Okaloosa County BOCC — February 18, 2014 — Inducement Resolution

RESOLUTION NO. _______ AN INDUCEMENT RESOLUTION OF OKALOOSA COUNTY, FLORIDA, RELATIVE TO THE PROPOSED ISSUANCE OF UTILITIES SYSTEM REVENUE BONDS IN ONE OR MORE SERIES FOR THE PRINCIPAL PURPOSE OF FINANCING AND REFINANCING COSTS RELATED TO THE REFUNDING OF CERTAIN INDEBTEDNESS AND THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF IMPROVEMENTS TO THE EXISTING AUBURN WATER SYSTEM, INC. UTILITY SYSTEM; PROVIDING FOR THE PRELIMINARY APPROVAL BY THE COUNTY FOR THE ISSUANCE OF NOT EXCEEDING $5,000,000 OF SUCH BONDS IN ONE OR MORE SERIES; PROVIDING FOR CERTAIN RELATED MATTERS IN CONNECTION THEREWITH AND FOR AN EFFECTIVE DATE. WHEREAS, Auburn Water System, Inc., a Florida corporation (the "Borrower"), has applied to Okaloosa County, Florida (the "County"), to issue certain tax-exempt revenue bonds in one or more series and in an initial aggregate principal amount not to exceed $5,000,000 (the "Series 2014 Bonds") for the principal purposes of (1) financing all or a portion of the costs of acquiring, constructing and equipping of improvements to the existing Auburn Water System, Inc. utility system in Okaloosa County, Florida (collectively, the "Project"), (2) refinancing certain existing indebtedness of the Borrower (the "Refunded Indebtedness"), (3) funding any necessary reserves, and (4) paying costs associated with issuance of the Series 2014 Bonds; and WHEREAS, the Borrower has requested that the County loan the proceeds of the Series 2014 Bonds to said Borrower pursuant to Chapter 159, Part II, Florida Statutes, and such other provision or provisions of Florida law as the County may determine advisable (the "Act") in order to accomplish the foregoing; and WHEREAS, the bond resolution granting the final authority for the issuance of the Series 2014 Bonds has not yet been adopted by the County and will not be adopted until documents related to the issuance of the bonds are in substantially final form; and WHEREAS, the issuance of the Series 2014 Bonds under the Act in one or more issues or series not exceeding an aggregate principal amount of $5,000,000 and the loaning of the proceeds thereof to finance the costs of the Project and refunding the Refunded Indebtedness under a loan agreement or other financing agreement which will provide that payments thereunder be at least sufficient to pay the principal of and interest and redemption premium, if any, on such Series 2014 Bonds and such other costs in connection therewith as may be incurred by the County, will assist the Borrower and promote the public purposes provided in the Act; and WHEREAS, in order to satisfy certain requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), the County authorizes the scheduling and holding of a public hearing on the proposed issuance of the Series 2014 Bonds for the purposes herein stated on the date hereof, which date shall be more than 14 days following the first publication of notice of such public hearing in a newspaper of general circulation in the County (the form of such notice is attached hereto as EXHIBIT A), which public hearing shall be conducted in a manner that provides a reasonable opportunity for persons with differing views to be heard, both orally and in writing, on the issuance of such Series 2014 Bonds and the location and nature of the Project, and shall be held in a location which, under the facts and circumstances, is convenient for the residents of the County, such notice being reasonably designed to inform residents of the County of the proposed issue, stating that the County would be the issuer of the Series 2014 Bonds, stating the time and place of the hearing and generally containing the information required by Section 147(f) of the Code and applicable regulations thereunder; and such 14 days shall be adequate for notice to be brought to the attention of all interested persons, exceeds the normal periods for notice of public hearings conducted by the County and provides sufficient time for interested persons to prepare for and to express their views at such hearing; and WHEREAS, the Borrower has agreed to execute and deliver to the County the Memorandum of Agreement (the "Memorandum of Agreement") relating to the issuance of the Series 2014 Bonds, attached hereto as EXHIBIT B; and IT IS, THEREFORE, DETERMINED AND RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF OKALOOSA COUNTY, FLORIDA, THAT: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This resolution, hereinafter called "Resolution" is adopted pursuant to the provisions of the Act and other applicable provisions of law. SECTION 2. PRELIMINARY STATEMENT. This Resolution is entered into to permit the Borrower to proceed with commitments for financing the Project and refunding the Refunded Indebtedness, to provide a limited expression of intention