Item X1
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: November 20. 2002
Division:INDUSTRIAL DEVELOPMENT AUTHORITY
Bulk Item: Yes No ---..X.- Department:INDUSTRIAL DEVELOPMENT AUTHORITY
AGENDA ITEM WORDING:
Approval of an Amended and Restated Trust Indenture, an Amended and Restated Loan Agreement,
and an Amended and Restated Mortgage and Security Agreement for the Series 1995 Revenue Bonds
for the North Key Largo Utility Corporation Project.
ITEM BACKGROUND:
This resolution relates to the Authority's outstanding Industrial Development Revenue Bonds (North
Key Largo Utility Corp. Project), Series 1995, which were issued by the Authority on behalf of North
Key Largo Utility Corp. in March of 1995. In order to allow the Utility more flexibility in issuing other
indebtedness in the future, the Utility is seeking to amend certain provisions of three financing
documents that were executed in 1995 in connection with the issuance of the Bonds. The Authority, as
the conduit bond issuer, was a party to the original documents. This resolution approves the forms of
an Amended and Restated Trust Indenture, an Amended and Restated Loan Agreement, and an
Amended and Restated Mortgage and Security Agreement and authorizes the Chair of the Authority
and the Secretary of the Authority to execute such documents. These new documents do not increase
any liability or exposure to the Authority or the County. Bond Counsel to the Authority has reviewed
and commented to the resolution and the documents.
PREVIOUS RELEVANT BOCC ACTION:
As stated above.
CONTRACT/AGREEMENT CHANGES:
Approval of Amended and Restated Trust Indenture, an Amended and Restated Loan Agreement, and
an Amended and Restated Mortgage and Security Agreement.
STAFF RECOMMENDATIONS:
Approval.
TOTAL COST: -0-
COST TO COUNTY:
BUDGETED: Yes
No
-0-
REVENUE PRODUCING: Yes
No
AMOUNT PER MONTH_ Year
APPROVED BY: County Atty ~ OMB/Purchasing _ Risk Management _
And 'D\lfOved bv Bond couns~ "'-- ,{ ---------.... () I'
DIVISION DIRECTOR APPROVAL: ~ ~
-
James L. Roberts
DOCUMENTATION:
Included X
To Follow_
Not Required_
AGENDA ITEM #
XI
DISPOSITION:
Revised 2/27/0 I
RESOLunON NO. 2882
A RESOLUTION OF THE MONROE COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY PERTAINING TO THE OUTSTANDING IN DUS1'RIAL
DEVELOPMENT REVENUE BONDS (NORTH KEY LARGO UnUTV CORP.
PROJECT), SERIES 1995; AUTHORIZING THE EXECUTION AND DIUVERY
OF AN AMENDED AND RESTATED TRUST INDENTURE, AMENDED AND
RESTATED LOAN AGREEMENT AND AMENDED AND RESTATED MORTGAGE
AND SECURITY AGREEMENT WITH RESPECT TO THE BONDS; AND
PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE MONROE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY:
Section 1_ AUTHORITY FOR RESOLUTION. This resolution is adopted pursuant to
Chapter 159, Part III, Florida Statutes, and other applicable provisions of law (collectively, the
"Act").
Section 2. DEFINmONS. Unless the context otherwise requires, the terms used in this
resolution shall have the meanings speclfled in the Amended and Restated Trust Indenture (the
"Indenture"), Amended and Restated Loan Agreement (the "loan Agreement") and Amended and
Restated Mortgage and Security Agreement (the "Mortgage") attached hereto as Exhibits A, Band
C, respectively.
Section 3.
ANDINGS. It is hereby ascertained, determined and declared as follows:
A. The Monroe County Industrial Development Authority (herein, the "Issuer"), issued its
$3,400,000 Industrial Development Revenue Bonds (North Key Largo Utility Corp. Project), Series
1995, on March 9, 1995, and $3,132,000 of such bonds (the "Bonds") are outstanding on the
date hereof.
B. The Bonds were issued by the Issuer pursuant to that certain Trust Indenture, dated as
of March 1, 1995, between the Issuer and First Union National Bank of Florida (now Wachovia
Bank, National Association), as trustee and the proceeds thereof loaned to North Key Largo Utility
Corp. (the "Borrower"), a Florida not-for-profit corporation, pursuant to that certain Loan
Agreement, dated as of March 1, 1995, between the Issuer and the Borrower for the purpose of
financing the cost of the acquisition and construction of a wastewater collection, transmission,
treatment and disposal system and other wastewater Improvements to be owned by the
Borrower.
C. To evidence its obligation to pay the amounts due under the Loan Agreement, the
Borrower executed and delivered its Series 1995 Promissory Note issued in the principal amount
of the Bonds, payable to the order of the Issuer, dated March 9, 1995, which was assigned by the
Issuer to the Trustee as security for the Bonds. The Loan Agreement and the Series 1995
Promissory Note require repayments calculated to fully fund the payment of the prlndpal of and
interest on the Bonds, when due, and certain other amounts due under the Loan Agreement. The
Bonds are further secured by that certain Mortgage and Security Agreement, dated as of March 1,
1995, between the Borrower and the Issuer, which was assigned by the Issuer to the Trustee and
pursuant to which the Borrower granted a mortgage on and security interest in the mortgaged
property as described In the Mortgage and Security Agreement, which was recorded on April 27,
1995, in the OffiCial Records Book 1350, Page 2297, Public Records of Monroe County, Florida.
D. The Indenture and the Loan Agreement provide for the issuance of Additional Bonds
subject to the conditions set forth in Section 2.04 of the Indenture. The Loan Agreement provides
in Section 3.9 that the Borrower may not issue other obligations or evidence of indebtedness the
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payment of which is secured by a pledge of the Utility Revenues unless such pledge is
subordinated to the lien of the holders of the Bonds.
E. The Borrower desires to amend the Loan Agreement, Indenture and Mortgage and
Security Agreement to provide for the incurrence of Parity Debt from time to time that is secured
by a lien upon and pledge of the Utility Revenues on a parity with the Bonds pursuant to the
provisions set forth in the Amended and Restated Loan Agreement, the Amended and Restated
Trust Indenture, and the Amended and Restated Mortgage and Security Agreement, attached
hereto as Appendices A, Band C, respectively.
Section 4, AUTHORIZATION OF EXECUnON AND DEUVERY OF AMENDED AND
RESTATED LOAN AGREEMENT, AMENDED AND RESTATED TRUST INDENTURE AND AMENDED AND
RESTATED MORTGAGE AND SECURI1Y AGREEMENT. The Amended and Restated Loan
Agreement, Amended and Restated Indenture and Amended and Restated Mortgage and Security
Agreement (collectively, the "Bond Documents"), in substantially the forms attached hereto as
Appendices A, Band C, respectively, with such changes, insertions and corrections as may be
approved by the Chairman of the Issuer (the .Chairman"), upon the recommendation of counsel
to the Issuer, such approval to be presumed by his execution thereof, is hereby approved,
effective upon approval of the holders of the Bonds in the requisite number set forth in the
Indenture; and the Issuer hereby authorizes and directs the Chairman and Secretary of the
Issuer, to execute and attest under the official seal, if any, of the Issuer, such Bond Documents,
all of the proviSions of which, when executed and delivered by the Issuer as authorized herein
and by the other parties thereto, shall be deemed to be a part of this resolution as fully and to
the same extent as if incorporated verbatim herein.
Section 5. NO PERSONAL LIABILITY. No covenant, stipulation, obligation or agreement
herein contained or contained in the Bond Documents shall be deemed to be a covenant,
stipulation, obligation or agreement of any member, agent or employee of the Issuer and/or the
County in his or her individual capacity, and neither the members of the Issuer nor any officer
thereof executing the same shall be liable personally thereon or on the Bonds or the Outstanding
Parity Debt or be subject to any personal liability or accountability by reason of the issuance of
the Bonds or the Outstanding Parity Debt.
Section 6. NO THIRD PARlY BENEFICIARIES. Except as herein or in the Bond
Documents otherwise expressly provided, nothing in this resolution or in the Bond Documents,
expressed or implied, is intended or shall be construed to confer upon any person or firm or
corporation other than the Issuer, the Borrower, the holders of the Bonds and the Trustee any
right, remedy or claim, legal or equitable, under and by reason of this resolution and the Bond
Documents; this resolution, the Bond Documents intended to be and being for the sole and
exclusive benefit of the Issuer, the Borrower, the holders from time to time of the Bonds and the
Trustee.
