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Agenda 06/22/2021 Item #11D (Resolution/CWS Resolution - Water & Sewer Revenue Bonds)06/22/2021 EXECUTIVE SUMMARY The Board of County Commissioners, acting as the ex-officio Governing Board of the Collier County Water-Sewer District approves the Resolution to (1) authorize the issuance of bonds to finance utility infrastructure expansion in the Golden Gate and the Northeast Service Areas to serve future residents and businesses and the District's operations facility, (2) delegate authority to the County Manager to award Bonds to the bidder that provides the lowest interest cost, (3) authorize publication of a Notice of Sale, (4) authorize distribution of a Preliminary Official Statement and a final Official Statement, (5) appoint the Paying Agent and Registrar of said Bonds, and (6) authorize and approve other matters related to the Bonds. OBJECTIVE: Approve issuance of Water and Sewer Revenue Bonds, Series 2021 (the "Bonds") to fund utility infrastructure expansion in the Golden Gate and Northeast Service Areas and the District's business and field operations facility, and complete all steps necessary to execute the transaction. CONSIDERATIONS: On February 23, 2021, item 11D, staff presented an implementation strategy for the water and wastewater infrastructure expansion in Golden Gate City and the Northeast Service area and obtained Board authorization to develop and bring back a plan of finance. On May 13, 2021, the Finance Committee met and unanimously endorsed the plan of finance and timeline to receive Board approval for a Resolution to authorize issuance of Bonds to finance utility infrastructure expansion in the Golden Gate and Northeast Service Areas. Bond Funded Projects: Golden Gate City: Utility infrastructure expansion in the Golden Gate Service Area will provide for construction of new potable water transmission mains, including hydrants and other appurtenances necessary to expand potable water service to currently unserved areas. Further, the bond proceeds will enable construction of an additional 4 million gallons per day (MGD) of wastewater treatment capacity including associated pipelines and other utility facilities necessary to expand to currently unserved areas. The current 1.5 MGD plant is at 86% capacity, necessitating expansion. Northeast Service Area: Required piping, raw water wells, deep injection wells, storage tanks, pump stations, sitework including required landscaping and further design work necessary to enable future production, treatment, distribution, and collection in the Northeast Service Area. Operational Efficiencies: In anticipation of bids providing bond premium, a portion of the funding may provide the District with a dedicated long-term funding component for the planned move to a purpose built and centralized water and wastewater utility operations hub located at the Government Operations Business Park (GOBP). The added financial resources to position the utility operations for the future will allow the utility component of GOBP to proceed with greater certainty creating overall GOBP site development efficiencies that will benefit all planned and future GOBP occupants. The permanent Northeast Service Area water production plant and wastewater treatment plant designed in 2010 are not included in this funding plan and will require further bond funding in the future as capacity demand increases. Timing of funding for construction of permanent potable water production and wastewater treatment facilities will depend on demand and building permit issuance. 11.D Packet Pg. 473 06/22/2021 FISCAL IMPACT: Upon approval, Bonds will be issued, and proceeds will be deposited in the Water/Wastewater Bond Fund (419) where projects will be recorded and tracked. Debt service will increase in each of the next 25 fiscal years, funded by a combination of water impact fees (Fund 411), wastewater impact fees (Fund 413) and user fees (Fund 408). Advance payment of impact fees to fund the initial incremental debt service costs are anticipated through Developer Agreements and/or Interlocal Agreements. GOBP related financing will be funded by user fees. However, because user fees were already earmarked for pay-go financing of the GOBP project, the debt service impact is manageable within the current CCWSD funding model. An impact fee rate study by Raftelis was completed in 2019 with water and wastewater impact fee rates which became effective in March 2020. An update to that study is anticipated to begin in Fiscal 2022. The User Fee Rate Study recently completed by Raftelis will be brought to the Board at a future meeting in Fiscal 2021 with recommended rates that are anticipated to be sufficient to provide any user fee portion of incremental debt service through fiscal 2024. Debt service will be paid regardless of any revenue stream decline. Therefore, in the unlikely event that no development occurs or lags behind the buildout schedule, it is po ssible an advance from the user fees would be required to satisfy debt service requirements. Any advance to impact fee funds from user fees would be repaid as a first priority when building activity resumes. GROWTH MANAGEMENT IMPACT: This item meets current Growth Management Plan standards to ensure the adequacy and availability of viable public facilities. LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to form and legality, and requires majority vote for approval. -JAK RECOMMENDATION: The Board of County Commissioners, acting as the ex-officio Governing Board of the Collier County Water-Sewer District approves the Resolution to (1) authorize the issuance of bonds to finance utility infrastructure expansion in the Golden Gate and the Northeast Service Areas to serve future residents and businesses and the District's operations facility, (2) delegate authority to the County Manager to award Bonds to the bidder that provides the lowest interest cost, (3) authoriz e publication of a Notice of Sale, (4) authorize distribution of a Preliminary Official Statement and a final Official Statement, (5) appoint the Paying Agent and Registrar of said Bonds, and (6) authorize and approve other matters related to the Bonds. Prepared by: Joseph Bellone, Utilities Finance Director, Public Utilities Department ATTACHMENT(S) 1. Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Project Amounts (PDF) 2. EXHIBIT B - Form of Official Notice of Sale (PDF) 3. [Linked] EXHIBIT C - Form of Preliminary Official Statement (PDF) 4. EXHIBIT D - Form of Continuing Disclosure Certificate (PDF) 5. Supplemental Resolution (PDF) 11.D Packet Pg. 474 06/22/2021 COLLIER COUNTY Board of County Commissioners Item Number: 11.D Doc ID: 16200 Item Summary: The Board of County Commissioners, acting as the ex-officio Governing Board of the Collier County Water-Sewer District approves the Resolution to (1) authorize the issuance of bonds to finance utility infrastructure expansion in the Golden Gate and the Nort heast Service Areas to serve future residents and businesses and the District's operations facility, (2) delegate authority to the County Manager to award Bonds to the bidder that provides the lowest interest cost, (3) authorize publication of a Notice of Sale, (4) authorize distribution of a Preliminary Official Statement and a final Official Statement, (5) appoint the Paying Agent and Registrar of said Bonds, and (6) authorize and approve other matters related to the Bonds. (Joseph Bellone, Utilities Finance Director) Meeting Date: 06/22/2021 Prepared by: Title: – Public Utilities Department Name: Drew Cody 06/09/2021 10:07 AM Submitted by: Title: Division Director - Operations Support – Public Utilities Operations Support Name: Joseph Bellone 06/09/2021 10:07 AM Approved By: Review: Public Utilities Operations Support Joseph Bellone Additional Reviewer Completed 06/09/2021 10:42 AM Public Utilities Department Drew Cody Level 1 Division Reviewer Completed 06/09/2021 10:43 AM Public Utilities Department George Yilmaz Level 2 Division Administrator Review Completed 06/09/2021 2:22 PM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 06/09/2021 3:05 PM Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 06/09/2021 5:10 PM Office of Management and Budget Susan Usher Additional Reviewer Completed 06/14/2021 5:50 PM Budget and Management Office Ed Finn Additional Reviewer Completed 06/15/2021 2:56 PM County Manager's Office Mark Isackson Level 4 County Manager Review Completed 06/16/2021 8:55 AM Board of County Commissioners Geoffrey Willig Meeting Pending 06/22/2021 9:00 AM 11.D Packet Pg. 475 Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 1 SOURCES AND USES OF FUNDS Collier County, Florida (Water-Sewer District) Series 2021 (Water & Wastewater) --- Preliminary Numbers Dated Date 07/27/2021 Delivery Date 07/27/2021 Series 2021 Bonds (proposed - Series 2021 Wstewter ImFee Bonds & W/S User (proposed - Sources: Fee) Water Impact) Total Bond Proceeds: Par Amount 95,395,000.00 42,220,000.00 137,615,000.00 Premium 16,042,540.90 7,369,905.95 23,412,446.85 111,437,540.90 49,589,905.95 161,027,446.85 Series 2021 Bonds (proposed - Series 2021 Wstewter ImFee Bonds & W/S User (proposed - Uses: Fee) Water Impact) Total Project Fund Deposits: 2021 Wastewater Project Fund 89,550,000.00 89,550,000.00 2021 Water/Sewer User Fees 15,000,000.00 15,000,000.00 2021 Water Project Fund 46,540,000.00 46,540,000.00 104,550,000.00 46,540,000.00 151,090,000.00 Other Fund Deposits: Debt Service Reserve Fund 6,123,690.57 2,710,228.17 8,833,918.74 Delivery Date Expenses: Cost of Issuance 286,185.00 126,660.00 412,845.00 Underwriter's Discount 476,975.00 211,100.00 688,075.00 763,160.00 337,760.00 1,100,920.00 Other Uses of Funds: Additional Proceeds 690.33 1,917.78 2,608.11 111,437,540.90 49,589,905.95 161,027,446.85 11.D.1 Packet Pg. 476 Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Project Amounts (16200 : Series 2021 Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 2 BOND SUMMARY STATISTICS Collier County, Florida (Water-Sewer District) Series 2021 (Water & Wastewater) --- Preliminary Numbers Dated Date 07/27/2021 Delivery Date 07/27/2021 Last Maturity 07/01/2046 Arbitrage Yield 2.742534% True Interest Cost (TIC) 3.576186% Net Interest Cost (NIC) 3.973150% All-In TIC 3.598040% Average Coupon 4.935135% Average Life (years) 17.166 Duration of Issue (years) 12.014 Par Amount 137,615,000.00 Bond Proceeds 161,027,446.85 Total Interest 116,579,549.45 Net Interest 93,855,177.60 Total Debt Service 254,194,549.45 Maximum Annual Debt Service 13,261,000.00 Average Annual Debt Service 10,197,240.67 Underwriter's Fees (per $1000) Average Takedown Other Fee 5.000000 Total Underwriter's Discount 5.000000 Bid Price 116.513005 Par Average Average PV of 1 bp Bond Component Value Price Coupon Life change Bond Component 137,615,000.00 117.013 4.935% 17.166 120,925.05 137,615,000.00 17.166 120,925.05 All-In Arbitrage TIC TIC Yield Par Value 137,615,000.00 137,615,000.00 137,615,000.00 + Accrued Interest + Premium (Discount) 23,412,446.85 23,412,446.85 23,412,446.85 - Underwriter's Discount -688,075.00 -688,075.00 - Cost of Issuance Expense -412,845.00 - Other Amounts Target Value 160,339,371.85 159,926,526.85 161,027,446.85 Target Date 07/27/2021 07/27/2021 07/27/2021 Yield 3.576186% 3.598040% 2.742534% 11.D.1 Packet Pg. 477 Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Project Amounts (16200 : Series 2021 Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 3BOND SUMMARY STATISTICSCollier County, Florida (Water-Sewer District)Series 2021 (Water & Wastewater)---Preliminary NumbersSeries 2021 Bonds(proposed - Series 2021 BondsWstewter ImFee & (proposed - WaterW/S User Fee) Impact) AggregateDated Date 07/27/2021 07/27/2021 07/27/2021Delivery Date 07/27/2021 07/27/2021 07/27/2021Last Maturity 07/01/2046 07/01/2046 07/01/2046Arbitrage Yield 2.742534% 2.742534% 2.742534%True Interest Cost (TIC) 3.460044% 3.786536% 3.576186%Net Interest Cost (NIC) 3.851671% 4.179640% 3.973150%All-In TIC 3.483368% 3.805776% 3.598040%Average Coupon 4.898257% 4.997821% 4.935135%Average Life (years) 15.591 20.724 17.166Duration of Issue (years) 11.270 13.609 12.014Par Amount 95,395,000.00 42,220,000.00 137,615,000.00Bond Proceeds 111,437,540.90 49,589,905.95 161,027,446.85Total Interest 72,850,326.39 43,729,223.06 116,579,549.45Net Interest 57,284,760.49 36,570,417.11 93,855,177.60Total Debt Service 168,245,326.39 85,949,223.06 254,194,549.45Maximum Annual Debt Service 6,838,050.00 6,425,000.00 13,261,000.00Average Annual Debt Service 6,749,311.07 3,447,929.61 10,197,240.67Underwriter's Fees (per $1000)Average TakedownOther Fee 5.000000 5.000000 5.000000Total Underwriter's Discount 5.000000 5.000000 5.000000Bid Price 116.316962 116.955959 116.513005Par Average Average PV of 1 bpBond Component Value Price Coupon Life changeBond Component 137,615,000.00 117.013 4.935% 17.166 120,925.05137,615,000.00 17.166 120,925.0511.D.1Packet Pg. 478Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 4BOND SUMMARY STATISTICSCollier County, Florida (Water-Sewer District)Series 2021 (Water & Wastewater)---Preliminary NumbersAll-In ArbitrageTIC TIC YieldPar Value 137,615,000.00 137,615,000.00 137,615,000.00 + Accrued Interest + Premium (Discount) 23,412,446.85 23,412,446.85 23,412,446.85 - Underwriter's Discount-688,075.00 -688,075.00 - Cost of Issuance Expense-412,845.00 - Other AmountsTarget Value 160,339,371.85 159,926,526.85 161,027,446.85Target Date 07/27/2021 07/27/2021 07/27/2021Yield 3.576186% 3.598040% 2.742534%11.D.1Packet Pg. 479Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 5 BOND DEBT SERVICE Collier County, Florida (Water-Sewer District) Series 2021 (Water & Wastewater) --- Preliminary Numbers Period Ending Principal Coupon Interest Debt Service 07/01/2022 2,055,000 4.000% 6,137,899.45 8,192,899.45 07/01/2023 2,305,000 4.000% 6,533,500.00 8,838,500.00 07/01/2024 2,405,000 4.000% 6,441,300.00 8,846,300.00 07/01/2025 2,500,000 4.000% 6,345,100.00 8,845,100.00 07/01/2026 2,600,000 4.000% 6,245,100.00 8,845,100.00 07/01/2027 2,705,000 4.000% 6,141,100.00 8,846,100.00 07/01/2028 2,810,000 4.000% 6,032,900.00 8,842,900.00 07/01/2029 2,925,000 4.000% 5,920,500.00 8,845,500.00 07/01/2030 3,040,000 4.000% 5,803,500.00 8,843,500.00 07/01/2031 3,160,000 4.000% 5,681,900.00 8,841,900.00 07/01/2032 3,290,000 5.000% 5,555,500.00 8,845,500.00 07/01/2033 3,450,000 5.000% 5,391,000.00 8,841,000.00 07/01/2034 3,625,000 5.000% 5,218,500.00 8,843,500.00 07/01/2035 3,805,000 5.000% 5,037,250.00 8,842,250.00 07/01/2036 3,995,000 5.000% 4,847,000.00 8,842,000.00 07/01/2037 5,145,000 5.000% 4,647,250.00 9,792,250.00 07/01/2038 5,405,000 5.000% 4,390,000.00 9,795,000.00 07/01/2039 5,675,000 5.000% 4,119,750.00 9,794,750.00 07/01/2040 9,425,000 5.000% 3,836,000.00 13,261,000.00 07/01/2041 9,895,000 5.000% 3,364,750.00 13,259,750.00 07/01/2042 10,385,000 5.000% 2,870,000.00 13,255,000.00 07/01/2043 10,910,000 5.000% 2,350,750.00 13,260,750.00 07/01/2044 11,455,000 5.000% 1,805,250.00 13,260,250.00 07/01/2045 12,025,000 5.000% 1,232,500.00 13,257,500.00 07/01/2046 12,625,000 5.000% 631,250.00 13,256,250.00 137,615,000 116,579,549.45 254,194,549.45 11.D.1 Packet Pg. 480 Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Project Amounts (16200 : Series 2021 Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 6 BOND DEBT SERVICE Collier County, Florida (Water-Sewer District) Series 2021 Bonds (proposed - Wstewter ImFee & W/S User Fee) **PRELIMINARY FOR DISCUSSION PURPOSES ONLY** Period Ending Principal Coupon Interest Debt Service 07/01/2022 4,198,426.39 4,198,426.39 07/01/2023 2,305,000 4.000% 4,525,250.00 6,830,250.00 07/01/2024 2,405,000 4.000% 4,433,050.00 6,838,050.00 07/01/2025 2,500,000 4.000% 4,336,850.00 6,836,850.00 07/01/2026 2,600,000 4.000% 4,236,850.00 6,836,850.00 07/01/2027 2,705,000 4.000% 4,132,850.00 6,837,850.00 07/01/2028 2,810,000 4.000% 4,024,650.00 6,834,650.00 07/01/2029 2,925,000 4.000% 3,912,250.00 6,837,250.00 07/01/2030 3,040,000 4.000% 3,795,250.00 6,835,250.00 07/01/2031 3,160,000 4.000% 3,673,650.00 6,833,650.00 07/01/2032 3,290,000 5.000% 3,547,250.00 6,837,250.00 07/01/2033 3,450,000 5.000% 3,382,750.00 6,832,750.00 07/01/2034 3,625,000 5.000% 3,210,250.00 6,835,250.00 07/01/2035 3,805,000 5.000% 3,029,000.00 6,834,000.00 07/01/2036 3,995,000 5.000% 2,838,750.00 6,833,750.00 07/01/2037 4,195,000 5.000% 2,639,000.00 6,834,000.00 07/01/2038 4,405,000 5.000% 2,429,250.00 6,834,250.00 07/01/2039 4,625,000 5.000% 2,209,000.00 6,834,000.00 07/01/2040 4,860,000 5.000% 1,977,750.00 6,837,750.00 07/01/2041 5,100,000 5.000% 1,734,750.00 6,834,750.00 07/01/2042 5,355,000 5.000% 1,479,750.00 6,834,750.00 07/01/2043 5,625,000 5.000% 1,212,000.00 6,837,000.00 07/01/2044 5,905,000 5.000% 930,750.00 6,835,750.00 07/01/2045 6,200,000 5.000% 635,500.00 6,835,500.00 07/01/2046 6,510,000 5.000% 325,500.00 6,835,500.00 95,395,000 72,850,326.39 168,245,326.39 Note: PRELIMINARY. Actual results will depend on market conditions at time of sale. 11.D.1 Packet Pg. 481 Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Project Amounts (16200 : Series 2021 Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 7 BOND DEBT SERVICE Collier County, Florida (Water-Sewer District) Series 2021 Bonds (proposed - Water Impact) **PRELIMINARY FOR DISCUSSION PURPOSES ONLY** Period Ending Principal Coupon Interest Debt Service 07/01/2022 2,055,000 4.000% 1,939,473.06 3,994,473.06 07/01/2023 2,008,250.00 2,008,250.00 07/01/2024 2,008,250.00 2,008,250.00 07/01/2025 2,008,250.00 2,008,250.00 07/01/2026 2,008,250.00 2,008,250.00 07/01/2027 2,008,250.00 2,008,250.00 07/01/2028 2,008,250.00 2,008,250.00 07/01/2029 2,008,250.00 2,008,250.00 07/01/2030 2,008,250.00 2,008,250.00 07/01/2031 2,008,250.00 2,008,250.00 07/01/2032 2,008,250.00 2,008,250.00 07/01/2033 2,008,250.00 2,008,250.00 07/01/2034 2,008,250.00 2,008,250.00 07/01/2035 2,008,250.00 2,008,250.00 07/01/2036 2,008,250.00 2,008,250.00 07/01/2037 950,000 5.000% 2,008,250.00 2,958,250.00 07/01/2038 1,000,000 5.000% 1,960,750.00 2,960,750.00 07/01/2039 1,050,000 5.000% 1,910,750.00 2,960,750.00 07/01/2040 4,565,000 5.000% 1,858,250.00 6,423,250.00 07/01/2041 4,795,000 5.000% 1,630,000.00 6,425,000.00 07/01/2042 5,030,000 5.000% 1,390,250.00 6,420,250.00 07/01/2043 5,285,000 5.000% 1,138,750.00 6,423,750.00 07/01/2044 5,550,000 5.000% 874,500.00 6,424,500.00 07/01/2045 5,825,000 5.000% 597,000.00 6,422,000.00 07/01/2046 6,115,000 5.000% 305,750.00 6,420,750.00 42,220,000 43,729,223.06 85,949,223.06 Note: PRELIMINARY. Actual results will depend on market conditions at time of sale. 11.D.1 Packet Pg. 482 Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Project Amounts (16200 : Series 2021 Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 8 BOND DEBT SERVICE Collier County, Florida (Water-Sewer District) Series 2021 (Water & Wastewater) --- Preliminary Numbers Period Annual Ending Principal Coupon Interest Debt Service Debt Service 01/01/2022 2,830,049.45 2,830,049.45 07/01/2022 2,055,000 4.000% 3,307,850.00 5,362,850.00 8,192,899.45 01/01/2023 3,266,750.00 3,266,750.00 07/01/2023 2,305,000 4.000% 3,266,750.00 5,571,750.00 8,838,500.00 01/01/2024 3,220,650.00 3,220,650.00 07/01/2024 2,405,000 4.000% 3,220,650.00 5,625,650.00 8,846,300.00 01/01/2025 3,172,550.00 3,172,550.00 07/01/2025 2,500,000 4.000% 3,172,550.00 5,672,550.00 8,845,100.00 01/01/2026 3,122,550.00 3,122,550.00 07/01/2026 2,600,000 4.000% 3,122,550.00 5,722,550.00 8,845,100.00 01/01/2027 3,070,550.00 3,070,550.00 07/01/2027 2,705,000 4.000% 3,070,550.00 5,775,550.00 8,846,100.00 01/01/2028 3,016,450.00 3,016,450.00 07/01/2028 2,810,000 4.000% 3,016,450.00 5,826,450.00 8,842,900.00 01/01/2029 2,960,250.00 2,960,250.00 07/01/2029 2,925,000 4.000% 2,960,250.00 5,885,250.00 8,845,500.00 01/01/2030 2,901,750.00 2,901,750.00 07/01/2030 3,040,000 4.000% 2,901,750.00 5,941,750.00 8,843,500.00 01/01/2031 2,840,950.00 2,840,950.00 07/01/2031 3,160,000 4.000% 2,840,950.00 6,000,950.00 8,841,900.00 01/01/2032 2,777,750.00 2,777,750.00 07/01/2032 3,290,000 5.000% 2,777,750.00 6,067,750.00 8,845,500.00 01/01/2033 2,695,500.00 2,695,500.00 07/01/2033 3,450,000 5.000% 2,695,500.00 6,145,500.00 8,841,000.00 01/01/2034 2,609,250.00 2,609,250.00 07/01/2034 3,625,000 5.000% 2,609,250.00 6,234,250.00 8,843,500.00 01/01/2035 2,518,625.00 2,518,625.00 07/01/2035 3,805,000 5.000% 2,518,625.00 6,323,625.00 8,842,250.00 01/01/2036 2,423,500.00 2,423,500.00 07/01/2036 3,995,000 5.000% 2,423,500.00 6,418,500.00 8,842,000.00 01/01/2037 2,323,625.00 2,323,625.00 07/01/2037 5,145,000 5.000% 2,323,625.00 7,468,625.00 9,792,250.00 01/01/2038 2,195,000.00 2,195,000.00 07/01/2038 5,405,000 5.000% 2,195,000.00 7,600,000.00 9,795,000.00 01/01/2039 2,059,875.00 2,059,875.00 07/01/2039 5,675,000 5.000% 2,059,875.00 7,734,875.00 9,794,750.00 01/01/2040 1,918,000.00 1,918,000.00 07/01/2040 9,425,000 5.000% 1,918,000.00 11,343,000.00 13,261,000.00 01/01/2041 1,682,375.00 1,682,375.00 07/01/2041 9,895,000 5.000% 1,682,375.00 11,577,375.00 13,259,750.00 01/01/2042 1,435,000.00 1,435,000.00 07/01/2042 10,385,000 5.000% 1,435,000.00 11,820,000.00 13,255,000.00 01/01/2043 1,175,375.00 1,175,375.00 07/01/2043 10,910,000 5.000% 1,175,375.00 12,085,375.00 13,260,750.00 01/01/2044 902,625.00 902,625.00 07/01/2044 11,455,000 5.000% 902,625.00 12,357,625.00 13,260,250.00 01/01/2045 616,250.00 616,250.00 07/01/2045 12,025,000 5.000% 616,250.00 12,641,250.00 13,257,500.00 01/01/2046 315,625.00 315,625.00 07/01/2046 12,625,000 5.000% 315,625.00 12,940,625.00 13,256,250.00 137,615,000 116,579,549.45 254,194,549.45 254,194,549.45 11.D.1 Packet Pg. 483 Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Project Amounts (16200 : Series 2021 Jun 4, 2021 2:33 pm Prepared by PFM Financial Advisors LLC Page 9 AGGREGATE DEBT SERVICE Collier County, Florida (Water-Sewer District) Series 2021 (Water & Wastewater) --- Preliminary Numbers Series 2021 Bonds (proposed - Series 2021 Wstewter ImFee Bonds Period & W/S User (proposed - Aggregate Ending Fee) Water Impact) Other D/S Debt Service 07/01/2022 4,198,426.39 3,994,473.06 12,901,674.26 21,094,573.71 07/01/2023 6,830,250.00 2,008,250.00 9,308,016.76 18,146,516.76 07/01/2024 6,838,050.00 2,008,250.00 9,303,546.26 18,149,846.26 07/01/2025 6,836,850.00 2,008,250.00 9,302,147.76 18,147,247.76 07/01/2026 6,836,850.00 2,008,250.00 9,303,700.76 18,148,800.76 07/01/2027 6,837,850.00 2,008,250.00 9,308,084.76 18,154,184.76 07/01/2028 6,834,650.00 2,008,250.00 9,305,179.26 18,148,079.26 07/01/2029 6,837,250.00 2,008,250.00 13,135,104.76 21,980,604.76 07/01/2030 6,835,250.00 2,008,250.00 14,620,031.26 23,463,531.26 07/01/2031 6,833,650.00 2,008,250.00 14,621,281.26 23,463,181.26 07/01/2032 6,837,250.00 2,008,250.00 14,618,281.26 23,463,781.26 07/01/2033 6,832,750.00 2,008,250.00 14,620,031.26 23,461,031.26 07/01/2034 6,835,250.00 2,008,250.00 14,616,631.26 23,460,131.26 07/01/2035 6,834,000.00 2,008,250.00 14,616,850.00 23,459,100.00 07/01/2036 6,833,750.00 2,008,250.00 14,617,650.00 23,459,650.00 07/01/2037 6,834,000.00 2,958,250.00 14,616,150.00 24,408,400.00 07/01/2038 6,834,250.00 2,960,750.00 14,617,550.00 24,412,550.00 07/01/2039 6,834,000.00 2,960,750.00 14,620,200.00 24,414,950.00 07/01/2040 6,837,750.00 6,423,250.00 13,261,000.00 07/01/2041 6,834,750.00 6,425,000.00 13,259,750.00 07/01/2042 6,834,750.00 6,420,250.00 13,255,000.00 07/01/2043 6,837,000.00 6,423,750.00 13,260,750.00 07/01/2044 6,835,750.00 6,424,500.00 13,260,250.00 07/01/2045 6,835,500.00 6,422,000.00 13,257,500.00 07/01/2046 6,835,500.00 6,420,750.00 13,256,250.00 168,245,326.39 85,949,223.06 228,052,110.88 482,246,660.33 11.D.1 Packet Pg. 484 Attachment: Series 2021 (Water & Wastewater) PRELIM Structure (Level Waste, Wrap Water) -- Updated Project Amounts (16200 : Series 2021 Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 1 OFFICIAL NOTICE OF SALE $__________* Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 Electronic Bids, as Described Herein, Will Be Accepted Until [10:00 a.m.] Eastern Daylight Savings Time, July __, 2021* ____________________ *Preliminary, subject to change. 11.D.2 Packet Pg. 485 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 2 OFFICIAL NOTICE OF SALE $__________* Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 NOTICE IS HEREBY GIVEN that electronic bids will be received in the manner, on the date and up to the time specified below: DATE: July __, 2021* TIME: [10:00 a.m.] Eastern Daylight Savings Time* ELECTRONIC BIDS: May be submitted only through IHS Markit's Parity/BIDCOMP Competitive Bidding System (the "Parity System") as described below. No other form of bid or provider of electronic bidding services will be accepted. GENERAL Bids will be received at the office of the County Manager of Collier County, Florida (the "County"), Collier County Government Complex, 3299 Tamiami Trail East, Naples, Florida 34112, for the purchase of all, but not less than all, of the $__________* Collier County Water- Sewer District Water and Sewer Revenue Bonds, Series 2021 (the "Bonds") to be issued by the Collier County Water-Sewer District (the "District") pursuant to the terms and conditions of Resolution No. CWS-85-13, adopted by the Board of County Commissioners of Collier County, Florida, acting as the ex-officio governing board of the District (the "Governing Body") on December 26, 1985, as amended and supplemented, particularly as supplemented by Resolution 2021-__/CWS Resolution 2021-__ adopted by the Governing Body on June 22, 2021 (collectively, the "Bond Resolution"). Such bids will be opened in public in accordance with applicable legal requirements. The Bond proceeds will be used for the acquisition, construction and equipping of various utility capital improvements within Collier County, Florida (the "County"), as more particularly described in the Bond Resolution and the plans and specifications on file with the County, as the same may be amended or modified from time to time and to pay costs of issuing the Bonds. The Bonds are more particularly described in the Preliminary Official Statement dated June __, 2021 (the "Preliminary Official Statement") relating to the Bonds, available from the District's financial advisor, PFM Financial Advisors LLC, at (786) 671-7480 or masvidals@pfm.com. This Official Notice of Sale contains certain information for quick reference only. It is not, and is not intended to be, a summary of the Bonds. Each bidder is required to read the entire Preliminary Official Statement to obtain information essential to making an informed investment decision. ____________________ *Preliminary, subject to change. 11.D.2 Packet Pg. 486 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 3 Prior to accepting bids, the District reserves the right to change the principal amount of the Bonds being offered and the terms of the Bonds, to postpone the sale to a later date or time, or cancel the sale. Notice of a change or cancellation will be announced via The Bond Buyer news service at the internet website address www.tm3.com, not later than 12:00 p.m., Eastern Daylight Savings Time, on the day preceding the bid opening or as soon as practicable. Such notice will specify the revised principal amount or terms, if any, and any later date or time selected for the sale, which may be postponed or cancelled in the same manner. If the sale is postponed, a later public sale may be held at the hour, in the manner, and on such date as communicated upon at least twenty-four (24) hours' notice via The Bond Buyer news service at the internet website address www.tm3.com. The District reserves the right, after the bids are opened, to adjust the principal amount of the Bonds, as further described herein. See "ADJUSTMENT OF AMOUNTS AND MATURITIES." To the extent any instructions or directions set forth in the Parity System conflict with this Official Notice of Sale, the terms of this Official Notice of Sale shall control. For further information about the Parity System and to subscribe in advance of the bid, potential bidders may contact the Parity System at (212) 849-5021. Each prospective electronic bidder must be a subscriber to the Parity System. Each qualified prospective electronic bidder shall be solely responsible to make necessary arrangements to view the bid form on the Parity System and to access the Parity System for the purposes of submitting its bid in a timely manner and in compliance with the requirements of the Official Notice of Sale. Neither the District nor the Parity System shall have any duty or obligation to provide or assure access to the Parity System to any prospective bidder, and neither the District nor the Parity System shall be responsible for a bidder's failure to register to bid or for proper operation of, or have any liability for any delays or interruptions of, or any damages caused by, the Parity System. The District is using the Parity System as a communication mechanism, and not as the District's agent, to conduct the electronic bidding for the Bonds. The District is not bound by any advice and determination of the Parity System to the effect that any particular bid complies with the terms of this Official Notice of Sale and , in particular, the bid specifications hereinafter set forth. All costs and expenses incurred by prospective bidders in connection with their registration and submission of bids via the Parity System are the sole responsibility of such bidders and the District shall not be responsible, directly or indirectly, for any such costs or expenses. If a prospective bidder encounters any difficulty in submitting, modifying or withdrawing a bid for the Bonds, the prospective bidder should immediately telephone the Parity System at (212) 849-5021, and notify the District's Financial Advisor, PFM Financial Advisors LLC, at (786) 671-7480 or masvidals@pfm.com. The District shall have no responsibility for technological or transmission errors that any bidder may experience in transmitting a bid. The use of the Parity System shall be at the bidder's risk and expense, and the District shall have no liability with respect thereto. THE BONDS The Bonds will be issued in fully registered, book-entry only form, without coupons, will be dated as of their date of delivery (currently anticipated to be July __, 2021), will be issued in denominations of $5,000 or integral multiples thereof, will bear interest from their dated date until paid at the annual rate or rates specified by the successful bidder, subject to the limitations 11.D.2 Packet Pg. 487 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 4 specified below, payable as shown on the Summary Table set forth herein. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Bonds must meet the minimum and maximum reoffering price criteria shown in the Summary Table on a maturity and aggregate basis. The Bonds will mature on the dates, in the years and principal amounts shown on the Summary Table as serial bonds except as otherwise combined into term bonds as described under "STRUCTURE" below. STRUCTURE Any two to five consecutive maturities of the Bonds bearing interest at the same rate may be combined, at the option of the bidder, into term bonds with mandatory sinking fund installments equal to the amounts and years specified in the Official Notice of Sale combined to form a term bond. OPTIONAL REDEMPTION The Bonds maturing on or after July 1, 20__ are subject to redemption in whole or in part, at any time, on or after July 1, 20__, in such order of maturities as may be determined by the District (less than all of a single maturity to be selected by lot), at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed plus accrued interest to the date fixed for redemption, without premium. SECURITY Bonds will be payable from and will be secured by a pledge of and lien upon the Pledged Funds (as defined in the Bond Resolution) which include the Net Revenues (as defined in the Bond Resolution) and other amounts derived from the operation of the System (as defined in the Bond Resolution), and moneys on deposit in certain funds and accounts established under the Bond Resolution, on a parity with the District's Water and Sewer Refunding Revenue Bond, Series 2013, Water and Sewer Refunding Revenue Bond, Series 2015, Water and Sewer Refunding Revenue Bonds, Series 2016, Water and Sewer Revenue Bond, Series 2018 and Water and Sewer Revenue Bonds, Series 2019 and any Additional Bonds (as defined in the Bond Resolution) subsequently issued pursuant to the Bond Resolution , all in the manner and to the extent provided in the Bond Resolution and as described in the Preliminary Official Statement. See the Preliminary Official Statement for more information regarding the security for the Bonds. 11.D.2 Packet Pg. 488 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 5 Summary Table If numerical or date references contained in the body of this Official Notice of Sale conflict with this Summary Table , the body of this Official Notice of Sale shall control. Consult the body of this Official Notice of Sale for a detailed explanation of the items contained in the Summary Table, including interpretation of such items and methodologies used to determine such items. Prospective purchasers of the bonds must read the entire Official Notice of Sale and the entire Preliminary Official Statement. Terms of the Bonds Dated Date: Date of Delivery Anticipated Date of Delivery: July __, 2021* Interest Payment Dates: January 1 and July 1, commencing January 1, 2022 Principal Payment Dates (July 1): Year* Principal Amount* Interest Calculation: 360-day year of twelve 30-day months Ratings: Moody's: _____ Fitch: _____ Bidding Parameters Sale Date: June __, 2021* Bidding Method: Parity System All or none vs. Maturity-by-Maturity: All-or-none Bid Award Method: Lowest true interest cost Bid Confirmation: Fax or emailed (PDF) signed Official Confirmation of Bid Bid Award: As soon as practicable on day of sale Good Faith Deposit: $__________; See "GOOD FAITH DEPOSIT" herein Coupon Multiples: 1/8 or 1/20 of 1% Optional Redemption: Yes, on or after July 1, 20__. Term Bonds: Yes, at bidder's option. See "STRUCTURE" herein. Maximum Reoffering Price: Maturity Unlimited Aggregate Unlimited Minimum Reoffering Price: Maturity ___% Aggregate ___% Insurance: At bidder's option. See "MUNICIPAL BOND INSURANCE OPTION" herein. Adjustment Parameters Principal Increases: Maturity Unlimited Aggregate ___% Principal Reductions: Maturity Unlimited Aggregate ___% ____________________ * Preliminary, subject to change. **May be combined into term bonds. See "STRUCTURE" herein. 11.D.2 Packet Pg. 489 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 6 ADJUSTMENT OF AMOUNTS AND MATURITIES The aggregate principal amount of each maturity of Bonds is subject to adjustment by the District after the receipt and opening of the bids for their purchase. Changes to be made after the opening of the bids will be communicated to the successful bidder directly prior to 8:00 a.m., Eastern Daylight Savings Time on the date following the sale date. The District may cancel the sale of the Bonds or adjust the aggregate principal amount. The District may increase or decrease the principal amount of the Bonds or any maturity thereof by no more than the individual maturity or aggregate principal percentages, if any, shown in the Summary Table. This may include the elimination of one or more maturities. The District will consult with the successful bidder before adjusting the amount of any maturity of the Bonds or canceling the Bonds; however, the District reserves the sole right to make adjustments, within the limits described above, or cancel the sale of the Bonds. Adjustment to the size of the Bonds within the limits described above does not relieve the successful bidder from its obligation to purchase all of the Bonds offered by the District. Each bid must specify the initial reoffering prices to the public of each maturity of Bonds. Adjustments may be made to the principal amounts based on the reoffering prices shown on the Parity System. In determining whether there will be any revision to the principal amount of or maturity of the Bonds subsequent to the bid opening and award, the District expects that changes may be made that are necessary to increase or decrease the principal amount of the Bonds to meet the District's funding objectives, all subject to the limitations set forth above. In the event that the principal amount of any maturity of the Bonds is revised after the award, the interest rate and reoffering price for each maturity and the Underwriter's Discount on the Bonds as submitted by the successful bidder shall be held constant. The "Underwriter's Discount" shall be defined as the difference between the purchase price of the Bonds submitted by the bidder and the price at which the Bonds will be issued to the public, calculated from information provided by the bidder, divided by the par amount of the Bonds bid. FORM AND PAYMENT The Bonds will be issued in fully registered , book-entry only form and a bond certificate for each maturity will be issued to The Depository Trust Company, New York, New York ("DTC"), registered in the name of its nominee, Cede & Co. A book-entry system will be employed, evidencing ownership of the Bonds, with transfers of ownership effected on the records of DTC and its participants pursuant to rules and procedures adopted by DTC and its participants. The successful bidder, as a condition to delivery of the Bonds, will be required to deposit the Bond certificates with DTC or the Registrar (as 11.D.2 Packet Pg. 490 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 7 defined below), registered in the name of Cede & Co. Principal of, premium, if any, and interest on the Bonds will be payable by U.S. Bank National Association, Orlando, Florida, the paying agent and registrar (the "Paying Agent" or the "Registrar") for the Bonds by wire transfer or in clearinghouse funds to DTC or its nominee as registered owner of the Bonds. Transfer of principal, premium, if any, and interest payments to the beneficial owners by participants of DTC will be the responsibility of such participants and other nominees of beneficial owners. Neither the District nor the Registrar will be responsible or liable for payments by DTC to its participants or by DTC participants to beneficial owners or for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. Principal and interest on the Bonds is payable on the dates shown in the Summary Table and in accordance with the Bond Resolution. So long as DTC or its nominee is the registered owner of the Bonds, payments of principal, interest and any redemption premium on the Bonds will be made by the Paying Agent to DTC or its nominee. PRELIMINARY OFFICIAL STATEMENT AND FINAL OFFICIAL STATEMENT The District has authorized the preparation and distribution of a Preliminary Official Statement containing information relating to the Bonds. The Preliminary Official Statement has been deemed final by the District as required by Rule 15c2-12 of the Securities and Exchange Commission. The District will furnish the successful bidder on the date of closing, with its certificate as to the completeness and accuracy of the Official Statement. The Preliminary Official Statement and this Official Notice of Sale and any other information concerning the proposed financing will be available from PFM Financial Advisors LLC, Financial Advisor to the District, 2222 Ponce de Leon Boulevard, Third Floor, Coral Gables, Florida 33134, telephone: (786) 671-7480 or email masvidals@pfm.com. The Preliminary Official Statement, when amended to reflect the actual amount of the Bonds sold, the interest rates specified by the successful bidder and the price or yield at which the successful bidder will reoffer the Bonds to the public, together with any other information required by law, will constitute a final "Official Statement" with respect to the Bonds as that term is defined in Rule 15c2-12. The District shall furnish at its expense within seven (7) business days after the Bonds have been awarded to the successful bidder no more than 50 copies of the final Official Statement. Additional copies of the Official Statement may be provided at the request and expense of the winning bidder. If the Bonds are awarded to a syndicate, the District will designate the senior managing underwriter of the syndicate as its agent for purposes of distributing copies of the Official Statement to each participating underwriter. Any underwriter submitting a bid with respect to the Bonds agrees thereby that if its bid is accepted, it shall accept such designation and shall enter into 11.D.2 Packet Pg. 491 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 8 a contractual relationship with all participating underwriters for the purpose of assuring the receipt and distribution by each participating underwriter of the Official Statement. LEGAL OPINIONS The Bonds will be sold subject to the opinion of Nabors, Giblin & Nickerson, P.A., the District's Bond Counsel, as to the legality thereof and such opinion will be furnished without cost to the purchaser and all bids will be so conditioned. A form of Bond Counsel's opinion is attached to the Preliminary Official Statement as Appendix D. Certain matters will be passed on for the District by Jeffrey A. Klatzkow, Esq., County Attorney and Bryant Miller Olive P.A., the District's Disclosure Counsel. A legal opinion (or reliance letter thereon) of Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel, and a legal opinion of Jeffrey A. Klatzkow, Esq., County Attorney, with respect to certain matters concerning the Official Statement will be furnished without charge to the successful bidder at the time of delivery of the Bonds. MUNICIPAL BOND INSURANCE OPTION The purchase of municipal bond insurance, if available, will be at the option and expense of the bidder. The successful bidder will be responsible for the payment of all costs associated with any such insurance, including the premium charged by the insurer. The bidder understands, by submission of its bid, that the bidder is solely responsible for the selection of any insurer and for all negotiations with the insurer as to the premium to be paid. If all or a portion of the Bonds are awarded on an insured basis, none of the provisions of the Bond Resolution nor any other financing document will be altered nor will the District consent to make additional representations, undertakings or warranties. In addition, if the successful bidder is arranging for bond insurance for all or a portion of the Bonds, it also shall provide the amount of the premium to be paid and certification that the present value of the premium is less than the present value of the interest reasonably expected to be saved as a result of the insurance and that the premium does not exceed a reasonable arms-length charge for the transfer of credit risk accomplished through bond insurance. BIDDING PROCEDURE Only electronic bids submitted via the Parity System will be accepted. No other provider of electronic bidding services will be accepted. No bid delivered in person or by facsimile directly to the District will be accepted. Bidders are permitted to submit bids for the Bonds during the bidding time period, provided they are eligible to bid as described under "GENERAL" above. Each electronic bid submitted via the Parity System shall be deemed an irrevocable offer in response to this Official Notice of Sale and shall be binding 11.D.2 Packet Pg. 492 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 9 upon the bidder as if made by a signed, sealed bid delivered to the District. All bids remain firm until an award is made. FORM OF BID Bidders must bid to purchase all maturities of the Bonds. Each bid must specify (1) an annual rate of interest for each maturity, (2) reoffering price or yield for each maturity and (3) a dollar purchase price for the entire issue of the Bonds. No more than one (1) bid from any bidder will be considered. A bidder must specify the rate or rates of interest per annum (with no more than one rate of interest per maturity), which the Bonds are to bear, to be expressed in multiples of 1/8 or 1/20 of 1%. Any number of interest rates may be named, but the Bonds of each maturity must bear interest at the same single rate for all bonds of that maturity. Each bid for the Bonds must meet the minimum and maximum reoffering price criteria shown in the Summary Table on a maturity and aggregate basis. Each bidder must specify, as part of its bid, the prices or yields at which a substantial amount (i.e., at least 10%) of the Bonds of each maturity will be offered and sold to the public. Reoffering prices presented as a part of the bids will not be used in computing the bidder's true interest cost. As promptly as reasonably possible after bids are received, the District will notify the successful bidder that it is the apparent winner. AWARD OF BID The District expects to award the Bonds to the winning bidder as soon as practicable after the bids are opened on the sale date. Bids may not be withdrawn prior to the award. Unless all bids are rejected, the Bonds will be awarded by the District on the sale date to the bidder whose bid complies with this Official Notice of Sale and results in the lowest true interest cost ("TIC") to the District. The lowest TIC will be determined by doubling the semi-annual interest rate, compounded semi-annually, necessary to discount the debt service payments from the payment dates to the dated date of the Bonds and to the aggregate purchase price of the Bonds. If two or more responsible bidders offer to purchase the Bonds at the same lowest TIC, the District will award the Bonds to one of such bidders by lot. Only the final bid submitted by any bidder through the Parity System will be considered. The right reserved to the District shall be final and binding upon all bidders with respect to the form and adequacy of any proposal received and as in its conformity to the terms of this Official Notice of Sale. RIGHT OF REJECTION THE DISTRICT RESERVES THE RIGHT, IN ITS DISCRETION, TO REJECT ANY AND ALL BIDS, FOR ANY REASON, AND TO WAIVE IRREGULARITY OR INFORMALITY IN ANY BID. 11.D.2 Packet Pg. 493 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 10 DELIVERY AND PAYMENT Delivery of the Bonds will be made by the District to DTC in book-entry only form, in New York, New York on or about the delivery date shown in the Summary Table, or such other date agreed upon by the District and the successful bidder. Payment for the Bonds must be made in Federal Funds or other funds immediately available to the District at the time of delivery of the Bonds. Any expenses incurred in providing immediate funds, whether by transfer of Federal Funds or otherwise, will be borne by the purchaser. The District intends to conduct the closing in Naples, Florida. RIGHT OF CANCELLATION The successful bidder will have the right, at its option, to cancel its obligation to purchase the Bonds if the Registrar fails to authenticate the Bonds and tender the same for delivery within 60 days from the date of sale thereof, and in such event the successful bidder will be entitled to the return of the Good Faith Deposit accompanying its bid. GOOD FAITH DEPOSIT The successful bidder for the Bonds is required to submit its Good Faith Deposit (see Summary Table) to the District in the form of a wire transfer in federal funds not later than 2:30 p.m., Eastern Daylight Savings Time, on the day of the award. If such deposit is not received by that time, the District may reject such bid and award the Bonds to the bidder that submitted the next best bid in accordance with the terms of the Official Notice of Sale. Wiring instructions for the Good Faith Deposit are as follows: [Bank: First Florida Integrity Bank Routing #: 067016325 Acct. Name: Board of County Commissioners - Concentration Account Acct. #: 1056407 REF: 2021 Water and Sewer District Closing Attention: Ronald S. Dortch] The Good Faith Deposit so wired will be retained by the District until the delivery of such Bonds, at which time the Good Faith Deposit will be applied against the purchase price of such Bonds or the Good Faith Deposit will be retained by the District as partial liquidated damages in the event of the failure of the successful bidder to take up and pay for such Bonds in compliance with the terms of the Official Notice of Sale and of its bid. The District will pay no interest on the Good Faith Deposit. The balance of the purchase price must be wired in federal funds to the account detailed in the closing memorandum provided by the District to the successful purchaser, simultaneously with delivery of such Bonds. 