Res 33-99RESOLUTION NO. 33-99
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY
BEACH, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED
$3,500,000 IN AGGREGATE PRINCIPAL AMOUNT OF WATER AND SEWER
REVENUE BONDS, SUBORDINATE SERIES 1999, OF THE CITY OF DELRAY
BEACH, FLORIDA FOR THE PURPOSE OF FINANCING ALL OR A PORTION
OF THE COSTS OF A TOUCHREAD METERING SYSTEM AND INCIDENTAL
COSTS RELATING THERETO; DETERMINING THE NEED FOR A
NEGOTIATED SALE OF SUCH BONDS TO SUNTRUST BANK, SOUTH
FLORIDA, N.A.; PROVIDING FOR THE TERMS AND PAYMENT OF SAID
WATER AND SEWER REVENUE BONDS, SUBORDINATE SERIES 1999,
AND THE RIGHTS, REMEDIES AND SECURITY OF THE OWNERS
THEREOF; MAKING CERTAIN COVENANTS RELATING TO THE ISSUANCE
OF SAID WATER AND SEWER REVENUE BONDS, SUBORDINATE SERIES
1999; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION OF
A LINE OF CREDIT AGREEMENT WITH SUNTRUST BANK, SOUTH
FLORIDA, N.A.; DESIGNATING THE WATER AND SEWER REVENUE
BONDS, SUBORDINATE SERIES 1999 AS "QUALIFIED TAX-EXEMPT
OBLIGATIONS" WITHIN THE MEANING OF SECTION 265(b) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED; AUTHORIZING THE
PROPER OFFICERS OF THE CITY TO DO ALL OTHER THINGS DEEMED
NECESSARY OR ADVISABLE IN CONNECTION WITH THE ISSUANCE OF
SAID BONDS; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Delray Beach, Flodda (the "City
Commission"), hereby determines that it is in the best interest of the City of Delray Beach,
Florida (the "City"), to finance the cost of acquiring and implementing an automated meter
reading system, as further described on Exhibit C attached hereto, together all incidental and
necessary costs relating thereto (collectively, the "1999 Project"); and
WHEREAS, pursuant to the terms and provisions of this Resolution, the City shall issue
at one time or from time to time obligations known as "City of Delray Beach, Florida Water and
Sewer Revenue Bonds, Subordinate Series 1999" (herein, the "1999 Bonds") to finance the
costs of the 1999 Project including the costs of issuing such 1999 Bonds; and
WHEREAS, the principal amount of the 1999 Bond authorized under this Resolution
shall not exceed $3,500,000; and
WHEREAS, the 1999 Bonds shall be secured by a pledge of and lien on the Pledged
Revenues (as such term is defined below); and
WHEREAS, City staff has previously solicited bids from qualified lending institutions to
provide a line of credit or term loan as the vehicle by which the 1999 Bonds are to be issued
and the 1999 Project is to be financed; and
WHEREAS, City staff has determined and the City Commission hereby concurs that
SunTrust Bank, South Florida, N.A., a national banking association with its designated office in
West Palm Beach, Florida (herein, the "Bank") has provided the best overall bid to the City; and
WHEREAS, the City Commission hereby finds that in light of present market conditions,
the aforementioned bid provided by the Bank, the subordinate nature of the 1999 Bonds, and
other factors described herein, it would be in the best interest of the City to sell the 1999 Bonds
to the Bank on a negotiated basis pursuant to the terms and provisions of this Resolution and
that certain Line of Credit Agreement dated as of June 1, 1999 (herein, the "Agreement") by
and between the City and the Bank in substantially the form attached hereto as Exhibit A; and
WHEREAS, the City does not expect to issue more than $10,000,000 of its tax-exempt
obligations in calendar year 1999, and based upon the advice of its Bond Counsel, the City
Commission shall designate the 1999 Bonds as "qualified tax-exempt obligations" within the
meaning of Section 265(b) of the Code.
NOW, THEREFORE, be it resolved by the City Commission of the City of Delray Beach,
Florida, as follows:
ARTICLE I
STATUTORY AUTHORITY; FINDINGS AND DEFINITIONS
SECTION 1.1 AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted
pursuant to the provisions of the Charter of the City of Delray Beach, Florida, as amended and
supplemented, the Florida Constitution, Chapter 166, Florida Statutes, as amended and
supplemented, and other applicable provisions of law (collectively, the "Act").
SECTION 1.2. EIIYJ~_N_C~. It is hereby ascertained, determined and declared:
(a) That the City hereby authorizes that the 1999 Project be financed from all or a
part of the proceeds derived from the 1999 Bonds issued pursuant to this Resolution, together
with all incidental and necessary costs and expenses associated therewith, as more fully set
forth in Section 1.2(d) hereof.
(b) That it is necessary to acquire and implement the 1999 Project in order to
increase the Gross Revenues of the System collected by the City and that such 1999 Project
will be in the best economic interest of the City.
(c) That the 1999 Project will serve a valid municipal purpose.
(d) That the cost of the 1999 Project shall be deemed to include, but not be limited
to, the cost of acquisition, construction, improving, renovating and equipping all or a portion of
the 1999 Project, the cost of any real or personal property necessary therefor; administrative
expenses; design, engineering and legal expenses; the fees and expenses of Bond Counsel;
the fees and reasonable expenses of counsel for the Bank; expenses for estimates of costs;
expenses for plans, specifications and licenses; and such other expenses as may be necessary
or incidental to the 1999 Project and the issuance of the 1999 Bonds herein authorized.
(e) That pursuant to the terms and provisions of the Original Resolution (as herein
defined), the City has heretofore issued and has now outstanding its Water and Sewer
Refunding Revenue Bonds, Series 1991 A and Series 1991 B, its Water and Sewer Revenue
Refunding Bonds, Series 1993 A and Series 1993 B and its Water and Sewer Revenue
Refunding Bonds, Series 1997 A (herein collectively, the "Prior Senior Obligations").
(f) That the principal of and interest on the 1999 Bonds shall be secured solely by
and paid from the Pledged Revenues (as herein defined); and the ad valorem taxing power of
the City will never be necessary or authorized to pay the principal of and interest on the 1999
Bonds, and the 1999 Bonds issued pursuant to this Resolution shall not constitute a lien upon
any other property whatsoever of or in the City.
(g) That the City, having previously solicited bids for the sale of the 1999 Bonds, has
determined that the best qualified bid for the 1999 Bonds was delivered by the Bank.
(h) That the negotiated sale of the 1999 Bonds to the Bank is in the best interest of
the City by reason of the nature of and schedule for the completion of the 1999 Project, the
aforementioned solicitation of bids, present market conditions and the subordinate nature of the
1999 Bonds.
(i) That the Agreement, in the form attached hereto as Exhibit A, is hereby
approved, with such omissions, insertions and variations as may be necessary and desirable,
as evidenced by the City's execution thereof and the Mayor (or in his absence, the Vice Mayor)
and City Clerk are hereby authorized to execute the same on behalf of the City.
(j) The City hereby designates the 1999 Bonds to be "qualified tax-exempt
obligations" within the meaning of Section 265(b) of the Code.
(k) That pursuant to the provisions of the Original Resolution and this Resolution,
the City may issue obligations on parity with the Prior Senior Obligations.
(I) That any capitalized term not otherwise defined herein, shall have the meaning
ascribed to such term in the Original Resolution.
SECTION 1.3 ~. That, in addition to terms defined elsewhere in this
Resolution, the following terms shall have the following meanings unless the context otherwise
clearly requires:
"Act" shall mean the Florida Constitution, Chapter 166, Florida Statutes, as amended
and supplemented, the Charter of the City of Delray Beach, Florida, as amended and
supplemented, and other applicable provisions of the law.
"Amortization Assumption" shall mean with respect to any Senior Obligation or Parity
Obligation issued pursuant to the provisions of the Original Resolution, this Resolution or any
other resolution of the City, that does not have scheduled amortization, the assumption that the
principal amount of such Senior Obligation or Parity Obligation is payable in substantially equal
amounts each year over the term of each Parity Obligation.
"Authorized investments" shall mean any of the following:
(1) U.S. Obligations;
(2) bonds, debentures, notes or other evidences of indebtedness payable in
cash issued by any one or a combination of any of the following federal agencies:
Farmer's Home Administration (or its successor), Federal Housing Administration,
Maritime Administration, Public Housing Authority, Government National Mortgage
Association;
(3) the following investments fully insured by the Federal Deposit Insurance
Corporation ("FDIC") (i) certificates of deposit, (ii) savings account, (iii) deposit accounts,
or (iv) depository receipts of a bank, savings and loan associations and mutual savings
bank;
(4) certificates of deposit, either in excess of FDIC insurance or without FDIC
insurance, properly secured at all times, by collateral secudty described in clause (1)
and (2) above or secured as required for a "qualified public depository" under the Florida
Security for Public Deposits Act, being Chapter 280, Florida Statutes, as amended, or
any successor statute. Such agreements are only acceptable with commercial banks,
savings and loan associations and mutual savings banks or other "qualified public
depository";
(5) commercial paper rated in one of the two highest rating categories by at
least two nationally recognized rating agencies or commercial paper backed by a letter
of credit or line of credit rated in one of the two highest rating categories;
(6) written repurchase agreements with any bank, savings institution or trust
company which is insured by the FDIC or with any broker dealer with retail customers
which falls under Securities Investors Protection Corporation protection, provided that
such repurchase agreements are fully secured by collateral security described in clause
(1) above, and provided further that (i) such collateral is held by the City or any agent
acting solely for the City during the term of such repurchase agreement, (ii) such
collateral is not subject to lien or claims of third parties, (iii) such collateral has a market
value (determined at least once every 14 days) at least equal to the amount invested in
the repurchase agreement, (iv) the City has a perfected first security interest in the
collateral, (v) the agreement shall be for a term not longer than 270 days, and (vi) the
failure to maintain such collateral at the level required in (iii) above will require the City to
liquidate the collateral;
(7) money market funds rated in the highest rating category of either
Standard & Poor's or Moody's Investors Service, or any successor thereto;
(8) investments in the Local Government Surplus Funds Trust Fund
established pursuant to Part IV of Chapter 218, Florida Statutes, as amended, or any
successor trust fund established for the investment of surplus municipal funds; and
(9) any other investments permitted under Flodda law and acceptable to the
Bank.
"Bank" shall mean SunTrust Bank, South Flodda, N.A., the initial Bondholder.
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"Bond Counsel" shall mean Greenberg Traurig, P.A. or any other firm of nationally
recognized bond counsel selected by the City.
"City" shall mean the City of Delray Beach, Florida, a municipal corporation in the
County of Palm Beach, State of Florida, and its successors and assigns.
"City Commission"" shall mean the duly constituted governing body of the City.
"Code" shall mean the Internal Revenue Code of 1986, as amended, the applicable
Treasury Regulations promulgated thereunder and any administrative or judicial interpretations
of the same published in a form on which the City may rely as a matter of law.
"Combined Public Utility" shall have the meaning ascribed to such term in Article I,
Section 3 of Part 1 of the Original Resolution.
"Debt Service Fund" shall mean the Delray Beach Subordinated Water and Sewer
Revenue Bond Debt Service Fund, created and established in this Resolution and which is the
fund in which the Pledged Revenues shall be deposited by the City for the payment of the 1999
Bonds in accordance with the provisions hereof.
"Defeasance Obligations" shall mean, to the extent permitted by law, the following
securities:
(1) U.S. Obligations which are not callable prior to maturity;
(2) Any bonds or other obligations of any state of the United States of
Amedca 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 (1) 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 (1) 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 the redemption date or dates specified in the irrevocable instructions referred
to in subclause (i) of this clause (2), as appropriate;
(3) Evidences of indebtedness issued by the Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation (including participation certificates), Federal
Financing Banks, or any other agency or instrumentality of the United States of America
created by an act of Congress provided that the obligations of such agency or
instrumentality are unconditionally guaranteed by the United States of America or any
other agency or instrumentality of the United States of Amedca or of any corporation
wholly-owned by the United States of America; and
(4) 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.
"Interest Rate" shall mean the rate of interest on the 1999 Bonds which, when calculated
on an actual 380-day year basis, shall be equal to four and two hundred fifty-six hundredths
percent (4.256%) per annum.
"Maturity Date" shall mean, with respect to the unpaid principal of and interest on the
1999 Bonds, October 1, 2008.
"1999 Bonds" shall mean the not to exceed $3,500,000 aggregate principal amount of
Water and Sewer Revenue Bonds, Subordinate Series 1999, authorized by this Resolution.
"Owner," "Bondholder" or "registered holder" or any similar term shall mean the Bank or,
subject to the provisions of Section 2.4 hereof, any successor registered holder of the 1999
Bonds; provided no Bondholder may be the registered owner of less than $1,000,000 in the
aggregate principal amount of the 1999 Bonds.
"Original Resolution" shall mean Resolution No. 39-88, adopted by the City Commission
on July 12, 1988, as amended and supplemented.
"Parity Obligations" shall mean any notes, bonds or other forms of indebtedness,
payable from the Pledged Revenues on padty with the 1999 Bonds, whether or not such
obligations are issued under this Resolution.
"Paying Agent" shall mean the City's Finance Department or, if the City Commission
shall so determine by subsequent proceeding, any bank or trust company and any successor
bank or trust company appointed by the City to act as Paying Agent hereunder.
"Payment Date" shall mean, with respect to interest on the 1999 Bonds, each April 1
and October 1, commencing October 1, 1999 and with respect to scheduled principal on the
1999 Bonds each October 1, commencing October 1, 2000, and on any date the principal of the
1999 Bonds is optionally prepaid in whole or in part, provided that if such date is a Saturday,
Sunday or legal holiday in Palm Beach County, Florida, the payment shall be made on the next
preceding business day for the period ending on the day prior to such Payment Date.
"Pledged Revenues" shall mean the Revenues of the Combined Public Utility remaining
each month after the deposits required by Article Ill, Section 4.D, Paragraphs 1 through 6 (but
with respect to Paragraph 6, only after repayment of any obligations owed to the providers of
any Reserve Account Credit Facility Substitute) of Part I of the Original Resolution have been
made by the City, subject in all respects to the prior lien on such moneys for the payment of
Senior Obligations, including moneys on deposit in the Debt Service Fund.
"Prior Senior Obligations" shall mean the City's outstanding Water and Sewer Revenue
Refunding Bonds, Series 1991 A and Series 1991 B, its Water and Sewer Revenue Refunding
Bonds, Sedes 1993 A and Sedes 1993 B and its Water and Sewer Revenue Refunding Bonds,
Series 1997 A.
"Registrar" shall mean the City's Finance Department or, if the City Commission shall so
determine by subsequent proceeding, any bank or trust company and any successor bank or
trust company appointed by the City to act as Registrar hereunder.
