this Ground Lease against any member, officer, employee or agent of the parties hereto.
SECTION 27. RADON. Section 404.056(5), Florida Statutes, requires that the following notification be given: "RADON GAS: Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in building in Florida. Additional information regarding radon and radon testing may be obtained from your county health department."
SECTION 28. USE OF THE TERM "CORPORATION". When used herein, all references to the capitalized term "Corporation" shall be deemed to include its successors in interest hereunder, including without limitation, the Trustee as assignee of the Corporation and any Permitted Transferee that succeeds to the estate of the Trustee as its successor hereunder.
SECTION 29. MISCELLANEOUS. (a) This Ground Lease shall be governed by, and be construed in accordance with, the laws of the State of Florida.
(b) Any notice required or desired to be given hereunder, or any items required or desired to be delivered hereunder, may be served or delivered personally or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
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Appendix to page 107 48 If to the Board and the Corporation: The School Board of Bay County, Florida 1311 Balboa Avenue Panama City, Florida 32401 Attention: Superintendent
If to the Trustee: Hancock Whitney Bank Corporate Trust 445 North Boulevard, Suite 201 Baton Rouge, LA 70802 Attention: Corporate Trust or such other address or party as the party to be served may direct by written notice to the other party. If such notice is sent or delivery is made by registered or certified mail, such notice or delivery shall be deemed served, made and effective seventy-two (72) hours after posting.
(c) It is mutually acknowledged and agreed by the parties hereto that this Ground Lease contains the entire agreement between the Board and the Corporation with respect to the subject matter of this Ground Lease; that there are no verbal agreements, representations, warranties or other understandings affecting the same.
(d) Nothing herein contained shall be deemed to create a partnership or joint venture, nor shall the relationship between the parties be construed as principal and agent, or other than as landlord and tenant.
(e) The table of contents, headings and captions of this Ground Lease are inserted solely for convenience of reference, and under no circumstances shall they be treated or construed as part of, or as affecting, this Ground Lease.
(f) For purposes of computing any period of a number of days hereunder for notices or performance (but not for actual days of interest) of ten (10) days or fewer, Saturdays, Sundays and holidays shall be excluded.
(g) Any provision of this instrument in violation of the laws of the State of Florida shall be ineffective to the extent of such violation, without invalidating the remaining provisions of this instrument. In no event shall the Corporation or its assigns have any cause of actions against the officers or employees of the Board, or against any elected official of the Board based upon or materially related to any finding by any court that any or all provisions of this instrument violate Florida law.
(h) Nothing in this Ground Lease, expressed or implied, is to or shall be construed to confer upon or to give to any person or party other than the Corporation, and its assignee, the Credit Enhancer, if any, and the Board any rights, remedies or claims under or by reason of this Ground Lease or any covenants, condition or stipulation hereof; and all covenants, stipulations, promises and agreements in this Ground Lease contained by or on behalf of the Corporation or
25015/014/01587447.DOCv2 16
Appendix to page 107 49 the Board shall be for the sole and exclusive benefit of the Corporation, and its assignee, the Credit Enhancer, if any, and the Board.
(i) This Ground Lease may be executed in multiple counterparts, each of which shall be regarded for all purposes as an original, and such counterparts shall constitute but one and the same instrument.
(j) This Ground Lease may not be amended or modified without the prior written consent of the Credit Enhancer, if any.
[Remainder of page intentionally left blank]
25015/014/01587447.DOCv2 17
Appendix to page 107 50 IN WITNESS WHEREOF, the Board and the Corporation have caused this Ground Lease to be executed in duplicate, either of which may be considered an original, the day and year first above written.
WITNESS: LESSOR:
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, as Lessor By: ______Name: ______
(SEAL) By: ______Name: Steve Moss Title: Chairman
ATTEST:
By: ______Name: William V. Husfelt, III Title: Secretary-Superintendent
STATE OF FLORIDA COUNTY OF BAY
The foregoing instrument was acknowledged before me by means of ☐ physical presence or ☐ online notarization, this _____ day of May, 2020, by Steve Moss and William V. Husfelt, III, as the Chairman and Secretary-Superintendent, respectively, of THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, who are personally known to me or who has produced ______as identification.
By: ______Name: ______Title or Rank: ______Serial Number: ______
25015/014/01587447.DOCv2 S-1 Appendix to page 107 51 WITNESS: LESSEE:
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, a Florida not-for-profit Corporation, By: ______as Lessee Name: ______
By: ______Name: Steve Moss Title: President ATTEST:
By: ______Name: William V. Husfelt, III Title: Secretary
STATE OF FLORIDA COUNTY OF BAY
The foregoing instrument was acknowledged before me by means of ☐ physical presence or ☐ online notarization, this _____ day of May, 2020, by Steve Moss and William V. Husfelt, III, as the President and Secretary, respectively, of the BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, a Florida not-for-profit corporation, who are personally known to me or who has produced ______as identification.
By: ______Name: ______Title or Rank: ______Serial Number: ______
25015/014/01587447.DOCv2 S-2 Appendix to page 107 52 EXHIBIT A
PREMISES DESCRIPTION
25015/014/01587447.DOCv2 C-3 Appendix to page 107 53 25015/014/01587447.DOCv2 C-4
Appendix to page 107 54 EXHIBIT "D
DEFINITIONS OF CERTAIN TERMS
"Encumbrances" shall mean any mortgage, pledge, security interest, Lien, charge, encumbrance, claim, lease, management contract, covenant, easement, restriction or other matter burdening title to applicable property.
"Environmental Assessment" shall mean an environmental site assessment conducted by a reputable, professional environmental consultant for the purpose of determining the existence, nature and extent of any Hazardous Material Contamination relating to the Premises including, but not limited to, any air, soil, surface water or groundwater sampling or other testing that may be necessary to identify and characterize any Hazardous Materials contamination.
"Environmental Laws" shall mean and include all federal, state and local statutes, ordinances, regulation and rules regulating to environmental quality, health, safety, contamination and clean-up, including without limitation, the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Clean Water Act, 33 U.S.C. Section 1251 et seq.; the Water Quality Act of 1987; the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. Section 136 et seq.; the Marine Protection, Research and Sanctuaries Act, 33 U.S.C. Section 1401, et seq.; the National Environmental Policy Act, 42 U.S.C. Section 4321 et seq.; the Noise Control Act, 48 U.S.C. Section 4901 et seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 4901 et seq., as amended by the Hazardous and Solid Waste Amendments of 1984; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act, the Emergency Planning and Community Right-to- Know Act, and Radon Gas and Indoor Air Quality Research Act; the Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the Atomic Energy Act, 42 U.S.C. Section 2011 et seq.; and the Nuclear Waste Policy Act of 1982, 42 U.S.C. Section 10101 et seq.; and state Lien and super Lien and environmental clean-up statutes, with implementing regulation and guidelines. Environmental Laws shall also include all state, regional, county, municipal and other local laws, regulations and ordinances insofar as they are equivalent or similar to the federal laws recited above or purport to regulate Hazardous Materials.
"EPA" shall mean the United States Environmental Protection Agency.
"Governmental Authority" shall mean the United States, the EPA, any state, county, city or other political subdivision, agency or instrumentality exercising executive, legislative, Judicial, regulatory or administrative jurisdiction over the Corporation, the Board or the Premises of the Series 2020A Facilities.
25015/014/01587447.DOCv2 D-1
Appendix to page 107 55 "Hazardous Materials" shall mean and include the following, including mixtures thereof: any hazardous substance, pollutant, contaminant, waste by-product or constituent regulated under "CERCLA"; oil and petroleum products and natural gas, natural gas liquids, liquefied natural gas and synthetic gas usable for fuel; pesticides regulated under "FIFRA"; asbestos and asbestos-containing materials, PCBs and other substances regulated under "TSCA;" source material, special nuclear material, by-product material and any other materials or radioactive wastes, however produced, regulated under the Atomic Energy Act or the Nuclear Waste Policy Act; chemicals subject to the OSHA Hazard Communication Standard, 29 C.F.R. 1910.1200 et seq. and any other substance regulated under any other "Environmental Law."
"Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the Series 2020A Facilities or improvements, air, soil, groundwater, surface water or other elements of the Premises or other property as a result of the presence of Hazardous Materials on the Project at any time.
"Lien,", as applied to the property of any Person, shall mean (in each case, whether the same is consensual or nonconsensual or arises by contract, operation of law, legal process or otherwise): (a) any mortgage, Lien, pledge, attachment, charge, finance lease, conditional sale or other title retention agreement, or other security interest or encumbrance of any kind in respect of any property of such Person, or upon the income or profits therefrom; and (b) any arrangement, expressed or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of securing indebtedness or performance of any other obligation in priority to the payment of the general unsecured creditors of such Person.
"Opinion of Counsel" shall mean an opinion signed by an attorney or firm of attorneys of recognized standing and who are qualified to pass on the legality of the particular matter (who may be counsel to the Board or Special Counsel) selected by the Board.
"Permitted Encumbrances" shall mean in regard to the Premises:
(i) the Series 2020A Lease and any Liens and encumbrances created or permitted thereby;
(ii) the Series 2020A Assignment Agreement and any Liens and encumbrances created or permitted thereby;
(iii) the Trust Agreement and Liens and encumbrances created or permitted thereby;
(iv) this Ground Lease and any Liens and encumbrances created or permitted thereby;
25015/014/01587447.DOCv2 D-2
Appendix to page 107 56 (v) subject to the provisions of Section 5.01 of the Series 2020A Lease, any mechanic's, laborer's, materialman's, supplier's or vendor's Lien or right in respect thereof if payment is not yet due under the contract in question or if such Lien is being contested in accordance with the provisions of the Master Lease;
(a) rights reserved to or vested in any municipality or public authority by the terms of any right, power, franchise, grant, license, permit or provision of law;
(b) any Liens for taxes, assessments, levies, fees, water and sewer rents or charges and other government and similar charges, which are not due and payable or which are not delinquent or the amount or validity of which are being contested and execution thereon is stayed;
(c) easements, rights-of-way, servitudes, restrictions, oil, gas or other mineral reservations and other minor defects, encumbrances and irregularities in the title to any property which, in the Opinion of Counsel, do not materially impair the use of such property or materially and adversely affect the value thereof or have a materially adverse affect on the benefits enjoyed by Series 2020A Certificate holders in the Premises; and
(d) rights reserved to or vested in any municipality or public authority to control or regulate any property or to use such property in any manner that does not in the Opinion of Counsel, have a materially adverse affect the use of the Premises for educational purposes or the benefits enjoyed by Series 2020A Certificate holders in the Premises; and
(vi) any other Liens or Encumbrances permitted by Lease Schedule No. 2020A relating to the Premises, provided such Lien or Encumbrance shall not, as expressed in an Opinion of Counsel, have a materially adverse affect on the intended use of such Premises by the Board for educational purposes or the benefits enjoyed by the Series 2020A Certificate holders in the Premises.
"Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof or any other entity.
25015/014/01587447.DOCv2 D-3
Appendix to page 107 57 EXHIBIT D
FORM OF SERIES 2020A PRELIMINARY OFFERING STATEMENT
25015/014/01587121.DOCv4
Appendix to page 107 58
PRELIMINARY OFFERING STATEMENT DATED ______
NEW ISSUE-BOOK ENTRY ONLY Ratings: (______Insured) (See "RATINGS" herein) In the opinion of Bryant Miller Olive P.A., Tallahassee, Florida, Special Counsel, assuming continuing compliance by the Corporation and the School Board with various covenants in the Trust Agreement and the Series 2020A Lease Agreement and Series 1999 Lease Agreement, under existing statutes, regulations, and court decisions, the Interest Component
of Basic Rent Payments (i) will be excludable from gross income of the recipients thereof for federal income tax purposes, except to extent described under the caption “TAX EXEMPTION” herein and (ii) will not be an item of tax preference for purposes of the alternative minimum tax on individuals and corporations. However, no opinion is expressed with respect to federal income tax consequences of any payments received with respect to the 2020 Certificates following termination of the Series 2020A Lease Agreement or the Series 1999 Lease Agreement as a result of an Event of Non-Appropriation or Event of Default thereunder. See “TAX EXEMPTION” herein for a discussion of Special Counsel’s opinion, including a description of the corporate alternative minimum tax.
$______* $______* CERTIFICATES OF PARTICIPATION REFUNDING CERTIFICATES OF PARTICIPATION orlaws qualification securities under the (School Board of Bay County, Florida, Master Lease Program, Series 2020A) (School Board of Bay County, Florida, Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Owners thereof in Basic Rent Payments to be made under a s delivered in final form. Underno sdelivered inform. final i Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by the School Board of Bay County, Florida the School Board of Bay County, Florida
Dated: Date of Delivery Due: July 1, as shown on the inside cover The Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) (the "2020A Certificates”) offered hereby evidence an undivided proportionate interest in Basic Rent Payments (as defined herein) to be made by The School Board of Bay County, Florida (the "School Board") under a Master Lease-Purchase Agreement, dated as of November 1, 1994 (the “Master Lease”) with the Bay County Educational Facilities Finance Corporation, a Florida not-for-profit corporation (the "Corporation"), as supplemented by Lease Schedule No. 2020A, dated as of ______1, 2020 (which Master Lease and Lease Schedule No. 2020A thereto are herein collectively referred to as the "Series 2020A Lease Agreement"), providing for the lease purchase financing of certain educational and related facilities and equipment (the "Series 2020 Project"). The Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) (the "2020B Certificates” and, together with the 2020A Certificates, the “2020 Certificates”) offered hereby evidence an undivided proportionate interest in the Basic Rent Payments to be made by the School Board under the Master Lease, as supplemented by the Se cond Amended and Restated Lease Schedule No. 1999, dated as of ______1, 2020 (which Master Lease and Second Amended and Restated Lease Schedule No. 1999 thereto are herein collectively referred to as solicitationwouldpriorsalebetoor unlawful registration the "Series 1999 Lease Agreement"), providing for the lease purchase refinancing of certain educational and related facilities and equipment (the "Series 1999 Project").
When issued, the 2020 Certificates will initially be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, New York, New York ("DTC"). Purchasers of the 2020 Certificates (the "Beneficial Owners") will not receive physical delivery of the 2020 Certificates. Ownership by the Beneficial Owners of the 2020 Certificates will be evidenced through a book-entry only system of registration. As long as Cede & Co. is the registered owner as nominee of DTC, payment of the Principal Component and Interest Component of the Basic Rent Payments represented by the 2020 Certificates will be made directly to Cede & Co. which will in turn remit such payments to the DTC Participants for subsequent disbursement to the Beneficial Owners. The Interest Component of Basic Rent Payments represented by the 2020 Certificates is payable on January 1 and July 1 of each year (each a "Payment Date"), commencing [July 1, 2020], by check or draft of Hancock Whitney Bank, a Mississippi banking corporation having an office in Baton Rouge, Louisiana, as successor Trustee, and mailed to the 2020 Certificate Owner of record at the address shown on the Certificate register. The Principal Component of Basic Rent Payments represented by the 2020 Certificates is payable upon presentation, when due, at maturity or earlier prepayment, at the designated corporate trust office of the Trustee, which, as of the date hereof, is located in Baton Rouge, Louisiana.
The 2020A Certificates are subject to optional, scheduled mandatory and extraordinary prepayment prior to their stated maturities as set forth herein. The 2020B Certificates will not be subject to redemption prior to maturity.
THE SCHOOL BOARD IS NOT LEGALLY REQUIRED TO APPROPRIATE MONEYS TO MAKE BASIC RENT PAYMENTS. THE BASIC RENT PAYMENTS AND, CONSEQUENTLY, THE CERTIFICATE PAYMENTS OF PRINCIPAL AND INTEREST ARE PAYABLE SOLELY FROM THE SCHOOL BOARD'S AVAILABLE REVENUES AND NEITHER THE CORPORATION, THE SCHOOL BOARD, THE STATE OF FLORIDA, NOR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF SHALL BE OBLIGATED TO PAY ANY SUMS DUE UNDER THE SERIES 2020A LEASE AGREEMENT OR THE SERIES 1999 LEASE AGREEMENT EXCEPT FROM AVAILABLE REVENUES APPROPRIATED FOR SUCH PURPOSE. THE BASIC RENT PAYMENTS FOR ALL LEASES UNDER THE MASTER LEASE ARE SUBJECT TO ANNUAL APPROPRIATION BY THE SCHOOL BOARD ON AN ALL-OR-NONE BASIS. THE CERTIFICATE PAYMENTS OF PRINCIPAL AND INTEREST AND THE PAYMENTS DUE FROM THE SCHOOL BOARD UNDER THE SERIES 2020A LEASE AGREEMENT AND THE SERIES 1999 LEASE AGREEMENT AND THE CONTRACTUAL OBLIGATIONS OF THE SCHOOL BOARD UNDER THE SERIES 2020A LEASE AGREEMENT AND THE SERIES 1999 LEASE AGREEMENT DO NOT CONSTITUTE A GENERAL OBLIGATION OR A PLEDGE OF THE ut notice. The 2020 Certificates may not be sold nor may offers to buy beStatement acceptedthe priorOffering toto thebuy time noroffers not utmay may 2020 notice. The be sold Certificates FAITH AND CREDIT OF THE SCHOOL BOARD, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. THE ISSUANCE OF THE 2020 CERTIFICATES WILL NOT DIRECTLY OR INDIRECTLY OBLIGATE THE SCHOOL BOARD, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF TO LEVY OR TO PLEDGE ANY FORM OF AD VALOREM shall there be any sale of the 2020A Certificates in any jurisdiction in which such offer, offer, such inthe ofjurisdiction 2020Awhich insale shall any beany there Certificates TAXATION WHATSOEVER THEREFOR AND THE OWNERS OF THE 2020 CERTIFICATES WILL HAVE NO RECOURSE TO THE POWER OF AD VALOREM TAXATION OF THE SCHOOL BOARD OR ANY OTHER GOVERNMENT ENTITY. SEE "RISK FACTORS" HEREIN.
[[The scheduled payment of principal of and interest on all, some or none of the 2020 Certificates of either Series when due will be guaranteed under separate insurance policies to be issued concurrently with the delivery of the 2020 Certificates by ______(See “CERTIFICATE OF INSURANCE” herein).
[Insert Insurance Logo]
CERTAIN ADDITIONAL INFORMATION RELATING TO THE SERIES 2020A LEASE AGREEMENT, THE SERIES 1999 LEASE AGREEMENT, THE 2019 LEASE AGREEMENT, THE 2007A LEASE AGREEMENT, AND THE 2004 LEASE AGREEMENT ARE HEREINAFTER DESCRIBED.
SEE THE INSIDE COVER PAGE FOR INFORMATION ON MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND PRICES.
This cover page and inside cover page contain certain information for quick reference only. They are not, and are not intended to be, a summary of the transaction. Investors must read the entire Offering Statement, including the appendices hereto, to obtain information essential to the making of an informed investment decision.
The 2020 Certificates are offered when, as and if delivered and received by the Underwriters, subject to approval of Bryant Miller Olive PA., Tallahassee, Florida, Special Counsel, and certain other conditions. Certain legal matters will be passed upon for the School Board and the Corporation by their counsel, Hand Arendall Harrison Sale LLC, Panama City, Florida. Certain legal matters will be passed upon by Hand Arendall Harrison Sale LLC, Mobile, Alabama, Disclosure Counsel. Nabors, Giblin & Nickerson, P.A., Tampa, Florida is acting as Counsel to the Underwriters. Ford & Associates, Inc., Tampa, Florida, is acting as Financial Advisor to the School Board. It is expected that settlement for the 2020 Certificates will occur through the facilities of DTC in New York, New York on or about ______.
RAYMOND JAMES & ASSOCIATES, INC. PNC CAPITAL MARKETS, LLC
This Offering Statement is dated ______
*Preliminary: Subject to change
Appendix to page 107 59 This Preliminary OfferingThis andcompletionPreliminary toamendmentwitho orsubjectStatement change, the informationherein are contained ofany such jurisdiction. circumstances shall this Preliminary Offering Statement constitute an offer to sell the solicitation of an offer to buy, anoffer to thesellnor constitutecircumstancesshallsolicitation Statement anthisoffer ofOffering Preliminary
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS AND INITIAL CUSIP NUMBERS
$______* CERTIFICATES OF PARTICIPATION (School Board of Bay County, Florida, Master Lease Program, Series 2020A) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida
Maturity* Principal Interest Initial CUSIP (July 1) Amount* Rate Price Yield Number**
$______* REFUNDING CERTIFICATES OF PARTICIPATION (School Board of Bay County, Florida, Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida
Maturity* Principal Interest Initial CUSIP (July 1) Amount** Rate Price Yield Number**
______*Preliminary; subject to change.
Appendix to page 107 60 ** CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS), is managed on behalf of the American Bankers Association by S&P Global Market Intelligence, a division of S&P Global, Inc. Copyright© 2018 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. The School Board and the Underwriters are not responsible for the selection, uses, or correctness (as listed above) of, or subsequent changes to, CUSIP numbers assigned to the 2020 Certificates.
Appendix to page 107 61 ADDITIONAL INFORMATION
The initial term of the Series 2020A Lease Agreement commences on the date of delivery of the 2020A Certificates and continues through and including June 30, 2020, and is automatically renewable annually through June 30, ______, unless sooner terminated as described herein. The initial term of the Series 1999 Lease Agreement commenced on the date stated therein, as extended by the Second Amended and Restated Lease Schedule No. 1999 commencing on the date of delivery of the 2020B Certificates, and continues through and including June 30, 2020, and is automatically renewable annually through June 30, ______, unless sooner terminated as described herein. The School Board may enter into other leases under the Master Lease in addition to the Series 2020A Lease Agreement and Series 1999 Lease Agreement and is currently a party to the Series 2004 Lease Agreement, dated as of July 1, 2013, the Series 2007A Lease Agreement, dated as of March 1, 2015, and the Series 2019 Lease Agreement, dated as of December 1, 2019. For Fiscal Year 2019-20, of the School District of Bay County, Florida's (the “District”) 31 total operational schools (not including charter schools located within the District), there were six schools and related facilities and two additions to school facilities leased under the Master Lease. Based on the District's full-time equivalent enrollment of approximately 19,620 students as of January 17, 2020, approximately 22.9% of the District's students are attending classes in, or otherwise utilize, Projects leased under the Master Lease during the Fiscal Year 2019-20. Such percentage does not include the students expected to attend classes in or otherwise utilize the Series 2019 Project or the Series 2020A Project upon their completion. To determine the above percentage, the number of students attending each facility was calculated as follows: for schools that are built and operating, the number of students for the Fiscal Year 2019-20 was used; for the additions, the number of student stations attributable to each specific classroom or number of students served by such facility for Fiscal Year 2019-20 based on the type of school (elementary, middle or high) or facility (cafeteria, auditorium, gymnasium, etc.) was used. (See "THE MASTER LEASED PROJECTS" and "THE SERIES 2020 PROJECT" herein). When the School Board appropriates Lease Payments for any of its Projects leased under the Master Lease, it must appropriate Lease Payments for all other Projects leased under the Master Lease or none of them. Failure to appropriate funds to pay Lease Payments under any such Lease, or an event of default under any such Lease, will result in the termination of all Leases, including the Series 2020A Lease Agreement and the Series 1999 Lease Agreement. Upon any such termination, any proceeds of the disposition of leased facilities will be applied to the payment of the related Series of Certificates, all as further described herein. In no event will owners of the 2020A Certificates have any interest in or right to any proceeds of the disposition of facilities leased under any Lease other than the Series 2020A Lease Agreement nor will owners of the 2020B Certificates have any interest in or right to any proceeds of the disposition of facilities leased under any Lease other than the Series 1999 Lease Agreement. The proceeds of any such disposition of the facilities leased under Series 2020A Lease Agreement shall be applied to the payment of the 2020A Certificates after payment of the Trustee's expenses. The proceeds of any such disposition of the facilities leased under Series 1999 Lease Agreement shall be applied to the payment of the 2020B Certificates after payment of the Trustee's expenses. The School Board may not be dispossessed of any Designated Equipment (as defined herein) financed, or refinanced, in whole or in part, with proceeds of the 2020 Certificates. Should termination of the Master Lease occur, the 2020 Certificates will not be prepaid except [at the option of [_Insurer_] or] to the extent the Trustee has moneys available therefor. Special Counsel will express no opinion as to tax exemption or the effect of securities laws with respect to the 2020 Certificates following an Event of Non-Appropriation or an Event of Default under the Master Lease which results in termination of the Lease Term. Transfers of the 2020 Certificates may be subject to compliance with the registration provisions of state and federal securities laws following an Event of Non-Appropriation or an Event of Default under the Master Lease which results in termination of the Lease Term (see "TAX EXEMPTION" and "RISK FACTORS" herein). [An Event of Non-Appropriation or an Event of Default under the Master Lease which results in termination of the Lease Term will not result in termination of the municipal bond insurance policy issued by ______.]
Appendix to page 107 62
PARTICIPANTS IN THE FINANCING
LESSOR Bay County Educational Facilities Finance Corporation Panama City, Florida
LESSEE The School Board of Bay County, Florida Panama City, Florida
SCHOOL BOARD MEMBERS1 Steve Moss, Chairman Pamm Chapman, Vice Chairman Jerry Register, Member Ryan Neves, Member
SCHOOL DISTRICT OFFICIALS William V. Husfelt, III Superintendent of Schools
Sandra Davis Deputy Superintendent
Jim Loyed Executive Director of Business Support Services (CFO)
Doug Lee Executive Director of Operational Services
COUNSEL TO THE SCHOOL BOARD Hand Arendall Harrison Sale LLC Panama City, Florida
SPECIAL COUNSEL Bryant Miller Olive P.A. Tallahassee, Florida
DISCLOSURE COUNSEL Hand Arendall Harrison Sale LLC Mobile, Alabama
FINANCIAL ADVISOR Ford & Associates, Inc. Tampa, Florida
TRUSTEE Hancock Whitney Bank Baton Rouge, Louisiana
1 The District 2 Board position is vacant, pending election of a new Board member in November, 2020.
Appendix to page 107 63 No dealer, broker, sales representative or other person has been authorized by the School Board or the Underwriters to give any information or to make any representations, other than those contained in this Offering Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Offering Statement does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of the 2020 Certificates by any person in any jurisdiction to which it is unlawful for such person to make such offer, solicitation or sale.
UPON ISSUANCE, THE 2020 CERTIFICATES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER INDEPENDENT FEDERAL, STATE OR LOCAL GOVERNMENTAL ENTITY OR AGENCY WILL HAVE PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING STATEMENT OR APPROVED THE 2020A CERTIFICATES FOR SALE.
THE UNDERWRITERS MAY OFFER, AND SELL, THE 2020 CERTIFICATES TO CERTAIN DEALERS AND OTHERS AT PRICES LOWER OR YIELDS HIGHER, THAN THE PUBLIC OFFERING PRICES OR YIELDS SET FORTH ON THE INSIDE COVER PAGE OF THIS OFFERING STATEMENT, AND SUCH PUBLIC OFFERING PRICES OR YIELDS MAY BE CHANGED FROM TIME TO TIME AFTER THE INITIAL OFFERING TO THE PUBLIC, BY THE UNDERWRITERS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2020 CERTIFICATES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THIS OFFERING STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS EITHER IN BOUND PRINTED FORM ("ORIGINAL BOUND FORMAT") OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITES: www.munios.com AND https://emma.msrb.org/. THIS OFFERING STATEMENT MAY BE RELIED UPON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT OR AS PRINTED IN ITS ENTIRETY DIRECTLY FROM SUCH WEBSITES
THIS OFFERING STATEMENT SHALL NOT CONSTITUTE A CONTRACT BETWEEN THE SCHOOL BOARD, THE CORPORATION OR THE UNDERWRITERS AND ANY ONE OR MORE HOLDERS OF THE 2020 CERTIFICATES.
THIS PRELIMINARY OFFERING STATEMENT IS IN A FORM DEEMED FINAL BY THE SCHOOL BOARD FOR PURPOSES OF RULE 15c2-12 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT FOR CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO RULE 15c2-12(b)(1).
[Insert Insurer Language]
Appendix to page 107 64
TABLE OF CONTENTS
INTRODUCTION ...... 1 General ...... 1 Lease Financing ...... 2 The 2020 Certificates ...... 3 Impact of COVID-19 ...... 4 AUTHORIZATION AND PURPOSE ...... 6 THE 2020 CERTIFICATES OF PARTICIPATION ...... 6 Form and Denomination ...... 6 Book-Entry Only System ...... 7 Optional Prepayment ...... 8 2020A Certificates ...... 8 2020B Certificates ...... 9 No Extraordinary Redemption of Series 2020 Certificates Upon Damage, Destruction or Condemnation ... 9 [Scheduled Mandatory Redemption] ...... 9 Method of Selecting 2020 Certificates for Prepayment ...... 9 Notice of Prepayment ...... 9 Completion Certificates ...... 10 Refunding Certificates ...... 10 Additional Certificates ...... 10 SECURITY FOR THE CERTIFICATES ...... 10 Master Lease Aspects ...... 10 Limited Obligation of the School Board ...... 11 Lease Payment Fund ...... 12 Municipal Bond Insurance ...... 13 No Reserve Account ...... 13 Funds and Accounts ...... 13 Default and Remedies ...... 14 Additional Series of Certificates ...... 14 BOND INSURANCE ...... 14 RISK FACTORS ...... 14 Annual Right of the School Board to Terminate Series 1999 Lease Agreement and Series 2020A Lease Agreement ...... 14
i Appendix to page 107 65 No Right of Certificate Owners to Direct Remedies ...... 15 Limitation on Disposition; Ability to Sell or Re-let ...... 15 Tax Exemption ...... 15 Applicability of Securities Laws...... 16 Local Option Millage Revenues ...... 16 Construction Cost Maximums ...... 16 Additional Leases ...... 16 Additional Indebtedness ...... 17 Bond Insurance Risk Factors ...... 17 State Revenues ...... 17 Legislative Changes ...... 17 Property and Casualty Insurance ...... 17 Certain Constitutional Amendments ...... 17 Impacts of Weather; Climate Change ...... 18 Uncertain Impacts of COVID-19 ...... 18 Cybersecurity Risks ...... 18 THE MASTER LEASED PROJECTS ...... 18 THE SERIES 2020 PROJECT ...... 19 Description of Project ...... 19 Estimated Budget for the Series 2020 Project ...... 19 THE PRIOR PROJECTS ...... 19 Components of the Series 1999 Project ...... 19 Components of the Series 2004 Project ...... 20 Components of the Series 2007A Project ...... 20 Components of the Series 2019 Project ...... 20 THE MASTER LEASE PROGRAM ...... 20 The Series 2020A Ground Lease Agreement and Series 2010A Ground Lease Agreement ...... 20 The Master Lease...... 21 SOURCES AND USES OF 2020A CERTIFICATE PROCEEDS ...... 23 2020A Certificates ...... 23 2020B Certificates ...... 23 2020 CERTIFICATES PAYMENT SCHEDULES ...... 24 COMBINED CERTIFICATE PAYMENT SCHEDULE ...... 25 THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA ...... 26 General ...... 26
ii Appendix to page 107 66 The School Board ...... 26 Administration ...... 27 Total School Personnel ...... 27 Employee Relations; Retirement and Other Postemployment Benefit Programs ...... 27 School Facilities, Enrollment and Other Information ...... 31 Profile of Enrollments ...... 31 Impact of Hurricane Michael...... 33 District Financial Operations and Accounting Practices ...... 33 Budget Process ...... 34 Governmental Revenues ...... 35 General Fund Balance Guidelines ...... 36 SELECTED FINANCIAL INFORMATION SCHOOL DISTRICT OF BAY COUNTY ...... 37 DISTRICT REVENUES...... 38 State Revenue Sources ...... 38 Special Revenue Sources ...... 40 Local Sources ...... 40 ANTICIPATED LOCAL OPTION MILLAGE LEVY REQUIRED TO COVER DEBT SERVICE ON THE CERTIFCATES ...... 43 AD VALOREM TAXATION ...... 43 Property Assessment Procedure ...... 44 Property Tax Reform ...... 44 Millage Rates ...... 45 Collection of Ad Valorem Taxes ...... 46 Assessed Valuation ...... 46 Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes ...... 47 Other Legislative Actions Affecting District Finances ...... 48 THE CORPORATION ...... 51 LEGAL MATTERS ...... 51 LITIGATION ...... 51 TAX EXEMPTION ...... 52 Tax Exemption ...... 52 Tax Treatment of Issuance Discount...... 53 Tax Treatment of Issuance Premium ...... 53 RATINGS ...... 54 FINANCIAL STATEMENTS ...... 55 FINANCIAL ADVISOR ...... 55
iii Appendix to page 107 67 UNDERWRITING ...... 55 CONTINUING DISCLOSURE ...... 55 CONTINGENT FEES ...... 56 ACCURACY AND COMPLETENESS OF OFFERING STATEMENT ...... 56 FORWARD LOOKING STATEMENTS...... 56 AUTHORIZATION OF OFFERING STATEMENT ...... 56
APPENDICES
APPENDIX A GENERAL INFORMATION CONCERNING BAY COUNTY, FLORIDA
APPENDIX B EXCERPTED PAGES FROM THE AUDITED FINANCIAL STATEMENTS OF THE SCHOOL BOARD OF BAY COUNTY, FLORIDA FOR THE FISCAL YEAR ENDED JUNE 30, 2019
APPENDIX C DEFINITIONS APPLICABLE TO THE BASIC DOCUMENTS
APPENDIX D MASTER TRUST AGREEMENT AND FORMS OF SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT AND SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT
APPENDIX E MASTER LEASE PURCHASE AGREEMENT
APPENDIX F MASTER LEASE PURCHASE AGREEMENT AND FORMS OF LEASE SCHEDULE NO. 2020A AND SECOND AMENDED AND RESTATED LEASE SCHEDULE NO. 1999
APPENDIX G FORMS OF SERIES 2020A ASSIGNMENT AGREEMENT AND SERIES 2020B ASSIGNMENT AGREEMENT
APPENDIX H FORMS OF SERIES 2020A GROUND LEASE AGREEMENT AND ASSIGNMENT OF 2020A GROUND LEASE AND COPIES OF SERIES 2010A GROUND LEASE AGREEMENT AND ASSIGNMENT OF 2010A GROUND LEASE
APPENDIX I FORMS OF TAX OPINIONS OF SPECIAL COUNSEL
APPENDIX J FORM OF CONTINUING DISCLOSURE AGREEMENT
[APPENDIX K SPECIMEN MUNICIPAL BOND INSURANCE POLICY]
iv Appendix to page 107 68 PRELIMINARY OFFERING STATEMENT
Related to
$______* $______* CERTIFICATES OF PARTICIPATION REFUNDING CERTIFICATES OF PARTICIPATION (School Board of Bay County, Florida, Master Lease Program, (School Board of Bay County, Florida, Master Lease Program, Series 2020A) Series 2020B) Evidencing an Undivided Proportionate Interest of Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by the School Board of Bay County, Florida the School Board of Bay County, Florida
INTRODUCTION
General
This Offering Statement, including the cover page, inside cover page and appendices hereto, is provided to furnish information with respect to The School Board of Bay County, Florida (the "School Board"), and the sale and delivery of $______aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) (the "2020A Certificates"), and $______aggregate principal amount of Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) (the "2020B Certificates" and, together with the 2020A Certificates, the “2020 Certificates”).
The 2020A Certificates are being issued pursuant to a Master Trust Agreement, dated as of November 1, 1994 (the “Master Trust”), as amended and supplemented by the Series 2020A Supplemental Trust Agreement, dated as of ______, 2020, by and among the School Board, the Bay County Education Facilities Finance Corporation, a Florida not-for-profit corporation, as lessor (the "Corporation"), and Hancock Whitney Bank, a Mississippi banking corporation having an office located in Baton Rouge, Louisiana, as successor trustee (the "Trustee"), which is also serving as Paying Agent and Registrar (the “Series 2020A Supplemental Trust Agreement”). The 2020B Certificates are being issued pursuant to the Master Trust, as amended and supplemented by the Series 2020B Supplemental Trust Agreement, dated as of ______, 2020, by and among the School Board, the Corporation, as lessor, and Trustee, which is also serving as Paying Agent and Registrar (the “Series 2020B Supplemental Trust Agreement”). The Master Trust, together with the Series 2020A Supplemental Trust Agreement, and 2020B Supplemental Trust Agreement are referred to herein, collectively, as the “Trust Agreement”. See "APPENDIX D – MASTER TRUST AGREEMENT AND FORMS OF SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT AND SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT " hereto.
The School Board is the governing body of the School District of Bay County, Florida (the "District"), and has entered into a Master Lease-Purchase Agreement, dated as of November 1, 1994 (the "Master Lease"), between the Corporation, as lessor, and the School Board, as lessee, for the purpose of lease purchasing from time to time certain educational facilities, sites and equipment ("Projects") from the Corporation. Projects to be leased from time to time are or will be identified on separate lease schedules (each a "Schedule") attached to the Master Lease. Upon execution and delivery thereof, each Schedule, together with the provisions of the Master Lease, will constitute a separate lease agreement (individually a "Lease" and collectively the "Leases").
Unless otherwise indicated, capitalized terms used in this Offering Statement shall have the same meanings established in the documents referenced in the foregoing paragraphs. See "APPENDIX C - DEFINITIONS APPLICABLE TO THE BASIC DOCUMENTS."
* Preliminary, subject to change.
Appendix to page 107 69 Lease Financing
In February 1999, the School Board entered into Lease Schedule No. 1999 to the Master Lease, dated as of February 25, 1999 (together with the Master Lease, the "Original Series 1999 Lease Agreement"). Pursuant to the Original Series 1999 Lease Agreement the School Board lease-purchased certain educational and related facilities (the "Series 1999 Project"). The Original Series 1999 Lease Agreement was automatically renewable (subject to the School Board’s right of non-appropriation) annually through June 30, 2023. In connection with the execution and delivery of the Original Series 1999 Lease Agreement, the Trustee executed and delivered $41,500,000 aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 1999) (the "1999 Certificates"). In July 2010, the School Board amended and restated Lease Schedule No. 1999 in its entirety pursuant to the Amended and Restated Schedule No. 1999 (together with the Master Lease, the "Series 1999 Lease Agreement"). The Series 1999 Lease Agreement is automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, 2023. Pursuant to the Series 1999 Lease Agreement, the School Board is leasing the Series 1999 Project. In connection with the execution and delivery of the Series 1999 Lease Agreement, the Trustee executed and delivered $37,090,000 aggregate principal amount of Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2010A) (the "2010A Certificates"), which 2010A Certificates refunded the outstanding 1999 Certificates. As of the date of this Offering Statement, none of the Series 1999 Certificates are outstanding and $15,175,000 of the 2010A Certificates remain outstanding, all of which will be refunded and defeased upon issuance of the 2020B Certificates.
In July 2004, the School Board entered into Lease Schedule No. 2004 to the Master Lease, dated as of July 13, 2004 (together with the Master Lease, the "Original Series 2004 Lease Agreement"). Pursuant to the Series 2004 Lease Agreement the School Board lease-purchased certain educational and related facilities (the "Series 2004 Project"). The Series 2004 Lease Agreement was automatically renewable (subject to the School Board's right of non- appropriation) annually through June 30, 2024. In connection with the execution and delivery of the Series 2004 Lease Agreement, the Trustee executed and delivered $11,310,000 aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2004) (the "2004 Certificates"). In July, 2013, the School Board entered into the Amended and Restated Schedule No. 2004 to the Master Lease, dated as of July 1, 2013, which Amended and Restated Lease Schedule No. 2004 amended and restated Lease Schedule No. 2004 in its entirety (together with the Master Lease, the "Series 2004 Lease Agreement"). The Series 2004 Lease Agreement is automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, 2024. Pursuant to the Series 2004 Lease Agreement, the School Board is lease purchasing the Series 2004 Project. In connection with the execution and delivery of the Series 2004 Lease Agreement, the Trustee executed and delivered $7,152,900 aggregate principal amount of Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2013A) (the "2013A Certificates"), which 2013A Certificates refunded the 2004 Certificates maturing on and after July 1, 2015. As of the date of this Offering Statement, none of the Series 2004 Certificates are outstanding and $3,259,400 of the 2013A Certificates remain outstanding.
In April 2007, the School Board entered into Lease Schedule No. 2007A to the Master Lease, dated as of April 1, 2007 (together with the Master Lease, the "Original Series 2007A Lease Agreement"). Pursuant to the Series 2007A Lease Agreement the School Board lease-purchased certain educational and related facilities (the "Series 2007A Project"). The Series 2007A Lease Agreement was automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, 2029. In connection with the execution and delivery of the Series 2007A Lease Agreement, the Trustee executed and delivered $49,330,000 aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2007A) (the "2007A Certificates"). In March 2015, the School Board entered into the Amended and Restated Schedule No. 2007A to the Master Lease, dated as of March 1, 2015, which Amended and Restated Schedule No. 2007A amended and restated Lease Schedule No. 2007A in its entirety (together with the Master Lease, the "Series 2007A Lease Agreement"). The Series 2007A Lease Agreement is automatically renewable (subject to the School Board's right of non- appropriation) annually through June 30, 2029. Pursuant to the Series 2007A Lease Agreement, the School Board is lease-purchasing the Series 2007A Project. In connection with the execution and delivery of the Series 2007A Lease Agreement, the Trustee executed and delivered $49,065,000 aggregate principal amount of Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2015) (the "2015 Certificates"), which 2015 Certificates refunded the 2007A Certificates maturing on and after July 1, 2018. As of the date of this Offering Statement, none of the 2007A Certificates remain outstanding and $44,420,000 of the 2015 Certificates remain outstanding.
2 Appendix to page 107 70
In December, 2019, the School Board entered into Lease Schedule No. 2019 to the Master Lease, dated as of December 1, 2019 (together with the Master Lease, the "Series 2019 Lease Agreement"). Pursuant to the Series 2019 Lease Agreement the School Board lease-purchased certain educational and related facilities (the "Series 2019 Project"). The Series 2019 Lease Agreement is automatically renewable (subject to the School Board's right of non- appropriation) annually through June 30, 2030. In connection with the execution and delivery of the Series 2019 Lease Agreement, the Trustee executed and delivered $30,250,000 aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2019) (the "2019 Certificates"). As of the date of this Offering Statement $30,250,000 of the 2019 Certificates remain outstanding.
The 2020 Certificates
The 2020A Certificates represent an undivided proportionate interest of the owners thereof in the right to receive the Basic Rent Payments payable under the Master Lease, as supplemented by Lease Schedule No. 2020A annexed thereto ("Schedule No. 2020A"), dated ______1, 2020 (the Master Lease and such Lease Schedule No. 2020A being herein collectively described as the "Series 2020A Lease Agreement"). The initial term of the Series 2020A Lease Agreement commences on the date of delivery of the Series 2020A Certificates and continues through and including June 30, 2020, and is automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, ______.
The 2020B Certificates represent an undivided proportionate interest of the owners thereof in the right to receive the Basic Rent Payments payable under the Master Lease, as supplemented by the Second Amended and Restated Lease Schedule No. 1999 annexed thereto ("Second Amended and Restated Schedule No. 1999"), dated July 1, 2020 (the Master Lease and such Second Amended and Restated Schedule No. 1999 being herein collectively described as the "Series 1999 Lease Agreement"). The term of the Series 1999 Lease Agreement continues through and including June 30, 2020, and is automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, 2023.
The 2020A Certificates, the 2020B Certificates, the 2013 Certificates, the 2015 Certificates and the 2019 Certificates, together with any additional Series of Certificates issued pursuant to the Trust Agreement, are referred to collectively herein as the "Certificates."
The following table provides a summary of the leases that the School Board will be a party to under the Master Lease following delivery of the 2020 Certificates, the Projects financed or refinanced thereby, the final renewal ending date, the related Series of Certificates and the outstanding amount of each final Series of Certificates:
Principal Related Final Related Series Amount Lease Project Renewal Date of Certificates Outstanding
Series 1999 Lease Agreement Series 1999 June 30, 2023 2020B $15,175,000 Project Certificates
Series 2004 Lease Agreement Series 2004 June 30, 2024 2013 $3,259,400 Project Certificates
Series 2007A Lease Agreement Series 2007A June 30, 2029 2015 $44,420,000 Project Certificates
Series 2019 Lease Agreement Series 2019 June 30, 2030 2019 $30,250,000 Project Certificates
Series 2020A Lease Agreement Series 2020A June 30, ____ 2020A $______Project Certificates
3 Appendix to page 107 71 The rights, title and interest of the Corporation in the Series 2020A Lease Agreement and the Series 1999 Lease Agreement, including the right of the Corporation to receive Basic Rent, to use, sell and re-let projects and to exercise remedies thereunder, other than its rights to indemnification, its right to enter into additional Lease Schedules and its obligation not to impair the tax status of the 2020 Certificates, have been irrevocably assigned by outright assignment to the Trustee pursuant to a Series 2020A Assignment Agreement, dated as of ______, 2020 (the "Series 2020A Assignment") and a Series 2020B Assignment Agreement, dated as of ______, 2020 (the “Series 2020B Assignment”), respectively. See "APPENDIX G – FORMS OF SERIES 2020A ASSIGNMENT AGREEMENT AND SERIES 2020B ASSIGNMENT AGREEMENT" hereto.
The School Board is also entering into a Series 2020A Ground Lease Agreement, dated as of ______, 2020 (the "Series 2020A Ground Lease") with the Corporation whereby the School Board will grant to the Corporation for the benefit of the 2020A Certificates Owners a leasehold estate in the land on which the Series 2020A Project will be located. The Corporation’s interest in the Series 2020A Ground Lease is being assigned to the Trustee as additional security for the 2020A Certificates pursuant to an Assignment of Series 2020A Ground Lease dated as of ______1, 2020. The School Board has previously entered into a Series 2010A Ground Lease Agreement, dated as of ______, 2010 (the “Series 2010A Ground Lease” with the Corporation whereby the School Board granted to the Corporation a leasehold estate in the land on which the Series 1999 Project is located. The Corporation’s interest in the Series 2010A Ground Lease was assigned to the Trustee as additional security for the 2020B Certificates, pursuant to a Series 2010A Assignment of Ground Lease dated as of July 1, 2010. See "THE SERIES 2020 PROJECT" herein. See "APPENDIX H – SERIES 2010A GROUND LEASE AGREEMENT AND ASSIGNMENT OF SERIES 2010A GROUND LEASE AND FORMS OF SERIES 2020A GROUND LEASE AGREEMENT AND ASSIGNMENT OF SERIES 2020A GROUND LEASE" hereto.
[The scheduled payment of principal and interest in respect of all, some or none of the 2020 Certificates of either Series when due, will be guaranteed under an insurance policy to be issued concurrently with the delivery of the 2020 Certificates by ______. ("______" or the "Insurer"). See "BOND INSURANCE" herein.]
The School Board has agreed and undertaken, for the benefit of 2020 Certificates Owners, to provide certain annual financial information and operating data and certain material event notices when and if they occur relating to the District and the 2020 Certificates pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended. See "CONTINUING DISCLOSURE" herein.
Brief descriptions of the 2020 Certificates, the School Board, the Corporation, the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, the Series 2020A Assignment Agreement, the Series 2020B Assignment Agreement, the Series 2020A Ground Lease Agreement and Assignment of Series 2020A Ground Lease and the Series 2010A Ground Lease Agreement and Assignment of Series 2010A Ground Lease are included in this Offering Statement. All references herein to the 2020 Certificates, the School Board, the Corporation, the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, the Series 2020A Assignment Agreement, the Series 2020B Assignment Agreement, the Series 2020A Ground Lease Agreement and Assignment of Series 2020A Ground Lease and the Series 2010A Ground Lease Agreement and Assignment of Series 2010A Ground Lease are qualified in their entirety by reference to the respective complete documents. Copies or forms of the Master Trust Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, the Master Lease Purchase Agreement, the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the Series 2020A Assignment Agreement, the Series 2020B Assignment Agreement, the Series 2010A Ground Lease Agreement and Assignment of Series 2010A Ground Lease and the Series 2020A Ground Lease Agreement and Assignment of Series 2020A Ground Lease are included herein within Appendices D, E, F, G and H. This Offering Statement speaks only as of its date and the information contained herein is subject to change. This Offering Statement and any continuing disclosure documents of the School Board are intended to be made available through the office of the School Board's Chief Finance Officer, Jim Loyed, 1311 Balboa Avenue, Panama City, Florida 32401.
Impact of COVID-19 [Disclosure per R-J. Confirm and update.]
4 Appendix to page 107 72 The Novel Coronavirus 2019 ("COVID-19") pandemic, along with various governmental measures taken to protect public health in light of the pandemic, has had an adverse impact on global financial markets and economies, including financial markets and economic conditions in the United States. The impact of the COVID-19 pandemic on the U.S. economy is expected to be broad based and to negatively impact national, state and local economies. In response to such expectations, President Trump on March 13, 2020, declared a "national emergency," which, among other effects, allows the executive branch to disburse disaster relief funds to address the COVID-19 pandemic and related economic dislocation.
On March 9, 2020, Florida Governor Ron DeSantis declared a state of emergency in Florida due to the spread of COVID-19 (the "Gubernatorial Disaster Proclamation"). In addition, the Governor signed various executive orders that have, among other effects, (i) closed all bars and restaurants to dine-in customers, (ii) suspended new reservations for vacation rentals through April 30, 2020 and (ii) issued a "Safer at Home" order which closes non-essential businesses and prohibits all public and private gatherings of 10 people or more for the duration of the Gubernatorial Disaster Proclamation, other than for religious activities.
The State’s finances are likely to be adversely affected by the continued spread of COVID-19, the various governmental actions in response thereto and changes in the behavior of businesses and people. The State derives a significant portion of its annual revenues from the collection of sales tax. The impact of COVID-19 is expected to result in significant decreases in state and local sales tax revenues as a result of decreased tourism and commercial activity throughout the State. The District currently cannot predict what impact this will have on the level of State funding the District receives or on the District's collection of sale surtax revenues and other local revenues. See "DISTRICT REVENUES – State Sources" and "–Local Sources," and "RISK FACTORS – State Revenues" herein.
On March 17, 2020, the Florida Department of Education issued guidance closing all schools in the State through April 15, 2020, which has subsequently been extended to May 1, 2020 and then through the remainder of the 2019-2020 school year. Commencing March 30, 2020, the District began distance learning for its students. Additionally, all employees have been advised to work from home. While the District schools are physically closed to students, instruction and services to student continue at all schools. All District faculty have prepared plans that continued instructional delivery and the District has in place an operational strategy for all essential operations through the end of the 2019-20 school year. To date, there has been no short-term impact on the revenues of the District as a result of school closings and distance learning and the District's expenses for Fiscal Year 2019-20 are not expected to be materially affected.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was signed into law. Among other provisions, the CARES Act created an Education Stabilization Fund to support K-12 schools and colleges and universities during the COVID-19 outbreak. The Educational Stabilization Fund includes a total of $30.75 billion in relief divided into three separate pools: (1) funds to K-12 schools; (2) funds to higher education; and (3) funds to governors. Florida is projected to receive approximately $724.4 million in funds for K-12 schools, approximately $791.4 million in funds for higher education and approximately $173 million in funds to the Governor for use as grants to local educational agencies. Funds for K-12 schools are expected to be distributed to school districts and charter schools based on their share of Title I-A funds. The District expects to receive approximately $____ million of such funds. [portion of funds to charters?] Funds to local districts can be used for coronavirus-response activities, such as planning for and coordinating during long-term school closures, purchasing educational technology to support online learning for all students, and additional activities authorized by federal elementary and secondary education laws. Funds in the Governor’s Education Relief Fund can be used at the Governor's discretion to provide emergency support grants to K-12 schools, colleges and universities and child care/early education providers. The CARES Act requires that any entity that receives funds from the education stabilization fund must continue to pay its employees and contractors to the extent practicable during the period of any disruptions or closures related to coronavirus. The District cannot currently predict the full impact of the CARES Act on the District's operations.
Due to the evolving nature of the outbreak and federal, State and local responses thereto, the long-term impacts of the COVID-19 crisis are unknown and dependent on factors such as the length of any shutdown or partial inaccessibility of school facilities, the extent to which the faculty and staff or the student population is directly affected and is unable to attend class, teach or provide services, and the impact on the economy as a whole within the State. The District cannot predict whether there will be any increased costs associated with this or any other potential disease outbreak, including whether there will be an increase in operational costs incurred to implement distance learning
5 Appendix to page 107 73 strategies or to clean, sanitize and maintain its facilities. The School Board also cannot predict with certainty the potential long-term impacts of the outbreak on the District's revenues, including whether there will be a reduction in State funding, a reduction in taxable assessed values of properties in the District, or a reduction in ad valorem tax collections (including Local Optional Millage Levy revenues), educational impact fees and Sales Surtax revenues.
AUTHORIZATION AND PURPOSE
Pursuant to the applicable provisions of Florida law, including particularly Chapters 1000-1013, Florida Statutes, as amended, the School Board has the power and authority to enter into transactions such as that contemplated by the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the 2020 Ground Lease and the Trust Agreement. The School Board authorized such action pursuant to a resolution adopted by the School Board on April 28, 2020.
The 2020A Certificates are being issued to provide funds for the purposes of (i) financing the acquisition, construction and equipping of certain educational facilities and equipment in the District to be leased to the School Board, as more particularly described herein (the “Series 2020 Project”), and (ii) paying certain costs of issuance with respect to the 2020A Certificates, including the premium on the insurance policy. See "THE SERIES 2020 PROJECT" herein.
The 2020B Certificates are being issued to provide funds for the purposes of (i) refunding, on a current basis, all of the outstanding 2010A Certificates maturing on or after July 1, 2021 and (ii) paying certain costs of issuance with respect to the 2020B Certificates, including the premium on the insurance policy.
THE 2020 CERTIFICATES OF PARTICIPATION
Form and Denomination
The 2020 Certificates are issuable as fully registered Certificates in denominations of $5,000 or any integral multiple thereof. The 2020 Certificates will be dated their date of delivery and mature in the years and principal amounts, and accrue interest at the rates, set forth on the inside cover page of this Offering Statement. The interest component of Basic Rent Payments represented by the 2020 Certificates is payable on January 1 and July 1 of each year (each "Payment Date"), commencing [July 1, 2020]. Said interest component represents an undivided proportionate interest in the Interest Component of Basic Rent Payments due on December 15 and June 15 prior to each Payment Date as set forth on Lease Schedule No. 2020A and Second Amended and Restated Lease Schedule No. 1999, respectively, at the rates set forth on the inside cover page hereof.
The Series 2020 Certificates will initially be issued exclusively in "book-entry" form and ownership of one fully registered Series 2020 Certificate for each maturity as set forth on the inside cover page, each in the aggregate principal amount of such maturity, will be initially registered in the name of "Cede & Co." as nominee of The Depository Trust Company, New York, New York ("DTC"). The Principal Component and Interest Component of Basic Rent Payments represented by the Series 2020 Certificates are payable in the manner set forth under " - Book- Entry Only System" herein. Except as otherwise provided in connection with a book-entry system, interest will be paid by check or draft of the Trustee, as Paying Agent and Registrar, mailed on each Payment Date to the Owners of the 2020 Certificates listed in the registration books maintained by the Trustee on the fifteenth day of the month (whether or not a business day) next preceding each Payment Date. At the written request and expense of any Owner of at least $1,000,000 in principal amount of 2020A Certificates or $1,000,000 in principal amount of the 2020B Certificates, interest shall be paid by wire transfer to a bank account located in the continental United States and designated in writing to the Trustee by the Owner thereof at least five (5) days prior to a Payment Date.
The principal amount of the 2020A Certificates payable at maturity or upon earlier prepayment thereof shall represent an undivided proportionate interest in the Principal Component of Basic Rent Payments on each of the dates set forth on Lease Schedule No. 2020A to the Master Lease. The principal amount of the 2020B Certificates payable at maturity or upon earlier prepayment thereof shall represent an undivided proportionate interest in the Principal Component of Basic Rent Payments on each of the dates set forth on the Second Amended and Restated Lease
6 Appendix to page 107 74 Schedule No. 1999 to the Master Lease. The Principal Component of Basic Rent Payments represented by the 2020A Certificates and Series 2020B Certificates is payable to the Owner thereof upon presentation, when due, at maturity or upon earlier prepayment, at the designated corporate trust office of the Trustee in Baton Rouge, Louisiana.
Book-Entry Only System
THE INFORMATION IN THIS SECTION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM DTC. NEITHER THE CORPORATION NOR THE SCHOOL BOARD TAKE ANY RESPONSIBILITY FOR THE ACCURACY THEREOF.
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the 2020 Certificates. The 2020 Certificates will be issued as fully-registered securities in the name of Cede & Co., (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered bond certificate will be issued for each maturity of the 2020 Certificates 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 Paying 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 and trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the “Indirect Participants”). DTC has Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of 2020 Certificates under the DTC system must be made by and through Direct Participants, which will receive a credit for the 2020 Certificates on DTC’s records. The ownership interest of each actual purchaser of each actual purchaser of each 2020 Certificate (“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 their transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners entered into the transaction. Transfers of ownership interests in the 2020 Certificates are to be accomplished by entries made on the books of DTC Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2020 Certificates, except in the event that the use of the book-entry system for the 2020 Certificates is discontinued.
To facilitate subsequent transfers, all 2020 Certificates 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 2020 Certificates with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2020 Certificates; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2020 Certificates 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.
7 Appendix to page 107 75 Beneficial Owners of 2020 Certificates may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2020 Certificates, such as prepayments, defaults and proposed amendments to the Series 2020 documents. For example, Beneficial Owners of 2020 Certificates may wish to ascertain that the nominee holding the 2020 Certificates 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 Trustee and request that copies of notices be provided directly to them.
Prepayment notices shall be sent to DTC by the Trustee. If less than all of the 2020 Certificates are being prepaid, DTC’s practice is to determine by lot the amount of the beneficial interest of each Direct Participant in such 2020 Certificates to be prepaid.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to 2020 Certificates unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the School Board as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the 2020 Certificates are credited on the record date (identified in a listing attached to the Omnibus Proxy).
The Trustee will make payments of principal of, premium, if any, and interest on the 2020 Certificates to 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 detailed information from the School Board or the Trustee on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC (nor its nominee), the School Board or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of prepayment 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 School Board and/or the Trustee for the 2020 Certificates. Disbursement of such payments to Direct Participants is the responsibility of DTC; and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the 2020 Certificates at any time by giving reasonable notice to the School Board. Under such circumstances, in the event that a successor securities depository is not obtained, 2020 Certificates are required to be printed and delivered. In addition, the School Board may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, 2020 Certificates will be printed and delivered to DTC.
NEITHER THE SCHOOL BOARD NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE BENEFICIAL OWNERS, DTC PARTICIPANTS OR THE PERSONS FOR WHOM DTC PARTICIPANTS ACT AS NOMINEES WITH RESPECT TO THE 2020 CERTIFICATES FOR THE ACCURACY OF RECORDS OF DTC, CEDE & CO. OR ANY DTC PARTICIPANT WITH RESPECT TO THE 2020 CERTIFICATES OR THE PROVIDING OF NOTICE OR PAYMENT OF PRINCIPAL, OR INTEREST, OR ANY PREMIUM ON THE 2020 CERTIFICATES, TO DTC PARTICIPANTS OR BENEFICIAL OWNERS, OR THE SELECTION OF 2020 CERTIFICATES FOR PREPAYMENT.
Optional Prepayment
2020A Certificates
The 2020A Certificates maturing on or before July 1, ____ shall not be subject to prepayment at the option of the School Board.
The 2020A Certificates maturing on or after July 1, ____ shall be subject to prepayment from prepayments of Basic Rent made by the School Board pursuant to the Series 2020A Lease Agreement, in whole or in part on ______or any date thereafter, and if in part, in such order of maturities as may be designated by the School Board, or if not so designated, in the inverse order of maturities, and by lot within a maturity in such manner as may
8 Appendix to page 107 76 be designated by the Trustee, [at a Prepayment Price of 100% of the principal amount of the 2020A Certificates to be prepaid], plus accrued and unpaid interest thereon to the prepayment date.
2020B Certificates
The 2020B Certificates shall not be subject to prepayment at the option of the School Board.
No Extraordinary Redemption of Series 2020 Certificates Upon Damage, Destruction or Condemnation
The Series 2020A Certificates are not subject to extraordinary prepayment prior to maturity in the event of damage, destruction or condemnation of the Series 2020A Project. Notwithstanding the provisions set forth in Sections 5.08(c) and (d) of the Master Lease, if the Net Proceeds related to the Series 2020A Project are not greater than the amount of the Lease Payments represented by the Series 2020A Certificates coming due in the immediately following fiscal year, then such amounts shall be used first, to pay the Interest Component of the 2020A Certificates for the next two interest Payment Dates and then to pay the Principal Component next coming due. In the event such Net Proceeds are greater than the amount of the Lease Payments coming due with respect to the 2020A Certificates in the immediately following fiscal year, at the option of the Board, the Board shall apply the portion of the Net Proceeds of such insurance or condemnation award to (i) the acquisition, construction and installation of other Land and/or Buildings to be used for educational purposes that will be subject to Lease Schedule No. 2020A, or (ii) upon receipt of an approving opinion of Special Counsel, to the applicable Subaccount of the Interest Account or Subaccount of the Principal Account to be credited against the payments next due to such accounts or subaccounts.
The Series 2020B Certificates are not subject to extraordinary prepayment prior to maturity in the event of damage, destruction or condemnation of the Series 1999 Project. Notwithstanding the provisions set forth in Sections 5.08(c) and (d) of the Master Lease, if the Net Proceeds related to the Series 1999 Project are not greater than the amount of the Lease Payments represented by the Series 2020B Certificates coming due in the immediately following fiscal year, then such amounts shall be used first, to pay the Interest Component of the 2020B Certificates for the next two interest Payment Dates and then to pay the Principal Component next coming due. In the event such Net Proceeds are greater than the amount of the Lease Payments coming due with respect to the 2020B Certificates in the immediately following fiscal year, at the option of the Board, the Board shall apply the portion of the Net Proceeds of such insurance or condemnation award to (i) the acquisition, construction and installation of other Land and/or Buildings to be used for educational purposes that will be subject to the Amended and Restated Lease Schedule 1999, or (ii) upon receipt of an approving opinion of Special Counsel, to the applicable Subaccount of the Interest Account or Subaccount of the Principal Account to be credited against the payments next due to such accounts or subaccounts.
[Scheduled Mandatory Redemption of Series 2020A Certificates]
Method of Selecting 2020A Certificates for Prepayment
As long as a book-entry only system is used for determining beneficial ownership of 2020A Certificates, selection of 2020A Certificates for prepayment will be subject to DTC rules and procedures.
When 2020A Certificates are to be selected for prepayment by lot, selection of 2020A Certificates for prepayment shall be in such manner as the Trustee shall determine; provided, however, that the portion of any 2020A Certificates to be prepaid shall be in the principal amount of $5,000 or any whole multiple thereof, and that in selecting portions of 2020A Certificates for prepayment, the Trustee shall treat each such 2020A Certificates as representing the number of 2020A Certificates which is obtained by dividing the principal amount with respect to such Series of 2020A Certificates by $5,000.
Upon any prepayment pursuant to the Trust Agreement, the Trustee shall provide the School Board with, or cause to be provided, a revised schedule of Basic Rent Payments, which schedule shall take into account such prepayment and shall be and become for all purposes part of the Lease Agreement.
2020A Certificates so prepaid, presented and surrendered shall be canceled upon the surrender thereof.
Notice of Prepayment
9 Appendix to page 107 77
As long as a book-entry only system is used for determining beneficial ownership of 2020A Certificates, notice of prepayment will only be sent to DTC. DTC will be responsible for notifying the DTC Participants, which will in turn be responsible for notifying the Beneficial Owners (as defined herein). Any failure of DTC to notify any DTC Participant, or of any DTC participant to notify the Beneficial Owner of any such notice, will not affect the validity of the prepayment of the 2020A Certificates.
Notice of prepayment of the 2020A Certificates shall be mailed, postage prepaid, not more than sixty (60) days nor fewer than thirty (30) days prior to the date of prepayment, to the Owners of such 2020A Certificates to be prepaid. Such mailing shall not be a condition precedent to such prepayment, and failure to mail any such notice, or any defect in such notice as mailed, shall not affect the validity of the proceeding for the prepayment of the 2020A Certificates. Notice of any prepayment of Series 2020A Certificates may state that the proposed prepayment is conditioned on there being on deposit in the applicable fund or account on the prepayment date sufficient funds to pay the full prepayment price of the Series 2020A Certificates to be prepaid or any other conditions as may be set forth in such notice of prepayment.
Completion Certificates
Completion Certificates may be issued to provide necessary funds to complete payment of the Costs of the Series 2020 Project or to finance additional property which shall be added to the Series 2020 Project or which shall be substituted for a portion of the Series 2020 Project. Such Completion Certificates, for purposes of the Series 2020A Supplement Trust Agreement, the Series 2020A Lease Agreement, the 2020A Ground Lease and the Assignment of Series 2020A Ground Lease, shall constitute a part of the 2020A Certificates.
Refunding Certificates
Refunding Certificates may be issued under and secured by the Trust Agreement, at any time or times, for the purposes of (i) providing funds for refunding part or all of the 2020 Certificates at or prior to their maturity or maturities, including the payment of any Prepayment Premium thereon and interest which will accrue on such 2020 Certificates to their date of payment, (ii) making a deposit, as necessary, to the subaccount of the Reserve Account which shall secure such Refunding Certificates, and (iii) paying the Costs of Issuance relating to said Refunding Certificates.
In order to issue Refunding Certificates the Trustee must have received, among other items, a report of a certified public accountant or firm of certified public accountants verifying the mathematical accuracy of calculations supplied by the School Board, or its designee, that the proceeds of such Refunding Certificates plus any other moneys available for such purpose, including investment earnings, shall be not less than an amount sufficient to pay the principal of and the Prepayment Premium, if any, on the 2020 Certificates to be refunded and the Interest Component of the Basic Rent represented by such 2020 Certificates which will accrue thereon to the prepayment date or maturity dates applicable thereto.
Other than amounts required to pay Costs of Issuance or to make deposits to the appropriate subaccount of the Reserve Account, the proceeds of such Refunding Certificates and any other moneys received by the Trustee for such purpose, shall be held by the Trustee in a special fund appropriately designated, to be held in trust for the sole and exclusive purpose of paying the principal of, Prepayment Premium if any, and interest on the 2020 Certificates to be refunded, all as provided in the Trust Agreement. The Refunding Certificates shall be secured in the same manner as the 2020 Certificates to be refunded in accordance with the terms of the Trust Agreement.
Additional Certificates
Additional Series of Certificates may be issued under the Trust Agreement to finance additional Projects under the Master Lease. See “SECURITY FOR THE CERTIFICATES – Additional Series of Certificates.”
SECURITY FOR THE CERTIFICATES
Master Lease Aspects
10 Appendix to page 107 78
The Master Lease contemplates that the relationship between the School Board and the Corporation will be a continuing one, that Projects in addition to the Series 1999 Project, the Series 2004 Project, the Series 2007A Project, the Series 2019 Project and the Series 2020A Project may be added to the Master Lease from time to time, and that additional Certificates in addition to the 2013 Certificates, the 2015 Certificates, the 2019 Certificates and the 2020 Certificates will be issued under the Trust Agreement in connection with such Projects. The proceeds of the 2013 Certificates were used to refinance the costs of the Series 2004 Project, the proceeds of the 2015 Certificates were used to refinance the costs of the Series 2007A Project, the proceeds of the 2019 Certificates were used to finance the Series 2019 Project, the proceeds of the 2020A Certificates will be used to finance the Series 2020 Project and the proceeds of the 2020B Certificates will be used to refinance the Series 1999 Project. Upon payment of all Lease Payments with respect to a particular Project, such Project shall be removed from the related Lease and Ground Lease, and the School Board shall be under no further obligation to appropriate funds with respect to such Project. See "THE PRIOR PROJECTS" for a description of the Series 1999 Project, the Series 2004 Project, the Series 2007A Project and the Series 2019 Project.
The Series 2020A Lease Agreement is automatically renewable annually through June 30, ____. The owners of the 2020A Certificates shall have no claim against, nor receive any benefits from any portion of the Trust Estate derived from the sale, re-letting or other disposition of Projects, other than the Series 2020A Project, or any cash, securities or investments in the Pledged Accounts, other than the Series 2020A Pledged Accounts. The Series 1999 Lease Agreement is automatically renewable annually through June 30, 2023. The owners of the 2020B Certificates shall have no claim against, nor receive any benefits from any portion of the Trust Estate derived from the sale, re- letting or other disposition of Projects, other than the Series 1999 Project, or any cash, securities or investments in the Pledged Accounts, other than the Series 2020B Pledged Accounts. See "THE 2020 CERTIFICATES OF PARTICIPATION – Completion Certificates” and SECURITY FOR THE CERTIFICATES - Lease Payment Fund," "- Additional Series of Certificates" herein.
Limited Obligation of the School Board
The obligation of the School Board to pay Lease Payments, which includes Basic Rent Payments and Supplemental Rent Payments under the Series 2020A Lease Agreement, is a limited and special obligation, payable solely from moneys appropriated by the School Board from the School Board's Available Revenues (herein described). There shall be credited against such obligation moneys, if any, on deposit with the Trustee in certain accounts pledged under the Trust Agreement and from amounts, if any, realized from the exercise of remedies with respect to the Series 2020 Project by the Trustee on behalf of 2020A Certificates Owners. Such Basic Rent is subject to annual appropriation by the School Board and the Series 2020A Lease Agreement shall be terminated upon the occurrence of an Event of Non-Appropriation. An "Event of Non-Appropriation" will occur if the School Board does not approve a tentative Budget and a final Budget in accordance with State law which appropriates sufficient funds from Available Revenues to continue making Basic Rent in full for all Projects (including the Series 2020 Project) leased under the Master Lease beyond the end of such initial Lease Term or Renewal Lease Term for the following Renewal Lease Term. The Lease Term shall be deemed renewed pending the enactment of the final Budget and the School Board shall be liable for any Basic Rent and other obligations under the Master Lease coming due during such period but only if the tentative Budget and the final Budget make available to the School Board moneys which may be legally used to make the Basic Rent and pay such other obligations coming due during such period. Upon the occurrence of an Event of Non-Appropriation, the School Board will not be obligated to pay Basic Rent under the Series 2020A Lease Agreement beyond the then current Fiscal Year.
While the School Board is not legally obligated to do so, it has represented in the Master Lease that it is its present intent to continue: (i) the Series 2020A Lease Agreement with respect to the Series 2020 Project for the Maximum Lease Term of the Series 2020 Project (ending June 30, ____), and (ii) the Second Amended and Restated Lease Schedule No. 1999 of the Series 1999 Project (ending June 30, 2023). Subject to the right of non-appropriation, the School Board has agreed in the Master Lease to take such action as may be necessary to include all Basic Rent due under the Master Lease as a separately stated line item in its Budget and to appropriate in each Fiscal Year from Available Revenues an amount necessary to make the Basic Rent due in such Fiscal Year.
11 Appendix to page 107 79 "Available Revenues" means the moneys and revenues of the School Board legally available under the Act to make the Basic Rent Payments. Available Revenues may include, but are not necessarily limited to, the hereinafter described Local Option Millage. See "DISTRICT REVENUES" herein.
In addition to issuing additional Series of Certificates under the Master Lease, the School Board may also issue additional indebtedness other than in connection with the Master Lease secured by its Available Revenues without the consent of the Owners of the Certificates. The incurrence of such additional indebtedness by the School Board may adversely affect the School Board's ability to make Basic Rent Payments under the Master Lease.
THE BASIC RENT PAYMENTS AND, CONSEQUENTLY, THE CERTIFICATE PAYMENTS OF PRINCIPAL AND INTEREST ARE PAYABLE SOLELY FROM THE SCHOOL BOARD'S AVAILABLE REVENUES AND NEITHER THE SCHOOL BOARD, THE STATE OF FLORIDA, NOR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF SHALL BE OBLIGATED TO PAY ANY SUMS DUE UNDER THE MASTER LEASE EXCEPT FROM AVAILABLE REVENUES APPROPRIATED FOR SUCH PURPOSE. THE BASIC RENT PAYMENTS DUE UNDER THE MASTER LEASE ARE SUBJECT TO ANNUAL APPROPRIATION BY THE SCHOOL BOARD ON AN ALL-OR-NONE BASIS. THE CERTIFICATE PAYMENTS OF PRINCIPAL AND INTEREST AND THE PAYMENTS DUE FROM THE SCHOOL BOARD UNDER THE MASTER LEASE AND THE CONTRACTUAL OBLIGATIONS OF THE SCHOOL BOARD UNDER THE MASTER LEASE DO NOT CONSTITUTE A GENERAL OBLIGATION OR A PLEDGE OF THE FAITH AND CREDIT OF THE SCHOOL BOARD, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. THE ISSUANCE OF THE 2020 CERTIFICATES WILL NOT DIRECTLY OR INDIRECTLY OBLIGATE THE SCHOOL BOARD, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, TO LEVY OR TO PLEDGE ANY FORM OF AD VALOREM TAXATION WHATSOEVER THEREFOR AND THE OWNERS OF THE 2020 CERTIFICATES WILL HAVE NO RECOURSE TO THE POWER OF AD VALOREM TAXATION OF THE SCHOOL BOARD OR ANY OTHER GOVERNMENTAL ENTITY.
THE SCHOOL BOARD IS NOT OBLIGATED TO APPROPRIATE AVAILABLE REVENUES TO MAKE BASIC RENT PAYMENTS. IF, FOR ANY FISCAL YEAR, THE SCHOOL BOARD DOES NOT APPROVE A BUDGET WHICH APPROPRIATES SUFFICIENT AVAILABLE REVENUES (WITHOUT REGARD TO ANY CREDITS FROM EARNINGS ON AMOUNTS HELD IN THE FUNDS AND ACCOUNTS ESTABLISHED UNDER THE TRUST AGREEMENT) IN A LINE ITEM SPECIFICALLY IDENTIFIED FOR PAYMENT OF ITS OBLIGATIONS UNDER THE MASTER LEASE, SUCH FAILURE SHALL CONSTITUTE AN EVENT OF NON-APPROPRIATION AND THE MASTER LEASE SHALL TERMINATE AS OF THE LAST DAY OF THE THEN INITIAL LEASE TERM OR THE LAST RENEWAL LEASE TERM FOR WHICH AVAILABLE REVENUES HAVE BEEN BUDGETED AND APPROPRIATED AND THE SCHOOL BOARD WILL NOT BE OBLIGATED TO MAKE ANY BASIC RENT PAYMENTS ACCRUING OR ARISING BEYOND SUCH LAST DAY. IN SUCH EVENT, THE SCHOOL BOARD IS REQUIRED TO SURRENDER USE, POSSESSION AND CONTROL OF ALL PROJECTS (OTHER THAN “DESIGNATED EQUIPMENT,” AS DEFINED IN EACH LEASE AGREEMENT) LEASED UNDER THE MASTER LEASE, INCLUDING THE SERIES 2020 PROJECT TO THE TRUSTEE.