11.D.2 Packet Pg. 494 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 11 CUSIP NUMBERS It is anticipated that CUSIP numbers will be printed on the Bonds, but neither failure to print such numbers on any Bonds nor any error with respect thereto will constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds. Bond Counsel will not review or express any opinion as to the correctness of such CUSIP numbers. The policies of the CUSIP Service Bureau will govern the assignment of specific numbers to the Bonds. The District's Financial Advisor will be responsible for applying for and obtaining CUSIP numbers for the Bonds. All expenses in relation to the printing of CUSIP numbers on the Bonds will be paid for by the District; provided, however, that the CUSIP Service Bureau charge for the assignment of said numbers will be the responsibility of and will be paid for by the successful bidder. BLUE SKY The District has not undertaken to register the Bonds under the securities laws of any state, nor investigated the eligibility of any institution or person to purchase or participate in the underwriting of the Bonds under any applicable legal investment, insurance, banking or other laws. By submitting a bid for the Bonds, the successful bidder represents that the sale of the Bonds in states other than Florida will be made only under exemptions from registration or, wherever necessary, the successful bidder will register the Bonds in accordance with the securities laws of the state in which the Bonds are offered or sold. The District agrees to cooperate with the successful bidder, at the bidder's written request and expense, in registering the Bonds or obtaining an exemption from registration in any state where such action is necessary; provided, however, that the District shall not be required to consent to suit or to service of process in any jurisdiction. CERTAIN DISCLOSURE OBLIGATIONS OF THE PURCHASER Section 218.38(1)(b)(2), Florida Statutes, requires that the successful purchaser file a statement with the District containing information with respect to any fee, bonus or gratuity paid, in connection with the Bonds, by any underwriter or financial consultant to any person not regularly employed or engaged by such underwriter or consultant. Receipt of such statement is a condition precedent to the delivery of the Bonds to such successful bidder. The winning bidder must (1) complete the Truth-in-Bonding Statement provided by Bond Counsel (the form of which is attached hereto as Exhibit A) and (2) indicate whether such bidder has paid any finder's fee to any person in connection with the sale of the Bonds in accordance with Section 218.386, Florida Statutes. 11.D.2 Packet Pg. 495 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 12 ESTABLISHMENT OF ISSUE PRICE The winning bidder shall assist the District in establishing the issue price of the Bonds and shall execute and deliver to the District on or prior to the closing date for the Bonds an "issue price" or similar certificate setting forth the reasonably expected initial offering prices to the public or the actual sales price or prices of the Bonds, together with the supporting pricing wires or equivalent communications, substantially in the applicable form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the District and Bond Counsel. The District intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining "competitive sale" for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds ("competitive sale requirements") because: (1) the District has disseminated this Official Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; (2) all bidders shall have an equal opportunity to bid; (3) the District expects to receive bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (4) the District anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the lowest true interest cost, as set forth in this Official Notice of Sale. Any bid submitted pursuant to this Official Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. BY SUBMITTING A BID FOR THE BONDS, A BIDDER REPRESENTS AND WARRANTS TO THE DISTRICT THAT THE BIDDER HAS AN ESTABLISHED INDUSTRY REPUTATION FOR UNDERWRITING NEW ISSUANCES OF MUNICIPAL BONDS SUCH AS THE BONDS AND SUCH BIDDER'S BID IS SUBMITTED FOR AND ON BEHALF OF SUCH BIDDER BY AN OFFICER OR AGENT WHO IS DULY AUTHORIZED TO BIND THE BIDDER TO A LEGAL, VALID AND ENFORCEABLE CONTRACT FOR THE PURCHASE OF THE BONDS. Once the bids are communicated electronically via the Parity System to the District, each bid will constitute an irrevocable offer to purchase the Bonds on the terms herein and therein provided. In the event that the competitive sale requirements are not satisfied, the District shall so advise the winning bidder. In such case, the District shall treat the first price at which 11.D.2 Packet Pg. 496 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 13 10% of a maturity of the Bonds is sold to the public (the "10% test") as the issue price of that maturity, applied on a maturity-by-maturity basis. The winning bidder shall advise the District if any maturity of the Bonds satisfies the 10% test as of the date and time of the award of the Bonds. The District will not require bidders to comply with the "hold- the-offering-price rule" set forth in Treasury Regulation Section 1.148-1(f)(2)(ii) and therefore does not intend to use the initial offering price to the public as of the sale date of any maturity of the Bonds as the issue price of that maturity. Bids will not be subject to cancellation by the bidders in the event that the competitive sale requirements are not satisfied; provided, however, the District reserves the right to reject any and all bids, for any reason, as set forth under "RIGHT OF REJECTION" herein. Bidders should prepare their bids on the assumption that all of the maturities of the Bonds will be subject to the 10% test in order to establish the issue price of the Bonds. If the competitive sale requirements are not satisfied, then until the 10% test has been satisfied as to each maturity of the Bonds, the winning bidder agrees to promptly report to the District the prices at which the unsold Bonds of each maturity have been sold to the public. That reporting obligation shall continue, whether or not the closing date for the Bonds has occurred, until the 10% test has been satisfied for each maturity or until all Bonds of that maturity have been sold. By submitting a bid and if the competitive sale requirements are not met, each bidder confirms that: (i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the winning bidder that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public , if and for so long as directed by the winning bidder and as set forth in the related pricing wires, and (ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the winning bidder or such underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public, if and for so long as directed by the winning bidder or such underwriter and as set forth in the related pricing wires. 11.D.2 Packet Pg. 497 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 14 Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to the public for purposes of this Official Notice of Sale. Further, for purposes of this Official Notice of Sale: (i) "public" means any person other than an underwriter or a related party (as defined in Section 1.150-1(b) of the Treasury Regulations) to an underwriter, (ii) "underwriter" means (A) any person that agrees pursuant to a written contract (i.e. this Official Notice of Sale) with the District (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public), (iii) generally, a purchaser of any of the Bonds is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) "sale date" means the date that the Bonds are awarded by the District to the winning bidder. CONTINUING DISCLOSURE The District has covenanted to provide ongoing disclosure in accordance with Rule 15c2-12 of the Securities and Exchange Commission. The specific nature of the information to be contained in the annual report and the notices of material events are set forth in the Continuing Disclosure Certificate which is reproduced in its entirety in Appendix E attached to the Preliminary Official Statement for the Bonds. The covenants have been undertaken by the District in order to assist the successful purchaser in complying with clause (b)(5) of Rule 15c2-12 of the Securities and Exchange Commission. 11.D.2 Packet Pg. 498 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 - Official Notice of Sale Page 15 CERTIFICATE The District will deliver to the purchaser of the Bonds a certificate of an official of the District, dated the date of delivery of said Bonds, stating that as of the date thereof, to the best of the knowledge and belief of said official, the Official Statement does not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and further certifying that the signatory knows of no material adverse change in the financial condition of the District. CHOICE OF LAW Any litigation or claim arising out of any bid submitted (regardless of the means of submission) pursuant to this Official Notice of Sale shall be governed by and construed in accordance with the laws of the State of Florida. The venue situs for any such action shall be the state courts of the Twentieth Judicial Circuit in and for Collier County, Florida. NOTICE OF BIDDERS REGARDING PUBLIC ENTITY CRIMES A person or affiliate who has been placed on the Convicted Vendor List (as described in Florida Statutes) following a conviction for a public entity crime may not submit a bid. COLLIER COUNTY WATER-SEWER DISTRICT By: /s/ Penny Taylor, Chairman Chairman, Board of County Commissioners of Collier County, Florida, as the Ex-Officio Chairman of the Governing Board of the Collier County Water-Sewer District Dated: June __, 2021 11.D.2 Packet Pg. 499 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) A-1 EXHIBIT A TRUTH-IN-BONDING STATEMENT __________, 2021 Board of County Commissioners of Collier County, Florida, as the Ex-Officio Governing Board of the Collier County Water-Sewer District Re: Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021 Dear Commissioners: The purpose of the following two paragraphs is to furnish, pursuant to the provisions of Sections 218.385(2) and (3), Florida Statutes, as amended, the truth-in-bonding statement required thereby, as follows: (a) The District is proposing to issue $_________ principal amount of the above- referenced Bonds for the principal purposes of the acquisition, construction and equipping of various utility capital improvements, as more particularly described in the plans and specifications on file with the District, and paying certain costs of issuance of the Bonds. This obligation is expected to be repaid over a period of approximately ____ years. At a true interest cost of ____%, total interest paid over the life of the obligation will be approximately $_______________. (b) The Bonds are special limited obligations of the District. The principal source of repayment or security for the Bonds is certain net revenues and other amounts derived from the operation of the System (as described in the Official Statement for the Bonds). Authorizing this debt will result in approximately $___________ (representing the average annual debt service with respect to the Bonds) of such moneys being used to pay debt service on the Bonds each year for ______ years. The foregoing is provided for information purposes only and shall not affect or control the actual terms and conditions of the Bonds. Very truly yours, Underwriter By: Authorized Signatory 11.D.2 Packet Pg. 500 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) B-1 EXHIBIT B FORM OF ISSUE PRICE CERTIFICATE $__________ COLLIER COUNTY WATER-SEWER DISTRICT WATER AND SEWER REVENUE BONDS, SERIES 2021 ISSUE PRICE CERTIFICATE The undersigned, on behalf of __________ ("__________"), hereby represents and warrants that it has an established industry reputation for underwriting new issuances of municipal bonds and certifies as set forth below with respect to the sale of the above- captioned obligations (the "Bonds"). [Alternate 1 - Competitive Safe Harbor Met] [1. Reasonably Expected Initial Offering Price. (a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by __________ are the prices listed in Schedule A (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Bonds used by __________ in formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy of the bid provided by __________ to purchase the Bonds. (b) __________ was not given the opportunity to review other bids prior to submitting its bid. (c) The bid submitted by __________ constituted a firm offer to purchase the Bonds.] [Alternate 2 - Competitive Sale Requirements Not Met – General Rule to Apply] [1. Sale of the Bonds. As of the date of this certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A. Each maturity of the Bonds of which at least 10% of such maturity has not yet been sold to the public (the "Unsold Bonds") is also identified in Schedule A. Attached as Schedule B are true and correct copies of the bid provided by __________ to purchase the Bonds, and the pricing wire or equivalent communication for the Bonds. __________ has and will comply with the requirements set forth under the heading "Establishment of Issue Price Certificate" in the Official Notice of Sale for the Bonds, including reporting on the sale prices of the Unsold Bonds after the date hereof as provided therein.] 2. Defined Terms. (a) Issuer means Collier County Water-Sewer District. 11.D.2 Packet Pg. 501 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) B-2 (b) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership , directly or indirectly. (d) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is __________, 2021. (e) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public , and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents __________'s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Certificate as to Arbitrage and Certain Other Tax Matters relating to the Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by Nabors, Giblin & Nickerson, P.A. in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. __________ By: [Name] Dated: __________, 2019 11.D.2 Packet Pg. 502 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) SCHEDULE A EXPECTED OFFERING PRICES OR PRICES OF SOLD AND UNSOLD BONDS 11.D.2 Packet Pg. 503 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) SCHEDULE B COPY OF UNDERWRITER'S BID AND PRICING WIRE 11.D.2 Packet Pg. 504 Attachment: EXHIBIT B - Form of Official Notice of Sale (16200 : Series 2021 Bond) 25694/010/01768238.DOCXv3 PRELIMINARY OFFICIAL STATEMENT DATED _____________, 2021 NEW ISSUE –FULL BOOK ENTRY See "RATINGS" herein In the opinion of bond counsel, assuming compliance by the City with certain covenants, under existing statutes, regulations, and judicial decisions, the interest on the Series 2021 Bonds will be excluded from gross income for federal income tax purposes of the holders thereof and will not be an item of tax preference for purposes of the federal alternative minimum tax. See "TAX MATTERS" herein for a description of other tax consequences to holders of the Series 2021 Bonds. $__________* COLLIER COUNTY WATER-SEWER DISTRICT (FLORIDA) WATER AND SEWER REVENUE BONDS, SERIES 2021 Dated: Date of Delivery Due: July 1, as shown on the inside cover hereof The Water and Sewer Revenue Bonds, Series 2021 (the "Series 2021 Bonds") are being issued by the Collier County Water-Sewer District (the "District") as fully registered bonds and initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Individual purchases will be made in book-entry form only in denominations of $5,000 and integral multiples thereof. Purchasers of the Series 2021 Bonds will not receive physical delivery of certificates. Transfers of ownership interest in the Series 2021 Bonds will be effected by the DTC book-entry system as described herein. Interest on the Series 2021 Bonds is payable on January 1, 2022 and semiannually on each January 1 and July 1 thereafter. Principal of, premium, if any, and interest on the Series 2021 Bonds will be payable by U.S. Bank National Association, Orlando, Florida , as Paying Agent and Bond Registrar. _________________________ The Series 2021 Bonds are subject to redemption prior to their stated maturities as described herein. _________________________ This cover page contains information for quick reference only and is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. _________________________ The Series 2021 Bonds are being issued to (i) finance the acquisition, construction and equipping of various utility capital improvements within Collier County, Florida (the "County") (as more particularly described in "THE 2021 PROJECT" herein); (ii) fund a portion of the debt service reserve account; and (iii) pay certain costs of issuance of the Series 2021 Bonds. The Series 2021 Bonds are being issued as "Additional Bonds" on a parity with the District's outstanding Water and Sewer Refunding Revenue Bond, Series 2013, Water and Sewer Refunding Revenue Bond, Series 2015, Water and Sewer Refunding Revenue Bonds, Series 2016, Water and Sewer Revenue Bond, Series 2018 and Water and Sewer Revenue Bonds, Series 2019 (collectively, the "Outstanding Parity Bonds"), all issued by the District pursuant to the provisions of Resolution No. CWS-85-5 adopted on July 30, 1985, as amended and restated by Resolution No. CWS-85-13 adopted on December 26, 1985, as amended and supplemented, and particularly as amended by Resolution No. CWS-87-5 adopted on March 3, 1987, Resolution No. CWS -91-6 adopted on October 22, 1991 and 25694/010/01768238.DOCXv3 Resolution No. CWS-2006-298 adopted on November 14, 2006, particularly as supplemented by Resolution No. 2021-__/CWS Resolution No. 2021-__ adopted on June 22, 2021 (collectively, the "Resolution"). _________________________ THE SERIES 2021 BONDS ARE SECURED BY A PLEDGE OF AND LIEN ON, THE PLEDGED FUNDS (AS DEFINED IN THE RESOLUTION), ON PARITY AND EQUAL STATUS WITH THE OUTSTANDING PARITY BONDS, IN THE MANNER AND TO THE EXTENT PROVIDED IN THE RESOLUTION. SEE "SECURITY FOR THE BONDS" HEREIN. THE SERIES 2021 BONDS SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL OBLIGATION OR PLEDGE OF THE FAITH AND CREDIT OF THE DISTRICT, THE COUNTY, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION OF THE STATE OF FLORIDA FOR THE PAYMENT OF THE SERIES 2021 BONDS. THE SERIES 2021 BONDS AND THE OBLIGATIONS EVIDENCED THEREBY DO NOT CONSTITUTE A LIEN UPON ANY PROPERTY OF THE DISTRICT, COLLIER COUNTY OR THE STATE OF FLORIDA, BUT SHALL CONSTITUTE A LIEN ONLY ON, AND BE PAYABLE SOLELY FROM, THE PLEDGED FUNDS IN THE MANNER AND TO THE EXTENT DESCRIBED IN THE RESOLUTION. _________________________ The Series 2021 Bonds are offered when, as, and if issued by the District and received by the Underwriter, subject to the opinion on certain legal matters relating to their issuance by Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel. Certain legal matters will be passed upon for the District by Jeffrey A. Klatzkow, Esq., District Attorney and by Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel. PFM Financial Advisors LLC, Coral Gables, Florida is serving as Financial Advisor to the District. It is expected that the Series 2021 Bonds in definitive form will be available for delivery to the Underwriter in New York, New York at the facilities of DTC on or about ________________, 2021. Electronic bids for the Series 2021 Bonds will be received through Parity/BIDCOMP Competitive Bidding System as described in the Official Notice of Sale. This Official Statement is dated ___________________, 2021. *Preliminary, subject to change. 25694/010/01768238.DOCXv3 $___________* COLLIER COUNTY WATER-SEWER DISTRICT WATER AND SEWER REVENUE BONDS, SERIES 2021 MATURITIES, AMOUNTS, INTEREST RATES, PRICES , YIELDS AND INITIAL CUSIP NUMBERS $________________*Serial Bonds Maturity (July 1)* Amount* Interest Rate Price Yield Initial CUSIP Number** $ % % * Preliminary, subject to change. ** The District is not responsible for the use of the CUSIP numbers referenced herein nor is any representation made by the District as to their correctness. The CUSIP numbers provided herein are included solely for the convenience of the readers of this Official Statement. *** May be combined into term bonds. See “STRUCTURE” in the Official Notice of Sale. 25694/010/01768238.DOCXv3 RED HERRING LANGUAGE: This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the Series 20 21 Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, qualification or exemption under the securities laws of such jurisdiction. The District has deemed this Preliminary Official Statement "final," except for certain permitted omissions, within the contemplation of Rule 15c2 -12 promulgated by the Securities and Exchange Commission. 25694/010/01768238.DOCXv3 COLLIER COUNTY WATER-SEWER DISTRICT 3339 Tamiami Trail East, Suite 302 Naples, Florida 34112 BOARD OF COUNTY COMMISSIONERS Penny Taylor, Chairman William L. McDaniel, Jr., Vice Chairman Rick LoCastro, Commissioner Burt L. Saunders, Commissioner Andy Solis, Commissioner COUNTY MANAGER Mark Isackson CLERK OF THE CIRCUIT COURT AND COMPTROLLER Crystal K. Kinzel DIRECTOR OF FINANCE AND ACCOUNTING Derek M. Johnssen COUNTY ATTORNEY/ATTORNEY TO THE DISTRICT Jeffrey A. Klatzkow, Esq. PUBLIC UTILITIES DEPARTMENT HEAD G. George Yilmaz, Ph.D. DIRECTOR OF FINANCIAL OPERATIONS SUPPORT FOR PUBLIC UTILITIES Joseph G. Bellone BOND COUNSEL Nabors, Giblin & Nickerson, P.A. Tampa, Florida DISCLOSURE COUNSEL Bryant Miller Olive P.A. Tampa, Florida FINANCIAL ADVISOR PFM Financial Advisors LLC Coral Gables, Florida FINANCIAL FEASIBILITY CONSULTANT Public Resources Management Group, Inc. Maitland, Florida CONSULTING ENGINEER AECOM Fort Myers, Florida 25694/010/01768238.DOCXv3 No dealer, broker, salesman or other person has been authorized by the District, the County or the Underwriter to give any information or to make any representations in connection with the Series 2021 Bonds, other than as contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the District or the County. 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 2021 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the District, DTC and other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the Underwriter. The Underwriter listed in the section entitled "UNDERWRITING" herein has reviewed the information in this Official Statement in accordance with and as part of its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change, and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in the matters described herein since the date hereof. All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Series 2021 Bonds are qualified in their entirety by reference to the form thereof included in the aforesaid documents and agreements. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2021 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE DISTRICT AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2021 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS OFFICIAL STATEMENT CONSTITUTE "FORWARD-LOOKING STATEMENTS." SUCH STATEMENTS GENERALLY ARE IDENTIFIABLE BY THE TERMINOLOGY USED, SUCH AS "PLAN," "EXPECT," "ESTIMATE," "PROJECT," "ANTICIPATE," "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 THAT 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. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED UNDER "CONTINUING DISCLOSURE" HEREIN. 25694/010/01768238.DOCXv3 i TABLE OF CONTENTS Contents Page INTRODUCTION ....................................................................................................................................................... 1 The County and the District .................................................................................................................................. 1 The Series 2021 Bonds ............................................................................................................................................ 2 Purpose of the Series 2021 Bonds .......................................................................................................................... 2 Security for the Bonds ............................................................................................................................................ 2 Reserve Account ...................................................................................................................................................... 2 Redemption Provisions .......................................................................................................................................... 3 Additional Bonds .................................................................................................................................................... 3 Tax Exemption ......................................................................................................................................................... 3 Continuing Disclosure ............................................................................................................................................ 3 Additional Information .......................................................................................................................................... 3 THE 2021 PROJECT .................................................................................................................................................... 3 DESCRIPTION OF THE SERIES 2021 BONDS ....................................................................................................... 4 General ..................................................................................................................................................................... 4 Payment of the Series 2021 Bonds ........................................................................................................................ 4 Exchange, Registration and Transfer ................................................................................................................... 5 Ownership of Series 2021 Bonds ........................................................................................................................... 5 Redemption Provisions .......................................................................................................................................... 5 Book-Entry Only System ........................................................................................................................................ 6 SECURITY FOR THE BONDS .................................................................................................................................. 8 General ..................................................................................................................................................................... 8 Rate Covenant ....................................................................................................................................................... 10 Funds and Accounts ............................................................................................................................................. 10 Construction Fund ................................................................................................................................................ 10 Separate Accounts ................................................................................................................................................. 11 Disposition of Revenues ....................................................................................................................................... 11 System Development Fees Fund ......................................................................................................................... 12 Reserve Account .................................................................................................................................................... 12 Additional Bonds .................................................................................................................................................. 13 Subordinated Indebtedness ................................................................................................................................. 14 No Mortgage or Sale of the System .................................................................................................................... 14 No Free Service ...................................................................................................................................................... 14 No Impairment of Rights ..................................................................................................................................... 15 Compulsory Water and Sewer Connections ..................................................................................................... 15 Enforcement of Charges ....................................................................................................................................... 15 Unit Water and Sewer Bills .................................................................................................................................. 15 Collection of System Development Fees ............................................................................................................ 16 Remedies ................................................................................................................................................................ 16 ESTIMATED SOURCES AND USES OF FUNDS ................................................................................................ 17 DEBT SERVICE SCHEDULE .................................................................................................................................. 18 THE COUNTY .......................................................................................................................................................... 19 General ................................................................................................................................................................... 19 25694/010/01768238.DOCXv3 ii Board of County Commissioners ........................................................................................................................ 19 County Manager ................................................................................................................................................... 19 Budget Process ...................................................................................................................................................... 19 Annual Audit ......................................................................................................................................................... 20 THE DISTRICT .......................................................................................................................................................... 20 Background ............................................................................................................................................................ 20 Powers .................................................................................................................................................................... 20 Management .......................................................................................................................................................... 21 Billings and Collections ........................................................................................................................................ 21 THE SYSTEM ............................................................................................................................................................ 22 General ................................................................................................................................................................... 22 Water System ......................................................................................................................................................... 23 Sewer System ......................................................................................................................................................... 34 Sewer System Capacity ........................................................................................................................................ 41 Rates, Fees and Charges ....................................................................................................................................... 42 System Development Fees ................................................................................................................................... 48 Capital Improvement Program and Anticipated Funding .............................................................................. 49 Historical Operating Results ............................................................................................................................... 52 Projected Operating Results ................................................................................................................................ 54 Conclusions of the Consulting Engineer ........................................................................................................... 56 Conclusions of the Financial Feasibility Consultant ........................................................................................ 57 RISK FACTORS ......................................................................................................................................................... 58 INVESTMENT POLICY ........................................................................................................................................... 61 LEGAL MATTERS .................................................................................................................................................... 64 LITIGATION ............................................................................................................................................................. 64 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ........................................................... 64 TAX MATTERS ......................................................................................................................................................... 65 General ................................................................................................................................................................... 65 Information Reporting and Backup Withholding ............................................................................................ 66 Other Tax Matters ................................................................................................................................................. 66 Tax Treatment of Original Issue Discount ......................................................................................................... 67 Tax Treatment of Bond Premium ....................................................................................................................... 67 RATINGS ................................................................................................................................................................... 68 FINANCIAL ADVISOR ........................................................................................................................................... 68 AUDITED FINANCIAL STATEMENTS ............................................................................................................... 68 UNDERWRITING .................................................................................................................................................... 69 CONTINGENT FEES ............................................................................................................................................... 69 ENFORCEABILITY OF REMEDIES ....................................................................................................................... 69 CONTINUING DISCLOSURE ................................................................................................................................ 69 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT ................................................................ 70 AUTHORIZATION OF OFFICIAL STATEMENT ............................................................................................... 71 25694/010/01768238.DOCXv3 iii APPENDIX A — General Information Regarding Collier County, Florida APPENDIX B — Composite Resolution APPENDIX C — Collier County Comprehensive Annual Financial Report For Fiscal Year Ended September 30, 2020 APPENDIX D — Consulting Engineers and Financial Feasibility Report APPENDIX E — Form of Bond Counsel Opinion APPENDIX F — Form of Continuing Disclosure Certificate 25694/010/01768238.DOCXv3 1 OFFICIAL STATEMENT Relating To $____________* COLLIER COUNTY WATER-SEWER DISTRICT WATER AND SEWER REVENUE BONDS, SERIES 2021 INTRODUCTION This introduction is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement and should not be considered to be a complete statement of the facts material to making an informed investment decision. The offering by the Collier County Water-Sewer District, a body corporate and politic in the State of Florida (the "District"), of its $__________* Water and Sewer Revenue Bonds, Series 2021 (the "Series 2021 Bonds") to potential investors is made only by means of the entire Official Statement, including all appendices attached hereto. All capitalized undefined terms used in this introduction shall have the meanings ascribed to them in "APPENDIX B — Composite Resolution" attached hereto. The County and the District Collier County, Florida (the "County") was established in 1923 by the Legislature of the State of Florida (the "State") from portions of Lee and Monroe Counties. Its territorial limits, as they presently exist, contain approximately 2,026 square miles. In terms of land area, it is the largest county in the State. The County is located on the southwest coast of the Florida peninsula directly west of the Miami -Fort Lauderdale area. In 2018, the County had an estimated population of 383,166. Part of the Everglades National Park, the United States' only subtropical national park, comprises a portion of the County. Principal industries within the County include wholesale and retail trade, tourism, medical s ervices, agriculture, forestry, fishing, cattle ranching and construction. Additional general information with respect to the County is set forth in "APPENDIX A – General Information Regarding Collier County, Florida" attached hereto. The District is created pursuant to Chapter 2003-353, Laws of Florida (the "District Charter") which amended, re-enacted and codified all prior acts pertaining to the District, for the purpose of providing water and sewer services and facilities to certain unincorporated areas of the County. The service area of the District's water and sewer system (as further defined in the Resolution, the "System") encompasses approximately 558 square miles of unincorporated Collier County. The Board of County Commissio ners of the County (the "Board") is the ex-officio governing board of the District. The District previously issued its Water and Sewer Refunding Revenue Bond, Series 2013, Water and Sewer Refunding Revenue Bond, Series 2015, Water and Sewer Refunding Revenue Bonds, Series 2016, Water and Sewer Revenue Bond, Series 2018 and Water and Sewer Revenue Bonds, Series 2019 (collectively, the "Outstanding Parity Bonds"). The Outstanding Parity Bonds were, and the Series 2021 Bonds and any Additional Bonds of the District will be, issued pursuant to and under the authority of Resolution No. CWS-85-5 adopted on July 30, 1985, as amended and restated by Resolution No. CWS-85- 13 adopted on December 26, 1985, as amended and supplemented, and particularly as amended by *Preliminary, subject to change. 25694/010/01768238.DOCXv3 2 Resolution No. CWS-87-5 adopted on March 3, 1987, Resolution No. CWS-91-6 adopted on October 22, 1991 and Resolution No. CWS-2006-298 adopted on November 14, 2006, particularly as supplemented by Resolution No. 2021-__/CWS Resolution No. 2021-__ adopted on June 22, 2021 (collectively, the "Resolution"), the Constitution of the State of Florida, the District Charter, Chapter 153, Part II, Florida Statutes, and other applicable provisions of law. The Series 2021 Bonds The Series 2021 Bonds, when issued, will be dated the date of their delivery, with interest payable on each January 1 and July 1, commencing on January 1, 2022, and will mature on July 1 in the years and in the amounts and bear interest at the rates shown on the inside cover page of this Official Statement. The Series 2021 Bonds are being issued in fully registered form in principal denominations of $5,000 or integral multiples thereof, and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). See "DESCRIPTION OF THE Series 2021 BONDS" herein. Purpose of the Series 2021 Bonds The Series 2021 Bonds are being issued to (i) finance the acquisition, construction and equipping of various utility capital improvements within the County (as more particularly described in "THE 2021 PROJECT" below), (ii) funding a portion of the Reserve Account, and (iii) pay certain costs of issuance of the Series 2021 Bonds. See "PLAN OF FINANCING" herein. Security for the Bonds The Series 2021 Bonds will be issued as Additional Bonds on a parity with the Outstanding Parity Bonds in the manner and to the extent provided in the Resolution. The Series 2021 Bonds, the Outstanding Parity Bonds, and any Additional Bonds hereafter issued pursuant to the Resolution are referred to herein as the "Bonds." The principal of, premium, if any, and interest on the Bonds shall be secured by a pledge of and lien upon (i) the Net Revenues to be derived from the oper ation of the System, (ii) System Development Fees, (iii) the proceeds from any and all assessments against property benefited by the System or any part thereof ("Special Assessments"), provided that Special Assessments shall be subject to the provisions and lien and pledge of the Resolution only if and to the extent provision for inclusion as a part of the Pledged Funds has been made by a supplemental resolution to be adopted by the District ("Special Assessment Proceeds"), and (iv) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in the funds and accounts established under the Resolution, except for the Revenue Fund and the Operation and Maintenance Fund (collectively, "Pledged Funds"). At the present time, the District has not designated any Special Assessments to be a part of Pledged Funds relating to the Bonds. See "SECURITY FOR THE BONDS" herein. Reserve Account A sufficient amount of the proceeds of the Series 2021 Bonds will be deposited to the Reserve Account so that following the issuance of the Series 2021 Bonds the Reserve Account will be fully funded in an amount equal to the Reserve Account Requirement for the Series 2021 Bonds and the Outstanding Parity Bonds. See "SECURITY FOR THE BONDS – Reserve Account" herein. 25694/010/01768238.DOCXv3 3 Redemption Provisions The Series 2021 Bonds are subject to redemption prior to their stated maturities as described herein. See "DESCRIPTION OF THE Series 2021 BONDS – Redemption Provisions" herein. Additional Bonds In the future, the District may issue Additional Bonds on a parity with the Series 2021 Bonds and the Outstanding Parity Bonds. Such Additional Bonds may be issued only if the District first complies with certain conditions set forth in the Resolution. See "SECURITY FOR THE BONDS – Additional Bonds" herein. Tax Exemption In the opinion of Bond Counsel, under existing statutes, regulations, rulings and court decisions, and assuming compliance with certain tax covenants described herein, interest on the Series 2021 Bonds is excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax. Such interest, however, may be subject to other federal income tax consequences. See "TAX EXEMPTION" herein for a general discussion of Bond Counsel’s opinion and other tax considerations. Continuing Disclosure The District has covenanted for the benefit of Series 2021 Bondholders to provide certain financial information and operating data relating to the District and the Series 2021 Bonds in each year, and to provide notices of the occurrence of certain enumerated material events, in accordance with Rule 15c2 -12 of the Securities and Exchange Commission (the "SEC"). See "CONTINUING DISCLOSURE" herein. Additional Information This Official Statement speaks only as of its date and the information contained herein is subject to change. This Official Statement contains certain information concerning DTC and its book -entry system. Such information has not been provided by the District and the District does not certify as to the accuracy or sufficiency of the disclosure practices or content of information provided by such party and is not responsible for the information provided by such party. A copy of the Resolution and all documents of the District referred to herein may be obtained from Crystal K. Kinzel, Clerk of the Circuit Court and Comptroller of Collier County and Clerk to the District, 3299 Tamiami Trail East, Suite 401, Board Minutes and Records Department, Naples, Florida 34112, phone (239) 252-7240. THE 2021 PROJECT The "2021 Project" consists of the acquisition, construction and equipping of various capital improvements within the County, including but not limited to, the following: 25694/010/01768238.DOCXv3 4 Golden Gate City: Potable Water -- Construction of new water transmission mains including hydrants and other appurtenances necessary to expand potable water service to currently unserved areas. Wastewater -- Construction of 4 MGD of wastewater treatment capacity including associated pipelines and other utility facilities as necessary to expand to currently unserved areas. Northeast Service Area: Construction of deep injection wells, monitoring wells, raw water wells, raw water, potable water, IQ water, power, SCADA and wastewater transmission mains and pipelines, storage tanks, pump stations, appurtenances, sitework and landscaping necessary to enable future production, treatment, distribution and collection in the northeast service area. Design updates of future northeast regional treatment facilities. Government Operation Business Park: Design, permitting and construction of a facility for the Collier County Water -Sewer District's business operations and the water and wastewater field operations. DESCRIPTION OF THE SERIES 2021 BONDS General The Series 2021 Bonds are being issued in fully registered form and will be registered initially in the name of Cede & Co., as the nominee of DTC. Individual purchases of interests in the Series 2021 Bonds will be made in book-entry form only. Purchasers of the Series 2021 Bonds offered hereby ("Beneficial Owners") will not receive physical delivery of certificates. Transfers of ownership interests in the Series 2021 Bonds will be effected through a book-entry system as described below. See "DESCRIPTION OF THE SERIES 2021 BONDS – Book-Entry Only System" herein. The Series 2021 Bonds will be dated the date of their delivery, and will mature on July 1 in the years and in the amounts and bear interest at the rates shown on the inside cover page of this Official Statement. The Series 2021 Bonds are issuable in principal denominations of $5,000 or integral multiples thereof. Interest on the Series 2021 Bonds is payable on each January 1 and July 1, commencing on January 1, 2022. Payment of the Series 2021 Bonds The principal of the Series 2021 Bonds is payable when due by check, draft or bank wire transfer of U.S. Bank National Association, Orlando, Florida , as paying agent (the "Paying Agent") for the Series 2021 Bonds. Interest on the Series 2021 Bonds will be paid by the Paying Agent on each interest payment date to the registered owner thereof shown on the registration books of the District maintained by U.S. Bank National Association, Orlando, Florida, as bond registrar (the "Bond Registrar") on the 15th day (whether or not a business day) of the calendar month next preceding the interest payment date, by check or draft mailed to such registered owner at his address as it appears on such registration books; provided, however, that at the request of a Series 2021 Bondholder, interest shall be paid by bank wire transfer for the account of such Series 2021 Bondholder. 