HomeMy WebLinkAbout2004 02 23 Regular 503
Line of Credit. doc
COMMISSION AGENDA
ITEM 503
Consent
Information
Public Hearing
Regular X
'J--
MGR. j /Dept.
February 23, 2004
Meeting
REQUEST: The City Manager requesting approval of Resolution 2004-10 authorizing the Mayor and
City Manager to execute a non-revolving line of credit loan agreement to finance municipal projects, not
to exceed $2,500,000.
PURPOSE: This request is needed to get Commission approval of a resolution authorizing the Mayor
and City Manager to execute a line of credit to be used to finance certain municipal projects.
CONSIDERATION:
On December 8, 2003 the Commission gave consent to issue an RFP for a bank qualified non-revolving
line of credit to finance municipal projects.
An RFP was sent out and two out of three banks solicited responded (see attached Summary ofRFP
Responses). The recommendation 'of our financial advisor, David Moore of The PFM Group, is to
accept the proposal of SunTrust Bank, N.A. based on favorable ranking on the following criteria:
./ Lowest overall borrowing cost to the City,
./ Lower legal fees,
./ Their past experience with similar transactions.
The proposed Loan Agreement (attached) between SunTrust Bank, N.A. and the City of Winter Springs
indicates an available balance not to exceed $2,500,000 with a final maturity date of June 1,2018. The
interest rate will be the one month LIBOR rate plus 1.05%, divided by 1.40. The note allows for
prepayment without penalty.
Resolution #2004-10 is needed to authorize the Mayor to execute and deliver, and the City Clerk to
attest, on behalf of the City, the Loan Agreement and Note, attached and to authorize the Mayor, City
Manager, City Attorney, City Clerk and City Finance Director to execute and deliver such documents as
may be necessary for the full, punctual and complete performance of the terms contained in the
agreement.
A list ofthe proposed municipal projects is incorporated with the Loan Agreement and shown below:
Proiect
Parker Property Improvements
Expansion of City Hall
Expansion of Police Building
New Public Works Facility
Fire Truck
Wincey Property Purchase
Amount
$100,000.00
600,000.00
100,000.00
600,000.00
300,000.00
200,000.00
Source of Payments
Park Impact Fees
Public Building Impact Fees
Public Building Impact Fees
Public Building Impact Fees
General Fund
Park Impact Fees
Initial Draw
$1,900,000.00
Other - to be determined
600,000.00
$2,500,000.00
Total Loan
FUNDING: N/A
RECOMMENDATIONS: Approval of Resolution #2004-l0
ATTACHMENTS:
Summary ofRFP Responses provided by David Moore, The PFM Group
Resolution #2004-10
Loan Agreement
Agenda Item 206 from December 8, 2003
COMMISSION ACTION:
~
:::::: PFM.
The PFM Group
Public Finandal Management, Inc.
PFM Asset Management LLC
PFM Advisors
Lincoln Plaza
Suite 1170
300 S. Orange Avenue
Ortando,FL
32801-3470
407 648-2208
407-648-1323 fax
www.pfm.com
] anuary 5, 2004
Memorandum
To:
From:
Ron McLemore
David Moore
Rebecca Peterson
Re:
$2.s:MM Bank Loan, Series 2004
Summary of RFP Responses
In its capacity as the financial advisor to the City of Winter Springs, Florida (the "City"), Public
Financial Management, Inc. ("PFM") has revie\ved the proposals received for the City's "Request
for Proposals for Capital Improvement Revenue Note, Series 2004 Bank Qualified Non-Revolving
Line of Credit & Term Loan." Out of the three banks solicited, proposals were received from Bank
of America, N.A. and SunTrust Bank, N.A. A summary of each of the two (2) proposals is below:
Bank of America SunTrust Bank
Line of Credit Variable Rate 63.7% of l-mo. LIB OR + .90%, (l-mo LIBOR + 1.05%)/1.40%,
Formula reset monthly reset monthly
@ 12/23LIBOR (1.14125%)
@ 1.50% LIBOR 1.63% 1.57%
@ 2.00% LIBOR 1.86% 1.82%
@ 3.00% LIB OR 2.17% 2,18%
2.81% 2.89%
Term Loan Fixed Rate Corresponding variable-to-fixed 7 -year Swap Rate +
swap rate on date of conversion. 1.00%)/1.40%
Currently = 3.93% Currently = 3.66%
Prepayment None if Term Loan kept at a None if Term Loan kept a a
variable rate. Subject to Swap variable rate. Subject to Swap
termination "penalty" or termination "penalty" or
"benefit" subject to interest rates "benefit" subject to interest rates
at the time of termination. at the time of termination.
Legal Counsel Fees $2,500 $2,000
Onerous Covenants None. Additional parity debt secured by
the covenant to budget &
appropriate shall be subject to
revenue coverage test of l.5x
maximum annual debt service.
~
~PFM'
Ron McLemore
January 5, 2004
Page 2
Recommendation
In a low interest rate environment (i.e. the current environment) the variable rate formula and fixed
rate formula for interest provided by SunTrust Bank provide a lower borrowing cost than that of
Bank of America. In a high interest rate environment, the variable rate formula provided by Bank of
America provides a lower borrowing cost than that of SunTrust Bank, but the fixed rate formula still
calculates higher than that of SunTrust Bank. Therefore, PFM recommends the City select
SunTrust to provide the $2.5MM Capital Improvement Revenue Note, Series 2004. The proposal
that was received from SunTrust Bank, N.A. provides the most favorable proposal to the City based
on:
. Lowest overall borrowing cost to the City on a variable rate and fixed rate basis,
. Lower legal fees,
. Their past experience with similar transactions.
Once the City has made its final selection for the provider of the Capital Improvement Revenue
Note, Series 2004 a commitment letter will be signed and the counsels will begin to prepare
documents. If you have any further questions, please contact us at 407-648-2208.
RESOLUTION NO. 2004-10
A RESOLUTION OF THE CITY OF WINTER SPRINGS,
FLORIDA: (i) AUTHORIZING THE ISSUANCE OF NOT
EXCEEDING $2,500,000 OF DEBT TO FINANCE THE
COST OF CAPITAL PROJECTS IN AND FOR THE CITY
AS MORE SPECIFICALLY DESCRIBED IN THE LOAN
AGREEMENT ATTACHED HERETO; (ii) AUTHORIZING
THE EXECUTION AND DELIVERY OF SAID LOAN
AGREEMENT WITH SUNTRUST BANK PURSUANT TO
WHICH THE CITY WILL ISSUE A NOTE TO SECURE
THE REPAYMENT OF SAID LOAN; (iii) AUTHORIZING
THE CITY'S COVENANT TO BUDGET AND
APPROPRIATE SUFFICIENT LEGALLY AVAILABLE
NON-AD VALOREM REVENUES AND THE PLEDGING
OF LEGALLY AVAILABLE IMPACT FEES TO PAY DEBT
SERVICE ON THE NOTE; (iv) AUTHORIZING THE
PROPER OFFICIALS OF THE CITY TO DO ANY OTHER
ADDITIONAL THINGS DEEMED NECESSARY OR
ADVISABLE IN CONNECTION WITH THE EXECUTION
OF THE LOAN AGREEMENT, THE NOTE, AND THE
SECURITY THEREFOR; (v) RATIFYING AND
APPROVING THE EXECUTION OF THE COMMITMENT
LETTER WITH SUNTRUST BANK; (vi) DESIGNATING
THE NOTE AS A "QUALIFIED TAX-EXEMPT
OBLIGATION" UNDER SECTION 265(b)(3)(B) OF THE
INTERNAL REVENUE CODE OF 1986; AND (vii)
PROVIDING CERTAIN OTHER MATTERS IN
CONNECTION THEREWITH; AND PROVIDING AN
EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER
SPRINGS, FLORIDA, as follows:
SECTION 1. FINDINGS AND AUTHORIZATION OF PROJECT.
(A) The City of Winter Springs, Florida (the "City"), pursuant to the provisions ofthe
Florida Constitution, Chapter 166, Florida Statutes, and any other applicable provisions of law
(all ofthe foregoing, collectively, the "Act") is authorized, in accordance with the Act, to borrow
money, issue bonds, notes or other obligations to finance the cost of capital expenditures for the
City's public purposes;
(B) In response to a request for proposal by the City regarding an intended borrowing
for City capital projects (the "Project"), SunTrust Bank (the "Bank") has proposed a financing in
accordance with the terms of the Bank's commitment of December 23, 2003 attached hereto as
Exhibit A (the "Commitment");
(C) In accordance with the Commitment, the Bank is willing to provide the City with
a not exceeding $2,500,000 Term Loan maturing June 1,2018 (the "Loan") on the terms set forth
{OR712327;2}
in the Commitment and documented in the form of Loan Agreement between the City and the
Bank attached hereto as Exhibit B (the "Loan Agreement");
(D) The Loan will be secured by the Loan Agreement pursuant to which the City will
issue a note (the "Note") to secure the repayment of the Loan;
(E) The City hereby accepts the Commitment and the City has determined under
Section 218.385, Florida Statutes, that it is in its best interest, taking all pricing facts of the
transaction into consideration and given the size of the proposed borrowing, to enter into the
Loan Agreement with the Bank; and
(F) The Project is a capital project appropriately undertaken by the City under the Act
and the City hereby authorizes the Project and the capital expenditures necessary to complete the
Project.
SECTION 2. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted
pursuant to the provisions of the Act and other applicable provisions of law.
SECTION 3. APPROVAL OF LOAN AGREEMENT, NOTE AND COMMITMENT.
The City hereby authorizes the Mayor or his designee (collectively the "Mayor") to execute and
deliver, and the City Clerk or her designee (collectively, the "City Clerk") to attest, on behalf of
the City, the Loan Agreement substantially in the form attached hereto as Exhibit "B" and the
Note in the form attached to the Loan Agreement made by the City to the order of Bank, with
such changes, insertions, and additions as they may approve, their execution thereof being
evidence of such approval. The City further approves and accepts the Commitment.
SECTION 4. PAYMENT OF DEBT SERVICE ON NOTE. Pursuant to the Loan
Agreement, the City will pledge to the payment of debt service on the Note legally available
impact fees in the manner provided in the Loan Agreement. Also pursuant to and subject to the
provisions of the Loan Agreement, the City covenants and agrees to appropriate in its annual
budget, by amendment, if necessary, from legally available non ad-valorem revenues of the City,
and which are lawfully available to pay debt service on the Note, amounts sufficient to pay
principal of and interest on the Note as the same shall become due to the extent legally available
impact fees are insufficient to pay any such principal and interest.
SECTION 5. AUTHORIZATION OF OTHER DOCUMENTS TO EFFECT
TRANSACTION. To the extent that other documents, certificates, opinions, or items are needed
to effect any of the transactions referenced in this Resolution, the Loan Agreement or the Note
and the security therefore, the Mayor, the City Manager, the City Attorney, the City Clerk and
the City Finance Director are hereby authorized to execute and deliver such documents,
certificates, opinions, or other items and to take such other actions as are necessary for the full,
punctual, and complete performance of the covenants, agreements, provisions, and other terms as
are contained herein and in the documents included herein by reference.
SECTION 6. DESIGNATION OF NOTE AS BANK QUALIFIED. The City
designates the Note as a "qualified tax-exempt obligation" within the meaning of Section
265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City does not
reasonably anticipate that the City, any subordinate entities of the City, and issuers of debt the
issue "on behalf' of the City, will during the calendar year 2004 issue more than $10,000,000 of
{OR712327;2}
2
"tax-exempt" obligations, exclusive of those obligation described in Section 265(b)(3)(C)(ii) of
the Code.
SECTION 7. PAYING AGENT AND REGISTRAR. The City hereby accepts the
duties to serve as Registrar and Paying Agent for the Note.
SECTION 8. LIMITED OBLIGA nON. The obligation of the City to repay amounts
under the Loan Agreement and the Note are limited and special obligations, payable solely from
the sources and in the manner set forth in the Loan Agreement and shall not be deemed a pledge
of the faith and credit or taxing power of the City.
SECTION 9. EFFECT OF PARTIAL INVALIDITY. If anyone or more provisions of
this Resolution, the Loan Agreement or the Note shall for any reason be held to be illegal or
invalid, such illegality or invalidity shall not effect any other provision of this Resolution or the
Note, but this Resolution, the Loan Agreement and the Note shall be construed and enforced as if
such illegal or invalid provision had not been contained therein. The Note and Loan Agreement
shall be issued and this Resolution is adopted with the intent that the laws of the State of Florida
shall govern their construction.
SECTION 10. EFFECTIVE DATE. This Resolution shall take effect immediately upon
its adoption; provided, however, to the extent that the Loan Agreement, the Note, or any other
documents related to the matters set forth herein have been executed prior to the execution date
of this Resolution, this Resolution shall be retroactive to the date of execution of such
documents.
RESOLVED in regular meeting on this 23rd day of February, 2004.
CITY OF WINTER SPRINGS, FLORIDA
By:
Mayor, City of Winter Springs, Florida
(SEAL]
ATTEST:
By:
City Clerk of Winter Springs, Florida
Approved as to form:
City Attorney
City of Winter Springs, Florida
(OR712327;2}
3
LOAN AGREEMENT
Dated as of March 1, 2004
By and Between
THE CITY OF WINTER SPRINGS, FLORIDA
(the" City")
and
SUNTRUST BANK
(the "Bank")
{OR715482;2}
TABLE OF CONTENTS
(The Table of Contents for this Loan Agreement is for convenience of reference only and
is not intended to define, limit or describe the scope or intent of any provisions of this Loan
Agreement. )
Page
ARTICLE I DEFINITION OF TERMS. ......... .............. ................................................................ 1
Section 1.01. Definitions................................................................................................. 1
Section 1.02. Interpretation............................................................................................. 5
Section 1.03. Titles and Headings ......... ..................... ...... ............. .............. .................... 5
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES ....................... 5
Section 2.01. Representations and Warranties of City. The City represents and
warrants to the Bank: as follows: .........................................................................................5
Section 2.02. Representations and Warranties of Bank .................................................. 6
ARTICLE III THE NOTE ............... .............. ............................. ........................................ ... ....... 6
Section 3.01. Purpose and Use ........................................................................................ 6
Section 3.02. The Note.................................................................................................... 6
Section 3.03. Adjustments to Note Rate.......................................................................... 7
Section 3.04. Compliance with Section 215.84............................................................... 7
Section 3.05. Conditions Precedent to Issuance of Note................................................. 7
Section 3.06. Registration of Transfer; Assignment of Rights ofBank:.......................... 9
Section 3.07. Ownership ofthe Note.......................................................................... ..... 9
Section 3.08. Use of Proceeds of Note Permitted Under Applicable Law.................... 10
Section 3.09. Authentication......................................................................................... 10
ARTICLE IV COVENANTS OF THE CITy............................................................................ 10
Section 4.01. Performance of Covenants......................... ........................ .......... ........... 10
Section 4.02. Payment of Note ...................................... ...................... .......................... 10
Section 4.03. Covenant to Budget and Appropriate ...................................................... 10
Section 4.04. Tax Covenant............................ ............................................................... 11
Section 4.05. Budget and Other Financial Information................................................. 12
Section 4.06. Compliance with Laws and Regulations ................................................. 12
Section 4.07 . Anti-Dilution Test......................................... ........... ............................... 12
Section 4.08. Application of Proceeds of Note ............................................................. 12
ARTICLE V EVENTS OF DEFAULT AND REMEDIES ........................................................ 13
Section 5.01. Events of Default .................................................................... ............. .... 13
Section 5.02. Exercise of Remedies.................................... .......................................... 14
Section 5.03. Remedies Not Exclusive................................................ .......................... 14
Section 5.04. Waivers, Etc............................................................................................ 14
ARTICLE VI MISCELLANEOUS PROVISIONS ................................................ .................... l5
Section 6.01. Covenants of City, Etc.; Successors ........................................................ 15
Section 6.02. Term of Agreement......................... .................. ......................... ............. 15
{OR715482;2}
Section 6.03. Notice of Changes in Fact ....................................... ................................ 15
Section 6.04. Amendments and Supplements ...............................................................15
Section 6.05. Notices..................................................................................................... 15
Section 6.06. Benefits Exclusive.................................. ...................... ........................... 16
Section 6.07. Severability .............................. ................................. .............. '" .............. 16
Section 6.08. Payments Due on Saturdays, Sundays and Holidays .............................. l6
Section 6.09. Counterparts ................................................................. ............... ......... ... 16
Section 6.10. Applicable Law........................................ ...... ......................................... 16
Section 6.11. No Personal Liability............................................................................... l7
Section 6.12. Defeasance............................................................................................... 17
Section 6.13. Incorporation by Reference ..................................................................... 17
Exhibit A
Form of Note....................................................................................................... A-I
{OR715482;2}
11
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement"), made and entered into this 1st day of
March, 2004, by and between THE CITY OF WINTER SPRINGS, FLORIDA (the "City"), a
municipal corporation of the State of Florida and its successors and assigns, and SUNTRUST
BANK, a Georgia banking corporation authorized to do business in Florida, and its successors
(the "Bank").
WIT N E SSE T H:
WHEREAS, capitalized terms used in these recitals and not othelWise defined shall have
the meanings specified in Article I of this Agreement;
WHEREAS, the City, pursuant to the provisions of the Florida Constitution, Chapter 166,
Florida Statutes and any other applicable provisions of law (all of the foregoing, collectively, the
"Act"), and Resolution No. 2004-10, adopted by the City on February 23, 2004, is authorized to
borrow money, issue bonds, notes or other obligations to finance the costs of capital expenditures
for the City's public purpose; and
WHEREAS, in response to a request for proposal by the City regarding an intended
borrowing for City owned and operated capital projects (the "Project"), and related costs of
issuance, the Bank submitted its commitment, dated December 23, 2003, to the City (the
"Commitment"); and
WHEREAS, the City has accepted the Commitment and the Bank is willing to purchase
the City's Note (as hereinafter defined), but only upon the terms and conditions of this
Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITION OF TERMS
Section 1.01. Definitions. Capitalized terms used in this Agreement and not othelWise
defined shall have the respective meanings as follows:
"Act" shall have the meaning assigned to that term in the recitals hereof.
"Advance" shall mean the principal amount of each payment in the minimum amount of
$100,000 made by the Bank to or on the order of the City pursuant to a request for an Advance
made by the City.
"Agreement" shall mean this Loan Agreement and all modifications, alterations,
amendments and supplements hereto made in accordance with the provisions hereof.
"Available Balance" shall mean $2,500,000, reduced by the aggregate amount of
Advances previously made to the Issuer.
{OR715482;2}
"Bank" shall mean SunTrust Bank, and its successors.
"Bond Counsel" shall mean, Akerman Senterfitt, Orlando, Florida, or any other attorney
at law or firm of attorneys of nationally recognized standing in matters pertaining to the federal
tax exemption of interest on obligations issued by states and political subdivisions.
"Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which
banks in Orlando, Florida are authorized or required to be closed.
"City" shall mean the City of Winter Springs, Florida, a municipal corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time,
and the applicable rules and regulations promulgated thereunder.
"Debt Service" means principal and interest, and other debt-related costs, due in
connection with the Note, as applicable, and any and all subordinate debt and any other liabilities
of the City for borrowed money.
"Default Rate" shall mean twelve percent (12%) provided such rate shall not exceed the
highest rate of interest allowed by applicable law.
"Designated Revenues" shall mean legally available non-ad valorem revenues of the City
budgeted and appropriated in accordance with Section 4.03 hereof and legally available impact
fees from all or any portion of the Project.
"Determination of Taxability" shall mean, with respect to the Note, the circumstance that
shall be deemed to have occurred if interest paid or payable on the Note becomes includable for
federal income tax purposes in the gross income of the Noteholder as a consequence of any act,
omission or event whatsoever, and regardless of whether the same was within or beyond the
control of the City. A Determination of Taxability will be deemed to have occurred upon (a) the
receipt by the City or a Noteholder of an original or a copy of an Internal Revenue Service
Technical Advice Memorandum or Statutory Notice of Deficiency which holds that any interest
payable on the Note is includable in the gross income of the Noteholder; or (b) the issuance of
any public or private ruling of the Internal Revenue Service that any interest payable on the Note
is includable in the gross income of a Noteholder. For all purposes of this definition, a
Determination of Taxability will be deemed to occur on the date as of which the interest on the
Note is deemed includable in the gross income of the Noteholder. A Determination of Taxability
shall not occur in the event such interest is taken into account in determining adjusted current
earnings for the purpose of the alternative minimum tax imposed on corporations.
In the case of (a) and (b) above, no Determination of Taxability shall be deemed to occur
unless the City has been given timely written notice that such a determination has been made by
the Internal Revenue Service and an opportunity to participate in and seek, at its own expense, a
final administrative deternlination or determination by a court of competent jurisdiction (from
which no further right of appeal exists) as to the existence of such event of taxability; provided
that the City, at its own expense, delivers to the Bank an opinion of Bond Counsel acceptable to
the Bank to the effect that such appeal or action for judicial or administrative review is not
without merit and there is a reasonable possibility that the judgment, order, ruling or decision
{OR715482;2}
2
from which such appeal or action for judicial or administrative review is taken will be reversed,
vacated or otherwise set aside.
"Event of Default" shall mean an Event of Default as defined in Section 5.01 of this
Agreement.
"Federal Securities" shall mean:
1. Cash
2. U.S. Treasury Certificates, Notes and Bonds (including State and Local
Government Series - "SLGs")
3. Direct obligations of the Treasury which have been stripped by the Treasury
itself, CATS, TIGRS and similar securities.
4. Resolution Funding Corp. (REFCORP). Only the interest component of
REFCORP strips which have been stripped by request to the Federal Reserve
Bank of New York in book entry form are acceptable.
5. Pre-refunded municipal bonds rated "Aaa" by Moody's Investors Service
("Moody's") and "AAA" by Standard & Poor's Ratings Group ("S&P"). If,
however, the issue is only rated by S&P, then the pre-refunded bonds must have
been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or
AAA rated pre-refunded municipals to satisfy this condition.
6. Obligations issued by the following agencies which are backed by the full faith
and credit of the U.S.:
a. U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership
b. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
c. Federal Financing Bank
d. General Services Administration
Participation certificates
e. U.S. Maritime Administration
Guaranteed Title XI financing
{OR715482;2}
3
f. u.s. Department of Housing and Urban Development (RUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. government guaranteed
debentures and U.S. Public Housing Notes and Bonds -
U.S. government guaranteed public housing notes and bonds
"Final Maturity Date" shall mean the date on which all principal and all unpaid interest
accrued on the Note shall be due and payable in full, which date shall be, if not sooner due to
acceleration or prepayment, June 1,2018.
"Fiscal Year" shall mean the 12-month period commencing October 1 of each year and
ending on the succeeding September 30, or such other 12-month period as the City may
designate as its "fiscal year" as permitted by law.
"Index Rate" shall mean the one month LIBOR Rate, as published in the Wall Street
Journal (the "Index Rate") on the first calendar day of each month on which such rate is
published. Such rate shall become effective as of the first calendar day of such month.
"LIBOR Rate" shall mean the London Interbank Offered Rate offered by a specified
group of London banks for U.S. dollar deposits of a stated maturity.
"Loan" shall refer to an amount equal to the outstanding and unpaid principal of the Note,
together with unpaid interest which has accrued, in the initial aggregate principal amount of not
exceeding $2,500,000 granted by the Bank of the City pursuant to and in accordance with this
Agreement.
