22450000 chesterfield valley transportation development

Transcription

This Preliminary Official Statement and the information contained herein are subject to completion and amendment. These securities may not be sold nor may offers to buy be accepted prior to the
time the Official Statement is delivered in final form. Under no circumstances may this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor may there be
any sale of these securities in any jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER 26, 2006
NEW ISSUE
Book–Entry Only
FITCH RATING: ____
Insured by CIFG Assurance North America, Inc.
See “Ratings” herein
In the opinion of Armstrong Teasdale LLP, Bond Counsel, under existing law and assuming continued compliance with certain requirements of the Internal
Revenue Code of 1986, as amended, the interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross
income for federal and Missouri income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on
individuals and corporations. The Bonds have not been designated as “qualified tax–exempt obligations” within the meaning of Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended. See “TAX MATTERS” herein.
$22,450,000
CHESTERFIELD VALLEY TRANSPORTATION DEVELOPMENT DISTRICT
(CHESTERFIELD, MISSOURI)
TRANSPORTATION SALES TAX REVENUE BONDS
SERIES 2006
Dated: Date of Delivery
Due: April 15, as shown on
the inside front cover
The Series 2006 Bonds are issuable only as fully-registered bonds, and, when issued, will be registered in the name of
Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act
as securities depository for the Series 2006 Bonds. Purchases of the Series 2006 Bonds will be made in book–entry form, in the
denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interests in
Series 2006 Bonds purchased. So long as Cede & Co. is the registered owner of the Series 2006 Bonds, as nominee of DTC,
references herein to the Bondowners or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial
Owners (herein defined) of the Series 2006 Bonds. Principal of and semiannual interest on the Series 2006 Bonds will be paid
from moneys available therefor under the Indenture (herein defined) by Wells Fargo Bank, N.A., Kansas City, Missouri, as
Trustee (the “Trustee”). So long as DTC or its nominee, Cede & Co., is the Bondowner, such payments will be made directly to
such Bondowner. DTC is expected, in turn, to remit such principal and interest to the DTC Participants (herein defined) for
subsequent disbursement to the Beneficial Owners. Interest on the Series 2006 Bonds will be payable semiannually on each
April 15 and October 15, beginning April 15, 2007.
The Series 2006 Bonds are being issued by the Chesterfield Valley Transportation Development District (the
“District”), pursuant to a Trust Indenture dated as of October 1, 2006, by and between the District and the Trustee (the
“Indenture”). The Series 2006 Bonds are limited obligations of the District, payable solely from Bond proceeds and Pledged
Revenues (as described herein).
The Series 2006 Bonds and the interest thereon do not constitute a debt of the District, the City of Chesterfield,
Missouri, St. Louis County, Missouri, the Missouri Highways and Transportation Commission, the State of Missouri or any
political subdivision thereof, and do not constitute an indebtedness within the meaning of any constitutional, charter or
statutory debt limitation or restriction.
Payment of the principal of and interest on the Series 2006 Bonds when due will be insured by a financial guaranty
insurance policy issued simultaneously with the delivery of the Series 2006 Bonds by CIFG Assurance North America, Inc.
The Series 2006 Bonds are subject to redemption prior to maturity in certain circumstances, as described herein. See
“THE BONDS – Redemption Provisions” and “PROJECTED NET REVENUES AND NET DEBT SERVICE” herein.
See inside cover for maturities, CUSIP numbers, principal amounts, interest rates, yields and prices.
The Series 2006 Bonds involve certain risks and may not be a suitable investment for all persons. Prospective purchasers
should be able to evaluate the risks and merits of an investment in the Series 2006 Bonds and confer with their own legal and
financial advisors before considering a purchase of the Series 2006 Bonds. See “BONDOWNERS’ RISKS” herein.
The Series 2006 Bonds are offered when, as and if issued by the District, subject to approval of their legality by
Armstrong Teasdale LLP, St. Louis, Missouri, Bond Counsel. Certain legal matters will be passed upon for the District by
Armstrong Teasdale LLP, St. Louis, Missouri. Certain legal matters will be passed upon for the Underwriter by Gilmore & Bell,
P.C., St. Louis, Missouri. Piper Jaffray & Co. has served as financial advisor to the District in connection with the issuance of the
Series 2006 Bonds. It is expected that the Series 2006 Bonds will be available for delivery through the facilities of DTC on or
about November ___, 2006.
The date of this Official Statement is _____________ __, 2006.
Preliminary, subject to change
$22,450,000*
SERIES 2006
MATURITY SCHEDULE
Base CUSIP: _________
SERIAL BONDS
Maturity
April 15
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Principal
Amount
$ 430,000
730,000
1,165,000
1,210,000
1,255,000
1,305,000
1,360,000
1,415,000
1,470,000
820,000
850,000
885,000
920,000
960,000
1,000,000
Interest
Rate
%
Yield
%
Price
CUSIP(1)
%
TERM BONDS*
Maturity
April 15
2026
(1)
Principal
Amount
$6,675,000
Interest
Rate
%
Yield
%
Price
CUSIP(1)
%
CUSIP numbers shown above have been assigned by an organization not affiliated with the District. The District was not
responsible for the selection of CUSIP numbers nor does it make any representation as to the correctness of such numbers on the
Bonds as indicated therein.
BOARD OF DIRECTORS
John Nations, Chairman and Director
Michael G. Herring, President and Director
Gary Earls, Secretary/Treasurer and Director
Charlie A. Dooley, Director
Jeremy Craig, Executive Director
BOND COUNSEL/DISTRICT’S COUNSEL
Armstrong Teasdale LLP
St. Louis, Missouri
UNDERWRITER
A.G. Edwards & Sons, Inc.
St. Louis, Missouri
UNDERWRITER’S COUNSEL
Gilmore & Bell, P.C.
St. Louis, Missouri
TRUSTEE
Wells Fargo Bank, N.A.
Kansas City, Missouri
FINANCIAL ADVISOR
Piper Jaffray & Co.
St. Louis, Missouri
No dealer, broker, salesman or other person has been authorized by the District to give any information or to
make any representations with respect to the Series 2006 Bonds offered hereby other than those contained in this
Official Statement, and, if given or made, such other information or representations must not be relied upon as having
been authorized by any of the foregoing. This 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 Series 2006 Bonds offered hereby by any person in any jurisdiction
in which it is unlawful for such person to make such offer, solicitation or sale. The Underwriter has reviewed the
information in this Official Statement in accordance with, and as part of, its responsibility to investors under the
federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not
guaranty the accuracy or completeness of such information. The information set forth herein has been furnished by
the District and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or
completeness and is not to be construed as a representation by the District. 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
District since the date hereof.
The Series 2006 Bonds have not been registered with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, or under any state securities or “blue sky” laws. The Series 2006 Bonds
are offered pursuant to an exemption from registration with the Securities and Exchange Commission. In
making an investment decision, investors must rely on their own examination of the terms of this offering,
including the merits and risks involved. These securities have not been recommended by any federal or state
securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the
accuracy or determined the adequacy of this document. Any representation to the contrary may be a criminal
offense.
OTHER THAN WITH RESPECT TO INFORMATION CONCERNING THE BOND INSURER
CONTAINED UNDER THE CAPTION “SOURCES OF PAYMENT AND SECURITY FOR THE SERIES
2006 BONDS – THE BOND INSURER” HEREIN AND APPENDIX E HERETO, NONE OF THE
INFORMATION IN THIS OFFICIAL STATEMENT HAS BEEN SUPPLIED OR VERIFIED BY THE BOND
INSURER AND THE BOND INSURER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO (i) THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION; (ii) THE
VALIDITY OF THE SERIES 2006 BONDS; OR (iii) THE TAX STATUS OF THE INTEREST ON THE SERIES
2006 BONDS.
______________________________
CAUTIONARY STATEMENTS REGARDING FORWARDLOOKING STATEMENTS IN THIS OFFICIAL STATEMENT
______________________________
Certain statements included or incorporated by reference in this Official Statement constitute “forwardlooking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995,
Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United
States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such
as “plan,” “expect,” “estimate,” “anticipate,” “projected,” “budget” or other similar words.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN
SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. NEITHER THE DISTRICT NOR ANY OTHER PARTY PLANS TO ISSUE ANY UPDATES
OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN THEIR EXPECTATIONS,
OR EVENTS, CONDITIONS OR CIRCUMSTANCES UPON WHICH SUCH STATEMENTS ARE BASED
OCCUR OTHER THAN AS INDICATED IN “SUMMARY OF THE CONTINUING DISCLOSURE
CERTIFICATE” IN APPENDIX B HERETO.
TABLE OF CONTENTS
Page
Page
INTRODUCTION......................................................1
Purpose of the Official Statement ........................... 1
The District ............................................................. 1
Transportation Development District Sales Tax........1
The Bonds............................................................... 2
Security for the Bonds ............................................ 2
Projected Revenue Collections ............................... 3
Definitions and Summary of Principal Documents ...4
Continuing Disclosure ............................................ 4
THE BONDS ..............................................................4
Authorization; Description of the Bonds ...................4
Registration, Transfer and Exchange of Bonds .........4
Redemption Provisions...............................................5
Payment and Discharge Provisions ............................6
Defeasance Provisions................................................6
Book–Entry Only System...........................................7
SOURCES OF PAYMENT AND SECURITY
FOR THE BONDS .....................................................9
Limited Obligations; Sources of Payment .................9
TDD Sales Tax Revenues and TDD Captured
Revenues .....................................................................9
Indenture Funds and Accounts ................................ 10
The Bond Insurer ..................................................... 12
Additional Bonds ..................................................... 14
ESTIMATED SOURCES AND USES
OF FUNDS ............................................................. 16
THE DISTRICT....................................................... 16
Overview.................................................................. 16
Transportation Development District Sales Tax..... 17
Sales Tax Generators ............................................... 18
Sales Tax Collection Agreement............................. 18
BONDOWNERS’ RISKS ....................................... 18
Nature of the Obligations ........................................ 18
Risk of Non-Appropriation...................................... 19
Financial Feasibility................................................. 19
Reliance on Property Owners, Tenants and
Subsequent Property Owners .................................. 20
No Mortgage of the Transportation Project ............ 20
Limitations on Remedies ......................................... 20
Loss of Premium Upon Early Redemption............. 20
Changes in Market Conditions ................................ 20
Factors Affecting TDD Sales Tax Revenues .......... 21
Projections................................................................ 21
Debt Service Reserve Fund ..................................... 22
Determination of Taxability .................................... 22
Changes in Bond Rating and Secondary Market .... 22
PROJECTED NET REVENUES AND NET DEBT
SERVICE................................................................. 22
THE TRANSPORTATION PROJECT.................. 24
DEVELOPMENT WITHIN THE DISTRICT ....... 24
General ..................................................................... 24
Levee Improvements ............................................... 25
Development in the Valley...................................... 25
Major Employers in the Valley ............................... 33
Major Retailers in the Valley .................................. 33
Spirit Airport............................................................ 33
Retail Competition for the Valley ........................... 34
THE CITY ............................................................... 34
General ..................................................................... 34
Type of Government................................................ 34
Transportation .......................................................... 35
Population and Income Statistics ............................ 36
Employment............................................................. 37
Sales Tax Levy and Collections .............................. 38
ABSENCE OF LITIGATION................................. 38
LEGAL MATTERS ................................................ 38
TAX MATTERS ..................................................... 38
Opinion of Bond Counsel........................................ 38
Original Issue Discount Bonds................................ 39
Other Tax Consequences......................................... 39
UNDERWRITING .................................................. 40
CERTAIN RELATIONSHIPS ............................... 40
PROJECTED REVENUE COLLECTIONS.......... 40
RATINGS ................................................................ 41
MISCELLANEOUS................................................ 41
Appendix A – Projected Revenue Collections
Appendix B – Definitions and Summary of
Principal Documents
Appendix C – Form of Opinion of Bond Counsel
Appendix D – Map of the District and
Redevelopment Area
Appendix E – Specimen of the Bond Insurance
Policy
(i)
(THIS PAGE LEFT BLANK INTENTIONALLY)
OFFICIAL STATEMENT
$22,450,000
SERIES 2006
INTRODUCTION
This introduction is only a brief description and summary of certain information contained in this
Official Statement and is qualified in its entirety by reference to the more complete and detailed information
contained in the entire Official Statement, including the cover page and appendices hereto, and the documents
summarized or described herein. A full review should be made of the entire Official Statement.
Purpose of the Official Statement
The purpose of this Official Statement is to furnish information relating to (1) the Chesterfield Valley
Transportation Development District (the “District”), (2) the District’s Transportation Sales Tax Revenue Bonds,
Series 2006 (the “Series 2006 Bonds” and, together with any additional bonds issued on a parity basis with the
Series 2006 Bonds, the “Bonds”), (3) the transportation projects to be undertaken by the District (collectively, the
“Transportation Project”) and (4) the development within the boundaries of the District. For the definition of
certain capitalized terms used herein and not otherwise defined, see “Appendix B – Definitions and Summary
of Principal Documents” hereto.
The District
The District is a transportation development district and a political subdivision of the State of Missouri,
formed pursuant to the Missouri Transportation Development District Act, Sections 238.200 to 238.275 of the
Revised Statutes of Missouri, as amended (the “TDD Act”). The District has an area of approximately 4,700
acres and was formed for the purpose of funding and constructing the Transportation Project in the City of
Chesterfield, Missouri (the “City”). See “THE TRANSPORTATION PROJECT” herein. Pursuant to the
TDD Act, the District is authorized to impose a sales tax within its boundaries and issue revenue bonds
payable from TDD Sales Tax Revenues (as defined herein) appropriated for such purpose to pay all or any part
of the cost of a “project” under the TDD Act. See the caption “THE DISTRICT” herein.
Transportation Development District Sales Tax
The District has imposed a sales tax (the “TDD Sales Tax”), for a period of up to 25 years from the
date on which such tax is first imposed, which date was March 1, 2006, in the amount of 3/8 of one percent on
all transactions which are taxable pursuant to the TDD Act. The sales tax is imposed on all retail sales made in
the District which are subject to taxation pursuant to the provision of sections 144.010 to 144.525, RSMo, with
certain exceptions listed in the TDD Act. These exceptions include sale or use of motor vehicles, trailers,
boats or outboard motors, sale of electricity or electrical current, water and gas, natural or artificial, and sales
of service to telephone subscribers, whether local or long distance.
Pursuant to the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 to
99.865, inclusive, of the Revised Statutes of Missouri, as amended (the “TIF Act”), the City designated a
redevelopment area (the “Redevelopment Area”) in 1994. The boundaries of the District include the entire
Redevelopment Area and eight residential subdivisions located immediately to the south of the Redevelopment
Area, along a five-mile corridor of Interstate 64/U.S. Highway 40 in west St. Louis County. See APPENDIX
D for a map of the District and the Redevelopment Area.
Pursuant to the TIF Act, 50% of the TDD Sales Tax Revenues generated within the Redevelopment Area
(the “TDD Captured Revenues”) are required to be deposited into the City’s special allocation fund. In 2002, the
City issued $50,945,000 principal amount of Tax Increment Refunding and Improvement Revenue Bonds, Series
2002 (Chesterfield Valley Projects) (the “TIF Bonds”), which are currently outstanding in the principal amount of
$22,825,000. Based on historic deposits into the City’s special allocation fund, the City anticipates that the TIF
Bonds and other obligations payable from the City’s special allocation fund will be repaid in full by October
2008. At such time, the special allocation fund will be terminated and all TDD Captured Revenues will then be
available to the District.
The District has entered into a Sales Tax Collection Agreement with the City (the “Collection
Agreement”) pursuant to which the City will collect, enforce and administer the TDD Sales Tax. The City will
deposit the TDD Sales Tax Revenues in a segregated trust fund (the “TDD Trust Fund”) and the TDD
Captured Revenues into a segregated account in the City’s special allocation fund. Pursuant to the Collection
Agreement, the City may retain a collection fee equal to 1% of the TDD Sales Tax Revenues collected by the
City. Subject to annual appropriation by the District, the TDD Sales Tax Revenues, less $2,084 (increased
each year by a percentage equal to the percentage increase in the Consumer Price Index for the preceding
calendar year) to be deposited each month into an Operating Fund under the Indenture to fund the District’s
operating expenses, are pledged to payment of the Bonds. There is no legal obligation of the District to
appropriate funds as described above.
The Series 2006 Bonds
The Series 2006 Bonds are being issued pursuant to the TDD Act and the Trust Indenture dated as of
October 1, 2006 (the “Indenture”) between the District and Wells Fargo Bank, N.A., Kansas City, Missouri (the
“Trustee”) for the purpose of providing funds to (1) pay a portion of the costs of the Transportation Project,
(2) fund a debt service reserve for the Series 2006 Bonds and (3) pay the costs of issuance of the Series 2006
Bonds. A description of the Bonds is contained in this Official Statement under the caption “THE BONDS.”
All references to the Bonds are qualified in their entirety by the definitive form thereof and the provisions with
respect thereto included in the Indenture.
The Series 2006 Bonds are subject to redemption prior to maturity as described herein. See “THE
BONDS – Redemption Provisions” herein.
Security for the Bonds
The Bonds and the interest thereon are limited obligations of the District, payable solely from Bond
proceeds and Pledged Revenues, as provided in the Indenture. “Pledged Revenues” are all Net Proceeds and all
moneys held in the Project Fund, the Revenue Fund, the Debt Service Fund and the Debt Service Reserve
Fund under the Indenture, together with investment earnings thereon.
“Net Proceeds” means the TDD Sales Tax Revenues that have been appropriated by the District to the
payment of the Bonds less (i) $2,084 (increased each year by a percentage equal to the percentage increase in
the Consumer Price Index for the preceding calendar year) each month which is to be deposited in the
Operating Fund, (ii) 1% of the TDD Sales Tax Revenues, which is retained by the City for the cost of
collecting the TDD Sales Tax, (iii) any amount paid under protest until the protest is withdrawn or resolved
-2-
against the taxpayer and (iv) any sum received by the District which is the subject of a suit or other claim
communicated to the District which suit or claim challenges the collection of such sum.
“TDD Sales Tax Revenues” means the revenues of the TDD Sales Tax imposed by the District under
the Transportation Development District Sales Tax Resolution and collected and deposited by the City in the
Transportation Development District Sales Tax Trust Fund pursuant to the provisions of the Collection
Agreement.
A debt service reserve fund will initially be funded in the amount of $2,023,143.76 from Series 2006
Bond proceeds as additional security for the Series 2006 Bonds. See “SOURCES OF PAYMENT AND
SECURITY FOR THE BONDS–Indenture Funds and Accounts” herein.
THE BONDS ARE NOT SECURED BY A MORTGAGE ON ANY PROPERTY IN THE
DISTRICT.
The Bonds and the interest thereon do not constitute a debt of the District, St. Louis County,
Missouri, the City of Chesterfield, Missouri, the Missouri Highways and Transportation Commission,
the State or any political subdivision thereof, and do not constitute an indebtedness within the meaning
of any constitutional, charter or statutory debt limitation or restriction.
Contemporaneously with the issuance of the Series 2006 Bonds, the Bond Insurer will deliver the
Bond Insurance Policy insuring the timely payment of the principal of and interest on the Series 2006 Bonds.
Projected Revenue Collections
A study entitled “Financial Projections for Chesterfield Valley Tax Increment Financing and
Transportation Development District” dated May, 2006 (the “Projections”) has been prepared by Development
Strategies, Inc., St. Louis, Missouri. A copy of the Projections is attached hereto as Appendix A. See the
caption “PROJECTED REVENUE COLLECTIONS” herein. The District makes no representation or
warranty (express or implied) as to the accuracy or completeness of any financial, technical or statistical data or
any estimates, projections, assumptions or expressions of opinion set forth in the Projections. Pursuant to the
Cooperation Agreement, the Collection Agreement and the Indenture, the amount of such TDD Sales Tax
available to repay the Bonds consists only of the TDD Sales Tax Revenues that have been appropriated by the
District to the payment of the Bonds less (i) $2,084 (increased each year by a percentage equal to the
percentage increase in the Consumer Price Index for the preceding calendar year) per month which is to be
deposited in the Operating Fund, (ii) 1% of the TDD Sales Tax Revenues, which is retained by the City for the
cost of collecting the TDD Sales Tax, (iii) any amount paid under protest until the protest is withdrawn or
resolved against the taxpayer and (iv) any sum received by the District which is the subject of a suit or other
claim communicated to the District which suit or claim challenges the collection of such sum, that have been
appropriated by the District for such purpose.
Pursuant to State law, taxpayers who promptly pay their sales taxes are entitled to retain 2% of the
amount of taxes owed. Because it can not be determined whether the taxpayers in the District will promptly
pay their sales taxes, the Projections do not reflect such retention. However, in forecasting the projected
average life of the Series 2006 Bonds, the Underwriter assumed that all taxpayers would promptly pay their
sales taxes and would retain 2% of the amount of the taxes owed. See “PROJECTED NET REVENUES
AND NET DEBT SERVICE” herein.
-3-
Definitions and Summary of Principal Documents
Definitions of certain words and terms used in this Official Statement and a summary of certain
provisions of the Indenture, the Continuing Disclosure Certificate, the Collection Agreement and the Cooperation
Agreement are included in this Official Statement in Appendix B hereto. Such definitions and summaries do not
purport to be comprehensive or definitive. All references herein to the Indenture, the Continuing Disclosure
Certificate, the Collection Agreement and the Cooperation Agreement are qualified in their entirety by reference
to the definitive forms of such documents, copies of which may be obtained from A.G. Edwards & Sons, Inc.,
One North Jefferson, St. Louis, Missouri 63103.
Continuing Disclosure
The District will execute a Continuing Disclosure Certificate in accordance with Rule 15c2-12
promulgated by the Securities and Exchange Commission, pursuant to which the District will agree to provide
disclosure of certain financial and operating information on an ongoing basis, including (a) audited annual
financial statements and certain annual operating information pertaining to the District and (b) notice of the
occurrence of certain specified events, if material. See “Summary of the Continuing Disclosure Certificate”
in APPENDIX B hereto.
THE BONDS
The following is a summary of certain terms and provisions of the Bonds. Reference is hereby made to
the Bonds and the provisions with respect thereto in the Indenture for the detailed terms and provisions thereof.
Authorization; Description of the Bonds
The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the
State of Missouri, including particularly Section 238.240 of the TDD Act. The Bonds will be issuable as fully
registered bonds, without coupons. Purchases of the Bonds will be made in book–entry form only (as described
below) in denominations of $5,000 or any integral multiple in excess thereof. Purchasers of the Bonds will not
receive certificates representing their interests in the Bonds purchased. The Series 2006 Bonds will be dated as of
the date of initial issuance and delivery thereof, and will mature on the dates and in the principal amounts set
forth on the inside cover page of this Official Statement. The Series 2006 Bonds will bear interest at the rates per
annum set forth on the cover page hereof, which interest will be payable semiannually on April 15 and
October 15 in each year, beginning on April 15, 2007.
Registration, Transfer and Exchange of Bonds
Any Bond may be transferred only upon the Register upon surrender thereof to the Trustee duly
endorsed for transfer or accompanied by an assignment duly executed by the Owner or his attorney or legal
representative in such form as shall be satisfactory to the Trustee. Upon any such transfer, the District shall
execute and the Trustee shall authenticate and deliver in exchange for such Bond a new fully registered Bond
or Bonds, registered in the name of the transferee, of any denomination or denominations authorized by the
Indenture. Any Bond, upon surrender thereof at the principal corporate trust office of the Trustee, together
with an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be
satisfactory to the Trustee, may, at the option of the Owner thereof, be exchanged for Bonds of the same
maturity, of any denomination or denominations authorized by the Indenture, bearing interest at the same rate,
and registered in the name of the Owner.
The District or the Trustee may make a charge against each Owner requesting a transfer or exchange
of Bonds for every such transfer or exchange of Bonds sufficient to reimburse it for any tax or other
-4-
governmental charge required to be paid with respect to such transfer or exchange, the cost of printing, if any,
each new Bond issued upon any transfer or exchange and the reasonable expenses of the District and the
Trustee in connection therewith, and such charge shall be paid before any such new Bond shall be delivered.
The Trustee may levy a charge against an Owner sufficient to reimburse it for any governmental charge
required to be paid in the event the Owner fails to provide a correct taxpayer identification number to the
Trustee. Such charge may be deducted from amounts otherwise payable to such Owner.
Redemption Provisions
Optional Redemption. The Series 2006 Bonds maturing on April 15, 20___ and thereafter are subject
to optional redemption by the District on and after April 15, 20__, in whole or in part at any time at the
redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the redemption
date.
Special Mandatory Redemption.
(1)
The Series 2006 Bonds maturing on April 15, 2026 are subject to special mandatory
redemption by the District on each April 15, commencing on the first April 15 on which no TIF Bonds
are outstanding (as evidenced by a written certificate of the City delivered to the Trustee), at the
redemption price of 100% of the principal amount being redeemed, plus accrued interest to the
redemption date, in an amount equal to the amount that is on deposit in the Redemption Account of the
Debt Service Fund 40 days prior to each Payment Date (or if such date is not a Business Day, the
immediately preceding Business Day).
