HomeMy WebLinkAbout2011 04 11 Consent 200 Resolution 2011-15 SunTrustCOMMISSION AGENDA
ITEM 200
Consent X
Informational
Public Hearing
Regular
April 11, 2011 MGR. /DEPT.
Regular Meeting Authorization
REQUEST: The City Manager and Finance and Administrative Services Department are requesting
the Commission adopt Bond Resolution 2011 -15 to accept the proposal by SunTrust Bank to purchase the
City's, not to exceed $8.5 million, Water and Sewer System Revenue Refunding Revenue Notes, Series
2011A to refund all of the City's outstanding Water and Sewer Revenue Bonds, Series 2002; and
authorize the City Manager and City Attorney to execute all necessary documents to complete a loan
agreement with SunTrust Bank.
SYNOPSIS:
The Purpose of this agenda item is approve the advanced refunding of the Water and Sewer
Revenue Bonds, Series 2002; take advantage of the low interest rate environment and issue a
traditional bank note to replace the outstanding bonds, to minimize the issuances costs and allow
for maximum flexibility for repayment of the bank notes.
CONSIDERATIONS:
In 2002 the City of Winter Springs Issued $13,980,000 Water and Sewer Refunding Revenue
Bonds, Series 2002 with a final maturity of 18 years for the purpose of refinancing the original
construction cost of the City's Utilities.
Due to the soft economy, the interest rate environment is very favorable to refinancing debt that
is in its later stages of repayment. Typically, bonds are issued for a term between 15 and 30 years
at an increasing rate of interest as you move further from the date of issuance. This is best
illustrated by the current yield curve seen below.
U.S. Treasury Yield Curve (4/5/2011)
Refinance the existing debt at 4.5
the same remaining life (term) 4
but at the low end of the yield 3.5
3
?.5
2002 Bonds are in their last 9 2
years of the life cycle 1.5
Interest Rates
0.5
Term in Years
0.04
❑2
1 1
1
1
.
o
3m 6m 1y 2y 3y 4y
Sy 6y
7y 8y
9y 1 O 15y 20y
30y
Term in Years
By refinancing the bonds at the short end (terms less than 15 years) of the yield curve the City
will realize substantial interest rate savings thus lowering the cost of repaying the debt. The
graph below demonstrates the benefit that could be realized if the Citv
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
12 -Month 2 -Year 3 -Year 5 -Year 7 -Year 10 -Year US Treasury
•SunTrust
2002 Bonds
1%
, Nhnanung0ppnrwniW
refinances the Water and Sewer Revenue Bonds, Series 2002 with a SunTrust Bank Note.
There are several considerations that were analyzed to develop the recommendation to refinance
the 2002 bonds; financial gain, affordability of debt and flexibility in repayment of the debt.
Current interest rates are at historically low levels, due primarily to the U.S. enduring one of the
steepest economic contractions in many years. The Federal Reserve has maintained short and
long -term rates at very low levels in order to attempt to stimulate economic growth. These low
rates present an opportunity for the City to review its bond contracts to determine if refinancing
debt would have a positive economic impact on the City's financials. The Water and Sewer
Revenue Bonds, Series 2000 and 2002 are both excellent candidates for refinancing at this time.
We will defer the discussion on the Series 2000 to the May 9th commission meeting.
The Series 2002 Bonds were issued on November 15 2001 with the total principal amount of
$13,980,000 and a weight average interest rate (coupon) of 4.42% over the 18 year term. After
11 years, the remaining principal outstanding (Series 2002) is now $8,462,359 (gross) with a
weighted average interest rate of 4.99 %. The reason the weighted average interest rate has
increased is because we have moved further away from the origination date and interest rates
tend to increase over time (see Treasury Yield Curve above). This present an opportunity!
Originally, the debt (Series 2002) was issued as an 18 year bond (long -term borrowing) now the
City has the opportunity to reissue this debt as a 9 year note (short-term borrowing) and take
advantage of exceptionally low interest rate market and the lower cost of interest for short term
borrowing. These savings are demonstrated in the chart below. We have set the new proposed
3.28% (fixed rate) bank note next to the remaining bond payments. The net effect of this
4.60% 5.25% 5.00% 5.00
4.38%
C °
°
3.28% 3.28%
3.28% 3.28% 3.28% 3.28°
Risk Premium
°
�.25.
1.25%
5%
12 -Month 2 -Year 3 -Year 5 -Year 7 -Year 10 -Year US Treasury
•SunTrust
2002 Bonds
1%
, Nhnanung0ppnrwniW
refinances the Water and Sewer Revenue Bonds, Series 2002 with a SunTrust Bank Note.
There are several considerations that were analyzed to develop the recommendation to refinance
the 2002 bonds; financial gain, affordability of debt and flexibility in repayment of the debt.
Current interest rates are at historically low levels, due primarily to the U.S. enduring one of the
steepest economic contractions in many years. The Federal Reserve has maintained short and
long -term rates at very low levels in order to attempt to stimulate economic growth. These low
rates present an opportunity for the City to review its bond contracts to determine if refinancing
debt would have a positive economic impact on the City's financials. The Water and Sewer
Revenue Bonds, Series 2000 and 2002 are both excellent candidates for refinancing at this time.
We will defer the discussion on the Series 2000 to the May 9th commission meeting.
The Series 2002 Bonds were issued on November 15 2001 with the total principal amount of
$13,980,000 and a weight average interest rate (coupon) of 4.42% over the 18 year term. After
11 years, the remaining principal outstanding (Series 2002) is now $8,462,359 (gross) with a
weighted average interest rate of 4.99 %. The reason the weighted average interest rate has
increased is because we have moved further away from the origination date and interest rates
tend to increase over time (see Treasury Yield Curve above). This present an opportunity!
Originally, the debt (Series 2002) was issued as an 18 year bond (long -term borrowing) now the
City has the opportunity to reissue this debt as a 9 year note (short-term borrowing) and take
advantage of exceptionally low interest rate market and the lower cost of interest for short term
borrowing. These savings are demonstrated in the chart below. We have set the new proposed
3.28% (fixed rate) bank note next to the remaining bond payments. The net effect of this
refinancing is a savings of $612,450 over the next nine years. This savings is accomplished
without extending the length of the debt beyond the original financing.
SAVINGS
City of Winter Springs
Refunding of the Series 2002 Bonds (SunTrust)
Total Savings $10,511,365 $ 9,898,915 $ 612,450 $ 612,450 $ 528,304
Second, we have analyzed the ability of the Water and Sewer Utility pledged revenues to support
this refinancing and have determined that current utilities revenue are healthy /sufficient enough
to support this debt and to achieve a debt coverage ratio of 1.4% (1.1% is required) for the
length of this new bank note. Additionally, by issuing a traditional bank note as an alternative to
a traditional bond the City will realize a "Cost of Issuance" savings of approximately $131,000.
The final variable reviewed was the flexibility of repayment terms between bank notes and
bonds. The SunTrust Bank Note has a "no prepayment penalty" clause which will permit the
City repay the loan at anytime. Bonds typically are much more rigid in their terms for repayment.
This flexibility is important because the City currently has an application with the State
Revolving Loan Fund (SRLF) requesting a low interest rate loan to finance part or all of the
Lake Jessup Reclaimed Water Project. The SRLF is a State agency that makes low interest loan
available to Municipalities for Water and Sewer Infrastructure projects. These loans typically
come with very favorable rates (2 %) and can be extended to terms as long as 20 years. If the City
is granted the SRLF loan we would immediately retire that part of the Bank Note that was
funded by the State, further reducing interest expense.
Present Value
Current
Proposed
Annual
to 4/13/2011
Date
Bond
Bank Note
Savings
Savings
@3.2801768%
10/1/2011
$ 203,821
$ 129,531
$ 74,291
$
73,171
4/1/2012
963,821
972,086
-8,264
66,026
$
(8,009)
10/1/2012
187,196
125,117
62,080
$
59,187
4/1/2013
982,196
975,974
6,223
68,302
$
5,837
10/1/2013
169,309
111,162
58,146
$
53,662
4/1/2014
999,309
989,152
10,156
68,303
$
9,222
10/1/2014
150,219
96,763
53,455
$
47,754
4/1/2015
1,015,219
1,000,371
14,847
68,303
$
13,050
10/1/2015
127,513
81,944
45,568
$
39,405
4/1/2016
1,037,513
1,014,777
22,735
68,303
$
19,343
10/1/2016
103,625
66,646
36,979
$
30,954
4/1/2017
1,068,625
1,037,301
31,324
68,303
$
25,797
10/1/2017
79,500
50,727
28,773
$
23,314
4/1/2018
1,089,500
1,049,970
39,530
68,303
$
31,513
10/1/2018
54,250
34,339
19,911
$
15,616
4/1/2019
1,114,250
1,065,857
48,393
68,303
$
37,343
10/1/2019
27,750
17,423
10,327
$
7,841
4/1/2020
1,137,750
1,079,775
57,975
68,303
$
43,306
Total Savings $10,511,365 $ 9,898,915 $ 612,450 $ 612,450 $ 528,304
Second, we have analyzed the ability of the Water and Sewer Utility pledged revenues to support
this refinancing and have determined that current utilities revenue are healthy /sufficient enough
to support this debt and to achieve a debt coverage ratio of 1.4% (1.1% is required) for the
length of this new bank note. Additionally, by issuing a traditional bank note as an alternative to
a traditional bond the City will realize a "Cost of Issuance" savings of approximately $131,000.
The final variable reviewed was the flexibility of repayment terms between bank notes and
bonds. The SunTrust Bank Note has a "no prepayment penalty" clause which will permit the
City repay the loan at anytime. Bonds typically are much more rigid in their terms for repayment.
This flexibility is important because the City currently has an application with the State
Revolving Loan Fund (SRLF) requesting a low interest rate loan to finance part or all of the
Lake Jessup Reclaimed Water Project. The SRLF is a State agency that makes low interest loan
available to Municipalities for Water and Sewer Infrastructure projects. These loans typically
come with very favorable rates (2 %) and can be extended to terms as long as 20 years. If the City
is granted the SRLF loan we would immediately retire that part of the Bank Note that was
funded by the State, further reducing interest expense.
This financing request was bid via a formal Request for Proposal to all banks that had both the
financial means to bid and are of the highest investment grade quality as deemed by Standard
and Poor's and Fitch Rating. Three banks choose to bid on this financing (BB &T, Bank of
America, SunTrust Bank) and SunTrust Bank put forth the best proposal for this particular
request. The RFP and the responses were managed by PFM, the City of Winter Springs'
Financial Advisor.
FISCAL IMPACT:
Upon acceptance of the refinancing of the Water and Sewer Revenue Bonds, Series 2002 by
SunTrust Bank the City will realize a Net Present Value savings of $528,305 (6.36 %) over the
remaining 9 years until final maturity of the SunTrust note on 4/1/2020. This equates to a savings
for the Water and Sewer Fund of $68,000 (nominal) annually. This coupled with the future
recommendation to refinance the Water and Sewer Revenue Bond, Series 2000, will yield
significant savings for the City's Utility Operations.
COMMUNICATION EFFORTS:
This Agenda Item has been forwarded to the Mayor and City Commission; City Manager; City
Attorney /Staff, placed in Press Packets; placed in the City Hall (Lobby) City Commission
Meeting binder; and will be available on the City's Website, Laser Fiche, and the City's Server.
Additionally, information related to this Agenda Item has been sent to media /press
representatives who have requested Agendas /Agenda Item information, all Homeowner's
Associations on file with the City, all individuals who have requested Agendas /Agenda Item
information, Department Directors; and also posted outside City Hall; posted inside City Hall
with additional copies available for the general public; and posted at five (5) different locations
around the City.
RECOMMENDATION:
The City Manager and Finance Department recommend that the City Commission accept the
SunTrust proposal to issue a bank note to refund the Water and Sewer Revenue Bonds, Series
2002 not to exceed $8.5, adopt Resolution 2011 -15, and to authorize the City Manager and City
Attorney to complete all applicable paperwork necessary to complete this refinancing.
ATTACHMENTS:
Resolution 2011 -15
SunTrust Bank Loan Agreement
SunTrust Bank- Letter of Commitment
RESOLUTION NO. 2011-15
A RESOLUTION OF THE CITY OF WINTER SPRINGS,
FLORIDA ACCEPTING THE PROPOSAL OF SUNTRUST BANK
TO PURCHASE THE CITY'S NOT TO EXCEED $$.5 MILLION
WATER AND SEWER SYSTEM REVENUE REFUNDING NOTE,
SERIES 2011A TO REFUND ALL OF THE CITY'S
OUTSTANDING WATER AND SEWER REFUNDING REVENUE
BONDS, SERIES 2002; AUTHORIZING THE EXECUTION AND
DELIVERY OF A LOAN AGREEMENT WITH SAID BANK TO
SECURE THE REPAYMENT OF SAID LOAN; PROVIDING FOR
THE PAYMENT OF SUCH NOTE FROM THE NET REVENUES
OF THE CITY'S WATER AND SEWER SYSTEM ON PARITY
WITH CERTAIN OUTSTANDING WATER AND SEWER DEBT
OF THE CITY, ALL AS PROVIDED IN THE LOAN
AGREEMENT; 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; AUTHORIZING THE
EXECUTION AND DELIVERY OF OTHER DOCUMENTS IN
CONNECTION WITH SAID LOAN; PROVIDING FOR
SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER
SPRINGS, FLORIDA, AS FOLLOWS:
SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is
adopted pursuant to the provisions of Chapter 166, Florida Statutes, the Florida Constitution, and
other applicable provisions of law.
SECTION 2. FINDINGS. It is hereby ascertained, determined and declared:
(A) The City of Winter Springs, Florida (the "City ") deems it necessary,
desirable and in the best interests of the City that the City refund all of its outstanding Water and
Sewer Refunding Revenue Bonds, Series 2002 (the "Refunded Bonds "), all as more particularly
described in the Loan Agreement (as defined herein).
(B) Pursuant to Section 2(b), Article VIII of the State Constitution, and
Section 166.021, Florida Statutes, municipalities have the governmental, corporate and
proprietary powers to enable them to conduct municipal government, perform municipal
functions, and render municipal services, and may exercise any power for municipal purposes,
except when expressly prohibited by law. The issuance by the City of its Water and Sewer
System Revenue Refunding Note, Series 2011A (the "2011A Note ") and the execution and
delivery of the Loan Agreement for the purposes of refunding the Refunded Bonds is not
prohibited by law.
(C) The 2011A Note will be issued as "Additional Parity Obligations" in
accordance with the provisions of City Resolution No. 665 (the "Original Instrument ") and will
(01646064;2) Page 1 of 4
be secured by the Net Revenues as provided in Section 6 hereof and the Loan Agreement
pursuant to which the City will issue the 2011A Note to secure the repayment of the Loan.
(D) In accordance with the provisions of the Original Instrument, it is hereby
found that all of the covenants contained in said resolution shall be fully applicable to the 2011A
Note except as otherwise provided in the Loan Agreement.
(E) The City engaged Public Financial Management, Inc. ( "PFM "), the City's
financial advisor, to solicit proposals from qualified financial institutions for a refunding of the
Refunded Bonds. Three such proposals were solicited and PFM has recommended that the City
accept the proposal of SunTrust Bank (the "Bank "). In furtherance of such recommendation,
PFM advises the City that due to the present volatility of the market for municipal debt, it is in
the best interest of the City to issue the 2011A Note pursuant to the Loan Agreement by
negotiated sale, allowing the City to issue the 2011A Note at the most advantageous time, rather
than a specified advertised future date, thereby allowing the City to obtain the best possible
price, interest rate and other terms for the 2011A Note and, accordingly, the City Commission of
the City hereby finds and determines that it is in the best financial interest of the City that a
negotiated sale of the 2011A Note to the Bank be authorized.
SECTION 3. AUTHORIZATION OF REFUNDING OF REFUNDED BONDS.
The City hereby authorizes the refunding of the Refunded Bonds as more particularly described
in the Loan Agreement.
SECTION 4. ACCEPTANCE OF COMMITMENT LETTER WITH BANK.
Based on a recommendation from the City's financial advisor, the City hereby accepts the
commitment letter of the Bank dated May 25, 2011 attached hereto to provide the City with the
Loan.
SECTION 5. APPROVAL OF FORM OF AND AUTHORIZATION OF LOAN
AGREEMENT AND EXECUTION OF LOAN AGREEMENT AND 2011A NOTE. The Loan
and the repayment of the Loan as evidenced by the 2011 A Note shall be pursuant to the terms
and provisions of the Loan Agreement and the 2011A Note. The City hereby approves the Loan
Agreement by and between the City and the Bank in substantially the form attached hereto as
Exhibit A (the "Loan Agreement ") and authorizes the Mayor or the Deputy
Mayor /Commissioner of the City (collectively, the "Mayor ") and the City Clerk or any deputy or
assistant City Clerk of the City (collectively, the "City Clerk ") to execute and deliver on behalf
of the City the Loan Agreement and the 2011A Note in substantially the form attached to the
Loan Agreement, with such changes, insertions and additions as they may approve, their
execution thereof being evidence of such approval.
SECTION 6. PAYMENT OF DEBT SERVICE ON 2011A NOTE. Pursuant to
the Loan Agreement, the 2011A Note will be secured by the Net Revenues of the City's Water
and Sewer System on parity with other City debt, all as more particularly described in the Loan
Agreement.
SECTION 7. AUTHORIZATION OF OTHER DOCUMENTS TO EFFECT
TRANSACTION. To the extent that other documents including but not limited to an escrow
deposit agreement, redemption and defeasance notices, certificates, opinions, or items are needed
to effect any of the transactions referenced in this Resolution, the Loan Agreement or the 2011A
{01646064;2} Page 2 of 4
Note and the security therefore, the Mayor, the City Clerk, the City Manager, the Finance
Director and the City Attorney 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 8. PAYING AGENT AND REGISTRAR. The City hereby accepts
the duties to serve as registrar and paying agent for the 2011A Note.
SECTION 9. LIMITED OBLIGATION. The obligation of the City to repay
amounts under the Loan Agreement and the 2011A Note are limited and special obligations,
payable solely from the sources and in the manner set forth in the Original Instrument and the
Loan Agreement and shall not be deemed a pledge of the faith and credit or taxing power of the
City.
SECTION 10. EFFECT OF PARTIAL INVALIDITY. If any one or more
provisions of this Resolution, the Loan Agreement or the 2011A 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 2011A Note or the Loan Agreement, but this Resolution, the Loan
Agreement and the 2011A Note shall be construed and enforced as if such illegal or invalid
provision had not been contained therein. The 201 IA 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 11. EFFECTIVE DATE. This Resolution shall take effect
immediately upon its adoption.
PASSED, APPROVED AND ADOPTED this 11 «' day of April, 2011.
[SEAL]
CITY OF WINTER SPRINGS, FLORIDA
Mayor
/:TIMMU
By
City Clerk
Approved as to form:
By
City Attorney
{01646064;2} Page 3 of 4
EXHIBIT A
LOAN AGREEMENT
(See Attached)
{01646064;2) A -I Loan Agrecinent
""I MMIMA
Dated as of April , 2011
By and Behveen
THE CITY OF WINTER SPRINGS, FLORIDA
(the "City ")
and
SUNTRUST BANK
(the "Bank ")
(01646180;3)
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
ARTICLEI DEFINITION OF TERMS .......................................................... ............................... I
Section1.01. Definitions .................................................................... ............................... I
Section1.02. Interpretation ................................................................ ............................... 3
Section 1.03. Titles and Headings ...................................................... ............................... 3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES ......................... 3
Section 2.01. Representations and Warranties of City ....................... ............................... 3
Section 2.02. Covenants of the City ................................................... ............................... 4
Section 2.03. Representations and Warranties of Bank ..................... ............................... 4
ARTICLEIII THE NOTE ........................................................ ............................... I...................... 5
Section3.01. Purpose and Use... ....................................................................................... 5
Section3.02. The Note ....................................................................... .................I............. 5
Section 3.03. Conditions Precedent to Issuance of Note... ................................................ 5
Section 3.04. Registration of Transfer; Assignment of Rights of Bank ............................ 7
Section 3.05. Ownership of the Note .................................................. ............................... 8
Section 3.06. Use of Proceeds of Note Permitted Under Applicable Law ........................ 8
Section3.07. Authentication .............................................................. ............................... 8
ARTICLE IV COVENANTS OF THE CITY ...................................................... I......................... 8
Section 4.01. Performance of Covenants ........................................... ............................... 8
Section4.02. Payment of Note ........................................................... ............................... 8
Section4.03. Tax Covenant ................................................................ ............................... 9
Section 4.04. Application of Provisions of Original Instrument ........ ............................... 9
Section 4.05. Compliance with Laws and Regulations ...................... ............................... 9
ARTICLE V EVENTS OF DEFAULT AND REMEDIES ............................. I............................. 9
Section 5.01. Events of Default; Remedies ........................................ ............................... 9
ARTICLE VI MISCELLANEOUS PROVISIONS ........................................ ............................... 9
Section 6.01.
Covenants of City, Etc.; Successors ............................. ...............................
9
Section 6.02.
Term of Agreement ....................................................... .............................
Section 6.03.
Amendments and Supplements .................................. ...............................
Section6.04.
Notices ........................................................................ ...............................
10
Section 6.05.
Benefits Exclusive ...................................................... ...............................
10
Section6.06.
Severability ................................................................. ...............................
10
Section 6.07.
Payments Due on Saturdays, Sundays and Holidays . ...............................
Section6.08.
Counterparts ............................................................... ...............................
I I
Section6.09.
Applicable Law .......................................................... ...............................
11
Section 6.10.
No Personal Liability .................................................. ...............................
I I
Section 6.11.
Incorporation by Reference ........................................ ...............................
I I
Exhibit A Form of Note Including Purchaser's Certificate A -1
{01646180;3}
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement "), made and entered into this day
of April, 2011, by and between THE CITY OF WINTER SPRINGS, FLORIDA (the "City"),
a municipal corporation of the State of Florida, and SUNTRUST BANK, a Georgia state
banking corporation authorized to do business in Florida, and its successors and assigns (the
"Bank ").
WITNESSET11:
WHEREAS, capitalized terms used in these recitals and not otherwise 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, City Resolution No. 665 adopted by the City Commission of the City on
April 29, 1991, and other applicable provisions of law (all of the foregoing, collectively, the
"Act "), and Resolution No. 2011 -15, adopted by the City on April 11, 2011, is authorized to
borrow money, and more particularly issue the Note described below for the City's public
purposes; and
WHEREAS, in response to a request for proposal regarding an intended borrowing to
refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 2002
(the "Refunded Bonds "), the Bank submitted its commitment, dated March 25, 2011, to the City
(the "Commitment "); and
WHEREAS, pursuant to City Resolution 2011 -15, the City has accepted the
Commitment and the Bank is willing to purchase the 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 shall have the
respective meanings assigned thereto by the Original Instrument (as hereinafter defined) and the
following terms not otherwise defined shall have the respective meanings as follows unless the
context clearly requires otherwise:
"Act" shall have the meaning assigned to that term in the recitals hereof.
"Agreement" shall mean this Loan Agreement and all modifications, alterations,
amendments and supplements hereto made in accordance with the provisions hereof.
"Bank" shall mean SunTrust Bank, a Georgia state banking corporation, and its
successors and assigns.
(01646180;3)
"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 hired by the
City to render an opinion on such matters with regard to the Note.
"Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which
the office of the Holder at which payments on the Note are due or the offices of the City are
lawfully closed.
"City" shall mean the City of Winter Springs, Florida, a municipal corporation of the
State of Florida.
"City Clerk" shall mean the City Clerk or any deputy or assistant city clerk of the City
and such other person as may be duly authorized to act on his or her behalf.
"City Manager" shall mean the City Manager of the City and such other person as may be
duly authorized to act on his or her behalf.
" 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.
"Escrow Deposit Agreement" shall mean that certain agreement between the City and
as escrow trustee pursuant to which amounts shall be deposited and invested in
trust to provide for the payment of the Refunded Bonds as provided therein.
"Event of Default" shall mean an Event of Default as defined in Section 5.01 of this
Agreement.
"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
prepayment, April 1, 2020.
"Finance Director" shall mean the City's Finance Director or such other person as may be
duly authorized to act on his or her behalf.
"Financial Advisor" shall mean Public Financial Management, Inc.
"Fiscal Year" shall mean the 12 -month period commencing October I 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.
"Loan" shall refer to an amount equal to the outstanding principal of the Note, together
with unpaid interest and penalties, if any, which have accrued.
101646180;3) 2
"Note" shall mean the City of Winter Springs, Florida Water and Sewer System Revenue
Refunding Note, Series 2011 issued by the City under the Agreement and the Resolution.
"Note Rate" shall mean the rate of interest to be borne by the Note which shall be a fixed
rate equal to 3.28% per annum calculated on the basis of a 360 -day year of 12, 30 -day months.
"Noteholder" or "Holder" shall mean the Bank as the holder of the Note and any
subsequent registered holder of the Note.
"Original Instrument" shall mean Resolution No. 665 of the City adopted by the City
Commission on April 29, 1991, as amended and supplemented to the date hereof.
"Parity Obligations" shall mean collectively the City's outstanding Water and Sewer
Refunding Revenue Bonds, Series 2000 and the City's outstanding Water and Sewer Revenue
Refunding Bonds, Series 2001.
"Payment Date" shall mean each April 1 and October 1, commencing October 1, 2011
until the Note has been paid in full.
"Pledged Revenues" means the Net Revenues.
"Refunded Bonds" shall have the meaning set forth in the "Whereas" clauses to this
Agreement.
" Resolution" shall mean Resolution No. 2011 -15, adopted at a meeting of the City
Commission on April 11, 2011, 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.
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 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:
(01646184;3) 3
(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
Bank. 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, the Escrow Deposit Agreement and the
Resolution are 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 material adverse change in the
financial condition of the City or the Pledged Revenues has occurred since the audited financial
statements of the City for its year ended September 30, 2010.
(d) Powers of City The City has the legal power and authority to pledge the Pledged
Revenues to the repayment of the Note as described herein,
(e) Authorizations etc, No authorization, consent, approval, license, exemption of or
registration or filing with any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, has been or will be necessary for the valid
execution, delivery and performance by the City of this Agreement, the Note and the related
documents, except such as have been obtained, given or accomplished,
Section 2.02. Covenants of the City. The City covenants as follows:
The City will furnish to the Bank (i) within 210 days following the end of each Fiscal
Year, a comprehensive annual financial report of the City for such Fiscal Year prepared in
accordance with generally accepted accounting standards, which shall include a balance sheet
and income statement as of the end of such Fiscal Year, and an audit report of an independent
CPA, (ii) within 30 days of adoption in each year the current annual budget of the City, and (iii)
any other information which the Bank may reasonably request.
Section 2.03. Representations and Warranties of Bank. The Bank represents and
warrants to the City as follows:
(a) Existence The Bank is a Georgia state 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.
{01646180;3} 4
(b) Validity. 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) Krlowled e and Ex erience. 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 Pledged Revenues as it has needed in order to fairly evaluate the merits and risks
of making the Loan and investing in the Note; and (iii) is purchasing the Note as an investment
for its own account and not with a current view toward resale to the public.
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 Million and
Thousand Dollars ($ ..... .) . The proceeds available under this Agreement shall be used
solely to currently refund the Refunded Bonds and to pay costs of issuing the Note.
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 shall be
Million Thousand Dollars ($ } .
(b) Interest The Note shall bear interest at the Note Rate payable on each Payment
Date. The Note Rate shall be subject to adjustment as provided in the Note. The Noteholder
shall promptly notify the City in writing of any adjustments in the Note Rate. Notwithstanding
any provision hereof the contrary, in no event shall the interest rate on the Note exceed the
maximum rate permitted by law. Interest on the Note shall be computed on the basis of 12, 30-
day months and a 360 -day year.
(c) Prepayments and Principal Payments The Note shall be subject to prepayment at
the option of the City, as provided in the Note. Any prepayment shall be made on such date as
shall be specified by the City in a written notice delivered to the Notcholder not less than five (5)
days prior to the specified prepayment date. Any prepayment shall be applied first to accrued
interest, then to other amounts owed the Bank, and finally to principal as directed by the City.
Principal on the Note is payable on each April 1 commencing April 1, 2012 as set forth in
the Note.
Section 3.03. Conditions Precedent to Issuance of Note. Prior to or simultaneously
with the delivery of the Note, there shall be filed with the Bank the following, each in form and
substance reasonably acceptable to the Bank:
(01646180;3)
(a) an opinion of legal counsel to the City substantially to the effect that (i) the
Resolution has been duly adopted and this Agreement, the Escrow Deposit 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 therein 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,
the Escrow Deposit 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; (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, and the Escrow Deposit 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 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 (Z) 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 authority to refund the Refunded Bonds, to grant a lien on the Pledged Revenues as
described herein and in the Resolution; and (viii) all conditions contained in the ordinances and
resolutions of the City precedent to the issuance of the Note have been complied with;
(b) an opinion of Bond Counsel (who may rely on opinion of legal counsel to the
City), substantially to such effect 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 interest on the Note is excluded from gross income for
purposes of federal income taxation; and (iv) the lien of the Refunded Bonds on the Net
Revenues has been discharged;
(c) a copy of a completed and executed Form 8038 -G to be filed with the Internal
Revenue Service by the City;
{01646180;3} 6
(d) the original executed Note, Escrow Deposit Agreement and Agreement; and
(e) such other documents as the Bank reasonably may request (including, without
limitation, Florida Division of Bond Finance forms).