"Maximum Corporate Tax Rate" shall mean (a) on the date of issuance of the Note, 35%
and (b) thereafter, the maximum marginal rate of income tax imposed on corporations under
Section 11 of the Code.
"Note" shall mean the Note issued by the City under this Agreement.
"Note Rate" shall mean the Tax Exempt Rate, as modified by any Adjustments (as
defined in Section 3.03 hereof), or, if applicable, the Taxable Rate. The Note Rate shall be
calculated on the basis of a 360-day year of 12, 30-day months.
"Noteholder" shall mean the Bank as the holder of the Note and any subsequent
registered holder ofthe Note.
"Project" shall mean the construction and acquisition of various City owned and operated
capital projects.
"Resolution" shall mean Resolution No. 2004-10, adopted at a meeting of the City
Common on February 23, 2004 which, among other things, authorized and confirmed the
borrowing of the Loan and execution and delivery of this Agreement and the issuance of the
Note.
{OR715482;2}
4
"Taxable Rate" shall mean the Prime Rate less 0.5% pr annum based upon a 360-day year
based upon 12, 3D-day months, or (if lower only) the maximum interest rate permitted by
applicable law.
"Tax Exempt Rate" shall mean the Index Rate, plus 1.05% divided by 1.40.
Section 1.02. Interpretation. Unless the context clearly requires otherwise, words of
masculine gender shall be construed to include correlative words of the feminine and neuter
genders and vice versa, and words of the singular number shall be construed to include
correlative words of the plural number and vice versa. Any capitalized terms used in this
Agreement not herein defined shall have the meaning ascribed to such terms in the Resolution.
This Agreement and all the terms and provisions hereof shall be construed to effectuate the
purpose set forth herein and to sustain the validity hereof.
Section 1.03. Titles and Headings. The titles and headings of the Articles and Sections
of this Agreement, which have been inserted for convenience of reference only and are not to be
considered a part hereof, shall not in any way modify or restrict any of the terms and provisions
hereof, and shall not be considered or given any effect in construing this Agreement or any
provision hereof or in ascertaining intent, if any question of intent should arise.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Section 2.01. Representations and Warranties of City. The City represents and
warrants to the Bank as follows:
(a) Existence. The City is a municipal corporation of the State of Florida, duly
created and validly existing under the laws of the State of Florida, with full power to enter into
this Agreement, to perform its obligations hereunder and to issue and deliver the Note to the
Banle The making, execution and performance of this Agreement on the part of the City and the
issuance and delivery of the Note have been duly authorized by all necessary action on the part
of the City and will not violate or conflict with the Act, or any agreement, indenture or other
instrument by which the City or any of its material properties is bound.
(b) Validity. Etc. This Agreement, the Note and the Resolution are or will be valid
and binding obligations of the City enforceable against the City in accordance with their
respective terms, except to the extent that enforceability may be subject to valid bankruptcy,
insolvency, financial emergency, reorganization, moratorium or similar laws relating to or from
time to time affecting the enforcement of creditors' rights and except to the extent that the
availability of certain remedies may be precluded by general principles of equity.
(c) No Financial Material Adverse Change. No financial material adverse change has
occurred in the City since the last audited financial statement was prepared.
(d) Powers of City. The City has the legal power and authority to covenant to budget
and appropriate the Designated Revenues as described herein.
{OR715482;2}
5
Section 2.02. Representations and Warranties of Bank. The Bank represents and
warrants to the City as follows:
(a) Existence. The Bank is a Georgia banking corporation, authorized to do business
in the State of Florida, with full power to enter into this Agreement, to perform its obligations
hereunder and to make the Loan. The performance of this Agreement on the part of the Bank
and the making of the Loan have been duly authorized by all necessary action on the part of the
Bank and will not violate or conflict with applicable law or any material agreement, indenture or
other instrument by which the Bank or any of its material properties is bound.
(b) Validitv. This Agreement is a valid and binding obligation of the Bank
enforceable against the Bank in accordance with its terms, except to the extent that enforceability
may be subject to valid bankruptcy, insolvency, financial emergency, reorganization, moratorium
or similar laws relating to or from time to time affecting the enforcement of creditors' rights (and
specifically creditors' rights as the same relate to banks) and except to the extent that the
availability of certain remedies may be precluded by general principles of equity.
(c) Knowledge and Experience. The Bank (i) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of making the
Loan and investing in the Note, (ii) has received and reviewed such financial information
concerning the City as it has needed in order to fairly evaluate the merits and risks of making the
Loan and investing in the Note; (iii) is an "accredited investor" as such term is defined in
Regulation D to the Securities Act of 1933; and (iv) is purchasing the Note as an investment for
its own account and not with a view toward resale to the public. The Bank will not transfer the
Note except to other banks affiliated with Sun Trust Bank or any subsidiary thereof.
ARTICLE III
THE NOTE
Section 3.01. Purpose and Use. On the date of this Agreement, the Bank shall make
available to the City the Loan in the principal amount of not exceeding Two Million Five
Hundred Thousand Dollars ($2,500,000). The proceeds available under this Agreement shall be
used to finance components of the Project.
Section 3.02. The Note. The Note shall be substantially in the form set forth as
Exhibit "A" to this Agreement. The general terms of the Note shall be as follows:
(a) Amount of Note. The aggregate principal amount of the Note is expressly limited
to not exceeding Two Million Five Hundred Thousand Dollars ($2,500,000).
(b) Interest. The Note shall bear interest at the Note Rate. Upon the occurrence of
one or more of the events specified in Section 3.03 of this Agreement, the Note Rate shall be
adjusted as therein provided. Interest on the Note shall be computed on the basis of 12, 30-day
months and a 360-day year.
(c) Prepayments. The Note shall be subject to prepayment at the option of the City,
in whole or in part, from any legally available monies at a prepayment price of 100% of the
{OR715482;2}
6
principal amount to be redeemed, plus accrued interest to the prepayment date. Each prepayment
shall be made on such date and in such principal amount as shall be specified by the City in a
written notice delivered to the Noteholder not more than fifteen (15) and not less than five (5)
days prior to the specified prepayment date. Any prepayments shall be applied to the sums last
maturing under the Note.
Section 3.03. Adjustments to Note Rate. The Note Rate shall be subject to adjustment
by the Bank as hereinafter described. If a Determination of Taxability occurs the interest rate on
the Note shall be adjusted to the Taxable Rate. If because of the enactment of any amendments
to existing law, the effect of which would adversely affect the Bank's after-tax yield, then the
Bank shall have the right to adjust the Note Rate in order to maintain the same after-tax yield as
if such events had not occurred. If the Note shall not be "a qualified tax exempt obligation" as
defined in Section 265(b )(3) of the Code, then the Bank shall have the right to adjust the Note
Rate to maintain the same yield as if such event had not occurred. Any adjustments in this
Section 3.03 shall survive payment of the Note until such time as the federal statute of
limitations under which the interest on the Note could be declared taxable under the Code shall
have expired. For so long as the Note is owned by the Bank, the Note Rate set forth above
assumes a maximum corporate tax rate of 35%. In the event of a change in the maximum
corporate tax rate applicable to the Bank, so long as the Note is owned by the Bank, or its
successors, the Bank shall have the right to adjust such Note Rate in order to maintain the same
after-tax yield.
Section 3.04. Compliance with Section 215.84. The City represents, warrants, and
covenants that the Note Rate, as currently calculated in accordance with Section 215.84, Florida
Statutes, is in compliance with Section 215.84, Florida Statutes.
Section 3.05. Conditions Precedent to Issuance of Note. Prior to or simultaneously
with the delivery of the Note by the City, there shall be filed with the Bank the following, each in
form and substance reasonably acceptable to the Bank:
(a) an opinion of counsel to the City substantially to the effect that (i) the Resolution
has been duly adopted and this Agreement and the Note has been duly authorized, executed and
delivered by the City and each constitutes a valid, binding and enforceable agreement of the City
in accordance with their respective terms, except to the extent that the enforceability of the rights
and remedies set forth herein may be limited by bankruptcy, insolvency, financial emergency or
other laws affecting creditors' rights generally or by usual equity principles; (ii) the City's
execution, delivery and performance of this Agreement and execution and issuance of the Note
are not subject to any authorization, consent, approval or review of any governmental body,
public officer or regulatory authority not heretofore obtained or effected, and no taxes are
payable in connection therewith; (iii) the execution, issuance and delivery of the Note has been
duly and validly authorized by the City, and the Note constitutes a valid and binding special
obligation of the City enforceable in accordance with its terms; (iv) the City (A) is a municipal
corporation duly organized and validly existing under the laws of the State of Florida, and
(B) has power and authority to adopt the Resolution, to execute and deliver this Agreement, to
execute and deliver the Note, and to consummate the transactions contemplated by such
instruments; (v) the execution, delivery and performance of the Note and this Agreement, and
compliance with the terms thereof and hereof, under the circumstances contemplated hereby, do
{OR715482;2}
7
not and will not in any material respect conflict with, or constitute on the part of the City a
breach or default under, any indenture, mortgage, deed of trust, agreement or other instrument to
which the City or to which its properties are subject or conflict with, violate or result in a breach
of any existing law, administrative rule or regulation, judgment, court order or consent decree to
which the City or its properties are subject; (vi) to the best of such counsel's knowledge, there is
no claim, action, suit, proceeding, inquiry, investigation, litigation or other proceeding, at law or
in equity, pending or threatened in any court or other tribunal, state or federal (W) restraining or
enjoining, or seeking to restrain or enjoin, the issuance, sale, execution or delivery of the Note,
(X) in any way questioning or affecting the validity or enforceability of any provision of this
Agreement, the Note, or the Resolution, (Y) in any way questioning or affecting the validity of
any of the proceedings or authority for the authorization, sale, execution or delivery of the Note,
or of any provision made or authorized for the payment thereof, or (2) questioning or affecting
the organization or existence of the City or the right of any of its officers to their respective
offices; (vii) the City has the legal power to make the capital improvements that comprise the
Project and to pay associated costs of issuance, to covenant to budget and appropriate the legally
available non-ad valorem revenues of the City and to grant a lien on the Designated Revenues as
described herein and in the Resolution; and (viii) all conditions contained in the ordinances and
resolutions ofthe City precedent to the issuance of the Note have been complied with.
(b) an opinion of Bond Counsel (who may rely on opinion of Counsel to the City),
stating that such counsel is of the opinion that: (i) this Loan Agreement constitutes a valid and
binding obligation of the City enforceable upon the City in accordance with its terms; (ii) the
Note is a valid and binding special obligation of the City enforceable in accordance with its
terms, payable solely from the sources provided therefor in this Loan Agreement; (iii) assuming
compliance by the City with certain covenants relating to requirements contained in the Code (a)
interest on the Note is excluded from gross income for purposes of federal income taxation, and
(b) interest on the Note is not an item of tax preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations; however, with respect to corporations (as
defined for federal income tax purposes), such interest is taken into account in determining
adjusted current earnings for the purpose of computing the alternative minimum tax imposed on
such corporations, (iv) the Note is exempt from intangible taxes imposed pursuant to Chapter
199, Florida Statutes, and that (v) the Note is a "qualified tax-exempt obligation" within the
meaning of Section 265(b)(3) ofthe Code.
(c) a copy of a completed and executed Form 8038-G to be filed with the Internal
Revenue Service by the City; and
(d) such other documents as the Bank reasonably may request (including, without
limitation, appropriate executed Florida Division of Bond Finance forms).
When the documents and items mentioned in clauses (a) through (d), inclusive, of this
Section shall have been filed with the Bank, and when the Note shall have been executed as
required by this Agreement, and all conditions of the Resolution have been met, the City shall
deliver the Note to or upon the order of the Bank, but only against the City's receipt of the
principal amount of the Note.
