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HomeMy WebLinkAboutAgenda Item Summary Formplj�_ , v y + incana oenrfo H� Date: 06/22/2020 AGENDA ITEM SUMMARY FORM File ID: #7581 Commission Meeting Date: 07/09/2020 Requesting Department: Department of Finance Sponsored By: District Impacted: All Type: Resolution Subject: Valorem Revenue Refunding Note - 2020 Port of Miami Tunnel Project Purpose of Item: A resolution of the Miami City Commission, approving the issuance of a not to exceed amount of twenty eight million five hundred thousand dollars ($28,500,000.00) in principal amount of a City of Miami, Florida Special Obligation Non -Ad Valorem Revenue Refunding Note, Taxable Series 2020 Port of Miami Tunnel Project and the direct placement and negotiated sale to JP Morgan to provide for interest savings. Background of Item: The City currently has an outstanding balance of $33,165,000 of its previously issued Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2012 Port of Miami Tunnel Project. The City's Financial Advisor issued a RFP for refunding and defeasing the bonds through a direct placement, resulting in JP Morgan Chase Bank providing the most favorable covenants. The refunding will result in a net present value savings of approximately $1.75 million. Budget Impact Analysis Item has NO budget impact Item is NOT Related to Revenue Item is NOT funded by Bonds Total Fiscal Impact: N/A Reviewed By Department of Finance Erica T Paschal Office of Management and Budget Donovan Dawson Office of Management and Budget Christopher M Rose City Manager's Office Sandra Bridgeman Legislative Division Valentin J Alvarez City Manager's Office Arthur Noriega V Office of the City Attorney Barnaby L. Min Office of the City Attorney Barnaby L. Min City Commission Nicole Ewan Office of the Mayor Mayor's Office Office of the City Clerk City Clerk's Office Office of the City Clerk City Clerk's Office Department Head Review Completed 06/22/2020 11:12 AM Budget Analyst Review Completed 06/26/2020 8:19 AM Budget Review Completed 06/28/2020 2:24 PM Assistant City Manager Review Completed 06/29/2020 4:03 PM Legislative Division Review Completed 06/29/2020 4:47 PM City Manager Review Completed 06/29/2020 5:57 PM Deputy City Attorney Review Completed 06/29/2020 7:20 PM Approved Form and Correctness Completed 06/29/2020 7:21 PM Meeting Completed 07/09/2020 9:00 AM Signed by the Mayor Completed 07/13/2020 2:52 PM Signed and Attested by the City Clerk Completed 07/13/2020 2:55 PM Rendered Completed 07/13/2020 2:55 PM OF .�f City of Miami * iMonrHATFO Is eA Legislation t p Resolution Enactment Number: R-20-0193 File Number: 7581 City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com Final Action Date:7/9/2020 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), PROVIDING FOR THE ISSUANCE OF NOT TO EXCEED TWENTY-EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($28,500,000.00) IN AGGREGATE PRINCIPAL AMOUNT OF A CITY OF MIAMI ("CITY") SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING NOTE, TAXABLE SERIES 2020 (PORT OF MIAMI TUNNEL PROJECT) ("2020 NOTE") AND THE PAYMENT OF COSTS OF ISSUANCE OF THE 2020 NOTE; FURTHER PROVIDING FOR A SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING NOTE, SERIES 2023 (PORT OF MIAMI TUNNEL PROJECT) IN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THE 2020 NOTE ("FUTURE NOTE" AND, TOGETHER WITH THE 2020 NOTE, "NOTES") AND THE COSTS OF ISSUANCE OF THE FUTURE NOTE AND COSTS OF DEFEASANCE AND REDEMPTION OF A PORTION OF THE SERIES 2012 BONDS TO BE REFUNDED AT THAT TIME; APPROVING THE SELECTION OF THE PROPOSAL FROM JPMORGAN CHASE BANK, N.A. ("LENDER") AND PROVIDING FOR THE DIRECT PLACEMENT WITH AND NEGOTIATED SALE OF SAID NOTES TO THE LENDER; SETTING CERTAIN BASIC PARAMETERS OF THE TERMS AND CONDITIONS OF THE LOAN AGREEMENTS AND THE NOTES AND AUTHORIZING THE NEGOTIATION, EXECUTION, AND DELIVERY, ALL IN A FORM ACCEPTABLE TO THE CITY ATTORNEY AND BOND COUNSEL, OF THE LOAN AGREEMENTS, THE NOTES, THE FORWARD DELIVERY, AND THE DIRECT PURCHASE AGREEMENT AND ANY AND ALL OTHER NECESSARY AGREEMENTS, DOCUMENTS, INSTRUMENTS, CHANGES, MODIFICATIONS, SUPPLEMENTS, AND AMENDMENTS THERETO AND IN CONNECTION THEREWITH; MAKING CERTAIN FINDINGS AND DETERMINATIONS; AUTHORIZING ALL REQUIRED ACTIONS BY THE CITY MANAGER, CITY CLERK, CITY ATTORNEY, BOND COUNSEL, FINANCIAL ADVISOR, AND ALL OTHER CITY OFFICIALS IN CONNECTION THEREWITH; FURTHER AUTHORIZING THE CITY MANAGER, CITY CLERK, CITY ATTORNEY, FINANCIAL ADVISOR, BOND COUNSEL, NOTE REGISTRARS, PAYING AGENTS, AND ALL OTHER NECESSARY CITY OFFICIALS TO UNDERTAKE THE NECESSARY STEPS AND TO NEGOTIATE, EXECUTE, AND DELIVER, ALL IN A FORM ACCEPTABLE TO THE CITY ATTORNEY AND BOND COUNSEL, AN ESCROW DEPOSIT AGREEMENT, ANY NOTICES, DOCUMENTS, INSTRUMENTS, CHANGES, MODIFICATIONS, SUPPLEMENTS, AND AMENDMENTS THERETO IN CONNECTION WITH THE REFUNDING, DEFEASANCE, AND REDEMPTION OF A PORTION OF THE CITY'S OUTSTANDING SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS, SERIES 2012 (PORT OF MIAMI TUNNEL PROJECT) ("SERIES 2012 BONDS") AND THE PREPAYMENT OF THE 2020 NOTE; DELEGATION OF AUTHORITY TO THE CITY MANAGER TO SELECT AN ESCROW AGENT AND A VERIFICATION AGENT; FURTHER AUTHORIZING THE ISSUANCE OF THE NOTES AND THE REFUNDING, DEFEASANCE, AND REDEMPTION OF THE SERIES 2012 BONDS TO BE REFUNDED AND THE PREPAYMENT OF THE 2020 NOTE; RATIFYING, APPROVING, AND CONFIRMING CERTAIN NECESSARY ACTIONS BY THE CITY MANAGER AND DESIGNATED DEPARTMENTS IN ORDER TO UPDATE THE RELEVANT FINANCIAL CONTROLS AND COMPUTER SYSTEMS IN CONNECTION THEREWITH; PROVIDING FOR A REPEALER PROVISION; PROVIDING