Section 7. GENERAL AUTHORITY. The members, officers, attorneys or other agents or
employees of the Issuer are hereby authorized to do all acts and things required of them by this
resolution and the Bond Documents, or desirable or consistent with the requirements hereof or
such documents, including the full, punctual and complete performance of all the terms,
covenants and agreements contained in the Bond Documents and this resolution.
Section 8. UMITED OBLIGATIONS. The Bonds and the interest thereon shall not
constitute an indebtedness or pledge of the general credit or taxing power of Monroe County, the
State of Florida or any political subdivision or agency thereof but shall be payable solely from the
revenues pledged therefor pursuant to the Amended and Restated Loan Agreement, the Amended
and Restated Trust Indenture and the Amended and Restated Mortgage and Security Agreement.
The Issuer has no taxing power.
4015oR-AUIIl.Res.1
2
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Section 9. LIMITED APPROVAL. The approval given herein shall not be construed- as (i)
an endorsement of the creditworthiness of the Borrower or the financial viability of the Project,
(ii) a recommendation to any prospective purchaser of the Bonds, (iii) an evaluation of the
likelihOOd of the repayment of the debt service on the Bonds, or (iv) an approval of any necessary
rezoning applications nor for any other regulatory permits relating to the Project and the
Authority shall not be construed by reason of its adoption of this resolution to have made any
such endorsement, finding or recommendation or to have waived any of the County's or Issuer's
rights or estopping the County or the Issuer from asserting any rights or responsibilities it may
have in that regard.
Section 10. SEVERABIUTY OF INVAUD PROVISIONS. If anyone or more of the
covenants, agreements or provisions herein contained shall be held contrary to any express
provisions of law or contrary to the policy of express law, though not expressly prohibited, 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 of
the other provisions hereof or of the Bonds.
Section 11. REPEALING CLAUSE. All resolutions or parts thereof of the Issuer in conflict
with the provisions herein contained are, to the extent of such conflict, hereby superseded and
repealed.
Section 12. EFFECTIVE DATE. This resolution shall take effect immediately upon its
adoption.
PASSED AND ADOPTED by the Governing Board of the Monroe County Industrial
Development Authority at a regular meeting held on the 20th day of November, 2002
(SEAL)
A1TEST:
GOVERNING BOARD OF THE MONROE COUNlY
INDUSTRIAL DEVELOPMENT AUTHORfTY
By
By
Clerk/Secretary
Chairman
JdreslOANKL.2
401 >R-Aulh-Res..l
3
LAw OFFICES
ROSE, SUNDSTROM & BENTLEY, LLP
2548 BWRSTONE PINES DRIVE
TALLAHASSEE, FLORIDA 32301
RECEIVED
OCT 2 3 L002
CHRIS H. BENTLEY, P.A.
ROBERT C. BRANNAN
F. MARsHALL DETERDING
M.umN S. FRIEDMAN, P.A.
JOHN R. JENKINS, P.A.
STEVEN T. MINDUN, P.A.
DAREN 1. SHIPPY
WILLIAM E. SUNDSTROM, P.A.
DIANE D. TREMOR, P.A.
JOHN L. WHARTON
ROBERT M. C. ROSE, OF COUNSEL
WAYNE 1. SCHIIijEj.BEINy OFCOUNspL R b t
lVlr. James L. 0 er s
County Administrator
MOP.Ioe Countv
J
5100 College Road
Kev West, Florida 33040
J
(850) 877-6555
Fax (850) 656-4029
www.rsbattorneys.com
October 18,2002
COUNTY AOrvllNISTRATOR
ENTRAL LORIDA
650 S. NORTH .lAKE BLVD., SUITE 420
ALTAMONTE SPRINGS, FLORDA 32701
(407) 830-6331
FAX (407) 830-8522
Re: North Key Largo Utility Corp.;
Bond Document Amendments
Our File No. 30026.05
Dear .Tun:
In 1995: tr'uough the sponsorship of MOllJ"oe County, North Key Largo Utility Corp.
issued its $3,400,000 Industrial Development Revenue Bonds, Series 1995 to fund the
acquisition and upgrade of the wastewater facility serving the Ocean Reef area of Key
Largo. Si!1ce that tinle the Company has e::;tablished a track record of quality wastewater
service and fiscal responsibility including timely payments to all bondholders.