by the County, prior to the issuance of the Series 2014 Bonds, to issue and sell the Series 2014 Bonds and make the proceeds thereof available to finance and refinance all or part of the costs of the Project and the refunding of the Refunded Indebtedness, all in accordance with and subject to the provisions of the Constitution and other laws of the State of Florida, including the Code and this Resolution, but subject in all respects to the terms of the Memorandum of Agreement. SECTION 3. APPROVAL OF FINANCING THE PROJECT AND REFUNDING OF REFUNDED INDEBTEDNESS. The financing of the Project and refunding of Refunded Indebtedness as described in the notice of public hearing attached hereto as EXHIBIT A by the County through the issuance of the Series 2014 Bonds, pursuant to the Act, will promote the economic development and health and welfare of the citizens of the County, will provide the residents of the County with new jobs, will promote the general economic structure of the County, will thereby serve the public purposes of the Act and is hereby preliminarily approved, subject, however, in all respects to the Borrower meeting the conditions set forth in the Memorandum of Agreement to the sole satisfaction of the County. SECTION 4. EXECUTION AND DELIVERY OF MEMORANDUM OF AGREEMENT. The Chairman and the Clerk of the Board of County Commissioners of the 2 County are hereby authorized and directed to execute, for and on behalf of the County, the Memorandum of Agreement attached hereto as EXHIBIT B between the County and the Borrower providing understandings relative to the proposed issuance of the Series 2014 Bonds by the County to finance and refinance the costs of the Project in an initial aggregate principal amount not to exceed the lesser of (a) $5,000,000, or (b) the amount determined by the County and the Borrower to be necessary to accomplish the foregoing. SECTION 5. AUTHORIZATION OF THE SERIES 2014 BONDS. There is hereby authorized to be issued and the County hereby determines to issue the Series 2014 Bonds, if so requested by the Borrower and subject to the conditions set forth in the Memorandum of Agreement attached hereto, in one or more issues or series of such tax-exempt or taxable revenue bonds in an aggregate principal amount not to exceed $5,000,000 for the principal purpose of financing and refinancing the costs of the Project and refunding of the Refunded Indebtedness, and paying the costs associated with the issuance of the Series 2014 Bonds. The rate of interest payable on the Series 2014 Bonds shall not exceed the maximum rate permitted by law. SECTION 6. APPOINTMENT OF BOND COUNSEL AND UNDERWRITER. The firm of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, is hereby appointed by the County to act as bond counsel to the County and the Borrower in connection with the issuance by the County of the Series 2014 Bonds. The Underwriter for the Series 2014 Bonds will be The Frazier Lanier Company. SECTION 7. GENERAL AUTHORIZATION. The Chairman and the Clerk of the Board of County Commissioners and the County Attorney are hereby further authorized to proceed with the undertakings on the part of the County described herein, including the scheduling of the above-referenced public hearing, and are further authorized to take such steps and actions as may be required or necessary in order to cause the County to issue the Series 2014 Bonds, subject in all respects to the terms and conditions set forth herein and in the Memorandum of Agreement. SECTION 8. AFFIRMATIVE ACTION. This resolution is an affirmative action of the County toward the issuance of the Series 2014 Bonds, as contemplated in the Memorandum of Agreement, in accordance with the purposes of the laws of the State of Florida and the applicable United States Treasury Regulations. SECTION 9. LIMITED OBLIGATIONS. The Series 2014 Bonds and the interest thereon shall not constitute an indebtedness or pledge of the general credit or taxing power of the County, the State of Florida or any political subdivision or agency thereof but shall be payable solely from the revenues pledged therefor pursuant to a loan agreement or other financing agreement entered into by and between the County and the Borrower prior to or contemporaneously with the issuance of the Series 2014 Bonds. SECTION 10. LIMITED APPROVAL. The approval given herein shall not be construed as an approval of any necessary rezoning applications nor for any other regulatory permits or compliance with the County's development standards with respect to the Project and the County shall not be construed by reason of its adoption of this resolution to (a) attest to the Borrower's ability to repay the indebtedness represented by the Series 2014 Bonds, (b) have made a recommendation to prospective purchasers of the Series 2014 Bonds to purchase the 3 same, or (c) have waived any right of the County or have stopped the County from asserting any rights or responsibilities it may have in that regard. SECTION 11. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this 18th day of February, 2014. BOARD OF COUNTY COMMISSIONERS OKALOOSA COUNTY, FLORIDA (SEAL) CHARLES K. WINDES, Jr., CHAIRMAN ATTEST: DON W. HOWARD CLERK OF THE CIRCUIT COURT 4  EXHIBIT A AFFIDAVIT OF PUBLICATION OF NOTICE OF PUBLIC HEARING The Board of County Commissioners of Okaloosa County, Florida (the "County") will hold a public hearing on March 4, 2014, at _____ A.M., or as soon thereafter as the matter can be heard, at ____________________________, Crestview, Florida _______ to consider adoption of a resolution providing for the preliminary approval of the issuance by the County of not exceeding $5,000,000 of its Okaloosa County, Florida Utilities System Revenue Bonds, Series 2014 (Auburn Water System Project) (the "Series 2014 Bonds") to be issued in one or more series. The proceeds of the Series 2014 Bonds will be loaned to Auburn Water System, Inc., or an affiliate thereof (the "Borrower") for the principal purposes of (1) financing all or a portion of the costs of acquiring, construction and equipping of improvements to the utility system operated by the Borrower in _________, Okaloosa County, Florida (the "Project"), (2) refinancing certain outstanding indebtedness of the Borrower, (3) funding any necessary reserves, and (4) paying costs associated with issuance of the Series 2014 Bonds. The Project will be owned and operated by the Borrower. The Series 2014 Bonds shall be payable solely from the revenues derived by the County from a loan agreement, mortgage and security agreement and other financing documents to be entered into by and between the County and the Borrower prior to or contemporaneously with the issuance of the Series 2014 Bonds. Such Series 2014 Bonds and the interest thereon shall not constitute an indebtedness or pledge of the general credit or taxing power of the County, the State of Florida or any political subdivision or agency thereof. Issuance of the Series 2014 Bonds shall be subject to several conditions, including satisfactory documentation, the approval by bond counsel as to the tax-exempt status of the interest on all or a portion of the Series 2014 Bonds and receipt of necessary approvals for the financing. The aforementioned meeting shall be a public meeting and all persons who may be interested will be given an opportunity to be heard concerning the same. Written comments may also be submitted to the Board of County Commissioners of Okaloosa County, Florida prior to the hearing at 101 E. James Lee Boulevard, Crestview, Florida 32536, Attention: Don Howard, Clerk. ALL PERSONS FOR OR AGAINST SAID APPROVAL CAN BE HEARD AT SAID TIME AND PLACE. IF A PERSON DECIDES TO APPEAL ANY DECISION MADE BY THE COUNTY WITH RESPECT TO SUCH HEARING OR MEETING, (S)HE WILL NEED TO ENSURE THAT A VERBATIM RECORD OF SUCH HEARING OR MEETING IS MADE, WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS BASED. In accordance with the Americans with Disabilities Act, persons needing a special accommodation to participate in this proceeding should contact Okaloosa County no later than seven days prior to the proceeding at the address given in this notice or phone 850/689-5000. A-1  EXHIBIT B MEMORANDUM OF AGREEMENT FOR ISSUANCE OF PRIVATE ACTIVITY REVENUE BONDS This Memorandum of Agreement (the "Agreement") is between Okaloosa County, Florida, a political subdivision of the State of Florida (the "County") and Auburn Water System, Inc., a Florida not-for-profit corporation (the "Borrower"). WITNESSETH: 1. Preliminary Statement. Among the matters of mutual understanding and inducement which have resulted in the execution of this Agreement are the following: (a) Whereas Chapter 159, Part II, Florida Statutes (the "Act") provides that the County may issue tax-exempt revenue bonds and loan the proceeds thereof to one or more persons, firms or private corporations, or use such proceeds, to defray the cost of acquiring, by purchase or by construction, certain qualifying manufacturing and water facilities as defined in the Act. (b) The Borrower is considering financing and refinancing all or a portion of the costs of acquiring, constructing and equipping of improvements to its existing utilities system located at _____________ in Okaloosa County, Florida (the "Project"). The Project will be owned and operated by the Borrower. In connection therewith, the Borrower also intends to refund certain outstanding indebtedness of the Borrower (the "Refunded Indebtedness"). (c) The County intends this Agreement to constitute its official initial commitment, subject to the terms hereof, to issue its bonds (the "Series 2014 Bonds") in one or more series or issues pursuant to a plan of finance and the Act in the amount to be agreed upon by the County and the Borrower and to loan the proceeds thereof to the Borrower to finance and refinance the costs of the Project, including all costs incurred in connection with the issuance of the Series 2014 Bonds by the County and the Borrower, up to an amount not to exceed $5,000,000 initial aggregate principal amount. (d) The County considers the issuance and sale of the Series 2014 Bonds, for the purposes hereinabove set forth, consistent with the objectives of the Act. This commitment is an affirmative official action of the County toward the issuance of the Series 2014 Bonds as herein contemplated in accordance with the purposes of both the Act and the applicable United States Treasury Regulations. 2. Undertakings on the Part of the County. Subject to the terms hereof, the County agrees as follows: (a) Subject to the Borrower providing the County with sufficient evidence to enable the County to make the findings set forth in Section 159.29 of the Act, the County will authorize the issuance of the Series 2014 Bonds, in one or more series or issues, in the aggregate principal amount necessary and sufficient to finance all or a portion of the costs of the Project and the refunding of the Refunded Indebtedness, as the County and the Borrower shall agree in writing, B-1 but in all events, the principal amount of such Series 2014 Bonds shall not exceed the lesser of (i) the amount determined by the County and the Borrower necessary to accomplish the foregoing, or (ii) $5,000,000. (b) The County will cooperate with the Borrower and with the underwriters, placement agents or purchasers of the Series 2014 Bonds and the bond counsel of the County with respect to the issuance and sale of the Series 2014 Bonds and will take such further action and authorize the execution of such documents as shall be mutually satisfactory to the County and the Borrower for the authorization, issuance and sale of such Series 2014 Bonds and the use of the proceeds thereof to finance and refinance the costs of the Project. (c) The County may take further action to permit, in its sole discretion, the issuance from time to time in the future of additional bonds on terms which shall be set forth therein, whether pari passu with other series of bonds or otherwise, for the purpose of defraying the cost of completion, enlargements, improvements and expansions of the Project, or any segment thereof, or refunding of the Series 2014 Bonds. (d) The loan agreement, trust indenture, mortgage and other financing documents (collectively, the "Financing Agreements") between the County and the Borrower shall, under terms agreed upon by the parties, provide for payments to be made by the Borrower in such sums as shall be necessary to pay the amounts required under the Act, including the principal of and interest and redemption premium, if any, on the Series 2014 Bonds, as and when the same shall become due and payable. (e) The Series 2014 Bonds shall specifically provide that they are payable solely from the revenues derived pursuant to the Financing Agreements between the County and the Borrower or other agreements approved by the County, except to the extent payable out of amounts attributable to Bond proceeds. The Series 2014 Bonds and the interest thereon shall not constitute an indebtedness or pledge of the general credit of the County, the State of Florida or any political subdivision or agency thereof, and such fact shall be plainly stated on the face of the Series 2014 Bonds. (f) Issuance of the Series 2014 Bonds by the County shall be contingent upon compliance with all provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder, including the ability of and desirability by the County to issue obligations to fund the costs of the Project. 3. Undertakings on the Part of the Borrower. Subject to the terms hereof, the Borrower agrees as follows: (a) The Borrower will use reasonable efforts to ensure that the Series 2014 Bonds in the aggregate principal amount as stated above are sold; provided, however, that the terms of such Series 2014 Bonds and the sale and delivery thereof shall be mutually satisfactory to the County and the Borrower. (b) Prior to the issuance of the Series 2014 Bonds in the principal amount stated above, in one or more series or issues from time to time as the County and the Borrower shall agree in writing, the Borrower will enter into the Financing Agreements with the County, the B-2 terms of which shall be mutually agreeable to the County and Borrower, providing for the loan or use of the proceeds of the Series 2014 Bonds to finance the costs of the Project and the refunding of the Refunded Indebtedness. Such Financing Agreements will provide that the Borrower will be obligated to pay the County (or the trustee for holders of the Series 2014 Bonds on behalf of the County, as the case may be) sums sufficient in the aggregate to enable the County to pay the principal of and interest and redemption premium, if any, on the Series 2014 Bonds, as and when the same shall become due and payable, and all other expenses related to the issuance and delivery of the Series 2014 Bonds. (c) The Borrower shall, in addition to paying the amounts set forth in the Financing Agreements, pay all costs of operation, maintenance, taxes, governmental and other charges which may be assessed or levied against or with respect to the Project. (d) To the extent not otherwise paid from Bond proceeds as part of the costs of the Project, the Borrower hereby agrees to pay all of the reasonable out of pocket expenses of officials and representatives of the County incurred in connection with the issuance of the Series 2014 Bonds and will pay fees and expenses of the County, including those of the County Attorney. (e) In the event the Series 2014 Bonds are not issued (other than by reason of the County electing not to proceed with the financing), the Borrower hereby agrees to pay the out of pocket expenses of the officials and representatives of the County incurred in connection with the issuance of the Series 2014 Bonds, including those of the County Attorney, on a time and materials basis in accordance with the usual hourly fees chargeable to the County under their respective contracts. (f) The Borrower will hold the County free and harmless from any loss or damage and from any taxes or other charges levied or assessed by reason of any mortgaging or other disposition of the Project. (g) The Borrower agrees to indemnify and defend the County and hold the County harmless against any and all claims, losses, liabilities or damages to property or any injury or death of any person or persons occurring in connection with the financing and refinancing of the Project or the issuance of the Series 2014 Bonds and the Borrower's undertaking thereof, or in any way growing out of or resulting from this Agreement, including, without limitation, all costs and expenses of the County and reasonable attorneys' and legal assistants' fees incurred in the enforcement of any agreement of the Borrower contained herein. In the event that the Series 2014 Bonds are not issued and delivered, this indemnity shall survive the termination of this Agreement. (h) The Borrower will take such further action as may be required to implement its aforesaid undertakings and as it may deem appropriate in pursuance thereof. 4. General Provisions. All commitments of the County under Section 2 hereof and of the Borrower under Section 3 hereof are subject to the conditions that all of the following events shall have occurred not later than November 30, 2014, or such other date as shall be mutually satisfactory to the County and Borrower: B-3  (a) The County shall be lawfully entitled to issue the Series 2014 Bonds as herein contemplated. (b) The County and Borrower shall have agreed on mutually acceptable terms for the Series 2014 Bonds and the sale and delivery thereof and mutually acceptable terms and conditions of any trust instrument or instruments in respect thereto and any Financing Agreements or other agreements incidental to the financing or referred to in Sections 2 and 3 hereof. (c) Such other rulings, approvals, consents, certificates of compliance, opinions of counsel and other instruments and proceedings satisfactory to the Borrower and to the County as to such matters with respect to the Series 2014 Bonds, the financing and refinancing of the Project, the Financing Agreements and any other trust instrument or instruments, as shall be specified by the Borrower or the County, shall have been obtained from such governmental, as well as non-governmental, agencies and entities as may have or assert competent jurisdiction over or interest in matters pertinent thereto and shall be in full force and effect at the time of issuance of the Series 2014 Bonds. (d) Compliance with all applicable provisions of Chapters 159, 215 and 218, Florida Statutes, relating to the issuance of the Series 2014 Bonds, the interest rate thereon, the type of purchasers of the Series 2014 Bonds and the terms on which the Series 2014 Bonds may otherwise be issued. 5. Binding Effect. All covenants and agreements herein contained by or on behalf of the County and the Borrower shall bind and inure to the benefit of the respective successors and assigns of the County and the Borrower whether so expressed or not. B-4  IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers thereunder duly authorized as of the ______ day of February, 2014. OKALOOSA COUNTY, FLORIDA (SEAL) By: Chairman, Board of County Commissioners ATTEST: _____________________________ Clerk AUBURN WATER SYSTEM, INC. By: ATTEST: ____________________________ ____________________________ B-5