Lease Payment Fund
The Trust Agreement provides for the establishment and maintenance of a single Lease Payment Fund, with a Principal Account and an Interest Account for deposit of Basic Rent Payments appropriated and paid under the Master Lease. With certain limited exceptions, separate subaccounts within the Principal Account and the Interest Account will be established upon the issuance of each additional Series of Certificates under the Trust Agreement. Basic Rent due under all Lease Schedules to the Master Lease is subject to annual appropriation by the School Board on an all-or-none basis and is payable on a parity basis solely from Available Revenues; provided that (i) Basic Rent with respect to a particular Lease Schedule and Series of Certificates may be additionally and separately secured by a Credit Facility or insurance policy and (ii) Owners of various Series of Certificates are not on a parity as to any amounts in the Reserve Account of the Lease Payment Fund. The School Board may enter into additional Lease Schedules from time to time, without limitation, for the lease purchase financing of additional Projects. Such additional Projects may be financed through the sale of additional Series of Certificates under the Trust Agreement.
12 Appendix to page 107 80 THE SCHOOL BOARD MAY NOT BUDGET AND APPROPRIATE FOR BASIC RENT FOR ONLY ONE OR SOME COMBINATION OF THE PROJECTS LEASED UNDER THE MASTER LEASE; IT MUST BUDGET AND APPROPRIATE FOR ALL PROJECTS OR NONE OF THEM. There can be no assurance that sufficient funds will be appropriated or otherwise be made available to make all of the Lease Payments.
[Municipal Bond Insurance
The scheduled payment of principal and interest represented by those of the Series 2020A Certificates selected for insurance (the “Insured 2020A Certificates”), when due, and those of the Series 2020B Certificates selected for insurance (the “Insured 2020B Certificates”), when due, will be guaranteed under a policy of municipal bond insurance to be issued concurrently with the delivery of the Insured 2020A Certificates by ______. See "BOND INSURANCE" herein.]
No Reserve Account
THERE IS NO RESERVE ACCOUNT ESTABLISHED FOR THE 2020A CERTIFICATES. However, pursuant to a Supplemental Trust Agreement authorizing the issuance of any Series of Certificates, there may be established and maintained a separate Reserve Account to secure the payment of the principal and/or interest portion of the Basic Rent Payments related to such Series of Certificates. Each such Reserve Account shall secure only the Series of Certificates for which it has been established.
Funds and Accounts
Pursuant to the Trust Agreement, the following funds and accounts were established:
(1) the "School Board of Bay County, Florida Master Lease Project Fund" (the "Project Fund"), which consists of a Project Account, a Costs of Issuance Account and a Capitalized Interest Account;
(2) the "School Board of Bay County, Florida Master Lease Payment Fund" (the "Lease Payment Fund"), which consists of a Principal Account, Interest Account and Reserve Account;
(3) the "School Board of Bay County, Florida Master Lease Prepayment Fund" (the "Prepayment Fund"); and
(4) the "School Board of Bay County, Florida Master Lease Rebate Fund" (the "Rebate Fund").
Upon issuance of each Series of Certificates the Trustee is required to establish (i) a separate subaccount in the Principal Account, Interest Account, Project Account (if applicable), Capitalized Interest Account (if applicable), Costs of Issuance Account and Reserve Account (if applicable), and (ii) a separate account in the Prepayment Fund.
Basic Rent Payments paid to the Trustee, as assignee of the Corporation pursuant to the Master Lease and the Assignment, shall be deposited as received by the Trustee in the Lease Payment Fund and applied by the Trustee in the following manner and in the following order of priority:
(i) There shall be deposited to the subaccount of the Interest Account established for the payment of each Series of Certificates from the Interest Component of Basic Rent made in relation to such Series of Certificates an amount which shall be sufficient to pay the interest becoming due on each Series of Certificates on the next succeeding Payment Date. Moneys in each subaccount of the Interest Account shall be used to pay the interest on the Series of Certificates for which it was established as and when the same become due, whether by prepayment or otherwise, and for no other purpose. No further deposit need be made to the Interest Account when the moneys therein are equal to the interest coming due on all Outstanding Certificates on the next succeeding Payment Date.
(ii) There shall be deposited to the subaccount of the Principal Account established for the payment of each Series of Certificates from the Principal Component of Basic Rent made in relation to such Series of Certificates an amount which shall be sufficient to pay the principal and the Amortization Installment becoming
13 Appendix to page 107 81 due on such Series of Certificates on the next succeeding principal Payment Date. Moneys in each subaccount of the Principal Account shall be used to pay the principal and Amortization Installments on the Series of Certificates for which it was established as and when the same shall mature or are prepaid, and for no other purpose. No further deposit need be made to the Principal Account when the moneys therein are equal to the principal and Amortization Installments coming due on all Outstanding Certificates on the next succeeding principal Payment Date.
Default and Remedies
Upon the occurrence of an Event of Default under the Trust Agreement (which includes the occurrence of an "Event of Default" or "Event of Non-Appropriation" under the Master Lease unless the Master Lease "Event of Default" has been remedied or waived), the Trustee is entitled to and, upon direction of Owners of a majority in aggregate principal amount of the Certificates (or, in lieu thereof, the Insurer, if any, provided it is not in default under the Policy) is required to, exercise a variety of remedies including, without limitation, any one or more of the following: (1) declare the principal of all Certificates of a Series due and payable (but only if the Master Lease has been terminated and only with the consent of the Insurer, if any, provided the Insurer is not in default under the related policy); (2) protect and enforce its rights and the rights of the Owners under the Trust Agreement, Master Lease or Ground Lease(s); and (3) take possession of the Projects (other than Designated Equipment) and sell, re-let or otherwise dispose of the Projects, or any portion thereof. [Confirm voting power of Insurer.]
Additional Series of Certificates
Series of Certificates in addition to the Certificates may be issued under the Trust Agreement for the purpose of funding the costs of new or additional Projects. Proceeds of additional Series of Certificates may also be used for the purpose of capitalizing interest on such Series of Certificates, and paying the costs of issuance applicable thereto. The number of Series of Certificates that may be created under the Trust Agreement is not limited. The aggregate principal amount of each Series of Certificates which may be issued, authenticated and delivered under the Trust Agreement is not limited except as set forth in the related Lease Schedule specifying the details of such Series.
Completion Certificates and Refunding Certificates may also be issued under the Trust Agreement. See "THE 2020 CERTIFICATES OF PARTICIPATION – Completion and Refunding Certificates".
[BOND INSURANCE]
[THE INFORMATION IN THE FOLLOWING SECTION CONCERNING THE POLICY AND [______] HAS BEEN OBTAINED FROM [______]. NONE OF THE SCHOOL BOARD, THE DISTRICT, THE CORPORATION OR THE UNDERWRITERS TAKES RESPONSIBILITY FOR THE ACCURACY THEREOF.]
[Insert Bond Insurance Language]
RISK FACTORS
A PURCHASE OF THE 2020 CERTIFICATES IS SUBJECT TO CERTAIN RISKS. EACH PROSPECTIVE INVESTOR IN THE 2020 CERTIFICATES IS ENCOURAGED TO READ THIS OFFERING STATEMENT IN ITS ENTIRETY. PARTICULAR ATTENTION SHOULD BE GIVEN TO THE FACTORS DESCRIBED BELOW WHICH, AMONG OTHERS, COULD AFFECT THE MARKET PRICE OF THE 2020 CERTIFICATES TO AN EXTENT THAT CANNOT BE DETERMINED.
Annual Right of the School Board to Terminate Series 1999 Lease Agreement and Series 2020A Lease Agreement
Although the School Board has determined that the Series 1999 Project and the Series 2020A Project are necessary to its operations and currently intends to continue the Series 1999 Lease Agreement and the Series 2020A
14 Appendix to page 107 82 Lease Agreement for the Maximum Lease Terms thereof and has covenanted in the Series 1999 Lease Agreement and the Series 2020A Lease Agreement that the Superintendent will include a sufficient amount in the tentative budget and final budget to enable the School Board to make the Basic Rent Payments due in each Fiscal Year, the School Board is not required to appropriate funds for Basic Rent Payments. If for any Fiscal Year the School Board does not approve a tentative budget and a final budget which appropriates sufficient funds from Available Revenues in a line item specifically identified for payment of its obligations under the Master Lease, the Master Lease shall terminate as of the last day of the then initial Lease Term or last Renewal Lease Term for which moneys have been budgeted and appropriated with respect to the Series 1999 Project, the Series 2020 Project and all other Projects financed thereunder, and the School Board will not be obligated to make Basic Rent Payments accruing or arising thereafter, and the School Board shall be required to surrender use, possession and control of the Series 1999 Project, the Series 2020 Project (in each case, other than Designated Equipment), and all other Projects to the Trustee within thirty (30) Business Days.
The likelihood that the Series 1999 Lease Agreement and the Series 2020A Lease Agreement will be terminated as the result of an Event of Non-Appropriation is dependent upon certain factors that are beyond the control of the 2020 Certificates Owners, including the continuing future utility of the Series 1999 Project, the Series 2020 Project and other Projects to the School Board and change in population or demographics within the District.
No Right of Certificate Owners to Direct Remedies
Termination of the Master Lease will not result in termination of the policy issued by the Insurer. Unless the Insurer is in default of its payment obligations under the policy, the Insurer is entitled to control and direct any of the rights or remedies of the Trustee including the right to direct the Trustee as to whether or not to re-let or sell the Series 1999 Project or the Series 2020A Project. The Insurer may elect, subsequent to the termination of the Series 1999 Lease Agreement and the Series 2020A Lease Agreement, to accelerate the maturity of all of the 2020 Certificates outstanding, in which case the Principal and Interest Components of the Basic Rent Payments represented by the 2020 Certificates shall become due and payable immediately. If the Insurer does not elect to accelerate the maturity of all 2020 Certificates of a series outstanding, it has an obligation to continue to make payments to Insured 2020 Certificates Owners in accordance with the original schedule of Basic Rent Payments represented by the Insured 2020 Certificates. The Insurer, however, has no fiduciary responsibility to the Insured 2020 Certificates Owners with respect to the direction of such remedies and has no obligation to preserve the exclusion from gross income for federal income tax purposes of amounts paid to Insured 2020 Certificates Owners by the Insurer and designated as interest.
Limitation on Disposition; Ability to Sell or Re-let
Following an Event of Default under the Trust Agreement (which includes an Event of Non-Appropriation or Event of Default under the Master Lease), the Trustee may take possession of the Projects, including the Series 1999 Project and the Series 2020 Project (other than Designated Equipment) and sell or re-let its interest therein. The Trustee's ability to actually achieve such a disposition of the Projects is limited by its inability to convey fee simple title to the Projects. Moreover, due to the governmental nature of the Projects it is not certain whether a court would permit the exercise of the remedies to sell, re-let or dispose of Projects. Also, there is no assurance that the Trustee will be able to sell, re-let or dispose of the components of the Projects or that the Owners of the 2020 Certificates will obtain payment of all or any portion of the Principal Component or Interest Component thereof upon an Event of Default under the Trust Agreement.
Tax Exemption
Upon termination of the Master Lease, there is no assurance that payments made by the Trustee or the Insurer with respect to the 2020 Certificates and designated as interest will be excludable from gross income for federal income tax purposes. See "TAX EXEMPTION" herein.
15 Appendix to page 107 83 Applicability of Securities Laws
After termination of the Master Lease, the transfer of 2020 Certificates may be subject to or conditioned upon compliance with the registration provisions of applicable federal and state securities laws. Accordingly, there is no assurance that liquidity of the 2020 Certificates will not be impaired following termination of the Master Lease.
Local Option Millage Revenues
The amount which can be realized by the School Board derived from the Local Option Millage Levy (as defined herein), the School Board's primary source of repayment of the 2020 Certificates, can be affected by a variety of factors not within the School Board's control, including, without limitation, fluctuations in the assessed valuation of the property within the County caused by local or national events including, without limitation, disruptions in the housing or financial markets and adverse environmental or weather events affecting the housing market within the District and the State. Additionally, the amount of general business activity, growth and new construction which occurs within the County can affect assessed valuations. There can therefore be no assurances that such revenues will not decrease in the event that such growth and new construction, for whatever reason, decreases or ceases altogether within the County. See "DISTRICT REVENUES" herein and "APPENDIX A - GENERAL INFORMATION RELATING TO BAY COUNTY, FLORIDA" attached hereto. The amounts derived from the Local Option Millage Levy have also been reduced in the past and may be further affected by changes in applicable law. See "AD VALOREM TAXATION - Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes" for information regarding legislation that requires the School Board to share Local Option Millage revenues with charter schools within the District.
Construction Cost Maximums
Section 1013.64(6)(b), Florida Statutes, prohibits a district school board from using funds from any sources for new construction of educational plant space with a total cost per student station, including change orders, greater than the amounts set forth in Section 1013.64(6)(b)1., Florida Statutes, as adjusted. However, if a contract for architectural and design services or for construction management services has been executed before July 1, 2017, a district school board may use funds from any sources for the new construction of educational plant space and such educational plant space is exempt from the total cost per student station requirements. As of July 1, 2019, if the new construction of educational plant space is subject to a lease-purchase agreement entered into pursuant to Section 1011.71(2)(e), Florida Statutes (such as the Series 2020A Lease Agreement), a district school board (i) may use certain local funding sources (including educational impact fees, and voter approved ad valorem taxes, in each case if legally available for such purpose) to pay for the new construction of educational plant space, and (ii) may, but is not required to, use the Local Option Millage Levy revenues and certain state funding sources to pay for the portion of the cost for new construction of educational plant space which does not exceed the total cost per student station requirements or for certain other costs that are not included in cost per student station calculation (such as legal and administrative costs, site improvement costs, costs related to hurricane sheltering/hardening and school security hardening/capital costs). The School Board entered into a contract for architectural and design services with respect to the Series 2020A Project on June 27, 2017. As such, the Series 2020A Project is exempt from the total cost per student station requirements of Section 1013.64(6)(b), Florida Statutes.
Additional Leases
The School Board may enter into other Leases in addition to the Series 2020A Lease Agreement, the Series 1999 Lease Agreement and the other existing Lease Agreements described herein. Failure to appropriate funds to make Basic Rent Payments under any such Lease will, or an event of default under any such Lease may, result in the termination of all Leases. Upon any such termination of all Leases, the School Board must surrender all Projects (other than Designated Equipment), including the Series 1999 Project and the Series 2020A Project (other than Designated Equipment), to the Trustee for sale or lease. The proceeds of any such disposition of Projects will be applied to the payment of the related Series of Certificates. Except as described herein, in no event will owners of either the 2020A Certificates or the 2020B Certificates have any interest in or right to any proceeds of the disposition of Projects financed with the proceeds of another Series of Certificates. The proceeds of any such disposition of the Series 2020A Project shall be applied to the payment of the 2020A Certificates, and the proceeds of any such disposition of the Series 1999 Project shall be applied to the payment of the 2020B Certificates, in each case after
16 Appendix to page 107 84 payment of the Trustee's expenses. There can be no assurance that the remedies available to the Trustee upon any such termination of all Lease Schedules and the disposition of the Series 2020 Project and the Series 1999 Project (other than Designated Equipment) will produce sufficient amounts to pay the outstanding 2020A Certificates and 2020B Certificates, respectively.
Additional Indebtedness
In addition to additional Series of Certificates under the Master Lease, the School Board may also issue additional indebtedness other than in connection with the Master Lease secured by or payable from revenues which would otherwise be available to make Lease Payments without the consent of the Certificate Holders. The incurrence of such additional indebtedness by the School Board may adversely affect the School Board's ability or willingness to make Basic Lease Payments under the Leases.
Bond Insurance Risk Factors]
State Revenues
A large portion of the District's funding is derived from State sources. See "DISTRICT REVENUES - State Revenue Sources." A significantly large percentage of such State revenues are generated from the levy of the State sales tax. The amounts budgeted for distribution from the State to the District are subject to change in the event that projected revenues are not realized. The State has not yet approved a budget for fiscal year 2021.
Legislative Changes
During recent years, proposals have been introduced in the State Legislature that could, if enacted, have an effect on District funding sources and, possibly, make-up. In the past, legislation has been introduced that would reduce State funding for school districts, require that certain percentages of school district funding be spent on particular activities or impose additional funding or other requirements on school districts. Other proposals have sought to 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 historical levels. There can be no assurance that similar or additional legislative 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 District or its finances.
Property and Casualty Insurance
Principally as a result of the substantial property damage caused by hurricanes and other storms in Florida and other parts of the United States over the last several years, property insurance premiums have risen dramatically for Florida property owners. It has become impossible or economically impracticable for many school districts within the State to obtain property insurance with the level of coverage they have historically secured. The Master Lease contains provisions that require the District to maintain certain levels of property and casualty insurance coverage. The District's current property and casualty coverage is for $275 million for all perils, with a sublimit of $100 million for windstorm damage. The District's current policy renews on May 15, 2020 and while the District expects the policy to renew, the levels of coverage required by the Master Lease may not be available at commercially reasonable rates. In the event the District is unable to procure coverage as required by the Master Lease upon the expiration of the current policy, the District expects to either seek a waiver of such provisions for a certain period of time from the Holders or Credit Enhancers of the School Board's outstanding Certificates of Participation or enter into an amendment of the Master Lease with respect to such provisions. In the event the District suffers substantial damage to its property that is not covered by its current insurance or is not eligible for Federal reimbursement, the District's financial condition could be adversely impacted.
Certain Constitutional Amendments
17 Appendix to page 107 85 See "AD VALOREM TAXATION — Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes” for information concerning certain amendments to the Florida Constitution and other legislative proposals that could materially adversely affect the District’s financial situation.
Impacts of Weather; Climate Change
Bay County is located along the Gulf of Mexico and as such is subject to damage from hurricanes and tropical storms. In October, 2018 Hurricane Michael, a category 5 hurricane, made landfall in Bay County and caused extensive damage and disruptions to the properties and students and employees of the District. While the financial impacts of Hurricane Michael were largely offset by insurance and federal and State aid, and ad valorem tax receipts securing the Certificates have not been materially reduced, there can be no assurance that another such catastrophic weather event will not have a material adverse impact on the District and its capacity to repay its debts. See “THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA – Impact of Hurricane Michael.”
Bay County is also subject to possible impacts from global warming, including rising water levels and more extreme weather.
Uncertain Impacts of COVID-19
As described in more detail under the caption “INTRODUCTION – Impact of COVID-19”, the District has been impacted by the COVID-19 virus and the efforts to combat it. Due to the evolving nature of the outbreak and federal, State and local responses thereto, the long-term impacts of the COVID-19 crisis are unknown and dependent on factors such as the length of any shutdown or partial inaccessibility of school facilities, the extent to which the faculty and staff or the student population is directly affected and is unable to attend class, teach or provide services, and the impact on the economy as a whole within the State. The District cannot predict whether there will be any increased costs associated with this or any other potential disease outbreak, including whether there will be an increase in operational costs incurred to implement distance learning strategies or to clean, sanitize and maintain its facilities. The School Board also cannot predict with certainty the potential long-term impacts of the outbreak on the District's revenues, including whether there will be a reduction in State funding, a reduction in taxable assessed values of properties in the District, or a reduction in ad valorem tax collections (including Local Optional Millage Levy revenues), educational impact fees and Sales Surtax revenues.
Cybersecurity Risks
As with any institution the District is subject to cybersecurity risks, including ransomware attacks and phishing scams. The District has had no successful attacks on its technology systems and is insured in the amount of $100,000 for losses resulting from the threat of a data breach. There can be no assurance, however, that such attacks will not cause material loss to the District in the future.
THE MASTER LEASED PROJECTS
The Series 2020A Project is being financed and the Series 1999 Project is being refinanced under the School Board's existing Master Lease as part of the School Board's master lease purchase program (the "Master Lease Program") with the Corporation. The Projects financed or refinanced by the School Board under the Master Lease Program are subject to annual appropriation on an all-or-none basis. For Fiscal Year 2019-20, of the District's 31 total operational schools (not including charter schools located within the County), there were six schools or related facilities and two additions to school facilities leased under the Master Lease. Based on the District's full time equivalent enrollment of approximately 19,620 students as of January 17, 2020, approximately 22.9% of the District's students are attending classes in, or otherwise utilizing, Projects leased under the Master Lease during the Fiscal Year 2019-20. Such percentage does not include the students expected to attend classes in, or otherwise utilize, the Series 2019 Project or the Series 2020A Project upon completion of such Projects. To determine the above percentage, the number of students attending each facility was calculated as follows: for schools that are built and operating, the number of students for the Fiscal Year 2019-20 was used; for the additions, the number of student stations attributable to each specific classroom or number of students served by such facility for Fiscal Year 2019-20 based on the type of school (elementary, middle or high) or facility (cafeteria, auditorium, gymnasium, etc.) was used. Under certain conditions set forth in the Master Lease, the School Board may substitute
18 Appendix to page 107 86 or add components to the Projects and modify the plans and specifications thereof. For a complete description of the Projects under the Master Lease Program see "THE SERIES 2020 PROJECT" and "THE PRIOR PROJECTS" below.
Pursuant to the Master Lease, the School Board does not have the ability to appropriate Basic Rent Payments for one Project or some combination of Projects only. The School Board's annual appropriation for Basic Rent Payments must be for all Projects under the Master Lease Program or it must terminate all Projects under the Master Lease Program (other than certain Designated Equipment). Upon payment of all Lease Payments with respect to a particular Project, such Project shall be removed from the related Lease and Ground Lease, and the School Board shall be under no further obligation to appropriate funds with respect to such Project. In the event the School Board decides not to appropriate funds in its annual budget for all of such financed Projects, the School Board would, at the Trustee's option, have to surrender such Projects (except for certain Designated Equipment), including the Series 2020 Project to the Trustee for the benefit of the Owners of the Certificates which financed or refinanced such Projects.
THE SERIES 2020 PROJECT
Description of Project
The Series 2020 Project consists of the acquisition, construction and installation of certain educational facilities in the District to be financed under the Series 2020A Lease Agreement. All of the Series 2020 Project is located in Bay County, Florida. Under certain conditions set forth in the Series 2020A Lease Agreement, the School Board may substitute components of the Series 2020 Project and modify Plans and Specifications therefor. The Series 2020 Project is a new K-5 School, to be located on Back Beach Road in Panama City Beach, Florida on an approximately 45.63 acre site. The school will have 148,800 gross square feet of usable space. It is designed to house 800 students and grades kindergarten through five. The school is expected to open in August 2021.
The School Board has entered into an Interlocal Agreement with the Panama City Beach Visitors and Convention Bureau, Inc. (the “CVB”) providing for use by the CVB of a parking lot comprising a portion of the Series 2020 Project for the benefit of the Panama City Beach Sports Park and Complex, located adjacent to the Series 2020 Project on land leased from the School Board. The CVB’s use is restricted to times when the parking lot is not in use by students or teachers.
Estimated Budget for the Series 2020 Project
Planning and Design Construction Equipment Total Estimated Budget
$2,301,308 $37,862,867 $1,500,000 $41,664,175
THE PRIOR PROJECTS
Components of the Series 1999 Project
The Series 1999 Project consists of the of the acquisition, construction and installation of certain educational and ancillary facilities in the District which were originally financed by the 1999 Certificates and have been refinanced by the 2010A Certificates pursuant to the Series 1999 Lease Agreement. All of the Series 1999 Project is located in Bay County, Florida. Under certain conditions set forth in the Series 1999 Lease Agreement, the School Board may substitute components of the Series 1999 Project and modify the Plans and Specifications thereof. The following is a general description of facilities comprising the principal components of the Series 1999 Project:
1. J.R. Arnold High School was constructed on a 75-acre site on Back Beach Road, just north of the intersection of Alf Coleman and Back Beach Road, and consists of a complex of six one-and two-story structures with a maximum of 2,105 student stations for grades 9 through 12. The school contains approximately 315,000 gross square feet of classrooms, ancillary and support spaces and also includes playground facilities. The school was constructed to relieve overcrowding experienced in Bay, Mosley and Rutherford High Schools. The school was completed in August 2000.
19 Appendix to page 107 87
Components of the Series 2004 Project
The Series 2004 Project consists of the acquisition, construction and installation of certain educational and ancillary facilities in the District. All of the Series 2004 Project is located in Bay County, Florida. Under certain conditions set forth in the Series 2004 Lease Agreement, the School Board may substitute components of the Series 2004 Project and modify the Plans and Specifications therefor. The following is a general description of facilities comprising the principal components of the Series 2004 Project:
1. Emerald Bay Academy was constructed on an approximately 6-acre site located at 1515 June Avenue. The facility consists of three classroom pods of four classrooms each, administrative, media and food service, totaling approximately 34,600 square feet, access road parking and playground. The facility was completed in October 2004.
2. New Horizons was constructed on an approximately 3-acre site located at 3100 Minnesota Avenue in Lynn Haven. The facility consists of 12 classrooms, labs, resource rooms, media and food service, totaling approximately 44,000 square feet, playground, covered walkways and parking. The facility was completed in June 2007.
Components of the Series 2007A Project
The Series 2007A Project consists of the construction and installation of certain educational facilities in the District financed under the Series 2007A Lease Agreement. Under certain conditions set forth in the Series 2007A Lease Agreement, the School Board may substitute components of the Series 2007A Project and modify Plans and Specifications therefor. The following is a general description of facilities comprising the principal components of the Series 2007A Project:
1. Breakfast Point Academy is located in Panama City Beach, Florida on an approximately 40-acre site. The school has 166,000 gross square feet of usable space. It is designed to house 1,200 students in grades kindergarten through eight. The school was completed in August 2008.
2. Deer Point Elementary School is located in Lynn Haven, Florida on an approximately 20-acre site. The school has 220,000 gross square feet of usable space. It is designed to house 800 students in grades kindergarten through five. The school was completed in December 2009 and opened in 2020.
Components of the Series 2019 Project
The Series 2019 Project consists of the construction and installation of certain educational facilities in the District financed under the Series 2019 Lease Agreement. Under certain conditions set forth in the Series 2019 Lease Agreement, the School Board may substitute components of the Series 2019 Project and modify Plans and Specifications therefor. The following is a general description of facilities comprising the principal components of the Series 2019 Project:
1. Jinks Middle School Gymnasium is located in Panama City, Florida and was damaged during Hurricane Michael. The new 20,600 square foot facility will house the school gymnasium with a new competition basketball court and two practice cross courts, a competition volleyball court and two practice cross courts, and a 3,000 square foot weight room. The gymnasium has seating capacity for 500 people.
2. Bay High School Classroom Wing is located in Panama City, Florida. The ______square foot addition will include new classrooms and school facilities.
THE MASTER LEASE PROGRAM
The Series 2020A Ground Lease Agreement and Series 2010A Ground Lease Agreement
20 Appendix to page 107 88 Pursuant to the Series 2020A Ground Lease Agreement, the School Board, as Ground Lessor, has granted to the Corporation, as Ground Lessee, a leasehold estate in the real estate on which the Series 2020 Project is located (the "2020A Project Land"). The initial term of the Series 2020A Ground Lease Agreement commences the date of delivery of the 2020A Certificates and ends on the earlier of (a) the date on which the outstanding 2020A Certificates, any Certificates issued to refund the 2020A Certificates and any Completion Certificates related to the Series 2020 Project have been paid in full, or (b) June 30, _____ (both dates inclusive). Upon termination of the Master Lease the rental of the 2020A Project Land shall be increased to fair market value in accordance with the terms of the Series 2020A Ground Lease Agreement. The payment of such increased rent is subordinate to the obligation to pay the Principal Component and Interest Component of the Basic Rent Payments represented by the 2020A Certificates. Pursuant to the Assignment of Series 2020A Ground Lease, dated as of ______, the Corporation has assigned its interests in the Series 2020A Ground Lease Agreement to the Trustee for the benefit of Owners of the 2020A Certificates, and any Certificates issued to refund the foregoing, on a pro rata basis.
Pursuant to the Series 2010A Ground Lease Agreement, the School Board, as Ground Lessor, granted to the Corporation, as Ground Lessee, a leasehold estate in the real estate on which the Series 1999 Project is located (the "1999 Project Land"). The term of the Series 2010A Ground Lease Agreement ends on the earlier of (a) the date on which the outstanding 2020B Certificates and any Certificates issued to refund the 2020B Certificates have been paid in full, or (b) June 30, 2023 (both dates inclusive). Upon termination of the Master Lease the rental of the 1999 Project Land shall be increased to fair market value in accordance with the terms of the Series 2010A Ground Lease Agreement. The payment of such increased rent is subordinate to the obligation to pay the Principal Component and Interest Component of the Basic Rent Payments represented by the 2020B Certificates. Pursuant to the Assignment of Series 2010A Ground Lease, dated as of July 1, 2010, the Corporation assigned its interests in the Series 2010A Ground Lease Agreement to the Trustee for the benefit of Owners of the 2020B Certificates, and any Certificates issued to refund the foregoing, on a pro rata basis.
The foregoing does not attempt to completely summarize the provisions of the Series 2020A Ground Lease Agreement or the Series 2010A Ground Lease Agreement. See "APPENDIX H - SERIES 2010A GROUND LEASE AGREEMENT AND ASSIGNMENT OF 2010A GROUND LEASE AND FORMS OF SERIES 2020A GROUND LEASE AGREEMENT AND ASSIGNMENT OF 2020A GROUND LEASE."
The Master Lease
The Master Lease provides for the lease-purchase financing by the School Board from time to time of various real and/or personal property Projects, including the Series 2020 Project, that are described in various Lease Schedules to be attached to the Master Lease. The Master Lease provides the terms and conditions governing the lease of Projects, and the framework under which the School Board is obligated to pay Lease Payments to the Corporation for the Project described on a particular Lease Schedule. Lease Payments consist of Basic Rent Payments, the principal and interest components of which are set forth in each Lease Schedule, and Supplemental Rent set forth on such Lease Schedule, consisting of Trustee and Corporation fees and expenses, prepayment premiums and other financing expenses. Each Lease Schedule will describe the Project to be lease-purchased by the School Board and the details governing the particular lease transaction, including the obligation to make Basic Rent Payments for such Project and to pay Supplemental Rent.
Under the Trust Agreement, one or more Series of Certificates may be issued to obtain funds to be used to pay the costs of acquisition and construction of Projects. The proceeds of sale of the Certificates of each Series will be deposited with the Trustee and will be requisitioned by the School Board, acting as agent for the Corporation, to pay the costs of one or more related Projects. The Corporation has assigned its rights under the Master Lease, including its right to receive Basic Rent Payments from the School Board under all Lease Schedules, other than its right to indemnification, its right to enter into additional Lease Schedules and its obligation not to impair the tax status of the Certificates, to the Trustee for the benefit of owners of the Certificates of all Series in order to secure such Certificates, provided, however, that once moneys are deposited into a specific subaccount under the Trust Agreement for payment of a Series of Certificates, the Certificates of other Series are not collateralized by such moneys. Failure to appropriate any Lease Payment results in an Event of Non-Appropriation with respect to all Basic Rent set forth on all Lease Schedules to the Master Lease, and a default with respect to any obligation under the Master Lease or any Lease Schedule results in an Event of Default with respect to the entire Master Lease and all Lease Schedules thereto. Upon any such termination of all Leases, the School Board must surrender all Projects (other than Designated Equipment),
21 Appendix to page 107 89 including the Series 1999 Project and the Series 2020A Project (other than Designated Equipment), to the Trustee for sale or lease. The owners of the 2020A Certificates shall have no claim against, nor receive any benefits from any portion of the Trust Estate derived from the sale, re-letting or other disposition of Projects, other than the Series 2020A Project, and the owners of the 2020B Certificates shall have no claim against, nor receive any benefits from any portion of the Trust Estate derived from the sale, re-letting or other disposition of Projects, other than the Series 1999 Project. See "SECURITY FOR THE CERTIFICATES" herein.
The 2020A Certificates are being issued to provide funds for the purposes of financing the Series 2020 Project and paying certain costs of issuance with respect to the 2020A Certificates. See "THE SERIES 2020 PROJECT" herein. The 2020B Certificates are being issued to provide funds for the purposes of refinancing certain educational and related facilities and equipment and paying certain costs of issuance with respect to the 2020B Certificates.
The Principal Component of the Basic Rent Payments represented by the 2020A Certificates and the 2020B Certificates is payable in accordance with the maturity schedules set forth on the inside cover page hereof, subject to earlier prepayment as provided herein.
The foregoing does not attempt to completely summarize the provisions of the Master Lease. See “APPENDIX F - MASTER LEASE PURCHASE AGREEMENT AND FORMS OF SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT AND SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT."
22 Appendix to page 107 90 SOURCES AND USES OF 2020 CERTIFICATE PROCEEDS
2020A Certificates Sources of Funds:
Par Amount of 2020A Certificates $ [Less: Net Original Issue Discount Plus: Net Original Issue Premium]
TOTAL SOURCES $
Uses of Funds:
Deposit to Series 2020A Subaccount of the Project Account(1) $ Deposit to Series 2020A Subaccount of Costs of Issuance Account(2)
TOTAL USES $
(1) To be applied to pay costs of the Series 2020 Project. (2) Includes, without limitation, the Policy premium, Underwriters' discount, legal, accounting and financial advisory fees, printing costs and other costs associated with the issuance of the 2020A Certificates.
2020B Certificates Sources of Funds:
Par Amount of 2020B Certificates $ [Less: Net Original Issue Discount Plus: Net Original Issue Premium]
TOTAL SOURCES $
Uses of Funds:
Deposit to Escrow Fund (1) $ Deposit to Series 2020B Subaccount of Costs of Issuance Account(2)
TOTAL USES $
(1) To be applied to refund, on a current basis, the 2010A Certificates. See “THE PLAN OF REFUNDING” herein. (2) Includes, without limitation, the Policy premium, Underwriters' discount, legal, accounting and financial advisory fees, printing costs and other costs associated with the issuance of the 2020B Certificates.
23 Appendix to page 107 91 2020 CERTIFICATES PAYMENT SCHEDULES
The annual payment requirements for the 2020A Certificates are shown below:
Period Ending (July1) Principal Interest Total
The annual payment requirements for the 2020B Certificates are shown below:
Period Ending (July1) Principal Interest Total
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24 Appendix to page 107 92 COMBINED CERTIFICATE PAYMENT SCHEDULE
Debt Service requirements for the 2013 Certificates, the 2015 Certificates, the 2019 Certificates, the 2020A Certificates and the 2020B Certificates are as follows:
Period Aggregate Ending 2013 2015 2019 2020A 2020B Debt (July 1) Certificates Certificates Certificates Certificates Certificates Service
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25 Appendix to page 107 93 THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA
General
The School Board is a corporate body existing under the laws of the State and is the governing body of the District. The School Board consists of five members elected at-large by districts within the District for overlapping four-year terms. The District is organized under Section 4, Article IX, of the Constitution of the State of Florida and Chapter 1001 et. seq., Florida Statutes, as amended. The District covers the same geographic area as Bay County, Florida (the "County"). Management of the District is independent of the County government and local governments within the County. The School Board operates under the general direction of the State Board of Education, which is composed of the Governor and the State Cabinet. The Bay County Tax Collector collects ad valorem taxes for the District but exercises no control over the disposition of the District's tax receipts.
For Fiscal Year 2019-20, the public school system of Bay County included the operation of 46 schools consisting of nineteen Elementary Schools, six Middle Schools, five High Schools, one K-12 School, three K-8 Schools, eight Charter Schools, three Special Purpose Schools, and one alternative adult/vocational education facility which provide public education for approximately 24,557 full-time equivalent ("FTE.") students in kindergarten through grade 12 programs, as well as extensive adult education programs. All public schools of the County are fully accredited by the State of Florida and by AdvanceED, successor to the K-12 Division of the Southern Association of Colleges and Schools.
There are 12 Charter Schools operating within the County with a total enrollment of approximately 4,991 FTE students. Although Charter Schools operate under independent governance, State funding for Charter Schools within the County, as well as a share of certain locally generated funds, is paid through the District. Unless otherwise indicated, information set out in this Offering Statement pertains to the schools operated by the District and the students who attend those schools and faculty and staff serving those schools.]
The School Board
The governing board of the District is the School Board, which is a public corporation existing under and by virtue of the laws of the State of Florida, particularly Chapter 1001, Florida Statutes. The principal offices of the School Board are located in Bay County, Florida.
The School Board is the policy-making body of the District, consisting of five members elected at-large by districts within the District for overlapping four-year terms. Under existing statutes the School Board's duties and powers include, but are not limited to, the acquisition, maintenance and disposition of school property within the District; the development and adoption of a school program for the District; the establishment, organization and operation of schools, including vocational and evening schools, programs for gifted students and for students in residential care facilities; the appointment, compensation, promotion, suspension and dismissal of employees; the establishment of courses of study and the provision for adequate instruction aids; and the establishment of a system to transport students to school or school-related activities.
The School Board also has broad financial responsibilities, including approval of the annual budget, adoption of the school tax levy and the establishment of a system of accounting and budgetary controls. The annual budget and accounting reports must be filed with the State Department of Education.
The current members of the School Board and the expiration of their respective terms are as follows:
Term Expires Name District1 Office November Steve Moss 5 Chairman 2022 Pamm Chapman 3 Vice Chairman 2022 Ryan Neves 4 Member 2020 Jerry Register 1 Member 2020 ______1 The District 2 Board position is vacant, pending election of a new Board member in November, 2020.
26 Appendix to page 107 94
Administration
The Superintendent of Schools is elected for a four-year term and serves as ex officio Secretary to and administrative officer of the School Board. The Superintendent oversees operations of the school system, makes policy recommendations to the School Board, and performs the duties assigned to him by law and the regulations of the State Department of Education.
The Superintendent also prepares the annual budget for approval by the School Board, recommends the tax levy based upon needs illustrated by the budget, recommends debt issuance or borrowing plans of the School Board when necessary, provides recommendations for investment of available funds, and keeps records with respect to all funds and financial transactions of the School Board.
The Superintendent is assisted by a deputy superintendent, two executive directors and a chief financial officer. Under each of these executive directors are the various department heads, functionaries and instructional staff personnel which support and service each of the elementary, middle and high schools within the Bay County school system.
William V. Husfelt, III was elected Superintendent of Schools for the District in November 2008. His current term expires in November, 2020, and intends to seek re-election. A former high school principal with both middle and high school coaching, teaching and administrative experience, he holds a Master's degree in Educational Leadership from Florida State University. Mr. Husfelt was the recipient of the 2004 and 2006 Florida Commissioner's Principal Achievement Award for outstanding leadership and was honored several years as the District Administrator of the Year. He has also been on the Board of Directors of the Panhandle Federal Credit Union since 2000.
Total School Personnel
For Fiscal Year 2019-20, the professional staff of the District includes 1,454 teachers, 102 principals and assistant principals, and 104 administrators and managers. Other personnel include teachers' aides, clerks and secretaries, bus drivers, cafeteria personnel, custodial and maintenance workers, mechanics and warehousemen. The total number of full-time school personnel for the 2019-20 school year is 3,739.
Employee Relations; Retirement and Other Postemployment Benefit Programs
Employee Relations
All instructional employees of the District are eligible to be represented by the Association of Bay County Educators (ABCE) which is affiliated with Florida Teachers Professional Association-National Education Association (FTPA-NEA). Certain non-instructional employees of the District are represented by the Bay Educational Support Personnel Association (BESPA) which is also affiliated with FTPA-NEA. The percentage of total District employees eligible to be represented by a union is approximately [93%]. [The School Board has existing contracts with ABCE and BESPA which expire June 30, 2020 and June 30, 2022, respectively. NTD: Status of negotiations of expiring contract?] The School Board believes that the employee relations among all segments of the educational community have always been extremely professional and conducive to resolving problems internally in the best interest of the District.
State Retirement Programs
The District participates in the Florida Retirement System ("FRS"), a cost sharing, multiple-employer, public employee retirement system, which covers substantially all regular employees of the District. Beginning in 2002, the FRS became one system with two primary plans, a defined benefit pension plan (the "FRS Pension Plan") and a defined contribution plan known as the Public Employee Optional Retirement Program (the "FRS Investment Plan"). FRS membership is required for all employees filling a regularly established position in a State agency, district school board, county, State university or State community college. Some municipalities, special districts, charter schools and metropolitan planning organizations also choose to participate in the FRS; however, participation is generally irrevocable after the entity elects to participate.
27 Appendix to page 107 95 The information relating to the FRS contained herein has been obtained from the FRS Annual Reports which are available by writing to the Division of Retirement, P.O. Box 9000, Tallahassee, Florida 32315-9000, or by phoning (850) 488-5706 or visiting the following website: www.dms.myflorida.com/workforce_operations/retirement/publications/annual_reports. No representation is made by the Board as to the accuracy or adequacy of such information or that there has not been any material adverse change in such information subsequent to the date of such information.
There are five general classes of membership in the FRS: (1) Senior Management Service Class ("SMSC") members which include, among others, senior management level positions in State and local governments (including school districts) and assistant state attorneys, prosecutors and public defenders; (2) Special Risk Class which includes, among others, positions such as law enforcement officers, firefighters, correctional officers, emergency medical technicians and paramedics; (3) Special Risk Administrative Support Class which include, among others, non-special risk law enforcement, firefighting, emergency medical care or correctional administrative support positions within a FRS special risk-employing agency; (4) Elected Officers' Class ("EOC") which includes members who are elected State and city officers and the elected officers of cities and special districts that choose to place their officials in this class; and (5) Regular Class members includes members that do not qualify for membership in the other classes.
The FRS is a cost-sharing multiple-employer public-employee retirement system with two primary plans. The Department of Management Services, Division of Retirement administers the FRS Pension Plan and the Florida State Board of Administration (the "SBA") invests the assets of the FRS Pension Plan held in the FRS Trust Fund. Administration costs of the FRS Pension Plan are funded through investment earnings of the FRS Trust Fund. Reporting of the FRS is on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when the obligation is incurred.
The SBA administers the FRS Investment Plan, a defined contribution plan available to eligible FRS members as an alternative to the FRS Pension Plan. Retirement benefits are based upon the value of the member's account upon retirement. Regardless of membership class, FRS Investment Plan contributions vest after one year of service. A member vests immediately in all employee contributions paid to the FRS Investment Plan. If a member elects to transfer amounts from the FRS Pension Plan to that member's FRS Investment Plan account, the member must meet the eight-year vesting requirement (or six-year vesting requirement if enrolled prior to July 1, 2011) for any such transferred funds and associated earnings. The FRS Investment Plan is funded by employer contributions that are based on salary. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Administration costs of the FRS Investment Plan are funded through a 0.06% employer contribution and forfeited benefits. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the FRS Investment Plan, receive a lump-sum distribution, or leave the funds invested for future distribution. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan or remain in the FRS Investment Plan and rely upon that account balance for retirement income.
Since July 1, 2001, the FRS Pension Plan has provided for vesting of benefits after six years of creditable service. Members not actively working in a position covered by the FRS on July 1, 2001, must return to covered employment for up to one work year to be eligible to vest with less service than was required under the law in effect before July 1, 2001. Members initially enrolled on or after July 1, 2001, through June 30, 2011, vest after six years of service. Members initially enrolled on or after July 1, 2011, vest after eight years of creditable service. Members are eligible for normal retirement when they have met the various plan requirements applicable to each class of membership. Regardless of class, a member may take early retirement any time after vesting within 20 years of normal retirement age; however, there is a five percent benefit reduction for each year prior to normal retirement age.
Benefits under the FRS Pension Plan are computed on the basis of age, average final compensation, creditable years of service, and accrual value by membership class. Members are also eligible for in-line-of-duty or regular disability and survivors' benefits. Pension benefits of retirees and annuitants are increased each July 1 by a cost-of- living adjustment. If the member was initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member was initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-
28 Appendix to page 107 96 July 2011 service credit by the total service credit at retirement multiplied by 3%. FRS Pension Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement.
Effective July 1, 2011, all members of FRS were required to contribute 3% of their gross compensation toward their retirement. In addition, the legislation reduced the required employer contribution rates for each membership class and subclass of the FRS.
Additional legislative changes that only apply to employees who initially enroll on or after July 1, 2011, include: (1) the average final compensation upon which retirement benefits are calculated are based on the eight highest (formerly five highest) fiscal years of compensation prior to retirement; (2) the DROP (as defined herein) is maintained but the interest accrual rate is reduced from 6.5% to 1.3%; (3) the normal retirement age is increased from 62 to 65; and (4) the years of creditable service is increased from 30 to 33 and the vesting period is increased to eight years (formerly six).
Subject to provisions of Section 121.091, Florida Statutes, the Defined Retirement Option Program (the "DROP") permits employees eligible for normal retirement under the FRS to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in the DROP for a period not to exceed 60 months while the member's benefits accumulate in the FRS Trust Fund. Authorized instructional personnel may participate in the DROP for up to 36 additional months beyond their initial 60-month participation period. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. As of June 30, 2019, the FRS Trust Fund held $2,542,917,693 in accumulated benefits and interest for 33,490 DROP participants. Of those 33,490 DROP Participants, 31,749 were active in DROP with balances totaling $2,277,211,830. The remaining participants were no longer active in the DROP and had balances totaling $277,211,830 to be processed after June 30, 2019.
The Retiree Health Insurance Subsidy ("HIS") Program is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Department of Management Services. For the Fiscal Year ended June 30, 2018, eligible retirees and beneficiaries received a monthly HIS payment equal to the number of years of creditable service completed at the time of retirement multiplied by $5. The payments are at least $30 but not more than $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which can include Medicare.
The HIS Program is funded by required contributions from FRS participating employers as set by the Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the Fiscal Year ended June 30, 2018, the contribution rate was 1.66% of payroll pursuant to Section 112.363, Florida Statutes. The District contributed 100% of its statutorily required contributions for the current and preceding three years. HIS contributions are deposited in a separate trust fund from which HIS payments are authorized. HIS benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, the legislature may reduce or cancel HIS payments.
Participating employers must comply with the statutory contribution requirements. Section 121.031(3), Florida Statutes, requires an annual actuarial valuation of the FRS Pension Plan, which is provided to the Florida Legislature as guidance for funding decisions. Employer contribution rates under the uniform rate structure (a blending of both the FRS Pension Plan and FRS Investment Plan rates) are recommended by the actuary but set by the Florida Legislature. Statutes require that any unfunded actuarial liability ("UAL") be amortized within 30 plan years and any surplus amounts available to offset total retirement system costs are to be amortized over a 10-year rolling period on a level-dollar basis. As of June 30, 2019, the balance of legally required reserves was $163,573,726,217. These funds were reserved to provide for total current and future benefits, refunds and administration of the FRS Pension Plan.
The District's liability for participation is limited to the payment of the required contribution at the rates and frequencies established by law on future payrolls of the District. The District's contributions to the FRS Pension Plan and FRS Investment Plan for the Fiscal Year ended June 30, 2019, totaled $8.71 million, which were equal to the
29 Appendix to page 107 97 required contribution for such Fiscal Year. This excludes the HIS Program contributions. The District's contributions to the HIS Plan for the Fiscal Year ended June 30, 2019 totaled $2.01 million.
As a participating employer in the FRS, the District implemented Government Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions (an amendment of GASB Statement No. 27) and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date (an amendment to GASB Statement No. 68), effective for fiscal years beginning after June 15, 2014. The implementation of these Statements requires the District to record a liability for its proportionate share of the net pension liabilities of the FRS plans.
The scope of GASB Statements Nos. 68 and 71 address accounting and financial reporting for pensions that are provided to employees of state and local governmental employers that meet certain characteristics. These Statements establish standards for measuring and recognizing liabilities, deferred outflows/inflows of resources and expense/expenditures. For defined benefit pensions such as the FRS plans, GASB Statements Nos. 68 and 71 identify 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. Pursuant to these Statements, the District is required to record a liability for its proportionate share of pension liabilities as reported by the FRS plans. While these Statements require recognition and disclosure of the unfunded pension liability, there is no requirement that such liability be funded. Accordingly, a deficit in unrestricted net position should not be considered, solely, as evidence of financial difficulties. The adoption of GASB Statements Nos. 68 and 71 resulted in a material increase in the District's liabilities and a material decrease in the District's net position. The District's proportionate share of the net pension liabilities of the FRS Pension Plan totaled $82,492,243 at June 30, 2019. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined an actuarial valuation as of July 1, 2018. The District's proportionate share of the net pension liability was based on the District's Fiscal Year 2017-18 contributions relative to the total fiscal year 2017-18 contributions of all participating members. At June 30, 2018, the District's proportion was 0.27387392%, which was a decrease of 0.00392 from its proportion measured as of June 30, 2017.
As of June 30, 2019, the District reported a net pension liability of $40,616,695 million for its proportionate share of the HIS Plan's net pension liability. The current portion of the net pension liability is the District's proportionate share of benefit payments expected to be paid within one year, net of the District's proportionate share of the HIS Plan's fiduciary net position available to pay that amount. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2018. The District's proportionate share of the net pension liability was based on the District's Fiscal Year 2017-18 contributions relative to the total fiscal year 2017-18 contributions of all participating members. As of June 30, 2018, the District's proportion was .38375155%, which was an increase of .005603 from its proportion measured as of June 30, 2017. See APPENDIX B hereto, including Notes 14 and 15 to the Basic Financial Statements and the Required Supplementary Information for additional information relating to the District's implementation of GASB Statements Nos. 68 and 71.
Other Post Employment Benefit Program
In addition to its contributions under the State's retirement plan described above, the District provides other postemployment benefits ("OPEB") for certain of its retired employees in the form of an implicit rate subsidy by providing access to health insurance plans requiring the use of a single "blended" or "common" rate for both active and retired employees. The offering of this health insurance coverage is required by Section 112.0801, Florida Statutes.
As with all governmental entities providing similar plans, the District is required to comply with the Governmental Accounting Standard's Board Statement No. 75 - Accounting and Financial Reporting by Employers for Postemployment Benefits other than Pension ("GASB 75"). In order to comply with GASB 75, the District retained David Shaub, FSA (the "Actuary"), to actuarially review the District's OPEB liability and provide the District with a written valuation. The Actuary determined the District's actuarial accrued liability related to OPEB, which approximates the present value of all future expected postretirement life and medical premiums and administrative costs which are attributable to the past service of those retired and active employees, at $5,075,461 as of July 1, 2019.
30 Appendix to page 107 98 Such liability is amortized over 30 years. The Actuary also determined the District's annual required contribution ("ARC"), which is the portion of the total accrued actuarial liability allocated to the current fiscal year needed to pay both normal costs (current and future benefits earned) and to amortize the unfunded accrued liability (past benefits earned, but not previously provided for) to be $873,223 for the Fiscal Year ended June 30, 2019. The calculation of the accrued actuarial liability and the ARC is, by definition and necessity, based upon a number of assumptions, including interest rates on investments, average retirement age, life expectancy, healthcare costs per employee and insurance premiums, many of which factors are subject to future economic and demographic variations. The District's net, end-of-year OPEB obligation was $5,296,857 as of June 30, 2019.
While the District does not know at this time what its ultimate OPEB liabilities will be in connection with GASB 75 compliance in the future or how much of the related annual required contributions it will need to budget in future years, it expects its OPEB liability to be manageable within its normal budgeting process.
Below are the details regarding the total OPEB liability from July 1, 2018 to June 30, 2019 (in thousands):
Total OPEB Liability Balance Recognized at 07/01/2018 $5,075,461 Changes for the Fiscal Year: Service Cost $517,021 Interest $153,279 Changes of Benefit Terms Differences Between Expected and Actual Experience Changes in Assumptions and Other Inputs Benefit Payments ($448,904) (Net Changes) $221,396 Balance at 06/30/2019 $5,296,857
* Changes of assumptions and other inputs include the change in the discount rate from 4.5 percent to 2.98 percent in 2018.
For additional information on OPEB liability, including assumptions on which the calculation is based, see Note 16 and the Required Supplementary Information to the audited financial statements for the Fiscal Year ended June 30, 2019 attached as APPENDIX B hereto.
School Facilities, Enrollment and Other Information
District Schools and Enrollment*
School Number of FTE Average Expenditure per Year Schools Enrollment FTE Student* 2014/2015 45 26,820 $7,592.93 2015/2016 46 27,125 $7,627.24 2016/2017 46 27,355 $7,711.46 2017/2018 47 27,384 $7,952.03 2018/2019** 47 25,747 $10,904.00
*General Fund Only. Includes Charter Schools within the County. **Prior to Hurricane Michael in October, 2018. Source: School District of Bay County, Florida.
Profile of Enrollments
31 Appendix to page 107 99 Full Time Equivalent Students
2014/15 2015/16 2016/17 2017/18 2018/19* Grades K-3 8,950.24 8,822.52 8,638.31 8,527.18 7,781.78 Grades 4-8 9,822.45 9,991.79 10,047.05 10,236.22 9,745.90 Grades 9-12 6,482.38 6,623.04 6,806.26 6,726.56 6,389.55 Exceptional Ed 617.30 651.25 699.30 713.73 666.12 Vocational Ed 591.21 585.03 624.58 650.41 635.78 Ed Alternatives (ESOC) 356.66 451.03 539.15 529.62 526.98
TOTAL 26,820.24 27,124.66 27,354.65 27,383.72 25,747.11
*Prior to Hurricane Michael in October, 2018 Source: School District of Bay County, Florida.
Projected Student Enrollment
Full Time School Year Equivalent Enrollment 2019/2020 25,200.41 2020/2021 24,606.30 2021/2022 24,936.78 2022/2023 25,102.08 2023/2024 25,230.75 2024/2025 24,951.01
Source: Florida Office of Economic & Demographic Research-Forecasts of Student Enrollment for Florida School Districts (February 17, 2020).
32 Appendix to page 107 100 Impact of Hurricane Michael
On October 10, 2018 Hurricane Michael, a category 5 storm, made landfall in Bay County. District buildings and other facilities sustained in excess of $400 million in damage and the District incurred various other expenses, with total storm-related expenditures totaling approximately $500 million. Immediately following the hurricane student enrollment dropped approximately 13% and total employment by the District decreased approximately 10%. Four District schools were closed temporarily and an additional school was repurposed to house a displaced school.
The long-term impacts are not yet known. Substantially all of the property damage is, or is expected to be, paid or reimbursed out of proceeds of insurance or federal emergency management funding. Enrollment is now approximately 10% below the pre-storm total and total employment is approximately 9% lower. The total operating budget is approximately 1% below the total prior to the storm, as a result of certain one-time funding from the State.
District revenues for operations should be reduced in future years consistent with the reduced enrollment. Ad valorem tax revenues, which secure the repayment of the Certificates, have not been materially affected to date and the District expects that they will increase in future years reflecting new construction.
District Financial Operations and Accounting Practices
The financial and accounting practices of the District are designed to conform to generally accepted accounting principles applied to governmental units. The District implemented the provisions of GASB Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments ("GASB 34"), and related GASB pronouncements, during the Fiscal Year ended June 30, 2002. GASB 34 created new basic financial statements for reporting the District's financial activities. In addition to fund-basis financial statements, the financial statements now include government-wide financial statements prepared on the accrual basis of accounting that split the District's programs between governmental and business-type activities. For Fiscal Year 2018-19, the organization of such financial statements was generally as follows:
Basis of Presentation
Government-wide Financial Statements - Government-wide financial statements, including the statement of net assets and statement of activities, present information about the District as a whole. These statements include the non-fiduciary financial activity of the District and its component units. The statements distinguish between governmental activities of the District and those that are considered business-type activities.
Government-wide financial statements are prepared using the economic resources measurement focus. The statement of activities presents a comparison between direct expenses and program revenues for each function or program of the District's governmental activities and for each segment of the business-type activities. Direct expenses are those that are specifically associated with a service, program, or department and are thereby clearly identifiable to a particular function. Depreciation expense specifically associated with the Pupil Transportation Services, Central Services and Operation of Plant functions is allocated to those functions, with remaining depreciation expenses reported as uncollected.
Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues. The comparison of direct expenses with program revenues identifies the extent to which each governmental function is self-financing or draws from the general revenues of the District.
The effects of interfund activity have been eliminated from the government-wide financial statements, except for interfund services provided and used and the net residual amounts between governmental and business-type activities.
Fund Financial Statements - Fund financial statements report detailed information about the District in the governmental, proprietary and fiduciary funds. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Non-major funds are aggregated
33 Appendix to page 107 101 and reported in a single column. Because the focus of governmental fund financial statements differs from the focus of government-wide financial statements, a reconciliation is presented with each of the governmental fund financial statements.
The District reports the following major governmental funds:
General Fund - to account for all financial resources not required to be accounted for in another fund, and for certain revenues from the State that are legally restricted to be expended for specific current operating purposes.
Debt Service — Other Fund — to account for the accumulation of resources for, and the payment of, debt principal, interest and related costs for the District's Certificates of Participation.
Capital Projects - Local Capital Improvement Fund — to account for the financial resources generated by the local capital improvement tax levy to be used for educational capital outlay needs, including new construction, renovation and remodeling projects.
Additionally, the District reports the following proprietary and fiduciary fund types:
Enterprise Fund — Beacon Learning Center — to account for the financial activities and account balances of the Beacon Learning Center, which provides educational services for a fee to individuals, public and private entities and district school boards.
Internal Service Fund — to account for the District's self-insurance programs.
Agency Fund — to account for resources of the school internal funds which are used to administer moneys collected at the several schools in connection with school, student athletic, class, and club activities.
Accounting and Funds
Pursuant to Section 11.45, Florida Statutes, the financial operations of the District are subject to annual audit by the Office of the Auditor General of the State of Florida.
The accounting practices of the School Board are designed to conform to generally accepted accounting principles applicable to governmental units. The District's accounting records must meet the standards prescribed by the Florida Department of Education as required by law.
Budget Process
State law requires the School Board to advertise its intent to adopt a tentative budget, including a capital outlay budget, within 29 days following the County Property Appraiser's official certification of taxable property, which usually occurs on or about July 1. The School Board holds a public hearing on the tentative budget and the proposed tax rates within five days of its advertisement, and officially adopts the tentative budget and tax rates at the hearing. Thereafter, the County Property Appraiser prepares tax millage notices for property owners within the School District. The final budget and tax rate are fixed on or before September 18 of each year, following a final public hearing. On September ___, 2019, the School Board adopted the Budget for the 2019-20 Fiscal Year.
The Superintendent of Schools is responsible for preparing the preliminary and tentative budgets for recommendation to the School Board. Florida law requires the School Board to adopt and maintain a balanced budget, in which anticipated revenues less certain required deductions, combined with beginning fund balances equal appropriations. Generally, the final budget is substantially the same as the tentative budget since the School Board's hiring plans and materials purchases have been determined before the final budget is adopted.
34 Appendix to page 107 102 Governmental Revenues
The School Board's governmental revenues are derived from federal and State appropriations and local sources. The following tables summarize the governmental revenues by source and the results of operations for the governmental revenues for the audited Fiscal Years ended June 30, 2016, 2017, 2018 and 2019, and the adopted budget for the Fiscal Year ending June 30, 2020.
School District of Bay County Governmental Revenue Sources
Fiscal Year Ended June 30 Federal Funds (1) State Funds Local Funds Total Revenue 2016 $26,962,262 $113,771,747 $135,582,110 $276,316,119 2017 $27,425,446 $122,498,956 $130,885,643 $280,810,065 2018 $28,218,417 $126,402,652 $135,496,051 $290,117,120 2019 $50,005,285 $125,966,380 $140,502,363 $316,474,028 2020(2) $64,037,875 $130,971,535 $154,008,450 $349,017,860
(1) Includes direct federal funds and federal funds received through the State. (2) Budgeted Amount.
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35 Appendix to page 107 103 School District of Bay County, Florida Summary of General Fund Operations Fiscal Year 6/30
Audited Budgeted FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Revenues Federal $ 637,623 $ 648,383 $ 670,092 $ 1,126,348 $524,000 Federal through State and Local 1,047,179 1,818,630 1,475,549 24,794,784 $1,284,366 State Sources 111,392,375 118,457,475 123,729,502 119,566,833 $128,650,711 Local 94,502,346 88,846,266 87,964,802 93,089,250 $80,581,718 Total Revenues $ 207,579,523 $ 209,770,754 $ 213,839,945 $ 238,577,215 $211,040,795 Expenditures Current – Education Instruction $ 137,493,533 $ 141,296,951 $ 148,010,024 $ 146,551,104 $154,218,612 Pupil Personnel 7,572,797 7,527,762 7,737,104 8,103,663 8,316,444 Instructional Media 2,360,003 2,328,993 2,475,804 2,410,122 2,642,166 Instruction & Curriculum Development 2,925,851 2,936,528 3,251,185 3,304,477 3,525,107 Instructional Staff Training 1,339,481 1,443,712 1,486,049 1,339,628 2,306,843 Instruction Related Technology 12,216 15,899 724 321 5,066 Board of Education 1,122,705 754,780 880,062 906,871 959,624 General Administration 666,257 675,179 691,297 752,252 3,337,173 School Administration 13,954,055 14,171,946 14,274,547 14,242,996 13,436,297 Facilities Acquisition & Construction 507,564 584,146 713,056 56,200,456 61,121,947 Fiscal Services 1,738,973 1,690,050 1,615,857 1,614,338 1,788,673 Food Services -- 14 2,815 -- Central Services 2,915,340 2,892,176 1,720,255 3,481,541 2,079,222 Pupil Transportation 8,232,352 8,917,413 8,468,130 8,311,261 8,102,759 Operation of Plant 15,902,209 16,520,218 16,969,436 15,609,990 17,998,189 Maintenance of Plant 4,512,838 4,427,153 4,833,759 4,594,568 5,100,226 Admin. Tech. Services 3,141,476 3,304,059 3,219,762 3,166,655 3,378,420 Community Services 1,941,142 2,107,572 1,904,805 2,298,031 1,938,598 Fixed Capital Outlay: Facilities Acquisition & Construction Other Capital Outlay 547,544 584,686 695,615 11,133,381 Debt Service Principal Interest and Fiscal Charges Total Expenditures $ 206,886,336 $ 212,056,221 $ 218,950,736 $ 284,021,655 $290,255,366 Excess (Deficiency) of Revenues Over Expenditures 693,187 (2,285,647) (5,110,791) (45,444,440) (79,214,571) Other Financing Sources (Uses) 2,014,246 3,423,602 3,812,539 103,670,593 8,459,712 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 2,707,433 1,138,135 (1,298,252) 58,226,153 (70,754,859) Beginning Fund Balance 23,909,346 26,616,779 27,754,914 26,456,662 84,682,815 Ending Fund Balance $ 26,616,779 $ 27,754,914 $ 26,456,662 $ 84,682,815 $13,927,956
Sources: Carr Riggs & Ingram CPAs and Advisors Audited Financial Statement of the Bay County District School Board for the fiscal years ended June 30, 2016, 2017, 2018 and 2019. Adopted Budget for fiscal year ending June 30, 2020.
General Fund Balance Guidelines
Section 1011.051, Florida Statutes, entitled "Guidelines for general funds" requires that if a school district's General Fund ending balance not classified as restricted, committed or nonspendable in the approved operating budget is projected to fall below three percent (3%) of projected General Fund revenues, the Superintendent shall provide written notification to the district school board and the Commissioner of Education. The section further requires that if the General Fund ending balance not classified as restricted, committed or nonspendable is projected to fall below two percent (2%) of projected General Fund revenues, the Superintendent shall provide written notification to the district school board and the Commissioner of Education. Within 14 days after receiving such notification of an
36 Appendix to page 107 104 ending balance below two percent (2%), if the Commissioner determines that the district does not have a plan that is reasonably anticipated to avoid a financial emergency as determined pursuant to Florida Statutes pertaining thereto, the Commissioner shall appoint a financial emergency board that may take certain delineated steps to assist a district school board in complying with the General Fund requirements. In Fiscal Year 2017-18, the District's General Fund ending balance not classified as restricted, committed or nonspendable was 11.2% of General Fund Revenues. In Fiscal Year 2018-19, the District's General Fund ending balance not classified as restricted, committed or nonspendable was 8.6% of General Fund Revenues and for Fiscal Year 2019-20 is budgeted to be 6.2% of General Fund Revenues.
SELECTED FINANCIAL INFORMATION SCHOOL DISTRICT OF BAY COUNTY Direct and Overlapping Debt Statement
General Non-Self Obligation Supporting Self-Supporting Debt Debt Debt DIRECT DEBT School District of Bay County 2011 Sales Tax Note $ 2013 Sales Tax Note $1,282,000 Certificates of Participation, Series 2010 $15,175,000 Certificates of Participation, Series 2013 $3,259,400 Certificates of Participation, Series 2015 $44,420,000 Certificates of Participation, Series 2019 $30,250,000 Revenue Anticipation Note $4,052,000 Total Direct Debt
OVERLAPPING DEBT Bay County 1
Total Overlapping Debt
Total
1 As of [September 30, 2019] [The remainder is assumed to be current] Sources: Bay County, Florida Comprehensive Annual Financial Report for Fiscal Year ended September 30, 2018; School District of Bay County, Florida Audited Financial Statements for the Fiscal Year ended June 30, 2019.
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37 Appendix to page 107 105 School District of Bay County, Florida Comparative Ratios of Bonded Debt To Taxable Assessed Valuation and Per Capita Indebtedness (as of June 30, 2019)
1. Population (2019)(1) 167,283 2. Total Taxable Assessed Valuation (2019)(2) $16,494,646,261 3. Direct General Obligation Debt a) As a Percent of Taxable Assessed Valuation b) Per Capita 4. Direct and Overlapping General Obligation Debt a) As a Percent of Taxable Assessed Valuation b) Per Capita 5. Direct Non-Self Supporting Revenue and Direct General Obligation Debt a) As a Percent of Taxable Assessed Valuation b) Per Capita 6. Directing and Overlapping General Obligation and Direct and Overlapping Non-Self Supporting Revenue Debt(3) a) As a Percent of Taxable Assessed Valuation b) Per Capita
(1) Bureau of Economic & Business Research, University of Florida. (2) Represents 96% of Total Taxable Assessed Valuation ($17,181,923,189) as provided by the Bay County Property Appraiser. (3) Bay County, Florida overlapping debt as of September 30, 2019.
Source: School District of Bay County, Florida Audited Financial Statements for Fiscal Year ended June 30, 2019; Bay County, Florida Comprehensive Annual Financial Report for Fiscal Year ended September 30, 2019
DISTRICT REVENUES
The District derives its revenues from certain state, special and local revenue sources. The major categories of these revenue sources are briefly described below.
State Revenue Sources
Capital Outlay. State revenues represented $6,197,791 or approximately 11.9% of the District's total capital outlay revenues for the Fiscal Year 2018-19. Budgeted State capital outlay revenues available to the District for Fiscal Year 2019-20 are $2,762,715 or approximately 3.7% of the District's budgeted total capital outlay revenues.
One source of state educational funding contributions to the District's capital outlay requirements has in prior years been the Florida Public Education Capital Outlay ("PECO") Program. The method of allocation of funds to the district school boards is provided by state law based upon a statutory formula, components of which are the number of students in various districts and the proposed uses of the funds by the various districts. The Commissioner of Education administers the PECO program and allocates or reallocates funds as authorized by law. This funding has been cut substantially for traditional schools recently in favor of charter schools. PECO funds allocated by the Office of Education Facilities of the State Department of Education to the District were $1,340,895 ($821,738 for charter schools) for Fiscal Year 2017-18, $4,024,636 ($2,259,497 for charter schools) for Fiscal Year 2018-19 and are expected to be $2,536,884 (all for charter schools) for Fiscal Year 2019-20.
38 Appendix to page 107 106 The District's other state capital outlay funds are the motor vehicle license revenues, also known as capital outlay and debt service ("CO&DS") funds. CO&DS funds can be used to make lease-purchase payments, but only if the lease-purchase facility appears on the project priority list (the "PPL") approved by the State Board of Education. The District received $268,490 in CO&DS funds in Fiscal Year 2017-18, $893,111 in Fiscal Year 2018-19 and expects to receive $225,831 of such funds in Fiscal Year 2019-20.
In 1997, the Governor of the State of Florida signed into law a bill creating the "Public School Capital Outlay Program Act" (the "Act"). Among the several programs established by the Act is the "Classrooms First Program," which provides for the issuance by the State of revenue bonds, the proceeds of which will be distributed to the various school districts based upon a formula similar to the formula used in allocating PECO funds. The proceeds of such revenue bonds must be applied by a school district for new construction, remodeling, renovation or major repairs, with a priority on construction of new, permanent classroom facilities. If a school district certifies that it has no unmet need for permanent classroom facilities or if its unmet needs are less than its proposed allocation of the revenue bond proceeds, it may choose to receive an annual distribution of state lottery revenues in lieu of all or a portion of its allocation of state bond proceeds. Such annual distribution must be used to construct, renovate, remodel, repair or maintain educational facilities. Such funds, whether in the form of state revenue bond proceeds or annual distributions, may not be used to make lease purchase payments. In addition, in order to receive any of such state funds, a school district must fully bond all of its CO&DS funds allocation.
Under the Act, the District may be entitled to receive other State revenues pursuant to other programs if the District achieves certain standards relating to its capital outlay efforts. Some of such revenues may be used to make lease purchase payments. It is not possible at this time to determine or estimate the amount of such State revenues, if any, that the District may receive in the future.
Operating Revenue. The three primary sources of educational funding from the State are (i) basic Florida Educational Finance Program ("FEFP") receipts, (ii) FEFP categorical program receipts, and (iii) certain other specified revenue sources.
The major portion of State support is distributed under the provisions of the FEFP, which was enacted by the State Legislature in 1973. Basic FEFP funds are provided on a weighted full-time equivalent student ("FTE") basis using a formula that takes into account varying program cost factors and district cost differentials. The program cost factors which are used to determine the level of each school district's FEFP funding are determined by the State Legislature. The amount of FEFP funds disbursed by the State is adjusted four times during each year to reflect changes in FTE and in variables comprising the weighing formula. In addition, the level of State funding is adjusted during each year to compensate for increases or decreases in ad valorem tax revenue resulting from adjustments to the valuation of nonexempt property in the County. During recent State Fiscal Years, FEFP funds budgeted by the State to the District have been 'rolled back due to shortfalls in budgeted State revenues. See "RISK FACTORS - State Revenues" herein.
FEFP categorical programs are lump sum appropriations from the State intended to supplement local school district revenues to enhance the delivery of educational and support services by each district. Among the larger categorical programs are the programs for class size reduction, school bus transportation and instructional material. Allocations for these categorical appropriations are based on funding formula and discretionary State Department of Education grants. The majority of the funds available require actual appropriation by the School Board for the purposes for which they were provided. Excluding Class Size Reduction funds, total State categorical aid decreased from $6,148,848 in Fiscal Year 2017-18 to $5,903,827 for the 2018-19 Fiscal Year. FEFP categorical funds are expected to decrease to $5,427,248 in the 2019-20 Fiscal Year. Such decrease is due to a reduction in the number of students.
A portion of the revenues generated from the State lottery is distributed to each Florida school district as Discretionary Lottery revenue and Florida School Recognition Program revenue. The Florida School Recognition program recognizes schools that have received an "A" or improved at least one letter grade from the previous school year and, under Florida Statutes, is required to be used for nonrecurring bonuses for school faculty and staff, nonrecurring expenditures for educational equipment or materials, for temporary personnel to assist schools in maintaining or improving student performance, or any combination of these. The District received $1,427,818 in Florida School Recognition revenue for Fiscal Year 2017-18, $1,036,977 in Florida School Recognition revenue for Fiscal Year 2018-19 and is budgeted to receive $1,385,719 in Florida School Recognition revenue for Fiscal Year
39 Appendix to page 107 107 2019-20. The District received $49,195 in Discretionary Lottery revenues in Fiscal Year 2017-18 and received $90,144 in Fiscal Year 2018-19. The District is budgeted to receive $25,262 in Discretionary Lottery revenues in Fiscal Year 2019-20.
The District also receives State educational funding from a variety of miscellaneous State programs, the largest of which is Workforce Development. The District received approximately $2,785,503 for Workforce Development in Fiscal Year 2017-18, received approximately $2,789,444 for Fiscal Year 2018-19 and is budgeted to receive approximately $2,825,894 for Fiscal Year 2019-20.
The State appropriations are subject to adjustment during the year in the event revenues collected fall short of state projections.
The District also receives State educational funding from a variety of miscellaneous State programs. These sources include State mobile home license tax revenues and the Florida State Lottery.
Special Revenue Sources
The District also receives certain local, state and federal moneys, substantially all of which are restricted for specific programs. Programs funded with these special revenue sources in the past included school food service operations and programs financed through the Educational Handicapped Act, the Education Consolidation and Improvement Act and other federally financed programs.
Local Sources
Local revenue for school district support is derived almost entirely from real and tangible personal property taxes. School districts in the state are permitted to levy ad valorem property taxes separately for (i) operational purposes, (ii) capital outlays and maintenance of school facilities, and (iii) the payment of debt service. The amount of each such levy is subject to various constitutional and statutory limitations. There are no local non-property taxes levied specifically for schools. In addition, the District earns interest on cash invested and collects other miscellaneous revenues.
Operating Millage. For operational purposes, the Florida Legislature annually places requirements on each school district to levy a millage rate that is defined by law to be the "district required local effort" for those school districts desiring to participate in the allocation of State funds available to school districts. In 2018-19 the District's required local effort was 4.0840 mills. For Fiscal Year 2019-20, the District's required local effort is 3.8620 mills. The District did not levy a Prior Period Funding Adjustment Millage authorized by Section 1011.62(4)(e), Florida Statutes. Such Prior Period millage is levied when the preliminary taxable value for prior years is greater than the final taxable value for such years, thereby resulting in lower than expected revenues from the required local effect millage. School boards are also authorized to levy an additional "discretionary millage" for operations, not to exceed an amount established annually by the Legislature and up to 1.5 mills for capital outlay and maintenance of school facilities. The District may, however, levy up to 0.25 mills for capital outlay and maintenance of school facilities in lieu of operating discretionary millage. The discretionary millage for all school districts, including the District, was 0.748 for fiscal year 2018-19. For Fiscal Year 2019-20 the discretionary millage is again 0.748 mills.
