01/17/2018 AgreementMONROE COUNTY, FLORIDA
$40,000,000 TAX-EXEMPT MASTER REVENUE NOTE
(PNC BANK, NATIONAL ASSOCIATION LINE OF CREDIT),
SERIES 2018
DATED: FEBRUARY 1, 2018
MONROE COUNTY, FLORIDA
List
MONROE COUNTY, FLORIDA
Tax -Exempt Master Revenue Note
(PNC Bank, National Association Line of Credit), Series 2018
List of Closing Documents
February 1, 2018
1. Certified copy of Resolution No. 020-2018, adopted on January 17, 2018,
establishing a line of credit with PNC Bank, National Association.
2. Line of Credit Agreement, dated as of February 1, 2018, between the County and
PNC Bank, National Association.
3. Proposal of PNC Bank, National Association.
4. PNC Bank, National Association Disclosure Letter and Truth -In -Bonding
Statement.
5. Tax -Exempt Master Note.
6. Incumbency Certificate.
7. Certificate as to Signatures.
8. General Certificate of County.
9. Tax -Exempt Draw Request (Draw # 1).
10. Tax -Exempt Draw Certificate (Draw #1).
11. Information Return to the Internal Revenue Service.
12. Advance Notice of Bond Sale.
13. Division of Bond Finance Information Form.
14. Certificate as to Arbitrage and Certain Other Tax Matters.
15. Approving Opinion of Nabors, Giblin & Nickerson, P.A., Note Counsel.
16. Reliance Letter to PNC Bank, National Association.
17. Opinion of County Attorney.
18. Closing Memorandum.
19. Final Numbers.
I
CLERK'S CERTIFICATE AS TO RESOLUTION NO.020-2018
I, Kevin Madok, Clerk of the Circuit Court of Monroe County, Florida and Ex-
Officio Clerk to the Board of County Commissioners (the "County"), DO HEREBY
CERTIFY that attached hereto is a copy of "A RESOLUTION OF THE BOARD OF
COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA ACCEPTING
THE PROPOSAL OF PNC BANK, NATIONAL ASSOCIATION TO PROVIDE THE
COUNTY WITH A REVOLVING LINE OF CREDIT OF UP TO $40,000,000 TO
FINANCE AND REFINANCE VARIOUS CAPITAL IMPROVEMENTS, REPAIRS
AND OTHER EXTRAORDINARY EXPENDITURES RESULTING FROM RECENT
HURRICANE DAMAGE WITHIN THE COUNTY; APPROVING THE FORM OF A
LINE OF CREDIT AGREEMENT WITH PNC BANK, NATIONAL ASSOCIATION,
IN ORDER TO EVIDENCE SUCH LINE OF CREDIT; APPROVING THE FORM OF
MASTER NOTES TO SECURE DRAWS UNDER THE LINE OF CREDIT
AGREEMENT; AUTHORIZING THE REPAYMENT OF DRAWS UNDER THE LINE
OF CREDIT AGREEMENT FROM LEGALLY AVAILABLE NON -AD VALOREM
REVENUES BUDGETED AND APPROPRIATED FOR SUCH PURPOSE;
DELEGATING CERTAIN AUTHORITY TO CERTAIN OFFICIALS OF THE
COUNTY; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER
DOCUMENTS IN CONNECTION THEREWITH; AND PROVIDING FOR AN
EFFECTIVE DATE FOR THIS RESOLUTION," adopted at a meeting of the Board of
County Commissioners duly called and held on January 17, 2018, at which meeting a
quorum was present and acting throughout, which resolution has been compared by me
with the original thereof as recorded in the Minute Book of said County and that said
resolution is a true, complete and correct copy thereof and said resolution has been duly
adopted and has not been further modified, amended or repealed, and is in full force and
effect on and as of the date hereof in the form attached hereto.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official
seal of the County as of the 1st day of February; 2018.