As you are aware, in cooperation with the current Aqueduct Authority program of
water line replacement in the Ocean Reef area, the Utility is completing the installation of
a collection and transmission system to provide central wa!=:tp.wat~r service to 266 homes
currently served by septic tanks. The Company is grateful for County efforts to secure
State grant funds to offset the substantial cost of this project to local homeowners. In order
to meet FKAA I S construction schedule the Company ,.vas required to borrow $4,000,000
to finance the collection and transmission system construction, to be repaid by customers
upon connection to the central wastewater service.
This transaction highlighted the fairly restrictive language in the Company I 5 Series
1995 bond documents regarding issuance of additional debt. Specifically, the Company
was required to subordinate the $4,000,000 borrovv"ing, which in turn required a guarantee
bv related narties, all of which would have been unnecessary with a more customarv
.. ... J.I
additional bonds test in the documents. Enclosed is an excerpt from the amendment to the
bond documents which provides for issuance of parity debt based on a standard debt
Mr. James L. Roberts
October 18, 2002
Page 2
service coverage test. With this additional debt test, the Company will be able to rely on
its own financial strength to incur future debt. Under such test, the Company must be able
to demonstrate that revenues will support repayment of the new debt as well as continued
timely payments to the existing bondholders. This provision is common in municipal bond -
documents, and may be used by the County in its financing documents.
The Company comes now to the County and the bondholders to approve this
change for two reasons. First, the entire $4,000,000 short term borrowing to ftmd the
current collection system program may not be repaid by the customers this year. In that
case, the Company would like to be in a position to refinance the remaining debt. Second,
it can be anticipated that future capital improvements to the wastewater facilities to
upgrade treatment or extend service will be required, and the Company must plan now
for future borrowings to fund these projects. Prudent management dictates that the
Company know the terms and conditions under which it can borrow money.
We believe the document change will contribute to the Company's financial
stability and allow for future financings similar in structure to those undertaken by other
utility service providers. We further believe the bondholders, most of whom reside in Key
Largo, will support this change based on their confidence in Utility operations, and their
interest in continued protection of the environment in the Keys. I hope this letter is helpful
in your understanding of our request. Following your review, please schedule this matter
for consideration by the Commission. In the meantime should you or other members of
the Commission or County staff have any questions regarding these matters, please feel
free to contact Paul Winkeljohn at 305-367-3067 or me at 1-888-877-6555. Thank you for
your attention to this matter.
Sincerely,
JRJ :wjl
Enclosures
cc: Mr. Danny Kolhage
Rob W oIfe, Esq.
Steve Miller, Esq.
Mr.PaulWinkeljohn
Mr. David Ritz
Northkey\2002 Bond Doc Amends\Robertsl01802ltr
q~~ft--
For the Firm
Rose. Sundstrom & Bentley. LLP
25-iH fllairstone Pines Drive. Tallahassee. Florida .'>230 I
8. A written opinion of counsel to the Borrower, reasonably satisfactory to
the Trustee, to the effect that the amendments or supplements to the
Agreement and any Additional Notes have been duly authorized, executed
and delivered by the Borrower; and that those documents, as so amended
or supplemented, and any Additional Notes constitute legal, valid and
binding obligations of the Borrower, enforceable in accordance with their
respective terms, subject to exceptions reasonably satisfactory to the
Trustee for bankruptcy, insolvency and similar laws and the application of
equitable principles.
Notwithstanding the foregoing, no series of Additional Bonds shall be issued
unless immediately following the issuance of such Additional Bonds, the Borrower is in
compliance with all terms, conditions and covenants of the Agreement.
When the documents listed above have been received by the Trustee, and the
Additional Bonds have been executed and authenticated, the Trustee shall deliver the Additional
Bonds to or on the order of the Original Purchaser thereof, but only upon payment to the Trustee
of the specified amount (including without limitation, any accrued interest) set forth in the
request and authorization to which reference is made in paragraph 5 above.
SECTION 2.05. Parity Debt. Notwithstanding anv other provisions of this
Indenture. the Bon-ower. upon satisfaction of those conditions specified below. mav incur Parity
Debt from time to time for any lawful pU1:pose.
A. The obligations evidencin2: an issue of Parity Debt shall be on a parity with
the Series 1995 Bonds and any Additional Bonds or Parity Debt theretofore or thereafter issued
and outstanding as to the assiQ11ment to the Trustee of the Issuer's right. title and interest in the
Revenues. the Agreement. the Bond Fund and the monevs and investments therein.
B. Prior to the issuance of any Parity Debt. the following conditions shall be met:
1. There shall have been obtained and filed with the Issuer and the Trustee a
certificate of an independent certified public accountant: (a) stating that the books and records of
the BOITower relating to the collection and receipt of Utilitv Revenues have been reviewed bv
him: (b) statim); that the Net Utility Revenues for any 12 consecutive months out of the 24 month
period imrnediatelv preceding the proposed date of delivery of such Parity Debt with respect to
which such certificate is made. equal at least 1.1 () times the Maximum Debt Service Requirement
on (i) all Bonds. Additional Bonds. if any. and Paritv Debt. if any. then outstanding and (in the
Paritv Debt with respect to which such certificate is made. taking into account any adjustments
made by the Consulting Engineers pursuant to paragraph (2) below.
2. If desirable. the Net Revenues for such 12 month period mav be adjusted by
the Consulting Engineers as follows: (a) to reflect for such period chang:es made in the rates.
fees. rentals or other charges for the operation of the System during the nreceding 24 months:
and (b) to reflect any change in such Net Utility Revenues caused bv any new customers of the
System havin2: been provided service subsequent to the date of commencement of such
preceding period and prior to the date of such certification provided for in paragraph (1) above.
32 'C - .'/10:::;:)8::': :1'11.'8'::1' I~IDlJiJT_":'_::; :; 10 15-TI-Amended-Rest;Jted
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3. The annual average of Net Utility Revenues. as estimated in writing by the
Consultin~ En~neers. to be derived by the Borrower from the operation of the System in each of
the 3 vears immediatelv succeedinl! the estimated date of completion and placing in operation of
the proiect to be financed by the issuance of such Paritv Debt. will equal at least 1.10 times the
Maximmn Debt Service Requirement on (a) all Bonds. Additional Bonds. if anv. and Parity
Debt. if anv. then outstanding and (b) the Parity Debt with respect to which such certificate is
made.
4. The Borrower shall not be in breach of its covenants and obligations assumed
hereunder and under the Agreement. nor shall any Event of Default hereunder have occurred or
be continuin~. and all payments herein required to have been made into the funds and accounts,
as provided hereunder. shall have been made to the full extent required.
5. The conditions specified in paragraphs 1. 2 and 3 above are not applicable to
Paritv Debt issued to refund outstanding Parity Debt as 10nf? as the issuance of such Parity Debt
does not result in an increase in the agf!fel!ate amount of debt service pavments that would
otherwise be due on the outstanding Bonds and Parity Debt in the current and all subsequent
years.
1. Copies of the financing documents entered into hv the Borrower in
connection with the Parity Debt which are necessarv to provide that the Parity Debt will be
issued in compliance with Section 2.05 of this Indenture.
2. A written opinion of counsel to the Bon'ower or Bond Counsel. to the
effect that all conditions precedent to the delivery of the Purity Debt under this Indenture have
been fulfilled. and that the Parity Debt and all obligations with respect to the payment thereof
constitute lel!al. valid and binding obligations of the Borrower. enforceable in accordance with
their respective terms. subject to exceptions reasonably satisfactorv to the Trustee for
bankmptcv. insolvency and similar laws and the application of equitable principles.
No1Withstanding the foregoiIH!. no Paritv Debt shall be issued unless immediately
following such issuance, the Borrower is in compliance with all terms. conditions and covenants
of the Loan A1..1J'eement.
(End of Article II)
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