When the documents and items mentioned in clauses (a) through (e), 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 upon receipt of the purchase price therefor.
Section 3.04. 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. 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
Notcholder 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 lawful 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.
The Holder 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 no
transfer shall be permitted absent the City's receipt of a certificate in form and substance similar
to the one included as part of Exhibit A hereto from such proposed transferee. Every prior
Holder 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.
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
(01646180;3) 7
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.
Section 3.05. 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 Holder 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.
Section 3.06. 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 to refund the
Refunded Bonds and to pay costs of issuing the Note, and that such use is permitted by
applicable law.
Section 3.07. 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 as 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 executed 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 does hereby irrevocably pledge the Pledged Revenues as security for the
repayment of the Note. The lien of the Note on the Pledged Revenues is on parity with the lien
thereon of the Parity Obligations.
(b) The Note will be a special obligation of the City secured solely by the Pledged
Revenues and is payable from the Pledged Revenues as provided in this Agreement. 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 limitation.
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 Pledged Revenues.
(01646180;3) 8
Section 4.03. Tax Covenant. The City covenants to the Noteholder that the City will
not make any use of the proceeds of the Note at any time during the term 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 do all acts
including complying 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,
Section 4.04. Application of Provisions of Original Instrument. The Note shall for
all purposes be considered to be Additional Parity Obligations issued under the authority of
Section 19N of the Original Instrument and shall be entitled to all the protection and security
provided in and by the Original Instrument for Additional Parity Obligations, and the Note shall
be in all respects entitled to the same security, rights and privileges enjoyed by the Parity
Obligations except as otherwise provided herein. The debt service on the Note shall be payable
on a parity with the Parity Obligations provided hereunder, the Note shall have no lien or
otherwise be entitled to payments from any amounts on deposit in the Reserve Account or any
subaccount therein. The terms and provisions of the Original Instrument as supplemented hereby
shall remain in full force and effect and be applicable with respect to the Note.
Section 4.05. Compliance with Laws and Regulations. The City shall maintain
compliance with all federal, state and local laws and regulations applicable to the refinancing of
the Refunded Bonds and the Loan.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Events of Default; Remedies. The provisions of Section 21 of the
Original Instrument shall apply for purposes of this Loan Agreement and shall be applied to the
Note as though fully restated herein.
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.
{01646180;3} 9
Section 6.03. 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 6.04. 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
City Hall
1126 East State Road 434
Winter Springs, Florida 32708
Attention: Finance Director
(b) As to the Bank:
SunTrust Bank
200 S. Orange Ave. — Mail Code 2063
Orlando, FL 32801
Attention: Not - for - Profit and Governmental Banking
or at such other address as shall be furnished in writing by any such party to the other, and shall
be deemed to have been given as of the date so delivered or deposited in the United States mail.
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 6.05. 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 6.06. Severability. In case any one or more of the provisions 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.
{0164618 0;3) 10
Section 6.07. 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 other than a Business Day, then payment of such interest or principal shall be made
on the next succeeding Business Day 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 6.08. 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 6.09. Applicable Law, This Agreement shall be governed exclusively by and
construed in accordance with the applicable laws of the State of Florida.
Section 6.10. 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 Commission, 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 6.11. Incorporation by Reference. All of the terms and obligations of the
Resolution and the Exhibit hereto are hereby incorporated herein by reference as if all of the
foregoing were frilly set forth in this Agreement. All recitals appearing at the beginning of this
Agreement are hereby incorporated herein by reference.
(01646180;3) 11
[Signature Page for LOANAGREEMENT
dated as of July 8, 2010 between
the City of Winter Springs, FL and SunTrust Bank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first set forth herein.
CITY OF WINTER SPRINGS, FLORIDA
ATTEST:
City Clerk
Approved as to form:
City Attorney
By:_
Mayor
SUNTRUST BANK
AV.
Title: Authorized Officer
{016461$0;3} 12
EXHIBIT A
FORM OF NOTE
PRIOR TO BECOMING A HOLDER, A PROPOSED PURCHASER SHALL
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
WATER AND SEWER SYSTEM REVENUE REFUNDING NOTE,
SERIES 2011
Principal Sum Maturity D Note Rate Date of Issuance
R
April 1, 2020 3.28% April _, 2011
The CITY OF WINTER SPRINGS, FLORIDA (the "City "), for value received, hereby
promises to pay, solely from the sources described in the within mentioned Agreement, to the
order of SUNTRUST BANK, a Georgia state banking corporation, or its assigns (the "Holder "),
at 200 S. Orange Avenue — Mail Code 2063, Orlando, Fl 32801, Attention; Not - for - Profit and
Government Banking, or at such place as the Holder may from time to time designate in writing,
the Principal Sum, such principal to be repaid in installments due on the dates and in the amounts
set forth on Exhibit "A" hereto, with all unpaid principal and interest due in full on the above
referenced Maturity Date, and to pay interest on the outstanding principal amount hereof from
the most recent date to which interest has been paid or provided for, or if no interest has been
paid, from the Date of Issuance shown above, on April 1 and October 1 of each year (each, an
"Interest Payment Date "), commencing on October 1, 2011, until payment of said principal sum
has been made or provided for, at the above referenced Note Rate calculated on the basis of 12,
30 -day months and a 360 -day year. Payments due hereunder shall be payable 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. The original Holder is authorized to receive
payments due hereunder by auto debiting from a City deposit account with such original Holder.
This Note is issued for the purpose of refunding all the City's outstanding Water and
Sewer Refunding Revenue Bonds, Series 2002, under the authority of and in full compliance
with the Constitution and Statutes of the State of Florida, including particularly Chapter 166,
Florida Statutes City Resolution No. 665 as amended and other applicable provisions of law, and
Resolution No. 2011 -15, adopted by the City Commission (the "Commission ") on April 11,
2011, and a Loan Agreement dated April , 2011 by and between the City and the Holder
(the "Agreement "). This Note is being issued as "Additional Parity Obligations" within the
meaning of City Resolution No. 665 adopted by the City Commission of the City on April 29,
1991.
{01646180;3} Exhibit A -1
This Note is a limited, special obligation of the City, payable from and secured solely by
a lien upon and pledge of the Pledged Revenues, as defined and described and in the manner
provided in the Agreement. The pledge of the Pledged Revenues to the payment of this Note is
on a parity (except as otherwise provided in the Agreement) with the City's outstanding (a)
Water and Sewer Refunding Revenue Bonds, Series 2000; (b) Water and Sewer Refunding
Revenue Bonds, Series 2001.
All capitalized terms not otherwise defined herein shall have the meanings ascribed to
such terms in the Agreement.
This Note may be prepaid in whole or in part on any date, with five (S) days prior written
notice to the Holder by payment in an amount equal to the principal amount to be prepaid plus
accrued interest thereon to the date of such prepayment.
The Note Rate, as stated above, is subject to adjustment as follows:
(a) Adjustment in the Event of a Determination of Taxability In the event that a
Determination of Taxability shall have occurred, the Note Rate shall be subject to adjustment to
the Taxable Rate, effective retroactively to the date on which the interest payable on this Note is
includable for federal income tax purposes in the gross income of the Holder hereof. In addition,
the Holder of this Note or any former Holders of this Note, as appropriate, shall be paid an
amount equal to any additions to tax, interest and penalties, and any arrears in interest that are
required to be paid to the United States of America by the Holder or former Holders of this Note
as a result of such Determination of Taxability. All such additional interest, additions to tax,
penalties and interest shall be paid by the City within sixty (60) days following the
Determination of Taxability and demand by the Holder.
(b) Adjustment of Rate of Interest for Partial Taxabil . In the event that interest on
this Note during any period becomes partially taxable as a result of a Determination of Taxability
applicable to less than all of this Note, then the Note Rate shall be increased during such period
by an amount equal to: (A -B) x C where:
(A) "A" equals the Taxable Rate (expressed as a percentage);
(B) "B" equals the Note Rate (expressed as a percentage); and
(C) "C" equals the portion of this Note the interest on which has become
taxable as the result of such tax change (expressed as a decimal).
In addition, the Holder of this Note or any former Holder of this Note, as appropriate,
shall be paid an amount equal to any additions to tax, interest and penalties, and any arrears in
interest that are required to be paid to the United States by the Holder or former Holders of this
Note as a result of such Determination of Taxability. All such additional interest, additions to
tax, penalties and interest shall be paid by the City within sixty (60) days following the
Determination of Taxability and demand by the Holder.
(c) Adjustment of Rate of Interest for Change in Maximum Corporate Tax Rate. In
the event that the maximum effective federal corporate tax rate (the "Maximum Corporate Tax
{01646180;3} Exhibit A -2
Rate ") during any period with respect to which interest shall be accruing on this Note on a tax -
exempt basis, changes from the Maximum Corporate Tax Rate then in effect, the interest rate on
this Note that is bearing interest on a tax - exempt basis shall be adjusted to the product obtained
by multiplying the interest rate then in effect on this Note by a fraction equal to (1 -A divided by
1 -B), where A equals the Maximum Corporate Tax Rate in effect as of the date of adjustment
and B equals the Maximum Corporate Tax Rate in effect immediately prior to the date of
adjustment.
(d) Adjustment of Rate of Interest for Other Chan es Affecting After -Tax Yield. So
long as any poilion of the principal amount of this Note or interest thereon remains unpaid and
this Note is held by SunTrust Bank (a) if any law, rule, regulation or executive order is enacted
or promulgated by any public body or governmental agency which changes the basis of taxation
of interest on this Note or causes a reduction in yield on this Note (other than by reason of a
change described above or other than due to the deterioration in the financial condition of
SunTrust Bank) to SunTrust Bank, including without limitation the imposition of any excise tax
or surcharge thereon, or (b) if, as result of action by any pubic body or governmental agency, any
payment is required to be made by, or any federal, state or local income tax deduction is denied
to, SunTrust Bank (other than by reason of a change described above or by reason of any action
or failure to act on the part of SunTrust Bank or a deterioration in the financial condition of
SunTrust Bank), by reason of the ownership of this Note, the City shall reimburse SunTrust
Bank within five (5) days after receipt by the City of written demand for such payment. The
determination of the after -tax yield calculation shall be verified by a firm of certified public
accountants regularly employed by SunTrust Bank and acceptable to the City, and such
calculation, in the absence of manifest error, shall be binding on the City and SunTrust Bank.
This provision shall apply to and is included for the sole benefit of the initial Holder of this Note
(SunTrust Bank), and its successors or assigns due to an acquisition, merger or any other legal
combination, restructuring or disposition involving SunTrust Bank (collectively, the "Benefitted
Parties "), Any Holder of this Note other than the Benefitted Parties shall not have the benefit of
this provision and shall not have a claim to the payment of additional amounts under this
provision as a result of their ownership of this Note.
For purposes of the foregoing:
(1) "Determination of Taxability" shall mean, with respect to this Note, (i) the
issuance by the Internal Revenue Service of a statutory notice of deficiency or other written
notification which holds in effect that the interest payable on this Note is includable for federal
income tax purposes in the gross income of the Holder hereof, which notice or notification is not
contested by either the City or the Holder of the Note, or (ii) a determination by a court of
competent jurisdiction that the interest payable on this Note is includable for federal income tax
purposes in the gross income of the Holder hereof, which determination either is final and non -
appealable or is not appealed within the requisite time period for appeal, or (iii) the admission in
writing by the City to the effect that interest on this Note is includable for federal income tax
purposes in the gross income of the Holder hereof.
(2) "Prime Rate" shall mean a rate of interest equal to the announced prime
commercial lending rate per annum of SunTrust Bank. The Prime Rate is a reference rate for the
information and use of SunTrust in establishing the actual rate to be charged to the City. The
{01646180;3} Exhibit A -3
Prime Rate is purely discretionary and is not necessarily the lowest or best rate charged any
customer. The Prime Rate shall be adjusted from time to time without notice or demand as of
the effective date of any announced change thereof.
(3) "Taxable Rate" means a rate equal to the Prime Rate times that percentage which
after the Determination of Taxability will result in the same after -tax yield to the Holder of this
Note as before said Determination of Taxability.
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 nonusurious 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, the Agreement or the Resolution, 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 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 PAYABLE SOLELY FROM THE PLEDGED 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 TAXATION IN ANY FORM OF ANY PROPERTY THEREIN TO PAY THIS
NOTE OR THE INTEREST HEREON.
Upon the occurrence of an Event of Default the principal of this Note the Holder shall
also have such 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]
{0164618 0;3} Exhibit A -4
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 a City Clerk of the City, either manually or with
facsimile signature, and this Note to be dated the Date of Issuance set forth above.
[SEAL]
ATTEST:
By:
City Clerk
Approved as to form:
City Attorney
CITY OF WINTER SPRINGS, FLORIDA
Mayor
(01646I80;3) Exhibit A -5
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
LM
City Clerk
{01646180;3} Exhibit A -b
ASSIGNMENT
FOR VALUE 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 Noteholder:
By:
(0164618 0;3) Exhibit A -7
EXHIBIT A
SERIES 2011 NOTE — PRINCIPAL REPAYMENT SCHEDULE
Date Amount
4/1/2012
4/l/2013
4/1/2014
4/l/2015
4/1/2016
4/1/2017
4/1/2018
4/1/2019
4/1/2020
{01646184;3} Exhibit A -8
PURCHASER'S CERTIFICATE
City of Winter Springs, Florida (the "City ")
Ladies and Gentlemen:
The undersigned, as a purchaser of the City of Winter Springs, Florida Water and Sewer
System Revenue Refunding Note, Series 2011 (the "Note ") dated April , 2011, consisting of
one typewritten Note, hereby certifies that we have been provided (a) a copy of City of Winter
Springs Resolution No. , adopted by the City on , 2011, authorizing the
issuance of the Note (the "Resolution "), (b) the Loan Agreement dated as of April , 2011,
between the City and us as assignee of SunTlust Bank (the "Agreement ") and (c) such financial
and general information respecting the Pledged Revenues (as such term is defined in the
Agreement) and the City, and the Note described above as we deem necessary to enable us to
make an informed investment judgment with respect to the purchase of said Note.
We hereby make the following representations, which representations may be relied upon
by the City:
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 Pledged Revenues as specified in the Resolution and the
Agreement.
B. We understand that no official statement, offering memorandum or other form of
offering document was prepared or is being used in connection with the offering
or sale of the Note (collectively, "Disclosure Documents "), but 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 with its officers, employees and others. We have not requested any
Disclosure Documents in connection with the sale of the Note. 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, and other relevant matters.
(01646180;3) A -1
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.
H. We acknowledge the understanding that the Note is not being registered under the
Securities Act of 1933, as amended (the "1933 Act ") or Chapter 517, Florida
Statutes, and that the Resolution and Agreement are 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.
F. We are not acting as a bond house, broker or other intermediary, in our purchase
of the Note. Although we retain the right to transfer the Note in the future, we
understand that the Note may not be readily tradable.
G. We have received all documents requested by us incident to our purchase of the
Note.
H. We acknowledge that we are an "accredited investor" within the meaning of
Chapter 517, Florida Statutes and Regulation D of the 1933 Act.
Signed as of the day of
Authorized Officer
(01646180;3) A -2
.:rte
SuNTRuST
March 25, 2011
Mr. Brent Wilder
Public Financial Management, Inc.
300 S. Orange Avenue, Suite 1170
Orlando, FL 32801
SunTrust Bank
Not- for - Profit & Government Banking
200 South Orange Avenue — Mail Code 2063
Orlando, Florida 32801
Telephone 407 -237 -5909
Facsimile 407- 237.6030
Subject: Response to Bid Request for "Non- Bank - Qualified" Term Loan / City of Winter Springs,
Florida — Utility System Revenue Refunding Note Series 2011 in the amount of up to
$8,500,000
Dear Brent:
SunTrust Bank is pleased to present our commitment to provide up to $8,500,000 to current refund the
remaining portion of the outstanding Series 2002 Water and Sewer Utility System Revenue Bonds.
SunTrust appreciates the opportunity to respond to the City's financing request and has provided a
comprehensive financing structure that we believe offers you competitive terms based on current market
conditions.
Although the following provisions, terms and conditions are intended to be all- inclusive, they do not
necessarily contain all of the anticipated terms that will be applicable to the credit. All such terms will be set
forth in the final, definitive loan documents, and all such terms must be acceptable to the Bank and its Counsel.
This Commitment is contingent upon the accuracy of all facts, statements and financial information submitted
to the Bank by the Borrower and is conditioned upon the terms outlined below.
Borrower: City of Winter Springs, Florida (the "City ")
Bank: SunTrust Bank
Purpose: To refinance the remaining portion of the outstanding Series 2002 Water and Sewer
Utility System Revenue Bonds.
Amount: Up to $8,500,000 — City of Winter Springs, Florida/ Utility System Revenue Refunding
Note, Series 2011 {the "Note "}
Terms: Interest payable semi - annually each April 1 and October 1, with the first interest payment
due on October 1, 2011. The first principal payment will be due on April 1, 2012.
Security: The 2011 Note principal and interest thereon will be secured by and payable solely from a
lien and pledge of (i) Net Revenues (as defined in the Bond Resolution) derived from the
ownership, use or operation of the City's Water System and Sewer System (collectively, the
"Pledged Revenues "). The 2011 Note will be issued on parity with the City's outstanding
Water and Sewer Revenue Bonds, Series 2000 and 2001, and any subsequently issued
Senior Lien debt.
Interest Rate:
Fixed Rate (9 year fully_ amortizing) pre- payable without penalty
The non - hank - qualified, tax- exempt, fixed interest rate sball be calculated on a 301360 day
basis. As of March 25, 2011, the interest rate will equal 3.28% with the interest rate
Iocked until April 16, 2011. The interest rate will be fixed through the maturity date. If the
Note closing does not occur by April 16, 2011, the interest rate shall be based on the
following:
After April 16, 2011, the interest rate shall be based on the formula below:
77% x (5 -year U.S. Dollar Swap Rate + 2.33 %)
Maturity: The Note will mature on April 1, 2020
Prepayment
Penalty: N/A
SunTrust Bank ratings:
Ratin A enc
Short -term rating
Long-term rating
Outlook
Mood 's
R-2
A3
Stable
Standard & Poor's
A -2
BBB+
Stable
Fitch
F -2
BBB+
Stable
Legal Fees: The Borrower shall be responsible for Bond Counsel Fees. Bank legal fees shall not
exceed $3,500 for the Bank's Counsel to review documents. The Bank shall be - using
Joe Stanton from Broad & Cassel, P.A.
Conditions: (1) All matters relating to this loan, including all instruments and documents required,
are subject to the Bank's policies and procedures in effect, applicable
governmental regulations and /or statutes, and approval by the Bank and Bank's
Counsel.
(2) A written opinion from Borrower's attorney, in form and substance acceptable to
Bank and Bank's Counsel, that all documents are valid, binding and enforceable
in accordance with their terms, that the execution and delivery of said documents
have been duly authorized. The opinion should also address such other matters as
the Bank and Bank's Counsel deem appropriate.
(3) The Borrower shall submit annual audited statements within 210 days of fiscal
year end, together with an annual budget within 30 days of adoption, together
with any other information the Bank may reasonably request.
(4) The Borrower shall maintain compliance with all federal, state and local
regulations regarding the purpose of the proposed Note.
(S) The Borrower and the Bank shall agree on the content of final documentation, to
include events of default, covenants, resolutions from the Borrower and all other
legal documentation relating to the Note,
(5) The "non- bank - qualified" tax - exempt interest rates quoted herein take into
consideration a corporate tax rate of 35%. In the event of a change in the
maximum corporate tax rate, the Bank shall have the right to adjust the interest
rate in order to maintain the same after tax yield.
(7) The Bank shall have the right to adjust the tax - exempt interest rate in order to
maintain the same after tax yield if any amendments to existing law are enacted
which would adversely affect the Bank's after tax yield including any
"determination of taxability" as will be defined in the Note documentation.
(8) The Borrower shall comply with and agree to such other covenants, terms, and
conditions that may be reasonably required by the Bank and its counsel and are
customary in tax - exempt financings of this nature. These covenants would
include, but are not to be limited to, covenants regarding compliance with laws
and regulation, remedies in the event of default and Bond Counsel's opinion
regarding the "non- bank - qualified" tax - exempt nature of the Note.
(9) The Borrower shall not issue additional parity debt secured by and payable from
Net Revenues (as described in the City's Resolution authorizing the issuance of
the 2011 Note) derived from the use or operation of the City's Water System and
Sewer System (collectively, the "Pledged Revenues ") unless the maximum annual
debt service coverage for both the existing and proposed debt service exceeds
1.10:1.0 for the preceding twelve months.
(10) The City covenants to fix, establish, revise from time to time, whenever necessary,
maintain and collect such fees, rates, rentals and other charges for the use of the
products, services and facilities of the System which will always provide Not
Revenues in each year sufficient to pay all operating and maintenance expenses of
the System, plus 110% of the Bond Service Requirement coming due in
such year on all Outstanding Bonds.
(11) The SunTrust Bank loan commitment expires thirty (30) days after the date of this
commitment letter. If the City desires for us to provide a new commitment letter,
our interest rate calculations will be modified to reflect the prevailing interest rate
environment.
If you have any questions regarding any aspect of our commitment letter, please do not hesitate to contact
me at (407) 237 -5909. I look forward to continuing to build a stronger relationship with the City of Winter
Springs, Florida.
Sincerely,
William C. Jones
First Vice President
Not - for - Profit & Goverment Banking
SunTrust Bank
Accepted this day of 2011
Title:
RESOLUTION NO. 2011-15
A RESOLUTION OF THE CITY OF WINTER SPRINGS,
FLORIDA ACCEPTII�IG THE PROPOSAL OF SUNTRUST BANK
TO PURCHASE THE CITY'S NOT TO EXCEED $8.5 MII,LION
WATER AND SEWER SYSTEM REVENUE REFUNDING NOTE,
SERIES 2011A TO REFUND ALL OF THE CITY'S
OUTSTANDING WATER AND SEWER REFUNDING REVENUE
BONDS, SERIES 2002; AUTHORIZING TAE EXECUTION AND
DELIVERY OF A LOAN AGREEMENT WITH SAID BANK TO
SECURE THE REPAYMENT OF SAID LOAN; PROVIDING FOR
THE PAYMENT OF 5UCH NOTE FROM THE NET REVENUES
OF THE CITY'S WATER AND SEWER SYSTEM ON PAI�ITY
WIT$ CERTAIN OUTSTANDING WATER AND SEWER DEBT
OF THE CITY, ALL AS PROVIDED IN THE LOAN
AGREEMENT; AUTHORIZING THE PROPER OFFICIALS OF
THE CITY TO DO ANY OT'HER ADDITIONAL THINGS
DEEMED NECESSARY OR ADVLSABLE IN CONNECTION
WITH THE EXECUTION OF THE LOAN AGREEMENT, THE
NOTE, AND THE SECURITY THEREFOR; AUTHORIZING THE
EXECUTION AND DELIVERY OF OTI�R DOCUA�NTS IN
CONNECTION WITH SAID LOAN; PROVIDING FOR
SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER
SPRINGS, FLORIDA, AS FOLLOWS:
SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is
adopted pursuant to the provisions of Chapter 166, Florida Statutes, the Florida Constitution, and
other applicable provisions of law.
SEG"TION 2. FINDINGS. It is hereby ascertained, detennined and declared:
(A) The City of Winter Springs, Florida {the "City") deems it necessary,
desirable and in the best interests of the City that the City refund aIl of its outstanding R/ater and
Sewer Refunding Revenue Bonds, Series 2002 (the "Refunded Bonds"), all as more particularly
described in the Loan Agreement (as defined herein).
(B) Pursuant to Section 2(b), Article VIII of the State Constitution, and
Section 166.021, Florida Statutes, municipalities have the governmental, corporate and
proprietary powers to enable them to conduct municipal government, perform municipal
functions, and render municipal services, and may exercise any power for municipal purposes,
except when expressly prohibited by law. The issuance by the City of its Water and Sewer
System Revenue Refunding Note, Series 2011A (the "2011A Note") and the execution and
delivery of the Loan Agreement for the purposes of refunding the Refunded Bonds is not
prohibited by law.
(C� The 201IA Note will be issued as "Additional Parity Obligations" in
accordance with the provisions of City Resolution No. 665 (the "Original Instrument") and will
{oi�wo6�;z} Page 1 of4
i
, _ �
I
I
be secured by the Net Revenues as provided in Section 6 hereof and the Loan Agreement
pursuant to which the City will issue the 201 lA Note to secure the repayment of the Loan.
(D} In accardance with the provisions of the Original Instrument, it is hereby
found that all of the covenants contained in said resolution shall be fully applicable to the 2011A
Note except as otherwise provided in the Loan Agreement.
(E) The City engaged Public Financial Management, Inc. ("PFM"), the City's
financial advisor, to solicit proposals from qualified financial institutions for a refunding of the
Refunded Bonds. Three such proposals were solicited and PFM has recommended that the City
accept the pmposal of SunTrust Bank (the "Bank"). In furtherance of such recommendation,
PFM advises the City that due to the present volatility of the market far municipal debt, it is in
the best interest of the City to issue the 2011A Note pursuant to the Loan Agreement by
negotiated sale, allowing tfie City to issue the 2011A Note a# the most advantageous time, rather
than a specified advertised future date, thereby allowing the City to obtain the best possible
price, interest rate and other terms for the 2011A Note and, accordingly, the City Commission of
the City hereby finds and determines that it is in the best financial interest of the City that a
negotiated sale of the 2011A No#e to the Bank be authorized.
SECTION 3. AUTHORIZATION OF REFUNDING OF REFUNDED BONDS.
The City hereby authorizes the refunding of the Refunded Bonds as more particularly described
itt the Loan Agreement.
SECTION 4. ACCEPTAIdCE OF COMMTTMENT LETTER WITH BANK.
Based on a recommendation from the City's financial advisor, the City herehy accepts the
commitment letter of the Bank dated May 25, 2011 attached hereto to provide the City with the
Loan.
SECT'ION 5. APPROVAL OF FORM OF AND AUTHORIZATION OF LOAN
AGREEMENT AND EXECLTTION OF LOAN AGREEMF�IT AND 2011A NOTE. The Loan
and the repayment of the Loan as evidenced by the 2011 A I�iote shall be pursuant to the terms
and pravisions of the Loan Agreement and the 2Q I 1 A Note. The City hereby approves the Loan
Agreement by and between the City and the Bank in substantially the form attached hereto as
Ezhibit A(the "Loan Agreement") and authorizes the Mayor or the Deputy
Mayor/Comm.issioner of the City (collectively, the "Mayor'� and the City Clerk or any deputy or
assista.nt City Clerk of the City (collectively, the "City Clerk") to execute and deliver on behalf
of the City the Loan Agreement and the 2011A Note in substantially the form attached to the
Loan Agreement, with such changes, insertions and additions as they may approve, their
execution thereof being evidence of such approval.
SECTION 6. PAYMENT OF DEBT SERVICE ON 2011A NOTE. Pursuant to
the Loan Agreement, the 2011A Note will be secured by the Net Revenues of the City's Water
and Sewer System on parity with other City debt, all as more particularly described in the Loan
Agreement
SECTION 7. AUTHORIZATION OF OTHF� DOCUMENT'S TO EFFECT
TR.ANSACTION. To the extent that other documents including but not Iimited to an escrow
deposit agreement, redemption and defeasance notices, certificates, opinions, or items are needed
to effect any of the transactions referenced in this Resolution, the Loan Agreement or the 2011A
{oi6aso6a;�} Page 2 of 4
� s
Note and the security therefore, the Mayar, the City Clerk, the City Manager, the Finance
Director and the City Attorney 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,
punctuai, and complete performance of the covenants, agreements, provisions, and other terms as
are contained herein and in the documents included herein by reference.
SECTION S. PAYING AGENT AND REGISTR.AR The City hereby accepts
the duties to serve as registrar and paying agent for the 201 lA Note.
SECTION 9. LIMITED OBLIGATION. The obligation of the City to repay
amounts under the Loan Agreement and the 2011A Note are limited and special obligations,
payable solely from the sources and in the manner set forth in the Original Instrumen# end the
Loan Agreement aad shall not t�e deemed a pledge of the faith and credit or taxing power of the
City.
SECTION 10. EFFECT OF PARTIAL INVALIDITY. If any one or more
provisions of this Resolution, the Loan Agreement or the 2011A Note shall for any reason be
held to be illegal or invalid, such illegality or invalidity shall not effect any other pmvision of
this Resolufion or the 2411A Note or the Loan Agreement, but this Resolution, the Loan
Agreement and the 2011A Note shall be construed and enforced as if such illegal or invalid
pmvision had not been contained therein. The 2011ANote and Loan Agreement shall be issued
a.nd this Resolution is adopted with the intent that the laws o€ the State of Florida shall govern
their construction.
SEG°TION 11. EFFECTIVE DATE. This Resolution sha(I take effect
immediate�y upon its adoption.
PAS�'ED, APPROVED AND ADOPTED ttus 11�' day of April, 2011.
CITY OF WINTER SPRINGS, FLORIDA
[SEAI.]
By: .
M or
AT"I'EST:
�
By
lerk
Appraved as to form:
By
City Attomey
{oi6abo�a;z} Page 3 of 4