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4Agenda Item No:4. City Commission Agenda Item Report Meeting Date: September 1, 2020 Submitted by: Alfredo Riverol Submitting Department: Finance Department Item Type: Ordinance Agenda Section: Subject: An Ordinance authorizing a Loan to be evidenced by the issuance of Capital Improvement Revenue Refunding Note, Series 2020, in the principal amount not to exceed $5,100,000, for the purpose of refinancing certain of the City’s outstanding indebtedness and paying the costs of issuance of the Note and of refinancing such indebtedness; covenanting to annually budget and appropriate funds from Non-Ad Valorem Revenues to repay such Note; providing the form, terms and details of the Note; awarding the Note to JPMorgan Chase Bank, N.A. by negotiated sale; making certain covenants and agreements in connection therewith; authorizing and directing officers and employees of the City to take all necessary actions and execute all necessary documents. 4/5 (City Manager-Finance Dept.) Suggested Action: Attachments: Memo for Refinancing JPMorgan 2020 FINAL.docx Ordinance_-_Series_2020_Capital_Improv._Rev._Refunding_Note.docx South Miami - Preliminary 2020 Loan Refunding Summary 8-13-2020.pdf Miami Herald Ad.pdf MDBR Ad.pdf 1 CITY OF SOUTH MIAMI OFFICE OF THE CITY MANAGER INTER-OFFICE MEMORANDUM To:The Honorable Mayor &Members of the City Commission From:Shari Kamali, City Manager Date:August 18, 2020 SUBJECT:An Ordinance authorizing a Loan to be evidenced by the issuance of Capital Improvement Revenue Refunding Note, Series 2020, in the principal amount not to exceed $5,100,000, for the purpose of refinancing certain of the City’s outstanding indebtedness and paying the costs of issuance of the Note and of refinancing such indebtedness; covenanting to annually budget and appropriate funds from Non-Ad Valorem Revenues to repay such Note; providing the form, terms and details of the Note; awarding the Note to JPMorgan Chase Bank, N.A. by negotiated sale; making certain covenants and agreements in connection therewith; authorizing and directing officers and employees of the City to take all necessary actions and execute all necessary documents. BACKGROUND:The City of South Miami with the assistance of the City’s Financial Advisor HilltopSecurities requested bank proposals to refund a portion or all of the City's 2006 and 2015 loans. The City received two qualified proposals by the deadline of August 7, 2020 from JPMorgan Chase Bank, N.A. and Truist Bank (the new bank resulting from the merger of SunTrust and BB&T). The following provides a comparison of the proposed interest rates and prepayment flexibility for the 2032 term option requested. 2032 Term Option Bank Interest Rate Prepayment JPMorgan Bank N.A. (A) 1.044%* (B) 1.195%* *Indicative as of August 7, 2020 (A) No prepayment ability (B) No prepayment ability prior to 4/1/2024, and then prepayment without penalty Truist Bank 1.79%Prepayment with 1% penalty in whole at any time or no prepayment ability for first half of term and without penalty thereafter The proposed ordinance authorizes the issuance of the Series 2020 Note to JPMorgan Chase Bank, N.A.This recommendation is based upon the attractive indicative interest rate proposed for the 2032 term as well as the flexibility 2 providedto the Cityfor prepayment of the loan on and after April 1, 2024 without penalty (Option B). The City of South Miami has previously financed and refinanced certain capital improvements in the City with the proceeds of (i) a loan from the Florida Municipal Loan Council (the “FMLC”) pursuant to a Loan Agreement, dated as of December 1, 2006, between the City and FMLC, currently outstanding in the principal amount of $1,145,000, and (ii) a loan from Branch Banking and Trust Company evidenced by the City’s Capital Improvement Revenue Refunding Note, Series 2015, dated May 28, 2015, currently outstanding in the principal amount of $3,714,000. The City desires to obtain a loan to be evidenced by its Capital Improvement Revenue Refunding Note, Series 2020, in the principal amount not to exceed $5,100,000, to refinance all or a portion of the prior loans in order to achieve debt service savings. Based upon an updated indicative interest rate from JPMorgan Chase Bank as of August 13, 2020 (1.278%), the refunding is estimated to provide net present value debt service savings of approximately $550,000 (preliminary and subject to change). ATTACHMENTS:Ordinance - Series 2020 Capital Improv. Rev. Refunding Note HilltopSecurities Preliminary Series 2020 Refunding Summary (as of 8-13-2020) 3 010-9097-1626/3/AMERICAS ORDINANCE NO. __________1 An Ordinance authorizing a Loan to be evidenced by the issuance of Capital 2 Improvement Revenue Refunding Note, Series 2020, in the principal amount 3 not to exceed $5,100,000, for the purpose of refinancing certain of the City’s 4 outstanding indebtedness and paying the costs of issuance of the Note and of 5 refinancing such indebtedness; covenanting to annually budget and 6 appropriate funds from Non-Ad Valorem Revenues to repay such Note; 7 providing the form, terms and details of the Note; awarding the Note to 8 JPMorgan Chase Bank, N.A. by negotiated sale; making certain covenants 9 and agreements in connection therewith; authorizing and directing officers 10 and employees of the City to take all necessary actions and execute all 11 necessary documents. 12 WHEREAS, the City of South Miami, Florida (the “City”) has previously financed and 13 refinanced certain capital improvements in the City with the proceeds of (i) a loan from the Florida 14 Municipal Loan Council (the “FMLC”) pursuant to a Loan Agreement, dated as of December 1, 15 2006, between the City and FMLC, currently outstanding in the principal amount of $1,145,00016 (the “2006 Loan”), and (ii) a loan from Branch Banking and Trust Company evidenced by the 17 City’s Capital Improvement Revenue Refunding Note, Series 2015, dated May 28, 2015, currently 18 outstanding in the principal amount of $3,714,000 (the “2015 Loan” and, together with the 19 2006 Loan, the “Prior Loans”); 20 WHEREAS, the City desires to obtain a loan (the “Loan”) to be evidenced by its Capital 21 Improvement Revenue Refunding Note, Series 2020 (the “Note”), in the principal amount not to 22 exceed $5,100,000, to refinance all or a portion of the Prior Loans in order to achieve debt service 23 savings for the City; and24 WHEREAS,the City does not expect to issue more than $10 million in tax-exempt 25 obligations during calendar year 2020; and26 WHEREAS,for the reasons set forth in Section 14 of this Ordinance, the