O91-83 ORDINANCE 091-~
AN ORDINANCE OF THE CITY COMMISSION OF
THE CITY OF BOYNTON BEACH, FLORIDA,
CREATING A NEW ARTICLE XVIII, OF
APPENDIX C OF THE CODE OF ORDINANCES OF
THE CITY OF BOYNTON BEACH, FLORIDA, TO
BE ENTITLED "POLICY FOR ACCEPTING
LETTERS OF CREDIT", AND RENUMBERING THE
EXISTING ARTICLE XVIII, ENTITLED "LEGAL
STATUS"; PROVIDING FOR CONFLICTS,
SEVERABILITY, AND PROVIDING AN EFFECTIVE
DATE.
W~EREAS, Section 7, Article VIII of Appendix C of the
Code of Ordinances of the City of Boynton Beach, Florida,
requires developers to post a performance bond, as set forth
in that section, or such other form of security as is
acceptable to the City Commission; and
WMEREAM, the City Commission of the City of Boynton
Beach, Florida, desires to hereby establish a policy which
delineates specific criteria and prerequisites for accepting
letters of credit by the city in conjunction with developer
agreements, contracts and any other contractual obligations;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION
OF THE CITY OF BOYNTON BEACH, FLORIDA, THAT:
Section 1. The foregoing "WHEREAS" clauses are
hereby ratified and confirmed as being true and correct and
:are hereby made a specific part of this Ordinance.
Section 2. Article XVIII of Appendix C of the Code
of Ordinances of the City of Boynton Beach, Florida,
entitled "Legal Status" is hereby renumbered as Article XIX
of Appendix C of the Code of Ordinances of the City of
Boynton Beach, Florida. Ail provisions and terms of said
section remain unchanged.
Section 3. A new Article XVIII of Appendix C of the
Code of Ordinances of the City of Boynton Beach, Florida,
entitled "Policy for accepting Letters of Credit" is hereby
CODING:
Words in struck-~hrough type are deletion
from existing law; Words in underscore are
additions.
created to read as follows:
APPENDIX C
SUBDIVISION AND PLATTING REGULATIONS
***
ARTICLE XVIII. POLICY FOR ACCEPTING
LETTERS OF CREDIT
A. This policy delineates
specific criteria and prerequisites for
accepting letters of credit by the City
in con~unction with developer
agreements, contracts, development
related improvements, and any other
contractual obligations.
1. The face of the Letter of
Credi~-must indicate the following:
a. The Letter of Credit is "clean"
and "irrevocable".
b. A statement that the Letter of
Credit shall remain enforceable until
released by a Resolution adopted by the
City Commission.
c. Statement of the purpose or
project for which the Letter of Credit
ls issued.
d. A specific amount of the Letter
of Credit, in U.S. Dollars.
e. The method of disbursement of
draws against the Letter of Credit.
f. The street address where draws
against the Letter of Credit may be
made.
g.
A statement that the Letter of
Credit is enforceable in a court of
competent Jurisdiction in Palm Beach
County, Florida and is to be interpreted
by Florida Law.
h. The name and street address of
a designated agent for acceptance of
process within the State of Florida.
2. At the time of issuance of the
Letter of Credit, and at all times
subsequent thereto and so long as the
Letter of Credit is enforceable, the
issuing financial institution must have
a minimum "peer group" rating of 50 in
the latest Sheshunoff quarterly Listing
or a minimum rating of 125 in the latest
IDC Bank Financial Quarterly Listing.
The City Finance Department shall be
responsible for periodically verifying
this inforauation.
3__. At any time during the life of
the Letter of Credit, should the rating
CODING:
Words in struck-through type are deletion
from existing law; Words in underscore are
additions.
CODING:
of the financial institution fall below
both of the minimum ratings as indicated
in Section 2 above, or should the
financial institution merge with another
financial institution or have a
conservator or receiver appointed to
supervise or control the operation of
its business or become insolvent, the
contractor/developer must, within sixty
(60) calendar days after notification by
the City:
a)
replace the existing Letter of
Credit with a replacement
Letter of Credit from a
financial institution with
either of the minimum ratings
as specified in Item 2 above;
or
b)
at the City's option, the
Letter of Credit may be
replaced by a
performance/payment bond or
other surety acceptable to the
City (ex., cash bond or escrow
agreement) in accordance with
the City's existing bond
policies.
4. Failure to comply with this
provision may result in any or all of
the following actions by the City:
suspension of the contractor/developer's
right to pull building permits and
schedule inspections, a stop work order,
and/or revocation of the Land
Development Permit. These actions shall
be in effect until a satisfactory
replacement bond or Letter of Credit is
accepted by the City.
5. No Letter of Credit shall be
deemed accepted by the City until
accepted by motion or resolution of the
City Commission following review by the
City Attorney's Office for legal
sufficiency.
6. Original Letters of Credit
shall be maintained by the City Clerk
and shall be clearly identified as to
the project or contract for which it is
issued. One copy of the Letter of
Credit shall be maintained in the
Finance Department's contract file. The
Finance Department will maintain a
computerized listing of financial
institutions from which Letters of
Credit have been received, review the
listing at least twice annually, and
notify the City Manager and the City
Attorney if any Letters of Credit
require replacement in accordance with
Item 5 above.
7. Existing Letters of Credit
accepted prior to approval of this
Words in struck-through type are deletion
from existing law; Words in underscore are
additions.
policy shall continue through the
current expiration date of the Letter of
Credit provided however, renewal of
these existing letters of credit shall
be in accordance with this Policy for
Accepting Letters of Credit.
8. The financial institution
lssuin-~ any Letter of Credit must be
authorized to do business in the State
of Florida and shall show proof of same
upon request of City staff.
Section 4. That all ordinances or parts of ordinances
in conflict herewith be and the same are hereby repealed.
Section 5. Should any section or provision of this
ordinance or portion hereof, any paragraph, sentence, or
word be declared by a court of competent jurisdiction to be
invalid, such decision shall not affect the remainder of
this ordinance.
Section 6. This ordinance shall become effective
immediately upon passage.
FIRST READING this ~
day of
1991.
SECOND,
FINAL READING and PASSAGE this
, 1991.
day of
ATTEST
CITY OF BOYNTON BEACH, FLORIDA
M~yor
Co~issioner
(corporate Seal)
CODING:
Words in struck-through type are deletion
from existing law; Words in underscore are
additions.