(2)
The Bonds are subject to special mandatory redemption by the District, in whole but
not in part, on any date if moneys in the Transportation Development District Sales Tax Trust Fund, the
Revenue Fund, the Debt Service Fund and the Debt Service Reserve Fund are sufficient to redeem all of
the Bonds at a redemption price of 100% of the principal amount thereof, plus accrued interest to the
redemption date.
Selection of Bonds to be Redeemed. Bonds shall be redeemed only in Authorized Denominations.
Except in the case of special mandatory redemption of any Bonds, when less than all of the Outstanding Bonds
are to be redeemed and paid prior to maturity, such Bonds or portions of Bonds to be redeemed shall be
selected in Authorized Denominations by the Trustee in such equitable manner as it may determine.
In the case of a partial redemption of Bonds when Bonds of denominations greater than the minimum
Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each
Authorized Denomination unit of face value shall be treated as though it was a separate Bond of the
denomination of the minimum Authorized Denomination. If one or more, but not all, of the minimum
Authorized Denomination units of principal amount represented by any Bond are selected for redemption, then
upon notice of intention to redeem such minimum Authorized Denomination unit or units, the Owner of such
Bond or his attorney or legal representative shall forthwith present and surrender such Bond to the Trustee
(i) for payment of the redemption price (including the interest to the date fixed for redemption) of the
minimum Authorized Denomination unit or units of principal amount called for redemption, and (ii) for
exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of
the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond of a
denomination greater than minimum Authorized Denomination fails to present such Bond to the Trustee for
payment and exchange as aforesaid, said Bond shall, nevertheless, become due and payable on the redemption
date to the extent of the minimum Authorized Denomination unit or units of principal amount called for
-5-
redemption (and to that extent only) and shall cease to accrue interest on the principal amount so called for
redemption.
Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed,
official notice of the optional redemption of any Bond shall be given by the Trustee on behalf of the District by
mailing a copy of an official redemption notice by first class mail, postage prepaid, at least 30 days but not
more than 60 days prior to the date fixed for redemption to the Owner of the Bond or Bonds to be redeemed at
the address shown on the Register; provided, however, that failure to give such notice by mailing as aforesaid
to any Owner or any defect therein as to any particular Bond shall not affect the validity of any proceedings for
the redemption of any other Bonds.
On or prior to the date fixed for redemption, the District shall deposit moneys or Government
Securities with the Trustee as provided in the Indenture to pay the Bonds called for redemption and accrued
interest thereon to the redemption date. Upon the happening of the above conditions, and notice having been
given as provided in the Indenture, the Bonds or the portions of the principal amount of Bonds thus called for
redemption shall cease to bear interest on the specified redemption date, provided moneys sufficient for the
payment of the redemption price are on deposit at the place of payment at the time, and shall no longer be
entitled to the protection, benefit or security of the Indenture and shall not be deemed to be Outstanding under
the provisions of the Indenture.
Payment and Discharge Provisions
When the principal of and interest on all the Bonds have been paid in accordance with their terms or
provision has been made for such payment, as provided in the Indenture, and provision also is made for paying
all other sums payable under the Indenture, including the fees and expenses of the Trustee and the Paying
Agent to the date of payment of the Bonds, then the right, title and interest of the Trustee under the Indenture
shall thereupon cease, determine and be void, and thereupon the Trustee shall cancel, discharge and release the
Indenture and shall execute, acknowledge and deliver to the District such instruments of satisfaction and
discharge or release as shall be required to evidence such release and the satisfaction and discharge of the
Indenture, and shall assign and deliver to the District any property at the time subject to the Indenture which
may then be in the Trustee’s possession, except funds or securities in which such moneys are invested and held
by the Trustee for the payment of the principal of and interest on the Bonds.
Defeasance Provisions
Bonds shall be deemed to be paid within the meaning of the Indenture when payment of the principal
on such Bonds, plus premium, if any, plus interest thereon to the due date thereof (whether such due date is by
reason of maturity or upon redemption as provided in the Indenture, or otherwise), either (1) has been made or
caused to be made in accordance with the terms of the Indenture, or (2) provision therefor has been made by
depositing with the Trustee, in trust and irrevocably setting aside exclusively for such payment, (i) moneys
sufficient to make such payment or (ii) non-callable Government Securities maturing as to principal and
interest in such amount and at such times as will ensure the availability of sufficient moneys to make such
payment and, if payment is to be made more than 90 days after deposit thereof with the Trustee, the Trustee
shall have received an Opinion of Bond Counsel (which opinion may be based upon a ruling or rulings of the
Internal Revenue Service) to the effect that such deposit will not cause the interest on such Bonds to be
included in gross income for purposes of federal income taxation. If the entire amount necessary to pay
Outstanding Bonds has not been deposited with the Trustee, the Trustee shall receive a verification report of a
firm of independent certified public accountants that the moneys and Government Securities deposited with the
Trustee are sufficient to pay when due the principal or redemption price, if any, and interest on the Bonds on or
prior to the applicable redemption or maturity date. At such time as a Bond is deemed to be paid under the
Indenture, such Bond shall no longer be secured by or be entitled to the benefits of the Indenture, except for
the purposes of any such payment from such moneys or Government Securities.
-6-
In the event that the principal and/or interest due on the Series 2006 Bonds shall be paid by the Bond
Insurer pursuant to the Bond Insurance Policy, the Series 2006 Bonds shall remain Outstanding for all
purposes, not be defeased or otherwise satisfied and shall not be considered paid by the District, and the
assignment and pledge of the Trust Estate and all covenants, agreements and other obligations of the District to
the registered owners shall continue to exist and shall run to the benefit of the Bond Insurer and the Bond
Insurer shall be subrogated to the rights of such registered owners including, without limitation, any rights that
such owners may have in respect to securities law violations arising from the offer and sale of the Series 2006
Bonds.
Book–Entry Only System
General. When the Bonds are issued, ownership interests will be available to purchasers only through
a book-entry only system (the “Book-Entry Only System”) maintained by The Depository Trust Company
(“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Initially, the Bonds will
be issued as fully-registered securities 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 for each maturity of the Bonds will be issued, in the aggregate principal amount of such maturity,
and will be deposited with DTC or the Trustee as its “FAST” agent. The following discussion will not apply
to any Bonds issued in certificate form due to the discontinuance of the DTC Book-Entry Only System, as
described below.
DTC and its Participants. DTC, the world’s largest 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, as amended. DTC holds and provides asset servicing for
over 2.2 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, in turn, is owned by a number of Direct Participants of DTC and
members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, MBS Clearing
Corporation and Emerging Markets Clearing Corporation (“NSCC,” “GSCC,” “FICC” and “EMCC,” also
subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC
and the National Association of Securities Dealers, Inc. 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 or maintain a custodial relationship with a Direct Participant, either directly or
indirectly (the “Indirect Participants” and, collectively with the Direct Participants, the “Participants”). DTC
has Standard & Poor’s highest rating: AAA. 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 and
www.dtc.org.
Purchase of Ownership Interests. Purchases of the 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 (the “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
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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 interest in the
Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
So long as Cede & Co., as nominee of DTC, is the registered owner of any of the Bonds, the
Beneficial Owners of such Bonds will not receive or have the right to receive physical delivery of the Bonds,
and references herein to the registered owners of such Bonds shall mean Cede & Co. and shall not mean the
Beneficial Owners of such Bonds.
Transfers. 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 the Bonds with DTC and their registration in the name of
Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge
of the actual Beneficial Owners of the 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.
Notices. 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.
Redemption notices shall be sent to DTC. If less than all of the Bonds are being redeemed, DTC’s
practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect
to the Bonds unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to the Trustee as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose
accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Payments of Principal and Interest. So long as any Bond is registered in the name of DTC’s
nominee, all payments of principal of, premium, if any, and interest on such Bond 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
the District or the Trustee, on the payable date in accordance with their respective holdings shown on DTC’s
records. Payments by Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of customers in bearer form or
registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee,
the Trustee or the District, subject to any statutory and regulatory requirements as may be in effect from time
to time. Payment of principal of, premium, if any, and interest on the Bonds to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or
the Trustee, disbursement of such payments to Direct Participants is the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
-8-
Discontinuation of Book-Entry Only System. DTC may discontinue providing its services as
depository with respect to the Bonds at any time by giving reasonable notice to the District or the Trustee.
Under such circumstances, in the event that a successor depository is not obtained, bond certificates are
required to be printed and delivered as described in the Indenture.
The use of the system of book-entry transfers through DTC (or a successor securities depository) may
be discontinued as described in the Indenture. In that event, bond certificates will be printed and delivered as
described in the Indenture.
None of the Underwriter, the Trustee nor the District will have any responsibility or obligations to any
Direct Participants or Indirect Participants or the persons for whom they act with respect to (i) the accuracy of
any records maintained by DTC or any such Direct Participant or Indirect Participant; (ii) the payment by any
Participant of any amount due to any Beneficial Owner in respect of the principal of, premium, if any, or
interest on the Bonds; (iii) the delivery by any such Direct Participant or Indirect Participant of any notice to
any Beneficial Owner that is required or permitted under the terms of the Indenture to be given to owners of
the Bonds; (iv) the selection of the Beneficial Owners to receive payment in the event of any partial
redemption of the Bonds; or (v) any consent given or other action taken by DTC as Bondholder.
The information above concerning DTC and DTC’s book-entry system has been obtained from
sources that the District believes to be reliable, but is not guaranteed as to accuracy or completeness by and is
not to be construed as a representation by the District, the Trustee or the Underwriter. The District, the
Trustee and the Underwriter make no assurances that DTC, Direct Participants, Indirect Participants or other
nominees of the Beneficial Owners will act in accordance with the procedures described above or in a timely
manner.
SOURCES OF PAYMENT AND SECURITY FOR THE BONDS
Limited Obligations; Sources of Payment
The Bonds and the interest thereon are limited obligations of the District, payable solely from Bond
proceeds and Pledged Revenues as provided in the Indenture.
The Bonds are not secured by a mortgage on any property in the District.
The Bonds and the interest thereon do not constitute a debt of the District, the City of
Chesterfield, Missouri, St. Louis County, Missouri, the Missouri Highways and Transportation
Commission, the State or any political subdivision thereof, and do not constitute an indebtedness within
the meaning of any constitutional, charter or statutory debt limitation or restriction.
TDD Sales Tax Revenues and TDD Captured Revenues
The District has imposed for a period of up to 25 years from the date on which such tax is first
imposed, which date was March 1, 2006, a 3/8 of one percent sales tax (the “TDD Sales Tax”) on all
transactions which are taxable pursuant to the TDD Act. The retail establishments located within the District
will collect the TDD Sales Tax and forward the TDD Sales Tax to the City. Pursuant to State law, taxpayers
who promptly pay their sales taxes are entitled to retain 2% of the amount of taxes owed.
Pursuant to the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 to
99.865, inclusive, of the Revised Statutes of Missouri, as amended (the “TIF Act”), the City designated a
redevelopment area (the “Redevelopment Area”) in 1994. The boundaries of the District include the entire
Redevelopment Area and eight residential subdivisions located immediately to the south of the Redevelopment
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Area, along a five-mile corridor of Interstate 64/U.S. Highway 40 in west St. Louis County. See APPENDIX
D for a map of the District and the Redevelopment Area.
Pursuant to the TIF Act, 50% of the TDD Sales Tax Revenues generated within the Redevelopment Area
(the “TDD Captured Revenues”) are required to be deposited into the City’s special allocation fund. In 2002, the
City issued $50,945,000 principal amount of Tax Increment Refunding and Improvement Revenue Bonds, Series
2002 (Chesterfield Valley Projects) (the “TIF Bonds”), which are currently outstanding in the principal amount of
$22,825,000. Based on historic deposits into the City’s special allocation fund, the City anticipates that the TIF
Bonds and other obligations payable from the City’s special allocation fund will be repaid in full by October
2008. At such time, the special allocation fund will be terminated and all TDD Captured Revenues will be
available to the District.
The District will enter into an Intergovernmental Cooperation Agreement among the District, the City
and St. Louis County, Missouri and a Sales Tax Collection Agreement (the “Collection Agreement”) between
the District and the City pursuant to which the City will collect, enforce and administer the TDD Sales Tax.
The City will deposit the proceeds of the TDD Sales Tax Revenues in the TDD Trust Fund and deposit in the
TDD Captured Revenues into a segregated account in the City’s special allocation fund. Pursuant to the
Collection Agreement, the City may retain a collection fee equal to 1% of the TDD Sales Tax Revenues
collected by the City. Subject to annual appropriation by the District, the TDD Sales Tax Revenues, less
$2,084 (increased each year by a percentage equal to the percentage increase in the Consumer Price Index for
the preceding calendar year) to be deposited each month into an Operating Fund under the Indenture to fund
the District’s operating expenses, are pledged to payment of the Bonds. There is no legal obligation of the
District to appropriate funds as described above.
The District has adopted a budget for the 2006 Fiscal Year which appropriates the TDD Sales Taxes
Revenues collected during such Fiscal Year for payment of the Series 2006 Bonds. In the Indenture, the
District covenants and agrees that the officer of the District at any time charged with the responsibility of
formulating budget proposals is directed to include in the budget proposal submitted to the District Board of
Directors for each Fiscal Year a request for an appropriation of the TDD Sales Taxes Revenues collected
during such Fiscal Year for payment of the Bonds. Any funds appropriated as the result of such a request are
pledged by the District for such purpose and shall be transferred by the District to the Trustee for deposit into
the Revenue Fund at the times and in the manner provided in the Indenture.
The Indenture provides that, if the District Board of Directors has failed to adopt a budget by the first
day of a Fiscal Year, the budget for the prior Fiscal Year shall be deemed to have been approved for the next
Fiscal Year.
Pursuant to the TDD Act, no transportation development district may repeal or amend its sales tax
unless such repeal or amendment will not impair the district’s ability to repay any liabilities which it has
incurred, money which it has borrowed or revenue bonds, notes or other obligations which it has issued.
Indenture Funds and Accounts
Revenue Fund. In the Indenture, the District ratifies and confirms the establishment of the TDD Sales
Tax Fund –Chesterfield Valley Transportation Development District which has been established by the
District. Pursuant to the provisions of the Cooperation Agreement, the District has agreed to pay, on the
fifteenth calendar day of each month (or the next Business Day thereafter if the fifteenth day is not a Business
Day), to the Trustee for deposit in the TDD Sales Tax Revenues Account of the Revenue Fund, the TDD Sales
Tax Revenues to the extent appropriated by the District for such purpose.
The foregoing provisions shall not be construed to impose any legal obligation on the District to
appropriate moneys for the payment of the Bonds.
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The Trustee shall notify the District and the Original Purchaser if the Trustee has not received such
funds on or before the seventeenth calendar day of each month (or the next Business Day thereafter if the
seventeenth calendar day is not a Business Day).
Moneys in the Revenue Fund on the 40th day (except as otherwise provided below) prior to each
Payment Date (or if such date is not a Business Day, the immediately preceding Business Day) shall be applied
by the Trustee to the extent necessary for the purposes and in the amounts as follows:
First, for transfer to the Operating Fund, the sum of $2,084 (increased each year by a
percentage equal to the percentage increase in the Consumer Price Index for the preceding calendar
year) on the first day of each month;
Second, for transfer to the Rebate Fund when necessary, an amount sufficient to pay rebate, if
any, to the United States of America, owed under Section 148 of the Code, as directed in writing by
the District in accordance with the Tax Compliance Agreement;
Third, for transfer to the Bond Payment Account of the Debt Service Fund an amount
sufficient to pay the interest on the Bonds on the next succeeding Payment Date;
Fourth, for transfer to the Bond Payment Account of the Debt Service Fund an amount
sufficient to pay the principal of and premium, if any, due on the Bonds by their terms on the next
succeeding Payment Date;
Fifth, for transfer to the Debt Service Reserve Fund such amount as may be required to
restore any deficiency in the Debt Service Reserve Fund if the amount on deposit in the Debt Service
Reserve Fund is less than the Debt Service Reserve Requirement;
Sixth, pay to the Trustee or any Paying Agent, an amount sufficient to pay any fees and
expenses which are due and owing to the Trustee or any Paying Agent, upon delivery to the District of
an invoice for such amounts (provided, however, that payments to the Trustee may not exceed $2,400
in any calendar year);
Seventh, if no TIF Bonds are outstanding (as evidenced by a written certificate of the City
delivered to the Trustee) for transfer to the Future Projects Account of the Project Fund up to
$500,000 annually until the amount on deposit in such Account totals $2,000,000; and
Eighth, if no TIF Bonds are outstanding (as evidenced by a written certificate of the City
delivered to the Trustee), for transfer to the Redemption Account of the Debt Service Fund, any
remaining funds, which shall be applied to the payment of the principal of and accrued interest on all
Bonds which are subject to redemption on the next succeeding Payment Date. See the caption “THE
BONDS–Redemption Provisions–Special Mandatory Redemption” herein.
Upon the payment in full of the principal of and interest on the Bonds (or provision has been made for
the payment thereof as specified in the Indenture) and the fees, charges and expenses of the Trustee and any
Paying Agents, and any other amounts required to be paid under the Indenture, all amounts remaining on
deposit in the TDD Sales Tax Revenue Account of the Revenue Fund shall be paid to the District for deposit
into the Transportation Development District Sales Tax Trust Fund.
Debt Service Fund. Except as otherwise provided in the Indenture, all amounts paid and credited to
the Debt Service Fund shall be expended solely for the payment of the principal of, redemption premium, if
any, and interest on the Bonds as the same mature and become due or upon the redemption thereof.
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The Trustee shall use any moneys remaining in the Debt Service Fund to redeem all or part of the
Bonds Outstanding and interest to accrue thereon prior to such redemption, in accordance with and to the
extent permitted by the Indenture, so long as said moneys are in excess of the amount required for payment of
Bonds theretofore matured or called for redemption. The Trustee, upon the written instructions from the
District, signed by the Authorized District Representative, shall use moneys in the Redemption Account of the
Debt Service Fund on a best efforts basis for the purchase of Bonds in the open market to the extent practical
for the purpose of cancellation at prices not exceeding the principal amount thereof plus accrued interest
thereon to the date of such purchase.
If the moneys in the Debt Service Fund are insufficient to pay all accrued interest on the Bonds on any
Payment Date, then such moneys shall be applied ratably, according to the amounts due on such installment, to
the persons entitled thereto without any discrimination or privilege, and any unpaid portion shall accrue to the
next Payment Date, with interest thereon at the rate or rates specified in the Bonds to the extent permitted by
law. If the moneys in the Debt Service Fund are insufficient to pay the principal of the Bonds on the maturity
date thereof, then such moneys shall be applied ratably, according to the amounts of principal due on such
date, to the persons entitled thereto without any discrimination or privilege.
Debt Service Reserve Fund. Amounts in the Debt Service Reserve Fund are to be used to pay principal
of and interest on the Bonds to the extent of any deficiency in the Debt Service Fund and to retire the last
Outstanding Bonds.
Project Fund. Moneys in the Cost of Issuance Account of the Project Fund shall be disbursed, from
time to time by the Trustee, upon the written request of the District, for the sole purpose of paying costs of
issuance of the Bonds. Any moneys remaining in the Cost of Issuance Account of the Project Fund on April
15, 2007 shall be deposited, without further authorization, into the Project Account of the Project Fund.
Moneys in the Project Account of the Project Fund shall be disbursed by the Trustee from time to time, upon
the written request of the Authorized District Representative, to pay, or reimburse the District for payment of,
the costs of the Transportation Project. Any moneys remaining on deposit in the Project Account of the
Project Fund when the portion of the Transportation Project financed with the proceeds of the Series 2006
Bonds is completed, as evidenced by a certificate delivered by the Authorized District Representative to the
Trustee, shall immediately be transferred by the Trustee to the Redemption Account in the Debt Service Fund
and used to redeem Series 2006 Bonds pursuant to the Indenture. See “THE BONDS–Redemption
Provisions–Special Mandatory Redemption” herein. Money in the Future Projects Account of the Project
Fund may be used to pay any of the following: (i) costs of the Project, (ii) costs of any Additional Project, and
(iii) debt service on the Bonds. The money in the Future Projects Account shall be disbursed by the Trustee
from time to time, upon receipt of a written request of the Authorized District Representative. After payment
in full of the principal of and interest on the Bonds (or provision has been made for the payment thereof as
specified in the Indenture), and the fees, charges and expenses of the Trustee and any Paying Agents and any
other amounts required to be paid under the Indenture, all amounts remaining in the Future Projects Account
shall be paid to the District for deposit into the Transportation Development District Sales Tax Trust Fund.
Operating Fund. Money in the Operating Fund shall be disbursed by the Trustee from time to time
upon receipt of a written request of the Authorized District Representative to pay the costs of operating the
District, maintaining the Transportation Project, paying the principal of or interest on the Bonds or any other
lawful purpose of the District.
The Bond Insurer
The following information has been supplied by the Bond Insurer for inclusion in this Official
Statement. No representation is made by the District or the Underwriter as to the accuracy or completeness of
the information.
-12-
CIFG Assurance North America, Inc.
The information set forth in the following paragraphs has been provided by CIFG Assurance North
America, Inc (“CIFG’ or the “Insurer”) for inclusion in this Official Statement. CIFG does not accept any
responsibility for the accuracy or completeness of this Official Statement or any information or disclosure
contained herein or omitted herefrom, other than with respect to the accuracy of the information regarding
CIFG set forth under the heading “The Bond Insurer.” CIFG makes no representation regarding the Bonds
or the advisability of investing in the Bonds.
General
CIFG is a monoline financial guaranty insurance company incorporated under the laws of the State of
New York. The address of the principal executive offices of the Insurer is 825 Third Avenue, Sixth Floor,
New York New York 10022, its toll-free telephone number is (866) CIFG–212 and its general telephone
number is (212) 909–3939 and its website is located at www.cifg.com.
The Insurer is a member of the CIFG Group of financial guaranty companies, which also includes
CIFG Europe, a French insurance company licensed to do business in the European Union, and CIFG
Guaranty, a dedicated French reinsurance corporation. In addition to its capital and surplus as set forth below,
the Insurer is supported by a net worth maintenance agreement from CIFG Guaranty, which provides that
CIFG Guaranty will maintain the Insurer’s New York statutory capital and surplus at no less than $80 million,
and may cede a substantial portion (not to exceed 90%) of its exposure on each transaction to CIFG Guaranty
through a facultative reinsurance agreement
Each of the Insurer, CIFG Europe and CIFG Guaranty has received an insurer financial strength rating
of “AAA” from Fitch, an insurer financial strength rating of “Aaa” from Moody’s and an insurer financial
enhancement rating of “AAA” from Standard and Poor’s, the highest rating assigned by each rating agency.
Each such rating should be evaluated independently. The ratings reflect the respective rating agency’s current
assessment of each company’s capacity to pay claims on a timely basis and are not recommendations to buy,
sell or hold the Bonds. Such ratings may be subject to revision or withdrawal at any time.
The Insurer is licensed and subject to regulation as a financial guaranty insurance corporation under
the laws of the State of New York, its state of domicile, and is licensed to do business in 46 jurisdictions. The
Insurer is subject to Article 69 of the New York Insurance Law which, among other things, limits the business
of such insurers to financial guaranty insurance and related lines, requires that such insurers maintain a
minimum surplus to policyholders, establishes contingency, loss and unearned premium reserve requirements
for such insurers, and limits the size of individual transactions and the volume of transactions that may be
underwritten by such insurers. Other provisions of the New York Insurance Law applicable to non–life
insurance companies such as the Insurer regulate, among other things, permitted investments, payment of
dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of
liabilities for borrowings.
Capitalization
The following tables set forth the capitalization of the Insurer on the basis of accounting principles
generally accepted in the United States (“US GAAP”) and statutory accounting practices prescribed or
permitted by the New York State Insurance Department, respectively.
-13-
US GAAP
June 30,2006
(in thousands of US dollars)
Total Assets…………..
Total Liabilities………
Shareholder’s Equity…
.
$349,385
$229,913
$119,472
US GAAP
December 31, 2005
.
Statutory Accounting
Principles June 30, 2006
Admitted Assets….
$177,546
Liabilities…………
$70,845
Capital and Surplus.
$106,701
$324,134
$202,042
$122,092
Statutory Accounting
Practices December 31, 2005
$175,333
$66,758
$108,575
The following table sets forth the capitalization of CIFG Guaranty on the basis of US GAAP.
US GAAP
December 31, 2005
(in thousands of euros)
(in thousands of US dollars)1
€ 736,208
$ 871,634
€ 196,794
$ 232,995
€ 539,414
$ 638,639
Assets…………………………….
Liabilities…………………………
Shareholders’ Equity……………..
___________________________
1
The translation of euros into dollars is presented solely for the convenience of the reader, using the
observed exchange rate at December 31, 2005 of $1.18395 to €1.00. The convenience translation should
not be construed as representation that the euro amounts have been, could have been, or in the future could
be, converted into U.S. Dollars at this or any rate of exchange.
For further information concerning the Insurer and CIFG Guaranty see the audited financial statements of both
companies, including the respective notes thereto, prepared in accordance with US GAAP as of December 31,
2005 and 2004 and for each of the three years in the period ended December 31, 2005, and the unaudited
interim financial statements of the Insurer as of June 30, 2006 and for the six-month period ended June 30,
2006, which are available on the CIFG Group’s website at www.cifg.com. Copies of the most recent audited
annual and unaudited interim financial statements of the Insurer prepared in accordance with accounting
principles prescribed or permitted by the New York State Insurance Department, are also available on the
website and may be obtained, without charge, upon request to the Insurer at its address above Attention:
Finance Department.
Additional Bonds
Additional Bonds may be issued by the District under the Indenture upon compliance with the
conditions set forth in the Indenture for any purpose authorized under the TDD Act.
Before any Additional Bonds are issued under the provisions of the Indenture, the District shall adopt
a resolution (1) authorizing the issuance of such Additional Bonds, fixing the principal amount thereof, and
describing the purpose or purposes for which such Additional Bonds are being issued, (2) authorizing the
District to enter into a Supplemental Indenture for the purpose of issuing such Additional Bonds and
establishing the terms and provisions of such series of Additional Bonds, including securing such Additional
Bonds with reserve funds or other credit enhancement which does not secure other Bonds Outstanding, and the
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form of such series of Additional Bonds, and (3) providing for such other matters as are appropriate because of
the issuance of the Additional Bonds, which matters, in the reasonable and good faith judgment of the District,
are not prejudicial to the owners of the Bonds previously issued.
Such Additional Bonds shall have the same Payment Dates and the same general title as the
Series 2006 Bonds, except for an identifying series letter or date, and shall be dated, shall mature on such
dates, shall be numbered, shall bear interest at such rates not exceeding the maximum rate then permitted by
law payable at such times, and shall be redeemable at such times and prices (subject to the provisions of the
Indenture relating to the redemption of Bonds), all as provided by the Supplemental Indenture authorizing the
issuance of such Additional Bonds. Except as to any difference in the date, the maturities, the rates of interest
or the provisions for redemption, such Additional Bonds may be on a parity with and shall be entitled to the
same benefit and security of the Indenture as the Series 2006 Bonds and any other Additional Bonds issued on
a parity with the Series 2006 Bonds, upon compliance with the terms of the Indenture described below.
Such Additional Bonds shall be executed in the manner set forth in the Indenture and shall be
deposited with the Trustee for authentication, but prior to or simultaneously with the authentication and
delivery of such Additional Bonds by the Trustee, and as a condition precedent thereto, there shall be filed
with the Trustee the following:
(a)
A copy, certified by the secretary of the board of directors of the District, of the resolution
adopted by the District authorizing the issuance of such Additional Bonds and the execution of the
Supplemental Indenture and supplements to any other documents as may be necessary.
(b)
An original executed counterpart of the Supplemental Indenture, executed by the District and
the Trustee, authorizing the issuance of the Additional Bonds, specifying, among other things, the terms
thereof, and providing for the disposition of the proceeds of such Bonds.
(c)
A certificate of the District (i) stating that no event of default under the Indenture has
occurred and is continuing and that no event has occurred and is continuing which with the lapse of time or
giving of notice, or both, would constitute such an event of default, and (ii) stating the purpose or purposes for
which such Additional Bonds are being issued.
(d)
A request and authorization to the Trustee executed by the District to authenticate the
Additional Bonds and deliver said Additional Bonds to or upon the order of the purchasers therein identified
upon payment to the Trustee, for the account of the District, of the purchase price thereof. The Trustee shall be
entitled to rely conclusively upon such request and authorization as to the names of the purchasers and the
amounts of such purchase price.
(e)
An Opinion of Bond Counsel to the effect that all requirements for the issuance of such
Additional Bonds have been met, that such Additional Bonds constitute valid and legally binding obligations
of the District and the issuance of such Additional Bonds will not result in the interest on any Bonds then
Outstanding and exempt from taxation for federal income tax purposes becoming subject to federal income
taxes then in effect.
(f)
Such other certificates, statements, opinions, receipts and documents required by the
Indenture and any Supplemental Indenture or as the District or the Trustee shall reasonably require for the
delivery of the Additional Bonds.
When the documents specified above have been filed with the Trustee, and when such Additional
Bonds have been executed and authenticated as required by the Indenture, the Trustee shall deliver such
Additional Bonds to or upon the order of the purchasers thereof, but only upon payment to the Trustee of the
purchase price of such Additional Bonds. The proceeds of the sale of such Additional Bonds, including
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accrued interest and premium thereon, if any, shall be immediately paid over to the Trustee and shall be
deposited and applied by the Trustee as provided in the Indenture and in the Supplemental Indenture
authorizing the issuance of such Additional Bonds.
Subject to the terms of the Indenture, Additional Bonds may be issued on a parity with the Series 2006
Bonds only upon delivery to the Trustee and the District of a third party consultant’s report (which consultant
must be reasonably approved in writing by the District) demonstrating that either: (a) the Historical Debt
Service Coverage Ratio for the most recent full calendar year was not less than 1.40, or (b) the Historical Debt
Service Coverage Ratio (calculated for Outstanding Bonds only) for the most recent full calendar year was not
less than 1.40 and the Projected Debt Service Coverage Ratio will not be less than 1.50.
Except as described above, the District will not otherwise issue any obligations on a parity with the
Series 2006 Bonds, but the District may issue other obligations specifically subordinate and junior to the
Bonds so that if at any time the District is in default in paying either principal of or interest on the Bonds, the
District shall make no payments of either principal of or interest on said junior obligations until such default or
defaults be cured.
ESTIMATED SOURCES AND USES OF FUNDS
Following is a summary of the anticipated sources and uses of funds in connection with the issuance of
the Series 2006 Bonds:
Sources of Funds:
Net proceeds of the Series 2006 Bonds........................................................................ $____________
Available Revenues of the District...............................................................................
Total sources of funds ............................................................................................. $
Uses of Funds:
Deposit to the Project Account of the Project Fund..................................................... $
Deposit to Debt Service Reserve Fund ........................................................................
Underwriter’s Discount ................................................................................................
Other Costs of Issuance+ ............................................................................................... ____________
Total uses of funds .................................................................................................. $
____________________
+
Includes premium for the Bond Insurance Policy.
THE DISTRICT
Overview
The District is a transportation development district and a political subdivision of the State of Missouri,
formed under the Missouri Transportation Development District Act, Sections 238.200 to 238.275 of the Revised
Statutes of Missouri, as amended (the “TDD Act”). The Circuit Court of St. Louis County, Missouri declared the
District organized on November 28, 2005.
The TDD Act vests all power of the District in a Board of Directors whose members are the presiding
officers of each local transportation authority within the District (i.e., the County Executive of St. Louis County
and the Mayor of the City of Chesterfield) and one person designated by the governing body of each such local
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transportation authority. Upon the assumption of office of a new presiding officer of a local transportation
authority, such individual shall automatically succeed his predecessor as a member of the Board of Directors.
Each director serves without compensation and may be removed by the District with cause. The by–laws of the
District provide for the annual election of officers. The current directors and officers of the District are as
follows:
Name
Office
Principal Employment
John Nations
Michael G. Herring
Gary Earls
Chairman & Director
President & Director
Secretary/Treasurer & Director
Charlie A. Dooley
Director
Mayor, City of Chesterfield, Missouri
City Administrator, City of Chesterfield, Missouri
Director, St. Louis County Department of Highways
and Traffic
County Executive, St. Louis County, Missouri
Under the TDD Act, the District also has an advisory member appointed by the transportation
authorities under the TDD Act, which is the public entity with jurisdiction over and which will accept
dedication of the transportation improvements which constitute the Transportation Project on completion.
The current advisory member of the District is as follows:
Name
Karen Yeomans
Appointing Authority
Principal Employment
Missouri Department of Transportation
Missouri Department of Transportation
Transportation Development District Sales Tax
The District has imposed a sales tax (the “TDD Sales Tax”), for a period of up to 25 years from the
date on which such tax is first imposed, which date was March 1, 2006, in the amount of 3/8 of one percent on
all transactions which are taxable pursuant to the TDD Act. The retail establishments located in the
Redevelopment Project are within the boundaries of the District. Such retail establishments will collect the
TDD Sales Tax and forward the TDD Sales Tax to the City pursuant to the Collection Agreement.
Because all of the retailers operating in the District are located within the Redevelopment Area,
pursuant to the TIF Act, 50% of the TDD Sales Tax Revenues (the “TDD Captured Revenues”) are required to be
deposited into the City’s special allocation fund. See “SOURCES OF PAYMENT AND SECURITY FOR
THE BONDS – TDD Sales Tax Revenues and TDD Captured Revenues” herein.
The Collection Agreement provides that the City will collect, enforce and administer the TDD Sales
Tax. The City will deposit the TDD Sales Tax Revenues in the TDD Trust Fund and the TDD Captured
Revenues into a segregated account in the City’s special allocation fund. The Collection Agreement provides
that the City may retain a collection fee equal to 1% of the TDD Sales Tax collected by the City. Subject to
annual appropriation by the District, the TDD Sales Tax Revenues, less $2,084 (increased each year by a
percentage equal to the percentage increase in the Consumer Price Index for the preceding calendar year) to be
deposited each month into an Operating Fund under the Indenture to fund the District’s operating expenses, are
pledged to payment of the Bonds. There is no legal obligation of the District to appropriate funds as described
above.
Pursuant to the TDD Act, no transportation development district may repeal or amend its sales tax
unless such repeal or amendment will not impair the district’s ability to repay any liabilities which it has
incurred, money which it has borrowed or revenue bonds, notes or other obligations which it has issued.
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Sales Tax Generators
Collectively, the top twenty–five sales tax generators accounted for 63% of the sales taxes generated
within the District in 2005. The following chart, prepared by the City, provides summary information regarding
sales tax generators by industry type:
Percentage of Total Sales
Industry Type
General Retail
Restaurant
Home Improvement
Electronics
Construction Supplies
Home Furnishings
Auto Sales
Manufacturing
Professional Services
All other industries
42%
13%
10%
7%
7%
4%
3%
3%
2%
9%
100%
Sales Tax Collection Agreement
Pursuant to the Sales Tax Collection Agreement, the City agrees to perform all functions incident to
the administration, collection, enforcement and operation of the TDD Sales Tax. The City will charge a fee of
1% of the TDD Sales Taxes collected as a fee for such collection services. See “Appendix B – Definitions
and Summary of Principal Documents” hereto.
BONDOWNERS’ RISKS
An investment in the Bonds is subject to a number of risk factors. The following is a discussion of
certain risks that could affect payments to be made with respect to the Bonds. Such discussion is not, and is not
intended to be, exhaustive and should be read in conjunction with all other parts of this Official Statement and
should not be considered as a complete description of all risks that could affect such payments. Prospective
purchasers of the Bonds should analyze carefully the information contained in this Official Statement, including
the Appendices hereto, and additional information in the form of the complete documents summarized herein,
copies of which are available as described herein.
Because the Series 2006 Bonds are insured by the Bond Insurer the risk factors discussed
below should not under ordinary circumstances adversely affect payment of the Series 2006 Bonds.
The principal risk that may affect payment of the Series 2006 Bonds is the inability or refusal of the
Bond Insurer to perform its duties under the Bond Insurance Policy. In such an event, the Trustee
would exercise its available remedies against the Bond Insurer.
Nature of the Obligations
The Bonds are limited obligations of the District and are payable solely from and secured by the Bond
proceeds and Pledged Revenues. “Pledged Revenues” are all Net Proceeds and all moneys held in the Project
Fund, the Revenue Fund, the Debt Service Fund and the Debt Service Reserve Fund under the Indenture,
together with investment earnings thereon. “Net Proceeds” means the TDD Sales Tax Revenues that have
been appropriated by the District to the payment of the Bonds less (i) $2,084 (increased each year by a
percentage equal to the percentage increase in the Consumer Price Index for the preceding calendar year) each
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month which is to be deposited in the Operating Fund, (ii) 1% of the TDD Sales Tax Revenues, which is
retained by the City for the cost of collecting the TDD Sales Tax, (iii) any amount paid under protest until the
protest is withdrawn or resolved against the taxpayer and (iv) any sum received by the District which is the
subject of a suit or other claim communicated to the District which suit or claim challenges the collection of
such sum.
Transportation Development District Sales Tax Trust Fund pursuant to the provisions of the Cooperation
Agreement and the Collection Agreement. As long as tax increment financing remains in effect, the TDD
Sales Tax Revenues do not include the TDD Captured Revenues. “TDD Captured Revenues” means that
portion (50%) of the TDD Sales Tax Revenues that are payable to the City for deposit in the City’s special
allocation fund. See “SOURCES OF PAYMENT AND SECURITY FOR THE BONDS – TDD Sales Tax
Revenues and TDD Captured Revenues” herein.
The realization of such revenues is dependent upon, among other things, future changes in economic and
other conditions that are unpredictable and cannot be determined at this time.
Risk of Non-Appropriation
The application of the TDD Sales Tax Revenues is subject to annual appropriation by the District.
The District has covenanted that the officer of the District at any time charged with the responsibility of
formulating budget proposals is directed to include in the budget proposal submitted to the District Board of
Directors for each Fiscal Year a request for an appropriation of the TDD Sales Tax Revenues collected during
such Fiscal Year for application as provided in the Cooperation Agreement. Any funds appropriated as the
result of such a request shall be transferred by the City to the Trustee for deposit in the Revenue Fund at the
times and in the manner provided in the Indenture. Pursuant to the Indenture, if the District Board of Directors
fails to adopt a budget by the first day of a Fiscal Year, the budget for the prior Fiscal Year shall continue.
There can be no assurance that such appropriation will be made by the Board of Directors, and the Board of
Directors is not legally obligated to do so. Pursuant to the TDD Act, no transportation development district
may repeal or amend its sales tax unless such repeal or amendment will not impair the district’s ability to repay
any liabilities which it has incurred, money which it has borrowed or revenue bonds, notes or other obligations
which it has issued.
Financial Feasibility
The financial feasibility of certain developments within the District depends in part upon the leasing
and retention of commercial tenants to maintain substantial occupancy. There is no assurance that the leases
for existing tenants will continue for the term of the Bonds. Absent specific provisions in the leases, no tenant
is under any obligation to renew their leases. If substantial occupancy of the commercial developments is not
maintained, there may be insufficient TDD Sales Tax Revenues available for appropriation to the payment of
the Bonds.
Continued commercial success of the District also depends upon the success of the measures taken to
prevent future floods. The District is currently protected by a FEMA-certified 100-year levee. Construction of
a 500-year levee is nearing completion. According to the United States Army Corps of Engineers, a “100-year
flood” means that there is a 1% chance that a flood of that magnitude could occur in any given year, and a
“500-year flood” means that there is a 0.2% chance that a flood of that magnitude could occur in any given
year. A 100-year rated levee is built high enough and strong enough to withstand a 100-year flood; a 500-year
rated levee is built strong enough and high enough to withstand a 500-year flood. While the City and
Monarch–Chesterfield Levee District have taken significant steps (including the addition of pumps and
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greatly-improved levees) to prevent flooding in the District in the future, there is no assurance that flooding
will not occur. See “DEVELOPMENT WITHIN THE DISTRICT – Levee Improvements” herein.
Reliance on Property Owners, Tenants and Subsequent Property Owners
Bondowners will be dependent on current and future property owners, tenants and managers of the
developments within the District to maintain occupancy in order to assure that TDD Sales Tax Revenues are
generated.
It is unusual for any lease to require the tenant to continuously operate a business at the leased premises.
Thus, a tenant may cease operations but continue to pay rent. Under such circumstances, no TDD Sales Tax
Revenues would be generated by such tenant.
There is no obligation on the part of the owner of any property within the District to lease space to
tenants which generate TDD Sales Tax Revenues.
No Mortgage of the Transportation Project
Payment of the principal of and interest on the Bonds is not secured by any deed of trust, mortgage or
other lien on the Transportation Project or any portion thereof. The Bonds are payable solely from Bond
proceeds and Pledged Revenues.
Limitations on Remedies
The remedies available to the Bondowners upon a default under the Indenture are in many respects
dependent upon judicial action, which is often subject to discretion and delay under existing constitutional and
statutory law and judicial decisions, including specifically Title 11 of the United States Code (the “Federal
Bankruptcy Code”). The various legal opinions to be delivered concurrently with delivery of the Bonds will be
qualified as to enforceability of the various legal instruments by limitations imposed by bankruptcy,
reorganization, insolvency or other similar laws affecting the rights of creditors generally, now or hereafter in
effect; to usual equity principles which shall limit the specific enforcement under laws of the State of Missouri as
to certain remedies; to the exercise by the United States of America of the powers delegated to it by the United
States Constitution; and to the reasonable and necessary exercise, in certain exceptional situations, of the police
power inherent in the sovereignty of the State of Missouri and its governmental bodies, in the interest of serving
an important public purpose.
Loss of Premium Upon Early Redemption
Purchasers of Bonds at a price in excess of their principal amount should consider the fact that the
Bonds are subject to redemption at a redemption price equal to their principal amount plus accrued interest
under certain circumstances. See “THE BONDS – Redemption Provisions.”
It is anticipated that a
substantial portion of the Bonds will be redeemed prior to their stated maturity. See “PROJECTED NET
REVENUES AND NET DEBT SERVICE” herein.
Changes in Market Conditions
The assessments and revenue estimates used in Projections are based on the current status of the national
and local business economy and assume a future performance of the real estate market similar to the historical
performance of such market in the metropolitan St. Louis, Missouri area. However, changes in the market
conditions in the District, as well as changes in general economic conditions, could adversely effect the amount
of TDD Sales Tax Revenues collected.
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Factors Affecting TDD Sales Tax Revenues
TDD Sales Tax Revenues are contingent and may be adversely affected by a variety of factors, including
without limitation economic conditions within the District and the surrounding trade area and competition from
other retail businesses, rental rates and occupancy rates in private developments in the area, suitability of the
retailers for the local market, local unemployment, availability of transportation, neighborhood changes, crime
levels in the area, vandalism and rising operating costs, interruption or termination of operation of the retailers as
a result of fire, natural disaster, strikes or similar events, among many other factors. As a result of all of the
above factors, it is difficult to predict with certainty the expected amount of TDD Sales Tax Revenues which will
be available to pay the principal of and interest on the Bonds. The retail sales industry is highly competitive.
Existing retail businesses outside of the District and the future development of retail businesses outside of the
District, which are competitive with retail businesses in the District may exist or may be developed after the date
of this Official Statement.
In addition to the foregoing, the partial or complete destruction of the shopping centers, as a result of
fire, natural disaster or similar casualty event or the temporary or permanent closing of one or more retail
establishments due to strikes or failure of the business would adversely affect the TDD Sales Tax Revenues and
thereby adversely affect the revenues available to pay the Bonds and the interest thereon. Any insurance
maintained by the owner of or the tenants in the shopping centers for such casualty or business interruption is not
likely to include coverage for sales taxes that otherwise would be generated by the establishment.
The retail establishments located within the boundaries of the District will collect the TDD Sales Tax
and forward the TDD Sales Tax to the City.
Projections
The forecasted annual TDD Sales Tax Revenues shown in the Projections and herein are based on
certain assumptions concerning facts and events over which the District will have no control. No
representation or warranty is or can be made about the amount or timing of any future income, loss,
increased assessment or revenues, or that actual results will approach the Projections. The District makes
no representation or warranty (express or implied) as to the accuracy or completeness of any financial,
technical or statistical data or any estimates, projections, assumptions or expressions of opinion set forth in the
Projections. Pursuant to the Collection Agreement and the Indenture, the amount of such TDD Sales Tax
available to repay the Bonds consists only of the amount of the TDD Sales Tax Revenues appropriated by the
District to the payment of the Bonds less (i) $2,084 (increased each year by a percentage equal to the
percentage increase in the Consumer Price Index for the preceding calendar year) each month which is to be
deposited in the Operating Fund, (ii) 1% of the TDD Sales Tax Revenues, which is retained by the City for the
cost of collecting the TDD Sales Tax, (iii) any amount paid under protest until the protest is withdrawn or
resolved against the taxpayer and (iv) any sum received by the District which is the subject of a suit or other
claim communicated to the District which suit or claim challenges the collection of such sum.
average life of the Bonds, the Underwriter assumed that all taxpayers would promptly pay their sales taxes and
would retain 2% of the amount of the taxes owed. See “PROJECTED NET REVENUES AND NET DEBT
SERVICE” herein.
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Debt Service Reserve Fund
At the time of issuance of the Series 2006 Bonds, the Debt Service Reserve Fund will be funded with
proceeds of the Bonds in the amount of $2,023,143.76* (the “Debt Service Reserve Requirement”). See
“SOURCES OF PAYMENT AND SECURITY FOR THE BONDS–Indenture Funds and Accounts”
herein. There can be no assurance that the amounts on deposit in the Debt Service Reserve Fund will be available
if needed for payment of the Bonds in the full amount of the Debt Service Reserve Requirement because (1) of
fluctuations in the market value of the securities deposited therein and/or (2) if funds are transferred to the Debt
Service Fund, sufficient revenues may not be available in the Revenue Fund to replenish the Debt Service
Reserve Fund to the Debt Service Reserve Requirement.
Determination of Taxability
The Bonds are not subject to redemption, nor is the interest rate on the Bonds subject to adjustment, in
the event of a determination by the Internal Revenue Service or a court of competent jurisdiction that the interest
paid or to be paid on any Bond is or was includible in the gross income of the Owner of a Bond for federal
income tax purposes. Such determination may, however, result in a breach of the District’s tax covenants set
forth in the Indenture which may constitute an event of default under the Indenture. It may be that Owners would
continue to hold their Bonds, receiving principal and interest as and when due, but would be required to
include such interest payments in gross income for federal income tax purposes.
Changes in Bond Rating and Secondary Market
The lowering or withdrawal of the investment rating initially assigned to the Bonds could adversely
affect the market price and the market for the Bonds. If and when a Bondowner elects to sell a Bond prior to
maturity, there is no assurance that a market will be in existence for the purchase and sale of the Bond. Subject
to prevailing market conditions, the Underwriter intends, but is not obligated, to make a market for the Bonds.
PROJECTED NET REVENUES AND NET DEBT SERVICE
Based on (a) the Projections contained in APPENDIX A, (b) the interest rates on the Series 2006
Bonds, (c) an assumed investment yield of -0-% on amounts in the Revenue Fund and an assumed investment
yield of 3.0% on amounts in the Debt Service Reserve Fund, and (d) projected special mandatory redemptions
of the Series 2006 Bonds maturing on April 15, 2026* and projected optional redemptions of the Series 2006
Bonds maturing on April 15, 2013 and thereafter, both with available TDD Sales Tax Revenues as provided in
the Indenture: (1) all of the Series 2006 Bonds maturing on April 15, 2026* are expected to be paid or
redeemed by April 15, 2013*; (2) the average life of the Series 2006 Bonds maturing on April 15, 2026* is
expected to be 3.05 years; and (3) debt service (including projected special mandatory redemptions of the
Series 2006 Bonds maturing on April 15, 2026*) expected to be paid on the Series 2006 Bonds is as follows:
[Remainder of Page Intentionally Left Blank.]
*
Preliminary; subject to change.
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12 Months
Ending
_December 31
Projected
Net Revenues1
Scheduled
Debt Service
Projected Debt
Service Coverage
for Scheduled
Debt Service
Expected Net
Debt Service2
2007
$1,814,694
$1,351,087
1.3431
$1,292,793
2008
2,089,694
1,594,556
1.3105
1,536,262
2009
4,452,694
1,994,025
2.2330
5,598,593
2010
5,134,694
1,994,494
2.5744
4,499,690
2011
5,457,694
1,993,275
2.7381
4,816,837
2012
5,893,694
1,993,644
2.9562
5,252,006
2013
6,340,694
1,995,344
3.1777
784,228
2014
6,788,694
1,994,844
3.4031
2015
7,236,694
1,992,144
3.6326
2016
7,683,694
1,296,344
5.9272
2017
7,810,694
1,292,944
6.0410
2018
8,578,694
1,293,244
6.6335
2019
9,026,694
1,292,144
6.9858
2020
9,473,694
1,294,544
7.3182
2021
9,921,694
1,295,344
7.6595
2022
10,368,694
1,293,894
8.0136
2023
10,816,694
1,295,066
8.3522
2024
11,263,694
1,294,381
8.7020
2025
11,711,694
1,296,738
9.0317
2026
14,151,491
2,286,200
6.1900
__________________
1
Includes assumed 3.0% investment earnings on amounts in the Debt Service Reserve Fund.
2
Expected Debt Service constitutes Scheduled Debt Service plus projected Special Mandatory Redemptions
with respect to the Series 2006 Bonds maturing on April 15, 2026 plus optional redemptions of the Series
2006 Bonds maturing on April 15, 2013 and thereafter. Assumes amount on deposit in the Debt Service
Reserve Fund will be used to pay the last Series 2006 Bonds becoming due.