FOR APPLICABLE EFFECTIVE DATES. WHEREAS, the City of Miami ("City") has currently outstanding Thirty -Three Million One Hundred Sixty -Five Thousand Dollars ($33,165,000.00) of its previously issued Forty -Four Million Seven Hundred Twenty -Five Thousand Dollars ($44,725,000.00) Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2012 (Port of Miami Tunnel Project) ("Series 2012 Bonds"); and WHEREAS, in order to obtain interest savings, the City desires to issue in a total aggregate principal amount of not to exceed Twenty -Eight Million Five Hundred Thousand Dollars ($28,500,000.00) of Special Obligation Non -Ad Valorem Revenue Refunding Note, Taxable Series 2020 (Port of Miami Tunnel Project) ("2020 Note") to advance refund a portion of the Series 2012 Bonds in principal amount of Twenty -Four Million Eight Hundred Fifty -Five Thousand Dollars ($24,855,000.00) representing the Amortization Requirements due March 1, 2024 through and including March 1, 2030 for the Series 2012 Bonds maturing on March 1, 2030 (which will become subject to optional redemption as of March 1, 2023) (such portion of the Series 2012 Bonds to be refunded are hereinafter referred to as the "Bonds to be Refunded"); and WHEREAS, in order to obtain further interest savings, the City has the option to prepay, without premium or penalty, the 2020 Note from December 2, 2022 through March 1, 2023 through the issuance of a Special Obligation Non -Ad Valorem Revenue Refunding Note, Series 2023 (Port of Miami Tunnel Project) in a total aggregate principal amount not to exceed the then outstanding principal amount of the 2020 Note ("Future Note" and, together with the 2020 Note, "Notes") to currently refund the principal amount of all of the 2020 Note then outstanding; and WHEREAS, the City's Financial Advisor, PFM Financial Advisors, LLC ("Financial Advisor'), issued a Request for Proposals to banking and financial institutions for refunding and defeasing the Bonds to be Refunded and received multiple proposals which were evaluated by the Financial Advisor for responses consistent with the City's needs; and WHEREAS, the proposals and recommendations by the Financial Advisor were reviewed and recommended by the City's Administration to the City's Finance Committee, with the proposal dated March 19, 2020 ("Proposal") from JP Morgan Chase Bank, N.A. ("Lender") being recommended by the Finance Committee on June 15, 2020 as the most responsive and responsible proposer providing the most favorable covenants to lend to the City the funds necessary to refund the Bonds to be Refunded and to pay transactional expenses, which loan shall be evidenced by the 2020 Note, which 2020 Note may be prepaid, without premium or penalty, with the proceeds of the Future Note as provided above to provide further interest rate savings to the City; and WHEREAS, in accordance with Section 218.385(1), Florida Statutes, as amended, the City Manager has recommended and the City Commission desires to find, determine, and declare as set forth below in Section 3 that a privately -placed negotiated sale of the Notes to the Lender is in the best interests of the City due to the complexities of the market; the timings of the refunding, defeasance, and redemption of the Bonds to be Refunded; and the timing of the issuance of the Notes; and WHEREAS, it is in the best interest of the City to approve the issuance of the Notes and the direct placement and negotiated sale of the Notes to the Lender to provide for interest savings pursuant to the City's debt management policy for current refunding bonds that result in a minimum of three percent (3%) Net Present Value savings and advance refunding bonds that result in a minimum of five percent (5%) Net Present Value savings to the City without extending the original maturities of the payments, to authorize the basic parameters of the terms and conditions of Loan Agreements between the City and the Lender, the Notes, and certain agreements and documents in connection with the issuance therewith, to delegate to the City Manager the determination of certain other details of the Loan Agreements, the Notes, the Forward Delivery, and Direct Placement Agreement, and the Escrow Deposit Agreement for the refunding, defeasance, and redemption of the Bonds to be Refunded, and to authorize the City Manager, the City Clerk, the City Attorney, Bond Counsel, the Financial Advisor, the Note Registrars, the Paying Agents, and other necessary and appropriate City officials to undertake and to do all actions necessary and in the best interests of the City in connection with the direct placement, issuance, and delivery of the Notes, the advance refunding, defeasance, and redemption of the Bonds to be Refunded, the prepayment of the 2020 Notes, and the costs of issuance, defeasance, and redemption related thereto; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. Authority. This Resolution is adopted pursuant to the Constitution of the State of Florida ("State"); Chapter 166, Florida Statutes, as amended; the Charter of the City of Miami, Florida, as amended ("City Charter'), the Code of the City of Miami, Florida, as amended ("City Code"); applicable City resolutions; and other applicable provisions of law (collectively, "Act" Section 2. Definitions. All capitalized undefined terms shall have the meanings as set forth in this Resolution, the Proposal, and as defined in the Loan Agreements and the Notes. In addition to the words and terms defined in the recitals to this Resolution, as used herein, the following terms shall have the following meanings herein unless the context otherwise requires: "Bond Counsel" means Squire Patton Boggs (US) LLP, Miami, Florida or any other attorney at law or firm of attorneys of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions and duly admitted to practice law before the highest court of any state of the United States of America. "Bond Registrar" means the Finance Director of the City. "Escrow Agent" means the bank or financial institution selected by the City Manager as provided in Section 17. "Escrow Deposit Agreement" means the Escrow Deposit Agreement to be entered into between the City and the Escrow Agent providing for the refunding, defeasance, and redemption of the Bonds to be Refunded. "Financial Advisor" means PFM Financial Advisors, LLC. "Fiscal Year" means the Fiscal Year of the City beginning on October 1 of each year and ending on September 30 of the following calendar year. "Forward Delivery and Direct Purchase Agreement" means the Forward Delivery and Direct Purchase Agreement relating to the Future Note to be entered into between the City and the Lender in accordance with this Resolution and the Proposal. "Future Loan Agreement' means the Loan Agreement relating to the Future Note to be entered into between the City and the Lender in accordance with the terms of this Resolution and the Proposal. "Future Note" means the City's Special Obligation Non -Ad Valorem Revenue Refunding Note, Series 2023 (Port of Miami Tunnel Project) in a total aggregate principal amount not to exceed the then outstanding principal amount of the 2020 Note authorized pursuant to this Resolution. "Interest Rate" means a not to exceed rate per annum (as adjusted pursuant to the applicable Loan Agreement) that will provide for net present value debt service savings required by the City's debt management policy, which provides that the City may issue current refunding bonds that result in a minimum of three percent (3%) Net Present Value savings and advance refunding bonds that result in a minimum of five percent (5%) Net Present Value savings. "IRS Code" shall mean the Internal Revenue Code of 1986, as amended, and all temporary, proposed, or permanent implementing regulations promulgated or applicable thereunder. "Lender" means JPMorgan Chase Bank, N.A., as the purchaser and holder of the Notes and as Lender under the Loan Agreements. "Loan Agreements" means, collectively, the 2020 Loan Agreement and the Future Loan Agreement. "Maturity Date" means March 1, 2030. "Non -Ad Valorem Revenues" means all revenues of the City derived from any source whatsoever other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein. "Note Registrar" means the Finance Director of the City. "Notes" means, collectively, the 2020 Note and the Future Note. "Payment(s)" means all amounts payable by the City of principal, interest, and prepayment penalty, if any, on the Notes and all other amounts payable by the City pursuant to the Loan Agreements. "Payment Dates" and "Payment Frequency" means (A) with respect to the 2020 Note, (i) that principal payments shall be made annually on March 1, commencing March 1, 2021; (ii) that interest payments shall be paid semi-annually each March 1 and September 1, commencing September 1, 2020; and (iii) that prepayments shall be made as set forth in the 2020 Loan Agreement; and (B) with respect to the Future Note, if issued, (i) that principal payments shall be made annually on March 1, commencing on the March 1 immediately succeeding the issuance date of the Future Note; (ii) that interest payments shall be paid semi- annually each March 1 and September 1, commencing the first March 1 or September 1 immediately succeeding the issuance date of the Future Note; and (iii) that prepayments shall be made as set forth in the Future Loan Agreement. "Paving Agent" means the Finance Director of the City. "Pledged Funds" means (A) Non -Ad Valorem Revenues deposited into the applicable Note Fund by the City pursuant to a covenant to budget and appropriate established by this Resolution and the Loan Agreements and (B) income received from the investment of moneys deposited into the funds and accounts established by the Loan Agreements. "Proposal" means the attached and incorporated proposal dated March 19, 2020 from the Lender to the City. "Resolution(s)" means this Resolution adopted by the City Commission on July 9, 2020, as amended and supplemented from time to time. "Series 2012 Bonds" means the City's Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2012 (Port of Miami Tunnel Project). "Taxable Interest Rate" means the rate per annum to be borne by the Future Note should the tax-exempt interest on the Future Note become taxable, as set out in Section 6(B) below and in the Future Loan Agreement, and such taxable rate of interest shall become, by automatic conversion, the original taxable interest rate fixed on the date of issuance of the 2020 Note, and such taxable interest rate shall continue in effect as of the date the tax status is ruled to have changed from tax-exempt to taxable until the final Payment on the Future Note. "2020 Loan Agreement" means the Loan Agreement relating to the 2020 Note to be entered into between the City and the Lender in accordance with the terms of this Resolution and the Proposal. "2020 Note" means the not to exceed Twenty Eight Million Five Hundred Thousand Dollars ($28,500,000.00) City Special Obligation Non -Ad Valorem Revenue Refunding Note, Taxable Series 2020 (Port of Miami Tunnel Project) authorized pursuant to this Resolution. Section 3. Recitals, Findings, and Determinations. The recitals and