$4,560,000 CITY OF POTTSVILLE Schuylkill County, Pennsylvania

Transcription

THIS PRELIMINARY OFFICIAL STATEMENT AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION AND AMENDMENT. Under no circumstances shall this Preliminary
Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
PRELIMINARY OFFICIAL STATEMENT DATED JUNE 29, 2016
New Issue
BOOK-ENTRY ONLY
Rating: S&P Underlying “A+” (Stable Outlook)
Insured: See “Ratings” herein
________Insured
In the opinion of Cerullo, Datte & Burke, P.C,, Pottsville, Pennsylvania, Bond Counsel, assuming continuing compliance by the City with certain
covenants to comply with provisions of the Internal Revenue Code of 1986, as amended (the “Code”) and any applicable regulations thereunder,
interest on the Bonds is not includable in gross income under Section 103(a) of the Code and interest on the Bonds is not an item of tax preference
for purposes of the federal individual and corporate alternative minimum taxes, except as set forth under the heading “Tax Exemption” in this
Official Statement. Other provisions of the Code may affect purchasers and holders of the Bonds. See “Federal Tax Laws” herein for a brief
description of these provisions.
Under the laws of the Commonwealth of Pennsylvania, the Bonds and interest on the Bonds shall be free from taxation for State and local purposes
within the Commonwealth of Pennsylvania, but this exemption does not extend to gift, estate, succession or inheritance taxes or any other taxes not
levied or assessed directly on the Bonds or the interest thereon. Under the laws of the Commonwealth of Pennsylvania, profits, gains or income
derived from the sale, exchange or other disposition of the Bonds shall be subject to State and local taxation within the Commonwealth of
Pennsylvania.
The City has designated and determined under and for purposes of Section 265(b)(3) of the Code to qualify each of the Bonds as a “qualified taxexempt obligation” as such phrase is defined in the Code.
$4,560,000
CITY OF POTTSVILLE
Schuylkill County, Pennsylvania
General Obligation Bonds, Series of 2016
Dated: Date of Delivery
Principal Due: October 1, of the years shown herein
Denominations: Integral multiples of $5,000
Interest Payable: April 1 and October 1
First Interest Payment: October 1, 2016
Form: Book-Entry Only
Legal Investment for Fiduciaries in Pennsylvania: The Bonds (hereinafter defined) are a legal investment for fiduciaries in the Commonwealth of
Pennsylvania under the Probate, Estate and Fiduciaries Code, Act of June 30, 1972, No. 164, P.L. 508 as amended and supplemented.
Payments of Interest and Principal: The General Obligation Bonds, Series of 2016, in the aggregate amount of $4,560,000 (the “Bonds”), of the City of
Pottsville, Schuylkill County, Pennsylvania (the “City”), will be issued as fully registered bonds and, when issued, will be registered in the name of Cede &
Co., as nominee for the Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases of the
Bonds will be made only in book-entry only form, and purchasers will not receive certificates representing their interests in the Bonds. So long as DTC, or
its nominee, Cede & Co., is the registered owner of the Bonds, payments of the principal and interest on the Bonds will be made by Manufacturers and
Traders Trust Company, acting as paying agent, directly to Cede & Co. Disbursement of such payments to the DTC Participants is the responsibility of
DTC, and disbursements of such payments to Beneficial Owners of the Bonds is the responsibility of the DTC Participants and the Indirect Participants. See
“BOOK-ENTRY ONLY SYSTEM” herein.
Optional Redemption: The Bonds maturing on or after __________ are subject to redemption prior to maturity at the option of the City, at a redemption
price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, in whole or in part (and if in part, in such order of maturity
as the City shall select and within a maturity by lot) at any time on and after ________________.
Purpose: Proceeds of the Bonds will be used to provide funds to: (1) finance certain capital projects of the City; and (2) pay the costs of issuing and
insuring the Bonds.
Security: The Bonds are general obligations of the City secured by its full faith, credit and taxing power. The City has covenanted to pay, as and when due,
the principal of and interest on the Bonds, to include in its annual budget such amounts when due, and to appropriate such amounts for such payment, and for
such budgeting appropriation and payment the City has pledged irrevocably its full faith, credit and taxing power, which taxing power presently includes the
power to levy ad valorem taxes on all taxable property within the City, unlimited as to rate or amount for such purpose.
Bond Insurance: The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be
issued concurrently with the delivery of the Bonds by _________________________
(Insurance Logo)
The Bonds are offered for delivery when, as and if issued by the City and received by the Underwriter, subject to the approving legal opinion of Cerullo, Datte &
Burke, P.C. Pottsville, Pennsylvania, Bond Counsel, to be furnished upon delivery of the Bonds. Certain legal matters will be passed upon by Thomas J. Pellish,
Esquire, Pottsville, Pennsylvania, Solicitor for the City. It is expected that the Bonds in definitive form will be available for delivery in New York, New York on
or about __________________.
The date of this Official Statement is _________________
.
$4,560,000
CITY OF POTTSVILLE
Principal Due: October 1, of the years shown below
Denomination: Integral multiples of $5,000
Maturity Schedule
Year
Principal
Amount
$
Interest
Rate
%
Price
%
Year
Principal
Amount
$
Interest
Rate
%
Price
%
No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any
information or to make any representation, other than that given or made in this Official Statement, and if given or made,
any such other information or representation may not be relied upon as having been authorized by the City or the
Underwriters. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer,
solicitation or sale. This Official Statement has been approved by the City and, while the information set forth in this
Official Statement has been furnished by the City and other sources which are believed to be reliable, such information is
not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriters or, as to
information obtained from other sources, by the City. The information and expressions of opinion set forth in this Official
Statement are subject to change without notice and neither the delivery of this Official Statement nor any sale made under
this Official Statement shall, under any circumstances, create any implication that the affairs of the City have remained
unchanged since the date of this Official Statement.
[INSURANCE LANGUAGE]
THE UNDERWRITER HAS PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT.
THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART
OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND
CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTEE THE ACCURACY OR
COMPLETENESS OF SUCH INFORMATION.
TABLE OF CONTENTS
Board of School Directors &
Administrative Staff .............................................................................................................................
Summary Statement ..................................................................................................................................
Introduction ...............................................................................................................................................
Purpose of the Issue and Plan of Finance ................................................................................................
Sources and Uses of Funds ......................................................................................................................
Description of the Bonds ..........................................................................................................................
Book-Entry Only System ........................................................................................................................ .
Redemption Provisions ........................................................................................................................... .
Security for the Bonds ............................................................................................................................ .
Bond Insurance .........................................................................................................................................
Tax Exemption ..........................................................................................................................................
Miscellaneous............................................................................................................................................
Appendix A - Summaries of Financial Information of the City
Appendix B - Description of the City
Appendix C - Financial Statements YE December 31, 2014
Appendix D - Proposed Form of Bond Opinion
Appendix E - Proposed Form of Continuing Disclosure Agreement
Appendix F – Specimen Municipal Bond Insurance Policy
Appendix G - Bond Amortization Schedule
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CITY OF POTTSVILLE
City Council
Edmund Jones .......................................................................................................................................................
Mark Atkinson ......................................................................................................................................................
Joseph Devine .......................................................................................................................................................
Dorothy Botto .......................................................................................................................................................
James T. Muldowney ............................................................................................................................................
City Administrator
Thomas A. Palamar
City Treasurer
Ellen Micka
City Controller
William Messaros
Bond Counsel
Cerullo, Datte & Burke, P.C.
Pottsville, Pennsylvania
City Solicitor
Thomas J. Pellish, Esquire
Pottsville, Pennsylvania
Underwriter
RBC Capital Markets, LLC
Lancaster, Pennsylvania
City Offices
401 North Centre Street
Pottsville, Pennsylvania 17901
Trustee
Manufacturers and Traders Trust Company
Harrisburg, Pennsylvania
Buffalo, New York
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Member
Member
Member
Member
Member/Mayor
SUMMARY PAGE
This Summary Statement is subject in all respects to more complete information in this Official Statement. No person
is authorized to detach this Summary Statement from this Official Statement or otherwise use it without the entire Official
Statement. A full review of the entire Official Statement should be made by potential bond purchasers.
Issuer ...............................................
City of Pottsville, Schuylkill County, Pennsylvania.
Bonds ...............................................
$4,560,000.00 principal amount of General Obligation Bonds, Series of 2016
(the "Bonds"), dated the Date of Delivery, maturing or subject to mandatory
redemption in various principal amounts (as herein described) on October 1 of
each year from 2017 through 2036, inclusive. Interest is payable on April 1 and
October 1, beginning October 1, 2016.
See “DESCRIPTION OF THE
BONDS” herein.
Redemption Provisions ..................
The Bonds stated to mature on or after _____________, are subject to optional
redemption prior to maturity, at the option of the Issuer, as a whole, or, from time
to time, in part, (and if in part, in any order of maturities selected by the Issuer and
within a particular maturity as drawn by lot), on ______________, or on any date
thereafter. See "Optional Redemption" herein. The Bonds are not subject to
mandatory redemption prior to maturity. See “REDEMPTION PROVISIONS”
herein.
Form .............................................
Book-Entry Only.
Application of Proceeds .................
Proceeds of the Bonds will be used to provide funds to: (1) finance certain capital
projects of the City; and (2) pay the costs of issuing and insuring the Bonds.
Security ............................................
The Bonds are general obligations of the Issuer, for the payment of which the
Issuer has pledged its full faith, credit and taxing power.
Insurance Rating. ........................ ....
See "Rating" herein.
Bond Insurance ......... ................. ....
The scheduled payment of principal of and interest on the Bonds when due will
be guaranteed under a municipal bond insurance policy issued concurrently with
the delivery of the Bonds by ___________. See "BOND INSURANCE" herein.
