HomeMy WebLinkAboutFlorida Department of Environmental Protection State Revolving Fund Construction Loan Agreement WW590600 2012 04 27 goOWION° Florida Department of
Environmental Protection t �
IfLOR _� Bob Martinez Center
';,ka, 2600 Blair Stone Road
Tallahassee, Florida 32399-2400 `=r �ar";
APR 2 7 2012
FED EX DELIVERY-SIGNATURE REQUIRED
r. Kipton Lockcuff
Public Works Director
City of Winter Springs
116 East State Road 434
Winter Springs,Florida 32708
Re: VVW590600-Winter Springs
Reclaimed Water Reuse Facilities
Dear Mr. Lockcuff:
We are pleased to provide State Revolving Fund financial assistance for construction of
your reclaimed water reuse facilities project, One original of the fully executed loam
agreement is enclosed. To draw money under the agreement,please call David Courson
at 850/24 -8358 for assistance in completing a disbursement request. Please note that
e Special Conditions listed in Section 10.08 of the Agreement ust be provided before
any funds can be released.
We congratulate you and your staff on your efforts and are pleased that we can work
with you on this project.
Sincerely,
Phil Coram,P.E.,Deputy Director
Division of Water Resource Management
PC/tw
Enclosure
cc: Shawn Boyle -City of Winter Springs
Kevin Smith -City of Winter Springs
FLORIDA WATER POLLUTION CONTROL FINANCING CORPORATION
AND
CITY OF WINTER SPRINGS, FLORIDA
CLEAN WATER STATE REVOLVING FUND
LOAN AGREEMENT
WW590600
Florida Water Pollution Control Financing Corporation
1801 Hermitage Boulevard
Tallahassee, Florida 32308
CLEAN WATER STATE REVOLVING FUND LOAN AGREEMENT
CONTENTS PAGE
ARTICLE I- DEFINITIONS.....................................................................................................................2
1.01. WORDS AND TERMS...........................................................................................................2
1.02. CORRELATIVE WORDS.......................................................................................................5
ARTICLE 11-WARRANTIES, REPRESENTATIONS AND COVENANTS......................................5
2.01. GENERAL WARRANTIES,REPRESENTATIONS AND COVENANTS......................5
2.02. TAX WARRANTIES,REPRESENTATIONS AND COVENANTS.................................7
2.03. LEGAL AUTHORIZATION................................................................................................13
2.04. AUDIT AND MONITORING REQUIREMENTS............................................................13
ARTICLE III-LOAN REPAYMENT ACCOUNT...............................................................................16
3.01. LOAN DEBT SERVICE ACCOUNT. .................................................................................16
3.02. INVESTMENT OF LOAN DEBT SERVICE ACCOUNT MONEYS..............................17
3.03. LOAN DEBT SERVICE ACCOUNT WITHDRAWALS..................................................17
3.04. ASSETS HELD IN TRUST...................................................................................................17
ARTICLE IV-PROJECT INFORMATION...........................................................................................17
4.01. PROJECT CHANGES...........................................................................................................17
4.02. TITLE TO PROJECT SITE....................................................................................................18
4.03. PERMITS AND APPROVALS. ...........................................................................................18
4.04. ENGINEERING SERVICES.................................................................................................18
4.05. PROHIBITION AGAINST ENCUMBRANCES. ..............................................................18
4.06. COMPLETION MONEYS. ..................................................................................................18
4.07. CLOSE-OUT...........................................................................................................................18
4.08. LOAN DISBURSEMENTS...................................................................................................18
ARTICLE V-RATES AND USE OF THE WATER AND SEWER SYSTEMS .................................19
5.01. RATE COVERAGE...............................................................................................................19
5.02. NO FREE SERVICE. .............................................................................................................20
5.03. MANDATORY CONNECTIONS.......................................................................................20
5.04. NO COMPETING SERVICE...............................................................................................20
5.05. MAINTENANCE OF THE WATER AND SEWER SYSTEMS.......................................20
5.06. ADDITIONS AND MODIFICATIONS. ............................................................................20
5.07. COLLECTION OF REVENUES..........................................................................................20
ARTICLE VI- DEFAULTS AND REMEDIES.....................................................................................„20
6.01. EVENTS OF DEFAULT. ......................................................................................................20
6.02. REMEDIES.............................................................................................................................21
6.03. DELAY AND WAIVER. ......................................................................................................22
ARTICLE VII-THE PLEDGED REVENUES.......................................................................................22
7.01. SUPERIORITY OF THE PLEDGE TO THE CORPORATION. ......................................22
7.02. ADDITIONAL DEBT OBLIGATIONS. .............................................................................23
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ARTICLE VIII-GENERAL PROVISIONS...........................................................................................23
8.01. DISCHARGE OF OBLIGATIONS......................................................................................23
8.02. PROJECT RECORDS AND STATEMENTS......................................................................23
8.03. ACCESS TO PROJECT SITE................................................................................................23
8.04. ASSIGNMENT OF RIGHTS UNDER AGREEMENT......................................................24
8.05. AMENDMENT OF AGREEMENT. ...................................................................................24
8.06. ANNULMENT OF AGREEMENT.....................................................................................24
8.07. SEVERABILITY CLAUSE....................................................................................................24
8.08. USE AS MATCHING FUNDS. ...........................................................................................24
8.09. COMPLIANCE VERIFICATION. ......................................................................................24
ARTICLE IX-CONSTRUCTION CONTRACTS AND INSURANCE.............................................26
9.01. AUTHORIZATION TO AWARD CONSTRUCTION CONTRACTS...........................26
9.02. SUBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS...............................26
9.03. INSURANCE REQUIRED...................................................................................................26
ARTICLE X-DETAILS OF FINANCING............................................................................................27
10.01. PRINCIPAL AMOUNT OF LOAN....................................................................................27
10.02. LOAN SERVICE FEE. ..........................................................................................................27
10.03. FINANCING RATE..............................................................................................................27
10.04. LOAN TERM.........................................................................................................................27
10.05. REPAYMENT SCHEDULE.................................................................................................28
10.06. PROJECT COSTS..................................................................................................................28
10.07. PROJECT SCHEDULE.........................................................................................................29
10.08. SPECIAL CONDITIONS. ....................................................................................................29
ARTICLE XI- EXECUTION OF AGREEMENT..................................................................................30
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CLEAN WATER STATE REVOLVING FUND LOAN AGREEMENT
WW590600
THIS AGREEMENT is executed by the FLORIDA WATER POLLUTION CONTROL
FINANCING CORPORATION (the "Corporation') and the CITY OF WINTER SPRINGS,
FLORIDA (the "Local Borrower"), existing as a local governmental agency under the laws of the
State of Florida.
WITNESSETH:
WHEREAS, pursuant to Sections 403.1835 and 403.1837, Florida Statutes (the "State
Act"), the Corporation is authorized to make loans to local government agencies to finance or
refinance the construction of wastewater pollution control facilities, the planning and design of
which have been reviewed by the State of Florida Department of Environmental Protection (the
"Department"); and
WHEREAS, in accordance with the provisions of the State Act and a Service Contract
dated as of June 1, 2001 (as amended from time to time, the "Service Contract") between the
Corporation and the Department, the Department has responsibility for the performance of
various activities in connection with such loans; and
WHEREAS, funding is provided from the State Revolving Fund program repayments
and interest, which are Federally protected but which are subject to state audit requirements;
and
WHEREAS, the Local Borrower has made application for the financing of the Project (as
hereinafter defined), and the Corporation and the Department have determined that such
Project meets all requirements for a loan and have agreed to make a loan to the Local Borrower
as set forth in this Agreement (the"Loan");and
WHEREAS, in accordance with the provisions of a Master Trust Indenture dated as of
June 1, 2001 (as supplemented and amended from time to time, the "Indenture") between the
Corporation and U.S. Bank Trust National Association, as trustee (together with any successor
trustee, the "Trustee"), the Corporation is authorized to issue bonds (the "Bonds") from time to
time to fund loans pursuant to the State Act and to refund bonds issued by the Corporation;
and
WHEREAS, the Loan and all payments of principal and interest thereon, including
prepayments, and all proceeds thereof, but excluding the Loan Service Fee (as such term is
hereinafter defined), have been pledged and assigned to the Trustee under the Indenture as
security for the payment of principal of,premium,if any,and interest on the Bonds; and
WHEREAS, pursuant to the provisions of the State Act, the Service Contract and the
Indenture, and as provided herein, the Corporation and the Department will cooperate to
assure continuing compliance with the various requirements and separate duties and
responsibilities arising from the issuance of the Bonds and the loans made by the Corporation.
NOW, THEREFORE, in consideration of the Corporation loaning money to the Local
Borrower, in the principal amount and pursuant to the covenants hereinafter set forth, it is
agreed as follows:
ARTICLE I- DEFINITIONS
1.01. WORDS AND TERMS.
In addition to the words and terms elsewhere defined in this Agreement, the following
words and terms shall have the meanings set forth below:
(1) "Agreement" or"Loan Agreement" shall mean this loan agreement.
(2) "Authorized Representative" shall mean the official or officials of the Local
Borrower authorized by ordinance or resolution to sign documents associated with the Loan.
(3) "Capitalized Interest" shall mean a finance charge that accrues at the Financing
Rate on Loan proceeds from the time of disbursement until six months before the first
Semiannual Loan Payment is due. Capitalized Interest is financed as part of the Loan principal.