findings contained in the Preamble of this Resolution are adopted by reference and incorporated as if fully set forth in this Section. Additionally, it is hereby ascertained, determined, and declared that: (A) In accordance with Section 218.385, Florida Statutes, the City hereby finds, determines, and declares, based upon the advice of its Financial Advisor for the Notes, that a negotiated sale of the Notes is in the best interests of the City for the following reasons: (i) The underlying security structure (credit) is one that is broadly understood by market participants and maintains a strong underlying credit rating; (ii) The structure and timing of the issuance of the Notes require extensive planning and it is not practical for the City, the Financial Advisor, and the Lender to engage in such planning within the time constraints and uncertainties inherent within a competitive bidding process; (iii) The short average life of the transaction lends itself to the competitive solicitation of financial institutions undertaken by the City with respect to the Notes; (iv) Market conditions are such that this type of credit would be well received by financial institutions; (v) The vagaries of the current and near future municipal bond market demand that the City have the maximum time and flexibility in order to obtain the most favorable interest rates available; and (vi) The structure and timing of the advance refunding, defeasance, and redemption of the Bonds to be Refunded require extensive planning. (B) It is in the best interests of the City, its residents, and taxpayers to issue the Notes in order to realize debt service savings without extending the time for such payments. (C) The Notes shall be payable from the Pledged Funds. (D) There are expected to be sufficient Pledged Funds to pay the interest and principal on the Notes as the same become due and payable. (E) The Pledged Funds are not now pledged or encumbered in any other matter. (F) The Notes shall not constitute a lien upon any properties owned by or situated within the City, except as provided herein with respect to the Pledged Funds, in the manner and to the extent provided herein. (G) Prior to the issuance of the Notes, the City shall receive from the Lender a Lender's Certificate, the form of which will be attached as an exhibit to the 2020 Loan Agreement with respect to the 2020 Note and the Forward Delivery and Direct Purchase Agreement with respect to the Future Note, and the Disclosure Letter containing the information (i) required by Section 218.385, Florida Statutes, and (ii) required by the City's debt management policy for current refunding bonds that result in a minimum of three percent (3%) Net Present Value savings and advance refunding bonds that result in a minimum of five percent (5%) Net Present Value savings, the form of which will be attached as an exhibit to the 2020 Loan Agreement with respect to the 2020 Note and the Forward Delivery and Direct Purchase Agreement with respect to the Future Note. (H) No finders' fees have been paid nor will be paid in connection with the issuance of the Notes. (1) In accordance with the recommendations of the City's Administration and the Finance Committee, the City Commission hereby approves the selection of the Proposal. Section 4. This Resolution to Constitute Contract. In consideration of the acceptance of the Notes authorized to be issued hereunder by those who shall hold the same from time to time, this Resolution and the Loan Agreements shall be deemed to be and shall constitute a contract between the City and the Lender. The covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection, and security of the Lender and the Notes, except as expressly provided herein and in the Loan Agreements. Section 5. Authorization of the Loan Agreements, the Notes, the Forward Delivery and Direct Purchase Agreement, the Escrow Deposit Agreement, and All Other Necessary Documents, Agreements, and Instruments. Subject and pursuant to the provisions hereof and in anticipation of the sale and delivery of the Notes, (A) the City Manager, in consultation with the City Attorney, Bond Counsel, and the Financial Advisor, is authorized' to negotiate, to execute, and to deliver, in a form acceptable to the City Attorney and Bond Counsel, (i) the 2020 Loan Agreement with the Lender with respect to the 2020 Note and (ii) the Forward Delivery and Direct Purchase Agreement and the Future Loan Agreement, each with the Lender with respect to the Future Note, (B) an obligation of the City to be known as the "Special Obligation Non -Ad Valorem Revenue Refunding Note, Taxable Series 2020 (Port of Miami Tunnel Project)" ' The herein authorization is further subject to compliance with all legal requirements that may be imposed, including but not limited to, those prescribed by the City Charter and City Code provisions. is authorized' to be issued, executed, and delivered in the aggregate principal amount of not to exceed Twenty -Eight Million Five Hundred Thousand Dollars ($28,500,000.00), and (C) an obligation of the City to be known as the "Special Obligation Non -Ad Valorem Revenue Refunding Note, Series 2023 (Port of Miami Tunnel Project)" is authorized' to be issued, executed, and delivered in the aggregate principal amount of not to exceed the then outstanding principal amount of the 2020 Note; provided, however, if the Future Note is issued in a year other than 2023, the designation of the Future Note shall be revised to reflect the year in which the Future Note is issued and (D) the City Manager, in consultation with the City