1978-06
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IOUTHEAnERn muniCIPAL Bon~ Inc.
INVESTMENT BANKERS & FINANCIAL CONSULTANTS
POST OFFICE BOX 3333 . ORLANDO, FLORIDA 32802
TELEPHONE (305) 628-0225
March 23, 1978
.
Honorable Mayor and Members
of the City Council
City of Clermont, Florida
Gentlemen:
The City of Clermont, Florida, has previously issued Water and
Sewer Revenue Refunding Bonds, of which approximately $1,725,000
are presently callable and outstanding. Through the development
of an advance refunding program, the City can issue new bonds at
substantially lower rates of interest. In addition, by restruc-
turing the existing maturity schedule to permit the investment of
early payments that are possibly being used to retire bonds,
certain savings: in interest can accrue to the City.
I
I
An outline of the manner in which we propose to serve you, upon
your acceptance! of this proposal, is detailed below:
. I
1. We wi~l make a more detailed analysis of the economic
benefits that could be expected from an advance
refunaing, providing comparative debt service schedules.
2. We will develop and present to you specific recommendations
regarding pertinent details of the proposed refunding bonds,
including their maturity schedules, redemption features,
interest rates, basic security provisions and protective
and other covenants. We will also suggest qualified in-
vestments which would be escrowed for payment of the bonds
to be refunded. All details of the refunding bonds and
the escrowed investments shall be subject to the mutual
satisfaction of the City of Clermont and ourselves.
3. We will assist you in drafting an Official Statement in
connection with the financing and will develop the
material to be included in it.
I
4. We will work with bond counsel in the review of the pro-
ceedings and preparation of the documents necessary to
authorize the advance refunding, which bond counsel shall
render their unqualified approving legal opinion in custom-
ary market form regarding the refunding bonds.
Honorable Mayor and Members
of the City Council
City of Clermont, Florida
-2-
March 23, 1978
5.
We will make available for conference and consultation
such of our personnel as may be reasonably required in
order to allow you to proceed promptly and in an effi-
cient and expeditious manner in your development of the
refunding program.
.
6.
We will present specific suggestions as to a favorable
time for the sale of the bonds, taking into consideration
market conditions and other known offerings of similar
bonds, and we will suggest appropriate terms and condi-
tions to be utilized in connection with the sale of the
bonds in order to achieve a favorable interest cost.
7. The Trustee shall furnish to the City prior to closing,
certification as required by the City with respect to
functions of the Trustee's investment account.
8. Underwriters will make available to the City prior to or
at the time of closing the legal opinion of nationally
recognized tax counsel, stating that they have reviewed
and examined the details with respect to refunding,
including form, manner and interest return of the invest-
ment escrow account, and in the unqualified opinion of
counsel this refunding and the investments associated
with it in no way violates present Internal Revenue
Services codes, regulations, and restrictions dealing
with municipal refunding bonds.
If and when all pertinent details of the refunding program have been
established to our mutual satisfaction, including an interest cost
savings of at least $250,000, it is understood that we will have
the exclusive right to negotiate in good faith for the purchase by
us and the sale by you of the bonds at a price and interest cost
which is fair ~nd reasonable for bonds of similar type and security
and commensurate with prices at which similar bonds are selling at
that time. Th~ detailed terms and conditions of our purchase of the
bonds shall be 'set forth in a subsequent written proposal, which shall
specify all pertinent details. All of these details, including
interest costs; shall be subject to our mutual satisfaction. In the
event that the:advance refunding program for any reason is not accom-
plished, the City will not be liable to us for any fees or charges
for our servic~s rendered or for reimbursement of our expenses
incurred.
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Your acceptance of this proposal by executing the acceptance clause
below on the enclosed copy hereof and returning it to us will
authorize us to engage in a detailed analysis and structuring of
an advance refunding program; and if indicated by said analysis, to
submit to you a commitment for the purchase of the bonds to effect
such advance refunding.
.
Honorable Mayor and Members
of the City Council
City of Clermont, Florida
-3-
March 23, 1978
This agreement shall be in effect for a period of one hundred
eighty (l80) days from its date of acceptance. Notwithstanding
any of the above, it is understood that if we are unable, due to
market conditions, to effect a mutually agreeable interest cost
reduction, then you shall be free to terminate this authorization.
Very truly yours,
SOUTHEASTERN MUNICIPAL BONDS, INC.
BY~{! ~
Accepted for and on behalf of
the City of Clermont, Florida,
this 3 ~ day of ApQ;/"
1978.
(SEAL) (!l ~
Claude E. Smoak, Jr., Mayor
ATTEST:
Q~M4) rl ~