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Miscellaneous CorrespondenceWilliam R. Hough & Co. OLD PORT COVE )OE B. WISE 1212 U.S. HIGHWAY ONE P.O. BOX 14095 NORTH PALM BEACH, FLORIDA 33408 (305) 626.3911 November 3, 1978 The Honorable Chairman and Members of the Board of County Conmissioners Monroe County P.O. Box 1029 Key West, FL 33040 Gentlemen: RESIDENT MANAGER RAYMOND V. CONDON f In our capacity as Underwriter or Financial Advisor to Monroe County, we are providing you with a pamphlet which we have prepared to give you a "quick review" of certain features of the recently enacted Florida Housing Finance Authority Law and a plan for implantation. Also attached is a proposed County resolution which, upon passage, would permit us to immediately proceed to assist you in (1) determining Monroe County's shortage of affordable housing and capital for investment in such housing and (2) developing, if required, the necessary documentation to create the Housing Finance Authority. In view of the shrinkage of available private capital for new mortgage loans and the effect on future housing starts, we suggest that you may wish to schedule an information meeting in the near future to discuss this matter. We have arranged to speak to the Commission at the November 14th Commission meeting to acquaint you with all aspects of this subject. Very truly yours, R. & CO. . (YOUGH gise JW/js Enclosure cc; William E.P. Roberts., County Administrator Michael H. Cates, County Attorney J Ralph W. Mute, County Clerk STATE. COUNTY AND MUNICIPAL BONDS RESOLUTION WITNESSETH: WHEREAS, the State of Florida has recognized a critical shortage of affordable housing throughout the State for low to moderate income citizens; and WHEREAS, Chapter 78-89, Laws of Florida, provides authority for each county to create a Housing Finance Authority with powers to attract private capital to satisfy such shortage; and WHEREAS, Monroe County desires to immediately proceed to evaluate and determine its need to establish a County Housing Finance Authority; and WHEREAS, William R. Hough & Co. has considerable experience and is eminently qualified in local government financing with a long, successful record of helping Florida communities solve their financial needs; and WHEREAS, William R. Hough & Co. is thoroughly familiar with the Florida Housing Finance Authority Act and the Internal Revenue Code of 1954, as amended, which together provide a means for the County to provide financing of mortgage loans through the issuance of tax-exempt bonds; and WHEREAS, William R. Hough & Co. has the depth of expertise in this field of financing to insure the prompt implementation of the desired program; and WFE.iEAS, William R. Hough & Co. proposes to diligently and profession- ally assist the County staff and others designated to work in this program to specifically identify the shortages of housing and capital investments for such housing in Monroe County; NOW THEREFORE, be it resolved that: William R. Hough & Co. is hereby authorized to proceed to coordinate and assist in the efforts of the County agencies and others in determining the shortage of affordable housing and of capital for investment in such housing in Monroe County. It is specifically under- stood that the County shall not be financially or other- wise obligated to William R. Hough & Co. for its assistance in this undertaking. William R Hough & Co. HOUSING FINANCE AUTHORITY PLAN William R. Hough & Co. Clients Served by William R. plough & Co. State of Florida Acme Drainage District Alachua County Baker County Board of Public Instruction City of Belle Glade City of Boynton Beach City of Bradenton Brevard County City of Brooksville Canaveral Port Authority City of Cape Canaveral City of Cape Coral Charlotte County Charlotte County Development Authority Citrus County Hospital Board City of Clearwater Collier County Dade County Escambia County City of Fort Meade City of Fort Pierce Fort Pierce Hospital Authority Fort Pierce Utility Commission City of Gainesville Hamilton County School Board Hamilton County Hospital Board Hernando County City of Holly Hill City of Homestead Indian River County City of Jacksonville Jacksonville Electric Authority Jackson County School Board City of Kissimmee City of Lake Butler City of Lake Wales Leon County Levy County School Board Town of Longboat Key Loxahatchee River Environmental Control District Manatee County Port City of Margate Marion County Hospital District Martin County Board of Public Instruction Martin County City of Miami New Smyrna Beach Utility Authority AL (Continued on back page) William R. Hough & Co. Housing Finance Authority Plan — An Overview Today one of the most serious problems confronting Florida communities is the critical shortage of housing at prices that our citizens can afford. Every day more and more Floridians are finding that they have been pr1ced out of the single-family home market, largely due to high interest rates on mortgage loans. The problem is not limited to the less fortunate, low- income groups. According to data released by the Florida State Department of Community Affairs, over seventy percent of all Floridians are unable to purchase or rent housing without spending in excess of twenty-five percent of their total family income. The problem is particularly acute for young and elderly families in low to moderate income groups. THE ACT: Recognizing the critical shortage of affordable housing units, the Florida Legislature passed the Florida Housing Finance Authority Law in July, 1978 (the Act). Under the terms of the Act, the county can issue tax-free mortgage revenue bonds secured by new conventional mortgage loans purchased from a lending institution. The Bonds would not be payable from general revenues of the county but would be paid from moneys derived from principal and interest payments on the mortgage loans. All accounting functions for the mortgage loans (purchased by the county from bond proceeds) will be carried out by the lending institution and by the Trustee acting on behalf of the bondholders. The overall concept of the Act is to provide financing so as to enable the lending institutions to make certain mortgage loans at interest rates lower than the prevailing conventional market. This is made possible by financing the eligible mortgage loans from proceeds derived from the Authority's sale of tax-exempt bonds. Through this financing mechanism, many prospective home purchasers that are not presently eligible for mortgage loans could be brought into the "zone of qualification". Thus the Act was designed to provide a county with a means to aid in the solution of a portion of the local housing problem. It is envisioned that the program will be directed to those families and individuals whose earnings are above the eligibility requirments of Federal programs, but are insufficient to qualify an applicant for conventional financing. The program can be designed to provide sufficient flexibility to meet the particular housing needs of each county. The Florida Housing Finance Authority Law is one of the most important housing acts ever passed in Florida. It will allow many Floridians, who might not otherwise have the opportunity to realize the dream and pride of home ownership. It will help to stabilize the local construction industry by providing a new source of mortgage money. The Act will also provide direct benefits to the county via an increased ad valorem tax base and a more stable labor force. William K Hough & Co. IMPLEMENTATION: The program is not difficult to implement. It will require the services of a firm thoroughly familiar with the Florida municipal bond market and the real estate and mortgage markets. William R. Hough & Co. is prepared to assist you in this program. Our Company was formed in 1962 with the objective of providing complete underwriting and consulting services to Florida local governmental units. Each year since 1966, we have been the number one underwriter of Florida municipal bonds. Our depth of personnel including carefully selected individuals from various fields of expertise needed for this problem, our team approach, our position of leadership in the marketing of Florida bonds, the respect for our judgmant among insti- tutional investors which we enjoy, all contribute to our ability to get the job done on a basis consistent with the needs of your County. Housing Finance Authority Act PURPOSE: The Florida Housing Finance Authority Law was enacted, effective July 1, 1978, to help alleviate "a shortage of housing available at prices or rentals which many persons and families can afford and a shortage of capital for investment in such housing." CREATION: Each county may create a separate public body, corporate and politic, to be known as the "Housing Finance Authority" of the county for which it was created. The Board of County Commissioners will appoint five members, of which not less than three shall be knowledgeable in one of the following fields: labor, finance or ccmnexce. The County may also change the structure, organization, programs or activities of any housing authority, including the power to terminate such authority subject to any contracts in force. . M. (1) "To sue and be sued, to have a seal and to alter the same at pleasure, to have perpetual succession, to make and execute contracts and other instruments necessary or convenient to the exercise of the powers of the Housing Finance Authority, and to make from time to time, amend and repeal by-laws, rules, regulations, not inconsistent with this Act, to carry into effect the powers and purposes of the Housing Finance Authority." (2) To purchase and make commitments to purchase or to make loans for such purpose, and to take assignments of, from lending institutions acting as a principal or as an agent of the Housing Finance Authority, mortgage loans and promissory notes accompanying such mortgage loans, including federally insured mortgage loans or participations with lending insti- tutions in such promissory rotes and mortgage loans for the construction, purchase, reconstruction, or rehabilitation of the qualifying housing. Wiiliam ri.hough & Co. Description of Functions to be Performed 1. DETERMINATION OF COUNTY HOUSING NEEDS The most important step in developing a comprehensive housing program is to identify those housing demands that are not being satisfied by existing conventional or government -backed financing programs. Discussions will be held with local realtors, builders, county hortsing officials, and lending institutions to determine the areas of greatest need. In addition, population trends and demographic characteristics of county residents will be reviewed to facilitate projections of future demand. The data collected will be analyzed and a report will be submitted to the Board of County Commissioners will full recomneld- ations for a Housing Assistance Program. The program will include specific recommendations on the types of loans, income and other eligibility requirements for program participants, and the nature and term of the Loan Purchase Agreement and Service Contracts with the lending institutions. A detailed financing plan will also be presented to the Authority. 2. ORDINANCE TO CREATE HOUSING FINANCE AUTHORITY Once the specific county housing problem areas have been identified, the County Commission may create, by ordinance, a separate public body, corporate and politic, to be known as the "Housing Finance Authority" of the county for which it is created to carry out only those powers granted in the Housing Finance Authority Law. 3. APPOINTMENT OF HOUSING FINANCE AUTHORITY MEMBERS Each Housing Finance Authority shall be composed of five mamters appointed by the County Commission. Not less than three of the members shall be knowledgeable in one of the following fields: finance, labor or commerce. The County Commission may, at any time during the existence of the Authority, change the structure, organi- zation, program, or activities of any Housing Finance Authority, subject to any limitation on the in-pairment of contracts entered into by such Authority. 4. BOND RESOLUTION IS PASSED Once the program terms and conditions have been defined and a recommended financing plan has been approved, the bond resolution is passed by the Housing Finance Authority. In the event that the Authority members have not been appointed at this time, the County Commission would act on their behalf. William R. Hough & Co. 5. BOND VALIDATION PROCEEDINGS ARE COMPLETED The Authority files suit for validaton of the bonds in the Circuit Court with a hearing date to be set not less than twenty-one days from the date the suit is filed. Assuming no appeal is taken to the validation proceedings during the thirty -day appeal period, the bonds may be, delivered to the underwriters upon the expiration of the thirty -day appeal period. 6. PREPARATION OF OFFICIAL STATEMENT In coordination with the Authority, William R. Hough & Co. will prepare, print, and distribute to prospective bond buyers, the Official Statement which will form the basis of the bond offering. 7. RATING AGENCY PRESENTATION Confer by direct personal contact with the municipal rating services and provide these services with complete information regarding the bonds the housing assistance program, pertaining to the county and th e If engaged as underwriter, William R. Hough & Co. will, as "Senior Manager" of an underwriting syndicate, submit an offer to market the bonds through such syndicate in accordance with the approved financing plan for the mortgage revenue bond issue. The interest rates which the mortgage revenue bonds will bear will be determined by the market at the time a purchase offer is made and must be in line with rates prevailing at the time for similar securities. The Authority will have the opportunity to assure itself as to the appropriateness of these interest rates prior to entering into a contract for the sale of the bonds. William R. Hough & Co. provides financial consulting services also, and, should the Authority wish, William R. Hough & Co. would be pleased to act as advisor to the Authority and assist in the structuring and preparation of the bonds for the market. • It � P • - � • - � 'JIB : • � ' S•1M`J19_I� After the bonds have been purchased by the underwriters, the bond proceeds will be escrowed until individual loans are purchased by the Authority from the savings and loan associations or other lending insti- tutions which have agreed to supply the required mortgages. The details and conditions regarding the mortgages to be purchased will be specified in detail in the Loan Purchase Agreement and Loan Service Contract with the participating lending institutions. The lending institutions will be given a specific time period in which to originate and deliver the mortgages. LUilliam R. Hough & Co. working with William R. HOLTh & CO. William R. Hough & Co. was founded in 1962 with a single objective to provide complete underwriting and consulting services to Florida muni- cipalities. Each year since 1966, we have been the NUMBER ONE managing underwriter of Florida municipal bonds. In 1977, William R. Hough & Co. acted as manager or co -manager of 47 Florida bond issues and participated as underwriter in 11 others. These issues constituted 42.96% of the issues marketed in Florida and 44.37% of the volume. We know the market. We have an intimate knowledge of bond prices and supply and demand factors. Our experience and expertise will help insure the County the lowest possible interest rate on their imrtgage revenue bonds. The geographic distribution of William R. Hough & Co. personnel throughout Florida, both in depth and in quality, assures you the immediate availa- bility of professional assistance to you in your housing program. Our 1977 Annual Report, included herein, gives resumes of our key personnel. It can be seen that by careful selection, we have a well-balanced team with formal training and expertise in the various facets of tax-exempt finance. The services which our employment will bring to you will include anong other things our working with you and your staff as follows: (1) Determining the County housing needs and structuring of the housing assistance program including the establishment of criteria (2) Drafting the ordinance creating the Housing Finance Authority (3) Preparing the bond resolution (4) Structuring the Loan Purchase Agreements, Loan Service Agreements and establishing the details for the purchase of mortgages (5) Assisting in the bond validation (6) Preparing and distributing the Official Statement for the bond offering (7) Preparing for and presenting the bonds to the bond rating agencies (8) Marketing assistance either as senior underwriter or as financial advisor on the best interest rate terms available in the bond market for the Authority's bonds. William R. Hough & Co. is prepared to assist you in your rmrtgage revenue issue. We would welcome the opportunity to meet with you at your convenience to discuss the program in more detail. Please feel free to contact any of our offices shown on the following page. a WiLLIAM R. EOUGH & CO. STATE, COUNTY AND MUNICIPAL BONDS Eleven 4th Street North, St. Petersburg, Florida 33731 Telephone (813) 823-8100 23 West Church Street, Orlando, Florida 32802 Telephone (305) 841-1685 1340 Atlantic Bank Building, Jacksonville, Florida 32202 Telephone (904) 355-6691 1212 U.S. Highway One, North Palm Beach, Florida 33408 Telephone (305) 626-3911 509 Mayflower Lane, Fort Pierce, Florida 33450 Telephone (305) 461-2588 William R. Hough & Co. Clients Served by William R. Hough & Co. cont'd. o a City of North Lauderdale City of North Miami City of Ocala City of Ocean Ridge Okaloosa County Orange County Civic Facilities Authority City of Orlando Orlando Utilities Commission Osceola County Osceola County School Board City of Pahokee Pasco County Pasco County School Board Pinellas County City of Pinellas Park City of Plantation City of Port Richey City of Riviera Beach Royal Palm Village City of St. Augustine City of St. Cloud St. John's County St. Lucie County St. Lucie County Board of Public Instruction City of St. Petersburg City of St. Petersburg Beach City of Safety Harbor City of Sarasota Sarasota County Sarasota -Manatee Airport Authority City of Sebring Seminole County Seminole Drainage District Siesta Key Water Authority City of South Pasadena Sumter County Board of Public Instruction City of Tallahassee Tampa Bay Regional Planning Council City of Tarpon Springs Village of Tequesta City of Treasure Island University of Miami City of Venice Volusia County Educational Facilities Authority City of Williston City of Winter Haven City of Winter Park INVESTMENT BANKING Who leads in municipal underwriting Despite the overall drop in public financing so far this year, a number of firms have shown hefty gains in 11's rankings. As it did during 1977, Goldman Sachs easily outdistanced the field in negotiated municipal underwritings during the first half of 1978. It ranked first by each of the three different measurement methods: Institutional Investor's bonus -credit -to - lead -manager method, the full -credit -to - lead -manager method and the full - credit -to -each -manager method. What's just as significant is that it did so in a gen- erally declining market. Amid a slowdown in overall underwriting volume, Goldman participated in only 36 negotiated deals during the first half of the year compared with III for all of 1977. Second -ranked Blyth Eastman Dillon was in on just 29 deals during the first half against 84 last year. And so it is all up and down the list, with underwriting volume down because of rising interest rates, tighter government re- strictions on certain kinds of offerings and less buying by some large institutions. Goldman's strength, as the tables on the following pages indicate, was in the pollution control area, where it ranked first; in the hospital sector, where it moved from second to first; and in the housing field, where it jumped from fifth to second place. Blyth nailed down second place in total un- derwritings under two of the three mea- surement methods on the strength of its first -place finish in the big transportation sector. And Kidder Peabody earned third place in total muni underwritings under two of three measurement methods thanks to a strong showing across the board, particu- larly in education and public power issues. First Boston, too, achieved a solid overall performance, with its chief strength in the public power area. Notwithstanding the drop in public financings this year, there were some firms that scored hefty gains in the first-half rank- ings. E.F. Hutton, for example, rose from ninth to fifth in the overall standings using the bonus -credit method. Its particular strength was in water and sewer issues, where it ranked first using the bonus -credit measurement method. Resisting the vol- ume downtrend, Hutton participated in some 22 negotiated deals during the first six months of this year compared with 42 for all of last year. And another big gainer, Paine Webber, was in on 21 negotiated deals during the first half of the year against 32 for the full year 1977. Thanks to that volume, it was able to rise several notches in the overall standings according to all three measurement methods. Public financing is an underwriting market where some of the regional firms often rub shoulders with the big national firms — generally because of the localized nature of the deals. Thus, firms such as Wm. R. Hough, Butcher & Singer and Alex. Brown manage to rank well up among the top 25 municipal underwriters in the table below. On the following pages are the market -by -market rankings of the public finance underwriters, together with their standings at the end of 1977 and other data regarding their deals this year. The standings, ranked by R's bonus -credit -to -lead -manager formulal- 1st 1/2 1977 1978 $ Volume # of (millions) issues 1 1 Goldman Sachs $783.0 36 2 2 Blyth Eastman Dillon 594.8 29 3 3 Kidder Peabody 498.4 34 6 4 First Boston 440.4 24 9 5 E. F. Hutton 398.2 22 4 6 Merrill Lynch White Weld 389.5 31 5 7 Smith Barney, Harris Upham 376.1 17 12 8 Paine Webber 327.9 21 7 9 Salomon Brothers 290.8 18 14 10 Rothschild, Unterberg, Towbin 237.5 20 * 11 Lehman Kuhn Loeb 237.4 9 19 12 Wm. R. Hough 236.4 11 16 13 Butcher & Singer 221.6 28 — 14 Wertheim 216.4 2 21 15 Alex. Brown & Sons 200.8 6 11 16 Bache 180.2 15 ** 17 Dean Witter Reynolds 165.0 17 *** 18 Loeb Rhoades Hornblower 164.2 12 — 19 Matthews & Wright 157.6 9 — 20 Baker Watts 138.8 4 — 21 American Securities 137.1 11 — 22 Ziegler Securities 122.8 12 10 23 John Nuveen 120.5 12 25 24 Miller & Schroeder 119.2 7 — 25 Dain, Kalman & Quail 117.0 11 * 1977 Rankings: Lehman Brothers 15, Kuhn Loeb 17 ** 1977 Rankings: Dean Witter 18, Reynolds Securities-- 1977 Rankings: Loeb Rhoades 23, Hornblower Weeks-- t These leadership rankings are derived using Institutional Investor's bonus -credit -to -lead -manager formula. Each co -manager in an underwriting is given a proportionate share of the credit, but the lead manager (the firm running the books) is given a double share. For example, in a $100 million deal with one lead manager and three co -managers, the total is divided into five equal shares of $20 million. Each co -manager is credited with one share, while the lead manager, in recognition of its larger contribution to the deal, is given two shares, totaling $40 million. Reprinted from the September issue of Institutional Investor. BONUS CREDIT TO LEAD MANAGER FULL CREDIT TO LEAD MANAGER FULL CREDIT TO EACH MANAGER 1st'/a $ Volume # of 1st Ih $ Volume # of 1st 1/2 $ Volume # of 1977 1978 (millions) issues 1977 1978 (millions) issues 1977 1978 (millions) issues Total public finance issues 1 1 Goldman Sachs $783.0 36 1 1 Goldman Sachs $1,249.0 26 2 1 Goldman Sachs $2,258.2 2 2 Blyth Eastman Dillon 594.8 29 2 2 First Boston 817.6 15 4 2 Blyth Eastman Dillon 2,074.1 3 3 Kidder Peabody 498.4 34 6 3 Kidder Peabody 633.9 19 1 3 Merrill Lynch White Weld 1,969.5 6 4 First Boston 440.4 24 3 4 Blyth Eastman Dillon 633.6 12 7 4 Salomon Brothers 1,790.6 9 5 E. F. Hutton 398.2 22 4 5 Smith Barney, Harris Upham 611.2 14 3 5 Kidder Peabody 1,606.6 4 6 Merrill Lynch White Weld 389.5 31 9 6 Paine Webber 532.3 11 6 6 First Boston 1,450.5 5 7 Smith Barney, Harris Upham 376.1 17 7 7 E. F. Hutton 471.9 12 9 7 E. F. Hutton 1,424.4 12 8 Paine Webber 327.9 21 14 8 Wm. R. Hough 389.1 7 8 8 Bache 1,343.0 7 9 Salomon Brothers 290.8 18 - 9 Wertheim 354.9 1 9 Lehman Brothers Kuhn Loeb 1,192.8 14 10 Rothschild, Unterberg, Tow. 237.5 20 * 10 Lehman Brothers Kuhn Loeb 306.6 3 14 10 Paine Webber 987.3 11 Lehman Brothers Kuhn Loeb 237.4 9 18 11 Rothschild, Unterberg, Tow. 273.1 14 ** 11 Loeb Rhoades Hornblower 855.9 19 12 Wm. R. Hough 236.4 11 10 12 Merrill Lynch White Weld 257.1 7 5 12 Smith Barney, Harris Upham 676.2 16 13 Butcher & Singer 221.6 28 5 13 Salomon Brothers 233.6 6 -- 13 Butcher & Singer 615.1 - 14 Wertheim 216.4 2 ** 14 Loeb Rhoades Hornblower 223.4 3 - 14 Alex. Brown & Sons 608.0 21 15 Alex. Brown & Sons 200.8 6 *** 15 Dean Witter Reynolds 219.1 9 - 15 Baker, Watts 555.3 11 16 Bache 180.2 15 16 16 Butcher & Singer 198.8 16 13 16 Citicorp 553.2 •* 17 Dean Witter Reynolds 165.0 17 15 17 Alex. Brown & Sons 172.2 3 11 Morgan Guaranty 553.2 *** 18 Loeb Rhoades Hornblower 164.2 12 - 18 Matthews & Wright 162.0 8 - 18 Wm. R. Hough 548.7 - 19 Matthews & Wright 157.6 9 - 19 American Securities 146.0 8 - 19 Wertheim 510.6 -- 20 Baker Watts 138.8 4 23 20 Ziegler Securities 129.4 8 *** 20 Dean Witter Reynolds 508.7 21 American Securities 137.1 11 - 21 Morgan Guaranty 110.0 1 19 21 Bank of America 498.9 - 12 Ziegler Securities 122.8 12 11 22 John Nuveen 108.9 5 17 22 Rothschild, Unterberg, Tow. 482.7 10 23 John Nuveen 120.5 12 22 23 Miller & Schroeder 107.5 4 - 23 Piper, !affray & Hopwood 480.5 25 24 Miller & Schroeder 119.2 7 24 Elkins, Stroud, Suplee 103.8 5 - 24 Dain, Kalman & Quail 455.2 - 25 Dain, Kalman & Quail 117.0 11 - 25 Bache 100.0 1 25 Bankers Trust 443.2 * 1977 Rankings: Lehman Brothers 15, Kuhn Loeb 17 * 1977 Rankings: Lehman Brothers 12, Kuhn Loeb 20 * 1977 Rankings: Lehman Brothers--, Kuhn Loeb--, ** 1977 Rankings: Dean Witter 18, Reynolds Securities-- ** 1977 Rankings: Loeb Rhoades 21, Hornblower Weeks-- ** 1977 Rankings: Loeb Rhoades--, Hornblower Weeks-- *** 1977 Rankings: Loeb Rhoades 23, Hornblower Weeks-- *** 1977 Rankings: Dean Witter 19, Reynolds Securities-- *** 1977 Rankings: Dean Witter 22, Reynolds Securities -- Transportation 1 Blyth Eastman Diffon $267.7 5 1 Goldman Sachs $504.2 3 1 Blyth Eastman Dillon $857.7 5 2 Wertheim 216.4 2 1 Wertheim 354.9 1 2 Goldman Sachs 556.4 4 3 Alex. Brown &Sons 166.6 2 3 Blyth Eastman Dillon 304.5 2 3 Merrill Lynch White Weld 553.2 3 4 Goldman Sachs 137.0 4 4 Alex. Brown & Sons 155.7 1 4 Alex. Brown & Sons 510.6 2 5 Baker Watts 127.7 2 5 Smith Barney, Harris Upham 80.0 1 Wertheim 510.6 2 6 First Kentucky Securities 93.5 1 6 Rothschild, Unterberg, Tow. 52.2 1 Baker Watts 510.6 2 7 Merrill Lynch White Weld 56.7 3 7 Wheat, First Securities 10.3 1 7 Salomon Brothers 495.4 2 8 Salomon Brothers 50.7 2 8 Citicorp 443.2 1 9 Citicorp 40.3 1 Bank of America 443.2 1 Bank of America 40.3 1 Bankers Trust 443.2 1 Bankers Trust 40.3 1 Lehman Brothers Kuhn Loeb 443.2 1 Lehman Brothers Kuhn Loeb 40.3 1 Bache 443.2 1 Bache 40.3 1 Morgan Guaranty 443.2 1 Morgan Guaranty 40.3 1 14 First Kentucky Securities 280.5 1 15 Rothschild, Unterberg, Tow. 20.9 1 15 Kidder Peabody 132.2 2 16 Kidder Peabody 19.3 2 16 Smith Barney, Harris Upham 80.0 1 17 Smith Barney, Harris Upham 17.8 1 Janney Montgomery Scott 80.0 1 18 Janney Montgomery Scott 8.9 1 Butcher & Singer 80.0 1 ' Butcher & Singer 8.9 1 Elkins, Stroud, Suplee 80.0 1 Elkins, Stroud Suplee 8.9 1 American Securities 80.0 1 American Securities 8.9 1 21 Rothschild Unterberg, Tow. 52.2 1 22 Wheat, First Securities 6.9 1 22 Wheat, First Securities 10.3 1 23 Craigie 3.4 1 Craigie 10.3 1 Housing 1 1 Paine Webber $239.4 11 1 1 Paine Webber $458.4 6 2 1 Paine Webber $698.0 11 5 2 Goldman Sachs 218.1 7 3 2 Goldman Sachs 285.9 4 5 2 Goldman Sachs 600.8 7 13 3 Matthews & Wright 134.3 7 2 3 Salomon Brothers 184.1 5 12 3 Dain, Kalman & Quail 369.4 5 2 4 Salomon Brothers 106.2 8 4 4 Blyth Eastman Dillon 144.0 3 12 Piper, Jaffray & Hopwood 369.4 5 6 5 Blyth Eastman Dillon 91.7 6 8 5 Matthews & Wright 132.1 6 5 Dean Witter Reynolds 324.8 6 * 6 Dean Witter Reynolds 82.7 6 5 6 Smith Barney, Harris Upham 122.9 2 1 6 Salomon Brothers 315.7 8 3 7 Kidder Peabody 78.9 3 7 Dean Witter Reynolds 102.2 2 6 7 Blyth Eastman Dillon 311.6 6 9 8 Dain, Kalman & Quail 78.3 5 7 8 Kidder Peabody 95.1 1 11 8 First Boston 295.3 7 9 Piper, !affray & Hopwood 78.3 5 11 9 E. F. Hutton 85.0 2 14 9 E. F. Hutton 250.2 5 it 10 E. F. Hutton 76.3 5 14 10 Bank of America 50.0 1 3 10 Kidder Peabody 203.5 3 7 11 First Boston 68.6 7 10 11 First Boston 18.9 2 - 11 Matthews & Wright 193.3 7 4 12 Smith Barney, Harris Upham 46.9 3 - 12 Miller & Schroeder 14.0 1 - 12 Burrows Smith 183.6 2 - 13 Burrows Smith 42.4 2 10 13 Bar:he 163.9 3 24 14 Carolan 31.7 1 16 14 John Nuveen 157.2 3 17 15 John Nuveen 31.4 3 4 15 Smith Barney, Harris Upham 151.9 3 12 16 Rothschild Unterberg, Tow. 29.6 2 8 16 Rothschild, Unterberg, Tow. 144.7 2 17 Bache 29.3 3 7 17 Merrill Lynch White Weld 102.2 2 18 Young Moore 20.7 1 - 18 Carolan 95.1 1 18 19 Merrill Lynch White Weld 20.4 2 - 19 J. C. Bradford 70.0 1 9 20 Bank of America 20.0 1 - First Tennessee 70.0 1 21 Citizens Fidelity 15.0 1 - Cherokee Securities 70.0 1 First Kentucky Securities 15.0 1 - UMIC 70.0 1 23 Miller & Schroeder 14.0 1 - 23 Young Moore 62.1 1 24 Bank of New Mexico 12.2 1 15 24 First Nat'l State Bank of NJ 61.7 1 25 First of Michigan 11.0 1 - 25 Bank of New Mexico 61.2 1 `* 1977 Rankings: Dean Witter 16, Reynolds Securities 20 * 1977 Rankings: Dean Witter 9, Reynolds Securities-- * 1977 Rankings: Dean Witter 21, Reynolds Securities 18 BONUS CREDIT TO LEAD MANAGER FULL CREDIT TO LEAD MANAGER FULL CREDIT TO EACH MANAGER 1st 1/2 $ Volume # of 1st'/2 $ Volume # of 1st 1/2 Volume # of 1977 1978 (millions) issues 1977 1978 (millions) issues 1911 1918 (millions) issues Hospitals 2 1 Goldman Sachs $131.3 10 2 1 Goldman Sachs $219.2 8 3 1 Goldman Sachs $283.0 10 6 2 Miller & Schroeder 105.2 6 5 2 Smith Barney, Harris Upham 98.8 2 1 2 Merrill lynch White Weld 195.0 7 9 3 Ziegler Securities 89.0 9 7 3 Miller & Schroeder 93.5 3 14 3 Ziegler Securities 141.9 9 7 4 Smith Barney, Harris Upham 65.9 2 10 4 Ziegler Securities 93.4 6 16 4 Miller & Schroeder 134.6 6 1 5 Kidder Peabody 53.5 4 1 5 Kidder Peabody 79S 3 4 5 John Nuveen 107.7 5 4 6 Merrill Lynch White Weld 48.5 7 13 6 Paine Webber 62.8 4 10 6 Smith Barney, Harris Upham 98.8 2 - 7 Henderson Few 42.5 5 9 7 Merrill Lynch White Weld 57.5 2 2 7 Kidder Peabody 95.3 4 14 8 Paine Webber 33.0 5 - 8 First Boston 47.2 3 12 8 Alex. Brown & Sons 85.5 3 9 First Boston 31.5 3 - 9 E. F. Hutton 45.5 3 5 9 Blyth Eastman Dillon 84.9 4 10 American Securities 30.9 3 - 10 Henderson Few 41.8 4 15 10 Paine Webber 77.2 5 3 11 John Nuveen 30.6 5 - 11 Donaldson, Lufkin, Jenrette 31.9 1 - 11 E. F. Hutton 75.7 4 18 12 Alex. Brown & Sons 30.3 3 8 12 Blyth Eastman Dillon 31.8 1 24 12 Piper, Jaffray & Hopwood 68.7 4 5 13 Blyth Eastman Dillon 30.2 4 - 13 Boettcher 30.9 3 9 13 Butcher & Singer 64.6 3 - 14 J. C. Bradford 30.0 2 - 14 J. C. Bradford 30.0 2 - 14 Henderson Few 64.2 5 - 15 E. F. Hutton 28.9 4 3 15 John Nuveen 28.4 2 - 15 Seasongood & Mayer 63.2 1 10 16 Butcher & Singer 23.8 3 - American Securities 28.4 2 - 16 Janney Montgomery Scott 59.6 2 24 17 Piper, Jaffray & Hopwood 22.6 4 - 17 Wm. Sword 21.7 1 17 Loeb Rhoades Homblower 50.1 2 - 18 Wm. Sword 21.7 1 - 18 Kirchner Moore 21.6 1 6 18 Wauterlek & Brown 49.1 2 - 19 Boettcher 20.7 3 6 19 Butcher & Singer 18.4 1 - 19 First Boston 47.2 3 - 20 Bain, Kalman & Quail 18.2 3 - 20 Bain, Kalman & Quail 17.5 1 - Burrows Smith 47.2 3 - 21 Donaldson, Lufkin, Jenrette 16.0 1 - 21 Cumberland Securities 16.9 1 - 21 B. C. Ziegler 47.1 2 - 22 Seasongood & Mayer 15.8 1 11 22 Alex, Brown & Sons 16.5 2 21 22 Dain, Kalman & Quail 45.2 3 13 B. C. Ziegler 15.7 2 - 23 Stifel Nicolaus 14.4 1 7 23 Herbert J. Sims 43.8 3 Burrows Smith 15.7 3 - Allen C. Ewing 14.4 1 - 24 Stifel Nicolaus 41.7 2 - 25 Janney Montgomery Scott 13.9 2 - UMIC 14.4 1 - 25 Hazlett, Burt & Watson 40.2 2 - EhrBch-Bober 14.4 2 * 1977 Rankings: Loeb Rhoades--, Hornblower Weeks 25 Education 2 1 Rothschild, Unterberg, Towbin 8 2 Butcher & Singer 120.8 16 11 2 Butcher & Singer 120.9 10 4 2 Rothschild, Unterberg, Tow. 196.6 12 9 3 Kidder Peabody 114.3 9 12 3 Kidder Peabody 113.7 7 6 3 Moore, Leonard & Lynch 186.4 13 6 4 Moore, Leonard & lynch 79.2 13 10 4 Moore, Leonard & Lynch 63.4 7 11 4 Kidder Peabody 149.9 9 3 5 Arthurs Lestrange & Short 43.6 7 * 5 Dean Witter Reynolds 54.9 2 - 5 Dolphin & Bradbury 87.6 9 - 6 Dolphin & Bradbury 41.1 9 21 6 Parker/Hunter 48.0 3 7 6 Arthurs Lestrange & Short 85.0 7 - 7 Parker/Hunter 38.7 4 - 7 Elkins, Stroud, Suplee 46.3 2 * 7 Dean Witter Reynolds 70.0 3 8 Dean Witter Reynolds 34.8 3 7 8 Continental Illinois 43.8 1 - 8 Parker/Hunter 66.1 4 9 Elkins, Stroud, Suplee 33.0 3 3 9 Arthurs Lestrange & Short 40.7 3 - 9 Bache 61.4 2 25 10 Cunningham Schmertz 27.5 2 24 10 Dolphin & Bradbury 39.6 3 - 10 Elkins, Stroud, Suplee 60.8 3 11 First Natl Bank of Chicago 23.8 2 - 11 Charles G. Peelor 30.0 1 - 11 First Nab Bank of Chicago 58.8 2 12 12 Continental Illinois 17.5 1 - 12 Cunningham Schmertz 27.5 2 13 12 Merrill Lynch White Weld 44.3 13 13 Henry Fisher Munis. 14.7 2 14 13 Henry Fisher Munis. 26.5 2 15 13 Continental Illinois 43.8 - Rauscher Pierce Securities 14.7 1 - 14 Natl Central Bank, Lancaster 21.9 3 - Northern Trust 43.8 - 15 Bache 13.9 2 - 15 Wachovia Banc & Trust 19.0 1 - Harris Trust & Savings Bank 43.8 - 16 Russell Rea Bleir & Zappalla 13.2 3 - 16 Craigie 16.5 1 - 16 Russell Rea Bleir & Zappalla 43.5 3 - 17 Nati Central Bank, Lancaster 12.9 3 - 17 First Nall Bank of Chicago 15.0 1 -- 17 Henry/Kearns Municipals 42.1 2 - 18 McDonald 12.6 1 - 18 Rauscher Pierce Securities 14.7 1 - 18 A. E. Masten 38.0 2 - 19 A. E. Masten 12.3 2 18 19 Boettcher 13.6 2 - 19 Babbitt Meyers 34.5 3 18 20 Merrill Lynch White Weld 12.0 2 - 20 McDonald 12.6 1 - 20 Carolan 31.8 2 14 21 Boettcher 11.1 2 - 21 Shearson Hayden Stone 11.6 2 - 11 Warren W. York 30.2 2 - 21 Craigie 11.0 1 - 22 E. F. Hutton 10.5 1 - 22 Charles G. Peelor 30.0 1 23 Carolan 10.6 2 - 23 American Securities 9.7 1 - Hefren-Tillotson 30.0 1 24 Warren W. York 10.1 2 - 24 Foster & Marshall 9.2 1 - 24 Paine Webber 28.1 1 23 25 Babbitt Meyers 10.0 3 6 25 Kirchner Moore 9.1 1 - 25 Cunningham Schmertz 27.5 2 * 1977 Rankings: Dean Witter--, Reynolds Securities-- * 1977 Rankings: Dean Witter--, Reynolds Securities-- * 1977 Rankings: Dean Witter 22, Reynolds Securities -- Public power 2 1 First Boston $131.8 4 1 1 First Boston $525.0 3 1 1 First Boston $650.0 4 * 2 Lehman Brothers Kuhn Loeb 111.6 3 2 Lehman Brothers Kuhn Loeb 219.7 2 2 Lehman Brothers Kuhn Loeb 569.7 3 6 3 Kidder Peabody 74.9 3 8 3 Wm. R. Hough 205.0 1 13 3 E. F. Hutton 555.0 2 17 4 Wm. R. Haugh 68.3 1 3 4 Kidder Peabody 125.0 1 8 4 Salomon Brothers 525.0 3 8 5 Goldman Sachs 66.3 4 13 5 Goldman Sachs 35.3 2 4 5 Goldman Sachs 510.3 4 9 6 E. F. Hutton 66.0 2 4 6 Smith Barney, Harris Upham 31.5 2 9 6 Kidder Peabody 485.0 3 19 7 Robinson -Humphrey Co. 57.0 3 12 7 John Nuveen 24.4 1 17 7 Robinson -Humphrey Co. 375.0 3 11 8 Salomon Brothers 55.5 3 - 8 Stifel Nicolaus 15.8 1 21 8 Dillon Read 369.3 2 5 9 White Weld 49.3 3 ** 9 Loeb Rhoades Hornblower 366.0 2 10 10 Bache 47.9 5 20 10 Lazard Freres 350.0 1 7 11 Merrill Lynch White Weld 45.9 4 23 W. H. Morton 350.0 1 18 12 Dillon Read 36.6 2 5 12 Bache 326.0 5 - 13 Leedy, Wheeler & Alleman 34.2 1 3 13 Merrill Lynch White Weld 310.0 4 Leedy Corp. 34.2 1 6 14 White Weld 294.7 3 Southeastern Muni. Bonds 34.2 1 24 15 Wm. R. Hough 205.0 1 ** 16 Loeb Rhoades Hornblower 33.8 2 - Leedy, Wheeler & Alleman 205.0 1 3 17 Blyth Eastman Dillon 33.3 1 - Leedy Corp. 205.0 1 Drexel Burnham Lambert 33.3 1 - Southeastern Muni. Bands 205.0 1 21 19 Lazard Freres 31.8 1 2 19 Blyth Eastman Dillon 200.0 1 25 W. H. Morton 31.8 1 - Drexel Burnham Lambert 200.0 1 1 21 Smith Barney, Harris Upham 26.4 3 17 21 Johnson, Lane, Space, Smith 175.0 2 19 22 Johnson, Lane, Space, Smith 23.7 2 7 22 Smith Bamey, Harris Upham 47.5 3 16 23 John Nuveen 17.7 2 16 23 John Nuveen 34.4 2 24 Stifel Nicolaus 15.8 1 - 24 Seattle -Northwest Sec. 24.4 1 - 25 Seattle -Northwest Sec. 8.1 1 - 25 Stephens 19.3 1 * 1977 Rankings: Lehman Brothers 4, Kuhn Loeb 15 * 1977 Rankings: Lehman Brothers 5, Kuhn Loeb-- * 1977 Rankings: Lehman Brothers 14, Kuhn Loeb 15 ** 1977 Rankings: Loeb Rhoades--, Hornblower Weeks 23 ** 1977 Rankings: Loeb Rhoades--, Hornblower Weeks 19 Pollution control BONUS CREDIT TO LEAD MANAGER FULL CREDIT TO LEAD MANAGER FULL CREDIT TO EACH MANAGER 1st 1/2 1977 1978 $ Volume # of (millions) issues 1 1 Goldman Sachs $181.6 8 9 2 Smith Ramey, Harris Upham 169.7 5 2 3 Blyth Eastman Dillon 127.7 9 4 4 First Boston 112.3 6 5 Lehman Brothers Kuhn Loeb 89.5 4 7 6 Merrill Lynch White Weld 67.4 4 6 7 Kidder Peabody 67.0 3 - 8 Lazard Freres 42.8 3 ** 9 Loeb Rhoades Hornblower 33.3 3 3 10 Morgan Stanley 33.2 2 11 11 Salomon Brothers 31.3 1 12 12 Paine Webber 29.0 1 *** 13 Dean titter Reynolds 28.2 4 5 14 E. F. Hutton 20.3 2 - 15 J. J. B. Hilliard, W. L Lyons 14.0 1 - 16 A. G. Becker 12.9 2 17 17 Wheat, First Securities 11.7 1 - 18 Burrows, Smith 10.5 1 24 19 J. C. Bradford 9.6 1 24 Sterne, Agee & Leach 9.6 1 - 21 McDonald 9.5 1 - Prescott, Ball & Turben 9.5 1 23 Foster & Marshall 8.5 1 - 24 Bache 3.3 1 - Wiliam Blair 3.3 1 * 1977 Rankings: Lehman Brothers 15, Kuhn Loeb 8 ** 1977 Rankings: Loeb Rhoades 10, Hornblower Weeks-- 1977 Rankings: Dean Witter 13, Reynolds Securities -- Water and sewer BONUS CREDIT TO LEAD MANAGER 1st 1/2 $ Volume # of 1977 1978 (millions) issues 6 1 E. F. Hutton $135.3 14 2 Wm. R. Hough 115.4 3 Loeb Rhoades Hornblower 83.3 4 Boland, Saffin, Gordon, Sautter 76.1 - 5 American Securities 75.0 6 Charles G. Peelor 63.9 7 7 Butcher & Singer 54.5 4 8 Kidder Peabody 51.2 - 9 Pierce, Wulbero & Murphey 46.4 - 10 John Nuveen 40.8 12 11 Elkins, Stroud, Suplee 36.8 1 12 Goldman Sachs 33.3 - 13 White Weld 32.1 - 14 Kirchner Moore 30.2 - 15 A. G. Edwards & Sons 26.4 - M. G. Lewis 26.4 2 17 Merrill lynch White Weld 25.8 17 18 Blyth Eastman Dillon 24.7 - 1Q Ziegler Securities 21.8 - 20 Fischer, Johnson, Alen, Burke 21.4 - 21 Southeastern Muni. Bonds 20.7 8 22 Salomon Brothers 19.8 - 23 Moore, Leonard & Lynch 18.8 24 Johnson, Lane, Space, Smith 16.1 - Robinson-Hunrpkrey Co. 16.1 1st 1/2 1977 1978 $ Volume # of (millions) issues 9 1 Smith Barney, Harris Upham $198.5 1 2 Goldman Sachs 171.1 3 3 Blyth Eastman Dillon 153.3 2 4 First Boston 136.5 5 5 Kidder Peabody 125.0 6 Lehman Brothers Kuhn Loeb 86.9 - 7 Lazard Freres 78.5 ** 8 Dean Witter Reynolds 49.1 *** 9 Loeb Rhoades Hornblower 47.5 4 10 Morgan Stanley 36.3 8 11 Merrill Lynch White Weld 36.2 6 12 E F. Hutton 17.2 - 13 Bank of America 5.7 * 1977 Rankings: Lehman Brothers 11, Kuhn Loeb 7 ** 1977 Rankings: Dean Witter--, Reynolds-- 1977 Rankings: Loeb Rhoades 10, Hornblower Weeks -- FULL CREDIT TO LEAD MANAGER 1st 1/2 $ Volume # of 1977 1978 (millions) issues 5 1 E. F. Hutton $230.9 3 >. 2 Loeb Rhoades Homblower 175.9 2 13 3 Wm. R. Hough 138.6 4 - 4 American Securities 95.8 4 6 5 Kidder Peabody 84.4 4 - 6 Boland, Saffin, Gordon, Sautter 76.1 3 7 White Weld 64.2 1 - 8 Charles G. Peelor 63.9 3 9 John Nuveen 56.1 2 9 10 Salomon Brothers 49.5 1 8 11 Butcher & Singer 44.8 4 22 12 Elkins, Stroud, Suplee 36.8 2 3 13 Goldman Sachs 33.3 2 20 14 Arch W. Roberts 22.9 1 24 15 Moore, Leonard & Lynch 18.8 2 1 16 Smith Barney, Harris Upham 18.2 1 18 17 Ziegler Securities 18.0 1 -- 18 Herbert J. Sims 15.9 1 - 19 Southeastern Muni. Bonds 12.4 2 20 Matthews & Wright 9.9 1 - 21 Foster & Marshall 9.5 1 12 Dolphin & Bradbury 9.5 1 - 23 Cunningham Schmertz 5.8 1 ** 24 Dean Witter Reynolds 5.4 1 - 15 Seattle -Northwest Sec. 5.3 1 1st % 1977 1978 $ Volume # of (millions) issues 1 1 Blyth Eastman Dillon $241.9 9 2 1 Goldman Sachs 213.1 8 4 3 Merrill Lynch White Weld 201.2 4 14 4 Smith Barney, Harris Upham 198.5 5 * 5 Lehman Brothers Kuhn Loeb 195.9 4 6 6 First Boston 158.0 6 3 7 Kidder Peabody 150.7 3 10 8 Salomon Brothers 125.0 1 ** 9 Loeb Rhoades Hornblower 104.5 3 13 10 Paine Webber 86.9 1 - 11 Lazard Freres 78.5 3 - 12 A. G. Becker 68.0 2 *** 13 Dean Witter Reynolds 54.8 4 20 14 1. C. Bradford 48.0 1 20 Sterne, Agee & Leach 48.0 1 - 16 McDonald 47.5 1 - Prescott, Ball & Turben 47.5 1 - 18 J. J. B. Hilliard, W. L. Lyons 42.0 1 - Burrows, Smith 42.0 1 7 20 Morgan Stanley 36.3 2 16 21 Wheat, First Securities 35.0 1 - 22 Foster & Marshall 34.0 1 5 23 E. F. Hutton 26.5 2 - 24 Bache 20.0 1 - Wiliam Blair 20.0 1 * 1977 Rankings: Lehman Brothers 17, Kuhn Loeb 8 ** 1977 Rankings: Loeb Rhoades 9, Hornblower Weeks-- 1977 Rankings: Dean Witter 11, Reynolds Securities -- FULL CREDIT TO EACH MANAGER 1st 1/2 $ Volume # of 1977 1978 (millions) issues 12 1 E. F. Hutton $406.8 5 * 2 Loeb Rhoades Hornblower 329.0 4 - 3 Wm. R. Hough 222.7 6 25 4 Kirchner Moore 181.2 2 13 5 Butcher & Singer 172.8 6 - 6 Blyth Eastman Dillon 168.0 2 - 7 A. G. Edwards & Sons 158.3 1 M. G. Lewis 158.3 1 9 Pierce, Wulbero & Murphey 139.1 2 1 10 Merrill Lynch White Weld 128.9 3 14 11 Bache 118.5 1 17 McDonald 118.5 1 - Prescott, Ball & Turben 118.5 1 - 14 American Securities 95.8 4 - 15 Fischer, Johnson, Allen, Burke 94.7 2 2 16 Kidder Peabody 84.4 4 - 17 Boland Saffin, Gordon, Sautter 76.1 3 - 18 White Weld 64.2 1 - Johnson, Lane, Space, Smith 64.2 1 - Robinson -Humphrey Co. 64.2 1 - 21 Charles G. Peelor 63.9 3 - 22 Southeastern Muni. Bonds 62.3 3 - 23 John Nuveen 56.1 2 5 24 Salomon Brothers 49.5 1 - 25 Joe Jolly 46.0 1 * 1977 Rankings: Loeb Rhoades 22, Homblower Weeks 10 * 1977 Rankings: Loeb Rhoades 23, Hornblower Weeks-- * 1977 Rankings: Loeb Rhoades- Hornblower Weeks 7 fl g * 1977 Rankings: Dean Witter--, Reynolds Securities-- U7 1 Vq William H.Hough & CD. /Annual report 1977 Dear friends: It is with pleasure that we submit herewith our Annual Report for the calendar year ending December 31, 1977. Nineteen seventy-seven was an exceedingly heavy volume year for our firm. During this year we had direct billings in the sale of municipal bonds of $815,986,250, as compared with $541,388,265 for the preceding calendar year. For many yews our firm has been the leading managing underwriter of Florida Bonds. We owe this position to our active sales organization and secondary market trading activities. Our strong position in these fields gives us an edge on our competitors in winning bond issues at public competitive sale and enables us to market bonds at higher prices than many other firms are able to do. In 1977, we were the manager or co -manager of 47 Florida Bond issues and participated as Underwriter in 11 others. These issues constituted 42.96°s, of the issues marketed in Florida and -H.37 of the volume. This market penetration, in our opinion, was greater than that of any other underwriting firm. During the year our net capital funds, including subordinated capital, grew from 5-1.547,766 as of December 31, 1976 to a year-end figure of S5,-t89,+t9, for a gain of '07", We are pleased to welcome as additional partners Mr. Robert Evan Ward and Mr. Cornelius J. Fagan. Mr. Ward is a graduate of the University of Florida with a Masters in International Management from the American Graduate School of International Management, Glendale, Arizona. Mr. Fagan is a graduate of the C.S. ;Naval Academe, with graduate work in f inance at the Wharton School. and is a former Vice President of Reynolds Securities Inc. We also welcome the following new employees who have joined the firm since the previous year: Mr. Jack Larkins joined us in our Jacksonville Office from Kidder Peabody; Mr. Van C. Sayler, a recent graduate of Vanderbilt University, joined us this past summer; and Mr. Jerome J. Selitto, who is to specialize in housing financing, joined us from Florida Federal Savings and Loan Association,where he was a Vice President, Both Mr. Savler and Mr. Selitto are in our St. Petersburg Office. We wish to thank our friends for their support in making 1977 a banner year for our firm. Respectfully submitted, WTLLIAM R. HOUGH & CO. '3/h R )�". William R. Hough March 31, 1978 William R. Hough & Co. Wlliam R. Hough & Co. was founded in 1962 with a single objective: provide complete underwriting and consulting services to Florida municipalities. We lived here. We believed in Florida. And we believed in the credit worthiness of Florida communities. That belief has helped us become the number one managing underwriter of Florida municipal bonds each year since 1966. And we have been able to convince investors to pay higher prices for Florida bonds than our competitors thought they were worth. (Historical Note: In our early years, northern -based underwriting firms were aggressively bidding for New York and Pennsylvania bonds while considering Florida bonds risky We felt otherwise, and our customers have seen their Florida bonds rise in value as Moody's and Standard & Poor's gradually up -graded their ratings on Florida bonds while down -grading northern bonds. Our belief was well-founded.) But it takes more than belief to be the country's leading marketmaker in Florida securities. At William R. Hough & Co. we provide a complete "turnkey" function for Florida municipalities from planning finances to final sale and delivery of bonds. When retained early in the development of an issue, we can help avoid time-consuming and costly pitfalls. And we have the specialized knowledge and experience required to help generate the maximum capital for municipal financing programs. In addition, we create "secondary" markets for Florida municipal bonds among institutional and individual investors. Since our company maintains a bond inventory averaging between $20,000,000 and $30,000,000, we have an intimate knowledge of bond markets, prices and supply and demand factors. Operating philosophy William R. Hough & Co. has a twofold operating philosophy, namely: 1. 'Ib provide the lowest possible interest rates to municipalities through financial consulting, investment banking and public sale underwriting... 2....And to provide maximum future financing flexibility for municipalities in keeping with their specific long-range objectives. In addition to working closely with Florida municipalities in the planning of bond issues, we provide the following specialized consulting services: • Development of long-term capital budgets based on our experience with comparable municipalities. • Utility rate studies. • Aid in short term investment of bond issue proceeds. • Surveys of all available revenue sources. • Rating studies and reviews. • Communications programs to inform the public of the need for bond issues. Then, once the issue has been approved, we help determine the single best means to sell the bonds. For example: 1. Direct placement Depending on the existing market and other factors, direct placement through William R. Hough & Co. to insurance companies and banks is one of the best ways to insure the lowest possible interest cost. Simply because the placement fee is generally Less than the cost of marketing bonds through negotiation or competitive bidding. We can help in placement because our representatives are in daily contact with insurance companies and banks who rely on us for accurate, up-to-date information on Florida issuers, credits and markets. As a result, we're often able to present clients with an "instant market" for their bond issues. 2. Sale by negotiation There are some circumstances when sale by negotiation is the best marketing method. For example, when it proves advisable to determine exact borrowing costs and obtain a firm commitment for sale early in the development of a municipal bond issue. When bonds are sold by this method, Wilfiam R. Hough & Co. charges no fees — our compensation comes by way of a mark-up obtained by resale of the bonds. 3. Sealed competitive bidding There are times when factors dictate competitive bidding as the best means of selling a municipality's bonds. In this situation, we work as financial consultant to the issuer, and develop a detailed financial plan which becomes a guideline for the development of the necessary resolutions, engineers' reports and official statement relating to the proposed bond issue. After a review by the national rating agencies, we distribute the official statement and supporting documents throughout the country to an extensive list of prospective bidders. Finally, we help advertise the bonds for sale, assist in the conduction of the sale, and make the recommendation as to the award of the bonds. In brief Nineteen seventy-seven marked the best year in our history. We were the underwriter for 47 issues — more than 2-1/2 times the total of our nearest competitor. And in terms of Florida bond issues sold, William R. Hough & Co. was involved in almost 43% of all issues, amounting to $674,917,000. We've progressed a long way since 1962. But our objective remains the same. To provide Florida municipalities with the underwriting and consulting services needed to market their securities at the best possible price. WILLIAM R. HOUGH & CO. Ni; umers E.F. Hutton &Company, Inc WILLIAM R. HOUGH & CO. Merrill Lynch. Pierce. Fenner& Smith. Inc The Pierce, Wulbern, Murphey Corp l nth Barney rns Upham & Co. orporated 1977 1976 UNDERWRITING POSITION-FLORIDA BONDS O�GH & HA Y O� 1977 PERCENTAGE OF DOLLAR VOLUME 1976 OF FLORIDA BOND ISSUES SOLD Southeastern Municipal Bonds Inc The Pierce. Wulbern. Murphey / Corp. Bear. Stearns & Co. Salomon Brothers O O O \ All Others r` CD 61) 600 500 Y) Q J J O 0 LL. O U) 400 Z J J z w H _H 300 w 0 z D U) w D U) 200 U) m 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 Consulting staff George I Bland, General Partner — Chartered Municipal Financial Consultant: Municipal Finance Consulting Bond Origination Services, eight years: Professional Comptroller directing world-wide budgeting finance management analysis computer systenns, U.S. Department of Defense, 25 years:.Armed Forces Industrial College: North Carolina State College. Raymond V. Condon — Former Vice President, B.J. Van Ingen & Co.: Nice President and Bond Department Manager. First \Mscousin National Bank of Milaukee: Chairman, Financial Advisory Board of Nlisconsin State Building Commission: A(h'isor to Financing of Milwaukee City and County: Past Governor, Investment Bankers .)Lssociation: NortImestern University, Economics, Katherine H. Coyle, General Partner and Director of Statistics — Chartered Municipal Financial Consultant::AA, Stephens College, Columbia, Missouri: BSA, Ohio State University, Columbus. Ohio: Graduate work in statistics at Ohio State ['niyersity Roy R. Dickson, General Partner and Municipal Bond Trader — BS, Muskingum College, Nevy Concord. Ohio (Physics and lath ematics) ; NIBA, University of Floricla. Gainesville. Florida (Finance and Investments) Cornelius J. Fagan, General Partner — ('.S. Naval Academy' Annapolis, Md: BS. 1961 Graduated with Distinction: NIBA, Graduate study in Finance at the Wharton School of the University of PennsyIania: six years with Reynolds Securities Inc., three of which were is Vice President. G. William Gernazian, Trader/Institutional Sales — NIBA, University° of Florida, Gainesville. Florida. James R. Hawkins, General Partner — Chartered 'Municipal Financial Consultant; BS, Florida Southern College (Accounting); NIBA, Florida State University (Industrial Management): formerly with Arthur Andersen & Co., Certified Public Accountants. William R. Hough, Senior Partner — BSBA. Miami University, Miami. Ohio: MBA, University of Florida: Chartered Municipal Financial Consultant: Past President, Florida Security Dealers .Association: Member, Board of Directors, Public Securities Association. D. Carl Huskey, Financial Consultant — BA, Florida Southern College: M.Ed- Duke University: additional Graduate study at the ['niversin of Florida and Columbia University: Director of Finance. City of Ft. Pierce, Florida, 11 yews: Superintendent of Public Instruction, St. Lucie County, Florida. 11 vears. Thomas W. Kerwin, General Partner and Trader — BS, Diiyersiti of Florida: formed Vice President, Municipal Bond Department, Barnett Bank of Jacksonville, N.A.: Member, Municipal Finance Committee, Securities Industry Association. Jack Larkins — BA, Vanderbilt University: will receive MBA in Finance in June. 1978 from the University of North Florida: Past President, Florida Security Dealers' Association: currentl an Instructor in Corporate Finance at Jacksonville University: involved in municipal financial work and sales since 1954. Doris Litten, General Partner and Dealer, Sales Administrator — Indiana University (Accounting): associated for ten years with William R. Hough & Co. in Municipal 11rading and Underwriting. Patrick E. Mann, General Partner — BA, Economics, University of South Florida; Board of Governors, Florida Security Dealers' Association; Member, Public Securities Association, Municipal Committee. Van C. Sayler — BSBA with Honors, Vanderbilt University: presently working on MBA in Finance at the University of South Florida. Arnold W, Schneider — BA, Florida Technological University, Orlando: Associate Member, Municipal Finance Officers Association. Jerome J. Selitto, Financial Consultant Former Vice President, Florida Federal Sayings and Loan Association: BA with Honors, Marketing, Minor in Economics. University of South Florida; Graduate work in Economics, University° of South Florida. Alfred C. Shepard, General Partner — Chartered Municipal Financial Consultant: Municipal Bonds, underwriting consulting financial planning marketing sales, 30 years: directly involved in consultation to Florida Municipalities and marketing Florida Bonds, 20 years: BS. Mathematics, Florida Southern College: NIA. Public Finance and Administration, Indiana Uriiyersity. Charles D. Smith, General Partner, Financial Consultant — BA, Swarthmore College: Graduate work in Public Finance, Cornell University; Formerly Professor of Economics, University of Florida and Florida Presbyterian College. Robert Evan Ward, General Partner —AA, St. Petersburg Junior College, 1970; BA, Political Science, University of Florida, 1973; Masters, International Management, American Graduate School of International :Management, Glendale, Arizona, 1975. Joe B. Wise, Resident Manager of North Palm Beach Office — Graduate, Denison University, BA: Past Vice President and :Manager, New York Bond Department, Mercantile National Bank at Dallas; Past Special Partner and National Manager, Municipal Bond Department, Goodbody & Co.; Specialist in Municipal Finance since 1946. Edward R. Wulbern, General Partner: Manager, Jacksonville Office; Financial Consultant — BA, Economics, Yale University; Chartered Municipal Financial Consultant; Past President, Florida Security Dealers' Association. w JA s 0 Clients served by William R. Hough & Co. State of Florida Acme Drainage District Alachua County Baker County Board of Public Instruction City of Belle Glade City of Boynton Beach City of Bradenton Brevard County City of Brooksville Canaveral Port Authority City of Cape Canaveral City of Cape Coral Charlotte County Charlotte County Development Authority Citrus County Hospital Board City of Clearwater Collier County Dade County Escambia County City of Fort Meade City of Fort Pierce Fort Pierce Hospital Authority Fort Pierce Utility Commission City of Gainesville Hamilton County School Board Hamilton County Hospital Board Hernando County City of Holly Hill City of Homestead Indian River County City of Jacksonville Jacksonville Electric Authority Jackson County School Board City of Kissimmee City of Lake Butler City of Lake Wales Leon County Levy County School Board lbwn of Longboat Key Loxahatchee River Environmental Control District Manatee County Port City of Margate Marion County Hospital District Martin County Board of Public Instruction Martin County City of Miami New Smyrna Beach Utility Authority City of North Lauderdale City of North Miami City of Ocala City of Ocean Ridge Okaloosa County Orange County Civic Facilities Authority City of Orlando Orlando Utilities Commission Osceola County Osceola County School Board City of Pahokee Pasco County Pasco County School Board Pinellas County City of Pinellas Park City of Plantation City of Port Richey City of Riviera Beach Royal Palm Village City of St. Augustine City of St. Cloud St. John's County St. Lucie County St. Lucie County Board of Public Instruction City of St. Petersburg City of St. Petersburg Beach City of Safety Harbor City of Sarasota Sarasota County Sarasota -Manatee Airport Authority City of Sebring Seminole County Seminole Drainage District Siesta Key Water Authority City of South Pasadena Sumter County Board of Public Instruction City of Tallahassee Tampa Bay Regional Planning Council City of Tarpon Springs Village of Tequesta City of Treasure Island University of Miami City of Venice Volusia County Educational Facilities Authority City of Williston City of Winter Haven City of Winter Park grown-: .. ......... a,. ���` .may .in 'Will '1i ARS ,sib 11 =at ray m 10iME -1 � MAI I Florida issues underwritten by William R. Hough & Co. in 1977 Amount Issue WRH Role 7,470,000 Leon County, Florida, Capital Improvement, Series 1976 Revenue Bonds Sole Manager 600,000 Brevard County, Florida, Solid Waste Disposal System Bond Anticipation Notes Sole Underwriter 3,000,000 City of Safety Harbor, Florida, Water and Sewer Revenue Bonds, Series 1974 Sole Underwriter 2,200,000 The Board of County Commissioners of Alachua County, Florida, Capital Bonds Senior Manager 1,300,000 The Alachua County Public Facilities Authority, Florida, Courthouse Complex Completion Revenue Bonds Senior Manager 1,700,000 City of Ormond Beach, Florida, Water and Sewer Revenue Bonds, Series 1976 Sole Manager 4,475,000 Alachua County Public Facilities Authority, Florida, Courthouse Complex Refunding Bonds Series 1977 Senior Manager 1,745,000 Alachua County Public Facilities Authority, Florida, Special Refunding Revenue Bonds Senior Manager 134,245,000 City of Tallahassee, Florida, Electric Revenue Bonds, Series 1977 Senior Manager 64,120,000 City of Tallahassee, Florida, Special Obligation Bonds, Series 1977A Senior Manager 28,630,000 Pinellas County, Florida, Water Revenue Refunding Certificates, Issue of 1977 Sole Manager 5,390,000 Pinellas County, Florida, Special Obligation Refunding Certificates, Issue of 1977A Sole Manager 19,965,000 St. Petersburg, Florida, Utility Tax Refunding Bonds, Series 1977 Participating Underwriter 9,115,000 St. Petersburg, Florida, Special Obligation Refunding Bonds, Series 1977A Participating Underwriter 2,500,000 Polk County, Florida, Water and Sewer Revenue Bonds, Series 1975 Senior Manager 19,160,000 Plantation, Florida, Water and Sewer Refunding and Improvement Bonds, Series 1977 Participating Underwriter 11,180,000 Ocala, Florida, Power Supply Revenue Bonds, Series 1977 Senior Manager 7,850,000 Ocala, Florida, Electric Revenue Bonds, Series 1977 Senior Manager 10,990,000 Ocala, Florida, Special Obligation Bonds, Series 1977A Senior Manager 7,000,000 Orange County, Florida, Gas Tax Revenue Bonds, Series 1977 Senior Manager 5,400,000 Broward County, Florida, System No. 5 First Lien Water and Sewer Revenue Bonds of 1977 Senior Manager 4,490,000 St. Cloud, Florida, Refunding and Improvement Utilities Revenue Certificates, Series 1977 Sole Underwriter 1,595,000 St. Cloud, Florida, Special Obligation Refunding Certificates, Series 1977A Sole Underwriter 2,800,000 Halifax Hospital District, Florida, Refunding and Hospital Revenue Bonds Sole Underwriter 1,100,000 The School Board of Sumter County, Florida, Certificates of Indebtedness, Series 1976 Sole Underwriter 10,210,000 Escambia County, Florida, Capital Improvement Refunding and Revenue Bonds, Series 1977-1 Participating Underwriter 10,000,000 Hillsborough County, Florida, General Obligation Bonds, Series 1977 Senior Manager 350,000 Anastasia Sanitary District of St. Johns County Florida, Water and Sewer Revenue Bonds, Series 1973 Sole Underwriter 495,000 Riviera Beach, Florida, Public Service Tax Revenue Bonds, Series 1977 Sole Underwriter 1,750,000 Lake Worth, Florida, Water and Electric Revenue Certificates, Series 1973E Senior Manager 772,000 Hamilton County, Florida, Hospital Refunding Revenue Bonds, Series 1977 Senior Manager 1,480,000 Orlando, Florida, Public Improvement Revenue Bonds, Series 1977A Sole Underwriter 30,000,000 State of Florida, Jacksonville Expressway Bonds, Series 1977 Joint Manager 19,795,000 Tampa Sports Authority, Florida, Refunding Revenue Bonds, Series 1977 Participating Underwriter 12,030,000 Tampa Sports Authority, Florida, Special Refunding Bonds, Series 1977A Participating Underwriter 2,600,000 Volusia County Educational Facilities Authority, Florida, Revenue Bonds (Embrv-Riddle Aeronautical University Project) Sole Manager 100,000 lbwn of Ocean Ridge, Florida, Franchise Tax Revenue Bonds, Series 1977 Sole Underwriter 8,930,000 Lee County, Florida, Fort Myers Beach Sewer District General Obligation Bonds Participating Underwriter 53,650,000 City of St. Petersburg, Florida, Refunding Public Utility Revenue Bonds, Series 1977 Participating Underwriter 1,200,000 Leon County, Florida, Capital Improvement, Series 1977, Revenue Bonds Anticipation Notes Sole Underwriter 56,340,000 City of Jacksonville, Florida, Excise Taxes Revenue Refunding Bonds, Series 1977 Senior Manager 1,815,000 Indian River County, Florida, Solid Waste Disposal System Revenue Bonds, Series 1977 Sole Underwriter 18,000,000 City of Homestead, Florida, Electric and Water Revenue Refunding Bonds, Series 1977 Joint Manager 10,585,000 City of Homestead, Florida, Special Obligation Bonds, Series 1977A Joint Manager 330,000 Dade County, Florida, Water Revenue Bonds (Series B) Sole Underwriter 16,000,000 Orange County Florida, Water and Sewer System Revenue Bonds of 1975 Senior Manager 6,060,000 City of Clearwater, Florida, Utilities Tax and Bridge Revenue Bonds, Series 1977 Senior Manager 3,290,000 City of Clearwater, Florida, Utilities Tax Bonds, Series 1977 Senior Manager 2,120,000 City of Clearwater, Florida, Special Obligation Bonds, Series 1977A Senior Manager 1,375,000 City of Clearwater, Florida, Special Obligation Bonds, Series 1977B Senior Manager 360,000 Alachua County Florida, Capital Notes Sole Underwriter 18,400,000 City of Kissimmee, Florida, Electric Revenue Bonds, Series A Participating Underwriter 5,525,000 City of Kissimmee, Florida, Water and Sewer Revenue Bonds, Series A Participating Underwriter 3,920,000 Port of Palm Beach District, Florida, Revenue and Refunding Bonds, Series 1977 Participating Underwriter 6,660,000 Pinellas Park, Florida, Water and Sewer Revenue Bonds, Series 1977 Sole Underwriter 5,370,000 Pinellas Park, Florida, Public Improvement Revenue Bonds, Series 1977 Sole Underwriter 6,420,000 Pinellas Park, Florida, Special Obligation Bonds, Series 1977A Sole Underwriter 965,000 Pinellas Park, Florida, Special Obligation Bonds, Series 1977B Sole Underwriter Our underwriting position in Florida bonds, 1977 Number of Rank Total Issues by Dollar Dollar Underwritten Amount Amount (000) William R. Hough & Co. 47 1 $ 222,789 E.E Hutton & Company, Inc. 17 2 97,813 Arch W Roberts & Co. 17 7 60,932 Merrill Lynch, Pierce, Fenner & Smith, Inc. 15 5 79,533 Bache Halsey Stuart Shields Incorporated 12 6 74,787 Southeastern Municipal Bonds Inc. 12 13 32,848 The Pierce, Wulbern, Murphey Corp. 10 3 97,449 Smith Barney, Harris Upham & Co. Incorporated 10 4 89,957 Reynolds Securities Inc. 9 14 32,536 Salomon Brothers 9 8 58,805 Summary of Florida bond issues sold in 1977 vs. 1976 1977 :Number of Percent of Dollar Percent of Role of William R. Hough & Co. Issues Issues Volume (000) Dollar Volume Manager 44 32.59% $ 435,632 28.64% Co -Manager 3 2.22 58,585 3.85 Participant 11 8.15 180,700 11.88 Total for \RH & Co. 58 42.96% $ 674,917 44.37% Issues Purchased by Others 77 57.04 846,285 55.63 Total Florida Issues 135 100.00% $1,521,202 100.00% 1976 Number of Percent of Dollar Percent of Role of William R. Hough & Co. Issues Issues Volume (000) Dollar Volume ;Manager 46 38.66% $ 264,308 20.66% Co -Manager 2 1.68 133,140 10.40 Participant 9 7.56 134,885 10.54 Total for WRH & Co. 57 47.90% $ 532,333 41.60% Issues Purchased by Others 62 52.10 $ 747,260 58.40 Total Florida Issues 119 100.00% $1,279,593 100.00% Statement of financial condition, December 31, 1977 \uliam R. Hough & Co.. St. Petersburg, Florid Assets CURRENT .ASSETS Cash.................................................. Cash Segregated for Exclusive Benefit of Customers .......... I . I ........ Receivable From Brokers and Dealers .............................. 1,93i,852 Receivable From joint Accounts .......... I ................. I .... �,� 2, Receivable From Customers — Cash Accounts ........................ 2-43 '30 Securities (honed at Market \aloe — State and Municipal Bonds ............ 29,W.956 Securities Borrossed at Market VdLie .............................. -48.0,0 Accrued Interest Recekahle.................................... -496.8'I Good Faith Deposits ........................................ 1-16.630 Other Current Assets ........................................ 325,326 M'ESTME\TS Securities —At Market Value (Cost S16-i.CO) ........................ 1S8.6S9 FIR\ISHINGS AND F.QI-IPMENT (\et of Accumulated Depreciation) 132.210 S36.26 ;.3,6 Liabilities and capital CURREN,r LLABILI"PIES Loans From Banks: Collateralized by Securities W ned or Borrmed ..................... S27.-+1l.-485 Pavahle to Brokers and Dealers ................................. 2.6'6.-f99 Pa�ahle to joint Accounts ..................................... 2-46,8-40 Payahle to Customers ....................................... 29,81' Accounts Pa%ahle and Other Current Liahilities ....................... Subordinated Liahilities .................. ................. 35.500 L0\G-TERM LIABILITIES Suhorchated Liabilities ...................................... 34-.000 '1,122,92- CAI)ITAL Partnership Capital ......................................... THE ACCOMPANYING NOTES ARE A! INTEGRAL PART OF THIS FINANCIAL STATEMENT. Notes to financial statement, December 31, 1977 William R. Hough & Co.. St. Petersburg, Florida 1. Significant Accounting policies Securities transactions and related commission expense are recorded on a settlement date basis, generally the fifth husiness day following the transaction date. Receivables and parables to customers and other brokers arise in connection with normal cash transactions. Municipal honds are delivered or received when payment is received or made. Furniture. equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization of S19.706. Depreciation is computed using an accelerated method over the estimated useful lives of office furniture. fixtures and equipment. Leasehold improvements are amortized over rears using accelerated methods of depreciation - State and municipal honds are valued at market value for financial reporting purposes, The cot of these securities at December 31. 19" was S29.829.686. 2. Short-term hank loans at Decemher 31. 19" are full collateralized by marketable securities. which are owned or borrowed by the Cc pam: hating a market value of S 28.930.86- as well as additional securities on fails in the amount of S1.036,123, and good faith deposits of S24.1i0. Loan Arrangements: The Compam maintains Lines of Credit with various commercial hanks in the state. As of December 31. 19 the total amount arailahle to the Compam under the Lines of Credit was S12.425,000 of which S9.99L+85 was used and classified as current outstanding debt The Company also maintains a secured loan on the offering basis with the Chase Manhatmn Bank. At December il. 19" the outstantng balance of this loan was S17,420.000 Compensating Balance Arrangements At December 31, 197- and for the nine months then ended. 'Mlliani R Hough & Compam was under informal compensating balance arrangements with various hanks. The compensating balances were not legally restricted as to withdrawal and included working cash balances which the Compamc would have on deposit regardless of the arrangements with the carious hanks_ It is estimated that the amount borrowed at any time during the nine month period for the purpose of promi ng compensating halances did not exceed SS.010 0(N) 3. Cash borrowings subordinated to the claims of general creditors hate been contributed under agreements requiring interest pasinents of 10°„ to 18 and expiring as follows Expiration Date _' 1 -8 S)O O W 8 1 -8 � 500 1 I '9 ;u 000 8 I '9 0-000 9 I '9 19,000 _' 18n 185.0iKi 6 1 80 i1,000 8 1 80 6.000 9 180 2,000 10 1 80 _18,000 S38 2 500 4. hi the normal course of business. the Companc enters into underwriting commitments and participates in joint trading and investment accounts carried he other brokers and dealers. As of December 31, 19" the Compam had unrecorded open underwTiting commitments on a " Uen-Issued basis of approximately $h .3».000. The Company was also committed as a participant in joint trading and investment accounts in which there was an estimated unsold liability of $800.000 as of December 31, 19 5. At December 31, 197 R'ilhaun R. Hough & Companc had a contingent liaihilin for open collection items at hanks of approximately S312M00 'fire Conipam has not been notified that anc of the outstand ng items were uncollectible. 6. The Companc has established a profit -Sharing (Keogh) plan which provides that each partner and employee will participate in the amount of 1 S of his annual gages, not to exceed S-.500 per person These pamients are required onl if the net inconie of the Conipam is in excess of Si �0.000 For the nine months. ended Decemher 31. 19T, all contributions have been made and therefore, no liability is recorded at December 3i. 19 7. During the nine month period ended Decemher 31. 197 William R_ Hough & Companc leased office space in St. Petersburg and Orlando on a nionth-to-month hasis. The Compam leases office space in the following cities under formal lease agreements. Annual Rental Expiration Date North Palm Beach S4.2i6 _' 19 jacksolmlle S3.+20 2 '8 'oral rental expense for the nine months ended December il. 19" including the St Petersburg and Orlando offices was S2'.3 The rent expense under formal lease agreements as wSM-1 S. The components of receivable from and pacahle to brokers and dealers are as follows. Securities Failed to Deliver: Brokers and Dealers: Outstanding Less Than 21 Dacs S1,801.'3' Outstanding 21 Days or More 133.11i SIM+.852 Securities Failed to Receive: Brokers and Dealers - Offset he Corresponding Failed to Deliver Sl?06.3" Brokers and Dealers Offset hr, Securities Carried Long L470.122 S2.676. +99 Fails represent the contract value of securities which have not been recen'ed or delivered h" settlement (Lite. 9. Inventories are maintained at total market value or total cost whichever is lower for tax purposes and at total market value for financial reporting The inventories at the beginning and end of the period are as follows ''otal Cost Total Market Aclue April 1, 19,- Si+.-+0.i3+ S;SJH_'.8,6 Decemher 31, 19„ S29 82(086 S29 ;81.9i6 Imestmens in marketable equm securities are carried at the lower of total cost or total market value for financial reporting. At Decemher 31. 197 the excess of total cost over total market value was Si811 and the resulting unrealized loss has heen included in the determination of income for the nine nionth period then ended. 10. william R hough & Companc is a partnership formed pursuant to the laws of the State of Florida. The Compam is not liable for Federal Income taxes as each partner is individually liable for tax on his share of partnership income. At December 31. 197 the Companc does not anticipate that am significant amounts will he withdrawn within the next six months for payment of partners nd vidual income taxes. 11. The Company is subject to the net capital provisions of Rule 1i6-1 of the Securities and Exchange Act of 1934, which requires that aggregate Indebtedness. as defined by the rule. shall not exceed IWO",, of net capital as defined. At December 31. 197 aggregate indebtedness was approximatek 24 of net capital. Net capital, as defined. was 52708.1'6- The mininwm net capital required he Rule liC-1 was S-+i.+96. 12. Fhe Compam, is subject to the reporting requirement, of Rule I'a-5 of the Securities and Exchange Act of 193-1. which requires that certain brokers and dealers file with the Securities and Exchange Commission annual audited statements of financial condition and an accountants report descrihing am material inadequacies. if -,inc. found to exist or found to have existed since the date of the precious audit III the Compam s accounting system, internal accounting control or procedures for safe-guar<fingsecurities. UilGam R Hough & Companc has met these requirements by filing an audited statement of financial condition as of Decemher 31, 19 A coPe of the statement of financial condition filed pursuant to Rule 1'mS isalajlahle for examination at the St. Petersburg office of the Company and in the regional office of the Securities and Exchange Commission in Atlanta. Georgia. 13. uilliam R. Hough & Compamc is exempt from making computations of amounts on deposit in the "Special Account for the Exclusive Benefit of Customers under the pro%isions' of paragraph (k)(2)(A) of Rule I5c3-3- The Compam does maintain the "Customer Reserve Account as required by paragraph (k)(_')(A) of Rule 15c3-3. CANNING, WELLS & SAI.ZER CERTIFIED PUBLIC ACCOUNTANTS SUITE 000. 440 FIRST AVENUE SOUTH ST. PF.TERSBURG. FLORIDA 33701 to the partners \1'lliam R. Hough & Conipam St. Petersburg. Florida %ke have examined the statement of financial condition of Adliaan R Hough & Conipam as of Decemher 31, 19-'. Our examination was made in accordance with generalk accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the statement of financial condition presents fairly the financial position of \lilham R Hough & Companc at Decemher 31- 197 in conforming with generally accepted accounting principles on a basis consistent with that of the preceding year ' ��a �1, Certified public Ac OU ntaHL1 Fehruan _'3.19-8 .,j.: ��recsnctrn ; JZic�ur rrl c-iz > /Irrsa�v, Jlzci, J7.eClzy <r'' �verrrzare�, �/ • �• JUDSON FREEMAN RAY W. RICHARDSON, JR. THOMAS B. SLADE,IU JOHN F. KELLY DANIEL U. LIVERMORE,JR. A. GRAHAM ALLEN RICHARD E. KLEIN JOHN L. MCWILLIAMS, III JUDSON FREEMAN, JR. ROBERT O. FREEMAN WILLIAM D. BRINTON 1200 BARNETT BANK BUILDING JACKSONVILLE, FLORIDA 32202 (904) 3S3-1264 Mx. Michael H. Cates Attorney at Law 505 Whitehead Street Rey West, Florida 33040 July 7, 1980 Re: $6,000,000 Monroe County, Florida, Improvement Revenue Bonds, Series 1980 (Incinerator Program Financing) Dear Mr. Cates: GILES J. PATTERSON (1885- 1963) FRANK L. WATSON OF COUNSEL It is my understanding that the County may want our firm to serve as bond counsel for the above issue and would like a fee proposal from us. Based upon the projected issue size, we pro- pose that our fee for serving as bond counsel be fixed at $2.00 per $1,000 of bonds delivered plus our out-of-pocket expenses. Our minimum fde for any bond issue involving special assessments is $6,000, plus out-of-pocket expenses. The bond counsel fee covers the preparation by our firm of all financing documents and._', circuit court validation pleadings, and assistance in the pre- , paration of the official statement, but does not include tem- porarX financing participation or Florida Supreme Court appellate work. If either of these possibilities become a reality, we will be happy to supply a fee quotation at that time. This fee is contingent upon the delivery of bonds, however, we would still expect to receive reimbursement for our out-of-pocket expenses if no bonds are delivered. The amount of the -fee proposal is based upon a relatively straightforward financing involving a bond resolution without"any complex trust indentures, installment sale contracts or leases. If more complex financing vehicles are desired, some adjustment in our fee may be requested. As soon as the Board of County Commissioners retains our firm as bond counsel for this issue, we will be in a position to review the financing plan submitted by Joe Wise of William R. Hough & Co. and begin preparation of the financing documents. Please indicate retention of our firm as bond counsel in your next correspondence. i { rtpL Fri �jr"a ��S d+R4" r Mr. Michael H. Cates July 7, 1980 Page Two If you have any questions or comments, please call me. Yours very truly, 114 Judsca Freeman, Jr. J FJr/vh cc: Mr. Joe B. Wise 90 SOO C) L(n 1980 REGULAR SESSION Ch.80-98 • BONDS -LOCAL GOVERNMENTAL- UNITS .,: CHAPTER 80-98 a Committee Substitute for Senate Bill No- 102 to bonds of units of local government; creating An act relating S. 218.385, Florida Statutes; municipal, and special ' regulating the sale of county, res for the sale- and providing P 1. district bonds; P requiring certain disclosure �> issuance of such bonds; statements by senior management underwriters or financial flcertain prohibiting the giving or receiving amending f consultants; pand gratuities; providing penalties; bonuses, fees, 9 requiring units of local s. 218.38(1), (3), Florida Statutes;issuance government to disclose certain ecified1nperiodioofupon time; requiring of bonds within a sP information within a underwriters to disclose certainng penalties; amending ss. specified period of time: pFlorida Statutes; deleting 153.06(4), 161.38(2)(d). to the manner of sale of ; conflicting provisions relating hi bonds; providing an effective date• re of the State of Florida: Be It Enacted by the Legislatu Section 1. Section 218.385, Florida Statutes, is created to read: 218.385 County, municipal, special district bonds; sale.-- "bonds"neas used in this section shall include the (1) The word following meanings as deft �) "General obligationd cred it, orlpayable fromlthelOf proceeds ofunad bond" whch are obl secured by the full faih valorem taxes, of the governmental unit. (b) "Revenue bonds" which are obligations of a unit to pay tion Of the cost �.. or improvanents thereof or • a ableafrom thg s# of :� self-liquidating project and p Y *� one or more projects or improvements authorized to b. earnings of such project and any pledged as additional security therefor• a unit to (c) "Limited revenue bonds" which are obligations issued by i ` and payable from funds s' pay the cost of a project o= gents ent thereof, or combination of one a or more projects or 1mP special assessments, or earnings from such exclusive of ad valorem taxes, " projects or improvements. ovid¢ (d) "Special assefor ssment bonds" which are boas{ tbhpr yatlevyinge and capital improvements and are paid in whole or irtcontiguous, ,or collecting special assessments on the abutting.adjoining,other specially benefited property. as f- 2) All bonds 'sold ined in by a unit of local etbids ata. fsuch place 11a.31(1), shall be,¢old at public sale by P roposals for r fi; body shall determine to receive published one r places as the governingIs e purchase ,of such bonds. Noticeof Loctheadate oflsale in one or more tA-#_ )r more times at least 10 days prior shall deem advisable newspapers or financial journals published within or without the state, shall contain such terms as the governing body shall and proper under the circumstances. However, if the governing body an at a public meeting determine that a negotiated sale of. by resolution a are deletions from existing law; coDING: Words in underscored t e are additions• words in underscored cared type �:. 423 Ch. 80-98 1980 REGULAR SESSION such bonds is in the best interest of the issuer, the governing body may negotiate for sale.of such bonds. i+r (a) In the resolution authorizing the negotiated sale, the local governing body shall provide specific findings as to the reasons requiring the negotiated sale. Said reasons shallAnclude, but not be limited to, characteristics of the bond issue and prevailing market conditions that necessitate a negotiated sale. (b) A' resolution authorizing a negotiated bond sale may be the same resolution as that authorizing the issuance of such bonds. (3) All proposals for the purchase of any bonds offered by a unit of local government shall be opened in public. Such bonds when competitively bid shall be awarded by resolution to the lowest bid consistent with the notice of sale. (4) No bid conforming to the notice of sale may be rejected unless all bids are rejected. If all bids are rejected, such bonds may be sold thereafter at, public. sale by competitive bids or by negotiated sale pursuant to this section.. (5) No bonds of a unit of local government shall be issued unless the face or reverse thereof contains a statement, executed either manually or by facsimile signature, of the appropriate officer of the unit of local government responsible for issuing such bonds to the extent that issuance 'of such bonds has been approved under the provisions of this act. Such statement shall be conclusive evidence as to approval of the issuance of such bonds and that the requirements of this act have been fully complied with. (6)' In the event the local governing body decides to negotiate for a sale of bonds, the senior managing underwriter, or financial consultant or advisor if applicable, shall provide to the unit of local government, prior to the award of bonds to the senior managing underwriter, a disclosure statement containing the following information: (a) An itemized list setting forth the nature and estimated amounts of expenses to be incurred by the managing underwriters in connection with the issuance of such bonds. Notwithstanding the foregoing, any such list may include an item for miscellaneous expenses, provided it includes only minor items of expense which cannot be easily categorized elsewhere in the statement. :t (b) The names, - addresses and estimated amounts of compensation of any person who enters into an understanding with either the issuer or managing underwriters or both, for any paid or promised compensation or f valuable consideration, directly or indirectly, expressly or implied, to ti act solely as an intermediary between said issuer and managing underwriters or exercises or.attempts to exercise any influence to effect j, any transaction in the purchase of said bonds. t(c) The amount of underwriting spread expected to be realized. ,- (d) Any management fee charged -by the managing underwriters. r� :y �( (e)- Any other fee, bonus,'and other compensation estimated to be paid , by the managing underwriters in connection with the bond issue to any person not regularly employed or retained by the managing underwriters. (f) The name and address of each underwriter connected with the bond issue. (g) Any other disclosure which the local governing body may require. CODING: Words in steaek-theeugk type are deletions from existing law; words in underscored type are additions. 424 "subsection is not inter Messional services relat., iection '2 1 Bonds; finde. �.Jh (a):.' As used in this r j Coyed by, or_a.partner o.j sultant,- whose primary f, influence the acquisitio (b) No- underwriter, -co sultant shall pay any fi h_,the sale of any, genera cial assessment bonds, i i disclosure is made ,current with the submiss lerwriter,•- commercial ba; Ci,subsequently in the off: W name -,and-- address o' -itity paid to -such find, 12) Willful- violation pFee, punishable,asVprov-', �rida Statutes, ;Section 3; Subsections stutes, are amended to r 218.38 Notice ofbond ,)(a) tach`un of to to issue general oblic 1 sessment_ bonds,_ shall partment=of General Seri•; rods and shall-, also . F :ficial-statement for the; icluaion into the bond r •oposed new bond issue st go'vernii j ber: a.- The ' nameand add name and add E ,,: - c Any management fe( c The underwriting , e. Any fee, bonus, ___ .. "k- As write, )DING: Words in sdseek-t words in underact I i Tentative assignment as 21U i r, the governing body may negotiated sale, the local` ings as to the reasons" shall -include, but not be e and prevailing market ., t;JDAV bond sale may be_the same such bonds.+ bonds offered by a_unit of ic. Such bonds when' olution to the lowest bid ale may be rejected unleJ d, such bonds may be sold oids or by negotiated sal, shall be issued unless this xecuted either manually o.. fiver of the unit of loea 3 the extent that issuanc visions of this act. .Suc ?royal of the issuance:6 t,have.been fully,compli'; 3ecides to negotiate fo or financial consults unit of local governmen managing underwriter& aformation_ - ate! ture and estimated amour 3erwriters 'in''connect� ng the foregoing, any's_ nses, provided it includ sily'categorized elsewt� nti of compensation oar n ,either the issue r promised compensati n expressly or"implied, aid 'issuer and ''man- se any influence to of ted to be realized_ ing underwriters. ation estimated to be pa the 'bond issue to `!- e managing underwriters er connected with the overning body may requYt tions from existing lays: 1980 REGULAR. SESSION Ch. 80_98 0.' This subsection is not intended to restrict or prohibit the employment of professional services relating to local government bond issues. s ection 2.1 Bonds; finder's fees prohibited.-- i k (1)(a) As used in this section, "finder" means a person not regularly t employed by, or a partner or officer of, an underwriter, bank, banker, or consultant whose primary function in the construction of a bond issue is to influence the acquisition of a contract from the issuing body. ( ) No underwriter, commercial bank, investment banker, or financial consultant shall pay any finder any bonus, fee, or gratuity in connection with the sale of any general obligation bonds or revenue bonds, including special assessment bonds, issued by any unit of local government, unless full disclosure is made to the unit of local government prior to or concurrent with the submission of a purchase proposal for bonds by the und.,-rwriter, commercial bank, investment banker, or financial consultant and subsequently in the official statement or offering circular detailing the name and address of any finder and the amount of bonus, fee, or gratuity paid to such finder. Willful violation of this section shall be a felony of the third' degree, punishable as provided in s. 775.082, s. 775.083, or s.� 775.084, Florida Statutes. Section 3. Subsections ,.(1) and (3) of -section :218.38, Florida Statutes, are amended to read: -13.38 Notice of bond issues required; verification. --- Each unit of local government authorized by general or special law to issue general obligation bonds or revenue bonds, including special assessment bonds, shall furnish the Division of Bond Finance of the Department of General Services a complete description of all outstanding bonds and shall also provide the division with any notice of sale or Official statement for the purpose of offering bonds, prior to sale, for inclusion into the bond newsletter. Failure to submit prior notice of a proposed new bond issue shall not affect the validity of the bond_ issue. (b) I. The autgovernin board of each unit 'of local government; horized by eneral or special law to issue general 0 l-I ation bonds or revenue bonds, includin special assessment nds, shall, wit in 20 a s after the issuance of an such bonds, ile wit the Division o Bond Finance, on orms rescribed by the division and si red y all members o ' such board, the followin in ormation to the best now e e o eac ar Member: issa. The name and address of each underwriter connected with the bond ue; b• The name and address of any attorne or financial consultant who ad✓ se the unit o loca government wit respect to the bond issue; C. Any management fee charged by the underwriter The underwriting spread which the underwriter expects to realize e. Any fee, bonus, or gratu±31ty paid, in connection with the bond issue, b the underwriter or' inancia consultant to -any person not reu�larly employ6u by the un erwriter or consu taut an CODING: Words in struek-ehrevgN type are deletions from existing law; words in underscored type are additions. Tentative assignment a$ 218.386. 425 Ch. 80-98 1980 REGULAR SESSION f. Any other fee paid by the unit of local government with respect to the n issue, including any fee, pai to attorneys or 1-1-n-a-H-c—la-T consultants. enomina tion of the bor atereat whic ' h may be at 2. Within 90 days after the time of sale of a unit of tate. ;np ba7?d;iby local government to an un erwriter, such underwrite le with the (d) Th4l Division of Bond Finance and t1:11:! 101:1!it of local —government a sworn statement containing the in ormation required - and e. of su -------- r The information disclosed pursuant to this para raph shall be maintained vision as a Du is recor a alsvo:be filed with tWe_c_1_er_R of thbecircuit court 102f �hdii_shal ant- of on m each county in whichinterest has apthorl local government ?'cent per annum, compute Aii in accordancjwith M- If a. -unit of local government fails to verify, pursuant to �cll'computation, however, emption subsection (2), the information held by the division, or fails to provide of any bonds pr a complete description of all outstanding bonds pursuant t o 1p�ara (1)(a) or the information 6. This act sh, �ra"ph required I e i i.. kt, the division ion (1)(b) embee t shallnote-the —Legislative —A-u-d-iti—ng Committee ,.-Section of such failure to comply. Following receipt of such notification of failure to roved by, the Governo., comply with these provisions, the Legislative Auditing Committee may; A" Piled in Office (a) In the case of a city or county, notify the Department of Revenue Secreta? .0Aft and the Department of Banking and Finance that the local unit ofy. government has failed to comply. Upon notification, the Department of V"L2V.xz'M af- Banking and Finance shall withhold any funds payable to such governmental entity until the required information is received by the division. be-1- (b) In the case of a special district, notify the Department of WATEW AMY-SE Community Affairs that the special district has failed to comply. Upon notification, the Department of Commun Affairs Banking-and-pinanee itz 7' shall proceed pursuant to ss.189.00'9 —and m.Lofo5f2 committee' -Sul Subsection Section 4. (4) of section 153-06, Florida Statutes, is vue amended to read: Acr act:��, relating'. to tj 153.06 Issuance of bonds.-- _reviving;:'readoiting, 367.022j_­367.031, `367.081 367.091, (4) ThO --- 367.123: 367.141,' Y Statutes; , clarifyir te Me !'definitions di ; - - mo I -and certification require e4--the-eeKftkYr-but No sweh sale of bonds shall be made at a price so low application- for a ce as to require the payment of interest on the money received therefor at to issuance of &'cert more than 7 1/2 percent per annum computed with relation to the absolute maturity the bonds to.. extension of of in accordance with the standard tables of bond modi fying - - provisions values, excluding, however, from such computations the amount of any certificates,.:- faci premium to be paid on redemption of any bonds prior to maturity. Prior pr6v- iding' -'for "estab to the preparation of definitive bonds, the county may, under like restrictions, issue transfer;," interim receipts or temporary bonds with or without changing of rates and j coupons exchangeable for definitive bonds when such bonds have been ::r!icel providing fo 1 executed and are available for delivery. The county commission may also rvici--avallability 1 provide for the replacement of any bonds which shall become mutilated or - Public -''Service Comm be destroyed or lost. clarifyin g' meaning servide"i modifying t-- Section 5. Paragraph (d) of subsection (2) of section 161.38, Florida the commission to ord( Statutes, is amended to reads ,,or , facilities and wholesale service %-- 161-38 Issuance of bonds— examination and-teitir (2) The board of county commissioners shall determine the Corm of commission to ' require rosalef repealing 9. such bonds, including any interest coupons to be attached thereto, the ;`judicialreview;prove rule; modifying pro% CODING: Words in skVvOk-threugh type are deletions from existing law; modifying provisions words in underscored type are additions. s in-eItrliiff4y- "INGi words in underecoil 426E. a w@ ,vernment with rest a ornevs or nancia if an__yy�i bond by a unit c -ter shall file with th local overnment a swor su su paragrap a c., iraoh shall be maintains to verify, pursuant 1 Sion, or fails to provi( ids pursuant to are ra (1)(b) subeeel4ee-- I-, i is ting Committee of su( :"ification of failure l citing Committee may: .he Department of Reveni ' iat the local unit ( .ation, the Department ( able to such governments i by the division. notify the Department ( :ailed to comply.` 'Up4 fairs Banking-and-Pinani Ir p ..� •06, Florida Statutes, bne .c)t ;... iw i!Gt -statute-and--f*h* oe made at" a, p;ice so 1, ay. received therefor relation�to�I absolute tandard tablesl:of _bop, tations the amount of any for to. maturity. -, Prior° e county may, under'lik y bonds with or without": ien, such bonds have been, anty.cemmission may ;""als% shall -become -mutilated or; f section 161.38,, Florida- all determine they form of; attached thereto the ions from existing law; 1980 REGULAR SESSION Ch. 80-99 denomination of the bonds, and the place of payment of principal and interest which may be at any bank or trust company within or without the state. (d) 3?}te--}eeaa»ee--e£--be»ds--prev3ded-far-}»-part-��-ef-tl+#e-ekapter e�+a��-»et-be-eub3eet-te-a»y-�3inatat}e»e-er-eend3t;e»e--ee»tai»ed--�»--a»y ether--laver--a»d-the-beard-ef-sea»ty-eemm�ee#e»ere-may-ee��-enek-bends-�» euel,-n�a»»err-ether-at-pabfae-er-private-safe-a»d-€er-exeh-gr?Eeee--ae--mot may--determine-to-be-i»-the-beet-�»tereete-a£-tl+e-d#etr#et-ee»eer»edr-b+�t No sueh sale of bonds shall be made at a price so low as to require the payment of interest on money received therefor at a rate in excess of 6 percent per annum, computed with relation to the absolute maturity of the bonds in accordance with standard tables of bond values, excluding from such computation, however, the amount of any premium to be paid for the redemption of any bonds prior to maturity. - Section 6. This act shall take effect upon becoming'a law. Approved by the Governor June 12, 1980. Filed in Office Secretary of State June 13, 1980- WATER AND SEWER SYSTEM REGULATORY LAW CHAPTER 80-99 Committee Substitute for Senate Bill No. 297. An act relating to the Water and Sewer System Regulatory Idw; - reviving, readopting, -and amending ss,_, 367:011,' 367.021, 367.022, 367.031, '" 367.041, 367.051,"' 367.061, 367:071, 367.081, 367.091, 367.101, 367.111, 367.121, 367.122, 367.123, 367.141, 1367.151, 367.161, and 367.171, Florida Statutes; clarifying legislative intent; providing definitions; modifying exemptions;` modifying the certification requirement; modifying provisions relating to application for a certificate; modifying provisions relating to issuance of a certificate; modifying provisions -relating to extension of service and amendment,,of „,certificate; modifying provisions relating 'tor `"sale or ` transfer of certificates, facilities, or : organizational.. control; providing for establishment of`-' rate base upon sale or transfer; modifying provisions relating -'to fixing and changing of rates and relating to rates for new classes of service; providing for the setting, by rule, of standards for service availability charges and conditions; authorizing -the Public Service Commission to amend or,revoke a certificate clarifying meaning of "safe,-- efficient, and sufficient service'; modifying the powers of the commission; authorizing , the commission to order certain interconnections of service" or facilities and to approve plant capacity charges, wholesale service charges, or • rates; providing for examination and testing of certain equipment; authorizing the commission to require 'a- utility to provide service for resale; repealing s. 367.131, Florida Statutes, relating"to judicial review; providing for application fees to be set by rule; modifying provisions .relating to gross receipts tax; modifying provisions relating to violations; providing CODING: Words in strdek-threugh type are deletions from existing law; words in'underscored type are additions. 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