AGENDA MEMORANDUM

 

 

Meeting Date:           July 24, 2006

 

From:                          Bill Pfeilsticker, Finance Director                                                                              

Subject:                      Resolution authorizing issuance of the City’s Separate Utility System Revenue Bond Anticipation Note (Plantation Acquisition Project), Series 2006 in the aggregate principal amount not to exceed $8,000,000; authorizes the Mayor, Mayor Pro Tem, City Manager and Finance Director  to execute and deliver the 2006 Note to the Seller and taking any other actions necessary

 

 

Staff Recommendation:

Staff recommends approval of the Resolution as presented.

 

Analysis:

On June 12, 2006, Resolution 7656 was adopted authorizing the purchase of water and sewer systems from The Plantation at Leesburg.  The City completed negotiations and proposes to pay the owners of Plantation $4,000,000 down payment with the balance of $8,000,000 to be paid at the end of three years. Interest shall be at the rate of 3% of the unpaid balance per year payable semi-annually.  Revenue from the sale of water and sewer services at The Plantation will be sufficient to make payments. 

 

The proposed Resolution:

 

 

 

 

Options:

1.  Approve the Resolution as presented; or

2.  Such alternative action as the Commission may deem appropriate

 

 


Fiscal Impact

This project was not included in the FY2005-06-07 Budget. Budget adjustments will be necessary to record the revenues and expenditures.

 

Submission Date and Time:    7/21/2006 4:26 PM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

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, AUTHORIZING THE ISSUANCE OF THE CITY'S SEPARATE UTILITY SYSTEM REVENUE BOND ANTICIPATION NOTE (PLANTATION ACQUISITION PROJECT), SERIES 2006, IN AN AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING $8,000,000, IN CONNECTION WITH THE ACQUISITION OF THE SEPARATE UTILITY SYSTEM AS DEFINED IN SAID NOTE; AUTHORIZING CERTAIN OFFICIALS OF THE CITY TO EXECUTE ANY DOCUMENTS AND TAKE ANY ACTIONS REQUIRED IN CONNECTION WITH THE ISSUANCE OF SAID NOTE; PROVIDING CERTAIN OTHER DETAILS WITH RESPECT THERETO; PROVIDING AN EFFECTIVE DATE FOR THIS RESOLUTION.

WHEREAS, the City of Leesburg, Florida (the "City") adopted Resolution No. 7656 on June 12, 2006 (the "Acquisition Resolution") authorizing the execution and delivery by the City of the Agreement for Purchase and Sale of Water and Wastewater Assets (the “Sale Agreement”) by and between the City and The Plantation at Leesburg Limited Partnership (the “Seller”), subject to the terms and conditions set forth in the Sale Agreement and the Acquisition Resolution; and

WHEREAS, as part of the consideration owing to the Seller under the Sale Agreement, the City wishes to authorize the issuance, execution and delivery by and on behalf of the City of its Separate Utility System Revenue Bond Anticipation Note (Plantation Acquisition Project), Series 2006 (the “2006 Note”) in the form attached hereto as Exhibit “A” and subject to the delegation parameters set forth herein;

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

SECTION 1.  Authority.  This Resolution is adopted pursuant to Article VIII, Section 2, Constitution of the State of Florida, Chapter 166 and Section 215.431, Florida Statutes, and other applicable provisions of law (collectively, the "Act").

SECTION 2.  Definitions.  All terms used herein in capitalized form, unless otherwise defined herein, shall have the same meanings as ascribed to them in the 2006 Note, unless the context otherwise requires.  All terms used herein in capitalized form and defined in the preamble hereto shall have the meanings ascribed thereto in such preamble.

SECTION 3.  Findings.

A.        The findings and declarations of the City contained in the Acquisition Resolution are hereby expressly approved, reaffirmed and ratified.  The Acquisition Resolution has not been amended or modified and remains in full force and effect.

