17-2115 Authorize Financing to South Longwood Septic Tank Abatement Phase 1 ProjectORDINANCE NO. 17-2115
AN ORDINANCE OF THE CITY OF LONGWOOD, FLORIDA,
AUTHORIZING THE ISSUANCE OF DEBT IN THE
PRINCIPAL AMOUNT OF $4,089,103 TO FINANCE THE
SOUTH LONGWOOD SEPTIC TANK ABATEMENT — PHASE
I PROJECT INVOLVING THE ABATEMENT OF SEPTIC
TANKS ON PROPERTIES AND CONNECTION OF SUCH
PROPERTIES TO THE CITY'S WASTEWATER SYSTEM;
AUTHORIZING THE EXECUTION AND DELIVERY OF A
CLEAN WATER STATE REVOLVING FUND LOAN
AGREEMENT WITH THE FLORIDA WATER POLLUTION
CONTROL FINANCING CORPORATION AND RELATED
FINANCING DOCUMENTS; AND PROVIDING FOR
SEVERABILITY AND AN EFFECTIVE DATE.
WHEREAS, the City of Longwood (the "City") is vested with home rule authority pursuant
to Article VI1, Section 2 of the Constitution of the State of Florida and Chapter 166, Florida Statutes,
to enact ordinances;
WHEREAS, the City Charter provides that authorization for the borrowing of money shall
be by ordinance of the City; and
WHEREAS, the adoption of this Ordinance shall constitute the City Commission's approval
of the issuance of debt and the borrowing of money in accordance with Sections 3.10 and 6.10(b) of
the City Charter; and
WHEREAS, the City Commission finds it necessary and in the best interest of the public's
health, safety and welfare to procure and implement the necessary labor, materials and equipment for
the design, permitting, construction, installation and completion of the South Longwood Septic Tank
Abatement — Phase I project (the "Project") and to finance the Project through a loan with Florida
Water Pollution Control Financing Corporation (the "Corporation") by executing the Clean Water
State Revolving Fund Loan Agreement attached hereto as Exhibit "A" ("Loan Agreement") in the
principal amount of $4,089,103.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF LONGWOOD, FLORIDA:
SECTION 1. AUTHORIZATION. This Ordinance is enacted pursuant to the provisions
of Chapter 166, Part 11, Florida Statutes, the City of Longwood Charter, and other applicable
provisions of law (the "Act").
SECTION 2. FINDINGS. The City Commission hereby finds and determines that:
Ordinance No. 17-2115
Page 1
(a) That the above recitals are true and correct and incorporated herein.
(b) The City is a duly constituted and validly existing municipality within the State of
Florida with requisite home rule powers derived from the Constitution and Laws of the State of
Florida.
(c) It is necessary and desirable and in the best interests of the City and its citizens for the
administration and operation of the City to execute a Loan Agreement to finance the Project. The
execution of the Loan Agreement and issuance of the debt contemplated therein to finance the costs
of the Project satisfies a paramount public purpose.
(d) The City is without adequate, currently available funds to pay the costs of the Project,
and it is necessary and desirable and in the best interests of the City that it borrow the moneys
necessary to accomplish the financing of the Project.
(e) Because of the characteristics of the proposed debt and the below market interest rate
set forth in the Loan Agreement, prevailing market conditions, and additional savings to be realized
from an expeditious execution of the Loan Agreement, it is in the best interest of the City to enter
into the Loan Agreement with the Corporation.
(f) The Pledged Revenues, as defined in the Loan Agreement, are available for pledge
and the repayment of the loan.
(g) The Loan Agreement and the debt contemplated thereby to be issued under this
Ordinance do not constitute an indebtedness within the meaning of any constitutional or statutory
debt limitation.
(h) The Loan Agreement and the debt contemplated thereby to be issued under the
provisions of this Ordinance is declared to be issued for an essential public and governmental
purpose.
(i) Neither the City, nor the State of Florida or any political subdivision thereof or
governmental authority or body therein, shall ever be required to levy ad valorem taxes to pay the
principal of and interest on the debt or any amounts due under the Loan Agreement and neither the
debt nor the Loan Agreement shall constitute a lien upon the Project, or upon any properties owned
by or situated within the City except as provided herein with respect to the Pledged Revenues as
specified defined in the Loan Agreement.
SECTION 3. AUTHORIZATION OF THE PROJECT. The City Commission hereby
authorizes the procurement, acquisition, construction, equipping and installation of the
Project.
SECTION 4. AUTHORIZATION OF LOAN AGREEMENT. The City Commission
hereby authorizes the issuance of debt in the principal amount of up to $4,089,103 pursuant to the
terms and conditions of the Loan Agreement and does hereby authorize the execution and delivery
on behalf of the City by the Mayor under the seal of the City, attested by the City Clerk, of the Loan
Agreement with the Corporation. The Loan Agreement shall be in substantially the form thereof
Ordinance No. 17-2115
Page 2
attached hereto and marked Exhibit "A" and is hereby approved, with such changes therein as shall
be approved by any of the authorized officers executing the same, with such execution to constitute
conclusive evidence of such officer's approval and the City's approval of any changes therein from
the form of the Loan Agreement attached hereto.
SECTION 5. GENERAL AUTHORITY. The members of the City Commission of the
City and the officers, attorneys and other agents or employees of the City are hereby authorized to do
all acts and things required of them by this Ordinance, or desirable or consistent with the
requirements hereof for the full punctual and complete performance of provisions herein and as
contemplated by the Loan Agreement. The Deputy Mayor and any other member of the City
Commission are authorized to do all things required or permitted by this Ordinance of the Mayor in
his absence or unavailability. Neither the Mayor, any other members of the City Commission of the
City, any person executing the Loan Agreement or any related financing documents, nor any other
official, officer or employee of the City shall be liable personally hereon or be subject to any personal
liability or accountability by reason of the issuance of the debt authorized herein or execution of the
Loan Agreement or any other related instruments or documents.
SECTION 6. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the
covenants, agreements or provisions contained herein shall be held contrary to any express
provisions of law or contrary to the policy of express law, though not expressly prohibited, or against
public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or
provisions shall be null and void and shall be deemed severable from the remaining covenants,
agreements or provisions hereof and shall in no way affect the validity of any of the other provisions
of this Ordinance.
SECTION 7. EFFECTIVE DATE. This Ordinance shall take effect immediately upon its
enactment by the City Commission of the City of Longwood, Florida by a vote of at least 4 of the 5
City Commissioners voting in favor of adoption.
FIRST READING ON THIS 6'b DAY OF MARCH, 2017.
SECOND READING AND ENACTMENT on this 20t' day of MARCH, 2017.
A S
G
Mich lle ongo; CMC, City Clerk
CITY OF LONGWOOD, FLORIDA
Ordinance No. 17-2115
Page 3
Approved as to form and legality for use and reliance by the City of Longwood, Florida only:
f
Da iel W. La e Ci tty
Ordinance No. 17-2115
Page 4
EXHIBIT "A"
FORM OF LOAN AGREEMENT
Ordinance No. 17-2115
Page 5
Exhibit A
FLORIDA WATER POLLUTION CONTROL FINANCING CORPORATION
0
CITY OF LONGWOOD, FLORIDA
CLEAN WATER STATE REVOLVING FUND
LOAN AGREEMENT
WW590500
Florida Water Pollution Control Financing Corporation
1801 Hermitage Boulevard
Tallahassee, Florida 32308
CLEAN WATER STATE REVOLVING FUND LOAN AGREEMENT
CONTENTS PAGE
ARTICLE I - DEFINITIONS........................................................................................................ 2
1.01. WORDS AND TERMS................................................................................................ 2
1.02. CORRELATIVE WORDS........................................................................................... 4
ARTICLE II - WARRANTIES, REPRESENTATIONS AND COVENANTS ............................ 4
2.01. GENERAL WARRANTIES, REPRESENTATIONS AND COVENANTS ............... 4
2.02. TAX WARRANTIES, REPRESENTATIONS AND COVENANTS ......................... 6
2.03. LEGAL AUTHORIZATION...................................................................................... 12
2.04. AUDIT AND MONITORING REQUIREMENTS.................................................... 12
ARTICLE III - LOAN REPAYMENT ACCOUNT.................................................................... 15
3.01. LOAN DEBT SERVICE ACCOUNT........................................................................15
3.02. INVESTMENT OF LOAN DEBT SERVICE ACCOUNT MONEYS ..................... 16
3.03. LOAN DEBT SERVICE ACCOUNT WITHDRAWALS ......................................... 16
3.04. ASSETS HELD IN TRUST........................................................................................ 16
ARTICLE IV - PROJECT INFORMATION...............................................................................
16
4.01.
PROJECT CHANGES................................................................................................
16
4.02.
TITLE TO PROJECT SITE........................................................................................
16
4.03.
PERMITS AND APPROVALS..................................................................................
17
4.04.
ENGINEERING SERVICES......................................................................................
17
4.05.
PROHIBITION AGAINST ENCUMBRANCES.......................................................
17
4.06.
COMPLETION MONEYS.........................................................................................
17
4.07.
CLOSE-OUT..............................................................................................................17
4.08.
LOAN DISBURSEMENTS.......................................................................................
17
ARTICLE V - RATES AND USE OF THE WATER AND SEWER SYSTEMS ......................
18
5.01.
RATE COVERAGE...................................................................................................
18
5.02.
NO FREE SERVICE..................................................................................................
18
5.03.
MANDATORY CONNECTIONS.............................................................................
18
5.04.
NO COMPETING SERVICE.....................................................................................
18
5.05.
MAINTENANCE OF THE WATER AND SEWER SYSTEMS ..............................
19
5.06.
ADDITIONS AND MODIFICATIONS....................................................................
19
5.07.
COLLECTION OF REVENUES...............................................................................
19
ARTICLE VI - DEFAULTS AND REMEDIES.......................................................................... 19
6.01. EVENTS OF DEFAULT............................................................................................ 19
6.02. REMEDIES.................................................................................................................20
6.03. DELAY AND WAIVER ....................................... ............. 21
........................................