(Shy
Clerk of the Circuit Court of Monroe County,
Florida and Ex-Officio Clerk to the Board of
County Commissioners
MONROE COUNTY, FLORIDA
RESOLUTION NO.020 -2018
A RESOLUTION OF THE BOARD OF COUNTY
COMMISSIONERS OF MONROE COUNTY, FLORIDA
ACCEPTING THE PROPOSAL OF PNC BANK,
NATIONAL ASSOCIATION TO PROVIDE THE COUNTY
WITH A REVOLVING LINE OF CREDIT OF UP TO
$40,000,000 TO FINANCE AND REFINANCE VARIOUS
CAPITAL IMPROVEMENTS, REPAIRS AND OTHER
EXTRAORDINARY EXPENDITURES RESULTING
FROM RECENT HURRICANE DAMAGE WITHIN THE
COUNTY; APPROVING THE FORM OF A LINE OF
CREDIT AGREEMENT WITH PNC BANK, NATIONAL
ASSOCIATION, IN ORDER TO EVIDENCE SUCH LINE
OF CREDIT; APPROVING THE FORM OF MASTER
NOTES TO SECURE DRAWS UNDER THE LINE OF
CREDIT AGREEMENT; AUTHORIZING THE
REPAYMENT OF DRAWS UNDER THE LINE OF
CREDIT AGREEMENT FROM LEGALLY AVAILABLE
NON -AD VALOREM REVENUES BUDGETED AND
APPROPRIATED FOR SUCH PURPOSE; DELEGATING
CERTAIN AUTHORITY TO CERTAIN OFFICIALS OF
THE COUNTY; AUTHORIZING THE EXECUTION AND
DELIVERY OF OTHER DOCUMENTS IN CONNECTION
THEREWITH; AND PROVIDING FOR AN EFFECTIVE
DATE FOR THIS RESOLUTION.
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
MONROE COUNTY, FLORIDA:
SECTION 1. FINDINGS AND AUTHORIZATIONS. It is hereby found
and determined that:
(A) Hurricane Irma caused catastrophic damage throughout Monroe County,
Florida (the "County") and the County is experiencing extraordinary expenditures and
costs related to repairs, improvements, protective and security costs and collection,
disposal and general clean-up of debris (the "Extraordinary Expenditures").
(B) Due to the current unavailability of sufficient budgeted funds, cash flow
issues and anticipated delays in the expected reimbursement of a portion of the
Extraordinary Expenditures by federal and state agencies, there is presently a need by the
County to finance a portion of the Extraordinary Expenditures on an interim basis.
(C) The County's financial advisor, Public Financial Management, Inc. (the
"Financial Advisor"), previously solicited proposals from various financial institutions to
provide the County with a revolving line of credit to finance and refinance Extraordinary
Expenditures and the proposal (the "Proposal") received from PNC Bank, National
Association (the "Noteholder"), a copy of which is attached hereto as Exhibit A, is the
most beneficial proposal for the County.
(D) The County deems it to be in its best interest to accept the Proposal of the
Noteholder to provide it with a revolving line of credit (the "Line of Credit") and to issue
its Tax -Exempt Master Revenue Note (PNC Bank, National Association Line of Credit),
Series 2018 (the "Tax -Exempt Master Note") and Taxable Master Revenue Note (PNC
Bank, National Association Line of Credit), Series 2018 (the "Taxable Master Note") to
the Noteholder to secure and evidence the Line of Credit.
(E) The County and the Noteholder shall enter into a Line of Credit Agreement
(the "Line of Credit Agreement") substantially in the form attached hereto as Exhibit B
that will contain various terms of and provisions for the Line of Credit and the Tax -
Exempt Master Note and the Taxable Master Note (collectively, the "Master Notes").
(F) Each Draw (as defined in the Line of Credit Agreement) under the Line of
Credit shall be repaid from Non -Ad Valorem Revenues (as defined in the Line of Credit
Agreement) budgeted and appropriated in the manner and to the extent set forth in the
Line of Credit Agreement and the Noteholder cannot compel the County to use its
ad valorem taxing power to pay said amounts.
(G) Due to the potential volatility of the market for tax-exempt and taxable
obligations such as the Master Notes and the complexity of the transactions relating to
such Master Notes and the Line of Credit, it is in the best interest of the County to sell the
Master Notes by a negotiated sale to the Noteholder pursuant to the Proposal, the Line of
Credit Agreement and the provisions hereof, rather than at a specified advertised date,
thereby permitting the County to obtain the best possible price, terms and interest rate for
the Master Notes and the Line of Credit Agreement
SECTION 2. DEFINITIONS. When used in this Resolution, the terms
defined in the Line of Credit Agreement shall have the meanings therein stated, except as
such defmitions may be hereinafter amended and defined.
The words "herein," "hereunder," "hereby," "hereto," "hereof," and any similar
terms shall refer to this Resolution.
Words importing the singular number include the plural number, and vice versa.
SECTION 3. AUTHORITY FOR THIS RESOLUTION. This
Resolution is adopted pursuant to the provisions of the Act.
2
SECTION 4. RESOLUTION TO CONSTITUTE CONTRACT. In
consideration of the purchase and acceptance of the Master Notes by the Noteholder, the
provisions of this Resolution shall be a part of the contract of the County with the
Noteholder, and shall be deemed to be and shall constitute a contract between the County
and the Noteholder. The provisions, covenants and agreements herein and in the Line of
Credit Agreement set forth to be performed by or on behalf of the County shall be for the
benefit, protection and security of the Noteholder. The Master Notes and the Draws to be
made thereagainst regardless of the time or times of their issuance or maturity, shall be of
equal rank without preference, priority or distinction of the Master Notes or such Draws
over any other thereof except as provided therein or in the Line of Credit Agreement.
SECTION 5. ACCEPTANCE OF PROPOSAL. The County hereby
accepts the Proposal of the Noteholder to provide the County with a revolving line of
credit of up to $40,000,000, a copy of which Proposal is attached hereto as Exhibit A.
The Mayor and the Clerk are each hereby authorized to execute and deliver the Proposal
to the Noteholder, all of the terms and provisions of which are hereby approved and all
actions previously taken by the Mayor, the Clerk, the County Administrator and other
officials and employees of the County and professionals to the County with respect to the
Proposal are hereby ratified and approved. The interest rate with respect to the Line of
Credit is variable and shall be established from time to time in accordance with the terms
of the Proposal and the Line of Credit Agreement.
SECTION 6. APPROVAL OF FORM OF LINE OF CREDIT
AGREEMENT. The repayment of each Draw under the Line of Credit Agreement shall
be pursuant to the terms and provisions of the Line of Credit Agreement and the
Resolution. The terms and provisions of the Line of Credit Agreement in substantially
the form attached hereto as Exhibit B are hereby approved, with such changes, insertions
and additions as the Mayor and Clerk may approve, including but not limited to, the
amount of the Line of Credit; provided, however, such Line of Credit may not exceed
$40,000,000. The County hereby authorizes the Mayor to execute and deliver, and the
Clerk to attest and affix the County seal to, the Line of Credit Agreement substantially in
the form attached hereto as Exhibit B, with such changes, insertions and additions as they
may approve, their execution thereof being evidence of such approval.
SECTION 7. SECURITY FOR THE LINE OF CREDIT; LIMITED
OBLIGATION. The obligation of the County to repay amounts, if any, drawn under the
Line of Credit Agreement is a limited and special obligation payable from Designated
Revenues in the manner and to the extent set forth in the Line of Credit Agreement and
shall not be deemed a pledge of the faith and credit or taxing power of the County and
such obligation shall not create a lien on any property whatsoever of or in the County
other than the Designated Revenues. The Designated Revenues shall consist of proceeds
of Draws pending the application thereof and all legally available Non -Ad Valorem
Revenues budgeted and appropriated by the Board in amounts sufficient to pay the .
Draws, all to the extent described in the Master Notes and the Line of Credit Agreement.
SECTION 8. APPROVAL OF MASTER NOTES. In order to evidence
and secure Draws under the Line of Credit Agreement, it is necessary to provide for the
execution and delivery of the Master Notes. The Mayor is authorized to execute and
deliver, and the Clerk is authorized to attest and affix the seal to, the Master Notes
substantially in the form attached to the Line of Credit Agreement as Exhibit B, with such
changes, insertions and additions as they may approve, their execution thereof being
evidence of such approval. The Clerk is hereby designated Registrar and Paying Agent
for the Master Notes. The Clerk shall keep adequate books and records to identify the
holder of the Master Notes.
SECTION 9. DRAWS TO BE MADE BY CERTAIN AUTHORIZED
OFFICERS. Any Authorized Officer is authorized to make Draws under the Line of
Credit Agreement pursuant to the terms and provisions of the Line of Credit Agreement
and to execute such Draw Requests that are required by the Noteholder; provided,
however, the following must be satisfied prior to any such Draw being made:
(A) the interest rate on the Draw must equal the Interest Rate (as determined in
accordance with the Line of Credit Agreement);
(B) the principal amount of the Draw, together with all other outstanding and
unpaid principal amounts of Draws previously or simultaneously made under the Line of
Credit Agreement, does not exceed $40,000,000;
(C) the proceeds of the Draw are scheduled to be applied to finance or refinance
all or a portion of the costs of Extraordinary Expenditures, as more particularly described
in the Line of Credit Agreement;
(D) no Event of Default shall have occurred and be continuing under the Line
of Credit Agreement or the Resolution; and
(E) all other conditions required under the Line of Credit Agreement for
making a Draw have been satisfied.
SECTION 10. GENERAL AUTHORIZATION. The Mayor, the Clerk,
and the County Administrator are authorized to execute and deliver such documents,
instruments and contracts, whether or not expressly contemplated hereby, and the County
Attorney, Bond Counsel, the Financial Advisor and other employees or agents of the
County are hereby authorized and directed to do all acts and things required hereby or
thereby as may be necessary for the full, punctual and complete performance of all the
terms, covenants, provisions and agreements herein and therein contained, or as
4
otherwise may be necessary or desirable to effectuate the purpose and intent of this
Resolution.
SECTION 11. REPEAL OF INCONSISTENT DOCUMENTS. All prior
ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and
repealed to the extent of such conflict.
SECTION 12. EFFECTIVE DATE. This Resolution shall take effect
immediately upon its adoption.
PASSED AND ADOPTED by the Board of County Commissioners of Monroe
County, Florida, at a regular meeting of said Board held on the 17th day of January
2018.
Mayor David Rice
Yes
Mayor Pro Tem Sylvia Murphy
Yes
Commissioner Heather Carruthers
Yes
Commissioner Danny Kolhage
Yes
Commissioner George Neugent
Yes
BOARD OF COUNTY COMMISSIONERS
OF MONROE COUNTY, FLORIDA
Madok, Clerk
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Deputy Clerk Mayor
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MONROE COUNTY ATTORNEY
A RO ERA T F9RM:
YNTHIA L. ALL
ASSIST NT COUNTY ATTORNEY
Date I t k 7 0
EXHIBIT A
PROPOSAL OF PNC BANK, NATIONAL ASSOCIATION
[SEE TAB 31
EXHIBIT B
FORM OF LINE OF CREDIT AGREEMENT
[SEE TAB 2]
LINE OF CREDIT AGREEMENT
BETWEEN
MONROE COUNTY, FLORIDA
kK
PNC BANK, NATIONAL ASSOCIATION
Dated as of February 1, 2018
SECTION 1.01
SECTION 1.02
SECTION 1.03
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITION OF TERMS
DEFINITIONS....................................................................................2
INTERPRETATION........................................................................... 7
TITLESAND HEADINGS................................................................7
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS; SECURITY FOR
NOTES
SECTION 2.01
SECTION 2.02
SECTION 2.03.
SECTION 2.04.
SECTION 2.05.
SECTION 2.06.
SECTION 2.07.
SECTION 2.08.
REPRESENTATIONS BY THE COUNTY......................................8
GENERAL REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE NOTEHOLDER....................................9
TAXCOVENANT.............................................................................9
MASTER NOTES AND. DRAWS NOT TO BE
INDEBTEDNESS OF THE COUNTY OR STATE...................10
SECURITY FOR MASTER NOTES AND DRAWS ......................10
COVENANT TO BUDGET AND APPROPRIATE NON -AD
VALOREMREVENUES...........................................................10
PAYMENT COVENANT................................................................I I
ANTI-DILUTION............................................................................. I I
ARTICLE III
DESCRIPTION OF MASTER NOTES AND DRAWS; PAYMENT TERMS;
OPTIONAL PREPAYMENT
SECTION 3.01. DESCRIPTION OF THE MASTER NOTES AND DRAWS .........13
SECTION 3.02. OPTIONAL PREPAYMENT...........................................................15
SECTION 3.03. ADJUSTMENT TO TAX-EXEMPT INTEREST RATES..............16
ARTICLE IV
CONDITIONS FOR DRAWS
SECTION 4.01. CONDITIONS FOR DRAWS..........................................................17
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
SECTION 5.01. EVENTS OF DEFAULT..................................................................19
SECTION 5.02. REMEDIES.......................................................................................19
SECTION 6.01.
SECTION 6.02.
SECTION 6.03.
SECTION 6.04.
SECTION 6.05.
SECTION 6.06.
SECTION 6.07.
SECTION 6.08.
SECTION 6.09.
SECTION 6.11.
