Item 7F AGENDA ITEM # 7F
NOVEMBER 22, 2010
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: ORDINANCE 15 -10 -12
AN ORDINANCE OF THE CITY OF ATLANTIC BEACH, FLORIDA
SUPPLEMENTING ORDINANCE NO. 15 -95 -7 ENACTED BY THE CITY
COMMISSION ON NOVEMBER 13, 1995, AS AMENDED AND
SUPPLEMENTED; AUTHORIZING THE ISSUANCE OF NOT EXCEEDING
$10,100,000 UTILITIES SYSTEM REVENUE BONDS, SERIES 2010A
TO FUND THE COSTS OF SEWER AND PLANT UPGRADES OF THE
CITY'S UTILITY SYSTEM; APPROVING A FORM OF LOAN
AGREEMENT AND AUTHORIZING EXECUTION AND DELIVERY OF
THE LOAN AGREEMENT AND OTHER ACTION IN CONNECTION WITH
THE DELIVERY OF SUCH BONDS; PROVIDING FOR SALE OF THE
BONDS BY RESOLUTION FOLLOWING SOLICITATION OF
COMPETITIVE PROPOSALS AND NEGOTIATIONS; PLEDGING THE
CITY'S PLEDGED REVENUES AS DESCRIBED IN ORDINANCE NO. 15-
95 -7; AND PROVIDING AN EFFECTIVE DATE.
DATE: November 15, 2010
SUBMITTED BY: Nelson Van Liere, Finance Director
BACKGROUND: During the Budget Process, the City determined that borrowing funds to
comply with the TMDL requirements was the only way to fund the project. The City
is now in the process of taking bids to obtain the lowest interest rate on a loan that
may be prepaid without penalty and is amortized over twenty years. It is our
intention and expectation that the project will qualify for State Revolving Funds and
that we will be refunding the allowable portions of the debt with a considerable lower
interest rate once approved. This loan will pay for the sewer main, the plant upgrades
and the design costs for both. Those design costs were originally funded with
General Fund monies and will be repaid with these proceeds. This ordinance
authorizes the City to incur debt as required by our charter. The loan is not to exceed
$10,100,000 and the final amounts will be determined once the bids are evaluated.
Subject and pursuant to the provisions of this Ordinance, the City is authorized to
incur a Loan and to issue the Bonds in evidence thereof, upon substantially the terms
of the Loan Agreement attached hereto as Exhibit A, as such terms may be modified
by resolution adopted at the time of sale of the Bonds. All of the terms and covenants
contained in the Loan Agreement are incorporated herein by reference. The Bond
Ordinance and the Loan Agreement, upon the funding of the Loan and the issuance of
the Bonds, shall constitute a contract between the City and the Lender.
ATTACHMENTS: ORDINANCE NO. 15 -10 -12 and Exhibit.
RECOMMENDATION: Approve Ordinance No. 15 -10 -12
7 CITY MANAGER APPROV
AGENDA ITEM # 7F
NOVEMBER 22, 2010
ORDINANCE NO. 15 -10 -12
AN ORDINANCE OF THE CITY OF ATLANTIC BEACH, FLORIDA
SUPPLEMENTING ORDINANCE NO. 15 -95 -7 ENACTED BY THE
CITY COMMISSION ON NOVEMBER 13, 1995, AS AMENDED
AND SUPPLEMENTED; AUTHORIZING THE ISSUANCE OF NOT
EXCEEDING $10,100,000 UTILITIES SYSTEM REVENUE
BONDS, SERIES 2010A TO FUND THE COSTS OF SEWER AND
PLANT UPGRADES OF THE CITY'S UTILITY SYSTEM;
APPROVING A FORM OF LOAN AGREEMENT AND
AUTHORIZING EXECUTION AND DELIVERY OF THE LOAN
AGREEMENT AND OTHER ACTION IN CONNECTION WITH THE
DELIVERY OF SUCH BONDS; PROVIDING FOR SALE OF THE
BONDS BY RESOLUTION FOLLOWING SOLICITATION OF
COMPETITIVE PROPOSALS AND NEGOTIATIONS; PLEDGING
THE CITY'S PLEDGED REVENUES AS DESCRIBED IN
ORDINANCE NO. 15 -95 -7; AND PROVIDING AN EFFECTIVE
DATE.
WHEREAS, the City Commission of the City of Atlantic Beach, Florida (the
"City ") has determined that it is necessary and desirable to finance the cost of the
project described in the title of this Ordinance;
NOW THEREFORE, BE IT ENACTED BY THE CITY COMMISSION ON
BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH, FLORIDA:
Section 1. AUTHORITY FOR THIS ORDINANCE. This Ordinance is enacted
pursuant to the provisions of the Act, as defined in the Loan Agreement, a form of
which is attached hereto as Exhibit A.
Section 2. DEFINITIONS. All terms in this Ordinance shall have the
meanings as defined in the Loan Agreement.
Section 3. PROJECT AUTHORIZED. There is hereby authorized the project
described in the title of this Ordinance.
Section 4. AUTHORIZATION OF LOAN AND BONDS. Subject and pursuant
to the provisions of this Ordinance, the City is authorized to incur a Loan and to issue
the Bonds in evidence thereof, upon substantially the terms of the Loan Agreement
attached hereto as Exhibit A, as such terms may be modified by resolution adopted at
the time of sale of the Bonds. All of the terms and covenants contained in the Loan
Agreement are incorporated herein by reference. The Bond Ordinance and the Loan
Agreement, upon the funding of the Loan and the issuance of the Bonds, shall
constitute a contract between the City and the Lender.
Section 5. SALE OF BONDS.
(A) Findings. It is hereby found, determined and declared, that in
accordance with the provisions of Part III, Chapter 218, Florida Statutes, a negotiated
sale of the Bonds is in the best interest of the City because of the small size of the
issue, the uncertainty of the bond market for issues of this type, and the flexibility
available in structuring the Bonds and their terms.
AGENDA ITEM # 7F
NOVEMBER 22, 2010
(B) The City has solicited proposals for purchase of the Bonds from
area commercial banks. Following evaluation of the responses received and
negotiation with the offeror of the proposal most advantageous to the City, the City is
authorized to sell the Bonds by resolution, specifying the marketing terms of the
Bonds, including but not limited to interest rate, interest payment dates, maturity
dates and amounts, and terms of prepayment, and making such modifications to the
terms of the Loan Agreement as may be then approved by such resolution of the City
Commission.
Section 6. NECESSARY ACTION. The Mayor or Vice Mayor and the City
Clerk or Deputy Clerk of the City are authorized and directed to execute and deliver
the Loan Agreement and the Bonds pursuant to the resolution described in Section 5
hereof upon payment of the purchase price without further authority from the City
Commission. The Mayor or Vice Mayor and City Clerk or Deputy Clerk and City
Manager are designated as the agents of the City in connection with the issuance and
delivery of the Bonds and are authorized and empowered to take all actions and steps
to execute and deliver any and all instruments, documents or contracts on behalf of
the City which are necessary or desirable in connection with the execution and
delivery of the Loan Agreement and the Bonds, and which are not inconsistent with
the terms and provisions of this Ordinance and the Loan Agreement.
Section 7. EFFECTIVE DATE. This Ordinance shall take effect immediately
upon its enactment.
PASSED AND ADOPTED on first reading by the City Commission of the City of
Atlantic Beach, Florida at a regular meeting duly called and held this day of
, 2010.
PASSED AND ADOPTED on second and final reading by the City Commission
of the City of Atlantic Beach, Florida at a regular meeting duly called and held this
day of , 2010.
CITY OF ATLANTIC BEACH, FLORIDA
Approved as to form, sufficiency Mike Borno, Mayor
and correctness:
Alan Jensen, City Attorney
ATTEST:
Donna L. Bartle, City Clerk
Ordinance No. 15 -10 -12 Page 2 of 2
AGENDA ITEM # 7F
NOVEMBER 22, 2010
EXHIBITS
TO
ORDINANCE
LOAN AGREEMENT
between
CITY OF ATLANTIC BEACH, FLORIDA
and
Dated as of , 2010
$10,100,000
UTILITIES SYSTEM REVENUE BONDS
SERIES 2010A
Exhibit to Ordinance No. 15 -10 -12 Page 1 of 5
AGENDA ITEM # 7F
NOVEMBER 22, 2010
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement "), dated as of
2010, by and between the CITY OF ATLANTIC BEACH, FLORIDA (the "City "), a
municipal corporation under the laws of the State of Florida, and
(the "Lender "),
WITNESSETH:
WHEREAS, the City has, by adoption of Ordinance No. (the
"Ordinance ") on , 2010, authorized the financing of the cost of sewer
and plant upgrades of the City's System by a loan (the "Loan ") in the amount of
from the Lender; and
WHEREAS, the City has, by Resolution No. , adopted on December ,
2010 (the "Resolution ") determined to obtain the Loan from the Lender;
NOW THEREFORE, in consideration of the premises and the respective
representations and covenants herein contained, the parties hereto agree as follows:
Section 1. Definitions. The following terms in this Agreement shall have the
following meanings, unless the text otherwise expressly requires:
"Act" means Chapter 166, Florida Statutes, the Original Ordinance and other
applicable provisions of law.
"Bond Ordinance" shall mean the Ordinance, as supplemented by the
Resolution.
"Bonds" means the City's $ Utilities System Revenue Bonds, Series
2010A, issuable in the denomination of a single Bond of $ principal amount.
"City" means the City of Atlantic Beach, Florida
"Code" means the Internal Revenue Code of 1986, as amended.
"County" means Duval County, a political subdivision of the State of Florida.
"Loan" means the loan agreed to be made to the City by the Lender pursuant to
Section 3 below.
"Original Ordinance" shall mean Ordinance No. 15 -95 -7 enacted by the City
Commission on November 13, 1995, as amended and supplemented. Except as
otherwise provided herein, all capitalized terms used and /or defined in the Original
Ordinance shall have the same meanings in this Agreement.
"Parity Bonds" shall mean the City's outstanding Utilities System Revenue
Refunding Bonds, Series 2004 and the City's Utilities System Revenue Bonds, Series
2010B being issued simultaneously with the Bonds.
Exhibit to Ordinance No. 15 -10 -12 Page 2 of 5
AGENDA ITEM # 7F
NOVEMBER 22, 2010
"Project" shall mean the cost of sewer and plant upgrades to the City's System,
including reimbursement to the General Fund of the City for costs advanced prior to
issuance of the Bonds.
"Refunded Bonds" shall mean the City's outstanding Utility System Revenue
Refunding Bonds, Series 1996.
Section 2. Findings. It is hereby found, determined and declared by the City
that:
A. The Project will further the purposes of the Act and will be in the
best interests of the City.
B. The City now owns, operates and maintains the System and
receives Pledged Revenues each year which are not presently pledged for payment of
any debt, except the Parity Bonds and the Refunded Bonds, and are legally available
to pay the Bonds. Such Pledged Revenues will be sufficient to pay all principal of and
interest on the Bonds and the Parity Bonds when due and to make all required
payments under the Original Ordinance and the Bond Ordinance.
Section 3. Loan. The Lender agrees to make a Loan to the City for the
purpose of financing the cost of the Project. The Loan shall be evidenced by the
Bonds, containing the terms in the Bond Ordinance and this Agreement, which shall
be substantially in the form provided in the Resolution.
Section 4. Terms and Covenants of Prior Ordinances Apply. All of the
terms and covenants of Section 6.08 and Article III and Article V, except Section 5.04
thereof relating to continuing disclosure, of Ordinance No. 15 -95 -7, as amended, are
incorporated by reference herein and shall apply to the Loan for the benefit of the
Lender as fully as if set out herein. Upon compliance with the requirements of the
Original Ordinance for the issuance of Additional Parity Bonds, the Bonds shall be
Additional Parity Bonds for all purposes of the Original Ordinance. However, in the
event that the requirements of the Original Ordinance for the issuance of Additional
Parity Bonds are not met, then the Bonds shall be junior, inferior and subordinate in
all respects to the Parity Bonds as to lien on and source and security for payment from
the Pledged Revenues and in all other respects. Moreover, in that event, the funds
and accounts described in the Original Ordinance shall be used only for the Parity
Bonds, and additional accounts having similar purposes shall be established for the
Bonds, and all payments and deposits shall first be made into the funds and accounts
for the Parity Bonds in full before any payments and deposits are made into the
additional accounts having similar purposes established for the Bonds.
Section 5. Prepayment. The Bonds shall be prepayable before maturity as
provided in the Resolution.
Section 6. Application of Loan Proceeds. All proceeds received from the
Loan shall be deposited in a Project Fund to be separately accounted for, and shall be
applied by the City for payment of costs of the Project. Pending such expenditure, the
proceeds of the Loan shall be invested in lawful investments for the City maturing at
Exhibit to Ordinance No. 15 -10 -12 Page 3 of 5
AGENDA ITEM # 7F
NOVEMBER 22, 2010
or prior to the times when such funds will be needed. The earnings thereon shall be
available only for the purposes of the Loan until the Project is completed and
thereafter such earnings and any unspent loan proceeds shall be applied to (1)
prepayment of the Loan or (2) such other project as the City Commission shall approve
with an approving opinion of bond counsel stating that such purpose constitutes a
lawful use of bond proceeds and will not adversely affect the exclusion of interest on
the Bonds from gross income for federal income tax purposes. The Lender shall have
a lien on the money in the Project Fund until spent as provided herein.
Section 7. Waiver of Jury Trial. WITH RESPECT TO ANY SUIT OR ACTION
BETWEEN THE CITY AND THE LENDER RELATING TO THE LOAN, OR THIS LOAN
AGREEMENT, THE CITY AND THE LENDER EACH EXPRESSLY WAIVES ANY RIGHT
TO A JURY TRIAL, AND AGREES THAT THE EXCLUSIVE VENUE FOR ANY SUCH
SUIT OR ACTION SHALL BE DUVAL COUNTY, FLORIDA.
Section 8. Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when hand delivered
or mailed by registered or certified mail, postage prepaid, to the parties at the following
addresses:
Notice Addresses
As to the City: Nelson Van Liere
City of Atlantic Beach
800 Seminole Road
Atlantic Beach, Florida 32233 -5445
(904) 247 -5807
As to the Lender:
Any of the above parties may, by notice in writing given to the others, designate
any further or different addresses to which subsequent notices, certificates or other
communications shall be sent. Communication to the Lender via telecopier shall be
confirmed by delivery of a hard copy thereof to the Lender not later than two (2)
Business Days after such communication by telecopier.
Section 9. Qualified Tax - Exempt Obligation. The City hereby represents
and finds that it reasonably anticipates not more than $30,000,000 of tax- exempt
obligations (other than certain private activity bonds) will be issued by the City and its
subordinate governmental entities in calendar year 2010. The City hereby directs it
Mayor to recertify these representations upon issuance of the Bonds, and the Bonds
are hereby designated as "qualified tax- exempt obligations" under Section 265(b)(3) of
the Code.
Section 10. No Recourse. No recourse shall be had for the payment of the
principal of and interest on the Bonds or for any claim based on the Bonds or on this
Agreement, against any present or former member or officer of the City Commission or
any person executing the Bonds.
Exhibit to Ordinance No. 15 -10 -12 Page 4 of 5
AGENDA ITEM # 7F
NOVEMBER 22, 2010
Section 11. Amendments, Changes and Modifications. This Agreement may
be amended by written agreement of the City and the Lender.
Section 12. Binding Effect. To the extent provided herein, this Agreement
shall be binding upon the City and the Lender and shall inure to the benefit of the City
and the Lender and their respective successors and assigns.
Section 13. Severability. In the event any provision of this Agreement shall
be held invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.
Section 14. Execution in Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an original
and all of which shall constitute but one and the same instrument.
Section 15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the City and the Lender have executed and delivered
this Loan Agreement as of , 2010.
CITY OF ATLANTIC BEACH,
FLORIDA
(SEAL)
By:
Mike Borno, Mayor
ATTEST:
By:
Donna L. Bartle, City Clerk
[LENDER]
By:
Its:
Exhibit to Ordinance No. 15 -10 -12 Page 5 of 5