(4) "Code" means the Internal Revenue Code of 1986, the Treasury Regulations
(whether temporary or final) under that Code or the statutory predecessor of that Code, and
any amendments of or successor provisions to, the foregoing and any official rulings,
announcements,notices, procedures and judicial determinations regarding any of the foregoing,
all as and to the extent applicable.
(5) "Defeasance Obligations" means:
(a) Direct obligations of, or obligations the prompt payment of principal and interest
on which are fully guaranteed by, the United States of America which are not callable prior to
maturity (except at the option of the holder thereof);
(b) Bonds, debentures, notes or other evidences of indebtedness issued or fully
insured or guaranteed by any agency or instrumentality of the United States of America which
are backed by the full faith and credit of the United States of America and which are not callable
prior to maturity (except at the option of the holder thereof);
(c) Resolution Funding Corp. (REFCORP) obligations which are not callable prior to
maturity (except at the option of the holder thereof); and
(d) Obligations of any state of the United States of America or of any agency,
instrumentality or local governmental unit of any such state which are not callable prior to
maturity or as to which irrevocable determination to call such obligations prior to maturity shall
have been made by the issuer thereof, and for the payment of the principal of, premium, if any,
and interest on which provision shall have been made by the irrevocable deposit with a bank or
trust company acting as a trustee or escrow agent for owners of such obligations of securities
described in clauses (a), (b) or (c), the maturing principal of and interest on which, when due
and payable, will provide sufficient moneys to pay when due the principal of, premium, if any,
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and interest on such obligations, and which securities are not available to satisfy any other
claim, including any claim of the trustee or escrow agent or of any person claiming through the
trustee or escrow agent or to whom the trustee or escrow agent may be obligated.
(6) "Depository" shall mean a bank or trust company, having a combined capital
and unimpaired surplus of not less than$50 million, authorized to transact commercial banking
or savings and loan business in the State and insured by the Federal Deposit Insurance
Corporation.
(7) "Fiscal Year" shall mean the period commencing on October 1 of each year and
ending on September 30 of the succeeding year.
(8) "Financing Rate" shall mean the charges, expressed as a percent per annum,
imposed on the unpaid principal of the Loan. The Financing Rate shall consist of an interest
rate component and a Grant Allocation Assessment rate component.
(9) "Grant Allocation Assessment" shall mean an assessment, expressed as a percent
per annum, accruing on the unpaid balance of the Loan. It is computed similarly to the way
interest charged on the Loan is computed and is included in the Semiannual Loan Payment.
After paying or providing for the payment of debt service on the Bonds, the Department will
use Grant Allocation Assessment moneys for making grants to financially disadvantaged small
communities pursuant to Section 403.1835 of the Florida Statutes.
(10) "Gross Revenues" shall mean all income or earnings received by the Local
Borrower from the ownership or operation of its Water and Sewer Systems, including
investment income, all as calculated in accordance with generally accepted accounting
principles. Gross Revenues shall not include proceeds from the sale or other disposition of any
part of the Water or Sewer System, condemnation awards or proceeds of insurance, except use
and occupancy or business interruption insurance, received with respect to the Water or Sewer
System.
(11) "Loan Application" shall mean the completed form which provides all
information required to support obtaining construction loan financial assistance.
(12) "Loan Debt Service Account" shall mean an account, or a separately identified
component of a pooled cash or liquid account, with a Depository established by the Local
Borrower for the purpose of accumulating Monthly Loan Deposits and making Semiannual
Loan Payments.
(13) "Loan Service Fee' shall mean an origination fee which shall be paid by the Local
Borrower.
(14) "Monthly Loan Deposit" shall mean the monthly deposit to be made by the Local
Borrower to the Loan Debt Service Account.
(15) "Operation and Maintenance Expense" shall mean the costs of operating and
maintaining the Water and Sewer Systems determined pursuant to generally accepted
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accounting principles, exclusive of interest on any debt payable from Gross Revenues,
depreciation, and any other items not requiring the expenditure of cash.
(16) "Pledged Revenues' shall mean the specific revenues pledged as security for
repayment of the Loan and shall be the Gross Revenues derived yearly from the operation of
the Water and Sewer Systems after payment of the Operation and Maintenance Expense and the
satisfaction of all yearly payment obligations on account of the Senior Revenue Obligations and
any senior obligations issued pursuant to Section 7.02 of this Agreement.
(17) "Project" shall mean the works financed by this Loan and shall consist of
furnishing all labor, materials, and equipment to construct the reclaimed water reuse facilities in
accordance with the plans and specifications accepted by the Department for the "Lake Jesup
Reclaimed Water Augmentation Facility" contract.
The Project is in agreement with the planning documentation accepted by the
Department effective July 12, 2011. Approval of this Project is provided by the Florida
Categorical Exclusion Notice dated May 6,2011 and no adverse comments were received.
(18) "Semiannual Loan Payment" shall mean the payment due from the Local
Borrower at six-month intervals.
(19) "Senior Revenue Obligations" shall mean the following debt obligations:
(a) City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bonds,
Series 2000, issued in the amount of $6,969,191.35, pursuant to Resolution No. 665 as amended
and supplemented by Resolution No. 2000-32; and
(b) City of Winter Springs, Florida, Water and Sewer System Revenue Refunding
Note, Series 2011A, issued in the amount of $8,464,906, pursuant to Resolution No. 665 as
amended and supplemented by Resolution No. 2011-15;and
(c) City of Winter Springs, Florida, Water and Sewer System Revenue Refunding
Note, Series 2011B, issued in the amount of $870,617, pursuant to Resolution No. 665 as
amended and supplemented by Resolution No. 2011-19; and
(d) City of Winter Springs, Florida, Water and Sewer System Revenue Refunding
Note, Series 2011C, issued in the amount of $3,730,050, pursuant to Resolution No. 665 as
amended and supplemented by Resolution No. 2011-37; and
(e) Any refunding bonds issued to refund the obligations identified above provided
such bonds shall not increase annual debt service during the repayment period of this Loan.
(20) "Sewer System' shall mean all facilities owned by the Local Borrower for
collection,transmission,treatment and reuse of wastewater and its residuals.
(21) "State" means the State of Florida.
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(22) "Tax-Exempt Bonds' means Bonds the interest on which is intended on their
date of issuance to be excludable from gross income of the holders thereof for federal income
tax purposes.
(23) "Water System" shall mean all facilities owned by the Local Borrower for
supplying and distributing water for residential,commercial,industrial, and governmental use.
1.02. CORRELATIVE WORDS.
Words of the masculine gender shall be understood to include correlative words of the
feminine and neuter genders. Unless the context shall otherwise indicate, the singular shall
include the plural and the word"person" shall include corporations and associations,including
public bodies,as well as natural persons.
ARTICLE II-WARRANTIES, REPRESENTATIONS AND COVENANTS
2.01. GENERAL WARRANTIES, REPRESENTATIONS AND COVENANTS
The Local Borrower warrants, represents and covenants that:
(1) The Local Borrower has full power and authority to enter into this Agreement
and to comply with the provisions hereof.
(2) The Local Borrower currently is not the subject of bankruptcy, insolvency, or
reorganization proceedings and is not in default of, or otherwise subject to, any agreement or
any law, administrative regulation, judgment, decree, note, resolution, charter or ordinance
which would currently restrain or enjoin it from entering into, or complying with, this
Agreement.
(3) There is no material action, suit,proceeding, inquiry or investigation,at law or in
equity, before any court or public body, pending or, to the best of the Local Borrower's
knowledge, threatened, which seeks to restrain or enjoin the Local Borrower from entering into
or complying with this Agreement.
(4) All permits, real property interests, and approvals required as of the date of this
Agreement have been obtained for construction and use of the Project. The Local Borrower
knows of no reason why any future required permits or approvals are not obtainable.
(5) The Local Borrower shall undertake the Project on its own responsibility, to the
extent permitted by law.
(6) To the extent permitted by law, the Local Borrower shall release and hold
harmless the State, its agencies, the Corporation, and each of their respective officers, members,
and employees from any claim arising in connection with the Local Borrower's actions or
omissions in its planning, engineering, administrative, and construction activities financed by
this Loan or its operation of the Project.
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(7) All Local Borrower representations to the Corporation and the Department,
pursuant to the Loan Application and this Agreement, were and are true and accurate as of the
date the Loan Application and this Agreement were each executed by the Local Borrower. The
financial information delivered by the Local Borrower to the Department was current and
correct as of the date such information was delivered. The Local Borrower shall comply with
Chapter 62-503, Florida Administrative Code, and all applicable State and Federal laws, rules,
and regulations which are identified in the Loan Application or this Agreement. To the extent
that any assurance, representation, or covenant requires a future action, the Local Borrower
shall take such action as is necessary for compliance.
(8) The Local Borrower shall maintain records using generally accepted
governmental accounting principles established by the Governmental Accounting Standards
Board. As part of its bookkeeping system, the Local Borrower shall keep accounts of the Water
and Sewer Systems separate from all other accounts and it shall keep accurate records of all
revenues, expenses, and expenditures relating to the Water and Sewer Systems, and of the
Pledged Revenues,Loan disbursement receipts and Loan Debt Service Account.