ARTICLE VI
MISCELLANEOUS
AMENDMENTS, CHANGES OR MODIFICATIONS TO
THEAGREEMENT....................................................................21
COUNTERPARTS...........................................................................21
SEVERABILITY..............................................................................21
TERMOF AGREEMENT................................................................21
NOTICE OF CHANGES IN FACT.................................................21
NOTICES..........................................................................................21
APPLICABLELAW........................................................................22
INCORPORATION BY REFERENCE...........................................22
ASSIGNMENT.................................................................................22
USA PATRIOT ACT COMPLIANCE NOTIFICATION...............22
EXHIBITS
A - FORM OF DRAW CERTIFICATE
B - FORM OF MASTER NOTE
C - FORM OF DRAW REQUEST
ii
This LINE OF CREDIT AGREEMENT (the "Agreement") is made and entered
into as of February 1, 2018, by and between MONROE COUNTY, FLORIDA, a
political subdivision of the State of Florida duly organized and validly existing under the
laws of the State of Florida, and its successors and assigns (the "County"), and PNC
BANK, NATIONAL ASSOCIATION, a national banking association duly organized
and validly existing under the laws of the United States of America and authorized to do
business in the State of Florida, and its successors and assigns (the "Noteholder");
WITNESSETH:
WHEREAS, Hurricane Irma caused catastrophic damage throughout the County
and the County is experiencing extraordinary expenditures and costs related to repairs,
improvements, protective and security costs and collection, disposal and general clean-up
of debris (the 'Extraordinary Expenditures"); and
WHEREAS, due to the current unavailability of sufficient budgeted funds, cash
flow issues and anticipated delays in the expected reimbursement of a portion of the
Extraordinary Expenditures by federal and state agencies, there is presently a need by the
County to finance a portion of the Extraordinary Expenditures on an interim basis; and
WHEREAS, the County is authorized by the provisions of Chapter 125, Florida
Statutes, and other applicable provisions of law (the "Act") to, among other things,
borrow money to finance and refinance the Extraordinary Expenditures; and
WHEREAS, the County finds it necessary and in the best interests of the County
to finance and refinance Extraordinary Expenditures from time to time; and
WHEREAS, the County finds that the Extraordinary Expenditures serve a public
purpose under the Act; and
WHEREAS, the Noteholder is willing to make available to the County, and the
County is willing to enter into, a revolving line of credit arrangement pursuant to the
terms and provisions of this Agreement in an aggregate principal amount of not
exceeding $40,000,000 at any one time (unless such not to exceed amount is
subsequently reduced by a written amendment hereto pursuant to Section 6.01 hereof)
under which the County may draw moneys from time to time to finance or refinance
Extraordinary Expenditures.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That the parties hereto, intending to be legally bound hereby and in consideration
of the mutual covenants hereinafter contained, DO HEREBY AGREE as follows:
ARTICLE I
DEFINITION OF TERMS
SECTION 1.01. DEFINITIONS. The terms defined in this Article I shall, for
all purposes of this Agreement, have the meanings in this Article I specified, unless the
context clearly otherwise requires.
"Act" shall mean Chapter 125, Florida Statutes, and other applicable provisions
of law.
"Ad Valorem Revenues" shall mean all revenues of the County derived from the
levy and collection of ad valorem taxes.
"Agreement" shall mean this Line of Credit Agreement, dated as of February 1,
2018, by and between the County and the Noteholder and any and all modifications,
alterations, amendments and supplements hereto made in accordance with the provisions
hereof.
"Annual Debt Service" shall mean, at any time, the aggregate amount in the then
applicable Fiscal Year of (1) interest required to be paid on the Draws during such Fiscal
Year, except to the extent that such interest is to be paid from proceeds of a Draw for
such purpose, and (2) principal of outstanding Draws maturing in such Fiscal Year. For
purposes of this definition, if a Draw has 25% or more of the aggregate principal amount
thereof coming due in any one Fiscal Year, Annual Debt Service shall be determined as if
the principal of and interest on such Draw were being paid from the date of incurrence
thereof in substantially equal annual amounts over a period of 25 years.
"Authorized Officer" shall mean the Mayor, the Clerk or the County
Administrator, or their duly authorized designees.
"Board" shall mean the Board of County Commissioners of Monroe County,
Florida.
"Bond Counsel" shall mean Nabors, Giblin & Nickerson, P.A., Tampa, Florida,
or any other attorney at law or firm of attorneys of nationally recognized standing in
matters pertaining to the federal tax exemption of interest on obligations issued by states
and political subdivisions, and duly admitted to practice law before the highest court of
any state of the United States of America.
"Clerk" shall mean the Clerk of the Circuit Court of Monroe County, Florida and
Ex-Officio Clerk of the Circuit Court of the Board, or his or her authorized designee,
including any Deputy Clerk.
2
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
applicable rules and regulations.
