Item No: 5F.
Meeting Date: May 28, 2013
From: William Spinelli, Finance Director
Subject: Resolution accepting STI Institutional & Government, Inc., proposal to purchase the City’s not to exceed $9,000,000 Electric System Refunding Note, Series 2013, to refund the City’s Electric System Revenue Note, Series 2010.
Staff recommends approval of City Resolution accepting the proposal of STI Institutional & Government, Inc., to purchase the City’s not to exceed $9,000,000 Electric System Refunding Note.
On April 22, 2013, the City Commission approved the rate lock agreement and term sheet for the loan agreement between STI Institutional & Government, Inc. and the City of Leesburg. This resolution will finalize the $9,000,000 Electric System Refunding Note, Series 2013.
1. The City Recommends approving this resolution in order to bring the City’s Electric Utility System average annual debt service from approximately $1,011,000 to approximately $630,000 per year.
2. Such alternative action as the Commission may deem appropriate
This loan agreement will bring the City’s Electric Utility System average annual debt service from approximately $1,011,000 to approximately $630,000 per year.
Prepared by: ______________________
Attachments: Yes____ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept.BLM, ____________
Deputy C.M. ___________________
City Manager ___________________
Account No. _041-1088-517-7124 &
Project No. ___________________
WF No. ______________________
RESOLUTION NO. __________
A RESOLUTION OF THE CITY OF LEESBURG, FLORIDA ACCEPTING THE PROPOSAL OF STI INSTITUTIONAL & GOVERNMENT, INC. TO PURCHASE THE CITY’S NOT TO EXCEED $9,000,000 ELECTRIC SYSTEM REFUNDING REVENUE NOTE, SERIES 2013 TO REFUND ALL OF THE CITY’S OUTSTANDING ELECTRIC SYSTEM REVENUE NOTE, SERIES 2010; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT WITH SAID PURCHASER TO SECURE THE REPAYMENT OF SAID NOTE; PROVIDING FOR THE PAYMENT OF SUCH NOTE FROM THE NET ELECTRIC REVENUES ON PARITY WITH CERTAIN EXISTING CITY ELECTRIC SYSTEM DEBT, ALL AS PROVIDED IN THE LOAN AGREEMENT; AUTHORIZING THE PROPER OFFICIALS OF THE CITY TO DO ANY OTHER ADDITIONAL THINGS DEEMED NECESSARY OR ADVISABLE IN CONNECTION WITH THE EXECUTION OF THE LOAN AGREEMENT, THE NOTE, AND THE SECURITY THEREFOR; AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS IN CONNECTION WITH SAID LOAN; PROVIDING FOR SEVERABILITY AND OTHER MATTERS IN REGARD THERETO; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AS FOLLOWS:
AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the provisions of Chapter 166, Florida Statutes, the Florida Constitution, and other applicable provisions of law including City of Leesburg, Florida (the "City") Resolution No. 7141 as amended and supplemented (the "Original Instrument"). Capitalized terms not defined herein shall have the meaning ascribed to them in the Original Instrument.
FINDINGS. It is hereby ascertained, determined and declared:
The City deems it necessary, desirable and in the best interests of the City that the City refund all of the City’s Outstanding Electric System Revenue Note, Series 2010 (the “Refunded Note”), all as more particularly described in the Loan Agreement (as defined herein).
Pursuant to Section 2(b), Article VIII of the State Constitution, and Section 166.021, Florida Statutes, municipalities have the governmental, corporate and proprietary powers to enable them to conduct municipal government, perform municipal functions, and render municipal services, and may exercise any power for municipal purposes, except when expressly prohibited by law. The issuance by the City of its Electric System Refunding Revenue Note, Series 2013 (the “2013 Note”) in a principal amount not to exceed $9,000,000 and the execution and delivery of the Loan Agreement for the purposes of refunding the Refunded Note is not prohibited by law.
