Fort Walton Beach Council agenda — 04-12-11 regular — reading text

any debt payable from a lien on one or more specific non ad valorem revenue sources and any future proposed debt secured by a covenant to budget and appropriate or a specific lien on one or more non ad valorem revenue sources. Required Accounts: We would not require the City to set up a reserve fund. 3 Picket Pg. 70  a a! 7 City of Fort Walton Beach —Series 2011 Note Page 4 Documentation: All documentation would need to be acceptable to the Bank and " Bank Counsel ". The Bank and Bank Counsel would need to review and approve all documentation prior to adoption and /or acceptance bythe Issuer's Board. All opinion letters from the City's legal counsel would also rn c have to be acceptable to the Bank and would need to be addressed to the Bank. We understand that the City desires to use the law firm of Nabors, Giblin, & Nickerson to perform the duties of "Bond c Counsel ". Bond Counsel would draft the loan documents and issue the customary legal and tax co 00 U_ opinions. Based on this, the role of "Bank Counsel" would be limited to that of a "review function" d d only. We have outlined the cost of Bank Counsel in the paragraph captioned "Closing costs, fees R E and expenses" presented below. 0 a a Given the security of a non ad- valorem revenue CBA that we are offering ( as opposed to annual d N E appropriation lease structures), we believe it would be simpler and thus more cost efficient to evidence the obligation in the form of "traditional CBA revenue Note ", as opposed to a lease J v Q. structures. cc r- LO U w 0 Additional Documentation Requirements: We would require that the interest rate on the loan be N grossed up" and applied retroactively to the date of any event of taxability should it be determined 0 by the Internal Revenue Service that the tax status of the Note has changed. Such "gross up" would not exceed any statutory limit imposed by the State of Florida and would be equal to the tax 0 equivalent yield as originally contemplated by the Bank. The required documentation would also wm o: include, but not be limited to, a customary non -arbitrage certificate in form and substance acceptable to the Bank and Bank Counsel. The loan documentation would define standard events 0 NN of default as are customary for this type of transaction and would provide reasonable remedies to the Bank in the event of default under the loan documents. The City would agree to provide to the Bank (at not cost) a copy of its audited financial statement within 180 days following the end of its fiscal year as well as provide to the Bank a copy of its final annual budget for each fiscal year within 30 days of adoption or such other information as the Bank may reasonably request. Closing costs, fees and expenses: The Bank would charge no fees and assess no closing costs for its own benefit. However, we would require the City to reimburse the Bank for "Bank Counsel" expense. Bank Counsel' s expense would not exceed $ 3, 000.00 for the role outlined above in the section captioned " Documentation ". The cost of Bond Counsel, the City's Local Counsel, and the City's Financial Advisor would be paid directly by the City. Tax Status of the Note: The quoted "bank qualified" tax exempt interest rate is predicated upon the Note being designated as a "qualified" tax -exempt obligation under Section 265(b) ( 3) of the Internal Revenue Service Code of 1986, as amended ( the " Code "). 4 Packet Pg: 71  10. 2.a City of Fort Walton Beach —Series 2011 Note Page 5 Delivery: As soon as possible after all approvals. a c C ro M This proposal shall remain valid for a period of 70 days provided the City' s Governing Body accepts C LL JO this proposal within 35 days from the date of this letter. a E d Yours very truly, i O a M HANCOCK BANK d E l N J r_+ f3 CL LOn U By: Go Steven E. Cole Senior Vice President 0 Public Finance Department N C O O O VJd Accepted and Approved: 0 N The Governing Body of the City of Fort Walton Beach has accepted this Financing Proposal from Hancock Bank and hereby selects Hancock Bank to finance the above referenced Project. Approved and accepted: As of this the lq+% 1 day of (;" L 2011. Mayor Attest: Clerk 5 Pi6k6i IPg. 72  o.z.a 84a,=`