Okaloosa County BOCC — November 4, 2014 — Preliminary Official Statement — reading text

tax reform efforts that could significantly reduce the benefit of, or otherwise affect the exclusion from gross income of, interest on obligations such as the Series 2014 Bonds. The President previously released legislative proposals that would, among other things, subject interest on tax- exempt obligations to a Federal income tax for taxpayers with incomes above certain thresholds for tax years beginning after 2012. The further introduction or enactment of one or more of such proposals could affect the market price or marketability of the Series 2014 Bonds. 34 Bond Premium The difference between the principal amount of the Series 2014 Bonds maturing on October 1, through October 1, (collectively, the "Premium Bonds") and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond which ends on the earlier of the maturity or call date for each of the Premium Bonds which minimizes the yield on such Premium Bonds to the purchaser. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering to the public at the initial offering price is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds. GENERAL PURPOSE FINANCIAL STATEMENTS The audited financial statements of the County for the Fiscal Year ended September 30, 2013 have been included as Appendix A to this Official Statement as a public document. The auditor has not been requested to perform, and has not performed, any service in connection with, and is therefore not associated with, the offering of the Series 2014 Bonds. The Series 2014 Bonds are payable solely from the Pledged Funds as described herein. The financial statements included in Appendix A are presented for general information purposes only. RATINGS Standard & Poor's Ratings Group ("S&P") and Fitch Ratings ("Fitch") have assigned ratings to the Series 2014 Bonds of "AA" (stable outlook) and "AA-" (stable outlook), respectively, to the Series 2014 Bonds. There is no assurance that each such ratings will continue for any given period of time or that it will not be lowered or withdrawn entirely by the rating agencies, if in its judgment, circumstances so warrant. A downward change in or withdrawal of such ratings may have an adverse effect on 35 the market price of the Series 2014 Bonds. An explanation of the significance of the ratings can be received from the rating agencies. ADVISORS AND CONSULTANTS The County has retained certain advisors and consultants in connection with the issuance of the Bonds. These advisors and consultants are compensated from a portion of the proceeds of the Series 2014 Bonds, included in "Costs of Issuance" under the heading "SOURCES AND USES OF FUNDS" herein; their compensation is, in some instances, contingent upon the issuance of the Series 2014 Bonds and the receipt of the proceeds thereof. Financial Advisor. First Southwest Company, Orlando, Florida, serves as financial advisor (the "Financial Advisor") to the County and, in that capacity, has provided advice in connection with the planning, structuring and issuance of the Series 2014 Bonds. The Financial Advisor will not engage in any underwriting activities with regard to the issuance and sale of the Series 2014 Bonds. The Financial Advisor is not obligated to undertake and has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. The Financial Advisor's fee is contingent upon the issuance of the Series 2014 Bonds and is expected to be paid from a portion of the proceeds of the Series 2014 Bonds. The Financial Advisor may also provide the County with certain investment services, including providing investments for the funds and accounts created under the Resolution. Bond Counsel and Disclosure Counsel. Nabors, Giblin & Nickerson, P.A., Tampa, Florida, represents the County as Bond Counsel and Disclosure Counsel, and is the County Attorney. UNDERWRITING The Underwriters shown on the cover page hereof have agreed, subject to the proceedings authorizing the sale of the Series 2014 Bonds, to purchase the Series 2014 Bonds from the County. The aggregate purchase price for the Series 2014 Bonds payable to the County is $__________ ($__________ principal amount plus/less original issue premium/discount of $_________ and less Underwriters discount of $__________. The Underwriters have furnished the information on the cover page of this Official Statement pertaining to the public offering price of the Series 2014 Bonds. The public offering price of the Series 2014 Bonds may be changed from time to time by the Underwriters, and the Underwriters may allow a concession from the public offering price to certain dealers. None of the Series 2014 Bonds will be delivered by the County to the Underwriters unless all of the Series 2014 Bonds are so delivered. 36  DISCLOSURE MATTERS Certificate as to Official Statement The County has duly authorized, executed and delivered this Official Statement. At the time of delivery of the Series 2014 Bonds to the Underwriters, the County will provide to the Underwriters a certificate (which may be included in a consolidated closing certificate of the County), signed by those County officials who signed this Official Statement, relating to the accuracy and completeness of this Official Statement. Continuing Disclosure The County has covenanted for the benefit of Bondholders to provide certain financial information and operating data relating to the Pledged Funds and the Series 2014 Bonds in each year, and to provide notices of the occurrence of certain enumerated material events. Annual financial information and operating data, the audited financial statements and the notices of material events, when and if they occur, shall be filed by the County with the Municipal Securities Rulemaking Board's electronic municipal access system ("EMMA"). The specific nature of the financial information, operating data, and of the type of events triggering a disclosure obligation, and other details of the undertaking are described in "Appendix F -- Form of Continuing Disclosure Certificate" attached hereto. The Continuing Disclosure Certificate shall be executed by the County prior to the issuance of the Series 2014 Bonds. These covenants have been made in order to assist the Underwriters in complying with the continuing disclosure requirements of Rule 15c2-12(b)5 (the "Rule") promulgated by the Securities and Exchange Commission. The County was several days late in filing its comprehensive annual financial statements for fiscal years 2010 and 2013, has inadvertently failed to include in its required annual disclosure an update of its water and sewer rates, and inadvertently failed to include a debt service coverage calculation for its sales tax-secured bonds in fiscal year 2013. In addition, certain annual reports and audited financial statements were filed late in the five years preceding 2009. The County has taken steps to ensure that these discrepancies do not occur again, including the hiring of a third-party dissemination agent. 37  OKALOOSA COUNTY, FLORIDA By:______________________________ Charles K. Windes, Jr., Chairman Board of County Commissioners By:______________________________ John Hofstad, Interim County Administrator By:______________________________ Gary J. Stanford, Finance Director 39  APPENDIX A GENERAL PURPOSE FINANCIAL STATEMENTS FOR YEAR ENDED SEPTEMBER 30, 2013 A-1  APPENDIX B GENERAL INFORMATION PERTAINING TO OKALOOSA COUNTY, FLORIDA Location and Size Okaloosa County was formed by an act of the Florida Legislature in 1915. The County is in the center of a 100 mile long strip of beaches in northwest Florida. The County seat is located at Crestview in the northern half of the County. Niceville, Fort Walton Beach, Valparaiso, Shalimar, Wright, Ocean City and Destin are other important population centers. The county is bordered on the west by Santa Rosa County, on the north by the State of Alabama, on the east by Walton County and on south by the Gulf of Mexico. Okaloosa County has a total land area of 1,936 square miles and approximately 24 miles of beaches facing directly on the Gulf of Mexico. The total population of the County was 170,498 in 2000 according to the U.S. Census Bureau and was 180,882 as of April 1, 2012 according to the Florida Statistical Abstract 2012 published by the University of Florida, Bureau of Economic and Business Research. The northern half of the County is largely agricultural and is centered on the County seat, Crestview. The eastern portion of the Black River Forest comprises nearly one-third of this northern portion of the County. The entire central and southern portions of the County, with the exception of the coastal area, is given over to the massive Eglin Air Force Base installation. The twin cities of Niceville and Valparaiso offer residential living, shopping and commercial accommodations to Air Force families and personnel. Fine fishing facilities are found along Choctawhatchee bay to the south of the base. The coastal area along the Gulf of Mexico has Fort Walton Beach and Destin as its hub. Visitors from northern states, tourists from all parts of the national and personnel recently retired from the Armed Services have made this area their permanent home. The population and commercial growth of the County is primarily in this coastal section. Recreation and Tourism In Okaloosa County, the resident and tourist has a full range of natural attractions and opportunities offered to him. Mile after mile of beautiful beaches and waterways attract boat enthusiasts, swimmers, skiers, surfers, skindivers and scuba divers. Concentrations of fighting game fish may be found offshore from Destin. Party and charter boats make runs out to favorite fishing reefs daily. Pier and bridge fishing on the Gulf of Mexico and inland bays and fresh water fishing in lakes and streams are excellent. The hunter may try for deer, turkey, quail, dove, duck and wild B-1 hog in the game management areas of the northern part of the County. Sailing, golfing and camping are other year-round activities. It is estimated that over 3,500,000 tourists visit the County each year.