Based on the present volatility of the market for municipal debt, and in consultation with its Financial Advisor, Larson Consulting Services, LLC, it has been determined it is in the best interest of the City to issue the 2013 Note pursuant to the Loan Agreement by negotiated sale, allowing the City to issue the 2013 Note at the most advantageous time allowing the City to obtain the best interest rate and other terms for the 2013 Note, and accordingly, the City Commission of the City hereby finds and determines that it is in the best financial interest of the City that a negotiated sale of the 2013 Note to STI Institutional & Government, Inc. (“STING”) be authorized.
AUTHORIZATION OF REFUNDING OF REFUNDED NOTE. The City hereby authorizes the refunding of the Refunded Note as more particularly described in the Loan Agreement.
ACCEPTANCE OF COMMITMENT LETTER WITH BANK. Based on a recommendation from the City’s Financial Advisor and in consultation with the City staff, the City hereby accepts the commitment letter of STING dated April 13, 2013 attached hereto to provide the City with the Loan.
APPROVAL OF FORM OF AND AUTHORIZATION OF LOAN AGREEMENT AND EXECUTION OF LOAN AGREEMENT AND 2013 NOTE. The repayment of the loan as evidenced by the 2013 Note shall be pursuant to the terms and provisions of the Loan Agreement and the 2013 Note. The City hereby approves the Loan Agreement by and between the City and STING in substantially the form attached hereto as Exhibit A (the “Loan Agreement”) and authorizes the Mayor or the Mayor Pro-Tem of the City (collectively, the “Mayor”) and the City Clerk or any deputy or assistant City Clerk of the City (collectively, the “City Clerk”) to execute and deliver on behalf of the City the Loan Agreement and the 2013 Note in substantially the form attached to the Loan Agreement, with such changes, insertions and additions as they may approve, their execution thereof being evidence of such approval.
PAYMENT OF DEBT SERVICE ON 2013 NOTE. Pursuant to the Loan Agreement, the 2013 Note will be secured by the Net Revenues of the City’s Electric System on parity with certain existing City Electric System debt, all as more particularly described in the Loan Agreement.
AUTHORIZATION OF OTHER DOCUMENTS TO EFFECT TRANSACTION. To the extent that other documents including but not limited to redemption notices, certificates, escrow deposit agreements, opinions, or other items are needed to effect any of the transactions referenced in this Resolution, the Loan Agreement, the 2013 Note, and the security therefore, the Mayor, the Mayor Pro-Tem, the City Clerk, the City Manager, the Finance Director, the City Attorney, the City Financial Advisor and Bond Counsel are hereby authorized to execute and deliver such documents, certificates, opinions, or other items and to take such other actions as are necessary for the full, punctual, and complete performance of the covenants, agreements, provisions, and other terms as are contained herein and in the documents included herein by reference.
PAYING AGENT AND REGISTRAR. The City hereby accepts the duties to serve as registrar and paying agent for the 2013 Note.
LIMITED OBLIGATION. The obligation of the City to repay amounts under the Loan Agreement and the 2013 Note are limited and special obligations, payable solely from the sources and in the manner set forth in the Loan Agreement and shall not be deemed a pledge of the faith and credit or taxing power of the City.
REPEAL OF INCONSISTENT RESOLUTIONS AND ACTIONS. All Resolutions or actions of the City in conflict herewith are hereby superseded and repealed to the extent of such conflict.
EFFECT OF PARTIAL INVALIDITY. If any one or more provisions of this Resolution, the Loan Agreement, or the 2013 Note shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Resolution, the 2013 Note or the Loan Agreement, but this Resolution, the Loan Agreement, and the 2013 Note shall be construed and enforced as if such illegal or invalid provision had not been contained therein. The 2013 Note and Loan Agreement shall be issued and this Resolution is adopted with the intent that the laws of the State of Florida shall govern their construction.
REPEAL OF INCONSISTENT RESOLUTIONS AND ACTIONS. All Resolutions or acts of the City Council in conflict herewith are hereby superseded and repealed to the extent of such conflict.
EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption.
[Signatures on Following Page]
PASSED, APPROVED AND ADOPTED this 28th day of May, 2013.
CITY OF LEESBURG, FLORIDA
Approved as to form and correctness: