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CITY OF SUNNY ISLES BEACH, FLORIDA <br />NOTES TO FINANCIAL STATEMENTS <br />FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 <br />NOTE 6 — LONG-TERM LIABILITIES (CONTINUED) <br />GOVERNMENTAL ACTIVITIES <br />Bank of America Promissory Note (Note Payable) <br />On June 8, 2009, the City entered into a $20,000,000 promissory note agreement with Bank <br />of America to finance the purchase of land located within the City limits to convert the land <br />into public parks. Principal and interest payments are due in equal quarterly installments of <br />$368,145 through July 1, 2029. The promissory note bears interest at a rate of 4.03%. The <br />City covenants to budget and appropriate non -ad valorem revenues in amounts sufficient to <br />pay the principal of and interest on the note. <br />The note contains provisions in the event of default of any payment due to the lender, <br />written admission or inability to pay or filing a petition of bankruptcy, judgment of <br />insolvency, or other similar events by the City, the lender may declare all obligations under <br />this bond immediately due and payable. <br />2011 Series Capital Improvement Revenue and Revenue Refunding Bonds (Revenue <br />Bonds) <br />On November 10, 2011, the City issued the Capital Improvement Revenue and Revenue <br />Refunding Bonds, Series 2011, in the amount of $10,000,000. The bonds bear interest at <br />2.38% and mature in November 2026. Interest is payable semiannually on the first day of <br />May and November. The bonds were issued to (1) finance a portion of the costs of <br />development of City parklands, municipal garage and improvements to existing parks, <br />(2) refund $7,575,000 of outstanding 2001A Series Florida Municipal Loan Council <br />Revenue, and (3) pay costs of issuance of the bonds. The City covenants to budget and <br />appropriate non -ad valorem revenues in amounts sufficient to pay the principal of and <br />interest on the bonds, and the bonds are further secured by a pledge of the half -cent sales <br />tax. The Bond Indenture also requires the maintenance of a minimum debt service coverage <br />ratio of 1.50:1.00. <br />The bond contains provisions in the event of default of any payment due to the lender, <br />written admission or inability to pay or filing a petition of bankruptcy, judgment of <br />insolvency, or other similar events by the City, the lender may declare all obligations under <br />this bond immediately due and payable. <br />46 <br />