"Reserve Account Credit Facility Substitute" shall have the meaning ascribed to such
term in Article III, Section 4.D.4 of Part I of the Original Resolution.
"Resolution" shall mean this Resolution as the same may from time to time be amended
and supplemented in accordance with the terms hereof.
"Revenues" shall have the meaning ascdbed to such term in Article I, Section 3 of Part 1
of the Original Resolution.
"Senior Obligations" shall mean the Prior Senior Obligations and any oari passu
additional Bonds issued pursuant to the provisions of Section 4.G of Article III of Part I of the
Original Resolution, subject to the provisions of Section 3.8 of this Resolution.
"Tax Certificate" shall mean the Arbitrage Certificate of the City executed on the date of
initial delivery of the 1999 Bonds.
"U. S. Obligations" shall mean the direct obligations of, or obligations on which the timely
payment of principal and interest are unconditionally guaranteed by the United States of
America.
Words importing singular number shall include the plural number and vice versa, as the
case may be, and words importing persons shall include firms and corporations.
SECTION 1.4 RESOLUTION CONSTITUTES CONTRACT. In consideration of the
acceptance of the 1999 Bonds authorized to be issued hereunder by those who shall own the
same from time to time, this Resolution shall be deemed to be and shall constitute a contract
between the City and the Bondholders and the covenants and agreements herein and therein
set forth to be performed by said City shall be for the benefit, protection and security of the
Bondholders.
ARTICLE II
AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF 1999 BONDS
SECTION 2.1 AUTHORIZATION OF 1999 BOND,~I Subject and pursuant to the
provisions of this Resolution, obligations of the City of Delray Beach, Florida, to be known as
"Water and Sewer Revenue Bonds, Subordinate Series 1999' are hereby authorized to be
issued in the aggregate principal amount of not exceeding Three Million Five Hundred
Thousand Dollars ($3,500,000) for the purpose of financing the costs of the 1999 Project.
SECTION 2.2 DESCRIPTION OF 1999 BONDR. The text of the 1999 Bonds shall
be substantially in the form attached hereto as Exhibit B with such omissions, insertions and
variations as may be necessary and desirable, as evidenced by the City's execution thereof.
The 1999 Bonds (initially issued in one (1) typewritten certificate) shall be dated the date
of initial issuance. The 1999 Bonds shall bear interest on the outstanding principal amount of
the 1999 Bonds from time to time at the Interest Rate and shall be payable on each Payment
Date, commencing October 1, 1999. Principal of the 1999 Bonds shall be payable on each
October 1 commencing October 1, 2000, in the amounts set forth below, if $3,500,000 in 1999
Bonds are issued. All unpaid principal of the 1999 Bonds and all accrued and unpaid interest
on the 1999 Bonds shall be payable on the Maturity Date. The 1999 Bonds shall be issued in
registered form.
Date Amount
2000 $ 270,000
2001 405,000
2002 420,000
2003 360,000
2004 375,000
2005 390,000
2006 410,000
2007 425,000
2008 445.000
TOTAL $3.500.000
Principal and interest on the 1999 Bonds shall be payable at the office of the Paying
Agent (the designated corporate trust office of the Paying Agent if the City's Finance
Department is not the Paying Agent). The 1999 Bonds shall be numbered in such manner as
may be prescribed by the Registrar.
The 1999 Bonds shall be payable, with respect to interest and principal, in any coin or
currency of the United States of America which at the time of payment is legal tender for the
payment of public and private debts.
The City may prepay the 1999 Bonds in whole or in part, at any time or from time to
time, without penalty or premium, by paying to the registered holder ail or part of the principal
amount of the 1999 Bonds, together with the unpaid interest accrued on the amount of principal
so prepaid to the date of such prepayment. Each prepayment shall be made on such date and
in such principal amount as shall be specified by the City in a written notice delivered to the
registered owner not less than two (2) business days prior thereto. If such prepayment shall be
for only a portion of the unpaid principal balance of the 1999 Bonds, the City shall provide in
such written notice, which future amortization installments shall be reduced as a result of such
prepayment. Notice having been given as aforesaid, the principal amount stated in such notice
or the whole thereof, as the case may be, shall become due and payable on the prepayment
date stated in such notice; and the amount of principal shall be paid (i) in case the entire unpaid
balance of the principal of the 1999 Bonds is to be paid, upon presentation and surrender of the
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1999 Bond or 1999 Bonds to the office of the Paying Agent (the designated corporate trust
office, if the Paying Agent is not the City's Finance Department), and (ii) in case only part of the
unpaid balance of principal of the 1999 Bonds is to be paid, upon presentation of such 1999
Bond or 1999 Bonds at the office of the Paying Agent (the designated corporate trust office, if
the Paying Agent is not the City's Finance Department) for notation thereon of the amount of
principal then paid or for issuance of a replacement 1999 Bond in the principal amount not
redeemed. Notwithstanding the provisions of clause (ii) above, if all of the 1999 Bonds are
registered in the name of the Bank, a partial prepayment may be effected by payment to the
Bank of the principal, together with unpaid interest accrued thereon, without surrender of the
1999 Bonds. If, on the prepayment date, funds for the payment of the principal amount to be
prepaid, together with unpaid interest accrued thereon, shall not have been provided to the
Paying Agent, as above provided, the principal amount of the 1999 Bonds shall continue to be
outstanding and to bear interest until payment thereof at the Interest Rate.
SECTION 2.3 EXECUTION OF THE 1999 BONDR. The 1999 Bonds shall be
executed in the name of the City by the signature of the Mayor or Vice Mayor of the City and its
official seal shall be affixed thereto or imprinted or reproduced thereon and attested by the City
Clerk. The signatures of the Mayor or Vice Mayor of the City and City Clerk on the 1999 Bonds
may be manual or facsimile signatures. In case any one or more of the officers who shall have
signed or sealed the 1999 Bonds shall cease to be such officer of the City before the 1999
Bonds so signed and sealed shall have been actually sold and delivered, such 1999 Bonds may
nevertheless be sold and delivered as herein provided and may be issued as if the person who
signed or sealed such 1999 Bonds had not ceased to hold such office. The 1999 Bonds may
be signed and sealed on behalf of the City by such person who at the actual time of the
execution of the 1999 Bonds shall hold the proper office, although at the date the 1999 Bonds
shall be actually delivered such person may not have held such office or may not have been so
authorized.
The 1999 Bonds shall bear thereon a certificate of authentication, in the form set forth
on Exhibit B attached hereto, executed manually by the Registrar (when the City's Finance
Department shall act as Registrar, the certificate of authentication shall be manually executed
by the City's Finance Director). Only the 1999 Bonds as shall bear thereon such certificate of
authentication shall be entitled to any right or benefit under this Resolution and no 1999 Bonds
shall be valid or obligatory for any purpose until such certificate of authentication shall have
been duly executed by the Registrar. The certificate of authentication of the Registrar upon the
1999 Bonds executed on behalf of the City shall be conclusive evidence that the 1999 Bonds so
authenticated have been duly authenticated and delivered under this Resolution and that the
Owner thereof is entitled to the benefits of this Resolution.