{OR715482;2}
8
Section 3.06. Registration of Transfer; Assignment of Rights of Bank. The City
shall keep at the office of the City Clerk in the City's records the registration of the Note and the
registration of transfers of the Note as provided in this Agreement. Subject to the restriction set
forth in the fourth paragraph of this Section, the transfer of the Note may be registered only upon
the books kept for the registration of the Note and registration of transfer thereof upon surrender
thereof to the City together with an assignment duly executed by the Bank or its attorney or legal
representative in the form of the assignment set forth on the form of the Note attached as
Exhibit A to this Agreement; provided, however, that the Note may be transferred only in whole
and not in part. In the case of any such registration of transfer, the City shall execute and deliver
in exchange for the Note a new Note registered in the name of the transferee. In all cases in
which the Note shall be transferred hereunder, the City shall execute and deliver at the earliest
practicable time a new Note in accordance with the provisions of this Agreement. The City may
make a charge for every such registration of transfer of a Note sufficient to reimburse it for any
tax or other governmental charges required to be paid with respect to such registration of
transfer, but no other charge shall be made for registering the transfer hereinabove granted. The
Note shall be issued in fully registered form and shall be payable in any coin or currency of the
United States.
The registration of transfer of the Note on the registration books of the City shall be
deemed to effect a transfer of the rights and obligations of the Bank under this Agreement to the
transferee. Thereafter, such transferee shall be deemed to be the Bank under this Agreement and
shall be bound by all provisions of this Agreement that are binding upon the Bank. The City and
the transferor shall execute and record such instruments and take such other actions as the City
and such transferee may reasonably request in order to confirm that such transferee has
succeeded to the capacity of Bank under this Agreement and the Note.
In the event any Note is mutilated, lost, stolen, or destroyed, the City shall execute a new
Note of like date and denomination as that mutilated, lost, stolen or destroyed, provided that, in
the case of any mutilated Note, such mutilated Note shall first be surrendered to the City, and in
the case of any lost, stolen, or destroyed Note, there first shall be furnished to the City evidence
of such loss, theft or destruction together with an indemnity satisfactory to it.
Nothing in this Agreement or in the Note shall be construed to prohibit the Bank from
granting a participation or participations in the Note to any other bank or banks affiliated with
SunTrust Bank or any subsidiary thereof. No such bank participant shall, however, be a
registered holder of the Note or any portion thereof.
Section 3.07. Ownership of the Note. The person in whose name the Note is registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or
on account of the Note shall be made only to the registered owner thereof or such owner's legal
representative. All such payments shall be valid and effectual to satisfy and discharge the
liability upon the Note, and interest thereon, to the extent of the sum or sums so paid.
The registered owner of the Note is hereby granted power to transfer absolute title thereof
by assignment thereof to a bona fide purchaser for value (present or antecedent) without notice
of prior defenses or equities or claims of ownership enforceable against such owner's assignor or
any person in the chain of title and before the maturity of the Note; provided, however, that the
{OR715482;2}
9
Note may be transferred only in whole and not in part and provided further, that no transfer shall
be permitted absent the City's (and the Bank's) receipt of a letter in form and substance similar to
the one delivered by the Bank pursuant to Section 218.385, Florida Statutes from such proposed
transferee. Every prior registered owner of the Note shall be deemed to have waived and
renounced all of such owner's equities or rights therein in favor of every such bona fide
purchaser, and every such bona fide purchaser shall acquire absolute title thereto and to all rights
represented thereby.
Section 3.08. Use of Proceeds of Note Permitted Under Applicable Law. The City
represents, warrants and covenants that the proceeds of the Note will be used solely for the
Project and costs of issuance of the Note, and that such use is permitted by applicable law.
Section 3.09. Authentication. Until the Note shall have endorsed thereon a certificate
of authentication substantially in the form set forth in Exhibit A, duly executed by the manual
signature of the Registrar and authenticating agent, it shall not be entitled to any benefit or
security under this Loan Agreement. The Note shall not be valid or obligatory for any purpose
unless and until such certificate of authentication shall have been duly adopted by the Registrar,
and such certificate of the Registrar upon the Note shall be conclusive evidence that such Note
has been duly authenticated and delivered under this Loan Agreement.
ARTICLE IV
COVENANTS OF THE CITY
Section 4.01. Performance of Covenants. The City covenants that it will perform
faithfully at all times its covenants, undertakings and agreements contained in this Agreement
and the Note or in any proceedings of the City relating to the Loan.
Section 4.02. Payment of Note.
(a) The City covenants that it will promptly pay the principal of and interest on the
Note at the place, on the dates and in the manner provided herein and in the Note, in accordance
with the terms thereof. Pursuant to Section 4.03 hereof, the City hereby irrevocably pledges
(until repayment) the Designated Revenues as security for the repayment of the Note.
(b) The Note will be a special obligation of the City secured solely by the Designated
Revenues and is payable from the Designated Revenues and as provided in Section 4.03 hereof.
The Note will not constitute a general debt, liability or obligation of the City or the State of
Florida or any political subdivision thereof within the meaning of any constitutional or statutory
provision. Neither the faith and credit nor the taxing power of the City or of the State of Florida
or any political subdivision thereof is pledged to the payment of the principal of or interest on the
Note and the Noteholder shall never have the right to compel any exercise of any ad valorem
taxing power of the City or of the State of Florida or any political subdivision thereof, directly or
indirectly to enforce such payment. The Note shall not constitute a lien upon any property of the
City except upon the Designated Revenues.
Section 4.03. Covenant to Budget and Appropriate. Until the Note is paid or deemed
paid pursuant to the provisions of this Agreement, subject to the next paragraph, the City
{OR715482;2}
10
covenants and agrees to appropriate in its annual budget, by amendment, if necessary, from
legally available non ad-valorem revenues of the City in each fiscal year and which are lawfully
available to pay debt service on the Note, amounts sufficient to pay principal of and interest on
the Note as the same shall become due. Such covenant and agreement on the part of the City to
budget and appropriate such amounts of legally available non-ad valorem revenues shall be
cumulative to the extent not paid, and shall continue until such non-ad valorem revenues or other
legally available funds in amounts sufficient to make all such required payments shall have been
budgeted, appropriated and actually paid. No lien upon or pledge of such non-ad valorem
revenues shall be in effect until such moneys are budgeted and appropriated. The City further
acknowledges and agrees that the obligations of the City to include the amount of any deficiency
in payments in each of its annual budgets and to pay such deficiencies from legally available
non-ad valorem revenues may be enforced in a court of competent jurisdiction in accordance
with the remedies set forth herein.
Such covenant to budget and appropriate does not create any lien upon or pledge of such
non-ad valorem revenues, nor does it preclude the City from pledging in the future its non-ad
valorem revenues, except as set forth in Section 4.07 hereof, nor does it require the City to levy
and collect any particular non- ad valorem revenues, nor does it give the holders of the Note a
prior claim on the non-ad valorem revenues as opposed to claims of general creditors of the City.
Such covenant to budget and appropriate legally available non-ad valorem revenues is subject in
all respects to the prior payment of obligations secured by a pledge of such non-ad valorem
revenues heretofore or hereafter entered into (including the payment of debt service on bonds
and other debt instruments). Anything in this Agreement to the contrary notwithstanding, it is
understood and agreed that all obligations of the City hereunder shall be payable from the
portion of legally available non-ad valorem revenues budgeted and appropriated as provided for
hereunder and nothing herein shall be deemed to pledge ad valorem tax revenues or to permit or
constitute a mortgage or lien upon any assets owned by the City and no holder of the Note nor
any other person, may compel the levy of ad valorem taxes on real or personal property within
the boundaries of the City. Notwithstanding any provisions of this Agreement or the Note to the
contrary, the City shall never be obligated to maintain or continue any of the activities of the City
which generate user service charges, regulatory fees or any non-ad valorem revenues. Neither
this Agreement nor the obligations of the City under the Resolution shall be construed as a
pledge of or a lien on all or any non-ad valorem revenues of the City other than the Designated
Revenues, but shall be payable solely as provided herein and is subject in all respects to the
provisions of Section 166.241, Florida Statutes, and is subject, further, to the payment of services
and programs which are for essential public purposes affecting the health, welfare and safety of
the inhabitants of the City.
Section 4.04. Tax Covenant. The City covenants to the purchasers of the Note
provided for in this Agreement that the City will not make any use of the proceeds of the Note at
any time during the respective terms of such Note which, if such use had been reasonably
expected on the date the Note was issued, would have caused such Note to be an "arbitrage
bond" within the meaning of the Code. The City will comply with the requirements of the Code
and any valid and applicable rules and regulations promulgated thereunder necessary to insure
the exclusion of interest on the Note from the gross income of the holders thereof for purposes of
federal income taxation.
{OR715482;2}
11
Section 4.05. Budget and Other Financial Information. The City shall:
(a) Within 210 days following the end of each Fiscal Year of the City, provide the
Noteholder with a copy of the City's audited financial statements for the preceding Fiscal Year
specifically breaking out the Designated Revenues; and
(b) Provide the Noteholder with a copy of its resolution adopting its annual budget
within 30 days of the adoption of the same, a completed budget book upon the completion of the
same, and such other financial information regarding the City as the Noteholder may reasonably
request.
Section 4.06. Compliance with Laws and Regulations. The City shall maintain
compliance with all federal, state and local laws and regulations regarding the acquisition,
construction and maintenance of the Project.
Section 4.07. Anti-Dilution Test. The City shall not issue debt secured by or payable
from non-ad valorem revenues of the City (excluding revenues in enterprise funds) unless the
maximum annual debt service coverage for both the existing and proposed debt exceed 1.50: 1.0.
For the purposes of this calculation, the debt service coverage formula for purposes of this
covenant shall be calculated as follows:
[Total General Fund Revenues - Outstanding General Obligations Annual Debt Service -
Ad Valorem Revenues (General Fund)] - [General Government Expenditures (General Fund) +
Public Safety Expenditures (General Fund) - Ad Valorem Revenues (General Fund)] divided by
maximum annual debt service for both the Outstanding debt of the City secured by or payable
from non-ad valorem revenues (excluding debt secured by revenues in enterprise funds) and the
proposed debt.
Section 4.08. Application of Proceeds of Note. At the time of delivery of the Note
herein authorized, proceeds from the sale of the Note shall be used to finance the Project and
associated costs of issuance (including but not limited to legal and financial advisory fees and
expenses) in accordance with the provisions of the next paragraph.
The funds and accounts created and established by this Agreement shall constitute trust
funds for the purpose provided herein for such funds. All such funds, except as hereinafter
provided, shall be continuously secured in the same manner as municipal deposits of funds are
required to be secured by the laws of the State of Florida. Moneys on deposit to the credit of all
funds and account created hereunder may be invested pursuant to applicable law and the City's
investment policy and shall mature not later than the dates on which such moneys shall be
needed to make payments in the manner herein provided. The securities so purchased as an
investment of funds shall be deemed at all times to be a part of the account from which the said
investment was withdrawn, and the interest accruing thereon and any profit realized therefrom
shall be credited to such fund or account, except as expressly provided herein, and any loss
resulting from such investment shall likewise be charged to said fund or account.
{OR715482;2}
l2
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Events of Default. Each of the following is hereby declared an "Event of
Default: "
(a) payment of the principal of the Note shall not be made when the same shall
become due and payable;
(b) payment of any installment of interest on the Note shall not be made when the
same shall become due and payable; or
(c) the City shall default in the due and punctual performance of any other of the
covenants, conditions, agreements and provisions contained in the Note or in this Agreement and
such default shall continue for 30 days after written notice shall have been given to the City by
the Noteholder specifying such default and requiring the same to be remedied; provided,
however, that if, in the reasonable judgment of the Noteholder, the City shall proceed to take
such curative action which, if begun and prosecuted with due diligence, cannot be completed
within a period of 30 days, then such period shall be increased to such extent as shall be
necessary to enable the City to diligently complete such curative action; or
(d) the City defaults in the due and punctual payment of any other obligation or
evidence of indebtedness which is secured in whole or in part by a pledge of or payable from the
Designated Revenues or that is a general obligation of the City; or
(e) any representation or warranty of the City contained in this Agreement or in any
certificate or other closing document executed and delivered by the City in connection with the
closing of this Loan shall prove to have been untrue in any material respect when executed and
delivered, thereby adversely impairing the security for the Note; or
(f) any proceedings are instituted with the consent or acquiescence of the City, for
the purpose of effecting a compromise between the City and its creditors or for the purpose of
adjusting the claims of such creditors, pursuant to any federal or state statute now or hereinafter
enacted; or
(g) the City admits in writing its inability to pay its debts generally as they become
due, or files a petition in bankruptcy or makes an assignment for the benefit of its creditors,
declares a financial emergency or consents to the appointment of a receiver or trustee for itself or
shall file a petition or answer seeking reorganization or any arrangement under the federal
bankruptcy laws or any other applicable law or statute of the United States of America or any
state thereof; or
(h) the City is adjudged insolvent by a court of competent jurisdiction or is adjudged
bankrupt on a petition of bankruptcy filed against the City, or an order, judgment or decree is
entered by any court of competent jurisdiction appointing, without the consent of the City, a
receiver or trustee of the City or of the whole or any part of its property and any of the aforesaid
{OR715482;2}
13
adjudications, orders, judgments or decrees shall not be vacated or set aside or stayed within
60 days from the date of entry thereof; or
(i) if, under the provisions of any law for the relief or aid of debtors, any court of
competent jurisdiction shall assume custody or control of the City or of the whole or any
substantial part of its property and such custody or control shall not be terminated within 90 days
from the date of assumption of such custody or control.
Section 5.02. Exercise of Remedies. Upon the occurrence and during the continuance
of an Event of Default, a Noteholder may, by a notice in writing to the City, declare the principal
of a Note (if not then due and payable) to be immediately due and payable, and upon such
declaration, the same shall be immediately due and payable, anything contained in a Note or this
Agreement to the contrary notwithstanding. Upon the occurrence and during the continuance of
an Event of Default, a Noteholder may proceed to protect and enforce its rights under the laws of
the State of Florida or under this Agreement by such suits, actions or special proceedings in
equity or at law, or by proceedings in the office of any board or officer having jurisdiction, either
for the specific performance of any covenant or agreement contained herein or in aid or
execution of any power herein granted or for the enforcement of any proper legal or equitable
remedy, as a Noteholder shall deem most effective to protect and enforce such rights. Without
limiting the generality of the foregoing, the Noteholder shall have the right to bring a mandamus
action to require the City to perform its obligations under Article IV of this Agreement.
In the enforcement of any remedy under this Agreement, to the extent permitted by law, a
Noteholder shall be entitled to sue for, enforce payment of and receive any and all amounts then
or during any default becoming, and at any time remaining, due from the City for principal,
interest or otherwise under any of the provisions of this Agreement or of a Note then unpaid,
within interest on overdue payments of principal and interest (to the extent permitted by law) at
the Default Rate, together with any and all costs and expenses of collection and of all
proceedings hereunder and under the Note (including, without limitation, reasonable legal fees in
all proceedings, including administrative, appellate and bankruptcy proceedings), but payable
from the Designated Revenues, without prejudice to any other right or remedy of the Noteholder,
and to recover and enforce any judgment or decree against the City, but solely as provided herein
and in a Note, for any portion of such amounts remaining unpaid and interest, costs, and
expenses as above provided, and to collect (but from the Designated Revenues) in any manner
provided by law, the moneys adjudged or decreed to be payable.
Section 5.03. Remedies Not Exclusive. No remedy herein conferred upon or reserved
to a Noteholder is intended to be exclusive of any other remedy or remedies herein provided, and
each and every such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder.
Section 5.04. Waivers, Etc. No delay or omission of a Noteholder to exercise any right
or power accruing upon any default shall impair any such right or power or shall be construed to
be a waiver of any such default or any acquiescence therein; and every power and remedy given
by this Agreement to a Noteholder may be exercised from time to time and as often as may be
deemed expedient.
{OR715482;2}
14
A Noteholder may waive any default which in its opinion shall have been remedied
before the entry of final judgment or decree in any suit, action or proceeding instituted by it
under the provisions of this Agreement or before the completion of the enforcement of any other
remedy under this Agreement, but no such waiver shall be effective unless in writing and no
such waiver shall extend to or affect any other existing or any subsequent default or defaults or
impair any rights or remedies consequent thereon.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01. Covenants of City, Etc.; Successors. All of the covenants, stipulations,
obligations and agreements contained in this Agreement shall be deemed to be covenants,
stipulations, obligations and agreements of the City to the full extent authorized or permitted by
law, and all such covenants, stipulations, obligations and agreements shall be binding upon the
successor or successors thereof from time to time, and upon any officer, board, commission,
authority, agency or instrumentality to whom or to which any power or duty affecting such
covenants, stipulations, obligations and agreements shall be transferred by or in accordance with
law.
Section 6.02. Term of Agreement. This Agreement shall be in full force and effect
from the date hereof until the Note and all other sums payable to the Bank hereunder have been
paid in full and shall survive the termination of this Agreement in relation to those provisions
that deal with retroactive cost increases for the Bank in relation to the tax exempt status of the
Note.
Section 6.03. Notice of Changes in Fact. Promptly after the City becomes aware of the
same, the City will notify the Bank of (a) any changes in any material fact or circumstance
represented or warranted by the City in this Agreement or in connection with the issuance of the
Note, and (b) any default under this Agreement, specifying in each case the nature thereof and
what action the City has taken, is taking and/or proposes to take with respect thereto.
Section 6.04. Amendments and Supplements. This Agreement may be amended or
supplemented from time to time only by a writing duly executed by each of the City and the
Noteholders.
Section 6.05. Notices. Any notice, demand, direction, request or other instrument
authorized or required by this Agreement to be given to or filed with the City or the Bank, shall
be deemed to have been sufficiently given or filed for all purposes of this Agreement if and
when sent by certified mail, return receipt requested:
(a) As to the City:
City of Winter Springs, Florida
510 N. Baker Street
Winter Springs, Florida 32757
Attention: Office of the Clerk
{OR715482;2}
15
(b) As to the Banle
SunTrust Bank
200 S. Orange Avenue
10lh Floor, Mail Code II 00
Orlando, FL 32801
Attention: Leif Chase
Either party may, by notice sent to the other, designate a different or additional address to which
notices under this Agreement are to be sent.
Section 6.06. Benefits Exclusive. Except as herein otherwise provided, nothing in this
Agreement, expressed or implied, is intended or shall be construed to confer upon any person,
firm or corporation, other than the City and the Noteholder, any right, remedy or claim, legal or
equitable, under or by reason of this Agreement or any provision hereof, this Agreement and all
its provisions being intended to be and being for the sole and exclusive benefit of the City and
the Noteholder.
Section 6.07. Severability. In case anyone or more of the provlSlons of this
Agreement, any amendment or supplement hereto or of the Note shall for any reason be held to
be illegal or invalid, such illegality or invalidity shall not affect any other provision of this
Agreement, any amendment or supplement hereto or the Note, but this Agreement, any
amendment or supplement hereto and the Note shall be construed and enforced at the time as if
such illegal or invalid provisions had not been contained therein, nor shall such illegality or
invalidity or any application thereof affect any legal and valid application thereof from time to
time. In case any covenant, stipulation, obligation or agreement contained in the Note or in this
Agreement shall for any reason be held to be in violation of law, then such covenant, stipulation,
obligation, or agreement shall be deemed to be the covenant, stipulation, obligation or agreement
of the City to the full extent from time to time permitted by law.
Section 6.08. Payments Due on Saturdays, Sundays and Holidays. In any case where
the date of maturity of interest on or principal of the Note or the date fixed for prepayment of the
Note shall be a Saturday, Sunday or a day on which the Bank is required, or authorized or not
prohibited, by law (including executive orders) to close and is closed, then payment of such
interest or principal shall be made on the next succeeding day on which the Bank is open for
business with the same force and effect as if paid on the date of maturity or the date fixed for
prepayment, and no interest on any such principal amount shall accrue for the period after such
date of maturity or such date fixed for prepayment.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered, shall be an original; but such
counterparts shall together constitute but one and the same Agreement, and, in making proof of
this Agreement, it shall not be necessary to produce or account for more than one such
counterpart.
Section 6.10. Applicable Law. This Agreement shall be governed exclusively by and
construed in accordance with the applicable laws of the State of Florida.
(OR715482;2}
16
Section 6.11. No Personal Liability. Notwithstanding anything to the contrary
contained herein or in the Note, or in any other instrument or document executed by or on behalf
of the City in connection herewith, no stipulation, covenant, agreement or obligation of any
present or future member of the City Council, officer, employee or agent of the City, officer,
employee or agent of a successor to the City, in any such person's individual capacity, and no
such person, in his or her individual capacity, shall be liable personally for any breach or non-
observance of or for any failure to perform, fulfill or comply with any such stipulations,
covenants, agreements or obligations, nor shall any recourse be had for the payment of the
principal of or interest on the Note or for any claim based thereon or on any such stipulation,
covenant, agreement or obligation, against any such person, in his or her individual capacity,
either directly or through the City or any successor to the City, under any rule or law or equity,
statute or constitution or by the enforcement of any assessment or penalty or otherwise and all
such liability of any such person, in his or her individual capacity, is hereby expressly waived
and released.
Section 6.12. Defeasance. If at any time the City shall have paid, or have made
provision for the payment of, the principal and interest on the Note and which may not be
immediately prepayable, then, in that event, the pledge of and lien on the Designated Revenues
and on the other moneys created hereunder and the covenant to budget and appropriate legally
available non-ad valorem revenues of the City in favor of the Noteholder shall no longer be in
effect with respect to that Note. For purposes of the preceding sentence, the deposit of cash or
Federal Securities in irrevocable trust with a banking institution or trust company, for the sole
benefit of the Noteholder, in an aggregate principal amount which, together with interest to
accrue thereon, will be sufficient to make timely payment of the principal of and interest to
accrue thereon shall be considered "provision for the payment." Nothing herein shall be deemed
to require the City to repay the outstanding Note prior to maturity or to impair the City's
discretion in determining whether or not to exercise any option for prepayment. If the conditions
set forth in this Section 6.12 have been satisfied, all moneys held in any fund or account created
hereby that are in excess of the amounts required to payor make provision for payment of the
principal and interest on the Note may be withdrawn and used by the City for any lawful
purpose.
Section 6.13. Incorporation by Reference. All of the terms and obligations of the
Resolution and the Exhibits hereto are hereby incorporated herein by reference as if all of the
foregoing were fully set forth in this Agreement. All recitals appearing at the beginning of this
Agreement are hereby incorporated herein by reference.
{OR715482;2}
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first set forth herein.
(SEAL)
"CITY"
CITY OF WINTER SPRINGS, FLORIDA
By:
Mayor
ATTEST:
By:
Clerk of the City of Winter Springs, Florida
"BANK"
SUNTRUST BANK
By:
Title: Assistant Vice President
{OR715482;2}
18
EXHIBIT A
FORM OF NOTE
ANY HOLDER SHALL, PRIOR TO BECOMING A HOLDER, EXECUTE A PURCHASER'S
CERTIFICATE IN THE FORM ATTACHED HERETO CERTIFYING, AMONG OTHER
THINGS, THAT SUCH HOLDER IS AN "ACCREDITED INVESTOR" AS SUCH TERM IS
DEFINED IN THE SECURITIES ACT OF 1933, AS AMENDED, AND REGULATION D
THEREUNDER.
CITY OF WINTER SPRINGS, FLORIDA
CAPIT AL IMPROVEMENT REVENUE NOTE, SERIES 2004
Principal Sum
Maturity Date Note Rate Date of Issuance
Not Exceeding
$2,500,000
June 1,2018 Adjustable, as March 1,2004
described below
The CITY OF WINTER SPRINGS, FLORIDA (the "City"), for value received, hereby
promises to pay, solely from the Designated Revenues described in the within mentioned
Agreement, to the order of SUNTRUST BANK, a Georgia banking corporation, or its assigns
(the "Holder"), at 200 South Orange Avenue, Orlando, Florida 32801, or at such other place as
the Holder may from time to time designate in writing, the Outstanding Principal Sum stated
above, together with interest thereon as hereinafter provided until the Maturity Date stated above
or the date the principal amount of this Note is paid in the manner hereinafter set forth in any
coin or currency of the United States of America which, at the time of payment, is legal tender
for the payment of public and private debts, which payments shall be made to the Holder hereof
by check mailed to the Holder at the address designated in writing by the Holder for purposes of
payment or by bank wire or bank transfer as such Holder may specify in writing to the City or
otherwise as the City and the Holder may agree.
All capitalized terms not otherwise defined herein shall have the meanings ascribed to
such terms in the Agreement (hereinafter defined).
This Note shall mature as reflected on Exhibit A hereto. Interest on this Note shall be
calculated and shall accrue at the Note Rate only on the Outstanding Principal Balance of the
Note (with respect to each Advance, from the date of such Advance) and shall be payable on
each Interest Payment Date form the most recent date to which interest has been paid, or from
the Closing Date in the case of the first interest payment date, in arrears, commencing June 1,
2004. Commencing with the Interest Payment Date of June 1, 2007 and on each Interest
Payment Date thereafter, the Issuer will pay payments of principal on this Note, in addition to
payments of interest, in accordance with the schedule attached hereto as Exhibit A, which
schedule is based on the assumption that Advances in the aggregate amount of $2,500,00 have
been made to the Issuer, without regard to the amount of Advances actually made. The Note
Rate may be adjusted in accordance with Sections 3.03 of that certain Loan Agreement by and
between the Holder and the City, dated as of March 1,2004 (the "Agreement").
{OR715482;2}
Exhibit A-I
The Holder shall provide to the City such documentation to evidence any adjustment to
the Note Rate and the calculations made in connection therewith. Upon the occurrence of any
Determination of Taxability, as defined in the Agreement, this Note shall bear interest (from the
date when such Determination of Taxability is deemed to have occurred) at the Taxable Rate, as
defined in the Agreement. Following the occurrence and during the continuance of any Event of
Default, as defined in the Agreement, this Note shall bear interest at the Default Rate, as defined
in the Agreement. Interest on this Note shall be computed on the basis of a 360 day year of l2,
30-day months.
The Note may be prepaid by the City in whole or in part at any time in such manner as
shall be determined by the City from any legally available monies as a prepayment price of
100% of the principal amount to be redeemed, plus accrued interest to the prepayment date.
Each prepayment shall be made on such date and in such principal amount as shall be specified
by the City in a written notice delivered to the Holder not more than fifteen (15) and not less than
five (5) days prior to the specified prepayment date. Any prepayments shall be applied to the
sums last maturing hereunder.
Notice having been given as aforesaid, the principal amount stated in such notice or the
whole thereof, as the case may be, shall become due and payable on the prepayment date stated
in such notice, together with interest accrued and unpaid to the prepayment date on the principal
amount then being paid; and the amount of principal and interest then due and payable shall be
paid (i) in case the entire unpaid balance of the principal of this Note is to be paid, upon
presentation and surrender of this Note to the office of the Holder at 200 South Orange Avenue,
Orlando, Florida, and (ii) in case only part of the unpaid balance of principal of this Note is to be
paid, upon presentation of such Note at the office of the Holder at 200 South Orange Avenue,
Orlando, Florida, for notation thereon of the amount of principal and interest on this Note then
paid. If, on the prepayment date, funds for the payment of the principal amount to be prepaid,
together with interest to the prepayment date on such principal amount, shall have been given to
the Holder, as above provided, then from and after the prepayment date interest on such principal
amount of this Note shall cease to accrue. .If said funds shall not have been so paid on the
prepayment date, the principal amount of this Note shall continue to bear interest until payment
thereof at the rate provided for herein.
Any prepayments shall be applied to the sums last maturing hereunder.
All payments made by the City hereon shall apply first to accrued interest, then to other
charges due the Holder, and the balance thereof shall apply to the principal amount then due on
this Note.
This Note is authorized to be issued in the outstanding aggregate principal amount equal
to the Principal Sum under the authority of and in full compliance with the Constitution and
statutes of the State of Florida, including, particularly, Chapter 166, Florida Statutes, and other
applicable provisions of law, the City's Resolution No. 2004-10 effective February 23, 2004 (the
"Resolution"), and is subject to all terms and conditions of the Agreement and the Resolution.
Any term used in this Note and not otherwise defined shall have the meaning ascribed to such
term in the Resolution or the Agreement, as the case may be.
{OR715482;2}
Exhibit A-2
Notwithstanding any provision in this Note to the contrary, in no event shall the interest
contracted for, charged or received in connection with this Note (including any other costs or
considerations that constitute interest under the laws of the State of Florida which are contracted
for, charged or received) exceed the maximum rate of nonsurious interest allowed under the
State of Florida as presently in effect and to the extent an increase is allowable by such laws, but
in no event shall any amount ever be paid or payable by the City greater than the amount
contracted for herein. In the event the maturity of this Note is accelerated or prepaid in
accordance with the provisions hereof, then such amounts that constitute payments of interest,
together with any costs or considerations which constitute interest under the laws of the State of
Florida, may never exceed an amount which would result in payment of interest at a rate in
excess of that permitted by Section 215.84(3), Florida Statutes, as presently in effect and to the
extent an increase is allowable by such laws; and excess interest, if any, shall be cancelled
automatically as of the date of such acceleration, or, if theretofore paid, shall be credited on the
principal amount of this Note unpaid, but such crediting shall not cure or waive any default
under the Agreement or Resolution.
THIS NOTE, WHEN DELIVERED BY THE CITY PURSUANT TO THE TERMS OF
THE AGREEMENT AND THE RESOLUTION, SHALL NOT BE OR CONSTITUTE AN
INDEBTEDNESS OF THE CITY OR THE STATE OF FLORIDA (THE "STATE"), WITHIN
THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER
LIMITATIONS OF INDEBTEDNESS, BUT SHALL BE PAY ABLE SOLELY FROM THE
DESIGNATED REVENUES, AS PROVIDED IN THE AGREEMENT AND THE
RESOLUTION. THE HOLDER SHALL NEVER HAVE THE RIGHT TO COMPEL THE
EXERCISE OF THE AD VALOREM TAXING POWER OF THE CITY OR THE STATE, OR
TAXATION IN ANY FORM OF ANY PROPERTY THEREIN TO PAY THIS NOTE OR THE
INTEREST THEREON.
Upon the occurrence of an Event of Default the principal of this Note may become or be
declared due and payable before the Maturity Date in the manner, with the effect and subject to
the conditions set forth in the Agreement and Resolution. The Holder shall also have such other
remedies as described in the Agreement.
The City hereby waives presentment, demand, protest and notice of dishonor. This Note
is governed and controlled by the Agreement and reference is hereby made thereto regarding
interest rate adjustments, acceleration, and other matters.
[Remainder of Page Intentionally Left Blank]
{OR715482;2}
Exhibit A-3
IN WITNESS WHEREOF, the City has caused this Note to be signed by its Mayor,
either manually or with facsimile signature, and the seal of the City to be affixed hereto or
imprinted or reproduced hereon, and attested by the Clerk of the City, either manually or with
facsimile signature, and this Note to be dated the Date oflssuance set forth above.
CITY OF WINTER SPRINGS, FLORIDA
(SEAL)
By:
Mayor
ATTEST:
By:
City Clerk
{OR715482;2}
Exhibit A-4
FORM OF CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This Note is being delivered pursuant to the within mentioned Agreement.
CITY OF WINTER SPRINGS, FLORIDA
as Registrar
By:
Its: City Clerk
{OR715482;2}
Exhibit A-5
ASSIGNMENT
FOR V ALUE RECEIVED the undersigned sells, assIgns and transfers unto
(please print or typewrite name, address
and tax identification number of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
Attorney to transfer the within Note on the books kept for
registration thereof, with full power of substitution in the premises.
Name of Note holder:
By:
{OR715482;2}
Exhibit A-6
PURCHASER'S CERTIFICATE
[DATE]
City of Winter Springs, Florida (the "City")
Ladies and Gentlemen:
The undersigned, as purchaser of the City of Winter Springs, Florida Capital
Improvement Revenue Note, Series 2004 (the "Note") dated February 24, 2004, consisting of
one typewritten Note, hereby certifies that:
A. We are aware:
(i) that investment in the Note involves various risks;
(ii) that the Note is not a general obligation of the City; and
(iii) that the principal or premium, if any, and interest on the Note is payable
solely from the Designated Revenues as specified in the Loan Agreement
securing the Note.
B. We have been afforded access to all information we have requested in making our
decision to purchase the Note and have had sufficient opportunity to discuss the business
of the City and the Designated Revenues with its officers, employees and others. We do
not require any further information or data incident to our purchase of the Note.
C. In purchasing the Note, we have relied solely upon our own investigation,
examination, and evaluation of the City, the Designated Revenues and other relevant
matters.
D. We have knowledge and experience in financial and business matters and are
capable of evaluating the merits and risks of our investment in the Note and have
determined that we can bear the economic risk of our investment in the Note.
E. We acknowledge the understanding that the Note has not been registered under
the Securities Act of 1933, as amended or Chapter 517, Florida Statutes, and that the
Loan Agreement has not being qualified under the Trust Indenture Act of 1939, as
amended, and that the City shall have no obligation to effect any such registration or
qualification. We also acknowledge that we are an "accredited investor" within the
meaning of Chapter 5l7, Florida Statutes and Regulation D ofthe 1933 Act.
{OR715482;2}
Exhibit A-7
F. We are not acting as a bond house, broker or other intermediary, and are
purchasing the Note as an investment for our own account and not with a present view to
a resale or other distribution to the public.
Signed as of the _ day of
,200_.
By:
Title:
{OR715482;2}
Exhibit A-8
120803_COMM_Regular__R.F.P.Page 1 of2
COMMISSION AGENDA
ITEM 206
Consent X
Information
Public Hearin2
Re2ular
December 8. 2003
Meeting
MGR. frv /Dept.
REQUEST: City Manager requesting the Commission to approve issuance of a R.F.P. for a
bank qualified non-revolving line of credit to finance municipal projects not to exceed
$2,500,000.
PURPOSE: This request is needed to get Commission approval for acquiring financing for
small municipal projects though a bank qualified non revolving line of credit in the alternative to
other financing instruments.
CONSIDERATIONS: The City needs short and intermediate term financing to finance projects
with 3 to 5 year payouts.
A bank qualified non-revolving letter of credit is the ideal financial instrument in this situation
because: .
1. It is very inexpensive to issue.
2. It has low interest rates.
3. It is very flexible.
4. It is very safe.
Separate Commission resolutions are required to authorize utilizing the line of credit for each
project.
120803_ COMM_Regular_ _ R.F.P.
Projects that we anticipate financing with the line of credit are:
Parker property improvements
Expansion of City Hall
Expansion of Police Building
New Public Works Facility
Fire Truck Replacement
100,000
600,000
100,000
600,000
300.000
1,700,000
FUNDING: The source of funding for these projects are as follows:
Parker property improvements
Expansion of City Hall
Expansion of Police Building
New Public Works Facility
Fire Truck
Park Impact Fees
Public Building Impact Fees
Police Impact Fees
Public Building Impact Fees
General Fund
RECOMMENDATIONS: It is recommended that the City Commission authorize the City
Manager to issue an R.F.P. for a bank qualified variable rate line of credit not to exceed
$2,500,000 and to return the results of the R.F.P. to the Commission for approval
ATTACHMENTS: (A) November 24,2003 letter of David Moore and R.F.P.
COMMISSION ACTION:
2
The PFM Group
Pub/lc financial Management, Inc.
PFM Asset Management LLC
PFM Advlscn
Lincoln Plaza
Suite 1170
300 S. Orange Avenue
Orlando, FL
32801-3470
407 648-2208
407-648-1323 fax
www.p1m.com
November 24, 2003
Memorandum
Th: ~nMWm~~a~~~
Ci~ ofWlOter Springs
From: David Moore
Rebecca Peterson
CC: Louise Frangoul, Finance Director
Re: RFP for Line of Credit
At the request of the City ofWlOter Springs (the "City''), Public Financial Management, Inc.
("PFM''), in its capacity as financial advisor to the City, has prepared a draft of a Request for
Proposals for a Bank Qualified N on-Revolving.line Of Credit ("LOC'') & Term Loan.
The LOC will be structured to allow the City to take monthly draws and prepay at any time before it
converts to a Term Loan with a fifteen-year amortization (2018). Interest on the LOC will be paid
semi-annually on June 1 and December 1 and will be calculated at a bank-qualified variable rate.
Upon conversion of the LOC to a Term Loan, the City will have the option to keep the obligation
in a variable rate mode or switch the obligation into a fixed rate mode. Interest on the Term Loan
will be paid semi-annually on J nne 1 and December 1 and amortize the principal balance of the loan
annually on June 1.
The structure of the LOC will provide the City with the flexibility to add projects via Resolution
throughout the draw period. The City's alternatives to using an LOC to fund these projects are as
follows: .
Alte(nanve:
1. Regular bond issue
2. A number of successive bank loans
3. Pooled loan progtam (League of Cities,
Florida Municipal Loan Council, etc.)
ReMon for using LOC VS. Alte(native:
. Higher costs of issuance.
. Would require multiple, successive loans to achieve the
same flexibility to add projects.
. Limited to interest rate mode, timing, amortization and
prepayment options dictated by program.
All of the above listed alternatives can be optimal with the appropriate circumstances. However,
since the amount of the financings are expected to be very small and the City prefers the flexibility
to add projects at will and prepay at any time without penalty, the most cost effective option is a
bank-qualified llne of credit.
Enclosed with this memo is the RFP. Should you have any questions, please do not hesitate to
contact us at 407-648-2208.
CITY OF WINTER SPRINGS, FLORIDA
REQUEST FOR PROPOSALS
FOR
CAPITAL IMPROVEMENT REVENUE NOTE, SElUES 2004
BANK QUALIFIED NON-REVOLVING LINE OF CREDIT
& TERM LOAN
December 10,2003
TABLE OF CONTENTS
Page
1. Introduction
A. Obj ective .. .....,... ................. ...... ....... ............ .... ............... ........ ............... m......1
B. Bidding Instructions
1. Sealed B ids......n...... ..... .... ....... ...... ...................... ............... ....... ...... ...m ...2
2. Bid Response................. ................ ........ ...... ............... ............... ...... .........2
3. Questions, Additional Information......................................m..................2
4 . Tentative Schedule.. ......... ...... ............... ....... ................ ............................3
C. Security for LaC and Term Loanm...............................................................3
D. Structure of the Financing...... ....... '" ..................... ... .... ..................................3
B. Provi sos................................... ...................... ................ .................................4
IT. Evaluation of Proposals - Criteria..............................................................mm....4
ITL Instructions to Proposers ............ ....... ............... .... ................... ............................6
IV. Other Information..................... .......... ...... ...................................... ......................7
REQUEST FOR PROPOSALS
CITY OF WINTER SPRINGS, FLORIDA
CAPITAL IMPROVEMENT REVENUE NOTE, SERIES 2004
BANK QUALIFIED NON-REVOLVING LINE OF CREDIT
& TERM LOAN
I. Introduction
The City of Winter Springs, Florida (the "City") was originally incorporated in 1959 under the
name of the Village of North Orlando and became the City of Winter Springs in 1972. The City
is located in southern Seminole County in central Florida. Adjacent municipalities are
Longwood, Casselberry and Oviedo. The City's estimated 2002 population was 32,000. The City
is served by a City Commission - City Manager fonn of government consisting of a Mayor, five
commissioners and a City Manager. The Mayor and City Commissioners are elected for four-
year terms. The Mayor votes on matters coming before the City Commission only if needed to
break a tie vote among the other City Commissioners. The City Manager is appointed by the City
Commission.
A. Objective
The objective of this Request for Proposals (the "RFP") is to identify the institution that
can provide the City of Winter Springs, Florida (the "City") with a $2,500,000 variable
rate line of credit (the "LOC") that will provide for conversion to a term loan in the form
of a revenue note (the "Term Loan") at the lowest overall borrowing cost without
prepayment penalty and pursuant to certain conditions. The financing will be a private
placement and the City is not preparing any disclosure information. The LOC and
subsequent Term Loan will be secured by the impact fees of the Project, as well as a
covenant by the City to appropriate in its annual budget an amount from Non-Ad
Valorem Funds to pay the principal and interest on this Note.
The City plans to draw upon the LOC in multiple increments over the period of two (2)
years ("Draw Period") to fund certain capital projects set forth in the City's capital plan
(the "Project"). During the Draw Period on the LOC, the City will pay interest only on a
semiannual basis on each June 1 and December 1 following the date of the first draw on
the LOC. Upon the conclusion of the Draw Period the City plans to convert all or a
portion of the LOC to a Term Loan (the "Conversion Date").
The Term Loan will bear interest at a fixed or variable rate (to be selected by the City at
the time of conversion) and will mature no later than June 1,2018. The principal of the
Term Loan will be paid annually on June 1 commencing the first June 1 at least 12
months after the Conversion Date. Interest on the Tenn Loan will be paid semi-annually
on June 1 and December 1 immediately following the Conversion Date. The debt service
payments on the Term Loan will be structured to produce level annual debt service.
B. Bidding Instructions
1. Sealed Bids
Four (4) copies of the response to this RFP shall be submitted on or before
2:00 p.m. EST on December 19, 2003 at the following addresses:
Louise Frangoul (2 copies)
Finance Director
City of Winter Springs
1126 E. State Road 434
Winter Springs, FL 32708
(407) 327-5960 phone
(407) 327-4753 fax
David Moore (2 copies)
Senior Managing Consultant
Public Financial Management, Inc.
300 South Orange Avenue, Suite 1170
Orlando, FL 32801
(407) 648-2208 phone
(407) 648-1323 fax
The City reserves the right to reject any and all proposals, to waive any
informality or irregularities in any proposal received or take any other such
action that may be deemed to be in the best interest of the City.
2. Bid Response
Each bid should address all pertinent areas and be specific. Any conditions should
be clearly stated.
The failure to disclose substantive tenus, conditions and covenants may be
considered cause for the proposer's proposal to be rejected by the City.
The City shall not accept any proposals with reserve requirements or other
restrictions to revenues or requirements to maintain minimum balances in any bank
account.
3. Questions. Additionallnfonnation
Contact with personnel and Board members of the City other than the Finance
Director or the designated representative regarding this Request for Proposals
will be grounds for elimination from the selection process. The City shall not
2
be responsible for oral interpretations given by any employee or" its
representative. The City will not be liable for any expenses incurred in
connection with the preparation of a response to this RFP.
The proposer shall examine all proposal documents and shall judge all matters
relating to the adequacy of such documents. Any inquiries, suggestions or requests
c~nceming clarification or solicitation for additional information shall be submitted
in writing to the City's Financial Advisor: PUblic Financial Management, Inc. 300
S. Orange Avenue, Suite 1170, Orlando, FL 32801 or fax the same to (407) 648-
1323. Public Financial Management, Inc. will be reviewing the bids and will
recommend the proposer that bids the lowest overall borrowing cost and" most
favorable terms.
4. Tentative Schedule
The City will attempt to adhere to the following schedule:
December 10, 2003
December 19, 2003
January 12,2004
January 13, 2004
RFP Issued
Written responses due
Selection of Provider I Adopt Financing
Resolution and Award to Provider
Closing
The City reserves the right to alter scheduled dates if necessary.
C. Security for LOC and Term Loan
Amounts due under the LOC and Term Loan will be exclusively secured by the impact
fees of the Project, as well as a covenant by the City to appropriate in its annual budget
an amount from Non-Ad Valorem Funds to pay the principal and interest on this Note as
will be stated by the resolution adopted on January 12,2004.
D. Structure of the Financing
Line of Credit:
1. Amount: $2,500,000
2. Rate: Bank-qualified variable rate based on a spread to a nationally recognized
index.
3. Draws: Draw period of two (2) years. The City may make draws on the LOC no
more frequently than once per month. Draw requests must be funded via wire
transfer (at no cost) within five (5) business days of the request.
3
4. Repayment Terms: Interest on the outstanding balance of the LOC will be paid
semiannually based upon a 30/360~day basis and will be paid on each June 1 and
December 1.
5. Principal Prepayment: The LOC can be prepaid in full or in part at any time
without penalty.
Term Loan:
1. At the City's discretion, on the first day of any month, the City may elect to
convert all or a portion of the outstanding balance of the LOC to a Term Loan.
The interest rate on the Term Loan will be fixed or variable (to be decided by
the City at the time of conversion) based on a predefmed spread to a nationally
recognized index. The interest rate will be a bank-qualified, tax-exempt rate. The
rate quoted may not exceed the maximum rate permitted under Florida Statute
215.84.
2. Repayment Terms: Interest payments on the outstanding principal balance of the
Term Loan will be calculated on a 30/360-day basis and will be paid semiannually
on June 1 and December 1, of each year. The principal amount of the Term Loan
will be payable annually on June I and, upon conversion, shall be structured to
produce substantially level annual debt service payments each year through the
final maturity of the Term Loan. Final maturity of the Term Loan is June 1,2018.
3. Prepayment Terms: The City is requesting the fixed interest rate to be bid on the
basis of the following two options of prepayment terms:
a.) The Term Loan is subject to prepayment (without penalty) in whole or in part at
any time. This structure is required.
b.)The Term Loan is subject to prepayment by the City with a prepayment penalty
(please outline prepayment terms). This structure is optional.
E. Provisos
The City will not accept proposals with terms and conditions different than those
included in this RFP.
II. EVALUATION OF PROPOSALS - CRITERIA
Proposals will be evaluated on the basis of cost and compliance with the proposed structure
and terms of the Term Loan as outlined in this RFP. The City will select the proposal that
meets its overall goals and objectives and that provides the lowest overall borrowing cost to
4
the City. Aside from the lowest overall borrowing cost and the requirements listed in
Section A below, additional criteria for selection will include the following:
. Quality of past perfonnance,
. Financial strength,
. Ability to meet time requirements,
. Cost,
. Qualifications of personnel, and
. Corporate qualifications.
A. Proposal Format
In order to assist the City in reviewing proposals, each proposal shall be prepared
utilizing the following fonnat and headings:
1.. Contact Information:
State the legal name of the fmancial institution or firm, current principal business
address, contact person, telephone and facsimile numbers.
2. Interest Rate:
LOC - Identify the index and state a spread to said index for the bank-qualified
variable rate to be used on the LOC. Provide this interest rate on a current basis and
on a ten (10) year historical basis (i.e. 10-yr average of index with applied spread).
Proposer's mus/provide the historical database on which the interest rate is based in
an Excel spreadsheet file emailed to moored@pfin.com prior to the proposal's due
date/time.
Term Loan - Identify the index and state the spread to said index to be used to set
the fixed rate or variable rate on the Tenn Loan upon the Conversion Date. The City
will have the option to choose a fixed rate Term Loan or a variable rate Term Loan.
