Res 35-03RESOLUTION NO. R-35-03
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH, FLORIDA, AUTHORIZING THE NEGOTIATED
SALE OF CITY OF DELRAY BEACH, FLORIDA, WATER AND SEWER
REVENUE REFUNDING BONDS, SERIES 2003, IN THE INITIAL
AGGREGATE PRINCIPAL AMOUNT OF NOT EXCEEDING $13,500,000
FOR THE PURPOSE OF PAYING AND DEFEASING ~
PORTION OF THE CITY'S CURRENT INTEREST PAYING WATER
AND SEWER REFUNDING REVENUE BONDS, SERIES 1993 A, AL.L_QR
A PORTION QF ITS CURRENT INTEREST PAYING WATER AND
SEWER REVENUE BONDS, SERIES 1993 B AND ALL_Q_F__ITS WATER
AND SEWER REVENUE BONDS, SUBORDINATE SERIES 1999
(COLLECTIVELY, THE "REFUNDED BONDS"); DETERMINING
CERTAIN DETAILS OF SAID BONDS; APPOINTING THE
UNDERWRITER; PROVIDING FOR THE APPLICATION OF THE
BOND PROCEEDS; APPROVING THE FORM OF, AND AUTHORIZING
THE EXECUTION AND DELIVERY OF A BOND PURCHASE
AGREEMENT TO EFFECT THE NEGOTIATED SALE OF THE BONDS
AND SETTING THE PARAMETERS BY WHICH THE MAYOR OR
VICE MAYOR SHALL BE AUTHORIZED TO EXECUTE AND DELIVER
THE BOND PURCHASE AGREEMENT; APPROVING THE FORM OF
AND AUTHORIZING THE EXECUTION OF AN OFFICIAL
STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF
THE BONDS AND AUTHORIZING THE DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT AND THE OFFICIAL
STATEMENT BY THE UNDERWRITER; APPOINTING A PAYING
AGENT; APPOINTING A REGISTRAR; APPROVING THE FORM OF
AND AUTHORIZING THE EXECUTION AND DELIVERY OF A
~REGISTRAR AND PAYING AGENT AGREEMENT;
PROVIDING FOR A FINANCIAL GUARANTY INSURANCE POLICY
FOR THE BONDS TO BE PROVIDED BY AMBAC ASSURANCE
CORPORATION, APPROVING THE FORM OF AND AUTHORIZING
THE EXECUTION AND DELIVERY OF A GUARANTY AGREEMENT
IN CONNECTION WITH THE ISSUANCE OF A SURETY BOND BY
AMBAC ASSURANCE CORPORATION; AUTHORIZING CERTAIN
CHANGES AND MODIFICATIONS TO THE BOND RESOLUTION IN
CONNECTION WITH, AND AS A CONDITION OF, OBTAINING SUCH
FINANCIAL GUARANTY INSURANCE POLICY AND SURETY BOND~
APPOINTING AN ESCROW AGENT; APPROVING THE FORM OF AND
AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW
DEPOSIT AGREEMENT; AUTHORIZING THE BONDS TO BE
REGISTERED UNDER A BOOK-ENTRY ONLY SYSTEM OF
REGISTRATION; AUTHORIZING THE PROPER OFFICERS OF THE
CITY TO DO ALL OTHER THINGS DEEMED NECESSARY OR
ADVISABLE AS TO THE SALE AND DELIVERY OF THE BONDS; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City of Delray Beach, Florida, a municipal corporation of the
State of Florida (the "City"), presently owns and operates its own potable water and sanitary
sewer system (herein, the "Combined Public Utility"); and
WHEREAS, the City Commission of the City of Delray Beach, Florida (the
"Commission"), did, on June 12, 1984, adopt Resolution No. 45-84, which was amended and
supplemented on June 26, 1984, and October 10, 1984, authorizing the issuance of its Water and
Sewer Revenue Bonds, Series 1984 (the "1984 Bonds"); and
WHEREAS, the Commission did, on June 28, 1988, adopt Resolution No. 36-88,
which was amended, supplemented and restated by Resolution No. 39-88, adopted on July 12,
1988, as further amended and supplemented (collectively, the "1988 Resolution"), authorizing
the issuance of the City's Water and Sewer Refunding Revenue Bonds, Series 1988 (the "1988
Bonds"), to refund the City's 1984 Bonds; and
WHEREAS, the City did, on September 15, 1988, issue its 1988 Bonds in the
aggregate principal amount of $25,135,000; and
WHEREAS, the 1988 Resolution authorizes in Section 4.G of Article III thereof,
of Part I, the issuance of bonds payable on a parity with the 1988 Bonds issued pursuant to the
1988 Resolution, on the terms and conditions therein contained; and
WHEREAS, the Commission did, on April 24, 1990, adopt Resolution No.
46-90, as amended and supplemented, which authorized the issuance of $8,000,000 Water and
Sewer Revenue Bonds: Series 1991 A (the "1991 A Bonds") of the City for the purpose of
financing certain additions, extensions and improvements to the City's Combined Public Utility;
and
WHEREAS, the Commission did, on October 23, 1990, adopt Resolution No.
