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Backup Documents 04/12/2016 Item #11A ORIGINAL DOCUMENTS CHECKLIST & ROUTING SLIP TO ACCOMPANY ALL ORIGINAL DOCUMENTS SENT TO 1 A THE BOARD OF COUNTY COMMISSIONERS OFFICE FOR SIGNATU Print on pink paper. Attach to original document. The completed routing slip and original documents are to be forwarded to the County Attorney Office at the time the item is placed on the agenda. All completed routing slips and original documents must be received in the County Attorney Office no later than Monday preceding the Board meeting. **NEW** ROUTING SLIP Complete routing lines#1 through#2 as appropriate for additional signatures,dates,and/or information needed. If the document is already complete with the exception of the Chairman's signature,draw a line through routing lines#1 through#2,complete the checklist,and forward to the County Attorney Office. Route to Addressee(s) (List in routing order) Office Initials Date 1. 2. 3. County Attorney Office County Attorney Office JAK 56, /16 �r '``�� 4. BCC Office Board of County Commissioners VWS/ s'41,1L, 5. Minutes and Records Clerk of Court's Office 5(4(Ib 11:0'ialn PRIMARY CONTACT INFORMATION Normally the primary contact is the person who created/prepared the Executive Summary. Primary contact information is needed in the event one of the addressees above,may need to contact staff for additional or missing information. Name of Primary Staff Derek Johnsen,Assistant Finance Director 252-7863 Contact/Department Agenda Date Item was 4/12/16 Agenda Item Number 11-A Approved by the BCC Type of Document Resol ion—RevAue Botts Number of Original One Attached*—. '1 1 S I VI)I Documents Attached PO number or account N/A number if document is to be recorded INSTRUCTIONS & CHECKLIST Initial the Yes column or mark"N/A"in the Not Applicable column,whichever is Yes N/A(Not appropriate. (Initial) Applicable) 1. Does the document require the chairman's original signatur Stamp OK JAK 2. Does the document need to be sent to another agency for additi res? If yes, JAK provide the Contact Information(Name;Agency;Address;Phone)on an attached sheet. 3. Original document has been signed/initialed for legal sufficiency. (All documents to be JAK signed by the Chairman,with the exception of most letters,must be reviewed and signed by the Office of the County Attorney. 4. All handwritten strike-through and revisions have been initialed by the County Attorney's JAK Office and all other parties except the BCC Chairman and the Clerk to the Board 5. The Chairman's signature line date has been entered as the date of BCC approval of the JAK document or the fmal negotiated contract date whichever is applicable. 6. "Sign here"tabs are placed on the appropriate pages indicating where the Chairman's JAK signature and initials are required. 7. In most cases(some contracts are an exception),the original document and this routing slip JAK should be provided to the County Attorney Office at the time the item is input into SIRE. Some documents are time sensitive and require forwarding to Tallahassee within a certain time frame or the BCC's actions are nullified. Be aware of your deadlines! 8. The document was approved by the BCC on 4/12/16 and all changes made during the JAK Vis.V meeting have been incorporated in the attached document. The County Attorney's Office has reviewed the changes,if applicable. �` ` 9. Initials of attorney verifying that the attached document is the version approve. . cs . BCC,all changes directed by the BCC have been made,and the document is eady for the Chairman's signature. Please contact Derek Johngsen when ready. I:Forms/County Forms/BCC Forms/Original Documents Routing Slip WWS Original 9.03.04,Revised 1.26.05,Revised 2.24.05;Revised 11/30/12 11A Ann P. Jennejohn From: Ann P.Jennejohn Sent: Wednesday, May 04, 2016 11:38 AM To: Derek M.Johnssen Subject: Resolution 2016-71/CWS 2016-01 (4-12-2016 Item #11A) Attachments: Resolution 2016-071.pdf A copy of Resolutiovt 2016-71, authorizivtg the issuavtce of the Collier Couvtty Water-Sewer District Water avid Sewer Refuvtdirtg Revevtue 13ovtd, Series 2016 to refuvtd the outstavtdivtg balm/Ice of the District's Water avid Sewer Series 2OO6 Bonds, is attached for your records. Thavtk you. Avtvt Jevtvtejohvt, Deputy Clerk Clerk of the Circuit Court Clerk to the Value Adjustwtevtt Board Collier Couvtty Board Mivtutes & Records Dept. 239-252-8406 Fax 239-252-8408 1 1 A RESOLUTION 2016-71 /CWS RESOLUTION 2016- 01 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 CURRENT REFUNDING OF ALL OF THE OUTSTANDING COLLIER COUNTY WATER-SEWER DISTRICT WATER AND SEWER REVENUE BONDS, SERIES 2006 IN ORDER TO ACHIEVE DEBT SERVICE SAVINGS; AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $60,000,000 AGGREGATE PRINCIPAL AMOUNT OF COLLIER COUNTY WATER-SEWER DISTRICT WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2016 IN ORDER. TO REFUND SUCH SERIES 2006 BONDS; 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 CHAIRWOMAN 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 A PRELIMINARY OFFICIAL STA I'EMENT AND THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT WITH RESPECT THERETO; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT AND THE APPOINTMENT OF AN ESCROW AGENT THERETO; 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. 1 1 A 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 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, as amended and supplemented(collectively,the "Resolution"), for the purposes described therein. (B) The Issuer previously issued its Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2006 (the "Series 2006 Bonds") pursuant to the Resolution for the purpose of fmancing and refinancing certain capital improvements to the Issuer's System(as defined in the Resolution). (C) There are currently Outstanding (as defmed in the Resolution) under the Resolution the Issuer's Water and Sewer Refunding Revenue Bond, Series 2009, Water and Sewer Refunding Revenue Bond, Series 2013 and Water and Sewer Refunding Revenue Bond, Series 2015 (collectively,the "Outstanding Parity Bonds"). (D) The Resolution provides for the issuance of Additional Bonds payable on a parity under the Resolution with the Outstanding Parity Bonds for the purpose of current refunding all the outstanding Series 2006 Bonds (the "Refunded Bonds"), 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 Refunding Revenue Bonds, Series 2016 (the "Series 2016 Bonds") for the principal purpose of current refunding the Refunded Bonds in order to achieve debt service savings, which Series 2016 Bonds shall be issued on parity with the Outstanding Parity Bonds, all in accordance with and pursuant to the terms of the Resolution. (F) For the payment and refunding of the Refunded Bonds, the Issuer shall, as provided herein, deposit part of the proceeds derived from the sale of the Series 2016 Bonds, together with other legally available moneys of the Issuer, in an escrow deposit trust fund to purchase direct U.S. Treasury obligations (the "Refunding Securities") which shall be sufficient, together with investment earnings therefrom and a cash deposit, to pay the Refunded Bonds as the same become due and payable or are redeemed prior to maturity, all as provided herein and the hereinafter defmed Escrow Deposit Agreement. Subsequent to the defeasance of the Refunded Bonds, the Refunded Bonds shall no longer be payable from or secured by the Pledged Funds (as defined in the Resolution) pledged therefor pursuant to the Resolution. 2 1 1 A (G) In accordance with Section 218.385, Florida Statutes, and pursuant to this Supplemental Resolution (as defined in the Resolution), the Series 2016 Bonds shall be advertised for competitive bids pursuant to the Official Notice of Sale, the form of which is attached hereto as Exhibit A (the "Official Notice of Sale"). (H) 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 Chairwoman upon the advice of the Issuer's financial advisor, Public Financial Management, Inc. (the "Financial Advisor"), in accordance with the terms and provisions of the Official Notice of Sale, shall be publicly opened and announced. (I) It is desirable for the Issuer to be able to advertise and award the Series 2016 Bonds at the most advantageous time and date which shall be determined by the Chairwoman upon the advice of the Financial Advisor; and, accordingly, the Issuer hereby determines to delegate the advertising and awarding of the Series 2016 Bonds to the Chairwoman within the parameters described herein. (J) It is necessary and appropriate that the Board determine certain parameters for the terms and details of the Series 2016 Bonds and to delegate certain authority to the Chairwoman for the award of the Series 2016 Bonds and the approval of the terms of the Series 2016 Bonds in accordance with the provisions hereof, of the Resolution and of the Official Notice of Sale. (K) In the event Bond Counsel to the Issuer shall determine that the Series 2016 Bonds have not been awarded competitively in accordance with the provisions of Section 281.385, Florida Statutes, the Board shall adopt such resolutions and make such fmdings as shall be necessary to authorize and ratify a negotiated sale of the Series 2016 Bonds in accordance with said Section 218.385,Florida Statutes. (L) 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. (M) The Resolution provides that the Series 2016 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. (N) The Series 2016 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 3 1 1 A secured by a lien upon and pledge of the Pledged Funds, in the manner and to the extent provided in the Resolution. (0) The covenants, pledges and conditions in the Resolution shall be applicable to the Series 2016 Bonds herein authorized and said Series 2016 Bonds shall be on a 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 defmitions may be hereinafter amended or defined. SECTION 3. AUTHORITY FOR THIS SUPPLEMENTAL RESOLUTION; AUTHORIZATION OF REFUNDING OF REFUNDED BONDS. This Supplemental Resolution is adopted pursuant to the provisions of the Act and the Resolution. The Issuer hereby authorizes the refunding of the Refunded Bonds in accordance with the provisions hereof and of the Resolution in order to achieve debt service savings. SECTION 4. DESCRIPTION OF THE SERIES 2016 BONDS. The Issuer hereby authorizes the issuance of a Series of Bonds in the aggregate principal amount of not exceeding $60,000,000 to be known as the "Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016" (or such other series designation as the Chairwoman may determine), for the principal purpose of refunding the Refunded Bonds. The aggregate principal amount of the Series 2016 Bonds to be issued pursuant to the Resolution shall be determined by the Chairwoman provided such aggregate principal amount does not exceed $60,000,000. The Series 2016 Bonds shall be dated as of their date of delivery or such other date as the Chairwoman 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 July 1 and January 1 of each year (the "Interest Dates"), commencing on January 1, 2017, or such other dates as may be determined by the Chairwoman. Interest on the Series 2016 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 2016 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 2016 Bonds is payable to the Holder upon presentation, when due, at the designated corporate trust office of the 4 1 1 A Paying Agent. The principal of, Redemption Price, if applicable, and interest on the Series 2016 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 2016 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 Chairwoman subject to the conditions set forth in Sections 4, 5 and 6 hereof and the provisions of the Official Notice of Sale. The fmal maturity of the Series 2016 Bonds shall not be later than July 1, 2036. All of the terms of the Series 2016 Bonds will be included in a certificate to be executed by the Chairwoman, or her designee, following the award of the Series 2016 Bonds (the "Award Certificate") and shall be set forth in the fmal Official Statement, as described herein. SECTION 5. AWARD OF SERIES 2016 BONDS. The Chairwoman, on behalf of the Issuer and only in accordance with the terms hereof and of the Official Notice of Sale, shall award the Series 2016 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 2016 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 2016 Bonds shall not be awarded to any bidder unless the net present value savings with respect to the refunding of the Refunded Bonds (as calculated by the Issuer's Financial Advisor) is equal to or greater than 5.00% of the principal amount of the Refunded Bonds. In accordance with the provisions of the Official Notice of Sale, the Chairwoman may, in her sole discretion, reject any and all bids. SECTION 6. REDEMPTION PROVISIONS FOR SERIES 2016 BONDS. The Series 2016 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 Chairwoman, in her discretion and upon the advice of the Financial Advisor; provided, however, with respect to optional redemption terms for the Series 2016 Bonds, if any, the first optional redemption date may be no later than July 1, 2026 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 2016 Bonds, if any, shall be set forth in the Award Certificate and in the final Official Statement. Notwithstanding the foregoing, the Chairwoman, upon the advice of the Financial Advisor, may determine to issue the Series 2016 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 2016 Bonds shall be initially issued in 5 1 1 A the form of a separate single certificated fully registered Series 2016 Bond for each of the maturities of the Series 2016 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 2016 Bonds are registered in the name of Cede & Co., all of the Outstanding Series 2016 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 2016 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 2016 Bonds, upon presentation of the Series 2016 Bonds to be paid, to the Paying Agent. With respect to Series 2016 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 Agent 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 2016 Bonds, (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 2016 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 2016 Bonds. The Issuer, the Registrar and the Paying Agent may treat and consider the Person in whose name each Series 2016 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 2016 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 2016 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 6 1 1 A & 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 2016 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 2016 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 2016 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 2016 Bonds of like principal amount and maturity, in 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 2016 Bonds. SECTION 8. APPLICATION OF SERIES 2016 BOND PROCEEDS. The proceeds derived from the sale of the Series 2016 Bonds shall be applied by the Issuer as follows: (A) A sufficient amount of the Series 2016 Bond proceeds shall be deposited irrevocably in trust in the escrow deposit trust fund established under the terms and provisions of the Escrow Deposit Agreement, dated as of the dated date of the Series 2016 Bonds (the "Escrow Deposit Agreement"), between the Issuer and U.S. Bank National Association, Fort Lauderdale, Florida, as Escrow Agent, and, other than a cash deposit, shall be invested, together with other legally available moneys of the Issuer, in Refunding Securities in the manner set forth in the Escrow Deposit Agreement, which investments shall mature at such times and in such amounts as shall be sufficient to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds as the same become due and payable whether at maturity or upon earlier redemption. Subject to the issuance and delivery of the Series 2016 Bonds, the Refunded Bonds shall be redeemed on July 1, 2016, or such later date as shall be approved by the Chairwoman, upon the advice of the Financial Advisor. 7 1 1 A (B) A sufficient amount of the Series 2016 Bond proceeds shall be applied to the payment of costs and expenses relating to the issuance of the Series 2016 Bonds. Any Series 2016 Bond Proceeds that remain after all costs of issuance have been paid shall be transferred to the Interest Account and used to pay interest on the Series 2016 Bonds. SECTION 9. TRANSFER OF CERTAIN MONEYS. The Refunded Bonds will be refunded from proceeds of the Series 2016 Bonds and other legally available moneys of the Issuer. Any excess moneys on deposit in the funds or accounts established pursuant to the Resolution not required by the terms of the Resolution or this Supplemental Resolution to be on deposit therein or in any other fund or account upon the issuance of the Series 2016 Bonds shall be transferred to the escrow deposit trust fund established pursuant to the Escrow Deposit Agreement. SECTION 10. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution and use of the Preliminary Official Statement in substantially the form attached hereto as Exhibit B in connection with the offering of the Series 2016 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 Chairwoman and the County Manager are each hereby authorized to approve such insertions, changes and modifications. The Chairwoman 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 Chairwoman 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 11. OFFICIAL STATEMENT. The form, terms and provisions of the Official Statement relating to the Series 2016 Bonds shall be substantially as set forth in the Preliminary Official Statement and shall include all of the specific fmancial terms of the Series 2016 Bonds. Subject in all respects to the award of the Series 2016 Bonds in accordance with this Supplemental Resolution and the Official Notice of Sale, the Chairwoman 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 Chairwoman. Said Official Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chairwoman and the information contained therein are hereby authorized to be used in connection with the sale of the Series 2016 Bonds to the public. Execution by the Chairwoman of the Official Statement shall be deemed to be conclusive evidence of approval of such changes. 8 11A SECTION 12. OFFICIAL NOTICE OF SALE. The form of the Official Notice of Sale attached hereto as Exhibit A and the terms and provisions thereof are hereby authorized and approved. The Chairwoman is hereby authorized to make such changes, insertions and modifications as she shall deem necessary prior to the advertisement of such Official Notice of Sale or a summary thereof. The Chairwoman is hereby authorized to cause the advertisement and publication of the Official Notice of Sale or a summary thereof at such time as she shall deem necessary and appropriate, upon the advice of the Issuer's Financial Advisor, to accomplish the competitive sale of the Series 2016 Bonds. SECTION 13. APPOINTMENT OF PAYING AGENT AND REGISTRAR Subject in all respects to the award of the Series 2016 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 2016 Bonds. The Chairwoman and/or the Clerk are hereby authorized to enter into any agreement which may be necessary to effect the transactions contemplated by this Section 13 and by the Resolution. SECTION 14. AUTHORIZATION TO EXECUTE ESCROW DEPOSIT AGREEMENT. Subject in all respects to the award of the Series 2016 Bonds in accordance with this Supplemental Resolution and the Official Notice of Sale, the Issuer hereby authorizes and directs the Chairwoman to execute, and the Clerk to attest, the Escrow Deposit Agreement and to deliver the Escrow Deposit Agreement to U.S. Bank National Association, Fort Lauderdale, Florida, which is hereby appointed as Escrow Agent thereunder. All of the provisions of the Escrow Deposit Agreement when executed and delivered by the Issuer as authorized herein and when duly authorized, executed and delivered by the Escrow Agent, shall be deemed to be a part of this Supplemental Resolution as fully and to the same extent as if incorporated verbatim herein, and the Escrow Deposit Agreement shall be in substantially the form of the Escrow Deposit Agreement attached hereto as Exhibit C with such changes, amendments, modifications, omissions and additions, including the date of such Escrow Deposit Agreement, as may be approved by said Chairwoman. Execution by the Chairwoman of the Escrow Deposit Agreement shall be deemed to be conclusive evidence of approval of such changes. The Chairwoman and the Clerk are hereby authorized and directed to execute and file all documents necessary to purchase or subscribe to the Refunding Securities on behalf of the Issuer. SECTION 15. SECONDARY MARKET DISCLOSURE. Subject in all respects to the award of the Series 2016 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 9 11A Certificate to be executed by the Issuer and dated the date of delivery of the Series 2016 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 Chairwoman 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 2016 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 Section 15 and the Continuing Disclosure Certificate. For purposes of this Section 15, "Series 2016 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 2016 Bonds (including persons holding Series 2016 Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Series 2016 Bonds for federal income tax purposes. SECTION 16. GENERAL AUTHORITY. The members of the Board, 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 2016 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 Board 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 Chairwoman 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 Vice-Chairman is hereby authorized to act on his or her 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, including but not limited to, taking such action as is necessary and desirable to procure the Refunding Securities. SECTION 17. 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 10 11A 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 2016 Bonds. SECTION 18. 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. SECTION 19. EFFECTIVE DATE. This Supplemental Resolution shall become effective immediately upon its adoption. DULY ADOPTED this 12th day of April, 2016. �Z�k�'~, ( It.''1',7/c y.� I. `fes ATTEST: BOARD OF COUNTY COMMISSIONERS `�.;-•, DWIGHT E. BROCK, CLERK COLLIER COUNTY, FLORI[,AAS THE`F;X u t OFFICIO CHAIRWOMAN 'OF THE.. GOVERNING BOARD G ..T E' COLLIER' COUNTY WATER-SEWERDISTRICT;'`< i � t L NN* /2., t'''Jlidsi76i31t'o, L,, By: ✓ • _ By: D Jolln n uty Clerk Donna Fiala, Chairwoman •,'Attest as toar Appr• e. V ,t9' e m and lel i 4C 1 i.A Jeffrey Al ' 41 tzkow County o ey -►tem# 1114 Agenda 4,IZ-L41 Date Date t /„ Recd `(' '4 ', 11 11A EXHIBIT A FORM OF OFFICIAL NOTICE OF SALE 1 1 A OFFICIAL NOTICE OF SALE $50,475,000* Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 Electronic Bids, as Described Herein, Will Be Accepted Until 10:00 a.m. Eastern Daylight Savings Time, April 26, 2016* *Preliminary,subject to change. Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 1 1 1 A OFFICIAL NOTICE OF SALE $50,475,000* Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 NOTICE IS HEREBY GIVEN that electronic bids will be received in the manner, on the date and up to the time specified below: DATE: April 26, 2016* TIME: 10:00 a.m. Eastern Daylight Savings Time* ELECTRONIC BIDS: May be submitted only through Ipreo's Parity® Electronic Bid Submission 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, Collier County Government Complex, 3299 Tamiami Trail East, Naples, Florida 34112, for the purchase of all, but not less than all, of the $50,475,000* Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 (the "Bonds") to be issued by 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 No. 2016- /CWS Resolution No. 2016- adopted by the Governing Body on April 12, 2016 (collectively, the "Bond Resolution"). Such bids will be opened in public in accordance with applicable legal requirements. The Bond proceeds will be used to refund all of the District's outstanding Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2006 and to pay costs of issuing the Bonds. The Bonds are more particularly described in the Preliminary Official Statement dated April , 2016 (the "Preliminary Official Statement") relating to the Bonds, available from the District's financial advisor, Public Financial Management, Inc. 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. Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 2 1 1 A 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, Public Financial Management, Inc., 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. Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 3 1 1 A 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 May 26, 2016), 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 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 coupon and 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 are subject to redemption in whole or in part, at any time, on or after July 1, 2026, 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 2009, Water and Sewer Refunding Revenue Bond, Series 2013, Water and Sewer Refunding Revenue Bond, Series 2015 and any Additional Bonds (as defined in the Bond Resolution) subsequently issued pursuant to the Bond Resolution (collectively, the "Parity Bonds"), 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. Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 4 11A 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 Delivery Date: May 26,2016* Interest Payment Dates: July 1 and January 1,commencing July 1,2016 Principal Payment Dates(July 1): Year* Principal Amount* 2029 $5,285,000 2030 5,550,000 2031 5,830,000 2032 6,120,000 2033 6,425,000 2034 6,745,000 2035 7,085,000 2036 7,435,000 Interest Calculation: 360-day year of twelve 30-day months Ratings: Moody's: Fitch: Bidding Parameters Sale Date: April 26,2016* Bidding Method: The 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: $500,000;See"GOOD FAITH DEPOSIT"herein Coupon Multiples: 1/8 or 1/20 of 1% Optional Redemption: Yes,on or after July 1,2026 Term Bonds: Yes,at bidder's option. See"STRUCTURE"herein. Maximum Reoffering Price: Maturity Unlimited(minimum coupons of 5.00%) Aggregate Unlimited Minimum Reoffering Price: Maturity 100%(minimum coupons of 5.00%) Aggregate 100% Insurance: None Adjustment Parameters(As required to optimize the refunding) Principal Increases: Maturity Unlimited Aggregate 15.0% Principal Reductions: Maturity Unlimited(including elimination of one or more maturities) Aggregate 15.0% *Preliminary,subject to change. **May be combined into term bonds. See"STRUCTURE"herein Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 5 1 1 A 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 purchaser 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 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 6 1 1 A Registrar (as 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, Fort Lauderdale, 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 of, and premium, if any, on the Bonds will be payable upon presentation and surrender thereof at the designated corporate office of the Registrar on the dates, in the years and amounts established in accordance with the award of the Bonds. Interest on the Bonds is payable on the dates shown in the Summary Table. The Paying Agent will mail interest payments on the Bonds on each interest payment date to the owners of the Bonds at the addresses listed on the registration books maintained by the Registrar for such purpose 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 proceeding the applicable payment date, as described in 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 Public Financial Management, Inc., Financial Advisor to the District, 255 Alhambra Circle, Suite 404, Coral Gables, Florida 33134, Phone 786-671-7480, Fax 305-448-7131 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 fmal "Official Statement" with Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 7 hAr 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 200 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 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. BIDDING PROCEDURE; OFFICIAL BID FORMS 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 upon the bidder as if made by a signed, sealed bid delivered to the District. All bids remain firm until an award is made. The successful bidder must confirm the details of such bid by a signed Official Confirmation of Bid Form delivered by fax to Public Financial Management, Inc. at 305-448-7131or by email (PDF) to masvidals@pfm.com no later than one hour after being notified by the District of being the winning bidder, the original of which must be received by Public Financial Management, Inc., Financial Advisor to the District on the following business day at 255 Alhambra Circle, Suite 404, Coral Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 8 1 1 A Gables, FL 33134. Failure to deliver the form does not relieve the bidder of the obligation to purchase the Bonds. 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. Coupons must be a minimum rate of 5.00% per annum. Each bid for the Bonds must meet the minimum and maximum coupon criteria and 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. Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 9 1 1 A RIGHT OF REJECTION The District reserves the right, in its discretion, to reject any and all bids and to waive irregularity or informality in any bid. 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 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: Collier County BOCC-Concentration Account Acct. #: 1056407 REF: 2016 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 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 10 1 1 A 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. 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 successful bidder 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. 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. Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 11 11A p The successful purchaser will be required to submit to the District prior to closing a certification to the effect that (i) all of the Bonds have been subject of a bona fide initial offering to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at prices no higher than, or yields no lower than, those shown on the inside cover of the Official Statement relating to the Bonds, (ii) to the best of their knowledge, and based on their records and other information available to them which they believe to be correct, at least 10 percent of each maturity of the Bonds were sold to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at initial offering prices not greater than or yields not lower than the respective prices or yields shown on the inside cover of the Official Statement, and (iii) at the time they agreed to purchase the Bonds, based upon their assessment of the then prevailing market conditions, they had no reason to believe any of the Bonds would be sold to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at prices greater than or yields lower than the respective prices or yields shown on the inside cover of the Official Statement. 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. 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 fmancial 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 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 12 hA 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/Donna Fiala Chairwoman, Board of County Commissioners of Collier County, Florida, as the Ex-Officio Chairwoman of the Governing Board of the Collier County Water-Sewer District Dated: April 14, 2016 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 13 1 1 A EXHIBIT A TRUTH-IN-BONDING STATEMENT April , 2016 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 Seer Refunding Revenue Bonds, Series 2016 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 refunding certain outstanding debt of 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 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 14 1 1 A OFFICIAL CONFIRMATION OF BID FORM $50,475,000* Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 The undersigned hereby offer to purchase all of the Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 (the "Bonds"), to be dated as of the date of delivery (expected to be May 26, 2016), described in the attached Official Notice of Sale and the Preliminary Official Statement referred to therein, which by reference is made part of this bid, for all but not less than all of said Bonds and will pay therefor, at the time of delivery, in immediately available Federal Reserve Funds FIVE HUNDRED THOUSAND AND 00/100 Dollars ($500,000.00), bearing interest at the following rates per annum: Year Principal Interest Reoffering (July 1)* Amount* Rate Price or Yield 2029** $5,285,000 2030** 5,550,000 2031** 5,830,000 2032** 6,120,000 2033** 6,425,000 2034** 6,745,000 2035** 7,085,000 2036** 7,435,000 * Preliminary,subject to change. **May be combined into term bonds. See"STRUCTURE"herein. Any two to five consecutive maturities of the Bonds bearing interest at the same rate may be combined 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. The principal installments for the Bonds indicated above shall be applied for the mandatory retirement of Term Bonds maturing in the years and amounts and bearing interest as follows: $ Term Bonds maturing on July 1, at %per annum to yield %per annum $ Term Bonds maturing on July 1, at %per annum to yield %per annum $ Term Bonds maturing on July 1, at %per annum to yield %per annum Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 15 1 1 A GOOD FAITH DEPOSIT In accordance with the attached Official Notice of Sale, if we are selected as the winning bidder, we will provide a good faith deposit by wire transfer in federal funds no later than 2:30 p.m. on the date of the award in the amount of FIVE HUNDRED THOUSAND AND 00/100 Dollars ($500,000.00) as described in the attached Official Notice of Sale. MISCELLANEOUS This proposal is not subject to any conditions not expressly stated herein or in the attached Official Notice of Sale. Receipt and review of the Preliminary Official Statement relating to the Bonds is hereby acknowledged. The names of the underwriters or member of the account or joint bidding account, if any, who are associated for the purpose of this Proposal are listed either below or on a separate sheet attached hereto. TRUTH IN BONDING STATEMENT Prior to an award, the successful bidder must complete, sign and deliver with this Official Confirmation of Bid Form the Truth in Bonding Statement which is attached to the Official Notice of Sale as Exhibit A. The District reserves the right to assist the bidder in correcting any inconsistencies or inaccuracies set forth in such Truth in Bonding Statement. The District may waive any inconsistencies or inaccuracies relating to such Statements and any such waived inconsistencies or inaccuracies shall not adversely affect the bid. [Remainder of page intentionally left blank] Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 16 1 1 A Furthermore, pursuant to Section 218.386, Florida Statutes, the names, addresses and estimated amounts of compensation of any person who has entered into an understanding with the underwriters or, to the managing underwriter's knowledge, the District, or both, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the District and managing underwriter or who exercises or attempts to exercise any influence to effect any transaction in the purchase of the Bonds are set forth below in the space provided. If no information is provided below, the District shall presume no compensation was or will be paid. Senior Manager: Address Authorized Signature: City State Zip Code Printed Name: Telephone Number Facsimile Number Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds,Series 2016- Official Notice of Sale Page 17 11A EXHIBIT B FORM OF PRELIMINARY OFFICIAL STATEMENT 11 A PRELIMINARY OFFICIAL STATEMENT DATED ,2016 NEW ISSUE—FULL BOOK ENTRY See"RATINGS"herein In the opinion of Bond Counsel, under existing statutes, regulations, rulings and court decisions, and assuming compliance with the tax covenants described herein, interest on the Series 2016 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 imposed on individuals and corporations. Such interest,however,will be includable in the calculation of certain corporations' alternative minimum taxable income. See "TAX EXEMPTION" herein regarding certain tax considerations. COLLIER COUNTY WATER-SEWER DISTRICT Water and Sewer Refunding Revenue Bonds, Series 2016 Dated: Date of Delivery Due: July 1,as shown on the inside cover hereof The Water and Sewer Refunding Revenue Bonds, Series 2016 (the "Series 2016 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 2016 Bonds will not receive physical delivery of certificates. Transfers of ownership interest in the Series 2016 Bonds will be effected by DTC book-entry system as described herein. Interest on the Series 2016 Bonds is payable on July 1, 2016 and semiannually on each January 1 and July 1 thereafter. Principal of, premium, if any, and interest on the Series 2016 Bonds will be payable by U.S.Bank National Association,Fort Lauderdale,Florida, as Paying Agent and Bond Registrar. The Series 2016 Bonds are subject to optional and mandatory 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 2016 Bonds are being issued,together with certain other legally available monies of the District, to (i) currently refund all of the District's Water and Sewer Revenue Bonds, Series 2006, and (ii) pay certain costs of issuance of the Series 2016 Bonds. The Series 2016 Bonds are being issued as "Additional Bonds" on a parity with the District's outstanding Water and Sewer Refunding Revenue Bond, Series 2009, Water and Sewer Refunding Revenue Bond, Series 2013 and Water and Sewer Refunding Revenue Bond, Series 2015 (collectively, the "Prior District Bonds"), all issued by the District pursuant to the provisions of Resolution No. CWS-85-5 adopted on July 30, 1985, as restated, amended and supplemented by Resolution No. CWS-85-13 adopted on December 26, 1985, as amended and 25694/006/01094478.DOCv3 1 1 A supplemented, particularly as supplemented by Resolution No. 2016- /CWS Resolution No. 2016 adopted by the governing board on April_,2016(collectively,the"Resolution"). THE SERIES 2016 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 PRIOR DISTRICT BONDS, AS PROVIDED IN THE RESOLUTION. SEE "SECURITY FOR THE BONDS" HEREIN. THE SERIES 2016 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 THE PAYMENT OF THE SERIES 2016 BONDS. THE SERIES 2016 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 IN THE MANNER AND TO THE EXTENT DESCRIBED IN THE RESOLUTION. The Series 2016 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. Public Financial Management, Inc., Coral Gables, Florida, is serving as Financial Advisor to the District. It is expected that the Series 2016 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 ,2016. Electronic bids for the Series 2016 Bonds will be received through Parity Electronic Bid Submission System as described in the Official Notice of Sale. This Official Statement is dated ,2016. *Preliminary,subject to change. 25694/006/01094478.DOCv3 1 1 A COLLIER COUNTY WATER-SEWER DISTRICT $ * Water and Sewer Refunding Revenue Bonds, Series 2016 MATURITIES,AMOUNTS,INTEREST RATES,PRICES OR YIELDS AND INITIAL CUSIP NUMBERS $ *Serial Bonds Maturity Interest Prices or Initial CUSIP (July 1)* Amount* Rate Yields Number** 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 $ * %Term Bond due July 1, *,Price %,Initial CUSIP Number ** $ * %Term Bond due July 1, *,Price %,Initial CUSIP Number ** * Preliminary,subject to change. The District is not responsible for the use of the CUSIP umbers 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. 25694/006/01094478.DOCv3 11A 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 2016 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. 25694/006/01094478.DOCv3 1 1 A COLLIER COUNTY WATER-SEWER DISTRICT Government Complex 3339 Tamiami Trail East Naples,Florida 34112 (877)355-7640 BOARD OF COUNTY COMMISSIONERS Donna Fiala,Chairwoman Tim Nance,Vice Chair Tom Henning,Commissioner Georgia A.Hiller,Esq.,Commissioner Penny Taylor,Commissioner COUNTY MANAGER Leo E.Ochs,Jr. CLERK OF THE CIRCUIT COURT OF COLLIER COUNTY AND CHIEF FINANCIAL OFFICER Dwight E.Brock,Esq. DIRECTOR OF FINANCE AND ACCOUNTING Crystal K.Kinzel COUNTY ATTORNEY/ATTORNEY TO THE DISTRICT Jeffrey A.Klatzkow,Esq. PUBLIC UTILITIES DEPARTMENT HEAD G.George Yilmaz,Ph.D. DIRECTOR OF FINANCIAL OPERATIONS SUPPORT Joseph G.Bellone BOND COUNSEL Nabors,Giblin&Nickerson,P.A. Tampa,Florida DISCLOSURE COUNSEL Bryant Miller Olive P.A. Tampa,Florida FINANCIAL ADVISOR Public Financial Management,Inc. Fort Myers,Florida 25694/006/01094478.DOCv3 1 1 A No dealer, broker, salesman or other person has been authorized by the District or the Underwriter to give any information or to make any representations in connection with the Series 2016 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. This Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy,nor shall there be any sale of the Series 2016 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. The Underwriter listed on the cover page hereof 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. IN CONNECTION WITH THIS OFFERING OF THE SERIES 2016 BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2016 BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. 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 2016 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 2016 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") 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 2016 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION 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. 25694/006/01094478.DOCv3 1 1 A TABLE OF CONTENTS Contents Page INTRODUCTION 1 The County and the District 1 The Series 2016 Bonds 2 Purpose of the Series 2016 Bonds 2 Security for the Bonds 2 Reserve Account 2 Redemption Provisions 3 Additional Bonds 3 Tax Matters 3 Continuing Disclosure 3 Additional Information 3 PLAN OF REFUNDING 3 DESCRIPTION OF THE SERIES 2016 BONDS 4 General 4 Payment of the Series 2016 Bonds 4 Exchange,Registration and Transfer 5 Ownership of Series 2016 Bonds 5 Redemption Provisions 5 Book-Entry Only System 6 SECURITY FOR THE BONDS 9 General 9 Rate Covenant 10 Funds and Accounts 11 Separate Accounts 11 Disposition of Revenues 11 System Development Fees Fund 12 No Reserve Account 13 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 15 ESTIMATED SOURCES AND USES OF FUNDS 17 DEBT SERVICE SCHEDULE 18 THE COUNTY 19 General 19 Board of County Commissioners 19 County Manager 19 25694/006/01094478.DOCv3 1 1 A Budget Process 19 Annual Audit 20 THE DISTRICT 20 Background 20 Powers 21 Management 21 Billings and Collections 21 THE SYSTEM 22 General 22 Water System 23 Sewer System 35 Rates,Fees and Charges 41 System Development Fees 47 Capital Improvement Program 48 Historical Operating Results 49 RISK FACTORS 51 INVESTMENT POLICY 52 LEGAL MATTERS 53 LITIGATION 54 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS 55 TAX EXEMPTION 55 Opinion of Bond Counsel 55 Internal Revenue Code of 1986 55 Collateral Tax Consequences 56 Other Tax Matters 56 Tax Treatment of Original Issue Discount 56 Bond Premium 57 VERIFICATION OF ARITHMETICAL COMPUTATIONS 57 RATINGS 58 FINANCIAL ADVISOR 58 AUDITED FINANCIAL STATEMENTS 58 UNDERWRITING 59 CONTINGENT FEES 59 ENFORCEABILITY OF REMEDIES 59 CONTINUING DISCLOSURE 60 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT 60 AUTHORIZATION OF OFFICIAL STATEMENT 61 APPENDIX A — General Information Regarding Collier County,Florida APPENDIX B — Composite Resolution APPENDIX C — Collier County Audited Financial Statements For Fiscal Year Ended September 30, 2014 APPENDIX D — Form of Bond Counsel Opinion APPENDIX E — Form of Continuing Disclosure Certificate 25694/006/01094478.DOCv3 ii 1 1 A OFFICIAL STATEMENT Relating To COLLIER COUNTY WATER-SEWER DISTRICT Water and Sewer Refunding Revenue Bonds, Series 2016 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 Refunding Revenue Bonds, Series 2016 (the "Series 2016 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. All capitalized undefined terms will have the meaning ascribed thereto in the hereinafter defined Resolution. 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 2015 the County had an estimated population of 343,802. 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. 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 (the "System") encompassed approximately 240 square miles of unincorporated Collier County. The Board of County Commissioners of the County is the ex-officio governing board of the District. The District previously issued its Water and Sewer Refunding Revenue Bond, Series 2009,Water and Sewer Refunding Revenue Bond,Series 2013 and Water and Sewer Refunding Revenue Bond,Series 2015 (collectively, the "Prior District Bonds"). The Prior District Bonds were, the Series 2016 Bonds are being 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 restated, amended and supplemented by Resolution No. CWS-85-13 adopted on December 26, 1985, as amended and supplemented, particularly as supplemented by Resolution No. 2016- /CWS Resolution No. 2016 adopted by the governing board *Preliminary,subject to change. 25694/006/01094478.DOCv3 1 11A on April _, 2016 (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 2016 Bonds The Series 2016 Bonds,when issued,will be dated the date of their delivery,with interest payable on each January 1 and July 1, commencing on January 1,2017, 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 2016 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 2016 BONDS"herein. Purpose of the Series 2016 Bonds The Series 2016 Bonds are being issued,together with certain other legally available monies of the District, to (i) currently refund all of the District's Water and Sewer Revenue Bonds, Series 2006 (the "Refunded Bonds"), and (ii) pay certain costs of issuance of the Series 2016 Bonds. See "PLAN OF FINANCING"herein. The Series 2016 Bonds are being issued as"Additional Bonds"on a parity with the Prior District Bonds,all issued by the District pursuant to the provisions of the Resolution. Security for the Bonds When issued, the Series 2016 Bonds will be issued as Additional Bonds on a parity with the Prior District Bonds. The Series 2016 Bonds, the Prior District 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 operation 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 Following the issuance of the Series 2016 Bonds and the deposit of a portion of the proceeds of the Series 2016 Bonds therein, the Reserve Account will be fully funded in an amount equal to the Reserve Account Requirement for the Series 2016 Bonds and the Prior District Bonds. See "SECURITY FOR THE BONDS—Reserve Account"herein. 25694/006/01094478.DOCv3 2 11A Redemption Provisions The Series 2016 Bonds are subject to optional and mandatory redemption prior to their stated maturities as described herein. See "DESCRIPTION OF THE Series 2016 BONDS — Redemption Provisions"herein. Additional Bonds In the future,the District may issue Additional Bonds on a parity with the Series 2016 Bonds and the Prior District 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 Matters In the opinion of Bond Counsel,under existing statutes, regulations, rulings and court decisions, and assuming compliance with the tax covenants described herein, interest on the Series 2016 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 imposed on individuals and corporations. Such interest, however, will be includable in the calculation of certain corporations' alternative minimum taxable income. See"TAX EXEMPTION"herein regarding certain tax considerations. Continuing Disclosure The District has covenanted for the benefit of Series 2016 Bondholders to provide certain financial information and operating data relating to the District and the Series 2016 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. 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 parties and is not responsible for the information provided by such parties. A copy of the Resolution and all documents of the District referred to herein may be obtained from Dwight E. Brock, Clerk of the Circuit Court of Collier County, Florida, Government Complex,3301 E.Tamiami Trail,Building L,Naples,Florida 34112,Phone(239)774-8097. PLAN OF REFUNDING The District has determined that it can achieve present value savings in debt service payments by providing for payment of the Refunded Bonds. Provision for payment will be accomplished through the issuance of the Series 2016 Bonds and the use of a portion of the proceeds thereof, together with other legally available monies, to currently refund the Refunded Bonds. The Refunded Bonds will be redeemed prior to maturity on July 1, 2016 at a redemption price of 100 percent of the principal amount thereof,plus accrued interest to the redemption date. 25694/006/01094478.DOCv3 3 11A Upon delivery of the Series 2016 Bonds,U.S.Bank National Association,Fort Lauderdale,Florida (the "Escrow Agent") will enter into an Escrow Deposit Agreement (the "Escrow Agreement") with the District to provide for the current refunding of the Refunded Bonds. The Escrow Agreement will create an irrevocable escrow deposit fund (the "Escrow Fund") which will be held by the Escrow Agent. The money and securities held in the Escrow Fund are to be applied to the payment of principal of and interest on the Refunded Bonds, as the same become due and payable at maturity or upon redemption prior to maturity. Immediately upon the issuance and delivery of the Series 2016 Bonds, the District will deposit a portion of the proceeds from the sale of the Series 2016 Bonds into the Escrow Fund, together with any legally available monies provided by the District. Substantially all of such money is expected to be invested in certain noncallable direct obligations of the United States of America (the "Refunding Securities"). The maturing principal amount of and interest on the Refunding Securities and any cash held in the Escrow Fund (i) will be sufficient to pay the principal of and interest on the Refunded Bonds to their redemption date according to the schedules prepared by Public Financial Management, Inc. and verified by The Arbitrage Group, Inc. (the"Verification Agent"), (ii)will be pledged solely for the benefit of the holders of the Refunded Bonds, and (iii) will not be available for payment of debt service on the Series 2016 Bonds. See"VERIFICATION OF ARITHMETICAL COMPUTATIONS"herein. In reliance upon the above-referenced schedules, at the time of delivery of the Series 2016 Bonds, Bond Counsel will deliver to the Underwriter and the District an opinion to the effect that the lien of the holders of the Refunded Bonds on the Pledged Funds has ceased, terminated and become void and is discharged and satisfied. DESCRIPTION OF THE SERIES 2016 BONDS General The Series 2016 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 2016 Bonds will be made in book-entry form only. Purchasers of the Series 2016 Bonds offered hereby ("Beneficial Owners")will not receive physical delivery of certificates. Transfers of ownership interests in the Series 2016 Bonds will be effected through a book-entry system as described below. See "DESCRIPTION OF THE Series 2016 BONDS—Book-Entry Only System"herein. The Series 2016 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 2016 Bonds are issuable in principal denominations of$5,000 or integral multiples thereof. Interest on the Series 2016 Bonds is payable on each January 1 and July 1, commencing on January 1,2017. Payment of the Series 2016 Bonds The principal of the Series 2016 Bonds is payable when due upon presentation and surrender thereof only to the registered owner or his legal representative at the designated corporate trust office of U.S. Bank National Association, Fort Lauderdale, Florida, as paying agent (the "Paying Agent") for the Series 2016 Bonds. Interest on the Series 2016 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, Fort Lauderdale, Florida, as bond registrar (the "Bond Registrar") on the 15th day of the calendar month next preceding the interest payment date (whether or not a business day),by check or draft mailed to such registered owner at his address as it appears on such registration 25694/006/01094478.DOCv3 4 11A books;provided,however, that at the request and expense of a Series 2016 Bondholder,interest shall be paid by bank wire transfer for the account of such Series 2016 Bondholder. For so long as the Series 2016 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 2016 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 2016 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 2016 Bonds may be exchanged for a like aggregate principal amount of the Series 2016 Bonds or other authorized denominations of the same series, interest rate, and maturity. The Series 2016 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 2016 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 2016 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 2016 Bond,during the 15 days next preceding the mailing of notice of such redemption and continuing until such redemption date. Ownership of Series 2016 Bonds The District, the Paying Agent, and the Bond Registrar shall deem and treat the person in whose name any Series 2016 Bond is registered on the books maintained by the Bond Registrar as the absolute owner of such Series 2016 Bond, whether or not such Series 2016 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 2016 Bond to the extent of the sum or sums so paid. Redemption Provisions Optional Redemption The Series 2016 Bonds are subject to redemption in whole or in part, at any time, on or after July 1, 2026, 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 2016 Bonds to be redeemed plus accrued interest to the date fixed for redemption,without premium. Mandatory Redemption The Series 2016 Bonds maturing on or after July 1 in the year , are subject to mandatory sinking fund redemption by operation of the Term Bonds Redemption Account in the Sinking Fund, prior to maturity in part, by lot, at a redemption price equal to the principal amount thereof to be 25694/006/01094478.DOCv3 5 11A redeemed,plus interest accrued thereon to the date of redemption,on July 1 in the following years and in the following Sinking Fund Installments: Amortization Date Requirement * *Maturity The Series 2016 Bonds maturing on July 1 in the year , are subject to mandatory sinking fund redemption by operation of the Term Bonds Redemption Account in the Sinking Fund, prior to maturity in part,by lot, at a redemption price equal to the principal amount thereof to be redeemed,plus interest accrued thereon to the date of redemption, on July 1 in the following years and in the following Sinking Fund Installments: Amortization Date Requirement * *Maturity Notice of Redemption Notice of redemption of the Series 2016 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 2016 Bonds or portions of Series 2016 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 2016 Bonds which are to be redeemed shall not affect the validity of the proceedings for the redemption of Series 2016 Bonds.At the redemption date,interest shall cease to accrue on any of the Series 2016 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 2016 Bonds shall thereafter look solely to such funds for payment. As described under "DESCRIPTION OF THE SERIES 2016 BONDS — Book-Entry Only System" herein,for so long as the Series 2016 Bonds are registered in the name of DTC, Cede &Co., or any other nominee of DTC,notice of redemption of any Series 2016 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 DISTRICT BELIEVES TO BE RELIABLE, AND THE DISTRICT TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF. 25694/006/01094478.DOCv3 6 1 1 A SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2016 BONDS, AS NOMINEE OF DTC, CERTAIN REFERENCES IN THIS OFFICIAL STATEMENT TO THE SERIES 2016 BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 2016 BONDS SHALL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2016 BONDS. THE DESCRIPTION WHICH FOLLOWS OF THE PROCEDURES AND RECORD KEEPING WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2016 BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 2016 BONDS TO DIRECT PARTICIPANTS (AS HEREINAFTER DEFINED) OR BENEFICIAL OWNERS OF THE SERIES 2016 BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2016 BONDS, AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC, THE DIRECT PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 2016 BONDS IS BASED SOLELY ON INFORMATION FURNISHED BY DTC. ACCORDINGLY, THE DISTRICT NEITHER MAKES NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS. DTC will act as securities depository for the Series 2016 Bonds. The Series 2016 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 2016 Bond certificate will be issued for each maturity of the Series 2016 Bonds as set forth in the inside cover of this Official Statement, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust&Clearing Corporation("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks,trust companies, and clearing corporations that clear through 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 a Standard &Poor's Ratings Services("S&P")rating of AA+. The DTC Rules applicable to its DTC Participants are on file with the SEC. More information about DTC can be found at www.dtcc.com. Purchases of Series 2016 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2016 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2016 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations 25694/006/01094478.DOCv3 7 11A 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 2016 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 2016 Bonds,except in the event that use of the book-entry system for the Series 2016 Bonds is discontinued. To facilitate subsequent transfers, all Series 2016 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 2016 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2016 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2016 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 2016 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2016 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example,Beneficial Owners of Series 2016 Bonds may wish to ascertain that the nominee holding the Series 2016 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2016 Bonds within a maturity 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. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2016 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District 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 Series 2016 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Series 2016 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 District 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 District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized 25694/006/01094478.DOCv3 8 11A representative of DTC)is the responsibility of the District 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 2016 Bonds at any time by giving reasonable notice to the District or Paying Agent. Under such circumstances,in the event that a successor depository is not obtained, the Series 2016 Bond certificates are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry-only transfers through DTC(or a successor securities depository). In that event,Series 2016 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 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 accruing to the District in the management and operation of the System, calculated in accordance 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. "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 25694/006/01094478.DOCv3 9 1 1 A 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 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 THE 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 25694/006/01094478.DOCv3 10 11A 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,"the"System Surplus Fund"and the"Construction Fund"with the"2016 Account"therein. 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. Separate Accounts The moneys required to be accounted for in each of the funds, accounts and subaccounts 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 accounting, 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 necessary to pay Operating Expenses for the ensuing month. B. AFPI shall be deposited, as received, in a separate account of the Revenue Fund maintained by the District. 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 25694/006/01094478.DOCv3 11 11A 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 as 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 equal,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; 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 Requirement) shall be transferred to the Revenue Fund and used in the same manner as the money on deposit therein. See "APPENDIX B — Composite Resolution" attached hereto for a more complete description of the provisions of the Resolution providing for the disposition of 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 the 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. 25694/006/01094478.DOCv3 12 11A C. To be used for any other lawful purpose relating to the System. No Reserve Account The County has not established a separate subaccount in the Reserve Account to secure the Series 2016 Bonds. The Series 2016 Bonds will not be secured by any amount in the Reserve Account or any subaccount therein. Additional Bonds The District may, from time to time, issue Additional Bonds under the Resolution on a parity with the Series 2016 Bonds and the Prior District 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 thereof, 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 District 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 covenants 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 paragraphs(1)and(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 conditions of said paragraph (2) shall apply to Additional Bonds issued to refund Subordinated Indebtedness. 25694/006/01094478.DOCv3 13 1 1 A 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 the Florida Department of Environmental Protection ("FDEP") in connection with eleven loans to the District under the State Revolving Fund loan program(the"SRF Loans"). 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 SRF Loans each have a fixed rate of interest. As of September 30, 2015, $ was the estimated outstanding principal under the SRF Loans. The projected amount for annual debt service payments on the SRF Loans in the fiscal year ending September 30,2016 is$ In the event of a default under the SRF Loans, FDEP has the ability to enforce certain remedies under the SRF Loans,including,but not limited to, acceleration of the repayment schedule,increasing the interest rate on the SRF Loans by as much as 3.33 times the stated interest rate and the appointment of a receiver. While any such acceleration might adversely affect the District's ability to meet its financial requirements as disclosed herein, the loan agreements of the District authorizing the SRF Loans contain separate rate covenants to help ensure the availability of revenues for the payment of such obligations. The SRF Loans require that the District shall impose rates for the services of the District which will produce revenues pledged to the SRF Loans in an amount not less than 115% of debt service on all bonded indebtedness of the District and not less than 125% of the annual payments under the loan agreements which apply to the SRF Loans. 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. 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 operation 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 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, 25694/006/01094478.DOCv3 14 11A instrumentality, officer or employee. The revenues so received shall be deemed to be Gross Revenues 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 the 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. 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 25694/006/01094478.DOCv3 15 1 1 A 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. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 16 1 1 A ESTIMATED SOURCES AND USES OF FUNDS The proceeds to be received from the sale of the Series 2016 Bonds, together with other legally available monies of the District,are expected to be applied as follows: SOURCES: Principal Amount of Series 2016 Bonds Plus/Less Net Original Issue Premium/Discount Total Sources USES: Deposit to 2016 Escrow Fund Costs of Issuance(2) Total Uses (1) Includes Underwriter's discount,legal,financial advisory and other fees and expenses associated with the issuance of the Series 2016 Bonds. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 17 1 1 A DEBT SERVICE SCHEDULE The following table sets forth the debt service for the Series 2016 Bonds and the Prior District Bonds. Series 2016 Bonds Year Ended Prior Total July 1 Principal Interest Debt Service District Bonds Debt Service 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 TOTAL 25694/006/01094478.DOCv3 18 1 1 A THE COUNTY General 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 2015 the County had an estimated population of 343,802. 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 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 Donna Fiala Chairwoman November,2016 Tim Nance Vice Chair November,2016 Tom Henning Commissioner November,2016 Georgia A.Hiller,Esq. Commissioner November,2018 Penny Taylor Commissioner November,2018 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 Finance and Accounting (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 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. 25694/006/01094478.DOCv3 19 1 1 A Subsequent to public hearings, a final budget is adopted. The final budget for the fiscal year ended September 30, 2016 was adopted by the Board on September 20, 2015. 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 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 30,2014. The Comprehensive Annual Financial Report for the fiscal year ended September 30, 2014 appears in APPENDIX C attached to this Official Statement. The County expects the Auditors' report for the fiscal year ended September 30,2015 to be available in late April, 2016. When publicly available, such Auditors' report will be (i) included in the final Official Statement, potentially as a supplement thereto (if it becomes available after the marketing of the Series 2016 Bonds and before closing),or(ii)filed by or on behalf of the County with the Municipal Securities Rulemaking Board ("MSRB") through the Electronic Municipal Market Access system ("EMMA") in an electronic format prescribed by the MSRB (if it becomes available after the closing of the Series 2016 Bonds). 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 is effective for the County's fiscal year ended September 30, 2015. For a more complete description of GASB No. 68 and its effect on the County's financial reporting,see"APPENDIX A—Florida Retirement System". 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, in order to plan, develop and operate public water and sewer facilities for existing and future development within the County. The District exists pursuant to District Charter which amends,re-enacts and codifies previous special acts and amendments thereto pursuant to which the District was originally created. The District was created and exists under the authority of the District Charter for the purpose of providing water and sewer services and facilities to certain unincorporated areas of the County. The water service area of the District presently covers approximately 230 square miles of unincorporated Collier County and the sewer service area of the District presently covers approximately 240 square miles of unincorporated Collier County(the difference in the two service areas is due to a portion of the County receiving water only service from the City of Naples). The District's water and sewer system (the "System") is owned and operated by the District, the ex-officio governing board of which is the Board. See"THE SYSTEM"herein. 25694/006/01094478.DOCv3 20 1 1 A 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 impact fees which are referred to 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. 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 382 budgeted full time equivalent ("FTE") employees managing and operating the water and sewer utilities including administration, financial operations, engineering, water operations and sewer operations. The sewer operations section consists of 137 FTE employees. The water operations section consists of 128 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.), and 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, N.Y., 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 25694/006/01094478.DOCv3 21 11A mailed. 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 on the basis of forty-one 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 increases 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. 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 Fiscal Year 2016, an updated CRM is contemplated. A telephone call center system was installed in 2004. Customers can access their account (24 hours a day, seven days a week)over the Internet for account information and to make payments. 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 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 Fiscal Year 2011. The District has all of 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. 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. The service area of the System is generally bounded on the north by the Lee County line, on the west by the Gulf of Mexico and the limits of the City of Naples service area, on the south by the Collier Seminole State Park, and on the east by County Road 951. 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. 25694/006/01094478.DOCv3 22 1 1 A Historical Sewer System and Water System Equivalent Residential Connections and Water and Sewer Accounts Number of Sewer System Water System Water and Sewer Account Year ERCs(1) ERCs(1) Accounts(2) Growth 2010 86,303 82,710 58,655 --% 2011 88,012 84,520 59,700 1.8 2012 88,691 86,211 60,736 1.7 2013 90,627 88,280 62,333 2.6 2014 92,438 91,147 63,682 2.2 2015 95,246 94,439 65,454 2.% (1) An Equivalent Residential Connection ("ERC") is a standard level of service based on a typical single family home equivalency and is equal to 350 gpd for water service and 250 gpd for sewer service, and is calculated for purposes of this table,based on estimated population in the service area divided by an assumed number of persons per ERC. (2) Reflects actual number of metered accounts,including. Source: ERC's - Public Resources Management Group, Inc.; Accounts — Collier County Water-Sewer District Water System General The Water System includes three wellfields,two regional water treatment plants, six distribution system pumping stations, 38.25 million gallons of tank storage, and over 960 miles of combined transmission mains. 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 1.2 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. 25694/006/01094478.DOCv3 23 11A • 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. Historical water production data is summarized in the following table: Historic Finished Water Production(1) Annual Maximum Per Capita Annual Average Daily Month Daily Maximum Maximum 3 Demand Demand Demand Demand Day Demand Day Demand Loss AD AADD MMDD MDD M3DD Year (gpcd) (MG) (MGD) (MGD) (MGD) (MGD) 2010 170 7,777 21.3 23.1 28.1 26.4 2011 170 8,249 22.6 26.2 29.4 27.9 2012 170 8,198 22.4 26.1 29.8 27.9 2013 170 8,067 22.1 26.8 30.4 28.7 2014 150 8,734 23.9 27.4 30.0 29.3 2015 150 8,833 24.2 28.0 31.3 30.1 Percent Change o 0 0 0 0 20102015 12/0 14/0 14/0 21/0 11/a 14% MG =Million Gallons MGD =Million Gallons Per Day gpcd =gallons per capita per day (1) Includes residential and commercial (general service) water demands; per capita based on estimated permanent population served as prepared by the Growth Management Department's Comprehensive Planning Division. Source: Collier County Water-Sewer District As can be seen above, the trend in finished water demands during the period from 2008 through 2010,during the height of the economic recession shows declines in average daily flow from the historical highs in 2007. Steady increases that are evident in the data beginning in 2011 are expected to continue at a comparable rate as the economy improves and population shifts continue. Water Supply Hydrogeology The hydrogeology of the County 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 the 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 25694/006/01094478.DOCv3 24 1 1 A 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 additional 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 by the District as a brackish raw water source. 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 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 25694/006/01094478.DOCv3 25 1 1 A included in a single water use permit)extending through September 29,2036,which is summarized in the following table: Unified Water Use Permit Issued by SFWMD for Public Water Supply SFWMD Wellfield Firm Wellfield Firm CUP Capacity Capacity Allocation (SFWMD (CCWSD Wellfield/ Water of (AADF Permit) Inventory) Aquifer Source Wells(') MGD) (MGD) (MGD) Golden Gate Fresh Tamiami Ground 37(2) 26.50(4) 44.93 37.09 Wellfield Water Brackish Hawthorn Ground 46 16.00m Zone 1 Aquifer Water Lower Brackish 96.91 60.59 Hawthorn Ground 42(3) 13.03(4) Aquifer Water TOTAL 125 55.53(4) 141.8 97.7 (1) Number of wells taken from SFWMD CUP(Permit Number 11-00249-W) (2) Existing production well 8 has been capped and is out of service (3) Includes 17 proposed future wells as included in the SFWMD CUP. (4) Limiting condition 5 of the SFWMD CUP provides for a total annual allocation of 55.53 MGD, and limits annual withdrawals from specified sources as identified above. However, the allocation for the Lower Hawthorn Aquifer with overlap is 19.52 MGD. MGD=Million Gallons Per Day Source: AECOM The current Lower Tamiami Aquifer water supply at the Golden Gate Tamiami Wellfield has a permitted capacity of 9,672 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 5,840 MG per year(16.0 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 20,268 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). Limited Condition 5 of the SFWMD CUP 11-00249-W allows for an allocation up to 26.5 MGD from fresh groundwater resources through September 29,2036. Wellfield Capacity Based on Public Utilities Department Reliability Guidelines, February 2006, the operational capacity of a wellfield must include additional capacity equal to 20%of the raw water requirement for the Tamiami wellfield(fresh groundwater resource)and 33%of the raw water requirement for the Hawthorn wellfields(brackish groundwater resource). 25694/006/01094478.DOCv3 26 1 1 A Approximately 31.79 MGD (26.5 MGD fresh raw groundwater requirement X 1.20) of fresh groundwater well capacity is required to provide 24.0 MGD of potable water. Similarly, 49.65 MGD (37.33 MGD brackish raw groundwater requirement X 1.33) of brackish groundwater well capacity is required to provide 28.0 MGD of potable water. The existing wellfields total permitted capacities is 44.93 MGD and 96.91 MGD for the fresh groundwater and brackish groundwater wellfields, respectively. The existing wellfields total constructed capacity based on the CCWSD's inventory, which does not include proposed wells or inactive wells, is 37.09 MGD and 60.59 MGD for fresh groundwater and brackish groundwater wellfields, respectively. Expansion of the wellfield capacity by 6 MGD would be required using one of the following alternatives: • An expansion of 6.0 MGD treatment capacity (required to meet the projected M3DD through the year 2034) using a fresh groundwater treatment process would require an additional 2.12 MGD of fresh groundwater wellfield constructed capacity based on the CCWSD's inventory. (No additional groundwater wellfield permitting is required). • Alternatively, an expansion of 6.0 MGD treatment capacity (required to meet the projected M3DD through the year 2034)using a brackish groundwater treatment process would not require any additional well construction or permitting. • A hybrid expansion of 6.0 MGD treatment capacity using 4.0 MGD of fresh groundwater treatment process (one lime softening reactor/clarifier) and 2.0 MGD of brackish groundwater treatment process(one RO skid)could be accomplished without additional well construction or permitting. Regulatory Issues SFWMD 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: "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 redaimed 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. 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 drinking water. Secondary standards establish levels for contaminants that may have adverse cosmetic or aesthetic effects 25694/006/01094478.DOCv3 27 11 A 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 NCRWTP is located on the north side of Vanderbilt Beach Road Extension east of CR 951 in the northeast quadrant 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 during 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. 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 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 Aquifer 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. 25694/006/01094478.DOCv3 28 1 1A 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 motor 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. The existing facilities treat source water and essentially provide all potable water supplies for the District's service area. Maximum month daily demand in 2015 was 28.0 MGD, which is 54% of the permitted maximum month daily capacity. The actual finished water demand for fiscal years ending September 30,2010 through 2015 as a percent of the permitted design capacity is shown in the following table. Water Production and Capacity Utilization Maximum Month Permitted Capacity Daily Demand Percent Of Current MMDD MMDD Permitted Capacity Year (MGD) (MGD) Utilized 2010 52.0 23.1 44% 2011 52.0 26.2 50 2012 52.0 26.1 50 2013 52.0 26.8 52 2014 52.0 27.4 53 2015 52.0 28.0 54 MMDD=Maximum Month Daily Demand MGD =Million Gallons Per Day Source: Collier County Water-Sewer District 25694/006/01094478.DOCv3 29 1 1 A 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 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 in-line booster station is located in the northwest portion of the system near Vanderbilt Drive. The Isles of Capri Pumping Station is a local distribution station in the far south portion of the service area,providing 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. Finished Water Storage Facilities Capacity of Storage Facility—MG Name/Location Type of Tank Usable Storage of Storage Facility Storage Facility Volume 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 Total or Combined Storage Capacity of All Storage Facilities 38.25 34.80 MG=Million Gallons Source: AECOM Water Distribution The District owns and maintains over 960 miles of water transmission and distribution pipelines, ranging in size up to 42 inches in diameter, with over 62,000 service connections. The pressure in the 25694/006/01094478.DOCv3 30 1 1 A water distribution system is generally maintained at 55 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, 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. The 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. 25694/006/01094478.DOCv3 31 : 1 A Condition of Water System The existing water treatment facilities utilize treatment technologies that are appropriate for the raw water sources and acceptable industry-wide. No negative performance issues associated with these technologies have been noted. The District has been diligent in maintaining the Water System and planning for future upgrades. As such, growth has dictated that a significant portion 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 Board 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. The following table outlines the per capita demand,total annual demand,MMDD,AADD,MDD, and M3DD from 2010 through 2034 projected for capacity planning purposes based on the County's Water System Comprehensive Planning Division populations. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 32 1 1 A Projected Finished Water Demand—Capacity Planning Purposes(1) Annual Maximum Per Capita Total Annual Average Daily Monthly Daily Maximum Daily Maximum 3 Demand Demand Demand Demand Demand Day Demand Calendar Loss AD AADD MMDD MDD M3DD Year (gpcd) (MG) (MGD) (MGD) (MGD) (MGD) 2010 170 8,340 22.9 27.4 30.9 29.7 2015 150 9,800 26.9 32.2 36.2 34.9 2020 150 11,373 31.2 37.4 42.1 40.5 2025 150 12,826 25.1 42.2 47.4 45.7 2030 150 14,089 38.6 46.3 52.1 50.2 2034 150 14,994 41.1 49.3 55.5 53.4 gpcd =gallons per capita per day MG =Million Gallons MGD =Million Gallons Per Day (1) These projections are for finished water following treatment. Processes such as membrane softening and reverse osmosis require additional water due to losses during treatment. The amount of additional raw water required depends on the capacity and efficiency of the treatment system. Note that projected values for 2010 and 2015 are greater than actual production values because projections utilize a standard per capita demand LOSS which historically has been greater that actual. Source: Collier County Water-Sewer District The projected water demands are forecasted to increase over time,but at a slightly declining rate, due to continued growth in the County. The leveling-off effect of projected demand that occurs after 2025 is based on the fact that, as the service area reaches build-out, the permanent portion of the functional population will remain constant and additional growth will only come from the seasonal component of the functional population,which also includes the daily visitors. Water System Capacity The District recently completed the 2014 Water Master Plan/CIP Plan integrated with the 2014 Rate Study in order to develop a comprehensive plan to accommodate growth. Increasing the Water 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") and the Southeast Regional Water Treatment Plant("SERWTP")may be required if the District expands beyond its existing service area. The following table summarizes water treatment plant constructed and operational capacity: 25694/006/01094478.DOCv3 33 1 1 A Water Treatment Plant Capacity Summary Ground Water Recovery WTP Treatment Process Resource Constructed Capacity Efficiency Fresh Ground NCRWTP Nanofiltration(NF) Water 6 X 2 MGD=12 MGD 85% Low Pressure Reverse Osmosis Brackish Ground (LPRO) Water 4 X 2 MGD=8 MGD 75% Fresh Ground SCRWTP Lime Softening(LS) Water 3 X 4 MGD=12 MGD 97% Low Pressure Reverse Osmosis Brackish Ground (LPRO) Water 10 X 2 MGD=20 MGD 75% Total Constructed Capacity 52 MGD NA Operational Capacity(') 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 CCWSD'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 Future Water Treatment Expansion Approximately 5.4 MGD of additional treatment capacity is required to meet the projected potable water system demands starting in 2028 and extending through build out(2034). There are viable options to provide the additional treatment at either the NCRWTP, SCRWTP, or at the proposed NERWTP. Future master planning activities will indicate the optimum location based on future development. In the event that the service area is expanded and there is sufficient demand beyond the 5.4 MGD projected above, sites have been identified for the NERWTP and SERWTP. The NERWTP would be constructed on a 216-acre county owned site located in the Northeast area of the County in multiple phases as driven by demand. Current planning is to construct the SERWTP in two phases at the 42.5-acre Manatee Road Pumping Station site. The expanded facilities will treat source water to provide all potable water supplies for the District's service area. The following table outlines the per capita demand,total annual demand,MMDD, AADD, MDD, and M3DD from 2010 through 2034 projected for capacity planning purposes. Note that projected values for 2010 and 2015 are greater than actual production values because projections utilize a standard per capita demand LOSS which historically has been greater that actual. 25694/006/01094478.DOCv3 34 11A Future Water Production and Capacity Utilization Maximum Month Permitted Capacity Daily Demand Percent of Current MMDD MMDD Permitted Capacity Year (MGD) (MGD) Utilized 2010 52.0 27.4 53% 2015 52.0 32.2 62 2020 52.0 37.4 72 2025 52.0 42.2 81 2030 58.0 46.3 80 2034 58.0 49.3 85 MMDD=Maximum Month Daily Demand MGD =Million Gallons Per Day Source: AECOM Sewer System General The sewer treatment facilities in the Sewer System include two water reclamation facilities, over 693 miles of gravity sewer lines, over 805 pumping stations (of which 22 are master pumping stations), and more than 393 miles of force main. 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 1.3 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. 25694/006/01094478.DOCv3 35 11A Historical wastewater flow data is summarized in the following table: Historical Wastewater Collection(1) Total Annual Maximum Annual Average Month Maximum 3 Per Capita Flow Daily Flow Daily Flow Day Flow Flow AF AADF MMDF M3DF Calendar Year (gpcd) (MG) (MGD) (MGD) (M3DD) 2010 100/120 5,216 14.3 15.9 18.0 2011 100/120 5,402 14.8 16.8 18.7 2012 100/120 5,767 15.8 18.2 25.3 2013 100/120 6,095 16.9 18.9 24.2 2014 100 6,059 16.6 19.5 21.7 2015 100 6,351 17.4 19.5 20.8 Percent Change N/A 22% 22/° 23% 16/°0 2010-2015 MG =Million Gallons MGD =Million Gallons Per Day (1) Includes residential and commercial(general service)flows. Source: Collier County Water-Sewer District As can be seen in the previous table, the trend in wastewater flows during the period from 2010 through 2015 shows a moderate increase expressed on an average daily flow basis. Wastewater flow increases are expected to continue at a comparable rate in the short term, but are expected to have a leveling-off effect in later years. From 2010 to 2015, the AADF increased by 22%from 14.3 MGD to 17.4 MGD. The maximum daily flows for the District's service area show a similar increase. Wastewater Treatment and Effluent Disposal Facilities General The United States Environmental Protection Agency, the FDEP, and regulate the wastewater treatment and effluent disposal. Regulations for effluent quality vary depending on the nature of effluent 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 treatment 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, 2018, and is designed, 25694/006/01094478.DOCv3 36 1 1 A permitted and operated to stay in compliance and to meet all wastewater treatment standards and effluent disposal requirements. No problems 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 by irrigation quality 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 effluent (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." 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, 2017, and is designed, permitted and operated to stay in compliance and to meet all wastewater treatment standards and effluent disposal requirements. No problems are anticipated in renewing this permit. The plant provides advanced secondary treatment producing effluent consistent with requirements for irrigation quality water. Irrigation by irrigation quality 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 25694/006/01094478.DOCv3 37 1 1 A 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. Effluent Disposal The primary means of effluent disposal at both the NCWRF and SCWRF is distribution 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 the 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 and approved by the Board. 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, irrigation, 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. 25694/006/01094478.DOCv3 38 11A 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 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 Fiscal Year of Fully Functional Irrigation Quality Construction Storage Capacity Location Water Capacity Completion Available Livingston Road«) 1 MGD(Initial Well) 2014 2019 Livingston Road(') 1 MGD(Second Well) 2015 2019 Livingston Road(l) 3 MGD(Three 1-MGD Wells) 2022 2026 Total ASR Capacity 5 MGD 00) 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. Biosolids facilities at the SCWRF include two 330,000- gallon waste activated sludge holding tanks. The District transports biosolids out of 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. Sewer Collection and Transmission Facilities The Sewer System contains more than 693 miles of gravity sewer lines and 393 miles of force main, and 805 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 of the master pumping stations are equipped with permanent auxiliary power generators 25694/006/01094478.DOCv3 39 11A for use during power outages. There is a hydraulic interconnection that allows limited flow transfer between the service area of the NCWRF and SCWRF. 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. No negative performance issues associated with these technologies have been noted. 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 County Wastewater 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 Wastewater System were adopted by the Board in 2015. The LOSS factors include operational standards and a per capita wastewater flow standard of 100 gpcd. Note that projected values for 2010 and 2015 are greater than actual collection values because projections utilize a standard per capita demand LOSS which historically has been greater that actual. Projected Wastewater Flow—Capacity Planning Purposes Total Annual Maximum Per Capita Annual Average Monthly Maximum 3 Flow Flow Daily Flow Daily Flow Day Flow Calendar Loss AF AADF MMDF M3DF Year (gpcd) (MG) (MGD) (MGD) (MGD) 2010 100/120 6,355 17.4 20.9 26.1 2015 100 7,337 20.1 24.1 30.2 2020 100 8,304 22.8 27.4 34.2 2025 100 9,118 25.0 30.0 37.5 2030 100 9,826 26.9 32.3 40.4 2034 100 10,333 28.3 34.0 42.5 gpcd =gallons per capita per day MG =Million Gallons MGD =Million Gallons Per Day Source: Collier County Water-Sewer District 25694/006/01094478.DOCv3 40 11A Sewer System Capacity The existing water reclamation facilities have a combined permitted treatment capacity of 40.1 MGD. Additional treatment capacity would be needed in order to accommodate anticipated future service area growth. In addition to expanding the NCWRF by 6.5 MGD, the two proposed facilities to further augment treatment are the Northeast Water Reclamation Facility ("NEWRF") and the Southeast Water Reclamation Facility("SEWRF"). A summary of the wastewater treatment capacities of the existing wastewater treatment facilities is shown in the following table: Sewer Treatment Capacities Summary Water Reclamation Permitted Capacity Facility (MGD) NCWRF 24.1 SCWRF 16.0 Total 40.1 MGD =Million Gallons Per Day Source: AECOM Future Wastewater Treatment Expansion Approximately 4.9 MGD of additional treatment capacity is required system-wide to meet the projected wastewater system demands starting in 2030 through build out(2034). Even though significant growth is planned in the south service area, because the SCWRF is currently at its buildout capacity, additional treatment must be sited elsewhere. There are viable options to provide the additional treatment at either the NCWRF through the 6.5 MGD expansion, or at the proposed NEWRF. Future master planning activities will indicate the optimum location based on future development. To accommodate growth in the south service area, 5.6 MGD of additional collections system conveyance capacity is required to move flows from south to north starting in 2021 through 2034 (build out). This conveyance capacity will enable the 6.5 MGD expansion to meet the needs of the entire service area,north and south. In the event that the service area is expanded and there is sufficient demand beyond the 4.9 MGD projected above, sites have been identified for the NEWRF and SEWRF. The NEWRF would be constructed on a 216-acre District owned site located in the Northeast area of the County in multiple phases as driven by demand. A site has not been selected for the SEWRF. Rates,Fees and Charges Gross Revenues for the District is derived 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 95% of the reported System Gross Revenues for the fiscal year ended September 30, 2014. Gross Revenues 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 to be restricted (e.g., System 25694/006/01094478.DOCv3 41 1 1 A Development Fees or Construction Fund balances) are not considered as a component of the Gross Revenues of the System. A comprehensive review of the District's user charges was completed in May, 2014. This study, approved by the Board in September 2014 increased rates 9 percent,5 percent and 5 percent for fiscal year 2015, 2016 and 2017 respectively (see chart below). Ordinance No. 2001-73 enacted by the Board on December 11, 2001, as amended by Ordinance No. 2013-44 enacted by the Board on June 13, 2013 (collectively, the "Rate Ordinance"), established a schedule of monthly user rates and miscellaneous charges. The adopted rates as referenced in the Rate Ordinance include: (i) a flat or constant service base or readiness-to-serve charge which varies by meter size for all classes of customers; (ii)for the customers of the Water System, a consumption charge consisting of inclining blocked rates to promote water conservation; (iii)for individually metered residential customers of the Sewer System, a wastewater flow billing threshold of 15,000 gallons per month per account; and (iv)for the remaining customer classes of the Sewer System, a constant volumetric flow charge based on one hundred percent (100%) of the metered water consumption to such account. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 42 1 1 A The following is a summary of the existing and recently adopted water rates of the District,all as contained in the Rate Ordinance. Monthly Water Rates Effective Effective Effective October 1, October 1, October 1, 2014(') 2015)1) 2016(1) WATER SERVICE BASE CHARGES (All customer types) Meter Size 5/8" $19.22 $20.18 $21.19 3/4" 19.22 20.18 21.19 1" 42.42 44.54 46.77 1-1/4" 53.72 56.41 59.23 1-1/2" 80.88 84.92 89.17 2" 126.96 133.31 139.98 3" 234.70 246.44 258.76 4" 388.53 407.96 428.36 6" 773.10 811.76 852.35 8" 1,234.58 1,296.31 1,361.13 10" 2,234.43 2,346.15 2,463.46 12" 3,017.92 3,168.82 3,327.26 VOLUME CHARGE PER 1,000 GALLONS (All customer types) Block 1(2) $2.64 $2.77 $2.91 Block 2(2) 3.97 4.17 4.38 Block 3(2) 5.28 5.54 5.82 Block 4(2) 6.59 6.92 7.27 Block 5(2) 7.90 8.30 8.72 Block 6(2) 10.54 11.07 11.62 (1) Reflects rates adopted by the Board on September 9,2014. (2) The water consumption blocks vary in service level (amount of gallons) by meter size. The following is the water consumption block structure as reflected in the Rate Ordinance: Source: Collier County Water-Sewer District [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 43 1 1 A Consumption Block(Gallons) Meter Size Block 1 Block 2 Block 3 Block 4 Block 5 Block 6 5/8" 5,000 10,000 20,000 30,000 50,000 Over 50,000 3/4" 5,000 10,000 20,000 30,000 50,000 Over 50,000 1" 12,000 25,000 50,000 75,000 120,000 Over 120,000 1-1/4" 20,000 40,000 80,000 120,000 200,000 Over 200,000 1-1/2" 25,000 50,000 100,000 150,000 250,000 Over 250,000 2" 40,000 80,000 160,000 240,000 400,000 Over 400,000 3" 80,000 160,000 320,000 480,000 800,000 Over 800,000 4" 120,000 250,000 500,000 800,000 1,200,000 Over 1,200,000 6" 250,000 500,000 1,000,000 1,500,000 2,500,000 Over 2,500,000 8" 450,000 900,000 1,800,000 2,700,000 4,500,000 Over 4,500,000 10" 700,000 1,450,000 2,900,000 4,300,000 7,000,000 Over 7,000,000 12" 1,075,000 2,150,000 4,300,000 6,450,000 11,000,000 Over 11,000,000 Source: Collier County Water-Sewer District (Remainder of page intentionally left blank) 25694/006/01094478.DOCv3 44 1 1 A The following is a summary of the existing and recently adopted sewer rates of the District,all as contained in the Rate Ordinance. Monthly Sewer Rates Effective Effective Effective October 1, October 1, October 1, 2014(1) 2015(1) 20160) SEWER SERVICE BASE CHARGES (All customer types) Meter Size 5/8" $29.36 $30.83 $32.37 3/4" 29.36 30.83 32.37 1" 66.76 70.10 73.61 1-1/4" 85.59 89.87 94.36 1-1/2" 129.18 135.64 142.42 2" 204.11 214.32 225.04 3" 378.88 397.82 417.71 4" 628.28 659.69 692.67 6" 1,252.07 1,314.67 1,380.40 8" 2,000.86 2,100.90 2,205.95 10" 3,587.29 3,766.65 3,954.98 12" 5,316.94 5,582.79 5,861.93 VOLUME CHARGE PER 1,000 GALLONS (All customer types) All Usage(2) $4.13 $4.34 $4.56 (1) Reflects rates adopted by the Board on September 9,2014. (2) No Sewer user charge shall be imposed on metered water usage for individually metered residential services above fifteen thousand(15,000)gallons per month 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 is planning to conduct another rate study within the next year 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 wastewater treatment facilities is used to provide irrigation service. A summary of the reuse irrigation rates,as reflected in Rate Ordinance,is shown as follows: 25694/006/01094478.DOCv3 45 1 1 A Monthly Reuse Irrigation Rates Effective Effective Effective October 1,2014(1) October 1,2015(1) October 1,20161? REUSE IRRIGATION SERVICE BASE CHARGES (All customer types) Meter Size 5/8"and 3/4' $6.43 $6.75 $7.09 1" 14.05 14.75 15.49 1-1/2" 29.40 30.87 32.41 2" 58.69 61.62 64.70 3" 116.17 121.98 128.08 4" 232.34 243.96 256.16 6" 441.60 463.68 486.86 8" 801.55 841.63 883.71 10" 1,282.73 1,346.87 1,414.21 12" 1,910.68 2,006.21 2,106.52 VOLUME CHARGE PER 1,000 GALLONS Pressurized and Distributed $0.96 $1.01 $1.06 Pressurized 0.49 0.51 0.54 Bulk 0.38 0.40 0.42 (1) Rates adopted by the Board on September 9,2014. Source: Collier County Water-Sewer District The District plans to review these schedules from time-to-time. Pursuant to the Rate Ordinance, 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 1,2010 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. 25694/006/01094478.DOCv3 46 11A Average Utility Bill Comparison 6,000 Gallons of Utility Service(') Water Sewer Total Collier County Water-Sewer District Existing Rates Effective October 1,2015 $38.20 $56.87 $95.07 Adopted Rates Effective October 1,2016 40.12 59.73 99.85 Other Florida Utilities Bonita Springs Utilities,Inc.(2) $34.13 $50.68 $84.81 City of Bradenton(2) 30.94 38.58 69.52 Charlotte County(2) 51.20 57.16 108.36 DeSoto County 57.94 69.03 126.97 Englewood Water District 27.20 40.72 67.92 FGUA-Golden Gate(Collier County)(2) 63.48 77.27 140.75 FGUA-Lehigh Acres System(Lee County)(2) 47.84 77.03 124.87 City of Fort Myers(2) 42.85 98.18 141.03 Hillsborough County(2) 35.42 39.89 75.31 Lee County(2) 32.21 55.55 87.76 Manatee County(2) 21.39 48.74 70.13 City of Marco Island(2) 58.94 60.04 118.98 City of Naples(2) 16.13 42.84 58.97 City of North Port(2) 44.38 64.44 108.82 Okeechobee Utility Authority(2) 50.22 62.27 112.49 Pinellas County(2) 36.27 42.73 79.00 City of Punta Gorda(2) 33.52 35.43 68.95 City of Sarasota 38.20 65.59 103.79 Sarasota County(2) 31.99 60.13 92.12 Other Florida Utilities'Ave rage $39.70 $57.17 $96.87 (1) Other Florida utilities represent utilities located in the southwest portion of the State in general proximity of the District. (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. Source: Public Resources Management Group,Inc. 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 25694/006/01094478.DOCv3 47 11A System in order 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 were adopted pursuant to the Rate ordinance,and became effective on February 17,2015. The following table summarizes the adopted water and Sewer System Development Fees per Equivalent Residential Connection("ERC"): Existing System Development Fee Per ERC01)(2) Water Fee per ERC $2,600.00 Sewer Fee per ERC 2,515.00 Total $5,115.00 (1) Existing System Development Fees became effective on February 17,2015,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. System Development Fee per ERC Water Sewer Combined Collier County Water-Sewer District $2,600 $2,515 $5,115 Source: Collier County Water-Sewer District Capital Improvement Program The District's most recent Capital Improvement Program for the Water System and Sewer System was substantially derives from the 2014 Water Master Plan Update and 2014 Sewer Master Plan Update (collectively,the"2014 Capital Improvement Master Plan Updates"),respectively and used as the basis for the User Rate Study adopted by the Board in September 2014. Insubstantial changes have been incorporated per the adopted fiscal years 2015 and 2016 capital budget, as well as out years through 2020 which will be vetted in the upcoming user rate study in fiscal 2017. 25694/006/01094478.DOCv3 48 1 1 A The District's Capital Improvement Program is reviewed by the County on an annual basis. Accordingly, the total cost of the Capital Improvement Program could be more or less depending on future demand requirements and service area needs,actual contract awards and other economic factors. Estimated Capital Cost(1) Capital Improvement Program: Water System CIP Projects: Water Capital Account Projects $90,390,000 Total Water System CIP Projects: $90,390,000 Sewer System CIP Projects: Sewer Capital Account CIP Projects(2) $210,559,000 Total Sewer System CIP Projects: $210,559,000 Capital Improvement Program Total $300,949,000 (1) Amounts shown derived from the 2015 Annual Update of Inventory Report approved by the Board in November,2015. (2) Includes reclaimed(irrigation quality)water projects. Source: Collier County Water-Sewer District Historical Operating Results The historical operating results for the System are presented for the fiscal years ended September 30,2010 through 2014. The historical operating results have been prepared based on financial information compiled and provided by the County and information included in the County's CAFRs for such fiscal years. The operating results for the fiscal year ended September 30, 2015 have not been finalized for accounting and financial reporting purposes as of the date hereof. Therefore, the estimates for such fiscal year were included as a component of the projections. 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 reflect 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 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. 25694/006/01094478.DOCv3 49 1 1 A The historical operating results for the System are summarized as follows: Historical Operating Results" Fiscal Year Ended September 30, 2011 2012 2013 2014 2015 Total Sales Revenues(2) $101,960,419 $98,634,958 $101,823,385 $104,921,033 Allowance for Funds Prudently Invested(3) 1,235,636 1,829,187 516,920 0 Miscellaneous Revenue) 2,256,439 2,219,738 2,312,157 3,003,311 Total Operating Revenue $105,452,494 $102,683,883 $104,652,462 $107,924,344 Non-Operating Revenuee5) 1,182,189 1,342,459 929,609 1,478,079 Gross Revenues $106,634,683 104,026,342 $105,582,071 $109,402,423 Less:Operating Expenses(6) 60,106,549 58,155,432 68,916,116 69,709,955 Net Revenues Available for Debt Service $46,528,134 $45,870,910 $36,665,955 $39,692,468 System Development Fees(7) $7,415,367 $8,731,883 $13,502,519 $11,050,253 Special Assessment Revenues 0 0 0 0 Pledged Funds Available for Debt Service $53,943,501 $54,602,793 $50,168,474 $50,742,721 SENIOR LIEN BONDS DEBT SERVICE COVERAGE") Net Revenue Debt Service Coverage Net Revenues Available for Debt Service $46,528,134 $45,870,910 $36,665,955 $39,692,468 Total Debt Service on Bonds $11,679,957 $11,683,132 $11,689,791 $9,952,972 Debt Service Coverage(100%Required) 398% 393% 314% 399% AND Pledged Funds Debt Service Coverage Pledged Funds Available for Debt Service $53,943,501 $54,602,793 $50,168,474 $50,742,721 Total Debt Service on Bonds $11,679,957 $11,683,132 $11,689,791 $9,952,972 Debt Service Coverage(125%Required) 462% 467% 429% 510% [Footnotes on following page] 25694/006/01094478.DOCv3 50 1 1 A (1) Information was obtained from the County's Comprehensive Annual Financial Report for each respective fiscal year and other financial information provided by the County. Coverage tests are defined in the Resolution. The operating results for the fiscal year ended September 30, 2015 have not been finalized for accounting and financial reporting purposes but was included as a component of the projections contained below. (2) Amounts shown reflect reported revenues recognized by the System for each respective 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) Amounts shown derived from respective rate resolutions and sunset 12/31/12 per Ordinance 2006-27 Section 1(4). The Allowance for Funds Prudently Invested was paid coincident with the payment of the Water and Wastewater System Development Fees. (4) Miscellaneous revenues include meter tapping charges, customer service fees, reuse irrigation revenues and other similar charges. (5) 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 for debt service coverage calculation purposes. (6) 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. (7) 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 RISK FACTORS The future financial condition of the System could be affected adversely by,among other things, 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 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. 25694/006/01094478.DOCv3 51 11A 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 2016 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. INVESTMENT POLICY The moneys held in the funds and accounts under the Resolution may only be invested in Authorized Investments (as 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 (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. Florida Local Government Surplus Trust Fund(State Board of Administration("SBA")); 2. US Government Securities-Direct Obligations; 3. US Federal Agencies-Backed by Full Faith and Credit of US Government; 4. US Federal Instrumentalities - US Federal Agency Securities Not Backed by Full Faith and Credit of US Government,except for Student Loan Marketing Association; 5. Certificates of Deposit - Collateralized with US Government Securities or Federal Agencies; 6. Repurchase Agreements; 7. Fixed Income Mutual Funds - Collateralised with US Government Securities or Federal Agencies; 8. Domestic Bankers Acceptances-Rated"AA"or higher,and inventory based; 9. Prime Commercial Paper-Rated"A-1"and"P-1;" 10. Tax-Exempt Obligations-Rated"AA"or higher and issued by state or local governments; 11. Now Account - Fully collateralized in accordance with Chapter 280, Florida Statutes (limited to Depository Bank/Concentration Bank); 12. Variable Rate Securities only if the rate is a straight floating rate that is set in a direct, as opposed to inverse,relationship to a single index;and 13. Mortgage Securities(CMOs)only if they are: a. Issued by US Federal Agencies or US Federal Instrumentalities, b. Pass the Federal Financial Investment Examination Council (FFIEC) test at time of purchase,and c. Have an average life of seven (7) years or less and have an absolute final maturity of no more than fifteen (15) years at zero PSA. The term "zero PSA" 25694/006/01094478.DOCv3 52 1 1 A means that all interest and principal payments are guaranteed to be made by the stated final maturity assuming no prepayments. Specifically prohibited investments include the following: 1. Interest only strips of mortgaged backed securities; 2. Leveraged bonds; 3. Structured notes or financings other than mortgage securities that meet the provisions of the investment policy(permit callable and step up coupons); 4. Variable rate securities that set a rate based on an inverse relationship to an index;and 5. Variable rate debt that sets a rate based on more than a single index. The objective of the investment policy is to match investment cash flow and maturity with known cash needs and anticipated cash flow requirements(i.e., match assets to liabilities) to the extent possible. Investment of funds shall have final maturities of not more than five(5)years,except for: 1. SBA-no stated final maturity; 2. Certificates of Deposit-1 Year; 3. Repurchase Agreements-90 Days; 4. Bankers Acceptances-180 Days; 5. Prime Commercial Paper-180 Days; 6. Fixed Income Mutual Funds - no stated final maturity. However, underlying US Government Securities and Federal Agencies have average maturity of 1 year; 7. Mortgage Securities-average life of 7 years or less and have an absolute final maturity of no more than 15 years at zero PSA;and 8. US Government Securities and Federal Agencies deposited into an escrow account in connection with the refunding of a County bond issue can have a final maturity of more than 5 years. Mortgage securities shall not be used to match liabilities that are reasonably definable as to amount and disbursement date. Mortgage securities can only be used to invest funds associated with reserves or liabilities that are not associated with a specifically identified cash flow schedule. Mortgage securities can be used to prudently enhance the return on the portfolio. Any and all exceptions to the investment policy require 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 2016 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 D — Form of Bond Counsel Opinion")will be available at the time of delivery of the Series 2016 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. 25694/006/01094478.DOCv3 53 1 1 A 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 2016 Bonds; provided, however, that Bond Counsel will render an opinion to the Underwriter of the Series 2016 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 2016 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 2016 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,any threatened litigation against the County of any nature whatsoever which in any way questions or affects the validity of the Series 2016 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 Board, or other officers of the County is being contested. The Board has been named as a defendant in three related lawsuits, styled Francis Hussey, et al v. Collier County, Case No. 08-6933-CA; Board of County Commissioners v. Francis D Hussey, et al., Case No. 08-6988-CA consolidated with 08-6933-CA; and Sean Hussey, et al.. v. Collier County, et al., Case No. 08-7025-CA. On September 11, 2008, the Plaintiffs' Francis D. Hussey, Jr. and Mary P. Hussey,husband and wife,and Winchester Lakes Corporation,a Florida corporation, filed an Inverse Condemnation suit seeking monetary damages from Collier County, the Honorable Charlie Crist, the Governor of the State of Florida and the Florida Department of Community Affairs. The Husseys contend that the designation of certain real property owned by them by a Growth Management Plan Amendment adopted in 2002 had the effect of precluding mining activities on property, thereby resulting in a substantial diminution in value of the real estate, which the Plaintiffs contend to be compensable under Florida law.The Complaint alleges damage claims,as of June,2002,in the amount of$67,300,000, and as of July,2007,in the amount of$91,500,000. The Plaintiffs have also presented a claim for "inverse condemnation based on a regulatory taking of Plaintiffs' property," in an amount not specified in the Complaint. The Wildlife Federation and Collier County Audubon Society was granted leave to intervene in the suit by the Court on April 29, 2009. On July 9, 2009, the Florida Wildlife Federation and Collier County Audubon Society served upon Defendants Francis and Mary Hussey a Notice of Intent to Sue over Violations of the Endangered Species Act of 1973(16 U.S.C.1531 et seq.) Land Clearing of Primary Panther Habitat,RCW Foraging Habitat, and Wood Stork Foraging Habitat. The cases have been dismissed with prejudice by the trial court and are now on appeal. The parties recently entered into a Settlement Agreement,conditioned upon Court approval,with no costs to be incurred by the County. County believes that this litigation will be concluded with no risk of liability. Regardless, whether or not the plaintiffs are successful, any potential liability is not expected to affect the County's ability to pay the principal and interest on the Series 2016 Bonds. The County experiences other claims, litigation, and various legal proceedings which, except as described above,individually are not expected to have a material adverse effect on the operations or financial condition of the County, but may, in the aggregate, have a material impact thereon. In the 25694/006/01094478.DOCv3 54 1 1 A opinion of the County Attorney,however, the County will either successfully defend such actions or otherwise resolve such matters without any material adverse consequences on the financial condition of the County.] 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 except by an offering circular containing full and fair 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 2016 Bonds. The County or the District has not undertaken an independent review or investigation of securities for which it has served as conduit issuer. The County or the District does not believe that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2016 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 EXEMPTION Opinion of Bond Counsel In the opinion of Bond Counsel,the form of which is included as Appendix D hereto,the interest on the Series 2016 Bonds is excludable from gross income and is not a specific item of tax preference for federal income tax purposes under existing statutes, regulations, rulings and court decisions. However, interest on the Series 2016 Bonds is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations pursuant to the Internal Revenue Code of 1986, as amended (the "Code"). Failure by the District to comply subsequently to the issuance of the Series 2016 Bonds with certain requirements of the Code, regarding the use, expenditure and investment of bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States, may cause interest on the Series 2016 Bonds to become includable in gross income for federal income tax purposes retroactive to their date of issue. The District has covenanted in the Resolution to comply with all provisions of the Code necessary to, among other things, maintain the exclusion from gross income of interest on the Series 2016 Bonds for purposes of federal income taxation. In rendering this opinion,Bond Counsel has assumed continuing compliance with such covenants. Internal Revenue Code of 1986 The Code contains a number of provisions that apply to the Series 2016 Bonds,including, among other things,restrictions relating to the use of investment of the proceeds of the Series 2016 Bonds and the 25694/006/01094478.DOCv3 55 1 1 A payment of certain arbitrage earnings in excess of the "yield"on the Series 2016 Bonds to the Treasury of the United States. Noncompliance with such provisions may result in interest on the Series 2016 Bonds being included in gross income for federal income tax purposes retroactive to their date of issue. Collateral Tax Consequences Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of, the Series 2016 Bonds. Prospective purchasers of the Series 2016 Bonds should be aware that the ownership of the Series 2016 Bonds may result in other collateral federal tax consequences. For example,ownership of the Series 2016 Bonds may result in collateral tax consequences to various types of corporations relating to (1) denial of interest deduction to purchase or carry such Series 2016 Bonds, (2) the branch profits tax, and (3) the inclusion of interest on the Series 2016 Bonds in passive income for certain Subchapter S corporations. In addition, the interest on the Series 2016 Bonds may be included in gross income by recipients of certain Social Security and Railroad Retirement benefits. PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE Series 2016 BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL OR CORPORATE BONDHOLDERS, INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES DESCRIBED ABOVE. PROSPECTIVE BONDHOLDERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. Other Tax Matters Interest on the Series 2016 Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 2016 Bonds should consult their tax advisors as to the income tax status of interest on the Series 2016 Bonds in their particular state or local jurisdictions. 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 2016 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 2016 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 2016 Bonds and their market value. No assurance can be given that additional legislative proposals will not be introduced or enacted that would or might apply to,or have an adverse effect upon, the Series 2016 Bonds. For example, proposals have been discussed in connection with deficit spending reduction, job creation and other tax reform efforts that could significantly reduce the benefit of, or otherwise effect the exclusion from gross income of,interest on obligations such as the Series 2016 Bonds. The further introduction or enactment of one or more of such proposals could affect the market price or marketability of the Series 2016 Bonds. Tax Treatment of Original Issue Discount The initial offering price of the Series 2016 Bonds maturing on October 1, through October 1, , inclusive, and October 1, (the 'Discount Bonds") is less than the stated principal amounts 25694/006/01094478.DOCv3 56 1 1 A thereof. Under the Code, the difference between the principal amount of the Discount Bonds and the initial offering price to the public (excluding bond houses and brokers) at which price a substantial amount of such Discount Bonds of the same maturity was sold, is "original issue discount." Original issue discount represents interest which is excluded from gross income; however, such interest is taken into account for purposes of determining the alternative minimum tax imposed on corporations and accrues actuarially over the term of a Discount Bond at a constant interest rate. A purchaser who acquires a Discount Bond in the initial offering at a price equal to the initial offering price thereof set forth on the cover page of this Official Statement will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount accruing during the period such purchaser holds such Discount Bond and will increase its adjusted basis in such Discount Bond by the amount of such accruing discount for the purposes of determining taxable gain or loss on the sale or other disposition of such Discount Bonds. The federal income tax consequences of the purchase, ownership and sale or other disposition of Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. Prospective purchasers of Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon the sale or other disposition of Discount Bonds and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. Bond Premium The difference between the principal amount of the Series 2016 Bonds maturing on October 1, through and including October 1, and (collectively, the "Premium Bonds") and the initial offering price to the public(excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering to the public at the initial offering price is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Premium Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds. VERIFICATION OF ARITHMETICAL COMPUTATIONS At the time of the delivery of the Series 2016 Bonds, the Verification Agent will deliver a report on the mathematical accuracy of the computations contained in schedules provided to them and prepared by The Arbitrage Group, Inc. on behalf of the District relating to (a) the sufficiency of the anticipated cash and maturing principal amounts and interest in Refunding Securities to pay,when due, the principal,whether at maturity or upon prior redemption, interest and call premium requirements,if any, of the Refunded Bonds and (b) the "yield" on the Series 2016 Bonds and on the Refunding Securities considered by Bond Counsel in connection with their opinion that the Series 2016 Bonds are not "arbitrage bonds"within the meaning of Section 148 of the Code,as amended. 25694/006/01094478.DOCv3 57 1 1 A RATINGS Fitch Ratings("Fitch")and Moody's Investors Service,Inc.("Moody's")have assigned their ratings of and respectively, to the Series 2016 Bonds. In addition, Fitch and Moody's have assigned underlying ratings of"_"and" ,"respectively,without giving any regard to such Policy. 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 2016 Bonds. An explanation of the significance of the ratings can be received from the rating agencies, at the following addresses: Fitch Ratings,One State Street Plaza, New York, New York 10004 and Moody's Investors Service, 99 Church Street, New York, New York 10007-2796. FINANCIAL ADVISOR Public Financial Management, Inc., Coral Gables, Florida, is the Financial Advisor to the District with respect to the sale of the Series 2016 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 2016 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. Public Financial Management, Inc. 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, 2014 of Clifton Larson Allen LLP,Naples,Florida(the"Auditor")are included in"APPENDIX C—Collier County Audited Financial Statements For Fiscal Year Ended September 30,2014"hereto. Such statements speak only as of September 30, 2014. The consent of the County's auditor to include in this Official Statement the aforementioned report was not requested, and the general purpose financial statements of the County are 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 Auditors'report for the fiscal year ended September 30,2015 to be available in late April,2016. When publicly available, such Auditors'report will be (i)included in the final Official Statement,potentially as a supplement thereto(if it becomes available after the marketing of the Series 2016 Bonds and before closing), or (ii) filed by or on behalf of the County with the Municipal Securities Rulemaking Board ("MSRB") through the Electronic Municipal Market Access system ("EMMA")in an electronic format prescribed by the MSRB (if it becomes available after the closing of the Series 2016 Bonds). The Series 2016 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 payable from, the general revenues of the District. See "SECURITY FOR THE SERIES 2016 BONDS" herein. The general purpose financial statements are presented for general information purposes only. 25694/006/01094478.DOCv3 58 1 1 A The County covenanted and agreed in the Resolution to,immediately after the close of each fiscal year, cause the financial statements of the County to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, 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. 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 is effective for the County's fiscal year ended September 30, 2015. For a more complete description of GASB No. 68 and its effect on the County's financial reporting, see "APPENDIX A - Florida Retirement System" attached hereto. UNDERWRITING The Series 2016 Bonds are being purchased by the Underwriter shown on the cover of the Official Statement (the "Underwriter") at an aggregate purchase price of $ (which equals the principal amount of the Series 2016 Bonds, plus a net original issue premium 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 2016 Bonds if any Series 2016 Bonds are purchased. The Series 2016 Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2016 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 2016 Bonds. Payment of the fees of such professionals and an underwriting discount to the Underwriter is each contingent upon the issuance of the Series 2016 Bonds. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2016 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 2016 Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2016 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 before of after such delivery. See "APPENDIX B - Composite Resolution" attached hereto for a description of events of default and remedies. 25694/006/01094478.DOCv3 59 1 1 A CONTINUING DISCLOSURE The County has covenanted for the benefit of the Series 2016 Bondholders to provide certain financial information and operating data relating to the County and the Series 2016 Bonds in each year, and to provide notices of the occurrence of certain enumerated material events. The County has agreed to file annual financial information and operating data and the audited financial statements with each entity authorized and approved by the Securities and Exchange Commission (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. The County 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 E - Form of Continuing Disclosure Certificate" attached hereto. The Continuing Disclosure Certificate shall be executed by the County prior to the issuance of the Series 2016 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 2016 Bonds,no party other than the County is obligated to provide,nor is expected to provide, any continuing disclosure information with respect to the Rule. The County inadvertently failed to comply with the requirement to timely file certain audited financial statements and financial information for the fiscal year ended September 30, 2011 only with respect to the CUSIP numbers applicable to the County's Special Obligation Refunding Revenue Bonds, Series 2010B and Special Obligation Refunding Revenue Bonds, Series 2011. Upon realizing the failure to comply, the County reported such circumstances in accordance with the requirements of the Rule, and cured such filings on March 1,2013. The County fully anticipates satisfying all future disclosure obligations required 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 to 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 2016 Bonds,the security for the payment of the Series 2016 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 the Clerk of the Board of County Commissioners, Collier County Government Complex, 3301 East Tamiami Trail, Building L, Naples, Florida 34112, telephone: (239) 774- 8097 or the County's Financial Advisor, Public Financial Management, Inc., 13350 Metro Parkway, Suite 302 Fort Myers,Florida 33966. 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 realized. 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 2016 Bonds. 25694/006/01094478.DOCv3 60 1 1 A The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety together with all foregoing statements. 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 2016 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 2016 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:_ Chairwoman,Board of County Commissioners Collier County,Florida Approved as to form and legal sufficiency: County Attorney 25694/006/01094478.DOCv3 61 11A APPENDIX A GENERAL INFORMATION REGARDING COLLIER COUNTY,FLORIDA 25694/006/01094478.DOCv3} 11A APPENDIX A GENERAL INFORMATION CONCERNING 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. The County is located on the southwest coast of the Florida peninsula directly west of the Miami-Fort Lauderdale area. In 2015 the County had an estimated population of 343,802. 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 Donna Fiala Chairwoman November,2016 Tim Nance Vice Chair November,2016 Tom Henning Commissioner November,2016 Georgia A.Hiller,Esq. Commissioner November,2018 Penny Taylor Commissioner November,2018 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 Finance and Accounting (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 25694/006/01094478.DOCv3 A-1 1 1 A 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 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, 2016 was adopted by the Board on September 20, 2015. 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 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, 2014. The Comprehensive Annual Financial Report for the fiscal year ended September 30, 2014 appears in APPENDIX C attached to this Official Statement. The County expects the Auditors' report for the fiscal year ended September 30, 2015 to be available in late April, 2016. When publicly available, such Auditors' report will be (i) included in the final Official Statement, potentially as a supplement thereto (if it becomes available after the marketing of the Series 2016 Bonds and before closing),or(ii)filed by or on behalf of the County with the Municipal Securities Rulemaking Board ("MSRB") through the Electronic Municipal Market Access system ("EMMA") in an electronic format prescribed by the MSRB (if it becomes available after the closing of the Series 2016 Bonds). 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 is effective for the County's fiscal year ended September 30,2015. For a more complete description of GASB No. 68 and its effect on the County's financial reporting,see"—Florida Retirement System"below. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 A-2 1 1 A 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 Population Population United Population County Percentage State Percentage States Percentage Population Increase Population Increase Population 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* 384,400 19.6 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. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 A-3 1 1 A Most of the growth of Collier County is due to migration. As of December 31,2014,the estimated median age of the County's population was 47.9 years according to the University of Florida, Bureau of Economic and Business Research. COLLIER COUNTY EMPLOYMENT BY MAJOR INDUSTRY Industry Establishments Employees Retail Trade 1,570 20,253 Accommodation and Food Services 857 19,097 Health Care and Social Assistance 1,023 17,632 Construction 1,728 13,094 Arts,Entertainment,and Recreation 261 7,897 Administrative and Waste Services 1,071 8,592 Public Administration 64 5,403 Other Services(except Public Administration) 1,264 6,019 Agriculture,Forestry,Fishing and Hunting 88 4,039 Professional and Technical Service 1,735 5,448 Finance and Insurance 637 3,839 Real Estate and Rental and Leasing 1,056 3,928 Wholesale Trade 414 3,220 Manufacturing 277 3,321 Transportation and Warehousing 231 1,941 Information 156 1,422 Management of Companies and Enterprises 121 530 Utilities 21 193 Mining 8 37 Educational Services 98 8,164 Unclassified Establishments 42 5 Source: Florida Research and Economic Information Database Application, Labor Market Statistics, Quarterly Census of Employment and Wages Program,2nd Quarter 2015. 25694/006/01094478.DOCv3 A-4 1 1 A COLLIER COUNTY EMPLOYMENT (2006-2014) State of County Florida Labor Unemployment Unemployment Year Force Employment Unemployment Rate Rate 2005 145,136 140,087 5,049 3.5% 3.7% 2006 152,464 147,706 4,758 3.1 3.2 2007 151,925 145,183 6,742 4.4 4.0 2008 148,368 137,814 10,554 7.1 6.3 2009 143,337 127,434 15,903 11.1 10.4 2010 145,349 128,427 16,922 11.6 11.1 2011 148,771 133,668 15,103 10.2 10.0 2012 152,895 139,925 12,970 8.5 8.5 2013 155,910 144,792 11,118 7.1 7.3 2014 161,233 151,727 9,506 5.9 6.3 Source: Florida Research and Economic Information Database Application,Labor Market Statistics,Local Area Unemployment Statistics Program. BUILDING PERMIT ACTIVITIES IN COLLIER COUNTY (2005-2014) Single Multi- Residential Year Family Units Family Units Valuation()) 2005 4,052 2,570 $1,655,669 2006 2,829 1,959 1,228,774 2007 1,069 1,026 649,718 2008 652 299 387,286 2009 630 314 312,942 2010 766 493 371,116 2011 920 400 374,016 2012 1,296 316 N/A 2013 1,760 918 N/A 2014 2,477 1,133 N/A (1) Valuation in thousands of dollars. Source: University of Florida, Bureau of Economic and Business Research, Building Permit Activity in Florida. 25694/006/01094478.DOCv3 A-5 1 1 A Agriculture Agriculture is a dominant factor in the economy of the County. Rainfall averages about 48 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, the 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 Executive Airport and the Immokalee and Everglades City Airparks. Educational System The County school system serves approximately 45,200 students in 48 schools, including five charter schools. 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. 25694/006/01094478.DOCv3 A-6 1 1 A 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 684 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,Physicians 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 public health workers, nurses,sanitarians and clinical psychologists. COLLIER COUNTY FINANCIAL AND ECONOMIC DATA (Fiscal Years 2003-2015) (Unaudited) Per Bank Fiscal Percent Capita Deposits Year Population Increase/(Decrease). Income (000's) 2005 306,186 -- 41,513 9,473 2006 326,658 6.7 42,846 10,665 2007 333,858 2.2 49,492 10,957 2008 332,854 (0.3) 57,446 11,026 2009 333,032 0.1 63,276 11,690 2010 331,800 (0.4) 62,559 9,981 2011 321,520 (3.1) 60,049 N/A 2012 323,785 0.7 59,264 N/A 2013 329,849 1.9 60,391 N/A 2014 339,642 3.0 64,872 N/A 2015 348,777 2.7 73,869 N/A N/A=Data not currently available Source: Collier County Comprehensive Annual Financial Report for Fiscal Year Ending September 30, 2015. 25694/006/01094478.DOCv3 A-7 1 1 A • ,.., ,....., n:, ezoa) vz v 4 a E 0 0 0 0 0 0 0 0 0 0 a) 71 V v O! - 0 0 0 0 0 0 0 0 0 0 V ri c 1 1 c + c 1 03 p b"A d z Q 0 V CU V u' ° u) >4 v - Ol 0a) 00 0\ N .M� ..0 0000 CO 0\ N O 0X1 ^" "�' ,ti If) O ,--i m S M M .O .O Ol Z u tC co .0 d+ 00 O O ,� .0 N co Z v E U X ca co co ri co 00 N N O, H M ,0 • E- W oo rn 00 N. N. ‘.00 0 N.. ° to En 4.N W . R• W. -cs S1. V co .0 d{ •.O .O ,—. O. .0 N N 0V :1 ."0 W .'.1) �V., 4:1 as co.14 414 00 CN 00 O N co rte-. ,�-4 ,N-. tit) W O CA p 1-7 E—° F a1 -, d d{ d - ^° 01 4 Sn Q d d d 4 d d . 4 •d+ "0 O O1 W a) N 00 — N. a, N. 0 1-1 N 5 W bZ) .0 .0 N O\ as .0 d OT N .0 N d, .CD ¢ cCI0 y cC 01 0 ,--4 00 O. N� ri Ln N N 0 Ol 01 W "0 X ,_.i N N N .O N N NO t0., .t, Cn m. ft 0 L� M O d M a\ + • o-.l v� vVi Tri '1 O s0 O\ do N 0\ .D u) 0 Z up <-1:4 Q m 7 r N N oo N Q\ - 00 00 O ..+ .+ a z el F., v ai W ")- ¢ O OC '4, - and d ° H U N "O N ,-1 d, .0 0 N ,-1 N ,-1 ON U ° Ct >" .�/ v, 1 Ol +, pp OT N \0 co •D ,-1 d, N •D 00 U F1 si 0 ch O N 00 ,--, 0' '0 O, N 0 N a) }V• ctf v Q aJ• d a`si t° v X o r) . 00 .0 0 0 OC O; `° ▪ 4 Q �1 }, W j F X 00 O LO N� CO N . Ln d+ in N� m V fk, > H WO a W w cc; ao o a� cd o0 00 00 00 z j, ° o ,� o .. X p. z 0 U 0Q. E v } CO N N N - N d N tt) Q � Ni •0 W Q MI Ol d O N O O N o0 00 N O. ,a �, y e-4 N N N N ,-1 ,-r ,-1 1-1 ,-1 CA 01 iC A O X f "V to mg • Q .• Q cu 0 > W G ▪ w -0 i 'C so 00 'C CO do N 00 it) 6. co Q i0 t° 441 N .14 0' M 'C NN O CO N ,�-, t1 .Q 61 .O .O e•-Z O d� 0\ 00 O 00 .O ' ea d 2 cf i) Q. cn In N CO d' in d4 d' a\ 00 m Q }+ 0 0\ ,-4 CO d, d N N N .-{ ,1 mi 0) Q • .. N' N' N N N N N N Np' 2) m C � 0 y pO r-.1 r-. to d, 0. N c-. N d, U) +�+ ms N �p d' 'C 0\ M N M Cr‘ N O N chi) •-. 0 O d• O' 1-4 0 It) .0 O\ ON ..� Z .� P, y Ol N O 1 d to d, .O N N d cu u) p m 0 .0 ° M O. 0o ON M O. d' N d\ ,-1 co m co U �.,) cn i 'C c4 a0 .O N ri d CO s ,-i n v cn > bNs ) w 'C00000oN .o 'C 'C .0 N VD )al ' U 0 O• 3 0i ° ° o CO0 ▪ p U N U M v A •0 N 00 ON O ,-. N M do -n CO> ° O *,::$ V cC O O O O ,--t,--t1 • -+ V y u) W 0 0 0 0 0 0 0 0 0 0 p c:i u) w > NNNNNNNNNN y p V co a) 0 0\ co QCn N 1 1 A 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(') (Fiscal Years 2006-2015) (Unaudited) Collier County Other Special Debt County Fiscal General Revenue Service School Independent Year Fund Funds Funds Total District Districts Total 2006 3.8772 0.9161 0.1500 4.9433 5.9730 1.3423 12.2586 2007 3.5790 0.8470 0.2226 4.6486 5.5250 1.3403 11.5139 2008 3.1469 0.7362 0.2233 4.1064 5.3510 1.2792 10.7366 2009 3.1469 0.7528 0.2249 4.1246 4.9090 1.2784 10.3120 2010 3.5645 0.7225 0.1366 4.4236 5.2390 1.3243 10.9869 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 (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 Comprehensive Annual Financial Report for Fiscal Year ending September 30, 2015. Florida Constitutional Limitations and Property Tax Reform Several Constitutional and Legislative amendments affecting ad valorem taxes have been approved by voters in the past including the following: Save Our Homes Amendment. By voter referendum held on November 3, 1992, Article VII, Section 4 of the State Constitution was amended by adding thereto a subsection which,in effect,limits the increases in assessed just value of homestead property to the lesser 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. Further, the amendment provides that(1)no assessment shall exceed just value,(2)after 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, (3)new homestead property shall be assessed at just value as of January 1 of the year following the establishment of the homestead, and (4) changes, additions,reductions or improvements to homestead shall initially be assessed as provided for by general law, and thereafter as provided in the amendment. This amendment is known as the "Save Our Homes Amendment." The effective date of the amendment was January 5, 1993 and,pursuant to a ruling by the 25694/006/01094478.DOCv3 A-9 11A Florida Supreme Court, it began to affect homestead property valuations commencing January 1, 1995, with 1994 assessed values being the base year for determining compliance. Millage Rollback Legislation. In 2007,the Florida Legislature adopted Chapter 2007-321,Laws of Florida, a property tax plan which significantly impacted ad valorem tax collections for Florida local governments. One component of the adopted 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 legislation 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. The County fell into the 9% ad valorem tax revenue reduction category. The County's General Fund millage rate for the fiscal year ended September 30,2016 is$3.5645. Constitutional Amendments Related to Ad Valorem Exemptions. On January 29, 2008, in a special election held in conjunction with the State's presidential primary, the requisite number of voters approved amendments to the Florida Constitution exempting certain portions of a property's assessed value from taxation. The following is a brief summary of certain important provisions contained in such amendments: 1. Provides for an additional exemption for the assessed value of homestead property between $50,000 and $75,000, thus doubling the existing homestead exemption for property with an assessed value equal to or greater than$75,000. 2. Permits owners of homestead property to transfer their Save Our Homes Amendment benefit (up to $500,000) 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 Amendment 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. As discussed above, the Save Our Homes Amendment generally limits annual increases in ad valorem tax assessments for those properties with homestead exemptions to the lesser of three percent(3%)or the annual rate of inflation. 3. Exempts from ad valorem taxation $25,000 of the assessed value of property subject to tangible personal property tax. 4. Limits increases in the assessed value of non-homestead property to 10% per year, subject to certain adjustments. The cap on increases would be in effect for a 10-year period, subject to extension by an affirmative vote of electors. The amendments were effective for the 2008 tax year (fiscal year 2008-2009 for local governments). 25694/006/01094478.DOCv3 A-10 11A Over the last few years, the Save Our Homes Amendment assessment cap and portability provisions described above have been subject to legal challenge. The plaintiffs in such cases have argued that the Save Our Homes Amendment assessment cap constitutes an unlawful residency requirement for tax benefits on substantially similar property in violation of the equal protection provisions of the Florida Constitution and the Privileges and Immunities Clause of the Fourteenth Amendment to the United States Constitution. The plaintiffs also argued that the portability provision simply extends the unconstitutionality of the tax shelters granted to long-term homeowners by Save Our Homes Amendment. The courts in each case have rejected such constitutional arguments and upheld the constitutionality of such provisions; however, there is no assurance that any future challenges to such provisions will not be successful. In addition to the legislative activity described above, the constitutionally mandated Florida Taxation and Budget Reform Commission (required to be convened every 20 years) (the "TBRC") completed its meetings on April 25, 2008 and placed several constitutional amendments on the November 4, 2008 General Election ballot. Three of such amendments were approved by the voters of Florida,which, among other things, do the following: (a) allow the Florida Legislature,by general law,to exempt from assessed value of residential homes, improvements made to protect property from wind damage and installation of a new renewable energy source device; (b) assess specified working waterfront properties based on current use rather than highest and best use; (c) provide a property tax exemption for real property that is perpetually used for conservation (began in 2010); and, (d) for land not perpetually encumbered, require the Florida Legislature to provide classification and assessment of land use for conservation purposes solely on the basis of character or use. Exemption for Deployed Military Personnel. In the November 2010 General Election voters approved a constitutional amendment which provides an additional homestead exemption for deployed military personnel. The exemption equals the percentage of days during the prior calendar year that the military homeowner was deployed outside of the United States in support of military operations designated by the Florida Legislature. This constitutional amendment took effect on January 1,2011. At this time, it is impossible to estimate with any certainty the level of impact that the constitutional amendment will have on the County. Other Proposals Affecting Ad Valorem Taxation. During the Florida Legislature's 2011 Regular Session, it passed Senate Joint Resolution 592 ("SJR 592"). SJR 592 allows totally or partially disabled veterans who were not Florida residents at the time of entering military service to qualify for the combat- related disabled veteran's ad valorem tax discount on homestead property. The amendment took effect on January 1,2013. During the Florida Legislature's 2012 Regular Session,it passed House Joint Resolution 93 ("HJR 93"). HJR 93 allows the Florida Legislature to provide ad valorem tax relief to the surviving spouse of a veteran who died from service-connected causes while on active duty as a member of the United States Armed Forces and to the surviving spouse of a first responder who died in the line of duty. The amount of tax relief, to be defined by general law, can equal the total amount or a portion of the ad valorem tax otherwise owed on the homestead property. The amendment took effect on January 1,2013. Also during the Florida Legislature's 2012 Regular Session, it passed House Joint Resolution 169 ("HJR 169") allowing the Florida Legislature by general law to permit counties and municipalities, by ordinance, to grant an additional homestead tax exemption equal to the assessed value of homestead 25694/006/01094478.DOCv3 A-11 1 1 A property to certain low income seniors. To be eligible for the additional homestead exemption the county or municipality must have granted the exemption by ordinance; the property must have a just value of less than $250,000; the owner must have title to the property and maintained his or her permanent residence thereon for at least 25 years; the owner must be age 65 years or older;and the owner's annual household income must be less than $27,300. The additional homestead tax exemption authorized by HJR 169 would not apply to school property taxes. To date, the County has not enacted an ordinance granting this additional homestead exemption. Each of the above described proposals was approved by the voters on November 6, 2012. At present, the impact of these amendments on the County's finances cannot be accurately ascertained. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would, or might apply to, or have a material adverse effect upon, the County's finances. During the Florida Legislature's 2013 Regular Session, it passed Senate Bill 1830 ("SB 1830"), which was signed into law by the Governor and created a number of changes affecting ad valorem taxation. First, SB 1830 provides long-term lessees the ability to retain their homestead exemption and related assessment limitations and exemptions in certain instances. Second, SB 1830 inserts the term "algaculture" in the definition of "agricultural purpose" and inserts the terms "aquacultural crops" in the provision specifying the valuation of certain annual agricultural crops,nonbearing fruit trees and nursery stock. Third, SB 1830 allows for an automatic renewal for assessment reductions related to certain additions to homestead properties used as living quarters for a parent or grandparent and aligns related appeal and penalty provisions to those for other homestead exemptions. Fourth, SB 1830 deletes a statutory requirement that the owner of the property must reside upon the property to qualify for a homestead exemption. Fifth, SB 1830 clarifies the property tax exemptions counties and cities may provide for certain low income persons age 65 and older. Sixth, SB 1830 removes a residency requirement that a senior disabled veteran must have been a Florida resident at the time they entered the service to qualify for certain property tax exemptions. Seventh, SB 1830 repeals the ability for certain limited liability partnerships to qualify for the affordable housing property tax exemption. Eighth, SB 1830 exempts property used exclusively for educational purposes when the entities that own the property and the educational facility are owned by the same natural persons. Also during the Florida Legislature's 2013 Regular Session,the Florida Legislature passed House Bill 277("HB 277"),which was signed into law by the Governor. HB 277 provides that certain renewable energy devices are exempt from being considered when calculating the assessed value of residential property. HB 277 only applies to devices installed on or after January 1, 2013. HB 277 took effect on July 1,2013. Also during the Florida Legislature's 2013 Regular Session,the Florida Legislature passed House Bill 1193 ("HB 1193"), which was signed into law by the Governor. HB 1193 eliminated three ways in which the property appraiser had authority to reclassify agricultural land as non-agricultural land. Additionally, HB 1193 relieves the value adjustment board of the authority to review the property appraisers. HB 1193 is effective immediately and will apply retroactively to January 1,2013. At present, the impact of these amendments on the County's finances cannot be accurately ascertained. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would,or might apply to,or have a material adverse effect upon, the County's finances. 25694/006/01094478.DOCv3 A-12 1 1 A Legislative Proposals Relating to Ad Valorem Taxation. During recent years, various legislative proposals and constitutional amendments relating to ad valorem taxation and revenue limitation have been introduced in the State. Many of these proposals sought to provide for new or increased exemptions to ad valorem taxation, limit the amount of revenues that local governments could generate or otherwise restrict the ability of local governments in the State to levy ad valorem taxes at recent historical levels. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would,or might apply to,or have a material adverse effect upon,the County's finances. House Bill 1015 ("HB 1015") has been introduced which proposes to require taxing authorities, such as the County, to post certain information relating to property tax procedures on their websites as well as the vote record for the final adoption of the millage rate,the percentage increase in property taxes and the name of each member of the governing body and their vote on the final millage rate. At the present time, it is impossible to predict if such legislation will become law, and if passed into law. However, the County does not expect HB 1015, if passed, will affect its ability to pay debt service on the Series 2016A Bonds. There can be no assurance that similar or additional legislative or other proposals will not be introduced or enacted in the future that would, or might apply to, or have a material adverse effect upon,the County's finances. Florida Retirement System The information relating to the Florida Retirement System ("FRS") contained herein has been obtained from the FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial Reports available at www.dms.myflorida.com/workforce_operations/retirement/publications/annual_reports and the Florida Comprehensive Annual Financial Reports available at www.myfloridacfo.com/division/aa/Reports/. 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. The Florida Retirement System (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("FRS Pension Plan"). 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: 25694/006/01094478.DOCv3 A-13 hA • 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 court administrators,and assistant capital collateral representatives. Members of the Elected Officers' Class may elect to withdraw from the FRS or participate in the SMSC in lieu of the Elected Officers'Class. • 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 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. 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, Senior Management Service Class, and Elected Officers' Class 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 years 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 25694/006/01094478.DOCv3 A-14 HA 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 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. Authorized instructional personnel may participate in the DROP for up to 36 additional 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, 2015, the FRS Trust Fund projected $3,119,220,735 in accumulated benefits and interest for 34,829 current and prior participants in the DROP. 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 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 funding 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 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, 2015, was $148,454,681,903. These funds were reserved to provide for total current and future benefits,refunds,and administration of the FRS Pension Plan. Effective July 1, 2011, both employees and employers of the FRS Fare 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 25694/006/01094478.DOCv3 A-15 1 1 A both the FRS Pension Plan and the FRS Investment Plan. The uniform rates for Fiscal Year 2014-15 are as follows: Employee Employer Total Contribution Membership Class Contribution Rate Contribution Rate(') Rate Regular 3.00% 6.07% 9.07% Special Risk 3.00 18.52 21.52 Special Risk Administrative Support 3.00 40.77 43.77 Elected Officers—Judges 3.00 31.87 34.87 Elected Officers - 47.96 Legislators/Attorneys/Cabinet 3.00 44.96 Elected Officers-County 3.00 41.94 44.94 Senior Management Service 3.00 19.84 22.84 Deferred Retirement Option Program N/A 11.02 11.02 (1) These rates include the normal cost and unfunded actuarial liability contributions but do not include the 1.26% contribution for the HIS and the fee of 0.04% 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 30,2015. The County contributed amounts were $24,853,351, $22,782,485 and $17,103,441 and for fiscal years ended 2015,2014 and 2013,respectively,equal to the required contribution for each year. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 A-16 1 1 A Pension Amounts for the FRS Pension Plan. Schedule of Changes in Net Pension Liability and Related Ratios(1) (in thousands) Total Pension Liability June 30,2014 June 30,2015 Service cost $2,256,738 $2,114,047 Interest on total pension liability 11,489,921 11,721,563 Effect of plan changes 0 0 Effect of economic/demographic(gains)or losses (448,818) 1,620,863 Effect of assumption changes or inputs 1,256,045 0 Benefit payments (8,714,251) (10,201,501) Net change in total pension liability 5,839,635 5,254,972 Total pension liability,beginning 150,276,128 156,115,763 Total pension liability,ending(a) $156,115,763 $161,370,735 Fiduciary Net Position Employer contributions $2,190,424 $2,438,085 Member contributions 682,507 698,304 Investment income net of investment expenses 22,812,286 5,523,287 Benefit payments (8,714,250) (10,201,500) Administrative expenses (18,352) (18,074) Net change in plan fiduciary net position 16,952,615 (1,559,898) Fiduciary net position,beginning 133,061,677 150,014,292 Fiduciary net position,ending(b) $150,014,292 $148,454,394 Net pension liability,ending=(a)—(b) $6,101,471 $12,916,341 Fiduciary net position as a%of total pension liability 96.09% 92.00% Covered payroll(2) $24,723,565 $32,726,034 Net pension liability as a%of covered payroll 24.68% 39.47% (1) This schedule will fill in to a ten-year schedule as results for new fiscal years are calculated. (2) For June 30, 2014, covered payroll shown includes defined benefit plan actives and members in DROP, but excludes the payroll for FRS Invest Plan members and payroll on which only UAL rates are charged. For June 30, 2015, and later, covered payroll shown includes the payroll for FRS Investment Plan members and payroll on which only UAL rates are charged. Source:Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30,2015. 25694/006/01094478.DOCv3 A-17 1 1 A 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, 2015, calculated based on the discount rate and actuarial assumptions below: June 30,2014 June 30,2015 Discount rate 7.65% 7.65% Long-term expected rate of return,net of investment expense 7.65% 7.65% Bond Buyer General Obligation 20-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 30,2015. 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 the 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. The actuarial assumptions used to determine the total pension liability as of June 30, 2015, were based on the results of an actuarial experience study for the period July 1,2008-June 30,2013. Valuation Date July 1,2015 Measurement Date June 30,2015 Asset Valuation Method Fair Market Value Inflation 2.60% Salary increase including inflation 3.25% Mortality Generational RP-2000 with Projection Scale BB 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 30,2015. Sensitivity Analysis for the FRS Pension Plan. The following presents the net pension liability of the FRS,calculated using the discount rate of 7.65%, 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(6.65%)or one percentage point higher(8.65%)than the current rate. 1%Decrease Current Discount Rate 1%Increase 6.65% 7.65% 8.65% Total pension liability $181,923,555,126 $161,370,735,088 $144,267,412,898 Fiduciary net position 148,454,393,902 148,454,393,902 148,454,393,902 Net pension liability $33,469,161,224 $12,916,341,186 $4,186,981,004) Source:Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30,2015. 25694/006/01094478.DOCv3 A-18 1 1 A Retiree Health Insurance Subsidy The Retiree Health Insurance Subsidy ("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, 2015, 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, 2015, the contribution rate was 1.26% of payroll pursuant to Section 112.363, F.S. The state contributed 100% of its statutorily required contributions for the current and preceding two years. 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 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. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 A-19 1 1 A Pension Amounts for the HIS. Schedule of Changes in Net Pension Liability and Related Ratios«) (in thousands) Total Pension Liability June 30,2014 June 30,2015 Service cost $190,371 $217,519 Interest on total pension liability 409,907 405,441 Effect of plan changes 0 0 Effect of economic/demographic(gains)or losses 0 0 Effect of assumption changes or inputs 386,383 607,698 Benefit payments (407,276) (425,086) Net change in total pension liability 579,385 805,572 Total pension liability,beginning 8,864,244 9,443,629 Total pension liability,ending(a) $9,443,629 $10,249,201 Fiduciary Net Position Employer contributions $342,566 $382,454 Member contributions 0 0 Investment income net of investment expenses 219 208 Benefit payments (407,275) (425,085) Administrative expenses (54) (188) Net change in plan fiduciary net position (64,544) (42,611) Fiduciary net position,beginning 157,929 93,385 Fiduciary net position,ending(b) 93,385 50,774 Net pension liability,ending=(a)—(b) $9,350,244 10,198,427 Fiduciary net position as a%of total pension liability 0.99% 0.50% Covered payroll 29,676,340 30,340,449 Net pension liability as a%of covered payroll 31.51% 33.61% (1) This schedule will fill in to a ten-year schedule as results for new fiscal years are calculated. Source:Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30,2015. 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, 2014 ("funding valuation") were used for the HIS program, unless otherwise noted. In a given membership 25694/006/01094478.DOCv3 A-20 1 1 A dass and tier, the same assumptions for both FRS Investment Plan members and for FRS Pension Plan members were used. June 30,2014 June 30,2015 Discount rate 4.29% 3.80% Long-term expected rate of return,net of investment expense N/A N/A Bond Buyer General Obligation 20-Bond Municipal Bond Index 4.29% 3.80% Source:Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30,2015. 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. In September 2014, the Actuarial Assumptions Conference adopted the Bond Buyer General Obligation 20-Bond Municipal Bond Index as the applicable municipal bond index. The discount rate used in the 2014 valuation was updated from 4.29% to 3.80%, reflecting the change in the Bond Buyer General Obligation 20-Bond Municipal Bond Index as of June 30, 2015. The actuarial assumptions used to determine the total pension liability as of June 30, 2015, were based on the results of an actuarial experience study for the period July 1,2008-June 30,2013. Valuation Date July 1,2014 Measurement Date June 30,2015 Asset Valuation Method Fair Market Value Discount rate(municipal bond rate) 3.80% Inflation 2.60% 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 30,2015. [Remainder of page intentionally left blank] 25694/006/01094478.DOCv3 A-21 1 1 A Sensitivity Analysis for the HIS. The following presents the net pension liability of the HIS, calculated using the discount rate of 3.80%, 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(2.80%)or one percentage point higher(4.80%)than the current rate. 1%Decrease Current Discount Rate 1%Increase 2.80% 3.80% 4.80% Total pension liability $11,671,407,115 $10,249,201,290 $9,063,295,120 Fiduciary net position 50,774,315 50,774,315 50,774,315 Net pension liability $11,620,632,800 $10,198,426,975 $9,012,520,805 Source: Florida Retirement System Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report for Fiscal Year Ended June 30,2015. FRS Investment Plan The State Board of Administration administers the defined contribution plan officially titled the FRS Investment Plan. The Florida Legislature establishes and amends the benefit terms of the plan. Retirement benefits are based 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 Pension Plan (including the service credit 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 employer assessment of 0.04% 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. GASB 68 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 is effective for the County's fiscal year ended September 30, 2015. As a participating employer, the County implemented GASB No. 68, which requires an employer participating in a cost-sharing multiple-employer defined benefit pension plans to report the employer's proportionate share of the net pension liabilities of the defined benefit pension plans. The greatest impact of GASB No. 68 to the County will be the inclusion of the County's proportionate share of the FRS Net Pension Liability (the "County's Net Pension Liability"), which will reduce the County's Unrestricted Net Position and Total Net Position. Additionally,pension 25694/006/01094478.DOCv3 A-22 hA 1 expense is no longer equal to pension contributions made, but instead is equal to the change in net pension liability from year to year, with adjustments for deferred amounts. The County is also now required to include more extensive footnote disclosures and supplementary schedules. As a result of the implementation of GASB No. 68,the information contained in the County's audited financial statements for the fiscal year ended September 30,2014 and related notes included in Appendix B relating to pension fund liability is not indicative of how pension fund liability will be reported by the County going forward. It is expected that the financial reporting presentation in the "Statement of Activities" and "Statement of Net Position" on pages 19 through and including 21 in "APPENDIX C — Comprehensive Annual Financial Report for the Fiscal Year Ended September 30,2014"attached hereto will be changing, when compared to the Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2015. In particular, on the "Statement of Net Position," there will be a new "Non-Current Liability" category added called a "Net Pension Liability" (referred to above as the County's Net Pension Liability) that has been estimated by the County to approximate$161 million (may vary) as of September 30,2015, with the Water and Sewer District's proportionate share estimated to be $11.7 million (may vary). The addition of this category is expected to contribute to a reduction in the "Unrestricted Net Position" and the "Total Net Position" from $355.1 million and $2.521 billion, respectively, on September 30, 2014 to approximately $269.7 million and $2.493 billion, respectively, on September 30, 2015. Further, on the "Statement of Activities," it is expected that there will be an increase in total "Governmental Activities" Expenses and total "Business-type Activities" Expenses from $434.5 million and $183.7 million, respectively, on September 30, 2014 to approximately $451.7 million and$201.2 million, respectively, on September 30,2015. All of these decreases are accrual based accounting changes, and do not represent decreases in cash or liquidity positions. The County does not expect that implementation of GASB 68 will have any effect on the County's ability to pay debt service on the Series 2016 Bonds. Other Postemployment Benefit Plans General The Board of County Commissioners and the Tax Collector administer an additional single- employer defined benefit ("OPEB") plan and can amend the benefit provisions. The Board offers an OPEB Plan that subsidizes the cost of health care 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 eligible 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 fourteen retirees. The Tax Collector offers an OPEB plan that subsidizes 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. At October 1, 2015,the date of the latest actuarial valuation, County plan participation consisted of: OPEB plan participants 2,107 Retirees receiving benefits 70 25694/006/01094478.DOCv3 A-23 HA Funding Policy The County has the authority to establish and amend funding policy. For the year ended September 30,2015,the County contributed$831,869 to the OPEB Plan. No trust or agency fund has been established for the plan. Annual OPEB Cost and Net OPEB Obligation The annual cost of the County's OPEB Plan is calculated based on the Annual Required Contribution ("ARC"), an amount actuarially determined in accordance with the parameters of GASB Statement No.45. The ARC represents a level of funding that, if paid on an ongoing basis,is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The following table shows the components of the County's annual OPEB Plan cost for the year, the amount actually contributed,and the changes in the net OPEB Plan obligation. 2015 2014 2013 Annual Required Contribution(ARC) $825,046 $816,457 $749,470 Interest on Net OPEB Obligation 25,484 25,017 19,502 Adjustment to ARC (42,077) (41,306) (32,200) Annual OPEB Cost 808,453 800,168 736,772 Contributions Made (831,869) (784,612) (552,929) Increase/Decrease Net OPEB Obligation (23,416) 15,556 183,843 Net OPEB Obligation—Beginning of Year 849,469 833,913 650,070 Net OPEB Obligation—End of Year $826,053 $849,469 $833,913 Percentage of Annual OPEB Cost Contributed 98% 98% 75% Source: Collier County Comprehensive Annual Financial Report for Fiscal Year Ending September 30, 2015. Funded Status and Funding Progress As of the September 30, 2014 actuarial valuation date the OPEB Plan was 0.0% funded and the actuarial accrued liability for benefits was $6,977,743, and the actuarial value of plan assets was $0, resulting in an unfunded actuarial accrued liability("UAAL")of$6,977,743. As of the September 30,2015 actuarial valuation date the OPEB Plan was 0.0% funded and the actuarial accrued liability for benefits was $7,178,976, and the actuarial value of plan assets was $0, resulting in a UAAL of $7,178,976. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was$160.4 million, and the ratio of the UAAL to the covered payroll was 4.4%. 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. 25694/006/01094478.DOCv3 A-24 1 1 A 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 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 and assumptions are: Actuarial cost method Projected Unit Credit Actuarial Cost Amortization Method Level Dollar Amount Amortization Period 30 Years,Closed Investment Rate of Return 3% Discount Rate 3% Inflation Rate 3% Healthcare Cost Trend Rate 6%for the Fiscal Year 2017,grading to an ultimate rate of 5%for the Fiscal Year 2022 Plan Description The Sheriff administers a single-employer OPEB plan and can amend the benefit provisions. Prior to 2010, the Sheriff offered an OPEB Plan that subsidizes the cost of health care 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. The Sheriff subsidizes approximately 20% for both single and family coverage for qualifying individuals. In 2010,the subsidy was no longer made available to eligible retirees who chose to continue their health insurance coverage. Approximately 46% of retirees receive the subsidy. Additionally, in accordance with Florida Statute 112.0801, Sheriff's 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. The plan does not issue a separate financial report. At September 30, 2015, the date of the latest actuarial valuation, Sheriff plan participation consisted of: OPEB plan participants 1,138 Retirees receiving benefits 104 Funding Policy The Sheriff has the authority to establish and amend funding policy. For the year ended September 30,2015,the Sheriff contributed$742,376 to the OPEB Plan. No trust or agency fund has been established for the plan. 25694/006/01094478.DOCv3 A-25 1 1 A Annual OPEB Cost and Net OPEB Obligation The annual cost of the Sheriff's OPEB Plan is calculated based on the ARC,an amount actuarially determined in accordance with the parameters of GASB Statement No.45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liability over a period not to exceed 30 years. The following table shows the components of the Sheriff's annual OPEB Plan cost for the year, the amount actually contributed,and the changes in the net OPEB Plan obligation. 2015 2014 2013 Annual Required Contribution(ARC) $1,262,077 $1,138,923 $1,151,695 Interest on Net OPEB Obligation 50,437 40,348 31,444 Adjustment to ARC (83,277) (66,618) (51,918) Annual OPEB Cost 1,229,237 1,112,653 1,131,221 Contributions Made (742,376) (776332) (834,442) Increase/Decrease Net OPEB Obligation 486,861 336,321 296,779 Net OPEB Obligation-Beginning of Year 1,681,238 1,344,917 1,048,138 Net OPEB Obligation-End of Year $2,168,099 $1,681,238 $1,344,917 Percentage of Annual OPEB Cost Contributed 70% 70% 73% Source: Collier County Comprehensive Annual Financial Report for Fiscal Year Ending September 30, 2015. Funded Status and Funding Progress As of the September 30, 2014 actuarial valuation date, the OPEB Plan was 0.0% funded, the actuarial accrued liability for benefits was$14,207,209, and the actuarial value of assets was$0,resulting in an unfunded actuarial accrued liability ("UAAL") of $14,207,209. As of the September 30, 2015 actuarial valuation date, the OPEB Plan was 0.0%funded, the actuarial accrued liability for benefits was $14,207,209, and the actuarial value of assets was $0, resulting in a UAAL of$15,133,114. The covered payroll (annual payroll of active employees covered by the OPEB Plan) was$117.6 million, and the ratio of the UAAL to the covered payroll was 12.9%. 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 plan members in the future. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, 25694/006/01094478.DOCv3 A-26 1 1 A 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 and assumptions are: Actuarial cost method Projected Unit Credit Actuarial Cost Amortization Method Level Dollar Amount Amortization Period 30 Years,Closed Investment Rate of Return 3% Discount Rate 3% Inflation Rate 3% Healthcare Cost Trend Rate 8%for the Fiscal Year 2016,grading to an ultimate rate of 5%for the Fiscal Year 2022 25694/006/01094478.DOCv3 A-27 11A APPENDIX B COMPOSITE RESOLUTION 25694/006/01094478.DOCv3 hA APPENDIX C COLLIER COUNTY AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED SEPTEMBER 30,2015 25694/006/01094478.DOCv3 11A APPENDIX D FORM OF BOND COUNSEL OPINION 25694/006/01094478.DOCv3 11A APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE 25694/006/01094478.DOCv3 11A EXHIBIT C FORM OF ESCROW DEPOSIT AGREEMENT 1 1 A ESCROW DEPOSIT AGREEMENT ESCROW DEPOSIT AGREEMENT, dated as of May , 2016, by and between COLLIER COUNTY WATER-SEWER DISTRICT (the "District"), and U.S. BANK NATIONAL ASSOCIATION (the "Escrow Agent"), a national banking association existing under the laws of the United States of America, having its designated place of business in Fort Lauderdale, Florida, the address of which is 550 West Cypress Road, Suite 380, Fort Lauderdale, Florida 33309, as escrow agent hereunder. WHEREAS, the District has heretofore issued its Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2006 (the "Series 2006 Bonds") 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(collectively,the "Resolution"); and WHEREAS, the District has determined to exercise its option under the Resolution to current refund all of the outstanding Series 2006 Bonds (the "Refunded Bonds"), as described on Schedule A attached hereto; and WHEREAS, the District has determined to issue its $ aggregate principal amount of Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 (the "Series 2016 Bonds") pursuant to the Resolution, a portion of the proceeds of which Series 2016 Bonds will be used to purchase certain United States Treasury obligations in order to provide payment for the Refunded Bonds and discharge and satisfy the pledge of the Pledged Funds (as defined in the Resolution) and the covenants, agreements and other obligations of the District under the Resolution in regard to such Refunded Bonds; and WHEREAS, the issuance of the Series 2016 Bonds, the purchase by the Escrow Agent of the hereinafter defined Escrow Securities, the deposit of such Escrow Securities into an escrow deposit trust fund to be held by the Escrow Agent and the discharge and satisfaction of the pledge of the Pledged Funds and the covenants, agreements and other obligations of the District under the Resolution in regard to the Refunded Bonds shall occur as a simultaneous transaction; and WHEREAS, this Agreement is intended to effectuate such simultaneous transaction; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows: SECTION 1. PREAMBLES. The District represents that the recitals stated above are true and correct and the same are incorporated herein. 1 1 A SECTION 2. RECEIPT OF RESOLUTION AND VERIFICATION REPORT. Receipt of a true and correct copy of the above-mentioned Resolution and this Agreement is hereby acknowledged by the Escrow Agent. The applicable and necessary provisions of the Resolution, including but not limited to Article III and Section 9.01 of the Resolution, are incorporated herein by reference. The Escrow Agent also acknowledges receipt of the verification report of The Arbitrage Group, Inc., dated May , 2016 (the "Verification Report"). Reference herein to or citation herein of any provisions of the Resolution or the Verification Report shall be deemed to incorporate the same as a part hereof in the same manner and with the same effect as if the same were fully set forth herein. SECTION 3. DISCHARGE OF PLEDGE OF HOLDERS OF REFUNDED BONDS. The District by this writing exercises its option under Section 9.01 of the Resolution to cause the pledge of the Pledged Funds and all covenants, agreements and other obligations of the District under the Resolution to the holders of the Refunded Bonds to cease, terminate and become void and be discharged and satisfied. SECTION 4. ESTABLISHMENT OF ESCROW FUND. There is hereby created and established with the Escrow Agent a special, segregated and irrevocable escrow deposit trust fund designated the "Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2006, Escrow Deposit Trust Fund" (the "Escrow Fund"). The Escrow Fund shall be held in the custody of the Escrow Agent as a trust fund for the benefit of the holders of the Refunded Bonds separate and apart from other funds and accounts of the District and the Escrow Agent. The Escrow Agent hereby accepts the Escrow Fund and acknowledges the receipt of and deposit to the credit of the Escrow Fund the sum of$ received from the District from proceeds of the Series 2016 Bonds (the "Bond Proceeds") and $ received from the District from certain moneys on deposit in certain funds and accounts allocated to the Refunded Bonds (the "District Moneys"). SECTION 5. DEPOSIT OF MONEYS AND SECURITIES IN ESCROW FUND. The District hereby directs and the Escrow Agent represents and acknowledges that, concurrently with the deposit of the Bond Proceeds and District Moneys under Section 4 above, it has used $ of the Bond Proceeds and $ of District Moneys to purchase on behalf of and for the account of the District certain United States Treasury obligations (collectively, together with any other securities which may be on deposit, from time to time, in the Escrow Fund, the "Escrow Securities"), which are described in Schedule B hereto, and the Escrow Agent will deposit such Escrow Securities and $ in cash, all of which was derived from monies in the Interest Account and Principal Account (as such Accounts are defined in the Resolution) which were allocated to the Refunded Bonds (the "Cash Deposit") in the 2 hA1 Escrow Fund. All Escrow Securities shall be noncallable, direct obligations of the United States of America. In the event any of the Escrow Securities described in Schedule B hereto are not available for delivery on May , 2016, the Escrow Agent may, at the written direction of the District and with the approval of the District's bond counsel ("Bond Counsel"), substitute other United States Treasury obligations and shall credit such other obligations to the Escrow Fund and hold such obligations until the aforementioned Escrow Securities have been delivered. Bond Counsel shall, as a condition precedent to giving its approval, require the District to provide it and the Escrow Agent with a revised Verification Report in regard to the adequacy of the Escrow Securities, taking into account the substituted obligations to pay the Refunded Bonds in accordance with the terms hereof. The Escrow Agent shall in no manner be responsible or liable for failure or delay of Bond Counsel or the District to promptly approve the substitutions of other United States Treasury obligations for the Escrow Fund. SECTION 6. SUFFICIENCY OF ESCROW SECURITIES AND THE CASH DEPOSIT. In reliance upon the Verification Report, the District represents and warrants that the Cash Deposit and the interest on and the principal amounts successively maturing on the Escrow Securities in accordance with their terms (without consideration of any reinvestment of such maturing principal and interest) are sufficient such that moneys will be available to the Escrow Agent in amounts sufficient and at the times required to pay the amounts of principal of, premium, if any, and interest due and to become due on the Refunded Bonds as described in Schedule C attached hereto. If the Escrow Securities and the Cash Deposit shall be insufficient to make such payments, the District shall timely deposit to the Escrow Fund, solely from legally available funds of the District, such additional amounts as may be required to pay the Refunded Bonds as described in Schedule C hereto. Notice of any insufficiency shall be given by the Escrow Agent to the District as promptly as possible, but the Escrow Agent shall in no manner be responsible for the District's failure to make such deposits. SECTION 7. ESCROW SECURITIES AND THE CASH DEPOSIT IN TRUST FOR HOLDERS OF REFUNDED BONDS. The deposit of the Escrow Securities and the Cash Deposit in the Escrow Fund shall constitute an irrevocable deposit of Refunding Securities (as defined in the Resolution) and cash in trust solely for the payment of the principal of, premium, if any, and interest on the Refunded Bonds at such times and in such amounts as set forth in Schedule C hereto, and the principal of and interest earnings on such Escrow Securities and the Cash Deposit shall be used solely for such purpose. SECTION 8. ESCROW AGENT TO PAY REFUNDED BONDS FROM ESCROW FUND. The District hereby directs, and the Escrow Agent hereby agrees, that it will take all actions required to be taken by it under the provisions of the Resolution referenced in this Agreement, including the timely transfer of money to the 3 11 .4 paying agent for the Refunded Bonds (U.S. Bank National Association) as provided in the Resolution, in order to effectuate this Agreement and to pay the Refunded Bonds in the amounts and at the times provided in Schedule C hereto. The Escrow Securities and the Cash Deposit shall be used to pay debt service on the Refunded Bonds as they mature or are redeemed prior to maturity. The Refunded Bonds shall be redeemed prior to their respective maturities on July 1, 2016 (the "Redemption Date") at a redemption price equal to 100% of the principal amount of each Refunded Bond, plus interest accrued to the Redemption Date. If any payment date shall be a day on which either the paying agent for the Refunded Bonds or the Escrow Agent is not open for the acceptance or delivery of funds, then the Escrow Agent may make payment on the next business day. The liability of the Escrow Agent for the payment of the principal of, premium, if any, and interest on the Refunded Bonds pursuant to this Agreement shall be limited to the application of the Escrow Securities and the Cash Deposit and the interest earnings thereon available for such purposes in the Escrow Fund. SECTION 9. REINVESTMENT OF MONEYS AND SECURITIES IN ESCROW FUND. Moneys deposited in the Escrow Fund shall be invested, other than the Cash Deposit, only in the Escrow Securities listed in Schedule B hereto and, except as provided in Section 5 hereof and this Section 9, neither the District nor the Escrow Agent shall otherwise invest or reinvest any moneys in the Escrow Fund. Except as provided in Section 5 hereof and in this Section 9, the Escrow Agent may not sell or otherwise dispose of any or all of the Escrow Securities or the Cash Deposit in the Escrow Fund and reinvest the proceeds thereof in other securities nor may it substitute securities for any of the Escrow Securities, except upon written direction of the District and where, prior to any such reinvestment or substitution, the Escrow Agent has received from the District the following: (a) a written verification report by a firm of independent certified public accountants, of recognized standing, appointed by the District and acceptable to the Escrow Agent, to the effect that after such reinvestment or substitution the principal amount of Escrow Securities, together with the interest therein and any uninvested cash, will be sufficient to pay the Refunded Bonds as described in Schedule C hereto; and (b) a written opinion of nationally recognized Bond Counsel to the effect that (i) such investment will not cause the Series 2016 Bonds or the Refunded Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code, as amended, and the regulations promulgated thereunder or otherwise cause the interest on the Refunded Bonds or the Series 2016 Bonds to be included as gross income for purposes of federal income taxation, and (ii) such investment does not violate any provision of Florida law or of the Resolution. 4 1 1 A The above-described verification report need not be provided in the event the District purchases Escrow Securities with the proceeds of maturing Escrow Securities and such purchased Escrow Securities mature on or before the next interest payment date for the Refunded Bonds and have a face amount which is at least equal to the cash amount invested in such Escrow Securities. In the event the above-referenced verification concludes that there are surplus moneys in the Escrow Fund, such surplus moneys shall be released to the District upon its written direction. The Escrow Fund shall continue in effect until the date upon which the Escrow Agent makes the final payment to the paying agent for the Refunded Bonds in an amount sufficient to pay the Refunded Bonds as described in Schedule C hereto, whereupon the Escrow Agent shall sell or redeem any Escrow Securities remaining in the Escrow Fund, and shall remit to the District the proceeds thereof, together with all other money, if any,then remaining in the Escrow Fund. SECTION 10. REDEMPTION OF CERTAIN REFUNDED BONDS. The District shall cause the Registrar and Paying Agent for the Refunded Bonds (U.S. Bank National Association) to give on behalf of the District, at the appropriate times the notice or notices, if any, required by the Resolution in connection with the redemption of the Refunded Bonds. The Refunded Bonds shall be redeemed on July 1, 2016 at a redemption price equal to 100% of the principal amount thereof, plus accrued interest. The District shall cause the Registrar for the Refunded Bonds to file such redemption notice with the Electronic Municipal Market Access within 10 days of it being so given. SECTION 11. ESCROW FUND IRREVOCABLE. The Escrow Fund hereby created shall be irrevocable and the holders of the Refunded Bonds shall have an express lien on all Escrow Securities and the Cash Deposit deposited in the Escrow Fund pursuant to the terms hereof and the interest earnings thereon until paid out, used and applied in accordance with this Agreement and the Resolution. Neither the District nor the Escrow Agent shall cause nor permit any other lien or interest whatsoever to be imposed upon the Escrow Fund. SECTION 12. AMENDMENTS TO AGREEMENT. This Agreement is made for the benefit of the District and the holders from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such holders and the written consent of the Escrow Agent; provided, however, that the District and the Escrow Agent may, without the consent of, or notice to, such holders, enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of such holders and as shall not be inconsistent with the terms and provisions of this Agreement, for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; 5 11A (b) to grant, or confer upon, the Escrow Agent for the benefit of the holders of the Refunded Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Agent; and (c) to subject to this Agreement additional funds, securities or properties. The Escrow Agent shall be entitled to rely exclusively upon an unqualified opinion of nationally recognized Bond Counsel with respect to compliance with this Section 12, including the extent, if any, to which any change, modification Apr addition affects the rights of the holders of the Refunded Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section 12. SECTION 13. FEES AND EXPENSES OF ESCROW AGENT; INDEMNIFICATION. In consideration of the services rendered by the Escrow Agent under this Agreement, the District agrees to and shall pay to the Escrow Agent the fees and expenses as shall be agreed to in writing by the parties hereto. The Escrow Agent shall have no lien whatsoever upon any of the Escrow Securities in the Escrow Fund for the payment of such proper fees and expenses. To the extent allowed by applicable law, the District further agrees to indemnify and save the Escrow Agent harmless, to the extent allowed by law, against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, and which are not due to the Escrow Agent's own negligence or misconduct. Indemnification provided under this Section 13 shall survive the termination of this Agreement or the sooner resignation or removal of the Escrow Agent. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certifical signed by an authorized officer of the District. The Escrow Agent may conclusively ref'', as to the correctness of statements, conclusions and opinions therein, upon any certificate, report, opinion or other document furnished to the Escrow Agent pursuant to any provision of this Agreement; the Escrow Agent shall be protected and shall not be liable for acting or proceeding, in good faith, upon such reliance; and the Escrow Agent shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Escrow Agent may consult with counsel, who may be counsel to the District or independent counsel, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith in accordance herewith. Prior to retaining such independent counsel, the Escrow Agent shall notify the District of its intention. 6 1 1 A The Escrow Agent and its successors, agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, by reason of the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance and disposition of the various moneys and funds described herein, the purchase, retention or payment, transfer or other application of funds or securities by the Escrow Agent in accordance with the provisions of this Agreement or any non-negligent act, omission or error of the Escrow Agent made in good faith in the conduct of its duties. The Escrow Agent shall, however, be liable to the District and to holders of the Refunded Bonds to the extent of their respective damages for negligent or willful acts, omissions or errors of the Escrow Agent which violate or fail to comply with the terms of this Agreement. The duties and obligations of the Escrow Agent shall be determined by the express provisions of this Agreement. SECTION 14. REPORTING REQUIREMENTS OF ESCROW AGENT. As soon as practicable July 1, 2016, the Escrow Agent shall forward in writing to the District a statement in detail of the activity of the Escrow Fund. SECTION 15. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent, at the time acting hereunder, may at any time resign and be discharged from the duties and obligations hereby created by giving not less than 20 days' written notice to the District and mailing notice thereof, specifying the date when such resignation will take effect to the holders of all Refunded Bonds then outstanding, but no such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the holders of a majority in aggregate principal amount of the Refunded Bonds then outstanding or by the District as hereinafter provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. The Escrow Agent may be replaced at any time by an instrument or concurrent instruments in writing, delivered to the Escrow Agent and signed by either the District or the holders of a majority in aggregate principal amount of the Refunded Bonds then outstanding. Such instrument shall provide for the appointment of a successor Escrow Agent, which appointment shall occur simultaneously with the removal of the Escrow Agent. In the event the Escrow Agent hereunder shall resign or be removed, or be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case the Escrow Agent shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, a successor may be appointed by the District or by the holders of a majority in aggregate principal amount of the Refunded Bonds then outstanding by an instrument or concurrent instruments in writing, signed by such holders, or by their attorneys in fact, duly authorized in writing. In the event the holders of the Refunded Bonds shall appoint a 7 1 1 A successor Escrow Agent, the District may appoint a temporary Escrow Agent to fill such vacancy until a successor Escrow Agent shall be appointed by the holders of a majority in aggregate principal amount of the Refunded Bonds then outstanding in the manner above provided, and any such temporary Escrow Agent so appointed by the District shall immediately and without further act be superseded by the Escrow Agent so appointed by such holders. The District shall mail notice of any such appointment made by it at the times and in the manner described in the first paragraph of this Section 15. In the event that no appointment of a successor Escrow Agent or a temporary successor Escrow Agent shall have been made by such holders or the District pursuant to the foregoing provisions of this Section 15 within 20 days after written notice of resignation of the Escrow Agent has been given to the District, the holder of any of the Refunded Bonds or any retiring Escrow Agent may apply to any court of competent jurisdiction for the appointment of a successor Escrow Agent, and such court may thereupon, after such notice, if any, as it shall deem proper, appoint a successor Escrow Agent. In the event of replacement or resignation of the Escrow Agent, the Escrow Agent shall have no further liability hereunder and the District shall indemnify and hold harmless the Escrow Agent, to the extent allowed by law, from any such liability, including reasonable costs or expenses incurred by the Escrow Agent or its counsel. No successor Escrow Agent shall be appointed unless such successor Escrow Agent shall be a corporation with trust powers organized under the banking laws of the United States or any State, and shall have at the time of appointment capital and surplus of not less than $30,000,000. Every successor Escrow Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the District an instrument in writing accepting such appointment hereunder and thereupon such successor Escrow Agent, without any further act, deed or conveyance, shall become fully vested with all the rights, immunities, powers, trusts, duties and obligations of its predecessor; but such predecessor shall nevertheless, on the written request of such successor Escrow Agent or the District execute and deliver an instrument transferring to such successor Escrow Agent all the estates, properties, rights, powers and trust of such predecessor hereunder; and every predecessor Escrow Agent shall deliver all securities and moneys held by it to its successor; provided, however, that before any such delivery is required to be made, all fees, advances and expenses of the retiring or removed Escrow Agent shall be paid in full. Should any transfer, assignment or instrument in writing from the District be required by any successor Escrow Agent for more fully and certainly vesting in such successor Escrow Agent the estates, rights, powers and duties hereby vested or intended to be vested in the predecessor Escrow Agent, any such transfer, assignment and instruments in writing shall, on request, be executed, acknowledged and delivered by the District. 8 1 1 A Any corporation into which the Escrow Agent, or any successor to it in the trusts created by this Agreement, may be merged or converted or with which it or any successor to it may be consolidated, or any corporation resulting from any merger, conversion, consolidation or tax-free reorganization to which the Escrow Agent or any successor to it shall be a party shall be the successor Escrow Agent under this Agreement without the execution or filing of any paper or any other act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. SECTION 16. TERMINATION OF AGREEMENT. This Agreement shall terminate when all transfers and payments required to be made by the Escrow Agent under the provisions hereof shall have been made. Upon such termination, all moneys remaining in the Escrow Fund shall be released to the District. SECTION 17. GOVERNING LAW. This Agreement shall be governed by the applicable laws of the State of Florida but without regard to conflict of law principles. Any action or proceeding, in law or equity, arising out of or in any way related to this Agreement or the obligations hereunder shall be in Collier County, Florida. SECTION 18. SEVERABILITY. If any one or more of the covenants or agreements provided in this Agreement on the part of the District or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. SECTION 19. COUNTERPARTS. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. SECTION 20. NOTICES. Any notice, authorization, request or demand required or permitted to be given in accordance with the terms of this Agreement shall be in writing and sent by registered or certified mail addressed to: Collier County, Florida Collier County Government Complex 3299 Tamiami Trail East, #202 Naples, Florida 34112 Attention: County Manager Facsimile: (239) 252-8588 U.S. Bank National Association 550 West Cypress Road, Suite 380 Fort Lauderdale, FL 33309 Attention: Global Corporate Trust Services Facsimile: (954) 202-2082 9 11A IN WITNESS WHEREOF, the parties hereto have each caused this Escrow Deposit Agreement to be executed by their duly authorized officers and appointed officials and their seals to be hereunder affixed and attested as of the date first written herein. ATTEST: COLLIER COUNTY WATER-SEWER DWIGHT E. BROCK, CLERK DISTRICT By: By: Derek M. Johnssen, Deputy Clerk Chairwoman, Board of County Commissioners of Collier County, Florida, as the Ex-Officio Chairwoman of the Governing Board of the Collier County Water-Sewer District Approved as to form and legality: Jeffrey A. Klatzkow County Attorney U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent By: Vice President 10 11A SCHEDULE A REFUNDED BONDS SCHEDULE B 11A ESCROW SECURITIES [TO COME FROM VERIFICATION REPORT] 1 1 A SCHEDULE C DISBURSEMENT REQUIREMENTS FOR REFUNDED BONDS Principal Date Interest Redeemed Total July 1,2016 $ $ $ hA EXHIBIT D FORM OF CONTINUING DISCLOSURE CERTIFICATE 1 1 A APPENDIX E FORM OF 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 Refunding Revenue Bonds,Series 2016 (the"Bonds"). The Bonds are being issued pursuant to Resolution No. CWS-85-5 adopted on July 30, 1985, as restated, amended and supplemented by Resolution No. CWS-85-13 adopted on December 26, 1985, as amended and supplemented, particularly as supplemented by Resolution No. 2016- /CWS Resolution No. 2016 adopted by the governing board on April J 2016(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. DEFINTITONS. 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 Bonds 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 the Issuer, 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. "Listed Events"shall mean any of the events listed in Section 5(a)of this Disdosure Certificate. "MSRB"shall mean the Municipal Securities Rulemaking Board. E-1 1 1 A "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 disdosure 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 1934, 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, 2017 with respect to the report for the 2016 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 Certificate. 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 statements 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) Not later than fifteen (15) Business Days prior to the date set forth in (a) above, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). If the Issuer is unable to provide to any Repository and the Insurer an Annual Report as required in subsection (a),the Issuer(or the Dissemination Agent,if other than the Issuer) shall send a notice to any Repository, in electronic format as prescribed by such Repository, and to the Insurer, in substantially the form attached as Exhibit A. (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; E-2 1 1 A (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. 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 pursuant 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 , 2016 (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 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 E-3 1 1 A 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 15 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 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;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. E-4 1 1 A 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 the Issuer. 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. E-5 1 1 A Notwithstanding the foregoing, the Issuer shall have the right to adopt amendments to this Disdosure 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 Disdosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall indude, 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. ADDTTIONAL 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 Disdosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or indude it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 11. DEFAULT. The continuing disdosure 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 Disdosure 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 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, IlVIlVIUNI'I1hS AND LIABILITIES OF DISSEMINATION AGENT. The Dissemination Agent shall have only such duties as are specifically set forth in this Disdosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder,including the costs and expenses(including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. [Remainder of page intentionally left blank] E-6 1 1 A SECTION 13. BENEFICIARIES. This Disclosure Certificate shall inure solely 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 ,2016 COLLIER COUNTY,FLORIDA By: Chairwoman,of the Board of County Commissioners Approved as to Form and Legal Sufficiency: County Attorney E-7 11A EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Collier County Water-Sewer District Name of Bond Issue: Water and Sewer Refunding Revenue Bonds,Series 2016 Date of Issuance: ,2016 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Sections 3 and 4(b) of the Continuing Disclosure Certificate dated as of , 2016. The Issuer anticipates that the Annual Report will be filed by Dated: COLLIER COUNTY,FLORIDA By: Name: Title: E-8 ORIGINAL DOCUMENTS CHECKLIST & ROUTING SLIP TO ACCOMPANY ALL ORIGINAL DOCUMENTS SENT TO A THE BOARD OF COUNTY COMMISSIONERS OFFICE FOR SIGNATURE Print on pink paper. Attach to original document. The completed routing slip and original documents are to be forwarded to the County Attorney Office at the time the item is placed on the agenda. All completed routing slips and original documents must be received in the County Attorney Office no later than Monday preceding the Board meeting. **NEW** ROUTING SLIP Complete routing lines#1 through#2 as appropriate for additional signatures,dates,and/or information needed. If the document is already complete with the exception of the Chairman's signature,draw a line through routing lines#1 through#2,complete the checklist,and forward to the County Attorney Office. Route to Addressee(s) (List in routing order) Office Initials Date 1. 2. 3. County Attorney Office County Attorney Office JAK 4/12/16 4. BCC Office Board of County Commissioners \A/ 4.-k\\--s\x(, 5. Minutes and Records Clerk of Court's Office 'jam Lill 3)46 PRIMARY CONTACT INFORMATION Normally the primary contact is the person who created/prepared the Executive Summary. Primary contact information is needed in the event one of the addressees above,may need to contact staff for additional or missing information. Name of Primary Staff Derek Johnssen,Assistant Finance Director 252-7863 1 Contact/Department Agenda Date Item was 4/12/16 V Agenda Item Number 11-A Approved by the BCC Type of Document Rule 15c2-12 Certificate Number of Original One Attached Documents Attached PO number or account n/a number if document is to be recorded • INSTRUCTIONS & CHECKLIST Initial the Yes column or mark"N/A"in the Not Applicable column,whichever is Yes N/A(Not appropriate. .. (Initial) Applicable) 1. Does the document require the chairman's original si_ e STAMP OK JAK 2. Does the document need to be sent to another agency fo .itional signatures2-- yes, JAK provide the Contact Information(Name;Agency;Address;PhoneY on an attached sheet. 3. Original document has been signed/initialed for legal sufficiency. (All documents to be JAK signed by the Chairman,with the exception of most letters,must be reviewed and signed by the Office of the County Attorney. 4. All handwritten strike-through and revisions have been initialed by the County Attorney's JAK Office and all other parties except the BCC Chairman and the Clerk to the Board 5. The Chairman's signature line date has been entered as the date of BCC approval of the JAK document or the final negotiated contract date whichever is applicable. 6. "Sign here"tabs are placed on the appropriate pages indicating where the Chairman's JAK signature and initials are required. 7. In most cases(some contracts are an exception),the original document and this routing slip JAK should be provided to the County Attorney Office at the time the item is input into SIRE. Some documents are time sensitive and require forwarding to Tallahassee within a certain time frame or the BCC's actions are nullified. Be aware of your deadlines! 8. The document was approved by the BCC on 4/12/16 and all changes made during the JAK meeting have been incorporated in the attached document. The County Attorne ' Office has reviewed the changes,if applicable. 9. Initials of attorney verifying that the attached document is the version approv b the r-k, BCC,all changes directed by the BCC have been made,and the document i ready for theac.--"\ w Chairman's signature. 3aAr.lr\S PLEASE CONTACT DEREK WHEN READY I:Forms/County Forms/BCC Forms/Original Documents Routing Slip WWS Original 9.03.04,Revised 1.26.05,Revised 2.24.05;Revised 11/30/12 1 1 4 MEMORANDUM Date: April 13, 2016 To: Derek Johnssen, Assistant Finance Director Clerk of Courts Finance Department From: Teresa Cannon, Deputy Clerk Minutes & Records Department Re: Rule 15c2-12 Certificate Attached is an original of the document referenced above, (#11A) adopted by the Board of County Commissioners on Tuesday, April 12, 2016. If you have any questions, please feel free to contact me at 252-8411. Thank you. Attachment 1 1 A RULE 15c2-12 CERTIFICATE The undersigned, on behalf of Collier County, Florida (the "Issuer") hereby certifies and represents to the underwriter or underwriters that he is duly qualified to execute and deliver this certificate on behalf of the Issuer and further certifies on behalf of the Issuer as follows: (1) This Certificate is delivered to enable the underwriters to comply with the provisions of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule"), in connection with the offering and sale of the Water and Sewer Refunding Revenue Bonds, Series 2016(the"Bonds"); (2) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement dated April 15, 2016 (the "Preliminary Official Statement") setting forth information concerning the Bonds; (3) As used herein, "Permitted Omissions" shall mean offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, delivery date, bond ratings, the identity of the underwriter or underwriters and other terms or provisions of the Bonds depending on such matters; and (4) The Preliminary Official Statement, and the information contained therein, is, except for the Permitted Omissions, hereby deemed final as of its date within the meaning of the Rule. IN WITNESS WHEREOF,I have hereunto set my hand this 15th day of April,2016. COLLIER COUNTY,FLORIDA By: Name: onna Fiala Title: Chairwoman,Board of County Commissioners Approve as 6 f• and lega .uf 'e y: ll By: !�(jE�.A Name: Je ey . kow It Title: Co ty , ttorney .. �� ' `� Attest as to Chairman's signature only. 25694/006/01103254.DOCv2 ORIGINAL DOCUMENTS CHECKLIST & ROUTING SLIP 1 TO ACCOMPANY ALL ORIGINAL DOCUMENTS SENT TO j THE BOARD OF COUNTY COMMISSIONERS OFFICE FOR SIGNATURE Print on pink paper. Attach to original document. The completed routing slip and original documents are to be forwarded to the County Attorney Office at the time the item is placed on the agenda. All completed routing slips and original documents must be received in the County Attorney Office no later than Monday preceding the Board meeting. **NEW** ROUTING SLIP Complete routing lines#1 through#2 as appropriate for additional signatures,dates,and/or information needed. If the document is already complete with the exception of the Chairman's signature,draw a line through routing lines#1 through#2,complete the checklist,and forward to the County Attorney Office. Route to Addressee(s) (List in routing order) Office Initials Date 1. 2. 3. County Attorney Office County Attorney Office JAK 4/27/16 4. BCC Office Board of County �'b Commissioners \ (/ / 5. Minutes and Records Clerk of Court's Office v'.) 21,v 1 :21h1 PRIMARY CONTACT INFORMATION Normally the primary contact is the person who created/prepared the Executive Summary. Primary contact information is needed in the event one of the addressees above,may need to contact staff for additional or missing information. Name of Primary Staff Derek Johnsse ,Assistant Finance Director 252-7863 Contact/Department Agenda Date Item was 4/12/16 Agenda Item Number 11-A Approved by the BCC Type of Document Award Certificate—(Revenue Bond) Number of Original Four Certificates Attached Documents Attached PO number or account N/A number if document is to be recorded INSTRUCTIONS & CHECKLIST Initial the Yes column or mark"N/A"in the Not Applicable column,whichever is Yes N/A(Not appropriate. (Initial) Applicable) 1. Does the document require the chairman's original signature Stamp OK JAK 2. Does the document need to be sent to another agency for additional signatures? If yes, JAK provide the Contact Information(Name;Agency;Address;Phone)on an attached sheet. 3. Original document has been signed/initialed for legal sufficiency. (All documents to be JAK signed by the Chairman,with the exception of most letters,must be reviewed and signed by the Office of the County Attorney. 4. All handwritten strike-through and revisions have been initialed by the County Attorney's JAK Office and all other parties except the BCC Chairman and the Clerk to the Board 5. The Chairman's signature line date has been entered as the date of BCC approval of the JAK document or the final negotiated contract date whichever is applicable. 6. "Sign here"tabs are placed on the appropriate pages indicating where the Chairman's JAK signature and initials are required. 7. In most cases(some contracts are an exception),the original document and this routing slip JAK should be provided to the County Attorney Office at the time the item is input into SIRE. Some documents are time sensitive and require forwarding to Tallahassee within a certain time frame or the BCC's actions are nullified. Be aware of your deadlines! 8. The document was approved by the BCC on 4/12/16 and all changes made during the JAK meeting have been incorporated in the attached document. The County Attorney's Office has reviewed the changes,if applicable. 9. Initials of attorney verifying that the attached document is the version approved by the • „TR K BCC,all changes directed by the BCC have been made,and the document is ready fo the Chairman's signature. .. PLEASE CONTACT DEREK WHEN READY , 1:Forms/County Forms/BCC Forms/Original Documents Routing Slip WWS Original 9.03.04,Revised 1.26.05,Revised 2.24.05;Revised 11/30/12 11A 1.5 AWARD CERTIFICATE In accordance with Section 4 of Resolution 2016-71/CWS Resolution 2016-01 adopted by the Board of County Commissioners of Collier County, Florida, acting as the Ex-Officio Governing Board of the Collier County Water-Sewer District (the "Board"), on April 12, 2016, the undersigned, as Chairwoman of the Board, hereby awards the $48,105,000 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 (the "Bonds") to PNC Capital Markets (the "Underwriter") and hereby certifies that the terms of the Bonds shall be as set forth on Schedule 1 hereto and that all of the provisions of Resolution No. CWS-85-13, as amended and supplemented, shall apply to the Bonds. COLLIER COUNTY WATER-SEWER DISTRICT Chairwoman, Board of County Commissioners of Collier County, Florida, as the Ex-Officio Chairwoman of the Governing Board of the Collier County Water-Sewer District Approved as to form and lega 'ty, ,„ i ; . 0,,. A i IESI: -, 7 . DWIGHT E. OCK,CLERK Jeffreylatzkow Deputy Clerk Coun y {attorney Attest astoChair ?•,' s signature only. 1 1 A Schedule 1 TERMS OF THE BONDS MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND YIELDS Maturity Principal Interest (July 1) Amount Rate Yield 2029 $5,035,000 5.000% 2.000%* 2030 5,290,000 5.000 2.060* 2031 5,560,000 5.000 2.120* 2032 5,830,000 5.000 2.180* 2033 6,120,000 5.000 2.230* 2034 6,430,000 5.000 2.290* 2035 6,750,000 5.000 2.350* 2036 7,090,000 5.000 2.400* *Yield calculated to first optional call date of July 1,2026. Redemption Provisions Optional Redemption The Series 2016 Bonds are subject to redemption in whole or in part, at any time, on or after July 1, 2026, 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 2016 Bonds to be redeemed plus accrued interest to the date fixed for redemption, without premium. 1 1 A 1.5 AWARD CERTIFICATE In accordance with Section 4 of Resolution 2016-71/CWS Resolution 2016-01 adopted by the Board of County Commissioners of Collier County, Florida, acting as the Ex-Officio Governing Board of the Collier County Water-Sewer District (the "Board"), on April 12, 2016, the undersigned, as Chairwoman of the Board, hereby awards the $48,105,000 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 (the "Bonds") to PNC Capital Markets (the "Underwriter") and hereby certifies that the terms of the Bonds shall be as set forth on Schedule 1 hereto and that all of the provisions of Resolution No. CWS-85-13, as amended and supplemented, shall apply to the Bonds. COLLIER COUNTY WATER-SEWER DISTRICT i/r11,1112 ite;e4E....- Chairwothan, Board of County Commissioners of Collier County, Florida, as the Ex-Officio Chairwoman of the Governing Board of the Collier County Water-Sewer District Approved as to form and legality: I • ATTEST DWIGHT E.BROCK,CLERK Jeffrey A.'Kl.'zkow Deputy Clerk,`' co ' County A .o ey Attest as to Chairman's ji signature only. 11 A Schedule 1 TERMS OF THE BONDS MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND YIELDS Maturity Principal Interest (July 1) Amount Rate Yield 2029 $5,035,000 5.000% 2.000%* 2030 5,290,000 5.000 2.060* 2031 5,560,000 5.000 2.120* 2032 5,830,000 5.000 2.180* 2033 6,120,000 5.000 2.230* 2034 6,430,000 5.000 2.290* 2035 6,750,000 5.000 2.350* 2036 7,090,000 5.000 2.400* *Yield calculated to first optional call date of July 1, 2026. Redemption Provisions Optional Redemption The Series 2016 Bonds are subject to redemption in whole or in part, at any time, on or after July 1, 2026, 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 2016 Bonds to be redeemed plus accrued interest to the date fixed for redemption, without premium. 1 1 A 1.5 AWARD CERTIFICATE In accordance with Section 4 of Resolution 2016-71/CWS Resolution 2016-01 adopted by the Board of County Commissioners of Collier County, Florida, acting as the Ex-Officio Governing Board of the Collier County Water-Sewer District (the "Board"), on April 12, 2016, the undersigned, as Chairwoman of the Board, hereby awards the $48,105,000 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 (the "Bonds") to PNC Capital Markets (the "Underwriter") and hereby certifies that the terms of the Bonds shall be as set forth on Schedule 1 hereto and that all of the provisions of Resolution No. CWS-85-13, as amended and supplemented, shall apply to the Bonds. COLLIER COUNTY WATER-SEWER DISTRICT 4.f ..., „Id'4..... Chairwoma , Board of County Commissioners of Collier County, Florida, as the Ex-Officio Chairwoman of the Governing Board of the Collier County Water-Sewer District Approve A as to for, and lega ty: ' ', l IN QWIC}HT E.BROCK,CLERK \;��� �;,, .� f ;l l �: Jeffrey A. R at u •w 'Deputy Clerk �� i County Artorn Attest'as to`Chairman signature only. 1 1 A Schedule 1 TERMS OF THE BONDS MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND YIELDS Maturity Principal Interest (July 1) Amount Rate Yield 2029 $5,035,000 5.000% 2.000%* 2030 5,290,000 5.000 2.060* 2031 5,560,000 5.000 2.120* 2032 5,830,000 5.000 2.180* 2033 6,120,000 5.000 2.230* 2034 6,430,000 5.000 2.290* 2035 6,750,000 5.000 2.350* 2036 7,090,000 5.000 2.400* *Yield calculated to first optional call date of July 1,2026. Redemption Provisions Optional Redemption The Series 2016 Bonds are subject to redemption in whole or in part, at any time, on or after July 1, 2026, 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 2016 Bonds to be redeemed plus accrued interest to the date fixed for redemption, without premium. hA1 1.5 AWARD CERTIFICATE In accordance with Section 4 of Resolution 2016-71/CWS Resolution 2016-01 adopted by the Board of County Commissioners of Collier County, Florida, acting as the Ex-Officio Governing Board of the Collier County Water-Sewer District (the "Board"), on April 12, 2016, the undersigned, as Chairwoman of the Board, hereby awards the $48,105,000 Collier County Water-Sewer District Water and Sewer Refunding Revenue Bonds, Series 2016 (the "Bonds") to PNC Capital Markets (the "Underwriter") and hereby certifies that the terms of the Bonds shall be as set forth on Schedule 1 hereto and that all of the provisions of Resolution No. CWS-85-13, as amended and supplemented, shall apply to the Bonds. COLLIER COUNTY WATER-SEWER DISTRICT 444/14/491 144.. •Chairwoman, Board of County Commissioners of Collier County, Florida, -as the Ex-Officio Chairwoman of the Governing Board of the Collier County Water-Sewer District Approved as to form and legal' ATTEST: DWIGHT E,BROCK,CL RK Jeffre, A.T latzkow ` DO*Clerk Count A# orney Attest as to Chairma 's signature only. 1 1 A Schedule 1 TERMS OF THE BONDS MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND YIELDS Maturity Principal Interest (July 1) Amount Rate Yield 2029 $5,035,000 5.000% 2.000%* 2030 5,290,000 5.000 2.060* 2031 5,560,000 5.000 2.120* 2032 5,830,000 5.000 2.180* 2033 6,120,000 5.000 2.230* 2034 6,430,000 5.000 2.290* 2035 6,750,000 5.000 2.350* 2036 7,090,000 5.000 2.400* *Yield calculated to first optional call date of July 1,2026. Redemption Provisions Optional Redemption The Series 2016 Bonds are subject to redemption in whole or in part, at any time, on or after July 1, 2026, 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 2016 Bonds to be redeemed plus accrued interest to the date fixed for redemption, without premium.