AGENDA MEMORANDUM

 

 

Meeting Date:          October 26, 2009

 

From:                         Fred Morrison, City Attorney

 

Subject:                    Refunding of 1999 Capital Improvement Bonds

 

 

Staff Recommendation:

 

Adopt the proposed resolution amending Section 11.08 of Resolution No. 7162 (adopted in 2004) to allow issuance of bonds thereunder to refund the outstanding balance of the 1999 Capital Improvement Bonds.

 

Analysis:

 

I am advised that the City Manager and Financial Advisor have met with some or all of the City Commissioners in the past week to discuss the possibility of refunding the outstanding balance of the bonds issued by the City in 1999, in order to take advantage of savings to be realized as a result of more favorable interest rates currently available. In 2004 the City issued bonds pursuant to Resolution 7162, in which Section 11.08 prohibits issuance of additional obligations under the 1999 bonding resolution. The refunding would have to be accomplished under the 1999 resolution, making it necessary to amend Resolution 7162 to modify that prohibition. The proposed resolution accomplishes this goal provided the bond insurers grant their consent on behalf of the holders of the 2004 bonds. The Financial Advisor is seeking that consent at this time. Subject to receipt of consent from MBIA Insurance Corporation and National Public Finance Guarantee Corporation to the adoption of the proposed resolution, staff believes adoption of the resolution is in the best interests of the City and will allow the refunding of the 1999 bonds to move forward leading to substantial savings over the life of the obligations.

 


 

 

Options:       

 

1.    Adopt the proposed resolution, or

2.    Decline to adopt the resolution which will result in leaving the 1999 bonds in place as originally issued.

 

 

 

Fiscal Impact

According to the City’s Financial Advisor, adoption of the resolution followed by the refunding of the 1999 bonds can be expected to yield savings to the City over the life of the obligation in an amount in excess of $400,000.00.

 

 

Submission Date and Time:    10/23/09 3:25 PM____

 

Department: __City Attorney_______

Prepared by:  _Fred A. Morrison__                     

Attachments:  Yes_X__   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Newspapers:

_________________________________                                                    

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. __________________                                     

                              

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 AMENDING SECTION 11.08 OF CITY RESOLUTION NO. 7162, TO PROVIDE THAT THE CITY MAY ISSUE BONDS TO REFUND THE CITY’S OUTSTANDING REFUNDING AND CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 1999 PROVIDED THE BOND SERVICE REQUIREMENT WITH RESPECT TO THE REFUNDING BONDS IS LESS THAN THE BOND SERVICE REQUIREMENT IN EACH SUCH BOND YEAR WITH RESPECT TO SUCH SERIES 1999 BONDS AND PROVIDING AN EFFECTIVE DATE.

WHEREAS, pursuant to Resolution No. 7162 (the “Bond Resolution”), the City of Leesburg, Florida (the “City” or the “Issuer”) has issued its Capital Improvement Revenue Bonds, Series 2004 (the “2004 Bonds”); and

WHEREAS, Section 11.08 of the Bond Resolution provides in part that the City will not issue or incur additional obligations under and pursuant to City Resolution No. 5725 (the “1999 Resolution) pursuant to which it issued its Refunding and Capital Improvement Revenue Bonds, Series 1999 (the “1999 Bonds”); and

WHEREAS, the City has received a proposal from Bank of America, N.A. for the issuance of refunding bonds to refund the 1999 Bonds in which the Bond Service Requirement on such refunding bonds is less in each Bond Year than the Bond Service Requirement on the Outstanding 1999 Bonds; and

WHEREAS, the City hereby determines it to be in the best interest of the City and its residents that the Bond Resolution be amended to provide that refunding bonds may be issued to refund the 1999 Bonds as described above; and

WHEREAS, Section 15.03 of the Bond Resolution provides that when a Credit Facility is in full force and effect as to a Series of Bonds and the Bond Insurer is not insolvent and no default under the Credit Facility exists on the part of the Bond Insurer, the Bond Insurer in place of the Registered Owner of Bonds may consent to supplemental resolutions and such consent shall be deemed to constitute the consent of the Registered Owners of all the Bonds secured by such Credit Facility, and

WHEREAS, the only Bonds outstanding under the Bond Resolution are the 2004 Bonds; and

WHEREAS, the Bond Insurer of the 2004 Bonds is ________________________ (“____________”); and

WHEREAS, ____________ in its consent attached hereto has certified that its municipal bond insurance policy (the “Credit Facility”) is in full force and effect and that it is not insolvent and there is no default under the Credit Facility.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AS FOLLOWS:

SECTION 1.  The “WHEREAS” clauses contained hereinabove are true and accurate in all respects and are hereby included as a material part of this Resolution.  Capitalized terms not defined herein shall have the meaning ascribed to them in the Bond Resolution or the 1999 Resolution.

SECTION 2.  Section 11.08 of the Bond Resolution is hereby amended to read as follows (words double underlined are additions and words stricken through are deleted):

Covenant with Respect to the Senior Improvement Resolution.  The Issuer covenants that it will not issue or incur additional obligations under and pursuant to the Senior Improvement Resolution other than Additional Bonds issued to refund Bonds provided the Bond Service Requirement with respect to such Additional Bonds is less in each Bond Year than the Bond Service Requirement with respect to the Senior Improvement Bonds.  The Senior Improvement Resolution is hereby repealed and will repeal the same upon payment in full of all Senior Improvement Bonds issued and outstanding thereunder.”

SECTION 3All prior resolutions of the City, including the Bond Resolution, inconsistent with the provisions of this Resolution are hereby modified, supplemented and amended to conform with the provisions herein contained and, except as so modified, supplemented and amended hereby, shall remain in full force and effect.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


SECTION 4.  This Resolution shall become effective immediately upon its adoption.

Adopted this 26th_ day of __October_, 2009.

 

[OFFICIAL SEAL]

CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA

 

 

 

By:                                                                     

       Mayor

 

 

ATTEST:

 

 

_________________________

City Clerk

 

 

 

Approved as to Form and Correctness:

 

 

_________________________

City Attorney

 

 

 


 

 

CONSENT OF MBIA INSURANCE CORPORATION

The undersigned, an authorized officer of MBIA Insurance Corporation (“MBIA”), hereby consents pursuant to Section 15.03 of the City of Leesburg, Florida Resolution No. 7162 (the “Resolution”), which Resolution authorized the issuance of the City of Leesburg, Florida Capital Improvement Revenue Bonds, Series 2004 (the “Bonds”), to the amendment to said Resolution as set forth in the form of the City Resolution attached hereto.  The undersigned on behalf of MBIA certifies that: (i) its municipal bond insurance policy No. ____________ (the “Policy”) insuring the payments of debt service on the Bonds as provided in the Policy is in full force and effect; (ii) that MBIA is not insolvent; and (iii) that MBIA is not in default under the Policy.

MBIA INSURANCE CORPORATION

By:                                                                             
Title: Authorized Officer

 

 

Dated:  __________ ____, 2009

 


 

 

CONSENT OF
NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION

The undersigned, an authorized officer of National Public Finance Guarantee Corporation (“NPFGC”), hereby consents pursuant to Section 15.03 of the City of Leesburg, Florida Resolution No. 7162 (the “Resolution”), which Resolution authorized the issuance of the City of Leesburg, Florida Capital Improvement Revenue Bonds, Series 2004 (the “Bonds”), to the amendment to said Resolution as set forth in the form of the City Resolution attached hereto.  The undersigned on behalf of NPFGC certifies that: (i) its municipal bond insurance policy No. ____________ (the “Policy”) insuring the payments of debt service on the Bonds as provided in the Policy is in full force and effect; (ii) that NPFGC is not insolvent; and (iii) that NPFGC is not in default under the Policy.

NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION

By:                                                                             
Title: Authorized Officer

 

 

Dated:  __________ ____, 2009