03-29-2010 - Special
V oting Order
Councilwoman Bennington
Councilwoman Rhodes
Councilman Cooper
Mayor Thomas
Councilwoman Rogers
March 24, 2010
-PUBLIC NOTICE-
To All Members of the City Council:
I hereby call a Special Meeting of the City Council of Edge water for Monday, March 29,2010, at
6:00 p.m. in Council Chambers to discuss:
1) Wachovi.a Line of Credit.
2) Discussion on Volusia County EMS Division's findings regarding delayed
transport.
~
Michael . Tho as
Mayor
ATTEST:
1to~ CL ~~
Bonnie A. Wenzel
City Clerk
Pursuant to Chapter 286, F.s., if an individual decides to appeal any decision made with respect to any matter considered at a
meeting or hearing, that individual will need a record of the proceedings and wi/lneed to ensure that a verbatim record of the
proceedings is made. The City does not prepare or provide such record.
/n accordance with the Americans with Disabilities Act, persons needing assistance to participate in any of these proceedings
should contact City Clerk Bonnie Wenzel, /04 N. Riverside Drive, Edgewater, Florida, telephone number 386-424-2400 ext. //0/,
5 days prior to the meeting date. If you are hearing or voice impaired, contact the relay operator at /-800-955-877/.
AGENDA REQUEST
Date: March 30, 2010
PUBLIC HEARING
CONSENT X
RESOLUTION ORDINANCE
OTHER BUSINESS_ CORRESPONDENCE
ITEM DESCRIPTION:
City of Edgewater, non-revolving Line of Credit with Wachovia Bank not to exceed $750,000
BACKGROUND:
The Line of Credit, the Loan, will be secured by Grant Proceeds received by the City for any project for which the
proceeds of the subject loan were used and a Covenant to Budget and Appropriate from all Legally Available
Non-Ad Valorem Revenues. The Line will mature two years from closing. Principal will be fully due and payable at
maturity.
The grant funded Capital Improvement Projects subject to the use of the Line of Credit is as follows:
Project
1, Southeast Water Storage and Pump Station
2. New Water Supply Wells
3. Amphitheater cover
4. Station 55 retrofit
5. Riverside Lift Station retrofit
The resolution and agreements will be brought to Council on Monday April 19, 2010 for execution.
STAFF RECOMMENDATION:
Authorize the City Manager to proceed with the Non-revolving Line of Credit with Wachovia Bank, not to exceed
$750,000.
ACTION REQUESTED:
Motion to authorize the City Manager to proceed with the Non-revolving Line of Credit with Wachovia Bank to
provide funds for various grant funded capital improvement projects.
FINANCIAL IMPACT:
(FINANCE DIRECTOR)
(SPECIFY IF BUDGET AMENDMENT IS REQUIRED) n/a
PREVIOUS AGENDA ITEM:
DATE:
YES NO ~
AGENDA ITEM NO.
Concurrence:
II VVACHOVIA
Wachovia Bank N.A.
a Wells Fargo Company
Government and Institutional Banking
800 N. Magnolia Ave. 91h Floor FL2810
Orlando, FL 32803
March 15, 2010
Mr. Jonathan McKinney
Finance Director
City of Edgewater
104 North Riverside Drive
Edgewater, Florida 32132
Dear Mr. McKinney:
Wachovia Bank, National Association (the "Bank") is pleased to submit the Commitment
described below to the City of Edgewater, Florida (the "City") subject to the following terms and
conditions:
Effective December 31, 2008, Wachovia Corporation merged with Wells Fargo & Company
("Wells Fargo"), with Wells Fargo as the surviving holding company. Upon consummation of the
merger, Wachovia Bank, National Association ("Wachovia") became an indirect subsidiary of
Wells Fargo. Wachovia will operate under its existing national bank charter until it is merged
with Wells Fargo Bank, National Association. Upon such merger the Financing Documents (as
defined below) shall automatically transfer to Wells Fargo Bank, National Association.
Borrower:
City of Edgewater, Florida (the "City")
Amount:
$750,000.00
Facility:
Non-revolving Line of Credit (the "Line")
Purpose:
To provide funds for various capital improvement projects.
Term:
The Line will mature two years from closing. Interest will be due semi-
annually commencing six months from closing. Principal will be fully due
and payable at maturity. Interest on the outstanding balance of the loan
will be calculated on a 30/360 day-year basis. Draws will be limited to
one a month. Minimum draw of $200,000 at closing.
Security:
The Loan will be secured by Grant Proceeds received by the City for any
project for which the proceeds of the subject loan were used and a
Covenant to Budget and Appropriate from all Legally Available Non-Ad
Valorem Revenues (the "Pledged Revenues").