City has 27 determined that it is in the best interest of the City to authorize the negotiated sale of the Note; and28 WHEREAS,the City has received a proposal from JPMorgan Chase Bank, N.A. (the 29 “Bank”) to make the Loan to the City to be evidenced by the Note and, subject to the provisions 30 of this Ordinance, the City wishes to accept the Loan from and award the sale of the Note to the 31 Bank.32 NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND THE CITY 33 COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA THAT:34 Section 1. Recitals. The above recitals are incorporated herein as findings.35 4 Ord. No. _________ 2 010-9097-1626/3/AMERICAS Section 2. Definitions. As used herein, unless the context otherwise requires: 1 “Act” means, as applicable, Article VIII, Section 2 of the Constitution of the State of 2 Florida, Chapter 166, Florida Statutes, the Charter of the City of South Miami, and other applicable 3 provisions of law.4 “Annual Budget” means the annual budget prepared by the City for each Fiscal Year in 5 accordance with Section 12 below and in accordance with the laws of the State of Florida.6 “Annual Debt Service” means, as of any particular date of calculation, the annual debt 7 service requirement for all Debt in each such Bond Year except that with respect to any Debt for 8 which amortization installments have been established, the amount of principal coming due on the 9 final maturity date with respect to such Debt shall be reduced by the aggregate principal amount 10 of such Debt that is to be redeemed or paid from amortization installments to be made in prior 11 Bond Years.12 “Bank” means JPMorgan Chase Bank, N.A., the purchaser of the Note.13 “Bond Counsel” means Squire Patton Boggs (US) LLP.14 “Bond Year” means the annual period beginning on the first day of October of each year 15 and ending on the last day of September of the immediately succeeding year; provided however, 16 that when such term is used to describe the period during which deposits are to be made to amortize 17 principal and interest on Debt maturing or becoming subject to redemption, including without 18 limitation, interest and principal maturing or becoming subject to redemption on October 1 of any 19 year shall be deemed to mature or become subject to redemption on the last day of preceding Bond 20 Year.21 “Business Day” means any day which is not a Saturday, Sunday or day on which banking 22 institutions in Miami-Dade County, Florida, are authorized to be closed.23 “City” means the City of South Miami, Florida, a Florida municipal corporation.24 “City Attorney” means the City Attorney of the City.25 “City Manager” means the City Manager of the City, or his or her successor.26 “Clerk” means the City Clerk or any Deputy Clerk of the City. 27 “Code” means the Internal Revenue Code of 1986, as amended, including the applicable 28 regulations of the Department of the Treasury (including applicable final regulations, temporary 29 regulations and proposed regulations), the applicable rulings of the Internal Revenue Service 30 (including published Revenue Rulings and private letter rulings) and applicable court decisions. 31 “Dated Date” means the date of issuance of the Note. 32 “Debt” means as of any date and without duplication, all of the following to the extent that 33 they are payable in whole or in part from any Non-Ad Valorem Revenues: (i) all obligations of the 34 5 Ord. No. _________ 3 010-9097-1626/3/AMERICAS City for borrowed money or evidenced by bonds, debentures, notes or other similar instruments; 1 (ii) all obligations of the City as lessee under capitalized leases; and (iii) all indebtedness of other 2 persons to the extent guaranteed by, or secured by Non-Ad Valorem Revenues of the City.3 “Event of Default” has the meaning assigned to such term in Section 17 of this Ordinance.4 “Finance Director” means the Finance Director of the City, or his or her successor.5 “Financial Advisor” means Hilltop Securities Inc.6 “Fiscal Year” means the period commencing on October 1 of each year and ending on the 7 succeeding September 30, or such other consecutive 12-month period as may be hereafter 8 designated as the fiscal year of the City. 9 “Governing Body” means the Mayor and City Commission of the City, or its successor in 10 function. 11 “Holder” or “Noteholder” means the registered owner (or its authorized representative) of 12 the Note. 13 “Loan” means the loan from the Bank to the City evidenced by the Note.14 “Maximum Annual Debt Service” means, as of any particular date of calculation, the 15 largest Annual Debt Service in any Bond Year.16 “Mayor” means the Mayor of the City or, in the Mayor’s absence, the Vice Mayor of the 17 City, and such other person as may be duly authorized to act on the Mayor’s behalf.18 “Non-Ad Valorem Revenues” means all revenues of the City derived from any source 19 whatsoever other than ad valorem taxation on real and personal property, including, without 20 limitation, investment income, which are legally available for the payment by the City of debt 21 service on the Note or other Non-Self-Supporting Revenue Debt, including, without limitation, 22 legally available non-ad valorem revenues derived from sources subject to a prior pledge thereof 23 for the payment of other obligations of the City and available after payment of principal and 24 interest on such other obligations, but excluding revenues derived from the revenues of any 25 enterprise fund of the City, except to the extent that revenues derived from such sources have been 26 deposited into the City’s General Fund.27 “Non-Self-Supporting Revenue Debt” means obligations evidencing indebtedness for 28 borrowed money, including the Note, (i) the primary security for which is provided by a covenant 29 of the City to budget and appropriate Non-Ad Valorem Revenues of the City for the payment of 30 debt service on such obligations, or (ii) primarily secured or payable from another source of funds, 31 but with respect to which the City has also covenanted to budget and appropriate Non-Ad Valorem 32 Revenues of the City for the payment of debt service on such obligations, provided that obligations 33 described in this clause (ii) shall only be considered Non-Self-Supporting Revenue Debt to the 34 extent the City has included in its budget (by amendment or otherwise) the payment of such Non-35 Ad Valorem Revenues pursuant to such covenant to pay debt service on such obligations. “Non-36 Self-Supporting Revenue Debt” shall expressly not include indebtedness payable from the 37 6 Ord. No. _________ 4 010-9097-1626/3/AMERICAS revenues of a utility