(9) In the event the anticipated Pledged Revenues are shown by the Local
Borrower's annual budget to be insufficient to make the Semiannual Loan Payments for such
Fiscal Year when due, the Local Borrower shall include in such budget other legally available
non-ad valorem funds which will be sufficient, together with the Pledged Revenues, to make
the Semiannual Loan Payments. Such other legally available non-ad valorem funds shall be
budgeted in the regular annual governmental budget and designated for the purpose provided
by this Subsection, and the Local Borrower shall collect such funds for application as provided
herein. The Local Borrower shall notify the Department immediately in writing of any such
budgeting of other legally available non-ad valorem funds. Nothing in this covenant shall be
construed as creating a pledge, lien, or charge upon any such other legally available non-ad
valorem funds; requiring the Local Borrower to levy or appropriate ad valorem tax revenues; or
preventing the Local Borrower from pledging to the payment of any bonds or other obligations
all or any part of such other legally available non-ad valorem funds.
(10) Each Fiscal Year, beginning three months before the first Semiannual Loan
Payment and ending with the Fiscal Year during which the final Loan repayment is made, the
Local Borrower's Authorized Representative or its chief financial officer shall submit, pursuant
to the schedule established in Section 10.07, a certification that: (a) Pledged Revenues
collections satisfy, on a pro rata basis, the rate coverage requirement; (b) the Loan Debt Service
Account contains the funds required; and (c) insurance, including that issued through the
National Flood Insurance Program authorized under 42 U.S.C. secs. 4001-4128 when applicable,
in effect for the facilities generating the Pledged Revenues, adequately covers the customary
risks to the extent that such insurance is available.
(11) Pursuant to Section 216.347 of the Florida Statutes, the Local Borrower shall not
use the Loan proceeds for the purpose of lobbying the Florida Legislature, the Judicial Branch,
or a State agency.
(12) The Local Borrower agrees to construct the Project in accordance with the Project
schedule. Delays incident to strikes, riots, acts of God, and other events beyond the reasonable
control of the Local Borrower are excepted. If for any reason construction is not completed as
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scheduled, there shall be no resulting diminution or delay in the Semiannual Loan Payment or
the Monthly Loan Deposit.
(13) The Local Borrower covenants that this Agreement is entered into for the
purpose of constructing, refunding, or refinancing the Project which will in all events serve a
public purpose. The Local Borrower covenants that it will, under all conditions, complete and
operate the Project to fulfill the public need.
(14) The Local Borrower shall take such actions, shall furnish and certify to such
information and execute and deliver and cause to be executed and delivered such documents,
certificates and opinions as the Corporation and/or the Department may reasonably require in
connection with the Bonds, including, without limitation, any necessary continuing disclosure
undertaking meeting the requirements of Securities and Exchange Commission Rule 15c2-12.
2.02. TAX WARRANTIES,REPRESENTATIONS AND COVENANTS
The Local Borrower acknowledges that the Corporation may issue Tax-Exempt Bonds
with which to fund the Loan to the Local Borrower and that the maintenance of the tax-exempt
status of any such Tax-Exempt Bonds will depend, in part, on the Local Borrower's compliance
with the provisions of this Agreement. Accordingly, the Local Borrower warrants, represents
and covenants that:
(1) Notwithstanding any other provisions of this Agreement, including specifically
Section 2.02(8), if the Local Borrower shall be notified by the Corporation or the Department as
of any date that any payment is required to be made to the United States Treasury in respect of
Tax-Exempt Bonds the proceeds of which were used to fund the Loan (hereafter, the
"Applicable Tax-Exempt Bonds'), and such payment is due to the failure of the Local Borrower
to comply with this Agreement, the Local Borrower shall pay to the Trustee (for deposit to the
applicable Subaccount of the Rebate Account established by the Indenture) the amount
specified in the notice by the Corporation or the Department.
(2) The Local Borrower is a "governmental person" (as defined in Treasury
Regulations §1.141-1(b)) (a"Governmental Unit') and it owns and operates the Project.
(3) The Local Borrower will not take any action or omit to take any action, which
action or omission will adversely affect the exclusion from gross income of the interest on the
Applicable Tax-Exempt Bonds for federal income tax purposes or cause the interest on the
Applicable Tax-Exempt Bonds, or any portion thereof, to become an item of tax preference for
purposes of the alternative minimum tax imposed on individuals and corporations under the
Code, and in the event of such action or omission, promptly upon having such brought to its
attention, it will take such reasonable actions based upon an opinion of any attorney or firm of
attorneys of recognized standing and experience in the field of municipal bonds whose opinions
are generally accepted by purchasers of municipal bonds and which attorney or firm of
attorneys is acceptable to the Corporation ("Bond Counsel"), and in all cases at the sole expense
of the Local Borrower, as may rescind or otherwise negate such action or omission. The Local
Borrower will not directly or indirectly, use or permit the use of any proceeds of the Applicable
Tax-Exempt Bonds or any other funds of the Local Borrower, or take or omit to take any action,
that would cause the Applicable Tax-Exempt Bonds to be or become "arbitrage bonds" within
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the meaning of Section 148(a) of the Code or to fail to meet any other applicable requirement of
Sections 141, 148, 149 and 150 of the Code or cause the interest on the Applicable Tax-Exempt
Bonds, or any portion thereof, to become an item of tax preference for purposes of the
alternative minimum tax imposed on individuals and corporations under the Code. To that end,
the Local Borrower will comply with all requirements of Sections 141, 148, 149 and 150 of the
Code to the extent such provisions apply to the Applicable Tax-Exempt Bonds. In the event that
at any time the Corporation or the Department is of the opinion that,it is necessary to restrict or
limit the yield on the investment of any moneys held by the Local Borrower, the Corporation or
the Department shall so instruct the Local Borrower in writing and the Local Borrower shall so
restrict the yield.
(4) The Local Borrower (or any "related party", as defined in Treasury Regulations
§1.150-1(b)) is prohibited from purchasing and shall not purchase any Applicable Tax-Exempt
Bonds other than purchases in the open market for the purpose of tendering them to the Trustee
for purchase and retirement.
(5) The Local Borrower will take no action, or permit or suffer any action or event,
which will cause any of the Applicable Tax-Exempt Bonds to be or become a "private activity
bond" within the meaning of the Code. To that end, the Local Borrower will not permit more
than 5% of the Project or portion thereof financed with Tax-Exempt Bonds to be used for a
Private Business Use. The term "Private Business Use" means use directly or indirectly in a
trade or business or any other activity carried on by any Private Person other than use as a
member of, and on the same basis as, the general public. The term "Private Person" means any
person other than a Governmental Unit. For this purpose, the United States or any agency or
instrumentality thereof is not a Governmental Unit and is therefore a Private Person. For
purposes of this paragraph (5),property is considered"used" by a Private Person if:
(i) it is owned by, or leased,to such Private Person;
(ii) it is operated, managed or otherwise physically employed, utilized or
consumed by such Private Person, other than operation or management pursuant to an
agreement that meets the conditions described in paragraph(6) below;
(iii) capacity in or output service from such property is reserved or committed
to such Private Person under a take-or-pay, output, incentive payment or similar
contract or arrangement;
(iv) such property is used to provide service to (or such service is committed
to or reserved for) such Private Person on a basis or terms that are different from the
basis or terms on which such service is provided (or committed or reserved) to members
of the public generally (except possibly for the amount of use and any corresponding
rate adjustment);
(v) such Private Person is a developer and a significant amount of the Project
financed with proceeds of Tax-Exempt Bonds serves only a limited area substantially all
of which is owned by such Private Person, or a limited group of developers, unless such
improvement carries out an essential governmental function, such developer reasonably
expects to proceed with all reasonable speed to develop the improvement and property
8
benefited by that improvement, and the improvement is in fact transferred to a
Governmental Unit promptly after the property benefited by the improvement is
developed; or
(vi) substantial burdens and benefits of ownership of the Project financed
with proceeds of Tax-Exempt Bonds are otherwise effectively transferred to such Private
Person.
(6) Use of Bond-Financed Property.
(i) For purposes of this Agreement, the use by a Private Person of the Project
financed with the proceeds of Tax-Exempt Bonds (the "Bond Financed Property")
pursuant to a Qualified Use Contract (as hereafter defined) shall not be treated as a
Private Business Use by such Private Person of such Bond-Financed Property or of funds
used to finance or refinance such Bond-Financed Property.