Proposers must provide interest rates for each of the Prepayment Options identified
in Section I (D) above. Provide a five-year history for each index. Provide these
fixed and variable rates on a current basis and on a ten (10) year historical basis (Le.
10-yr average of index with applied spread). Proposer's must provide the historical
database on which the interest rate is based in an Excel spreadsheet file em ailed to
moored@pfm.com prior to the proposal's due date/time.
Such rates mus/ be presented in two ways: First, show the rate available the day prior
to the RFP due date (December 18,2003). Second, clearly identify the methodology
for determining the interest rates at the time of conversion for the Term Loan. For
example, the rate may be expressed as a percentage of the yield for the U.S.
Government Treasury obligation having a maturity closest to, but not shorter than, the
fmal maturity (or weighted average maturity) of the Term Loan. Provide the basis for
the interest rate calculations and provide a detailed example of sueh calculations.
5
3. Fees and Expenses:
Describe in detail all fees and expenses for which the City will be responsible. The
amounts stated in the proposal shall represent the maximum amounts payable to the
proposer by the City. All fees and expenses in excess of those stated in the proposal
shall be the sole responsibility of the proposer and will not be paid or reimbursed by
the City. The City's bond counsel, Akerman Senterfitt, P.A. will prepare all
documents and will render an opinion regarding the tax-exemption of the LOC and
the Term Loan.
4. Prepayment Provisions:
If the proposer's prepayment provisions are different than those outlined, above
please specify.
5. Conditions:
Provide a listing of all conditions, terms or restrictions, other than those specified in
this RFP, which would be included in your commitment to provide the Term Loan.
ill. INSTRUCTIONS TO PROPOSERS
A. Proposers shall thoroughly examine and be familiar with the bid specifications. Failure
of any proposer to receive or examine this document shall in no way relieve any
proposer of obligations pertaining to this bid or the subsequent contract.
B. Any changes or modifications to the bid specifications can result in the rejection of the
bid as not being responsive to this RFP.
C. The responsibility for delivering the proposal to the City on or before the specified date
and time will be solely and strictly the responsibility of the proposer. The City will in
no way be responsible for delays caused by the United States Post Office or a delay
caused by any other occurrence.
D. The response deadline shall be strictly observed. Under no circumstances will a
proposal delivered after the time specified be considered. Such proposals will be
returned to the proposer unopened.
E. Proposers will not be allowed to withdraw or modify their bids for a period of ninety
(90) days after the opening time and date.
F. The City reserves the right to reject the bid of any proposer who has previously failed
in the proper performance of a contract or to deliver on time other contracts similar in
nature, or who is not in a position to perform properly under this contract.
G. The City reserves the right to inspect all facilities of the proposer in order to make a
determination as to their capabilities.
6
H. Federai, state, COWlty and local laws, ordinances, rules and regulations that in any
manner affect the items covered herein apply. Lack of knowledge by the proposer will
in no way be a cause for relief from responsibility..
1. No successful proposer may assign any portion of the contractual agreement between
the parties without prior written authorization by the City.
J. Changes to the RFP may be made by and at the sole discretion of the City.
K. Public Entity Crimes Form - Each proposer shall complete the Public Entity Crimes
Form and shall submit the same with the proposal. The City considers the failure of the
proposer to submit this document to be a major irregularity and may be cause for
rejection of the proposal.
1. Warranties - The proposer, in submission of its proposal, warrants to the City that it will
comply with all applicable federal, state and local laws, regulations and orders in
providing the services under the proposed documents.
M. Collusion _ The Proposer, by affixing its signature to this proposal, certifies that its
proposal is made without previous understanding, agreement, or connection either with
any previous firms or corporations offering a Proposal for the same items, or with the
City. The proposer also certifies that its proposal is in all respects fair, without outside
control, collusion, fraud or otherwise illegal action.
IV. OTHER JNFORMATION
A. The City reserves the right to accept or reject any and all bids for any reason deemed
appropriate by the City, to waive any irregularities or informalities in any bid or in the
bidding, and to accept or reject any items or combination of items. The award will be
to the institution whose response complies with all of the requirements set forth in this
RFP and whose bid, in the sole opinion of the City, is best taking into consideration all
aspects of the proposer's response.
B. In the event that the successful proposer does not execute a contract within a timeframe
acceptable to the City, the City may give notice of intent to award the bid to the next
most qualified proposer or to call for new bids and may proceed to act accordingly.
7
,.
RESOLUTION NUMBER 2004-10
A RESOLUTION OF THE CITY OF WINTER SPRINGS,
FLORIDA: (i) AUTHORIZING THE ISSUANCE OF NOT
EXCEEDING $2,500,000 OF DEBT TO FINANCE THE
COST OF CAPiTAL PROJECTS IN AND FOR THE CITY
AS MORE SPECIFICALLY DESCRIBED IN THE LOAN
AGREEMENT ATTACHED HERETO; (ii) AUTHORIZING
THE EXECUTION AND DELIVERY OF SAID LOAN
AGREEMENT WITH SUNTRUST BANK PURSUANT TO
WHICH THE CITY WILL ISSUE A NOTE TO SECURE
THE REPAYMENT OF SAID LOAN; (iii) AUTHORIZING
THE CITY'S COVENANT TO BUDGET AND
APPROPRIATE SUFFICIENT LEGALLY AVAILABLE
NON-AD VALOREM REVENUES AND THE PLEDGING
OF LEGALL Y AVAILABLE IMPACT FEES TO PAY DEBT
SERVICE ON THE NOTE; (iv) AUTHORIZING THE
PROPER OFFICIALS OF THE CITY TO DO ANY OTHER
ADDITIONAL THINGS DEEMED NECESSARY OR
ADVISABLE IN CONNECTION WITH THE EXECUTION
OF THE LOAN AGREEMENT, THE NOTE, AND THE
SECURITY THEREFOR; (v) RATIFYING AND
APPROVING THE EXECUTION OF THE COMMITMENT
LETTER WITH SUNTRUST BANK; (vi) DESIGNATING
THE NOTE AS A "QUALIFIED TAX-EXEMPT
OBLIGATION" UNDER SECTION 265(b)(3)(B) OF THE
INTERNAL REVENUE CODE OF 1986; AND (vii)
PROVIDING CERTAIN OTHER MATTERS IN
CONNECTION THEREWITH; AND PROVIDING AN
EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER
SPRINGS, FLORIDA, as follows:
SECTION 1. FINDINGS AND AUTHORIZATION OF PROJECT.
(A) The City of Winter Springs, Florida (the "City"), pursuant to the provisions of the
Florida Constitution, Chapter l66, Florida Statutes, and any other applicable provisions of law
(all of the foregoing, collectively, the "Act") is authorized, in accordance with the Act, to borrow
money, issue bonds, notes or other obligations to finance the cost of capital expenditures for the
City's public purposes;
(B) In response to a request for proposal by the City regarding an intended borrowing
for City capital projects (the "Project"), SunTrust Bank (the "Bank") has proposed a financing in
accordance with the terms of the Bank's commitment of December 23, 2003 attached hereto as
Exhibit A (the "Commitment");
(C) In accordance with the Commitment, the Bank is willing to provide the City with
a not exceeding $2,500,000 Term Loan maturing June 1,2018 (the "Loan") on the terms set forth
in the Commitment and documented in the form of Loan Agreement between the City and the
Bank attached hereto as Exhibit B (the "Loan Agreement");
(D) The Loan will be secured by the Loan Agreement pursuant to which the City will
issue a note (the "Note") to secure the repayment of the Loan;
(E) The City hereby accepts the Commitment and the City has determined under
Section 218.385, Florida Statutes, that it is in its best interest, taking all pricing facts of the
transaction into consideration and given the size of the proposed borrowing, to enter into the
Loan Agreement with the Bank; and
(F) The Project is a capital project appropriately undertaken by the City under the Act
and the City hereby authorizes the Project and the capital expenditures necessary to complete the
Project.
SECTION 2. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted
pursuant to the provisions of the Act and other applicable provisions of law.
SECTION 3. APPROVAL OF LOAN AGREEMENT, NOTE AND COMMITMENT.
The City hereby authorizes the Mayor or his designee (collectively the "Mayor") to execute and
deliver, and the City Clerk or her designee (collectively, the "City Clerk") to attest, on behalf of
the City, the Loan Agreement substantially in the form attached hereto as Exhibit "B" and the
Note in the form attached to the Loan Agreement made by the City to the order of Bank, with
such changes, insertions, and additions as they may approve, their execution thereof being
evidence of such approval. The City further approves and accepts the Commitment.
SECTION 4. PAYMENT OF DEBT SERVICE ON NOTE. Pursuant to the Loan
Agreement, the City will pledge to the payment of debt service on the Note legally available
impact fees in the manner provided in the Loan Agreement. Also pursuant to and subject to the
provisions of the Loan Agreement, the City covenants and agrees to appropriate in its annual
budget, by amendment, if necessary, from legally available non ad-valorem revenues of the City,
and which are lawfully available to pay debt service on the Note, amounts sufficient to pay
principal of and interest on the Note as the same shall become due to the extent legally available
impact fees are insufficient to pay any such principal and interest.
SECTION 5. AUTHORIZATION OF OTHER DOCUMENTS TO EFFECT
TRANSACTION. To the extent that other documents, certificates, opinions, or items are needed
to effect any of the transactions referenced in this Resolution, the Loan Agreement or the Note
and the security therefore, the Mayor, the City Manager, the City Attorney, the City Clerk and
the City Finance Director are hereby authorized to execute and deliver such documents,
certificates, opinions, or other items and to take such other actions as are necessary for the full,
punctual, and complete performance of the covenants, agreements, provisions, and other terms as
are contained herein and in the documents included herein by reference.
City of Winter Springs
Resolution Number 2004-] 0
Page 2 of3
i
SECTION 6. DESIGNA TION OF NOTE AS BANK QUALIFIED. The City
designates the Note as a "qualified tax-exempt obligation" within the meaning of Section
265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City does not
reasonably anticipate that the City, any subordinate entities of the City, and issuers of debt the
issue "on behalf' of the City, will during the calendar year 2004 issue more than $l 0,000,000 of
"tax-exempt" obligations, exclusive of those obligation described in Section 265(b)(3)(C)(ii) of
the Code.
SECTION 7. PAYING AGENT AND REGISTRAR. The City hereby accepts the
duties to serve as Registrar and Paying Agent for the Note.
SECTION 8. LIMITED OBLIGATION. The obligation of the City to repay amounts
under the Loan Agreement and the Note are limited and special obligations, payable solely from
the sources and in the manner set forth in the Loan Agreement and shall not be deemed a pledge
of the faith and credit or taxing power of the City.
SECTION 9. EFFECT OF PARTIAL INY ALIDITY. If anyone or more provisions of
this Resolution, the Loan Agreement or the Note shall for any reason be held to be illegal or
invalid, such illegality or invalidity shall not effect any other provision of this Resolution or the
Note, but this Resolution, the Loan Agreement and the Note shall be construed and enforced as if
such illegal or invalid provision had not been contained therein. The Note and Loan Agreement
shall be issued and this Resolution is adopted with the intent that the laws of the State of Florida
shall govern their construction.
SECTION lO. EFFECTIVE DATE. This Resolution shall take effect immediately upon
its adoption; provided, however, to the extent that the Loan Agreement, the Note, or any other
documents related to the matters set forth herein have been executed prior to the execution date
of this Resolution, this Resolution shall be retroactive to the date of execution of such
documents.
RESOLVED in regular meeting on this 23rd day of February, 2004. "
By:
NTER SPRING-5, FLORIDA' .
fI4urf,. '.
May r City of Winter Springs, Florida
inter Springs, Florida
ity Attorney
City of Winter Springs, Florida
City of Winter Springs
Resolution Number 2004-10
Page 3 of3