R01-193RESOLUTION NO. R 01- Iq:~
A SERIES RESOLUTION PROVIDING FOR THE ISSUANCE
OF NOT EXCEEDING $27.000,000 AGGREGATE PRINCIPAL
AMOUNT OF UTILITY SYSTEM REVENUE REFUNDING
BONDS, SERIES 2002; PROVIDING A METHOD FOR FIXING
AND DETERMINING THE PRINCIPAL AMOUNT. INTEREST
RATES. MATURITY DATES. REDEMPTION PROVISIONS
AND OTHER DETAILS OF SAID BONDS: AUTHORIZING
THE MAYOR TO AWARD THE SALE OF THE BONDS TO
BANC OF AMERICA SECURItiES LLC; FINDING NECESSITY
FOR:~J~ NEGOTIATED SALE OF sUcH BONDS;~ PROVIDING
A METHOD FOR APPROVING THE FORM OF AND
AUTHORIZING THE USE OF A PRELIMINARY OFFICIAL
STATEMENT AND AUTHORIZING THE PREPARATION,
APPROVAL AND EXECUTION OF A FINAL OFFICIAL
STATEMENT IN CONNECTION WITH SUCH BONDS:
AUTHORIZING THE EXECUTION OF A FORWARD
DELIVERY BOND PURCHASE CONTRACT AND A, BOND
REGISTRAR AGREEMENT; AUTHORIZING THE
REDEMPTION OF THE CITY'S UTILITY SYSTEM REVENUE
BONDS, SERIES 1992; .PROVIDING A METHOD ~FOR
APPROVING THE FORM OF AND AUTHORI'ZING THE
EXECUTION OF AN ESCROW DEPOSIT AGREEMENT;
PROVIDING FOR CERT ~AIN CONTINUING DISCLOSURE
OBLIGATIONS OF THE CITY: Pi~OVIDING FOR THE
Pd>PLICATtON OF THE PROCEEDS OF SAID BONDS AND
CERTAIN O.THER MONE¥S~ AUTHORIZING THE PURCHASE
OF A BOND INSURANCE POLICY AND MAKING' CERTAIN
COVENANTS IN CONNEGIION THEREWITH; DESIGNATING
THE BOND REGISTRAR ~OR SAID BONDS; CONTAIN/NG
CEP~TAIN AUTHORIZATIONS AND OTHER PROVISIONS;
MD PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Boynron Beach, Florida (the "City") is authorized by the
Constitution and laws of the State of Florida, including the City's Charter and Chapter 166,
Florida Statutes, to issue revenue bonds of the City payable from Pledged Revenues (as defined
in the Bond Resolution hereinafter mentioned) for certain purposes; and
WHEREAS, pursuant to Resolution No. R 92-96 adopted by the City Commission of the
City (~e "City Commission") on June 16, 1992, as amended (the "Bond Resolution") obligations
of the City may be issued and may be secured by a lien upon and pledge of certain "Pledged
Revenues" as defined in and to the extent set forth in the Bond Resolution; and
WHEREAS. the City desires to issue Bonds (the "Series 2002 Bonds") under the Bond
Resolution to provide funds to pay the cost of various capital expenditures of the City, ro provide
for the refunding and defeasance of the City Utility System Revenue Bonds, Series 2002, maturing
on and after November t, 2002 (the "Refunded Bonds") and to pay certain costs of issuing such
Series 2002 Bonds: and
WHEREAS, prior to the issuance of the Series 2002 Bonds the conditions set forth in
Section 209 of the Bond Resolution shall be satisfied; and
WHEREAS, the City Commission has determined that the sale of such Series 2002 Bonds
through negotiation with the Original Purchaser (hereinafter defined) is in the best interest of the
City; and
WHEREAS. the City Commi~ion has received from Bane of America Securities LLC (the
"Original PurChaser") a form of a Forward Delivery. Bond Purchase Contract by and between the
City and the Original Purchaser whereby the Original Purchaser would agree m purchase the
Series 2002 Bonds, and the City Commission has determined that the authorization of the
acceptance of such proposal pursuant to the terms set forth in Section 6 hereof is in the best
interests of the City and will effect the purposes set forth in the Bond Resolution; and
WHEREAS, it is necessary and desirable to approve the form and use of a Preliminary
Official Statement and to approve the preparation and execution 'ofa Final Official Statement in
connection with the issuance of such Series 2002 Bonds; and
WHEREAS, it is necessary and desirable to specify a method for determining the dates.
the interest rates, maturity dates, and redemption provisions for such Series 2002 Bonds and to
appoint The Bank of New York as Bond Registrar for such Series 2002 Bonds; and
WHEREAS, the City has received a commitment from Financial Guaranty Insurance
Company. to issue its municipal bond insurance policy insuring the payment of the principal of and
interest on the Series 2002 Bonds and it is necessary and desirable to accept such commitment: and
WHEREAS, the Bond Resolution permits the City.m reftmd and defease the lien of Bonds
issued thereunder by setting funds aside in an escrow fun&to pay 'the principal of. interest on, and
redemption premium, if any, on such Bonds as the same shall become due, and the City desires
to refund and defease the lien of the Utility System Revenue Bonds. Series 1992 maturing on and
after November 1, 2002 (the "Refunded Bonds") as shall be further set forth in the Escrow Deposit
Agreement (hereinafter de£med); and
WHEREAS. the City desires m approve the form and use of an escrow deposit agreement
to provide for payment of the Reftmded Bonds.
NOW, THEREFORE, BE IT RESOLVED BY ~ CITY COMMISSION OF THE CITY
OF BOYNTON BEACH, FLORIDA:
Section 1. Authority for this Resolution. This Resolution is adopted pursuant to the
provisions of the Charter of the City of Boynton Beach, Florida, the Constitution of the State of
Florida, including, but nor limited to. Article VIII, Section 2 thereof, and other applicable
provisions of law, including Chapter 166, Florida Statutes. and the Bond Resolution.
Section 2. Def'mitions. Terms used herein in capitalized form and not otherwise defined
herein shall have the meanings ascribed thereto in the Bond Resolution. The following terms,
when used in this Resolution or in the Bond Resolution. as amended hereby, shall have the
following meanings:
"Business Day" shall mean any day other than a Saturday, Sunday or other day on which
the Bond Registrar is lawfully and temporarily closed or a day on which the New York Stock
Exchange is lawfully and temporarily closed.
"Closing Date'' shall mean the date on which the Series 2002 Bonds axe issued and
delivered by the City and paid for by the Original Purchaser.
"Interest Payment Date" shall mean May 1 and November 1 of each year, commencing
November 1. 2002.
"Project" means various capital expenditures of the City as authorized by the City
Commission from time'to time, 'including reimbursement to the City of such expendimres~incurred
on and after May 9, 2001.
Section 3 Authorization of Bonds. Bonds are hereby authorized to be issued pursuant to
this Resolution and Section 209 of the Bond Resolution in the aggregate principal amount of not
to exceed $27,000,000. The Bonds hereby authorized shall be known as "Utility System Revenue
Refunding Bonds. Series 2002" (the "Series 2002 Bonds"). Prior to the issuance of the Series
2002 Bonds the conditions of Section 209 of the Bond Resolution shall be satisfied. The Series
2002 Bonds are being issued to provide funds to pay the Cost of the Project. to refund and defease
the Refunded Bonds and to pay costs of issuing the Series 2002 Bonds.
Section 4. Terms of the Series 2002 Bonds.
(a) Form of Bonds. The Series 2002 Bonds shall be substantially in the form of the
Bonds set forth in the Bond Resolution, with such changes as may be necessary or appropriate m
conform to the provisions of this Resolution and the terms of the Series 2002 Bonds set forth
herein as may be approved by the officers of the City executing the Series 2002 Bonds, such
execution to be conclusive evidence of such approval.
(b) Amounts, Maturities. Redemption Provisions and Interest Rates. The Series 2002
Bonds will consist of such aggregate principal amount of Current Interest Serial Bonds and such
aggregate principal amount of Current Interest Term Bonds as shall be determined by the Mayor
as hereinafter provided.
The Series 2002 Bonds shall be issued in the denomination of $5,000 and integral multiples
thereof, shall be issued in registered form, shall be numbered from R-1 upwards, shall be dated
their date of initial issuance and delivery, which shall be August 6. 2002. unless another date shall
be agreed upon by the Mayor and the Original Purchaser. and shall bear interest from such date,
payable semi-annually on the first day of May and November of each year. commencing
November I, 2002. The Series 2002 Bonds shall be issued in the aggregate principal amount, not
in excess of $27,000,000, shall bear interest at the rates per annum computed on the basis of a
360-day year consisting of twelve 30-day months, and shall mature on November 1 of the years
and shall have such redemption provisions, all as set forth in a certificate executed by the Mayor
at or before the issuance of the Series 2002 Bonds, provided however that the arbitrage yield on
the Series 2002 Bonds shall not exceed 6.00 percent per annum and the final maturity of the Series
2002 Bonds shall not be after November 1, 2020.
Principal of the Series 2002 Bonds shall be payable only upon presentation and surrender
of such Bonds at the principal office of the Bond Registrar. Interest on the Series 2002 Bonds
shall be paid by check or draft, or at the Option of any registered owner of not less than
$1,000~000 in principal mount of the Series 2002 Bonds,t~exercised in writing delivered to the
Bond Registrar prior to the Regular Record Date or Special Record Date, by wire transfer to an
account in the United States designated by such registered owner, mailed or wired by the Bond
Registrar to ~the registered owners of the Series 2002 Bonds as shown on the registration books
kept by the Bond Registrar on the Regular Record Date or the Special Record Date.
(c) Reserve Account Deposit Requirement. The Reserve Account Requirement for the
Series 2002 Bonds shall be an amount equal to the lesser of (i) 10% of the aggregate stated
principal amount of the Series 2002 Bonds Outstanding, (ii) the maXimum amount of principal and
interest scheduled to become due on the Outstanding Series 2002 Bonds in the currem or any
succeeding Bond Year. or (iii) 125 % of the average annual debt service on the Series 2002 Bonds
(calculated on a Bond Year basis at the time of issuance only). If the Series 2002 Bonds have
more than a de- minimis amount of original issue discount or premium (as defined in Treas: Reg.
§1.148-1(b)), then the issue price (as defined in,said regulationl of the Series 2002 Bonds (net of
pre-issuance accrued interest) shall be used to measure the aforesaid 10% limitation in lieu of the
stated principal amount of the Series 2002 Bonds. The Series 2002 Reserve Subaccount. which
is hereby ordered created, shall be funded in an mount equal to the Reserve Account Requirement
for the Series 2002 Bonds at the time of initial issuance and delivery of the Series 2002 Bonds, and
in the eveut any deficiency is created in the Series 2002 Reserve Suhaccount, the Reserve Account
Deposit Requirement for such Series shall be,i in each month, an amount equal to at least one
twenty-fourt~ (1/24) of the amount of such deficiency.
Section 5. Amendments to Bond Resolution. The amendments to the Bond Resolution set
forth in this Section 5 shall be effective upom and only upon the issuance of the Series 2002
Bonds.
(a) Section 101 of the Bond Resolution is amended by the addition thereto of two new
definitions as follows:
"2002 Bond Insurance Policy" shall mean the municipal bond new issue insurance
policy issued by the 2002 Bond Insurer that guarantees payment of principal of and interest
on the Series 2002 Bonds.
"2002 Bond Insurer" shall mean Financial Guaranty Insurance Company, a New
York stock insurance company, or any successor thereto.
(b) A new Section 718 is added to the Bond Resolution to provide as follows:
"Section 718. Provisions concerning 2002 Bond Insurer. For so long as the 2002 Bond
Insurance Policy shall be outstanding:
(a) in determining whether payment of the principal of and interest on the Bonds
shall have been timely made, no effect shall be given m payments made under the 2002
Bond Insurance Policy,
(b) the City and the Bond Registrar shall notify the 2002 Bond Insurer mediately
of any payment default on the Bonds, and the City shall notify the 2002 Bond Insurer of
any other default hereunder~ known to the City with'm th'my (30) days after the City
acquires Imowledge of such default,
(c) for all purposes of Article Vlff hereof governing events of default and remedies,
except the giving of notice of default to Bondholders, the 2002 Bond Insurer shall be
deemed to be the sole holder' Of the Series 2002 Bonds for so long as it has not failed to
comply with its payment obligations under the 2002 Bond Insurance Policy, and the 2002
Bond Insurer shall be entitled to notify the City of the occurrence of an event of default.
which notice the City shall be required to accept,
(d) in determining whether the rights of Bondholders are adversely affected by
actions taken pursuant to the terms and provisions hereof, no effect shall be given to
payments made under the 2002 Bond Insurance Policy,
(e) no amendment or supplement to the Resolution shall be effective without the
prior written consent of the 2002 Bond Insurer. and each rating agency maintaining a
rating on the Bonds shall be provided a copy of each proposed supplemental resolution at
least 15 days in advance of its adoption, and the 2002 Bond Insurer shall be provided with
a full transcript of all proceedings relating to the execution of any supplemental resolution.
(f) (i) If, at the close of business on the Business Day preceding any Interest
Payment Date for the Series 2002 Bonds. there is not on deposit with the Bond Registrar
sufficient monies available to pay all principal of and interest on the Series 2002 Bonds due
on such dare, the City and the Bond Registrar shall immediately notify the 2002 Bond
Insurer and State Street Bank and Trust Company, N.A., New York. New York or its
successor as its Fiscal Agent (the "Fiscal Agent") of the amount of such deficiency. If. by
said Interest Payment Date. the City has not provided the amount of such deficiency, the
5
Bond Registrar shall simultaneously make available to the 2002 Bond Insurer and to the
Fiscal Agent the registration books for the Series 2002 Bonds maintained by the Bond
Registrar.
In addition:
(A)
The Bond Registrar shall provide the 2002 Bond Insurer with a list of the
Bondholders entitled to receive principal or interest payments from the 2002
Bond Insurer under the terms of the 2002 Bond Insurance Policy and shall
make arrangements for the 2002 Bond Insurer and its Fiscal Agem (1) to
mail checks or drafts to Bondholders entitled to receive full or partial
interest payments from the 2002 Bond Insurer and (2) to pay principal of
the Bonds surrendere, d to the Fiscal Agent by the Bondholders entitled to
receive full;or partial principal payments from the 2002 Bond Insurer; and
O3)
The Bond Registrar shall, at the time it makes: the registration books
available to the 2002 Bond Insurer pursuant to (A) above, notify
Bondholders entitled to receive the payment of principal of or interest on
the Bonds from the 2002 Bond Insurer (1) as to the fact of such entitlement,
(2) that the 2002 Bond Insurer will remit to-them all or part of the interest
payments coming due subject to the terms of the 2002 Bond Insurance
Policy, (3) that, except as provided,in paragraph (ii) below, in the event that
any Bondholder is entitled te receive full payment of principal from the
2002 Bond Insurer, such Bondholder must tender his Series 2002 Bond with
the instrument of transfer in the form provided on the Series 2002 Bond
executed in the name of .the 2002 Bond Insurer, and (4) that, except as
provided in paragraph ~ii) below, in the event that such Bondholder is
entitled to receive partial payment of principal from the 2002 Bond Insurer.
such Bondholder must teader his Series 2002 Bond for payment first to the
Bond Registrar. which shall note on such Series 2002 Bond the portion of
principal paid by the BoF/d Registrar, and then, with an acceptable form of
assignment executed in the name of the 2002 Bond Insurer. to the Fiscal
Agent, which will then pay the unpaid portion of principal to the
Bondholder subject to the terms of the 2002 Bond Insurance Policy.
(ii) In the event that the Bond Registrar has notice that any payment of
principal of or interest on a Series 2002 Bond has been recovered from a Bondholder
pursuant to the United States Banlcmpt ~ey Code by a trustee in bankruptcy in accordance
with the final, nonappealable order of a court having competent jurisdiction, the Bond
Registrm' shall, at the time it provides notice to the 2002 Bond Insurer. notify all
Bondholders that in the event that any Bondholder's payment is so recovered, such
Bondholder will be entitled to payment from the 2002 Bond Insurer to the extent of such
recovery, and the Bond Registrar shall furnish to the 2002 Bond Insurer its records
evidencing the payments of principal of and interest on the Series 2002 Bonds which have
6
been made by the Bond Registrar and subsequently recovered from Bondholders, and the
dates on which such payments were made.
(iii) The 2002 Bond Insurer shall, to the extent it makes payment of
principal of or interest on the Series 2002 Bonds, become subrogated to the rights of the
recipients of such payments in accordance with the terms of the 2002 Bond Insurance
Policy and, to evidence such subrogation, (1) in the case of subrogation as to claims for
past due interest, the Bond Registrar shall note the 2002 Bond Insurer's rights as subrogee
on the registration books maintained by the Bond Registrar upon receipt from the 2002
Bond Insurer of proof of the payment of interest thereon to the Bondholders of such Bonds
and (2) in the case of subrogation as to claims for past due principal, the Bond Registrar
shall note the 2002 Bond ln~urer's rights as subrogee on the registration books for the
Series 2002 Bonds maintained by the Bond Registrar upon receipt of proof of the payment
of principal thereof to the Bondholders of such. Series 2002 Bonds. Notwithstanding
anything in this Resolution or the Series 2002 Bonds to the contrary, the Bond Registrar
shall make payment of such past due interest and past due principal directly to the 2002
Bond Insurer to the extent that the 2002 Bond Insurer is a subrogee with respect thereto."
(g) The notice addresses for the 2002 Bond Insurer and the Fiscal Agent shall.be
as follows:
115 Broadway
New York. New York, 10006
Attention: General Counsel
State Street Bank and Trust Company, N.A.
61 Broadway
New York, New York 10006
Attention: Corporate Trust Department
(h) The 2002 Bond Insurer shall be provided with the following information:
(i) Within 120 days after the end of each of the City's Fiscal Years, the
annual audited financial statements, a statement of the amount on deposit in the Reserve
Account as of the last valuation, a copy of the budget for the current Fiscal Year, and, if
not presented in the audited financial statements, a statement of the Net Revenues pledged
to payment of Bonds in such previous Fiscal Year;
(ii) a copy of the official statement or other disclosure, if any, prepared
in connection with the issuance of additional debt, whether or not it is on a parity with the
insured issue, within 30 days after the sale thereof:
(iii) a notice of any draw upon or deficiency due to market fluctuation
in the amount, if any, on deposit in the Reserve Account;
7
(iv) a notice of the redemption, other than mandatory sinking fund
redemption, of any of the Bonds. including the principal mount, maturities and CUSIP
numbers thereof;
(v) Simultaneously with the delivery of the annual audited financial
statements:
(A) The number of system users as of the end of the Fiscal Year;
(B) Notification of the withdrawal of any system user comprising 4 % or more
of system sales measured in terms of revenue dollars since the last reporting
date: and.
(C) Any significant plant retirements or expansions planned or undertaken since
the last report date; and
(vi) Such additional information as the 2002 Bond Insurer may
reasonably request from time to time.
(i) The following requirements shall be fulfilled to the satisfaction of the 2002 Bond
Insurer (including incorporation of relevant conditions herein) in the event the Reserve
Account Requirement is ftllfillert' by a deposit of credit instrument (other than a credit
instrument issued by the 2002 Bond Insurer) in lieu of cash:
A surety bond or insurance policy issued m the Bond Registrar (the
"Fiduciapj"), as agent of the Bondholders, by a company licensed to issue
an insurance policy guaranteeing the timely payment of debt service on the
Bonds (a "mtmicipal bond insurer") may be deposited in the Reserve
Accotmt to meet the Reserve Account Requirement if the claims paying
ability of the issuer thereof shall be rated "AAA" or "Aaa" by S&P or
Moody's, respectively.
A surety bond or insurance policy issued to the Fiduciary, as agent of the
Bondholders. by an entity other than a municipal bond insurer may be
deposited in the Reserve Account to meet the Reserve Account Reqniremen!
if the form and substance of such insmanent and the issuer thereof shall be
approved by the 2002 Bond Insurer.
An unconditional irrevocable letter of credit issued to the Fiduciary, as
agent of the Bondholders, by a bank may be deposited in the Reserve
Account to meet the Reserve Account Requirement if the issuer thereof is
rated at least "AA" by S&P. The letter of credit shall be payable in one or
more draws upon presentation by the ,, beneficlary of a sight draft
accompanied by its certificate that it then holds insufficient funds to make
a required payment of principal or interest on bonds. The draws shall be
payable within two days of presentation of the sight draft. The letter of
credit shall be for a term of not less than three years. The issuer of the
letter of credit shall be required to notify the Issuer and the Fiduciary, not
later than 30 months prior to the stated expiration date of the letter of
credit, as to whether such expkation date shall be extended, and if so. shall
indicate the new expiration date. If such notice indicates that the expiration
date shall not be extended, the City shall deposit inthe Reserve Account an
amount sufficient to cause the cash or Investment Obligations on deposit in
the Reserve Account together with any other qualifying crediI instruments,
to equal the Reserve Account Requirement on all outstanding Bonds. such
deposit to be paid in equal installments on at least a semi-annual basis, over
the remaining term of the letter of credit, unless the Reserve Account credit
instrument is replaced by a Reserve Account credit insmmmnt meeting the
requirements in either of clauses t or 2 above or this clause 3. The letter
of credit shall permit a draw in full not less than two weeks prior to the
expiration or termination of such letter of credit if~the letter of credit has
not been replaced or renewed. The Resolution shall direct the Fiduciary to
draw upon the letter of credit prior to its expiration or term/nation unless
an acceptable replacement is~ia place or the Reserve Account is fully funded
in its required amount.
The use of any Reserve'Account credit instrument pursuant to this clause
(i) shall be subject to receipt of an opinion of counsel acceptable to the 2002
Bond Insurer and in form and substance satisfactory ro the 2002 Bond
Insurer as to the due authorization, execution, delivery and enforceability
of such instrument in accordance with its terms, subject to applicable laws
affecting creditors' rights generally, and, in the event the issuer of such
credit immanent is not a domestic entity, an opinion of foreign counsel in
form and substance satisfactory to the 2002 Bond Insurer. In addition, the
use of an irrevocable letter of credit shall be subject to receipt of an opinion
of counsel acceptable to the 2002 Bond Insurer and in form and substance
satisfactory to the 2002 Bond Insurer to the effect that requirements under
such letter of credit would not constitute avoidable preferences under
Section 547 of the U.S. Banlcmptcy Code or similar state laws with
avoidable preference provisions in the event of the filing of a petition for
relief under the U.S. Banl~ptcy Code or similar state laws by or against
the issuer of the bonds (or any other account party under the letter or
credit).
The obligation to reimburse the issuer of a Reserve Account credit
mstrument for any fees, expenses, claims or draws upon such Reserve
Account credit instrument shall be subordinate to the payment of debt
service onthe bonds. The right of the issuer of a Reserve Account credit
instrument to payment or reimbursement of its fees and expenses shall be
subordinated to cash replenishment of the Reserve Account. and. subject to
the second succeeding sentence, its right to reimbursement for claims or
draws shall be on a parity with the cash replenishment of the Reserve
9
Account. The Reserve Account credit instrument shall provide for a
revolving feature under which the mount available thereunder will be
reinstated to the extent of any reimbursement of draws or claims paid. If
the revolving feature is suspended or terminated for any reason, the right
of the issuer of the Reserve Account credit instrument to reimbursement
will be further subordinated to cash replenishment of the Reserve Account
to an amount equal to the difference between the full original amount
available under the Reserve Account credit instrument and the amount then
available for further draws or claims. If (a) the issuer of a Reserve Account
credit instrument becomes insolvent or CO) the issuer of a Reserve Account
credit instrument defaults in its payment obligations thereunder or (c) the
claims-paying ability of the issuer of the insurance policy or surety bond
fails below a S&P "AAA" or a Moody's "Aaa" or (d) the rating of the
issuer of the letter of credit falls beloW a S&P "AA", the obligation to
reimburse the issuer of the Reserve Account credit instrument shall be
subordinate to the cash replenishment of the Reserve Account.
If (a) the revolving reinstatement feature described in the preceding
paragraph is suspended or terminated or Co) the rating of the claims paying
ability of the issuer Of the surety bond or insurance policy falls below a-
S&P "AAA" or a Moody's "Aaa" or (c) the rating of the issuer of the letter
of credit falls below a S&P "AA",'the City shall either (i) deposit into the
Reserve Account an amount sufficient to cause the cash or permitted
investments on deposit in the Reserve Account to equal the Reserve
Account Requirement on all outstanding Bonds, such amount to be paid
over the ensuing five years in equal installments deposited at least
semi-annually or (ii) replace such instrument with a surety bond, insurance
policy or letter of credit meeting,the requirements in any of 1-3 above
within six months of such occurrence. In the event (a) the rating of the
claims-paying ability of the issuer of the surety bond or insurance policy
falls below "A" or (b):the rating of the issuer of the letter of credit falls
below "A" or (c) the :issuer of the Reserve Account credit instrument
defaults in its payment obligations or (d) the issuer of the Reserve Account
credit instrument becomes insolvent, the Issuer shall either (i) deposit into
the Reserve Account an amount sufficient to cause the cash or permitted
invesrmems on deposit in the Reserve Account to equal to Reserve Account
Requiremem on all outstanding Bonds. such amount to be paid over the
ensuing year in equal installments on at least a monthly basis or (ii) replace
such instrument with a surety bond, insurance policy or letter or credit
meeting the reqmrements in any of 1-3 above within six months of such
occurrence.
Where applicable, the amount available for draws or claims under the
Reserve Account credit instrument may be reduced by the amount of cash
10
of permitted investments deposited in the Reserve Account pursuam to
clause (i) of the preceding subparagraph 6.
If the City chooses the above described alternatives to a cash-funded
ReserveAccount,.any amounts owed by the City to the issuer of such credit
instrument as a result of a draw thereon or a claim thereunder, as
appropriate, shall be included in any calculation of debt service
requirements required to be made pursuant to this Resolution for any
purpose, e.g.. rate covenant or additional bonds test.
The Resolution shall requh:e the Fiduciary ro ascertain the necessity for a
claim or draw upon the Reserve Account credit instrument and to provide
notice to the issuer of the Reserve Account credit instrument in accordance
with its terms not later than three days (or such longer period as may be
necessary depending on the permitted time period for honoring a draw
under the Reserve Account credit instrument) prior to each interest payment
date.
10.
Cash on deposit in the Reserve Account shall be used (or invesunents
purchased with such cash shall be liquidated and the proceeds applied as
required) prior to any drawing on any Reserve Account credit instrument.
If an to the extent that more than one Reserve Account, drawings
thereunder and repayments of costs associated therewith shall be made on
a pro rata basis, calculated by reference to the maximum amounts available
thereunder.
Section 6. Approval of Sale of the Series 2002 Bonds. The City hereby determines that
a negotiated sale of the Series 2002 Bonds is in the best interest of the City and the citizens and
inhabitants of the City by reason of the volatility of the market for tax exempt bonds. Attached
hereto as Exhibit "A" is a form of Forward Delivery Purchase Contract (the "Bond Purchase
Contract"/. The City approves the Bond Purchase Contract together with such changes thereto
as are necessary to reflect the terms of the Series 2002 Bonds and to reflect the purchase price
thereof, provided, that the underwriter's discount shall not exceed $3.95 per thousand dollars of
principal amount of the Series 2002 Bonds, and with such other completions, additions and/or
changes as shall be approved by the Mayor, such approval to be conclusively established by such
execution, and the Mayor is hereby authorized and directed for and in the name of the City to
execute, and the City Clerk is authorized to attest to and affix the seal of the City to and deliver
the Bond Purchase Contract to the Original Purchaser. Prior to the execution of the Bond
Purchase Contract, the Original Purchaser shall file with the City the disclosure statement required
by Section 218.385, Florida Statutes, and the competitive bidding for the Series 2002 Bonds is
hereby waived pursuant to the authority of Section 218.385(1), Florida Statures. Notwithstanding
any other provision hereof, the Delayed Delivery Pre-Closing Date, as defined in the Bond
Purchase Contract, shall he on or before August 31,200l unless the City Commission shall by
subsequent resolution authorize a later date.
11
Section 7. Execution and Delivery of the Series 2002 Bonds. The Mayor and the City
Clerk are hereby authorized and directed on betmlf of the City to execute the Series 2002 Bonds
as provided in the Bond Resolution and such officials are hereby authorized and directed upon the
execution of the Series 2002 Bonds in the form and manner set forth herein and in the Bond
Resolution to deliver, the Series 2002.Bonds in the mount authorized to be issued hereunder to
the Bond Registrar for authentication (upon the satisfaction of the conditions of Section 209 of the
Bond Resolution) and delivery to or upon the order of the Original Purchaser upon payment of the
purchase price set forth herein.
Section 8. Application of Proceeds. Proceeds from the sale of the Series 2002 Bonds and
any mounts available under the Bond Resolution as a result of the refunding and defeasance of
the Refunded Bonds shall be applied for the purposes described herein as provided in a'certificate
executed by the Mayor at or prior to the issuance of the Series 2002 Bonds..
Section 9. Bond Registrar. The City hereby appoints The Bank of New York (the "Bank")
as-Bond Registrar with respect to the Series 2002 Bonds. The form of Bond Registrar Agreement
attachedhereto as Exhibit "B'~ is hereby approved and the Mayor is hereby authorized and directed
for and in the name of,the City to execute, and the City Clerk is authorized to attest and apply the
seal of the City to the Bond;.Registrar Agreement, with such changes, alterations and corrections
thereto as shall~be approved by tbe'6fficials executing the same~ such execution to'c0nstimte
conclusive evidence of such approval.
Section 10. Official Statement. The City hereby approves the form and content of, and
authorizes the useby the Original Purchaser in marketing the Series 2002 Bonds. of a Preliminary
Official Statement relating ro the Series 2002 Bonds in the form of the document attached hereto
as Exhibit 'TC,' together with such other changes, alterations and corrections,therein as may be
approved by .the City Manager, who is hereby authorized to approve.the fina2 form of the
Preliminary, Official Statement, such approval to be conclusively establishedby the execution by
the City Manager of a certificate "deeming final" the Preliminary Official Statement for purposes
of Securities and Exchange Commission Rule 15c2-12. which execution is hereby authorized. The
preparation of.a final official Statement for the Series 2002 Bonds. which shall be in substantially
the form of the: Preliminary Official Statement, changed to reflect the terms, of the Series 2002
Bonds and with. such other changes, alterations and corrections therein as may be approved by the
Mayor. and City Manager, such approval to be conclusively established by such execution, is
hereby authorized, and upon preparation thereof the Mayor and the City Manager are authorized
and directed for and in the name of the City to execute and deliver the Official Statement.
Section 11 Authorization for Bond Insurance. The Mayor, the Finance Director and the
City Manager, or any of them, are authorized to arrange for municipal bond insurance on the
Series 2002 Bonds to be provided by the 2002 Bond Insurer, to pay or cause to be paid the
premium with respect-lhereto, 'and to take all' actions and execute such documents as may be
required in connection therewith.
12
Section 12. Book Entry System. The City is authorized and directed to execute a Blanket
Issuer Letter of Representations in the form attached hereto as Exhibit "D," and to comply with
the provisions thereof.
......... Section 13. Compliance with Tax Requirements..The CitEhereby covenants and agrees,
for the benefit of the Bondholders from time to time of the Series 2002 Bonds, to comply with the
requirements applicable to it contained in Section 103 and Part IV of Subchapter B of Chapter 1
of the Internal Revenue Code of 1986, as amended (the "Code") to the extem necessary to preserve
the exclusion of interest on the Series 2002 Bonds 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:
(1) to pay to the, United States of America from, to the extent legally available,
the funds and sources of revenues pledged to the payment of the Series2002 Bonds, and
from any other legally available funds, at the times and to the extent required pursuant to
Section 148(f) of the Code, the excess of the amount earned on all non- purpose
investments (as defined in Section,148(f)(6) of the Code) (other than investments attributed
to an excess described in this sentence) over the amount which would have been earned if
such non-purpose investments were invested at a rate equal to the yield on the Series 2002
Bonds~ plus any income attributable to such excess (the "Rebate Amount");
(2) to mainta'm and retain all records pertaining round to be responsible for
making or causing to be made all determinations .and calculations of the Rehate Amount
and required payments of the Rebate 3~nount as shall be necessary to comply with the
Code:
(3) to refrain from using proceeds from the Series 2002 Bonds in a manner that
would cause the Bonds or any of them. to be classified as private activity bonds under
Section 141 (al of the Code: and
(4) to take or refrain from taking any action that would cause the Series 2002
Bonds, or any of them, to become arbitrage bonds under Section 103(10) and Section 148
of the Code.
The City understands that the foregoing covenants impose continuing obligations on the
City to comply with the reqnirements of Section 103 and Part IV of Subehapter B of Chapter 1 of
the Code so long as such requirements are applicable.
Unless otherwise specified in the Certificate as to Arbitrage and Other Tax Matters
delivered in connection with the issuance of the Series 2002 Bonds, the City shall designate a
certified public accountant,-Bond Counsel, or other professional consultant having the skill and
expertise necessary (the "Rebate Analyst") to make any and ail calculations required pursuant ro
this Section regarding the Rebate Amount. Such calculation shall be made in the manner and at
such times as specified in the Code. The City shall engage and shall be responsible for paying the
fees and expenses of the Rebate Analyst.
13
Section 14. The Reftmded Bonds and the Escrow Deposit Agreement. The redemption of
the Refunded Bonds as shall be described in the executed Escrow Deposit Agreement is authorized
and directed. The Escrow Deposit Agreement in the form attached hereto as Exkibit "E" is hereby
approved, subject to such changes, insertions, omissions, and filling in of blanks therein as may
be approved by the Mayor, such approval to be c4gc4~_usiye~y ~¥idenced by the execution of the
Escrow Deposit Agreement by the Mayor. The Mayor and the City Clerk are hereby authorized
to execute and deliver the Escrow Deposit Agreement on behalf of the City. The Escrow Agent
under the Escrow Deposit Agreement shall be The Bank of New York. The Mayor, Finance
Director. City Manager and Escrow Agent, or any of them. are hereby authorized to subscribe for
the purchase ofany United State: Treasury Obligations -- State and Local Government Series to
be purchased pursuant m abe Escrow Deposit Agreement.
Section 15. Continuing Disclosure.
(a) Disclosure of Annual Information. The City agrees, in accordance with the provisions
of Rule 15c2-12 in effect from time to time and applicable to the Series 2002 Bonds (the "Rule"),
pr0m~gated by the Securities ,and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, to provide, either dkectly or indirectly through a designated
agent, to each nationally recognized municipal securities information repository ("NRMSIR") as
designated and approVed, by tlae Commission and to the appropriate'State of Florida information
depository ("SID"), if any, operated or designated by the State, respectively, m accordance with
the Rule,.(i) within 180 days following the end of each Fiscal Year of the City, commencing with
the Fiscal Year ending September 30. 2002 annual financial information and operating data
concerning the Utility System, of the type included in the Official Statement, including operating
revenues, debt service coverage by Net Revenues. rates and charges of the Utility System,
summary of any capital improvements plan, and information regarding permitted capacities and
actual usage *of capacities of the Utility System and financial statements (audited, or. if not
available during, such time period, unaudited)of the City and, (i/) if not submitted as paxt of such
financial information and; operating dam, then, when available, audited financial statements for.the
City prepared in accordance' with generally accepted accounting principles applicable to
governmental entities from time to time. A copy of such annual financial information and
op~. rating dm will be provided~by the Ci~ to the Original Purchaser. the 2002 Bond Insurer and
toxhe Bond Registrar forlthe Series 2002 Bonds as designated by the City from time to time. (The
information required to be disclosed in.this paragraph shall be here'mafter referred to as the
"Annual Report. ")
(b) Disclosure of Material Events. The City agrees to provide either directly or
indirectly through a designated agent, ina timely manner, to (i) each NRMSIR or to the Municipal
Securities Rulemaking Board ("MSRB") and (ii) the SID, if any, notice of the occurrence of any
of the following events with respect to the Series 2002 Bonds, if such event is material:
O)
principal and interest payment delinquencies:
(ii)
non-payment related defaults;
14
(iii) unscheduled draws on debt service reserves, if any, reflecting financial
difficulties:
difficulties
unscheduled draws on credit enhancements, if any, reflect'mg financial
perform:
substitution of credit or liquidity providers, if any, or their failure to
2002 Bonds:
adverse tax opinions or events affecting the tax-exempt status of the Series
modifications to rights of the holders of the Series 2002 Bonds;
(viii) bond calls of the Series 2002 Bonds (other than scheduled mandatory
redemption) or any acceleration of the maturity thereof;
ex)
defeasances (in whole or in part) of Series 2002 Bonds;
2002 Bonds;
release, substitution, or sale of property securing repayment of the Series
tat'rog changes; and
any changes in the City's Fiscal Year.
(c) Notice of Failure. The City agrees to provide or cause to be provided, in a timely
manner, to {ii) each NRMSIR orthe MSRB and (ii) the SID. if any, notice of a failure by the City
to provide the Annual Report described in subsection (a) above on or prior to the date set forth
therein.
(d) Termination. The City reserves the right to terminate its obligation to provide the
Annual Report and notices of material events, as set forth above, if and when the City no longer
remains an obligated person with respect to the Series 2002 Bonds (within the meaning of the
Rule). If the City believes such condition exists, the City will provide notice of such termination
to the NRMSIR's, the MSRB and the SID.
