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HomeMy WebLinkAboutR-01-15 RESOLUTION NO. R-Ol-15 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEBASTIAN, FLORIDA, AUTHORIZING THE LEASE-FINANCING OF CERTAIN EQUIPMENT THROUGH EXECUTION OF A MASTER LEASE-PURCHASE AGREEMENT WITH KISLAK NATIONAL BANK; PROVIDING FOR THE PAYMENT OF THE LEASE PAYMENTS; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEBASTIAN, FLORIDA: Section 1: Authority for this Resolution. This Resolution is adopted pursuant to the Constitution and laws of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, and other applicable provisions of law (hereinafter collectively referred to as the" Act"). Section 2: Findings. It is hereby ascertained, found, determined and declared by the City of Sebastian, Florida, (the "Lessee") that: (a) It is necessary, desirable, and in the best interest ofthe Lessee and its inhabitants that the Lessee acquire the equipment described in Exhibit A hereto (the "Equipment") and pay for such acquisition through a lease-purchase financing structure pursuant to a Master Lease-Purchase Agreement (the "Lease-Purchase Agreement") between the Lessee and Kislak National Bank (the "Bank"). (b) The Lessee is authorized and empowered by the Act to enter into transactions such as that contemplated by the Lease-Purchase Agreement and to fully perform its obligations thereunder in order to acquire the Equipment. (c) The execution and delivery of the Lease-Purchase Agreement by the Lessee will comply with all of the provisions of the Act. (d) The Lessee has requested proposals from financial institutions and has determined that the terms proposed by the Bank are in the best interest of the Lessee consistent with the request for proposals issued for this purpose. Section 3: Authorization of Equipment. The lease-financing of the Equipment is hereby authorized, pursuant to the provisions of a Lease-Purchase Agreement which shall contain terms consistent with the proposal of the Bank attached hereto as Exhibit B. Section 4: Approval of Lease-Purchase Agreement. The Lessee hereby authorizes and directs its City Manager to execute and deliver, and the City Clerk ofthe Lessee to attest under the seal ofthe Lessee, a Lease-Purchase Agreement, all of the provisions of which, when executed and delivered by the Lessee as authorized herein and by the Bank, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim herein. The Lease Purchase Agreement shall be in such form as approved by the City Manager, such approval to be conclusively presumed by the execution thereof. The rent 1 payments to be paid under the Lease-Purchase Agreement and the other terms of the Lease-Purchase Agreement shall be consistent with the proposal of the Bank attached hereto as Exhibit B. Section 5: Designation as Oualified Small Issuer Obligation. The Lessee (including all subordinate entities which issue tax-exempt debt on behalf of the Lessee) does not reasonably anticipate issuing tax -exempt obligations in excess of $1 0,000,000 during the current calendar year. The Lessee does hereby designate the obligation to lease the Equipment pursuant to the Lease-Purchase Agreement as a qualified tax-exempt obligation under Section 265(b)(3) of the Internal Revenue Code of 1986. Section 6: Pledge of Lease Proceeds. In order to provide for acquisition ofthe Equipment, the Lessor shall pay the proceeds of the Lease to Lessee. The Lessee covenants and agrees to establish a separate fund in a bank or trust company in the State of Florida, which is eligible under the laws of such State to receive funds of the Lessee, to be known as the City of Sebastian, Florida, Major Equipment Replacement Trust Fund, which shall be used only for the payment of the cost of acquisition of the Equipment. Moneys in the Major Equipment Replacement Trust Fund, until applied in payment ofthe cost of Equipment as provided in the Lease, shall be held in trust by the Lessee and shall be subject to a lien and charge in favor ofthe Lessor and shall not be subject to any lien or pledge in favor of any person other than Lessor. Lessee does hereby irrevocably pledge the Major Equipment Replacement Trust Fund to payment of its obligations under the Lease in accordance with the terms thereof. Section 7: Further Action. The proper officers of the Lessee are hereby authorized, empowered and directed to take all such further action and to execute such additional documents as they deem advisable to carry out the purposes of this Resolution. Section 8: Severability of Invalid Provisions. If anyone or more ofthe covenants, agreements or provisions contained in this Resolution or the Lease-Purchase Agreement, or any other document or agreement hereby authorized shall be held contrary to any express provision oflaw, 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 separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any ofthe other provisions hereof or ofthe Lease-Purchase Agreement, or any other document or agreement hereby authorized. Section 9: Succession of Officer of Lessee; Performance of Duties. In the event that the office of any officer ofthe Lessee mentioned in this Resolution shall be abolished or any two or more of such offices shall be merged or consolidated, or in the event of a vacancy in any such office by reason of death, resignation, removal from office or otherwise, or in the event any such officer shall become incapable of performing the duties of his/her office by reason of sickness, absence from the Lessee or otherwise, all powers conferred and all obligations and duties imposed upon such officer shall be performed by the officer succeeding to the principal functions thereof or by the officer upon whom such powers, obligations and duties shall be imposed by law. Section 10: Benefit of Resolution Limited. Except as herein otherwise expressly provided, nothing in this Resolution, express or implied, is intended or shall be construed to confer upon any person, firm or corporation other than the Lessee and the Bank (or its assigns) any right, remedy or claim, legal or equitable, under or by reason of this Resolution or any provision thereof, this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit ofthe Lessee and the Bank (or its assigns). 2 Section 11: Successors and Assigns. All the covenants, promises and agreements in this Resolution contained by or on behalf of the Lessee shall bind and inure to the benefit of its successors and assigns, whether so expressed or not. Section 12: Repealing Clause. All resolutions, or parts thereof, or other official actions of the Lessee in conflict with the provisions herein contained are, to the extent of such conflict, hereby superseded and repealed. Section 13: Effective Date. This Resolution shall take effect immediately upon adoption. The foregoing Resolution was moved for adoption by Councilmember fid . The motion was seconded by Councihnember 0/ i h.d and. upon being put into a vote, the vote was as follows: Mayor Walter Barnes Vice-Mayor Ben A. Bishop Councilmember Joe Barczyk Councilmember James Hill Councilmember Edward J. Majcher, Jr. The Mayor thereupon declared this Resolution duly passed and Adopted this 14th day of February, 2001. CITY OF SEBASTIAN, FLORIDA (SEAL) By: W 01(11) ~ Walter Barnes, Mayor ATTEST: .... --- ~L Ok'i;- 3 EXHIBIT A Description of Equipment 2 Dump Trucks 1 Grader 1 Vac Truck 2 Backhoes 1 Sweeper 1 Lull OR103185;1 EXHIBIT B Bank Proposal See Attached ORI03185;1 ~qf# KISLAK V(J~ NATIONAL BANK February 2, 200] Mr. Mark C. Mason, CPA Finance Director City of Sebastian City Hall, ] 225 Main Street Sebastian, FL 32958 Dear Mr. Mason: The following is the Kislak National Bank proposal for fixed rate financing forthe capital equipment which the City of Sebastian anticipates acquiring. LESSOR: Kislak National Bank, Miami Lakes, Florida LESSEE: City of Sebastian, Florida EOUIPMENT: 2 Dump Trucks, ] Grader, ] Vac Truck, 2 Backhoes, 1 Sweeper, and] Lull AMOUNT TO BE FINANCED: Up to $],000,000; Initially $900,000 ESTIMATED CLOSING DATE: March], 200] EOUIPMENTFINANCING VEHICLE: It is proposed that the parties utilize the Master Lease-Purchase Agreement. Under such an arrangement, the Lessee would be able to obtain additional leased equipment under the same basic terms and conditions as originally agreed to without having to negotiate and execute a new contract. Under this structure, there would be no covenant to budl!et and appropriate and no revenue pledl!e. The lease-purchase would not be considered 10DI! term debt. LEASE TERM: Seven (7) years LEASE COMMENCEMENT DATE: The Lease Term wiIl commence upon the funding of the Lease (payment to vendor) or the funding of the lease into a trust account. TRUST ACCOUNT: TRUST ACCOUNT: The entire lease proceeds would be deposited by the Bank into a City owned Trust Account prior to the delivery of the Equipment. The Trust Account, to be held by the City, would be established at the City's discretion. The Lease Term would commence on the date that the Trust Account is funded, with lease amortization commencing at that point. This alternative would allow the City to lock in an interest rate up front when the