Ad valorem tax receipts for operating purposes increased from $81,727,108 in Fiscal Year 2017-18 to $82,881,757 in Fiscal Year 2018-19. The District has budgeted approximately $76,040,319 of ad valorem tax receipts for operating purposes for Fiscal Year 2019-20.
Local Option Millage Levy. The School Board intends to make Lease Payments on the Series 1999 Lease Agreement and Series 2020A Lease Agreement, as well as any other Leases under the Master Lease, from moneys derived from a levy of a non-voted, real and tangible personal property tax millage, known as the "Local Option Millage Levy," for capital outlay and maintenance purposes. In its 2008 session, the Florida Legislature reduced the maximum amount of the levy from the 2.0 mills then in effect to 1.75 mills and in its 2009 session, the Florida Legislature further reduced the maximum levy from 1.75 mills to 1.50 mills (see "AD VALOREM TAXATION – Millage Rates" herein for information on such reduction and exceptions thereto). This levy may be used for, among other things, new construction and remodeling; site acquisition and site improvement; auxiliary or ancillary facilities;
40 Appendix to page 107 108 maintenance, renovation and repair of existing school plants; school bus purchases; the purchase, lease-purchase or lease of new and replacement equipment; and amounts payable pursuant to lease purchase agreements for educational facilities and sites. Florida law restricts the use of the Local Option Millage Levy for payments on lease purchase agreements for educational facilities and sites to three-fourths (75%) of the millage levied; provided, however, such limitation is not applicable for lease-purchase agreements entered into prior to June 30, 2009. Since revenues from the levy of the Local Option Millage Levy may be used for, but are not pledged to, the payment of Basic Rent Payments under the Series 1999 Lease, the failure of the District to levy all or a portion of the Local Option Millage Levy might have an adverse effect on available revenues from which the School Board may appropriate funds to make Basic Rent Payments. In the event that revenues generated from the Local Option Millage Levy are insufficient to make payments under a lease-purchase agreement entered into prior to June 30, 2008, an amount equal to the revenue generated from 0.50 mills of the operating levy may be used to make such Lease Payments. See "AD VALOREM TAX PROCEDURES – Millage Rates" herein.
Local Option Millage revenues increased from $20,868,026 in Fiscal Year 2017-18 to $21,174,630 in Fiscal Year 2018-19. The District has budgeted approximately $22,063,239 of Local Option Millage revenues for Fiscal Year 2019-20.
A school board may not use revenues from the Local Option Millage Levy to pay for any portion of the cost of any new construction of educational plant space with a total cost per student station, including change orders, in excess of the amounts set forth in Section 1013.64(6)(b)1., Florida Statutes, as adjusted (the "Maximum Cost Per Student Station"). For purposes of calculating the Maximum Cost Per Student Station, certain costs such as legal and administrative costs, site improvement costs (incidental to construction), costs related to hurricane sheltering/hardening and school security/hardening capital improvements, among other costs, are not included. However, if a contract for architectural and design services or for construction management services has been executed before July 1, 2017, a district school board may use funds from any sources for the new construction of educational plant space and such educational plant space is exempt from the total cost per student station requirements. As of July 1, 2019, if the new construction of educational plant space is subject to a lease-purchase agreement entered into pursuant to Section 1011.71(2)(e), Florida Statutes (such as the Series 2020A Lease Agreement), a district school board (i) may use certain local funding sources (including educational impact fees, and voter approved ad valorem taxes, in each case if legally available for such purpose) to pay for the new construction of educational plant space, and (ii) may, but is not required to, use the Local Option Millage Levy revenues and certain state funding sources to pay for the portion of the cost for new construction of educational plant space which does not exceed the Maximum Cost Per Student Station requirements or to costs which are not included in Maximum Cost Per Student Station calculation. The School Board entered into a contract for architectural and design services with respect to the Series 2020A Project on June 27, 2017. As such, the Series 2020A Project is exempt from the total cost per student station requirements of Section 1013.64(6)(b), Florida Statutes.
Local Option Sales Surtax. In November 2010, the voters of Bay County approved the imposition of a one- half cent discretionary sales surtax within the County for 10 years to fund specified school capital outlay projects. The sales tax can be used for new construction, renovation, remodeling of existing schools and the related cost of design, construction and furnishing these areas. In addition, the sales tax provides for technology implementation, including hardware and software, for various sites within the District. In August 2018, the voters of Bay County approved continuing the imposition of the one-half cent discretionary sales surtax for an additional 10 years, beginning January 1, 2021, to fund specified school capital outlay projects. The tax will provide for school security construction initiatives; the acquisition of equipment and technology creating a 21st Century learning environment; renovation of older schools; construction of additional classrooms to support existing schools; construction of new schools as necessary; and retirement of related debt. Local Option Sales Surtax revenues were $21,452,247 in Fiscal Year 2017- 18 and $23,248,989 in Fiscal Year 2018-19. The District has budgeted approximately $23,600,000 of Local Option Sales Surtax revenues for Fiscal Year 2019-20.
Debt Service Millage. In addition to the School Board levies, qualified electors, by referendum, may vote an additional millage levy for operational and capital outlay purposes, as prescribed by the Florida Constitution and applicable statutes. Before a school district may issue bonds payable from ad valorem taxes, qualified electors within the district must approve a millage levy to pay the principal of and interest on such bonds. The School Board has not issued any such general obligation bonds and therefore is not levying any debt service millage for Fiscal Year 2019- 2020.
41 Appendix to page 107 109
Budgeted revenues from ad valorem taxes are based on applying millage levies to 96% of the nonexempt assessed valuation of real and personal property. Historically, the local taxes have been received at less than 100% of the levied taxes due to the discounts for early payment. The Tax Collector usually collects approximately 96% of the levied taxes.
Historical millage rates (tax per $1,000 of assessed value) and the millage rates approved for the last five Fiscal Years are as follows:
School District of Bay County, Florida Historical Tax Rates (Mills)
2015-16 2016-17 2017-18 2018-19 2019-20 Required Local Effort 4.959 4.527 4.303 4.804 3.862 Basic Discretionary 0.748 0.748 0.748 0.748 0.748 Supplemental Discretionary Critical Operating Needs Levy Total Operating Millage 5.707 5.275 5.051 4.832 4.61 Capital Outlay 1.2 1.2 1.29 1.29 1.3376 Total Millage 6.907 6.475 6.341 6.122 5.9476
42 Appendix to page 107 110 ANTICIPATED LOCAL OPTION MILLAGE LEVY REQUIRED TO COVER DEBT SERVICE ON THE CERTIFICATES
The table below sets forth the estimated millage levy that would provide 1.00x coverage of the maximum annual debt service on the 2020A Certificates, the 2020B Certificates, the 2019 Certificates, the 2015 Certificates, the 2013 Certificates and the 2010A Certificates, assuming a 96% collection of the taxes levied. Fiscal Year 2019-20 Net Taxable Assessed Valuation(1) $17,181,923,189
Local Option Millage Levy 1.3376 mills
Assumed Tax Collection Rate 96.0%
Total Revenue Generated by 1.173 mill Levy at 96% Collection $22,063,239
FY 2019-20 Local Option Millage Levy Required to Satisfy Maximum Annual Basic Lease Payments Represented by Certain of the Prior Certificates
Maximum Annual Basic Lease Payments Represented by the Prior Certificates (Fiscal Year 2021-2022)(2)(3) $7,569,902
Minimum Local Option Millage Levy Needed to Satisfy Maximum Annual Lease Payments Represented by the Prior Certificates(2)(3)(4) 0.46 mills
Sharing of the Local Option Millage Levy with Eligible District Charter Schools
(5) Maximum Local Option Millage Levy Revenue Shared with Eligible District Charter Schools $0.00
Maximum Local Option Millage Levy Shared with Eligible District Charter Schools 0.00 mills
Minimum Local Option Millage Levy Revenue Remaining after Charter School Payments $22,063,239 Local Option Millage Levy Available After Basic Lease Payments and Charter School Payments
Local Option Millage Levy Revenue Required to Satisfy Maximum Annual Basic Lease Payments and Charter School Payments(2)(3)(4) $19,361,241
Local Option Millage Levy Required to Satisfy Maximum Annual Basic Lease Payments and Charter School Payments(2)(3)(4) 0.46 mills
Anticipated Minimum Local Option Millage Levy Revenue Remaining After Basic Lease Payments and Charter School Payments(2)(3)(4) $14,493,337 ______(1) [Final figure from FY 2019-20 budget]. See "AD VALOREM TAXATION – Property Assessment Procedure" herein. (2) As described above, with respect to the Series 2020A Certificates and the Series 2020B Certificates, the Local Option Millage Levy is only available for payment of the Basic Rent Payments allocable to the eligible portions of the Series 2020B Certificates. The School Board expects to use Discretionary Sales Surtax revenues to pay all of the Basic Rent Payments represented by the Series 2019 Certificates. Accordingly, the table above does not include any portion of the Basic Rent Payments represented by the Series 2019 Certificates. In the event the School Board were to use Local Option Millage Levy revenues to pay the eligible portion of the Series 2019 Certificates, the Maximum Annual Basic Lease Payments represented by the prior referenced series of certificates and the eligible portions of the Series 2019 Certificates are estimated to equal approximately $10,972,525, resulting in a minimum Local Option Millage Levy of 0.73 mills required to satisfy such Maximum Annual Basic Lease Payments. (3) Assumes the Outstanding Certificates have the financial arrangements, assumptions, and accounting practices described in APPENDIX B, Note 8. (4) Under current law, the 75% limitation on the use of the Local Option Millage Levy revenues for the payment of lease-purchase agreements is waived for lease-purchase agreements originally entered into prior to June 30, 2009. Accordingly, only the Lease Payments with respect to Leases originally entered into after June 30, 2009 are subject to the 75% limitation. The Series 2019 Lease is subject to the 75% limitation. The Series 2019 Lease is also subject to such limitation, although no Basic Lease Payments under the Series 2019 Lease are included in the table above. Since revenues from the levy of the Local Option Millage Levy may be used for, but are not pledged to, the payment of Basic Rent Payments under the Series 1999 Lease, the failure of the District to levy all or a portion of the Local Option Millage Levy might have an adverse effect on available revenues from which the School Board may appropriate funds to make Basic Rent Payments. In the event that revenues generated from the Local Option Millage Levy are insufficient to make payments under a lease-purchase agreement entered into prior to June 30, 2008, an amount equal to the revenue generated from 0.50 mills of the operating levy may be used to make such Lease Payments. (5) Pursuant to CS/HB 7055, the State appropriated the full amount of the charter school capital outlay funds per unweighted FTE student for the Fiscal Year 2019-20. In future years, if the State does not appropriate an amount at least equal to the average charter school capital outlay per unweighted FTE student for Fiscal Year 2019-20, multiplied by the estimated number of charter school students for the applicable fiscal year and adjusted for inflation from the previous year, charter school capital outlay funds would also consist of the Local Option Millage Levy revenue. If the State had not appropriated any funds for such purpose for Fiscal Year 2019-20, the District would have been required to pay an estimated $______or ______mills of the Local Option Millage Levy to charter schools. At this time, the amount of the Local Option Millage Levy revenues to be shared with eligible charter schools in future years cannot be determined because the amount of State funds appropriated for the charter school capital outlay and charter school enrollment are unknown. See "AVAILABLE REVENUES FOR CAPITAL OUTLAY PROJECTS – Local Sources" herein.
AD VALOREM TAXATION
43 Appendix to page 107 111
The following information is provided in view of the fact that a large portion of the School Board's revenues are derived from ad valorem taxation.
Local ad valorem property taxes are levied by the application of the millage rate to the assessed valuation of non-exempt property within the County. Under the laws of the State of Florida, the assessment of all properties and the collection of all county, municipal and school district property taxes are consolidated in the office of the County Property Appraiser and County Tax Collector.
Property Assessment Procedure
The laws of the State provide for a uniform procedure to be followed by all counties, municipalities, school districts and special districts for the levy and collection of ad valorem taxes on real and personal property. Pursuant to such laws, the County's property appraiser (the "Property Appraiser") prepares an annual assessment roll for all taxing units within the County and levies such millage, subject to constitutional limitations, as determined by each taxing unit, and the Tax Collector collects the ad valorem property taxes for all taxing units within the County. Since the ad valorem property taxes of all taxing units within a County are billed together by the Tax Collector, each property owner is required to pay all such taxes without preference.
Real property used for the following purposes is generally exempt from ad valorem taxation: religious, educational, charitable, scientific, literary, and governmental. In addition, there are special exemptions for widows, hospitals, homesteads, working waterfronts, deployed military personnel, low income seniors and homes for the aged, disabled veterans and first responders. Agricultural land, non-commercial recreational land, inventory, and livestock are assessed at less than 100% of fair market value.
Real and personal property valuations are determined each year as of January 1 by the Property Appraiser's office. The Property Appraiser is required to physically inspect the real property every three (3) years. There is a limitation of the lesser of 3% or the increase in the consumer price index during the relevant year on the annual increase in assessed valuation of Homestead Property (defined below), except in the event of a sale of such property during such year, and except as to improvements to such property during that year. State law requires, with certain exceptions, that property be assessed at fair market value; provided, however, that $25,000 of the assessed valuation of a homestead is exempt from all taxation for a residence occupied by the owner on a permanent basis where such owner has filed for and received a homestead exemption ("Homestead Property" or "Homestead") and, with respect to Homestead Property, an additional exemption of up to $25,000 on the assessed valuation greater than $50,000 is exempt from taxation for all property tax levies other than school district levies. See "Property Tax Reform" below.
The Property Appraiser's office prepares the assessment roll and gives notice by mail to each taxpayer of the proposed property taxes and the assessed property value for the current year, and the dates, times and places at which budget hearings are scheduled to be held. The property owner then has the right to file an appeal with the value adjustment board, which considers petitions relating to assessments and exemptions. Taxpayers appealing the assessed value or assigned classification of their property must make a required partial payment of taxes (generally equal to 75% of the ad valorem taxes due, less the applicable statutory discount, if any) with respect to properties that will have a petition pending on or after the delinquency date (normally April 1). A taxpayer's failure to make the required partial payment before the delinquency date (normally April 1) will result in the denial of the taxpayer's petition. The value adjustment board may make adjustments to the assessment roll to reflect any reduction in the assessed value of property upon the completion of the appeals. The value adjustment board certifies the assessment roll upon completion of the hearing of appeals to it. Millage rates are then computed by the various taxing authorities and certified to the Property Appraiser, who applies the millage rates to the assessment roll. This procedure creates the tax roll, which is then certified and turned over to the Tax Collector.
Property Tax Reform
In 2007 the Florida Legislature enacted Chapter 2007-321, Laws of Florida (2007) (the "Rollback Law"). One component of the adopted legislation requires counties, cities and special districts to roll back their millage rates for the 2007-08 Fiscal Year to a level that, with certain adjustments and exceptions, will generate the same level of ad
44 Appendix to page 107 112 valorem tax revenue as in Fiscal Year 2006-07; 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 will be determined after first reducing 2006-07 ad valorem tax revenues by zero to nine percent (0% to 9%). In addition, the legislation limits how much the aggregate amount of ad valorem tax revenues may increase in future Fiscal Years. School districts are not required to comply with the particular provisions of the legislation relating to limitations on increases in future years.
Effective January 1, 2008, additional changes to Florida's property tax laws created a new formula for calculating assessed value of Homestead Property. "Assessed value" is the official value upon which real properties may be taxed in Florida. Under the new formula, if an owner of a Homestead purchases a new Homestead Property for greater value, the assessed value of the new Homestead would equal the purchase price of the new Homestead minus the difference between the purchase price of the previous Homestead and the assessed value of the previous Homestead, or $500,000, whichever is less. In addition, for Florida Homestead owners already receiving a property tax exemption of $25,000 on the assessed value of their homes, the new law creates an additional $25,000 exemption on the assessed value of Homestead Property greater than $50,000 for all property tax levies except school taxes. Also effective January 1, 2008, the first $25,000 of tangible personal property is exempt from taxation.
Additionally, effective January 1, 2009, increases in annual assessments on certain non-Homestead Property were capped at 10% annually (for a 10-year period) for all property tax levies other than school district levies. See also, "Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes - Extending the Limitation on Assessed Values of Non-Homestead Real Property" below for information concerning a constitutional amendment to extend the 10% cap on increases of non-homesteaded properties, other than school district levies.
In the November 4, 2008 general election, the voters of the State approved amendments to the State Constitution providing the Florida Legislature with authority to enact exemptions or special assessment protections for certain types of property subject to ad valorem taxation including exemptions for conservation lands and residential wind damage resistance and renewable energy source improvements, and restrictions on the assessment of working waterfront properties. Thereafter, legislation was enacted which creates an exemption for land used exclusively for conservation purposes. Such exemption applies to property tax assessments made on or after January 1, 2011 (Fiscal Year 2011-12 for school districts).
Millage Rates
The Florida Constitution limits the non-voted millage rate that school boards may levy on an annual basis for operational funds to 10 mills ($10 per $1,000 of taxable real and personal property value). The millage limitation does not apply to taxes approved at referendums by qualified electors in the county for general obligation bonds and certain other short-term, voter approved levies. Section 1011.71, Florida Statutes, as amended, further limits the millage levy for operational purposes to an amount established each year by the State appropriations act and finally certified by the Commissioner of the State of Florida Department of Education. Within this operational limit, each school district desiring to participate in the State's appropriation of Florida Education Finance Program ("FEFP") funds for current operations must levy the millage certified by the Commissioner of the State of Florida Department of Education, the "required local effort," which is set each year by the State Legislature. In addition to the "required local effort," school districts are entitled to a non-voted current operating discretionary millage. See the chart under "DISTRICT REVENUES - Local Sources" for a schedule of the millage actually assessed by the School Board over the past five years.
In addition to the millage levies for operating purposes, pursuant to Section 1011.71, Florida Statutes, school boards may set an additional non-voted millage known as the "Local Option Millage Levy" for capital outlay and maintenance purposes. In 2008, the Florida Legislature amended Section 1011.71, Florida Statutes, to (i) reduce the maximum Local Option Millage Levy from 2.00 mills to 1.75 mills and (ii) provide that if the revenues generated from the reduced Local Option Millage Levy are insufficient to make payments under a lease-purchase agreement entered into prior to June 30, 2008, an amount equal to the revenue generated from 0.50 mills of the operating millage levy may be used to make such lease payments. In 2009, the Florida Legislature further amended Section 1011.71, Florida Statutes, to (i) reduce the maximum Local Option Millage Levy from 1.75 mills to 1.50 mills commencing in Fiscal Year 2009-10 for school districts and (ii) if the revenue from the 1.50 mills is insufficient to make payments due under a lease purchase agreement entered into prior to June 30, 2009, or to meet other critical school district fixed
45 Appendix to page 107 113 capital outlay needs, authorize a school board to levy up to an additional 0.25 mills of Local Option Millage Levy in addition to the 1.50 mills, in lieu of levying an equivalent amount of the discretionary mills for operations. In 2012, the Florida Legislature further amended Section 1011.71, Florida Statutes to waive the 75% limitation on the use of Local Option Millage Levy revenues for lease-purchase agreements originally entered into prior to June 30, 2009. See also, "Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes - Distribution of Local Option Millage Funds to Charter Schools" for information regarding recent legislation requiring school districts to share Local Option Millage Revenues with charter schools in such school districts.
Each respective millage rate, except as limited by law, is set on the basis of estimates of revenue needs and the total taxable property values within the taxing authority's respective jurisdiction. Revenues derived from ad valorem property taxes are budgeted, as required by Florida law, on the application of millage levies to 96 percent of the non-exempt assessed valuation of property in the County. Ad valorem taxes are not levied in excess of actual budget requirements.
Collection of Ad Valorem Taxes
Ad Valorem taxes may be paid upon receipt of such notice with discounts at the rate of four percent (4%) if paid in the month of November, three percent (3%) if paid in the month of December, two percent (2%) if paid in the month of January and one percent (1%) if paid in the month of February. Taxes paid during the month of March are without discount. All unpaid taxes on real and tangible personal property become delinquent on April 1 of the year following the year in which taxes were levied or within sixty (60) days after the mailing of the original tax notice of the final assessment rate, whichever is later. All taxes collected are remitted by the County Tax Collector to the governmental unit levying the taxes.
Delinquent real property taxes bear interest at the rate of one and one-half percent (1-1/2%) per month from April 1, or within sixty (60) days after the mailing of the original tax notice of the final assessment rate, whichever is later, until a tax certificate is sold at auction, from which time the interest rate shall be as bid by the buyer of the tax certificate. Delinquent tangible personal property taxes also bear interest at the rate of one and one-half percent (1- 1/2%) per month from April 1 until paid. Delinquent personal property taxes must be advertised within forty-five (45) days after delinquency, and after May 1 the property is subject to warrant, levy, seizure and sale.
Florida law provides that real property tax liens and personal property tax liens are superior to all other liens, except prior United States Internal Revenue Service liens. The County Tax Collector advertises once each week for four weeks and sells tax certificates to the lowest bidder, based on the interest rate bid, commencing on or about June 1 of each year on substantially all real property with taxes due. Delinquent tax certificates not sold at auction revert to Bay County.
If the owner of real property subject to a tax certificate does not redeem the certificate within two years, the holder of the certificate is entitled to apply for a tax deed of sale. The highest bidder at such sale receives a tax deed for the property subject to the tax certificate. To redeem a tax certificate, the owner of the property must pay all delinquent taxes, the interest that accrued prior to the date of the sale of the tax certificate, charges incurred in connection with the sale of the tax certificate, omitted taxes, if any, and interest at the rate bid on the tax certificate from the date of the sale of the tax certificate to the date of redemption. The interest rate on a tax certificate is a minimum of five percent, unless the interest bid on the certificate is a lower rate.
Assessed Valuation
The following table shows the assessed value and taxable value of property in the District for the past five years and the current year.
School District of Bay County, Florida Assessed and Taxable Property Values Tax Years 2015-2019
Ration of Taxable to Estimated Estimated
46 Appendix to page 107 114 Tax Year Actual Value Total Taxable Value Actual Value (%) 2019 $21,901,531,026 $17,181,923,189 78.50% 2018 22,559,006,421 17,579,895,706 77.93 2017 21,614,021,104 16,701,224,269 77.27 2016 21,100,218,319 16,144,181,171 76.51 2015 20,764,762,875 15,673,648,196 75.48
Source: Bay County, Florida Property Appraiser.
[The Legislative Office of Economic and Demographic Research of the Florida Legislature projected declines in the assessed value of property subject to taxation by the District beginning in _____ and continuing through ______. These declines in assessed valuation are likely to have a negative impact on revenues of the District from ad valorem taxes, including Local Option Millage Levy revenues. However, the District estimates that, even with the projected declines in assessed property valuations, it will be able to collect Local Option Millage Levy revenues sufficient to make the Lease Payments related to the 2020A Certificates.]
Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes
General. During recent years, various other legislative proposals and constitutional amendments relating to ad valorem taxation and other District revenues 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. Other proposals have sought to restrict the ability of local governments to use certain revenues for payment of debt service or provide for additional procedures and notices in order to issue tax-supported debt. There can be no assurance that similar or additional legislative or other proposals will not be introduced in the current legislative session or enacted in the future that would, or might apply to, or have a material adverse effect upon, the District or its finances.
Proposed Constitutional Amendments Relating to Ad Valorem Taxation. During the 2020 Florida legislative session, a constitutional amendment was proposed by the Legislature which would extend the discount on ad valorem taxes provided to certain honorably discharged veterans to their spouses (the "Surviving Spouse Exemption"). Specifically, the Surviving Spouse Exemption would allow the same ad valorem tax discount on homestead property for combat-disabled veterans age 65 or older to transfer to the surviving spouse of a veteran receiving the discount if the surviving spouse holds the legal or beneficial title to the homestead, permanently resides thereon, and does not remarry. The Surviving Spouse Exemption will be voted on at the November 2020 general election and must be approved by 60% of the electorate voting in such election. If approved, such amendment would take effect on January 1, 2021.
During the 2020 Florida legislative session, a constitutional amendment was proposed by the legislature which would extend the period for a homestead property owner to transfer a prior Save Our Homes Benefit to a new homestead from two years to three years (the "Portability Amendment"). If approved by the voters, a homeowner who establishes a new homestead as of January 1 would be able to have the new homestead assessed at less than just value if the homeowner received a prior homestead exemption as of January 1 of any of the immediately preceding three years. The Portability Amendment will be voted on at the November 2020 general election and must be approved by 60% of the electorate voting in such election. If approved, such amendment would take effect on January 1, 2021.
Future Amendments Relating to Ad Valorem Taxation. Historically, various legislative proposals and constitutional amendments relating to ad valorem taxation have been introduced in each session of the Florida Legislature. Many of these proposals have provided for new or increased exemptions to ad valorem taxation and limited increases in assessed valuation of certain types of property or otherwise restricted the ability of local governments in the State to levy ad valorem taxes at current levels. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would have a material adverse effect upon the collection of ad valorem taxes by the District, the District's finances in general or the District's ad valorem taxing power.
Distribution of Local Option Millage Funds to Charter Schools. During the Florida Legislature's 2017 Regular Session, the Florida Legislature passed HB 7069 ("HB 7069") which, among other things, requires school
47 Appendix to page 107 115 districts to distribute local capital outlay funds from the Local Option Millage Levy to charter schools. HB 7069 established the calculation methodology to determine the amount of local capital outlay funds from the Local Option Millage Levy a school district must distribute to each eligible charter school. Such calculation provides that the amount of local capital outlay funds from the Local Option Millage Levy a school district must distribute to each eligible charter school will be reduced by the school district's annual debt service for obligations incurred as of March 1, 2017 that are paid with Local Option Millage Levy revenues, and requires the first payment to charter schools as of February 1 of each year.
The provisions of HB 7069 have been subject to lawsuits filed by certain affected school boards, including the School Board. The provisions of HB 7069 were upheld at the trial court in one of the lawsuits filed by the School Board and other plaintiff school boards (collectively, the "Plaintiff School Boards"). That case was appealed to the First District Court of Appeals by the by the Plaintiff School Boards. On August 29, 2019, the First District Court of Appeals upheld the legality of HB 7069 in the case brought by the Plaintiff School Boards. On September 27, 2019, certain of the Plaintiff School Boards filed a notice to invoke the discretionary jurisdiction of the Florida Supreme Court in order to appeal such decision. On April 7, 2020, the Florida Supreme Court declined to accept jurisdiction in the case. Another case brought by many of the same Plaintiff School Boards was dismissed with prejudice pursuant to a joint stipulation of the parties. The third lawsuit challenging HB 7069, brought by The School Board of Palm Beach County, Florida, has been stayed by the trial court pending the appeal of the Plaintiff School Boards case. The final outcome of the remaining lawsuit, brought by The School Board of Palm Beach County, Florida, cannot be determined at this time.
On March 11, 2018, then Governor Rick Scott approved Committee Substitute for House Bill 7055 ("CS/HB 7055"). CS/HB 7055, among other things, revises certain of the requirements of HB 7069 relating to the required sharing of the Local Option Millage Levy revenues with charter schools. CS/HB 7055, among other things, specifies that charter school capital outlay funds shall consist of State funds when such funds are appropriated. However, if in any given year, the amount of State funds is not equal to, or is less than, the average charter school capital outlay funds per unweighted FTE student for the Fiscal Year 2018-19, multiplied by the estimated number of charter school students for the applicable fiscal year and adjusted for inflation from the previous year, charter school capital outlay funds shall also consist of the Local Option Millage Levy revenue. CS/HB 7055 also seeks to clarify that the debt service obligation that can be reduced from the distribution to charter schools is the debt service obligation incurred as of March 1, 2017, which has not been subsequently retired, and also requires each school district to annually certify to the State of Florida Department of Education the amount of the debt service obligation that can be reduced from the distribution to charter schools.
For Fiscal Year 2019-20, sufficient State charter school capital outlay funds per FTE student were appropriated so that the District is not required to share any Local Option Millage Levy revenues with charter schools in the District in Fiscal Year 2019-20. The State 2020-21 education budget also provides for sufficient State charter capital outlay funds per FTE student such that the District will not be required to share any Local Option Millage Levy revenues with charter schools in the District in Fiscal Year 2020-21. However, no assurance can be given that the State 2020-21 education budget will not be revised to reduce the State charter school capital outlay funds per FTE student due to an expected decline in State revenues as a result of the coronavirus pandemic, or that the State will continue to allocate sufficient State funds in future years. See "RISK FACTORS - State Revenues" and " - Coronavirus (COVID-19)" herein. Even if these provisions of HB 7069 are ultimately upheld, while they will likely result in a reduction of the revenues available to the School Board from the Local Option Millage Levy to make Lease Payments, the School Board, at this time, does not expect them to adversely affect its ability to make Basic Rent Payments under the Master Lease in future years.
Other Legislative Actions Affecting District Finances Constitutional Amendments Relating to Class Size Reduction. Article IX of the State Constitution was amended in 2002 by Amendment 9, which requires that the State Legislature provide funding for sufficient classrooms so that class sizes can be reduced to certain constitutional class size maximums by the beginning of the 2010 school year. Amendment 9, and Sections 1003.03, Florida Statutes, and 1013.735, Florida Statutes, relating to the implementation of Amendment 9, collectively are referred to herein as the "Class Size Legislation."
48 Appendix to page 107 116 The Class Size Legislation establishes constitutional class size maximums limiting students per class to no more than 18 for pre-kindergarten through 3rd grade, 22 for grades 4 through 8 and 25 for grades 9 through 12. Compliance is determined on a period-by-period basis. In the event a school district is not in compliance with such requirements (based on October student enrollment), the legislation provides that the State shall reduce the class size funding, which can be adjusted for good cause. For those school districts that are in compliance with the constitutional amendment, a reallocation bonus of up to 5% of the base student allocation shall be distributed. School districts not in compliance are required to submit to the Commissioner of Education a corrective action plan that describes specific actions the district will take in order to fully comply with the requirements by October of the following year. If the district submits the certified plan by the required deadline, 75% of the funds remaining after the reallocation to school districts will be reallocated based upon each school district's proportion of the total reduction.
The Class Size Legislation also created the "Operating Categorical Fund for Class Size Reduction," the "Classroom for Kids Program," the "District Effort Recognition Grant Program" and the "Class Size Reduction Lottery Revenue Bond Program" to provide funding programs for capital outlays and operating expenditures necessary to satisfy the mandated class size reductions.
The Class Size Legislation requires each school board to consider implementing various policies and methods to meet these constitutional class sizes, including encouraging dual enrollment courses, encouraging the Florida Virtual School, maximizing instructional staff, reducing construction costs, using joint-use facilities, implementing alternative class scheduling, redrawing attendance zones, implementing evening and multiple sessions and implementing year-round and non-traditional calendars.
Through Fiscal Year 2009-10, the District complied with the requirements of the Class Size Legislation which was based on the average class size at all schools. Beginning in Fiscal Year 2010-11, the requirements were based on the number of students in each individual classroom and subsequently, schools that provided choice (e.g., charter, magnet, career and technical, etc.) continued to be required to meet average class size. Excluding charter schools, the District was nearly 100% compliant with class size requirements for Fiscal Years 2017-18, 2018-19 and 2019-20.
Legislative Changes Relating to School Choice. During the State Legislature's 2016 Regular Session, the Florida Legislature enacted House Bill 7029 ("HB 7029"). Among other things, a parent whose child is not subject to a current expulsion or suspension order may seek enrollment in and transport his or her child to any public school in the State, including a charter school, which has not reached capacity. The school district or charter school shall accept and report the student for purposes of funding through the FEFP. The school district or charter school may provide student transportation at their discretion. HB 7029 requires the capacity determinations of each school district and charter school to be current and identified on their respective school websites. Each school must provide preferential treatment in its controlled open enrollment process to: (1) dependent children of active duty military personnel who moved as a result of military orders, (2) children relocated due to foster care placement in a different school zone, (3) children relocated due to a court ordered change in custody as a result of separation or divorce, or the serious illness or death of a parent, and (4) students residing in the school district. Students residing in the school district may not be displaced by a student from another school district. A student who transfers may remain at the school until the student completes the highest grade level offered. This amendment took effect in the 2017-2018 school year. The school choice provisions of HB 7029 have not had a significant impact on the District's finances.
HB 7029 also revised the method for enforcing compliance with the Class Size Legislation to clarify that for purposes of enforcing compliance, the calculation is based upon the statutory formula used to determine the reduction in class size categorical funding for noncompliance. At present, such Class Size Legislation compliance enforcement provisions of HB 7029 have not had a significant impact on the District's finances.
Construction Cost Maximums. Section 1013.64(6)(b), Florida Statutes, prevents a school district from using funds from the following sources: PECO, CO&DS, Classrooms First Program, the Local Outlay Millage Levy, Classrooms for Kids Program, District Effort Recognition Program, or High Growth District Capital Outlay Assistance Grant Program, for any new construction of educational plant space with a total cost per student station in excess of the amounts set forth in Section 1013.64(6)(b)1, Florida Statutes, as such amounts are adjusted annually to reflect changes in the Consumer Price Index. See DISTRICT REVENUES – Local Sources.
49 Appendix to page 107 117 Schools of Hope. HB 7069, among other things, also authorized the establishment of charter schools, to be known as "schools of hope," and designation of "hope operators" to provide students in areas of persistently low- performing schools with a high-quality education option designed to close the opportunity gap and increase student achievement. HB 7069 (i) establishes criteria for schools of hope and hope operators; (ii) defines persistently low- performing schools as those subject to differentiated accountability (that is, the escalating interventions and supports that must be provided to schools receiving school grades of "D" or "F") for more than three years or closed as a result of school improvement requirements; (iii) authorizes the FDOE to identify and designate hope operators who meet specified criteria; (iv) removes barriers to hope operators by creating a new notice and agreement process that is exempt from the current charter school law and State procurement laws; (v) provides a school of hope with certain exemptions from Chapters 1000-1013, Florida Statutes; (vi) provides provisions for facilities and funding for schools of hope; (vii) establishes a grant program to cover specified operational expenses; (viii) establishes the Schools of Hope Revolving Loan Program to help schools of hope cover school building construction and startup costs and (ix) allows "schools of hope" to be designated as a local education agency, if requested, allowing the school to apply for and receive State and Federal funds independently. Senate Bill 7070, which was signed into law in 2019, further expanded the definition of a persistently low-performing school. Section 1002.333(1)(c), Florida Statutes now defines a persistently low-performing school as one receiving three school grades lower than a “C” in at least three of the previous five years so long as the school has not earned a grade of “B” or higher in the most recent two school years. The definition no longer requires that the low school grades occur in consecutive years. At this time, the School Board cannot determine what impact HB 7069 (2017) and SB 7070 (2019) will have on any District schools subject to differentiated accountability or on the School Board's finances. No Hope operators have sought to start a School of Hope in Bay County, but there are schools in Bay County that present a Hope operator the opportunity to seek a charter.
Public Safety Mandate. In 2018, the Florida Legislature passed Senate Bill 7026 (“SB 7026") which, among other things, includes provisions designed to: enhance school safety policies, procedures, and personnel at the State and local level; improve and expand mental health services; and revise laws and empower law enforcement and the courts to limit access to firearms by young adults or by individuals exhibiting a risk of harming themselves or others. Specifically, SB 7026 requires each school board and superintendent to partner with law enforcement agencies to establish or assign one or more safe -school officers at each school facility within the district by implementing any combination of the following options: (a) establish school resource officer programs through cooperative agreements with law enforcement agencies; (b) commission one or more school safety officers for the protection and safety of school personnel, property, and students within the school district; (c) at a school district's discretion, and if established by the sheriff’s office, participate in the Guardian Program, which allows certain school employees to carry a firearm on school grounds if such employee volunteers and completes the statutorily required training. The School Board and the Bay County Sherriff’s Office initiated the guardian program in Bay County schools in the 2018-2019 school year following trainings that occurred in the summer of 2018. The School Board has entered into contracts with the Bay County Sherriff’s Office, the City of Lynn Haven, the City of Parker, the City of Panama City, the City of Panama City Beach and the City of Springfield and their respective law enforcement agencies to provide school resource officers and law enforcement officers at each District-operated public school. Additionally, the School Board operates its own police department and employs a number of school safety officers through that law enforcement agency.
During the 2019 legislative session, Senate Bill 7030 (“SB 7030”) passed and was subsequently signed into law. SB 7030 added a fourth safe-school officer option for compliance with the requirement that at least one officer is assigned to each school facility. School districts may now contract with security agencies who employ security guards who meet the criteria provided in Section 1006.12(4), Florida Statutes. Additionally, SB 7030 emphasized each school district’s responsibility to facilitate charter schools’ access to each of the four options available. The law further provided that a school district that denies a charter school access to any of the four safe-school officer options will be responsible for assigning an officer to the charter school at the district’s expense, less the safe school allocation funds provided to the charter school pursuant to Section 1011.62(15), Florida Statutes. To date, the School Board has not chosen to contract with any security agencies and has not been required to assign an officer to a charter school.
SB 7030 further adjusted the manner in which the safe schools allocation, which provides funding to school districts to aid in their compliance with Sections 1006.07-1006.12, is distributed throughout the State. School districts now receive funding from this source.
50 Appendix to page 107 118 Previously, after the minimum distribution to each district, two-thirds of the remainder was allocated to districts based on the most recent official Florida Crime Index provided by the Department of Law Enforcement and one-third was allocated based on each school district’s proportionate share of the State’s total unweighted FTE enrollment. Following SBE 7030, two thirds is allocated pursuant to unweighted FTE and one-third is allocated based upon the Florida Crime Index.
THE CORPORATION
The Bay County Educational Facilities Finance Corporation is a Florida not-for-profit corporation formed for the purpose of acting as lessor in connection with "lease-purchase" capital financings for the School Board. The Corporation may in the future initiate additional Lease Schedules under the Master Lease, enter into other lease- purchase agreements with the School Board and cause certificates of participation to be issued which represent Lease Payments to be made under one or more lease-purchase agreements with the School Board. The members of the Corporation are the members of the School Board. The Chairman of the School Board serves as Chairman of the Board of Directors and President of the Corporation; the Vice Chairman of the School Board serves as Vice Chairman of the Board of Directors and Vice President of the Corporation; and the Superintendent of the School Board serves as ex-officio Secretary/Treasurer of the Corporation. The financing of a Project in 1994 constituted the initial activity of the Corporation. There is no litigation pending against the Corporation.
The Corporation has assigned all of its right, title and interest in and to the Master Lease (except certain indemnification rights, the right to initiate additional Lease Schedules from time to time and its obligation not to impair the tax status of the Certificates) including its right to receive Lease Payments from the School Board, its right, title and interest in and to the Ground Lease, and its right to use, sell and re-let Projects, to the Trustee. The Trustee directly collects from the School Board all of the Basic Rent Payments which are the source of and security for payment of the Certificates. Therefore, the credit of the Corporation is not material to any of the transactions contemplated in this Offering Statement. No financial information concerning the Corporation has been included herein, nor is it contemplated that any such financial information will be included in any future Offering Statement relating to the sale of any additional Series of Certificates or other obligations of the School Board or the Corporation.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the 2020A Certificates and 2020B Certificates are subject to an approving legal opinion of Bryant Miller Olive P.A., Tallahassee, Florida, Special Counsel, whose approving opinions (forms of which is attached hereto as APPENDIX I) will be available at the time of delivery of the 2020A Certificates and the 2020B Certificates. Certain legal matters will be passed on for the School Board and for the Corporation by Hand Arendall Harrison Sale LLC, Panama City, Florida. Certain legal matters will be passed on for the School Board by Hand Arendall Harrison Sale LLC, Panama City, Florida, Disclosure Counsel. Certain legal matters will be passed on for the Underwriters by Nabors Giblin & Nickerson, P.A., Tampa, Florida, Underwriters’ Counsel.
Special Counsel has not been engaged to, nor has it undertaken to, review the accuracy, completeness or sufficiency of this Offering Statement or any other offering material relating to the 2020A Certificates and the 2020B Certificates; provided, however, that Special Counsel shall render an opinion to the Underwriters of the 2020A Certificates and the 2020B Certificates (as to which only they may rely) relating to the accuracy of certain statements contained herein under the heading "TAX EXEMPTION" and certain statements which summarize provisions of the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, the 2020A Assignment Agreement, the Series 2020A Ground Lease Agreement, the Assignment of Series 2020A Ground Lease Agreement, and the 2020 Certificates.
LITIGATION
Concurrently with the delivery of the 2020 Certificates, the School Board Attorney will deliver an opinion which states, among other things, that there is no litigation or other proceedings pending or, to the best knowledge of
51 Appendix to page 107 119 the School Board, threatened against the School Board (i) that seeks to restrain or enjoin the issuance of delivery of the 2020 Certificates, the Master Lease, Lease Schedule No. 2020A or the Second Amended and Restated Lease Schedule No. 1999; (ii) questioning or affecting the validity of the 2020 Certificates, the Master Lease, Lease Schedule No. 2020A, the Second Amended and Restated Lease Schedule No. 1999, or any proceedings of the School Board or actions of the Trustee with respect to the authorization, sale, execution or issuance of the 2020A Certificates or the transactions contemplated by this Offering Statement or the Master Lease, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, Lease Schedule No. 2020A, the Second Amended and Restated Lease Schedule No. 1999 or any other agreement or instrument to which the School Board is a party in connection therewith and which is used or contemplated for use in the transactions contemplated by this Offering Statement or (iii) questioning or affecting the creation, organization or existence of the School Board and which would have an adverse effect on the actions taken by the School Board with respect to the issuance of the 2020 Certificates.
TAX EXEMPTION
Tax Exemption
The Internal Revenue Code of 1986, as amended (the "Code"), includes requirements which the School Board must continue to meet after the issuance of the 2020 Certificates in order that the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates not be included in gross income for federal income tax purposes. The School Board's failure to meet these requirements may cause the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates to be included in gross income for federal income tax purposes retroactive to the date of execution and delivery of the 2020 Certificates. The School Board has covenanted in the Series 2020A Lease Agreement and the Series 1999 Lease Agreement to take the actions required by the Code in order to maintain the exclusion from gross income for federal income tax purposes of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates.
In the opinion of Special Counsel, assuming continuing compliance by the School Board with the tax covenants referred to above, under existing statutes, regulations, rulings and court decisions, the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates is excluded from gross income for federal income tax purposes. The Interest Component of the Basic Rent Payments received by the Owners of the 2020A Certificates is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. The Interest Component of the Basic Rent Payments received by the Owners of the 2020A Certificates is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations. However, no opinion is expressed with respect to the federal income tax consequences of any payments received or to be received with respect to the 2020 Certificates following termination of the Series 2020A Lease Agreement or the Series 1999 Lease Agreement as a result of an event of non-appropriation or the occurrence of an event of default thereunder.
Except as described above, Special Counsel will express no opinion regarding the federal income tax or state or local tax consequences resulting from the receipt or accrual of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates, or the ownership or disposition of the 2020 Certificates.
Prospective purchasers of the 2020 Certificates should be aware that the ownership of 2020 Certificates may result in other collateral federal tax consequences, including (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry certificates, (ii) the reduction of certain loss reserve deductions for property and casualty insurance companies, (iii) the inclusion of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates in the earnings of certain foreign corporations doing business in the United States for purposes of a branch profits tax, (iv) the inclusion of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates in the passive income subject to federal income taxation of certain S corporations with Subchapter C earnings and profits at the close of the taxable year and (v) the inclusion in gross income of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates by recipients of certain Social Security and Railroad Retirement benefits.
PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE 2020A CERTIFICATES AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX
52 Appendix to page 107 120 CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE HOLDERS OF 2020A CERTIFICATES. PROSPECTIVE HOLDERS OF 2020A CERTIFICATES SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD.
During recent 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 2020A Certificates. 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 2020A Certificates. From time to time, legislative proposals are pending which could have an effect on both the Federal tax consequences resulting from ownership of 2020A Certificates and their market value. No assurance can be given that legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the 2020A Certificates.
[Tax Treatment of Issuance Discount
2020A Certificates
Under the Code, the difference between the principal amounts of the 2020A Certificates maturing on _____ in the years ______(bearing interest at _____%), ______, (bearing interest at ______), (collectively, the "2020A Discount Certificates") 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 the 2020A Discount Certificates of the same maturity was sold, is "original issue discount." Original issue discount represents interest which is excluded from gross income and which may result in the collateral tax consequences described above. Original issue discount will accrue over the term of a 2020A Discount Certificate at a constant interest rate compounded periodically. That portion of the original issue discount accruing during the period a purchaser holds a 2020A Discount Certificate will increase its adjusted basis in such 2020A Discount Certificate by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such 2020A Discount Certificates. Owners of 2020A Discount Certificates should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, prepayment or other disposition of such 2020A Discount Certificates and with respect to the state and local tax consequences of owning and disposing of such 2020A Discount Certificates. No opinion is expressed with respect to the federal income tax consequences of any original issue discount with respect to the 2020A Discount Certificates following termination of the Series 2020A Lease Agreement as a result of an event of non-appropriation or the occurrence of an event of default thereunder.]
2020B Certificates
Under the Code, the difference between the principal amounts of the 2020B Certificates maturing on _____ in the years ______(bearing interest at _____%), ______, (bearing interest at ______), (collectively, the "2020B Discount Certificates") 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 the 2020B Discount Certificates of the same maturity was sold, is "original issue discount." Original issue discount represents interest which is excluded from gross income and which may result in the collateral tax consequences described above. Original issue discount will accrue over the term of a 2020B Discount Certificate at a constant interest rate compounded periodically. That portion of the original issue discount accruing during the period a purchaser holds a 2020B Discount Certificate will increase its adjusted basis in such 2020B Discount Certificate by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such 2020B Discount Certificates. Owners of 2020B Discount Certificates should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, prepayment or other disposition of such 2020B Discount Certificates and with respect to the state and local tax consequences of owning and disposing of such 2020B Discount Certificates. No opinion is expressed with respect to the federal income tax consequences of any original issue discount with respect to the 2020B Discount Certificates following termination of the Series 1999 Lease Agreement as a result of an event of non-appropriation or the occurrence of an event of default thereunder.]
[Tax Treatment of Issuance Premium
53 Appendix to page 107 121
2020A Certificates
The 2020A Certificates maturing on ____ in the years ______through ______, inclusive, _____ (bearing interest at _____%), ______(bearing interest at ____%) were offered at prices in excess of the principal amount thereof (collectively, the "2020A Premium Certificates"). Under the Code, the excess of the cost basis of a 2020A Premium Certificate over the amount payable at the earlier of the first call date or the maturity date of the 2020A Premium Certificate that minimizes the yield to a purchaser of a 2020A Premium Certificate (other than for a holder who holds a Certificate as inventory, stock in trade, or for sale to customers in the ordinary course of business) is generally characterized as "bond premium." For federal income tax purposes, bond premium is amortized over the period to the earlier of the first call date or the maturity date of a 2020A Premium Certificate. A holder will therefore be required to decrease his basis in the 2020A Premium Certificate by the amount of the amortizable bond premium attributable to each taxable year he holds such 2020A Premium Certificate. The amount of the amortizable bond premium attributable to each taxable year is determined on an actuarial basis at a constant interest rate compounded on each interest payment date. The amortizable bond premium attributable to each to a taxable year is not deductible for federal income tax purposes.
Owners of the 2020A Premium Certificates should consult their own tax advisors with respect to the precise determination for federal income tax purposes of the treatment of bond premium upon sale, redemption, or other disposition of such Certificates.]
2020B Certificates
The 2020A Certificates maturing on ____ in the years ______through ______, inclusive, _____ (bearing interest at _____%), ______(bearing interest at ____%) were offered at prices in excess of the principal amount thereof (collectively, the "2020B Premium Certificates"). Under the Code, the excess of the cost basis of a 2020B Premium Certificate over the amount payable at the earlier of the first call date or the maturity date of the 2020B Premium Certificate that minimizes the yield to a purchaser of a 2020B Premium Certificate (other than for a holder who holds a Certificate as inventory, stock in trade, or for sale to customers in the ordinary course of business) is generally characterized as "bond premium." For federal income tax purposes, bond premium is amortized over the period to the earlier of the first call date or the maturity date of a 2020B Premium Certificate. A holder will therefore be required to decrease his basis in the 2020B Premium Certificate by the amount of the amortizable bond premium attributable to each taxable year he holds such 2020B Premium Certificate. The amount of the amortizable bond premium attributable to each taxable year is determined on an actuarial basis at a constant interest rate compounded on each interest payment date. The amortizable bond premium attributable to each to a taxable year is not deductible for federal income tax purposes.
Owners of the 2020B Premium Certificates should consult their own tax advisors with respect to the precise determination for federal income tax purposes of the treatment of bond premium upon sale, redemption, or other disposition of such Certificates.]
RATINGS
[Moody's Investors Service, Inc. ("Moody's") is expected to assign a rating of "____" to the Insured 2020A Certificates and the Insured 2020B Certificates, with the understanding that, upon delivery of the Insured 2020A Certificates and Insured 2020B Certificates, the Policy insuring the payment when due of the principal of and interest on the Insured 2020A Certificates and Insured 2020B Certificates will be issued by the Insurer. See also "BOND INSURANCE" for information concerning the ratings for ______. Moody's and Fitch Ratings ("Fitch") have assigned underlying ratings of "____” and "___," respectively, to the 2020 Certificates without regard to the issuance by the Insurer of its Policy. An explanation of the significance of the ratings given by Moody's may be obtained from Moody's, at ______. An explanation concerning the significance of the ratings given by S&P may be obtained from S&P at ______. An explanation concerning the significance of the rating given by Fitch may be obtained from Fitch at ______. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by
54 Appendix to page 107 122 the rating agency, if in the judgment of the rating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the 2020 Certificates.]
FINANCIAL STATEMENTS
The Annual Financial Statements of the District for the Fiscal Year ended June 30, 2019, accompanied by the Independent Auditor’s Report of Carr Riggs & Ingram, Certified Public Accountants, excerpted pages from which are attached as APPENDIX B to this Offering Statement, stated that the District's general purpose financial statements (except for the expendable trust funds which were not audited by the Auditor General) fairly represented, in all material respects, its financial position, and the results of its operations and changes in financial position of its proprietary fund types in conformity with generally accepted accounting principles. The Independent Auditor’s Report is included in APPENDIX B with the consent of the auditor.
FINANCIAL ADVISOR
The School Board has retained Ford & Associates, Inc., Tampa, Florida, as financial advisor in connection with the School Board's financing plans and with respect to the authorization and issuance of the 2020 Certificates. 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 Offering Statement. The Financial Advisor did not participate in the underwriting of the 2020 Certificates.
UNDERWRITING
The 2020A Certificates are being purchased by Raymond James & Associates, Inc., on behalf of itself and PNC Capital Markets, LLC (collectively, the "Underwriters") at a purchase price of $______(which represents the par amount of the 2020A Certificates of $______, less net original issue discount/plus net original premium of $______and less an Underwriters' Discount of $______). The Underwriters' obligations are subject to certain conditions precedent, and they will be obligated to purchase all of the 2020A Certificates if any 2020A Certificates are purchased. The 2020A Certificates may be offered and sold to certain dealers (including dealers depositing such 2020A Certificates 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 Underwriters.
The 2020B Certificates are being purchased by Raymond James & Associates, Inc., on behalf of itself and PNC Capital Markets, LLC (collectively, the "Underwriters") at a purchase price of $______(which represents the par amount of the 2020B Certificates of $______, less net original issue discount/plus net original premium of $______and less an Underwriters' Discount of $______). The Underwriters' obligations are subject to certain conditions precedent, and they will be obligated to purchase all of the 2020B Certificates if any 2020B Certificates are purchased. The 2020B Certificates may be offered and sold to certain dealers (including dealers depositing such 2020B Certificates 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 Underwriters.
PNC Capital Markets LLC, one of the Underwriters of the 2020 Certificates, and PNC Bank, National Association are both wholly-owned subsidiaries of PNC Financial Services Group, Inc. PNC Capital Markets LLC is not a bank, and is a distinct legal entity from PNC Bank, National Association. PNC Bank, National Association has banking and financial relationships with the School Board.
CONTINUING DISCLOSURE
The School Board has agreed and undertaken for the benefit of 2020 Certificates holders and in order to assist the Underwriters in complying with the continuing disclosure requirements of S.E.C. Rule 15c2-12, as amended (the "Rule"), to provide certain financial information and operating data relating to the School Board and the 2020 Certificates in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events,
55 Appendix to page 107 123 if material. Such undertaking shall only apply so long as the 2020 Certificates remain outstanding under the Series 2020A Supplemental Trust Agreement and the Series 2020B Supplemental Trust Agreement. The Annual Report and audited financial statements will be filed annually by the School Board pursuant to the undertaking with the Municipal Securities Rulemaking Board (the "MSRB") via its Electronic Municipal Market Access system described in the Continuing Disclosure Agreement (APPENDIX J hereto). The notices of material events will be filed by the School Board with the MSRB. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in APPENDIX J.
With respect to the 2020 Certificates, no party other than the School Board is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the aforementioned Rule. The School Board has provided its continuing disclosure information for the past five (5) the Fiscal Years on a timely basis and intends to fully comply with all current and future continuing disclosure undertakings. The School Board has engaged Digital Assurance Certification, L.L.C., as its dissemination agent, in order to ensure ongoing and future compliance with its obligations under the Rule.
The School Board has previously undertaken to provide continuing disclosure with respect to certain of its outstanding obligations. The School Board has not failed, in any material respect, during the past five years to file timely any report or notice of enumerated events required to be filed pursuant to those undertakings.
CONTINGENT FEES
The School Board has retained Special Counsel, Disclosure Counsel, the Financial Advisor, the Underwriters (who in turn retained Underwriters' Counsel), the Trustee and Trustee's Counsel, with respect to the authorization, sale, execution and delivery of the 2020A Certificates. Payment of each fee of such professionals is each contingent upon the issuance of the 2020A Certificates.
ACCURACY AND COMPLETENESS OF OFFERING STATEMENT
The references, excerpts, and summaries of all documents, statutes, and information concerning the School Board and the Series 2020 Project 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 2020A Certificates, the security for the payment of the 2020A Certificates and the rights and obligations of the owners thereof and to each such statute, report or instrument.
The Appendices hereto are integral parts of this Offering Statement and must be read in their entirety together with all foregoing statements.
FORWARD LOOKING STATEMENTS
This Offering Statement contains certain "forward-looking statements" concerning the District's operations, performance and financial condition, including its future economic performance, plans and objectives and the likelihood of success in developing and expanding. These statements are based upon a number of assumptions and estimates which are subject to significant uncertainties, many of which are beyond the control of the District. The words "may," "would," "could," "will," "expect," "anticipate," "believe," "intend," "plan," “budget,” "estimate" and similar expressions are meant to identify these forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements.
AUTHORIZATION OF OFFERING STATEMENT
The execution and delivery of this Offering Statement has been duly authorized and approved by the School Board. At the time of delivery of the 2020A Certificates, the undersigned will furnish a certificate to the effect that
56 Appendix to page 107 124 nothing has come to their attention which would lead them to believe that the Offering Statement (excluding the information related to the [Insurer, its Policy], DTC and it book-entry system of registration, as to all of which no opinion will be expressed), as of its date and as of the date of delivery of the 2020A Certificates, 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 Offering 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.
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA
Chairman
Superintendent
3477177_8
57 Appendix to page 107 125 EXHIBIT E
FORM OF SERIES 2020A CERTIFICATE PURCHASE CONTRACT
25015/014/01587121.DOCv4
Appendix to page 107 126
$______$______CERTIFICATES OF REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2020A PARTICIPATION, SERIES 2020B (School Board of Bay County, Florida (School Board of Bay County, Florida Master Lease Program, Series 2020A) Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Evidencing an Undivided Proportionate Interest of Owners Interest of Owners thereof in Basic Rent Payments to be thereof in Basic Rent Payments to be made under a made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by The School Board of Bay County, The School Board of Bay County, Florida Florida
______, 2020
CERTIFICATE PURCHASE CONTRACT
The School Board of Bay County, Florida 1311 Balboa Avenue Panama City, Florida 32401
Bay County Educational Facilities Finance Corporation 1311 Balboa Avenue Panama City, Florida 32401
Ladies and Gentlemen:
The undersigned, Raymond James & Associates, Inc. (the "Representative"), on behalf of itself and PNC Capital Markets LLC (collectively, the "Underwriters"), offers to enter into this Certificate Purchase Contract (the "Purchase Contract") with The School Board of Bay County, Florida (the "Board" or the "School Board") and Bay County Educational Facilities Finance Corporation (the "Corporation"), which upon acceptance of this offer by the Board and the Corporation will be binding upon the Board, the Corporation and the Underwriters. This offer is made subject to written acceptance hereof by the Board and the Corporation at or before 5:00 p.m., local time, on the date hereof and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to the Board and the Corporation at any time prior to the acceptance hereof by the Board and the Corporation. The parties hereto agree and acknowledge that the obligations of the Board and the Corporation hereunder do not constitute a general obligation of the Board and the
1 Appendix to page 107 127 Corporation. The Representative hereby represents that it is authorized to execute and deliver the Purchase Contract on behalf of the Underwriters.
The Board and the Corporation acknowledge and agree (i) the Underwriters are not acting as a municipal advisor within the meaning of Section 15B of the Securities Exchange Act of 1934, as amended, (ii) the primary role of the Underwriters, as underwriters, is to purchase the securities, for resale to investors, in an arm’s length commercial transaction between the Board, the Corporation and the Underwriters and the Underwriters have financial and other interests that differ from those of the Board and the Corporation; (iii) the Underwriters are acting solely as principals and are not acting as municipal advisors, financial advisors or fiduciaries to the Board and the Corporation and have not assumed any advisory or fiduciary responsibility to the Board or the Corporation with respect to the transactions contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currently providing other services to the Board or the Corporation on other matters); (iv) the only obligations the Underwriters have to the Board and the Corporation with respect to the transactions contemplated hereby expressly are set forth in this Purchase Contract; and (v) the Board and the Corporation have consulted their own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent they have deemed appropriate.
1. Purchase and Sale. Upon the terms and conditions and in reliance upon the representations, warranties, covenants and agreements set forth herein, the Underwriters hereby agree to purchase, and the Board agrees to cause Hancock Whitney Bank, Orlando Florida, as successor trustee (the "Trustee") to execute and deliver to the Underwriters, all (but not less than all) of the (i) aggregate principal amount of the $______Certificates of Participation Series 2020A (the "Series 2020A Certificates") and (ii) aggregate principal amount of the $______Refunding Certificates of Participation Series 2020B (the "Series 2020B Certificates," and together with the Series 2020A Certificates, the "Series 2020 Certificates.) The Series 2020 Certificates shall be dated as of their date of delivery.
The Series 2020A Certificates are being issued for the principal purpose of providing funds to (i) finance the costs of the acquisition, construction and installation of certain educational facilities within the School District of Bay County, Florida (the "District"), as more particularly described herein and (ii) pay certain costs associated with the issuance of the Series 2020A Certificates.
The Series 2020B Certificates are being issued for the principal purpose of providing funds, together with other legally available funds, sufficient to (i) refund all of the School Board's outstanding Certificates of Participation, Series 2010A (the "Refunded Certificates") and (ii) pay certain costs associated with the issuance of the Series 2020B Certificates.
2 Appendix to page 107 128 The purchase price for the Series 2020A Certificates shall be $______, which price represents the par amount of $______, plus/less net original issue premium/discount of $______and less an Underwriters' discount of $______.
The purchase price for the Series 2020B Certificates shall be $______, which price represents the par amount of $______, plus/less net original issue premium/discount of $______and less an Underwriters' discount of $______.
The Series 2020A Certificates shall be as described in and shall be authorized by a resolution adopted by the Board on April 28, 2020 (the " Series 2020A Resolution") and a resolution adopted by the Corporation on April 28, 2020 (the "Series 2020A Corporation Resolution"), and shall be issued under and secured pursuant to the provisions of a Master Trust Agreement, dated as of November 1, 1994 (the "Master Trust Agreement"), as supplemented by the Series 2020A Supplemental Trust Agreement, dated as of May 1, 2020 (the "Series 2020A Supplemental Trust Agreement," and together with the Master Trust Agreement, the "Series 2020A Trust Agreement") each by and among the Board, the Corporation and the Trustee.
The Series 2020B Certificates shall be as described in and shall be authorized by a resolution adopted by the Board on April 28, 2020 (the "Series 2020B Resolution," and together with the Series 2020A Resolution, the "Resolutions") and a resolution adopted by the Corporation on April 28, 2020 (the "Series 2020B Corporation Resolution," and together with the Series 2020A Corporation Resolution, the "Corporation Resolutions"), and shall be issued under and secured pursuant to the provisions of the Master Trust Agreement, as supplemented by the Series 2020B Supplemental Trust Agreement, dated as of May 1, 2020 (the "Series 2020B Supplemental Trust Agreement," and together with the Master Trust Agreement, the "Series 2020B Trust Agreement") each by and among the Board, the Corporation and the Trustee. The Series 2020A Trust Agreement and the Series 2020B Trust Agreement are collectively referred to herein as the "Series 2020 Trust Agreements." Capitalized terms not otherwise defined herein shall have the meanings set forth in the Series 2020 Trust Agreements, as applicable.
The Series 2020 Certificates shall mature at the times and in the principal amounts and bear interest at the rates set forth in Appendix A attached hereto and shall be subject to prepayment at the times and at the prices set forth in Appendix B attached hereto. The information required by Section 218.385(6), Florida Statutes, to be provided by the Underwriters is set forth in Appendix C attached hereto. Further, in order to assist the Board in complying with Section 218.385(2) and (3), Florida Statutes, the Underwriters are providing the Board and the Corporation with the information needed to complete a truth-in-bonding statement, the form of which is attached as Appendix D attached hereto.
The School Board has heretofore entered into a Master Lease-Purchase Agreement, dated as of November 1, 1994 (the "Master Lease"), between the Corporation, as lessor, and the School Board, as lessee, for the purpose of lease purchasing from time to time
3 Appendix to page 107 129 certain educational facilities, sites and equipment ("Projects") from the Corporation. Projects to be leased from time to time are identified on separate lease schedules (each a "Lease Schedule") attached to the Master Lease. Upon execution and delivery thereof, each Lease Schedule, together with the provisions of the Master Lease, constitutes a separate lease agreement (individually a "Lease" and collectively the "Leases").
The Master Trust Agreement provides that the Trustee may, at the prior request of the School Board and the Corporation, issue Certificates from time to time pursuant to the terms and provisions thereof for the purpose of obtaining funds to be used to pay the costs of acquisition, construction and installation of Projects. Pursuant to the Master Trust Agreement, the applicable provisions of Florida law and the Resolutions, the School Board has authorized the execution and delivery of (i) Lease Schedule No. 2020A, dated as of May 1, 2020 as the same may be amended and restated from time to time ("Lease Schedule No. 2020A," and together with the Master Lease, the "Series 2020A Lease Agreement") for the principal purpose of financing the costs of acquisition, construction and installation of the Series 2020 Project (described below) and (ii) Second Amended and Restated Lease Schedule No. 1999, dated as of May 1, 2020 as the same may be amended and restated from time to time (Lease Schedule No. 1999," and together with the Master Lease, the "Series 1999 Lease Agreement") for the principal purpose of refunding the Refunded Certificates and thereby refinancing a portion of the costs of acquisition, construction and installation of the Series 1999 Project (as described therein) . The Series 2020A Lease Agreement and the Series 1999 Lease Agreement are collectively referred to herein as the "Transaction Lease Agreements."
The Series 2020 Project being financed with a portion of the proceeds of the Series 2020A Certificates and lease-purchased under the Series 2020A Lease Agreement includes the acquisition, construction and installation of a new elementary school, as more particularly described in the hereinafter defined Preliminary Offering Statement (collectively, the "Series 2020 Project").
Pursuant to (i) a Series 2020A Ground Lease Agreement, dated as of May 1, 2020 ( the "Series 2020A Ground Lease"), between the School Board and the Corporation, the School Board will lease certain land on which the Series 2020 Project will be located to the Corporation and (ii) a Series 2010A Ground Lease Agreement, dated as of July 1, 2010 (the "Series 2010A Ground Lease," and together with the 2020A Ground Lease, the "Transaction Ground Leases"), between the School Board and the Corporation, the School Board has leased the sites on which the Series 1999 Project is located to the Corporation.
Pursuant to (i) Series 2020A Assignment of Ground Lease Agreement, dated as of May 1, 2020 (the "Series 2020A Ground Lease Assignment"), between the Corporation and the Trustee, the Corporation has assigned to the Trustee for the benefit of the registered owners of the Series 2020A Certificates (as defined in the hereinafter described Offering Statement) all of the Corporation's right, title and interest in and to the Series 2020A Ground Lease and (ii) Series 2010A Assignment of Ground Lease Agreement, dated as of
4 Appendix to page 107 130 July 1, 2010 (the "Series 2010A Ground Lease Assignment), between the Corporation and the Trustee, the Corporation has assigned to the Trustee for the benefit of the registered owners of the Refunded Certificates (and any Certificates issued to refund such Refunded Certificates) all of the Corporation's right, title and interest in and to the Series 2010A Ground Lease. The Series 2020A Ground Lease Assignment and the Series 2010A Ground Lease Assignment are collectively referred to herein as the "Transaction Ground Lease Assignments."
Pursuant to the Series 2020A Assignment Agreement, dated as of May 1, 2020 (the "Series 2020A Lease Assignment"), between the Corporation and the Trustee, the Corporation has irrevocably assigned to the Trustee for the benefit of the registered owners of the Series 2020A Certificates substantially all of the Corporation's right, title and interest in and to the Series 2020A Lease Agreement, including its right to receive Basic Rent Payments and all other amounts due under the Series 2020A Lease Agreement.
Pursuant to the Series 2020B Assignment Agreement, dated as of May 1, 2020 (the "Series 2020B Lease Assignment"), between the Corporation and the Trustee, the Corporation has irrevocably assigned to the Trustee for the benefit of the registered owners of the Series 2020B Certificates substantially all of the Corporation's right, title and interest in and to the Series 1999 Lease Agreement, including its right to receive Basic Rent Payments and all other amounts due under the Series 1999 Lease Agreement. The Series 2020A Lease Assignment and the Series 2020B Lease Assignment are collectively referred to herein as the "Transaction Lease Assignments."
[The scheduled payment of principal of and interest represented by the Series 2020A Certificates maturing on July 1 in the years 20__ and 20__ (the "Insured Series 2020A Certificates"), when due, will be guaranteed under a municipal bond insurance policy (the "2020A Policy") to be issued concurrently with the delivery of the Insured Series 2020 Certificates by ______(the "Insurer").
The scheduled payment of principal of and interest represented by the Series 2020B Certificates maturing on July 1 in the years 20__ and 20__ (the "Insured Series 2020B Certificates," and together with the Insured Series 2020A Certificates, the "Insured Series 2020 Certificates"), when due, will be guaranteed under a municipal bond insurance policy (the "2020B Policy," and together with the 2020A Policy, the "Policies") to be issued concurrently with the delivery of the Insured Series 2020 Certificates by the Insurer.]
2. Delivery of Offering Statement and Other Documents.
(a) Prior to the date hereof, the Board and the Corporation shall have provided, or cause to be provided, to the Underwriters for their review the Preliminary Offering Statement dated May ___, 2020 (the "Preliminary Offering Statement"), that the Board hereby deems final as of its date in accordance with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "SEC
5 Appendix to page 107 131 Rule"), except for certain omissions in connection with the pricing of the Series 2020 Certificates. The Underwriters have reviewed such Preliminary Offering Statement prior to the execution of this Purchase Contract.
(b) As soon as practicable after the date hereof, and, in any event within seven (7) business days of the date hereof (or within such shorter period as may be reasonably requested by the Underwriters in order to accompany any confirmation that requests payment from any customer to comply with Rule G-32 of the Municipal Securities Rulemaking Board ("MSRB")), but in no event later than two (2) business days prior to the Date of Closing, the Board shall, so as to enable the Underwriters to comply with the provisions of the SEC Rule, deliver, or cause to be delivered, to the Underwriters a reasonable number of copies of a final Offering Statement as the Underwriters shall request dated the date hereof (including the cover page, inside cover page and appendices contained therein, together with all supplements and amendments thereto, is herein called the "Offering Statement"), substantially in the form of the Preliminary Offering Statement, with only such changes therein as shall have been accepted by the Underwriters, executed on behalf of the Board by the Chairman or Vice-Chairman and the Superintendent. The Board shall prepare the Offering Statement, including any amendments thereto, in word- searchable PDF format as described in the MSRB's Rule G-32 and shall provide the electronic copy of the word-searchable PDF format of the Offering Statement to the Representative no later than two (2) business days prior to the Date of Closing to enable the Representative to comply with MSRB Rule G-32.
(c) Unless the Representative shall otherwise give notice to the Board and the Corporation the Date of Closing (as defined herein) shall be the "end of the underwriting period" within the meaning of the SEC Rule, after which date no participating underwriter, as such term is defined in the SEC Rule, remains obligated to deliver Offering Statements pursuant to paragraph (b)(4) of the SEC Rule.
(d) At or prior to the Closing (as defined herein), the Representative shall file, or cause to be filed, the Offering Statement with the MSRB's Electronic Municipal Market Access System ("EMMA").
(e) At Closing, the Board shall deliver, or cause to be delivered to the Underwriters a copy of the Resolutions, certified to by its Secretary, substantially in the form heretofore delivered to the Underwriters, with only such changes therein as agreed upon by the Underwriters.
(f) The Board hereby authorizes the Underwriters to use the forms or copies of (i) the Resolutions, (ii) the Series 2020 Trust Agreements, (iii) the Transaction Lease Agreements, (iv) the Transaction Ground Leases, (v) the Transaction Lease Assignments, (vi) the Transaction Ground Lease Assignments, (vii) that certain Disclosure Dissemination Agent Agreement, to be dated the Date of Closing (as defined in Section 7 hereof), between the Board and Digital Assurance Certification, L.L.C. (the "Disclosure
6 Appendix to page 107 132 Agreement"), (viii) the Escrow Deposit Agreement, dated ______, 2020 ( the "Escrow Deposit Agreement"), between the School Board and Hancock Whitney Bank, as escrow agent (the "Escrow Agent") and (ix) the Offering Statement and the information contained therein in connection with the public offering and sale of the Series 2020 Certificates and ratifies and confirms its authorization of the distribution and use by the Underwriters prior to the date hereof of the Preliminary Offering Statement in connection with such public offering and sale.
(g) In order to assist the Underwriters in complying with the SEC Rule, the Board shall undertake, pursuant to the Disclosure Agreement, to provide annual financial information and notices of the occurrence of specified events. A description of the Disclosure Agreement is set forth in, and a form of such agreement is attached as an appendix, to the Preliminary Offering Statement and the Offering Statement.
3. Public Offering; Establishment of Issue Price;
(a) The Underwriters agree, jointly and severally, to make a bona fide public offering of all of the Series 2020 Certificates at a price not in excess of the initial price or prices or yields not less than the yields set forth on the inside cover page of the Offering Statement; provided, however, the Underwriters reserve the right to change such initial public offering prices as the Underwriters deem necessary or desirable, in their sole discretion, in connection with the marketing of the Series 2020 Certificates, and may offer and sell the Series 2020 Certificates to certain dealers, unit investment trusts and money market funds, certain of which may be sponsored or managed by one or more of the Underwriters at prices lower than the public offering prices or yields greater than the yields set forth therein.
(b) The Representative, on behalf of the Underwriters, agrees to assist the Corporation and the School Board in establishing the issue price of the Series 2020 Certificates and shall execute and deliver to the Corporation and the School Board at Closing an "issue price" or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Appendix E, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Representative, the Corporation, the School Board and Special Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Series 2020 Certificates.
(c) [Except as otherwise set forth in Schedule A to Exhibit E attached hereto,] the Corporation and the School Board will treat the first price at which 10% of each maturity of the Series 2020 Certificates (the "10% test") is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Contract, the Representative shall report to the Corporation and the School Board the price or prices at which the Underwriters have sold to the public
7 Appendix to page 107 133 each maturity of Series 2020 Certificates. If at that time the 10% test has not been satisfied as to any maturity of the Series 2020 Certificates, the Representative agrees to promptly report to the Corporation and the School Board the prices at which Series 2020 Certificates of that maturity have been sold by the Underwriters to the public. That reporting obligation shall continue until the earlier of the date upon which the 10% test has been satisfied as to the Series 2020 Certificates of that maturity or until the Closing.
(d) The Representative confirms that the Underwriters have offered the Certificates to the public on or before the date of this Purchase Contract at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Schedule A to Exhibit E attached hereto, except as otherwise set forth therein. [Schedule A to Exhibit E also sets forth, as of the date of this Purchase Contract, the maturities, if any, of the Series 2020 Certificates for which the 10% test has not been satisfied and for which the School Board and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the School Board to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the "hold-the-offering-price rule"). So long as the hold-the-offering-price rule remains applicable to any maturity of the Series 2020 Certificates, the Underwriter will neither offer nor sell unsold Series 2020 Certificates of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or
(2) the date on which the Underwriter has sold at least 10% of that maturity of the Series 2020 Certificates to the public at a price that is no higher than the initial offering price to the public.]
Upon the Board's request, the Representative shall promptly advise the School Board and the Corporation when the Underwriters have sold 10% of that maturity of the Series 2020 Certificates to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.
The School Board and Corporation acknowledges that, in making the representation set forth in this subsection, the Representative will rely on (i) the agreement of each Underwriter to comply with the hold-the-offering-price rule, as set forth in an agreement among Underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Series 2020 Certificates to the public, the agreement of each dealer who is a member of the selling group to comply with the hold- the-offering-price rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an Underwriter is a party to a retail distribution agreement that was employed in connection with the initial sale of the Series 2020 Certificates to the public, the agreement of each broker-dealer that is a party to such agreement to comply
8 Appendix to page 107 134 with the hold-the-offering-price rule, as set forth in the retail distribution agreement and the related pricing wires. The School Board and the Corporation further acknowledge that each Underwriter shall be solely liable for its failure to comply with its agreement regarding the hold-the-offering-price rule and that no Underwriter shall be liable for the failure of any other Underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Certificates.]
