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

amount which would enable the County to restore the funds on deposit in each such subaccount to an amount equal to the Reserve Account Requirement in one (1) year from the date of such shortfall if such shortfall is a result of a withdrawal from such subaccount(s). Such obligation to replenish the Reserve Account shall be payable from amounts on deposit in the Revenue Fund after the deposits required to be made to the Payment Account set forth above. To the extent there are insufficient moneys in the Revenue Fund to make the required monthly deposit into each subaccount of the Reserve Account, such deposits shall be made to each subaccount on a pro rata basis in relation to the amount of the deficiency existing in each subaccount. On or prior to each principal and interest payment date for the Bonds, moneys in each subaccount of the Reserve Account shall be applied by the County to the payment of the principal of, or redemption price, if applicable, and interest on related series of Bonds to the extent moneys in the Payment Account and the Revenue Fund are insufficient therefor. Whenever there shall be surplus moneys in any subaccount of the Reserve Account by reason of a decrease in the Reserve Account Requirement or due to a deposit of a Reserve Account Letter of Credit or Reserve Account Insurance Policy, such surplus moneys shall be deposited by the County, upon receipt of an approving opinion of Bond Counsel, on a pro rata basis into other subaccounts, if any, containing less than the Reserve Account Requirement applicable thereto, and otherwise, into the Payment Account. Upon the issuance of any series of Bonds under the terms, limitations and conditions as provided in the Resolution, the County shall fund the corresponding subaccount of the Reserve Account established for such series in an amount at least equal to the Reserve Account Requirement applicable to such series of Bonds; 16 provided, however, that in the case of Variable Rate Bonds, no such Reserve Requirement shall be required; and provided, further that said Reserve Account Requirement may at the County's election be zero. Such required amount shall be paid in full from the proceeds of such series of Bonds or other sources, on the date of delivery of such series of Bonds. Notwithstanding the foregoing provisions, in lieu of the required deposits into a subaccount of the Reserve Account, the County may, with the prior written consent of each Insurer and Credit Bank, as applicable, insuring or guaranteeing such series of Bonds, cause to be deposited into such subaccount a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit for the benefit of the Bondholders in an amount equal to the difference between the Reserve Account Requirement applicable thereto and the sums then on deposit in such subaccount, if any. Payments to Providers of Reserve Account Letters of Credit or Reserve Account Insurance Policies. Any remaining amounts in the Revenue Fund shall be used to pay any outstanding amounts owed to any Insurer or provider of a Reserve Account Insurance Policy or Reserve Account Letter of Credit. Subordinated Indebtedness. Any remaining amounts in the Revenue Fund shall next be used to pay any outstanding amounts due and payable with respect to Subordinated Indebtedness. Surplus Funds. The balance of any moneys remaining in the Revenue Fund after the payments and deposits required as set forth above may be transferred, at the discretion of the County, to any other appropriate fund or account of the County and be used for any lawful purpose. Whenever the amount on deposit in a subaccount of the Reserve Account (other than amounts available under a Reserve Account Insurance Policy or Reserve Account Letter of Credit), together with the other amounts in the Debt Service Fund, are sufficient to fully pay the corresponding series of outstanding Bonds in accordance with their terms (including principal or applicable redemption price and interest thereon), no further deposits to the Debt Service Fund for such series need be made and the funds on deposit in such subaccount of the Reserve Account may be transferred to the other accounts of the Debt Service Fund for the payment of the Bonds. The County, in its discretion, may use moneys in the Payment Account to purchase or redeem Bonds coming due on the next principal payment date, provided such purchase or redemption does not adversely affect the County's ability to pay the principal or interest coming due on such principal payment date on the Bonds not so purchased or redeemed. 17  At least three (3) business days prior to the date established for payment of any principal of or redemption price, if applicable, or interest on the Bonds, the County shall withdraw from the appropriate account of the Debt Service Fund sufficient moneys to pay such principal or redemption price, if applicable, or interest and deposit such moneys with the Paying Agent for the Bonds to be paid. In the event the County shall issue a series of Bonds secured by a Credit Facility, the County may establish such separate subaccounts in the Payment Account, to provide for payment of the principal of and interest on such series; provided one series of Bonds shall not have preference in payment from Pledged Funds over any other series of Bonds. The Issuer may also deposit moneys in such subaccounts at such other times and in such other amounts from those provided in the Resolution as shall be necessary to pay the principal of and interest on such Bonds as the same shall become due, all as provided by the supplemental resolution authorizing such Bonds. In the case of Bonds secured by a Credit Facility, amounts on deposit in any subaccounts established for such Bonds may be applied as provided in the applicable supplemental resolution to reimburse the Credit Bank for amounts drawn under such Credit Facility to pay the principal of or redemption price, if applicable, and interest on such Bonds; provided such Credit Facility shall have no priority over Bondholders or the Insurer or any provider of a Reserve Account Insurance Policy or Reserve Account Letter of Credit to amounts on deposit in the Debt Service Fund. Rebate Fund. The County has established a separate fund to be designated the "Rebate Fund" under the Resolution. The County will cause to be deposited into the Rebate Fund, each year, the cumulative amounts required to be deposited therein in order to make rebate payments to the United States of America pursuant to the provisions of the Internal Revenue Code of 1986, as amended, in accordance with the provisions of the Resolution. Amounts deposited into the Rebate Fund are not pledged to secure the Series 2014 Bonds. Issuance of Additional Bonds The County may issue one or more series of Additional Bonds for any one or more of the following purposes: financing the cost of an additional project, or the completion thereof or of the initial Project, or refunding any or all outstanding Bonds or of any subordinated indebtedness of the County. No such Additional Bonds shall be issued (i) if there is an Event of Default under the Resolution unless such issuance will cure such Event of Default and (ii) unless the following conditions are complied with: (A) Except as otherwise provided in (D) below, there shall have been obtained and filed with the County a statement of an independent certified public 18 accountant of reasonable experience and responsibility: (1) stating that the books and records of the County relating to the Sales Tax Revenues have been examined by him; (2) setting forth the amount of the Sales Tax Revenues which have been received by the County during any twelve (12) consecutive months designated by the County within the twenty-four (24) months immediately preceding the date of delivery of such Additional Bonds with respect to which such statement is made; and (3) stating that the amount of the Sales Tax Revenues received during the aforementioned 12-month period equals at least 1.35 times (a) the Maximum Annual Debt Service of all Bonds then outstanding and such Additional Bonds with respect to which such statement is made and (b) any amounts then owed by the County under any Reserve Account Letter of Credit or Reserve Account Insurance Policy as a result of a drawdown on such Reserve Account Letter of Credit or Reserve Account Insurance Policy, plus 1.0 times the maximum annual debt service on any subordinated indebtedness outstanding. In the event that Florida law is amended to provide for additional sales tax revenues to be distributed to the County, and the County, by supplemental resolution, extends the pledge of the Sales Tax Revenues created by the Resolution to include such additional sales tax revenues, then for the purpose of determining whether there are sufficient Sales Tax Revenues to meet the afore-referenced tests, the independent certified public accountant shall assume that such additional sales tax revenues were in effect during the applicable twelve (12) consecutive month period. (B) For the purpose of determining the Maximum Annual Debt Service, the interest rate on additional parity Variable Rate Bonds then proposed to be issued and on outstanding Variable Rate Bonds shall be deemed to be 120% of the average of the SIFMA Index over a two year period of time ending with the date immediately prior to the sale of such Additional Bonds. For the purpose of determining the Maximum Annual Debt Service under paragraph (A) above, the interest rate on Outstanding Variable Rate Bonds shall be deemed to be (1) if such Variable Rate Bonds have been Outstanding for at least 24 months prior to the date of sale of such Additional Bonds, the highest rate of interest borne by such Variable Rate Bonds during the 24 months ending on the date immediately prior to the sale of such Additional Bonds, or (2) if such Variable Rate Bonds have not been Outstanding for at least 24 months prior to the date of sale of such Additional Bonds, 120% of the average of the SIFMA Index over a two year period of time ending on the date immediately prior to the sale of such Additional Bonds. (C) Additional Bonds shall be deemed to have been issued pursuant to the Resolution the same as the outstanding Bonds, and all of the other covenants and other provisions of the Resolution (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and security of the Holders of all Bonds issued pursuant to the Resolution. Except as provided otherwise in the Resolution, all Bonds, regardless of the time or times of their issuance, shall 19 rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom without preference of any Bonds over any other. (D) In the event any Additional Bonds are issued for the purpose of refunding any Bonds then outstanding, the conditions of (A) above shall not apply, provided that the issuance of such Additional Bonds shall result in a reduction of the aggregate debt service on the Bonds. The conditions of (A) above shall apply to Additional Bonds issued to refund subordinated indebtedness and to Additional Bonds issued for refunding purposes which cannot meet the conditions of the first sentence in this paragraph. (E) In the event that the total amount of Series 2014 Bonds authorized to be issued are not issued simultaneously, such Series 2014 Bonds which are subsequently issued shall be subject to the conditions of (A) above. (F) No Additional Bonds shall be issued if any Event of Default shall have