Trust Account is funded. The account will be designated in the Lease to be used solely for payment of the Equipment. Upon presentation of an invoice and a certificate of acceptance from the City, the Bank wiIl authorize payment to be made to the vendor(s) from the Trust Account. The Trust Account may also be used to reimburse the City for equipment previously purchased. The bank only requires that invoices be submitted substantiating the expense. There are no bank fees for the Trust Account. The Trust Account may be established at any institution the City selects. This is an informal arrangement between the Bank and the City. TERMS OF LEASE: The Lessee will make periodic lease payments sufficient to pay the debt service on the obligation during each year the Lease is in effect and not terminated by an event of non-appropriation. The obligation to make lease payments during any fiscal year wiIl be limited to legally available revenues appropriated for such purpose by the Lessee. After the last scheduled payment, the City will own the asset free and clear. 713 Pinar Drive, Orlando, FL 32825 . Tel: 407.207.9192 . Fax: 407.207.9193 . Toll Free 877.759.5253 City of Sebastian Page 2 February 2,2001 BANK OUALIFIED INTEREST RATE: Seven (7) Year Term 4.85% The interest rate will be fixed through 3/15/2001. After 3/15/2001, the interest rate will be indexed to 61 % of the change in the 5 year US Treasury note as published in the Wall Street Journal. The 5 year US Treasury note is currently 4.85% as published in the February 2, 2001 Wall Street Journal. After execution of the Lease, the Interest Rate may be adjusted in the event of a change in income tax rates or other laws or regulations affecting the after-tax yield to the Bank. PERIODIC RENTS: Periodic Rents are to be made monthly, quarterly or annually in advance or in arrears. An amortization schedule for annual payments in arrears is included. TAX-EXEMPT STATEMENT: The parties anticipate that the Agreement will qualify as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code. PREPAYMENT SCHEDULE: Prepayments may be,made in whole or in paI1; without penalty per the amortization schedule to be included in the documentation package. SALES AND USE TAX: Lessee will pay all fees, assessments, sales, use, property, and other taxes imposed upon Lessor, resulting from the lease of the equipment. INSURANCE: Prior to Lease Commencement Date, Lessee, at its sole cost and expense, will provide risk, physical damage and liability insurance with the Lessor named as "Loss Payee" and "additionally insured", in accordance with its normal standards, which may include self-insurance. TITLE TO EOUIPMENT: Title shaH atall times remain in the name of the Lessee. FINANCIAL STATEMENTS: Lessee will furnish financial statements on an annual basis, as well as unaudited financial information and other supplementary information, which the Bank may request. AdditionaHy, the Lessee wiil submit a copy of its annual budget within 45 days after the budget has been adopted. DOCUMENTATION: To be provided by the Bank. As is customary, the Lessee's local counsel will be required to provide an opinion letter. TRANSACTION EXPENSES: Lessee shall be responsible for fees and expenses incurred by it. No other bank fees or expenses will apply. MATERIAL ADVERSE CHANGE: At any time prior to completion of funding, Lessor reserves the right to withdraw any approval in the event that Lessor determines that there has been a material adverse ~hange in the financial condition of the Lessee or in its ability or willingness to meet its obligations under this Proposal. EXPIRATION OF PROPOSAL: This proposal expires unless accepted on or prior to March 31, 2001. City of Sebastian, FL Page 3 February 2,2001 APPROVAL: This proposal does not constitute a commitment to lend. Bank credit approval will be expeditiously obtained. The contents of this proposal represent the Bank's indication of the terms and eonditions that it deems appropriate based upon the information available as ofthe date hereof. If the terms of this proposal are acceptable to you, please execute below and return the original to me. . Thank you again for the opportunity to be of service and to present this proposal for your consideration. Should you have any questions, please feel free to contact me at (407) 207-9192 or toll free at (877) 759-5253 Best Regards, it ,,' fh A/UN /' .,fl Wf14: ii!tlil/tVl-Lj Denise Beauchamp Senior Vice President CC: Mr. Jeff Larson, Managing Director, Hanifen, Imhoff Proposal accepted this _ day of ,2001. CITY OF SEBASTIAN, FL By: Title: