R-98-1046,
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RESOLUTION N0. 1046
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F&L Draft of 12!7198
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CLERMONT, FLORIDA, ACCEPTING THE PROPOSAL OF
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL
ASSOCIATION, TO ~J'ROVIDE THE CITY WITH A NOT TO
EXCEED $440,000 L1:oAN TO FINANCE A PART OF THE
COST OF CERTAIN cI;APITAL PROJECTS IN ANA FOR THE
CITY, INCLUDING THE ACQUISITION OF NEW
COMPUTER EQUIPA~IENT AND ANEW FIRE TRUCK;
AUTHORIZING THE EXECUTION AND DELIVERY OF A
LOAN AGREEMENT WITH SAID BANK PURSUANT TO
WHICH THE CITY ~VIL.L ISSUE NOTES TO SECURE THE
REPAYMENT OF SAID LOAN AND WILL PLEDGE
CERTAIN PLEDGED FUNDS TO SECURE THE
REPAYMENT OF SUCH NOTES: AUTHORIZING THE
ISSUANCE OF T~UVO NOTES IN AN AGGREGATE
PRINCIPAL AMOUNT OF NOT TO EXCEED $440,000
PURSUANT TO THE LOAN AGREEMENT TO SECURE THE
REPAYMENT OF SAID LOAN; DESIGNATING SUCH
NOTES FOR THE.; EXCEPTION TO THE PROVISIONS
CONTAINED IN THE INTERNAL REVENUE CODE OF 1986
WHICH DENY 'FINANCIAL INSTITUTIONS ANY
DEDUCTIONS FOR'INTEREST EXPENSE ALLOCABLE TO
TAX-EXEMPT OBLIGATIONS; AUTHORIZING THE
EXECUTION ANll DELIVERY OF OTHER DOCUMENTS IN
CONNECTION WIT~-I SAID LOAN; AND PROVIDING AN
EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CLERMONT, FLORIDA.
SECTION I. AUTHORITY FOR THIS RESOLUTION. This Resolution is
adopted pursuant to the provisions of Chapter 166. Part II, Florida Statutes, as amended, and
other applicable provisions of law.
SECTION 2. FINDII~IG5. It is hereby ascertained, determined and declared:
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(A} The City of Clctmont, Florida (the "City"), deems it necessary, desirable
and in the best interests of the City that the City undertake certain capital projects in and for
the City, including the acquisition bf new computer equipment and a new fire truck, as more
particularly described in the Loan Algreement {as defined herein) and all in accordance with the
plans and specifications on file or to be on file with the Ciry, as the same may he modified
from time to time (the "Project").
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(B) The City has obtained a proposal for a not to exceed $440,000 loan (the
"Loan") liom SunTrust Bank, Ccsvtral Florida, National Association (the "Bank"), the
proceeds of which will be applied to fiance a part of the cost of the Project.
(C~ The Loan will be secured by the Loan Agreement pursuant to which the
City will issue notes (the "Notes") to Isecure the repayment of the Loan.
(D) The Ciry is advised that due to the present volatility of the market for
municipal debt, it is in the best interest of the City to issue the Notes pursuant to the Loaa
Agreement by negotiated sale, allowing the City to issue the Notes at the those advantageous
time, rather than a specified advcrtisc:d future date, Thereby allowing the City to obtain the best
possible price, interest rate and other -terms for the Notes and, accordingly, the City Council of
the City hcreby finds and determines that it is in the best fuiancial interest of the City that a
negotiated sale of the Notes pursuant to the Loan Agreement be authorized.
(E) The costs of the; Project in an amount not to exceed $440,000 will be
financxd froth the proceeds of the Loan.
(F) The Loan will be~repaid solely from the Pledged Funds (as defined in the
Loan Agreement). Such Pledged Funds include, but ate not limited to, moneys budgeted and
appropriated pursuant to the Loan Agreement. The ad valorem taxing power of the City will
• never be necessary or authorised to p~y the amounts due on the Loan.
(G) It is not reasonably anticipated that more than $10,000,000 of tax-exempt
obligations under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the
"Code") will be issued by the Ciry in calendar year 1998.
SECTION 3. AUTHORIZATION OF THE PROJECT. The City does hereby
authorize the Project.
SECTION 4. ACCEPTANCE OF PROPOSAL. The City hcreby accepts the
proposal of the Bank to provide the City with the Loan.
SECTION 5. AUTHORIZATION OF LOAN AGREEMENT. The Loan and
the repayment of the Loan by the City shall be pursuant to the terms and provisions of a Loan
Agreement. The City hereby autttorizcs the Mayor or the Vice Mayor of the City (the
"Mayor") and the City Clerk or t e Assistant City Clerk of the City (the "Ciry Clerk") to
execute and deliver on behalf of the~City the Loan Agreement by and between the City and the
Bank substantially in the form attached hereto as Exlu~bit A (the "Loan Agreement"), with such
changes, insertions and additions as they tray approve, their execution thereof being evidence
of such approval.
SECTION 6. AUT~iORIZATION OF NOTES T4 FINANCE A PART OF
THE COST OF THE PROTECT. The City does hereby authorize the issuance of two Notes in
• the aggregate principal amount of trot exceeding $440,000 for the purpose of providing the
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City with sufficient funds to finance ~ part of the cost of the Project. The Mayor and City
Clerk are hereby authorized to execute, seal and deliver on behalf of the City the Notes and
other documents, instruments, agreetments and certificates necessary or desirable to effectuate
the Loan as provided in the Loan Agreement. The Notes shalt be issued in the principal
amount {not exceeding in aggregate $440,000), shall hear interest at the initial interest rafts
(not exceeding 5.5 %), shall have a fiiral maturity date (not exceeding ton years froth the date of
the execurian and delivery of the Loan Agreement authorized herein) and shall have such other
terms, all as set forth in the Loan Agreement and the Notes authorized herein and executed and
delivered in connection with Laan_
SECTION 7. DESIGNATION OF NOTES AS QUALIFIED TAX-EXEMPT
OBLIGATIONS. The City hereby designates the Notes described in Section 6 hereof as
"qualified tax-cxetnpt obligations" uitdor Section 265(b)(3) of the Code. This designation is
based upon the findings of the City set forth in Section 2(C) of this Resolution and the Mayor
is authorized w recertify such finding upon the issuance of the Notes. The City acknowledges
that any action which adversely impacts the status of the Notes as "qualified tax-exempt
obligations" will result in an upward adjustment to the interest rate on the Notes.
SECTION 8. LIMITED OBLIGATION. The obligation of the City to pay the
Notes is a limited and special obligation payable solely from the Pledged Funds in the manner
and to the extent set forth in the Loan Agreement and shall not be deemed a pledge of the faith
• and credit or taxing power of the City and such obligation shall not create a lien on any
property whatsoever of or situated within the City other than the Pledged Funds.
SECTION 9. GENERAL AUTHORIZATION_ The Mayor and City Clerk and
other cmpioyees or agents of the City are authorized to execute and deliver such documents,
instruments and contracts, and are hereby authorized and directed to do all acts and things
required hereby as may be necessary for the full, puncnial and complete performance of alt the
terms, covenants, provisions and 'agreements herein contained, or as otherwise may be
necessary or desirable to effectuate the purpose and intent of this Resolution..
SECTION 10. REPEAL OF INCONSISTENT DOCUMENTS. Ail
ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and repealed
to the extent of such conflict.
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SECTION 11. EFFECTIVE DATE. This Resolution shall take effect
immediately upon its adoption.
PASSED, APPROVED AND ADOPTED this eighth day of December, 1998.
CITY COUNCIL OF THE CITY
OF CLERMONT, FLORIDA
(OFT~ICIAL SEAL)
BY
ayor
ATTEST:
City Glcrk
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