ARTICLE VII - THE PLEDGED REVENUES........................................................................... 21
7.01. SUPERIORITY OF THE PLEDGE TO THE CORPORATION ............................... 21
7.02. ADDITIONAL DEBT OBLIGATIONS.................................................................... 21
ARTICLE VIII - GENERAL PROVISIONS...............................................................................
21
8.01.
DISCHARGE OF OBLIGATIONS............................................................................
21
8.02.
PROJECT RECORDS AND STATEMENTS............................................................
22
8.03.
ACCESS TO PROJECT SITE....................................................................................
22
8.04.
ASSIGNMENT OF RIGHTS UNDER AGREEMENT .............................................
22
8.05.
AMENDMENT OF AGREEMENT...........................................................................
22
8.06.
ANNULMENT OF AGREEMENT...........................................................................
23
8.07.
SEVERABILITY CLAUSE.......................................................................................
23
8.08.
USE AS MATCHING FUNDS..................................................................................
23
8.09.
DAVIS -BACON ACT REQUIREMENTS...............................................................
23
8.10.
AMERICAN IRON AND STEEL REQUIREMENT ................................................
24
8.11. FISCAL SUSTAINABILITY PLAN(FSP)..................................................................
24
8.12.
PUBLIC RECORDS ACCESS...................................................................................
25
8.13.
TERMINATION, FALSE CERTIFICATION, SCRUTINIZED COMPANIES, AND
BOYCOTTING.......................................................................................................................
25
ARTICLE IX - CONSTRUCTION CONTRACTS AND INSURANCE .................................... 26
9.01. AUTHORIZATION TO AWARD CONSTRUCTION CONTRACTS ..................... 26
9.02. SUBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS ....................... 26
9.03. INSURANCE REQUIRED........................................................................................ 26
ARTICLE X - DETAILS OF FINANCING.................................................................................
27
10.01.
PRINCIPAL AMOUNT OF LOAN...........................................................................
27
10.02.
LOAN SERVICE FEE................................................................................................
27
10.03.
FINANCING RATE...................................................................................................
27
10.04.
LOAN TERM.............................................................................................................
28
10.05.
REPAYMENT SCHEDULE......................................................................................
28
10.06.
PROJECT COSTS......................................................................................................
28
10.07.
PROJECT SCHEDULE..............................................................................................
29
10.08.
SPECIAL CONDITION.............................................................................................
29
ARTICLE XI - EXECUTION OF AGREEMENT...................................................................... 30
ii
CLEAN WATER STATE REVOLVING FUND LOAN AGREEMENT
WW590500
THIS AGREEMENT is executed by the FLORIDA WATER POLLUTION CONTROL
FINANCING CORPORATION (the "Corporation") and the CITY OF LONGWOOD, FLORIDA
(the "Local Borrower"), existing as a local governmental entity under the laws of the State of
Florida.
WHEREAS, pursuant to Sections 403.1835 and 403.1837, Florida Statutes (the "State
Act"), the Corporation is authorized to make loans to local governmental entities to finance or
refinance the construction of wastewater pollution control facilities, the planning and design of
which have been reviewed by the State of Florida Department of Environmental Protection (the
"Department"); and
WHEREAS, in accordance with the provisions of the State Act and a Service Contract
dated as of June 1, 2001 (as amended from time to time, the "Service Contract") between the
Corporation and the Department, the Department has responsibility for the performance of various
activities in connection with such loans; and
WHEREAS, the Local Borrower has made application for the financing of the Project (as
hereinafter defined), and the Corporation and the Department have determined that such Project
meets all requirements for a loan and have agreed to make a loan to the Local Borrower as set forth
in this Agreement (the "Loan"); and
WHEREAS, in accordance with the provisions of a Master Trust Indenture dated as of
June 1, 2001 (as supplemented and amended from time to time, the "Indenture") between the
Corporation and U.S. Bank Trust National Association, as trustee (together with any successor
trustee, the "Trustee"), the Corporation is authorized to issue bonds (the "Bonds") from time to
time to fund loans pursuant to the State Act and to refund bonds issued by the Corporation; and
WHEREAS, the Loan and all payments of principal and interest thereon, including
prepayments, and all proceeds thereof, but excluding the Loan Service Fee (as such term is
hereinafter defined), have been pledged and assigned to the Trustee under the Indenture as security
for the payment of principal of, premium, if any, and interest on the Bonds; and
WHEREAS, pursuant to the provisions of the State Act, the Service Contract and the
Indenture, and as provided herein, the Corporation and the Department will cooperate to assure
continuing compliance with the various requirements and separate duties and responsibilities
arising from the issuance of the Bonds and the loans made by the Corporation.
NOW, THEREFORE, in consideration of the Corporation loaning money to the Local
Borrower, in the principal amount and pursuant to the covenants hereinafter set forth, it is agreed
as follows:
ARTICLE I — DEFINITIONS
1.01. WORDS AND TERMS.
In addition to the words and terms elsewhere defined in this Agreement, the following
words and terms shall have the meanings set forth below:
(1) "Agreement" or "Loan Agreement" shall mean this loan agreement.
(2) "Authorized Representative" shall mean the official or officials of the Local
Borrower authorized by ordinance or resolution to sign documents associated with the Loan.
(3) "Capitalized Interest" shall mean a finance charge that accrues at the Financing
Rate on Loan proceeds from the time of disbursement until six months before the first Semiannual
Loan Payment is due. Capitalized Interest is financed as part of the Loan principal.
(4) "Code" means the Internal Revenue Code of 1986, the Treasury Regulations
(whether temporary or final) under that Code or the statutory predecessor of that Code, and any
amendments of or successor provisions to, the foregoing and any official rulings, announcements,
notices, procedures and judicial determinations regarding any of the foregoing, all as and to the
extent applicable.
(5) "Defeasance Obligations" means:
(a) Direct obligations of, or obligations the prompt payment of principal and
interest on which are fully guaranteed by, the United States of America which are not
callable prior to maturity (except at the option of the holder thereof);
(b) Bonds, debentures, notes or other evidences of indebtedness issued or fully
insured or guaranteed by any agency or instrumentality of the United States of America
which are backed by the full faith and credit of the United States of America and which are
not callable prior to maturity (except at the option of the holder thereof);
(c) Resolution Funding Corp. (REFCORP) obligations which are not callable
prior to maturity (except at the option of the holder thereof); and
(d) Obligations of any state of the United States of America or of any agency,
instrumentality or local governmental unit of any such state which are not callable prior to
maturity or as to which irrevocable determination to call such obligations prior to maturity
shall have been made by the issuer thereof, and for the payment of the principal of,
premium, if any, and interest on which provision shall have been made by the irrevocable
deposit with a bank or trust company acting as a trustee or escrow agent for owners of such
obligations of securities described in clauses (a), (b) or (c), the maturing principal of and
interest on which, when due and payable, will provide sufficient moneys to pay when due
the principal of, premium, if any, and interest on such obligations, and which securities are
riot available to satisfy any other claim, including any claim of the trustee or escrow agent
or of any person claiming through the trustee or escrow agent or to whom the trustee or
escrow agent may be obligated.
OA
(6) "Depository" shall mean a bank or trust company, having a combined capital and
unimpaired surplus of not less than $50 million, authorized to transact commercial banking or
savings and loan business in the State and insured by the Federal Deposit Insurance Corporation.
(7) "Fiscal Year" shall mean the period commencing on October 1 of each year and
ending on September 30 of the succeeding year.
(8) "Financing Rate" shall mean the charges, expressed as a percent per annum,
imposed on the unpaid principal of the Loan. The Financing Rate shall consist of an interest rate
component and a Grant Allocation Assessment rate component.
(9) "Grant Allocation Assessment" shall mean an assessment, expressed as a percent
per annum, accruing on the unpaid balance of the Loan. It is computed similarly to the way interest
charged on the Loan is computed and is included in the Semiannual Loan Payment. After paying
or providing for the payment of debt service on the Bonds, the Department will use Grant
Allocation Assessment moneys for making grants to financially disadvantaged small communities
pursuant to Section 403.1835 of the Florida Statutes.
(10) "Gross Revenues" shall mean all income or earnings received by the Local
Borrower from the ownership or operation of its Water and Sewer Systems, including investment
income, all as calculated in accordance with generally accepted accounting principles. Gross
Revenues shall not include proceeds from the sale or other disposition of any part of the Water or
Sewer System, condemnation awards or proceeds of insurance, except use and occupancy or
business interruption insurance, received with respect to the Water or Sewer System.
(11) "Loan Application" shall mean the completed form which provides all information
required to support obtaining construction loan financial assistance.
(12) "Loan Debt Service Account" shall mean an account, or a separately identified
component of a pooled cash or liquid account, with a Depository established by the Local Borrower
for the purpose of accumulating Monthly Loan Deposits and making Semiannual Loan Payments.
(13) "Loan Service Fee" shall mean an origination fee which shall be paid by the Local
Borrower.
(14) "Monthly Loan Deposit" shall mean the monthly deposit to be made by the Local
Borrower to the Loan Debt Service Account.
(15) "Operation and Maintenance Expense" shall mean the costs of operating and
maintaining the Water and Sewer Systems determined pursuant to generally accepted accounting
principles, exclusive of interest on any debt payable from Gross Revenues, depreciation, and any
other items not requiring the expenditure of cash.
(16) "Pledged Revenues" shall mean the specific revenues pledged as security for
repayment of the Loan and shall be the Gross Revenues derived yearly from the operation of the
Water and Sewer Systems after payment of the Operation and Maintenance Expense and the
satisfaction of all yearly payment obligations on account of any senior obligations issued pursuant
to Section 7.02 of this Agreement.
3
(17) "Project" shall mean the works financed by this Loan and shall consist of furnishing
all labor, materials, and equipment to construct the collection facilities in accordance with the plans
and specifications accepted by the Department for the "South Longwood Septic Tank Abatement
— Phase I" contract.
The Project is in agreement with the planning documentation accepted by the Department
effective October 18, 2016. Approval of this Project is provided by the Florida Categorical
Exclusion Notice dated August 22, 2016 and no adverse comments were received.