system, or any other enterprise fund of the City, which are pledged to the 1 payment of such indebtedness.2 “Note” means the City of South Miami, Florida Capital Improvement Revenue Refunding 3 Note, Series 2020, authorized to be issued by the City in the aggregate principal amount not to 4 exceed $5,100,000, the form of which is attached as Exhibit “A” hereto.5 “Ordinance” means this Ordinance, authorizing the issuance of the Note, as the same may 6 from time to time be amended, modified or supplemented.7 “Permitted Lender” means any bank, trust company, savings institution or insurance 8 company that is engaged as a regular part of its business in making loans and authorized to do 9 business in the State.10 “Prior Loans” has the meaning assigned to such term in the preambles to this Ordinance.11 “Refinanced Loans” means all or a portion of the Prior Loans being prepaid with the 12 proceeds of the Note, as determined by the City Manager to be in the best interest of the City in 13 order to achieve debt service savings.14 “State” means the State of Florida. 15 Section 3. Authority for Ordinance. This Ordinance is enacted pursuant to the Act. The 16 City has ascertained and hereby determined that enactment of this Ordinance is necessary to carry 17 out the powers, purposes and duties expressly provided in the Act, that each and every matter and 18 thing as to which provision is made herein is necessary in order to carry out and effectuate the 19 purposes of the City in accordance with the Act and to carry out and effectuate the plan and 20 purpose of the Act, and that the powers of the City herein exercised are in each case exercised in 21 accordance with the provisions of the Act and in furtherance of the purposes of the City. 22 Section 4. Ordinance to Constitute Contract. In consideration of the purchase and 23 acceptance of the Note by those who shall hold the same from time to time, the provisions of this 24 Ordinance shall be a part of the contract of the City with the Holder, and shall be deemed to be 25 and shall constitute a contract between the City and the Holder. The provisions, covenants and 26 agreements herein set forth to be performed by or on behalf of the City shall be for the benefit, 27 protection and security of the Holder in accordance with the terms hereof. 28 Section 5. Authority for Issuance of Note; Designation Under Code; Prepayment of 29 Refinanced Loans. Subject and pursuant to the provisions hereof, the Loan from the Bank to be 30 evidenced by a note to be known as “City of South Miami, Florida Capital Improvement Revenue 31 Refunding Note, Series 2020” is hereby authorized, and the Note is hereby authorized to be issued 32 in an aggregate principal amount not to exceed Five Million and One Hundred Thousand Dollars33 ($5,100,000) for the purpose of refinancing the Refinanced Loans and paying the costs of issuance 34 of the Note and of refinancing the Refinanced Loans.35 The Note is hereby designated as a “qualified tax-exempt obligation” under 36 Section 265(b)(3)(B) of the Code.37 7 Ord. No. _________ 5 010-9097-1626/3/AMERICAS The prepayment of the Refinanced Loans is hereby authorized.1 Section 6. Description of Note; Assignment and Transfer of Note. The Note shall be 2 issued in one (1) typewritten certificate, shall be dated the Dated Date and shall mature on April 1, 3 2032. The Note shall bear interest from the Dated Date at a fixed interest rate, subject to 4 adjustment as provided in the Note, of not to exceed 2.00% per annum, such interest rate to be set 5 forth in the Note. Interest on the Note shall be calculated on the basis of a 360 day year consisting 6 of twelve thirty day months. Accrued interest on the Note will be payable semiannually on April 1 7 and October 1 of each year, beginning on April 1, 2021. Principal of the Note will be payable in 8 annual installments on April 1 of each year, beginning April 1, 2021, as shall be set forth in the 9 Note. Additional details of the Note shall be as provided in the Note, the form of which Note is 10 attached hereto as Exhibit “A”. 11 The Note shall be in registered form, contain substantially the same terms and conditions 12 as set forth in Exhibit “A” hereto, shall be payable in lawful money of the United States of 13 America, and the principal thereof, interest thereon and any other payments thereunder shall be 14 payable by check, wire, draft or bank transfer to the Holder at such address as may be provided in 15 writing by such Holder to the Finance Director. So long as the Note shall remain outstanding, the 16 City shall maintain and keep books for the registration and transfer of the Note. 17 The Note may not be assigned or transferred except in whole and in a denomination of not 18 less than $100,000 to a Permitted Lender, with the prior written consent of the City. In no event 19 will the Note be assigned or transferred to any kind of trust.20 Section 7. Execution of Note. The Note shall be executed in the name of the City by the 21 manual signature of the City Manager, the seal of the City shall be imprinted, reproduced or 22 lithographed on the Note, and the Note shall be attested to by the manual signature of the Clerk. If 23 any officer whose signature appears on the Note ceases to hold office before the delivery of the 24 Note, such signature shall nevertheless be valid and sufficient for all purposes. In addition, the 25 Note may bear the signature of, or may be signed by, such persons as at the actual time of execution 26 of the Note shall be the proper officers to sign the Note although at the date of the Note or the date 27 of delivery thereof such persons may not have been such officers. 28 Section 8. Note Mutilated, Destroyed, Stolen or Lost. If the Note is mutilated, 29 destroyed, stolen or lost, the City may, in its discretion (i) deliver a duplicate replacement Note, 30 or (ii) pay a Note that has matured or is about to mature. A mutilated Note shall be surrendered to 31 and canceled by the Clerk or its duly authorized agent. The Holder must furnish the City or its 32 agent proof of ownership of any destroyed, stolen or lost Note, post satisfactory indemnity, comply 33 with any reasonable conditions the City or its agent may prescribe, and pay the City’s or its agent’s 34 reasonable expenses. 