City of Edgewater Two Year Tcnll Loan
Interest Rate:
NOTE: The City must indicate the closing date at the time of acceptance.
Bank Qualified Variable Rate: One Month L1BOR plus 150 basis points,
adjusted monthly. As of March 15, the rate would have been 1.73%.
lIBOR is that rate as shown on the Telerate System, page 3750. The
Initial Rate will be based on lIBOR two business days prior to closing.
lIBOR will be reset monthly on the first day of the month based on lIBOR
two business day prior to the first day of the month.
Prepayment:
The loan may be prepaid at any time without penalty.
Conditions
1. The City, by official action, shall approve entering into this commitment and the loan
facility described herein; it shall cause any borrowing under this facility to be designated
as a "Qualified Tax-Exempt Obligation" pursuant to Section 265(b)(3)(B) Internal
Revenue Code of 1986, as amended.
Should subsequent but currently unforeseen events cause any borrowing under this
facility to be determined to be a "non-qualified" obligation pursuant to Section 265(b)
(3)(B), Internal Revenue Code of 1986, as amended, the Bank shall adjust the interest
rate on any outstanding hereunder so that it shall receive the same after tax yield
equivalent contemplated as of the time of this commitment.
2. The interest rate on this Note shall be subject to adjustment as set forth below.
If i) a "Determination of Taxability" (as defined below) shall occur or ii) state or federal
tax laws or regulations are amended to cause the interest on the Note to be taxable, to
be subject to a minimum tax or an alternative minimum tax or to otherwise decrease the
after tax yield on the Note to the Lender (directly or indirectly, in whole or in part), then
the interest on the Note shall be adjusted to cause the yield on the Note, after payment
of any increase in tax, to equal what the yield on the Note would have been in the
absence of such Determination of Taxability or change or amendment in tax laws or
regulations.
For purposes hereof, "Determination of Taxability" means the circumstance of the
interest on the Note becoming includable for federal income tax purposes in the gross
income of the Lender, or the Note not being a "qualified tax-exempt obligation" under
Section 265(b)(3)(B) of the Internal Revenue Code, regardless of whether caused by or
within the control of the Issuer. A Determination of Taxability will be deemed to have
occurred upon (i) the receipt by the Issuer or the Lender of an original or a copy of an
Internal Revenue Service Technical Advice Memorandum or Statutory Notice of
Deficiency; (ii) the issuance of any public or private ruling of the Internal Revenue
Service; or (iii) receipt by the Issuer or Lender of an opinion of counsel experienced in
tax matters relating to municipal bonds, in each case to the effect that the interest on the
Note is not excluded from in the gross income of the Lender for federal income tax
purposes or the Note is not a "qualified tax-exempt obligation".
The above adjustments shall be cumulative, but in no event shall the interest on the
Note exceed the maximum permitted by law. The above adjustments to the interest rate
on the Note shall be effective for all periods during which tax treatment of the interest on
City of Edgewater Two Year Term Note
the Note by the Lender is the affected. Proper partial adjustment shall be made if the tax
law change is effective after the first day of the Lender's tax year or if the interest on the
Note does not accrue for the entire tax year of the Lender. Adjustments which create a
circular calculation because the interest on the Note is affected by the calculation shall
be carried out sequentially, increasing the interest on the Note accordingly in each
successive calculation using as the new value the increase in the interest rate on the
Note, until the change on the interest rate on the note caused by the next successive
calculation of the adjustment is de minimis.
3. All legally available Non-Ad Valorem Revenues shall mean all revenues of the City
derived from any source whatsoever, other than Ad Valorem taxation on real and
personal property and are legally available to make the loan repayments required under
this proposal, but only after provision has been made by the City for payment of services
and programs which are for essential public purpose affecting the health welfare and
safety of the inhabitants of the City or which are legally mandated by applicable law. So
long as there are legally available Non-Ad Valorem Revenues, the City may not fail to
budget and appropriate debt service in order to balance its budget. The foregoing
covenant to budget and appropriate shall be deemed to require appropriation, in the
manner set forth above, of Non-Ad Valorem Revenues ratably to pay the obligations
hereunder and all other Additional Covenant Debt. The Issuer will not enter into any
covenant to budget and appropriate from Non-Ad Valorem revenues which is in any
manner prior or senior to its obligations hereunder. Additional Covenant Debt shall mean
indebtedness of the Issuer heretofore or hereafter issued which contains a covenant by
the Issuer to budget and appropriate from Non-Ad Valorem Revenues amount sufficient
to pay the principal, interest and premium, if any, on such debt as same becomes due
and payable, all in a form similar to the covenant described herein.