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OFFICIAL STATEMENT
CITY OF POTTSVILLE
$4,560,000 General Obligation Bonds, Series of 2016
INTRODUCTION
This Official Statement is furnished by the City of Pottsville, Schuylkill County, Pennsylvania (the "City"), in
connection with the offering of its General Obligation Bonds, Series of 2016, in the aggregate principal amount of $4,560,000
(the "Bonds").
The Bonds have been issued in accordance with the Local Government Unit Debt Act of the General Assembly of the
Commonwealth of Pennsylvania, 53 Pa. C.S. Chs. 80-82 (the “Debt Act”), and pursuant to an Ordinance of the Council of the
City finally enacted on ______________________ (the “Ordinance”).
The Bonds will be issued as fully registered bonds and when issued, will be registered in the name of and held by Cede
& Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository
for the Bonds. Purchases of the Bonds will be made only in book-entry only form, and purchasers will not receive certificates
representing their interests in the Bonds. So long as DTC, or its nominee, Cede & Co., is the registered owner of the Bonds,
payments of the principal of and interest on the Bonds will be made by Manufacturers and Traders Trust Company (the “Paying
Agent”), acting as paying agent, directly to Cede & Co. Disbursement of such payments to the DTC Participants is the
responsibility of DTC, and disbursement of such payments to Beneficial Owners of the Bonds is the responsibility of the DTC
Participants and the Indirect Participants. See “DESCRIPTION OF THE BONDS” and “BOOK-ENTRY ONLY SYSTEM”
herein.
The information which follows contains summaries of the Ordinance, relevant provisions of State and Federal law, the
City's budget and the City's financial statements. Such summaries do not purport to be complete and reference is made to the
Ordinance, the City's budget and the City's financial statements, copies of which are on file and available for examination at the
offices of the City. Reference is also made to the Bonds and to the actual cited laws and regulations.
PURPOSE OF THE ISSUE
Proceeds of the Bonds will be used to provide funds to: (1) finance certain capital projects of the City; and (2) pay the
costs of issuing and insuring the Bonds.
SOURCES AND USES
SOURCES OF FUNDS
2016 Bond Issue
TOTAL SOURCES
$0
$0
USES OF FUNDS
Capital Project Fund Deposit
Costs of Issuance (1)
TOTAL USES
0
0
$0
(1) Includes legal, printing, municipal bond insurance premium, rating fee, Underwriter’s discount, paying agent and
miscellaneous costs.
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DESCRIPTION OF THE BONDS
The Bonds are issued as fully registered bonds, in book-entry form, in the denominations of $5,000 principal amount
and any integral multiples thereof. When issued, the Bonds will be registered in the name of Cede & Co., as nominee for The
Depository Trust Company (“DTC”), New York, New York. Purchasers of the Bonds (the “Beneficial Owners”) will not receive
any physical delivery of bond certificates and beneficial ownership of the bonds will be evidenced only by book entries. See
“Book-Entry Only System” herein.
General Description
The Bonds are being issued in the aggregate principal amount of 4,560,000, are dated as of the date of delivery, and
bear interest initially from that date at the rates shown on the inside front cover page hereof, payable April 1 and October 1
of each year, commencing October 1, 2016 until maturity thereof or earlier call for redemption. The Bonds mature on
October 1 of the years shown on the inside front cover page hereof.
The Bonds are issued as fully registered bonds, without coupons, in the denominations of $5,000 principal amount
or any integral multiple thereof. Principal and interest are payable as set forth below.
When issued, the Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust
Company (“DTC”), New York, New York. Purchasers of the Bonds (the “Beneficial Owners”) will not receive any physical
delivery of bond certificates and beneficial ownership of the Bonds will be evidenced only by book entries.
Payment of Principal and Interest
So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, payments of principal of and interest
on the Bonds, when due, are to be made to DTC and all such payments shall be valid and effective to satisfy fully and to
discharge the obligations of the City with respect to, and to the extent of, principal and interest so paid. If the use of the BookEntry Only System for the Bonds is discontinued for any reason, bond certificates will be issued to the Beneficial Owners of the
Bonds and payment of principal and interest on the Bonds shall be made as described in the following paragraphs.
Principal of certificated Bonds will be paid to the registered owners thereof or assigns, when due, upon surrender of
such Bonds to Manufacturers and Traders Trust Company (the “Paying Agent”), acting as the paying agent and sinking fund
depositary for the Bonds, at its designated corporate trust office (or to any successor paying agent at its designated office(s)).
Interest on certificated Bonds is payable to the registered owner of such Bond from the interest payment date next
preceding the date of registration and authentication of such Bond, unless: (a) such Bond is registered and authenticated as of an
interest payment date, in which event such Bond shall bear interest from said interest payment date, or (b) such Bond is
registered and authenticated after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in
which event such Bond shall bear interest from such interest payment date, or (c) such Bond is registered and authenticated on or
prior to the Record Date next preceding October 1, 2016, in which event such Bond shall bear interest from the date of delivery,
or (d) as shown by the records of the Paying Agent, interest on such Bond shall be in default, in which event such Bond shall
bear interest from the date on which interest was last paid on such Bond. Interest shall be paid semiannually on April 1 and
October 1 of each year, beginning October 1, 2016, until the principal sum is paid. Interest on a certificated Bond is payable by
check drawn on the Paying Agent, which shall be mailed to the registered owner whose name and address shall appear, at the
close of business on the fifteenth (15th) day (whether or not a day on which the Paying Agent is open for business) next
preceding each interest payment date, respectively (the "Record Date"), on the registration books maintained by the Paying
Agent, irrespective of any transfer or exchange of the Bond subsequent to such Record Date and prior to such interest payment
date, unless the City shall be in default in payment of interest due on such interest payment date.
If the date for the payment of the principal of or interest on any Bonds shall be a Saturday, Sunday, legal holiday or a
day on which banking institutions in the Commonwealth are authorized or required by law or executive order to close, then the
date for payment of such principal or interest shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a
day on which such banking institutions are authorized or required to close, and payment on such date shall have the same force
and effect as if made on the nominal date established for such payment.
Any interest on certificated Bonds which is payable, but is not punctually paid or provided for on any Interest
Payment Date, shall cease to be payable to the registered owner on the relevant Record Date, and such defaulted interest
shall be paid to the registered owner in whose name the certificated Bond is registered at the close of business on a special
record date (the “Special Record Date”) for the payment of such defaulted interest. The Paying Agent shall cause notice of
the proposed payment of such defaulted to be mailed, first class postage prepaid, to each such registered owner at his or her
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address as it appears in the Bond Register, not less than ten (10) days prior to such Special Record Date. Such notice shall
be mailed to the persons in whose names such Bonds are registered at the close of business on the fifth (5th) day preceding
the date of mailing.
The full text of the Ordinance, including the text of the Bonds, is on file, and available for inspection and copying,
at the corporate trust office of the Paying Agent at 213 Market Street, Harrisburg, Pennsylvania 17101.
Transfer, Exchange and Registration
Subject to the provisions described below under “Book-Entry Only System”, certificated Bonds may be transferred or
exchanged by the registered owners thereof upon surrender of such Bonds to the Paying Agent, at its designated corporate trust
office, accompanied by a written instrument or instruments in form, with instructions satisfactory to the Paying Agent, duly
executed by the registered owner of such Bond, or his attorney-in-fact or legal representative. The Paying Agent shall enter any
transfer of ownership of Bonds in the registration books and shall authenticate and deliver at the earliest practicable time in the
name of the transferee or transferees a new fully registered bond or bonds of authorized denominations of the same series,
maturity date and interest rate for the aggregate principal amount which the registered owner is entitled to receive. The City and
the Paying Agent may deem and treat the registered owner of any Bond as the absolute owner thereof (whether or not a Bond
shall be overdue) for the purpose of receiving payment of or on account of principal and interest and for all other purposes, and
the City and the Paying Agent shall not be affected by any notice to the contrary.
The City and the Paying Agent shall not be required to: (i) register the transfer of or exchange any Bonds during the
period beginning at the close of business on the fifteenth (15th) day next preceding any date of selection of such Bonds to be
redeemed and ending at the close of business on the day of mailing of the applicable notice of redemption; or (ii) register the
transfer of or exchange any portion of any Bonds selected for redemption until after the redemption date. Certificated Bonds
may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same series, maturity
date and interest rate.
BOOK-ENTRY ONLY SYSTEM
The information in this section has been obtained from materials provided by DTC for such purpose. The Township
(herein referred to as the “Issuer”) and the Underwriter do not guaranty the accuracy or completeness of such
information and such information is not to be construed as a representation of the Township or the Underwriter.
The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The
Bonds will be issued as fully-registered bonds registered 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 and series of the Bonds, each in the aggregate principal amount of such maturity, 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 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, trust companies, and clearing corporations that clear through
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or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a
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 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit
for the Bonds on DTC’s records. The Ownership interest of each actual purchaser of each Bond (“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
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the
Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by
entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system
for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds 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 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect
any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records
reflect only the identity of the Direct Participants to whose accounts such Bonds 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. Beneficial Owners of
Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the
Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial
Owners of Bonds may wish to ascertain that the nominee holding the Bonds 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 registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a series and maturity are being
redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such series and
maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless
authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an
Omnibus Proxy to Issuer 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 Bonds are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Principal, interest and redemption payments on the Bonds will be made 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 detail information from Issuer or Agent, 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, Agent, or Issuer, subject to any
statutory or regulatory requirements as may be in effect from time to time. Payment of principal, interest and redemption
payments on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC)
is the responsibility of Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to Issuer or Paying Agent. Under such circumstances, in the event that a successor depository is not
obtained, Bond certificates are required to be printed and delivered.
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Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor
securities depository). In that event, Bond certificates will be printed and delivered to DTC.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that
Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
NEITHER THE ISSUER NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR
OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OR ANY
OTHER PERSON WITH RESPECT TO: (1) THE BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED
BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN
RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4) THE DELIVERY
TO ANY BENEFICIAL OWNER BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY
NOTICE WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN
THEREUNDER; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF
ANY PARTIAL REDEMPTION OF THE BONDS; OR (6) ANY OTHER ACTION TAKEN BY DTC AS
BONDHOLDER.