(e) The Representative confirms that:
(i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the Underwriter is a party) relating to the initial sale of the Series 2020 Certificates to the public, together with the related pricing wires, contains or will contain language obligating each Underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) (1) report the prices at which it sells to the public the unsold Series 2020 Certificates of each maturity allotted to it until it is notified by the Representative that either the 10% test has been satisfied as to the Series 2020 Certificates of that maturity or all Series 2020 Certificates of that maturity have been sold to the public and (2) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Representative and as set forth in the related pricing wires, (B) promptly notify the Representative of any sales of the Series 2020 Certificates that, to its knowledge, are made to a purchaser who is a related party (as defined below) to an underwriter participating in the initial sale of the Series 2020 Certificates to the public (as defined below), and (C) acknowledge that, unless otherwise advised by the Underwriters, dealer or broker-dealer, the Representative shall assume that each order submitted by the Underwriters, dealer or broker-dealer is a sale to the public; and
(ii) any agreement among underwriters relating to the initial sale of the Series 2020 Certificates to the public, together with the related pricing wires, contains or will contain language obligating each Underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Series 2020 Certificates to the public to require each broker-dealer that is a party to such retail distribution agreement to (A) report the prices at which it sells to the public the unsold Series 2020 Certificates of each maturity allotted to it until it is notified by the Representative or another Underwriter that either the 10% test has been satisfied as to the Series 2020 Certificates of that maturity or all Series 2020 Certificates of that maturity have been sold to the public and (B) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed
9 Appendix to page 107 135 by the Representative or another Underwriter and as set forth in the related pricing wires.
(f) The Underwriters acknowledge that sales of any Series 2020 Certificates to any person that is a related party to an Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes of this Section 3:
(i) "public" means any person other than an underwriter or a related party,
(ii) "underwriter" means (A) any person that agrees pursuant to a written contract with the Corporation and the School Board (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Series 2020 Certificates to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Series 2020 Certificates to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Series 2020 Certificates to the public),
(iii) a purchaser of any of the Series 2020 Certificates is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and
(iv) "sale date" means the date of execution of this Purchase Contract by all parties.
4. Good Faith Check. Delivered to the Board herewith is a corporate check of the Representative, payable to the order of the Board in the sum of $______(calculated as 1% of the estimated principal amount of the Series 2020 Certificates as reflected in the Preliminary Offering Statement) (the "Good Faith Check"). In the event that this offer is accepted, the Good Faith Check shall be held uncashed by the Board until the Closing and in the event the Underwriters comply with their obligations to accept and pay for the Series 2020 Certificates, as provided herein, said check shall be returned to the Representative at the Closing. In the event that the Board does not approve this offer, the Good Faith Check shall be immediately returned to the Representative. In the event that the Underwriters fail (other than for a reason permitted hereunder) to accept and pay for
10 Appendix to page 107 136 the Series 2020 Certificates at the Closing as herein provided, the Board may cash the Good Faith Check and apply the funds to defray its expenses and to pay liquidated damages for such failure and for any defaults hereunder on the part of the Underwriters, and such use shall constitute a full release and discharge of all claims by the Board against the Underwriters arising out of the transactions contemplated hereby. In the event of the failure by the Board to deliver the Series 2020 Certificates at the Closing, or if the Board shall be unable to satisfy the conditions to the obligations of the Underwriters contained herein (unless such conditions are waived by the Underwriters), or if the obligations of the Underwriters shall be terminated for any reason permitted hereunder, the Board shall immediately cause the Good Faith Check to be returned to the Representative, and such return shall constitute a full release and discharge of all claims by the Underwriters against the Board arising out of the transactions contemplated hereby.
5. Representations, Warranties and Agreements.
(a) By its acceptance hereof, the Board represents and warrants to and agrees with the Underwriters that, as of the date hereof:
(i) The Board is duly and validly existing as a body corporate and politic pursuant to Article IX, Section 4(a) of the Florida Constitution and the laws of the State of Florida (particularly, Chapter 1001, Florida Statutes) and is the governing body of the District.
(ii) The Board has full legal right, power and authority to enter into this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements; by official action of the Board taken prior to or concurrently with the acceptance hereof, the Resolutions have been duly adopted in accordance with the laws of the State of Florida, are in full force and effect and have not been rescinded; this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements, when executed by the Board and the other parties thereto, will each be duly authorized and delivered and will constitute the legal, valid and binding obligations of the Board enforceable in accordance with their respective terms, except as the enforceability thereof may be affected by bankruptcy, insolvency, or other laws affecting the rights of creditors or tenants generally or the application by a court of equitable principles; the Board has duly authorized and approved the consummation by it of all other transactions contemplated by the Resolutions, the Transaction Lease Agreements, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and this Purchase Contract to have been performed or consummated at or prior to the Date of Closing.
11 Appendix to page 107 137 (iii) The execution and delivery of this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements, the issuance by the Trustee of the Series 2020 Certificates and the adoption of the Resolutions, and compliance with the obligations on the Board's part contained herein and therein, will not conflict with or constitute a material breach of or material default under any federal or Florida constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Board is a party or to which the Board or any of its properties or other assets is otherwise subject, nor will any such execution, delivery, adoption, implementation or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or other assets of the Board under the terms of any such provision, law, regulation, document or instrument, except as provided or permitted by the Series 2020 Certificates, this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Lease, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements.
(iv) All approvals, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Board of its obligations under this Purchase Contract, the Resolutions, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements have been, or prior to the Closing will have been, duly obtained; provided, however, that this representation and warranty does not apply to such approvals, consents and orders as may be required under the "blue sky" or securities laws of any state in connection with the offering and sale of the Series 2020 Certificates.
(v) The information contained in the Preliminary Offering Statement was and is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that no opinion is expressed with respect to the information contained therein relating to DTC or its book-entry only system and the Insurer and its Policies.)
(vi) Except as described in the Preliminary Offering Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, governmental agency or public board or body, pending or, to the best knowledge of the Board, threatened against the Board: (A) which may affect the existence of the Board or the titles or rights of their officers to their respective
12 Appendix to page 107 138 offices; (B) which may affect or which seeks to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 2020 Certificates, or the collection of the Basic Rent Payments or assignment thereto to make payments on the Series 2020 Certificates and to make other payments under the Transaction Lease Agreements; (C) which in any way contests or affects the validity or enforceability of the Series 2020 Certificates, the Resolutions, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement, the Series 2020 Trust Agreements or any of them or of this Purchase Contract; (D) which would cause the Interest Component of Basic Rent Payments to be included in gross income of the holders of the Series 2020 Certificates for purposes of federal income taxation; or (E) which contests in any way the completeness or accuracy of the Preliminary Offering Statement or which contests the powers of the Board or any authority or proceedings for the issuance, sale or delivery of the Series 2020 Certificates, or the due adoption of the Resolutions or the execution and delivery of this Purchase Contract, the Transaction Lease Agreements, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement or any of them; nor, to the best knowledge of the Board, is there any basis therefor wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Series 2020 Certificates, the Resolutions, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement or any of them, or this Purchase Contract.
(vii) The Board will furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the Underwriters as the Underwriters may reasonably request in order: (A) to qualify the Series 2020 Certificates for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate; and (B) to determine the eligibility of the Series 2020 Certificates for investment under the laws of such states and other jurisdictions, and will use its best reasonable efforts to continue such qualifications in effect so long as required for the initial distribution of the Series 2020 Certificates; provided that the Board shall not be obligated to qualify to do business, pay any fee or to take any action that would subject it to general service of process in any state where it is not now so subject.
(viii) If, after the date of this Purchase Contract and until the earlier of (A) ninety (90) days from the end of the "underwriting period" (as defined in the SEC Rule), or (B) the time when the Offering Statement is available to any person from a nationally recognized repository, but in no case less than twenty-five (25) days following the end of the underwriting period, the Board becomes aware that any event shall have occurred which might or would cause the Offering Statement, as
13 Appendix to page 107 139 then supplemented or amended, to contain any untrue statement of a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Board shall notify the Underwriters thereof, and, if in the opinion of the Underwriters such event requires the preparation and publication of a supplement or amendment to the Offering Statement, the Board will, at its own expense, forthwith prepare and furnish to the Underwriters a sufficient number of copies of an amendment of or supplement to the Offering Statement (in form and substance satisfactory to the Underwriters and their Counsel) which will supplement or amend the Offering Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading.
(ix) The Board covenants to comply with the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), in order to maintain the exclusion from gross income for purposes of federal income taxation of the Interest Component of Basic Rent Payments, subject to the right of the Board to non- appropriate. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2020 Certificates and other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States.
(x) The Board has not, since December 31, 1975 been in default in the payment of principal of, premium, if any, or interest on, or otherwise been in default with respect to, any bonds, notes or other obligations which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest.
(xi) Except as disclosed in the Preliminary Offering Statement, during the past five years, the Board has not failed to comply in any material respect with any previous continuing disclosure undertakings made pursuant to the SEC Rule.
(xii) The Board has never been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the Board is an issuer whose arbitrage certificates cannot be relied upon.
(xiii) Since June 30, 2019, the date of the latest available audited financial statements of the Board, other than as disclosed in the Preliminary Offering Statement and Offering Statement, there has been no material adverse change in the financial position or results of operation of the Board, nor has the Board incurred any material liabilities other than (i) in the ordinary course of business, and (ii) obligations incurred in connection with the issuance of the Series 2020 Certificates.
14 Appendix to page 107 140 (b) By its acceptance hereof, the Corporation represents and warrants to and agrees with the Underwriters that, as of the date hereof:
(i) The Corporation is a not-for-profit corporation duly organized, incorporated, validly existing, and in good standing under the laws of the State of Florida.
(ii) The Corporation has full legal right, power and authority to enter into this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Series 2020 Trust Agreements, the Transaction Lease Assignments and the Transaction Ground Lease Assignments; by official action taken by the Corporation taken prior to or concurrently with the acceptance hereof, the Corporation Resolutions have been duly adopted in accordance with the laws of the State of Florida, are in full force and effect and have not been rescinded, this Purchase Contract, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments have been duly authorized, executed and delivered by the Corporation and constitute the legal, valid and binding obligations of the Corporation enforceable in accordance with their respective terms, except as the enforcement thereof may be affected by bankruptcy, insolvency, or other laws affecting the rights of creditors or tenants generally or the application by a court of equitable principles; the Corporation has duly authorized and approved the consummation by it of all other transactions contemplated by the Corporation Resolutions, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments, the Transaction Ground Lease Assignments, and this Purchase Contract to have been performed or consummated at or prior to the Date of Closing.
(iii) The execution and delivery of the Series 2020 Certificates, this Purchase Contract, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments and the adoption of the Corporation Resolutions, and compliance with the obligations on the Corporation's part contained herein and therein, will not conflict with or constitute a material breach of or material default under any federal or Florida constitutional provisions, law, administrative regulations, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Corporation is a party or to which the Corporation or any of its properties or other assets is otherwise subject, nor will any such execution, delivery, adoption, implementation or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or other assets of the Corporation under the terms of any such provision, law, regulation, document or instrument, except as provided or permitted by this
15 Appendix to page 107 141 Purchase Contract, the Series 2020 Certificates, the Transaction Lease Agreements, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments.
(iv) All approvals, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Corporation of its obligations under this Purchase Contract, the Series 2020 Trust Agreements, the Series 2020 Certificates, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments have been, or prior to the Closing will have been, duly obtained; provided, however, that this representation and warranty does not apply to such approvals, consents and orders as may be required under the "blue sky" or securities laws of any state in connection with the offering and sale of the Series 2020 Certificates.
(v) The information contained in the Preliminary Offering Statement relating to the Corporation was and is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that no opinion is expressed with respect to the information contained therein relating to DTC or its book-entry only system and the Insurer and its Policies).
(vi) Except as described in the Preliminary Offering Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, governmental agency or public board or body, pending or, to the best knowledge of the Corporation, threatened against the Corporation: (A) which may affect the existence of the Corporation or the titles or rights of their officers to their respective offices; (B) which may affect or which seeks to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 2020 Certificates, or the collection or payment of the Lease Payments or assignment thereof to make payments on the Series 2020 Certificates and to make other payments under the Transaction Lease Agreements; (C) which in any way contests or affects the validity or enforceability of the Series 2020 Certificates, the Corporation Resolutions, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments or any of them; (D) which would cause the Interest Component of Basic Rent Payments to be included in the federal gross income of the holders of the Series 2020 Certificates; or (E) which contests in any way the completeness or accuracy of the Preliminary Offering Statement or the Offering Statement or which contests the powers of the Corporation or any authority or proceedings for the issuance, sale or delivery of the Series 2020 Certificates, or the due execution and
16 Appendix to page 107 142 delivery of this Purchase Contract, the Transaction Lease Agreements, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments or any of them; nor, to the best knowledge of the Corporation, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Series 2020 Certificates, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments, or any of them, or this Purchase Contract.
(vii) The Corporation will furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the Underwriters as the Underwriters may reasonably request in order to qualify the Series 2020 Certificates for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate, and to determine the eligibility of the Series 2020 Certificates for investment under the laws of such states and other jurisdictions, and will use its best reasonable efforts to continue such qualifications in effect so long as required for the initial distribution of the Series 2020 Certificates; provided that the Corporation shall not be obligated to qualify to do business, pay any fee or to take any action that would subject it to general service of process in any state where it is not now so subject.
(viii) If between the date of this Purchase Contract and until the earlier of (A) ninety (90) days from the end of the "underwriting period" (as defined in the SEC Rule), or (B) the time when the Offering Statement is available to any person from a nationally recognized repository, but in no case less than twenty-five (25) days following the end of the underwriting period, the Corporation has knowledge which would or might cause the information contained in the Offering Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Corporation shall notify the Underwriters thereof, and if in the opinion of the Underwriters, such event requires the preparation and publication of a supplement or amendment to the Offering Statement, the Corporation shall cooperate with the Board and Underwriters in preparing a supplement or amendment to the Offering Statement, in such form and manner and at such time or times as may be reasonably called for by the Underwriters and the Board will, at its expense, furnish to the Underwriters a sufficient number of copies of such amendment or supplement to the Offering Statement.
6. The Closing. At 1:00 p.m., Eastern time, ______, 2020 (such date herein called the "Date of Closing"), or at such later time or on such later date as may be
17 Appendix to page 107 143 mutually agreed upon by the Board, the Trustee and the Underwriters, the Board shall cause the Trustee, subject to the terms and conditions hereof, to deliver the Series 2020 Certificates to the Underwriters through the offices of The Depository Trust Company ("DTC") in New York, New York in definitive form (all the Series 2020 Certificates to bear proper CUSIP numbers), duly executed and authenticated, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Underwriters shall accept such delivery and pay the purchase price of the Series 2020 Certificates as set forth in Paragraph 1 hereof in Federal funds to the order of the Trustee (such delivery of and payment for the Series 2020 Certificates herein called the "Closing"). The Closing shall occur at the offices of the Board in Panama City, Florida, or such other place as shall have been mutually agreed upon by the Board, the Corporation, the Trustee and the Underwriters. The Series 2020 Certificates shall be prepared and delivered as one fully registered certificate for each maturity thereof in the definitive form and as otherwise described in the Offering Statement and the Series 2020 Trust Agreements, and will be made available for inspection and checking by the Underwriters at the offices of DTC in New York, New York, or at such other place as shall be mutually agreed upon, not later than 10:00 a.m., New York time, on the business day prior to the Date of Closing.
7. Closing Conditions. The Underwriters are entering into this Purchase Contract in reliance upon the representations, warranties and agreements of the Board and the Corporation contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing, and upon the performance of the covenants and agreements herein, as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligation under this Purchase Contract to purchase, to accept delivery of and to pay for the Series 2020 Certificates shall be conditioned upon the performance of the covenants and agreements to be performed hereunder and under such other documents and instruments to be delivered at or prior to the Closing, and shall also be subject to the following additional conditions:
(a) The representations and warranties of the Board and the Corporation contained herein shall be true, complete and correct on the date hereof and on and as of the Date of Closing, as if made on the Date of Closing, and a certificate to that effect shall be delivered to the Underwriters by the Board and the Corporation at Closing.
(b) At the date of execution hereof and at the Closing, the Resolutions and the Corporation Resolutions shall have been duly approved and adopted by the Board and the Corporation, respectively, shall be in full force and effect, and shall not have been amended, modified or supplemented, except to the extent to which the Representative shall have given its prior written consent and there shall have been taken in connection therewith and in connection with the issuance of the Series 2020 Certificates all such action as, in the opinion of Nabors, Giblin & Nickerson, P.A., Counsel for the Underwriters, shall be necessary and appropriate in connection with the transactions contemplated hereby.
18 Appendix to page 107 144 (c) At the Closing, there will be no pending or threatened litigation or proceeding of any nature seeking to restrain or enjoin the issuance, sale or delivery of the Series 2020 Certificates, or the collection or application of the Basic Rent Payments to make payments on the Series 2020 Certificates or in any way contesting or affecting the validity or enforceability of the Series 2020 Certificates, the Resolutions, the Corporation Resolutions, this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments, the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Disclosure Agreement or the Transaction Ground Lease Assignments or contesting in any way the proceedings of the Board, the Corporation or the Trustee taken with respect thereto, or contesting in any way the due existence or powers of the Board, the Corporation or the Trustee or the title of any of the members or officials of the Board, the Corporation or the Trustee to their respective offices and the Underwriters will receive the certificates of the Board, the Corporation and the Trustee to the foregoing effect, or opinions of Counsel to the Board, the Corporation and the Trustee that any such litigation is without merit.
(d) There shall have been no material adverse change in the financial condition of the Board since June 30, 2019.
(e) At the Closing, the Underwriters shall receive all of the documents required by Sections 4.02 and 4.13 of the Master Trust Agreement, as applicable, and in addition, the following documents, each dated as of the Closing:
(i) The opinion of Bryant Miller Olive PA, Special Counsel, dated the Date of Closing, in substantially the form attached to the Offering Statement as Appendix "H";
(ii) An opinion of Special Counsel, addressed to the Underwriters and the Trustee, substantially to the effect that (1) the Underwriters and the Trustee may rely upon the opinion referred to in (i) above as though addressed to them; (2) prior to termination of the Transaction Lease Agreements, (A) the Series 2020 Certificates are not subject to the registration requirements of the Securities Act of 1933, as amended, and (B) the Series 2020 Trust Agreements are exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (3) with respect to information in the Offering Statement and based upon said firm's review of the Offering Statement, as Special Counsel, and without having undertaken to determine independently the accuracy or completeness of the contents of the Offering Statement, the information in the Offering Statement under the headings (unless otherwise noted, the term "headings" includes all subheadings under a heading) entitled "INTRODUCTION" (excluding the information regarding projects, lease terms and principal amount of outstanding certificates of participation with respect to other leases under the Master Lease, as to which no opinion need be expressed), "AUTHORIZATION AND PURPOSE," "THE 2020 CERTIFICATES OF PARTICIPATION," "SECURITY FOR THE
19 Appendix to page 107 145 CERTIFICATES" and "THE MASTER LEASE PROGRAM"] (excluding any financial, statistical and demographic information and information regarding DTC and its book-entry only system of registration and the Insurer and its Policies), insofar as the same purport to describe the Series 2020 Certificates, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Transaction Lease Agreements, the Transaction Lease Assignments, the Escrow Deposit Agreement and the Transaction Ground Lease Assignments to the extent indicated therein are accurate summaries of the provisions purported to be summarized and that they have also reviewed the information contained in the Offering Statement under the section captioned "TAX EXEMPTION" and believe that such information is accurate; and (4) the Refunded Certificates have been defeased in accordance with the Master Trust Agreement .
(iii) The opinion(s) of Hand Arendall Harrison Sale, Counsel to the School Board and the Corporation, addressed to the School Board, the Underwriters, the Corporation[, the Insurer] and the Trustee (except for the opinions required by Sections 7(e)(iii)(4) and (12) hereof which shall be addressed solely to the Underwriters), substantially to the effect that: (1) the School Board is a body corporate and politic and the governing body of the District, duly organized and validly existing under the Constitution and laws of the State of Florida with full power and authority to adopt the Resolutions and to acquire, construct and lease- purchase the Series 2020 Project and refund the Refunded Certificates and enter into this Purchase Contract, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Disclosure Agreement, the Escrow Deposit Agreement and the Transaction Ground Leases (collectively, the "School Board Documents"); (2) the School Board Documents have been duly authorized, executed and delivered by the School Board and constitute legal, valid and binding agreements of the School Board enforceable in accordance with their terms except to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency or other laws affecting creditors' or tenants' rights generally and the application of equitable principles; (3) the School Board has duly approved, authorized, executed and delivered the Preliminary Offering Statement and the Offering Statement and the distribution thereof; (4) the information in the Preliminary Offering Statement and the Offering Statement as to legal matters relating to the School Board, the District, the Series 2020 Certificates, and the School Board Documents are correct in all material respects and do not omit any statement which, in their opinion, should be included or referred to therein (5) to the best of their knowledge the School Board is not in material breach of or material default under any agreement or applicable constitutional provision, law or administrative regulation of the State of Florida or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, material resolution, material agreement or other material instrument to which the School Board is a party or to which the School Board or any of its property or assets
20 Appendix to page 107 146 is otherwise subject, and no event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and the execution and delivery of the School Board Documents and the adoption of the Resolutions and compliance with the provisions on the School Board's part contained herein or therein, will not conflict with or constitute a material breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the School Board is a party or to which the School Board or any of its property or assets is otherwise subject, and any such execution, delivery, adoption or compliance will not result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the School Board under the terms of any such law, regulation or instrument, except as expressly provided by the Series 2020 Certificates, the Resolutions and the School Board Documents; (6) the Resolutions have been duly and lawfully adopted by the School Board, are in full force and effect and have not been altered, amended or repealed; (7) to the best of its knowledge, and except as otherwise disclosed in the Offering Statement under the caption "LITIGATION," there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body, pending or threatened against or affecting the School Board, nor is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would have a materially adverse effect upon the transactions contemplated by the Offering Statement or the validity of the Series 2020 Certificates, the Resolutions or the School Board Documents; (8) all authorizations, consents, approvals and reviews of governmental bodies or regulatory authorities then required for the School Board's adoption, execution or performance of its obligations under the Resolutions and the School Board Documents have been obtained or effected, and they have no reason to believe that the School Board will be unable to obtain or effect any such additional authorization, consent, approval or review that may be required in the future for performance of any of them by the School Board; (9) to the best of their knowledge, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body, pending or threatened against or affecting the Corporation, nor is there is any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would have a materially adverse effect upon the transactions contemplated by the Offering Statement or the validity of the Series 2020 Certificates or the School Board Documents; (10) the Corporation is a not-for-profit corporation duly incorporated and organized, validly existing and in good standing, under the laws of the State of Florida; (11) the Corporation Resolutions have been duly adopted and this Purchase Contract, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases and the Transaction Lease Assignments ( collectively, the "Corporation
21 Appendix to page 107 147 Documents") have each been duly authorized, executed and delivered by the Corporation and, assuming due authorization, execution and delivery by the other parties hereto and thereto, each constitutes a legal, valid, and binding agreement of the Corporation enforceable in accordance with its terms except to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally and the application of equitable principles; (12) the information in the Preliminary Offering Statement and the Offering Statement relating to the Corporation is accurate in all material respects and does not contain any untrue statement of a material fact or omit any material statement necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; (13) neither the adoption of the Corporation Resolutions nor the execution and delivery of the Corporation Documents and compliance with the provisions on the Corporation's part contained herein or therein, will not conflict with or constitute a material breach of or default under any agreement or other instrument to which the Corporation is a party or to which the Corporation or any of its property or assets is otherwise subject; and (14) all authorizations, consents, approvals and reviews of governmental bodies or regulatory authorities then required for the Corporation's adoption, execution or performance of its obligations under the Corporation Documents have been obtained or effected and, they have no reason to believe that the Corporation will be unable to obtain or effect any such additional authorization, consent, approval or review that may be required in the future for performance of any of them by the Corporation.
(iv) A certificate, dated the Date of Closing, signed by the Chairman of the Board and the Superintendent, or other appropriate officials satisfactory to the Underwriters, to the effect that, to the best knowledge of each of them: (A) the representations of the Board herein are true and correct in all material respects as of the Date of Closing; (B) the Board has performed all obligations to be performed and has satisfied all conditions on its part to be observed or satisfied under the Resolutions and the School Board Documents, as of the Date of Closing; (C) except as disclosed in the Offering Statement, there is no litigation of which either of them have notice, and to the best knowledge of each of them no litigation is pending or threatened (1) to restrain or enjoin the issuance or delivery of any of the Series 2020 Certificates, (2) in any way contesting or affecting any authority for the issuance of the Series 2020 Certificates or the validity of the Series 2020 Certificates, the Resolutions and the School Board Documents, (3) in any way contesting the corporate existence or powers of the Board, (4) to restrain or enjoin the collection of the Basic Rent Payments or the application thereof to make the payments on the Series 2020 Certificates, (5) which may result in any material adverse change in the business, properties, assets and the financial condition of the Board taken as a whole, or (6) asserting that the Offering Statement contains any untrue statement of a material fact or omits any material fact necessary to make the statements therein,
22 Appendix to page 107 148 in light of the circumstances under which they were made, not misleading; (D) since June 30, 2019, no material adverse change has occurred in the financial position or results of operations of the Board except as set forth in or contemplated by the Offering Statement, and the Board has not incurred any material liabilities other than in the ordinary course of business or as set forth in or contemplated by the Offering Statement; and (E) the Offering Statement did not as of its date, and does not as of the Date of Closing contain any untrue statement of a material fact or omit to state a material fact required to be included therein or necessary in order to make the statements contained therein, in light of the circumstances in which they were made, not misleading (provided, however, that no opinion need be expressed with respect to the information contained therein relating to DTC or its book-entry only system and the Insurer and its Policies).
(v) A certificate, dated the Date of Closing, signed by the President and Secretary of the Corporation or other appropriate officials satisfactory to the Underwriters, to the effect that, to the best of their knowledge: (A) the representations of the Corporation herein are true and correct in all material respects as of the Date of Closing; (B) the Corporation has performed all obligations to be performed and has satisfied all conditions on its part to be observed or satisfied under the Corporation Documents as of the Date of Closing; (C) except as disclosed in the Offering Statement, there is no litigation of which they have notice, and to the best of their knowledge, no litigation is pending or threatened (1) to restrain or enjoin the issuance or delivery of any of the Series 2020 Certificates, (2) in any way contesting or affecting any authority for the issuance of the Series 2020 Certificates or the validity of the Series 2020 Certificates or the Corporation Documents, (3) in any way contesting the corporate existence or powers of the Corporation, (4) to restrain or enjoin the collection of the Basic Lease Payments or the application thereof to make Certificate Payments, or (5) asserting that the Offering Statement contains any untrue statement of a material fact relating to the Corporation or omits any material fact relating to the Corporation necessary to make the statements therein relating to the Corporation, in light of the circumstances under which they were made, not misleading; and (D) the Corporation has not incurred any material liabilities other than in the ordinary course of business or as set forth in or contemplated by the Offering Statement.
(vi) An opinion or opinions dated the Date of Closing and addressed to the Board and the Underwriters of ______, as counsel to the Trustee, in its capacity as Trustee and Escrow Agent, to the effect that: (A) the Trustee is a state banking corporation, validly existing and in good standing under the laws of the State of Mississippi; (B) the Trustee is duly authorized to execute and deliver and to perform all of its obligations under the Series 2020 Trust Agreements, the Series 2020 Certificates, the Escrow Deposit Agreement, the Transaction Lease Assignments and the Transaction Ground Lease Assignments; (C) the execution and delivery of
23 Appendix to page 107 149 and performance by the Trustee of its obligations under the Series 2020 Trust Agreements, the Series 2020 Certificates, the Escrow Deposit Agreement, the Transaction Lease Assignments and the Transaction Ground Lease Assignments are within the trust powers of the Trustee; (D) the Trustee has the legal power and authority to execute and deliver the Series 2020 Certificates and the Series 2020 Certificates have been duly executed, authenticated and delivered in accordance with the Series 2020 Trust Agreements; and (E) the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Transaction Lease Assignments and the Transaction Ground Lease Assignments have each been duly authorized, executed and delivered by the Trustee, and each constitutes the legal, valid and binding obligation of the Trustee enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency or similar laws affecting the rights of creditors generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(vii) A certificate dated the Date of Closing, signed by an authorized officer of the Trustee to the effect that: (A) the Trustee is a state banking corporation duly organized and in good standing under the laws of the State of Mississippi; (B) the Trustee has full corporate power, authority and legal right to execute and deliver, and perform its obligations under the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Transaction Lease Assignments, the Series 2020 Certificates and the Transaction Ground Lease Assignments and has taken any and all actions and has obtained any and all consents and approvals required in connection with the foregoing; (C) the execution and delivery of the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Series 2020 Certificates, the Transaction Lease Assignments and the Transaction Ground Lease Assignments and all actions necessary or appropriate to carry out and consummate the transactions contemplated hereby and thereby, are within the trust powers of the Trustee; (D) the execution and delivery of, and the performance under each of the foregoing will not conflict with, violate or result in a breach of or constitute a default under the Trustee's charter or bylaws or a material default under any indenture, agreement or other instrument by which the Trustee or any of its properties may be bound or any material constitutional or statutory provision or order, rule, regulation, decree or ordinance of any federal or state court, government or governmental body having jurisdiction over the Trustee or any of its property and by which the Trustee or any of its property may be bound; (E) there is no litigation, proceeding or investigation relating to the Trustee before or by any court, public board or body pending or, to the knowledge of the Trustee, threatened against or affecting the Trustee, challenging the validity of, or in which an unfavorable decision, ruling or finding would materially adversely affect the Series 2020 Certificates, the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Transaction Lease Assignments or the Transaction Ground Lease Assignments; (F) the Series 2020
24 Appendix to page 107 150 Certificates have been duly authenticated, executed and delivered by the Trustee in accordance with the Series 2020 Trust Agreements; and (G) the Trustee has performed all obligations to be performed and has satisfied all conditions on its part to be observed or satisfied as a precondition to the effectiveness of the Transaction Lease Assignments, the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Series 2020 Certificates and the Transaction Ground Lease Assignments at or prior to the Closing.
(viii) An opinion, dated the Date of Closing and addressed to the Underwriters, of Nabors, Giblin & Nickerson, P.A., counsel for the Underwriters, substantially to the effect that (A) prior to termination of the Transaction Lease Agreements, the Series 2020 Certificates are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Series 2020 Trust Agreements are exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (B) based upon their participation and their review of the Preliminary Offering Statement and Offering Statement as counsel for the Underwriters and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Offering Statement and Offering Statement, nothing has come to their attention causing them to believe that the Preliminary Offering Statement, as of its date, and Offering Statement, as of its date and as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except for the financial and statistical information contained in the Preliminary Offering Statement and Offering Statement and the information related to DTC or its book-entry only system of registration, the Insurer and its Policies and the information and statements provided in Appendices thereto, as to all of which no view need be expressed); and (C) the Disclosure Agreement, together with the Offering Statement and Purchase Contract, when delivered in connection with the Series 2020 Certificates, will satisfy the requirements contained in the SEC Rule for an undertaking for the benefit of the owners of the Series 2020 Certificates to provide information at the times and in the manner required by said SEC Rule.
(ix) Evidence satisfactory to the Underwriters that [(a) S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S&P") expects to assign a rating of "AA" to the Series 2020 Certificates based on the issuance of the Policies, and (b) Moody's Investors Service ("Moody's") has issued a rating of "___" to the Series 2020 Certificates and that such rating is in effect on the Date of Closing.
[(x) An opinion, dated the Date of Closing, and addressed to the School Board, the Corporation, the Trustee and the Underwriters from counsel for the
25 Appendix to page 107 151 Insurer, substantially to the effect that: (a) the Insurer is a stock insurance company, duly organized and validly existing under the laws of the State of New York and duly qualified to conduct an insurance business in the State of Florida; (b) the Insurer has full corporate power and authority to execute and deliver the Policies and the Policies have been duly authorized, executed and delivered by the Insurer and constitutes the legal, valid and binding obligation of the Insurer enforceable in accordance with its terms except to the extent that the enforceability (but not the validity) of such obligation may be limited by any applicable bankruptcy, insolvency, liquidation, rehabilitation or other similar law or enactment now or hereafter enacted affecting the enforcement of creditors' rights; (c) proceedings legally required for the issuance of the Policies have been taken by the Insurer and licenses, orders, consents or other authorizations or approvals of any governmental boards or bodies legally required for the enforceability of the Policies have been obtained; and proceedings not taken and any licenses, authorizations or approvals not obtained are not material to the enforceability of the Policies; and (d) the statements contained in the Offering Statement under the heading ["BOND INSURANCE,"] insofar as such statements constitute summaries of the matters referred to therein, accurately reflect and fairly present the information purported to be shown and, insofar as such statements describe the Insurer, fairly and accurately describe the Insurer.]
(xi) Request and Authorization Certificates to the Trustee from the Corporation to execute and deliver the Series 2020 Certificates.
[(xii) Receipt of the Policies from the Insurer.]
(xiii) Articles of Incorporation, Bylaws, Good Standing Certificate and authorizing resolution of the Corporation.
(xvi) Evidence satisfactory to the Underwriters that a contract for architectural and design services or for construction management services for the Series 2020 Project was entered into by the School Board prior to July 1, 2017;
(xv) A copy of the Transaction Lease Agreements, the Transaction Ground Leases, the Series 2020 Trust Agreements, the Transaction Lease Assignments, the Disclosure Agreement, the Escrow Deposit Agreement, and the Transaction Ground Lease Assignments, fully executed by the respective parties hereto.
(xvi) A Certificate of an authorized representative of the Board deeming the Preliminary Offering Statement "final" as of its date for purposes of the SEC Rule, except for "permitted omissions.
(xvii) Verification Report of ______.
26 Appendix to page 107 152 (xviii) Such additional legal opinions, certificates, instruments, approvals and other documents as the Underwriters may reasonably require to evidence the truth and accuracy, as of the date hereof and as of the Date of Closing, of the representations and warranties contained herein and of the statements and information contained in the Offering Statement and the due performance or satisfaction on or prior to the Date of Closing of all the agreements then to be performed and conditions then to be satisfied by the Board or the Trustee.
All of the evidence, opinions, letters, certificates, instruments and other documents, mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in the form specified herein or are otherwise in form and substance satisfactory to the Underwriters and its counsel. Acceptance of delivery of the Series 2020 Certificates shall be deemed approval of such form and substance by the Underwriters and their Counsel.
If the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Series 2020 Certificates contained in this Purchase Contract are not satisfied, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Series 2020 Certificates shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor the Board, the Corporation or the Trustee shall be under any further obligation hereunder, except that the respective obligations of the Board and the Underwriters set forth in Section 9 hereof shall continue in full force and effect and the Good Faith Deposit specified in Section 4 hereof shall be returned to the Representative.
8. Termination. The Underwriters may terminate this Purchase Contract by notice to the Board and the Corporation in the event that between the date hereof and the Closing (a) legislation shall be enacted by the Congress of the United States or adopted by either House thereof or a decision by a court of the United States or the Tax Court of the United States shall be rendered or a ruling, regulation or official statement by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made, with respect to federal taxation of revenues or other income of the general character expected to be derived under the Transaction Lease Agreements from the Board or upon interest received on securities of the general character of the Series 2020 Certificates or which would have the effect of changing, directly or indirectly, the federal income tax consequences of receipt of interest on securities of the general character of the Series 2020 Certificates in the hands of the holders thereof, which in the reasonable opinion of the Underwriters would materially adversely affect the market price of the Series 2020 Certificates; (b) the United States shall become engaged in hostilities that have resulted in a declaration of war or, any other national or international emergency, calamity or hostilities relating to the effective operation of government or the financial community shall have occurred or escalated, which, in the reasonable opinion of the Underwriters, materially adversely affects the market price of the Series 2020
27 Appendix to page 107 153 Certificates; (c) there shall be in force a general suspension of trading on the New York Stock Exchange as the result of an event affecting the national economy; (d) a general banking moratorium shall have been established by federal, New York or Florida authorities; (e) an event shall occur which makes untrue or incorrect in any material respect, as of the time of such event, any statement or information contained in the Offering Statement or which is not reflected in the Offering Statement, but should be reflected therein, in order to make the statements contained therein not misleading in any material respect and, in either such event, the School Board refuses to permit the Offering Statement to be supplemented to supply such statement or information, or the effect of the Offering Statement as so supplemented, is in the reasonable judgment of the Underwriters, materially adversely affects the market for the Series 2020 Certificates or the sale, at the contemplated offering prices (or yields), by the Underwriters of the Series 2020 Certificates; (f) legislation shall be enacted, or a decision by a court of the United States shall be rendered, that, in the reasonable opinion of counsel for the Underwriters, has the effect of requiring the contemplated distribution of the Series 2020 Certificates or any action or instrument pertaining thereto to be registered under the Securities Act of 1933, as amended, or under Florida law, or of requiring the Series 2020 Trust Agreements, or any instrument or act pertaining thereto to be qualified under the Trust Indenture Act of 1939, as amended; (g) there shall have been any materially adverse change in the affairs of the Board that, in the reasonable judgment of the Underwriters, materially and adversely affects the market price or marketability of the Series 2020 Certificates or the ability of the Underwriters to enforce contracts for the sale of the Series 2020 Certificates and (h) a reduction or withdrawal by Moody's Investors Service of its rating on the Series 2020 Certificates from "___." Upon any such termination, the Board shall immediately return to the Representative the Good Faith Check delivered pursuant to Section 4 hereof.
9. Expenses.
(a) Except as provided in (b) below, the Underwriters shall be under no obligation to pay, and the Board shall pay, such expenses incident to the issuance of the Series 2020 Certificates and the performance of the Board's obligations hereunder, including, but not limited to the following expenses: (i) the cost of preparing and printing or other reproduction of the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments, the Transaction Ground Lease Assignments, the Disclosure Agreement, the Escrow Deposit Agreement and the Series 2020 Trust Agreements; (ii) the cost of preparing and printing the Series 2020 Certificates, the Preliminary Offering Statement and the Offering Statement; (iii) the fees and disbursements of the Trustee; (iv) the fees and disbursements of Special Counsel, Disclosure Counsel and Counsel to the Board and the Corporation; (v) the fees and disbursements of the financial advisor to the Board; (vi) the fees relating to the ratings on the Series 2020 Certificates; and (vii) the fees and disbursements of any experts, accountants, consultants or advisors retained by the Board or the Corporation. The Board shall be solely responsible for and shall pay for any expenses incurred by the Underwriters
28 Appendix to page 107 154 on behalf of the Board's employees and representatives which are incidental to implementing this Purchase Contract including, but not limited to, meals, transportation, lodging, and entertainment of those employees and representatives.
(b) The Underwriters shall pay expenses related to the initial purchase and sale of the Series 2020 Certificates as follows (certain of which may be included in the expense component of the underwriting discount): (i) all advertising expenses in connection with the public offering of the Series 2020 Certificates; (ii) the fees and disbursements of Nabors, Giblin & Nickerson, P.A., Counsel to the Underwriters; (iii) the costs of "blue sky;" (iv) the costs of preparing this Purchase Contract, and (v) all other expenses incurred by them in connection with the public offering of the Series 2020 Certificates.
10. Notices. Any notice or other communication to be given to the Board or the Corporation under this Purchase Contract may be given by delivering the same in writing to the address set forth above to the attention of the Superintendent and any notice or other communications to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to Raymond James & Associates, Inc. at 880 Carillon Parkway, St. Petersburg, Florida 33716 to the attention of Rick W. Patterson, Managing Director - Public Finance.
11. Parties in Interest.
(a) This Purchase Contract is made solely for the benefit of the Board, the Corporation and the Underwriters (including the successors or assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the representations, warranties and agreements of the Board contained in this Purchase Contract shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriters; (ii) delivery of and payment for the Series 2020 Certificates pursuant to this Purchase Contract; or (iii) any termination of this Purchase Contract, but only to the extent provided by Sections 7 or 8 hereof.
(b) No covenant, stipulation, obligation or agreement contained in this Purchase Contract shall be deemed to be a covenant, stipulation, obligation or agreement of any member, agent or employee of the Board or the Corporation in his or her individual capacity and neither the members of the Board or the Corporation nor any official executing this Purchase Contract shall be liable personally under this Purchase Contract or be subject to any personal liability or accountability by reason of the execution hereof.
12. Effectiveness. This Purchase Contract shall become effective upon the execution of the acceptance hereof on behalf of the Board and the Corporation by their duly authorized officers, and shall be valid and enforceable at the time of such acceptance.
13. Counterparts. This Purchase Contract may be executed in several counterparts, which together shall constitute one and the same instrument.
29 Appendix to page 107 155 14. Florida Law Governs. The validity, interpretation and performance of this Purchase Contract shall be governed by the laws of the State of Florida.
15. Entire Agreement. This Purchase Contract when accepted by the Board and the Corporation in writing as heretofore specified shall constitute the entire agreement of the parties hereto with respect to the offer and sale of the Series 2020 Certificates and the transactions related thereto and supersedes all prior agreements and understandings between the parties with respect to the issuance and sale of the Series 2020 Certificates. No modification, alteration, supplement or amendment to this Purchase Contract shall be binding upon any of the parties hereto until such modification, alteration or amendment is reduced to writing and executed by all of the parties hereto.
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30 Appendix to page 107 156 16. Headings. The headings of the Sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be part hereof.
Very truly yours,
RAYMOND JAMES & ASSOCIATES., as Representative
By: Managing Director - Public Finance
Accepted as of the date hereof:
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA
By: Chairman
Attest:
By: Secretary/Superintendent of Schools
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION
By: President
By: Secretary
31 Appendix to page 107 157 APPENDIX A
$______$______CERTIFICATES OF REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2020A PARTICIPATION, SERIES 2020B (School Board of Bay County, Florida (School Board of Bay County, Florida Master Lease Program, Series 2020A) Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Evidencing an Undivided Proportionate Interest of Owners Interest of Owners thereof in Basic Rent Payments to be thereof in Basic Rent Payments to be made under a made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by The School Board of Bay County, The School Board of Bay County, Florida Florida
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES AND YIELDS
$______Series 2020A Certificates
Maturity Principal Interest (July 1) Amount Rate Price Yield
$______Series 2020B Certificates
Maturity Principal Interest (July 1) Amount Rate Price Yield
A-1 Appendix to page 107 158 APPENDIX B
$______$______CERTIFICATES OF REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2020A PARTICIPATION, SERIES 2020B (School Board of Bay County, Florida (School Board of Bay County, Florida Master Lease Program, Series 2020A) Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Evidencing an Undivided Proportionate Interest of Owners Interest of Owners thereof in Basic Rent Payments to be thereof in Basic Rent Payments to be made under a made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by The School Board of Bay County, The School Board of Bay County, Florida Florida
Optional Prepayment of Series 2020A Certificates
The Series 2020A Certificates maturing on or before July 1, 20__ shall not be subject to prepayment at the option of the School Board.
The Series 2020A Certificates maturing on or after July 1, 20__ shall be subject to prepayment from prepayments of Basic Rent made by the School Board pursuant to the Series 2020A Lease Agreement, in whole or in part on July 1, 20__ or any date thereafter, and if in part, in such order of maturities as may be designated by the School Board, or if not so designated, in the inverse order of maturities, and by lot within a maturity in such manner as may be designated by the Trustee, at a Prepayment Price of 100% of the principal amount of the Series 2020A Certificates to be prepaid, plus accrued and unpaid interest thereon to the prepayment date.
No Extraordinary Prepayment of Series 2020A Certificates from Insurance or Condemnation Proceeds
The Series 2020A Certificates are not subject to extraordinary prepayment from the Net Proceeds of insurance or condemnation relating to the Series 2020A Project.
No Optional Prepayment of Series 2020B Certificates
The Series 2020B Certificates shall not be subject to prepayment at the option of the School Board.
B-1 Appendix to page 107 159 No Extraordinary Prepayment of Series 2020B Certificates from Insurance or Condemnation Proceeds
The Series 2020B Certificates are not subject to extraordinary prepayment from the Net Proceeds of insurance or condemnation relating to the Series 1999 Project.
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B-2 Appendix to page 107 160 APPENDIX C
DISCLOSURE STATEMENT
The undersigned, Raymond James & Associates, Inc. (the "Representative"), as representative of itself and PNC Capital Markets LLC (collectively, the "Underwriters") proposes to negotiate with The School Board of Bay County, Florida, for the sale of $______aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) (the "Series 2020A Certificates"), and $______Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) (the "Series 2020B Certificates," and together with the Series 2020A Certificates, the "Series 2020 Certificates) to be completed on this date. Prior to the award of the Series 2020 Certificates, the following information is hereby furnished to the Board:
1. Set forth is an itemized list of the nature and estimated amounts of expenses to be incurred by the Underwriters in connection with the issuance of the Series 2020 Certificates:
Per $1,000 Total Underwriters' Counsel Fee I-deal Bookrunning I-deal Wire Charge I-deal Order Monitor CUSIP DTC Blue Sky New York Filing Fee Out of Pocket
TOTAL
2. Set forth below are the names, addresses and estimated amounts of compensation of all "finders," as defined in Section 218.386, Florida Statutes, as amended, in connection with the issuance of the Series 2020 Certificates:
NONE
3. The amount of the underwriting spread expected to be realized by the Underwriters with respect to the Series 2020 Certificates is $______($______per $1,000), which includes the following:
C-1 Appendix to page 107 161 Total Per $1,000 Average Take-Down Underwriters' Expenses
TOTAL
4. The management fee to be charged by the Underwriters is $0.00 ($0.00 per $1,000).
5. Set forth below are all fees, bonuses and other compensation to be paid by the Underwriters in connection with the Series 2020 Certificates to any person not regularly employed or retained by them.
NONE
6. The name and address of the Underwriters are as follows:
Raymond James & Associates, Inc. 880 Carillon Parkway St. Petersburg, Florida 33716
PNC Capital Markets LLC 201 North Franklin Street, Suite 1500 Tampa, Florida 33602
We understand that you do not require additional disclosure information pursuant to Section 218.385(6), Florida Statutes, as amended.
IN WITNESS WHEREOF, the undersigned has executed this Disclosure Statement this __ day of ______, 2020.
RAYMOND JAMES & ASSOCIATES INC., as Representative
By: Managing Director - Public Finance
C-2 Appendix to page 107 162 APPENDIX D
TRUTH-IN-BONDING STATEMENT
______, 2020
The School Board of Bay County, Florida Panama City, Florida
Bay County Educational Facilities Finance Corporation Panama City, Florida
Re: $______Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) Evidencing an Undivided Proportionate Interest of the Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida, and;
$______Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) Evidencing anUndivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease Purchase Agreement by The School Board of Bay County, Florida
Ladies and Gentlemen:
In connection with the proposed issuance by The School Board of Bay County, Florida (the " Board") of the above-captioned Certificates of Participation Series 2020A (the "Series 2020A Certificates") and Refunding Certificates of Participation 2020B (the "Series 2020B Certificates," and together with the Series 2020A Certificates, the "Series 2020 Certificates") Raymond James & Associates, Inc., as representative of the Underwriters (the "Representative"), is underwriting a public offering of the Series 2020 Certificates pursuant to a Certificate Purchase Contract (the "Purchase Contract"), dated ______, 2020, among the Underwriters, the Bay County Educational Facilities Finance Corporation (the "Corporation") and the Board.
The purpose of this letter is to furnish, pursuant to the provisions of Section 218.385(2) and (3), Florida Statutes, the truth-in-bonding statement required thereby, as follows:
D-1 Appendix to page 107 163 (1) The Board is proposing to cause the issuance of (i) $______of the Series 2020A Certificates for the purpose of financing the acquisition, construction, installation, equipping and lease-purchase of certain education facilities and paying certain costs of issuance with respect to the Series 2020A Certificates as more fully described in the Purchase Contract and (ii) $______of the Series 2020B Certificates for the purpose of refunding all of the outstanding Certificates of Participation, Series 2010A, as more fully described in the Purchase Contract. This debt or obligation is expected to be repaid over a period of approximately ____ years, at an approximate all-inclusive true interest cost rate of ______%, total interest paid over the life of the debt or obligation will be $______.
(2) The Series 2020 Certificates are expected to be paid solely from the Basic Rent Payments payable under the Transaction Lease Agreements (as defined in the Purchase Contract) such Basic Rent Payments being subject to annual appropriation by the Board, and other funds provided therefor in the Series 2020 Trust Agreements (as defined in the Purchase Contract). The Series 2020 Certificates are not secured by a pledge of the faith and credit of the Corporation, of the Board or of the State of Florida or of any political subdivision thereof. Approving the Series 2020 Certificates and entering into the Transaction Lease Agreements will result in approximately $______(representing the average annual lease payments with respect to the Series 2020 Certificates) of such funds of the Board not being available for other services or purposes of the Board each year the Transaction Lease Agreements are in effect, but in no event for longer than ____ years.
The foregoing is provided for information purposes only and shall not affect or control the actual terms and conditions of the Series 2020 Certificates.
Sincerely,
RAYMOND JAMES & ASSOCIATES, INC., as Representative
By: Managing Director - Public Finance
D-2 Appendix to page 107 164
APPENDIX E
ISSUE PRICE CERTIFICATE OF THE UNDERWRITER
$______$______CERTIFICATES OF REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2020A PARTICIPATION, SERIES 2020B (School Board of Bay County, Florida (School Board of Bay County, Florida Master Lease Program, Series 2020A) Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Evidencing an Undivided Proportionate Interest of Owners Interest of Owners thereof in Basic Rent Payments to be thereof in Basic Rent Payments to be made under a made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by The School Board of Bay County, The School Board of Bay County, Florida Florida
ISSUE PRICE CERTIFICATE The undersigned, on behalf of Raymond James & Associates, Inc. (the "Representative"), on behalf of itself and PNC Capital Markets LLC (together, the "Underwriting Group"), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations Certificates of Participation, Series 2020A (the "Series 2020A Certificates") and Refunding Certificates of Participation, Series 2020B (the "Series 2020B Certificates," and together with the Series 2020A Certificate, the "Certificates").
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity of the Certificates was sold to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities.
(a) The Underwriting Group offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Certificates is attached to this certificate as Schedule B.
E-1 Appendix to page 107 165
(b) As set forth in the Certificate Purchase Contract, the members of the Underwriting Group have agreed in writing that, (i) for each Maturity of the Hold- the-Offering-Price Maturities, they would neither offer nor sell any of the Certificates of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold-the-offering-price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. The Representative has not offered or sold any unsold Certificates of any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Certificates during the Holding Period. Nothing has come to the attention of the Representative that any of the Certificates have been sold at a price that is higher than the respective Initial Offering Price for that Maturity of the Certificates during the Holding Period.
3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Certificates listed in Schedule A hereto as the "General Rule Maturities."
(b) Hold-the-Offering-Price Maturities means those Maturities of the Certificates listed in Schedule A hereto as the "Hold-the-Offering-Price Maturities."
(c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (______, 2020), or (ii) the date on which the Underwriting Group has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the- Offering-Price Maturity.
(d) Issuer means The School Board of Bay County, Florida.
(e) Maturity means Certificates with the same credit and payment terms. Certificates with different maturity dates, or Certificates with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly.
E-2 Appendix to page 107 166
(g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Certificates. The Sale Date of the Certificates is ______, 2020.
(h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Certificates to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Certificates to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Certificates to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Representative’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Certificates, and by Bryant Miller Olive P.A. in connection with rendering its opinion that the interest on the Certificates is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the Issuer from time to time relating to the Certificates. The representations set forth herein are not necessarily based on personal knowledge and, in certain cases, the undersigned is relying on representations made by the other members of the Underwriting Group.
RAYMOND JAMES & ASSOCIATES, INC., as Representative
By: Managing Director - Public Finance Dated: ______, 2020
E-3 Appendix to page 107 167
SCHEDULE A SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
Series 2020A Certificates
General Rule Maturities
Maturity Principal Interest (July 1) Amount Rate Price Yield
Hold-The-Offering-Price Maturities
Maturity Principal Interest (July 1) Amount Rate Price Yield
E-4 Appendix to page 107 168
Series 2020B Certificates
General Rule Maturities
Maturity Principal Interest (July 1) Amount Rate Price Yield
Hold-The-Offering-Price Maturities
Maturity Principal Interest (July 1) Amount Rate Price Yield
E-5 Appendix to page 107 169
SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached)
E-6 Appendix to page 107 170 RESOLUTION NO. 2020-_____
A RESOLUTION OF THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, AUTHORIZING REFUNDING OF THE CERTIFICATES OF PARTICIPATION, SERIES 2010A AND THE ISSUANCE OF NOT TO EXCEED $12,000,000 AGGREGATE PRINCIPAL AMOUNT OF REFUNDING CERTIFICATES OF PARTICIPATION (SCHOOL BOARD OF BAY COUNTY, FLORIDA MASTER LEASE PROGRAM, SERIES 2020B), EVIDENCING AN UNDIVIDED PROPORTIONATE INTEREST OF OWNERS THEREOF IN BASIC RENT PAYMENTS TO BE MADE UNDER A MASTER LEASE- PURCHASE AGREEMENT BY THE SCHOOL BOARD OF BAY COUNTY, FLORIDA; AUTHORIZING THE EXECUTION AND DELIVERY OF A SECOND AMENDED AND RESTATED LEASE SCHEDULE NO. 1999 TO THE MASTER LEASE-PURCHASE AGREEMENT BETWEEN THE SCHOOL BOARD OF BAY COUNTY, FLORIDA AND THE BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION; AUTHORIZING THE EXECUTION AND DELIVERY OF THE SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT WITH HANCOCK WHITNEY BANK, AS SUCCESSOR TRUSTEE; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFERING STATEMENT WITH RESPECT TO SUCH CERTIFICATES OF PARTICIPATION; DELEGATING TO THE CHAIRMAN AND SUPERINTENDENT THE AUTHORITY TO EXECUTE AND DELIVER A CERTIFICATE PURCHASE CONTRACT RELATING TO THE DELEGATED NEGOTIATED SALE OF SUCH CERTIFICATES IN ACCORDANCE WITH THE PARAMETERS SET FORTH HEREIN; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT AND AN ESCROW DEPOSIT AGREEMENT; AUTHORIZING THE PURCHASE OF MUNICIPAL BOND INSURANCE; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, ACTING AS THE GOVERNING BODY OF THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA:
SECTION 1. DEFINITIONS. The following terms shall have the following meanings herein, unless the text otherwise expressly requires. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations.
“Act" shall mean Chapter 1001 through 1013, Florida Statutes, and other applicable provisions of law.
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Appendix 2 to page 107 1 "Board" means the School Board of Bay County, Florida, acting as the governing body of the District.
"Chairman" means the Chairman of the Board and, in his or her absence or unavailability, the Vice-Chairman or such other person as may be duly authorized to act on his or her behalf.
"Corporation" means the Bay County Educational Facilities Finance Corporation, a Florida not-for-profit corporation.
"District" means the School District of Bay County, Florida.
“Escrow Agent” means Hancock Whitney Bank.
“Escrow Deposit Agreement” means the Escrow Deposit Agreement between the Corporation, the Board and the Escrow Agent, relating to the refunding of the Refunded Certificates.
"Financial Advisor" means Ford & Associates, Inc., as financial advisor to the Board.
“Ground Lease Agreement” means the Ground Lease Agreement by and between the Board and the Corporation, dated as of November 1, 1994, as amended and supplemented.
"Lease Agreement" means the Master Lease-Purchase Agreement, dated as of November 1, 1994, between the Corporation and the Board, as amended and supplemented
"Master Trust Agreement" means the Master Trust Agreement, dated as of November 1, 1994, among the Corporation, the Board and the Trustee, as amended and supplemented.
“Refunded Certificates” means all or a portion of the outstanding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2010A), evidencing an undivided proportionate interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida.
“Second Amended and Restated Series 1999 Lease Agreement” means the Lease Agreement as supplemented by Amended Lease Schedule No. 1999 dated as of May 1, 2020, relating to the Series 2010A Certificates.
“Second Amended and Restated Lease Schedule No. 1999” means Second Amended and Restated Lease Schedule No. 1999, between the Board and the Corporation, reflecting the terms and provisions of the Series 2020B Certificates and the refunding of the Refunded Certificates.
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Appendix 2 to page 107 2 "Secretary" means the Superintendent of the District, who is the ex-officio Secretary of the Board and, in his or her absence or unavailability, any Deputy Superintendent or such other person as may be duly authorized to act on his or her behalf.
“Series 2010A Certificates” means the Refunded Certificates as originally issued.
“Series 1999 Project” means the educational facilities in Bay County, Florida previously refinanced with the proceeds of the Series 2010A Certificates.
“Series 2010A Assignment of Ground Lease Agreement” means the Series 2010A Assignment of Ground Lease Agreement, dated as of July 1, 2010, between the Corporation and the Trustee.
“Series 2010A Ground Lease Agreement” means the Series 2010A Ground Lease Agreement, dated as of July 1, 2010, between the Board and the Corporation, which pertains to the Series 1999 Project and the real property related thereto.
“Series 2010A Supplemental Trust Agreement” means the Series 2010A Supplemental Trust Agreement among the Corporation, the School Board and the Trustee, dated as of July 1, 2010, and relating to the Series 2010A Certificates.
“Series 2020B Assignment Agreement” means the Series 2020B Assignment Agreement relating to the Series 2020B Certificates, between the Corporation and the Trustee.
"Series 2020B Certificates" means the Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B), Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida, to be executed, authenticated and delivered by the Trustee under the Master Trust Agreement and the Series 2020B Supplemental Trust Agreement.
"Series 2020B Supplemental Trust Agreement" means the Series 2020B Supplemental Trust Agreement, among the Corporation, the Board and the Trustee and relating to the Series 2020B Certificates.
"Trustee" means Hancock Whitney Bank, successor trustee, and its successors, agents or assigns.
"Underwriters" means Raymond James & Associates, Inc. and PNC Capital Markets, LLC, and any additional underwriters listed in the Certificate Purchase Contract.
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Appendix 2 to page 107 3 SECTION 2. FINDINGS. It is hereby found and determined that:
(a) The Board has heretofore established a master lease-purchase program for the lease-purchase financing of various projects in accordance with the terms of the Lease Agreement and Master Trust Agreement and in connection therewith the Board has heretofore executed and delivered the Second Amended and Restated Series 1999 Lease Agreement pursuant to which the Board leased the Series 1999 Project from the Corporation.
(b) The Board has heretofore caused the Series 2010A Certificates to be executed, authenticated and delivered by the Trustee in connection with the Board’s leasing of the Series 1999 Project in accordance with the Series 2010A Supplemental Trust Agreement.
(c) Subject to the provisions of Section 13 hereof, the Board deems it in its best interests to restructure the Second Amended and Restated Series 1999 Lease Agreement to reflect the refunding of the Refunded Certificates with the proceeds of the Series 2020B Certificates.
(d) Subject to the provisions of Section 13 hereof, the Board has agreed with the Corporation to use the proceeds of the Series 2020B Certificates to refund the Refunded Certificates pursuant to the terms of the Series 2020B Supplemental Trust Agreement in order to restructure certain Lease Payments payable under the Second Amended and Restated Series 1999 Lease Agreement. Such proceeds shall be deposited into an irrevocable trust fund established pursuant to the Master Trust Agreement, or, if determined favorable by the Bond Counsel and the School Board Attorney, pursuant to an Escrow Deposit Agreement, and shall constitute the deposit of prepaid Basic Rent Payments under the Second Amended and Restated Series 1999 Lease Agreement by the Board.
(e) The deposit of the prepaid Basic Rent Payments in irrevocable trust shall be in an amount sufficient to pay the Refunded Certificates, as the same become due or are redeemed prior to maturity. The Second Amended and Restated Series 1999 Lease Agreement shall secure the payments of Supplemental Rent and the deficiency, if any, in the prepaid Basic Rent Payments on deposit in the irrevocable trust relating to the Refunded Certificates.
(f) In consideration of the deposit of such prepaid Basic Rent Payments with the Trustee or the Escrow Agent the Board agrees, subject to the provisions of Section 13, hereof, to enter into the Second Amended and Restated Lease Schedule No. 1999 whereby the Board will agree to make Basic Rent Payments sufficient to pay the principal of and interest on the Series 2020B Certificates.
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Appendix 2 to page 107 4 (g) The Board is authorized and empowered by the Act to enter into transactions such as those contemplated by this Resolution, the Second Amended and Restated Series 1999 Lease Agreement, the Master Trust Agreement, the Series 2020B Supplemental Trust Agreement, the Escrow Deposit Agreement and the Series 2010A Ground Lease Agreement, and to fully perform its obligations thereunder.
(h) The Board hereby finds, determines and declares that due to the recent volatility in the municipal bond market and the complexity of the transactions relating to the Series 2020B Certificates, including the refunding purposes thereof, that it is in the best interest of the Board that the Series 2020B Certificates be sold by a negotiated sale, allowing market entry at the most advantageous time, rather than at a specified advertised date, thereby obtaining the best possible price and interest rate for the Series 2020B Certificates.
(i) The Board has been advised by its Financial Advisor as to the market appropriateness of the Underwriters’ purchase proposal in light of current market levels and conditions and as to acceptance of the Certificate Purchase Contract pursuant to a delegated negotiated sale as provided herein.
(j) The Series 2020B Certificates shall be secured solely as provided in the Master Trust Agreement, the Series 2020B Supplemental Trust Agreement and the Second Amended and Restated Series 1999 Lease Agreement, it being understood that neither the Series 2020B Certificates nor the interest represented thereby shall be or constitute a general obligation of the Corporation, the District, the Board, Bay County or the State of Florida, or any political subdivision or agency thereof, a pledge of the faith and credit of the Corporation, the District, the Board, Bay County or the State of Florida, or any political subdivision or agency thereof, or a lien upon any property of or located within the boundaries of the District.
SECTION 3. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act and other applicable provisions of law.
SECTION 4. LEASE OF PREMISES. The land constituting the Premises (as defined in the Series 2010A Ground Lease Agreement) identified in Exhibit A attached to the Series 2010A Ground Lease Agreement and made a part hereof is hereby re-approved and affirmed for leasing to the Corporation as part of the Financing Program in accordance with the terms and provisions of the Series 2010A Ground Lease Agreement.
SECTION 5. AUTHORIZATION OF LEASE-PURCHASE OF THE SERIES 1999 PROJECT. The Board hereby reauthorizes and affirms the lease purchase of the Series 1999 Project in accordance with the terms of the Second Amended and Restated Series 1999 Lease Agreement.
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Appendix 2 to page 107 5 SECTION 6. APPROVAL OF SECOND AMENDED AND RESTATED LEASE SCHEDULE NO. 1999. The Board hereby authorizes and directs the Chairman to execute Second Amended and Restated Lease Schedule No. 1999, and the Secretary to attest the same under the seal of the Board, and to deliver Second Amended and Restated Lease Schedule No. 1999 to the Corporation for its execution. Second Amended and Restated Lease Schedule No. 1999 shall be in substantially the form attached hereto as Exhibit A, with such changes, amendments, modifications, omissions and additions as may be approved by such Chairman and in any event, including those changes necessary to reflect the final terms and details of the Series 2020B Certificates, including, without limitation, the schedule of Basic Rent Payments. Execution by the Chairman of Second Amended and Restated Lease Schedule No. 1999 shall be deemed to be conclusive evidence of approval of such changes. The authorization to execute and deliver Second Amended and Restated Lease Schedule No. 1999 is expressly conditioned upon compliance with the terms and conditions set forth in Section 13 hereof with respect to the execution, authentication and delivery of the Series 2020B Certificates.
SECTION 7. APPROVAL OF SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT. The Board hereby authorizes and directs the Chairman of the Board to execute the Series 2020B Supplemental Trust Agreement, and the Secretary to attest the same under the seal of the Board and to deliver the Series 2020B Supplemental Trust Agreement to the Corporation and the Trustee for their execution. The Series 2020B Supplemental Trust Agreement shall be in substantially the form attached hereto as Exhibit B, with such changes, amendments, modifications, omissions and additions as may be approved by said Chairman. Execution by the Chairman of the Series 2020B Supplemental Trust Agreement shall be deemed to be conclusive evidence of approval of such changes. The Board hereby approves the issuance of the Series 2020B Certificates pursuant to the terms provided in the Series 2020B Supplemental Trust Agreement.
SECTION 8. AUTHORIZATION OF REFUNDING OF REFUNDED CERTIFICATES; APPROVAL OF ESCROW DEPOSIT AGREEMENT. Subject to the provisions of Section 13 hereof, the Board hereby authorizes the refunding of the Refunded Certificates in accordance with the provisions hereof and the Series 2020B Supplemental Trust Agreement, Second Amended and Restated Series 1999 Lease Agreement and Escrow Deposit Agreement. In the event the Series 2020B Certificates are authorized for issuance and delivery in accordance with Section 13 hereof, the Chairman and Secretary are authorized to execute and deliver to the Trustee or the Escrow Agent such documents and instruments as shall, in the opinion of Special Counsel, Counsel to the Board and the Board’s Financial Advisor, be necessary to reflect and accomplish the refunding of the Refunded Certificates including, without limitation, agreements relating to the delivery of Refunding Securities (as defined in the Master Trust Agreement) in order to establish a more efficient escrow. The Escrow Deposit
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Appendix 2 to page 107 6 Agreement, if used, shall be in substantially the form recommended by Special Counsel in accordance with the Master Trust Agreement.
SECTION 9. CONSENT TO ASSIGNMENT. The Board hereby acknowledges and consents to the assignment by the Corporation to the Trustee of all of its rights, title and interest in and to Second Amended and Restated Lease Schedule No. 1999 by execution and delivery of the Series 2020B Assignment Agreement.
SECTION 10. TRUSTEE AND ESCROW AGENT. Hancock Whitney Bank, and its successors, agents or assigns, as successor Trustee, is hereby confirmed as Trustee in connection with the Series 2020B Certificates and is hereby designated as holder of the irrevocable trust to be established to refund the Refunded Certificates whether pursuant to the Master Trust Agreement or the Escrow Deposit Agreement.
SECTION 11. PRELIMINARY OFFERING STATEMENT. The distribution of a Preliminary Offering Statement relating to the Series 2020B Certificates in substantially the form attached hereto as Exhibit C, is hereby approved as to form and substance, with such changes as may be approved by the Chairman and Secretary of the Board. The Chairman and Secretary of the Board are hereby authorized to deem such Preliminary Offering Statement as “final” within the meaning of Rule 15c2-12 of the Securities and Exchange Commission, except for certain permitted omissions as provided in such rule. Execution by the Chairman of a certification deeming final the Preliminary Offering Statement shall be deemed to be conclusive evidence of approval of any changes thereto. The Preliminary Offering Statement may include the Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A), Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida, if recommended by the Financial Advisor.
SECTION 12. GENERAL AUTHORITY. The members of the Board, the Secretary and the officers, attorneys and other agents or employees of the District are hereby authorized to do all acts and things required of them by this Resolution or desirable or consistent with the requirements of this Resolution, the Second Amended and Restated Series 1999 Lease Agreement, the Master Trust Agreement, the Series 2020B Supplemental Trust Agreement, the Series 2010A Ground Lease Agreement or the Escrow Deposit Agreement, for the full punctual and complete performance of all the terms, covenants and agreements contained herein or therein, and each member, employee, attorney and officer of the District and the Secretary is hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder.
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Appendix 2 to page 107 7 SECTION 13. APPROVAL OF DELEGATED NEGOTIATED SALE; EXECUTION AND DELIVERY OF CERTIFICATE PURCHASE CONTRACT. Subject to full satisfaction of the conditions set forth in this Section, the Board hereby authorizes a delegated negotiated sale of the Series 2020B Certificates to the Underwriters, in accordance with the terms of the Certificate Purchase Contract to be dated the date of sale and to be substantially in the form attached hereto as Exhibit D (the “Certificate Purchase Contract”), with such changes, amendments, modifications, omissions and additions thereto as shall be approved by the Chairman and the Secretary in accordance with the provisions of this Section, their execution thereof being deemed conclusive evidence of the approval of such changes and full satisfaction of the conditions set forth in this Section. The Certificate Purchase Contract shall not be executed by the Chairman and the Secretary until such time as all of the following conditions have been satisfied:
Receipt by the Secretary of a written offer to purchase the Series 2020B Certificates by the Underwriters substantially in the form of the Certificate Purchase Contract, said offer to provide for, among other things, (i) the issuance of not exceeding $12,000,000 aggregate principal amount of Series 2020B Certificates, (ii) an underwriting discount (including management fee and all expenses) not in excess of $4.25/$1,000.00 of the par amount of the Series 2020B Certificates, (iii) the final maturity of the Series 2020B Certificates not later than July 1, 2023; and (iv) a net present value savings resulting from the refunding of the Refunded Certificates of not less than 3.0%.
SECTION 14. OFFERING STATEMENT. The form, terms and provisions of the Offering Statement relating to the Series 2020B Certificates, shall be substantially as set forth in the Preliminary Offering Statement. The Chairman and the Secretary are each hereby authorized and directed to execute and deliver said Offering Statement in the name and on behalf of the Board and thereupon to cause such Offering Statement to be delivered to the Underwriters within seven business days of the date of execution of the Certificate Purchase Contract with such changes, amendments, modifications, omissions and additions as may be approved by said Chairman. Said Offering Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chairman, and the information contained therein are hereby authorized to be used in connection with the sale of the Series 2020B Certificates to the public. Execution by the Chairman and the Secretary of the Offering Statement shall be deemed to be conclusive evidence of approval of such changes.
SECTION 15. CONTINUING DISCLOSURE AGREEMENT. The Board hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Resolution, failure of the Board to comply with the Continuing Disclosure Agreement will not be considered an event of default under the Trust Agreement or the Second Amended and Restated Lease Schedule No. 1999; however any Certificateholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court - 8-
Appendix 2 to page 107 8 order, to cause the Board to comply with its obligations under this Section. Certificateholders shall not be entitled to any damages for failure of the Board to comply with the terms of the Continuing Disclosure Agreement.
SECTION 16. MUNICIPAL BOND INSURANCE POLICY. The Chairman and Secretary are hereby authorized to request and accept a commitment for municipal bond insurance policy after consulting with the Board’s Financial Advisor to determine net interest cost savings to the Board, and the Chairman and Secretary of the Board are hereby authorized to execute and deliver such additional documents and agreements as may be required as a condition to attest the delivery of such policy. A statement of insurance is authorized to be printed on the Series 2020B Certificates.
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Appendix 2 to page 107 9 SECTION 17. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof.
SECTION 18. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption.
ADOPTED at a regular meeting this 28th day of April, 2020.
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, ACTING AS THE GOVERNING BODY OF THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA
[SEAL]
By:______Chairman
ATTEST:
______Superintendent/Secretary
APPROVED AS TO FORM AND LEGAL SUFFICIENCY:
______School Board Attorney
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Appendix 2 to page 107 10 EXHIBIT A
FORM OF SECOND AMENDED AND RESTATED LEASE SCHEDULE NO. 1999
Appendix 2 to page 107 11 Second Amended and Restated Lease Schedule No. 1999 to the Master Lease-Purchase Agreement, dated as of November 1, 1994, between Bay County Educational Facilities Finance Corporation (the "Corporation") and School Board of Bay County, Florida (the "Board")
THIS SECOND AMENDED AND RESTATED LEASE SCHEDULE NO. 1999 (the "Lease Schedule") is hereby entered into under and pursuant to that certain Master Lease-Purchase Agreement, dated as of November 1, 1994, as amended (the "Lease Agreement") pursuant to which the Corporation has agreed to lease-purchase to the Board and the Board has agreed to lease- purchase from the Corporation, subject to the terms and conditions of the Lease Agreement and the Series 1999 Project as herein described. All capitalized defined terms not otherwise defined herein shall have the respective meanings therefor set forth in the Lease Agreement. Reference to "Lease Agreement" herein shall include the terms of this Lease Schedule.
1. Certificates of Participation. (a) The Certificates of Participation issued under the Trust Agreement dated as of November 1, 1994, as amended and supplemented, and as particularly supplemented by the Series 2020B Supplemental Trust Agreement dated as of May 1, 2020 (the “Series 2020B Supplemental Trust Agreement”), each among the Board, the Corporation and Hancock Whitney Bank, as successor trustee (the “Trustee”) and related to this Lease Schedule are identified as the Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida (the "Series 2020B Certificates"), each as described on Schedule A hereof. The Series 2020B Certificates are being issued for the refinancing of the Series 1999 Project, which Series 1999 Project was refinanced with the proceeds of the Series 2010A Certificates in accordance with Amended and Restated Schedule No. 1999 dated as of July 1, 2010, between the Board and the Corporation, and costs of issuance related thereto.
(b) The Credit Enhancer for the Series 2010A Certificates (the “Insured Series 2010A Certificates”) is Assured Guaranty Municipal Corp. (the "Insurer"). For so long as the Insurer is not in default under its Policy, the Insurer shall constitute a third party beneficiary to the Lease Agreement. No grace period for a covenant default under the Lease Agreement shall exceed thirty (30) days or be extended for more than sixty (60) days, without the prior written consent of the Insurer. No grace period shall be permitted for payment defaults. Any amendment, supplement, modification to or waiver of the Lease Agreement shall be subject to the prior written consent of the Insurer, including, without limitation, any amendment, supplement modification to or waiver intended to provide for a release or substitution of a Facility or Facility site.
The Credit Enhancer for the Series 2020B Certificates (the “Insured Series 2020B Certificates”) shall be ______(the "Insurer"). For so long as the Insurer is not in default under its Policy, the Insurer shall constitute a third party beneficiary to the Lease Agreement. No
1 Appendix 2 to page 107 12 grace period for a covenant default under the Lease Agreement shall exceed thirty (30) days or be extended for more than sixty (60) days, without the prior written consent of the Insurer. No grace period shall be permitted for payment defaults. Any amendment, supplement, modification to or waiver of the Lease Agreement shall be subject to the prior written consent of the Insurer, including, without limitation, any amendment, supplement modification to or waiver intended to provide for a release or substitution of a Facility or Facility site.
(c) No Reserve Account is required to be established for the Insured Series 2010A Certificates or the Series 2020B Certificates.
(d) The Insured Series 2010A Certificates and the Series 2020B Certificates are not subject to optional prepayment.
(e) The Series 1999 Subaccount of the Project Account established in connection with the Series 1999 Project has previously been closed.
