08/19/2009 Agreement
DANNY L. KOLHAGE
CLERK lJF THE CIRCUIT COURT
DA TE:
August 27, 2009
TO:
Judy Clarke, Engineering
Public Works Division
Pame/aG. HanC~c.
FROM:
At the August 19, 2009, Board of County Commissioner's meeting the Board granted
approval andl authorized execution of the Clean Water State Revolving Fund Loan Agreement
WW 602090 between Monroe County and Florida Water Pollution Control Financing
Corporation, in the amount of $20,134,400 to fund the construction of the Big Coppitt
W astewater ~rreatment Plant and Geiger/Rockland Key collection systems.
Enclosed are three duplicate originals of the above-mentioned, executed on behalf of
Monroe Cou:nty, for your handling. Please be sure to return the fully executed "Monroe County
Clerk's Office Original" and the "Monroe County Finance Department's Original" as soon as
possible. Should you have any questions please do not hesitate to contact this office.
cc: County Attorney
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FLOI{IDA WATER POLLUTION CONTROL FINANCING CORPORATION
AND
MONROE COUNTY, FLORIDA
CLEAN WATER ST ATE REVOLVING FUND
LOAN AGREEMENT
WW602090
Florida Water Pollution Control Financing Corporation
1801 Hermitage Boulevard
Tallahassee, Florida 32308
CLEAN WATER ST ATE REVOLVING FUND LOAN AGREEMENT
CONTENTS
PAGE
AR TI CLE I - lD EFINITI 0 NS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . · · . . . · · . . · · . · . · · . . · · · · · · · . · · · . · · · · · · · · · · 2
1.01. W (J R DS AND TERMS. .......................................................................................................... 2
1.02. C () RRE LA TIVE WORDS....................................................................................................... 4
ARTICLE II - WARRANTIES, REPRESENTATIONS AND COVENANTS......................................4
2.01. GI~NERAL WARRANTIES, REPRESENTATIONS AND COVENANTS ......................4
2.02. TPlX WARRANTIES, REPRESENTATIONS AND COVENANTS .................................6
2.03. LE,GAL AUTHORIZATION.... ............................................................................................ 12
2.04. A1JDIT AND MONITORING REQUIREMENTS. ...........................................................12
ARTICLE III .. LOAN REPAYMENT ACCOUNT ...............................................................................15
3.01. LC)AN DEBT SERVICE ACCOUNT. .................................................................................15
3.02. INVESTMENT OF LOAN DEBT SERVICE ACCOUNT MONEYS. .............................16
3.03. LC)AN DEBT SERVICE ACCOUNT WITHDRAW ALS..................................................16
3.04 . A~;S ETS HE L D IN TR US T. .................................................................................................. 1 6
ARTICLE IV .. PROJECT INFORMATION. .............. .................. .......................... ................ ................ 16
4. 01. PF~ 0 JECT CHANGES........................................................................................................... 16
4.02. TI'fLE TO PROJECT SITE. ................................................................................................... 16
4.03. P:E~RMITS AND APPROVALS. ........................................................................................... 16
4. 04. El'~ GINEERIN G SERVICES................................................................................................. 17
4.05. PF~OHIBITION AGAINST ENCUMBRANCES. .............................................................. 17
4.06. C() MPLETIO N MONEYS. .................................................................................................. 1 7
4.07. CI~OS E-O UT. ......................................................................................................................... 1 7
4.08. LC) AN DISBURSEMENTS................................................................................................... 1 7
ARTICLE V - RATES AND USE OF THE SEWER SYSTEM.............................................................. 18
5.01. RI~S ER VE D. ........................................................................................................................... 1 8
5.02. N () FREE SERVICE. ............................................................................................................. 18
5.03. M.AND A TOR Y CONNECTIONS....................................................................................... 18
5.04. RI~SERVED. ........................................................................................................................... 18
5.05. M.AINTENANCE OF THE SEWER SYSTEM. ..................................................................18
5.06. Al)DITIONS AND MODIFICATIONS. ............................................................................ 19
5.07. C()LLECTION OF REVENUES. ...... ....... ..................... .................. ........... .......................... 19
ARTICLE VI .- DEFAULTS AND REMEDIES ......................................................................................19
6.01. E\TENTS OF DEFAULT. ...................................................................................................... 19
6. 02. R I~ ME DIES. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.03. D lJLA Y AND WANER. ...................................................................................................... 21
ARTICLE VII - THE PLEDGED REVENUES....................................................................................... 21
7.01. SlJPERIORITY OF THE PLEDGE TO THE CORPORATION. ......................................21
7.02. A]) D ITI 0 N A L DEBT 0 B LI G A TI 0 NS. ............................................................................. 21
ARTICLE VIII - GENERAL PROVISIONS.. ................. ............ ..... ...................... ................. ..... ........... 21
8.01. DISCHARGE OF QBLIGA TIONS. ..................................................................................... 21
8.02. PROJECT RECORDS AND STATEMENTS. .....................................................................22
8.03. A C:CESS TO PROJECT SITE................................................................................................ 22
8.04. ASSIGNMENT OF RIGHTS UNDER AGREEMENT......................................................22
8.05. AMEND MENT 0 F AGREEMENT. ................................................................................... 22
8.06. Al\INULMENT OF AGREEMENT..................................................................................... 23
8.07. SE'VERABILITY CLAUSE. ................................................................................................... 23
ARTICLE IX -. CONSTRUCTION CONTRACTS AND INSURANCE.............................................23
9.01. AlJTHORIZATION TO AWARD CONSTRUCTION CONTRACTS. ..........................23
9.02. SlJBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS. ..............................23
9.03. INSURANCE REQUIRED. ........ .... ... ..... ... ... .... .................. ......... ............... .... ......................23
ARTICLE X - DETAILS OF FINANCING............. ............................................ .................. .................24
10.01. P~~INCIP AL AMOUNT OF LOAN. .......... ....... .......... ........................................................24
10.02. LC) AN SERVICE FEE. .......................................................................................................... 24
10.03. FI]~ AN CIN G RATE.............................................................................................................. 25
10.04. LC) AN TERM......................................................................................................................... 25
10.05. RI~P A YMENT SCHEDULE. ................................................................................................ 25
10.06 . PROJECT COSTS. ................................................................................................................. 25
10.07. PF~ 0 JECT SCHEDULE. ........................................................................................................ 26
10.08. SP'ECIA L CONDITIONS. .................................................................................................... 26
ARTICLE XI.. EXECUTION OF AGREEMENT.............................. ......... ...... ...... ............ ............ .......27
11
C:LEANWATER STATE REVOLVING FUND LOAN AGREEMENT
WW602090
THIS .AGREEMENT is executed by the FLORIDA WATER POLLUTION CONTROL
FINANCING CORPORATION (the "Corporation") and MONROE COUNTY, FLORIDA (the
"Local Borro~Ner"), existing as a local governmental agency under the laws of the State of
Florida.
WITNESSETH:
WHEI~EAS, pursuant to Sections 403.1835 and 403.1837, Florida Statutes (the "State
Act"), the Corporation is authorized to make loans to local government agencies to finance or
refinance the construction of wastewater pollution control facilities, the planning and design of
which have been reviewed by the State of Florida Department of Environmental Protection (the
"DepartmentJl); and
WHEI~EAS, in accordance with the provisions of the State Act and a Service Contract
dated as of Jl1ne 1, 2001 (as amended from time to time, the "Service Contract") between the
Corporation and the Department, the Department has responsibility for the performance of
various activities in connection with such loans; and
WHE]~EAS, the Local Borrower has made application for the financing of the Project (as
hereinafter defined), and the Corporation and the Department have determined that such
Project meets all requirements for a loan and have agreed to make a loan to the Local Borrower
as set forth in this Agreement (the "Loan"); and
WHE]~EAS, in accordance with the provisions of a Master Trust Indenture dated as of
June 1, 2001 (as supplemented and amended from time to time, the "Indenture") between the
Corporation cmd U.s. Bank Trust National Association, as trustee (together with any successor
trustee, the "~rrustee"), the Corporation is authorized to issue bonds (the "Bonds") from time to
time to fund loans pursuant to the State Act and to refund bonds issued by the Corporation;
and
WHE]~EAS, the Loan and all payments of principal and interest thereon, including
prepayments" and all proceeds thereof, but excluding the Loan Service Fee (as such term is
hereinafter defined), have been pledged and assigned to the Trustee under the Indenture as
security for tile payment of principal of, premium, if any, and interest on the Bonds; and
WHEJREAS, pursuant to the provisions of the State Act, the Service Contract and the
Indenture, alld as provided herein, the Corporation and the Department will cooperate to
assure contilluing compliance with the various requirements and separate duties and
responsibilities arising from the issuance of the Bonds and the loans made by the Corporation.
NOW, THEREFORE, in consideration of the Corporation loaning money to the Local
Borrower, in the principal amount and pursuant to the covenants hereinafter set forth, it is
agreed as follows:
ARTICLE I - DEFINITIONS
1.01. WORI)S AND TERMS.
In addition to the words and terms elsewhere defined in this Agreement, the following
words and terms shall have the meanings set forth below:
(1) "Agreement" or "Loan Agreement" shall mean this loan agreement.
(2) "Authorized Representative" shall mean the official or officials of the Local
Borrower autJl10rized by ordinance or resolution to sign documents associated with the Loan.
(3) "Capitalized Interest" shall mean a finance charge that accrues at the Financing
Rate on Loan proceeds from the time of disbursement until six months before the first
Semiannuall,oan Payment is due. Capitalized Interest is financed as part of the Loan principal.
(4) "Code" means the Internal Revenue Code of 1986, the Treasury Regulations
(whether temLporary or final) under that Code or the statutory predecessor of that Code, and
any amendnlents of or successor provisions to, the foregoing and any official rulings,
announcemeIlts, notices, procedures and judicial determinations regarding any of the foregoing,
all as and to the extent applicable.
(5) "Defeasance Obligations" means:
(a) Direct obligations of, or obligations the prompt payment of principal and interest
on which are fully guaranteed by, the United States of America which are not callable prior to
maturity (except at the o.ption of the holder thereof);
(b) Bonds, debentures, notes or other evidences of indebtedness issued or fully
insured or gtLaranteed by any agency or instrumentality of the United States of America which
are backed b)7 the full faith and credit of the United States of America and which are not callable
prior to maturity (except at the option of the holder thereof);
(c) Resolution Funding Corp. (REFCORP) obligations which are not callable prior to
maturity (except at the option of the holder thereof); and
(d) Obligations of any state of the United States of America or of any agency,
instrumentality or local governmental unit of any such state which are not callable prior to
maturity or as to which irrevocable determination to call such obligations prior to maturity shall
have been made by the issuer thereof, and for the payment of the principal of, premium, if any,
and interest ()n which provision shall have been made by the irrevocable deposit with a bank or
trust compaI1Y acting as a trustee or escrow agent for owners of such obligations of securities
described in clauses (a), (b) or (c), the maturing principal of and interest on which, when due
and payable, will provide sufficient moneys to pay when due the principal of, premium, if any,
and interest on such obligations, and which securities are not available to satisfy any other
claim, including any claim of the trustee or escrow agent or of any person claiming through the
trustee or escrow agent or to whom the trustee or escrow agent may be obligated.
2
(6) "Depository" shall mean a bank or trust company, having a combined capital
and unimpaired surplus of not less than $50 million, authorized to transact commercial banking
or savings aJ:'ld loan business in the State and insured by the Federal Deposit Insurance
Corporation.
(7) "Fiscal Year" shall mean the period commencing on October 1 of each year and
ending on Sel,tember 30 of the succeeding year.
(8) "Financing Rate" shall mean the charges, expressed as a percent per annum,
imposed on the unpaid principal of the Loan. The Financing Rate shall consist of an interest
rate component and a Grant Allocation Assessment rate component.
(9) "Grant Allocation Assessment" shall mean an assessment, expressed as a percent
per annum, accruing on the unpaid balance of the Loan. It is computed similarly to the way
interest char~~ed on the Loan is computed and is included in the Semiannual Loan Payment.
After paying or providing for the payment of debt service on the Bonds, the Department will
use Grant Allocation Assessment moneys for making grants to financially disadvantaged small
communities pursuant to Section 403.1835 of the Florida Statutes.
(10) "Loan Application" shall mean the completed form which provides all
information required to support obtaining construction loan financial assistance.
(11) "Loan Debt Service Account" shall mean an account, or a separately identified
component olf a pooled cash or liquid account, with a Depository established by the Local
Borrower for the purpose of accumulating Monthly Loan Deposits and making Semiannual
Loan Paymerlts.
(12) "Loan Service Fee" shall mean an origination fee which shall be paid by the Local
Borrower.
(13)' "Monthly Loan Deposit" shall mean the monthly deposit to be made by the Local
Borrower to the Loan Debt Service Account.
(14) "Non-ad Valorem Revenues" shall mean revenues collected on an annual basis
in accordance with the rules and regulations of the Florida Department of Revenue and the
Florida Statutes which shall benefit the Local Borrower's General Fund; the Law Enforcement,
Jail and Judicial Fund; the Unincorporated Parks and Beaches Fund; and the Planning, Building,
Code and Fire Marshal Fund.
(15) "Pledged Revenues" shall mean the specific revenues pledged as security for
repayment of the Loan and shall be the Non-ad Valorem Revenues derived yearly after the
satisfaction of all yearly payment obligations on account of any senior obligations issued
pursuant to S.ection 7.02 of this Agreement.
(16) "Project" shall mean the works financed by this Loan and shall consist of
furnishing all labor, materials, and equipment to construct the collection, transmission and
treatment facilities in accordance with the plans and specifications accepted by the Departmentafor the follow'ing contracts:
3
(a) "Rockland Key and Geiger Key Collection System"
(b) "Big Cop pitt Wastewater Treatment Plant"
The I>roject is in agreement with the planning documentation accepted by the
Department effective November 20, 2007. Approval of this Project is provided by the Florida
Finding of No Significant Impact dated November 16, 2007 and no adverse comments were
received.
(17) "Semiannual Loan Payment" shall mean the payment due from the Local
Borrower at six-month intervals.
(18) "Sewer System" shall mean all facilities owned by the Local Borrower for
collection, transmission, treatment and reuse of wastewater and its residuals.
(19) "State" means the State of Florida.
(20) "Tax-Exempt Bonds" means Bonds the interest on which is intended on their
date of issuarlce to be excludable from gross income of the holders thereof for feperal income
tax purposes.
1.02. CORB~ELATIVE WORDS.
Words of the masculine gender shall be understood to include correlative words of the
feminine and. neuter genders. Unless the context shall otherwise indicate, the singular shall
include the plural and the word "person" shall include corporations and associations, including
public bodies, as well as natural persons.
ARTICLE II - WARRANTIES, REPRESENTATIONS AND COVENANTS
2.01. GENI~RAL WARRANTIES, REPRESENTATIONS AND COVENANTS
The L'ocal Borrower warrants, represents and covenants that:
(1) The Local Borrower has full power and authority to enter into this Agreement
and to compl:y with the provisions hereof.
(2) The Local Borrower currently is not the subject of bankruptcy, insolvency, or
reorganization proceedings and is not in default of, or otherwise subject to, any agreement or
any law, adIninistrative regulation, judgment, decree, note, resolution, charter or ordinance
which woul(l currently restrain or enjoin it from entering into, or complying with, this
Agreement.
(3) There is no material action, suit, proceeding, inquiry or investigation, at law or in
equity, before any court or public body, pending or, to the best of the Local Borrower's
knowledge, threatened, which seeks to restrain or enjoin the Local Borrower from entering into
or complying' with this Agreement.
4
(4) All permits, real property interests, and approvals required as of the date of this
Agreement have been obtained for construction and use of the Project. The Local Borrower
knows of no reason why any future required permits or approvals are not obtainable.
(5) The Local Borrower shall undertake the Project on its own responsibility, to the
extent permitted by law.
(6) To the extent permitted by law, the Local Borrower shall release and hold
harmless the :5tate, its agencies, the Corporation, and each of their respective officers, members,
and employees from any claim arising in connection with the Local, Borrower's actions or
omissions in its planning, engineering, administrative, and construction activities financed by
this Loan or its operation of the Project.
(7) All Local Borrower representations to the Corporation and the Department,
pursuant to tJne Loan Application and this Agreement, were and are true and accurate as of the
date the LoarL Application and this Agreement were each executed by the Local Borrower. The
financial information delivered by the Local Borrower to the Department was current and
correct as of the date such information was delivered. The Local Borrower shall comply with
Chapter 62-503, Florida Administrative Code, and all applicable State and Federal laws, rules,
and regulatio.ns which are identified in the Loan Application or this Agreement. To the extent
that any aSStlrance, representation, or covenant requires a future action, the Local Borrower
shall take such action as is necessary for compliance.
(8) The Local Borrower shall maintain records using generally accepted
governmental accounting principles established by the Governmental Accounting Standards
Board. As part of its bookkeeping system, the Local Borrower shall keep accounts of the Sewer
System separate from all other accounts and it shall keep accurate records of all revenues,
expenses, an<i expenditures relating to the Sewer System, and of the Pledged Revenues, Loan
disbursement receipts and Loan Debt Service Account.
(9) In the event the anticipated Pledged Revenues are shown by the Local
Borrower's almual budget to be insufficient to make the Semiannual Loan Payments for such
Fiscal Year ",rhen due, the Local Borrower shall include in such budget other legally available
non-ad valorem funds which will be sufficient, together with the Pledged Revenues, to make
the Semiannl1al Loan Payments. Such other legally available non-ad valorem funds shall be
budgeted in the regular annual governmental budget and designated for the purpose provided
by this Subsection, and the Local Borrower shall collect such funds for application as provided
herein. The Local Borrower shall notify the Department immediately in writing of any such
budgeting of other legally available non-ad valorem funds. Nothing in this covenant shall be
construed as creating a pledge, lien, or charge upon any such other legally available non-ad
valorem fundls; requiring the Local Borrower to levy or appropriate ad valorem tax revenues; or
preventing tIle Local Borrower from pledging to the payment of any bonds or other obligations
all or any part of such other legally available non-ad valorem funds.
(10) Each Fiscal Year, beginning three months before the first Semiannual Loan
Payment and ending with the Fiscal Year during which the final Loan repayment is made, the
Local Borrow'er's Authorized Representative or its chief financial officer shall submit, pursuant
to the schedlule established in Section 10.07, a certification that: (a) Pledged Revenues
5
collections satisfy, on a pro rata basis, the rate coverage requirement; (b) the Loan Debt Service
Account contains the funds required; and (c) insurance, including that issued through the
National Flood Insurance Program authorized under 42 U.S.C. secs. 4001-4128 when applicable,
in effect for the facilities generating the Pledged Revenues, adequately covers the customary
risks to the extent that such insurance is available.
(11) Pursuant to Section 216.347 of the Florida Statutes, the Local Borrower shall not
use the Loan proceeds for the purpose of lobbying the Florida Legislature, the Judicial Branch,
or a State agency.
(12) The Local Borrower agrees to construct the Project in accordance with the Project
schedule. Delays incident to strikes, riots, acts of God, and other events beyond the reasonable
control of the Local Borrower are excepted. If for any reason construction is not completed as
scheduled, there shall be no resulting diminution or delay in the Semiannual Loan Payment or
the Monthly l..Joan Deposit.
(13) The Local Borrower covenants that this Agreement is entered into for the
purpose of constructing, refunding,. or refinancing the Project which will in all events serve a
public purpose. The Local Borrower covenants that it will, under all conditions, complete and
operate the Project to fulfill the public need.
(14) The Local Borrower shall take such actions, shall furnish and certify to such
information and execute and deliver and cause to be executed and delivered such documents,
certificates arld opinions as the Corporation and/ or the Department may reasonably require in
connection with the Bonds, including, without limitation, any necessary continuing disclosure
undertaking lneeting the requirements of Securities and Exchange Commission Rule 15c2-12.
2.02. TAX VVARRANTIES, REPRESENTATIONS AND COVENANTS
The Local Borrower acknowledges that the Corporation may issue Tax-Exempt Bonds
with which t() fund the Loan to the Local Borrower and that the maintenance of the tax-exempt
status of any such Tax-Exempt Bonds will depend, in part, on the Local Borrower's compliance
with the pro'visions of this Agreement. Accordingly, the Local Borrower warrants, represents
and covenants that:
(1) Notwithstanding any other provisions of this Agreement, including specifically
Section 2.02(8), if the Local Borrower shall be notified by the Corporation or the Department as
of any date tllat any payment is required to be made to the United States Treasury in respect of
Tax-Exempt Bonds the proceeds of which were used to fund the Loan (hereafter, the
"Applicable lfax-Exempt Bonds"), and such payment is due to the failure of the Local Borrower
to comply with this Agreement, the Local Borrower shall pay to the Trustee (for deposit to the
applicable SlJ.baccount of the Rebate Account established by the Indenture) the amount
specified in tlle notice by the Corporation or the Department.
(2) The Local Borrower is a " governmental person" (as defined in Treasury
Regulations Srl.141-1(b)) (a "Governmental Unit") and it owns and operates the Project.
6
(3) The Local Borrower will not take any action or omit to take any action, which
action or omission will adversely affect the exclusion from gross income of the interest on the
Applicable Tax-Exempt Bonds for federal income tax purposes or cause the interest on the
Applicable Tax-Exempt Bonds, or any portion thereof, to become an item of tax preference for
purposes of the alternative minimum tax imposed on individuals and corporations under the
Code, and in the event of such action or omission, promptly upon having such brought to its
attention, it ",rill take such reasonable actions based upon an opinion of any attorney or firm of
attorneys of recognized standing and experience in the field of municipal bonds whose opinions
are generally accepted by purchasers of municipal bonds and which attorney or firm of
attorneys is acceptable to the Corporation ("Bond Counsel"), and in all cases at the sole expense
of the Local Borrower, as may rescind or otherwise negate such action or omission. The Local
Borrower will not directly or indirectly, use or permit the use of any proceeds of the Applicable
Tax-Exempt Bonds or any other funds of the Local Borrower, or take or omit to take any action,
that would cause the Applicable Tax-Exempt Bonds to be or become "arbitrage bonds" within
the meaning ()f Section 148(a) of the Code or to fail to meet any other applicable requirement of
Sections 141, 148, 149 and 150 of the Code or cause the interest on the Applicable Tax-Exempt
Bonds, or arlY portion thereof, to become an item of tax preference for purposes of the
alternative minimum tax imposed on individuals and corporations under the Code. To that end,
the Local Borrower will comply with all requirements of Sections 141, 148, 149 and 150 of the
Code to the extent such provisions apply to the Applicable Tax-Exempt Bonds. In the event that
at any time the Corporation or the Department is of the opinion that it is necessary to restrict or
limit the yiel(l on the investment of any moneys held by the Local Borrower, the Corporation or
the Department shall so instruct the Local Borrower in writing and the Local Borrower shall so
restrict the yield.
(4) The Local Borrower (or any "related party", as defined in Treasury Regulations
SI.150-1(b)) is prohibited from purchasing and shall not purchase any Applicable Tax-Exempt
Bonds other than purchases in the open market for the purpose of tendering them to the Trustee
for purchase and retirement.
(5) The Local Borrower will take no action, or permit or suffer any action or event,
which will cause any of the Applicable Tax-Exempt Bonds to be or become a "private activity
bond" withiIl the. meaning of the Code. To that end, the Local Borrower will not permit more
than 5% of the Project or portion thereof financed with Tax-Exempt Bonds to be used for a
Private Busirless Use. The term "Private Business Use" means use directly or indirectly in a
trade or business or any other activity carried on by any Private Person other than use as a
member of, and on the same basis as, the general public. The term "Private Person" means any
person other than a Governmental Unit. For this purpose, the United States or any agency or
instrumentality thereof is not a Governmental Unit and is therefore a Private Person. For
purposes of this paragraph (5), property is considered "used" by a Private Person if:
(i) it is owned by, or leased, to such Private Person;
(ii) it is operated, managed or otherwise physically employed, utilized or
consumed by such Private Person, other than operation or management pursuant to an
agreelnent that meets the conditions described in paragraph (6) below;
7
(iii) capacity in or output service from such property is reserved or committed
to such Private Person under a take-or-pay, output, incentive payment or similar
contra.ct or arrangement;
(iv) such property is used to provide service to (or such service is committed
to or reserved for) such Private Person on a basis or terms that are different from the
basis ()r terms on which such service is provided (or committed or reserved) to members
of the public generally (except possibly for the amount of use and any corresponding
rate a(ijustment);
(v) such Private Person is a developer and a significant amount of the Project
financed with proceeds of Tax-Exempt Bonds serves only a limited area substantially all
of which is owned by such Private Person, or a limited group of developers, unless such
improvement carries out an essential governmental function, such developer reasonably
expects to proceed with all reasonable speed to develop the improvement and property
benefited by that improvement, and the improvement is in fact transferred to a
Governmental Unit promptly after the property benefited by the improvement is
devel()ped; or
(vi) substantial burdens and benefits of ownership of the Project financed
with I)roceeds of Tax-Exempt Bonds are otherwise effectively transferred to such Private
PerSOltl.
(6) Use of Bond-Financed Property.
(i) For purposes of this Agreement, the use by a Private Person of the Project
financed with the proceeds of Tax-Exempt Bonds (the "Bond Financed Property")
pursuant to a Qualified Use Contract (as hereafter defined) shall not be treated as a
Private Business Use by such Private Person of such Bond-Financed Property or of funds
used to finance or refinance such Bond-Financed Property.