B.         The City deems it necessary, desirable and in the best interests of the health and welfare of the City and its inhabitants that the Separate Utility System be acquired in accordance with the terms of the Sale Agreement and that the 2006 Note be issued, subject to the delegation parameters set forth herein, as partial compensation to the Seller in connection with such acquisition.

C.         The City is authorized under the Act to issue the 2006 Note for the purposes outlined in the preceding paragraphs.

D.        As a condition to closing under the Sale Agreement, title to the real property comprising a portion of the Purchased Assets shall be conveyed to the City by special warranty deed, and the remainder of the Purchased Assets shall be conveyed to the City by bill of sale absolute, all of the Purchased Assets to be free of all claims, liens or encumbrances, whatsoever, other than Permitted Encumbrances, and the City has undertaken such other and further diligence through the City Attorney and otherwise as it has deemed appropriate to confirm the same to its satisfaction.

E.        The City has conducted such public hearings, evaluated such information, made such determinations, prepared such statements, and adopted or enacted, as applicable, such resolutions and ordinances as, in each case, may be required under Chapter 180, Florida Statutes, including, without limitation, Sections 180.03, 180.04 and 180.301 thereof.

F.         The 2006 Note has not been issued under Resolution No. 7143, adopted by the City on June 14, 2004 (as amended or supplemented from time to time, the “Master Resolution”).  The 2006 Note is not secured under or pursuant to the Master Resolution.  For purposes of the Master Resolution, the Project shall constitute a “Separately Financed Project.”

G.        The estimated Net Revenues to be derived in each year hereafter from the operation of the Separate Utility System, after payment of the Cost of Operation and Maintenance, are reasonably expected to be sufficient to pay the scheduled interest on the 2006 Note to be issued hereunder, as the same becomes due in accordance with the terms thereof.

H.        The City reasonably believes that Bonds can be issued under the Master Resolution on or prior to the Maturity Date of the 2006 Note in order to generate Bond Proceeds sufficient (in combination with funds of the City otherwise lawfully available) to pay the 2006 Note at maturity or, at the City’s election, upon early redemption in accordance with the terms thereof.

I.          The Seller will, on or prior delivery of the 2006 Note to the Seller, provide the City with any required (i) disclosure statement regarding the 2006 Note containing the information required by Section 218.385(6), Florida Statutes, and (ii) Truth-In-Bonding Statement pursuant to Sections 218.385(2) and (3), Florida Statutes in the form attached hereto as Exhibit “B”.

J.          Because the issuance of the 2006 Note is in connection with a negotiated utility acquisition transaction, it is in the best interest of the City to issue and sell the 2006 Note on a negotiated basis to the Seller, subject to the terms, conditions and limitations set forth herein, in the Acquisition Resolution and in the Sale Agreement.

K.        The limitations on interest rates set forth in Section 215.84, Florida Statutes, do not apply to the 2006 Note pursuant to Section 215.84(8).

SECTION 4.  Instrument to Constitute a Contract; Covenants in Bond Resolution Applicable.  In consideration of the acceptance of the 2006 Note authorized to be issued hereunder by those who shall hold the same from time to time, the 2006 Note shall be deemed to be and shall constitute a contract between the City and the Registered Owner of the 2006 Note.

SECTION 5.  Authorization of 2006 Note; Specifying Delegation Parameters for the Sale of such Note; and Approval of Terms and Form of 2006 Note.

A.        Subject and pursuant to the provisions hereof, the 2006 Note to be known as "City of Leesburg, Florida Separate Utility System Revenue Bond Anticipation Note (Plantation Acquisition Project), Series 2006" is hereby authorized to be issued in an aggregate principal amount not exceeding $8,000,000.

B.         Each of the Mayor, the Mayor Pro Tem, the City Manager and the Finance Director of the City (each, a “City Authorized Representative”) is hereby designated and authorized to execute and deliver the 2006 Note to the Seller in an aggregate principal amount not to exceed $8,000,000 and to approve the terms thereof, including, without limitation, the date thereof, the principal amount thereof, the interest rate with respect thereto, the purchase price thereof, the maturity date thereof and the redemption terms with respect thereto, subject, however, to the following limitations:

(i) the principal amount of the 2006 Note shall not exceed $8,000,000;

(ii) the purchase price of the 2006 Note shall not be less than 100% of the original principal amount thereof;

(iii) the stated interest rate shall not be greater than 3.000%; and

(iv) the final maturity of the 2006 Note shall not be later than October 1, 2009.

C.         The 2006 Note shall be numbered “R-01”.

D.        So long as the 2006 Note remains outstanding, the City shall maintain and keep, at the office of the Registrar, books for the registration of the 2006 Note.  The City shall act as initial Registrar and Paying Agent for the 2006 Note.

E.        Subject to the terms of this Resolution, the text of the 2006 Note shall be substantially in the form set forth in Exhibit “A” attached hereto with such omissions, insertions and variations as may be necessary or desirable and as may be approved by a City Authorized Representative (execution thereof manually or by facsimile to be conclusive evidence of such approval).

SECTION 6.     Authorization of Bonds.  For the purpose of paying the 2006 Note on or prior to its maturity date, the Bonds are authorized to be issued in an aggregate principal amount not to exceed the lesser of (i) $8,000,000 or (ii) the then outstanding aggregate principal amount of the 2006 Note, plus accrued and unpaid interest on such 2006 Note and associated costs of issuance of, and cash funded reserve or other requirements relating to, such Bonds, all in the manner and to the extent permitted under the Master Resolution.  The terms of such Bonds, including, without limitation, the date thereof, the principal amount thereof, the interest rate with respect thereto, the purchase price thereof, the maturity date thereof and the redemption terms with respect thereto shall be as set forth in a future resolution or ordinance to be adopted or enacted, as the case may be, by the City.  The foregoing shall constitute the authorization required by Section 215.431(1), Florida Statutes.

SECTION 7.   Further Authorizations.

A.        A City Authorized Representative, and the Clerk or any Deputy Clerk or the City Attorney, are hereby authorized and directed on behalf of the City to execute the 2006 Note as provided in this Resolution, and any of such officers are hereby authorized and directed upon the execution of the 2006 Note in the form and manner set forth in this Resolution to deliver the 2006 Note in the amount authorized to be issued hereunder to the Seller concurrent with the scheduled closing under the Sale Agreement and satisfaction of the conditions to closing set forth therein, in the Acquisition Resolution, and herein.

B.         A City Authorized Representative, and the Clerk or any Deputy Clerk or the City Attorney, and such other officers and employees of the City as may be designated by a City Authorized Representative or the Clerk or any Deputy Clerk or the City Attorney, are each designated as agents of the City in connection with the issuance and delivery of the 2006 Note and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents and contracts, on behalf of the City that are necessary or desirable in connection with the execution and delivery of the 2006 Note, and which are specifically authorized by, or are not inconsistent with, the terms and provisions of this Resolution, the Acquisition Resolution and the Sale Agreement.  Such officers and those so designated are hereby charged with the responsibility for the issuance of the 2006 Note.

SECTION 8  Severability.  If any one or more of the covenants, agreements or provisions of this Resolution should 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 separate from the remaining covenants, agreements or provisions of this Resolution or of the 2006 Note issued hereunder.

SECTION 9.  Controlling Law; Members of City Not Liable.  All covenants, stipulations, obligations and agreements of the City contained in this Resolution shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized by the Act and provided by the Constitution and laws of the State of Florida.  No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of the City in his individual capacity, and neither the members of the City nor any official executing the 2006 Note or any other document authorized hereby shall be liable personally on the 2006 Note, such other document, or under this Resolution or shall be subject to any personal liability or accountability by reason of the issuance or the execution by the City or such members thereof.

SECTION 10.  Effective Date.  This Resolution shall take effect immediately upon its passage in the manner provided by law.

[Remainder of Page Intentionally Left Blank.]

 

PASSED AND CERTIFIED AS TO PASSAGE this _____ day of July, 2006.

CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA

By                                                                               

Mayor

(SEAL)

Attested:

By                                                       

            City Clerk

Approved as to Form and Correctness:

By:                                                      

City Attorney

 

 

# 3823519_v2

016268-23


EXHIBIT “A”

AS FURTHER DESCRIBED HEREIN, THIS NOTE IS NONTRANSFERABLE EXCEPT WITH THE CONSENT OF THE CITY.  THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE STATE SECURITIES OR "BLUE SKY" LAW OF ANY STATE IN THE UNITED STATES OF AMERICA.

 

No. R-01                                                                                                                         $8,000,000

UNITED STATES OF AMERICA

STATE OF FLORIDA

CITY OF LEESBURG

SEPARATE UTILITY SYSTEM REVENUE BOND ANTICIPATION NOTE

(PLANTATION ACQUISITION PROJECT),

SERIES 2006

Interest

Rate

Maturity

Date

Dated

Date

 

[3.000%]

 

[_________], 2009

 

[_________], 2006

 

Registered Owner:         THE PLANTATION AT LEESBURG LIMITED PARTNERSHIP

Principal Amount:      EIGHT MILLION DOLLARS ($8,000,000)

City of Leesburg, Florida (the “City”), for value received, hereby promises to pay, solely from the Bond Proceeds and Pledged Revenues, hereinafter mentioned, to the Registered Owner on the Maturity Date specified above (or earlier as herein provided), upon the presentation and surrender hereof at the office of the City, as paying agent (the City, in such capacity, and any bank or trust company becoming successor paying agent being herein called the “Paying Agent”), the Principal Amount stated hereon, and to pay, solely from the Bond Proceeds and Pledged Revenues, hereinafter mentioned, interest on the Principal Amount from the date hereof (or from the most recent interest payment date next preceding the date hereof to which interest has been paid) at the Interest Rate per annum stated above, such interest being payable semiannually on the first day of each April and October, commencing [October 1, 2006], and on the Maturity Date or earlier redemption date (each an “Interest Payment Date”).  Interest on this Note will be calculated on the basis of a 360-day year consisting of twelve 30-day months and will be paid by check or draft made payable to the Registered Owner and mailed to the address of the Registered Owner as such name and address shall appear on the registration books of the City maintained by the City, as registrar (the City, in such capacity, and any successor acting as registrar being herein called the “Registrar”) at the close of business on the fifteenth day of the calendar month preceding each Interest Payment Date; provided, however, that if such fifteenth day is not a Business Day, then to the Registered Owner and at the registered address shown on the registration books of the City maintained by the Registrar at the close of business on the day next preceding such fifteenth day of the month which is not a Business Day (the “Record Date”); provided further, however, that payment of interest on this Note may, at the option and expense of the Registered Owner, be transmitted by wire transfer to the Registered Owner to the domestic bank account number on file with the Paying Agent as of the Record Date.  Notwithstanding the foregoing, if and to the extent there is a default in the payment of the interest due on such interest payment date, such defaulted interest shall be paid to the persons in whose name this Note is registered on the registration books of the City maintained by the Registrar at the close of business on the fifteenth day prior to a subsequent interest payment date established by notice mailed by the Registrar to the Registered Owner not less than the tenth day preceding such subsequent interest payment date. The Principal Amount and accrued interest thereon is payable in any coin or currency of the United States of America, which, on the date of payment thereof, shall be legal tender for the payment of public and private debts.

This Note is subject to redemption, in whole or in part, at par, plus accrued interest, and without premium, at the option of the City, on any Business Day, without the need for any notice to the Registered Owner.

This Note is an authorized note of the City designated as its Separate Utility System Revenue Bond Anticipation Note (Plantation Acquisition Project), Series 2006 (herein called the “Note”), in the aggregate Principal Amount of $8,000,000 issued for the purpose of financing the Project under the authority of and in full compliance with the Constitution, the City Charter, as amended and supplemented, and Statutes of the State of Florida, including particularly Chapter 166, Florida Statutes, as amended and supplemented and other applicable provisions of law, and a resolution duly adopted by the City Commission of the City on July 24, 2006 (herein referred to as the “Resolution”).  This Note is governed by the law of the State of Florida without reference to choice of law doctrine.

This Note is a special obligation of the City and is payable solely in the manner and to the extent set forth herein.  There are hereby pledged for the payment of the principal of, and interest on, this Note in accordance with the terms and the provisions hereof, the Bond Proceeds (defined below) and the Pledged Revenues (as defined below).

Neither this Note nor any obligation of the City hereunder shall be or constitute a general obligation of the City within the meaning of the Constitution of the State of Florida but shall be payable solely from and secured by a lien upon the Bond Proceeds and the Pledged Revenues in the manner and to the extent provided herein.  The Registered Owner or any other holder shall never have the right to compel the exercise of the ad valorem taxing power of the City or taxation in any form on any real or personal property to pay this Note or the interest thereon, nor shall the Registered Owner or any other holder be entitled to payment of such principal or interest from any other funds of the City other than as provided herein.  Neither the Registered Owner nor any other holder shall ever have a lien on the Project or any portion thereof.

This Note has not been issued under Resolution No. 7143, adopted by the City on June 14, 2004 (as amended or supplemented from time to time, the “Master Resolution”).  This Note is not secured under or pursuant to the Master Resolution.  For purposes of the Master Resolution, the Project hereunder shall constitute a “Separately Financed Project.”

For purposes of this Note, the following terms shall have the meanings set forth below.

Bonds” means, at the sole discretion of the City, either Additional Bonds (as defined in the Master Resolution) or Subordinate Debt (as defined in the Master Resolution) issued under and pursuant to the terms and provisions of the Master Resolution.

Bond Proceeds” means the net proceeds, after deducting (1) all manner of costs of issuance, (2) any bond insurance premium, (3) underwriter’s spread or compensation, and (4) any reserve or other requirement necessitating deposit of proceeds to the funds and accounts established under the Master Resolution in connection therewith, that are available to the City from the future issuance of Bonds for the purpose of paying this Note at maturity or, at the City’s election, upon early redemption in accordance with the terms hereof.

Business Day” means a day on which banking business is transacted in the State of Florida and the City is open to transact business.

Capacity Charges” means all capital expansion fees, system improvement fees or other similar fees and charges, including, without limitation, impact fees, separately imposed by the City as a nonuser capacity charge for the proportionate share of the cost of expanding, oversizing, separating or constructing new additions to the Separate Utility System and any income from the investment of the same.  Capacity Charges shall not include payments received by the City as reimbursement for the cost of connecting a new customer with the nearest lateral service lines of the Separate Utility System.

Cost of Operation and Maintenance” means the current expenses, paid or accrued, of operation, maintenance and repair of the Separate Utility System, as calculated in accordance with generally accepted accounting principles for governmental entities, consistently applied, and shall include, without limiting the generality of the foregoing, all costs (including allocable administrative expenses) relating to the Separate Utility System, the purchase of water, and the purchase of water or wastewater collection, distribution or treatment services (in each case to the extent the same may be treated as an allocable operating cost under generally accepted accounting principles) and insurance premiums and charges for the accumulation of appropriate reserves for self-insurance allocable to the Separate Utility System, not annually recurrent but which are reasonably expected to be incurred on a periodic basis in accordance with generally accepted accounting principles, consistently applied.  The Cost of Operation and Maintenance shall not include (i) any reserve for renewals and replacements, extraordinary repairs or any allowance for depreciation or amortization related and allocable to the Separate Utility System, (ii) the payment of any principal of and interest on this Note, and (iii) payments made by the City under leases related to the Separate Utility System that are capitalized in accordance with generally accepted accounting principles.

Gross Revenues” means all rates, fees, charges, income, rents, receipts and earnings derived by the City from or attributable to the ownership, operation, leasing or use of the Separate Utility System, or any part thereof, but shall not include (i) Capacity Charges and (ii) moneys received by the City from federal, state or local governmental grants or stipends that by their terms are restricted from being used in the manner that Gross Revenues are to be applied hereunder.

Net Revenues” means, with respect to any fiscal year of the City, the remainder of the Gross Revenues, after deducting the Cost of Operation and Maintenance for such fiscal year.

Pledged Revenues” means Net Revenues.

Project” means the acquisition of the Separate Utility System from the Registered Owner subject and pursuant to the terms and conditions of the Sale Agreement. 

Purchased Assets” has the meaning ascribed thereto in the Sale Agreement.

Sale Agreement” means the Agreement for Purchase and Sale of Water and Wastewater Assets, dated as of June 12, 2006, by and between the City and the Registered Owner. This Note is being issued as part of the consideration owed by the City to the Registered Owner under the Sale Agreement.

Separate Utility System” means the “Utility System” as defined in the Sale Agreement and includes, without limitation, the Purchased Assets.

The City and the Registered Owner and any other holder of this Note shall be conclusively deemed to have agreed and consented to the following terms and conditions:

(1)      NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN THE SALE AGREEMENT OR IN THE RESOLUTION, THIS NOTE SHALL NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED WITHOUT THE PRIOR WRITTEN CONSENT OF THE CITY.   ANY SUCH TRANSFER, ASSIGNMENT, PLEDGE OR HYPOTHECATION OF THIS NOTE IN VIOLATION OF THE FOREGOING SHALL BE NULL AND VOID AND OF NO EFFECT.   ANY SUCH TRANSFER, ASSIGNMENT, PLEDGE OR HYPOTHECATION OF THIS NOTE CONSENTED TO BY THE CITY SHALL BE TO A SINGLE OWNER OR PLEDGEE, AS THE CASE MAY BE, AND THERE SHALL BE ONLY ONE REGISTERED OWNER OF THIS NOTE AT ALL TIMES.

(2)      The Registrar shall maintain the books of the City for the registration of this Note and for the registration of transfers of this Note to the extent permitted by the City pursuant hereto.

(3)      The City, the Paying Agent and the Registrar shall deem and treat the person or entity in whose name this Note shall be registered upon the books kept by the Registrar as the absolute owner of such Note, whether such Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note as the same becomes due, and for all other purposes. All such payments so made to any such Registered Owner or upon his or its order shall be valid and effectual to satisfy and discharge the liability upon such Note to the extent of the sum or sums so paid, and neither the City, the Paying Agent, nor the Registrar shall be affected by any notice to the contrary.

(4)      In all cases in which the privilege of transferring this Note is exercised in accordance with the terms hereof, the City shall execute and the Registrar shall deliver a new Note in accordance with the provisions hereof.  There shall be no charge for any such transfer of this Note, but the City or the Registrar may require payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such permitted transfer.  Neither the City nor the Registrar shall be required (a) to transfer this Note for a period from a Record Date to the next succeeding interest payment date on such Note or (b) to transfer this Note if then called for redemption in whole or part.  However, if less than all of this Note is redeemed, the City shall, at the Registered Owner’s request, execute and deliver, upon the surrender of such partially redeemed Note, without charge to the Registered Owner, for the unpaid balance of the Principal Amount of such Note so surrendered, a new registered Note in the appropriate remaining unpaid Principal Amount.

(5)      Commencing on a date at least thirty (30) days prior to the first interest payment date under this Note for which interest has not been fully funded from other legally available funds of the City and subject to then applicable law, the City will adopt (unless the existing rate ordinance or resolution is sufficient for the purposes hereof) and cause to be in effect a rate ordinance or resolution, and the City covenants with the Registered Owner to fix, establish, revise from time to time whenever necessary, maintain and collect fees, rates, rentals and other charges for the use of the products, services and facilities constituting the Separate Utility System that will always provide Gross Revenues in each fiscal year, which together with other legally available funds budgeted by the City for such purpose, will not be less than the sum of (x) one hundred percent (100%) of the Cost of Operation and Maintenance in such fiscal year, plus (y) one hundred and ten percent (110%) of the stated interest due under this Note for such fiscal year.

Notwithstanding the foregoing, failure of the City to comply with the foregoing provision shall not constitute a default hereunder if funds are otherwise legally available to pay and the City pays stated interest when due under this Note and promptly performs a rate study recommending the rate levels necessary to comply with the foregoing provisions in the next succeeding fiscal year.  Such study must be completed within ninety (90) days after the City becomes aware of its non-compliance with this section, and the City shall adopt the recommendations of such study within thirty (30) days after the completion of the study.

(6)      The City will on or prior to the Maturity Date of this Note issue Bonds in order to generate Bond Proceeds sufficient (in combination with funds of the City otherwise lawfully available) to pay this Note at maturity or, at the City’s election, upon early redemption in accordance with the terms hereof.

(7)      The City will keep financial books, records and data concerning the operation of the Separate Utility System, its Cost of Operation and Maintenance and the receipt and disbursement of Gross Revenues related thereto.  Upon five (5) Business Days’ prior written notice from the Registered Owner, the City will make the same information available to the Registered Owner (or its duly designated representative) during the City’s regular business hours on any Business Day.  Nothing herein shall entitle the Registered Owner (or its representative) to access to information not described in the first sentence of this paragraph (7).

(8)      Notwithstanding anything to the contrary herein or in the Sale Agreement, in the event that any payment, action or notice required of the City is required or scheduled for a day which is not a Business Day, such payment, action or notice shall take place on the next succeeding Business Day with the same effect as if made on the required or scheduled date, and no default shall exist solely because of the failure to make such payment, take such action or give such notice on such required or scheduled date.

(9)      In the event that payment of principal, or any installment of interest, under this Note shall not be made by the City when the same shall become due and payable hereunder, the Registered Owner may proceed to protect and enforce its rights under this Note pursuant to the laws of the State of Florida.  In the enforcement of its rights against the City under this Note, the Registered Owner shall be entitled to sue for any and all amounts then due and unpaid from the City under this Note in respect of principal and interest, with interest on overdue payments of principal and, to the extent permitted by law, on interest at the rate of interest specified in this Note, and to recover, enforce and collect any judgment or decree against the City (but solely from Pledged Revenues and any Bond Proceeds) pursuant to writ of mandamus issued by a court of competent jurisdiction, the moneys adjudged or decreed to be payable.  Notwithstanding the foregoing, however, nothing herein shall permit an acceleration of this Note.

(10)    By accepting this Note, the Registered Owner and any other holder hereof is hereby deemed to represent and warrant to the City as follows:

(a)      It has accepted this Note from the City as partial compensation for its sale of the Separate Utility System to the City pursuant to terms of the Sale Agreement.  It has made its own inquiry and analysis with respect to the City, this Note, the security therefor and other material factors affecting and limiting the security for payment of this Note.  The City is making no representation or warranty, whatsoever, concerning the adequacy of the Pledged Revenues or the Bond Proceeds to pay principal and interest on this Note when and as due, nor is the City providing any promise or guarantee to it that the Bonds can ultimately be issued, pursuant to the terms and conditions of the Master Resolution, in order to generate sufficient Bond Proceeds to pay the same.  The foregoing shall not be interpreted or construed to alter the covenants of the City under paragraphs (5) and (6) above.

(b)      It has sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal and other tax-exempt bonds and other investment securities, to be able to evaluate the risks and merits of the investment represented by this Note.  It has had access to all the information it has deemed necessary in order to make an informed decision concerning acquisition of this Note.

(c)      It understands that this Note (1) is not being registered under the Securities Act of 1933, as amended, and is not being registered or otherwise qualified for sale under the “Blue Sky” law of any state, (2) will not be listed on any stock or other securities exchange, (3) will carry no rating from any rating service, and (4) will not be readily marketable.

(d)      It has acquired this Note in connection with the Sale Agreement and for its own investment portfolio and has no present intention of selling or otherwise disposing of this Note.

(11)    It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Note exist, have happened and have been performed in regular and due form and time as required by the Laws and Constitution of the State of Florida applicable thereto, and that the issuance of this Note is in full compliance with all constitutional or statutory limitations or provisions.

IN WITNESS WHEREOF, the City of Leesburg, Florida, has issued this Note and has caused the same to be executed by the manual signature of its Mayor or Mayor Pro Tem and the official seal of the City to be affixed hereto or lithographed or imprinted or reproduced hereon, all as of the Dated Date.

CITY OF LEESBURG, FLORIDA

(OFFICIAL SEAL)

By:                                                                              

Mayor or Mayor Pro Tem

 

ATTESTED AND COUNTERSIGNED:

_________________________________

City Clerk

 

 

APPROVED AS TO FORM AND CORRECTNESS:

 

 

_________________________________

City Attorney

 

 

 

 

# 3822735_v5

016268-23


 

EXHIBIT “B”

DISCLOSURE LETTER

Re:      $8,000,000 City of Leesburg, Florida Separate Utility Revenue Bond Anticipation Note (Plantation Acquisition Project), Series 2006

Ladies and Gentlemen:

In connection with the proposed issuance of the above-captioned note (the "Note") by the City of Leesburg, Florida (the “City”), The Plantation at Leesburg Limited Partnership (the "Seller") has agreed to acquire the Note at a negotiated sale in connection with the Agreement for Purchase and Sale of Water and Wastewater Assets by and between the City and the Seller.

The purpose of this letter is to furnish pursuant to the provisions of Sections 218.385(2), (3) and (6), Florida Statutes, as amended, certain information in respect to the arrangement contemplated for the placement and sale of the Note as follows:

(a)      An itemized list setting forth the nature and estimated amounts of expenses to be incurred by the Seller in connection with the issuance of the Note is set forth below:  [Seller to modify as appropriate]

Seller’s Counsel        $[__________]

Miscellaneous Expenses      $[__________]

(b)      No "finder" as that term is defined in Section 218.386, Florida Statutes, as amended, has entered into an understanding with the Seller, or to the knowledge of the Seller, with the City, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the City and the Seller or to exercise or attempt to exercise any influence to effect any transaction in the purchase of the Note.

(c)        The underwriting spread to be paid by the City in connection with the Note will be:

$0.00

(d)       The management fee to be paid by the City in connection with the Note will be:

$0.00

(e)      No other fee, bonus or other compensation is estimated to be paid by the Seller in connection with the issuance of the Note to any person not regularly employed or retained by the Seller (including any "finder," as defined in Section 218.386(l)(a), Florida Statutes, as amended), except as specifically enumerated as expenses to be incurred and paid by the Seller as set forth in paragraph (a) above.

(f)       Truth-in-Bonding Statement

The City is proposing to issue the Note for the purpose of financing the Project (as such project is defined in the Note).  The Note is expected to be repaid over a period of approximately 3 years.  The total interest paid over the expected life of the Note is estimated to be $[720,000].

The source of repayment or security for the Note is limited solely to the Pledged Revenues and Bond Proceeds as more fully described in the Note.  The authorization of the Note will result in an estimated average of $[240,000] of Pledged Revenues not being available to the City to finance other projects of the City each year for the approximately 3-year period.

(g)      The name and address of the Seller is set forth below:

The Plantation at Leesburg Limited Partnership

c/o Lakewood Development Company, LLC

25201 Highway 27

Leesburg, Florida  34748

 

We understand that the City does not require any further disclosure from the Seller, pursuant to Section 218.385(6), Florida Statutes, as amended.

DATED this 31st day of July, 2006.

Yours very truly,

THE PLANTATION AT LEESBURG LIMITED PARTNERSHIP

 

 

 

By:                                                                            

Title:                                                                         

 

 

# 3824208_v1