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R-2012-33 CITY OF CLERMONT RESOLUTION NO. 2012-33 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA, AMENDING AND SUPPLEMENTING RESOLUTION NO. 1258 ADOPTED BY THE CITY COUNCIL ON JUNE 6, 2002, WHICH AUTHORIZED THE ISSUANCE BY THE CITY OF PUBLIC IMPROVEMENT REVENUE BONDS; FOR THE PURPOSES OF ACCEPTING THE PROPOSAL OF SUNTRUST BANK TO PROVIDE THE CITY WITH A LOAN IN A PRINCIPAL AMOUNT NOT TO EXCEED $2,700,000 FOR THE PURPOSES OF (i) REFUNDING THE CITY'S OUTSTANDING PUBLIC IMPROVEMENT REVENUE BONDS, SERIES 2002 AND (ii) PAYING THE RELATED CLOSING COSTS; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT WITH SAID BANK AND A RELATED PUBLIC IMPROVEMENT REFUNDING REVENUE NQtE, SERIES 2012 IN A PRINCIPAL AMOUNT EQUAL TO THE PRINCIPAL AMOUNT OF SUCH LOAN; PROVIDING THAT SUCH SERIES 2012 NOTE SHALL CONSTITUTE AND BE SECURED AS AN "ADDITIONAL BOND" UNDER RESOLUTION NO. 1258; AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT THAT WILL PROVIDE FOR THE REDEMPTION OF THE SERIES 2002 BONDS; APPOINTING THE ESCROW HOLDER TO SERVE UNDER SUCH ESCROW DEPOSIT AGREEMENT; DESIGNATING SUCH SERIES 2012 NOTE 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; AMENDING THE DEFINITION OF THE TERM "REQUIRED COVERAGE RATIO" SET FORTH IN SECTION 1.1 OF RESOLUTION NO. 1258; AMENDING SECTION 4.5(A)(4) OF RESOLUTION NO. 1258 TO PERMIT ADDITIONAL SERIES OF BONDS TO NOT BE SECURED BY THE RESERVE ACCOUNT OR ANY SUBACCOUNT THEREIN AND TO MODIFY THE FUNDING REQUIREMENTS FOR THE RESERVE ACCOUNT AND ANY SUBACCOUNTS THEREIN; AUTHORIZING THE ADMINISTRATIVE SERVICES DIRECTOR TO ADOPT TAX-EXEMPT BOND COMPLIANCE PROCEDURES PURSUANT TO CURRENT GUIDELINES OF THE INTERNAL REVENUE SERVICE WHICH WILL APPLY TO SUCH SERIES 2012 NOTE AND TO THE CITY'S TAX-ADVANTAGED BONDS CURRENTLY OUTSTANDING AND HEREAFTER ISSUED; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS IN CONNECTION WITH SAID LOAN; AND PROVIDING AN EFFECTIVE DATE. ' 4833-7559-0929 2 __ BE IT RESOLVED BY THE CITY COUNCIL OF CITY OF CLERMONT, FLORIDA, as follows: SECTION 1. DEFINITIONS. All terms used in this resolution (this "Supplemental Resolution"), which are not defined herein, shall have the meaning specified in the Resolution No. 1258 adopted by the City Council (the "City Council") of the City of Clermont, Florida (the "City"), on June 6, 2002 (the "Original Resolution"), which provides for the issuance by the City of public improvement revenue bonds. The Original Resolution as amended and supplemented by this Supplemental Resolution is hereinafter referred to as the "Bond Resolution." SECTION 2. AUTHORITY FOR THIS SUPPLEMENTAL RESOLUTION. This Supplemental Resolution is adopted pursuant to the provisions of Chapter 166, Part II, Florida Statutes, as amended, and other applicable provisions of law. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared: (A) The City deems it necessary, desirable and in the best interests of the City that the City undertake to (i) currently refund the City's outstanding Public Improvement Revenue Bonds, Series 2002 (the "Refunded Bonds") and (ii) pay related closing costs (collectively, the "Refunding"), as more particularly described in this Supplemental Resolution and the Loan Agreement (as defined herein). The proceeds of the Refunded Bonds were used to (i) finance the costs of the acquisition, construction and installation of a new city hall and related improvements, fixtures, furnishings and equipment, and (ii) refund the City's Revenue Note, Draw No. A-1-1, dated August 31, 2000, as provided in the Original Resolution. (B) The City has obtained a proposal for a not to exceed $2,700,000 loan (the "Loan") from SunTrust Bank (the "Bank"), the proceeds of which will be applied to finance the cost of the Refunding. (C) The Loan will be secured by a Loan Agreement to be executed and delivered by and between the City and the Bank substantially in the form attached hereto as Exhibit A (the "Loan Agreement"), pursuant to which the City will issue its Public Improvement Refunding Revenue Note, Series 2012 (the "Note") to secure the repayment of the Loan. The Original Resolution provides for the issuance of Additional Bonds payable from and secured by the Pledged Funds on a parity with outstanding Bonds under terms, limitations and conditions provided therein. The City will issue the Note as an Additional Bond within the authorization contained in Section 5.2 of the Original Resolution. Because the Note will be the only Bond Outstanding under the Original Resolution upon the issuance of the Note, it will not be necessary for the City to comply with the provisions of paragraphs (A) through (C) of Section 5.2 of the Original Resolution in connection with the issuance of the Note. Upon the issuance of the Note in accordance with the terms of the Original Resolution and this Supplemental Resolution, the Note will constitute and be secured as an Additional Bond under the Bond Resolution, entitled to the security and benefits thereof. The Note will not be secured by the Reserve Account or any subaccount therein. 