The Issuer and the Paying Agent cannot give any assurances that DTC or the Participants will distribute payments
of the principal or redemption price of and interest on the Bonds paid to DTC or its nominee, as the registered owner of the
Bonds, or any redemption or other notices, to the Beneficial Owners or that they will do so on a timely basis, or that DTC
will serve and act in the manner described in this Preliminary Official Statement.
REDEMPTION PROVISIONS
Optional Redemption
The Bonds stated to mature on or after _________________ are subject to redemption prior to maturity, at the
option of the City, in whole or, from time to time, in part (and if in part, of any maturity designated by the City, and within a
maturity by lot) on __________________ or on any date thereafter, in either case, upon payment of a redemption price of
100% of the principal amount of the Bonds, plus accrued interest to the date fixed for redemption.
Notice of Redemption of Certificated Bonds
So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, however, the City and the Paying
Agent shall send redemption notices only to Cede & Co. See “BOOK-ENTRY ONLY SYSTEM” herein for further
information regarding conveyance of notices and Beneficial Owners.
Notice of any redemption of certificated Bonds shall be given by depositing a copy of the redemption notice in first
class mail not less than thirty (30) days prior to the date fixed for redemption, addressed to each of the registered owners of
any certificated Bonds to be redeemed, at the addresses shown on the registration books kept by the Paying Agent as of the
date such Bonds are selected for redemption; provided, however, that failure to give such notice by mailing, or any defect
therein or in the mailing thereof, shall not affect the validity of any proceeding for redemption of other Bonds so called for
redemption as to which proper notice has been given.
On the date designated for redemption, notice having been provided as aforesaid, and money for payment of the
principal and interest being held by the Paying Agent, interest on the Bonds or portions thereof so called for redemption shall
cease to accrue and such Bonds or portions thereof shall cease to be entitled to any benefit or security under the Resolution,
and registered owners of such Bonds or portions thereof so called for redemption shall have no rights with respect thereto,
except to receive payment of the principal to be redeemed and accrued interest thereon to the date fixed for redemption.
If at a time of mailing of a notice of redemption the City has not deposited with the Paying Agent (or, in the case of
a refunding, with another bank or depositary acting as refunding escrow agent) money sufficient to redeem all Bonds called
for redemption, the notice of redemption may state that is it is conditional, i.e., that it is subject to the deposit of sufficient
5
redemption money with the Paying Agent not later than the opening of business on the redemption date, and such notice shall
be of no effect unless such money is so deposited.
Manner of Redemption
So long as Cede & Co., nominee of DTC, is the registered owner of the Bonds, however, payment of the redemption
price shall be made by Cede & Co. in accordance with the existing arrangements by and among the City, the Paying Agent
and DTC and, if less than all of the Bonds in a particular maturity are to be redeemed, the amount of the interest of each
DTC Participant, Indirect Participant and Beneficial Owner on such Bonds to be redeemed shall be determined by the
governing arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to
time. See “BOOK-ENTRY ONLY SYSTEM” herein for further information regarding redemption of Bonds registered in the
name of Cede & Co.
If a Bond is of a denomination larger than $5,000, a portion of such Bond may be redeemed. For the purposes of
redemption, a Bond shall be treated as representing the number of Bonds that is equal to the principal amount thereof divided
by $5,000, each $5,000 portion of such Bond being subject to redemption. In the case of partial redemption of a certificated
Bond, payment of the redemption price shall be made only upon surrender of such Bond in exchange for certificated Bonds
of authorized denominations in an aggregate principal amount equal to the unredeemed portion of the principal amount
thereof.
If the redemption date for any Bonds shall be a Saturday, Sunday, legal holiday or a day on which banking
institutions in the Commonwealth are authorized or required by law or executive order to close, then the date for payment of
such principal, premium, if any, and interest upon such redemption shall be the next succeeding day which is not a Saturday,
Sunday, legal holiday or a day on which such banking institutions are authorized or required to close, and payment on such
date shall have the same force and effect as if made on the nominal date of redemption.
SECURITY FOR THE BONDS
General
The Bonds are general obligations of the City and are payable from the general taxes and revenues of the City. The
taxing powers of the City are described more fully herein. The City has covenanted in the Ordinance that it (i) shall include the
amount of the debt service to be paid on the Bonds, for each fiscal year of the City in which such sums are payable, in its budget
for that fiscal year, (ii) shall appropriate such amounts from its general revenues for the payment of such debt service, and (iii)
shall duly and punctually pay, or cause to be paid from its Sinking Fund (hereinafter defined) or any other of its revenues or
funds, the principal of each of the Bonds and the interest thereon on the dates, at the place and in the manner stated in the Bonds,
and for such budgeting, appropriation and payment, the City has irrevocably pledged its full faith, credit and taxing power.
Sinking Fund
In the Ordinance, the City has set forth that a "Sinking Fund-General Obligation Bonds, Series of 2016" (the "Sinking
Fund"), shall be created and maintained with the Paying Agent (the "Sinking Fund Depositary") as sinking fund depositary and
segregated from all other funds of the City. The City shall deposit in the Sinking Fund a sufficient sum in collected funds no
later than the date when principal or interest is to become due on the Bonds so that on each payment date the Sinking Fund will
contain an amount which, together with any other available funds therein, is sufficient to pay, in full, interest and principal then
due on the Bonds.
The Sinking Fund shall be held by the Paying Agent, as sinking fund depositary, and invested by the Paying Agent in
such securities or shall be deposited in such funds or accounts as are authorized by the Act, upon direction of the City. Such
deposits and securities shall be in the name of the City, but subject to withdrawal or collection only by the Paying Agent, as
sinking fund depositary, and such deposits and securities, together with the interest thereon, shall be a part of the Sinking Fund.
The Paying Agent, as sinking fund depositary, is authorized without further order from the City to pay from the Sinking
Fund the principal of and interest on the Bonds when due and payable.
6
Actions in the Event of Default
Subject to the exclusive representation of bondholders by a trustee appointed under the Act as described in the
following paragraph, if the City fails or neglects to pay principal or interest on any of the Bonds as it becomes due and payable,
and such failure continues for thirty days, the holder of such bond may bring suit in a court of appropriate jurisdiction and venue
and any judgment recovered shall have an appropriate priority upon the money next coming into the treasury of the City, all as
provided in the Act. The Act also provides other remedies to bondholders to enforce the City's covenants in respect of payment
of the Bonds.
In the event the City defaults in the payment of the principal of or the interest on any of the Bonds after same shall
become due, whether at the stated maturity or upon call for prior redemption, and such default shall continue for thirty days, or if
the City fails to comply with any provision of the Bonds or the Ordinance, the Act provides that the holders of 25% in aggregate
principal amount of the Bonds then outstanding may, upon appropriate action, appoint a trustee to represent the Bondholders.
The trustee may, and upon request of the holders of 25% in principal amount of the Bonds then outstanding, and upon being
provided with indemnity satisfactory to it, shall take such action on behalf of the Bondholders as is more specifically set forth in
the Act. Such representation by the trustee shall be exclusive.
BOND INSURANCE
(INSURANCE APPLIED FOR)
7
TAX EXEMPTION
Federal Tax Laws
Numerous provisions of the Internal Revenue Code of 1986, as amended (the “Code”), affect the issuers of state and
local government bonds, such as the City, and impair or restrict the ability of the City to finance projects on a tax-exempt basis.
Failure on the part of the City to comply with any one or more of such provisions of the Code, or any regulations under the
Code, could render interest on the Bonds includable in the gross income of the owners thereof for purposes of federal income tax
retroactively to the date of issuance of the Bonds. Among these provisions are more restrictive rules relating to: (a) investment of
funds treated as proceeds of the Bonds; (b) the current refunding of tax-exempt bonds; and (c) the use of proceeds of the Bonds
to benefit private activities. In addition, under the Code, the City is required to file an information return with respect to the
Bonds and, if applicable, to “rebate” to the federal government certain arbitrage profits on an ongoing basis throughout the term
of the issue constituting the Bonds. Bond Counsel has not undertaken to determine (or to inform any person) whether any action
taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may affect the tax status of
interest on the Bonds.
Other provisions of the Code affect the purchasers and holders of certain state and local government bonds such as the
Bonds. Prospective purchasers of the Bonds should be aware that: (i) Section 265 of the Code denies a deduction for interest on
(a) indebtedness incurred or continued to purchase or carry certain state or local government bonds, such as the Bonds, or, (b) in
the case of a financial institution, that portion of a financial institution’s interest expense allocated to interest on certain state or
local government bonds, such as the Bonds, unless the issuer of the state or local government bonds designates the bonds as
“qualified tax-exempt obligations” for the purpose and effect contemplated by Section 265(b)(3)(B) of the Code (the City has
designated the Bonds as “qualified tax exempt obligations” under Section 265(b)(3)(B) of the Code, as such phrase is defined in
the Code); (ii) certain corporations must take into account interest on certain state or local government bonds, such as the Bonds,
in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such
corporations; (iii) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section
832(b)(5)(B)(1) of the Code reduces the deduction for loss reserves by 15% of the sum of certain items, including interest and
amounts treated as such on certain state or local government bonds, such as the Bonds; (iv) interest on certain state or local
government bonds, such as the Bonds, earned by certain foreign corporations doing business in the United States could be
subject to a branch profits tax imposed by Section 884 of the Code, (v) if a Subchapter S corporation has passive investment
income (which passive investment income will include interest on state and local government bonds such as the Bonds)
exceeding 25% of such Subchapter S corporation’s gross receipts and if such Subchapter S corporation has Subchapter “C”
earnings and profits, then interest income derived from state and local government bonds, such as the Bonds, may be subject to
federal income tax under Section 1375 of the Code; and (vi) Section 86 of the Code requires recipients of certain Social Security
and certain Railroad Retirement benefits to take into account, in determining gross income, receipts or accruals of interest on
certain state or local government bonds such as the Bonds.