4. For each fiscal year during the term of the loans, and prior to the incurrence of Additional
debt secured by a Covenant to Budget and Appropriate from all Legally Available Non-
Ad Valorem Revenues, the average of the prior two years Legally Available Non Ad
Valorem Revenues as defined above, must cover existing and projected maximum
annual debt service on debt secured by and/or payable from such Revenues by at least
1.5x, For purposes of calculating maximum annual debt service, variable rate debt shall
be assumed to bear interest at the higher of 6% per annum or the actual interest rate
borne by the loan for the month preceding the date of calculation. Moreover the subject
facility shall be assumed to be amortized over a five year period.
5. Loan documents relating to this facility shall be prepared by bond counsel listed in The
Bond Buyer's Municipal Marketplace (the "Red Book") and acceptable to the Bank. The
Bank will receive a standard opinion of bond counsel as to the due authorization and
enforceability of the documents and as to tax-exemption under state and federal law,
and an opinion of the issuer's attorney as to litigation and other matters. The loan
documents and such opinions shall be in form and content acceptable to the Bank.
Documents shall be available for review at least 5 business days prior to closing. The
Bank will retain counsel to prepare the loan documents and to provide the bond counsel
opinion or, if the issuer has bond counsel, to review the documents on behalf of the
Bank. Bank counsel will charge a fee of $7,000.00 to prepare the documents and
provide the bond counsel opinion or a fee of $3,000.00 to review documents prepared by
the issuer's bond counsel. All costs relating to the preparation of documents and to
otherwise complete this transaction, including the Bank counsel fee, will be paid by the
City (whether or not the transaction closes).
City of Edgewater Two Year Term Note
6. On an ongoing basis, the City agrees that it shall deliver to the Bank printed copies of,
when available, or within 180 days of each fiscal year end, whichever is sooner, a
Comprehensive Annual Financial Report, a Current Year Operating Budget as soon as it
is completed and a Capital Improvement Plan and any other such information as
reasonably requested by Bank. Additionally, the City shall annually provide an Anti-
Dilution Certificate, (Exhibit B attached), certifying that it is in compliance with the
required ratio as set forth in condition (4) above. Prior to closing the attached Exhibit
B must be signed and returned to the Bank.
7. This Commitment shall remain in full force and effect through 3:00 p.m., local time,
March 26, 2010, at which time, if not accepted by execution of the acceptance clause
below and mailed to the Bank at its 800 N. Magnolia Ave, 7h Floor, Orlando, FL 32803
office to my attention, this Commitment shall expire and shall not be enforceable by
either the Bank or the City unless extended by the Bank in writing. Unless extended by
the Bank in writing, this facility must close on or prior to May 26, 2010 after which this
commitment shall expire.
8. If the Bank chooses to waive any covenant, paragraph, or provision of this Commitment,
or if any covenant, paragraph, or provision of this Commitment is construed by a court of
competent jurisdiction to be invalid, it shall not affect the applicability, validity or
enforceability of the remaining covenants, paragraphs or provisions.
9. The preceding terms and conditions are not exhaustive. Any final documents will include
other covenants, terms and closing conditions as are customarily required by the Bank
for similar transactions including but not limited to a Cross Default with other debt,
Default Rate of the higher of the Note Rate + 3% or Prime + 3%, Events of Default,
Acceleration upon Default and waiver of jury trial, most favored nation provision, such
that more restrictive covenants, ratios and tests, and greater remedies under the
Obligor's other like secured debt instruments shall be automatically deemed
incorporated, mutatis mutandis, into the loan documents, and prohibitions on the use of
bond proceeds for leveraged or margined investments and on speculative derivative
transactions, in each case without the prior written consent of the Bank. To the extent
permitted by law the loan documents will include customary interest rate recapture
("c1awback") language allowing the Bank to recover interest in excess of any maximum
interest rate imposed by law. This Commitment Letter shall not survive closing.
1 O. To ensure current pricing the Obligor must maintain their primary depository and
operating accounts and treasury services with the Bank. Should the Obligor discontinue
their principal depository and treasury services relationship with the Bank, a review and
change of the facility fee may be required by the Bank.
11. The City represents and agrees that all information provided to the Bank is correct and
complete. No material adverse change may occur in the business condition, operations,
or performance .of the City nor may any adverse circumstance be discovered as to, the
financial condition of the City prior to closing. The Bank's obligations under this
Commitment are conditioned on the fulfillment to the Bank's sole satisfaction of each
term and condition referenced by this Commitment. No change may occur in any law,
rule or regulation (or their interpretation or administration), that, in each case, may
adversely affect the consummation of the transaction, to be determined in the Bank's
sole discretion;
12. This Commitment supersedes all prior Commitments and proposals with respect to this
City of Edgewmer Two Year Term Note
transaction, whether written or oral, including any previous loan proposals made by the
Bank or anyone acting within its authorization. No modification shall be valid unless in
writing and signed by an authorized Officer of the Bank. This Commitment is not
assignable and no entity other than the City shall be entitled to rely on this Commitment.
13. The Bank will make the loan for its own account and not with the intent to distribute the
loan or interests therein. However, the Bank may in the future enter into participation
agreements or securitization transactions with respect to the loan. No transfer
restrictions will apply to the loan. If requested, the Bank will deliver an appropriate
investor letter at closing.
Wachovia Bank, National Association appreciates the opportunity to submit this Commitment to
you and looks forward to your favorable response. Should you have any questions, please do
not hesitate to contact me at 407 -649-5638.
Best Regards,
WACHOVIA BANK, NATIONAL ASSOCIATION
~L!( 1\1\ ,-yG-)//
Todd Morley, CFA
Senior Vice President
Government Banking
ACCEPTANCE
The above Commitment is hereby accepted on the terms and conditions outlined therein by
authority of the Governing Board of the City:
Closing Date:
By:
Date:
Its:
City of Edgewater Two Year Term Note
EXHIBIT "An
In addition to principal, interest and any other amounts due under this Note, Borrower shall on demand pay to Bank any
"Breakage Fee" due hereunder for each Break Event. "Break Event" means any voluntary or mandatory prepayment or
acceleration, in whole or in part, of principal of this Note occurring prior to the date such principal would, but for that
prepayment or acceleration, have become due ("Scheduled Due Daten). For each date on which a Break Event occurs
("Break Date"), a Breakage Fee shall be due only if the rate under "A" below exceeds the rate under "B" below and shall
be determined as follows:
Breakage Fee = the Present Value of ((A-B)xC) + UBOR Breakage, where:
A = The rate per annum equal to the sum of (i) the bond equivalent yield (bid side) of the U.S. Treasury security with
a maturity closest to the Maturity Date as reported by the Wall Street Journal (or other published source) on the
date the Interest Rate of this Note was set ("Lock in Date"), plus (ii) the corresponding swap spread of Bank on
the Lock in Date for a fixed rate payor to pay Bank the fixed rate side of an interest rate swap of that maturity,
plus (iii) .25%.
B = A rate per annum equal to the sum of (i) the bond equivalent yield (bid side) of the U.S. Treasury security with a
maturity closest to the Maturity Date as reported by the Wall Street Journal (or other published source) on the
Break Date, plus (ii) the corresponding swap spread that Bank determines another swap dealer would quote to
Bank on the Break Date for paying to Bank the fixed rate side of an interest rate swap of the maturity.
C = The sum of the products of (i) each Affected Principal Amount for each Affected Principal Period, times (ii) the
number of days in that Affected Principal Period divided by 360 (if this Note uses the Actual/360 Computation)
or the actual number of days in the year (if this Note uses the Actual/Actual Computation).
"Affected Principal Amount" for an Affected Principal Period is the principal amount of this Note scheduled to be outstanding during
that Affected Principal Period determined as of the relevant Break Date before giving effect to the Break Event on that Break Date,
and for any prepayment. multiplying each such principal amount times the Prepayment Fraction.
"Affected Principal Period" is each period from and including a Scheduled Due Date to but excluding the next succeeding Scheduled
Due Date, provided that the first such periOd shall begin on and includes the Break Date.
"UBOR Breakage" is any additional loss, cost or expense that Bank may incur with respect to any hedge for the fixed rate of this Note
based on the difference between the London interbank offered rate (for U.S. dollar deposits of the relevant maturity) available in the
London interbank market at the beginning of the interest period in which the Break Date occurs and that which is available in that market
on the Break Date.
"Maturity Date" is the date on which the final payment of principal of this Note would, but for any Break Event, have become due.
"Prepayment Fraction" is a fraction equal to the principal amount being prepaid over the principal amount of this Note outstanding
immediately prior to that prepayment on the Break Date.
"Present Value" is determined as of the Break Date using "B" above as the discount rate.
In addition, a Break Event shall be deemed to occur hereunder if. on any date ("Borrowing Date") after the date hereof but prior to any
acceleration of this Note, any advance of principal under this Note is scheduled to be made and that advance fails to be made on that
Borrowing Date (whether due to Borrower's default, Borrower's failure to borrow, the termination of any loan commitment. any
unsatisfied condition precedent, or otherwise), in which case that Borrowing Date shall be a Break Date, the Affected Principal Amount
for that Break Event shall be based on the amount of the failed advance, and the Borrower shall on demand pay to the Bank any
Breakage Fee due hereunder for that Break Event.