(ii) An arrangement under which services are to be provided by a Private
Person involving the use of all or any portion of, or any function of, the Bond-Financed
Property (for example, management services for an entire facility or a specific
department of a facility ("Use Contract")) is a "Qualified Use Contract" if all of the
following conditions are satisfied:
(A) the compensation for services provided pursuant to the Use
Contract is reasonable;
(B) none of the compensation for services provided pursuant to the
Use Contract is based on net profits from operation of the Bond-Financed
Property or any portion thereof;
(C) the compensation provided in the Use Contract satisfies one of the
following subparagraphs:
(I) At least 95% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fixed fee and
the term of the Use Contract, including all renewal options, does not
exceed the lesser of 80% of the reasonably expected useful life of the
Bond-Financed Property and 15 years. For purposes of this subparagraph
(ii), a "periodic fixed fee" means a stated dollar amount for services
rendered for a specified period of time that does not increase except for
automatic increases pursuant to a specified, objective external standard
that is not linked to the output or efficiency of the Bond-Financed
Property (e.g., the Consumer Price Index) and a "renewal option" means
a provision under which either party to the Use Contract has a legally
enforceable right to renew the Use Contract; or
(11) At least 80% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fixed fee and
the term of the Use Contract, including all renewal options, does not
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exceed the lesser of 80% of the reasonably expected useful life of the
Bond-Financed Property and 10 years; or
(III) At least 50% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fixed fee, the
term of the Use Contract, including all renewal options, does not exceed 5
years, and the Use Contract is terminable by the Local Borrower on
reasonable notice,without penalty or cause,at the end of the third year of
the Use Contract term; or
(IV) All of the compensation for services is based on a
capitation fee or a combination of a capitation fee and a periodic fixed fee,
the term of the Use Contract, including all renewal options, does not
exceed 5 years, and the Use Contract is terminable by the Local Borrower
on reasonable notice, without penalty or cause, at the end of the third
year of the Use Contract term. A "capitation fee' means a fixed periodic
amount for each person for whom the Service Provider assumes the
responsibility to provide all needed services for a specified period so long
as the quantity and type of service actually provided to covered persons
varies substantially; or
(V) All of the compensation for services is based on a per-unit
fee or a combination of a per-unit fee and a periodic fixed fee, the term of
the Use Contract, including all renewal options, does not exceed 3 years
and the Use Contract is terminable by the Local Borrower on reasonable
notice, without penalty or cause, at the end of the second year of the Use
Contract term. A "per-unit fee" means a fee based on a unit of service
provided (e.g., a stated dollar amount for each specified procedure); or
(VI) All of the compensation for services is based on a
percentage of fees charged or a combination of a per-unit fee and a
percentage of revenue or expense fee, the term of the Use Contract,
including all renewal options, does not exceed 2 years and the Use
Contract is terminable by the Local Borrower on reasonable notice,
without penalty or cause, at the end of the first year of the Use Contract
term. This subparagraph (VI) applies only to (a) Use Contracts under
which the Private Person primarily provides services to third parties, or
(b) Use Contracts involving the Bond-Financed Property during an initial
start-up period for which there have been insufficient operations to
establish a reasonable estimate of the amount of the annual gross
revenues (or gross expenses in the case of a Use Contract based on a
percentage of gross expenses) (e.g., a Use Contract for general
management services for the first year of operations), in which case, the
compensation for services may be based on a percentage of gross
revenues, adjusted gross revenues (i.e., gross revenues less allowances for
bad debts and contractual and similar allowances) or expenses of the
Bond-Financed Facilities,but not more than one.
10
For purposes of this paragraph (6)(ii)(C), a Use Contract is considered to contain
termination penalties if the termination limits the Local Borrower's right to
compete with the Private Person, requires the Local Borrower to purchase
equipment, goods, or services from the Private Person, or requires the Local
Borrower to pay liquidated damages for cancellation of the Use Contract.
Another contract between the Private Person and the Local Borrower (for
example, a loan or guarantee by the Private Person) is considered to create a
contract termination penalty if that contract contains terms that are not
customary or arm's-length that could operate to prevent the Local Borrower from
terminating the Use Contract. A requirement that the Local Borrower reimburse
the Private Person for ordinary and necessary expenses, or restrictions on the
hiring by the Local Borrower of key personnel of the Private Person, are not
treated as contract termination penalties;
(D) The Private Person has no role or relationship with the Local
Borrower, directly or indirectly, that, in effect, substantially limits the Local
Borrower's ability to exercise its rights under the Use Contract, including
cancellation rights. This requirement is satisfied if:
(I) The Private Person and its directors, officers, shareholders
and employees possess in the aggregate, directly or indirectly, no more
than 20 percent of the voting power of the governing body of the Local
Borrower;
(II) No individual who is a member of the governing body of
the Private Person and the Local Borrower is the chief executive officer of
the Local Borrower or the Private Person or the chairperson of the
governing body of the Local Borrower or the Private Person; and
(III) The Local Borrower and the Private Person are not
"related parties" (within the meaning of Treasury Regulations §1.150-1(b).
(iii) The Local Borrower may treat a Use Contract that does not comply with
one or more of the criteria of subparagraph (6)(ii) as not resulting in Private Business
Use of Bond-Financed Property if it delivers to the Corporation and the Department, at
its expense, an opinion of Bond Counsel to the effect that to do so would not adversely
affect the exclusion from gross income of interest on the Applicable Tax-Exempt Bonds
or cause the interest on the Applicable Tax-Exempt Bonds, or any portion thereof, to
become an item of tax preference for purposes of the alternative minimum tax imposed
on individuals and corporations under the Code.
(7) Notwithstanding any provision of this Section 2.02, if the Local Borrower
provides, at the Local Borrower's expense, to the Corporation and the Department an opinion of
Bond Counsel to the effect that any action required under this Section is no longer required, or
to the effect that some further action is required, to maintain the exclusions from gross income
of interest on the Applicable Tax-Exempt Bonds pursuant to Section 103(a) of the Code, the
Local Borrower, the Corporation and the Department may rely conclusively on such opinion in
11
complying with the provisions hereof, and the covenants hereunder shall be deemed to be
modified to that extent.
(8) All tax warranties, representations, covenants and obligations of the Local
Borrower contained in this Section 2.02 shall remain in effect and be binding upon the Local
Borrower until all of the Applicable Tax-Exempt Bonds have been paid, notwithstanding any
earlier termination of this Agreement or any provision for payment of principal of and
premium, if any, and interest on the outstanding Applicable Tax-Exempt Bonds and release and
discharge of the Indenture.
(9) Amounts deposited from time to time in the Loan Debt Service Account will be
used to pay principal and interest within 13 months after the amounts are so deposited.
(10) The Local Borrower has not established and does not expect to establish or use
any sinking fund, debt service fund, redemption fund, reserve or replacement fund, or similar
fund, or any other fund to pay principal of, interest and any redemption premium on the Loan
other than the Loan Debt Service Account. Except as set forth in the next sentence and except
for money referred to in paragraph (9) above, no other money or investment property
(including,without limitation,fixed income, equity and other investments) is or will be pledged
as collateral or used for the payment of such principal and interest (or for the reimbursement of
any others who may provide money to pay that principal and interest), or is or will be restricted,
dedicated, encumbered, or set aside in any way as to afford the Corporation or holders of the
Applicable Tax-Exempt Bonds reasonable assurance of the availability of such money or
investment property to pay debt service on the Loan or the Applicable Tax-Exempt Bonds.
(11) Except as stated otherwise in this Agreement, no portion of the Loan will be
used:
(i) to pay principal of or interest on, refund, renew, roll over, retire, or
replace any other obligations issued by or on behalf of the Corporation, the Local
Borrower or any other Governmental Unit,
(ii) to replace any proceeds of another issue of tax-exempt bonds that were
not expended on the project for which such other issue was issued,
(iii) to replace any money that was or will be used directly or indirectly to
acquire investments,
(iv) to make a loan to any other person or Governmental Unit,
(v) to pay any working capital expenditure other than expenditures
identified in Treasury Regulations g1.148-6(d)(3)(ii)(A) and (B) (i.e., issuance costs of the
Applicable Tax-Exempt Bonds, qualified administrative costs, reasonable charges for a
qualified guarantee or for a qualified hedge, interest on the Loan for a period
commencing on the issuance date of the Applicable Tax-Exempt Bonds and ending on
the date that is the later of three years from that issuance date or one year after the date
on which the Project was or will be placed in service, payments of amounts, if any,
pursuant to paragraph (i), and costs, other than those already described, that do not
12
exceed 5% of the sale proceeds of the Applicable Tax-Exempt Bonds and that are directly
related to capital expenditures financed or deemed financed by the Applicable Tax-
Exempt Bonds), or
(vi) to reimburse any expenditures made prior to the issuance date of the
Applicable Tax-Exempt Bonds except those that qualify as a reimbursement of prior
capital expenditures, based upon an opinion of Bond Counsel, at the expense of the
Local Borrower, delivered to the Department and the Corporation.
(12) The Local Borrower does not intend to sell or otherwise dispose of the Project or
any portion thereof during the term of the Applicable Tax-Exempt Bonds except for dispositions
of property in the normal course at the end of such property's useful life to the Local Borrower.
(13) None of the Semiannual Loan Payments shall be federally guaranteed within the
meaning of Section 149(b) of the Code.
2.03. LEGAL AUTHORIZATION
Upon signing this Agreement, the Local Borrower's legal counsel hereby expresses the
opinion, subject to laws affecting the rights of creditors generally, that:
(1) This Agreement has been duly authorized by the Local Borrower and shall
constitute a valid and legal obligation of the Local Borrower enforceable in accordance with its
terms upon execution by both parties; and
(2) This Agreement specifies the revenues pledged for repayment of the Loan, and
the pledge is valid and enforceable.
2.04. AUDIT AND MONITORING REQUIREMENTS.
The Local Borrower agrees to the following audit and monitoring requirements.
Funds provided under this Agreement have been identified as second-tier monies under
the Federal Clean Water Act which are identified as state funds whose use is federally protected.
(1) The financial assistance authorized pursuant to this Loan Agreement consists of the
following:
State Resources ..___... _. ._... ... .._...._ g.... ........_
Awarded to the Local Borrower Pursuant to this Agreement Consist of the Following
Resources Sub'ect to Section 215.97,F.S.:
.. ........ ..... m.... ......._......