Tax Exemption
In the opinion of Bond Counsel, assuming continuing compliance by the City with certain certifications and
agreements relating to the use of Bond proceeds and covenants to comply with provisions of the Code and any applicable
regulations thereunder, now or hereafter enacted, interest on the Bonds is not includable in the gross income of the holders of
the Bonds under Section 103(a) of the Code and interest on the Bonds is not an item of tax preference for purposes of the
federal individual and corporate alternative minimum taxes. Other provisions of the Code will affect certain purchasers and
holders of the Bonds. See “Federal Tax Laws” above.
The City has designated and determined under and for purposes of Section 265 (b)(3)(B) of the Code to qualify
each of the Bonds as a “qualified tax-exempt obligations” for purposes and effect contemplated by Section 265 of the Code
(relating to expenses and interest relating to tax-exempt income of certain financial institutions).
In the opinion of Bond Counsel under the laws of the Commonwealth, the Bonds and interest on the Bonds shall at
all times be free from taxation for State and local purposes within the Commonwealth, but this exemption shall not extend to
gift, estate, succession or inheritance taxes or any other taxes not levied directly on the Bonds or the interest thereon. Under
8
the laws of the Commonwealth, profits, gains or income derived from the sale, exchange or other disposition of the Bonds
are subject to State and local taxation within the Commonwealth of Pennsylvania.
The City will issue its certificate regarding the facts, estimates and circumstances in existence on the date of
delivery of the Bonds and regarding the anticipated use of the proceeds of the Bonds. The City will certify that, on the basis
of the facts, estimates and circumstances in existence on the date of issuance of the Bonds, the City does not reasonably
expect to use the proceeds of the Bonds in a manner that would cause the Bonds to be or become “arbitrage bonds” or
“private activity bonds” as those terms are defined in Section 148 and Section 141 of the Code.
THE ABOVE SUMMARY OF POSSIBLE TAX CONSEQUENCES IS NOT EXHAUSTIVE. ALL PURCHASERS OF
THE BONDS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE POSSIBLE FEDERAL INCOME TAX
CONSEQUENCES OF OWNERSHIP OF THE BONDS. ANY STATEMENTS REGARDING TAX MATTERS
Regulations, Future Legislation
Under the provisions of the Code, the Treasury Department is authorized and empowered to promulgate regulations
implementing the intent of Congress under the Code, which could affect the tax-exemption and/or tax consequences of
holding tax-exempt obligations, such as the Bonds. In addition, legislation may be introduced and enacted in the future
which could change the provisions of the Code relating to tax-exempt bonds of a state or local government unit, such as the
City, or the taxability of interest in general.
No representation is made or can be made by the City, or any other party associated with the issuance of the Bonds as to
whether or not any other legislation now or hereafter introduced and enacted will be applied retroactively so as to subject interest
on the Bonds to federal income taxes or so as to otherwise affect the marketability or market value of the Bonds.
EACH PURCHASER OF THE BONDS SHOULD CONSULT HIS OR HER OWN TAX ADVISOR
REGARDING ANY CHANGES IN THE STATUS OF PENDING OR PROPOSED FEDERAL TAX LEGISLATION.
Proposed Tax Legislation
Proposals to alter or eliminate the exclusion of interest on tax-exempt bonds from gross income for some or all
taxpayers have been made in the past and may be made again in the future. For example, on September 12, 2011, President
Obama submitted the “American Jobs Act of 2011” (the “Jobs Act”) to Congress. While the Jobs Act was not enacted in its
original form, certain measures in support of tax-reform continue to appear in the President’s fiscal 2013 budget request, released
in February 2012. The 2013 budget proposes a 28% cap on the value of tax preferences, including tax-exempt interest for
municipal bonds. There is much uncertainty regarding whether any legislation to affect tax-reform will be enacted now or in the
future. The impact of such legislation on the Bonds and the financial condition of the City cannot be predicted. Prospective
purchasers of the Bonds should consult their own tax advisors regarding the potential consequences of the proposed change to
the treatment of interest on the Bonds.
Future legislation, if enacted into law, or clarification of the Code may cause interest on the Bonds to be subject,
directly or indirectly, to federal income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit
of the tax status of such interest. The introduction or enactment of any such future legislation or clarification of the Code may
also affect the market price for, or marketability of, the Bonds. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD
CONSULT THEIR OWN TAX ADVISERS REGARDING ANY PROPOSED FEDERAL TAX LEGISLATION, AS TO
WHICH BOND COUNSEL EXPRESSES NO OPINION.
State Tax Matters
In the opinion of Bond Counsel under the laws of the Commonwealth, the Bonds and interest on the Bonds shall be
free from taxation for State and local purposes within the Commonwealth, but this exemption shall not extend to gift, estate,
succession or inheritance taxes or any other taxes not levied directly on the Bonds or the interest thereon. Under the laws of
the Commonwealth, profits, gains or income derived from the sale, exchange or other disposition of the Bonds are subject to
State and local taxation within the Commonwealth of Pennsylvania.
9
THE ABOVE SUMMARY OF POSSIBLE TAX CONSEQUENCES IS NOT EXHAUSTIVE OR COMPLETE.
ALL PURCHASERS OF THE BONDS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE POSSIBLE
FEDERAL, STATE AND LOCAL INCOME TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS. ANY
STATEMENTS REGARDING TAX MATTERS HEREIN CANNOT BE RELIED UPON BY ANY PERSON TO AVOID
TAX PENALTIES.
The opinions of Bond Counsel are based on current legal authority, cover certain matters not directly addressed by such
authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Bonds for federal income tax purposes. It
is not binding on the IRS or the courts.
Bond Counsel’s engagement with respect to the Bonds ends with the issuance of the Bonds.
CONTINUING DISCLOSURE UNDERTAKING
In accordance with the requirements of Rule 15c2-12 (the “Rule”) promulgated by the Securities and Exchange
Commission (“SEC”), and the Ordinance authorizing issuance of the Bonds, the City will execute and deliver a written
continuing disclosure obligation with respect to the Bonds. See the form of the Continuing Disclosure Agreement (the
“Agreement”) at Appendix E to this Official Statement.
Under the terms of the Agreement, the City will undertake to file with the MSRB financial and other information
concerning the City (annual audited financial statements, annual budget summary, certain operating information and notice
of certain events affecting the City). The City’s obligations with respect to continuing disclosure shall terminate upon the
prior redemption or payment in full of all of the Bonds.
The MSRB has been designated by the SEC to be the central and sole repository for continuing disclosure
information filed by issuers of municipal securities since July 1, 2009. Information and notices filed by municipal issuers
(and other “obligated persons” with respect to municipal securities issues) are made available through the MSRB’s
Electronic Municipal Market Access (EMMA) System, which may be accessed on the internet at
http://www.emma.msrb.org.
Prior to the issuance of the 2016 Bonds, the City was not an "obligated person" with respect to more than
$10,000,000 of outstanding securities and, therefore, was not obligated to make annual information filings with the MSRB
or, previously, any of the "nationally recognized municipal securities information repositories" designated by the SEC under
the Rule.
MISCELLANEOUS
No Litigation
As a condition of settlement for the Bonds, the City and its Solicitor will deliver a certificate stating that there is no
litigation, of any nature, pending or threatened against the City to restrain or enjoin the issuance, sale, execution or delivery of
the Bonds, or if any such litigation is pending or threatened, an opinion of counsel satisfactory to the Underwriter that any such
litigation is without merit.
Legal Opinion
The issuance and delivery of the Bonds is subject to delivery of the approving legal opinion of Cerullo, Datte & Burke, P.C.,
Pennsylvania, acting as Bond Counsel. Certain legal matters will be passed upon for the City by Thomas J. Pellish,
Esquire, Pottsville, Pennsylvania, Solicitor to the City.
Pottsville,
10
Ratings
Standard & Poor’s Corp. (“S&P”) is expected to assign their municipal bond rating to this issue of Bonds with the
understanding that upon delivery of the Bonds, a municipal bond insurance policy insuring the payment when due of the
principal of and interest on the Bonds will be issued by __________________. Currently, _______ financial strength is rated
“__” (_____Outlook) by S&P. Standard & Poor’s Corp. has assigned the Issuer an underlying rating of “A+_” (Stable
Outlook).
The above ratings are not recommendations to buy, sell or hold the Series of 2016 Bonds, and such ratings may be
subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above
ratings may have an adverse effect on the market price of the Series of 2016 Bonds.
Underwriting
The underwriter of the Bonds is RBC Capital Markets, LLC (the “Underwriter”). The Underwriter has agreed, subject
to certain conditions, to purchase the Bonds from the City at an aggregate purchase price of $_________ (which reflects
$________ in Underwriter’s discount and $__________ in net original issue premium from the principal amount of the
Bonds), plus accrued interest, if any. The Underwriter's obligation is subject to certain conditions precedent, and the
Underwriter will be obligated to purchase all of the Bonds if any such Bonds are purchased. The Bonds may be offered and
sold to certain dealers and others (including dealers depositing such Bonds into investment trusts) at prices lower than the
public offering prices. Any such public offering prices may be changed, from time to time, by the Underwriter.
The Underwriter has provided the following information for inclusion in this Official Statement: The Underwriter and
their respective affiliates are full service financial institutions engaged in various activities, that may include securities trading,
commercial and investment banking, municipal advisory, brokerage and asset management. In the ordinary course of business,
the Underwriter and their respective affiliates may actively trade debt and if applicable equity securities (or related derivative
securities) and provide financial instruments (which may include bank loans, credit support or interest rate swaps). The
Underwriter and its affiliates may engage in transactions for its own accounts involving the securities and instruments made the
subject of this securities offering or other offering of the Issuer. The Underwriter and their respective affiliates may also
communicate independent investment recommendations, market color or trading ideas and publish independent research views
in respect of this securities offering or other offerings of the Issuer. The Underwriter does not make a market in credit default
swaps with respect to municipal securities at this time but may do so in the future.