104-90, as amended and supplemented, which authorized the issuance of not exceeding
$50,000,000 Water and Sewer Revenue Bonds~Sm:itiJ.~_lJl (the "1991 B Bonds") of the City
for the purpose of financing certain additions, extensions and improvements to the City's
Combined Public Utility; and
WHEREAS, the City did, on April 30, 1991, issue its 1991 A Bonds and 1991 B
Bonds in the aggregate principal amounts of $8,000,000 and $14,585,000, respectively; and
WltEREAS, the Commission did, on June 8, 1993, adopt Resolution No. 50-93,
which authorized the issuance of not exceeding $30,000,000 Water and Sewer Refunding
Revenue Bonds, Series 1993 A (the "1993 A Bonds") for the purpose of paying and refunding a
portion of the 1988 Bonds and the 1991 A Bonds; and
WItEREAS, the Commission did, on June 8, 1993, adopt Resolution No. 51-93,
which authorized the issuance of not exceeding $10,000,000 Water and Sewer Revenue Bonds,
Series 1993 B (the "1993 B Bonds") for the purpose of financing certain additions, extensions
and improvements to the City's Combined Public Utility; and
WHEREAS, the City did, on June 29, 1993, issue its 1993 A Bonds and 1993 B
Bonds in the aggregate principal amounts of $21,238,997.35 and $6,865,477.25, respectively;
and
WItEREAS, the Commission did, on August 19, 1997, adopt Resolution
No. 58-97, as amended and supplemented, authorizing the issuance of its Water and Sewer
Revenue Refunding Bonds, Series 1997 A (the "1997 Bonds"), in the aggregate principal amount
of not exceeding $17,000,000 to advance refund the outstanding 1991 B Bonds; and
WHEREAS, the City did on November 18, 1997, issue its 1997 Bonds in the
aggregate principal amount of $15,030,000; and
WItEREAS, the Commission did, on June 8, 1999, adopt Resolution No. 33-99,
authorizing the issuance of not to exceed $3,500,000 in principal amount of Water and Sewer
Bonds, Subordinate Series 1999 (the "1999 Bonds"); and
W}IEREAS, the City did, on June 11, 1999, issue its 1999 Bonds in the
aggregate principal amount of $3,500,000; and
WItEREAS, the 1999 Bonds and the accrued interest thereon will be prepaid by
the City on or about the date the Bonds (as defined below) are issued; and
WItEREAS, on this date the Commission adopted Resolution No. 34-03 (the
"2003 Series Resolution') authorizing not exceeding in initial principal amount
$!4,5~,~13.500.000 of City of Delray Beach, Florida Water and Sewer Revenue Refunding
Bonds, Series 2003 (the "2003 Bonds" or the "Bonds') to pay and defease the Refunded Bonds
(as hereinafter defined); and
WHEREAS, the 1988 Resolution and the 2003 Series Resolution provide that
certain details of the 2003 Bonds and certain other provisions of the 1988 Resolution and the
2003 Series Resolution shall be determined by subsequent proceedings of the City, which shall
be deemed to be supplemental to the 1988 Resolution and the 2003 Series Resolution; and
WHEREAS, the outstanding current interest paying 1993 A Bonds and the
o_ulttanding_current interest paying 1993 B Bonds to be naid and defeased with a nortion of
the nroceeds of the 2003 Bonds are collectively referred to as the "1993 Refunded Bonds" and,
together with the outstanding 1999 Bonds, the "Refunded Bonds"; and
WHEREAS, in connection with the payment and defeasance of al! ~r a
of the 1993 Refunded Bonds, the City will enter into that certain Escrow Deposit Agreement,
expected to be dated as of July 1, 2003, with Wells Fargo Bank, National Association, as escrow
agent (the "Escrow Agent") in substantially the form attached hereto as Exhibit A (herein, the
"Escrow Agreement"); and
WHEREAS, subject to the terms and conditions of this Resolution, the City will
enter into a Bond Purchase Agreement with Bear, Steams & Co. Inc., hereby designated by the
Commission to be the underwriter of the Bonds (herein the "Underwriter"), setting forth the
terms and conditions of the City's agreement to sell and the Underwriter's agreement to purchase
the Bonds, in substantially the form attached hereto as Exhibit B (herein, the "Purchase
Contract"); and
WHEREAS, based upon current market conditions, the complex nature of the
financing, the need to issue the Bonds upon the most favorable market conditions and the advice
of the City's financial advisor, the Commission hereby finds it is necessary and advisable to
negotiate the sale of the Bonds; and
WItEREAS, the Commission hereby determines that it is in the best interest of
the City to accept the Purchase Contract and to award the Bonds to the Underwriter pursuant to a
negotiated sale and pursuant to the parameters set forth in Section 8 herein; and
WHEREAS, the City will be, prior to the execution of the Purchase Contract,
provided by the Underwriter with the disclosure statements required by Section 218.385, Florida
Statutes, a copy of which is attached as an exhibit to the Purchase Contract; and
WHEREAS, there have been also prepared and submitted to the Commission a
draft Preliminary Official Statement, attached hereto as Exhibit C.
WItEREAS, the City's financial advisor has recommended in a letter, attached
hereto as Exhibit D, that the principal and interest on the Bonds be insured by a Financial
Guaranty Insurance Policy (the "Bond Insurance Policy") to be issued by Ambac Assurance
Corporation, a Wisconsin domiciled stock insurance company or any successor thereto (the
"Bond Insurer") and that in lieu of any required deposits into the Debt Service Reserve Account
for the Bonds, a Reserve Account Credit Facility Substitute, in the form of a surety bond to be
issued by the Bond Insurer (the "Reserve Policy") will be provided with the coverage which will
be equal to the Debt Service Reserve Requirement for the Bonds as evidenced by the
commitment of the Bond Insurer attached hereto as Exhibit E (the "Commitment"); and
WHEREAS, the Commission has been advised that as a condition for the City to
receive the Reserve Policy from the Bond Insurer, it is necessary for the City to enter into an
Res. No. 35-03
Guaranty Agreement with the Bond Insurer, the form of which is attached hereto as Exhibit F;
and
WHEREAS, the Commission hereby adopts the recommendations of the City's
financial advisor regarding the Bond Insurance Policy and the Reserve Policy; and
WHEREAS, as a condition of obtaining the Bond Insurance Policy and Reserve
Policy, ";.. ,...~, for the Bonds, the Commission has been advised that it will be necessary to
amend and/or supplement the Bond Resolution with resnect to the 2003 Bonds and the
Commission hereby determines to make such amendments and supplements to obtain the Bond
Insurance Policy and Reserve Policy.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION
OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS:
SECTION 1. AUTHORITY OF THIS RESOLUTION. This Resolution is
adopted pursuant to the provisions of the 1988 Resolution, the 2003 Series Resolution, the City
Charter of the City, as amended and supplemented, the Florida Constitution, Chapter 166,
Florida Statutes, as amended and supplemented, and other applicable provisions of law.
SECTION 2. DEFINITIONS. That, ..... , ~ ~,~. .... : ....... :.a~.~ ~.~m .... all
capitalized terms used in this Resolution not otherwise defined shall have the meanings ascribed
to such terms in the 2003 Series Resolution, unless the context clearly indicates otherwise.
SECTION 3. PURPOSE AND BOND DESIGNATION. That the City hereby
determines at this time (i) to issue not exceeding THIRTEEN MILLION FIVE HUNDRED
THOUSAND DOLLARS ($13,500,000) in the initial aggregate principal amount of its Bonds
for the purpose of (a) paying and defeasing the Refunded Bonds, (b) to pay the costs of issuance
of the Bonds, including paying the premium for the Bond Insurance Policy and, if
the Reserve Policy, and (ii) to designate such Bonds as its "Water and Sewer Revenue Refunding
Bonds, Series 2003."
SECTION 4. TERMS AND DETAILS OF BONDS. The terms and details of
the Bonds, including but not limited to the principal amounts, interest rates, maturity dates and
redemption provisions, shall be determined by the Mayor or Vice Mayor in accordance with the
parameters set forth in Section 9 herein.
SECTION 5. APPLICATION OF BOND PROCEEDS. All moneys received
by the City fi.om the sale of the Bonds originally authorized and issued pursuant to the 1988
Resolution, the 2003 Series Resolution and this Resolution, shall be disbursed as follows:
A. The accrued interest, if any, derived fi.om the sale of the Bonds shall be
deposited into the Interest Account, created and established under the 1988 Resolution and
continued under the 2003 Series Resolution, and used for the purpose of paying interest on the
Bonds as the same becomes due and payable.
B. If the Debt Service Reserve Requirement for the Bonds is not satisfied
with the provision of the Reserve Policy fi.om the proceeds of the Bonds, there shall be deposited
in the 2003 Debt Service Reserve Sub-Account, hereby created and established, such amount
which shall be equal to the Debt Service Reserve Requirement for the Bonds.
C. From the proceeds of the Bonds an amount, which, together with any other
moneys lawfully available therefor, including moneys and investments transferred fi.om the
funds and accounts created and established by the proceedings authorizing the issuance of the
Refunded Bonds, shall be deposited in an escrow deposit trust fund to be held by the Escrow
Agent (as herein defined) under the terms and provisions of the Escrow Agreement; such
proceeds shall be held irrevocably in trust in the escrow deposit trust fund under the terms and
provisions of the Escrow Agreement; such moneys shall be invested at the time of deposit in
U.S. Obligations which are not callable prior to maturity except by the holder thereof, the
principal and interest of which shall be sufficient to pay the principal of and interest on the
Refunded Bonds as the same mature and become due and payable or are deemed prior to
maturity as provided in the Escrow Agreement.
D. From the proceeds of the Bonds an amount, with which, together with any
other moneys lawfully available therefor, the City shall prepay the 1999 Bonds in whole and any
unpaid accrued interest thereon.
E. The balance of the proceeds derived from the sale of the Bonds shall be
applied to pay the costs of issuing the Bonds, including, but not limited to, payment of the
premium for the Bond Insurance Policy and premium for the Reserve Policy.
The City is hereby authorized to permit the Underwriter to pay directly to the
Bond Insurer, from the proceeds of the Bonds, the cost of the Bond Insurance Policy and Reserve
Policy, if any. If, for any reason, any of the moneys allocated to pay the costs of issuing the
2003 Bonds are not necessary for or are not applied to pay the costs of issuing the 2003 Bonds,
then such surplus proceeds shall be deposited in the following order:
First, to the 2003 Debt Service Reserve Sub-Account in the Sinking Fund herein
created and established, to the full extent necessary, either to reinstate the Reserve Account
Credit Facility Substitute on deposit therein, including, but not limited to, the Reserve Policy, if
applicable, or to deposit additional moneys so that such deposit, together with such moneys
already on deposit therein, equals the Debt Service Reserve Requirement for the Bonds;
Second, to the Interest Account, Principal Account or Bond Redemption Account
in the Sinking Fund in the amounts, if any, determined by subsequent proceedings of the
Commission; and
Third, the balance, if any, is to be used by the City for any lawful municipal
purpose.
SECTION 6. REDEMPTION PROVISIONS. The Bonds are not subject to
optional redemption prior to maturity.
SECTION 7. NEGOTIATED SALE. That the City hereby finds that, due to
the complicated nature of the financing, volatile market conditions, the need to issue the Bonds
upon the most favorable market conditions and the advice of its financial advisor that it would be
in the best interest of the City that the Bonds be sold on a negotiated basis.
SECTION 8. APPOINTMENT OF UNDERWRITER. That the City hereby
appoints Bear, Stearns & Co. Inc. as the Underwriter of the Bonds pursuant to the terms and
provisions of the Purchase Contract.