State State
Program Funding Source CSFA CSFA Title or Fund Funding Appropriation
.. .._ or�
Number _ Number Source Descril�ption Amount Categ ,F JIT_ITITm
Original Wastewater 37.077 Statewide Surface $2,831,985 140131
Agreement Treatment and Water Restoration and
Stormwater Wastewater Projects
Management TF
..... _ _ ...... ......._._..........
13
(2) Audits.
(a) In the event that the Local Borrower expends a total amount of state financial
assistance equal to or in excess of $500,000 in any fiscal year of such Local Borrower, the Local
Borrower must have a State single or project-specific audit for such fiscal year in accordance
with Section 215.97, Florida Statutes; applicable rules of the Department of Financial Services;
and Chapters 10.550 (local governmental entities) or 10.650 (nonprofit and for-profit
organizations), Rules of the Auditor General. In determining the state financial assistance
expended in its fiscal year, the Local Borrower shall consider all sources of state financial
assistance, including state financial assistance received from the Department of Environmental
Protection, other state agencies, and other nonstate entities. State financial assistance does not
include Federal direct or pass-through awards and resources received by a nonstate entity for
Federal program matching requirements.
(b) In connection with the audit requirements addressed in the preceding paragraph (a);
the Local Borrower shall ensure that the audit complies with the requirements of Section
215.97(7), Florida Statutes. This includes submission of a financial reporting package as defined
by Section 215.97(2), Florida Statutes, and Chapters 10.550 (local governmental entities) or
10.650 (nonprofit and for-profit organizations),Rules of the Auditor General.
(c) If the Local Borrower expends less than $500,000 in state financial assistance in its
fiscal year, an audit conducted in accordance with the provisions of Section 215.97, Florida
Statutes, is not required. The Local Borrower shall inform the Department of findings and
recommendations pertaining to the State Revolving Fund in audits conducted by the Local
Borrower in which the $500,000 threshold has not been met. In the event that the Local
Borrower expends less than $500,000 in state financial assistance in its fiscal year, and elects to
have an audit conducted in accordance with the provisions of Section 215.97, Florida Statutes,
the cost of the audit must be paid from the non-state entity's resources (i.e., the cost of such an
audit must be paid from the Local Borrower's resources obtained from other than State entities).
(d) For information regarding the Florida Catalog of State Financial Assistance (CSFA), a
Local Borrower should access the Florida Single Audit Act website located at
https://a]2ps.fldfs.com/fsaa for assistance. In addition to the above websites, the following
websites may be accessed for information: Legislature's Website at
�Lmdex.cfm, State of Florida's website at
h ttl�:�"/www.leg.state.fl.us/Welc_owme
httL;/ www.myflorida.com�'w, Department of . Financial Services' Website at
b.tti2:/-/www.fldfs.com/ and the Auditor General's Website at ht4):Z Zwww.state.fl.us f'aud en.
(3) Report Submission.
(a) Copies of financial reporting packages shall be submitted by or on behalf of the
Local Borrower directly to each of the following:
(i) The Department at the following address:
14
Valerie Peacock,Audit Director
Office of the Inspector General
Florida Department of Environmental Protection
3900 Commonwealth Boulevard,MS 41
Tallahassee, Florida 32399-3123
(ii) The Auditor General's Office at the following address:
State of Florida Auditor General
Room 401,Claude Pepper Building
111 West Madison Street
Tallahassee,Florida 32399-1450
(iii) Copies of reports or management letters shall be submitted by or on behalf of the
Local Borrower directly to the Department of Environmental Protection at the following
address:
Valerie Peacock,Audit Director
Office of the Inspector General
Florida Department of Environmental Protection
3900 Commonwealth Boulevard, MS 41
Tallahassee, Florida 32399-3123
(b) Any reports, management letters, or other information required to be submitted to
the Department pursuant to this Agreement shall be submitted timely in accordance with OMB
Circular A-133, Florida Statutes, or Chapters 10.550 (local governmental entities) or 10.650
(nonprofit and for-profit organizations),Rules of the Auditor General, as applicable.
(c) Local Borrowers, when submitting financial reporting packages to the Department
for audits done in accordance with Chapters 10.550 (local governmental entities) or 10.650
(nonprofit and for-profit organizations), Rules of the Auditor General, should indicate the date
that the reporting package was delivered to the Local Borrower in correspondence
accompanying the reporting package.
(4) Project-Specific Audit,
Within 12 months after the amendment establishing final Project costs, the Local
Borrower shall submit to the Department a Project-specific audit report for the Loan related
revenues and expenditures. The audit shall address Loan disbursements received, Project
expenditures, and compliance with Loan Agreement covenants. The Local Borrower shall cause
the auditor to notify the Department immediately if anything comes to the auditor's attention
during the examination of records that would constitute a default under the Loan Agreement.
The audit findings shall set aside or question any costs that are unallowable under Chapter 62-
503, Florida Administrative Code. A final determination of whether such costs are allowed
shall be made by the Department.
15
(5) Record Retention.
The Local Borrower shall retain sufficient records demonstrating its compliance with the
terms of this Agreement for a period of five years from the date the audit report is issued, and
shall allow the Department, or its designee,Chief Financial Officer, or Auditor General access to
such records upon request. The Local Borrower shall ensure that audit working papers are
made available to the Department, or its designee, Chief Financial Officer, or Auditor General
upon request for a period of five years from the date the audit report is issued, unless extended
in writing by the Department.
The Local Borrower is hereby advised that the Florida Single Audit Act Requirements
may further apply to lower tier transactions that may be a result of this Agreement.
The Local Borrower should confer with its chief financial officer, audit director or
contact the Department for assistance with questions pertaining to the applicability of these
requirements.
In addition, the Local Borrower agrees to complete and submit the Certification of
Applicability to Single Audit Act Reporting, Attachment A, attached hereto and made a part
hereof, within four (4) months following the end of the Local Borrower's fiscal year.
Attachment A should be submitted to the Department's Grants Development and Review
Manager at 3900 Commonwealth Boulevard, Mail Station 93, Tallahassee, Florida 32399-3000.
The Grants Development and Review Manager is available to answer any questions at
(850) 245-2361.
(6) Monitoring.
In addition to reviews of audits conducted in accordance with Section 215.97, F.S., as
revised monitoring procedures may include, but not be limited to, on-site visits by Department
staff and/or other procedures. By entering into this Agreement, the Local Borrower agrees to
comply and cooperate with any monitoring procedures/processes deemed appropriate by the
Department of Environmental Protection. In the event the Department of Environmental
Protection determines that a limited scope audit of the Local Borrower is appropriate, the Local
Borrower agrees to comply with any additional instructions provided by the Department to the
Local Borrower regarding such audit. The Local Borrower further agrees to comply and
cooperate with any inspections, reviews, investigations, or audits deemed necessary by the
Chief Financial Officer or Auditor General.
ARTICLE III-LOAN REPAYMENT ACCOUNT
3.01. LOAN DEBT SERVICE ACCOUNT.
The Local Borrower shall establish a Loan Debt Service Account with a Depository and
begin making Monthly Loan Deposits no later than the date set forth for such action in Section
10.07 of this Agreement.
Beginning six months prior to each Semiannual Loan Payment, the Local Borrower shall
make six Monthly Loan Deposits. The first five deposits each shall be at least equal to one-sixth
16
of the Semiannual Loan Payment. The sixth Monthly Loan Deposit shall be at least equal to the
amount required to make the total on deposit in the Loan Debt Service Account equal to the
Semiannual Loan Payment amount, taking into consideration investment earnings credited to
the account pursuant to Section 3.02.
Any month in which the Local Borrower fails to make a required Monthly Loan Deposit,
the Local Borrower's chief financial officer shall notify the Department of such failure. In
addition, the Local Borrower agrees to budget, by amendment if necessary, from other legally
available non-ad valorem funds all sums becoming due before the same become delinquent.
This requirement shall not be construed to give the Corporation a superior claim on any
revenues over prior claims of general creditors of the Local Borrower, nor shall it be construed
to give the Corporation or the Department the power to require the Local Borrower to levy and
collect any revenues other than Pledged Revenues.
3.02. INVESTMENT OF LOAN DEBT SERVICE ACCOUNT MONEYS.
Moneys on deposit in the Loan Debt Service Account shall be invested pursuant to the
laws of the State. Such moneys may be pooled for investment purposes. The maturity or
redemption date of investments shall be not later than the date upon which such moneys may
be needed to make Semiannual Loan Payments. The investment earnings shall be credited to
the Loan Debt Service Account and applied toward the Monthly Loan Deposit requirements.
3.03. LOAN DEBT SERVICE ACCOUNT WITHDRAWALS.
The withdrawal of moneys from the Loan Debt Service Account shall be for the sole
purpose of making the Semiannual Loan Payment or for discharging the Local Borrower's
obligations pursuant to Section 8.01.
3.04. ASSETS HELD IN TRUST.
The assets in the Loan Debt Service Account shall be held in trust for the purposes
provided herein and used only for the purposes and in the manner prescribed in this
Agreement; and, pending such use, said assets shall be subject to a lien and charge in favor of
the Corporation.
ARTICLE IV-PROJECT INFORMATION
4.01. PROJECT CHANGES.
Project changes prior to bid opening shall be made by addendum to plans and
specifications. Changes after bid opening shall be made by change order. The Local Borrower
shall submit all addenda and all change orders to the Department for an eligibility
determination. After execution of all construction, equipment and materials contracts, the
Project contingency may be reduced.
17
4.02. TITLE TO PROJECT SITE.
The Local Borrower shall have an interest in real property sufficient for the construction
and location of the Project free and clear of liens and encumbrances which would impair the
usefulness of such sites for the intended use.
4.03. PERMITS AND APPROVALS.
The Local Borrower shall have obtained, prior to the Department's authorization to
award construction contracts, all permits and approvals required for construction of the Project
or portion of the Project funded under this Agreement.
4.04. ENGINEERING SERVICES.
A professional engineer, registered in the State, shall be employed by, or under contract
with,the Local Borrower to oversee construction.
4.05. PROHIBITION AGAINST ENCUMBRANCES.
The Local Borrower is prohibited from selling, leasing, or disposing of any part of the
Water or Sewer System which would materially reduce operational integrity or Gross Revenues
so long as this Agreement, including any amendment thereto, is in effect unless the written
consent of the Department is first secured.
4.06. COMPLETION MONEYS.
In addition to the proceeds of this Loan, the Local Borrower covenants that it has
obtained, or will obtain, sufficient moneys from other sources to complete construction and
place the Project in operation on, or prior to, the date specified in Article X. Failure of the
Corporation or the Department to approve additional financing shall not constitute a waiver of
the Local Borrower's covenants to complete and place the Project in operation.
4.07. CLOSE-OUT.
The Department shall conduct a final inspection of the Project and Project records.
Following the inspection, deadlines for submitting additional disbursement requests, if any,
shall be established, along with deadlines for uncompleted Loan requirements, if any.
Deadlines shall be incorporated into the Loan Agreement by amendment. The Loan principal
shall be reduced by any excess over the amount required to pay all approved costs. As a result
of such adjustment, the Semiannual Loan Payment shall be reduced accordingly, as addressed
in Section 10.05.
4.08. LOAN DISBURSEMENTS.
Disbursements shall be made only by the Trustee for expenses incurred by the Local
Borrower upon receipt of a requisition in the form provided under the Indenture executed by
the Department. Disbursements shall be made directly to the Local Borrower for allowance
costs and reimbursement of the incurred construction costs and related services. Disbursement
18
of the allowance costs shall be made upon the Department's receipt of a disbursement request
form. Up to seventy percent of the estimated allowance shall be disbursed after the Loan
Agreement is signed. The remainder of the allowance shall be disbursed after all procurement
contracts are executed and shall be adjusted to reflect as-bid costs. The entire estimated
allowance may be disbursed after the Loan Agreement is signed if the Local Borrower agrees to
an allowance adjustment after all contracts have been bid. Loan disbursements shall be made
by electronic means. Disbursements shall be made directly to the Local Borrower for
reimbursement of the incurred construction costs and related services and technical services
during construction. A requisition for disbursements shall be made upon receipt by the
Department of the following:
(1) A completed disbursement request form signed by the Authorized
Representative. Such requests must be accompanied by sufficiently itemized summaries of the
materials, labor, or services to identify the nature of the work performed; the cost or charges for
such work;and the person providing the service or performing the work.
(2) A certification signed by the Authorized Representative as to the current
estimated costs of the Project; that the materials, labor, or services represented by the invoice
have been satisfactorily purchased, performed, or received and applied to the Project; that all
funds received to date have been applied toward completing the Project; and that under the
terms and provisions of the contracts,the Local Borrower is required to make such payments.
(3) A certification by the engineer responsible for overseeing construction stating
that equipment, materials, labor and services represented by the construction invoices have
been satisfactorily purchased, or received, and applied to the Project in accordance with
construction contract documents; stating that payment is in accordance with construction
contract provisions; stating that construction, up to the point of the requisition,is in compliance
with the contract documents; and identifying all additions or deletions to the Project which
have altered the Project's performance standards, scope, or purpose since the issue of the
Department construction permit.
(4) Such other certificates or documents by engineers, attorneys, accountants,
contractors, or suppliers as may reasonably be required by the Department.
ARTICLE V-RATES AND USE OF THE WATER AND SEWER SYSTEMS
5.01. RATE COVERAGE.
The Local Borrower shall maintain rates and charges for the services furnished by the
Water and Sewer Systems which will be sufficient to provide, in each Fiscal Year, Pledged
Revenues equal to or exceeding 1.15 times the sum of the Semiannual Loan Payments due in
such Fiscal Year. In addition, the Local Borrower shall satisfy the coverage requirements of all
senior and parity debt obligations.
19
5.02. NO FREE SERVICE.
The Local Borrower shall not permit connections to, or furnish any services afforded by,
the Water or Sewer System without making a charge therefor based on the Local Borrower's
uniform schedule of rates,fees, and charges.
5.03. MANDATORY CONNECTIONS.
The Local Borrower shall adopt, as necessary, and enforce requirements, consistent with
applicable laws,for the owner, tenant or occupant of each building located on a lot or parcel of
land which is served, or may reasonably be served, by the Sewer System to connect such
building to the Sewer System.
5.04. NO COMPETING SERVICE.
The Local Borrower shall not allow any person to provide any services which would
compete with the Water or Sewer System so as to adversely affect Gross Revenues.
5.05, MAINTENANCE OF THE WATER AND SEWER SYSTEMS.
The Local Borrower shall operate and maintain the Water and Sewer Systems in a
proper, sound and economical manner and shall make all necessary repairs, renewals and
replacements.
5.06. ADDITIONS AND MODIFICATIONS.
The Local Borrower may make any additions, modifications or improvements to the
Water and Sewer Systems which it deems desirable and which do not materially reduce the
operational integrity of any part of the Water or Sewer System. All such renewals,
replacements, additions, modifications and improvements shall become part of the Water and
Sewer Systems.
5.07. COLLECTION OF REVENUES.
The Local Borrower shall use its best efforts to collect all rates, fees and other charges
due to it. The Local Borrower shall establish liens on premises served by the Water or Sewer
System for the amount of all delinquent rates, fees and other charges where such action is
permitted by law. The Local Borrower shall, to the full extent permitted by law, cause to
discontinue the services of the Water and Sewer Systems and use its best efforts to shut off
water service furnished to persons who are delinquent beyond customary grace periods in the
payment of Water and Sewer System rates,fees and other charges.
ARTICLE VI-DEFAULTS AND REMEDIES
6.01. EVENTS OF DEFAULT.
Each of the following events is hereby declared an event of default:
20
(1) Failure to make any Monthly Loan Deposit when it is due and such failure shall
continue for a period of 30 days or failure to make any installment of the Semiannual Loan
Payment when it is due and such failure shall continue for a period of 5 days.
(2) Except as provided in Subsections 6.01(1) and 6.01(7), failure to comply with the
provisions of this Agreement or failure in the performance or observance of any of the
covenants or actions required by this Agreement and such failure shall continue for a period of
60 days after written notice thereof to the Local Borrower by the Department.
(3) Any warranty, representation or other statement by, or on behalf of, the Local
Borrower contained in this Agreement or in any document, certificate or information furnished
in compliance with,or in reference to,this Agreement,which is false or misleading.
(4) An order or decree entered, with the acquiescence of the Local Borrower,
appointing a receiver of any part of the Water or Sewer System or Gross Revenues thereof; or if
such order or decree, having been entered without the consent or acquiescence of the Local
Borrower, shall not be vacated or discharged or stayed on appeal within 60 days after the entry
thereof.
(5) Any proceeding instituted, with the acquiescence of the Local Borrower, for the
purpose of effecting a composition between the Local Borrower and its creditors or for the
purpose of adjusting the claims of such creditors,pursuant to any federal or state statute now or
hereafter enacted, if the claims of such creditors are payable from Gross Revenues of the Water
or Sewer System.
(6) Any bankruptcy, insolvency or other similar proceeding instituted by, or against,
the Local Borrower under federal or state bankruptcy or insolvency law now or hereafter in
effect and, if instituted against the Local Borrower, is not dismissed within 60 days after filing.
(7) Failure of the Local Borrower to give immediate written notice of default to the
Department and such failure shall continue for a period of 30 days.
6.02. REMEDIES.
Upon any event of default and subject to the rights of others having prior liens on the
Pledged Revenues, the Department may enforce the rights of the Corporation and the
Department by any of the following remedies:
(1) By mandamus or other proceeding at law or in equity, cause to establish rates
and collect fees and charges for use of the Water and Sewer Systems, and to require the Local
Borrower to fulfill this Agreement.
(2) By action or suit in equity, require the Local Borrower to account for all moneys
received pursuant to this Agreement or from the ownership of the Water and Sewer Systems
and to account for the receipt,use, application, or disposition of the Pledged Revenues.
(3) By action or suit in equity, enjoin any acts or things which may be unlawful or in
violation of the rights of the Corporation or the Department.
21
(4) By applying to a court of competent jurisdiction, cause the appointment of a
receiver to manage the Water and Sewer Systems, establish and collect fees and charges, and
apply the revenues to the reduction of the obligations under this Agreement.
(5) By certifying to the Auditor General and the Chief Financial Officer delinquency
on Loan repayments, the Department may provide for the payment to the Trustee of the
delinquent amount plus a penalty from any unobligated funds due to the Local Borrower under
any revenue or tax sharing fund established by the State, except as otherwise provided by the
State Constitution. A penalty may be imposed in an amount not to exceed an interest rate of 18
percent per annum on the amount due in addition to charging the cost to handle and process
the debt.
(6) By notifying financial market credit rating agencies and potential creditors.
(7) By suing for payment of amounts due, or becoming due, with interest on
overdue payments together with all costs of collection,including attorneys' fees.
(8) By accelerating the repayment schedule or increasing the Financing Rate on the
unpaid principal of the Loan to as much as 1.667 times the Financing Rate for a default under
Subsection 6.01(1).
6.03. DELAY AND WAIVER.
No delay or omission by the Corporation or the Department to exercise any right or
power accruing upon event of default shall impair any such right or power or shall be
construed to be a waiver of any such default or acquiescence therein, and every such right and
power may be exercised as often as may be deemed expedient. No waiver or any default under
this Agreement shall extend to or affect any subsequent event of default,whether of the same or
different provision of this Agreement,or shall impair consequent rights or remedies.
ARTICLE VII-THE PLEDGED REVENUES
7.01. SUPERIORITY OF THE PLEDGE TO THE CORPORATION.
From and after the effective date of this Agreement, the Corporation shall have a lien on
the Pledged Revenues, which along with any other Corporation State Revolving Fund liens on
the Pledged Revenues, on equal priority, will be prior and superior to any other lien, pledge or
assignment with the following exception. All obligations of the Local Borrower under this
Agreement shall be junior, inferior, and subordinate in all respects in right of payment and
security to the Senior Revenue Obligations defined in Section 1.01 of this Agreement and to any
additional senior obligations issued with the Department's consent pursuant to Section 7.02.
Any of the Pledged Revenues may be released from the lien on such Pledged Revenues in favor
of the Corporation if the Department makes a determination, based upon facts deemed
sufficient by the Department, that the remaining Pledged Revenues will, in each Fiscal Year,
equal or exceed 1.15 times the debt service coming due in each Fiscal Year under the terms of
this Agreement.
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7.02. ADDITIONAL DEBT OBLIGATIONS.
The Local Borrower may issue additional debt obligations on a parity with, or senior to,
the lien of the Corporation on the Pledged Revenues provided the Department's written
consent is obtained. Such consent shall be granted if the Local Borrower demonstrates at the
time of such issuance that the Pledged Revenues, which may take into account reasonable
projections of growth of the Water and Sewer Systems and revenue increases, plus revenues to
be pledged to the additional proposed debt obligations will, during the period of time
Semiannual Loan Payments are to be made under this Agreement, equal or exceed 1.15 times
the annual combined debt service requirements of this Agreement and the obligations proposed
to be issued by the Local Borrower and will satisfy the coverage requirements of all other debt
obligations secured by the Pledged Revenues. However, no such consent is required with
respect to issuance of Senior Revenue Obligations as defined in Section 1.01.
ARTICLE VIII-GENERAL PROVISIONS
8.01. DISCHARGE OF OBLIGATIONS.
All payments required to be made under this Agreement shall be cumulative and any
deficiencies in any Fiscal Year shall be added to the payments due in the succeeding Fiscal Year
and all Fiscal Years thereafter until fully paid. Payments shall continue to be secured by this
Agreement until all of the payments required shall be fully paid to the Corporation. If at any
time the Local Borrower shall have paid, or shall have made provision for the timely payment
of, the entire principal amount of the Loan, and as applicable, Loan Service Fee, interest, and
Grant Allocation Assessment charges, the pledge of, and lien on, the Pledged Revenues to the
Corporation shall be no longer in effect. Deposit of sufficient cash or Defeasance Obligations
may be made to effect defeasance of this Loan. However, the deposit shall be made in
irrevocable trust with a banking institution or trust company for the sole benefit of the
Corporation or its assignees and shall be subject to approval by the Corporation. There shall be
no penalty imposed by the Corporation for early retirement of this Loan.
8.02. PROJECT RECORDS AND STATEMENTS.
Books, records, reports, engineering documents, contract documents, and papers shall
be available to the authorized representatives of the Corporation, the Department and the U.S.
Environmental Protection Agency's Inspector General for inspection at any reasonable time
after the Local Borrower has received a disbursement and until five years after the date that the
Project-specific audit report,required under Subsection 2.04(4), is issued.
8.03. ACCESS TO PROJECT SITE.
The Local Borrower shall provide access to Project sites and administrative offices to
authorized representatives of the Corporation and the Department at any reasonable time. The
Local Borrower shall cause its engineers and contractors to cooperate during Project
inspections, including making available working copies of plans and specifications and
supplementary materials.
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8.04. ASSIGNMENT OF RIGHTS UNDER AGREEMENT.
The Local Borrower hereby expressly acknowledges that the Loan and all payments of
principal and interest thereon, and all proceeds thereof, but excluding the Loan Service Fee,
have been pledged and assigned to the Trustee under the Indenture as security for the payment
Of principal of, premium, if any, and interest on the Bonds and the Trustee shall be entitled to
act hereunder, and by the execution of this Agreement the Local Borrower in all respects
consents to such assignment. The Corporation, the Department and the Trustee may further
assign all or 'any parts of their rights under this Agreement without the prior consent of the
Local Borrower after written notification to the Local Borrower. The Local Borrower shall not
assign its rights and obligations under this Agreement without the prior written consent of the
Department.
8.05. AMENDMENT OF AGREEMENT.
This Agreement may be amended in writing, except that no amendment shall be
permitted which is inconsistent with any applicable statutes, rules, regulations, executive
orders, or written agreements between the Department and the U.S. Environmental Protection
Agency. This Agreement may be amended after all construction contracts are executed to re-
establish the Project cost, Loan amount, Project schedule, and Semiannual Loan Payment
amount. A final amendment establishing the final Project costs and the Loan Service Fee based
on actual Project costs shall be completed after the Department's final inspection of the Project
records.
8.06. ANNULMENT OF AGREEMENT.
The Corporation, in consultation with the Department, may unilaterally annul this
Agreement if the Local Borrower has not drawn any of the Loan proceeds within twelve months
after the effective date of this Agreement. If the Corporation unilaterally annuls this
Agreement, the Corporation will provide written notification to the Local Borrower.
8.07. SEVERABILITY CLAUSE.
If any provision of this Agreement shall be held invalid or unenforceable, the remaining
provisions shall be construed and enforced as if such invalid or unenforceable provision had
not been contained herein.
8.08. USE AS MATCHING FUNDS.
The U.S. Environmental Protection Agency has provided a class deviation from the
provisions of 40 CFR 35.3125(b)(1) to allow these second tier funds to be used as local matching
requirements for most EPA grant funded treatment works projects, including special
Appropriations Act projects.
8.09. COMPLIANCE VERIFICATION.
(1) The Local Borrower shall periodically interview a sufficient number of employees
entitled to Davis-Bacon prevailing wages (covered employees) to verify that contractors or
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subcontractors are paying the appropriate wage rates. As provided in 29 CFR 5.6(a)(5), all
interviews must be conducted in confidence. The Local Borrower must use Standard Form 1445
or equivalent documentation to memorialize the interviews. Copies of the SF 1445 are available
from EPA on request.
(2) The Local Borrower shall establish and follow an interview schedule based on its
assessment of the risks of noncompliance with Davis-Bacon posed by contractors or
subcontractors and the duration of the contract or subcontract. At a minimum, the Local
Borrower must conduct interviews with a representative group of covered employees within
two weeks of each contractor or subcontractor's submission of its initial weekly payroll data
and two weeks prior to the estimated completion date for the contract or subcontract. Local
Borrowers must conduct more frequent interviews if the initial interviews or other information
indicates that there is a risk that the contractor or subcontractor is not complying with Davis-
Bacon. Local Borrowers shall immediately conduct necessary interviews in response to an
alleged violation of the prevailing wage requirements. All interviews shall be conducted in
confidence. As an alternative, a minimum of 25% of the work force shall be interviewed over
the life of the Project and all classifications represented on the payroll must be included.
(3) The Local Borrower shall periodically conduct spot checks of a representative
sample of weekly payroll data to verify that contractors or subcontractors are paying the
appropriate wage rates. The Local Borrower shall establish and follow a spot check schedule
based on its assessment of the risks of noncompliance with Davis-Bacon posed by contractors or
subcontractors and the duration of the contract or subcontract. At a minimum, the Local
Borrower must spot check payroll data within two weeks of each contractor or subcontractor's
submission of its initial payroll data and two weeks prior to the completion date the contract or
subcontract. Local Borrowers must conduct more frequent spot checks if the initial spot check or
other information indicates that there is a risk that the contractor or subcontractor is not
complying with Davis-Bacon. In addition, during the examinations the Local Borrower shall
verify evidence of fringe benefit plans and payments thereunder by contractors and
subcontractors who claim credit for fringe benefit contributions.
(4) The Local Borrower shall periodically review contractors and subcontractors use of
apprentices and trainees to verify registration and certification with respect to apprenticeship
and training programs approved by either the U.S Department of Labor (DOL) or a state, as
appropriate, and that contractors and subcontractors are not using disproportionate numbers
of, laborers, trainees and apprentices. These reviews shall be conducted in accordance with the
schedules for spot checks and interviews described in items (2) and (3) above.
(5) Local Borrowers must immediately report potential violations of the Davis-Bacon
prevailing wage requirements to the EPA Davis-Bacon contact Sheryl Parsons at
Parsons.Sheryl@el�amail.elia. ov and to the appropriate DOL Wage and Hour District Office
listed at h tt p:Z Z www.dol.Qov/esa contacts_whdyarnerica2.htm.
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ARTICLE IX-CONSTRUCTION CONTRACTS AND INSURANCE
9.01. AUTHORIZATION TO AWARD CONSTRUCTION CONTRACTS.
The following documentation is required to receive the Department's authorization to
award construction contracts:
(1) Proof of advertising.
(2) Award recommendation, bid proposal, and bid tabulation (certified by the
responsible engineer).
(3) Certification of compliance with the conditions of the Department's approval of
competitively or non-competitively negotiated procurement,if applicable.
(4) Certification Regarding Disbarment, Suspension, Ineligibility and Voluntary
Exclusion.
(5) Assurance that the Local Borrower and contractors are in compliance with
Section 1606 with labor standards, including prevailing wage rates established for its locality by
the U.S. Department of Labor under the Davis-Bacon Act for Project construction.
9.02. SUBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS.
After the Department's authorization to award construction contracts has been received,
the Local Borrower shall submit:
(1) Contractor insurance certifications.
(2) Executed Contract(s).
(3) Notices to proceed with construction.
9.03. INSURANCE REQUIRED.
The Local Borrower shall cause the Project, as each part thereof is certified by the
engineer responsible for overseeing construction as completed, and the Water and Sewer
Systems (hereafter referred to as "Revenue Producing Facilities') to be insured by an insurance
company or companies licensed to do business in the State against such damage and
destruction risks as are customary for the operation of Revenue Producing Facilities of like size,
type and location to the extent such insurance is obtainable from time to time against any one or
more of such risks.
The proceeds of insurance policies received as a result of damage to, or destruction of,
the Project or the other Revenue Producing Facilities, shall be used to restore or replace
damaged portions of the facilities. If such proceeds are insufficient, the Local Borrower shall
provide additional funds to restore or replace the damaged portions of the facilities. Repair,
construction or replacement shall be promptly completed.
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ARTICLE X-DETAILS OF FINANCING
10.01. PRINCIPAL AMOUNT OF LOAN.
The estimated principal amount of the Loan is $2,852,785,which consists of$2,831,985 to
be disbursed to the Local Borrower and$20,800 of Capitalized Interest.
Capitalized Interest is not disbursed to the Local Borrower,but is amortized via periodic
Loan repayments as if it were actually disbursed. Capitalized Interest is computed at the
Financing Rate, or rates, set for the Loan. It accrues and is compounded annually from the time
when disbursements are made until six months before the first Semiannual Loan Payment is
due. Capitalized Interest is estimated prior to establishing the schedule of actual
disbursements.
If the total amount disbursed within eighteen months after the effective date of this
Agreement is less than half of the Loan proceeds amount authorized for disbursement, the
Department may unilaterally reduce the amount authorized for disbursement. Such a
reduction would not affect the total authorized Loan amount.
10.02. LOAN SERVICE FEE.
The Loan Service Fee is estimated as $56,640 for the Loan amount authorized to date.
The fee represents two percent of the Loan amount excluding Capitalized Interest; that is, two
percent of $2,831,985. The Loan Service Fee amount shall be revised with any increase or
decrease amendment. The Loan Service Fee is based on actual Project costs and assessed in the
final amendment. The Local Borrower shall pay the Loan Service Fee from the first
available repayments following the final amendment.
Capitalized Interest is computed on the assessed Loan Service Fee at the Financing Rate,
or rates and included in the final amendment. It accrues and is compounded annually from the
final amendment date until six months before the first Semiannual Loan Payment is due. A
service fee assessed in a final amendment occurring later than six months before the first
Semiannual Loan Payment date would not accrue Capitalized Interest charges.
10.03. FINANCING RATE.
The Financing Rate on the unpaid principal of the Loan amount specified in
Section 10.01 is 2.77 percent per annum. The Financing Rate equals the sum of the interest rate
and the Grant Allocation Assessment Rate. The interest rate is 1.385 percent per annum and the
Grant Allocation Assessment rate is 1.385 percent per annum. However, if this Agreement is
not executed by the Local Borrower and returned to the Department before April 1, 2012, the
Financing Rate may be adjusted. A new Financing Rate shall be established for any funds
provided by amendment to this Agreement.
10.04. LOAN TERM.
The Loan shall be repaid in 40 Semiannual Loan Payments.
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10.05. REPAYMENT SCHEDULE.
The Semiannual Loan Payment shall be computed based upon the principal amount of
the Loan plus the estimated Loan Service Fee and the principle of level debt service. The
amount of Loan proceeds authorized for disbursement and associated Capitalized Interest will
be treated as the Loan principal for computing the Semiannual Loan Payment. The Semiannual
Loan Payment amount may be adjusted,by amendment of this Agreement, based upon revised
information. After the final disbursement of Loan proceeds, the Semiannual Loan Payment
shall be based upon the actual Project costs and the Loan Service Fee, and actual dates and
amounts of disbursements, taking into consideration any previous payments. Actual Project
costs shall be established after the Department's inspection of the completed Project and
associated records. The Corporation will deduct the Loan Service Fee and all associated interest
from the first available repayments following the final amendment.
Each Semiannual Loan Payment shall be in the amount of $95,224 until the payment
amount is adjusted by amendment. The interest and Grant Allocation Assessment portions of
each Semiannual Loan Payment shall be computed, using their respective rates, on the unpaid
balance of the principal amount of the Loan, which principal includes Capitalized Interest.
Interest (at the Financing Rate) also shall be computed on the estimated Loan Service Fee. The
interest and Grant Allocation Assessment on the unpaid balance shall be computed as of the
due date of each Semiannual Loan Payment.
Semiannual Loan Payments shall be paid to, and must be received by, the Trustee
beginning on April 15, 2013 and semiannually thereafter on October 15 and April 15 of each
year until all amounts due hereunder have been fully paid. Funds transfer shall be made by
electronic means.
The Semiannual Loan Payment amount is based on the total amount owed of$2,909,425,
which consists of the Loan principal and the estimated Loan Service Fee.
10.06. PROJECT COSTS.
The Local Borrower, the Corporation and the Department acknowledge that the actual
Project costs have not been determined as of the effective date of this Agreement. Project cost
adjustments may be made as a result of Project changes agreed upon by the Department.
Capitalized Interest will be recalculated based on actual dates and amounts of Loan
disbursements. If the Local Borrower receives other governmental financial assistance for this
Project, the costs funded by such other governmental assistance will not be financed by this
Loan. The Department shall establish the final Project costs after its final inspection of the
Project records. Changes in Project costs may also occur as a result of the Local Borrower's
Project audit or a Department audit. The Local Borrower agrees to the following estimates of
Project costs:
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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PROJECT COSTS
CATEGORY COST
Allowance costs 240,448
Construction and Demolition 2,325,273
Contingencies 116,264
Technical Services After Bid Opening 150,000
Subtotal (Disbursable Amount) 2,831,985
Capitalized Interest 20,800
TOTAL (Loan Principal Amount) 2,852,785
10.07. PROJECT SCHEDULE.
The Local Borrower agrees by execution hereof:
(1) Completion of Project construction is scheduled for October 15,2012.
(2) The Loan Debt Service Account shall be established and Monthly Loan Deposits
shall begin no later than October 15,2012.
(3) The initial annual certification required under Subsection 2.01(10) of this
Agreement shall be due January 15, 2013. Thereafter the certification shall be submitted no later
than September 30 of each year until the final Semiannual Loan Payment is made.
(4) The first Semiannual Loan Payment in the amount of $95,224 shall be due
April 15,2013.
10.08. SPECIAL CONDITIONS.
Prior to any funds being released, the Local Borrower shall submit;
(1) An application page signed by the Mayor as provided in the Resolution;and
(2) A Legal Opinion addressing the availability of pledged revenues, the right to
increase rates, and subordination of the pledge.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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ARTICLE XI-EXECUTION OF AGREEMENT
This Loan Agreement WW590600 shall be executed in three or more counterparts, any of
which shall be regarded as an original and all of which constitute but one and the same
instrument.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
its behalf by its Chief Executive Officer and the Local Borrower has caused this Agreement to be
executed on its behalf by its Authorized Representative and by its affixed seal. The effective
date of this Agreement shall be as set forth below by the Chief Executive Officer of the
Corporation.
for
FLORIDA WATER POLL UT NTROL FINANCING CORPORATION
u
.... t „ -- ... Offi� ..� � Date
f .�. .,
� iie ecutiv
�
1 ^'
ell
d appr ed by It ' -orporate Se.
Revi wed�ary � Secretary
for
CI`, Y OF WIN,„TER SPRINGS
�. lay r� ..._
---
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I attest to the opinion expressed in Section
Attest 2.03, entitl 1 -egal Authorization.
� r
,~r
le... . Att
City C rk City IT ty orney
SEAL:
APPIR.0"AD AND ACCEPTED BY THE STATE OF FLORIDA DEPARTMENT OF
ENVIRONMENTAL PROTECTION.
""
Deputy Director
Division of Water Resource Management
Attachment included as part of this Agreement:
Attachment A-Certificat
ion Applicability to Sinle Audit Act Re col rting
30