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HomeMy WebLinkAboutResolution 2012-14 Bond Refinancing RESOLUTION NO. 2012-14 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA ACCEPTING THE PROPOSAL OF BRANCH BANKING AND TRUST COMPANY TO PURCHASE THE CITY'S NOT TO EXCEED $2,800,000 LIMITED GENERAL OBLIGATION REFUNDING NOTE, SERIES 2012 TO REFUND THE CITY'S OUTSTANDING LIMITED GENERAL OBLIGATION BONDS, SERIES 2002 MATURING ON OR AFTER JULY 1, 2013; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT WITH SAID BANK TO SECURE THE REPAYMENT OF SAID NOTE; PLEDGING TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH NOTE THE AMOUNTS RECEIVED BY THE CITY FROM THE LEVY OF AN ANNUAL AD VALOREM TAX NOT EXCEEDING ONE - QUARTER OF ONE MILL ON ALL TAXABLE PROPERTY WITHIN 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 AN ESCROW DEPOSIT AGREEMENT AND OTHER DOCUMENTS IN CONNECTION WITH SAID LOAN; DESIGNATING THE NOTE AS "BANK QUALIFIED;" 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, particularly Article VII Section 12(b) and Article VIII Section 2(b) thereof and other applicable provisions of law. SECTION 2. FINDINGS. It is hereby ascertained, determined and declared: (A) On February 27, 2002, following the approval of the issuance of its 2002 Bonds (as hereinafter defined) at a bond referendum election, the City of Winter Springs, Florida (the "City ") issued its Limited General Obligation Bonds, Series 2002 (the "2002 Bonds "). (B) At said bond referendum election, the qualified electors of the City also approved the levying of a not exceeding one - quarter of one mill ad valorem tax on all taxable property within the City (the "Pledged Funds ") to provide for the repayment of such 2002 Bonds. {23675398;2} (C) Article VII Section 12(b) of the Florida Constitution provides that municipalities may issue bonds or other certificates of indebtedness payable from ad valorem taxation and maturing more than twelve months after issuance to refund outstanding bonds and interest and redemption premium thereon at a "lower net average interest cost rate." (D) The certificate of the City's financial advisor, Public Financial Management, Inc. ( "PFM ") attached hereto indicates that the net average interest cost rate on the Note (as hereinafter defined) is less than the net average interest cost rate on the Refunded Bonds as hereinafter defined. The interest rate on the Note is 3.65% and the final maturity of the Note is July 1, 2031. (E) The City deems it necessary, desirable and in the best interests of the City that the City refund all of the 2002 Bonds maturing July 1, 2013 and thereafter (the "Refunded Bonds "), all as more particularly described in the Loan Agreement (as defined herein). (F) 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 exercise any power for municipal purposes, except when expressly prohibited by law. The issuance by the City of its Limited General Obligation Refunding Note, Series 2012 (the "Note ") and the execution and delivery of the Loan Agreement for the purposes of refunding the Refunded Bonds is not prohibited by law. Pursuant to Chapter 166, Part II, Florida Statutes, the City is authorized to issue evidences of indebtedness like the Note and to pledge the Pledged Funds for the payment thereof. (G) PFM, as the City's financial advisor, was engaged by the City to issue a request for proposal to qualified financial institutions to provide the terms and conditions under which they would purchase the Note to refund the Refunded Bonds. PFM advises the City that due to the present volatility of the market for municipal debt and based on a review of the proposals received via the competitive request for proposal process, it is in the best interest of the City to issue the Note pursuant to the Loan Agreement by negotiated sale, allowing the City to issue the 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 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 Note to Branch Banking and Trust Company (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. The Note shall not be issued unless the principal amount of the Note shall not exceed an amount sufficient to pay the sum of (a) the principal amount of the Refunded Bonds to be refunded; (b) the aggregate amount of unmatured interest payable on the Refunded Bonds to be refunded to and including the date such Refunded Bonds are to be called for redemption; (c) redemption premium payable on the Refunded Bonds to be refunded as of such redemption date; and (d) the refunding expenses. {23675398;2} 2 As evidenced in the certificate of PFM attached hereto, the sum of the present value of the total payments of both principal and interest to become due on the Note and the present value of refunding expenses not paid from the net proceeds of the Note is less than the present value of the principal and interest payments to become due at maturities, or earlier mandatory redemption dates, on the principal amount of Refunded Bonds computed at the effective interest rate of the Note. The first installment of principal of the Note shall mature, or be subject to mandatory redemption, not later than July 1, 2013. Delivery of the Note is also subject to receipt by the City Commission of a final financial plan prepared by PFM complying in all respects with Section 132.36(1)(d), Florida Statutes and receipt of a certification of the City Finance Director demonstrating that the Note shall bear a lower net average interest cost rate than the Refunded Bonds to be refunded. SECTION 4. ACCEPTANCE OF COMMITMENT LETTER WITH BANK. Based on a recommendation from PFM, the City hereby accepts the commitment letter of the Bank dated March 21, 2012 (revised April 3, 2012) attached hereto to provide the City with the loan evidenced by the Note. SECTION 5. APPROVAL OF FORM OF AND AUTHORIZATION OF LOAN AGREEMENT AND EXECUTION OF LOAN AGREEMENT AND NOTE. The repayment of the loan as evidenced by the Note shall be pursuant to the terms and provisions of the Loan Agreement and the Note which shall also include the medium of payment, the place or places at which principal and interest on the Note shall be payable, and the redemption provisions applicable to the Note. The Note shall be executed by the City as provided in the Note. The City hereby approves the Loan Agreement by and between the City and the Bank in substantially the form attached hereto (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 Note in substantially the form attached to the Loan Agreement, each 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 NOTE. Pursuant to the Loan Agreement, the Note will be secured by the Pledged Funds. 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 notices, certificates, opinions, or other items are needed to effect any of the transactions referenced in this Resolution, the Loan Agreement, the Note, and the security therefore, the Mayor, the City Clerk, and the City's City Manager, Finance Director, the City Attorney and Bond Counsel 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. {23675398;2} 3 SECTION 8. PAYING AGENT AND REGISTRAR. The City hereby accepts the duties to serve as registrar and paying agent for the Note. SECTION 9. 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 full faith and credit of the City. SECTION 10. 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 that issue "on behalf' of the City, will during the calendar year 2012 issue more than $10,000,000 of "tax- exempt" obligations, exclusive of those obligations described in Section 265(b)(3)(C)(ii) of the Code. SECTION 11. EFFECT OF PARTIAL INVALIDITY. If any one 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 affect any other provision of this Resolution, the Note or the Loan Agreement, 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 12. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. [Signatures on Following Page] {23675398;2} 4 PASSED, APPROVED AND ADOPTED this 23 day of April, 2012. CITY OF WINTER SPRINGS, FLORIDA [SEAL; a By: �! .` / i / • ayo / ATTEST: , By mo n, 7-- ler - Approved form: By City Attorney {23675398;2} 5