(e) Undertaking for Benefit of Holders and Beneficial Owners. The City agrees that
its undertaking pursuant to the Rule described herein is intended to be for the benefit of the holders
and beneficial owners of the Series 2002 Bonds and shall be enforceable by any holder or
beneficial owner: provided' that the right to enforce the provisions of this undertaking shall be
limited to a right to obtain specific enforcement of the City's obligations hereunder and any failure
by the City to comply with the prowsions of this undertaldng shall not be an event of default with
respect to the Series 2002 Bonds under the Resolution.
15
(f) Volunt~_ Disclosure Shall Not Bind City. Any voluntary inclusion by the City of
information in its Annual Report of supplemental information that is not required by the Rule shall
not expand the obligations of the City under the Rule and the City shall have no obligation to
update such supplemental information or include it in any subsequent report.
(g) Third Parties. The covenants described herein are solely for the benefit of the
holders and beneficial owgers of the Series 2002 Bonds and shall not create any rights in any other
parties.
(h) Amendment; Waiver. Notwithstanding any other provision of this Resolution, the
City may amend the provisions of this Section and any such provision may be waived, provided
that the following conditions are satisfied:
(I) If the amendment or waiver relates to the provisions of paragraphs
(a), (b), or (c) above, it may only be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law, ox
change in the identity, nature or status of the City or the type of business conducted
bythe City;
(2) The undertaking, as amended or taking into account such waiver,
would, in the opinion of nationally recognized bond counsel, have complied with
the requirements of the Rule at the time of the original issuance of the Series 2002
Bonds, after taking into account any amendments or interpretations of the Rule, as
well as any change in circumstances: and
(3) The amendment or waiver does not materially impair the interests
of holders and beneficial owners as determined either by parties unaffiliated with
the City or an obligated person, or by an approving vote of the holders of at least
a majority inaggregate principal amount of the then outstanding Series 2002 Bonds
pursuant to the terms of the Bond Resolution.
In the event of any such amendment or waiver of a provision described above, the City shall
describe such amendment or waiver in the next Annual Report, and shall include, as applicable,
a narrative explanation of the reason for the amendment or waiver and its impact on the type (or,
in the case of a change of accounting principles, on the presentation) of annual financial
information or operating data being presented by the City. In addition, if the amendment or
waiver relates to the accounting principles to be followed in preparing financial statements, (i)
notice of such change shall be given in the same manner as set forth in subsection (b) and (ii) the
Annual Report for the year in which the change is made must present a comparison (in narrative
form and also, if feasible, in quantitative form) between the financial statements as prepared on
the basis of the new a~ccounting principles' and those prepared on the basis of the former accounting
principles.
Section 16. This Resolution constitutes a declaration of official intent under Treasury
Regulation Section 1.150-2. The City reasonably expects to incur expenditures for various
16
municipal capital improvements, and reasonably expects to reimburse such original expenditures
with proceeds of the Series 2002 Bonds issued in the maximum principal amount set forth
elsewhere herein.
...... __Section 17. Authorizations. TheMayor, the City Clerk. the Finance Dkector, and the
City Manager are hereby jointly and severally authorized to do all acts and things required of them
by this Resolution, the Bond Resolution or the Bond Purchase Contract, or desirable or consistent
with the requirements hereof or thereof, for the full, punctual and complete performance of all
terms, covenants and agreements contained in the Series 2002 Bonds. the Bond Resolution, this
Resointion, and the Bond Purchase Contract, and to make any elections necessary or desirable in
connection with the arbitrage provisions of Section 148 of the Code.
Section 18. Holidays. Inany case where the date of maturity of interest on or principal
of the Series 2002 .Bonds ' or: the~ date f~xed for redemption of any Series 2002 Bonds is not a
Business Day,.then payment of peincipal, premium, if any, or interest need not be made on such
date but may be made on the next succeeding Business Day, with the same force and effect as if
made on the date of maturity or the date f~xed, for redemption.
Section 19.. Resolution to Constitute a Contract. In consideration of the purchase and
acceptanCe: o~[ the Series 2002 Bonds"authorized to be issued hereunder by those who shall be the
holders thereof from time to time, this Resolution shall constitute a contract between the City and
such holders, and all covenants and agreements herein and in the Bond Resolution set forth to be
performed by the~City shall be for the equal benefit and security of all of the holders.
Section 20. No Implied Beneficiary_. With the exception of any rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from this Resolution or the Series
2002 Bonds is intended or shall be construed to give any person other than the City, the Original
Purchaser, the 2002. Bond Insurer and the Owners, any legal or equitable right, remedy or claim
under or with respect to this Resolution or the Bond Resolution or any covenants, conditions, and
provisions herein contained; this Resolution and the Bond Resolution and all of the covenants.
conditions and provisions hereof and thereof being intended to be and being for the sole and
exclusive benefit of the City, the Original Purchaser, the 2002 Bond Insurer~and the Owners.
· Section 21. Severability. If any provision of this Resolution shall be held or deemed to
be or shall, in fact. be illegal, inoperative or unenforceable in any context, the same shah not
eff~ect any other provision herein or render any other provision (or such provision in any other
context) invalid, inoperative or unenforceable to any extent whatsoever.
Section 22. Repealer. All Resolutions or parrs thereof of the City in conflict with the
provisions herein contained or. to the extent of any such conflict, hereby superseded and repealed.
17
Section 23. Effective Date. This Resolution shall take effect immediately upon its
adoption.
PASSED AND ADOPTED THIS 15th DAY OF MAY. 2001.
(SEAL)
ATTEST:
CITY OF BOYNTON BEACH, FLORIDA
Vice-Mayor
Commissioner
/
Commissioner
Commissioner
18