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

being indemnified as aforesaid, and if such Note be lost, stolen or destroyed, without surrender thereof. Any Note surrendered under the terms of this Section 7 shall be canceled by the Registrar. Any such duplicate Note issued pursuant to this section shall constitute an original, additional contractual obligation on the part of the City whether or not, as to the duplicate Note, the lost, stolen or destroyed Note be at any time found by anyone, and such duplicate Note shall be entitled to equal and proportionate benefits and rights as to Z lien on and source and security for payment from the special funds, as hereinafter pledged, to the same extent as the other Note issued hereunder. SECTION 8. FORM OF NOTE. The Note shall be in substantially the form of Exhibit A hereto with such variations, omissions and insertions as may be necessary, desirable and authorized or permitted by this Agreement. SECTION 9. SECURITY FOR NOTE; NOTE NOT DEBT OF THE CITY. The payment of the principal of and interest on the Note shall be secured forthwith, by a lien upon and a pledge of the Pledged Funds. Until the Note is paid or deemed paid pursuant to the provisions of this Agreement, the City hereby covenants and agrees to appropriate in its annual budget, by amendment, if necessary, from Non -Ad Valorem Revenues lawfully available in each Fiscal Year, amounts sufficient to pay the principal of and interest on the Note until the maturity thereof. Such covenant and agreement on the part of the City to budget and appropriate such amounts of Non -Ad Valorem Revenues shall be cumulative to the extent not paid, and shall continue until such Non -Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant of the City, the City does not covenant to maintain any services or programs, now provided or maintained by the City, which generate Non -Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien upon or pledge of such Non -Ad Valorem Revenues, nor does it preclude the City from pledging in the future its Non -Ad Valorem Revenues, except to the extent that the City must meet the anti -dilution test set forth in Section 10. E. herein prior to creating any lien or pledge on such Non -Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non -Ad Valorem Revenues, nor does it give the registered owner of the Note a prior claim on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the City. Such covenant to budget and appropriate Non -Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non -Ad Valorem Revenues heretofore or hereinafter entered into ( including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein shall have the effect of making available for the payment of principal and interest on the Note, in the manner described herein, Non -Ad Valorem Revenues and placing on the City a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations hereunder; subject, however, to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law and further subject to the restrictions of Section 166.241, Florida Statutes, insofar as there are not sufficient Non -Ad Valorem Revenues to comply with such covenant after the satisfaction of the funding requirements for obligations having an express lien on or VA pledge of such revenues and the funding requirements for essential governmental services of the City. The City agrees that its covenant and agreement to budget and appropriate Non -Ad Valorem Revenues shall be deemed entered into for the benefit of the holders of the Note, and this obligation may be enforced by a court of competent jurisdiction. The Note shall not constitute a general obligation or indebtedness of the City and the Lender shall never have the right to require or compel the levy of taxes upon any property of or in the City for the payment of the principal of and interest on the Note. The City does hereby irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the Note. SECTION 10. COVENANTS OF THE CITY. So long as any of the principal of or interest on the Note shall be outstanding and unpaid or until provision for payment of the Note shall have been made pursuant to Section 20 hereof, the City covenants with the Lender as follows: A. Tax Compliance. The City will take all actions within its powers necessary to maintain the exclusion from gross income of interest on the Note to the same extent as such existed on the date of issuance of the Note, and all other actions within its powers necessary to maintain the status of the Note as a " qualified tax -exempt obligation" for purposes of Section 265( b)( 3)( B) of the Code. B. Financial Statements.Not later than 180 days following the end of each Fiscal Year, the City shall provide the Lender ( in electronic format, if available) the annual audited financial statement of the City audited by the City' s certified public accountants together with the report of such accountants containing only such qualifications as are reasonably acceptable to the Lender. The City shall also provide the Lender with a certificate that no Event of Default has occurred and is continuing hereunder, and that the City is in compliance with all covenants on its part set forth herein. C. Annual Budget and Other Information. The City shall prepare its annual budget in accordance with Florida law, and shall provide the Lender a copy of its final annual budget for each Fiscal Year within 30 days of adoption thereof by the Council and such other information as the Lender may reasonably request. D. Sinking Fund. The City hereby creates and establishes a special, separate fund to be called the " City of Fort Walton Beach, Florida Capital Improvement Revenue Note, Series 2011 Sinking Fund" ( hereinafter called the " Sinking Fund "). On or before the Business Day prior to each date fixed for the payment of principal or interest on the Note, the City shall deposit from Non -Ad Valorem Revenues budgeted and appropriated pursuant to the covenant contained herein to the Sinking Fund the amounts sufficient to pay the interest and principal becoming due on the Note on the next payment date therefor. The amounts remaining on deposit in the Sinking Fund on the day following the respective interest or principal payment may be withdrawn by the City and applied for other City purposes. In no event shall any moneys remain on deposit in the Sinking Fund for a period greater than 13 months. Amounts on deposit in the Sinking Fund may be invested and reinvested by the City in Authorized Investments maturing or redeemable at the option of the City not later than the date such amounts are needed for the payments required hereunder. Except to the extent otherwise required by any provision hereof or of any tax compliance certificate delivered in connection with the delivery of the Note, all income from the investment of moneys in the fund and accounts established by this Agreement shall, upon receipt thereof, be deposited to the credit of the Sinking Fund and used for the purposes thereof. The designation of a special fund by this Agreement shall not be construed to require the establishment of any completely independent, self -balancing funds, as such term is commonly used and defined in governmental accounting, but is intended solely to constitute an earmarking of certain moneys and investments for certain purposes and to establish certain priorities for application of such moneys and investments as herein provided. The moneys and investments required to be accounted for in the foregoing fund established herein may be deposited in a single fund or account, provided that adequate accounting records are maintained to reflect the allocation of the moneys and investments on deposit therein into the fund established hereunder and to control the restricted uses of such moneys and investments for the various purposes as herein provided. The City shall not be required to make any further payments into the Sinking Fund when the aggregate amount of money and Authorized Investments in said funds and accounts is at least equal to the total principal of and interest on the Note then outstanding. E. Anti -Dilution. The City shall not incur additional debt secured by a lien on all or a portion of the Non -Ad Valorem Revenues or by a covenant to budget and appropriate unless it shall certify that the Non -Ad Valorem Revenues, after provision for essential governmental services, is no less than 1. 25 times the maximum annual debt service on ( i) all debt secured by a covenant to budget and appropriate from Non -Ad Valorem Revenues, ( ii) any debt payable from a lien on one or more specific Non -Ad Valorem Revenue sources, and ( iii) the proposed debt secured by a covenant to budget and appropriate or a specific lien on one or more Non -Ad Valorem Revenue sources. Such certificate shall be provided by the City Manager. 9 Packet Pg. 86  SECTION 11. APPLICATION OF NOTE PROCEEDS. The proceeds of the Note shall first be applied by the City to pay the costs of preparation and issuance of the Note, which shall include payment of Lender counsel' s fees in an amount not to exceed $ 3, 000, the fees and expenses of Bond Counsel and the fees and expenses of the Financial Advisor and thereafter shall be used by the City, together with other available funds, to pay costs of the Project. The Lender shall have no responsibility for the use of the proceeds of the Note, and the use of Note proceeds by the City shall in no way affect the rights of the Lender or the obligations of the City hereunder or under the Note. SECTION 12. CONDITIONS PRECEDENT. The obligation of the Lender to make the disbursement of proceeds is subject to the satisfaction of each of the following conditions precedent on or before the closing date: A. Action.The Lender shall have received a copy of the Resolution certified as complete and correct as of the closing date. B. Incumbency of Officers. The Lender shall have received an incumbency certificate of the City in respect of each of the officers who is authorized to sign this Agreement and the financing documents to which it is a party on behalf of the City. C. Opinion of City Attorney. The Lender shall have received a written opinion of the City Attorney covering matters relating to the transactions contemplated by this Agreement and the financing documents, in form and substance satisfactory to the Lender. D. Opinion of Bond Counsel. The Lender shall have received an opinion from Bond Counsel in respect of the Note, in form and substance satisfactory to the Lender. The opinion shall, at a minimum, address ( i) the enforceability of the Resolution and this Agreement, ( ii) that this Agreement and Note creates the lien it purports to create on the Pledged Funds and