SECTION2.4 NEGOTIABILITY. REGISTRATION AND CANCELLATION, The
Registrar shall keep books for the registration of the 1999 Bonds and for the registration of
transfers of the 1999 Bonds. The 1999 Bonds shall be transferable at the option of the
registered Owner thereof to an institutional holder, but subject to the prior written approval of
the City's Director of Finance (which shall not be unreasonably withheld if the intended
transferee provides a suitability letter addressed to the City as to the sophistication of the
investor) unless such institutional holder is a bank or trust company, or unless such institutional
holder, which is not a bank or trust company, certifies in writing to the City prior to the transfer
that it is an accredited investor within the meaning of Rule 501 of the Securities Act of 1933, as
amended and supplemented, in which case such approval shall not be required, and upon
surrender thereof at the office of the Registrar (the designated corporate trust office of the
Registrar if the City's Finance Department is not the Registrar) with a written instrument of
transfer satisfactory to the Registrar duly executed by the registered Owner or his duly
authorized attorney. Upon the transfer of such 1999 Bond, the City shall issue in the name of
the transferee a new 1999 Bond.
The City, the Paying Agent and the Registrar shall deem and treat the person in whose
name the 1999 Bonds shall be registered upon the books kept by the Registrar as the absolute
Owner of such 1999 Bonds, whether such 1999 Bonds shall be overdue or not, for the purpose
of receiving payment of, or on account of, the principal of and interest on such 1999 Bonds as
the same become due and for all other purposes. All such payments so made to any such
Owner or upon his/her order shall be valid and effectual to satisfy and discharge the liability
upon such 1999 Bonds to the extent of the sum or sums so paid, and neither the City, the
Paying Agent nor the Registrar shall be affected by any notice to the contrary.
In all cases in which the privilege of transferring the 1999 Bonds is exercised, the City
shall execute and the Registrar shall authenticate and deliver the 1999 Bonds in accordance
with the provisions of this Resolution. The 1999 Bonds surrendered in any such transfers shall
forthwith be delivered to the Registrar and canceled by the Registrar in the manner provided in
this Section. The City or the Registrar (if not the City's Finance Department) may require the
payment of a sum sufficient to pay any tax, fee or other governmental charges required to be
paid with respect to such transfer.
The 1999 Bonds paid or redeemed, in whole, either at or before maturity, shall be
delivered to the Registrar when the payment or redemption is made, and such 1999 Bonds
shall thereupon be promptly canceled. The 1999 Bonds so canceled may at any time be
destroyed by the Registrar, who shall execute a certificate of destruction in duplicate by the
signature of one of its authorized officers describing the 1999 Bonds, and one executed
certificate shall be filed with the City and the other executed certificate shall be retained by the
Registrar (if not the City's Finance Department).
SECTION 2.5 MUTILATED. DESTROYED. STOLEN OR LOST 1999 BQpd~ In
case any 1999 Bond shall become mutilated, destroyed, stolen or lost, the City shall execute
and the Registrar shall authenticate and deliver a new 1999 Bond of like date, maturity and
denomination as the 1999 Bond so mutilated, destroyed, stolen or lost; provided that, in the
case of any mutilated 1999 Bond, such mutilated 1999 Bond shall first be surrendered to the
City and, in the case of any lost, stolen or destroyed 1999 Bond, there shall first be furnished to
the City and the Registrar (if not the City's Finance Department) evidence of such loss, theft, or
destruction satisfactory to the City and the Registrar, together with indemnity satisfactory to
them. in the event the 1999 Bonds shall be about to mature or have matured, instead of
issuing a duplicate 1999 Bond, the City may pay the same without surrender thereof. The City
and the Registrar (if not the City's Finance Department) may charge the Owner of such 1999
Bond their reasonable fees and expenses in connection with this transaction. Any 1999 Bonds
surrendered for replacement shall be canceled in the same manner as provided in Section 2.4
hereof.
Any such duplicate 1999 Bond issued pursuant to this Section shall constitute additional
contractual obligations on the part of the City, whether or not the lost, stolen or destroyed 1999
Bond be at any time found by anyone, and .such duplicate 1999 Bonds shall be entitled to equal
proportionate benefits and dghts as to lien on the source and security for payment from
Pledged Revenues with the 1999 Bond issued hereunder.
SECTION 2.6 CONDITIONS FOR ISSUANCE OF THE 1999 BONDS. Prior to the
issuance of the 1999 Bonds, the City shall comply with the following conditions:
(a) Deliver to the Bank a fully executed Tax Certificate; and
(b) Deliver to the Bank a copy of a completed and executed Form 8038-G to be filed
by the City with the Internal Revenue Service; and
(c) Deliver to the Bank an opinion of Bond Counsel, satisfactory to the Bank,
regarding the due authorization, execution, delivery, validity and enforceability of the 1999
Bonds and the due adoption of this Resolution (enforceability of such instruments may be
subject to standard bankruptcy exceptions and the like) and the exclusion of interest on the
1999 Bonds from gross income for federal income tax purposes, that the 1999 Bonds are not
specified "private activity bonds" within the meaning of Section 57(a)(5) of the Code and,
therefore, the interest on the 1999 Bonds will not be treated as a preference item for purposes
of computing the alternative minimum tax imposed by Section 55 of the Code (however, a
portion of the interest on the 1999 Bonds owned by corporations may be subject to the federal
alternative minimum tax which is based in part on adjusted current earnings). Such opinion
shall also state that the 1999 Bonds are "qualified tax-exempt obligations" within the meaning of
Section 265(b) of the Code; and
(d) Deliver to the Bank an opinion of the City Attorney, satisfactory to the Bank,
regarding the due authorization, execution, delivery, validity and enforceability of the 1999
Bonds, the Agreement and the due adoption of this Resolution (enforceability may be subject to
standard bankruptcy exceptions and the like); and
(e) Deliver to the Bank one or more certificates of the City in form satisfactory to the
Bank certifying, among other things, that the City is in compliance with the term of the Original
Resolution.
To the extent that the City does not issue all of the $3,500,000 in principal amount of
1999 Bonds at the time of initial issuance, the City shall provide written notice to the Bank
(signed by the City Manager, Finance Director or Treasurer of the City) of the City's intention to
draw additional amounts under the Agreement at least two (2) business days prior to the date
the City intends to receive the funds. Such notice shall confirm that the City is in compliance
with terms and provisions of this Resolution and the Original Resolution. Such additional
amounts drawn under the Agreement shall constitute additional principal amount of 1999 Bonds
without any further action required.
WPB/SAN FORDS/223125/4sSxO3LDOC/6/03/?,9/99999.426594 1 1
ARTICLE III
COVENANTS, FUNDS AND APPLICATION THEREOF
SECTION 3.1 1999 BONDS NOT TO BE INDEBTEDNESS OF THE CITY. The
1999 Bonds 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 Pledged Revenues. No Bondholder 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 said 1999 Bonds or the interest thereon. The pledge of the Pledged Revenues
will not constitute a lien upon any property of the City.
SECTION 3.2 1999 BONDS JUNIOR AND SUBORDINATE TO SENIOI~
~. The lien of the 1999 Bonds on the Pledged Revenues shall be junior and
subordinate, as to the lien of the Senior Obligations on the Revenues of the Combined Public
Utility and in all other respects, to the pledge and lien granted to the Senior Obligations.
SECTION 3.3 1999 BONDS SECURED BY PLEDGE OF PLEDGED REVENUES.
From and after the issuance of any of the 1999 Bonds, and continuing until the payment of all
1999 Bonds as to principal and interest, the Pledged Revenues shall continue to be pledged for
the prompt payment of principal of and interest on said 1999 Bonds.