Attorney, Bond Counsel, and the Financial Advisor, is authorized' to negotiate, to execute, and to deliver, in a form acceptable to the City Attorney and Bond Counsel, the Escrow Deposit Agreement and all other necessary documents, agreements, and instruments. The City Manager, after consultation with the City Attorney, Bond Counsel, and the Financial Advisor, is further authorized' to negotiate, execute, and deliver, in a form acceptable to the City Attorney and Bond Counsel, any changes, modifications, supplements, and amendments to the Loan Agreements, the Notes, the Forward Delivery and Direct Purchase Agreement, the Escrow Deposit Agreement, and any and all other agreements, documents, and instruments as should be deemed necessary or desirable and to take such other actions as shall be necessary to implement the terms and conditions of the Loan Agreements, the Notes, the Forward Delivery and Direct Purchase Agreement, and the Escrow Deposit Agreement. The provisions of such documents, as so negotiated, executed, and delivered, in a form acceptable to the City Attorney and Bond Counsel, are hereby incorporated into and made a part of this Resolution. Section 6. Description of the Notes. (A) The 2020 Note shall be issued as one (1) fully registered note in the aggregate principal amount not to exceed Twenty -Eight Million Five Hundred Thousand Dollars ($28,500,000.00), shall be dated as of the date of its delivery to the Lender thereof, and shall mature on the Maturity Date, subject to prior mandatory amortization payments as to be provided in the 2020 Note and the 2020 Loan Agreement. The 2020 Note shall be payable to the Lender and shall bear interest at the applicable Interest Rate, calculated on the basis of a 30/360 day year. Interest will be paid semi-annually each March 1 and September 1 with the first interest payment due on September 1, 2020. Principal will be paid annually on March 1 each year, with the first principal payment payable on March 1, 2021. The Maturity Date shall be March 1, 2030; provided, however, that the 2020 Note and the 2020 Loan Agreement shall also provide for prepayments, including, but not limited to, the prepayment of the 2020 Note, without premium or penalty, with the proceeds of the Future Note. (B) Assuming the conditions contained in the Forward Delivery and Direct Purchase Agreement are satisfied, the Future Note is authorized to be issued as one (1) fully registered note in the aggregate principal amount not to exceed the then outstanding principal amount of the 2020 Note, to be dated as of the date of its delivery to the Lender thereof, and will mature on the Maturity Date, subject to prior mandatory amortization payments as to be provided in the Future Note and the Future Loan Agreement. The Future Note shall be payable to the Lender and shall bear interest at the applicable Interest Rate, calculated on the basis of a 30/360 day year. Interest will be paid semi-annually each March 1 and September 1 with the first interest payment due on the first March 1 or September 1 immediately succeeding the issuance date of the Future Note. Principal will be paid annually on March 1 each year, with the first principal payment payable on the March 1 immediately succeeding the issuance date of the Future Note. The Maturity Date shall be March 1, 2030; provided, however, that the Future Note and the Future Loan Agreement shall also provide for prepayments. If any future determination of taxability under the IRS Code should occur regarding the tax-exempt status of interest on the Future Note, then any due but unpaid principal and interest on the Future Note shall automatically convert from tax-exempt to taxable and shall bear interest at the Taxable Interest Rate which shall be the original taxable interest rate fixed on the date of issuance of the 2020 Note, as provided in the Future Loan Agreement. Anything herein or in the Future Note to the contrary notwithstanding, in no event shall the interest rate (whether tax-exempt or taxable by automatic conversion) borne by the Future Note exceed the maximum interest rate permitted to be paid by the City under applicable law. (C) On the respective dates of the issuance of the Notes, the City shall receive an amount equal to the par amount of the Notes from the Lender as the purchase price of the Notes. The Notes shall be payable in any coin or currency of the United States of America which on the respective dates of payment of principal and interest thereof is legal tender for the payment of public and private debts. (D) The Notes may be exchanged at the office of the Note Registrar for a like aggregate principal amount of Note of the same series and maturity as provided in the Loan Agreements. Notwithstanding the foregoing or any provision of this Resolution to the contrary, transfer of the Notes is restricted as provided in the Loan Agreements. Section 7. Execution of Notes. The Notes shall be executed in the name of the City by the City Manager and the seal of the City shall be imprinted, reproduced, or lithographed on the Notes and attested to and countersigned by the City Clerk. In addition, the City Attorney shall sign the Notes and the Loan Agreements, showing approval of the form and correctness thereof, and the City's Director of Risk Management shall sign the Notes and the Loan Agreements, showing approval as to the City's insurance requirements. The signatures of the City Manager, the City Clerk, the Risk Management Director, and the City Attorney on the Notes may be by facsimile. If any officer whose signature appears on the Notes ceases to hold office before the delivery of the Notes, his or her signature shall nevertheless be valid and sufficient for all purposes. In addition, any Note may bear the signature of, or may be signed by, such persons as at the actual time of execution of such Note shall be the proper designated officers to sign such Note, although at the date of such Note or the date of delivery thereof such persons may not have been such officers. Any Note delivered shall be authenticated by the manual signature of the Finance Director and the registered owner of any Note so authenticated shall be entitled to the benefits of this Resolution. Section 8. Notes Mutilated, Destroyed, Stolen, or Lost. If the Notes are mutilated, destroyed, stolen, or lost, the City or its agent may, in its discretion, deliver duplicate replacement Notes or pay a Note that has matured, is about to mature, or has been called for prepayment. A mutilated Note shall be surrendered to and cancelled by the Note Registrar. The holder of any Note must furnish the City or its agent proof of ownership of any destroyed, stolen, or lost Note; post satisfactory indemnity; compliance with any reasonable conditions the City or its agent may prescribe; and payment of reasonable expenses of the City or its agent. Any such duplicate Note shall constitute an original contractual obligation on the part of the City whether or not the destroyed, stolen, or lost Note be at any time found by anyone and such duplicate Note shall be entitled to equal and proportionate benefits and rights as to lien on, and source of payment of and security for payment from, the funds pledged to the payment of the Note so mutilated, destroyed, stolen, or lost. Section 9. Form of Notes. The 2020 Note shall be in substantially the form attached as Exhibit "A" to the 2020 Loan Agreement and the Future Note shall be in substantially the form attached as Exhibit "A" to the Future Loan Agreement, each with only such omissions, insertions, and variations as may be necessary and desirable and permitted by this Resolution or by any subsequent ordinance or resolution adopted prior to the issuance thereof. Section 10. Covenants of the City. To the extent permitted by and in accordance with applicable laws and budgetary processes, the City covenants and agrees to budget and appropriate in its annual budget, by amendment, if necessary, from Non -Ad Valorem Revenues lawfully available in each Fiscal Year, amounts sufficient to satisfy the Payments for such Fiscal Year and any Rebate Amount due with respect to the Future Note during such Fiscal Year as provided in Section 11 hereof. Such covenants and agreements on the part of the City to budget and appropriate such legally available amounts as stated above shall be cumulative to the extent not paid and shall continue until such legally available funds in amounts sufficient to make all such required Payments shall have been budgeted, appropriated, and actually paid. Notwithstanding the foregoing covenants of the City, the City does not covenant to maintain any services or programs, now provided or maintained by the City, which generate Non -Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien upon or pledge of such Non -Ad Valorem Revenues, nor, except as provided below, does it preclude the City from pledging in the future its Non -Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non -Ad Valorem Revenues, nor does it give the Lender a prior claim on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the City. Such covenant to budget and appropriate Non -Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non -Ad Valorem Revenues heretofore or hereinafter entered into (including the payment of debt service on other bonds and other debt instruments of the City). However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein shall have the effect of making available for the payment of the Payments, in the manner described herein, Non -Ad Valorem Revenues and to the extent permitted by applicable law placing on the City a positive duty to budget and appropriate, by amendment if necessary, amounts sufficient to meet its obligations hereunder; subject, however, in all respects to the restrictions of Section 166.241(2), Florida Statutes, which provides, in part, that the governing body of each municipality make appropriations for each Fiscal Year which, in any one year, shall not exceed the amount to be received from taxation or other revenue sources; and subject further to the payment of services and programs which are for essential public purposes affecting the health, welfare, and safety of the inhabitants of the City or which are legally mandated by applicable law. Section 11. Tax Covenants Relating to the Future Note. The City covenants and agrees to comply with the requirements applicable to it contained in the IRS Code to the extent necessary to preserve the exclusion of interest on the Future Note from gross income for federal income tax purposes. Specifically, without intending to limit in any way the generality of the foregoing, the City covenants and agrees: (A) To pay to the United States of America, at the times required pursuant to Section 148(f) of the IRS Code, any rebate amount ("Rebate Amount") determined pursuant to Section 148(f) of the Code; (B) To maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the IRS Code; (C) To refrain from using proceeds from the Future Note in a manner that would cause the Future Note to be classified as a private activity bond under Section 141(a) of the IRS Code; and (D) To refrain from taking any action that would cause the Future Note, or any of them, to become arbitrage bonds under Section 148 of the IRS Code. Section 12. Security; Notes Not General Indebtedness. The Notes shall not be deemed to constitute a general obligation or a pledge of the faith and credit of the City, the State, or any other political subdivision thereof within the meaning of any constitutional, legislative, or charter provision or limitation, but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Funds in the manner and to the extent herein provided. No holder of the Notes shall ever have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the City, the State, or any other political subdivision of the State or taxation in any form on any real or personal property to pay the Notes or the interest thereon, nor shall any holder of the Notes be entitled to payment of such principal of and interest from any other funds of the City other than the proceeds of the Pledged Funds, all in the manner and to the extent herein provided. The Notes and the indebtedness evidenced thereby shall not constitute a lien upon any real or personal property of the City, but shall constitute a lien only on the proceeds of the Pledged Funds, all in the manner and to the extent provided herein. Section 13. Sale of 2020 Note to Refund and to Redeem the Bonds to be Refunded. The 2020 Note is hereby sold and awarded to the Lender, at the purchase price equal to the par amount thereof and the City Manager, the City Clerk, Risk Management Director, and the City Attorney are hereby authorized' (A) to execute and deliver the 2020 Note in the form set forth herein, and in the 2020 Loan Agreement, all as acceptable to the City Attorney and Bond Counsel, (B) to receive the purchase price therefor and apply the proceeds thereof to pay costs of issuance of the 2020 Note, and (C) to redeem, defease, and to refund the Bonds to be Refunded and to pay costs of redemption, defeasance, and refunding thereof, as herein provided, without further authority from this body. The City Manager and the City Clerk are authorized' to make any and all changes on the form of the 2020 Note, in a form acceptable to the City Attorney and Bond Counsel, which shall be necessary to conform the same to the Proposal of the Lender and the City's debt management policy. Execution of the 2020 Note by the City Manager, the City Clerk, the Risk Management Director, and the City Attorney shall be conclusive evidence of their approvals of the form of the 2020 Note. Section 14. Forward Delivery and Direct Purchase of Future Note. The sale and award of the Future Note is hereby authorized' on the terms and subject to the conditions set forth in the Forward Delivery and Direct Purchase Agreement. The purchase price for the Future Note shall be equal to the par amount thereof and the City Manager is hereby authorized' to negotiate, execute, and deliver the Forward Delivery and Direct Purchase Agreement, in a form acceptable to the City Attorney and Bond Counsel, and the City Clerk, Risk Management Director, and City Attorney are also authorized' to execute the same . At such time as when the Future Note will be issued, the City Manager hereby is also authorized' to negotiate, execute, and deliver, in a form acceptable to the City Attorney and Bond Counsel, and the City Clerk, Risk Management Director, and City Attorney are also authorized' to execute the Future Note in the form set forth herein and in the Future Loan Agreement, receive the purchase price therefor, apply the proceeds thereof to prepay the 2020 Note as herein provided, and to pay all costs of issuance thereof, without further authority from this body. The City Manager and the City Clerk are authorized' to make any and all changes, in a form acceptable to the City Attorney and Bond Counsel, on the Forward Delivery and Direct Purchase Agreement, the forms of the Future Note and Future Loan Agreement which shall be necessary to conform the same to the Proposal of the Lender and the City's debt management policy. Execution of the Future Note by the City Manager, the City Clerk, the Risk Management Director, and the City Attorney shall be conclusive evidence of their approvals of the form of the Future Note. Section 15. Amendments and Supplements to this Resolution. This Resolution shall be further amended and supplemented as necessary in order to accomplish the issuance of the Notes or as necessary in connection with the purposes for which the Notes are being issued or as necessary in connection with the redemption and refunding, defeasance, and redemption of the Bonds to be Refunded or the prepayment of the 2020 Note, or as necessary in connection with the City's debt management policy. Section 16. Severability. If any one or more of the covenants, agreements, or provisions of this Resolution should be held contrary to any express provision of law or contrary to any express provision 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 severed from the remaining covenants, agreements, and provisions of this Resolution, or of the Notes issued hereunder, or regarding the refunding, defeasance, and redemption of the Bonds to be Refunded or the prepayment of the 2020 Note. Section 17. Controlling Law; Members, Officials, Agents, Representatives and Employees of City Not Liable. All covenants, stipulations, obligations, and agreements of the City contained in this Resolution shall be deemed to be covenants, stipulations, obligations, and agreements of the City to the full extent authorized by the Act, the City Charter, the City Code, and provided by the Constitution