25694/010/01768238.DOCXv3 5 For so long as the Series 2021 Bonds shall be held in the DTC book-entry system (without certificates), all such payments of principal, premium, if any, and interest on the Series 2021 Bonds will be made to Cede & Co., as registered owner thereof, by the Paying Agent and payments to Beneficial Owners will be the responsibility of DTC and the DTC Participants. Exchange, Registration and Transfer See "DESCRIPTION OF THE SERIES 2021 BONDS – Book-Entry Only System" herein. In the event that the book-entry only system is discontinued, the following provisions would thereafter apply. The Series 2021 Bonds may be exchanged for a like aggregate principal amount of the Series 2021 Bonds or other authorized denominations of the same series, interest rate, and maturity. The Series 2021 Bonds may be transferred only upon an assignment duly executed by the registered owner or the owner's attorney or legal representative in such form as may be satisfactory to the Bond Registrar, such transfer to be made on the registration books of the District kept by the Bond Registrar. Any registered owner requesting such registration, transfer, or exchange of a Series 2021 Bond may be required to pay for any taxes, fees, expenses, or other governmental charges required to be paid with respect thereto. The District and the Bond Registrar are not required to issue and transfer any Series 2021 Bond during the period beginning on the 15th day of the month next preceding any interest payment date or, in the case of a proposed redemption of any Series 2021 Bond, during the 15 days next preceding the mailing of notice of such redemption and continuing until such redemption date. Ownership of Series 2021 Bonds The District, the Paying Agent, and the Bond Registrar shall deem and treat the person in whose name any Series 2021 Bond is registered on the books maintained by the Bond Registrar as the absolute owner of such Series 2021 Bond, whether or not such Series 2021 Bond is overdue, for the purpose of receiving payment thereof and for all other purposes whatsoever, and neither the District, the Paying Agent, nor the Bond Registrar will be affected by any notice to the contrary. All such payments will be valid and effectual to satisfy and discharge the liability upon such Series 2021 Bond to the extent of the sum or sums so paid. Redemption Provisions Optional Redemption The Series 2021 Bonds maturing on or after July 1, _____ are subject to redemption in whole or in part, at any time, on or after July 1, _____, in such order of maturities as may be determined by the District (less than all of a single maturity to be selected by lot), at a redemption price equal to 100% of the principal amount of the Series 2021 Bonds to be redeemed plus accrued interest to the date fixed for redemption, without premium. Notice of Redemption Notice of redemption of the Series 2021 Bonds shall be mailed first class, postage prepaid, by the Bond Registrar not less than thirty (30) days before the date fixed for redemption to the registered owners of any Series 2021 Bonds or portions of Series 2021 Bonds that are to be redeemed, at their addresses as they appear on the registration books kept by the Bond Registrar. Failure to mail notice, or any defect therein, to the registered owner of any Series 2021 Bonds which are to be redeemed shall not affect the validity of the proceedings for the redemption of Series 2021 Bonds. At the redemption date, interest shall 25694/010/01768238.DOCXv3 6 cease to accrue on any of the Series 2021 Bonds duly called for redemption if payment of the redemption price has been duly made or provided for with legally available funds. Owners of such Series 2021 Bonds shall thereafter look solely to such funds for payment. As described under "DESCRIPTION OF THE SERIES 2021 BONDS – Book-Entry Only System" herein, for so long as the Series 2021 Bonds are registered in the name of DTC, Cede & Co., or any other nominee of DTC, notice of redemption of any Series 2021 Bond will be given by the Bond Registrar only to Cede & Co. or such other nominee as registered owner thereof, who will then be solely responsible for selecting and notifying those DTC Participants who will in turn notify Beneficial Owners to be affected by such redemption. Book-Entry Only System THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE COUNTY BELIEVES TO BE RELIABLE. NEITHER THE COUNTY NOR THE UNDERWRITERS TAKE ANY RESPONSIBILITY FOR THE ACCURACY THEREOF. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2021 BONDS, AS NOMINEE OF DTC, CERTAIN REFERENCES IN THIS OFFICIAL STATEMENT TO THE SERIES 2021 BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 2021 BONDS SHALL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2021 BONDS. THE DESCRIPTION WHICH FOLLOWS OF THE PROCEDURES AND RECORD KEEPING WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2021 BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 2021 BONDS TO DIRECT PARTICIPANTS (AS HEREINAFTER DEFINED) OR BENEFICIAL OWNERS OF THE SERIES 2021 BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2021 BONDS, AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC, THE DIRECT PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 2021 BONDS IS BASED SOLELY ON INF ORMATION FURNISHED BY DTC. ACCORDINGLY, THE COUNTY AND UNDERWRITERS NEITHER MAKE NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS. DTC will act as securities depository for the Series 2021 Bonds. The Series 2021 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 Series 2021 Bond certificate will be issued for each maturity of each series of the Series 2021 Bonds as set forth on the inside cover page of this Official Statement in the aggregate principal amount thereof, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct 25694/010/01768238.DOCXv3 7 Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Direct Participants and the Indirect Participants are collectively referred to herein as the "DTC Participants." DTC has an S&P Global Ratings ("S&P") rating of AA+. The DTC Rules applicable to its DTC Participants are on file with the Securities and Exchange Commission (the "SEC"). More information about DTC can be found at www.dtcc.com. Purchases of Series 2021 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2021 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2021 Bondholder ("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 w ritten confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2021 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2021 Bonds , except in the event that use of the book-entry system for the Series 2021 Bonds is discontinued. To facilitate subsequent transfers, all Series 2021 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 Series 2021 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2021 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2021 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2021 Bonds may w ish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2021 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2021 Bonds may wish to ascertain that the nominee holding the Series 2021 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresse s to the Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2021 Bonds within a maturity of a series are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. 25694/010/01768238.DOCXv3 8 Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2021 Bonds unless authorized by a Direct Participant in accorda nce with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County 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 Series 2021 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds and distributions on the Series 2021 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the County or the Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by DTC 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 DTC Participant and not of DTC, the Paying Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and distributions to Cede & C o. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County and/or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2021 Bonds at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, the Series 2021 Bond certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Series 2021 Bond certificates will be printed and delivered to DTC. SECURITY FOR THE BONDS General The principal of, premium, if any, and interest on the Bonds shall be secured equally and ratably by a pledge of the lien upon (i) the Net Revenues (Gross Revenues less Operating Expenses) to be derived from the operation of the System ("Net Revenues"), (ii) the System Development Fees, (iii) the proceeds from any and all assessments against property benefited by the System or any part thereof ("Special Assessments"), provided that Special Assessments shall be subject to the provisions and lien and pledge of the Resolution only if and to the extent provision for inclusion as part of the Pledged Funds has been made by a supplemental resolution to be adopted by the District ("Special Assessment Proceeds"), and (iv) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in the funds and accounts established under the Resolution, except for the Revenue Fund and the Operation and Maintenance Fund (collectively, "Pledged Funds"). At the present time, the District has not designated any Special Assessments to be a part of the Pledged Funds relating to the Bonds. The "Gross Revenues" of the System means all income and moneys received by the District from the rates, fees, rentals, charges and other income to be made and collected by the District for the use of the products, services and facilities to be provided by the System, or otherwise received by the District or 25694/010/01768238.DOCXv3 9 accruing to the District in the management and operation of the System, calculated in accordan ce with generally accepted accounting methods employed in the operation of public utility systems similar to the System, including, without limiting the generality of the foregoing, Connection Fees, AFPI and all earnings and income derived from the investment of moneys under the provisions of the Resolution which are transferred to the Revenue Fund or Interest Account. Gross Revenues shall not include (1) any Government Grants, (2) System Development Fees, and (3) Special Assessments. "AFPI" means Allowance for Funds Prudently Invested fees, to the extent lawfully levied by the District. AFPI fees are designed to recover the costs associated with financing the capital expenditures associated with providing capacity to new growth. AFPI are not System Development Fees and are intended to reimburse the System for the costs that are incurred for the financing of unused System capacity prior to new growth connecting to the System. As such, they are considered a component of Gross Revenues of the System since t he fees are a reimbursement of previously incurred expenses (not capitalized). All AFPI fees collected will be treated as other Gross Revenues of the System and can be used to fund any System expenditure. AFPI were derived from respective rate resolutions which expired on December 31, 2012 and, therefore, AFPI are no longer collected. However, the District reserves the right to collect AFPI in the future. "Operating Expenses" means the District's expenses for operation, maintenance, repairs and replacements with respect to the System and shall include, without limiting the generality of the foregoing, administration expenses, insurance and surety bond premiums, legal and engineering expenses, ordinary and current rentals of equipment or other property, refunds of moneys lawfully due to others, payments to others for disposal of sewage or other wastes, payments to pension, retirement, health and hospitalization funds, and any other expenses required to be paid for or with respect to proper operation or maintenance of the System, all to the extent properly attributable to the System in accordance with generally accepted accounting principles employed in the operation of public utility systems similar to the System, and disbursements for the expenses, liabilities and compensation of any Paying Agent or Registrar under the Resolution, but does not include any costs or expenses in respect of original construction or improvement other than expenditures necessary to prevent an interruption or continuance of an interruption of Gross Revenues or minor capital expenditures necessary for the proper and economical operation or maintenance of the System, or any provision for interest, depreciation, amortization or similar charges. "System Development Fees" shall mean certain charges imposed by the District on Persons (as defined in the Resolution), including developers and large users, connecting to the System or reserving capacity in the System, which represent a pro rata share of the costs of the System which are attributable to the increased demand such additional connections create upon the System; provided, however, that (A) such charges shall be net of any refunds to said Persons in accordance with applicable developer or use agreements, and (B) shall not include Connection Fees. Generally, under Florida law, impact fees such as the System Development Fees may be validly imposed against new construction or development in order to fund capital improvements or capacity which are necessitated by such new construction or development or to satisfy debt service for the bonds or other obligations issued for such purposes. Proceeds of such System Development Fees may generally be used only for the capital improvements or capacity attributable to the new construction or development or to pay debt service on indebtedness incurred to finance or refinance such capital improvements or capacity. IMPACT FEE REVENUES SUCH AS THE SYSTEM DEVELOPMENT FEES FLUCTUATE WITH THE AMOUNT OF NEW CONSTRUCTION OR DEVELOPMENT WHICH OCCURS WITHIN THE DISTRICT. THEREFORE, THERE CAN BE NO ASSURANCES THAT SUCH REVENUE WILL 25694/010/01768238.DOCXv3 10 NOT DECREASE OR BE ELIMINATED ALTOGETHER IN THE EVENT THAT NEW CONSTRUCTION, FOR WHATEVER REASON, MIGHT DECREASE OR CEASE ALTOGETHER WITHIN THE DISTRICT. THE BONDS SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL OBLIGATION OR PLEDGE OF THE FAITH AND CREDIT OF THE DISTRICT, COLLIER COUNTY, THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION OF THE STATE OF FLORIDA FOR T HE PAYMENT OF THE BONDS. THE BONDS AND THE OBLIGATIONS EVIDENCED THEREBY DO NOT CONSTITUTE A LIEN UPON ANY PROPERTY OF THE DISTRICT, COLLIER COUNTY OR THE STATE OF FLORIDA, BUT SHALL CONSTITUTE A LIEN ONLY ON, AND PAYABLE SOLELY FROM, THE PLEDGED FUNDS. Rate Covenant The District covenants that in each Fiscal Year, it will fix, establish, and maintain such rates and collect such fees, rates, or other charges for the products, services and facilities of the System, and revise the same from time to time, whenever necessary, as will always provide in each Fiscal Year, (A) Net Revenues, System Development Fees and Special Assessment Proceeds adequate at all times to pay in each Fiscal Year at least one hundred twenty five percent (125%) of the Annual Debt Service on all Outstanding Bonds becoming due in such Fiscal Year, and (B) Net Revenues in each Fiscal Year adequate to pay at least one hundred percent (100%) of the Annual Debt Service on all Outstanding Bonds and any required deposits to the Reserve Account becoming due in such Fiscal Year. Such rates, fees, or other charges shall not be so reduced so as to be insufficient to provide adequate Net Revenues, System Development Fees and Special Assessment Proceeds for the purposes provided therefor by the Resolution. Funds and Accounts The District covenanted and agreed in the Resolution to establish with a bank, trust company or such other entity in the State, which is eligible under the laws of the State to be a depository for county funds the following funds and accounts: the "Revenue Fund," the "Operation and Maintenance Fund," the "Sinking Fund" (in which the District shall maintain four separate accounts being the "Interest Account," the "Principal Account," the "Term Bonds Redemption Account" and the "Reserve Account"), the "System Development Fees Funds," the "Special Assessments Fund," the "Renewal and Replacement Fund," and the "System Surplus Fund". Moneys in the aforementioned funds and accounts, until applied in accordance with the provisions of the Resolution, shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders. Construction Fund The County has covenanted and agreed in the Resolution to establish the "2021 Project Account" in the Construction Fund which shall be used only for payment of the Cost of the 2021 Project. Moneys in the 2021 Project Account, until applied in payment of any item of the Cost of the 2021 Project in the manner provided in the Resolution, shall be held in trust by the County and shall be subject to a lien and charge in favor of the Holders of the Series 2021 Bonds and for the further security of such Holders. 25694/010/01768238.DOCXv3 11 Separate Accounts The moneys required to be accounted for in each of the funds, accounts and s ubaccounts established in the Resolution may be deposited in a single, non-exclusive bank account, and funds allocated to the various funds, accounts and subaccounts established in the Resolution may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds, accounts and subaccounts as provided in the Resolution. The designation and establishment of the various funds, accounts and subaccounts in and by the Resolution shall not be construed to require the establishment of any completely independent, self - balancing funds as such term is commonly defined and used in governmental ac counting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of such revenues as provided in the Resolution. Disposition of Revenues A. The District has covenanted to deposit all Gross Revenues into the Revenue Fund and all Special Assessment Proceeds into the Special Assessments Fund. Moneys in the Revenue Fund shall first be used each month to deposit in the Operation and Maintenance Fund such sums as are nece ssary to pay Operating Expenses for the ensuing month. B. AFPI, if any, shall be deposited, as received, in a separate account of the Revenue Fund maintained by the District. Any AFPI shall be utilized by the District for lawful purposes related to the System including, but not limited to, acquisition and construction of improvements and additions to the System which provide capacity to new users and payment of debt service on obligations related thereto. C. All moneys at any time on deposit in the Special Assessments Fund and any deposits remaining in the Revenue Fund after the aforementioned transferals to the Operation and Maintenance Fund shall be disposed of by the District, on or before the 25th day of each month, first from the Special Assessments Fund and then from the Revenue Fund as follows: first to the Interest Account, a sum which, together with the balance therein, shall be equal to the interest accruing on all Bonds for said month; second, to the Principal Account, a sum which, together with the balance therein, shall be sum equal to the principal accruing on all Bonds in said month; third, commencing in the month which is one year prior to the first Sinking Fund Installment, to the Term Bonds Redemption Account a sum which, together with the balance therein, shall be equal to the Sinking Fund Installment accruing on all Bonds in said month; fourth, to the Reserve Account such sum, if any, as will be necessary to, within 24 months, restore the funds on deposit therein to an amount equal to the Reserve Account Requirement; fifth, to the Renewal and Replacement Fund such sums as shall be sufficient to pay one-twelfth (1/12) of five percent (5%) of the Gross Revenues derived from the System during the preceding Fiscal Year (or such other required amount a s certified to by the Consulting Engineers) until the amount accumulated in such Fund is equal to the Renewal and Replacement Fund Requirement; sixth, such sums as may be necessary for the payment of any accrued debt service on Subordinated Indebtedness in accordance with the proceedings authorizing such Subordinated Indebtedness; seventh, to the Interest Account, the Principal Account and the Term Bonds Redemption Account, in that order, sufficient moneys such that the amounts on deposit therein shall equa l, respectively, the interest, principal and Sinking Fund Installment next coming due on the Bonds Outstanding, except that no deposit need be made to the Principal Account or Term Bonds Redemption Account until a date one year preceding the due date of such principal amount or Sinking Fund Installment; 25694/010/01768238.DOCXv3 12 and eighth, the balance of any Gross Revenues remaining in said Revenue Fund shall be deposited in the Surplus Fund and applied to the payment, on or prior to each principal and interest payment date for the Bonds, into the Interest Account, the Principal Account and the Term Bonds Redemption Account when the moneys therein shall be insufficient to pay the principal of and interest on the Bonds coming due. Moneys not required to meet such a deficiency may be applied for any lawful purpose in connection with the System. D. Income received from the investment and reinvestment of moneys on deposit in the Surplus Fund, the Renewal and Replacement Fund (to the extent such income and other amounts on deposit therein exceed the Renewal and Replacement Fund Requirement), and the Reserve Account (to the extent such income and other amounts on deposit therein exceed the Reserve Account R equirement) shall be transferred to the Revenue Fund. Any and all income received from the investment of moneys in the Special Assessments Fund shall be deposited upon receipt thereof into the Interest Account; provided, however, the District may accumulate investment earnings in the special account established pursuant to the Resolution. Any and all income received from the investment of moneys in the Revenue Fund, the Principal Account, the Interest Account, the Term Bonds Redemption Account, the Reserve Account (to the extent such income and the other amounts in such Account do not exceed the Reserve Account Requirement), the Renewal and Replacement Fund (to the extent such income and the other amounts in such Fund do not exceed the Renewal and Replacement Fund Requirement), the System Development Fees Fund and in such separate account of the Construction Fund shall be retained in such respective Fund or Account. See "APPENDIX B — Composite Resolution" attached hereto for a more complete description of the provisions of the Resolution providing for the disposition of Gross Revenues. System Development Fees Fund The District shall deposit into the System Development Fees Fund all System Development Fees as received and such System Development Fees shall be accumulated in the System Development Fees Fund and applied by the District in the following manner and order of priority: A. For the payment on or prior to each principal and interest payment date (in no event earlier than the twenty-fifth (25th) day of the month next preceding such payment date) into the Interest Account, the Principal Account and the Term Bonds Redemption Account, when the moneys therein are insufficient to pay the principal of and interest on the Bonds coming due, as further provided in t he Resolution. B. To pay the cost of acquiring and/or constructing extensions, improvements or additions to the System in accordance with the plans and specifications provided by the Consulting Engineers and the requisitions for disbursement of moneys provided by the District. C. To be used for any other lawful purpose relating to the System. Reserve Account The Resolution provides for the establishment and maintenance of a Reserve Account in the Sinking Fund to secure all Outstanding Bonds. There shall be on deposit in the Reserve Account, an amount sufficient to cause the amount on deposit in the Reserve Account to equal a sum equal to the lesser of (1) the Maximum Annual Debt Service on all Outstanding Bonds, or (2) 125% of the average annual debt service for all Outstanding Bonds (the "Reserve Account Requirement"). Upon the issuance of the Series 25694/010/01768238.DOCXv3 13 2021 Bonds, an amount of the proceeds thereof shall be deposited therein to cause the amount on deposit in the Reserve Account to equal the Reserve Account Requirement for all Outstanding Bonds, including the Series 2021 Bonds ($_____________). In the event of a deficiency in the Reserve Account, such deficiency shall be made up from the first available Pledged Revenues after the payments required to be made to the Interest, Principal and Term Bonds Redemption Accounts; provided such deficiency must be made up within twenty four (24) months. Notwithstanding the foregoing, in lieu of the required deposits into the Reserve Account, the District may cause to be deposited into the Reserve Account a surety bond or an insurance policy meeting the requirements of the Resolution in an amount equal to the difference between the Reserve Account Requirement and the sums then on deposit in the Reserve Account, if any. See "APPENDIX B – Composite Resolution" attached hereto. Additional Bonds The District may, from time to time, issue Additional Bonds under the Resolution on a parity with the Series 2021 Bonds and the Outstanding Parity Bonds, subject to certain conditions set forth in the Resolution. Additional Bonds shall only be issued by the District for financing the Cost of completion of a Project, financing the cost of an Additional Project, or the completion the reof, or refunding any and all Outstanding Bonds or any Subordinated Indebtedness of the District. No Additional Bonds shall be issued unless: (1) Except in the case of Additional Bonds issued for the purpose of refunding Outstanding Bonds, the District shall certify that it is current in all deposits into the various funds and accounts established by the Resolution and all payments theretofore required to have been deposited or made by it under the provisions of the Resolution and that the District has complied with the covenant s and agreements of the Resolution. (2) An independent certified public accountant shall certify to the District that the amount of the Net Revenues received during the immediate preceding Fiscal Year or any twelve (12) consecutive months selected by the District of the twenty-four (24) months immediately preceding the issuance of said Additional Bonds, adjusted as provided in the Resolution, will (a) be equal to at least one hundred percent (100%) of the Maximum Annual Debt Service of the Outstanding Bonds and the Additional Bonds then proposed to be issued, and (b) when added to the Special Assessment Proceeds and the System Development Fees, adjusted as hereinafter provided, received by the District during such 12-month period, be equal to at least one hundred twenty-five percent (125%) of the Maximum Annual Debt Service of the Outstanding Bonds and the Additional Bonds then proposed to be issued. The Net Revenues, the System Development Fees and the Special Assessment Proceeds calculated pursuant to the foregoing paragraphs may be adjusted by the independent certified public accountants upon the written advice of the Consulting Engineers, at the option of the District, as more fully set forth in the Resolution. See "APPENDIX B – Composite Resolution" attached hereto. In the event any Additional Bonds are issued for the purpose of refunding any Bonds then Outstanding, the conditions of paragraph (2) above shall not apply, provided that the issuance of such Additional Bonds shall not result in an increase in the aggregate amount of principal of and interest on the Outstanding Bonds becoming due in the then current Bond Year and all subsequent Bond Years. The 25694/010/01768238.DOCXv3 14 conditions of said paragraph (2) shall apply to Additional Bonds issued to refund Subordinated Indebtedness. Subordinated Indebtedness The District may, at any time or from time to time, issue evidences of indebtedness payable in whole or in part out of Pledged Funds and which may be secured by a pledge of Pledged Funds subordinated in all respects to the pledge of the Pledged Funds created by the Resolution. The District has also pledged and created a lien upon certain revenues of the System for the benefit of Synovus Bank (d.b.a. Florida Community Bank) in connection with the Collier County, Florida Water and Sewer District Water and Sewer Refunding Revenue Note, Series 2016 (the "Loan). Such pledge and lien are junior and subordinate in all respects to the pledge and lien on Pledged Funds in favor of the holders of the Bonds. The Loan has a fixed rate of interest of 1.80%. As of October 1, 2020, $59,549,000 was the outstanding principal on the Loan. The projected amount for annual debt service payments on the Loan in the fiscal year ending September 30, 2022 is $_________. In the event of a default under the Loan, Synovus Bank has the ability to enforce certain remedies under the Loan, including increasing the interest rate on the Loan to the lesser of five percentage points in excess of the Bank’s prime rate of interest charge at the time of the payment default or the maximum legal interest rate. The default rate of interest shall only apply for interest during the period of time between when the payment default occurs and when it is cured by the District. The supplemental resolution of the District authorizing the Loan contains a separate rate covenant to help ensure the availability of revenues for the payment of such Loan. The Loan requires that the District shall impose rates for the services of the District which will produce revenues pledged to the Loan, after payment of annual debt service on the senior lien bonds, adequate at all times to pay in each fiscal year at least 115% of the annual debt service on the Series 2016 Loan and all other outstanding subordinated indebtedness becoming due in such fiscal year. No Mortgage or Sale of the System The District irrevocably covenanted, bound and obligated itself in the Resolution not to sell, lease, encumber or in any manner dispose of the System as a whole or any substantial part thereof (except as provided in the Resolution) until all of the Bonds and all interest thereon shall have been paid in full or provision for payment has been made in accordance with the Resolution. The foregoing provision notwithstanding, the District has reserved the right to sell, lease or otherwise dispose of any of the property comprising a part of the System in the manner provided in the Resolution, if any one of the following conditions exist: (A) such property is not necessary for the operat ion of the System, (B) such property is not useful in the operation of the System, (C) such property is not profitable in the operation of the System, or (D) in the case of a lease of such property, will be advantageous to the System and will not adversely affect the security for the Bondholders. No Free Service The District covenants that it will not render, or cause to be rendered, any free services of any nature by its System or any part thereof, nor will any preferential rates be established for users of the same class, and in the event the District or the County, or any department, agency, instrumentality, office or 25694/010/01768238.DOCXv3 15 employee thereof, shall avail itself of the System or services provided by said System or any part thereof, the same rates, fees or charges applicable to other customers receiving like services under similar circumstances shall be charged the District, the County and any such department, agency, instrumentality, officer or employee. The revenues so received shall be deemed to be Gross Revenu es derived from the operation of the System, and shall be deposited and accounted for in the same manner as other Gross Revenues. No Impairment of Rights The District covenants not to enter into any contract or contracts, nor take any action, the results of which might impair the rights of the Holders of the Bonds and that it will not permit the operation of any competing water or sewer service facilities in the District; provided, however, the District reserves the right to permit the ownership and operation of water or sewer service facilities or both by itself or by others in any territory which is not in any service area now or hereafter served by the System. Compulsory Water and Sewer Connections In order better to secure the prompt payment of principal and interest on the Bonds, as well as for the purpose of protecting the health and welfare of the inhabitants of the District, and acting under authority of the general laws of Florida, the District will require (A) every owner of each lot in the District which abuts upon any street or public way containing a sewer line forming a part of the sewer facilities of the System and upon which lot a building shall subsequently be constructed for residential, commercial or industrial use, to connect such building to such sewer facilities and to cease to use any other method for the disposal of sewage waste or other polluting matter, and (B) every owner of each lot in the District which abuts upon any street or public way containing a water line forming a part of th e water facilities of the System and upon which lot a building shall subsequently be constructed for residential, commercial or industrial use, to connect such building to such water facilities. Enforcement of Charges The District will compel the prompt payment of rates, fees and charges imposed for service rendered on every lot or parcel connected with the System, and to that end will vigorously enforce all of the provisions of any ordinance or resolution of the District having to do with sewer and water connections and charges, and all of the rights and remedies permitted the District under law, including the requirement for the making of a reasonable deposit by each user, the requirement for disconnection of all premises delinquent in the payment, and the securing of injunction against the disposition of sewage or industrial waste into the sewer facilities of the System by any premises delinquent in the payment of such charges. Unit Water and Sewer Bills In every instance in which a building or structure on a lot is connected to the sewer facilities of the System, which building or structure is also connected to the water facilities of the System and receives water therefrom, the District will submit to the owner or occupant of such lot a single bill for both water and sewer service and will refuse to accept payment for either the water charge along or sewer charge along without payment of the other. 25694/010/01768238.DOCXv3 16 Collection of System Development Fees The District will proceed diligently to perform legally and effectively all steps required in the imposition and collection of the System Development Fees. Upon the due date of any such System Development Fees, the District will diligently proceed to collect the same and will exercise all legally available remedies to enforce such collections now or hereafter available under State law. Remedies Any holder of Bonds issued under the provisions of the Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity, by suit, action, mandamus, or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the Laws of the State of Florida, or granted and contained in the Resolution, and may enforce and com pel the performance of all duties required by the Resolution or by any applicable statutes to be performed by the District or by any officer thereof. The Holder or Holders of Bonds in an aggregate principal amount of not less than twenty -five per centum of the Bonds then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to the Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders and such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk. Upon the occurrence of a ratings downgrade on any of the Outstanding Bonds below Baa3/BBB-/BBB- (or the equivalent), Bank of America, N.A. as the holder of the Series 2015 Bond, is entitled to enforce certain remedies, including but not limited to, increasing the interest rate on the Series 2015 Bond to the maximum allowed under applicable law until such ratings meet the thresholds required. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 17 ESTIMATED SOURCES AND USES OF FUNDS The proceeds to be received from the sale of the Series 2021 Bonds are expected to be applied as follows: SOURCES: Principal Amount of Series 2021 Bonds $ Plus/Less [Net] Original Issue Premium/Discount Total Sources $ USES: Deposit to 2021 Project Account Deposit to Reserve Account Costs of Issuance(1) Total Uses $ (1) Includes Underwriter's discount, legal, financial advisory and other fees and expenses associated with the issuance of the Series 2021 Bonds. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 18 DEBT SERVICE SCHEDULE The following table sets forth the debt service for the Series 2021 Bonds and the Outstanding Parity Bonds. Series 2021 Bonds Year Ended July 1 Principal Interest Debt Service Outstanding Parity Bonds Total Debt Service 2021 $9,774,226.06 2022 10,110,143.00 2023 6,516,485.50 2024 6,512,015.00 2025 6,510,616.50 2026 6,512,169.50 2027 6,516,553.50 2028 6,513,648.00 2029 10,343,573.50 2030 7,443,500.00 2031 7,449,000.00 2032 7,441,000.00 2033 7,439,500.00 2034 7,443,500.00 2035 7,442,000.00 2036 7,444,500.00 2037 2038 2039 _____________ TOTAL $121,412,430.56 25694/010/01768238.DOCXv3 19 THE COUNTY General The County was established in 1923 by the Legislature of the State from portions of Lee and Monroe Counties. Its territorial limits, as they presently exist, contain approximately 2,026 square miles. In terms of land area, it is the largest county in the State. The County is located on the southwest coast of the Florida peninsula directly west of the Miami-Fort Lauderdale area. In 2018 the County had an estimated population of 383,166. Part of the Everglades National Park, the United States' only subtropical national park, comprises a portion of the County. Principal industries within the County include wholesale and retail trade, tourism, medical services, agriculture, forestry, fishing, cattle ranching and construction. Additional general information with respect to the County is set forth in "APPENDIX A – General Information Regarding Collier County, Florida" attached hereto. Board of County Commissioners The Board is the principal legislative and governing body of the County. The Board consists of five County Commissioners; one from each of the five districts elected for terms of four years. All of the County Commissioners are residents of the County. The Board serves as the ex-officio governing board of the District. The current members of the Board and their expiration of terms of office are: Commissioner Office Term Expires Penny Taylor Chairman November, 2022 William L. McDaniel, Jr. Vice Chairman November, 2024 Rick LoCastro Commissioner November, 2024 Burt L. Saunders Commissioner November, 2024 Andy Solis Commissioner November, 2022 County Manager The chief administrative official of the County is the County Manager. This official is directly responsible to the Board for administration and operation of four administrative divisions under the Board and for execution of all Board policies. The County Manager directs the administrative divisions for Growth Management, Public Services, Public Utilities, and Administrative Services. The County Manager is also responsible to the Board for the preparation of budgets and for the control of expenditures of departments under his supervision throughout the budget year. Budget Process The County Manager's Director of Corporate, Financial and Management Services (the "Director") initiates the budget planning process in January with budget policy discussions among key members of the fiscal and administrative leadership team. These discussions culminate in the presentation and adoption of budget policy and guidance by the Board in February or March. County division heads and elected officers submit their proposed expenditures beginning in April for compilation by the Director no later than July 1 of each year and each submission is matched against available revenues. A balanced, proposed budget is presented to the Board for review within 15 days of receipt of an assessed value 25694/010/01768238.DOCXv3 20 certification from the County's Property Appraiser which is due by July 1. A tentative budget is thereupon adopted within 15 days. Subsequent to public hearings, a final budget is adopted. The final budget for the fiscal year ended September 30, 2021 was adopted by the Board on September 17, 2020. Final millage rates are adopted, by late September, and the County's Tax Collector prepares tax bills for mailing on or after November 1. Upon valid adoption, all expenditures in the budget constitute appropriations, and amendments to the budget can be made only in accordance with the provisions of Chapter 129, Florida Statutes, and such chapter provides that expenditures in excess of total fund budgets are unlawful. Annual Audit Florida law requires that an annual post audit be completed by independent certified public accountants retained by the County. The County retained the firm of Clifton Larson Allen LLP, Naples, Florida, to undertake the audit for the fiscal year ended September 30, 2020. The Comprehensive Annual Financial Report for the fiscal year ended September 30, 2020 appears in APPENDIX C attached to this Official Statement. THE DISTRICT Background In 1969, the citizens of the County adopted a referendum authorizing the Board to create the District under Chapter 153, Part II, Florida Statutes, as a body corporate and politic in the State of Florida, to plan, develop and operate public water and sewer facilities for existing and future development within the County. The District exists pursuant to the District Charter which amends, re-enacts and codifies previous special acts and amendments thereto pursuant to which the District was origina lly created. The District was created and exists under the authority of the District Charter for providing water and sewer services and facilities to certain unincorporated areas of the County. The jurisdictional boundaries of the water service area of the District presently covers approximately 578 square miles of unincorporated Collier County and the jurisdictional boundaries of the sewer service area of the District presently covers approximately 558 square miles of unincorporated Collier County. However, the District continues with its policy not to serve in the estates areas, leaving the current water served area at 157 square miles and the current sewer served area at 169 square miles (the difference in the two currently serviced areas is due to a portion of the County receiving water only service from the City of Naples). With planned developments in the northeast, the District plans to provide water service in an area covered by 211 square miles, and sewer service over 222 square miles. The System is owned and operated by the District, the ex-officio governing board of which is the Board. See "THE SYSTEM" herein. Powers The District has the power to construct, install, acquire and to operate, improve, extend, enlarge and reconstruct a water and sewer system within the District and to have the exclusive control and jurisdiction thereof; to issue its revenue bonds or assessment bonds to pay all or part of the cost of such improvements; to fix and collect rates, fees and other charges (including impac t fees which are referred to herein and in the Resolution as System Development Fees) to persons or property or both for the use of the facilities and services provided; and to acquire such lands and rights thereon as it may deem necessary, including by eminent domain. 25694/010/01768238.DOCXv3 21 Management The Collier County Public Utilities Department operates the public water and sewer facilities for the District. The Public Utilities Department Head reports to the Deputy County Manager. The District currently has 434 budgeted full time equivalent ("FTE") employees managing and operating the water and sewer utilities including administration, financial operations including meter services and centralized inventory management, engineering, technical/logistics support, water operations and sewer operations. The sewer operations section consists of 157 FTE employees. The water operations section consists of 118 FTE employees. The following individuals comprise the senior management of the Public Utilities Department: G. George Yilmaz, Ph.D., P.E., P.H., Public Utilities Department Head. Dr. Yilmaz assumed duties as the Collier County Public Utilities Department Head in 2012. Dr. Yilmaz holds Master of Science degrees in Civil Engineering and in Ocean Engineering as well as a Doctor of Philosophy in Engineering-Water Resource Management. He is a Licensed Professional Engineer (P.E .), Licensed Professional Hydrologist (P.H.), Registered Environmental Professional (R.E.P.), and a member of the National Council of Examiners for Engineering and Surveying (N.C.E.E.S.). He has both private and public -sector leadership experience including Transportation/Traffic Optimization, Combined Stormwater/Sewer Systems, and Water Resources and Utility Management. Joseph G. (Joe) Bellone, Director of Financial Operations Support for Public Utilities. Prior to joining the District in October 2003, Mr. Bellone was employed by Staples Inc. for 8 years in a succession of financial positions both domestically and in Europe. These positions included Manager Financial Planning and Analysis at the Staples headquarters in Massachusetts and Finance Manager for Staples International in Brussels. He started his career in finance with General Electric at GE's International Financial Operations offices in New York City, Brussels, and Research Triangle Park in North Carolina. Mr. Bellone then held increasingly responsible financial positions in the publishing industry in Massachusetts. Mr. Bellone is a graduate of New York University, New York, New York, with a Bachelor of Arts degree in Economics. He also graduated with a Master's Degree in Business Administration with a concentration in Finance from Suffolk University, Boston, Massachusetts. Billings and Collections Utility Billing and Customer Service is responsible for the District's customer service, which includes billing and collection of customer fees and charges levied for the services provided by the District. Bills for services are rendered monthly and are due and payable twenty days after the bills are mai led. Service is discontinued if bills are not paid within thirty-five days after bills are rendered. The District's Utility Billing and Customer Service section is part of the Financial Operations Support Division, managed by two senior level managers who oversee the day to day activities. Meters are read monthly at approximately thirty-day intervals. Billings are made based on forty- two staggered billing cycles per month. The read-to-bill time is approximately four days. Bills are printed by a third-party contractor and delivered to a U.S. postal facility on the same day they are printed. Use of a lockbox, bank drafts and credit cards increase the efficiency and level of service in the receipt and processing of payments. Customer accounts are updated daily, and over-the-counter payments are deposited on the day of receipt. Financial records of billings and receipts are accounted for on a monthly basis. 