Breakage Fees are payable as liquidated damages. are a reasonable pre-estimate of the losses, costs and expenses Bank would incur
in the event of any prepayment or acceleration of this Note, are not a penalty, will not require claim for, or proof of, actual damages, and
Bank's determination thereof shall be conclusive and binding in the absence of manifest error. For any Break Event hereunder, the
foregoing Breakage Fee provisions supersede any breakage compensation agreement that Borrower and Bank may have executed with
respect to this Note.
City of Edgewater Two Year Tel1l1 Note
EXHIBIT B
ANTI-DILUTION CERTIFICATE
The City hereby certifies to Wachovia Bank that it is in compliance with the
required covenant as follows:
1. All legally available Non-Ad Valorem Revenues shall mean all revenues of the
City derived from any source whatsoever, other than Ad Valorem taxation on real
and personal property and are legally available to make the loan repayments
required under this proposal, but only after provision has been made by the City
for payment of services and programs which are for essential public purpose
affecting the health welfare and safety of the inhabitants of the City or which are
legally mandated by applicable law. So long as there are legally available Non-
Ad Valorem Revenues, the City may not fail to budget and appropriate debt
service in order to balance its budget. The foregoing covenant to budget and
appropriate shall be deemed to require appropriation, in the manner set forth
above, of Non-Ad Valorem Revenues ratably to pay the obligations hereunder
and all other Additional Covenant Debt. The Issuer will not enter into any
covenant to budget and appropriate from Non-Ad Valorem revenues which is in
any manner prior or senior to its obligations hereunder. Additional Covenant Debt
shall mean indebtedness of the Issuer heretofore or hereafter issued which
contains a covenant by the Issuer to budget and appropriate from Non-Ad
Valorem Revenues amount sufficient to pay the principal, interest and premium,
if any, on such debt as same becomes due and payable, all in a form similar to
the covenant described herein.
2. For each fiscal year during the term of the loans, and prior to the incurrence of
Additional debt secured by a Covenant to Budget and Appropriate from all
Legally Available Non-Ad Valorem Revenues, the average of the prior two years
Legally Available Non Ad Valorem Revenues as defined above, must cover
existing and projected maximum annual debt service on debt secured by and/or
payable from such Revenues by at least 1.5x, For purposes of calculating
maximum annual debt service, variable rate debt shall be assumed to bear
interest at the higher of 6% per annum or the actual interest rate borne by the
loan for the month preceding the date of calculation. Moreover the subject facility
shall be assumed to be amortized over a five year period.
City of Edgcwalcr 604.c 201 O.DOC
3. The City's legally available Non-Ad Valorem Revenues for the prior t\VO fiscal years are
as follows:
Revenues
Total Revenues (Per CAFR)
Less: Ad Valorem Revenues
Total Non-Ad Valorem Revenues
Less: Restricted Funds:
[Grants]
[Transp Impact]
[Rec Impact]
[Cap Proj]
Adjusted Non Ad-Valorem Revenues
FY 2008 FY2009
S 12,957
6.054 (6,022+32 d/s)
S 6,903
70
145
11
16
$ 6,661
Expenditures
Essential Expenditures
General Government
Public Safety
Total Essential Expenditures
Less: Essential Expenditures Paid
from Ad Valorem Funds Net of
Ad Valorem Debt Service Levy or
Designated Ad Valorem Revenues
Adjusted Essential Expenditures
FY 2008
FY2009
S 2,762 (69+620+214+1859)
6.467 (2,453+2,813+201)
$ 9,229
Legally Available Non-Ad Valorem Revenues
(Adjusted Non-Ad Valorem Revenues less
Adjusted Essential Expenditures)
S 6.022
$ 3,207
$ 3,454
The City's debt service coverage ratio is as follows:
Average Legally Available Non-Ad Valorem Revenues
S 3,454
Maximum Annual Debt Service:
Cap Leases
Series 200A
Wachovia 1995A and B
FIND loan
Fire Truck loan
Subject debt $750,000 @ 6% 5 years
66
298
989 **
563
37
178
2,131
.. Actual debt service of $1,288 reduced by Net Stormwater System Revenues of $299
Ratio [Must be at least 1.5x]
3,454/2,131 = 1.62x
WITNESS or hands this _ Day of
,2010.
, Florida
By:
City Clerk
City of Edg~\\';lt~r 604.c 201 O.DOC