(18) "Semiannual Loan Payment" shall mean the payment due from the Local Borrower
at six-month intervals.
(19) "Sewer System" shall mean all facilities owned by the Local Borrower for
collection, transmission, treatment and reuse of wastewater and its residuals.
(20) "State" means the State of Florida.
(21) "Tax -Exempt Bonds" means Bonds the interest on which is intended on their date
of issuance to be excludable from gross income of the holders thereof for federal income tax
purposes.
(22) "Water System" shall mean all facilities owned by the Local Borrower for
supplying and distributing water for residential, commercial, industrial, and governmental use.
1.02. CORRELATIVE WORDS.
Words of the masculine gender shall be understood to include correlative words of the
feminine and neuter genders. Unless the context shall otherwise indicate, the singular shall include
the plural and the word "person" shall include corporations and associations, including public
bodies, as well as natural persons.
ARTICLE II - WARRANTIES, REPRESENTATIONS AND COVENANTS
2.01. GENERAL WARRANTIES, REPRESENTATIONS AND COVENANTS
The Local Borrower warrants, represents and covenants that:
(1) The Local Borrower has full power and authority to enter into this Agreement and
to comply with the provisions hereof.
(2) The Local Borrower currently is not the subject of bankruptcy, insolvency, or
reorganization proceedings and is not in default of, or otherwise subject to, any agreement or any
law, administrative regulation, judgment, decree, note, resolution, charter or ordinance which
would currently restrain or enjoin it from entering into, or complying with, this Agreement.
(3) There is no material action, suit, proceeding, inquiry or investigation, at law or in
equity, before any court or public body, pending or, to the best of the Local Borrower's knowledge,
4
threatened, which seeks to restrain or enjoin the Local Borrower from entering into or complying
with this Agreement.
(4) All permits, real property interests, and approvals required as of the date of this
Agreement have been obtained for construction and use of the Project. The Local Borrower knows
of no reason why any future required permits or approvals are not obtainable.
(5) The Local Borrower shall undertake the Project on its own responsibility, to the
extent permitted by law.
(6) To the extent permitted by law, the Local Borrower shall release and hold harmless
the State, its agencies, the Corporation, and each of their respective officers, members, and
employees from any claim arising in connection with the Local Borrower's actions or omissions
in its planning, engineering, administrative, and construction activities financed by this Loan or its
operation of the Project.
(7) All Local Borrower representations to the Corporation and the Department,
pursuant to the Loan Application and this Agreement, were and are true and accurate as of the date
the Loan Application and this Agreement were each executed by the Local Borrower. The
financial information delivered by the Local Borrower to the Department was current and correct
as of the date such information was delivered. The Local Borrower shall comply with Chapter 62-
503, Florida Administrative Code, and all applicable State and Federal laws, rules, and regulations
which are identified in the Loan Application or this Agreement. To the extent that any assurance,
representation, or covenant requires a future action, the Local Borrower shall take such action as
is necessary for compliance.
(8) The Local Borrower shall maintain records using generally accepted governmental
accounting principles established by the Governmental Accounting Standards Board. As part of
its bookkeeping system, the Local Borrower shall keep accounts of the Water and Sewer Systems
separate from all other accounts and it shall keep accurate records of all revenues, expenses, and
expenditures relating to the Water and Sewer Systems, and of the Pledged Revenues, Loan
disbursement receipts and Loan Debt Service Account.
(9) In the event the anticipated Pledged Revenues are shown by the Local Borrower's
annual budget to be insufficient to make the Semiannual Loan Payments for such Fiscal Year when
due, the Local Borrower shall include in such budget other legally available non -ad valorem funds
which will be sufficient, together with the Pledged Revenues, to make the Semiannual Loan
Payments. Such other legally available non -ad valorem funds shall be budgeted in the regular
annual governmental budget and designated for the purpose provided by this Subsection, and the
Local Borrower shall collect such funds for application as provided herein. The Local Borrower
shall notify the Department immediately in writing of any such budgeting of other legally available
non -ad valorem funds. Nothing in this covenant shall be construed as creating a pledge, lien, or
charge upon any such other legally available non -ad valorem funds; requiring the Local Borrower
to levy or appropriate ad valorem tax revenues; or preventing the Local Borrower from pledging
to the payment of any bonds or other obligations all or any part of such other legally available non -
ad valorem funds.
(10) Each Fiscal Year, beginning three months before the first Semiannual Loan
Payment and ending with the Fiscal Year during which the final Loan repayment is made, the
Local Borrower's Authorized Representative or its chief financial officer shall submit, pursuant to
the schedule established in Section 10.07, a certification that: (a) Pledged Revenues collections
satisfy, on a pro rata basis, the rate coverage requirement; (b) the Loan Debt Service Account
contains the funds required; and (c) insurance, including that issued through the National Flood
Insurance Program authorized under 42 U.S.C. secs. 4001-4128 when applicable, in effect for the
facilities generating the Pledged Revenues, adequately covers the customary risks to the extent
that such insurance is available.
(11) Pursuant to Section 216.347 of the Florida Statutes, the Local Borrower shall not
use the Loan proceeds for the purpose of lobbying the Florida Legislature, the Judicial Branch, or
a State agency.
(12) The Local Borrower agrees to construct the Project in accordance with the Project
schedule. Delays incident to strikes, riots, acts of God, and other events beyond the reasonable
control of the Local Borrower are excepted. If for any reason construction is not completed as
scheduled, there shall be no resulting diminution or delay in the Semiannual Loan Payment or the
Monthly Loan Deposit.
(13) The Local Borrower covenants that this Agreement is entered into for the purpose
of constructing, refunding, or refinancing the Project which will in all events serve a public
purpose. The Local Borrower covenants that it will, under all conditions, complete and operate
the Project to fulfill the public need.
(14) The Local Borrower shall take such actions, shall furnish and. certify to such
information and execute and deliver and cause to be executed and delivered such documents,
certificates and opinions as the Corporation and/or the Department may reasonably require in
connection with the Bonds, including, without limitation, any necessary continuing disclosure
undertaking meeting the requirements of Securities and Exchange Commission Rule 15c2-12.
2.02. TAX WARRANTIES, REPRESENTATIONS AND COVENANTS
The Local Borrower acknowledges that the Corporation may issue Tax -Exempt Bonds with
which to fund the Loan to the Local Borrower and that the maintenance of the tax-exempt status
of any such Tax -Exempt Bonds will depend, in part, on the Local Borrower's compliance with the
provisions of this Agreement. Accordingly, the Local Borrower warrants, represents and
covenants that:
(1) Notwithstanding any other provisions of this Agreement, including specifically
Section 2.02(8), if the Local Borrower shall be notified by the Corporation or the Department as
of any date that any payment is required to be made to the United States Treasury in respect of
Tax -Exempt Bonds the proceeds of which were used to fund the Loan (hereafter, the "Applicable
Tax -Exempt Bonds"), and such payment is due to the failure of the Local Borrower to comply
with this Agreement, the Local Borrower shall pay to the Trustee (for deposit to the applicable
Subaccount of the Rebate Account established by the Indenture) the amount specified in the notice
by the Corporation or the Department.
0
(2) The Local Borrower is a "governmental person" (as defined in Treasury
Regulations §1.141-1(b)) (a "Governmental Unit") and it owns and operates the Project.
(3) The Local Borrower will not take any action or omit to take any action, which action
or omission will adversely affect the exclusion from gross income of the interest on the Applicable
Tax -Exempt Bonds for federal income tax purposes or cause the interest on the Applicable Tax -
Exempt Bonds, or any portion thereof, to become an item of tax preference for purposes of the
alternative minimum tax imposed on individuals and corporations under the Code, and in the event
of such action or omission, promptly upon having such brought to its attention, it will take such
reasonable actions based upon an opinion of any attorney or firm of attorneys of recognized
standing and experience in the field of municipal bonds whose opinions are generally accepted by
purchasers of municipal bonds and which attorney or firm of attorneys is acceptable to the
Corporation ("Bond Counsel"), and in all cases at the sole expense of the Local Borrower, as may
rescind or otherwise negate such action or omission. The Local Borrower will not directly or
indirectly, use or permit the use of any proceeds of the Applicable Tax -Exempt Bonds or any other
funds of the Local Borrower, or take or omit to take any action, that would cause the Applicable
Tax -Exempt Bonds to be or become "arbitrage bonds" within the meaning of Section 148(a) of
the Code or to fail to meet any other applicable requirement of Sections 141, 148, 149 and 150 of
the Code or cause the interest on the Applicable Tax -Exempt Bonds, or any portion thereof, to
become an item of tax preference for purposes of the alternative minimum tax imposed on
individuals and corporations under the Code. To that end, the Local Borrower will comply with
all requirements of Sections 141, 148, 149 and 150 of the Code to the extent such provisions apply
to the Applicable Tax -Exempt Bonds. In the event that at any time the Corporation or the
Department is of the opinion that it is necessary to restrict or limit the yield on the investment of
any moneys held by the Local Borrower, the Corporation or the Department shall so instruct the
Local Borrower in writing and the Local Borrower shall so restrict the yield.
(4) The Local Borrower (or any "related party", as defined in Treasury Regulations
§ 1.150-1(b)) is prohibited from purchasing and shall not purchase any Applicable Tax -Exempt
Bonds other than purchases in the open market for the purpose of tendering them to the Trustee
for purchase and retirement.
(5) The Local Borrower will take no action, or permit or suffer any action or event,
which will cause any of the Applicable Tax -Exempt Bonds to be or become a "private activity
bond" within the meaning of the Code. To that end, the Local Borrower will not permit more than
5% of the Project or portion thereof financed with Tax -Exempt Bonds to be used for a Private
Business Use. The term "Private Business Use" means use directly or indirectly in a trade or
business or any other activity carried on by any Private Person other than use as a member of, and
on the same basis as, the general public. The term "Private Person" means any person other than
a Governmental Unit. For this purpose, the United States or any agency or instrumentality thereof
is not a Governmental Unit and is therefore a Private Person. For purposes of this paragraph (5),
property is considered "used" by a Private Person if:
(i) it is owned by, or leased, to such Private Person;
7
(ii) it is operated, managed or otherwise physically employed, utilized or
consumed by such Private Person, other than operation or management pursuant to an
agreement that meets the conditions described in paragraph (6) below;
(iii) capacity in or output service from such property is reserved or committed
to such Private Person under a take -or -pay, output, incentive payment or similar contract
or arrangement;
(iv) such property is used to provide service to (or such service is committed to
or reserved for) such Private Person on a basis or terms that are different from the basis or
terms on which such service is provided (or committed or reserved) to members of the
public generally (except possibly for the amount of use and any corresponding rate
adjustment);
(v) such Private Person is a developer and a significant amount of the Project
financed with proceeds of Tax -Exempt Bonds serves only a limited area substantially all
of which is owned by such Private Person, or a limited group of developers, unless such
improvement carries out an essential governmental function, such developer reasonably
expects to proceed with all reasonable speed to develop the improvement and property
benefited by that improvement, and the improvement is in fact transferred to a
Governmental Unit promptly after the property benefited by the improvement is developed;
or
(vi) substantial burdens and benefits of ownership of the Project financed with
proceeds of Tax -Exempt Bonds are otherwise effectively transferred to such Private Person.
(6) Use of Bond -Financed Property.
(a) For purposes of this Agreement, the use by a Private Person of the Project
financed with the proceeds of Tax -Exempt Bonds (the "Bond Financed Property") pursuant
to a Qualified Use Contract (as hereafter defined) shall not be treated as a Private Business
Use by such Private Person of such Bond -Financed Property or of funds used to finance or
refinance such Bond -Financed Property.
(b) An arrangement under which services are to be provided by a Private Person
involving the use of all or any portion of, or any function of, the Bond -Financed Property
(for example, management services for an entire facility or a specific department of a
facility ("Use Contract")) is a "Qualified Use Contract" if all of the following conditions
are satisfied:
(i) the compensation for services provided pursuant to the Use Contract
is reasonable;
(ii) none of the compensation for services provided pursuant to the Use
Contract is based on net profits from operation of the Bond -Financed Property or
any portion thereof;
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(iii) the compensation provided in the Use Contract satisfies one of the
following subparagraphs:
(A) At least 95% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fined fee and the
term of the Use Contract, including all renewal options, does not exceed the
lesser of 80% of the reasonably expected useful life of the Bond -Financed
Property and 15 years. For purposes of this subparagraph (b), a "periodic
fixed fee" means a stated dollar amount for services rendered for a specified
period of time that does not increase except for automatic increases pursuant
to a specified, objective external standard that is not linked to the output or
efficiency of the Bond -Financed Property (e.g., the Consumer Price Index)
and a "renewal option" means a provision under which either party to the
Use Contract has a legally enforceable right to renew the Use Contract; or
(B) At least 80% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fixed fee and the
term of the Use Contract, including all renewal options, does not exceed the
lesser of 80% of the reasonably expected useful life of the Bond -Financed
Property and 10 years; or
(C) At least 50% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fixed fee, the term
of the Use Contract, including all renewal options, does not exceed 5 years,
and the Use Contract is terminable by the Local Borrower on reasonable
notice, without penalty or cause, at the end of the third year of the Use
Contract term; or
(D) All of the compensation for services is based on a capitation
fee or a combination of a capitation fee and a periodic fixed fee, the term of
the Use Contract, including all renewal options, does not exceed 5 years,
and the Use Contract is terminable by the Local Borrower on reasonable
notice, without penalty or cause, at the end of the third year of the Use
Contract term. A "capitation fee" means a fixed periodic amount for each
person for whom the Service Provider assumes the responsibility to provide
all needed services for a specified period so long as the quantity and type of
service actually provided to covered persons varies substantially; or
(E) All of the compensation for services is based on a per -unit
fee or a combination of a per -unit fee and a periodic fixed fee, the term of
the Use Contract, including all renewal options, does not exceed 3 years and
the Use Contract is terminable by the Local Borrower on reasonable notice,
without penalty or cause, at the end of the second year of the Use Contract
term. A "per -unit fee" means a fee based on a unit of service provided (e.g.,
a stated dollar amount for each specified procedure); or
0
(F) All of the compensation for services is based on a percentage
of fees charged or a combination of a per -unit fee and a percentage of
revenue or expense fee, the term of the Use Contract, including all renewal
options, does not exceed 2 years and the Use Contract is terminable by the
Local Borrower on reasonable notice, without penalty or cause, at the end
of the first year of the Use Contract term. This subparagraph (F) applies
only to (a) Use Contracts under which the Private Person primarily provides
services to third parties, or (b) Use Contracts involving the Bond -Financed
Property during an initial start-up period for which there have been
insufficient operations to establish a reasonable estimate of the amount of
the annual gross revenues (or gross expenses in the case of a Use Contract
based on a percentage of gross expenses) (e.g., a Use Contract for general
management services for the first year of operations), in which case, the
compensation for services may be based on a percentage of gross revenues,
adjusted gross revenues (i.e., gross revenues less allowances for bad debts
and contractual and similar allowances) or expenses of the Bond -Financed
Facilities, but not more than one.
For purposes of this paragraph (6)(b)(iii), a Use Contract is considered to contain
termination penalties if the termination limits the Local Borrower's right to
compete with the Private Person, requires the Local Borrower to purchase
equipment, goods, or services from the Private Person, or requires the Local
Borrower to pay liquidated damages for cancellation of the Use Contract. Another
contract between the Private Person and the Local Borrower (for example, a loan
or guarantee by the Private Person) is considered to create a contract termination
penalty if that contract contains terms that are not customary or arm's-length that
could operate to prevent the Local Borrower from terminating the Use Contract. A
requirement that the Local Borrower reimburse the Private Person for ordinary and
necessary expenses, or restrictions on the hiring by the Local Borrower of key
personnel of the Private Person, are not treated as contract termination penalties;
(iv) The Private Person has no role or relationship with the Local
Borrower, directly or indirectly, that, in effect, substantially limits the Local
Borrower's ability to exercise its rights under the Use Contract, including
cancellation rights. This requirement is satisfied if:
(A) The Private Person and its directors, officers, shareholders
and employees possess in the aggregate, directly or indirectly, no more than
20 percent of the voting power of the governing body of the Local Borrower;
(B) No individual who is a member of the governing body of the
Private Person and the Local Borrower is the chief executive officer of the
Local Borrower or the Private Person or the chairperson of the governing
body of the Local Borrower or the Private Person; and
(C) The Local Borrower and the Private Person are not "related
parties" (within the meaning of Treasury Regulations § 1.150-1(b).
10
(c) The Local Borrower may treat a Use Contract that does not comply with
one or more of the criteria of subparagraph (6)(b) as not resulting in Private Business Use
of Bond -Financed Property if it delivers to the Corporation and the Department, at its
expense, an opinion of Bond Counsel to the effect that to do so would not adversely affect
the exclusion from gross income of interest on the Applicable Tax -Exempt Bonds or cause
the interest on the Applicable Tax -Exempt Bonds, or any portion thereof, to become an
item of tax preference for purposes of the alternative minimum tax imposed on individuals
and corporations under the Code.
(7) Notwithstanding any provision of this Section 2.02, if the Local Borrower provides,
at the Local Borrower's expense, to the Corporation and the Department an opinion of Bond
Counsel to the effect that any action required under this Section is no longer required, or to the
effect that some further action is required, to maintain the exclusions from gross income of interest
on the Applicable Tax -Exempt Bonds pursuant to Section 103(4) of the Code, the Local Borrower,
the Corporation and the Department may rely conclusively on such opinion in complying with the
provisions hereof, and the covenants hereunder shall be deemed to be modified to that extent.
(8) All tax warranties, representations, covenants and obligations of the Local
Borrower contained in this Section 2.02 shall remain in effect and be binding upon the Local
Borrower until all of the Applicable Tax -Exempt Bonds have been paid, notwithstanding any
earlier termination of this Agreement or any provision for payment of principal of and premium,
if any, and interest on the outstanding Applicable Tax -Exempt Bonds and release and discharge of
the Indenture.
(9) Amounts deposited from time to time in the Loan Debt Service Account will be
used to pay principal and interest within 13 months after the amounts are so deposited.
(10) The Local Borrower has not established and does not expect to establish or use any
sinking fund, debt service fund, redemption fund, reserve or replacement fund, or similar fund, or
any other fund to pay principal of, interest and any redemption premium on the Loan other than
the Loan Debt Service Account. Except as set forth in the next sentence and except for money
referred to in paragraph (9) above, no other money or investment property (including, without
limitation, fixed income, equity and other investments) is or will be pledged as collateral or used
for the payment of such principal and interest (or for the reimbursement of any others who may
provide money to pay that principal and interest), or is or will be restricted, dedicated, encumbered,
or set aside in any way as to afford the Corporation or holders of the Applicable Tax -Exempt
Bonds reasonable assurance of the availability of such money or investment property to pay debt
service on the Loan or the Applicable Tax -Exempt Bonds.
(11) Except as stated otherwise in this Agreement, no portion of the Loan will be used:
(a) to pay principal of or interest on, refund, renew, roll over, retire, or replace
any other obligations issued by or on behalf of the Corporation, the Local Borrower or any
other Governmental Unit,
(b) to replace any proceeds of another issue of tax-exempt bonds that were not
expended on the project for which such other issue was issued,
11
(c) to replace any money that was or will be used directly or indirectly to
acquire investments,
(d) to make a loan to any other person or Governmental Unit,
(e) to pay any working capital expenditure other than expenditures identified
in Treasury Regulations § 1.148-6(d)(3)(ii)(A) and (B) i.e. issuance costs of the
Applicable Tax -Exempt Bonds, qualified administrative costs, reasonable charges for a
qualified guarantee or for a qualified hedge, interest on the Loan for a period commencing
on the issuance date of the Applicable Tax -Exempt Bonds and ending on the date that is
the later of three years from that issuance date or one year after the date on which the
Project was or will be placed in service, payments of amounts, if any, pursuant to paragraph
(i), and costs, other than those already described, that do not exceed 5% of the sale proceeds
of the Applicable Tax -Exempt Bonds and that are directly related to capital expenditures
financed or deemed financed by the Applicable Tax -Exempt Bonds), or
(g) to reimburse any expenditures made prior to the issuance date of the
Applicable Tax -Exempt Bonds except those that qualify as a reimbursement of prior capital
expenditures, based upon an opinion of Bond Counsel, at the expense of the Local
Borrower, delivered to the Department and the Corporation.
(12) The Local Borrower does not intend to sell or otherwise dispose of the Project or
any portion thereof during the term of the Applicable Tax -Exempt Bonds except for dispositions
of property in the normal course at the end of such property's useful life to the Local Borrower.
(13) None of the Semiannual Loan Payments shall be federally guaranteed within the
meaning of Section 149(b) of the Code.
2.03. LEGAL AUTHORIZATION
Upon signing this Agreement, the Local Borrower's legal counsel hereby expresses the
opinion, subject to laws affecting the rights of creditors generally, that:
(1) This Agreement has been duly authorized by the Local Borrower and shall
constitute a valid and legal obligation of the Local Borrower enforceable in accordance with its
terms upon execution by both parties; and
(2) This Agreement specifies the revenues pledged for repayment of the Loan, and the
pledge is valid and enforceable.
2.04. AUDIT AND MONITORING REQUIREMENTS.
The Local Borrower agrees to the following audit and monitoring requirements.
12
(1) The financial assistance authorized pursuant to this Loan Agreement consists of the
following:
State Resources Awarded to the Local Borrower Pursuant to this Agreement Consist of the
FollowingResources Subject to Section 215.97, F.S.:
State
State
Program
CSFA
CSFA Title or Fund
Funding
Appropriation
Number
Funding Source
Number
Source Description
Amount
Category
Wastewater
Original
Treatment and
Wastewater
Agreement
Stormwater
37.077
Treatment Facility
$4,071,303
140131
Management TF
Construction
(2) Audits.
(a) In the event that the Local Borrower expends a total amount of state
financial assistance equal to or in excess of $750,000 in any fiscal year of such Local
Borrower, the Local Borrower must have a State single or project -specific audit for such
fiscal year in accordance with Section 215.97, Florida Statutes; applicable rules of the
Department of Financial Services; and Chapters 10.550 (local governmental entities) or
10.650 (nonprofit and for -profit organizations), Rules of the Auditor General. In
determining the state financial assistance expended in its fiscal year, the Local Borrower
shall consider all sources of state financial assistance, including state financial assistance
received from the Department of Environmental Protection, other state agencies, and other
nonstate entities. State financial assistance does not include Federal direct or pass -through
awards and resources received by a nonstate entity for Federal program matching
requirements.
(b) In connection with the audit requirements addressed in the preceding
paragraph (a); the Local Borrower shall ensure that the audit complies with the
requirements of Section 215.97(7), Florida Statutes. This includes submission of a financial
reporting package as defined by Section 215.97(2), Florida Statutes, and Chapters 10.550
(local governmental entities) or 10.650 (nonprofit and for -profit organizations), Rules of
the Auditor General.
(c) If the Local Borrower expends less than $750,000 in state financial
assistance in its fiscal year, an audit conducted in accordance with the provisions of Section
215.97, Florida Statutes, is not required. The Local Borrower shall inform the Department
of findings and recommendations pertaining to the State Revolving Fund in audits
conducted by the Local Borrower in which the $750,000 threshold has not been met. In
the event that the Local Borrower expends less than $750,000 in state financial assistance
in its fiscal year, and elects to have an audit conducted in accordance with the provisions
of Section 215.97, Florida Statutes, the cost of the audit must be paid from the non -state
entity's resources (i.e., the cost of such an audit must be paid from the Local Borrower's
resources obtained from other than State entities).
13
(d) For information regarding the Florida Catalog of State Financial Assistance
(CSFA), a Local Borrower should access the Florida Single Audit Act website located at
hgps://apps.fldfs.com/fsaa for assistance. In addition to the above websites, the following
websites may be accessed for information: Legislature's Website at
http://www.lesz.state.fl.us/Welcome/index.cfm State of Florida's website at
http://www.mvflorida.com/, Department of Financial Services' Website at
http://www.fldfs.com/ and the Auditor General's Website at
http://www.myflorida.com/audgen/ .
(3) Report Submission.
(a) Copies of financial reporting packages shall be submitted by or on behalf of
the Local Borrower directly to each of the following:
(i) The Department at the following address:
By Mail:
Audit Director
Florida Department of Environmental Protection
Office of the Inspector General
3900 Commonwealth Boulevard, MS 40
Tallahassee, Florida 32399-3123
Electronically:
FDEPSingleAudiodep.state.fl.us
(ii) The Auditor General's Office at the following address:
State of Florida Auditor General
Room 401, Claude Pepper Building
I I I West Madison Street
Tallahassee, Florida 32399-1450
(iii) Copies of reports or management letters shall be submitted by or on
behalf of the Local Borrower directly to the Department at the following address:
By Mail:
Audit Director
Florida Department of Environmental Protection
Office of the Inspector General
3900 Commonwealth Boulevard, MS 40
Tallahassee, Florida 32399-3123
Electronically:
FDEPSin leAudit(abdep.state.fl.us
(b) Any reports, management letters, or other information required to be
submitted to the Department pursuant to this Agreement shall be submitted timely in
14
accordance with Florida Statutes, or Chapters 10.550 (local governmental entities) or
10.650 (nonprofit and for -profit organizations), Rules of the Auditor General, as applicable.
(c) Local Borrowers, when submitting financial reporting packages to the
Department for audits done in accordance with Chapters 10.550 (local governmental
entities) or 10.650 (nonprofit and for -profit organizations), Rules of the Auditor General,
should indicate the date that the reporting package was delivered to the Local Borrower in
correspondence accompanying the reporting package.
(4) Record Retention.
The Local Borrower shall retain sufficient records demonstrating its compliance with the
terms of this Agreement for a period of five years from the date the audit report is issued, and shall
allow the Department, or its designee, Chief Financial Officer, or Auditor General access to such
records upon request. The Local Borrower shall ensure that audit working papers are made
available to the Department, or its designee, Chief Financial Officer, or Auditor General upon
request for a period of five years from the date the audit report is issued, unless extended in writing
by the Department.
The Local Borrower is hereby advised that the Florida Single Audit Act Requirements may
further apply to lower tier transactions that may be a result of this Agreement.
The Local Borrower should confer with its chief financial officer, audit director or contact
the Department for assistance with questions pertaining to the applicability of these requirements.
(5) Monitoring.
In addition to reviews of audits conducted in accordance with Section 215.97, F.S., as
revised monitoring procedures may include, but not be limited to, on -site visits by Department
staff and/or other procedures. By entering into this Agreement, the Local Borrower agrees to
comply and cooperate with any monitoring procedures/processes deemed appropriate by the
Department. In the event the Department determines that a limited scope audit of the Local
Borrower is appropriate, the Local Borrower agrees to comply with any additional instructions
provided by the Department to the Local Borrower regarding such audit. The Local Borrower
further agrees to comply and cooperate with any inspections, reviews, investigations, or audits
deemed necessary by the Chief Financial Officer or Auditor General.
ARTICLE III - LOAN REPAYMENT ACCOUNT
3.01. LOAN DEBT SERVICE ACCOUNT.
The Local Borrower shall establish a Loan Debt Service Account with a Depository and
begin making Monthly Loan Deposits no later than the date set forth for such action in Section
10.07 of this Agreement.
Beginning six months prior to each Semiannual Loan Payment, the Local Borrower shall
make six Monthly Loan Deposits. The first five deposits each shall be at least equal to one -sixth
of the Semiannual Loan Payment. The sixth Monthly Loan Deposit shall be at least equal to the
15
amount required to make the total on deposit in the Loan Debt Service Account equal to the
Semiannual Loan Payment amount, taking into consideration investment earnings credited to the
account pursuant to Section 3.02.
Any month in which the Local Borrower fails to make a required Monthly Loan Deposit,
the Local Borrower's chief financial officer shall notify the Department of such failure. In
addition, the Local Borrower agrees to budget, by amendment if necessary, from other legally
available non -ad valorem funds all sums becoming due before the same become delinquent. This
requirement shall not be construed to give the Corporation a superior claim on any revenues over
prior claims of general creditors of the Local Borrower, nor shall it be construed to give the
Corporation or the Department the power to require the Local Borrower to levy and collect any
revenues other than Pledged Revenues.
3.02. INVESTMENT OF LOAN DEBT SERVICE ACCOUNT MONEYS.
Moneys on deposit in the Loan Debt Service Account shall be invested pursuant to the laws
of the State. Such moneys may be pooled for investment purposes. The maturity or redemption
date of investments shall be not later than the date upon which such moneys may be needed to
make Semiannual Loan Payments. The investment earnings shall be credited to the Loan Debt
Service Account and applied toward the Monthly Loan Deposit requirements.
3.03. LOAN DEBT SERVICE ACCOUNT WITHDRAWALS.
The withdrawal of moneys from the Loan Debt Service Account shall be for the sole
purpose of making the Semiannual Loan Payment or for discharging the Local Borrower's
obligations pursuant to Section 8.01.
3.04. ASSETS HELD IN TRUST.
The assets in the Loan Debt Service Account shall be held in trust for the purposes provided
herein and used only for the purposes and in the manner prescribed in this Agreement; and, pending
such use, said assets shall be subject to a lien and charge in favor of the Corporation.
ARTICLE IV - PROJECT INFORMATION
4.01. PROJECT CHANGES.
Project changes prior to bid opening shall be made by addendum to plans and
specifications. Changes after bid opening shall be made by change order. The Local Borrower
shall submit all addenda and all change orders to the Department for an eligibility determination.
After execution of all construction, equipment and materials contracts, the Project contingency
may be reduced.
4.02. TITLE TO PROJECT SITE.
The Local Borrower shall have an interest in real property sufficient for the construction
and location of the Project free and clear of liens and encumbrances which would impair the
usefulness of such sites for the intended use.
16
4.03. PERMITS AND APPROVALS.
The Local Borrower shall have obtained, prior to the Department's authorization to award
construction contracts, all permits and approvals required for construction of the Project or portion
of the Project funded under this Agreement.
4.04. ENGINEERING SERVICES.
A professional engineer, registered in the State, shall be employed by, or under contract
with, the Local Borrower to oversee construction.
4.05. PROHIBITION AGAINST ENCUMBRANCES.
The Local Borrower is prohibited from selling, leasing, or disposing of any part of the
Water or Sewer System which would materially reduce operational integrity or Gross Revenues
so long as this Agreement, including any amendment thereto, is in effect unless the written consent
of the Department is first secured.
4.06. COMPLETION MONEYS.
In addition to the proceeds of this Loan, the Local Borrower covenants that it has obtained,
or will obtain, sufficient moneys from other sources to complete construction and place the Project
in operation on, or prior to, the date specified in Article X. Failure of the Corporation or the
Department to approve additional financing shall not constitute a waiver of the Local Borrower's
covenants to complete and place the Project in operation.
4.07. CLOSE-OUT.
The Department shall conduct a final inspection of the Project and Project records.
Following the inspection, deadlines for submitting additional disbursement requests, if any, shall
be established, along with deadlines for uncompleted Loan requirements, if any. Deadlines shall
be incorporated into the Loan Agreement by amendment. The Loan principal shall be reduced by
any excess over the amount required to pay all approved costs. As a result of such adjustment, the
Semiannual Loan Payment shall be reduced accordingly, as addressed in Section 10.05.
4.08. LOAN DISBURSEMENTS.
Disbursements shall be made only by the Trustee for expenses incurred by the Local
Borrower upon receipt of a requisition in the form provided under the Indenture executed by the
Department. Loan disbursements shall be made by electronic means. Disbursements shall be made
directly to the Local Borrower for reimbursement of the incurred construction costs and related
services and technical services during construction. A requisition for disbursements shall be made
upon receipt by the Department of the following:
(1) A completed disbursement request form signed by the Authorized Representative.
Such requests must be accompanied by sufficiently itemized summaries of the materials, labor, or
services to identify the nature of the work performed; the cost or charges for such work; and the
person providing the service or performing the work.
17
(2) A certification signed by the Authorized Representative as to the current estimated
costs of the Project; that the materials, labor, or services represented by the invoice have been
satisfactorily purchased, performed, or received and applied to the Project; that all funds received
to date have been applied toward completing the Project; and that under the terms and provisions
of the contracts, the Local Borrower is required to make such payments.
(3) A certification by the engineer responsible for overseeing construction stating that
equipment, materials, labor and services represented by the construction invoices have been
satisfactorily purchased, or received, and applied to the Project in accordance with construction
contract documents; stating that payment is in accordance with construction contract provisions;
stating that construction, up to the point of the requisition, is in compliance with the contract
documents; and identifying all additions or deletions to the Project which have altered the Project's
performance standards, scope, or purpose since the issue of the Department construction permit.
(4) Such other certificates or documents by engineers, attorneys, accountants,
contractors, or suppliers as may reasonably be required by the Department.
ARTICLE V - RATES AND USE OF THE WATER AND SEWER SYSTEMS
5.01. RATE COVERAGE.
The Local Borrower shall maintain rates and charges for the services furnished by the
Water and Sewer Systems which will be sufficient to provide, in each Fiscal Year, Pledged
Revenues equal to or exceeding 1.15 times the sum of the Semiannual Loan Payments due in such
Fiscal Year. In addition, the Local Borrower shall satisfy the coverage requirements of all senior
and parity debt obligations.
5.02. NO FREE SERVICE.
The Local Borrower shall not permit connections to, or furnish any services afforded by,
the Water or Sewer System without making a charge therefore based on the Local Borrower's
uniform schedule of rates, fees, and charges.
5.03. MANDATORY CONNECTIONS.
The Local Borrower shall adopt, as necessary, and enforce requirements, consistent with
applicable laws, for the owner, tenant or occupant of each building located on a lot or parcel of
land which is served, or may reasonably be served, by the Sewer System to connect such building
to the Sewer System.
5.04. NO COMPETING SERVICE.
The Local Borrower shall not allow any person to provide any services which would
compete with the Water or Sewer System so as to adversely affect Gross Revenues.
18
5.05. MAINTENANCE OF THE WATER AND SEWER SYSTEMS.
The Local Borrower shall operate and maintain the Water and Sewer Systems in a proper,
sound and economical manner and shall make all necessary repairs, renewals and replacements.
5.06. ADDITIONS AND MODIFICATIONS.
The Local Borrower may make any additions, modifications or improvements to the Water
and Sewer Systems which it deems desirable and which do not materially reduce the operational
integrity of any part of the Water or Sewer System. All such renewals, replacements, additions,
modifications and improvements shall become part of the Water and Sewer Systems.
5.07. COLLECTION OF REVENUES.
The Local Borrower shall use its best efforts to collect all rates, fees and other charges due
to it. The Local Borrower shall establish liens on premises served by the Water or Sewer System
for the amount of all delinquent rates, fees and other charges where such action is permitted by
law. The Local Borrower shall, to the full extent permitted by law, cause to discontinue the
services of the Water and Sewer Systems and use its best efforts to shut off water service furnished
to persons who are delinquent beyond customary grace periods in the payment of Water and Sewer
System rates, fees and other charges.
ARTICLE VI - DEFAULTS AND REMEDIES
6.01. EVENTS OF DEFAULT.
Each of the following events is hereby declared an event of default:
(1) Failure to make any Monthly Loan Deposit when it is due and such failure shall
continue for a period of 30 days or failure to make any installment of the Semiannual Loan
Payment when it is due and such failure shall continue for a period of 5 days.
(2) Except as provided in Subsections 6.01(1) and 6.01(7), failure to comply with the
provisions of this Agreement or failure in the performance or observance of any of the covenants
or actions required by this Agreement and such failure shall continue for a period of 60 days after
written notice thereof to the Local Borrower by the Department.
(3) Any warranty, representation or other statement by, or on behalf of, the Local
Borrower contained in this Agreement or in any document, certificate or information furnished in
compliance with, or in reference to, this Agreement, which is false or misleading.
(4) An order or decree entered, with the acquiescence of the Local Borrower,
appointing a receiver of any part of the Water or Sewer System or Gross Revenues thereof; or if
such order or decree, having been entered without the consent or acquiescence of the Local
Borrower, shall not be vacated or discharged or stayed on appeal within 60 days after the entry
thereof.
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(5) Any proceeding instituted, with the acquiescence of the Local Borrower, for the
purpose of effecting a composition between the Local Borrower and its creditors or for the purpose
of adjusting the claims of such creditors, pursuant to any federal or state statute now or hereafter
enacted, if the claims of such creditors are payable from Gross Revenues of the Water or Sewer
System.
(6) Any bankruptcy, insolvency or other similar proceeding instituted by, or against,
the Local Borrower under federal or state bankruptcy or insolvency law now or hereafter in effect
and, if instituted against the Local Borrower, is not dismissed within 60 days after filing.
(7) Failure of the Local Borrower to give immediate written notice of default to the
Department and such failure shall continue for a period of 30 days.
6.02. REMEDIES.
Upon any event of default and subject to the rights of others having prior liens on the
Pledged Revenues, the Department may enforce the rights of the Corporation and the Department
by any of the following remedies:
(1) By mandamus or other proceeding at law or in equity, cause to establish rates and
collect fees and charges for use of the Water and Sewer Systems, and to require the Local Borrower
to fulfill this Agreement.
(2) By action or suit in equity, require the Local Borrower to account for all moneys
received pursuant to this Agreement or from the ownership of the Water and Sewer Systems and
to account for the receipt, use, application, or disposition of the Pledged Revenues.
(3) By action or suit in equity, enjoin any acts or things which may be unlawful or in
violation of the rights of the Corporation or the Department.
(4) By applying to a court of competent jurisdiction, cause the appointment of a
receiver to manage the Water and Sewer Systems, establish and collect fees and charges, and apply
the revenues to the reduction of the obligations under this Agreement.
(5) By certifying to the Auditor General and the Chief Financial Officer delinquency
on Loan repayments, the Department may provide for the payment to the Trustee of the delinquent
amount plus a penalty from any unobligated funds due to the Local Borrower under any revenue
or tax sharing fund established by the State, except as otherwise provided by the State Constitution.
A penalty may be imposed in an amount not to exceed an interest rate of 18 percent per annum on
the amount due in addition to charging the cost to handle and process the debt.
(6) By notifying financial market credit rating agencies and potential creditors.
(7) By suing for payment of amounts due, or becoming due, with interest on overdue
payments together with all costs of collection, including attorneys' fees.
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(8) By accelerating the repayment schedule or increasing the Financing Rate on the
unpaid principal of the Loan to as much as 1.667 times the Financing Rate for a default under
Subsection 6.01(1).
6.03. DELAY AND WAIVER.
No delay or omission by the Corporation or the Department to exercise any right or power
accruing upon event of default shall impair any such right or power or shall be construed to be a
waiver of any such default or acquiescence therein, and every such right and power may be
exercised as often as may be deemed expedient. No waiver or any default under this Agreement
shall extend to or affect any subsequent event of default, whether of the same or different provision
of this Agreement, or shall impair consequent rights or remedies.
ARTICLE VII - THE PLEDGED REVENUES
7.01. SUPERIORITY OF THE PLEDGE TO THE CORPORATION.
From and after the effective date of this Agreement, the Corporation shall have a lien on
the Pledged Revenues, which along with any other Corporation State Revolving Fund liens on the
Pledged Revenues, on equal priority, will be prior and superior to any other lien, pledge or
assignment with the following exception. All obligations of the Local Borrower under this
Agreement shall be junior, inferior, and subordinate in all respects in right of payment and security
to any additional senior obligations issued with the Department's consent pursuant to Section 7.02.
Any of the Pledged Revenues may be released from the lien on such Pledged Revenues in favor
of the Corporation if the Department makes a determination, based upon facts deemed sufficient
by the Department, that the remaining Pledged Revenues will, in each Fiscal Year, equal or exceed
1.15 times the debt service coming due in each Fiscal Year under the terms of this Agreement.
7.02. ADDITIONAL DEBT OBLIGATIONS.
The Local Borrower may issue additional debt obligations on a parity with, or senior to,
the lien of the Corporation on the Pledged Revenues provided the Department's written consent is
obtained. Such consent may be granted if the Local Borrower demonstrates at the time of such
issuance that the Pledged Revenues, which may take into account reasonable projections of growth
of the Water and Sewer Systems and revenue increases, plus revenues to be pledged to the
additional proposed debt obligations will, during the period of time Semiannual Loan Payments
are to be made under this Agreement, equal or exceed 1.15 times the annual combined debt service
requirements of this Agreement and the obligations proposed to be issued by the Local Borrower
and will satisfy the coverage requirements of all other debt obligations secured by the Pledged
Revenues.
ARTICLE VIII - GENERAL PROVISIONS
8.01. DISCHARGE OF OBLIGATIONS.
All payments required to be made under this Agreement shall be cumulative and any
deficiencies in any Fiscal Year shall be added to the payments due in the succeeding Fiscal Year
and all Fiscal Years thereafter until fully paid. Payments shall continue to be secured by this
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Agreement until all of the payments required shall be fully paid to the Corporation. If at any time
the Local Borrower shall have paid, or shall have made provision for the timely payment of, the
entire principal amount of the Loan, and as applicable, Loan Service Fee, interest, and Grant
Allocation Assessment charges, the pledge of, and lien on, the Pledged Revenues to the
Corporation shall be no longer in effect. Deposit of sufficient cash or Defeasance Obligations may
be made to effect defeasance of this Loan. However, the deposit shall be made in irrevocable trust
with a banking institution or trust company for the sole benefit of the Corporation or its assignees
and shall be subject to approval by the Corporation. There shall be no penalty imposed by the
Corporation for early retirement of this Loan.
8.02. PROJECT RECORDS AND STATEMENTS.
Books, records, reports, engineering documents, contract documents, and papers shall be
available to the authorized representatives of the Corporation, the Department and the U.S.
Environmental Protection Agency's Inspector General for inspection at any reasonable time after
the Local Borrower has received a disbursement and until five years after the final amendment
date.
8.03. ACCESS TO PROJECT SITE.
The Local Borrower shall provide access to Project sites and administrative offices to
authorized representatives of the Corporation and the Department at any reasonable time. The
Local Borrower shall cause its engineers and contractors to cooperate during Project inspections,
including making available working copies of plans and specifications and supplementary
materials.
8.04. ASSIGNMENT OF RIGHTS UNDER AGREEMENT.
The Local Borrower hereby expressly acknowledges that the Loan and all payments of
principal and interest thereon, and all proceeds thereof, but excluding the Loan Service Fee, have
been pledged and assigned to the Trustee under the Indenture as security for the payment of
principal of, premium, if any, and interest on the Bonds and the Trustee shall be entitled to act
hereunder, and by the execution of this Agreement the Local Borrower in all respects consents to
such assignment. The Corporation, the Department and the Trustee may further assign all or any
parts of their rights under this Agreement without the prior consent of the Local Borrower after
written notification to the Local Borrower. The Local Borrower shall not assign its rights and
obligations under this Agreement without the prior written consent of the Department.
8.05. AMENDMENT OF AGREEMENT.
This Agreement may be amended in writing, except that no amendment shall be permitted
which is inconsistent with any applicable statutes, rules, regulations, executive orders, or written
agreements between the Department and the U.S. Environmental Protection Agency (EPA). This
Agreement may be amended after all construction contracts are executed to re-establish the Project
cost, Loan amount, Project schedule, and Semiannual Loan Payment amount. A final amendment
establishing the final Project costs and the Loan Service Fee based on actual Project costs shall be
completed after the Department's final inspection of the Project records.
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8.06. ANNULMENT OF AGREEMENT.
The Corporation, in consultation with the Department, may unilaterally annul this
Agreement if the Local Borrower has not drawn any of the Loan proceeds within twelve months
after the effective date of this Agreement. If the Corporation unilaterally annuls this Agreement,
the Corporation will provide written notification to the Local Borrower.
8.07. SEVERABILITY CLAUSE.
If any provision of this Agreement shall be held invalid or unenforceable, the remaining
provisions shall be construed and enforced as if such invalid or unenforceable provision had not
been contained herein.
8.08. USE AS MATCHING FUNDS.
The EPA has provided a class deviation from the provisions of 40 CFR 35.3125(b)(1) to
allow these second -tier funds to be used as local matching requirements for most EPA grant funded
treatment works projects, including special Appropriations Act projects.
8.09. DAVIS -BACON ACT REQUIREMENTS.
(1) The Local Borrower shall periodically interview 10% of the work force entitled to
Davis -Bacon prevailing wages (covered employees) to verify that contractors or subcontractors
are paying the appropriate wage rates. Local Borrowers shall immediately conduct interviews in
response to an alleged violation of the prevailing wage requirements. As provided in 29 CFR
5.6(a)(5) all interviews must be conducted in confidence. The Local Borrower must use
Standard Form 1445 or equivalent documentation to memorialize the interviews. Copies of the
SF 1445 are available from EPA on request.
(2) The Local Borrower shall periodically conduct spot checks of a representative
sample of weekly payroll data to verify that contractors or subcontractors are paying the
appropriate wage rates. The Local Borrower shall establish and follow a spot check schedule
based on its assessment of the risks of noncompliance with Davis -Bacon posed by contractors or
subcontractors and the duration of the contract or subcontract. At a minimum, if practicable, the
subrecipient should spot check payroll data within two weeks of each contractor or
subcontractor's submission of its initial payroll data and two weeks prior to the completion date
of the contract or subcontract. Local Borrowers must conduct more frequent spot checks if the
initial spot check or other information indicates that there is a risk that the contractor or
subcontractor is not complying with Davis -Bacon. In addition, during the examinations the Local
Borrower shall verify evidence of fringe benefit plans and payments thereunder by contractors
and subcontractors who claim credit for fringe benefit contributions.
(3) The Local Borrower shall periodically review contractors and subcontractors use
of apprentices and trainees to verify registration and certification with respect to apprenticeship
and training programs approved by either the U.S Department of Labor (DOL) or a state, as
appropriate, and that contractors and subcontractors are not using disproportionate numbers of
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laborers, trainees, and apprentices. These reviews shall be conducted in accordance with the
schedules for spot checks and interviews described in items (1) and (2) above.
(4) Local Borrowers must immediately report potential violations of the Davis -Bacon
prevailing wage requirements to the EPA Davis -Bacon contact Sheryl Parsons at
Parsons. Sheryl@epamail.epa.gov and to the appropriate DOL Wage and Hour District Office
listed at hft://www.dol.goy/whd/america2.htm-
8.10. AMERICAN IRON AND STEEL REQUIREMENT.
The Local Borrower's subcontracts must contain requirements that all of the iron and
steel products used in the Project are in compliance with the Buy American requirement as
described in H. R. 3547, "Consolidated Appropriations Act, 2014" unless the Local Borrower
has obtained a waiver pertaining to the Project or the Department has advised the Local
Borrower that the Buy American requirement is not applicable to the Project.
8.11. FISCAL SUSTAINABILITY PLAN.
The Federal Water Pollution Control Act (FWPCA) requires a recipient of a Loan for a
project that involves the repair, replacement, or expansion of a treatment works to develop and
implement a Fiscal Sustainability Plan or certify that it has developed and implemented such a
plan.
Under Section 603(d)(1)(EO(i) of that act, the Local Borrower shall (i) develop and
implement a Fiscal Sustainability Plan that includes: an inventory of critical assets that are a part
of the treatment works; an evaluation of the condition and performance of inventoried assets or
asset groupings; a certification that the recipient has evaluated and will be implementing water
and energy conservation efforts as part of the plan; and a plan for maintaining, repairing, and, as
necessary, replacing the treatment works and a plan for funding such activities; or (ii) certify that
the recipient has developed and implemented a plan that meets the requirements under (i).
At a minimum, the Fiscal Sustainability Plan shall include: an inventory of critical assets
that are part of the Project funded by this agreement; an evaluation of the condition and
performance of these assets; a certification that the assistance recipient has evaluated and will be
implementing water and energy conservation efforts as part of the plan; and a plan for
maintaining, repairing, and, as necessary, replacing the treatment works and a plan for funding
such activities.
A Fiscal Sustainability Plan certification is a certification by the Local Borrower that the
Fiscal Sustainability Plan has been developed and is being implemented. For systems that self -
certify under Section 603(d)(1)(E)(ii), certification is due at the time of loan closing. For
systems developing a Fiscal Sustainability Plan under Section 603(d)(1)(E)(i), the requirement to
develop and implement an Fiscal Sustainability Plan is a condition of the Loan Agreement and is
due before the final disbursement is approved.
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8.12. PUBLIC RECORDS ACCESS.
(1) The Local Borrower shall comply with Florida Public Records law under Chapter
119, F.S. Records made or received in conjunction with this Agreement are public records under
Florida law, as defined in Section 119.011(12), F.S. The Local Borrower shall keep and maintain
public records required by the Department to perform the services under this Agreement.
(2) This Agreement may be unilaterally canceled by the Department for refusal by the
Local Borrower to either provide to the Department upon request, or to allow inspection and
copying of all public records made or received by the Local Borrower in conjunction with this
Agreement and subject to disclosure under Chapter 119, F.S., and Section 24(a), Article I, Florida
Constitution.
(3) IF THE LOCAL BORROWER HAS QUESTIONS REGARDING
THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO THE
LOCAL BORROWER'S DUTY TO PROVIDE PUBLIC RECORDS
RELATING TO THIS AGREEMENT, CONTACT THE DEPARTMENT'S
CUSTODIAN OF PUBLIC RECORDS AT (850) 245-2118, BY EMAIL AT
ombudsmangdep.state.fl.us, or at the mailing address below:
Department of Environmental Protection
ATTN: Office of Ombudsman and Public Services
Public Records Request
3900 Commonwealth Blvd, MS 49
Tallahassee, FL 32399
8.13. TERMINATION, FALSE CERTIFICATION, SCRUTINIZED COMPANIES, AND
BOYCOTTING.
The Local Borrower certifies that it and any of its affiliates are not scrutinized companies
as identified in Section 287.135, F.S. In addition, the Local Borrower agrees to observe the
requirements of Section 287.135, F.S., for applicable sub -agreements entered into for the
performance of work under this Agreement. Pursuant to Section 287.135, F.S., the Department
may immediately terminate this Agreement for cause if the Local Borrower, its affiliates, or its
subcontractors are found to have submitted a false certification; or if the Local Borrower, its
affiliates, or its subcontractors are placed on any applicable scrutinized companies list or engaged
in prohibited contracting activity during the term of the agreement. As provided in Subsection
287.135(8), F.S., if federal law ceases to authorize these contracting prohibitions then they shall
become inoperative.
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ARTICLE IX - CONSTRUCTION CONTRACTS AND INSURANCE
9.01. AUTHORIZATION TO AWARD CONSTRUCTION CONTRACTS.
The following documentation is required to receive the Department's authorization to
award construction contracts:
(1) Proof of advertising.
(2) Award recommendation, bid proposal, and bid tabulation (certified by the
responsible engineer).
(3) Certification of compliance with the conditions of the Department's approval of
competitively or non -competitively negotiated procurement, if applicable.
(4) Certification Regarding Disbarment, Suspension, Ineligibility and Voluntary
Exclusion.
(5) Assurance that the Local Borrower and contractors are in compliance with Section
1606 with labor standards, including prevailing wage rates established for its locality by the U.S.
Department of Labor under the Davis -Bacon Act for Project construction.
(6) Certification that all procurement is in compliance with Section 8.10 which states
that all iron and steel products used in the Project must be produced in the United States unless (a)
a waiver is provided to the Local Borrower by the EPA or (b) compliance would be inconsistent
with United States obligations under international agreements.
9.02. SUBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS.
After the Department's authorization to award construction contracts has been received,
the Local Borrower shall submit:
(1) Contractor insurance certifications.
(2) Executed Contract(s).
(3) Notices to proceed with construction.
9.03. INSURANCE REQUIRED.
The Local Borrower shall cause the Project, as each part thereof is certified by the engineer
responsible for overseeing construction as completed, and the Water and Sewer Systems (hereafter
referred to as "Revenue Producing Facilities") to be insured by an insurance company or
companies licensed to do business in the State against such damage and destruction risks as are
customary for the operation of Revenue Producing Facilities of like size, type and location to the
extent such insurance is obtainable from time to time against any one or more of such risks.
The proceeds of insurance policies received as a result of damage to, or destruction of, the
Project or the other Revenue Producing Facilities, shall be used to restore or replace damaged
26
portions of the facilities. If such proceeds are insufficient, the Local Borrower shall provide
additional funds to restore or replace the damaged portions of the facilities. Repair, construction
or replacement shall be promptly completed.
ARTICLE X - DETAILS OF FINANCING
10.01. PRINCIPAL AMOUNT OF LOAN.
The estimated principal amount of the Loan is $4,089,103, which consists of $4,071,303
to be disbursed to the Local Borrower and $17,800 of Capitalized Interest.
Capitalized Interest is not disbursed to the Local Borrower, but is amortized via periodic
Loan repayments as if it were actually disbursed. Capitalized Interest is computed at the Financing
Rate, or rates, set for the Loan. It accrues and is compounded annually from the time when
disbursements are made until six months before the first Semiannual Loan Payment is due.
Capitalized Interest is estimated prior to establishing the schedule of actual disbursements.
If the total amount disbursed within eighteen months after the effective date of this
Agreement is less than half of the Loan proceeds amount 'authorized for disbursement, the
Department may unilaterally reduce the amount authorized for disbursement. Such a reduction
would not affect the total authorized Loan amount.
10.02. LOAN SERVICE FEE.
The Loan Service Fee is estimated as $81,426 for the Loan amount authorized to date. The
fee represents two percent of the Loan amount excluding Capitalized Interest; that is, two percent
of $4,071,303. The Loan Service Fee amount shall be revised with any increase or decrease
amendment. The Loan Service Fee is based on actual Project costs and assessed in the final
amendment. The Local Borrower shall pay the Loan Service Fee from the first available
repayments following the final amendment.
Capitalized Interest is computed on the assessed Loan Service Fee at the Financing Rate,
or rates and included in the final amendment. It accrues and is compounded annually from the
final amendment date until six months before the first Semiannual Loan Payment is due. A service
fee assessed in a final amendment occurring later than six months before the first Semiannual Loan
Payment date would not accrue Capitalized Interest charges.
10.03. FINANCING RATE.
The Financing Rate on the unpaid principal of the Loan amount specified in Section 10.01
is 0.91 percent per annum. The Financing Rate equals the sum of the interest rate and the Grant
Allocation Assessment Rate. The interest rate is 0.455 percent per annum and the Grant Allocation
Assessment rate is 0.455 percent per annum. However, if this Agreement is not executed by the
Local Borrower and returned to the Department before April 1, 2017, the Financing Rate may be
adjusted. A new Financing Rate shall be established for any funds provided by amendment to this
Agreement.
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10.04. LOAN TERM.
The Loan shall be repaid in 40 Semiannual Loan Payments.
10.05. REPAYMENT SCHEDULE.
The Semiannual Loan Payment shall be computed based upon the principal amount of the
Loan plus the estimated Loan Service Fee and the principle of level debt service. The amount of
Loan proceeds authorized for disbursement and associated Capitalized Interest will be treated as
the Loan principal for computing the Semiannual Loan Payment. The Semiannual Loan Payment
amount may be adjusted, by amendment of this Agreement, based upon revised information. After
the final disbursement of Loan proceeds, the Semiannual Loan Payment shall be based upon the
actual Project costs and the Loan Service Fee, and actual dates and amounts of disbursements,
taking into consideration any previous payments. Actual Project costs shall be established after
the Department's inspection of the completed Project and associated records. The Corporation
will deduct the Loan Service Fee and all associated interest from the first available repayments
following the final amendment.
Each Semiannual Loan Payment shall be in the amount of $114,275 until the payment
amount is adjusted by amendment. The interest and Grant Allocation Assessment portions of each
Semiannual Loan Payment shall be computed, using their respective rates, on the unpaid balance
of the principal amount of the Loan, which principal includes Capitalized Interest. Interest (at the
Financing Rate) also shall be computed on the estimated Loan Service Fee. The interest and Grant
Allocation Assessment on the unpaid balance shall be computed as of the due date of each
Semiannual Loan Payment.
Semiannual Loan Payments shall be paid to, and must be received by, the Trustee
beginning on September 15, 2018 and semiannually thereafter on March 15 and September 15 of
each year until all amounts due hereunder have been fully paid. Funds transfer shall be made by
electronic means.
The Semiannual Loan Payment amount is based on the total amount owed of $4,170,529,
which consists of the Loan principal and the estimated Loan Service Fee.
10.06. PROJECT COSTS.
The Local Borrower, the Corporation and the Department acknowledge that the actual
Project costs have not been determined as of the effective date of this Agreement. Project cost
adjustments may be made as a result of Project changes agreed upon by the Department.
Capitalized Interest will be recalculated based on actual dates and amounts of Loan disbursements.
If the Local Borrower receives other governmental financial assistance for this Project, the costs
funded by such other governmental assistance will not be financed by this Loan. The Department
shall establish the final Project costs after its final inspection of the Project records. Changes in
Project costs may also occur as a result of the Local Borrower's Project audit or a Department
audit. The Local Borrower agrees to the following estimates of Project costs:
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PROJECT COSTS
CATEGORY COST
Construction and Demolition 3,575,041
Contingencies 178,752
Technical Services After Bid Opening 317,510
Subtotal (Disbursable Amount) 4,071,303
Capitalized Interest 17,800
TOTAL (Loan Principal Amount) 4,089,103
10.07. PROJECT SCHEDULE.
The Local Borrower agrees by execution hereof-
(1) Invoices submitted for work performed on or after November 9, 2016 shall be
eligible for reimbursement.
(2) Completion of Project construction is scheduled for March 15, 2018.
(3) The Loan Debt Service Account shall be established and Monthly Loan Deposits
shall begin no later than March 15, 2018.
(4) The initial annual certification required under Subsection 2.01(10) of this
Agreement shall be due June 15, 2018. Thereafter the certification shall be submitted no later than
September 30 of each year until the final Semiannual Loan Payment is made.
(5) The first Semiannual Loan Payment in the amount of $114,275 shall be due
September 15, 2018.
10.08. SPECIAL CONDITION.
Prior to any funds being released the Local Borrower shall submit a certified copy of the
Resolution which authorizes the application, establishes the Pledged Revenues, and designates
an Authorized Representative for signing the application and executing the Loan Agreement.
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ARTICLE XI - EXECUTION OF AGREEMENT
This Loan Agreement WW590500 may be executed in three or more counterparts, any of
which shall be regarded as an original and all of which constitute but one and the same instrument.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
its behalf by its Chief Executive Officer and the Local Borrower has caused this Agreement to be
executed on its behalf by its Authorized Representative and by its affixed seal. The effective date
of this Agreement shall be as set forth below by the Chief Executive Officer of the Corporation.
for
FLORIDA WATER POLLUTION CONTROL FINANCING CORPORATION
Chief Executive Officer Date
Reviewed and approved by the Corporate Secretary
for
CITY OF LONGWOOD
Mayor
I attest to the opinion expressed in Section
Attest 2.03, entitled Legal Authorization. * *
City Clerk
City Attorney
SEAL
** City Attorney is not rendering an opinion concerning any
any federal laws, federal or state securities laws, tax laws
or any tax -related issue, including without limitation, the
determination of taxability of the Loan Agreement and this
transaction under federal and State of Florida law. The
opinion is limited to the laws of the State of Florida.
APPROVED AND ACCEPTED BY THE STATE OF FLORIDA DEPARTMENT OF
ENVIRONMENTAL PROTECTION.
Secretary or Designee
M