25694/010/01768238.DOCXv3 22 A state-of-the-art Customer Relationship Management ("CRM") and billing system was installed in February 2003. This CRM solution enhances both customer service and operational efficiency. As part of the implementation of an Enterprise Asset Management system in the fiscal year ending September 30, 2016, an updated CRM has been selected and contract neg otiations are currently underway. A telephone call center system was installed in 2004. Customers can access account information and pay their account (24 hours a day, seven days a week) over the Internet. An Interactive Voice Response ("IVR") system is used to provide courtesy calls to customers pending turn-off for non-payment. The IVR capabilities were expanded in 2014 to allow customers to query account information (24 hours a day, seven days a week) and to make payments on their accounts (credit card, debit card and e-checks) over the phone without talking to a service representative. Electronic Bill Presentation and Payment (e-bill) capabilities were implemented in the fiscal year ended September 30, 2011. The District has all its utility meters, except for certain compound meters, in a radio read environment. Radios read meters increase accuracy of meter reads and provide staff efficiencies. The radio read software generates trouble reports, which are addressed between the meter read process and the bill production stage. With the acquisition of the Golden Gate System effective March 1, 2018, Advanced Metering Infrastructure ("AMI") has been integrated into the District’s CRM system. THE SYSTEM General The System is comprised of both water production, transmission, treatment and distribution facilities, and sewage collection, transmission, treatment and disposal facilities which are owned and operated by the District. On September 11, 2018, the Board approved Resolution 2018-152 amending the service boundary area to include all unincorporated areas of the County not lying within service areas granted to third parties by the water and sewer regulatory authority or as otherwise excepted by the Special Act creating the District. Excepted areas include those served by the Immokalee Water -Sewer District, the City of Naples, the City of Marco Island, Everglades City and the service area of the Ave Maria Utility Company, LLLP. Recently, the District acquired the Orange Tree Utility System (at no cost) and the assets of the Golden Gate Utility System (from the Florida Governmental Utility Authority at a cost of $35,965,000). Resolution 2017-14 was approved in January 2017 transferring the assets to the District pursuant to an interlocal agreement. Resolution 2017-222 was approved in November 2017 authorizing the acquisition of the Golden Gate Utility System, and Resolution 2018 -28 approved the closing of the acquisition effective March 1, 2018. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 23 The following table illustrates the historical growth of the System based on Equivalent Residential Connections ("ERCs") and customer accounts as of each fiscal year end. Historical Sewer System and Water System Equivalent Residential Connections and Water and Sewer Accounts Fiscal Year Sewer System ERCs(1) Water System ERCs(1) Number of Water and Sewer Accounts(2) Account Growth 2016 88,744 87,079 67,907 3.7% 2017 93,364 90,845 72,150 6.2 2018 98,539 96,622 77,792 7.8 2019 101,582 100,827 80,044 2.9 2020 103,677 103,098 82,088 2.6 (1) An ERC is a standard level of service based on the typical demand requirements for an individually metered single-family home and is equal to 350 gpd for water service and 250 gpd for sewer service. Estimated ERC’s for all years were predicated on ERC meter equivalency factors (meter flow capabilities) based on instantaneous meter capacity (demand) factors applied to the various meters in service as published by the American Water Works Association which are now recognized in the development of the monthly rates for service by the District and which are also consistent with the flow capacities used in the application of the water and wastewater System Development Fees. This represented a change in the determination of the estimated ERCs served by the System when compared to prior presentations. Specifically, the meter equivalency factors applied to the smaller meters (customers served by a 2-inch or smaller meter which represents over 90% of the commercial and master-metered residential customers served) were reduced and the meter equivalency factors applied to the larger meters (customers served by a 3 -inch or greater meter which represents under 10% of the commercial and master-metered residential customers served) were increased. Overall, this change in the meter equivalency factors resulted in a total reduction in the estimated ERCs served since the majority of the customers experienced a reduction in the meter equivalency factor. (2) Reflects actual metered accounts. Acquisition of Orange Tree and Golden Gate in the fiscal year ended September 30, 2017 and 2018, respectively, contributed to account growth in the respective years. Fiscal year ended September 30, 2018 does not fully recognize all customers of Golden Gate Utility since the acquisition was in effect for only part of the year. Source: Source: Collier County Water-Sewer District Water System General The Water System includes three wellfields, two regional water treatment plants, six operating distribution system pumping stations, 39 million gallons of tank storage, and over 1,200 miles of combined potable water transmission mains. 25694/010/01768238.DOCXv3 24 Water Production and Demands When considering demand projections as they relate to planning for water facilities, the following demand conditions are typically analyzed: • Annual Average Daily Demand ("AADD"): Total water supplied in one year divided by the number of days in that year. • Maximum Month Daily Demand ("MMDD"): Maximum quantity of water supplied during a single month during a one-year period, divided by the number of days in the month. The District utilizes the MMDD for sizing water supply and treatment facilities. For estimating projected demands, the MMDD is 1.22 times the AADD. • Maximum Day Demand ("MDD"): Maximum quantity of water supplied in a single day during a one year period. For estimating projected demands, the MDD is 1.35 times the AADD. • Maximum 3 Day Demand ("M3DD"): Average of the maximum quantity of water supplied in three consecutive days. For estimating projected demands, the M3DD is 1.3 times the AADD. As can be seen below, it is estimated that the County will utilize approximately 78% of the t otal operational capacity (pursuant to the Revised 2019 Water, Wastewater, IQ Water, and Bulk Potable Water Master Plan/CIP Plan update for the Expanded CCWSD dated December 7, 2018 [the "2019 Master Plan Update"], represents the total permitted capacity less one of the largest [4.0 MGD] lime softening reactors out of service at the South County Regional Water Treatment Plant or a total of 48.75 MGD) of the Water System – based on flows at the plant, not including reserved capacity. This capacity utilization relationship was based on the forecast of retail and wholesale water sales, an analysis of non-revenue (unbilled) water, average day to maximum day water treatment relationships based on historical data and capacity planning information provided by the County as contained in the 2019 Master Plan Update, and the maintenance of the permitted capacity of the Water System during the period September 30, 2021 through and including 2026 (the "Forecast Period"), all as summarized below. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 25 Summary of Actual and Estimated Water Plant Capacity Utilization for the Forecast Period Water Production (Finished Water) Fiscal Year Ending September 30, Thousands of Gallons(1) Average Daily Flow (MGD) Maximum Consecutive Three- Day Daily Demand (MGD)(2) Operational Capacity (MGD)(3)(4) Percent Capacity Utilized Actual: 2017 8,892,418 24.36 31.11 48.75 63.8% 2018 9,268,799 25.39 32.23 48.75 66.1% 2019 9,754,931 26.73 34.07 48.75 71.3% 2020 10,130,455 27.68 33.39 48.75 73.8% Projected: 2021 10,123,203 27.74 36.06 48.75 74.0% 2022 10,257,726 28.10 36.53 48.75 74.9% 2023 10,394,382 28.48 36.02 48.75 75.9% 2024 10,523,668 28.83 37.48 48.75 76.9% 2025 10,648,400 29.17 37.93 48.75 77.8% 2026 10,764,618 29.49 38.34 48.75 78.6% MGD = Million Gallons Per Day (1) Amounts shown based on the forecast of total System retail and wholesale water sales assumed for the financial forecast as shown in the Consulting Engineers and Financial Feasibility Report attached hereto as APPENDIX D (the “Report”), adjusted for a non-revenue (unbilled) water factor of 13.6% based on recent historical trends. The forecast is based on estimated water sales used for the determination of rate revenues and such amounts could be different than projections used for capacity planning purposes. (2)] Amounts shown for the Forecast Period based on application of a maximum consecutive three-day flow daily demand ("M3DD") factor of 1.30 as recognized in the Revised 2019 Water, Wastewater, IQ Water and Bulk Potable Water Master Plan / CIP Plan update for the Expanded CCWSD dated December 7, 2018 (the "2019 Master Plan Update") applied to anticipated average daily flows. (3) Pursuant to the 2019 Master Plan Update, the Operational Capacity represents the total permitted capacity less one of the largest (4.0 MGD) lime softening reactors out of service at the South County Regional Water Treatment Plant (48.75 MGD); the total combined Operational Capacity must be able to meet the maximum consecutive three-day flow daily demand (M3DD). (4) Amounts shown do not include the addition of the Northeast Water Treatment Facility at 5.0. Source: Consulting Engineers and Financial Feasibility Report attached hereto as APPENDIX D. The County anticipates expanding the finished water treatment capacity with the initial construction of the Northeast Regional Water Treatment Plant of approximately 5.0 MGD, which should reduce the capacity utilization ratios shown above. For the historical period, the Water System has experienced a non-revenue (unbilled) water at levels averaging approximately 13.6% over the last two years (which is also representative of the results during the last five years) which the County considers as being favorable and representative of general industry standards. Non-revenue water is due to a variety of factors, including water used for line flushing, 25694/010/01768238.DOCXv3 26 hydrant testing, firefighting, internal utility use (e.g., wash down of lift stations for maintenance purposes), and water losses (system leakage, slow registering meters, etc.). For the Forecast Period, non-revenue or unbilled water was assumed to 13.6% (remain generally at levels recently experienced based on historical water production and sales requirements relatio nships) and is consistent with the percentage of water accountability experienced by other Florida utilities and well within the range considered as good performance by the American Water Works Association. As can be seen above, the use of the operational water capacity expressed on a combined plant basis for the Water System during the Forecast Period is expected to approximate 7 8%. Based on the available capacity in the Water System and recognizing that the use of operational capacity is less than the constructed permitted water plant capacity, the County should have sufficient water production and treatment capacity to serve the Water System growth recognized in the development of the financial forecast as identified in the Report. Water Supply Hydrogeology The hydrogeology of the District is characterized by three major aquifer systems: the Surficial Aquifer System ("SAS"), the Intermediate Aquifer System ("IAS"), and the Floridan Aquifer System ("FAS"). These three aquifer systems underlie the entire County and contain numerous individual aquifers that are separated by intervening low permeability confining units. Higher permeabilities indicate higher yield potential as a raw water source. The SAS is located within approximately 120 feet of t he land surface and includes the water table (the upper limit of the portion of the ground wholly saturated with water) and Lower Tamiami Aquifer. The water table and the Lower Tamiami Aquifer are the most cost effective sources of raw water, since the water in these sources is generally fresh, resulting in low treatment costs, and the aquifers are shallow, so drilling expenses are relatively low. Generally, the water table and Lower Tamiami Aquifers have moderately high permeabilities and are widely used in the District to supply water to private homeowners for potable and irrigation needs. Withdrawals from these aquifers are severely restricted during the dry season due to the potential for adverse environmental impacts, making the permitting of an add itional large centralized use from either of these sources unrealistic. The future development of a large public supply wellfield tapping this source may be limited. The IAS is located between approximately 120 feet and 750 feet beneath the land surface and includes the Sandstone and Hawthorn Zone I Aquifers. The Sandstone Aquifer is the uppermost hydrologic unit of the IAS. This aquifer is rarely used as a water source in the District because of its relatively low yield. The underlying Hawthorn Zone I Aquifer is a brackish water resource with low to moderate permeability. The FAS, which underlies all of Florida and parts of Georgia and South Carolina, is one of the most productive aquifers in the United States and includes the Lower Hawthorn Aquifer. The FAS is located between approximately 750 feet and 2,100 feet beneath the land surface and includes the Lower Hawthorn, Suwannee, Ocala and Avon Park Aquifers. The uppermost Lower Hawthorn Aquifer has low to high permeabilities and is currently used b y the District as a brackish raw water source. 25694/010/01768238.DOCXv3 27 The Suwannee and Ocala Aquifers generally have low permeabilities and brackish to saline quality groundwater. The Avon Park Aquifer, the deepest of the formations in the FAS, has relatively high permeabilities and a saline quality groundwater. Although a potentially productive source, the Avon Park Aquifer could be a costly raw water source due to increased drilling costs of wells and increased treatment costs of a highly saline groundwater. Existing Water Supply Currently, the District obtains water from three existing wellfields: (i) the Golden Gate Tamiami Wellfield, which taps the Lower Tamiami Aquifer; (ii) the North Hawthorn Wellfield, which taps the Lower Hawthorn and Hawthorn Zone I Aquifers; and (iii) the South Hawthorn Wellfield, which taps Hawthorn Zone I and Lower Hawthorn Aquifers. The Golden Gate Tamiami and the North Hawthorn Wellfields are located near the North County Regional Water Treatment Plant (NCRWTP). The South Hawthorn Wellfield is located near the South County Regional Water Treatment Plant (SCRWTP). The Golden Gate Tamiami Wellfield supplies raw water to both the NCRWTP and the SCRWTP through a raw water booster pumping station and transmission mains. With respect to raw water withdrawals, the Water System is currently regulated by the South Florida Water Management District ("SFWMD"), which is a public entity of the State of Florida established as a multipurpose water management district that has the responsibility of managing the water resources within its boundaries (i.e., southern Florida). SFWMD regulates raw water withdrawals and is authorized to require permits for the consumptive use of water. All significant water users within south Florida, including the District, require permission to withdraw raw water through the issuance of a water user permit by the SFWMD. A permit is issued by the SFWMD when an entity such as the District demonstrates that the water use is consistent with the public interest, is a reasonable beneficial use of water, and will not interfere with any presently existing legal use of water. The District recently obtained unified water use Permit Number 11-00249-W (all wells included in a single water use permit) extending through September 29, 2036, which is summarized in the following table: Net Water Use Permit Allocations by SFWMD for Public Water Supply Aquifer Total Number of Wells based on SFWMD CUP(1) SFWMD CUP Annual Firm Allocation (AADD) Wellfield Permitted Capacity based on SFWMD CUP(6) Number of Active Wells based on SFWMD Pumpage Report Wellfield Potential Yield(7) MGY MGD GPM MGD MGD Lower Tamiami Aquifer 49(2) 9,673 26.50 42,500 61.20 39 45 Mid Hawthorn Aquifer 46(3) 5,840 16.00 29,650 42.70 45 28 Lower Hawthorn Aquifer 42(4) 4,014 11.00(5) 38,500 55.44 24 35 Total 137 19,527 53.50(5) 110,650 159.34 108 108 Lower Tamiami Aquifer – NESA (OT) 10 236.12 0.65 3,200 4.61 3 1.3 [Footnotes on following page] 25694/010/01768238.DOCXv3 28 (1) Number of wells taken from SFWMD CUPs (Permit Numbers 11 -00249-W and 11-00419-W) (2) Includes 10 proposed future wells as permitted in the SFWMD CUP (Permit Number 11 -00249- W). (3) SFWMD CUP (Permit Number 11-00419-W) indicates well 32S is existing, however this well is not drilled as noted in the SFWMD pumpage report. Therefore, there are 45 existing and 1 proposed well. (4) SFWMD CUP (Permit Number 11-00148-W) indicates that wells 43S and 44S are existing. However, the SFWMD pumpage report shows that these wells do not exist and are proposed. (5) Special permit condition 5 of the SFWMD CUP (11-00249-W) provides for an annual allocation of 7,125 MG (19.52 MGD) for the Lower Hawthorn Aquifer. However, the CUP limits the total annual withdrawals from all the wellfields to 19,527 MG (53.50 MGD). Assuming that maximum withdrawals are made from Lower Tamiami and Mid Hawthorn Aquifers, the allowable withdrawal from the Lower Hawthorn Aquifer would be: 19,527 - (9,673 + 5,840) = 4,014 MG (11.00 MGD). (6) Wellfield permitted firm capacity is based on the of number of wells identified in the SFWMD CUPs with largest well out of service and corresponding rated capacity from raw water wells. (7) Wellfield potential yield was calculated using number of active wells and approximate pumping capacity per well. Source: Consulting Engineers and Financial Feasibility Report attached hereto as APPENDIX D. The current Lower Tamiami Aquifer water supply at the Golden Gate Tamiami Wellfield has a permitted capacity of 9,673 million-gallons (MG) per year (26.50 MGD-AADD). The Hawthorn Zone I Aquifer water supply at the North and South Hawthorn Wellfields has a permitted capacity of 7,125 MG per year (19.52 MGD-AADD), and the Lower Hawthorn Aquifer water supply has a permitted capacity of 4,755 MG per year (13.03 MGD-AADD). The total annual allocation for all aquifers is 20,270 MG per year (55.53 MGD-AADD). The permit limits the use of fresh groundwater resources to 26.5 MGD and brackish water to 29.03 MGD (35.52 MGD with overlap for operational flexibility). Special permit condition 5 of the SFWMD CUP 11-00249-W reduces the annual allocation from 26.5 MGD to 18.77 MGD after September 30, 2019. However, renewal documentation is underway to extend the current fresh groundwater allocation. An additional 5.00 MGD of treatment capacity is required to be online by the fiscal year ending September 30, 2028 when comparing firm capacity to MMDD (when comparing firm capacity to M3DD it would be required by the fiscal year ending September 30, 2025) to meet the District projected growth. Constructing the first phase of the future Northeast Regional Water Treatment Plant ("NERWTP") with a brackish groundwater treatment process would meet this need in accordance with the current SFWMD CUP 11-00249-W; however, an application to modify this permit to allow 3.75 MGD of fresh water treatment in the future NERWTP is pending. The total reliable raw water required to utilize the capacity of the existing District treatment facilities and the initial 5 MGD phase of the future NERWTP is 89.28 MGD. The available wellfield firm capacity as the SFWMD CUPs is 149.12 MGD and as per the District well inventory is 102.26 MGD. Regulatory Issues SFWMD last prepared and issued the Lower West Coast Water Supply Plan in April, 2012. This document is a 20-year plan for water supply for the Lower West Coast of Florida, comprised of Collier County, Lee County, Glades County, Hendry County and portions of Charlotte and Monroe Counties. The Plan Conclusion was stated as: 25694/010/01768238.DOCXv3 29 "The future water demands of the region can continue to be met through the 2030 planning horizon with appropriate management and continued diversification of water supply resources." The Lower West Coast Water Supply Plan recommends the diversification of supply sources, comprising increased use of reclaimed water, increased use of supplemental water sources and the increased use of Aquifer Storage and Recovery ("ASR") for storage. All future raw water sources are being investigated in accordance with SFWMD recommendations. An update to the Plan was approved by the Board on January 8, 2019, with SFWMD approval anticipated sometime later in the Summer of 2019. Water Treatment Facilities The United States Environmental Protection Agency, the Florida Department of Environmental Protection ("FDEP"), and the Collier County Department of Health regulate the quality of the District's water. The District is currently in compliance with all applicable regulations relating to water quality, providing potable water that meets the Federal Safe Drinking Water Act and all State of Florida primary and secondary standards. Primary standards set limitations for specific contaminants in dr inking water. Secondary standards establish levels for contaminants that may have adverse cosmetic or aesthetic effects on drinking water. Currently, the primary regulatory impetus affects those districts or authorities that utilize surface water sources rather than groundwater sources as the District does. North County Regional Water Treatment Plant The North County Regional Water Treatment Plant ("NCRWTP") is located on the north side of Vanderbilt Beach Road Extension east of CR 951 in the northeast q uadrant of the service area. The plant uses groundwater withdrawn from the Lower Tamiami, Lower Hawthorn and Hawthorn Zone I Aquifers. Membrane softening and RO treatment processes are used to produce drinking water from these aquifers, respectively. Membrane filtration and RO are physical treatment processes that use semi-permeable membranes for the removal of contaminants from water. The membrane filtration process uses nanofiltration across permeable membranes with approximately 85-percent recovery efficiency (recovery efficiency is the percentage of raw feed water converted to product water). The RO process is designed for chloride removal and provides a recovery efficiency of about 75 percent. The 12 -MGD membrane softening process and 8-MGD RO process draw water from separate aquifers and operate independently. The operation of the membrane softening and RO skids is operator-initiated. The membrane softening process uses water from the Lower Tamiami Aquifer, and the RO process uses water from the Lower Hawthorn and Hawthorn Zone I Aquifers. Both membrane processes use similar pretreatment, including chemical addition and cartridge filtration. However, separate sets of cartridge filters and acid/scale inhibitor metering pumps are dedicated to each process. Product water produced by the two membrane processes is blended in a common header for post-treatment and distribution. Chloramines are used for disinfection, and the facility has a chlorine scrubber for safety. Additional chemical additives d uring post-treatment include polyphosphate for corrosion control, fluoride for public health, and sodium hydroxide for pH adjustment. The concentrate produced by the two membrane processes (reject water) also is blended and subsequently disposed into one of the two on-site injection wells. The membrane softening and RO processes share a common clean-in-place system that is used to clean the membrane elements with a chemical solution. Chemical cleaning partially recovers the decline in permeate production that occurs due to scaling and fouling of the membrane elements. 25694/010/01768238.DOCXv3 30 Four generators provide emergency power to allow for continued operation of the facility in the event of a temporary or prolonged power outage. South County Regional Water Treatment Plant The South County Regional Water Treatment Plant ("SCRWTP") is located near the intersection of CR 951 and I-75 about 5.5 miles south of the NCRWTP. The SCRWTP includes a 12-MGD lime softening facility that receives raw water from the Lower Tamiami Aquife r and a 20-MGD RO process that receives raw water from the Lower Hawthorn and Hawthorn Zone I Aquifers. For the lime softening process, the raw water is initially pumped through updraft degasification units to remove hydrogen sulfide. Downstream of the degasification units, a splitter box serves as a feed point for potassium permanganate prior to diverting the flow into three reactor/clarifiers for lime softening. The softened water flows from the reactors to the re-carbonation basin where carbon dioxide is added for pH adjustment. From the re-carbonation basin, the flow continues to the gravity sand filters. Upstream of the filters, ammonia and chlorine are added. The filtered water then flows to the clearwell, which is equipped with five transfer pumps to feed the ground storage tanks. Upstream of the RO process, the raw water is chemically pretreated to adjust pH and inhibit scale and is routed through cartridge filters. The pretreated water is then directed to the RO process to remove calcium, chlorides and inorganic carbon. The product water leaving the RO facility goes through degasification to remove sulfides and any remaining carbon. The degasified permeate flows to the new blend tank, sized to serve both the RO and lime-softened water. A blend tank provides a point at which the product waters from the two different water treatment processes can be combined to create one consistent and stable finished water for storage and distribution. Once lime-softened water and RO permeate come together in the blend tank, sodium hydroxide, chlorine (to disinfect), anhydrous ammonia (to form a chlorine residual), and a blend of ortho-polyphosphate (to inhibit corrosion) and sodium silicofluoride (public health) are added for final treatment. All chemicals associated with pretreatment, treatment, post-treatment, and cleaning of the membranes are stored, used, and disposed of, if necessary, in accordance with Federal and State regulations. The recovery efficiencies of the SCRWTP lime softening and RO treatment processes are approximately 97% and 75%, respectively. The transfer pumps direct the flow to two 6-MG finished water storage tanks. The transfer pumps direct the flow to one 2-MG and two 6-MG finished water storage tanks. Two lime softening facility generators and two RO facility generators at the SCRWTP provide sufficient emergency power to allow for continued operation of the facility in the event of a temporary or prolonged power outage. The main switchgear feeds the high service pumps, and three mo tor control centers. The motor control centers feed various equipment throughout the plant including; transfer pumps, chemical systems, backwash and surface wash pumps, and miscellaneous building loads. Orange Tree Sub-Regional Water Treatment Plant The District acquired this water plant during the acquisition in 2017. The plant was in service initially but has been placed on stand-by since connecting this community to the District regional water system. It is an operational facility but is not needed at this time for production. 25694/010/01768238.DOCXv3 31 Golden Gate City Sub-Regional Water Treatment Plant This plant was shut down and membranes preserved upon connection of customers to the District’s regional water system shortly after take-over. The entire facility and wells, are in poor condition. This facility is not needed for production. Water Transmission, Storage, and Distribution Water Transmission Pressure is maintained in the transmission system by using high service pumps located at both water treatment plants, three operating water booster pumping stations and an in-line booster pump station located strategically in the Water System. The booster pumping stations are located at Isles of Capri, Manatee Road and Carica Road. The District also owns the Golden Gate facility which is not in operation. The in-line booster station is in the northwest portion of the Water System near Vanderbilt Drive. The Isles of Capri Pumping Station is a local distribution station in the far south portion of the service area, prov iding high service pumping to the local area. The Manatee Road facilities serve the south portion of the service area. The Carica Road facilities serve the north portion of the service area. The Vanderbilt Booster Pumping Station was originally installed as a booster station for fire flow demand. As the water customers and demand have increased, this station operates on a regular basis to provide adequate water pressure in the northwest portion of the Water System. The high service pumps at the treatment plants are operated to maintain a discharge pressure 90 psi. The other pumping stations are utilized to maintain pressures in the extremities of the Water System during high demand periods. Water Storage Ground storage tanks at the treatment plants and at the booster pumping station sites provide system storage and reserve capacity to help meet peak hourly demands of the Water System. The booster pumping station storage tanks are located at Isles of Capri, Manatee Road and Carica Road. The Isles of Capri Pumping Station is a local distribution station in the far south portion of the service area, providing 0.25 million gallons of storage. The Manatee Road facilities serve the south portion of the service area and include a two-million-gallon storage tank. The Carica Road facilities include two five million gallon storage tanks. The Golden Gate facility has a one million gallon storage tank; provided, however it is currently not in operation. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 32 Finished Water Storage Facilities Capacity of Storage Facility – MG Name/Location of Storage Facility Type of Storage Facility Tank Volume Usable Storage Capacity NCRWTP Ground Storage Tank 12.00 11.10 SCRWTP Ground Storage Tank 14.00 12.40 Isles of Capri Distribution Pump Station 0.25 0.20 Manatee Road Pumping Station Distribution Pump Station 2.00 1.80 Carica Road Pumping Station Distribution Pump Station 10.00 9.30 NESA Booster Station(1) Ground Storage Tank 7.50 7.50 Total Combined Storage Capacity 45.75 42.30 (1) Decommissioned June 1, 2021. MG = Million Gallons Source: Consulting Engineers and Financial Feasibility Report attached hereto as APPENDIX D. Water Distribution The District owns and maintains over 1,090 miles of potable water transmission and distribution pipelines, ranging in size up to 48 inches in diameter, with over 75,000 metered service connections . The pressure in the water distribution system is generally maintained at 80 psi, which meets the fire flow requirements of the District. The water distribution system is generally not considered as a looped network and there are numerous instances of some dead-end lines, which require periodic flushing to assure water quality. The water distribution facilities are equipped with isolation valves throughout the Water System for repairs and maintenance without shutting down significant portions of the Water System at one time. The water distribution system also includes an adequate number of fire hydrants to provide fire protection throughout the service area of the Water System. Water System Residuals Disposal The District generates two types of residuals disposal: (i) lime sludge disposal from the SCRWTP; and (ii) liquid concentrate disposal from the membrane softening ("MS") and RO processes at the SCRWTP and NCRWTP. Lime solids are created from the calcium carbonate precipitation process. Excess sludge from the reactor/clarifiers is pumped to a gravity thickener, when the solids are settled. The thickened sludge is pumped to a dewatering process that uses belt filter presses, which are located in a dewatering building. The dewatered sludge is hauled by truck to a land application facility using a contract hauler. The hauling contract typically has a short term of two years and is bid at the end of this term. Utilization of RO to treat brackish sources generates a concentrate that requires disposal. Concentrate disposal is regulated by the FDEP. In southwest Florida, the FDEP -preferred alternative for disposing of the by-products of the RO treatment process is injection well technology, in which the concentrate is injected through a well into the "Boulder Zone" of the Lower Floridan Aquifer. The Boulder Zone in the County occurs at depths ranging from approximately 2,000 feet to 3,400 feet below land surface. It is overlain by 500 to 1,000 feet of low -permeability limestone and dolomite, 25694/010/01768238.DOCXv3 33 which retard the upward movement of injected fluids. The permeability of the Boulder Zone is very high. This combined with the fact that the Boulder Zone contains salt water makes it an ideal zone for receiving injected wastes. There are currently four Class I injection wells in the County that are used for the disposal of treated municipal sewer and concentrate from RO desalination facilities. Regulating agencies such as the FDEP support the use of injection wells to dispose of the by- products of membrane treatment. Under current regulations, Class I injection wells must be permitted through the Underground Injection Control ("UIC") program of the FDEP. The UIC permitting process requires that the injection wells be constructed so that they have mechanical integrity and that adequate confinement is present so that injected fluids do not migrate and impact underground sources of drinking water. Injection wells must undergo mechanical integrity testing every five years. Well performance and monitoring data are also reviewed every five years as part of the operational permit renewal. Concentrate disposal at the two existing water treatment plants is by deep well injection. T he NCRWTP has two on-site 16-inch diameter injection wells, each with a design capacity greater than the design concentrate flow of 4.4 MGD. This provides the 100 percent enhanced reliability requirement in the FDEP rules. At the NCRWTP, each well has a constructed capacity of 7.9 MGD. The SCRWTP includes two 20-inch diameter deep injection wells, for the concentrate flow of 6.7 MGD. The permitted capacity for each well is 12.7 MGD. Condition of Water System The existing water treatment facilities utilize treatment technologies that are appropriate for the raw water sources and acceptable industry-wide. The District has been diligent in maintaining the Water System and planning for future upgrades. As such, growth has dictated that a significant porti on of the Water System has been constructed in the last twenty years. The water supply and treatment facilities appear to be in good operating condition and are maintained in accordance with prudent utility management practices. Projected Potable Water Demand (Capacity Planning Requirements) Collier County Growth Management Department Comprehensive Planning Division (the "Comprehensive Planning Division") develops population projections utilizing the following information: historical population growth, Florida Bureau of Economic and Business Research ("BEBR") population forecasts, and water service information provided by the County Water Division. In addition to population growth, other criteria are utilized to determine future capacity of the water treatment and distribution facilities. The Level of Service Standard ("LOSS") factors are used to forecast future water demands, determine capacities of future facilities, and for hydraulic modeling. Revised LOSS factors for the Water System were adopted by the District in 2015. The LOSS factors include operational standards and a per capita water demand standard (150 gpcd). The LOSS for water transmission systems requires a minimum system pressure of 50 pounds-per- square-inch (psi) during the peak hour water demand period and a minimum Water System pressure of 40 psi during maximum daily demand with fire flow. Water System Capacity The District recently completed an update to the 2014 Water Master Plan/CIP Plan integrated with the 2018 Rate Study to develop a comprehensive plan to accommodate growth. Increasing the Water 25694/010/01768238.DOCXv3 34 System capacity requires that the District construct additional treatment facilities to accommodate growth and provide additional infrastructure to deliver finished water to the customers . The combined ultimate operational capacity of the existing facilities is 48.0 MGD. Two future treatment facilities that are proposed to augment the treatment capacity provided by the NCRWTP and SCRWTP are the Northeast Regional Water Treatment Plant ("NERWTP") anticipated to be on-line in 2028, and the Southeast Regional Water Treatment Plant ("SERWTP") which will depend on demand and population growth. The following table summarizes water treatment plant constructed and operational capacity: Water Treatment Plant Capacity Summary WTP Treatment Process Ground Water Resource Constructed Capacity Recovery Efficiency NCRWTP Nanofiltration (NF) Fresh Ground Water 6 X 2 MGD = 12 MGD 85% Low Pressure Reverse Osmosis (LPRO) Brackish Ground Water 4 X 2 MGD = 8 MGD 75% SCRWTP Lime Softening (LS) Fresh Ground Water 3 X 4 MGD = 12 MGD 97% Low Pressure Reverse Osmosis (LPRO) Brackish Ground Water 10 X 2 MGD = 20 MGD 75% Total Constructed Capacity 52 MGD NA Operational Capacity(1) 48 MGD NA (1) In order to account for the operational need to maintain plant equipment, the constructed capacity (52 MGD) is reduced by the largest treatment process unit (4 MGD lime softening reactor/clarifier). The resulting operational capacity (48 MGD) is used to determine when expansion is required. This is based on the District's Public Utilities Division Reliability Guidelines, February 2006, consistent with the "2012 Recommended Standards for Water Works." MMDD = Maximum Month Daily Demand MGD = Million Gallons Per Day Source: AECOM, the District's Consulting Engineer Sewer System General The sewer treatment facilities in the Sewer System include two regional water reclamation facilities, two sub-regional treatment facilities (one at Orange Tree to serve that development and the second located at the Golden Gate City wastewater treatment site), over 709 miles of gravity sewer lines, 900 pumping stations (of which 22 are master pumping stations), and more than 447 miles of force main. The Orange Tree facility has a current capacity to treat 0.75 MGD, with an expansion project underway in 2019 to increase that by an additional 0.375 MGD. The Golden Gate City sub-regional treatment plant has a permitted capacity of 1.5 MGD. 25694/010/01768238.DOCXv3 35 Wastewater Flows When considering sewer flows as they relate to planning and permitting for sewer facilities, the following flow conditions are typically analyzed: • Annual Average Daily Flow ("AADF"): Total wastewater flow generated in one year divided by the number of days in that year. • Maximum Month Daily Flow ("MMDF"): Maximum quantity of wastewater generated during a single month during a one-year period, divided by the number of days in the month. The District utilizes the MMDF for sizing sewer treatment facilities. For estimating projected demands, the MMDF is 1.20 times the AADF. • Maximum 3 Day Flow ("M3DF"): Maximum average of the quantity of wastewater generated in three consecutive days. For estimating projected flows, the M3DF is 1.5 times the AADF. Historical wastewater flow data is summarized in the following table: Historical Wastewater Flows Fiscal Year AADF (MGD) MMDF (MGD) M3DF (MGD) 2011 14.76 16.8 19.24 2012 16.18 18.58 25.86 2013 18.49 21.15 28.15 2014 17.55 20.91 23.45 2015 18.67 21.02 21.91 2016 19.34 23.09 32.35 2017 19.97 23.57 33.35 2018 19.58 21.22 23.69 2019 20.37 23.42 24.16 2020 20.95 23.94 37.27 10-Year Average 18.62 21.41 26.94 MGD = Million Gallons Per Day Source: Consulting Engineers and Financial Feasibility Report attached hereto as APPENDIX D. Wastewater flows increased over the 10-year period of 2011 to 2020 due to growth within the service area and the addition of the North East (Orange Tree) and Golden Gate service areas. Wastewater flows are expected to continue increasing due to additions to the served area in the form of new developments in the northeast, and growth within the existing served area. Wastewater Treatment and Effluent Disposal Facilities General The United States Environmental Protection Agency and the FDEP, regulate the wast ewater treatment and effluent disposal. Regulations for effluent quality vary depending on the nature of effluent 25694/010/01768238.DOCXv3 36 management. The District does not dispose of any wastewater effluent by discharge into surface waters. The District's primary means of wastewater effluent management is by irrigation (reuse), which has more stringent treatment requirements than disposal by other means, since customers will directly utilize the end product. Regulations have been established so that permitted wastewater treatm ent facilities meet effluent limitations for carbonaceous biological oxygen demand ("CBOD"), total suspended solids, nitrates, total phosphorus, fecal coliform, turbidity, and pH. The District is currently in compliance with all applicable regulations relating to wastewater effluent quality for disposal/reuse. North County Water Reclamation Facility Sewer treatment in the North Service Area is provided at the North County Water Reclamation Facility ("NCWRF"), located on the east side of Goodlette-Frank Road just south of Immokalee Road. The NCWRF operates under FDEP Permit No. FL0141399 which expires September 8, 2023, and is designed , permitted and operated to stay in compliance and to meet all wastewater treatment standards and effluen t disposal requirements. No issues are anticipated by the District in renewing this permit. The plant provides advanced secondary treatment producing effluent consistent with requirements for irrigation quality water. Irrigation water is the primary means of effluent disposal. The NCWRF is a 24.1 MGD facility with two parallel treatment trains. In the first train, which is an 11.1 MGD MMDF oxidation ditch (extended aeration) facility, influent wastewater flows through the headworks where two mechanical bar screens and one manual bar screen provide preliminary treatment. The wastewater then flows into three aerated grit basins. From the aerated grit basins, wastewater flows into three oxidation ditches. Diffusers provide transfer of oxygen to the mixed liquor in each ditch. Activated sludge is returned to the head of the oxidation ditches by horizontal centrifugal pumps. The oxidation ditch effluent proceeds to five secondary clarifiers for final sedimentation. Effluent from the secondary clarifiers flows to eight traveling bridge automatic backwash filters for solids removal. Filtered effluent is routed to two chlorine contact chambers. Sodium hypochlorite is injected at the head of the chlorine contact chambers. Following the chlorine contact chambers, the treated and filtered effluent flows to the reuse pumping station, where it can be directed to appropriate disposal. The second parallel treatment train is a 13.0 MGD MMDF facility, which uses the Modified Ludzack-Ettinger ("MLE") process. In the MLE Facility, the influent wastewater flows through mechanical bar screens, aeration grit chambers, and then into aeration basins. The aeration basin effluent proceeds to secondary clarifiers for final sedimentation. A portion of the aeration basin effl uent (mixed liquor) is recycled to the aeration basin as part of the MLE process to promote denitrification. Effluent from the secondary clarifiers flows to traveling bridge automatic backwash filters for solids removal. Filtered effluent is routed to chlorine contact chambers. Sodium hypochlorite is injected at the head of the chlorine contact chambers. Following the chlorine contact chambers, the treated and filtered effluent flows to the reuse pumping station, where it can be directed to appropriate disposal. The facility has three 1.5-MG flow equalization tanks to increase plant reliability for handling higher peak hourly flows. The planned build out capacity of the NCWRF is 30.6 MGD utilizing treatment technologies present at the site. In December 2014, the FDEP awarded the NCWRF the 2014 Plant Operations Excellence Award in recognition of "outstanding operation through dedicated professionalism." 