and laws of the State. No covenant, stipulation, obligation, or agreement contained herein shall be deemed to be a covenant, stipulation, obligation, or agreement of any present or future member, official, agent, representative, or employee of the City in his or her individual capacity and neither the members of the City Commission, the Mayor, the City Clerk, City Attorney, City Manager, Risk Management Director, nor any other official executing the Notes shall be liable personally on the Notes or this Resolution or shall be subject to any personal liability or accountability by reason of the issuance or the execution by the City, or such respective members, officials, agents, representatives, or employees thereof, or by reason of the refunding, defeasance, and redemption of the Bonds to be Refunded or the prepayment of the 2020 Note. Section 18. Further Authorizations Regarding the Issuance of the Notes and the Refunding, Defeasance, and Redemption of the Bonds to be Refunded and the Prepayment of the 2020 Note; Delegation of Authority to Select Escrow Agent and Verification Agent. The City Manager, the City Clerk, the City Attorney, Bond Counsel, the City's Financial Advisor, and such other officers, employees, agents, and representatives of the City as may be designated by the Mayor, the City Commission, the City Attorney, and the City Manager, including any Note Registrar, Escrow Agent, or Paying Agent, or any of them, are each designated as respective applicable agents of the City, as necessary, in connection with the sale, issuance, and delivery of the Note, the notices, calls for redemptions or prepayment, redemptions, or prepayments, the refunding of the Bonds to be Refunded and the prepayment of the 2020 Note, and are authorized' and empowered, collectively or individually, to take all action and steps and to execute the Notes, all notices, instruments, agreements, certificates, documents, and contracts on behalf of the City, and as and if necessary, including the execution of documentation required in connection with the sale of the Notes to the Lender, and the refunding, defeasance, and redemption of the Bonds to be Refunded and the prepayment of the 2020 Note, that are necessary or desirable in connection therewith, and which are specifically authorized or are not inconsistent with the terms and provisions of this Resolution, the Proposal, or any action relating to the Notes or the Bonds to be Refunded, heretofore taken by the City and/or by the City's Financial Advisor, Bond Counsel, City Manager, City Attorney, or other necessary City officials, employees, representatives, and agents, including any Note Registrar, Escrow Agent, or Paying Agent for the Bonds to be Refunded. Such officials, employees, agents, representatives, and those so designated are hereby charged' with the responsibility for the issuance of the Notes, the refunding, defeasance, and redemption of the Bonds to be Refunded and the prepayment of the 2020 Note, on behalf of the City and with any related and required responsibilities of the City, its agents, representatives, employees, or officials, including its Financial Advisor and Bond Counsel and any Note Registrar, Escrow Agent, or Paying Agent. Any and all costs incurred in connection with the issuance of the Notes, refunding, defeasance, and redemption of the Bonds to be Refunded and the prepayment of the 2020 Note are hereby authorized' to be paid from the proceeds of the Notes, as applicable, and from any other City funds that have previously been designated by the City for such payments. The City Manager and all other necessary City officials, employees, agents, and representatives are hereby further authorized' to use all remaining proceeds and interest thereon, if any, from the Bonds to be Refunded (and the debt refunded by the Bonds to be Refunded) to make a deposit under the Escrow Deposit Agreement or to be used to pay the cost of the refunding of the Bonds to be Refunded. The City Manager and all other necessary City officials, employees, agents, and representatives are hereby further authorized' to use all remaining proceeds and interest thereon, if any, from the 2020 Note to pay interest on the 2020 Note, the Future Note, or to be used to pay the cost of the refunding of the Bonds to be Refunded. The City Manager is hereby delegated the authority' to select a bank or other financial institution to serve as Escrow Agent with respect to the Bonds to be Refunded and a verification agent based upon proposals received and reviewed by the City's Financial Advisor. Section 19. Ratifications, Approvals, and Confirmations. Certain necessary actions by the City Manager and the designated Departments in order to update the relevant financial controls, project close-outs, accounting entries, and computer systems in connection with ongoing compliance for the outstanding Series 2012 Bonds, the Authorizing Resolution for the Series 2012 Bonds, and the Tax Compliance Certificate for the Series 2012 Bonds for continuing compliance are hereby ratified, approved, and confirmed. Section 20. Repeal of Inconsistent Resolutions. All resolutions or parts thereof in conflict herewith are to the extent of such conflict superseded and repealed. Section 21. Effective Date. This Resolution shall be effective immediately upon its adoption and signature by the Mayor.2 APPROVED AS TO FORM AND CORRECTNESS Barnaby L. Min, Deputy City Attorney 6/2912020 2 If the Mayor does not sign this Resolution, it shall become effective at the end of ten (10) calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission.