The City of Miami, Florida - emma.msrb.org · THE CITY OF MIAMI, FLORIDA MAYOR Tomas A. Regalado CITY COMMISSIONERS Wifredo Gort, Chairman Frank X. Carollo, Vice Chair Mark D. Sarnoff

NEW ISSUE – BOOK-ENTRY ONLY Moody’s: “Aa3” (insured)“A3”(underlying)

S&P: “AA+ (insured)“BBB-”(underlying)

Fitch: “BBB+” (underlying) (See “RATINGS” herein)

In the opinion of Squire, Sanders & Dempsey (US) LLP, Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2011A Bonds is excluded 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 the Series 2011A Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Interest on the Series 2011A Bonds may be subject to certain federal taxes imposed only on certain corporations. For a more complete discussion of the tax aspects, see “TAx MATTerS” herein.

$70,645,000THE CITY OF MIAMI, FLORIDA

SPECIAL OBLIGATION NON-AD VALOREM REVENUE REFUNDING BONDSSERIES 2011A

Dated: Date of Delivery Due: February 1, as shown on inside cover

The Special Obligation Non-Ad Valorem Revenue Refunding Bonds, Series 2011A (the “Series 2011A Bonds”) are being issued by the City of Miami, Florida (the “City”) pursuant to the Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, the Charter of the City, and other applicable provisions of law (the “Act”) and pursuant to Resolution No. R-11-0228 of the City adopted by the City Commission of the City on May 26, 2011 (the “Resolution”).

The Series 2011A Bonds are being issued for the purpose of (i) refunding all or a portion of the Refunded Loans (as defined herein), on a current refunding basis; (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account and paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds, if any; and (iii) paying certain costs and expenses incurred in connection with the issuance of the Series 2011A Bonds, including the premiums for a municipal bond insurance policy and Reserve Account Insurance Policy.

The Series 2011A Bonds are being issued by the City as fully registered bonds, which initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Interest on the Series 2011A Bonds will be payable semi-annually on February 1 and August 1, commencing February 1, 2012. Individual purchases will be made in book-entry form only through participants in authorized denominations in the amounts of $5,000 or integrals thereof. Purchasers of the Series 2011A Bonds (the “Beneficial Owners”) will not receive physical delivery of certificates. Transfers of ownership interests in the Series 2011A Bonds will be effected through the DTC book-entry system as described herein. As long as Cede & Co. is the registered owner as nominee of DTC, principal and interest payments will be made directly to such registered owner which will in turn remit such payments to the participants for subsequent disbursement to the Beneficial Owners. Principal of and interest on the Series 2011A Bonds will be payable by Regions Bank, Jacksonville, Florida, as Bond Registrar.

Certain maturities of the Series 2011A Bonds are subject to optional redemption prior to their respective maturities, as described herein under “DESCRIPTION OF THE SERIES 2011A BONDS- Optional Redemption.”

The Series 2011A Bonds are payable from and secured by a lien upon and pledge of the Series 2011A Pledged Funds, which includes a covenant to budget and appropriate Non-Ad Valorem Revenues. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011A BONDS” and “INVESTMENT RISK FACTORS” herein.

THE CITY IS NOT OBLIGATED TO PAY THE SERIES 2011A BONDS OR THE INTEREST THEREON EXCEPT FROM THE SERIES 2011A PLEDGED FUNDS, AS HEREAFTER DEFINED. THE ISSUANCE OF THE SERIES 2011A BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE CITY TO LEVY OR TO PLEDGE ANY TAXES WHATEVER THEREFORE OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT EXCEPT FROM THE SERIES 2011A PLEDGED FUNDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, MIAMI-DADE COUNTY, FLORIDA, THE STATE OF FLORIDA OR ANY OTHER POLITICAL SUBDIVISION THEREOF IS PLEDGED TO PAYMENT OF THE SERIES 2011A BONDS.

This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. See “INVESTMENT RISK FACTORS” herein.

The scheduled payment of principal of and interest on the Series 2011A Bonds when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Series 2011A Bonds by Assured Guaranty Municipal Corp.

The Series 2011A Bonds are offered when, as, and if issued and received by the Underwriters, subject to the opinion on certain legal matters relating to their issuance by Squire, Sanders & Dempsey (US) LLP, Miami, Florida, Bond Counsel. Certain legal matters will be passed upon for the City by Julie 0. Bru, esq., City Attorney and by Bryant Miller Olive P.A., Miami, Florida, Disclosure Counsel to the City. First Southwest Company, Aventura, Florida is serving as Financial Advisor to the City. It is expected that the Series 2011A Bonds in definitive form will be available for delivery to the Underwriters in New York, New York at the facilities of DTC on or about July 21, 2011.

RBC CAPITAL MARKETS BofA MERRILL LYNCH Morgan Keegan RAYMOND JAMES & ASSOCIATES, INC.Dated: July 13, 2011

SERIES 2011A BONDS

$70,645,000

Serial Bonds

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICES AND INITIAL CUSIP NUMBERS

Maturity

(February 1) Principal Amount

Interest Rate

Yield

Price

Initial CUSIP Number**

2017 $365,000 4.000% 3.540% 102.290 593490JV8 2017 2,830,000 5.000 3.540 107.270 593490KL8 2018 200,000 4.000 3.920 100.455 593490JW6 2018 3,155,000 5.000 3.920 106.166 593490KM6 2019 125,000 4.250 4.240 100.062 593490JX4 2019 3,400,000 5.000 4.240 104.853 593490KN4 2020 250,000 4.500 4.480 100.139 593490JY2 2020 3,455,000 5.000 4.480 103.650 593490KP9 2021 2,135,000 4.625 4.650 99.807 593490JZ9 2021 1,755,000 5.000 4.650 102.667 593490KQ7 2022 1,870,000 4.875 4.910 99.713 593490KA2 2022 2,215,000 5.000 4.910 100.676* 593490KR5 2023 4,290,000 5.000 5.050 99.565 593490KB0 2024 4,515,000 5.200 5.200 100.000 593490KC8 2025 4,770,000 5.750 5.330 103.104* 593490KD6 2026 5,055,000 5.750 5.440 102.279* 593490KE4 2027 5,355,000 5.750 5.480 101.981* 593490KF1 2028 5,680,000 6.000 5.560 103.218* 593490KG9 2029 6,030,000 6.000 5.640 102.623* 593490KH7 2030 6,400,000 6.000 5.690 102.253* 593490KJ3 2031 6,795,000 6.000 5.750 101.812* 593490KK0

* Priced to first optional call date of February 1, 2021. **The City is not responsible for the use of the CUSIP numbers, nor is a representation made as to their correctness. The CUSIP numbers are included solely for the convenience of the readers of the Official Statement and may be changed after the issuance of the Series 2011A Bonds.

THE CITY OF MIAMI, FLORIDA

MAYOR Tomas A. Regalado

CITY COMMISSIONERS Wifredo Gort, Chairman

Frank X. Carollo, Vice Chair Mark D. Sarnoff Francis X. Suarez

Richard P. Dunn II

CITY MANAGER Johnny Martinez

FINANCE DIRECTOR Diana M. Gomez

CITY ATTORNEY Julie O. Bru, Esq.

_________

BOND COUNSEL

Squire, Sanders & Dempsey (US) LLP. Miami, Florida

________

DISCLOSURE COUNSEL Bryant Miller Olive P.A.

Miami, Florida

_________

FINANCIAL ADVISOR First Southwest Company

Aventura, Florida

No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations in connection with the Series 2011A 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 City or the Underwriters. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2011A 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 City, DTC and other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a representation by the Underwriters. The Underwriters listed on the cover page hereof have reviewed the information in this Official Statement in accordance with and as part of their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change.

THE INFORMATION RELATING TO THE INSURER CONTAINED HEREIN HAS BEEN FURNISHED BY THE INSURER. NO REPRESENTATION IS MADE BY THE CITY NOR THE UNDERWRITERS 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. NEITHER THE CITY NOR THE UNDERWRITERS HAVE MADE ANY INVESTIGATION INTO THE FINANCIAL CONDITION OF THE INSURER, AND NO REPRESENTATION IS MADE AS TO THE ABILITY OF THE INSURER TO MEET ITS OBLIGATIONS UNDER THE MUNICIPAL BOND INSURANCE POLICY.

The Insurer makes no representation regarding the Series 2011A Bonds or the advisability of investing in

the Series 2011A Bonds. In addition, the Insurer has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Insurer, supplied by the Insurer, and presented under the heading "MUNICIPAL BOND INSURANCE" and in "APPENDIX G – SPECIMEN MUNICIPAL BOND INSURANCE POLICY" attached hereto.

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT

TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2011A BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILITY, IF COMMENCED, MAY BE DISCOUNTED 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 2011A 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 2011A BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2011A BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

i

TABLE OF CONTENTS Contents Page

INTRODUCTION ....................................................................................................................................................... 1 THE REFUNDING PLAN ......................................................................................................................................... 2 ESTIMATED SOURCES AND USES OF FUNDS ................................................................................................... 3 DEBT SERVICE SCHEDULES ................................................................................................................................... 4 DESCRIPTION OF THE SERIES 2011 BONDS ....................................................................................................... 5

General .................................................................................................................................................................... 5 Book-Entry Only System ....................................................................................................................................... 5 Optional Redemption ............................................................................................................................................ 8 Notice of Redemption............................................................................................................................................ 8 Replacement of Bonds Mutilated, Destroyed, Stolen or Lost .......................................................................... 9 Negotiability, Registration and Cancellation ..................................................................................................... 9

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011A BONDS .............................................. 11 General .................................................................................................................................................................. 11 Flow of Funds ....................................................................................................................................................... 11 Debt Service Reserve Account ............................................................................................................................ 14 Description of Non-Ad Valorem Revenues ...................................................................................................... 15 Franchise Fees ....................................................................................................................................................... 15 Public Service Tax ................................................................................................................................................ 15 Local Communications Services Tax ................................................................................................................. 16 Licenses and Permits ........................................................................................................................................... 18 Intergovernmental ............................................................................................................................................... 18 Charges for Services ............................................................................................................................................ 21 Other Revenue and Financing Sources ............................................................................................................. 21 Special Investment Considerations .................................................................................................................... 24 Additional Debt Payable from Non-Ad Valorem Revenues .......................................................................... 25 Pledge of Non-Ad Valorem Revenues .............................................................................................................. 25

MANAGEMENT DISCUSSION OF BUDGET AND FINANCES ...................................................................... 26 Fiscal Year 2010 Results ....................................................................................................................................... 26 Fiscal Year 2011 Operations and Projections .................................................................................................... 28 Fiscal Year 2012 Operations and Projections .................................................................................................... 31 Revenue Assumptions ......................................................................................................................................... 31 Expense Assumptions ......................................................................................................................................... 31

FUTURE DEBT .......................................................................................................................................................... 31 MUNICIPAL BOND INSURANCE ........................................................................................................................ 32

Municipal Bond Insurance Policy ...................................................................................................................... 32 Assured Guaranty Municipal Corp ................................................................................................................... 32

INSURANCE RISK FACTORS ................................................................................................................................ 34 GENERAL INFORMATION REGARDING THE CITY OF MIAMI .................................................................. 35

Background ........................................................................................................................................................... 35 City Government .................................................................................................................................................. 35 Adoption of Investment Policy and Debt Management Policy ..................................................................... 36 Fiscal and Accounting Procedures..................................................................................................................... 37 General Fund ........................................................................................................................................................ 37

LIABILITIES OF THE CITY ..................................................................................................................................... 39

ii

Insurance Considerations Affecting the City ................................................................................................... 39 Workers’ Compensation ..................................................................................................................................... 39 Health Insurance .................................................................................................................................................. 39 Ability to be Sued, Judgments Enforceable ...................................................................................................... 40 Indebtedness of the City ..................................................................................................................................... 40 Direct Debt ............................................................................................................................................................ 41 Pension Plans ........................................................................................................................................................ 42 Accrued Compensated Absences ....................................................................................................................... 42 Other Post-Employment Benefits ...................................................................................................................... 42 Internal Auditor ................................................................................................................................................... 47 Financial Urgency ................................................................................................................................................ 47

INVESTMENT RISK FACTORS ............................................................................................................................. 48 LEGAL MATTERS .................................................................................................................................................... 50 SECURITIES AND EXCHANGE COMMISSION INVESTIGATION................................................................ 50 LITIGATION ............................................................................................................................................................. 51

Certain Legal Proceedings .................................................................................................................................. 51 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ............................................................ 54 TAX MATTERS ......................................................................................................................................................... 54

Original Issue Discount and Original Issue Premium .................................................................................... 56 RATINGS ................................................................................................................................................................... 57 FINANCIAL ADVISOR ........................................................................................................................................... 57 AUDITED FINANCIAL STATEMENTS ............................................................................................................... 57 UNDERWRITING .................................................................................................................................................... 58 CONTINGENT FEES ............................................................................................................................................... 58 ENFORCEABILITY OF REMEDIES ....................................................................................................................... 58 CONTINUING DISCLOSURE ................................................................................................................................ 59 ACCURACY AND COMPLETENESS OF PRELIMINARY OFFICIAL STATEMENT ................................... 59 FORWARD-LOOKING STATEMENTS ................................................................................................................. 59 MISCELLANEOUS ................................................................................................................................................... 60 AUTHORIZATION OF OFFICIAL STATEMENT ............................................................................................... 60 APPENDICES APPENDIX A: GENERAL INFORMATION REGARDING

THE CITY OF MIAMI AND MIAMI-DADE COUNTY APPENDIX B: PENSION PLANS APPENDIX C: FORM OF THE RESOLUTION APPENDIX D: COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF MIAMI FOR

FISCAL YEAR ENDED SEPTEMBER 30, 2010 APPENDIX E: FORM OF BOND COUNSEL OPINION APPENDIX F: FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT APPENDIX G: SPECIMEN MUNICIPAL BOND INSURANCE POLICY

OFFICIAL STATEMENT relating to $70,645,000

THE CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON-AD VALOREM REVENUE REFUNDING BONDS

SERIES 2011A

INTRODUCTION

The purpose of this Official Statement, including the cover page and appendices, is to set forth information concerning the Special Obligation Non-Ad Valorem Revenue Refunding Bonds, Series 2011A (the “Series 2011A Bonds”).

The City is situated at the mouth of the Miami River on the western shores of Biscayne Bay. It is the county seat of Miami-Dade County, Florida. The City comprises 34.3 square miles of land and 19.5 square miles of water. The City’s diversified economic base is comprised of light manufacturing, trade, commerce, wholesale, and retail trade and tourism. For more information about the City, see “APPENDIX A - GENERAL INFORMATION REGARDING THE CITY OF MIAMI AND MIAMI-DADE COUNTY, FLORIDA” attached hereto.

The Series 2011A Bonds are being issued pursuant to the Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, the Charter of the City, and other applicable provisions of law (the “Act”) and pursuant to Resolution No. R-11-0228 of the City adopted by the City Commission of the City on May 26, 2011 (the “Resolution”).

The Series 2011A Bonds are being issued for the purpose of (i) refunding all or a portion of the following loans on a current refunding basis: (a) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of September 30, 1987 issued in the original amount of $20,800,000, currently outstanding in the principal amount of $4,349,000, (b) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of January 27, 1988 issued in the original amount of $150,000, currently outstanding in the principal amount of $32,000, (c) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of May 31, 1988 issued in the original amount of $6,680,900, currently outstanding in the principal amount of $1,470,500, (d) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of June 30, 1995 issued in the original amount of $3,500,000, currently outstanding in the principal amount of $920,000, (e) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of October 3, 2007 issued in the original amount of $6,600,000, currently outstanding in the principal amount of $6,600,000, (f) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of August 14, 2008 issued in the original amount of $42,500,000, currently outstanding in the principal amount of $42,500,000, and (g) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of March 25, 2009 issued in the original amount of $20,000,000, currently outstanding in the principal amount of $12,700,000 (collectively, the “Refunded Loans”); (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account and paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds, if any; and (iii) paying certain costs and expenses incurred in connection with the issuance of the Series 2011A Bonds, including the premiums for a municipal bond insurance policy and Reserve Account Insurance Policy. See “THE REFUNDING PLAN” herein.

2

The Series 2011A Bonds will be payable from the Series 2011A Pledged Funds, which includes a covenant to budget and appropriate Non-Ad Valorem Revenues. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011A BONDS” herein.

The Series 2011A Bonds and any redemption premiums with respect thereto and the interest thereon shall not be or constitute a general debt, liability or obligation of the City or the State of Florida or any political subdivision thereof, or a pledge of the faith and credit of the City or of the State of Florida or any political subdivision thereof, but shall be payable solely from and secured by a lien upon and a pledge of the Series 2011A Pledged Funds and the City is not obligated to pay the Series 2011A Bonds, the redemption premiums, if any, related thereto or the interest thereon except from the Series 2011A Pledged Funds as provided in the Resolution. Neither the faith and credit nor the taxing power of the City or of the State of Florida or any political subdivision thereof is pledged to the payment of the Series 2011A Bonds. No Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation in any form on any property to pay such Series 2011A Bonds or the interest thereon, nor shall such Bondholder be entitled to payment of such principal and interest or premium thereon from any other funds of the City except the Series 2011A Pledged Funds as provided in the Resolution.

For discussion of various risks related to the purchase of the Series 2011A Bonds, see “INVESTMENT RISK FACTORS” herein.

The summaries of and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to each such document, statute, report or instrument. All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Resolution, unless the context would clearly indicate otherwise. A copy of the Resolution is attached hereto as “APPENDIX C -FORM OF THE RESOLUTION”.

All documents of the City referred to herein may be obtained from Diana M. Gomez, CPA, Finance Director, 444 S.W. 2nd Avenue, 6th Floor, Miami, Florida 33130, Telephone (305) 416-1324.

THE REFUNDING PLAN

The City has determined that it can restructure its annual debt service payments by providing for the

refinancing of all of the Refunded Loans. The refunding of the Refunded Loans will be accomplished through the issuance of the Series 2011A Bonds and the use of a portion of the proceeds thereof. Upon delivery of the Series 2011A Bonds, the Refunded Loans will be immediately paid.

3

ESTIMATED SOURCES AND USES OF FUNDS

The table that follows summarizes the estimated sources and uses of funds to be derived from the sale of the Series 2011A Bonds:

SOURCES:

Principal Amount of Series 2011A Bonds $70,645,000.00 Plus Original Net Premium $ 1,712,325.10 Available Monies(1) $ 510,867.33

TOTAL SOURCES $72,868,192.43

USES:

Deposit to trustee for Refunded Loans (3) $69,082,367.33 Deposit to subaccount of the

Debt Service Reserve Account $ 1,750,975.00 Costs of Issuance(2) $ 2,034,850.10

TOTAL USES $72,868,192.43

(1) Monies from the applicable Debt Service Fund relating to the Refunded Loans. (2) Includes underwriters’ discount, financial advisory fees and expenses, legal fees and expenses, rating agencies fees,

municipal bond insurance premium, Debt Service Reserve Account Policy premium, and miscellaneous costs of issuance.

(3) The amount deposited with the trustee for the Refunded Loans is based on a preliminary payoff amount and may be higher than the final amount required for the payment of the Refunded Loans. Any excess amounts will be returned to the City for deposit into the Sinking Fund for the Series 2011A Bonds.

[Remainder of page intentionally left blank]

4

DEBT SERVICE SCHEDULE

The following table sets forth the debt service requirements for the Series 2011A Bonds.

Period Ending (September 30)

Principal

Interest

Total

2012 $3,993,943.16 $3,993,943.16 2013 3,885,998.76 3,885,998.76 2014 3,885,998.76 3,885,998.76 2015 3,885,998.76 3,885,998.76 2016 3,885,998.76 3,885,998.76 2017 $3,195,000.00 3,807,948.76 7,002,948.76 2018 3,355,000.00 3,647,023.76 7,002,023.76 2019 3,525,000.00 3,476,492.51 7,001,492.51 2020 3,705,000.00 3,296,836.26 7,001,836.26 2021 3,890,000.00 3,111,589.38 7,001,589.38 2022 4,085,000.00 2,917,386.25 7,002,386.25 2023 4,290,000.00 2,709,180.00 6,999,180.00 2024 4,515,000.00 2,484,540.00 6,999,540.00 2025 4,770,000.00 2,230,012.50 7,000,012.50 2026 5,055,000.00 1,947,543.75 7,002,543.75 2027 5,355,000.00 1,648,256.25 7,003,256.25 2028 5,680,000.00 1,323,900.00 7,003,900.00 2029 6,030,000.00 972,600.00 7,002,600.00 2030 6,400,000.00 599,700.00 6,999,700.00 2031 6,795,000.00 203,850.00 6,998,850.00

Total $70,645,000.00 $ 53,914,797.62

$ 124,559,797.62

5

DESCRIPTION OF THE SERIES 2011A BONDS

General

The Series 2011A Bonds shall be issued as fully registered, book-entry only bonds in the denomination of $5,000 each or any integral multiple thereof through the book-entry only system maintained by The Depository Trust Company, New York, New York. The Series 2011A Bonds shall be numbered consecutively from l upward preceded by the letter “RA” prefixed to the number. The principal of and redemption premium, if any, on the Series 2011A Bonds shall be payable upon presentation and surrender at the principal office of Regions Bank, Jacksonville, Florida (the “Bond Registrar”). Interest on the Series 2011A Bonds (calculated on the basis of a 360 day year twelve 30-day months) is payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2012 and shall be paid by check or draft drawn upon the Bond Registrar and mailed to the registered owners of the Series 2011A Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the interest payment date (the “Record Date”), irrespective of any transfer or exchange of such Series 2011A Bonds subsequent to such Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date; provided, however, that (i) if ownership of Series 2011A Bonds is maintained in a book-entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to such securities depository or its nominee or (ii) if such Series 2011A Bonds are not maintained in a book-entry only system by a securities depository, upon written request of the holder of $1,000,000 or more in principal amount of Series 2011A Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such Holder (such bank being a bank within the continental United States), if such Holder has advanced to the Bond Registrar the amount necessary to pay the cost of such wire transfer or authorized the Bond Registrar to deduct the cost of such wire transfer from the payment due such Holder.

Notwithstanding anything in this paragraph to the contrary, any interest not punctually paid on a Regular Record Date shall forthwith cease to be payable to the Holder on such Regular Record Date and may be paid at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Bond Registrar, notice of which shall be given not less than 10 days prior to such special record date to such Holder.

Book-Entry Only System THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE CITY BELIEVES TO BE RELIABLE, BUT NEITHER THE CITY NOR THE UNDERWRITERS TAKE ANY RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS THEREOF. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2011A Bonds. The Series 2011A 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 certificate will be issued for each maturity of the Series 2011A Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of

6

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, 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"). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Series 2011A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2011A Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2011A Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2011A 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 Series 2011A Bonds, except in the event that use of the book-entry system for the Series 2011A Bonds is discontinued. To facilitate subsequent transfers, all Series 2011A 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 Series 2011A Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2011A Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2011A 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 2011A Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2011A Bonds, such as redemptions and proposed amendments to the Series 2011A Bond documents. For example, Beneficial Owners of Series 2011A Bonds may wish to ascertain that the nominee holding the Series 2011A Bonds for their benefit has agreed to

7

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 2011A Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2011A 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 City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2011A Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2011A 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 City on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with Series 2011A Bonds held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Bond Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Bond Registrar, 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 securities depository with respect to the Series 2011A Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2011A Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Series 2011A Bond certificates will be printed and delivered to DTC. Thereafter, Series 2011A Bond certificates may be transferred and exchanged as described in the Resolution. See “-Negotiability, Registration and Cancellation” herein. THE CITY AND THE BOND REGISTRAR WILL HAVE NO RESPONSIBILITY OR OBLIGATION TO THE BENEFICIAL OWNERS, DTC PARTICIPANTS OR THE PERSONS FOR WHOM DTC PARTICIPANTS ACT AS NOMINEES WITH RESPECT TO THE SERIES 2011A BONDS, FOR THE ACCURACY OF RECORDS OF DTC, CEDE & CO. OR ANY DTC PARTICIPANT WITH RESPECT TO THE SERIES 2011A BONDS OR THE PROVIDING OF NOTICE OR PAYMENT OF PRINCIPAL OR INTEREST ON THE SERIES 2011A BONDS, TO DTC PARTICIPANTS OR BENEFICIAL OWNERS, OR THE SELECTION OF SERIES 2011A BONDS FOR REDEMPTION.

8

Optional Redemption The Series 2011A Bonds maturing on or prior to February 1, 2021 are not redeemable prior to their respective dates of maturity. The Series 2011A Bonds maturing on and after February 1, 2022, are subject to redemption at the option of the City on or after February 1, 2021, in whole or in part at any time, in such manner as shall be determined by the Bond Registrar, at a redemption price equal to the par amount thereof plus accrued interest to the date fixed for redemption.

Notice of Redemption

Notice of redemption for Series 2011A Bonds being redeemed shall be given by deposit in the U.S. mail of a copy of a redemption notice, postage prepaid, at least thirty (30) days before the redemption date, to all registered owners of the Series 2011A Bonds or portions of the Series 2011A Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Failure to mail any such notice to a registered owner of a Series 2011A Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Series 2011A Bond or portion thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Series 2011A Bond being redeemed, the name and address of the Bond Registrar, the redemption price to be paid and, if less than all of the Series 2011A Bonds of a series then Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Series 2011A Bonds to be redeemed and, in the case of Series 2011A Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Series 2011A Bond is to be redeemed in part only, the notice of redemption which relates to such Series 2011A Bond shall also state that on or after the redemption date, upon surrender of such Series 2011A Bond, a new Series 2011A Bond or Series 2011A Bonds in a principal amount equal to the unredeemed portion of such Series 2011A Bond will be issued. The optional redemption of the Series 2011A Bonds, if any, may be conditioned upon the receipt by the Bond Registrar of sufficient moneys to pay the redemption price of the Series 2011A Bonds to be redeemed. If the optional redemption of any of the Series 2011A Bonds is conditioned upon the receipt of sufficient moneys as described above, the notice of redemption which relates to such Series 2011A Bonds shall also state that the redemption is so conditioned.

Any notice mailed as provided in the Resolution shall be conclusively presumed to have been duly given, whether or not the owner of such Series 2011A Bond receives such notice.

Notice having been given in the manner and under the conditions provided in the Resolution, the Series 2011A Bonds or portions of Series 2011A Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption for such Series 2011A Bonds or portions of Series 2011A Bonds on such date; provided, however, that Series 2011A Bonds or portion of Series 2011A Bonds called for optional redemption and which redemption is conditioned upon the receipt of sufficient moneys as described above, shall not become due and payable on the redemption date if sufficient moneys to pay the redemption price of such Series 2011A Bonds or portions of Series 2011A Bonds have not been received by the Bond Registrar on or prior to the redemption date. On the date so designated for redemption, moneys for payment of the redemption price being held in separate accounts by the Bond Registrar in trust for the registered owners of the Series 2011A Bonds or portions thereof to be redeemed, all as provided in the Resolution, interest on the Series 2011A Bonds or portions of Series 2011A Bonds so called for redemption shall cease to accrue, such Series 2011A Bonds and portions of Series 2011A Bonds shall cease to be entitled to any lien, benefit or security under the Resolution and shall be deemed paid hereunder, and the registered owners of such Series 2011A Bonds or portions of Series 2011A

9

Bonds shall have no right in respect thereof except to receive payment of the redemption price thereof and, to the extent provided below, to receive Series 2011A Bonds for any unredeemed portions of the Series 2011A Bonds.

In case part but not all of a Series 2011A Bond shall be selected for redemption, the registered owners thereof shall present and surrender such Series 2011A Bond to the Bond Registrar for payment of the principal amount thereof so called for redemption, and the City shall execute and deliver to or upon the order of such registered owner, without charge therefor, for the unredeemed balance of the principal amount of the Series 2011A Bonds so surrendered, a Series 2011A Bond or Series 2011A Bonds fully registered as to principal and interest.

Replacement of Bonds Mutilated, Destroyed, Stolen or Lost

In case any Series 2011A Bond shall become mutilated, destroyed, stolen or lost, the City may execute and the Bond Registrar shall authenticate and deliver a new Series 2011A Bond of like series, maturity, denomination and interest rate as the Series 2011A Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated Series 2011A Bond, such mutilated Series 2011A Bond shall first be surrendered to the City and, in the case of any lost, stolen or destroyed Series 2011A Bond, there shall first be furnished to the City and the Bond Registrar evidence of such loss, theft, or destruction satisfactory to the City and the Bond Registrar, together with indemnity satisfactory to them. In the event any such Series 2011A Bond shall be about to mature or has matured or has been called for redemption, instead of issuing a duplicate Series 2011A Bond, the City may direct the Bond Registrar to pay the same without surrender thereof. The City and Bond Registrar may charge the Holder of such Series 2011A Bonds their reasonable fees and expenses in connection with this transaction. Any Series 2011A Bond surrendered for replacement shall be canceled in the same manner as provided in the Resolution.

Any such duplicate Series 2011A Bonds issued pursuant to the Resolution shall constitute additional contractual obligations on the part of the City, whether or not the lost, stolen or destroyed Series 2011A Bonds be at any time found by anyone, and such duplicate Series 2011A Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the applicable Pledged Funds, with all other Series 2011A Bonds issued under the Resolution.

Negotiability, Registration and Cancellation

At the option of the Holder thereof and upon surrender thereof at the designated corporate trust office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Holder or his duly authorized attorney and upon payment by such Holder of any charges which the Bond Registrar or the City may make as provided in this Section, the Series 2011A Bonds may be exchanged for Series 2011A Bonds of the same series, aggregate principal amount of the same maturity of any other authorized denominations.

The Bond Registrar shall keep books for the registration of Series 2011A Bonds and for the registration of transfers of Series 2011A Bonds. The Series 2011A Bonds shall be transferable by the Holder thereof in person or by his attorney duly authorized in writing only upon the books of the City kept by the Bond Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Holder or his duly authorized attorney. Upon the transfer of any such Series 2011A Bond, the City shall cause to be issued in the name of the transferee a new Series 2011A Bond or Series 2011A Bonds.

10

The City, the Bond Registrar and any other fiduciaries may deem and treat the person in whose name any Series 2011A Bond shall be registered upon the books kept by the Bond Registrar as the absolute Holder of such Series 2011A Bond, whether such Series 2011A Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, redemption premium, if any, and interest on such Series 2011A Bond as the same becomes due and for all other purposes. All such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Series 2011A Bond to the extent of the sum or sums so paid, and neither the City, the Bond Registrar nor any other fiduciary shall be affected by any notice to the contrary.

In all cases in which the privilege of exchanging Series 2011A Bonds or transferring Series 2011A Bonds is exercised, the City shall execute and the Bond Registrar shall authenticate and deliver Series 2011A Bonds in accordance with the provisions of the Resolution. All Series 2011A Bonds surrendered in any such exchanges or transfers shall forthwith be delivered to the Bond Registrar and canceled by the Bond Registrar in the manner provided in the Resolution. There shall be no charge for any such exchange or transfer of Series 2011A Bonds, but the City or the Bond Registrar may require the payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither the City nor the Bond Registrar shall be required (a) to transfer or exchange Series 2011A Bonds for a period of 15 days next preceding any selection of Series 2011A Bonds to be redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange any Series 2011A Bonds called for redemption.

All Series 2011A Bonds paid or redeemed, either at or before maturity shall be delivered to the Bond Registrar when such payment or redemption is made, and such Series 2011A Bonds, together with all Series 2011A Bonds purchased by the City, shall thereupon be promptly canceled. Series 2011A Bonds so canceled may at any time be destroyed by the Bond Registrar, who shall execute a certification of destruction in duplicate by the signature of one of its authorized officers describing the Series 2011A Bonds so destroyed, and one executed certificate shall be filed with the City and the other executed certificate shall be retained by the Bond Registrar.

[Remainder of page intentionally left blank.]

11

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011A BONDS

General

Payment of the principal of, premium, if any, and interest on the Series 2011A Bonds shall be secured by a lien upon and pledge of the Series 2011A Pledged Funds. The “Series 2011A Pledged Funds” are defined in the Resolution to mean collectively, all moneys, securities and instruments held in the subaccounts Funds and Accounts created and established under the Resolution for the Series 2011A Bonds.

As more particularly described in the following paragraph, the City has covenanted in the Resolution to budget and appropriate, by amendment if necessary, and to deposit into the Sinking Fund, Non-Ad Valorem Revenues lawfully available in each Fiscal Year, amounts sufficient to satisfy the (i) Annual Debt Service Requirement for such Fiscal Year , (ii) any deposits required to be made into the Debt Service Reserve Account during such Fiscal Year, (iii) any other amounts due the Providers of any Bond Insurance Policy, Reserve Account Insurance Policy or Reserve Account Letter of Credit and the Bond Registrar during such Fiscal Year and (iv) any Rebate Amount due during such Fiscal Year as provided in the Resolution. “Non-Ad Valorem Revenues” are defined in the Resolution to mean all revenues of the City derived from any source whatsoever, other than ad valorem taxation on real or personal property, which are legally available to make the payments required under the Resolution. However, for purposes of calculation of the test required for issuing additional debt secured by or payable from the Pledged Funds, CRA Interlocal Revenues shall not be considered Non-Ad Valorem Revenues. “CRA Interlocal Revenues” are defined in the Resolution to mean those revenues of the OMNI CRA paid to the City pursuant to the Interlocal Agreement dated June 24, 1996 among the City, Miami-Dade County, Florida and the Omni CRA.

Such covenant to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Revenues, nor does it preclude the City from pledging in the future its Non-Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the Bondholders, the Providers of any Bond Insurance Policy, Reserve Account Insurance Policy or Reserve Account Letter of Credit or the Bond Registrar a prior claim on the Non-Ad Valorem Revenues as opposed to claims of general creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non-Ad Valorem Revenues heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein shall have the effect of making available in the manner described herein Non-Ad Valorem Revenues and placing on the City a positive duty to budget and appropriate, by amendment, if necessary, amounts sufficient to meet its obligations hereunder; subject, however, in all respects to the restrictions of Section 166.241(3), Florida Statutes, which provides, in part, that the governing body of each municipality make appropriations for each Fiscal Year which, in any one year, shall not exceed the amount to be received from taxation or other revenue sources; and subject further, to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law.

Flow of Funds

The Resolution established a Sinking Fund, and within the Sinking Fund, four separate accounts therein designated as the Interest Account, the Principal Account, the Bond Redemption Account and the Debt Service Reserve Account. There is further created within each account, a separate subaccount for the Series 2011A Bonds.

12

Non Ad-Valorem Revenues appropriated in each Fiscal Year for the payment of the principal of, redemption premium, if any, and interest on the Series 2011A Bonds, shall be applied in the following manner:

1. To the full extent necessary, for deposit into each subaccount of the Interest Account in the Sinking Fund, on the fifth (5th) day preceding each Interest Payment Date, such sums as shall be sufficient to pay the interest becoming due on the Series 2011A Bonds on each such Interest Payment Date; provided, however, that such deposits for interest shall not be required to be made into the applicable subaccount of the Interest Account to the extent that money on deposit therein is sufficient for such purpose.

The City shall, on each Interest Payment Date, transfer to the Bond Registrar moneys in an amount equal to the interest due on such Interest Payment Date or shall, prior to such Interest Payment Date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such Interest Payment Date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the appropriate subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable.

2. (a) To the full extent necessary, for deposit into each subaccount of the Principal Account in the Sinking Fund, on the fifth (5th) day preceding each principal maturity date, the principal amount of Serial Bonds which will mature and become due on such maturity dates; provided, however, that such deposits for principal shall not be required to be made into the applicable subaccount of the Principal Account to the extent that money on deposit therein is sufficient for such purpose.

The City shall, on each principal payment date, transfer to the Bond Registrar moneys in an amount equal to the principal due on such principal payment date or shall, prior to such principal payment date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such principal payment date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit, if any, on deposit in the appropriate subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable.

(b) To the full extent necessary, for deposit into each subaccount of the Bond Redemption Account, if applicable, in the Sinking Fund, on the fifth (5th) day preceding each redemption or maturity date, the Amortization Requirements as may be necessary for the payment of any Term Bonds payable from such subaccount of the Bond Redemption Account on such redemption or maturity dates; provided, however, that such deposits for Amortization Installments shall not be required to be made into the applicable subaccount of the Bond Redemption Account to the extent that money on deposit therein is sufficient for such purpose.

The moneys in such subaccount of the Bond Redemption Account shall be used solely for the purchase or redemption of Term Bonds payable therefrom. The City may at any time purchase any of said Term Bonds or portions thereof at prices not greater than the then redemption price of said Term Bonds. If the Term Bonds are not then redeemable, the City may purchase said Term Bonds at prices not greater than the redemption price of such Term Bonds on the next ensuing redemption date. The City is mandatorily obligated to use any moneys in such subaccount of the Bond Redemption Account for the redemption prior to maturity of such Term Bonds in such manner and at such times as the same are subject to mandatory redemption. If, by the application of moneys in a subaccount of the Bond Redemption Account, the City shall purchase or call for redemption in any year Term Bonds in excess of the Amortization Requirements for such

13

year, such excess of Term Bonds so purchased or redeemed shall be credited in such manner and at such times as the Director of Finance shall determine over the remaining payment dates.

The City shall, on each redemption or maturity date, transfer to the Bond Registrar moneys in an amount equal to the payments due on the Term Bonds on such redemption or maturity date or shall, prior to such redemption or maturity date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such redemption or maturity date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the applicable subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable.

3. To the full extent necessary, for deposit into each subaccount of the Debt Service Reserve Account in the Sinking Fund on the fifteenth (15th) day of each month in each year, beginning with the fifteenth (15th) day of the first full calendar month following the date on which there is a deficiency in the amount required to be on deposit in the subaccounts of the Debt Service Reserve Account, such sums as shall be at least sufficient to pay an amount equal to one-twelfth (1/12) of the difference between the amount on deposit in the Debt Service Reserve Account (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) and the Reserve Account Requirement; provided, however, that no payments shall be required to be made into the Debt Service Reserve Account whenever and as long as the amount on deposit therein (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) shall be equal to the Reserve Account Requirement for such Series of Bonds.

Moneys in the subaccount of the Debt Service Reserve Account shall be used only for the purpose of making payments of principal of and interest on the corresponding Series of Bonds when the moneys in any other subaccount of any Account held pursuant to the Resolution and available for such purpose are insufficient therefor. Moneys on deposit in a subaccount shall only be used for the corresponding Series of Bonds.

Any moneys in the subaccounts of the Debt Service Reserve Account in excess of the Reserve Account Requirement for such Series of Bonds may, in the discretion of the City, be transferred to and deposited into the applicable subaccount of the Interest Account, the Principal Account or the Bond Redemption Account as the City at its option may determine.

4. To the Providers, if any, and the Bond Registrar, as applicable, in payment of amounts payable to such parties during such Fiscal year not paid pursuant to the above provisions.

The Series 2011A Bonds shall not be and shall not constitute an indebtedness of the City, within the meaning of any constitutional, statutory or charter provisions or limitations, but shall be payable solely, as provided in the Resolution, from the Series 2011A Pledged Funds, and solely to the extent provided in the Resolution, the Non-Ad Valorem Revenues that have been budgeted and appropriated for such purpose. No holder or holders of any Series 2011A Bonds shall ever have the right to compel the exercise of the ad valorem taxing power of the City, the State, or any other political subdivision thereof or taxation in any form on any real or personal property therein or the application of any funds of the City, except the Series 2011A Pledged Funds, and solely to the extent provided in the Resolution, the Non-Ad Valorem Revenues that have been budgeted and appropriated to pay the Series 2011A Bonds or the interest thereon or the making of any sinking fund, reserve or other payments provided for in the Resolution.

Enforcement of the City’s obligation to budget and appropriate legally available Non-Ad Valorem Revenues shall be through appropriate judicial proceedings. The City has issued and may issue other bonds or debt obligations secured by a similar covenant. See “The City of Miami, Florida Schedule of Principal and

14

Interest for Non-Ad Valorem Revenue Bonds and Loans” herein. In addition, various contracts of the City which do not constitute debt may be secured in a similar manner.

The City has not covenanted to maintain any programs or other activities which generate Non-Ad Valorem Revenues. Furthermore, the obligation of the City to budget and appropriate Non-Ad Valorem Revenues is subject to a variety of factors, including the payment of essential governmental services of the City and the obligation of the City to have a balanced budget. For a description of additional limitations see “Special Investment Considerations” herein.

Debt Service Reserve Account

The Resolution requires the City to maintain on deposit in a subaccount of the Debt Service Reserve Account an amount equal to the Reserve Account Requirement for such series of Series 2011A Bonds. The "Reserve Account Requirement" is with respect to the Series 2011A Bonds is one half of the Maximum Annual Debt Service on all Series 2011A Bonds Outstanding. The Reserve Account Requirement for the Series 2011A Bonds is equal to $3,501,950.00. The subaccount in the Debt Service Reserve Account shall be funded with $1,750,975.00 of the proceeds from the Series 2011A Bonds, simultaneously with the delivery of the Series 2011A Bonds and the remainder will be funded by a Reserve Account Insurance Policy issued by Assured Guaranty Municipal Corp. See “MUNICIPAL BOND INSURANCE” for a description of Assured Guaranty Municipal Corp. See “ESTIMATED SOURCES AND USES OF FUNDS” herein.

In lieu of or in substitute for the required deposits (including existing deposits therein) into the subaccount of the Debt Service Reserve Account, the City may cause to be deposited into such subaccount of the Debt Service Reserve Account a Reserve Account Insurance Policy or a Reserve Account Letter of Credit for the benefit of the Holders of the corresponding Series of Bonds Outstanding, which Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be payable or available to be drawn upon, as the case may be (upon the giving of notice as required thereunder), on any Interest Payment Date or principal payment date or mandatory redemption date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to the Resolution and available for such purpose. If a disbursement is made under the Reserve Account Insurance Policy or the Reserve Account Letter of Credit, the City shall be obligated to either (i) reinstate the maximum limits of such Reserve Account Insurance Policy or Reserve Account Letter of Credit within twelve months by increasing the amount payable or available to be drawn thereunder in equal monthly amounts over such twelve month period, or (ii) deposit, on a monthly basis in accordance with the Resolution, into the applicable subaccount of the Debt Service Reserve Account from the Non-Ad Valorem Revenues appropriated in accordance with the Resolution, funds in the amount of the disbursements made under such Reserve Account Insurance Policy or Reserve Account Letter of Credit, or a combination of such alternatives as shall equal the Reserve Account Requirement for the applicable series of Bonds Outstanding.

In the event that upon the occurrence of any deficiency in the subaccount of the Interest Account, the Principal Account or the Bond Redemption Account, the applicable subaccount of the Debt Service Reserve Account is then funded with one or more Reserve Account Insurance Policies and/or Reserve Account Letters of Credit, the City or the Bond Registrar, as applicable, shall, on an interest or principal payment date or mandatory redemption date to which such deficiency relates, draw upon or cause to be paid under such facilities, on a pro-rata basis thereunder, an amount sufficient to remedy such deficiency, in accordance with the terms and provisions of such facilities and any corresponding reimbursement or other agreement governing such facilities; provided however, that if at the time of such deficiency the applicable subaccount of the Debt Service Reserve Account is only partially funded with one or more Reserve Account Insurance

15

Policies and/or Reserve Account Letters of Credit, prior to drawing on such facilities or causing payments to be made thereunder, the City shall first apply any cash and securities on deposit in the applicable subaccount of the Debt Service Reserve Account to remedy the deficiency and, if after such application a deficiency still exists, the City or the Bond Registrar, as applicable, shall make up the balance of the deficiency by drawing on such facilities or causing payments to be made thereunder, as provided in this paragraph. Amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be applied as set forth in the Resolution. Any amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be reimbursed to the Provider thereof in accordance with the terms and provisions of the reimbursement or other agreement governing such facility.

Description of Non-Ad Valorem Revenues

The following describes the sources of the City’s Non-Ad Valorem Revenues:

Franchise Fees

Franchise fees are levied annually on utility companies by the City in return for granting a privilege sanctioning a monopoly or permitting the use of public property. Such fees are currently levied against Florida Power and Light Co. Additionally, the City has granted non-exclusive commercial solid waste franchises and levies certain fees thereunder against commercial solid waste service providers.

There is no guarantee that the services described above will continue to be provided by such franchisees in the future rather than by governmental entities, including the City, in which case no franchise fees would be received. Additionally, continued receipt of the franchise fees is dependent upon the continued financial viability of such franchise and the continued need by the City’s citizens for the services provided.

Public Service Tax

The Public Service Tax is imposed, levied and collected by the City pursuant to Section 166.231, Florida Statutes, and other applicable provisions of law, on the purchase of electricity, fuel oil, metered or bottled gas (natural liquefied petroleum gas or manufactured), water service, and other services on which a tax may be imposed by law.

Florida law authorizes any municipality in the State of Florida (the “State” ) to levy a Public Service Tax on the purchase within such municipality of electricity, metered natural gas, liquefied petroleum gas either metered or bottled, manufactured gas either metered or bottled, water service and fuel oil as well as any services competitive with those specifically enumerated. This tax may not exceed 10% of the payments received by the sellers of such services from purchasers (except in the case of fuel oil, for which the maximum tax is four cents per gallon). The purchase of natural gas or fuel oil by a public or private utility either for resale or for use as fuel in the generation of electricity, or the purchase of fuel oil or kerosene for use as an aircraft engine fuel or propellant or for use in internal combustion engines, is exempt from the levy of such tax.

Pursuant to the Constitution of the State, Florida Statutes and a resolution of the City, the City levies a Public Service Tax, within the incorporated area of the City at the rate of 10% on sales of all services for which it is allowed to tax, and with the restriction that the tax on fuel oil cannot exceed four cents per gallon.

Pursuant to the Section 166.231, Florida Statutes, a municipality is permitted to grant to any qualified business located within an enterprise zone an exemption equal to fifty percent (50%) of the Public Service Tax imposed, or one hundred percent (100%) in the case of the purchase of electricity, if no less than twenty percent (20%) of the employees of such business are residents of an enterprise zone, excluding temporary

16

and part-time employees. The ability to authorize this exemption expires on December 31, 2015 pursuant to Chapter 290, Florida Statutes. A municipality is also permitted to exempt from the Public Service Tax up to and including the first 500 kilowatt hours of electricity purchased per month for residential use and to exempt all or a portion of the purchase of electricity, metered natural gas, liquefied petroleum gas either metered or bottled, or manufactured gas either metered or bottled, or reduce the rate of taxation thereon, when purchased by an industrial consumer which uses the electricity or gas directly in industrial manufacturing, processing, compounding or a production process of items of personal property for sale. The City has not provided any of the foregoing exemptions.

Additionally, a municipality may provide an exemption to the public service tax for any public body

as defined in Section 1.01, Florida Statutes, and any non-profit corporation or cooperative association organized under Chapter 617, Florida Statutes, which provides water utility services to no more than 13,500 equivalent residential units, ownership of which will revert to a political subdivision upon retirement of all outstanding indebtedness. In addition to the other exemptions and exclusions described herein, a municipality may exempt from the Public Service Tax the purchase of metered or bottled gas (natural liquefied petroleum gas or manufactured) or fuel oil for agricultural purposes. “Agricultural purposes” means bona fide fanning, pasture, grove or forestry operations including horticulture, floricultural, viticulture, dairy, livestock, poultry, bee and aquaculture. The City does exempt purchases by the United States Federal Government, the State, the county, the school district, and any public bodies exempted by law or court order.

The Public Service Tax must be collected by the seller from purchasers at the time of sale and remitted

to the City. Such tax will appear on a periodic bill rendered to consumers for electricity, metered and bottled gas, water service and fuel oil. A failure by a consumer to pay that portion of the bill attributable to the Public Service Tax may result in a suspension of the service involved in the same fashion as the failure to pay that portion of the bill attributable to the particular utility service.

The amount of Public Service Tax received by the City is subject to increase or decrease due to legislative changes. The amount of the Public Service Tax collected within the City may be adversely affected by changes in population within the City. Such changes in population could decrease the number of purchasers of electricity, water, metered natural gas, bottled natural gas and fuel oil within the City.

Local Communications Services Tax

The Communications Services Tax Simplification Act, enacted by Chapter 2000-260, Laws of Florida, as amended by Chapter 2001-140, Laws of Florida, and now codified in part as Chapter 202, Florida Statutes (the “Communications Services Tax Act”) established, effective October 1, 2001, a communications services tax on the sale of communications services as defined in Section 202.11, Florida Statutes, and as of the same date repealed Section 166.231(9), Florida Statutes, which previously granted municipalities the authority to levy a utility services tax on the purchase of telecommunication services. Florida Statutes, Section 202.19, as amended, provides that counties and municipalities may levy, by ordinance, a discretionary communications services tax (the “Local Communications Services Tax”) on communications services, the revenues from which may be pledged for the repayment of current or future bonded indebtedness. The City set the rates for its Local Communications Services Tax pursuant to Ordinance No. 12078 enacted on June 14, 2001.

Communication services are defined as the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals, including cable services, to a point, or between or among points, by or through any electronic, radio, satellite, cable, optical, microwave, or other medium or method now in existence or hereafter devised, regardless of the protocol used for such transmission or conveyance. The term does not include:

17

(a) Information services;

(b) Installation or maintenance of wiring or equipment on a customer’s premises;

(c) The sale or rental of tangible personal property;

(d) The sale of advertising, including, but not limited to, directory advertising;

(e) Bad check charges;

(f) Late payment charges;

(g) Billing and collection services; or

(h) Internet access service, electronic mail service, electronic bulletin board service, or similar on-line services.

Any sale of communications services charged to a service address in the City is subject to the City’s local communications services tax at a rate of 5.62%. The Communications Services Tax Act further provides that, to the extent that a provider of communications services is required to pay to a local taxing jurisdiction a tax, charge, or other fee under any franchise agreement or ordinance with respect to the services or revenues that are also subject to the tax, such provider is entitled to a credit against the amount of such tax payable to the State in the amount of such tax, charge, or fee with respect to such service or revenues. The amount of such credit shall be deducted from the amount that the local taxing jurisdiction is entitled to receive.

The Local Communications Services Tax must be collected by the provider from purchasers and remitted to the Florida Department of Revenue (“FDOR”). The proceeds of said Local Communications Services Tax less the FDOR’s cost of administration is deposited in the Local Communications Services Tax clearing trust fund and distributed monthly to the appropriate jurisdictions and may be pledged for the repayment of current or future bonded indebtedness.

The sale of communications services to (i) the federal government, or any instrumentality or agency thereof, or any entity that is exempt from state taxes under federal law, (ii) the state or any county, municipality or political subdivision of the state when payment is made directly to the dealer by, the governmental entity, and (iii) any home for the aged, educational institution (which includes state tax-supported and nonprofit private schools, colleges and universities and nonprofit libraries, art galleries and museums, among others) or religious institutions (which includes, but is not limited to, organizations having an established physical place for worship at which nonprofit religious services and activities are regularly conducted) that is exempt from federal income tax under Section 501(c)(3) of the Code are exempt from the Local Communications Services Tax.

Under the Communication Service Tax Act, local governments must work with the FDOR to properly identify service addresses to each municipality and county. If a jurisdiction fails to provide the FDOR with accurate service address information, the local government risks losing tax proceeds that it should properly receive. The City believes it has provided the FDOR with all information that the FDOR has requested as of the date hereof and that such information is accurate.

The federal Internet Tax Freedom Act (“ITFA”) imposes a moratorium on taxation of Internet access by states and political subdivisions. As amended by the Internet Tax Nondiscrimination Act (“ITNA”), the ITFA may have a material adverse effect upon future collections of the Local Communications Services Tax Revenues. Signed into law on December 3, 2004, the ITNA extended the ITFA until November 1, 2007. Federal legislation was enacted on October 31, 2007, to extend the moratorium, which was set to expire on November 1, 2007, on certain state and local government taxation on Internet access, to November 1, 2014.

18

This legislation prohibits a state from reimposing a tax on Internet access which the state repealed more than twenty-four (24) months prior to this legislation’s enactment. Additionally, a specific exemption was created for certain state business taxes enacted between June 20, 2005 and before November 1, 2007 which do not discriminate against providers of communication services, Internet access or telecommunications. Effective November 1, 2003, “Internet access” was amended to include telecommunications services purchased, used or sold by a provider of Internet access to provide Internet access. “Internet access” now also includes related communication services, such as email and instant messaging. The definition of “Internet access” was revised, in part, to eliminate existing language which could be read to allow providers of communication services to exclude from taxation charges for Internet access services which are bundled for a single price with taxable communication services. “Telecommunications,” as amended, includes un-regulated non-utility telecommunications, such as cable services. Application of the amended definition of “Internet access” was delayed until June 30, 2008 for state or local tax on Internet access that was: (1) generally imposed and actually enforced on telecommunication services, or (2) the subject of litigation instituted in a state court prior to July 1, 2007. Prior to December 3, 2004, under the Communication Services Tax Act, according to FDOR, when charges for Internet access services are not separately stated on a customer’s bill, the entire charge is taxed, regardless of whether the charge includes Internet access or telecommunications services used to provide Internet access. The negative impact on future collections of Local Communications Services Tax because of the ITNA cannot be determined at this time.

The amount of Local Communications Services Tax revenues received by the City is subject to increase or decrease due to (i) increases or decreases in the dollar volume of taxable sales within the City, (ii) legislative changes, and/or (iii) technological advances which could affect consumer preferences, such as Voice over Internet Protocol (“VoIP”). VoIP is a less expensive technology that allows telephone calls to be made in digital form using a broadband Internet connection, rather than an analog phone line, and has the potential to supplant traditional telephone service. It is possible that VoIP could either reduce the dollar volume of taxable sales within the City or will be a non-taxable service altogether.

Licenses and Permits

These are revenues derived from the issuance of local licenses and permits, including professional and occupational licenses required for the privilege of engaging in certain trades, occupations and other activities.

Intergovernmental

This category includes federal, State and other local units grants, and revenues shared by the State and other local units. The largest component is the half-cent sales tax.

Half Cent Sales Tax. The State levies and collects a sales tax on, among other things, the sales price of each item or article of tangible personal property sold at retail in the State, subject to certain exceptions and dealer allowances. In 1982, the Florida legislature created the Local Government Half-Cent Sales Tax Program (the “Local Government Half-Cent Sales Tax Program”) which distributes a portion of the sales tax revenue and money from the State’s General Revenue Fund to counties and municipalities that meet strict eligibility requirements. In 1982, when the Local Government Half-Cent Sales Tax Program was created, the general rate of sales tax in the State was increased from 4% to 5%, and one-half of the fifth cent was devoted to the Local Government Half-Cent Sales Tax Program, thus giving rise to the name “Half-Cent Sales Tax.” Although the amount of sales tax revenue deposited into the Local Government Half-Cent Sales Tax Program is no longer one-half of the fifth cent of every dollar of the sales price of an item subject to sales tax, the name “Half-Cent Sales Tax” has continued to be utilized.

19

Section 212.20, Florida Statutes, provides for the distribution of sales tax revenues collected by the State and further provides for the distribution of a portion of sales tax revenues to the Local Government Half-Cent Sales Tax Clearing Trust Fund (the “Trust Fund”), after providing for transfers to the General Fund and the Ecosystem Management and Restoration Trust Fund. The entire sales tax remitted to the State by each sales tax dealer located within a particular county (the “Local Government Half-Cent Sales Tax Revenues”) is deposited in the Trust Fund and earmarked for distribution to the governing body of such county and each participating municipality within that county pursuant to a distribution formula.

The percentage of Local Government Half-Cent Sales Tax Revenues deposited in the Trust Fund is 8.814%. The general rate of sales tax in the State is currently 6.00%. After taking into account the distributions to the General Fund (historically 5% of taxes collected) and the Ecosystem Management and Restoration Trust Fund (.2% of the taxes collected), for every dollar of taxable sales price of an item, approximately 0.501 cents is deposited into the Trust Fund.

As of October 1, 2001, the Trust Fund began receiving a portion of certain taxes imposed by the State on the sales of communication services (the “CST Revenues”) pursuant to Chapter 202, Florida Statutes. Accordingly, moneys distributed from the Trust Fund now consist of funds derived from both general sales tax proceeds and CST Revenues required to be deposited into the Trust Fund.

The Half-Cent Sales Tax collected within a county and distributed to local government units is distributed among the county and the municipalities therein in accordance with the following formula:

County Share (percentage of total Half-Cent = unincorporated + 2/3 incorporated Sales Tax receipts) area population area population

_____________________________________ total county + 2/3 incorporated population area population

Municipality Share

(percentage of total Half-Cent = municipality population Sales Tax receipts) _____________________________________

total county + 2/3 incorporated population area population

For purposes of the foregoing formula, “population” is based upon the latest official State estimate of

population certified prior to the beginning of the local government fiscal year. Should any unincorporated area of Miami-Dade County become incorporated as a municipality, the share of the Half-Cent Sales Tax received by Miami-Dade County and the City would be reduced.

The Half-Cent Sales Tax is distributed from the Trust Fund on a monthly basis to participating units of local government in accordance with Part VI, Chapter 218, Florida Statutes (the “Sales Tax Act”). The Sales Tax Act permits the City to pledge its share of the Half-Cent Sales Tax for the payment of principal of and interest on any capital project.

To be eligible to participate in the Half-Cent Sales Tax Program, each municipality and county is required to have:

(i) reported its finances for its most recently completed fiscal year to the State Department of Financial Services as required by Florida law;

(ii) made provisions for annual post audits of financial accounts in accordance with provisions of law;

20

(iii) levied, as shown on its most recent financial report, ad valorem taxes, exclusive of taxes levied for debt service or other special millages authorized by the voters, to produce the revenue equivalent to a millage rate of three (3) mills on the dollar based upon 1973 taxable values or, in order to produce revenue equivalent to that which would otherwise be produced by such three (3) mill ad valorem tax, to have received a remittance from the county pursuant to a municipal services benefit emit, collected, an occupational license tax, utility tax, or ad valorem tax, or have received revenue from any combination of those four sources;

(iv) certified that persons in its employ as law enforcement officers meet certain qualifications for employment, and receive certain compensation;

(v) certified that persons in its employ as firefighters meet certain employment qualifications and are eligible for certain compensation;

(vi) certified that each dependent special district that is budgeted separately from the general budget of such county or municipality has met the provisions for annual post audit of its financial accounts in accordance with law; and

(vii) certified to the Florida Department of Revenue (“FDOR”) that it has complied with certain procedures regarding the establishment of the ad valorem tax millage of the county or municipality as required by law.

Although the Sales Tax Act does not impose any limitation on the number of years during which the

City can receive distributions of the Half-Cent Sales Tax from the Trust Fund, there may be future amendments to the Sales Tax Act in subsequent years imposing additional requirements of eligibility for counties and municipalities participating in the Half-Cent Sales Tax, or the distribution formulas in Sections 212.20(6)(d) or 218.62, Florida Statutes, may be revised. To be eligible to participate in the Trust Fund in future years, the City must comply with the financial reporting and other requirements of the Sales Tax Act. Otherwise, the City would lose its Trust Fund distributions for twelve (12) months following a “determination of noncompliance” by FDOR. The City has always maintained eligibility to receive the Half-Cent Sales Tax.

State Revenue Sharing. A portion of the taxes levied and collected by the State is shared with local governments under the provisions of Chapter 218, Part II, Florida Statutes. The amount deposited by FDOR into the State Revenue Sharing Trust Fund for Municipalities is 1.3409% of available sales and use tax collections after certain required distributions, 12.5% of the Florida alternative fuel user decal fee collections, and the net collections from the one-cent municipal fuel tax.

To be eligible for State Revenue Sharing funds, a local government must be audited, with certain exceptions; must have filed its annual financial report with the Florida Department of Financial Services; must certify certain requirements pertaining to the employment and compensation of law enforcement officers and the employment of firefighters; must levy an ad valorem tax of at least three (3) mills or collected equivalent alternative revenues from a combination of the following sources available to municipalities: a remittance from the county pursuant to Section 125.01(6)(a), Florida Statutes, occupational license taxes, utility taxes, and ad valorem taxes. Eligibility is retained if the local government has met eligibility requirements for the previous three years, even if the local government reduces its millage or utility taxes because of the receipt of the Half-Cent Sales Tax.

The amount of the State Revenue Sharing Trust Fund for Municipalities distributed to any one municipality is the average of three factors: an adjusted population factor; a sales tax collection factor, which is the proportion of the local municipality’s ordinary sales tax collected within the municipality to the total sales tax collected within all eligible municipalities in the State; and a relative revenue-raising ability factor, which measures the municipality’s ability to raise revenue relative to other qualifying municipalities in the State.

21

Each municipality is entitled to receive a minimum amount of State Revenue Sharing funds known as the “guaranteed entitlement” as defined in Section 218.21(6), Florida Statutes.

To be eligible to participate in State Revenue Sharing in future years, the City must comply with certain eligibility and reporting requirements, otherwise, the City will not be entitled to distributions for a period of time.

Fines and Forfeitures. These are revenues derived from fines and forfeitures imposed by local courts.

Charges for Services

Charges for various services provided by the City to residents, property owners, and grants received from other governments, including the following:

(a) General Government: all money resulting from charges for current services; i.e., photographs, reports and ordinances;

(b) Public Safety: fees for police services, fire protection services and emergency services;

(c) Physical Environment: charges include cemetery fees;

(d) Building and Zoning Inspections: fees for inspections such as plumbing, electrical, elevator and mechanical inspections;

(e) Marina Fees: all fees associated with operations of the various City marinas;

(f) Recreational and Special Events: fees for parks and recreation activities and events; and

(g) Other: fees for services not specifically mentioned above, i.e., engineering services, public hearing fees.

Other Revenue and Financing Sources

This category includes a variety of revenues and transfers from other funds, including the interest earnings on invested funds.


22

The following table represents the City’s audited determination of legally available Non-Ad Valorem Revenues for the Fiscal Years Ended September 30, 2006 through September 30, 2010.

THE CITY OF MIAMI, FLORIDA LEGALLY AVAILABLE NON-AD VALOREM REVENUES

YEAR ENDED SEPTEMBER 30th

2006 2007 2008 2009 2010 Revenues:

Franchise and Utility Taxes $ 41,342,214 $ 42,257,282 $ 35,319,051 $ 36,228,332 36,448,254 Licenses and Permits:

Business Licenses and Permits 7,078,534 7,064,358 7,769,633 7,508,453 7,680,315 Construction Permits 21,390,059 25,766,010 22,019,185 18,524,028 17,469,460

Total Licenses and Permits $ 28,468,593 $ 32,830,368 $ 29,788,818 $ 26,032,481 $ 25,149,775

Intergovernmental: State and Revenue Sharing $ 13,044,234 $ 13,073,886 $ 12,187,197 $ 10,791,455 $ 10,516,183 Half-Cent Sales Tax 25,800,341 25,505,412 24,719,050 22,566,791 22,665,743 Fine and Forfeitures 5,175,457 5,283,695 6,031,799 6,396,471 4,298,283 Other 3,341,711 15,517,110 14,414,695 13,875,682 18,122,138

Total Intergovernmental $ 47,361,743 $ 59,380,103 $ 57,352,741 $ 53,630,399 $ 55,602,347

Charges for Services: Engineering Services $ 44,917,693 $ 46,587,956 $ 47,079,358 $ 47,715,500 $ 51,784,383 Public Safety 11,025,330 22,952,364 22,596,110 25,009,184 21,763,551 Recreation 662,557 3,488,492 3,144,370 2,541,056 3,085,270 Other 35,375,016 4,145,343 2,178,334 1,242,353 1,496,625

Total Charges for Services $ 91,980,596 $ 77,174,155 $ 74,998,172 $ 76,508,093 $ 78,129,829

Interest Income 11,144,320 16,248,307 10,086,415 4,064,924 2,733,028 Other 16,643,409 4,950,826 6,594,312 8,196,844 6,332,053

Component Units Operating: Transfers In(1) 52,097,226 61,411,040 76,817,851 47,785,001 53,493,902

Total Sources of Legally Available Non-Ad Valorem Revenues $289,038,101 $ 294,252,081 $ 290,957,360 $252,446,074 $257,889,188

Essential Expenses Not Paid with Ad Valorem Taxes(2) (12,418,104) (52,246,548) (49,012,560) (39,317,193)

(37,980,623)

Net Non-Ad Valorem Revenues Available for Debt Service after Payment of Essential Governmental Services $ 276,619,997 $ 242,005,533 $ 241,944,800 $ 213,128,881

$219,908,565 Source: City of Miami Finance Department (1) Amounts comprised primarily of Public Service Taxes, Local Option Gas Taxes and amounts from Public Works special revenue

funds. Both Public Service Taxes and Local Option Gas Taxes are recurring each year although the amounts may differ from year to year. Transfers In are net of debt service, on other bond obligations.

(2) Total ad valorem taxes minus General Fund government and public safety expenses. This amount does not include a pro rata share of the pension costs associated with the General Fund and Public Safety expenses.

23

The following table represents current debt service, including the Series 2011A Bonds, on obligations payable from legally available Non-Ad Valorem Revenues as of the date of issuance of the Series 2011A Bonds and the payment of the Refunded Loans. For a detailed listing of the City’s outstanding debt see “LIABILITIES OF THE CITY – Direct Debt” herein.

THE CITY OF MIAMI, FLORIDA SCHEDULE OF PRINCIPAL AND INTEREST FOR NON-AD VALOREM REVENUE BONDS

Fiscal Year Principal Interest(2) Total

2011(1) $3,846,000.00

$1,622,245.00 $5,468,245.00 2012(3) 13,110,815.30 21,141,570.14 34,252,385.44 2013(3) 53,666,229.50 21,837,996.92 75,504,226.42 2014 10,201,160.00 19,467,209.87 29,668,369.87 2015 6,519,406.90 18,756,983.22 25,276,390.12 2016 6,540,000.00 13,895,015.12 20,435,015.12 2017 16,245,000.00 13,239,335.38 29,484,335.38 2018 16,730,000.00 12,265,322.88 28,995,322.88 2019 15,520,000.00 11,283,476.62 26,803,476.62 2020 15,105,000.00 10,319,881.62 25,424,881.62 2021 11,050,000.00 9,546,698.50 20,596,698.50 2022 7,575,000.00 9,003,674.45 16,578,674.45 2023 7,985,000.00 8,569,025.80 16,554,025.80 2024 8,430,000.00 8,104,361.80 16,534,361.80 2025 8,920,000.00 7,593,544.76 16,513,544.76 2026 12,015,000.00 6,919,125.36 18,934,125.36 2027 9,140,000.00 6,238,438.05 15,378,438.05 2028 9,715,000.00 5,663,512.50 15,378,512.50 2029 10,265,000.00 5,110,462.50 15,375,462.50 2030 10,850,000.00 4,525,812.50 15,375,812.50 2031 13,465,000.00 3,907,462.50 17,372,462.50 2032 7,350,000.00 3,353,437.50 10,703,437.50 2033 7,735,000.00 2,967,562.50 10,702,562.50 2034 8,140,000.00 2,561,475.00 10,701,475.00 2035 8,565,000.00 2,134,125.00 10,699,125.00 2036 9,015,000.00 1,684,462.50 10,699,462.50 2037 9,830,000.00 1,211,175.00 11,041,175.00 2038 10,350,000.00 695,100.00 11,045,100.00 2039 2,890,000.00 151,725.00 3,041,725.00

Total $ 330,768,611.70 $233,770,217.99 $ 564,538,829.69 Source: City of Miami Finance Department Notes: (1) Represents a partial year beginning July 21, 2011.

(2) Net of Capitalized interest on Series 2010A Bonds and the Series 2010B Bonds. (3) The City’s outstanding $50 million Note interest is assumed at 4.24%. The City expects to refinance the Note in

connection with the Series 2011B Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011A BONDS- Additional Debt Payable from Non-Ad Valorem Revenues” herein.

24

As described herein, the obligation and the ability of the City to budget and appropriate Non-Ad Valorem Revenues is subject to a variety of factors, including the obligation of the City to provide essential governmental services and the obligation of the City to have a balanced budget. Essential governmental services provided by the City are generally considered to include police and fire services and governmental services which the City is obligated to provide for the health, welfare and safety of the people. However, the scope of essential governmental services is not precisely defined by State law. To the extent other City functions and programs are considered essential governmental services, a corresponding portion of the City’s budget may be funded from Non-Ad Valorem Revenues prior to such Non-Ad Valorem Revenues being available for the City to budget and appropriate for the purpose of making payments on the Series 2011A Bonds. In the calculation of the Non-Ad Valorem Revenues available to make payments on the Series 2011A Bonds set forth herein, the City has treated the costs of police and fire services and general governmental services as the costs of essential governmental services (other than pension costs, which are a separate line item). While these are the largest budget categories constituting essential governmental services, other specific functions and programs may constitute essential governmental services.


COVERAGE OF NET NON-AD VALOREM REVENUES YEAR ENDED SEPTEMBER 30TH

2006 2007 2008 2009 2010

Net Non-Ad Valorem Funds Available to Pay Debt Service(1) $ 276,619,997 $ 242,005,533 $ 241,944,800 $ 213,128,881 $ 219,908,565Debt Service(2)(3) $ 21,583,712 $ 15,534,423 $ 37,323,086 $ 37,698,012 $ 39,992,035Coverage 12.82x 15.58x 6.48x 5.65x 5.50x

(1) Total sources of Non Ad Valorem Revenues minus essential expenses (does not include a pro rata share of the pension costs associated with the General Fund and Public Safety expenses).

(2) Debt service is based on the maximum estimated annual loan payments on the Sunshine Loans during the remaining Fiscal Years until the date of maturity of such loans and maximum annual debt service on bonds or other debt obligations payable from Non-Ad Valorem Revenues outstanding as of September 30, 2010. Although the maximum annual debt is $75,504,226 based on the “Scheduled of Principal and Interest for Non-Ad Valorem Revenue Bonds” certain debt which is included in such table was not outstanding as of September 30, 2010.

(3) Variable Interest Rate Debt on the Sunshine Loans is calculated at 12% which is the maximum rate pursuant to the covenants of loan agreements securing the debt of Sunshine State Governmental Financing Commission. The Sunshine Loans include the Refunded Loans.

Special Investment Considerations

As described above, the City’s covenant to budget and appropriate Non-Ad Valorem Revenues does not constitute a lien, either legal or equitable, on any of the City’s revenues. The amount of such revenues available to make payments on the Series 2011A Bonds may be effectively limited by (i) the requirement for a balanced budget, (ii) funding requirements for essential governmental services of the City, (iii) a decrease in one or more of the sources of Non-Ad Valorem Revenues, for example, a fluctuation in the Half-Cent Sales Tax collections due to changes in economic activity and a decrease in the dollar volume of purchases in Miami-Dade County, (iv) legislative action and (v) the inability of the City to expend revenues not appropriated or in excess of funds actually available after the use of such funds to satisfy obligations having an express lien or pledge on such funds. Furthermore, except as provided in the Resolution (and described herein under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011A BONDS – Additional Debt Payable From Non-Ad Valorem Revenues”), the City is not restricted in its ability (i) to pledge such revenues for other purposes or to issue additional debt specifically secured by such revenues or by a covenant similar to that securing the Series 2011A Bonds or (ii) to reduce or discontinue services that generate Non-Ad Valorem Revenues.

25

All of these factors may limit the availability of Non-Ad Valorem Revenues to pay a portion of the debt service on the Series 2011A Bonds. In addition, there can be no certainty as to the outcome of any judicial proceedings to enforce the City’s obligation to appropriate such funds.

Additional Debt Payable from Non-Ad Valorem Revenues

Pursuant to the Resolution, the City may incur additional debt (other than the Series 2011B Bonds, as defined below) that is payable from all or a portion of the legally available Non-Ad Valorem Revenues only if the total amount of Non-Ad Valorem Revenues for the prior Fiscal Year were (a) at least 2.00 times the aggregate Maximum Annual Debt Service of all debt (including all long-term financial obligations appearing on the City’s most recent audited financial statements and the debt proposed to be incurred) to be paid from Non-Ad Valorem Revenues and not other funds of the City (collectively, “Debt”), including any Debt payable from one or several specific Non-ad Valorem Revenue sources but only to the extent such Non-Ad Valorem Revenues are legally available to pay debt service on the Series 2011A Bonds, and (b) so long as the Series 2011A Bonds are outstanding and if a Reserve Account Insurance Policy is in effect, at least 1.00 times the obligation of the City to repay any costs then due and owing to the Provider of a Reserve Account Insurance Policy.

Pursuant to the Resolution, the City has authorized its Special Obligation Non-Ad Valorem Revenue Refunding Bonds, Series 2011B (the “Series 2011B Bonds”) in an amount not to exceed $60 million. Such Series 2011B Bonds will be issued to refinance the City’s $50 million outstanding aggregate principal amount of Revenue Note, Series 2010 (Port Miami Tunnel and Access Improvement Project) (the “Note”).

Pledge of Non-Ad Valorem Revenues

No specific source of Non-Ad Valorem Revenues (which includes, without limitation, Public Service Tax revenues, franchise revenues, occupational license tax revenues, the guaranteed entitlement portion of the State Revenue Sharing funds and fines and forfeitures) are pledged to the payment of the Series 2011A Bonds. Certain sources of Non-Ad Valorem Revenues are pledged for the payment of other indebtedness of the City. See “LIABILITIES OF THE CITY-Direct Debt” herein. Future issues of other indebtedness of the City may be secured by a pledge of Non-Ad Valorem Revenues as described above. See “FUTURE DEBT” herein.


26

MANAGEMENT DISCUSSION OF BUDGET AND FINANCES

The following discusses the City’s financial position for Fiscal Years 2010 through 2012.

Fiscal Year 2010 Results

The City’s Fiscal Year ended September 30, 2010 had an operating deficit of $26.5 million greater than the original budget. This budget deficit was categorically composed of operating expense deficiencies and revenue shortfalls and is discussed accordingly below by component. See “Actual vs. Budgeted Revenues, Expenditures and Changes in Fund Balance for the General Fund through September 30, 2010” below.

The operating expense component of approximately $20.9 million was associated with general operations of the City. The operating loss comprised a number of favorable and unfavorable variances in multiple departments.

Revenues were greatly impacted by the economic downturn affecting the local real estate market and the national banking industry. Specifically, Property Taxes were $10.3 million or 3.9% less than anticipated in the original adopted budget. This was due to the millage budget requirement of the State that requires the adoption of the tax budget at 95% of the taxable certified value instead of the City’s actual collection rate which is approximately 90%. Franchise and Other Taxes were $2.6 million or 6.7% less than anticipated in the original adopted budget due to an anticipated increase in FPL (electricity) rates that was not approved by the Public Service Commission. Additionally, FPL offered a fuel rebate in March 2010 which resulted in $900,000 less revenue to the City. Collections for Licenses and Permits were $4.0 million or 13.8% less than anticipated in the original adopted budget. Charges for Services were $2.1 million or 2.5% less than the original expectation. These unfavorable variances were offset, in part, by better than expected collections from Other Revenues of $4.2 million. The overall net deficit result in revenues collected (including Transfers In) as compared to the original adopted budget for these categories was approximately $8.2 million or 1.6% less than expected.

The increase in expenditures was driven by amounts that were originally budgeted as credit balances to account for attrition and other savings related to vacancies that were not realized. These amounts are carried in the non-departmental accounts which are included in the General Government function. Additionally, the Parks and Recreation Department exceeded their budgeted expenditures by $2.1 million due primarily to expenses associated with the delivery of summer day camp programs. While the original adopted budget did provide for some of the operating cost associated with the summer programs, under-estimating the volume of the operating programs led to the budget overage. The City’s Budget Department is working closer with the Parks and Recreation Department to better determine its operating needs, specifically costs associated with staffing the summer programs.

The remaining $4.5 million increase in Transfers out was needed to allow for contributions to the special revenue funds to provide funding to projects that had deficit balances.


27

The table below compares actual audited revenues and expenditures to budgeted amounts for the fiscal year ended September 30, 2010:

Actual vs. Budgeted Revenues, Expenditures and Net Changes in Fund Balance for the General Fund through September 30, 2010

Budgeted Amounts % of Actual to Original Amended Actual Original Budget

Revenues Property Taxes $257,946,343 $ 247,646,519 $ 247,646,519 96.01% Franchise Fees/Other Taxes 39,086,516 36,448,254 36,448,254 93.25 Licenses and Permits 29,172,916 25,149,775 25,149,775 86.21 Fines and Forfeitures 6,142,461 4,298,283 4,298,283 69.98 Intergovernmental Revenues 41,323,714 51,304,064 51,304,064 124.15(2) Charges for Services 80,146,969 78,129,829 78,129,829 97.48 Interest 3,200,000 2,733,028 2,733,028 85.41 Other 2,140,226 12,975,512 6,332,053 295.86 Total Revenues 459,159,145 458,685,264 452,041,805 Expenditures General Government 41,942,234 55,829,595 54,913,599 130.93%(1) Planning & Development 8,985,280 8,974,853 8,974,853 99.88 Public Works 52,278,913 51,523,967 51,276,106 98.08 Public Safety 227,056,450 230,823,243 230,713,543 101.61(2)

Pensions 90,539,756 89,975,265 89,975,265 99.38

Public Facilities 5,298,141 4,389,912 4,389,912 82.86 Parks and Recreation 21,603,437 23,755,931 23,755,930 109.96(3) Risk Management 24,876,280 28,998,188 22,354,729 89.86 Organizational Support 32,218,742 32,218,742 32,218,742 100.00(4)

Total Expenditures 504,799,233 526,489,696 518,572,679 Excess (Deficiency) of Revenues Over Expenditures

(45,640,088) (67,804,432) (66,530,874)

Transfers In 54,619,085 53,493,902 53,493,902 97.94% Transfers Out (8,978,997) (13,135,534) (13,493,245) 150.28 Total Other Financing Sources (Uses) 45,640,088 40,358,368 40,000,657 Net Change in Fund Balance - $(27,446,064) $(26,530,217) Fund Balance Beginning FY - 39,972,587 Fund Balance Ending FY - $13,442,370

__________________________ (1) The difference represents amounts that were budgeted originally as credit balances to account for attrition and other savings in the

non-departmental line item which is included in the function General Government, that were not realized. (2) The additional $10 million was allocated to allow for $9.1 million of 175/185 firefighters/police pension trust fund monies as pass-

through expenditures for Public Safety. For accounting purposes this pension supplement from the State is recorded as revenues under Intergovernmental Revenues and as an expense in Public Safety.

(3) The additional $2.1 million was allocated to cover costs associated with delivery of the summer programs. (4) The additional $4.3 million in Other revenues was allocated to account for group insurance revenues from retirees that was not

transferred to the Risk Management function at year end, but rather remained in the Other revenues line item.

28

Fiscal Year 2011 Operations and Projections

The City’s original Fiscal Year 2011 budget was adopted on September 27, 2010. The original Fiscal Year 2011 budget was approximately $499.3 million which reflected an overall decrease of 2.8% ($14.5 million) from the Fiscal Year 2010 budget, including Transfers in as revenue and Transfers out as expenditures.

The City continues to feel the affects of the local real estate market downturn, as well as the general national economic recession. Based upon actual results as of May 31, 2011, the City anticipates a projected Fiscal Year 2011 year end deficit of $4.9 million. The primary cause of the deficit stems from revenue collection shortfalls (including Transfers-In) of $15.1 million, while revised expenditure projections (including Transfers-Out) anticipate savings from its original operating budget of $9.6 million. However, with the management initiatives described below which are being undertaken by management to control the Fiscal Year 2011 budget, the City anticipates that there will be no use of fund balance as of September 30, 2011.

Property tax revenues are expected to be $11.0 million less than originally anticipated; this is due to the budgeting requirement of allocating 95% of the taxable certified value instead of the actual realized collection rate of 90%. Fines and Forfeitures revenues are projected to be $1.0 million less than budgeted due to certain programs in the Police department which have not been initiated (Vehicle Impoundment Program and Commercial Vehicle Violations). Collections for Charges for Services are projected to be $591,000 less than originally budgeted and other revenues are projected to be down $6.5 million from the original budget due to the re-evaluation of Red Light Camera revenues expected for the remainder of Fiscal Year 2011. These projected shortfalls are expected to be partially offset by better than expected collections in Franchise Fees and Other Taxes, Transfers-In from other funds, and Licenses and Permits revenue which collectively are expected to be $3.9 million more than originally anticipated. Additionally, the City budgeted $12 million for uncollectible revenues to cover the expected shortfall which resulted from the State requirement to budget Property Tax revenue at 95% of the taxable certified value.

The City is managing its anticipated shortfalls with several initiatives, specifically instituting a purchasing and hiring freeze for the remainder of Fiscal Year 2011. As a result of the hiring freeze, the City has realized approximately $5 million in attrition and is anticipating realizing another $1.5 million by the end of the Fiscal Year. The City has also budgeted $5 million of contingency reserve that can be used to offset certain one-time expenditures. Additionally, the City originally budgeted $10 million in special pays (one-time pay elements) for which only $5.6 million has been realized as of May 31, 2011.

The projections set forth and discussed above for Fiscal Year 2011 are based upon the City’s current knowledge and expectations, and upon currently-known economic conditions. The City does not, however, guarantee that actual results will be as projected; unforeseen events may occur, economic conditions may change, revenues and expenses may not perform as currently anticipated and actual results may vary considerably from the projections.

As shown particularly by the past few years, economic conditions are extremely difficult to predict and could have a significant impact on the City’s needs, thereby causing deviations from current or additional strategies, policies and plans implemented, which may significantly impact the accuracy of the projections.

On February 10, 2000, the City enacted Ordinance No. 11890 (the “Financial Integrity Ordinance”) establishing thirteen financial integrity principles. One of the principles established certain parameters for the reserve fund for the general operating fund of the City, including having general fund reserves equal to twenty percent (20%) of the prior three years average of general revenues, excluding transfers. The City’s general fund reserves have declined in recent years. See the table entitled “Summary Schedule of Revenues, Expenditures and Net Changes in Fund Balance for the General Fund” herein. If the general fund reserves are not increased by the end of Fiscal Year 2011 and no other measures are taken, the City will not be in compliance with that provision of the Financial Integrity Ordinance; however, there is no consequence for

29

such non-compliance. There can be no assurance that the general fund reserves will be maintained at the level required by the Financial Integrity Ordinance. City management hopes to be able to achieve balanced budgets and restore general fund reserves to required levels over the next three to five years by implementing a number of revenue generating and expenditure reducing strategies. Possible revenue enhancements that could be implemented include both increases in and new assessment of user fees as well as further reductions in labor costs.

The City’s management believes that expense reduction strategies could be achieved through a targeted effort to reduce the City’s labor costs. The City is in the process of attempting to negotiate new or amended agreements with all four of its labor unions. The City’s management expects that the City will also realize a 2% annual reduction in other operating costs associated with attrition.


30

The following table provides the original Fiscal Year ending September 30, 2011 adopted budget, management’s projections for the end of Fiscal Year 2011 budget based upon actual results as of April 30, 2011 and projected operating budget for Fiscal Year ending September 30, 2011:

Budgeted and Projected Revenues, Expenditures and Net Changes in Fund Balance for the General Fund for Fiscal Years ending

Year to Date May 31, 2011 and Projections for September 30, 2011

Budgeted Amounts FY 2011 YTD May 31, 2011

% of Actual to Original

Budget Original Projected* Revenues Property Taxes $ 223,537,412 $ 215,332,969 $ 192,936,226 86.31% Franchise Fees/Other Taxes 36,269,000 36,099,223 18,054,102 49.78 Licenses and Permits 30,794,313 31,809,216 24,750,613 80.37 Fines and Forfeitures 14,133,112 4,660,326 2,345,096 16.59 Intergovernmental Revenues 43,419,282 43,706,150 23,677,401 54.53 Charges for Services 81,549,665 81,728,845 61,006,604 74.81 Interest 1,500,000 1,943,385 1,349,480 89.97 Other 11,050,000 13,178,708 9,636,117 87.20 Total Revenues 442,252,784 428,458,822 333,755,639 Expenditures General Government 41,383,238 39,897,451 26,073,566 63.01 Planning & Development 7,764,751 8,897,307 5,494,761 70.77 Public Works 49,779,747 48,878,881 29,088,383 58.43 Public Safety 196,633,133 196,070,060 130,844,845 66.54 Pensions(1) 72,079,756 72,080,416 68,321,294 94.79 Public Facilities 4,226,509 4,178,567 2,680,866 63.43 Parks and Recreation 22,364,797 22,164,523 14,646,573 65.49 Risk Management & Organizational Support 62,844,050 61,123,148 42,047,196 66.91 Non-Departmental 25,660,695 24,168,344 9,770,292 38.07 Total Expenditures 482,736,676 477,458,697 328,967,776 Excess (Deficiency) of Revenues Over Expenditures

(40,483,892) (48,999,875) 4,787,865

Transfers In 57,076,860 58,276,860 30,817,907 Transfers Out (16,592,968) (14,193,837) (9,462,558) Total Other Financing Sources (Uses) 40,483,892 44,083,023 21,355,349 Net Change in Fund Balance - (4,916,852) $26,143,214 Fund Balance Beginning FY - 13,452,470 Fund Balance (Deficit) Ending FY - $ 8,535,618

__________________________ Source: The City of Miami, Florida *Based on YTD projections through May 31, 2011. Amounts listed are subject to change. (1) Quarterly contributions were made starting October 1, 2011.

31

Fiscal Year 2012 Operations and Projections

While a balanced budget will have to be ultimately considered and approved by the City Commission prior to September 30, 2011, the City is currently looking to resolve a $55 million deficit going into the development of the Fiscal Year 2012 budget. This projected deficit is significantly better than the previously issued forecast for Fiscal Year 2012 of $143.8 million operating deficit. The anticipated deficit has decreased from previous projections last year in large part because of $76.9 million savings realized during the Fiscal Year 2011 resulting from imposed changes to the City’s wages, healthcare, and pension benefit and better than expected taxable values for Fiscal Year 2012 (3.5% decline versus 10% previously anticipated). For a discussion of certain legal challenges to these measures, see “LITIGATION” and “LIABILITIES OF THE CITY-Financial Urgency” herein. The current deficit is based on a number of assumptions that impact both revenue and expense related items, but these assumptions will be modified throughout the budgetary process in order to achieve a balanced budget.

Revenue Assumptions

Taxable values are expected to continue to decline by approximately 3.5%. This could reduce ad valorem revenue by $9.0 million from Fiscal Year 2011 levels, assuming the City maintains the current millage rate of 7.674 mils and achieves a collection rate of 92%. The City expects a further reduction from non ad-valorem revenues of approximately $14.2 million stemming from poor performing revenues from red light camera ticket violations, commercial vehicle violations, the vehicle impoundment programs, cable franchise fees, solid waste clean trash operations and citywide parking operations. These revenue reductions are expected to be partially offset by approximately $2.1 million from projected increases in FPL Franchise Fees and building permit revenues.

Expense Assumptions

The City is taking a conservative approach to budgeting salaries. Expense assumptions that contribute to the expected deficit include budgeting a full years’ salary for all vacant positions and the conservative expectation that the City will not realize any savings from attrition and turnover. Together this adds an additional salary related cost of $10.4 million over Fiscal Year 2011. Further pension contributions and healthcare cost are projected to increase by $7.1 million and $3.0 million, respectively. Other operating costs are expected to increase by $2.1 million primarily associated with expected increases in fuel and utility cost and uniform and medical exam cost for police. The remaining variance is the impact of a one time reimbursement received in Fiscal Year 2011 from the Southeast Overtown Park West District CRA and OMNI CRA. Such funds were loaned from the General Fund to fund operations of the Southeast Overtown Park West District CRA for a period of over 10 years in the amount of $5.4 million and to fund a portion of the cost of the Museum Park project through the OMNI CRA in the amount of $5.0 million.

FUTURE DEBT

The City expects to issue additional debt in the future which may include the Southeast Overtown Park West District CRA Bonds, in an amount not to exceed of $62 million, payable from tax increment revenue of such community redevelopment area, expected to be issued in October 2011.

The City also expects to issue debt for the purpose of refinancing and restructuring its Non-Ad Valorem Revenues debt. The City would refinance the following transactions: (i) Special Revenue Refunding Bonds, Series 2002A, (ii) Special Revenue Refunding Bonds, Series 2002C, (iii) Non-Ad Valorem Refunding Revenue Bonds, Taxable Pension Series 2009, (iv) Non-Ad Valorem Revenue Bonds, Taxable Pension Series 1995, and (v) Special Revenue Refunding Bonds, Series 1987. Such debt is expected to be issued in September 2011 and the City expects to save approximately $11 million each year for a two year period, $7.5 million in

32

the third year and $2.2 million in the fourth year, although debt service will be higher in future years. Such potential savings are subject to market conditions at the time of issue.

Additionally, the City is considering restructuring an existing HUD Section 108 Loan which funded the Jungle Island project (formerly known as Parrot Jungle). Such loan is guaranteed by CDBG funds. In previous years, such loan was paid from the General Fund of the City and included in the City's debt service coverage ratios.

MUNICIPAL BOND INSURANCE

Municipal Bond Insurance Policy

Concurrently with the issuance of the Series 2011A Bonds, Assured Guaranty Municipal Corp. ("AGM" or the "Insurer") will issue its municipal bond insurance policy (the "Bond Insurance Policy") for the Series 2011A Bonds. The Bond Insurance Policy guarantees the scheduled payment of principal and interest on the Series 2011A Bonds when due as set forth in the form of the Policy included as APPENDIX G of this Official Statement.

The Bond Insurance Policy is not covered by any insurance security or guaranty fund established

under New York, California, Connecticut or Florida insurance law.

Assured Guaranty Municipal Corp.

AGM is a New York domiciled financial guaranty insurance company and a wholly owned subsidiary of Assured Guaranty Municipal Holdings Inc. ("Holdings"). Holdings is an indirect subsidiary of Assured Guaranty Ltd. ("AGL"), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol "AGO". AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure and structured finance markets. No shareholder of AGL, Holdings or AGM is liable for the obligations of AGM.

AGM's financial strength is rated "AA+" (stable outlook) by Standard and Poor's Ratings Services, a Standard & Poor's Financial Services LLC business ("S&P") and "Aa3" (negative outlook) by Moody's Investors Service, Inc. ("Moody's"). An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of any security guaranteed by AGM. AGM does not guarantee the market price of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn.

Current Financial Strength Ratings

On June 13, 2011, S&P issued a release stating that it had affirmed the "AA+" financial strength rating

of AGM, with a stable outlook. Reference is made to the release, a copy of which is available at www.standardandpoors.com, for the complete text of S&P’s comments.

On January 24, 2011, S&P published a Request for Comment: Bond Insurance Criteria (the "Bond

Insurance RFC") in which it requested comments on its proposed changes to its bond insurance ratings criteria. In the Bond Insurance RFC, S&P notes that it could lower its financial strength ratings on existing investment-grade bond insurers (including AGM) by one or more rating categories if the proposed bond

33

insurance ratings criteria are adopted, unless those bond insurers (including AGM) raise additional capital or reduce risk. Reference is made to the Bond Insurance RFC, a copy of which is available at www.standardandpoors.com, for the complete text of S&P's comments.

On December 18, 2009, Moody's issued a press release stating that it had affirmed the "Aa3" insurance

financial strength rating of AGM, with a negative outlook. Reference is made to the press release, a copy of which is available at www.moodys.com, for the complete text of Moody's comments.

There can be no assurance as to any further ratings action that Moody's or S&P may take with respect

to AGM. For more information regarding AGM's financial strength ratings and the risks relating thereto, see

AGL's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which was filed by AGL with the Securities and Exchange Commission (the "SEC") on March 1, 2011, and AGL's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011, which was filed by AGL with the SEC on May 10, 2011.

Capitalization of AGM

At March 31, 2011, AGM's consolidated policyholders' surplus and contingency reserves were

approximately $3,058,791,206 and its total net unearned premium reserve was approximately $2,285,987,748, in each case, in accordance with statutory accounting principles. Incorporation of Certain Documents by Reference

Portions of the following document filed by AGL with the SEC that relate to AGM are incorporated

by reference into this Official Statement and shall be deemed to be a part hereof: (i) the Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (which was

filed by AGL with the SEC on March 1, 2011); and (ii) the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011 (which

was filed by AGL with the SEC on May 10, 2011). All information relating to AGM included in, or as exhibits to, documents filed by AGL pursuant to

Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, after the filing of the last document referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC's website at http://www.sec.gov, at AGL's website at http://www.assuredguaranty.com, or will be provided upon request to Assured Guaranty Municipal Corp.: 31 West 52nd Street, New York, New York 10019, Attention: Communications Department (telephone (212) 826-0100).

Any information regarding AGM included herein under the caption "MUNICIPAL BOND

INSURANCE – Assured Guaranty Municipal Corp." or included in a document incorporated by reference herein (collectively, the "AGM Information") shall be modified or superseded to the extent that any subsequently included AGM Information (either directly or through incorporation by reference) modifies or supersedes such previously included AGM Information. Any AGM Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded.

34

AGM makes no representation regarding the Series 2011A Bonds or the advisability of investing in the Series 2011A Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading "MUNICIPAL BOND INSURANCE ".

INSURANCE RISK FACTORS

The following are risk factors relating to the Bond Insurance Policy:

In the event of default of the payment of principal or interest with respect to the Series 2011A Bonds when all or some becomes due, any owner of the Series 2011A Bonds shall have a claim under the Bond Insurance Policy for such payments. However, in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments are to be made in such amounts and at such times as such payments would have been due had there not been any such acceleration. The Bond Insurance Policy does not insure against redemption premium, if any. The payment of principal and interest in connection with mandatory or optional prepayment of the Series 2011A Bonds by the City which is recovered by the City from the bond owner as a voidable preference under applicable bankruptcy law is covered by the Bond Insurance Policy. However, such payments will be made by the Insurer at such time and in such amounts as would have been due absent such prepayment by the City unless the Insurer chooses to pay such amounts at an earlier date.

Under most circumstances, default of payment of principal and interest does not obligate acceleration of the obligations of the Insurer without appropriate consent. The Insurer may direct and must consent to any remedies, and the Insurer’s consent may be required in connection with amendments to any applicable bond documents.

In the event the Insurer is unable to make payment of principal and interest as such payments become due under the Bond Insurance Policy, the Series 2011A Bonds are payable solely from the moneys received pursuant to the Resolution. In the event the Insurer becomes obligated to make payments with respect to the Series 2011A Bonds, no assurance is given that such event will not adversely affect the market price of the Series 2011A Bonds or their marketability (liquidity).

The insured long-term ratings on the Series 2011A Bonds are dependent in part on the financial strength of the Insurer and its claims-paying ability. The Insurer’s financial strength and claims-paying ability are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the Insurer and any Series 2011A Bonds insured by the Insurer will not be subject to downgrade, and such event could adversely affect the market price of the Series 2011A Bonds or their marketability (liquidity). See “RATINGS” herein.

The obligations of the Insurer are contractual obligations and in an event of default by the Insurer, the remedies available may be limited by applicable bankruptcy law or state law related to insolvency of insurance companies.

Neither the City nor the Underwriters have made independent investigations into the claims-paying ability of the Insurer, and no assurance or representation regarding the financial strength or projected financial strength of the Insurer is given. Thus, when making an investment decision, potential investors

35

should carefully consider the ability of the City to pay principal and interest on the Series 2011A Bonds and the claims-paying ability of the Insurer, particularly over the life of the investment.

GENERAL INFORMATION REGARDING THE CITY OF MIAMI

Background

Now 115 years old, the City is part of the nation’s seventh largest metropolitan area. Incorporated in 1896, the City is the only municipality conceived and founded by a woman - Julia Tuttle. According to the U.S. Census Bureau, the City’s population in 1900 was 1,700 people. Today it is a city rich in cultural and ethnic diversity of approximately 424,662 residents, 58.9% of them foreign born. In physical size, the City is not large, encompassing only 34.3 square miles. In population, the City is the largest of the 35 municipalities that make up Miami-Dade County and is the county seat. For additional information concerning the City, see "APPENDIX A - GENERAL INFORMATION REGARDING THE CITY OF MIAMI, FLORIDA AND MIAMI-DADE COUNTY”.

City Government

Since 1997, the City has been governed by a form of government known as the “Mayor-Commissioner plan.” The City Commission is the legislative body of the City. There are five Commissioners elected every four years from designated districts within the City. The Mayor is elected at large every four years. As official head of the City, the Mayor has veto authority over actions of the City Commission, however, the City Commission can override such veto with a 4/5 vote. The Mayor appoints the City Manager who functions as chief administrative officer.

The Mayor of the City is presently Tomas P. Regalado whose term expires November 2013.

The current members of the City Commission and expiration of their current terms of office are:

Commission Members Date Term Expires Wifredo Gort November 2011 Marc D. Sarnoff November 2011 Richard P. Dunn, II November 2013 Francis X. Suarez November 2011 Frank X. Carollo November 2013

The City Manager, Johnny Martinez, is a full-time employee and is the chief administrative officer of

the City. He was appointed as City Manager by the Mayor on June 21, 2011. The City Manager is responsible for directing the administrative and operational aspects of the City in compliance with the policies set by the City Commission and the Mayor. He is responsible for an organization that has more than 3,954 employees and administers a budget of more than $534 million. Prior to his current position, he served as Deputy City Manager. Prior to being promoted to Deputy City Manager, he served as Assistant City Manager and Chief of Infrastructure. Mr. Martinez has a 30 year professional history which includes key private sector engineering positions in various consulting firms including the Florida Department of Transportation (FDOT) where he served from 1985 to 2003. He holds a Bachelor of Science in Civil Engineering from the University of Miami and is a registered State of Florida Professional Engineer (P.E.).

The City’s Chief Financial Officer resigned effective June 9, 2011. The City is conducting a national search for a new Chief Financial Officer.

The City’s Finance Director is Diana M. Gomez. She currently reports directly to the City Manager. She is responsible for managing and investing public funds, accounts payable, general ledger, grants

36

monitoring, payroll, treasury management and preparation of routine accounting reports as well as the City’s annual financial statement. Ms. Gomez was appointed as the Finance Director on February 11, 2006. Ms. Gomez had been Assistant Director of Finance/Comptroller since her employment with the City on August 27, 2001. Prior to joining the City, Ms. Gomez was a Supervising Senior Auditor/C.P.A. for five years with KPMG LLP, one of the “big four” accounting firms. Ms. Gomez received a Bachelor of Arts in Psychology from Rutgers College, NJ, and a Masters in Business Administration in Professional Accounting from the University of Baltimore, MD. She is a Certified Public Accountant in the State of Maryland.

Adoption of Investment Policy and Debt Management Policy

The City adopted a detailed written investment policy on May 10, 2001, that applies to all cash and investments held or controlled by the City and identified as “general operating funds” of the City with the exception of the City’s Pension Funds, Deferred Compensation & Section 401(a) Plans, and such funds related to the issuance of debt where there are other existing policies or indentures in effect for such funds. Additionally, any future revenues, which have statutory investment requirements conflicting with the City’s Investment Policy and funds held by State agencies (e.g. Department of Revenue), are not subject to the provisions of the policy.

The primary objective of the investment program is the safety of the principal of those funds within the portfolios. Investment transactions shall seek to keep capital losses at a minimum, whether they are from securities defaults or erosion of market value. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. The portfolios are required to be managed in such a manner that funds are available to meet reasonably anticipated cash flow requirements in an orderly manner. Return on investment is of least importance compared to the safety and liquidity objectives described in the policy. In accordance with the City’s Administrative Policies, the responsibility for providing oversight and direction in regard to the management of the investment program resides with the City’s Finance Director. The Finance Director has established written procedures for the operation of the investment portfolio and a system of internal accounting and administrative controls. The City's investment policy may be modified from time to time by the City Commission.

Subject to the exceptions in the City’s investment policy, the City may invest in the following types of securities: (a) The Florida Local Government Surplus Funds Trust Fund, (b) United States Government Securities, (c) United States Government Agencies, (d) Federal Instrumentalities, (e) Interest Bearing Time Deposit or Savings Accounts, (f) Repurchase Agreements, (g) Commercial Paper, (h) Corporate Notes, (i) Bankers’ Acceptances, (j) State and/or Local Government Taxable and/or Tax-Exempt Debt, (k) Registered Investment Companies (Money Market Mutual Funds) and (l) Intergovernmental Investment Pool. Also, the City may invest in investment products that include the use of derivatives.

As of September 30, 2010, approximately 74% of the City’s investment portfolio was invested in United States Treasury Obligations and obligations of agencies of the United States Government and approximately 20% of the City’s investment portfolio was invested in commercial paper. All are rated in the highest rating category for each of the rating agencies.

The City adopted a Debt Management Policy on July 21, 1998 to provide guidance governing the issuance, management, continuing evaluation of and reporting on all debt obligations issued by the City and to provide for the preparation and implementation necessary to assure compliance and conformity with the policy. It is the responsibility of the City’s finance committee to review and make recommendations regarding the issuance of debt obligations and the management of outstanding debt. The finance committee has approved the Series 2011A Bonds and their negotiated sale to the Underwriters.

37

The following policies concerning the issuance and management of debt were established in the Debt Management Policy: (a) the City will not issue debt obligations or use debt proceeds to finance current operations; (b) the City will utilize debt obligations only for acquisition, construction or remodeling of capital improvement projects that cannot be funded from current revenue sources or in such cases wherein it is more equitable to the users of the projects to finance the project over its useful life; and (c) the City will measure the impact of debt service requirements of outstanding and proposed debt obligations on single year, five, ten and twenty year periods.

Fiscal and Accounting Procedures

The accounts of the City are organized on the basis of funds or account groups, each of which is considered a separate accounting entity in accordance with generally accepted accounting principles, as defined by the Governmental Accounting Standards Board (“GASB”). The operation of each fund is accounted for in a separate, self-balancing set of accounts which comprise its assets and other debits, liabilities, fund equities and other credits, revenues and expenditures. Individual funds that have similar characteristics are combined into fund types.

For the past two years the City has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada. For a complete description of the fund types and account groups, see “Notes to General Purpose Financial Statements of the City” in APPENDIX D attached hereto.

General Fund

The General Fund is the general operating fund of the City. It accounts for all financial resources except for those required to be accounted for in another fund. The largest source of revenue in this fund is generated from ad valorem taxation. Operations are removed from the General Fund only when they can be operated as true enterprise operations.


38

The following chart shows audited information regarding the General Fund for the Fiscal Years Ended September 30, 2006 through September 30, 2010.

Summary Schedule of Revenues, Expenditures and Net Changes in Fund Balance for the General Fund

2006 2007 2008 2009 2010 Revenues Property Taxes $214,329,257 $258,756,957 $258,294,391 $266,860,263 $247,646,519 Franchise Fees/Other Taxes 41,342,214 42,257,282 35,319,051 36,228,332 36,448,254 Licenses and permits 28,468,593 32,830,368 29,788,818 26,032,481 25,149,775 Fines and forfeitures 5,175,457 5,283,695 6,031,799 6,396,471 4,298,283 Intergovernmental 53,266,529 54,096,408 51,320,942 47,233,928 51,304,064 Charges for services 91,980,596 78,676,199 74,998,172 76,508,093 78,129,829 Interest 11,144,320 16,248,307 10,086,415 4,064,924 2,733,028 Other 5,563,166 3,448,782 6,954,312 8,196,844 6,332,053 Total Revenues $451,270,132 $491,597,998 472,433,900 471,521,336 452,041,805 Expenditures General government 38,809,265 47,015,325 57,525,471 56,699,386 54,913,599 Planning & development 9,440,759 10,814,727 10,788,224 10,843,924 8,974,853 Community development - - - - - Community redevelopment areas - - - - - Public works 50,573,908 56,376,608 54,858,769 54,938,534 51,276,106 Public safety 187,938,096 235,497,950 249,881,480 249,478,070 230,713,543 Public facilities 7,355,457 7,419,797 6,248,557 5,003,138 4,389,912 Parks and recreation 15,111,916 20,201,873 24,276,993 28,300,738 23,755,930 Risk management 25,546,486 18,115,929 28,796,859 13,107,068 22,354,729 Pensions 78,864,757 70,708,285 65,116,477 66,906,558 89,975,265 Organizational Support/Group Benefits

25,161,646 35,122,459 27,751,691 41,314,516 32,218,742

Non-departmental 13,204,324 28,490,230 - - - Debt Service:

Principal - - - - - Interest and Other Charges - - - - -

Capital Outlay - - - - -

Total Expenditures

$452,006,614

$529,763,183

$525,244,521

526,591,932

$518,572,679 Excess (Deficiency) of Revenues Over (Under) Expenditures (736,482) (38,165,185) (52,810,621) (55,070,596) (66,530,874) Other financing sources and (uses):

Operating transfers in 52,097,226 61,411,040 76,817,851 47,785,001 53,493,902 Operating transfers out (42,209,286) (49,052,224) (30,879,926) (46,319,266) (13,493,245)

Refunding Bonds Issued - - - - - Proceeds from sale of property - - - - - Payments to Refunded Bond Escrow Agent

-

-

-

-

-

Bonds Issued - - - - - Loan - - - - - Capital Leases - - - - - Sale of Capital Assets - - - - - Total other financing sources(uses) 9,887,940 12,358,816 45,937,925 1,465,735 40,000,657

Net Change in Fund Balance

$9,151,458

$(25,806,36)

$(6,872,696)

$(53,604,861)

$(26,530,217) Fund Balance-Beginning of Year $117,105,055 $126,256,513 $100,450,144 $93,577,448 $39,972,587 Fund Balance- End of Year $126,256,513 $100,450,144 $93,577,448 $39,972,587 $13,442,370 ________________________________ Source: The City of Miami, Florida.

39

LIABILITIES OF THE CITY

Insurance Considerations Affecting the City

Section 768.28, Florida Statutes, provides for waiver of sovereign immunity in tort actions or claims against the state and its agencies and subdivisions. The present limit of recovery in the absence of special relief granted by the Florida legislature is $100,000 per person per claim or judgment. The limit of recovery for all claims or judgments arising out of the same incident or occurrence is $200,000. Effective October 1, 2011, for all claims arising after such date, the limit of recovery per person per claim is $200,000 and the limit of recovery for all claims or judgments arising out of the same incident or occurrence is $300,000. See “Ability to be Sued, Judgments Enforceable” below. Under the protection of this sovereign immunity limit, Florida Statutes 768.28 and Chapter 440, Florida Statutes covering Workers’ Compensation, the City has established a self-insured program to provide coverage for almost all areas of liability including Workers’ Compensation, General Liability, Automotive Liability, Police Professional Liability, Public Officials’ Liability, and Employment Practices Liability. In addition, the City also purchases excess insurance coverage to limit catastrophic losses associated with its liability exposures. The excess liability insurance program provides for $20 million in combined limits. The excess insurance program currently has a self-insured retention of $750,000 per occurrence for Workers’ Compensation, and $500,000 for all other liability coverages. The City also purchases dedicated commercial general liability policies for the Grapeland Waterpark, Bayfront Park, and the various various marinas that it operates. These policies typically carry a $1 million limit per occurrence and on an aggregate basis, with a $1,000 deductible.

The City’s master property insurance program provides for a total of $100 million in insurance limits for the City’s $444 million property values. With the exception of earthquake, flood and named windstorm, the All-Other-Perils’ deductible is $50,000 per occurrence. In regard to the named windstorm, flood, and earthquake exposures, the deductible is 5% of the location’s values at the time of loss with a minimum of $250,000.

The funds to account for liability losses within the self-insured retention level are derived from the General Fund balance. Claims are being predominantly adjusted by an independent third party administrator. Claims expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated based on an independent actuarial valuation. The budgeting process utilizes information developed in the previous year’s actuarial report in addition to historical information and present/specific knowledge on the status of claims and litigations.

Workers’ Compensation

The City has been working diligently with its third party claims administrator and the City’s Attorney’s Office to effectively mitigate indemnity and medical expenses resulting from Workers’ Compensation related losses. The City has been successful in significantly reducing its Experience Modification Rate (EMR) from 1.74 to 1.49 and finally to 1.33 in 2010. Currently, open Worker’s Compensation claims total about 1,200 claims.

Health Insurance

The City provides group health benefits for its active employees, retirees, and their dependents through a fully self-funded health insurance program. The City is currently contributing approximately 83% while the employees are contributing 17% to the cost of the group health insurance program. To limit catastrophic losses, the City is currently purchasing specific Stop Loss coverage for claims in excess of $200,000.

40

Ability to be Sued, Judgments Enforceable

Notwithstanding the liability limits described below, the laws of the State provide that each city has waived sovereign immunity for liability in tort to the extent provided in Section 768.28, Florida Statutes. Therefore, the City is liable for tort claims in the same manner and, subject to limits stated below, to the same extent as a private individual under like circumstances, except that the City is not liable for punitive damages or interest for the period prior to judgment. Such legislation also limits the liability of a city to pay a judgment in excess of $100,000 to any one person or in excess of $200,000 because of any single incident or occurrence. Effective October 1, 2011, all claims arising after such date will be limited to judgments in excess of $200,000 to any one person or in excess of $300,000 because of any single incident or occurrence. Judgments in excess of $100,000 and $200,000 or after October 1, 2011 $200,000 and $300,000 may be rendered, but may be paid from City funds only pursuant to further action of the Florida Legislature. See “LIABILITIES OF THE CITY-Insurance Considerations Affecting the City” herein. Notwithstanding the foregoing, the City may agree, within the limits of insurance coverage provided, to settle a claim made or a judgment rendered against it without further action by the Legislature, but the City shall not be deemed to have waived any defense or sovereign immunity or to have increased the limits of its liability as a result of its obtaining insurance coverage for tortious acts in excess of the $100,000 or $200,000 waiver, or after October 1, 2011, $200,000 or $300,000 waiver, waiver provided by Florida Statutes. See “LITIGATION” herein.

Indebtedness of the City

Pursuant to the Debt Management Policy, the City’s debt issuance is subject to the following constraints: (i) the Net Debt Per Capita and the Net Debt to Taxable Assessed Value percentages, which shall be determined by the finance committee by bench marking the City to current industry standards, and (ii) the maximum maturity shall be the earlier of (a) the estimated useful life of the capital improvements being financed or (b) thirty years or (c) in the event debt was issued to refinance outstanding debt obligations the final maturity of the debt obligations being refinanced, unless a longer term is recommended by the finance committee.


41

Direct Debt

The City has met certain of its financial needs through debt financing. The table which follows is a schedule of the outstanding debt of the City as of May 31, 2011, including that which is payable from sources other than ad valorem taxes.

______________________________ Source: City of Miami, Finance Department * Being refunded by Series 2011A Bonds


DESCRIPTION Amount Issued

Outstanding Balance

General Obligations Bonds: Homeland Defense/Neighborhood CIP, Series 2002 153,186,406 26,306,791 General Obligation Refunding Bonds, Series 2002A 32,510,000 23,590,000 General Obligations Bonds, Other Issues 23,190,000 315,000 General Obligation Refunding Bonds, Series 2003 18,680,000 1,690,000 General Obligation Refunding Bonds, Series 2003B 4,180,000 4,030,000 General Obligation Refunding Bonds, Series 2007A 103,060,000 102,650,000 General Obligation Refunding Bonds, Series 2007B 50,000,000 50,000,000 General Obligation Refunding Bonds, Series 2009 51,055,000 47,715,000

Total General Obligation Bonds $ 435,861,406 $ 256,256,791 Special Obligation and Revenue Bonds and Loans:

Special Revenue Refunding Bonds, Series 1987 65,271,325 3,027,611 Community Entitlement Revenue Bonds, Series 1990 11,500,000 1,405,000 Special Obligation Non-Ad Valorem Revenue, Series 1995 72,000,000 28,950,000 Special Revenue Refunding Bonds, Series 2002A 27,895,000 22,995,000 Special Revenue Refunding Bonds, Series 2002C 28,390,000 16,065,000 Special Revenue Bonds, Series 2007 80,000,000 75,755,000 Special Revenue Bonds, Series 2009 65,000,000 64,090,000 Non Ad Valorem Refunding Bonds, Series 2009 37,435,000 36,160,000 Special Revenue Bonds, Marlins Garage, Series 2010A 84,540,000 84,540,000 Special Revenue Bonds, Marlins Retail, Series 2010B 16,830,000 16,830,000 Revenue Note, Series 2010 (Port of Miami Tunnel) 50,000,000 50,000,000

Loans: *Sunshine State Governmental Financing Commission Loans 27,630,900 5,851,500 *Sunshine State Governmental Financing Commission Loans 6,600,000 6,600,000 *Sunshine State Governmental Financing Commission Loans 42,500,000 42,500,000 *Sunshine State Governmental Financing Commission Loans 20,000,000 12,700,000 *Sunshine State Governmental Financing Commission - Secondary Loan 3,500,000 920,000 SEOPW - Section 108 HUD Loan 5,100,000 2,300,000 Wagner Square-Section 108 HUD Loan 4,000,000 3,806,000 Gran Central Corporation Loan 1,708,794 1,708,794 Parrot Jungle 6,112,000 1,556,000

Total Special Obligation and Revenue Bonds, and Loans $656,013,019 $477,759,905 Total Debt $1,064,243,525 $734,016,696

42

Pension Plans

The City’s employees participate in two separate, single employer defined benefit contributory pension plans under the administration and management of separate Boards of Trustees: The City of Miami Fire Fighters’ and Police Officers’ Retirement Trust (“FIPO”) and the City of Miami General Employees and Sanitation Employees’ Retirement Trust (“GESE”). The plans cover substantially all City employees who contribute a percentage of their base salary or wage on a bi-weekly basis. The Board of Trustees of GESE administer three defined pension plans: (i) City of Miami General Employees and Sanitation Employees Retirement Trust (‘GESE Retirement Trust”), (ii) an Excess Benefit Plan for the City of Miami and (iii) City of Miami General Employees and Sanitation Employees Retirement Trust Staff Pension Plan (“GESE Staff Trust”). Each plan’s assets may be used only for the payment of benefits to the members of that plan, in accordance with the term of the plan.

The City’s elected officials participate in a single employer defined benefit non-contributory pension plan under the administration and management of a separate Board of Trustees, the City of Miami Elected Officers’ Retirement Trust (“EORT”). This plan covers all elected officials with 7 or more years of elected service. The EORT is a non-contributory plan.

See APPENDIX B –PENSION PLANS herein for a full discussion of the City’s Pension Plans. This discussion has been prepared as an appendix due to the length of the information being presented.

Accrued Compensated Absences

Under terms of Civil Service regulations, labor contracts and administrative policy, City employees are granted vacation and sick leave in varying amounts. Additionally, certain overtime hours can be accrued and carried forward as earned time off. Unused vacation and sick time is payable upon separation from service, subject to various limitations depending upon the employee’s seniority and civil service classification. The amount accrued as of September 30, 2010 is $84,276,114 of which $13,672,940 is the current portion. Such amount only includes the primary government employees and does not include employees of component units. Every three years the maximum number of hours which can be carried forward is renegotiated with FIPO and GESE.

Other Post-Employment Benefits

Pursuant to Section 112.0801, Florida Statutes, the City is required to permit participation to the health insurance program by retirees and their eligible dependents at a cost to the retiree that is no greater than the cost at which coverage is available for active employees. Retired police officers are offered coverage at a discounted premium. For non-police retirees (fire fighters, general employees, sanitation employees and elected officials) and their dependents, the City has a stated policy of providing health coverage and life insurance at a discounted premium equal to 75% of the blended group rate.

GASB Statement No. 45 allows flexibility to governmental employers in the use of various actuarial cost methods. Several such acceptable actuarial cost methods were evaluated, including the entry age normal cost method, the frozen entry age normal cost method, the aggregate cost method, and the projected unit credit normal cost method. The goal was for the City to adopt an actuarial cost method which is acceptable, appropriate, and commonly used. The City's annual Other Post Employment Benefit ("OPEB") liability was calculated using the entry age normal cost method.

Plan Description. The City has two separate single-employer OPEB plans for its retirees. One plan is for retiring police officers and the other plan is for all other retiring employees (the "Non-Police Retirees). The benefits afforded to all retirees include lifetime medical, prescription, vision, dental and certain life insurance

43

coverage for retiree and dependents. Non-Police Retirees receive the same benefits as similarly situated active employees of the City, while retired police officers receive the same benefits as provided through the Fraternal Order of Police (the "FOP").

The City offers to its retirees comprehensive medical coverage and life insurance benefits through its self-insurance plan. This plan was established in accordance with Section 112.0801, Florida Statutes. Substantially all of the City's general employees, sanitation employees, police and firefighters may become eligible for these benefits when they reach normal retirement age while working for the City. There are approximately 5,278 covered participants, of which approximately 1,884 are retirees).

Funding Policy. The City is authorized to establish benefit levels and approve the actuarial assumptions used in the determination of contributions levels. The City establishes the contribution requirements of OPEB members and the City. These contributions are neither mandated nor guaranteed. The retiree contributes the premium cost each month. Spouses and other dependents are also eligible for coverage, although the retiree pays the premium cost.

The FOP sponsors a Health Insurance Trust (the "HIT") that is partially self-insured, which provides life, heath, and accidental death and dismemberment insurance to substantially all full-time sworn members of the City's Police department, eligible retirees, their families and beneficiaries. The HIT receives a significant source of is funding from the City, pursuant to the terms of a collective bargaining agreement. The agreement requires the City to reimburse the HIT an amount that is required to bring the HIT's available fund balance to $2.35 million annually.

Currently, the City's subsidy to OPEB benefits is unfunded. There are no separate trust funds or equivalent arrangements into which the City makes contributions to advance-fund the OPEB obligations, as it does for its retiree pension plans. The City's cost of the OPEB benefits is funded on a pay-as-you-go basis and was $12,327,670 for the fiscal year ended September 30, 2010.

The ultimate implicit subsidies which are provided over time are financed directly by general assets of the City, which are invested in short-term fixed income instruments according to is current investment policy. The City selected an interest discount rate of 4.25%, which is the long-range expected return on such short-term fixed income instruments, to calculate the present values and costs of the OPEB.

Actuarial Methods. 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. Actuarially determine amounts are subject to continual revision as actual results are compared to past expectations and new estimates re made about the future. Although the valuation results are based on values the actuarial consultant believes are reasonable assumptions, the valuation result is only an estimate of what future costs may actually be and reflect a long-term perspective. Deviations in any of the several factors, such as future interest rates, discounts, medical cost inflation, Medicare coverage risk and changes in marital status could result in actual costs being greater or less than estimated.

Projection of benefits for financial reporting purposes are based on the substantive OPEB plan (the OPEB plan as understood by the employer and the members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members. The 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, consistent with the long-term perspective of calculations.

44

Significant actuarial assumptions and methods used to estimate the OPEB liability are as follows:

Valuation date: October 1, 2008 Actuarial cost method: Entry Age Normal Cost Method Amortization method: Level Percent of Payroll Amortization Period: 28 years

Assumed rate of return on investments: 4.25% Assumed health care cost trend rates: 2009 – 10.0%

2010 – 6.8% 2011 – 8.5% 2012 – 8.0% 2013 – 7.5% 2014 - Thereafter – 7.0% - 5.0%

Source: City of Miami Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2010.

Annual OPEB Cost and Net OPEB Obligation. The City's annual OPEB cost is calculated based on the annual required contribution of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The annual required contribution represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize the actuarial liabilities over a period not to exceed 30 years. The City's annual OPEB cost for the fiscal year ended September 30, 2010 was $31,572,155 for police retirees and $12,540,416 for non-police retirees. The City's annual OPEB cost and net OPEB obligation for the fiscal year ended September 30, 2010 for both non-police and police retirees are as follows:

Non-Police Police Total Annual required contribution (ARC) $ 12,477,343 $ 31,334,523 $ 43,811,866 Interest on net pension obligation (NPO) 477,307 1,798,296 2,275,603 Adjustment to ARC (414,234) (1,560,664) (1,974,898) Annual OPEB Cost 12,540,416 31,572,155 44,112,571 Contributions made (5,282,534) (7,613,473) 12,896,007) Increase in Net OPEB Obligation (NOO) 7,257,882 23,958,682 31,216,564 NOO, beginning of year 11,230,755 42,312,854 53,543,609 NOO, end of year $ 18,488,637 $ 66,271,536 $ 84,760,173

Source: City of Miami Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2010.

The City's percentage of annual OPEB cost contributed to the plans, and the net OPEB obligations for

the fiscal year ended September 30, 2010 are as follows:

Non-Police OPEB (in millions)

Fiscal Year Annual OPEB Cost Employer

Contribution Percentage of Annual OPEB

Cost Contributed Net OPEB Obligation 2008 $ 10.8 $ 5.3 48.78% $ 5.5 2009 10.9 5.2 47.78 11.2

2010(1) 12.5 5.3 42.12 18.5 Source: City of Miami Other Post-Employment Benefits for City Employees Other Than Police Officers Actuarial Valuation Report for Year Ending September 30, 2010 prepared by Gabriel Roeder Smith & Company. (1) The employer contribution for the year ending September 30, 2010 was based on retirees' claim experience during that year and

premiums actually collected.

45

Police OPEB (in millions)

Fiscal Year Annual

OPEB Cost Employer

Contribution Percentage of Annual

OPEB Cost Contributed Net OPEB Obligation

2008 $ 26.6 $ 4.9 18.47% $ 21.7 2009 27.0 6.3 23.42 42.3

2010(1) 31.6 7.6 24.11 66.3 ___________________ Source: City of Miami Other Post-Employment Benefits for Police Officers Actuarial Valuation Report for Year Ending September 30, 2010 prepared by Gabriel Roeder Smith & Company. (1) The employer contribution and net OPEB Obligation for the fiscal year ending September 30, 2010 are estimates.

The following table illustrates how the Net OPEB Obligation and the Annual OPEB Cost are expected to grow over the next 10 years assuming no advance-funding. The projections in the table are made in a manner so as to simulate an open group forecast, that is, they approximate what forecast would produce if it included the effect of new hires after the valuation date.


Fiscal Year Annual

OPEB Cost

Current Net Employer Subsidy

Annual Net OPEB Shortfall

Net OPEB Obligation

2010 $ 12.5 $ 5.3 $ 7.3 $18.5 2011 13.2 5.0 8.2 26.7 2012 14.1 5.2 8.8 35.5 2013 14.7 5.9 8.8 44.4 2014 15.9 6.4 9.5 55.9 2015 16.6 6.9 9.7 63.6 2016 17.9 7.3 10.6 74.2 2017 18.6 7.7 10.9 85.1 2018 20.2 8.1 12.1 97.2 2019 20.8 8.5 12.3 109.4 2020 22.6 8.9 13.7 123.2

Source: City of Miami Other Post-Employment Benefits for City Employees Other Than Police Officers Actuarial Valuation Report for Year Ending September 30, 2010 prepared by Gabriel Roeder Smith & Company.


46


Fiscal Year Annual

OPEB Cost

Current Net Employer Subsidy

Annual Net OPEB Shortfall

Net OPEB Obligation

2010 $ 31.6 $ 7.6 $ 24.0 $ 66.2 2011 33.1 8.8 24.3 90.6 2012 35.8 10.0 25.8 116.4 2013 37.4 11.3 26.1 142.5 2014 40.8 12.5 28.3 170.7 2015 42.4 13.7 28.6 199.4 2016 46.1 15.0 31.2 230.6 2017 47.7 16.2 31.6 262.1 2018 52.1 17.6 34.5 296.6 2019 53.5 19.0 34.5 331.1 2020 58.6 20.5 38.1 369.3

Source: City of Miami Other Post-Employment Benefits for Police Officers Actuarial Valuation Report for Year Ending September 30, 2010 prepared by Gabriel Roeder Smith & Company.

The following tables are the OPEB funding progress.


Actual Valuation

Date (October 1)

Actuarial Value of Assets(1)

(a)__

Actuarial Accrued Liability (AAL) (b)_

Unfunded AAL

(UAAL) (b) – (a)__

Funded Ration

__(a)/(b)__

Annual Payroll __(c)__

UAAL as Percent of

Annual Payroll

_[(b) - (a)]/(c)] 2006 $ 0 $ 146.8 $ 146.8 0.00% $ 170.8 87.08% 2008 0 148.7 148.7 0.00 129.9 113.02

Source: City of Miami Other Post-Employment Benefits for City Employees Other Than Police Officers Actuarial Valuation Report for Year Ending September 30, 2010 prepared by Gabriel Roeder Smith & Company. (1) Amounts based on actuarial valuation. No assets existed in the plan at September 30, 2010.


Actual Valuation

Date (October 1)

Actuarial Value of Assets(1)

(a)__

Actuarial Accrued Liability (AAL) (b)_

Unfunded AAL

(UAAL) (b) – (a)__

Funded Ration

__(a)/(b)__

Annual Payroll __(c)__

UAAL as Percent of

Annual Payroll _[(b) -

(a)]/(c)]_

2006 $ 0 $ 333.5 $ 333.5 0.00% $ 57.6 579.06% 2008 0 373.1 373.1 0.00 71.8 519.76

___________________ Source: City of Miami Other Post-Employment Benefits for Police Officers Actuarial Valuation Report for Year Ending September 30, 2010 prepared by Gabriel Roeder Smith & Company. (1) Amounts based on actuarial valuation. No assets existed in the plan at September 30, 2010.

47

Internal Auditor

Pursuant to Section 48 of the City Charter, the Office of the Independent Auditor General performs internal audit functions including financial, operational, compliance, single audit, investigative, and performance audits of the City, its officials, and independent agencies; and examines accounting systems and provides legislative analysis. Its mission is to provide objective oversight through audits of all of the City’s departments, agencies and programs.

On July 14, 2010, Victor Igwe, the former internal Independent Auditor General of the City (the “Independent Auditor General”) issued a memorandum as part of the ongoing Audit of Financial Integrity Principles, “Audit No. 010-015” (the “Memorandum”) questioning the City’s use during Fiscal Years 2008 and 2009 of Local Option Fuel Taxes (“LOFT”) collected under Florida Statutes Section 336.025, in the amounts of $4,519,980 and $4,950,392, respectively. Specifically, the Memorandum questions the use of the LOFT for operational expenditures (rather than capital expenditures) for street lighting, based upon a July 13, 2010 opinion of the Florida Attorney General requested by and addressed to the Independent Auditor General.

In its Audit Report No. 11-011, the Independent Auditor General again questioned the continous use of the LOFT with an amount of $2,150,961 being transferred in Fiscal Year 2010.

Florida Statutes Section 336.025 authorizes the levy of LOFT on motor fuel and diesel for local transportaion system projects. LOFT revenues are not included in the Pledged Funds for payment of debt service on the Series 2011A Bonds; additionally, LOFT revenues could not legally be budgeted and appropriated by the City as part of its Non-Ad Valorem Revenues that could become part of the Pledged Funds, held as security for the Series 2011A Bonds.

The City responded and disagreed with the Independent Auditor General’s finding. The City has requested clarification from the Florida Legislature. Under current policy, the City no longer uses LOFT for operational expenditures.

The full text of the reports may be reviewed at http://egov.ci.miami.fl.us/Office_of_Auditor_General/index.aspx.

The term of the appointment of the Independent Auditor General has expired. The City expects to fill such vacancy as required under the City’s Charter.

Financial Urgency

On April 30, 2010, the City declared a financial urgency pursuant to Section 447.4095 of the Florida Statutes. That statute provides that, in the event of a financial urgency requiring modification of a collective bargaining agreement, the City and the representative of the bargaining unit are required to meet as soon as possible to negotiate the impact of the financial urgency. If after a reasonable period which may not exceed 14 days the parties are in disagreement, then they must proceed under Section 447.403 of the Florida Statutes, which provides for the appointment of a mediator. The 14-day period has expired without agreement and the parties are proceeding with the mediation. See “LITIGATION” herein regarding certain legal actions brought in connection therewith.


48

INVESTMENT RISK FACTORS

THE PURCHASE OF THE SERIES 2011A BONDS INVOLVES A DEGREE OF RISK, AS IS THE CASE WITH ALL INVESTMENTS. FACTORS THAT COULD AFFECT THE CITY’S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THE RESOLUTION, INCLUDING THE TIMELY PAYMENT OF PRINCIPAL OF AND INTEREST ON THE SERIES 2011A BONDS, INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING:

1. There is no assurance that any rating assigned to the Series 2011A Bonds by the rating agencies will continue for any given period of time or that it will not be lowered or withdrawn entirely by such rating agency, if in its judgment, circumstances warrant. A downgrade change in or withdrawal of any rating may have an adverse effect on the market price of the Series 2011A Bonds. See “RATINGS” herein.

2. The City’s covenant to budget and appropriate Non-Ad Valorem Revenues for the payment of the Series 2011A Bonds is limited by a number of factors. In addition, the City is not required and does not covenant to maintain any services or programs which generate Non-Ad Valorem Revenues. Cancellation of any services or programs which are not essential services that generate Non-Ad Valorem Revenues could have an adverse affect on the City fulfilling its covenant obligations under the Resolution. Certain Non-Ad Valorem Revenues, such as revenue sharing, may be subject to modification or repeal by the Legislature. See “NON-AD VALOREM REVENUES - Special Investment Considerations” herein.

3. Publicized economic factors which have created crises in many geographic areas have affected the City, as property values, property tax revenues, and sales tax revenues have declined. For example, the total net assessed value of property in the City declined 5.4% in Fiscal Year 2010 as compared to Fiscal Year 2009 and the estimated actual value of assessed property in the City declined .07% in Fiscal Year 2010 as compared to Fiscal Year 2009. See “APPENDIX A – GENERAL INFORMATION REGARDING THE CITY OF MIAMI AND MIAMI-DADE COUNTY – Assessed Valuations.” As a further example, the office of the property appraiser of the County’s July 1, 2011 release estimated the taxable value of the properties located in the City for Fiscal Year 2012 to be $30,352,746,000 which is a decrease of 3.5% from Fiscal Year 2011. These economic conditions have contributed significantly to the City’s financial distress and there may be future declines in City property tax values, property tax revenues and other revenues of the City. Additionally, the City’s property tax revenues have been affected by various property tax reform measures. See “APPENDIX A – GENERAL INFORMATION REGARDING THE CITY OF MIAMI AND MIAMI-DADE COUNTY – Property Tax Reform.” The City cannot accurately predict when, how or to what extent these conditions will change, and there is no assurance that they will improve in the foreseeable future. See “MANAGEMENT DISCUSSION OF BUDGET AND FINANCES” herein for the City’s current and projected financial condition.

4. The City has three separate, single employer defined benefit plans, in which its current and former employees may participate. The City of Miami Fire Fighters’ and Police Officers’ Retirement Trust (“FIPO”) and the City of Miami General Employees’ and Sanitation Employees’ Retirement Trust (“GESE”) are contributory plans that cover substantially all of the City’s employees. The third plan is a non-contributory defined benefits plan, the City of Miami Elected Officers’ Retirement Trust (“EORT”), in which all elected officials with seven or more years of elected service to the City may participate. The City annually funds its FIPO, the GESE and the EORT pension obligations. The estimated pension costs for the FIPO, GESE and EORT is $77,000,000 for Fiscal Year 2012 and the City is currently allocating such expenditure in its Fiscal Year 2012 Budget. Such pension costs are expected to increase significantly if changes are not made to the current plans. See “APPENDIX B- PENSION FUNDS” herein and also Note 10 - Pensions to “APPENDIX D -COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010.”

49

5. The City has also experienced significant increases in its obligations for contributions for healthcare benefits for employees and retirees, and their dependents, and other post employment benefit (“OPEB”) obligations. The City has two separate OPEB plans, one for police officers and the other for all other employees. These obligations are projected to increase significantly if changes are not made to the current plans. See “LIABILITIES OF THE CITY-Other Postemployment Benefits” and Note 11- Post-Employment Healthcare Benefits to “APPENDIX D - COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010.”

6. The City’s financial condition has worsened in recent years. In addition, the City’s current projections for Fiscal Year 2011 anticipate lower revenues than were budgeted. The City anticipates a projected Fiscal Year 2011 year end deficit of $4.9 million. Additionally, the City is projecting a Fiscal Year 2012 year end deficit of $55 million. See “MANAGEMENT DISCUSSION OF BUDGET AND FINANCES” herein. However, pursuant to Section 166.241, Florida Statutes, the City must have a balanced budget for each fiscal year. The City is examining potential actions which could, if successful, reduce City expenditures and generate additional revenues in Fiscal Year 2012. However, the City does not know at this time what actions will be taken, whether such actions will be successful or even if successful, whether such actions will result in a balanced budget for Fiscal Year 2012 as required by law.

7. The City has four separate collective bargaining units, the American Federation of State, County and Municipal Employees (“AFSCME”) Local 1907 for general City employees, AFSCME Local 871 for the City’s solid waste employees, the Fraternal Order of Police (“FOP”) Lodge No. 20 for police and detention officers, and the International Association of Fire Fighters (“IAFF”) Local 587 for the City’s firefighters. In connection with the IAFF collective bargaining agreement, the City has declared a financial urgency under Section 447.4095, Florida Statutes, seeking renegotiation of the collective bargaining agreement which is not due to expire until September 1, 2011. See “LIABILITIES OF THE CITY-Financial Urgency” and “LITIGATION” herein.

8. After informal requests for documents in December 2009, in February 2010 the SEC instituted a formal investigation of the City in connection with various bond offerings by the City in 2007 and 2009 to determine whether the City violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. This investigation could temporarily divert the attention of City officials and employees from the conduct of City operations, could cause the City to incur significant expenses, and could have a material effect on the City’s financial condition and operations. See “SECURITIES AND EXCHANGE COMMISSION INVESTIGATION” herein.

9. In the event of a default in the payment of principal of and interest on the Series 2011A Bonds, the remedies of the owners of the Series 2011A Bonds are limited under the Resolution. See “APPENDIX C – FORM OF THE RESOLUTION” herein.

10. The City has multiple litigation suits that it is defending at this time. The City cannot predict the outcome of the litigation nor the economic effect on the City. See “LITIGATION” herein for a description of certain pending litigation.

11. Pursuant to the Resolution, the City will fund the Reserve Account Requirement for the Series 2011A Bonds calculated at one-half of the Maximum Annual Debt Service on all Series 2011A Bonds outstanding. Such Reserve Account Requirement will be funded with proceeds of the Series 2011A Bonds and a Reserve Account Insurance Policy in equal portions.

50

LEGAL MATTERS

Certain legal matters incident to the validity of the Series 2011A Bonds are subject to the approval of Squire, Sanders & Dempsey (US) LLP, Bond Counsel, Miami, Florida whose approving opinion in the form attached hereto as “APPENDIX E - FORM OF BOND COUNSEL OPINION” will be furnished without charge to the purchasers of the Series 2011A Bonds at the time of their delivery. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery.

Certain legal matters will be passed upon for the City by Julie O. Bru, Esq., City Attorney, and by Bryant Miller Olive P.A., Miami, Florida, Disclosure Counsel to the City.

SECURITIES AND EXCHANGE COMMISSION INVESTIGATION

On December 10, 2009, the City of Miami was notified by the Miami Regional Office of the SEC that the staff of the SEC was conducting a non-public inquiry concerning City of Miami bond offerings to determine whether there have been any violations of federal securities laws. In letters dated December 10, 2009 and December 23, 2009, the SEC staff requested that the City voluntarily provide the SEC staff with documents concerning (a) City bond offerings in 2007 and 2009, (b) the transfer of approximately $13.1 million from the Capital Projects Fund to the General Fund in Fiscal Year 2007, (c) the transfer of approximately $13.3 million from the Capital Projects Fund to the General Fund in Fiscal Year 2008, and (d) Audit Report No. 010-005, Audit of Compliance with the Financial Integrity Principles, issued by the City of Miami Office of Independent Auditor General in November, 2009.

In February 2010, the SEC issued a formal order directing a non-public investigation ("Formal Order"), stating that it has information tending to show possible violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. According to the Formal Order, the SEC is investigating whether, since at least 2005, the City and others may have violated these provisions by, among other things, employing devices, schemes or artifices to defraud, engaging in transactions which operated or would operate as a fraud or deceit, or making false statements of material fact or failing to disclose material facts concerning, among other things, the state of the City’s financial condition.

The SEC has requested documents from the City, both voluntarily and by subpoena, and has also issued subpoenas for documents from and the testimony of current and former City officials and employees, and has taken the testimony of some individuals. The City has received multiple subpoenas from the SEC asking for additional documents concerning primarily the Auditor General's report referenced above, the fund transfers referenced above, City bond issues in 2007 and 2009, bond document disclosures, reports to bondholders, City pension plans and obligations under such plans, any policies, procedures and guidelines related to inter-fund transfers, any adverse conditions concerning the City's finances, any internal investigation, review or analysis conducted by the City and related to matters that have been identified as subjects of the SEC investigation and documents related to the use of certain revenue sources as recently mentioned in the Internal Auditor General Report No. 11-001. Documents requested include communications with and among City management and elected officials.

The City is cooperating fully with the SEC investigation and is providing information in response to the SEC's requests and subpoena. The SEC has not advised the City when the investigation is expected to be concluded or of any potential outcome of the investigation, and the City cannot predict either the duration of the investigation or its outcome. The SEC investigation may temporarily divert the attention of City officials and employees from the conduct of City operations, could cause the City to incur significant expenses, and could have a material effect on the City's financial condition and operations. The City cannot predict the outcome of this investigation or the ultimate consequences resulting from any action on the part of the SEC.

51

See also “LITIGATION - Certain Legal Proceedings” discussed below and “INVESTMENT RISK FACTORS” discussed herein.

LITIGATION

There is no pending or, to the knowledge of the City, any threatened litigation against the City of any nature whatsoever which in any way questions or affects the validity of the Series 2011A Bonds, or any proceedings or transactions relating to their issuance, sale, execution, or delivery, or the adoption of the Resolution, or the levy of the non-ad valorem revenues. Neither the creation, organization or existence, nor the title of the present members of the City Commission or other officers of the City is being contested.

Certain Legal Proceedings

1. Michael J. Boudreaux v. City of Miami, Florida Circuit Court, Case No. 10-24880CA09. On April 26, 2010, the City’s former Director of Management and Budget filed a Complaint asserting that the termination of his employment was in retaliation for his cooperation with the SEC’s investigation of the City. See “Securities and Exchange Commission Investigation” herein. The City was served with the complaint on May 3, 2010. The City has filed a motion to dismiss, which was heard on July 21, 2010. The Court denied the motion to dismiss, but has allowed the City to file a motion for summary judgment to be heard at a later date. Additionally, the Plaintiff filed a request for a civil service administrative hearing pursuant to Civil Service Rule 16.2 and Florida statutes Sections 112.3187 through 112.31895 (2009) (the “Florida Whistleblower Act”).

The Complaint alleges, among other things, that the termination of Boudreaux’s employment on or about March 8, 2010 violated the Florida Whistleblower Act. The complaint further alleges that Boudreaux insisted on telling the truth and reporting malfeasance of public officials, that the City had major budget shortfalls in fiscal years 2007-08 and 2008-09, that he advised others of unspent Capital Project Funds which could be transferred to the General Fund, that others approved of the transfers, that others were responsible for accurately reporting and accounting for the transfers, and that he informed other officials of violations of laws.

The City cannot predict at this time the outcome of the final conclusion of this lawsuit. If Boudreaux prevails, the City could be required to reinstate him to his former position and pay his lost compensation and benefits, as well as other possible damages, attorneys’ fees and costs.

2. Helene Hutt v. City of Miami, United States District Court for the Southern District of Florida, Case No. 10-21451-Civ-Martinez, filed May 4, 2010. This is a securities fraud class action in which the Plaintiff is the named class representative who represents the putative class of all persons and entities who purchased or otherwise acquired municipal bonds issued by the City from September 30, 2005 to November 17, 2009. Plaintiff alleges that the City made fraudulent material misrepresentations and omissions regarding the City’s then current financial condition and future prospects to municipal bond purchasers and the investing public, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Complaint further alleges that the misrepresentations were revealed only after the City’s Office of Independent Auditor General reported that the City made improper transfers from capital funds to the General Fund. Plaintiff further claims that the City’s bonds were overvalued, that bond prices were artificially inflated, and that the price of the bonds dropped when the truth was revealed, thereby damaging Plaintiff and the other members of the Class. Plaintiff seeks compensatory damages and attorneys’ fees for all members of the class. The time period to join as a member of the class has expired with no additional plaintiffs being added. The City filed a motion to dismiss, which was granted in part and denied in part, with leave to amend. An Amended Complaint was filed and the City filed another motion to dismiss which is pending. The City cannot predict at this time the outcome of this lawsuit.

52

3. Administrative Hearing with respect to Olatunbosu “Ola” Aluko. On June 7, 2010, the City received a request, pursuant to the Whistleblower Act, for a hearing for Mr. Olatunbosu Aluko in connection with his termination of employment from the City on April 8, 2010. The request for hearing states that Mr. Aluko was terminated because, among other things, he had uncovered a change order scheme in connection with several City contracts and because he raised concerns about the consultant-run bid processes for the Construction Agreement in connection with the Project. Mr. Aluko claims that his termination was in violation of the Whistleblower Act. A civil service administrative hearing on this matter has been set for July 20, 2010. The City is unable at this time to determine the merits of this claim or the veracity of any of the allegations contained in the request for a hearing.

4. City of Miami v. Fraternal Order of Police, Third District Court of Appeal Case No. 3D10-3036. The FOP sued the City alleging a violation of the Sunshine Law relative to collective bargaining. In particular, the union claimed that the City held a shade meeting or an executive session on August 31, 2010 which did not comply with Florida Statutes 286.011, 447.203(14), and 447.605. The City moved to dismiss arguing that the union filed an Unfair Labor Practice regarding the same claim and that Public Employee Relations Committee (“PERC”) had preemptive jurisdiction over the case. The trial court denied the City's motion to dismiss, and the City filed a Petition for Writ of Prohibition with the 3rd DCA. The Union has not yet responded. The matter does not yet have a date to be reviewed by the Court.

5. City of Miami v. Miami Association of Firefighters Local 587 of the International Association of Firefighters of Miami, Third District Court of Appeal Case No. 3D10-3180 (JAG). This case originated as a class action grievance filed by bargaining members alleging that the City violated article 18 of the collective bargaining agreement (CBA). The union claims the City violated the CBA by notifying the union in writing on 4/30/10 that, because of a self-declared "financial urgency", they were going to modify the existing CBA and demanded that the union participate in impact bargaining over the modifications. IAFF demands that the City withdraw the invocation of Fla. Stat. 447.4095 and withdraw the demand for bargaining as outlined in the City's letter dated 4/30/10, make grievants whole for any changes made to the CBA and have the City appropriate the necessary monies to fund the agreement and any status quo period following the expiration of this agreement. The City initiated an action in circuit court styled as a Motion to Stay Arbitration. Therein, the City asserted that: the union waived the right to bring the grievance by filing a ULP; and that Article 18.18 of the CBA (requiring funding of the CBA unless there is a "true fiscal emergency") is void and unenforceable as against public policy. The circuit court denied the relief requested by the City, and the City has appealed to the 3rd DCA. The City filed its Initial Brief. The Union has not yet filed its Answer Brief.

6. Fraternal Order of Police v. City of Miami and State of Florida, Case No. 10-47918 CA 01. The Union filed suit claiming the Financial Urgency Statute is unconstitutional, and also requested the circuit court to declare that the City is in a state of Financial Emergency. The City has filed a motion to dismiss and a date has not been set for hearing.

7. Fraternal Order of Police, Walter E. Headley, Jr., Miami Lodge No. 20 v. City of Miami, Case No.: CA-2010-119. This is a matter filed before the Public Employees Relations Commission (“PERC”) by the FOP (hereinafter “Union”) claiming the City committed an unfair labor practice as a result of its declaration of a financial urgency pursuant to F.S. 447.4095. The FOP alleges that it had a Collective Bargaining Agreement ("CBA") with the City, effective through September 30, 2010, that the parties exchanged initial proposals for a successor agreement, and that the parties have held several bargaining sessions. The Union further alleges that during the several bargaining sessions, the City never advised the Union that there was a need to reach settlement on economic items expeditiously, or that the City intended to declare a "financial urgency" and invoke the process set forth in Section 447.4095, F.S. The Union contends that Section 447.4095 may only be invoked to modify the terms of an existing agreement. The Union further

53

alleges that although the parties continued to bargain for a successor collective bargaining agreement on August 9 and 12, 2010, the parties never discussed wages or pensions, but on August 16, 2010, the City advised PERC that it had engaged in negotiations on the impact of the financial urgency, and any action necessitated by the financial urgency, and that a dispute existed. The Union further alleges that on August 31, 2010, the City unilaterally took action to alter the terms and conditions of employment before reaching impasse with the Union, in violation of Section 447.501(1)(a) and (1)(c). Additionally, the Union claims that, although the changes were not discussed with them, they were discussed in a closed door unnoticed "shade" meeting conducted in violation of Section 447.605, F.S. (an exemption to the Sunshine Law). The Union contends that the failure of the City to have any discussions with the Union on these matters constitutes bad faith or surface bargaining in violation of Section 447.501(1)(a), F.S. It also asserts that by unilaterally altering terms and conditions of employment before completion of the impasse procedure set forth in Section 447.403, F.S., and by not responding to a request for records, the City violated Section 447.501(1)(a) and (1)(c), F.S. The Union seeks reinstatement of all benefits (pension and wages) modified by the City Commission. Hearings were held and concluded before a Special Magistrate. A Recommended Order was received on July 1, 2011 and the City was found in compliance with F.S. 447.4095. The Hearing Officer found the City did not commit an unfair labor practice.

8. International Association of Firefighters, Local 587 v. City of Miami, Case No.: CA-2010-

124. This is a matter filed before the Public Employees Relations Commission (“PERC”) by the IAFF Local 587 (hereinafter "Union") claiming the City committed an unfair labor practice. Specifically, the Union asserts that it had a Collective Bargaining Agreement ("CBA") with the City, effective through October 1, 2010, that, in 2010, in exchange for concessions by the Union, the CBA was extended through September 30, 2011, and that the City expressly waived its right not to fund any year of the CBA except in the case of "true fiscal emergency", defined in the CBA (ARTICLE 18) as, "the City must demonstrate that there is no other reasonable alternative means of appropriating monies to fund the agreement for that year or years". The Union further alleges that less than six (6) months after agreeing to the extension, on April 30, 2010, the City invoked the process under Section 447.4095, F.S., claiming "financial urgency," and on August 31, 2010, unilaterally took action to modify wages, insurance and pension benefits. The Union asserts that the invocation of Section 447.4095, F.S. was improper and was waived by the City in the CBA. Further, the Union alleges that, prior to their enactment, the modifications to the CBA were discussed in a closed door, unnoticed shade meeting in violation of Section 447.605, F.S. (an exemption to the Sunshine Law). Finally, the Union asserts that the City failed to bargain collectively and in good faith by enacting the changes of August 31, 2010, by not providing the Union with notice in advance, and by failing to discuss, bargain over, impact bargain, or complete the process set forth in Section 447.403 and/or Section 447.4095, F.S. The Union seeks reinstatement of all benefits (pension and wages) modified by the City Commission. A hearing was scheduled before a Special Magistrate and closing briefs are due by June 2, 2011. A Recommended Order was received on July 7, 2011 and the City was found in compliance with F.S. 447.4095. The Hearing Officer found the City did not commit an unfair labor practice.

9. International Association of Firefighters, Local 587 (IAFF) v. City of Miami. American

Arbitration Association, Case No.: 32-390-00428-1. This is a labor arbitration, filed as a grievance, by the International Association of Firefighters, (“IAFF”). The union alleges the City violated Article 18.18 of the collective bargaining agreement (“CBA”) by declaring a “financial urgency” and demanding that the union participate in impact bargaining over modifications to the CBA. The IAFF seeks reinstatement of all modifications to pension, wages and health benefits made as a result of the City’s financial urgency pursuant to F.S. 447.4095. An arbitration hearing was held and concluded, closing and reply briefs were submitted. On June 6, 2011, the grievance was denied and the arbitrator found that the IAFF did not sustain its burden of proving a breach of contract. However, similar grievances on the instant matter have also been filed by the Police Union, Fraternal Order of Police and the union for General Employees, AFSCME 1907 also seeking

54

reinstatement to modifications to pension, wages, and health benefits pursuant to the City’s financial urgency under F.S. 447.4095.

Legal challenges No. 4-9 above relate to modifications made to the various union contracts by the City

Commission’s invoking the “financial urgency” provisions of State law. Such modifications resulted in budgetary reductions for wages, pensions, and health care costs in a total aggregate amount of approximately $76,943,905. In all circumstances, the unions are requesting the return of their respective budgetary reduction amounts resulting from the modifications. The City cannot predict at this time the outcome of these legal challenges. See “LIABILITIES OF THE CITY- Finance Urgency” herein.

10. In the matter of Glenn Marcos, Civil Service Board Case No. 10-21G. Mr. Glenn Marcos was terminated from his position as Purchasing Manager for the City on August 5, 2010. Mr. Marcos claims he was terminated because he voiced oral and written complaints regarding unlawful financial practices by the Finance Department, specifically the distribution and/or allocation of funds from restricted accounts to the General Fund. Mr. Marcos has requested a hearing under Section 40-128(b) of the City Code, which is set for June 14, 2011. The City cannot predict at this time the outcome of the final conclusion of this lawsuit.

DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS

Rule 69W-400.003, Rules of Government Securities, promulgated by the Office of Financial Regulation of the Financial Services Commission, under Section 517.051(1), Florida Statutes (“Rule 69W- 400.003”), requires the City to disclose each and every default as to the payment of principal and interest with respect to obligations issued by the City after December 31, 1975. Rule 69W-400.003 further provides, however, that if the City in good faith believes that such disclosures would not be considered material by a reasonable investor, such disclosures may be omitted. The City has not defaulted on the payment of principal or interest with respect to obligations issued by the City after December 31, 1975.

TAX MATTERS

In the opinion of Squire, Sanders & Dempsey (US) LLP, Bond Counsel, under existing law: (i) interest on the Series 2011A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations the Series 2011A Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Bond Counsel expresses no opinion as to any other tax consequences regarding the Series 2011A Bonds.

The opinion on tax matters will be based on and will assume the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the City contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2011A Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the City’s certifications and representations or the continuing compliance with the City’s covenants.

The opinion of Bond Counsel is based on current legal authority and covers certain matters not directly addressed by such authority. It represents Bond Counsel’s legal judgment as to exclusion of interest on the Bonds from gross income for federal income tax purposes but is not a guaranty of that conclusion. The opinion is not binding on the Internal Revenue Service (“IRS”) or any court. Bond Counsel expresses no

55

opinion about (i) the effect of future changes in the Code and the applicable regulations under the Code or (ii) the interpretation and the enforcement of the Code or those regulations by the IRS.

The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and to remain excluded from gross income for federal income tax purposes, some of which require future or continued compliance after issuance of the obligations. Noncompliance with these requirements by the City may cause loss of such status and result in the interest on the Series 2011A Bonds being included in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2011A Bonds. The City has covenanted to take the actions required of it for the interest on the Series 2011A Bonds to be and to remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. After the date of issuance of the Series 2011A Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel’s attention, may adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2011A Bonds or the market value of the Series 201A Bonds.

A portion of the interest on the Series 2011A Bonds earned by certain corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the Series 2011A Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in the United States and to a federal tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of income, deduction or credit for certain taxpayers, including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these and other tax consequences will depend upon the particular tax status or other tax items of the owner of the Series 2011A Bonds. Bond Counsel will express no opinion regarding those consequences.

Payments of interest on tax-exempt obligations, including the Series 2011A Bonds, are generally subject to IRS Form 1099-INT information reporting requirements. If a Series 2011A Bond owner is subject to backup withholding under those requirements, then payments of interest will also be subject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes.

Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may also be considered by the State legislature. Court proceedings may also be filed the outcome of which could modify the tax treatment of obligations such as the Series 2011A Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Series 2011A Bonds will not have an adverse effect on the tax status of interest on the Series 2011A Bonds or the market value of the Series 2011A Bonds.

Prospective purchasers of the Series 2011A Bonds should consult their own tax advisers regarding pending or proposed federal and state tax legislation and court proceedings, and prospective purchasers of the Series 2011A Bonds at other than their original issuance at the respective prices indicated on the inside cover of this Official Statement should also consult their own tax advisers regarding other tax considerations such as the consequences of market discount, as to all of which Bond Counsel expresses no opinion.

Bond Counsel’s engagement with respect to the Series 2011A Bonds ends with the issuance of the Series 201A Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the City or the owners of the Series 2011A Bonds regarding the tax status of interest thereon in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the

56

interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Series 2011A Bonds, under current IRS procedures, the IRS will treat the City as the taxpayer and the beneficial owners of the Series 2011A Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IRS, including but not limited to selection of the Series 2011A Bonds for audit, or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect the market value of the Series 2011A Bonds.

Original Issue Discount and Original Issue Premium

Certain of the Series 2011A Bonds (“Discount Bonds”) as indicated on the inside cover of this Official Statement were offered and sold to the public at an original issue discount (“OID”). OID is the excess of the stated redemption price at maturity over the “issue price” of a Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity is sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of a Discount Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding interval selected by the owner). The portion of OID that accrues during the period of ownership of a Discount Bond (i) is interest excluded from the owner’s gross income for federal income tax purposes to the same extent, and subject to the same considerations discussed above, as other interest on the Bonds, and (ii) is added to the owner’s tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. A purchaser of a Discount Bond in the initial public offering at the price for that Discount Bond stated on the cover of this Official Statement who holds that Discount Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond.

Certain of the Series 2011A Bonds (“Premium Bonds”) as indicated on the inside cover of this Official Statement were offered and sold to the public at a price in excess of their stated redemption price (the principal amount) at maturity. That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond. For purposes of determining the owner’s gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium Bond, the owner’s tax basis in the Premium Bond is reduced by the amount of bond premium that is amortized during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium Bond for an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond in the initial public offering at the price for that Premium Bond stated on the cover of this Official Statement who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, to its earlier call date that results in the lowest yield on that Premium Bond) will realize no gain or loss upon the retirement of that Premium Bond.

Owners of Discount and Premium Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OID or bond premium properly accruable or amortizable in any period with respect to the Discount or Premium Bonds and as to other federal tax consequences and the treatment of OID or bond premium for purposes of state and local taxes on, or based on, income.

57

RATINGS

Moody’s Investor's Service (“Moody’s”), Fitch Ratings (“Fitch”) and Standard & Poor's Ratings Group (“S&P”) have assigned underlying ratings of “A3” (stable outlook), “BBB+” (negative outlook) and “BBB-” (negative outlook), respectively, to the Series 2011A Bonds, without any regard to the Policy. Moody's and S&P are expected to assign ratings of "Aa3" (negative outlook) and "AA+" (stable outlook), respectively, to the Series 2011A Bonds, with the understanding that, upon delivery of the Series 2011A Bonds the Policy will be issued by the Insurer.

On June 27, 2011, Fitch lowered its rating on the City’s general obligation bonds from “A“ to “A-” and lowered its rating on the City’s revenue bonds from “A-“ to “BBB+”(negative outlook). On June 28, 2011, Moody’s lowered its rating on the City’s general obligation bonds from “A1“ to “A2” and lowered its rating on the City’s revenue bonds from “A2“ to “A3” (stable outlook). On June 28, 2011, S&P lowered its rating on the City’s general obligation bonds from “A-“ to “BBB” and lowered its rating on the City’s revenue bonds from “BBB+” to “BBB-“ (negative outlook). Please see rating reports of each rating agency for additional information.

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 2011A 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, Moody’s Investor Service, 250 Greenwich Street, New York, New York 10007 and Standard & Poor’s Ratings Group, 55 Water Street, New York, New York, 10041.

FINANCIAL ADVISOR

The City has retained First Southwest Company, Aventura, Florida, as Financial Advisor in connection with the City’s financing plans and with respect to the authorization and issuance of the Series 2011A Bonds. The Financial Advisor is not obligated to undertake and has not undertaken to independently verify or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. The Financial Advisor did not participate in the underwriting of the Series 2011A Bonds.

AUDITED FINANCIAL STATEMENTS

The Comprehensive Annual Financial Report of the City for the Fiscal Year ended September 30, 2010 (the “Audited Financial Statements”), and report thereon of McGladrey & Pullen LLP, as independent certified public accountants, are attached hereto as “APPENDIX D–COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010” as a part of this Official Statement. McGladrey & Pullen LLP has not participated in the preparation or review of this Official Statement. The Audited Financial Statements are attached hereto as a matter of public record. Such statements speak only as of September 30, 2010.

In the normal course of business, the City issued a Request for Proposals for an independent certified accountant. Such contract is expected to be awarded within the next 30 days.

58

UNDERWRITING

The Series 2011A Bonds are being purchased by RBC Capital Markets, LLC, acting on behalf of itself and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Keegan & Company, Inc., and Raymond James & Associates, Inc. (collectively, the “Underwriters”) at an aggregate purchase price of $71,955,090.53 (the par amount of the Series 2011A Bonds, less Underwriters’ discount of $402,234.57, plus net original issue premium of $1,712,325.10). The Underwriters’ obligations are subject to certain conditions precedent described in the Bond Purchase Agreement entered into between the City and the Underwriters, and they will be obligated to purchase all of the Series 2011A Bonds if any Series 2011A Bonds are purchased. The Series 2011A Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2011A 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 Underwriters.

The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the City, for which they receive or will receive customary fees and expenses.

In the ordinary course of their various business activities, the Underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the City.

CONTINGENT FEES

The City has retained Bond Counsel, Disclosure Counsel and the Financial Advisor with respect to the authorization, sale, execution and delivery of the Series 2011A Bonds. Payment of the fees of such professionals and an underwriting discount to the Underwriters, including the fees of Underwriters’ counsel, are each contingent upon the issuance of the Series 2011A Bonds.

ENFORCEABILITY OF REMEDIES

The remedies available to the owners of the Series 2011A 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 2011A Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2011A 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 or after such delivery.

59

CONTINUING DISCLOSURE

The City has covenanted for the benefit of the holders of the Series 2011A Bonds to provide certain financial information and operating data relating to the City and the Series 2011A Bonds in each year, and to provide notices of the occurrence of certain enumerated material events. The City has agreed to file annual financial information and operating data and the audited financial statements with each entity authorized and approved by the SEC to act as a repository (each a "Repository") for purposes of complying with Rule 15c2-12 adopted by the SEC (the "Rule"). Effective July 1, 2009, the sole Repository is the Municipal Securities Rulemaking Board. The City has agreed to file notices of certain enumerated material events, when and if they occur, with the Repository. The obligation undertaken is an obligation to provide only limited information at limited times and may not include all information necessary to value the Series 2011A Bonds.

The specific nature of the financial information, operating data, and of the type of events which trigger a disclosure obligation, and other details of the undertaking are described in "APPENDIX F - FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT” attached hereto. The Disclosure Dissemination Agent Agreement shall be executed by the City upon the issuance of the Series 2011A Bonds. These covenants have been made in order to assist the Underwriters in complying with the continuing disclosure requirements of the Rule.

With respect to the Series 2011A Bonds, no party other than the City is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the Rule. The City has undertaken certain continuing disclosure obligations in prior continuing disclosure certificates in connection with its outstanding debt and its outstanding bonds to provide certain financial and operating information and notices to each nationally recognized municipal securities information repository then approved by the Securities and Exchange Commission, and SID, if and when one is established, and others. Due to a change in auditors and financial management system (which was changed to an Enterprise Resource Planning System), the City did not timely file its 2007 annual report. Such report has been filed, and as of the date hereof, the City is compliance with all of its continuing disclosure obligations, in all material respects, and has implemented procedures to assure future compliance with all of its continuing disclosure obligations.

ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT

The references, excerpts, and summaries of all documents, statutes, and information concerning the City 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 2011A Bonds, the security for the payment of the Series 2011A Bonds and the rights and obligations of the owners thereof and to each such statute, report or instrument.

The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety together with all foregoing statements. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder is to create, under any circumstances, any implication that there has been no change in the affairs of the City from the date hereof.

FORWARD-LOOKING STATEMENTS

This Official Statement contains certain “forward-looking statements” concerning the City’s operations, performance and financial condition, including its future economic performance, plans and objectives. These statements are based upon a number of assumptions and estimates which are subject to

60

significant uncertainties, many of which are beyond the control of the City. The words “may,” “would,” “could,” “will,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “estimate” and similar expressions are meant to identify these forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements.

MISCELLANEOUS

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 2011A Bonds.

AUTHORIZATION OF OFFICIAL STATEMENT

The execution and delivery of this Official Statement has been duly authorized and approved by the City. At the time of delivery of the Series 2011A Bonds, the City 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 MATTERS” as to which no opinion shall be expressed), as of its date and as of the date of delivery of the Series 2011A 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.


By:__/s/ Johnny Martinez_____________

City Manager

A-1

APPENDIX A

GENERAL INFORMATION REGARDING THE CITY OF MIAMI AND MIAMI-DADE COUNTY

General

Now 115 years old, the City of Miami, Florida (the “City”) is part of the nation’s seventh largest metropolitan area. Incorporated in 1896, the City is the only major municipality conceived and founded by a woman, Julia Tuttle. According to the U.S. Census Bureau, the City’s population in 1900 was 1,700 people. Today it is a city rich in cultural and ethnic diversity with 399,457 residents according to the 2010 U.S. Census, 58.9% of them foreign born. In physical size the City is not large, encompassing only 34.3 square miles. The City is situated at the mouth of the Miami River on the western shore of Biscayne Bay, the main port entry in Florida. The City is the southernmost major city and seaport in the continental United States. The nearest foreign territory is the Bahamian Island of Bimini, 50 miles from the City’s coast. In population, the City is the largest of the 35 municipalities that make up Miami-Dade County (the “County” or “Miami-Dade County”) and is the County seat.

Population

Year

City of Miami

Percent Change

Miami-Dade County

Percent Change

State of Florida

Percent Change

1960 291,688 -- 935,047 -- 4,951,560 --1970 331,553 13.6% 1,267,792 35.6% 6,791,418 37.2%1980 346,865 4.6 1,625,509 28.2 9,746,961 43.51990 358,648 3.4 1,937,194 19.2 12,938,071 32.7 2000 362,470 1.0 2,253,362 16.3 15,982,378 23.5

2010 399,457 10.2 2,563,885 13.7 18,801,310 17.6 Source: Bureau of Economic and Business Research, University of Florida, US Census Bureau, Miami-Dade County, Annual Report to Bondholders 2010

Government

Since 1997, the City has been governed by a form of government known as the “Mayor-City Commissioner plan.” There are five Commissioners elected from designated districts within the City. The Mayor is elected at large every four years. As official head of the City, the Mayor has veto authority over actions of the Commission. The Mayor appoints the City Manager who functions as chief administrative officer.

City elections are held in November every two years on a non-partisan basis. Candidates for Mayor must run as such and not for the Commission in general. At each election, two or three members of the Commission are elected for four-year terms. Thus, the terms are staggered so that there are always at least two experienced members of the Commission.

The City Manager serves as the administrative head of the municipal government, charged with the responsibility of managing the City's financial operations and organizing and directing the administrative infrastructure. The City Manager also retains full authority in the appointment and supervision of department directors, preparation of the City's annual budget and initiation of the investigative procedures. In addition, the City Manager takes appropriate action on all administrative matters.

A-2

Climate

The City’s climate is sub-tropical-marine, characterized by long summers with abundant rain fall and mild, dry winters. The average temperature in the summer is 81.4 degrees Fahrenheit and 69.1 degrees Fahrenheit in the winter, with an average annual temperature of 75.4 degrees.

Parks and Recreation

Outdoor recreational activities like golf, tennis, running, bicycling, rollerblading, boating and fishing can be enjoyed year-round. Altogether, Miami-Dade County has over 300 parks and recreational areas totaling over one million acres, including Everglades and Biscayne National Parks. Eighteen public golf courses and 504 public tennis courts are available throughout the County.

Miami-Dade County’s 22 miles of public beach comprise 1,400 acres, which are freely accessible and are enjoyed year round by residents and tourists.

Athletics for spectator sports fans are held at the American Airlines Arena. Land Shark Stadium, which is used by the Miami Dolphins, the Florida Marlins and the Miami Hurricanes, is located in North Central Miami-Dade County. The City and County are jointly constructing a new stadium and parking garage for the Florida Marlins baseball franchise. Sports competition includes professional and college football, basketball, baseball, tennis, golf, sailing and championship boat races. Other athletic events include amateur football, basketball, soccer, baseball, motorcycle speedway racing and rowing events.

Education

Miami-Dade County’s public school system is the fourth largest in the United States, as measured by student enrollment. The countywide school district offers a wide variety of programs to meet the needs of its 398,000-plus students. For example, Miami-Dade County’s magnet schools provide intensive levels of instruction in subjects like science and technology, foreign languages, health care, architecture, the performing arts and marine sciences. Other public school programs serve students with different academic, physical or emotional needs, including gifted, advanced and remedial courses.

Miami-Dade County is also noted for its high quality private schools, which include Gulliver Academy, Miami Country Day School and Ransom Everglades, as well as numerous schools affiliated with religious organizations.

Overall, 80% of graduating seniors continue their education in a post-secondary institution. Miami-Dade County is also home to Miami-Dade College, the largest comprehensive community college in the United States. Florida International University is one of the 25 largest universities in the nation and offers more than 200 bachelor’s, master’s and doctoral programs in 21 colleges. The University of Miami, a private undergraduate and graduate institution, includes diversified research facilities and exceptional schools of law, music, medicine, and marine sciences. Barry University, St. Thomas University and Florida Memorial University offer degrees in a variety of subjects and programs.

Medical

Miami-Dade County has the largest concentration of medical facilities in Florida, with 32 hospitals and more than 32,000 licensed health care professionals. Nursing homes, adult congregate living facilities and home health care services also serve the region.

A-3

The University of Miami Jackson Memorial Medical Center, the second-largest public hospital in the nation, forms the hub of the region’s medical centers, which includes world-renowned specialized facilities like Bascom Palmer Eye Institute, the Mailman Center for Child Development and the Sylvester Comprehensive Cancer Center.

Miami-Dade County has an extensive network of community hospitals, such as Mount Sinai Medical Center, Cedars Medical Center, Baptist Hospital, Mercy Hospital and Miami Children’s Hospital. Nine area hospitals have formed the Miami Medical Alliance, a cooperative effort to serve patients from Latin America and the Caribbean

Transportation

Miami-Dade County has a comprehensive transportation network designed to meet the needs of residents, travelers and area businesses. The County’s internal transportation system includes Metrorail, a 22.6 mile above-ground system connecting South Miami-Dade and the City of Hialeah with the Downtown and Civic Center areas providing 17.4 million passenger trips annually. Metromover, a 4.4 mile automated loop, carries approximately 8.1 million passenger trips annually around downtown Miami, Brickell Avenue and the Omni shopping center areas. Miami-Dade County’s Metrobus operates over 29.8 million miles per year and over 70.5 million passenger trips annually. The County also provides para-transit services to qualified riders in the amount of 1.6 million passenger trips annually. Cargo rail service is available from both Miami International Airport and the Port of Miami, and Amtrak has a passenger station in the City. Tri-Rail, a 72-mile train system, links West Palm Beach, Boca Raton, Fort Lauderdale, Hollywood and Miami International Airport.

Miami International Airport. Miami International Airport is one of the busiest airports in the world for both passengers and cargo traffic. It ranks twelfth in the nation and twenty-eighth in the world in passenger traffic through the airport. The airport ranks third in the nation and eleventh in the world in tonnage of domestic and international cargo movement. In 2010, over 35.7 million air travelers were serviced by Miami International Airport, and approximately 1.9 million tons of domestic and international cargo was handled. As of April 2011, 93 airlines serve Miami International Airport, flying passengers to more than 130 destinations around the globe. Currently, Miami International Airport has a $6.4 billion Capital Improvement Program being implemented which include a new runway, terminal, and cargo facility that is scheduled for completion in the winter of 2011.

Port of Miami. The Port of Miami, known as the “cruise capital of the world,” is operated by the Seaport Department of Miami-Dade County. In 2010, more than 4.150 million passengers sailed from the Port of Miami aboard one of the eight cruise companies who operate out of Miami. The Port of Miami is also a hub for Caribbean and Latin American commerce. These countries account for over half of the 7.389million tons of cargo transferred through the Port of Miami in 2010. The Port of Miami is also reaching out to the global community where trade with Asian countries accounted for almost 23% of the total cargo handled at the Port of Miami. The Port of Miami is also important to the U.S. economy, contributing in excess of $17 billion annually, which should increase after the completion of the Port of Miami’s five year, $346 million capital improvement program.

Economy

The economic base of the City has diversified in recent years, shifting from reliance on the tourism industry to a combination of motion picture production, manufacturing, service industries and international trade. The area’s advantages in terms of climate, geography, low taxes and skilled labor have combined to

A-4

make the Miami area a prime relocation area for major manufacturing firms and international corporate headquarters.

The following major companies have their Latin American headquarters located in the City:

The Gap, Inc. Caterpillar Americas Co. Lucent TechnologiesFederal Express Corporation Ericsson, Inc. Barclays Bank PLCABN AMRO Bank Terra Networks USA Oracle Latin AmericaSony Broadcast Export Corporation IBM Corporation Cisco Systems Olympus America Canon Latin America AT&T Latin AmericaExxonMobil Inter-America Acer Latin America Olympus Latin AmericaBlack & Decker Latin America Group Komatsu Latin America Clorox Latin AmericaHewlett Packard Co. Latin America Tech Data American Express Eastman Chemical Latin America Chevron-Texaco Stanley Latin AmericaTelefonica International USA, Inc. Johnson & Johnson

__________________ Source: Beacon Council

Distribution of Major Employment Classifications for Miami-Dade County 2010

Occupational Title Employees

Percentageof Totals

Construction 33,100 3.4% Manufacturing 34,500 3.5 Mining and Natural Resources 300 0.0 Transportation, Warehousing, and Utilities 57,100 5.8 Wholesale Trade 70,100 7.2 Retail Trade 119,700 12.3 Information 16,400 1.7 Finance Activities 61,700 6.3 Professional and Business 131,400 13.4 Education and Health Services 162,500 16.6 Leisure and Hospitality 102,100 10.5 Other Services 47,500 3.8 Government 151,000 15.5

Total Employed 977,400 100.0% Source: Miami-Dade County Department of Planning/Zoning Research Section, December 2010

Labor Force and Employment Statistics Greater Miami Metropolitan Area

Year

Employment Civilian

Labor ForceUnemployment

RateFlorida

Unemployment Rate2006 1,118,704 1,166,002 3.4% 3.4%2007 1,143,548 1,196,086 4.1 4.1 2008 1,142,665 1,212,446 6.1 6.2 2009 1,093,000 1,232,500 11.3 10.8 2010 1,117,000 1,281,900 12.8 11.7

Source: City of Miami, Florida

A-5

Major Employers in Miami-Dade County 2010

Public Employers:

Name Number of Employees Miami-Dade County Public Schools 38,571 Miami-Dade County 29,000 U.S. Federal Government 19,500 Florida State Government 17,100 Jackson Health System 12,571 Florida International University 8,000 Miami-Dade College 6,200 City of Miami 4,309 Homestead Airforce Base 2,700 VA healthcare System 2,385 City of Miami Beach 1,900 City of Hialeah 1,700 U.S. Southern Command 1,600 City of Coral Gables 901 City of North Miami Beach 626

__________________ Source: The Beacon Council/ Miami-Dade County, Florida- Miami Business Profile & Relocation Guide 2011

Private Employers:

Name Number of Employees

University of Miami

16,000

Baptist Health Systems of South Florida 13,376 Publix Supermarkets 10,800 American Airlines 9,000 Precision Response Corp 5,000 Florida Power & Light 3,840 Carnival Cruise Lines 3,500 Winn Dixie Stores 3,400 AT&T 3,100 Mount Sinai Medical Center 3,000 Miami Children’s Hospital 2,800 Sedano’s Supermarket 2,500 Wells Fargo 2,179 Assurant Solutions 2,100 Bank of America 2,000

__________________ Source: The Beacon Council/ Miami-Dade County, Florida-Miami Business Profile & Relocation Guide 2011

A-6

Record of Building Permits, 2003 through 2010 City of Miami, Florida

Fiscal Year

New Commercial

Building Permits

Estimated Cost

Other Commercial

Building Permits

New Residential

Building Permits

Estimated Cost

Other Residential

Building Permits

2004-2005 175 $1,661,488,023 2581 404 $94,411,620 4761 2005-2006 125 2,573,453,643 2582 450 119,113,620 5208 2006-2007 98 1,266,199,562 2816 349 110,732,621 5285 2007-2008 80 1,615,039,791 3218 178 60,467,105 3759 2008-2009 264 128,192,793 3640 259 12,484,788 3346 2009-2010 236 592,111,103 5277 220 16,477,268 2794

___________________ Source: City of Miami, Florida Building Department

Per Capita Personal Income

Year Miami Florida 2005 31,437 35,636 2006 33,712 37,992 2007 36,701 39,078 2008 35,887 39,572 2009 N/A 38,572 2010 N/A 39,230

__________________ Source: (1) City of Miami, Florida (2) Bureau of Economic and Business Research, University of Florida

The City of Miami, Florida

Property Tax Rates

Fiscal Year Tax Roll Year General Operations Debt Service Total City 2001 2000 8.99500 1.2800 10.2750 2002 2001 8.99500 1.2180 10.2130 2003 2002 8.85000 1.2180 10.0680 2004 2003 8.76250 1.0800 9.8425 2005 2004 8.71625 0.9500 9.6663 2006 2005 8.49950 0.7650 9.2645 2007 2006 8.37450 0.6210 8.9955 2008 2007 7.29990 0.5776 7.8775 2009 2008 7.67400 0.6595 8.3335 2010 2009 7.67400 0.9701 8.6441

__________________ Source: City of Miami Comprehensive Annual Financial Report Fiscal Year 2010 and Miami-Dade County Property Appraiser's Office. Note: All millage rates are based on $1 for every $1,000 of assessed value.

A-7

Property Tax Reform

The Florida Legislature initiated a substantial review and reform of Florida's property tax structure. During a special legislative session that ended on June 14, 2007, the Florida Legislature adopted Chapter 2007-321, Laws of Florida, a property tax plan which may significantly impact 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 limits how much the aggregate amount of ad valorem tax revenues may increase in future fiscal years. School districts are not required to comply with these particular provisions of the legislation. A local government may override certain portions of these requirements by a supermajority, and for certain requirements, a unanimous vote.

As a result of the millage rollback, the City's general millage rate was reduced from 8.49950 mills in Fiscal Year 2006-2007 to 8.37450 mills in Fiscal Year 2007-2008. In Fiscal Year 2008-2009, the millage rate was decreased from 8.37450 to 7.29990 mills. The City increased its millage rate in Fiscal Year 2009-2010 was 7.67400 due to the decrease in taxable value. The City maintained the millage rate of 7.67400 for the Fiscal Year 2010-2011.

On January 29, 2008, in a special election held in conjunction with Florida'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" 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" 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. This limitation applies to all taxes, including school district taxes.

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). At this time, it is impossible to estimate with any certainty the level of impact that the constitutional amendments will have on the City, but the impact could be substantial.

A-8

Over the last few years, the Save Our Homes 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 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. The courts in each case have rejected such constitutional arguments and upheld the constitutionality of such provisions; however, there is not assurance that any future challenges to such provisions will not be successful. Any potential impact on the City or its finances as a result of such challenges cannot be ascertained at this time.

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 will, among other things, do the following: (a) allow the 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) beginning in 2010, provide property tax exemption for real property that is perpetually used for conservation; and, for land not perpetually encumbered, require the Legislature to provide classification and assessment of land use for conservation purposes solely on the basis of character or use.

Additionally, during its 2009 session, the Florida Legislature passed House Bill 833, which provides an additional homestead exemption for deployed military personnel. The exemption would equal 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 Legislature. The measure was approved by the voters at the November 2010 General election and took effect 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 City.

The Florida Legislature convened for its 2011 Regular Session on March 8, 2011. During this Regular Session, the Florida Legislature passed House Joint Resolution 381 ("HJR 381"). Among other things, HJR 381 seeks to prohibit the increase of assessed value for property whose fair market value declined over the prior year, reduce the limitation on annual increases of non-homestead property from 10% to 3% and provide an additional homestead exemption for first-time homeowners. Such proposal requires approval by 60% of the voters. At present, it is uncertain if this proposal will be approved by the voters. If approved, the impact of this proposal on the City's finances cannot be accurately ascertained.


A-9

Assessed Valuations CITY OF MIAMI, FLORIDA

NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS

Real Property

Personal Property

Net Assessed

Value

Total Direct Tax Rate

Estimated Actual Value

Net AssessedValue as a

Percentage ofEstimated

Actual

Fiscal Year Ended

September 30, Residential

Property Commercial

Property

2001 $6,000,474,083 $6,113,340,757 $1,657,551,519 $13,771,366,359 10.28 $20,061,032,742 68.65% 2002 6,612,151,524 6,730,517,606 1,770,392,311 15,113,061,441 10.21 22,035,829,555 68.58%

2003 7,679,048,886 7,380,571,799 1,878,266,085 16,937,886,770 10.07 24,759,964,620 68.41%

2004 8,789,474,779 8,369,950,851 1,711,697,688 18,871,123,318 9.84 27,717,908,682 68.08%

2005 10,364,157,774 9,870,433,741 1,695,110,542 21,929,702,057 9.67 32,133,104,422 68.25%

2006 12,959,276,770 12,341,927,389 1,676,173,129 26,977,377,288 9.26 39,120,899,711 68.96%

2007 20,320,801,612 11,038,460,135 1,673,647,599 33,032,909,346 9.00 47,925,276,742 68.93%

2008 24,279,025,389 11,727,240,945 1,749,572,760 37,755,839,094 7.88 55,249,891,635 68.34%

2009 23,572,178,928 11,890,691,413 1,686,320,651 37,149,190,992 8.33 52,185,972,858 71.19%

2010 23,341,894,079 11,921,087,043 1,686,540,244 36,949,521,366 8.64 52,146,883,603 70.86%

Source. Miami-Dade County Property Appraiser's Office. Note: Property in the City is reassessed each year. State law requires the Property Appraiser to appraise property at 100% of market value. The Florida Constitution was amended, effective January 1, 1995, to limit annual increases in assessed value of property with homestead exemption to 3 percent per year or the amount of the Consumer Price Index, whichever is lower. The increase is not automatic since no assessed value shall exceed market value. Tax rates are per $1,000 of assessed value. (1) Includes tax-exempt property.

Property Tax Levies and Collections

CITY OF MIAMI, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS

Collected within the

Fiscal Year of the Levy

Total Collections to Date

Fiscal Year Ended

September 30

Total Taxes Levied for Fiscal Year

Amount

Percent of Levy

Collections in

Subsequent Years

Amount

Percent of Levy

2001 $141,500,789 $131,872,377 93.20% $5,959,373 $137,831,750 97.41% 2002 154,349,696 145,506,737 94.27% 4,079,641 149,586,378 96.91% 2003 170,530,644 161,197,051 94.53% 7,735,274 168,932,325 99.06% 2004 185,739,031 178,766,680 96.25% 1,640,252 180,406,932 97.13% 2005 211,977,983 206,451,562 97.39% 2,379,977 208,831,539 98.52% 2006 249,931,912 243,957,356 96.82% 3,801,414 247,758,770 99.13% 2007 297,147,536 290,449,738 97.76% 7,111,337 297,561,075 100.14% 2008 297,421,622 284,001,962 95.49% 8,489,434 292,491,396 98.34% 2009 309,582,783 296,404,297 95.74% 9,200,940 305,605,237 98.72% 2010 319,395,358 278,010,020 87.04% - 278,010,020 87.04%

Source: City of Miami, Finance Department and Miami-Dade County Tax Collector's Office

A-10

Ten Largest Tax Assessments

CITY OF MIAMI, FLORIDA PRINCIPAL PROPERTY TAXPAYERS

2010

___________________ Source: City of Miami, Florida

Net

Assessed Value

Percent of Total

City Net Assessed

Value Taxpayer Rank Florida Power & Light $437,936,647 1 1.19% 200 S Biscayne TIC 1 LLC 290,700,000 2 0.79% Crescent Miami Center 196,500,000 3 0.53% Bellsouth Telecommunications 186,796,701 4 0.51% T C 701 Brickell LLC 172,900,000 5 0.47% 1111 Brickell Office LLC 146,100,000 6 0.40% Trustees of L&B 117,400,000 7 0.32% Opera Tower LLC 112,499,679 8 0.30% Estoril Incorporated 107,400,000 9 0.29% Blue Capital US East 99,500,000 10 0.27%

$ 1,867,733,027 5.05%

Total Net Assessed Value $ 36,949,521,366 100%

A-11

Overlapping Debt

CITY OF MIAMI, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT

AS OF SEPTEMBER 30, 2010

Government Unit Net Debt

Outstanding

Percentage Applicable to the City of Miami(1)

Amount Applicable to the City of Miami

Debt Repaid With Property Taxes Miami-Dade County $ 839,095,804 19.00% $ 159,428,203 Miami-Dade County School Board 348,100,000 19.00% 66,139,000 Subtotal, Overlapping Debt 225,567,203 City of Miami, Florida Direct Debt (excludes special obligation, revenue bonds, loans and capital leases)

265,804,455

Total Direct and Overlapping Debt $ 491,371,658

Sources: Data provided by the Miami-Dade County Finance Department and the Miami-Dade County School Board.

Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Miami. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.

(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Value that is within the City's boundaries and dividing it by the County's and School Board's total taxable assessed value. This approach was also used for the other debt.

CITY OF MIAMI, FLORIDA FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010

SUMMARY OF DEBT RATIOS, MEASUREMENTS AND DEBT CONSTRAINTS CRITERIA

Debt Ratios

General Obligation & Limited Ad Valorem Debt Per Capita 665.52 General Obligation & Limited Ad Valorem Debt as a Percentage

of Taxable value 0.510% Non-Self Supporting Revenue Debt Per Capita 1,023.60 Non-Self Supporting Revenue Debt as a Percentage of Taxable Assessed value 1.11% General Governmental Debt Service (non-self-supporting) as a Percentage of

Non-Ad Valorem General Fund Expenditures 9.76% General Government Direct Debt Per Capita 665.52 Net Direct Debt as a Percentage of Taxable Assessed Value 1.11% General Government Debt Service as a Percentage of Non-Ad Valorem

General Fund Revenues 10.76% Source: City of Miami Finance Department

[THIS PAGE INTENTIONALLY LEFT BLANK]

B-1

APPENDIX B

PENSION PLANS

The information relating to the Plans (defined herein) relies on information produced by the Plans and their independent accountants and actuaries. The actuarial assessments are forward-looking information that reflects the judgment of the fiduciaries of the Plans. Actuarial assessments are based upon a variety of assumption, one or more of which may prove to be inaccurate or be changed in the future, and will change with future experience of the Plans. General

The City sponsors separate single-employer, defined benefit pension plans under the administration

and management of separate Boards of Trustees: the City of Miami Fire Fighters and Police Officers Retirement Trust ("FIPO"), the City of Miami General Employees and Sanitation Employees Retirement Trust ("GESE") and Other Managed Trusts, and the City of Miami Elected Officers Retirement Trust ("EORT" and together with FIPO and GESE, the "Plans").

Basis of Accounting. The financial statements for the Plans are prepared using the accrual basis of

accounting. All plans are reported as pension trust funds in the City's financial statements. Plan member contributions are recognized in the period which the contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plans.

Method Used to Value Investments. Investments of the Plans are recorded at fair market value.

Securities traded on a national exchange are valued at the last reported sales price on the last business day of the fiscal year. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the last reported bid price. Commercial paper, time deposits, and short-term investment pools are valued at fair market value and mortgages are valued based on current market yield which approximate fair value. Net appreciation (depreciation) in fair value of investments includes realized and unrealized gains and losses. Interest and dividends are reported as investment earnings. Realized gains and losses on the sale of investments are based on average cost.

FIPO

Plan Description. FIPO is a single-employer, defined benefit plan established by the City pursuant to the provisions and requirements of Ordinance No. 10002 as amended. Participants are contributing police officers and firefighters with full-time employment status it the Police or Fire Department of the City.

As of October 1, 2009, the date of the most recent actuarial valuation, membership in the FIPO

consisted of 1,758 retired members and beneficiaries and 196 disabled members currently receiving benefits and 20 terminated vested members entitled to benefits but not yet receiving them; current active employees equaled 1,517 as of that date.

Pension Benefits. Effective October 1, 1998, members may elect to retire after 10 or more years of

creditable service upon attainment of normal retirement age. The normal retirement age for members is 50 years of age. A member exercising normal service retirement or rule of 64 retirement, that is, a computation of service retirement on the basis of his or her combined age and creditable service equaling 64, (the "Rule of

B-2

64") are entitled to receive a retirement allowance equal to 3% of the member's average final compensation multiplied by the years of creditable service for the first 15 years of such creditable service and 3.5% of average final compensation for years of creditable service in excess of 15 years, payable in monthly installments. For members employed prior to March 8, 1984, the average final compensation is based on the annual earnable compensation during the last year of the highest one year compensation, whichever is greater, and for members employed after March 8, 1984, the average final compensation is based on the annual earnable compensation during the last two year, or the highest two year compensation, whichever is greater. Early retirement after 20 years of service is available.

Effective October 1, 2009, the rule of 68, that is, a computation consisting of the sum of a member's

age and length of creditable service, which sum shall permit normal service retirement upon the member's combined age and creditable service equaling to at least 68 (the "Rule of 68"), will only apply to firefighter members whose combined age and length of creditable service were less than 64 on September 30, 2009.

Benefits for disability and death are also provided under the FIPO. For a non-accidental disability, a

member with 10 or more years of creditable service will receiver 90% of their benefit rate times their average final compensation times creditable service, with a minimum benefit of 30% of their average final compensation. For an accidental death in the performance of duties, a member is entitled to 66 2/3% of their average final compensation or final compensation, whichever is greater. For a non-accidental death in the performance of duties a member (a) with between three and 10 years of creditable service will receive a lump sum benefit equal to 50% of compensation received in the year preceding his or her death; (b) with 10 years or more of creditable service and before eligibility for early retirement or Rule of 64 retirement will receive his or her accrued benefit deferred to the earlier of the member's 50th birthday or Rule of 64 eligibility, payable for 10 years; and (c) eligible for normal retirement, early retirement or Rule of 64 retirement will be considered to have retired on the date of death and the surviving spouse would receive 4% of the member's monthly retirement. For an accidental death in the performance of duties (a) a member's spouse will receive 50% of the average final compensation until his or her death or remarriage, or if there is no spouse or the spouse dies or remarries before the youngest child is 18 years of page, the member's benefits are payable until the child attains the age of 18, or if there is no spouse or no children under the age of 18, the member's benefits are payable to his or her dependent parents; (b) a member with more than 10 years of creditable service and before he or she is eligible for early retirement or Rule of 64 retirement, the member's accrued benefits are deferred to the earlier of the member's 50th birthday or Rule of 64 eligibility, payable for 10 years.

Cost of Living Adjustment. Effective January 1, 1994, the FIPO Trust entered into an agreement with

the City with regards to the funding methods, employee benefits, employee contributions and retiree cost of living adjustment ("COLA"). Pursuant to the agreement, members no longer contribute to the original COLA account ("COLA I") and a new COLA account ("COLA II") was established. The agreement included the following: (a) the funding method was changed to an aggregate cost method; (b) all accounts were combined for investment purposes (membership and benefits, COLA I, and COLA II); (c) retirees receive additional COLA benefits; and (d) active members no longer contribute 2% if pretax earnings to fund the original retiree COLA I account.

The COLA II account is funded annually by a percentage of the excess investment return from the

COLA I account assets. The excess earnings contributed to the COLA II account are used to fund a minimum annual payment of $2.5 million, increasing by 4% compounded annually. To the extent necessary, the City will fund the portion of the minimum annual payment not funded by the annual excess earnings no later than January 1 of the following year. The City has not had to fun the COLA II since fiscal year 2005.

B-3

Historical Funding Progress COLA Fund

(in $ millions)

Fiscal Year

(1) (2) (3) (4) (5)

Net Assets Available for

Benefits(1)

Pension Benefit

Obligation (PBO)(2)

Percent Funded

Unfunded PBO

(2)-(1)

Annual Covered Payroll

Unfunded PBO as

Percentage of Covered

Payroll (4)/(5) 2000 $ 220.5 $ 137.0 161% $(83.5) $84.3 (99)% 2001 195.0 158.4 123 (36.6) 89.7 (41) 2002 174.1 164.5 106 (9.6) 96.9 (10) 2003 194.8 165.1 118 (29.7) 98.9 (30) 2004 210.3 185.7 113 (24.7) 89.2 (28) 2005 231.6 195.0 119 (36.6) 91.5 (40) 2006 249.0 216.8 115 (32.2) 90.4 (36) 2007 300.2 242.9 124 (57.3) 103.6 (55) 2008 305.8 279.4 109 (26.4) 129.4 (20) 2009 296.3 290.0 102 (6.3) 122.2 (5)

Source: City of Miami Fire Fighters' and Police Officers' Retirement Trust October 1, 2009 Actuarial Report prepared by Stanley, Holcombe & Associates, Inc. (1) Excluding future City minimum contributions. (2) Excluding new increment, contingency reserves and reserves for future actives.

Benefits payable from the COLA accounts are computed in accordance with an actuarially based formula as defined in Section 40.204 of the City Code. Benefits are subject to review and modification in accordance with such Code section, which provides that all other matters regarding the COLA accounts shall be determined by negotiations between the City, the FIPO Board of Trustees and the bargaining representatives of the International Association of Fire Fighters (the "IAFF") and the Fraternal Order of the Police (the "FOP").

Deferred Retirement Option Plan. Members who are eligible for normal retirement or Rule of 64

retirement after September 1998 may elect to enter the deferred retirement option plan (the "DROP"). Upon election of participation, a member's creditable service, accrued benefits, and compensation calculation are frozen and the DROP payment is based on the member's average final compensation. The member's contribution and the City contribution to the retirement plan for that member ceases as no further service credit is earned. The member does not acquire additional pension credit for the purposes of the pension plan, but may continue City employment for a maximum of 36 months prior to October 1, 2001. Effective October 1, 2001, maximum participation in the DROP for firefighters shall be 48 full months and for police officers who elect the DROP on October 1, 2003, or thereafter, maximum participation in the DROP shall be 48 full months. Effective July 24, 2008, firefighter DROP participants may also continue City employment for up to 54 full months (48 full months prior to July 24, 2008 and 36 full months prior to October 1, 2001). Police officers who elect the DROP on or after May 8, 2008, may continue City employment for up to 84 full months (48 full months prior to May 8, 2008 and 36 full months prior to October 1, 2003). Once the maximum participation has been achieved, the participant must terminate employment.

There are two DROP programs: the Forward DROP and the Benefit Actuarially Calculated DROP

("BACDROP"). A member can participate in both programs simultaneously. The Forward DROP is a DROP benefit equal to the regular retirement benefit the member would have received had the member separated

B-4

from service and commenced the receipt of benefits from the plan. The BACDROP is a DROP benefit actuarially calculated. A member may elect to BACDROP to a date, no further back than the date of the member's requirement eligibility date. The BACDROP period must be in 12 month increments, beginning at the start of a pay period, not to exceed 48 full months for firefighters (36 months prior to October 1, 2001) and for police officers who elected BACDROP on October 1, 2003 (36 months prior to October 1, 2003). The benefits of the BACDROP will then be actuarially calculated to be the equivalent to the benefit earned at the date of retirement.

An individual account is created for each participant. A series of investment vehicles, as established

by FIPO's Board of Trustees, are made available to DROP participants to choose from. Any losses incurred on account of the option selected by the participant will not be made up by the City or the FIPO Trust, and will be borne by the participant only. All interest will be credited to the member's account. Upon termination of employment, a participant may receive payment from the DROP account in a lump sum distribution; or periodic payments. A participant may elect to rollover the balance to another qualified retirement plan, individual retirement account, an Internal Revenue Code Section 457 Plan, or an annuity. A participant may defer payment until the latest date authorized by Section 401(a)(9) of the Internal Revenue Code. DROP participation will not affect any other death or disability benefit provided under law or applicable collective bargaining agreement. If a participant dies before the account balances are paid out in full, the beneficiary will receive the remaining balance.

Participants in the DROP are not entitled to receive an ordinary or service disability retirement and in

the event of death of a DROP participant, there is no accidental death benefit for pension purposes. Participation in the DROP does not affect any other death or disability benefit provided to a member under federal law, state law, City ordinance, or any rights or benefits under any applicable collective bargaining agreement.

Contributions and Funding Policies. Police officer members of FIPO are required to contribute 7% of

their salary on a bi-weekly basis, whereas firefighter members are required to contribute 9% (8% prior to October 1, 2009) of their salary on a bi-weekly basis. The City is required to contribute such amounts annually as necessary to maintain the actuarial soundness of FIPO and to provide FIPO with assets sufficient to meet the benefits to be paid to participants. Contributions to FIPO are authorized pursuant to City Code Sections 40.196(a) and (b). Contributions to the FIPO COLA accounts are authorized pursuant to section 40.204 of the City Code. The City's contributions to FIPO provide for non-investment expenses and normal costs. The yield on investments on FIPO serves to reduce future contributions that would otherwise be required to provide for the defined level of benefits under the FIPO Trust.

The payroll for employees covered by FIPO for the year ended September 30, 2010 was

approximately $122.2 million; the City's total payroll was approximately $298.5 million.


B-5

Annual Pension Cost. The City's current year contribution was determined through an actuarial valuation performed as of October 1, 2009. Significant actuarial assumptions used to compute the annual requirement are as follows:

Valuation date: October 1, 2009

Actuarial cost method: Aggregate Cost Method Amortization method: Not Applicable Amortization method: Not Applicable

Asset valuation method: 20% Write-Up Method: expected value is based on the interest discount/investment return rate applied to the actuarial asset value as of previous valuation date and cash flow during the year. 20% of the difference between expected value and the market value (net of pending transfers to the COLA accounts) is added to the expected value. The result cannot be greater than 120% of market value or less than 80% of market value (net of pending COLA transfers).

Investment rate of return: 7.50%, compounded annually Projected salary increases due to inflation: 3.25%

Seniority/merit: 5.00% to 0% reducing by attained age Promotion/other 1.50%

Mortality table: Ga94- Mortality Table Mortality, disability, retirement and turnover: Pension Benefit Guaranty Corporation ("PBGC") Non-OASDI

basis rate tables Source: City of Miami Fire Fighters' and Police Officers' Retirement Trust October 1, 2009 Actuarial Report prepared by Stanley, Holcombe & Associates, Inc.

FIPO contributions are determined using the aggregate cost method. The aggregate cost method does not identify and separately amortize the unfunded actuarial liabilities. The annual pension cost is equal to the annual required contribution each year.

Annual Employer Contributions

Excluding COLA Fund

Fiscal Year Annual Pension Cost Percentage Contributed Net Pension Obligation 2001 $ 4,003,892 100% $0.00 2002 1,051,629 100 0.00 2003 18,163,588 100 0.00 2004 36,341,515 100 0.00 2005 45,545,130 100 0.00 2006 50,635,213 100 0.00 2007 40,542,078 100 0.00 2008 36,040,251 100 0.00 2009 36,993,395 100 0.00 2010 55,095,791 -- --

Source: City of Miami Fire Fighters' and Police Officers' Retirement Trust October 1, 2009 Actuarial Report prepared by Stanley, Holcombe & Associates, Inc.

The funding policy provides for periodic employer contributions at actuarially determined rates that

are sufficient to pay benefits when due. Contributions for normal costs are determined using the aggregate actuarial cost method. This cost method does not provide for an unfunded actuarial accrued liability. Since

B-6

the FIPO uses the aggregate cost method, technically no schedule of funding progress is required. However, such schedule may be prepared using another acceptable cost method. The schedule of funding progress for the FIPO is prepared using the Entry Age Normal Actuarial Accrued Liability.

Contributions totaling $46,762,534 ($36,993,395 employer contribution and $9,769,139 employee

contribution) were made for the year ending September 30, 2009. These contributions consisted of $46,762,534 normal cost, (b) $0 amortization of unfunded actuarial accrued liability and (c) $0 noninvestment expenses. As of October 1, 2009, the entry age reserve ("EAR") is $1,539.3 million. This compares to assets of $970.8 million for a funded ratio of 63%. Last year the funded ratio was 70%.

Historical Funding Progress Excluding COLA Fund

(in $ millions)

Fiscal Year

(1) (2) (3) (4) (5)

Net Assets Available for

Benefits EAR Percent Funded

Unfunded EAR

(2)-(1)

Annual Covered Payroll

Unfunded EAR as

Percentage of Covered

Payroll (4)/(5) 2000 $ 994.6 $ 863.4 115% $(131.2) $84.3 (156)% 2001 828.9 932.7 89 103.8 89.7 116 2002 753.2 999.8 75 246.6 96.9 254 2003 844.9 1,062.9 79 223.0 98.9 225 2004 957.9 1,152.8 83 194.9 89.2 218 2005 1,091.9 1,221.6 89 129.7 91.5 142 2006 1,147.9 1,260.5 91 112.6 90.4 125 2007 1,268.9 1,318.4 96 49.5 103.6 48 2008 1,018.9 1,452.5 70 433.6 129.4 335 2009 970.8 1,539.3 63 568.5 122.2 465


The rate of return on the mean market value for the period ending September 30, 2009 was (0.3%), as compared to the 7.75% assumption. The asset valuation method results in an actuarial asset value of $1.165 billion as of October 1, 2009, as compared to the market value of $970.8 million. The following is a table of the investment income earned on the assets for the past ten years (excluding COLA Fund):

Fiscal Year Investment Income 2000 $129,752,337 2001 17,717,791 2002 (27,704,711) 2003 30,466,098 2004 53,963,150 2005 71,904,910 2006 71,669,124 2007 82,937,630 2008 62,728,078


B-7

GESE

The Board of Trustees of the GESE administers three defined benefit pension plans: (a) the GESE; (b) an Excess Benefit Plan for the City of Miami (the "EBP"); and (c) General Employees and Sanitation Employees Retirement Trust Staff Pension Plan (the "Staff Trust"). Each plan's assets may be used only for the payment of benefits to the members of that plan, in accordance with the terms of the plan.

GESE. Plan Description. The GESE is a single-employer defined benefit plan. The GESE was established

pursuant to the City Ordinance No. 10002 and subsequently revised under City Ordinance No. 12111. The GESE covers all City general and sanitation employees except certain employees eligible to decline membership. Participation in the GESE is a mandatory condition of employment for all regular and permanent employees other than fire fighters, police officers, and those eligible to decline membership, as defined by the Ordinance.

At October 1, 2010, the date of the most recent actuarial report, membership in the GESE consisted of

1,762 retired members, 381 beneficiaries and 57 disabled members currently receiving benefits and 152 terminated vested and inactive members entitled to benefits but not yet receiving them; current active employees equaled 1,294 as of that date.

Pension Benefits. The minimum normal retirement age is 55. A member who has completed a

combination of at least 10 or more years of creditable service plus attained an age equaling 70 points may elect a rule of 70 retirement (the "Rule of 70"). Any member in service who has 10 or more years of continuous creditable service may elect to retire upon attainment of normal retirement age. Subsequent to September 30, 2010 for members not eligible to retire as of that date, the retirement age and service will change to age 55 and 30 years of creditable service or age 60 and 10 years of continuous creditable service or a combination of at least 10 years of creditable service plus attained age equaling 80 points (the "Rule of 80"). Early retirement after 20 years of service is available.

Retirement benefits are generally based on 3% of the average final compensation multiplied by years

of creditable service, which is paid annually in monthly installments. For service after September 30, 2010, for members not eligible to retire as of that date, benefits are based on 2.25% of average final compensation multiplied by creditable service up to 15 years, 2.5% of average final compensation for 15 to 20 years of service and 2.75% for service over 20 years. Effective September 30, 2010, for members not eligible to retire on that date, member retirement allowances shall not exceed the lesser of 100% of the member's average final compensation or an annual retirement allowance of $100,000.

Members eligible to receive accumulated sick and vacation leave from the City are able to transfer the

amount to an eligible retirement plan. The GESE facilitates the transfer of accumulated sick and vacation leave to any eligible retirement plan and is pursuant to City Code Section 40-266.

Benefits for disability and death are also provided under the GESE. For an ordinary disability, a

member with 10 or more years of creditable service will receive 90% of their benefit rate times their average final compensation times creditable service, with a minimum benefit of 30% of their average final compensation. For an accidental service incurred disability, a member is entitled to 66 2/3% of their average final compensation or final compensation, whichever is greater. For a service incurred disability, a member is entitled to the greater of 90% of the product of the benefit multiplier in effect at the time the service is earned

B-8

multiplied by the number of years of credited service or 40% of the member's final average compensation. For an ordinary death a member is entitled to a lump sum payment of accumulated contributions plus 50% of compensation during the year immediately preceding death, if the member has completed three years of creditable service. For an accidental death while in the performance of his or her duties a member is entitled to 50% of average final compensation plus a lump sum payment equal to accumulated contributions. Any member who is eligible for normal, early or Rule of 70 retirement who dies prior to actual retirement and whose spouse elects not to receive a payment of the member's accumulate contributions, if the member is eligible for retirement on September 30, 2010, the spouse will receive 40% of the sum of the member's basic retirement benefit calculated as if the member had attained age 55 and retired on the date of death. Additionally, the spouse will receive 50% of the member's compensation during the year immediately preceding death. If the member is not eligible for retirement on September 30, 2010, the spousal benefit will be based on the optional form of payment elected by the member. If the member has not elected an optional allowance, the spouse will receive the 40% survivor benefit actuarially reduced. A retired member who dies prior to having received 12 monthly retirement payments and prior to having an optional allowance becoming effective will have a lump sum equal to the excess, if any, of 12 times the monthly payments over the actual payments received paid to his designated beneficiary.

Cost of Living Adjustment. Effective October 1, 1998, the GESE was amended to provide for an increase

in the COLA paid to retirees to 4% with a $400 annual maximum increase, provided the retiree's first anniversary of retirement has been reached. The amendment also provided for retirees electing the return of their contribution option to receive a minimum COLA benefit of $27 per year and a maximum COLA benefit of $200 added to the previous COLA benefit, provided the retiree's first anniversary of retirement has been reached.

Deferred Retirement Option Plan. The GESE made the DROP available to all GESE members effective

May 1, 2002. Any employee who is eligible for regular retirement or Rule of 70 retirement is eligible to participate in the DROP. Upon election of participation, a member's creditable service, accrued benefits, and compensation calculations are frozen and the DROP payment is based on the member's average final compensation. The member's contribution and the City contribution to the retirement plan for that member ceases as no further service credit is earned. The member does not acquire additional pension credit for the purposes of the pension plan, but may continue City employment for a maximum of 48 months. Once the maximum participation has been achieved, the participant must terminate employment.

There are two DROP programs: the Forward DROP and the BACDROP. A member can participate in

both programs simultaneously. The Forward DROP is a DROP benefit equal to the regular retirement benefit the member would have received had the member separated from service and commenced the receipt of benefits from the plan. The BACDROP is a DROP benefit actuarially calculated. A member may elect to BACDROP to a date, no further back than the date of the member's requirement eligibility date. The BACDROP period must be in 12 month increments, beginning at the start of a pay period, not to exceed 48 months.

An individual account is created for each participant. A series of investment vehicles, as established

by GESE's Board of Trustees, are made available to DROP participants to choose from. Any losses incurred on account of the option selected by the participant will not be made up by the City or the GESE, and will be borne by the participant only. All interest will be credited to the member's account. Upon termination of employment, a participant may receive payment from the DROP account in a lump sum distribution; or periodic payments. A participant may elect to rollover the balance to another qualified retirement plan, individual retirement account, an Internal Revenue Code Section 457 Plan, or an annuity. A participant may

B-9

defer payment until the latest date authorized by Section 401(a)(9) of the Internal Revenue Code. DROP participation will not affect any other death or disability benefit provided under law or applicable collective bargaining agreement. If a participant dies before the account balances are paid out in full, the beneficiary will receive the remaining balance.

Contributions and Funding Policies. Members of the GESE are required to contribute 10% of their salary

on a bi-weekly basis. The contribution rate was increased to 13% of base salaries or wages for its union members for the year ended September 30, 2010. The GESE's funding policies provide for periodic contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are sufficient to maintain the actuarial soundness of the GESE and to accumulate sufficient assets to pay benefits when due. The City is required to contribute an actuarially determined amount that, when combined with participants' contributions, will fully provide all benefits as they become payable. Contributions to the GESE are authorized pursuant to City Code Sections 40-241(a) and (b). Contributions from the City are designed to fund the GESE's non-investment expenses and normal costs and to fund the unfunded actuarial accrued liability. The yield (interest, dividends and net realized and unrealized gains and loses) on investment of the GESE serves to reduce or increase future contributions that would otherwise be required to provide for the defined level of benefits under the GESE.

The payroll for employees covered by the GESE for the year ended September 30, 2010 was

approximately $90.1 million; the City's total payroll was approximately $298.5 million. After taking into account expected member contributions, the total required contribution from the City is $24,724,977 or 36.32% of covered payroll, for the 2012 fiscal year payable on October 1, 2011. In comparison, the required contribution for the 2011 fiscal year was $20,092,441, or 21.66% of covered payroll. There was a large investment loss during the year, and a large actuarial loss due to more retirements than expected occurring between the October 1, 2009 and the October 1, 2010 valuations.

Annual Pension Cost. The City's current year contribution was determined through an actuarial valuation performed as of October 1, 2010. Significant actuarial assumptions used to compute the annual contribution requirement are as follows:

Valuation date: October 1, 2009 Actuarial cost method: Modified Entry Age Normal Amortization method: Level percent, closed Amortization method: 8 to 19 years

Asset valuation method: 5-Year Smooth Market Investment rate of return*: 8.10% Projected salary increases*: 5.25%

Payroll Growth: 3.00% *Includes inflation at 3.50%

Cost of living adjustments: 4% per year, with $54 per year minimum and $400 per year maximum

Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC. GESE contributions are determined using the entry age normal cost method with frozen actuarial accrued liability. The annual pension cost is equal to the annual required contribution each year.

B-10


Fiscal Year Annual Pension Cost Percentage Contributed Net Pension Obligation 2004 $10,669,846 100% 0.00 2005 19,003,415 100% 0.00 2006 22,018,443 100% 0.00 2007 24,229,028 100% 0.00 2008 22,762,902 100% 0.00 2009 23,191,828 100% 0.00 2010 24,037,093 100% 0.00

Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC.

The GESE's unfunded liability was projected to be $126,832,079 as of October 1, 2010, taking into account expected contributions from the City of $20,092,441 based on the October 1, 2009 valuation. The actual unfunded liability is $187,871,210. The increase of $61,039,131 in the unfunded liability is primarily due to an actuarial asset return of 5.48% compared to the expected 8.10% return, compounded by losses due to more retirements than expected. The total increase in City contribution to amortize the unfunded liability is $6,610,643 per year.


B-11

Historical Funding Progress (in $ millions)

Actuarial Valuation

Date (October 1)

(a) (b) (b) - (a) (a)/(b) (c) [(b) - (a)]/(c)

Actuarial Value of Assets

Actuarial Accrued Liability (AAL)

Unfunded AAL (UAAL) Funded Ratio

Annual Payroll

UAAL as Percent of

Annual Payroll

2001 $ 597.1 $ 579.4 $ (17.7) 103.06% $ 66.7 (26.60)% 2002 561.3 617.8 56.5 90.85 70.4 80.31 2003 555.5 682.4 126.9 81.41 70.7 179.42 2004 564.6 709.9 145.4 79.53 72.5 200.43 2005 588.5 746.3 157.8 78.85 71.5 220.79 2006 618.5 732.0 113.5 84.49 75.6 150.16 2007 664.1 770.2 106.1 86.23 82.1 129.28 2008 691.8 808.6 116.8 85.55 91.0 128.42 2009 645.6 780.6 135.0 82.70 90.0 149.94 2010 653.0 840.9 187.9 77.66 68.8 273.22

Source: For valuation dates 2001-2002, City of Miami, Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2007. For valuation dates 2003-2010, City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC.

Present Value of Accrued Benefits and Market Value of Assets

Fiscal Year Interest Rate Assumption

Present Value of Accrued Benefits(1)

Market Value of Assets Funded Ratio

2001 8.10% $ 496,990,860 $ 551,197,253 110.90% 2002 8.10 516,434,721 467,725,075 90.60 2003 8.10 578,712,725 516,813,945 89.30 2004 8.10 605,934,834 546,454,226 90.20 2005 8.10 647,824,031 586,943,151 90.60 2006 8.10 650,607,217 623,992,356 95.90 2007 8.10 683,690,757 694,302,333 101.60 2008 8.10 714,893,783 576,492,500 80.64 2009 8.10 742,076,105 538,012,201 72.50 2010 8.10 800,285,084 553,797,518 69.20

Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC. (1) The cost method used for determining the present value of accrued benefits is unit credit. Calculations are based on current service and current salaries as of the valuation date. The present value of accrued benefits is defined by participants' accumulated plan benefits as those future benefit payments that are attributable under the plan's provisions to employees' service rendered to the benefit information date. Their measurement is primarily based on employees' history of pay and service and other appropriate factors as of that date. Future salary changes are not considered. Future years of service are considered only in determining employees' expected eligibility for particular types of benefits, for example, early retirement, death and disability benefits. To measure their actuarial present value, assumptions are used to adjust those accumulated plan benefits to reflect the time value of money (through discounts for interest) and the probability of payment (by means of decrements such as for death, disability, withdrawal or retirement) between the benefit information date and the expected date of payment. An assumption of an ongoing plan underlies those assumptions.


B-12

The rate of return on the market value for the period ending September 30, 2010 was 8.20, as compared to the 8.10% assumption. The asset valuation method results in an actuarial asset value of $645.6 million as of September 30, 2010, as compared to the market value of $538 million. The following is a table of the investment income earned on the assets for the past ten years:

Fiscal Year Investment Income 2001 $(63,285,461) 2002 (53,892,226) 2003 79,765,973 2004 55,410,170 2005 63,303,292 2006 59,921,495 2007 91,851,585 2008 (94,751,747) 2009 (16,473,559) 2010 45,195,934

Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC.

Recent Benefit and Member Contribution Changes. Below is a summary of the benefit and member contribution changes adopted by the City effective September 30, 2010 and reflect in the prior and current valuation.

(a) Benefit multiplier: 3% for current service plus service graded for future service – 2.25% first 15 years; 2.5% for years 16-20; 2.75% for service over 20 years. Current members enter graded formula at current service level. The revised benefit multiplier schedule is used in the calculation of the normal, early, deferred and disability retirement benefits, where applicable.

(b) Average final compensation: Five year average pay for all years of service. Phase in from two to five year average pay over the next 3 years. The average final compensation shall not be less than the average final compensation as of the date of the plan change.

(c) Normal retirement date: Unreduced retirement at earlier of age 55 and 30 years of service, age 60 and 10 years of service, or Rule of 80.

(d) No benefit changes for current members who are eligible to retire (that is, meet the Rule of 70 or age 55 and 10 years of service) as of the effective date of the plan changes.

(e) Maximum benefit: maximum annual benefit at retirement is lesser of average final compensation and $100,000. Cost-of-living increases are applied to the benefit after retirement. Normal benefit form: life annuity as normal form of payment. Other actuarial equivalent options will be available.

In no event will the revised benefits be less than the member's accrued benefit as of the effective date of the plan changes, that is, September 30, 2010. In addition to the member contributions to the GESE will increase from the current 10% of pay to 13% of pay.

GESE EBP

Plan Description. In July 2000, the City, pursuant to applicable Internal Revenue Code provisions, established a qualified governmental excess benefit plan to continue to cover the difference between the allowable pension to be paid and the amount of the defined benefit so the benefits for eligible members are not diminished by changes in the Internal Revenue Code. The GESE Board of Trustees administers the excess

B-13

benefit plan. GESE members are not required to contribute to the EBP. Members of the GESE participate in this plan.

At October 1, 2010, the date of the most recent actuarial report, membership in the EBP consisted of 34 retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them. There are no current employees in the plan.

Contributions and Funding Policies. The payment of the City's contribution of excess retirement benefits for eligible members of the GESE above the limits permitted by the Internal Revenue Code is: (a) funded from the City's General Fund; (b) paid annually concurrently with the City's annual contribution to normal pension costs which causes the City to realize a reduction in normal pension costs in the same amount; and (c) deposited in a separate account established specifically for the GESE to receive the City's excess retirement benefit contributions. This account is separate and apart from the accounts established to receive the City's normal pension contributions for the GESE. The City is required to contribute as benefits become payable.

The payroll for employees covered by the EBP for the year ended September 30, 2010 was approximately $90.1 million; the City's payroll was approximately $298.5 million.

Annual Pension Cost and Net Pension Obligation. The EBP is an unfunded plan; however if the City were to fund the EBP on the same actuarial basis as the GESE, the annual contribution for October 1, 2011 is $585,357. This contribution represents 0.85% of the active members' payroll of $68,762,827 as of October 1, 2010. The unfunded actuarial accrued liability of 5,704,602 as of October 1, 2010 is amortized over 20 years from that date. Note that the illustrative annual contribution determined as of October 1, 2009 is $625,539 or 0.69% of payroll.

The City's current year contribution was determined through an actuarial valuation performed as of October 1, 2010. Significant actuarial assumptions used to compute the annual contribution requirement are as follows:

Valuation date: October 1, 2010 Actuarial cost method: Modified Entry Age Normal Amortization method: Level dollar, closed

Remaining amortization period: 20 years Asset valuation method: Not applicable

Investment rate of return*: 8.10% Projected salary increases*: 5.25%

Payroll Growth: 3.00% *Includes inflation at 3.50%

Source: City of Miami General Employees' and Sanitation Employees' Excess Benefit Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC. EBP contributions are determined using the entry age normal cost method with frozen actuarial accrued liability.


B-14


Fiscal Year Annual Required

Contribution Contribution Made Percentage

Contributed (Excess)/Deficiency 2005 $818,446 $475,076 58.05% $343,370 2006 824,766 463,126 56.15 361,640 2007 823,371 476,252 57.84 347,119 2008 898,149 446,916 49.76 451,233 2009 566,046 464,325 82.03 101,721 2010 625,539 339,602 54.29 285,937 2011 585,357 -- -- --

Source: City of Miami General Employees' and Sanitation Employees' Excess Benefit Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC.

Historical Funding Progress (in $ millions)

Actuarial Valuation

Date (October 1)

(a) (b) (b) - (a) (a)/(b) (c) [(b) - (a)]/(c)



Unfunded AAL (UAAL) Funded Ratio

Annual Payroll

UAAL as Percent of

Annual Payroll

2001 $ 0.0 $ 9.3 $ 9.3 0.00% $ 66.7 13.93% 2002 0.0 8.6 8.6 0.00 70.4 12.28 2003 0.0 9.9 9.9 0.00 70.7 14.04 2004 0.0 8.4 8.4 0.00 72.5 11.63 2005 0.0 8.4 8.4 0.00 71.5 11.75 2006 0.0 8.0 8.0 0.00 75.6 10.58 2007 0.0 8.6 8.6 0.00 82.1 10.48 2008 0.0 5.2 5.2 0.00 91.0 5.66 2009 0.0 5.8 5.8 0.00 90.0 6.48 2010 0.0 5.7 5.7 0.00 68.8 8.30

Source: For valuation dates 2001-2003, City of Miami, Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2007. For valuation dates 2004-2010, City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC.

The City's annual pension cost and net pension obligation to the EBP is as follows:

Fiscal Year 2010 Fiscal Year 2011 Annual required contribution (ARC) $ 625,539 $ 585,357 Interest on net pension obligation (NPO) 347,600 363,948 Adjustment to ARC (431,711) (461,052) Annual Pension Cost $ 541,428 $ 488,253 Contributions made (339,602) -- Increase in NPO $ 201,826 -- NPO, beginning of year 4,291,360 -- NPO, end of year $ 4,493,186 --

Source: City of Miami General Employees' and Sanitation Employees' Excess Benefit Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC.

B-15

Staff Trust

Plan Description. The Staff Trust is a single-employer, defined benefit plan. The Staff Trust was established by the rule-making authority of the GESE, pursuant to Chapter 40 of the City Code. The Staff Trust covers all administrative full-time employees and other positions as may be named by the Board of Trustees. Participation in the Staff Trust is a mandatory condition of employment for all full-time employees, other than those eligible to decline membership.

At October 1, 2010, the date of the most recent actuarial report, membership in the Staff Trust had no retirees and beneficiaries currently receiving benefits; one terminated employee entitled to benefits, but not yet receiving them and 11 current employees.

Pension Benefits. Any member who has 10 or more years of continuous creditable service may elect to retire, regardless of age. Retirement benefits are generally based on 3% of the average final compensation during the highest two years of membership service multiplied by years of creditable service, which is paid annually in monthly installments.

Contributions and Funding Policies. Members of the Staff Trust are required to contribute 10% of their salary on a bi-weekly basis. The funding policies of the Staff Trust provide for periodic contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are sufficient to maintain the actuarial soundness of the Staff Trust and to accumulate sufficient assets to pay benefits when due. The City is required to contribute an actuarially determined amount that, when combined with member contributions, will fully provide all benefits as they become payable. The yield (interest, dividends and net realized and unrealized gains and losses) on investments of the Staff Trust serves to reduce or increase future contributions that would otherwise be required to provide for the defined level of benefits under the Staff Trust.

The payroll for employees covered by the Staff Trust for the year ended September 30, 2010 was approximately $738,900; the City's total payroll was approximately $298.5 million.

Annual Pension Cost. The City's current year contribution was determined through an actuarial valuation performed as of October 1, 2010. Significant actuarial assumptions used to compute the contribution requires are as follows:

Valuation date: October 1, 2009 Actuarial cost method: Modified Entry Age Normal Amortization method: Level dollar amounts, closed Amortization method: 6 to 20 years

Asset valuation method: 3-Year Smooth Market Investment rate of return*: 8.10% Projected salary increases*: 6.00%

*Includes inflation at 3.50% Cost of living adjustments: None

Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Staff Pension Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC. The Staff Trust contributions are determined using the entry age normal cost method with frozen actuarial accrued liability. The annual pension cost is equal to the annual required contribution each year.

B-16


Fiscal Year Annual Pension Cost Percentage Contributed Net Pension Obligation 2004 $ 98,044 100.00 % 0.00 2005 99,779 100.00 0.00 2006 72,380 100.00 0.00 2007 57,995 100.00 0.00 2008 109,163 100.00 0.00 2009 159,837 100.00 0.00 2010 132,542 100.71 (945)

Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Staff Pension Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC.

After taking into account expected member contributions, the total required contribution from the City is $226,793, or 26.90% of covered payroll for the 2012 fiscal year payable on October 1, 2011. IN comparison, the required contribution for the 2011 fiscal year was $164,490, or 22.26% of cover payroll. There was an experience loss during the year. The implementation of 4-Year DROP provision increased the required contribution by $2,483 for fiscal year 2012. The Staff Trust's unfunded liability was projected to be $539,335 as of October 1, 2010, taking into account expected contributions from the City of $164,490 based on the October 1, 2009 valuation. The actual unfunded liability is $992,369. The increase of $453,034 in the unfunded liability is mainly due to the return on the actuarial value of assets of 1.37% compared to the expected retune of 8.10% and greater than expected pay increases. The total increase in City contribution to amortize the unfunded liability is $53,070 per year.


B-17

Historical Funding Progress

Actuarial Valuation

Date (October 1)

Market Value of Assets

(a) (b) (b) - (a) (a)/(b) (c) [(b) - (a)]/(c)



Unfunded AAL (UAAL)

Funded Ratio

Annual Payroll

UAAL as Percent of

Annual Payroll

2001 $ 206,578 $ 714,036 $ 507,458 28.93% $ 363,176 139.73% 2002 303,728 900,721 596,993 33.72 411,278 145.16 2003 $ 267,345 446,666 1,057,295 610,629 42.25 448,457 136.16 2004 437,306 615,132 1,005,846 390,714 61.16 487,639 80.12 2005 587,697 768,336 1,084,275 215,939 70.86 455,220 69.40 2006 746,102 939,698 1,129,276 189,578 83.21 643,770 29.45 2007 913,764 1,138,655 1,622,719 484,064 70.17 734,116 65.94 2008 1,141,279 1,313,407 1,748,147 434,740 75.13 632,259 68.76 2009 1,140,033 1,556,718 2,121,806 565,088 73.37 738,898 76.48 2010 1,413,563 1,834,613 2,826,982 992,369 64.90 842,955 117.72

Source: For valuation dates 2001-2002, City of Miami, Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2007. For valuation dates 2003-2010, City of Miami General Employees' and Sanitation Employees' Retirement Trust Staff Pension Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC. The City's annual pension cost and net pension obligation to the Staff Trust is as follows:

Fiscal Year 2010 Fiscal Year 2011 Annual required contribution (ARC) $ 132,542 $ 164,490 Interest on net pension obligation (NPO) 0 0 Adjustment to ARC 0 0 Annual Pension Cost $ 132,542 $ 164,490 Contributions made 133,487 -- Decrease in NPO $ (945) -- NPO, beginning of year 0 -- NPO, end of year $ 0 --

Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Staff Pension Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC.

The rate of return on the market value for the period ending September 30, 2010 was 9.67, as compared to the 8.10% assumption. The asset valuation method results in an actuarial asset value of $1.6 million as of September 30, 2010, as compared to the market value of $1.4 million.

Recent Benefit and Member Contribution Changes. Effective October 1, 2010 the retirement rates were updated to reflect the adoption of the DROP. Rates were changed from 50% to 65% for the pension administrator upon reaching Rule of 70 eligibility; 20% was added to the current rates upon reaching Rule of 70 eligibility for other members. The marriage assumption was also changed from 80% for al members to 0% for the pension administrator and 40% for all other members.

EORT

Pension Benefits. Benefits accrue for City Commissioners at the rate of 50% of the highest annual W-2 wages in the last three years of employment after 7 years of service as an elected official of the City plus 5% for each additional year up to 100% at 17 or more years of service. Benefits are payable on the later of age 55 or on the first day of the month following an officer's termination. An active participant will be fully vested

B-18

upon death and a single sum death benefit is payable. The EORT was frozen to new entrants effective October 22, 2009. Only participants who were accruing benefits and had not yet become vested in their benefits as of that date continue to accrue benefits under the EORT. Benefit accruals for all other participants were frozen.

Contributions and Funding Policies. Funding is in level payments under the individual aggregate cost method. Assets are allocated first to the non-active participants, then to the active participants based on their accrued liability. The unfunded present value of future benefits is determined for each individual and spread over their expected future working lifetime with the City. All funding is provided by the City. There are no participant contributions to the EORT.

The payroll for employees covered by the EORT for the year ended September 30, 2010 was approximately $600,000; the City's total payroll was approximately $298.5 million.

Annual Pension Costs. The City's current year contribution was determined through an actuarial valuation determined as of December 31, 2009. Significant actuarial assumptions used to computer the annual contribution requirement are as follows:

Valuation date: October 1, 2009 Actuarial cost method: Individual Aggregate Cost Method Amortization method: Not Applicable Amortization method: Not Applicable

Asset valuation method: December 31 market values Investment rate of return: 3.75% Projected salary increases: Not Applicable

Inflation: Not Applicable Merit, longevity, etc.: Not Applicable

Mortality table: RP-2000 White Collar Active/Retiree, Healthy Mortality table without setback

Disability, turnover and retirements: No disability or turnover assumed. Retirement is assumed at end of the current term of 100% vested.

Source: City of Miami Elected Officers' Retirement Trust Actuarial Valuation Report as of December 1, 2009 prepared by Mercer. EORT contributions are determined using the aggregate cost method. This method does not separately identify and amortize unfunded actuarial liabilities. The following contributions were made to EORT in accordance with actuarially determined contribution requirements, based on the actuarial valuation performed for each respective year. The annual pension cost is equal to the annual required contribution each year.


B-19


Fiscal Year Annual Pension Cost Percentage Contributed Net Pension Obligation 2005 300,000 100 0.00 2006 1,043,209 100 0.00 2007 285,408 100 0.00 2008 711,209 100 0.00 2009 412,588 100 0.00 2010 1,275,242 100 0.00

Source: City of Miami Elected Officers' Retirement Trust Actuarial Valuation Report as of December 1, 2009 prepared by Mercer. Special Benefit Plans

Certain executive employees of the City are allowed to join the ICMA Retirement Trust's 401(a) plan (the "SBP"). This defined contribution deferred compensation plan, which covers governmental employees throughout the country, is governed by a Board of Directors responsible for carrying out the overall management of the organization, including investment administration and regulatory compliance. Membership for the City employees is limited by the City Code to specific members of the City Clerk, City Manager, City Attorney's offices, Department Directors, Assistant Directors, and other executives. To participate in the plan a written trust agreement must be executed, which requires the City to contribute 8% of the individual's earnable compensation, and the employee to contribute 10% of their salary. Participants may withdraw funds at retirement or upon separation based on a variety of payout options. The City does not have any fiduciary responsibility relating to the plan, consequently the amount accrued for benefits are not recorded in the fiduciary funds.

The following information relates to the City participation in the SBP:

Total current year's payroll for all employees $298,482,579 Current year's payroll for participating employees 5,657,164 Current year employer contributions 309,654

Source: City of Miami, Florida Comprehensive Annual Financial Report for Fiscal Year Ended September 30, 2011.

In addition to coverage under the FIPO, the firefighters and police officers are members of two separate non-contributory money purchase benefit plans established under the provisions of Chapters 175 and 185, Florida Statutes, respectively. These two plans are funded solely from proceeds of certain excise taxes levied by the City and imposed upon property and casualty insurance coverage within the City limits. This tax, which is collected from insurers by the State of Florida, is remitted directly to the plans' Boards of Trustees. The City is entitled to levy such excise taxes solely for the use of the money purchase benefit plans as long as the minimum benefit provisions of Chapter 175 and 185, Florida Statutes, are met by the FIPO. The City does not have any fiduciary responsibility relating to the SBP, consequently amount accrued benefits are not recorded in the fiduciary funds. The total of such excise taxes received from the state of Florida and remitted to the plans was $9,180,986 for the year ended September 30, 2010. Accordingly, these monies are recorded as pass through funds in the City's financial statements. Benefits are allocated to the participants based upon their service during the year and the level of funding received during said year. Participants are fully vested after nine years of service. Upon termination of service, a participant may elect to receive one of the three options (1) a lump sum payment; (2) five substantially equal payments, or (3) 10% or more in the first year and the remainder in any way over the next four years. The total must be paid out within five years.

B-20

Legislative Proposals Affecting Pension Plans

Local Government Pension Systems. The Florida Legislature recently passed Senate Bill 1128 ("SB 1128") which impacts government pension systems, including police and firefighter systems. SB 1128 provides that up to 300 hours of overtime may be included as compensation for pension purposes, but excludes payments for accrued unused sick or annual leave. The use of an actuarial or cash surplus in a local government's pension plan for any expenses outside the plan is also prohibited under SB 1128. SB 1128 also prevents a local government's contributions to be reduced below the normal cost of its pension plan.

Specifically to police and firefighter pensions, SB 1128 eliminates the requirement to increase pension benefits whenever member contributions are increased. SB 1127 also allows cities with a local law plan in existence on or before June 30, 1986, to change the representation of their pension boards, if such change does not reduce the percentage of police and firefighter members on such boards. SB 1128 also provides for the Department of Management Services ("DMS") to provide certain disclosures defined benefit pension plans of cities, including information on the plan's actuarial data, minimum funding requirements, and five year history of funded ratios. Under SB 1128, DMS is responsible for developing a standardized rating system for local government defined benefit pension plans. Finally, SB 1128 creates a Task Force on Public Employee Disability Presumptions. The task force will study and make recommendations concerning the inclusion of certain disabilities to be job related. The task force's report and recommendations must be submitted to the Florida Legislature by January 1, 2012.

At present, it is uncertain how SB 1128 will impact the City's finances.

APPENDIX C

FORM OF THE RESOLUTION


City of Miami Page 1 of 36 File Id: 11-00441 (Version 2) Printed On: 7/14/2011

City of Miami

Legislation Resolution: R-11-0228

City Hall 3500 Pan American Drive

Miami, FL 33133 www.miamigov.com

File Number: 11-00441 Final Action Date: 5/26/2011

A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $140,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF SPECIAL OBLIGATION NON-AD VALOREM REVENUE REFUNDING BONDS IN ONE OR MORE SERIES, FROM TIME TO TIME, FOR THE PURPOSE OF, TOGETHER WITH OTHER AVAILABLE MONEYS, REFUNDING THE CITY'S OUTSTANDING $50,000,000 AGGREGATE PRINCIPAL AMOUNT OF REVENUE NOTE, SERIES 2010 (PORT OF MIAMI TUNNEL AND ACCESS IMPROVEMENT PROJECT) (THE "NOTE") AND REFINANCING CERTAIN OUTSTANDING LOANS FROM THE SUNSHINE STATE GOVERNMENTAL FINANCING COMMISSION; PROVIDING FOR THE RIGHTS AND SECURITY OF ALL HOLDERS OF BONDS ISSUED PURSUANT TO THIS RESOLUTION; PROVIDING CERTAIN DETAILS OF THE BONDS; DELEGATING OTHER DETAILS AND MATTERS IN CONNECTION WITH THE ISSUANCE OF THE BONDS TO THE CITY MANAGER, WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN; PROVIDING FOR THE PAYMENT OF SUCH BONDS FROM LEGALLY AVAILABLE NON-AD VALOREM REVENUES BUDGETED AND APPROPRIATED BY THE CITY FOR SUCH PURPOSE; APPOINTING A BOND REGISTRAR; AUTHORIZING A BOOK-ENTRY REGISTRATION SYSTEM FOR THE BONDS; AUTHORIZING THE NEGOTIATED SALE AND AWARD FROM TIME TO TIME BY THE CITY MANAGER OF THE BONDS TO THE UNDERWRITERS, WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; APPROVING THE FORM OF AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND OFFICIAL STATEMENTS AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE OFFICIAL STATEMENTS; COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15C2-12 AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE DISCLOSURE DISSEMINATION AGENT AGREEMENTS WITH RESPECT THERETO AND APPOINTING A DISCLOSURE DISSEMINATION AGENT THEREUNDER; CREATING CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR THE APPLICATION OF THE PROCEEDS OF THE BONDS; DELEGATING TO THE CITY MANAGER AUTHORITY TO NEGOTIATE AND OBTAIN ONE OR MORE BOND INSURANCE POLICIES AND/OR A RESERVE ACCOUNT INSURANCE POLICIES FOR DEPOSIT TO THE CREDIT OF THE SUBACCOUNT OF THE DEBT SERVICE RESERVE ACCOUNT AND AUTHORIZING THE EXECUTION AND DELIVERY OF AGREEMENTS WITH THE PROVIDER THEREOF; PROVIDING COVENANTS FOR THE PROVIDER(S) OF SUCH BOND INSURANCE POLICY AND/OR RESERVE ACCOUNT INSURANCE POLICY; AUTHORIZING THE CITY MANAGER, THE CITY ATTORNEY AND CERTAIN OTHER OFFICIALS AND EMPLOYEES OF THE CITY TO TAKE ALL ACTIONS REQUIRED IN CONNECTION WITH THE ISSUANCE OF THE BONDS; AND PROVIDING FOR AN EFFECTIVE DATE.

File Number: 11-00441 Enactment Nunmber:R-11-0228


WHEREAS, the City of Miami, Florida (the "City") has previously entered into several loans with the Sunshine State Government Financing Commission ("Sunshine State"); and

WHEREAS, the City Commission of the City (the "Commission") has determined that it is desirable, subject to the provisions of this Resolution, to authorize the issuance by the City of its Special Obligation Non-Ad Valorem Revenue Refunding Bonds, Series 2011A, in an aggregate principal amount not to exceed $80,000,000 (the "Series 2011A Bonds"), for the purpose of, together with other available moneys, (i) refinancing certain outstanding loan obligations of the City with Sunshine State, as described herein, (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds and (iii) paying certain costs of issuance of the Series 2011A Bonds, including, if necessary, the premium for a Bond Insurance Policy; and

WHEREAS, the City has previously issued the Note to provide for the interim financing of the Port of Miami Tunnel and Access Improvement Project (the "Tunnel Project"); and

WHEREAS, the Commission has determined that it is desirable, subject to the provisions of this Resolution, to authorize the issuance by the City of its Special Obligation Non-Ad Valorem Revenue Refunding Bonds, Series 2011B, in an aggregate principal amount not to exceed $60,000,000 (the "Series 2011B Bonds" and, together with the Series 2011A Bonds, the "Bonds"), for the purpose of, together with other available moneys, (i) refinancing the Note, including the payment of accrued interest, (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011B Bonds, and (iii) paying certain costs of issuance of the Series 2011B Bonds, including if necessary, the premium for a Bond Insurance Policy; and

WHEREAS, the Commission has further determined that due to the uncertainty of the municipal bond market and the need to access such market when most advantageous to the City, it is in the best interest of the City to delegate to the City Manager, who may consult with the Director of Finance and Financial Advisor (as such terms are defined below), the determination of various terms of the Bonds, the award of the Bonds and other actions in connection with the issuance of the Bonds, all as provided and subject to the limitations contained in this Resolution; and

WHEREAS, for reasons more fully set forth herein, the Commission finds and determines it to be in the best interest of the City to authorize the sale of the Bonds on the basis of a negotiated sale rather than a public sale by competitive bid;

NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI, FLORIDA:



TABLE OF CONTENTS

ARTICLE I

DEFINITIONS, AUTHORITY AND FINDINGS;

RESOLUTION CONSTITUTES A CONTRACT

Section 1.01. Definitions ........................................................................................................ 1 Section 1.02. Authority for this Resolution ............................................................................. 7 Section 1.03. Findings ........................................................................................................... 7 Section 1.04. Resolution Constitutes Contract ....................................................................... 7

ARTICLE II

AUTHORIZATION AND DETAILS OF BONDS

AND CERTAIN DOCUMENTS

Section 2.01. Authorization of Bonds and Refinancing of the Refunded Loans and Note ....... 8 Section 2.02. Certain Details of Bonds .................................................................................. 8 Section 2.03. Redemption Provisions .................................................................................... 9 Section 2.04. Execution of Bonds .........................................................................................10 Section 2.05. Negotiability, Registration and Cancellation ....................................................10 Section 2.06. Bonds Mutilated, Destroyed, Stolen or Lost ....................................................11 Section 2.07. Preparation of Definitive Bonds; Temporary Bonds .........................................11 Section 2.08. Form of Bonds ................................................................................................12 Section 2.09. Book-Entry Only System for the Bonds; Qualification for DTC ........................12 Section 2.10. Negotiated Sale; Bond Purchase Agreement ..................................................12 Section 2.11. Preliminary Official Statement; Official Statement ...........................................13 Section 2.12. Continuing Disclosure .....................................................................................13 Section 2.13. Guaranty Agreement .......................................................................................13

ARTICLE III

COVENANTS, FUNDS AND APPLICATION THEREOF

Section 3.01. Bonds Not to be Indebtedness of the City .......................................................15 Section 3.02. Bonds Secured By Pledge of Pledged Funds ..................................................15 Section 3.03. Application of Bond Proceeds .........................................................................15 Section 3.04. Covenants of the City ......................................................................................16 Section 3.05. Events of Default; Remedies ...........................................................................23 Section 3.06. Enforcement of Remedies ...............................................................................24 Section 3.07. Effect of Discontinuing Proceedings ................................................................25 Section 3.08. Directions to Default Trustee as to Remedial Proceedings ..............................25 Section 3.09. Restrictions on Actions by Individual Bondholders ..........................................25 Section 3.10. Additional Debt................................................................................................26

ARTICLE IV

CONCERNING THE BOND REGISTRAR

Section 4.01. Appointment and Acceptance of Duties ..........................................................27 Section 4.02. Responsibilities of Bond Registrar...................................................................27



Section 4.03. Evidence On Which Bond Registrar May Act ..................................................27 Section 4.04. Compensation .................................................................................................27 Section 4.05. Certain Permitted Acts ....................................................................................28 Section 4.06. Merger or Consolidation ..................................................................................28 Section 4.07. Adoption of Authentication ..............................................................................28 Section 4.08. Resignation or Removal of Bond Registrar and Appointment of Successor ....28 Section 4.09. Vacancy ..........................................................................................................28

ARTICLE V

EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND PROOF OF OWNERSHIP OF BONDS

Section 5.01. Proof of Execution of Documents and Ownership ...........................................30

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.01. Modification or Amendment .............................................................................31 Section 6.02. Severability of Invalid Provisions .....................................................................32 Section 6.03. Unclaimed Money ...........................................................................................32 Section 6.04. Payments Due on Saturdays, Sundays and Holidays......................................33 Section 6.05. Controlling Law; Members of Commission Not Liable .....................................33 Section 6.06. Further Authorizations .....................................................................................33 Section 6.07. Headings for Convenience Only ......................................................................33 Section 6.08. Time of Taking Effect ......................................................................................34

Exhibit A - Form of Bond Exhibit B - Form of Bond Purchase Agreement Exhibit C - Form of Preliminary Official Statement Exhibit D - Form of Continuing Disclosure Agreement

C-1



ARTICLE I

DEFINITIONS, AUTHORITY AND FINDINGS;

RESOLUTION CONSTITUTES A CONTRACT

SECTION 1.01. Definitions. In addition to the terms defined elsewhere in this Resolution, including the recitals, the following terms shall have the following meanings in this Resolution:

"Account" shall mean an account created and established under this Resolution.

"Act" shall mean the Constitution of the State, Chapter 166, Florida Statutes, as amended, and the City of Miami Charter.

"Amortization Requirements" shall mean such moneys required to be deposited in the Bond Redemption Account for the purpose of the mandatory redemption or payment at maturity of any Term Bonds, the specific amounts and times of such deposits to be set forth in the City Manager's Certificate.

"Annual Debt Service Requirement" for any Fiscal Year, as applied to the Bonds or any portion thereof, or such other Debt, as described in Section 3.10(b) hereof, as applicable, shall mean the respective amounts which are needed to provide:

(a) for paying the interest on all Bonds then Outstanding which is payable on each Interest Payment Date in such Fiscal Year;

(b) for paying the principal of all Serial Bonds then Outstanding which is payable upon the maturity of such Serial Bonds in such Fiscal Year; and

(c) the Amortization Requirements, if any, for the Term Bonds for such Fiscal Year.

For purposes of computing (a), (b) and (c) above, (i) any principal, interest or Amortization Requirements due on October 1 in a Fiscal Year shall be deemed due in the preceding Fiscal Year, (ii) if all or a portion of the principal of or interest on Bonds is payable from funds irrevocably set aside or deposited for such purpose, together with projected earnings thereon to the extent such earnings are projected to be from Permitted Investments, such principal or interest shall not be included in determining Annual Debt Service Requirements if such funds and/or Permitted Investments will provide moneys which shall be sufficient to pay when due such principal and interest, (iii) if all or a portion of the principal of or interest on the Bonds is payable from any source other than Non-Ad Valorem Revenues, such portion of principal or interest shall not be included in the determination of Annual Debt Service Requirements. For purposes of computing (a), (b) and (c) above, in connection with Section 3.10(b) hereof "Bonds" shall include any Debt as described in such Section.

"Authorized Depository" shall mean any bank, trust company, national banking association, savings and loan association, savings bank or other banking association selected by the City as a depository, which is authorized under Florida law to be a depository of



municipal funds and which has complied with all applicable state and federal requirements concerning the receipt of City funds.

"Bond Insurance Policy" shall mean the financial guaranty insurance policy to be issued by a bond insurer guaranteeing the payment when due of the principal of and interest on the Bonds as provided therein.

"Bond Purchase Agreement" shall mean the Bond Purchase Agreement to be entered into between the City and the Underwriters providing for the sale of the Bonds to the Underwriters.

"Bond Registrar" shall mean Regions Bank, an Alabama banking corporation, or any successor thereto.

"Bonds" shall mean collectively, the Series 2011A Bonds and the Series 2011B Bonds.

"Bondholder," "Holder," "Holder of Bonds" or "Owner" or any similar term, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds.

"City" shall mean the City of Miami, Florida.

"City Attorney" shall mean the City Attorney of the City or her designee or the officer succeeding to her principal functions.

"City Clerk" shall mean the City Clerk of the City, any Deputy City Clerk or her designee or the officer succeeding to her principal functions.

"City Manager" shall mean the City Manager of the City, any Assistant City Manager or other designee of the City Manager.

"City Manager's Certificate" means the certificate dated the date of the sale of the Bonds to be executed by the City Manager, which certificate shall provide certain details of the Bonds as required under this Resolution.

"Code" shall mean the Internal Revenue Code of 1986, as amended, and all temporary, proposed or permanent implementing regulation promulgated or applicable thereunder.

"Commission" shall mean the City Commission of the City.

"Continuing Disclosure Agreement" shall mean the Disclosure Dissemination Agent Agreement to be entered into between the City and the Disclosure Dissemination Agent.

"CRA Interlocal Revenues" shall mean those revenues of the Omni CRA paid to the City pursuant to the Interlocal Agreement, to be used to pay the principal of and interest on the Series 2011B Bonds and/or to make required deposits into the subaccount of the Debt Service Reserve Account corresponding to the Series 2011B Bonds, which revenues shall not be considered Non-Ad Valorem Revenues for purposes of Section 3.10 hereof.

"Director of Finance" shall mean the Director of Finance of the City or his or her designee or the officer succeeding to his or her principal functions.

"Disclosure Dissemination Agent" shall mean Digital Assurance Certification, L.L.C.



"DTC" shall mean The Depository Trust Company, New York, New York.

"Financial Advisor" shall mean First Southwest Company, financial advisor to the City in connection with the issuance of the Bonds.

"Fiscal Year" shall mean that period commencing on October 1 and continuing to and including the next succeeding September 30, or such other annual period as may be prescribed by law or by the City in accordance with law.

"Fitch" shall mean Fitch Ratings, its successors and assigns, and if such entity no longer performs the functions of a securities rating agency, "Fitch" shall refer to any other nationally recognized securities rating agency designated by the City in a written certificate filed with the City Clerk.

"Fund" shall mean a fund created and established under this Resolution.

"Government Obligations" means:

(a) Direct obligations of, or obligations guaranteed by, the United States of America;

(b) Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (i) which are not callable prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (ii) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character described in clause (a) hereof which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this clause (b), as appropriate, and (iii) as to which the principal of and interest on the bonds and obligations of the character described in clause (a) hereof which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (b) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this clause (b), as appropriate;

(c) Evidences of indebtedness issued by the Federal Home Loan Banks, Federal Home Loan Mortgage Corporation (including participation certificates), Federal Financing Banks, or any other agency or instrumentality of the United States of America created by an act of Congress provided that the obligations of such agency or instrumentality are unconditionally guaranteed by the United States of America or any other agency or instrumentality of the United States of America or of any corporation wholly-owned by the United States of America; and

(d) Evidences of ownership of proportionate interests in future interest and principal payments on obligations described in (a) held by a bank or trust company as custodian.



"Interest Payment Date" shall mean such dates of each Fiscal Year on which interest on the Bonds is payable on any Bonds that are Outstanding, as set forth in the City Manager's Certificate.

"Interlocal Agreement" shall mean that certain Interlocal Agreement dated June 24, 1996 among the City, Miami-Dade County, Florida and the Omni CRA, as amended.

"Maximum Annual Debt Service" shall mean, at any time and with respect to all of the Bonds, the greatest Annual Debt Service Requirement in the then current or any succeeding Fiscal Year.

"Mayor" shall mean the Mayor of the City or the officer succeeding to his or her principal functions.

"Moody's" shall mean Moody's Investors Services, Inc., its successors and assigns, and if such entity no longer performs the functions of a securities rating agency, "Moody's" shall refer to any other nationally recognized securities rating agency designated by the City in a written certificate filed with the City Clerk.

"Non-Ad Valorem Revenues" shall mean all revenues of the City derived from any source whatsoever, other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein; provided, however, for purposes of Section 3.10 hereof, CRA Interlocal Revenues shall not be considered Non-Ad Valorem Revenues.

"Note" shall mean the City's outstanding $50,000,000 aggregate principal amount of Revenue Note, Series 2010 (Port of Miami Tunnel and Access Improvement Project).

"Official Statement" shall mean the final Official Statement with respect to the Bonds.

"Omni CRA" shall mean the Community Redevelopment Agency for the Omni Community Redevelopment District, as amended, created pursuant to Resolution 86-868 of the City and Ordinance 87-47 of Miami-Dade County, Florida.

"Outstanding" when used with reference to the Bonds, shall mean, as of any date of determination, all Bonds theretofore authenticated and delivered except:

(a) Bonds theretofore canceled by the Bond Registrar or delivered to the Bond Registrar for cancellation;

(b) Bonds which are deemed paid and no longer Outstanding as provided herein;

(c) Bonds in lieu of which other Bonds have been issued pursuant to the provisions hereof relating to Bonds destroyed, stolen or lost, unless evidence satisfactory to the Bond Registrar has been received that any such Bond is held by a bona fide purchaser; and

(d) For purposes of any consent or other action to be taken hereunder by the Holders of a specified percentage of principal amount of Bonds, Bonds held by or for the account of the City.

C-2



"Permitted Investments" shall mean and include such obligations as shall be permitted to be legal investments of the City by the laws of the State.

"Pledged Funds" shall mean, collectively, the Series 2011A Pledged Funds and the Series 2011B Pledged Funds.

"Preliminary Official Statement" shall mean the Preliminary Official Statement with respect to the Bonds.

"Project" shall mean any project authorized under the Community Redevelopment Plan for the Omni CRA.

"Provider" shall mean the provider of a Bond Insurance Policy and/or a Reserve Account Insurance Policy or a Reserve Account Letter of Credit.

"Rebate Amount" shall have the meaning assigned to such term in Section 3.04(g) of this Resolution.

"Refunded Loans" shall mean those certain loan obligations of the City through Sunshine State to be refinanced with the proceeds of the Series 2011A Bonds, described as follows: (i) a loan secured by a Loan Agreement between Sunshine State and the City dated as of September 30, 1987 issued in the original amount of $20,800,000, currently outstanding in the principal amount of $4,349,000, (ii) a loan secured by a Loan Agreement between Sunshine State and the City dated as of January 27, 1988 issued in the original amount of $150,000, currently outstanding in the principal amount of $32,000, (iii) a loan secured by a Loan Agreement between Sunshine State and the City dated May 31, 1988 issued in the original amount of $6,680,900, currently outstanding in the principal amount of $1,470,500, (iv) a loan secured by a Loan Agreement between Sunshine State and the City dated as of June 30, 1995 issued in the original amount of $3,500,000, currently outstanding in the principal amount of $920,000, (v) a loan secured by a Loan Agreement between Sunshine State and the City dated as of October 3, 2007 issued in the original amount of $6,600,000, all of which is currently outstanding, (vi) a loan secured by a Loan Agreement between Sunshine State and the City dated as of August 14, 2008 issued in the original amount of $42,500,000, all of which is currently outstanding, and (vii) a loan secured by a Loan Agreement between Sunshine State and the City dated as of March 25, 2009 issued in the original amount of $20,000,000, currently outstanding in the principal amount of $12,700,000.

"Regular Record Date" shall have the meaning assigned to such term in Section 2.02 of this Resolution.

"Reserve Account Insurance Policy" shall mean the insurance policy, surety bond or other acceptable evidence of insurance, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitution for cash or securities on deposit therein. The issuer providing such insurance shall be a municipal bond insurer rated, at the time of deposit in the Debt Service Reserve Account, in any of the two highest rating categories of Moody's, Standard & Poor's and Fitch.

"Reserve Account Letter of Credit" shall mean the irrevocable, transferable letter of credit, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitution for cash or securities on deposit therein. The issuer providing such letter of credit shall be a banking association, bank or trust company or branch thereof rated, at the time of deposit into



the Debt Service Reserve Account, in any of the two highest rating categories of Moody's, Standard & Poor's and Fitch.

"Reserve Account Requirement" shall mean with respect to each series of Bonds, either one half of the Maximum Annual Debt Service on all Bonds Outstanding of such series or the lesser of (i) the Maximum Annual Debt Service on all Bonds Outstanding of such series, (ii) 125% of the average Annual Debt Service Requirement on all Bonds Outstanding of such series, or (iii) 10% of the proceeds of such series of Bonds within the meaning of the Code as shall be determined by the City Manager and set forth in the City Manager's Certificate.

"Resolution" shall mean this Resolution as the same may from time to time be further amended and supplemented in accordance with the terms hereof.

"Rule" shall mean Rule 15c2-12 promulgated by the United States Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.

"Serial Bonds" shall mean the Bonds which shall be stated to mature in annual or semi-annual installments but not including Term Bonds.

"Series 2011A Pledged Funds" shall mean, collectively, all moneys, securities and instruments held in subaccounts of the Funds and Accounts created and established by this Resolution for the Series 2011A Bonds.

"Series 2011B Pledged Funds" shall mean, collectively, all moneys, securities and instruments held in subaccounts of the Funds and Accounts created and established by this Resolution for the Series 2011B Bonds.

"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a Division of the McGraw-Hills Companies, Inc., its successors and assigns, and if such entity no longer performs the functions of a securities rating agency, "Standard & Poor's" shall refer to any other nationally recognized securities rating agency designated by the City in a written certificate filed with the City Clerk.

"State" shall mean the State of Florida.

"Term Bonds" shall mean the Bonds which shall be stated to mature on one date and for the amortization of which Amortization Requirements are required to be deposited into the Bond Redemption Account in the Sinking Fund.

"Tunnel Project" shall mean the acquisition, construction and reconstruction of the Port of Miami Tunnel and Access Improvement Project, as provided in the Omni CRA Community Redevelopment Plan.

"Underwriters" shall mean RBC Capital Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Keegan & Company, Inc., Goldman, Sachs & Co., and Raymond James & Associates, Inc.

Words importing the singular number shall include the plural number in each case and vice versa. Words defined in Section 101 hereof that appear in this Resolution in lower case form shall have the meanings ascribed to them in the definitions in Section 101 unless the context shall otherwise indicate. The word "person" shall include corporations and associations,



including public bodies, as well as natural persons, unless the context shall otherwise indicate. The word "Bond" or "Bonds" shall mean any Bond or Bonds or all of the Bonds, as the case may be, issued under the provisions of this Resolution.

SECTION 1.02. Authority for this Resolution. This Resolution is adopted pursuant to the provisions of the Act.

SECTION 1.03. Findings. It is hereby ascertained, determined and declared:

(a) The recitals to this Resolution are incorporated herein as findings.

(b) The issuance of the Bonds to refinance the Note and the Refunded Loans with the proceeds thereof and any other available moneys will serve a valid public and municipal purpose in accordance with the Act.

(c) The principal of and interest on the Bonds and all required sinking fund, reserve and other payments shall be payable solely from the Pledged Funds and, solely to the extent provided in Section 3.04(a) hereof, the Non Ad-Valorem Revenues. None of the City, the State or any political subdivision thereof shall ever be required to levy ad valorem taxes to pay the principal of or interest on the Bonds or to make any of the sinking fund, reserve or other payments required by this Resolution or the Bonds, and the Bonds shall not constitute a lien upon any property owned by or situated within the corporate territory of the City, except as provided herein with respect to the Pledged Funds.

(d) In accordance with Section 218.385(1), Florida Statutes, as amended, the Commission hereby finds, determines and declares, based upon the advice of the Financial Advisor, that a negotiated sale of the Bonds is in the best interest of the City for the following reasons:

(i) the complex structure and timing of the issuance of the Bonds and the refinancing of the Note and the Refunded Loans require extensive planning, and it is not practical for the City and the Financial Advisor to engage in such planning within the time constraints and uncertainties inherent in a competitive bidding process; and

(ii) it is necessary to be able to sell the Bonds when market conditions are most favorable in order to attain the most favorable interest rates on the Bonds; the vagaries of the current and near future municipal bond market demand that the Underwriters have the maximum time and flexibility to price and market the Bonds, in order to obtain the most favorable interest rates available.

SECTION 1.04. Resolution Constitutes Contract. In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall own the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the City and such Bondholders, and the covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection and security of the owners of any and all of such Bonds, all of which shall be of equal rank and without preference, priority, or distinction of any of the Bonds over any other thereof except as expressly provided therein and herein.

[END OF ARTICLE I]



ARTICLE II

AUTHORIZATION AND DETAILS OF BONDS AND CERTAIN DOCUMENTS

SECTION 2.01. Authorization of Bonds and Refinancing of the Refunded Loans and Note. The refinancing of the Refunded Loans and the Note is hereby authorized. Subject and pursuant to the provisions of this Resolution, bonds of the City to be known as "Special Obligation Non-Ad Valorem Revenue Refunding Bonds, Series 2011A" (the "Series 2011A Bonds"), are hereby authorized to be issued in an aggregate principal amount not to exceed Eighty Million dollars ($80,000,000), for the purpose of, together with other available moneys, (i) refinancing the Refund Loans, (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds, and (iii) paying certain costs of issuance of the Series 2011A Bonds, including, if necessary, the premium for a Bond Insurance Policy. Subject and pursuant to the provisions of this Resolution, bonds of the City to be known as "Special Obligation Non-Ad Valorem Revenue Refunding Bonds, Series 2011B (the "Series 2011B Bonds"), are hereby authorized to be issued in an aggregate principal amount not to exceed Sixty Million dollars ($60,000,000), for the purpose of, together with other available moneys, (i) refinancing the Note, including the payment of accrued interest, (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011B Bonds, and (iii) paying certain costs of issuance of the Series 2011B Bonds, including if necessary, the premium for a Bond Insurance Policy.

Subject to the limitations contained herein, the Bonds shall be issued in separate series, and may be issued at one time or each series may be issued at separate times, the Bonds shall be issued in such aggregate principal amount, shall be dated, shall mature on such date or dates, but not later than February 1, 2031, and in such principal amounts, shall be in the form of Serial Bonds or Term Bonds or a combination thereof, shall have such Interest Payment Dates, shall bear interest at such rates not to exceed the maximum rate permitted by law, with respect to any Term Bonds shall have such Amortization Requirements, shall have a Reserve Account Requirement and shall be subject to redemption at such times and at such prices, all as shall be determined by the City Manager, after consultation with the Director of Finance and the Financial Advisor, and set forth in the City Manager's Certificate.

The Commission hereby appoints Regions Bank, as Bond Registrar for the Bonds.

SECTION 2.02. Certain Details of Bonds. The Bonds shall be issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof. The Bonds shall be numbered consecutively from 1 upward with respect to the Series 2011A Bonds preceded by the letters "RA" and with respect to the Series 2011B Bonds preceded by the letters "RB."

The principal of and redemption premium, if any, on the Bonds shall be payable upon presentation and surrender at the designated corporate trust office of the Bond Registrar. Interest on the Bonds shall be paid on each Interest Payment Date by check or draft drawn upon the Bond Registrar and mailed to the Holders of the Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on

C-3



the 15th day (whether or not a business day) of the month next preceding the Interest Payment Date (the "Regular Record Date"); provided, however, that (i) if ownership of Bonds is maintained in a book-entry only system by a securities depository, such payment may be made by automatic funds transfer to the securities depository or its nominee or (ii) if such Bonds are not maintained in a book-entry only system by a securities depository, upon written request of the Holder of $1,000,000 or more in principal amount of Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such Holder (such bank being a bank within the continental United States), if such Holder has advanced to the Bond Registrar the amount necessary to pay the cost of such wire transfer or authorized the Bond Registrar to deduct the cost of such wire transfer from the payment due to such Holder. Notwithstanding anything in this paragraph to the contrary, any interest not punctually paid on a Regular Record Date shall forthwith cease to be payable to the Holder on such Regular Record Date and may be paid at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Bond Registrar, notice of which shall be given not less than 10 days prior to such special record date to such Holder.

SECTION 2.03. Redemption Provisions. The Bonds may be subject to redemption prior to maturity at such times, at such redemption prices and upon such terms in addition to the terms contained in this Resolution as may be set forth in the City Manager's Certificate. The optional redemption of the Bonds, if any, may be conditioned upon the receipt by the Bond Registrar of sufficient moneys to pay the redemption price of the Bonds to be redeemed.

Notice of redemption for Bonds being redeemed shall be given by deposit in the U.S. mail of a copy of a redemption notice, postage prepaid, at least thirty (30) days before the redemption date, to all registered owners of the Bonds or portions of the Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Failure to mail any such notice to a registered owner of a Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Bond or portion thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Bond being redeemed, the name and address of the Bond Registrar, the redemption price to be paid and, if less than all of the Bonds of a series then Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall also state that on or after the redemption date, upon surrender of such Bond, a new Bond or Bonds in a principal amount equal to the unredeemed portion of such Bond will be issued. If the optional redemption of any of the Bonds is conditioned upon the receipt of sufficient moneys as described above, the notice of redemption which relates to such Bonds shall also state that the redemption is so conditioned.

Any notice mailed as provided in this section shall be conclusively presumed to have been duly given, whether or not the owner of such Bond receives such notice.

Notice having been given in the manner and under the conditions hereinabove provided, the Bonds or portions of Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption for such Bonds or portions of Bonds on such date; provided, however, that Bonds or portion of Bonds called for optional redemption and which redemption is conditioned upon the receipt of sufficient moneys as described above, shall not become due and payable on the



redemption date if sufficient moneys to pay the redemption price of such Bonds or portions of Bonds have not been received by the Bond Registrar on or prior to the redemption date. On the date so designated for redemption, moneys for payment of the redemption price being held in separate accounts by the Bond Registrar in trust for the registered owners of the Bonds or portions thereof to be redeemed, all as provided in this Resolution, interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue, such Bonds and portions of Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and shall be deemed paid hereunder, and the registered owners of such Bonds or portions of Bonds shall have no right in respect thereof except to receive payment of the redemption price thereof and, to the extent provided below, to receive Bonds for any unredeemed portions of the Bonds.

In case part but not all of a Bond shall be selected for redemption, the registered owners thereof shall present and surrender such Bond to the Bond Registrar for payment of the principal amount thereof so called for redemption, and the City shall execute and deliver to or upon the order of such registered owner, without charge therefor, for the unredeemed balance of the principal amount of the Bonds so surrendered, a Bond or Bonds fully registered as to principal and interest.

SECTION 2.04. Execution of Bonds. The Bonds shall be executed in the name of the City by the City Manager and the seal of the City shall be imprinted, reproduced or lithographed on the Bonds and attested to and countersigned by the City Clerk. In addition, the City Attorney or any Assistant City Attorney shall sign the Bonds, showing approval of the form and correctness thereof. The signatures of the City Manager, the City Clerk and the City Attorney or Assistant City Attorney on the Bonds may be by facsimile. If any officer whose signature appears on the Bonds ceases to hold office before the delivery of the Bonds, his signature shall nevertheless be valid and sufficient for all purposes. In addition, any Bond may bear the signature of, or may be signed by, such persons as at the actual time of execution of such Bond shall be the proper officers to sign such Bond, although at the date of such Bond or the date of delivery thereof such persons may not have been such officers.

The Bonds shall bear thereon a certificate of authentication, in the form set forth in Exhibit A hereto, executed manually by the Bond Registrar. Only such Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under this Resolution and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Bond Registrar. Such certificate of the Bond Registrar upon any Bond executed on behalf of the City shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under this Resolution and that the Holder thereof is entitled to the benefits of this Resolution.

SECTION 2.05. Negotiability, Registration and Cancellation. At the option of the Holder thereof and upon surrender thereof at the designated corporate trust office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Holder or his duly authorized attorney and upon payment by such Holder of any charges which the Bond Registrar or the City may make as provided in this Section, the Bonds may be exchanged for Bonds of the same series, aggregate principal amount of the same maturity of any other authorized denominations.

The Bond Registrar shall keep books for the registration of Bonds and for the registration of transfers of Bonds. The Bonds shall be transferable by the Holder thereof in person or by his attorney duly authorized in writing only upon the books of the City kept by the Bond Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the



Bond Registrar duly executed by the Holder or his duly authorized attorney. Upon the transfer of any such Bond, the City shall cause to be issued in the name of the transferee a new Bond or Bonds.

The City, the Bond Registrar and any other fiduciaries may deem and treat the person in whose name any Bond shall be registered upon the books kept by the Bond Registrar as the absolute Holder of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, redemption premium, if any, and interest on such Bond as the same becomes due and for all other purposes. All such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City, the Bond Registrar nor any other fiduciary shall be affected by any notice to the contrary.

In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the City shall execute and the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchanges or transfers shall forthwith be delivered to the Bond Registrar and canceled by the Bond Registrar in the manner provided in this Section. There shall be no charge for any such exchange or transfer of Bonds, but the City or the Bond Registrar may require the payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither the City nor the Bond Registrar shall be required (a) to transfer or exchange Bonds for a period of 15 days next preceding any selection of Bonds to be redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange any Bonds called for redemption.

All Bonds paid or redeemed, either at or before maturity shall be delivered to the Bond Registrar when such payment or redemption is made, and such Bonds, together with all Bonds purchased by the City, shall thereupon be promptly canceled. Bonds so canceled may at any time be destroyed by the Bond Registrar, who shall execute a certification of destruction in duplicate by the signature of one of its authorized officers describing the Bonds so destroyed, and one executed certificate shall be filed with the City and the other executed certificate shall be retained by the Bond Registrar.

SECTION 2.06. Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated, destroyed, stolen or lost, the City may execute and the Bond Registrar shall authenticate and deliver a new Bond of like series, maturity, denomination and interest rate as the Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the City and, in the case of any lost, stolen or destroyed Bond, there shall first be furnished to the City and the Bond Registrar evidence of such loss, theft, or destruction satisfactory to the City and the Bond Registrar, together with indemnity satisfactory to them. In the event any such Bond shall be about to mature or has matured or has been called for redemption, instead of issuing a duplicate Bond, the City may direct the Bond Registrar to pay the same without surrender thereof. The City and Bond Registrar may charge the Holder of such Bonds their reasonable fees and expenses in connection with this transaction. Any Bond surrendered for replacement shall be canceled in the same manner as provided in Section 2.05 hereof.

Any such duplicate Bonds issued pursuant to this Section shall constitute additional contractual obligations on the part of the City, whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and



proportionate benefits and rights as to lien on and source and security for payment from the applicable Pledged Funds, with all other Bonds issued hereunder.

SECTION 2.07. Preparation of Definitive Bonds; Temporary Bonds. The definitive Bonds shall be lithographed, printed or typewritten. Until the definitive Bonds are prepared, the City Manager and City Clerk may execute and the Bond Registrar may authenticate, in the same manner as is provided in Section 2.04, and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, one or more printed, lithographed or typewritten temporary fully registered Bonds, substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in authorized denominations, and with such omissions, insertions and variations as may be appropriate to such temporary Bonds. The City at its own expense shall prepare and execute and, upon the surrender at the designated corporate trust office of the Bond Registrar of such temporary Bonds for which no payment or only partial payment has been provided, the Bond Registrar shall authenticate and, without charge to the Holder thereof, deliver in exchange therefor, at the principal corporate trust office of the Bond Registrar, definitive Bonds of the same aggregate principal amount and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution.

SECTION 2.08. Form of Bonds. The text of the Bonds shall be of the tenor set forth in Exhibit A to this Resolution, with such omissions, insertions and variations as may be necessary and desirable and authorized or permitted by this Resolution.

SECTION 2.09. Book-Entry Only System for the Bonds; Qualification for DTC. The Bonds shall initially be issued as uncertificated securities through the book-entry only system maintained by DTC. The City and the Bond Registrar are hereby authorized to take such actions as may be necessary to qualify the Bonds for deposit with DTC, including but not limited to those actions as are set forth in the letter of representations between the City and DTC, wire transfers of interest and principal payments with respect to the Bonds, utilization of electronic book entry data received from DTC in place of actual delivery of Bonds and provisions of notices with respect to Bonds registered by DTC (or any of its designees identified to the City and the Bond Registrar) by overnight delivery, courier service, telegram, telecopy or other similar means of communication.

SECTION 2.10. Negotiated Sale; Bond Purchase Agreement. The negotiated sale of each series of Bonds to the Underwriters is hereby authorized at a purchase price (not including original issue premium or original issue discount) of not less than 99% of the aggregate principal amount of the Bonds then issued (the "Minimum Purchase Price") and at a true interest cost rate ("TIC") not to exceed 7.5% (the "Maximum TIC"). The City Manager, after consultation with the Director of Finance and the Financial Advisor, is hereby authorized to award each series of Bonds to the Underwriters at one time or separately at a purchase price of not less than the Minimum Purchase Price and at a TIC not in excess of the Maximum TIC. The execution and delivery of a Bond Purchase Agreement for one or both series of Bonds for and on behalf of the City by the City Manager shall be conclusive evidence of the City's acceptance of the Underwriters' proposal to purchase such Bonds.

Upon compliance by the Underwriters with the requirements of Section 218.385(2) and (3), Florida Statutes, and Section 218.385(6), Florida Statutes, by filing the "truth-in-bonding statement" and the "disclosure statement" required by said statutory provisions, the City Manager is hereby authorized to execute and the City Clerk is hereby authorized to attest to,

C-4



seal and deliver one or more Bond Purchase Agreements in substantially the form attached hereto as Exhibit "B", subject to such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager upon the advice of the City Attorney and Bond Counsel. The execution, attestation and delivery of such Bond Purchase Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks.

SECTION 2.11. Preliminary Official Statement; Official Statement. The use of a Preliminary Official Statement in connection with the marketing of each series of the Bonds either together or separately is hereby authorized. The Preliminary Official Statement in substantially the form attached hereto as Exhibit "C" is hereby approved subject to such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager. The City Manager is hereby authorized to approve and execute, on behalf of the City, one or more Official Statements relating to such Bonds with such changes from the Preliminary Official Statement, within the authorizations and limitations contained herein, as the City Manager in consultation with the City Attorney, Bond Counsel and the City's disclosure counsel in his sole discretion, may approve, such execution to be conclusive evidence of such approval. The City Manager is hereby authorized to deem the Preliminary Official Statement final for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). The City Manager or his designee is hereby authorized to provide for the printing of the Preliminary Official Statement and the Official Statement by the lowest and most responsive bidder therefor and the payment of the cost of such printing is hereby authorized to be paid from the proceeds of the Bonds.

SECTION 2.12. Continuing Disclosure. For the benefit of the Holders and beneficial owners from time to time of the Bonds, the City agrees, in accordance with and as the only obligated person with respect to the Bonds under the Rule, to provide or cause to be provided certain financial information and operating data, financial statements and notices, in such manner, as may be required for purposes of paragraph (b)(5) of the Rule. In order to describe and specify the terms of the City's continuing disclosure agreement, including provisions for enforcement, amendment and termination, the City Manager is hereby authorized and directed to sign and deliver, in the name and on behalf of the City, one or more Continuing Disclosure Agreements, in substantially the form attached hereto as Exhibit "D," subject to such changes, modifications, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager, after consultation with the City Attorney and the City's disclosure counsel. Digital Assurance Certification, L.L.C. is hereby appointed as Disclosure Dissemination Agent under the Continuing Disclosure Agreement. The execution of such Continuing Disclosure Agreement for and on behalf of the City by the City Manager shall be deemed conclusive evidence of the City's approval of the Continuing Disclosure Agreement. Notwithstanding any other provisions of this Resolution, any failure by the City to comply with any provisions of such Continuing Disclosure Agreement shall not constitute a default under this Resolution and the remedies therefor shall be solely as provided in the Continuing Disclosure Agreement.

The Director of Finance is further authorized to establish, or cause to be established, procedures in order to ensure compliance by the City with the Continuing Disclosure Agreement, including the timely provision of information and notices. Prior to making any filing in accordance with such agreement, the Director of Finance may consult with the City Attorney and the City's disclosure counsel. The Director of Finance, acting in the name and on behalf of the City, shall be entitled to rely upon any legal advice provided by the City Attorney and the City's disclosure counsel in determining whether a filing should be made.



SECTION 2.13. Guaranty Agreement. In order to produce the lowest true interest cost possible for the Bonds or any portion thereof, the City Manager is hereby authorized to secure one or more Bond Insurance Policies and/or a Reserve Account Insurance Policies with respect to one or both series of Bonds, if, after consultation with the Director of Finance and the Financial Advisor, the City Manager determines that obtaining one or more Bond Insurance Policies and/or a Reserve Account Insurance Policies is in the best interests of the City. The City is hereby authorized to provide for the payment of any premiums on such Bond Insurance Policies and Reserve Account Insurance Policies from the proceeds of the issuance of such Bonds and to enter into such agreements as may be necessary to secure one or more Bond Insurance Policies and/or Reserve Account Insurance Policies, with the City Manager's execution of any such agreements, after consultation with the City Attorney and Bond Counsel, to be conclusive evidence of the City's approval thereof. The provisions of any such agreement shall supersede any inconsistent provision of this Resolution.

[END OF ARTICLE II]

ARTICLE III

COVENANTS, FUNDS AND APPLICATION THEREOF

SECTION 3.01. Bonds Not to be Indebtedness of the City. The Bonds shall not be and shall not constitute an indebtedness of the City, within the meaning of any constitutional, statutory or charter provisions or limitations, but shall be payable solely, as provided in this Resolution, from the Pledged Funds and, solely to the extent provided in Section 3.04(a) hereof, the Non-Ad Valorem Revenues. No holder or holders of any Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the City, the State or any political subdivision thereof, or taxation in any form of any real or personal property therein, or the application of any funds of the City, except the Pledged Funds and, solely to the extent provided in Section 3.04(a) hereof, the Non-Ad Valorem Revenues to pay the Bonds or the interest thereon or the making of any sinking fund, reserve or other payments provided for herein.

SECTION 3.02. Bonds Secured By Pledge of Pledged Funds. (a) The payment of the principal of, interest and redemption premium, if any, on all of the Series 2011A Bonds issued hereunder shall be secured forthwith equally and ratably by a first lien on and pledge of the Series 2011A Pledged Funds. The Series 2011A Pledged Funds are hereby irrevocably pledged to the payment of the principal of and interest on the Series 2011A Bonds authorized herein, and other payments provided for herein, as the same become due and payable. The Series 2011A Bonds and the obligation evidenced thereby shall not constitute a lien upon any property of or in the City, but shall constitute a lien only on the Series 2011A Pledged Funds all in the manner provided in this Resolution.

(b) The payment of the principal of, interest and redemption premium, if any, on all of the Series 2011B Bonds issued hereunder shall be secured forthwith equally and ratably by a first lien on and pledge of the Series 2011B Pledged Funds. The Series 2011B Pledged Funds are hereby irrevocably pledged to the payment of the principal of and interest on the Series 2011B Bonds authorized herein, and other payments provided for herein, as the same become due and payable. The Series 2011B Bonds and the obligation evidenced thereby shall not constitute a lien upon any property of or in the City, but shall constitute a lien only on the Series 2011B Pledged Funds all in the manner provided in this Resolution.



The Bonds shall be payable from the Non-Ad Valorem Revenues solely in accordance with the provisions of Section 3.04(a) hereto.

SECTION 3.03. Application of Bond Proceeds. (a) Proceeds (net of Underwriters' discount) from the sale of the Series 2011A Bonds shall be applied as follows:

(1) An amount equal to the Reserve Account Requirement for the Series

2011A Bonds shall be deposited into the appropriate subaccount of the Debt Service Reserve Account or, if applicable, an amount equal to the premium payable for the Reserve Account Insurance Policy shall be paid to the Provider and such Reserve Account Insurance Policy shall be held by the Bond Registrar to the credit of the appropriate subaccount of the Debt Service Reserve Account for the benefit of the Series 2011A Bonds and the holders thereof.

(2) An amount equal to the outstanding principal of and prepayment premium, if any, shall be paid to Deutsche Bank Trust Company Americas, as trustee with respect to the Refunded Loans.

(3) An amount of proceeds to be determined by the City Manager shall be deposited in a separate account designated "City of Miami Special Obligation Non-Ad Valorem Revenue Refunding Bonds Series 2011A Cost of Issuance Account" which is hereby established with the City and shall be disbursed for payment of expenses incurred in connection with the issuance of the Series 2011A Bonds (including payment of the expenses of the City); provided that the premium for a Bond Insurance Policy, if any, may be paid on behalf of the City by the Underwriters directly to the Provider. Any balance remaining after payment or provision for payment of such costs and expenses has been made shall be transferred to the applicable subaccount of the Interest Account within the Sinking Fund and used solely to pay interest on the Series 2011A Bonds.

(b) Proceeds (net of Underwriters' discount) from the sale of the Series 2011B Bonds shall be applied as follows:

(1) An amount equal to the Reserve Account Requirement for the Series 2011B Bonds shall be deposited into the applicable subaccount of the Debt Service Reserve Account or, if applicable, an amount equal to the premium payable for the Reserve Account Insurance Policy shall be paid to the Provider and such Reserve Account Insurance Policy shall be held by the Bond Registrar to the credit of the applicable subaccount of the Debt Service Reserve Account for the benefit of the Series 2011B Bonds and the holders thereof.

(2) An amount which is equal to the principal of and accrued interest on the Note, shall be transferred to Wells Fargo Bank, National Association, as holder of the Note.

(3) An amount of proceeds to be determined by the City Manager shall be deposited in a separate account designated "City of Miami Special Obligation Non-Ad Valorem Revenue Refunding Bonds Series 2011B Cost of Issuance Account" which is hereby established with the City and shall be disbursed for payment of expenses incurred in connection with the issuance of the Series 2011B Bonds (including payment of the expenses of the City); provided that the premium for a Bond Insurance Policy, if any, may be paid on behalf of the City by the Underwriters directly to the Provider. Any



balance remaining after payment or provision for payment of such costs and expenses has been made shall be transferred to the applicable subaccount of the Interest Account within the Sinking Fund and used solely to pay interest on the Series 2011B Bonds.

SECTION 3.04. Covenants of the City. The City hereby covenants and agrees with the holders of any and all of the Bonds issued pursuant to this Resolution as follows:

(a) Covenant to Budget and Appropriate. The City covenants and agrees to budget and appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues lawfully available in each Fiscal Year, amounts sufficient to satisfy (i) the Annual Debt Service Requirement for such Fiscal Year, (ii) any deposits required to be made into the Debt Service Reserve Account during such Fiscal Year, (iii) any other amounts due the Providers of any Bond Insurance Policy, Reserve Account Insurance Policy or Reserve Account Letter of Credit and the Bond Registrar during such Fiscal Year and (iv) any Rebate Amount due during such Fiscal Year as provided in Section 3.04(h). Such covenant and agreement on the part of the City to budget and appropriate such amounts of Non-Ad Valorem Revenues shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant of the City, the City does not covenant to maintain any services or programs, now provided or maintained by the City, which generate Non-Ad Valorem Revenues.

Such covenant to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Revenues, nor does it preclude the City from pledging in the future its Non-Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the Bondholders, the Providers of any Bond Insurance Policy, Reserve Account Insurance Policy or Reserve Account Letter of Credit or the Bond Registrar a prior claim on the Non-Ad Valorem Revenues as opposed to claims of general creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non-Ad Valorem Revenues heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein shall have the effect of making available in the manner described herein Non-Ad Valorem Revenues and placing on the City a positive duty to budget and appropriate, by amendment, if necessary, amounts sufficient to meet its obligations hereunder; subject, however, in all respects to the restrictions of Section 166.241(2), Florida Statutes, which provides, in part, that the governing body of each municipality make appropriations for each Fiscal Year which, in any one year, shall not exceed the amount to be received from taxation or other revenue sources; and subject further, to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law.

(b) Disposition of Non-Ad Valorem Revenues. There is hereby created and established the "City of Miami Special Obligation Non-Ad Valorem Revenue Refunding Bonds Sinking Fund" (hereinafter referred to as the "Sinking Fund"). There are also hereby created four (4) separate Accounts in the Sinking Fund to be known as the "Interest Account," the "Principal Account," the "Bond Redemption Account" and the "Debt Service Reserve Account." There are hereby further created within each Account a separate subaccount for the Series 2011A Bonds and for the Series 2011B Bonds. The Sinking Fund, the Accounts and subaccounts therein shall be held by the City in an Authorized Depository.

C-5



Non Ad-Valorem Revenues appropriated in each Fiscal Year for the purposes under the provisions of Section 3.04(a) above shall be applied in the following manner:

(1) To the full extent necessary, for deposit into each subaccount of the Interest Account in the Sinking Fund, on the fifth (5th) day preceding each Interest Payment Date, such sums as shall be sufficient to pay the interest becoming due on the Bonds on each such Interest Payment Date; provided, however, that such deposits for interest shall not be required to be made into the applicable subaccount of the Interest Account to the extent that money on deposit therein is sufficient for such purpose.

The City shall, on each Interest Payment Date, transfer to the Bond Registrar moneys in an amount equal to the interest due on such Interest Payment Date or shall, prior to such Interest Payment Date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such Interest Payment Date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit, if any, on deposit in the appropriate subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable.

(2) (A) To the full extent necessary, for deposit into each subaccount of the Principal Account in the Sinking Fund, on the fifth (5th) day preceding each principal maturity date, the principal amount of Serial Bonds which will mature and become due on such maturity date; provided, however, that such deposits for principal shall not be required to be made into the applicable subaccount of the Principal Account to the extent that money on deposit therein is sufficient for such purpose.

The City shall, on each principal payment date, transfer to the Bond Registrar moneys in an amount equal to the principal due on such principal payment date or shall, prior to such principal payment date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such principal payment date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit, if any, on deposit in the appropriate subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable.

(B) To the full extent necessary, for deposit into each subaccount of the Bond Redemption Account, if applicable, in the Sinking Fund on the fifth (5th) day preceding each redemption or maturity date, the Amortization Requirements as may be necessary for the payment of any Term Bonds payable from such subaccount of the Bond Redemption Account on such redemption or maturity date; provided, however, that such deposits for Amortization Requirements shall not be required to be made into the applicable subaccount of the Bond Redemption Account to the extent that money on deposit therein is sufficient for such purpose.

The moneys in such subaccount of the Bond Redemption Account shall be used solely for the purchase or redemption of Term Bonds payable therefrom. The City may at any time purchase any of said Term Bonds or portions thereof at prices not greater than the then redemption price of said Term Bonds. If the Term Bonds are not then redeemable, the City may purchase said Term Bonds at prices not greater than the redemption price of such Term Bonds on the next ensuing redemption date. The City shall be mandatorily obligated to use any moneys in such subaccount of the Bond Redemption Account for the redemption prior to maturity of such Term Bonds in such



manner and at such times as the same are subject to mandatory redemption. If, by the application of moneys in a subaccount of the Bond Redemption Account, the City shall purchase or call for redemption in any year Term Bonds in excess of the Amortization Requirements for such year, such excess of Term Bonds so purchased or redeemed shall be credited in such manner and at such times as the Director of Finance shall determine over the remaining payment dates.

The City shall, on each redemption or maturity date, transfer to the Bond Registrar moneys in an amount equal to the payments due on any Term Bonds on such redemption or maturity date or shall, prior to such redemption or maturity date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such redemption or maturity date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the applicable subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable.

(3) To the full extent necessary, for deposit into each subaccount of the Debt Service Reserve Account in the Sinking Fund on the fifteenth (15th) day of each month in each year, beginning with the fifteenth (15th) day of the first full calendar month following the date on which there is a deficiency in the amount required to be on deposit in the subaccounts of the Debt Service Reserve Account, such sums as shall be at least sufficient to pay an amount equal to one-twelfth (1/12) of the difference between the amount on deposit in the subaccounts of the Debt Service Reserve Account (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) and the Reserve Account Requirement; provided, however, that no payments shall be required to be made into any subaccount of the Debt Service Reserve Account whenever and as long as the amount on deposit therein (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) shall be equal to the Reserve Account Requirement for such series of Bonds.

Moneys in the subaccounts of the Debt Service Reserve Account shall be used only for the purpose of making payments of principal of and interest on the corresponding series of Bonds when the moneys in any other subaccount of any Account held pursuant to this Resolution and available for such purpose are insufficient therefor. Moneys on deposit in a subaccount shall only be used for the corresponding series of Bonds.

Any moneys in the subaccounts of the Debt Service Reserve Account in excess of the Reserve Account Requirement for such series of Bonds may, in the discretion of the City, be transferred to and deposited in the applicable subaccount of the Interest Account, the Principal Account or the Bond Redemption Account as the City at its option may determine.

Notwithstanding the foregoing provisions, in lieu of or in substitute for the required deposits (including existing deposits therein) into the subaccounts of the Debt Service Reserve Account, the City may cause to be deposited into the subaccounts of the Debt Service Reserve Account a Reserve Account Insurance Policy or a Reserve Account Letter of Credit for the benefit of the Holders of the corresponding series of Bonds Outstanding, which Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be payable or available to be drawn upon, as the case may be (upon the



giving of notice as required thereunder), on any Interest Payment Date or principal payment date or mandatory redemption date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to this Resolution and available for such purpose. If a disbursement is made under the Reserve Account Insurance Policy or the Reserve Account Letter of Credit, the City shall be obligated to either (i) reinstate the maximum limits of such Reserve Account Insurance Policy or Reserve Account Letter of Credit within twelve months by increasing the amount payable or available to be drawn thereunder in equal monthly amounts over such twelve month period, or (ii) deposit, on a monthly basis in accordance with the first paragraph of this Section 3.04(b)(3), into the applicable subaccount of the Debt Service Reserve Account from the Non-Ad Valorem Revenues appropriated in accordance with Section 3.04(a) hereof, funds in the amount of the disbursements made under such Reserve Account Insurance Policy or Reserve Account Letter of Credit, or a combination of such alternatives as shall equal the Reserve Account Requirement for the applicable series of Bonds Outstanding.

In the event that upon the occurrence of any deficiency in the subaccounts of the Interest Account, the Principal Account or the Bond Redemption Account, the applicable subaccount of the Debt Service Reserve Account is then funded with one or more Reserve Account Insurance Policies and/or Reserve Account Letters of Credit, the City or the Bond Registrar, as applicable, shall, on an interest or principal payment date or mandatory redemption date to which such deficiency relates, draw upon or cause to be paid under such facilities, on a pro-rata basis thereunder, an amount sufficient to remedy such deficiency, in accordance with the terms and provisions of such facilities and any corresponding reimbursement or other agreement governing such facilities; provided however, that if at the time of such deficiency the applicable subaccount of the Debt Service Reserve Account is only partially funded with one or more Reserve Account Insurance Policies and/or Reserve Account Letters of Credit, prior to drawing on such facilities or causing payments to be made thereunder, the City shall first apply any cash and securities on deposit in the applicable subaccount of the Debt Service Reserve Account to remedy the deficiency and, if after such application a deficiency still exists, the City or the Bond Registrar, as applicable, shall make up the balance of the deficiency by drawing on such facilities or causing payments to be made thereunder, as provided in this paragraph. Amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be applied as set forth in the second paragraph of this Section 3.04(b)(3). Any amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be reimbursed to the Provider thereof in accordance with the terms and provisions of the reimbursement or other agreement governing such facility.

The subaccounts of the Debt Service Reserve Account shall be valued on the last day of each Fiscal Year and the value of securities on deposit therein shall be the lower of par, or if purchased at other than par, amortized value. Amortized value, when used with respect to securities purchased at a premium above or a discount below par, shall mean the value at any given date obtained by dividing the total premium or discount at which such securities were purchased by the number of interest payment dates remaining to maturity on such securities after such purchase and by multiplying the amount so calculated by the number of interest payment dates having passed since the date of purchase; and (i) in the case of securities purchased at a premium, by deducting the product thus obtained from the purchase price, and (ii) in the case of



securities purchased at a discount, by adding the product thus obtained to the purchase price.

(4) To the Providers, if any, and the Bond Registrar, as applicable, in payment of amounts payable to such parties during such Fiscal Year not paid pursuant to the above provisions.

Notwithstanding the foregoing or any other provision herein to the contrary, if any amount applied to the payment of principal of and redemption premium, if any, and interest on the Bonds that would have been paid from a subaccount in the Accounts in the Sinking Fund, is paid instead under the Bond Insurance Policy, amounts deposited in such relevant subaccount may be paid, to the extent required, to the Provider of the Bond Insurance Policy having theretofore made said corresponding payment.

(c) Investment of Funds. The Sinking Fund, including the Interest Account, Principal Account, Bond Redemption Account and Debt Service Reserve Account, and the subaccounts therein, and the Cost of Issuance Funds shall constitute trust funds and shall be invested by the City as provided in this Section 3.04(c).

Moneys on deposit in the subaccounts of the Interest Account, Principal Account, Bond Redemption Account, and the Cost of Issuance Funds may be invested in Permitted Investments maturing not later than the dates on which such moneys will be needed for the purposes of such fund or account.

Moneys on deposit in the subaccounts of the Debt Service Reserve Account may be invested in Permitted Investments maturing not later than five years from the date of deposit of such Permitted Investment into the applicable subaccount of the Debt Service Reserve Account.

All income and earnings received from the investment and reinvestment of moneys in the applicable subaccounts of the Interest Account, the Principal Account and the Bond Redemption Account in the Sinking Fund shall be retained in the respective subaccounts and applied as a credit against the obligation of the City to deposit moneys to such subaccounts pursuant to Section 3.04(b)(1) and Section 3.04 (b)(2)(A) and Section 3.04 (b)(2)(B) of this Resolution, respectively.

All income and earnings received from the investment and reinvestment of moneys in the subaccounts of the Debt Service Reserve Account in the Sinking Fund shall be retained in such subaccount of the Debt Service Reserve Account and applied as a credit against the obligation of the City to deposit moneys to such subaccount, unless the amount in such subaccount shall exceed the Reserve Account Requirement for such series of Bonds, in which event such excess may be applied in the manner set forth for excess amounts in the subaccount of the Debt Service Reserve Account, as described in Section 3.04 (b)(3).

All income and earnings received from the investment and reinvestment of moneys in the Cost of Issuance Fund and any excess amounts on deposit therein shall be transferred to the corresponding subaccounts of the Interest Account.

For the purpose of investing or reinvesting, the City may commingle moneys in the Funds and Accounts created and established hereunder in order to achieve greater investment income; provided that the City shall separately account for the amounts so commingled. The amounts required to be accounted for in each of the Funds and Accounts designated herein

C-6



may be deposited in a single bank account provided that adequate accounting procedures are maintained to reflect and control the restricted allocations of the amounts on deposit therein for the various purposes of such Funds and Accounts as herein provided. The designation and establishment of Funds and Accounts in and by this Resolution shall not be construed to require the establishment of any completely independent Funds and Accounts but rather is intended solely to constitute an allocation of certain revenues and assets for certain purposes and to establish such certain priorities for application of certain revenues and assets as herein provided.

(d) Books and Records. The City will keep separately identifiable accounting records for the Pledged Funds by the use of a fund established in accordance with generally accepted accounting principles, and any Holder of a Bond or Bonds issued pursuant to this Resolution, shall have the right at all reasonable times to inspect all records, accounts and data of the City relating thereto. Such records and accounts shall contain the statements required by generally accepted accounting principles applicable to governmental entities.

(e) No Impairment of Contract. The City has full power and authority to irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the Bonds. The pledge of such Pledged Funds, in the manner provided herein, shall not be subject to repeal, modification or impairment by any subsequent resolution, ordinance or other proceedings of the City so long as any Bonds are Outstanding hereunder. The City shall take all actions necessary and pursue such legal remedies which may be available to it either in law or in equity to prevent or cure any impairment by any entity other than the City within the meaning of this subsection.

(f) Discharge and Satisfaction of Bonds. The covenants, liens and pledges entered into, created or imposed pursuant to this Resolution may be fully discharged and satisfied with respect to all or a portion of the Bonds in any one or more of the following ways:

(1) by paying the principal of and interest on such Bonds when the same shall become due and payable; or

(2) by depositing in the applicable subaccount of the Interest Account, the Principal Account and the Bond Redemption Account and/or in such other accounts which are irrevocably pledged to the payment of such series of Bonds as the City may hereafter create and establish by resolution, certain moneys which together with other moneys lawfully available therefor, if any, shall be sufficient at the time of such deposit to pay when due the principal, redemption premium, if any, and interest due and to become due on said series of Bonds on or prior to the redemption date or maturity date thereof; or

(3) by depositing in the applicable subaccount of the Interest Account, the Principal Account and the Bond Redemption Account and/or such other accounts which are irrevocably pledged to the payment of such series of Bonds as the City may hereafter create and establish by resolution, moneys which together with other moneys lawfully available therefor, when invested in Government Obligations which shall not be subject to redemption prior to their maturity other than at the option of the holder thereof, will provide moneys which shall be sufficient to pay when due the principal, redemption premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof and delivering a verification report of a nationally recognized certified public accountant as to the adequacy of such deposit, together with investment earnings thereon, to pay when due the principal, redemption



premium, if any, and interest due or to become due on or prior to the redemption date or maturity date of the applicable series of Bonds.

(4) Notwithstanding the foregoing, all references to the discharge and satisfaction of Bonds shall include the discharge and satisfaction of any portion of the Bonds, any maturity or maturities of the Bonds, any portion of a maturity of the Bonds or any combination thereof.

Upon such payment or deposit in the amount and manner provided in this Section 3.04 (f), Bonds shall be deemed to be paid and shall no longer be deemed to be Outstanding for the purposes of this Resolution and all liability of the City with respect to said Bonds shall cease, terminate and be completely discharged and extinguished, and the Holders thereof shall be entitled to payment solely out of the moneys or securities so deposited; provided that in the event said Bonds do not mature and are not to be redeemed within the next succeeding sixty (60) days, the City shall have given the Bond Registrar irrevocable instructions to give, as soon as practicable, a notice to the Holders of said Bonds by first-class mail, postage prepaid, stating that the deposit of said moneys or Government Obligations has been made with an appropriate fiduciary institution acting as escrow agent solely for the Holders of said Bonds and other Bonds being defeased, and that said Bonds are deemed to have been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of and redemption premium, if any, and interest on said Bonds.

In the event that the principal or redemption price, if applicable, and interest due on the Bonds shall be paid by the Provider pursuant to the terms of the Bond Insurance Policy, the assignment and pledge created hereunder and all covenants, agreements and other obligations of the City to the Bondholders shall continue to exist and the Provider shall be subrogated to the rights of such Bondholders.

If any portion of the moneys deposited for the payment of the principal of and redemption premium, if any, and interest on any portion of Bonds is not required for such purpose, the City may use the amount of such excess free and clear of any trust, lien, security interest, pledge or assignment securing said Bonds or otherwise existing under this Resolution.

(g) Compliance with Tax Requirements. The City covenants and agrees to comply with the requirements applicable to it contained in the Code to the extent necessary to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. Specifically, without intending to limit in any way the generality of the foregoing, the City covenants and agrees:

To pay to the United States of America, at the times required pursuant to Section 148(f) of the Code, any rebate amount ("Rebate Amount") determined pursuant to Section 148(f) of the Code;

(1) To maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the Code;

(2) To refrain from using proceeds from the Bonds in a manner that would cause the Bonds or any of them, to be classified as private activity bonds under Section 141(a) of the Code; and



(3) To refrain from taking any action that would cause the Bonds, or any of them, to become arbitrage bonds under Section 148 of the Code.

SECTION 3.05. Events of Default; Remedies. Each of the following events is hereby declared an "event of default," that is to say if:

(a) payment of principal of any Bond shall not be made when the same shall become due and payable, either at maturity (whether by acceleration or otherwise) or on required payment dates by proceedings for redemption or otherwise; or

(b) Payments of any installment of interest shall not be made when the same shall become due and payable; or

(c) the City shall fail to make any deposits required to be made hereunder or shall otherwise fail to comply with any of the covenants and obligations of the City hereunder and such failure shall continue unremedied for a period of thirty (30) days after such failure to deposit or other such occurrence; or

(d) an order or decree shall be entered, with the consent or acquiescence of the City, appointing a receiver or receivers of the City, or the filing of a petition by the City for relief under federal bankruptcy laws or any other similar law or statute of the Untied States of America or the State of Florida, which shall not be dismissed, vacated or discharged within thirty (30) days after the filing thereof; or

(e) any proceedings shall be instituted, with the consent or acquiescence of the City, for the purpose of effecting a composition between the City and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statutes now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Pledged Funds.

Notwithstanding the foregoing, with respect to the events described in clause (c), the City shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the City in good faith institutes appropriate curative action and diligently pursues such action until the default has been corrected.

SECTION 3.06. Enforcement of Remedies. Upon the happening and continuance of any event of default specified in Section 3.05, then and in every such case the owners of not less than twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding may appoint any state bank, national bank, trust company or national banking association qualified to transact business in Florida to serve as trustee for the benefit of the holders of all Bonds then outstanding (the "Default Trustee"). Notice of such appointment, together with evidence of the requisite signatures of the holders of twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding and the trust instrument under which the Default Trustee shall have agreed to serve shall be filed with the City and the Default Trustee and notice of such appointment shall be mailed to the registered holders of the Bonds. No more than one Default Trustee may be appointed and serving hereunder at any one time; however, the holders of a majority of the aggregate principal amount of the Bonds Outstanding may remove the Default Trustee initially appointed and appoint a successor and subsequent successors at any time. If the default for which the Default Trustee was appointed is cured or waived pursuant to this Section 3.06, the appointment of the Default Trustee shall terminate with respect to such default.



After a Default Trustee has been appointed pursuant to the foregoing, the Default Trustee may proceed, and upon the written request of owners of twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding shall proceed, to protect and enforce the rights of the Bondholders under the laws of the State of Florida, including the Act, and under this Resolution, by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board, body or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herein or in aid of execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, all as the Default Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights.

In the enforcement of any remedy against the City under this Resolution the Default Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any City default becoming, and at any time remaining, due from the City for principal, interest or otherwise under any provisions of this Resolution or of such Bonds and unpaid, with interest on overdue payments of principal and, to the extent permitted by law, on interest, at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Default Trustee or of the Bondholders, and to recover and enforce any judgment or decree against the City, but solely as provided herein and in such Bonds, for any portion of such amounts remaining unpaid and interest, costs and expenses as above provided, and to collect (but solely from moneys in the Sinking Fund, the Reserve Fund and any other moneys available for such purpose) in any manner provided by law, the moneys adjudged or decreed to be payable.

SECTION 3.07. Effect of Discontinuing Proceedings. In case any proceeding taken by the Default Trustee or any Bondholder on account of any default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Default Trustee or such Bondholder, then and in every such case the City, the Default Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies and powers of the Default Trustee shall continue as though no such proceeding had been taken.

SECTION 3.08. Directions to Default Trustee as to Remedial Proceedings. Anything in this Resolution to the contrary notwithstanding, the holders of a majority of the aggregate principal amount of the Bonds Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Default Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Default Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions of this Resolution, and that the Default Trustee shall have the right to decline to follow any such direction which in the opinion of the Default Trustee would be unjustly prejudicial to Bondholders not parties to such direction.

SECTION 3.09. Restrictions on Actions by Individual Bondholders. No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust hereunder or for any other remedy hereunder unless such Bondholder previously shall have given to the Default Trustee written notice of the event of default on account of which such suit, action or proceeding is to be taken, and unless the holders of not less than twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding shall have made written request of the Default Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Default Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted

C-7



or to institute such action, suit or proceeding in its or their name, and unless, also, there shall have been offered to the Default Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, including the reasonable fees of its attorneys (including fees on appeal), and the Default Trustee shall have refused or neglected to comply with such request within a reasonable period of time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Default Trustee, to be conditions precedent to the execution of the powers and trusts of this Resolution or for any other remedy hereunder. It is understood and intended that no one or more owners of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Bondholders, and that any individual rights of action or any other right given to one or more of such owners by law are restricted by this Resolution to the rights and remedies herein provided.

Nothing contained herein, however, shall affect or impair the right of any Bondholder, individually, to enforce the payment of the principal of and interest on his Bond or Bonds at and after the maturity thereof, at the time, place, from the source and in the manner provided in this Resolution.

SECTION 3.10. Additional Debt.

(a) Issuance of Additional Indebtedness. The City will not issue any obligations (other than the Bonds authorized by Section 2.01 hereof) secured by or payable from the Pledged Funds, or any portion thereof, or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge, in each case, having priority to or being on a parity with the lien securing the Bonds issued pursuant to this Resolution upon the Pledged Funds or any portion thereof.

The City hereby agrees that it will not issue or incur any other debt obligation (other than the Bonds authorized by Section 2.01 hereof) secured by or payable from a covenant to budget and appropriate all or a portion of the City legally available Non-Ad Valorem Revenues or secured by or payable from specific Non-Ad Valorem Revenues, unless the issuance of such debt obligations complies with Section 3.10(b) hereof, as evidenced by a certificate of the Director of Finance filed with the Commission on or prior to the issuance or incurrence of such debt. If the Bonds authorized by Section 2.01 hereof are issued on separate dates, it is not necessary to comply with the provisions of Section 3.10(b) hereof.

(b) Anti-Dilution Test. The City may incur additional debt (other than the Bonds authorized by Section 2.01 hereof) that is payable from all or a portion of the Non-Ad Valorem Revenues only if the total amount of legally available Non-Ad Valorem Revenues for the prior Fiscal Year were (a) at least 2.00 times the aggregate Maximum Annual Debt Service of all debt (including all long-term financial obligations appearing on the City's most recent audited financial statements and the debt proposed to be incurred) to be paid from Non-Ad Valorem Revenues and not other funds of the City (collectively, "Debt"), including any Debt payable from one or several specific Non-Ad Valorem Revenue sources but only to the extent such Non-Ad Valorem Revenues are legally available to pay debt service on the Bonds, and (b) so long as the Bonds are outstanding and if a Reserve Account Insurance Policy is in effect, at least 1.00 times the obligation of the City to repay any costs then due and owing to the Provider of a Reserve Account Insurance Policy.



[END OF ARTICLE III]

ARTICLE IV

CONCERNING THE BOND REGISTRAR

SECTION 4.01. Appointment and Acceptance of Duties. The Bond Registrar shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing and delivering to the City a written acceptance thereof.

SECTION 4.02. Responsibilities of Bond Registrar. The recitals of facts contained herein and in the Bonds shall be taken as the statements of the City and the Bond Registrar assumes no responsibility for the correctness of the same. The Bond Registrar makes no representation as to the validity or sufficiency of this Resolution or of any Bonds issued thereunder or as to the security afforded by this Resolution, and the Bond Registrar shall not incur any liability in respect thereof. The Bond Registrar shall, however, be responsible for its representation contained in its certificate of authentication of the Bonds. The Bond Registrar shall be under no responsibility or duty with respect to the application of any moneys paid by the Bond Registrar in accordance with the provisions of this Resolution to or upon the order of the City. The Bond Registrar shall be under no obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect thereof, or to advance any of its own moneys, unless properly indemnified. The Bond Registrar shall not be liable in connection with the performance of its duties hereunder except for its own negligence, misconduct or default.

SECTION 4.03. Evidence On Which Bond Registrar May Act.

(a) The Bond Registrar, upon receipt of any notice, resolution, request, consent, order, certificate, report, opinion, bond, or other paper or document furnished to it pursuant to any provision of this Resolution, shall examine such instrument to determine whether it conforms to the requirements of this Resolution and shall be protected in acting upon any such instrument believed by it to be genuine and to have been signed or presented by the proper party or parties. The Bond Registrar may reasonably consult with counsel, who may or may not be counsel to the City, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it under this Resolution in good faith and in accordance therewith.

(b) Whenever the Bond Registrar shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this Resolution, such matter (unless other evidence in respect thereof be therein specifically prescribed) may be deemed to be conclusively proved and established by a certificate of the City Manager or the Director of Finance, and such certificate shall be full warrant for any action taken or suffered in good faith under the provisions of this Resolution upon the faith thereof; but in its discretion the Bond Registrar may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as it may deem reasonable.

(c) Except as otherwise expressly provided in this Resolution, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision hereof by the City to the Bond Registrar shall be sufficiently executed in the name of the City by the City Manager or the Director of Finance.



SECTION 4.04. Compensation. The City may agree with the Bond Registrar to pay to the Bond Registrar from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution. The City may also agree with the Bond Registrar to indemnify the Bond Registrar for any and all of its reasonable fees, costs and expenses resulting from any claim, liability or the like incurred in and about the performance of its powers and duties under this Resolution.

SECTION 4.05. Certain Permitted Acts. The Bond Registrar, individually or otherwise, may become the owner of any Bonds, with the same rights it would have if it were not a fiduciary. To the extent permitted by law, the Bond Registrar may act as depositary for, and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this Resolution, whether or not any such committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding.

SECTION 4.06. Merger or Consolidation. Any entity into which the Bond Registrar may be merged or converted or with which it may be consolidated or any entity resulting from any merger, conversion or consolidation to which it shall be a party or any entity to which the Bond Registrar may sell or transfer all or substantially all of its business, provided such entity shall be authorized by law to perform all duties imposed upon it by this Resolution, shall be the successor to the Bond Registrar without the execution or filing of any paper or the performance of any further act.

SECTION 4.07. Adoption of Authentication. In case any of the Bonds contemplated to be issued under this Resolution shall have been authenticated but not delivered, any successor Bond Registrar may adopt the certificate of authentication of any predecessor Bond Registrar so authenticating such Bonds and deliver such Bonds so authenticated; and in case any of the said Bonds shall not have been authenticated, any successor Bond Registrar may authenticate such Bonds in the name of the predecessor Bond Registrar, or in the name of the successor Bond Registrar, and in all such cases such certificate shall be fully effective.

SECTION 4.08. Resignation or Removal of Bond Registrar and Appointment of Successor. The Bond Registrar may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least 60 days' written notice to the Provider and the City. The Bond Registrar may be removed by the City at any time by an instrument filed with the Bond Registrar and the Provider signed by the City Manager or the Director of Finance. Any successor Bond Registrar shall be appointed by the City and shall be fully qualified to act in such capacity under the laws of the State, be willing and able to accept the office on reasonable and customary terms and be authorized by law to perform all the duties imposed upon it by this Resolution. The City shall notify the Provider of the appointment of any successor Bond Registrar. In the event of the resignation or removal of the Bond Registrar, the Bond Registrar shall pay over, assign and deliver any moneys held by it as Bond Registrar to its successor.

SECTION 4.09. Vacancy. If at any time hereafter the Bond Registrar shall resign, be removed, be dissolved, or otherwise become incapable of acting, by bankruptcy or otherwise, or if the bank, trust company or securities firm acting as Bond Registrar shall be taken over by any governmental official, agency, department or board, the position of Bond



Registrar shall thereupon become vacant. If the position of Bond Registrar shall become vacant for any of the foregoing reasons or for any other reasons, the City shall appoint a successor Bond Registrar.

If no appointment of a successor Bond Registrar shall be made pursuant to the foregoing provisions of this Section, the Holder of any Bond Outstanding hereunder or any retiring Bond Registrar may apply to any court of competent jurisdiction to appoint a successor Bond Registrar. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Bond Registrar.

[END OF ARTICLE IV]

ARTICLE V

EXECUTION OF INSTRUMENTS BY BONDHOLDERS

AND PROOF OF OWNERSHIP OF BONDS

SECTION 5.01. Proof of Execution of Documents and Ownership.

(a) Any request, direction, consent or other instrument in writing required by this Resolution to be signed or executed by Bondholders may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Bondholders in person or by their attorneys or legal representatives appointed by an instrument in writing. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of this Resolution and shall be conclusive in favor of the Bond Registrar with regard to any action taken by it under such instrument if made in the following manner:

(1) The fact and date of the execution by any person of any such instrument may be proved by the verification of any officer in any jurisdiction who, by the laws thereof, has power to take affidavits within such jurisdiction, to the effect that such instrument was subscribed and sworn to before him, or by an affidavit of a witness to such execution. Where such execution is on behalf of a person other than an individual, such verification shall also constitute sufficient approval of the authority of the signor thereof.

(2) The ownership of Bonds shall be proved by the registration books required to be maintained pursuant to the provisions of this Resolution.

Nothing contained in this Article shall be construed as limiting the Bond Registrar to such proof, it being intended that the Bond Registrar may accept any other evidence of the matters herein stated which it may deem sufficient.

(b) If the City shall solicit from the Holders any request, direction, consent or other instrument in writing required or permitted by this Resolution to be signed or executed by the Holders, the City may, at its option, fix in advance a record date for determination of Holders entitled to give each request, direction, consent or other instrument, but the City shall have no obligation to do so. If such a record date is fixed, such request, direction, consent or other instrument may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of

C-8



determining whether Holders of the requisite proportion of Bonds have authorized or agreed or consented to such request, direction, consent or other instrument, and for that purpose the Bonds shall be computed as of such record date.

(c) Any request or consent of the Holder of any Bond shall bind every future Holder of the same Bond in respect of anything done in pursuance of such request or consent.

[END OF ARTICLE V]

ARTICLE VI

MISCELLANEOUS PROVISIONS

SECTION 6.01. Modification or Amendment. Except as otherwise provided in the third paragraph hereof, no adverse material modification or amendment of this Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made after the issuance of any Bonds without the consent in writing of the Holders of more than fifty per centum (50%) in aggregate principal amount of the Bonds then Outstanding; provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon, or affect the promise of the City to pay the principal of and interest on the Bonds, as the same mature or become due, from the Pledged Funds or the Non-Ad Valorem Revenues as provided in Section 3.04(a) hereof, or reduce the percentage of Holders of Bonds required above for such modification or amendment, without the consent of the Holders of all the Bonds.

For the purposes of this Section 6.01, so long as the Bond Insurance Policy is in effect and the Provider has not defaulted in its obligations thereunder, the Provider shall be deemed the sole Holder of the Bonds.

This Resolution may be amended, changed, modified and altered without the consent of the Holders of Bonds or the Provider:

(a) to cure any ambiguity or formal defect or omission in this Resolution or supplemental resolutions or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions contained herein; or

(b) to grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders; or

(c) to add to the conditions, limitations and restrictions on the issuance of Bonds under the provisions of this Resolution, other conditions, limitations and restrictions thereafter to be observed; or

(d) to add to the covenants and agreements of the City in this Resolution other covenants and agreements thereafter to be observed by the City or to surrender any right or power herein reserved to or conferred upon the City; or

(e) to qualify the Bonds or any of the Bonds for registration under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended; or



(f) to qualify this Resolution as an "indenture" under the Trust Indenture Act of 1939, as amended; or

(g) to permit Bonds to be issued in book entry form with or without physical bonds; or

(h) to make such changes as may be necessary for the Bond Insurance Policy, a Reserve Account Insurance Policy or a Reserve Account Letter of Credit deposited in the Debt Service Reserve Account in connection with the issuance of the Bonds.

If at any time the City shall so request the Bond Registrar, the Bond Registrar shall cause a notice of a proposed supplemental resolution requiring the consent of Bondholders to be mailed, postage prepaid, to all Holders of Bonds then Outstanding at their addresses as they appear on the registration books. Such notice shall briefly set forth the nature of the proposed supplemental resolution and shall state that a copy thereof is on file at the designated corporate trust office of the Bond Registrar for inspection by all Bondholders. The Bond Registrar shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail the notice required by this Section, and any such failure shall not affect the validity of such supplemental resolution when consented to or approved as provided in this Section.

Whenever, at any time after the date of the mailing of such notice, the City shall have received an instrument or instruments purporting to be executed by the Holders of more than fifty per centum (50%) in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed supplemental resolutions described in such notice and shall specifically consent to and approve the adoption thereof, and the City shall file with the City Clerk a certificate signed by the City Manager that the Holders of such required percentage of Bonds have filed such consents, the City may adopt such supplemental resolution in substantially such form without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. It shall not be necessary for the consent of the Holders to approve the particular form of any proposed supplemental resolution, but it shall be sufficient if such consent shall approve the substance thereof.

If the Holders of more than fifty per centum (50%) in aggregate principal amount of the Bonds Outstanding at the time of the execution of such supplemental resolution shall have consented to and approved the adoption thereof as herein provided, no Holder shall have any right to object to the adoption of such supplemental resolution, or to object to any of the terms and provisions therein contained, or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the City from adopting the same or from taking any action pursuant to the provisions thereof.

SECTION 6.02. Severability of Invalid Provisions. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions, and shall in no way affect the validity of any of the other provisions of this Resolution or of the Bonds issued hereunder.

SECTION 6.03. Unclaimed Money. Notwithstanding any provisions of this Resolution, any money held by the Bond Registrar for the payment of the principal or redemption price of, or interest on, any Bonds and remaining unclaimed for five (5) years after the principal of all of the Bonds has become due and payable (whether at maturity or upon call



for redemption), if such money were so held at such date, or five (5) years after the date of deposit of such money if deposited after such date when all of the Bonds became due and payable, shall be repaid to the City free from the provisions of this Resolution, and all liability of the Bond Registrar with respect to such money shall thereupon cease; provided, however, that before the repayment of such money to the City as aforesaid, the City shall first publish at least once in a financial newspaper or journal published and of general circulation in New York, New York, a notice, in such form as may be deemed appropriate by the City with respect to the Bonds so payable and not presented, and with respect to the provisions relating to the repayment to the City of the money held for the payment thereof.

SECTION 6.04. Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity of interest on or principal of the Bonds or the date fixed for redemption of any Bonds shall be a Saturday, Sunday or a day on which the Bond Registrar is required, or authorized or not prohibited, by law (including executive orders) to close and is closed, then payment of such interest, principal or redemption price, as applicable, need not be paid by the Bond Registrar on such date but may be paid on the next succeeding business day on which the Bond Registrar is open for business with the same force and effect as if paid on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date of maturity.

SECTION 6.05. Controlling Law; Members of Commission Not Liable. The provisions of this Resolution shall be governed by, and interpreted in accordance with, the laws of the State. All covenants, stipulations, obligations and agreements of the City contained in this Resolution shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized by the Act and provided by the Constitution and laws of the State. No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of the Commission or the City in his individual capacity, and neither the members of the Commission nor any official executing the Bonds shall be liable personally on the Bonds or this Resolution or shall be subject to any personal liability or accountability by reason of the issuance or the execution of such Bonds.

SECTION 6.06. Further Authorizations. The City Manager, the City Clerk, the Director of Finance, the City Attorney and such other officers, employees and staff of the City as may be designated by the City Manager are each designated as agents of the City in connection with the issuance and delivery of the Bonds and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents and contracts on behalf of the City, that are necessary or desirable in connection with the execution and delivery of the Bonds, the refunding of the Refunded Loans, the refinancing of the Note and such other actions which are not inconsistent with the terms and provisions of this Resolution.

SECTION 6.07. Headings for Convenience Only. Any headings preceding the texts of the several articles and sections hereof shall be solely for convenience of reference and shall not constitute a part of this Resolution, nor shall they affect its meaning, construction or effect.

SECTION 6.08. Time of Taking Effect. This Resolution shall take effect immediately upon its adoption.



Footnotes: {1} If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission.

C-9


APPENDIX D

COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF MIAMI

FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010


COMPREHENSIVE

FISCAL YEAR ENDED SEPTEMBER 30TH, 2010

ANNUAL FINANCE REPORT

��

�� !�� "��#�� $%� &%'%

��"�� #� �� !�!(� )�"��!�

City of Miami, Florida Comprehensive Annual Financial Report

For the Fiscal Year Ended September 30, 2010

TABLE OF CONTENTS

I. INTRODUCTORY SECTION

PRINCIPAL CITY OFFICIALS ....................................................................................vLETTER OF TRANSMITTAL ................................................................................... vii CERTIFICATE OF ACHIEVEMENT ...................................................................... xiv ORGANIZATIONAL CHART ................................................................................... xv

II. FINANCIAL SECTION

Independent Auditor’s Report ........................................................................................1Management’s Discussion and Analysis ........................................................................3

Basic Financial Statements:

Government-wide Financial Statements Statement of Net Assets ................................................................................13Statement of Activities ..................................................................................14

Fund Financial Statements Governmental Funds Financial Statements

Balance Sheet ................................................................................................15Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets ................................................................16Statement of Revenues, Expenditures and Changes in Fund Balances .........................................................................................17Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities……………………………………………….. ..18

Fiduciary Funds Financial Statements Statement of Fiduciary Net Assets ................................................................19Statement of Changes in Fiduciary Net Assets .............................................20

Discretely Presented Component Units Statement of Net Assets ................................................................................21Statement of Activities ..................................................................................22

Notes to the Financial Statements ....................................................................25

Required Supplementary Information: Budgetary Comparison Schedules–Major Funds (General and Special Revenue):

General Fund .................................................................................................81Fire Rescue Services Fund ............................................................................82

Notes to the Required Supplementary Information ......................................83

Pension Schedules: Schedule of Funding Progress .......................................................................84

Combining and Individual Fund Statements and Schedules:

Nonmajor Governmental Funds: Fund Listing and Descriptions .....................................................................85Combining Balance Sheet ............................................................................90Combining Statement of Revenues, Expenditures and Changes

in Fund Balances ........................................................................................96 Budgetary Comparison Schedules – Non-major Governmental Funds:

Community Redevelopment Agency (ORA) Fund .....................................102Community Redevelopment Agency (MRA) Fund ....................................103Community Redevelopment Agency (SEOPW) Fund ................................104Homeless Fund ............................................................................................105Community Development Fund ..................................................................106Choice Housing Vouchers (Section 8) Fund ...............................................107State Housing Initiatives Program (SHIP) Fund .........................................108Convention Center Fund .............................................................................109Economic Development & Planning Services Fund ...................................110Net Offices Fund .........................................................................................111Parks and Recreations Fund ........................................................................112Police Services Fund ...................................................................................113Law Enforcement Trust Fund .....................................................................114Public Works Services Fund .......................................................................115City Clerk Services Fund ............................................................................116Local Option Gas Tax Fund ........................................................................117Emergency Services Fund ...........................................................................118General Special Revenue Fund ...................................................................119Department Improvement Initiatives Fund .................................................120Transportation & Transit Fund ...................................................................121Public Services Tax Fund………………………………………………. ..122Liberty City Revitalization Trust ................................................................123Virginia Key Beach Trust ...........................................................................124Gusman and Olympia Fund ........................................................................125General Obligation Bonds Fund .................................................................126Other Special Obligation Bonds Fund ........................................................127SEOPW Special Obligation Bonds Fund ....................................................128

Fiduciary Funds Combining Statement of Fiduciary Net Assets ...........................................130 Combining Statement of Changes in Fiduciary Net Assets ........................131

III. STATISTICAL SECTION (Unaudited)

Net Assets by Component ..........................................................................................134 Changes in Net Assets ...............................................................................................135 Governmental Activities Tax Revenues by Source ...................................................136 Fund Balances of Governmental Funds .....................................................................137 Changes in Fund Balances of Governmental Funds ..................................................138 General Government Tax Revenues by Source .........................................................139 Net Assessed Value and Estimated Actual Value of Taxable Property .....................140 Property Tax Rates – Direct and Overlapping Governments .....................................141 Principal Property Taxpayers .....................................................................................142 Property Tax Levies and Collections .........................................................................143 Ratios of Outstanding Debt by Type ..........................................................................144 Ratios of General Bonded Debt Outstanding .............................................................145 Direct and Overlapping Governmental Activities Debt .............................................146 Legal Debt Margin Information .................................................................................147 Pledged Revenue Coverage .......................................................................................148 Demographics and Economic Statistics .....................................................................149 Principal Employers ...................................................................................................150 Full-Time Equivalent City Government Employees by Function..............................151 Operating Indicators by Function ...............................................................................152 Capital Assets Statistics by Function/Program ..........................................................153

This page intentionally left blank

i

INTRODUCTORY SECTION

PRINCIPAL CITY OFFICIALS

LETTER OF TRANSMITTAL

CERTIFICATE OF ACHIEVEMENT

ORGANIZATIONAL CHART

i

City of Miami, FloridaPrincipal City Officials

September 30, 2010

MAYORTomás P. Regalado

CITY COMMISSIONWilfredo (Willy) Gort, ChairmanFrank X. Carollo, Vice-ChairmanMarc D. Sarnoff, Commissioner

Francis X. Suarez, CommissionerRichard P. Dunn II, Commissioner

CITY MANAGERTony E. Crapp, Jr.

CITY ATTORNEYJulie O. Bru

i

ii


iii

March 31, 2011 The Honorable Mayor, Members of the City of Miami Commission, and Citizens of the City of Miami, Florida Ladies and Gentlemen: The Comprehensive Annual Financial Report of the City of Miami, Florida (the “City”) for the fiscal year ended September 30, 2010 is hereby submitted. This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the City’s assets from loss, theft or misuse and to compile sufficient reliable information for preparation of the City’s financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal control has been designed to provide reasonable, rather than absolute assurance that the financial statements will be free of material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. McGladrey & Pullen, LLP partnering with Sanson, Kline, Jacomino & Co., LLP and Sharpton, Brunson & Co., PA which are firms of licensed Certified Public Accountants, have audited the City’s basic financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended September 30, 2010 are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was reasonable basis for rendering an unqualified opinion that the City’s basic financial statements for the fiscal year ended September 30, 2010 were presented fairly in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally, and state mandated “Single Audit” designed to meet special needs of federal and state grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal control and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal and state awards.

iv

GAAP requires that management provides a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the independent auditors. The remainder of this letter provides an overview of the City government as well as local economic conditions and prospects for the future. PROFILE OF THE GOVERNMENT The City of Miami, Florida (the “City”), in the County of Miami-Dade, was incorporated in 1896, and has a population of 399,457, according to the 2010 census. The City is situated at the mouth of the Miami River on the western shores of Biscayne Bay and is a main port of entry into Florida and is the county seat of Miami-Dade County, Florida. The City comprises 34.3 square miles of land and 19.5 square miles of water. The City Charter was adopted by the electors of the City of Miami at an election held May 17, 1921 and legalized and validated by Chapter 9024 of the laws of the State of Florida of 1921. During fiscal year 1997, the residents of the City voted on a referendum that created the "mayor-city commissioner plan,” with the City Commission consisting of five members elected from single-member districts and an Executive Mayor who is responsible for appointing chief administrative officer, known as the City Manager. The City continues to provide the following services: police and fire protection, public works activities, solid waste collection, parks and recreational facilities, planning and development, community development, financial services, and general administrative services. The Florida Legislature, in 1955, approved and submitted to a general election, a constitutional amendment designed to give a new form of government to Miami-Dade County, Florida (the “County”). The County is, in effect, a municipality with governmental powers affecting thirty cities and unincorporated areas, including the City. The County has not displaced nor replaced the cities’ powers, but supplements them. The County can take over particular activities of the City's operations if the services fall below minimum standards set by the County Commission, or with the consent of the governing body of the City. Accordingly, the County’s financial statements are not included in this report. The accompanying financial statements include those of the City (the primary government) and those of its component units. Component units are separate organizations for which the primary government is financially accountable or organizations which should be included in the City’s financial statements because of the nature and significance of their relationship with the primary government. The decision to include a potential component unit in the City’s reporting entity is based on the criteria stated in GASB Statement No. 14 - The Financial Reporting Entity, which includes the ability to appoint a voting majority of an organization’s governing body, the ability of the City to impose its will on that organization, or the potential for the organization to provide specific financial benefits to, or impose specific financial burden on, the City. Based upon the application of the criteria in GASB Statement No. 14, the financial statements of the component units listed below have been included in the City’s reporting entity as either blended or discretely presented component units.

v

BLENDED DISCRETELY PRESENTEDSoutheast Overtown Park West CRA Miami Sports and Exhibition AuthorityOMNI CRA Downtown Development AuthorityMidtown CRA Department of Off-Street ParkingVirginia Key Beach Park Trust Bayfront Management TrustLiberty City Revitalization District Trust Health Facility AuthorityNeighborhood Improvement Districts Civilian Investigative Panel

Coconut Grove Business Improvement District Blended component units, although legally separate entities, are, in substance, part of the City's operations. Specifically, because by definition the City is financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. Accordingly, data from these component units are included with data of the primary government. Each discretely presented component unit, on the other hand, is reported in a separate column in the financial statements to emphasize that they are legally separate from the City. The financial activities and balances for each blended and discretely presented component unit are as of and for the year ended September 30, 2010. The annual budget serves as the foundation for the City’s financial planning and control. All departments and component units of the City are required to submit requests for appropriation to the City’s Budget Department. Prior to August 31st, the City Manager submits to the City Commission a proposed operating budget by fund, except for the General Fund which is at the departmental level, for the fiscal year commencing the upcoming October 1st. The Mayor shall prepare and deliver a budgetary address annually to the people of the City between July 1st and September 30th. Such report shall be prepared after consultation with the City Manager. The City Commission is required to hold public hearings on the proposed budget and to adopt the final budget no later than September 30th, the close of the City’s fiscal year. The budget is legally enacted through the passage of a resolution and adoption of the budget report. Management may not make changes to the adopted budget without the approval of a majority vote of the City Commission. The City Commission may transfer among departments any part of an unencumbered balance of an appropriation to a purpose for which an appropriation for the current year has proved insufficient. At the close of each fiscal year, the unencumbered balance of each appropriation reverts to the fund from which it was appropriated and is subject to future appropriations. Budgets are monitored at varying levels of classification detail that include both personnel and operating as appropriation designations; however, budgetary control is legally maintained at the fund level except for the General Fund, which is maintained at the departmental operating level. Budget-to-actual comparisons are provided in this report for each major individual governmental fund for which an appropriated annual budget has been adopted. For all non-major governmental funds with appropriated annual budgets, this comparison is presented in the combining and individual fund section of this report.

vi

ECONOMIC CONDITION AND OUTLOOK In fiscal year 2009 the City of Miami began to experience the negative impacts of property tax reform and a slowing housing market being felt statewide. However, unlike other cities throughout the state and nation, continued new investment has helped to stabilize the City’s tax base, which was reduced to $39.684 billion, this fiscal year. This downward trend has continued; as significant improvements in the housing market have yet to be experienced, resulting in an additional decline in the City’s tax base of $2.535 billion; bringing the City’s total tax base value in fiscal year 2010 to $37.149 billion. However, our regional economic base remains diversified, comprised of wholesale and retail trade, construction, light manufacturing, and tourism. The City has made great strides in the areas of telecommunications and biomedical industries. Located in the center of a hemispheric market of more than 700 million people, and easily accessible to South and Central America, the Caribbean, Europe and Africa, Miami’s strategic location and international commerce infrastructure make it the ideal location for international trade. As a result of expanding economies in several Latin American countries, international trade has been growing at double-digit rates in the Miami area. Airport/Seaport In 2010, the Miami International Airport (MIA) served nearly 41.6 million passengers, with nearly 50% of those being international passengers. MIA also shipped 1.7 million tons of domestic and international cargo during the year. MIA ranks among the top 5 in domestic airports for international freight and passenger volume. Currently, MIA has a $6.2 billion Capital Improvement Program being implemented, including a new runway, terminal, and cargo facility that is scheduled for completion in the winter of 2011. In 2009, the Port of Miami handled over 4.1 million cruise passengers; there was no increase from the prior year. This port is considered the Cruise Capital of the World, boasting more home-ported cruise ships than any other seaport. On the commercial side, the Port handled 6.8 million tons of cargo during the current year, an 8% reduction from last year. In an attempt to improve business to the Port, the City of Miami, Miami-Dade County, and the Florida Department of Transportation entered into an interlocal agreement that approved the financing for the construction of a tunnel into the Port of Miami. The Port Tunnel Project is estimated to cost just over $600 million, and is expected to create an economic benefit to the local economy of $1.3 billion and the creation and retention of 14,090 jobs. Currently, the Port of Miami generates $2.2 billion and creates 17,300 jobs to benefit the local economy. Arenas/Entertainment Venues The Performance Arts Center (PAC) operated by Miami-Dade County, serves as the host venue for many Off Broadway shows; Jazz, Opera, and Pop music concerts; and educational and cultural programs. The PAC has also served as the catalytic project spawning several hundreds of millions dollars in private investment in the surrounding communities of the Omni and Southeast Overtown Park West redevelopment districts. In February of 2008, the City, Miami-Dade County, and the Florida Marlins Major League baseball team entered into an Agreement to build a stadium on the site of the former Orange Bowl Stadium, in Little Havana. The Stadium, currently under construction is expected to cost approximately $600 million and will seat 37,000 people. The building and operation of the stadium, and City owned parking which includes over 53,000 square feet of adjacent retail and commercial development will have a significant positive economic impact on the City.

vii

Public/Private Development Ventures The City continues to collaborate with its local partners. In 2009, the City along with the Miami-Dade County School Board opened the College of Policing. Funded with Homeland Defense Bonds and a contribution from Miami-Dade County Public Schools, the facility will house the City’s Police Academy Class, the School for Professional Development, and an International Training Institute. In addition, building houses the MDCPS School for Law Studies, Homeland Security, and Forensic Sciences, the first of its kind. Additionally, the City is assessing the use and management of its public facilities and other assets. It is currently engaged in the process of restructuring its agreement with Hyatt Hotel located on city-owned property adjacent the James L Knight Miami Convention Center in downtown Miami. The restructuring is expected to include a sale of Garage 4, liquidation of existing debt encumbered on the garage and the convention center, and a renovation of the center to develop more usable convention space in the downtown area. American Recovery and Reinvestment Act of 2009 The American Recovery and Reinvestment Act (ARRA) is an unprecedented effort to jumpstart our economy, preserve or create jobs, make investments in infrastructure, energy and science and provide unemployment assistance, and state and local economic stabilization. The ARRA was signed into law by President Barrack Obama on February 17, 2009. The ARRA provides $787 Billion in spending and tax relief Projects. The federal legislation includes grant funds that are distributed in two ways: (1) directly to states and cities by formula, and (2) by competitive grants for which applicants must apply.

Through April 2010, over $37 million has been allocated to the City of Miami, and over $1 billion throughout Miami-Dade County in formulaic and competitive grant funding for projects. In addition to the funds received for projects, the City has leveraged stimulus funding provided through other agencies to provide over 200 temporary jobs to area residents.

LONG-TERM FINANCIAL PLANNING In order to meet the service demands of residents and visitors, the City continues to address the long-term financing necessary in order to fund the capital projects essential to the creation, improvement, enhancement, and preservation of public facilities and infrastructure. The City’s fiscal year 2010-2011, six-year Capital Improvement Plan, covering the period from October 1, 2010 through September 30, 2016, has earmarked funding estimated at $582 million for 327 projects throughout the City. Streets and sidewalks projects account for the largest portion of the total Capital Plan funding at $129.5 million or 22.3% Public Facilities projects represent the second largest portion of the plan at $126.3 million or 21.7%, and the Parks and Recreation projects are the third largest, accounting for $102.2 million, or 17.6%. Proceeds from the issuance of City bonds represent the largest share of funding for the Capital Improvement Plan, accounting for 45.6% of the value. Capital project revenues (impact fees, storm water utilities, optional gas tax, etc.) account for 25.4%, and State grants account for 13.6%. The remaining funding comes from a combination of Federal, Miami-Dade County, and other private donations and grants.

viii

RELEVANT FINANCIAL POLICIES Debt Management - The City operates within an established formal debt management policy, which applies to all new issuances of debt and all outstanding debt issues. The City continues to obtain, in an efficient and innovative manner, long-term financing for the construction or acquisitions of various long-term assets. The policy’s objective is to adequately plan and meet the City’s comprehensive construction demands for essential capital improvements and equipment, and, at the same time, ensure that the residents of the City are not overburdened with general obligation long-term debt payable from ad valorem taxes. Cash Management Policies and Practices - In order to achieve maximum financial return on all available funds, the Finance Department pursues an aggressive cash management and investment program within the constraints imposed by Florida Statutes and local policies adopted by resolution by the City Commission. The City operates within established formal investment policies, which apply to all investments of public funds. Idle cash balances are invested on a daily basis at the best interest rates available in the markets. Investments consist primarily of United States Treasury and agency securities, and commercial paper. For purposes of maximizing the interest earning yield on short-term investments, cash balances of all funds are pooled. The primary objective of the City's policy is preservation of capital. It is the City's policy not to invest in highly-leveraged derivatives. Investment income reported in these financial statements includes the adjustment to the fair value of the investments. Increases or decreases in fair value during the current year, however, do not necessarily represent trends that will continue, nor is it always possible to realize such amounts, especially in the case of temporary changes in the fair value of investments that the City intends to hold to maturity. Risk Management - The City administers a self-insurance program for workers' compensation, tort liability, property, and group health and life insurance programs, subject to certain stop-loss provisions. The health and life insurance programs are administered by an independent administrator. The City funds the program on a pay as you go basis. Insurance coverage is maintained with independent carriers for property damage to City facilities. The City maintains excess coverage with independent carriers for workers' compensation and general liability. MAJOR INITIATIVES The City’s emphasis continues to be on its plan to restore, maintain and beautify urban and residential infrastructure through a program of major renovations and improvements to City parks, streets, sidewalks, and drainage systems. While the external improvements are critical to promote further economic development, the City has also made strides to address the technology needs of the City’s administration. In October 2006 the City launched a City-wide Enterprise Resource Planning system (ERP) calling the project “iMiAMi”. In June of 2009 the City successfully implemented Phase II of the ERP system consisting of modules for payroll, human relations, and group benefits. CERTIFICATE OF ACHIEVEMENT The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Miami, Florida for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2009. The

ix

Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting. The attainment of this award represents a significant accomplishment by a government and its financial management.

In order to be awarded a Certificate of Achievement, the City had to publish an easily readable and efficiently organized CAFR, whose contents conform to established program standards. Such comprehensive reports must satisfy both generally accepted accounting principles and applicable legal requirements. To earn a Certificate of Achievement, a government must demonstrate constructive spirit of full disclosure to clearly communicate its financial story while enhancing the understanding of the logic underlying the traditional governmental financial reporting model.

The City's 2009 Comprehensive Annual Financial Report has been evaluated by an impartial Special Review Committee composed of other government officers, independent certified public accountants, educators, and others with particular expertise in government accounting and financial reporting. A Certificate of Achievement is valid for a period of one year. We believe that the 2010 Comprehensive Annual Financial Report continues to conform to the high standards of the Certificate of Achievement Program and we are submitting it to the GFOA for consideration.

The City has also received the award for Outstanding Achievement in Popular Annual Reporting for the September 30, 2009 Popular Annual Financial Report. This award is given for those reports whose contents conform to program standards of creativity, presentation, understandability and reader appeal.

ACKNOWLEDGEMENTS

The Comprehensive Annual Financial Report’s preparation was made possible through the efficient, dedicated and professional efforts of the entire staff in the Finance Department. The year-end closing procedures required prior to the audit could not have been accomplished without much hard work and personal sacrifice. Each member of the Department has our sincere appreciation for the contributions made to assist in the in-house preparation of this report.

The guidance and cooperation of the Mayor and City Commission in planning and conducting the financial affairs of the City is greatly appreciated. We also wish to express our appreciation to our Certified Public Accountants, McGladrey & Pullen, LLP partnering with Sanson, Kline, Jacomino & Co., LLP and Sharpton, Brunson & Co., PA for their cooperation and assistance. Lastly, we wish to express our appreciation to the City’s General Services Administration for the reproduction of this report.

CITY OF MIAMI Table of Organization

*Acting/Interim

Community Redevelopment

AgencyPieter Bockweg

DowntownDevelopment

AuthorityAlyce Robertson

Miami ParkingAuthority

Arthur Noriega

CivilianInvestigative Panel

Carol Abia *

General Employees &Sanitation Employees’

Retirement TrustSandra Elenberg

Bayfront Park Management Trust

Tim Schmand

Fire Fighter’s & PoliceOfficer’s Retirement

TrustRobert H. Nagle

Public FacilitiesMadeline Valdes

NETHaydee Wheeler

Grants AdministrationLillian Blondet *

Community Development

George Mensah

Solid WasteFred Hobson

Parks & RecreationErnest Burkeen

Luis CabreraChief of Operations

Assistant City Manager

GSAJose Camero

PlanningFrancisco Garcia

CIP & TransportationAlice Bravo

Public WorksNzerib Ihekwaba

Building / ZoningOrlando Toledo

Johnny MartinezDeputy City ManagerChief of Infrastructure

PurchasingKen Robertson

Risk ManagementGary Reshefsky

FinanceDiana Gomez

Larry M. SpringChief Financial

Officer

Other Agencies

Civil Service BoardTishria Mindingall

Strategic Planning, Budgeting & Performance

Mirtha Dziedzic

Employee RelationsBeverly Pruitt

Miguel ExpositoPolice Chief

Maurice KempFire Chief

Community Relations

Vacant

Code EnforcementSergio Guadix

InformationTechnology Dept.

Peter KorinisChief Information

Officer

AgendaElvi Gallastegui

EODPVacant

CommunicationsAngel Zayon

Miami Sports &Exhibition Authority

Tim Schmand

Audio Visual Braodcasting

OperationsMario Riquelme

Residents of Miami

City CommissionChairman: W. Gort

Vice-Chairman: F. CarolloCommissioner: R. Dunn, IICommissioner: M. Sarnoff

Commissioner: F. Suarez

Tony Crapp, Jr.Chief Administrator / City Manager

Tomas P. RegaladoExecutive Mayor

City AttorneyJulie O. Bru

Auditor GeneralVictor Igwe

City ClerkPriscilla A. Thompson

xi

xii


i

FINANCIAL SECTION

INDEPENDENT AUDITOR’S REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS

BASIC FINANCIAL STATEMENTS(Government-Wide Financial Statements)

(Fund Financial Statements)

NOTES TO THE FINANCIAL STATEMENTS

REQUIRED SUPPLEMENTARY INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

McGladrey is the brand under which RSM McGladrey, Inc. and McGladrey & Pullen, LLP serve clients’ business needs. Member of RSM International network, a network of The two firms operating as separate legal entities in an alternative practice structure. Independent accounting, tax and consulting firms

1

Independent Auditor’s Report

The Honorable Mayor, Members of the City Commission and City Manager City of Miami, Florida

We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Miami, Florida (the “City”), as of and for the year ended September 30, 2010, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of:

Component Units / Funds Classification• Southeast Overtown Park West Redevelopment Agency nonmajor special revenue fund• Omni Redevelopment Agency nonmajor special revenue fund• Miami Midtown Community Redevelopment Agency nonmajor special revenue fund• the Gusman and Olympia Special Revenue Fund nonmajor special revenue fund• Virginia Key Beach Park Trust nonmajor special revenue fund• Liberty City Community Revitalization District Trusts nonmajor special revenue fund• Firefighters’ and Police Officers’ Retirement Trust aggregate remaining fund information• General Employees’ and Sanitation Employees’ Retirement Trust aggregate remaining fund information

and Other Managed Trusts • Miami Sports and Exhibition Authority discretely presented component unit• Downtown Development Authority discretely presented component unit• Bayfront Park discretely presented component unit• Civil Investigative Panel discretely presented component unit

Those component units and funds represent the percentage of assets and revenues, where applicable, of the respective opinion units, as listed below:

Reporting Classification Total Assets Total Revenues• Governmental Activities 4% 5%• Aggregate Remaining Fund Information 93% 63%• Discretely Presented Component Units 14% 17%

Percentage of,

Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the component units and funds indicated above, is based on the reports of the other auditors.

2

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes considerations of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting, accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions.

In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Miami, Florida, as of September 30, 2010, and the respective changes in financial position, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued under separate cover our report dated March 31, 2011 on our consideration of the City’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The management’s discussion and analysis, the budgetary comparison information, and the schedule of funding progress are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We and the other auditors have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, the combining and individual fund financial statements and schedules, and the statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, based on our audit and the reports of other auditors, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.

Miami-Dade County, Florida March 31, 2011

3

MANAGEMENT’S DISCUSSION AND ANALYSIS

As management of the City of Miami, Florida (the “City”), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2010. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages iii – x of this report.

USING THIS ANNUAL REPORT

This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components; 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

FINANCIAL HIGHLIGHTS

� The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $534,779,379.

� The governmental activities revenue decreased by $15,600,831 (or 2.28%) and the net results from activities increased by $6,296,242 (or 7.45%). In 2010 and 2009, the results of activities produced a change in net assets of $(90,848,847) and $(84,552,605), respectively.

� The General Fund (the primary operating fund) reflected on a current financial resource basis, reflects a decrease in fund balance of $26,530,217 or (66.37%).

� The City’s total debt for bonds and loans had a net increase of $130,006,433 (or 21.55%) as of the close of the current fiscal year. New debt in the amount of $166,370,000 was issued in the current fiscal year.

Government-Wide Financial Statements

The government-wide financial statements (see pages 13 – 14) are designed to be corporate-like, in that all governmental activities are presented in columns that add to a total for the Primary Government. The focus of the Statement of Net Assets is designed to be similar to bottom line results for the City and its governmental activities. This statement reflects the governmental funds’ current financial resources (short-term spendable resources) with capital assets and long-term obligations. The primary government of the City does not report any business-type activities for financial reporting purposes.

The Statement of Activities (see page 14) is focused on both the gross and net cost of various functions (including governmental activities and component units), which are supported by the government’s general tax and other revenues. This is intended to summarize and simplify the user’s analysis of the cost of various governmental services and/or component units.

Discreetly presented component units, which are other governmental units over which the City can exercise influence and/or may be obligated to provide financial subsidies, are presented as a separate column in the government-wide financial statements. The focus of the statements is clearly on the primary government and the presentation allows the user to address the relative relationship with the component units.

The governmental activities reflect the City’s basic services, including police, fire, solid waste collection, parks and cultural activities, and general administration. Property taxes, other local taxes, and grants finance the majority of these activities.

4

Fund Financial Statements

Traditional users of governmental financial statements will find the Fund Financial Statements’ presentation more familiar. Their focus is on the City’s major funds. The fund financial statements provide more information about the City’s most significant funds – not the City as a whole.

The City’s fund types:

Governmental Funds – Most of the City’s basic services are included in governmental funds, which focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out, and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, a reconciliation is provided to facilitate the comparison between governmental funds and governmental activities.

The City maintains forty-one individual governmental funds. Information is presented separately in the governmental fund Balance Sheets and in the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund, Fire Rescue Services Special Revenue Fund, Emergency Services Special Revenue Fund, and the Streets and Sidewalks Capital Projects Fund, which are considered to be major funds. Data from the other thirty-seven governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for its General Fund, Special Revenue Funds, and Debt Service Funds. Budgetary comparison schedules have been provided for the General Fund and each major Special Revenue Fund that adopts a budget to demonstrate compliance with the budget. Such information is presented as required supplementary information.

The basic governmental fund financial statements can be found on pages 15 – 18 of this report.

Fiduciary Funds – These funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of these funds are not available to support the City’s own programs.

The basic fiduciary fund financial statements can be found on pages 19 – 20 of this report.

Notes to the Financial Statements – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 25 – 80 of this report.

Other Information – In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning budgetary comparisons and the City’s progress in funding its obligations to provide pension benefits to its employees. Required supplementary information can be found on pages 81 – 86 of this report.

The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 92 – 130 of this report.

5

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets exceed liabilities by $534,779,379 at the close of the most recent fiscal year.

The largest portion of the City’s net assets reflects its investment in capital assets (e.g. infrastructure, land, buildings, machinery and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the City’s net assets, 16.51%, represents resources that are subject to restrictions on how they may be used.

The remaining unrestricted net assets deficit of $306,011,074 is primarily due to outstanding borrowings of approximately $81.3 million for which there are no off-setting assets along with an increase in claims payable, pension obligation, and the recognition of the City’s Other Post Employment Benefits resulting from the implementation of GASB Statement No. 45. The following schedule reflects a summary of net assets compared to the prior year:

2010 2009Current and other assets 610,547,037$ 536,292,436$ Capital assets 1,118,784,875 1,110,188,318

Total assets 1,729,331,912 1,646,480,754 Other liabilities 192,130,358 157,179,124 Long-term liabilities 1,002,422,175 863,673,404

Total liabilities 1,194,552,533 1,020,852,528 Net assets:

Invested in capital assets, net of debt 752,506,507 791,005,790 Restricted 88,283,946 77,576,635 Unrestricted (Deficit) (306,011,074) (242,954,199) Total net assets 534,779,379$ 625,628,226$

Governmental Activities

Summary of Net Assets as of September 30,

6

The following table provides a summary of the City’s changes in net assets for the fiscal years ended September 30, 2010 and 2009.

2010 2009Revenues:Program revenues:

Charges for services 139,367,469$ 132,126,563$ Operating grants and contributions 73,139,270 64,645,980 Capital grants and contributions 27,113,487 33,964,265

General revenues:Property taxes 287,210,960 304,893,731 Franchise taxes 43,120,713 42,823,572 State revenue sharing - unrestricted 10,516,183 10,791,455 Sales and other use taxes 22,665,743 22,566,791 Public services tax 61,966,455 64,010,537 Investment earnings - unrestricted 3,217,623 7,718,282 Other - 377,558

Total revenues 668,317,903 683,918,734

Expenses:General government 152,726,749 155,197,585 Planning and development 12,019,294 15,465,304 Community development 39,654,938 37,126,171 Community redevelopment areas 29,288,203 20,565,676 Public works 69,969,816 72,003,282 Public safety 371,351,024 375,402,446 Public facilities 16,848,482 13,179,074 Parks and recreation 39,775,607 43,440,769 Interest on long-term debt 27,532,637 36,091,032

Total expenses 759,166,750 768,471,339 Change in net assets (90,848,847) (84,552,605) Net assets - Beginning 625,628,226 710,180,831 Net assets - Ending 534,779,379$ 625,628,226$

Changes in Net AssetsGovernmental Activities

Governmental Activities – As noted earlier, governmental activities decreased the City’s net assets by $90,848,847. The major changes are as follows:

The increase in charges for services of $7.2 million is primarily the result of the increase in revenue of $3 million from General Government, and $4.2 million from Public Safety.

The increase in operating grants and contributions of $8.5 million is primarily the result of increases in funding received in the current year relative to the prior year related to an increase of approximately $5 million to Community Development Department and approximately $3 million to Community Redevelopment Agency.

The decrease in capital grants and contributions of $6.9 million is primarily due to a decrease in General Government.

Property taxes revenues decreased by approximately $17.7million or 5.80% over the prior year. The City’s operating millage rate remained the same as the previous year at 7.6740 mills. However, the City’s overall property assessed value decreased by approximately $200 million which resulted in the decrease in property tax revenue.

7

Public Services Tax decreased by approximately $2.0 million due to a $5 million decreased communication taxes, and $3 million increase in Excise tax charge to electricity services.

Investment income decreased approximately $4.5 million due to historic low interest rates during fiscal year 2010. Additionally, the City had lower cash balances throughout the year than in the previous year.

General Government expenditures experienced a decrease $2.5 million from the prior year primarily as a result of personnel and operating costs.

Planning and Development Department expenditures decreased by $3.4 million due to a reduction in personnel and operating costs.

Community Development expenditures increased by $2.5million due to increases in Community Development Block Grant program which was made available to spend in the current fiscal year.

Community Redevelopment Agency expenditures increased by $8.7 million as a result of expenses incurred for new projects started during the current year in the respective redevelopment districts.

Public Works Department expenditure decreased $2 million due to a reduction in personnel and operating costs.

Public Safety experienced a decrease of approximately $4.1 million in expenditure from the prior year due primarily to decreases in personnel and operating costs.

Public Facilities experienced an increase of $3.7 million in expenditures from the prior year due primarily to capital expenditures.

Parks and Recreation expenditures decreased by $3.7 million due to a decrease in personnel and operating costs.

Interest expense on long-term debt and other related cost decreased by $8.6 million due to the amortization of accretion throughout the year.

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

Gen

Gov

t

Plan

& D

ev

Com

m D

ev

Com

m R

edev

Publ

ic W

orks

Publ

ic S

afet

y

Publ

ic F

acili

ties

Park

s & R

ec

Inte

rest

Expenses and Program Revenues - Governmental Activities

Expenses Revenues

8

REVENUE BY SOURCE – GOVERNMENTAL ACTIVITIES

FINANCIAL ANALYSIS OF THE CITY’S FUNDS

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds – The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

The General Fund is the chief operating fund of the City. At the end of the current fiscal year, there is no balance in the unreserved un-designated fund balance of the General Fund and $3,998,971 in the unreserved designated fund balance, while the total fund balance was $13,442,370. As a measure of the General Fund’s liquidity, it may be helpful to compare both unreserved fund balance and total fund balance to the fund’s total operational expenditures. Unreserved fund balance represents .08% of the total expenditures and transfers-out for recurring operational costs reported in other funds.

General Fund’s fund balance had a net decrease of $26,530,217 during the current fiscal year. Key factors in the overall decrease are as follows:

� Decrease in interest revenues of $4.5 million as a result of current market conditions

� Pension cost increased by approximately 26% from the prior year or $23 Million dollars.

Financial highlights of the City’s other major governmental funds are as follows:

The Fire Rescue Services Fund has a negative fund balance of $6,393,283 This deficit is due primarily to deferred revenues resulting from the timing of receiving grant related reimbursements from the Urban Areas Security Initiatives (UASI) and Urban Search and Rescue (USAR) programs.

The Emergency Services Fund has a deficit fund balance of $8,101,960 This deficit is due primarily to deferred revenues resulting from the timing of receiving grant related reimbursements for hurricane and emergency services related expenditures.

Charges for Services19.33%

Operating Grants &

Contributions9.45%

Property Taxes44.58%

Capital Grants &

Contributions4.97%

Franchise Taxes6.26%

Sales and Other Use

Taxes3.30%

State Revenue Sharing1.58%

Public Services Taxes9.36%

Investment Earnings1.13%

Other0.00%

9

The Street and Sidewalks Capital Projects Fund had a fund balance of $115,966,269; an increase of $60,260,329 in fund balance from the prior year can be attributed to the issuance of $65 million of new debt for ongoing projects.

GENERAL FUND BUDGETARY HIGHLIGHTS

The General Fund budget increased by $25,846,999 from the original budget that including transfers (an increase of 5.03%). The major components of this increase can be summarized as follows (please see budget to actual comparison on page 81):

� $ 13,887,361 increased allocation to the General Government Departments. � $ 2,152,493 increased allocation to the Parks and Recreation Department. � $4,121,908 increased allocation to the Risk Management Department. � $4,514,248 increased allocation to Transfers Out

Substantial portions of the net increase in allocations were funded by either revenue in excess of the original budget estimates or with the use of fund balance.

� General Government Departments were increased primarily to provide additional allocations for non-departmental support that was budgeted in other department in prior year.

� The budget for the Parks and Recreation Department was increased due to additional costs related to part-time employees needed for the summer programs.

� The budget for the Risk Management Department was increased to provide additional amounts necessary to cover outstanding litigated claims and to cover workman’s compensation medical paymentsover the original allocated budget

� The budget for Transfers Out was increased to allow for contributions to the special revenue funds in the amount of $5.2 million.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets,

At September 30, 2010, the City had a total of $1,118,784,875 net of accumulated depreciation, invested in a variety of capital assets as reflected in the following schedule, which represents a net increase (additions less retirements and depreciation) of $8,143,234 or .73% from the end of the prior year.

Capital Assets at Year End(Net of Depreciation)

GovernmentalActivities

2010 2009Land 91,904,132$ 88,330,219$ Construction-in-Progress 260,003,838 247,027,693 Buildings 70,975,141 72,704,779 Improvements 120,123,295 121,430,472 Machinery and Equipment 63,142,482 63,433,862 Infrastructure 512,635,987 517,261,293 Total 1,118,784,875$ 1,110,188,318$

Major capital asset events during the current fiscal year included the following:

10

� Construction in progress increased approximately $12.5 million due to the Marlin Stadium Garage and infrastructure project and other ongoing construction project in the City.

� Projects totaling approximately $46.4 million were closed during the fiscal year and were transitioned out of Construction in Progress.

Additional information on the City’s capital assets can be found in Note 1 on page 33 and Note 5 on page 47 in the notes to the financial statements.

Long-Term Debt

At the end of the current fiscal year, the City had total debt outstanding of $704,277,770. Of this amount, $31,310,000 is backed by the full faith and credit of the City and $234,494,455 is backed Limited Ad Valorem Tax Revenue; the remainder represents Special Obligation, Revenue bonds and loans securedsolely by Non-Ad Valorem revenue sources.

Outstanding DebtGeneral Obligation Bonds, Special Obligations

and Revenue Bonds and Loans

Governmental Activities2010 2009

General Obligation Bonds 265,804,455$ 276,113,503$ Special Obligation,

Revenue Bonds and Loans 438,473,315 289,055,544 Total 704,277,770$ 565,169,047$

The City’s net debt increased during the current fiscal year by $130,006,433 (or 21.25%) due to the issuance of new debt in the amount of $166,370,000.

The City maintained its bond rating on its general obligation debt of BBB+ from Standard & Poor’s, an A3from Moody’s, and an A- from Fitch Ratings.

Additional information on the City’s long-term liabilities can be found in Note 8 on 54-59 in the notes to the financial statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES

The budget process begins with the preparation of the financial outlook; a comprehensive review of allocation needs that are expected to be required by the City for its operations. These allocations include a review of salaries and wages (growth as dictated by negotiated union contracts); pension requirement needs, anticipated insurance premium increases, etc. These allocation needs are then compared to the City’s anticipated revenue inflows to determine whether these needs can be satisfied. It is with this analysis, along with the Mayor and City Commissioners’ feedback, and the City’s comprehensive strategic plan, that the guidelines for preparing the budget toolkit are determined and compiled into an all-inclusive instructional booklet that is then distributed to departments for their use in preparing their budget submissions. The City’s elected and appointed officials considered many factors when adopting the fiscal year 2011 budget. Included among these factors were uncertainties regarding pension costs, health insurance costs, other post employment benefit costs, and various other economic indicators.

The City of Miami, like many municipalities throughout the State, is experiencing the impact of a slowing economy. Recently approved property tax legislation, rising fuel prices, and increases in utility costs continue to impact every resident and business in the City. Recently approved State legislation along with a constitutional amendment passed by Florida voters, lowered the City’s taxable values while establishing controls on its millage rate (discussed below). This legislation and amendment was also a clear indication

11

by the people of the State of Florida that not enough was done in the previous year to provide property owners with tax relief.

In fiscal year 2011, the City adopted its operating millage rate at 7.6740 mills with a two-thirds vote and is anticipated to collect $226.3 million in property tax revenues. The millage rate recommended in the fiscal year 2011 budget required City officials to fully understand the impact property taxes were having on Miami residents and to become more creative in managing government.

The economic downturn has not only affected property tax values. Per the U.S. Department of Labor, the unemployment rate for South Florida is currently 12.1%, which is an increase of 7.44% from the prior year. This rate is higher than the State’s average unemployment rate of 11.7% and higher than the national average rate of 9.6%. The region’s inflation rate of 1.2% is significantly higher than the national indices of -1.1%.

All of these factors indicate that local economic conditions are not expected to be as favorable for fiscal year 2011 as compared to previous years. The continuing economic downturn further adds to the concern and uncertainty as to the overall revenue impact on local governments.

FINANCIAL CONTACT

The City’s financial statements are designed to present users (citizens, taxpayers, customers, investors, and creditors) with a general overview of the City’s finances and to demonstrate the City’s accountability. If users have questions about the report or need additional financial information, they should contact Director of the City of Miami’s Finance Department, 444 Southwest 2nd Avenue, Suite 618, Miami, Florida 33130, or visit the City’s web site at www.miamigov.com.

12


12

City of Miami, FloridaStatement of Net Assets

September 30, 2010

Governmental Component Activities Units

AssetsCash, Cash Equivalents, and Investments 248,097,823$ 25,102,548$ Receivables - Net 47,568,277 942,702 Accrued Interest 302,539 42 Due from Other Governments 30,580,943 35,540 Prepaids 3,117,847 621,387 Other Assets 60,270 224,629 Cash, Cash Equivalents, and Investments

related to Bond Proceeds 246,631,330 - Restricted Cash, Cash Equivalents, and Investments 24,511,097 10,751,706 Capital Assets:

Non-Depreciable 351,907,970 15,357,274 Depreciable - Net 766,876,905 67,191,863

Deferred Charges 9,676,911 2,084,042 Total Assets 1,729,331,912 122,311,733

LiabilitiesAccounts Payable and Accrued Liabilities 49,790,537 3,839,098 Due to Other Governments 12,804,905 4,898,678 Unearned Revenue 32,123,179 639,247 Deposits 5,893,119 175,540 Accrued Interest Payable 6,581,622 1,809,973 Non-Current Liabilities

Due Within One Year:Bonds and Loans Payable 29,565,938 1,025,000 Compensated Absences 13,672,940 500,091 Claims Payable 41,698,118 -

Due In More Than One Year:Bonds and Loans Payable 703,835,502 71,583,147 Compensated Absences 70,603,174 218,705 Claims Payable 138,730,140 - Other Post Employment Benefits 84,760,173 - Net Pension Obligation 4,493,186 -

Total Liabilities 1,194,552,533 84,689,479

Net AssetsInvested in Capital Assets - Net of Related Debt 752,506,507 25,653,779 Restricted for:

Capital Projects - 530,104 Debt Service 26,731,391 1,275,023 Law Enforcement 3,123,218 - Community Redevelopment 48,441,001 - Choice Housing Voucher Program 1,145,430 - E-911 8,671,478 - Storm Water 171,428 -

Unrestricted (Deficit) (306,011,074) 10,163,348 Total Net Assets 534,779,379$ 37,622,254$

The accompanying notes are an integral part of the financial statements.

13

City of Miami, FloridaStatement of Activities

For the Year Ended September 30, 2010

Net (Expenses) Revenue and Changes Program Revenues in Net Assets

Operating Capital Primary GovernmentFunctions/Programs Activities: Charges for Grants and Grants and Governmental ComponentPrimary Government: Expenses Services Contributions Contributions Activities Units

Governmental Activities:General Government 152,726,749$ 38,703,437$ 2,578,632$ 15,557,512$ (95,887,168)$ -$ Planning and Development 12,019,294 9,719,151 257,565 - (2,042,578) - Community Development 39,654,938 154,505 39,084,511 - (415,922) - Community Redevelopment Areas 29,288,203 1,274,758 12,105,277 - (15,908,168) - Public Works 69,969,816 46,479,565 209,582 - (23,280,669) - Public Safety 371,351,024 22,152,448 18,297,159 6,284,981 (324,616,436) - Public Facilities 16,848,482 14,636,371 - 3,236,957 1,024,846 - Parks and Recreation 39,775,607 6,247,234 606,544 2,034,037 (30,887,792) - Interest on Long-Term Debt 27,532,637 - - - (27,532,637) -

Total primary government 759,166,750$ 139,367,469$ 73,139,270$ 27,113,487$ (519,546,524) -

Component Units:Miami Sports Exhibition Authority 408,781$ -$ -$ -$ - (408,781) Department of Off-Street Parking 35,564,901 23,916,488 - - - (11,648,413) Downtown Development Authority 4,569,211 - - - - (4,569,211) Bayfront Park 3,028,952 2,879,826 - - - (149,126) Coconut Grove BID 1,448,487 - - - - (1,448,487) Civilian Investagative Panel 461,151 - 464,000 - - 2,849

Total component units 45,481,483$ 26,796,314$ 464,000$ -$ - (18,221,169)

General Revenues: Taxes: Property Taxes, levied for general purposes 264,548,387 6,043,005 Property Taxes, levied for debt service 22,662,573 - Franchise Taxes 43,120,713 - State Revenue Sharing - Unrestricted 10,516,183 - Sales and Other Use Taxes 22,665,743 - Public Service Taxes 61,966,455 - Investment Earnings - Unrestricted 3,217,623 415,556 Other - 464,246 Total General Revenues 428,697,677 6,922,807 Change in Net Assets (90,848,847) (11,298,362) Net assets - Beginning 625,628,226 48,920,616 Net assets - Ending 534,779,379$ 37,622,254$


14

City of Miami, FloridaBalance Sheet

Governmental FundsSeptember 30, 2010

OtherNon-Major Total

Fire Rescue Public General Street & Governmental GovernmentalGeneral Services Facilities Government Sidewalks Funds Funds

AssetsPooled Cash, Cash Equivalents and Investments 10,724,535$ -$ 99,326,096$ 77,787,167$ 118,793,082$ 188,098,273$ 494,729,153$ Restricted Cash, Cash Equivalents, and Investmen - - - - - 24,511,097 24,511,097 Receivables

(Net of Allowances for Uncollectibles):Accounts 17,990,106 - - 2,301,268 - 4,847,822 25,139,196 Loans Receivable - - - - 1,794 1,794 Taxes 20,776,548 - - - - 1,650,739 22,427,287 Due from Other Funds 19,845,844 - - - - - 19,845,844 Due from Other Governments 1,833,330 9,758,642 33,910 310,168 425,976 18,218,917 30,580,943

Accrued Interest 201,681 215 - 18,823 27,370 54,450 302,539 Prepaids 2,807,847 - - - - 310,000 3,117,847 Other Assets 41,858 - - - - 18,412 60,270

Total Assets 74,221,749$ 9,758,857$ 99,360,006$ 80,417,426$ 119,246,428$ 237,711,504$ 620,715,970$

Liabilities and Fund BalancesLiabilities:

Accounts Payable and Accrued Liabilities 30,900,479$ 902,546$ 3,228,883$ 536,147$ 2,863,849$ 11,358,633$ 49,790,537$ Due to Other Funds - 6,082,351 - - - 13,763,493 19,845,844 Due to Other Governments 1,385,556 - - - - 11,419,349 12,804,905 Deferred or Unearned Revenues 23,059,918 9,167,243 6,706,774 2,613,144 416,310 24,306,283 66,269,672 Deposits 5,433,426 - - - - 459,693 5,893,119

Total Liabilities 60,779,379 16,152,140 9,935,657 3,149,291 3,280,159 61,307,451 154,604,077

Fund Balances (Deficit):Reserved for:

Encumbrances - 1,479,726 579,335 - 6,387,323 15,828,130 24,274,514 Debt Service - - - - - 29,547,164 29,547,164 Storm Water 171,428 - - - - - 171,428 Prepaid Items 2,807,847 - - - - 310,000 3,117,847 Long-term Due from Other Funds 6,464,124 - - - - 6,464,124

Unreserved, Designated for -Subsequent Year's Expenditures, Reported in: -Future Settlements - - - - - 2,650,799 2,650,799 Strategic Initiatives 1,648,710 - - - - - 1,648,710 Management Initiatives 2,350,261 - - - - - 2,350,261

Unreserved, Undesignated Reported in:Special Revenue Funds - (7,873,009) - - - 82,225,275 74,352,266 Capital Projects Funds - - 88,845,014 77,268,135 109,578,946 45,842,685 321,534,780

Total Fund Balances (Deficit) 13,442,370 (6,393,283) 89,424,349 77,268,135 115,966,269 176,404,053 466,111,893 Total Liabilities and Fund Balances (Deficit) 74,221,749$ 9,758,857$ 99,360,006$ 80,417,426$ 119,246,428$ 237,711,504$ 620,715,970$


Major Funds

15

City of Miami, FloridaReconciliation of the Governmental Funds Balance Sheet

to the Statement of Net AssetsSeptember 30, 2010

Fund Balances - Total Governmental Funds (Page 17) 466,111,893$

Amounts reported for governmental activities in the Statement ofNet Assets are different because:

Capital assets used in governmental activities are not financialresources and therefore are not reported in the governmental funds.

Governmental Capital Assets 2,025,896,473$ Less: Accumulated Depreciation (907,111,598) 1,118,784,875

Grant revenues are reported as deferred revenue in the fund financialstatements due to availability of funds; under full accrual accounting they are reported as revenues. 22,524,654

Tax revenues are reported as deferred revenue in the fund financialstatements due to availability of funds; under full accrual accountingthey are reported as revenues. 11,621,839

Unamortized bond and loan issuance costs are not available to pay forcurrent period expenditures and therefore are not reported in the governmental funds. 9,676,911

Long-term liabilities are not due and payable in the current periodand therefore are not reported in the governmental funds.

Bonds, Notes, and Loans Payable (733,401,440) Compensated Absences (84,276,114) Claims Liability (180,428,258) Other Post Employment Benefit (84,760,173) Net Pension Obligation (4,493,186) Accrued Interest Payable (6,581,622) (1,093,940,793)

Net Assets of Governmental Activities (Page 14) 534,779,379$


16

City of Miami, FloridaStatement of Revenues, Expenditures and Changes In Fund Balances (Deficit)

Governmental FundsFor The Year Ended September 30, 2010

OtherNon-Major Total

Fire Rescue Public General Street & Governmental GovernmentalGeneral Services Facilities Government Sidewalks Funds Funds

RevenuesProperty Taxes 247,646,519$ -$ -$ -$ -$ 39,564,441$ 287,210,960$ Franchise and Other Taxes 36,448,254 - - - - 68,641,311 105,089,565 Licenses and Permits 25,149,775 - - - - 198,263 25,348,038 Fines and Forfeitures 4,298,283 - - - - 909,452 5,207,735 Intergovernmental Revenues 51,304,064 9,226,903 234,630 148,293 3,776,618 88,725,056 153,415,564 Charges for Services 78,129,829 1,146 60,000 - - 10,229,250 88,420,225 Interest 2,733,028 436 16,983 126,012 126,421 214,974 3,217,854 Impact Fees - - - - 12,089 - 12,089 Other 6,332,053 34,068 - 126,474 - 2,613,220 9,105,815

Total Revenues 452,041,805 9,262,553 311,613 400,779 3,915,128 211,095,967 677,027,845

ExpendituresCurrent Operating:

General Government 54,913,599 - - 4,120,879 85,205 9,158,814 68,278,497 Planning and Development 8,974,853 - - - - 365,339 9,340,192 Community Development - - - - - 39,157,777 39,157,777 Community Redevelopment Areas - - - - - 29,084,137 29,084,137 Public Works 51,276,106 - - - - 61,114 51,337,220 Public Safety 230,713,543 8,161,190 - - - 10,874,142 249,748,875 Public Facilities 4,389,912 - 3,358,556 - - 4,807,073 12,555,541 Parks and Recreation 23,755,930 - - - - 3,788,807 27,544,737 Risk Management 22,354,729 - - - - - 22,354,729 Pensions 89,975,265 - - - - - 89,975,265 Group Benefits 32,218,742 - - - - - 32,218,742

Debt Service:Principal - - - - - 27,261,275 27,261,275 Interest and Other Charges - - - - - 38,064,683 38,064,683

Capital Outlay - - 14,060,327 1,178,353 8,829,753 31,627,414 55,695,847 Total Expenditures 518,572,679 8,161,190 17,418,883 5,299,232 8,914,958 194,250,575 752,617,517

Excess (Deficiency) of RevenuesOver Expenditures (66,530,874) 1,101,363 (17,107,270) (4,898,453) (4,999,830) 16,845,392 (75,589,672)

Other Financing Sources (Uses)Transfers In 53,493,902 278,024 7,831,500 - 8,243,484 76,710,511 146,557,421 Transfers Out (13,493,245) - (253,501) (24,177,973) (617,565) (108,015,137) (146,557,421) Premium (Discount) on Debt - - (637,997) - (754,212) - (1,392,209) Issuance of Debt - - 88,030,732 - 58,388,452 19,950,816 166,370,000

Total Other Financing Sources (Uses) 40,000,657 278,024 94,970,734 (24,177,973) 65,260,159 (11,353,810) 164,977,791

Net Changes in Fund Balances (26,530,217) 1,379,387 77,863,464 (29,076,426) 60,260,329 5,491,582 89,388,119

Fund Balances (Deficit) - Beginning 39,972,587 (7,772,670) 11,560,885 106,344,561 55,705,940 170,912,471 376,723,774

Fund Balances (Deficit) - Ending 13,442,370$ (6,393,283)$ 89,424,349$ 77,268,135$ 115,966,269$ 176,404,053$ 466,111,893$


Major Funds

17

Net Changes in Fund Balances - Total Governmental Funds (Page 17) 89,388,119$

Amounts reported for governmental activities in the Statement of Activities are different because:

Grant revenues are reported as deferred revenue in the fund financial statements due to availabilityof funds; under full accrual accounting they are reported as revenues. 12,912,287

Revenues in the statement of activities for the previous year provided current financial resources and,as such, are reported as revenues in the funds for the current year. (21,622,229)

Governmental funds report capital outlays as expenditures. However, in the Statement of Activitiesthe cost of these assets is depreciated over their estimated useful lives.

Expenditures for Capital Assets 73,059,587$ Less: Current Year Depreciation (60,119,300)

12,940,287

The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, donations, etc) that decrease net assets. (4,343,732)

Repayment of bond and loan, principal is an expenditure in the governmental funds, butthe repayment reduces long-term liabilities in the Statement of Net Assets. Also, governmental fundsreport the effect of issuance costs, premiums, discounts, and similar items when debt is first issued,where as these amounts are deferred and amortized in the Statement of Activities.

Principal Paid on Bonds and Loans 27,261,277 Net effect of Deferring and Amortizing Issuance Costs, Premiums, Discounts, and Accretion 13,113,724 Issuance of Debt (166,370,000) (125,994,999)

Some items reported in the Statement of Activities do not require the use of curent financial resources and therefore are not reported as expenditures in governmental funds.

Compensated Absences 3,792,363 Claims Liability (25,313,084) Other Post Employment Benefits (31,216,564) Net Pension Obligation (201,826) Accrued Interest Payable (1,189,469) (54,128,580)

Change in Net Assets of Governmental Activities (Page 14) (90,848,847)$


For the Year Ended September 30, 2010

City of Miami, FloridaReconciliation of the Statement of Revenues, Expenditures

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities

18

City of Miami, FloridaStatement of Fiduciary Net Assets

Fiduciary FundsSeptember 30, 2010

EmployeeRetirement

FundsAssets

Cash and Short-Term Investments 44,172,827$ Accounts Receivable 20,393,792 Capital Assets 4,483,186 Prepaid Assets 35,307

69,085,112

InvestmentsU.S. Government Obligations 288,085,058 Corporate Bonds 351,370,737 Corporate Stocks 902,157,976 Money Market Funds and Commercial Paper 23,860,261 International Equity 130,611,436 Mutual Funds 89,767,560 Real Estate 127,481,989 Private Equity 31,255,519

Total Investments 1,944,590,536

Securities Lending Collateral 221,384,265 Total Assets 2,235,059,913

LiabilitiesObligations Under Security Lending 221,384,265 Accounts Payable 1,103,018 Accrued Liabilities 89,767,560 Payable for Securities Purchased 22,506,043

Total Liabilities 334,760,886

Net AssetsHeld in Trust for Pension Benefits 1,900,299,027$


19

City of Miami, FloridaStatement of Changes in Fiduciary Net Assets

Fiduciary FundsFor the Year Ended September 30, 2010

EmployeeRetirement

FundsAdditions

Contributions:Employer 84,809,858$ Plan Members 23,291,480

Total Contributions 108,101,338

Investment Earnings (Loss):Net Increase (Decrease) in Fair

Value of Investments 122,128,548Interest 32,067,816Dividends 14,103,128Other 902,384

Total Investment Gain (Loss) 169,201,876

Security Lending Activities:Security Lending Income 497,865Security Lending Fees and Rebates (122,526)Unrealized Gain 2,545,854

Net Income From Security Lending Activities 2,921,193

Less Investment Expenses 7,079,305Net Investment Gain (Loss) 162,122,571

Reimbursement Income from City 3,000,498Total 276,145,600

DeductionsBenefit Payments 164,109,926Refunds upon Resignation, Death, etc. 2,029,674Distribution to Retirees 17,236,918Administrative and Other Expenses 3,109,330

Total 186,485,848Change in Net Assets 89,659,752Net Assets - Beginning of Year 1,810,639,275Net Assets - End of Year 1,900,299,027$


20

City of Miami, FloridaStatement of Net Assets

Discretely Presented Component UnitsSeptember 30, 2010

Miami Sports Department Downtown Coconut Civilianand Exhibition of Off-Street Development Bayfront Grove Investigative

Authority Parking Authority Park BID Panel TotalAssets

Cash, Cash Equivalents and Investments 901,958$ 9,515,768$ 5,320,920$ 5,323,063$ 3,924,897$ 115,942$ 25,102,548$ Receivables (Net)

Accounts - 641,083 - 27,451 202,079 - 870,613 Taxes - - 72,089 - - - 72,089

Accrued Interest - 42 - - - - 42 Due From Other Government - 26,630 - - 8,910 - 35,540 Prepaids 7,124 533,085 52,289 12,308 16,581 - 621,387 Other Assets - 224,629 - - - - 224,629 Restricted Assets:

Cash, Cash Equivalents, and Investments 10,751,706 - - - - 10,751,706 Capital Assets:

Non-Depreciable - 14,280,022 - 1,077,252 - - 15,357,274 Depreciable, Net - 62,663,630 152,717 4,375,516 - - 67,191,863

Deferred Charges - 2,084,042 - - - - 2,084,042 Total Assets 909,082 100,720,637 5,598,015 10,815,590 4,152,467 115,942 122,311,733

LiabilitiesAccounts Payable and Accrued Liabilities - 2,457,697 334,170 883,170 128,765 35,296 3,839,098 Due to Other Governments - 4,898,678 - - - - 4,898,678 Unearned Revenue - 467,545 - 171,702 - - 639,247 Deposits - 145,355 - 30,185 - - 175,540 Accrued Interest Payable - 1,809,973 - - - - 1,809,973 Non-Current Liabilities

Due Within One Year:Bonds and Loans Payable - 1,025,000 - - - - 1,025,000 Compensated Absences - 500,091 - - - - 500,091

Due In More Than One Year:Bonds and Loans Payable - 71,540,935 - - - - 71,540,935 Other Post-Employment Benefit Obligation - 42,212 - - - - 42,212 Compensated Absences - 130,732 87,973 - - - 218,705

Total Liabilities - 83,018,218 422,143 1,085,057 128,765 35,296 84,689,479

Net AssetsInvested in Capital Assets, Net of Related Debt - 20,048,294 152,717 5,452,768 - - 25,653,779 Restricted for:

Debt Service - 1,275,023 - - - - 1,275,023 Capital Projects 107,463 - - - 422,641 - 530,104

Unrestricted (Deficit) 801,619 (3,620,898) 5,023,155 4,277,765 3,601,061 80,646 10,163,348 Total Net Assets 909,082$ 17,702,419$ 5,175,872$ 9,730,533$ 4,023,702$ 80,646$ 37,622,254$


21

City of Miami, FloridaStatement of Activities

Discretely Presented Component UnitsFor the Year Ended September 30, 2010

Program RevenuesOperating

Charges for Grants andExpenses Services Contributions

Miami SportsExhibition Authority

Culture and Recreation 408,781$ -$ -$ Total Miami Sports Exhibition Authority 408,781 - -

Departmentof Off-Street Parking

Transportation 35,564,901 23,916,488 - Total Department of Off-Street Parking 35,564,901 23,916,488 -

DowntownDevelopment Authority

Economic Development 4,569,211 - - Total Downtown Development Authority 4,569,211 - -

Bayfront ParkParks and Recreation 3,028,952 2,879,826 - Total Bayfront Park 3,028,952 2,879,826 -

Coconut Grove BIDGeneral Government 1,448,487 - Total Coconut Grove BID 1,448,487 - -

Civilian Investigative PanelGeneral Government 461,151 464,000 Total Civilian Investigative Panel 461,151 - 464,000

Total Component Units 45,481,483$ 26,796,314$ 464,000$

General Revenues: Taxes: Property Taxes, levied for general purposes Investment Earnings Other Total General Revenues Change in Net AssetsNet assets - BeginningNet assets - Ending


22

Net (Expense) Revenue andChanges in Net Assets

Miami Sports Department Downtown Coconut Civilianand Exhibition of Off-Street Development Bayfront Grove Investigative

Authority Parking Authority Park BID Panel Totals

(408,781)$ -$ -$ -$ -$ -$ (408,781)$ (408,781) - - - - - (408,781)

- (11,648,413) - - - - (11,648,413) - (11,648,413) - - - - (11,648,413)

- - (4,569,211) - - - (4,569,211) - - (4,569,211) - - - (4,569,211)

- - (149,126) - - (149,126) - - - (149,126) - - (149,126)

- - - - (1,448,487) (1,448,487) - - - - (1,448,487) - (1,448,487)

- - - - - 2,849 2,849 - - - - - 2,849 2,849

(408,781)$ (11,648,413)$ (4,569,211)$ (149,126)$ (1,448,487)$ 2,849$ (18,221,169)

- - 5,073,760 - 969,245 - 6,043,005 2,741 109,989 19,302 17,962 265,562 - 415,556

415 255,369 132,992 75,470 - - 464,246 3,156 365,358 5,226,054 93,432 1,234,807 - 6,922,807

(405,625) (11,283,055) 656,843 (55,694) (213,680) 2,849 (11,298,362) 1,314,707 28,985,474 4,519,029 9,786,227 4,237,382 77,797 48,920,616

909,082$ 17,702,419$ 5,175,872$ 9,730,533$ 4,023,702$ 80,646$ 37,622,254$

(8,116,652) 594,244 -

23

24


25

CITY OF MIAMI, FLORIDA NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

NOTE 1. – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements of the City of Miami, Florida (the City) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as applied to governmental units. The Governmental Accounting Standards Board (“GASB”) is the standard-setting body for governmental accounting and financial reporting. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units. The more significant of these accounting policies are described below. A. Reporting Entity The City, which is located in the county of Miami-Dade, was incorporated in 1896, and has a population of 399,457 according to the 2010 census. The City is situated at the mouth of the Miami River on the western shores of Biscayne Bay and is a main port of entry into Florida and is the county seat of Miami-Dade County, Florida. The City comprises 34.3 square miles of land and 19.5 square miles of water. The City’s Charter was adopted by the electors of the City of Miami at an election held on May 17, 1921 and was legalized and validated by Chapter 9024 of the laws of the State of Florida of 1921. During fiscal year 1997, the residents of the City voted on a referendum that created single-member districts and an Executive Mayor form of government. The City continues to operate under the Commission/City Manager form of government and provides the following services: police and fire protection, public works activities, solid waste collection, parks and recreational facilities, planning and development, community development, financial services, and general administrative services. The Florida Legislature, in 1955, approved and submitted to a general election, a constitutional amendment designed to give a new form of government to Miami-Dade County, Florida (the “County”). The County is, in effect, a municipality with governmental powers affecting thirty cities and unincorporated areas, including the City. The County has not displaced nor replaced the City’s powers, but supplements them. The County can take over particular activities of the City's operations if (1) the services fall below minimum standards set by the County Commission or (2) with the consent of the governing body of the City. Accordingly, the County’s financial statements are not included in this report. The accompanying financial statements include those of the City (the primary government) and those of its component units. Component units are legally separate organizations for which the primary government is financially accountable or organizations which should be included in the City’s financial statements because of the nature and significance of their relationship with the primary government. The decision to include a potential component unit in the City’s reporting entity is based on the criteria stated in GASB Statement No. 14 - The Financial Reporting Entity and GASB Statement No. 39 - Determining Whether Certain Organizations Are Component Units which includes the ability to appoint a voting majority of an organization’s governing body and (1) the ability of the City to impose its will on that organization or (2) the potential for the organization to provide specific financial benefits to, or impose specific financial burden on, the City.


26

Based upon the application of the criteria in GASB Statements No. 14 and 39, the financial statements of the component units listed on the following pages have been included in the City’s reporting entity as either blended or discretely presented component units. Blended component units, although legally separate entities, are in substance part of the City's operations. Accordingly, data from these component units are included with data of the primary government. Each discretely presented component unit, on the other hand, is reported in a separate column in the financial statements to emphasize that they are legally separate from the City. The financial activities and balances for each blended and discretely presented component unit are as of and for the year ended September 30, 2010. Blended Component Units SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (“SEOPW”)-SEOPW is an Agency established by the City in 1983 under the authority of Section 163.330, Florida Statutes and City Resolution No. 82-755. The purpose of the Agency is to eliminate blight and slum conditions within the redevelopment area of the agency pursuant to the redevelopment plans of the Agency for new residential and commercial activity of the Southeast Over-town Park West area. The City has entered into an interlocal agreement with Miami-Dade County approving the deposit of tax increments into the Redevelopment Trust Fund. The members of the City Commission are also the Board of Directors of the SEOPW. The City has issued debt for the SEOPW and is responsible under the interlocal agreement for disbursement, accountability, management, and proper application of all monies paid into the Trust. The funds of the SEOPW included within the reporting entity are special revenue fund (SEOPW CRA), a debt service fund (CRA - Other Special Obligation), and a capital projects fund (Community Redevelopment Agency). OMNI REDEVELOPMENT AGENCY (“ORA”)-ORA is an Agency established by the City in 1986 under the authority of Section 163.330, Florida Statutes and City Resolution No. 86-868. The purpose of the Agency is to eliminate blight and slum conditions within the redevelopment area of the agency pursuant to the redevelopment plans of the Agency for new residential and commercial activity of the Omni area. The City has entered into an interlocal agreement with Miami-Dade County approving the deposit of tax increments into the Redevelopment Trust Fund. The members of the City Commission are the Board of Directors of the ORA. The City is also responsible under the interlocal agreement for disbursement, accountability, management, and proper application of all monies paid into the Redevelopment Trust Fund. The ORA is included within the reporting entity as a special revenue fund (Omni CRA). MIDTOWN REDEVELOPMENT AGENCY (“MRA”)-MRA is an Agency established by the City in 2005 under the provisions of Section 163.330, Florida Statutes and City Resolution No. 05-002. The purpose of the Agency is to eliminate blight and slum conditions within the redevelopment area of the agency pursuant to the redevelopment plans of the Agency for new residential and commercial activity of the Midtown area. The MRA entered into an interlocal agreement with the City, Miami-Dade County, and the Midtown Community Development District whereby tax increments would be deposited into the Redevelopment Trust Fund. The members of the City Commission are the Board of Directors of the MRA. The City is also responsible under the interlocal agreement for disbursement, accountability, management, and proper application of all monies paid into the Redevelopment Trust Fund. The MRA is included within the reporting entity as a special revenue fund (Midtown CRA).


27

VIRGINIA KEY BEACH PARK TRUST (“VKBPT”) – On December 14, 2000 (and effective January 2001), via sections 38-230 through 38-242 of Chapter 38 of the Code of the City of Miami Ordinance 12003, the VKBPT was established and acts as a limited agency and instrumentality of the City of Miami. Its general purposes, in cooperation with City of Miami, are to preserve, restore, and maintain the Historic Virginia Key Beach Park in a manner consistent with environmental health, historical importance of the Park and the aspirations of the African American Community, make it accessible to the general public, propose policy, planning, and design to ensure maximum community utilization and enjoyment. The City Commission must approve VKBPT’s board membership and operating budget. The City considers itself the exclusive recipient of the services provided by VKBPT and therefore its operations are blended in the reporting entity as a special revenue fund. LIBERTY CITY COMMUNITY REVITALIZATION DISTRICT TRUST (“Liberty City”) – On July 10, 2001, via section 2-892 of Chapter 2 of the Code of the City of Miami ordinance 12082, Liberty City was established and acts as a limited agency and instrumentality of the City and provides services entirely or almost entirely to the primary government. Liberty City, in cooperation with the Department of Community Development and other City departments, is responsible for oversight and facilitating the City’s revitalization efforts for the redevelopment of the Liberty City Community Revitalization District in a manner consistent with the strategy identified in the Five-Year Consolidated Plan, adopted by the City Commission in August, 1999. Liberty City’s specific purpose is to purchase land and renovate capital assets that belong to the City of Miami. The City Commission must approve Liberty City’s board membership and operating budget. The City considers itself the exclusive recipient of the services provided by Liberty City and therefore its operations are blended in the reporting entity as a special revenue fund. NEIGHBORHOOD IMPROVEMENT DISTRICTS – There are four neighborhood improvement districts. All four districts were inactive during fiscal year 2010. Discretely Presented Component Units MIAMI SPORTS AND EXHIBITION AUTHORITY (“MSEA”) – The MSEA was created by the City in 1983 pursuant to Chapter 212.0305, Florida Statutes and City Ordinance No. 9662 adopted by the City Commission (as amended by City Ordinance No. 11155) and Section 213.0305 of the Florida Statutes to promote the development of sports, convention and exhibition facilities within the City, and attracting professional sports franchises and exhibitions to utilize the City’s and/or Authorities’ facilities. The City Commission must approve MSEA’s board membership and operating budget. Therefore, the City is financially accountable and is discretely presenting the MSEA in the accompanying financial statements. DEPARTMENT OF OFF-STREET PARKING OF THE CITY OF MIAMI, FLORIDA, d/b/a MIAMI PARKING AUTHORITY (“DOSP”) – The DOSP was originally created in 1955 by a special act of the Florida State Legislature (Laws of Florida Chapter 30.997, as amended) and subsequently incorporated into the City's Charter in 1968. The DOSP is an agency and instrumentality of the City which owns and operates parking facilities within the City. The City Commission has reserved the right to confirm new members of the DOSP Board, to establish and fix rates and charges for parking services, to approve the DOSP’s operating budget and to authorize the issuance of revenue bonds. Therefore, the City is financially accountable and is discretely presenting the DOSP in the accompanying financial statements.


28

DOWNTOWN DEVELOPMENT AUTHORITY (“DDA”) – The DDA was created by the City in 1965 pursuant to Chapter 65-1090 of the General Laws of Florida and City Code Section 14-25. The DDA is governed by a board appointed by the City Commission and was established for the purpose of furthering the development of the Downtown Miami area by promoting economic growth in the region and strengthening downtown’s appeal as a livable city as well as a regional, national and international center for commerce and culture. The City Commission must approve the DDA's operating budget and the millage levied on the special taxing district established to fund the DDA. Therefore, the City is financially accountable and is discretely presenting the DDA in the accompanying financial statements. BAYFRONT PARK MANAGEMENT TRUST (“BFP”) –The BFP was established by the City in 1987 under the authority of City of Miami Resolution No. 10348. The BFP was created for the purpose of managing and operating the events held at Bayfront and Bicentennial Park and the daily maintenance and upkeep of the grounds, its various amenities including the amphitheater and the Mildred and Claude Pepper Fountain. The governing body of the BFP consists of nine appointed members serving initial terms of one to three years. Upon expiration of an initial term, each successor member may be appointed by the City Commission for terms of one to three years. The BFP has appointed an executive director to act as the chief executive officer, subject to policy directives. The BFP prepares and submits an annual budget request and master plan to the City Commission for its approval for each fiscal year. Therefore, the City is financially accountable and is discretely presenting the BFP in the accompanying financial statements. HEALTH FACILITY AUTHORITY (“HFA”) – The HFA is an agency established by the City in 1979 under the authority of Chapter 154, Florida Statutes and City Resolution No. 79-93 to serve as a conduit to issue revenue bonds. The City Commission must approve the HFA’s board membership and operating budget. Therefore, the City is financially accountable and is discretely presenting the HFA in the accompanying financial statements. Debt obligations issued under the purview of the HFA do not constitute an indebtedness, liability or pledge of the faith or credit of the HFA or the City. The aggregate amount of conduit debt obligations totaled $144,790,000 at September 30, 2010. The HFA does not issue stand-alone audited financial statements. The only activity during the fiscal year was to service the debt outstanding. The debt service payments were made by Mercy Hospital and Miami Jewish Home. The City of Miami Health Facilities Authority conduit debt outstanding as of September 30, 2010 is as follows:

MiamiMercy Hospital Jewish Home Total

Series 1998A 10,025,000$ -$ 10,025,000$ Series 2002 35,000,000 - 35,000,000 Series 2003 14,285,000 - 14,285,000 Series 2008 33,595,000 - 33,595,000 Series 2009 29,635,000 - 29,635,000 Series 2005 - 22,250,000 22,250,000

Total 122,540,000$ 22,250,000$ 144,790,000$


29

Proceeds from these bond issues were used to finance construction of buildings and parking facilities; land acquisitions; equipment purchases including beds and other medical apparatus; renovation of existing facilities; and engineering costs. CIVILIAN INVESTIGATIVE PANEL (“CIP”) – The CIP was established by the City of Miami Commission Ordinance Number 12188 on February 14, 2002 for the purpose of creating an independent citizen’s oversight panel to conduct investigations related to allegations of police misconduct, review polices, practices and procedures of the police department and perform community outreach programs. The CIP consists of thirteen members who were originally appointed as follows: a) the Miami City Commission selects and appoints nine members, b) the Mayor selects three members whose names are ratified and appointed by the City Commission, and c) the Chief of Police of the City of Miami appoints one member, who serves at the will of the Chief of Police. The CIP prepares and submits an annual budget request to the City Commission for its approval for each fiscal year and is funded by the City of Miami. Therefore, the City is financially accountable and is discretely presenting the CIP in the accompanying financial statements. COCONUT GROVE BUSINESS IMPROVEMENT DISTRICT (“BID”) – In July 2004, pursuant to Resolution No. 12564, the City of Miami approved the establishment of the Coconut Grove Business Improvement Committee (“BIC”). The BIC was formed as an advisory committee to the City. During November 2008, the City tabulated the results of a special election for the creation of the Coconut Grove Business Improvement District (“BID”), where the BID was deemed to be approved a majority of the affected property owners. During March 2009, under City Ordinance No. 13059, the City approved to repeal the BIC and establish a new Coconut Grove Business Improvement District Board (“BID Board”) to stabilize and improve retail and other businesses in the BID area through promotion, management, marketing and other similar services, including, but not limited to, coordination, funding and implementation and maintenance of all infrastructure improvement, and other projects, utilizing BID assessment proceeds and other funds identified. The BID prepares and submits an annual budget request and master plan to the City Commission for its approval for each fiscal year. Therefore, the City is financially accountable and is discretely presenting the BID in the accompanying financial statements. Complete financial information of the individual component units may be obtained at the entity's respective administrative offices as follows: SEOPW / ORA/ MRA 49 NW 5th Street, Suite 100 Miami, Florida 33128-1811 VKBPT 4020 Virginia Beach Drive Miami, Florida 33149 Liberty City 4800 NW 12th Avenue Miami, Florida 33127-2218

MSEA 301 N. Biscayne Blvd. Miami, Florida 33132-2226 DDA 200 South Biscayne Blvd. Suite 2929 Miami, Florida 33131 DOSP 40 NW 3rd Street Suite 1103 Miami, Florida 33128

BFP 301 N. Biscayne Blvd. Miami, Florida 33132-2226 CIP 155 South Miami Ave Penthouse 1-B Miami, FL 33130-1609 BID 3390 Mary Street, Suite 130 Coconut Grove, FL 33133


30

B. Government-Wide Financial Statements

The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the non-fiduciary activities of the City and its component units. The primary government is reported separately from the legally separate component units. The Statement of Net Assets presents the financial position of the City and its component units at the end of its fiscal year. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items that are not deemed to be program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. All remaining non-major governmental funds are aggregated and reported as other non-major governmental funds. C. Fund Financial Statements The accounts of the City are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts which comprise its assets, liabilities, fund balances/net assets, revenues, and expenditures. Fund accounting segregates funds according to their intended purpose and it is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The City maintains the minimum number of funds consistent with legal and managerial requirements. The focus of governmental fund financial statements is on major funds as that term is defined in professional pronouncements. Each major fund is to be presented in a separate column, with non-major funds aggregated and presented in a single column. The City maintains fiduciary funds which are used to account for assets held by the City in a trustee capacity. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the government-wide statements’ governmental activities column, a reconciliation is presented on the statements or on the page following, which briefly explains the adjustments necessary to transform the fund-based financial statements into the governmental activities column of the government-wide presentation. The City reports the following major governmental funds: General Fund – The General Fund is the general operating fund of the City. General tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed charges, and capital improvement costs not paid through other funds are paid from this fund. Fire Rescue Services – This Special Revenue Fund accounts for the grant revenues and expenditures which supplement the City’s emergency Fire Rescue operations. Public Facilities – This Capital Projects Fund accounts for the acquisition or construction of major capital facilities for public use such as marinas and stadiums.


31

General Government – This Capital Project Fund accounts for expenditures for capital made for general government operations. Streets and Sidewalks – This Capital Project Fund accounts for capital expenditures made for streets, sidewalks, and other traffic-related projects. Additionally, the City reports the following fiduciary fund type: Pension Trust Funds - The pension trust funds account for the City of Miami Fire Fighters’ and Police Officers’ Retirement Trust (“FIPO”), the City of Miami General Employees’ and Sanitation Employees’ Retirement Trust (“GESE”) and Other Managed Trusts (Members, Excess Plan, and Staff Plan), and the Elected Officers’ Retirement Trust (“EORT”). The pension trust funds accumulate resources for pension benefit payments. D. Measurement Focus and the Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, insurable claims, pensions, pollution remediation obligations, and other post employment benefits are recorded only when payment is due or when City has made a decision to fund these obligations with current available resources. Property taxes, when levied for, intergovernmental revenue, when eligibility requirements are met, sales tax, franchise and utility taxes, licenses, charges for services, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable only when cash is received by the City. As a general rule, the effect of inter-fund activity has been eliminated from the government-wide financial statements. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than program revenues. Likewise, general revenues include all taxes. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.


32

E. Assets, Liabilities, and Net Assets or Equity Deposits and Investments The City has defined “cash, cash equivalents and investments” to include cash on hand, demand deposits, money market funds, debt securities, and cash with fiscal agents. Each fund’s equity in the City’s investment pool is considered to be a cash equivalent since the funds can be deposited or effectively withdrawn at any time without prior notice or penalty. In addition, the City considers all highly liquid investments with a maturity of three months or less when purchased, to be a cash equivalent. All investments, including those of the Pension Trust Funds, are stated at fair value, using quoted market price or the best available estimate thereof. Investments that have a maturity of one year or less at the time of purchase are reported at amortized cost. Alternative investments which include private equity, private debt, venture capital and equity real estate investments where no readily ascertainable market value exists, management, in consultation with the general partner and investment advisors, have determined the fair values for the individual investments based upon the partnership’s most recent available financial information. Interfund Receivables and Payables Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as “due to/from other funds”. Receivables Receivables include amounts due from other governments and others for services provided by the City and are recorded when the related revenue is earned. Allowances for uncollectible receivables are based upon historical trends and the periodic aging of receivables. The City fully reserves for all receivables greater than 60 days with the exception of grant receivables and other accounts that are in the collection process. Prepaids Prepaid items consist of certain costs which have been paid prior to the end of the fiscal year, but represent items which are applicable to future accounting periods. Reported amounts in governmental funds are equally offset by a reservation of fund balance, in the fund financial statements, which indicates that these amounts do not constitute “available spendable resources” even though they are a component of current assets. Inventory There are no inventory values presented in the governmental funds or government-wide financial statements of the City. Purchases of inventoriable items are recorded as expenditures/expense at the time of purchase and year-end balances are not material. Restricted Assets Certain proceeds from bonds, loans and deposits, as well as advances from grants, are classified as restricted assets because their use is limited by applicable bond indentures, contracts, and agreements.


33

Capital Assets Capital assets, which include property, plant, equipment, and infrastructure (e.g. roads, sidewalks, drainage, and similar items), are reported in the governmental activities column in the government-wide financial statements and fiduciary fund financial statements. Capital assets are defined by the City as assets with an initial cost of $1,000 or more and an estimated useful life in excess of one year. Such assets are recorded at historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value on the date of the donation. Major outlays for capital assets and improvements are capitalized as projects are constructed. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Property, plant, equipment, and infrastructure of the City, and its component units, are depreciated using the straight-line method over the following estimated useful lives:

Asset YearsBuildings 20 - 50Improvements other than buildings 10 - 30Machinery and equipment 3 - 15Vehicles (including heavy equipment) 3 - 10Infrastructure 15 - 75

In the governmental funds, capital assets are recorded as expenditures and no depreciation expense is recorded. Deferred Charges Deferred charges in the government-wide financial statements represent the unamortized portion of the cost incurred for the issuance of long-term debt and the difference between the reacquisition price and the net carrying amount of the old debt, relating to current and advance refunding resulting in the defeasance of debt. These costs are being amortized over the term of the respective bond issue or the shorter of the amortization period remaining from the prior refunding or the life of the latest refunding debt. The costs are amortized using the effective interest method. For governmental funds, these costs are considered to be period costs. Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick leave, which will be paid upon separation from service. The City accrues a liability for compensated absences as well as certain other salary related costs associated with the payment of compensated absences. The liability for such accumulated leave is reflected in the government-wide financial statements as current and long-term liabilities. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. The liability for compensated absences includes salary-related payments, where applicable. Employee Benefit Plans and Net Pension Asset/Obligation - The City provides separate defined benefit pension plans for general employees, sanitation employees and for uniformed police and fire department personnel, as well as a defined contribution pension plan created in accordance with Internal Revenue Code Section 401(a) for certain employees. The City also offers an optional deferred compensation plan created in accordance with Internal Revenue Code Section 457.


34

At September 30, 2010 the City recorded a net pension obligation related to the General Employees and Sanitation Employees (GESE) Excess Benefit Plan in its government-wide statement of net assets. The net pension obligation is a function of annual required contributions, interest, adjustments to the annual required contribution, annual pension costs and actual employers contributions made to the plan. Please refer to Note 10 for further information.

Post Employment Benefits Other Than Pensions (OPEB) - Pursuant to Section 112.0801, Florida Statues, the City is mandated to permit participation in the health insurance program by retirees and their eligible dependents at a cost to the retiree that is no greater than the cost at which coverage is available for active employees. Retirees pay 75% of the blended (active and retiree combined) equivalent premium rates. The blended rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the plan on average than those of active employees. The City currently provides these benefits in accordance with the vesting and retirement requirements for its General and Sanitation Employees, Firefighters and Police Officers.

The City is financing the post employee benefits on a pay-as-you go basis. As determined by an actuarial valuation, the City records a net OPEB obligation in its government-wide financial statements related to the implicit subsidy. Please refer to Note 11 for further information.

Unearned/Deferred Revenues

Resources that do not meet revenue recognition requirements (not earned) are recorded as unearned revenue in the government-wide and fund financial statements. In addition, amounts related to government fund receivables that are measurable, but not available, are recorded as deferred revenue in the governmental fund financial statements. Unearned revenues in the government-wide financial statements at September 30, 2010 are as follows:

Source BalanceCollege of Policing 11,462,291$Burgular Alarms and Business Taxes Receipts 7,679,890SHIP Program 1,579,987MESA 6,637,416Deferred Taxes 11,770,392Grants and Others 29,138,647

Total 68,268,623$

Long-Term Obligations

In the government-wide financial statements long-term debt and other long-term obligations are reported as liabilities on the statement of net assets. Bonds payable are reported net of the applicable bond premiums or discounts and deferred refunding amounts. Bond premiums, discounts, and issuance costs are amortized over the life of the bonds using the interest method. Deferred amounts on refunding are amortized over the shorter of the remaining life of the old debt or the life of the new debt using the straight-line method, which does not result in a material difference from the effective interest method. Bonds payable are presented net of applicable bond discounts, premiums, and deferred refunding amounts, whereas issuance costs are recorded as deferred charges.


35

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Payment of debt principal is reported as an expenditure. Risk Management – The City is self-insured for automobile liability, general liability, including public official’s liability and property damage claims pursuant to Florida Statute Section 768.28 (Waiver of Statute of Limitations; Exclusions: Indemnifications; Risk Management Programs). Per Florida Statue section 768.28, the City is self-insured up to $100,000 per person/$200,000 per occurrence. The City is also self-insured for workers’ compensation claims. The City is self-insured for health claims and uses a commercial carrier as the administrator. The discounted accrued liability for estimated insurance claims represents an estimate of the ultimate cost of settling claims arising prior to year end including claims incurred but not yet reported. Net Assets Equity in the government-wide statement of net assets is displayed in three categories: 1) invested in capital assets, net of related debt, 2) restricted, and 3) unrestricted. Net assets invested in capital assets net of related debt consists of capital assets reduced by accumulated depreciation and by any outstanding debt incurred to acquire, construct, or improve those assets, excluding unexpended proceeds. Net assets are reported as restricted when there are legal limitations imposed on their use by City legislation or external restrictions by other governments, creditors, or grantors. Unrestricted net assets consist of all net assets that do not meet the definition of either of the other two components. The government-wide statement of net assets reports $88,283,946 of restricted net assets all of which is restricted by enabling legislation. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of unreserved fund balance in governmental funds indicate the utilization of these resources in the ensuing year’s budget or tentative plans for future use. The following is a description of the reserves and designations used by the City. Reserve for encumbrances – This amount is equal to the outstanding purchase orders for goods and services at year-end. The subsequent year’s appropriations will be amended to provide the authority to complete the transactions. Reserve for debt service – This is the amount of fund balance in the Debt Service Funds, which is set aside for the repayment of outstanding debt. Reserve for prepaid items – This reserve is provided to account for payments made in advance. This reserve indicates the funds are not “available” for appropriation or expenditure even though they are a component of current assets.


36

Designated for future settlements – These are amounts that are to be appropriated in future years for lawsuits and claims that management has determined are probable and the amount of that loss can be reasonably estimated. Designated for strategic initiatives – These are amounts that are to be appropriated in future years for those projects that either enhance revenue producing activities or reduce future expenditures. Designated for management initiatives – These are amounts that are to be appropriated in future years for those specific projects that management has approved and has set aside monies to pay for these items in accordance with the City’s Financial Integrity Ordinance. Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from estimates. Excess of Expenditures over Appropriations The following funds exceeded their budgetary authorization as of September 30, 2010:

Exceed BudgetAuthorization

Special Revenue:General Special Revenue 244,147$ Virginia Key Beach Trust 243,739 Liberty City Revitalization Trust 138,579

Fund

Fund Deficits The following funds had deficits in the amounts indicated as of September 30, 2010:

DeficitSpecial Revenue:

Emergency Services 8,101,960$ Fire Services 6,393,283 Convention Center 627,099 Homeless 91,413

Debt Service:General Obligation Bonds 41,370

Capital Projects:Disaster Recovery 1,054,131

Fund


37

These undesignated deficits are the result of encumbrances, other reserves exceeding available fund balances or the deferral of revenue recognition. The City plans to eliminate these deficits by increasing fees, revisiting user charges, collecting outstanding receivables, identifying other funding sources, using operating transfers, etc. in the near future. NOTE 2. – DEPOSITS AND INVESTMENTS Deposits The City, excluding the Pension Trust Funds, and restricted cash balances maintains a cash management pool for its cash, cash equivalents, and investments in which each fund and/or account or sub-account of a fund participates on a dollar equivalent and daily transaction basis. Interest income (which includes unrealized gains and losses) is distributed monthly based on a monthly average balance. The use of zero balance accounts with daily sweeps allows for the City’s portfolio to be fully invested at all times. Custodial Credit Risk – This is the risk that in the event of a bank failure, the City’s deposits may not be recoverable. In addition to insurance provided by the Federal Deposit Insurance Corporation, deposits are held in banking institutions approved by the State Treasurer of Florida to hold public funds. The City’s adopted policy is governed by Florida Statutes Chapter 280, Florida Security for Public Deposits Act, which requires all Florida qualified public depositories to deposit with the Treasurer or another banking institution eligible collateral. In the event of failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses. Investments Custodial Credit Risk – This is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City’s investment policy requires that securities be registered in the name of the City. All safekeeping receipts for investment instruments are held in accounts in the City’s name and all securities are registered in the City’s name. As required by Florida Statutes, the City has adopted a written investment policy, which may, from time to time, be amended by the City Commission. The City Code authorizes the Director of Finance to purchase and invest idle funds prudently in U. S. Treasuries and obligations of agencies of the United States, provided such are guaranteed by the United States or by the issuing agency; general obligations of states, municipalities, school districts, or other political subdivisions, revenue and excise tax bonds of the various municipalities of the State of Florida, provided none of such securities has been in default within five years prior to date of purchase, negotiable certificates of deposit, bankers acceptance drafts, money market investments, the State Board of Administration Investment Pool, and prime commercial paper. The State Board of Administration is part of the Local Government Surplus Funds Trust Fund and is governed by Ch. 19-7 of the Florida Administrative Code. These rules provide guidance and establish the general operating procedures for the administration of the Local Government Surplus Funds Trust Fund. Additionally, the State of Florida Office of the Auditor General performs the operational audit of the activities and investments of the State Board of Administration. The fair value of the position in the external investment pool is the same as the value of the pool shares. The Local Government Surplus Funds Trust Fund is not a registrant with the Securities and Exchange Commission; however, the board has adopted operating procedures consistent with the requirements for a 2a-7 fund. These investments are valued using the pooled share price, which is based on amortized costs.


38

At September 30, 2010, the pooled cash, cash equivalents and investments of the primary government, exclusive of the Pension Trust Funds and discrete component units, consisted of the following:

Investment Type Fair ValueUnited States Treasury Notes and Bills 83,556,216$ Federal National Mortgage Association 102,781,287 Federal Home Loan Mortgage Corporation 80,520,190 Federal Farm Credit Bank 56,595,232 Federal Home Loan Bank 56,089,418 Commercial Paper 104,313,314 Money Market Fund 27,093,736 Total Investments 510,949,393 Bank Deposits 8,290,857 Total Pooled Cash, Cash Equivalents and Investments 519,240,250$

As of September 30, 2010, $246,631,330 of the total balance listed above relates to unspent bond proceeds. Unspent bond proceeds consisted of the following:

Issue Unspent Proceeds1986 Sunshine State Revenue Loan 28,025,702$ 1986 Sunshine State Revenue Loan 5,031,040 2007 Street & Sidewalks 27,476,325 Special Obligations A 1,825,312 2007BLimited 5,677,771 2009 Limited 44,719,928 2009 Streets and Sidewalks 57,620,113 2010A Marlins Garage 63,098,979 2010B Marlins Retail 13,156,160

246,631,330$

Interest Rate Risk - Interest rate risk is the risk that as market rates change, the fair value of an investment will vary. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in the market interest rates. The City’s policy limits the maturity of an investment to a maximum of 5 years. As of September 30, 2010, the City of Miami had the following investments with the respective weighted average maturity in years. The respective weighted average maturities were based on the securities call date, not the maturity date.

Weighted AverageInvestment Type Maturity in YearsUnited States Treasury Notes and Bills 0.15Federal National Mortgage Association 0.31Federal Home Loan Mortgage Corporation 0.38Federal Farm Credit Bank 0.34Federal Home Loan Bank 0.43Commercial Paper 0.09Money Market Less than 1 year

Credit Risk – Credit Risk is the risk that a security or portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. The City’s investment policy (the Policy), minimizes credit risk by restricting authorized investments to the highest ratings of at least one


39

of the nationally recognized statistical rating organizations (NRSROs). Commercial paper and bankers acceptances must have the highest letter and numerical rating as provided for by at least one NRSRO. The credit ratings below were consistent among the three major rating agencies (Moody’s, Standard and Poor’s, and Fitch). Obligation of the U.S. Government or obligations explicitly guaranteed by U. S. Government are not considered to have credit risk. The table below summarizes the investments by credit rating at September 30, 2010:

Standards & PoorsInvestment Type Credit RatingFederal National Mortgage Association AAAFederal Home Loan Mortgage Corporation AAAFederal Farm Credit Bank AAAFederal Home Loan Bank AAACommercial Paper A1/P1/F1Money Market Fund Not Rated

Concentration of Credit Risk – The City’s policy establishes limitations on portfolio composition by investment type and by issuer to limit its exposure to concentration of credit risk. The policy provides that a maximum of 20% of the portfolio may be invested in SEC registered money market funds with no more than 10% to any single money market fund. A maximum of 100% of available funds may be invested in the Local Governments Surplus Funds Trust Fund. A maximum of 100% of the total portfolio may be invested in U.S. Government securities and federal instruments, with a limit of 25% invested in any one issuer of federal instruments. A maximum of 35% of the portfolio may be invested in prime commercial paper with a maximum of 10% with any one issuer. A maximum of 10% of the portfolio may be invested in banker’s acceptances with a maximum of 5% with any one issuer. As of September 30, 2010, the following issuers held 5% or more of the investment portfolio:

Issuer PercentageFederal Farm Credit Bank 12%Federal Home Loan Bank 12%Federal Home Loan Mortgage Corp. 17%Federal National Mortgage Association 21%United States Treasury Notes 17%

The above excludes investments in mutual funds and external investments pools. City of Miami Firefighters and Police Officers Retirement Trust (FIPO) FIPO’s investment policy is determined by its Board of Trustees and is implemented by investment managers. The policy has been identified by the Board as having the greatest expected investment return, and the resulting positive impact on asset values, funded status and benefits, without exceeding a prudent level of risk. The Trustees are authorized to acquire and retain property, real, personal or mixed and investments specifically including, bonds, debentures and other corporate obligations, and stocks, preferred or common. Interest Rate Risk - Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. As a means of limiting its exposure to interest rate risk, the Plan’s Investment Policy limits the maturities and diversifies its investments by


40

security type and institution, and limits holdings in any one type of investment with any one issuer to control this risk. Information about the sensitivity of fair values of the Plan’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Plan’s investments by maturity at September 30, 2010:

U.S. U.S. CorporateTreasuries Agencies Bonds Total

Fair Value 103,560,990$ 115,294,517$ 261,293,842$ 480,149,349$ Investment Maturities:

Less than 1 year 6,978,831 2,249,241 4,670,904 13,898,976 1 to 5 years 41,426,540 5,051,246 77,409,891 123,887,677 6 to 10 years 40,867,112 11,120,547 107,293,143 159,280,802 More than 10 years 14,288,507 96,873,483 71,919,904 183,081,894

Credit Risk - Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. This risk is generally measured by the assignment of a rating by a nationally recognized statistical rating organization. The Plan’s investment policy utilizes portfolio diversification in order to control this risk. The following table discloses credit ratings, at September 30, 2010:

PercentageInvestment Type/Rating Fair Value of PortfolioU.S. Government guaranteed* 218,855,507$ 45.58%Credit risk debt securitiesAAA 34,015,051 7.08%AA 24,028,362 5.00%A 70,559,060 14.70%BBB 59,444,273 12.38%BB and lower 70,275,827 14.64%Bond Funds** 245,347 0.05%Not Rated 2,725,922 0.57%

Total credit risk debt securities 261,293,842 54.42%Total fixed income securities 480,149,349$ 100.00%

* Obligations of the U.S. government or obligations explicitly or implicitly guaranteed by the U.S. government are not

considered to have credit risk and do not have purchase limitations.

** At September 30, 2010, bond funds are comprised of securities rated AAA per ratings provided by Standard and Poors. Custodial Credit Risk - This is the risk that in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments that are in the possession of an outside party. Consistent with the Plan’s investment policy, the investments are held by the Plan’s custodial bank and registered in the Plan’s name. Concentration of Credit Risk - The investment policy of the Trust contains limitations on the amount that can be invested in any one issuer as well as maximum portfolio allocation percentages. There were no individual investments that represent 5% or more of plan net assets at September 30, 2010.


41

Foreign Currency Risk - Foreign currency is the risk that changes in exchange rates will adversely affect the fair value of the investment or a deposit. Each investment manager, through the purchase of units in a commingled investment trust fund or international equity mutual fund, establishes investments in international equities. FIPO has an indirect exposure to foreign currency fluctuation as follows:

Holdings valuedin U.S. Dollars -

Currency International EquitiesSwiss Franc 6,991,767$ Canadian Dollar 266,767 Euro 9,053,066 British Pound Sterling 8,638,608 Hong Kong Dollar 397,799 Japanese Yen 6,922,128 South Korean Won 1,670,897 Swedish Krona 3,151,404 Norwegian Krona 2,876,210 Danish Krone 360,033 Australian Dollar 2,307,196 Other 2,071,272

44,707,147$

Securities Lending Transactions - A retirement system is authorized by state statutes and board of trustees’ policies to lend its investment securities. The lending is managed by the Trust’s custodial bank. All loans can be terminated on demand by either the Trust or the borrowers, although the average term of loans is approximately 110 days. The custodial bank and its affiliates are prohibited from borrowing the system’s securities. The agent lends the Trust’s U.S. government and agency securities and domestic corporate fixed-income and equity securities for securities or cash collateral of 102% and international securities of 105% of the securities plus any accrued interest. The securities lending contracts do not allow the Trust to pledge or sell any collateral securities unless the borrower defaults. Cash collateral is invested in the agent’s collateral investment pool, whose share values are based on the amortized cost of the pool’s investments. Investments are restricted to issuers with a credit rating A3 or A- or higher by Moody’s or Standard & Poor’s. At year-end, the pool has a weighted average term to maturity of 21 days. The relationship between the maturities of the investment pool and the Trust’s loans is affected by the maturities of the securities’ loans made by other entities that use the agent’s pool, which the Trust cannot determine. There are policy restrictions by the custodial bank that limits the amount of securities that can be lent at one time or to one borrower.


42

The following represents the balances relating to securities lending transactions at September 30, 2010:

Fair Value of Cash Collateral Cash CollateralUnderlying Received/Securities Investment

Securities Lent: Securities Collateral Value Value

Lent for cash collateral:U.S. government and agency obligations 79,732,615$ 81,475,374$ 81,475,374$ Domestic corporate stocks 91,606,231 94,012,347 94,012,347 Domestic corporate bonds 44,828,798 45,896,545 45,896,545

Total securities lent 216,167,644$ 221,384,266$ 221,384,266$

The contract with the Trust’s custodian requires the custodian to indemnify the Trust if the borrower fails to return the securities, due to the insolvency of a borrower, and the custodian has failed to live up to its contractual responsibilities relating to the lending of those securities. At year-end, the Trust has no credit risk exposure to borrowers because the amounts of collateral held by the Trust exceed the amounts the borrowers owe the Trust. There are no significant violations of legal or contractual provisions, no borrowers or lending agent default losses, and no recoveries of prior period losses during the year. There is no income distributions owing on securities lent. In September 2008 when the market experienced a significant decline and there was a general lack of liquidity in the credit market, certain assets held in the custodial agent’s short-term investment cash collateral pool were deemed to be impaired. The custodial agent re-valued many securities held by the securities lending cash collateral pool resulting in a mark down of the assets and causing the value of the pool to fall below the commitments owed to the borrowers. The amount of the collateral deficiency was calculated based on the difference between the book value and vended prices (rather than liquidation) at the time, and a liability was assigned to the Trust based on the Trust’s ratable ownership of the pool. If the Trust should elect to withdraw from the securities lending program, the liability would be realized. The impaired assets have been segregated from the collateral pool into a liquidation account which is valued daily. The Trust owns interest in the liquidation account rather than having a direct ownership in the impaired securities. As of September 30, 2010 the Trust’s liability was $2,588,832. The deficiency is reported as a securities lending collateral unrealized loss on the Statements of Changes in Plan Net Assets and a reduction to the asset value of securities lending collateral reported on the Statements of Plan Net Assets. In November 2009 the custodial agent determined the improving conditions in the economic and financial markets justified reducing the Trust’s liability (excluding realized losses and related settlement costs) by approximately seventy-seven percent, and in March 2010 the remaining collateral deficiency was reversed, eliminating the liability.


43

GESE Pension Trust Funds Investments for the City of Miami Employees and Sanitation Employees Retirement Trust (GESE Trust) and the City of Miami General Employees and Sanitation Employees Retirement Trust Staff Pension Plan (Staff Trust), as of September 30, 2010, is as follows:

GESE Staff Investment Type Trust TrustU.S. Government and Agency Securities 69,229,551$ -$ Corporate Stocks 342,646,371 867,477 Corporate Bonds 89,337,931 738,964

501,213,853 1,606,441

Real Estate Fund 30,440,327 - Money Market Fund and Commercial Paper 18,686,543 154,175 Total Investments 550,340,723$ 1,760,616$

Fair Value

GESE Trust The investment policy, approved by the Board of Trustees for the GESE Trust, stipulates the permissible investments and the allowable long-range asset allocation, measured at market value at the end of each quarter. The investment objectives are to achieve rates of return that equal or exceed actuarial interest assumption rate, and performance results that rank in the top half of the investment consultants universal database, over a rolling three-year period, without undue risk. Compliance with the investment policy is monitored by the GESE Trust’s investment consultant. The Board of Trustees for the GESE Trust has engaged outside investment professionals to manage the assets of the Trust. The Trusts are potentially exposed to various types of investment risk including credit risk, custodial credit risk, concentration of credit risk, interest rate risk, and foreign currency risk. Interest Rate Risk – The GESE Trust limits the maturities of investments to control this risk. The GESE Trust investment policy requires that the average duration of the fixed-income asset class be targeted within a range of three to ten years. In addition, each manager is expected to keep its duration at +/- one year of the benchmark duration. The GESE Trust utilizes duration to assess its risk to changes in interest rates.


44

The following represents the investment’s market value and duration of the securities at September 30, 2010:

Weighted Avg.Investment Type Fair Value Maturity YearsAsset-Backed 9,818,000$ 1.74Corporate-Bank 17,910,000 3.91Corporate-Finance 10,566,000 5.05Corporate-Industrial 36,770,000 6.04Corporate-Transportation 630,000 4.47Corporate-Comm. Utility 6,014,000 5.97Corporate-Electric Utility 3,465,000 4.95Corporate-Gas Utility 613,000 5.15US Treasury 20,334,000 7.09US Agency 13,258,000 2.70Yankee-Industrial 122,000 9.84Yankee-Finance 113,000 7.11Mortgages 38,536,000 2.63Cash 3,638,000 0.00Other 1,789,000 4.59

Total 163,576,000$ 4.35

Credit Risk - The GESE Trust’s Investment Policy Statement limits credit risk by requiring all fixed-income securities to be rated by Moody’s as a Baa/BBB or better. The only exception is that a maximum of 5% of each manager’s portfolio may be invested in high yield securities rated Caa/CCC or better. At September 30, 2010, the following table displays Moody’s ratings and the market value of the total fixed-income portfolio invested:

Market Value PercentUS Treasury* 20,334,000$ 12.43%US Agency* 13,258,000 8.11%Asset-Backed** 9,818,000 6.00%Mortgages** 38,536,000 23.56%Aaa 1,130,000 0.69%Aa 11,175,000 6.83%A 41,760,000 25.53%Baa 21,011,000 12.84%Ba 1,635,000 1.00%Not Rated 1,281,000 0.78%Cash 3,638,000 2.22%Total 163,576,000$ 100.00%

Implied AAA rating There is no rating classification for these investments.


45

Custodial Credit Risk - This is the risk that in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The GESE Trust utilizes an independent custodial safekeeping agent for its investment activity. Custodial credit risk is limited since its investments are held in independent custodial safekeeping accounts, external investment pools, and/or open end mutual funds. All cash in each money manager’s portfolio is swept into a money market mutual fund on a daily basis. Concentration of Credit Risk - The GESE Trust utilizes limitations on securities of a single issuer or industry to manage this risk. Investments issued or explicitly guaranteed by the US Government and investments in mutual funds, external investment pools, and other pooled investments are not subject to any concentration of credit risk. The GESE Trust investment policy requires that corporate bond issues must be diversified by industry and in number so that no investment in the securities of a single issue shall exceed 7% (at market) of the value of the portfolio. Single industry weightings will be a maximum of 25%, except U.S. government and agency securities. At September 30, 2010, the GESE Trust did not have any corporate bond investments with issuers greater than 5%. Foreign Currency Risk - The GESE Trust Investment policy allows a maximum of 10% of each manager’s portfolio to be invested in aggregate to Yankee bonds, foreign credits, Eurodollar bonds, and Rule 144A securities. At September 30, 2010, the GESE Trust did not have any foreign denominated fixed income investments. Staff Trust The investment policy for the Staff Trust was determined by the Board of Trustees and is monitored by the Staff Trust’s investment consultant. The policy stipulates the permissible investments, and the allowable long-range asset allocation, measured at market value, at the end of each quarter. The investment objectives are to achieve rates of return that equal or exceed actuarial interest assumption rate, and performance results that rank in the top half of the investment consultants universe database, over a rolling three-year period, without undue risk. The Board of Trustees has engaged outside investment professionals to manage the assets for the Staff Trust. Interest Rate Risk – The Staff Trust limits the maturities of investments to control this risk. The Staff Trust investment policy requires that the average duration of the fixed-income asset class be targeted within a range of three to ten years. In addition, the manager is expected to keep its duration at +/- one year of the benchmark duration. The effective duration of the passive mutual funds is 4.67 years. Credit Risk – The Staff Plan utilizes portfolio diversification in order to limit this risk as well as limiting investments to the highest rated securities as rated by nationally recognized rating agencies. The Staff Plan Investment Policy limits credit risk by requiring all fixed income securities to be rated by Moody’s/S&P as a Baa/BBB or better. The Board of Trustees for the GESE Trust has elected to hire outside investment professionals to manage the assets for the Staff Pension Plan. As of September 30, 2010, the fixed income assets of the pension plan were invested in a mutual fund managed passively by Vanguard.


46

The value of the fixed income portfolio was $738,964. Vanguard manages the assets in accordance with the investment policy statement approved by the trustees. The table below summarizes the investments by credit rating at September 30, 2010:

Investment Type/Rating Fair Value PercentGovernment* 258,000$ 35%Aaa 219,000 30%Aa 63,000 9%A 106,000 14%Baa 74,000 10%Other 19,000 3%

739,000$ 100.00%* Implied AAA rating

Custodial Credit Risk - This is the risk that in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Staff Trust utilizes an independent custodial safekeeping agent for its investment activity. Custodial credit risk is limited since its investments are held in independent custodial safekeeping accounts, external investment pools, and/or open-end mutual funds. All cash in each money manager’s portfolio is swept into a money market mutual fund on a daily basis. Concentration of Credit Risk - The Staff Trust utilizes limitations on securities of a single issuer or industry to manage this risk. Investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools and other pooled investments are excluded from this requirement. The Staff Trust investment policy requires that corporate bond issues must be diversified by industry and in number so that no investment in the securities of a single issue shall exceed 20% (at market) of the value of the portfolio. Single industry weightings will be a maximum of 20%, except U.S. government and agency securities. As of September 30, 2010, the Staff Trust did not have any positions with issuers greater than 5%. Foreign Currency Risk – The Staff Trust Investment policy prohibits investments in foreign currency denominated securities and is therefore not exposed to foreign currency risk. Elected Official Retirement Trust (EORT) At September 30, 2010, the investments of EORT consisted of the following:

Investment Type Fair ValueMoney Market Funds 5,173,748


47

Interest Rate Risk - Interest rate risk is the risk that as market rate changes the fair value of an investment will vary. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in the market interest rate. The City’s investment policy limits the maturity of an investment to a maximum of 5 years. As of September 30, 2010, EORT had the following investments with the respective weighted average maturity in years. The respective weighted average maturities were based on the securities call date, not the maturity date.

Weighted AverageInvestment Type Maturity In YearsMoney Market Funds Less than 1 year

The investments at September 30, 2010 are in compliance with EORT’s investment policy. Credit Risk - The Plan’s investment policy minimizes credit risk by restricting authorized investments to the highest ratings of at least one of the nationally recognized statistical rating organizations (NRSROs). Investments in the State Board of Administration, The Local Government Surplus Funds Trust Fund, do not have a rating from the NRSRO. Commercial paper and bankers acceptances must have the highest letter and numerical rating as provided for by at least one NRSRO. At September 30, 2010, all of the Plan’s investments were held in Money Market Funds. Money Market Funds are authorized by the City’s investment policy, but are not rated by the major rating agencies. Custodial Credit Risk - This is the risk that in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The EORT Plan utilizes an independent custodial safekeeping agent for its investment activity. Custodial credit risk is limited since its investments are held in independent custodial safekeeping accounts, external investment pools, and/or open-end mutual funds. All cash in each money manager’s portfolio is swept into a money market mutual fund on a daily basis. All investments are held by the plans custodial bank and registered in the City’s name. Concentration of Credit Risk - The Plan’s policy establishes limitations on portfolio composition by investment type and by issuer to limit its exposure to concentration of credit risk. The policy provides that a maximum of 20% of the portfolio may be invested in SEC registered money market funds with no more than 10% to any single money market fund. A maximum of 100% of available funds may be invested in the Local Governments Surplus Funds Trust Fund. A maximum of 100% of the total portfolio may be invested in U.S. Government securities and federal instruments, with a limit of 25% invested in any one issuer of federal instruments. A maximum of 35% of the portfolio may be invested in prime commercial paper with a maximum of 5% with any one issuer. A maximum of 10% of the portfolio may be invested in banker’s acceptances with a maximum of 5% with any one issuer. At September 30, 2010, the EORT Trust did not have any positions with issuers greater than 5%.


48

NOTE 3. – RECEIVABLES

Receivables at year-end for the City in individual major funds and non-major funds in the aggregate, including the applicable allowance for uncollectible accounts, are as follows:

Public General Streets & Non-MajorReceivables General Fire Facilities Government Sidewalks Govt Funds TotalAccounts 30,454,470$ -$ 1,344,651$ 2,876,268$ 103,671$ 6,610,343$ 41,389,403$ Property Taxes 20,776,548 - - - - 1,650,739 22,427,287 Due from Other Govts 1,833,330 9,758,642 33,910 310,168 425,976 20,217,868 32,579,894 Loan to Component Unit - - - - - 2,250,000 2,250,000 Loan Receivable - - - - 14,665,630 14,665,630 Gross Receivables 53,064,348 9,758,642 1,378,561 3,186,436 529,647 45,394,580 113,312,214 Less: Allowance for Uncollectable (12,464,364) - (1,344,651) (575,000) (103,671) (18,676,357) (33,164,043) Net Total Receivables 40,599,984$ 9,758,642$ 33,910$ 2,611,436$ 425,976$ 26,718,223$ 80,148,171$

As part of its Community Development Block Grant (CDBG) program, the City issues single and multi-family housing rehabilitation loans to qualified residents. All repayments of the loans, including interest earned, remain in the loan program. As collection of the loans is not assured, the loans are fully reserved. The loan to the component unit represents a receivable from DOSP in the amount of $2,250,000, which is fully reserved for as of September 30, 2010 (see Note 8).

Loan receivable amount represents a loan to Parrot Jungle Island authorized under the loan participation agreement with Miami-Dade County. The agreement required the City to assume 80% of the guarantee of the loan. Balance at September 30, 2010 represents payments made on behalf of Parrot Jungle Island to Miami-Dade County. Amounts are due to the City beginning in 2012.

Single-Family Homeownership and Rehabilitation Programs

Single-family home rehabilitation and homeownership programs funded under the Community Development Block Grant (CDBG), HOME Investment Partnership Loan Program (HOME), American Dream Down Payment Initiative (ADDI), State Housing Initiative Partnership Program (SHIP) and Affordable Housing Trust Fund, generally are repaid when the related properties are transferred or sold. If the property is transferred or sold before the end of the “loan” period, the proceeds from the repayment including interest, if any, are then returned to the program to assist additional low-income families. If the homeowners remain in their homes for the full term of the deferred loan, the loan is “forgiven” and becomes a grant. A mortgage or a covenant is placed against the property to ensure the repayment of the loan and interest. Given the nature of these “loans”, collection on loans is not assured, consequently they are not recognized in the financial statements.

A summary of single-family, deferred long-term loans that are not recognized in the financial statements is as follows:

Program Loans Outstanding AmountCDBG 72 loans 1,606,704$HOME 517 loans 19,483,555SHIP 313 loans 11,464,945Other 89 loans 1,614,218Total 991 loans 34,169,422$

September 30, 2010


49

Home Ownership and Rental Multi-Family Loans As of September 30, 2010, there are 94 projects aggregating to $50,243,330 for new construction or rehabilitation of multi-family units, which under the terms of the loan agreement are to be repaid if program conditions are not met. Home ownership loans are usually “forgiven” to the developer and transferred to the home buyer. The home buyer loans are usually amortizable or deferred during the life of the affordability period. Such loans will be forgiven and become grants if the homeowners remain in their homes during the full term of the loan. Given the nature of these “loans”, collection on loans are not assured, consequently they are not recognized in the financial statements. Economic Development Commercial Loans As of September 30, 2010, there are 36 loans aggregating to $10,211,804 for Special Economic Development projects under the CDBG program. Those projects are collateralized by placing a mortgage against the property of the business or non-profit entity’s assets to ensure repayment of the loan and interest to the City. Some of these “loans” are written with no interest payment or deferred payments and are “forgivable”, if all program conditions are met. Given the nature of these “loans”, collection on loans is not assured, consequently they are not recognized in the financial statements. NOTE 4. – PROPERTY TAXES Property taxes are reassessed according to the fair market value on January 1st of each year and are due, with discounts of one to four percent allowed if paid prior to March 1st of the following calendar year. Taxpayers also have the option of paying their taxes in advance in equal quarterly payments based on the prior year's tax assessment with quarterly discounts varying between 2% and 4%. All unpaid taxes on real and personal property become delinquent on April 1st and bear interest at 18% until a tax sale certificate is sold at auction. The County bills and collects all property taxes for the City, and sells tax certificates for delinquent taxes. The assessed value of property, as established by the Miami-Dade County Property Appraiser, at January 1, 2009, upon which the 2009-2010 levy was based, was $36,949,521,366. The City is permitted by Article 7, Section 8 of the Florida Constitution to levy taxes up to $10 per $1,000 of assessed valuation for general governmental services other than the payment of principal and interest on general obligation long-term debt. In addition, unlimited amounts may be levied for the payment of principal and interest on general obligation long-term debt, subject to a limitation on the amount of debt outstanding. The tax rate to finance general governmental services (other than the payment of principal and interest on general obligation long-term debt) for the year ended September 30, 2010, was $7.6740 per $1,000. The debt service tax rate for the same period was $0.9701 per $1,000. Property taxes receivable reported in the government-wide Statement of Net Assets and the governmental funds Balance Sheet represent amounts due for unpaid delinquent property taxes at September 30, 2010. Property taxes that are not considered “available” have been reported as deferred revenues in the governmental funds Balance Sheet.


50

NOTE 5. – CAPITAL ASSETS The following is a summary of changes in capital assets during the year ended September 30, 2010:

Primary Government

Beginning Additions/ Retirements/ Ending Balance Transfers In Transfers Out Balance

Governmental Activities:Non-Depreciable Assets:

Land 88,330,219$ 3,622,582$ 48,669$ 91,904,132$ Construction in Progress 247,027,693 62,891,408 49,915,263 260,003,838

Total Capital Assets, not being depreciated 335,357,912 66,513,990 49,963,932 351,907,970 Depreciable Assets:

Buildings 154,134,818 1,950,646 - 156,085,464 Improvements 166,079,761 9,142,170 1,840 175,220,091 Machinery and Equipment 168,869,142 18,125,983 2,562,110 184,433,015 Infrastructure 1,134,764,166 23,894,272 408,505 1,158,249,933

Total Capital Assets being depreciated 1,623,847,887 53,113,071 2,972,455 1,673,988,503 Less Accumulated Depreciation for:

Buildings 81,430,039 3,680,284 - 85,110,323 Improvements 44,649,288 10,447,508 - 55,096,796 Machinery and Equipment 105,435,280 17,712,095 1,856,842 121,290,533 Infrastructure 617,502,874 28,279,413 168,341 645,613,946

Total accumulated depreciation 849,017,481 60,119,300 2,025,183 907,111,598 Total Capital Assets being depreciated, net 774,830,406 (7,006,229) 947,272 766,876,905

Governmental activities capital assets, net 1,110,188,318$ 59,507,761$ 50,911,204$ 1,118,784,875$

Depreciation expense was charged to governmental functions as follows: Depreciation

Function/Program Activities ExpenseGeneral Government 34,919,249$ Planning and Development 96,968 Community Development 28,845 Community Redevelopment Areas 204,066 Public Works 7,338,872 Public Safety 8,572,827 Public Facilities 2,878,998 Parks and Recreation 6,079,475

Total depreciation expense 60,119,300$

Construction Commitments At September 30, 2010, the City had in process various construction projects that were not completed with a remaining balances totaling $55,205,288. Funding of these projects is to be made primarily through the proceeds of the related bond issues, loans, and future tax revenues.


51

Discretely Presented Component Units Capital Assets The following is a summary of changes in capital assets of the component units during the year ended September 30, 2010: MSEA and CIP did not have any capital asset balances at September 30, 2010. A summary of the changes in capital assets for DOSP is as follows:

DOSP

Beginning Additions/ Retirements/ EndingBalance Transfers In Transfers Out Balance

Capital assets, not being depreciated:Land 14,152,054$ -$ -$ 14,152,054$ Construction in progress 40,429,163 - (40,301,195) 127,968

Total capital assets, not being depreciated 54,581,217 - (40,301,195) 14,280,022

Capital assets, being depreciated:Building and structures 27,907,902 44,824,246 (1,143,718) 71,588,430 Leasehold improvements 10,088,760 411,380 - 10,500,140 Furniture and fixtures 323,188 584,876 - 908,064 Equipment 16,722,766 1,186,123 (52,011) 17,856,878

Total capital assets, being depreciated 55,042,616 47,006,625 (1,195,729) 100,853,512

Less accumulated depreciation for:Building and structures 15,075,186 1,619,961 - 16,695,147 Leasehold improvements 7,516,443 571,682 - 8,088,125 Furniture and fixtures 242,490 28,185 - 270,675 Equipment 11,988,203 1,199,743 (52,011) 13,135,935

Total accumulated depreciation 34,822,322 3,419,571 (52,011) 38,189,882 Total capital assets, being depreciated, net 20,220,294 43,587,054 (1,143,718) 62,663,630

DOSP capital assets, net 74,801,511$ 43,587,054$ (41,444,913)$ 76,943,652$

A summary of the changes in capital assets for DDA is as follows:

DDA

Beginning EndingCapital assets, being depreciated: Balance Additions Retirements Balance

Furniture and equipment 522,809$ 18,035$ -$ 540,844$

Less accumulated depreciation for:Furniture and equipment (343,571) (44,556) - (388,127)

DDA capital assets, net 179,238$ (26,521)$ -$ 152,717$


52

A summary of changes in capital assets for BFP is as follows: BFP

Beginning EndingBalance Additions Retirements Balance

Capital assets, not being depreciated:Land 516,129$ -$ -$ 516,129$ Construction in progress 561,123 - - 561,123

Total capital assets, not being depreciated 1,077,252 - - 1,077,252

Capital assets, being depreciated:Buildings 2,637,934 - - 2,637,934 Public domain and system infrastructure 3,821,498 787,989 - 4,609,487 Machinery and equipment 425,514 12,410 - 437,924

Total capital assets, being depreciated 6,884,946 800,399 - 7,685,345

Less accumulated depreciation for:Buildings (1,124,479) (52,759) - (1,177,238) Public domain and system infrastructure (1,665,891) (140,995) - (1,806,886) Machinery and equipment (300,114) (25,591) - (325,705)

Total accumulated depreciation (3,090,484) (219,345) - (3,309,829) Total capital assets being depreciated, net 3,794,462 581,054 - 4,375,516

BFP capital assets, net 4,871,714$ 581,054$ -$ 5,452,768$

Summary of discretely presented component unit capital assets is as follows:

DOSP DDA BFP TotalCapital Assets: Non-depreciable 14,280,022$ -$ 1,077,252$ 15,357,274$ Depreciable, Net 62,663,630 152,717 4,375,516 67,191,863

76,943,652$ 152,717$ 5,452,768$ 82,549,137$

Depreciation expenses were charged to the discretely presented component units as follows:

Entity Depreciation ExpenseDOSP 3,419,571$ DDA 44,556 BFP 219,345 Total depreciation expense 3,683,472$


53

NOTE 6. – Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at September 30, 2010 consisted of the following:

NonmajorFire Rescue Public General Street & Governmental

General Services Facilities Government Sidewalks Funds TotalVendors 13,660,675$ 868,043$ 3,224,556$ 536,147$ 2,863,849$ 10,707,624$ 31,860,894$ Salaries and Benefits 17,239,804 34,503 4,327 - - 651,009 17,929,643 Total 30,900,479$ 902,546$ 3,228,883$ 536,147$ 2,863,849$ 11,358,633$ 49,790,537$

NOTE 7. – Interfund Receivables, Payables, and Transfers

The balances reflected as due from/due to other funds as of September 30, 2010 are as follows:

AmountGeneral Fund Fire Rescue Services 6,082,351$General Fund Other Non-Major 13,763,493

Governmental FundsTotal 19,845,844$

Payable FundReceivable Fund

These outstanding balances between funds result mainly from the time lag between the dates that (a) interfund goods and services are provided or reimbursable expenditures occur, (b) transactions are recorded in the accounting system, and (c) payments between funds are made.

The following is a summary of interfund transfers for the year ended September 30, 2010:

Fire NonmajorRescue Public Street & Governmental

Transfer Out General Services Facilities Sidewalks Funds TotalGeneral -$ 278,024$ 7,200$ 553,134$ 12,654,887$ 13,493,245$General Government - - 1,944,354 3,665,063 18,568,556 24,177,973Public Facilities - - - - 253,501 253,501 Street & Sidewalks - - - - 617,565 617,565 Nonmajor

Governmental Funds 53,493,902 - 5,879,946 4,025,287 44,616,002 108,015,137Total 53,493,902$ 278,024$ 7,831,500$ 8,243,484$ 76,710,511$ 146,557,421$

Transfer In

Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (b) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and (c) move unrestricted revenues collected in the general and public services tax funds to finance various programs accounted for in other funds in accordance with budgetary authorizations.

During the fiscal year, transfers in to the General Fund included $48,524,103 of public services taxes and $4,694,799 of Local Option Gas Tax; transfers into the Special Obligation Bond Funds included $14,462,419 of public services taxes; and transfers from the Homeland Defense Bond Funds to various Capital Project Funds totaled $12,613,592.


54

NOTE 8. – LONG-TERM OBLIGATIONS Changes in Long-Term Obligations The following is a summary of changes in long-term obligations for the year ended September 30, 2010:

Beginning Ending Due withinBalance Additions Reduction Balance One Year

General Obligation bonds 276,113,503$ -$ (10,309,048)$ 265,804,455$ 14,237,664$ Special obligation and revenue

bonds and loans 289,055,544 166,370,000 (16,952,229) 438,473,315 15,328,274 Accretion 37,744,477 - (8,195,439) 29,549,038 - Bond Premium (discounts) 7,429,388 - (2,236,232) 5,193,156 - Deferred loss on Advance Refunding (6,947,906) - 1,329,381 (5,618,525) -

Total bonds and loans 603,395,006 166,370,000 (36,363,567) 733,401,439 29,565,938 Other liabilities:

Compensated absences 88,068,477 5,965,713 (9,758,076) 84,276,114 13,672,940 Claims payable 155,115,174 75,952,195 (50,639,111) 180,428,258 41,276,359 Other Post Employment Benefits 53,543,609 44,112,571 (12,896,007) 84,760,173 - Net pension obligation 4,291,360 201,826 - 4,493,186 - Total governmental activities long-term liabilities 904,413,626$ 292,602,305$ (109,656,761)$ 1,087,359,170$ 84,515,237$

Primary Government

Claims and judgments, compensated absences, and the net pension obligations are generally liquidated by the General Fund. Claims payable balance of $180,428,258 includes $3,100,100 accrual for pollution remediation obligations, which are obligations to address the current or potential detrimental effects of existing pollution.


55

Bonds and Loans Outstanding – Summarized below are the City’s bond and loan issues, which are outstanding at September 30, 2010:

Purpose of Amount Outstanding Interest RateDESCRIPTION Issue Issued Balance RangeGeneral Obligation Bonds:

General Obligations Refunding BondsSeries 1992 Refunding 70,100,000$ 1,660,000$ 6%

Homeland Defense/Neighborhood CIPSeries 2002 (Limited) Homeland Defense 153,186,406 30,644,455 4.17%-4.97%

General Obligation Refunding BondsSeries 2002A Refunding 32,510,000 23,590,000 5.0%-5.375%

General Obligation BondsOther Issues Housing 23,190,000 315,000 0.50%

General Obligation Refunding BondsSeries 2003B Refunding 4,180,000 4,055,000 2.635%-3.5%

General Obligation Refunding BondsSeries 2003 Refunding 18,680,000 1,690,000 3%-5%

General Obligation Refunding BondsSeries 2007A (Limited) Refunding 103,060,000 102,795,000 4%-5%

General Obligation Refunding BondsSeries 2007B (Limited) Homeland Defense 50,000,000 50,000,000 4.995%-5%

General Obligation Refunding BondsSeries 2009 (Limited) Homeland Defense 51,055,000 51,055,000 3%-5.5%Total General Obligation Bonds 505,961,406 265,804,455

Special Obligation and Revenue Bonds and Loans:Special Revenue Refunding Bonds

Series 1987 Refunding 65,271,325 4,011,022 5.25%-7.3%Community Redevelopment Revenue Bonds

Series 1990 Redevelopment 11,500,000 1,625,000 8.50%Special Obligation Non-Ad Valorem Revenue

Series 1995 Pension 72,000,000 30,875,000 6.5%-7.25%Special Revenue Refunding Bonds

Series 2002A Refunding 27,895,000 22,995,000 3.5%-5.375%Special Revenue Refunding Bonds

Series 2002C Refunding 28,390,000 18,035,000 3.1%-4.375%Non-Ad Valorem Refunding Bonds

Series 2009 Refunding 37,435,000 37,435,000 3.4%-7.55%Special Revenue Bonds, Marlins Garage

Series 2010A Stadium 84,540,000 84,540,000 5%-5.25%Special Revenue Bonds, Marlins Retail

Series 2010B Retail 16,830,000 16,830,000 5.9375%-7.443%Sunshine State Government Financing

Commission Loans Facility Improvements 27,630,900 5,851,500 (1)SEOPW - Section 108 HUD Loan Redevelopment 5,100,000 2,300,000 8.47%-9.03%Wynwood - Section 108 HUD Loan Redevelopment 5,500,000 1,960,000 (2)Wagner Square Section 108 HUD Loan Redevelopment 3,999,000 3,806,000 (2)Sunshine State Government Financing

Commission-Secondary Loan SCI, Melreese 3,500,000 920,000 (1)Parrot Jungle Development 6,112,000 1,556,000 Sunshine State Government Financing

Commission Loans Facility Improvements 6,600,000 6,600,000 (1)Sunshine State Government Financing

Commission Loans Facility Improvements 42,500,000 42,500,000 (1)Sunshine State Government Financing

Commission Loans Facility Improvements 20,000,000 12,700,000 (1)Special Revenue Bonds Street & Sidewalks 80,000,000 77,225,000 3.5%-5.0%

Series 2007Special Revenue Bonds Street & Sidewalks 65,000,000 65,000,000 2.5%-5.625%

Series 2009 Gran Central Corporation Loan Redevelopment 1,708,794 1,708,793 0.00%

Total Special Obligation Bonds, Revenue Bonds, and Loans 611,512,019 438,473,315 Total Bonds and Loans 1,117,473,425$ 704,277,770$

(1) These variable rate loans are subject to a 12% interest rate cap. The Commission loans had an average interest rate of 1.072% on September 30, 2010. (2) These variable rate loans are subject to LIBOR plus 0.2%. The interest is calculated monthly and paid to the trustee quarterly.


56

Annual Debt Service Requirements to Maturity The annual debt service requirements for all bonds and loans outstanding as of September 30, 2010 are as follows:

Special Obligation,Year General Revenue Bonds,

Ended Obligation Bonds and Loans TotalSeptember 30, Principal Interest Principal Interest Principal Interest

2011 14,237,664$ 13,761,941$ 15,328,274$ 27,408,848$ 29,565,938$ 41,170,790$ 2012 11,578,376 13,673,035 19,800,215 26,080,709 31,378,591 39,753,743 2013 11,017,644 13,731,697 24,705,630 25,365,520 35,723,274 39,097,217 2014 11,592,518 13,780,673 27,021,860 24,311,962 38,614,378 38,092,636 2015 12,339,949 13,741,374 24,871,336 23,014,625 37,211,285 36,755,998

2016-2020 88,273,304 42,050,701 95,204,000 76,039,637 183,477,304 118,090,338 2021-2025 74,725,000 18,448,091 43,922,000 57,208,432 118,647,000 75,656,523 2026-2030 42,040,000 3,750,347 49,305,000 43,653,738 91,345,000 47,404,085 2031-2035 - - 72,115,000 28,590,047 72,115,000 28,590,047 2036-2037 - - 66,200,000 7,647,838 66,200,000 7,647,838

Total 265,804,455$ 132,937,859$ 438,473,315$ 339,321,356$ 704,277,770$ 472,259,215$

Summary of New Debt Issuances $65,000,000 Special Obligation Bonds, (Street and Sidewalks), Series 2009 – On December 2, 2009, the City issued $65,000,000 in Special Obligation Bonds, (Street and Sidewalks), Series 2009 for the purpose of financing various street and sidewalk capital improvement projects. The bonds were issued with interest rates ranging from 2.500% to 5.625% maturing from year 2010 through 2029. The bonds are to be repaid by certain designated revenues. $84,540,000 Tax-Exempt Special Obligation Parking Revenue Bonds, Series 2010-A – On July 29, 2010, the City issued $84,540,000 in Tax-Exempt Special Obligation Parking revenue Bonds, Series 2010A for the purpose of financing parking garages, parking lots and parking structures adjacent to the Miami Marlins Baseball Stadium. The bonds were issued with interest rates ranging from 5.000% to 5.250% maturing from year 2011 through 2039. The bonds are to be repaid by certain pledged revenues. $16,830,000 Taxable Special Obligation Revenue Bonds, Series 2010-B – On July 29, 2010 the City issued $16,830,000 in Taxable Special Obligation Parking Revenue Bonds, Series 2010-B for the purpose of financing retail space and surface lots adjacent to the Miami Marlins Baseball Stadium. The bonds were issued with interest rates ranging from 5.935% to 7.443% maturing from 2011 through 2039. The bonds are to be repaid by certain pledged revenue. $60,110,000 Refunding Revenue Tax Exempt Bonds Series 2008 and $6,485,000 Taxable Revenue Bond Series 2009 (Department of Off-Street Parking) – On September 24, 2009, the City Commission adopted ordinance 13092 authorizing the Department of Off-Street Parking (DOSP) to issue up to $70.0 million in new revenue bonds for the purpose of refunding the Series 2008 bonds. On November 5, 2009, the Authority issued $60,110,000 of tax-exempt, fixed-rate revenue refunding bonds and $6,485,000 in taxable, fixed-rate revenue refunding bonds (“Series 2009 Revenue Bonds”). The proceeds of these bonds were used to: (1) fully redeem and refund the Series 2008 bonds, (2) pay for


57

costs of issuance on the Series 2009 revenue bonds, (3) pay for additional construction costs on the Courthouse Center Garage, and (4) pay fees to terminate the existing interest rate swap agreement in connection with the Series 2008 bonds. The interest rate swap was terminated by DOSP on November 19, 2009, for the amount of $5.9 million. The Series 2009 Revenue Bonds are secured by the net revenues of DOSP. The Authority refunded Series 2008 variable rate debt with Series 2009 fixed rate debt. No economic gain/loss was determined for this refunding transaction as the interest rate on the Series 2008 variable rate debt is unknown for the periods after the refunding date. The Series 2009 Revenue Bonds are secured by the net revenues of the Authority. The coupon rates for the tax-exempt fixed-rate revenue bonds range from 4.25% to 5.35%. The coupon rates on the taxable, fixed-rate bonds range from 5.11% to 5.66%. Synopsis of Bond Covenants

Debt service for general obligation bonds is provided for by a tax levy on non-exempt property value. The total general obligation debt outstanding is limited by the City Charter to 15% of the assessed non-exempt property value. At September 30, 2010, the statutory limitation of assessed non-exempt property value for the City amounted to $5,370,833,756 providing a debt margin of $5,104,987,931 after consideration of $265,845,825 of general obligation bonds outstanding at September 30, 2010 and adjusted for the fund balance of $(41,370) in the related Debt Service Fund. Pledged Revenue The City pledged future revenue proceeds of (i) 80% People Transportation Taxes, (ii) 100% new Local Option Gas Taxes, and 20% of the City’s Parking Surcharge to repay $80,000,000 in Special Obligation Revenue Bonds, Series 2007 and $65,000,000 in Special Obligation Revenue Bonds, Series 2009. The proceeds from the bonds were used for the improvement of streets and sidewalks within the City. The bonds are payable solely from the pledged revenues listed above through January 1, 2039. Principal and interest paid for the current year were $1,415,000 and $5,775,435 respectively. The current year revenues were (i) $11,831,595, (ii) $6,489,694, and (iii) $14,238,714 respectively. Principal and interest to be paid in subsequent years totals $141,058,684 on the Series 2007 bonds and $134,613,253 on the Series 2009 bonds. The City further pledged future revenue proceeds of (i) 100% Convention Development Taxes, (ii) Parking Revenues in connection with MLB Home Games at the Miami Marlins Baseball Stadium, and (iii) Parking Surcharge revenues on the Parking Revenues to repay $84,540,000 Tax-Exempt Special Obligation Parking Revenue Bonds, Series 2010A and $16,830,000 Taxable Special Obligation Parking Revenue Bonds, Series 2010B. The proceeds from the bonds were used for the construction of the parking facilities for the new Miami Marlins Baseball Stadium. The bonds are payable solely from the pledged revenues listed above through July 1, 2039. Debt service payments begin on January 1, 2011. Principal and interest to be paid in subsequent years totals $189,920,941 on the Series 2010A bonds and $33,585,869 on the Series 2010B bonds. All other Special Obligation debt of the City is collateralized by pledges of non-ad valorem revenues in accordance with their bond indentures. The bond indentures require that sufficient funds be available in reserve accounts or a surety bond be obtained in lieu of the reserve account to meet the annual debt service requirements. At September 30, 2010, the City had approximately $29.6 million reserved fund balance available to meet this requirement. Principal and interest to be paid in subsequent years totals $276,615,924 on all other Special Obligation debt of the City. Loans obtained from the Sunshine State Governmental Financing Commission require a particular revenue pledge or a covenant to budget and appropriate non-ad valorem revenues. The City must maintain certain debt ratio requirements as specified under this loan requirement.


58

Escrow Agreement On March 17, 1997, an agreement was entered into by and among an Escrow Agent, the Oversight Board, acting through its committee (Fiscal Sufficiency Advisory Board), and the City. The agreement directs the Escrow Agent to establish two escrow accounts, and maintain appropriate balances to ensure the timely payment of debt service on outstanding General Obligation and Revenue Bonds. The City has agreed that certain ad valorem tax revenues received will be deposited each month into the escrow account in an amount specified by the underlying agreement. If the ad valorem taxes received in any month are inadequate to make the required deposit, the City must use other sources of funds to supplement the required deposits. The City also made deposits of $20,063,541 with the Escrow Agent during fiscal year 2010 to cover its debt service requirements on the Special Obligation Bonds and Loans. The City has agreed to deposit revenues each month in amounts specified in the underlying agreement. Defeasance of Long-Term Debt In prior years, the City had defeased certain outstanding general obligation, special obligation, and revenue bonds. For those defeasances involving advance refundings, the proceeds of the new bonds were placed in an irrevocable trust to provide for all future debt service payments on the defeased bonds. At September 30, 2010, the following outstanding bond is considered defeased: Defeased Debt: Balance $153,186,406 Limited Ad Valorem Tax Bonds, Series 2002: Homeland Defense/Neighborhood Capital Improvement Projects………….…………….…$102,305,000 Discretely Presented Component Units Long-Term Debt DOSP The changes in DOSP’s long-term debt for 2010 are as follows:

Beginning Ending Due WithinBalance Additions Reductions Balance One Year

Bonds payable 47,710,000$ 66,595,000$ 41,785,000$ 72,520,000$ 875,000$ Deferred amounts (21,000) (2,317,000) 134,000 (2,472,000) - Compensated absences 708,000 529,000 606,000 631,000 500,000 Other post-employmentbenefit obligation - 42,000 - 42,000 Loan from primary government 2,400,000 - 150,000 2,250,000 150,000

50,797,000$ 64,849,000$ 42,675,000$ 72,971,000$ 1,525,000$

The City has issued fixed rate revenue bonds on behalf of DOSP. The principal and interest of the revenue bonds are payable solely from the revenues of the parking facilities and, accordingly, are included in the accounts of the DOSP.


59

The DOSP, on July 21, 2005, entered into a loan agreement with the City of Miami. The loan was obtained through CDBG program funds up to a maximum of $3,000,000 to be used for the construction of a parking garage facility. Funds are disbursed on a reimbursement basis. The loan bears no interest and is payable in 40 semi-annual installments of $75,000 starting December 1, 2005. As of September 30, 2009, DOSP has drawn $3,000,000 of this loan. The balance as of September 30, 2010 is $2,250,000. The following summarizes the debt service to maturity of outstanding DOSP debt at September 30, 2010:

Year Ending LoanSeptember 30, Principal Interest Total Principal

2011 875,000$ 3,600,260$ 4,475,260$ 150,000$ 2012 910,000 3,557,822 4,467,822 150,000 2013 960,000 3,511,072 4,471,072 150,000 2014 1,005,000 3,460,691 4,465,691 150,000 2015 1,060,000 3,406,485 4,466,485 150,000

2016-2020 7,635,000 15,778,495 23,413,495 1,500,000 2021-2025 10,170,000 13,491,720 23,661,720 - 2026-2030 12,785,000 10,716,544 23,501,544 - 2031-2035 16,290,000 7,010,494 23,300,494 -

20336-2040 20,830,000 2,237,220 23,067,220 - Total 72,520,000$ 66,770,803$ 139,290,803$ 2,250,000$

Range of Rates 4.25%-5.66%

Bonds

NOTE 9. – SELF-INSURANCE A. Risk Management The City is self-insured for various risk of loss as defined below subject to, and in accordance with, the limitations set forth by Florida Statutes 768.28. The City has in place a commercial property program providing blanket real estate and personal property coverage on all City-owned properties. There has not been a significant reduction in insurance coverage from the previous year. Settled claims have not exceeded reserves in the past three years. The General Fund accounts for all risks of loss to which the City is exposed, including public liability, workers’ compensation, property and casualty, and employee health and accident-related losses. Certain employees and retirees of the City contribute, through payroll deductions or deductions from pension payments, to the cost of health benefits. Claim expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated using an independent actuarial valuation. Liabilities include an amount for claims that have been incurred but not reported (IBNR). The process used in computing claims liability is based on actuary and legal calculations and does not necessarily result in an exact amount because actual claims liabilities depend on such complex factors as inflation, changes in legal doctrines, and damage awards. Claims liabilities are re-evaluated periodically to take into consideration recently settled claims, frequency of claims, and other economic and social factors. The City maintains excess coverage with independent insurance carriers for the worker’s compensation, police torts, auto liability, public officials’ liability, and general liability self-insurance programs. Premiums are charged to the Risk Management Department and are determined based on amounts


60

necessary to provide funding for current losses and to meet the required annual payments during the fiscal year. The property insurance program provides coverage for windstorm and hail subject to a 5% of the total values at the time of loss at each location involved in the loss, subject to a minimum of $250,000 deductible for any one occurrence. At September 30, 2010, the total estimated liability of $180,428,258 is discounted at an interest rate of 5% and recorded in the government-wide financial statements. Changes in the claims liability amount in 2009 and 2010 were as follows:

Fiscal Year Beginning of Current YearEnded Fiscal Year Claims and Changes Claim Balance at

September 30, Liability in estimates Payments Fiscal Year End2009 142,592,170$ 49,071,914$ 36,548,910$ 155,115,174$ 2010 155,115,174 75,952,195 50,639,111 180,428,258

NOTE 10. – PENSIONS The City sponsors separate single-employer, defined benefit pension plans under the administration and management of separate Boards of Trustees: The City of Miami Fire Fighters and Police Officers Retirement Trust ("FIPO"), the City of Miami General Employees and Sanitation Employees Retirement Trust ("GESE") and Other Managed Trusts, and the City of Miami Elected Officers Retirement Trust (EORT), (collectively, the “Plans”). Basis of Accounting The financial statements for the Plans are prepared using the accrual basis of accounting. All plans are reported as pension trust funds in the City’s financial statements. Plan member contributions are recognized in the period which the contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plans. Method Used to Value Investments Investments of the Plans are recorded at fair market value. Securities traded on a national exchange are valued at the last reported sales price on the last business day of the fiscal year. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the last reported bid price. Commercial paper, time deposits, and short-term investment pools are valued at fair market value and mortgages are valued based on current market yield which approximates fair value. Net appreciation (depreciation) in fair value of investments includes realized and unrealized gains and losses. Interest and dividends are reported as investment earnings. Realized gains and losses on the sale of investments are based on average cost.


61

FIPO Plan Description FIPO is a single-employer, defined benefit plan established by the City pursuant to the provisions and requirements of Ordinance No. 10002 as amended. Participants are contributing police officers and firefighters with full-time employment status in the Police or Fire Department of the City. At October 1, 2009, the date of the most recent actuarial valuation, membership in the FIPO consisted of 1,974 retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them; current employees equaled 1,517 as of that date. Separate audited financial statements are provided for FIPO and can be obtained from the pension board at: FIPO, 1895 SW 3rd Avenue, Miami, Florida, 33129. Pension Benefits Effective October 1, 1998, members may elect to retire after 10 or more years of creditable service upon attainment of normal retirement age. Normal retirement age for members shall be 50 years of age. A member exercising normal service retirement or rule of 64 retirement (computation of service retirement on the basis of his or her combined age and creditable service equaling 64) shall be entitled to receive a retirement allowance equal to 3% of the member’s average final compensation (Member employed prior to March 8, 1984, annual earnable compensation during the last year or the highest one year compensation whichever is greater; member employed after March 8, 1984 annual earnable compensation during the last two year, or the highest two year compensation whichever is greater) multiplied by the years of creditable service for the first 15 years of such creditable service and 3.5% of average final compensation for years of creditable service in excess of 15 years, payable in monthly installments. Early retirement after twenty years of service is available. Rule of 68 shall mean a computation consisting of the sum of a member’s age and length of creditable service, which sum shall permit normal service retirement upon the member’s combined age and creditable service equaling to least 68. Effective October 1, 2009, the Rule of 68 shall only apply to firefighter members whose combined age and length of creditable service are less than 64 on September 30, 2009. Benefits for disability and death are also provided under the plan. Cost of Living Adjustment (COLA) Effective January 1, 1994, the FIPO Trust entered into an agreement with the City with regards to the funding methods, employee benefits, employee contributions, and retiree COLA. Members no longer contribute to the original COLA account (COLA I); a new COLA account (COLA II) was established. The agreement included the following: (a) the funding method was changed to an aggregate cost method, (b) all accounts were combined for investment purposes (membership and benefit, COLA I, and COLA II), (c) retirees receive additional COLA benefits, and (d) active members no longer contribute 2% of pretax earnings to fund the original retiree COLA account (COLA I). The COLA II account is funded annually by a percentage of the excess investment return from the COLA I account assets. The excess earnings contributed to the COLA II account are used to fund a minimum annual payment of $2.5 million, increasing by 4% compounded annually. To the extent necessary, the


62

City will fund the portion of the minimum annual payment not funded by the annual excess earnings no later than January 1 of the following year. Benefits payable from the COLA accounts are computed in accordance with an actuarially based formula as defined in Section 40.204 of the City of Miami Code. Benefits are subject to review and modification in accordance with City of Miami Code Section 40.204, which provides that all other matters regarding the COLA accounts shall be determined by negotiations between the City, the Board of Trustees and the bargaining representatives of the International Association of Fire Fighters (IAFF) and the Fraternal Order of Police (FOP). Deferred Retirement Option Plan (DROP) Members who are eligible for service retirement or Rule of 64 after September 1998 may elect to enter the DROP for a maximum of 36 months prior to October 1, 2001. Effective October 1, 2001, maximum participation in the DROP for firefighters shall be 48 full months and for police officers who elect the DROP on October 1, 2003, or thereafter, maximum participation in the DROP shall be 48 full months. A member’s creditable service, accrued benefit, and compensation calculation is frozen upon commencement of participation in the DROP; the participant’s and City’s contribution to the FIPO Trust for that participant ceases as the participant will not earn further creditable service for pension purposes. Effective July 24, 2008, firefighter DROP participants may also continue City employment for up to 54 full months (48 full months prior to July 24, 2008 and 36 full months prior to October 1, 2001). Police officers who elect the DROP on or after May 8, 2008, may continue City employment for up to 84 full months (48 full months prior to May 8, 2008 and 36 full months prior to October 1, 2003). No payment is made to or for the benefit of a DROP participant beyond that period. For persons electing participation in the DROP, an individual DROP account is created. Payment is made by the FIPO Trust into the employee’s DROP account in an amount equal to the regular monthly retirement benefit, which the participant would have received had the participant separated from service and commenced receipt of pension benefits. Payments received by participants in the DROP accounts are tax deferred. A series of investment vehicles, as established by FIPO’s Board of Trustees, are made available to DROP participants to choose from. Any losses, charges, or expenses incurred by the participant in his or her respective drop account are borne solely by the participant. Upon termination of employment, a member may receive distribution from the DROP account in the following manner: 1) lump sum, 2) periodic payments, 3) annuity, or 4) rollover of the balance to another qualified retirement plan. Any member may defer distribution until the latest date authorized by Section 401(a) (9) of the Internal Revenue Code. DROP participants are not entitled to receive an ordinary or service disability retirement and in the event of death of a DROP participant, there is no accidental death benefit for pension purposes. DROP participation does not affect any other death or disability benefit provided to a member under federal law, state law, City ordinance, or any rights or benefits under any applicable collective bargaining agreement. The DROP of the FIPO Trust also consists of a Benefit Actuarially Calculated DROP (BACDROP). A member may elect to BACDROP to a date no further than the date of their retirement eligibility date. The BACDROP period must be in 12 months increments, beginning at the start of a pay period, not to exceed 48 full months for firefighters (36 months prior to October 1, 2001) and for police officers who elected DROP on October 1, 2003 (36 months prior to October 1, 2003). Participation in the BACDROP does not preclude participation in the forward DROP.


63

Contributions and Funding Policies Members of FIPO are required to contribute 7% for Police Officers’ member and 9% for Firefighters’ member (8% prior to October 1, 2009) of their salary on a bi-weekly basis. The City is required to contribute such amounts annually as necessary to maintain the actuarial soundness of the plan and to provide FIPO with assets sufficient to meet the benefits to be paid to participants. Contributions to FIPO are authorized pursuant to City of Miami Code Sections 40.196 (a) and (b). Contributions to the FIPO Cost of Living Adjustment Accounts are authorized pursuant to Section 40.204 of the City of Miami Code. The City’s contributions to FIPO provide for non-investment expenses and normal costs. The yield on investments on FIPO serves to reduce future contributions that would otherwise be required to provide for the defined level of benefits under the Trust. The payroll for employees covered by FIPO for the year ended September 30, 2010 was approximately $122.2 million; the City's total payroll was approximately $298.5 Million.

Annual Pension Cost The City’s current year contribution was determined through an actuarial valuation performed as of October 1, 2009. Significant actuarial assumptions used to compute the annual contribution requirement are as follows:

Valuation date: October 1, 2009Actuarial cost method: Aggregate Cost MethodAmortization method: Not Applicable

Remaining amortization period: Not ApplicableAsset valuation method: 20% Write-Up Method: Expected value is based on the Interest

Discount/Investment Return rate applied to the acturial assetvalue as of previous valuation date and cash flow during theyear. 20% of the difference between Expected Value and theMarket Value (net of pending transfers to the COLA Fund) isadded to the Expected Value. The result cannot be greater than120% of market value or less than 80% of market value (net ofpending COLA transfers).

Actuarial assumptions Investment rate of return: 7.50%, compounded annually

Projected salary increases due to inflation: 3.25%Seniority/merit 5.00% to 0% reducing by attained age

Promotion/other 1.50%Mortality table: Ga94 - Mortality table

Mortality, disability, retirement and turnover: Pension Benefit Guaranty Corporation (PBGC) Non-OASDI basis rate tables

FIPO contributions are determined using the aggregate cost method. The aggregate cost method does not identify and separately amortize the unfunded actuarial liabilities. The annual pension cost is equal to the annual required contribution each year.


64

Year Ended Annual Pension Percentage of Net PensionSeptember 30 Cost (APC) APC Contributed Obligation

2008 36,040,251$ 100% - 2009 36,993,395 100% - 2010 59,025,379 100% -

Three Year Trend Information

GESE The Board of Trustees of the City of Miami General Employees and Sanitation Employees (GESE) Retirement Trust administers three defined benefit pension plans - (1) City of Miami General Employees and Sanitation Employees Retirement Trust (“GESE Trust”), (2) an Excess Benefit Plan for the City of Miami and (3) City of Miami General Employees and Sanitation Employees Retirement Trust Staff Pension Plan (“Staff Trust”). Each plan’s assets may be used only for the payment of benefits to the members of that plan, in accordance with the terms of the plan. Separate audited financial statements are provided for the GESE Plans and can be obtained from the pension board at: GESE, 2901 Bridgeport Avenue, Coconut Grove, Florida 33133. City of Miami General Employees and Sanitation Employees Retirement Trust (GESE Trust)

Plan Description The GESE Trust is a single-employer defined benefit plan. The GESE Trust was established pursuant to the City of Miami Ordinance No. 10002 and subsequently revised under City of Miami Ordinance No. 12111. The GESE Trust covers all City of Miami general and sanitation employees except certain employees eligible to decline membership. Participation in the GESE Trust is a mandatory condition of employment for all regular and permanent employees other than fire fighters, police officers, and those eligible to decline membership, as defined by the Ordinance. At October 1, 2009, the date of the most recent actuarial valuation, membership in the GESE Trust consisted of 2,374 retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them; current employees equaled 1,267 as of that date. Pension Benefits The minimum normal retirement age is 55. A member who has completed a combination of at least 10 or more years of creditable service plus attained age equaling 70 points may elect a rule of 70 retirement. Any member in service who has 10 or more years of continuous creditable service may elect to retire upon the attainment of normal retirement age. Subsequent to September 30, 2010 for members not eligible to retire as of that date, the retirement age and service will change to age 55 and 30 years of creditable service or age 60 and 10 years of continuous creditable service or a combination of at least ten years of creditable service plus attained age equaling 80 points (Rule of 80). Retirement benefits are generally based on 3% of the average final compensation multiplied by years of creditable service, which is paid annually in monthly installments. Early retirement, disability, death, and other benefits are also provided as defined in City of Miami Ordinance No. 12111. For service after September 30, 2010 for members not eligible to retire as of that date, 2.25% of average final compensation multiplied by creditable service up to 15 years, 2.5% of average final compensation for 16 to 20 years of service and 2.75% for service over 20 years. Effective September 30, 2010, for members


65

not eligible to retire on that date, member retirement allowances shall not exceed the lesser of 100 percent of the member’s average final compensation or an annual retirement allowance of $100,000. Members eligible to receive accumulated sick and vacation leave from the City of Miami are able to transfer the amount to an eligible retirement plan. The GESE Trust facilitates the transfer of the accumulated sick and vacation leave to any eligible retirement plan and is pursuant to City of Miami Code Section 40-266. Cost of Living Adjustment (COLA) Effective October 1, 1998, the Plan was amended to provide for an increase in the COLA paid to retirees to 4% with a $400 annual maximum increase, provided the retiree’s first anniversary of retirement has been reached. The amendment also provided for retirees electing the return of contribution option to receive a minimum COLA benefit of $27 per year and a maximum COLA benefit of $200 added to the previous COLA benefit, provided the retiree’s first anniversary of retirement has been reached. Deferred Retirement Option Plan (DROP) The City of Miami General Employees and Sanitation Employees Retirement Trust made the DROP available to all GESE Trust members effective May 1, 2002. The DROP is an enhancement to the GESE Retirement Trust that can provide a trust member with another way to save for retirement. It allows a participant to receive pension payments by depositing in the DROP program while continuing to work and receive pay and benefits as an active employee. At the end of the DROP period, when the participant is officially required to retire, the participant receives monthly pension payments based on the years of service and salary at the time that the participant enrolled in the DROP. In addition, the participant also receives the accumulated DROP account balance. The DROP monies can also be rolled over into a tax-qualified plan such as an Individual Retirement Account (IRA) or 457(b) government sponsored deferred compensation plan. Contributions and Funding Policies Members of the GESE Trust are required to contribute 10% of their salary on a bi-weekly basis. The contribution rate was increased to 13% of base salaries or wages for its union members for the year ended September 30, 2010. The Trusts’ funding policies provide for periodic contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are sufficient to maintain the actuarial soundness of the Trust and to accumulate sufficient assets to pay benefits when due. The City is required to contribute an actuarially determined amount that, when combined with participants’ contributions, will fully provide all benefits as they become payable. Contributions to the GESE Trust are authorized pursuant to City of Miami Code Section 40-241 (a) and (b). Contributions from the City are designed to fund the GESE Trust’s non-investment expenses and normal costs and to fund the unfunded actuarial accrued liability. The yield (interest, dividends, and net realized and unrealized gains and losses) on investments of the Trust serves to reduce or increase future contributions that would otherwise be required to provide for the defined level of benefits under the GESE Trust. The payroll for employees covered by the GESE Trust for the year ended September 30, 2010 was approximately $90.1 million; the City's total payroll was approximately $298.5 Million.


66

Annual Pension Cost The City’s current year contribution was determined through an actuarial valuation performed as of October 1, 2009. Significant actuarial assumptions used to compute the annual contribution requirement are as follows:

Valuation date: October 1, 2009Actuarial cost method: Modified entry age normalAmortization method: Level dollar amount, closed

Remaining amortization period: 9 - 20 yearsAsset valuation method: 5-Year Smoothed Market

Actuarial assumptions Investment rate of return: 8.10%

Projected salary increases: 5.25% Includes inflation at: 3.50%

Cost of living adjustments: 4% per year, with $54 per year minimum and $400 per year maximum. GESE Trust contributions are determined using the entry age normal cost method with frozen actuarial accrued liability. The annual pension cost is equal to the annual required contribution each year.

Year Ended Annual Pension Percentage ofSeptember 30 Cost (APC) APC Contributed

2008 22,762,902$ 100% - 2009 23,191,828 100% - 2010 24,037,093 100% -

Obligation Net Pension

GESE Excess Benefit Plan Plan Description The City of Miami Commission, in July 2000, pursuant to applicable Internal Revenue Code provisions, established a qualified governmental excess benefit plan to continue to cover the difference between the allowable pension to be paid and the amount of the defined benefit so the benefits for eligible members are not diminished by changes in the Internal Revenue Code. The Board of Trustees of the Trust administers the excess benefit plan. Plan members are not required to contribute to the Excess Benefit Plan. Members of the GESE Trust participate in this Plan. At October 1, 2009, the date of the most recent actuarial valuation, membership in the Excess Benefit Plan, consisted of 26 retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them and there are no current employees in the plan. Contributions and Funding Policies The payment of the City’s contribution of excess retirement benefits for eligible members of the Plan above the limits permitted by the Internal Revenue Code is: (a) funded from the City’s General Fund, (b) paid annually concurrently with the City’s annual contribution to normal pension costs which causes the


67

City to realize a reduction in normal pension costs in the same amount, and (c) deposited in a separate account established specifically for the GESE Trust to receive the City’s excess retirement benefit contributions. This account is separate and apart from the accounts established to receive the City’s normal pension contributions for the GESE Trust. The City is required to contribute amounts as benefits become payable. The payroll for employees covered by the Excess Benefit Plan for the year ended September 30, 2010 was approximately $90.1 million; the City's total payroll was approximately $298.5 Million. Annual Pension Cost and Net Pension Obligation The City’s current year contribution was determined through an actuarial valuation performed as of October 1, 2010. Significant actuarial assumptions used to compute the annual contribution requirement are as follows:


Remaining amortization period: 22 yearsAsset valuation method: Not Applicable

Actuarial assumptions Investment rate of return: 8.10% Projected salary increases 5.25%

Includes inflation at: 3.50%Cost of living adjustment None

GESE Excess Plan contributions are determined using the entry age normal cost method with frozen actuarial accrued liability.

Annual Required Percentage Annual PercentageYear Ended

September 30Contribution

(ARC)of ARC

ContributedPension Cost

(APC)of APC

ContributedNet Pension Obligation

2008 898,149$ 50% 835,311$ 0% 4,265,603 2009 566,046 82% 490,082 0% 4,291,360 2010 625,539 54% 541,428 0% 4,493,186



68

The City’s annual pension cost and net pension obligation to the GESE Excess Plan for the current fiscal year was as follows:

Annual required contribution 625,539$ Interest on net pension obligation 347,600 Adjustment to annual required contribution (431,711) Annual pension cost 541,428 Contributions made (339,602) Increase in net pension obligation 201,826 Net pension obligation, beginning of year 4,291,360 Net pension obligation, end of year 4,493,186$

City of Miami General Employees and Sanitation Employees Retirement Trust (Staff Trust) Plan Description The Staff Trust is a single-employer, defined benefit plan. The Staff Trust was established by the rule-making authority of the GESE Retirement Trust, pursuant to Chapter 40 of the Miami city code. The Staff Trust covers all administrative full-time employees and other positions as may be named by the Board of Trustees. Participation in the Staff Trust is a mandatory condition of employment for all full-time employees, other than those eligible to decline membership, as defined by the Plan document. At October 1, 2010, the date of the most recent actuarial valuation, membership in the Staff Trust had no retirees and beneficiaries currently receiving benefits; 1 terminated employees entitled to benefits but not yet receiving them and current employees equaled 11 as of that date. Pension Benefits Any member who has 10 or more years of continuous creditable service may elect to retire, regardless of age. Retirement benefits are generally based on 3% of the average final compensation during the highest two years of membership service multiplied by years of creditable service, which is paid annually in monthly installments. Contributions and Funding Policies Members of the Plan are required to contribute 10% of their salary on a bi-weekly basis. The funding policies of the Plan provide for periodic contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are sufficient to maintain the actuarial soundness of the Trust and to accumulate sufficient assets to pay benefits when due. The City is required to contribute an actuarially determined amount that, when combined with participants’ contributions, will fully provide all benefits as they become payable. The yield (interest, dividends, and net realized and unrealized gains and losses) on investments of the Staff Trust serves to reduce or increase future contributions that would otherwise be required to provide for the defined level of benefits under the Staff Trust. The payroll for employees covered by the Staff Trust for the year ended September 30, 2010 was approximately $738,900; the City's total payroll was approximately $298.5 Million.


69

Annual Pension Cost The City’s current year contribution was determined through an actuarial valuation performed as of October 1, 2010. Significant actuarial assumptions used to compute the contribution requirements are as follows:


Remaining amortization period: 8 - 22 yearsAsset valuation method: 3-year smoothed market


Projected salary increases: 6.00% Includes inflation at: 3.50%

Cost of living adjustments: None Staff Trust contributions are determined using the entry age normal cost method with frozen actuarial accrued liability. The annual pension cost is equal to the annual required contribution each year.

Year Ended Annual Pension Percentage of September 30 Cost (APC) APC Contributed

2008 109,163$ 100% - 2009 159,837 100% - 2010 132,542 100% -


ObligationNet Pension

Elected Officers Retirement Trust (EORT) Plan Description The City’s elected officials participate in a single-employer, defined benefit pension plan under the administration and management of a separate Board of Trustees, the City of Miami Elected Officers Retirement Trust (“EORT”). Under the EORT Plan, eligibility requires 7 years of total service as an elected official of the City to be vested without requiring that such service be continuous. This plan is non-contributory. The City of Miami Commission, in July 2000, pursuant to applicable Internal Revenue Code provisions, established qualified governmental excess benefit plans to continue to cover the difference between the allowable pension to be paid, and the amount of the defined benefit, so the benefits for eligible members are not diminished by changes in the Internal Revenue Code. EORT’s fiduciary administers the excess benefit plan. At December 31, 2009, the date of the most recent actuarial valuation, membership in the EORT consisted of 7 retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them; current employees equaled 4 as of that date.


70

Pension Benefits Benefits accrue for City Commissioners at the rate of 50% of the highest annual W-2 wages in the last three years of employment after 7 years of service as an elected official of the City plus 5% for each additional year up to 100% at 17 or more years of service. An active participant will be fully vested upon death and a single sum death benefit is payable. Contributions and Funding Policies Funding is in level payments under the individual aggregate cost method. Assets are allocated first to the non-active participants, then to the active participants based on their accrued liability. The unfunded present value of future benefits is determined for each individual and spread over their expected future working lifetime with the City. All funding is provided by the City. There are no participant contributions to the Trust. The payroll for employees covered by EORT for the year ended September 30, 2010 was approximately $600,000; the City's total payroll was approximately $298.5 Million. Annual Pension Cost The City’s current year contribution was determined through an actuarial valuation determined as of December 31, 2009. Significant actuarial assumptions used to compute the annual contribution requirement are as follows:

Valuation date: December 31, 2009Actuarial cost method: Individual Aggregate Cost MethodAmortization method: Not Applicable

Remaining amortization period: Not ApplicableAsset valuation method: December 31 market values


Projected salary increases: Inflation: N/A

Merit, longevity, etc: N/AMortality table: RP-2000 White Collar Active/Retiree, Healthy Mortality

table without setbackDisability, turnover and retirements: No disability or turnover assumed. Retirement is assumed

at the end of the current term or 100% vested.


71

EORT contributions are determined using the aggregate cost method. This method does not separately identify and amortize unfunded actuarial liabilities. The following contributions were made to EORT in accordance with actuarially determined contribution requirements, based on the actuarial valuation performed for each respective year. The annual pension cost is equal to the annual required contribution each year. As such, the three year trend information is combined with the six year required supplementary information as follows:

Year Ended Percentage Net PensionSeptember 30 Contributed Obligation

2010 1,275,242$ 100% -$2009 412,588 100% -2008 711,209 100% -2007 285,408 100% -2006 1,043,209 100% -2005 300,000 100% -

Annual Pension Cost(APC) and Annual

Required Contribution

Separate stand-alone financial statements are not issued for EORT therefore, presented below is the Statement of Fiduciary Net Assets and the Statement of Changes in Fiduciary Net Assets for the year ended September 30, 2010:

Statement of Fiduciary Net Assets

AssetsInvestments, at fair valueMoney Market Funds 5,173,718$

Total Assets 5,173,718

Net AssetsHeld in Trust for Pension Benefits 5,173,718$

AdditionsContributions:

Employer 1,275,242$ Investment Earnings:

Interest 65,790 Total Additions 1,341,032

DeductionsBenefits 252,105

Total Deductions 252,105 Change in Net Assets 1,088,927 Net Assets - Beginning of Year 4,084,791 Net Assets - End of Year 5,173,718$

Statement of Changes in Fiduciary Net Assets


72

The following table presents the Pension Trust Funds schedule of funding progress:

(2) Unfunded(1) Actuarial Unfunded (Overfunded)

Pension Actuarial Actuarial Accrued (Overfunded) Funded (3) as a PercentageTrust Valuation Value of Liability AAL Ratio Covered of Covered PayrollFund* Date Assets (AAL) (2) - (1) (1)/(2) Payroll ((2) - (1))/(3)GESE Retirement Trust 10/1/2009 645,614,641$ 780,625,200$ 135,010,559$ 82.70% 90,045,202$ 149.94%GESE Staff Plan 10/1/2009 1,556,718 2,121,806 565,088 73.37% 738,898 76.48%GESE Excess Plan 10/1/2009 - 5,704,602 5,704,602 0.00% 90,045,202 6.34%FIPO 10/1/2009 1,164,973,724 1,391,186,871 226,213,147 83.74% 122,212,346 185.10%

*EORT is not reflected on this schedule since it uses the aggregate method which does not separately identify an actuarial accrued liability.

The actuary used the aggregate actuarial cost method for valuation. This method does not identify or separately amortize unfunded actuarial liabilities, information about funded status and funding progress has been prepared using the entry age actuarial cost method for that purpose and that the information presented is intended to serve as a surrogate for the funded status and funding progress of the plan. The required schedule of funding progress disclosed above presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. See Required Supplementary Information Section for multi-year Pension Trust Fund and Other Post Employment Benefits Schedule of Funding Progress. Special Benefit Plans Certain executive employees of the City are allowed to join the ICMA Retirement Trust's 401(a) plan. This defined contribution deferred compensation plan, which covers governmental employees throughout the country, is governed by a Board of Directors responsible for carrying out the overall management of the organization, including investment administration and regulatory compliance. Membership for City employees is limited by the City Code to specific members of the City Clerk, City Manager, City Attorney's offices, Department Directors, Assistant Directors, and other executives. To participate in the plan a written trust agreement must be executed, which requires the City to contribute 8% of the individual's earnable compensation, and the employee to contribute 10% of their salary. Participants may withdraw funds at retirement or upon separation based on a variety of payout options. The City does not have any fiduciary responsibility relating to the plan, consequently the amount accrued for benefits are not recorded in the fiduciary funds. The following information relates to the City participation in this plan: Total current year's payroll for all employees 298,482,579$ Current year's payroll for participating employees 5,657,164 Current year employer contributions 309,654 In addition to coverage under the FIPO Pension Plan, City of Miami fire fighters and police officers are members of two separate non-contributory money purchase benefit plans established under the provisions of Florida Statutes, Chapters 175 and 185, respectively. These two plans are funded solely from the proceeds of certain excise taxes levied by the City and imposed upon property and casualty insurance coverage within the City limits. This tax, which is collected from insurers by the State of Florida, is remitted directly to the plans' Boards of Trustees. The City is entitled to levy such excise taxes solely for the use of the money purchase benefit plans as long as the minimum benefit provisions of Florida Statutes, Chapters 175 and 185 are met by FIPO. The City does not have any fiduciary responsibility


73

relating to the plan, consequently amount accrued for benefits are not recorded in the fiduciary funds. The total of such excise taxes received from the State of Florida and remitted to the plans was $9,180,986 for the year ended September 30, 2010. Accordingly, these monies are recorded as pass through funds in the City’s financial statements. Benefits are allocated to the participants based upon their service during the year and the level of funding received during said year. Participants are fully vested after nine years of service. Upon termination of service, a participant may elect to receive one of three options: 1) a lump sum payment, 2) five substantially equal payments, or 3) 10% or more in the first year and the remainder in any way over the next four years. The total must be paid out within five years. NOTE 11. – POST-EMPLOYMENT HEALTH CARE BENEFITS Pursuant to Section 112.0801 of the Florida Statutes, the City is required to permit participation in the health insurance program by retirees and their eligible dependents at a cost to the retiree that is no greater than the cost at which coverage is available for active employees. Retired Police Officers are offered coverage at a discounted premium. For Non-Police retirees (Fire Fighters, General Employees, Sanitation Employees, and Elected Officials) and their dependents, the City has a stated policy of providing health coverage and life insurance at a discounted premium equal to 75% of the blended group rate. GASB Statement No. 45 allows flexibility to governmental employers in the use of various actuarial cost methods. Several such acceptable actuarial cost methods were evaluated, including the entry age normal cost method, the frozen entry age normal cost method, the aggregate cost method, and the projected unit credit normal cost method. The goal was for to the City to adopt an actuarial cost method which is acceptable, appropriate, and commonly used. The City’s annual Other Post Employment Benefit (OPEB) liability was calculated using the entry age normal cost method. Plan Description The City of Miami has two separate single-employer OPEB plans for its retirees. One plan is for retiring Police Officers and the other plan is for all other retiring employees (Non-Police retirees). The benefits afforded to all retirees include lifetime medical, prescription, vision, dental, and certain life insurance coverage for retiree and dependents. Non-Police retirees receive the same benefits as similarly situated active employees of the City, while retired Police Officers receive the same benefits as provided through the Fraternal Order of Police (FOP). The City offers to its’ retirees comprehensive medical coverage and life insurance benefits through its self-insurance plan. This plan was established in accordance with Florida State Statute Section 112.0801 "Group Insurance: Participation by Retired Employees". Substantially all of the City's general employees, sanitation employees, police, and firefighters may become eligible for these benefits when they reach normal retirement age while working for the City (approximately 1,884 of the 5,278 covered participants are retirees). Funding Policy The City Commission is authorized to establish benefit levels and approve the actuarial assumptions used in the determination of contributions levels. The City Commission establishes the contributions requirements of plan members and the City. These contributions are neither mandated nor guaranteed. The retiree contributes the premium cost each month. Spouses and other dependents are also eligible for coverage, although the retiree pays the premium cost.


74

The FOP sponsors a Health Insurance Trust that is partially self-insured, which provides life, health, and accidental death and dismemberment insurance to substantially all full-time sworn members of the City of Miami Police Department, eligible retirees, their families, and beneficiaries. The Trust receives a significant source of its funding from the City, pursuant to the terms of a collective bargaining agreement. The agreement requires the City to reimburse the FOP Health Trust an amount that is required to bring the Trust’s available fund balance to $2.35 million annually. Currently, the City’s subsidy to OPEB benefits is unfunded. There are no separate Trust Funds or equivalent arrangements into which the City makes contributions to advance-fund the OPEB obligations, as it does for its retiree pension plans. The City's cost of the OPEB benefits, funded on a pay-as-you-go basis, was $12,327,670 for the year ended September 30, 2010. The ultimate implicit subsidies which are provided over time are financed directly by general assets of the City, which are invested in short-term fixed income instruments according to its current investment policy. The City selected an interest discount rate of 4.25%, which is the long-range expected return on such short-term fixed income instruments, to calculate the present values and costs of the OPEB. This is consistent with GASB Statement 45 guidance. Significant actuarial assumptions and methods used to estimate the OPEB liability are as follows:

Valuation date October 1, 2008Actuarial cost method Entry Age Normal Cost MethodAmortization method Level Percent of PayrollAmortization Period 28 years

Actuarial assumptions:Assumed rate of return on investments 4.25%

Assumed health care cost trend rates:2009 - 10.0%2010 - 6.8%2011 - 8.5%2012 - 8.0%2013 - 7.5%2014 - Thereafter - 7.0% - 5.0%

The following table is the Other Post Employment Benefits schedule of funding progress:

UAAL as a

Actuarial Actuarial Accrued Percentage ofActuarial Value of Liability (AAL) - Unfunded AAL Funded Covered CovererdValuation Assets* Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b - a) (a / b) (c) ([b - a] / c)Non-Police 10/1/2008 -$ 148,725,390$ 148,725,390 0.00% 170,785,202$ 87.08%Police 10/1/2008 - 373,130,546 373,130,546 0.00% 71,788,414 519.76%

Total -$ 521,855,936$ 521,855,936$ 0.00% 242,573,616$ 215.13%

* Amounts based on actuarial valuation. No assets existed in the plan at September 30, 2010


75

Actuarial Methods 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. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Although the valuation results are based on values the actuarial consultant believes are reasonable assumptions, the valuation result is only an estimate of what future costs may actually be and reflect a long-term perspective. Deviations in any of the several factors, such as future interest rates, discounts, medical cost inflation, Medicare coverage risk, and changes in marital status, could result in actual costs being greater or less than estimated. Projection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time off each valuation and the historical pattern of sharing of benefit costs between the employer plan members to that point. The 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 the assets, consistent with the long-term perspective of the calculations. Annual OPEB Cost and Net OPEB Obligation The City’s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize the actuarial liabilities (or funding excess) over a period not to exceed thirty years. The City’s annual OPEB cost for the fiscal year was $31,572,155 for Police retirees and $12,540,416 for the Non-Police retirees. The City’s annual OPEB cost and the net OPEB obligation for the fiscal year ended September 30, 2010 for both Non-Police and Police retirees are as follows:

Non-Police PoliceRetirees Retirees Total

Annual required contribution (ARC) 12,477,343$ 31,334,523$ 43,811,866$ Interest on net OPEB obligation 477,307 1,798,296 2,275,603 Adjustment to annual required contribution (414,234) (1,560,664) (1,974,898) Annual OPEB cost (expense) 12,540,416 31,572,155 44,112,571 Contributions made (5,282,534) (7,613,473) (12,896,007) Increase in net OPEB obligation 7,257,882 23,958,682 31,216,564 Net OPEB obligation - beginning of year 11,230,755 42,312,854 53,543,609 Net OPEB obligation - end of year 18,488,637$ 66,271,536$ 84,760,173$

The City’s percentage of annual OPEB cost contributed to the plans, and the net OPEB obligations for the fiscal year ended September 30, 2010 are as follows:

Beginning Percentage of EndingFiscal Balance Annual of Annual BalanceYear Net OPEB OPEB Amount OPEB Cost Net OPEB

Ending Obligation Cost Contributed Contributed ObligationPolice 9/30/2010 42,312,854$ 31,572,155$ 7,613,473$ 24.11% 66,271,536$ Non-Police 9/30/2010 11,230,755 12,540,416 5,282,534 42.12% 18,488,637

Total 53,543,609$ 44,112,571$ 12,896,007$ 29.23% 84,760,173$

The 2010 contributions for the Police and non-Police retiree plans represented 24.11% and 42.12% respectively, of the annual required contributions. See Required Supplementary Information Section for multi-year Pension Trust Fund and Other Post Employment Benefits Schedule of Funding Progress.


76

NOTE 12. – COMMITMENTS AND CONTINGENCIES The City participates in a number of federal and state assisted programs. These programs are subject to audit under the requirements of the Single Audit Act and Chapter 10.650, Rules of the Auditor General. The City anticipates no material adverse findings from such audits. Throughout the fiscal year 2010, the City continued to experience the significant negative economic developments surrounding the overall market liquidity, credit availability, and market collateral levels. Consequently, the City’s required contribution amount to the GESE, FIPO and EORT plans, which are necessary to maintain the actuarial soundness and to provide the level of assets sufficient to meet participant benefits, could significantly increase in future periods. It is management’s opinion that future contribution to the Plans will not have a material adverse effect on the City’s financial position. Global Agreement: In December 2007, the City, the County, the OMNI CRA, and the Southeast Overtown Park West CRA, entered into an inter-local agreement that establishes the funding framework for the several major facilities and infrastructure improvement projects. Those projects include the Arsht Performing Arts Center, Miami Port Tunnel, Museum Park improvements, and the Miami Marlins Baseball Stadium. The agreement specifically calls for the OMNI CRA to increase its contribution to the County to service debt and other loans on the Arsht Performing Art Center. Further, the agreement established parameters by which the City, County, and CRAs would move forward with the legal process of extending the lives and expanding the geographic boundaries of both CRAs, and utilizing the additional tax increment revenues to finance affordable housing, infrastructure, and redevelopment projects consistent with the CRAs’ redevelopment plans. The additional OMNI CRA tax increment revenues could also be used to finance the City’s contributions to the Miami Port Tunnel project and the Museum Park improvements. Finally, the agreement addresses the City’s and County’s Miami Marlins Major League Baseball project stadium which currently is being built on the former Orange Bowl location site. To date, the total contributions required to be made by the City for the Museum Park Improvement projects has not been determined. Commitments related to the baseball stadium project and Port Tunnel project are detailed below. International Police Training Facility and Law Enforcement High School: On November 9, 2007, the City Commission adopted Resolution No. R-07-0650 which authorized the design, construction, funding and contingencies of a co-located International Police Training Facility and Law Enforcement High School on City-owned property located at 405 Northwest 3rd Avenue (known as the "College of Policing and Forensic High School") with The School Board of Miami-Dade County (the “School Board”). As of September 30, 2010 the construction of the College of Policing and Forensic High School was substantially complete and the facility is in operation. The City and the School Board entered into an Operating Agreement in the form of a lease agreement whereby the School Board leases its portion of the facility from the City for an initial term forty (40) years for the cost of $1.00 per year with the $40 payable in advance of occupancy. At the end of the initial term, the School Board will have four (4) ten-year options to renew the lease. The School Board may exercise this option upon six (6) months prior written notice to the City, provided that the School Board is not otherwise in default under the Operating Agreement and provided the Parties come to a mutual agreement regarding any capital expenditures that may be required to continue the useful life of


77

the facility during the option period(s). The parties will share the operating/maintenance costs in proportion to their occupancy percentages (59% for the City and 41% for the School Board). Financial Urgency on Union Contracts – On April 30, 2010, the City invoked on the International Firefighters Association, Local 587, (IAFF), the process under Section 447.4095, F.S., claiming “financial urgency” in order to modify the existing Collective Bargaining Agreement. The City and the IAFF continued to bargain for a successor collective bargaining agreement, however did not come to an agreement. On May 27, 2010, 2010, the City advised the Public Employees Relations Commission (“PERC”) that it had engaged in negotiations on the impact of the financial urgency, and any action necessitated by the financial urgency, and the City and the IAFF union were at an impasse. On July 28, 2010, the City invoked on the Fraternal Order of Police, Miami Lodge 20, (FOP), Miami General Employees American Federation of State, County, and Municipal Employees, Local 1907, (AFSCME 1907) and Miami Sanitation Employees American Federation of State, County and Municipal Employees, Council 79, Local 871, (AFSCME 871), the process under Section 447.4095, F.S., claiming “financial urgency” in order to modify the existing Collective Bargaining Agreements. The City and the FOP, AFSCME 1907 and AFSCME 871 continued to bargain for a successor collective bargaining agreement, however did not come to an agreement. On August 16, 2010, the City advised the Public Employees Relations Commission (“PERC”) that it had engaged in negotiations on the impact of the financial urgency, and any action necessitated by the financial urgency, and the City and the FOP, AFSCME 1907 and AFSCME 871 unions were at an impasse. On August 31, 2010, the City Commission voted to reduce wages, insurance and pension benefits on all collective bargaining agreements. The Fraternal Order of Police, Miami Lodge 20, and the International Association of Firefighters, Local 587, have subsequently filed complaints, respectively, with PERC alleging unfair labor practices in violation of F.S. Chapter 447 Part II. Additionally, each has filed complaints in circuit court challenging F.S. 447.4095. Litigation The City is involved in various lawsuits arising in the ordinary course of operations. Although the outcome of these matters is not presently determinable, it is the opinion of management of the City based upon consultation with legal counsel, that the outcome of these matters will not have an adverse material effect on the financial position of the City beyond the amounts accrued for its self-insured liability. NOTE 13. – SUBSEQUENT EVENTS Sidney S. and Danielle Wellman vs. City of Miami, Miami–Dade County Circuit Court, Case No. 99-19523 CA 15, consolidated with, Nadine Theodore vs. City of Miami, Miami-Dade County Circuit Court, Case No. 99-28417 CA 30 (WRB/Outside Counsel) – These two consolidated cases were a class action constitutional challenge to the City’s vehicle Impoundment (“VIP”) Ordinance. The VIP ordinance authorized the impoundment of a vehicle involved in crimes of misdemeanor solicitation of prostitution, illegal narcotics and dumping. The trial court found that the ordinance was not void but held that Plaintiffs were entitled to refunds. The parties reached a settlement in the amount of $3,400,000. On August 24, 2010, the Court granted preliminary approval to the settlement. A claims administrator was appointed, and class notices were mailed out. As of January 14, 2011, according to a report from the claims administrator, to date, 234


78

claim forms have been received out of the nearly 16,098 potential claimants, or 1.45% of all potential claimants. On January 7, 2011, the Court granted final approval of the settlement. The $3.4 million settlement has been accrued as a liability at September 30, 2010.

Port of Miami Tunnel and Access Improvement Project/Wells Fargo Bank, National Association $50,000,000 Revenue Note Series 2010. On December 16, 2010, the City obtained a Revenue Note in the amount of $50,000,000 from Wells Fargo Bank N.A under a loan agreement dated January 5, 2011 for the purpose of financing the Miami Port Tunnel Project of which the $50,000,000 was paid to the Florida Department of Transportation in the form of a grant. The Series 2010 Note bears interest from the Closing Date until paid, at the Securities Industry and Financial Markets Association (SIFMA) Index Floating Rate for the actual days elapsed, payable on each interest Payment date, and the principal thereof will be payable unless sooner paid, (i) on January 5, 2012, in the amount of $5,000,000 and the balance on January 5, 2013, on which date all unpaid principal, and interest on the Series 2010 Notes Matured. The SIFMA index floating Rate on January 5, 2011 was 4.34%. The Series 2010 Notes are secured by covenanted to budget and appropriate in the City’s annual budget from non-ad valorem revenues.

NOTE 14. – PRONOUNCEMENTS ISSUED, BUT NOT YET ADOPTED GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, was issued in March 2009. The objective of this Statement is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This Statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The provisions of this Statement will be effective for the City beginning with its year ending September 30, 2011. GASB Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans, was issued in December 2009. The objective of this Statement is to address issues related to the use of the alternative measurement method and the frequency and timing of measurements by employers that participate in agent multiple-employer other postemployment benefit (OPEB) plans (That is, agent employers). This Statement amends Statement No. 45, Accounting and Financial reporting by Employers for Postemployment Benefits Other Than Pensions, to permit certain OPEB plans to use an alternative measurement method. Consistent with this change to the employer-reporting requirements, this Statement also amends Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, which requires that a defined benefit OPEB plan obtain an actuarial agent multiple-employer OPEB plan and its participating employers, those measures should be determined as of a common date and at a minimum frequency to satisfy the agent multiple-employer OPEB plan’s financial reporting requirements. The provisions of this Statement will be effective for the City beginning with its year ending September 30, 2012. GASB Statement No. 59, Financial Instruments Omnibus, was issued in June 2010. The objective of this Statement is to update and improve existing standards regarding financial reporting and disclosure requirements of certain financial instruments and external investment pools for which significant issues have been identified in practice. The requirements of this Statement will improve financial reporting by providing more complete information, by improving consistency of measurements, and by providing clarifications of existing standards. The provisions of this Statement are effective for the City beginning with its year ended September 30, 2011.


79

GASB Statement No. 61, The Financial Reporting Entity: Omnibus, was issued in December 2010. The Statement amends GASB Statement No. 14, The Financial Reporting Entity, and No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. The Statement is intended to improve the existing standards for defining and presenting the financial reporting entity by guiding governments to: include the organizations that should be included; exclude the organizations that should not be included and display and disclose financial information about component units in the most appropriate and useful manner. The Statement’s most significant effects include increasing the emphasis on financial relationships between a primary government and component units. The provisions of this Statement will be effective for the City beginning with its year ending September 30, 2013. GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, was issued December 2010. The Statement is intended to enhance the usefulness of GASB Codification by incorporating certain accounting guidance issued by the FASB and the AICPA that is applicable to state and local governments. The provisions of this Statement will be effective for the City beginning with its year ending September 30, 2013. The City’s management has not yet determined the effect these statements will have on the City’s financial statements.

80


City of Miami, FloridaSchedule of Revenues, Expenditures and Changes In Fund Balance

Budget and Actual - General FundFor The Year Ended September 30, 2010

Variance with Budgeted Amounts Final Budget

Original Final Actual Amounts Positive (Negative)Revenues:

Property Taxes 257,946,343$ 247,646,519$ 247,646,519$ - Franchise and Other Taxes 39,086,516 36,448,254 36,448,254 - Licenses and Permits 29,172,916 25,149,775 25,149,775 - Fines and Forfeitures 6,142,461 4,298,283 4,298,283 - Intergovernmental Revenues 41,323,714 51,304,064 51,304,064 - Charges for Services 80,146,969 78,129,829 78,129,829 - Interest 3,200,000 2,733,028 2,733,028 - Other 2,140,226 12,975,512 6,332,053 (6,643,459)

Total Revenues 459,159,145 458,685,264 452,041,805 (6,643,459)

Expenditures:General Government

Mayor 614,291 641,825 641,825 - Board of Commissioners 1,700,000 1,576,629 1,576,629 - Office of City Manager 7,279,041 8,282,337 8,282,337 - Office of City Clerk 1,776,266 2,095,982 2,095,982 - Office of Civil Service 308,922 295,128 295,128 - Office of Auditor General 708,508 700,799 700,799 - Office of Communications 873,876 820,270 820,270 - Employee Relations 3,574,037 3,178,847 3,178,847 - Information Technology 12,049,852 10,466,847 10,466,847 - Office of the City Attorney 5,133,366 5,195,475 5,195,475 - Office of Strategic Planning & Budgeting 1,457,632 1,398,194 1,398,194 - Purchasing 1,205,159 1,219,214 1,219,214 - Office of Hearing Boards 862,291 846,911 846,911 - Finance 4,923,870 5,915,675 5,915,675 - Capital Improvement Administration 2,191,685 1,353,149 1,353,149 - Non-Departmental (2,716,562) 11,842,313 10,926,317 915,996

Total General Government 41,942,234 55,829,595 54,913,599 915,996

Planning and DevelopmentBuilding 6,423,251 6,004,952 6,004,952 - Department of Planning 1,954,656 1,969,392 1,969,392 - Office of Zoning 607,373 1,000,509 1,000,509 -

Total Planning and Development 8,985,280 8,974,853 8,974,853 -

Public WorksSolid Waste 20,343,174 19,891,809 19,891,809 - General Service Administration 14,512,059 16,862,289 16,614,278 248,011 Public Works 17,423,680 14,769,869 14,770,019 (150)

Total Public Works 52,278,913 51,523,967 51,276,106 247,861

Public SafetyFire- Rescue 88,013,463 90,739,229 90,635,858 103,371 Police 139,042,987 140,084,014 140,077,685 6,329

Total Public Safety 227,056,450 230,823,243 230,713,543 109,700

PensionsG.E.S.E. Pension 29,161,512 29,534,344 29,534,344 - F.I.P.O. Pension 59,478,244 59,478,244 59,478,244 - Elected Officials & Administrators Pension 1,900,000 962,677 962,677 -

Total Pension 90,539,756 89,975,265 89,975,265 -

Public Facilities 5,298,141 4,389,912 4,389,912 - Parks and Recreation 21,603,437 23,755,931 23,755,930 1 Risk Management 24,876,280 28,998,188 22,354,729 6,643,459 Organizational Support 32,218,742 32,218,742 32,218,742 -

Total Expenditures 504,799,233 526,489,696 518,572,679 7,917,017

Excess (Deficiency) of Revenues Over Expenditures (45,640,088) (67,804,432) (66,530,874) 1,273,558

Other Financing Sources (Uses):Transfers In 54,619,085 53,493,902 53,493,902 - Transfers Out (8,978,997) (13,135,534) (13,493,245) (357,711) Total Other Financing Sources (Uses) 45,640,088 40,358,368 40,000,657 (357,711)

Net Change in Fund Balance - (27,446,064) (26,530,217) 915,847 Fund Balance - Beginning of Year - - 39,972,587 39,972,587 Fund Balance - End of Year -$ (27,446,064)$ 13,442,370$ 40,888,434$

The accompanying notes are an integral part of the required supplementary information.

81

City of Miami, FloridaSchedule of Revenues, Expenditures, and Changes In Fund Balance

Budget and Actual - Fire Rescue Services FundFor The Year Ended September 30, 2010



Intergovernmental Revenues -$ 9,226,903$ 9,226,903$ -$ Charges for Services - 1,146 1,146 - Interest - 436 436 - Other 11,572,401 34,068 34,068 -

Total Revenues 11,572,401 9,262,553 9,262,553 -

Expenditures:Current Operating:Public Safety 8,504,493 9,540,577 8,161,190 1,379,387 Capital Outlay 3,067,908 - - -


Excess (Deficiency) of Revenues Over Expenditures - (278,024) 1,101,363 1,379,387

Other Financing Sources:Transfers In - 278,024 278,024 - Total Other Financing Sources - 278,024 278,024 -

Net Change in Fund Balance - - 1,379,387 1,379,387 Fund Balance - Beginning of Year - - (7,772,670) (7,772,670) Fund Balance - End of Year -$ -$ (6,393,283)$ (6,393,283)$

The accompanying notes are an integral part of the required supplementary information.

82

83

CITY OF MIAMI, FLORIDANOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

YEAR ENDED SEPTEMBER 30, 2010 (UNAUDITED)

NOTE 1. - BUDGETARY POLICY

A. BUDGET POLICY

The City Commission annually adopts an operating budget ordinance for all governmental funds of the City, except for the Capital Projects Funds. The Capital Projects Funds are budgeted on a total project basis for which annual budgets are not available. For governmental funds, budgets are prepared on a basis consistent with accounting principles generally accepted in the United States of America.

B. BUDGET-LEGAL COMPLIANCE

The City follows these procedures in establishing the budgetary data reflected in the accompanying financial statements:

- Prior to August 31st, the City Manager submits to the City Commission a proposed operating budget by fund, except for the General Fund, which is at the departmental level, for the fiscal year commencing the upcoming October 1st. The operating budget includes proposed expenditures and the means of financingthem.

- The Mayor prepares and delivers a budgetary address annually to the people of the City between July 1st

and September 30th.

- Such report is prepared after consultation with the City Manager.

- Public hearings are conducted to obtain taxpayer comments.

- Prior to October 1st, the budget is legally enacted through the passage of an ordinance and adoption of the budget report.

- Management may not make changes to the adopted budget without the approval of a majority vote of the Commission.

- The Commission may transfer among departments any part of an unencumbered balance of an appropriation to a purpose for which an appropriation for the current year has proved insufficient. At the close of each fiscal year, the unencumbered balance of each appropriation reverts to the fund from which it was appropriated and is subject to future appropriations.

- Budgets are monitored at varying levels of classification detail; however, budgetary control is legally maintained at the fund level except for the General Fund, which is maintained at the departmental level.

All budget amendments require City Commission approval. During fiscal 2010, supplemental appropriations totaling $35,654,749 in the General Fund, $8,736,333 in the Fire Rescue Services Fund, $93,682,881 in Public Safety Capital Fund, $(659,257) in General Government Capital Fund, $32,102,601 in Streets and Sidewalks Capital Fund, and $106,674,318 in Other Non-Major Funds was required to fund expenditures for unanticipated program requirements.

Unfunded(Overfunded)

(1) Actuarial Unfunded as a PercentageActuarial Actuarial Accrued (Overfunded) Funded (3) of CoveredValuation Value of Liability AAL Ratio Covered Payroll

Date Assets (AAL) (2) - (1) (1)/(2) Payroll ((2) - (1))/(3)

GESE Retirement Trust (b)10/1/2009 645,614,641 780,625,200 135,010,559 82.70% 90,045,202 149.94%10/1/2008 691,791,000 808,618,183 116,827,183 85.55% 90,974,647 128.42%10/1/2007 664,145,175 770,218,984 106,073,809 86.23% 82,052,702 129.28%

GESE Staff Plan (b)10/1/2009 1,556,718 2,121,806 565,088 73.37% 738,898 76.48%10/1/2008 1,313,407 1,748,147 434,740 75.13% 632,259 68.76%10/1/2007 1,138,655 1,622,719 484,064 70.17% 734,116 65.94%

GESE Excess Plan (b)10/1/2009 - 5,833,742 5,833,742 0.00% 90,045,202 6.48%10/1/2008 - 5,151,124 5,151,124 0.00% 90,974,647 5.66%10/1/2007 - 8,600,801 8,600,801 0.00% 82,052,702 10.48%

FIPO (c)10/1/2009 970,811,000 1,391,200,000 420,389,000 69.78% 122,200,000 344.02%10/1/2008 1,018,900,000 1,452,500,000 433,600,000 70.15% 129,400,000 335.09%10/1/2007 1,268,900,000 1,318,400,000 49,500,000 96.25% 103,600,000 47.78%

City of Miami Other Post Employment Benefits (d)10/1/2008 - 521,855,936 521,855,936 0.00% 242,573,616 215.13%10/1/2006 - 480,319,812 480,319,812 0.00% 187,489,148 256.19%

a. For information regarding pension contribution percentage rates, assumptions, amortization method, see Note 10.b. Calculated using Entry Age Normal Actuarial Accrued Liabilityc. Calculated using the Aggregate Cost Method, the only available method at the timed. Amounts based on actuarial valuation. No assets existed in the plan at September 30, 2010e. EORT is not reflected on this schedule since it uses the aggregate method which does not separately identify an actuarial accrued liability.

City of Miami, FloridaPension Trust Funds and Other Post Employment Benefits

(Unaudited)Schedule of Funding Progress (a)

84

Non-major Governmental Funds

SPECIAL REVENUE FUNDSSpecial Revenue Funds are used to account for special revenues that are legally restricted to expenditures for specified purposes.

Community Redevelopment Agency (OMNI CRA) – To account for revenues and expenditures to be used for general operations in the defined OMNI Community Redevelopment Area.

Community Redevelopment Agency (Midtown CRA) – To account for revenues and expenditures to be used for special operations in the defined Midtown Community Redevelopment Area.

Community Redevelopment Agency (SEOPW) – To account for revenues and expenditures to be used for special operations in the defined Southeast Overtown Park West Community Redevelopment Area.

Homeless Program – To account for the activities of the City’s homeless program.

Community Development – To account for the proceeds from the Federal government under the U.S. Department of Housing and Urban Development.

Choice Housing Vouchers – To account for the monies received for administration and assistance to be provided in accordance with Section 8 of the U.S. Housing Act of 1937, as amended, under the Choice Housing Voucher Program.

State Housing Initiatives Program (SHIP) – To account for the monies received from the State of Florida Housing Finance Corporation to used to provide home ownership and rental housing programs at the local level.

Convention Center – To account for the operations of the City of Miami/ University of Miami James L. Knight International Center and Parking Garage.

85


SPECIAL REVENUE FUNDS

Economic Development & Planning Services – To account for the operations of the Economic Development and Planning Services.

Net Offices – To account for the operations of the City’s Neighborhood Enhancement Teams (Net Offices).

Parks & Recreation Services – To account for the operations of the Parks and Recreation Services.

Police Services – To account for the proceeds of various grants from Local, State, and Federal Agencies that are expended for police activities.

Law Enforcement Trust – To account for confiscated monies awarded to the City for law enforcement related expenditures as stipulated by State Statutes.

Public Works Services – To account for the proceeds granted from Local and State Agencies to be used for maintenance of streets, highways, sidewalks and infrastructure.

City Clerk Services – To account for the operations of the Passport Facility, Municipal Archives and Records, and related programs.

Local Option Gas Tax (LOGT) – To account for the Local Option Gas Tax levied on the purchases of gasoline to be used for street improvements.

Emergency Services Fund – This Special Revenue Fund accounts for grants and FEMA reimbursements related to disasters. Additionally, this fund accounts for non-disaster related reimbursable expenditures.

General Special Revenue– To account for activities that are designated as special revenue which do not fall into one of the previous special revenue categories.

86


SPECIAL REVENUE FUNDS

Departmental Improvement Initiatives – To account for the funds designated for the City of Miami initiatives related to quality of life and technology.

Transportation and Transit – To account for the operations of the City’stransit and transportation projects.

Public Services Tax – To accounts for the utility service tax levied on purchases of communication and other utility services.

Liberty City Revitalization Trust – To account for the revitalization efforts for the redevelopment of the Liberty City Community Revitalization District.

Virginia Key Beach Trust – To account for the activities to preserve, restore, and maintain the Historic Virginia Key Beach Park.

Gusman and Olympia – To account for the activities of Gusman and Olympia Facilities.

87


DEBT SERVICE FUNDS

Debt Service Funds are used to account for the accumulation of resources, payments of general obligation bond principal, interest from government resources, special obligation bond principal and interest from pledged revenues when the government is obligated in some manner for the payment.

General Obligation Bonds – To account for monies for payment of principal, interest, and other costs related to various issues of long-term general obligation bonds. Debt Service is financed primarily by an ad valorem tax.

Special Obligation Bonds – To account for monies for payment of principal, interest, and other costs related to various special obligation and revenue bonds and loans.

SEOPW CRA Other Special Obligation Bonds – To account for monies for payment of principal, interest, and other costs related to various CRA special obligation bonds and loans.

88


CAPITAL PROJECTS FUNDSCapital Projects Funds are used to account for the acquisition and construction of major capital facilities.

SEOPW Community Redevelopment Agency - To account for the acquisition or construction of major capital facilities for community redevelopment in the defined Community Redevelopment Area.

Public Safety – To account for the acquisition or construction of major capital facilities that support the City of Miami’s Police and Fire operations.

Sanitary Sewers – To account for expenditures for the construction of sanitary sewers.

Storm Sewers – To account for expenditures for the construction of storm sewers.

Solid Waste – To account for the acquisition of equipment or facility maintenance associated with the collection and removal of solid waste.

Parks and Recreation – To account for the acquisition, rehabilitation, or construction of major capital facilities for cultural and recreational activities such as parks, elderly and youth day care centers.

Disaster Recovery – To account for revenue received from the Federal Emergency Management Agency (FEMA), insurance and other agencies as reimbursement for city-wide disasters in the areas of debris removal, roads and bridges, buildings and equipment, parks, marinas, stadiums and other measures of relief.

Mass Transit – To account for the expenditures related to mass transit.

89

Homeless CommunityOmni CRA Midtown CRA SEOPW CRA Program Development

AssetsPooled Cash, Cash Equivalents and Investments 34,766,111$ 1,500$ 24,847,915$ -$ 6,923,101$Restricted Cash and Investments - - - - 4,006,271Receivables

(Net of Allowances for Uncollectibles):Accounts - - - - 178Loans Receivable - - - - 1,794Taxes - - - - -Due from Other Governments - - - 234,480 3,617,941

Accrued Interest 7,374 - 4,515 - 8,123Prepaids 310,000 - - - -Other Assets - - - - -

Total Assets 35,083,485$ 1,500$ 24,852,430$ 234,480$ 14,557,408$


Accounts Payable and Accrued Liabilities 352,329$ 1,500$ 457,488$ 100,269$ 2,558,408$Due to Other Funds - - - 190,408 -Due to Other Governments 4,962,360 - 5,722,737 - 296,295Deferred Revenue or Unearned Revenue - - - 35,216 1,206,965Deposits - - - - 212,010

Total Liabilities 5,314,689 1,500 6,180,225 325,893 4,273,678

Fund Balances (Deficits):Reserved for:Encumbrances - - - 924 1,139,464Debt Service - - - - -Prepaid Items 310,000 - - - -Future Settlements - - - - -

Unreserved, Undesignated 29,458,796 - 18,672,205 (92,337) 9,144,266Total Fund Balances (Deficits) 29,768,796 - 18,672,205 (91,413) 10,283,730

Total Liabilities and Fund Balances (Deficits) 35,083,485$ 1,500$ 24,852,430$ 234,480$ 14,557,408$

Special Revenue Funds

City of Miami, FloridaCombining Balance Sheet

Non-major Governmental FundsSeptember 30, 2010

90

EconomicChoice Development Parks & Law

Housing Convention & Planning Net Recreation Police EnforcementVouchers SHIP Center Services Offices Services Services Trust

1,151,319$ 1,964,802$ -$ 8,235,284$ 1,344,145$ 2,596,870$ 6,950,247$ 3,315,167$ - - 177,126 - - - - -

- - 466,485 - 17,759 8,568 784,620 - - - - - - - - - - - - - - - - - - - - 46,331 40,000 55,288 342,905 - - 2,545 - - 60 - 6,238 9,022 - - - - - - - - - - - - - - - -

1,151,319$ 1,967,347$ 643,611$ 8,281,615$ 1,401,964$ 2,660,726$ 8,084,010$ 3,324,189$

5,889$ 37,979$ 32,499$ 80,212$ -$ 97,664$ 767,398$ 88,558$ - - 1,238,211 - - - - - - - - - - - - - - 1,579,987 - - 40,000 4,962 483,664 - - - - - 3,810 - - 112,413

5,889 1,617,966 1,270,710 80,212 43,810 102,626 1,251,062 200,971

2,400 4,000 2,438 - 35,193 284,503 674,791 145,296 - - - - - - - - - - - - - - - - - - - - - - - -

1,143,030 345,381 (629,537) 8,201,403 1,322,961 2,273,597 6,158,157 2,977,922 1,145,430 349,381 (627,099) 8,201,403 1,358,154 2,558,100 6,832,948 3,123,218 1,151,319$ 1,967,347$ 643,611$ 8,281,615$ 1,401,964$ 2,660,726$ 8,084,010$ 3,324,189$

(continued)


91

Local General DepartmentalPublic Works City Clerk Option Emergency Special Improvement

Services Services Gas Tax Services Revenues InitiativesAssets

Pooled Cash, Cash Equivalents and Investments 2,219,623$ 489,776$ -$ -$ 3,564,289$ 1,514,545$Restricted Cash and Investments - - - - - - Receivables

(Net of Allowances for Uncollectibles):Accounts - - - - - - Loans Receivable - - - - - - Taxes - - - - - - Due from Other Governments - - 599,910 1,445,954 643,540 22,975

Accrued Interest 2,074 - - - - - Prepaids - - - - - - Other Assets - - - - - -

Total Assets 2,221,697$ 489,776$ 599,910$ 1,445,954$ 4,207,829$ 1,537,520$


Accounts Payable and Accrued Liabilities -$ 14,865$ -$ 646,099$ 1,016,299$ 145,489$Due to Other Funds - - 462,272 5,931,818 - - Due to Other Governments - - - - - - Deferred Revenue or Unearned Revenue - - - 2,969,997 431,676 175,892Deposits - - - - - -

Total Liabilities - 14,865 462,272 9,547,914 1,447,975 321,381

Fund Balances (Deficits):Reserved for:Encumbrances 8,283 7,225 - 49,085 - 122,855Debt Service - - - - - - Prepaid Items - - - - - - Future Settlements - - - - - -

Unreserved, Undesignated 2,213,414 467,686 137,638 (8,151,045) 2,759,854 1,093,284Total Fund Balances (Deficits) 2,221,697 474,911 137,638 (8,101,960) 2,759,854 1,216,139

Total Liabilities and Fund Balances (Deficits) 2,221,697$ 489,776$ 599,910$ 1,445,954$ 4,207,829$ 1,537,520$




92

LibertyPublic City Gusman Total General Special

Transportation Services Revitalization Virginia Key and Special Obligation Obligation& Transit Tax Trust Beach Trust Olympia Revenue Bonds Bonds

1,168,184$ -$ 535,168$ 142,944$ 922,847$ 102,653,837$ -$ 9,390,762$- - - - - 4,183,397 - 19,415,503

- 3,004,234 - 500 563,773 4,846,117 - -- - - - - 1,794 - -- - - - - - 1,650,739 -

2,714,064 4,983,156 - - - 14,746,544 - -- - 5 1,505 - 41,461 - -- - - - - 310,000 - -- - - - 18,412 18,412 - -

3,882,248$ 7,987,390$ 535,173$ 144,949$ 1,505,032$ 126,801,562$ 1,650,739$ 28,806,265$

17,463$ -$ 5,444$ 31,284$ 223,392$ 6,680,528$ 3,850$ -$- 4,200,221 - - - 12,022,930 769,295 -- - 46,943 - 391,014 11,419,349 - -

950,000 - 7,500 2,000 668,206 8,556,065 918,964 -- - - 3,500 127,960 459,693 - -

967,463 4,200,221 59,887 36,784 1,410,572 39,138,565 1,692,109 -

466 - - - - 2,476,923 - -- - - - - - (41,370) 28,806,265- - - - - 310,000 - -- 2,650,799 - - - 2,650,799 - -

2,914,319 1,136,370 475,286 108,165 94,460 82,225,275 - -2,914,785 3,787,169 475,286 108,165 94,460 87,662,997 (41,370) 28,806,2653,882,248$ 7,987,390$ 535,173$ 144,949$ 1,505,032$ 126,801,562$ 1,650,739$ 28,806,265$

(continued)

Special Revenue Funds Debt Service Funds

93

SEOPW CRA SEOPWOther Special Total Community

Obligation Debt Redevelopment SanitaryBonds Service Agency Public Safety Sewers

AssetsPooled Cash, Cash Equivalents and Investments 134,231$ 9,524,993$ -$ 12,910,701$ 23,106,273$Restricted Cash and Investments 648,038 20,063,541 - 264,159 -Receivables

(Net of Allowances for Uncollectibles):Accounts - - - - -Loans Receivable - - - - -Taxes - 1,650,739 - - -Due From Other Governments - - - 11,527 -

Accrued Interest - - - - 12,989Prepaids - - - - -Other Assets - - - - -

Total Assets 782,269$ 31,239,273$ -$ 13,186,387$ 23,119,262$


Accounts Payable and Accrued Liabilities -$ 3,850$ -$ 1,444,615$ -$Due to Other Funds - 769,295 - - -Due to Other Governments - - - - -Deferred Revenue or Unearned Revenue - 918,964 - 11,473,818 -Deposits - - - - -

Total Liabilities - 1,692,109 - 12,918,433 -

Fund Balances (Deficits):Reserved for:

Encumbrances - - - 148,077 -Debt Service 782,269 29,547,164 - - -Prepaid Items - - - - -Future Settlements - - - - -

Unreserved, Undesignated - - - 119,877 23,119,262Total Fund Balances (Deficits) 782,269 29,547,164 - 267,954 23,119,262

Total Liabilities and Fund Balances (Deficits) 782,269$ 31,239,273$ -$ 13,186,387$ 23,119,262$



Debt Service Funds Capital Projects Funds

94

TotalTotal Non-Major

Storm Solid Parks & Disaster Mass Capital GovernmentalSewers Waste Recreation Recovery Transit Projects Funds

8,228,188$ 1,024,378$ 25,596,914$ -$ 5,052,989$ 75,919,443$ 188,098,273$- - - - - 264,159 24,511,097

- 1,705 - - - 1,705 4,847,822- - - - - - 1,794- - - - - - 1,650,739

1,342,363 - 1,822,843 295,640 - 3,472,373 18,218,917- - - - - 12,989 54,450- - - - - - 310,000- - - - - - 18,412

9,570,551$ 1,026,083$ 27,419,757$ 295,640$ 5,052,989$ 79,670,669$ 237,711,504$

1,316,845$ 22,841$ 1,802,679$ 83,748$ 3,527$ 4,674,255$ 11,358,633$- - - 971,268 - 971,268 13,763,493- - - - - - 11,419,349

1,200,928 75,000 1,786,753 294,755 - 14,831,254 24,306,283- - - - - - 459,693

2,517,773 97,841 3,589,432 1,349,771 3,527 20,476,777 61,307,451

3,626,221 - 9,576,909 - - 13,351,207 15,828,130- - - - - - 29,547,164- - - - - - 310,000- - - - - - 2,650,799

3,426,557 928,242 14,253,416 (1,054,131) 5,049,462 45,842,685 128,067,9607,052,778 928,242 23,830,325 (1,054,131) 5,049,462 59,193,892 176,404,0539,570,551$ 1,026,083$ 27,419,757$ 295,640$ 5,052,989$ 79,670,669$ 237,711,504$

Capital Projects Funds

95

ChoiceHomeless Community Housing

Omni CRA Midtown CRA SEOPW CRA Program Development VouchersRevenues

Property Taxes 8,238,547$ 2,392,877$ 6,270,444$ -$ -$ -$ Franchise Fees and Other Taxes - - - - - -Licenses and Permits - - - - - -Fines and Forfeitures - - - - - -Intergovernmental Revenues 5,864,942 1,508,569 4,413,739 913,926 34,118,206 2,783,886Charges for Services - - 181,388 - 18,223 -Interest 78,434 - 53,020 - 3,787 -Other - - 964,211 500 33,041 3,077

Total Revenues 14,181,923 3,901,446 11,882,802 914,426 34,173,257 2,786,963


General Government - - - - - -Planning and Development - - - - - -Community Development - - - 1,096,550 34,201,695 1,764,177Community Redevelopment Areas 14,179,045 3,867,462 10,579,051 - - -Public Works - - - - - -Public Safety - - - - - -Public Facilities - - - - - -Parks and Recreation - - - - - -

Debt Service: - -Principal - - - - 193,000 -Interest and Other Charges - - - - - -

Capital Outlay - - - - - -Total Expenditures 14,179,045 3,867,462 10,579,051 1,096,550 34,394,695 1,764,177

Excess (Deficiency) of RevenuesOver Expenditures 2,878 33,984 1,303,751 (182,124) (221,438) 1,022,786

Other Financing Sources (Uses)Transfers In - - 698,703 196,824 578,378 -Transfers Out (716,099) (33,984) (259,022) - (1,033,912) (215,878)Issuance on Debt - - - - - -

Total Other Financing Sources (Uses) (716,099) (33,984) 439,681 196,824 (455,534) (215,878)

Net Changes in Fund Balances (713,221) - 1,743,432 14,700 (676,972) 806,908

Fund Balances, (Deficit) - Beginning 30,482,017 - 16,928,773 (106,113) 10,960,702 338,522

Fund Balances (Deficit) - Ending 29,768,796$ -$ 18,672,205$ (91,413)$ 10,283,730$ 1,145,430$

City of Miami, FloridaCombining Statement of Revenues, Expenditures, and Changes In Fund Balances


Non-major Governmental FundsFor The Year Ended September 30, 2010

96

EconomicDevelopment Parks & Law

Convention & Planning Net Recreation Police EnforcementSHIP Center Services Offices Services Services Trust

-$ -$ -$ -$ -$ -$ -$ - - - - - - -- - 40,750 - 157,513 - -- 27,138 - - - - 882,314

1,996,666 3,002,327 216,558 - 1,312,019 5,997,942 -- 6,888,615 30,060 184,521 1,145,617 709,090 -

1,532 2 - 3,972 299 18,389 3,857117,274 2,606 5,000 672 541,605 300 -

2,115,472 9,920,688 292,368 189,165 3,157,053 6,725,721 886,171

- - - 336,201 - - -- - 365,339 - - - -

2,095,355 - - - - - -- - - - - - -- - - - - - -- - - - - 6,832,128 1,258,913- 3,624,639 - - - - -- - - - 2,182,409 - -

- - - - - - -- - - - - - -- - - - - - -

2,095,355 3,624,639 365,339 336,201 2,182,409 6,832,128 1,258,913

20,117 6,296,049 (72,971) (147,036) 974,644 (106,407) (372,742)

- 2,680,599 3,224,186 1,248,687 - 235,106 -- (12,185,961) - (10,000) - - -- - - - - - -- (9,505,362) 3,224,186 1,238,687 - 235,106 -

20,117 (3,209,313) 3,151,215 1,091,651 974,644 128,699 (372,742)

329,264 2,582,214 5,050,188 266,503 1,583,456 6,704,249 3,495,960

349,381$ (627,099)$ 8,201,403$ 1,358,154$ 2,558,100$ 6,832,948$ 3,123,218$

(continued)


97

Local General DepartmentalPublic Works City Clerk Option Emergency Special Improvement

Services Services Gas Tax Services Revenue InitiativesRevenues

Property Taxes -$ -$ -$ -$ -$ -$ Franchise Fees and Other Taxes - - 6,489,695 - 2,200 -Licenses and Permits - - - - - -Fines and Forfeitures - - - - - -Intergovernmental Revenues - - - 9,387,640 840,110 1,080,005Charges for Services 7,450 101,285 - - - -Interest 2,285 - - - - -Other - 1,082 - - - -

Total Revenues 9,735 102,367 6,489,695 9,387,640 842,310 1,080,005


General Government - 149,316 - - 1,982,711 1,616,828Planning and Development - - - - - -Community Development - - - - - -Community Redevelopment Areas - - - - - -Public Works 31,349 - - - - -Public Safety - - - 2,593,170 - -Public Facilities - - - - - -Parks and Recreation - - - - - -

Debt Service: -Principal - - - - - -Interest and Other Charges - - - - - -

Capital Outlay - - - - - -Total Expenditures 31,349 149,316 - 2,593,170 1,982,711 1,616,828

Excess (Deficiency) of RevenuesOver Expenditures (21,614) (46,949) 6,489,695 6,794,470 (1,140,401) (536,823)

Other Financing Sources (Uses)Transfers In 96,659 35,000 - - 7,190,436 557,908Transfers Out - - (6,352,057) - (7,065,051) (275,000)Issuance on Debt - - - - - -

Total Other Financing Sources (Uses) 96,659 35,000 (6,352,057) - 125,385 282,908

Net Changes in Fund Balances 75,045 (11,949) 137,638 6,794,470 (1,015,016) (253,915)

Fund Balances - Beginning 2,146,652 486,860 - (14,896,430) 3,774,870 1,470,054

Fund Balances - Ending 2,221,697$ 474,911$ 137,638$ (8,101,960)$ 2,759,854$ 1,216,139$




98

LibertyPublic City Gusman Total General Other Special

Transportation Services Revitalization Virginia Key and Special Obligation Obligation& Transit Tax Trust Beach Trust Olympia Revenue Bonds Bonds

-$ -$ -$ -$ -$ 16,901,868$ 22,662,573$ -$ - 61,966,455 - - - 68,458,350 - -- - - - - 198,263 - -- - - - - 909,452 - -

11,831,575 - 10,527 - 789,825 86,068,462 - -- - - 158,160 421,020 9,845,429 - -- - 385 67 - 166,029 20 -- - 122,922 87,370 701,607 2,581,267 - 30,000

11,831,575 61,966,455 133,834 245,597 1,912,452 185,129,120 22,662,593 30,000

351,785 - - - - 4,436,841 - -- - - - - 365,339 - -- - - - - 39,157,777 - -- - 458,579 - - 29,084,137 - -- - - - - 31,349 - -- - - - - 10,684,211 - -- - - - 1,182,434 4,807,073 - -- - - 677,103 - 2,859,512 - -

-- - - - - 193,000 10,309,047 16,559,228- - - - - - 13,891,279 24,026,779- - - - 684,863 684,863 - -

351,785 - 458,579 677,103 1,867,297 92,304,102 24,200,326 40,586,007

11,479,790 61,966,455 (324,745) (431,506) 45,155 92,825,018 (1,537,733) (40,556,007)

- 3,147,742 - - - 19,890,228 - 39,013,595(8,461,599) (65,112,629) - - - (101,721,192) - (3,147,742)

- - - - - - 19,950,816(8,461,599) (61,964,887) - - - (81,830,964) - 55,816,669

3,018,191 1,568 (324,745) (431,506) 45,155 10,994,054 (1,537,733) 15,260,662

(103,406) 3,785,601 800,031 539,671 49,305 76,668,943 1,496,363 13,545,603

2,914,785$ 3,787,169$ 475,286$ 108,165$ 94,460$ 87,662,997$ (41,370)$ 28,806,265$

(continued)

Special Revenue Funds Debt Service Funds

99

SEOPW CRA SEOPWOther Special Total Community

Obligation Debt Redevelopment SanitaryBonds Service Agency Public Safety Sewers

RevenuesProperty Taxes -$ 22,662,573$ -$ -$ -$ Franchise Fees and Other Taxes - - - - -Licenses and Permits - - - - -Fines and Forfeitures - - - - -Intergovernmental Revenues 300,000 300,000 - - -Charges for Services - - 6,237 293,907 -Interest - 20 - - 48,925Other - 30,000 - - -

Total Revenues 300,000 22,992,593 6,237 293,907 48,925


General Government - - - - 4,448,534Planning and Development - - - - -Community Development - - - - -Community Redevelopment Areas - - - - -Public Works - - - - -Public Safety - - - 189,931 -Public Facilities - - - - -Parks and Recreation - - - - -

Debt Service: -Principal 200,000 27,068,275 - - -Interest and Other Charges 146,625 38,064,683 - - -

Capital Outlay - - - 11,182,455 -Total Expenditures 346,625 65,132,958 - 11,372,386 4,448,534

Excess (Deficiency) of RevenuesOver Expenditures (46,625) (42,140,365) 6,237 (11,078,479) (4,399,609)

Other Financing Sources (Uses)Transfers In 46,625 39,060,220 - 2,804,488 -Transfers Out - (3,147,742) (3,146,203) - -Issuance on Debt - 19,950,816 - - -

Total Other Financing Sources (Uses) 46,625 55,863,294 (3,146,203) 2,804,488 -

Net Changes in Fund Balances - 13,722,929 (3,139,966) (8,273,991) (4,399,609)

Fund Balances - Beginning 782,269 15,824,235 3,139,966 8,541,945 27,518,871

Fund Balances - Ending 782,269$ 29,547,164$ -$ 267,954$ 23,119,262$

Debt Service Funds



Capital Projects Funds

100

TotalTotal Non-Major

Storm Solid Parks & Disaster Mass Capital GovernmentalSewers Waste Recreation Recovery Transit Projects Funds

-$ -$ -$ -$ -$ -$ 39,564,441$ 182,961 - - - - 182,961 68,641,311

- - - - - - 198,263- - - - - - 909,452

2,036,972 - 318,736 886 - 2,356,594 88,725,056- - 83,677 - - 383,821 10,229,250- - - - - 48,925 214,974- 1,191 - 762 - 1,953 2,613,220

2,219,933 1,191 402,413 1,648 - 2,974,254 211,095,967

36,112 - - - 237,327 4,721,973 9,158,814- - - - - - 365,339- - - - - - 39,157,777- - - - - - 29,084,137- 29,765 - - - 29,765 61,114- - - - - 189,931 10,874,142- - - - - - 4,807,073- - 929,295 - - 929,295 3,788,807

-- - - - - - 27,261,275- - - - - - 38,064,683

3,777,670 1,708,945 13,897,819 375,662 - 30,942,551 31,627,4143,813,782 1,738,710 14,827,114 375,662 237,327 36,813,515 194,250,575

(1,593,849) (1,737,519) (14,424,701) (374,014) (237,327) (33,839,261) 16,845,392

3,654,835 2,129,055 9,170,898 787 - 17,760,063 76,710,511- - - - - (3,146,203) (108,015,137)- - - - - - 19,950,816

3,654,835 2,129,055 9,170,898 787 - 14,613,860 (11,353,810)

2,060,986 391,536 (5,253,803) (373,227) (237,327) (19,225,401) 5,491,582

4,991,792 536,706 29,084,128 (680,904) 5,286,789 78,419,293 170,912,471

7,052,778$ 928,242$ 23,830,325$ (1,054,131)$ 5,049,462$ 59,193,892$ 176,404,053$

101


Budget and Actual - OMNI CRAFor The Year Ended September 30, 2010



Property Taxes 14,522,904$ 13,433,954$ 14,103,489$ 669,535$ Interest - - 78,434 78,434

Total Revenues 14,522,904 13,433,954 14,181,923 747,969

Expenditures:Current Operating:Community Redevelopment Areas 46,933,267 43,199,571 14,179,045 29,020,526


Excess (Deficiency) of Revenues Over Expenditures (32,410,363) (29,765,617) 2,878 29,768,495

Other Financing Uses:Transfers Out (683,510) (716,400) (716,099) 301Total Other Financing Uses (683,510) (716,400) (716,099) 301

Net Change in Fund Balance (33,093,873) (30,482,017) (713,221) 29,768,796Fund Balance (Deficit) - Beginning of Year 33,093,873 30,482,017 30,482,017 -Fund Balance - End of Year -$ -$ 29,768,796$ 29,768,796$

102


Budget and Actual - Midtown CRAFor The Year Ended September 30, 2010



Property Taxes 3,421,268$ 3,901,446$ 3,901,446$ -$ Total Revenues 3,421,268 3,901,446 3,901,446 -

Expenditures:Current Operating:Community Redevelopment Areas 3,380,055 3,867,462 3,867,462 -

Total Expenditures 3,380,055 3,867,462 3,867,462 -

Excess of Revenues Over Expenditures 41,213 33,984 33,984 -

Other Financing Uses:Transfers Out (41,213) (33,984) (33,984) - Total Other Financing Uses (41,213) (33,984) (33,984) -

Net Change in Fund Balance - - - - Fund Balance - Beginning of Year - - - - Fund Balance - End of Year -$ -$ -$ -$

103


Budget and Actual - SEOPW CRAFor The Year Ended September 30, 2010



Property Taxes 7,837,281$ 11,048,630$ 6,270,444$ (4,778,186)$ Intergovernmental Revenues 716,400 716,400 4,413,739 3,697,339Charges for Services - - 181,388 181,388Interest - - 53,020 53,020Other - 611,846 964,211 352,365

Total Revenues 8,553,681 12,376,876 11,882,802 (494,074)

Expenditures:Current Operating:General Government 1,643,891 6,915,208 - 6,915,208Community Redevelopment Areas 24,378,737 21,600,610 10,579,051 11,021,559


Excess (Deficiency) of Revenues Over Expenditures (17,468,947) (16,138,942) 1,303,751 17,442,693

Other Financing Sources (Uses):Transfers In - 5,271,317 698,703 (4,572,614)Transfers Out (50,000) (5,621,317) (259,022) 5,362,295Total Other Financing Sources (Uses) (50,000) (350,000) 439,681 789,681

Net Change in Fund Balance (17,518,947) (16,488,942) 1,743,432 18,232,374Fund Balance - Beginning of Year - - 16,928,773 16,928,773Fund Balance - End of Year (17,518,947)$ (16,488,942)$ 18,672,205$ 35,161,147$

104


Budget and Actual - Homeless ProgramFor The Year Ended September 30, 2010



Intergovernmental Revenues -$ 913,926$ 913,926$ -$ Other 218,586 500 500 -

Total Revenues 218,586 914,426 914,426 -

Expenditures:Current Operating:Community Development 415,410 1,111,250 1,096,550 14,700

Total Expenditures 415,410 1,111,250 1,096,550 14,700

Excess (Deficiency) of Revenues Over Expenditures (196,824) (196,824) (182,124) 14,700

Other Financing Sources:Transfers In 196,824 196,824 196,824 -Total Other Financing Sources 196,824 196,824 196,824 -

Net Change in Fund Balance - - 14,700 14,700Fund Balance (Deficit) - Beginning of Year - - (106,113) (106,113)Fund Balance (Deficit) - End of Year -$ -$ (91,413)$ (91,413)$

105


Budget and Actual - Community Development FundFor The Year Ended September 30, 2010



Intergovernmental Revenues 29,284,177$ 34,117,192$ 34,118,206$ 1,014$ Charges for Services - 18,223 18,223 -Interest - 3,787 3,787 -Other - 6,694,149 33,041 (6,661,108)

Total Revenues 29,284,177 40,833,351 34,173,257 (6,660,094)

Expenditures:Current Operating:Community Development 27,765,463 40,184,817 34,201,695 5,983,122Debt Service:Principal 193,000 193,000 193,000 -


Excess (Deficiency) of Revenues Over Expenditures 1,325,714 455,534 (221,438) (676,972)

Other Financing Sources (Uses):Transfers In - 578,378 578,378 -Transfers Out (1,325,714) (1,033,912) (1,033,912) -Total Other Financing Sources (Uses) (1,325,714) (455,534) (455,534) -

Net Change in Fund Balance - - (676,972) (676,972)Fund Balance - Beginning of Year - - 10,960,702 10,960,702Fund Balance - End of Year -$ -$ 10,283,730$ 10,283,730$

106


Budget and Actual - Choice Housing Vouchers For The Year Ended September 30, 2010



Intergovernmental Revenues 1,915,677$ 2,783,886$ 2,783,886$ -$ Other - 3,077 3,077 -

Total Revenues 1,915,677 2,786,963 2,786,963 -

Expenditures:Current Operating:Community Development 1,915,677 2,571,085 1,764,177 806,908

Total Expenditures 1,915,677 2,571,085 1,764,177 806,908

Excess of Revenues Over Expenditures - 215,878 1,022,786 806,908

Other Financing Sources (Uses):Transfers Out - (215,878) (215,878) -Total Other Financing Sources (Uses) - (215,878) (215,878) -

Net Change in Fund Balance - - 806,908 806,908Fund Balance - Beginning of Year - - 338,522 338,522Fund Balance - End of Year -$ -$ 1,145,430$ 1,145,430$

107


Budget and Actual - SHIPFor The Year Ended September 30, 2010



Intergovernmental Revenues 202,255$ 1,996,666$ 1,996,666$ -$ Interest - 1,532 1,532 -Other - 117,274 117,274 -

Total Revenues 202,255 2,115,472 2,115,472 -

Expenditures:Current Operating:Community Development 202,255 2,115,472 2,095,355 20,117

Total Expenditures 202,255 2,115,472 2,095,355 20,117

Excess (Deficiency) of Revenues Over Expenditures - - 20,117 20,117

Net Change in Fund Balance - - 20,117 20,117Fund Balance - Beginning of Year - - 329,264 329,264Fund Balance - End of Year -$ -$ 349,381$ 349,381$

108


Budget and Actual - Convention CenterFor The Year Ended September 30, 2010



Fines and Forfeitures -$ 27,138$ 27,138$ -$ Intergovernmental Revenues - 3,002,327 3,002,327 -Charges for Services - 6,888,615 6,888,615 -Interest - 2 2 -Other 11,048,423 3,211,919 2,606 (3,209,313)

Total Revenues 11,048,423 13,130,001 9,920,688 (3,209,313)

Expenditures:Current Operating:Public Facilities 11,048,423 3,624,639 3,624,639 -


Excess (Deficiency) of Revenues Over Expenditures - 9,505,362 6,296,049 (3,209,313)

Other Financing Sources (Uses):Transfers In - 2,680,599 2,680,599 -Transfers Out - (12,185,961) (12,185,961) -Total Other Financing Sources (Uses) - (9,505,362) (9,505,362) -

Net Change in Fund Balance - - (3,209,313) (3,209,313)Fund Balance - Beginning of Year - - 2,582,214 2,582,214Fund Balance (Deficit) - End of Year -$ -$ (627,099)$ (627,099)$

109

City of Miami, FloridaSchedule of Revenues, Expenditures and Changes In Fund BalanceBudget and Actual - Economic Development & Planning Services

For The Year Ended September 30, 2010



Licenses and Permits -$ 40,750$ 40,750$ -$ Intergovernmental Revenues - 216,558 216,558 -Charges for Services - 30,060 30,060 -Other 3,435,912 5,000 5,000 -

Total Revenues 3,435,912 292,368 292,368 -

Expenditures:Current Operating:Planning and Development 3,509,912 3,516,554 365,339 3,151,215

Total Expenditures 3,509,912 3,516,554 365,339 3,151,215

Excess (Deficiency) of Revenues Over Expenditures (74,000) (3,224,186) (72,971) 3,151,215

Other Financing Sources:Transfers In 74,000 3,224,186 3,224,186 -Total Other Financing Sources 74,000 3,224,186 3,224,186 -

Net Change in Fund Balance - - 3,151,215 3,151,215Fund Balance - Beginning of Year - - 5,050,188 5,050,188Fund Balance - End of Year -$ -$ 8,201,403$ 8,201,403$

110


Budget and Actual - NET Offices FundFor The Year Ended September 30, 2010



Charges for Services 60,000$ 184,521$ 184,521$ -$ Interest - 3,972 3,972 -Other 752,015 672 672 -

Total Revenues 812,015 189,165 189,165 -

Expenditures:Current Operating:General Government 812,015 1,427,852 336,201 1,091,651

Total Expenditures 812,015 1,427,852 336,201 1,091,651

Excess (Deficiency) of Revenues Over Expenditures - (1,238,687) (147,036) 1,091,651

Other Financing Sources (Uses):Transfers In - 1,248,687 1,248,687 -Transfers Out - (10,000) (10,000) -Total Other Financing Sources (Uses) - 1,238,687 1,238,687 -

Net Change in Fund Balance - - 1,091,651 1,091,651Fund Balance - Beginning of Year - - 266,503 266,503Fund Balance - End of Year -$ -$ 1,358,154$ 1,358,154$

111


Budget and Actual - Parks & Recreation Services FundFor The Year Ended September 30, 2010


Original Final Actual Amounts Positive (Negative)Revenue:

Licenses and Permits -$ 157,513$ 157,513$ -$ Intergovernmental Revenues - 1,312,019 1,312,019 -Charges for Services - 1,145,617 1,145,617 -Interest - 299 299 -Other 4,125,061 541,605 541,605 -

Total Revenues 4,125,061 3,157,053 3,157,053 -

Expenditures:Current Operating:Parks and Recreation 4,125,061 3,157,053 2,182,409 974,644



Net Change in Fund Balance - - 974,644 974,644Fund Balance - Beginning of Year - - 1,583,456 1,583,456Fund Balance - End of Year -$ -$ 2,558,100$ 2,558,100$

112


Budget and Actual - Police Services FundFor The Year Ended September 30, 2010



Intergovernmental Revenues 905,883$ 5,997,942$ 5,997,942$ -$ Charges for Services - 709,090 709,090 -Interest - 18,389 18,389 -Other 13,464,666 500,415 300 (500,115)

Total Revenues 14,370,549 7,225,836 6,725,721 (500,115)

Expenditures:Current Operating:Public Safety 13,899,487 7,460,942 6,832,128 628,814Capital Outlay 471,062 - - -


Excess (Deficiency) of Revenues Over Expenditures - (235,106) (106,407) 128,699

Other Financing Sources:Transfers In - 235,106 235,106 -Total Other Financing Sources - 235,106 235,106 -


113


Budget and Actual - Law Enforcement Trust FundFor The Year Ended September 30, 2010



Fines and Forfeitures -$ 882,314$ 882,314$ -$ Interest - 3,857 3,857 -Other 2,210,295 372,742 - (372,742)

Total Revenues 2,210,295 1,258,913 886,171 (372,742)

Expenditures:Current Operating:Public Safety 1,810,295 1,258,913 1,258,913 -Capital Outlay 400,000 - - -


Excess (Deficiency) of Revenues Over Expenditures - - (372,742) (372,742)


114


Budget and Actual - Public Works Services FundFor The Year Ended September 30, 2010



Charges for Services -$ 7,450$ 7,450$ -$ Interest - 2,285 2,285 -Other 1,195,266 - - -

Total Revenues 1,195,266 9,735 9,735 -

Expenditures:Current Operating:Public Works 1,195,266 106,394 31,349 75,045

Total Expenditures 1,195,266 106,394 31,349 75,045

Excess (Deficiency) of Revenues Over Expenditures - (96,659) (21,614) 75,045

Other Financing Sources:Transfers In - 96,659 96,659 -Total Other Financing Sources - 96,659 96,659 -


115


Budget and Actual - City Clerk Services FundFor The Year Ended September 30, 2010



Charges for Services -$ 101,285$ 101,285$ -$ Other 245,621 13,031 1,082 (11,949)

Total Revenues 245,621 114,316 102,367 (11,949)

Expenditures:Current Operating:General Government 280,621 149,316 149,316 -

Total Expenditures 280,621 149,316 149,316 -

Excess (Deficiency) of Revenues Over Expenditures (35,000) (35,000) (46,949) (11,949)

Other Financing Sources:Transfers In 35,000 35,000 35,000 -Total Other Financing Sources 35,000 35,000 35,000 -

Net Change in Fund Balance - - (11,949) (11,949)Fund Balance - Beginning of Year - - 486,860 486,860Fund Balance - End of Year -$ -$ 474,911$ 474,911$

116


Budget and Actual - Local Option Gas TaxFor The Year Ended September 30, 2010



Franchise Fees and Other Taxes 6,209,330$ 6,489,695$ 6,489,695$ -$ Total Revenues 6,209,330 6,489,695 6,489,695 -

Expenditures:Current OperatingGeneral Government - 137,638 - 137,638

Total Expenditures - 137,638 - 137,638

Excess (Deficiency) of Revenues Over Expenditures 6,209,330 6,352,057 6,489,695 137,638

Other Financing Sources (Uses):Transfers Out (6,209,330) (6,352,057) (6,352,057) -Total Other Financing Sources (Uses) (6,209,330) (6,352,057) (6,352,057) -

Net Change in Fund Balance - - 137,638 137,638Fund Balance - Beginning of Year - - - -Fund Balance - End of Year -$ -$ 137,638$ 137,638$

117


Budget and Actual - Emergency ServicesFor The Year Ended September 30, 2010



Intergovernmental Revenues -$ -$ 9,387,640$ 9,387,640$ Total Revenues - - 9,387,640 9,387,640

Expenditures:Current Operating:Public Safety - - 2,593,170 (2,593,170)

Total Expenditures - - 2,593,170 (2,593,170)

Excess of Revenues Over Expenditures - - 6,794,470 6,794,470

Net Change in Fund Balance - - 6,794,470 6,794,470Fund Balance - Beginning of Year - - (14,896,430) (14,896,430)Fund Balance - End of Year -$ -$ (8,101,960)$ (8,101,960)$

118


Budget and Actual - General Special RevenueFor The Year Ended September 30, 2010



Franchise Fees and Other Taxes -$ 2,200$ 2,200$ -$ Intergovernmental Revenues - 840,110 840,110 -Other 2,483,295 701,923 - (701,923)

Total Revenues 2,483,295 1,544,233 842,310 (701,923)

Expenditures:Current Operating:General Government 2,483,295 1,738,564 1,982,711 (244,147)

Total Expenditures 2,483,295 1,738,564 1,982,711 (244,147)

Excess (Deficiency) of Revenues Over Expenditures - (194,331) (1,140,401) (946,070)

Other Financing Sources (Uses):Transfers In 5,225,157 7,259,382 7,190,436 (68,946)Transfers Out (5,225,157) (7,065,051) (7,065,051) -Total Other Financing Sources (Uses) - 194,331 125,385 (68,946)

Net Change in Fund Balance - - (1,015,016) (1,015,016)Fund Balance - Beginning of Year - - 3,774,870 3,774,870Fund Balance - End of Year -$ -$ 2,759,854$ 2,759,854$

119

City of Miami, FloridaSchedule of Revenues, Expenditures and Changes In Fund BalanceBudget and Actual - Departmental Improvement Initiatives Fund

For The Year Ended September 30, 2010



Intergovernmental Revenues -$ 1,080,005$ 1,080,005$ -$ Other 2,493,740 205,758 - (205,758)

Total Revenues 2,493,740 1,285,763 1,080,005 (205,758)

Expenditures:Current Operating:General Government 2,493,740 1,568,671 1,616,828 (48,157)

Total Expenditures 2,493,740 1,568,671 1,616,828 (48,157)

Excess (Deficiency) of Revenues Over Expenditures - (282,908) (536,823) (253,915)

Other Financing Sources (Uses):Transfers In - 557,908 557,908 -Transfers Out - (275,000) (275,000) -Total Other Financing Sources (Uses) - 282,908 282,908 -


120


Budget and Actual - Transportation & Transit FundFor The Year Ended September 30, 2010



Intergovernmental Revenues 11,282,133$ 11,831,575$ 11,831,575$ -$ Total Revenues 11,282,133 11,831,575 11,831,575 -

Expenditures:Current Operating:General Government 564,107 3,369,976 351,785 3,018,191

Total Expenditures 564,107 3,369,976 351,785 3,018,191

Excess (Deficiency) of Revenues Over Expenditures 10,718,026 8,461,599 11,479,790 3,018,191

Other Financing Sources (Uses):Transfers Out (10,718,026) (8,461,599) (8,461,599) -Total Other Financing Sources (Uses) (10,718,026) (8,461,599) (8,461,599) -

Net Change in Fund Balance - - 3,018,191 3,018,191Fund Balance (Deficit) - Beginning of Year - - (103,406) (103,406)Fund Balance - End of Year -$ -$ 2,914,785$ 2,914,785$

121


Budget and Actual - Public Services Tax FundFor The Year Ended September 30, 2010



Franchise and Other Taxes 62,366,787$ 61,966,455$ 61,966,455$ -$ Total Revenues 62,366,787 61,966,455 61,966,455 -

ExpendituresCurrent Operating:General Government - 1,568 - 1,568

Total Expenditures - 1,568 - 1,568

Excess (Deficiency) of Revenues Over Expenditures 62,366,787 61,964,887 61,966,455 1,568

Other Financing Sources (Uses):Transfers In - 1,539 3,147,742 3,146,203Transfers Out (62,366,787) (61,966,426) (65,112,629) (3,146,203)Total Other Financing Sources (Uses) (62,366,787) (61,964,887) (61,964,887) -


122


Budget and Actual - Liberty City Revitalization TrustFor The Year Ended September 30, 2010



Intergovernmental Revenues -$ -$ 10,527$ 10,527$ Interest - - 385 385Other - - 122,922 122,922

Total Revenues - - 133,834 133,834

Expenditures:Current Operating:Community Redevelopment Areas 320,000 320,000 458,579 (138,579)

Total Expenditures 320,000 320,000 458,579 (138,579)


Other Financing Sources:Transfers In 320,000 320,000 - (320,000)Total Other Financing Sources 320,000 320,000 - (320,000)


123


Budget and Actual - Virginia Key Beach TrustFor The Year Ended September 30, 2010



Charges for Services -$ -$ 158,160$ 158,160$Interest - - 67 67 Other 109,000 109,000 87,370 (21,630)

Total Revenues 109,000 109,000 245,597 136,597

Expenditures:Current Operating:Parks and Recreation 433,364 433,364 677,103 (243,739)

Total Expenditures 433,364 433,364 677,103 (243,739)


Other Financing Sources:Transfers In 324,364 324,364 - (324,364)Total Other Financing Sources 324,364 324,364 - (324,364)


124


Budget and Actual - Gusman and Olympia FundFor The Year Ended September 30, 2010



Intergovernmental Revenues 832,625$ 832,625$ 789,825$ (42,800)$ Charges for Services 505,000 505,000 421,020 (83,980)Other 616,495 616,495 701,607 85,112

Total Revenues 1,954,120 1,954,120 1,912,452 (41,668)

Expenditures:Current Operating:Public Facilities 1,228,495 1,228,495 1,182,434 46,061Capital Outlay 725,625 725,625 684,863 40,762



Net Change in Fund Balance - - 45,155 45,155Fund Balance - Beginning of Year - - 49,305 49,305Fund Balance - End of Year -$ -$ 94,460$ 94,460$

125


Budget and Actual - General Obligation Bonds FundFor The Year Ended September 30, 2010



Property Taxes 23,273,978$ 22,662,573$ 22,662,573$ -$ Interest - 20 20 -Other 1,000,000 1,537,733 - (1,537,733)Total Revenues 24,273,978 24,200,326 22,662,593 (1,537,733)

Expenditures:General Government - 25,803 - 25,803

Debt Service:Principal 10,309,048 10,309,047 10,309,047 -Interest and Other Charges 13,964,930 13,865,476 13,891,279 (25,803)Total Expenditures 24,273,978 24,200,326 24,200,326 -

Excess (Deficiency) of Revenues Over Expenditures - - (1,537,733) (1,537,733)

Net Change in Fund Balance - - (1,537,733) (1,537,733)Fund Balance - Beginning of Year - - 1,496,363 1,496,363Fund Balance - End of Year -$ -$ (41,370)$ (41,370)$

126


Budget and Actual - Special Obligation Bonds FundFor The Year Ended September 30, 2010



Interest -$ -$ -$ -$ Other - 179,830 30,000 (149,830)Total Revenues - 179,830 30,000 (149,830)

Expenditures:General Government - 20,371,562 - 20,371,562

Debt Service:Principal 11,684,631 16,559,228 16,559,228 - Interest and Other Charges 21,059,789 19,065,709 24,026,779 (4,961,070)Total Expenditures 32,744,420 55,996,499 40,586,007 15,410,492

Excess (Deficiency) of Revenues Over Expenditures (32,744,420) (55,816,669) (40,556,007) 15,260,662

Other Financing Sources (Uses):Transfers In 32,744,420 39,013,595 39,013,595 - Transfers Out - (3,147,742) (3,147,742) - Proceeds Received From Long-Term Debt - 19,950,816 19,950,816 - Total Other Financing Sources (Uses) 32,744,420 55,816,669 55,816,669 -

Net Change in Fund Balance - - 15,260,662 15,260,662Fund Balance - Beginning of Year - - 13,545,603 13,545,603Fund Balance - End of Year -$ -$ 28,806,265$ 28,806,265$

127


Budget and Actual - SEOPW CRA Other Special Obligation Bonds FundFor The Year Ended September 30, 2010



Intergovernmental Revenues 302,475$ 300,000$ 300,000$ -$ Total Revenues 302,475 300,000 300,000 -

Expenditures:Debt Service:

Principal 200,000 200,000 200,000 - Interest and Other Charges 149,100 146,625 146,625 -

Total Expenditures 349,100 346,625 346,625 -

Excess (Deficiency) of Revenues Over Expenditures (46,625) (46,625) (46,625) -

Other Financing Sources:Transfers In 46,625 46,625 46,625 - Total Other Financing Sources: 46,625 46,625 46,625 -

Net Change in Fund Balance - - - - Fund Balance - Beginning of Year - - 782,269 782,269Fund Balance - End of Year -$ -$ 782,269$ 782,269$

128

FIDUCIARY FUNDS

Fiduciary Funds are used to account for assets held by the City in a trustee capacity.

Firefighters and Police Officers (FIPO) – This Pension Trust Fund is used to account for the accumulation of resources to be used for retirement benefits to Police and Firefighters. Resources are contributed by employees at rates fixed by law and by the City at amounts determined by annual actuarial valuations.

General Employees and Sanitation Employees (GESE) – These Pension Trust Funds are used to account for the three separate GESE Plans (GESE Members, Excess Plan and Staff Plan). The funds are used to account for the accumulation of resources to be used for retirement benefits to City employees, other than police and firefighters. Resources are contributed by employees at rates fixed by law and by the City at amounts determined by annual actuarial valuations.

City of Miami Elected Officers’ Retirement Trust (EORT) – Funds are used to account for the accumulation of resources to be used for retirement benefits to elected officials. Resources are contributed by the City in amounts determined by actuarial valuations.

129

City of Miami, FloridaCombining Statement of Fiduciary Net Assets

Fiduciary FundsSeptember 30, 2010

Employee Retirement Funds TotalsGeneral and General and General and Elected Officers' Employee

Firefighters and Sanitation Employees Sanitation Employees Sanitation Employees Retirement Trust RetirementPolice (FIPO) (GESE) (GESE Excess Plan) (GESE Staff Plan) (EORT) Funds

AssetsCash and Short-Term Investments 43,708,711$ 379,168$ 36,773$ 48,175$ -$ 44,172,827$ Accounts Receivable 13,973,368 6,380,616 31,283 8,525 - 20,393,792Capital Assets 2,085,364 2,397,822 - - - 4,483,186Prepaid Assets - 35,307 - - - 35,307

59,767,443 9,192,913 68,056 56,700 - 69,085,112

InvestmentsU.S. Government Obligations 218,855,507 69,229,551 - - - 288,085,058Corporate Bonds 261,293,842 89,337,931 - 738,964 - 351,370,737Corporate Stocks 558,489,953 342,646,371 - 1,021,652 - 902,157,976Money Market Funds and Commercial Paper - 18,686,543 - - 5,173,718 23,860,261International Equity 130,611,436 - - - 130,611,436Mutual Funds 89,767,560 - - - 89,767,560Real Estate 97,041,662 30,440,327 - - 127,481,989Private Equity 31,255,519 - - - 31,255,519

Total Investments 1,387,315,479 550,340,723 - 1,760,616 5,173,718 1,944,590,536

Securities Lending Collateral 221,384,265 - - - 221,384,265Total Assets 1,668,467,187 559,533,636 68,056 1,817,316 5,173,718 2,235,059,913

LiabilitiesObligations Under Security Lending 221,384,265 - - - 221,384,265Accounts Payable 268,017 766,945 68,056 - 1,103,018Accrued Liabilities 89,767,560 - - - 89,767,560Payable for Securities Purchased 17,536,870 4,969,173 - - 22,506,043

Total Liabilities 328,956,712 5,736,118 68,056 - - 334,760,886

Net AssetsHeld in Trust for Pension Benefits 1,339,510,475$ 553,797,518$ -$ 1,817,316$ 5,173,718$ 1,900,299,027$

130

City of Miami, FloridaCombining Statement of Changes in Fiduciary Net Assets

Fiduciary FundsFor the Year Ended September 30, 2010

Employee Retirement Funds TotalsGeneral and General and General and Elected Officers' Employee

Firefighters and Sanitation Employees Sanitation Employees Sanitation Employees Retirement Trust RetirementPolice (FIPO) (GESE) (GESE Excess Plan) (GESE Staff Plan) (EORT) Funds

AdditionsContributions:

Employer 59,025,379$ 24,037,093$ 339,602$ 132,542$ 1,275,242$ 84,809,858$Plan Members 10,436,367 12,728,711 - 126,402 - 23,291,480

Total Contributions 69,461,746 36,765,804 339,602 258,944 1,275,242 108,101,338

Investment Earnings:Net Increase (Decrease) in Fair

Value of Investments 88,157,504 33,866,484 - 104,560 - 122,128,548Interest 25,193,619 6,808,407 - - 65,790 32,067,816Dividends 9,802,009 4,256,714 - 44,405 - 14,103,128Other 638,055 264,329 - - - 902,384

Total Investment Earnings 123,791,187 45,195,934 - 148,965 65,790 169,201,876

Less Investment Expenses 4,899,945 2,179,360 - - - 7,079,305Net Investment Earnings 118,891,242 43,016,574 - 148,965 65,790 162,122,571

Security Lending Activities:Security Lending Income 497,865 - - - - 497,865Security Lending Fees and Rebates (122,526) - - - - (122,526)Unrealized Gain 2,545,854 - - - - 2,545,854

Net Income From SecurityLending Activities 2,921,193 - - - - 2,921,193

Reimbursement Income from City - 2,888,419 112,079 - - 3,000,498Total 191,274,181 82,670,797 451,681 407,909 1,341,032 276,145,600

DeductionsBenefits/Payments 101,371,860 62,162,717 323,244 - 252,105 164,109,926Refunds upon Resignation, Death, etc. 240,922 1,784,596 - 4,156 2,029,674Distribution to Retirees 17,236,918 - - - 17,236,918Administrative and Other Expenses 42,726 2,938,167 128,437 - 3,109,330

Total 118,892,426 66,885,480 451,681 4,156 252,105 186,485,848Change in Net Assets 72,381,755 15,785,317 - 403,753 1,088,927 89,659,752Net Assets - Beginning of Year 1,267,128,720 538,012,201 - 1,413,563 4,084,791 1,810,639,275Net Assets - End of Year 1,339,510,475$ 553,797,518$ -$ 1,817,316$ 5,173,718$ 1,900,299,027$

131

��

�

��

�

�

�

�

�

�

�

�

i

STATISTICAL SECTION

FINANCIAL TRENDS

REVENUE CAPACITY

DEBT CAPACITY

DEMOGRAPHIC ANDECONOMIC INFORMATION

OPERATING INFORMATION

Contents Page

Financial TrendsThese schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 134

Revenue CapacityThese schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. 139

Debt CapacityThese schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 144

Demographic and Economic InformationThese schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. 149

Operating InformationThese schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. 152

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

STATISTICAL SECTION

This part of the City of Miami, Florida's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

133

2006 2007 2008 2009 2010Primary Government

Invested in Capital Assets, Net of Related Debt 640,931,069$ 730,272,844$ 773,959,639$ 791,005,790$ 752,506,507$

Restricted 188,895,278 102,602,464 147,706,831 77,576,635 88,296,965

Unrestricted (98,069,477) (93,712,582) (211,485,639) (242,954,199) (306,024,093)Total Primary Government Net Assets 731,756,870$ 739,162,726$ 710,180,831$ 625,628,226$ 534,779,379$

Notes:(1) Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34,

Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.

(2) The City does not have any business-type activities for financial reporting purposes.

(ACCRUAL BASIS OF ACCOUNTING)

CITY OF MIAMI, FLORIDANET ASSETS BY COMPONENT

LAST FIVE FISCAL YEARS

134

2006 2007 2008 2009 2010ExpensesGovernmental Activities:

General Government 85,315,437$ 121,694,219$ 140,680,932$ 155,197,585$ 152,726,749$ Planning and Development 16,911,621 16,923,477 16,217,858 15,465,304 12,019,294Community Development 41,054,245 35,486,773 42,029,139 37,126,171 39,654,938Community Redevelopment Areas 6,331,328 7,011,132 13,904,297 20,565,676 29,288,203Public Works 65,958,181 75,073,321 72,572,813 72,003,282 69,969,816Public Safety 347,976,631 343,470,082 370,007,019 375,402,446 371,351,024Public Facilities 14,917,431 16,691,365 15,354,423 13,179,074 16,848,482Parks and Recreation 25,718,056 39,893,208 39,550,244 43,440,769 39,775,607Interest on Long-Term Debt 21,560,094 23,859,254 27,206,895 36,091,032 27,532,637Unallocated Depreciation 26,690,642 29,548,332 - - -

Total Primary Government Expenses 652,433,666 709,651,163 737,523,620 768,471,339 759,166,750

Program RevenuesGovernmental Activities:

Charges for Services:General Government 51,161,759 33,403,595 40,062,337 35,586,957 38,703,437Planning and Development 22,799,725 24,558,217 13,076,692 9,611,336 9,719,151Community Development 4,053,520 2,301,538 702,888 - 154,505Community Redevelopment Areas 214,142 1,414,979 1,140,923 1,064,942 1,274,758Public Works 51,888,525 46,587,956 48,488,699 47,792,238 46,479,565Public Safety 39,193,653 22,952,364 16,577,772 17,785,328 22,152,448Public Facilities 25,137,318 6,558,800 16,660,099 15,458,604 14,636,371Parks and Recreation 2,406,099 3,488,492 4,106,702 4,827,158 6,247,234

Operating Grants and Contributions 34,889,443 71,070,882 63,179,016 64,645,980 73,139,270Capital Grants and Contributions 72,067,622 69,140,730 54,174,136 33,964,265 27,113,487

Total Primary Government Program Revenues 303,811,806 281,477,553 258,169,264 230,736,808 239,620,226

Net (Expense)/RevenueTotal Primary Government Net Expense (348,621,860)$ (428,173,610)$ (479,354,356)$ (537,734,531)$ (519,546,524)$

General Revenues and Other Changes in Net AssetsGovernmental Activities:

TaxesProperty Taxes, Levied for General Purposes 226,508,118$ 275,012,727$ 269,785,445$ 283,516,182$ 264,548,387$ Property Taxes, Levied for Debt Service 19,966,467 19,886,776 21,327,853 21,377,549 22,662,573Franchise Taxes 41,342,214 42,257,282 42,298,452 42,823,572 43,120,713State Revenue Sharing - Unrestricted 12,947,019 13,073,886 12,187,197 22,566,791 10,516,183Sales and Other Use Tax 25,800,341 25,505,412 24,860,795 10,791,455 22,665,743Public Service Taxes 57,991,178 58,099,069 62,257,072 64,010,537 61,966,455

Investment Earnings - Unrestricted 14,477,950 23,837,450 17,655,647 7,718,282 3,217,623Gain (Loss) on Disposal of Capital Assets - 1,502,044 - - -Other 768,767 - - 377,558 -Special Item - Impairment Loss on Capital Assets - (23,595,180) - - -

Total Primary Government 399,802,054 435,579,466 450,372,461 453,181,926 428,697,677

Change in Net AssetsTotal Primary Government 51,180,194$ 7,405,856$ (28,981,895)$ (84,552,605)$ (90,848,847)$

Notes:(1) Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34, Basic

Financial Statements and Management's Discussion and Analysis for State and Local Governments.

(2) The City does not have any business-type activities for financial reporting purposes.

CITY OF MIAMI, FLORIDACHANGES IN NET ASSETSLAST FIVE FISCAL YEARS

(ACCRUAL BASIS OF ACCOUNTING)

135

CITY OF MIAMI, FLORIDAGOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE

LAST FIVE FISCAL YEARS(ACCRUAL BASIS OF ACCOUNTING)

Ad Valorem Ad Valorem Sales CommunicationFiscal Taxes Taxes Franchise and Other ServiceYear General Purpose Debt Service Taxes Use Taxes Taxes Total2006 226,508,118 19,966,467 41,342,214 25,800,341 57,991,178 371,608,3182007 275,012,727 19,886,776 42,257,282 25,505,412 58,099,069 420,761,2662008 269,785,445 21,327,853 42,298,452 24,860,795 62,257,072 420,529,6172009 283,516,182 21,377,549 42,823,572 22,566,791 64,010,537 434,294,6312010 264,548,387 22,662,573 43,120,713 22,665,743 61,966,455 414,963,871

Note: Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.

136

CITY OF MIAMI, FLORIDAFUND BALANCES OF GOVERNMENTAL FUNDS

LAST FIVE FISCAL YEARS(MODIFIED ACCRUAL BASIS OF ACCOUNTING)

2006 2007 2008 2009 2010General Fund

Reserved 894,059$ 3,768,826$ 4,616,080$ 2,421,978$ -$ Unreserved 125,362,454 96,681,318 88,961,368 37,550,609 13,442,370

Total General Fund 126,256,513$ 100,450,144$ 93,577,448$ 39,972,587$ 13,442,370$

All Other Governmental FundsReserved 96,569,917$ 110,160,478$ 46,825,466$ 53,241,904$ 54,173,048$ Unreserved designated - 12,859,516 4,027,253 - 2,650,799Unreserved, reported in:

Special Revenue Funds 43,934,094 7,995,266 60,443,132 66,672,188 74,352,266Debt Service Funds - 3,443,149 1,861,274 - (41,370)Capital Projects Funds 131,018,373 123,498,283 200,205,983 216,837,095 321,534,780

Total All Other Governmental Funds 271,522,384$ 257,956,692$ 313,363,108$ 336,751,187$ 452,669,523$

Notes:(1) Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34,

Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.

137

CITY OF MIAMI, FLORIDACHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

LAST FIVE FISCAL YEARS(MODIFIED ACCRUAL BASIS OF ACCOUNTING)

2006 2007 2008 2009 2010RevenuesProperty Taxes 246,337,333$ 294,251,152$ 291,113,299$ 304,893,731$ 287,210,960$ Franchise and Other Taxes 98,243,722 100,356,351 104,555,524 106,834,109 105,089,565 Licenses and Permits 28,468,593 32,848,055 29,844,868 26,105,211 25,348,038 Fines and Forfeitures 5,912,300 7,541,812 6,977,788 7,441,420 5,207,735 Intergovernmental Revenues 174,074,303 150,040,391 157,268,610 141,254,258 153,415,564 Charges for Services 106,682,451 89,589,154 86,386,721 85,926,635 88,420,225 Interest 18,979,204 23,837,450 17,655,770 7,718,282 3,217,854 Impact Fees 9,388,192 4,017,110 4,679,000 332,175 12,089 Other 15,376,683 9,369,810 10,102,809 10,757,077 9,105,815 Total Revenues 703,462,781 711,851,285 708,584,389 691,262,898 677,027,845

ExpendituresGeneral Government 49,995,402 57,669,544 77,127,072 78,888,172 68,278,497 Planning and Development 12,740,678 11,862,685 11,236,136 11,349,570 9,340,192 Community Development 40,978,910 35,325,497 41,036,697 36,413,108 39,157,777 Community Redevelopment Areas 5,982,541 5,314,468 15,946,941 20,144,229 29,084,137 Public Works 50,579,908 56,484,364 55,068,379 55,172,871 51,337,220 Public Safety 251,914,610 256,691,572 265,497,659 266,284,837 249,748,875 Public Facilities 11,795,688 13,455,945 13,019,718 11,660,410 12,555,541 Parks and Recreation 17,896,247 30,637,506 29,056,137 33,211,002 27,544,737 Risk Management (2) 25,546,486 18,115,929 28,796,859 13,107,068 22,354,729 Pensions (2) 78,864,757 70,708,285 65,116,477 66,906,558 89,975,265 Organizational Support (2) 25,161,646 35,122,459 27,751,691 41,314,516 32,218,742 Non-Departmental (2) 13,204,324 28,490,230 - - - Debt Service:

Principal 19,218,795 20,887,276 21,343,143 23,566,021 27,261,275 Interest and Other Charges 21,650,889 24,346,064 28,920,735 31,928,202 38,064,683

Debt Issuance Costs - 6,988,908 - - - Capital Outlay 103,894,188 124,264,229 114,576,911 106,862,901 55,695,847 Total Expenditures 729,425,069 796,364,961 794,494,555 796,809,465 752,617,517 Excess (Deficiency) of Revenues Over Expenditures (25,962,288) (84,513,676) (85,910,166) (105,546,567) (75,589,672)

Other Financing Sources (Uses)Transfers In 229,700,739 278,006,434 227,562,830 196,098,575 146,557,421 Transfers Out (229,700,739) (278,006,434) (227,562,830) (196,098,575) (146,557,421) Sale of Property - 1,502,044 - - - Proceeds Received From Refunding - 138,841,992 133,098,930 - - Payment To Escrow Agent For Refunding - (131,775,000) - (32,366,235) - Proceeds Received From Long-Term Debt - 50,969,202 - 108,490,000 - Premium (Discount) Long-Term Debt - - 1,344,956 (793,980) - Loan 1,000 - - - - Capital Leases - - - - (1,392,209) Sale of Capital Assets 889,969 - - - 166,370,000 Total Other Financing Sources 890,969 59,538,238 134,443,886 75,329,785 164,977,791 Net Change In Fund Balances (25,071,319)$ (24,975,438)$ 48,533,720$ (30,216,782)$ 89,388,119$

Debt Service as a Percentage of Non-Capital Expenditures 6.53% 6.91% 7.71% 8.04% 9.37%

Notes:(1) Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34, Basic

Financial Statements and Management's Discussion and Analysis for State and Local Governments.

(2) The City, in the 2005 fiscal year, revised the reporting for these functions in the governmental funds. Previously, these amountswere included in other functions.

(3) Expenditures for capital assets on page 18 is $142,176,246 instead of $124,264,229 above because $17,912,017 of capitalassets were charged to the various functions as expenditures instead of through the Capital Project Funds. These amounts are included in the reconciliation of capital assets on page 49.

138

(MODIFIED ACCRUAL BASIS OF ACCOUNTING)

Ad Valorem Ad Valorem Sales CommunicationFiscal Taxes Taxes Franchise and Other ServicesYear General Purpose Debt Service Taxes Use Taxes Taxes Total2006 226,304,681 20,032,652 41,342,214 25,800,341 56,900,497 370,380,3852007 275,012,727 19,886,776 42,257,282 25,505,412 58,099,069 420,761,2662008 269,785,445 21,327,853 42,298,452 24,860,795 62,257,072 420,529,6172009 283,516,182 21,377,549 42,823,572 22,566,791 64,010,537 434,294,6312010 264,548,387 22,662,573 43,120,713 22,665,743 61,966,455 414,963,871

Note: Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34,Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.

CITY OF MIAMI, FLORIDAGENERAL GOVERNMENTAL TAX REVENUES BY SOURCE

LAST FIVE FISCAL YEARS

139

CITY OF MIAMI, FLORIDANET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY

Net AssessedTotal Value as a

Fiscal Year Net Direct Estimated Percentage ofEnded Residential Commercial Personal Assessed Tax Actual Estimated Actual

September 30, Property Property Property Value Rate Value Value (1)

2001 6,000,474,083 6,113,340,757 1,657,551,519 13,771,366,359 10.28 20,061,032,742 68.65%2002 6,612,151,524 6,730,517,606 1,770,392,311 15,113,061,441 10.21 22,035,829,555 68.58%2003 7,679,048,886 7,380,571,799 1,878,266,085 16,937,886,770 10.07 24,759,964,620 68.41%2004 8,789,474,779 8,369,950,851 1,711,697,688 18,871,123,318 9.84 27,717,908,682 68.08%2005 10,364,157,774 9,870,433,741 1,695,110,542 21,929,702,057 9.67 32,133,104,422 68.25%2006 12,959,276,770 12,341,927,389 1,676,173,129 26,977,377,288 9.26 39,120,899,711 68.96%2007 20,320,801,612 11,038,460,135 1,673,647,599 33,032,909,346 9.00 47,925,276,742 68.93%2008 24,279,025,389 11,727,240,945 1,749,572,760 37,755,839,094 7.88 55,249,891,635 68.34%2009 23,572,178,928 11,890,691,413 1,686,320,651 37,149,190,992 8.33 52,185,972,858 71.19%2010 23,341,894,079 11,921,087,043 1,686,540,244 36,949,521,366 8.64 52,146,883,603 70.86%

Source: Miami-Dade County Property Appraiser's Office.

Note: Property in the City is reassessed each year. State law requires the Property Appraiser to appraise property at 100% of market value.The Florida Constitution was amended, effective January 1, 1995, to limit annual increases in assessed value of property with homesteadexemption to 3 percent per year or the amount of the Consumer Price Index, whichever is lower. The increase is not automatic since noassessed value shall exceed market value. Tax rates are per $1,000 of assessed value.

(1) Includes tax-exempt property.


Real Property

140

Miami-Dade Miami-Dade South Florida Florida TotalCounty Miami-Dade County Water Inland Direct and

Fiscal Tax Roll General Debt Total School Miami-Dade Children's Library Management Environmental Navigation OverlappingYear Year Operations Service City Board County Trust System District Projects District Rates

2001 2000 8.9950 1.2800 10.2750 9.7170 6.4030 - 0.3510 0.5970 - 0.0410 27.38402002 2001 8.9950 1.2180 10.2130 9.4760 6.2650 - 0.4510 0.5970 - 0.0385 27.04052003 2002 8.8500 1.2180 10.0680 9.3520 6.2790 - 0.4860 0.5970 - 0.0385 26.82052004 2003 8.7625 1.0800 9.8425 9.2000 6.2540 0.5000 0.4860 0.5970 - 0.0385 26.91802005 2004 8.71625 0.9500 9.6663 8.6870 6.2200 0.4442 0.4860 0.5970 0.1000 0.0385 26.23895 2006 2005 8.49950 0.7650 9.2645 8.4380 6.1200 0.4288 0.4860 0.5970 0.1000 0.0385 25.47280 2007 2006 8.37450 0.6210 8.9955 8.1050 5.9000 0.4223 0.4860 0.5970 0.1000 0.0385 24.64430 2008 2007 7.29990 0.5776 7.8775 7.9480 4.8646 0.4223 0.3842 0.5346 0.0894 0.0345 22.15510 2009 2008 7.67400 0.6595 8.3335 7.9950 5.1229 0.5000 0.3822 0.5346 0.0894 0.0345 22.99210 2010 2009 7.67400 0.9701 8.6441 8.2490 5.8725 0.5000 0.2840 0.5346 0.0894 0.0345 24.20810

Sources: City of Miami, Florida Finance Department and Miami-Dade County Property Appraiser's Office.

Note: All millage rates are based on $1 for every $1,000 of assessed value.(1) Overlapping rates are those of local and county governments that apply to property owners within the City of Miami, Florida. Not all overlapping rates

apply to all City of Miami, Florida property owners (i.e. the rates for special districts apply only to the proportion of the government's property ownerswhose property is located within the geographic boundaries of the special district).

City of Miami, Florida Overlapping Rates (1)

CITY OF MIAMI, FLORIDAPROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS


141

Percent of Percent ofTotal Total

Net City Net Net City NetAssessed Assessed Assessed Assessed

Taxpayer Value Rank Value Taxpayer Value Rank ValueFlorida Power & Light 437,936,647$ 1 1.19% Florida Power & Light 149,163,031 2 1.08%200 S Biscayne TIC 1 LLC 290,700,000 2 0.79%Crescent Miami Center 196,500,000 3 0.53%Bellsouth Telecommuniations 186,796,701 4 0.51% Bellsouth 133,972,769 4 0.97%T C 701 Brickell LLC 172,900,000 5 0.47%1111 Brickell Office LLC 146,100,000 6 0.40%Trustees of L&B 117,400,000 7 0.32%Opera Tower LLC 112,499,679 8 0.30%Estoril Incorporated 107,400,000 9 0.29%Blue Capital US East 99,500,000 10 0.27%

SRI Aetna Life Insurance 178,100,000 1 1.29%Metropolitan Life Ins. Co. 135,950,000 3 0.99%Prudential Insurance Co. 117,000,000 5 0.85%Brickell Associates 83,000,000 6 0.60%Ceaders Healthcare Group LTD 60,750,852 7 0.44%NOP LLC 60,100,000 8 0.44%Brickell Equities Corp 57,015,028 9 0.41%Brickell Square 51,190,595 10 0.37%

1,026,242,275$ 7.45%1,867,733,027$ 5.05%

Net Assessed Value 36,949,521,366 5.05% 13,771,366,359

2010 2001

CITY OF MIAMI, FLORIDAPRINCIPAL PROPERTY TAXPAYERS

CURRENT YEAR AND NINE YEARS AGO

142

CITY OF MIAMI, FLORIDAPROPERTY TAX LEVIES AND COLLECTIONS


Total TaxesFiscal Year Levied for Collections in

Ended Fiscal Percent Subsequent PercentSeptember 30, Year Amount of Levy Year's Amount of Levy

2001 141,500,789 131,872,377 93.20% 5,959,373 137,831,750 97.41%2002 154,349,696 145,506,737 94.27% 4,079,641 149,586,378 96.91%2003 170,530,644 161,197,051 94.53% 7,735,274 168,932,325 99.06%2004 185,739,031 178,766,680 96.25% 1,640,252 180,406,932 97.13%2005 211,977,983 206,451,562 97.39% 2,379,977 208,831,539 98.52%2006 249,931,912 243,957,356 96.82% 3,801,414 247,758,770 99.13%2007 297,147,536 290,449,738 97.76% 7,111,337 297,561,075 100.14%2008 297,421,622 284,001,962 95.49% 8,489,434 292,491,396 98.34%2009 309,582,783 296,404,297 95.74% 9,200,940 305,605,237 98.72%2010 319,395,358 278,010,020 87.04% - 278,010,020 87.04%

Source: City of Miami, Finance Department and Miami-Dade County Tax Collector's Office

Collected withinthe Fiscal Year

of the Levy to DateTotal Collections

143

Fiscal Year General Percent ofEnded Obligation Revenue Loans Capital Personal Per

September 30, Bonds Bonds Payable Leases Total Income (1) Capita (1)

2001 107,620,000 134,531,325 62,040,564 - 304,191,889 3.17% 8392002 252,615,822 128,861,019 58,877,164 - 440,354,005 2.20% 1,2152003 236,549,956 151,566,324 28,230,764 - 416,347,044 2.40% 1,1492004 225,944,956 145,130,260 25,567,364 2,525,936 399,168,516 2.64% 1,1012005 215,729,956 138,676,431 23,465,964 1,921,177 379,793,528 2.99% 1,0482006 205,306,932 132,131,060 21,216,564 1,298,941 359,953,497 3.39% 9932007 245,689,409 125,969,708 24,120,164 658,722 396,438,003 3.30% 1,0942008 235,393,765 198,484,539 73,656,764 - 507,535,068 2.56% 1,4002009 276,113,503 199,629,250 89,426,363 - 565,169,117 N/A 1,5592010 265,804,455 358,571,022 79,902,364 - 704,277,841 N/A 1,763

Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

(1) See the Schedule of Demographic and Economic Statistics on page 147 for personal income and population data.

N/A: Information not available

Governmental Activities

CITY OF MIAMI, FLORIDARATIOS OF OUTSTANDING DEBT BY TYPE


144

Percentage of Less Amounts Estimated Actual

Fiscal Year General Available in TaxableEnded Obligation Debt Service Value of Per

September 30, Bonds Fund Total Property (1) Capita (2)

2001 107,620,000 3,795,503 103,824,497 0.518% 286.442002 249,711,406 5,140,714 244,570,692 1.110% 674.732003 236,549,956 1,410,866 235,139,090 0.950% 648.712004 225,944,956 966,126 224,978,830 0.812% 620.682005 215,729,956 1,512,591 214,217,365 0.667% 590.992006 205,306,932 1,994,991 203,311,941 0.520% 560.912007 245,689,409 2,304,217 243,385,192 0.508% 671.462008 235,393,765 2,138,512 233,255,253 0.422% 643.522009 276,113,503 1,496,363 274,617,140 0.526% 757.632010 265,804,455 (41,370) 265,845,825 0.510% 665.52

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements

(1) See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property on page 138 for property value data.

(2) See the Schedule of Demographic and Economic Statistics on page 147 for population data.

CITY OF MIAMI, FLORIDARATIOS OF GENERAL BONDED DEBT OUTSTANDING


145

Percentage Amount Net Applicable to Applicable toDebt the City of the City of

Government Unit Outstanding Miami (1) Miami

Debt Repaid With Property Taxes:Miami-Dade County 839,095,804$ 19.00% 159,428,203$Miami-Dade County School Board 348,100,000 19.00% 66,139,000

Subtotal, Overlapping Debt 225,567,203

City of Miami, Florida Direct Debt(excludes special obligation, revenue bonds, loans and capital leases) 265,804,455

Total Direct and Overlapping Debt 491,371,658$

Sources: Data provided by the Miami-Dade County Finance Department and the Miami-Dade County School Board.

Note:Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City.This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by theresidents and businesses of the City of Miami. This process recognizes that, when considering the City's ability toissue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken intoaccount. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying thedebt, of each overlapping government.

(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxableassessed property values. Value that is within the City's boundaries and dividing it by the County's and School Board's total taxable assessed value. This approach was also used for the other debt.

CITY OF MIAMI, FLORIDADIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT

AS OF SEPTEMBER 30, 2010

146

CITY OF MIAMI, FLORIDALEGAL DEBT MARGIN INFORMATION


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Debt Limit 2,065,704,949$ 2,266,959,216$ 2,540,683,016$ 2,830,668,498$ 3,289,455,309$ 4,046,606,593$ 4,954,936,402$ 5,400,939,950$ 5,372,349,771$ 5,370,833,756$

Total Net Debt Applicable to Limit 103,824,851 249,711,407 236,549,956 224,978,830 214,217,365 203,311,941 243,385,192 233,255,253 274,617,140 265,845,825

Legal Debt Margin 1,961,880,098$ 2,017,247,809$ 2,304,133,060$ 2,605,689,668$ 3,075,237,944$ 3,843,294,652$ 4,711,551,210$ 5,167,684,697$ 5,097,732,631$ 5,104,987,931$

Total Net Debt Applicable to the 5.03% 11.02% 9.31% 7.95% 6.51% 5.02% 4.91% 4.32% 5.11% 4.95%Limit as a Percentage of Debt Limit

Legal Debt Margin Calculation for Fiscal Year 2010Assessed value 37,149,190,992$Less: Homestead Exempt Valuation (1,343,632,622)Total Assessed Value 35,805,558,370

Debt Limit for Bonds(15% of Total Assessed Value) 5,370,833,756Present Debt Application to Debt Limitation

General Obligation Debt 265,804,455Less: Amount Available in Debt Service Fund 41,370

Total Net Debt Applicable to Limit 265,845,825Legal Debt Margin 5,104,987,931$

147

CITY OF MIAMI, FLORIDAPLEDGED REVENUE COVERAGE


Fiscal YearEnded Ad-Valorem 2x Annual

September 30, Revenues (1) Principal Interest Debt Service Coverage (2)

2001 226,040,821 10,243,400 10,524,127 41,535,054 5.442002 240,074,038 8,546,400 13,652,298 44,397,396 5.412003 250,581,519 7,809,464 13,997,817 43,614,562 5.752004 260,251,789 9,099,464 12,625,974 43,450,876 5.992005 261,901,194 8,555,229 12,491,326 42,093,110 6.222006 289,038,101 8,795,771 12,519,779 42,631,100 6.782007 294,252,080 10,514,753 14,627,989 50,285,484 5.852008 291,113,298 10,465,644 11,379,849 43,690,986 6.662009 304,893,731 10,335,262 12,228,340 45,127,204 6.762010 287,210,960 10,309,047 13,865,476 48,349,046 5.94

Note:(1) Ad valorem revenues shall mean all legally available revenues and taxes of the governmental unit

in the Funds (defined as the general fund, special revenue funds, the capital project funds,the special assessment funds, and the expandable trust fund(s)) derived from any source whatever other than ad valorem taxation on real and personal property, including appropriated fund balances in the funds and applicable operating transfers (in).Non-Ad Valorem Revenues are required to be two times greater than projected debt service.

(2) The Sunshine State Government Financing Loans require that available non-ad valorem revenues be two times the annual projected debt service for all debt other than general obligation debt of the City.

Debt Service

148

Personal Income

(Amounts Per CapitalExpressed in Personal Median School Unemployment

Year Population (1) Thousands) (2) Income (2) Age (2) Enrollment (3) Rate (4)

2001 362,470 9,639,527 26,594 35.90 368,453 6.902002 362,470 9,706,947 26,780 36.90 374,725 7.702003 362,470 10,001,635 27,593 37.00 371,482 7.502004 362,470 10,539,177 29,076 36.60 369,578 5.702005 362,470 11,362,347 31,437 37.40 365,784 4.702006 362,470 12,219,589 33,712 37.00 361,550 3.402007 362,470 13,074,655 36,701 38.00 346,629 4.102008 362,470 13,007,961 35,887 38.00 344,806 6.102009 362,470 N/A N/A N/A 345,570 11.102010 399,457 N/A N/A N/A 341,774 11.09

Sources:(1) United States Census Bureau(2) Miami-Dade County Finance Department(3) Miami-Dade County School Board Budget Office(4) Florida Agency for Workplace Innovation, Office of Workforce Information Services,

Labor Market StatisticsN/A Information not available

CITY OF MIAMI, FLORIDADEMOGRAPHIC AND ECONOMIC STATISTICS


149

Percentage of Percentage ofTotal County Total County

Employer Employees Rank Employment Employees Rank EmploymentMiami-Dade County Public Schools 48,571 1 1.96% 35,469 1 1.43%Miami-Dade County 29,000 2 1.17% 30,000 2 1.21%U.S. Federal Government 19,500 3 0.79% 18,276 3 0.74%State of Florida 17,100 4 0.69% 18,100 4 0.73%University of Miami 16,000 5 0.65% 7,800 8 0.31%Baptist Health Systems of South Florida 13,376 6 0.54% 7,500 9 0.30%Public Health Trust/Jackson Memorial Hospit 12,571 7 0.51% 8,191 6 0.33%Publix Supermarkets 10,800 8 0.44%American Airlines 9,000 9 0.36% 9,000 5 0.36%Florida International University 8,000 10 0.32%Precision Response Corp 8,000 7 0.32%BellSouth/AT&T - - 4,240 10 0.17%Total 183,918 7.42% 146,576 5.91%

Source: The Beacon Council/Miami-Dade County, Florida

2,010 2,001

CURRENT YEAR AND NINE YEARS AGO

CITY OF MIAMI, FLORIDAPRINCIPAL EMPLOYERS

150

CITY OF MIAMI, FLORIDAFULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Number of Employees:

General Government 511 523 587 594 617 641 644 641 511 538Planning and Development 127 141 140 138 147 141 142 128 123 102Community Development 172 170 91 77 73 61 52 61 55 54Public Works 500 507 498 497 505 542 526 525 521 436Public Safety 2,346 2,275 2,248 2,140 2,138 2,222 2,288 2,310 2,390 2,368Public Facilities 37 37 33 43 45 55 56 54 41 41Culture and Recreation 136 136 141 148 188 190 191 207 265 186

Total Number of Employees 3,829 3,789 3,738 3,637 3,713 3,852 3,899 3,926 3,906 3,725

Source: City of Miami, Budget Department

151

CITY OF MIAMI, FLORIDAOPERATING INDICATORS BY FUNCTION


Function/Program 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Community Development:

Entitlements/Grants Received 53,634,346$ 38,337,736$ 35,569,042$ 32,351,101$ 37,191,063$ 30,816,293$ 29,943,482$ 30,267,482$ 26,275,445 37,815,004

Public Safety:Police:

Part 1 Crimes - (1) 35,291 33,952 33,527 30,966 29,455 26,219 27,302 27,907 25,761 26,097Part 1 Arrests - (1) 8,812 8,368 6,729 6,662 5,728 4,359 4,635 4,741 4,536 4,393Part 2 Arrests - (2) 41,089 31,077 26,786 38,467 33,385 33,408 32,738 31,211 32,826 26,670

Fire:Number of Fire Calls 12,945 12,228 15,571 17,889 19,017 12,694 14,472 18,191 10,411 14,493Number of EMS Calls 63,104 63,041 62,784 64,500 67,300 70,423 72,757 69,870 73,017 76,747Number of Alarms 76,049 75,269 78,355 82,389 86,318 83,117 87,227 88,061 88,847 91,240

Planning and Development:Certificate of Use Permits Issued 19,483 20,366 20,625 20,422 21,123 21,142 22,000 21,482 22,724 20,156Occupational Licenses Issued 38,207 37,524 39,040 39,422 40,371 34,197 42,000 22,498 22,092 29,548

Culture and Recreation:Summer Food Program - Meals Served (Lunches) 83,515 96,249 124,701 122,749 89,324 55,126 104,472 N/A N/A 58,785Summer Food Program - Meals Served (Snacks) 116,899 132,481 146,786 115,837 100,870 61,000 114,670 N/A N/A 62,983

Solid Waste:Refuse Collected (Tons/Day) 725 805 768 793 578 713 629 717 N/A 566Recyclables Collected (Tons/Day) 28 28 24 21 72 10 13 16 N/A 11

Sources: Various City DepartmentsNote: Indicators are not available for the general government function.

(1) Part 1 crimes and arrests include murder, rape, robbery, aggravated assault, burglary, larceny, and motor vehicle theft.(2) Part 2 arrests include all other arrests that are not Part 1 crimes.N/AInformation not available.

152

CITY OF MIAMI, FLORIDACAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM


Function/Program 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Public Safety:

Police:Police Stations 1 1 1 1 1 1 1 1 1 1 Police Sub-Stations 2 2 2 2 2 2 2 3 3 3

Fire:Fire Stations 12 12 12 12 14 14 14 14 14 14

Solid Waste:Collection Trucks 132 153 172 176 152 151 175 181 N/A 160

Public Works:Streets (Miles- Paved) 659.2 659.0 658.9 658.9 660.0 667.4 662.2 662.2 662.1 662.1 Streets (Miles - Unpaved) 1.4 1.4 1.4 1.4 1.4 3.1 1.2 N/A 1.12 1.12

Transportation:Street Resurfacing (Miles) N/A N/A 25.0 33.5 33.5 17.9 23.3 21.6 N/A 15.8

Culture and Recreation:Parks Acreage 800 800 800 800 800 800 894 894 894 894 Parks 110 110 110 111 111 112 112 112 112 112 Swimming Pools 10 10 10 10 10 12 11 11 15 15 Tennis Courts 53 53 53 53 53 53 55 55 61 61 Community Centers 26 30 30 31 30 32 32 32 34 34 Basketball Courts 63 63 63 63 61 63 63 63 71 71 Water Playgrounds - - - 1 1 1 2 2 2 2 Soccer Fields 6 6 6 7 7 7 11 11 13 13 Football Fields 12 12 12 12 12 12 10 10 9 9 Baseball Fields 25 25 25 25 21 25 27 27 30 30 Open Practice Fields - - - - - - 2 2 2 2 Cricket Field - - - - - - 1 1 1 1

Sources: Various City DepartmentsNote: No capital asset indicators are available for the general government function.N/AInformation not available.

153

��

�

��

�

�

�

�

�

�

�

�


APPENDIX E

FORM OF BOND COUNSEL OPINION


APPENDIX E FORM OF BOND COUNSEL OPINION

Upon delivery of the Series 2011A Bonds, Squire, Sanders & Dempsey (US) LLP

is prepared to render its final opinion with respect to the Series 2011A Bonds in substantially the following form:

July __, 2011 City Commission of the City of Miami, Florida

We have served as bond counsel to our client the City of Miami, Florida (the “City”) and not as counsel to any other person in connection with the issuance by the City of its $70,645,000 aggregate principal amount of Special Obligation Non-Ad Valorem Revenue Refunding Bonds, Series 2011A (the “Series 2011A Bonds”), dated the date of this letter.

The Series 2011A Bonds are issued pursuant to the Constitution and laws of the State of Florida, particularly Chapter 166, Florida Statutes, as amended, the Charter of the City and other applicable provisions of law (the “Act”), and Resolution No. R-11-0228 adopted by the City Commission of the City on May 26, 2011 (the “Bond Resolution”), to provide funds, together with other available moneys, to (i) refinance certain outstanding loan obligations of the City with Sunshine State, as described in the Bond Resolution, (ii) fund a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds and (iii) pay certain costs of issuance of the Series 2011A Bonds, including, if necessary, the premium for a Bond Insurance Policy. Capitalized terms not otherwise defined in this letter are used as defined in the Bond Resolution.

In our capacity as bond counsel, we have examined the transcript of proceedings relating to the issuance of the Bonds, a copy of the signed and authenticated Series 2011A Bond of the first maturity of each, the Bond Resolution and such other documents, matters and law as we deem necessary to render the opinions set forth in this letter.

Based on that examination and subject to the limitations stated below, we are of the opinion that under existing law:

1. The Series 2011A Bonds and the Bond Resolution are, valid and binding obligations of the City, enforceable in accordance with their respective terms.

2. The Series 2011A Bonds constitute special limited obligations of the City, and the principal of and interest on (collectively, “debt service”) on the Series 2011A Bonds, are payable from and secured solely by the Series 2011A Pledged Funds as provided in the Bond Resolution.

E-1

City Commission of the City of Miami, Florida July __, 2011 Page 2 The payment of debt service on the Series 2011A Bonds is not and the Series 2011A Bonds shall not be or constitute a general indebtedness within the meaning of any constitutional or statutory provision or limitation and the City is not obligated to levy any ad valorem taxes for the payment thereof. Neither the full faith and credit nor the ad valorem taxing power of the State of Florida or any political subdivision or agency thereof is pledged to the payment of the Series 2011A Bonds, and registered owners of the Series 2011A Bonds shall never have the right to compel the exercise of the ad valorem taxing power of the City or taxation in any form on any real or personal property for the payment of the principal of or interest on the Series 2011A Bonds or for the payment of any other amounts provided for in the Bond Resolution.

The City has covenanted and agreed in the Bond Resolution, to the extent permitted by and in accordance with applicable law and budgetary processes, to prepare, approve and appropriate in its Annual Budget for each Fiscal Year, by amendment if necessary, and to deposit to the credit of the Sinking Fund, Non-Ad Valorem Revenues of the City lawfully available in an amount which is equal to the Annual Debt Service Requirement with respect to all Series 2011A Bonds outstanding under the Bond Resolution for the applicable Fiscal Year, plus an amount sufficient to satisfy the other payment obligations of the City under the Bond Resolution for the applicable Fiscal Year. The Bond Resolution provides that such covenant and agreement on the part of the City to budget and appropriate sufficient amounts of Non-Ad Valorem Revenues shall be cumulative, and shall continue until such Non-Ad Valorem Revenues in amounts sufficient to make all required payments under the Bond Resolution as and when due, including any delinquent payments, shall have been budgeted, appropriated and actually paid into the appropriate Funds and Accounts, under the Bond Resolution; provided, however, that such covenant shall not constitute a lien, either legal or equitable, on any of the City’s Non-Ad Valorem Revenues or other revenues, nor shall it preclude the City from pledging in the future any of its Non-Ad Valorem Revenues or other revenues to other obligations, nor shall it give the Bondholders a prior claim on the Non-Ad Valorem Revenues. Notwithstanding the foregoing covenant of the City, the Bond Resolution provides that all obligations of the City thereunder shall be secured only by the Non-Ad Valorem Revenues actually budgeted and appropriated and deposited into the Funds and Accounts created thereunder, as provided for therein. The Bond Resolution further provides that the City may not expend moneys not appropriated or in excess of its current budgeted revenues. The obligation of the City to budget, appropriate and make payments under the Bond Resolution from its Non-Ad Valorem Revenues is subject to the availability of Non-Ad Valorem Revenues after satisfying funding requirements for obligations having an express lien on or pledge of such revenues and after satisfying funding requirements for essential governmental services of the City. “Non-Ad Valorem Revenues” are defined under the Bond Resolution to mean, all revenues of the City derived from any source other than ad valorem taxation on real or tangible personal property, which are legally available to make payments required under the Bond Resolution.

E-2

City Commission of the City of Miami, Florida July __, 2011 Page 3 3. The interest on the Series 2011A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, portions of the interest on the Series 2011A Bonds earned by certain corporations may be subject to a corporate alternative minimum tax. The Series 2011A Bonds and the income thereon are exempt from all taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. We express no opinion as to any other tax consequences regarding the Series 2011A Bonds.

The opinions stated above are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. In rendering all such opinions, we assume, without independent verification, and rely upon (i) the accuracy of the factual matters represented, warranted or certified in the proceedings and documents we have examined, and (ii) the due and legal authorization, execution and delivery of those documents by, and the valid, binding and enforceable nature of those documents upon, any parties other than the City.

In rendering those opinions with respect to the treatment of the interest on the Series 2011A Bonds under the federal tax laws, we further assume and rely upon compliance with the covenants in the proceedings and documents we have examined, including those of the City. Failure to comply with certain of those covenants subsequent to issuance of the Series 2011A Bonds may cause interest on the Series 2011A Bonds to be included in gross income for federal income tax purposes retroactively to their date of issuance.

The rights of the owners of the Series 2011A Bonds and the enforceability of the Series 2011A Bonds and the Bond Resolution are subject to bankruptcy, insolvency, arrangement, fraudulent conveyance or transfer, reorganization, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion, and to limitations on legal remedies against public entities.

The opinions rendered in this letter are stated only as of this date, and no other opinion shall be implied or inferred as a result of anything contained in or omitted from this letter. Our engagement as bond counsel with respect to the Series 2011A Bonds has concluded on this date.

Respectfully submitted, [to be signed “Squire, Sanders & Dempsey (US) LLP”]

E-3


F-1

APPENDIX F

FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT

This Disclosure Dissemination Agent Agreement (the “Disclosure Agreement”), dated as of___________2011, is executed and delivered by the City of Miami, Florida (the “Issuer”) and Digital Assurance Certification, L.L.C., as the exclusive Disclosure Dissemination Agent (the “Disclosure Dissemination Agent” or “DAC”) for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) and in order to provide certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time (the “Rule”).

The services provided under this Disclosure Agreement relate to the execution of instructions received from the Issuer through use of the DAC system and do not constitute “advice” within the meaning of the Dodd-Frank wall Street Reform and Consumer Protection Act (the “Act”). DAC will not provide any advice or recommendation to the Issuer or anyone on the Issuer’s behalf regarding the “issuance of municipal securities” or any “municipal financial product” as defined in the Act and nothing in this Disclosure Agreement shall be interpreted to the contrary.

SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the following meanings:

“Annual Report” means an Annual Report described in and consistent with Section 3 of this Disclosure Agreement.

“Annual Filing Date” means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed with the MSRB.

“Annual Financial Information” means annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Agreement.

“Audited Financial Statements” means the financial statements (if any) of the Issuer for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Agreement.

“Bonds” means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto.

“Certification” means a written certification of compliance signed by the Disclosure Representative stating that the Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure required to be submitted to the MSRB under this Disclosure Agreement. A Certification shall accompany each such document submitted to the Disclosure Dissemination Agent by the Issuer and include the full name of the Bonds and the 9-digit CUSIP numbers for all Bonds to which the document applies.

F-2

“Disclosure Representative” means the Finance Director of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent.

“Disclosure Dissemination Agent” means Digital Assurance Certification, L.L.C, acting in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agent designated in writing by the Issuer pursuant to Section 9 hereof.

“Failure to File Event” means the Issuer’s failure to file an Annual Report on or before the Annual Filing Date.

“Force Majeure Event” means: (i) acts of God, war, or terrorist action; (ii) failure or shut-down of the Electronic Municipal Market Access system maintained by the MSRB; or (iii) to the extent beyond the Disclosure Dissemination Agent’s reasonable control, interruptions in telecommunications or utilities services, failure, malfunction or error of any telecommunications, computer or other electrical, mechanical or technological application, service or system, computer virus, interruptions in Internet service or telephone service (including due to a virus, electrical delivery problem or similar occurrence) that affect Internet users generally, or in the local area in which the Disclosure Dissemination Agent or the MSRB is located, or acts of any government, regulatory or any other competent authority the effect of which is to prohibit the Disclosure Dissemination Agent from performance of its obligations under this Disclosure Agreement.

“Holder” means any person (a) having 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) treated as the owner of any Bonds for federal income tax purposes.

“Information” means the Annual Reports, the Audited Financial Statements (if any), the Notice Event notices, the Failure to File Event notices, the Voluntary Event Disclosures and the Voluntary Financial Disclosures.

“MSRB” means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934.

“Notice Event” means any of the events enumerated in paragraph (b)(5)(i)(C) of the Rule and listed in Section 4(a) of this Disclosure Agreement.

“Obligated Person” means 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, letter of credit, or other liquidity facilities), as shown on Exhibit A.

“Official Statement” means that Official Statement prepared by the Issuer in connection with the Bonds, as listed on Exhibit A.

“Trustee” means the institution, if any, identified as such in the document under which the Bonds were issued.

“Voluntary Event Disclosure” means information of the category specified in any of subsections (e)(vi)(1) through (e)(vi)(11) of Section 2 of this Disclosure Agreement that is accompanied by a

F-3

Certification of the Disclosure Representative containing the information prescribed by Section 7(a) of this Disclosure Agreement.

“Voluntary Financial Disclosure” means information of the category specified in any of subsections (e)(vii)(1) through (e)(vii)(9) of Section 2 of this Disclosure Agreement that is accompanied by a Certification of the Disclosure Representative containing the information prescribed by Section 7(b) of this Disclosure Agreement.

SECTION 2. Provision of Annual Reports.

(a) The Issuer shall provide, annually, an electronic copy of the Annual Report and Certification to the Disclosure Dissemination Agent, together with a copy for the Trustee, not later than 30 days prior to the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the Certification, the Disclosure Dissemination Agent shall provide an Annual Report to the MSRB not later than June 30 of each year, commencing with the fiscal year ending September 30, 2011. Such date and each anniversary thereof is the Annual Filing Date. 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 3 of this Disclosure Agreement.

(b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within the time required under this Disclosure Agreement, state the date by which the Annual Report for such year will be provided and instruct the Disclosure Dissemination Agent that a Failure to File Event as has occurred and to immediately send a notice to the MSRB in substantially the form attached as Exhibit B.

(c) If the Disclosure Dissemination Agent has not received an Annual Report and Certification by 12:00 noon on the first business day following the Annual Filing Date for the Annual Report, shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to the MSRB in substantially the form attached as Exhibit B, without reference to the anticipated filing for the annual report, accompanied by a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-1.

(d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certificate, for filing with the MSRB.

(e) The Disclosure Dissemination Agent shall:

(i) verify the filing specification of the MSRB each year prior to the Annual Filing Date;

(ii) upon receipt, promptly file each Annual Report received under Sections 2(a) and 2(b) with the MSRB;

F-4

(iii) upon receipt, promptly file each Audited Financial Statement received under Section 2(d) with the MSRB;

(iv) upon receipt, promptly file the text of each Notice Event received under Section 4(a) and 4(b)(ii) with the MSRB, identifying the Notice Event as instructed by the Issuer pursuant to Section 4(a) or 4(b)(ii) (being any of the categories set forth below) when filing pursuant to Section 4(c) of this Disclosure Agreement:

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 or events affecting the tax-exempt status of the security;”

7. “Modifications to rights of securities holders, if material;”

8. “Bond calls, if material;”

9. “Defeasances;”

10. “Release, substitution, or sale of property securing repayment of the securities, if material;”

11. “Ratings changes;”

12. “Tender offers;”

13. “Bankruptcy, insolvency, receivership or similar event of the obligated persons;”

14. “Merger, consolidation, or acquisition of the obligated person, if material;” and

15. “Appointment of a successor or additional trustee, or the change of name of a trustee, if material;”

(v) upon receipt (or irrevocable direction pursuant to Section 2(c) of this Disclosure Agreement, as applicable), promptly file a completed copy of Exhibit B to this Disclosure Agreement with the MSRB, identifying the filing as “Failure to provide annual financial information as required” when filing pursuant to Section 2(b)(ii) or Section 2(c) of this Disclosure Agreement;

(vi) upon receipt, promptly file the text of each Voluntary Event Disclosure received under Section 7(a) with the MSRB, identifying the Voluntary Event Disclosure as instructed by the Issuer pursuant to Section 7(a) (being any of the categories set forth below) when filing pursuant to Section 7(a) of this Disclosure Agreement:

1. “amendment to continuing disclosure undertaking;”

F-5

2. “change to obligated person;”

3. “notice to investors pursuant to bond documents;”

4. “certain communications from the Internal Revenue Service;”

5. “secondary market purchases;”

6. “bid for auction rte to other securities;”

7. “capital or other financing plan;”

8. “litigation/enforcement action;”

9. “change of tender agent, remarketing agent, or other on-going party;”

10. “derivative or similar transactions;” and

11. “other event-based disclosures;”

(vii) upon receipt, promptly file the text of each Voluntary Financial Disclosure received under Section 7(b) with the MSRB, identifying the Voluntary Financial Disclosure as instructed by the Issuer pursuant to Section 7(b) (being any of the categories set forth below) when filing pursuant to Section 7(b) of this Disclosure Agreement:

1. “quarterly/monthly financial information;”

2. “change is fiscal year/timing of annual disclosure;”

3. “change in accounting standard;”

4. “interim/additional financial information/operating data;”

5. “budget;”

6. “investment/debt/financial policy;”

7. “information provided to rating agency, credit/liquidity provider or other third party;”

8. “consultant reports;” and

9. “other financial/operating data;”

(viii) provide the Issuer evidence of the filings of each of the above when made, which shall be by means of the DAC system, for so long as DAC is the Disclosure Dissemination Agent under this Disclosure Agreement.

(f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year by providing written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent, Trustee (if any) and the MSRB, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year.

(g) Any Information received by the Disclosure Dissemination Agent before 6:00 p.m. Eastern time on any business day that it is required to file with the MSRB pursuant to the terms of this Disclosure Agreement and that it is accompanies by a Certification and all other information required by the terms of this Disclosure Agreement will be filed by the Disclosure Dissemination Agent with the MSRB no later than 11:59 p.m. Eastern time on the same business day; provided, however, the Disclosure Dissemination Agent shall have no liability for any delay in filing with the MSRB is such delay is caused by a Force Majeure Event

F-6

provided that the Disclosure Dissemination Agent uses reasonable efforts to make any such filing as soon as possible.

SECTION 3. Content of Annual Reports.

(a) Each Annual Report shall contain Annual Financial Information with respect to the Issuer including the information in the tables provided in “APPENDIX A and APPENDIX B” to the Official Statement.

(b) Audited Financial Statements prepared in accordance with generally accepted accounting principles (“GAAP”) as described in the Official Statement will be included in the Annual Report. If such Audited Financial Statements are unavailable at the Annual Filing Date, unaudited financial statements, prepared in accordance with GAAP as described in the Official Statement will be included in the Annual Report. Audited Financial Statements (if any) will be provided pursuant to Section 2(d).

Any or all of the items listed above may be included by specific reference from other documents, including official statements of debt issues with respect to which the Issuer is an “obligated person” (as defined by the Rule), which have been previously filed with each of the National Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Issuer will clearly identify each such document so incorporated by reference.

Any Annual Financial Information containing modified operating data or financial information is required to explain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financial information being provided.

SECTION 4. Reporting of Notice Events.

(a) The occurrence of any of the following events with respect to the Bonds constitutes a Notice Event:

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 relating to the Bonds 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 determination 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 Bond holders, 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. Rating changes;

F-7

12. Bankruptcy, insolvency, receivership or similar event of the Obligated Persons;

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, and

14. Appointment of a successor or additional trustee or the change of name of trustee, if material.

15. Notice of any failure on the part of the Issuer to meet the requirements of Section 2 hereof.

The Issuer shall, in a timely manner not in excess of ten business days after its occurrence, notify the Disclosure Dissemination Agent in writing of the occurrence of a Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c) and shall be accompanied by a Certification. Such notice or Certification shall identify the Notice Event that has occurred (which shall be any of the categories set forth in Section 2(e)(iv) of this Disclosure Agreement), include the text of the disclosure that the Issuer desires to make, contain the written authorization of the issuer for the Disclosure Dissemination Agent to disseminate such information, and identify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information (provided that such date is not later than the tenth business day after the occurrence of the Notice Event).

(b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or the Disclosure Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will within five business days of receipt of such notice but in any event not later than the tenth business day after the occurrence of the Notice Event, of the Issuer determines that a Notice Event has occurred), instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to subsection (c) of this Section 4, together with a Certification. Such Certification shall identify the Notice Event that has occurred (which shall be any of the categories set forth in section 2(e)(iv) of this Disclosure Agreement), include the text of the disclosure that the Issuer desires to make, contain the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and identify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information (provided that such date is not later than the tenth business day after the occurrence of the Notice Event).

(c) If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the MSRB in accordance with Section 2 (e)(iv) hereof.

SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure Dissemination Agent, including but not limited to Annual Reports, documents incorporated by reference to the Annual Reports, Audited Financial Statements, Notice Event notices, Failure to File Event notices, Voluntary Event Disclosures and Voluntary Financial Disclosures, the Issuer shall indicate the full name of the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information relates.

SECTION 6. Additional Disclosure Obligations. The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5

F-8

promulgated under the Securities Exchange Act of 1934, may apply to the Issuer, and that the failure of duties and responsibilities of the Disclosure Dissemination Agent under this Disclosure Agreement do not extend to providing legal advice regarding such laws. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Agreement.

SECTION 7. Voluntary Filing.

(a) The Issuer may instruct the Disclosure Dissemination Agent to file a Voluntary Event Disclosure with the MSRB from time to time pursuant to a Certification of the Disclosure Representative. Such Certification shall indentify the Voluntary Event Disclosure (which shall be any of the categories set forth in Section 2(e)(vi) of this Disclosure Agreement), include the text of the disclosure that the Issuer desires to make, contain the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate the information and indentify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in this Section 7(a) to file a Voluntary Event Disclosure, the Disclosure Dissemination Agent shall promptly file such Voluntary Event Disclosure with the MSRB in accordance with Section 2(e)(vi) hereof. This notice will be filed with a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-2.

(b) The Issuer may instruct the Disclosure Dissemination Agent to file a Voluntary Financial Disclosure with the MSRB from time to time pursuant to a Certification of the Disclosure Representative. Such Certification shall indentify the Voluntary Financial Disclosure (which shall be any of the categories set forth in Section 2(e)(vii) of this Disclosure Agreement), include the text of the disclosure that the Issuer desires to make, contain the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and indentify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in this Section 7(b) to file a Voluntary Financial Disclosure, the Disclosure Dissemination Agent shall promptly file such Voluntary Financial Disclosure with the MSRB in accordance with Section 2(e)(vii) hereof. This notice will be filed with a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-2.

(c) The parties hereto acknowledge that the Issuer is not obligated pursuant to the terms of this Disclosure Agreement to file any Voluntary Event Disclosure pursuant to Section 7(a) hereof or any Voluntary Financial Disclosure pursuant to Section 7(b) hereof.

(d) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any other information in any Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure, in addition to that required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure.

SECTION 8. Termination of Reporting Obligation. The obligations of the Issuer and the Disclosure Dissemination Agent under this Disclosure Agreement shall terminate with respect to the Bonds

F-9

upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an opinion of counsel expert in federal securities laws to the effect that continuing disclosure is no longer required.

SECTION 9. Disclosure Dissemination Agent. The Issuer has appointed Digital Assurance Certification, L.L.C. as exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer may, upon thirty days written notice to the Disclosure Dissemination Agent and the Trustee, replace or appoint a successor Disclosure Dissemination Agent. Upon termination of DAC’s services as Disclosure Dissemination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liable until payment in full for any and all sums owed and payable to the Disclosure Dissemination Agent. The Disclosure Dissemination Agent may resign at any time by providing thirty days’ prior written notice to the Issuer.

SECTION 10. Remedies in Event of Default. In the event of a failure of the Issuer or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders’ rights to enforce the provisions of this Agreement shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligation under this Disclosure Agreement. Any failure by a party to perform in accordance with this Disclosure Agreement shall not constitute a default on the Bonds or under any other document relating to the Bonds, and all rights and remedies shall be limited to those expressly stated herein.

SECTION 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent.

(a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent’s obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any information or any other information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for the Issuer’s failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Issuer at all times.

The obligations of the Issuer under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds.

(b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and the Disclosure Dissemination Agent shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The fees and reasonable expenses of such counsel shall be payable by the Issuer.

F-10

(c) All documents, reports, notice, statements, information and other materials provided to the MSRB under this Agreement shall be provided in an electronic format and accompanies by indentifying information as prescribed by the MSRB.

SECTION 12. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to both the Issuer and the Disclosure Dissemination Agent to the effect that such amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule; provided neither the Issuer nor the Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or obligations without their consent thereto.

Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement 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 by giving not less than 20 days written notice of the intent to do so together with a copy of the proposed amendment to the Issuer. No such amendment shall become effective if the Issuer shall, within 10 days following the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it objects to such amendment.

SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Trustee of the Bonds, the Disclosure Dissemination Agent, the Underwriters, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 14. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of New York (other than with respect to conflicts of laws).

SECTION 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.


F-11

The Disclosure Dissemination Agent and the Issuer have caused this Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized.

DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Disclosure Dissemination Agent

By: Name: Title:

THE CITY OF MIAMI, FLORIDA as Issuer

By: Name: ______________________________________ Title: City Manager

F-12

EXHIBIT A

NAME AND CUSIP NUMBERS OF BONDS

Name of Issuer: City of Miami, Florida Obligated Person(s): City of Miami, Florida Name of Bond Issue: Special Obligation Non-Ad Valorem Refunding Bonds Series 2011A Date of Issuance: ____________, 2011 Date of Official Statement: ____________, 2011

Maturity (February 1)

Principal Amount

Interest Rate

Yield

Price

Initial CUSIP Number

F-13

EXHIBIT B

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: City of Miami, Florida Obligated Person(s): City of Miami, Florida Name of Bond Issue: Special Obligation Non-Ad Valorem Refunding Bonds Series 2011A Date of Issuance: ____________, 2011

NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Disclosure Agreement, dated as of ___________________, between the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by ______________.

Dated: _____________

Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent, on behalf of the Issuer

__________________________________________

cc: Issuer Obligated Person


APPENDIX G

SPECIMEN MUNICIPAL BOND INSURANCE POLIC


MUNICIPAL BOND INSURANCE POLICY

ISSUER:

BONDS: $ in aggregate principal amount of

Policy No: -N

Effective Date:

Premium: $

ASSURED GUARANTY MUNICIPAL CORP. ("AGM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing the Bonds) for the Bonds, for the benefit of the Owners or, at the election of AGM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer.

On the later of the day on which such principal and interest becomes Due for Payment or the Business Day next following the Business Day on which AGM shall have received Notice of Nonpayment, AGM will disburse to or for the benefit of each Owner of a Bond the face amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by AGM, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in AGM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by AGM is incomplete, it shall be deemed not to have been received by AGM for purposes of the preceding sentence and AGM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in respect of a Bond, AGM shall become the owner of the Bond, any appurtenant coupon to the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond, to the extent of any payment by AGM hereunder. Payment by AGM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of AGM under this Policy.

Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless AGM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the

G-1

Page 2 of 2 Policy No. -N

United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee or the Paying Agent to AGM which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds.

AGM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to AGM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to AGM and shall not be deemed received until received by both and (b) all payments required to be made by AGM under this Policy may be made directly by AGM or by the Insurer's Fiscal Agent on behalf of AGM. The Insurer's Fiscal Agent is the agent of AGM only and the Insurer's Fiscal Agent shall in no event be liable to any Owner for any act of the Insurer's Fiscal Agent or any failure of AGM to deposit or cause to be deposited sufficient funds to make payments due under this Policy.

To the fullest extent permitted by applicable law, AGM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to AGM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy.

This Policy sets forth in full the undertaking of AGM, and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, (a) any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity and (b) this Policy may not be canceled or revoked. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

In witness whereof, ASSURED GUARANTY MUNICIPAL CORP. has caused this Policy to be executed on its behalf by its Authorized Officer.

ASSURED GUARANTY MUNICIPAL CORP.

By Authorized Officer

Form 500NY (5/90)

G-2



TH

E C

ITY

OF

MIA

MI, F

LO

RID

A • S

PE

CIA

L O

BL

IGA

TIO

N N

ON

-AD

VA

LO

RE

M R

EV

EN

UE

RE

FU

ND

ING

BO

ND

S, S

ER

IES

2011A