(ii) An arrangement under which services are to be provided by a Private
PersoJn involving the use of all or any portion of, or any function of, the Bond-Financed
Property (for example, management services for an entire facility or a specific
department of a facility ("Use Contract")) is a "Qualified Use Contract" if all of the
follo\\ring conditions are satisfied:
(A) the compensation for services provided pursuant to the Use
Contract is reasonable;
(B) none of the compensation for services provided pursuant to the
Use Contract is based on net profits from operation of the Bond-Financed
Property or any portion thereof;
(C) the compensation provided in the Use Contract satisfies one of the
following subparagraphs:
8
(I) At least 95% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fixed fee and
the term of the Use Contract, including all renewal options, does not
exceed the lesser of 80% of the reasonably expected useful life of the
Bond-Financed Property and 15 years. For purposes of this subparagraph
(ii), a "periodic fixed fee" means a stated dollar amount for services
rendered for a specified period of time that does not increase except for
automatic increases pursuant to a specified, objective external standard
that is not linked to the output or efficiency of the Bond-Financed
Property (e.g., the Consumer Price Index) and a "renewal option" means
a provision under which either party to the Use Contract has a legally
enforceable right to renew the Use Contract; or
(II) At least 80% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fixed fee and
the term of the Use Contract, including all renewal options, does not
exceed the lesser of 80% of the reasonably expected useful life of the
Bond-Financed Property and 10 years; or
(III) At least 50% of the compensation for each annual period
during the term of the Use Contract is based on a periodic fixed fee, the
term of the Use Contract, including all renewal options, does not exceed 5
years, and the Use Contract is terminable by the Local Borrower on
reasonable notice, without penalty or cause, at the end of the third year of
the Use Contract term; or
(IV) All of the compensation for services is based on a
capitation fee or a combination of a capitation fee and a periodic fixed fee,
the term of the Use Contract, including all renewal options, does not
exceed 5 years, and the Use Contract is terminable by the Local Borrower
on reasonable notice, without penalty or cause, at the end of the third
year of the Use Contract term. A "capitation fee" means a fixed periodic
amount for each person for whom the Service Provider assumes the
responsibility to provide all needed services for a specified period so long
as the quantity and type of service actually provided to covered persons
varies substantially; or
(V) All of the compensation for services is based on a per-unit
fee or a combination of a per-unit fee and a periodic fixed fee, the term of
the Use Contract, including all renewal options, does not exceed 3 years
and the Use Contract is terminable by the Local Borrower on reasonable
notice, without penalty or cause, at the end of the second year of the Use
Contract term. A "per-unit fee" means a fee based on a unit of service
provided (e.g., a stated dollar amount for each specified procedure); or
(VI) All of the compensation for services is based on a
percentage of fees charged or a combination of a per-unit fee and a
percentage of revenue or expense fee, the term of the Use Contract,
9
including all renewal options, does not exceed 2 years and the Use
Contract is terminable by the Local Borrower on reasonable notice,
without penalty or cause, at the end of the first year of the Use Contract
term. This subparagraph (VI) applies only to (a) Use Contracts under
which the Private Person primarily provides services to third parties, or
(b) Use Contracts involving the Bond-Financed Property during an initial
start-up period for which there have been insufficient operations to
establish a reasonable estimate of the amount of the annual gross
revenues (or gross expenses in the case of a Use Contract based on a
percentage of gross expenses) (e.g., a Use Contract for general
management services for the first year of operations), in which case, the
compensation for services may be based on a percentage of gross
revenues, adjusted gross revenues (Le., gross revenues less allowances for
bad debts and contractual and similar allowances) or expenses of the
Bond-Financed Facilities, but not more than one.
For purposes of this paragraph (6)(ii)(C), a Use Contract is considered to contain
termination penalties if the termination limits the Local Borrower's right to
compete with the Private Person, requires the Local Borrower to purchase
equipment, goods, or services from the Private Person, or requires the Local
Borrower to pay liquidated damages for cancellation of the Use Contract.
Another contract between the Private Person and the Local Borrower (for
example, a loan or guarantee by the Private Person) is considered to create a
contract termination penalty if that contract contains terms that are not
customary or arm's-length that could operate to prevent the Local Borrower from
terminating the Use Contract. A requirement that the Local Borrower reimburse
the Private Person for ordinary and necessary expenses, or restrictions on the
hiring by the Local Borrower of key personnel of the Private Person, are not
treated as contract termination penalties;
(D) The Private Person has no role or relationship with the Local
Borrower, directly or indirectly, that, in effect, substantially limits the Local
Borrower's ability to exercise its rights under the Use Contract, including
cancellation rights. This requirement is satisfied if:
(I) The Private Person and its directors, officers, shareholders
and employees possess in the aggregate, directly or indirectly, no more
than 20 percent of the voting power of the governing body of the Local
Borrower;
(II) No individual who is a member of the governing body of
the Private Person and the Local Borrower is the chief executive officer of
the Local Borrower or the Private Person or the chairperson of the
governing body of the Local Borrower or the Private Person; and
(III) The Local Borrower and the Private Person are not
"related parties" (within the meaning of Treasury Regulations gl.150-1(b).
10
(iii) The Local Borrower may treat a Use Contract that does not comply with
one 01' more of the criteria of subparagraph (6)(ii) as not resulting in Private Business
Use of Bond-Financed Property if it delivers to the Corporation and the Department, at
its expense, an opinion of Bond Counsel to the effect that to do so would not adversely
affect the exclusion from gross income of interest on the Applicable Tax-Exempt Bonds
or cause the interest on the Applicable Tax-Exempt Bonds, or any portion thereof, to
become an item of tax preference for purposes of the alternative minimum tax imposed
on individuals and corporations under the Code.
(7) Notwithstanding any provision of this Section 2.02, if the Local Borrower
provides, at the Local Borrower's expense, to the Corporation and the Department an opinion of
Bond Counsel to the effect that any action required under this Section is no longer required, or
to the effect that some further action is required, to maintain the exclusions from gross income
of interest on the Applicable Tax-Exempt Bonds pursuant to Section 103(a) of the Code, the
Local Borrower, the Corporation and the Department may rely conclusively on such opinion in
complying with the provisions hereof, and the covenants hereunder shall be deemed to be
modified to tllat extent.
(8) All tax warranties, representations, covenants and obligations of the Local
Borrower corltained in this Section 2.02 shall remain in effect and be binding upon the Local
Borrower until all of the Applicable Tax-Exempt Bonds have been paid, notwithstanding any
earlier termination of this Agreement or any provision for payment of principal of and
premium, if any, and interest on the outstanding Applicable Tax-Exempt Bonds and release and
discharge of the Indenture.
(9) Amounts deposited from time to time in the Loan Debt Service Account will be
used to pay p'rincipal and interest within 13 months after the amounts are so deposited.
(10) The Local Borrower has not established and does not expect to establish or use
any sinking fund, debt service fund, redemption fund, reserve or replacement fund, or similar
fund, or any other fund to pay principal of, in~erest and any redemption premium on the Loan
other than the Loan Debt Service Account. Except as set forth in the next sentence and except
for money referred to in paragraph (9) above, no other money or investment property
(including, without limitation, fixed income, equity and other investments) is or will be pledged
as collateral ()r used for the payment of such principal and interest (or for the reimbursement of
any others WI10 may provide money to pay that principal and interest), or is or will be restricted,
dedicated, el1Lcumbered, or set aside in any way as to afford the Corporation or holders of the
Applicable 1'ax-Exempt Bonds reasonable assurance of the availability of such money or
investment property to pay debt service on the Loan or the Applicable Tax-Exempt Bonds.
(11) Except as stated otherwise in this Agreement, no portion of the Loan will be
used:
(i) to pay principal of or interest on, refund, renew, rollover, retire, or
replace any other obligations issued by or on behalf of the Corporation, the Local
Borro'wer or any other Governmental Unit,
11
(ii) to replace any proceeds of another issue of tax-exempt bonds that were
not ex:pended on the project for which such other issue was issued,
(iii) to replace any money that was or will be used directly or indirectly to
acquire investments,
(iv) to make a loan to any other person or Governmental Unit,
(v) to pay any working capital expenditure other than expenditures
identified in Treasury Regulations 91.148-6(d)(3)(ii)(A) and (B) (!&., issuance costs of the
Applicable Tax-Exempt Bonds, qualified administrative costs, reasonable charges for a
qualified guarantee or for a qualified hedge, interest on the Loan for a period
comm.encing on the issuance date of the Applicable Tax-Exempt Bonds and ending on
the da.te that is the later of three years from that issuance date or one year after the date
on wllich the Project was or will be placed in service, payments of amounts, if any,
pursuant to paragraph (i), and costs, other than those already described, that do not
excee(15% of the sale proceeds of the Applicable Tax-Exempt Bonds and that are directly
relate,} to capital expenditures financed or deemed financed by the Applicable Tax-
Exem]?t Bonds), or
(vi) to reimburse any expenditures made prior to the issuance date of the
Applicable Tax-Exempt Bonds except those that qualify as a reimbursement of prior
capital expenditures, based upon an opinion of Bond Counsel, at the expense of the
Local Borrower, delivered to the Department and the Corporation.