BOND INSURANCE RISK FACTORS
The City has applied for a bond insurance policy to guarantee the scheduled payment of principal and interest on the
Bonds. The City has yet to determine whether an insurance policy will be purchased with the Bonds. If an insurance policy is
purchased, the following are risk factors relating to bond insurance.
In the event of default of the payment of principal or interest with respect to the Series of 2016 Bonds when all or
some becomes due, any owner of the Series of 2016 Bonds shall have a claim under the applicable Bond Insurance Policy
(the Policy) for such payments. However, in the event of any acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of
maturity pursuant to a mandatory sinking fund payment, the payments are to be made in such amounts and at such times as
such payments would have been due had there not been any such acceleration. The Policy does not insure payment of
redemption premium, if any. The payment of principal and interest in connection with mandatory or optional prepayment of
the Series of 2016 Bonds by the City which is recovered by the City from the bond owner as a voidable preference under
applicable bankruptcy law is covered by the insurance policy, however, such payments will be made by the Bond Insurer at
such time and in such amounts as would have been due absence such prepayment by the City unless the Bond Insurer
chooses to pay such amounts at an earlier date.
Under most circumstances, default of payment of principal and interest does not obligate acceleration of the
obligations of the Bond Insurer without appropriate consent. The Bond Insurer may direct and must consent to any remedies
that the Trustee exercises and the Bond Insurer’s consent may be required in connection with amendments to the Indenture.
11
In the event the Bond Insurer is unable to make payment of principal and interest as such payments become due
under the Policy, the Series of 2016 Bonds are payable solely from the moneys received by the Trustee pursuant to the
Indenture. In the event the Bond Insurer becomes obligated to make payments with respect to the Series of 2016 Bonds, no
assurance is given that such event will not adversely affect the market price of the Series of 2016 Bonds or the marketability
(liquidity) for the Series of 2016 Bonds.
The long-term ratings on the Series of 2016 Bonds are dependent in part on the financial strength of the Bond
Insurer and its claim paying ability. The Bond Insurer’s financial strength and claims paying ability are predicated upon a
number of factors which could change over time. No assurance is given that the long-term ratings of the Bond Insurer and of
the ratings on the Series of 2016 Bonds insured by the Bond Insurer will not be subject to downgrade and such event could
adversely affect the market price of the Series of 2016 Bonds or the marketability (liquidity) for the Series of 2016 Bonds.
See description under “RATINGS” above.
The obligations of the Bond Insurer are general obligations of the Bond Insurer and in an event of default by the
Bond Insurer, the remedies available to the Trustee and holders of Series of 2016 Bonds may be limited by applicable
bankruptcy law or other similar laws related to insolvency.
Neither the City nor the Underwriter have made independent investigation into the claims paying ability of the Bond
Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Bond Insurer
is given.
CERTAIN MATTERS
The execution and delivery of this Official Statement has been duly authorized by the City. Certain information
contained in this Official Statement has been obtained from sources other than the City. All of the summaries and references of
the provisions of the Bonds contained in this Official Statement and all other summaries and references to the Act and to other
materials not purporting to be quoted in full, are only brief outlines of certain provisions thereof, and do not constitute complete
statements.
This Official Statement is not to be construed as a contract or agreement between the City and the Underwriters or
the purchasers or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion,
whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and
expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any
sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the
City since the date hereof. The information contained in the Official Statement that has been obtained from sources other
than the City is not guaranteed as to accuracy or completeness.
CITY OF POTTSVILLE
By:
, Mayor
12
APPENDIX A
Summaries of Financial Information
of
The City
FINANCIAL REVIEW
CITY OF POTTSVILLE
Comparative Statement of General Fund Revenues and Expenditures
for Fiscal Years 2012 through 2016
2012
Audited
2013
Audited
2014
Audited
2015
Estimated
2016
Budgeted
$6,029,353
372,145
119,749
212,990
1,099,508
8,764
0
146,393
0
$6,262,551
376,813
104,683
214,154
1,095,999
7,917
25,300
168,475
0
$6,700,800
240,900
100,233
43,550
567,467
302,562
1,800
2,500
0
$6,008,937
320,159
114,754
50,967
606,696
160,323
4,361
11,164
0
$6,364,453
384,794
87,426
119,600
819,612
136,443
7,615
12,605
0
7,988,902
8,225,892
7,959,812
7,277,361
7,932,548
0
14,726
300
17,019
8,680
15,824
0
5,593
200,000
27,000
TOTAL REVENUE AND OTHER
FINANCING SOURCES
8,003,628
8,273,211
7,984,316
7,282,954
8,159,548
EXPENDITURES
General government
Public safety
Public Works-health
Public Works-Highways
Culture – recreation
Community development
Debt service
Miscellaneous expenditures
758,222
2,407,624
15,367
1,049,803
665,637
173,165
338,053
2,357,798
738,831
2,341,196
17,561
1,155,416
857,035
52,917
318,058
2,283,915
758,518
2,456,659
34,417
1,265,512
613,249
52,522
164,579
2,554,010
463,291
3,387,513
36,380
1,700,570
647,006
43,485
219,220
1,844,934
477,310
3,502,230
35,228
1,377,933
595,838
42,138
323,136
1,805,735
Total Expenditures
7,765,669
7,764,929
7,899,466
8,342,399
8,159,548
237,959
508,282
84,850
(1,059,445)
0
Beginning General
Fund Balance, January 1
$ 1,304,076
$ 1,542,035
$ 2,050,317
$ 2,135,167
$ 1,075,722
Closing General
Fund Balance, December 31
$ 1,542,035
$ 2,050,317
$ 2,135,167
$ 1,075,722
$ 1,075,722*
REVENUES
Taxes
Licenses and permits
Fines and forfeits
Interest and rents
Intergovernmental revenues
Charges for services
Miscellaneous revenues
Donations
Transfers from other funds
Total Revenues
OTHER FINANCING SOURCES
Sale of Assets
Refunds of prior year expenditures
NET CHANGE IN FUND
BALANCES
*As of 5/31/16
A-1
LABOR RELATIONS
The City employs 22 Police Officers covered by a Fraternal Order of Police Bargaining Unit, 20 Non-Uniform
personnel covered by a local American Federation of State, County and Municipal Employees Union, 23 part-time crossing
guards, as well as 12 full-time and 7 elected officials.
Pension Program
The City sponsors two defined benefit retirement plans which cover the Police Force and Non-Uniform Employees (all
single-employer public retirement systems. Both funds are maintained by a financial institution, as trustee. The payroll for
employees covered by pension plans was $2,399,861 for the year ended December 31, 2015.
All regular full-time employees are eligible to participate in the retirement plans.
Benefits for both plans vary depending on specific agreements with each group of employees. The Police are eligible
for normal retirement at age 50 and 20 years of service if hired before May 20, 1985, or after completion of 25 years of service
and age 50 if hired after May 20, 1985.
Non-Uniform employees are eligible for normal retirement at age 65 and after completion of 10 years of service or
early retirement at age 60 and after 5 years of service, if hired after October 20, 1999 it is age 60 and after 20 years of service.
Police force employees are required to contribute 5% of their salary plus $12.00 annually. Non-uniform employees do
not contribute if hired prior to October 20, 1999. After that date, non-uniformed members contribute 3.5% of salary.
CITY FINANCIAL HISTORY
The City of Pottsville has never defaulted on the payment of lease rentals or debt service. The status of the City’s
present indebtedness is shown in the table entitled “Bonded Indebtedness”
In recent years, the City and related government units have levied the following taxes of the rates indicated:
Real Estate (mills)
City of Pottsville (2015)...............................................................................................................................
County (2015) ..............................................................................................................................................
School District (2015) ..................................................................................................................................
Retail Receipts (mills)
City ...............................................................................................................................................................
Wholesale Receipts (mills)
City ...............................................................................................................................................................
Earned Income
City ...............................................................................................................................................................
School District..............................................................................................................................................
Local Services Tax.........................................................................................................................................
City ...............................................................................................................................................................
School District..............................................................................................................................................
Real Property Transfers
School District and City ...............................................................................................................................
Business Privilege (mills)
City ...............................................................................................................................................................
Per Capita
City ...............................................................................................................................................................
School District..............................................................................................................................................
County (2015) ..............................................................................................................................................
A-2
19.470
13.980
34.000
.75
.5
.5%
.0%
$47.00
$5.00
1.0%
3.5
$5.00
$10.00
$5.00
FUTURE FINANCING
The City has no immediate plans to undertake any additional long term financing during the next three years.
CITY BORROWING CAPACITY
The borrowing capacity of the City is calculated in accordance with provisions of the Act, which describes the
applicable debt limits for local government units, including school districts and counties. Under the Act, the City may incur
electoral debt, which is debt that is approved by a majority of the County’s voters at either a general or special election, in an
unlimited amount. Net nonelectoral debt, or debt not approved by the City’s electorate, may not exceed 250% of the City’s
"Borrowing Base". The debt evidenced by the Bonds is non-electoral debt. The Borrowing Base is calculated as the annual
arithmetic average of Total Revenues (as defined in the Act), for the three full fiscal years next preceding the date of incurring
debt. Combined net nonelectoral debt and net lease rental debt (debt represented by capital leases and other forms of agreement
net of state aid), incurred on behalf of the City may not exceed 350% of the City’s Borrowing Base. The Borrowing Base of the
City is calculated according to the Act as follows:
Estimated Total Net Revenues for Three Fiscal Years, ending in 2013, 2014
and 2015 (unaudited)........................................................................................................
Borrowing Base - Average Total Net Revenues for Three-Year Period ......................................
$
0
0
The borrowing capacity of the City is calculated as follows, according to the Act:
A.