(f) No Prepayment Amount is designated for purposes of 6.03(g) of the Trust Agreement.
2. Basic Rent. The Basic Rent payable by the Board to the Corporation with respect to the Series 1999 Project under the Lease Agreement is described in Schedule A attached to this Lease Schedule, which Schedule A hereof amends and replaces in its entirety the Schedule A attached to Amended and Restated Schedule No. 1999.
3 Use of Certificate Proceeds. (a) The proceeds of the Series 1999 Certificates were disbursed as follows:
Deposit to Series 1999 Subaccount of Costs of Issuance Account established for Series 1999 Certificates $190,439.68 Purchase of Certificate Insurance 229,131.27 Deposit to Series 1999 Subaccount of the Interest Account established for Series 1999 Certificates 129,442.50 Deposit to Series 1999 Subaccount of the Project Account established for the Series 1999 Certificates 40,355,000.00 Total Proceeds $40,904,013.45
(b) The proceeds of the Series 2010A Certificates were disbursed as follows:
Costs of Issuance for the Series 2010A Certificates $ 413,176.09 Purchase of Certificate Insurance 233,546.14 Deposit to the Escrow Deposit Agreement 36,090,487.67 Total Proceeds $36,737,209.90
2 Appendix 2 to page 107 13 (c) The proceeds of the Series 2020B Certificates were disbursed as follows:
Costs of Issuance for the Series 2020B Certificates $ Deposit to the Escrow Deposit Agreement Total Proceeds
4. The Series 1999 Project. The Project Description, Project Budget and Project Schedule for the Series 1999 Project are attached hereto as Schedule B.
5. The Land. A description of the land, including any Ground Leases, is attached hereto as Schedule C.
6. Other Documents. The documents required by Section 3.01(c) of the Lease Agreement to be submitted with this Lease Schedule are attached hereto as Schedule D.
7. Assignment of Lease Agreement. The Corporation hereby acknowledges that all Lease Payments and its rights, title and interest in this Lease Schedule have been assigned to the Trustee pursuant to the Series 2010A Assignment Agreement and by the Series 2020B Assignment Agreement.
8. Conditions for Lease Schedule. The Insurer has issued a financial guaranty insurance policy (the "Policy") insuring payment when due of the principal of and interest on the Insured Series 2010A Certificates. Terms and Conditions relating to the Policy are included in the Series 2010A Supplemental Trust Agreement and reference thereto is made hereby.
3 Appendix 2 to page 107 14 IN WITNESS WHEREOF, each of the parties hereto have caused this Second Amended and Restated Lease Schedule No. 1999 to be executed by their proper corporate officers, all as of the 1st day of May, 2020.
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION
(SEAL)
By: ______President
Attest: ______Secretary
SCHOOL BOARD OF BAY COUNTY, FLORIDA
By: ______(SEAL) Chairman
Attest: ______Secretary-Superintendent
S-1 Appendix 2 to page 107 15 SCHEDULE A
RENTS AND TERMS
A. LEASE AGREEMENT.
1. The Commencement Date for the Series 1999 Project was March 1, 1999 and the Lease Termination Date is June 30, 2023.
2. The "Initial Lease Term" was as of March 1, 1999 through June 30, 1999, such later date being the "Initial Lease Termination Date".
3. "Renewal Lease Terms" are the ______(__) consecutive one (1) year terms each commencing on each July 1.
4. "Renewal Term Termination Date" shall mean June 30 as the final day of such Renewal Term.
5. The Maximum Lease Term is ______(__) years.
6. The "Certificates" are the Certificates of Participation issued under the Trust Indenture and identified as "REFUNDING CERTIFICATES OF PARTICIPATION (SCHOOL BOARD OF BAY COUNTY, FLORIDA MASTER LEASE PROGRAM, SERIES 2010A) EVIDENCING AN UNDIVIDED PROPORTIONATE INTEREST OF OWNERS THEREOF IN BASIC RENT PAYMENTS TO BE MADE UNDER A MASTER LEASE-PURCHASE AGREEMENT BY THE SCHOOL BOARD OF BAY COUNTY, FLORIDA"; and as "REFUNDING CERTIFICATES OF PARTICIPATION (SCHOOL BOARD OF BAY COUNTY, FLORIDA MASTER LEASE PROGRAM, SERIES 2020B) EVIDENCING AN UNDIVIDED PROPORTIONATE INTEREST OF OWNERS THEREOF IN BASIC RENT PAYMENTS TO BE MADE UNDER A MASTER LEASE-PURCHASE AGREEMENT BY THE SCHOOL BOARD OF BAY COUNTY, FLORIDA."
7. The Certificates are not subject to Optional Prepayment.
Addresses for notices under the Lease Agreement are as follows:
To the Lessee: School Board of Bay County 1311 Balboa Avenue Panama City, Florida 32401
To the Lessor: Bay County Educational Facilities Finance Corporation 1311 Balboa Avenue
A-2
Appendix 2 to page 107 16 Panama City, Florida 32401
To the Trustee: Hancock Whitney Bank Corporate Trust 445 North Boulevard, Suite 201 Baton Rouge, LA 70802
To the Insurer: Assured Guaranty Municipal Corp. 31 West 52nd Street New York, New York 10019 Attention: Managing Director-Surveillance Re: Policy No. 119599-N Phone: (212) 826-0100 Fax: (212) 339-3556
A-3
Appendix 2 to page 107 17 BASIC RENT SCHEDULE
Series 2020B Certificates
Total Basic Basic Rent Interest Principal Rent Payment Date Component Component Payments
A-4
Appendix 2 to page 107 18 SCHEDULE B
PROJECT DESCRIPTION, PROJECT BUDGET, PROJECT SCHEDULE AND DESIGNATED EQUIPMENT
The Series 1999 Project consists of certain educational facilities in the District. Under certain conditions set forth in the Lease Agreement, the School Board may substitute components of the Series 1999 Project and modify Plans and Specifications therefor. The following is a general description of facilities comprising the principal components of the Series 1999 Project:
The Series 1999 Project consists of the construction and equipping of Arnold High School. The Series 1999 Project is constructed on a 75 Acre Site (described on Schedule C attached hereto), and consists of a complex of six one- and two-story structures with a maximum of 2,105 student stations for grades 9-12. The Arnold High School contains approximately 315,000 gross square feet of classrooms, ancillary and support spaces and also includes playground facilities. The Series 1999 Project was intended to relieve overcrowding experienced at Bay, Mosley and Rutherford High Schools.
The completion date was August, 2000.
The budget for the Series 1999 Project was:
A/E fee & administrative costs $ 1,610,000 Other fees 300,000 Furniture/Equipment 3,689,632 Construction 32,296,683 Total $37,896,315
The Designated Equipment is: None
B-1
Appendix 2 to page 107 19 SCHEDULE C
LEGAL DESCRIPTION
C-1
Appendix 2 to page 107 20 SCHEDULE D
DOCUMENTS REQUIRED BY SECTION 3.01 OF THE LEASE AGREEMENT
(i) A certified copy of the resolutions duly adopted by the Board authorizing the lease- purchase of the Project described in the Lease Schedule, and the execution and delivery of the Lease Schedule and the Series 2020B Supplemental Trust Agreement relating to the Series 2020B Certificates;
(ii) A certificate of the Chairman of the Board reaffirming the Board's covenants, representations and warranties made hereunder, except as modified by the Lease Schedule, and stating no default has occurred and is continuing under the Lease Agreement;
(iii) Executed copy of the Series 2010A Ground Lease Agreement relating to the Project described in the Lease Schedule;
(iv) An executed copy of the Series 2020B Supplemental Trust Agreement relating to the issuance of the Series 2020B Certificates which shall refinance the Series 1999 Project described in the Lease Schedule; and
(v) An executed copy of a Memorandum of Lease with respect to the Project described in the Lease Schedule.
D-1
Appendix 2 to page 107 21 EXHIBIT B
FORM OF SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT
Appendix 2 to page 107 22 SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT
by and among
HANCOCK WHITNEY BANK, A MISSISSIPPI BANKING CORPORATION, as successor Trustee
and
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, as Lessor
and
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, as Lessee
Dated as of May 1, 2020
Relating to
Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by The School Board of Bay County, Florida
25015/014/01590969.DOCv3
Appendix 2 to page 107 23 SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT
THIS SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT, dated as of May 1, 2020 (the "Series 2020B Supplemental Trust Agreement"), by and among HANCOCK WHITNEY BANK, a Mississippi banking corporation, qualified to do business in the State of Florida, with corporate trust powers and qualified to accept trusts of the type set forth in the Trust Agreement (the "Trustee"), the BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, a not-for-profit corporation duly organized and existing under the laws of the State of Florida (the "Corporation"), and THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, acting as the governing body of the Bay County School District (the "Board"), supplementing the Master Trust Agreement, dated as of November 1, 1994, as amended and supplemented (the "Trust Agreement"), by and among the Trustee, as successor trustee to NationsBank of Florida, N.A., the Corporation and the Board.
W I T N E S S E T H:
WHEREAS, pursuant to the Trust Agreement, the Board, the Trustee, and the Corporation have provided for the issuance of certain Certificates of Participation on behalf of the Board for the financing and refinancing of capital projects of the Board; and
WHEREAS, the Board has further provided for the lease-purchase of certain real and/or personal property from time to time by entering into the Master Lease-Purchase Agreement, dated as of November 1, 1994, as amended and supplemented (the "Lease Agreement"), between the Corporation, as lessor, and the Board, as lessee; and
WHEREAS, pursuant to the Lease Agreement, the Board may from time to time, by execution of a Lease Schedule to the Lease Agreement (a "Lease Schedule"), direct the Corporation to acquire, construct, and lease-purchase to the Board the items of property described in such Lease Schedule (which items of property are collectively referred to herein as the "Projects"); and
WHEREAS, provision for the payment of the cost of acquiring, constructing, and installing each Project will be made by the issuance and sale from time to time of a Series (as defined in the Trust Agreement) of Certificates of Participation issued under the Trust Agreement (the "Certificates"), which shall be secured by and be payable from the right of the Corporation to receive Basic Rent Payments (as defined in the Trust Agreement) to be made by the Board pursuant to the Lease Agreement and related Lease Schedule; and
WHEREAS, the Board has previously caused the Trustee to execute, authenticate, and deliver, under the Trust Agreement, the Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2010A) Evidencing an Undivided
25015/014/01590969.DOCv3 1
Appendix 2 to page 107 24 Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by The School Board of Bay County, Florida (the "Series 2010A Certificates") to refinance the Series 1999 Project; and
WHEREAS, at the request of the Board and the Corporation, the Trustee has agreed to deliver a Series of Refunding Certificates pursuant to and upon receipt of a Request and Authorization (as defined in the Trust Agreement) from the Corporation and the Board and the terms of this Series 2020B Supplemental Trust Agreement; and
WHEREAS, the Corporation has assigned by outright assignment to the Trustee all of its right, title and interest in and to the Lease Agreement and the Lease Payments (as defined in the Trust Agreement), other than its rights of indemnification, its obligations pursuant to Section 6.03 of the Lease Agreement, and its right to enter into Lease Schedules from time to time, pursuant to the Series 2020B Assignment Agreement, dated as of May 1, 2020 (the "Series 2020B Assignment"), between the Corporation and the Trustee; and
WHEREAS, each Series of Certificates shall be secured independently from each other Series of Certificates; and
WHEREAS, the Board has caused the Trustee to execute, authenticate, and deliver, under the Trust Agreement, the Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by The School Board of Bay County, Florida (the "Series 2020B Certificates"); and
WHEREAS, the proceeds of the Series 2020B Certificates will be principally used to refund the Series 2010A Certificates and thereby refinance the cost of acquisition, construction, and installation of various educational facilities (the "Series 1999 Project"), as more particularly described in Lease Schedule No. 1999 (as defined herein); and
WHEREAS, the Trustee has received a Request and Authorization from the Corporation and the Board relating to the issuance of the Series 2020B Certificates; and
WHEREAS, the proceeds of the Series 2020B Certificates shall be deposited into the Escrow Deposit Account established under the Escrow Deposit Agreement and the Series 2020B Subaccount of the Cost of Issuance Account established pursuant to the Trust Agreement; and
WHEREAS, in consideration for the deposit of such funds, the Board has agreed to enter into a Second Amended and Restated Lease Schedule No. 1999 (the "Lease Schedule No. 1999" and together with the Lease Agreement, the "Series 1999 Lease"), with the Corporation, whereby the Board will lease the Series 1999 Project and agree to make Basic Rent Payments
25015/014/01590969.DOCv3 2
Appendix 2 to page 107 25 sufficient to pay the Principal Component of and Interest Component on the Series 2020B Certificates; and
WHEREAS, the Series 2020B Certificates shall be secured in the manner provided in the Trust Agreement and shall have the terms and provisions contained in this Series 2020B Supplemental Trust Agreement; and
WHEREAS, all things necessary to make the Series 2020B Certificates, when authenticated by the Trustee and issued as provided herein and in the Trust Agreement, the valid, binding and legal obligations according to the terms thereof, have been done and performed, and the creation, execution, and delivery of this Series 2020B Supplemental Trust Agreement, and the creation, execution, and issuance of the Series 2020B Certificates subject to the terms hereof, have in all respects been duly authorized;
NOW, THEREFORE, THIS SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT WITNESSETH:
ARTICLE I DEFINITIONS
Section 101. Definitions.
Words and terms which are defined in the Trust Agreement shall have the same meanings ascribed to them when used herein, unless the context or use indicates a different meaning or intent. In addition to the words and terms elsewhere defined in this Series 2020B Supplemental Trust Agreement, the following words and terms as used in this Series 2020B Supplemental Trust Agreement shall have the following meanings unless the context or use indicates another or different meaning or intent:
"Escrow Deposit Agreement" means the Escrow Deposit Agreement, dated May __, 2020, by and between the Board and the Trustee, as escrow agent thereunder.
"Lease Agreement" means the Master Lease-Purchase Agreement, dated as of November 1, 1994, by and between the Corporation and the Board as supplemented by the Lease Schedule No. 1999.
"Lease Schedule No. 1999" means the Second Amended and Restated Lease Schedule No. 1999 relating to the financing of the Series 1999 Project, dated as of May 1, 2020, between the Corporation and the Board, and which shall be part of the Lease Agreement.
"Master Trust Agreement" means the Master Trust Agreement, dated as of November 1, 1994, by and among the Corporation, the Board and the Trustee. 25015/014/01590969.DOCv3 3
Appendix 2 to page 107 26 "Related Documents" means the Master Trust Agreement, this Series 2020B Supplemental Trust Agreement, the Lease Agreement, the Series 2010A Ground Lease Agreement, the Series 2010A Ground Lease Assignment Agreement and the Series 2020B Assignment Agreement.
"Series 1999 Lease Assignments" means, collectively, the Series 2020B Assignment Agreement, dated as of May 1, 2020, between the Corporation to the Trustee, and the Series 2010A Assignment of Ground Lease Agreement, dated as of July 1, 2010, between the Corporation and the Trustee.
"Series 1999 Project" means the educational facilities in the District more particularly described on Schedule B to the Second Amended and Restated Lease Schedule No. 1999 to the Lease Agreement.
"Series 2010A Ground Lease Agreement" means the Series 2010A Ground Lease Agreement, dated as of July 1, 2010, by and between the Board and the Corporation, as amended and supplemented, and relating to the Series 1999 Project.
"Series 2020B Account of the Prepayment Fund" means the account established in the Prepayment Fund pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
"Series 2020B Certificates" means the Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by The School Board of Bay County, Florida.
"Series 2020B Pledged Accounts" means the Series 2020B Subaccount of the Interest Account, the Series 2020B Subaccount of the Principal Account, and the Series 2020B Account of the Prepayment Fund.
"Series 2020B Subaccount of the Costs of Issuance Account" means the subaccount established in the Costs of Issuance Account pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
"Series 2020B Subaccount of the Interest Account" means the subaccount established in the Interest Account pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
"Series 2020B Subaccount of the Principal Account" means the subaccount established in the Principal Account pursuant to Section 6.02(b) of the Trust Agreement and Section 401 hereof.
25015/014/01590969.DOCv3 4
Appendix 2 to page 107 27 "Series 2020B Supplemental Trust Agreement" means this instrument, as amended and supplemented.
ARTICLE II. THE SERIES 2020B CERTIFICATES
Section 201. Authorization of Series 2020B Certificates.
There is hereby created a Series of Certificates to be issued under the Trust Agreement to be known as "Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida." The aggregate Principal Component of Series 2020B Certificates which may be issued is hereby expressly limited to $______. The Series 2020B Certificates shall be issued for the purposes of (i) refunding the Series 2010A Certificates, and (ii) paying Costs of Issuance of the Series 2020B Certificates. The Series 2020B Certificates shall bear interest from their dated date and shall be issuable as fully registered Series 2020B Certificates without coupons in denominations of $5,000 and integral multiples thereof. The Series 2020B Certificates shall be lettered and numbered R-1 and upward.
(b) Each Series 2020B Certificate shall be dated as of its date of delivery. Interest on the Series 2020B Certificates shall be payable on each Payment Date, commencing January 1, 2021. The Series 2020B Certificates shall be payable in the manner provided in the Trust Agreement.
(c) The Series 2020B Certificates shall bear Interest Component at the respective rates and shall mature on July 1 of each of the years in the respective Principal Components set opposite each year in the following schedule:
Year (July 1) Amount
25015/014/01590969.DOCv3 5
Appendix 2 to page 107 28 (f) The Series 2020B Certificates shall be substantially in the form set forth in Exhibit B to the Trust Agreement, with such changes as may be necessary to conform the provisions of this Series 2020B Supplemental Trust Agreement.
Section 202. Issuance of Series 2020B Certificates
The Series 2020B Certificates shall be issued upon delivery to the Trustee of the documents referred to in Section 4.02(a) of the Trust Agreement and the payment of the purchase price therefor.
Section 203. Series 1999 Project
Upon delivery of the Series 2020B Certificates, the proceeds will be used to refinance the acquisition, construction and installation of the Series 1999 Project as provided in the Trust Agreement and the Lease Agreement.
Section 204. Letter of Instructions
Attached hereto as Schedule 1 is the Letter of Instructions relating to the Series 2020B Certificates as required by Section 6.12 of the Trust Agreement. The Trustee and the Board agree to abide by the provisions of such Letter of Instructions to the extent applicable to each in accordance with and to the extent of the terms of the Trust Agreement.
ARTICLE III. APPLICATION OF SERIES 2020B CERTIFICATE PROCEEDS
Section 301. Application of Series 2020B Certificate Proceeds.
(a) The proceeds of the Series 2020B Certificates shall be applied by the Trustee as follows:
(i) Deposit to the credit of the Escrow Deposit Account created under the Escrow Deposit Agreement, an amount equal to $______; and
(ii) Deposit to the credit of the Series 2020B Subaccount of the Costs of Issuance Account an amount equal to the Costs of Issuance of $______.
25015/014/01590969.DOCv3 6
Appendix 2 to page 107 29 (b) All moneys on deposit in the Subaccounts described in this Section shall be applied in accordance with the terms hereof and shall be disbursed by the Trustee in the manner and for the purposes described in the Trust Agreement.
ARTICLE IV. ESTABLISHMENT OF SERIES 2020B PLEDGED ACCOUNTS
Section 401. Establishment of Series 2020B Pledged Accounts.
In accordance with Section 6.02(b) of the Trust Agreement, there is hereby established with the Trustee, solely for the benefit of the Owners of the Series 2020B Certificates, the following account and subaccounts:
(a) The "School Board of Bay County, Florida Master Lease Series 2020B Subaccount of the Costs of Issuance Account".
(b) The "School Board of Bay County, Florida Master Lease Series 2020B Subaccount of the Interest Account".
(c) The "School Board of Bay County, Florida Master Lease Series 2020B Subaccount of the Principal Account".
(d) The "School Board of Bay County, Florida Master Lease Series 2020B Account of the Prepayment Fund."
(e) The "School Board of Bay County, Florida Master Lease Series 2020B Subaccount of the Rebate Fund."
The moneys on deposit in the Account and Subaccounts described in this Section shall be disbursed by the Trustee in the manner and for the purposes described in the Trust Agreement. The moneys in the Series 2020B Pledged Accounts shall be invested solely in the Permitted Investments.
Section 402. Security for Series 2020B Certificates.
The Series 2020B Certificates shall be secured in the manner provided in the Trust Agreement and shall receive all the benefits of the Trust Estate created thereunder; provided, such portion of the Trust Estate (i) which is derived from the sale, re-letting or other disposition of the Series 1999 Project shall be utilized solely for the benefit of the Owners of the Series 2020B Certificates; and (ii) and any cash, securities and investments in the Series 2020B Pledged Accounts shall be utilized solely for the benefit of the Owners of the Series 2020B Certificates. The Owners of the Series 2020B Certificates shall have no claim against, nor receive any benefits 25015/014/01590969.DOCv3 7
Appendix 2 to page 107 30 from, any portion of the Trust Estate derived from the sale, re-letting or other disposition of Projects, other than the Series 1999 Project (excluding Designated Equipment, if any), or any cash, securities and investments in the Pledged Accounts, other than the Series 2020B Pledged Accounts.
Section 403. No Reserve Account.
No subaccounts of the Reserve Account with respect to the Series 2020B Certificates shall be required to be established.
ARTICLE V. PREPAYMENT OF SERIES 2020B CERTIFICATES
Section 501. Prepayment Dates and Prices of Series 2020B Certificates.
(a) The Series 2020B Certificates are subject to prepayment only as provided in this Section 501.
(b) The Series 2020B Certificates are not subject to extraordinary mandatory prepayment prior to maturity pursuant to Section 5.08(c) of the Lease Agreement.
(c) The Series 2020B Certificates are not subject to optional prepayment prior to maturity.
ARTICLE VI. MISCELLANEOUS
Section 601. Provisions Of Trust Agreement Not Otherwise Modified.
Except as expressly modified or amended hereby, the Trust Agreement shall remain in full force and effect. To the extent of any conflict between the terms of the Trust Agreement and this Series 2020B Supplemental Trust Agreement, the terms hereof shall control.
Section 602. Third Party Beneficiaries.
Nothing in this Series 2020B Supplemental Trust Agreement, express or implied, is to or shall be construed to confer upon or to give to any person or party other than the Corporation, and its assignee, the Trustee, and the Board any rights, remedies or claims under or by reason of this Series 2020B Supplemental Trust Agreement or any covenants, condition or stipulation hereof; and all covenants, stipulations, promises and agreements in this Series 2020B Supplemental Trust Agreement contained by or on behalf of the Corporation or the Board shall
25015/014/01590969.DOCv3 8
Appendix 2 to page 107 31 be for the sole and exclusive benefit of the Corporation, and its assignee, the Purchaser, and the Board.
Section 603. Counterparts.
This Series 2020B Supplemental Trust Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 604. Headings.
Any heading preceding the text of the several Articles hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Series 2020B Supplemental Trust Agreement, nor shall they affect its meaning, construction or effect.
Section 605. Laws and Venue.
The Related Documents and the Series 2020B Certificates shall be governed by applicable federal law and the internal laws of the state of Florida. The Board and Corporation agree that certain material events and occurrences relating to the Related Documents and the Series 2020B Certificates bear a reasonable relationship to the laws of Florida and the validity, terms, performance and enforcement of the Related Documents and the Series 2020B Certificates shall be governed by the internal laws of Florida which are applicable to agreements which are negotiated, executed, delivered and performed solely in Florida. Unless applicable law provides otherwise, in the event of any legal proceeding arising out of or related to the Related Documents and the Series 2020B Certificates, the Board and the Corporation consent to the jurisdiction and venue of any court located in Bay County, Florida.
25015/014/01590969.DOCv3 9
Appendix 2 to page 107 32 IN WITNESS WHEREOF, the parties have executed this Series 2020B Supplemental Trust Agreement by their officers thereunto duly authorized as of the date and year first written above.
HANCOCK WHITNEY BANK, A MISSISSIPPI BANKING CORPORATION, as Trustee
By: ______John C. Shiroda Vice President
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION, as Lessor
By: ______Steve Moss ATTEST: President
______William V. Husfelt, III Secretary
(SEAL) THE SCHOOL BOARD OF BAY COUNTY, FLORIDA, as Lessee
By: ______Steve Moss ATTEST: Chairman
______William V. Husfelt, III Secretary-Superintendent
25015/014/01590969.DOCv3 S-1
Appendix 2 to page 107 33 SCHEDULE 1
LETTER OF INSTRUCTIONS
See Exhibit D to the Tax Certificate as to Arbitrage and the Provisions of Sections 140-150 of the Internal Revenue Code of 1986, as Amended
25015/014/01590969.DOCv3 Schedule 1-1 Appendix 2 to page 107 34 EXHIBIT C
FORM OF SERIES 2020B PRELIMINARY OFFERING STATEMENT
Appendix 2 to page 107 35
PRELIMINARY OFFERING STATEMENT DATED ______
NEW ISSUE-BOOK ENTRY ONLY Ratings: (______Insured) (See "RATINGS" herein) In the opinion of Bryant Miller Olive P.A., Tallahassee, Florida, Special Counsel, assuming continuing compliance by the Corporation and the School Board with various covenants in the Trust Agreement and the Series 2020A Lease Agreement and Series 1999 Lease Agreement, under existing statutes, regulations, and court decisions, the Interest Component
of Basic Rent Payments (i) will be excludable from gross income of the recipients thereof for federal income tax purposes, except to extent described under the caption “TAX EXEMPTION” herein and (ii) will not be an item of tax preference for purposes of the alternative minimum tax on individuals and corporations. However, no opinion is expressed with respect to federal income tax consequences of any payments received with respect to the 2020 Certificates following termination of the Series 2020A Lease Agreement or the Series 1999 Lease Agreement as a result of an Event of Non-Appropriation or Event of Default thereunder. See “TAX EXEMPTION” herein for a discussion of Special Counsel’s opinion, including a description of the corporate alternative minimum tax.
$______* $______* CERTIFICATES OF PARTICIPATION REFUNDING CERTIFICATES OF PARTICIPATION orlaws qualification securities under the (School Board of Bay County, Florida, Master Lease Program, Series 2020A) (School Board of Bay County, Florida, Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Owners thereof in Basic Rent Payments to be made under a s delivered in final form. Underno sdelivered inform. final i Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by the School Board of Bay County, Florida the School Board of Bay County, Florida
Dated: Date of Delivery Due: July 1, as shown on the inside cover The Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) (the "2020A Certificates”) offered hereby evidence an undivided proportionate interest in Basic Rent Payments (as defined herein) to be made by The School Board of Bay County, Florida (the "School Board") under a Master Lease-Purchase Agreement, dated as of November 1, 1994 (the “Master Lease”) with the Bay County Educational Facilities Finance Corporation, a Florida not-for-profit corporation (the "Corporation"), as supplemented by Lease Schedule No. 2020A, dated as of ______1, 2020 (which Master Lease and Lease Schedule No. 2020A thereto are herein collectively referred to as the "Series 2020A Lease Agreement"), providing for the lease purchase financing of certain educational and related facilities and equipment (the "Series 2020 Project"). The Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) (the "2020B Certificates” and, together with the 2020A Certificates, the “2020 Certificates”) offered hereby evidence an undivided proportionate interest in the Basic Rent Payments to be made by the School Board under the Master Lease, as supplemented by the Se cond Amended and Restated Lease Schedule No. 1999, dated as of ______1, 2020 (which Master Lease and Second Amended and Restated Lease Schedule No. 1999 thereto are herein collectively referred to as solicitationwouldpriorsalebetoor unlawful registration the "Series 1999 Lease Agreement"), providing for the lease purchase refinancing of certain educational and related facilities and equipment (the "Series 1999 Project").
When issued, the 2020 Certificates will initially be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, New York, New York ("DTC"). Purchasers of the 2020 Certificates (the "Beneficial Owners") will not receive physical delivery of the 2020 Certificates. Ownership by the Beneficial Owners of the 2020 Certificates will be evidenced through a book-entry only system of registration. As long as Cede & Co. is the registered owner as nominee of DTC, payment of the Principal Component and Interest Component of the Basic Rent Payments represented by the 2020 Certificates will be made directly to Cede & Co. which will in turn remit such payments to the DTC Participants for subsequent disbursement to the Beneficial Owners. The Interest Component of Basic Rent Payments represented by the 2020 Certificates is payable on January 1 and July 1 of each year (each a "Payment Date"), commencing [July 1, 2020], by check or draft of Hancock Whitney Bank, a Mississippi banking corporation having an office in Baton Rouge, Louisiana, as successor Trustee, and mailed to the 2020 Certificate Owner of record at the address shown on the Certificate register. The Principal Component of Basic Rent Payments represented by the 2020 Certificates is payable upon presentation, when due, at maturity or earlier prepayment, at the designated corporate trust office of the Trustee, which, as of the date hereof, is located in Baton Rouge, Louisiana.
The 2020A Certificates are subject to optional, scheduled mandatory and extraordinary prepayment prior to their stated maturities as set forth herein. The 2020B Certificates will not be subject to redemption prior to maturity.
THE SCHOOL BOARD IS NOT LEGALLY REQUIRED TO APPROPRIATE MONEYS TO MAKE BASIC RENT PAYMENTS. THE BASIC RENT PAYMENTS AND, CONSEQUENTLY, THE CERTIFICATE PAYMENTS OF PRINCIPAL AND INTEREST ARE PAYABLE SOLELY FROM THE SCHOOL BOARD'S AVAILABLE REVENUES AND NEITHER THE CORPORATION, THE SCHOOL BOARD, THE STATE OF FLORIDA, NOR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF SHALL BE OBLIGATED TO PAY ANY SUMS DUE UNDER THE SERIES 2020A LEASE AGREEMENT OR THE SERIES 1999 LEASE AGREEMENT EXCEPT FROM AVAILABLE REVENUES APPROPRIATED FOR SUCH PURPOSE. THE BASIC RENT PAYMENTS FOR ALL LEASES UNDER THE MASTER LEASE ARE SUBJECT TO ANNUAL APPROPRIATION BY THE SCHOOL BOARD ON AN ALL-OR-NONE BASIS. THE CERTIFICATE PAYMENTS OF PRINCIPAL AND INTEREST AND THE PAYMENTS DUE FROM THE SCHOOL BOARD UNDER THE SERIES 2020A LEASE AGREEMENT AND THE SERIES 1999 LEASE AGREEMENT AND THE CONTRACTUAL OBLIGATIONS OF THE SCHOOL BOARD UNDER THE SERIES 2020A LEASE AGREEMENT AND THE SERIES 1999 LEASE AGREEMENT DO NOT CONSTITUTE A GENERAL OBLIGATION OR A PLEDGE OF THE ut notice. The 2020 Certificates may not be sold nor may offers to buy beStatement acceptedthe priorOffering toto thebuy time noroffers not utmay may 2020 notice. The be sold Certificates FAITH AND CREDIT OF THE SCHOOL BOARD, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. THE ISSUANCE OF THE 2020 CERTIFICATES WILL NOT DIRECTLY OR INDIRECTLY OBLIGATE THE SCHOOL BOARD, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF TO LEVY OR TO PLEDGE ANY FORM OF AD VALOREM shall there be any sale of the 2020A Certificates in any jurisdiction in which such offer, offer, such inthe ofjurisdiction 2020Awhich insale shall any beany there Certificates TAXATION WHATSOEVER THEREFOR AND THE OWNERS OF THE 2020 CERTIFICATES WILL HAVE NO RECOURSE TO THE POWER OF AD VALOREM TAXATION OF THE SCHOOL BOARD OR ANY OTHER GOVERNMENT ENTITY. SEE "RISK FACTORS" HEREIN.
[[The scheduled payment of principal of and interest on all, some or none of the 2020 Certificates of either Series when due will be guaranteed under separate insurance policies to be issued concurrently with the delivery of the 2020 Certificates by ______(See “CERTIFICATE OF INSURANCE” herein).
[Insert Insurance Logo]
CERTAIN ADDITIONAL INFORMATION RELATING TO THE SERIES 2020A LEASE AGREEMENT, THE SERIES 1999 LEASE AGREEMENT, THE 2019 LEASE AGREEMENT, THE 2007A LEASE AGREEMENT, AND THE 2004 LEASE AGREEMENT ARE HEREINAFTER DESCRIBED.
SEE THE INSIDE COVER PAGE FOR INFORMATION ON MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND PRICES.
This cover page and inside cover page contain certain information for quick reference only. They are not, and are not intended to be, a summary of the transaction. Investors must read the entire Offering Statement, including the appendices hereto, to obtain information essential to the making of an informed investment decision.
The 2020 Certificates are offered when, as and if delivered and received by the Underwriters, subject to approval of Bryant Miller Olive PA., Tallahassee, Florida, Special Counsel, and certain other conditions. Certain legal matters will be passed upon for the School Board and the Corporation by their counsel, Hand Arendall Harrison Sale LLC, Panama City, Florida. Certain legal matters will be passed upon by Hand Arendall Harrison Sale LLC, Mobile, Alabama, Disclosure Counsel. Nabors, Giblin & Nickerson, P.A., Tampa, Florida is acting as Counsel to the Underwriters. Ford & Associates, Inc., Tampa, Florida, is acting as Financial Advisor to the School Board. It is expected that settlement for the 2020 Certificates will occur through the facilities of DTC in New York, New York on or about ______.
RAYMOND JAMES & ASSOCIATES, INC. PNC CAPITAL MARKETS, LLC
This Offering Statement is dated ______
*Preliminary: Subject to change
Appendix 2 to page 107 36 This Preliminary OfferingThis andcompletionPreliminary toamendmentwitho orsubjectStatement change, the informationherein are contained ofany such jurisdiction. circumstances shall this Preliminary Offering Statement constitute an offer to sell the solicitation of an offer to buy, anoffer to thesellnor constitutecircumstancesshallsolicitation Statement anthisoffer ofOffering Preliminary
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS AND INITIAL CUSIP NUMBERS
$______* CERTIFICATES OF PARTICIPATION (School Board of Bay County, Florida, Master Lease Program, Series 2020A) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida
Maturity* Principal Interest Initial CUSIP (July 1) Amount* Rate Price Yield Number**
$______* REFUNDING CERTIFICATES OF PARTICIPATION (School Board of Bay County, Florida, Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida
Maturity* Principal Interest Initial CUSIP (July 1) Amount** Rate Price Yield Number**
______*Preliminary; subject to change.
Appendix 2 to page 107 37 ** CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS), is managed on behalf of the American Bankers Association by S&P Global Market Intelligence, a division of S&P Global, Inc. Copyright© 2018 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. The School Board and the Underwriters are not responsible for the selection, uses, or correctness (as listed above) of, or subsequent changes to, CUSIP numbers assigned to the 2020 Certificates.
Appendix 2 to page 107 38 ADDITIONAL INFORMATION
The initial term of the Series 2020A Lease Agreement commences on the date of delivery of the 2020A Certificates and continues through and including June 30, 2020, and is automatically renewable annually through June 30, ______, unless sooner terminated as described herein. The initial term of the Series 1999 Lease Agreement commenced on the date stated therein, as extended by the Second Amended and Restated Lease Schedule No. 1999 commencing on the date of delivery of the 2020B Certificates, and continues through and including June 30, 2020, and is automatically renewable annually through June 30, ______, unless sooner terminated as described herein. The School Board may enter into other leases under the Master Lease in addition to the Series 2020A Lease Agreement and Series 1999 Lease Agreement and is currently a party to the Series 2004 Lease Agreement, dated as of July 1, 2013, the Series 2007A Lease Agreement, dated as of March 1, 2015, and the Series 2019 Lease Agreement, dated as of December 1, 2019. For Fiscal Year 2019-20, of the School District of Bay County, Florida's (the “District”) 31 total operational schools (not including charter schools located within the District), there were six schools and related facilities and two additions to school facilities leased under the Master Lease. Based on the District's full-time equivalent enrollment of approximately 19,620 students as of January 17, 2020, approximately 22.9% of the District's students are attending classes in, or otherwise utilize, Projects leased under the Master Lease during the Fiscal Year 2019-20. Such percentage does not include the students expected to attend classes in or otherwise utilize the Series 2019 Project or the Series 2020A Project upon their completion. To determine the above percentage, the number of students attending each facility was calculated as follows: for schools that are built and operating, the number of students for the Fiscal Year 2019-20 was used; for the additions, the number of student stations attributable to each specific classroom or number of students served by such facility for Fiscal Year 2019-20 based on the type of school (elementary, middle or high) or facility (cafeteria, auditorium, gymnasium, etc.) was used. (See "THE MASTER LEASED PROJECTS" and "THE SERIES 2020 PROJECT" herein). When the School Board appropriates Lease Payments for any of its Projects leased under the Master Lease, it must appropriate Lease Payments for all other Projects leased under the Master Lease or none of them. Failure to appropriate funds to pay Lease Payments under any such Lease, or an event of default under any such Lease, will result in the termination of all Leases, including the Series 2020A Lease Agreement and the Series 1999 Lease Agreement. Upon any such termination, any proceeds of the disposition of leased facilities will be applied to the payment of the related Series of Certificates, all as further described herein. In no event will owners of the 2020A Certificates have any interest in or right to any proceeds of the disposition of facilities leased under any Lease other than the Series 2020A Lease Agreement nor will owners of the 2020B Certificates have any interest in or right to any proceeds of the disposition of facilities leased under any Lease other than the Series 1999 Lease Agreement. The proceeds of any such disposition of the facilities leased under Series 2020A Lease Agreement shall be applied to the payment of the 2020A Certificates after payment of the Trustee's expenses. The proceeds of any such disposition of the facilities leased under Series 1999 Lease Agreement shall be applied to the payment of the 2020B Certificates after payment of the Trustee's expenses. The School Board may not be dispossessed of any Designated Equipment (as defined herein) financed, or refinanced, in whole or in part, with proceeds of the 2020 Certificates. Should termination of the Master Lease occur, the 2020 Certificates will not be prepaid except [at the option of [_Insurer_] or] to the extent the Trustee has moneys available therefor. Special Counsel will express no opinion as to tax exemption or the effect of securities laws with respect to the 2020 Certificates following an Event of Non-Appropriation or an Event of Default under the Master Lease which results in termination of the Lease Term. Transfers of the 2020 Certificates may be subject to compliance with the registration provisions of state and federal securities laws following an Event of Non-Appropriation or an Event of Default under the Master Lease which results in termination of the Lease Term (see "TAX EXEMPTION" and "RISK FACTORS" herein). [An Event of Non-Appropriation or an Event of Default under the Master Lease which results in termination of the Lease Term will not result in termination of the municipal bond insurance policy issued by ______.]
Appendix 2 to page 107 39
PARTICIPANTS IN THE FINANCING
LESSOR Bay County Educational Facilities Finance Corporation Panama City, Florida
LESSEE The School Board of Bay County, Florida Panama City, Florida
SCHOOL BOARD MEMBERS1 Steve Moss, Chairman Pamm Chapman, Vice Chairman Jerry Register, Member Ryan Neves, Member
SCHOOL DISTRICT OFFICIALS William V. Husfelt, III Superintendent of Schools
Sandra Davis Deputy Superintendent
Jim Loyed Executive Director of Business Support Services (CFO)
Doug Lee Executive Director of Operational Services
COUNSEL TO THE SCHOOL BOARD Hand Arendall Harrison Sale LLC Panama City, Florida
SPECIAL COUNSEL Bryant Miller Olive P.A. Tallahassee, Florida
DISCLOSURE COUNSEL Hand Arendall Harrison Sale LLC Mobile, Alabama
FINANCIAL ADVISOR Ford & Associates, Inc. Tampa, Florida
TRUSTEE Hancock Whitney Bank Baton Rouge, Louisiana
1 The District 2 Board position is vacant, pending election of a new Board member in November, 2020.
Appendix 2 to page 107 40 No dealer, broker, sales representative or other person has been authorized by the School Board or the Underwriters to give any information or to make any representations, other than those contained in this Offering Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Offering Statement does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of the 2020 Certificates by any person in any jurisdiction to which it is unlawful for such person to make such offer, solicitation or sale.
UPON ISSUANCE, THE 2020 CERTIFICATES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER INDEPENDENT FEDERAL, STATE OR LOCAL GOVERNMENTAL ENTITY OR AGENCY WILL HAVE PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING STATEMENT OR APPROVED THE 2020A CERTIFICATES FOR SALE.
THE UNDERWRITERS MAY OFFER, AND SELL, THE 2020 CERTIFICATES TO CERTAIN DEALERS AND OTHERS AT PRICES LOWER OR YIELDS HIGHER, THAN THE PUBLIC OFFERING PRICES OR YIELDS SET FORTH ON THE INSIDE COVER PAGE OF THIS OFFERING STATEMENT, AND SUCH PUBLIC OFFERING PRICES OR YIELDS MAY BE CHANGED FROM TIME TO TIME AFTER THE INITIAL OFFERING TO THE PUBLIC, BY THE UNDERWRITERS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2020 CERTIFICATES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THIS OFFERING STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS EITHER IN BOUND PRINTED FORM ("ORIGINAL BOUND FORMAT") OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITES: www.munios.com AND https://emma.msrb.org/. THIS OFFERING STATEMENT MAY BE RELIED UPON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT OR AS PRINTED IN ITS ENTIRETY DIRECTLY FROM SUCH WEBSITES
THIS OFFERING STATEMENT SHALL NOT CONSTITUTE A CONTRACT BETWEEN THE SCHOOL BOARD, THE CORPORATION OR THE UNDERWRITERS AND ANY ONE OR MORE HOLDERS OF THE 2020 CERTIFICATES.
THIS PRELIMINARY OFFERING STATEMENT IS IN A FORM DEEMED FINAL BY THE SCHOOL BOARD FOR PURPOSES OF RULE 15c2-12 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT FOR CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO RULE 15c2-12(b)(1).
[Insert Insurer Language]
Appendix 2 to page 107 41
TABLE OF CONTENTS
INTRODUCTION ...... 1 General ...... 1 Lease Financing ...... 2 The 2020 Certificates ...... 3 Impact of COVID-19 ...... 4 AUTHORIZATION AND PURPOSE ...... 6 THE 2020 CERTIFICATES OF PARTICIPATION ...... 6 Form and Denomination ...... 6 Book-Entry Only System ...... 7 Optional Prepayment ...... 8 2020A Certificates ...... 8 2020B Certificates ...... 9 No Extraordinary Redemption of Series 2020 Certificates Upon Damage, Destruction or Condemnation ... 9 [Scheduled Mandatory Redemption] ...... 9 Method of Selecting 2020 Certificates for Prepayment ...... 9 Notice of Prepayment ...... 9 Completion Certificates ...... 10 Refunding Certificates ...... 10 Additional Certificates ...... 10 SECURITY FOR THE CERTIFICATES ...... 10 Master Lease Aspects ...... 10 Limited Obligation of the School Board ...... 11 Lease Payment Fund ...... 12 Municipal Bond Insurance ...... 13 No Reserve Account ...... 13 Funds and Accounts ...... 13 Default and Remedies ...... 14 Additional Series of Certificates ...... 14 BOND INSURANCE ...... 14 RISK FACTORS ...... 14 Annual Right of the School Board to Terminate Series 1999 Lease Agreement and Series 2020A Lease Agreement ...... 14
i Appendix 2 to page 107 42 No Right of Certificate Owners to Direct Remedies ...... 15 Limitation on Disposition; Ability to Sell or Re-let ...... 15 Tax Exemption ...... 15 Applicability of Securities Laws...... 16 Local Option Millage Revenues ...... 16 Construction Cost Maximums ...... 16 Additional Leases ...... 16 Additional Indebtedness ...... 17 Bond Insurance Risk Factors ...... 17 State Revenues ...... 17 Legislative Changes ...... 17 Property and Casualty Insurance ...... 17 Certain Constitutional Amendments ...... 17 Impacts of Weather; Climate Change ...... 18 Uncertain Impacts of COVID-19 ...... 18 Cybersecurity Risks ...... 18 THE MASTER LEASED PROJECTS ...... 18 THE SERIES 2020 PROJECT ...... 19 Description of Project ...... 19 Estimated Budget for the Series 2020 Project ...... 19 THE PRIOR PROJECTS ...... 19 Components of the Series 1999 Project ...... 19 Components of the Series 2004 Project ...... 20 Components of the Series 2007A Project ...... 20 Components of the Series 2019 Project ...... 20 THE MASTER LEASE PROGRAM ...... 20 The Series 2020A Ground Lease Agreement and Series 2010A Ground Lease Agreement ...... 20 The Master Lease...... 21 SOURCES AND USES OF 2020A CERTIFICATE PROCEEDS ...... 23 2020A Certificates ...... 23 2020B Certificates ...... 23 2020 CERTIFICATES PAYMENT SCHEDULES ...... 24 COMBINED CERTIFICATE PAYMENT SCHEDULE ...... 25 THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA ...... 26 General ...... 26
ii Appendix 2 to page 107 43 The School Board ...... 26 Administration ...... 27 Total School Personnel ...... 27 Employee Relations; Retirement and Other Postemployment Benefit Programs ...... 27 School Facilities, Enrollment and Other Information ...... 31 Profile of Enrollments ...... 31 Impact of Hurricane Michael...... 33 District Financial Operations and Accounting Practices ...... 33 Budget Process ...... 34 Governmental Revenues ...... 35 General Fund Balance Guidelines ...... 36 SELECTED FINANCIAL INFORMATION SCHOOL DISTRICT OF BAY COUNTY ...... 37 DISTRICT REVENUES...... 38 State Revenue Sources ...... 38 Special Revenue Sources ...... 40 Local Sources ...... 40 ANTICIPATED LOCAL OPTION MILLAGE LEVY REQUIRED TO COVER DEBT SERVICE ON THE CERTIFCATES ...... 43 AD VALOREM TAXATION ...... 43 Property Assessment Procedure ...... 44 Property Tax Reform ...... 44 Millage Rates ...... 45 Collection of Ad Valorem Taxes ...... 46 Assessed Valuation ...... 46 Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes ...... 47 Other Legislative Actions Affecting District Finances ...... 48 THE CORPORATION ...... 51 LEGAL MATTERS ...... 51 LITIGATION ...... 51 TAX EXEMPTION ...... 52 Tax Exemption ...... 52 Tax Treatment of Issuance Discount...... 53 Tax Treatment of Issuance Premium ...... 53 RATINGS ...... 54 FINANCIAL STATEMENTS ...... 55 FINANCIAL ADVISOR ...... 55
iii Appendix 2 to page 107 44 UNDERWRITING ...... 55 CONTINUING DISCLOSURE ...... 55 CONTINGENT FEES ...... 56 ACCURACY AND COMPLETENESS OF OFFERING STATEMENT ...... 56 FORWARD LOOKING STATEMENTS...... 56 AUTHORIZATION OF OFFERING STATEMENT ...... 56
APPENDICES
APPENDIX A GENERAL INFORMATION CONCERNING BAY COUNTY, FLORIDA
APPENDIX B EXCERPTED PAGES FROM THE AUDITED FINANCIAL STATEMENTS OF THE SCHOOL BOARD OF BAY COUNTY, FLORIDA FOR THE FISCAL YEAR ENDED JUNE 30, 2019
APPENDIX C DEFINITIONS APPLICABLE TO THE BASIC DOCUMENTS
APPENDIX D MASTER TRUST AGREEMENT AND FORMS OF SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT AND SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT
APPENDIX E MASTER LEASE PURCHASE AGREEMENT
APPENDIX F MASTER LEASE PURCHASE AGREEMENT AND FORMS OF LEASE SCHEDULE NO. 2020A AND SECOND AMENDED AND RESTATED LEASE SCHEDULE NO. 1999
APPENDIX G FORMS OF SERIES 2020A ASSIGNMENT AGREEMENT AND SERIES 2020B ASSIGNMENT AGREEMENT
APPENDIX H FORMS OF SERIES 2020A GROUND LEASE AGREEMENT AND ASSIGNMENT OF 2020A GROUND LEASE AND COPIES OF SERIES 2010A GROUND LEASE AGREEMENT AND ASSIGNMENT OF 2010A GROUND LEASE
APPENDIX I FORMS OF TAX OPINIONS OF SPECIAL COUNSEL
APPENDIX J FORM OF CONTINUING DISCLOSURE AGREEMENT
[APPENDIX K SPECIMEN MUNICIPAL BOND INSURANCE POLICY]
iv Appendix 2 to page 107 45 PRELIMINARY OFFERING STATEMENT
Related to
$______* $______* CERTIFICATES OF PARTICIPATION REFUNDING CERTIFICATES OF PARTICIPATION (School Board of Bay County, Florida, Master Lease Program, (School Board of Bay County, Florida, Master Lease Program, Series 2020A) Series 2020B) Evidencing an Undivided Proportionate Interest of Evidencing an Undivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by the School Board of Bay County, Florida the School Board of Bay County, Florida
INTRODUCTION
General
This Offering Statement, including the cover page, inside cover page and appendices hereto, is provided to furnish information with respect to The School Board of Bay County, Florida (the "School Board"), and the sale and delivery of $______aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) (the "2020A Certificates"), and $______aggregate principal amount of Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) (the "2020B Certificates" and, together with the 2020A Certificates, the “2020 Certificates”).
The 2020A Certificates are being issued pursuant to a Master Trust Agreement, dated as of November 1, 1994 (the “Master Trust”), as amended and supplemented by the Series 2020A Supplemental Trust Agreement, dated as of ______, 2020, by and among the School Board, the Bay County Education Facilities Finance Corporation, a Florida not-for-profit corporation, as lessor (the "Corporation"), and Hancock Whitney Bank, a Mississippi banking corporation having an office located in Baton Rouge, Louisiana, as successor trustee (the "Trustee"), which is also serving as Paying Agent and Registrar (the “Series 2020A Supplemental Trust Agreement”). The 2020B Certificates are being issued pursuant to the Master Trust, as amended and supplemented by the Series 2020B Supplemental Trust Agreement, dated as of ______, 2020, by and among the School Board, the Corporation, as lessor, and Trustee, which is also serving as Paying Agent and Registrar (the “Series 2020B Supplemental Trust Agreement”). The Master Trust, together with the Series 2020A Supplemental Trust Agreement, and 2020B Supplemental Trust Agreement are referred to herein, collectively, as the “Trust Agreement”. See "APPENDIX D – MASTER TRUST AGREEMENT AND FORMS OF SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT AND SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT " hereto.
The School Board is the governing body of the School District of Bay County, Florida (the "District"), and has entered into a Master Lease-Purchase Agreement, dated as of November 1, 1994 (the "Master Lease"), between the Corporation, as lessor, and the School Board, as lessee, for the purpose of lease purchasing from time to time certain educational facilities, sites and equipment ("Projects") from the Corporation. Projects to be leased from time to time are or will be identified on separate lease schedules (each a "Schedule") attached to the Master Lease. Upon execution and delivery thereof, each Schedule, together with the provisions of the Master Lease, will constitute a separate lease agreement (individually a "Lease" and collectively the "Leases").
Unless otherwise indicated, capitalized terms used in this Offering Statement shall have the same meanings established in the documents referenced in the foregoing paragraphs. See "APPENDIX C - DEFINITIONS APPLICABLE TO THE BASIC DOCUMENTS."
* Preliminary, subject to change.
Appendix 2 to page 107 46 Lease Financing
In February 1999, the School Board entered into Lease Schedule No. 1999 to the Master Lease, dated as of February 25, 1999 (together with the Master Lease, the "Original Series 1999 Lease Agreement"). Pursuant to the Original Series 1999 Lease Agreement the School Board lease-purchased certain educational and related facilities (the "Series 1999 Project"). The Original Series 1999 Lease Agreement was automatically renewable (subject to the School Board’s right of non-appropriation) annually through June 30, 2023. In connection with the execution and delivery of the Original Series 1999 Lease Agreement, the Trustee executed and delivered $41,500,000 aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 1999) (the "1999 Certificates"). In July 2010, the School Board amended and restated Lease Schedule No. 1999 in its entirety pursuant to the Amended and Restated Schedule No. 1999 (together with the Master Lease, the "Series 1999 Lease Agreement"). The Series 1999 Lease Agreement is automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, 2023. Pursuant to the Series 1999 Lease Agreement, the School Board is leasing the Series 1999 Project. In connection with the execution and delivery of the Series 1999 Lease Agreement, the Trustee executed and delivered $37,090,000 aggregate principal amount of Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2010A) (the "2010A Certificates"), which 2010A Certificates refunded the outstanding 1999 Certificates. As of the date of this Offering Statement, none of the Series 1999 Certificates are outstanding and $15,175,000 of the 2010A Certificates remain outstanding, all of which will be refunded and defeased upon issuance of the 2020B Certificates.
In July 2004, the School Board entered into Lease Schedule No. 2004 to the Master Lease, dated as of July 13, 2004 (together with the Master Lease, the "Original Series 2004 Lease Agreement"). Pursuant to the Series 2004 Lease Agreement the School Board lease-purchased certain educational and related facilities (the "Series 2004 Project"). The Series 2004 Lease Agreement was automatically renewable (subject to the School Board's right of non- appropriation) annually through June 30, 2024. In connection with the execution and delivery of the Series 2004 Lease Agreement, the Trustee executed and delivered $11,310,000 aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2004) (the "2004 Certificates"). In July, 2013, the School Board entered into the Amended and Restated Schedule No. 2004 to the Master Lease, dated as of July 1, 2013, which Amended and Restated Lease Schedule No. 2004 amended and restated Lease Schedule No. 2004 in its entirety (together with the Master Lease, the "Series 2004 Lease Agreement"). The Series 2004 Lease Agreement is automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, 2024. Pursuant to the Series 2004 Lease Agreement, the School Board is lease purchasing the Series 2004 Project. In connection with the execution and delivery of the Series 2004 Lease Agreement, the Trustee executed and delivered $7,152,900 aggregate principal amount of Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2013A) (the "2013A Certificates"), which 2013A Certificates refunded the 2004 Certificates maturing on and after July 1, 2015. As of the date of this Offering Statement, none of the Series 2004 Certificates are outstanding and $3,259,400 of the 2013A Certificates remain outstanding.
In April 2007, the School Board entered into Lease Schedule No. 2007A to the Master Lease, dated as of April 1, 2007 (together with the Master Lease, the "Original Series 2007A Lease Agreement"). Pursuant to the Series 2007A Lease Agreement the School Board lease-purchased certain educational and related facilities (the "Series 2007A Project"). The Series 2007A Lease Agreement was automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, 2029. In connection with the execution and delivery of the Series 2007A Lease Agreement, the Trustee executed and delivered $49,330,000 aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2007A) (the "2007A Certificates"). In March 2015, the School Board entered into the Amended and Restated Schedule No. 2007A to the Master Lease, dated as of March 1, 2015, which Amended and Restated Schedule No. 2007A amended and restated Lease Schedule No. 2007A in its entirety (together with the Master Lease, the "Series 2007A Lease Agreement"). The Series 2007A Lease Agreement is automatically renewable (subject to the School Board's right of non- appropriation) annually through June 30, 2029. Pursuant to the Series 2007A Lease Agreement, the School Board is lease-purchasing the Series 2007A Project. In connection with the execution and delivery of the Series 2007A Lease Agreement, the Trustee executed and delivered $49,065,000 aggregate principal amount of Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2015) (the "2015 Certificates"), which 2015 Certificates refunded the 2007A Certificates maturing on and after July 1, 2018. As of the date of this Offering Statement, none of the 2007A Certificates remain outstanding and $44,420,000 of the 2015 Certificates remain outstanding.
2 Appendix 2 to page 107 47
In December, 2019, the School Board entered into Lease Schedule No. 2019 to the Master Lease, dated as of December 1, 2019 (together with the Master Lease, the "Series 2019 Lease Agreement"). Pursuant to the Series 2019 Lease Agreement the School Board lease-purchased certain educational and related facilities (the "Series 2019 Project"). The Series 2019 Lease Agreement is automatically renewable (subject to the School Board's right of non- appropriation) annually through June 30, 2030. In connection with the execution and delivery of the Series 2019 Lease Agreement, the Trustee executed and delivered $30,250,000 aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2019) (the "2019 Certificates"). As of the date of this Offering Statement $30,250,000 of the 2019 Certificates remain outstanding.
The 2020 Certificates
The 2020A Certificates represent an undivided proportionate interest of the owners thereof in the right to receive the Basic Rent Payments payable under the Master Lease, as supplemented by Lease Schedule No. 2020A annexed thereto ("Schedule No. 2020A"), dated ______1, 2020 (the Master Lease and such Lease Schedule No. 2020A being herein collectively described as the "Series 2020A Lease Agreement"). The initial term of the Series 2020A Lease Agreement commences on the date of delivery of the Series 2020A Certificates and continues through and including June 30, 2020, and is automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, ______.
The 2020B Certificates represent an undivided proportionate interest of the owners thereof in the right to receive the Basic Rent Payments payable under the Master Lease, as supplemented by the Second Amended and Restated Lease Schedule No. 1999 annexed thereto ("Second Amended and Restated Schedule No. 1999"), dated July 1, 2020 (the Master Lease and such Second Amended and Restated Schedule No. 1999 being herein collectively described as the "Series 1999 Lease Agreement"). The term of the Series 1999 Lease Agreement continues through and including June 30, 2020, and is automatically renewable (subject to the School Board's right of non-appropriation) annually through June 30, 2023.
The 2020A Certificates, the 2020B Certificates, the 2013 Certificates, the 2015 Certificates and the 2019 Certificates, together with any additional Series of Certificates issued pursuant to the Trust Agreement, are referred to collectively herein as the "Certificates."
The following table provides a summary of the leases that the School Board will be a party to under the Master Lease following delivery of the 2020 Certificates, the Projects financed or refinanced thereby, the final renewal ending date, the related Series of Certificates and the outstanding amount of each final Series of Certificates:
Principal Related Final Related Series Amount Lease Project Renewal Date of Certificates Outstanding
Series 1999 Lease Agreement Series 1999 June 30, 2023 2020B $15,175,000 Project Certificates
Series 2004 Lease Agreement Series 2004 June 30, 2024 2013 $3,259,400 Project Certificates
Series 2007A Lease Agreement Series 2007A June 30, 2029 2015 $44,420,000 Project Certificates
Series 2019 Lease Agreement Series 2019 June 30, 2030 2019 $30,250,000 Project Certificates
Series 2020A Lease Agreement Series 2020A June 30, ____ 2020A $______Project Certificates
3 Appendix 2 to page 107 48 The rights, title and interest of the Corporation in the Series 2020A Lease Agreement and the Series 1999 Lease Agreement, including the right of the Corporation to receive Basic Rent, to use, sell and re-let projects and to exercise remedies thereunder, other than its rights to indemnification, its right to enter into additional Lease Schedules and its obligation not to impair the tax status of the 2020 Certificates, have been irrevocably assigned by outright assignment to the Trustee pursuant to a Series 2020A Assignment Agreement, dated as of ______, 2020 (the "Series 2020A Assignment") and a Series 2020B Assignment Agreement, dated as of ______, 2020 (the “Series 2020B Assignment”), respectively. See "APPENDIX G – FORMS OF SERIES 2020A ASSIGNMENT AGREEMENT AND SERIES 2020B ASSIGNMENT AGREEMENT" hereto.
The School Board is also entering into a Series 2020A Ground Lease Agreement, dated as of ______, 2020 (the "Series 2020A Ground Lease") with the Corporation whereby the School Board will grant to the Corporation for the benefit of the 2020A Certificates Owners a leasehold estate in the land on which the Series 2020A Project will be located. The Corporation’s interest in the Series 2020A Ground Lease is being assigned to the Trustee as additional security for the 2020A Certificates pursuant to an Assignment of Series 2020A Ground Lease dated as of ______1, 2020. The School Board has previously entered into a Series 2010A Ground Lease Agreement, dated as of ______, 2010 (the “Series 2010A Ground Lease” with the Corporation whereby the School Board granted to the Corporation a leasehold estate in the land on which the Series 1999 Project is located. The Corporation’s interest in the Series 2010A Ground Lease was assigned to the Trustee as additional security for the 2020B Certificates, pursuant to a Series 2010A Assignment of Ground Lease dated as of July 1, 2010. See "THE SERIES 2020 PROJECT" herein. See "APPENDIX H – SERIES 2010A GROUND LEASE AGREEMENT AND ASSIGNMENT OF SERIES 2010A GROUND LEASE AND FORMS OF SERIES 2020A GROUND LEASE AGREEMENT AND ASSIGNMENT OF SERIES 2020A GROUND LEASE" hereto.
[The scheduled payment of principal and interest in respect of all, some or none of the 2020 Certificates of either Series when due, will be guaranteed under an insurance policy to be issued concurrently with the delivery of the 2020 Certificates by ______. ("______" or the "Insurer"). See "BOND INSURANCE" herein.]
The School Board has agreed and undertaken, for the benefit of 2020 Certificates Owners, to provide certain annual financial information and operating data and certain material event notices when and if they occur relating to the District and the 2020 Certificates pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended. See "CONTINUING DISCLOSURE" herein.
Brief descriptions of the 2020 Certificates, the School Board, the Corporation, the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, the Series 2020A Assignment Agreement, the Series 2020B Assignment Agreement, the Series 2020A Ground Lease Agreement and Assignment of Series 2020A Ground Lease and the Series 2010A Ground Lease Agreement and Assignment of Series 2010A Ground Lease are included in this Offering Statement. All references herein to the 2020 Certificates, the School Board, the Corporation, the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, the Series 2020A Assignment Agreement, the Series 2020B Assignment Agreement, the Series 2020A Ground Lease Agreement and Assignment of Series 2020A Ground Lease and the Series 2010A Ground Lease Agreement and Assignment of Series 2010A Ground Lease are qualified in their entirety by reference to the respective complete documents. Copies or forms of the Master Trust Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, the Master Lease Purchase Agreement, the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the Series 2020A Assignment Agreement, the Series 2020B Assignment Agreement, the Series 2010A Ground Lease Agreement and Assignment of Series 2010A Ground Lease and the Series 2020A Ground Lease Agreement and Assignment of Series 2020A Ground Lease are included herein within Appendices D, E, F, G and H. This Offering Statement speaks only as of its date and the information contained herein is subject to change. This Offering Statement and any continuing disclosure documents of the School Board are intended to be made available through the office of the School Board's Chief Finance Officer, Jim Loyed, 1311 Balboa Avenue, Panama City, Florida 32401.
Impact of COVID-19 [Disclosure per R-J. Confirm and update.]
4 Appendix 2 to page 107 49 The Novel Coronavirus 2019 ("COVID-19") pandemic, along with various governmental measures taken to protect public health in light of the pandemic, has had an adverse impact on global financial markets and economies, including financial markets and economic conditions in the United States. The impact of the COVID-19 pandemic on the U.S. economy is expected to be broad based and to negatively impact national, state and local economies. In response to such expectations, President Trump on March 13, 2020, declared a "national emergency," which, among other effects, allows the executive branch to disburse disaster relief funds to address the COVID-19 pandemic and related economic dislocation.
On March 9, 2020, Florida Governor Ron DeSantis declared a state of emergency in Florida due to the spread of COVID-19 (the "Gubernatorial Disaster Proclamation"). In addition, the Governor signed various executive orders that have, among other effects, (i) closed all bars and restaurants to dine-in customers, (ii) suspended new reservations for vacation rentals through April 30, 2020 and (ii) issued a "Safer at Home" order which closes non-essential businesses and prohibits all public and private gatherings of 10 people or more for the duration of the Gubernatorial Disaster Proclamation, other than for religious activities.
The State’s finances are likely to be adversely affected by the continued spread of COVID-19, the various governmental actions in response thereto and changes in the behavior of businesses and people. The State derives a significant portion of its annual revenues from the collection of sales tax. The impact of COVID-19 is expected to result in significant decreases in state and local sales tax revenues as a result of decreased tourism and commercial activity throughout the State. The District currently cannot predict what impact this will have on the level of State funding the District receives or on the District's collection of sale surtax revenues and other local revenues. See "DISTRICT REVENUES – State Sources" and "–Local Sources," and "RISK FACTORS – State Revenues" herein.
On March 17, 2020, the Florida Department of Education issued guidance closing all schools in the State through April 15, 2020, which has subsequently been extended to May 1, 2020 and then through the remainder of the 2019-2020 school year. Commencing March 30, 2020, the District began distance learning for its students. Additionally, all employees have been advised to work from home. While the District schools are physically closed to students, instruction and services to student continue at all schools. All District faculty have prepared plans that continued instructional delivery and the District has in place an operational strategy for all essential operations through the end of the 2019-20 school year. To date, there has been no short-term impact on the revenues of the District as a result of school closings and distance learning and the District's expenses for Fiscal Year 2019-20 are not expected to be materially affected.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was signed into law. Among other provisions, the CARES Act created an Education Stabilization Fund to support K-12 schools and colleges and universities during the COVID-19 outbreak. The Educational Stabilization Fund includes a total of $30.75 billion in relief divided into three separate pools: (1) funds to K-12 schools; (2) funds to higher education; and (3) funds to governors. Florida is projected to receive approximately $724.4 million in funds for K-12 schools, approximately $791.4 million in funds for higher education and approximately $173 million in funds to the Governor for use as grants to local educational agencies. Funds for K-12 schools are expected to be distributed to school districts and charter schools based on their share of Title I-A funds. The District expects to receive approximately $____ million of such funds. [portion of funds to charters?] Funds to local districts can be used for coronavirus-response activities, such as planning for and coordinating during long-term school closures, purchasing educational technology to support online learning for all students, and additional activities authorized by federal elementary and secondary education laws. Funds in the Governor’s Education Relief Fund can be used at the Governor's discretion to provide emergency support grants to K-12 schools, colleges and universities and child care/early education providers. The CARES Act requires that any entity that receives funds from the education stabilization fund must continue to pay its employees and contractors to the extent practicable during the period of any disruptions or closures related to coronavirus. The District cannot currently predict the full impact of the CARES Act on the District's operations.
Due to the evolving nature of the outbreak and federal, State and local responses thereto, the long-term impacts of the COVID-19 crisis are unknown and dependent on factors such as the length of any shutdown or partial inaccessibility of school facilities, the extent to which the faculty and staff or the student population is directly affected and is unable to attend class, teach or provide services, and the impact on the economy as a whole within the State. The District cannot predict whether there will be any increased costs associated with this or any other potential disease outbreak, including whether there will be an increase in operational costs incurred to implement distance learning
5 Appendix 2 to page 107 50 strategies or to clean, sanitize and maintain its facilities. The School Board also cannot predict with certainty the potential long-term impacts of the outbreak on the District's revenues, including whether there will be a reduction in State funding, a reduction in taxable assessed values of properties in the District, or a reduction in ad valorem tax collections (including Local Optional Millage Levy revenues), educational impact fees and Sales Surtax revenues.
AUTHORIZATION AND PURPOSE
Pursuant to the applicable provisions of Florida law, including particularly Chapters 1000-1013, Florida Statutes, as amended, the School Board has the power and authority to enter into transactions such as that contemplated by the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the 2020 Ground Lease and the Trust Agreement. The School Board authorized such action pursuant to a resolution adopted by the School Board on April 28, 2020.
The 2020A Certificates are being issued to provide funds for the purposes of (i) financing the acquisition, construction and equipping of certain educational facilities and equipment in the District to be leased to the School Board, as more particularly described herein (the “Series 2020 Project”), and (ii) paying certain costs of issuance with respect to the 2020A Certificates, including the premium on the insurance policy. See "THE SERIES 2020 PROJECT" herein.
The 2020B Certificates are being issued to provide funds for the purposes of (i) refunding, on a current basis, all of the outstanding 2010A Certificates maturing on or after July 1, 2021 and (ii) paying certain costs of issuance with respect to the 2020B Certificates, including the premium on the insurance policy.
THE 2020 CERTIFICATES OF PARTICIPATION
Form and Denomination
The 2020 Certificates are issuable as fully registered Certificates in denominations of $5,000 or any integral multiple thereof. The 2020 Certificates will be dated their date of delivery and mature in the years and principal amounts, and accrue interest at the rates, set forth on the inside cover page of this Offering Statement. The interest component of Basic Rent Payments represented by the 2020 Certificates is payable on January 1 and July 1 of each year (each "Payment Date"), commencing [July 1, 2020]. Said interest component represents an undivided proportionate interest in the Interest Component of Basic Rent Payments due on December 15 and June 15 prior to each Payment Date as set forth on Lease Schedule No. 2020A and Second Amended and Restated Lease Schedule No. 1999, respectively, at the rates set forth on the inside cover page hereof.
The Series 2020 Certificates will initially be issued exclusively in "book-entry" form and ownership of one fully registered Series 2020 Certificate for each maturity as set forth on the inside cover page, each in the aggregate principal amount of such maturity, will be initially registered in the name of "Cede & Co." as nominee of The Depository Trust Company, New York, New York ("DTC"). The Principal Component and Interest Component of Basic Rent Payments represented by the Series 2020 Certificates are payable in the manner set forth under " - Book- Entry Only System" herein. Except as otherwise provided in connection with a book-entry system, interest will be paid by check or draft of the Trustee, as Paying Agent and Registrar, mailed on each Payment Date to the Owners of the 2020 Certificates listed in the registration books maintained by the Trustee on the fifteenth day of the month (whether or not a business day) next preceding each Payment Date. At the written request and expense of any Owner of at least $1,000,000 in principal amount of 2020A Certificates or $1,000,000 in principal amount of the 2020B Certificates, interest shall be paid by wire transfer to a bank account located in the continental United States and designated in writing to the Trustee by the Owner thereof at least five (5) days prior to a Payment Date.
The principal amount of the 2020A Certificates payable at maturity or upon earlier prepayment thereof shall represent an undivided proportionate interest in the Principal Component of Basic Rent Payments on each of the dates set forth on Lease Schedule No. 2020A to the Master Lease. The principal amount of the 2020B Certificates payable at maturity or upon earlier prepayment thereof shall represent an undivided proportionate interest in the Principal Component of Basic Rent Payments on each of the dates set forth on the Second Amended and Restated Lease
6 Appendix 2 to page 107 51 Schedule No. 1999 to the Master Lease. The Principal Component of Basic Rent Payments represented by the 2020A Certificates and Series 2020B Certificates is payable to the Owner thereof upon presentation, when due, at maturity or upon earlier prepayment, at the designated corporate trust office of the Trustee in Baton Rouge, Louisiana.
Book-Entry Only System
THE INFORMATION IN THIS SECTION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM DTC. NEITHER THE CORPORATION NOR THE SCHOOL BOARD TAKE ANY RESPONSIBILITY FOR THE ACCURACY THEREOF.
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the 2020 Certificates. The 2020 Certificates will be issued as fully-registered securities in the name of Cede & Co., (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered bond certificate will be issued for each maturity of the 2020 Certificates 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 Paying 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 and trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the “Indirect Participants”). DTC has Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of 2020 Certificates under the DTC system must be made by and through Direct Participants, which will receive a credit for the 2020 Certificates on DTC’s records. The ownership interest of each actual purchaser of each actual purchaser of each 2020 Certificate (“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 their transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners entered into the transaction. Transfers of ownership interests in the 2020 Certificates are to be accomplished by entries made on the books of DTC Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2020 Certificates, except in the event that the use of the book-entry system for the 2020 Certificates is discontinued.
To facilitate subsequent transfers, all 2020 Certificates 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 2020 Certificates with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2020 Certificates; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2020 Certificates 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.
7 Appendix 2 to page 107 52 Beneficial Owners of 2020 Certificates may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2020 Certificates, such as prepayments, defaults and proposed amendments to the Series 2020 documents. For example, Beneficial Owners of 2020 Certificates may wish to ascertain that the nominee holding the 2020 Certificates 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 Trustee and request that copies of notices be provided directly to them.
Prepayment notices shall be sent to DTC by the Trustee. If less than all of the 2020 Certificates are being prepaid, DTC’s practice is to determine by lot the amount of the beneficial interest of each Direct Participant in such 2020 Certificates to be prepaid.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to 2020 Certificates unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the School Board as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the 2020 Certificates are credited on the record date (identified in a listing attached to the Omnibus Proxy).
The Trustee will make payments of principal of, premium, if any, and interest on the 2020 Certificates to 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 detailed information from the School Board or the Trustee on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC (nor its nominee), the School Board or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of prepayment 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 School Board and/or the Trustee for the 2020 Certificates. Disbursement of such payments to Direct Participants is the responsibility of DTC; and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the 2020 Certificates at any time by giving reasonable notice to the School Board. Under such circumstances, in the event that a successor securities depository is not obtained, 2020 Certificates are required to be printed and delivered. In addition, the School Board may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, 2020 Certificates will be printed and delivered to DTC.
NEITHER THE SCHOOL BOARD NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE BENEFICIAL OWNERS, DTC PARTICIPANTS OR THE PERSONS FOR WHOM DTC PARTICIPANTS ACT AS NOMINEES WITH RESPECT TO THE 2020 CERTIFICATES FOR THE ACCURACY OF RECORDS OF DTC, CEDE & CO. OR ANY DTC PARTICIPANT WITH RESPECT TO THE 2020 CERTIFICATES OR THE PROVIDING OF NOTICE OR PAYMENT OF PRINCIPAL, OR INTEREST, OR ANY PREMIUM ON THE 2020 CERTIFICATES, TO DTC PARTICIPANTS OR BENEFICIAL OWNERS, OR THE SELECTION OF 2020 CERTIFICATES FOR PREPAYMENT.
Optional Prepayment
2020A Certificates
The 2020A Certificates maturing on or before July 1, ____ shall not be subject to prepayment at the option of the School Board.
The 2020A Certificates maturing on or after July 1, ____ shall be subject to prepayment from prepayments of Basic Rent made by the School Board pursuant to the Series 2020A Lease Agreement, in whole or in part on ______or any date thereafter, and if in part, in such order of maturities as may be designated by the School Board, or if not so designated, in the inverse order of maturities, and by lot within a maturity in such manner as may
8 Appendix 2 to page 107 53 be designated by the Trustee, [at a Prepayment Price of 100% of the principal amount of the 2020A Certificates to be prepaid], plus accrued and unpaid interest thereon to the prepayment date.
2020B Certificates
The 2020B Certificates shall not be subject to prepayment at the option of the School Board.
