AGENDA MEMORANDUM

 

Meeting Date:     October 12, 2009

 

From:                    Jerry Boop, Finance Director, CPA, CGFO

 

Subject:                A resolution of the City Commission of the City of Leesburg, Florida, authorizing and approving the issuance by the Community Redevelopment Agency for the US Highway 441 & 27 area of its not to exceed $16,000,000 principal amount of Tax Increment Revenue Bonds, Series 2009 in accordance with the requirements of Chapter 163, Part III, Florida Statutes, as amended;  approving the form of and authorizing the execution and delivery of an Interlocal Agreement with said Community Redevelopment Agency; approving the sale of said Bonds by the Community Redevelopment Agency; approving the form of a Preliminary Official Statement with respect to such Bonds; authorizing the execution of a Final Official Statement; approving the form of and authorizing the execution of a Continuing Disclosure Agreement; authorizing officers and employees of the City to take all necessary actions in connection therewith; and providing an effective date

 

 

Staff Recommendation:

The Finance Team recommends adoption of the resolution authorizing and approving the issuance by the Community Redevelopment Agency (CRA) for the US Highway 441 & 27 Area of the not to exceed $16,000,000 principal amount of Tax Increment Revenue Bonds, Series 2009, approving the form of and authorizing the execution and delivery of an Interlocal Agreement with the US Highway 441 & 27 Community Redevelopment Agency, approving the sale of Bonds by the CRA, approving the form of a Preliminary Official Statement with respect to such Bonds, authorizing the execution of a Final Official Statement with respect to such Bonds; approving the form of and authorizing the execution of a continuing disclosure commitment, Bond Purchase Agreement and authorizing officers and employees of the City to take all necessary actions in connection therewith. 

 

Analysis:

At its regular meeting held on December 8th, 2008 the City Commission authorized the issuance of a Bond Anticipation Note, (BAN) in an amount up to $7,500,000, Series 2008 and an Interlocal Agreement between the 441/27 CRA and the City.  The City wishes to continue to relocate underground, certain overhead distribution lines and make other improvements to the City’s electric transmission system within the CRA and have these projects paid by the CRA 441 & 27 Tax Increment Financing (TIF) Revenues, that also include taxes collected by the County, City and two other local entities.  Due to the nature and timing of the project, which is being done in concert with FDOT’s work on these major state roads, it is essential that the City, via this 441/27 CRA, has immediate access to funding for the completion of this project. 

 

The City is seeking to pay off the outstanding balance of the Series 2008 BAN and facilitate completion of the project with the remaining funds generated by the Series 2009 Tax Increment Revenue Bonds issued by the CRA.  The Finance Team has taken into consideration the impact of the current economy on its financial resources, specifically the devaluation in property leading to the reduction in TIF revenues by allowing for the gradual escalation of the Maximum Annual Debt Service (MADS).  MADS is not to exceed $700,000 until fiscal year 2012-13 when the first principal payment of $100,000 is made. MADS remain around $800,000 until fiscal year 2015-16 when it increases to $900,000 and it gradually escalates to $1,000,000 in fiscal year 2021-22.  Over the life of the issuance MADS never exceeds $1,200,000.  Fiscal year 2009-10 CRA TIF revenue is estimated at $948,000.  Expectations for 2010-11 are estimated at $800,000 with a recovery in revenue expected in the 2011-12 fiscal year.

 

Debt Service for the Series 2009 TIF Revenue Bonds will be covered by TIF revenue.  In addition provision has been made through the Interlocal Agreement for the General Fund to cure any deficiency, by providing for a Covenant to Budget and Appropriate (“CB&A”).  The general requirements are as follows; On March 1st of each year an officer of the agency will certify whether the pledged TIF revenues will be sufficient to pay Annual Debt Service for that year.  In the event that they are not, the City must by April 1st, include in its General Fund budget by amendment the amount necessary to cover the deficiency from legally available Non-Ad Valorem Revenues.  Prior to any City advance of funds under the CB&A, as an abundance of caution, the CRA (and City) first has access to prior year’s TIF revenues currently in the CRA Tax Redevelopment Fund (approximately $3,172,000 currently).  In addition the Finance Team has also recommended taking $600,000 out of existing TIF Funds of $3,172,000 and deposit $600,000 into a Restricted Surplus Fund.  This represents 50% of MADS, and would first be used to cure any “deficiency” PRIOR to the City’s requirement to make any payment under the CB&A support.  The Interlocal Agreement also provides for additional disclosures which will be included in the 2009 CAFR.

 

Options:

1. Approve the issuance of the Series 2009 TIF Revenue Bonds of up to $16,000,000 and accompanying Interlocal Agreement; or

2.  Such alternative action as the Commission may deem appropriate

 

Fiscal Impact

Annual Debt Service will be paid from Tax Increment Revenues backed up by the Covenant to Budget and Appropriate included in the Interlocal Agreement.  Further support provided by the CRA self funding at closing $600,000 into the Restricted Surplus Fund out of existing CRA Funds. 


 

 

Submission Date and Time:    10/9/2009 11:35 AM____

Department:  Finance

Prepared by:   _Jerry Boop____________                     

Attachments:         Yes_X___   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                 

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head __JB______

 

Finance  Dept. ______JB____________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________

 

 


 

RESOLUTION NO. _____________

A RESOLUTION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING AND APPROVING THE ISSUANCE BY THE COMMUNITY REDEVELOPMENT AGENCY FOR THE US HIGHWAY 441 & 27 AREA OF ITS NOT TO EXCEED $16,000,000 PRINCIPAL AMOUNT OF TAX INCREMENT REVENUE BONDS, SERIES 2009 IN ACCORDANCE WITH THE REQUIREMENTS OF CHAPTER 163, PART III, FLORIDA STATUTES, AS AMENDED; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF     AN INTERLOCAL AGREEMENT WITH SAID      COMMUNITY REDEVELOPMENT AGENCY; APPROVING THE SALE OF SAID BONDS BY THE COMMUNITY REDEVELOPMENT AGENCY; APPROVING THE FORM OF A PRELIMINARY OFFICIAL STATEMENT WITH RESPECT TO SUCH BONDS; AUTHORIZING THE EXECUTION OF A FINAL OFFICIAL STATEMENT; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION OF A CONTINUING DISCLOSURE COMMITMENT; AUTHORIZING OFFICERS AND EMPLOYEES OF THE CITY TO TAKE ALL NECESSARY ACTIONS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE.

 


TABLE OF CONTENTS

PAGE

ARTICLE 1         GENERAL.. 1

Section 1.1      Definitions. 1

Section 1.2      Authority for Resolution. 1

Section 1.3      Resolution to Constitute Contract 2

Section 1.4      Findings. 2

ARTICLE 2         AUTHORIZATION OF BONDS. 2

ARTICLE 3         LIMITED OBLIGATION OF THE CITY.. 2

ARTICLE 4         APPROVAL OF INTERLOCAL AGREEMENT AND AUTHORIZATION OF EXECUTION AND DELIVERY THEREOF. 3

ARTICLE 5         CONTINUING DISCLOSURE.. 3

ARTICLE 6         APPROVAL OF PRELIMINARY OFFICIAL STATEMENT. 3

ARTICLE 7         SUPPLEMENTAL RESOLUTIONS. 4

Section 7.1      Supplemental Resolution Without Bondholders' Consent 4

Section 7.2      Supplemental Resolution With Bondholders' Consent 4

ARTICLE 8         APPROVAL OF SALE OF BONDS AND EXECUTION OF BOND PURCHASE AGREEMENT. 6

ARTICLE 9         FEDERAL INCOME TAX COVENANTS. 6

ARTICLE 10       MISCELLANEOUS. 6

Section 10.1    General Authority. 6

Section 10.2    No Personal Liability. 6

Section 10.3    Severability of Invalid Provisions. 7

Section 10.4    Repeal of Inconsistent Resolutions. 7

Section 10.5    Effective Date. 7

 

Exhibit A        Issuer Resolution

Exhibit B         Interlocal Agreement

Exhibit C         Continuing Disclosure Commitment

Exhibit D        Preliminary Official Statement

Exhibit E         Bond Purchase Agreement

 


BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

ARTICLE 1

GENERAL

Section 1.1            Definitions.

When used in this Resolution, the following terms shall have the following meanings, unless the context clearly otherwise requires.  Capitalized terms not defined herein shall have the meaning ascribed to them in the Issuer Resolution as defined below. 

“Act” shall mean Chapter 166, Part II, and Section 163.358, Florida Statutes and other applicable provisions of law.

“Bonds” shall mean the Community Redevelopment Agency for the US Highway 441 & 27 Area Tax Increment Revenue Bonds, Series 2009.

“City” shall mean the City of Leesburg, Florida.

“Interlocal Agreement” shall mean the document of that name between the City and the Issuer dated the date of delivery of the Bonds pursuant to which the City, subject to the limitations therein, agrees to appropriate from Non‑Ad Valorem Revenues amounts sufficient to make certain payments on the Bonds, all as provided in the Interlocal Agreement.

“Issuer” shall mean the Community Redevelopment Agency for the US Highway 441 & 27 Area.

“Issuer Resolution” shall mean the resolution of the Issuer approving the issuance of the Bonds.

“Non‑Ad Valorem Revenues” shall have the meaning ascribed to such term in the Interlocal Agreement.

“Resolution” and “this Resolution” shall mean this instrument, as the same may from time to time be amended, modified or supplemented by any and all Supplemental Resolutions.

“Supplemental Resolution” shall mean any resolution of the City amending or supplementing this Resolution, adopted and becoming effective prior to the issuance of the Bonds or in accordance with the terms of Section 7.1 and Section 7.2 hereof.

Words importing the singular number include the plural number, and vice versa.

Section 1.2            Authority for Resolution.

This Resolution is adopted pursuant to the provisions of the Act.

Section 1.3            Resolution to Constitute Contract.

In consideration of the purchase and acceptance of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be deemed to be and shall constitute a contract between the City and the Holders from time to time of the Bonds. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the Holders of the Bonds.

Section 1.4            Findings.

It is hereby ascertained, determined and declared as follows:

(A)             For the benefit of its inhabitants, the City finds, determines and declares that it is necessary for the continued preservation of the health, welfare, convenience and safety of the City and its inhabitants for the Issuer to issue the Bonds to acquire and construct the 2009 Redevelopment Project and to provide funds to retire the Prior Note.

(B)              The City has been advised by the City’s financial advisor that the Bonds will be issued at lower interest rate than would otherwise be available to the Issuer if the City will enter into the Interlocal Agreement pursuant to which the City will covenant, among other matters, to budget and appropriate from Non‑Ad Valorem Revenues amounts sufficient to pay debt service on the Bonds to the extent available Pledged Revenues are insufficient to make such payments and deposits.

(C)              The Issuer has represented to the City that the Pledged Revenues are expected to be sufficient to pay the principal and interest on the Bonds, as the same become due, and to make all deposits required by the Issuer Resolution.

(D)             The 2009 Redevelopment Project was not scheduled to be installed, contracted, reconstructed, repaired or altered within three years of the approval by the City of the community redevelopment plan for the Issuer pursuant to a previously approved public capital improvement or project schedule or plan for the City.

ARTICLE 2

AUTHORIZATION OF BONDS

The City hereby approves the issuance by the Issuer of the Bonds substantially in accordance with the provisions of the Issuer Resolution attached hereto as Exhibit A.

ARTICLE 3

LIMITED OBLIGATION OF THE CITY

The Bonds shall not be or constitute a general obligation or indebtedness of the Issuer or the City within the meaning of Article VII, Section 12 of the Constitution of Florida, but shall be payable solely from the Pledged Revenues in accordance with the terms of the Issuer Resolution and from Non-Ad Valorem Revenues as provided in the Interlocal Agreement.  Neither the faith and credit nor the taxing power of the City is pledged to the obligations of the City under the Interlocal Agreement.

ARTICLE 4

APPROVAL OF INTERLOCAL AGREEMENT AND
AUTHORIZATION OF EXECUTION AND DELIVERY THEREOF

The Interlocal Agreement between the City and the Issuer pursuant to which, subject to certain limitations, the City will agree among other matters to budget and appropriate from Non‑Ad Valorem Revenues (as defined therein) amounts sufficient to pay debt service on the Bonds and to make certain other deposits under the Issuer Resolution to the extent Pledged Revenues are insufficient to make such payments and deposits is hereby approved in substantially the form attached hereto as Exhibit B.  The Mayor or any designee thereof and the City Clerk or any deputy or assistant City Clerk are hereby authorized to execute the Interlocal Agreement in substantially the form attached hereto, with such changes, insertions and additions as they may approve, their execution thereof being evidence of such approval.

ARTICLE 5

CONTINUING DISCLOSURE

The City agrees that it will comply with all provisions of Rule 15c2-12 of the Securities and Exchange Commission (the “Rule”) applicable to the City in connection with the issuance of the Bonds and the covenants of the City hereunder and under the Interlocal Agreement.  Subject to the provisions set forth in Exhibit “C”, the City agrees to execute a continuing disclosure commitment consistent with the covenants set forth in Exhibit “C.”  the form of the continuing disclosure commitment attached hereto as Exhibit “C” is hereby approved, subject to such changes, insertions and omissions and filling in of blanks therein as may be approved and made in such form of the continuing disclosure commitment by the officers of the City executing the same, in a manner consistent with the provisions of this Resolution, such execution to be conclusive evidence of such approval.  The Mayor of the City or his designee is hereby authorized to execute the continuing disclosure commitment on behalf of the City in compliance with the requirements of the Rule.  Notwithstanding any other provision of this Resolution, failure of the City to comply with such covenant shall not be considered an Event of Default; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations pursuant to this Article.

ARTICLE 6

APPROVAL OF PRELIMINARY OFFICIAL STATEMENT

The form and content of the draft preliminary official statement attached hereto as Exhibit “D” is hereby approved.  The Mayor of the City and City Manager are hereby authorized to make and approve such changes, modifications and revisions to the draft preliminary official statement as they or either of them may deem necessary or desirable.  The use of the preliminary official statement, as so modified, in the marketing of the Bonds is hereby approved.  The Mayor and City Manager are each hereby authorized to approve and execute, on behalf of the City, the final Official Statement relating to the Bonds with such changes from the preliminary official statement as any such officer, in his or her sole discretion, may approve, such execution to be conclusive evidence of such approval.

To enable the underwriters to comply with the Rule in connection with the offering and sale of the Bonds, the Mayor and City Manager, or either of them, are hereby authorized to execute a certificate to the effect that the Preliminary Official Statement, with such changes as may be approved by the officer executing the certificate, is, except for Permitted Omissions, “final” as of its date, and that the information therein is accurate and complete except for the Permitted Omissions.

As used herein, “Permitted Omissions” shall mean the offering price(s), interest rate(s), selling compensation, ratings, and such other terms of the Bonds and any underlying obligations depending on such matters, all with respect to the Bonds and any underlying obligations.

ARTICLE 7

SUPPLEMENTAL RESOLUTIONS

Section 7.1            Supplemental Resolution Without Bondholders' Consent.

The City, from time to time and at any time, may adopt such Supplemental Resolutions without the consent of the Bondholders (which Supplemental Resolution shall thereafter form a part hereof) for any of the following purposes:

(A)             To cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution or to clarify any matters or questions arising hereunder.

(B)              To grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders.

(C)              To add to the covenants and agreements of the City in this Resolution other covenants and agreements thereafter to be observed by the City or to surrender any right or power herein reserved to or conferred upon the Issuer.

(E)       To make any other change that, in the opinion of Bond Counsel, would not materially adversely affect the security for the Bonds. In making such determination, Bond Counsel shall not take into consideration any policy or policies issued by a Bond Insurer or any Credit Facility issued  by a Credit Facility Provider.

Section 7.2            Supplemental Resolution With Bondholders' Consent.

Subject to the terms and provisions contained in this Section 7.2 and Section 7.1 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolution or Resolutions hereto as shall be deemed necessary or desirable by the City for the purpose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution; provided, however, that if such modification or amendment will, by its terms, not take effect so long as the Bonds remain Outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of the Outstanding Bonds under this Section 7.2.

If at any time the City shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this Section 7.2, the City Clerk shall cause the Registrar to give notice of the proposed adoption of such Supplemental Resolution and the form of consent to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the registration books such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the City Clerk for inspection by all Bondholders. The City shall not, however, be subject to any liability to any Bondholder by reason of its failure to cause the notice required by this Section 7.2 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this Section 7.2.

Whenever the City shall deliver to the City Clerk an instrument or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the City may adopt such Supplemental Resolution in substantially such form, without liability or responsibility to any Holder of any Bonds, whether or not such Holder shall have consented thereto.

If the Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bonds shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the City from adopting the same or from taking any action pursuant to the provisions thereof.

Upon the adoption of any Supplemental Resolution pursuant to the provisions of this Section 7.2, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution of the City and all Holders of the Bonds then Outstanding shall thereafter be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended.

ARTICLE 8

APPROVAL OF SALE OF BONDS AND
EXECUTION OF BOND PURCHASE AGREEMENT

The City hereby approves in accordance with the provisions of the Act the sale of the Bonds by the Issuer in accordance with the terms and provisions of the Issuer Resolution.

The Mayor or City Manager is authorized to execute and deliver a Bond Purchase Agreement for the Bonds (the “Bond Purchase Agreement”) for and on behalf of the City, in substantially the form attached hereto as Exhibit E, subject to such changes, modifications, insertions and omissions and such filling-in of blanks therein as may be determined and approved by the executing official, after consultation with the City’s financial advisor and the City Attorney.  The execution of the Bond Purchase Agreement for and on behalf of the Issuer by the Mayor or City Manager shall be conclusive evidence of the Issuer’s approval of the Bond Purchase Agreement.  Subject to the provisions hereof, the City shall execute such Bond Purchase Agreement subsequent to execution thereof by the Issuer.

ARTICLE 9

FEDERAL INCOME TAX COVENANTS

The City covenants with the Holders of the Bonds that it will not make any use of the proceeds of such Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Bonds to be an “arbitrage bond” within the meaning of Section 148 of the Code, and not to do any act or fail to do any act which would cause the interest on the Bonds to become includable in the gross income of the Holders thereof for federal income tax purposes.

ARTICLE 10

MISCELLANEOUS

Section 10.1        General Authority.

The members of the City Commission and the City's officers, attorneys and other agents and employees are hereby authorized to do all acts and things required of them by this Resolution and the Interlocal Agreement or desirable or consistent with the requirements hereof for the full, punctual and complete performance of all of the terms, covenants and agreements contained in this Resolution and the Interlocal Agreement, and they are hereby authorized to execute and deliver all documents which shall be reasonably required by Bond Counsel or the Underwriters to effectuate the sale of the Bonds.

Section 10.2        No Personal Liability.

No representation, statement, covenant, warranty, stipulation, obligation or agreement herein contained, or contained in the Bonds or the Interlocal Agreement, or in any certificate or other instrument to be executed on behalf of the City in connection with the issuance of the Bonds, shall be deemed to be a representation, statement, covenant, warranty, stipulation, obligation or agreement of any member of the governing body, officer, employee or agent of the City in his or her individual capacity, and none of the foregoing persons nor any officer of the City executing any certificate or other instrument to be executed in connection with the issuance of the Bonds, shall be liable personally thereon or be subject to any personal liability or accountability by reason of the execution or delivery thereof.

Section 10.3        Severability of Invalid Provisions.

If any one or more of the covenants, agreements or provisions of this Resolution shall 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 separable from the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Bonds issued hereunder.

Section 10.4        Repeal of Inconsistent Resolutions.

All resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict.

Section 10.5        Effective Date.

This Resolution shall take effect immediately upon its adoption.

 

 

 

 

[SIGNATURES ON FOLLOWING PAGE]


PASSED, APPROVED AND ADOPTED this 12th day of October, 2009.

 




(OFFICIAL SEAL)

CITY OF LEESBURG, FLORIDA


                                                                           
Mayor

ATTEST:


                                                                          
City Clerk

Approved as to Form and Correctness:

 

 

______________________________________

Office of City Attorney


EXHIBIT A

 

ISSUER RESOLUTION

 


EXHIBIT B

 

INTERLOCAL AGREEMENT

 


EXHIBIT C

 

CONTINUING DISCLOSURE COMMITMENT

 

 

 


EXHIBIT D

 

PRELIMINARY OFFICIAL STATEMENT

 

 

 


EXHIBIT E

 

BOND PURCHASE AGREEMENT