Reso 2010-1538-1 - Laserfiche WebLink

Home Browse Search

. . ., . . . . . . . . The City Commission of the City of Sunny Isles Beach, Florida SunTrust Bank March 24, 2010 Page 2 4. The issuance and sale of the Bonds has been duly authorized by the City. The Bonds constitute valid and binding limited obligations of the City, payable in accordance with, and as limited by, the terms of the Bond Ordinance and the Loan Agreement, solely from legally available Non-Ad Valorem Revenues (as defined in the Loan Agreement and the Bonds) of the City budgeted and appropriated annually by the City for such purpose. The Bonds do not constitute a debt of the City within the meaning of any constitutional or statutory provision, or a pledge of the faith and credit of the City. The issuance of the Bonds shall not directly or indirectly or contingently obligate the City to levy or to pledge any form of taxation whatsoever therefor nor shall the Bonds constitute a charge, lien or encumbrance, legal or equitable, upon the property of the City, and the owner of the Bonds shall have no recourse to the taxing power of the City. 5. Under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes. Interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations and is not taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations under the Internal Revenue Code of 1986, as amended (the "Code"). Ownership of the Bonds may result in collateral federal tax consequences to certain taxpayers. We express no opinion regarding other federal tax consequences resulting from the ownership, receipt or accrual of interest on, or disposition of, the Bonds. The opinion set forth in the preceding paragraph assumes continuing compliance by the City with certain requirements of the Code that must be met after the date of the issuance of the Bonds in order for interest on the Bonds to be excluded from gross income for federal income tax purposes. The failure to meet these requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. The City has covenanted in the Loan Agreement to take the actions necessary to comply with such requirements. We are further of the opinion that the Bonds are "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Code. Accordingly, a financial institution's interest expense allocable to interest on the Bonds will be reduced by 20% under Section 291(a)(3) of the Code (rather than disallowed under Section 265(b) of the Code). 6. The Bonds are exempt from the excise tax on documents imposed pursuant to Chapter 201, Florida Statutes. 2 {MI88656I_2}