No Extraordinary Redemption of Series 2020 Certificates Upon Damage, Destruction or Condemnation
The Series 2020A Certificates are not subject to extraordinary prepayment prior to maturity in the event of damage, destruction or condemnation of the Series 2020A Project. Notwithstanding the provisions set forth in Sections 5.08(c) and (d) of the Master Lease, if the Net Proceeds related to the Series 2020A Project are not greater than the amount of the Lease Payments represented by the Series 2020A Certificates coming due in the immediately following fiscal year, then such amounts shall be used first, to pay the Interest Component of the 2020A Certificates for the next two interest Payment Dates and then to pay the Principal Component next coming due. In the event such Net Proceeds are greater than the amount of the Lease Payments coming due with respect to the 2020A Certificates in the immediately following fiscal year, at the option of the Board, the Board shall apply the portion of the Net Proceeds of such insurance or condemnation award to (i) the acquisition, construction and installation of other Land and/or Buildings to be used for educational purposes that will be subject to Lease Schedule No. 2020A, or (ii) upon receipt of an approving opinion of Special Counsel, to the applicable Subaccount of the Interest Account or Subaccount of the Principal Account to be credited against the payments next due to such accounts or subaccounts.
The Series 2020B Certificates are not subject to extraordinary prepayment prior to maturity in the event of damage, destruction or condemnation of the Series 1999 Project. Notwithstanding the provisions set forth in Sections 5.08(c) and (d) of the Master Lease, if the Net Proceeds related to the Series 1999 Project are not greater than the amount of the Lease Payments represented by the Series 2020B Certificates coming due in the immediately following fiscal year, then such amounts shall be used first, to pay the Interest Component of the 2020B Certificates for the next two interest Payment Dates and then to pay the Principal Component next coming due. In the event such Net Proceeds are greater than the amount of the Lease Payments coming due with respect to the 2020B Certificates in the immediately following fiscal year, at the option of the Board, the Board shall apply the portion of the Net Proceeds of such insurance or condemnation award to (i) the acquisition, construction and installation of other Land and/or Buildings to be used for educational purposes that will be subject to the Amended and Restated Lease Schedule 1999, or (ii) upon receipt of an approving opinion of Special Counsel, to the applicable Subaccount of the Interest Account or Subaccount of the Principal Account to be credited against the payments next due to such accounts or subaccounts.
[Scheduled Mandatory Redemption of Series 2020A Certificates]
Method of Selecting 2020A Certificates for Prepayment
As long as a book-entry only system is used for determining beneficial ownership of 2020A Certificates, selection of 2020A Certificates for prepayment will be subject to DTC rules and procedures.
When 2020A Certificates are to be selected for prepayment by lot, selection of 2020A Certificates for prepayment shall be in such manner as the Trustee shall determine; provided, however, that the portion of any 2020A Certificates to be prepaid shall be in the principal amount of $5,000 or any whole multiple thereof, and that in selecting portions of 2020A Certificates for prepayment, the Trustee shall treat each such 2020A Certificates as representing the number of 2020A Certificates which is obtained by dividing the principal amount with respect to such Series of 2020A Certificates by $5,000.
Upon any prepayment pursuant to the Trust Agreement, the Trustee shall provide the School Board with, or cause to be provided, a revised schedule of Basic Rent Payments, which schedule shall take into account such prepayment and shall be and become for all purposes part of the Lease Agreement.
2020A Certificates so prepaid, presented and surrendered shall be canceled upon the surrender thereof.
Notice of Prepayment
9 Appendix 2 to page 107 54
As long as a book-entry only system is used for determining beneficial ownership of 2020A Certificates, notice of prepayment will only be sent to DTC. DTC will be responsible for notifying the DTC Participants, which will in turn be responsible for notifying the Beneficial Owners (as defined herein). Any failure of DTC to notify any DTC Participant, or of any DTC participant to notify the Beneficial Owner of any such notice, will not affect the validity of the prepayment of the 2020A Certificates.
Notice of prepayment of the 2020A Certificates shall be mailed, postage prepaid, not more than sixty (60) days nor fewer than thirty (30) days prior to the date of prepayment, to the Owners of such 2020A Certificates to be prepaid. Such mailing shall not be a condition precedent to such prepayment, and failure to mail any such notice, or any defect in such notice as mailed, shall not affect the validity of the proceeding for the prepayment of the 2020A Certificates. Notice of any prepayment of Series 2020A Certificates may state that the proposed prepayment is conditioned on there being on deposit in the applicable fund or account on the prepayment date sufficient funds to pay the full prepayment price of the Series 2020A Certificates to be prepaid or any other conditions as may be set forth in such notice of prepayment.
Completion Certificates
Completion Certificates may be issued to provide necessary funds to complete payment of the Costs of the Series 2020 Project or to finance additional property which shall be added to the Series 2020 Project or which shall be substituted for a portion of the Series 2020 Project. Such Completion Certificates, for purposes of the Series 2020A Supplement Trust Agreement, the Series 2020A Lease Agreement, the 2020A Ground Lease and the Assignment of Series 2020A Ground Lease, shall constitute a part of the 2020A Certificates.
Refunding Certificates
Refunding Certificates may be issued under and secured by the Trust Agreement, at any time or times, for the purposes of (i) providing funds for refunding part or all of the 2020 Certificates at or prior to their maturity or maturities, including the payment of any Prepayment Premium thereon and interest which will accrue on such 2020 Certificates to their date of payment, (ii) making a deposit, as necessary, to the subaccount of the Reserve Account which shall secure such Refunding Certificates, and (iii) paying the Costs of Issuance relating to said Refunding Certificates.
In order to issue Refunding Certificates the Trustee must have received, among other items, a report of a certified public accountant or firm of certified public accountants verifying the mathematical accuracy of calculations supplied by the School Board, or its designee, that the proceeds of such Refunding Certificates plus any other moneys available for such purpose, including investment earnings, shall be not less than an amount sufficient to pay the principal of and the Prepayment Premium, if any, on the 2020 Certificates to be refunded and the Interest Component of the Basic Rent represented by such 2020 Certificates which will accrue thereon to the prepayment date or maturity dates applicable thereto.
Other than amounts required to pay Costs of Issuance or to make deposits to the appropriate subaccount of the Reserve Account, the proceeds of such Refunding Certificates and any other moneys received by the Trustee for such purpose, shall be held by the Trustee in a special fund appropriately designated, to be held in trust for the sole and exclusive purpose of paying the principal of, Prepayment Premium if any, and interest on the 2020 Certificates to be refunded, all as provided in the Trust Agreement. The Refunding Certificates shall be secured in the same manner as the 2020 Certificates to be refunded in accordance with the terms of the Trust Agreement.
Additional Certificates
Additional Series of Certificates may be issued under the Trust Agreement to finance additional Projects under the Master Lease. See “SECURITY FOR THE CERTIFICATES – Additional Series of Certificates.”
SECURITY FOR THE CERTIFICATES
Master Lease Aspects
10 Appendix 2 to page 107 55
The Master Lease contemplates that the relationship between the School Board and the Corporation will be a continuing one, that Projects in addition to the Series 1999 Project, the Series 2004 Project, the Series 2007A Project, the Series 2019 Project and the Series 2020A Project may be added to the Master Lease from time to time, and that additional Certificates in addition to the 2013 Certificates, the 2015 Certificates, the 2019 Certificates and the 2020 Certificates will be issued under the Trust Agreement in connection with such Projects. The proceeds of the 2013 Certificates were used to refinance the costs of the Series 2004 Project, the proceeds of the 2015 Certificates were used to refinance the costs of the Series 2007A Project, the proceeds of the 2019 Certificates were used to finance the Series 2019 Project, the proceeds of the 2020A Certificates will be used to finance the Series 2020 Project and the proceeds of the 2020B Certificates will be used to refinance the Series 1999 Project. Upon payment of all Lease Payments with respect to a particular Project, such Project shall be removed from the related Lease and Ground Lease, and the School Board shall be under no further obligation to appropriate funds with respect to such Project. See "THE PRIOR PROJECTS" for a description of the Series 1999 Project, the Series 2004 Project, the Series 2007A Project and the Series 2019 Project.
The Series 2020A Lease Agreement is automatically renewable annually through June 30, ____. The owners of the 2020A Certificates shall have no claim against, nor receive any benefits from any portion of the Trust Estate derived from the sale, re-letting or other disposition of Projects, other than the Series 2020A Project, or any cash, securities or investments in the Pledged Accounts, other than the Series 2020A Pledged Accounts. The Series 1999 Lease Agreement is automatically renewable annually through June 30, 2023. The owners of the 2020B Certificates shall have no claim against, nor receive any benefits from any portion of the Trust Estate derived from the sale, re- letting or other disposition of Projects, other than the Series 1999 Project, or any cash, securities or investments in the Pledged Accounts, other than the Series 2020B Pledged Accounts. See "THE 2020 CERTIFICATES OF PARTICIPATION – Completion Certificates” and SECURITY FOR THE CERTIFICATES - Lease Payment Fund," "- Additional Series of Certificates" herein.
Limited Obligation of the School Board
The obligation of the School Board to pay Lease Payments, which includes Basic Rent Payments and Supplemental Rent Payments under the Series 2020A Lease Agreement, is a limited and special obligation, payable solely from moneys appropriated by the School Board from the School Board's Available Revenues (herein described). There shall be credited against such obligation moneys, if any, on deposit with the Trustee in certain accounts pledged under the Trust Agreement and from amounts, if any, realized from the exercise of remedies with respect to the Series 2020 Project by the Trustee on behalf of 2020A Certificates Owners. Such Basic Rent is subject to annual appropriation by the School Board and the Series 2020A Lease Agreement shall be terminated upon the occurrence of an Event of Non-Appropriation. An "Event of Non-Appropriation" will occur if the School Board does not approve a tentative Budget and a final Budget in accordance with State law which appropriates sufficient funds from Available Revenues to continue making Basic Rent in full for all Projects (including the Series 2020 Project) leased under the Master Lease beyond the end of such initial Lease Term or Renewal Lease Term for the following Renewal Lease Term. The Lease Term shall be deemed renewed pending the enactment of the final Budget and the School Board shall be liable for any Basic Rent and other obligations under the Master Lease coming due during such period but only if the tentative Budget and the final Budget make available to the School Board moneys which may be legally used to make the Basic Rent and pay such other obligations coming due during such period. Upon the occurrence of an Event of Non-Appropriation, the School Board will not be obligated to pay Basic Rent under the Series 2020A Lease Agreement beyond the then current Fiscal Year.
While the School Board is not legally obligated to do so, it has represented in the Master Lease that it is its present intent to continue: (i) the Series 2020A Lease Agreement with respect to the Series 2020 Project for the Maximum Lease Term of the Series 2020 Project (ending June 30, ____), and (ii) the Second Amended and Restated Lease Schedule No. 1999 of the Series 1999 Project (ending June 30, 2023). Subject to the right of non-appropriation, the School Board has agreed in the Master Lease to take such action as may be necessary to include all Basic Rent due under the Master Lease as a separately stated line item in its Budget and to appropriate in each Fiscal Year from Available Revenues an amount necessary to make the Basic Rent due in such Fiscal Year.
11 Appendix 2 to page 107 56 "Available Revenues" means the moneys and revenues of the School Board legally available under the Act to make the Basic Rent Payments. Available Revenues may include, but are not necessarily limited to, the hereinafter described Local Option Millage. See "DISTRICT REVENUES" herein.
In addition to issuing additional Series of Certificates under the Master Lease, the School Board may also issue additional indebtedness other than in connection with the Master Lease secured by its Available Revenues without the consent of the Owners of the Certificates. The incurrence of such additional indebtedness by the School Board may adversely affect the School Board's ability to make Basic Rent Payments under the Master Lease.
THE BASIC RENT PAYMENTS AND, CONSEQUENTLY, THE CERTIFICATE PAYMENTS OF PRINCIPAL AND INTEREST ARE PAYABLE SOLELY FROM THE SCHOOL BOARD'S AVAILABLE REVENUES AND NEITHER THE SCHOOL BOARD, THE STATE OF FLORIDA, NOR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF SHALL BE OBLIGATED TO PAY ANY SUMS DUE UNDER THE MASTER LEASE EXCEPT FROM AVAILABLE REVENUES APPROPRIATED FOR SUCH PURPOSE. THE BASIC RENT PAYMENTS DUE UNDER THE MASTER LEASE ARE SUBJECT TO ANNUAL APPROPRIATION BY THE SCHOOL BOARD ON AN ALL-OR-NONE BASIS. THE CERTIFICATE PAYMENTS OF PRINCIPAL AND INTEREST AND THE PAYMENTS DUE FROM THE SCHOOL BOARD UNDER THE MASTER LEASE AND THE CONTRACTUAL OBLIGATIONS OF THE SCHOOL BOARD UNDER THE MASTER LEASE DO NOT CONSTITUTE A GENERAL OBLIGATION OR A PLEDGE OF THE FAITH AND CREDIT OF THE SCHOOL BOARD, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. THE ISSUANCE OF THE 2020 CERTIFICATES WILL NOT DIRECTLY OR INDIRECTLY OBLIGATE THE SCHOOL BOARD, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, TO LEVY OR TO PLEDGE ANY FORM OF AD VALOREM TAXATION WHATSOEVER THEREFOR AND THE OWNERS OF THE 2020 CERTIFICATES WILL HAVE NO RECOURSE TO THE POWER OF AD VALOREM TAXATION OF THE SCHOOL BOARD OR ANY OTHER GOVERNMENTAL ENTITY.
THE SCHOOL BOARD IS NOT OBLIGATED TO APPROPRIATE AVAILABLE REVENUES TO MAKE BASIC RENT PAYMENTS. IF, FOR ANY FISCAL YEAR, THE SCHOOL BOARD DOES NOT APPROVE A BUDGET WHICH APPROPRIATES SUFFICIENT AVAILABLE REVENUES (WITHOUT REGARD TO ANY CREDITS FROM EARNINGS ON AMOUNTS HELD IN THE FUNDS AND ACCOUNTS ESTABLISHED UNDER THE TRUST AGREEMENT) IN A LINE ITEM SPECIFICALLY IDENTIFIED FOR PAYMENT OF ITS OBLIGATIONS UNDER THE MASTER LEASE, SUCH FAILURE SHALL CONSTITUTE AN EVENT OF NON-APPROPRIATION AND THE MASTER LEASE SHALL TERMINATE AS OF THE LAST DAY OF THE THEN INITIAL LEASE TERM OR THE LAST RENEWAL LEASE TERM FOR WHICH AVAILABLE REVENUES HAVE BEEN BUDGETED AND APPROPRIATED AND THE SCHOOL BOARD WILL NOT BE OBLIGATED TO MAKE ANY BASIC RENT PAYMENTS ACCRUING OR ARISING BEYOND SUCH LAST DAY. IN SUCH EVENT, THE SCHOOL BOARD IS REQUIRED TO SURRENDER USE, POSSESSION AND CONTROL OF ALL PROJECTS (OTHER THAN “DESIGNATED EQUIPMENT,” AS DEFINED IN EACH LEASE AGREEMENT) LEASED UNDER THE MASTER LEASE, INCLUDING THE SERIES 2020 PROJECT TO THE TRUSTEE.
Lease Payment Fund
The Trust Agreement provides for the establishment and maintenance of a single Lease Payment Fund, with a Principal Account and an Interest Account for deposit of Basic Rent Payments appropriated and paid under the Master Lease. With certain limited exceptions, separate subaccounts within the Principal Account and the Interest Account will be established upon the issuance of each additional Series of Certificates under the Trust Agreement. Basic Rent due under all Lease Schedules to the Master Lease is subject to annual appropriation by the School Board on an all-or-none basis and is payable on a parity basis solely from Available Revenues; provided that (i) Basic Rent with respect to a particular Lease Schedule and Series of Certificates may be additionally and separately secured by a Credit Facility or insurance policy and (ii) Owners of various Series of Certificates are not on a parity as to any amounts in the Reserve Account of the Lease Payment Fund. The School Board may enter into additional Lease Schedules from time to time, without limitation, for the lease purchase financing of additional Projects. Such additional Projects may be financed through the sale of additional Series of Certificates under the Trust Agreement.
12 Appendix 2 to page 107 57 THE SCHOOL BOARD MAY NOT BUDGET AND APPROPRIATE FOR BASIC RENT FOR ONLY ONE OR SOME COMBINATION OF THE PROJECTS LEASED UNDER THE MASTER LEASE; IT MUST BUDGET AND APPROPRIATE FOR ALL PROJECTS OR NONE OF THEM. There can be no assurance that sufficient funds will be appropriated or otherwise be made available to make all of the Lease Payments.
[Municipal Bond Insurance
The scheduled payment of principal and interest represented by those of the Series 2020A Certificates selected for insurance (the “Insured 2020A Certificates”), when due, and those of the Series 2020B Certificates selected for insurance (the “Insured 2020B Certificates”), when due, will be guaranteed under a policy of municipal bond insurance to be issued concurrently with the delivery of the Insured 2020A Certificates by ______. See "BOND INSURANCE" herein.]
No Reserve Account
THERE IS NO RESERVE ACCOUNT ESTABLISHED FOR THE 2020A CERTIFICATES. However, pursuant to a Supplemental Trust Agreement authorizing the issuance of any Series of Certificates, there may be established and maintained a separate Reserve Account to secure the payment of the principal and/or interest portion of the Basic Rent Payments related to such Series of Certificates. Each such Reserve Account shall secure only the Series of Certificates for which it has been established.
Funds and Accounts
Pursuant to the Trust Agreement, the following funds and accounts were established:
(1) the "School Board of Bay County, Florida Master Lease Project Fund" (the "Project Fund"), which consists of a Project Account, a Costs of Issuance Account and a Capitalized Interest Account;
(2) the "School Board of Bay County, Florida Master Lease Payment Fund" (the "Lease Payment Fund"), which consists of a Principal Account, Interest Account and Reserve Account;
(3) the "School Board of Bay County, Florida Master Lease Prepayment Fund" (the "Prepayment Fund"); and
(4) the "School Board of Bay County, Florida Master Lease Rebate Fund" (the "Rebate Fund").
Upon issuance of each Series of Certificates the Trustee is required to establish (i) a separate subaccount in the Principal Account, Interest Account, Project Account (if applicable), Capitalized Interest Account (if applicable), Costs of Issuance Account and Reserve Account (if applicable), and (ii) a separate account in the Prepayment Fund.
Basic Rent Payments paid to the Trustee, as assignee of the Corporation pursuant to the Master Lease and the Assignment, shall be deposited as received by the Trustee in the Lease Payment Fund and applied by the Trustee in the following manner and in the following order of priority:
(i) There shall be deposited to the subaccount of the Interest Account established for the payment of each Series of Certificates from the Interest Component of Basic Rent made in relation to such Series of Certificates an amount which shall be sufficient to pay the interest becoming due on each Series of Certificates on the next succeeding Payment Date. Moneys in each subaccount of the Interest Account shall be used to pay the interest on the Series of Certificates for which it was established as and when the same become due, whether by prepayment or otherwise, and for no other purpose. No further deposit need be made to the Interest Account when the moneys therein are equal to the interest coming due on all Outstanding Certificates on the next succeeding Payment Date.
(ii) There shall be deposited to the subaccount of the Principal Account established for the payment of each Series of Certificates from the Principal Component of Basic Rent made in relation to such Series of Certificates an amount which shall be sufficient to pay the principal and the Amortization Installment becoming
13 Appendix 2 to page 107 58 due on such Series of Certificates on the next succeeding principal Payment Date. Moneys in each subaccount of the Principal Account shall be used to pay the principal and Amortization Installments on the Series of Certificates for which it was established as and when the same shall mature or are prepaid, and for no other purpose. No further deposit need be made to the Principal Account when the moneys therein are equal to the principal and Amortization Installments coming due on all Outstanding Certificates on the next succeeding principal Payment Date.
Default and Remedies
Upon the occurrence of an Event of Default under the Trust Agreement (which includes the occurrence of an "Event of Default" or "Event of Non-Appropriation" under the Master Lease unless the Master Lease "Event of Default" has been remedied or waived), the Trustee is entitled to and, upon direction of Owners of a majority in aggregate principal amount of the Certificates (or, in lieu thereof, the Insurer, if any, provided it is not in default under the Policy) is required to, exercise a variety of remedies including, without limitation, any one or more of the following: (1) declare the principal of all Certificates of a Series due and payable (but only if the Master Lease has been terminated and only with the consent of the Insurer, if any, provided the Insurer is not in default under the related policy); (2) protect and enforce its rights and the rights of the Owners under the Trust Agreement, Master Lease or Ground Lease(s); and (3) take possession of the Projects (other than Designated Equipment) and sell, re-let or otherwise dispose of the Projects, or any portion thereof. [Confirm voting power of Insurer.]
Additional Series of Certificates
Series of Certificates in addition to the Certificates may be issued under the Trust Agreement for the purpose of funding the costs of new or additional Projects. Proceeds of additional Series of Certificates may also be used for the purpose of capitalizing interest on such Series of Certificates, and paying the costs of issuance applicable thereto. The number of Series of Certificates that may be created under the Trust Agreement is not limited. The aggregate principal amount of each Series of Certificates which may be issued, authenticated and delivered under the Trust Agreement is not limited except as set forth in the related Lease Schedule specifying the details of such Series.
Completion Certificates and Refunding Certificates may also be issued under the Trust Agreement. See "THE 2020 CERTIFICATES OF PARTICIPATION – Completion and Refunding Certificates".
[BOND INSURANCE]
[THE INFORMATION IN THE FOLLOWING SECTION CONCERNING THE POLICY AND [______] HAS BEEN OBTAINED FROM [______]. NONE OF THE SCHOOL BOARD, THE DISTRICT, THE CORPORATION OR THE UNDERWRITERS TAKES RESPONSIBILITY FOR THE ACCURACY THEREOF.]
[Insert Bond Insurance Language]
RISK FACTORS
A PURCHASE OF THE 2020 CERTIFICATES IS SUBJECT TO CERTAIN RISKS. EACH PROSPECTIVE INVESTOR IN THE 2020 CERTIFICATES IS ENCOURAGED TO READ THIS OFFERING STATEMENT IN ITS ENTIRETY. PARTICULAR ATTENTION SHOULD BE GIVEN TO THE FACTORS DESCRIBED BELOW WHICH, AMONG OTHERS, COULD AFFECT THE MARKET PRICE OF THE 2020 CERTIFICATES TO AN EXTENT THAT CANNOT BE DETERMINED.
Annual Right of the School Board to Terminate Series 1999 Lease Agreement and Series 2020A Lease Agreement
Although the School Board has determined that the Series 1999 Project and the Series 2020A Project are necessary to its operations and currently intends to continue the Series 1999 Lease Agreement and the Series 2020A
14 Appendix 2 to page 107 59 Lease Agreement for the Maximum Lease Terms thereof and has covenanted in the Series 1999 Lease Agreement and the Series 2020A Lease Agreement that the Superintendent will include a sufficient amount in the tentative budget and final budget to enable the School Board to make the Basic Rent Payments due in each Fiscal Year, the School Board is not required to appropriate funds for Basic Rent Payments. If for any Fiscal Year the School Board does not approve a tentative budget and a final budget which appropriates sufficient funds from Available Revenues in a line item specifically identified for payment of its obligations under the Master Lease, the Master Lease shall terminate as of the last day of the then initial Lease Term or last Renewal Lease Term for which moneys have been budgeted and appropriated with respect to the Series 1999 Project, the Series 2020 Project and all other Projects financed thereunder, and the School Board will not be obligated to make Basic Rent Payments accruing or arising thereafter, and the School Board shall be required to surrender use, possession and control of the Series 1999 Project, the Series 2020 Project (in each case, other than Designated Equipment), and all other Projects to the Trustee within thirty (30) Business Days.
The likelihood that the Series 1999 Lease Agreement and the Series 2020A Lease Agreement will be terminated as the result of an Event of Non-Appropriation is dependent upon certain factors that are beyond the control of the 2020 Certificates Owners, including the continuing future utility of the Series 1999 Project, the Series 2020 Project and other Projects to the School Board and change in population or demographics within the District.
No Right of Certificate Owners to Direct Remedies
Termination of the Master Lease will not result in termination of the policy issued by the Insurer. Unless the Insurer is in default of its payment obligations under the policy, the Insurer is entitled to control and direct any of the rights or remedies of the Trustee including the right to direct the Trustee as to whether or not to re-let or sell the Series 1999 Project or the Series 2020A Project. The Insurer may elect, subsequent to the termination of the Series 1999 Lease Agreement and the Series 2020A Lease Agreement, to accelerate the maturity of all of the 2020 Certificates outstanding, in which case the Principal and Interest Components of the Basic Rent Payments represented by the 2020 Certificates shall become due and payable immediately. If the Insurer does not elect to accelerate the maturity of all 2020 Certificates of a series outstanding, it has an obligation to continue to make payments to Insured 2020 Certificates Owners in accordance with the original schedule of Basic Rent Payments represented by the Insured 2020 Certificates. The Insurer, however, has no fiduciary responsibility to the Insured 2020 Certificates Owners with respect to the direction of such remedies and has no obligation to preserve the exclusion from gross income for federal income tax purposes of amounts paid to Insured 2020 Certificates Owners by the Insurer and designated as interest.
Limitation on Disposition; Ability to Sell or Re-let
Following an Event of Default under the Trust Agreement (which includes an Event of Non-Appropriation or Event of Default under the Master Lease), the Trustee may take possession of the Projects, including the Series 1999 Project and the Series 2020 Project (other than Designated Equipment) and sell or re-let its interest therein. The Trustee's ability to actually achieve such a disposition of the Projects is limited by its inability to convey fee simple title to the Projects. Moreover, due to the governmental nature of the Projects it is not certain whether a court would permit the exercise of the remedies to sell, re-let or dispose of Projects. Also, there is no assurance that the Trustee will be able to sell, re-let or dispose of the components of the Projects or that the Owners of the 2020 Certificates will obtain payment of all or any portion of the Principal Component or Interest Component thereof upon an Event of Default under the Trust Agreement.
Tax Exemption
Upon termination of the Master Lease, there is no assurance that payments made by the Trustee or the Insurer with respect to the 2020 Certificates and designated as interest will be excludable from gross income for federal income tax purposes. See "TAX EXEMPTION" herein.
15 Appendix 2 to page 107 60 Applicability of Securities Laws
After termination of the Master Lease, the transfer of 2020 Certificates may be subject to or conditioned upon compliance with the registration provisions of applicable federal and state securities laws. Accordingly, there is no assurance that liquidity of the 2020 Certificates will not be impaired following termination of the Master Lease.
Local Option Millage Revenues
The amount which can be realized by the School Board derived from the Local Option Millage Levy (as defined herein), the School Board's primary source of repayment of the 2020 Certificates, can be affected by a variety of factors not within the School Board's control, including, without limitation, fluctuations in the assessed valuation of the property within the County caused by local or national events including, without limitation, disruptions in the housing or financial markets and adverse environmental or weather events affecting the housing market within the District and the State. Additionally, the amount of general business activity, growth and new construction which occurs within the County can affect assessed valuations. There can therefore be no assurances that such revenues will not decrease in the event that such growth and new construction, for whatever reason, decreases or ceases altogether within the County. See "DISTRICT REVENUES" herein and "APPENDIX A - GENERAL INFORMATION RELATING TO BAY COUNTY, FLORIDA" attached hereto. The amounts derived from the Local Option Millage Levy have also been reduced in the past and may be further affected by changes in applicable law. See "AD VALOREM TAXATION - Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes" for information regarding legislation that requires the School Board to share Local Option Millage revenues with charter schools within the District.
Construction Cost Maximums
Section 1013.64(6)(b), Florida Statutes, prohibits a district school board from using funds from any sources for new construction of educational plant space with a total cost per student station, including change orders, greater than the amounts set forth in Section 1013.64(6)(b)1., Florida Statutes, as adjusted. However, if a contract for architectural and design services or for construction management services has been executed before July 1, 2017, a district school board may use funds from any sources for the new construction of educational plant space and such educational plant space is exempt from the total cost per student station requirements. As of July 1, 2019, if the new construction of educational plant space is subject to a lease-purchase agreement entered into pursuant to Section 1011.71(2)(e), Florida Statutes (such as the Series 2020A Lease Agreement), a district school board (i) may use certain local funding sources (including educational impact fees, and voter approved ad valorem taxes, in each case if legally available for such purpose) to pay for the new construction of educational plant space, and (ii) may, but is not required to, use the Local Option Millage Levy revenues and certain state funding sources to pay for the portion of the cost for new construction of educational plant space which does not exceed the total cost per student station requirements or for certain other costs that are not included in cost per student station calculation (such as legal and administrative costs, site improvement costs, costs related to hurricane sheltering/hardening and school security hardening/capital costs). The School Board entered into a contract for architectural and design services with respect to the Series 2020A Project on June 27, 2017. As such, the Series 2020A Project is exempt from the total cost per student station requirements of Section 1013.64(6)(b), Florida Statutes.
Additional Leases
The School Board may enter into other Leases in addition to the Series 2020A Lease Agreement, the Series 1999 Lease Agreement and the other existing Lease Agreements described herein. Failure to appropriate funds to make Basic Rent Payments under any such Lease will, or an event of default under any such Lease may, result in the termination of all Leases. Upon any such termination of all Leases, the School Board must surrender all Projects (other than Designated Equipment), including the Series 1999 Project and the Series 2020A Project (other than Designated Equipment), to the Trustee for sale or lease. The proceeds of any such disposition of Projects will be applied to the payment of the related Series of Certificates. Except as described herein, in no event will owners of either the 2020A Certificates or the 2020B Certificates have any interest in or right to any proceeds of the disposition of Projects financed with the proceeds of another Series of Certificates. The proceeds of any such disposition of the Series 2020A Project shall be applied to the payment of the 2020A Certificates, and the proceeds of any such disposition of the Series 1999 Project shall be applied to the payment of the 2020B Certificates, in each case after
16 Appendix 2 to page 107 61 payment of the Trustee's expenses. There can be no assurance that the remedies available to the Trustee upon any such termination of all Lease Schedules and the disposition of the Series 2020 Project and the Series 1999 Project (other than Designated Equipment) will produce sufficient amounts to pay the outstanding 2020A Certificates and 2020B Certificates, respectively.
Additional Indebtedness
In addition to additional Series of Certificates under the Master Lease, the School Board may also issue additional indebtedness other than in connection with the Master Lease secured by or payable from revenues which would otherwise be available to make Lease Payments without the consent of the Certificate Holders. The incurrence of such additional indebtedness by the School Board may adversely affect the School Board's ability or willingness to make Basic Lease Payments under the Leases.
Bond Insurance Risk Factors]
State Revenues
A large portion of the District's funding is derived from State sources. See "DISTRICT REVENUES - State Revenue Sources." A significantly large percentage of such State revenues are generated from the levy of the State sales tax. The amounts budgeted for distribution from the State to the District are subject to change in the event that projected revenues are not realized. The State has not yet approved a budget for fiscal year 2021.
Legislative Changes
During recent years, proposals have been introduced in the State Legislature that could, if enacted, have an effect on District funding sources and, possibly, make-up. In the past, legislation has been introduced that would reduce State funding for school districts, require that certain percentages of school district funding be spent on particular activities or impose additional funding or other requirements on school districts. Other proposals have sought to 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 historical levels. There can be no assurance that similar or additional legislative 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 District or its finances.
Property and Casualty Insurance
Principally as a result of the substantial property damage caused by hurricanes and other storms in Florida and other parts of the United States over the last several years, property insurance premiums have risen dramatically for Florida property owners. It has become impossible or economically impracticable for many school districts within the State to obtain property insurance with the level of coverage they have historically secured. The Master Lease contains provisions that require the District to maintain certain levels of property and casualty insurance coverage. The District's current property and casualty coverage is for $275 million for all perils, with a sublimit of $100 million for windstorm damage. The District's current policy renews on May 15, 2020 and while the District expects the policy to renew, the levels of coverage required by the Master Lease may not be available at commercially reasonable rates. In the event the District is unable to procure coverage as required by the Master Lease upon the expiration of the current policy, the District expects to either seek a waiver of such provisions for a certain period of time from the Holders or Credit Enhancers of the School Board's outstanding Certificates of Participation or enter into an amendment of the Master Lease with respect to such provisions. In the event the District suffers substantial damage to its property that is not covered by its current insurance or is not eligible for Federal reimbursement, the District's financial condition could be adversely impacted.
Certain Constitutional Amendments
17 Appendix 2 to page 107 62 See "AD VALOREM TAXATION — Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes” for information concerning certain amendments to the Florida Constitution and other legislative proposals that could materially adversely affect the District’s financial situation.
Impacts of Weather; Climate Change
Bay County is located along the Gulf of Mexico and as such is subject to damage from hurricanes and tropical storms. In October, 2018 Hurricane Michael, a category 5 hurricane, made landfall in Bay County and caused extensive damage and disruptions to the properties and students and employees of the District. While the financial impacts of Hurricane Michael were largely offset by insurance and federal and State aid, and ad valorem tax receipts securing the Certificates have not been materially reduced, there can be no assurance that another such catastrophic weather event will not have a material adverse impact on the District and its capacity to repay its debts. See “THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA – Impact of Hurricane Michael.”
Bay County is also subject to possible impacts from global warming, including rising water levels and more extreme weather.
Uncertain Impacts of COVID-19
As described in more detail under the caption “INTRODUCTION – Impact of COVID-19”, the District has been impacted by the COVID-19 virus and the efforts to combat it. Due to the evolving nature of the outbreak and federal, State and local responses thereto, the long-term impacts of the COVID-19 crisis are unknown and dependent on factors such as the length of any shutdown or partial inaccessibility of school facilities, the extent to which the faculty and staff or the student population is directly affected and is unable to attend class, teach or provide services, and the impact on the economy as a whole within the State. The District cannot predict whether there will be any increased costs associated with this or any other potential disease outbreak, including whether there will be an increase in operational costs incurred to implement distance learning strategies or to clean, sanitize and maintain its facilities. The School Board also cannot predict with certainty the potential long-term impacts of the outbreak on the District's revenues, including whether there will be a reduction in State funding, a reduction in taxable assessed values of properties in the District, or a reduction in ad valorem tax collections (including Local Optional Millage Levy revenues), educational impact fees and Sales Surtax revenues.
Cybersecurity Risks
As with any institution the District is subject to cybersecurity risks, including ransomware attacks and phishing scams. The District has had no successful attacks on its technology systems and is insured in the amount of $100,000 for losses resulting from the threat of a data breach. There can be no assurance, however, that such attacks will not cause material loss to the District in the future.
THE MASTER LEASED PROJECTS
The Series 2020A Project is being financed and the Series 1999 Project is being refinanced under the School Board's existing Master Lease as part of the School Board's master lease purchase program (the "Master Lease Program") with the Corporation. The Projects financed or refinanced by the School Board under the Master Lease Program are subject to annual appropriation on an all-or-none basis. For Fiscal Year 2019-20, of the District's 31 total operational schools (not including charter schools located within the County), there were six schools or related facilities and two additions to school facilities leased under the Master Lease. Based on the District's full time equivalent enrollment of approximately 19,620 students as of January 17, 2020, approximately 22.9% of the District's students are attending classes in, or otherwise utilizing, Projects leased under the Master Lease during the Fiscal Year 2019-20. Such percentage does not include the students expected to attend classes in, or otherwise utilize, the Series 2019 Project or the Series 2020A Project upon completion of such Projects. To determine the above percentage, the number of students attending each facility was calculated as follows: for schools that are built and operating, the number of students for the Fiscal Year 2019-20 was used; for the additions, the number of student stations attributable to each specific classroom or number of students served by such facility for Fiscal Year 2019-20 based on the type of school (elementary, middle or high) or facility (cafeteria, auditorium, gymnasium, etc.) was used. Under certain conditions set forth in the Master Lease, the School Board may substitute
18 Appendix 2 to page 107 63 or add components to the Projects and modify the plans and specifications thereof. For a complete description of the Projects under the Master Lease Program see "THE SERIES 2020 PROJECT" and "THE PRIOR PROJECTS" below.
Pursuant to the Master Lease, the School Board does not have the ability to appropriate Basic Rent Payments for one Project or some combination of Projects only. The School Board's annual appropriation for Basic Rent Payments must be for all Projects under the Master Lease Program or it must terminate all Projects under the Master Lease Program (other than certain Designated Equipment). Upon payment of all Lease Payments with respect to a particular Project, such Project shall be removed from the related Lease and Ground Lease, and the School Board shall be under no further obligation to appropriate funds with respect to such Project. In the event the School Board decides not to appropriate funds in its annual budget for all of such financed Projects, the School Board would, at the Trustee's option, have to surrender such Projects (except for certain Designated Equipment), including the Series 2020 Project to the Trustee for the benefit of the Owners of the Certificates which financed or refinanced such Projects.
THE SERIES 2020 PROJECT
Description of Project
The Series 2020 Project consists of the acquisition, construction and installation of certain educational facilities in the District to be financed under the Series 2020A Lease Agreement. All of the Series 2020 Project is located in Bay County, Florida. Under certain conditions set forth in the Series 2020A Lease Agreement, the School Board may substitute components of the Series 2020 Project and modify Plans and Specifications therefor. The Series 2020 Project is a new K-5 School, to be located on Back Beach Road in Panama City Beach, Florida on an approximately 45.63 acre site. The school will have 148,800 gross square feet of usable space. It is designed to house 800 students and grades kindergarten through five. The school is expected to open in August 2021.
The School Board has entered into an Interlocal Agreement with the Panama City Beach Visitors and Convention Bureau, Inc. (the “CVB”) providing for use by the CVB of a parking lot comprising a portion of the Series 2020 Project for the benefit of the Panama City Beach Sports Park and Complex, located adjacent to the Series 2020 Project on land leased from the School Board. The CVB’s use is restricted to times when the parking lot is not in use by students or teachers.
Estimated Budget for the Series 2020 Project
Planning and Design Construction Equipment Total Estimated Budget
$2,301,308 $37,862,867 $1,500,000 $41,664,175
THE PRIOR PROJECTS
Components of the Series 1999 Project
The Series 1999 Project consists of the of the acquisition, construction and installation of certain educational and ancillary facilities in the District which were originally financed by the 1999 Certificates and have been refinanced by the 2010A Certificates pursuant to the Series 1999 Lease Agreement. All of the Series 1999 Project is located in Bay County, Florida. Under certain conditions set forth in the Series 1999 Lease Agreement, the School Board may substitute components of the Series 1999 Project and modify the Plans and Specifications thereof. The following is a general description of facilities comprising the principal components of the Series 1999 Project:
1. J.R. Arnold High School was constructed on a 75-acre site on Back Beach Road, just north of the intersection of Alf Coleman and Back Beach Road, and consists of a complex of six one-and two-story structures with a maximum of 2,105 student stations for grades 9 through 12. The school contains approximately 315,000 gross square feet of classrooms, ancillary and support spaces and also includes playground facilities. The school was constructed to relieve overcrowding experienced in Bay, Mosley and Rutherford High Schools. The school was completed in August 2000.
19 Appendix 2 to page 107 64
Components of the Series 2004 Project
The Series 2004 Project consists of the acquisition, construction and installation of certain educational and ancillary facilities in the District. All of the Series 2004 Project is located in Bay County, Florida. Under certain conditions set forth in the Series 2004 Lease Agreement, the School Board may substitute components of the Series 2004 Project and modify the Plans and Specifications therefor. The following is a general description of facilities comprising the principal components of the Series 2004 Project:
1. Emerald Bay Academy was constructed on an approximately 6-acre site located at 1515 June Avenue. The facility consists of three classroom pods of four classrooms each, administrative, media and food service, totaling approximately 34,600 square feet, access road parking and playground. The facility was completed in October 2004.
2. New Horizons was constructed on an approximately 3-acre site located at 3100 Minnesota Avenue in Lynn Haven. The facility consists of 12 classrooms, labs, resource rooms, media and food service, totaling approximately 44,000 square feet, playground, covered walkways and parking. The facility was completed in June 2007.
Components of the Series 2007A Project
The Series 2007A Project consists of the construction and installation of certain educational facilities in the District financed under the Series 2007A Lease Agreement. Under certain conditions set forth in the Series 2007A Lease Agreement, the School Board may substitute components of the Series 2007A Project and modify Plans and Specifications therefor. The following is a general description of facilities comprising the principal components of the Series 2007A Project:
1. Breakfast Point Academy is located in Panama City Beach, Florida on an approximately 40-acre site. The school has 166,000 gross square feet of usable space. It is designed to house 1,200 students in grades kindergarten through eight. The school was completed in August 2008.
2. Deer Point Elementary School is located in Lynn Haven, Florida on an approximately 20-acre site. The school has 220,000 gross square feet of usable space. It is designed to house 800 students in grades kindergarten through five. The school was completed in December 2009 and opened in 2020.
Components of the Series 2019 Project
The Series 2019 Project consists of the construction and installation of certain educational facilities in the District financed under the Series 2019 Lease Agreement. Under certain conditions set forth in the Series 2019 Lease Agreement, the School Board may substitute components of the Series 2019 Project and modify Plans and Specifications therefor. The following is a general description of facilities comprising the principal components of the Series 2019 Project:
1. Jinks Middle School Gymnasium is located in Panama City, Florida and was damaged during Hurricane Michael. The new 20,600 square foot facility will house the school gymnasium with a new competition basketball court and two practice cross courts, a competition volleyball court and two practice cross courts, and a 3,000 square foot weight room. The gymnasium has seating capacity for 500 people.
2. Bay High School Classroom Wing is located in Panama City, Florida. The ______square foot addition will include new classrooms and school facilities.
THE MASTER LEASE PROGRAM
The Series 2020A Ground Lease Agreement and Series 2010A Ground Lease Agreement
20 Appendix 2 to page 107 65 Pursuant to the Series 2020A Ground Lease Agreement, the School Board, as Ground Lessor, has granted to the Corporation, as Ground Lessee, a leasehold estate in the real estate on which the Series 2020 Project is located (the "2020A Project Land"). The initial term of the Series 2020A Ground Lease Agreement commences the date of delivery of the 2020A Certificates and ends on the earlier of (a) the date on which the outstanding 2020A Certificates, any Certificates issued to refund the 2020A Certificates and any Completion Certificates related to the Series 2020 Project have been paid in full, or (b) June 30, _____ (both dates inclusive). Upon termination of the Master Lease the rental of the 2020A Project Land shall be increased to fair market value in accordance with the terms of the Series 2020A Ground Lease Agreement. The payment of such increased rent is subordinate to the obligation to pay the Principal Component and Interest Component of the Basic Rent Payments represented by the 2020A Certificates. Pursuant to the Assignment of Series 2020A Ground Lease, dated as of ______, the Corporation has assigned its interests in the Series 2020A Ground Lease Agreement to the Trustee for the benefit of Owners of the 2020A Certificates, and any Certificates issued to refund the foregoing, on a pro rata basis.
Pursuant to the Series 2010A Ground Lease Agreement, the School Board, as Ground Lessor, granted to the Corporation, as Ground Lessee, a leasehold estate in the real estate on which the Series 1999 Project is located (the "1999 Project Land"). The term of the Series 2010A Ground Lease Agreement ends on the earlier of (a) the date on which the outstanding 2020B Certificates and any Certificates issued to refund the 2020B Certificates have been paid in full, or (b) June 30, 2023 (both dates inclusive). Upon termination of the Master Lease the rental of the 1999 Project Land shall be increased to fair market value in accordance with the terms of the Series 2010A Ground Lease Agreement. The payment of such increased rent is subordinate to the obligation to pay the Principal Component and Interest Component of the Basic Rent Payments represented by the 2020B Certificates. Pursuant to the Assignment of Series 2010A Ground Lease, dated as of July 1, 2010, the Corporation assigned its interests in the Series 2010A Ground Lease Agreement to the Trustee for the benefit of Owners of the 2020B Certificates, and any Certificates issued to refund the foregoing, on a pro rata basis.
The foregoing does not attempt to completely summarize the provisions of the Series 2020A Ground Lease Agreement or the Series 2010A Ground Lease Agreement. See "APPENDIX H - SERIES 2010A GROUND LEASE AGREEMENT AND ASSIGNMENT OF 2010A GROUND LEASE AND FORMS OF SERIES 2020A GROUND LEASE AGREEMENT AND ASSIGNMENT OF 2020A GROUND LEASE."
The Master Lease
The Master Lease provides for the lease-purchase financing by the School Board from time to time of various real and/or personal property Projects, including the Series 2020 Project, that are described in various Lease Schedules to be attached to the Master Lease. The Master Lease provides the terms and conditions governing the lease of Projects, and the framework under which the School Board is obligated to pay Lease Payments to the Corporation for the Project described on a particular Lease Schedule. Lease Payments consist of Basic Rent Payments, the principal and interest components of which are set forth in each Lease Schedule, and Supplemental Rent set forth on such Lease Schedule, consisting of Trustee and Corporation fees and expenses, prepayment premiums and other financing expenses. Each Lease Schedule will describe the Project to be lease-purchased by the School Board and the details governing the particular lease transaction, including the obligation to make Basic Rent Payments for such Project and to pay Supplemental Rent.
Under the Trust Agreement, one or more Series of Certificates may be issued to obtain funds to be used to pay the costs of acquisition and construction of Projects. The proceeds of sale of the Certificates of each Series will be deposited with the Trustee and will be requisitioned by the School Board, acting as agent for the Corporation, to pay the costs of one or more related Projects. The Corporation has assigned its rights under the Master Lease, including its right to receive Basic Rent Payments from the School Board under all Lease Schedules, other than its right to indemnification, its right to enter into additional Lease Schedules and its obligation not to impair the tax status of the Certificates, to the Trustee for the benefit of owners of the Certificates of all Series in order to secure such Certificates, provided, however, that once moneys are deposited into a specific subaccount under the Trust Agreement for payment of a Series of Certificates, the Certificates of other Series are not collateralized by such moneys. Failure to appropriate any Lease Payment results in an Event of Non-Appropriation with respect to all Basic Rent set forth on all Lease Schedules to the Master Lease, and a default with respect to any obligation under the Master Lease or any Lease Schedule results in an Event of Default with respect to the entire Master Lease and all Lease Schedules thereto. Upon any such termination of all Leases, the School Board must surrender all Projects (other than Designated Equipment),
21 Appendix 2 to page 107 66 including the Series 1999 Project and the Series 2020A Project (other than Designated Equipment), to the Trustee for sale or lease. The owners of the 2020A Certificates shall have no claim against, nor receive any benefits from any portion of the Trust Estate derived from the sale, re-letting or other disposition of Projects, other than the Series 2020A Project, and the owners of the 2020B Certificates shall have no claim against, nor receive any benefits from any portion of the Trust Estate derived from the sale, re-letting or other disposition of Projects, other than the Series 1999 Project. See "SECURITY FOR THE CERTIFICATES" herein.
The 2020A Certificates are being issued to provide funds for the purposes of financing the Series 2020 Project and paying certain costs of issuance with respect to the 2020A Certificates. See "THE SERIES 2020 PROJECT" herein. The 2020B Certificates are being issued to provide funds for the purposes of refinancing certain educational and related facilities and equipment and paying certain costs of issuance with respect to the 2020B Certificates.
The Principal Component of the Basic Rent Payments represented by the 2020A Certificates and the 2020B Certificates is payable in accordance with the maturity schedules set forth on the inside cover page hereof, subject to earlier prepayment as provided herein.
The foregoing does not attempt to completely summarize the provisions of the Master Lease. See “APPENDIX F - MASTER LEASE PURCHASE AGREEMENT AND FORMS OF SERIES 2020A SUPPLEMENTAL TRUST AGREEMENT AND SERIES 2020B SUPPLEMENTAL TRUST AGREEMENT."
22 Appendix 2 to page 107 67 SOURCES AND USES OF 2020 CERTIFICATE PROCEEDS
2020A Certificates Sources of Funds:
Par Amount of 2020A Certificates $ [Less: Net Original Issue Discount Plus: Net Original Issue Premium]
TOTAL SOURCES $
Uses of Funds:
Deposit to Series 2020A Subaccount of the Project Account(1) $ Deposit to Series 2020A Subaccount of Costs of Issuance Account(2)
TOTAL USES $
(1) To be applied to pay costs of the Series 2020 Project. (2) Includes, without limitation, the Policy premium, Underwriters' discount, legal, accounting and financial advisory fees, printing costs and other costs associated with the issuance of the 2020A Certificates.
2020B Certificates Sources of Funds:
Par Amount of 2020B Certificates $ [Less: Net Original Issue Discount Plus: Net Original Issue Premium]
TOTAL SOURCES $
Uses of Funds:
Deposit to Escrow Fund (1) $ Deposit to Series 2020B Subaccount of Costs of Issuance Account(2)
TOTAL USES $
(1) To be applied to refund, on a current basis, the 2010A Certificates. See “THE PLAN OF REFUNDING” herein. (2) Includes, without limitation, the Policy premium, Underwriters' discount, legal, accounting and financial advisory fees, printing costs and other costs associated with the issuance of the 2020B Certificates.
23 Appendix 2 to page 107 68 2020 CERTIFICATES PAYMENT SCHEDULES
The annual payment requirements for the 2020A Certificates are shown below:
Period Ending (July1) Principal Interest Total
The annual payment requirements for the 2020B Certificates are shown below:
Period Ending (July1) Principal Interest Total
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24 Appendix 2 to page 107 69 COMBINED CERTIFICATE PAYMENT SCHEDULE
Debt Service requirements for the 2013 Certificates, the 2015 Certificates, the 2019 Certificates, the 2020A Certificates and the 2020B Certificates are as follows:
Period Aggregate Ending 2013 2015 2019 2020A 2020B Debt (July 1) Certificates Certificates Certificates Certificates Certificates Service
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25 Appendix 2 to page 107 70 THE SCHOOL DISTRICT OF BAY COUNTY, FLORIDA
General
The School Board is a corporate body existing under the laws of the State and is the governing body of the District. The School Board consists of five members elected at-large by districts within the District for overlapping four-year terms. The District is organized under Section 4, Article IX, of the Constitution of the State of Florida and Chapter 1001 et. seq., Florida Statutes, as amended. The District covers the same geographic area as Bay County, Florida (the "County"). Management of the District is independent of the County government and local governments within the County. The School Board operates under the general direction of the State Board of Education, which is composed of the Governor and the State Cabinet. The Bay County Tax Collector collects ad valorem taxes for the District but exercises no control over the disposition of the District's tax receipts.
For Fiscal Year 2019-20, the public school system of Bay County included the operation of 46 schools consisting of nineteen Elementary Schools, six Middle Schools, five High Schools, one K-12 School, three K-8 Schools, eight Charter Schools, three Special Purpose Schools, and one alternative adult/vocational education facility which provide public education for approximately 24,557 full-time equivalent ("FTE.") students in kindergarten through grade 12 programs, as well as extensive adult education programs. All public schools of the County are fully accredited by the State of Florida and by AdvanceED, successor to the K-12 Division of the Southern Association of Colleges and Schools.
There are 12 Charter Schools operating within the County with a total enrollment of approximately 4,991 FTE students. Although Charter Schools operate under independent governance, State funding for Charter Schools within the County, as well as a share of certain locally generated funds, is paid through the District. Unless otherwise indicated, information set out in this Offering Statement pertains to the schools operated by the District and the students who attend those schools and faculty and staff serving those schools.]
The School Board
The governing board of the District is the School Board, which is a public corporation existing under and by virtue of the laws of the State of Florida, particularly Chapter 1001, Florida Statutes. The principal offices of the School Board are located in Bay County, Florida.
The School Board is the policy-making body of the District, consisting of five members elected at-large by districts within the District for overlapping four-year terms. Under existing statutes the School Board's duties and powers include, but are not limited to, the acquisition, maintenance and disposition of school property within the District; the development and adoption of a school program for the District; the establishment, organization and operation of schools, including vocational and evening schools, programs for gifted students and for students in residential care facilities; the appointment, compensation, promotion, suspension and dismissal of employees; the establishment of courses of study and the provision for adequate instruction aids; and the establishment of a system to transport students to school or school-related activities.
The School Board also has broad financial responsibilities, including approval of the annual budget, adoption of the school tax levy and the establishment of a system of accounting and budgetary controls. The annual budget and accounting reports must be filed with the State Department of Education.
The current members of the School Board and the expiration of their respective terms are as follows:
Term Expires Name District1 Office November Steve Moss 5 Chairman 2022 Pamm Chapman 3 Vice Chairman 2022 Ryan Neves 4 Member 2020 Jerry Register 1 Member 2020 ______1 The District 2 Board position is vacant, pending election of a new Board member in November, 2020.
26 Appendix 2 to page 107 71
Administration
The Superintendent of Schools is elected for a four-year term and serves as ex officio Secretary to and administrative officer of the School Board. The Superintendent oversees operations of the school system, makes policy recommendations to the School Board, and performs the duties assigned to him by law and the regulations of the State Department of Education.
The Superintendent also prepares the annual budget for approval by the School Board, recommends the tax levy based upon needs illustrated by the budget, recommends debt issuance or borrowing plans of the School Board when necessary, provides recommendations for investment of available funds, and keeps records with respect to all funds and financial transactions of the School Board.
The Superintendent is assisted by a deputy superintendent, two executive directors and a chief financial officer. Under each of these executive directors are the various department heads, functionaries and instructional staff personnel which support and service each of the elementary, middle and high schools within the Bay County school system.
William V. Husfelt, III was elected Superintendent of Schools for the District in November 2008. His current term expires in November, 2020, and intends to seek re-election. A former high school principal with both middle and high school coaching, teaching and administrative experience, he holds a Master's degree in Educational Leadership from Florida State University. Mr. Husfelt was the recipient of the 2004 and 2006 Florida Commissioner's Principal Achievement Award for outstanding leadership and was honored several years as the District Administrator of the Year. He has also been on the Board of Directors of the Panhandle Federal Credit Union since 2000.
Total School Personnel
For Fiscal Year 2019-20, the professional staff of the District includes 1,454 teachers, 102 principals and assistant principals, and 104 administrators and managers. Other personnel include teachers' aides, clerks and secretaries, bus drivers, cafeteria personnel, custodial and maintenance workers, mechanics and warehousemen. The total number of full-time school personnel for the 2019-20 school year is 3,739.
Employee Relations; Retirement and Other Postemployment Benefit Programs
Employee Relations
All instructional employees of the District are eligible to be represented by the Association of Bay County Educators (ABCE) which is affiliated with Florida Teachers Professional Association-National Education Association (FTPA-NEA). Certain non-instructional employees of the District are represented by the Bay Educational Support Personnel Association (BESPA) which is also affiliated with FTPA-NEA. The percentage of total District employees eligible to be represented by a union is approximately [93%]. [The School Board has existing contracts with ABCE and BESPA which expire June 30, 2020 and June 30, 2022, respectively. NTD: Status of negotiations of expiring contract?] The School Board believes that the employee relations among all segments of the educational community have always been extremely professional and conducive to resolving problems internally in the best interest of the District.
State Retirement Programs
The District participates in the Florida Retirement System ("FRS"), a cost sharing, multiple-employer, public employee retirement system, which covers substantially all regular employees of the District. Beginning in 2002, the FRS became one system with two primary plans, a defined benefit pension plan (the "FRS Pension Plan") and a defined contribution plan known as the Public Employee Optional Retirement Program (the "FRS Investment Plan"). FRS membership is required for all employees filling a regularly established position in a State agency, district school board, county, State university or State community college. Some municipalities, special districts, charter schools and metropolitan planning organizations also choose to participate in the FRS; however, participation is generally irrevocable after the entity elects to participate.
27 Appendix 2 to page 107 72 The information relating to the FRS contained herein has been obtained from the FRS Annual Reports which are available by writing to the Division of Retirement, P.O. Box 9000, Tallahassee, Florida 32315-9000, or by phoning (850) 488-5706 or visiting the following website: www.dms.myflorida.com/workforce_operations/retirement/publications/annual_reports. No representation is made by the Board as to the accuracy or adequacy of such information or that there has not been any material adverse change in such information subsequent to the date of such information.
There are five general classes of membership in the FRS: (1) Senior Management Service Class ("SMSC") members which include, among others, senior management level positions in State and local governments (including school districts) and assistant state attorneys, prosecutors and public defenders; (2) Special Risk Class which includes, among others, positions such as law enforcement officers, firefighters, correctional officers, emergency medical technicians and paramedics; (3) Special Risk Administrative Support Class which include, among others, non-special risk law enforcement, firefighting, emergency medical care or correctional administrative support positions within a FRS special risk-employing agency; (4) Elected Officers' Class ("EOC") which includes members who are elected State and city officers and the elected officers of cities and special districts that choose to place their officials in this class; and (5) Regular Class members includes members that do not qualify for membership in the other classes.
The FRS is a cost-sharing multiple-employer public-employee retirement system with two primary plans. The Department of Management Services, Division of Retirement administers the FRS Pension Plan and the Florida State Board of Administration (the "SBA") invests the assets of the FRS Pension Plan held in the FRS Trust Fund. Administration costs of the FRS Pension Plan are funded through investment earnings of the FRS Trust Fund. Reporting of the FRS is on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when the obligation is incurred.
The SBA administers the FRS Investment Plan, a defined contribution plan available to eligible FRS members as an alternative to the FRS Pension Plan. Retirement benefits are based upon the value of the member's account upon retirement. Regardless of membership class, FRS Investment Plan contributions vest after one year of service. A member vests immediately in all employee contributions paid to the FRS Investment Plan. If a member elects to transfer amounts from the FRS Pension Plan to that member's FRS Investment Plan account, the member must meet the eight-year vesting requirement (or six-year vesting requirement if enrolled prior to July 1, 2011) for any such transferred funds and associated earnings. The FRS Investment Plan is funded by employer contributions that are based on salary. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Administration costs of the FRS Investment Plan are funded through a 0.06% employer contribution and forfeited benefits. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the FRS Investment Plan, receive a lump-sum distribution, or leave the funds invested for future distribution. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan or remain in the FRS Investment Plan and rely upon that account balance for retirement income.
Since July 1, 2001, the FRS Pension Plan has provided for vesting of benefits after six years of creditable service. Members not actively working in a position covered by the FRS on July 1, 2001, must return to covered employment for up to one work year to be eligible to vest with less service than was required under the law in effect before July 1, 2001. Members initially enrolled on or after July 1, 2001, through June 30, 2011, vest after six years of service. Members initially enrolled on or after July 1, 2011, vest after eight years of creditable service. Members are eligible for normal retirement when they have met the various plan requirements applicable to each class of membership. Regardless of class, a member may take early retirement any time after vesting within 20 years of normal retirement age; however, there is a five percent benefit reduction for each year prior to normal retirement age.
Benefits under the FRS Pension Plan are computed on the basis of age, average final compensation, creditable years of service, and accrual value by membership class. Members are also eligible for in-line-of-duty or regular disability and survivors' benefits. Pension benefits of retirees and annuitants are increased each July 1 by a cost-of- living adjustment. If the member was initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member was initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-
28 Appendix 2 to page 107 73 July 2011 service credit by the total service credit at retirement multiplied by 3%. FRS Pension Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement.
Effective July 1, 2011, all members of FRS were required to contribute 3% of their gross compensation toward their retirement. In addition, the legislation reduced the required employer contribution rates for each membership class and subclass of the FRS.
Additional legislative changes that only apply to employees who initially enroll on or after July 1, 2011, include: (1) the average final compensation upon which retirement benefits are calculated are based on the eight highest (formerly five highest) fiscal years of compensation prior to retirement; (2) the DROP (as defined herein) is maintained but the interest accrual rate is reduced from 6.5% to 1.3%; (3) the normal retirement age is increased from 62 to 65; and (4) the years of creditable service is increased from 30 to 33 and the vesting period is increased to eight years (formerly six).
Subject to provisions of Section 121.091, Florida Statutes, the Defined Retirement Option Program (the "DROP") permits employees eligible for normal retirement under the FRS to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in the DROP for a period not to exceed 60 months while the member's benefits accumulate in the FRS Trust Fund. Authorized instructional personnel may participate in the DROP for up to 36 additional months beyond their initial 60-month participation period. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. As of June 30, 2019, the FRS Trust Fund held $2,542,917,693 in accumulated benefits and interest for 33,490 DROP participants. Of those 33,490 DROP Participants, 31,749 were active in DROP with balances totaling $2,277,211,830. The remaining participants were no longer active in the DROP and had balances totaling $277,211,830 to be processed after June 30, 2019.
The Retiree Health Insurance Subsidy ("HIS") Program is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Department of Management Services. For the Fiscal Year ended June 30, 2018, eligible retirees and beneficiaries received a monthly HIS payment equal to the number of years of creditable service completed at the time of retirement multiplied by $5. The payments are at least $30 but not more than $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which can include Medicare.
The HIS Program is funded by required contributions from FRS participating employers as set by the Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the Fiscal Year ended June 30, 2018, the contribution rate was 1.66% of payroll pursuant to Section 112.363, Florida Statutes. The District contributed 100% of its statutorily required contributions for the current and preceding three years. HIS contributions are deposited in a separate trust fund from which HIS payments are authorized. HIS benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, the legislature may reduce or cancel HIS payments.
Participating employers must comply with the statutory contribution requirements. Section 121.031(3), Florida Statutes, requires an annual actuarial valuation of the FRS Pension Plan, which is provided to the Florida Legislature as guidance for funding decisions. Employer contribution rates under the uniform rate structure (a blending of both the FRS Pension Plan and FRS Investment Plan rates) are recommended by the actuary but set by the Florida Legislature. Statutes require that any unfunded actuarial liability ("UAL") be amortized within 30 plan years and any surplus amounts available to offset total retirement system costs are to be amortized over a 10-year rolling period on a level-dollar basis. As of June 30, 2019, the balance of legally required reserves was $163,573,726,217. These funds were reserved to provide for total current and future benefits, refunds and administration of the FRS Pension Plan.
The District's liability for participation is limited to the payment of the required contribution at the rates and frequencies established by law on future payrolls of the District. The District's contributions to the FRS Pension Plan and FRS Investment Plan for the Fiscal Year ended June 30, 2019, totaled $8.71 million, which were equal to the
29 Appendix 2 to page 107 74 required contribution for such Fiscal Year. This excludes the HIS Program contributions. The District's contributions to the HIS Plan for the Fiscal Year ended June 30, 2019 totaled $2.01 million.
As a participating employer in the FRS, the District implemented Government Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions (an amendment of GASB Statement No. 27) and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date (an amendment to GASB Statement No. 68), effective for fiscal years beginning after June 15, 2014. The implementation of these Statements requires the District to record a liability for its proportionate share of the net pension liabilities of the FRS plans.
The scope of GASB Statements Nos. 68 and 71 address accounting and financial reporting for pensions that are provided to employees of state and local governmental employers that meet certain characteristics. These Statements establish standards for measuring and recognizing liabilities, deferred outflows/inflows of resources and expense/expenditures. For defined benefit pensions such as the FRS plans, GASB Statements Nos. 68 and 71 identify 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. Pursuant to these Statements, the District is required to record a liability for its proportionate share of pension liabilities as reported by the FRS plans. While these Statements require recognition and disclosure of the unfunded pension liability, there is no requirement that such liability be funded. Accordingly, a deficit in unrestricted net position should not be considered, solely, as evidence of financial difficulties. The adoption of GASB Statements Nos. 68 and 71 resulted in a material increase in the District's liabilities and a material decrease in the District's net position. The District's proportionate share of the net pension liabilities of the FRS Pension Plan totaled $82,492,243 at June 30, 2019. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined an actuarial valuation as of July 1, 2018. The District's proportionate share of the net pension liability was based on the District's Fiscal Year 2017-18 contributions relative to the total fiscal year 2017-18 contributions of all participating members. At June 30, 2018, the District's proportion was 0.27387392%, which was a decrease of 0.00392 from its proportion measured as of June 30, 2017.
As of June 30, 2019, the District reported a net pension liability of $40,616,695 million for its proportionate share of the HIS Plan's net pension liability. The current portion of the net pension liability is the District's proportionate share of benefit payments expected to be paid within one year, net of the District's proportionate share of the HIS Plan's fiduciary net position available to pay that amount. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2018. The District's proportionate share of the net pension liability was based on the District's Fiscal Year 2017-18 contributions relative to the total fiscal year 2017-18 contributions of all participating members. As of June 30, 2018, the District's proportion was .38375155%, which was an increase of .005603 from its proportion measured as of June 30, 2017. See APPENDIX B hereto, including Notes 14 and 15 to the Basic Financial Statements and the Required Supplementary Information for additional information relating to the District's implementation of GASB Statements Nos. 68 and 71.
Other Post Employment Benefit Program
In addition to its contributions under the State's retirement plan described above, the District provides other postemployment benefits ("OPEB") for certain of its retired employees in the form of an implicit rate subsidy by providing access to health insurance plans requiring the use of a single "blended" or "common" rate for both active and retired employees. The offering of this health insurance coverage is required by Section 112.0801, Florida Statutes.
As with all governmental entities providing similar plans, the District is required to comply with the Governmental Accounting Standard's Board Statement No. 75 - Accounting and Financial Reporting by Employers for Postemployment Benefits other than Pension ("GASB 75"). In order to comply with GASB 75, the District retained David Shaub, FSA (the "Actuary"), to actuarially review the District's OPEB liability and provide the District with a written valuation. The Actuary determined the District's actuarial accrued liability related to OPEB, which approximates the present value of all future expected postretirement life and medical premiums and administrative costs which are attributable to the past service of those retired and active employees, at $5,075,461 as of July 1, 2019.
30 Appendix 2 to page 107 75 Such liability is amortized over 30 years. The Actuary also determined the District's annual required contribution ("ARC"), which is the portion of the total accrued actuarial liability allocated to the current fiscal year needed to pay both normal costs (current and future benefits earned) and to amortize the unfunded accrued liability (past benefits earned, but not previously provided for) to be $873,223 for the Fiscal Year ended June 30, 2019. The calculation of the accrued actuarial liability and the ARC is, by definition and necessity, based upon a number of assumptions, including interest rates on investments, average retirement age, life expectancy, healthcare costs per employee and insurance premiums, many of which factors are subject to future economic and demographic variations. The District's net, end-of-year OPEB obligation was $5,296,857 as of June 30, 2019.
While the District does not know at this time what its ultimate OPEB liabilities will be in connection with GASB 75 compliance in the future or how much of the related annual required contributions it will need to budget in future years, it expects its OPEB liability to be manageable within its normal budgeting process.
Below are the details regarding the total OPEB liability from July 1, 2018 to June 30, 2019 (in thousands):
Total OPEB Liability Balance Recognized at 07/01/2018 $5,075,461 Changes for the Fiscal Year: Service Cost $517,021 Interest $153,279 Changes of Benefit Terms Differences Between Expected and Actual Experience Changes in Assumptions and Other Inputs Benefit Payments ($448,904) (Net Changes) $221,396 Balance at 06/30/2019 $5,296,857
* Changes of assumptions and other inputs include the change in the discount rate from 4.5 percent to 2.98 percent in 2018.
For additional information on OPEB liability, including assumptions on which the calculation is based, see Note 16 and the Required Supplementary Information to the audited financial statements for the Fiscal Year ended June 30, 2019 attached as APPENDIX B hereto.
School Facilities, Enrollment and Other Information
District Schools and Enrollment*
School Number of FTE Average Expenditure per Year Schools Enrollment FTE Student* 2014/2015 45 26,820 $7,592.93 2015/2016 46 27,125 $7,627.24 2016/2017 46 27,355 $7,711.46 2017/2018 47 27,384 $7,952.03 2018/2019** 47 25,747 $10,904.00
*General Fund Only. Includes Charter Schools within the County. **Prior to Hurricane Michael in October, 2018. Source: School District of Bay County, Florida.
Profile of Enrollments
31 Appendix 2 to page 107 76 Full Time Equivalent Students
2014/15 2015/16 2016/17 2017/18 2018/19* Grades K-3 8,950.24 8,822.52 8,638.31 8,527.18 7,781.78 Grades 4-8 9,822.45 9,991.79 10,047.05 10,236.22 9,745.90 Grades 9-12 6,482.38 6,623.04 6,806.26 6,726.56 6,389.55 Exceptional Ed 617.30 651.25 699.30 713.73 666.12 Vocational Ed 591.21 585.03 624.58 650.41 635.78 Ed Alternatives (ESOC) 356.66 451.03 539.15 529.62 526.98
TOTAL 26,820.24 27,124.66 27,354.65 27,383.72 25,747.11
*Prior to Hurricane Michael in October, 2018 Source: School District of Bay County, Florida.
Projected Student Enrollment
Full Time School Year Equivalent Enrollment 2019/2020 25,200.41 2020/2021 24,606.30 2021/2022 24,936.78 2022/2023 25,102.08 2023/2024 25,230.75 2024/2025 24,951.01
Source: Florida Office of Economic & Demographic Research-Forecasts of Student Enrollment for Florida School Districts (February 17, 2020).
32 Appendix 2 to page 107 77 Impact of Hurricane Michael
On October 10, 2018 Hurricane Michael, a category 5 storm, made landfall in Bay County. District buildings and other facilities sustained in excess of $400 million in damage and the District incurred various other expenses, with total storm-related expenditures totaling approximately $500 million. Immediately following the hurricane student enrollment dropped approximately 13% and total employment by the District decreased approximately 10%. Four District schools were closed temporarily and an additional school was repurposed to house a displaced school.
The long-term impacts are not yet known. Substantially all of the property damage is, or is expected to be, paid or reimbursed out of proceeds of insurance or federal emergency management funding. Enrollment is now approximately 10% below the pre-storm total and total employment is approximately 9% lower. The total operating budget is approximately 1% below the total prior to the storm, as a result of certain one-time funding from the State.
District revenues for operations should be reduced in future years consistent with the reduced enrollment. Ad valorem tax revenues, which secure the repayment of the Certificates, have not been materially affected to date and the District expects that they will increase in future years reflecting new construction.
District Financial Operations and Accounting Practices
The financial and accounting practices of the District are designed to conform to generally accepted accounting principles applied to governmental units. The District implemented the provisions of GASB Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments ("GASB 34"), and related GASB pronouncements, during the Fiscal Year ended June 30, 2002. GASB 34 created new basic financial statements for reporting the District's financial activities. In addition to fund-basis financial statements, the financial statements now include government-wide financial statements prepared on the accrual basis of accounting that split the District's programs between governmental and business-type activities. For Fiscal Year 2018-19, the organization of such financial statements was generally as follows:
Basis of Presentation
Government-wide Financial Statements - Government-wide financial statements, including the statement of net assets and statement of activities, present information about the District as a whole. These statements include the non-fiduciary financial activity of the District and its component units. The statements distinguish between governmental activities of the District and those that are considered business-type activities.
Government-wide financial statements are prepared using the economic resources measurement focus. The statement of activities presents a comparison between direct expenses and program revenues for each function or program of the District's governmental activities and for each segment of the business-type activities. Direct expenses are those that are specifically associated with a service, program, or department and are thereby clearly identifiable to a particular function. Depreciation expense specifically associated with the Pupil Transportation Services, Central Services and Operation of Plant functions is allocated to those functions, with remaining depreciation expenses reported as uncollected.
Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues. The comparison of direct expenses with program revenues identifies the extent to which each governmental function is self-financing or draws from the general revenues of the District.
The effects of interfund activity have been eliminated from the government-wide financial statements, except for interfund services provided and used and the net residual amounts between governmental and business-type activities.
Fund Financial Statements - Fund financial statements report detailed information about the District in the governmental, proprietary and fiduciary funds. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Non-major funds are aggregated
33 Appendix 2 to page 107 78 and reported in a single column. Because the focus of governmental fund financial statements differs from the focus of government-wide financial statements, a reconciliation is presented with each of the governmental fund financial statements.
The District reports the following major governmental funds:
General Fund - to account for all financial resources not required to be accounted for in another fund, and for certain revenues from the State that are legally restricted to be expended for specific current operating purposes.
Debt Service — Other Fund — to account for the accumulation of resources for, and the payment of, debt principal, interest and related costs for the District's Certificates of Participation.
Capital Projects - Local Capital Improvement Fund — to account for the financial resources generated by the local capital improvement tax levy to be used for educational capital outlay needs, including new construction, renovation and remodeling projects.
Additionally, the District reports the following proprietary and fiduciary fund types:
Enterprise Fund — Beacon Learning Center — to account for the financial activities and account balances of the Beacon Learning Center, which provides educational services for a fee to individuals, public and private entities and district school boards.
Internal Service Fund — to account for the District's self-insurance programs.
Agency Fund — to account for resources of the school internal funds which are used to administer moneys collected at the several schools in connection with school, student athletic, class, and club activities.
Accounting and Funds
Pursuant to Section 11.45, Florida Statutes, the financial operations of the District are subject to annual audit by the Office of the Auditor General of the State of Florida.
The accounting practices of the School Board are designed to conform to generally accepted accounting principles applicable to governmental units. The District's accounting records must meet the standards prescribed by the Florida Department of Education as required by law.
Budget Process
State law requires the School Board to advertise its intent to adopt a tentative budget, including a capital outlay budget, within 29 days following the County Property Appraiser's official certification of taxable property, which usually occurs on or about July 1. The School Board holds a public hearing on the tentative budget and the proposed tax rates within five days of its advertisement, and officially adopts the tentative budget and tax rates at the hearing. Thereafter, the County Property Appraiser prepares tax millage notices for property owners within the School District. The final budget and tax rate are fixed on or before September 18 of each year, following a final public hearing. On September ___, 2019, the School Board adopted the Budget for the 2019-20 Fiscal Year.
The Superintendent of Schools is responsible for preparing the preliminary and tentative budgets for recommendation to the School Board. Florida law requires the School Board to adopt and maintain a balanced budget, in which anticipated revenues less certain required deductions, combined with beginning fund balances equal appropriations. Generally, the final budget is substantially the same as the tentative budget since the School Board's hiring plans and materials purchases have been determined before the final budget is adopted.
34 Appendix 2 to page 107 79 Governmental Revenues
The School Board's governmental revenues are derived from federal and State appropriations and local sources. The following tables summarize the governmental revenues by source and the results of operations for the governmental revenues for the audited Fiscal Years ended June 30, 2016, 2017, 2018 and 2019, and the adopted budget for the Fiscal Year ending June 30, 2020.
School District of Bay County Governmental Revenue Sources
Fiscal Year Ended June 30 Federal Funds (1) State Funds Local Funds Total Revenue 2016 $26,962,262 $113,771,747 $135,582,110 $276,316,119 2017 $27,425,446 $122,498,956 $130,885,643 $280,810,065 2018 $28,218,417 $126,402,652 $135,496,051 $290,117,120 2019 $50,005,285 $125,966,380 $140,502,363 $316,474,028 2020(2) $64,037,875 $130,971,535 $154,008,450 $349,017,860
(1) Includes direct federal funds and federal funds received through the State. (2) Budgeted Amount.