SECTION 9. PARAMETERS FOR THE SALE OF THE BONDS. That the
proposal submitted by the Underwriter offering to purchase the Bonds at a purchase price for the
Bonds established pursuant to the parameters set forth below and on the terms and conditions set
forth in the Purchase Contract (substantially in the form attached hereto as Exhibit B), is hereby
approved and adopted by the City. Subject to the last sentence of this Section 9, the Mayor (or,
in his absence, the Vice Mayor) is hereby authorized to execute and deliver on behalf of the City,
and the City Clerk is hereby authorized (if so required) to affix the Seal of the City and attest to
the execution of the Purchase Contract in substantially the form presented at this meeting. The
disclosure statements and truth-in-bonding statements of the Underwriter, as required by Section
218.385 of the Florida Statutes, to be delivered to the City prior to the execution of the Purchase
Contract, a form of which is attached as an exhibit to the Purchase Contract, will be entered into
the official records of the City as part of the Purchase Contract. The Purchase Contract, when in
final form as determined by the City Attorney and Bond Counsel, may be executed by the City
without further action of the City, provided the City's financial advisor confirms in writing to the
Finance Director, or in his absence, the Treasurer of the City that (i) the true interest cost on the
Bonds does not exceed three and three-fourths percent (3.75%) per annum, (ii) the underwriting
discount (exclusive of any original issue discount or original issue premium) is not greater than
$6.00 per $1,000 of the original principal amount of the Bonds, (iii) the initial principal amount
of Bonds sold thereunder does not exceed the principal amount authorized under this Resolution,
(iv) the final maturity of the Bonds does not extend beyond October 1, 2008, and (v) the net
present value savings for paying and defeasing the Refunded Bonds shall not be less than two
and one-half percent (2.50%).
The final terms and provisions of the Bonds as are reflected in the final Official
Statement relatin~ to the Bonds. shall be affixed as an exhibit to this Resolution and entered
into the records of the Commission.
SECTION 10. PRELIMINARY AND OFFICIAL STATEMENT. That the
form of the Preliminary Official Statement in substantially the form attached hereto as Exhibit C
with such changes as shall be approved by the Mayor or the City Manager and the City's Bond
Counsel, be and the same is hereby approved, and the Commission hereby approves the use of
the final printed Official Statement by the Underwriter in connection with the offering and sale
of the Bonds in substantially the same form as the attached Preliminary Official Statement. The
Commission hereby further approves the use by the Underwriter of any supplement or
amendment to the Official Statement which is necessary so that the Official Statement does not
include any untrue statement of a material fact and does not omit to state any material fact
necessary to make the statements therein not misleading. The Mayor (or, in his absence, the
Vice Mayor) is each hereby authorized and directed to execute the Official Statement and any
amendment or supplement thereto, in the name and on behalf of the City, and thereupon to cause
the Official Statement and any such amendment or supplement to be delivered to the Underwriter
with such approval to be conclusively evidenced by his execution and delivery thereof. The
Underwriter is hereby authorized to distribute and use the Preliminary Official Statement in
connection with the marketing of the Bonds. The Mayor, the Vice Mayor, the City Manager, the
Director of Finance and the Treasurer are each authorized to execute a certificate deeming the
Preliminary Official Statement "final" within the meaning of the Rule. Notwithstanding the
foregoing, the Official Statement with respect to the Bonds shall not be executed prior to the date
the Purchase Contract, is executed in the manner contemplated in Section 1-09 herein and the
form thereof is approved by Bond Counsel and the City Attorney.
SECTION 11. PAYING AGENT AND REGISTRAR. That Wells Fargo
Bank, National Association, havine its designated cornorate trust office in Coral Snrines.
Florida. is hereby appointed as paying agent (the "Paying Agent") and registrar (the "Registrar")
for the Bonds. By the acceptance of such appointment, Wells Fargo Bank, National Association
agrees to comply with the terms of the Paying Agent =n~ _/Registrar Agreement (as herein
defined), the 1988 Resolution, the 2003 Series Resolution, this Resolution, the Bond Insurance
Policy and the Reserve Policy applicable to it. The Paying Agent and Registrar agree to provide
to the Bond Insurer copies of all notices and reports relating to the City or the Bonds received by
it or which either is required to be sent to the City or the registered owners of the Bonds.
SECTION 12. BOOK ENTRY BONDS. That the Commission hereby
determines that the registration of the Bonds be by the Book Entry System of registration.
SECTION 13. APPOINTMENT OF ESCROW AGENT. That Wells Fargo
Bank, National Association, having its designated corporate trust office in Coral Springs,
Florida, is hereby as Escrow Agent under the Escrow Agreement.
SECTION 14. APPROVAL AND EXECUTION OF THE ESCROW
AGREEMENT. That the form of the Escrow Deposit Agreement (the "Escrow Agreement")
expected to be dated as of July 1, 2003, by and between the City and the Escrow Agent, and in
substantially the form presented at this meeting (and attached hereto as Exhibit A) is hereby
approved, subject to and with such changes therein as shall be approved by the Mayor (or in his
absence, the Vice Mayor), such approval to be evidenced conclusively by the execution of said
Escrow Agreement; either the Mayor or the Vice Mayor of the City is hereby authorized and
directed on behalf of the City to execute and deliver said Escrow Agreement; that the City Clerk
hereby is authorized, on behalf of the City, to attest and impress the seal of the City on, said
Escrow Agreement; and that said officers and all other officers of the City are hereby authorized
and directed to carry out or cause to be carried out all obligations of the City under said Escrow
Agreement.
SECTION 15. BOND INSURANCE POLICY AND RESERVE POLICY.
That, based on the recommendations of the City's financial advisor, set forth in a letter attached
hereto as Exhibit D with respect to the Bonds, the Commission finds that obtaining the Bond
Insurance Policy and Reserve Policy from the Bond Insurer is in the best interests of the City,
and the Commission hereby directs that the premium due on the Bond Insurance Policy and the
Reserve Policy be paid in accordance with the terms thereof. The City covenants to comply with
the terms and provisions of the Bond Insurer's Commitment attached hereto as Exhibit E to
provide the Bond Insurance Policy and Reserve Policy and covenants to comply with the
payment procedures with respect to the Bond Insurance Policy, all as set forth in Section 18
hereof.
SECTION 16. GUARANTY AGREEMENT. That the form, terms and
provisions of the Guaranty Agreement between the City and substantially in the form attached
hereto as Exhibit F, as submitted to this meeting, be and the same are hereby approved and
· h.. ............ a .~ r ........ by. ...... ~, .... The Mayor of the City or, in his
accepted. If
absence, the Vice Mayor, is hereby authorized and directed to execute and deliver the Guaranty
Agreement on behalf of the City in substantially the form submitted to this meeting, with such
changes, insertions and deletions thereto as are necessary or desirable for carrying out the
purposes thereof as may be approved by the City Attorney and Bond Counsel, the execution of
said Guaranty Agreement being conclusive evidence of such approval.
SECTION 17. APPROVAL AND EXECUTION OF THE REGtS-T41AR
AND PAYING AGENT~ AGREEMENT. That the form of the Registr-ar-aml
Paying Agen~ Agreement (the "Reglstrar-amt-Paying Agent/llg, gittr~ Agreement")
expected to be dated as of July 1, 2003, by and between the City and the Registrar and Paying
Agent, and in substantially the form presented at this meeting (and attached hereto as Exhibit G)
is hereby approved, subject to and with such changes therein as shall be approved by the Mayor
(or in his absence, the Vice Mayor), such approval to be evidenced conclusively by the execution
of said Reg'.'gtrar a.':~ Paying Agent/Rtgi~ Agreement; either the Mayor or the Vice Mayor
of the City is hereby authorized and directed on behalf of the City to execute and deliver said
Regislmtr-amt-Paying Agen~ Agreement; that the City Clerk hereby is authorized, on
behalf of the City, to attest and impress the seal of the City on, said R~gistrar--atid-Paying
Agent/R.tgittr~ Agreement; and that said officers and all other officers of the City are hereby
authorized and directed to carry out or cause to be carded out all obligations of the City under
said Regisltqu~i-Paying Agent/llg, gittxar Agreement.
SECTION 18. AMENDMENTS AND SUPPLEMENTS TO 1988
ORIGINAL RESOLUTION AND 2003 SERIES RESOLUTION; BOND INSURANCE
AND RESERVE POLICY PROVISIONS. Notwithstanding any provision in the 1988
Resolution, as amended and supplemented and the 2003 Series Resolution to the contrary, as a
condition of obtaining the Bond Insurance and Reserve Policy and for as long as the Bond
Insurer is not in default under the Bond Insurance Policy and/or Reserve Policy, the following
provisions shall be applicable to the 2003 Bonds:
A. Consent of Bond Insurer.
Any provision of the 1988 Resolution, the 2003 Series Resolution or this
Resolution (for purposes of this section only, collectively, the "Resolutions") expressly
recognizing or granting rights in or to the Bond Insurer may not be amended in any manner
which affects the rights of the Bond Insurer thereunder and hereunder without the prior written
consent of the Bond Insurer. The Bond Insurer reserves the right to charge the City a reasonable
fee for any consem or amendment to the Resolutions while the Bond Insurance Policy is
outstanding.
B. Consent of the Bond Insurer in Addition to Bondholder Consent.
Unless otherwise provided in this Section, the Bond Insurer's consent shall be
required in addition to the consent of the registered owners of the 2_Q.0_3_Bonds (for purposes of
this section only, the "Bondholders"), when required, for the following purposes: (i) execution
and delivery of any supplemental Resolution, (ii) initiation or approval of any action not
described in (i) above which requires Bondholder's consent.
C. Consent of the Bond Insurer in the Event of Insolvency.
Any reorganization or liquidation plan with respect to the City must be acceptable
to the Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall
have the right to vote on behalf of all Bondholders.
D. Consent of the Bond Insurer Upon Default.
Anything in the Resolutions to the contrary notwithstanding, upon the occurrence
and continuance of a default by the City, the Bond Insurer shall be entitled to control and direct
the enforcement of all rights and remedies granted to the Bondholders.
E. Notices to Bond Insurer.
(1) While the Bond Insurance Policy is in effect, the City shall furnish to the
Bond Insurer, upon request, the following:
a copy of any financial statement, audit and/or annual report of the
(a)
City; and
(h)
such additional information it may reasonably request.
Upon request, such information shall be delivered at the City's expense to the
attention of the Surveillance Department, unless otherwise indicated.
(2) A copy of any notice to be given to the Bondholders, including, without
limitation, notice of any redemption of or defeasance of the Bonds, and any certificate rendered
pursuant to the Resolutions relating to the security for the Bonds.
(3) To the extent that the City has entered into a continuing disclosure
agreement or undertaking with respect to the Bonds, the Bond Insurer shall be included as party
to be notified.
(4) The City shall notify the Bond Insurer of any failure of the City to provide
relevant notices or certificates.
(5) Notwithstanding any other provision of the Resolutions, the City shall
immediately notify the Bond Insurer if at any time there are insufficient moneys to make any
payment of principal of and/or interest on the Bonds.
(6) The City will permit the Bond Insurer to discuss the affairs, finances and
accounts of the City or any information the Bond Insurer may reasonably request regarding the
security for the Bonds with appropriate officers of the City. The City will permit the Bond
Insurer to have access to and to make copies of all books and records relating to the Bonds at any
reasonable time.
(7) The Bond Insurer shall have the right to direct an accounting at the City's
expense, and the City's failure to comply with such direction within thirty (30) days after receipt
of written notice of the direction from the Bond Insurer shall be deemed a default under the
Resolutions; provided, however, that if compliance cannot occur within such period, then such
period will be extended so long as compliance is begun within such period and diligently
pursued, but only if such extension would not materially adversely affect the interests of any
Bondholder.
(F) Permitted Investments.
(1) The Bond Insurer will allow the following obligations to be used as
Permitted Investments for all purposes, including defeasance investments in refunding escrow
accounts.
Corporation),
(a) Cash (insured at all times by the Federal Deposit Insurance
(b) Direct obligations of the United States of America (including
obligations issued or held in book entry form on the books of the Department of the Treasury), or
(c) Senior debt obligations of other Government Sponsored Agencies
approved by the Bond Insurer.