ELECTORAL DEBT ............................................................................................................
B.
NON-ELECTORAL DEBT
Computation of Net Non-Electoral Debt
a. Outstanding Principal (including the Bonds)............................................................
b. Less: Deductions.......................................................................................................
c. Net Non-Electoral Debt .............................................................................................
C.
$4,560,000
0
$4,560,000
LEASE RENTAL DEBT
Computation of Net Lease Rental Debt
a. Outstanding Principal (including the Bonds)............................................................
b. Less: Deductions (described in the Act) ...................................................................
c. Net Lease Rental Debt ...............................................................................................
D.
0
$
$
0
0
0
BORROWING CAPACITY
Computation of Non-Electoral Borrowing Capacity
a. Debt Limit - 250% of Borrowing Base .....................................................................
b. Less: Net Non-Electoral Debt ..................................................................................
c. Remaining Borrowing Capacity ................................................................................
Computation of Combined Borrowing Capacity
a. Debt Limit - 350% of Borrowing Base .....................................................................
b. Less: Combined Net Lease Rental Debt and Net
Non-Electoral Debt ....................................................................................................
c. Current Combined Borrowing Capacity ...................................................................
A-3
$0
4,560,000
$0
$0
4,560,000
$0
TAXING POWERS OF THE CITY
Under the Home Rule Charter Act and the Code Ordinances of the City of Pottsville, the City may levy the following
taxes:
1.
25 mills for general revenue purposes without court approval.
2
Unlimited millage for payment of principal and interest on any indebtedness incurred pursuant to the Local
Government Unit Debt Act or any prior act governing the incurring of indebtedness.
Under the Library Code of the Commonwealth of Pennsylvania Act of June 14, 1961, P.L. 324), the City is empowered
to levy a tax of 3 mills for library purposes, following a public referendum.
The City does impose fees and charges for refuse collection. The City is empowered to levy further license fees.
Under the Local tax Enabling Act of the Commonwealth of Pennsylvania, and the Code of Ordinances of the City of
Latrobe, additional taxes may be levied by a Home Rule Charter community such as the City and certain other political
subdivisions subject to the following limitations:
1.
2.
3.
4.
5.
Tax on Occupations as a flat tax. Code of Ordinances,
Chapter 51, §51-26 et seq. The City currently levies this tax.
Per Capita Tax. Code of Ordinances, Chapter 51, §51-51 et seq.
The City currently levies this tax.
$10.00
$5.00
Wages, salaries, commissions and other earned income of individuals.
Code of Ordinances, Chapter 51, §51-15 et seq.
The City currently levies this tax.
1%
Transfer of Title of Real Property. Code of Ordinances,
Chapter 51, §51-1 et seq. The City currently levies this tax.
.5%
Occupational Privilege Tax. Code of Ordinances, Chapter 51,
§51-38 et seq. The City currently levies this tax.
$10.00
The aggregate amounts of taxes under the Local Tax Enabling Act may not exceed 12 mills on the latest total market
value of assessable real estate.
When two political subdivisions, such as Pottsville Area School District and the City, impose any one of the taxes,
authorized under the Local Tax Enabling Act, upon a subject or person located within both subdivisions, the tax levied by each
subdivision is one-half the rate shown in the limits above.
A-4
TAX REVENUES OF THE CITY
Ten Largest Taxpayers in the City
The ten largest real estate taxpayers in the City and the 2015 assessed valuation of their real estate are as follows:
2015
Assessed
Valuation
$4,341,950
$2,162,450
1,513,205
1,244,980
1,164,675
885,285
823,755
650,250
626,375
550,000
Taxpayer
Providence Pl of Pottsville
Manor Care Inc.
Geisinger Clinic
Market Square
One Norwegian Assoc.
Branchburg LLC
KM Real Estate LP
DNGP Enterprises Inc.
Yuengling D.G. & Son, Inc.
Sharp Mountain Plaza LLC
TOTAL
$13,962,925
Percentage of Total 2015 City Assessed Valuation,
Approximately 7%
Source: City Officials.
Market and Assessed Values of Real Property
Market values of real property in the City, as reported by the Pennsylvania State Tax Equalization Board are listed
below.
Year
2010
2011
2012
2013
2014
2015 (1)
Current
Market Value
468,691,954
450,029,867
396,790,475
406,160,375
383,376,905
425,423,464
Assessed Valuation
187,008,090
187,212,425
187,681,895
189,270,735
190,154,945
189,738,865
Source: Pennsylvania State Tax Equalization Board
(1) Provided by City officials
A-5
Common
Level Ratio
39.9%
41.6
47.3
46.6
49.6
44.6
Tax Collection Record
Tax notices are due for mailing to taxpayers at the beginning of July each year. A discount of 2% is allowed on all
property taxes paid within two months from the date tax bills are mailed. After the discount period expires a two-month
period is allowed for payment of taxes at par. Taxes paid after this time are subject to a 10% penalty. Local tax collectors
submit a list of names of all taxpayers who have not paid their current real estate taxes to the Tax Claim Bureau of Schuylkill
County on March 1 of the following calendar year. All delinquent real estate taxes are subsequently paid to this office, which
in turn remits a monthly list of delinquent collections to the City.
School
Year
2010
2011
2012
2013
2014
2015
Assessed
Valuation
187,008,090
187,212,425
187,681,895
189,270,735
190,154,945
189,738,865
Millage
15.37
17.87
18.47
18.47
18.47
19.47
Adjusted
Levy (1)
2,844,808
3,326,520
3,454,256
3,479,529
3,688,626
3,678,989
Collected In
Year of Levy
Amount
%
2,528,347
2,976,990
3,087,310
3,093,906
3,295,472
3,151,371
88.9
89.5
89.4
88.9
89.3
85.7
Total Collections
Amount
%
2,862,001
3,288,597
3,410,393
3,444,991
3,625,908
3,467,609
Source: City Officials.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-6
99.34
98.86
98.73
99.01
98.30
94.25
STATEMENT OF INDEBTEDNESS
Financial Factors and Ratios
STEB Market Valuation of Real Estate (2015) ....................................................................
STEB Assessed Valuation of Real Estate (2015) .................................................................
Common Level Ratio ............................................................................................................
Population:
2010 U.S. Census ............................................................................................................
Market Valuation of Real Estate to Population ..............................................................
Assessed Valuation of Real Estate to Population ...........................................................
$425,423,464
$189,738,865
44.6%
14,324
$29,700
$13,246
Bond Indebtedness
(includes this issue)
Direct Debt:
General Obligation Bonds, Series of 2016 (last maturity 2036) ...................................
$4,560,000
Total Direct Debt .............................................................................................................
$4,560,000
Overlapping Debt:
Greater Pottsville Area Sewer Authority (1) ....................................................................
Schuylkill County General Obligation Bonds (2) ............................................................
Pottsville Area School District ........................................................................................
Total Overlapping Debt ..................................................................................................
$10,749,549
1,423,917
4,220,895
$16,394,361
Total Direct and Overlapping Debt ...............................................................................
$20,954,361
Ratio of Total Direct and Overlapping Debt to:
Market Valuation of Real Estate ...............................................................................................
Assessed Valuation of Real Estate ...........................................................................................
Population (2000) .....................................................................................................................
4.93%
11.04%
$1,462
(1) Also shared with the Cities of Palo Alto and Port Carbon.
(2) Pro rata 7.57% share of County General Obligation Debt.
(3) Pro rata 64.05% share of the Pottsville Area School District Debt.
A-7
APPENDIX B
Description of the City
DESCRIPTION OF THE CITY
General
The City of Pottsville is the county seat of, and the most populous municipality in, Schuylkill County, Pennsylvania.
The City is a Third Class City with a 2010 population of 14,324.
City Government
The City of Pottsville was laid out in 1816 and was incorporated as a City in 1828. In 1922, it was chartered as a thirdclass city and subsequently adopted the optional Mayor-Council (Mayor as chief executive) home rule form of local government.
The Mayor is elected for a four-year term and serves as the chief executive of the City and has a vote on action taken by
the Council. A four-member part-time city Council elected at large for staggered four-year terms forms the legislative body of
the City government. The City Treasurer and City Controller are also elected for four-year terms. Ordinance No. 454 of
October 1991 created the position of City Administrator, who is deputy director of all city departments.
DESCRIPTION OF SCHUYLKILL COUNTY
History
Schuylkill County has long played a vital role in both agriculture and the mining of Anthracite coal. Portions of the
County have some of the richest farmland in the Commonwealth and have supported generations of thriving crop, livestock, and
dairy farming operations. However, it was the Anthracite mines that brought the ethnically diverse population to the area. From
orthodox onion domes to gothic cathedral towers, proof of the area’s ethnic diversity is seen in the variety of church architecture
scattered throughout the County. One of the earliest churches in the County, a quaint red church near Orwigsburg, was burned
by Indians. Eastern European and Irish immigrants mined millions of tons of coal in deep mines before World War II, and
militant labor unrest among some early miners resulted in the formation of the famed Molly Maguires, a labor organization
whose members where hung in the courtyard of the Schuylkill County Prison. Few of the original deep mines remain, and most
of the area’s current coal production is done by strip mining and small scale miming ventures.
Demographic Characteristics
The following tables provide population trends, age, wealth and housing indices for the City, the County and the
Commonwealth.