SECTION 3.4 COVENANTS OF THE CITY. As long as any of the principal of or
interest on any of the 1999 Bonds shall be outstanding and unpaid, or until there shall have
been set apart in the Debt Service Fund in accordance with Section 3.7 hereof a sum sufficient
to pay, when due, the entire principal of the 1999 Bonds remaining unpaid, together with
interest accrued and to accrue thereon, the City covenants with the Bondholders as follows:
(f) Tax Covenants Relating to the Internal Revenue Code of 1986, as amended.
(1) In order to maintain the exclusion from gross income for purposes of
federal income taxation of interest on the 1999 Bonds, the City covenants to comply with each
requirement of the Code. In furtherance of the covenant contained in the preceding sentence,
the City agrees to continually comply with the provisions of the Tax Certificate, as such
certificate may be amended from time to time, as a source of guidance for achieving
compliance with the Code.
(2) The City covenants and agrees with the Bondholders that the City shall
not take any action or omit to take any action, which action or omission, if reasonably expected
on the date of initial issuance and delivery of the 1999 Bonds, would cause any of the 1999
Bonds to be "private activity bonds" or "arbitrage bonds" within the meaning of Sections 141(a)
and 148(a), respectively, of the Code.
(3) The City shall make any and all payments required to be made to the
United States Department of the Treasury in connection with the 1999 Bonds pursuant to
Section 148(f) of the Code.
(4) Notwithstanding any other provision of this Resolution to the contrary, so
long as necessary in order to maintain the exclusion from gross income for purposes of federal
income taxation of interest on the 1999 Bonds, the covenants contained in this Section shall
WPB/$ANFORDS/2'23125/4SSXO31.DOC/6/03/99/~9999.426594 12
survive the payment of the 1999 Bonds and the interest thereon, including any payment or
discharge thereof pursuant to Section 3,7 of this Resolution.
(g) Creation of Debt Service Fund. The City hereby creates and establishes the
"Delray Beach Subordinate Water and Sewer Revenue Bond Debt Service Fund" (hereinafter
referred to as the "Debt Service Fund"). The Debt Service Fund shall constitute a trust fund for
the benefit of the Bondholder and shall be held by the City and shall be kept separate and
distinct from all other funds of the City, and shall be used only for the purpose and in the
manner provided in this Resolution. Notwithstanding the provisions of the next preceding
sentence, the City may deposit the Net Revenues (as such term is defined in the Original
Resolution) in a single bank account for the City, provided that adequate accounting procedures
are maintained to reflect and control the restricted allocations of the funds on deposit therein for
the various purposes of such funds. The designation and establishment of the Debt Service
Fund in and by this Resolution shall not be construed to require the establishment of any
completely independent self-balancing fund, as such term is commonly defined and used in
governmental accounting, but rather is intended solely to constitute an allocation of certain
revenues of the City for certain purposes and to establish certain priorities for application of
such revenues as provided herein.
Any excess amounts remaining in the Debt Service Fund after payment has been made
on the 1999 Bonds on any Payment Date, may be withdrawn and deposited at the direction of
the City to be used for any lawful municipal purpose provided for in the Original Resolution.
Moneys on deposit in the Debt Service Fund may be invested in Authorized
Investments, provided such investments mature not later than the next succeeding Payment
Date. Subject to the terms and provisions of the Code, all income and earnings received from
the investment and reinvestment of the moneys on deposit in the Debt Service Fund shall
remain on deposit in the Debt Service Fund and be used in the same manner as other moneys
on deposit therein.
(h) Disposition of Pledged Revenues. Not later than the fifteenth day of each
month commencing July 15, 1999, the City shall deposit in the Debt Service Fund Revenues,
subject to and dependent upon satisfaction of all current deposit requirements of such
Revenues set forth in Article III, Section 4.D, Paragraphs 1 through 6 (but with respect to
Paragraph 6, only after repayment of any obligations owed to the providers of a Reserve
Account Credit Facility Substitute) of Part I of the Original Resolution, in an amount equal to
one-third (1/3'd) of the interest becoming due on the 1999 Bonds on October 1, 1999 and
commencing on October 15, 1999, an amount equal to one-sixth (1/6th) of the interest becoming
due on the 1999 Bonds on the next Payment Date and commencing on October 15, 1999, an
amount equal to one-twelfth (1/12th) of an amount sufficient to pay the principal becoming due
on the 1999 Bonds on the next October 1 Payment Date, and shall further deposit into the Debt
Service Fund one business day prior to each Payment Date Revenues in an amount necessary
to satisfy any deficiency in the Debt Service Fund on such date; provided, however, that such
deposit of the interest and principal amount shall not be required to be made to the extent that
moneys on deposit in the Debt Service Fund are sufficient for such purpose. The City
covenants to deposit, on the business day prior to the Maturity Date, Revenues (or other legally
available moneys) into the Debt Service Fund in an amount sufficient to pay the outstanding
principal of and interest on the 1999 Bonds.
WPB/SANFORDSI22312514sSxO31.DOC/6/O3j99J99999.426594 13
(i) Revenues. The City will not repeal, amend or modify any resolution or
ordinance relating to the collection of Revenues from its operations of the Combined Public
Utility in any manner so as to (i) impair or adversely affect the power and obligation of the City
to collect the rates, fees, rentals and charges which generate such Revenues, (ii) impair or
adversely affect in any manner the pledge of the Pledged Revenues made herein, or (iii) reduce
the rates, fees, rentals and charges from persons from whom such rates, fees, rentals and
charges are collected.
Enforcement of Collections. The City will diligently enforce and collect
Revenues, will take steps, actions and proceedings for the enforcement and collection of such
Revenues as shall become delinquent to the full extent permitted under the Original Resolution
or authorized by law, and will maintain accurate records with respect thereof.
(k) Budget and Other Financial Information. The City shall demonstrate in each
annual budget that there are sufficient Net Revenues to pay the principal of and interest on the
1999 Bonds and Senior Obligations coming due in such fiscal year and to comply with the rate
covenant set forth in Section 3.9 hereof. The City shall, upon the request of the Bank, provide
the Bank with a copy of its annual budget within thirty (30) days of adoption, a copy of its
Comprehensive Annual Financial Report, when available and, upon the request of the Bank,
such other financial information regarding the City as the Bank may reasonably request.
(I) The City shall comply with the terms of the Original Resolution.
SECTION 3.5 REMEDIES OF BONDHOLDER. Subject to the provisions of Section
4 of the Agreement and the prior rights of the holders of the Senior Obligations, should the City
default in any obligation created by this Resolution, the Bondholders may, in addition to any
remedy set forth in this Resolution, 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 and contained in this Resolution, and may enfome
and compel the performance of all duties required by this Resolution, or by any applicable
statutes to be performed by the City or by any officer thereof. The City hereby agrees with the
Bondholders that the filing of any bankruptcy or insolvency under any federal or state law by or
against the City which is not dismissed with prejudice within thirty (30) days of such filing shall
give the Bondholders the right to exercise any of the remedies provided to them under this
Section 3.5, subject in all cases to the prior rights of the holder of the Senior Obligations. In
addition, if the City shall breach any of its obligations set forth in the Original Resolution the
Bondholders will have the right to exercise any of the remedies provided to them under this
Section 3.5. Notwithstanding anything in this Section 3.5 to the contrary the Bondholders' right
to exercise any remedy permitted hereunder shall be subordinate in all respect to the rights of
the owners of the Senior Obligations.
