HomeMy WebLinkAboutOrdinance 2012-384
ORDINANCE NO. 2012- 38LJ
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY
OF SUNNY ISLES BEACH, FLORIDA AUTHORIZING THE
ISSUANCE OF NOT EXCEEDING $10,000,000 OF CAPITAL
IMPROVEMENT REVENUE REFUNDING BONDS OF THE CITY
OF SUNNY ISLES BEACH, FLORIDA; APPROVING A LOAN
AGREEMENT IN RESPECT OF SAID BONDS; AUTHORIZING
THE EXECUTION AND DELIVERY OF THE LOAN
AGREEMENT IN SUBSTANTIALLY THE SAME FORM
ATTACHED HERETO AS EXHIBIT "B"; PROVIDING FOR
SEVERABILITY; PROVIDING FOR REPEALER; PROVIDING
FOR AN EFFECTIVE DATE.
WHEREAS, the City Commission (the "Commission") of the City of Sunny Isles Beach,
Florida (the "City") desires to authorize the issuance of not exceeding $ I 0,000,000 in principal
amount of its Capital Improvement Revenue Refunding Bond, Series 2012 (the "Bond"), the
proceeds of which, together with other available funds of the City, shall be applied for the
purposes of: (i) refinancing a loan made by the Florida Municipal Loan Council from proceeds
of its Revenue Bonds, Series 2002-C (the "Prior Loan"), outstanding in the principal amount of
$11,510,000 as of April I, 2012, the proceeds of which were applied to finance the construction
of the Sunny Isle Beach Government Center; and (ii) paying costs of issuance of the Bond and of
refunding the Prior Loan; and
WHEREAS, after seeking, recelVlng and reviewing compel1l1ve proposals for the
purchase of the Bond, and acting under a delegation of authority from the Commission, the
Assistant City Manager - Finance accepted the Commitment dated February 29, 2012 (the
"Commitment") of Branch Banking and Trust Company (the "Bank") to purchase the Bond,
subject to the terms and conditions set forth in the Commitment, a copy of which is attached
hereto as Exhibit A; and
WHEREAS, the Commission desires to approve the form, and authorize the execution
and delivery, of a Loan Agreement (the "Loan Agreement") between the City and the Bank,
which specifies, among other things and subject to certain limitations, that repayment of the
Bond shall be supported by a covenant by the City to budget and appropriate non-ad valorem
revenues in amounts sufficient to pay the principal of and interest on the Bond as the same shall
become due and payable;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF SUNNY ISLES BEACH, FLORIDA, AS FOLLOWS:
Section I: Incorporation of Recitals. Thc foregoing recitals are hereby ratified and
confirmed as being true and correct and are hereby made a specific part of this Ordinance upon
adoption hereof.
Section 2:
Designations. Findings and Determinations.
(A) Capitalized terms used, but not defined in this Ordinance, are used with the meanings
ascribed to them in the foregoing recitals.
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(B) This Ordinance is enacted pursuant to the provisions of thc Charter of the City of
Sunny Isles Beach, Florida, as amcnded and supplemented, the Florida Constitution, Chapter
166, Florida Statutes, as amended and supplemented, and other applicable provisions oflaw.
(C) The rcfunding and redemption of the Prior Loan are in the best interest of the City
and will serve a valid municipal purpose.
(D) The Commission hereby designates the Bond as a "qualified tax-exempt obligation"
within the meaning of Section 265(b) of the Internal Revenue Code of 1986, as amended.
(E) The Commission hereby finds and determines that, in light of present market
conditions, the aforementioned Commitment of the Bank, the nature of the Bond, and the nature
of the security afforded to the owner of the Bond, it is in the best interest of the City to sell the
Bond to the Bank on a negotiated basis pursuant to the terms and provisions of this Resolution,
the Commitment and the Loan Agreement.
Section 3:
Capital Improvement Revenue Refunding Bond.
(A) In accordance with the provisions of the Charter of the City of Sunny Isles Beach,
Florida and Chapter 166, Florida Statutes, the Commission authorizes the issuance of the Bond
in an aggregate principal amount not to exceed $10,000,000, for the purposes of: (i) refinancing
the Prior Loan; and (ii) paying costs of issuance of the Bond and ofrefunding the Prior Loan.
(B) The Bond shall be designated "City of Sunny Isles Beach, Florida Capital
Improvement Revenue Refunding Bond, Series 2012", shall be dated such date, shall be stated to
mature not later than November I, 2022, shall bear interest from their dated date at a rate of
interest per annum of 2.00%, subject to adjustment as set forth in the form of Bond attached as
Exhibit A to the Loan Agreement (so long as on the date of issuance and delivery of the Bond
such rate does not exceed the maximum rate then permitted by law), shall be subject to
redemption at the option of the City at such times and prices, and shall have such other details,
all as set forth or established pursuant to the Commitment and the Loan Agreement.
(C) The Bond shall not be or constitute an indebtedness of the City within the
meaning of any constitutional, statutory or other limitation of indebtedness, but shall be secured
solely by and payable from the limited sources specified in the Loan Agreement. No owner of
the Bond shall ever have the right to compel the exercise of the ad valorem taxing power of the
City, or taxation in any form of any real property therein, to pay the principal of or the interest on
the bond.
Section 4: Approval of Loan Agrccmcnt and Authorizations. The Loan
Agreement, in substantially the form attached hereto as Exhibit B, is hereby approved. The
Mayor, the Vice Mayor, the City Manager, the Assistant City Manager - Finance, the City
Attorney, the City Clerk and any other proper official or officer of the City, are each hereby
authorized and directed to execute and deliver any and all documents and instruments, including
without limitation the Loan Agreement and the Bond, and to do and cause to be done any and all
acts and things necessary or" proper for carrying out the transactions contemplated by this
Ordinance, the Commitment, the Loan Agreement and for refunding the Prior Loan.
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Section 5: Severability. The provIsIOns of this Ordinance are declared to be
severable and if any section, sentence, clause or phrase of this Ordinance shall for any reason be
held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining
sections, sentences, clause, and phrases of this Ordinance but they shall remain in effect, it being
the legislative intent that this Ordinance shall stand notwithstanding the invalidity of any part.
Section 6: Repealer. All ordinances or part of ordinances in conflict herewith be and
the same are hereby repealed.
Section 7: Effective Date. This Ordinance will become effective immediately upon
its enactment after second reading.
PASSED AND ADOPTED on first reading this I~ day of March, 2012.
PASSED AND ADOPTED on second reading this 1'# day of April, 2012.
ATTEST: '
~~~~
Jane A. Hines, CMC, City Clerk
Moved by: ('bYYlm~, ~ I 0 Ai ~ -A:zD M)
Second by: C(l,I'n"",~~\ ''''')~ C;;:c...\-IoLL-
VOTE AS FOLLOWS: S-()
Mayor Edelcup
Vice Mayor Thaler
Commissioner Aelion
Commissioner Gatto
Commissioner Scholl
(if yes
(w-yes
(0'yes
(0Yes
(kfYes
Uno
Uno
Uno
Uno
Uno
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EXHIBIT B
FORM OF LOAN AGREEMENT
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LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made and entered into as of April, _,
2012, and is by and between the City of Sunny Isles Beach (the "City") and Branch Banking and
Trust Company, a North Carolina banking corporation, and its successors and assigns as holder
of the hereinafter defined Bond (the "Bank");
WHEREAS, the City Commission of the City enacted on April_, 2012, an Ordinance
(the "Ordinance") authorizing the issuance of its Capital Improvement Revenue Refunding
Bond, Series 2012, in a principal amount not to exceed $10,000,000, and directed that the
proceeds thereof, together with other available funds of the City, be applied for the purposes of:
(i) refinancing a loan made by the Florida Municipal Loan Council from proceeds of its Revenue
Bonds, Series 2002-C (the "Prior Loan"), outstanding in the principal amount of $11 ,51 0,000 as
of April I, 2012, the proceeds of which were applied to finance the construction of the Sunny
Isle Beach Govermnent Center; and (ii) paying costs of issuance of the Bond and of refunding
the Prior Loan; and
WHEREAS, the Ordinance further authorized entry by the City into this Loan
Agreement; and
WHEREAS, the City hereby determines that it is desirable and in the best interest of the
City to enter into this Agreement whereby the City will borrow funds from the Bank to be used
to refund and prepay the Prior Loan and to pay costs of issuance of the Bond and of refunding
the Prior Loan; and
WHEREAS, the obligation of the City to repay such borrowing shall be evidenced by
the Bond, which shall be in the principal amount of $1 0,000,000; and
WHEREAS, the Bond shall be issued pursuant to the terms and provisions of the
Ordinance and this Agreement;
NOW THEREFORE, in consideration of the sum of $10.00, the mutual promises and
covenants contained in this Agreement, and for other good and valuable consideration, the
receipt and legal sufficiency of which is acknowledged by both pm1ies, and intending to be
legally bound hereby, the City and the Bank agree as follows.
ARTICLE I
DEFINITION OF TERMS
Section 1.1. Definitions. The words and terms used in this Agreement shall have the
meanings as set forth in the Ordinance and in the recitals above, unless otherwise defined herein.
Unless the context shall otherwise require, the following words and terms as used in this
Agreement shall have the following meanings:
"Act" means Part II of Chapter 166, Florida Statutes, as amended, the Charter of the City,
and other applicable provisions oflaw.
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"Agreement" means this Loan Agreement and any and all modifications, alterations,
amendments and supplements hereto made in accordance with the provisions hereof.
"Bond Counsel" means Greenberg Traurig, P.A. or other counsel experienced in matters
relating to the validity of, and the exclusion from gross income for federal income tax purposes
of interest on, obligations of states and their political subdivisions.
"Bond Payment Date" means each May I and November I of each year, commencing
November 1,2012.
"Bond" means the City of Sunny Isles Beach, Florida Capital Improvement Revenue
Refunding Bond, Series 2012, issued pursuant to this Agreement.
"Business Day" means any day which is not a Saturday, Sunday or legal holiday in
Miami, Florida.
"City Manager" means the City Manager of the City.
"Clerk" means the Clerk or any Deputy Clerk of the City.
"Code" means the Internal Revenue Code of 1986, as amended, including the applicable
regulations of the Department of the Treasury (including applicable final regulations, temporary
regulations and proposed regulations), the applicable rulings of the Internal Revenue Service
(including published Revenue Rulings and private letter rulings) and applicable court decisions.
"Dated Date" means the date of issuance of the Bond.
"Defeasance Obligations" shall mean, to the extent permitted by law, the following
securities:
(I) U.S. Obligations;
(2) Any bonds or other obligations of any state of the United States of
America or of any agency, instrumentality or local governmental unit of any such state (i)
which are not callable prior to maturity or as to which irrevocable instructions have been
given to the trustee of such bonds or other obligations by the obligor to give due notice of
redemption and to call such bonds for redemption on the date or dates specified in such
instructions, (ii) which are secured as to principal and interest and redemption premium,
if any, by a fund consisting only of cash or bonds or other obligations of the character
described in clause (I) hereof, which fund may be applied only to the payment of such
principal of and interest and redemption premium, if any, on such bonds or other
obligations on the maturity date or dates thereof or the redemption date or dates specified
in the irrevocable instructions referred to in subclause (i) of this clause (2), as
appropriate, and (iii) as to which the principal of and interest on the bonds and
obligations of the character described in clause (I) hereof which have been deposited in
such fund along with any cash on deposit in such fund are sufficient to pay principal of
and interest and redemption premium, if any, on the bonds or other obligations described
in this clause (2) to and including the maturity date or dates thereof or to and including
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the redemption date or dates specified in the irrevocable instructions referred to m
subclause (i) of this clause (2), as appropriate; and
(3) Evidences of ownership of proportionate interests in future interest and
principal payments on obligations described in clause (1) above held by a bank or trust
company as custodian.
"Event of Default" shall mean an event of default specified III Article VIII of this
Agreement.
"Fiscal Year" means the period commencing on October 1 of each year and ending on the
succeeding September 30, or such other consecutive 12-month period as may be hereafter
designated as the fiscal year of the City pursuant to general law.
"Governing Body" means the City Commission of the City, or its successor in function.
"Holder" means the registered owner (or its authorized representative) of the Bond from
time to time, initially the Bank.
"Loan Documents" means this Agreement, the Bond, the Ordinance and all other
documents, agreements, certificates, schedules, notes, statements, and opinions, however
described, referenced herein or executed or delivered pursuant hereto or in connection with or
arising with the Loan or the transaction contemplated by this Agreement.
"Mayor" means the Mayor of the City and such other person as may be authorized to act
on his or her behalf.
"Non-Ad Valorem Revenues" means all revenues of the City derived from any source
other than ad valorem taxation on real or personal property and which are legally available to
make the payments required under this Agreement; but only after the payment of services and
programs which are for essential public purposes affecting the health, welfare and safety of the
inhabitants of the City or which are legally mandated by applicable law.
"Person" mean natural persons, firms, trusts, estates, associations, corporations,
partnerships and public bodies.
"State" means the State of Florida.
Section 1.2. 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 purposes set forth herein and to sustain the
validity hereof.
Section 1.3. Titles and Headings. The titles and headings of the articles and sections
of this Agreement 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
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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 OF CITY THE CITY
The City represents and warrants to the Bank that:
Section 2.1. Powers of City. The City is duly organized and validly existing as a
municipal corporation under the laws of the State. The City has the power to borrow the amount
provided for in this Agreement, to execute and deliver the Loan Documents, to secure the Bond
in the manner contemplated hereby, and to perform and observe all the terms and conditions of
the Bond and this Agreement on its part to be performed and observed. The City may lawfully
issue the Bond in order to obtain funds to refinance the Prior Loan.
Section 2.2. Authorization of Loan. The City has, had or will have, as the case may
be, full legal right, power, and authority to adopt the Ordinance and to execute and deliver this
Agreement, to issue, sell, and deliver the Bond to the Bank, and to carry out and consummate all
other transactions contemplated hereby and by the Loan Documents, and the City has complied
and will comply with all provisions of applicable law in all material matters relating to such
transactions. The City, by the Ordinance, has duly authorized the borrowing of the amount
provided for in this Agreement, the execution and delivery of this Agreement, and the making
and delivery of the Bond to the Bank, and to that end the City warrants that it will take all action
and will do all things which it is authorized by law to take and to do in order to fulfill all
covenants on its part to be performed and to provide for and to assure payment of the Bond. The
City has duly adopted the Ordinance and authorized the execution, delivery, and performance of
the Bond and the Agreement and the taking of any and all other such action as may be required
on the part of the City to carry out, give effect to and consummate the transactions contemplated
by the Loan Documents. The Bond has been duly authorized, executed, issued and delivered to
the Bank and constitutes a legal, valid and binding obligation of the City enforceable in
accordance with its terms and the terms of the Ordinance, and is entitled to the benefits and
security of the Ordinance and this Agreement. All approvals, consents, and orders of and filings
with any governmental authority or agency which would constitute a condition precedent to the
issuance of the Bond or the execution and delivery of or the performance by the City of its
obligations under the Loan Documents have been obtained or made and any consents, approvals,
and orders to be received or filings so made are in full force and effect.
Section 2.3. Agreements. The City is not in default in any material respect under any
agreement or other instrument to which it is a party or by which it may be bound. The making
and performing by the City of this Agreement will not violate any provision of the Act, any
ordinance or resolution of the City, or any regulation, order or decree of any court, and will not
result in a breach of any of the terms of any agreement or instrument to which the City is a party
or by which the City is bound. The Loan Documents constitute legal, valid and binding
obligations of the City enforceable in accordance with their respective terms.
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Section 2.4. Litigation, Etc. There are no actions or proceedings pending against the
City or affecting the City or, to the knowledge of the City, threatened, which, either in any case
or in the aggregate, might result in any material adverse change in the financial condition of the
City, or which question the validity of this Agreement, the Bond or any of the other Loan
Documents or of any action taken or to be taken in connection with the transactions
contemplated hereby or thereby.
Section 2.5. Financial Information. The financial information regarding the City
furnished to the Bank by the City in connection with the Loan is complete and accurate, and
there has been no material and adverse change in the financial condition of the City from that
presented in such information.
ARTICLE III
COVENANTS OF THE CITY
Section 3.1. Affirmative Covenants. The City covenants, for so long as any of the
principal amount of or interest on the Bond is outstanding and unpaid or any duty or obligation
of the City hereunder or under any of the other Loan Documents remains unpaid or unperformed,
as follows:
(a) Use of Proceeds. The City covenants that the proceeds from the Bond,
together with other available funds of the City will be used only for the purposes of: (i) refunding
and prepaying the Prior Loan; and (ii) paying costs of issuance of the Bond and ofrefunding the
Prior Loan. The City further covenants that, immediately upon receipt of the proceeds of the
Bond, it shall apply proceeds of the Bond, together with other available funds of the City to
tenninate the lien of the Prior Loan, and shall obtain a certificate dated the date of original
issuance and delivery of the Bond executed on behalf of the Florida Municipal Loan Council and
its appointed escrow agent acknowledging the termination of the lien of the Prior Loan.
(b) Notice of Defaults. The City shall within fifteen (15) days after it acquires
knowledge thereof, notify the Bank in writing upon the happening, occurrence, or existence of
any Event of Default, and any event or condition which with the passage of time or giving of
notice, or both, would constitute an Event of Default, and shall provide the Bank with such
written notice, a detailed statement by a responsible officer of the City of all relevant facts and
the action being taken or proposed to be taken by the City with respect thereto.
(c) Records. The City agrees that any and all records of the City shall be open
to inspection by the Bank or its representatives at all reasonable times at the offices of the City.
(d) Maintain Existence. The City shall do all things lawfully within its power
to maintain its existence as a municipal corporation of the State, and shall not voluntarily
dissolve.
(e) Notice of Liabilities. The City shall promptly inform the Bank of any
actual or potential contingent liabilities or pending or threatened litigation of any amount that
could reasonably be expected to have a material and adverse effect upon the financial condition
of the City.
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(I) Insurance. The City shall maintain such liability, casualty and other
insurance as is reasonable and prudent for similarly situated municipal corporations of the State
and shall upon the request of the Bank, provide evidence of such coverage to the Bank.
(g) Complv with Laws. The City is in compliance with and shall comply
with all applicable federal, state and local laws and regulatory requirements.
(h) Taxes. In the event the Bond, this Agreement or any other Loan
Document should be subject to the excise tax on documents or the intangible personal property
tax, or any similar tax, of the State of Florida, the City shall pay such taxes or reimburse the
Bank for any such taxes paid by it.
(i) Investments. The City shall invest only in obligations permitted by
Section 218.415(16), Florida Statutes, as amended, or any successor provision.
Section 3.2. Bank Fees and Expenses. The City hereby agrees to pay a Bank loan fee
and the fees of counsel to the Bank in connection with the issuance of the Bond in the total
amount of$4,000, said amount to be due and payable upon the issuance of the Bond.
Section 3.3. Registration and Exchange of Bond; Persons Treated as Owners. So
long as the Bond shall remain unpaid, the City will keep books for the registration and transfer of
the Bond. The Bond shall be transferable only upon such registration books. The City will
transfer the registration of Bond upon written request of the Bank specifying the name, address
and taxpayer identification number of the transferee.
The Person in whose name the Bond shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of principal and interest on the Bond
shall be made only to or upon the written order of such Person. All such payments shall be valid
and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums
so paid.
Section 3.4. Payment of Principal and Interest. The City promises that it will
promptly pay the principal of and interest on the Bond at the place, on the dates and in the
manner provided therein according to the true intent and meaning hereof and thereof, provided
that the principal of and interest on the Bond is secured solely as provided in Section 3.5 hereof,
and nothing in the Bond or in the Ordinance shall be construed as pledging any funds or assets of
the City to such payment or authorizing such payment to be made from any other source. The
Bond shall not be or constitute a general obligation or indebtedness of the City within the
meaning of the Constitution of Florida, but shall be payable solely from and secured in the
manner and to the extent provided in Section 3.5. No Holder shall ever have the right to compel
the exercise of the ad valorem taxing power of the City or taxation in any form on any real or
personal property to pay such Bond or the interest thereon, nor shall any Holder be entitled to
payment of such principal and interest from any other funds of the City other than the Non-Ad
Valorem Revenues, all in the manner and to the extent herein provided.
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Section 3.5. Covenant to Budget and Appropriate; Limited Obligations.
(a) The City hereby covenants and agrees to the extent permitted by and in accordance
with applicable law and budgetary processes, to prepare, approve and appropriate in its annual
budget for each Fiscal Year, by amendment if necessary, Non-Ad Valorem Revenues in an
amount which, together with any other legally available revenues budgeted and appropriated for
such purpose, are equal to the principal and interest requirements with respect to the Bond for the
applicable Fiscal Year, plus an amount sufficient to satisfy all other payment obligations of the
City under this Agreement and the Ordinance in respect of the Bond for the applicable Fiscal
Year. Non-Ad Valorem Revenues budgeted and appropriated as required under this Section 3.5
shall be deposited into the Bond Fund and applied as required pursuant to Section 6. I of this
Ordinance.
(b) The obligation of the City pursuant to this Section 3.5 includes an obligation to make
amendments to the budget of the City to assure compliance with the terms and provisions hereof.
The covenant and agreement on the part of the City to budget and appropriate sufficient amounts
of Non-Ad Valorem Revenues shall be cumulative, and shall continue until such Non-Ad
Valorem Revenues in amounts, together with any other legally available revenues budgeted and
appropriated for such purposes, sufficient to make all required payments hereunder as and when
due, including any delinquent payments, shall have been budgeted, appropriated and actually
paid in satisfaction of the obligations of the City under this Agreement and the Ordinance.
(c) Nothing contained herein shall preclude the City from pledging any of its Non-Ad
Valorem Revenues or other revenues to other obligations (provided, however, the City shall not
make any such pledge if as a result the City shall not have sufficient Non-ad Valorem Revenues
to pay all of its payment obligations under this Ordinance), nor shall it give the holder of the
Bond a prior claim on the Non-Ad Valorem Revenues until they are actually paid in satisfaction
of the obligations of the City under this Ordinance. The City may not expend moneys not
appropriated or in excess of its current budgeted revenues. The obligation of the City to budget,
appropriate and make payments hereunder from Non-Ad Valorem Revenues is subject to the
availability of Non-Ad Valorem Revenues after satisfying funding requirements for obligations
having an express lien on or pledge of such revenues and after satisfying funding requirements
for essential governmental services of the City.
(d) The Bond shall not constitute a general obligation or general indebtedness of the City
within the meaning of the Constitution and laws of the State of Florida. The Bond does not
constitute either a pledge of the full faith and credit of the City or a lien upon any property of the
City, except as expressly provided herein. Neither the Bank nor any other Person shall ever have
the right to compel the exercise of any taxing power of the City or any other public authority or
governmental body to pay the principal of, or the interest on, the Bond or to pay any other
amounts required to be paid pursuant to this Ordinance or the Bond or to maintain or continue
any of the activities of the City that generate user service charges, regulatory fees or any other
Non-Ad Valorem Revenues.
Section 3.6. Prellavment. The City shall be entitled to prepay the Bond prior to
maturity in whole on any Bond Payment Date on or after November 1,2012, at a redemption
price equal to the principal amount to be redeemed, plus a premium equal to I % thereof, plus
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accrued interest to the date of prepayment, upon written notice to the Holder given by the City
not less than two (2) Business Days prior to the date fixed for prepayment.
Section 3.7. Business Days. In any case where the due date of interest on or principal
of the Bond is not a Business Day, then payment of such principal or interest need not be made
on such date but may be made on the next succeeding Business Day, provided that credit for
payments made shall not be given until the payment is actually received by the Bank.
Section 3.8. Officers and Employees of the City Exempt from Personal Liabilitv.
No recourse under or upon any obligation, covenant or agreement of this Agreement or the Bond
or for any claim based thereon or otherwise in respect thereof, shall be had against any
Commissioner of the City, or any officer, agent or employee, as such, of the City past, present or
future, it being expressly understood (a) that the obligation of the City under this Agreement and
the Bond is solely a corporate one, (b) that no personal liability whatsoever shall attach to, or is
or shall be incurred by, the City Commission, or the officers, agents, or employees, as such, of
the City, or any of them, under or by reason of the obligations, covenants or agreements
contained in this Loan Agreement or implied therefrom, and (c) that any and all such personal
liability of, and any and all such rights and claims against, every such Commissioner of the City,
and every officer, agent, or employee, as such, of the City under or by reason of the obligations,
covenants or agreements contained in this Loan Agreement, or implied therefrom, are waived
and released as a condition of, and as a consideration for, the execution of this Loan Agreemcnt
and the issuance of the Bond on the part of the City.
Section 3.9. Bond Mutilated, Destroyed, Stolen or Lost. In case any Bond shall
become mutilated, or be destroyed, stolen or lost, the City shall issue and deliver a new Bond of
like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and in substitution for
such mutilated Bond, or in lieu of and in substitution for the Bond destroyed, stolen or lost and
upon the Holder furnishing the City proof of ownership thereof and indemnity reasonably
satisfactory to the City and complying with such other reasonable regulations and conditions as
the City may prescribe and paying such expenses as the City may incur. The Bond so
surrendered shall be canceled.
Section 3.10. Section 265 Designation of Bond. The reasonably anticipated amount of
tax-exempt obligations (other than obligations described in clause (ii) of Section 265(b)(3)(C) of
the Code) which have been or will be issued by the City during calendar year 2012 does not
exceed $ 10,000,000. There are no entities which are subordinate to or which issue obligations on
behalf of the City. The City hereby designates the Bond as "qualified tax-exempt obligations" for
purposes of Section 265(b)(3)(B)(i) of the Code. The City hereby covenants and agrees not to
take any action or to fail to take any action if such action or failure would cause the Bond to no
longer be "qualified tax-exempt obligations."
Section 3.11. Tax Representations, Warranties and Covenants of the City.
Notwithstanding anything herein to the contrary, the City hereby covenants and represents that it
has taken and caused to be taken and shall make and take and cause to be made and taken all
actions that may be required of it for the interest on the Bond to be and remain excluded from the
gross income of the Holder for federal income tax purposes, and that to the best of its knowledge
it has not taken or permitted to be taken on its behalf, and covenants that to the best of its ability
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and within its control, it shall not make or take, or permit to be made or taken on its behalf, any
action which, if made or taken, would adversely affect such exclusion under the provisions of the
Code.
The City acknowledges that the continued exclusion of interest on the Bond from gross
income for federal income tax purposes depends, in part, upon compliance with the arbitrage
limitations imposed by Sections I 03(b )(2) and 148 of the Code. The City hereby acknowledges
responsibility to take all reasonable actions necessary to comply with these requirements. The
City hereby agrees and covenants that it shall not permit at any time or times any of the proceeds
of the Bond or other funds of the City to be intentionally used, directly or indirectly, to acquire or
to replace funds which were used directly or indirectly to acquire any higher yielding
investments (as defined in Section 148 of the Code), the acquisition of which would cause the
Bond to be an arbitrage bond for purposes of Sections I 03(b )(2) and 148 of the Code. The City
further agrees and covenants that it shall do and perform all acts and things necessary in order to
assure that the requirements of Sections 1 03(b )(2) and 148 of the Code are met.
Specifically, without intending to limit in any way the generality of the foregoing, the
City covenants and agrees:
(a) to pay to the United States of America at the times required pursuant to
Section 148(1) of the Code, the excess of the amount earned on all non-purpose investments (as
defined in Section 148(1)(6) of the Code) (other than investments attributed to an excess
described in this sentence) over the amount which would have been earned if such non-purpose
investments were invested at a rate equal to the yield on the Bond, plus any income attributable
to such excess (the "Rebate Amount");
(b) to maintain and retain all records pertaining to and to be responsible for
making or causing to be made all determinations and calculations of the Rebate Amount and
required payments of the Rebate Amount as shall be necessary to comply with the Code; and
(c) to comply with all representations and restrictions contained in any Tax
Certificate executed by the City in connection with the Bond.
The City understands that the foregoing covenants impose continuing obligations on it to
comply with the requirements of Section 103 and Part IV of Subchapter B of Chapter I of the
Code so long as such requirements are applicable.
Section 3.12. Additional Tax Covenants of the City. For so long as the Bond remains
outstanding, the City hereby covenants as follows:
(a) It will comply with, and timely make or cause to be made all filings
required by, all effective rules, rulings or regulations promulgated by the Department of the
Treasury or the Internal Revenue Service;
(b) It will not use, invest, direct or permit the investment of the proceeds of
the Bond or any investment earnings thereon in a manner that will result in such Bond becoming
a "private activity bond" within the meaning of Sections ]41 and 145 of the Code;
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MIA 182,397, 885vl 3-5-12
(c) It will not use or permit to be used more than ten percent (10%) of the
proceeds of the Bond (including any amounts used to pay costs associated with issuing such
Bond), including all investment income earned on such proceeds directly or indirectly, in any
trade or business carried on by any person who is not the City or a state or political subdivision
or instrumentality thereof as those terms are used in Section 103 of the Code (an "Exempt
Person");
(d) It will not use or permit the use of any portion of the proceeds of the
Bond, including all investment income earned on such proceeds, directly or indirectly, to make
or finance loans to persons who are not Exempt Persons;
(e) It has not entered into, and will not enter into, any arrangement with any
person or organization (other than an Exempt Person) which provides for such person or
organization to manage, operate, or provide services with respect to more than 10% of the
project financed with the proceeds of the Bond (a "Service Contract"), unless the guidelines set
forth in Revenue Procedure 97-13 (or the guidelines set forth in Revenue Procedure 93-19, to the
extent applicable, or any new, revised or additional guidelines applicable to Service Contracts)
(the "Guidelines"), are satisfied, except to the extent it obtains a private letter ruling from the
Internal Revenue Service or an opinion of nationally recognized Bond Counsel which allows for
a variation from the Guidelines;
(I) It will not cause the Bond to be treated as "federally guaranteed" for
purposes of Section 149 of the Code, as may be modified in any applicable rules, rulings,
policies, procedures, regulations or other official statements promulgated or proposed by the
Department of the Treasury or the Internal Revenue Service with respect to "federally
guaranteed" obligations described in Section 149 of the Code. For purposes of this paragraph, the
Bond shall be treated as "federally guaranteed" if (i) all or any portion of the principal or interest
is or will be guaranteed directly or indirectly by the United States of America or any agency or
instrumentality thereof, or (ii) 5% or more of the proceeds of the Bond will be (A) used in
making loans the payment of principal or interest with respect to which is to be guaranteed in
whole or in part by the United States of America or any agency or instrumentality thereof, or (B)
invested directly or indirectly in federally insured deposits or accounts, and (iii) such guarantee
is not described in Section 149(b)(3) of the Code; and
(g) It will comply with the information reporting requirements of Section
149( e )(2) of the Code.
The terms "debt service," "gross proceeds," "net proceeds," "proceeds," and "yield" have
the meanings assigned to them for purposes of Section 148 of the Code.
ARTICLE IV
CONDITIONS OF LENDING
Section 4.1. Conditions of Lending. The obligations of the Bank to lend hereunder are
subject to the following conditions precedent:
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MfA 182,397,885vl 3-5-12
(a) No Default. On the date hereof the City shall be in compliance with all the
terms and provisions set forth in the Loan Documents on its part to be observed or performed,
and no Event of Default nor any event that, upon notice or lapse of time or both, would constitute
such an Event of Default, shall have occurred and be continuing at such time.
(b) Supporting Documents. On or prior to the date hereof, the Bank shall
have received the following supporting documents, all of which shall be satisfactory in form and
substance to the Bank (such satisfaction to be evidenced by the purchase of the Bond by the
Bank):
(i) The opinion of the City Attorney or special counsel to the City
regarding the due authorization, execution, delivery, validity and enforceability of this
Agreement and the Bond, the City's power to incur the debt evidenced by the Bond and the due
adoption of the Ordinance;
(ii) The opinion of Bond Counsel to the effect that, (A) the interest on
the Bond is excluded from gross income for federal income tax purposes, (B) the interest on the
Bond is not an item of tax preference under Section 57 of the Code, (C) the Bond is a qualified
tax-exempt obligation under Section 265(b)(3) of the Code and (D) the Bond and the income
thereon is exempt from the State excise tax on documents; and
(iii) Such additional supporting documents as the Bank or its counsel
may reasonably request.
ARTICLE V
THE LOAN; CITY'S OBLIGATION; DESCRIPTION AND PAYMENT TERMS
Section 5.1. The Loan. The Bank hereby agrees to loan to the City the amount of
$10,000,000 to be evidenced by the Bond, to provide funds to refinance the Prior Loan and to
pay closing costs and costs of refunding the Prior Loan, upon the terms and conditions set forth
in the Ordinance and in this Agreement. The City agrees to repay the principal amount borrowed
plus interest thereon, upon the terms and conditions set forth in the Loan Documents.
Section 5.2. Description and Pavment Terms of the Bond. To evidence the Loan, the
City shall issue and deliver to the Bank the Bond, substantially in the form attached hereto as
Exhibit "A".
ARTICLE VI
CREATION AND USE OF FUNDS AND ACCOUNTS
Section 6.1. Bond Fund. There is hereby created a fund, entitled "City of Sunny Isles
Beach, Florida, Capital Improvement Revenue Refunding Bond, Series 2012 Bond Fund" (the
"Bond Fund"). There shall be deposited into the Bond Fund on each Bond Payment Date
sufficient amounts of Non-Ad Valorem Revenues as specified in Section 3.5(a) hereof, which,
together with the amounts already on deposit therein, will enable the City to pay the principal of
and interest on the Bond on each Bond Payment Date. Moneys in the Bond Fund shall be applied
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MIA 182,397.885vl 3-5-12
on each Bond Payment Date to the payment of principal of and interest on the Bond coming due
on each such date.
Section 6.2. Funds. Each of the funds and accounts herein established and created
shall constitute trust funds for the purposes provided herein for such funds and accounts
respectively. The money in such funds and accounts shall be continuously secured in the same
manner as deposits of City funds are authorized to be secured by the laws of the State of Florida.
The designation and establishment of the funds and accounts in and by this Agreement
shall not be construed to require the establishment of any completely independent, self-balancing
funds, as such term is commonly defined and used in governmental accounting, but rather is
intended solely to constitute an earmarking of certain revenues and assets of the City for the
purposes herein provided and to establish certain priorities for application of such revenues and
assets.
Section 6.3. Rebate Fund and Rebate Covenants. There is hereby created and
established a fund to be held by the City, designated the "City of Sunny Isles Beach Capital
Improvement Revenue Refunding Bond, Series 2012 Rebate Fund" (the "Rebate Fund"). The
Rebate Fund shall be held by the City separate and apart from all other funds and accounts held
by the City under this Agreement and from all other moneys of the City.
Notwithstanding anything in this Agreement to the contrary, the City shall transfer to the
Rebate Fund the amounts required to be transferred in order to comply with the Tax Certificate
or the Rebate Covenants, if any, attached as an Exhibit to the Tax Certificate to be delivered by
the City on the date of delivery of the Bond (the "Rebate Covenants"), when such amounts are so
required to be transferred. The City Manager shall make or cause to be made payments from the
Rebate Fund of amounts required to be deposited therein to the United States of America in the
amounts and at the times required by the Rebate Covenants. The City covenants for the benefit
of the Holders that it will comply with the Rebate Covenants. The Rebate Fund, together with all
moneys and securities from time to time held therein and all investment earnings derived
therefrom, shall be excluded from the pledge and lien of this Agreement. The City shall not be
required to comply with the requirements of this Section 6.3 in the event that the City obtains
and opinion of Bond Counsel that (i) such compliance is not required in order to maintain the
federal income tax exemption of interest on the Bond and/or (ii) compliance with some other
requirement is necessary to maintain the federal income tax exemption of interest on the Bond.
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. Financial Statements. The City shall provide the holder of the Bond with
a copy of its audited general purpose financial statements within 150 days of the close of each
fiscal year during which the Bond shall remain outstanding. The City Manager or the Finance
Director shall also certify to the holder of the Bond at that time that the City is not then in default
of its obligations under this Ordinance or its obligations under any ordinance authorizing Parity
Obligations, or, if the City shall then be in default, shall explain in writing the nature of such
default, the steps being taken by the City to cure such default and the estimated time by which
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MfA 182.397.885vl 3-5-12
such default will be cured. The City shall demonstrate in each annual budget that there are
sufficient proceeds of the Stormwater Utility Fee to pay the principal of and interest on the Bond
and any Parity Obligations coming due in the fiscal year covered by such annual budget. The
City shall provide the holder of the Bond with a copy of its approved annual budget within 30
days after the final adoption thereof and with such other financial information regarding the City
as the holder of the Bond may reasonably request.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1. General. An "Event of Default" shall be deemed to have occurred under
this Agreement if:
(a) The City shall fail to make any payment of the principal of or interest on
the Bond after the same shall become due and payable, whether by maturity, by acceleration at
the discretion of the Bank as provided for in Section 8.2, or otherwise; or
(b) The City shall default in the performance of or compliance with any term
or covenant contained in the Loan Documents, other than a term or covenant a default in the
performance of which or noncompliance with which is dealt with in Section 8.I(a) or (c) through
(h) hereof, which default or non-compliance shall continue and not be cured within thirty (30)
days after (i) notice thereof to the City by the Bank; or (ii) the Bank is notified of such
noncompliance or should have been so notified pursuant to the provisions of Section 3 .1 (b) of
this Agreement, whichever is earlier; or
(c) Any representation or warranty made in writing by or on behalf of the City
in any Loan Document shall prove to have been false or incorrect in any material respect on the
date made or reaffirmed; or
(d) The City admits in writing its inability to pay its debts generally as they
become due or files a petition in bankruptcy or makes an assignment for the benefit of its
creditors or consents to the appointment of a receiver or trustee for itself; or
(e) The City is adjudged insolvent by a com1 of competent jurisdiction, or it is
adjudged a bankrupt on a petition in bankruptcy filed by or against the City, or an order,
judgment or decree is entered by any court of competent jurisdiction appointing, without the
consent of the City, a receiver or trustee of the City or of the whole or any part of its property,
and if the aforesaid adjudications, orders, judgments or decrees shall not be vacated or set aside
or stayed within ninety (90) days from the date of entry thereof; or
(I) The City shall file a petition or answer seeking reorganization or any
arrangement under the federal bankruptcy laws or any other applicable law or statute of the
United States of America or the State of Florida; or
(g) The City shall default in the due and punctual payment or performance of
covenants under any obligation for the payment of money to the Bank or any other subsidiary or
affiliate of the Bank; or
MfA 182,397,885vI3-5-12
13
(h) A judgment or order shall be rendered against the City for the payment of
money in excess of $250,000 which is not covered by insurance and such judgment or order shall
continue unsatisfied or unstayed for a period of more than 30 days;
Section 8.2. Effect of Event of Default. During the continuance of an Event of
Default, the Bank may seek enforcement of and exercise all remedies available to it under the
Ordinance, the Act and any other applicable law. In furtherance and not in limitation of the
foregoing, the Bank may, in addition to any other remedies set forth in this Agreement or the
Bond, either at law or in equity, by suit, action, mandamus or other proceeding in any court of
competent jurisdiction, protect and enforce any and all rights under the laws of the State of
Florida, or granted or contained in this Agreement, and may enforce and compel the performance
of all duties required by this Agreement or by any applicable statutes to be performed by the City
or by any officer thereof.
ARTICLE IX
MISCELLANEOUS
Section 9.1. No Waiver; Cumulative Remedies. No failure or delay on the part of the
Bank in exerclsmg any right, power, remedy hereunder, or under the Bond or other Loan
Documents shall operate as a waiver of the Bank's rights, powers and remedies hereunder, nor
shall any single or partial exercise of any such right, power or remedy preclude any other or
fUl1her exercise thereof, or the exercise of any other right, power or remedy hereunder or
thereunder. The remedies herein and therein provided are cumulative and not exclusive of any
remedies provided by law or in equity.
Section 9.2. Amendments, Changes or Modifications to the Agreement. This
Agreement shall not be amended, changed or modified except by written instrument between the
Bank and the City. The City agrees to pay all of the Bank's reasonable costs and reasonable
attorneys' fees incurred in modifying and/or amending this Agreement at the City's request or
behest.
Section 9.3. 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 9.4. Severabilitv. If any clause, provision or section of this Agreement shall be
held illegal or invalid by any court, the invalidity of such clause, provision or section shall not
affect any other provisions or sections hereof, and this Agreement shall be construed and
enforced to the end that the transactions contemplated hereby be effected and the obligations
contemplated hereby be enforced, as if such illegal or invalid clause, provision or section had not
been contained herein.
Section 9.5. Term of Agreement. Except as otherwise specified in this Agreement,
this Agreement and all representations, warranties, covenants and agreements contained herein
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MIA 182,397.885vl 3-5-12
or made in writing by the City in connection herewith shall be in full force and effect from the
date hereof and shall continue in effect until as long as the Bond are outstanding.
Section 9.6. Notiees. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when received if personally delivered; when transmitted if transmitted by
telecopy, electronic telephone line facsimile transmission or other similar electronic or digital
transmission method (provided customary evidence of receipt is obtained); the day after it is
sent, if sent by overnight common carrier service; and five days after it is sent, if mailed,
certified mail, return receipt requested, postage prepaid. In each case notice shall be sent to:
If to the City:
City Manager and City Attorney
City of Sunny Isles Beach
18070 Collins Avenue
Sunny Isles Beach, Florida 33160
Fax Number: 305-792-1641
If to the Bank:
BB&T Governmental Finance
255 S. Orange Ave., 10th Floor
Orlando, Florida 3280 I
Fax Number: 877-320-4453
or to such other address as either party may have specified in writing to the other using the
procedures specified above in this Section 9.6.
Section 9.7. Applicable Law. For purposes of this Agreement, Florida law shall
govern the terms of this Agreement. Venue shall be in Miami-Dade County, Florida.
Section 9.8. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the successors in interest and permitted assigns of the parties. The City
shall have no rights to assign any of their rights or obligations hereunder without the prior
written consent of the Bank, which consent may be granted, withheld or made subject to
conditions in the Bank's sole discretion.
Section 9.9. Conflict. In the event any conflict arises between the terms of this
Agreement and the terms of any other Loan Document, the terms of this Agreement shall govern
in all instances of such conflict.
Section 9.10. No Third Party Beneficiaries. It is the intent and agreement of the parties
hereto that this Agreement is solely for the benefit of the parties hereto and no person not a party
hereto shall have any rights or privileges hereunder.
Section 9.11. Attornevs Fees. To the extent legally permissible, the City and the Bank
agree that in any suit, action or proceeding brought in connection with this Agreement, the Bond,
or the Ordinance (including any appeal(s)), the prevailing party shall be entitled to recover costs
and attorneys' fees from the other party. The City does not waive sovereign immunity for any
claim for breach of contract or for an award of prejudgment interest; provided, however, that in
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MIA 182.397.885vl 3-5-12
any action arising out of or to enforce this Agreement, the prevailing party shall be entitled to its
reasonable attorney's fees and costs. The City agrees that should this transaction fail to close for
any reason, the Bank's Counsel shall be entitled to be reimbursed for any of their out-of-pocket
costs and to be paid a reasonable fee for its services through the expiration date of the
Commitment, and City understands that such fee shall be paid by City immediately upon receipt
of a statement.
Section 9.12. Entire Agreement. Except as otherwise expressly provided, this
Agreement and the other Loan Documents embody the entire agreement and understanding
between the parties hereto and supersede all prior agreements and understandings relating to the
subject matter hereof.
Section 9.13. Further Assurances. The parties to this Agreement will execute and
deliver, or cause to be executed and delivered, such additional or further documents, agreements
or instruments and shall cooperate with one another in all respects for the purpose of carrying out
the transactions contemplated by this Agreement.
Section 9.14. Waiver of JUry Trial. THE CITY AND THE BANK IRREVOCABLY
AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TOA TRIAL BY JURY IN
RESPECT OF ANY CONTROVERSY OR CLAIM BETWEEN THEM, WHETHER ARISING
IN CONTRACT, TORT OR BY STATUTE, THAT ARISES OUT OF OR RELATES TO THIS
AGREEMENT, THE BOND OR THE ORDINANCE. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE CITY AND THE BANK TO ENTER INTO THIS AGREEMENT.
Section 9.15. Discharge and Satisfaction of Bond. The covenants, liens and pledges
entered into, created or imposed pursuant to this Agreement and the Ordinance may be fully
discharged and satisfied with respect to the Bond in anyone or more of the following ways:
(a) by paying in full the principal of and interest on the Bond when the same shall
become due and payable; or
(b) by depositing in the Bond Fund or such other accounts as the City may hereafter
create and establish by ordinance moneys sufficient at the time of such deposit to pay the Bond
and all interest thereon as the same become due on said Bond on or prior to the maturity date
thereof; or
( c) by depositing in the Bond Fund or such other accounts as the City may hereafter
create and establish (which Bond Fund or other account and all moneys and securities deposited
therein shall be irrevocably pledged to the Bondholders for the payment of the Bond and all
interest thereon) moneys which, when invested in Defeasance Obligations, will provide moneys
which shall be sufficient to pay the Bond and, all interest thereon as the same shall become due
on said Bond on or prior to the scheduled maturity of the Bond. Upon such payment or deposit
in the amount and manner provided in this Section 9.15, the Bond shall no longer be deemed to
be outstanding for the purposes of this Agreement and the Ordinance and all liability of the City
with respect to the Bond shall cease, terminate and be completely discharged and extinguished,
and the Bondholders shall be entitled for payment solely out of the moneys or securities so
deposited.
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MfA 182.397,885vl 3-5-12
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective
between them as of the date of first set forth above.
CITY OF SUNNY ISLES BEACH, FLORIDA
By:
Norman S. Edelcup
Mayor
BRANCH BANKING AND TRUST COMPANY
By:
Michael C. Smith
Assistant Vice President
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MIA 182,397,885vl 3-5-12
EXHIBIT A
COMMITMENT OF BRANCH BANKING AND TRUST COMPANY
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MfA 182,397.887vl 3-5-12
EXHIBIT "A" TO LOAN AGREEMENT
FORM OF BOND
April_,2012
$ I 0,000,000
CITY OF SUNNY ISLES BEACH, FLORIDA
CAPITAL IMPROVEMENT REVENUE REFUNDING BOND, SERIES 2012
KNOW ALL MEN BY THESE PRESENTS that the City of Sunny Isles Beach, Florida
(the "City"), a municipal corporation created and existing pursuant to the Constitution and the
laws of the State of Florida, for value received, promises to pay from the sources hereinafter
provided, to the order of Branch Banking and Trust Company, or registered assigns (hereinafter,
the "Bank" or the "Holder"), the principal sum of $10,000,000, together with interest on the
principal balance outstanding at the rate of 2.00% per annum (subject to adjustment as
hereinafter provided), based upon a year of 360 days consisting of twelve 3D-day months.
[Payments shall be made by auto debit of the City's account with the Bank] designated as the
Bond Fund in the Loan Agreement mentioned hereinafter, in immediately available funds by no
later than 2:00 p.m. on the date due, free and clear of any defenses, set-off, counterclaims, or
withholdings or deductions for taxes.
Principal of and interest on this Bond are payable in lawful money of the United States of
America at such place as the Bank may designate to the City.
The principal on this Bond shall be due and payable on November 1 of each year (each, a
"Bond Payment Date"), beginning November 1,2013, through and including November 1,2022
(the "Maturity Date") in the amounts set forth on the payment schedule attached hereto.
Interest on this Bond shall be due and payable on each Bond Payment Date (as defined in
the Loan Agreement), beginning November 1,2012, through and including the Maturity Date.
The entire unpaid principal balance, together with all accrued and unpaid interest hereon, shall be
due and payable in full on the Maturity Date. All payments by the City pursuant to this Bond
shall apply first to accrued interest, then to other charges due the Bank, and the balance thereof
shall apply to the principal sum due.
For purposes of this Bond, the following definitions shall apply:
"Determination of Taxability" means, with respect to this Bond, any of the following:
(1) the holder of this Bond or the City receives a written claim or assertion
from the Internal Revenue Service, including an agent's report or notice of proposed
adjustment, to the effect that interest on this Bond is includable in the gross income of the
owner thereof for federal income tax purposes which claim or assertion is not being
disputed in good faith, or
A-I
MIA 182,397,885vI3-5-12
(2) the delivery to the holder of this Bond or the City of a written opinion of
Bond Counsel which is not disputed in good faith by the City to the effect that
(i) such interest is included in the gross income of the holder of this
Bond for federal income tax purposes under the Code, or
(ii) such Bond Counsel cannot render an opinion, without materially
qualifying the same (which qualification must also be deemed material in the
reasonable opinion of the holder of this Bond and its counsel after consultation
with the City), to the effect that interest on this Bond is excludable from the gross
income of the owner thereof for federal income tax purposes (without regard to an
alternative minimum tax), or
(3) interest on this Bond is otherwise declared or determined to be includable in
the gross income of the owner thereof for federal income tax purposes by reason of
legislation, judgment of a court of competent jurisdiction, or final determination letter of
the Internal Revenue Service which judgment or determination letter is final and non-
appealable.
For all purposes of this Ordinance, a Determination of Taxability shall be deemed to
occur with respect to this Bond on the date as of which the interest on this Bond is deemed
includable in the gross income of holder of this Bond.
"Taxable Rate" means the interest rate on this Bond as adjusted to cause the after tax
yield received by the holder of this Bond, after payment of any increase in tax, to equal the after
tax yield the holder of this Bond would have received in the absence of such change or
amendment in the tax laws or regulations.
The Interest Rate on this Bond shall be subject to adjustment as follows. Upon the
occun'ence of a Determination of Taxability, the Interest Rate shall be adjusted to the Taxable
Rate, as of and from the date such Determination of Taxability would be applicable with respect
to this Bond (the "Accrual Date"); and (i) the City shall on the next interest payment date (or if
this Bond shall have matured or been redeemed, within 30 days of the date of the Determination
of Taxability) pay to the holder, or any former holder, as may be appropriately allocated, an
amount equal to the sum of (I) the difference between (A) the total interest that would have
accrued on this Bond at the Taxable Rate from the Accrual Date to the date of the Determination
of Taxability, and (B) the actual interest paid by the City on this Bond from the Accrual Date to
the date of Determination ofTaxability, and (2) any interest and penalties required to be paid as a
result of any additional State of Florida and federal income taxes imposed upon such holder
and/or former holder arising as a result of such Determination of Taxability; and (ii) from and
after the date of the Determination of Taxability, this Bond shall continue to bear interest at the
Taxable Rate for the period such determination continues to be applicable with respect to this
Bond. This adjustment shall survive payment of this Bond until such time as the federal statute
of limitations under which the interest on this Bond could be declared taxable under the Code
shall have expired.
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MfA 182,397,885vI3-5-12
Any amount due under this Bond not paid when due shall bear interest at a default rate
equal to the interest rate on this Bond plus 2% per annum from and after five (5) days after the
due date.
The City shall be entitled to prepay this Bond prior to maturity in whole on any Bond
Payment Date on or after November 1,2012, at a redemption price equal to the principal amount
to be redeemed, plus a premium equal to I % thereof, plus accrued interest to the date of
prepayment, upon written notice to the Holder given by the City not less than two (2) Business
Days prior to the date fixed for prepayment.
The City to the extent permitted by law hereby waives presentment, demand, protest and
notice of dishonor.
This Bond is issued pursuant to (a) an Ordinance duly adopted by the City Commission
of the City on April_, 2012 (the "Ordinance"), which authorized the issuance of this Bond and
directed that the proceeds of this Bond, together with other available funds of the City, be
applied for the purposes of: (i) refinancing a loan made by the Florida Municipal Loan Council
from proceeds of its Revenue Bonds, Series 2002-C, outstanding in the principal amount of
$11,510,000 as of April I, 20 I 2, the proceeds of which were applied to finance the construction
of the Sunny Isle Beach Government Center; and (ii) paying costs of issuance of the Bond and of
refunding the Prior Loan, and (b) a Loan Agreement, dated of even date herewith, between the
City and the Bank (the "Loan Agreement"), and is subject to all the terms and conditions of the
Loan Agreement. All terms, conditions and provisions of the Loan Agreement are by this
reference thereto incorporated herein as a part of this Bond. Terms used herein in capitalized
form and not otherwise defined herein shall have the meanings ascribed thereto in the Loan
Agreement.
The City has covenanted and agreed in the Loan Agreement to appropriate in its annual
budget, by amendment, if necessary, from Non-Ad Valorem Revenues lawfully available in each
Fiscal Year, amounts sufficient to pay the principal and interest due on the Bond in accordance
with its terms during such Fiscal Year. "Non-Ad Valorem Revenues" means all revenues of the
City derived from any source other than ad valorem taxation on real or personal property which
the City derived from any source other than ad valorem taxation on real or personal property
which are legally available to make the payments required under the Loan Agreement; but only
after provision has been made by the City for the payment of all essential or legally mandated
services. Such covenant and agreement on the part of the City to budget and appropriate such
amounts of Non-Ad Valorem Revenues shall be cumulative to the extent not paid, and shall
continue until such Non-Ad Valorem Revenues or other legally available funds in amounts
sufficient to make all such required payments shall have been budgeted, appropriated and
actually paid. Notwithstanding the foregoing covenant of the City, the City does not covenant to
maintain any services or programs, now provided or maintained by the City, which generate
Non-Ad Valorem Revenues.
Such covenant to budget and appropriate does not create any lien upon or pledge of such
Non-Ad Valorem Revenues, nor does it preclude the City from pledging in the future its Non-Ad
Valorem Revenues, nor does it require the City to levy and collect any particular Non-Ad
Valorem Revenues. The Bank acknowledges that it may not have a prior claim on the Non-Ad
A-3
MfA 182.397,885vl 3-5-12
Valorem Revenues as opposed to claims of general creditors of the City. Such covenant to
appropriate Non-Ad Valorem Revenues is subject in all respects to the payment of obligations
secured by a pledge of such Non-Ad Valorem Revenues heretofore or hereafter entered into
(including the payment of debt service on Bond and other debt instruments). However, the
covenant to budget and appropriate in its general annual budget for the purposes and in the
manner stated in the Loan Agreement shall have the effect of making available in the manner
described herein Non-Ad Valorem Revenues and placing on the City a positive duty to
appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations
under the Loan Agreement, subject, however, in all respects to the terms of the Loan Agreement;
and subject, further, to the payment of services and programs which are for essential public
purposes affecting the health, welfare and safety of the inhabitants of the City or which are
legally mandated by applicable law.
Reference is hereby made to the Loan Agreement for the provisions, among others,
relating to the terms, lien and security of the Bond, the custody and application of the proceeds
of the Bond, the rights and remedies of the Holder of the Bond, and the extent of and limitations
on the City's rights, duties and obligations, to all of which provisions the Holder hereof for
himself and his successors in interest assents by acceptance of this Bond.
THIS BOND SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL DEBT OR
A PLEDGE OF THE FAITH AND CREDIT OF THE CITY, OR A DEBT OR PLEDGE OF
THE FAITH AND CREDIT OF THE STATE OF FLORIDA OR ANY POLITICAL
SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL,
LEGISLATIVE OR CHARTER PROVISION OR LIMITATION, AND IT IS EXPRESSLY
AGREED BY THE HOLDER OF THIS BOND THAT SUCH HOLDER SHALL NEVER
HA VE THE RIGHT, DIRECTLY OR INDIRECTLY, TO REQUIRE OR COMPEL THE
EXERCISE OF THE AD VALOREM TAXING POWER OF THE CITY OR ANY OTHER
POLITICAL SUBDIVISION OF THE STATE OF FLORIDA OR TAXATION IN ANY FORM
ON ANY REAL OR PERSONAL PROPERTY FOR THE PAYMENT OF THE PRINCIPAL
OF, PREMIUM, IF ANY, AND INTEREST ON THIS BOND OR FOR THE PAYMENT OF
ANY OTHER AMOUNTS PROVIDED FOR IN THE LOAN AGREEMENT.
It is further agreed between the City and the Holder of this Bond that neither the members
of the Governing Body of the City nor any person executing the Bond shall be liable personally
on the Bond by reason of its issuance.
This Bond may be exchanged or transferred by the Bank hereof but only upon the
registration books maintained by the City and in the manner provided in the Loan Agreement.
It is hereby certified, recited and declared that all acts, conditions and prerequisites
required to exist, happen and be performed precedent to and in the execution, delivery and the
issuance of this Bond do exist, have happened and have been performed in due time, form and
manner as required by law, and that the issuance of this Bond is in full compliance with and does
not exceed or violate any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Sunny Isles Beach, Florida has caused this Bond
to be executed in its name by the manual signature of its Mayor, and attested by the manual
A-4
MIA 182,397.885vl 3-5-12
signature of its Clerk and its corporate seal or a facsimile thereof affixed hereto, all as of this
_dayof ,2012.
CITY OF SUNNY ISLES BEACH, FLORIDA
[SEAL]
By:
Norman S. Edelcup, Mayor
ATTEST:
By:
Jane A. Hinds, CMC, Clerk
A-5
MfA 182,397,885vl 3-5-12
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints attorney to transfer the within Bond in the books kept
by the City for the registration thereof, with full power of substitution in the premises.
Date:
SOCIAL SECURITY NUMBER OR
FEDERAL IDENTIFICATION
NUMBER OF ASSIGNEE
NOTICE: The signature of this assignment
must correspond with the name as it
appears upon the within Bond in every
particiculate, or any change whatever.
[Form of Abbreviations]
The following abbreviations, when used in the inscription on the face of the within Bond,
shall be construed as though they were written out in full according to the applicable laws or
regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with the right of survivorship and not as tenants in common
UNIFORM TRANS MIN ACT - Custodian for (Cust.) (Minor) under
Uniform Transfers to Minors Act of
(State).
Additional abbreviations may also be used
though not in the above list.
Name and address of assignee for payment and notice purposes
Notice:
Payment:
Date:
Assignee:
By:
Title:
A-6
MIA 182,397,885vl 3-5-12
PAYMENT SCHEDULE
A-7
MIA 182.397.885vl 3-5-12
BB&T
BB&T Governmental Finance
255 S. Orange Ave.. 10th Floor
Orlando, FL 3280 I
(407) 241-3570
Fax (877) 320-4453
February 29,2012
(Revised March 6, 2012)
Ms. MinaI Shah
Assistant City Manager - Finance Director
City of Sunny Isles Beach
18070 Collins A venue
Sunny Isles Beach, FL 33160
Dear Ms. Shah:
Branch Banking and Trust Company ("'BB&T") is pleased to offer this proposal for Ihe financing requesled by
the City of Sunny Isles Beach, FL ("'City").
(1)
Project:
Refunding of the City's FMLC Revenue Bonds, Series 2002C
(2)
Amount To Be Financed:
Not to Exceed $10,000,000.00
(3) Interest Rates, Financing Terms and Corresponding Payments:
Term 80 Rate
10 years 2.00%
15 years 2.57%
Interest payments shall be due semiannually on each May 1 and November I, and principal payments shall be
due annually on each November I. Interest will accrue on the principal balance based on a 30/360 day count method.
Upon being awarded this transaction BB&T must approve of the final amortization schedule.
The interest rates stated above are valid for a closing date not later than April 20, 2012. Closing of the financing
is contingent upon completing documentation acceptable to BB&T and its counsel.
Remuneration for our legal review expenses and underwriting for this financing transaction shall be $4,000.00.
All applicable costs of counsel for Ihe City and any other costs shall be the City's responsibility and separately payable by
the City.
The financing documents shall allow for the prepayment of the principal balance in whole on a scheduled
payment date with a I % prepayment premium.
The financing documents shall also include provisions that will outline appropriate changes to be implemented in
the event that this transaction is determined to be taxable or non-bank qualified in accordance with Florida State Statutes
or the Internal Revenue Service code. These provisions must be acceptable to BB&T.
The stated interest rates above assume that the City expects to borrow $10,000,000 or less in the calendar year
2012 and thai the financing shall comply with the applicable IRS Code Sections 141, 148, 149(e) and 265(b)(3). BB&T
reserves the right to tenninate its interest in this bid or to negotiate a mutually acceptable rate if the financing is not a
qualified tax-exempt financing.
(4) Financing Documents:
It shall be the responsibility of the City to retain and compensate counsel to appropriately structure the financing
documents according to Florida State statutes. BB&T shall also require the City to provide an unqualified bond counsel
opinion. BB&T and its counsel reserve the right to review and approve all documentation before closing.
(5) Security:
The financing shall be secured by a covenant of the City to budget and appropriate from legally available non-ad
valorem revenues in a sufficient amount for payment of principal and interest when due.
******
BB&T appreciates the opportunity to make this financing proposal and requests to be notified within ten days of
Ihis proposal should BB&T be the successful proposer.
BB&T shall have the right to cancel this offer by notifying the City of ils eleclion to do so (whether or notlhis
offer has previously been accepted by the City) if at any time prior to the closing there is a material adverse change in the
City's financial condition, if we discover adverse circumstances of which we are currently unaware, if we are unable to
agree on acceptable documentation with the City or if there is a change in law (or proposed change in law) that changes
the economic effect of this financing to BB&T. We reserve the right to negotiate and/or terminate our interest in this
transaction should we be the successful proposer.
Please call me al (803) 251-1328 with your questions and comments or contact Michael C. Smith in our Orlando,
FL office al:
255 South Orange A venue
Orlando, FL 3280 I
Phone: 407.241.3570
Fax: 877.320.4453
Email: mcsmilh@bbandt.com
We look forward to hearing from you.
Sincerely,
BRANCH BANKING AND TRUST COMPANY
~):J. J,d;}-
Andrew G. Smith
Senior Vice President
ESCROW REQUIREMENTS
Horida t>.1unicipal Loan Council
Payoff of PMLC Sunny Isles Beach 20D2e
Period
Ending
Principal Redemption
Principal Interest Redeemed Premium Total
297,075.00 297,075.00
810,000.00 297,075.00 10.700.000.00 107,000.00 11,914.075.00
810,000.00 594,150.00 10,700,000.00 107,000.00 12,211,150.00
05/01/2012
11/01/2012
Mar 1, 2012 12:18 pm Prepared by \'('aters and Company, LLC
Page 1
BOND DEBT SERVICE
Plorida Municipal Loan Council
PAILe Sunny Isles Beach 20D2e
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/01/2011
05/01/2012 297,07 5.00 297,075.00
11/01/2012 810,000 4.000oj" 297,075.00 1.107,075.00 1,404,150.00
05/01/2013 280,875.00 280,875.00
11/01/2013 840,000 5.2500,1(, 280,875.00 1,120.875.00 1,401,750.00
05/01/2014 258.825.00 258,825.00
11/01/2014 885,000 5.2500;\, 258,825.00 1,143,825.00 1,402,650.00
05/01/2015 235.593.75 235,593.75
11/01/2015 930,000 5.250% 235.593.75 1,165,593.75 1,401,187.50
05/01/2016 211,181.25 211,181.25
11/01/2016 980,000 5.250% 211.181.25 1,191,181.25 1,402,362.50
05/01/2017 185,456.25 185,456.25
11/01/2017 1,030,000 5.2500;', 185,456.25 1,215.456.25 1,400.912.50
05/01/2018 158,418.75 158,418.75
11/01/2018 1,085,000 5.250% 158,418.75 1,243.418.75 1,401.837.50
05/01/2019 129,937.50 129.937.50
11/01/2019 1,145,000 5.250% 129,937.50 1,274,937.50 1,404,875.00
05/01/2020 99,881.25 99,881.25
11/01/2020 1.205,000 5.250% 99,881.25 1.304,881.25 1,404,762.50
05/01/2021 68,250.00 68,250.00
11/01/2021 1,265,000 5.2500;', 68,250.00 1,333,250.00 1,401,500.00
05/01/2022 35,043.75 35.043.75
11/01/2022 1,335,000 S.25OC'/i, 35,043.75 1,370.043.75 1,405,087.50
11,510.000 3,921.075.00 15,431.075.00 15,431,075.00
Mar 1, 2012 12:15 pm Prepared by Waters and Company, LLC
Page 1
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Mar 8,2012 8:42 am Prepared by RB&T Governmental Finance (Finance 6.022 SunnylslesBeach-FL:SUNNYISL-REVBOND) Page 1
BONllllEBT SERVICE
City of Sunny Isles Beach, FL Daled Dale ~ 4/20/2012
Refunding of City's Florida Municipal Loan Council Revenue Bonds, Series 2002C
Period Annual Bond Total
Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value
04/20/2012 10.000,000.00 10,000,000.00
05/0112012 6,111.11 6,111.11 10,000,000.00 10,000,000.00
09/30/2012 6,111.11 10,000,000.00 10,000,000.00
11/01/2012 100,000.00 100.000.00 10,000,000.00 10.000,000.00
05/01/2013 100,000.00 100,000.00 10,000,000.00 10,000.000.00
09/3012013 200,000.00 10,000,000.00 10.000.000.00
11/01/2013 912,422.11 2.000% 100,000.00 1,012,422.11 9,087,577.89 9,087,577.89
05/01/2014 90,875.78 90,875.78 9,087.577.89 9.087.577.89
09/30/2014 1,103,297.89 9.087,577.89 9,087,577.89
11/01/2014 930,854.88 2.000% 90,875.78 1.021,730.66 8,156,723.01 8,156.723.01
05/0112015 81,567.23 81.567.23 8,156,723.01 8,156.723.01
09/30/2015 1,103.297.89 8.156,723.01 8.156.723.01
11/01/2015 949,660.03 2.000% 81,567.23 1,031,227.26 7.207,062.98 7,207,062.98
05/01/2016 72,070.63 72,070.63 7,207,062.98 7.207,062.98
09/30/2016 1,103,297.89 7,207,062.98 7.207,062.98
11/0112016 968,845.08 2.000% 72,070.63 1,040,915.71 6,238,217.90 6,238,217.90
05/01/2017 62,382.18 62,382.18 6,238,217.90 6,238,217.90
09/30/2017 1,103,297.89 6,238,217.90 6,238,217.90
11/01/2017 988,417.71 2.000% 62,382.18 1,050,799.89 5.249,800.19 5.249.800.19
05/01/2018 52,498.00 52,498.00 5,249,800.19 5,249,800.19
09/30/2018 1.103,297.89 5.249,800.19 5,249,800.19
11/01/2018 1,008,385.74 2.000% 52,498.00 1,060,883.74 4,241,414.45 4,241,414.45
05/01/2019 42,414.14 42,414.14 4,241,414.45 4,241,414.45
09/30/2019 1,103,297.88 4.241,414.45 4,241,414.45
11/01/2019 1,028,757.17 2.000% 42,414.14 1.071.171.31 3,212,657.28 3,212.657.28
05/01/2020 32,126.57 32,126.57 3,212,657.28 3,212.657.28
09/30/2020 1,103,297.88 3.212,657.28 3,212,657.28
11/01/2020 1,049,540.15 2.000% 32,126.57 1,081,666.72 2.163,117.13 2,163,117.13
05/01/2021 21,631.17 21.631.17 2,163,117.13 2,163,117.13
09/30/2021 1,103,297.89 2.163,117.13 2,163,117.13
11/01/2021 1,070,742.98 2.000% 21,631.17 1,092,374.15 1.092,374.15 1,092,374.15
05/01/2022 10,923.74 10,923.74 1,092,374.15 1,092,374.15
09/30/2022 1.103.297.89 1.092,374.15 1,092.374.15
11/01/2022 1.092,374.15 2.000% 10,923.74 1,103,297.89
09/30/2023 1.103,297.89
10,000,000.00 1,239,089.99 11.239,089.99 11,239,089.99
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Preview
TO:
FROM:
DATE:
RE:
Page I of2
City of Sunny Isles Beach
18070 Collins Avenne
Snnny Isles Beach, Florida 33160
(305) 947-0606 City 11.11
(305) 949-3113 F.x
MEMORANDUM
The Honorable Mayor and City Commission
Minai Shah, Assistant City Manager-Finance
4119/2012
Issuance of a $10 million revenue bond to advance refund the 2002C
Florida Municipal Loan Council Revenue Bond.
RECOMMENDATION:
Staff is recommending City Commission approve the ordinance and loan documents with
BB&T for the issuance of a $10 million revenue bond to be repaid over 10 years with an
interest rate of2.0% to defease the 2002C FMLC revenue bonds with a remaining of life
of 10 years with an interest rate of 5.25%.
REASONS:
On November I, 2012, the City has the option to defease the bond at a I % early
redemption premium. The current principal balance of the bond is $11,510,000. After the
November I, 2012 principal payment, the balance is $10,700,000. Every calendar year,
the City has the opportunity to obtain up to $10 million of tax-exempt financing. Please
note that if the City exceeds $10 million in borrowings in a year, then all monies
borrowed no longer benefit from the tax-exempt rate. Tax-exempt financing provides for
an interest rate savings of approximately 0.80%. Since interest rates are low now and
there is no certainty as to where interest rates will be in 6 months, staff is doing an
advance refunding of the 2002C FMLC revenue bond now. As such, the City will incur
interest costs of the 2002C bond and the new 2012 bond. However, staff deems that the
cost is minor considering the great savings of locking in the 2% rate. The bond closing is
scheduled for April 20,2012. Upon closing, a total of $12,211,150 will be sent to an
escrow agent for the purposes of defeasing the 2002C FMLC revenue bonds. The
$12,211,150 includes $594,150 of interest which half is due on May 1,2012 and the
remainder is due Novemeber 1,2012. The remainder is $11,510,000, of which $810,000
is due on November 1,2012 leaving an outstanding balance of $10,700,000 to defease
the bond. In addition, there is an approximately $150,000 in costs that include early
redemption premium, escrow agent costs. legal fees and other administrative fees. The
Agenda Item
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http://sibagenda.si bfl.net/ agenda/Preview .aspx?1 tem I D~7 4 3 &MeetingID
Date
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Page 2 of2
overall net savings over the 10 years is approximately $1.9 million. The City will make
its first principal payment on the new debt on November 1,2013. See attached schedule
for projected annual debt service of the new bond, old bond, the cost of overlapping the 2
bonds, and the annual net savings of the advance refunding of the bond.
ATTACHMENTS:
.
Ordinance
.
Loan Agreement
Exhibit "A" to Loan Agreement
BB&T Offer Letter
2002C Escrow Requirements as of 4/20/12
.
2002C Amortization Schedule
.
2012 Amortization Schedule
.
Debt Analysis-Net Savings
.
Notice of Public Hearing
http://sibagenda.sibfl.net/agenda/Preview.aspx?lteml D=7 43&MeetinglD=0&MeetingDate... 4111/2012