4833-7559-0929 2 2 (D) The costs of the Refunding will be financed from the proceeds of the Loan. (E) The Loan will be repaid solely from the Pledged Funds as provided in the Bond Resolution. The ad valorem taxing power of the City will never be necessary or authorized to pay the amounts due on the Loan. (F) Simultaneously with the issuance of the Note, a sufficient portion of the proceeds of the Note and other available funds will be deposited by the City into an escrow account to be established pursuant to an Escrow Deposit Agreement to be executed and delivered by the City and the Escrow Holder appointed pursuant to Section 8 hereof(the "Escrow Holder"), substantially in the form attached hereto as Exhibit B (the "Escrow Deposit Agreement"), to effectuate the refunding and defeasance of the Refunded Bonds by providing for the payment of the principal of, premium, if any, and interest on the Refunded Bonds as provided in the Escrow Deposit Agreement. (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 or on behalf of the City in calendar year 2012. (H) The City 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 Note pursuant to the Loan Agreement by negotiated sale, allowing the City to issue the Note at the most advantageous time, rather than a specified advertised future date, thereby allowing the City to obtain the best possible price, interest rate and other terms for the Note and, accordingly, the City Council of the City hereby finds and determines that it is in the best financial interest of the City that a negotiated sale of the Note pursuant to the Loan Agreement be authorized. (I) The City deems it desirable and in the best interests of the City to amend certain provisions of the Original Resolution pursuant to Sections 11 and 12 hereof, such amendments to be effective upon the payment in full or defeasance of the Refunded Obligations in accordance with the provisions of Section 9.2 of the Original Resolution. (J) The City is advised that the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations thereunder establish a number of eligibility requirements for tax-exempt bonds, including, but not limited to, restrictions on the investments of bond proceeds, expenditures of bond proceeds, use and ownership of bond-financed property, rebate of excess earnings on certain "non-purpose investments," and maturity of bond issues, that these eligibility requirements apply not only to actions taken on the date of issuance of bonds but also to actions taken after the date of issuance of bonds, and that the Internal Revenue Service has taken a number of actions to encourage issuers of tax-exempt bonds to adopt written tax-exempt bond compliance procedures; and the City hereby finds and determines that it is in the best financial interests of the City to authorize the Administrative Services Director to adopt written tax-exempt bond compliance procedures as provided in Section 12 hereof. 4833-7559-0929 2 3 SECTION 4. AUTHORIZATION OF THE REFUNDING. The City hereby authorizes the Refunding. SECTION 5. ACCEPTANCE OF PROPOSAL. The City hereby accepts the proposal of the Bank to provide the City with the Loan. SECTION 6. 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 authorizes the Mayor of the City (the "Mayor") and the City Clerk or the Assistant City Clerk of the City (the "City 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 Exhibit A, with such changes, insertions and additions as they may approve, such approval to be evidenced conclusively by the Mayor's execution thereof. SECTION 7. AUTHORIZATION OF NOTE TO FINANCE THE COST OF THE REFUNDING. The City does hereby authorize the issuance of the Note in the principal amount of not exceeding $2,700,000 for the purpose of providing the City with sufficient funds to finance the cost of the Refunding. The Mayor and City Clerk are hereby authorized to execute, seal and deliver on behalf of the City, the Note and other documents, instruments, agreements and certificates necessary or desirable to effectuate the Loan and the Refunding as provided in the Loan Agreement. The Note shall be issued in the principal amount (not exceeding $2,700,000), shall bear interest at the initial interest rate (not exceeding 2.0%), shall have a final maturity date (not later than December 1, 2017) and shall have such other terms, all as set forth in the Loan Agreement and the Note authorized herein and executed and delivered in connection with Loan. The Note shall not be secured by the Reserve Account or any subaccount therein. SECTION 8. ESCROW HOLDER; EXECUTION AND DELIVERY OF ESCROW DEPOSIT AGREEMENT. The Bank of New York Mellon Trust Company, N.A., Jacksonville, Florida, is hereby appointed escrow holder(the"Escrow Holder") for the Refunded Bonds. The City hereby authorizes the Mayor and the City Clerk to execute and deliver on behalf of the City the Escrow Deposit Agreement by and between the City and the Escrow Holder substantially in the form attached hereto as Exhibit B, with such changes, insertions and additions as the Mayor or the City Clerk may approve, such approval to be evidenced conclusively by the Mayor's execution thereof. SECTION 9. DESIGNATION OF NOTE AS QUALIFIED TAX-EXEMPT OBLIGATIONS. The City hereby designates the Note described in Section 7 hereof as a "qualified tax-exempt obligation" under Section 265(b)(3) of the Code. This designation is based upon the findings of the City set forth in Section 2(G) of this Resolution and the Mayor is authorized to recertify such findings upon the issuance of the Note. SECTION 10. LIMITED OBLIGATION. The obligation of the City to pay the Note is a limited and special obligation payable solely from the Pledged Funds in the manner and to the extent set forth in the Bond Resolution 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. 