SECTION 3.6 APPLICATION OF 1999 BONDS PROCEEDS. The proceeds of the
1999 Bonds shall be used to finance the costs of the 1999 Project. The City may replace all or
a portion of the 1999 Project for any other capital project permitted under the Act; provided that
Bond Counsel shall first deliver to the City and the Bank an opinion to the effect that such
substitution will not adversely affect the exclusion of interest on the 1999 Bonds from gross
income for federal income tax purposes and the Bank consents to such substitution.
SECTION3.7 DISCHARGE AND SATISFACTION OF 1999 BOND,~. The
covenants, liens and pledges entered into, created or imposed pursuant to this Resolution may
be fully discharged and satisfied with respect to the 1999 Bonds in any one or more of the
following ways:
(al by paying the principal of and interest on the 1999 Bonds when the same shall
become due and payable; or
lb) by depositing in the Debt Service Fund or such other accounts as the City may
hereafter create and establish by resolution moneys sufficient at the time of such deposit to pay
the 1999 Bonds and all interest thereon as the same become due on &aid 1999 Bands on or
prior to the matudty date thereof; er
(o) by depositing in the Debt Service Fund or such other accounts as the City may
hereafter create and establish by resolution (which Debt Service Fund or other account and all
moneys and securities deposited therein shell be irrevocably pledged to the Bondholders for the
payment of the 1999 Bonds and all interest thereon) moneys which, when invested in
Defeasance Obligations, will provide moneys which shall be sufficient to pay the lg99 Bonds
and, all interest thereon as the same shall become due on said 1999 Bonds on or prior to the
Maturity Date thereof. Upon such payment or deposit in the amount and manner provided in
this ~ection 3.7, the 1~99 Bonds shall no longer be deemed to be outstanding for the purposes
of this Resolution and all liability of the City with respect to the payment of the principal of or
interest on the 1999 Bonds from Pledged Revenues 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.
SECTION3.8 ADDITIONAL OBLIGATIONS. The City covenants with the
Bondholders that as tong as the 1999 Bonds issued under this Resolution are outstanding, it will
not issue any Senior Obligations or any Parity Obligations (collectively referred to as 'Water
and Sewer Debt'} unless the following conditions are complied with.
(al The City must be current in ail cleposlts Into the various funds and accounts and
all payments required to have been theretofore deposited or made by it onder the provisions of
the Original Resolution and this Resolution, and any supplemental resolutions hereafter
adopted far the issuance of Water and Sawer Debt, and has complied with the covenants and
provisions of the Original Resolution and this Resolution, and any supplemental resolutions
hereafter adopted for tlqe Issuance of Water and Sewer Debt,
lb) The Revenues collected by the City ~'rom the operation of its Combined Public
Utility during any twelve (12) consecutive months of the eighteen (18) months immediately
preceding the issuance of said Water and Sewer Debt, as evidenced by a certificate executed
by the Finance Director of thc City and a~ may be adjusted, as hereinafter provided, will be
equal to one hundred twenty per centum (120%) ef the maximum annual debt service on (1) the
Senior Obligations issued pursuant to the Original Resolution than outstanding. (2) the
outstanding 1999 Bonds heretofore issued, less any repayments of principal made by the City,
and (3) the Water and Sewer Debt then proposed to be Issued; provided that for the purpose of
determining the maximum annual debt service under this Section, the interest rate on variable
or adjustable rate Water and Sewer Debt then outstanding shall be the greater of (il the
average daily interest rate on such variable or adjustable rate Water and Sewer Debt during the
preceding Fiscal Year, or (ii) the actual rate of interest applicable to such variable or adjustable
rate Water and Sewer Debt on the date of issuance of such variable or adiustable rate Water
and Sewer Debt; and provided further, that if vadable or adjustable rate Water and Sewer Debt
is to be issued, the interest rate thereon for purposes of this paragraph shall be calculated in
accordance with the 30-year Revenue Bond Index, as published by ~ as of the
last week of the month preceding the date of issuance of such variable or adjustable rate Water
and Sewer Debt, er if that index is no longer published, the interest rate as of the last week of
such month, as published in an index that Is deemed to be substantially equivalent. If the City,
prior to the issuance of the proposed Water and Sewer Debt shall have, by amendment or
supplement to the Original Resolution increased its rates, fees and charges te be collected, the
Revenues for the twelve (12) consecutive month~ immediately preceding the i~suance of the
Water and Sewer Debt shall be adjusted to include the Revenues which would have been
collected by the City in such twelve (12) consecutive months as if such increase in the rates,
fees and charge~ have bean in effect during all of such twelve (12) consecutive months.
lc) In the event any Water and Sewer Debt is issued for the purpose of refunding
any Water and Sewer Debt then outstanding, the condition of paragraph lb) above shall not
apply, provided that the issuance of such Water and 8ewer Debt shall result in a reduction er
shall not increase the annual debt service payments in any year over the life of the Water and
Sewer Debt so refunded.
For purposes of paragraph lb) set forth above, the principal component of the maximum
annual debt service on any outstanding Water and Sewer Debt er Water and Sewer Debt
proposed to be issued where prin~pal is payable only at final maturity shall be determined by
using the Amortization Assumption.
SECTION 3.9, ~. Notwithstanding any provision in Article III,
~ection 4.B of Patti of the Original Resalutinn, the City covenants, for as long as the 1999
Bonds remain outstanding, to fix, establish and maintain such rates and collect such fees,
rentals or other cr~arges for the services and facilities of its Combined Public Utility, and review
the same from time to time whenever necessary, as will always provide in each fiscal year of
the City, commencing October 1, 1999, Net Revenues which shall be adequate to pay at least
one hundred ten percent (110%) of the Annual Debt Service (as such term is defined in the
Original Resolution) on any Senior Bonds, the 1999 Bond5 and any Parity Obligations.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.1 MODIFICATION OR AMENDMENT. No modification or amendment
of this Resolution or of any resolution amendatory thereof or supplemental thereto, may be
made without the consent in wdtincj of all nf the Bondholders.
SECTION 4.2 ADDITIONAL AUTHORIZATION. The Mayor. the Vice-Mayor, the
City Manager, the Finance Director, the Treasurer and any other proper official of the City, be
and each of them is hereby authorized and directed to execute and deliver any and all
documents and instruments and to do and cause to be done any and all acts and things
necessary or proper for carzying out the transactions contemplated by this Resolution.
SECTION 4.3 SEVERABILITY OF INVALID PROVISIONS. If any one or more of
the covenants, agreements or provisions of this Resolution should be held contrary to any
express provision of law or contrary to the policy of express law, though not expressly
prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then
such covenants, agreements or provisions shall be null and void and shall be deemed separate
from the remaining covenants, agreements or provisions, and shall in no way affect the validity
of any of the other provisions of this Resolution or of the lg99 Bonds issued hereunder.
SECTION 4.4 REPEALER. All resolutions and orders, or parts thereof, in conflict
herewith are, to the extent of such conflict, hereby repealed, and this Resolution shall take
effect upon its passage in the manner provided by law.
SECTION 4.5
upon its adoption.
~[~L~. This Resolution shall be effective immediately
PASSED AND ADOPTED IN regular session on this 8= day of June, 1999.
Attest:
The foregoing resolution and the form of
1999 Bond therein contained are hereby
approved by me as to form, language and
execution this 8~ day of June, 1999.
EXHIBIT A
LINE OF CREDIT AGREEMENT
Dated as of June 1, 1999
WHEREAS, SunTrust Bank, South Florida, N.A. (the "Bank"), has offered to make a
closed-end line of credit (the "Line of Credit') available to the City of Delray Beach, Florida (the
"City"), in the principal amount of not exceeding $3,500,000 under which the City may, from
time to time, make drawings; and
WHEREAS, the City of Commission of the City of Delray Beach, Florida on June 8,
1999, adopted Resolution No. 33-99 (the "1999 Bond Resolution") authorizing the issuance of
not exceeding $3,500,000 in aggregate principal amount of City of Delray Beach, Florida Water
and Sewer Revenue Bonds, Subordinate Series 1999 (the "1999 Bonds") which 1999 Bonds
shall represent the City's obligation to reimburse the Bank for drawings made under the Line of
Credit; and
WHEREAS, the City and the Bank find it necessary to enter into this Agreement, to
acknowledge the terms and provisions of the 1999 Bond Resolution adopted by the City and
the extension of the Line of Credit by the Bank.
NOW THEREFORE, the City and the Bank hereby agree as follows:
1. That the Bank shall make immediately available to the City, pursuant to the
terms and provisions of the 1999 Bond Resolution, the Line of Credit in an aggregate principal
amount of not exceeding $3,500,000 which shall be available to the City in one or more
drawings prior to September 1, 1999.
2. That the Line of Credit shall expire on August 31, 1999. The outstanding
principal amount of all drawings with interest thereon, shall become due and payable in
accordance with the terms and provisions of the 1999 Bond Resolution.
3. That the Bank hereby accepts the terms and conditions set forth in the 1999
Bond Resolution applicable to the Line of Credit.
4. The City and the Bank, for mutual consideration, each acknowledged to be
received by the other party hereto, mutually and willingly waive the right to a trial by a jury in
connection with any and all claims by any party hereto against the other arising from or in
connection with the transactions contemplated by this Agreement or the 1999 Bond Resolution.
WPB/SANFORDS/223125/4sSxOSLDOC/6103/99/99999.426594 A-1
5. The Bank represents to the City that it is not purchasing the 1999 Bonds with a
view to distributing the 1999 Bonds; provided, however, that the Bank, in its sole discretion,
shall be permitted to assign or participate all or a portion of the 1999 Bonds to any other
financial institution or accredited investor (subject to the requirements of Section 2.4 of the 1999
Bond Resolution).
SUNTRUST BANK, SOUTH FLORIDA, N.A.
(SEAL)
By:
Title:
Date: June ,1999
CITY OF DELRAY BEACH, FLORIDA
Attest
By:.
Title:
Dated: June ,1999
City Clerk
W p B/SA N FO R DS/223125/4~SxO3t. DOC/6/g3/99/99999.426594 A-2
EXHIBIT B
FORM OF 1999 BOND
No. R;
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF DELRAY BEACH, FLORIDA
Water and Sewer Revenue Bond, Subordinate Series 1999
Interest Rate Matt!fity_.g_a~ ~
4.256% October 1, 2008 June ,1999
REGISTERED OWNER: .............. -SUNTRUST BANK, SOUTH FLORIDA, N.A.- ................
PRINCIPAL AMOUNT:-THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000)-
KNOW ALL MEN BY THESE PRESENTS, that the City of Delray Beach (the "City") in
Palm Beach County, Florida, for value received, hereby promises to pay from the sources
herein mentioned, to the Registered Owner specified above or registered assigns on the
Maturity Date specified above or earlier upon mandatory prepayment as provided below, upon
the presentation and surrender hereof at the City's Finance Department or (if so determined by
the City) the designated trust office of the bank or trust company appointed by the City to act as
paying agent (said City's Finance Department or such bank or trust company and any bank or
trust company becoming successor paying agent being herein celled the "Paying Agent"), the
Principal Amount stated above with interest thereon at the Interest Rate specified above in the
manner provided in the Bond Resolution) calculated on the basis of the actual number of days
elapsed in a 360-day year, on each Payment Date in the manner specified in the within
described Resolution to the registered owner. The Principal Amount and accrued interest
thereon is payable in any coin or currency of the United States of America, which, on the date
of payment thereof, shall be legal tender for the payment of public and private debts.
This Bond is authorized to be issued in a principal amount of $3,500,000 under the
authority of and in full compliance with the Constitution and statutes of the State of Florida,
including, particularly, Chapter 166, Florida Statutes, as amended and supplemented, the
Charter of the City of Delray Beach, Florida, as amended and supplemented, and other
applicable provisions of law (the "Act"), and Resolution No. 33-99, duly adopted on June 8,
1999 (the "Bond Resolution"), as such resolution may be further amended and supplemented
from time to time, and is subject to all terms and conditions of said resolution. Any term used in
this Bond and not otherwise defined, shall have the meaning ascribed to such term in the Bond
Resolution.
It is hereby certified and recited that all acts, conditions and things required to exist, to
happen, and to be performed, precedent to and in the issuance of this Bond exist, have
happened and have been performed in regular and due form and time as required by the Laws
WPB/SANFORDS/223125/4sSxO31.DOC/6/03/99/99999.426594 B-1
and Constitution of the State of Flodda and the Charter of the City applicable thereto, and that
the issuance of this Bond, is in full compliance with ali constitutional or statutory limitations or
provisions.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Resolution until the certificate of authentication hereon shall
have been signed by an authorized officer of the Registrar.
This Bond shall bear interest at the Interest Rate stated above.
Interest shall be payable on October 1, 1999, and each April 1 and October 1 thereafter
and principal on the Bonds shall be payable each October 1 commencing October 1, 2000 in
the amounts set forth below as such amounts may be adjusted as provided in the Bond
Resolution until the outstanding principal of the Bonds have been paid; provided that if such
date is a Saturday, Sunday or legal holiday in Palm Beach County, Florida, the payment shall
be made on the next preceding day that is not a Saturday, Sunday or legal holiday in Palm
County, Florida (each a "Payment Date") as provided in the Bond Resolution. The principal of
and interest on the Bonds shall be secured solely by and payable from the Pledged Revenues
(as defined below).
Date Amount
20O0 $ 27O,00O
2001 405,000
2002 420,000
2003 360,000
2004 375,000
2005 390,000
2006 410,000
2007 425,000
2008 445.000
TOTAL $3.500.000
"Original Resolution" shall mean Resolution No. 39-88, adopted by the City Commission
on July 12, 1988, as amended and supplemented.
"Pledged Revenues" shall mean the Revenues of the Combined Public Utility remaining
each month after the deposits required by Article III, Section 4.D, Paragraphs 1 through 6 (but
with respect to Paragraph 6, only after repayment of any obligations owed to the providers of
any Reserve Account Credit Facility Substitute) of Part I of the Original Resolution have been
made by the City, subject in all respects to the prior lien on such moneys for the payment of
Senior Obligations including moneys on deposit in the Debt Service Fund.