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35 Appendix 2 to page 107 80 School District of Bay County, Florida Summary of General Fund Operations Fiscal Year 6/30
Audited Budgeted FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Revenues Federal $ 637,623 $ 648,383 $ 670,092 $ 1,126,348 $524,000 Federal through State and Local 1,047,179 1,818,630 1,475,549 24,794,784 $1,284,366 State Sources 111,392,375 118,457,475 123,729,502 119,566,833 $128,650,711 Local 94,502,346 88,846,266 87,964,802 93,089,250 $80,581,718 Total Revenues $ 207,579,523 $ 209,770,754 $ 213,839,945 $ 238,577,215 $211,040,795 Expenditures Current – Education Instruction $ 137,493,533 $ 141,296,951 $ 148,010,024 $ 146,551,104 $154,218,612 Pupil Personnel 7,572,797 7,527,762 7,737,104 8,103,663 8,316,444 Instructional Media 2,360,003 2,328,993 2,475,804 2,410,122 2,642,166 Instruction & Curriculum Development 2,925,851 2,936,528 3,251,185 3,304,477 3,525,107 Instructional Staff Training 1,339,481 1,443,712 1,486,049 1,339,628 2,306,843 Instruction Related Technology 12,216 15,899 724 321 5,066 Board of Education 1,122,705 754,780 880,062 906,871 959,624 General Administration 666,257 675,179 691,297 752,252 3,337,173 School Administration 13,954,055 14,171,946 14,274,547 14,242,996 13,436,297 Facilities Acquisition & Construction 507,564 584,146 713,056 56,200,456 61,121,947 Fiscal Services 1,738,973 1,690,050 1,615,857 1,614,338 1,788,673 Food Services -- 14 2,815 -- Central Services 2,915,340 2,892,176 1,720,255 3,481,541 2,079,222 Pupil Transportation 8,232,352 8,917,413 8,468,130 8,311,261 8,102,759 Operation of Plant 15,902,209 16,520,218 16,969,436 15,609,990 17,998,189 Maintenance of Plant 4,512,838 4,427,153 4,833,759 4,594,568 5,100,226 Admin. Tech. Services 3,141,476 3,304,059 3,219,762 3,166,655 3,378,420 Community Services 1,941,142 2,107,572 1,904,805 2,298,031 1,938,598 Fixed Capital Outlay: Facilities Acquisition & Construction Other Capital Outlay 547,544 584,686 695,615 11,133,381 Debt Service Principal Interest and Fiscal Charges Total Expenditures $ 206,886,336 $ 212,056,221 $ 218,950,736 $ 284,021,655 $290,255,366 Excess (Deficiency) of Revenues Over Expenditures 693,187 (2,285,647) (5,110,791) (45,444,440) (79,214,571) Other Financing Sources (Uses) 2,014,246 3,423,602 3,812,539 103,670,593 8,459,712 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 2,707,433 1,138,135 (1,298,252) 58,226,153 (70,754,859) Beginning Fund Balance 23,909,346 26,616,779 27,754,914 26,456,662 84,682,815 Ending Fund Balance $ 26,616,779 $ 27,754,914 $ 26,456,662 $ 84,682,815 $13,927,956
Sources: Carr Riggs & Ingram CPAs and Advisors Audited Financial Statement of the Bay County District School Board for the fiscal years ended June 30, 2016, 2017, 2018 and 2019. Adopted Budget for fiscal year ending June 30, 2020.
General Fund Balance Guidelines
Section 1011.051, Florida Statutes, entitled "Guidelines for general funds" requires that if a school district's General Fund ending balance not classified as restricted, committed or nonspendable in the approved operating budget is projected to fall below three percent (3%) of projected General Fund revenues, the Superintendent shall provide written notification to the district school board and the Commissioner of Education. The section further requires that if the General Fund ending balance not classified as restricted, committed or nonspendable is projected to fall below two percent (2%) of projected General Fund revenues, the Superintendent shall provide written notification to the district school board and the Commissioner of Education. Within 14 days after receiving such notification of an
36 Appendix 2 to page 107 81 ending balance below two percent (2%), if the Commissioner determines that the district does not have a plan that is reasonably anticipated to avoid a financial emergency as determined pursuant to Florida Statutes pertaining thereto, the Commissioner shall appoint a financial emergency board that may take certain delineated steps to assist a district school board in complying with the General Fund requirements. In Fiscal Year 2017-18, the District's General Fund ending balance not classified as restricted, committed or nonspendable was 11.2% of General Fund Revenues. In Fiscal Year 2018-19, the District's General Fund ending balance not classified as restricted, committed or nonspendable was 8.6% of General Fund Revenues and for Fiscal Year 2019-20 is budgeted to be 6.2% of General Fund Revenues.
SELECTED FINANCIAL INFORMATION SCHOOL DISTRICT OF BAY COUNTY Direct and Overlapping Debt Statement
General Non-Self Obligation Supporting Self-Supporting Debt Debt Debt DIRECT DEBT School District of Bay County 2011 Sales Tax Note $ 2013 Sales Tax Note $1,282,000 Certificates of Participation, Series 2010 $15,175,000 Certificates of Participation, Series 2013 $3,259,400 Certificates of Participation, Series 2015 $44,420,000 Certificates of Participation, Series 2019 $30,250,000 Revenue Anticipation Note $4,052,000 Total Direct Debt
OVERLAPPING DEBT Bay County 1
Total Overlapping Debt
Total
1 As of [September 30, 2019] [The remainder is assumed to be current] Sources: Bay County, Florida Comprehensive Annual Financial Report for Fiscal Year ended September 30, 2018; School District of Bay County, Florida Audited Financial Statements for the Fiscal Year ended June 30, 2019.
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37 Appendix 2 to page 107 82 School District of Bay County, Florida Comparative Ratios of Bonded Debt To Taxable Assessed Valuation and Per Capita Indebtedness (as of June 30, 2019)
1. Population (2019)(1) 167,283 2. Total Taxable Assessed Valuation (2019)(2) $16,494,646,261 3. Direct General Obligation Debt a) As a Percent of Taxable Assessed Valuation b) Per Capita 4. Direct and Overlapping General Obligation Debt a) As a Percent of Taxable Assessed Valuation b) Per Capita 5. Direct Non-Self Supporting Revenue and Direct General Obligation Debt a) As a Percent of Taxable Assessed Valuation b) Per Capita 6. Directing and Overlapping General Obligation and Direct and Overlapping Non-Self Supporting Revenue Debt(3) a) As a Percent of Taxable Assessed Valuation b) Per Capita
(1) Bureau of Economic & Business Research, University of Florida. (2) Represents 96% of Total Taxable Assessed Valuation ($17,181,923,189) as provided by the Bay County Property Appraiser. (3) Bay County, Florida overlapping debt as of September 30, 2019.
Source: School District of Bay County, Florida Audited Financial Statements for Fiscal Year ended June 30, 2019; Bay County, Florida Comprehensive Annual Financial Report for Fiscal Year ended September 30, 2019
DISTRICT REVENUES
The District derives its revenues from certain state, special and local revenue sources. The major categories of these revenue sources are briefly described below.
State Revenue Sources
Capital Outlay. State revenues represented $6,197,791 or approximately 11.9% of the District's total capital outlay revenues for the Fiscal Year 2018-19. Budgeted State capital outlay revenues available to the District for Fiscal Year 2019-20 are $2,762,715 or approximately 3.7% of the District's budgeted total capital outlay revenues.
One source of state educational funding contributions to the District's capital outlay requirements has in prior years been the Florida Public Education Capital Outlay ("PECO") Program. The method of allocation of funds to the district school boards is provided by state law based upon a statutory formula, components of which are the number of students in various districts and the proposed uses of the funds by the various districts. The Commissioner of Education administers the PECO program and allocates or reallocates funds as authorized by law. This funding has been cut substantially for traditional schools recently in favor of charter schools. PECO funds allocated by the Office of Education Facilities of the State Department of Education to the District were $1,340,895 ($821,738 for charter schools) for Fiscal Year 2017-18, $4,024,636 ($2,259,497 for charter schools) for Fiscal Year 2018-19 and are expected to be $2,536,884 (all for charter schools) for Fiscal Year 2019-20.
38 Appendix 2 to page 107 83 The District's other state capital outlay funds are the motor vehicle license revenues, also known as capital outlay and debt service ("CO&DS") funds. CO&DS funds can be used to make lease-purchase payments, but only if the lease-purchase facility appears on the project priority list (the "PPL") approved by the State Board of Education. The District received $268,490 in CO&DS funds in Fiscal Year 2017-18, $893,111 in Fiscal Year 2018-19 and expects to receive $225,831 of such funds in Fiscal Year 2019-20.
In 1997, the Governor of the State of Florida signed into law a bill creating the "Public School Capital Outlay Program Act" (the "Act"). Among the several programs established by the Act is the "Classrooms First Program," which provides for the issuance by the State of revenue bonds, the proceeds of which will be distributed to the various school districts based upon a formula similar to the formula used in allocating PECO funds. The proceeds of such revenue bonds must be applied by a school district for new construction, remodeling, renovation or major repairs, with a priority on construction of new, permanent classroom facilities. If a school district certifies that it has no unmet need for permanent classroom facilities or if its unmet needs are less than its proposed allocation of the revenue bond proceeds, it may choose to receive an annual distribution of state lottery revenues in lieu of all or a portion of its allocation of state bond proceeds. Such annual distribution must be used to construct, renovate, remodel, repair or maintain educational facilities. Such funds, whether in the form of state revenue bond proceeds or annual distributions, may not be used to make lease purchase payments. In addition, in order to receive any of such state funds, a school district must fully bond all of its CO&DS funds allocation.
Under the Act, the District may be entitled to receive other State revenues pursuant to other programs if the District achieves certain standards relating to its capital outlay efforts. Some of such revenues may be used to make lease purchase payments. It is not possible at this time to determine or estimate the amount of such State revenues, if any, that the District may receive in the future.
Operating Revenue. The three primary sources of educational funding from the State are (i) basic Florida Educational Finance Program ("FEFP") receipts, (ii) FEFP categorical program receipts, and (iii) certain other specified revenue sources.
The major portion of State support is distributed under the provisions of the FEFP, which was enacted by the State Legislature in 1973. Basic FEFP funds are provided on a weighted full-time equivalent student ("FTE") basis using a formula that takes into account varying program cost factors and district cost differentials. The program cost factors which are used to determine the level of each school district's FEFP funding are determined by the State Legislature. The amount of FEFP funds disbursed by the State is adjusted four times during each year to reflect changes in FTE and in variables comprising the weighing formula. In addition, the level of State funding is adjusted during each year to compensate for increases or decreases in ad valorem tax revenue resulting from adjustments to the valuation of nonexempt property in the County. During recent State Fiscal Years, FEFP funds budgeted by the State to the District have been 'rolled back due to shortfalls in budgeted State revenues. See "RISK FACTORS - State Revenues" herein.
FEFP categorical programs are lump sum appropriations from the State intended to supplement local school district revenues to enhance the delivery of educational and support services by each district. Among the larger categorical programs are the programs for class size reduction, school bus transportation and instructional material. Allocations for these categorical appropriations are based on funding formula and discretionary State Department of Education grants. The majority of the funds available require actual appropriation by the School Board for the purposes for which they were provided. Excluding Class Size Reduction funds, total State categorical aid decreased from $6,148,848 in Fiscal Year 2017-18 to $5,903,827 for the 2018-19 Fiscal Year. FEFP categorical funds are expected to decrease to $5,427,248 in the 2019-20 Fiscal Year. Such decrease is due to a reduction in the number of students.
A portion of the revenues generated from the State lottery is distributed to each Florida school district as Discretionary Lottery revenue and Florida School Recognition Program revenue. The Florida School Recognition program recognizes schools that have received an "A" or improved at least one letter grade from the previous school year and, under Florida Statutes, is required to be used for nonrecurring bonuses for school faculty and staff, nonrecurring expenditures for educational equipment or materials, for temporary personnel to assist schools in maintaining or improving student performance, or any combination of these. The District received $1,427,818 in Florida School Recognition revenue for Fiscal Year 2017-18, $1,036,977 in Florida School Recognition revenue for Fiscal Year 2018-19 and is budgeted to receive $1,385,719 in Florida School Recognition revenue for Fiscal Year
39 Appendix 2 to page 107 84 2019-20. The District received $49,195 in Discretionary Lottery revenues in Fiscal Year 2017-18 and received $90,144 in Fiscal Year 2018-19. The District is budgeted to receive $25,262 in Discretionary Lottery revenues in Fiscal Year 2019-20.
The District also receives State educational funding from a variety of miscellaneous State programs, the largest of which is Workforce Development. The District received approximately $2,785,503 for Workforce Development in Fiscal Year 2017-18, received approximately $2,789,444 for Fiscal Year 2018-19 and is budgeted to receive approximately $2,825,894 for Fiscal Year 2019-20.
The State appropriations are subject to adjustment during the year in the event revenues collected fall short of state projections.
The District also receives State educational funding from a variety of miscellaneous State programs. These sources include State mobile home license tax revenues and the Florida State Lottery.
Special Revenue Sources
The District also receives certain local, state and federal moneys, substantially all of which are restricted for specific programs. Programs funded with these special revenue sources in the past included school food service operations and programs financed through the Educational Handicapped Act, the Education Consolidation and Improvement Act and other federally financed programs.
Local Sources
Local revenue for school district support is derived almost entirely from real and tangible personal property taxes. School districts in the state are permitted to levy ad valorem property taxes separately for (i) operational purposes, (ii) capital outlays and maintenance of school facilities, and (iii) the payment of debt service. The amount of each such levy is subject to various constitutional and statutory limitations. There are no local non-property taxes levied specifically for schools. In addition, the District earns interest on cash invested and collects other miscellaneous revenues.
Operating Millage. For operational purposes, the Florida Legislature annually places requirements on each school district to levy a millage rate that is defined by law to be the "district required local effort" for those school districts desiring to participate in the allocation of State funds available to school districts. In 2018-19 the District's required local effort was 4.0840 mills. For Fiscal Year 2019-20, the District's required local effort is 3.8620 mills. The District did not levy a Prior Period Funding Adjustment Millage authorized by Section 1011.62(4)(e), Florida Statutes. Such Prior Period millage is levied when the preliminary taxable value for prior years is greater than the final taxable value for such years, thereby resulting in lower than expected revenues from the required local effect millage. School boards are also authorized to levy an additional "discretionary millage" for operations, not to exceed an amount established annually by the Legislature and up to 1.5 mills for capital outlay and maintenance of school facilities. The District may, however, levy up to 0.25 mills for capital outlay and maintenance of school facilities in lieu of operating discretionary millage. The discretionary millage for all school districts, including the District, was 0.748 for fiscal year 2018-19. For Fiscal Year 2019-20 the discretionary millage is again 0.748 mills.
Ad valorem tax receipts for operating purposes increased from $81,727,108 in Fiscal Year 2017-18 to $82,881,757 in Fiscal Year 2018-19. The District has budgeted approximately $76,040,319 of ad valorem tax receipts for operating purposes for Fiscal Year 2019-20.
Local Option Millage Levy. The School Board intends to make Lease Payments on the Series 1999 Lease Agreement and Series 2020A Lease Agreement, as well as any other Leases under the Master Lease, from moneys derived from a levy of a non-voted, real and tangible personal property tax millage, known as the "Local Option Millage Levy," for capital outlay and maintenance purposes. In its 2008 session, the Florida Legislature reduced the maximum amount of the levy from the 2.0 mills then in effect to 1.75 mills and in its 2009 session, the Florida Legislature further reduced the maximum levy from 1.75 mills to 1.50 mills (see "AD VALOREM TAXATION – Millage Rates" herein for information on such reduction and exceptions thereto). This levy may be used for, among other things, new construction and remodeling; site acquisition and site improvement; auxiliary or ancillary facilities;
40 Appendix 2 to page 107 85 maintenance, renovation and repair of existing school plants; school bus purchases; the purchase, lease-purchase or lease of new and replacement equipment; and amounts payable pursuant to lease purchase agreements for educational facilities and sites. Florida law restricts the use of the Local Option Millage Levy for payments on lease purchase agreements for educational facilities and sites to three-fourths (75%) of the millage levied; provided, however, such limitation is not applicable for lease-purchase agreements entered into prior to June 30, 2009. Since revenues from the levy of the Local Option Millage Levy may be used for, but are not pledged to, the payment of Basic Rent Payments under the Series 1999 Lease, the failure of the District to levy all or a portion of the Local Option Millage Levy might have an adverse effect on available revenues from which the School Board may appropriate funds to make Basic Rent Payments. In the event that revenues generated from the Local Option Millage Levy are insufficient to make payments under a lease-purchase agreement entered into prior to June 30, 2008, an amount equal to the revenue generated from 0.50 mills of the operating levy may be used to make such Lease Payments. See "AD VALOREM TAX PROCEDURES – Millage Rates" herein.
Local Option Millage revenues increased from $20,868,026 in Fiscal Year 2017-18 to $21,174,630 in Fiscal Year 2018-19. The District has budgeted approximately $22,063,239 of Local Option Millage revenues for Fiscal Year 2019-20.
A school board may not use revenues from the Local Option Millage Levy to pay for any portion of the cost of any new construction of educational plant space with a total cost per student station, including change orders, in excess of the amounts set forth in Section 1013.64(6)(b)1., Florida Statutes, as adjusted (the "Maximum Cost Per Student Station"). For purposes of calculating the Maximum Cost Per Student Station, certain costs such as legal and administrative costs, site improvement costs (incidental to construction), costs related to hurricane sheltering/hardening and school security/hardening capital improvements, among other costs, are not included. However, if a contract for architectural and design services or for construction management services has been executed before July 1, 2017, a district school board may use funds from any sources for the new construction of educational plant space and such educational plant space is exempt from the total cost per student station requirements. As of July 1, 2019, if the new construction of educational plant space is subject to a lease-purchase agreement entered into pursuant to Section 1011.71(2)(e), Florida Statutes (such as the Series 2020A Lease Agreement), a district school board (i) may use certain local funding sources (including educational impact fees, and voter approved ad valorem taxes, in each case if legally available for such purpose) to pay for the new construction of educational plant space, and (ii) may, but is not required to, use the Local Option Millage Levy revenues and certain state funding sources to pay for the portion of the cost for new construction of educational plant space which does not exceed the Maximum Cost Per Student Station requirements or to costs which are not included in Maximum Cost Per Student Station calculation. The School Board entered into a contract for architectural and design services with respect to the Series 2020A Project on June 27, 2017. As such, the Series 2020A Project is exempt from the total cost per student station requirements of Section 1013.64(6)(b), Florida Statutes.
Local Option Sales Surtax. In November 2010, the voters of Bay County approved the imposition of a one- half cent discretionary sales surtax within the County for 10 years to fund specified school capital outlay projects. The sales tax can be used for new construction, renovation, remodeling of existing schools and the related cost of design, construction and furnishing these areas. In addition, the sales tax provides for technology implementation, including hardware and software, for various sites within the District. In August 2018, the voters of Bay County approved continuing the imposition of the one-half cent discretionary sales surtax for an additional 10 years, beginning January 1, 2021, to fund specified school capital outlay projects. The tax will provide for school security construction initiatives; the acquisition of equipment and technology creating a 21st Century learning environment; renovation of older schools; construction of additional classrooms to support existing schools; construction of new schools as necessary; and retirement of related debt. Local Option Sales Surtax revenues were $21,452,247 in Fiscal Year 2017- 18 and $23,248,989 in Fiscal Year 2018-19. The District has budgeted approximately $23,600,000 of Local Option Sales Surtax revenues for Fiscal Year 2019-20.
Debt Service Millage. In addition to the School Board levies, qualified electors, by referendum, may vote an additional millage levy for operational and capital outlay purposes, as prescribed by the Florida Constitution and applicable statutes. Before a school district may issue bonds payable from ad valorem taxes, qualified electors within the district must approve a millage levy to pay the principal of and interest on such bonds. The School Board has not issued any such general obligation bonds and therefore is not levying any debt service millage for Fiscal Year 2019- 2020.
41 Appendix 2 to page 107 86
Budgeted revenues from ad valorem taxes are based on applying millage levies to 96% of the nonexempt assessed valuation of real and personal property. Historically, the local taxes have been received at less than 100% of the levied taxes due to the discounts for early payment. The Tax Collector usually collects approximately 96% of the levied taxes.
Historical millage rates (tax per $1,000 of assessed value) and the millage rates approved for the last five Fiscal Years are as follows:
School District of Bay County, Florida Historical Tax Rates (Mills)
2015-16 2016-17 2017-18 2018-19 2019-20 Required Local Effort 4.959 4.527 4.303 4.804 3.862 Basic Discretionary 0.748 0.748 0.748 0.748 0.748 Supplemental Discretionary Critical Operating Needs Levy Total Operating Millage 5.707 5.275 5.051 4.832 4.61 Capital Outlay 1.2 1.2 1.29 1.29 1.3376 Total Millage 6.907 6.475 6.341 6.122 5.9476
42 Appendix 2 to page 107 87 ANTICIPATED LOCAL OPTION MILLAGE LEVY REQUIRED TO COVER DEBT SERVICE ON THE CERTIFICATES
The table below sets forth the estimated millage levy that would provide 1.00x coverage of the maximum annual debt service on the 2020A Certificates, the 2020B Certificates, the 2019 Certificates, the 2015 Certificates, the 2013 Certificates and the 2010A Certificates, assuming a 96% collection of the taxes levied. Fiscal Year 2019-20 Net Taxable Assessed Valuation(1) $17,181,923,189
Local Option Millage Levy 1.3376 mills
Assumed Tax Collection Rate 96.0%
Total Revenue Generated by 1.173 mill Levy at 96% Collection $22,063,239
FY 2019-20 Local Option Millage Levy Required to Satisfy Maximum Annual Basic Lease Payments Represented by Certain of the Prior Certificates
Maximum Annual Basic Lease Payments Represented by the Prior Certificates (Fiscal Year 2021-2022)(2)(3) $7,569,902
Minimum Local Option Millage Levy Needed to Satisfy Maximum Annual Lease Payments Represented by the Prior Certificates(2)(3)(4) 0.46 mills
Sharing of the Local Option Millage Levy with Eligible District Charter Schools
(5) Maximum Local Option Millage Levy Revenue Shared with Eligible District Charter Schools $0.00
Maximum Local Option Millage Levy Shared with Eligible District Charter Schools 0.00 mills
Minimum Local Option Millage Levy Revenue Remaining after Charter School Payments $22,063,239 Local Option Millage Levy Available After Basic Lease Payments and Charter School Payments
Local Option Millage Levy Revenue Required to Satisfy Maximum Annual Basic Lease Payments and Charter School Payments(2)(3)(4) $19,361,241
Local Option Millage Levy Required to Satisfy Maximum Annual Basic Lease Payments and Charter School Payments(2)(3)(4) 0.46 mills
Anticipated Minimum Local Option Millage Levy Revenue Remaining After Basic Lease Payments and Charter School Payments(2)(3)(4) $14,493,337 ______(1) [Final figure from FY 2019-20 budget]. See "AD VALOREM TAXATION – Property Assessment Procedure" herein. (2) As described above, with respect to the Series 2020A Certificates and the Series 2020B Certificates, the Local Option Millage Levy is only available for payment of the Basic Rent Payments allocable to the eligible portions of the Series 2020B Certificates. The School Board expects to use Discretionary Sales Surtax revenues to pay all of the Basic Rent Payments represented by the Series 2019 Certificates. Accordingly, the table above does not include any portion of the Basic Rent Payments represented by the Series 2019 Certificates. In the event the School Board were to use Local Option Millage Levy revenues to pay the eligible portion of the Series 2019 Certificates, the Maximum Annual Basic Lease Payments represented by the prior referenced series of certificates and the eligible portions of the Series 2019 Certificates are estimated to equal approximately $10,972,525, resulting in a minimum Local Option Millage Levy of 0.73 mills required to satisfy such Maximum Annual Basic Lease Payments. (3) Assumes the Outstanding Certificates have the financial arrangements, assumptions, and accounting practices described in APPENDIX B, Note 8. (4) Under current law, the 75% limitation on the use of the Local Option Millage Levy revenues for the payment of lease-purchase agreements is waived for lease-purchase agreements originally entered into prior to June 30, 2009. Accordingly, only the Lease Payments with respect to Leases originally entered into after June 30, 2009 are subject to the 75% limitation. The Series 2019 Lease is subject to the 75% limitation. The Series 2019 Lease is also subject to such limitation, although no Basic Lease Payments under the Series 2019 Lease are included in the table above. Since revenues from the levy of the Local Option Millage Levy may be used for, but are not pledged to, the payment of Basic Rent Payments under the Series 1999 Lease, the failure of the District to levy all or a portion of the Local Option Millage Levy might have an adverse effect on available revenues from which the School Board may appropriate funds to make Basic Rent Payments. In the event that revenues generated from the Local Option Millage Levy are insufficient to make payments under a lease-purchase agreement entered into prior to June 30, 2008, an amount equal to the revenue generated from 0.50 mills of the operating levy may be used to make such Lease Payments. (5) Pursuant to CS/HB 7055, the State appropriated the full amount of the charter school capital outlay funds per unweighted FTE student for the Fiscal Year 2019-20. In future years, if the State does not appropriate an amount at least equal to the average charter school capital outlay per unweighted FTE student for Fiscal Year 2019-20, multiplied by the estimated number of charter school students for the applicable fiscal year and adjusted for inflation from the previous year, charter school capital outlay funds would also consist of the Local Option Millage Levy revenue. If the State had not appropriated any funds for such purpose for Fiscal Year 2019-20, the District would have been required to pay an estimated $______or ______mills of the Local Option Millage Levy to charter schools. At this time, the amount of the Local Option Millage Levy revenues to be shared with eligible charter schools in future years cannot be determined because the amount of State funds appropriated for the charter school capital outlay and charter school enrollment are unknown. See "AVAILABLE REVENUES FOR CAPITAL OUTLAY PROJECTS – Local Sources" herein.
AD VALOREM TAXATION
43 Appendix 2 to page 107 88
The following information is provided in view of the fact that a large portion of the School Board's revenues are derived from ad valorem taxation.
Local ad valorem property taxes are levied by the application of the millage rate to the assessed valuation of non-exempt property within the County. Under the laws of the State of Florida, the assessment of all properties and the collection of all county, municipal and school district property taxes are consolidated in the office of the County Property Appraiser and County Tax Collector.
Property Assessment Procedure
The laws of the State provide for a uniform procedure to be followed by all counties, municipalities, school districts and special districts for the levy and collection of ad valorem taxes on real and personal property. Pursuant to such laws, the County's property appraiser (the "Property Appraiser") prepares an annual assessment roll for all taxing units within the County and levies such millage, subject to constitutional limitations, as determined by each taxing unit, and the Tax Collector collects the ad valorem property taxes for all taxing units within the County. Since the ad valorem property taxes of all taxing units within a County are billed together by the Tax Collector, each property owner is required to pay all such taxes without preference.
Real property used for the following purposes is generally exempt from ad valorem taxation: religious, educational, charitable, scientific, literary, and governmental. In addition, there are special exemptions for widows, hospitals, homesteads, working waterfronts, deployed military personnel, low income seniors and homes for the aged, disabled veterans and first responders. Agricultural land, non-commercial recreational land, inventory, and livestock are assessed at less than 100% of fair market value.
Real and personal property valuations are determined each year as of January 1 by the Property Appraiser's office. The Property Appraiser is required to physically inspect the real property every three (3) years. There is a limitation of the lesser of 3% or the increase in the consumer price index during the relevant year on the annual increase in assessed valuation of Homestead Property (defined below), except in the event of a sale of such property during such year, and except as to improvements to such property during that year. State law requires, with certain exceptions, that property be assessed at fair market value; provided, however, that $25,000 of the assessed valuation of a homestead is exempt from all taxation for a residence occupied by the owner on a permanent basis where such owner has filed for and received a homestead exemption ("Homestead Property" or "Homestead") and, with respect to Homestead Property, an additional exemption of up to $25,000 on the assessed valuation greater than $50,000 is exempt from taxation for all property tax levies other than school district levies. See "Property Tax Reform" below.
The Property Appraiser's office prepares the assessment roll and gives notice by mail to each taxpayer of the proposed property taxes and the assessed property value for the current year, and the dates, times and places at which budget hearings are scheduled to be held. The property owner then has the right to file an appeal with the value adjustment board, which considers petitions relating to assessments and exemptions. Taxpayers appealing the assessed value or assigned classification of their property must make a required partial payment of taxes (generally equal to 75% of the ad valorem taxes due, less the applicable statutory discount, if any) with respect to properties that will have a petition pending on or after the delinquency date (normally April 1). A taxpayer's failure to make the required partial payment before the delinquency date (normally April 1) will result in the denial of the taxpayer's petition. The value adjustment board may make adjustments to the assessment roll to reflect any reduction in the assessed value of property upon the completion of the appeals. The value adjustment board certifies the assessment roll upon completion of the hearing of appeals to it. Millage rates are then computed by the various taxing authorities and certified to the Property Appraiser, who applies the millage rates to the assessment roll. This procedure creates the tax roll, which is then certified and turned over to the Tax Collector.
Property Tax Reform
In 2007 the Florida Legislature enacted Chapter 2007-321, Laws of Florida (2007) (the "Rollback Law"). One component of the adopted legislation requires counties, cities and special districts to roll back their millage rates for the 2007-08 Fiscal Year to a level that, with certain adjustments and exceptions, will generate the same level of ad
44 Appendix 2 to page 107 89 valorem tax revenue as in Fiscal Year 2006-07; 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 will be determined after first reducing 2006-07 ad valorem tax revenues by zero to nine percent (0% to 9%). In addition, the legislation limits how much the aggregate amount of ad valorem tax revenues may increase in future Fiscal Years. School districts are not required to comply with the particular provisions of the legislation relating to limitations on increases in future years.
Effective January 1, 2008, additional changes to Florida's property tax laws created a new formula for calculating assessed value of Homestead Property. "Assessed value" is the official value upon which real properties may be taxed in Florida. Under the new formula, if an owner of a Homestead purchases a new Homestead Property for greater value, the assessed value of the new Homestead would equal the purchase price of the new Homestead minus the difference between the purchase price of the previous Homestead and the assessed value of the previous Homestead, or $500,000, whichever is less. In addition, for Florida Homestead owners already receiving a property tax exemption of $25,000 on the assessed value of their homes, the new law creates an additional $25,000 exemption on the assessed value of Homestead Property greater than $50,000 for all property tax levies except school taxes. Also effective January 1, 2008, the first $25,000 of tangible personal property is exempt from taxation.
Additionally, effective January 1, 2009, increases in annual assessments on certain non-Homestead Property were capped at 10% annually (for a 10-year period) for all property tax levies other than school district levies. See also, "Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes - Extending the Limitation on Assessed Values of Non-Homestead Real Property" below for information concerning a constitutional amendment to extend the 10% cap on increases of non-homesteaded properties, other than school district levies.
In the November 4, 2008 general election, the voters of the State approved amendments to the State Constitution providing the Florida Legislature with authority to enact exemptions or special assessment protections for certain types of property subject to ad valorem taxation including exemptions for conservation lands and residential wind damage resistance and renewable energy source improvements, and restrictions on the assessment of working waterfront properties. Thereafter, legislation was enacted which creates an exemption for land used exclusively for conservation purposes. Such exemption applies to property tax assessments made on or after January 1, 2011 (Fiscal Year 2011-12 for school districts).
Millage Rates
The Florida Constitution limits the non-voted millage rate that school boards may levy on an annual basis for operational funds to 10 mills ($10 per $1,000 of taxable real and personal property value). The millage limitation does not apply to taxes approved at referendums by qualified electors in the county for general obligation bonds and certain other short-term, voter approved levies. Section 1011.71, Florida Statutes, as amended, further limits the millage levy for operational purposes to an amount established each year by the State appropriations act and finally certified by the Commissioner of the State of Florida Department of Education. Within this operational limit, each school district desiring to participate in the State's appropriation of Florida Education Finance Program ("FEFP") funds for current operations must levy the millage certified by the Commissioner of the State of Florida Department of Education, the "required local effort," which is set each year by the State Legislature. In addition to the "required local effort," school districts are entitled to a non-voted current operating discretionary millage. See the chart under "DISTRICT REVENUES - Local Sources" for a schedule of the millage actually assessed by the School Board over the past five years.
In addition to the millage levies for operating purposes, pursuant to Section 1011.71, Florida Statutes, school boards may set an additional non-voted millage known as the "Local Option Millage Levy" for capital outlay and maintenance purposes. In 2008, the Florida Legislature amended Section 1011.71, Florida Statutes, to (i) reduce the maximum Local Option Millage Levy from 2.00 mills to 1.75 mills and (ii) provide that if the revenues generated from the reduced Local Option Millage Levy are insufficient to make payments under a lease-purchase agreement entered into prior to June 30, 2008, an amount equal to the revenue generated from 0.50 mills of the operating millage levy may be used to make such lease payments. In 2009, the Florida Legislature further amended Section 1011.71, Florida Statutes, to (i) reduce the maximum Local Option Millage Levy from 1.75 mills to 1.50 mills commencing in Fiscal Year 2009-10 for school districts and (ii) if the revenue from the 1.50 mills is insufficient to make payments due under a lease purchase agreement entered into prior to June 30, 2009, or to meet other critical school district fixed
45 Appendix 2 to page 107 90 capital outlay needs, authorize a school board to levy up to an additional 0.25 mills of Local Option Millage Levy in addition to the 1.50 mills, in lieu of levying an equivalent amount of the discretionary mills for operations. In 2012, the Florida Legislature further amended Section 1011.71, Florida Statutes to waive the 75% limitation on the use of Local Option Millage Levy revenues for lease-purchase agreements originally entered into prior to June 30, 2009. See also, "Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes - Distribution of Local Option Millage Funds to Charter Schools" for information regarding recent legislation requiring school districts to share Local Option Millage Revenues with charter schools in such school districts.
Each respective millage rate, except as limited by law, is set on the basis of estimates of revenue needs and the total taxable property values within the taxing authority's respective jurisdiction. Revenues derived from ad valorem property taxes are budgeted, as required by Florida law, on the application of millage levies to 96 percent of the non-exempt assessed valuation of property in the County. Ad valorem taxes are not levied in excess of actual budget requirements.
Collection of Ad Valorem Taxes
Ad Valorem taxes may be paid upon receipt of such notice with discounts at the rate of four percent (4%) if paid in the month of November, three percent (3%) if paid in the month of December, two percent (2%) if paid in the month of January and one percent (1%) if paid in the month of February. Taxes paid during the month of March are without discount. All unpaid taxes on real and tangible personal property become delinquent on April 1 of the year following the year in which taxes were levied or within sixty (60) days after the mailing of the original tax notice of the final assessment rate, whichever is later. All taxes collected are remitted by the County Tax Collector to the governmental unit levying the taxes.
Delinquent real property taxes bear interest at the rate of one and one-half percent (1-1/2%) per month from April 1, or within sixty (60) days after the mailing of the original tax notice of the final assessment rate, whichever is later, until a tax certificate is sold at auction, from which time the interest rate shall be as bid by the buyer of the tax certificate. Delinquent tangible personal property taxes also bear interest at the rate of one and one-half percent (1- 1/2%) per month from April 1 until paid. Delinquent personal property taxes must be advertised within forty-five (45) days after delinquency, and after May 1 the property is subject to warrant, levy, seizure and sale.
Florida law provides that real property tax liens and personal property tax liens are superior to all other liens, except prior United States Internal Revenue Service liens. The County Tax Collector advertises once each week for four weeks and sells tax certificates to the lowest bidder, based on the interest rate bid, commencing on or about June 1 of each year on substantially all real property with taxes due. Delinquent tax certificates not sold at auction revert to Bay County.
If the owner of real property subject to a tax certificate does not redeem the certificate within two years, the holder of the certificate is entitled to apply for a tax deed of sale. The highest bidder at such sale receives a tax deed for the property subject to the tax certificate. To redeem a tax certificate, the owner of the property must pay all delinquent taxes, the interest that accrued prior to the date of the sale of the tax certificate, charges incurred in connection with the sale of the tax certificate, omitted taxes, if any, and interest at the rate bid on the tax certificate from the date of the sale of the tax certificate to the date of redemption. The interest rate on a tax certificate is a minimum of five percent, unless the interest bid on the certificate is a lower rate.
Assessed Valuation
The following table shows the assessed value and taxable value of property in the District for the past five years and the current year.
School District of Bay County, Florida Assessed and Taxable Property Values Tax Years 2015-2019
Ration of Taxable to Estimated Estimated
46 Appendix 2 to page 107 91 Tax Year Actual Value Total Taxable Value Actual Value (%) 2019 $21,901,531,026 $17,181,923,189 78.50% 2018 22,559,006,421 17,579,895,706 77.93 2017 21,614,021,104 16,701,224,269 77.27 2016 21,100,218,319 16,144,181,171 76.51 2015 20,764,762,875 15,673,648,196 75.48
Source: Bay County, Florida Property Appraiser.
[The Legislative Office of Economic and Demographic Research of the Florida Legislature projected declines in the assessed value of property subject to taxation by the District beginning in _____ and continuing through ______. These declines in assessed valuation are likely to have a negative impact on revenues of the District from ad valorem taxes, including Local Option Millage Levy revenues. However, the District estimates that, even with the projected declines in assessed property valuations, it will be able to collect Local Option Millage Levy revenues sufficient to make the Lease Payments related to the 2020A Certificates.]
Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes
General. During recent years, various other legislative proposals and constitutional amendments relating to ad valorem taxation and other District revenues 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. Other proposals have sought to restrict the ability of local governments to use certain revenues for payment of debt service or provide for additional procedures and notices in order to issue tax-supported debt. There can be no assurance that similar or additional legislative or other proposals will not be introduced in the current legislative session or enacted in the future that would, or might apply to, or have a material adverse effect upon, the District or its finances.
Proposed Constitutional Amendments Relating to Ad Valorem Taxation. During the 2020 Florida legislative session, a constitutional amendment was proposed by the Legislature which would extend the discount on ad valorem taxes provided to certain honorably discharged veterans to their spouses (the "Surviving Spouse Exemption"). Specifically, the Surviving Spouse Exemption would allow the same ad valorem tax discount on homestead property for combat-disabled veterans age 65 or older to transfer to the surviving spouse of a veteran receiving the discount if the surviving spouse holds the legal or beneficial title to the homestead, permanently resides thereon, and does not remarry. The Surviving Spouse Exemption will be voted on at the November 2020 general election and must be approved by 60% of the electorate voting in such election. If approved, such amendment would take effect on January 1, 2021.
During the 2020 Florida legislative session, a constitutional amendment was proposed by the legislature which would extend the period for a homestead property owner to transfer a prior Save Our Homes Benefit to a new homestead from two years to three years (the "Portability Amendment"). If approved by the voters, a homeowner who establishes a new homestead as of January 1 would be able to have the new homestead assessed at less than just value if the homeowner received a prior homestead exemption as of January 1 of any of the immediately preceding three years. The Portability Amendment will be voted on at the November 2020 general election and must be approved by 60% of the electorate voting in such election. If approved, such amendment would take effect on January 1, 2021.
Future Amendments Relating to Ad Valorem Taxation. Historically, various legislative proposals and constitutional amendments relating to ad valorem taxation have been introduced in each session of the Florida Legislature. Many of these proposals have provided for new or increased exemptions to ad valorem taxation and limited increases in assessed valuation of certain types of property or otherwise restricted the ability of local governments in the State to levy ad valorem taxes at current levels. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would have a material adverse effect upon the collection of ad valorem taxes by the District, the District's finances in general or the District's ad valorem taxing power.
Distribution of Local Option Millage Funds to Charter Schools. During the Florida Legislature's 2017 Regular Session, the Florida Legislature passed HB 7069 ("HB 7069") which, among other things, requires school
47 Appendix 2 to page 107 92 districts to distribute local capital outlay funds from the Local Option Millage Levy to charter schools. HB 7069 established the calculation methodology to determine the amount of local capital outlay funds from the Local Option Millage Levy a school district must distribute to each eligible charter school. Such calculation provides that the amount of local capital outlay funds from the Local Option Millage Levy a school district must distribute to each eligible charter school will be reduced by the school district's annual debt service for obligations incurred as of March 1, 2017 that are paid with Local Option Millage Levy revenues, and requires the first payment to charter schools as of February 1 of each year.
The provisions of HB 7069 have been subject to lawsuits filed by certain affected school boards, including the School Board. The provisions of HB 7069 were upheld at the trial court in one of the lawsuits filed by the School Board and other plaintiff school boards (collectively, the "Plaintiff School Boards"). That case was appealed to the First District Court of Appeals by the by the Plaintiff School Boards. On August 29, 2019, the First District Court of Appeals upheld the legality of HB 7069 in the case brought by the Plaintiff School Boards. On September 27, 2019, certain of the Plaintiff School Boards filed a notice to invoke the discretionary jurisdiction of the Florida Supreme Court in order to appeal such decision. On April 7, 2020, the Florida Supreme Court declined to accept jurisdiction in the case. Another case brought by many of the same Plaintiff School Boards was dismissed with prejudice pursuant to a joint stipulation of the parties. The third lawsuit challenging HB 7069, brought by The School Board of Palm Beach County, Florida, has been stayed by the trial court pending the appeal of the Plaintiff School Boards case. The final outcome of the remaining lawsuit, brought by The School Board of Palm Beach County, Florida, cannot be determined at this time.
On March 11, 2018, then Governor Rick Scott approved Committee Substitute for House Bill 7055 ("CS/HB 7055"). CS/HB 7055, among other things, revises certain of the requirements of HB 7069 relating to the required sharing of the Local Option Millage Levy revenues with charter schools. CS/HB 7055, among other things, specifies that charter school capital outlay funds shall consist of State funds when such funds are appropriated. However, if in any given year, the amount of State funds is not equal to, or is less than, the average charter school capital outlay funds per unweighted FTE student for the Fiscal Year 2018-19, multiplied by the estimated number of charter school students for the applicable fiscal year and adjusted for inflation from the previous year, charter school capital outlay funds shall also consist of the Local Option Millage Levy revenue. CS/HB 7055 also seeks to clarify that the debt service obligation that can be reduced from the distribution to charter schools is the debt service obligation incurred as of March 1, 2017, which has not been subsequently retired, and also requires each school district to annually certify to the State of Florida Department of Education the amount of the debt service obligation that can be reduced from the distribution to charter schools.
For Fiscal Year 2019-20, sufficient State charter school capital outlay funds per FTE student were appropriated so that the District is not required to share any Local Option Millage Levy revenues with charter schools in the District in Fiscal Year 2019-20. The State 2020-21 education budget also provides for sufficient State charter capital outlay funds per FTE student such that the District will not be required to share any Local Option Millage Levy revenues with charter schools in the District in Fiscal Year 2020-21. However, no assurance can be given that the State 2020-21 education budget will not be revised to reduce the State charter school capital outlay funds per FTE student due to an expected decline in State revenues as a result of the coronavirus pandemic, or that the State will continue to allocate sufficient State funds in future years. See "RISK FACTORS - State Revenues" and " - Coronavirus (COVID-19)" herein. Even if these provisions of HB 7069 are ultimately upheld, while they will likely result in a reduction of the revenues available to the School Board from the Local Option Millage Levy to make Lease Payments, the School Board, at this time, does not expect them to adversely affect its ability to make Basic Rent Payments under the Master Lease in future years.
Other Legislative Actions Affecting District Finances Constitutional Amendments Relating to Class Size Reduction. Article IX of the State Constitution was amended in 2002 by Amendment 9, which requires that the State Legislature provide funding for sufficient classrooms so that class sizes can be reduced to certain constitutional class size maximums by the beginning of the 2010 school year. Amendment 9, and Sections 1003.03, Florida Statutes, and 1013.735, Florida Statutes, relating to the implementation of Amendment 9, collectively are referred to herein as the "Class Size Legislation."
48 Appendix 2 to page 107 93 The Class Size Legislation establishes constitutional class size maximums limiting students per class to no more than 18 for pre-kindergarten through 3rd grade, 22 for grades 4 through 8 and 25 for grades 9 through 12. Compliance is determined on a period-by-period basis. In the event a school district is not in compliance with such requirements (based on October student enrollment), the legislation provides that the State shall reduce the class size funding, which can be adjusted for good cause. For those school districts that are in compliance with the constitutional amendment, a reallocation bonus of up to 5% of the base student allocation shall be distributed. School districts not in compliance are required to submit to the Commissioner of Education a corrective action plan that describes specific actions the district will take in order to fully comply with the requirements by October of the following year. If the district submits the certified plan by the required deadline, 75% of the funds remaining after the reallocation to school districts will be reallocated based upon each school district's proportion of the total reduction.
The Class Size Legislation also created the "Operating Categorical Fund for Class Size Reduction," the "Classroom for Kids Program," the "District Effort Recognition Grant Program" and the "Class Size Reduction Lottery Revenue Bond Program" to provide funding programs for capital outlays and operating expenditures necessary to satisfy the mandated class size reductions.
The Class Size Legislation requires each school board to consider implementing various policies and methods to meet these constitutional class sizes, including encouraging dual enrollment courses, encouraging the Florida Virtual School, maximizing instructional staff, reducing construction costs, using joint-use facilities, implementing alternative class scheduling, redrawing attendance zones, implementing evening and multiple sessions and implementing year-round and non-traditional calendars.
Through Fiscal Year 2009-10, the District complied with the requirements of the Class Size Legislation which was based on the average class size at all schools. Beginning in Fiscal Year 2010-11, the requirements were based on the number of students in each individual classroom and subsequently, schools that provided choice (e.g., charter, magnet, career and technical, etc.) continued to be required to meet average class size. Excluding charter schools, the District was nearly 100% compliant with class size requirements for Fiscal Years 2017-18, 2018-19 and 2019-20.
Legislative Changes Relating to School Choice. During the State Legislature's 2016 Regular Session, the Florida Legislature enacted House Bill 7029 ("HB 7029"). Among other things, a parent whose child is not subject to a current expulsion or suspension order may seek enrollment in and transport his or her child to any public school in the State, including a charter school, which has not reached capacity. The school district or charter school shall accept and report the student for purposes of funding through the FEFP. The school district or charter school may provide student transportation at their discretion. HB 7029 requires the capacity determinations of each school district and charter school to be current and identified on their respective school websites. Each school must provide preferential treatment in its controlled open enrollment process to: (1) dependent children of active duty military personnel who moved as a result of military orders, (2) children relocated due to foster care placement in a different school zone, (3) children relocated due to a court ordered change in custody as a result of separation or divorce, or the serious illness or death of a parent, and (4) students residing in the school district. Students residing in the school district may not be displaced by a student from another school district. A student who transfers may remain at the school until the student completes the highest grade level offered. This amendment took effect in the 2017-2018 school year. The school choice provisions of HB 7029 have not had a significant impact on the District's finances.
HB 7029 also revised the method for enforcing compliance with the Class Size Legislation to clarify that for purposes of enforcing compliance, the calculation is based upon the statutory formula used to determine the reduction in class size categorical funding for noncompliance. At present, such Class Size Legislation compliance enforcement provisions of HB 7029 have not had a significant impact on the District's finances.
Construction Cost Maximums. Section 1013.64(6)(b), Florida Statutes, prevents a school district from using funds from the following sources: PECO, CO&DS, Classrooms First Program, the Local Outlay Millage Levy, Classrooms for Kids Program, District Effort Recognition Program, or High Growth District Capital Outlay Assistance Grant Program, for any new construction of educational plant space with a total cost per student station in excess of the amounts set forth in Section 1013.64(6)(b)1, Florida Statutes, as such amounts are adjusted annually to reflect changes in the Consumer Price Index. See DISTRICT REVENUES – Local Sources.
49 Appendix 2 to page 107 94 Schools of Hope. HB 7069, among other things, also authorized the establishment of charter schools, to be known as "schools of hope," and designation of "hope operators" to provide students in areas of persistently low- performing schools with a high-quality education option designed to close the opportunity gap and increase student achievement. HB 7069 (i) establishes criteria for schools of hope and hope operators; (ii) defines persistently low- performing schools as those subject to differentiated accountability (that is, the escalating interventions and supports that must be provided to schools receiving school grades of "D" or "F") for more than three years or closed as a result of school improvement requirements; (iii) authorizes the FDOE to identify and designate hope operators who meet specified criteria; (iv) removes barriers to hope operators by creating a new notice and agreement process that is exempt from the current charter school law and State procurement laws; (v) provides a school of hope with certain exemptions from Chapters 1000-1013, Florida Statutes; (vi) provides provisions for facilities and funding for schools of hope; (vii) establishes a grant program to cover specified operational expenses; (viii) establishes the Schools of Hope Revolving Loan Program to help schools of hope cover school building construction and startup costs and (ix) allows "schools of hope" to be designated as a local education agency, if requested, allowing the school to apply for and receive State and Federal funds independently. Senate Bill 7070, which was signed into law in 2019, further expanded the definition of a persistently low-performing school. Section 1002.333(1)(c), Florida Statutes now defines a persistently low-performing school as one receiving three school grades lower than a “C” in at least three of the previous five years so long as the school has not earned a grade of “B” or higher in the most recent two school years. The definition no longer requires that the low school grades occur in consecutive years. At this time, the School Board cannot determine what impact HB 7069 (2017) and SB 7070 (2019) will have on any District schools subject to differentiated accountability or on the School Board's finances. No Hope operators have sought to start a School of Hope in Bay County, but there are schools in Bay County that present a Hope operator the opportunity to seek a charter.
Public Safety Mandate. In 2018, the Florida Legislature passed Senate Bill 7026 (“SB 7026") which, among other things, includes provisions designed to: enhance school safety policies, procedures, and personnel at the State and local level; improve and expand mental health services; and revise laws and empower law enforcement and the courts to limit access to firearms by young adults or by individuals exhibiting a risk of harming themselves or others. Specifically, SB 7026 requires each school board and superintendent to partner with law enforcement agencies to establish or assign one or more safe -school officers at each school facility within the district by implementing any combination of the following options: (a) establish school resource officer programs through cooperative agreements with law enforcement agencies; (b) commission one or more school safety officers for the protection and safety of school personnel, property, and students within the school district; (c) at a school district's discretion, and if established by the sheriff’s office, participate in the Guardian Program, which allows certain school employees to carry a firearm on school grounds if such employee volunteers and completes the statutorily required training. The School Board and the Bay County Sherriff’s Office initiated the guardian program in Bay County schools in the 2018-2019 school year following trainings that occurred in the summer of 2018. The School Board has entered into contracts with the Bay County Sherriff’s Office, the City of Lynn Haven, the City of Parker, the City of Panama City, the City of Panama City Beach and the City of Springfield and their respective law enforcement agencies to provide school resource officers and law enforcement officers at each District-operated public school. Additionally, the School Board operates its own police department and employs a number of school safety officers through that law enforcement agency.
During the 2019 legislative session, Senate Bill 7030 (“SB 7030”) passed and was subsequently signed into law. SB 7030 added a fourth safe-school officer option for compliance with the requirement that at least one officer is assigned to each school facility. School districts may now contract with security agencies who employ security guards who meet the criteria provided in Section 1006.12(4), Florida Statutes. Additionally, SB 7030 emphasized each school district’s responsibility to facilitate charter schools’ access to each of the four options available. The law further provided that a school district that denies a charter school access to any of the four safe-school officer options will be responsible for assigning an officer to the charter school at the district’s expense, less the safe school allocation funds provided to the charter school pursuant to Section 1011.62(15), Florida Statutes. To date, the School Board has not chosen to contract with any security agencies and has not been required to assign an officer to a charter school.
SB 7030 further adjusted the manner in which the safe schools allocation, which provides funding to school districts to aid in their compliance with Sections 1006.07-1006.12, is distributed throughout the State. School districts now receive funding from this source.
50 Appendix 2 to page 107 95 Previously, after the minimum distribution to each district, two-thirds of the remainder was allocated to districts based on the most recent official Florida Crime Index provided by the Department of Law Enforcement and one-third was allocated based on each school district’s proportionate share of the State’s total unweighted FTE enrollment. Following SBE 7030, two thirds is allocated pursuant to unweighted FTE and one-third is allocated based upon the Florida Crime Index.
THE CORPORATION
The Bay County Educational Facilities Finance Corporation is a Florida not-for-profit corporation formed for the purpose of acting as lessor in connection with "lease-purchase" capital financings for the School Board. The Corporation may in the future initiate additional Lease Schedules under the Master Lease, enter into other lease- purchase agreements with the School Board and cause certificates of participation to be issued which represent Lease Payments to be made under one or more lease-purchase agreements with the School Board. The members of the Corporation are the members of the School Board. The Chairman of the School Board serves as Chairman of the Board of Directors and President of the Corporation; the Vice Chairman of the School Board serves as Vice Chairman of the Board of Directors and Vice President of the Corporation; and the Superintendent of the School Board serves as ex-officio Secretary/Treasurer of the Corporation. The financing of a Project in 1994 constituted the initial activity of the Corporation. There is no litigation pending against the Corporation.
The Corporation has assigned all of its right, title and interest in and to the Master Lease (except certain indemnification rights, the right to initiate additional Lease Schedules from time to time and its obligation not to impair the tax status of the Certificates) including its right to receive Lease Payments from the School Board, its right, title and interest in and to the Ground Lease, and its right to use, sell and re-let Projects, to the Trustee. The Trustee directly collects from the School Board all of the Basic Rent Payments which are the source of and security for payment of the Certificates. Therefore, the credit of the Corporation is not material to any of the transactions contemplated in this Offering Statement. No financial information concerning the Corporation has been included herein, nor is it contemplated that any such financial information will be included in any future Offering Statement relating to the sale of any additional Series of Certificates or other obligations of the School Board or the Corporation.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the 2020A Certificates and 2020B Certificates are subject to an approving legal opinion of Bryant Miller Olive P.A., Tallahassee, Florida, Special Counsel, whose approving opinions (forms of which is attached hereto as APPENDIX I) will be available at the time of delivery of the 2020A Certificates and the 2020B Certificates. Certain legal matters will be passed on for the School Board and for the Corporation by Hand Arendall Harrison Sale LLC, Panama City, Florida. Certain legal matters will be passed on for the School Board by Hand Arendall Harrison Sale LLC, Panama City, Florida, Disclosure Counsel. Certain legal matters will be passed on for the Underwriters by Nabors Giblin & Nickerson, P.A., Tampa, Florida, Underwriters’ Counsel.
Special Counsel has not been engaged to, nor has it undertaken to, review the accuracy, completeness or sufficiency of this Offering Statement or any other offering material relating to the 2020A Certificates and the 2020B Certificates; provided, however, that Special Counsel shall render an opinion to the Underwriters of the 2020A Certificates and the 2020B Certificates (as to which only they may rely) relating to the accuracy of certain statements contained herein under the heading "TAX EXEMPTION" and certain statements which summarize provisions of the Series 2020A Lease Agreement, the Series 1999 Lease Agreement, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, the 2020A Assignment Agreement, the Series 2020A Ground Lease Agreement, the Assignment of Series 2020A Ground Lease Agreement, and the 2020 Certificates.
LITIGATION
Concurrently with the delivery of the 2020 Certificates, the School Board Attorney will deliver an opinion which states, among other things, that there is no litigation or other proceedings pending or, to the best knowledge of
51 Appendix 2 to page 107 96 the School Board, threatened against the School Board (i) that seeks to restrain or enjoin the issuance of delivery of the 2020 Certificates, the Master Lease, Lease Schedule No. 2020A or the Second Amended and Restated Lease Schedule No. 1999; (ii) questioning or affecting the validity of the 2020 Certificates, the Master Lease, Lease Schedule No. 2020A, the Second Amended and Restated Lease Schedule No. 1999, or any proceedings of the School Board or actions of the Trustee with respect to the authorization, sale, execution or issuance of the 2020A Certificates or the transactions contemplated by this Offering Statement or the Master Lease, the Series 2020A Supplemental Trust Agreement, the Series 2020B Supplemental Trust Agreement, Lease Schedule No. 2020A, the Second Amended and Restated Lease Schedule No. 1999 or any other agreement or instrument to which the School Board is a party in connection therewith and which is used or contemplated for use in the transactions contemplated by this Offering Statement or (iii) questioning or affecting the creation, organization or existence of the School Board and which would have an adverse effect on the actions taken by the School Board with respect to the issuance of the 2020 Certificates.
TAX EXEMPTION
Tax Exemption
The Internal Revenue Code of 1986, as amended (the "Code"), includes requirements which the School Board must continue to meet after the issuance of the 2020 Certificates in order that the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates not be included in gross income for federal income tax purposes. The School Board's failure to meet these requirements may cause the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates to be included in gross income for federal income tax purposes retroactive to the date of execution and delivery of the 2020 Certificates. The School Board has covenanted in the Series 2020A Lease Agreement and the Series 1999 Lease Agreement to take the actions required by the Code in order to maintain the exclusion from gross income for federal income tax purposes of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates.
In the opinion of Special Counsel, assuming continuing compliance by the School Board with the tax covenants referred to above, under existing statutes, regulations, rulings and court decisions, the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates is excluded from gross income for federal income tax purposes. The Interest Component of the Basic Rent Payments received by the Owners of the 2020A Certificates is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. The Interest Component of the Basic Rent Payments received by the Owners of the 2020A Certificates is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations. However, no opinion is expressed with respect to the federal income tax consequences of any payments received or to be received with respect to the 2020 Certificates following termination of the Series 2020A Lease Agreement or the Series 1999 Lease Agreement as a result of an event of non-appropriation or the occurrence of an event of default thereunder.
Except as described above, Special Counsel will express no opinion regarding the federal income tax or state or local tax consequences resulting from the receipt or accrual of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates, or the ownership or disposition of the 2020 Certificates.
Prospective purchasers of the 2020 Certificates should be aware that the ownership of 2020 Certificates may result in other collateral federal tax consequences, including (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry certificates, (ii) the reduction of certain loss reserve deductions for property and casualty insurance companies, (iii) the inclusion of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates in the earnings of certain foreign corporations doing business in the United States for purposes of a branch profits tax, (iv) the inclusion of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates in the passive income subject to federal income taxation of certain S corporations with Subchapter C earnings and profits at the close of the taxable year and (v) the inclusion in gross income of the Interest Component of the Basic Rent Payments received by the Owners of the 2020 Certificates by recipients of certain Social Security and Railroad Retirement benefits.
PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE 2020A CERTIFICATES AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX
52 Appendix 2 to page 107 97 CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE HOLDERS OF 2020A CERTIFICATES. PROSPECTIVE HOLDERS OF 2020A CERTIFICATES SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD.
During recent 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 2020A Certificates. 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 2020A Certificates. From time to time, legislative proposals are pending which could have an effect on both the Federal tax consequences resulting from ownership of 2020A Certificates and their market value. No assurance can be given that legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the 2020A Certificates.
[Tax Treatment of Issuance Discount
2020A Certificates
Under the Code, the difference between the principal amounts of the 2020A Certificates maturing on _____ in the years ______(bearing interest at _____%), ______, (bearing interest at ______), (collectively, the "2020A Discount Certificates") 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 the 2020A Discount Certificates of the same maturity was sold, is "original issue discount." Original issue discount represents interest which is excluded from gross income and which may result in the collateral tax consequences described above. Original issue discount will accrue over the term of a 2020A Discount Certificate at a constant interest rate compounded periodically. That portion of the original issue discount accruing during the period a purchaser holds a 2020A Discount Certificate will increase its adjusted basis in such 2020A Discount Certificate by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such 2020A Discount Certificates. Owners of 2020A Discount Certificates should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, prepayment or other disposition of such 2020A Discount Certificates and with respect to the state and local tax consequences of owning and disposing of such 2020A Discount Certificates. No opinion is expressed with respect to the federal income tax consequences of any original issue discount with respect to the 2020A Discount Certificates following termination of the Series 2020A Lease Agreement as a result of an event of non-appropriation or the occurrence of an event of default thereunder.]
2020B Certificates
Under the Code, the difference between the principal amounts of the 2020B Certificates maturing on _____ in the years ______(bearing interest at _____%), ______, (bearing interest at ______), (collectively, the "2020B Discount Certificates") 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 the 2020B Discount Certificates of the same maturity was sold, is "original issue discount." Original issue discount represents interest which is excluded from gross income and which may result in the collateral tax consequences described above. Original issue discount will accrue over the term of a 2020B Discount Certificate at a constant interest rate compounded periodically. That portion of the original issue discount accruing during the period a purchaser holds a 2020B Discount Certificate will increase its adjusted basis in such 2020B Discount Certificate by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such 2020B Discount Certificates. Owners of 2020B Discount Certificates should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, prepayment or other disposition of such 2020B Discount Certificates and with respect to the state and local tax consequences of owning and disposing of such 2020B Discount Certificates. No opinion is expressed with respect to the federal income tax consequences of any original issue discount with respect to the 2020B Discount Certificates following termination of the Series 1999 Lease Agreement as a result of an event of non-appropriation or the occurrence of an event of default thereunder.]
[Tax Treatment of Issuance Premium
53 Appendix 2 to page 107 98
2020A Certificates
The 2020A Certificates maturing on ____ in the years ______through ______, inclusive, _____ (bearing interest at _____%), ______(bearing interest at ____%) were offered at prices in excess of the principal amount thereof (collectively, the "2020A Premium Certificates"). Under the Code, the excess of the cost basis of a 2020A Premium Certificate over the amount payable at the earlier of the first call date or the maturity date of the 2020A Premium Certificate that minimizes the yield to a purchaser of a 2020A Premium Certificate (other than for a holder who holds a Certificate as inventory, stock in trade, or for sale to customers in the ordinary course of business) is generally characterized as "bond premium." For federal income tax purposes, bond premium is amortized over the period to the earlier of the first call date or the maturity date of a 2020A Premium Certificate. A holder will therefore be required to decrease his basis in the 2020A Premium Certificate by the amount of the amortizable bond premium attributable to each taxable year he holds such 2020A Premium Certificate. The amount of the amortizable bond premium attributable to each taxable year is determined on an actuarial basis at a constant interest rate compounded on each interest payment date. The amortizable bond premium attributable to each to a taxable year is not deductible for federal income tax purposes.
Owners of the 2020A Premium Certificates should consult their own tax advisors with respect to the precise determination for federal income tax purposes of the treatment of bond premium upon sale, redemption, or other disposition of such Certificates.]
2020B Certificates
The 2020A Certificates maturing on ____ in the years ______through ______, inclusive, _____ (bearing interest at _____%), ______(bearing interest at ____%) were offered at prices in excess of the principal amount thereof (collectively, the "2020B Premium Certificates"). Under the Code, the excess of the cost basis of a 2020B Premium Certificate over the amount payable at the earlier of the first call date or the maturity date of the 2020B Premium Certificate that minimizes the yield to a purchaser of a 2020B Premium Certificate (other than for a holder who holds a Certificate as inventory, stock in trade, or for sale to customers in the ordinary course of business) is generally characterized as "bond premium." For federal income tax purposes, bond premium is amortized over the period to the earlier of the first call date or the maturity date of a 2020B Premium Certificate. A holder will therefore be required to decrease his basis in the 2020B Premium Certificate by the amount of the amortizable bond premium attributable to each taxable year he holds such 2020B Premium Certificate. The amount of the amortizable bond premium attributable to each taxable year is determined on an actuarial basis at a constant interest rate compounded on each interest payment date. The amortizable bond premium attributable to each to a taxable year is not deductible for federal income tax purposes.
Owners of the 2020B Premium Certificates should consult their own tax advisors with respect to the precise determination for federal income tax purposes of the treatment of bond premium upon sale, redemption, or other disposition of such Certificates.]
RATINGS
[Moody's Investors Service, Inc. ("Moody's") is expected to assign a rating of "____" to the Insured 2020A Certificates and the Insured 2020B Certificates, with the understanding that, upon delivery of the Insured 2020A Certificates and Insured 2020B Certificates, the Policy insuring the payment when due of the principal of and interest on the Insured 2020A Certificates and Insured 2020B Certificates will be issued by the Insurer. See also "BOND INSURANCE" for information concerning the ratings for ______. Moody's and Fitch Ratings ("Fitch") have assigned underlying ratings of "____” and "___," respectively, to the 2020 Certificates without regard to the issuance by the Insurer of its Policy. An explanation of the significance of the ratings given by Moody's may be obtained from Moody's, at ______. An explanation concerning the significance of the ratings given by S&P may be obtained from S&P at ______. An explanation concerning the significance of the rating given by Fitch may be obtained from Fitch at ______. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by
54 Appendix 2 to page 107 99 the rating agency, if in the judgment of the rating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the 2020 Certificates.]
FINANCIAL STATEMENTS
The Annual Financial Statements of the District for the Fiscal Year ended June 30, 2019, accompanied by the Independent Auditor’s Report of Carr Riggs & Ingram, Certified Public Accountants, excerpted pages from which are attached as APPENDIX B to this Offering Statement, stated that the District's general purpose financial statements (except for the expendable trust funds which were not audited by the Auditor General) fairly represented, in all material respects, its financial position, and the results of its operations and changes in financial position of its proprietary fund types in conformity with generally accepted accounting principles. The Independent Auditor’s Report is included in APPENDIX B with the consent of the auditor.
FINANCIAL ADVISOR
The School Board has retained Ford & Associates, Inc., Tampa, Florida, as financial advisor in connection with the School Board's financing plans and with respect to the authorization and issuance of the 2020 Certificates. 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 Offering Statement. The Financial Advisor did not participate in the underwriting of the 2020 Certificates.
UNDERWRITING
The 2020A Certificates are being purchased by Raymond James & Associates, Inc., on behalf of itself and PNC Capital Markets, LLC (collectively, the "Underwriters") at a purchase price of $______(which represents the par amount of the 2020A Certificates of $______, less net original issue discount/plus net original premium of $______and less an Underwriters' Discount of $______). The Underwriters' obligations are subject to certain conditions precedent, and they will be obligated to purchase all of the 2020A Certificates if any 2020A Certificates are purchased. The 2020A Certificates may be offered and sold to certain dealers (including dealers depositing such 2020A Certificates 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 Underwriters.
The 2020B Certificates are being purchased by Raymond James & Associates, Inc., on behalf of itself and PNC Capital Markets, LLC (collectively, the "Underwriters") at a purchase price of $______(which represents the par amount of the 2020B Certificates of $______, less net original issue discount/plus net original premium of $______and less an Underwriters' Discount of $______). The Underwriters' obligations are subject to certain conditions precedent, and they will be obligated to purchase all of the 2020B Certificates if any 2020B Certificates are purchased. The 2020B Certificates may be offered and sold to certain dealers (including dealers depositing such 2020B Certificates 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 Underwriters.
PNC Capital Markets LLC, one of the Underwriters of the 2020 Certificates, and PNC Bank, National Association are both wholly-owned subsidiaries of PNC Financial Services Group, Inc. PNC Capital Markets LLC is not a bank, and is a distinct legal entity from PNC Bank, National Association. PNC Bank, National Association has banking and financial relationships with the School Board.
CONTINUING DISCLOSURE
The School Board has agreed and undertaken for the benefit of 2020 Certificates holders and in order to assist the Underwriters in complying with the continuing disclosure requirements of S.E.C. Rule 15c2-12, as amended (the "Rule"), to provide certain financial information and operating data relating to the School Board and the 2020 Certificates in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events,
55 Appendix 2 to page 107 100 if material. Such undertaking shall only apply so long as the 2020 Certificates remain outstanding under the Series 2020A Supplemental Trust Agreement and the Series 2020B Supplemental Trust Agreement. The Annual Report and audited financial statements will be filed annually by the School Board pursuant to the undertaking with the Municipal Securities Rulemaking Board (the "MSRB") via its Electronic Municipal Market Access system described in the Continuing Disclosure Agreement (APPENDIX J hereto). The notices of material events will be filed by the School Board with the MSRB. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in APPENDIX J.
With respect to the 2020 Certificates, no party other than the School Board is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the aforementioned Rule. The School Board has provided its continuing disclosure information for the past five (5) the Fiscal Years on a timely basis and intends to fully comply with all current and future continuing disclosure undertakings. The School Board has engaged Digital Assurance Certification, L.L.C., as its dissemination agent, in order to ensure ongoing and future compliance with its obligations under the Rule.
The School Board has previously undertaken to provide continuing disclosure with respect to certain of its outstanding obligations. The School Board has not failed, in any material respect, during the past five years to file timely any report or notice of enumerated events required to be filed pursuant to those undertakings.
CONTINGENT FEES
The School Board has retained Special Counsel, Disclosure Counsel, the Financial Advisor, the Underwriters (who in turn retained Underwriters' Counsel), the Trustee and Trustee's Counsel, with respect to the authorization, sale, execution and delivery of the 2020A Certificates. Payment of each fee of such professionals is each contingent upon the issuance of the 2020A Certificates.
ACCURACY AND COMPLETENESS OF OFFERING STATEMENT
The references, excerpts, and summaries of all documents, statutes, and information concerning the School Board and the Series 2020 Project 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 2020A Certificates, the security for the payment of the 2020A Certificates and the rights and obligations of the owners thereof and to each such statute, report or instrument.
The Appendices hereto are integral parts of this Offering Statement and must be read in their entirety together with all foregoing statements.
FORWARD LOOKING STATEMENTS
This Offering Statement contains certain "forward-looking statements" concerning the District's operations, performance and financial condition, including its future economic performance, plans and objectives and the likelihood of success in developing and expanding. These statements are based upon a number of assumptions and estimates which are subject to significant uncertainties, many of which are beyond the control of the District. The words "may," "would," "could," "will," "expect," "anticipate," "believe," "intend," "plan," “budget,” "estimate" and similar expressions are meant to identify these forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements.
AUTHORIZATION OF OFFERING STATEMENT
The execution and delivery of this Offering Statement has been duly authorized and approved by the School Board. At the time of delivery of the 2020A Certificates, the undersigned will furnish a certificate to the effect that
56 Appendix 2 to page 107 101 nothing has come to their attention which would lead them to believe that the Offering Statement (excluding the information related to the [Insurer, its Policy], DTC and it book-entry system of registration, as to all of which no opinion will be expressed), as of its date and as of the date of delivery of the 2020A Certificates, 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 Offering 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.
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA
Chairman
Superintendent
3477177_8
57 Appendix 2 to page 107 102 EXHIBIT D
FORM OF SERIES 2020B CERTIFICATE PURCHASE CONTRACT
Appendix 2 to page 107 103
$______$______CERTIFICATES OF REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2020A PARTICIPATION, SERIES 2020B (School Board of Bay County, Florida (School Board of Bay County, Florida Master Lease Program, Series 2020A) Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Evidencing an Undivided Proportionate Interest of Owners Interest of Owners thereof in Basic Rent Payments to be thereof in Basic Rent Payments to be made under a made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by The School Board of Bay County, The School Board of Bay County, Florida Florida
______, 2020
CERTIFICATE PURCHASE CONTRACT
The School Board of Bay County, Florida 1311 Balboa Avenue Panama City, Florida 32401
Bay County Educational Facilities Finance Corporation 1311 Balboa Avenue Panama City, Florida 32401
Ladies and Gentlemen:
The undersigned, Raymond James & Associates, Inc. (the "Representative"), on behalf of itself and PNC Capital Markets LLC (collectively, the "Underwriters"), offers to enter into this Certificate Purchase Contract (the "Purchase Contract") with The School Board of Bay County, Florida (the "Board" or the "School Board") and Bay County Educational Facilities Finance Corporation (the "Corporation"), which upon acceptance of this offer by the Board and the Corporation will be binding upon the Board, the Corporation and the Underwriters. This offer is made subject to written acceptance hereof by the Board and the Corporation at or before 5:00 p.m., local time, on the date hereof and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to the Board and the Corporation at any time prior to the acceptance hereof by the Board and the Corporation. The parties hereto agree and acknowledge that the obligations of the Board and the Corporation hereunder do not constitute a general obligation of the Board and the
1 Appendix 2 to page 107 104 Corporation. The Representative hereby represents that it is authorized to execute and deliver the Purchase Contract on behalf of the Underwriters.
The Board and the Corporation acknowledge and agree (i) the Underwriters are not acting as a municipal advisor within the meaning of Section 15B of the Securities Exchange Act of 1934, as amended, (ii) the primary role of the Underwriters, as underwriters, is to purchase the securities, for resale to investors, in an arm’s length commercial transaction between the Board, the Corporation and the Underwriters and the Underwriters have financial and other interests that differ from those of the Board and the Corporation; (iii) the Underwriters are acting solely as principals and are not acting as municipal advisors, financial advisors or fiduciaries to the Board and the Corporation and have not assumed any advisory or fiduciary responsibility to the Board or the Corporation with respect to the transactions contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currently providing other services to the Board or the Corporation on other matters); (iv) the only obligations the Underwriters have to the Board and the Corporation with respect to the transactions contemplated hereby expressly are set forth in this Purchase Contract; and (v) the Board and the Corporation have consulted their own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent they have deemed appropriate.
1. Purchase and Sale. Upon the terms and conditions and in reliance upon the representations, warranties, covenants and agreements set forth herein, the Underwriters hereby agree to purchase, and the Board agrees to cause Hancock Whitney Bank, Orlando Florida, as successor trustee (the "Trustee") to execute and deliver to the Underwriters, all (but not less than all) of the (i) aggregate principal amount of the $______Certificates of Participation Series 2020A (the "Series 2020A Certificates") and (ii) aggregate principal amount of the $______Refunding Certificates of Participation Series 2020B (the "Series 2020B Certificates," and together with the Series 2020A Certificates, the "Series 2020 Certificates.) The Series 2020 Certificates shall be dated as of their date of delivery.
The Series 2020A Certificates are being issued for the principal purpose of providing funds to (i) finance the costs of the acquisition, construction and installation of certain educational facilities within the School District of Bay County, Florida (the "District"), as more particularly described herein and (ii) pay certain costs associated with the issuance of the Series 2020A Certificates.
The Series 2020B Certificates are being issued for the principal purpose of providing funds, together with other legally available funds, sufficient to (i) refund all of the School Board's outstanding Certificates of Participation, Series 2010A (the "Refunded Certificates") and (ii) pay certain costs associated with the issuance of the Series 2020B Certificates.
2 Appendix 2 to page 107 105 The purchase price for the Series 2020A Certificates shall be $______, which price represents the par amount of $______, plus/less net original issue premium/discount of $______and less an Underwriters' discount of $______.