(12) The Local Borrower does not intend to sell or otherwise dispose of the Project or
any portion thereof during the term of the Applicable Tax-Exempt Bonds except for dispositions
of property itl the normal course at the end of such property's useful life to the Local Borrower.
(13) None of the Semiannual Loan Payments shall be federally guaranteed within the
meaning of Section 149(b) of the Code.
2.03. LEGA~L AUTHORIZATION
Upon signing this Agreement, the Local Borrower's legal counsel hereby expresses the
opinion, subject to laws affecting the rights of creditors generally, that:
(1) This Agreement has been duly authorized by the Local Borrower and shall
constitute a 'valid and legal obligation of the Local Borrower enforceable in accord.ance with its
terms upon execution by both parties; and
(2) This Agreement specifies the revenues pledged for repayment of the Loan, and
the pledge is valid and enforceable.
2.04. AUDIT AND MONITORING REQUIREMENTS.
The Local Borrower agrees to the following audit and monitoring requirements.
12
(1) The financial assistance authorized pursuant to this Loan Agreement consists of
the following:
Federal ResolJLrces, Including State Match, A warded to the Recipient Pursuant to this Agreement
Consist of the Following:
Federal State
Program Federal CFDA Funding Appropriation
Number A~ency Number CFDA Title Amount Category
CS120001-090 EPA 66.458 Capitalization $20,000,000 140131
Grants for State
Revolving Funds
(2) Audits.
(a) In the event that the Local Borrower expends $500,000 or more in Federal awards
in its fiscal year, the Local Borrower must have a single or program-specific audit conducted in
accordance writh the provisions of OMB Circular A-133, as revised. Subsection 2.04(1) of this
Agreement indicates that Federal funds are awarded through the Department by this
Agreement. In determining the Federal awards expended in its fiscal year, the Local Borrower
shall consider all sources of Federal awards, including Federal resources received from the
Department. The determination of amounts of Federal awards expended should be in
accordance w-ith the guidelines established by OMB Circular A-133, as revised. An audit of the
Local Borrow'er conducted by the Auditor General in accordance with the provisions of OMB
Circular A-133, as revised, will meet the requirements of this part.
(b) In connection with the audit requirements addressed in the preceding paragraph
(a), the Local Borrower shall fulfill the requirements relative to auditee responsibilities as
provided in Subpart C of OMB Circular A-133, as revised.
(c) If the Local Borrower expends less than $500,000 in Federal awards in its fiscal
year, an audit conducted in accordance with the provisions of OMB Circular A-133, as revised,
is not required. In the event that the Local Borrower expends less than $500,000 in Federal
awards in its fiscal year and elects to have an audit conducted in accordance with the provisions
of OMB Circular A-133, as revised, the cost of the audit must be paid from non-Federal
resources (Le., the cost of such an audit must be paid from Local Borrower resources obtained
from other than Federal entities).
(d) The Local Borrower may access information regarding the Catalog of Federal
Domestic Assistance (CFDA) via the internet at http://www.cfda.gov /.
(3) Report Submission.
(a) C()pies of reporting packages for audits conducted in accordance with OMB Circular
A-133, as re\rised, and required by Subsection 2.04(2) of this Agreement shall be submitted,
when required by Section .320 (d), OMB Circular A-133, as revised, by or on behalf of the Local
Borrower directly to each of the following:
(i) The Department at each of the following addresses:
13
Robert E. Holmden, P.E., Chief
Bureau of Water Facilities Funding
Florida Department of Environmental Protection
2600 Blair Stone Road, MS 3505
Tallahassee, Florida 32399-2400
Joe Aita, Audit Director
Office of the Inspector General
Florida Department of Environmental Protection
3900 Commonwealth Boulevard, MS41
Tallahassee, Florida 32399-3123
(ii) The Federal Audit Clearinghouse designated in OMB Circular A-133, as
revised (the number of copies required by Sections .320 (d)(l) and (2),
OMB Circular A-133, as revised, should be submitted to the Federal
Audit Clearinghouse), at the following address:
Federal Audit Clearinghouse
Bureau of the Census
1201 East 10th Street
Jeffersonville, IN 47132
(iii) Other Federal agencies and pass-through entities in accordance with
Sections .320(e) and (f), OMB Circular A-133, as revised.
(b) Pl:LrSuant to Section .320(f), OMB Circular A-133, as revised, the Local Borrower shall
submit a copy of the reporting package described in Section .320(c), OMB Circular A-133, as
revised, and any management letters issued by the auditor, to the Department at the two
addresses listed under Subsection 2.04(3)(a) of this Agreement.
(c) AllY reports, management letters, or other information required to be submitted to
the Department pursuant to this Agreement shall be submitted timely in accordance with OMB
Circular A-133, Florida Statutes, or Chapters 10.550 (local governmental entities) or 10.650
(nonprofit and for-profit organizations), Rules of the Auditor General, as applicable.
(d) Lc)cal Borrowers, when submitting financial reporting packages to the Department
for audits dOl:le in accordance with OMB Circular A-133, or Chapters 10.550 (local governmental
entities) or 10.650 (nonprofit and for-profit organizations), Rules of the Auditor General, should
indicate the date that the reporting package was delivered to the Local Borrower in
corresponderlce accompanying the reporting package.
(4) Project-Specific Audit.
Within 12 months after the amendment establishing final Project costs, the Local
Borrower shall submit to the Department a Project-specific audit report for the Loan related
revenues an<i expenditures. The audit shall address Loan disbursements received, Project
expenditures" and compliance with Loan Agreement covenants. The Local Borrower shall cause
the auditor tC) notify the Department immediately if anything comes to the auditor's attention
14
during the examination of records that would constitute a default under the Loan Agreement.
The audit fin.dings shall set aside or question any costs that are unallowable under Chapter
62-503, Florida Administrative Code. A final determination of whether such costs are allowed
shall be made by the Department.
(5) Record Retention.
The Lt)cal Borrower shall retain sufficient records demonstrating its compliance with the
terms of this .Agreement for a period of three years from the date the audit report is issued, and
shall allow the Department, or its designee, Chief Financial Officer, or Auditor General access to
such records upon request. The Local Borrower shall ensure that audit working papers are
made available to the Department, or its designee, Chief Financial Officer, or Auditor General
upon request for a period of three years from the "date the audit report is issued, unless
extended in writing by the Department.
(6) Monitoring.
In ad(iition to reviews of audits conducted in accordance with OMB Circular A-133, as
revised (see audit requirements above), monitoring procedures may include, but not be limited
to, on-site visits by Department staff, limited scope audits as defined by OMB Circular A-133, as
revised, and/ or other procedures. By entering into this Agreement, the Local Borrower agrees
to comply arid cooperate with any monitoring procedures/processes deemed appropriate by
the Department. In the event the Department determines that a limited scope audit of the Local
Borrower is appropriate, the Local Borrower agrees to comply with any additional instructions
provided by the Department to the Local Borrower regarding such audit. The Local Borrower
further agrees to comply and cooperate with any inspections, reviews, investigations, or audits
deemed necessary by the Chief Financial Officer or Auditor General.
ARTICLE III - LOAN REPAYMENT ACCOUNT
3.01. LOAN DEBT SERVICE ACCOUNT.
The Local Borrower shall establish a Loan Debt Service Account with a Depository and
begin makin~~ Monthly Loan Deposits no later than the date set forth for such action in Section
10.07 of this l\greement.
Beginning six months prior to each Semiannual Loan Payment, the Local Borrower shall
make six MOll1thly Loan Deposits. The first five deposits each shall be at least equal to one-sixth
of the Semiarmual Loan Payment. The sixth Monthly Loan Deposit shall be at least equal to the
amount required to make the total on deposit in the Loan Debt Service Account equal to the
Semiannual ]~oan Payment amount, taking into consideration investment earnings credited to
the account p.ursuant to Section 3.02.
Any rnonth in which the Local Borrower fails to make a required Monthly Loan Deposit,
the Local Bo,rrower's chief financial officer shall notify the Department of such failure. In
addition, the Local Borrower agrees to budget, by amendment if necessary, from other legally
available norl-ad valorem funds all sums becoming due before the same become delinquent.
This requirelnent shall not be construed to give the Corporation a superior claim on any
15
revenues over prior claims of general creditors of the Local Borrower, nor shall it be construed
to give the Cc)rporation or the Department the power to require the Local Borrower to levy and
collect any re'venues other than Pledged Revenues.
3.02. INVESTMENT OF LOAN DEBT SERVICE ACCOUNT MONEYS.
Mone:vs on deposit in the Loan Debt Service Account shall be invested pursuant to the
laws of the State. Such moneys may be pooled for investment purposes. The maturity or
redemption date of investments shall be not later than the date upon which such moneys may
be needed to make Semiannual Loan Payments. The investment earnings shall be credited to
the Loan Debt Service Account and applied toward the Monthly Loan Deposit requirements.
3.03. LOAl'J DEBT SERVICE ACCOUNT WITHDRAWALS.
The ""ithdrawal of moneys from the Loan Debt Service Account shall be for the sole
purpose of making the Semiannual Loan Payment or for discharging the Local Borrower's
obligations pllrsuant to Section 8.01.
3.04. ASSE~rS HELD IN TRUST.
The assets in the Loan Debt Service Account shall be held in trust for the purposes
provided herein and used only for the purposes and in the manner prescribed in this
Agreement; and, pending such use, said assets shall be subject to a lien and charge in favor of
the Corporation.
ARTICLE IV - PROJECT INFORMATION
4.01. PROJljCT CHANGES.
Project changes prior to bid opening shall be made by addendum to plans and
specifications. Changes after bid opening shall be made by change order. The Local Borrower
shall submit all addenda and all change orders to the Department for an eligibility
determinatioIl. After execution of all construction, equipment and materials contracts, the
Project contirlgency may be reduced.
4.02. TITL:E~ TO PROJECT SITE.
The Local Borrower shall have an interest in real property sufficient for the construction
and location of the Project free and clear of liens and encumbrances which would impair the
usefulness of such sites for the intended use.
4.03. PERlVlITS AND APPROVALS.
The l"ocal Borrower shall have obtained, prior to the Department's authorization to
award construction contracts, all permits and approvals required for construction of the Project
or portion of the Project funded under this Agreement.
16
4.04. ENGI1\JEERING SERVICES.
A professional engineer, registered in the" State, shall be employed by, or under contract
with, the Local Borrower to oversee construction.
4.05. PROHIBITION AGAINST ENCUMBRANCES.
The Local Borrower is prohibited from selling, leasing, or disposing of any part of the
Sewer Systerrl which would materially reduce operational integrity so long as this Agreement,
including an)' amendment thereto, is in effect unless the written consent of the Department is
first secured.
4.06. COMJ)LETION MONEYS.
In addition to the proceeds of this Loan, the Local Borrower covenants that it has
obtained, or will obtain, sufficient moneys from other sources to complete construction and
place the Project in operation on, or prior to, the date specified in Article X. Failure of the
Corporation ()r the Department to approve additional financing shall not constitute a waiver of
the Local Borrower's covenants to complete and place the Project in operation.
4.07. CLOSE-OUT.
The I)epartment shall conduct a final inspection of the Project and Project records.
Following the inspection, deadlines for submitting additional disbursement requests, if any,
shall be established, along with deadlines for uncompleted Loan requirements, if any.
Deadlines shall be incorporated into the Loan Agreement by amendment. The Loan principal
shall be reduced by any excess over the amount required to pay all approved costs. As a result
of such adjustment, the Semiannual Loan Payment shall be reduced accordingly, as addressed
in Section 10.05.
4.08. LOAi'~ DISBURSEMENTS.
Disbursements shall be made only by the Trustee for expenses incurred by the Local
Borrower on or after 60 days before the date of adoption by the Local Borrower of a declaration
of official intent with respect to such expenditure or on or after the issuance date of the Tax-
Exempt Bonds used to fund this Loan, upon receipt of a requisition in the form provided under
the Indenture executed by the Department. Disbursements shall be made directly to the Local
Borrower for allowance costs and reimbursement of the incurred construction costs and related
services. Disbursement of the allowance costs shall be made upon the Department's receipt of a
disbursement request form. Up to seventy percent of the estimated allowance shall be
disbursed after the Loan Agreement is signed. The remainder of the allowance shall be
disbursed after all procurement contracts are executed and shall be adjusted to reflect as-bid
costs. The eIltire estimated allowance may be disbursed after the Loan Agreement is signed if
the Local Borrower agrees to an allowance adjustment after all contracts have been bid. Loan
disbursements shall be made by electronic means. Disbursements shall be made directly to the
Local Borro'\tver for reimbursement of the incurred construction costs and related services and
technical services during construction. A requisition for disbursements shall be made upon
receipt by the Department of the following:
17
(1) A completed disbursement request form signed by the Authorized
Representative. Such requests must be accompanied by sufficiently itemized summaries of the
materials, lab()r, or services to identify the nature of the work performed; the cost or charges for
such work; and the person providing the service or performing the work.
(2) A certification signed by the Authorized Representative as to the current
estimated costs of the Project; that the materials, labor, or services represented by the invoice
have been satisfactorily purchased, performed, or received and applied to the Project; that all
funds received to date have been applied toward completing the Project; and that under the
terms and prc)visions of the contracts, the Local Borrower is required to make such payments.
(3) A certification by the engineer responsible for overseeing construction stating
that equipment, materials, labor and services represented by the construction invoices have
been satisfactorily purchased, or received, and applied to the Project in accordance with
construction contract documents; stating that payment is in accordance with construction
contract provisions; stating that construction, up to the point of the requisition, is in compliance
with the contract documents; and identifying all additions or deletions to the Project which
have altered the Project's performance standards, scope, or purpose since the issue of the
Department construction permit.
(4) Such other certificates or documents by engineers, attorneys, accountants,
contractors, or suppliers as may reasonably be required by the Department.
ARTICLE V - RATES AND USE OF THE SEWER SYSTEM
5.01. RESE]~VED.
5.02. NO F]~EE SERVICE.
The L,ocal Borrower shall not permit connections to, or furnish any services afforded by,
the Sewer Sy'stem without making a charge therefor based on the Local Borrower's uniform
schedule of rates, fees, and charges.
5.03. MANDATORY CONNECTIONS.
The Local Borrower shall adopt, as necessary, and enforce requirements, consistent with
applicable la~Ns, for the owner, tenant or occupant of each building located on a lot or parcel of
land which is served, or may reasonably be served, by the Sewer System to connect such
building to Ule Sewer System.
5.04. RESERVED.
5.05. MAI~JTENANCE OF THE SEWER SYSTEM.
The Local Borrower shall operate and maintain the Sewer System in a proper, sound and
economical nlanner and shall make all necessary repairs, renewals and replacements.
18
5.06. ADDrrIONS AND MODIFICATIONS.
The LIDcal Borrower may make any additions, modifications or improvements to the
Sewer Systenl which it deems desirable and which do not materially reduce the operational
integrity of emy part of the Sewer System. All such renewals, replacements, additions,
modifications and improvements shall become part of the Sewer System.
5.07. COLL:ECTION OF REVENUES.
The L()cal Borrower shall use its best efforts to collect all rates, fees and other charges
due to it. The Local Borrower shall establish liens on premises served by the Sewer System for
the amount Ctf all delinquent rates, fees and other charges where such action is permitted by
law. The Local Borrower shall, to the full extent permitted by law, cause to discontinue the
services of the Sewer System and use its best efforts to shut off water service furnished to
persons who are delinquent beyond customary grace periods in the payment of Sewer System
rates, fees anei other charges.
ARTICLE VI - DEFAULTS AND REMEDIES
6.01. EVEN'TS OF DEFAULT.
Each ()f the following events is hereby declared an event of default:
(1) Failure to make any.Monthly Loan Deposit when it is due and such failure shall
continue for a period of 30 days or failure to make any installment of the Semiannual Loan
Payment when it is due and such failure shall continue for a period of 5 days.
(2) Except as provided in Subsections 6.01(1) and 6.01(7), failure to comply with the
provisions of this Agreement or failure in the performance or observance of any of the
covenants or actions required by this Agreement and such failure shall continue for a period of
60 days after written notice thereof to the Local Borrower by the Department.
(3) Any warranty, representation or other statement by, or on behalf of, the Local
Borrower corltained in this Agreement or in any document, certificate or information furnished
in compliance with, or in reference to, this Agreement, which is false or misleading.
(4) An order or decree entered, with the acquiescence of the Local Borrower,
appointing a receiver of any part of the Sewer System thereof; or if such order or decree, having
been entered without the consent or acquiescence of the Local Borrower, shall not be vacated or
discharged or stayed on appeal within 60 days after the entry thereof.
(5) Any proceeding instituted, with the acquiescence of the Local Borrower, for the
purpose of effecting a composition between the Local Borrower and its creditors or for the
purpose of aeijusting the claims of such creditors, pursuant to any federal or state statute now or
hereafter enacted, if the claims of such creditors are payable from the Sewer System.
19
(6) Any bankruptcy, insolvency or other similar proceeding instituted by, or against,
the Local Borrower under federal or state bankruptcy or insolvency law now or hereafter in
effect and, if instituted against the Local Borrower, is not dismissed within 60 days after filing.
(7) Failure of the Local Borrower to give immediate written notice of default to the
Department ,md such failure shall continue for a period of 30 days.
6.02. REMEDIES.
Upon any event of default and subject to the rights of others having prior liens on the
Pledged Re\'enues, the Department may enforce the rights of the Corporation and the
Department by any of the following remedies:
(1) By mandamus or other proceeding at law or in equity, cause to establish rates
and collect fees and charges for use of the Sewer System, and to require the Local Borrower to
fulfill this Agreement.
(2) By action or suit in equity, require the Local Borrower to account for all moneys
received pursuant to this Agreement or from the ownership of the Sewer System and to account
for the receipt, use, application, or disposition of the Pledged Revenues.
(3) By action or suit in equity, enjoin any acts or things which may be unlawful or in
violation of the rights of the Corporation or the Department.
(4) By applying to a court of competent jurisdiction, cause the appointment of a
receiver to manage the Sewer System, establish and collect fees and charges, and apply the
revenues to the reduction of the obligations under this Agreement.
(5) By certifying to the Auditor General and the Chief Financial Officer delinquency
on Loan repayments, the Department may provide for the payment to the Trustee of the
delinquent a:mount plus a penalty from any unobligated funds due to the Local Borrower under
any revenue or tax sharing fund established by the State, except as otherwise provided by the
State Constitution. A penalty may be imposed in an amount not to exceed an interest rate of 18
percent per annum on the amount due in addition to charging the cost to handle and process
the debt.
(6) By notifying financial market credit rating agencies and potential creditors.
(7) By suing for payment of amounts due, or becoming due, with interest on
overdue pay:ments together with all costs of collection, including attorneys' fees.
(8) By accelerating the repayment schedule or increasing the Financing Rate on the
unpaid principal of the Loan to as much as 1.667 times the Financing Rate for a default under
Subsection 6,,01(1).
20
6.03. DELALY AND WAIVER.
No delay or omission by the Corporation or the Department to exercise any right or
power accruing upon event of default shall impair any such right or power or shall be
construed to be a waiver of any such default or acquiescence therein, and every such right and
power may b.e exercised as often as may be deemed expedient. No waiver or any default under
this Agreement shall extend to or affect any subsequent event of default, whether of the same or
different provision of this Agreement, or shall impair consequent rights or remedies.
ARTICLE VII - THE PLEDGED REVENUES
7.01. SUPERIORITY OF THE PLEDGE TO THE CORPORATION.
From and after the effective date of this Agreement, the Corporation shall have a lien on
the Pledged :Revenues, which along with any other Corporation State Revolving Fund liens on
the Pledged :Revenues, will be prior and superior to any other lien, pledge or assignment with
the followin~~ exception. All obligations of the Local Borrower under this Agreement shall be
junior, inferior, and subordinate in all respects in right of payment and security to any
additional senior obligations issued with the Department's consent pursuant to Section 7.02.
Any of the Pledged Revenues may be released from the lien on such Pledged Revenues in favor
of the Corporation if the Department makes a determination, based upon facts deemed
sufficient by the Department, that the remaining Pledged Revenues will, in each Fiscal Year,
equal or exceed 1.20 times the debt service coming due in each Fiscal Year under the terms of
this Agreement.
7.02. ADDITIONAL DEBT OBLIGATIONS.
The IJocal Borrower may issue additional debt obligations on a parity with, or senior to,
the lien of the Corporation on the Pledged Revenues provided the Department's written
consent is ol,tained. Such consent shall be granted if the Local Borrower demonstrates at the
time of SUCll issuance that the Pledged Revenues, which may take into account reasonable
projections olf growth of the Sewer System and revenue increases, plus revenues to be pledged
to the additional proposed debt obligations will, during the period of time Semiannual Loan
Payments are to be made under this Agreement, equal or exceed 1.20 times the annual
combined debt service requirements of this Agreement and the obligations proposed to be
issued by tlle Local Borrower and will satisfy the coverage requirements of all other debt
obligations secured by the Pledged Revenues.
ARTICLE VIII - GENERAL PROVISIONS
8.01. DISCHARGE OF OBLIGATIONS.
All payments required to be made under this Agreement shall be cumulative and any
deficiencies in any Fiscal Year shall be added to the payments due in the succeeding Fiscal Year
and all Fisca.l Years thereafter until fully paid. Payments shall continue to be secured by this
Agreement \lntil all of the payments required shall be fully paid to the Corporation. If at any
time the Local Borrower shall have paid, or shall have made provision for the timely payment
of, the entire principal amount of the Loan, and as applicable, Loan Service Fee, interest, and
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Grant Allocation Assessment charges, the pledge of, and lien on, the Pledged Revenues to the
Corporation shall be no longer in effect. Deposit of sufficient cash or Defeasance Obligations
may be made to effect defeasance of this Loan. However, the deposit shall be made in
irrevocable trust with a banking institution or trust company for the sole benefit of the
Corporation or its assignees and shall be subject to approval by the Corporation. There shall be
no penalty imposed by the Corporation for early retirement of this Loan.
8.02. PROJ]~CT RECORDS AND STATEMENTS.
Books, records, reports, engineering documents, contract documents, and papers shall
be available to the authorized representatives of the Corporation, the Department and the U.S.
Environmental Protection Agency's Inspector General for inspection at any reasonable time
after the Local Borrower has received a disbursement and until three years after the date that
the Project-specific audit report, required under Subsection 2.04(4), is issued.
8.03. ACCESS TO PROJECT SITE.
The l,ocal Borrower shall provide access to Project sites and administrative offices to
authorized representatives of the Corporation and the Department at any reasonable time. The
Local Borrower shall cause its engineers and contractors to cooperate during Project
inspections, including making available working copies of plans and specifications and
supplementary materials.
8.04. ASSIC;NMENT OF RIGHTS UNDER AGREEMENT.
The l,ocal Borrower hereby expressly acknowledges that the Loan and all payments of
principal anel interest thereon, and all proceeds thereof, but excluding the Loan Service Fee,
have been pledged and assigned to the Trustee under the Indenture as security for the payment
of principal of, premium, if any, and interest on the Bonds and the Trustee shall be entitled to
act hereunder, and by the execution of this Agreement the Local Borrower in all respects
consents to such assignment. The Corporation, the Department and the Trustee may further
assign all or any parts of their rights under this Agreement without the prior consent of the
Local Borro",'er after written notification to the Local Borrower. The Local Borrower shall not
assign its rig:hts and obligations under this Agreement without the prior written consent of the
Department.
8.05. AMEJ~DMENT OF AGREEMENT.
This Agreement may be amended in writing, except that no amendment shall be
permitted which is inconsistent with any applicable statutes, rules, regulations, executive
orders, or written agreements between the Department and the U.S. Environmental Protection
Agency. This Agreement may be amended after all construction contracts are executed to re-
establish the Project cost, Loan amount, Project schedule, and Semiannual Loan Payment
amount. A final amendment establishing the final Project costs and the Loan Service Fee based
on actual Project costs shall be completed after the Department's final inspection of the Project
records.
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8.06. ANN1JLMENT OF AGREEMENT.
The C:orporation, in consultation with the Department, may unilaterally annul this
Agreement if the Local Borrower has not drawn any of the Loan proceeds within twelve months
after the effective date of this Agreement. If the Corporation unilaterally annuls this
Agreement, the Corporation will provide written notification to the Local Borrower.
8.07. SEVERABILITY CLAUSE.
If any provision of this Agreement shall be held invalid or unenforceable, the remaining
provisions shall be construed and enforced as if such invalid or unenforceable provision had
not been contained herein.
ARTICLE IX - CONSTRUCTION CONTRACTS AND INSURANCE
9.01. AUTl-IORIZATION TO AWARD CONSTRUCTION CONTRACTS.
The f()llowing documentation is required to receive the Department! s authorization to
award constr.uction contracts:
(1) Proof of advertising.
(2) Award recommendation, bid proposal, and bid tabulation (certified by the
responsible e:ngineer).
(3) Certification of compliance with the conditions of the Department's approval of
competitivel)' or non-competitively negotiated procurement, if applicable.
9.02. SUB1tIITT AL OF CONSTRUCTION CONTRACT DOCUMENTS.
After the Department's authorization to award construction contracts has been received,
the Local Borrower shall submit:
(1) Contractor insurance certifications.
(2) Certified copy of the Local Borrower's award resolution.
(3) Notices to proceed with construction.
9.03. INSU'RANCE REQUIRED.
The I.Jocal Borrower shall cause the Project, as each part thereof is certified by the
engineer resI)onsible for overseeing construction as completed, and the Sewer System (hereafter
referred to as "Revenue Producing Facilities") to be insured by an insurance company or
companies licensed to do business in the State against such damage and destruction risks as are
customary for the operation of Revenue Producing Facilities of like size, type and location to the
extent such lllsurance is obtainable from time to time against anyone or more of such risks.
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The proceeds of insurance policies received as a result of damage to, or destruction of,
the Project or the other Revenue Producing Facilities, shall be used to restore or replace
damaged portions of the facilities. If such proceeds are insufficient, the Local Borrower shall
provide additional funds to restore or replace the damaged portions of the facilities. Repair,
construction ()r replacement shall be promptly completed.
ARTICLE X - DETAILS OF FINANCING
10.01. PRIN<:IPAL AMOUNT OF LOAN.
The estimated principal amount of the Loan is $20,134,400, which consists of $20,000,000
to be disbursed to the Local Borrower and $134,400 of Capitalized Interest.
Capitalized Interest is not disbursed to the Local Borrower, but is amortized via periodic
Loan repayrrlents as if it were actually disbursed. Capitalized Interest is computed at the
Financing Rate, or rates, set for the Loan. It accrues and is compounded annually from the time
when disbursements are made until six months before the first Semiannual Loan Payment is
due. Capitalized Interest is estimated prior to establishing the schedule of actual
disbursements.
If the total amount disbursed within eighteen months after the effective date of this
Agreement is less than half of the Loan proceeds amount authorized for disbursement, the
Department may unilaterally reduce the amount authorized for disbursement. Such a
reduction would not affect the total authorized Loan amount.
This l,roject is a Segmented Project. Additional State Revolving Fund financing for the
Project is deI)endent upon the availability of additional funds. The current funding limitations
and future f1unding priority entitlement for Segmented Projects are set forth in the Chapter
62-503 of the Florida Administrative Code.
10.02. LOAr~ SERVICE FEE.
The l,oan Service Fee is estimated as $400,000 for the Loan amount authorized to date.
The fee represents two percent of the Loan amount excluding Capitalized Interest; that is, two
percent of $20,000,000. The Loan Service Fee amount shall be revised with any increase or
decrease amendment. The Loan Service Fee is based on actual Project costs and assessed in the
final amendrnent. The Local Borrower shall pay the Loan Service Fee from the first available
repayments following the final amendment.
Capitalized Interest is computed on the assessed Loan Service Fee at the Financing Rate,
or rates and included in the final amendment. It accrues and is compounded annually from the
final amendlnent date until six months before the first Semiannual Loan Payment is due. A
service fee assessed in a final amendment occurring later than six months before the first
Semiannuall~oan Payment date would not accrue Capitalized Interest charges.
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10.03. FINAl\JCING RATE.
The l~inancing Rate on the unpaid principal of the Loan amount specified in
Section 10.01 is 2.71 percent per annum. The Financing Rate equals the sum of the interest rate
and the Grant Allocation Assessment Rate. The interest rate is 1.355 percent per annum and the
Grant Allocation Assessment rate is 1.355 percent per annum. However, if this Agreement is
not executed by the Local Borrower and returned to the Department before October I, 2009, the
Financing Rate may be adjusted. A new Financing Rate shall be established for any funds
provided by amendment to this Agreement.
10.04. LOAN TERM.
The Loan shall be repaid in 40 Semiannual Loan Payments.
10.05. REP A.YMENT SCHEDULE.
The Semiannual Loan Payment shall be computed based upon the principal amount of
the Loan pltLS the estimated Loan Service Fee and the principle of level debt service. The
amount of L()an proceeds authorized for disbursement and associated Capitalized Interest will
be treated as the Loan principal for computing the Semiannual Loan Payment. The Semiannual
Loan Paymellt amount may be adjusted, by amendment of this Agreement, based upon revised
information. After the final disbursement of Loan proceeds, the Semiannual Loan Payment
shall be based upon the actual Project costs and the Loan Service Fee, and actual dates and
amounts of <iisbursements, taking into consideration any previous payments. Actual Project
costs shall 1:te established after the Department's inspection of the completed Project and
associated records. The Corporation will deduct the Loan Service Fee and all associated interest
from the first available repayments following the final amendment.
Each Semiannual Loan Payment shall be in the amount of $668,374 until the payment
amount is adjusted by amendment. The interest and Grant Allocation Assessment portions of
each Semiannual Loan Payment shall be computed, using their respective rates, on the unpaid
balance of tlle principal amount of the Loan, which principal includes Capitalized Interest.
Interest (at tile Financing Rate) also shall be computed on the estimated Loan Service Fee. The
interest and Grant Allocation Assessment on the unpaid balance shall be computed as of the
due date of each Semiannual Loan Payment.
Semiannual Loan Payments shall be paid to, and must be received by, the Trustee
beginning orl September IS, 2010 and semiannually thereafter on March 15 and September 15 of
each year un.til all amounts due hereunder have been fully paid. Funds transfer shall be made
by electronic means.
The Semiannual Loan Payment amount is based on the total amount owed of
$20,534,400, 'which consists of the Loan principal and the estimated Loan Service Fee.
10.06. PROJECT COSTS.
The I..Iocal Borrower, the Corporation and the Department acknowledge that the actual
Project costs have not been determined as of the effective date of this Agreement. Project cost
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adjustments Jmay be made as a result of Project changes agreed upon by the Department.
Capitalized Interest will be recalculated based on actual dates and amounts of Loan
disbursements. If the Local Borrower receives other governmental financial assistance for this
Project, the costs funded by such other governmental assistance will not be financed by this
Loan. The Department shall establish the final Project costs after its final inspection of the
Project recor(is. Changes in Project costs may also occur as a result of the Local Borrower's
Project audit or a Department audit. The Local Borrower agrees to the following estimates of
Project costs:
PROJECT COSTS
CATEGORY
Allowance costs
Construction and Demolition
Contingencies
Technical Services After Bid Opening
Subtotal (Disbursable Amount)
Capitalize(i Interest
TOT AL (Loan Principal Amount)
COST ($)
1,565,972
19,005,012
950,251
1,300,000
22,821,235
134,400
22,955,635
AUTHORIZED LOAN
AMOUNT($) TO DATE
Line items
may vary
based on Actual
Disbursements
20,000,000
134,400
20,134,400
10.07. PROJECT SCHEDULE.
The Local Borrower agrees by execution hereof:
(1) Completion of Project construction is scheduled for March 15, 2010.
(2) The Loan Debt Service Account shall be established and Monthly Loan Deposits
shall begin n~J later than March 15, 2010.
(3) The initial annual certification required under Subsection 2.01(10) of this
Agreement shall be due June 15, 2010. Thereafter the certification shall be submitted no later
than SeptemlJer 30 of each year until the final Semiannual Loan Payment is made.
(4) The first Semiannual Loan Payment in the amount of $668,374 shall be due
September 1:>, 2010.
10.08. SPECIAL CONDITIONS.
Prior to the release of any funds, the Local Borrower shall submit a certified copy of a
Resolution ",rhich shall authorize the application, establish the Pledged Revenues and establish
an Authorized Representative for signing the application and executing the Loan agreement.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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ARTICLE XI - EXECUTION OF AGREEMENT
This Loan Agreement WW602090 shall be executed in three or more counterparts, any of
which shall be regarded as an original and all of which constitute but one and the same
instrument.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
its behalf by its Chief Executive Officer and the Local Borrower has caused this Agreement to be
executed on its behalf by its Authorized Representative and by its affixed seal. The effective
date of this Agreement shall be as set forth below by the Chief Executive Officer of the
Corporation.
for
IDA WATER POL UTION CONTROL FINANCI
for
MONROE COUNTY
3:0 ~."
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I attest to the opinion expres~~ectiQn ~
2.03, entitled Legal AuthMizafibn. ~ 0
~~L. ){)~,~
ChaJ'man, Bo~rd of County Commissioners
AUG 1 9 l009
DANNY L. KOLrlt~GE, Clerk
Attest
CJ? D.c...
County Clerk
SEAL
APPROVED AND ACCEPTED BY THE STATE OF FLORIDA DEPARTMENT OF
ENVIRONMENTAL PROTECTION/ y-( C .
Deputy Director
Division of Water Resource Management
27