25694/010/01768238.DOCXv3 37 In January 2019, the FDEP awarded the NCWRF the 2018 Domestic Wastewater Plant Operations Excellence Award in recognition of outstanding treatment plant operation, maintenance and compliance. South County Water Reclamation Facility Wastewater treatment in the south service area is provided at the South County Water Reclamation Facility ("SCWRF"), located approximately one mile south of Rattlesnake Hammock Road and nearly one mile east of US 41. The SCWRF operates under FDEP Permit No. FL0141356, which expires October 23, 2022, and is designed, permitted and operated to stay in compliance and to meet all wastewater treatment standards and effluent disposal requirements. No issues are anticipated in renewing this permit. The plant provides advanced secondary treatment producing effluent consistent with requirements for irrigation quality water. Irrigation water is the primary means of effluent disposal. The present permitted capacity of the SCWRF is 16.0 MGD MMDF. The SCWRF is a domestic wastewater facility that utilizes the MLE process. Pretreatment consists of a screening facility with mechanical and manual screening, and grit-handling facilities and pumps. Effluent from the pretreatment processes is mixed with activated sludge and recycled mixed liquor prior to feeding the aeration tanks. Secondary treatment is provided by aeration trains (with anoxic zones and fine bubble diffused-air zones), multi-stage centrifugal blowers, return mixed liquor pumps, secondary clarifiers, odor control units and return activated sludge pumps. The SCWRF also has traveling bridge filters with automatic backwash and chlorine contact chambers where sodium hypochlorite is used to disinfect treated water. Residuals are sent to an aerated sludge holding tank and are dewatered by belt filter presses. The SCWRF has two equalization tanks. The SCWRF is currently at its buildout capacity utilizing treatment technologies present at the site. FDEP awarded the SCWRF the 2017 Operations Excellence Award in recognition of "outstanding operation through dedicated professionalism." Orange Tree Sub-Regional Water Reclamation Facility The Orange Tree sub-regional treatment plant is located on Oil Well Road, just east of Immokalee Road. The wastewater treatment plant operates under FDEP Permit No. FLA014165, which expires March 25, 2022, and is permitted and operated to stay in compliance and to meet all wastewater treatment standards and effluent disposal requirements. The plant is an Extended Aeration process and has a permitted capacity of 0.750 MGD, with manually cleaned bar screens, equalization basin, secondary clarifiers, tertiary disc filters, sodium hypochlorite for disinfection and percolation ponds for effluent disposal. Residuals are processed at this time by a vendor utilizing centrifuge technology and hauling to and alternative treatment/disposal site. We are currently in process to increase the capacity of the facility, by constructing an additional extended aeration plant, clarifier and other appurtenances to accommodate for future customers. The project is budgeted to begin in the fiscal year ending September 30, 2019. Golden Gate City Sub-Regional Water Reclamation Facility The Golden Gate sub-regional treatment plant is located on 32nd Avenue SW at the intersection with Tropicana Boulevard. This wastewater treatment facility has permitted capacity of 1.5 MGD AADF, 1.8 MGD TMADF under permit number FLA142140, which expires June 15, 2020, and is permitted and operated to stay in compliance and to meet all wastewater treatment standards and effluent disposal requirements. The plant is a Complete Mix process and has and equalization basin, pre-screening, grit 25694/010/01768238.DOCXv3 38 removal system, 2 secondary clarifiers, sodium hypochlorite for disinfection, deep injection well and percolation ponds for effluent disposal. Residuals are processed at this time by a vendor utilizing centrifuge technology and hauling to and alternative treatment/disposal site. We are currently in discussion concerning potential expansion to plan for the growth of the area. Effluent Disposal The primary means of effluent disposal at both the NCWRF and SCWRF is distribu tion to irrigation quality water customers for irrigation use. Excess water or water unsuitable for public access irrigation is pumped into deep injection wells ("DIWs") as the District's secondary means of effluent disposal. In the past, the District's two water reclamation facilities each served its own dedicated irrigation quality water system and customers. In 2002, an interconnection between the two systems was created allowing limited irrigation quality water and supplemental water to be exchanged between the two service areas. Irrigation quality water is produced at the water reclamation facilities ("WRFs") as the source of water supply for the benefit of the System. The irrigation quality water can be temporarily stored at the WRFs in ponds on site or distributed for use or storage at customer sites. The District's goals for the irrigation quality water system are to meet the allocations established under each customer irrigation quality water agreement and to maximize the reuse of irrigation quality water, minimizing disposal using DIWs. The irrigation quality water system serving customers in the District has evolved from being considered strictly effluent disposal to being an irrigation quality water service provider (water resource). However, the primary function of the irrigation quality water system is for effluent disposal, as required by the operating permits of the WRFs. Although some District customers have a backup supply of irrigation water from wells, other customers depend on t he District's irrigation quality water system as their sole source of irrigation water. Customers largely consist of bulk commercial customers and residential communities. The District is compensated by its customers based on rates established by the District. Treated effluent from the OTWWTP is pumped to three on-site Rapid Infiltration Basins ("RIBs") and effluent from the GGWWTP is pumped to an on-site deep injection well. The permit at the NCWRF limits the effluent disposal from the plant to two options, irrigation and deep well injection at the plant site. The NCWRF has two deep injection wells, each with a capacity of 17 MGD MMDF (34.0 MGD peak hourly flow). There are also on-site irrigation quality water storage ponds with a combined volume of 25 MG. The permit at the SCWRF limits the effluent disposal from the plant to three options, irriga tion, wetlands mitigation, and deep well injection at the plant site. The SCWRF has two deep injection wells on site, each with a capacity of 9.25 MGD MMDF (18.0 MGD peak hourly flow). There is also an on-site irrigation quality water storage tank with a volume of 6.6 MG. The plant also has an on-site irrigation quality water storage pond with a volume of 4.4 MG. The District owns several ponds away from the plant site with a total volume of 101.4 MG. Irrigation Quality Water Aquifer Storage and Recovery The purpose of the irrigation quality water ASR wells is to store excess irrigation quality or reuse water in the wet season for use during the dry season to help protect and preserve the fresh and potable water supply. The irrigation quality water is stored in a deep brackish water aquifer system that is isolated 25694/010/01768238.DOCXv3 39 from the freshwater aquifers that lie several hundred feet above. There are hundreds of feet of confining clays and other strata separating the brackish aquifer from the fresh water aquifer. In addition, all stored water is pretreated to meet primary drinking standards and will be monitored by a comprehensive system. The District constructed one irrigation quality ASR well in 2014 and a second ASR well in 2015. A total of five irrigation quality water ASR wells are planned by the District to be constructed for irrigation quality water storage. Each ASR well is planned to receive or deliver up to 1.0 MGD of irrigation quality water. This project will enhance the District's ability to store irrigation quality water rather than dispose of this water by deep well injection during periods of high wastewater flows and low irrigation demands (which occurs during the wet season). ASR Program Location Irrigation Quality Water Capacity Fiscal Year of Construction Completion Fully Functional Storage Capacity Available Livingston Road(1) 1 MGD (Initial Well) 2014 2020 Livingston Road(1) 1 MGD (Second Well) 2015 2022 Livingston Road(1) 3 MGD (Three 1-MGD Wells) 2022 2028 Total ASR Capacity 5 MGD N/A N/A (1) Provided that cycle testing yields favorable results. Source: Collier County Water-Sewer District Residuals Disposal Biosolids are dewatered using the belt filter presses at both the NCWRF and the SCWRF. The NCWRF sludge dewatering building size is adequate for the ultimate plant capacity of 30.6 MGD MMDF; however, a sixth belt filter press will be required. Biosolid s facilities at the SCWRF include two 330,000- gallon waste activated sludge holding tanks. The District transports biosolids out of the County to a landfill for composting. There are currently no environmental issues regarding composting disposal. The District issued a Request For Proposal on February 26, 2016 to examine options for public private partnership for biosolids digestion providing direct benefit to the District through the production of compressed natural gas for vehicle fueling. Multiple pr oposals have been received and the selection committee has identified the top two proposals to present to the Board in the near future. Sewer Collection and Transmission Facilities The Sewer System contains more than 709 miles of gravity sewer lines and 447 miles of force main, and 900 pumping stations serving the sewer collection system. The pumping stations are predominately small pump stations with a minimum of 2 submersible pumps at each station. There are also 22 master pumping stations strategically located to transmit sewage to the water reclamation facilities. All the master pumping stations are equipped with permanent auxiliary power generators for use during power outages. There is a hydraulic interconnection that allows limited flow transfer between the service area of the NCWRF and SCWRF. 25694/010/01768238.DOCXv3 40 Condition of Sewer System The existing wastewater treatment facilities utilize treatment technologies that are appropriate for secondary treatment of municipal wastewater and acceptable industry-wide. There have been no known negative performance issues associated with these technologies. The District has been diligent in maintaining the Sewer System and planning for future upgrades. As such, growth has dictated that a significant portion of the Sewer System has been constructed in the last twenty years. The wastewater collection and treatment facilities of the Sewer System appear to be in good operating condition and are maintained in accordance with prudent utility management practices. Projected Flow (Capacity Planning Requirements) Collier County Growth Management Department Comprehensive Planning Division (the "Comprehensive Planning Division") develops population projections utilizing the following information: historical population growth, Florida Bureau of Economic and Business Research ("BEBR") population forecasts, and water service information provided by the Wastewater Division. In addition to population growth, other criteria are utilized to determine future capacity of the water treatment and distribution facilities. The LOSS factors are used to forecast future water demands, determine capacities of future facilities, and for hydraulic modeling. Revised LOSS factors for the Sewer System were adopted by the District in 2015. The LOSS factors include operational standards and a per capita wastewater flow standard of 100 gpcd. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 41 Projected Wastewater Flow vs Existing Treatment Capacity Fiscal Year AADF (MGD) MMDF (MGD) Capacity MMDF Gap Analysis (MGD) 2021 21.28 25.32 44.23 18.90 2022 21.69 25.81 44.23 18.41 2023 22.11 26.31 44.23 17.92 2024 22.53 26.81 47.23 20.41 2025 22.96 27.32 47.23 19.90 2026 23.40 27.84 47.23 19.38 2027 23.83 28.36 47.23 18.87 2028 24.27 28.88 47.23 18.35 2029 24.77 29.48 47.23 17.74 2030 25.33 30.14 47.23 17.08 2031 26.13 31.09 47.23 16.13 2032 26.93 32.05 47.23 15.18 2033 27.73 33.00 51.23 18.22 2034 28.53 33.95 49.73 15.77 2035 29.33 34.91 49.73 14.82 2036 29.63 35.26 49.73 14.47 2037 29.92 35.61 49.73 14.12 2038 30.22 35.96 49.73 13.77 2039 30.51 36.31 49.73 13.42 2040 30.80 36.66 49.73 13.07 gpcd = gallons per capita per day MG = Million Gallons MGD = Million Gallons Per Day Source: Consulting Engineers and Financial Feasibility Report attached hereto as APPENDIX D. Sewer System Capacity The existing regional water reclamation facilities have a combined permitted treatment capacity of 42.97 MGD (which includes GGWWTP and OTWWTP). Additional treatment capacity will be needed in order to accommodate anticipated future service area growth. The two proposed facilities to further augment treatment are the Northeast Water Reclamation Facility ("NEWRF") with construction to start approximately in 2022 with on-line capacity in 2025, and the Southeast Water Reclamation Facility ("SEWRF"). A summary of the wastewater treatment capacities is shown in the following table: [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 42 Sewer Treatment Capacities Summary Water Reclamation Facility Permitted Capacity MMDF (MGD) NCWRF 24.1 SCWRF 16.0 OTWWTP(1) 0.87 GGWWTP(2) 2.00 Total 42.97 MGD = Million Gallons Per Day (1) Treatment capacity is estimated based on permitted TMADF multiplied by an estimated MMDF peaking factor of 1.16 based on available historical flows information. (2) Treatment based on permitted TMADF multiplied by an estimated MMDF peaking factor of 1.3 based on available historical flows information. Source: Consulting Engineers and Financial Feasibility Report attached hereto as APPENDIX D. Future Wastewater Treatment Expansion Approximately 4.0 MGD of additional treatment capacity is required system -wide to meet the projected wastewater system demands. By 2025, the SCWRF is expected to exceed its capacity. The District will construct a 1.5 MGD interim treatment facility at the proposed northeast utility site to meet imminent demand proposed by developers. The Board approved the design/build contract at the March 12, 2019 meeting. A permanent 4.0 MGD regional treatment facility on this site is anticipated to start construction in 2022 with capacity on-line by 2025, depending on demand. Future master planning activities will indicate other potential locations for additional capacity based on future development. Even though significant growth is anticipated in the south service area, because the SCWRF is currently at its buildout capacity, additional treatment must be sited elsewhere. To accommodate growth in the south service area, 2.4 MGD of additional collections system conveyance capacity is required to move flows from south to north starting by 2025 through 2034. This additional collection system conveyance is being constructed in phases and will help meet the needs of the south service area. Rates, Fees and Charges Gross Revenues for the District is derived primarily from the application of the monthly user charges or rates levied against all customers for utility services rendered. The rates for monthly water and wastewater service accounted for approximately ___% of the reported Gross Revenues for the fiscal year ended September 30, 2020. Gross Revenues also includes interest earnings on unrestricted fund balances and realized gains from the sale of investments considered to be a component of Gross Revenues. Interest earnings on funds where earnings are considered restricted (e.g., System Development Fees, Reserve Fund balances, Renewal and Replacement Fund balances or Construction Fund balanc es) are not considered as a component of the Gross Revenues of the System. The sales revenues derived from the monthly rates or user charges and other operating revenues were developed based on retail rates and charges that were approved by the Board pursu ant to the adoption of Resolution No. 2021-___ on June __, 2021 (the "Retail Rate Resolution"). In addition, the Board 25694/010/01768238.DOCXv3 43 also adopted on June __, 2021 Resolution No. 2021-___, which provided for an increase in the potable water bulk services rates for wholesale water service to the City of Marco Island (the "City") (the "Bulk Water Resolution", and collectively with the Retail Rate Resolution, the "Rate Resolution") (it should be noted that the County is currently not providing wholesale water service to the City). The primary purpose of the Rate Resolution was to adopt a series of rate adjustments to be implemented annually effective October 1 for the three Fiscal Year period 2022 (currently in effect) through and including 2024. It should be noted that the prior rate adjustment as approved by the Board also reflected a three -year rate implementation program with rates being adopted through the Fiscal Year 2021 (reflects rates currently in effect as of the date of the Report). Specifically, the Board adopted Resolution No. 2018-129 on July 10, 2018, and was partially amended through Resolution No. 2019-103, which implemented the current rates for monthly utility service and adopted Resolution No. 2018-130 on July 10, 2018 which implemented the current potable water bulk services rates for wholesale water service to the City, (collectively, the “Prior Rate Resolution”). Monthly Water Rates* Effective October 1, 2020(1) Effective October 1, 2021(2) WATER SERVICE BASE CHARGES (All customer types) Meter Size 5/8" $24.09 $25.05 3/4" 37.96 39.48 1" 48.94 50.90 1-1/4" 72.34 75.23 1-1/2" 113.76 118.31 2" 314.03 326.59 3" 693.64 721.39 4" 1,384.11 1,439,47 6" 2,419.62 2,516.40 8" 4,382.72 4,558.03 10" 6,497.01 6,756.89 12" $24.09 $25.05 VOLUME CHARGE PER 1,000 GALLONS (All customer types)(3) Block 1 $3.25 $3.38 Block 2 4.91 5.11 Block 3 6.52 6.78 Block 4 8.14 8.47 Block 5 9.77 10.16 Block 6 13.02 13.54 [Footnotes on following page] 25694/010/01768238.DOCXv3 44 * Amounts shown derived from both the Prior Rate Resolution and the current Rate Resolution. (1) Reflects rates that are currently in effect and are being billed by the District. (2) Reflects rates that have been adopted by the Board pursuant to the Rate Resolution but have not yet been implemented; represents first phase of a three-year rate implementation plan codified in the Rate Resolution. (3) All water is billed based on the foll owing water consumption per block based on the size of meter in service as shown below: Consumption Block (Residential, Multi-Family, Commercial, and Irrigation-Only) Consumption Block (Thousands of Gallons) Meter Size Block 1 Block 2 Block 3 Block 4 Block 5 Block 6 5/8" 0 to 5 6 to 10 11 to 20 21 to 30 31 to 50 Over 50 3/4" 0 to 5 6 to 10 11 to 20 21 to 30 31 to 50 Over 50 1" 0 to 8 9 to 16 17 to 32 33 to 48 49 to 80 Over 80 1-1/4" 0 to 11 12 to 22 23 to 44 45 to 66 67 to 110 Over 110 1-1/2" 0 to 17 18 to 34 35 to 68 69 to 102 103 to 170 Over 170 2" 0 to 27 28 to 54 55 to 108 109 to 162 163 to 270 Over 270 3" 0 to 75 76 to 150 151 to 300 301 to 450 451 to 750 Over 750 4" 0 to 167 168 to 334 335 to 668 669 to 1,002 1,003 to 1,670 Over 1,670 6" 0 to 333 334 to 666 667 to 1,332 1,333 to 1,998 1,999 to 3,330 Over 3,330 8" 0 to 583 584 to 1,166 1,167 to 2,332 2,333 to 3,498 3,499 to 5,830 Over 5,830 10" 0 to 1,057 1,058 to 2,114 2,115 to 4,228 4,229 to 6,342 6,343 to 10,570 Over 10,570 12" 0 to 1,568 1,569 to 3,136 3,137 to 6,272 6,273 to 9,408 9,409 to 15,680 Over 15,680 Source: Collier County Water-Sewer District [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 45 The following is a summary of the adopted sewer rates of the District, all as contained in the Rate Resolution. Monthly Sewer Rates* Effective Effective October 1, 2020(1) October 1, 2021(2) SEWER SERVICE BASE CHARGES (All customer types) Meter Size 5/8" $36.25 $38.06 3/4" 58.29 61.20 1" 75.72 79.51 1-1/4" 112.89 118.53 1-1/2" 178.67 187.60 2" 496.74 521.58 3" 1,099.65 1,154.63 4" 2,196.27 2,306.08 6" 3,840.87 4,032.91 8" 6,958.71 7,306.65 10" 10,316.66 10,832.49 12" $36.25 $38.06 VOLUME CHARGE PER 1,000 GALLONS (All customer types) All Usage(2) $5.10 $5.36 * Amounts shown derived from both the Prior Rate Resolution and the current Rate Resolution. (1) Reflects rates that are currently in effect and are being billed by the District. (2) Reflects rates that have been adopted by the Board pursuant to the Rate Resolution but have not yet been implemented; represents first phase of a three-year rate implementation plan codified in the Rate Resolution. Source: Collier County Water-Sewer District The financial projections indicate a need for additional rate adjustments above those that have already been adopted by the Board primarily to provide funding to meet the ongoing capital needs of the System. The District plans to conduct another user rate study following the construction of the initial northeast utility facilities in 2020 to validate the need for these additional adjustments. In addition to the water and sewer rates for monthly service, the District also provides reuse irrigation water to a variety of users. Such users include single-family residential customers, commercial and multifamily common areas, and golf courses. The County currently estimates that approximately [90%] of the treated effluent from the District's WRFs is used to provide irrigation service. A summary of the reuse irrigation rates, as reflected in the Rate Resolution, is shown as follows: 25694/010/01768238.DOCXv3 46 Monthly Reuse Irrigation Rates* Effective Effective October 1, 2020(1) October 1, 2021(2) REUSE IRRIGATION SERVICE BASE CHARGES (All customer types) Meter Size 5/8" and ¾" $8.92 $9.72 1" 14.90 16.24 1-1/2" 29.70 32.37 2" 47.54 51.82 3" 133.80 145.84 4" 297.30 324.06 6" 594.70 648.22 8" 1,040.70 1,134.36 10" 1,886.22 2,055.98 12" 2,796.87 3,048.59 VOLUME CHARGE PER 1,000 GALLONS Pressurized and Distributed $1.33 $1.45 Pressurized 0.69 0.75 Bulk 0.52 0.57 * Amounts shown derived from both the Prior Rate Resolution and the current Rate Resolution. (1) Reflects rates that are currently in effect and are being billed by the District. (2) Reflects rates that have been adopted by the Board pursuant to the Rate Resolution but have not yet been implemented; represents first phase of a three-year rate implementation plan codified in the Rate Resolution. Source: Collier County Water-Sewer District The District plans to review these schedules from time-to-time. Pursuant to the Rate Resolution, the District has also adopted a revised schedule of fees and charges which are applicable to miscellaneous or customer requested services which became effective on October 1, 2018 for the System. These schedules of fees will be reviewed along with user rates during the next user rate study. The fees generally are imposed to recover the cost of providing specific services such as water and sewer taps and utility turn-on fees. The District does not require customer deposits since the District has the ability to place a statutory lien on each customer's property and can discontinue service to the extent of nonpayment. The District indicates that the level of uncollectibles for providing service is immaterial. 25694/010/01768238.DOCXv3 47 Average Utility Bill Comparison(1) Water Wastewater Total Collier County: Existing Rates Effective October 1, 2020 $40.34 $61.75 $102.09 Adopted Rates Effective October 1, 2021 41.95 64.86 106.81 Other Florida Utilities (Existing Rates): Bonita Springs Utilities, Inc.(2) $30.47 $46.98 $77.45 City of Bradenton 30.94 38.75 69.69 City of Cape Coral 36.82 66.27 75.57 Charlotte County(2) 56.43 68.56 124.99 DeSoto County 65.45 61.04 126.49 Englewood Water District(2) 29.12 43.48 72.60 FGUA – Lehigh Acres System (Lee County)(2) 43.90 70.82 114.72 City of Fort Myers(2) 32.84 83.60 116.44 Hillsborough County(2) 33.55 41.17 74.72 Lee County(2) 28.94 49.70 78.64 Manatee County(2) 20.85 47.69 68.54 City of Marco Island(2) 58.41 58.27 116.68 City of Naples(2) 15.74 41.63 57.37 City of North Port 44.11 62.84 106.95 Okeechobee Utility Authority 47.22 59.47 106.69 Pinellas County(2) 32.45 46.28 78.73 City of Punta Gorda 31.19 36.57 68.93 City of Sarasota 36.65 61.82 98.47 Sarasota County(2) 30.58 59.99 92.40 City of Venice(2) 57.69 63.53 121.22 Other Utilities Average $38.23 $55.42 $92.36 (1) Based on utility survey shown in the Report; comparisons are based on rates in effect as of April 2021. (2) Utility is currently involved in a rate study, is planning to conduct a rate study, or plans to implement a rate revision or price index/pass through adjustment within the next twelve months following the comparison preparation date. Source: Combined Report of the Consulting Engineer and Bond Fe asibility Consultant attached hereto as APPENDIX D. 25694/010/01768238.DOCXv3 48 With respect to the top ten customers based on billed water user rate revenue, the District reports that such customers accounted for approximately 2.0% of the total District water rate revenue in fiscal year ended September 30, 2020 as shown in the following table: District Water System Top 10 Customers Based on User Rate Revenue Fiscal Year 2018(1) Customer Service Class Meter Size Water Consumption (kgal) Percent of Total Water Consumption Total Retail Water Rate Revenues Percent of Total Water Rate Revenues Naples Estates(2) MF – Resid. 6-inch 62,901 0.77% $602,233 0.87% Ritz Carlton Hotels Commercial 6-inch 35,619 0.44% 281,745 0.39% Sreit Tuscan Isle, LLC(2) MF – Resid. 6-inch 28,082 0.34% 258,419 0.36% Naples Community Hospital, Inc. Commercial 6-inch 32,771 0.40% 244,608 0.34% NWNG, LLC Commercial 6-inch 31,591 0.39% 234,703 0.32% RB-3 Associates Commercial 8-inch 19,576 0.24% 203,994 0.28% Southwind Village MHC, LLC(2) MF – Resid. 4-inch 23,707 0.29% 203,109 0.28% Farm-Op, Inc. (2) MF – Resid. 2-inch 15,721 0.19% 182,600 0.25% Advenir at Aventine, LLC.(2) MF – Resid. 8-inch 21,922 0.27% 181,831 0.25% The Dunes of Naples POA, Inc. (2) MF – Resid. 4-inch 20,274 0.25% 165,294 0.25% Top 10 District Customers 292,164 3.58% $2,558,537 3.59% Other District System Customers 7,863,830 96.42% 69,710,935 96.41% Total District System 8,155,994 100.00% $72,269,472 100.00% MF-Resid. = Multi-Family Residential (1) Based on information provided by the District; reflects amounts for the twelve (12) months ended September 30, 2020 (the most recently completed fiscal year for the System). (2) Represents customer with a large mater serving a number of residential dwelling units. Source: Combined Report of the Consulting Engineer and Bond Feasibility Consultant attached hereto as APPENDIX D. System Development Fees In addition to the monthly rates for water and sewer service, the District currently charges System Development Fees, which are sometimes referred to as "impact fees," based upon an equitable and proportionate share of the cost for: (i) water production and transmission facilities; and (ii) wastewater transmission, treatment and effluent disposal capacity of the System. Although the Resolution refers to these fees as "System Development Fees," the ordinance enacted by the Board establishing such fees (and the District in practice) refers to them as "Impact Fees." The purpose of the System Development Fees is for paying or reimbursing the equitable share of the capital costs relating to the construction, expansion or equipping of excess or unused capacity of the System to serve new users. If an existing customer requests an increase in water or wastewater capacity due to increased development, an additional System Development Fee will be collected prior to the development consistent with the net increase in demand. The current System Development Fees became effective on March 30, 2020. The following table summarizes the adopted water and Sewer System Development Fees per Equivalent Residential Connection ("ERC"): 25694/010/01768238.DOCXv3 49 Existing System Development Fee Per ERC(1)(2) Water Fee per ERC $3,382.00 Sewer Fee per ERC 3,314.00 Total $6,696.00 (1) Existing System Development Fees became effective on March 30, 2020, collected at issuance of Certificate of Occupancy. (2) ERC = Equivalent Residential Connection whereby an ERC for the Water System equates to 350 gallons per day of average water use and 250 gallons per day of average Sewer flow for the Sewer System. Source: Collier County Water-Sewer District Under Florida law, System Development Fees may be validly imposed against new connections in order to fund capital improvements that are needed to serve new connections or for debt service for bonds or other obligations issued for such purposes (i.e., can only pay debt service on expansion-related debt). Such lawfully available System Development Fees must be placed in separate accounts and used only for the capital improvements or debt service attributable to expansion or over-sizing of the System through construction or acquisition. System Development Fee revenues fluctuate with the amount of new construction which occurs within the District's service area. Therefore, there can be no assurance that such revenues will not decrease or be eliminated altogether in the event that new construction, might decrease or cease altogether within the System service area. See "SECURITY FOR THE BONDS—General" herein for more information relating to System Development Fees. Capital Improvement Program and Anticipated F unding The District’s Capital Improvement Program ("CIP") for the Forecast Period includes the projected cost of improvements to the System, including an allowance for contingencies, is anticipated by the District to be approximately $588 million, which does include ongoing capital outlay (e.g., departmental capital budgeted as a component of ongoing operations such as meters, vehicles, equipment, furniture, etc. that generally have short asset service lives with results in a constant replacement cycle ) of approximately $10 million. The District's CIP is reviewed by the County on an annual basis. Accordingly, the total cost of the CIP could be more or less, depending on future demand requirements and service area needs, actual contract awards and other economic factors. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 50 Summary of Six-Year Capital Improvements and Expenditures – For the Forecast Period Estimated Capital Cost(1) Capital Improvement Program: Water System Projects: Water System Development Fee Fund (411) Projects $0 Water Capital Account (412) Projects 154,393,639 Water Bond Funded (415) Projects 51,706,700 Ongoing Department Capital Outlay(3) 3,652,737 Total Water System Projects $209,753,076 Wastewater and IQ Water System Projects: Wastewater System Development Fee Fund (413) Projects(2) $3,260,851 Wastewater Capital Account (414) Projects(2) 173,176,196 Wastewater Bond Funded (415) Projects 195,486,700 Ongoing Department Capital Outlay(3) 6,469,924 Total Wastewater System Projects $378,393,671 Total Capital Improvement Program $588,146,747 (1) Represents capital expenditures budgeted or planned for the District as reflected in the CIP. (2) Includes reclaimed (irrigation quality) water projects. (3) Represents capital expenditures identified in operating budget and is primarily for vehicles, equipment, machinery, and other related items (recurring minor capital expenditures). Source: Combined Report of the Consulting Engineer and Bond Feasibility Consultant attached hereto as APPENDIX D. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 51 The funding sources for the total CIP recognized for the purpose of preparing the financial projections contained in the Report are as follows: Summary of Capital Improvement Program Funding (1) Total Fiscal Years 2021– 2026 Percent Capital Expenditures: Water System $209,753,076 35.7% Wastewater and IQ Water System 378,393,671 64.3% Total Capital Expenditures $588,146,747 100.0% Anticipated Funding Sources: Rate Revenue (Annual Operations) $10,122,661 1.7% Water System Development Fees(2) 0 0.0% Wastewater System Development Fees(2) 3,260,851 0.6% Water Capital Account(3) 148,934,198 25.3% Wastewater Capital Account(3) 172,140,427 29.3% Grants 3,608,000 0.6% Previously Issued Bonds(4) 2,887,210 0.5% Additional Bonds – Series 2021 Bonds 136,090,000 23.1% Additional Bonds – Series 2025 Bonds(5) 111,103,400 18.9% Additional Subordinated Indebtedness 0 0.0% Operating Reserves / Fleet Mgmt. Reserves(6) 0 0.0% Total System Funding Sources $588,146,747 100.0% (1) Represents capital expenditures budgeted or planned for the System to be appropriated during the Forecast Period; amounts include prior period appropriations (project carryforwards) and departmental (budgetary) capital. (2) Under Florida law, the System Development Fees may only be used to fund capital improvements or capacity that are necessitated by new construction or development. (3) Reflects accounts established by the District that are annually funded by System operatio ns and used to fund renewals, replacements, betterments, and upgrades to the System (pay -as-you-go funding). Amounts shown also include use of available balances in the respective funds as of September 30, 2020 in the amount of $42,296,627 for the Water Capital Account and $91,209,494 for the Wastewater Capital Account. (4) Represents amounts on deposit in the Construction Fund associated with the issuance of the previously issued bonds in accordance with the provisions of the Resolution. (5) Represents Additional Bonds issued in accordance with the Resolution. (6) Reflects expenditures funded annually by operations and represents ongoing purchases of vehicles, equipment, machinery, and other related items (departmental capital). Source: Combined Report of the Consulting Engineer and Bond Feasibility Consultant attached hereto as APPENDIX D. 25694/010/01768238.DOCXv3 52 As can be seen above, approximately 58% of the capital program is anticipated by the County to be funded from internal sources (e.g., Capital Accounts, rate revenues, and other sources). The remainder of the funding for the CIP is primarily associated with the proceeds of the Series 2021 Bonds and Additional Bonds. Historical Operating Results The historical operating results for the System are presented for the fiscal years ended September 30, 2016 through and including 2020. The historical operating results have been prepared based on financial information compiled and provided by the County and information included in the County's Consolidated Annual Financial Reports for such fiscal years. In general, the historical operating results have been prepared in a manner consistent with the requirements of the Resolution relative to the determination of Net Revenues of the System. Therefore, the amounts shown re flect certain differences in the presentation of the financial results when compared to the County's annual financial reports. Specifically, these major differences relate to: (i) the determination of Operating Expenses (i.e., depreciation and amortization expenses not recognized); (ii) the treatment of interest income (i.e., does not include earnings on System Development Fees, Reserve Fund, Renewal and Replacement Fund or Construction Fund balances, if any, which are restricted to such Funds); and (iii) recognition of debt service payments (both principal and interest components) which, as a System requirement, are presented on an accrued (funding) basis. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 53 The historical operating results for the System are summarized as follows: Historical Operating Results(1) Fiscal Year Ended September 30, 2016 2017 2018 2019 2020 Total Sales Revenues(2) $120,672,583 $132,020,703 $142,618,486 $151,462,235 $158,904,501 Miscellaneous Revenue(3) 3,183,568 3,024,317 3,183,879 4,376,987 3,797,319 Total Operating Revenue $123,856,151 $135,045,020 $145,757,365 $155,839,222 $162,701,820 Non-Operating Revenue(4) 1,599,527 1,018,979 10,118,515 7,814,254 6,742,185 Gross Revenues $125,455,678 $136,063,999 $155,875,880 $163,653,476 $169,444,005 Less: Operating Expenses(5) 84,473,620 97,904,195 90,507,901 98,281,008 100,866,414 Net Revenues Available for Debt Service $40,982,058 $38,159,804 $65,367,979(7) $65,372,468 $68,577,591 System Development Fees(7) $13,643,674 $12,457,065 $14,087,562 $15,510,706 $16,324,503 Special Assessment Revenues __0 ___0 0 0 0 Pledged Funds Available for Debt Service $54,625,732 $50,616,869 $79,455,541 $80,883,174 $84,902,094 SENIOR LIEN BONDS DEBT SERVICE COVERAGE(1) Net Revenue Debt Service Coverage Net Revenues Available for Debt Service $40,982,058 $38,159,804 $65,367,979 $65,372,468 $68,577,591 Total Debt Service on Bonds $6,827,648 $6,720,696 $8,577,955 $10,352,598 $12,573,068 Debt Service Coverage (1.00 Required) 6.00x 5.68x 7.62x 6.31x 5.45x AND Pledged Funds Debt Service Coverage Pledged Funds Available for Debt Service $54,625,732 $50,616,869 $79,455,541 $80,883,174 $84,902,094 Total Debt Service on Bonds $6,827,648 $6,720,696 $8,577,955 $10,352,598 $12,573,068 Debt Service Coverage (1.25 Required) 8.00x 7.53x 9.26x 7.81x 6.75x (1) Except as noted below, information was obtained from the County's Comprehensive Annual Financial Report for each respective fiscal year and other financial information provided by the County. Rate covenant coverage requirements are defined in the Resolution. (2) Amounts shown reflect reported revenues recognized by the System for each respective fiscal year, and are based on rates as adopted by the Board during the historical period shown. The Sales Revenues as reported by the County for the historical period shown are a result of a combination of System growth and the implementation of such historical rate adjustments. (3) Miscellaneous revenues include meter tapping charges, customer service fees, reuse irrigation revenues and other similar charges. (4) Amounts shown represent interest income on funds that are deposited in the Revenue Fund, Principal Account, Interest Account and Renewal and Replacement Fund pursuant to the Resolution and the water/wastewater capital accounts (accounts utilized by the District to fund renewal and replacement projects), each of which is available for inclusion in Net Revenues and 25694/010/01768238.DOCXv3 54 for debt service coverage calculation purposes. Operating grant revenues and Insurance reimbursements are also included in this category. (5) Amounts shown do not include depreciation or amortization expenses which are non-cash expenses and not considered as Operating Expense as defined in the Resolution. For the fiscal year ended September 30, 2017, the Operating Expenses include $7,545,041 in one-time weather-related expenses due to the effects of Hurricane Irma. (6) Includes all System Development Fees, only a portion of which are legally available to pay debt service on the District Bonds under Florida law. It is possible that none of these amounts would be legally available to pay debt service on the Bonds and therefore would not be available to be counted for purposes of meeting the rate covenant or Additional Bonds test in the Resolution. See "SECURITY FOR THE BONDS – General" in the Official Statement. Under Florida law, impact fees such as the System Development Fees may be validly imposed against new construction or development in order to fund capital improvements or capacity that are necessitated by such new construction or development or to satisfy debt service for bonds or other obligations issued for such purposes. Proceeds of such System Development Fees may be used only for the capital improvements or capacity attributable to the new construction or development or to pay associated debt service. Source: Collier County Water-Sewer District Projected Operating Results Projected operating results for the System are presented for the Forecast Period, and as shown in the table below are taken from information presented in the Financial Forecast ("Financial Forecast") attached hereto as APPENDIX D. Such projections were prepared in accordance with the flow of funds prescribed by the Resolution and the assumptions and considerations used in the projections as described below. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3 55 System Projected Operating Results and Estimated Annual Debt Service Coverage for the Forecast Period ($000s) Fiscal Year Ending September 30, 2021 2022 2023 2024 2025 2026 Total Sales Revenue(1) $164,415 $174,740 $185,852 $196,907 $204,246 $211,647 Other Operating Revenue(2) 6,360 4,730 4,730 4,728 4,736 4,737 Total Operating Revenue $170,775 $179,470 $190,312 $201,635 $208,982 $216,384 Non-Operating Revenue(3) 2,914 2,619 2,349 2,199 2,190 2,226 Gross Revenues 173,689 182,089 192,661 203,834 211,172 218,610 Operating Expenses(4) 122,762 134,439 144,467 149,749 157,277 159,018 Net Revenues 50,927 47,650 48,194 54,085 53,895 59,592 System Development Fees(5) 14,123 13,407 12,650 11,985 11,246 10,502 Pledged Funds Available for Annual Debt Service 65,051 61,057 60,844 66,070 65,141 70,094 Annual Debt Service(6) 12,566 22,029 15,386 15,374 16,059 25,933 Annual Debt Service Coverage: Coverage – Pledged Funds: Calculated Coverage 5.18x 2.77x 3.95x 4.30x 4.06x 2.70x Required Minimum Coverage 1.25x 1.25x 1.25x 1.25x 1.25x 1.25x AND Coverage – Net Revenues: Calculated Coverage 4.05x 2.16x 3.13x 3.52x 3.36x 2.30x Required Minimum Coverage 1.00x 1.00x 1.00x 1.00x 1.00x 1.00x Subordinated Indebtedness[7] Subordinated Indebtedness Coverage: Total Annual Debt Service and Subordinated Indebtedness Payments 22,827 30,826 24,184 24,172 24,291 32,609 Coverage – Pledged Funds Calculated Coverage(8) 4.81x 3.81x 4.73x 5.33x 5.47x 5.64x Required Minimum Coverage 1.15x 1.15x 1.15x 1.15x 1.15x 1.15x (1) Amount shown includes sales revenues from existing and adopted rates for monthly utility service, including the application of the annual price index rate adjustment as provided in the Rate Resolution (applied during years that no specific rate adjustment was approved by the Board), as in the Report; no additional rate adjustments above the approved rates or the price index rate adjustment have been assumed during the Forecast Period. (2) Amounts shown include other operating revenues such as customer servi ce fees, meter installation fees (Connection Fees), and other revenues derived from the daily operation of the System. (3) Amounts shown include investment income assumed to be earned during the Forecast Period on unrestricted funds which include: the Revenue Fund, accounts included in the Sinking Fund, the Renewal and Replacement Fund, and the Surplus Account (primarily consists of the Water and Wastewater Capital Accounts established by the District for capital expenditure funding purposes); does not include investment 25694/010/01768238.DOCXv3 56 income on System Development Fee funds or deposits on account in the 2021 Project Account or future funds established from the proceeds of Additional Bonds. (4) Pursuant to the Resolution, such amounts do not include depreciation or amortization expenses which are non-cash in nature. (5) Includes all System Development Fees, only a portion of which may legally available to pay debt service on the Bonds under Florida law. Under Florida law, impact fees such as the System Development Fees may be validly imposed against new construction or development in order to fund capital improvements or capacity that are necessitated by such new construction or development or to satisfy debt service for bonds or other obligations issued for such purposes. Proceeds of such System Development Fees may be used only for the capital improvements or capacity attributable to the new construction or development to pay associated debt service. Amounts shown include System Developments Fees assumed to be received during the Forecast Period from new development requesting capacity and Investment Income on estimated fund balances. (6) Amounts shown reflect the Annual Debt Service payment for the Outstanding Bonds, the Series 2021 Bonds and Additional Bonds (i.e., the Series 2025 Bonds) issued pursuant to the Resolution which are assumed to be outstanding during each Fiscal Year of the Forecast Period. Amounts shown based on a "cash basis" of reporting (when payments are required to be made to bondholders and not when deposits are made by the District to the Principal and Interest Accounts within the Sinking Fund). (7) Amounts shown reflect the debt service payments for the 2016 Subordinate Note which is subordinate to the Bonds that are assumed to be outstanding during each fiscal year of the Forecast Period. Amounts shown based on a "cash basis" of reporting (when payments are required to be made to holders of the notes and not when deposits are made by the District to a note-repayment sinking fund). (8) The Subordinated Indebtedness coverage for the Forecast Period was determined as follows: 2021 2022 2023 2024 2025 2026 Pledged Funds Available $65,051 $61,057 $60,844 $66,070 $65,141 $70,094 Less Annual Debt Service plus 1.25 Coverage (15,707) (27,536) (19,232) (19,217) (20,074) (32,416) Amounts Pledged for Subordinate. Indebtedness $49,344 $33,521 $41,612 $46,853 $45,067 $37,678 Total Subordinated Indebtedness 10,261 8,797 8,798 8,798 8,232 6,676 Debt Service Coverage – Calculated 4.81x 3.81x 4.73x 5.33x 5.47x 5.64x Source: Combined Report of the Consulting Engineer and Bond Feasibility Consultant attached hereto as APPENDIX D. See "APPENDIX D – Consulting Engineers and Financial Feasibility Report" attached hereto for a description of the principal considerations and assumptions used by the Financial Feasibility Consultant regarding projected operating results, which such considerations and assumptions should be read in their entirety. Conclusions of the Consulting Engineer Based upon the principal considerations and assumptions and the results of studies and analyses as summarized in their report, which should be read in its entirety and in conjunction with the following, AECOM USA, Inc.the Consulting Engineer is of the opinion that: 1. The System facilities are adequately maintained following manufacturers' recommendations and more stringent District standards. 25694/010/01768238.DOCXv3 57 2. The District personnel have the proper qualifications and training to maintain licenses and certifications required under the Florida Administrative Code (FAC). 3. The existing District facilities along with the facilities, improvements, and additions proposed in the Fiscal Years 2022 – 2026 Capital Improvement Plan (CIP) can reasonably provide potable water to the service area through Fiscal Year 2023, wastewater through 2040, and irrigation quality (IQ) services through 2040. However, additional improvements are currently being identified in the Master Plan to address any deficiencies noted in the Engineer's Report for the potable water system through the 2040 planning period. 4. All required permits for operating the system are current, renewal applications are submitted in a timely manner and the District remains compliant with regulatory agencies. Conclusions of the Financial Feasibility Consultant Based upon the principal considerations and assumptions and the results of studies and analyses as summarized in their report, which should be read in its entirety and in conjunction with the following, Raftelis Financial Consultants, Inc., the Financial Feasibility Consultant is of the opinion that: 1. The forecasted growth in customer accounts, usage and corresponding rate revenues were developed based on a of the System represent reasonable and attainable projections for the purposes of the Report based on current economic conditions and recent development plans for the service area. a review of recent historical trends and anticipated development or growth as discussed with the County. It should be noted that based on reported billing statistics through September 30, 2020 the County observed greater re sidential and reduced commercial water sales which is believed by the County to be due to the effects of COVID- 19 associated with stay-at-home orders and reduced business operations. However, the Fiscal Year 2020 water demands remained above recent historical levels due to continued System growth and residential demand increases outpacing commercial declines. Recognizing that billed wastewater flows are predicated on metered water sales, the observation also extends to wastewater system sales. For purposes of the Report, it was assumed that residential and commercial demands would gradually return to more typical usage patterns by the Fiscal Year 2022. The projected growth in System customers, applicable usage, and revenues during the Forecast Period for the System are considered to represent reasonable projections based on discussions with the County and on recent trends in customers served / billed for the purposes of the Report. 2. The projections of the Operating Expenses were presented to the County and are considered to represent reasonable projections for the purposes of the Report. 3. The System revenues estimated to be earned during the Forecast Period from i) the County-approved water, wastewater, and irrigation quality water retail rates, which also includes and assumes the annual application of a price index (inflationary) rate adjustment, as contained in Resolution No. ______ adopted by the Board on June __, 2021 for the District (hereinafter defined as the "Rate Resolution") should be sufficient to pay the projected Operating Expenses, pay the estimated Annual Debt Service on the Outstanding Bonds as hereinafter defined, the anticipated Series 2021 Bonds, and projected Additional Parity Bonds and the debt service payments on the Subordinated Indebtedness 25694/010/01768238.DOCXv3 58 coming due in such years, and make the projected deposits to the Renewal and Replacement Fund and the Surplus Fund which is available for paying the cost of major extensions, improvements or additions to, or the replacement or renewal of capital assets of the System, or extraordinary repairs of the System and continue to be in compliance with the rate covenant contained in the Resolution. The Board has annually adjusted the rates associated with the application of previously approved adjustments or through the application of a price index factor for the Fiscal Years 2014 through 2021 (in accordance with the provisions of the rate resolution in effect at that time) and has adopted projected rates and indexing provisions to be placed in effect during the Forecast Period. 4. Based on financial information as provided by the County, which includes, but is not limited to, the Comprehensive Annual Financial Reports for the System, the Pledged Funds of the System have historically (for the past five Fiscal Years ended September 30, 2020 as contained in the Report) been sufficient to pay the i) Operating Expenses; ii) the Annual Debt Service on the Outstanding Bonds as hereinafter defined; iii) debt service payments on Subordinated Indebtedness, if any; and iv) deposits to the Renewal and Replacement Fund and in accounts maintained in the Surplus Fund by the County, which is available for paying the cost of extensions, enlargements, or additions to, or the replacement of capital assets of the System or for unusual or ext raordinary repairs to the System and have been in compliance with the rate covenant contained in the Resolution. 5. The District's rates currently in effect for water and wastewater service are considered comparable to charges for similar service provided by other publicly owned utilities located in proximity to the County in the southwestern portion of Florida. The projected implementation of the approved rate adjustments or estimated price index adjustments assumed for the Forecast Period as represented in the Report is not expected by the Feasibility Consultant and the Utilities Department to negatively affect the customer growth or sales (billed water and wastewater use or flow) assumed for the Forecast Period or the overall the competitiveness of the County's monthly user rates over the Forecast Period. The Board has the ability to increase the rates above the rates presented in the rate implementation plan as contained in the Rate Resolution, which were assumed for the projections. 6. The Water and Wastewater System Development Fees (the "System Development Fees") are impact fees and are comparable to the fees charged by neighboring utilities. The Feasibility Consultant considers the System Development Fees to be reasonable, which were based on the utility plant-in-service as reported in the County's Comprehensive Annual Financial Report and the near-term capital requirements of the System contained in the System's adopted capital improvement plan at the time of fee determination. Based on discussions with the Utilities Department staff, the application of the System Development Fees is not expected to negatively affect System growth. RISK FACTORS The future financial condition of the System could be affected adversely by, among other thi ngs, legislation, environmental and other regulatory actions as set forth above, changes in demand for services, economic conditions, demographic changes, and litigation. In addition to those items listed in the 25694/010/01768238.DOCXv3 59 preceding sentence, some of the possible changes in the future may include, but not be limited to, the following: 1. The County's water and sewer facilities are subject to regulation and control by numerous federal and state governmental agencies. Neither the District nor its consultants can predict future policies such agencies may adopt. Future changes could result in the District having to discontinue operations at certain facilities or to make significant capital expenditures and could generate substantial litigation. 2. Estimates of revenues and expenses contained in this Official Statement and the realization of such estimates, are subject to, among other things, future economic and other conditions which are unpredictable and which may adversely affect such revenues and expenses, and in turn , the payment of the Series 2021 Bonds. 3. While the District expects to complete the five-year capital improvement plan on time and within budget, no assurance can be given to potential investors that the District will in fact be able to meet such expectations. The timing and costs of completing the five-year capital improvement plan are subject to amendment from year to year subject to market conditions and demand for water and sewer services. 4. The outbreak of the highly contagious COVID-19 pandemic in the United States in March 2020 has generally had a negative financial impact on local, state and national economies around the country, including significantly increased unemployment in certain sectors including especially travel, hospitality and restaurants. COVID-19 is a respiratory virus which was first reported in China and thereafter spread around the world, including the United States, and is considered a Public Health Emergency of International Concern by the World Health Organization. This led to quarantine and other "social distancing" measures throughout the United States. These measures included recommendations and warnings to limit non-essential travel and promote telecommuting. As a result of the spread of COVID -19, the Governor of Florida declared a state of emergency on March 9, 2020. Additionally, the Governor executed various other executive orders which, among other things, (i) closed bars and restaurants to dine -in customers, (ii) suspended vacation rentals and (iii) issued a mandat ory "safer at home" order for the entire State effective April 3, 2020 through April 30, 2020. On April 29, 2020, the Governor announced the first phase of reopening businesses which began on May 4, 2020 and allowed for certain businesses to open at 25% capacity. On May 15, 2020, the Governor announced an expanded phase one opening and on June 3, 2020, the Governor announced most of the State would enter phase two of reopening effective June 5, 2020. On September 25, 2020, the Governor announced the State would enter phase three of reopening effective immediately which effectively lifted all COVID-19 restrictions on restaurants and other businesses. In December, 2020, COVID-19 vaccines were approved and began to be administered under emergency use authorizations. The County began scheduling individuals for the first dose of a two dose series of the COVID-19 vaccines in January, 2021 and has since also been scheduling individuals for the single-dose Johnson & Johnson vaccine. The efficacy of the vaccines could be impacted by the spread of new variants of COVID-19, which may be more highly transmissible. While many of the effects of COVID-19 may be temporary, it has altered the behavior of businesses and people in a manner resulting in negative impacts on global and local economies. The continued existence or spread of COVID-19 and measures taken to prevent or reduce it, have adversely impacted state, national and global economic activities and, accordingly, could adversely impact the financial condition, performance and credit ratings of the County. 25694/010/01768238.DOCXv3 60 The County has received funds from the Coronavirus Aid, Relief, and Economic Security Act from the State in the amount of approximately $16.8 million, with a total award of $67.2 million. Additionally, the County was awarded approximately $9.5 million by the Federal Transit Administration for programs related to COVID-19. 5. The State is naturally susceptible to the effects of extreme weather events and natural disasters including floods, droughts, and hurricanes, which could result in negative economic impacts on coastal communities such as the County. Such effects can be exacerbated by change in climate. The occurrence of such extreme weather events could damage the local infrastructure that provides essential services to the County. The economic impacts resulting from such extreme weather events could include a loss of property values, a decline in revenue base, and escalated recovery costs. No assurance can be given as to whether future extreme weather events will occur that could materially impair the financial condition of the County. In order to address the ongoing challenges related to climate change, extreme weather events, and sea level rise, the County is leading or participating in multiple efforts including, but not limited to: • Partnership in ongoing NOAA study, specific to the County, providing scenario modeling and end-user decision tools related to sea-level rise and storm surge and study of potential natural features that may serve as enhanced protective features against the same threats. • Partnership with the Army Corp. of Engineers on a long-term Coastal Resilience Program for the County, including beaches, dunes, and back bays with recommendations on both natural and engineered protective solutions. • Partnership with the South Florida Water Management District to model and survey critical natural areas downstream of the managed stormwater systems to understand functionality, challenges and need for maintenance as these areas serve as critical stormwater conveyances and outfalls. • Development of a stormwater structure automation program, starting with stormwater structures at the freshwater/saltwater interface in order to provide better flood protection and manage stormwater in combination with storm events and higher than average tides. • Installation of additional infrastructure components to address tidal backflow in low -lying areas. • Enhanced funding for the maintenance of critical stormwater infrastructure. • Update of the adopted rate of rise (sea level rise) calculation used for planning purposes through the Floodplain Management Plan. • Accommodations for sea level rise projections in all capital project planning and design. • Development of plan for completion of Vulnerability Assessment tasks and moving forward with Adaptation Planning. 6. The County, like many other governmental entities, relies on a technology environment to conduct its operations. As such, it may face multiple cybersecurity threats including but not limited to, hacking, viruses, malware and other attacks on computer or other sensitive digital systems and networks. In 25694/010/01768238.DOCXv3 61 order to protect data, the County currently has $10 million of cyber liability coverage that provides for recoveries in the event of a data breach, virus or other cyberattack. Other coverages included within the policy are security breach notification and remediation expenses, crisis management services expenses, extortion expenses, computer fraud, reputational harm and social engineering. In addition, the Collier County Clerk of the Circuit Court and Comptrollers ("Clerk") agency has $5 million of cyber liability coverage with the same lines of coverage that the County maintains. Both the County and the Clerk agencies require staff training in the area of cyberattack and data security in order to maintain employee access to their respective networks. INVESTMENT POLICY The moneys held in the funds and accounts under the Resolution may only be invested in Authorized Investments (a s defined in the Resolution). The investment of surplus funds is currently governed by the provisions of the County's Investment Policy, established by the Board under Section 218, Florida Statutes. The policy authorizes investment of surplus public funds in the permitted investments described in Section 218.415, Florida Statutes. Pursuant to a Board resolution, the Clerk of the Circuit Court and Comptroller of Collier County and Clerk to the District (the "Clerk") administers to the investment policy for investment of such surplus funds. The investment policy establishes guidelines as to the type, maturity, composition and risk relating to the County's investment portfolio. Permitted investments pursuant to such investment policy include the following: 1. U.S. Treasury & Government Guaranteed - U.S. Treasury obligations, and obligations the principal and interest of which are backed or guaranteed by the full faith and credit of the U S. Government. 2. Federal Agency/GSE - Debt obligations, participations or other instruments issued or fully guaranteed by any U.S. Federal agency, instrumentality or government -sponsored enterprise (GSE). 3. Corporates — U.S. dollar denominated corporate notes, bonds or other debt obligations issued or guaranteed by a domestic corporation, financial institution, non-profit, or other entity. 4. Municipals — Obligations, including both taxable and tax-exempt. issued or guaranteed by any State, territory or possession of the United States, political subdivision, public corporation, authority, agency board, instrumentality or other unit of local government of any State or territory. 5. Agency Mortgage Backed Securities - Mortgage-backed securities (MBS), backed by residential, multi-family or commercial mortgages, that are issued or fully guaranteed as to principal and interest by a U.S. Federal agency or government sponsored enterprise, including but not limited to pass-throughs, collateralized mortgage obligations (CMOs) and REMICs. 6. Non-Negotiable Certificate of Deposits - Non-negotiable interest bearing time certificates of deposit, or savings accounts in banks organized under the laws of this state or in 25694/010/01768238.DOCXv3 62 national banks organized under the laws of the United States and doing business in this state, provided that any such deposits are secured by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes. 7. Depository Bank Account Now accounts in banks organized under the laws of this state or in national banks organized under the laws of the United States and doing business in this state, provided that any such deposits are secured by the Florida Security for Public Deposits Act, Chapter 280, Florida Statutes. 8. Commercial Paper — U.S. dollar denominated commercial paper issued or guaranteed by a domestic corporation, company, financial institution, trust or other entity, including both unsecured debt and asset-backed programs. 9. Repurchase Agreements - Repurchase agreements (Repo or RP) that meet the following requirements: a. Must be governed by a written SIFMA Master Repurchase Agreement which specifies securities eligible for purchase and resale, and which provides the unconditional right to liquidate the underlying securities should the Counterparty default or fail to provide full timely repayment. b. Counterparty must be a Federal Reserve Bank, a Primary Dealer as designated by the Federal Reserve Bank of New York, or a nationally chartered commercial bank. c. Securities underlying repurchase agreements must be delivered to a third party custodian under a written custodial agreement and may be of deliverable or tri - party form. Securities must be held in the County's custodial account or in a separate account in the name of the County. d. Acceptable underlying securities include only securities that are direct obligations of, or that are fully guaranteed by, the United States or any agency of the United States, or U.S. Agency-backed mortgage related securities. e. Underlying securities must have an aggregate current market value of at least 102% (or 100% if the counterparty is a Federal Reserve Bank) of the purchase price plus current accrued price differential at the close of each business day. f. Final term of the agreement must be 1 year or less. 10. Money Market Funds - Shares in open-end and no-load money market mutual funds provided such funds are registered under the Investment Company Act of 1940 and operate in accordance with Rule 2a-7. 11. Fixed-Income Mutual Funds - Shares in open-end and no-load fixed-income mutual funds whose underlying investments would be permitted for purchase under this policy and all its restrictions 12. Local Government Investment Pools — State, local government or privately-sponsored investment pools that are authorized pursuant to state law 13. The Florida Local Government Surplus Funds Trust Funds ("Florida Prime"). 25694/010/01768238.DOCXv3 63 General Investment and Portfolio Limits 1. General investment limitations: a. Investments must be denominated in U S dollars and issued for legal sate in U.S. markets. b. Minimum ratings are based on the highest rating by any one Nationally Recognized Statistical Ratings Organization ("NRSRO"), unless otherwise specified. c. All limits and rating requirements apply at time of purchase . d. Should a security fall below the minimum credit rating requirement for purchase, the Clerk will notify the Board e The maximum maturity (or average life for MBS/ABS) of any Investment is 5 years. Maturity and average life are measured from settlement date. The final maturity date can be based on any mandatory call, put, pre-refunding date, or other mandatory redemption date. 2. General portfolio limitations: a. The maximum effective duration of the aggregate portfolio is 3 years. 3. Investment in the following are permitted, provided they meet all other policy requirements: a. Callable, step-up callable, called, pre-refunded puttable and extendable securities. as long as the effective final maturity meets the maturity limits for the sector. b. Variable-rate and floating-rate securities. c. Subordinated secured and covered debt, if it meets the ratings requirements for the sector. d. Zero coupon issues and strips, excluding agency mortgage-backed Interest-only structures (I/Os). e. Treasury TIPS 4. The following are NOT PERMITTED investments, unless specifically authorized by statute and with prior approval of the governing body: a. Trading for speculation. b. Derivatives (other than callables and traditional floating or variable -rate instruments). c. Mortgage-backed interest-only structures (I/Os). d. Inverse or leveraged floating-rate and variable-rate instruments. e. Currency, equity, index and event-linked notes (e.g. range notes), or other structures that could return less than par at maturity. f. Private placements and direct loans, except as may be legally permitted by Rule 144A or commercial paper issued under a 4(2) exemption from registration . g. Convertible, high yield, and non-U.S. dollar denominated debt. h. Short sales. i. Use of leverage. j. Futures and options. 25694/010/01768238.DOCXv3 64 k. Mutual funds, other than fixed-income mutual funds and ETFs, and money market funds. l. Equities, commodities, currencies and hard assets. Any and all exceptions to the investment policy requ ire a vote of the majority of Board. Furthermore, the Board may revise the aforementioned investment policy from time to time. LEGAL MATTERS Certain legal matters in connection with the issuance of the Series 2021 Bonds are subject to an approving legal opinion of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel, whose approving opinion (a form of which is attached hereto as "APPENDIX E – Form of Bond Counsel Opinion") will be available at the time of delivery of the Series 2021 Bonds. The actual legal opinion to be delivered by Bond Counsel may vary from that text if necessary to reflect facts and law on the date of delivery. Such opinion will speak only as of its date, and subsequent distribution of it by recirculation of this Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinion subsequent to its date. Bond Counsel has not been engaged to, nor has it undertaken to, review (1) the accuracy, completeness or sufficiency of this Official Statement or any other offering material relating to the Series 2021 Bonds; provided, however, that Bond Counsel will render an opinion to the Underwriter of the Series 2021 Bonds (upon which opinion only the Underwriter may rely) relating to the fairness of the presentation of certain statements contained herein under the heading "TAX EXEMPTION" and certain statements which summarize provisions of the Resolution, the Series 2021 Bonds, and federal tax law, and (2) the compliance with any federal or state law with regard to the sale or distribution of the Series 2021 Bonds. Certain legal matters will be passed upon by Jeffrey A. Klatzkow, Esq., District Attorney, and by Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel to the District. LITIGATION [There is no pending or, to the knowledge of the County or the District, any threatened litigation against the County or the District of any nature whatsoever which in any way questions or affects the validity of the Series 2021 Bonds, or any proceedings or transactions relating to their issuance, sale, execution, or delivery, or the adoption of the Resolution, or the pledge of the Pledged Funds. Neither the creation, organization or existence, nor the title of the present members of the governing body of the District or the Board, or other officers of the District or the County is being contested. The County and the District experience other claims, litigation, and various legal proceedings which, individually are not expected to have a material adverse effect on the operations or financial condition of the District, but may, in the aggregate, have a material impact thereon. In the opinion of the District Attorney, however, the County or the District will either successfully defend such actions or otherwise resolve such matters without any material adverse consequences on the financial condition of the County or the District.] DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Pursuant to Section 517.051, Florida Statutes, as amended, no person may directly or indirectly offer or sell securities of the County or the District except by an offering circular containing full and fair 25694/010/01768238.DOCXv3 65 disclosure of all defaults as to principal or interest on its obligations since December 31, 1975, as provided by rule of the Office of Financial Regulation within the Florida Financial Services Commission (the "FFSC"). Pursuant to administrative rulemaking, the FFSC has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the County or the District, and certain additional financial information, unless the District believes in good faith that such information would not be considered material by a reasonable investor. Neither the County nor the District is not and has not been in default on any bond issued since December 31, 1975 that would be considered material by a reasonable investor in the Series 2021 Bonds. Neither the County nor the District has undertaken an independent review or investigation of securities for which it has served as conduit issuer. Neither the County nor the District believes that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2021 Bonds because the County or the District would not have been obligated to pay the debt service on any such securities except from payments made to it by the private companies on whose behalf such securities were issued and no funds of the County or the District would have been pledged or used to pay such securities or the interest thereon. TAX MATTERS General The Code establishes certain requirements which must be met subsequent to the issuance of the Series 2021 Bonds in order that interest on the Series 2021 Bonds be and remain excluded from gross income for purposes of federal income taxation. Non-compliance may cause interest on the Series 2021 Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2021 Bonds, regardless of the date on which such non-compliance occurs or is ascertained. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2021 Bonds and the other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Resolution with respect to the Series 2021 Bonds to comply with such requirements in order to maintain the exclusion from federal gross income of the interest on the Series 2021 Bonds. In the opinion of Bond Counsel, assuming compliance with certain covenants, under existing laws, regulations, judicial decisions and rulings, interest on the Series 2021 Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Series 2021 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax. Except as described above, Bond Counsel will express no opinion regarding other federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of Series 2021 Bonds. Prospective purchasers of Series 2021 Bonds should be aware that the ownership of Series 2021 Bonds may result in collateral federal income tax consequences, including (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry Series 2021 Bonds; (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by fifteen percent (15%) of certain items, including interest on Series 2021 Bonds; (iii) the inclusion of interest on Series 2021 Bonds in earnings of certain foreign corporations doing business in the United States for purposes of the branch profits tax; (iv) the inclusion of interest on Series 2021 Bonds in passive income subject to federal income taxation of certain Subchapter S corporations with Subchapter C earnings and profits at the close 25694/010/01768238.DOCXv3 66 of the taxable year; and (v) the inclusion of interest on Series 2021 Bonds in "modified adjusted gross income" by recipients of certain Social Security and Railroad Retirement benefits for the purposes of determining whether such benefits are included in gross income for federal income tax purposes. As to questions of fact material to the opinion of Bond Counsel, Bond Counsel will rely upon representations and covenants made on behalf of the City, certificates of appropriate officers and certificates of public officials (including certifications as to the use of proceeds of the Series 2021 Bonds and of the property financed or refinanced thereby), without undertaking to verify the same by independent investigation. PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2021 BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE BONDHOLDERS, INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES DESCRIBED ABOVE. PROSPECTIVE SERIES 2021 BONDHOLDERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. Information Reporting and Backup Withholding Interest paid on tax-exempt bonds such as the Series 2021 Bonds is subject to information reporting to the Internal Revenue Service in a manner similar to interest paid on taxable obligations. This reporting requirement does not affect the excludability of interest on the Series 2021 Bonds from gross income for federal income tax purposes. However, in conjunction with t hat information reporting requirement, the Code subjects certain non-corporate owners of Series 2021 Bonds, under certain circumstances, to "backup withholding" at the rate specified in the Code with respect to payments on the Series 2021 Bonds and proceeds from the sale of Series 2021 Bonds. Any amount so withheld would be refunded or allowed as a credit against the federal income tax of such owner of Series 2021 Bonds. This withholding generally applies if the owner of Series 2021 Bonds (i) fails to furnish the payor such owner's social security number or other taxpayer identification number ("TIN"), (ii) furnished the payor an incorrect TIN, (iii) fails to properly report interest, dividends, or other "reportable payments" as defined in the Code, or (iv) under certain circumstances, fails to provide the payor or such owner 's securities broker with a certified statement, signed under penalty of perjury, that the TIN provided is correct and that such owner is not subject to backup withholding. Prospective purchasers of the Series 2021 Bonds may also wish to consult with their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding. Other Tax Matters During recent years, legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2021 Bonds. In some cases, these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar to the Series 2021 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2021 Bonds and their market value. No assurance can be given that legislative proposals will not be enacted that would apply to, or have an adverse effect upon, the Series 2021 Bonds. 25694/010/01768238.DOCXv3 67 Prospective purchasers of the Series 2021 Bonds should consult their own tax advisors as to the tax consequences of owning the Series 2021 Bonds in their particular state or local jurisdiction and regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. Tax Treatment of Original Issue Discount Under the Code, the difference between the maturity amount of the Series 2021 Bonds maturing on ______________ 1, ____, through and including ________________ 1, ____ (collectively, the "Discount Bonds"), and the initial offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at which price a substantial amount of the Discount Bonds of the same maturity and, if applicable, interest rate, was sold is "original issue discount." Original issue discount will accrue over the term of the Discount Bonds at a constant interest rate compounded periodically. A purchaser who acquires the Dis count Bonds in the initial offering at a price equal to the initial offering price thereof to the public will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount ac cruing during the period he or she holds the Discount Bonds, and will increase his or her adjusted basis in the Discount Bonds by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or disposition of the Discount Bonds. The federal income tax consequences of the purchase, ownership and redemption, sale or other disposition of the Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules whi ch differ from those above. Bondholders of the Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, redemption or other disposition of the Discount Bonds and with respect to the state and local tax consequences of owning and disposing of the Discount Bonds. Tax Treatment of Bond Premium The difference between the principal amount of the Series 2021 Bonds maturing on ______________ 1, ____, through and including ________________ 1, ____ (collectively, the "Premium Bonds"), and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity and, if applicable, interest rate, was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each of the Premium Bonds, which ends on the earlier of the maturity or call date for each of the Premium Bonds which minimizes the yield on such Premium Bonds to the purchaser. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Premium Bonds. Bondholders of the Premium Bonds are advised that they should consult with their own tax advisors with respect to the state and local tax consequences of owning such Premium Bonds. 25694/010/01768238.DOCXv3 68 RATINGS Fitch Ratings, Inc. ("Fitch") and Moody's Investors Service, Inc. ("Moody's") have assigned their ratings of "___" (_______) and "___," respectively, to the Series 2021 Bonds. The ratings reflect only the views of said rating agencies and an explanation of the ratings may be obtained only from said rating agencies. There is no assurance that such ratings will continue for any given period of time or that they will not be lowered or withdrawn entirely by the rating agencies, or any of them, if in their judgment, circumstances so warrant. A downward change in or withdrawal of any of such ratings, may have an adverse effect on the market price of the Series 2021 Bonds. An explanation of the significance of the ratings can be received from the rating agencies, at the following addresses: Fitch Ratings, Inc., One State Street Plaza, New York, New York 10004 and Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007. FINANCIAL ADVISOR PFM Financial Advisors LLC, Coral Gables, Florida, is the Financial Advisor to the District with respect to the sale of the Series 2021 Bonds. The Financial Advisor has assisted the District in the preparation of this Official Statement and has advised the District as to other matters relating to the planning, structuring and sale of the Series 2021 Bonds. The Financial Advisor will not engage in any underwriting activities with regard to the issuance and sale of the Series 2021 Bonds. The Financial Advisor is not obligated to undertake and has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. PFM Financial Advisors LLC is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities. AUDITED FINANCIAL STATEMENTS The general purpose financial statements of the County for the fiscal year ending September 30, 2020 of Clifton Larson Allen LLP, Naples, Florida (the "Auditor") are included in "APPENDIX C – Collier County Comprehensive Annual Financial Report For Fiscal Year Ended September 30, 2020" hereto. Such statements speak only as of September 30, 2020. The consent of the County's auditor to include in this Official Statement the aforementioned report was not requested, and such report of the County is provided only as publicly available documents. The auditor was not requested nor did they perform any procedures with respect to the preparation of this Official Statement or the information presented herein. The County expects the Comprehensive Annual Financial Report for the fiscal year ended September 30, 2020 to be available prior to the delivery of the Series 2021 Bonds, to be included in a supplement to this Official Statement. The Series 2021 Bonds are payable solely from Pledged Funds in the manner and to the extent as described in the Resolution and herein and are not otherwise secured by, or pay able from, the general revenues of the District. See "SECURITY FOR THE BONDS" herein. Such Comprehensive Annual Financial Report is presented for general information purposes only. The District covenanted and agreed in the Resolution to, immediately after the close of each fiscal year, cause the financial statements relating to the System to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, 25694/010/01768238.DOCXv3 69 and shall require such accountants to complete their report on the annual financial statements in accordance with applicable law. The annual financial statements shall be prepared in conformity with generally accepted accounting principles consistently applied. UNDERWRITING The Series 2021 Bonds are being purchased by ___________________ (the "Underwriter") at an aggregate purchase price of $_______________ (which equals the principal amount of the Series 2021 Bonds, [plus/less] a net original issue [premium/discount] of $______________, less the Underwriter's discount of $_________). The Underwriter's obligations are subject to certain conditions precedent contained in the Official Notice of Sale which was prepared by the District , and it will be obligated to purchase all of the Series 2021 Bonds if any Series 2021 Bonds are purchased. The Series 2021 Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2021 Bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriter. CONTINGENT FEES The District has retained Bond Counsel, the Financial Advisor and Disclosure Counsel with respect to the authorization, sale, execution and delivery of the Series 2021 Bonds. Payment of the fees of such professionals and an underwriting discount to the Underwriter is each contingent upon the issuance of the Series 2021 Bonds. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2021 Bonds upon an event of default under the Resolution are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically the federal bankruptcy code, the remedies specified by the Resolution and the Series 2021 Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2021 Bonds, including Bond Counsel's approving opinion, will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted b efore or after such delivery. See "APPENDIX B – Composite Resolution" attached hereto for a description of events of default and remedies. CONTINUING DISCLOSURE The District has covenanted for the benefit of the Series 2021 Bondholders to provide certain financial information and operating data relating to the District and the Series 2021 Bonds in each year, and to provide notices of the occurrence of certain enumerated material events. The District has agreed to file annual financial information and operating data and the audited financial statements with each entity authorized and approved by the SEC to act as a repository (each a "Repository") for purposes of complying with Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934 (the "Rule"). Effective July 1, 2009, the sole Repository is the Municipal Securities Rulemaking Board ("MSRB"). The District has agreed to file notices of certain enumerated material events, when and if they occur, with the Repository. The specific nature of the financial information, operating data, and of the type of events which trigger a disclosure obligation, and other details of the undertaking are described in "APPENDIX F - Form 25694/010/01768238.DOCXv3 70 of Continuing Disclosure Certificate" attached hereto. The Continuing Disclosure Certificate shall be executed by the District prior to the issuance of the Series 2021 Bonds. These covenants have been made in order to assist the Underwriter in complying with the continuing disclosure requirements of the Rule. With respect to the Series 2021 Bonds, no party, other than the District, is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the Rule. The District and the County fully anticipate satisfying all future disclosure obligations required pursuant to the Rule. The County has entered into a contract with Digital Assurance Certification, LLC to provide continuing disclosure dissemination agent services for all of its outstanding bond issues , including those of the District. Further, in order to demonstrate its continued commitment to continuing disclosure best practices, the District has included disclosure of several non-material instances of late filings in this Official Statement in the interest of being transparent. All relate to b ond insurer ratings upgrades and/or downgrades. The bond insurer upgrades and/or downgrades occurred on the following dates: March 18, 2014 and May 21, 2014. All such bond insurer rating changes filings have since been made as it relates to bond issues that remain outstanding as of the date hereof. The underlying ratings upgrade of the Water and Sewer Revenue Bonds, Series 2006 on June 4, 2014 by Fitch was filed promptly as required by the related continuing disclosure undertaking, but not within 10 business days. It was filed 3 business days late on June 23, 2014. In summary, the County and the District do not believe that the disclosures described in this paragraph to be material in complying with any prior agreements to provide continuing disclosure information pursuant to the Rule. ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The references, excerpts, and summaries of all documents, statutes, and information concerning the District or the County and certain reports and statistical data referred t o herein do not purport to be complete, comprehensive and definitive and each such summary and reference is qualified in its entirety by reference to each such document for full and complete statements of all matters of fact relating to the Series 2021 Bonds, the security for the payment of the Series 2021 Bonds and the rights and obligations of the owners thereof and to each such statute, report or instrument. Copies of such documents may be obtained from either the office of Crystal K. Kinzel, Clerk of the Circuit Court and Comptroller of Collier County and Clerk to the District, Collier County Courthouse Annex, 3315 Tamiami Trail East, 2nd Floor, Board Minutes and Records Department, Naples, Florida 34112-5324, phone (239) 252-7240 or the County's Financial Advisor, PFM Financial Advisors LLC, 2222 Ponce de Leon Boulevard, Third Floor, Coral Gables, Florida 33134. Any statements made in this Official Statement involving matters of opinion or of estimates, 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 will be realiz ed. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2021 Bonds. The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety together with all foregoing statements. 25694/010/01768238.DOCXv3 71 AUTHORIZATION OF OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized and approved by the District. At the time of delivery of the Series 2021 Bonds, the District will furnish a certificate to the effect that nothing has come to their attention which would lead it to believe that the Official Statement (other than information herein related to DTC, the book-entry only system of registration and the information contained under the caption "TAX EXEMPTION" and as to which no opinion shall be expressed), as of its date and as of the date of delivery of the Series 2021 Bonds, contains an untrue statement of a material fact or omits to state a material fact which should be included therein for the purposes for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. COLLIER COUNTY WATER-SEWER DISTRICT By: Chairman, Board of County Commissioners of Collier County, Florida, as the Ex-Officio Chairman of the Governing Board of the Collier County Water-Sewer District Approved as to form and legal sufficiency: County Attorney 25694/010/01768238.DOCXv3} APPENDIX A GENERAL INFORMATION REGARDING COLLIER COUNTY, FLORIDA 25694/010/01768238.DOCXv3A-1 APPENDIX A GENERAL INFORMATION REGARDING COLLIER COUNTY, FLORIDA The following information concerning Collier County, Florida (the "County") has been supplied by the County and is included only for purposes of supplying general information regarding the County. General Information The County was established in 1923 by the Legislature of the State of Florida (the "State") from portions of Lee and Monroe Counties. Its territorial limits, as they presently exist, contain approximately 2,026 square miles. In terms of land area, it is the largest county in the State. T he County is located on the southwest coast of the Florida peninsula directly west of the Miami -Fort Lauderdale area. In 2018, the County had an estimated population of 383,166. Part of the Everglades National Park, the United States' only subtropical national park, comprises a portion of the County. Principal industries within the County include wholesale and retail trade, tourism, medical services, agriculture, forestry, fishing, cattle ranching and construction. Board of County Commissioners The Board of County Commissioners (the "Board") is the principal legislative and governing body of the County. The Board consists of five County Commissioners; one from each of the five districts elected for terms of four years. All of the County Commissioners are residents of the County. The current members of the Board and their expiration of terms of office are: Commissioner Office Term Expires Penny Taylor Chairman November, 2022 William L. McDaniel, Jr. Vice Chairman November, 2024 Rick LoCastro Commissioner November, 2024 Burt L. Saunders Commissioner November, 2024 Andy Solis Commissioner November, 2022 County Manager The chief administrative official of the County is the County Manager. This official is directly responsible to the Board for administration and operation of four administrative divisions under the Board and for execution of all Board policies. The County Manager directs the administrative divisions for Growth Management, Public Services, Public Utilities, and Administrative Services. The County Manager is also responsible to the Board for the preparation of budgets and for the control of expenditures of departments under his supervision throughout the budget year. Budget Process The County Manager's Director of Corporate, Financial and Management Services (the "Director") initiates the budget planning process in January with budget policy discussions among key members of the fiscal and administrative leadership team. These discussions culminate in the presentation and adoption of budget policy and guidance by the Board in February. County division heads and elected officers submit their proposed expenditures beginning in April for compilation by the Director no later than July 1 of each year and each submission is matched against available revenues. A balanced, proposed 25694/010/01768238.DOCXv3A-2 budget is presented to the Board for review within 15 days of receipt of an assessed value certification from the County's Property Appraiser which is due by July 1. A tentative budget is thereupon adopted within 15 days. Subsequent to public hearings, a final budget is adopted. The final budget for the fiscal year ended September 30, 2021 was adopted by the Board on September 17, 2020. Final millage rates are adopted, usually by late September, and the County's Tax Collector prepares tax bills for mailing on or after November 1. Upon valid adoption, all expenditures in the budget constitute appropriations, and amendments to the budget can be made only in accordance with the pro visions of Chapter 129, Florida Statutes, and such chapter provides that expenditures in excess of total fund budgets are unlawful. Annual Audit Florida law requires that an annual post audit be completed by independent certified public accountants retained by the County. The County retained the firm of Clifton Larson Allen LLP, Naples, Florida, to undertake the audit for the fiscal year ended September 30, 2020. The Comprehensive Annual Financial Report for the fiscal year ended September 30, 2020 appears in APPENDIX B attached to this Official Statement. The Governmental Accounting Standards Board (GASB) issued Statement No. 68, "Accounting and Financial Reporting for Pensions" ("GASB No. 68") – an amendment to GASB Statement No. 27, "Accounting for Pensions by State and Local Governmental Employers", which was effective for the County's fiscal year ended September 30, 2020. For a more complete description of GASB No. 68 and its effect on the County's financial reporting, see "– Florida Retirement System" below. Population The County has experienced rapid population growth in recent decades. The following table presents historical and projected population growth for the County, the State, and the United States for the period of 1960 to 2020: POPULATION TRENDS Year County Population Population Percentage Increase State Population Population Percentage Increase United States Population Population Percentage Increase 1960 15,753 --- 4,951,560 --- 179,323,175 --- 1970 38,040 141.5% 6,791,418 37.1% 203,302,031 13.4% 1980 85,971 126.0 9,746,961 43.5 226,504,825 11.4 1990 152,099 76.9 12,938,071 32.7 250,410,000 10.6 2000 251,377 65.3 15,982,378 23.5 274,634,000 9.7 2010 321,520 27.9 18,801,310 17.6 308,745,538 12.4 2020* 383,166 19.2 21,326,800* 13.4 322,742,000* 4.5 *Estimates on County and State population use medium estimates of population growth. Source: University of Florida, Bureau of Economic and Business Research, Population Program, unpublished data. Census data from U.S. Bureau of Census. 25694/010/01768238.DOCXv3A-3 Most of the growth of Collier County is due to migration. The estimated median age of the County's population was 50.8 years according to the Collier County Comprehensive Annual Financial Report for Fiscal Year Ending September 30, 2020. COLLIER COUNTY EMPLOYMENT BY MAJOR INDUSTRY Industry Establishments Employees Retail Trade 1,655 21,776 Accommodation and Food Services 949 22,581 Health Care and Social Assistance 1,200 20,586 Construction 2,241 17,324 Administrative and Waste Services 1,539 10,150 Educational Services 129 7,992 Arts, Entertainment, and Recreation 286 8,153 Other Services (except Public Administration) 1,359 6,542 Professional and Technical Service 2,060 5,897 Public Administration 62 5,914 Agriculture, Forestry, Fishing and Hunting 96 2,914 Real Estate and Rental and Leasing 1,282 4,298 Finance and Insurance 757 4,132 Manufacturing 326 4,537 Wholesale Trade 452 4,184 Transportation and Warehousing 288 2,567 Information 178 1,335 Management of Companies and Enterprises 148 334 Utilities 28 210 Mining 4 20 Unclassified Establishments 272 111 Source: Florida Insight, Florida Department of Economic Opportunity. 25694/010/01768238.DOCXv3A-4 COLLIER COUNTY EMPLOYMENT (2011-2020) Year Labor Force Employment Unemployment County Unemployment Rate State of Florida Unemployment Rate 2011 147,941 132,970 14,971 10.1% 10.0% 2012 151,770 138,572 13,198 8.7 8.6 2013 155,187 143,731 11,456 7.4 7.5 2014 159,799 149,982 9,817 6.1 6.4 2015 164,330 155,607 8,723 5.3 5.5 2016 169,758 161,752 8,006 4.7 4.9 2017 173,133 165,888 7,245 4.2 4.2 2018 177,597 171,332 6,265 3.5 3.6 2019 180,558 174,635 5,923 3.3 3.3 2020 177,497 165,287 12,210 6.9 7.7 Source: Florida Insight, Florida Department of Economic Opportunity. BUILDING PERMIT ACTIVITIES IN COLLIER COUNTY (2011-2020) Year Residential Valuation(1) Single Family Units Multi- Family Units 2011 866 320 $272,942 2012 1,149 304 313,259 2013 1,540 817 448,610 2014 2,195 722 630,402 2015 2,611 954 795,923 2016 2,788 782 875,143 2017 2,615 846 688,050 2018 3,063 1,232 1,086,682 2019 2,862 676 871,059 2020 2,890 1,334 912,994 (1) Valuation in thousands of dollars. Source: Collier County, Florida Finance Department. 25694/010/01768238.DOCXv3A-5 Agriculture Agriculture is a dominant factor in the economy of the County. Rainfall averages about 54 inches annually with most of the precipitation occurring during the late spring and summer. The high yearly rainfall and year-round mild temperature enable agriculture to be a productive sector of the County economy. The agricultural industry represents five percent of the workforce. Farming activities are located approximately 40 miles inland primarily centered around the community of Immokalee. Major crops include tomatoes, peppers, cucumbers, melons and citrus. Beef cattle are also a significant farming commodity. Tourism Tourism is a major factor in the economy of the County. Visitors to the County enjoy its Gulf of Mexico beaches, golf, tennis and other attractions. Everglades National Park, th e United States only subtropical National Park, located near Naples, comprises a substantial portion of the County. Collier - Seminole Park and Corkscrew Swamp are also located nearby. Salt water fishing in the Gulf of Mexico, as well as fresh water fishing, makes the many lakes and waterways popular vacation spots. The County is regarded as one of the largest shelling areas in the United States. Transportation The County is served by U.S. Highway 41 (otherwise known as the Tamiami Trail) and Interstate 75, which links Naples to the east coast of Florida and intersects U.S. Highway 27, providing access to the Florida Turnpike. Interstate 75 also provides access to the County from the North. Greyhound Bus Lines connects the County to all points within the State. Air service is available at the Naples Airport owned by the City of Naples and covers an area of approximately 650 acres. The airport has two lighted 5,000 feet hard surfaced runways, each 150 feet wide. Activity at this airport mainly consists of charter flights and general aviation. Air service at the Southwest Florida International Airport near Fort Myers, 35 miles north of Naples, reaches many major cities. In addition, the County owns and operates three public airports: the Marco Island E xecutive Airport and the Immokalee and Everglades City Airparks. Educational System The County school system serves 47,048 students in 31 elementary schools, 10 middle schools, 8 high schools, and a PreK-12 school (Everglades City School). There are also 11 alternative school programs and 8 locations. The public schools provide a varied adult education program and a special program for pre-school children. There are several private and parochial schools in the County offering classes from kindergarten through the twelfth grade. Florida Southwestern State College's main campus in Fort Myers, with a branch campus in Naples, offers technical training as well as college preparation for students. In August of 2003, Ave Maria University, a private Catholic University located within the County, began admitting students. The University offers bachelor's degrees in biology, classics, economics, history, literature, mathematics, music, philosophy, politics and theology. Pre -professional programs are offered in pre-law, pre-medicine and pre-business. Although not located within the County, Florida Gulf Coast University, the tenth college in the State University System, is operating in Lee County, immediately north of the County. 25694/010/01768238.DOCXv3A-6 Medical Facilities Naples Community Hospital, a non-profit, private corporation provides health services to the residents of the County. It opened as a 50-bed facility in 1956, financed exclusively by contributions from members of the community. Since 1956, Naples Community Hospital has grown to encompass approximately 422,000 square feet and include two six -story towers that house Naples Community Hospital's 716 licensed beds and patient care ancillary services and a two-story support services wing located between the two towers. Hospital services are also provided in the Carpenter -Briggs Radiation Therapy Center located across the street from Naples Community Hospital, at the Golden Gate Urgent Care Center located in leased space approximately seven miles from Naples Community Hospital, and in several other outpatient facilities that provide urgent care, rehabilitation, wellness and infusion services. In addition, Physician's Regional operates two hospitals within the County with a total of 201 beds. The Collier County Health Department operates in every community in the County under the direction of a licensed physician and with a staff of trained specialists, including publi c health workers, nurses, sanitarians and clinical psychologists. COLLIER COUNTY FINANCIAL AND ECONOMIC DATA (Fiscal Years 2011-2020) (Unaudited) Fiscal Year Population Percent Increase/(Decrease) Per Capita Income 2011 321,520 -- $59,492 2012 323,785 0.7 60,060 2013 329,849 1.9 60,863 2014 339,642 3.0 64,872 2015 348,777 2.7 70,451 2016 353,936 1.5 72,792 2017 360,846 2.0 85,101 2018 368,534 2.1 88,865 2019 376,086 2.0 93,278 2020 383,166 1.9 99,832 Source: Collier County, Florida Finance Department. 25694/010/01768238.DOCXv3A-7 Assessed Valuation The following table shows the assessed value and taxable value for operating millage in each of the past ten Fiscal Years. ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY IN COLLIER COUNTY(1) (Fiscal Years 2011-2020) (Unaudited) (Amounts Expressed in Thousands) Fiscal Year Ended September 30 Residential Property Personal Property Centrally Assessed Property Less: Tax Exempt Total Taxable Assessed Value Total Direct Tax Rate Estimated Actual Taxable Value Assessed Value as a Percentage of Actual Value(2) 2011 $57,922,450 $2,259,654 $171 $8,773,516 $61,439,779 4.4151 $70,213,295 100% 2012 55,452,450 2,253,274 187 8,513,638 58,211,792 4.4149 66,725,430 100 2013 55,738,290 2,240,098 184 8,473,811 58,497,796 4.4126 66,971,607 100 2014 57,656,527 2,200,895 152 8,539,822 60,649,644 4.1592 69,186,466 100 2015 61,457,718 2,186,145 195 8,741,753 64,597,047 4.1582 73,338,800 100 2016 66,559,709 2,353,841 134 9,235,508 70,088,827 4.1572 79,324,335 100 2017 73,334,846 2,342,953 211 9,537,260 77,120,332 4.2029 86,657,592 100 2018 79,459,537 2,448,008 246 9,905,942 83,609,987 4.1851 93,515,929 100 2019 83,819,751 2,534,892 244 10,317,449 88,286,267 4.1827 98,603,716 100 2020 87,951,024 2,619,748 232 10,676,611 93,187,983 4.1876 103,864,594 100 (1) Property is assessed as of January 1, and taxes based on these assessments are levied and become due on the following Novembe r 1. Therefore, assessments and levies applicable to a certain year are collected in the fiscal year ending during the next succeeding calend ar year. (2) The basis of assessed value required by the state is 100% of actual value. Source: Collier County, Florida Finance Department. 25694/010/01768238.DOCXv3A-8 The following table contains the property tax rates for the last ten fiscal years. COLLIER COUNTY, FLORIDA PROPERTY TAX RATES – ALL DIRECT AND OVERLAPPING GOVERNMENTS(1) (Fiscal Years 2011-2020) (Unaudited) Collier County Other Fiscal Year General Fund Special Revenue Funds Debt Service Funds Total County School District Independent Districts Total 2011 3.5645 0.6926 0.1580 4.4151 5.6990 1.3299 11.4440 2012 3.5645 0.7627 0.0877 4.4149 5.5270 1.2202 11.1621 2013 3.5645 0.7555 0.0926 4.4126 5.5760 1.2395 11.2281 2014 3.5645 0.5873 0.0074 4.1592 5.6900 1.2228 11.0720 2015 3.5645 0.5860 0.0077 4.1582 5.5800 1.1853 10.9235 2016 3.5645 0.5856 0.0071 4.1572 5.4800 1.1331 10.7703 2017 3.5645 0.6323 0.0061 4.2029 5.2450 1.1138 10.5617 2018 3.5645 0.6145 0.0061 4.1851 5.1220 1.2735 10.5446 2019 3.5645 0.6122 0.0060 4.1827 5.0490 1.2331 10.4648 2020 3.5645 0.6172 0.0059 4.1876 5.0830 1.2272 10.4978 (1) Basis for property tax rates is 1 mill per $1,000 of assessed value. Property is assessed as of January 1 and taxes based on those assessments are levied according to the tax rate in effect that tax year and become due on November 1. Therefore, assessments and tax levies applicable to a certain tax year are collected in the fiscal year ending during the following calendar year. Source: Collier County, Florida Finance Department. Property Tax Reform Millage Rollback Legislation. In 2007, the State Legislature adopted a property tax plan which significantly impacted ad valorem tax collections for State local governments (the "Millage Rollback Legislation"). One component of the Millage Rollback Legislation required counties, cities and special districts to rollback their millage rates for the 2007-2008 Fiscal Year to a level that, with certain adjustments and exceptions, would generate the same level of ad valorem tax revenue as in Fiscal Year 2006 -2007; provided, however, depending upon the relative growth of each local government's own ad valorem tax revenues from 2001 to 2006, such rolled back millage rates were determined after first reducing 2006 -2007 ad valorem tax revenues by zero to nine percent (0% to 9%). In addition, the Rollback Legislation also limited how much the aggregate amount of ad valorem tax revenues may increase in future fiscal years. A local government may override certain portions of these requirements by a supermajority, and for certain requirements, a unanimous vote of its governing body. Constitutional Exemptions. Certain exemptions from property taxes have been enacted. Constitutional exemptions include, but are not limited to, property owned by a municipality and used exclusively by it for municipal or public purposes, certain household goods and personal effects to the value fixed by general law, certain locally approved community and economic development ad valorem tax exemptions to new businesses and expansions of existing businesses, as defined by general law and 25694/010/01768238.DOCXv3A-9 historic preservation ad valorem tax exemptions to owners of historic properties, $25,000 of the assessed value of property subject to tangible personal property tax, the assessed value of solar devices or renewable energy source devices subject to tangible personal property tax may be exempt from ad valorem taxation, subject to limitations provided by general law, and certain real property dedicated in perpetuity for conservation purposes, including real property encumbered by perpetual conservation easements or by other perpetual conservation protections, as defined by general law. Limitation on Increase in Assessed Value of Property. The State Constitution limits the increases in assessed just value of homestead property to the lower of (1) three percent of the assessment for the prior year or (2) the percentage change in the Consumer Price Index for all urban consumers, U.S. City Average, all items 1967=100, or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics. The accumulated difference between the assessed value and the just value is known as t he "Save Our Homes Benefit." Further, any change of ownership of homestead property or upon termination of homestead status such property shall be reassessed at just value as of January 1 of the year following the year of sale or change of status; new home stead property shall be assessed at just value as of January 1 of the year following the establishment of the homestead; and changes, additions, reductions or improvements to the homestead shall initially be assessed as provided for by general law. Owners of homestead property may transfer up to $500,000 of their Save Our Homes Benefit to a new homestead property purchased within two years of the sale of their previous homestead property to which such benefit applied if the just value of the new homestead is greater than or is equal to the just value of the prior homestead. If the just value of the new homestead is less than the just value of the prior homestead, then owners of homestead property may transfer a proportional amount of their Save Our Homes Benefit, such proportional amount equaling the just value of the new homestead divided by the just value of the prior homestead multiplied by the assessed value of the prior homestead. For all levies other than school district levies, assessment increases for specified nonhomestead real property may not exceed ten percent (10%) of the assessment for the prior year. This assessment limitation is, by its terms, to be repealed effective January 1, 2019; however, the legislature by joint resolution approved an amendment abrogating such repeal, which was approved by the electors in the November 6, 2018 general election and went into effect January 1, 2019. Homestead Exemption. In addition to the exemptions described above, the State Constitution also provides for a homestead exemption. Every person who has the legal title or beneficial title in equity to real property in the State and who resides thereon and in good faith makes the same his or her permanent residence or the permanent residence of others legally or naturally dependent upon such person is eligible to receive a homestead exemption of up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The additional exemption, up to $25,000, applicable to the assessed value of the property between $50,000 and $75,000, applies to all levies other than school district levies. A person who is receiving or claiming the benefit of an ad valorem tax exemption or a tax credit in another state where permanent residency, or residency of another legally or naturally dependent upon the owner, is required as a basis for the granting of that ad valorem tax exemption or tax credit is not entitled to the homestead exemption. In addition to the general homestead exemption described i n this paragraph, the following homestead exemptions are authorized by State law. Certain Persons 65 or Older. A board of county commissioners or the governing authority of any municipality may adopt an ordinance to allow an additional homestead exemption equal to (i) of up to 25694/010/01768238.DOCXv3A-10 $50,000 for persons age 65 or older with household income that does not exceed the statutory income limitation of $20,000 (as increased by the percentage increase in the average cost of living index each year since 2001) or (ii) the assessed value of the property with a just value less than $250,000, as determined the first tax year that the owner applies and is approved, for any person 65 or older who has maintained the residence as his or her permanent residence for not less than 25 years and whose household income does not exceed the statutory income. The County enacted an ordinance providing for the exemption from County ad valorem taxes described in this paragraph. In addition, veterans 65 or older who are partially or totally permanently disabled may receive a discount from tax on homestead property if the disability was combat related and the veteran was honorably discharged upon separation from military service. The discount is a percentage equal to the percentage of the veteran's permanent, service-connected disability as determined by the United States Department of Veteran's Affairs. The County has not enacted an ordinance providing for the exemption from County ad valorem taxes described in this paragraph. Deployed Military Personnel. The State Constitution provides that by general law and subject to certain conditions specified therein, each person who receives a homestead exemption who was a member of the United States military or military reserves, the United States C oast Guard or its reserves, or the Florida National Guard; and who was deployed during the preceding calendar year on active duty outside the continental United States, Alaska, or Hawaii in support of military operations designated by the legislature shall receive an additional exemption equal to a percentage of the taxable value of his or her homestead property. The applicable percentage shall be calculated as the number of days during the preceding calendar year the person was deployed on active duty outs ide the continental United States, Alaska, or Hawaii in support of military operations designated by the legislature divided by the number of days in that year. Certain Active Duty Military and Veterans. A military veteran who was honorably discharged, is a resident of the State, and who is disabled to a degree of 10% or more because of misfortune or while serving during wartime may be entitled to a $5,000 reduction in the assessed value of his or her property. This exemption is not limited to homestead property. A military veteran who was honorably discharged with a service-related total and permanent disability may be eligible for a total exemption from taxes on homestead property. A similar exemption is available to disabled veterans confined to wh eelchairs. Under certain circumstances, the veteran’s surviving spouse may be entitled to carry over these exemptions. Certain Totally and Permanently Disabled Persons. Real estate used and owned as a homestead by a quadriplegic, less any portion used for commercial purposes, is exempt from all ad valorem taxation. Real estate used and owned as a homestead by a paraplegic, hemiplegic, or other totally and permanently disabled person, who must use a wheelchair for mobility or who is legally blind, is exempt from taxation if the gross household income is below statutory limits. Survivors of First Responders. Any real estate that is owned and used as a homestead by the surviving spouse of a first responder (law enforcement officer, correctional officer, firefighter, emergency medical technician or paramedic), who died in the line of duty may be granted a total exemption on homestead property if the first responder and his or her surviving spouse were permanent residents of the State on January 1 of the year in which the first responder died. Save Our Homes Portability Affected by Storm Damage (SOH). Owners of homestead property that was significantly damaged or destroyed as a result of a named tropical storm or hurricane can elect to 25694/010/01768238.DOCXv3A-11 have the property deemed abandoned if the owner establishes a new homestead by January 1 of the second year immediately following the storm or hurricane. This will allow the owner of the homestead property to keep their SOH benefit if they move from the significantly damaged or destroyed property to establish a new homestead by the end of the year following the storm. Property Tax Relief for Natural Disasters. In light of the recent natural disasters, the state legislature created a property tax relief credit for homestead parcels on which certain residential improvements were damaged or destroyed by a hurricane that occurred in 2016 or 2017, namely hurricanes Hermine, Matthew, and Irma. If the residential improvement is rendered uninhabitable for at least 30 days due to a hurricane that occurred during the 2016 or 2017 calendar year, taxes initially levied in 2019 may be abated. Due to this reduction in ad valorem tax revenue, the legislature is required to appropriate funds to offset the deficit in certain taxing jurisdictions. Recent Amendments Relating to Ad Valorem Taxation. In the 2016 legislative session, several amendments were passed affecting ad valorem taxation, including cl assification of agricultural lands during periods of eradication or quarantine, deleting requirements that conservation easements be renewed annually, providing that just value of real property shall be determined in the first tax year for income restricted persons age 65 or older who have maintained such property as the permanent residence for at least 25 years, authorizing a first responder who is totally and permanently disabled as a result of injuries sustained in the line of duty to receive relief from ad valorem taxes assessed on homestead property, revising procedures with respect to assessments, hearings and notifications by the value adjustment board, and revising the interest rate on unpaid ad valorem taxes. Administrative Action Relating to Due Dates. On Monday, March 16, 2020, the Governor directed the Department of Revenue to provide flexibility on tax due dates to assist those adversely affected by COVID- 19. On March 26, 2020, the Department of Revenue’s Executive Director issued an emerg ency order to extend the final due date for property tax payments for the 2019 tax year. Such order applies to all 67 counties within the State, including the County. Property taxes, as described above, are normally due by March 31 however, as a result of the executive order, the Department of Revenue waived the due date so that payments remitted by April 15, 2020, for the 2019 tax year were considered timely paid. See "INVESTMENT CONSIDERATIONS" in the body of this Official Statement for more information about the impacts of COVID-19 on the County. Constitutional Limitations on New State Taxes and Fees During the 2018 State legislative session, the State Legislature passed House Joint Resolution 7001 ("HJR 7001"), including an amendment to the State Constitution providing that no state tax or fee may be imposed, authorized, raised by the State Legislature, or authorized by the State Legislature to be raised, except through legislation approved by two-thirds of the membership of each house of the Legislature. The same requirement would apply to decreasing or eliminating any state tax, fee exemption or credit. Previously, such actions could be approved by a majority vote. HJR 7001 also requires that any proposed state tax or fee imposition, authorization or increase must be contained in a separate bill that contains no other subject. The joint resolution specifies that the amendment does not authorize the imposition of any state tax or fee otherwise prohibited by the State Constitution, and does not apply to any tax or fee imposed by, or authorized to be imposed by, a county, municipality, school board, or special district. The amendment in the HJR 7001 was approved by at least sixty percent of the voters during the 2018 general election and was passed and signed into law by Governor Scott and took effect on January 8, 2019. Although the legislation will not subject local taxes and fees to the stricter voting requirement, local 25694/010/01768238.DOCXv3A-12 governments could be adversely impacted during recessionary economic environments if State lawmakers are unable to raise taxes. The County does not expect that HJR 7001 will have an impact on its ability to pay debt service on the Series 2021 Bonds. Florida Retirement System The information relating to the Florida Retirement System ("FRS") contained herein has been obtained from the FRS Annual Reports available at www.dms.myflorida.com and the Florida Comprehensive Annual Financial Reports available at www.myfloridacfo.com/aadir/statewide_financial_reporting. No representation is made by the County as to the accuracy or adequacy of such information or that there has not been any material adverse change in such information subsequent to the date of such information. General Information. The FRS is a cost-sharing multiple-employer public-employee retirement system with two primary plans – the FRS defined benefit pension plan (the "FRS Pension Plan") and the FRS defined contribution plan (the "FRS Investment Plan"). The FRS Pension Plan was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees. Florida Retirement System Pension Plan Membership. FRS membership is compulsory for all employees filling a regularly established position in a state agency, county agency, state university, state community college, or district school board. Participation by cities, municipalities, special districts, charter schools, and metropolitan planning organizations, although optional, is generally irrevocable after election to participate is made. Members hired into certain positions may be eligible to withdraw from the FRS altogether or elect to participate in the non-integrated optional retirement programs in lieu of the FRS except faculty of a medical college in a state university who must participate in the State University System Optional Retirement Program. There are five general classes of membership, as follows: • Regular Class - Members of the FRS who do not qualify for membership in the other classes. • Senior Management Service Class (SMSC) - Members in senior management level positions in state and local governments as well as assistant state attorneys, assistant statewide prosecutors, assistant public defenders, assistant attorneys general, deputy cour t administrators, assistant capital collateral representatives, and judges of compensation claims. • Special Risk Class - Members who are employed as law enforcement officers, firefighters, firefighter trainers, fire prevention officers, state fixed-wing pilots for aerial firefighting surveillance, correctional officers, emergency medical technicians, paramedics, community-based correctional probation officers, youth custody officers (from July 1, 2001 through June 30, 2014), certain health-care related positions within state forensic or correctional facilities, or specified forensic employees of a medical examiner's office or a law enforcement agency, and meet the criteria to qualify for this class. • Special Risk Administrative Support Class - Former Special Risk Class members who are transferred or reassigned to nonspecial risk law enforcement, firefighting, emergency medical 25694/010/01768238.DOCXv3A-13 care, or correctional administrative support positions within an FRS special risk-employing agency. • Elected Officers' Class (EOC) - Members who are elected state and county officers and the elected officers of cities and special districts that choose to place their elected officials in this class. Members of the EOC may elect to withdraw from the FRS or participate in the SMSC in lieu of the EOC. Beginning July 1, 2001 through June 30, 2011, the FRS Pension Plan provided for vesting of benefits after six years of creditable service for members initially enrolled during this period. Members not actively working in a position covered by the FRS Pension Plan on July 1, 2001, must return to covered employment for up to one work year to be eligible to vest with less service than was required under the law in effect before July 1, 2001. Members initially enrolled on or after July 1, 2001 through June 30, 2011, vest after six years of service. Members initially enrolled on or after July 1, 2011, vest after eight years of creditable service. Members are eligible for normal retirement when they have met the requirements listed below. Early retirement may be taken any time after vesting within 20 years of normal retirement age; however, there is a 5% benefit reduction for each year prior to the normal retirement age. • Regular Class, SMSC, and EOC Members – For members initially enrolled in the FRS Pension Plan before July 1, 2011, six or more years of creditable service and age 62, or the age after completing six years of creditable service if after age 62. Thirty years of creditable service regardless of age before age 62. For members initially enrolled in the FRS Pension Plan on or after July 1, 2011, eight or more years of creditable service and age 65, or the age after completing eight years of creditable service if after age 65. Thirty -three years of creditable service regardless of age before age 65. • Special Risk Class and Special Risk Administrative Support Class Members – For members initially enrolled in the FRS Pension Plan before July 1, 2011, six or more years of Special Risk Class service and age 55, or the age after completing six y ears of Special Risk Class service if after age 55. Twenty-five years of special risk service regardless of age before age 55. A total of 25 years of service including special risk service and up to four years of active duty wartime service and age 52. Without six years of Special Risk Class service, members of the Special Risk Administrative Support Class must meet the requirements of the Regular Class. For members initially enrolled in the FRS Pension Plan on or after July 1, 2011, eight or more years of Special Risk Class service and age 60, or the age after completing eight years of Special Risk Class service if after age 60. Thirty years of special risk service regardless of age before age 60. Without eight years of Special Risk Class service, members of the Special Risk Administrative Support Class must meet the requirements of the Regular Class. Benefits. Benefits under the FRS Pension Plan are computed on the basis of age, average final compensation, creditable years of service, and accrual value by membership class. Members are also eligible for in-line-of-duty or regular disability and survivors' benefits. Pension benefits of retirees and annuitants are increased each July 1 by a cost-of-living adjustment. If the member is initially enrolled in the FRS Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011 25694/010/01768238.DOCXv3A-14 service credit by the total service credit at retirement multiplied by 3%. FRS Pension Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. The Deferred Retirement Option Program ("DROP") became effective July 1, 1998, subject to provisions of Section 121.091(13), Florida Statutes. FRS Pension Plan members who reach normal retirement are eligible to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in the DROP for a maximum of 60 months. Authoriz ed instructional personnel employed with a district school board, the Florida School for the Deaf and the Blind or a developmental research school of a state university may be allowed to extend their DROP participation for up to an additional 36 months beyond their initial 60-month participation period. Monthly retirement benefits remain in the FRS Trust Fund during DROP participation and accrue interest. As of June 30, 2020, the FRS Trust Fund held $2,673,751,676 in accumulated benefits for 36,181 DROP participants. Of these 36,181 DROP participants, 34,141 were active in the DROP with balances totaling $2,375,655,885. The remaining participants were no longer active in the DROP and had balances totaling $298,095,791 to be processed after June 30, 2020. Administration. The Department of Management Services, Division of Retirement administers the FRS Pension Plan. The State Board of Administration (the "SBA") invests the assets of the FRS Pension Plan held in the FRS Trust Fund. Costs of administering the FRS Pension Plan are funded from earnings on investments of the FRS Trust Fund. Reporting of the FRS Pension Plan is on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when the obligation is incurred. Contributions. All participating employers must comply with statutory contribution requirements. Section 121.031(3), Florida Statutes, requires an annual actuarial valuation of the FRS Pension Plan, which is provided to the Legislature as guidance for fu nding decisions. Employer and employee contribution rates are established in Section 121.71, Florida Statutes. Employer contribution rates under the uniform rate structure (a blending of both the FRS Pension Plan and FRS Investment Plan rates) are recommended by the actuary but set by the Legislature. Statutes require that any unfunded actuarial liability ("UAL") be amortized within 30 plan years. Pursuant to Section 121.031(3)(f), Florida Statutes, any surplus amounts available to offset total retirement system costs are to be amortized over a 10-year rolling period on a level-dollar basis. The balance of legally required reserves for all defined benefit pension plans at June 30, 2020, was $161,568,265,280. These funds were reserved to provide for total current and future benefits, refunds, and administration of the FRS Pension Plan. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3A-15 Effective July 1, 2011, both employees and employers of the FRS are required to make contributions to establish service credit for work performed in a regularly established position. Effective July 1, 2002, the Florida Legislature established a uniform contribution rate system for the FRS, covering both the FRS Pension Plan and the FRS Investment Plan. The uniform rates for Fiscal Year 2019-20 are as follows: Membership Class Employee Contribution Rate Employer Contribution Rate(1) Total Contribution Rate Regular 3.00% 6.75% 9.75% Special Risk 3.00 23.76 26.76 Special Risk Administrative Support 3.00 36.87 39.87 Elected Officers – Judges 3.00 40.28 43.28 Elected Officers - Legislators/Attorneys/Cabinet 3.00 54.31 57.31 Elected Officers – County, City, Special Districts 3.00 47.10 50.10 Senior Management Service 3.00 23.69 26.69 Deferred Retirement Option Program N/A 12.94 12.94 (1) These rates include the normal cost and unfunded actuarial liability contributions but do not include the 1.66% contribution for the HIS and the fee of 0.06% for administration of the FRS Investment Plan and provision of educational tools for both plans. Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020. [Remainder of page intentionally left blank] 25694/010/01768238.DOCXv3A-16 Pension Amounts for the FRS Pension Plan. Schedule of Changes in Net Pension Liability and Related Ratios (in thousands) Total Pension Liability 2020 2019 2018 2017 Service cost $265,521 $232,118 $258,450 $304,537 Interest on total pension liability 402,709 418,157 389,705 337,486 Effect of plan changes - - - - Effect of economic/demographic (gains) or losses 452,542 - 188,173 - Effect of assumption changes or inputs 481,833 516,083 (398,996) (1,073,716) Benefit payments (505,549) (491,890) (491,528) (465,980) Net change in total pension liability 1,097,056 674,468 (54,196) (897,673) Total pension liability, beginning 11,491,044 10,816,576 10,870,772 11,768,445 Total pension liability, ending (a) $12,588,098 $11,491,044 $10,816,576 $10,870,772 Fiduciary net position Employer contributions $576,253 $555,291 $542,303 $529,229 Member contributions 370 195 237 - Investment income net of investment expenses 5,315 6,181 3,311 1,380 Benefit payments (505,549) (491,890) (491,531) (465,980) Administrative expenses (172) (195) (168) (177) Net change in plan fiduciary net position 76,217 69,582 54,152 64,452 Fiduciary net position, beginning 302,045 232,463 178,311 113,859 Fiduciary net position, ending (b) $378,261 $302,045 $232,463 $178,311 Net pension liability, ending = (a) - (b) $12,209,837 $11,188,999 $10,584,113 $10,692,461 Fiduciary net position as a % of total pension liability 3.00% 2.63% 2.15% 1.64% Covered payroll $34,715,391 $33,452,626 $32,670,918 $31,885,633 Net pension liability as a % of covered payroll 35.17% 33.45% 32.40% 33.53% (1) Reflects restatement of beginning net position at July 1, 2017, due to implementation of GASB 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020. Actuarial Methods and Assumptions for the FRS Pension Plan. The total pension liability was determined by an actuarial valuation as of the valuation date of July 1, 2020, calculated based on the discount rate and actuarial assumptions below: June 30, 2019 June 30, 2020 Discount rate 6.90% 6.80% Long-term expected rate of return, net of investment expense 6.90% 6.80% Bond Buyer General Obligation 20-Year Bond Municipal Bond Index N/A N/A Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020. The plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees in determining the projected depletion date. Therefore, the discount rate for calculating the total pension liability is equal to the long-term expected rate of return. 25694/010/01768238.DOCXv3A-17 The actuarial assumptions used to determine the total pension liability as of June 30, 2 020, were based on the results of an actuarial experience study for the period July 1, 2013 - June 30, 2018. Valuation Date July 1, 2020 Measurement Date June 30, 2020 Asset Valuation Method Fair Market Value Inflation 2.40% Salary increase including inflation 3.25% Mortality PUB-2010 base table varies by member category and sex, projected generationally with Scale MP-2018 Actuarial cost method Individual Entry Age Normal Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020. Sensitivity Analysis for the FRS Pension Plan. The following presents the net pension liability of the FRS, calculated using the discount rate of 6.80%, as well as what the FRS's net pension liability would be if it were calculated using a discount rate that is one percentage point lower (5.90%) or one percentage point higher (7.80%) than the current rate. 1% Decrease 5.80% Current Discount Rate 6.80% 1% Increase 7.80% Total pension liability $230,777,315,000 $204,909793,000, $183,305,027,000 Fiduciary net position 161,568,265,280 161,568,265,280 161,568,265,280 Net pension liability $69,209,049,720 $43,341,473,720 $21,736,761,720 Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020 . Retiree Health Insurance Subsidy Program The Retiree Health Insurance Subsidy Program ("HIS Program") is a cost-sharing multiple- employer defined benefit pension plan established under Section 112.363, Florida Statutes. The benefit is a monthly payment to assist retirees of state-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Department of Management Services. For the fiscal year ended June 30, 2020, eligible retirees and beneficiaries received a monthly HIS payment equal to the number of years of creditable service completed at the time of retirement multiplied by $5. The payments are at least $30 but not more than $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS benefit, a retiree under a state-administered retirement system must provide proof of health insurance coverage, which can include Medicare. The HIS Program is funded by required contributions from FRS participating employers as set by the Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended June 30, 2020, the contribution rate was 1.66% of payroll pursuant to Section 112.363, Florida Statutes. HIS contributions are deposited in a separate trust fund from which HIS payments are authorized. HIS benefits are not guaranteed and are subject to annual legislative 25694/010/01768238.DOCXv3A-18 appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, the legislature may reduce or cancel HIS payments. Pension Amounts for the HIS. Schedule of Changes in Net Pension Liability and Related Ratios (in thousands) Total Pension Liability 2020 2019 2018 Service cost $265,521 $232,118 $258,450 Interest on total pension liability 402,709 418,157 389,705 Effect of plan changes - - - Effect of economic/demographic (gains) or losses 452,542 - 188,173 Effect of assumption changes or inputs 481,833 516,083 (398,996) Benefit payments (505,549) (491,890) (491,528) Net change in total pension liability 1,097,056 674,468 (54,196) Total pension liability, beginning 11,491,044 10,816,576 10,870,772 Total pension liability, ending (a) $12,588,098 $11,491,044 $10,816,576 Fiduciary net position Employer contributions $576,253 $555,291 $542,303 Member contributions 370 195 237 Investment income net of investment expenses 5,315 6,181 3,311 Benefit payments (505,549) (491,890) (491,531) Administrative expenses (172) (195) (168) Net change in plan fiduciary net position 76,217 69,582 54,152 Fiduciary net position, beginning 302,045 232,463 178,311 Fiduciary net position, ending (b) $378,261 $302,045 $232,463 Net pension liability, ending = (a) - (b) $12,209,837 $11,188,999 $10,584,113 Fiduciary net position as a % of total pension liability 3.00% 2.63% 2.15% Covered payroll $34,715,391 $33,452,626 $32,670,918 Net pension liability as a % of covered payroll 35.17% 33.45% 32.40% Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020. Actuarial Methods and Assumptions for the HIS. The total pension liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and then was projected to the measurement date. Any significant changes during this period have been reflected as prescribed by GASB 67. The same demographic and economic assumptions that were used in the Florida Retirement System Actuarial Valuation as of July 1, 2019 ("funding valuation") were used for the HIS Program, unless otherwise noted. In a given membership class and tier, the same assumptions for both FRS Investment Plan members and for FRS Pension Plan members were used. 25694/010/01768238.DOCXv3A-19 June 30, 2019 June 30, 2020 Discount rate 3.50% 2.21% Long-term expected rate of return, net of investment expense N/A N/A Bond Buyer General Obligation 20-Year Bond Municipal Bond Index 3.50% 2.21% Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020. In general, the discount rate for calculating the total pension liability under GASB 67 is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The actuarial assumptions used to determine the total pension liability as of June 30, 2020, were based on the results of an actuarial experience study for the period July 1, 2008 - June 30, 2013. Valuation Date July 1, 2020 Measurement Date June 30, 2020 Inflation 2.40% Salary increase including inflation 3.25% Mortality Generational RP-2000 with Projection Scale BB Actuarial cost method Individual Entry Age Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020. Sensitivity Analysis for the HIS. The following presents the net pension liability of the HIS, calculated using the discount rate of 2.21%, as well as what the HIS's net pension liability would be if it were calculated using a discount rate that is one percentage point lower (1.21%) or one percentage point higher (3.21%) than the current rate. 1% Current 1% Decrease Discount Rate Increase 1.21% 2.21% 3.21% Total pension liability $14,492,287,934 $12,588,098,255 $11,029,524,573 Fiduciary net position 378,261,130 378,261,130 378,261,130 Net pension liability $14,114,026,804 $12,209,837,125 $10,651,263,443 Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2020. FRS Investment Plan The SBA administers the defined contribution plan officially titled the FRS Investmen t Plan. The Florida Legislature establishes and amends the benefit terms of the plan. Retirement benefits are based 25694/010/01768238.DOCXv3A-20 upon the value of the member's account upon retirement. The FRS Investment Plan provides vesting after one year of service regardless of membership class. If an accumulated benefit obligation for service credit originally earned under the FRS Pension Plan is transferred to the FRS Investment Plan, the years of service required for vesting under the FRS Pension Plan (including the service c redit represented by the transferred funds) is required to be vested for these funds and the earnings on the funds. The employer pays a contribution as a percentage of salary that is deposited into the individual member's account. Effective July 1, 2011, there is a mandatory employee contribution of 3.00%. The FRS Investment Plan member directs the investment from the options offered under the plan. Costs of administering the plan, including the FRS Financial Guidance Program, are funded through an empl oyer assessment of payroll and by forfeited benefits of plan members. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the FRS Investment Plan, receive a lump-sum distribution, or leave the funds invested for future distribution. Disability coverage is provided; the employer pays an employer contribution to fund the disability benefit which is deposited in the FRS Trust Fund. The member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan, or remain in the FRS Investment Plan and rely upon that account balance for retirement income. Multiple Employer Defined Benefit Retirement Plan As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost-sharing, multiple- employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan and HIS. Under Section 121.4501, Florida Statutes, the FRS also provides a defined contribution plan FRS Investment Plan alternative to the FRS Pension Plan, which is administered by the SBA. As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida State Legislature. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Ret irement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000 or from the website: www.dms.myflorida.com/workforce_operations/retiremenitipublications. Other Postemployment Benefit Plans General The County provides post-employment healthcare benefits for retirees through a single employer defined benefit plan (County's OPEB Plan) and can amend the benefits provisions. The participants of this plan include retirees of the Board, the Clerk of the Circuit Court and Comptroller, the Property Appraiser, the Tax Collector and the Supervisor of Elections. The Sheriff also provides post-employment healthcare benefits under a separate plan. In accordance with Florida Statute 112.0801, employees who retire and 25694/010/01768238.DOCXv3A-21 immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the County's health insurance plan at the same group rate as for active employees. The Board and the Tax Collector also subsidize the cost of the post-employment healthcare for qualifying retirees and each has the authority to amend benefit provisions. The Board offers a subsidy for its retirees who have at least 60% of eligible accrued sick leave remaining at the time of retirement and have completed 15 years of continuous service with the Board. In addition, the retiree must retire from the Board, be at least 55 years of age or have completed 30 years of service under the FRS and be eligi ble to receive an FRS benefit with no break in time. Such employees are eligible to receive a 50% to 100% subsidy toward the cost of coverage under the active plan. A subsidy is currently provided to 19 retirees. The Tax Collector offers a subsidy of 100% the cost of health care for employees with 10 years of service, between the ages of 54 and 64 and who exchange 800 hours of sick leave at retirement for employees hired prior to June 1, 2015. A subsidy is currently provided to 4 retirees. The County's OPEB Plan is currently being funded on a pay as you go basis. No trust or agency fund has been established for the plan. The plan does not issue a separate financial report. Participant Data As of September 30, 2020, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 65 Active employees 2,444 Total employees 2,509 Total OPEB Liability The County's total OPEB liability of $9,817,087 was measured as of September 30, 2020 and was determined by an actuarial valuation as of October 1, 2019. The following table shows the changes in the County's total OPEB liability for the year ended September 30, 2020. Total OPEB Liability Balance, as of October 1, 2019 $9,169,502 Changes: Service cost 609,998 Interest on total OPEB liability 190,846 Changes in assumptions or other inputs 321,170 Benefit payments (474,429) Net changes 647,585 Balance, as of September 30, 2020 $9,817,087 25694/010/01768238.DOCXv3A-22 OPEB Liability Discount Rate Sensitivity The following presents the County's total OPEB liability, as well as what the County's total OPEB liability would be if it were calculated using a discount rate one percentage point lower or one percentage point higher than the current discount rate: Description 1% Decrease in Discount Rate Current Discount Rate 1% Increase in Discount Rate OPEB Plan Discount Rate 0.60% 1.60% 2.60% Total OPEB Liability $10,586,169 $9,817,087 $9,119,922 OPEB Liability Healthcare Trend Rate Sensitivity The following presents the County's total OPEB liability, as well as what the County's total OPEB liability would be if it were calculated using a healthcare trend rate one percentage point lower or one percentage point higher than the current healthcare trend rate: Description 1% Decrease in Healthcare Cost Trend Rate Healthcare Cost Trend Rate 1% Increase in Healthcare Cost Trend Rate Healthcare Cost Trend Rate 4.00% 5.00% 6.00% Total OPEB Liability $8,879,923 9,817,087 10,907,889 Deferred Outflows and Inflows of Resources Related to OPEB For the year ended September 30, 2020, the County's OPEB expense was $880,973. In addition, the County reported deferred outflows of resources and deferred inflows of resources from the following sources: Description Deferred Outflows of Resources Deferred Inflows of Resources Differences Between Expected and Actual Economic Experience $ - $338,811 Changes in Assumptions 955,164 113,877 $955,164 $452,688 Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be amortized over 4.31 years and will be recognized as follows: Year Ending September 30 Deferred Outflows of Resources Deferred Inflows of Resources 2021 $265,973 $157,167 2022 265,973 155,800 2023 265,973 107,972 2024 134,060 31,663 Thereafter 23,185 86 25694/010/01768238.DOCXv3A-23 Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and pla n members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods are: Actuarial cost method Entry Age Actuarial The actuarial assumptions are: Discount rate Healthcare cost trend rate Salary increase New employees 1.6% (Based on the 20 year AA municipal bond rate) 5% 3% None Mortality rates were based on the Pri-2012 Mortality Fully Generational tables using Projection Scale MP-2020. Since the most recent valuation, the following changes have been made: • The discount rate was changed from 2.0% to 1.6%. • The mortality assumption has been updated from RP-2014 Mortality Fully Generational using Projection Scale MP-2018 to Pri-2012 Mortality Fully Generational using Projection Scale MP-2020. Sheriff's Plan Description and Benefits Provided The Sheriff provides post-employment healthcare benefits for retirees through a single employer defined benefit plan (Sheriff's OPEB Plan) and can amend the benefit provisions. In accordance with Florida Statute 112.0801, employees who retire and immediately begin receiving benefits from the FRS have the option of paying premiums to continue in the Sheriff 's health insurance plan at the same group rate as for active employees. 25694/010/01768238.DOCXv3A-24 Prior to 2010, the Sheriff subsidized approximately 26% of the cost for both single and family healthcare for its retirees who have 6 years of creditable service with the Sheriff and who receive a monthly retirement benefit from the Florida Retirement System. Approximately 22% of retirees receive the subsidy. The Sheriff's OPEB Plan is currently being funded on a pay as you go basis. No trust or agency fund has been established for the plan. The plan does not issue a separate financial report. Participant Data As of September 30, 2020, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 123 Active employees 1,138 Total employees 1,268 Total OPEB Liability The Sheriff's total OPEB liability of $27,920,433 was measured as of September 30, 2020 and was determined by an actuarial valuation as of October 1, 2020. The following table shows the changes in the Sheriff's total OPEB liability for the year ended September 30, 2020. Total OPEB Liability Balance, as of October 1, 2019 $21,786,049 Changes: Service cost 555,065 Interest on total OPEB liability 435,838 Differences between expected and actual experience 5,292,054 Changes in assumptions or other inputs 949,878 Benefit payments (1,098,451) Net changes 6,134,384 Balance, as of September 30, 2020 $27,920,433 OPEB Liability Discount Rate Sensitivity The following presents the Sheriff's total OPEB liability, as well as what the Sheriff's total OPEB liability would be if it were calculated using a discount rate one percentage point lower or one percentage point higher than the current discount rate: Description 1% Decrease in Discount Rate Current Discount Rate 1% Increase in Discount Rate OPEB Plan Discount Rate 0.60% 1.60% 2.60% Total OPEB Liability $30,594,983 $27,920,433 $25,553,103 25694/010/01768238.DOCXv3A-25 OPEB Liability Healthcare Trend Rate Sensitivity The following presents the Sheriff's total OPEB liability, as well as what the Sheriff's total OPEB liability would be if it were calculated using a healthcare trend rate one percentage point lower or one percentage point higher than the current healthcare trend rate: Description 1% Decrease in Healthcare Cost Trend Rate Healthcare Cost Trend Rate 1% Increase in Healthcare Cost Trend Rate Healthcare Cost Trend Rate 5.00% 6.00% 7.00% Total OPEB Liability $25,410,106 $27,920,433 $30,806,872 Deferred Outflows and Inflows of Resources Related to OPEB For the year ended September 30, 2020, the Sheriff's OPEB expense was $1,457,290. In addition, the Sheriff reported deferred outflows of resources and deferred inflows of resources from the following sources: Description Deferred Outflows of Resources Deferred Inflows of Resources Differences Between Expected and Actual Economic Experience $6,769,118 $49,528 Changes in assumptions 2,883,018 648,216 $9,652,136 $697,744 Amounts reported as deferred inflows and outflows of resources related to OPEB will be amortized over 7.07 years: Year Ending September 30 Deferred Outflows of Resources Deferred Inflows of Resources 2021 $1,486,003 $136,740 2022 1,486,003 136,740 2023 1,486,003 136,740 2024 1,486,003 136,740 2025 1,486,003 129,469 Thereafter 2,222,121 21,315 Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Calculations for financial reporting purposes are based on the benefits provided under terms of the plan as understood by the employer and the plan members in e ffect at the time of each valuation and 25694/010/01768238.DOCXv3A-26 on the pattern of sharing of costs between the employer and plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The actuarial methods are: Actuarial cost method Entry Age Actuarial The actuarial assumptions are: Discount rate Healthcare cost trend rate Salary increase New employees 1.60% (Based on the 20 year AA municipal bond rate) 6% None None Mortality rates were based on the RP-2014 Mortality Fully Generational tables using Projection Scale MP-2019. Since the most recent valuation, the following changes have been made: • The discount rate was changed from 2.0% to 1.6%. • The mortality assumption has been updated from RP-2014 Mortality Fully Generational using Projection Scale MP-2017 to RP-2014 Mortality Fully Generational Projection Scale MP-2019. Summary The aggregate amount of total OPEB liability, related deferred outflows of resources and deferred inflows of resources and OPEB expense for the County's postemployment benefit plans are summarized below: County's OPEB Plan Sheriff's OPEB Plan Total Total OPEB liability $9,817,087 $27,920,433 $37,737,520 Deferred outflows of resources related to OPEB 955,164 9,652,136 10,607,300 Deferred inflows of resources related to OPEB 452,688 697,744 1,150,432 OPEB expense 880,973 1,457,290 2,338,263 25694/010/01768238.DOCXv3 APPENDIX B COMPOSITE RESOLUTION 25694/010/01768238.DOCXv3 APPENDIX C COLLIER COUNTY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDED SEPTEMBER 30, 2020 25694/010/01768238.DOCXv3 APPENDIX D CONSULTING ENGINEERS AND FINANCIAL FEASIBILITY REPORT 25694/010/01768238.DOCXv3 APPENDIX E FORM OF BOND COUNSEL OPINION 25694/010/01768238.DOCXv3 APPENDIX F FORM OF CONTINUING DISCLOSURE CERTIFICATE 1 CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by Collier County Water-Sewer District (the "Issuer") in connection with the issuance of its $_____________ Water and Sewer Revenue Bonds, Series 2021 (the "Bonds"). The Bonds are being issued pursuant to Resolution No. CWS-85-5 adopted on July 30, 1985, as amended and restated by Resolution No. CWS-85-13 adopted on December 26, 1985, as amended and supplemented, and particularly as amended by Resolution No. CWS-87-5 adopted on March 3, 1987, Resolution No. CWS-91-6 adopted on October 22, 1991 and Resolution No. CWS-2006-298 adopted on November 14, 2006, particularly as supplemented by Resolution No. 2021-___/CWS Resolution No. 2021-__ adopted on June 22, 2021 (collectively, the "Resolution"). SECTION 1. PURPOSE OF THE DISCLOSURE CERTIFICATE. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the holders and Beneficial Owners (defined below) of the Bonds and in order to assist the Participating Underwriters in complying with the continuing disclosure requirements of the Rule (defined below). SECTION 2. DEFINITIONS. In addition to the definitions set forth in the Resolution which apply to any capitalized term used in this Disclosure Certificate, unless otherwise defined herein, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding B onds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean initially Digital Assurance Certification, L.L.C., or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "EMMA" shall mean the Electronic Municipal Market Access web portal of the MSRB, located at http://www.emma.msrb.org. "Event of Bankruptcy" shall be considered to have occurred when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person. "Financial Obligation" shall mean a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt 11.D.4 Packet Pg. 505 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) 2 obligation; or (iii) a guarantee of (i) or (ii). The term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Sec urities Rulemaking Board consistent with the Rule. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board. "Obligated Person" shall mean any person, including the Issuer, who is either generally or through an enterprise, fund, or account of such person committed by contract or other arrangement to support payment of all, or part of the obligations on the Bonds (other than providers of municipal bond insurance, letters of credit, or other liquidity or credit facilities). "Participating Underwriters" shall mean the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean each entity authorized and approved by the Securities and Exchange Commission from time to time to act as a repository for purposes of complying with the Rule. As of the date hereof, the Repository recognized by the Securities and Exchange Commission for such purpose is the MSRB, which currently accepts continuing disclosure submissions through EMMA. "Rule" shall mean the continuing disclosure requirements of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 19 34, as the same may be amended from time to time. "State" shall mean the State of Florida. SECTION 3. PROVISION OF ANNUAL REPORTS. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than each April 30th, commencing April 30, 2022 with respect to the report for the 2021 fiscal year, provide to any Repository in the electronic format as required and deemed acceptable by such Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certif icate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date provided, further, in such event unaudited financial statemen ts are required to be delivered as part of the Annual Report in accordance with Section 4(a) below. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5. (b) If on the fifteenth (15th) day prior to the annual filing date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Issuer by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 3(a). Upon such reminder, the Issuer shall either (i) provide the Dissemination Agent with an electronic copy of the Annual Report no later than two (2) business days prior to the annual filing date, or (ii) instruct the Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within the time required under this Agreement, state the date by which 11.D.4 Packet Pg. 506 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) 3 the Annual Report for such year will be provided and instruct the Dissemination Agent that a failure to file has occurred and to immediately send a notice to the Repository in substantially the form attached as Exhibit A, accompanied by a cover sheet completed by the Dissemination Agent in the form set forth in Exhibit B. (c) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of any Repository; (ii) if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing any Repository to which it was provided; and (iii) if the Dissemination Agent has not received an Annual Report by 6:00 p.m. Eastern time on the annual filing date (or, if such annual filing date falls on a Saturday, Sunday or holiday, then the first business day thereafter) for the Annual Report, a failure to file shall have occurred and the Issuer irrevocably directs the Dissemination Agent to immediately send a notice to the Repository in substantially the form attached as Exhibit A without reference to the anticipated filing date for the Annual Report, accompanied by a cover sheet completed by the Dissemination Agent in the form set forth in Exhibit B. SECTION 4. CONTENT OF ANNUAL REPORTS. The Issuer's Annual Report shall contain or include by reference the following: (a) the audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Issuer's audited financial statements are not available by the time the Annual Report is required to be filed p ursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement dated __________, 2021 (the "Official Statement"), and the audited financial statements shall be filed in the same manner as the Annual Report when they become available; and (b) updates of the historical financial and operating data set forth in the Official Statement under the captions: (i) Historical Sewer System and Water System Equivalent Residential Connections and Water and Sewer Accounts; (ii) Monthly Water Rates; (iii) Monthly Sewer Rate; (iv) Monthly Reuse Irrigation Rates; (v) Existing System Development Fees; and (vi) Historical Operating Results. The information provided under Section 4(b) may be included by specific reference to documents, including official statements of debt issues of the Issuer or related public entities, which are 11.D.4 Packet Pg. 507 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) 4 available to the public on the Repository's Internet Web site or filed with the Securities and Exchange Commission. The Issuer reserves the right to modify from time to time the specific types of information provided in its Annual Report or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the Issuer; provided that the Issuer agrees that any such modification will be done in a manner consistent with the Rule. SECTION 5. REPORTING OF SIGNIFICANT EVENTS. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds. Such notice shall be given in a timely manner not in excess of ten (10) business days after the occurrence of the event, with the exception of the event described in number 17 below, which notice shall be given in a timely manner: 1. principal and interest payment delinquencies; 2. non-payment related defaults, if material; 3. unscheduled draws on debt service reserves reflecting financial difficulties; 4. unscheduled draws on credit enhancements reflecting financial difficulties; 5. substitution of credit or liquidity providers, or their failure to perform; 6. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; 7. modifications to rights of the holders of the Bonds, if material; 8. Bond calls, if material, and tender offers; 9. defeasances; 10. release, substitution, or sale of property securing repayment of the Bonds, if material; 11. ratings changes; 12. an Event of Bankruptcy or similar event of an Obligated Person; 13. the consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a 11.D.4 Packet Pg. 508 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) 5 definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14. appointment of a successor or additional trustee or the change of name of a trustee, if material; 15. incurrence of a Financial Obligation of the Issuer or Obligated Person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer or Obligated Person, any of which affect security holders, if material; 16. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the Financial Obligation of the Issuer or Obligated Person, any of which reflect financial difficulties; and 15. notice of any failure on the part of the Issuer to meet the requirements of Section 3 hereof. (b) The notice required to be given in paragraph 5(a) above shall be filed with any Repository, in electronic format as prescribed by such Repository. SECTION 6. IDENTIFYING INFORMATION. In accordance with the Rule, all disclosure filings submitted pursuant to this Disclosure Certificate to any Repository must be accompanied by identifying information as prescribed by the Repository. Such information may include, but not be limited to: (a) the category of information being provided; (b) the period covered by any annual financial information, financial statement or other financial information or operation data; (c) the issues or specific securities to which such documents are related (including CUSIPs, issuer name, state, issue description/securities name, dated date, maturity date, and/or coupon rate); (d) the name of any Obligated Person other than the Issuer; (e) the name and date of the document being submitted; and (f) contact information for the submitter. SECTION 7. TERMINATION OF REPORTING OBLIGATION. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds, so long as there is no remaining liability of the Issuer, or if the Rule is repealed or no longer in effect. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5. SECTION 8. DISSEMINATION AGENT. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be Digital Assurance Certification, L.L.C. 11.D.4 Packet Pg. 509 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) 6 SECTION 9. AMENDMENT; WAIVER. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the holders or Beneficial Owners of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of holders or Beneficial Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or Beneficial Owners of the Bonds. Notwithstanding the foregoing, the Issuer shall have the right to adopt amendments to this Disclosure Certificate necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time. In the event of any amendment or waiver of a provision of this Disclosure Certif icate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 11. DEFAULT. The continuing disclosure obligations of the Issuer set forth herein constitute a contract with the holders of the Bonds. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by 11.D.4 Packet Pg. 510 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) 7 court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate; provided, however, the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with the provisions of this Disclosure Certificate shall be an action to compel performance. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution. SECTION 12. DUTIES, IMMUNITIES AND LIABILITIES OF DISSEMINATION AGENT. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate . The Dissemination Agent’s obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Dissemination Agent as required by this Disclosure Certificate. The Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Dissemination Agent shall have no duty or obligation to review or verify any Information or any other information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the Bonds or any other party. The Dissemination Agent shall have no responsibility for the Issuer’s failure to report to the Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this Disclosure Certificate. The Dissemination Agent may conclusively rely upon Certifications of the Issuer at all times. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and defeasance, redemption or payment of the Bonds. (b) The Dissemination Agent may, from time to time, consult with legal counsel (either in - house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and expenses of such counsel shall be payable by the Issuer. (c) All documents, reports, notices, statements, information and other materials provided to the MSRB under this Agreement shall be provided in an electronic format and accompanied by identifying information as prescribed by the MSRB. [Remainder of page intentionally left blank] 11.D.4 Packet Pg. 511 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) 8 SECTION 13. BENEFICIARIES. This Disclosure Certificate shall inure solel y to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Dated as of _____________, 2021 COLLIER COUNTY WATER-SEWER DISTRICT By: Name: Penny Taylor Title: Chairman Approved as to Form and Legal Sufficiency: By: Name: Jeffrey A. Klatzkow Title: County Attorney ACKNOWLEDGED BY: DIGITAL ASSURANCE CERTIFICATION L.L.C., as Dissemination Agent By: Name: Title: 11.D.4 Packet Pg. 512 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) A-1 EXHIBIT A NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Issuer: Obligated Person: Name(s) of Bond Issue(s): Date(s) of Issuance: Date(s) of Disclosure Agreement: CUSIP Number: NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate between the Issuer and Digital Assurance Certification, L.L.C., as Dissemination Agent. [The Issuer has notified the Dissemination Agent that it anticipates that the Annual Report will be filed by______________]. Dated:_____________________________ Digital Assurance Certification, L.L.C., as Dissemination Agent, on behalf of the Issuer __________________________________________ cc: 11.D.4 Packet Pg. 513 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) B-1 EXHIBIT B EVENT NOTICE COVER SHEET This cover sheet and accompanying "event notice" will be sent to the MSRB, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D). Issuer’s and/or Other Obligated Person’s Name: ____________________________________________________________________________________________ Issuer’s Six-Digit CUSIP Number: ____________________________________________________________________________________________ ____________________________________________________________________________________________ or Nine-Digit CUSIP Number(s) of the bonds to which this event notice relates: ____________________________________________________________________________________________ Number of pages attached: _____ ____ Description of Notice Events (Check One): 1. "Principal and interest payment delinquencies;" 2. "Non-Payment related defaults, if material;" 3. "Unscheduled draws on debt service reserves reflecting financial difficulties;" 4. "Unscheduled draws on credit enhancements reflecting financial difficulties;" 5. "Substitution of credit or liquidity providers, or their failure to perform;" 6. "Adverse tax opinions, IRS notices or events affecting the tax status of the security;" 7. "Modifications to rights of securities holders, if material;" 8. "Bond calls, if material;" 9. "Defeasances;" 10. "Release, substitution, or sale of property securing repayment of the securities, if material;" 11. "Rating changes;" 12. "Tender offers;" 13. "Bankruptcy, insolvency, receivership or similar event of the obligated person;" 14. "Merger, consolidation, or acquisition of the obligated person, if material;" and 15. "Appointment of a successor or additional trustee, or the change of name of a trustee, if material." 16. "Incurrence of a Financial Obligation of the Issuer or Obligated Person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer or Obligated Person, any of which affect secur ity holders, if material;" and 17. "Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the Financial Obligation of the Issuer or Obligated Person, any of which reflect financial difficulties." ____ Failure to provide annual financial information as required. 11.D.4 Packet Pg. 514 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) B-2 I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly: Signature: ____________________________________________________________________________________________ Name: ____________________________________ Title: ____________________________________________ Digital Assurance Certification, L.L.C. 315 E. Robinson Street, Suite 300 Orlando, FL 32801 407-515-1100 Date: 11.D.4 Packet Pg. 515 Attachment: EXHIBIT D - Form of Continuing Disclosure Certificate (16200 : Series 2021 Bond) RESOLUTION NO. 2021-____/CWS RESOLUTION NO. 2021-___ A RESOLUTION SUPPLEMENTING RESOLUTION NO. CWS-85-13 IN CERTAIN RESPECTS, WHICH RESOLUTION NO. CWS-85-13, AMONG OTHER THINGS, RESTATED RESOLUTION NO. CWS-85-5 IN ITS ENTIRETY AND AUTHORIZED THE ISSUANCE BY THE COLLIER COUNTY WATER-SEWER DISTRICT OF WATER AND SEWER REVENUE BONDS FROM TIME TO TIME; AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $145,000,000 AGGREGATE PRINCIPAL AMOUNT OF COLLIER COUNTY WATER-SEWER DISTRICT WATER AND SEWER REVENUE BONDS, SERIES 2021 IN ORDER TO FINANCE THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF VARIOUS UTILITY CAPITAL IMPROVEMENTS WITHIN COLLIER COUNTY; MAKING CERTAIN COVENANTS AND AGREEMENTS WITH RESPECT TO SAID BONDS; AUTHORIZING THE AWARDING OF SAID BONDS PURSUANT TO A PUBLIC BID; DELEGATING CERTAIN AUTHORITY TO THE COUNTY MANAGER FOR THE AWARD OF THE BONDS AND THE APPROVAL OF THE TERMS AND DETAILS OF SAID BONDS; AUTHORIZING THE PUBLICATION OF A NOTICE OF SALE FOR THE BONDS OR A SUMMARY THEREOF; AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL PRELIMINARY OFFICIAL STATEMENT AND THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT WITH RESPECT THERETO; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; ESTABLISHING A BOOK-ENTRY SYSTEM OF REGISTRATION FOR THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE CERTIFICATE; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, ACTING AS THE EX-OFFICIO GOVERNING BOARD OF THE COLLIER COUNTY WATER-SEWER DISTRICT: SECTION 1. FINDINGS. It is hereby found and determined that: (A)On July 30, 1985, the Board of County Commissioners of Collier County, Florida, acting as the ex-officio governing board (the "Governing Body") of the Collier County Water-Sewer District (the "Issuer") duly adopted Resolution No. CWS-85-5, as amended and restated by Resolution No. CWS-85-13 duly adopted on December 26, 1985, 11.D.5 Packet Pg. 516 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 2 as amended and supplemented (collectively, the "Resolution"), for the purposes described therein. (B) There are currently Outstanding (as defined in the Resolution) under the Resolution the Issuer's Water and Sewer Refunding Revenue Bond, Series 2013, Water and Sewer Refunding Revenue Bond, Series 2015, Water and Sewer Refunding Revenue Bonds, Series 2016, Water and Sewer Revenue Bond, Series 2018 and Water and Sewer Revenue Bonds, Series 2019 (collectively, the "Outstanding Parity Bonds"). (C) There are various utility capital improvements required to be made within Collier County, Florida (the "County") in order to maintain and protect the health, safety and welfare of the citizens of the County, which capital improvements are generally described in Exhibit A attached hereto and more particularly described in the plans and specifications on file with the Issuer, as the same may be amended and supplemented from time to time (collectively, the "Project"). (D) The Resolution provides for the issuance of Additional Bonds (as defined in the Resolution) payable on parity under the Resolution with the Outstanding Parity Bonds for the purpose of financing costs of the Project, upon meeting certain requirements set forth in the Resolution. (E) The Issuer deems it to be in its best interest to issue its Collier County Water- Sewer District Water and Sewer Revenue Bonds, Series 2021 (the "Series 2021 Bonds") for the principal purpose of financing costs of the Project, which Series 2021 Bonds shall be issued on parity with the Outstanding Parity Bonds, all in accordance with and pursuant to the terms of the Resolution. (F) In accordance with Section 218.385, Florida Statutes, and pursuant to this Supplemental Resolution (as defined in the Resolution), the Series 2021 Bonds shall be advertised for competitive bids pursuant to the Official Notice of Sale, the form of which is attached hereto as Exhibit B (the "Official Notice of Sale"). (G) Pursuant to the Official Notice of Sale, any competitive bids received in accordance with the Official Notice of Sale on or prior to the time and date determined by the County Manager upon the advice of the Issuer's financial advisor, PFM Financial Advisors LLC (the "Financial Advisor"), in accordance with the terms and provisions of the Official Notice of Sale, shall be publicly opened and announced. (H) It is desirable for the Issuer to be able to advertise and award the Series 2021 Bonds at the most advantageous time and date which shall be determined by the County Manager upon the advice of the Financial Advisor; and, accordingly, the Issuer hereby determines to delegate the advertising and awarding of the Series 2021 Bonds to the County Manager within the parameters described herein. 11.D.5 Packet Pg. 517 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 3 (I) It is necessary and appropriate that the Governing Body determine certain parameters for the terms and details of the Series 2021 Bonds and to delegate certain authority to the County Manager for the award of the Series 2021 Bonds and the approval of the terms of the Series 2021 Bonds in accordance with the provisions hereof, of the Resolution and of the Official Notice of Sale. (J) In the event Bond Counsel to the Issuer shall determine that the Series 2021 Bonds have not been awarded competitively in accordance with the provisions of Section 218.385, Florida Statutes, the Governing Body shall adopt such resolutions and make such findings as shall be necessary to authorize and ratify a negotiated sale of the Series 2021 Bonds in accordance with said Section 218.385, Florida Statutes. (K) The Issuer hereby certifies that it is current in all deposits into the various funds and accounts established by the Resolution and all payments theretofore required to have been deposited or made by the Issuer under the provisions of the Resolution have been deposited or made and the Issuer has complied with the covenants and agreements of the Resolution and is not currently in default under the Resolution. (L) The Resolution provides that the Series 2021 Bonds shall mature on such dates and in such amounts, shall bear such rates of interest, shall be payable in such places and shall be subject to such redemption provisions as shall be determined by Supplemental Resolution adopted by the Issuer; and it is now appropriate that the Issuer set forth the parameters and mechanism to determine such terms and details. (M) The Series 2021 Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of any constitutional or statutory provision but shall be special obligations of the Issuer, payable solely from and secured by a lien upon and pledge of the Pledged Funds (as defined in the Resolution), in the manner and to the extent provided in the Resolution. (N) The covenants, pledges and conditions in the Resolution shall be applicable to the Series 2021 Bonds herein authorized and said Series 2021 Bonds shall be on parity with and rank equally as to the lien on and source and security for payment from the Pledged Funds and in all other respects with the Outstanding Parity Bonds and shall constitute "Bonds" within the meaning of the Resolution. SECTION 2. DEFINITIONS. When used in this Resolution, the terms defined in the Resolution shall have the meanings therein stated, except as such definitions may be hereinafter amended or defined. SECTION 3. AUTHORITY FOR THIS SUPPLEMENTAL RESOLUTION; AUTHORIZATION OF FINANCING OF THE PROJECT. This Supplemental Resolution is adopted pursuant to the provisions of the Act and the Resolution. The Issuer hereby authorizes the financing of Costs of the acquisition, 11.D.5 Packet Pg. 518 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 4 construction and equipping of the Project. Proceeds of the Series 2021 Bonds may be used to reimburse Costs of the Project in accordance with applicable provisions of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. SECTION 4. DESCRIPTION OF THE SERIES 2021 BONDS. The Issuer hereby authorizes the issuance of a Series of Bonds in the aggregate principal amount of not exceeding $145,000,000 to be known as the "Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2021" (or such other series designation as the County Manager may determine), for the principal purpose of financing Costs of the Project. The aggregate principal amount of the Series 2021 Bonds to be issued pursuant to the Resolution shall be determined by the County Manager provided such aggregate principal amount does not exceed $145,000,000. The Series 2021 Bonds shall be dated as of their date of delivery or such other date as the County Manager may determine, shall be issued in the form of fully registered Bonds in denominations of $5,000 or any integral multiple thereof, shall be numbered consecutively from one upward in order of maturity preceded by the letter "R", shall bear interest from the dated date determined therefor, payable semi-annually, on January 1 and July 1 of each year (the "Interest Dates"), commencing on January 1, 2022, or such other dates as may be determined by the County Manager. Interest on the Series 2021 Bonds shall be payable by check or draft of U.S. Bank, National Association, Fort Lauderdale, Florida, as Paying Agent (the "Paying Agent"), made payable and mailed to the Holder in whose name such Series 2021 Bonds shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding the applicable Interest Date, or, at the request of such Holder, by bank wire transfer to the account of such Holder. Principal of or Redemption Price, if applicable, on the Series 2021 Bonds is payable to the Holder when due by check, draft or bank wire transfer. The principal of, Redemption Price, if applicable, and interest on the Series 2021 Bonds are payable in lawful money of the United States of America. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Series 2021 Bonds shall bear interest at such rates and yields, shall mature on July 1 of each of the years and in the principal amounts corresponding to such years, and shall have such redemption provisions as determined by the County Manager subject to the conditions set forth in Sections 4, 5 and 6 hereof and the provisions of the Official Notice of Sale. The final maturity of the Series 2021 Bonds shall not be later than July 1, 2051. All of the terms of the Series 2021 Bonds will be included in a certificate to be executed by the County Manager, or his designee, following the award of the Series 2021 Bonds (the "Award Certificate") and shall be set forth in the final Official Statement, as described herein. SECTION 5. AWARD OF SERIES 2021 BONDS. The County Manager, on behalf of the Issuer and only in accordance with the terms hereof and of the Official 11.D.5 Packet Pg. 519 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 5 Notice of Sale, shall award the Series 2021 Bonds to the underwriter or underwriters (the "Underwriters") that submit a bid proposal which complies in all respects with the Resolution, this Supplemental Resolution and the Official Notice of Sale and offers to purchase the Series 2021 Bonds at the lowest true interest cost to the Issuer, as calculated by the Issuer's Financial Advisor in accordance with the terms and provisions of the Official Notice of Sale; provided, however, the Series 2021 Bonds shall not be awarded to any bidder unless the true interest cost with respect to the Series 2021 Bonds (as calculated by the Issuer's Financial Advisor) is equal to or less than 4.50%. In accordance with the provisions of the Official Notice of Sale, the County Manager may, in his sole discretion, reject any and all bids. SECTION 6. REDEMPTION PROVISIONS FOR SERIES 2021 BONDS. The Series 2021 Bonds may be redeemed prior to their respective maturities from any moneys legally available therefor, upon notice as provided in the Resolution, upon the terms and provisions as determined by the County Manager, in his discretion and upon the advice of the Financial Advisor; provided, however, with respect to optional redemption terms for the Series 2021 Bonds, if any, the first optional redemption date may be no later than July 1, 2031 and there shall be no call premium relating to any redemption. Terms Bonds may be established in accordance with the provisions of the Official Notice of Sale. The redemption provisions for the Series 2021 Bonds, if any, shall be set forth in the Award Certificate and in the final Official Statement. Notwithstanding the foregoing, the County Manager, upon the advice of the Financial Advisor, may determine to issue the Series 2021 Bonds without any optional redemption provisions. SECTION 7. FULL BOOK-ENTRY. Notwithstanding the provisions set forth in Section 2.08 of the Resolution, the Series 2021 Bonds shall be initially issued in the form of a separate single certificated fully registered Series 2021 Bond for each of the maturities of the Series 2021 Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). As long as the Series 2021 Bonds are registered in the name of Cede & Co., all of the Outstanding Series 2021 Bonds shall be registered in the registration books kept by the Registrar in the name of Cede & Co., all payments of principal on the Series 2021 Bonds shall be made by the Paying Agent by check or draft or by bank wire transfer to Cede & Co., as Holder of the Series 2021 Bonds, upon presentation of the Series 2021 Bonds to be paid, to the Paying Agent. With respect to Series 2021 Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation to any direct or indirect participant in the DTC book-entry program (the "Participants"). Without limiting the immediately preceding sentence, the Issuer, the Registrar and the Paying A gent shall have no responsibility or obligation with respect to (A) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest on the Series 2021 Bonds, 11.D.5 Packet Pg. 520 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 6 (B) the delivery to any Participant or any other Person other than a Bondholder, as shown in the registration books kept by the Registrar, of any notice with respect to the Series 2021 Bonds, including any notice of redemption, or (C) the payment to any Participant or any other Person, other than a Bondholder, as shown in the registration books kept by the Registrar, of any amount with respect to principal of, Redemption Price, if any, or interest on the Series 2021 Bonds. The Issuer, the Registrar and the Paying Agent may treat and consider the Person in whose name each Series 2021 Bond is registered in the registration books kept by the Registrar as the Holder and absolute owner of such Bond for the purpose of payment of principal, Redemption Price, if any, and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent shall pay all principal of, Redemption Price, if any, and interest on the Series 2021 Bonds only to or upon the order of the respective Holders, as shown in the registration books kept by the Registrar, or their respective attorneys duly authorized in writing, as provided herein and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of, Redemption Price, if any, and interest on the Series 2021 Bonds to the extent of the sum or sums so paid. No Person other than a Holder, as shown in the registration books kept by the Registrar, shall receive a certificated Bond evidencing the obligation of the Issuer to make payments of principal, Redemption Price, if any, and interest pursuant to the provisions of the Resolution. Upon delivery by DTC to the Issuer of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in the Resolution with respect to transfers during the 15 days next preceding an Interest Date or first mailing of notice of redemption, the words "Cede & Co." in this Supplemental Resolution shall refer to such new nominee of DTC; and upon receipt of such notice, the Issuer shall promptly deliver a copy of the same to the Registrar and the Paying Agent. Upon (A) receipt by the Issuer of written notice from DTC (i) to the effect that a continuation of the requirement that all of the outstanding Series 2021 Bonds be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, is not in the best interest of the beneficial owners of the Series 2021 Bonds or (ii) to the effect that DTC is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of DTC hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms, or (B) determination by the Issuer that such book-entry only system is burdensome or undesirable to the Issuer and compliance by the Issuer with all applicable policies and procedures of DTC regarding discontinuing the book-entry only registration system, the Series 2021 Bonds shall no longer be restricted to being registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names Holders shall designate, in accordance with the provisions of the Resolution. In such event, the Issuer shall issue and the Registrar shall authenticate, transfer and exchange the Series 2021 Bonds of like principal amount and maturity, in 11.D.5 Packet Pg. 521 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 7 denominations of $5,000 or any integral multiple thereof to the Holders thereof. The foregoing notwithstanding, until such time as participation in the book-entry only system is discontinued, the provisions set forth in the Blanket Issuer Letter of Representations previously executed by the Issuer and delivered to DTC shall apply to the payment of principal of, premium, if any, and interest on the Series 2021 Bonds. SECTION 8. APPLICATION OF SERIES 2021 BOND PROCEEDS. The proceeds derived from the sale of the Series 2021 Bonds shall be applied by the Issuer as follows: (A) A sufficient amount of the Series 2021 Bond proceeds shall be deposited in the "2021 Project Account" of the Construction Fund, which 2021 Project Account is hereby established. Such proceeds shall be used to pay Costs of the Project and the 2021 Project Account shall be administered in accordance with the provisions of Section 4.03 of the Resolution. (B) A sufficient amount of the Series 2021 Bond proceeds shall be deposited to the Reserve Account to cause the amount on deposit therein to equal the Reserve Account Requirement for all Outstanding Parity Bonds and the Series 2021 Bonds. (C) A sufficient amount of the Series 2021 Bond proceeds shall be applied to the payment of costs and expenses relating to the issuance of the Series 2021 Bonds. Any Series 2021 Bond Proceeds that remain after all costs of issuance have been paid shall be transferred to the Debt Service Account to pay scheduled debt service on the Series 2021 Bonds. SECTION 9. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution and use of the Preliminary Official Statement in substantially the form attached hereto as Exhibit C in connection with the offering of the Series 2021 Bonds for sale. If between the date hereof and the mailing of the Preliminary Official Statement, it is necessary to make insertions, modifications or changes in the Preliminary Official Statement, the Chairman and the County Manager are each hereby authorized to approve such insertions, changes and modifications. The Chairman and the County Manager are each hereby authorized to deem the Preliminary Official Statement "final" within the meaning of Rule 15c2-12(b)(1) under the Securities Exchange Act of 1934 in the form as mailed. Execution of a certificate by the Chairman or the County Manager deeming the Preliminary Official Statement "final" as described above shall be conclusive evidence of the approval of any insertions, changes or modifications. SECTION 10. OFFICIAL STATEMENT. The form, terms and provisions of the Official Statement relating to the Series 2021 Bonds shall be substantially as set forth in the Preliminary Official Statement and shall include all of the specific financial terms of the Series 2021 Bonds. Subject in all respects to the award of the Series 2021 Bonds in accordance with this Supplemental Resolution and the Official Notice of Sale, the 11.D.5 Packet Pg. 522 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 8 Chairman is hereby authorized and directed to execute and deliver said Official Statement in the name and on behalf of the Issuer, and thereupon to cause such Official Statement to be delivered to the Underwriters with such changes, amendments, modifications, omissions and additions as may be approved by the Chairman. Said Official Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chairman and the information contained therein are hereby authorized to be used in connection with the sale of the Series 2021 Bonds to the public. Execution by the Chairman of the Official Statement shall be deemed to be conclusive evidence of approval of such changes. SECTION 11. OFFICIAL NOTICE OF SALE. The form of the Official Notice of Sale attached hereto as Exhibit B and the terms and provisions thereof are hereby authorized and approved. The County Manager is hereby authorized to make such changes, insertions and modifications as he shall deem necessary prior to the advertisement of such Official Notice of Sale or a summary thereof. The County Manager is hereby authorized to cause the advertisement and publication of the Official Notice of Sale or a summary thereof at such time as he shall deem necessary and appropriate, upon the advice of the Issuer's Financial Advisor, to accomplish the competitive sale of the Series 2021 Bonds. SECTION 12. APPOINTMENT OF PAYING AGENT AND REGISTRAR. Subject in all respects to the award of the Series 2021 Bonds in accordance with this Supplemental Resolution and the Official Notice of Sale, U.S. Bank National Association, Fort Lauderdale, Florida, is hereby designated Registrar and Paying Agent for the Series 2021 Bonds. The Chairman and/or the Clerk are hereby authorized to enter into any agreement which may be necessary to effect the transactions contemplated by this Section 12 and by the Resolution. SECTION 13. SECONDARY MARKET DISCLOSURE. Subject in all respects to the award of the Series 2021 Bonds in accordance with this Supplemental Resolution and the Official Notice of Sale, the Issuer hereby covenants and agrees that, in order to provide for compliance by the Issuer with the secondary market disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the Issuer and dated the date of delivery of the Series 2021 Bonds, as it may be amended from time to time in accordance with the terms thereof. The Continuing Disclosure Certificate shall be substantially in the form attached hereto as Exhibit D with such changes, amendments, modifications, omissions and additions as shall be approved by the Chairman who is hereby authorized to execute and deliver such Certificate. Notwithstanding any other provision of the Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default under the Resolution; provided, however, any Series 2021 Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this 11.D.5 Packet Pg. 523 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 9 Section 13 and the Continuing Disclosure Certificate. For purposes of this Section 13, "Series 2021 Bondholder" shall mean any Person who (A) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2021 Bonds (including persons holding Series 2021 Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Series 2021 Bonds for federal income tax purposes. SECTION 14. GENERAL AUTHORITY. The members of the Governing Body, the County Manager, the Clerk and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this Supplemental Resolution, the Resolution, the Official Notice of Sale, the Official Statement, the Escrow Deposit Agreement or the Continuing Disclosure Certificate or desirable or consistent with the requirements hereof or the Resolution, the Official Notice of Sale, the Official Statement, the Escrow Deposit Agreement or the Continuing Disclosure Certificate for the full punctual and complete performance of all the terms, covenants and agreements contained herein or in the Series 2021 Bonds, the Resolution, the Official Notice of Sale, the Official Statement, the Escrow Deposit Agreement and the Continuing Disclosure Certificate and each member, employee, attorney and officer of the Issuer or the Governing Body and the Clerk is hereby authorized and directed to execute and deliver any and all papers and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. If the County Manager is unavailable or unable at any time to perform any duties or functions hereunder, including but not limited to those described in Sections 4, 5 and 6 hereof, the Chairman is hereby authorized to act on his behalf. Bond Counsel and the Issuer's Financial Advisor are hereby authorized and directed to take all action necessary and desirable to carry-out the intent and purposes of this Supplemental Resolution. SECTION 15. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Series 2021 Bonds. SECTION 16. RESOLUTION TO CONTINUE IN FORCE. Except as herein expressly provided, the Resolution and all the terms and provisions thereof are and shall remain in full force and effect. 11.D.5 Packet Pg. 524 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) 10 SECTION 17. EFFECTIVE DATE. This Supplemental Resolution shall become effective immediately upon its adoption. DULY ADOPTED this 22nd day of June, 2021. BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, AS THE EX-OFFICIO CHAIRMAN OF THE GOVERNING BOARD OF THE COLLIER COUNTY WATER-SEWER DISTRICT Penny Taylor, Chairman ATTEST: Crystal K. Kinzel, Clerk of the Circuit Court and Comptroller of Collier County, Florida and Ex-Officio Clerk of the Board of County Commissioners Approved as to form and legal sufficiency: Jeffrey A. Klatzkow, County Attorney 11.D.5 Packet Pg. 525 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) EXHIBIT A GENERAL DESCRIPTION OF THE PROJECT General: Expansion of water and wastewater system capacity in Golden Gate City and surrounding area; and expansion of water and wastewater utilities in the northeast service area. Golden Gate City: Potable Water -- Construction of new water transmission mains including hydrants and other appurtenances necessary to expand potable water service to currently unserved areas. Wastewater -- Construction of 4 MGD of wastewater treatment capacity including associated pipelines and other utility facilities as necessary to expand to currently unserved areas. Northeast Service Area: Construction of deep injection wells, monitoring wells, raw water wells, raw water, potable water, IQ water, power, SCADA and wastewater transmission mains and pipelines, storage tanks, pump stations, appurtenances, sitework and landscaping necessary to enable future production, treatment, distribution and collection in the northeast service area. Design updates of future northeast regional treatment facilities. Government Operation Business Park: Design, permitting and construction of a facility for the Collier County Water-Sewer District's business operations and the water and wastewater field operations. 11.D.5 Packet Pg. 526 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) EXHIBIT B FORM OF OFFICIAL NOTICE OF SALE 11.D.5 Packet Pg. 527 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) EXHIBIT C FORM OF PRELIMINARY OFFICIAL STATEMENT 11.D.5 Packet Pg. 528 Attachment: Supplemental Resolution (16200 : Series 2021 Bond) EXHIBIT D FORM OF CONTINUING DISCLOSURE CERTIFICATE 11.D.5 Packet Pg. 529 Attachment: Supplemental Resolution (16200 : Series 2021 Bond)