The purchase price for the Series 2020B Certificates shall be $______, which price represents the par amount of $______, plus/less net original issue premium/discount of $______and less an Underwriters' discount of $______.
The Series 2020A Certificates shall be as described in and shall be authorized by a resolution adopted by the Board on April 28, 2020 (the " Series 2020A Resolution") and a resolution adopted by the Corporation on April 28, 2020 (the "Series 2020A Corporation Resolution"), and shall be issued under and secured pursuant to the provisions of a Master Trust Agreement, dated as of November 1, 1994 (the "Master Trust Agreement"), as supplemented by the Series 2020A Supplemental Trust Agreement, dated as of May 1, 2020 (the "Series 2020A Supplemental Trust Agreement," and together with the Master Trust Agreement, the "Series 2020A Trust Agreement") each by and among the Board, the Corporation and the Trustee.
The Series 2020B Certificates shall be as described in and shall be authorized by a resolution adopted by the Board on April 28, 2020 (the "Series 2020B Resolution," and together with the Series 2020A Resolution, the "Resolutions") and a resolution adopted by the Corporation on April 28, 2020 (the "Series 2020B Corporation Resolution," and together with the Series 2020A Corporation Resolution, the "Corporation Resolutions"), and shall be issued under and secured pursuant to the provisions of the Master Trust Agreement, as supplemented by the Series 2020B Supplemental Trust Agreement, dated as of May 1, 2020 (the "Series 2020B Supplemental Trust Agreement," and together with the Master Trust Agreement, the "Series 2020B Trust Agreement") each by and among the Board, the Corporation and the Trustee. The Series 2020A Trust Agreement and the Series 2020B Trust Agreement are collectively referred to herein as the "Series 2020 Trust Agreements." Capitalized terms not otherwise defined herein shall have the meanings set forth in the Series 2020 Trust Agreements, as applicable.
The Series 2020 Certificates shall mature at the times and in the principal amounts and bear interest at the rates set forth in Appendix A attached hereto and shall be subject to prepayment at the times and at the prices set forth in Appendix B attached hereto. The information required by Section 218.385(6), Florida Statutes, to be provided by the Underwriters is set forth in Appendix C attached hereto. Further, in order to assist the Board in complying with Section 218.385(2) and (3), Florida Statutes, the Underwriters are providing the Board and the Corporation with the information needed to complete a truth-in-bonding statement, the form of which is attached as Appendix D attached hereto.
The School Board has heretofore entered into a Master Lease-Purchase Agreement, dated as of November 1, 1994 (the "Master Lease"), between the Corporation, as lessor, and the School Board, as lessee, for the purpose of lease purchasing from time to time
3 Appendix 2 to page 107 106 certain educational facilities, sites and equipment ("Projects") from the Corporation. Projects to be leased from time to time are identified on separate lease schedules (each a "Lease Schedule") attached to the Master Lease. Upon execution and delivery thereof, each Lease Schedule, together with the provisions of the Master Lease, constitutes a separate lease agreement (individually a "Lease" and collectively the "Leases").
The Master Trust Agreement provides that the Trustee may, at the prior request of the School Board and the Corporation, issue Certificates from time to time pursuant to the terms and provisions thereof for the purpose of obtaining funds to be used to pay the costs of acquisition, construction and installation of Projects. Pursuant to the Master Trust Agreement, the applicable provisions of Florida law and the Resolutions, the School Board has authorized the execution and delivery of (i) Lease Schedule No. 2020A, dated as of May 1, 2020 as the same may be amended and restated from time to time ("Lease Schedule No. 2020A," and together with the Master Lease, the "Series 2020A Lease Agreement") for the principal purpose of financing the costs of acquisition, construction and installation of the Series 2020 Project (described below) and (ii) Second Amended and Restated Lease Schedule No. 1999, dated as of May 1, 2020 as the same may be amended and restated from time to time (Lease Schedule No. 1999," and together with the Master Lease, the "Series 1999 Lease Agreement") for the principal purpose of refunding the Refunded Certificates and thereby refinancing a portion of the costs of acquisition, construction and installation of the Series 1999 Project (as described therein) . The Series 2020A Lease Agreement and the Series 1999 Lease Agreement are collectively referred to herein as the "Transaction Lease Agreements."
The Series 2020 Project being financed with a portion of the proceeds of the Series 2020A Certificates and lease-purchased under the Series 2020A Lease Agreement includes the acquisition, construction and installation of a new elementary school, as more particularly described in the hereinafter defined Preliminary Offering Statement (collectively, the "Series 2020 Project").
Pursuant to (i) a Series 2020A Ground Lease Agreement, dated as of May 1, 2020 ( the "Series 2020A Ground Lease"), between the School Board and the Corporation, the School Board will lease certain land on which the Series 2020 Project will be located to the Corporation and (ii) a Series 2010A Ground Lease Agreement, dated as of July 1, 2010 (the "Series 2010A Ground Lease," and together with the 2020A Ground Lease, the "Transaction Ground Leases"), between the School Board and the Corporation, the School Board has leased the sites on which the Series 1999 Project is located to the Corporation.
Pursuant to (i) Series 2020A Assignment of Ground Lease Agreement, dated as of May 1, 2020 (the "Series 2020A Ground Lease Assignment"), between the Corporation and the Trustee, the Corporation has assigned to the Trustee for the benefit of the registered owners of the Series 2020A Certificates (as defined in the hereinafter described Offering Statement) all of the Corporation's right, title and interest in and to the Series 2020A Ground Lease and (ii) Series 2010A Assignment of Ground Lease Agreement, dated as of
4 Appendix 2 to page 107 107 July 1, 2010 (the "Series 2010A Ground Lease Assignment), between the Corporation and the Trustee, the Corporation has assigned to the Trustee for the benefit of the registered owners of the Refunded Certificates (and any Certificates issued to refund such Refunded Certificates) all of the Corporation's right, title and interest in and to the Series 2010A Ground Lease. The Series 2020A Ground Lease Assignment and the Series 2010A Ground Lease Assignment are collectively referred to herein as the "Transaction Ground Lease Assignments."
Pursuant to the Series 2020A Assignment Agreement, dated as of May 1, 2020 (the "Series 2020A Lease Assignment"), between the Corporation and the Trustee, the Corporation has irrevocably assigned to the Trustee for the benefit of the registered owners of the Series 2020A Certificates substantially all of the Corporation's right, title and interest in and to the Series 2020A Lease Agreement, including its right to receive Basic Rent Payments and all other amounts due under the Series 2020A Lease Agreement.
Pursuant to the Series 2020B Assignment Agreement, dated as of May 1, 2020 (the "Series 2020B Lease Assignment"), between the Corporation and the Trustee, the Corporation has irrevocably assigned to the Trustee for the benefit of the registered owners of the Series 2020B Certificates substantially all of the Corporation's right, title and interest in and to the Series 1999 Lease Agreement, including its right to receive Basic Rent Payments and all other amounts due under the Series 1999 Lease Agreement. The Series 2020A Lease Assignment and the Series 2020B Lease Assignment are collectively referred to herein as the "Transaction Lease Assignments."
[The scheduled payment of principal of and interest represented by the Series 2020A Certificates maturing on July 1 in the years 20__ and 20__ (the "Insured Series 2020A Certificates"), when due, will be guaranteed under a municipal bond insurance policy (the "2020A Policy") to be issued concurrently with the delivery of the Insured Series 2020 Certificates by ______(the "Insurer").
The scheduled payment of principal of and interest represented by the Series 2020B Certificates maturing on July 1 in the years 20__ and 20__ (the "Insured Series 2020B Certificates," and together with the Insured Series 2020A Certificates, the "Insured Series 2020 Certificates"), when due, will be guaranteed under a municipal bond insurance policy (the "2020B Policy," and together with the 2020A Policy, the "Policies") to be issued concurrently with the delivery of the Insured Series 2020 Certificates by the Insurer.]
2. Delivery of Offering Statement and Other Documents.
(a) Prior to the date hereof, the Board and the Corporation shall have provided, or cause to be provided, to the Underwriters for their review the Preliminary Offering Statement dated May ___, 2020 (the "Preliminary Offering Statement"), that the Board hereby deems final as of its date in accordance with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "SEC
5 Appendix 2 to page 107 108 Rule"), except for certain omissions in connection with the pricing of the Series 2020 Certificates. The Underwriters have reviewed such Preliminary Offering Statement prior to the execution of this Purchase Contract.
(b) As soon as practicable after the date hereof, and, in any event within seven (7) business days of the date hereof (or within such shorter period as may be reasonably requested by the Underwriters in order to accompany any confirmation that requests payment from any customer to comply with Rule G-32 of the Municipal Securities Rulemaking Board ("MSRB")), but in no event later than two (2) business days prior to the Date of Closing, the Board shall, so as to enable the Underwriters to comply with the provisions of the SEC Rule, deliver, or cause to be delivered, to the Underwriters a reasonable number of copies of a final Offering Statement as the Underwriters shall request dated the date hereof (including the cover page, inside cover page and appendices contained therein, together with all supplements and amendments thereto, is herein called the "Offering Statement"), substantially in the form of the Preliminary Offering Statement, with only such changes therein as shall have been accepted by the Underwriters, executed on behalf of the Board by the Chairman or Vice-Chairman and the Superintendent. The Board shall prepare the Offering Statement, including any amendments thereto, in word- searchable PDF format as described in the MSRB's Rule G-32 and shall provide the electronic copy of the word-searchable PDF format of the Offering Statement to the Representative no later than two (2) business days prior to the Date of Closing to enable the Representative to comply with MSRB Rule G-32.
(c) Unless the Representative shall otherwise give notice to the Board and the Corporation the Date of Closing (as defined herein) shall be the "end of the underwriting period" within the meaning of the SEC Rule, after which date no participating underwriter, as such term is defined in the SEC Rule, remains obligated to deliver Offering Statements pursuant to paragraph (b)(4) of the SEC Rule.
(d) At or prior to the Closing (as defined herein), the Representative shall file, or cause to be filed, the Offering Statement with the MSRB's Electronic Municipal Market Access System ("EMMA").
(e) At Closing, the Board shall deliver, or cause to be delivered to the Underwriters a copy of the Resolutions, certified to by its Secretary, substantially in the form heretofore delivered to the Underwriters, with only such changes therein as agreed upon by the Underwriters.
(f) The Board hereby authorizes the Underwriters to use the forms or copies of (i) the Resolutions, (ii) the Series 2020 Trust Agreements, (iii) the Transaction Lease Agreements, (iv) the Transaction Ground Leases, (v) the Transaction Lease Assignments, (vi) the Transaction Ground Lease Assignments, (vii) that certain Disclosure Dissemination Agent Agreement, to be dated the Date of Closing (as defined in Section 7 hereof), between the Board and Digital Assurance Certification, L.L.C. (the "Disclosure
6 Appendix 2 to page 107 109 Agreement"), (viii) the Escrow Deposit Agreement, dated ______, 2020 ( the "Escrow Deposit Agreement"), between the School Board and Hancock Whitney Bank, as escrow agent (the "Escrow Agent") and (ix) the Offering Statement and the information contained therein in connection with the public offering and sale of the Series 2020 Certificates and ratifies and confirms its authorization of the distribution and use by the Underwriters prior to the date hereof of the Preliminary Offering Statement in connection with such public offering and sale.
(g) In order to assist the Underwriters in complying with the SEC Rule, the Board shall undertake, pursuant to the Disclosure Agreement, to provide annual financial information and notices of the occurrence of specified events. A description of the Disclosure Agreement is set forth in, and a form of such agreement is attached as an appendix, to the Preliminary Offering Statement and the Offering Statement.
3. Public Offering; Establishment of Issue Price;
(a) The Underwriters agree, jointly and severally, to make a bona fide public offering of all of the Series 2020 Certificates at a price not in excess of the initial price or prices or yields not less than the yields set forth on the inside cover page of the Offering Statement; provided, however, the Underwriters reserve the right to change such initial public offering prices as the Underwriters deem necessary or desirable, in their sole discretion, in connection with the marketing of the Series 2020 Certificates, and may offer and sell the Series 2020 Certificates to certain dealers, unit investment trusts and money market funds, certain of which may be sponsored or managed by one or more of the Underwriters at prices lower than the public offering prices or yields greater than the yields set forth therein.
(b) The Representative, on behalf of the Underwriters, agrees to assist the Corporation and the School Board in establishing the issue price of the Series 2020 Certificates and shall execute and deliver to the Corporation and the School Board at Closing an "issue price" or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Appendix E, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Representative, the Corporation, the School Board and Special Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Series 2020 Certificates.
(c) [Except as otherwise set forth in Schedule A to Exhibit E attached hereto,] the Corporation and the School Board will treat the first price at which 10% of each maturity of the Series 2020 Certificates (the "10% test") is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Contract, the Representative shall report to the Corporation and the School Board the price or prices at which the Underwriters have sold to the public
7 Appendix 2 to page 107 110 each maturity of Series 2020 Certificates. If at that time the 10% test has not been satisfied as to any maturity of the Series 2020 Certificates, the Representative agrees to promptly report to the Corporation and the School Board the prices at which Series 2020 Certificates of that maturity have been sold by the Underwriters to the public. That reporting obligation shall continue until the earlier of the date upon which the 10% test has been satisfied as to the Series 2020 Certificates of that maturity or until the Closing.
(d) The Representative confirms that the Underwriters have offered the Certificates to the public on or before the date of this Purchase Contract at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Schedule A to Exhibit E attached hereto, except as otherwise set forth therein. [Schedule A to Exhibit E also sets forth, as of the date of this Purchase Contract, the maturities, if any, of the Series 2020 Certificates for which the 10% test has not been satisfied and for which the School Board and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the School Board to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the "hold-the-offering-price rule"). So long as the hold-the-offering-price rule remains applicable to any maturity of the Series 2020 Certificates, the Underwriter will neither offer nor sell unsold Series 2020 Certificates of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or
(2) the date on which the Underwriter has sold at least 10% of that maturity of the Series 2020 Certificates to the public at a price that is no higher than the initial offering price to the public.]
Upon the Board's request, the Representative shall promptly advise the School Board and the Corporation when the Underwriters have sold 10% of that maturity of the Series 2020 Certificates to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.
The School Board and Corporation acknowledges that, in making the representation set forth in this subsection, the Representative will rely on (i) the agreement of each Underwriter to comply with the hold-the-offering-price rule, as set forth in an agreement among Underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Series 2020 Certificates to the public, the agreement of each dealer who is a member of the selling group to comply with the hold- the-offering-price rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an Underwriter is a party to a retail distribution agreement that was employed in connection with the initial sale of the Series 2020 Certificates to the public, the agreement of each broker-dealer that is a party to such agreement to comply
8 Appendix 2 to page 107 111 with the hold-the-offering-price rule, as set forth in the retail distribution agreement and the related pricing wires. The School Board and the Corporation further acknowledge that each Underwriter shall be solely liable for its failure to comply with its agreement regarding the hold-the-offering-price rule and that no Underwriter shall be liable for the failure of any other Underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Certificates.]
(e) The Representative confirms that:
(i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the Underwriter is a party) relating to the initial sale of the Series 2020 Certificates to the public, together with the related pricing wires, contains or will contain language obligating each Underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) (1) report the prices at which it sells to the public the unsold Series 2020 Certificates of each maturity allotted to it until it is notified by the Representative that either the 10% test has been satisfied as to the Series 2020 Certificates of that maturity or all Series 2020 Certificates of that maturity have been sold to the public and (2) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Representative and as set forth in the related pricing wires, (B) promptly notify the Representative of any sales of the Series 2020 Certificates that, to its knowledge, are made to a purchaser who is a related party (as defined below) to an underwriter participating in the initial sale of the Series 2020 Certificates to the public (as defined below), and (C) acknowledge that, unless otherwise advised by the Underwriters, dealer or broker-dealer, the Representative shall assume that each order submitted by the Underwriters, dealer or broker-dealer is a sale to the public; and
(ii) any agreement among underwriters relating to the initial sale of the Series 2020 Certificates to the public, together with the related pricing wires, contains or will contain language obligating each Underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Series 2020 Certificates to the public to require each broker-dealer that is a party to such retail distribution agreement to (A) report the prices at which it sells to the public the unsold Series 2020 Certificates of each maturity allotted to it until it is notified by the Representative or another Underwriter that either the 10% test has been satisfied as to the Series 2020 Certificates of that maturity or all Series 2020 Certificates of that maturity have been sold to the public and (B) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed
9 Appendix 2 to page 107 112 by the Representative or another Underwriter and as set forth in the related pricing wires.
(f) The Underwriters acknowledge that sales of any Series 2020 Certificates to any person that is a related party to an Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes of this Section 3:
(i) "public" means any person other than an underwriter or a related party,
(ii) "underwriter" means (A) any person that agrees pursuant to a written contract with the Corporation and the School Board (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Series 2020 Certificates to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Series 2020 Certificates to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Series 2020 Certificates to the public),
(iii) a purchaser of any of the Series 2020 Certificates is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and
(iv) "sale date" means the date of execution of this Purchase Contract by all parties.
4. Good Faith Check. Delivered to the Board herewith is a corporate check of the Representative, payable to the order of the Board in the sum of $______(calculated as 1% of the estimated principal amount of the Series 2020 Certificates as reflected in the Preliminary Offering Statement) (the "Good Faith Check"). In the event that this offer is accepted, the Good Faith Check shall be held uncashed by the Board until the Closing and in the event the Underwriters comply with their obligations to accept and pay for the Series 2020 Certificates, as provided herein, said check shall be returned to the Representative at the Closing. In the event that the Board does not approve this offer, the Good Faith Check shall be immediately returned to the Representative. In the event that the Underwriters fail (other than for a reason permitted hereunder) to accept and pay for
10 Appendix 2 to page 107 113 the Series 2020 Certificates at the Closing as herein provided, the Board may cash the Good Faith Check and apply the funds to defray its expenses and to pay liquidated damages for such failure and for any defaults hereunder on the part of the Underwriters, and such use shall constitute a full release and discharge of all claims by the Board against the Underwriters arising out of the transactions contemplated hereby. In the event of the failure by the Board to deliver the Series 2020 Certificates at the Closing, or if the Board shall be unable to satisfy the conditions to the obligations of the Underwriters contained herein (unless such conditions are waived by the Underwriters), or if the obligations of the Underwriters shall be terminated for any reason permitted hereunder, the Board shall immediately cause the Good Faith Check to be returned to the Representative, and such return shall constitute a full release and discharge of all claims by the Underwriters against the Board arising out of the transactions contemplated hereby.
5. Representations, Warranties and Agreements.
(a) By its acceptance hereof, the Board represents and warrants to and agrees with the Underwriters that, as of the date hereof:
(i) The Board is duly and validly existing as a body corporate and politic pursuant to Article IX, Section 4(a) of the Florida Constitution and the laws of the State of Florida (particularly, Chapter 1001, Florida Statutes) and is the governing body of the District.
(ii) The Board has full legal right, power and authority to enter into this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements; by official action of the Board taken prior to or concurrently with the acceptance hereof, the Resolutions have been duly adopted in accordance with the laws of the State of Florida, are in full force and effect and have not been rescinded; this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements, when executed by the Board and the other parties thereto, will each be duly authorized and delivered and will constitute the legal, valid and binding obligations of the Board enforceable in accordance with their respective terms, except as the enforceability thereof may be affected by bankruptcy, insolvency, or other laws affecting the rights of creditors or tenants generally or the application by a court of equitable principles; the Board has duly authorized and approved the consummation by it of all other transactions contemplated by the Resolutions, the Transaction Lease Agreements, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and this Purchase Contract to have been performed or consummated at or prior to the Date of Closing.
11 Appendix 2 to page 107 114 (iii) The execution and delivery of this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements, the issuance by the Trustee of the Series 2020 Certificates and the adoption of the Resolutions, and compliance with the obligations on the Board's part contained herein and therein, will not conflict with or constitute a material breach of or material default under any federal or Florida constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Board is a party or to which the Board or any of its properties or other assets is otherwise subject, nor will any such execution, delivery, adoption, implementation or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or other assets of the Board under the terms of any such provision, law, regulation, document or instrument, except as provided or permitted by the Series 2020 Certificates, this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Lease, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements.
(iv) All approvals, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Board of its obligations under this Purchase Contract, the Resolutions, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement and the Series 2020 Trust Agreements have been, or prior to the Closing will have been, duly obtained; provided, however, that this representation and warranty does not apply to such approvals, consents and orders as may be required under the "blue sky" or securities laws of any state in connection with the offering and sale of the Series 2020 Certificates.
(v) The information contained in the Preliminary Offering Statement was and is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that no opinion is expressed with respect to the information contained therein relating to DTC or its book-entry only system and the Insurer and its Policies.)
(vi) Except as described in the Preliminary Offering Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, governmental agency or public board or body, pending or, to the best knowledge of the Board, threatened against the Board: (A) which may affect the existence of the Board or the titles or rights of their officers to their respective
12 Appendix 2 to page 107 115 offices; (B) which may affect or which seeks to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 2020 Certificates, or the collection of the Basic Rent Payments or assignment thereto to make payments on the Series 2020 Certificates and to make other payments under the Transaction Lease Agreements; (C) which in any way contests or affects the validity or enforceability of the Series 2020 Certificates, the Resolutions, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement, the Series 2020 Trust Agreements or any of them or of this Purchase Contract; (D) which would cause the Interest Component of Basic Rent Payments to be included in gross income of the holders of the Series 2020 Certificates for purposes of federal income taxation; or (E) which contests in any way the completeness or accuracy of the Preliminary Offering Statement or which contests the powers of the Board or any authority or proceedings for the issuance, sale or delivery of the Series 2020 Certificates, or the due adoption of the Resolutions or the execution and delivery of this Purchase Contract, the Transaction Lease Agreements, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement or any of them; nor, to the best knowledge of the Board, is there any basis therefor wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Series 2020 Certificates, the Resolutions, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Escrow Deposit Agreement, the Disclosure Agreement or any of them, or this Purchase Contract.
(vii) The Board will furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the Underwriters as the Underwriters may reasonably request in order: (A) to qualify the Series 2020 Certificates for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate; and (B) to determine the eligibility of the Series 2020 Certificates for investment under the laws of such states and other jurisdictions, and will use its best reasonable efforts to continue such qualifications in effect so long as required for the initial distribution of the Series 2020 Certificates; provided that the Board shall not be obligated to qualify to do business, pay any fee or to take any action that would subject it to general service of process in any state where it is not now so subject.
(viii) If, after the date of this Purchase Contract and until the earlier of (A) ninety (90) days from the end of the "underwriting period" (as defined in the SEC Rule), or (B) the time when the Offering Statement is available to any person from a nationally recognized repository, but in no case less than twenty-five (25) days following the end of the underwriting period, the Board becomes aware that any event shall have occurred which might or would cause the Offering Statement, as
13 Appendix 2 to page 107 116 then supplemented or amended, to contain any untrue statement of a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Board shall notify the Underwriters thereof, and, if in the opinion of the Underwriters such event requires the preparation and publication of a supplement or amendment to the Offering Statement, the Board will, at its own expense, forthwith prepare and furnish to the Underwriters a sufficient number of copies of an amendment of or supplement to the Offering Statement (in form and substance satisfactory to the Underwriters and their Counsel) which will supplement or amend the Offering Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading.
(ix) The Board covenants to comply with the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), in order to maintain the exclusion from gross income for purposes of federal income taxation of the Interest Component of Basic Rent Payments, subject to the right of the Board to non- appropriate. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2020 Certificates and other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States.
(x) The Board has not, since December 31, 1975 been in default in the payment of principal of, premium, if any, or interest on, or otherwise been in default with respect to, any bonds, notes or other obligations which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest.
(xi) Except as disclosed in the Preliminary Offering Statement, during the past five years, the Board has not failed to comply in any material respect with any previous continuing disclosure undertakings made pursuant to the SEC Rule.
(xii) The Board has never been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the Board is an issuer whose arbitrage certificates cannot be relied upon.
(xiii) Since June 30, 2019, the date of the latest available audited financial statements of the Board, other than as disclosed in the Preliminary Offering Statement and Offering Statement, there has been no material adverse change in the financial position or results of operation of the Board, nor has the Board incurred any material liabilities other than (i) in the ordinary course of business, and (ii) obligations incurred in connection with the issuance of the Series 2020 Certificates.
14 Appendix 2 to page 107 117 (b) By its acceptance hereof, the Corporation represents and warrants to and agrees with the Underwriters that, as of the date hereof:
(i) The Corporation is a not-for-profit corporation duly organized, incorporated, validly existing, and in good standing under the laws of the State of Florida.
(ii) The Corporation has full legal right, power and authority to enter into this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Series 2020 Trust Agreements, the Transaction Lease Assignments and the Transaction Ground Lease Assignments; by official action taken by the Corporation taken prior to or concurrently with the acceptance hereof, the Corporation Resolutions have been duly adopted in accordance with the laws of the State of Florida, are in full force and effect and have not been rescinded, this Purchase Contract, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments have been duly authorized, executed and delivered by the Corporation and constitute the legal, valid and binding obligations of the Corporation enforceable in accordance with their respective terms, except as the enforcement thereof may be affected by bankruptcy, insolvency, or other laws affecting the rights of creditors or tenants generally or the application by a court of equitable principles; the Corporation has duly authorized and approved the consummation by it of all other transactions contemplated by the Corporation Resolutions, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments, the Transaction Ground Lease Assignments, and this Purchase Contract to have been performed or consummated at or prior to the Date of Closing.
(iii) The execution and delivery of the Series 2020 Certificates, this Purchase Contract, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments and the adoption of the Corporation Resolutions, and compliance with the obligations on the Corporation's part contained herein and therein, will not conflict with or constitute a material breach of or material default under any federal or Florida constitutional provisions, law, administrative regulations, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Corporation is a party or to which the Corporation or any of its properties or other assets is otherwise subject, nor will any such execution, delivery, adoption, implementation or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or other assets of the Corporation under the terms of any such provision, law, regulation, document or instrument, except as provided or permitted by this
15 Appendix 2 to page 107 118 Purchase Contract, the Series 2020 Certificates, the Transaction Lease Agreements, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments.
(iv) All approvals, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Corporation of its obligations under this Purchase Contract, the Series 2020 Trust Agreements, the Series 2020 Certificates, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments have been, or prior to the Closing will have been, duly obtained; provided, however, that this representation and warranty does not apply to such approvals, consents and orders as may be required under the "blue sky" or securities laws of any state in connection with the offering and sale of the Series 2020 Certificates.
(v) The information contained in the Preliminary Offering Statement relating to the Corporation was and is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that no opinion is expressed with respect to the information contained therein relating to DTC or its book-entry only system and the Insurer and its Policies).
(vi) Except as described in the Preliminary Offering Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, governmental agency or public board or body, pending or, to the best knowledge of the Corporation, threatened against the Corporation: (A) which may affect the existence of the Corporation or the titles or rights of their officers to their respective offices; (B) which may affect or which seeks to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 2020 Certificates, or the collection or payment of the Lease Payments or assignment thereof to make payments on the Series 2020 Certificates and to make other payments under the Transaction Lease Agreements; (C) which in any way contests or affects the validity or enforceability of the Series 2020 Certificates, the Corporation Resolutions, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments or any of them; (D) which would cause the Interest Component of Basic Rent Payments to be included in the federal gross income of the holders of the Series 2020 Certificates; or (E) which contests in any way the completeness or accuracy of the Preliminary Offering Statement or the Offering Statement or which contests the powers of the Corporation or any authority or proceedings for the issuance, sale or delivery of the Series 2020 Certificates, or the due execution and
16 Appendix 2 to page 107 119 delivery of this Purchase Contract, the Transaction Lease Agreements, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments or any of them; nor, to the best knowledge of the Corporation, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Series 2020 Certificates, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments and the Transaction Ground Lease Assignments, or any of them, or this Purchase Contract.
(vii) The Corporation will furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the Underwriters as the Underwriters may reasonably request in order to qualify the Series 2020 Certificates for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate, and to determine the eligibility of the Series 2020 Certificates for investment under the laws of such states and other jurisdictions, and will use its best reasonable efforts to continue such qualifications in effect so long as required for the initial distribution of the Series 2020 Certificates; provided that the Corporation shall not be obligated to qualify to do business, pay any fee or to take any action that would subject it to general service of process in any state where it is not now so subject.
(viii) If between the date of this Purchase Contract and until the earlier of (A) ninety (90) days from the end of the "underwriting period" (as defined in the SEC Rule), or (B) the time when the Offering Statement is available to any person from a nationally recognized repository, but in no case less than twenty-five (25) days following the end of the underwriting period, the Corporation has knowledge which would or might cause the information contained in the Offering Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Corporation shall notify the Underwriters thereof, and if in the opinion of the Underwriters, such event requires the preparation and publication of a supplement or amendment to the Offering Statement, the Corporation shall cooperate with the Board and Underwriters in preparing a supplement or amendment to the Offering Statement, in such form and manner and at such time or times as may be reasonably called for by the Underwriters and the Board will, at its expense, furnish to the Underwriters a sufficient number of copies of such amendment or supplement to the Offering Statement.
6. The Closing. At 1:00 p.m., Eastern time, ______, 2020 (such date herein called the "Date of Closing"), or at such later time or on such later date as may be
17 Appendix 2 to page 107 120 mutually agreed upon by the Board, the Trustee and the Underwriters, the Board shall cause the Trustee, subject to the terms and conditions hereof, to deliver the Series 2020 Certificates to the Underwriters through the offices of The Depository Trust Company ("DTC") in New York, New York in definitive form (all the Series 2020 Certificates to bear proper CUSIP numbers), duly executed and authenticated, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Underwriters shall accept such delivery and pay the purchase price of the Series 2020 Certificates as set forth in Paragraph 1 hereof in Federal funds to the order of the Trustee (such delivery of and payment for the Series 2020 Certificates herein called the "Closing"). The Closing shall occur at the offices of the Board in Panama City, Florida, or such other place as shall have been mutually agreed upon by the Board, the Corporation, the Trustee and the Underwriters. The Series 2020 Certificates shall be prepared and delivered as one fully registered certificate for each maturity thereof in the definitive form and as otherwise described in the Offering Statement and the Series 2020 Trust Agreements, and will be made available for inspection and checking by the Underwriters at the offices of DTC in New York, New York, or at such other place as shall be mutually agreed upon, not later than 10:00 a.m., New York time, on the business day prior to the Date of Closing.
7. Closing Conditions. The Underwriters are entering into this Purchase Contract in reliance upon the representations, warranties and agreements of the Board and the Corporation contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing, and upon the performance of the covenants and agreements herein, as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligation under this Purchase Contract to purchase, to accept delivery of and to pay for the Series 2020 Certificates shall be conditioned upon the performance of the covenants and agreements to be performed hereunder and under such other documents and instruments to be delivered at or prior to the Closing, and shall also be subject to the following additional conditions:
(a) The representations and warranties of the Board and the Corporation contained herein shall be true, complete and correct on the date hereof and on and as of the Date of Closing, as if made on the Date of Closing, and a certificate to that effect shall be delivered to the Underwriters by the Board and the Corporation at Closing.
(b) At the date of execution hereof and at the Closing, the Resolutions and the Corporation Resolutions shall have been duly approved and adopted by the Board and the Corporation, respectively, shall be in full force and effect, and shall not have been amended, modified or supplemented, except to the extent to which the Representative shall have given its prior written consent and there shall have been taken in connection therewith and in connection with the issuance of the Series 2020 Certificates all such action as, in the opinion of Nabors, Giblin & Nickerson, P.A., Counsel for the Underwriters, shall be necessary and appropriate in connection with the transactions contemplated hereby.
18 Appendix 2 to page 107 121 (c) At the Closing, there will be no pending or threatened litigation or proceeding of any nature seeking to restrain or enjoin the issuance, sale or delivery of the Series 2020 Certificates, or the collection or application of the Basic Rent Payments to make payments on the Series 2020 Certificates or in any way contesting or affecting the validity or enforceability of the Series 2020 Certificates, the Resolutions, the Corporation Resolutions, this Purchase Contract, the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments, the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Disclosure Agreement or the Transaction Ground Lease Assignments or contesting in any way the proceedings of the Board, the Corporation or the Trustee taken with respect thereto, or contesting in any way the due existence or powers of the Board, the Corporation or the Trustee or the title of any of the members or officials of the Board, the Corporation or the Trustee to their respective offices and the Underwriters will receive the certificates of the Board, the Corporation and the Trustee to the foregoing effect, or opinions of Counsel to the Board, the Corporation and the Trustee that any such litigation is without merit.
(d) There shall have been no material adverse change in the financial condition of the Board since June 30, 2019.
(e) At the Closing, the Underwriters shall receive all of the documents required by Sections 4.02 and 4.13 of the Master Trust Agreement, as applicable, and in addition, the following documents, each dated as of the Closing:
(i) The opinion of Bryant Miller Olive PA, Special Counsel, dated the Date of Closing, in substantially the form attached to the Offering Statement as Appendix "H";
(ii) An opinion of Special Counsel, addressed to the Underwriters and the Trustee, substantially to the effect that (1) the Underwriters and the Trustee may rely upon the opinion referred to in (i) above as though addressed to them; (2) prior to termination of the Transaction Lease Agreements, (A) the Series 2020 Certificates are not subject to the registration requirements of the Securities Act of 1933, as amended, and (B) the Series 2020 Trust Agreements are exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (3) with respect to information in the Offering Statement and based upon said firm's review of the Offering Statement, as Special Counsel, and without having undertaken to determine independently the accuracy or completeness of the contents of the Offering Statement, the information in the Offering Statement under the headings (unless otherwise noted, the term "headings" includes all subheadings under a heading) entitled "INTRODUCTION" (excluding the information regarding projects, lease terms and principal amount of outstanding certificates of participation with respect to other leases under the Master Lease, as to which no opinion need be expressed), "AUTHORIZATION AND PURPOSE," "THE 2020 CERTIFICATES OF PARTICIPATION," "SECURITY FOR THE
19 Appendix 2 to page 107 122 CERTIFICATES" and "THE MASTER LEASE PROGRAM"] (excluding any financial, statistical and demographic information and information regarding DTC and its book-entry only system of registration and the Insurer and its Policies), insofar as the same purport to describe the Series 2020 Certificates, the Series 2020 Trust Agreements, the Transaction Ground Leases, the Transaction Lease Agreements, the Transaction Lease Assignments, the Escrow Deposit Agreement and the Transaction Ground Lease Assignments to the extent indicated therein are accurate summaries of the provisions purported to be summarized and that they have also reviewed the information contained in the Offering Statement under the section captioned "TAX EXEMPTION" and believe that such information is accurate; and (4) the Refunded Certificates have been defeased in accordance with the Master Trust Agreement .
(iii) The opinion(s) of Hand Arendall Harrison Sale, Counsel to the School Board and the Corporation, addressed to the School Board, the Underwriters, the Corporation[, the Insurer] and the Trustee (except for the opinions required by Sections 7(e)(iii)(4) and (12) hereof which shall be addressed solely to the Underwriters), substantially to the effect that: (1) the School Board is a body corporate and politic and the governing body of the District, duly organized and validly existing under the Constitution and laws of the State of Florida with full power and authority to adopt the Resolutions and to acquire, construct and lease- purchase the Series 2020 Project and refund the Refunded Certificates and enter into this Purchase Contract, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Disclosure Agreement, the Escrow Deposit Agreement and the Transaction Ground Leases (collectively, the "School Board Documents"); (2) the School Board Documents have been duly authorized, executed and delivered by the School Board and constitute legal, valid and binding agreements of the School Board enforceable in accordance with their terms except to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency or other laws affecting creditors' or tenants' rights generally and the application of equitable principles; (3) the School Board has duly approved, authorized, executed and delivered the Preliminary Offering Statement and the Offering Statement and the distribution thereof; (4) the information in the Preliminary Offering Statement and the Offering Statement as to legal matters relating to the School Board, the District, the Series 2020 Certificates, and the School Board Documents are correct in all material respects and do not omit any statement which, in their opinion, should be included or referred to therein (5) to the best of their knowledge the School Board is not in material breach of or material default under any agreement or applicable constitutional provision, law or administrative regulation of the State of Florida or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, material resolution, material agreement or other material instrument to which the School Board is a party or to which the School Board or any of its property or assets
20 Appendix 2 to page 107 123 is otherwise subject, and no event has occurred and is continuing that with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and the execution and delivery of the School Board Documents and the adoption of the Resolutions and compliance with the provisions on the School Board's part contained herein or therein, will not conflict with or constitute a material breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the School Board is a party or to which the School Board or any of its property or assets is otherwise subject, and any such execution, delivery, adoption or compliance will not result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the School Board under the terms of any such law, regulation or instrument, except as expressly provided by the Series 2020 Certificates, the Resolutions and the School Board Documents; (6) the Resolutions have been duly and lawfully adopted by the School Board, are in full force and effect and have not been altered, amended or repealed; (7) to the best of its knowledge, and except as otherwise disclosed in the Offering Statement under the caption "LITIGATION," there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body, pending or threatened against or affecting the School Board, nor is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would have a materially adverse effect upon the transactions contemplated by the Offering Statement or the validity of the Series 2020 Certificates, the Resolutions or the School Board Documents; (8) all authorizations, consents, approvals and reviews of governmental bodies or regulatory authorities then required for the School Board's adoption, execution or performance of its obligations under the Resolutions and the School Board Documents have been obtained or effected, and they have no reason to believe that the School Board will be unable to obtain or effect any such additional authorization, consent, approval or review that may be required in the future for performance of any of them by the School Board; (9) to the best of their knowledge, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body, pending or threatened against or affecting the Corporation, nor is there is any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would have a materially adverse effect upon the transactions contemplated by the Offering Statement or the validity of the Series 2020 Certificates or the School Board Documents; (10) the Corporation is a not-for-profit corporation duly incorporated and organized, validly existing and in good standing, under the laws of the State of Florida; (11) the Corporation Resolutions have been duly adopted and this Purchase Contract, the Series 2020 Trust Agreements, the Transaction Lease Agreements, the Transaction Ground Leases and the Transaction Lease Assignments ( collectively, the "Corporation
21 Appendix 2 to page 107 124 Documents") have each been duly authorized, executed and delivered by the Corporation and, assuming due authorization, execution and delivery by the other parties hereto and thereto, each constitutes a legal, valid, and binding agreement of the Corporation enforceable in accordance with its terms except to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally and the application of equitable principles; (12) the information in the Preliminary Offering Statement and the Offering Statement relating to the Corporation is accurate in all material respects and does not contain any untrue statement of a material fact or omit any material statement necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; (13) neither the adoption of the Corporation Resolutions nor the execution and delivery of the Corporation Documents and compliance with the provisions on the Corporation's part contained herein or therein, will not conflict with or constitute a material breach of or default under any agreement or other instrument to which the Corporation is a party or to which the Corporation or any of its property or assets is otherwise subject; and (14) all authorizations, consents, approvals and reviews of governmental bodies or regulatory authorities then required for the Corporation's adoption, execution or performance of its obligations under the Corporation Documents have been obtained or effected and, they have no reason to believe that the Corporation will be unable to obtain or effect any such additional authorization, consent, approval or review that may be required in the future for performance of any of them by the Corporation.
(iv) A certificate, dated the Date of Closing, signed by the Chairman of the Board and the Superintendent, or other appropriate officials satisfactory to the Underwriters, to the effect that, to the best knowledge of each of them: (A) the representations of the Board herein are true and correct in all material respects as of the Date of Closing; (B) the Board has performed all obligations to be performed and has satisfied all conditions on its part to be observed or satisfied under the Resolutions and the School Board Documents, as of the Date of Closing; (C) except as disclosed in the Offering Statement, there is no litigation of which either of them have notice, and to the best knowledge of each of them no litigation is pending or threatened (1) to restrain or enjoin the issuance or delivery of any of the Series 2020 Certificates, (2) in any way contesting or affecting any authority for the issuance of the Series 2020 Certificates or the validity of the Series 2020 Certificates, the Resolutions and the School Board Documents, (3) in any way contesting the corporate existence or powers of the Board, (4) to restrain or enjoin the collection of the Basic Rent Payments or the application thereof to make the payments on the Series 2020 Certificates, (5) which may result in any material adverse change in the business, properties, assets and the financial condition of the Board taken as a whole, or (6) asserting that the Offering Statement contains any untrue statement of a material fact or omits any material fact necessary to make the statements therein,
22 Appendix 2 to page 107 125 in light of the circumstances under which they were made, not misleading; (D) since June 30, 2019, no material adverse change has occurred in the financial position or results of operations of the Board except as set forth in or contemplated by the Offering Statement, and the Board has not incurred any material liabilities other than in the ordinary course of business or as set forth in or contemplated by the Offering Statement; and (E) the Offering Statement did not as of its date, and does not as of the Date of Closing contain any untrue statement of a material fact or omit to state a material fact required to be included therein or necessary in order to make the statements contained therein, in light of the circumstances in which they were made, not misleading (provided, however, that no opinion need be expressed with respect to the information contained therein relating to DTC or its book-entry only system and the Insurer and its Policies).
(v) A certificate, dated the Date of Closing, signed by the President and Secretary of the Corporation or other appropriate officials satisfactory to the Underwriters, to the effect that, to the best of their knowledge: (A) the representations of the Corporation herein are true and correct in all material respects as of the Date of Closing; (B) the Corporation has performed all obligations to be performed and has satisfied all conditions on its part to be observed or satisfied under the Corporation Documents as of the Date of Closing; (C) except as disclosed in the Offering Statement, there is no litigation of which they have notice, and to the best of their knowledge, no litigation is pending or threatened (1) to restrain or enjoin the issuance or delivery of any of the Series 2020 Certificates, (2) in any way contesting or affecting any authority for the issuance of the Series 2020 Certificates or the validity of the Series 2020 Certificates or the Corporation Documents, (3) in any way contesting the corporate existence or powers of the Corporation, (4) to restrain or enjoin the collection of the Basic Lease Payments or the application thereof to make Certificate Payments, or (5) asserting that the Offering Statement contains any untrue statement of a material fact relating to the Corporation or omits any material fact relating to the Corporation necessary to make the statements therein relating to the Corporation, in light of the circumstances under which they were made, not misleading; and (D) the Corporation has not incurred any material liabilities other than in the ordinary course of business or as set forth in or contemplated by the Offering Statement.
(vi) An opinion or opinions dated the Date of Closing and addressed to the Board and the Underwriters of ______, as counsel to the Trustee, in its capacity as Trustee and Escrow Agent, to the effect that: (A) the Trustee is a state banking corporation, validly existing and in good standing under the laws of the State of Mississippi; (B) the Trustee is duly authorized to execute and deliver and to perform all of its obligations under the Series 2020 Trust Agreements, the Series 2020 Certificates, the Escrow Deposit Agreement, the Transaction Lease Assignments and the Transaction Ground Lease Assignments; (C) the execution and delivery of
23 Appendix 2 to page 107 126 and performance by the Trustee of its obligations under the Series 2020 Trust Agreements, the Series 2020 Certificates, the Escrow Deposit Agreement, the Transaction Lease Assignments and the Transaction Ground Lease Assignments are within the trust powers of the Trustee; (D) the Trustee has the legal power and authority to execute and deliver the Series 2020 Certificates and the Series 2020 Certificates have been duly executed, authenticated and delivered in accordance with the Series 2020 Trust Agreements; and (E) the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Transaction Lease Assignments and the Transaction Ground Lease Assignments have each been duly authorized, executed and delivered by the Trustee, and each constitutes the legal, valid and binding obligation of the Trustee enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency or similar laws affecting the rights of creditors generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(vii) A certificate dated the Date of Closing, signed by an authorized officer of the Trustee to the effect that: (A) the Trustee is a state banking corporation duly organized and in good standing under the laws of the State of Mississippi; (B) the Trustee has full corporate power, authority and legal right to execute and deliver, and perform its obligations under the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Transaction Lease Assignments, the Series 2020 Certificates and the Transaction Ground Lease Assignments and has taken any and all actions and has obtained any and all consents and approvals required in connection with the foregoing; (C) the execution and delivery of the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Series 2020 Certificates, the Transaction Lease Assignments and the Transaction Ground Lease Assignments and all actions necessary or appropriate to carry out and consummate the transactions contemplated hereby and thereby, are within the trust powers of the Trustee; (D) the execution and delivery of, and the performance under each of the foregoing will not conflict with, violate or result in a breach of or constitute a default under the Trustee's charter or bylaws or a material default under any indenture, agreement or other instrument by which the Trustee or any of its properties may be bound or any material constitutional or statutory provision or order, rule, regulation, decree or ordinance of any federal or state court, government or governmental body having jurisdiction over the Trustee or any of its property and by which the Trustee or any of its property may be bound; (E) there is no litigation, proceeding or investigation relating to the Trustee before or by any court, public board or body pending or, to the knowledge of the Trustee, threatened against or affecting the Trustee, challenging the validity of, or in which an unfavorable decision, ruling or finding would materially adversely affect the Series 2020 Certificates, the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Transaction Lease Assignments or the Transaction Ground Lease Assignments; (F) the Series 2020
24 Appendix 2 to page 107 127 Certificates have been duly authenticated, executed and delivered by the Trustee in accordance with the Series 2020 Trust Agreements; and (G) the Trustee has performed all obligations to be performed and has satisfied all conditions on its part to be observed or satisfied as a precondition to the effectiveness of the Transaction Lease Assignments, the Series 2020 Trust Agreements, the Escrow Deposit Agreement, the Series 2020 Certificates and the Transaction Ground Lease Assignments at or prior to the Closing.
(viii) An opinion, dated the Date of Closing and addressed to the Underwriters, of Nabors, Giblin & Nickerson, P.A., counsel for the Underwriters, substantially to the effect that (A) prior to termination of the Transaction Lease Agreements, the Series 2020 Certificates are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Series 2020 Trust Agreements are exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (B) based upon their participation and their review of the Preliminary Offering Statement and Offering Statement as counsel for the Underwriters and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Offering Statement and Offering Statement, nothing has come to their attention causing them to believe that the Preliminary Offering Statement, as of its date, and Offering Statement, as of its date and as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except for the financial and statistical information contained in the Preliminary Offering Statement and Offering Statement and the information related to DTC or its book-entry only system of registration, the Insurer and its Policies and the information and statements provided in Appendices thereto, as to all of which no view need be expressed); and (C) the Disclosure Agreement, together with the Offering Statement and Purchase Contract, when delivered in connection with the Series 2020 Certificates, will satisfy the requirements contained in the SEC Rule for an undertaking for the benefit of the owners of the Series 2020 Certificates to provide information at the times and in the manner required by said SEC Rule.
(ix) Evidence satisfactory to the Underwriters that [(a) S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S&P") expects to assign a rating of "AA" to the Series 2020 Certificates based on the issuance of the Policies, and (b) Moody's Investors Service ("Moody's") has issued a rating of "___" to the Series 2020 Certificates and that such rating is in effect on the Date of Closing.
[(x) An opinion, dated the Date of Closing, and addressed to the School Board, the Corporation, the Trustee and the Underwriters from counsel for the
25 Appendix 2 to page 107 128 Insurer, substantially to the effect that: (a) the Insurer is a stock insurance company, duly organized and validly existing under the laws of the State of New York and duly qualified to conduct an insurance business in the State of Florida; (b) the Insurer has full corporate power and authority to execute and deliver the Policies and the Policies have been duly authorized, executed and delivered by the Insurer and constitutes the legal, valid and binding obligation of the Insurer enforceable in accordance with its terms except to the extent that the enforceability (but not the validity) of such obligation may be limited by any applicable bankruptcy, insolvency, liquidation, rehabilitation or other similar law or enactment now or hereafter enacted affecting the enforcement of creditors' rights; (c) proceedings legally required for the issuance of the Policies have been taken by the Insurer and licenses, orders, consents or other authorizations or approvals of any governmental boards or bodies legally required for the enforceability of the Policies have been obtained; and proceedings not taken and any licenses, authorizations or approvals not obtained are not material to the enforceability of the Policies; and (d) the statements contained in the Offering Statement under the heading ["BOND INSURANCE,"] insofar as such statements constitute summaries of the matters referred to therein, accurately reflect and fairly present the information purported to be shown and, insofar as such statements describe the Insurer, fairly and accurately describe the Insurer.]
(xi) Request and Authorization Certificates to the Trustee from the Corporation to execute and deliver the Series 2020 Certificates.
[(xii) Receipt of the Policies from the Insurer.]
(xiii) Articles of Incorporation, Bylaws, Good Standing Certificate and authorizing resolution of the Corporation.
(xvi) Evidence satisfactory to the Underwriters that a contract for architectural and design services or for construction management services for the Series 2020 Project was entered into by the School Board prior to July 1, 2017;
(xv) A copy of the Transaction Lease Agreements, the Transaction Ground Leases, the Series 2020 Trust Agreements, the Transaction Lease Assignments, the Disclosure Agreement, the Escrow Deposit Agreement, and the Transaction Ground Lease Assignments, fully executed by the respective parties hereto.
(xvi) A Certificate of an authorized representative of the Board deeming the Preliminary Offering Statement "final" as of its date for purposes of the SEC Rule, except for "permitted omissions.
(xvii) Verification Report of ______.
26 Appendix 2 to page 107 129 (xviii) Such additional legal opinions, certificates, instruments, approvals and other documents as the Underwriters may reasonably require to evidence the truth and accuracy, as of the date hereof and as of the Date of Closing, of the representations and warranties contained herein and of the statements and information contained in the Offering Statement and the due performance or satisfaction on or prior to the Date of Closing of all the agreements then to be performed and conditions then to be satisfied by the Board or the Trustee.
All of the evidence, opinions, letters, certificates, instruments and other documents, mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in the form specified herein or are otherwise in form and substance satisfactory to the Underwriters and its counsel. Acceptance of delivery of the Series 2020 Certificates shall be deemed approval of such form and substance by the Underwriters and their Counsel.
If the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Series 2020 Certificates contained in this Purchase Contract are not satisfied, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Series 2020 Certificates shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor the Board, the Corporation or the Trustee shall be under any further obligation hereunder, except that the respective obligations of the Board and the Underwriters set forth in Section 9 hereof shall continue in full force and effect and the Good Faith Deposit specified in Section 4 hereof shall be returned to the Representative.
8. Termination. The Underwriters may terminate this Purchase Contract by notice to the Board and the Corporation in the event that between the date hereof and the Closing (a) legislation shall be enacted by the Congress of the United States or adopted by either House thereof or a decision by a court of the United States or the Tax Court of the United States shall be rendered or a ruling, regulation or official statement by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made, with respect to federal taxation of revenues or other income of the general character expected to be derived under the Transaction Lease Agreements from the Board or upon interest received on securities of the general character of the Series 2020 Certificates or which would have the effect of changing, directly or indirectly, the federal income tax consequences of receipt of interest on securities of the general character of the Series 2020 Certificates in the hands of the holders thereof, which in the reasonable opinion of the Underwriters would materially adversely affect the market price of the Series 2020 Certificates; (b) the United States shall become engaged in hostilities that have resulted in a declaration of war or, any other national or international emergency, calamity or hostilities relating to the effective operation of government or the financial community shall have occurred or escalated, which, in the reasonable opinion of the Underwriters, materially adversely affects the market price of the Series 2020
27 Appendix 2 to page 107 130 Certificates; (c) there shall be in force a general suspension of trading on the New York Stock Exchange as the result of an event affecting the national economy; (d) a general banking moratorium shall have been established by federal, New York or Florida authorities; (e) an event shall occur which makes untrue or incorrect in any material respect, as of the time of such event, any statement or information contained in the Offering Statement or which is not reflected in the Offering Statement, but should be reflected therein, in order to make the statements contained therein not misleading in any material respect and, in either such event, the School Board refuses to permit the Offering Statement to be supplemented to supply such statement or information, or the effect of the Offering Statement as so supplemented, is in the reasonable judgment of the Underwriters, materially adversely affects the market for the Series 2020 Certificates or the sale, at the contemplated offering prices (or yields), by the Underwriters of the Series 2020 Certificates; (f) legislation shall be enacted, or a decision by a court of the United States shall be rendered, that, in the reasonable opinion of counsel for the Underwriters, has the effect of requiring the contemplated distribution of the Series 2020 Certificates or any action or instrument pertaining thereto to be registered under the Securities Act of 1933, as amended, or under Florida law, or of requiring the Series 2020 Trust Agreements, or any instrument or act pertaining thereto to be qualified under the Trust Indenture Act of 1939, as amended; (g) there shall have been any materially adverse change in the affairs of the Board that, in the reasonable judgment of the Underwriters, materially and adversely affects the market price or marketability of the Series 2020 Certificates or the ability of the Underwriters to enforce contracts for the sale of the Series 2020 Certificates and (h) a reduction or withdrawal by Moody's Investors Service of its rating on the Series 2020 Certificates from "___." Upon any such termination, the Board shall immediately return to the Representative the Good Faith Check delivered pursuant to Section 4 hereof.
9. Expenses.
(a) Except as provided in (b) below, the Underwriters shall be under no obligation to pay, and the Board shall pay, such expenses incident to the issuance of the Series 2020 Certificates and the performance of the Board's obligations hereunder, including, but not limited to the following expenses: (i) the cost of preparing and printing or other reproduction of the Transaction Lease Agreements, the Transaction Ground Leases, the Transaction Lease Assignments, the Transaction Ground Lease Assignments, the Disclosure Agreement, the Escrow Deposit Agreement and the Series 2020 Trust Agreements; (ii) the cost of preparing and printing the Series 2020 Certificates, the Preliminary Offering Statement and the Offering Statement; (iii) the fees and disbursements of the Trustee; (iv) the fees and disbursements of Special Counsel, Disclosure Counsel and Counsel to the Board and the Corporation; (v) the fees and disbursements of the financial advisor to the Board; (vi) the fees relating to the ratings on the Series 2020 Certificates; and (vii) the fees and disbursements of any experts, accountants, consultants or advisors retained by the Board or the Corporation. The Board shall be solely responsible for and shall pay for any expenses incurred by the Underwriters
28 Appendix 2 to page 107 131 on behalf of the Board's employees and representatives which are incidental to implementing this Purchase Contract including, but not limited to, meals, transportation, lodging, and entertainment of those employees and representatives.
(b) The Underwriters shall pay expenses related to the initial purchase and sale of the Series 2020 Certificates as follows (certain of which may be included in the expense component of the underwriting discount): (i) all advertising expenses in connection with the public offering of the Series 2020 Certificates; (ii) the fees and disbursements of Nabors, Giblin & Nickerson, P.A., Counsel to the Underwriters; (iii) the costs of "blue sky;" (iv) the costs of preparing this Purchase Contract, and (v) all other expenses incurred by them in connection with the public offering of the Series 2020 Certificates.
10. Notices. Any notice or other communication to be given to the Board or the Corporation under this Purchase Contract may be given by delivering the same in writing to the address set forth above to the attention of the Superintendent and any notice or other communications to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to Raymond James & Associates, Inc. at 880 Carillon Parkway, St. Petersburg, Florida 33716 to the attention of Rick W. Patterson, Managing Director - Public Finance.
11. Parties in Interest.
(a) This Purchase Contract is made solely for the benefit of the Board, the Corporation and the Underwriters (including the successors or assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the representations, warranties and agreements of the Board contained in this Purchase Contract shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriters; (ii) delivery of and payment for the Series 2020 Certificates pursuant to this Purchase Contract; or (iii) any termination of this Purchase Contract, but only to the extent provided by Sections 7 or 8 hereof.
(b) No covenant, stipulation, obligation or agreement contained in this Purchase Contract shall be deemed to be a covenant, stipulation, obligation or agreement of any member, agent or employee of the Board or the Corporation in his or her individual capacity and neither the members of the Board or the Corporation nor any official executing this Purchase Contract shall be liable personally under this Purchase Contract or be subject to any personal liability or accountability by reason of the execution hereof.
12. Effectiveness. This Purchase Contract shall become effective upon the execution of the acceptance hereof on behalf of the Board and the Corporation by their duly authorized officers, and shall be valid and enforceable at the time of such acceptance.
13. Counterparts. This Purchase Contract may be executed in several counterparts, which together shall constitute one and the same instrument.
29 Appendix 2 to page 107 132 14. Florida Law Governs. The validity, interpretation and performance of this Purchase Contract shall be governed by the laws of the State of Florida.
15. Entire Agreement. This Purchase Contract when accepted by the Board and the Corporation in writing as heretofore specified shall constitute the entire agreement of the parties hereto with respect to the offer and sale of the Series 2020 Certificates and the transactions related thereto and supersedes all prior agreements and understandings between the parties with respect to the issuance and sale of the Series 2020 Certificates. No modification, alteration, supplement or amendment to this Purchase Contract shall be binding upon any of the parties hereto until such modification, alteration or amendment is reduced to writing and executed by all of the parties hereto.
[Remainder of page intentionally left blank]
30 Appendix 2 to page 107 133 16. Headings. The headings of the Sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be part hereof.
Very truly yours,
RAYMOND JAMES & ASSOCIATES., as Representative
By: Managing Director - Public Finance
Accepted as of the date hereof:
THE SCHOOL BOARD OF BAY COUNTY, FLORIDA
By: Chairman
Attest:
By: Secretary/Superintendent of Schools
BAY COUNTY EDUCATIONAL FACILITIES FINANCE CORPORATION
By: President
By: Secretary
31 Appendix 2 to page 107 134 APPENDIX A
$______$______CERTIFICATES OF REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2020A PARTICIPATION, SERIES 2020B (School Board of Bay County, Florida (School Board of Bay County, Florida Master Lease Program, Series 2020A) Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Evidencing an Undivided Proportionate Interest of Owners Interest of Owners thereof in Basic Rent Payments to be thereof in Basic Rent Payments to be made under a made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by The School Board of Bay County, The School Board of Bay County, Florida Florida
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES AND YIELDS
$______Series 2020A Certificates
Maturity Principal Interest (July 1) Amount Rate Price Yield
$______Series 2020B Certificates
Maturity Principal Interest (July 1) Amount Rate Price Yield
A-1 Appendix 2 to page 107 135 APPENDIX B
$______$______CERTIFICATES OF REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2020A PARTICIPATION, SERIES 2020B (School Board of Bay County, Florida (School Board of Bay County, Florida Master Lease Program, Series 2020A) Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Evidencing an Undivided Proportionate Interest of Owners Interest of Owners thereof in Basic Rent Payments to be thereof in Basic Rent Payments to be made under a made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by The School Board of Bay County, The School Board of Bay County, Florida Florida
Optional Prepayment of Series 2020A Certificates
The Series 2020A Certificates maturing on or before July 1, 20__ shall not be subject to prepayment at the option of the School Board.
The Series 2020A Certificates maturing on or after July 1, 20__ shall be subject to prepayment from prepayments of Basic Rent made by the School Board pursuant to the Series 2020A Lease Agreement, in whole or in part on July 1, 20__ or any date thereafter, and if in part, in such order of maturities as may be designated by the School Board, or if not so designated, in the inverse order of maturities, and by lot within a maturity in such manner as may be designated by the Trustee, at a Prepayment Price of 100% of the principal amount of the Series 2020A Certificates to be prepaid, plus accrued and unpaid interest thereon to the prepayment date.
No Extraordinary Prepayment of Series 2020A Certificates from Insurance or Condemnation Proceeds
The Series 2020A Certificates are not subject to extraordinary prepayment from the Net Proceeds of insurance or condemnation relating to the Series 2020A Project.
No Optional Prepayment of Series 2020B Certificates
The Series 2020B Certificates shall not be subject to prepayment at the option of the School Board.
B-1 Appendix 2 to page 107 136 No Extraordinary Prepayment of Series 2020B Certificates from Insurance or Condemnation Proceeds
The Series 2020B Certificates are not subject to extraordinary prepayment from the Net Proceeds of insurance or condemnation relating to the Series 1999 Project.
[Remainder of page intentionally left blank]
B-2 Appendix 2 to page 107 137 APPENDIX C
DISCLOSURE STATEMENT
The undersigned, Raymond James & Associates, Inc. (the "Representative"), as representative of itself and PNC Capital Markets LLC (collectively, the "Underwriters") proposes to negotiate with The School Board of Bay County, Florida, for the sale of $______aggregate principal amount of Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) (the "Series 2020A Certificates"), and $______Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) (the "Series 2020B Certificates," and together with the Series 2020A Certificates, the "Series 2020 Certificates) to be completed on this date. Prior to the award of the Series 2020 Certificates, the following information is hereby furnished to the Board:
1. Set forth is an itemized list of the nature and estimated amounts of expenses to be incurred by the Underwriters in connection with the issuance of the Series 2020 Certificates:
Per $1,000 Total Underwriters' Counsel Fee I-deal Bookrunning I-deal Wire Charge I-deal Order Monitor CUSIP DTC Blue Sky New York Filing Fee Out of Pocket
TOTAL
2. Set forth below are the names, addresses and estimated amounts of compensation of all "finders," as defined in Section 218.386, Florida Statutes, as amended, in connection with the issuance of the Series 2020 Certificates:
NONE
3. The amount of the underwriting spread expected to be realized by the Underwriters with respect to the Series 2020 Certificates is $______($______per $1,000), which includes the following:
C-1 Appendix 2 to page 107 138 Total Per $1,000 Average Take-Down Underwriters' Expenses
TOTAL
4. The management fee to be charged by the Underwriters is $0.00 ($0.00 per $1,000).
5. Set forth below are all fees, bonuses and other compensation to be paid by the Underwriters in connection with the Series 2020 Certificates to any person not regularly employed or retained by them.
NONE
6. The name and address of the Underwriters are as follows:
Raymond James & Associates, Inc. 880 Carillon Parkway St. Petersburg, Florida 33716
PNC Capital Markets LLC 201 North Franklin Street, Suite 1500 Tampa, Florida 33602
We understand that you do not require additional disclosure information pursuant to Section 218.385(6), Florida Statutes, as amended.
IN WITNESS WHEREOF, the undersigned has executed this Disclosure Statement this __ day of ______, 2020.
RAYMOND JAMES & ASSOCIATES INC., as Representative
By: Managing Director - Public Finance
C-2 Appendix 2 to page 107 139 APPENDIX D
TRUTH-IN-BONDING STATEMENT
______, 2020
The School Board of Bay County, Florida Panama City, Florida
Bay County Educational Facilities Finance Corporation Panama City, Florida
Re: $______Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020A) Evidencing an Undivided Proportionate Interest of the Owners thereof in Basic Rent Payments to be made under a Master Lease-Purchase Agreement by the School Board of Bay County, Florida, and;
$______Refunding Certificates of Participation (School Board of Bay County, Florida Master Lease Program, Series 2020B) Evidencing anUndivided Proportionate Interest of Owners thereof in Basic Rent Payments to be made under a Master Lease Purchase Agreement by The School Board of Bay County, Florida
Ladies and Gentlemen:
In connection with the proposed issuance by The School Board of Bay County, Florida (the " Board") of the above-captioned Certificates of Participation Series 2020A (the "Series 2020A Certificates") and Refunding Certificates of Participation 2020B (the "Series 2020B Certificates," and together with the Series 2020A Certificates, the "Series 2020 Certificates") Raymond James & Associates, Inc., as representative of the Underwriters (the "Representative"), is underwriting a public offering of the Series 2020 Certificates pursuant to a Certificate Purchase Contract (the "Purchase Contract"), dated ______, 2020, among the Underwriters, the Bay County Educational Facilities Finance Corporation (the "Corporation") and the Board.
The purpose of this letter is to furnish, pursuant to the provisions of Section 218.385(2) and (3), Florida Statutes, the truth-in-bonding statement required thereby, as follows:
D-1 Appendix 2 to page 107 140 (1) The Board is proposing to cause the issuance of (i) $______of the Series 2020A Certificates for the purpose of financing the acquisition, construction, installation, equipping and lease-purchase of certain education facilities and paying certain costs of issuance with respect to the Series 2020A Certificates as more fully described in the Purchase Contract and (ii) $______of the Series 2020B Certificates for the purpose of refunding all of the outstanding Certificates of Participation, Series 2010A, as more fully described in the Purchase Contract. This debt or obligation is expected to be repaid over a period of approximately ____ years, at an approximate all-inclusive true interest cost rate of ______%, total interest paid over the life of the debt or obligation will be $______.
(2) The Series 2020 Certificates are expected to be paid solely from the Basic Rent Payments payable under the Transaction Lease Agreements (as defined in the Purchase Contract) such Basic Rent Payments being subject to annual appropriation by the Board, and other funds provided therefor in the Series 2020 Trust Agreements (as defined in the Purchase Contract). The Series 2020 Certificates are not secured by a pledge of the faith and credit of the Corporation, of the Board or of the State of Florida or of any political subdivision thereof. Approving the Series 2020 Certificates and entering into the Transaction Lease Agreements will result in approximately $______(representing the average annual lease payments with respect to the Series 2020 Certificates) of such funds of the Board not being available for other services or purposes of the Board each year the Transaction Lease Agreements are in effect, but in no event for longer than ____ years.
The foregoing is provided for information purposes only and shall not affect or control the actual terms and conditions of the Series 2020 Certificates.
Sincerely,
RAYMOND JAMES & ASSOCIATES, INC., as Representative
By: Managing Director - Public Finance
D-2 Appendix 2 to page 107 141
APPENDIX E
ISSUE PRICE CERTIFICATE OF THE UNDERWRITER
$______$______CERTIFICATES OF REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2020A PARTICIPATION, SERIES 2020B (School Board of Bay County, Florida (School Board of Bay County, Florida Master Lease Program, Series 2020A) Master Lease Program, Series 2020B) Evidencing an Undivided Proportionate Evidencing an Undivided Proportionate Interest of Owners Interest of Owners thereof in Basic Rent Payments to be thereof in Basic Rent Payments to be made under a made under a Master Lease-Purchase Agreement by Master Lease-Purchase Agreement by The School Board of Bay County, The School Board of Bay County, Florida Florida
ISSUE PRICE CERTIFICATE The undersigned, on behalf of Raymond James & Associates, Inc. (the "Representative"), on behalf of itself and PNC Capital Markets LLC (together, the "Underwriting Group"), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations Certificates of Participation, Series 2020A (the "Series 2020A Certificates") and Refunding Certificates of Participation, Series 2020B (the "Series 2020B Certificates," and together with the Series 2020A Certificate, the "Certificates").
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity of the Certificates was sold to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities.
(a) The Underwriting Group offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Certificates is attached to this certificate as Schedule B.
E-1 Appendix 2 to page 107 142
(b) As set forth in the Certificate Purchase Contract, the members of the Underwriting Group have agreed in writing that, (i) for each Maturity of the Hold- the-Offering-Price Maturities, they would neither offer nor sell any of the Certificates of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold-the-offering-price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. The Representative has not offered or sold any unsold Certificates of any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Certificates during the Holding Period. Nothing has come to the attention of the Representative that any of the Certificates have been sold at a price that is higher than the respective Initial Offering Price for that Maturity of the Certificates during the Holding Period.
3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Certificates listed in Schedule A hereto as the "General Rule Maturities."
(b) Hold-the-Offering-Price Maturities means those Maturities of the Certificates listed in Schedule A hereto as the "Hold-the-Offering-Price Maturities."
(c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (______, 2020), or (ii) the date on which the Underwriting Group has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the- Offering-Price Maturity.
(d) Issuer means The School Board of Bay County, Florida.
(e) Maturity means Certificates with the same credit and payment terms. Certificates with different maturity dates, or Certificates with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly.
E-2 Appendix 2 to page 107 143
(g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Certificates. The Sale Date of the Certificates is ______, 2020.
(h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Certificates to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Certificates to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Certificates to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Representative’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Certificates, and by Bryant Miller Olive P.A. in connection with rendering its opinion that the interest on the Certificates is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the Issuer from time to time relating to the Certificates. The representations set forth herein are not necessarily based on personal knowledge and, in certain cases, the undersigned is relying on representations made by the other members of the Underwriting Group.
RAYMOND JAMES & ASSOCIATES, INC., as Representative
By: Managing Director - Public Finance Dated: ______, 2020
E-3 Appendix 2 to page 107 144
SCHEDULE A SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
Series 2020A Certificates
General Rule Maturities
Maturity Principal Interest (July 1) Amount Rate Price Yield
Hold-The-Offering-Price Maturities
Maturity Principal Interest (July 1) Amount Rate Price Yield
E-4 Appendix 2 to page 107 145
Series 2020B Certificates
General Rule Maturities
Maturity Principal Interest (July 1) Amount Rate Price Yield
Hold-The-Offering-Price Maturities
Maturity Principal Interest (July 1) Amount Rate Price Yield
E-5 Appendix 2 to page 107 146
SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached)
E-6 Appendix 2 to page 107 147
April 28, 2020
WILLIAM V. HUSFELT III
SUPERINTENDENT M E M O R A N D U M 1311 Balboa Avenue TO: School Board Members Panama City, Florida 32401 FROM: William V. Husfelt III, Superintendent
AGENDA ITEM: 2020 Graduation Plan Recommendation
(850) 872-4100
Hearing Impaired Access CONSENT OR ACTION (Please circle one) (800) 955-8770 Voice (800) 955-8771 TDD BUDGET AMOUNT:
www.bay.k12.fl.us IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please circle one)
Board Members: IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS: Fund Function Object Cost Center Project Program Jerry Register District 1
SUPERINTENDENT'S RECOMMENDATION:
District 2
Approval: ______Disapproval: ______Discussion: ______
Pamm Chapman District 3
______Ryan Neves Superintendent District 4
Board Action Steve Moss District 5
April 28, 2020 108 April 28, 2020 109
BAY DISTRICT SCHOOLS DEPARTMENT OF HUMAN RESOURCES JOB DESCRIPTION
TITLE: PROJECT MANAGER AUDIO/VISUAL ITV: MEDIA SERVICES
QUALIFICATIONS: 1. Bachelor’s Degree or higher, preferred 2. Valid teaching certificate or a minimum of three (3) years of experience in television, audio/visual editing, professional productions and integration of educational technologies. 3. At least three (3) years of experience working with audio/visual systems related to, but not limited to new or renovated facilities and/or ITV studio technologies. 4. Valid Florida driver’s license.
PHYSICAL REQUIREMENTS: Medium
Light Work: Exerting up to 25 pounds of force occasionally and/or up to 15 pounds of force as frequently as needed to move objects. Medium Work: Exerting up to 50 pounds of force occasionally, and/or up to 20 pounds of force frequently and/or up to 10 pounds of force as needed to move objects. Heavy Work: Exerting up to 100 pounds of force occasionally, and/or up to 50 pounds of force frequently and/or up to 20 pounds of force as needed to move objects.
REPORTS TO: As assigned by Bay District Organizational Structure.
SUPERVISES: As assigned by Bay District Organizational Structure.
PERFORMANCE RESPONSIBILITIES: 1. Manages ITV Staff to include, but not limited to specialist(s), and technician(s). 2. Designs, constructs, and provides maintenance for ITV Studios, distribution systems, audio visual systems, scoreboard systems, theaters and multipurpose facilities throughout the district. 3. Manages general media services items such as, but not limited to live events, live webcasts, school multimedia productions, photography, drone photography, and school level ITV. 4. Provides technical support for Interactive Flat Panels, SMART panels and other classroom related technologies as needed. 5. Provides support and training to Live Event Coordinators at district facilities. 6. Works with facilities, MIS, Instructional Technology and Media Services in planning of audio/visual systems and instructional technology needs for new construction and or renovations. 7. Works in conjunction with Gulf Coast State College ITV staff for public broadcast of programmed events as related to the district instructional television broadcasts. 8. Performs other duties as assigned.
TERMS OF EMPLOYMENT: 1. Successful completion of State and Federal Background check is required for employment. 2. Twelve (12) months. Paygrade as established by the School Board in Current Salary Placement Schedule 2.
EVALUATION: Performance evaluated annually in accordance with School Board Policy.
______Reviewed by Dept. of Human Resources Adopted by Bay District School Board
Bay District Schools is an Equal Opportunity Employer
April 28, 2020 110 April 28, 2020 111 April 28, 2020 112 April 28, 2020 113 April 28, 2020 114 April 28, 2020 115 April 28, 2020 116 April 28, 2020 117
April 17, 2020 WILLIAM V. HUSFELT III
SUPERINTENDENT M E M O R A N D U M
1311 Balboa Avenue TO: William V. Husfelt III, Superintendent Panama City, Florida FROM: Doug Lee, Executive Director for Operational 32401 Services
AGENDA ITEM: Bay Base Secured Entry Projects Guaranteed Maximum (850) 767-4100 Price (GMP) Cedar Grove Elementary, Cherry Street Hearing Impaired Access Elementary, Northside Elementary GAC Contractors, Inc. (800) 955-8770 Voice
(800) 955-8771 TDD CONSENT OR ACTION (Please circle one)
www.bay.k12.fl.us BUDGET AMOUNT: N/A
Board Members: IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please circle one)
Jerry Register
District 1 IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS: Fund Function Object Cost Center Project Program
District 2 SUPERINTENDENT'S RECOMMENDATION:
Pamm Chapman Approval: ______Disapproval: ______Discussion: ______District 3
Ryan Neves District 4 ______
Superintendent
Steve Moss District 5 Board Action April 28, 2020 118 April 28, 2020 119 April 28, 2020 120 April 28, 2020 121 April 28, 2020 122 April 28, 2020 123 April 28, 2020 124 April 28, 2020 125
April 17, 2020 WILLIAM V. HUSFELT III
SUPERINTENDENT M E M O R A N D U M
1311 Balboa Avenue TO: William V. Husfelt III, Superintendent Panama City, Florida FROM: Doug Lee, Executive Director for Operational 32401 Services
AGENDA ITEM: Mowat Middle School Media Center Hurricane (850) 767-4100 Restoration Guaranteed Maximum Price (GMP) Hearing Impaired Access
(800) 955-8770 Voice CONSENT OR ACTION (Please circle one) (800) 955-8771 TDD
BUDGET AMOUNT: N/A www.bay.k12.fl.us
IN CURRENT BUDGET OR UNAPPROPRIATED FUND BALANCE (Please circle one) Board Members:
IF BUDGETED, GIVE BUDGET ACCOUNT NUMBERS: Jerry Register Fund Function Object Cost Center Project Program District 1
SUPERINTENDENT'S RECOMMENDATION:
District 2
Approval: ______Disapproval: ______Discussion: ______
Pamm Chapman District 3
Ryan Neves ______District 4 Superintendent
Steve Moss Board Action District 5
April 28, 2020 126 April 28, 2020 127 April 28, 2020 128 April 28, 2020 129