35 Any such duplicate Note shall constitute an original contractual obligation of the City 36 whether or not the destroyed, stolen, or lost Note be at any time found by anyone, and such 37 duplicate Note shall be entitled to equal and proportionate benefits and rights as to lien on, and 38 source of and security for payment from, the funds pledged to the payment of the Note so 39 mutilated, destroyed, stolen or lost.40 8 Ord. No. _________ 6 010-9097-1626/3/AMERICAS Section 9. Provisions for Prepayment. The Note may be prepaid by the City prior to its 1 maturity as provided in the Note.2 Section 10. Note Not to be General Indebtedness of the City. The Note shall not be or 3 constitute a general obligation or indebtedness of the City within the meaning of the Constitution 4 of the State, but shall be payable from and secured solely by the covenant of the City to budget 5 and appropriate Non-Ad Valorem Revenues, in the manner and to the extent herein and in the Note 6 provided. No Holder shall ever have the right to compel the exercise of the ad valorem taxing 7 power of the City or taxation in any form on any real or personal property to pay the Note, the 8 interest thereon or any other amounts due thereunder, nor shall any Holder be entitled to payment 9 of such principal, interest or any other amounts due thereunder from any funds of the City other 10 than the Non-Ad Valorem Revenues, all in the manner and to the extent herein and in the Note 11 provided. The Holders shall have no lien upon any real or tangible personal property of the City.12 Section 11. Covenant to Budget and Appropriate.The City hereby covenants to budget 13 and appropriate in its Annual Budget, by amendment if necessary, from Non-Ad Valorem 14 Revenues in each Fiscal Year, sufficient moneys to pay the principal of and interest on the Note 15 and any other amounts due thereunder in such Fiscal Year, until the Note is paid in full. Such 16 covenant and agreement on the part of the City shall be cumulative to the extent not paid, and shall 17 continue until Non-Ad Valorem Revenues or other available funds in amounts sufficient to make 18 all required payments shall have been budgeted, appropriated and actually paid. Notwithstanding 19 the foregoing covenant of the City, the City does not covenant to maintain any services or programs 20 now provided or maintained by the City which generate Non-Ad Valorem Revenues.21 Such covenant to budget and appropriate does not create any lien upon or pledge of such 22 Non-Ad Valorem Revenues nor does it preclude the City from pledging in the future a particular 23 source or sources of non-ad valorem revenues. Such covenant to budget and appropriate Non-Ad 24 Valorem Revenues is subject in all respects to the payment of obligations heretofore or hereafter 25 entered into, including but not limited to the payment of debt service on bonds and other debt 26 instruments having an express lien on or pledge of such revenues.However, the covenant to budget 27 and appropriate in its Annual Budget for the purposes and in the manner stated herein shall have 28 the effect of making available in the manner described herein Non-Ad Valorem Revenues and 29 placing on the City a positive duty to budget and appropriate, by amendment if necessary, amounts 30 sufficient to meet its obligations hereunder; subject, however, in all respects to the restrictions of 31 Section 166.241(3), Florida Statutes, which provides, in part, that the governing body of each 32 municipality make appropriations for each fiscal year which, in any one year, shall not exceed the 33 amount to be received from taxation or other revenue sources; and subject further, to the payment 34 of services and programs which are for essential public services affecting the health, welfare and 35 safety of the inhabitants of the City or which are legally mandated by applicable law.36 Section 12. Operating Budget; Financial Statements. Before the first day of each Fiscal 37 Year, the Governing Body shall prepare, approve and adopt in the manner prescribed by law, a 38 detailed Annual Budget. Such Annual Budget shall, subject to Section 11 hereof, provide for 39 revenues sufficient to comply with the City’s obligations hereunder, including any unsatisfied 40 obligations from prior Fiscal Years. The City shall annually provide to the Bank a copy of the 41 Annual Budget and the City’s audited financial statements prepared in accordance with law and 42 including the opinion of an independent certified public accountant, each within thirty (30) days 43 9 Ord. No. _________ 7 010-9097-1626/3/AMERICAS of its completion and, in the case of the audited financial statements, within 270 days of the end 1 of each Fiscal Year, commencing with the Fiscal Year ending September 30, 2020.2 Section 13. Issuance of Additional Non-Self Supporting Revenue Debt. Except with 3 respect to Non-Self-Supporting Revenue Debt issued to refund existing Non-Self-Supporting 4 Revenue Debt where the aggregate debt service of the refunding Non-Self-Supporting Revenue 5 Debt will not be greater than that for the Non-Self-Supporting Revenue Debt being refunded, the 6 City may incur additional Non-Self-Supporting Revenue Debt only if, as set forth in a certificate 7 of the Mayor or the City Manager executed prior to the issuance thereof, a copy of which shall be 8 provided to the Bank, the average amount of Non-Ad Valorem Revenues for the two Fiscal Years 9 for which audited financial statements are available most recently concluded prior to the proposed 10 incurrence of the Debt equals or exceeds 1.50 times the Maximum Annual Debt Service in all 11 future Bond Years on all outstanding Debt and the Debt proposed to be issued.12 For purposes of calculating the foregoing, if any Debt bears a rate of interest that is not 13 fixed for the entire term of the Debt (excluding any provisions that adjust the interest rate upon a 14 change in tax law or in the tax treatment of interest on the debt or upon a default), then the interest 15 rate on such Debt shall be assumed to be the higher of (a) the average rate of actual interest borne 16 by such Debt during the most recent complete month prior to the date of calculation, and (b) (i) for 17 Debt the interest on which is excluded from gross income of the holders thereof for federal tax 18 purposes, The Bond Buyer Revenue Bond Index last published in the month preceding the date of19 calculation, or (ii) for Debt the interest on which is not excluded from the gross income of the 20 holders thereof for federal tax purposes, the yield on a U.S. Treasury obligation with a constant 21 maturity closest to but not before the maturity date of such Debt, as reported in Statistical Release 22 H.15 of the Federal Reserve on the last day of the month preceding the date of issuance of such 23 proposed Debt, plus one percent; provided, however, that if the City shall have entered into an 24 interest rate swap or interest rate cap or shall have taken any other action which has the effect of 25 fixing or capping the interest rate on such Debt for the entire term thereof, then such fixed or 26 capped rate shall be used as the applicable rate for the period of such swap or cap, and provided 27 further that if The Bond Buyer Revenue Bond Index or Statistical Release H.15 of the Federal 28 Reserve is no longer available or no longer contains the necessary data, such other comparable 29 source of comparable data as selected by the Bank shall be utilized in the foregoing calculations. 