4833-7559-0929 2 4 SECTION 11. AMENDMENT TO SECTION 1.1 OF ORIGINAL RESOLUTION. Effective upon the payment in full or the defeasance of the Refunded Bonds in accordance with the provisions of Section 9.2 of the Original Resolution, the definition of the term "Required Coverage Ratio" set forth in Section 1.1 of the Original Resolution is hereby amended and restated in its entirety to read as follows: "Required Coverage Ratio" shall mean 1.25. SECTION 12. AMENDMENT TO SECTION 4.5(A)(4) OF ORIGINAL RESOLUTION. Effective upon the payment in full or the defeasance of the Refunded Bonds in accordance with the provisions of Section 9.2 of the Original Resolution, Section 4.5(A)(4) of the Original Resolution is hereby amended by adding the following paragraph as the final paragraph of Section 4.5(A)(4)of the Original Resolution: Notwithstanding the foregoing provisions, in connection with the issuance of any Series of any Additional Bonds, , the Issuer may adopt a Supplemental Resolution providing that such Series of Additional Bonds shall not be secured by the Reserve Account or any subaccount therein, or establishing a separate subaccount in the Reserve Account to secure such Series of Bonds. If the Issuer provides by Supplemental Resolution that such Series of Additional Bonds shall be secured by a separate subaccount in the Reserve Account, the Issuer may also provide that the Reserve Account Requirement with respect to such separate subaccount may be less than the amount of the Reserve Account Requirement as defined herein. To the extent.a Series of Bonds is secured separately by a subaccount of the Reserve Account, the Holder or Holders of such Bonds shall not be secured by any other subaccounts or moneys in the Reserve Account. Moneys in a separate subaccount of the Reserve Account shall be maintained at the Reserve Account Requirement applicable to such Series of Bonds secured by such subaccount unless otherwise provided by Supplemental Resolution. Moneys shall be deposited into separate subaccounts of the Reserve Account on a pro-rata basis based upon the respective Reserve Account Requirements applicable to the Bonds secured by such subaccounts. Moneys withdrawn from separate subaccounts in the Reserve Account shall be applied to the payment of the Bonds secured by the respective subaccounts. If the Issuer causes a Reserve Account Insurance Policy and/or Reserve Fund Account Letter of Credit to be deposited into a separate subaccount of the Reserve Account, the issuer of such Reserve Account Insurance Policy or Reserve Account Letter of Credit must satisfy the rating requirements specified above only at the time such Reserve Account Insurance Policy or Reserve Account Letter of Credit is deposited into such separate subaccount of the Reserve Account. SECTION 13. TAX-EXEMPT BOND COMPLIANCE PROCED- URES. The Administrative Services Director is hereby assigned all compliance responsibilities relating to tax-exempt bonds of the City, including, but not limited to, compliance with federal income tax requirements relating to investments of bond proceeds, expenditures of bond proceeds, use and ownership of bond-financed property, rebate of excess earnings on certain 4833-7559-0929 2 5 "non-purpose investments," and maturity of bond issues. The Administrative Services Director is hereby authorized and directed to adopt and implement written tax-exempt bond compliance procedures pursuant to current guidelines of the Internal Revenue Service which will apply to the Note and to the City's tax-advantaged bonds currently outstanding and hereafter issued. The Council intends that the Administrative Services Director will consider including best practice provisions in adopting tax-exempt bond compliance procedures, and that such tax-exempt bond compliance procedures may be revised from time to time to reflect new Internal Revenue Service developments and to incorporate additional best practices. SECTION 14. GENERAL AUTHORIZATION. The Mayor, City Clerk, the City Manager, the Administrative Services Director, the Finance Director, and other employees 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, punctual and complete performance of the Refunding and all the terms, covenants, provisions and agreements herein contained, or as otherwise may be necessary or desirable to effectuate the purpose and intent of this Supplemental Resolution. SECTION 15. REPEAL OF INCONSISTENT DOCUMENTS. All ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. SECTION 16. EFFECTIVE DATE. This Supplemental Resolution shall take effect immediately upon its adoption. PASSED,APPROVED AND ADOPTED this 9th day of October, 2012. CITY COUNCIL OF THE CITY OF CLERMONT,FLORIDA (OFFICIAL SEAL) /'► ATTEST: By: iii1% Haro d S. Turv7 e, r.,Mayor Tracy ckroyd,City (erk Appr e .' .Th f7-and legality� Daniel F. Mantzaris, City Attorney 4833-7559-0929 2 6 EXHIBIT A Loan Agreement E 4833-7559-0929 2 EXHIBIT B Escrow Deposit Agreement 4833-7559-0929 2