The City may prepay this Bond in whole or in part, at any time or from time to time,
without penalty or premium, by paying to the registered holder all or part of the principal amount
of this Bond, together with the unpaid interest accrued on the amount of principal so prepaid to
W P B/SA N FO R DS/223125/4sS~D31.DOC/6/03/99/99999.426594 B-2
the date of such prepayment. Each prepayment shall be made on such date and in such
principal amount as shall be specified by the City in a wdtten notice delivered to the registered
owner not less than two (2) business days prior thereto. Notice having been given as aforesaid,
the principal amount stated in such notice or the whole thereof, as the case may be, shall
become due and payable on the prepayment date stated in such notice; and the amount of
principal shall be paid (i) in case the entire unpaid balance of the principal of this Bond is to be
paid, upon presentation and surrender of the Bond to the office of the Paying Agent (designated
corporate trust office, if the Paying Agent is not the City's Finance Department), and (ii) in case
only part of the unpaid balance of principal of this Bond is to be paid, upon presentation of such
Bond at the office of the Paying Agent (designated corporate trust office, if the Paying Agent is
not the City's Finance Department) for notation thereon of the amount of principal then paid or
for issuance of a replacement Bond in the principal amount not redeemed. Notwithstanding the
provisions of clause (ii) above, if all of the Bonds are registered in the name of the Bank, a
partial prepayment may be effected by payment to the Bank of the principal amount to be
redeemed without surrender of this Bond. If, on the prepayment date, funds for the payment of
the principal amount to be prepaid, together with unpaid interest accrued thereon, shall not
have been provided to the Paying Agent, as above provided, the principal amount of this Bond
shall continue to be outstanding and to bear interest until payment thereof at the Interest Rate
provided for herein.
This Bond shall not be and shall not constitute an indebtedness of the City within the
meaning of any constitutional, statutory, charter or other limitations of indebtedness but shall be
secured solely by and payable from the Pledged Revenues. No Holder of this Bond shall ever
have the right to compel the exercise of ad valorem taxing power of the City, or taxation in any
form of any real property therein to pay the Bond or the interest thereon.
The terms and provisions of the Bond Resolution are incorporated in this Bond as
though such terms and provisions have been set out in full herein.
THE LIEN GRANTED IN FAVOR OF THE REGISTERED OWNER OF THIS BOND ON
THE NET REVENUES (AS SUCH TERM IS DEFINED IN THE ORIGINAL RESOLUTION)
SHALL BE JUNIOR AND SUBORDINATE AS TO THE LIEN GRANTED IN FAVOR OF THE
HOLDERS OF THE SENIOR OBLIGATIONS ON THE NET REVENUES AND IN ALL OTHER
RESPECTS TO THE PLEDGE AND LI'EN GRANTED TO SUCH HOLDERS OF THE SENIOR
OBLIGATIONS.
WPB/SANFORDS/223125/4sSx~31.DOC/6/03/99/99999.426594 B-3
IN WITNESS WHEREOF, the City of Delray Beach, Florida, has caused this Bond to be
signed by its Mayor, either manually or with his facsimile signature, and the seal of the City
Commission of the City of Delray Beach, Florida, to be affixed hereto or imprinted or
reproduced hereon, and attested by the Clerk of the City, either manually or with her facsimile
signature, and this Bond to be dated the Dated Date set forth above,
(SEAL)
CITY OF DELRAY BEACH, FLORIDA
ATTEST: By:
Mayor
Clerk of the City of Delray Beach, Florida
WPB/SANFORDS/223125/4sSx~I,DOC/6/03/99/99999.426594 B-4
FORM OF CERTIFICATE OF AUTHENTICATION
Date of Authentication: June ,1999
This Bond is the Bond delivered pursuant to the within mentioned Resolution.
CITY OF DELRAY BEACH
Finance Department, as Registrar
By:
Authorized Officer
WPB/SANFORDS/223125/4sSxO31,DOC/6/03/99/99999.426594 B-5
ASSIGNMENT'
FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto
(please pdnt or typewrite name, address and tax identification number of assignee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
, Attorney to transfer the within Bond on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
In the presence of:
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within Bond in every particular, without
alteration or enlargement, or any change whatever.
WPB/SANFORDS/223125/4s5xO3LDOC/6/O3J99/99999.426594 B-6
(2)
(3)
(4)
(5)
EXHIBIT C
1999 Project
Approximately 16,000 new water meters
Approximately 2,500 radio-read handheld units to read touch pad system
Conversion of approximately 970 existing meters to "touchread system"
Update current software system to accommodate touchread system
Labor, contingency and costs of issuing 1999 Bonds
MEMORANDUM
From:
Subject:
Date:
City Commission
David T. Harden, City Manager~
Proposed Water and Sewer Note ($3,500,000), Series 1999 A
May 20, 1999
The attached resolution authorizes the City to execute a Note Agreement with SunTrust in the
amount of $3,500,000 at a rate of 4.256% for the purpose of financing the cost of equipping and
implementing an Automated Meter Reading/Touchread System. The Finance Department has
provided an analysis of bids received and a recommendation to approve the agreement with
SunTrust. The agreement will allow for prepayment at any time without penalty and protect the
City against rate changes caused by amendments to the tax laws.
I concur with their recommendation.
c: R.S. O'Connor, Treasurer
MEMORANDUM
To:
From:
Subject:
Date:
David T. Harden, City Manager
Joseph M. Sa(~ctor of Finance
Proposed Water and Sewer Note ($3,500,000)
May 20, 1999
Back;Iround
On May 19, 1999, the City Finance Department received bids for the above referenced financing
(the "Note") for the purpose of funding the cost of equipping and implementing an Automated
Meter Reading/Touchread System (the "Touchread System"). The terms and specifics of the
request for bid are as follows:
_Term
The term of the Note will be approximately 10 years.
Security
The Note will be secured by a subordinate pledge upon the City's receipt of Water and Sewer
Revenues. The Note will be subordinate to the City's Water and Sewer Revenue Bonds, Series
1991, Series 1993, and Series 1997 currently outstanding in the aggregate principal amount of
$43,454,475 and any other parity additional bonds issued pursuant to the Bond Resolution. The
debt service coverage calculated with the current and proposed maximum debt service is at 1.83,
which is more than adequate coverage.
,prepayment Provisions/Gross-up Provisions-
The City asked the banks to bid with and without a "prepayment penalty" as well as with and
w~thout a gross-up prows~on. The "prepayment penalty" is a fee charged or a premium paid by
the City in the event the City chooses to prepay the note. The penalty described by the bidding
banks is based upon a formula that basically protects the banks from any loss due to a decrease
in the interest rate at the time of prepayment. If the rates are higher at the time of prepayment
there would be no prepayment penalty. A "gross-up provision" is a protection for the bank that, in
the event of a change in the tax law, the bank would be allowed to increase the rate of the
financing to the bank's effective yield.
Bid Responses
The City received both fixed and vadable rate responses from First Union, NationsBank, SkyLake
State Bank, SunTrust, and Wachovia Bank. (See Attachment A) We asked for rates without
penalty and no gross-up language (Option 1), without penalty but with gross-up language (Option
2), with penalty without gross-up language (Option 3), and with penalty with gross-up language
(Option 4). We applied the fixed interest rate quotes to the proposed principal payment schedule
to compute a total interest cost then added in any legal or out of pocket expenses to be charged
by the bank to determine the total cost to the City, (See Attachment B)
We did not compute the total cost of proposed variable rate loan offered by First Union since it is
difficult to project rates for a lO-year period. It is also our feeling that the rates are near the lowest
in years and that it is in the City's best interest to lock in a fixed rate and, therefore, only seriously
looked at the fixed rate scenarios.
Recommendation
We recommend (Option 1) the fixed rate financing option without the "penalty" language and
without the "gross up" language offered by SunTrust. This option offers the lowest rate offered by
the bidding banks. It provides long term financing with a rate of 4.256%; allows for prepayment at
any time without penalty; and protects the City against rate changes contingent upon amendments
to the tax laws.
Steve Sanford, the City's Bond Counsel, is working on a resolution authorizing the issuance of the
Note Agreement. It will come under a separate cover.
c: R.S. O'Connor, Treasurer