(2) The Bond Insurer will allow the following obligations to be used as
Permitted Investments for all purposes other than defeasance investments in refunding escrow
accounts.
(a) Obligations of any of the following federal agencies which
obligations represent the full faith and credit of the United States of America, including:
-Export-Import Bank
-Rural Economic Community Development Administration
-U.S. Maritime Administration
-Small Business Administration
-U.S. Department of Housing & Urban Development (PHAs)
-Federal Housing Administration
-Federal Financing Bank
(b) Direct obligations of any of the following federal agencies which
obligations are not fully guaranteed by the full faith and credit of the United States of America:
-Senior debt obligations issued by the Federal National Mortgage
Association - (FNMA) or Federal Home Loan Mortgage
Corporation (FHLMC).
-Obligations of the Resolution Funding Corporation (REFCORP) -Senior debt obligations of the Federal Home Loan Bank System -Senior debt obligations of other Govemmental Sponsored
Agencies approved by the Bond Insurer
(c) U.S. dollar denominated deposit accounts, federal funds and
bankers' acceptances with domestic commercial banks which have a rating on their short term
certificates of deposit on the date of purchase of"P-l" by Moody's and "A-I" or "A-I" by S&P
and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding
companies are not considered as the rating of the bank);
(d) Commercial paper which is rated at the time of purchase in the
single highest classification, "P-I" by Moody's and "A-I" by S&P and which matures not more
than 270 calendar days after the date of purchase;
(e) Investments in a money market fired rated "AAAm" or "AAAm-
G" or better by S&P;
(0 Pre-refunded Municipal Bonds defined as follows: 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 which are not callable at the option of the obligor
prior to maturity or as to which irrevocable instructions have been given by the obligor to call on
the date specified in the notice; and
(i) which are rated, based on an irrevocable escrow account or
fund (the "escrow"), in the highest rating category of Moody's or S&P or any
successors thereto; or
(ii) (x) which are fully secured as to principal and interest and
redemption premium, if any, by an escrow consisting only of cash or obligations
described in paragraph (1)(b) above, which escrow 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
specified redemption date or dates pursuant to such irrevocable instructions, as
appropriate, and (y) which escrow is sufficient, as verified by a nationally
recognized independent certified public accountant, to pay principal of and
interest and redemption premium, if any, on the bonds or other obligations
described in this paragraph on the maturity date or dates specified in the
irrevocable instructions referred to above, as appropriate;
(g) Municipal obligations rated "Aaa/AAA" or general obligations of
states with a rating of"A2/A" or higher by both Moody's and S&P;
(h) Investment agreements approved in writing by the Bond Insurer
Corporation (supported by appropriate opinions of counsel);
(i) the Local Government Surnlus Funds Trust Fund. as created
Section 218.405. Florida Statutes: and
Other forms of investments (including repurchase agreements)
approved in writing by the Bond Insurer.
(3) The value of the above investments shall be determined as follows:
(a) For the purpose of determining the amount in any fund, all
Permitted Investments credited to such fund shall be valued at fair market value. The City shall
determine the fair market value based on accepted industry standards and from accepted industry
providers. Accepted industry providers shall include but are not limited to pricing services
provided by Financial Times Interactive Data Corporation, Merrill Lynch, Citigroup Global
Markets Inc, Bear Stearns, or Lehman Brothers.
(b) As to certificates of deposit and bankers' acceptances: the face
amount thereof, plus accrued interest thereon; and
(c) As to any investment not specified above: the value thereof
established by prior agreement among the City and the Bond Insurer.
G. Payment Procedures.
The following sets out the applicable procedure for payments under the Bond
Insurance Policy:
As long as the Bond Insurance Policy shall be in full force and effect, the City and
Paying Agent agree to comply with the following provisions:
(1) At least one (1) day prior to all Interest Payment Dates the Paying Agent
will determine whether there will be sufficient funds in the funds and accounts to pay the
principal of or interest on the Bonds on such Interest Payment Date. If the Paying Agent
determines that there will be insufficient funds in such funds or accounts, the Paying Agent shall
so notify the Bond Insurer. Such notice shall specify the amotmt of the anticipated deficiency,
the Bonds to which such deficiency is applicable and whether such Bonds will be deficient as to
principal or interest, or both. If the Paying Agent has not so notified the Bond Insurer at least
one (1) day prior to an Interest Payment Date, the Bond Insurer will make payments of principal
or interest due on the Bonds on or before the first (lst) day next following the date on which the
Bond Insurer shall have received notice of nonpayment from the Paying Agent.
(2) The Paying Agent shall, after giving notice to the Bond Insurer as
provided in (al_) above, make available to the Bond Insurer and, at the Bond Insurer's direction,
to The Bank of New York, in New York, New York, as insurance trustee for the Bond Insurer or
any successor insurance trustee (the "Insurance Trustee"), the registration books of the City
maintained by the Registrar and all records relating to the funds and accounts maintained under
the Resolutions.
(3) The Registrar shall provide the Bond Insurer and the Insurance Trustee
with a list of registered owners of the Bonds entitled to receive principal or interest payments
fi.om the Bond Insurer under the terms of the Bond Insurance Policy, and shall cause the Paying
Agent to make arrangements with the Insurance Trustee (i) to mail checks or drafts to the
registered owners of Bonds entitled to receive full or partial interest payments fi.om the Bond
Insurer and (ii) to pay principal upon Bonds surrendered to the Insurance Trustee by the
Bondholders entitled to receive full or partial principal payments from the Bond Insurer.