The Projections analyze the revenue generation potential of the District for the purpose of projecting
the potential revenues available under the TDD Act to support the payment of debt service on the Series 2006
Bonds. Neither the City nor the Underwriter make any representation or warranty, express or implied, as to the
accuracy or completeness of the information contained in the Projections, and there is no obligation to update
the Projections upon delivery of the Series 2006 Bonds. Development Strategies, Inc. has consented to the
inclusion of the Projections in this Official Statement.
The Projections are forward-looking and involve certain assumptions and judgments regarding future
events. The actual amount available for redemption of the Series 2006 Bonds depends upon the collection of
projected revenues that may or may not be realized at projected levels. Prospective purchasers of the
Series 2006 Bonds should review APPENDIX A carefully. Although the Projections are based on certain
currently available information, they are also based on various assumptions, estimates and opinions about the
future state of the national and regional economy and the local real estate market, which cannot be assured or
guaranteed. The actual results will vary from the Projections and the variations may be material. There is no
assurance that actual events will correspond with the Projections or the assumptions, estimates and opinions on
which they are based.
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The amount of TDD Sales Tax Revenues generated within the District may be greater or smaller than
the amount projected, which will affect the rate of payment and redemption of the Series 2006 Bonds.
THE TRANSPORTATION PROJECT
The District will use a portion of the proceeds of the Bonds to accomplish the following:
(1)
alignment and improvement of a signalized intersection of Wildhorse Creek Road, Long
Road and Kehrs Mill Road;
(2)
widening of Long Road from Chesterfield Airport Road to Wildhorse Creek Road;
(3)
construction of a levee trail/bikeway system along the Monarch–Chesterfield Levee;
(4)
realignment of Wildhorse Creek Road at/near Chesterfield Airport Road and Chesterfield
Parkway;
(5)
conducting a study addressing the mass transit needs of Chesterfield Valley;
(6)
improvements to Chesterfield Airport Road at its intersection with Spirit of St. Louis
Boulevard and at its intersection with Old Olive Street Road; and
(7)
improvements to local roads and rights–of–way and acquisition of public easements within
the area bounded by and including Long Road on the west, Baxter Road on the east, Interstate
64 on the north and Edison Avenue on the south.
The District is also empowered to partially fund a full interchange at Interstate 64 and Long Road.
This transportation project will not be funded with the proceeds of the Bonds. Instead, moneys in the Future
Projects Account of the Project Fund may be applied to pay the District’s portion of such transportation
project, the remaining portion of which will be funded by the Missouri Department of Transportation.
DEVELOPMENT WITHIN THE DISTRICT
General
The District’s boundaries encompass the area commonly known as Chesterfield Valley (the “Valley”)
which is situated along a five-mile corridor of Interstate 64/U.S. Highway 40 in west St. Louis County and is
within the alluvial floodplain of the Missouri River. In 1993, a flood categorized as a “500-year flood” caused
the Valley to be flooded with eight to twelve feet of water as a result of the breach of portions of the levees.
These breaches caused the flooding of approximately 4,700 acres of land, submerging portions of Interstate
64/U.S. Highway 40 and causing extensive damage to commercial buildings, St. Louis County’s correctional
facility, the Spirit of St. Louis Airport, and residential and agricultural property. Pursuant to the TIF Act, the
City declared the Valley blighted after the flood of 1993 and established the Chesterfield Valley Tax Increment
Finance District.
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Once the flood waters had receded, the United States Army Corps of Engineers was able to
reconstruct the levee to its pre-1993 flood condition by March 1994. On October 17, 1994, the City Council of
Chesterfield adopted ordinances designating the Valley as a Redevelopment Area and establishing a special
allocation fund for the payment of redevelopment project costs and obligations to assist in the creation of
infrastructure needed for the Valley’s recovery after the flood of 1993, including but not limited to levee
improvements.
Levee Improvements
In 1994, the City and the Monarch-Chesterfield Levee District (the “Levee District”) undertook a
drainage project to improve drainage capabilities at the Spirit of St. Louis Airport. In 1995, the Levee District
made stabilization improvements to the levee, including the addition of 50,000 tons of rock and 50,000 cubic
yards of fill material. In 1996, three storm water pump stations and attendant facilities to improve drainage
were added in the Valley. Since the flood of 1993, the City and the Levee District have continued to work
toward increasing the overall stability of the levee and flood protection for the Valley. On August 18, 1997,
the Federal Emergency Management Agency (FEMA) issued a letter recertifying the Monarch-Chesterfield
Levee as a 100-year levee, thereby qualifying property within the Valley for inclusion in the National Flood
Insurance Program.
In addition to restoring the Monarch-Chesterfield Levee to its original 100-year level of protection, the
Levee District and the City are working together to complete construction of 11-miles of the MonarchChesterfield Levee to a 500-year elevation level in order to further protect the Valley. To date, a substantial
portion of the earthen levee has been improved to the 500-year elevation. Work remaining includes: (a) road
re–alignment and seepage berm supplement (construction to commence in September 2006); (b) additional
wetlands mitigation (anticipated to commence in April 2007); (c) road closure structure and floodwalls
(anticipated to commence in April 2007); and (d) railroad closure structures (anticipated to commence in 2009
and 2011). These additional future improvements are part of the 500-year levee system design.
Development in the Valley
The Valley is stronger and more prosperous than before the 1993 flood. Since the 1993 flood, a new
interchange was constructed in the Valley, approximately $15,000,000 has been spent on additional road and
highway improvements, and approximately $7,000,000 has been spent improving storm water drainage and
management, including installation of three new storm water pumping stations. The following chart illustrates
business development in terms of square feet in the Valley since 1993:
Development Mix (SF):
Office/Service Center
Retail
Industrial/Airport
1993
Pre-Flood
1999
2002
2005
1.00 MM
0.10 MM
2.00 MM
1.32 MM
0.54 MM
4.27 MM
1.58 MM
1.13 MM
5.24 MM
2.03 MM
1.69 MM
6.17 MM
2007
(Projected)
2.43 MM
2.04 MM
6.24 MM
Source: Chesterfield Community Development Corporation.
The District anticipates continued growth and development in the Valley. The District cannot predict
the extent of such future private development. Any such development may increase the amount of TDD Sales
Tax Revenues available for appropriation by the District to the repayment of the Bonds. Such deposits may
have a material effect on the revenues available to pay principal and interest on the Bonds and to redeem
Bonds prior to maturity in amounts greater than the amounts set forth herein, but no accurate projection can be
determined as of the date of this Official Statement.
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The Valley is one of the largest contiguous commercial and industrial tracts in the metropolitan St.
Louis region. The Valley has experienced significant commercial development since the 1993 flood and, from
1993 through 2005, approximately 6.97 million square feet of new development has taken place in the Valley.
The following chart documents the completion of various developments year-by-year since the flood of 1993
through August 1, 2006:
2006 (as of 8/1/06) - Name
Address
Ambassador Floor Company
17770 Chesterfield Airport Rd
First Community Credit Union
Skyzone Recreational Center 63005,
LLC
17379 Edison Ave
Velocity Sports Performance
17363 Edison Ave
Walgreens #07692
97 Long Rd
Brook Mays Music
148 THF Blvd
Product Promotions
17826 Edison Ave
Pump It Up of Chesterfield
601 Trade Center Blvd
Tuesday Morning #762
17353 Edison Ave
Advanced Lipo Dissolve Center
16647 Chesterfield Grove Rd
Business Training Library
285 Chesterfield Business Prkwy
APC Direct, Inc.
770 Spirit of St. Louis Blvd
Green Financial Group LLC
18067 Edison Ave
High Energy Gymnastix, Inc.
17732 Edison Ave
Peels Salon Services
St. Louis New Homes Guide &
Distributech
The Meyer Company
720 Spirit Park 40 Dr
Pets and Company, LLC
17701 Edison Ave
109 other businesses, each under 5,000 square feet
Square Feet
49,988
48,678
22,800
21,000
14,820
12,000
11,152
10,910
10,000
10,000
9,000
7,621
7,523
7,500
5,289
Total
2005 - Name
The Home Depot #8994
Chesterfield Galaxy 14 Cine
Amini's Galleria
Lynch Hummer
Savage Foods
Kemp Auto Museum
N-Store Services
STL Cosmetic Surgery & Enhance
Med Spa
Golf Discount of St. Louis, Inc.
Goodwill
Emperor's Palace
BounceU
Xanadu
Cambridge School
Address
390 THF Blvd
450 THF Blvd
17371 Outer 40 Rd
17395 Edison Ave
160A Chesterfield Industrial Blvd
17300 Outer 40 Rd
101 Chesterfield Valley Dr
17355 Edison Ave
17365 Edison Ave
280 Long Rd
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5,215
5,000
5,000
179,312
442,808
Square Feet
103,240
59,690
54,300
30,820
27,000
26,520
23,012
16,000
15,000
13,772
11,000
9,600
9,200
8,600
Fox and Hound Pub & Grille
Joe's Crab Shack
2 McBride & Son Center Dr
June Roesslein Interiors
17899 Chesterfield Airport Dr
NutriFormance Acceleration, LLC
16851 Outer 40 Rd
Centric Health Resources Inc.
Smokey Bones Barbeque & Grill
#7595
The Maytag Store
Knowledgelake, Inc.
750 Goddard Ave
Apple Spice Junction
17371 Edison Ave
Applebee's Neighborhood Grill & Bar 17392 Chesterfield Airport Rd
Botanicals on the Park West
8,000
7,610
7,306
7,200
7,200
Total
2004 - Name
Cobitco, Inc.
Comfort Inn & Suites
Stone Trends, LLC
House of Denmark
Pfizer, Inc.
Data Manufacturing, Inc.
National Wood Flooring Association
Beck/Allen Cabinetry
Pier 1 Imports #1336
Stonecreek Funding Corporation
Sanborn Map Company
Convergent Communications of STL
Paragon Certified Restoration
Midway Delivery Services
Corporate Claims Management
Chesterfield Commons Athletic Club
Midwest Bank Centre
ASAP, Inc.
The Old Spaghetti Factory
Stock & Associates Consulting Eng.
Factory Card & Party Outlet #322
Villa Farotto
Westower Communications, Inc.
Manna Pro Corporation
Lawns of Distinction
Nikco Sports
Mimi's Café
Chesterfield Surgery Center, Inc.
Autotire Car Care Center
Holcim (US) Inc.
Address
620 SPIRIT OF ST LOUIS BLVD
17906 Edison Ave
17387 Edison Ave
670 Goddard Ave
111 Chesterfield Industrial Blvd
22 THF Blvd
18421 Edison Ave
18330 Edison Ave
717 Crown Industrial Crt
722 Goddard Ave
782 Spirit 40 Park Dr
17375 Edison Ave
17050 Baxter Rd
18111 Edison Ave
34 THF Blvd
17667 Wild Horse Creek Rd
17050 Baxter Rd
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7,082
6,000
6,000
6,000
5,741
5,600
104,034
585,527
Square Feet
134,000
51,690
45,000
33,000
30,000
28,695
20,000
13,750
13,000
12,718
12,000
12,000
10,500
10,000
10,000
10,000
9,871
9,700
9,549
9,000
8,900
8,678
8,000
8,000
7,235
7,000
6,957
5,997
5,928
5,678
Ghisallo Apparel & Bicycles
161 Long Rd
Burns & Wilcox Ltd.
Bob Evans #470
The Scobis Company, Inc.
Countrywide Home Loans, Inc.
2 THF Blvd
Total
2003 - Name
Address
Target Stores T-1353
40 THF Blvd
Experitec, Inc.
Circuit City
28 THF Blvd
Fab Lab, Inc.
Plaza Executive Suites
Midwest Machinery Company
17814 Edison Ave
Golf Galaxy, Inc.
16 THF Blvd
Automotive Product Consultants Inc
Sports Enhancement Group LLC
217 Chesterfield Towne Ctr
Hammert's Iron Works, Inc.
16647 Chesterfield Grove Rd
National Corn Growers Association
632 Cepi Dr
Country Club Express Wash
Wanforce Technologies Corp.
Deals Nothing Over A Dollar #3383
46 THF Blvd
Oaktree Products, Inc.
Sebco Companies, Inc.
Old CornerStone Financial, LLC
Behlman Builders, Inc.
Coldwell Banker Gundaker
111 Chesterfield Towne Ctr
Wells Fargo Home Mortgage
Chesterfield Valley Physical Therapy
17300 Outer 40 Rd
Schultz & Little, LLP
640 Cepi Dr
Total
2002 - Name
Taylor-Morley, Inc.
CT Innovations, LLC
Sentrus, Inc.
Wildhorse Fitness, LLC
Dress Barn #678
Unitas, Inc.
Applied Information Systems
Dobbs Tire & Auto Centers
Labels Direct, Inc.
SSC Engineering, Inc.
Address
136 THF Blvd
18221 Edison Ave
18207 Edison Ave
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5,600
5,525
5,188
5,000
5,000
217,648
800,807
Square Feet
144,500
39,900
32,900
32,000
20,080
20,000
16,106
13,036
11,773
10,064
10,000
10,000
9,492
9,298
8,575
8,118
7,400
7,020
6,354
5,869
5,141
5,000
115,559
548,185
Square Feet
24,087
16,400
13,590
12,000
12,000
10,252
9,900
7,865
6,944
6,810
O'Charley's, Inc. #329
The Balloon Factory
The Crossroads Program
626 Cepi Dr
2001 – Name
Steak N Shake
Dobbs Tire & Auto
Thunder Aviation
Gundaker Commercial
THF Realty
Lotus Development Group
Seet Properties
National Education Association
Olive Garden
Taylor Morley
Spirit Corporate Center
Gundaker Commercial
MOHELA
St. Louis Bread Company
Chesterfield Commons
Babies R’ US
Designed Telecommunications Services
O’Charley’s
Game Master
Founders Bank
Red Lobster
2000 – Name
Chesterfield Grove Market
Hampton Inn and Suites
Missouri Car Care
Michael’s Arts & Crafts
Office Max
Sam’s Club
Linens ‘N Things
Best Buy
Red Robin
Longhorn Steakhouse
Old Country Buffet
Wellington Management
St. John Realty
Gundaker Commercial
Landings at Spirit Golf Club
Total
6,779
6,000
5,880
78,949
217,456
Total
Square Feet
3,770
7,352
19,600
12,800
41,200
15,000
15,000
15,000
15,000
8,027
64,454
23,600
22,000
88,000
4,830
20,000
30,496
40,000
6,928
4,300
3,496
6,973
467,826
Address
17312 Chesterfield Airport Rd.
701 Bell Ave.
Chesterfield Business Park
Plaza at Boone’s Crossing
612 Trade Center Blvd.
Chesterfield Airport Rd.
Towne Centre
633 Spirit Center Blvd.
THF Blvd.
220 THF Blvd.
618 Spirit Center
629 Cepi Drive
169 Long Rd.
Chesterfield Airport Rd.
Address
17045 Baxter Rd.
#5 McBride and Son Center Dr.
142 THF Blvd.
122-136, 162-170, 186 THF Blvd.
222-230, 246-254, 270-278 THF
Blvd.
154 THF Blvd.
196 THF Blvd.
190 THF Blvd.
178 THF Blvd.
714 Spirit 40 Park Dr.
632 Cepi Dr.
Towne Centre – Phase I
180 N. Eatherton Rd.
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Square Feet
15,700
75,000
5,650
23,753
32,700
30,000
23,500
128,218
37,500
45,720
6,157
4,993
8,568
32,000
10,000
17,000
12,600
Spirit Center I
Granger Construction
640 Spirit Dr.
17709 Edison Ave.
Total
37,675
10,566
17,362
574,662
1999 – Name
Impact Technologies
Hilton Garden Inn
Thunder Aviation
Thunder Aviation
Skylife Aviation/Arch Helicopters
Ambassador Floor
Insite Technology
Insite Technology
Spirit Business Center II
Hanley Coach Sales
WalMart #2600
World Market
PetsMart
Lowe’s Home Improvement Center
Chesterfield Valley Power Sports
Cambridge Engineering Inc.
Midco Products, Inc.
Address
16647 Chesterfield Grove Rd.
639 Bell Ave.
657 Bell Ave.
18500 Edison Ave.
708-718 Goddard
17989-17999 Chesterfield Airport Rd.
680 Crown Industrial Ct.
626 Cepi Dr.
100 THF Blvd.
110, 112, 116, 118, 120, 148 THF Blvd.
238 THF Blvd.
262 THF Blvd.
290 THF Blvd.
17501 N. Outer Airport Rd.
620 Spirit of St. Louis Blvd.
Total
Square Feet
29,000
58,700
16,000
15,500
53,000
18,000
31,000
38,000
42,000
5,880
131,566
24,500
18,300
19,235
135,197
19,200
3,000
7,335
661,413
1998 – Name
FAA Control Center
Cambridge Engineering Inc.
Insituform Technologies Inc.
Jones Company
R.G. Brinkmann Construction
Scott Properties
Aero Charter
Thunder Aviation
Address
720-724 Spirit 40 Park Dr.
732-746 Spirit 40 Park Dr.
18250 Edison Ave.
17998 Edison Ave.
717 Crown Industrial Ct.
501-505 Turbine Ave.
18369 Edison Ave.
Total
Square Feet
10,000
18,000
17,000
53,000
10,000
35,000
35,000
66,180
33,000
32,000
18,000
327,180
Total
Square Feet
19,000
13,500
90,000
64,000
6,444
30,000
222,944
1997 – Name
GameMaster Athletic Co.
84 Lumber Co.
Reliv, Inc.
Insituform Technologies Inc.
McDonalds/Amoco/Valley Lube
Address
629 Cepi Dr.
136 Chesterfield Industrial Blvd.
17999 Edison Ave.
100 and 120 Long Rd.
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1996 – Name
St. Louis Enterprise Center
Spectrum Balloon Flights
Chesterfield Valley Golf Center
U.S. Ice Sports Complex
1995 – Name
City Public Works Facility
1994 – Name
Sachs Properties-Maintenance Facility
AVMATS
Annie Gunn’s
Address
641 Cepi Dr.
18454 Olive Street
16851 N. Outer 40 Rd.
Total
Square Feet
43,000
6,827
18,000
107,000
174,827
Total
Square Feet
35,000
35,000
Total
Square Feet
3,500
58,896
1,500
63,896
Address
165 Public Works Dr.
Address
18377 Edison Ave.
Source: Chesterfield Community Development Corporation.
The following discussion provides a brief summary of the most significant development projects in
the Valley completed since the 1993 flood. The information in the following discussion was obtained without
access to the records and rental data of the developers of such developments.
Chesterfield Commons. Chesterfield Commons is a 1,000,000 square-foot retail development
located on Chesterfield Airport Road at the Boone’s Crossing interchange, constructed at a cost of $75 million,
including land and infrastructure costs. There are approximately 60 occupants, including those in outlots.
Major anchors Wal-Mart and Lowe’s Home Improvement Center opened in October 1999. Wal-Mart
is the world’s largest retailer, with approximately 3,400 stores, including Supercenters, in the United States
alone. As a discount retailer, Wal-Mart provides clothing, electronics, beauty and health aids, toys, household
items, and numerous other general retail products. Lowe’s Companies, Inc. is the world’s second largest home
improvement retailer, with 1,250 stores in 49 states in the United States. Lowe’s provides general hardware
and remodeling items to over 6 million do-it-yourself retail and commercial business customers each week
worldwide.
Chesterfield Commons also includes approximately 58 additional commercial and retail occupants,
including Sam’s Club, Linens ‘N Things, Best Buy, Office Max, PetsMart, Babies ‘R’ Us, Michael’s Arts &
Crafts, Shoe Carnival, World Market, Radio Shack, Great Clips, Pak Mail, Total Hockey, Dollar Tree, AG
Cleaners, and Dress Barn. Outparcel occupants include Steak ’N Shake, Red Lobster, Olive Garden, Dobbs
Tire and Auto, Old Country Buffet, Red Robin, Mimi’s Café, Sonic, Lion’s Choice, Bob Evans, Longhorn
Steakhouse and St. Louis Bread Company.
Chesterfield Valley Athletic Complex. Located on North Outer 40 Road, this 142-acre park in the
Valley consists of 40 acres of natural wetlands, 24 baseball/softball fields, 9 soccer fields, 2 football fields, 2
multi-purpose fields, 2 concessions buildings, 2 playgrounds, a maintenance building and 3 parking lots. This
complex is used primarily for youth and adult sports leagues, tournaments, camps and clinics.
Business Development. The St. Louis County Economic Council opened its fourth and newest small
business incubator in the Valley in late 1996. At the new St. Louis County Enterprise Center, up to 35
emerging small businesses can rent office and warehouse space for below-market rates. The County also
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provides secretarial services and shared office equipment. The two-story, 43,000 square-foot facility is located
on four acres in Spirit 40 Park overlooking I-64/U.S. Highway 40. The Enterprise Center cost $3.9 million to
construct, and the federal government provided 75 percent of the funding. The Enterprise Center is also proud
to serve as home to a satellite office of the Clayton-based World Trade Center St. Louis.
Towne Centre. Towne Centre at Long and Edison Roads was completed in 2001. It is intended to
complement and contrast with the nearby high-volume superstores by offering upscale, boutique shopping,
entertainment and restaurants such as Wild Horse Grill, El Maguey, Pasta House Pronto!, Foodies and Tony
Joe’s Pizza. Stores included Pilates Studio, Ghissalo Bike, the Racketman Tennis, Pulaski Bank, MidWest
Bank, Crush boutique, Ginger Pye children’s clothing and several others.
Chesterfield Commons East. Chesterfield Commons East is an approximately 247,000 square-foot
52.6-acre retail project east of Chesterfield Commons, just off I-64, anchored by a Target. Construction is still
underway, but tenants already open for business include Golf Galaxy, Pier 1, Circuit City, Factory Card Outlet,
Acropolis Custom Marble, Qdoba, Bank of America, Smokey Bones, Taco Bell, Scrubs & Beyond, Sunshine
Drapery, and Custom Design Upholstery. Dick’s Sporting Goods is expected to open in Chesterfield
Commons East in 2007.
Chesterfield Commons West. Chesterfield Commons West is approximately 350,000 square feet
project west of the Chesterfield Commons, just off I-64, anchored by Home Depot and Wehrenberg Galaxy 14
Cinema. Other tenants include Emperor’s Palace, Hardees, Old Spaghetti Factory, Applebee’s, Fox and
Hound, Moe’s Southwest, Ben & Jerry’s, Caito’s Pizza, Intelli-bed, Frey Communications, Oak Tree
Furniture, US Cellular, Bounce U, Chesterfield Commons Athletic Club, Rainbow Recreation, Savage Foods,
Sky Zone, Tuesday Morning, and Velocity Sports.
Chesterfield Commons North. Chesterfield Commons North contains approximately 100,000
square feet of office space and 60,000 square feet of retail. Tenants include Taylor Morley, First Community
Credit Union Headquarters, Country Club Car Wash, Sculptures Personal Training, Kaldi’s Coffee, Oberweis
Diary, Casual Male Big & Tall, Charles Schwab, Clarkson Eyecare, Cool Cuts 4 Kids, EB Games, Great Clips,
Mattress Giant, The Maytag Store, Michael Herr Jewelers, Nordic Track, Plaza Executive Suites, Sprint,
Sports Clips, Toy Tyme, UPS Store, Vineyard Wine & Spirits, Quizno’s Subs, and Starbucks.
Chesterfield Six. Chesterfield Six, when completed, will contain approximately 250,000 square feet
of retail and office space. Tenants who have already opened for business or whose space is currently under
construction include a Holiday Inn Hotel, Amini’s Gallery, National City Bank, McBride & Sons
Homebuilders, Joe’s Crab Shack, IHOP, and Hampton Inn Hotels.
Chesterfield Grove. The Chesterfield Grove project was completed in 2001. Chesterfield Grove
consists of over 148,000 square feet of office, hotel and retail space. There are currently 22 occupants,
including the Sheraton Inn, Chesterfield Jewelers, Mary Tuttle’s Flowers, Jones Company Custom Homes,
Inc., St. Nick's Nook, RG Brinkmann Construction Co., Impact Technologies, Inc., the United Soybean Board,
Office Options, The Warren Group, Dot Foods, Inc., and Regency Realty Corporation.
Other Developments. In addition to those identified above, several other developments have been or
are expected to be constructed in the Valley. Other existing major developments include Chesterfield Medical
Spa, Annie Gunns’s restaurant, Synergy MedSpa Building, Junior Achievement, Jim Lynch Hummer, Bentley
Auto Dealership, Villa Farroto Restaurant, Espinos Mexican, Commercial Bank, Harley Davidson dealership,
Walgreen’s, and Gundaker Commercial Headquarters.
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Major Employers in the Valley
The following chart lists the top ten employers for 2005 in the Valley based upon the number of fulltime employees:
Number of FullType of Business
Time Employees
Company
McBride & Son Management Co.
Mark Andy Inc.
MOHELA
Technology Partners, Inc.
Target Stores
Sam’s Club #6252
Jet Corp, LLC
Taylor Morley
Fischer & Fritchel
Reliv, Inc.