30 For the purpose of calculating the foregoing, “balloon indebtedness” (as defined in the 31 immediately succeeding sentence) shall be assumed to amortize over a period not to exceed 20 32 years in substantially equal annual payments at the interest rate set forth in the instrument 33 evidencing such Debt if the interest rate is fixed and, if the interest rate is not fixed, at the rate 34 calculated pursuant to the immediately preceding sentence and any put or tender rights of a lender 35 with respect to any Debt shall be ignored and such Debt shall be assumed to mature as otherwise 36 provided in the instrument evidencing such Debt. “Balloon indebtedness” is any Debt twenty 37 percent (20%) or more of the principal amount of which comes due in any single Fiscal Year.38 Section 14. Award of Note by Negotiated Sale. Because of the nature of the Note, the 39 maturity of the Note and the prevailing market conditions, and the recommendations of the 40 Financial Advisor, the negotiated sale of the Note to the Bank in substantial accordance with the 41 Bank’s proposal delivered to the City (the “Bank’s Proposal”), is hereby found to be in the best 42 interests of the City and, upon compliance with the requirements of Section 218.385, Florida 43 10 Ord. No. _________ 8 010-9097-1626/3/AMERICAS Statutes, authorized; provided, however, that the provisions of this Ordinance and the Note shall 1 control to the extent of any conflict with the Bank’s Proposal.2 Section 15. Modification, Amendment or Supplement. This Ordinance may be 3 modified, amended or supplemented by the City from time to time prior to the issuance of the Note 4 hereunder. Thereafter, no modification, amendment or supplement of this Ordinance, or of any 5 ordinance amendatory hereof or supplemental hereto, may be made without the consent in writing 6 of the Holder.7 Section 16. Tax Compliance. Neither the City, nor any third party over whom the City 8 has control, will make any use of the proceeds of the Note or of the refinanced capital 9 improvements at any time during the term of the Note which would cause the Note (i) to be (a) a 10 “private activity bond” within the meaning of Section 103(b)(1) of the Code, or (b) an “arbitrage 11 bond” within the meaning of Section 103(b)(2) of the Code, or (ii) not to be a “qualified tax-12 exempt obligation” within the meaning of Section 265(b)(3)(B) of the Code. The City covenants 13 throughout the term of the Note to comply with the requirements of the Code and to take all actions 14 necessary to maintain the exclusion from gross income for purposes of the Code of interest on the 15 Note and the status of the Note as a “qualified tax-exempt obligation” to the same extent as on the 16 date of issuance of the Note. The Finance Director is authorized to execute and deliver a tax 17 compliance certificate and a Form 8038-G to be filed with the Internal Revenue Service, in the 18 forms approved by Bond Counsel and the City Attorney.19 Section 17. Events of Default; Remedies.20 A.Events of Default. Any one or more of the following events shall be an 21 “Event of Default”:22 (i)the City shall fail to pay the principal of or interest on the Note when 23 due;24 (ii)the City shall (a) admit in writing its inability to pay its debts 25 generally as they become due, (b) file (or have filed against it and not dismissed within 90 days) a 26 petition in bankruptcy or take advantage of any insolvency act, (c) make an assignment for the 27 general benefit of creditors, (d) consent to the appointment of a receiver for itself or for the whole 28 or any substantial part of its property, or (e) be adjudicated a bankrupt; or29 (iii)the City shall default in the due and punctual performance of any of 30 its covenants, conditions, agreements and provisions contained herein or in the Note, and such 31 default shall continue for thirty (30) days after written notice specifying such default and requiring 32 the same to be remedied shall have been given to the City by the Holder of the Note; provided that33 such default shall not be an Event of Default if the City within such 30 day period commences and 34 carries out with due diligence to completion (although not necessarily within such thirty (30) day 35 period) such action as is necessary to cure the same. 36 B.Remedies on Default.If an Event of Default shall have occurred and be 37 continuing, the Holder may proceed to protect and enforce its rights hereunder by a suit, action or 38 special proceeding in equity or at law, by mandamus or otherwise, either for the specific 39 performance of any covenant or agreement contained herein or for enforcement of any proper legal 40 11 Ord. No. _________ 9 010-9097-1626/3/AMERICAS or equitable remedy as such Holder shall deem most effectual to protect and enforce the rights 1 aforesaid.2 No remedy herein conferred upon or reserved to the Holder is intended to be exclusive of 3 any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be 4 in addition to every other remedy given hereunder or now or hereafter existing at law or in equity.5 No delay or omission of a Holder to exercise any right or power accruing upon any Event 6 of Default shall impair any such right or power or shall be construed to be a waiver of any such 7 Event of Default, or an acquiescence therein; and every power and remedy given by this article 8 may be exercised from time to time, and as often as may be deemed expeditious by a Holder.9 Notwithstanding the foregoing, under no circumstances will the remedies for an Event of 10 Default include acceleration of the payment of the Note.11 Section 18. General Authority. The officers and employees of the City are hereby 12 authorized and directed to take all other necessary actions and execute all necessary documents to 13 carry out the provisions of this Ordinance, including to the extent necessary, an escrow deposit 14 agreement in connection with the prepayment of the 2006 Loan, in such form as shall be approved 15 by Bond Counsel and the City Attorney. 