Source: The Pennsylvania State University Data Center
Population
City of Pottsville
Schuylkill County
Commonwealth
2000
15,549
150,336
12,281,054
2010
14,324
148,289
12,702,379
Age Composition
(2010)
City of Pottsville
Schuylkill County
Commonwealth
Under 18
21.7%
20.1
22.0
65 or Over
18.3%
18.1
15.4
B-1
Family Income
(2014)
Median Family Income
$51,334
57,709
67,521
City of Pottsville
Schuylkill County
Commonwealth
Families Below
Poverty Level
13.7%
9.4
9.3
Occupied Housing
(2010)
Total
Housing
Units
City of Pottsville
Schuylkill County
Commonwealth
7,040
69,323
5,567,315
Occupied
Housing
Units
6,031
60,192
5,018,904
%
Occupied
Housing
Owner-Occupied
Housing
Units
%
Owner
Occupied
85.7%
86.8%
90.2%
3,498
45,496
3,491,722
58.0%
65.6%
69.6%
Transportation
One of the County’s primary assets is its strategic location. Pottsville, the county seat and geographic center, is only 90
miles northwest of Philadelphia and two hours away from New York and Baltimore. Interstate 81 has an interchange in the
County and it intersects with Interstate 80 approximately 20 miles north of the County.
Air service to the County is readily available from the Wilkes-Barre-Scranton International Airport, 45 minutes to the
north and the Reading Airport, 30 minutes to the east. The Schuylkill County/Joe Zerbey Airport, just off I-81, accommodates
charter and company aircraft. Conrail provides commuter and freight service between Pottsville and Philadelphia, with rail
facilities available in the majority of the County’s industrial parks. Capital Trailways buses connect daily with the metropolitan
areas of Philadelphia, Baltimore, Washington and New York.
Higher Education
The demand for particular skill in the area’s labor force are met through the training programs offered at the two
vocational-technical schools located in the County. A constant monitoring of the needs of local industries allow the Vo-Tech
schools to structure their programs to fill the demands of County industry. A school of nursing at the Ashland State Hospital and
Pottsville Hospital offers a 33-month curriculum as well as specialized programs for x-ray technologists, nurse anesthetist and
medical technologists. Training in administrative and business skills is available through the Schuylkill Business Institute and
the McCann School of Business. The Schuylkill Campus of Penn State University offers a wide variety of undergraduate
programs. An additional 81 colleges and universities are located within a 100-mile radius of Pottsville. These include Temple
University, University of Pennsylvania, Lehigh University, Villanova University and Princeton University.
B-2
Medical Facilities
There are 3 hospitals/medical centers that serve Schuylkill County. These hospitals, their licensed bed capacities and
number of employees (full-time and part-time) are as follows:
Institution
Location
Licensed Beds
Schuylkill Medical Center – E. Norwegian St.
Pottsville
126
Schuylkill Medical Center – South
Pottsville
179
St. Luke’s Miners Memorial Medical Center
Coaldale
44
_________________
Source: Pennsylvania Department of Health, Bureau of Health Statistics; 2014 reporting period.
Full-Time
498
704
248
Staff
Part-Time
176
145
86
ECONOMY
Classification of Employment by Industry
The following is a breakdown of employment in Schuylkill County for 2013 from the Pennsylvania Department
of Labor & Industry. Average annual earnings for workers are included.
Average
Average Total Wages
(1000s)
Annual Wage
Average Units Employment
Industry
Schuylkill County
AGRICULTURE, FORESTRY, FISHING AND HUNTING
MINING
UTILITIES
CONSTRUCTION
MANUFACTURING
WHOLESALE TRADE
RETAIL TRADE
TRANSPORTATION AND WAREHOUSING
INFORMATION
FINANCE AND INSURANCE
REAL ESTATE AND RENTAL AND LEASING
PROFESSIONAL AND TECHNICAL SERVICES
MANAGEMENT OF COMPANIES AND ENTERPRISES
ADMINISTRATIVE AND WASTE MANAGEMENT SERVICES
EDUCATIONAL SERVICES
HEALTH CARE AND SOCIAL ASSISTANCE
ARTS, ENTERTAINMENT, AND RECREATION
ACCOMMODATION AND FOOD SERVICES
OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION)
FEDERAL GOVERNMENT
LOCAL GOVERNMENT
STATE GOVERNMENT
3,127
49,209
1,769,587
35,961
30
48
15
212
178
134
456
127
27
148
55
155
17
110
23
572
30
275
278
59
213
26
749
579
255
1,369
10,133
1,119
5,608
5,101
346
1,024
220
896
524
1,746
310
7,950
316
2,807
1,209
602
5,359
1,589
21,278
29,455
19,784
58,145
472,442
47,422
126,849
178,386
15,882
42,196
8,794
48,398
31,322
34,835
7,901
283,731
3,994
35,548
24,165
36,627
187,833
91,225
28,408
50,872
77,583
42,472
46,624
42,379
22,619
34,971
45,901
41,207
39,971
54,016
59,774
19,951
25,488
35,689
12,641
12,664
19,988
60,841
35,050
57,411
_________________
Source: Pennsylvania Department of Labor & Industry, report completed May 2015.
* Data that might be identified with an individual employer and/or data involving fewer than twenty-five employees are
not published.
B-3
Top 10 Employers in Schuylkill County
Employer
Wal-Mart Associates .....................................................................
State Government ..........................................................................
Sapa Extrusions Inc. ......................................................................
Lowe’s Home Centers Inc.. ...........................................................
Schuylkill Medical Center .............................................................
Schuylkill County.. ........................................................................
Jeld-Wen, Inc. ................................................................................
Schuylkill Medical Center .............................................................
.Federal Government .....................................................................
Cargill Meat Solutions Corporation...............................................
_________________
Source: Center for Workforce Information and Analysis – L & I, 1st Quarter 2015 data. L & I does not report
employee numbers due to employer privacy.
Employment Trends
Most area residents find employment in the well-diversified agricultural and industrial sectors of the Schuylkill
labor market area. The trend in total employment rates in the County, compared with the same rates for Pennsylvania and the
United States, shown as follows:
Trends in Schuylkill County Employment and Unemployment
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015 (Nov)
County Civilian
Labor Force
Total
Employment
70,200
70,900
71,500
73,100
73,900
73,700
73,000
72,700
73,900
73,300
68,700
69,500
65,400
66,700
67,500
69,500
69,300
66,400
65,300
65,900
66,900
66,800
64,000
65,500
Percentage Unemployed (1)
County
Pennsylvania
U.S.
6.9
5.9
5.6
5.0
6.3
9.9
10.5
9.5
9.4
8.8
6.9
5.7
Source: Pennsylvania Department of Labor and Industry
B-4
5.4
5.0
4.7
4.4
5.4
8.1
8.7
7.9
7.9
7.4
5.8
5.0
5.5
5.1
4.6
4.6
5.8
9.3
9.6
8.5
8.1
7.4
6.2
5.0
APPENDIX C
Financial Statements Year Ending December 31
APPENDIX D
Proposed Form of Bond Counsel Opinion
CITY OF POTTSVILLE
County of Schuylkill
Commonwealth of Pennsylvania
$4,560,000 General Obligation Bonds, Series of 2016 (herein the "Bonds")
PROPOSED FORM OF OPINION OF BOND COUNSEL
We have acted as Bond Counsel in connection with the issuance and sale of the Bonds by the City
of Pottsville, Schuylkill County, Pennsylvania (the "City"), a third class city organized and existing under
the laws of the Commonwealth of Pennsylvania (the "Commonwealth"), pursuant to The Third Class City
Code, Act No. 22 of March 19, 2014, P.L. 52, as amended and supplemented (the "City Code"), pursuant to
an ordinance of the Council of the City adopted on ____________, 2016 (the "Ordinance").
The Council of the City has determined that proceeds of the Bonds will be used to provide funds to:
(1) to fund the design, acquisition, construction, furnishing and equipping of capital projects of the City,
and (2) to pay certain costs and expenses related to the issuance and insurance of the Bonds.
Proceedings for authorization, issuance and sale of the Bonds have been conducted in accordance
with the Local Government Unit Debt Act, approved December 19, 1996, Act 177, as amended (the "Debt
Act") of the Commonwealth. The Pennsylvania Department of Community and Economic Development
(the "Department") has approved the proceedings for the incurring of debt of the City, as authorized in the
Ordinance, as required by the Debt Act.
In our capacity as Bond Counsel, we have reviewed the following: (i) the City Code; (ii) the Debt
Act; (iii) Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code")
and the regulations and rulings promulgated thereunder; (iv) an executed Bond (and assume all other Bonds
are similarly executed); (v) the proceedings of the City filed with the Department under the provisions of
the Debt Act; (vi) the Certificate of the Department approving the incurrence of general obligation
indebtedness by the City; (vii) the information return of the City on IRS Form 8038-G regarding the Bonds;
and (vii) the other documents, instruments, certificates, agreements and opinions, including, without
limitation, the opinion of Thomas J. Pellish, Esquire, as Solicitor to the City, executed and delivered at, or in
connection with, the closing.
In rendering our opinion, we have assumed the truth, completeness and due authorization of all
written instruments, statements and certificates executed by public officials. Our opinion is further subject
to the effect of bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium
or other similar laws relating to or affecting the rights of creditors generally.
Based on our examination, we are of the opinion that:
1.
The City has been duly incorporated and is validly existing under the laws of the
Commonwealth and has full power and authority to issue the Bonds for the purposes hereinbefore set forth.
2.
The proceedings authorizing adoption of the Ordinance, authorizing issuance, execution,
authentication and delivery of the Bonds are valid and legally sufficient.
3.
The Bonds have been duly authorized and issued by the City; constitute valid and legally
binding obligations of the City, enforceable against the City in accordance with its terms; and constitute the
general obligation of the City for which the full faith, credit and taxing power of the City have been
pledged.
4.
The principal of and interest on the Bonds are payable without deduction of, and the City
assumes and agrees to pay, any tax or taxes now or hereafter levied or assessed thereon under any present or
future law of the Commonwealth, except gift, estate, succession or inheritance taxes and other taxes levied
or assessed directly on the Bonds or the income therefrom.
5.
Assuming continued compliance by the City with the requirements of the Code applicable
to the Bonds, interest on the Bonds is not includable in gross income for purposes of federal income
taxation under existing statutes, regulations, rulings and court decisions and is not treated as an item of tax
preference under Section 57 of the Code for purposes of the individual and corporate alternative minimum
taxes. However, we call to your attention that under the Code (i) to the extent that interest on the Bonds is a
component of a corporate holder's "adjusted current earnings," a portion of that interest may be subject to an
alternative minimum tax and an environmental tax, and (ii) interest on the Bonds is subject to a "branch
profits tax" imposed on foreign corporations engaged in a trade or business in the United States.
6.
Under the laws of the Commonwealth, the Bonds are exempt from personal property taxes
in the Commonwealth, and the interest on the Bonds is exempt from Pennsylvania personal income tax.
Profits, gains or income derived from the sale, exchange or other disposition of the Bonds are subject to
state and local taxation within the Commonwealth.
7. The Debt Act provides that the Commonwealth does pledge to and agree with any person, firm
or corporation or Federal Agency subscribing to or acquiring any Bonds, that the Bonds, their transfer and
the income therefrom shall at all times be free from taxation for State and local purposes within the
Commonwealth, but this exemption shall not extend to gift, estate, succession or inheritance taxes or any
other taxes not levied directly on the Bonds, the transfer thereof, the income therefrom, or the realization of
profits on the sale thereof.
8. Subject to the condition that interest on the Bonds is and continues to be excludable from gross
income for purposes of federal income taxation, the Bonds are "qualified tax exempt obligations" of the
City.
Our opinion is based on current legal authority, covers certain matters not directly addressed by
such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Bonds for
federal income tax purposes. We express no opinion or assurance about the future activities of the Council,
or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the
enforcement thereof. The Council has covenanted, however, to comply with the requirements of the Code.
Our engagement is with respect to the Bonds, and, unless separately engaged, we are not obligated to
defend the Council or the owners of the Bonds regarding the tax status of the Bonds in the event of an audit
examination by any regulatory authority.
CERULLO, DATTE & BURKE, P.C.
Dated: ________________, 2016
APPENDIX E
Proposed Form of Continuing Disclosure Agreement
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and
delivered by the CITY OF POTTSVILLE, Schuylkill County, Pennsylvania (the “City”), in
connection with the issuance of its $4,560,000 General Obligation Bonds, Series of 2016 (the
“Bonds”). The Bonds are being issued pursuant to an Ordinance duly adopted by the City on
___________, 2016 (the “Ordinance”). The City makes the following certifications and
representations as an inducement to the Participating Underwriters and others to purchase the
Bonds:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the City for the benefit of the holders or beneficial owners of the Bonds
and in order to assist the Participating Underwriters in complying with Securities and Exchange
Commission Rule 15c2-12(b)(5).
SECTION 2. Definitions. In addition to the definitions set forth in the Ordinance, which
apply to any capitalized term or phrase used in this Disclosure Agreement unless otherwise
defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the City pursuant to and as
described in Sections 3 and 4 of this Disclosure Agreement.
“Business Day” shall mean a day other than a Saturday, a Sunday or a day on which the
New York Stock Exchange is closed or a day on which banks located in the Commonwealth are
authorized by law or executive order to be closed.
“Commonwealth” shall mean the Commonwealth of Pennsylvania.
“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB.
“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure
Agreement.
“MSRB” shall mean the Municipal Securities Rulemaking Board.
“Participating Underwriter” shall mean any of the original underwriters of the Bonds
required to comply with the Rule in connection with offering of the Bonds.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from time
to time.
“State Depository” shall mean any public or private depository or entity designated by the
Commonwealth as a state depository for the purpose of the Rule. As of the date of this Disclosure
Agreement, there is no State Depository.
SECTION 3. Provision of Annual Reports. The City shall, within 270 days following the
close of each of its fiscal years, beginning with the fiscal year ending December 31, 2016, provide
to the MSRB through EMMA at http://www.emma.msrb.org/ an Annual Report that is consistent
with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be
submitted as a single document or as separate documents comprising a package in PDF format,
and may cross-reference other information as provided in Section 4 of this Disclosure Agreement;
provided that the audited financial statements of the City may be submitted separately from the
balance of the Annual Report. If the City is unable to provide to the MSRB an Annual Report by
the date required above, the City shall send or cause to be sent a notice to the MSRB stating in
substance that the City has not provided an Annual Report as required by this Section 3 and the
date that the City anticipates filing the Annual Report.
SECTION 4. Content of Annual Reports. The City’s Annual Report shall contain or
incorporate by reference the following financial information and operating data with respect to the
City:






the financial statements for the most recent fiscal year, prepared in accordance with
generally accepted accounting principles for local government units and audited in
accordance with generally accepted auditing standards;
a summary of the budget for the most recent fiscal year;
the aggregate assessed value and market value of all taxable real estate for the most
recent fiscal year;
the taxes and millage rates imposed for the most recent fiscal year;
the real property tax collection results for the most recent fiscal year, including (1)
the real estate levy imposed (expressed both as a millage rate and an aggregate
dollar amount), (2) the dollar amount of real estate taxes collected that represented
current collections (expressed both as a percentage of such fiscal year’s levy and as
an aggregate dollar amount), (3) the amount of real estate taxes collected that
represented taxes levied in prior years (expressed as an aggregate dollar amount),
and (4) the total amount of real estate taxes collected (expressed both as a
percentage of the most recent year’s levy and as an aggregate dollar amount); and
a list of the ten (10) largest real estate taxpayers and, for each, the total assessed
value of real estate for the most recent fiscal year.
Any or all of the items listed above may be incorporated by reference from other documents,
including official statements of debt issues of the City or related public entities which have been
submitted to the Securities and Exchange Commission. If the document incorporated by reference
is a final official statement, it must be available from the MSRB. The City shall clearly identify
each other document so incorporated by reference. The City reserves the right to modify from time
to time specific types of information provided hereunder or the format of the presentation of such
information, to the extent necessary or appropriate; provided, however, that any such modification
will be in a manner consistent with the Rule.
SECTION 5. Reporting of Listed Events. The City will, within ten (10) days of the event,
file with EMMA, if any, notice of the occurrence of any of the following events with respect to the
Bonds, if material:
-2-
(a)
principal and interest payment delinquencies;
(b)
non-payment related defaults, if material;
(c)
unscheduled draws on debt service reserves reflecting financial difficulties;
(d)
unscheduled draws on credit enhancements reflecting financial difficulties;
(e)
substitution of credit or liquidity providers, or their failure to perform;
(f)
adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB)
or other material notices or determinations with respect to the tax status of the
security, or other material events affecting the tax status of the Bonds;
(g)
modifications to rights of Bondholders, if material;
(h)
bond calls, if material, and tender offers;
(i)
defeasances;
(j)
release, substitution or sale of property securing repayment of the Bonds, if
material;
(k)
rating changes;
(l)
bankruptcy, insolvency, receivership or similar event;
(m)
the consummation of a merger, consolidation or acquisition involving an obligated
person or the sale of all or substantially all of the assets of the obligated person,
other than in the ordinary course of business, the entry into a definitive agreement
to undertake such actions, other than pursuant to its terms, if material;
(n)
appointment of a successor or additional trustee or a change of name of the a
trustee, if material; and
(o)
in a timely manner, to provide to the MSRB through the EMMA System, notice of
any failure to provide required annual financial information on or before the dates
specified above.
The City may from time to time choose to provide notice of the occurrence of certain other
events, in addition to those listed above, if, in the judgment of the City, such other event is material
with respect to the Bonds, but the City does not undertake to commit to provide any such notice of
the occurrence of any material event except those events listed above.
-3-
Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall,
or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the
MSRB, in an electronic format as prescribed by MSRB, in a timely manner not in excess of 10
business days after the occurrence of the Listed Event. Notwithstanding the foregoing notice of
Listed Events described above in subsections (h) an (i) above need not be given under this Section
any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds.
SECTION 6. Dissemination Agent. The City may, at any time and from time to time,
appoint or engage another person (the “Dissemination Agent”) to assist it in carrying out its
obligations under this Disclosure Agreement, and may discharge such Dissemination Agent, with
or without appointing a successor, and without notice to holders of the Bonds.
SECTION 7. Termination of Disclosure Obligation. The City’s obligations under this
Disclosure Agreement shall terminate at such time as the City is no longer an “obligated person”
with respect to the Bonds, as such phrase is defined in the Rule.
SECTION 8. Default. In the event of a failure of the City to comply with any provision of
this Disclosure Agreement, any holder or beneficial owner of Bonds may take such actions as may
be necessary and appropriate, including seeking mandate or specific performance by court order,
to cause the City to comply with its obligations under this Disclosure Agreement. A default under
this Disclosure Agreement shall not be deemed an event of default with respect to the Bonds, and
the sole remedy under this Disclosure Agreement in the event of any failure of the City to comply
with this Disclosure Agreement shall be an action to compel performance.
SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the City may amend this Disclosure Agreement, and any provision of this Disclosure
Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel
expert in federal securities laws to the effect that such amendment or waiver would not, in and of
itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been
effective on the date hereof but taking into account any subsequent change in or official
interpretation of the Rule.
SECTION 10. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the City, the Participating Underwriters and holders and beneficial owners from time to time of the
Bonds and shall create no rights in any other person or entity.
IN WITNESS WHEREOF, the City causes this Continuing Disclosure Agreement to be
executed on its behalf by the Chairman of the City Council, all as of ____________, 2016.
CITY OF POTTSVILLE
ATTEST:
By:_________________________________
James T. Muldowney, Mayor
_________________________________
City Clerk
-4-
APPENDIX F
Specimen Municipal Bond Insurance Policy
APPENDIX G
Bond Amortization Schedule
$4,560,000
CITY OF POTTSVILLE
Principal Due: October 1, of the years shown below
Denominations: Integral multiples of $5,000
DATE
PRINCIPAL
$
Total:
$
COUPON
%
INTEREST
$
DEBT SERVICE
$
$
$
FISCAL TOTAL
$
$

$4,560,000 CITY OF POTTSVILLE Schuylkill County, Pennsylvania

Transcription

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