(4) The Paying Agent shall, at the time it provides notice to the Bond Insurer
pursuant to (il~ above, notify registered owners of Bonds entitled to receive the payment of
principal or interest thereon fi.om the Bond Insurer (i) as to the fact of such entitlement, (ii) that
the Bond Insurer will remit to them all or a part of the interest payments next coming due upon
proof of a Bondholder's entitlement to interest payments and delivery to the Insurance Trustee,
in form satisfactory to the Insurance Trustee, of an appropriate assignment of the Bondholder's
right to payment, (iii) that should they be entitled to receive full payment of principal fi.om the
Bond Insurer, they must surrender their Bonds (along with an appropriate instrument of
assignment in form satisfactory to the Insurance Trustee to permit ownership of such Bonds to be
registered in the name of the Bond Insurer) for payment to the Insurance Trustee, and not the
Paying Agent and (iv) that should they be entitled to receive partial payment of principal from
the Bond Insurer, they must surrender their Bonds for payment thereon first to the Paying Agent
who shall note on such Bonds the portion of the principal paid by the Paying Agent and then,
along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee,
to the Insurance Trustee, which will then pay the unpaid portion of principal.
(5) In the event that the Paying Agent has notice that any payment of principal
of or interest on Bonds which has become Due for Payment and which is made to a Bondholder
by or on behalf of the City has been deemed a preferential transfer and theretofore recovered
from its registered owner pursuant to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with the final, nonappealable order of a court having competent
jurisdiction, the Paying Agent shall, at the time the Bond Insurer is notified pursuant to
(1) above, notify all Bondholders that in the event that any Bondholder's payment is so
recovered, such Bondholder will be entitled to payment from the Bond Insurer to the extent of
such recovery if sufficient funds are not otherwise available, and the Paying Agent shall furnish
to the Bond Insurer its records evidencing the payments of principal of and interest on the Bonds
which have been made by the Paying Agent and subsequently recovered from Bondholders and
the dates on which such payments were made.
(6) In addition to those rights granted the Bond Insurer under this Section, the
Bond Insurer shall, to the extent it makes payment of principal of or interest on the Bonds,
become subrogated to the rights of the recipients of such payments in accordance with the terms
of the Bond Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as
Res. No. 35-03
to claims for past due interest, the Paying Agent shall note the Bond Insurer's rights as subrogee
on the registration books of the City maintained by the Registrar upon receipt from the Bond
Insurer of proof of the payment of interest thereon to the registered owners of the Bonds, and (ii)
in the case of subrogation as to claims for past due principal, the Registrar shall note the Bond
Insurer's rights as subrogec on the registration books of the City maintained by the Paying Agent
upon surrender of the Bonds by the Bondholders thereof together with proof of the payment of
principal thereof.
H. The Bond Insurer As Third Party Beneficiary.
To the extent that the Resolutions confer upon or give or grant to the Bond Insurer
any right, remedy or claim under or by reason of the Resolutions, the Bond Insurer is hereby
explicitly recognized as being a third-party beneficiary thereunder or hereunder and may enforce
any such fight remedy or claim conferred, given or granted thereunder or hereunder.
I. Parties Interested Herein.
Nothing in the Resolutions expressed or implied is intended or shall be construed
to confer upon, or to give or grant to, any person or entity, other than the City, the Registrar, the
Bond Insurer, the Paying Agent and the Bondholders, any right, remedy or claim under or by
reason of the Resolutions or any covenant, condition or stipulation thereof or hereof, and all
covenants, stipulations, promises and agreements in the Resolutions contained by and on behalf
of the City shall be for the sole and exclusive benefit of the City, the Registrar, the Bond Insurer,
the Paying Agent and the Bondholders.
J. Reserve Policy.
As long as the Reserve Policy shall be in full force and effect, the City and Paying
Agent agree to comply with the following provisions:
(1) In the event and to the extent that moneys on deposit in the Interest
Account and Principal Account, plus all amounts on deposit in and credited to the 2003 Debt
Service Reserve Sub-Account in excess of the amount of the Reserve Policy, are insufficient to
pay the amount of principal and interest coming due, then upon the later of: (i) one (1) day after
receipt by the General Counsel of the Bond Insurer of a demand for payment in the form
attached to the Reserve Policy as Attachment 1 (the "Demand for Payment"), duly executed by
the Paying Agent certifying that payment due under the Resolutions has not been made to the
Paying Agent; or (ii) the payment date of the Bonds as specified in the Demand for Payment
presented by the Paying Agent to the General Counsel of the Bond Insurer, the Bond Insurer will
make a deposit of funds in an account with the Paying Agent or its successor sufficient for the
payment to the Paying Agent, of amounts which are then due to the Paying Agent under the
Resolutions (as specified in the Demand for Payment) up to but not in excess of the Reserve
Policy Coverage, as defined in the Reserve Policy; provided, however, that in the event that the
amount on deposit in, or credited to, the 2003 Debt Service Reserve Sub-Account, in addition to
the amount available under the Reserve Policy, includes amounts available under another
Reserve Account Credit Facility Substitute, draws on the Reserve Policy and the Reserve
Account Credit Facility Substitute shall be made on a pro rata basis to fund the insufficiency.
(2) The Paying Agent shall, al~¢r submitting to the Bond Insurer the Demand
for Payment as provided in (1) above, make available to the Bond Insurer all records relating to
thc funds and accounts maintained under the Resolutions.
(3) Thc Paying Agent shall, upon receipt of moneys received from the draw
on thc Reserve Policy, as specified in the Demand for Payment, credit the 2003 Debt Service
Reserve Sub-Account to the extent of moneys received pursuant to such Demand.
(4) Thc 2003 Debt Service Reserve Account shall be replenished in thc
following priority: (i) principal and interest on thc Reserve Policy and on any other Reserve
Account Credit Facility Substitute shall be paid from first available Net Revenues on a pro rata
basis; (ii)after all such amounts are paid in full, amounts necessary to fund thc 2003 Debt
Service Reserve Sub-Account to the required level, after taking into account the amounts
available under the Reserve Policy and any other Reserve Account Credit Facility Substitute
shall be deposited from next available Net Revenues.
SECTION 19. BOOK ENTRY BONDS. That the Commission hereby
determines that the registration of the Bonds be by a Book Entry system of registration. The
Mayor, the City Manager, the Finance Director or the Treasurer are each hereby authorized and
directed to execute and deliver all documents or instruments found to be in acceptable form by
the City Attorney and Bond Counsel, to evidence such Bond Entry System of registration.
SECTION 20. 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 Bonds.
SECTION 21. FURTHER AUTHORIZATIONS; RATIFICATION OF
PRIOR ACTS. That the Mayor, the Vice Mayor, the City Manager, the Finance Director, the
Treasurer, the City Clerk, the City Attorney and any other authorized official of the City, be and
each of them is hereby authorized and directed to execute and deliver any and all documents and
instmm :_~...~ ~...o ~, ~:_:,~, ......... : ...... · n~.~ .An:~, ........... ° 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 Resolution, including, but not limited to, complying with any
conditions to obtain the Bond Insurance Policy or Reserve Policy. All actions heretofore taken
and documents prepared or executed by or on behalf of the City by any of its authorized officers
in connection with the transactions contemplated hereby including, without limitation, the
subscription for the purchase, if available, of United States Treasury Obligations - State and
Local Government Series ("SLGs") for deposit and application to effect the payment and
defeasance of the 1993 Refunded Bonds, are hereby ratified, confirmed, approved and adopted.
SECTION 22. REPEALER. That all resolutions or proceedings, or parts
thereof, in conflict with the provisions of this Resolution are to the extent of such conflict
hereby repealed.
SECTION 23. EFFECTIVE DATE. That this Resolution shall take effect
immediately upon its passage.
PASSED AND ADOPTED in regular session on this the 17th day of June, 2003.
City Clerk
CITY OF DELRAY BEACH, FLORIDA
By: ~
Date of Adoption: June 17, 2003
The foregoing Resolution is hereby
approved by me as to form, language and
execution this 17th day of June, 2003.
By:
.City Attorney
City of Delray Beach, Florida
Water and Sewer Revenue Refunding Bonds, Series 2003
LIST OF EXHIBITS TO RESOLUTION NO. 35-03
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Escrow Deposit Agreement
Bond Purchase Agreement
Draft Preliminary Official Statement
Letter of Recommendation from Public Financial Management
Commitment for Bond Insurance and Reserve Policy fi.om Ambac
Assurance Corporation.
Guaranty Agreement
Rcgigtrar aaa-. Paying Agent~g.~gXal: Agreement
MEMORANDUM
To:
From:
David T. Harden, C_ity Manager
Joseph M. Saff~ctor of Finance
Subject: Resolution # 34-03, and 35-03
Date: June 9, 2003
We have attached for Commission approval Resolution# 34-03 and #35-03. A brief
description of each resolution is as follows:
Resolution #34-03
Resolution #34-03 authorizes the issuance of not to exceed $13,500,000 in Water and
Sewer Refunding Bonds. The proposed bonds will be issued for the purpose of
refunding or refinancing all or a portion of the City of Delray Beach Water and Sewer
Refunding Bonds, Series 1993 A and B, and the City's outstanding Water and Sewer
Refunding Bonds, Subordinate Series 1999; and to provide the terms and payment for
the bonds.
Resolution # 35-03
Resolution # 35-03 authorizes the negotiated sale of City of Delrey Beach Water and
Sewer Revenue Bonds and to provide certain matters that need to be met in order to
effectuate the sale. The parameters are 1 .) the true interest cost does not exceed
3.75% per annum, 2.) the Underwriter's fee or discount paid is not more than $6.00 per
thousand of the original principal amount of the Bonds, 3.) the principal amount does not
exceed $13,500,000, 4.) the final maturity of the Bonds does not extend beyond October
1, 2008 and 5.) the net present value savings for paying and defeasing a portion of the
Refunded Bonds shall not be less than three pement (2.5%). The resolution also
authorizes the Mayor, or in his absence, the Vice-Mayor, to execute the documents to
effectuate the sale if these parameters have been met.
Resolution #35-03 also authorizes the form of the preliminary official statement,
appoints a paying agent/registrar, escrow agent, provides for an insurance policy, and
allows proper officers of the City to do all things necessary or advisable with respect to
the sale.
Total net present value savings, which takes into consideration the time value of money,
is estimated at $564,000 or over the term of the bonds or 4.45% of the refunded bonds.
A presentation from Public Financial Management, the City's financial advisor, will
precede the motion to approve the above referenced resolutions; PFM will explain the
background and discuss expected results relative to refunding or refinancing of the
City's prior bond issues.
We recommend Commission approval of the resolutions referenced above,
Agenda Item No.: ,~'
Request to be placed on:
x Regular Agenda
AGENDA REQUEST
Date:
__ Special Agenda
June 10, 2003
Workshop Agenda
When: June ~
Description of agenda item (who., what, where, how much):
Approve Resolution ~ 34-03 which authrizes the issuance of. not tn ~v~-~ $13.599.99n
in Water and Sewer RefundinK Bonds. ADDrnV~__ R~nl.~4~ ~. ................ q~_n9 ,,,~4-4--~
the negotiated sale of City of B~lr~ R~h w:~ .... ~ e ..... ~-~..-~-g ~ ......
set terms thereof.
ORD I N~k~CE / .,~_.RE S0L UT I_O~)REQU I RE D: ~NO Draft Attached: ~/NO
Recommendation: Recommend approval of Resolut~nn ~ q&-~q m~M ;~5-0_~
Determination of Consistency wi~omprehensmve~lan:~
City Attorney Review/ Recommendation (if applicable):
Budget Director Review (required on all items involving expenditure
of funds):
Funding available: YES/ NO
Funding altgrnatives:
Account No. & Description:
Account Balance: ~
(if applicable)
City Manager Review:
ApprovedHold Until: for agenda: ~/ NO ~
Agenda Coordinator Review:
Received:
Action:
Approved/Disapproved