16 Section 19. Severability. If any one or more of the covenants, agreements or provisions 17 of this Ordinance should be held contrary to any express provision of law or contrary to the policy 18 of express law, though not expressly prohibited, or against public policy, or shall for any reason 19 whatsoever be held invalid, then such covenants shall be null and void and shall be deemed 20 separate from the remaining covenants, agreements or provisions of this Ordinance or of the Note 21 issued hereunder, which remaining covenants, agreements and provisions shall remain in full force 22 and effect. 23 Section 20. No Third-Party Beneficiaries. Except as herein otherwise expressly 24 provided, nothing in this Ordinance expressed or implied is intended or shall be construed to confer 25 upon any person, firm or corporation other than the City and the Holder from time to time of the 26 Note issued hereunder, any right, remedy or claim, legal or equitable, under or by reason of this 27 Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and 28 being for the sole and exclusive benefit of the City and the Holder from time to time of the Note 29 issued hereunder. 30 Section 21. Controlling Law; Officials of City Not Liable. All covenants, stipulations, 31 obligations and agreements of the City contained in this Ordinance and the Note shall be covenants, 32 stipulations, obligations and agreements of the City to the full extent authorized by the Act and 33 provided by the Constitution and laws of the State. No covenant, stipulation, obligation or 34 agreement contained in this Ordinance or the Note shall be a covenant, stipulation, obligation or 35 agreement of any present or future member, agent, officer or employee of the City or the Governing 36 Body in his or her individual capacity, and neither the members or officers of the Governing Body 37 nor any official executing the Note shall be liable personally on the Note or shall be subject to any 38 personal liability or accountability by reason of the issuance or the execution of the Note by the 39 City or such members thereof. 40 12 Ord. No. _________ 10 010-9097-1626/3/AMERICAS Section 22. Repeal of Inconsistent Ordinances.All ordinances or parts thereof in 1 conflict herewith are, to the extent of such conflict, superseded and repealed.2 Section 23. Effective Date. This Ordinance shall become effective immediately upon its 3 enactment.4 PASSED AND ENACTED this ____ day of __________, 2020.5 6 ATTEST:APPROVED:7 8 9 10 11 CITY CLERK MAYOR12 13 14 READ AND APPROVED AS TO FORM,COMMISSION VOTE:15 LANGUAGE, LEGALITY AND16 EXECUTION THEREOF:17 18 19 20 21 CITY ATTORNEY22 23 13 A-1 010-9097-1626/3/AMERICAS EXHIBIT “A” FORM OF NOTE REGISTERED REGISTERED No. R-$____________ UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF SOUTH MIAMI, FLORIDA CAPITAL IMPROVEMENT REVENUE REFUNDING NOTE, SERIES 2020 Interest Rate Maturity Date Date of Original Issuance _____%April 1, 2032 __________, 2020 REGISTERED OWNER:JPMORGAN CHASE BANK, N.A. PRINCIPAL AMOUNT:DOLLARS KNOW ALL MEN BY THESE PRESENTS, that the City of South Miami, Florida, a municipal corporation of the State of Florida (hereinafter called the “City”) for value received, hereby promises to pay to the Registered Owner identified above, or to registered assigns or legal representatives, but solely from the revenues hereinafter mentioned, on the dates hereinafter provided, the Principal Amount identified above, and to pay, solely from such revenues, interest on the Principal Amount remaining unpaid from time to time, at the interest rate per annum set forth herein (the “Note Rate”), until the entire Principal Amount has been repaid. Principal of and interest on this Note will be paid by bank wire, check, draft or bank transfer delivered to the Registered Owner hereof at such address as may be provided in writing by the Registered Owner to the City no later than the close of business on the fifteenth day next preceding each Payment Date (as defined below). Interest on this Note shall be calculated on the basis of a 360 day year consisting of twelve thirty day months. Payments of accrued interest will be due on April 1 and October 1 of each year, beginning April 1, 2021 (each, an “Interest Payment Date”). Payments of principal on this Note will be due on April 1 of each year, beginning April 1, 2021, in accordance with Schedule 1 attached hereto. Each date when principal and/or interest on this Note is due is a “Payment Date.” If any Payment Date is not a Business Day, the payment otherwise due on such Payment Date shall be due on the next succeeding Business Day as if paid on such Payment Date. Upon the occurrence and during the continuance of an Event of Default (as defined in the Ordinance defined below), this Note shall bear interest at the Note Rate plus 2% per annum. This Note may be prepaid by the City, at its option, prior to its maturity, in whole or in part, and if in part, in multiples of $5,000 and credited against the principal amounts due as set forth in Schedule 1 in inverse order, on or after April 1, 2024, on any Interest Payment Date, in an 14 A-2 010-9097-1626/3/AMERICAS amount equal to 100% of the principal amount being prepaid, without premium, upon not less than 45 days’ written notice to the Registered Owner. This Note is issued in the principal amount of $___________ to refinance the Refinanced Loans (as defined in the Ordinance), pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Article VIII, Section 2 of the Constitution of the State of Florida, Chapter 166, Florida Statutes and the Charter of the City (collectively, the “Act”), and Ordinance No. ______, enacted by the Mayor and City Commission of the City on ____________ __, 2020 (the “Ordinance”). This Note and the interest hereon and any other amount due hereunder are secured by City’s covenant to budget and appropriate in each Fiscal Year from its Non-Ad Valorem Revenues, sufficient moneys to pay the principal of and interest on this Note and any other amounts due hereunder, until this Note has been paid in full, as more particularly set forth in the Ordinance. Reference is hereby made to the Ordinance for the provisions, among others, relating to the terms and security for the Note, the rights and remedies of the Registered Owner of the Note and the limitations thereon, and the extent of and limitations on the City’s rights, duties and obligations, to all of which provisions the Registered Owner hereof for himself and his successors in interest assents by acceptance of this Note. All terms used herein in capitalized form, unless otherwise defined herein, shall have the meanings ascribed thereto in the Ordinance. This Note has been designated by the City as a “qualified tax-exempt obligation” under Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended (the “Code”). If for any reason this Note loses its “qualified tax-exempt obligation” status under Section 265(b)(3)(B) of the Code (an “Event of BQ Loss”), this Note shall bear interest from the earliest effective date of such Event of BQ Loss at the Non-BQ Rate (hereinbelow defined). No Event of BQ Loss shall be deemed to occur unless the City has been given timely written notice of such occurrence by the Registered Owner and, to the extent permitted by law, an opportunity to participate in and seek, at the City’s own expense, a final administrative determination by the Internal Revenue Service or determination by a court of competent jurisdiction (from which no further right of appeal exists) as to the occurrence of such Event of BQ Loss; provided that the City, at its own expense, delivers to the Registered Owner an opinion of bond counsel acceptable to such Registered Owner to the effect that such appeal or action for judicial or administrative review is not without merit and there is a reasonable possibility that the judgment, order, ruling or decision from which such appeal or action for judicial or administrative review is taken will be reversed, vacated or otherwise set aside. “Non-BQ Rate” shall mean, upon an Event of BQ Loss, the interest rate per annum that shall provide the Registered Owner with the same after tax yield that the Registered Owner would have otherwise received had the Event of BQ Loss not occurred, taking into account the inability of the Registered Owner to deduct a portion of its carrying cost for this Note as a result of such Event of BQ Loss. The Registered Owner shall provide the City with a written statement explaining the calculation of the Non-BQ Rate, which statement shall, in the absence of manifest error, be conclusive and binding on the City. 15 A-3 010-9097-1626/3/AMERICAS If for any reason the interest on this Note becomes includable in the gross income of the Registered Owner for Federal income tax purposes (an “Event of Taxability”), this Note shall bear interest from the earliest effective date of such Event of Taxability at the Taxable Rate (hereinbelow defined). No Event of Taxability shall be deemed to occur unless the City has been given timely written notice of such occurrence by the Registered Owner and, to the extent permitted by law, an opportunity to participate in and seek, at the City’s own expense, a final administrative determination by the Internal Revenue Service or determination by a court of competent jurisdiction (from which no further right of appeal exists) as to the occurrence of such Event of Taxability; provided that the City, at its own expense, delivers to the Registered Owner an opinion of bond counsel acceptable to such Registered Owner to the effect that such appeal or action for judicial or administrative review is not without merit and there is a reasonable possibility that the judgment, order, ruling or decision from which such appeal or action for judicial or administrative review is taken will be reversed, vacated or otherwise set aside. “Taxable Rate” shall mean, upon an Event of Taxability, the interest rate per annum that shall provide the Registered Owner with the same after tax yield that the Registered Owner would have otherwise received had the Event of Taxability not occurred, taking into account the increased taxable income of the Registered Owner as a result of such Event of Taxability. The Registered Owner shall provide the City with a written statement explaining the calculation of the Taxable Rate, which statement shall, in the absence of manifest error, be conclusive and binding on the City. THIS NOTE SHALL NOT BE DEEMED TO CONSTITUTE A GENERAL DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE CITY, OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL, LEGISLATIVE OR CHARTER PROVISION OR LIMITATION, AND IT IS EXPRESSLY AGREED BY THE REGISTERED OWNER OF THIS NOTE THAT SUCH REGISTERED OWNER SHALL NEVER HAVE THE RIGHT, DIRECTLY OR INDIRECTLY, TO REQUIRE OR COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE CITY OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF FLORIDA OR TAXATION IN ANY FORM ON ANY REAL OR PERSONAL PROPERTY FOR THE PAYMENT OF THE PRINCIPAL OF, AND INTEREST ON THIS NOTE OR FOR THE PAYMENT OF ANY OTHER AMOUNTS PROVIDED FOR IN THE ORDINANCE. This Note shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State of Florida, subject to the assignment provisions contained herein and in the Ordinance. It is further agreed between the City and the Registered Owner of this Note that this Note and the indebtedness evidenced hereby shall not constitute a lien upon any real or tangible personal property of or in the City. Neither the members of the governing body of the City nor any person executing the Note shall be liable personally on the Note by reason of its issuance. This Note may not be assigned by the Registered Owner except as provided in Section 6 of the Ordinance. Such assignment shall only be effective, and the City obligated to pay such 16 A-4 010-9097-1626/3/AMERICAS assignee, upon delivery to the Finance Director at the address set forth below of a written instrument or instruments of assignment in the form provided herein, duly executed by the Registered Owner or by his attorney-in-fact or legal representative, containing written instructions as to the details of assignment of this Note, along with the social security number or federal employer identification number of such assignee. In all cases of an assignment of this Note the City shall at the earliest practical time enter the change of ownership in the registration books; provided, however, the written notice of assignment must be received by the Finance Director no later than the close of business on the fifteenth dayprior to a Payment Date in order for the assignee to receive the interest and principal payment due on such Payment Date. The City may conclusively rely on the authenticity of any Form of Assignment delivered to it in accordance with this paragraph and accompanied by the original of the Note to which it relates. The City may charge the Registered Owner for the registration of every such assignment of the Note an amount sufficient to reimburse it for any tax, fee or any other governmental charge required to be paid, except for any such governmental charge imposed by the City, with respect to the registration of such assignment, and may require that such amounts be paid before any such assignment of the Note shall be effective. Any notice required to be given to the Bank hereunder shall be given to JPMorgan Chase Bank, N.A. at 1450 Brickell Avenue, Miami, Florida 33131, Attention: Creedence Gonzalez, Vice President, or such other address or addresses as the Bank shall provide the City in writing. In the event of an assignment of this Note, any payment or notice required to be given to the Registered Owner hereunder shall be given to the Registered Owner at the address or addresses shown on the Form of Assignment hereto, or such other address or addresses as the Registered Owner shall provide the City in writing. Any notice required to be given to the City hereunder shall be given to the Finance Director at 6130 Sunset Drive, South Miami, Florida 33143, or such other address or addresses as the City shall provide the Bank or any future holder of this Note in writing 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 hereto, and that the issuance of the Note does not violate any constitutional or statutory limitation or provision. [Remainder of Page Intentionally Left Blank] 17 A-5 010-9097-1626/3/AMERICAS IN WITNESS WHEREOF, the City has caused this Note to be executed in its name as of the date hereinafter set forth. The date of this Note is __________, 2020. CITY OF SOUTH MIAMI, FLORIDA (SEAL) By: ATTEST:City Manager By: City Clerk READ AND APPROVED AS TO FORM, LANGUAGE, LEGALITY AND EXECUTION THEREOF: By: City Attorney 18 A-6 010-9097-1626/3/AMERICAS FORM OF ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _______________________________________________ the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints ________________________________________ attorney to transfer the within Note in the books kept by the City for the registration thereof, with full power of substitution in the premises. Dated: NOTICE: The signature of this assignment must correspond with the name as it appears upon the within Note in every particular, or any change whatever.SOCIAL SECURITY NUMBER OR FEDERAL IDENTIFICATION NUMBER OF ASSIGNEE [Form of Abbreviations] The following abbreviations, when used in the inscription on the face of the within Note, shall be construed as though they were written out in full according to the applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivorship and not as tenants in common UNIFORM TRANS MIN ACT - Custodian for (Cust)(Minor) Under Uniform Transfers to Minors Act of (State) Additional abbreviations may also be used though not in the above list. Name and address of assignee for payment and notice purposes Notice: Date: Payment: Assignee: By: Title: 19 A-7 010-9097-1626/3/AMERICAS SCHEDULE 1 Payment Date Principal Amount Due April 1, 2021 $ April 1, 2022 April 1, 2023 April 1, 2024 April 1, 2025 April 1, 2026 April 1, 2027 April 1, 2028 April 1, 2029 April 1, 2030 April 1, 2031 April 1, 2032 20 City of South Miami, Florida Preliminary Refunding Summary Analysis (2006 & 2015 Loans) Scenairo: Existing New Loan Statistics (Series 2020) Principal Amount Maturity Estimated Closing Costs Interest Rate All‐In True Interest Cost Refunded Loans Statistics (Series 2006 & Series 2015) Principal Refunded Maturities Refunded Average Interest Rate Refunded Prepayment Refunding Savings Statistics Net PV Savings ($) Net PV Savings (as % of Refunded Principal) Aggregate Debt Service Comparison (including unrefunded Series 2011 loan) Fiscal Year (ending 9/30) Debt Svc Debt Svc Difference 2021 1,160,065 999,002 161,064 2022 1,163,181 1,049,833 113,349 2023 1,156,877 1,049,589 107,288 2024 1,154,449 1,049,386 105,062 2025 1,156,005 1,049,361 106,644 2026 1,154,168 1,049,286 104,882 2027 1,151,736 1,049,840 101,895 2028 462,730 604,164 (141,434) 2029 466,776 603,918 (137,142) 2030 465,316 604,582 (139,266) 2031 458,576 604,144 (145,568) 2032 459,528 603,617 (144,089) 2033 97,550 ‐ 97,550 2034 93,950 ‐ 93,950 2035 95,238 ‐ 95,238 2036 96,300 ‐ 96,300 2037 97,138 ‐ 97,138 Total 10,889,580 10,316,722 572,858 ‐Analysis is preliminary and subject to change, and assumes closing on September 18, 2020. ‐Series 2020 interest rate is indicative and subject to change as of 8/13/2020. ‐Net present value savings calculated using All‐in TIC of scenario. ‐Aggregate debt service comparison includes debt service on unrefunded Series 2011 loan. $553,216 11.39% 10/1/2020 ‐ 10/1/2036 3.32% Without Penalty 1.48% $4,859,000 4/1/2032 $65,665 1.28% Preliminary Series 2020 $5,004,000 Preliminary and subject to change 21 SUNDAY AUGUST 23 2020 NEIGHBORS 7SE MIAMIHERALD.COM umphs.” BOOKBAG GIVEAWAY Miami-Dade County Commission Chairwoman Audrey Edmonson recent- ly hosted her 14th annual District 3 Back to School Bookbag Giveaway, which took place earlier this month. Due to coronavirus restrictions, the giveaway was a drive-through at the Joseph Caleb Center. Mo- torists lined up and opened their trunks to receive backpacks filled with school supplies, along with Census 2020 coloring books and in- formation from Florida Heiken Children’s Vision Program. In total, more than 2,000 backpacks were distributed and do- nated to schools. “We’re ensuring chil- dren are well supplied for school regardless of their parents’ financial circum- stances,” Edmonson said. “Whether children are going face to face with their learning this year or virtual, they still need their supplies, and fam- ilies still are in need of help because of CO- VID-19.” Edmonson was joined by her staff and volun- teers from various organi- zations, including Miami Power House Church, the Miami Children’s Initia- tive, and Antler Temple #39 of the Elks. MDC RECEIVES MORE THAN $2 MILLION IN GRANTS The U.S. Department of Education gave $2.7 mil- lion in grants to support Miami Dade College’s TRIO Support Services Program. The school’s Homestead campus re- ceived $1.3 million, and the North campus re- ceived $1.4 million. TRIO Support Services Programs offers students ongoing interaction with academic advisors and counselors, educational and cultural activities, financial aid opportuni- ties, tutoring services and career advisement. For information on MDC’s TRIO Programs at the Homestead and North campuses, visit https://www.mdc.edu/ north/trio/ Kalia Dodd, a fourth-grade Girl Scout from Miramar, showcases her patch and solar car after she completed NextEra Energy’s Renewable Energy STEM Patch Program earlier this month. FPL and NextEra partnered with Girl Scouts of Southeast Florida. Miami-Dade County Commission Chairwoman Audrey Edmonson, above, recently hosted her 14th annual District 3 Back to School Bookbag Giveaway earlier this month. This year, due to COVID-19, the event was a drive-through at the Joseph Caleb Center. 22 23