Home Builder/Developer/Contractor
Printing Press Manufacturer
Higher Education Loans
Computer Consulting Firm
Retail Discount Merchandiser
Aircraft Charter and Maintenance
Home Builder/Developer/Contractor
Office & Residential Builder
Dietary Supplement Manufacturer/Distributor
500
285
260
230
200
200
195
193
190
179
Source: City of Chesterfield, Missouri.
Major Retailers in the Valley
The following chart lists the top ten retail businesses for 2005 in the Valley based upon number of
square feet:
Retailer
Type of Business
Target Stores
Wal-Mart Store #2600
Sam’s Club
Lowe’s of Chesterfield #731
The Home Depot
Amini’s Gallery
Best Buy Store #143
Linens ‘N Things #742
Circuit City
Babies ‘R Us
Home Improvement Warehouse
Home Improvement Warehouse
Furniture and Home Furnishings
Retail Sales/Consumer Electronics
Retail Home Furnishings
Retail Sales/Consumer Electronics
Infant Clothing and Accessories
Square Footage
144,500
131,566
130,359
120,457
103,240
54,300
45,654
37,500
32,900
30,000
Spirit Airport
The Spirit of St. Louis Airport (“Spirit Airport”), located within the Valley, has been in operation for
approximately 36 years and is the second busiest airport in its FAA region (Missouri, Iowa, Kansas, and
Arkansas). Spirit Airport has 7,000- and 3,000-foot runways, and the capacity to base 700 airplanes. Spirit
Airport and its FAA Flight Service Station, terminal service, and overhaul amenities is a major economic
generator for the region’s commerce, and with proposals for future expansion will continue to be a leader in
the City’s growth. Owned and operated by St. Louis County, Spirit Airport annually logs 220,000 flights and
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is continually ranked among the top reliever airports in the United States. More than 1,400 acres of prime
airport space currently exists for aviation and industrial development on the airplex. Fully developed 1-1/2 to
50-acre sites are readily available for immediate occupancy under long-term, favorable leases. Spirit Airport is
a convenient location for many corporations at which to base their aircraft.
Retail Competition for the Valley
The City of Chesterfield is a thriving community and offers many retail opportunities outside of the
Valley. Chesterfield Mall, near the intersection of Interstate 64/U.S.Highway 40 and Clarkson Road, includes
retailers such as Dillard’s, Macy’s, Sears, Ann Taylor, William Sonoma, Banana Republic, Foot Locker,
LensCrafters, Old Navy, The Limited, Pottery Barn Kids, Zales, Drury Inn & Suites, Bahama Breeze, Stony
River Legendary Steaks, Barnes and Noble, Talbots, B. Dalton Bookseller, as well as approximately 130
additional stores and restaurants within Chesterfield Mall and located in adjacent outlots.
THE CITY
The Bonds are not an obligation of the City and are payable solely from the revenues described herein.
The following information regarding the City is provided as general background information only.
General
The City is located on the western edge of St. Louis County, Missouri. The City was incorporated
under Missouri law as a third-class city on June 1, 1988 and encompasses approximately 32 square miles. The
City is located within the St. Louis Standard Metropolitan Statistical Area (“SMSA”) comprised of the
counties of Franklin, Jefferson, Lincoln, St. Charles, St. Louis, Warren and Washington in Missouri, the City
of St. Louis, Missouri, the City of Sullivan in Crawford County, Missouri, and the counties of Bond, Calhoun,
Clinton, Jersey, Macoupin, Madison, Monroe and St. Clair in Illinois.
Type of Government
The City is governed under a Mayor/City Council/City Administrator form of government. The
legislative body of the City is the City Council, which is comprised of eight council members (two from each
ward) and a Mayor. Council members are elected to serve two-year terms, one-half of which expire annually.
The Mayor, elected at large to serve a four-year term, is the presiding officer of the City Council. The Mayor
may vote in the event of a tie by the City Council. The current Mayor and the members of the City Council are
as follows:
Year Present
Term Expires
Year First Elected
John Nations, Mayor
Mary Brown, Councilmember
Mike Casey, Councilmember
Jane Durrell, Councilmember
Barry Flachsbart, Councilmember
Connie Fults, Councilmember
Bruce Geiger, Councilmember
Daniel Hurt, Councilmember
Barry Streeter, Councilmember
(1)
2001
1997
1998
1999
1988, 1994(1)
2002
2001
1989
1995
2009
2007
2008
2007
2008
2008
2008
2007
2007
Councilmember Flachsbart served from 1988 to 1990 and was then re-elected in 1994.
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The City Council is organized into four working committees: Finance & Administration, Planning &
Zoning, Public Health & Safety, and Public Works & Parks. Each committee is comprised of four Council
members, with the Mayor and City Administrator serving as ex-officio members of each committee.
The City Administrator is selected by and serves at the pleasure of the Mayor and City Council. He
supervises the day-to-day operations of the City and is ultimately responsible for City employment and
preparation of the City’s annual budget. He also directly supervises the Chief of Police, Director of Finance &
Administration, Director of Planning, Director of Public Works/City Engineer and the City Clerk. The
Finance & Administration Department is responsible for the City’s financial and accounting functions, budget
preparation and monitoring, cash management and investment, purchasing and licensing of businesses within
the City. This Department also oversees the Municipal Court, Customer Service Center and Information
Systems Division, which is responsible for the development, installation and maintenance of office automation
systems. The Municipal Court is the judicial branch of City government. Traffic violations and other City
ordinance violations are tried by the Court.
Michael G. Herring, City Administrator. Mr. Herring was selected as City Administrator following a
nationwide search and began his service to the City in July 1988. In 2003, the International City Management
Association recognized Mr. Herring as a “fully-credentialed manager”, and that status was renewed in January
2004 and again in January 2005. Prior to working for the City, Mr. Herring served as City Administrator for
the City of Ballwin, Missouri, the City of Garden City, Georgia (a suburb of Savannah, Georgia) and Town
Administrator for the City of Ridgeland, South Carolina. Mr. Herring is a Phi Beta Kappa graduate of the
University of South Carolina, where he received a Masters in Public Administration and a Bachelor of Arts in
Political Science.
In 1998, Mr. Herring received the “Jay T. Bell Professional Management Award” from the Missouri
City Management Association, awarded annually to one City Administrator in Missouri for “high standards of
accomplishment, professionalism and ethical conduct.” He also was the recipient of the “Excellence in
Community Development Award” from the Chesterfield Area Civic Progress organization for his dedication
and service during the restoration of the Valley. In 1990, he received the “Outstanding Achievement in Local
Government Award” from the East-West Gateway Coordinating Council, and has served as president of both
the St. Louis Area City Management Association and the Missouri City Managers Association.
Jeremy Craig, CPA, MBA, Director of Finance and Administration. Mr. Craig began employment
with the City in 2003 and has over 10 years of experience in local government. Prior to joining the City, Mr.
Craig served as the Director of Finance for the Cities of Des Peres and Creve Coeur, Missouri, the Assistant
Director of Finance for the City of Maryland Heights, Missouri, a Supervising Senior Auditor at KPMG Peat
Marwick, and a Staff Auditor at the Missouri State Auditor’s Office.
Transportation
The City’s geographic location provides easy access to all areas of metropolitan St. Louis via
I-64/U.S. Highway 40, which runs for 9 miles through the City and has six interchanges within the City.
Commercial rail service is provided by the St. Louis Southwestern Railroad, which runs through the Valley.
Regularly scheduled air passenger and freight service is available at Lambert-St. Louis International Airport
located approximately 20 miles northeast of the City.
Charter and commercial air service is available at Spirit Airport, located within the City. Spirit Airport
is the second busiest airport in its FAA region (Missouri, Iowa, Kansas and Arkansas). Spirit Airport has both
a 7,000- and 3,000-foot runway and the capacity to base 700 aircraft. Spirit Airport continues to be integral to
the City’s growth.
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Population and Income Statistics
According to the U.S. Census Bureau, the population patterns for the City, St. Louis County and the
State of Missouri have been as follows:
Year
1980
1990
2000
City of Chesterfield
Percentage
Change
Population
N/A
37,991
46,802
St. Louis County
Percentage
Population
Change
N/A
N/A
23.2%
973,896
993,529
1,016,315
N/A
2.0%
2.3
State of Missouri
Percentage
Population
Change
4,916,686
5,117,073
5,595,211
N/A
4.1%
9.3
Source: Missouri State Census Data Center; United States Census Bureau, 2000 U.S. Census.
The following table shows the 2000 Census counts of population by age categories for the City,
St. Louis County and the State of Missouri:
Age
Under 5 years
5-19 years
20-24 years
25-44 years
45-64 years
65 and over
Median Age
City of
Chesterfield
St. Louis
County
2,606
9,793
1,886
11,720
13,909
6,888
41.8
State of Missouri
63,851
218,431
57,773
294,534
238,464
143,262
369,898
1,224,274
369,498
1,626,302
1,249,860
755,379
37.5
36.1
Other Statistics. The following table presents certain income statistics from the 2000 Census for the
City, St. Louis County, the State of Missouri and the United States:
Per Capita Income
1999 (dollars)
St. Louis County
State of Missouri
United States
$43,288
27,595
19,936
21,587
Median Family Income
1999 (dollars)
$102,987
61,680
46,044
50,046
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The following table presents per capita income(1) for St. Louis County and the State of Missouri for
the years 2000 through 2004, the latest date for which such information is available:
Year
St. Louis County
Per Capita Income
2000
2001
2002
2003
2004
State of Missouri
Per Capita Income
$39,987
39,999
41,698
43,392
45,101
$27,241
27,809
28,358
29,210
30,475
(1)
“Per Capita Personal Income” is the annual total personal income of residents divided by the resident
population as of July 1. “Personal Income” is the sum of net earnings by place of residence, rental
income of persons, personal dividend income, personal interest income, and transfer payments. “Net
Earnings” is earnings by place of work - the sum of wage and salary disbursements (payrolls), other
labor income, and proprietors’ income - less personal contributions for social insurance, plus an
adjustment to convert earnings by place of work to a place-of-residence basis. Personal Income is
measured before the deduction of personal income taxes and other personal taxes and is reported in
current dollars (no adjustment is made for price changes).
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Employment
The top employers located within the City are as follows:
Employer
Type of Business/Products
St. Luke’s Hospital
Rockwood School District
Parkway School District
Pfizer
McBride & Son Management Co.
Amdocs, Inc.
Reinsurance Group of America
Rose International
Dierbergs Markets, Inc.
Taylor Morley
Health care
Public education
Public education
Pharmaceutical research/development
Homebuilder, developer and contractor
Billing and management software
Insurance
Research and software development
Supermarket
Homebuilder, developer and contractor
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Number of
Employees
3,334
3,053
2,200
1,700
530
500
464
450
407
351
Sales Tax Levy and Collections
The sales tax rate in the City is 7.075%. The components are as follows:
State
General Fund
Education
Conservation
Parks and Soils
St. Louis County
General
Transportation
MetroLink
Park
Chesterfield
Capital Improvements
Parks and Stormwater
3.000%
1.000%
0.125%
0.100%
1.000%
0.500%
0.250%
0.100%
0.500%
0.500%
The City’s tax rate does not include the 3/8 of one percent TDD Sales Tax which is imposed by the
District only within the boundaries of the District.
ABSENCE OF LITIGATION
There is no controversy, suit or other proceeding of any kind pending or, to the District’s knowledge,
threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting in any
way the legal organization of the District or its boundaries, or the right or title of any of its officers to their
respective offices, or the legality of any official act shown to have been done in connection with the issuance of
the Series 2006 Bonds, or the constitutionality or validity of the Series 2006 Bonds, or any of the proceedings had
in relation to the authorization, issuance or sale thereof.
LEGAL MATTERS
Legal matters incident to the authorization, issuance and sale of the Series 2006 Bonds are subject to the
approving legal opinion of Armstrong Teasdale LLP, St. Louis, Missouri, Bond Counsel, whose approving
opinion will be delivered with the Series 2006 Bonds. The expected form of such opinion is attached as
Appendix C hereto. Certain legal matters will be passed upon for the District by its counsel, Armstrong
Teasdale LLP, St. Louis, Missouri. Certain legal matters will be passed upon for the Underwriter by Gilmore
& Bell, P.C., St. Louis, Missouri.
TAX MATTERS
Opinion of Bond Counsel
Federal and Missouri Tax Exemption. In the opinion of Armstrong Teasdale LLP, Bond Counsel, under
existing law, the interest on the Series 2006 Bonds (including any original issue discount properly allocable to
an owner thereof) is excluded from gross income for federal and Missouri income tax purposes and is not an item
of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. It
should be noted however, that for the purpose of computing the alternative minimum tax imposed on
corporations (as defined for federal income tax purposes), such interest is taken into account in determining
-38-
adjusted current earnings. The opinions set forth in this paragraph are subject to the condition that the District
comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be
satisfied subsequent to the issuance of the Series 2006 Bonds in order that interest thereon be, or continue to be,
excluded from gross income for federal income tax purposes. The District has covenanted to comply with each
such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the
Series 2006 Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the
Series 2006 Bonds. The Series 2006 Bonds have not been designated as “qualified tax-exempt obligations” for
purposes of Section 265(b) of the Code.
Bond Counsel expresses no opinion regarding other federal or Missouri tax consequences arising with
respect to the Series 2006 Bonds.
Original Issue Discount Bonds
In the opinion of Bond Counsel, subject to the conditions set forth above, the original issue discount in
the selling price of each Series 2006 Bond (hereinafter referred to as the “OID Bonds”), to the extent properly
allocable to each owner of such Series 2006 Bond, is excludable from gross income for federal income tax
purposes with respect to such owner. Original issue discount is the excess of the stated redemption price at
maturity of an OID Bond over the initial offering price to the public (excluding underwriters and
intermediaries) at which price a substantial amount of the OID Bonds were sold. Under Section 1288 of the
Code, original issue discount on tax-exempt bonds accrues on a compound basis. For an owner who acquires
an OID Bond in this offering, the amount of original issue discount that accrues during any accrual period
generally equals (i) the issue price of such OID Bond plus the amount of original issue discount accrued in all
prior accrual periods, multiplied by (ii) the yield to maturity on such OID Bond (determined on the basis of
compounding at the close of each accrual period and properly adjusted for the length of the accrual period),
less (iii) any interest payable on such OID Bond during such accrual period. The amount of original issue
discount so accrued in a particular accrual period will be considered to be received ratably on each day of the
accrual period, will be excluded from gross income for federal income tax purposes, and will increase the
owner’s tax basis in such OID Bond. Any gain realized by an owner from a sale, exchange, payment or
redemption of an OID Bond would be treated as gain from the sale or exchange of such Series 2006 Bond.
Owners of OID Bonds should consult with their individual tax advisors to determine whether the application of
the proposed original issue discount federal regulations will require them to include, for State and local income
tax purposes, an amount of interest on the OID Bonds as income even though no corresponding cash interest
payment is actually received during the tax year.
Other Tax Consequences
Prospective purchasers of the Series 2006 Bonds should be aware that there may be tax consequences of
purchasing the Series 2006 Bonds other than those discussed under the caption “TAX MATTERS – Opinion of
Bond Counsel,” including the following:
(1)
Section 265 of the Code denies a deduction for interest on indebtedness incurred or
continued to purchase or carry the Series 2006 Bonds or, in the case of a financial institution, that
portion of such institution’s interest expense allocable to interest on the Series 2006 Bonds;
(2)
with respect to insurance companies subject to the tax imposed by Section 831 of the
Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain
items, including interest on the Series 2006 Bonds;
(3)
interest on the Series 2006 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;
-39-
(4)
passive investment income, including interest on the Series 2006 Bonds, may be
subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that
have Subchapter C earnings and profits at the close of the taxable year, if greater than 25 % of the gross
receipts of such Subchapter S corporation is passive investment income; and
(5)
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 the Series 2006 Bonds.
Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2006 Bonds
should consult their own tax advisors as to the applicability of these tax consequences.
UNDERWRITING
A.G. Edwards & Sons, Inc. (the “Underwriter”) has agreed, subject to certain conditions, to purchase the
Series 2006 Bonds from the District at an aggregate purchase price of $____________ (which takes into account
an original issue discount of $______ and an Underwriter’s discount of $__________). The Underwriter will be
obligated to accept delivery and pay for all of the Series 2006 Bonds if any are delivered.
The Series 2006 Bonds are being purchased by the Underwriter from the District in the normal course of
the Underwriter’s business activities. The Underwriter intends to offer the Series 2006 Bonds to the public at a
price not in excess of the offering price set forth on the cover page of this Official Statement. The Underwriter
may allow concessions from the public offering price to certain dealers, banks and others. After the initial public
offering, the public offering price may be varied from time to time by the Underwriter.
CERTAIN RELATIONSHIPS
Armstrong Teasdale LLP, Bond Counsel and the District’s Counsel, has also represented the
Underwriter in matters unrelated to the issuance of the Series 2006 Bonds but is not representing the
Underwriter in connection with the issuance of the Series 2006 Bonds.
PROJECTED REVENUE COLLECTIONS
Development Strategies, Inc., St. Louis, Missouri, has prepared the Projected Revenue Collections (the
“Projections”) which are attached hereto as Appendix A. Certain financial and statistical data included in this
Official Statement have been excerpted from the Projections. The District makes no representation or warranty
(express or implied) as to the accuracy or completeness of any financial, technical or statistical data or any
estimates, projections, assumptions or expressions of opinion set forth in the Projections. No party assumes any
responsibility to update such information after the delivery of the Series 2006 Bonds. Pursuant to the Collection
Agreement and the Indenture, the amount of such TDD Sales Tax available to repay the Bonds consists only of
the amount of the TDD Sales Tax Revenues less (i) $2,084 (increased each year by a percentage equal to the
percentage increase in the Consumer Price Index for the preceding calendar year) to be deposited each month
in the Operating Fund, (ii) 1% of the TDD Sales Tax Revenues, which is retained by the City for the cost of
communicated to the District which suit or claim challenges the collection of such sum which are appropriated
by the District for such purpose.
-40-
average life of the Series 2006 Bonds, the Underwriter assumed that all taxpayers would promptly pay their
sales taxes and would retain 2% of the amount of the taxes owed. See “PROJECTED NET REVENUES
AND NET DEBT SERVICE” herein.
Appendix A must be read in its entirety to understand the assumptions upon which the forecasts
are based and the qualifications that have been made. There is no assurance that the forecasts will be
achieved. Actual future events may vary from the forecasts, and such variances may be material.
RATINGS
Fitch Ratings (“Fitch”) will assign the Series 2006 Bonds the rating set forth on the cover page hereof
conditioned upon the issuance and delivery by the Bond Insurer at the time of delivery of the Series 2006
Bonds of the Bond Insurance Policy insuring the timely payment of the principal of and interest on the Series
2006 Bonds. Fitch has assigned an underlying rating for the Series 2006 Bonds, without taking into account
the benefit of the Bond Insurance Policy, of “A–.” Such ratings reflect only the views of such rating agency,
and an explanation of the significance of such ratings may be obtained therefrom. There is no assurance that
such ratings will remain in effect for any given period of time or that they will not be revised downward or
withdrawn entirely by said rating agency if, in its judgment, circumstances warrant. Any such downward
revision or withdrawal of such ratings may have an adverse affect on the market price of the Series 2006
Bonds.
MISCELLANEOUS
Information set forth in this Official Statement has been furnished or reviewed by certain officials of the
District and other sources, as referred to herein, which are believed to be reliable. Any statements made in this
Official Statement involving matters of opinion, estimates or projections, whether or not so expressly stated, are
set forth as such and not as representations of fact, and no representation is made that any of the estimates or
projections will be realized. The descriptions contained in this Official Statement of the Series 2006 Bonds do
not purport to be complete and are qualified in their entirety by reference thereto.
The form of this Official Statement, and its distribution and use, has been approved by the District.
Neither the District nor any of its officers or employees, in either their official or personal capacities, has made
any warranties, representations or guarantees regarding the financial condition of the District or the District’s
ability to make payments required of it; and further, neither the District nor its officers, directors or employees
assumes any duties, responsibilities or obligations in relation to the issuance of the Series 2006 Bonds other than
those either expressly or by fair implication imposed on the District.
CHESTERFIELD VALLEY TRANSPORTATION
DEVELOPMENT DISTRICT
By:
Title:
-41-
Chairman
APPENDIX A
PROJECTED REVENUE COLLECTIONS
FINANCIAL PROJECTIONS FOR
CHESTERFIELD VALLEY TAX
INCREMENT FINANCING AND
TRANSPORTATION DEVELOPMENT
DISTRICT
CHESTERFIELD, MISSOURI
Prepared for
May 2006
DEVELOPMENT STRATEGIES
CONSULTANTS IN REAL ESTATE, ECONOMIC, AND COMMUNITY DEVELOPMENT
10 S. Broadway x St. Louis, Missouri 63102-1743 x (314) 421-2800
®
®
CONSULTANTS IN REAL ESTATE, COMMUNITY, AND ECONOMIC DEVELOPMENT
REAL ESTATE APPRAISAL
May 24, 2006
Mr. Jeremy Craig
Director of Finance and Administration
DBA Chesterfield Valley Transportation Development District
690 Chesterfield Parkway West
Chesterfield, Missouri 63017-0670
RE: Updated Financial Projections for Chesterfield Valley TIF and TDD
Development Strategies is pleased to submit the accompanying projections of future local tax revenues that the City of Chesterfield can apply toward repayment of TIF bonds and TDD bonds. The
report is an update to the TIF report we submitted to the City of Chesterfield in 2001.
The revised projections described in this report indicate that the TIF debt could readily be retired by
the end of 2008—and probably earlier. This would allow the full amount of TDD revenues to accrue to the TDD at an earlier date, and improve the annual cash flow for retiring TDD obligations.
Moreover, our projections suggest that there is potential for early retirement of the presently anticipated level of TDD bonds, as well.
In short, given the updated assumptions and growth potential in Chesterfield Valley, the TDD tax
could generate over $92 million (in 2006 dollar values) over the allowable twenty-five year period,
provided the currently outstanding TIF bonds are fully repaid by the end of 2008. This range of
TDD revenue is more than sufficient to support the proposed $25 million in TDD-eligible capital
improvement projects that the city desires to undertake.
Development Strategies appreciates the opportunity to assist you with this updated tax projection
analysis for Chesterfield Valley. Should you have any questions about the following report, please call.
Respectfully submitted on behalf of
DEVELOPMENT STRATEGIES, INC.
Robert M. Lewis, AICP, CEcD
Principal
Naomi Shanker
Real Estate Analyst
Richard C. Ward, CRE, CEcD, AICP
Robert M. Lewis, AICP, CEcD
Larry E. Marks, AIA, AICP
Brad Beggs, MAI
10 South Broadway x St. Louis, Missouri 63102-1743 x 314-421-2800 x Fax 314-421-3401
[email protected]
Brad Eilerman
Karin M. Hagaman
Table of Contents
1.0 INTRODUCTION .................................................................................................................................................. 1
2.0 METHODOLOGY ................................................................................................................................................. 2
2.1 CITY OF CHESTERFIELD DATA ............................................................................................................................... 3
2.2 UMSL RESEARCH DATA ....................................................................................................................................... 3
3.0 TIF DEBT PROJECTIONS.................................................................................................................................... 5
3.1 TDD REVENUE POTENTIAL ................................................................................................................................... 5
4.0 CONCLUSIONS ...................................................................................................................................................... 7
APPENDIX A: ESTIMATED SCHEDULE OF APPROVED DEVELOPMENT ................................................. 8
TIF AND TDD PROJECTIONS
1.0 INTRODUCTION
CHESTERFIELD VALLEY
Development Strategies, Inc. (DSI) was retained by the City of Chesterfield (the “City”) to assist it and the Chesterfield Valley Transportation
Development District (the “District”) with an update of tax revenue projections emanating from tax increment financing (TIF) and transportation development district (TDD) financing.1 The City has in place a TIF
district for the Chesterfield Valley (the “Valley”), which took effect in
1995 and expires in 2017. TIF captures 100% of incremental local real
property taxes and 50% of incremental local sales taxes and local utilities taxes to pay for certain public improvement expenses. The principal
expense covered by the current TIF in the Valley was for construction of
a 500-year levee to protect the Valley from flooding.
In March 2006, the District imposed a 3/8 cent TDD sales tax which will
expire at the end of February 2031, a 25-year period. While the TIF district remains in force, it captures one-half of these new TDD sales tax
revenues according to Missouri law. Thus, the TIF special allocation
fund is expected to grow more rapidly than earlier projected because of
these new sales taxes. On the other hand, the TDD fund will not grow as
rapidly as desired until the TIF debt is fully retired.
In light of these new tax base conditions and a desire by the City to utilize the higher-than-expected TIF funds to retire outstanding TIF debt
earlier than originally scheduled, DSI was charged with forecasting the
future TIF and TDD revenue.
1
The previous report by Development Strategies that this report updates is entitled Revenue Projections for Tax
Increment Financing Bonds: Chesterfield Valley Redevelopment Area (September 2001). That report, in turn, was
an update to the original TIF plan projections from 1995 which did not anticipate significant amounts of retail development in the Valley. With the opening and growth of Chesterfield Commons and related development, however, sales taxes became a much more prominent component of TIF revenues and, therefore, increased the rate at
which TIF dollars accumulated.
1
2.0 METHODOLOGY
CHESTERFIELD VALLEY
DSI employed two primary sources of data to project future tax revenue
for the TIF Redevelopment Area and the Transportation Development
District.
1. The first data source was actual TIF revenue experience as provided
by the City for the years 2001 through 2005. Rather than rely on a
trend of expected revenues, as the earlier report had done, the present report is able to rely on “real life” revenues over five calendar
years in order to modify future expectations. The projections, however, cannot be based totally on current development in the Valley
because more growth is anticipated. The trend that is based on the
2001-2005 experience, therefore, required adjustments to account for
future anticipated development in the Valley.
Assumptions for future development in the Valley are based on information received from the Economic and Community Development Office of the City of Chesterfield. As of 2006, the Planning
Department approved a number of proposed developments. These
proposed developments include retail, office, and industrial projects
that total nearly 1.5 million square feet of additional development
through 2010. The projected build-out of this development is summarized in Appendix A.
2. Assumptions for taxable sales from non-retail businesses, an assumption which was not included in the previous report, were drawn
from a recent report by the Public Policy Research Center at the
University of Missouri-St. Louis (UMSL) regarding a similar analysis for the City of Creve Coeur, Missouri, also located in St. Louis
County2. A number of businesses in the Valley that are not generally classified as retailers (e.g., wholesalers, manufacturers, and office functions) nevertheless make sales that are subject to sales, or
2
Metropolitan Information and Data Analysis Services, Public Policy Research Center, University of Missouri-St.
Louis. An Economic and Fiscal Impact Analysis of the City of Creve Coeur. Prepared for the Creve Coeur Economic Development Committee (March 2004).
2
CHESTERFIELD VALLEY
gross receipts, taxes according to Missouri law. Unfortunately, useful data on these particular businesses in the Valley are not readily
available. Therefore, the UMSL report enabled DSI to develop useable assumptions about the ratio of retail-to-non-retail sales in the
Valley.
DSI used these two sources to determine the annual stream of tax revenue that the City could anticipate over the remaining years of the TIF
district and throughout the twenty-five year period of the TDD. In addition, based on conversations with the City and its advisors, DSI assumed
that the TIF would be repaid in 2008, thereby allowing the TDD to capture one hundred percent of the TDD sales tax revenues from 2009 until
its expiration in 2031.
2.1 CITY OF
CHESTERFIELD DATA
The City has been tracking its actual TIF revenue against the projections
contained in the previous DSI report since 2001. The new forecast scenarios are, therefore, built partially on the trend exhibited by the real
property taxes, sales taxes, and utility taxes during the past five years.
However, projections from the historical trend do not inherently incorporate the new information received from the City with respect to approved
future development in the Valley3. Therefore, sales, utility, and property
tax revenue projections were adjusted to incorporate the new development anticipated to occur in the Valley.
Since the information received is actual tax revenue and not sales revenue, DSI also estimated annual taxable sales in order to have a base of
taxable sales from which to project potential TDD revenues using the
new Ǫ-cent sales tax. In addition, the historical data obviously do not
include the new 3/8-cent TDD sales tax. This updated report includes the
TDD tax, effective March 2006, which is calculated based on the adjusted taxable sales projections.
2.2 UMSL RESEARCH
DATA
In addition to the data received from the City with respect to future de-
3
As of 2006, the City approved development proposals which would result in the build-out schedule outlined in
Appendix A. DSI did not obtain a list of those projects, only the resulting square footage.
3
CHESTERFIELD VALLEY
velopment in the Valley, DSI made assumptions on the volume of taxable sales that could be anticipated from non-retail businesses.4 As
noted earlier, the Public Policy Research Center at the University of
Missouri-St. Louis conducted an exhaustive fiscal impact analysis for
the City of Creve Coeur in March 2004. That report analyzed the current businesses in Creve Coeur and the impact of new development in a
variety of industries. As such, the data on the current composition of
businesses in Creve Coeur was determined by DSI to be a useful guide
in estimating the probable share of sales tax revenue that will be generated in the Valley by non-retail businesses.
The conclusion is that non-retail businesses would contribute approximately fifteen percent to the taxable sales in the Valley.
4
While retail sales tax generation in the Valley is dominated by Chesterfield Commons and related businesses,
quite often, sales made by many non-retailers (e.g., wholesalers and manufacturers) are also subject to the sales tax
because the goods are purchased by the “end user” rather than in a previous segment of the production process.
4
3.0 TIF DEBT
PROJECTIONS
CHESTERFIELD VALLEY
Using the adjusted data for the last five years of actual TIF revenue collections as a trend line for forecasting the future and assuming a target
for debt retirement in 2008, our projections yield approximately $76.6
million in tax revenue available for TIF debt retirement that should be
generated for the three years of 2006, 2007 and 2008.
City officials have indicated that, as of April 15, 2006, approximately
$29 million of TIF bonds and notes were still outstanding. The TIF
revenues over the next three years (including one-half of the new TDD
sales taxes) should be quite adequate to retire the debt in advance of
2008, possibly during 2007.
3.1 TDD REVENUE
POTENTIAL
During the TIF period, one-half of the TDD sales tax revenue is applied
to TIF bond obligations and the remaining half is applied toward the
TDD bond obligations. Once the TIF bonds and notes are repaid in full,
the full amount of the TDD sales tax revenue is available for TDD bond
obligations. Hence, the earlier the remaining TIF bonds and notes are
repaid the sooner one-hundred percent of the TDD tax revenue will be
available for TDD purposes.
To be conservative, DSI projected the potential revenue stream from the
TDD sales tax using a scenario in which the remaining TIF debt is repaid
at the end of 2008. These projections, shown on Table 3.1, result in a
total flow of nearly $210 million in TDD sales tax revenue available for
TDD-eligible expenditures over the allowable twenty-five year period.5
5
The TDD tax went into effect March 2006, therefore, TDD tax revenue for 2006 is pro-rata for a ten month period; TDD taxes will be administered by the city, therefore, projections reflect only a one month lag; TDD tax revenue accounts for 1% processing fee to the State but does not account for the 2% timely pay provision for merchants.
5
CHESTERFIELD VALLEY
Table 3.1: Projected Funds Available for TDD Bond Requirements
Assuming TIF Bonds Repaid at End of 2008
Chesterfield Valley TDD
TDD
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
TOTAL
Calendar
Year
Beginning 3/06
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
thru 2/28 2031
Estimated Taxable
Sales
$
674,072,000
968,604,000
1,103,636,000
1,239,825,000
1,377,205,000
1,459,516,000
1,579,964,000
1,700,411,000
1,820,858,000
1,941,305,000
2,061,752,000
2,182,200,000
2,302,647,000
2,423,094,000
2,543,541,000
2,663,988,000
2,784,435,000
2,904,883,000
3,025,330,000
3,145,777,000
3,266,224,000
3,386,671,000
3,507,118,000
3,627,566,000
3,748,013,000
644,743,000
$ 58,083,378,000
TDD Revenues Not
Diverted to TIF
$
1,147,000
1,754,000
2,029,000
4,392,000
5,074,000
5,397,000
5,833,000
6,280,000
6,728,000
7,176,000
7,623,000
7,750,000
8,518,000
8,966,000
9,413,000
9,861,000
10,308,000
10,756,000
11,203,000
11,651,000
12,098,000
12,546,000
12,994,000
13,441,000
13,889,000
2,368,000
$
209,195,000
6
4.0 CONCLUSIONS
CHESTERFIELD VALLEY
We agree with the opinion of City officials and its advisors that the TIF
bonds and notes could be retired by 2008—and possibly before the end of
2007. Consequently, more money is available sooner for the TDD bonds
which could facilitate early retirement of the TDD bonds as well, depending on how the current and future retail developments in the Valley perform over the next twenty-five years. Under the provided scenario, in
which TIF obligations cease in 2008, the TDD tax would generate a present
value of about $92.5 million, which is well above the support needed for
the estimated $25 million in TDD-eligible capital improvement projects
that the City has planned for the Valley.
7
CHESTERFIELD VALLEY
APPENDIX A: ESTIMATED SCHEDULE OF APPROVED DEVELOPMENT
Approved Developments by the Planning Department in Chesterfield Valley
As of 2006
Expected Year of
Development
2006
2007
2008
2009
2010
Office/Industrial
700,000
Retail
781,000
TOTAL
1,481,000
Office/Industrial
100,000
76,667
446,667
76,667
Retail
100,000
250,000
143,667
143,667
143,667
TOTAL
200,000
326,667
590,333
220,333
143,667
Cumulative
200,000
526,667
1,117,000
1,337,333
1,481,000
8
APPENDIX B
DEFINITIONS AND SUMMARY OF PRINCIPAL DOCUMENTS
DEFINITIONS AND SUMMARY OF PRINCIPAL DOCUMENTS
In addition to the words and terms defined elsewhere in this Official Statement, the following are
definitions of certain words and terms as used in the Indenture and this Official Statement.
“Additional Bonds” means any additional series of parity bonds issued, authenticated and delivered
pursuant to the Indenture.
“Additional Project” means the construction of any transportation project and related improvements in
the District that are permitted by the TDD Act and which have been approved by the District.
“Authorized District Representative” means the Chair of the Board of Directors of the District, or
such other person at the time designated to act on behalf of the District as evidenced by written certificate
furnished to the Trustee containing the specimen signature of such person and signed on behalf of the District
by its Chair. Such certificate may designate an alternate or alternates, each of whom shall be entitled to
perform all duties of the Authorized District Representative.
“Authorized Denominations” means $5,000 or any integral multiple thereof.
“Beneficial Owner” means, whenever used with respect to a Bond, the person in whose name such
Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant, or
such person's subrogee.
“Bond” or “Bonds” means the Series 2006 Bonds and any Additional Bonds issued on a parity basis
therewith.
“Bond Counsel” means Armstrong Teasdale LLP or any other attorney or firm of attorneys with a
nationally recognized standing in the field of municipal bond financing and experienced in matters relating to
the tax exemption of interest payable on obligations of states and their instrumentalities and political
subdivisions, and which is selected by the City and acceptable to the Trustee.
“Bond Insurance Policy” means the financial guaranty bond insurance policy issued by the Bond
Insurer on the date of delivery of the Series 2006 Bonds insuring the payment when due of the principal of and
interest on the Series 2006 Bonds as provided therein.
“Bond Insurer” means CIFG Assurance North America, Inc. or any successors or assigns thereof.
“Bond Resolution” means the Resolution of the District, authorizing the execution and delivery of the
Indenture and the issuance of the Series 2006 Bonds.
“Business Day” means any day other than a Saturday, Sunday or any other day on which banking
institutions in the city in which the principal corporate trust office of the Trustee is located are required or
authorized by law to close.
“Cede & Co.” means Cede & Co., the nominee of the Securities Depository, and any successor
nominee of the Securities Depository with respect to the Bonds.
“City” means the City of Chesterfield, Missouri, a third class city and political subdivision of the
State.
“Code” means the Internal Revenue Code of 1986, as amended, and the applicable regulations,
temporary regulations and proposed regulations thereunder.
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“Collection Agreement” means the Sales Tax Collection Agreement dated as of __________ 1, 20___
between the District and the City.
“Consumer Price Index” means the consumer price index reported in the U.S. Department of Labor,
Bureau of Labor Statistics Report for All Urban Consumers - U.S. City Average.
“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate executed by the
District in connection with the issuance of the Series 2006 Bonds.
“Cooperation Agreement” means the Intergovernmental Cooperation Agreement dated as of
October 1, 2006 among the District, the City and St. Louis County, Missouri.
“Debt Service Fund” means the fund by that name created in the Indenture.
“Debt Service Requirements” means with respect to any Bonds for any period of time for which
calculated, the aggregate of the payments to be made during such period in respect of principal (whether at
maturity or otherwise) and interest on such Bonds; provided that such payments are excluded from Debt
Service Requirements to the extent that cash or non-callable Government Securities are on deposit in an
irrevocable escrow or trust account in accordance with the Indenture and such amounts (including, where
appropriate, the earnings or other increment to accrue thereon) are required to be applied to pay principal or
interest and are sufficient to pay such principal or interest; and provided, further, that the Debt Service
Requirements applicable to the Series 2006 Bonds shall be deemed to be as set forth in an exhibit to the
Indenture; and provided, further, that the Debt Service Requirements for any Additional Bonds which are
subject to special mandatory redemption shall be the amounts, as set forth in a certificate of the purchaser or
underwriter of such Additional Bonds delivered to the Trustee and the District for all remaining periods ending
each year on April 15 (commencing on the first April 15 occurring at least six (6) months after the proposed
date of issuance of Additional Bonds) through and including the maturity date thereof.
“Debt Service Reserve Fund” means the fund by that name created in the Indenture.
“Debt Service Reserve Requirement” means as of any computation date, a sum equal to the lesser of
(i) the maximum annual Debt Service Requirements for all Bonds then Outstanding, (ii) one hundred twentyfive percent (125%) of the average annual Debt Service Requirements for all Bonds then Outstanding, or
(iii) ten percent (10%) of the original principal amount of the Bonds.
“Event of Default” means any event or occurrence as defined in the Indenture.
“Financing Documents” means the Indenture, the Tax Compliance Agreement, the Continuing
Disclosure Certificate, the Collection Agreement, the Cooperation Agreement and any other documents
entered into in connection with the Transportation Project.
“Fiscal Year” means the fiscal year adopted by the District for accounting purposes, which as of the
execution of the Indenture commences on January 1 and ends on December 31.
“Future Projects Account” means the account by that name created in the Indenture.
“Government Securities” means direct obligations of, or obligations the payment of the principal of
and interest on which are unconditionally guaranteed by, the United States of America and backed by the full
faith and credit thereof.
“Historical Debt Service Coverage Ratio” means the ratio determined by dividing (a) a numerator
equal to the Pledged Revenues for that historical period of time and the fees and expenses of the Trustee for
such period, by (b) a denominator equal to the maximum annual Debt Service Requirements of the Series 2006
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Bonds, any Additional Bonds then Outstanding and the Additional Bonds proposed to be issued, assuming for
this purpose only that the proposed Additional Bonds are issued in the year prior to the first year that is
measured by the Historical Debt Service Coverage Ratio.
“Immediate Notice” means notice given no later than the close of business on the date required by the
provisions of the Indenture by telegram, telex, telecopier or other telecommunication device to such phone
numbers or addresses as are specified in the Indenture or such other phone number or address as the addressee
shall have directed in writing, the receipt of which is confirmed by telephone, promptly followed by written
notice by first-class mail, postage prepaid to such addressees.
“Investment Securities” means any of the following securities purchased in accordance with the
Indenture, if and to the extent the same are at the time legal for investment of the funds being invested:
(a)
Government Securities;
(b)
bonds, notes or other obligations of the State, or any political subdivision of the
State, that at the time of their purchase are rated in either of the two highest rating categories by a
nationally recognized rating service;
(c)
repurchase agreements with any bank, bank holding company, savings and loan
association, trust company, or other financial institution organized under the laws of the United States
or any state, including, without limitation, the Trustee or any of its affiliates, that are continuously and
fully secured by any one or more of the securities described in clause (a) or (b) above and have a
market value, exclusive of accrued interest, at all times at least equal to the principal amount of such
repurchase agreement and are held in a custodial or trust account for the benefit of the District;
(d)
obligations of Fannie Mae, the Government National Mortgage Association, the
Federal Financing Bank, the Federal Intermediate Credit Corporation, Federal Banks for
Cooperatives, Federal Land Banks, Federal Home Loan Banks, Farmers Home Administration and
Federal Home Loan Mortgage Corporation;
(e)
certificates of deposit or time deposits, whether negotiable or nonnegotiable, issued
by any bank or trust company organized under the laws of the United States or any state, including,
without limitation, the Trustee or any of its affiliates, provided that such certificates of deposit or time
deposits shall be either (1) continuously and fully insured by the Federal Deposit Insurance
Corporation, or (2) continuously and fully secured by such securities as are described above in clause
(a) or (b) above, which shall have a market value, exclusive of accrued interest, at all times at least
equal to the principal amount of such certificates of deposit or time deposits;
(f)
money market mutual funds that are invested in Government Securities or agreement
to repurchase Government Securities; and
(g)
any other securities or investments that are lawful for the investment of moneys held
in such funds or accounts under the laws of the State.
“Levee Agreement” means the Intergovernmental Cooperation Agreement dated as of October 1, 2006
among the City, the Monarch–Chesterfield Levee District and the District.
“Net Proceeds” means the TDD Sales Tax Revenues that have been appropriated by the District to the
payment of the Bonds less (i) $2,084 (increased each year by a percentage equal to the percentage increase in
the Consumer Price Index for the preceding calendar year) each month which is to be deposited in the
Operating Fund, (ii) 1% of the TDD Sales Tax Revenues, which is retained by the City for the cost of
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communicated to the District which suit or claim challenges the collection of such sum.
“Operating Fund” means the fund by that name created in the Indenture.
“Opinion of Counsel” means a written opinion of an attorney or firm of attorneys addressed to the
Trustee, for the benefit of the Trustee and the Owners of the Bonds, who may be (except as otherwise
expressly provided in the Indenture) counsel to the District, the Owners of the Bonds or the Trustee, and who
is acceptable to the Trustee.
“Original Purchaser” means A.G. Edwards & Sons, Inc., St. Louis, Missouri.
“Outstanding” means when used with reference to Bonds, as of a particular date, all Bonds theretofore
authenticated and delivered under the Indenture except:
(a)
cancellation;
(b)
Bonds theretofore cancelled by the Trustee or delivered to the Trustee for
Bonds which are deemed to have been paid in accordance with the Indenture;
(c)
Bonds alleged to have been mutilated, destroyed, lost or stolen for which indemnity
has been received as provided in the Indenture; and
(d)
Bonds in exchange for or in lieu of which other Bonds have been authenticated and
delivered pursuant to the Indenture.
“Owner” or “Registered Owner” means the person in whose name any Bond is registered on the
Register; provided that the Bond Insurer shall be recognized as the registered owner of each Series 2006 Bond
for the purposes of exercising all rights and privileges available thereto.
“Participant” shall mean any broker-dealer, bank or other financial institution for which the Securities
Depository holds Bonds as securities depository.
“Paying Agent” means the Trustee and any other bank or trust institution organized under the laws of
any state of the United States of America or any national banking association designated by the Indenture as
paying agent for the Bonds at which the principal of and interest on such Bonds shall be payable.
“Payment Date” means any date on which the principal of or interest on any Bonds is payable.
“Pledged Revenues” means all Net Proceeds and all moneys held in the Project Fund, the Revenue
Fund, the Debt Service Fund and the Debt Service Reserve Fund under the Indenture, together with investment
earnings thereon.
“Project” or “Transportation Project” means construction of street improvements and related
infrastructure improvements, and land acquisition related to said street and infrastructure improvements, in the
District, that are described in the Indenture. See “THE TRANSPORTATION PROJECT” herein.
“Project Fund” means the fund by that name created in the Indenture.
“Projected Debt Service Coverage Ratio” means the ratio determined by dividing (a) a numerator
equal to the projected Pledged Revenues for the succeeding twenty-four (24) months, less the projected fees
and expenses of the Trustee for such period, by (b) a denominator equal to the maximum annual Debt Service
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Requirements of the Series 2006 Bonds, any Additional Bonds then Outstanding and the Additional Bonds
proposed to be issued for the succeeding twenty-four (24) month period.
“Rebate Fund” means the fund by that name created in the Indenture.
“Record Date” for the interest payable on any Interest Payment Date means the last calendar day,
whether or not a Business Day, of the month next preceding such Interest Payment Date.
“Register” means the registration books of the District kept by the Trustee to evidence the registration,
transfer and exchange of Bonds.
“Registrar” means the Trustee when acting as such under the Indenture.
“Representation Letter” means the Blanket Letter of Representation from the District to the Securities
Depository with respect to the Bonds.
“Revenue Fund” means the fund by that name created in the Indenture.
“Securities Depository” means The Depository Trust Company, New York, New York.
“Series 2006 Bond” means the District’s Transportation Sales Tax Revenue Bonds, Series 2006 in the
aggregate principal amount of $22,450,000.
“State” means the State of Missouri.
“Supplemental Indenture” means any indenture supplemental or amendatory to the Indenture entered
into by the District and the Trustee pursuant to the Indenture.
“Tax Compliance Agreement” means the Tax Compliance Agreement dated as of October 1, 2006,
between the District and the Trustee, as from time to time amended in accordance with the provisions thereof.
“TDD Act” means the Missouri Transportation Development District Act, Sections 238.200 to
238.275, inclusive, of the Revised Statutes of Missouri, as amended.
“TDD Captured Revenues” means that portion (50%) of the TDD Sales Tax Revenues that are
payable to the City for deposit in the City’s special allocation fund.
Transportation Development District Sales Tax Trust Fund pursuant to the provisions of the Sales Tax
Collection Agreement and the Cooperation Agreement.
“TIF Act” means the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 to
99.865, inclusive, of the Revised Statutes of Missouri, as amended.
“TIF Bonds” means the $50,945,000 original principal amount of Tax Increment Refunding and
Improvement Revenue Bonds, Series 2002 (Chesterfield Valley Projects) issued by the City.
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“Transportation Development District Sales Tax” or “TDD Sales Tax” means the sales tax imposed
pursuant to the TDD Act at a rate of 3/8 of one percent on all retail sales made in the District which are subject
to taxation pursuant to the provision of Sections 144.010 to 144.525, inclusive, of the Revised Statutes of
Missouri, as amended, with certain exceptions listed in the TDD Act.
“Transportation Development District Sales Tax Resolution” means Resolution No. 06-001 of the
District passed on February 24, 2006, authorizing the imposition of the TDD Sales Tax.
“Transportation Development District Sales Tax Trust Fund” or “TDD Sales Tax Fund” means the
Chesterfield Valley Transportation Development District Sales Tax Trust Fund ratified and confirmed in the
Indenture.
“Trust Estate” means the Trust Estate described in the granting clauses of the Indenture.
“Trustee” means Wells Fargo Bank, N.A., Kansas City, Missouri, and its successor or successors and
any other association or corporation which at any time may be substituted in its place pursuant to and at the
time serving as trustee under the Indenture.
SUMMARY OF THE INDENTURE
The following, in addition to the information contained above under the heading “THE BONDS”,
summarizes certain provisions of the Indenture. This summary does not purport to be complete, and reference is
made to the Indenture for the complete provisions thereof.
Creation of Funds and Accounts
The following funds of the District are created and established with the Trustee:
(a)
Revenue Fund.
(b)
Debt Service Fund, which shall contain a Bond Payment Account and a Redemption
Account.
(c)
Debt Service Reserve Fund.
(d)
Project Fund, which shall contain a Cost of Issuance Account, a Project Account and
a Future Projects Account.
(e)
Rebate Fund.
(f)
Operating Fund.
Each fund and account shall be maintained by the Trustee as a separate and distinct trust fund or account and
the moneys therein shall be held, managed, invested, disbursed and administered as provided in the Indenture.
All moneys deposited in the funds shall be used solely for the purposes set forth in the Indenture. The Trustee
shall keep and maintain adequate records pertaining to each fund and all disbursements therefrom.
The District ratifies and confirms the establishment of the Chesterfield Valley Transportation
Development District Sales Tax Trust Fund, which has been established by the District. The District has
agreed to pay, on the fifteenth calendar day of each month (or the next Business Day thereafter if the fifteenth
day is not a Business Day), to the Trustee for deposit in the TDD Sales Tax Revenues Account of the Revenue
Fund, the TDD Sales Tax Revenues to the extent appropriated by the District for such purpose.
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Security for the Bonds
The Bonds and the interest thereon shall be special, limited obligations of the District payable solely
from the Pledged Revenues and held by the Trustee as provided in the Indenture, and are secured by a transfer,
pledge and assignment of and a grant of a security interest in the Trust Estate to the Trustee and in favor of the
Owners of the Bonds, as provided in the Indenture.
The Bonds and the interest thereon do not constitute a debt of the District, the City of Chesterfield,
Missouri, St. Louis County, Missouri, the Missouri Highways and Transportation Commission, the State or
any political subdivision thereof, and do not constitute an indebtedness within the meaning of any
constitutional, charter or statutory debt limitation or restriction.
No recourse shall be had for the payment of the principal of or interest on any of the Bonds or for any
claim based thereon or upon any obligation, covenant or agreement contained in the Indenture, against any
past, present or future elected official of the District or any trustee, officer, official, employee or agent of the
District, as such, either directly or through the District or any successor to the District, under any rule of law or
equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such
liability of any such official of the District, trustee, officer, official, employee or agent as such is expressly
waived and released as a condition of and in consideration for the execution of the Indenture and the issuance
of any of the Bonds.
Annual Appropriation
The District has adopted a budget for the 2006 Fiscal Year which appropriates the TDD Sales Taxes
Revenues collected during such Fiscal Year for application as provided in the Cooperation Agreement. The
District covenants and agrees that the officer of the District at any time charged with the responsibility of
formulating budget proposals is hereby directed to include in the budget proposal submitted to the District
Board of Directors for each Fiscal Year a request for an appropriation of the TDD Sales Tax Revenues
collected during such Fiscal Year for application as provided in the Cooperation Agreement. Any funds
appropriated as the result of such a request shall be transferred by the City to the Trustee for deposit into
Revenue Fund at the times and in the manner provided in the Indenture. If the District Board of Directors has
failed to adopt a budget by the first day of a Fiscal Year, the budget for the prior Fiscal Year shall continue.
Revenue Fund
Moneys in the Revenue Fund on the 40th day (except as otherwise described below) prior to each
Payment Date (or if such date is not a Business Day, the immediately preceding Business Day) shall be applied
by the Trustee to the extent necessary for the purposes and in the amounts as follows:
First, for transfer to the Operating Fund, the sum of $2,084 (increased each year by a
percentage equal to the percentage increase in the Consumer Price Index for the preceding
calendar year) on the first day of each month;
Second, for transfer to the Rebate Fund when necessary, an amount sufficient to pay rebate, if
any, to the United States of America, owed under Section 148 of the Code, as directed in writing by
the District in accordance with the Tax Compliance Agreement;
Third, for transfer to the Bond Payment Account of the Debt Service Fund an amount
sufficient to pay the interest on the Bonds on the next succeeding Payment Date;
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Fourth, for transfer to the Bond Payment Account of the Debt Service Fund an amount
sufficient to pay the principal of and premium, if any, due on the Bonds by their terms on the next
succeeding Payment Date;
Fifth, for transfer to the Debt Service Reserve Fund such amount as may be required to
restore any deficiency in the Debt Service Reserve Fund if the amount on deposit in the Debt Service
Reserve Fund is less than the Debt Service Reserve Requirement;
Sixth, pay to the Trustee or any Paying Agent, an amount sufficient to pay any fees and
expenses which are due and owing to the Trustee or any Paying Agent, upon delivery to the District of
an invoice for such amounts (provided, however, that payments to the Trustee may not exceed $2,400
in any calendar year);
Seventh, if no TIF Bonds are outstanding (as evidenced by a written certificate of the City
delivered to the Trustee) for transfer to the Future Projects Account of the Project Fund up to
$500,000 annually until the amount on deposit in such Account totals $2,000,000; and
Eighth, if no TIF Bonds are outstanding (as evidenced by a written certificate of the City
delivered to the Trustee), for transfer to the Redemption Account of the Debt Service Fund, any
remaining funds, which shall be applied to the payment of the principal of and accrued interest on all
Bonds which are subject to redemption on the next succeeding Payment Date. See the caption “THE
BONDS–Redemption Provisions–Special Mandatory Redemption” herein.
Upon the payment in full of the principal of and interest on the Bonds (or provision has been made for
the payment thereof as specified in the Indenture) and the fees, charges and expenses of the Trustee and any
Paying Agents, and any other amounts required to be paid under the Indenture, all amounts remaining on
deposit in the TDD Sales Tax Revenue Account of the Revenue Fund shall be paid to the District for deposit
into the Transportation Development District Sales Tax Trust Fund.
Debt Service Fund
Except as otherwise provided in the Indenture, all amounts paid and credited to the Debt Service Fund
shall be expended solely for the payment of the principal of, redemption premium, if any, and interest on the
Bonds as the same mature and become due or upon the redemption thereof.
The District authorizes and directs the Trustee to withdraw sufficient moneys from the Debt Service
Fund to pay the principal of and interest on the Bonds as the same become due and payable and to make said
moneys so withdrawn available to the Paying Agent for the purpose of paying said principal of and interest on
the Bonds.
The Trustee shall use any moneys remaining in the Debt Service Fund to redeem all or part of the
Bonds Outstanding and interest to accrue thereon prior to such redemption, in accordance with and to the
extent permitted by the Indenture, so long as said moneys are in excess of the amount required for payment of
Bonds theretofore matured or called for redemption. The Trustee, upon the written instructions from the
District, signed by the Authorized District Representative, shall use moneys in the Redemption Account of the
Debt Service Fund on a best efforts basis for the purchase of Bonds in the open market to the extent practical
for the purpose of cancellation at prices not exceeding the principal amount thereof plus accrued interest
thereon to the date of such purchase.
If the moneys in the Debt Service Fund are insufficient to pay all accrued interest on the Bonds on any
Payment Date, then such moneys shall be applied ratably, according to the amounts due on such installment, to
the persons entitled thereto without any discrimination or privilege, and any unpaid portion shall accrue to the
next Payment Date, with interest thereon at the rate or rates specified in the Bonds to the extent permitted by
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law. If the moneys in the Debt Service Fund are insufficient to pay the principal of the Bonds on the maturity
date thereof, then such moneys shall be applied ratably, according to the amounts of principal due on such
date, to the persons entitled thereto without any discrimination or privilege.
After payment in full of the principal of and interest on the Bonds (or provision has been made for the
payment thereof as specified in the Indenture), and the fees, charges and expenses of the Trustee and any
Paying Agents and any other amounts required to be paid under the Indenture, all amounts remaining in the
Debt Service Fund shall be paid to the District for deposit into the Transportation Development District Sales
Tax Trust Fund.
Project Fund
The money in the Project Account of the Project Fund shall be disbursed by the Trustee from time to
time, upon receipt of a written request of the Authorized District Representative and containing the statements,
representations and certifications set forth in the form of such request attached as an exhibit to the Indenture
and otherwise substantially in such form, to pay, or reimburse the District for payment of, the costs of the
Transportation Project. Any money remaining on deposit in the Project Account of the Project Fund when the
portion of the Transportation Project financed with the proceeds of the Series 2006 Bonds is completed, as
evidenced by a certificate delivered by the Authorized District Representative to the Trustee, shall be
transferred by the Trustee to the Redemption Account in the Debt Service Fund and used to redeem Series
2006 Bonds pursuant to the Indenture. See “THE BONDS – Redemption Provisions” herein.
Moneys in the Cost of Issuance Account of the Project Fund shall be disbursed, from time to time by
the Trustee, upon receipt of a written request of the District signed by the Authorized District Representative,
and containing the statements, representations and certifications set forth in the form of such request attached
as an exhibit to the Indenture and otherwise substantially in such form, for the sole purpose of paying costs of
issuance of the Bonds. Any moneys remaining in the Cost of Issuance Account of the Project Fund on April
15, 2007 shall be deposited, without further authorization, into the Project Account of the Project Fund.
Money in the Future Projects Account of the Project Fund may be used to pay any of the following:
(i) costs of the Project, (ii) costs of any Additional Project, and (iii) debt service on the Bonds. The money in
the Future Projects Account shall be disbursed by the Trustee from time to time, upon receipt of a written
request of the Authorized District Representative, which contains the statements, representations and
certifications set forth in the form of such request attached as an exhibit to the Indenture. After payment in full
of the principal of and interest on the Bonds (or provision has been made for the payment thereof as specified
in the Indenture), and the fees, charges and expenses of the Trustee and any Paying Agents and any other
amounts required to be paid under the Indenture, all amounts remaining in the Future Projects Account shall be
paid to the District for deposit into the Transportation Development District Sales Tax Trust Fund.
In making such payments and disbursements, the Trustee may conclusively rely upon the written
requests and accompanying certificates and statements. The Trustee is not required to make any independent
inspection or investigation in connection with the matters set forth in the written requests.
Rebate Fund
There shall be deposited by the Trustee in the Rebate Fund such amounts as are required to be
deposited therein pursuant to the Tax Compliance Agreement. Subject to the transfer provisions provided in
the Indenture, all money at any time deposited in the Rebate Fund and any income earned thereon shall be held
in trust, to the extent required to pay arbitrage rebate to the federal government of the United States of
America, and neither the District nor the Owner of any Bonds shall have any rights in or claim to such money.
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Debt Service Reserve Fund
Except as otherwise provided in the Indenture, moneys in the Debt Service Reserve Fund shall be used
by the Trustee without further authorization solely for the payment of the principal of and interest on the
Bonds if moneys otherwise available for such purpose as provided in the Indenture are insufficient to pay the
same as they become due and payable. If the balance of moneys in the Debt Service Fund is insufficient to pay
principal of or interest on the Bonds when due and payable, moneys in the Debt Service Reserve Fund shall be
transferred into the Debt Service Fund in an amount sufficient to make up such deficiency. The Trustee may
use moneys in the Debt Service Reserve Fund for such purpose whether or not the amount in the Debt Service
Reserve Fund at that time equals the Debt Service Reserve Requirement. Such moneys shall be used first to
make up any deficiency in the payment of interest and then principal. Moneys in the Debt Service Reserve
Fund shall also be used to pay the last Bonds becoming due unless such Bonds and all interest thereon be
otherwise paid. The amount on deposit in the Debt Service Reserve Fund shall be valued by the Trustee 45
days prior to each Payment Date (or if such date is not a Business Day, the immediately preceding Business
Day). The Trustee shall give prompt written notice to the District if such amount is less than the Debt Service
Reserve Requirement. For the purpose of determining the amount on deposit in the Debt Service Reserve
Fund, the value of any investments shall be valued at their fair market value (inclusive of accrued interest) on
the date of valuation. Moneys in the Debt Service Reserve Fund that are in excess of the Debt Service Reserve
Requirement shall be deposited by the Trustee without further authorization in the Debt Service Fund.
After payment in full of the principal of, redemption premium, if any, and interest on the Bonds (or
provision has been made for the payment thereof as specified in the Indenture), and the fees, charges and
expenses of the Trustee and any Paying Agents and any other amounts required to be paid under the Indenture,
all amounts remaining in the Debt Service Reserve Fund shall be paid to the District for transfer into the
Transportation Development District Sales Tax Trust Fund.
Operating Fund
Money in the Operating Fund shall be disbursed by the Trustee from time to time upon receipt of a
written request of the Authorized District Representative to pay costs of operating the District, maintaining the
Transportation Project or paying the principal of or interest on the Bonds.
Payments under the Bond Insurance Policy
In the event that on the second (2nd) Business Day prior to the payment date on the Series 2006
Bonds, the Trustee has not received sufficient moneys to pay all principal of and interest on the Series 2006
Bonds due on the second (2nd) following Business Day, the Trustee shall, immediately notify the Bond Insurer
or its designee on the same Business Day by telephone or electronic mail, confirmed in writing by registered or
certified mail, of the amount of the deficiency.
If any deficiency is made up in whole or in part prior to or on the payment date, the Trustee shall so
notify the Bond Insurer or its designee.
In addition, if the Trustee has notice that any Owner has been required to disgorge payments of
principal or interest on the Series 2006 Bonds pursuant to a final non-appealable order by a court of competent
jurisdiction that such payment constitutes an avoidable preference to such Owner within the meaning of any
applicable bankruptcy laws, then the Trustee shall notify the Bond Insurer or its designee of such fact by
telephone or electronic mail, confirmed in writing by registered or certified mail.
The Trustee shall irrevocably be designated, appointed, directed and authorized to act as attorney-infact for holders of the Series 2006 Bonds as follows:
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(a)
If there is a deficiency in amounts required to pay interest on the Series 2006 Bonds,
the Trustee shall (i) execute and deliver to the Bond Insurer, in form satisfactory to the Bond Insurer,
an instrument appointing the Bond Insurer as agent for such holders in any legal proceeding related to
the payment of and an assignment to the Bond Insurer of the claims for interest on the Series 2006
Bonds, (ii) receive as designee of the respective holders (and not as Paying Agent) in accordance with
the tenor of the Bond Insurance Policy payment from the Bond Insurer with respect to the claims for
interest so assigned, and (iii) disburse the same to such respective holders; and
(b)
If there is a deficiency in amounts required to pay principal of the Series 2006 Bonds,
the Trustee shall (i) execute and deliver to the Bond Insurer, in form satisfactory to the Bond Insurer,
an instrument appointing the Bond Insurer as agent for such holder in any legal proceeding related to
the payment of such principal and an assignment to the Bond Insurer of the Series 2006 Bond
surrendered to the Bond Insurer (but such assignment shall be delivered only if payment from the
Bond Insurer is received), (ii) receive as designee of the respective holders (and not as Paying Agent)
in accordance with the tenor of the Bond Insurance Policy payment therefor from the Bond Insurer,
and (iii) disburse the same to such holders.
Payments with respect to claims for interest on and principal of Series 2006 Bonds disbursed by the
Trustee from proceeds of the Bond Insurance Policy shall not be considered to discharge the obligation of the
District with respect to such Series 2006 Bonds, and the Bond Insurer shall become the owner of such unpaid
Series 2006 Bond and claims for the interest in accordance with the tenor of the assignment made to it under
the provisions of this subsection or otherwise.
Irrespective of whether any such assignment is executed and delivered, the District and the Trustee
shall agree for the benefit of the Bond Insurer that:
(a)
They recognize that to the extent the Bond Insurer makes payments directly or
indirectly (e.g., by paying through the Paying Agent), on account of principal of or interest on the
Series 2006 Bonds, the Bond Insurer will be subrogated to the rights of such holders to receive the
amount of such principal and interest from the District, with interest thereon as provided and solely
from the sources stated in the Indenture and the Series 2006 Bonds; and
(b)
They will accordingly pay, to the Bond Insurer the amount of such principal and
interest, with interest thereon as provided in the Indenture and the Series 2006 Bonds, but only
from the sources and in the manner provided therein for the payment of principal of and interest on
the Series 2006 Bonds to holders, and will otherwise treat the Bond Insurer as the owner of such
rights to the amount of such principal and interest.
Nonpresentment of Bonds
If any Bond is not presented for payment when the principal thereof becomes due, either at maturity or
at the date fixed for redemption thereof, and provided the Trustee is holding sufficient funds for the payment
thereof, all liability of the District to the Owner thereof for the payment of such Bond shall forthwith cease,
terminate and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such moneys,
without liability for interest thereon, for the benefit of the Owner of such Bond who shall thereafter be
restricted exclusively to such moneys, for any claim of whatever nature on such Owner's part under the
Indenture or on, or with respect to, said Bond.
Any moneys so deposited with and held by the Trustee not so applied to the payment of Bonds within
one year after the date on which the same have become due shall be paid by the Trustee to the District without
liability for interest thereon, free from the trusts created by the Indenture. Thereafter, Owners shall be entitled
to look only to the District for payment, and then only to the extent of the amount so repaid by the Trustee.
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The District shall not be liable for any interest on the sums so paid to it and shall not be regarded as a trustee of
such money.
Investment of Moneys
Moneys in all funds and accounts under any provision of the Indenture shall be continuously invested
and reinvested by the Trustee in Investment Securities at the written direction of the District given by the
Authorized District Representative or, if such written directions are not received, then in Investment Securities
described in subparagraph (f) of the definition thereof. Moneys on deposit in all funds and accounts may be
invested only in Investment Securities which mature or are subject to redemption at the option of the owner
thereof prior to the date such funds are expected to be needed. The Trustee may make investments through its
investment division or short-term investment department.
All investments shall constitute a part of the fund or account from which the moneys used to acquire
such investments have come. The Trustee shall sell and reduce to cash a sufficient amount of investments in a
fund or account whenever the cash balance therein is insufficient to pay the amounts required to be paid
therefrom. The Trustee may transfer investments from any fund or account to any other fund or account in lieu
of cash when required or permitted by the provisions of the Indenture. In determining the balance in any fund
or account, investments shall be valued at the lower of their original cost or their fair market value on the most
recent Payment Date, except as otherwise provided in the Indenture. The Trustee shall not be liable for any
loss resulting from any investment made in accordance with the Indenture.
Events of Default; Acceleration
If any one or more of the following events occur, it is defined as and declared in the Indenture to be
and to constitute an “Event of Default”:
(a)
Default in the performance or observance of any of the covenants, agreements or
conditions on the part of the District contained in the Indenture or in the Bonds, and the continuance
thereof for a period of 30 days after written notice thereof has been given (i) to the District by the
Trustee, or (ii) to the Trustee (which notice of default the Trustee shall be required to accept) and the
District by the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding;
provided, however, if any default is such that it cannot be corrected within such 30-day period, it shall
not constitute an Event of Default if corrective action is instituted by the District within such period
and diligently pursued until the default is corrected; or
(b)
The filing by the District of a voluntary petition in bankruptcy, or failure by the
District to promptly lift any execution, garnishment or attachment of such consequence as would
impair the ability of the District to carry on its operation, or adjudication of the District as a bankrupt,
or assignment by the District for the benefit of creditors, or the entry by the District into an agreement
of composition with creditors, or the approval by a court of competent jurisdiction of a petition
applicable to the District in any proceedings instituted under the provisions of federal bankruptcy law,
or under any similar acts which may hereafter be enacted; or
(c)
The failure to pay the principal of, redemption premium, if any, or interest on the
Bonds when due.
The Trustee shall give written notice of any Event of Default to the District as promptly as practicable
after the occurrence of an Event of Default of which the Trustee has notice as provided in the Indenture.
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If an Event of Default has occurred and is continuing, the Trustee may, and shall upon the written
request of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, by notice in
writing delivered to the District, declare the principal of all Bonds then Outstanding and the interest accrued
thereon immediately due and payable.
Exercise of Remedies by the Trustee
If an Event of Default has occurred and is continuing, the Trustee may pursue any available remedy at
law or equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of and
interest on the Bonds then Outstanding, and to enforce and compel the performance of the duties and
obligations of the District as set forth in the Indenture.
Notwithstanding anything to the contrary in the Indenture or in any Financing Document, upon the
occurrence and continuance of an Event of Default as defined in the Indenture or in any other Financing
Document, so long as the Bond Insurer is not in default under the Bond Insurance Policy the Bond Insurer
shall be entitled to control and direct the enforcement of all rights and remedies granted to the Owners or the
Trustee for the benefit of the Owners under the Indenture or any other Financing Document.
If an Event of Default has occurred and is continuing, and if requested so to do by the Owners of not
less than 25% in aggregate principal amount of the Bonds then Outstanding and indemnified as provided in the
Indenture, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by the
Indenture as the Trustee, being advised by counsel, deems most expedient in the interests of the Owners;
provided, however, that the Trustee shall not be required to take any action which in its good faith conclusion
could result in personal liability to it.
All rights of action under the Indenture or under any of the Bonds may be enforced by the Trustee
without the possession of any of the Bonds or the production thereof in any trial or other proceedings relating
thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its name as Trustee
without the necessity of joining as plaintiffs or defendants any Owner, and any recovery or judgment shall,
subject to the Indenture, be for the equal benefit of all the Owners of the Outstanding Bonds.
Enforcement of Sales Tax Collection Agreement and Cooperation Agreement.
The District shall notify the Trustee in writing as to any material failure of performance under the
Sales Tax Collection Agreement or the Cooperation Agreement, and at the time of such notification the
District shall also advise the Trustee what action the District proposes to take in enforcing available remedies.
The Trustee shall be required to take notice of any failure of the City to transfer funds to the Trustee at the
times and in the manner provided in the Sales Tax Collection Agreement or the Cooperation Agreement and
the Indenture. If, in the sole judgment of the Trustee, such action is less likely to be effective than some other
or additional action, the Trustee shall so advise the City promptly in writing. If, within 30 days following
advice by the Trustee that some additional or other action would be more effective, the District has not taken
such other or additional action, and the Trustee has not, after consultation with the District, withdrawn such
advice, upon receipt of indemnification satisfactory to it, the Trustee is authorized to take such action, whether
the action was suggested by the Trustee or otherwise, as the Trustee may deem most expedient and in the
interest of the Owners of the Bonds. In furtherance of such rights granted to the Trustee, the District assigns to
the Trustee all of the rights it may have in the enforcement of the Sales Tax Collection Agreement and the
Cooperation Agreement, further authorizing the Trustee in its own name or in the name of the District to bring
such actions, employ such counsel, execute such documents and do such other things as may in the judgment
of the Trustee be necessary or appropriate under the circumstance at the expense of the Trust Estate.
The District shall not modify, amend or waive any provision of the Sales Tax Collection Agreement or
the Cooperation Agreement without the prior written consent of the Trustee, whose consent shall not be
unreasonably withheld or delayed. The Trustee may withhold its consent to any such proposed modification,
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amendment or waiver of the Sales Tax Collection Agreement or the Cooperation Agreement if the proposed
modification, amendment or waiver may adversely affect the security for the Bonds or the interests of the
Owners thereof or may adversely affect the exclusion of interest on the Bonds from gross income of the
Owners thereof for federal income tax purposes or as may impose additional duties on the Trustee that were
not contemplated upon the original execution of the Indenture.
Limitation on Exercise of Remedies by Bondowners
No Owner shall have any right to institute any suit, action or proceeding in equity or at law for the
enforcement of the Indenture or for the execution of any trust under the Indenture or for the appointment of a
receiver or any other remedy under the Indenture, unless:
(i)
a default has occurred of which the Trustee has notice as provided in the Indenture,
(ii)
such default has become an Event of Default, and
and
(iii)
the Owners of not less than 25% in aggregate principal amount of the Bonds then
Outstanding shall have made written request to the Trustee, shall have offered it reasonable
opportunity either to proceed to exercise the powers granted in the Indenture or to institute such
action, suit or proceeding in its own name, and shall have provided to the Trustee indemnity as
provided in the Indenture, and
(iv)
the Trustee shall thereafter fail or refuse to exercise the powers granted in the
Indenture or to institute such action, suit or proceeding in its own name;
and such notification, request and indemnity are declared in every case, at the option of the Trustee, to be
conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of
action for the enforcement of the Indenture, or for the appointment of a receiver or for any other remedy under
the Indenture, it being understood and intended that no one or more Owners shall have any right in any manner
whatsoever to affect, disturb or prejudice the Indenture by its, his or their action or to enforce any right under
the Indenture except in the manner provided in the Indenture, and that all proceedings at law or in equity shall
be instituted, had and maintained in the manner provided in the Indenture and for the equal benefit of the
Owners of all Bonds then Outstanding. Nothing in the Indenture, however, shall affect or impair the right of
any Owner to payment of the principal of and interest on any Bond at and after its maturity or the obligation of
the District to pay the principal of and interest on each of the Bonds to the respective Owners thereof at the
time, place, from the source and in the manner expressed in the Indenture and in the Bonds.
Remedies Cumulative
No remedy conferred by the Indenture upon or reserved to the Trustee or to the Owners is intended to
be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition
to any other remedy given to the Trustee or to the Owners under the Indenture or now or hereafter existing at
law or in equity or by statute.
Supplemental Indentures
Without Consent of the Owners
The District and the Trustee may from time to time, without the consent of or notice to any of the
Owners but with prior notice to the Bond Insurer, enter into such Supplemental Indenture or Supplemental
Indentures as are not inconsistent with the terms and provisions of the Indenture, for any one or more of the
following purposes:
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(a)
to cure any ambiguity or formal defect or omission in the Indenture or to release
property from the Trust Estate which was included by reason of an error or other mistake;
(b)
to grant to or confer upon the Trustee for the benefit of the Owners any additional
rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners or
the Trustee or either of them;
(c)
to subject to the Indenture additional revenues, properties or collateral;
(d)
to modify, amend or supplement the Indenture or any indenture supplemental thereto
in such manner as to permit the qualification of the Indenture under the Trust Indenture Act of 1939,
as then amended, or any similar federal statute hereafter in effect, or to permit the qualification of the
Bonds for sale under the securities laws of any state of the United States;
(e)
to provide for the issuance of Additional Bonds or the refunding of any Bonds in
accordance with the terms of the Indenture;
(f)
to evidence the appointment of a separate trustee or the succession of a new trustee
under the Indenture;
(g)
to modify or eliminate any of the terms of the Indenture; provided, however, that:
(1)
such Supplemental Indenture shall expressly provide that any such
modifications or eliminations shall become effective only when there is no Bond Outstanding
of any series issued prior to the execution of such Supplemental Indenture; and
(2)
the Trustee may, in its discretion, decline to enter into any such
Supplemental Indenture which, in its opinion, may not afford adequate protection to the
Trustee when the same becomes operative; or
(h)
to make any other change which, in the sole judgment of the Trustee, does not
materially adversely affect the security of the Owners. In exercising such judgment the Trustee may
rely on an Opinion of Counsel. The Trustee shall consider the effect on the Owners as if there were
no Bond Insurance Policy.
With Consent of the Owners
In addition to Supplemental Indentures permitted as described above and subject to the terms and
provisions contained in the Indenture, and not otherwise, with the written consent of the Bond Insurer and the
Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding, the District
and the Trustee may from time to time enter into such other Supplemental Indenture or Supplemental
Indentures as shall be deemed necessary and desirable by the District for the purpose of modifying, amending,
adding to or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any
Supplemental Indenture; provided, however, that nothing in the Indenture contained shall permit or be
construed as permitting:
(a)
an extension of the maturity of the principal of or the scheduled date of payment of
interest on any Bond;
(b)
any Bond;
a reduction in the principal amount, redemption premium or any interest payable on
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(c)
a privilege or priority of any Bond or Bonds over any other Bond or Bonds;
(d)
a reduction in the aggregate principal amount of Bonds the Owners of which are
required for consent to any such Supplemental Indenture; or
(e)
the modification of the rights, duties or immunities of the Trustee, without the
written consent of the Trustee.
If at any time the District requests the Trustee to enter into any such Supplemental Indenture for any
of such purposes, the Trustee shall cause notice of the proposed execution of such Supplemental Indenture to
be mailed by first-class mail to each Owner, the Bond Insurer and any rating agency then maintaining a rating
on the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall
state that copies thereof are on file at the principal corporate trust office of the Trustee for inspection by all
Owners. If within 60 days or such longer period as shall be prescribed by the District following the mailing of
such notice, the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding at
the time of the execution of any such Supplemental Indenture have consented to and approved the execution
thereof as provided in the Indenture, no Owner of any Bond shall have any right to object to any of the terms
and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the
execution thereof, or to enjoin or restrain the Trustee or the District from executing the same or from taking
any action pursuant to the provisions thereof. Upon the execution of any such Supplemental Indenture, the
Indenture shall be and be deemed to be modified and amended in accordance therewith.
Opinion of Bond Counsel
Notwithstanding anything to the contrary in the Indenture, before the District and the Trustee enter
into any Supplemental Indenture, there shall have been delivered to the Trustee an opinion of Bond Counsel
stating that such Supplemental Indenture is authorized or permitted by the Indenture and the TDD Act,
complies with their respective terms, will, upon the execution and delivery thereof, be valid and binding upon
the District in accordance with its terms and will not adversely affect the exclusion from federal gross income
of interest on any Bonds then Outstanding.
Resignation or Removal of the Trustee
The Trustee and any successor Trustee may at any time resign from the trusts created in the Indenture
by giving 30 days' written notice to the District and the Owners, and such resignation shall take effect upon the
appointment of a successor Trustee pursuant to the Indenture. If at any time the Trustee ceases to be eligible in
accordance with the provisions of the Indenture, it shall resign immediately in the manner provided in the
Indenture. The Trustee may be removed for cause or without cause at any time by an instrument or concurrent
instruments in writing delivered to the Trustee and the District and signed by the Owners of a majority in
aggregate principal amount of Bonds then Outstanding. If no Event of Default has occurred and is continuing,
the Trustee may be removed at any time by an instrument or concurrent instruments in writing delivered to the
Trustee and the Owners and signed by the District. The District or the Owners of a majority in aggregate
principal amount of the Bonds then Outstanding may at any time petition any court of competent jurisdiction
for the removal for cause of the Trustee. No resignation or removal of the Trustee shall become effective until
a successor Trustee, acceptable to the Bond Insurer, has accepted its appointment under the Indenture.
The Bond Insurer shall receive prior written notice of any name change of the Trustee or the
resignation or removal of the Trustee.
Appointment of Successor Trustee
If the Trustee resigns or is removed, or otherwise becomes incapable of acting under the Indenture, or
if it is taken under the control of any public officer or officers or of a receiver appointed by a court, a successor
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Trustee may be appointed by the Owners of a majority in aggregate principal amount of Bonds then
Outstanding, by an instrument or concurrent instruments in writing; provided, nevertheless, that in case of such
vacancy the District, by an instrument executed and signed by the Authorized District Representative, may
appoint a temporary Trustee to fill such vacancy until a successor Trustee is appointed by the Owners in the
manner above provided; and any such temporary Trustee so appointed by the District shall immediately and
without further acts be superseded by the successor Trustee so appointed by such Owners. If a successor
Trustee or a temporary Trustee has not been so appointed and accepted such appointment within 30 days of a
notice of resignation or removal of the current Trustee, the retiring Trustee may petition a court of competent
jurisdiction for the appointment of a successor Trustee to act until such time, if any, as a successor has so
accepted its appointment. Any successor Trustee must be acceptable to the Bond Insurer.
Qualifications of Trustee and Successor Trustees
The Trustee and every successor Trustee appointed under the Indenture shall be a trust institution or
commercial bank qualified to do business in the State, shall be in good standing and qualified to accept such
trusts, shall be subject to examination by a federal or state bank regulatory authority, and shall have a reported
capital and surplus of not less than $25,000,000, or must provide a guaranty of the full and prompt
performance by the Trustee of its obligations under the Indenture and any other agreements made in
connection with the Bonds, on terms satisfactory to the District, by a guarantor with such combined capital and
surplus. If such institution publishes reports of conditions at least annually pursuant to law or regulation, then
for the purposes of the Indenture the capital and surplus of such institution shall be deemed to be its capital and
surplus as set forth in its most recent report of condition so published.
Rights of the Bond Insurer
Any notice that is required to be given to the Owners, nationally recognized municipal securities
information repositories or state information depositories pursuant to Rule 15c2–12(b)(5) adopted by the
Securities and Exchange Commission or to the Trustee shall also be provided to the Bond Insurer.
Within ninety (90) days of the end of the District’s fiscal year, a copy of the audited financial
statements of the District and a copy of the annual budget of the District and forty–five (45) days after the
close of each quarter of the District’s fiscal year, a copy of the unaudited financial statements of the District
shall be sent to the Bond Insurer.
The Bond Insurer shall have the right to receive such additional information as it may reasonably
request.
The District will permit the Bond Insurer to discuss the affairs, finances and accounts of the District or
any information the Bond Insurer may reasonably request regarding the security for the Bonds with appropriate
officers of the District, and will grant the Bond Insurer access to the facilities, books and records of the District
on any business day upon reasonable prior notice.
The Bond Insurer shall have the right, if the Bond Insurer has a reasonable basis to believe that the
financial position of the District has materially deteriorated or financial irregularities have occurred since the
date of the date of the most recently provided annual audit or quarterly report; or that such audit or report fails
to accurately set forth the financial position of the District, to direct District to cause to be prepared a financial
report at the District’s expense in form and content acceptable to the Bond Insurer and the District shall
comply with such direction within thirty (30) days after written notice of the direction from the Bond Insurer;
provided, however, that if compliance cannot occur within such period, then such period will be extended, with
the prior consent of the Bond Insurer, so long as compliance is begun within such period and diligently
pursued.
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To the extent that the Indenture or any other Financing Document confers upon or gives or grants to
the Bond Insurer any right, remedy or claim under or by reason of such documents, the Financing Documents
specifically recognize the Bond Insurer as being a third party beneficiary thereunder and may enforce any such
right, remedy or claim conferred, given or granted thereunder.
Any provision of the Indenture or any other Financing Document expressly recognizing or granting
rights in or to the Bond Insurer may not be amended in any manner which affects the rights of the Bond
Insurer thereunder without the prior written consent of the Bond Insurer.
Wherever the Indenture or any other Financing Document requires the consent of Owners, the Bond
Insurer’s consent shall also be required.
Any reorganization or liquidation plan with respect to the District must be acceptable to the Bond
Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the right to vote on
behalf of all Owners absent a default by the Bond Insurer under the Bond Insurance Policy.
Anything in the Indenture or any other Financing Document to the contrary notwithstanding, upon the
occurrence and continuance of an Event of Default, the Bond Insurer shall be entitled to control and direct the
enforcement of all rights and remedies granted to the Owners or the Trustee for the benefit of the Owners
under the Indenture or any other Financing Document.
The District shall agree to pay or reimburse the Bond Insurer any and all charges, fees, costs and
expenses which the Bond Insurer may reasonably pay or incur, including, but not limited to, fees and expenses
of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with
(i) any accounts established to facilitate payments under the Bond Insurance Policy, (ii) the administration,
enforcement, defense or preservation of any rights in respect of the Indenture or any other document executed
in connection therewith, including defending, monitoring or participating in. any litigation or proceeding
(including any bankruptcy proceeding in respect of the District or any affiliate thereof) relating to the
Indenture or any other Financing Document, any party to the Indenture or any other Financing Document or
the transaction contemplated by the Financing Documents (the “Transaction”), (in) the foreclosure against, sale
or other disposition of any collateral securing any obligations under the Indenture or any other Financing
Document, or the pursuit of any remedies under the Indenture or any other Financing Document, to the extent
such costs and expenses are not recovered from such foreclosure, sale or other disposition, or (iv) any
amendment, waiver or other action with respect to, or related to, the Indenture or any other Financing
Document whether or not executed or completed; costs and expenses shall include a reasonable allocation of
compensation and overhead attributable to the time of employees of the Bond Insurer spent in connection with
the actions described in clauses (ii) – (iv) above; and the Bond Insurer shall reserve the right to charge a
reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the
Indenture or any other Financing Document.
In addition to any and all rights of reimbursement, subrogation and any other rights pursuant to the
Indenture or under law or in equity, the District shall agree to pay or reimburse the Bond Insurer any and all
charges, fees, costs, claims, losses, liabilities (including penalties), judgments, demands, damages, and
expenses which the Bond Insurer or its officers, directors, shareholders, employees, agents and each Person, if
any, who controls the Bond Insurer within the meaning of either Section 15 of the Securities Act of 1933 or
Section 20 of the Securities Exchange Act of 1934 may reasonably pay or incur, including, but not limited to,
fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, of
any nature in connection with, in respect of or relating to the transactions contemplated by the Indenture or any
other Financing Document by reason of:
(a)
any omission or action (other than of or by the Bond Insurer) in connection with the
offering, issuance, sale, remarketing or delivery of the Series 2006 Bonds;
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(b)
the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theft
committed by any director, officer, employee or agent of the District in connection with any
transaction arising from or relating to the Indenture or any other Financing Document;
(c)
the violation by the District of any law, rule or regulation, or any judgment, order or
decree applicable to it;
(d)
the breach by the District of any representation, warranty or covenant under the
Indenture or any other Financing Document or the occurrence, in respect of the District, under the
Indenture or any other financing document of any Event of Default or any event which, with the
giving of notice or lapse of time or both, would constitute any Event of Default; or
(e)
any untrue statement or alleged untrue statement of a material fact contained in any
official statement or any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, except insofar as such
claims arise out of or are based upon. any untrue statement or omission in information included in an
official statement and furnished by the Bond Insurer in writing expressly for use therein.
The Bond Insurer shall be entitled to pay any amount payable under the Bond Insurance Policy in
respect of Regular Payments (as defined in the Bond Insurance Policy) on the Series 2006 Bonds, including
any amount payable upon its election upon the Series 2006 Bonds on an accelerated basis, whether or not any
notice and certificate shall have been Received (as defined in the Bond Insurance Policy) by the Bond Insurer
as provided in the Bond Insurance Policy.
SUMMARY OF THE SALES TAX COLLECTION AGREEMENT
The following summarizes certain provisions of the Sales Tax Collection Agreement. This summary does
not purport to be complete, and reference is made to the Sales Tax Collection Agreement for the complete
provisions thereof.
Collection of TDD Sales Tax
The City agrees to perform all functions incident to the administration, collection, enforcement and
operation of the TDD Sales Tax or to provide for the performance of such functions. The TDD Sales Tax shall
be collected and reported on a Transportation Development District Sales Tax Return (the “Sales Tax Return”)
in substantially the manner and form as set forth in an exhibit to the Sales Tax Collection Agreement. The
City, having collected or received the TDD Sales Tax, shall deposit all TDD Sales Tax revenues into the
Special Trust Fund for the Chesterfield Valley Transportation Development District (the “Special Trust
Fund”). The City may deduct from the TDD Sales Tax revenues on deposit in the Special Trust Fund the cost
of collection of the TDD Sales Tax in an amount equal to one percent (1%) of the total amount collected (the
“Collection Costs”). The City’s Collection Costs may include the reasonable costs and expenses associated
with collection of the TDD Sales Tax, including wages of City staff engaged in administration, collection,
enforcement and operation of the TDD Sales Tax, legal fees and other ordinary out-of-pocket expenses
reasonably made or incurred in connection with the services performed by the City under the Sales Tax
Collection Agreement.
Segregation and Investment of TDD Sales Tax Revenues
Monies on deposit in the Special Trust Fund after deduction of the Collection Costs shall not be
deemed to be City funds and shall not be commingled with any funds of the City. The District’s Board of
Directors may, in its sole discretion, direct the City to invest any or all of the monies deposited into the Special
Trust Fund in accordance with applicable laws relating to investment of District funds. If the District’s Board
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of Directors fails to provide the City with such direction regarding investment of TDD Sales Tax revenues, the
City shall invest such TDD Sales Tax revenues in money market mutual funds that are invested in direct
obligations of, or obligations the payment of the principal of and interest on which are unconditionally
guaranteed by, the United States of America and backed by the full faith and credit thereof. All interest earned
upon the balance in the Special Trust Fund shall be deposited to the credit of the Special Trust Fund.
Notification of Businesses of Obligation to Collect and Remit TDD Sales Tax
The City shall notify all businesses engaging in sales at retail within the District of their obligations to
collect and remit the TDD Sales Tax in accordance with Section 238.235 of the Act and the Sales Tax Law,
Sections 144.010 to 144.525 of the Revised Statutes of Missouri, as amended (the “Sales Tax Law”). Except
for a reasonable review and comparison of each Sales Tax Return to the corresponding Department of Revenue
Form 53-1 to determine whether the amount of TDD Sales Tax remitted to the District was calculated
correctly, the City shall have no affirmative obligation to discover, investigate or ascertain the accuracy of
such Sales Tax Return.
Enforcement of TDD Sales Tax
The City shall immediately report all violations of the Sales Tax Law, to the District and the Missouri
Department of Revenue for enforcement to the extent that such violations result in the City’s inability to
collect the TDD Sales Tax in a timely manner as provided for in the Sales Tax Law. In the event that the
Missouri Department of Revenue notifies the City and the District that it will refuse to undertake enforcement
of the TDD Sales Tax, the City shall promptly initiate an action to enforce collection. If the City’s Finance
Director determines that the cost of such enforcement action may reasonably exceed one percent (1%) of the
revenues sought to be collected pursuant to such enforcement action, the City may notify the District that any
collection costs of the City in excess of one percent (1%) of the revenues sought to be collected pursuant to
such enforcement action shall be submitted and approved as operating costs of the District to be paid to the
City directly out of funds available in the Special Trust Fund, provided, however, that, in lieu of the City
incurring such costs in excess of one percent (1%) of the revenues sought to be collected pursuant to such
enforcement action, the City may elect not to undertake such enforcement action, in which case the District
shall undertake such enforcement action and may incur such costs. Notwithstanding anything to the contrary
in the Sales Tax Collection Agreement, neither the City nor the District shall be obligated to undertake any
enforcement action if the cost of such enforcement action is reasonably expected to exceed the amount of
revenues sought to be collected.
Allocation of a Portion of the TDD Sales Tax
Upon imposition of the TDD Sales Tax and continuing until the earlier of repeal of the TDD Sales
Tax or completion of the redevelopment project identified in the Redevelopment Plan and retirement of
obligations issued by or on behalf of the City to finance redevelopment project costs in connection with the
Redevelopment Plan, the City shall allocate that portion of the TDD Sales Tax revenues that constitute
economic activity taxes generated within the Redevelopment Area for use by the City in accordance with
Section 99.845 of the TIF Act. The City shall make such allocation from time to time but not more than
monthly. Within five days of each allocation, the City shall provide written notice to the District of the
amount of TDD Sales Tax revenues being allocated in accordance with this Section and the method of
calculating such amount.
City to Assist with District’s Finances
The City shall prepare the annual budget of the District for review and approval of the District’s Board
of Directors. The City shall also review and reconcile the account statement for funds and accounts of the
District. The City shall make arrangements and providing information for an annual audit of the District,
provided that the cost of such audit shall be paid by the District. The City shall also prepare the District’s
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annual financial statements and file such statements with the appropriate state and federal offices and agencies
as required by law.
Termination of Agreement
The Sales Tax Collection Agreement may be terminated by either party with or without cause upon
not less than sixty 60 days prior notice to the other party. Upon termination of the Sales Tax Collection
Agreement, the City shall distribute to the District all monies remaining in the Special Trust Fund, which funds
shall be deposited into a special trust account created by the District and applied solely to pay costs of the
Transportation Project, including without limitation the District’s operating expenses and debt service on
obligations issued in connection with the Transportation Project, all in accordance with the TDD Act.
SUMMARY OF THE COOPERATION AGREEMENT
The following summarizes certain provisions of the Cooperation Agreement. This summary does not
purport to be complete, and reference is made to the Cooperation Agreement for the complete provisions thereof.
Construction of the Transportation Project
The City and the County shall be responsible for all Transportation Project costs associated with the
construction of each functional portions of the Transportation Project for which they are individually
responsible, as more particularly described in the Cooperation Agreement. The District shall be responsible
for entering into all necessary agreements with private developer(s) to incur all Transportation Project costs
associated with the construction of each functional portions of the Transportation Project for which they are
individually responsible, as more particularly described in the Cooperation Agreement. The District shall also
be responsible for financing each functional portion of the Transportation Project up to the maximum amount
described in the Cooperation Agreement.
Regulation of the Transportation Project
Each functional portion of the Transportation Project shall be treated as streets, roads or improvements
of the City or St. Louis County, Missouri, as applicable, for purposes of the exercise of police powers and the
District shall have no police powers or authority with respect to such streets, roads or improvements.
Collection of Transportation Development District Sales Tax
The City agrees to perform all functions incident to the administration, collection, enforcement and
operation of the TDD Sales Tax pursuant to the Sales Tax Collection Agreement.
Distribution of the Transportation Development District Sales Tax
Beginning in the first month following the issuance of the Bonds, the District, subject to annual
appropriation by its Board of Directors, transfer to the Trustee on or before the fifteenth day of each month all
TDD Sales Tax Revenues for deposit in the Revenue Fund.
Covenant to Request Annual Appropriation.
The officer of the District at any time charged with the responsibility of formulating budget proposals
shall include in the budget proposal submitted to the District for each Fiscal Year that the Bonds are
outstanding a request for an appropriation of the TDD Sales Taxes Revenues collected during such Fiscal
Year for payment of the Bonds. If, within 30 days after the end of the District’s Fiscal Year, the District’s
Board of Directors fails to adopt a budget, the parties agree that the District shall be deemed to have adopted a
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budget the provides for application of the TDD Sales Tax Revenues colleted in such Fiscal Year in accordance
with the budget for the prior Fiscal Year.
Records of the District
The District will keep proper books of records and account in which full, true and correct entries will be
made of all dealings or transactions of or in relating to its business affairs in accordance with generally accepted
governmental accounting standards consistently applied. The District shall make such books or records and
accounts reasonably available to the City and the County upon written request.
Default
In the event of any default in or breach of any material term or condition of the Cooperation
Agreement by any party, the defaulting or breaching party shall, upon written notice from any of the other
arties, proceed to immediately cure or remedy such default or breach, and shall, in any event within 30 days
after receipt of such notice, commence to cure or remedy such default or breach. In case such cure or remedy
is not taken or not diligently pursued, or the default or breach is not cured or remedied within a reasonable
time, the aggrieved party or parties may institute such proceedings as may be necessary or desirable in its or
their opinion to cure and remedy such default or breach, including without limitation proceedings to compel
specific performance by the defaulting or breaching party.
SUMMARY OF THE LEVEE AGREEMENT
The following summarizes certain provisions of the Levee Agreement. This summary does not purport to
be complete, and reference is made to the Levee Agreement for the complete provisions thereof.
Pursuant to the Levee Agreement, the City agrees to construct the levee trail project, which constitutes a
portion of the Transportation Project, in accordance with the Cooperation Agreement and the Levee Agreement.
The District agrees to be responsible for the costs of such portion of the Transportation Project in an amount not
to exceed $2,000,000. The Monarch–Chesterfield Levee District agrees to acquire all right–of–way and incur all
costs associated with the design and construction of certain additional road improvements.
SUMMARY OF THE CONTINUING DISCLOSURE CERTIFICATE
The following summarizes certain provisions of the Continuing Disclosure Certificate. This summary
does not purport to be complete, and reference is made to the Continuing Disclosure Certificate for the complete
provisions thereof.
The District has covenanted in the Continuing Disclosure Certificate to make available certain financial
and operating information on an ongoing basis while the Bonds remain outstanding, in accordance with the
requirements of Rule 15c2–12 (the “Rule”) promulgated by the Securities and Exchange Commission. The
District has agreed to provide:
1.
To all Nationally Recognized Municipal Securities Information Repositories
(“NRMSIR”) and to the appropriate state information depository (“SID”), if any, the audited financial
statements for the prior fiscal year (or unaudited financial statements if the audited financial statements
are not timely available) and certain information and data relating to the District and its operations. Such
information and data shall be information generally consistent with the information contained in this
Official Statement under the heading captioned “THE DISTRICT – Largest Sales Tax Generators.”
Such information shall be made available within 180 days after the end of each fiscal year, beginning in
fiscal year ending December 31, 2006.
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2.
Promptly upon the occurrence thereof, to the appropriate SID, if any, and to each
NRMSIR or to the Municipal Securities Rulemaking Board (“MSRB”) notice of the occurrence of any
of the following events with respect to the Bonds, if material:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
Principal and interest payment delinquencies;
Non–payment related defaults;
Unscheduled draws on debt service reserves reflecting financial difficulties;
Unscheduled draws on credit enhancements reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions or events affecting the tax–exempt status of the Bonds;
Modifications to rights of owners of the Bonds;
Bond calls (other than mandatory sinking fund redemptions or redemptions at
maturity);
Defeasances;
Release, substitution or sale of property securing repayment of the Bonds; or
Rating changes.
3.
In a timely manner, to each NRMSIR and to the SID, if any, notice of a failure (of
which the District has knowledge) to provide the required annual financial information on or before the
date specified in its written continuing disclosure undertaking.
The District may amend its disclosure obligations provided that the District receives an opinion from
nationally recognized bond counsel to the effect that such modifications are in compliance with the Rule.
If the District fails to comply with its disclosure obligations, any holder or Beneficial Owner of the
Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the District to comply with its obligations. A default by the District in its
disclosure obligations shall not be deemed a default under the Indenture and the sole remedy shall be an action to
compel performance.
*****
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APPENDIX C
FORM OF OPINION OF BOND COUNSEL
Armstrong Teasdale LLP, P.C., St. Louis, Missouri, Bond Counsel, proposes to issue its approving
opinion upon the issuance of the Series 2006 Bonds in substantially the following form:
Chesterfield Valley Transportation Development District
Chesterfield, Missouri
A.G. Edwards & Sons, Inc.
St. Louis, Missouri
Wells Fargo Bank, N.A., as Trustee
Kansas City, Missouri
CIFG Assurance North America, Inc.
New York, New York
Re:
$___________ Chesterfield Valley Transportation Development District, Transportation
Sales Tax Revenue Bonds, Series 2006
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance by the Chesterfield Valley
Transportation Development District (the “District”) of the above-captioned bonds (the “Bonds”), pursuant to
a Trust Indenture dated as of October 1, 2006 (the “Indenture”) by and between the District and Wells Fargo
Bank, N.A., as trustee (the “Trustee”). Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indenture.
We have examined the law and such certified proceedings and other documents as we deem necessary
to render this opinion. As to questions of fact material to our opinion we have relied upon the certified
proceedings and other certifications of public officials furnished to us without undertaking to verify the same
by independent investigation.
Based upon and subject to the foregoing, we are of the opinion, under existing law, as follows:
1.
The Bonds have been duly authorized, executed and delivered by the District and are valid
and legally binding special obligations of the District, payable solely from Bond proceeds and Pledged
Revenues held by the Trustee pursuant to the Indenture. The Bonds and the interest thereon do not constitute a
general obligation of the District, nor do they constitute an indebtedness of the District, the City, the Missouri
Highways and Transportation Commission, the State or any political subdivision thereof, within the meaning
of any constitutional, charter or statutory debt limitation or restriction, and the taxing power of the District is
not pledged to the payment of the Bonds.
2.
The Indenture has been duly authorized, executed and delivered by the District and
constitutes the valid and legally binding agreement of the District enforceable against the District in
accordance with the provisions thereof.
3.
The interest on the Bonds (including any original issue discount properly allocable to an
owner thereof) is excluded from gross income for federal and Missouri income tax purposes and is not an item
of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations.
It should be noted, however, that for the purpose of computing the alternative minimum tax imposed on
C-1
corporations (as defined for federal income tax purposes), such interest is taken into account in determining
adjusted current earnings. The opinions set forth in this paragraph are subject to the condition that the District
comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be
satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded
from gross income for federal income tax purposes. The District has covenanted to comply with each such
requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the
Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The
Bonds have not been designated as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3)
of the Code. We express no opinion regarding other federal or Missouri tax consequences arising with respect
to the Bonds.
The rights of the owners of the Bonds and the enforceability of the Bonds and the Indenture may be
subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights
heretofore or hereafter enacted to the extent applicable and their enforcement may be subject to the exercise of
judicial discretion in appropriate cases.
The opinions herein are based upon and limited to the laws of the State of Missouri and we express no
opinion as to the laws of any other state or jurisdiction. By rendering this opinion, we do not undertake to
advise you further of any changes in law or fact which may occur or come to our attention after the date
hereof.
Very truly yours,
C-2
APPENDIX D
MAP OF THE DISTRICT AND THE REDEVELOPMENT AREA
TOTAL TDD PROJECTS TOTAL $25,175,000
D-1
APPENDIX E
SPECIMEN OF THE BOND INSURANCE POLICY
E–1

22450000 chesterfield valley transportation development

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