"Counterparty" shall mean the entity entering into a Hedge Agreement with the
County. Counterparty would also include any guarantor of such entity's obligations
under such Hedge Agreement.
"County" shall mean Monroe County, Florida, a political subdivision of the State
of Florida duly organized and validly existing under the laws of the State of Florida.
"County Administrator" shall mean the County Administrator of the County, or
his or her authorized designee.
"Date of Issuance" shall mean, in the case of each Draw the date such Draw is
funded. The Date of Issuance for each Draw will be set forth in the corresponding Draw
Request.
"Debt" means at any date (without duplication) all of the following to the extent
that they are secured by or payable in whole or in part from any Non -Ad Valorem
Revenues: (a) all obligations of the County for borrowed money or evidenced by bonds,
debentures, notes or other similar instruments; (b) all obligations of the County to pay the
deferred purchase price of property or services, except trade accounts payable under
normal trade terms and which arise in the ordinary. course of business; (c) all obligations
of the County as lessee under capitalized leases; and (d) all indebtedness of other Persons
to the extent guaranteed by, or secured by, Non -Ad Valorem Revenues of the County;
provided, however, if with respect to any obligation contemplated in (a), (b), or (c)
above, the County has covenanted to budget and appropriate sufficient Non -Ad Valorem,
Revenues to satisfy such obligation in the event that other revenues or funds pledged to
secure such obligation are insufficient therefor, and with respect to any obligation
contemplated in (d) above, such obligation shall not be considered "Debt" for purposes of
this Loan Agreement unless the County has actually used Non -Ad Valorem Revenues to
satisfy such obligation during the immediately preceding Fiscal Year or reasonably
expects to use Non -Ad Valorem Revenues to satisfy such obligation in the current or
immediately succeeding Fiscal Year. After an obligation is considered "Debt" as a result
of the proviso set forth in the immediately preceding sentence, it shall continue to be
considered "Debt" until the County has not used any Non -Ad Valorem Revenues to
satisfy such obligation for two consecutive Fiscal Years.
"Default Rate" shall mean the lesser of (A) the Prime Rate plus three percent
(3%) per annum or (B) the maximum rate permitted by law.
"Designated Revenues" shall mean, with respect to any Draw, (a) the Non -Ad
Valorem Revenues budgeted and appropriated to pay debt service on the Draw in
3
accordance with Section 2.06 hereof, and (b) the proceeds of the Draw pending the
application thereof.
"Determination of Taxability" shall mean the circumstance of interest paid or
payable on a Draw becoming includable for federal income tax purposes in the gross
income of the Noteholder for any reason. A Determination of Taxability will be deemed
to have occurred upon (a) the receipt by the County or the Noteholder of an original or a
copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice
of Deficiency or other official letter or correspondence from the Internal Revenue Service
which holds that any interest payable on a Draw is includable in the gross income of such
Noteholder; (b) the issuance of any public or private ruling of the Internal Revenue
Service that any interest payable on such Draw is includable in the gross income of the
Noteholder; or (c) receipt by the County or the Noteholder of an opinion of a Bond
Counsel that any interest on the Draw has become includable in the gross income of the
Noteholder for federal income tax purposes. For all purposes of this definition, a
Determination of Taxability will be deemed to occur on the date as of which the interest
on a Draw is deemed includable in the gross income of the Noteholder.
"Draw" or "Drawing" shall mean a borrowing of money against a Master Note
in accordance with this Agreement.
"Draw Certificate" shall mean the certificate of the County required to be
delivered with respect to each Draw pursuant to Section 4.01(a) hereof, the form of which
is attached hereto as Exhibit A.
"Draw Request" shall mean the written request of the County to the Noteholder
to make a Draw against a Master Note pursuant to Section 4.01(a) hereof and approved
by the Noteholder, the form of which is attached hereto as Exhibit C.
"Event of Default" shall have the meaning ascribed thereto in Section 5.01
hereof.
"Extraordinary Expenditures" shall mean the extraordinary expenditures and
costs related to repairs, improvements, protective and security costs and collection,
disposal and general clean-up of debris caused by or as a result of Hurricane Irma, as
more particularly described in the books, records, plans and specifications of the County.
"Final Draw Date" shall mean August 1, 2019.
"Final Maturity Date" shall mean August 1, 2022.
"Fiscal Year" shall mean the 12-month period commencing on October 1 of any
year and ending on September 30 of the immediately succeeding year.
"Fitch" shall mean Fitch Ratings, and any successors or assigns thereto.
"Hedge Agreement" shall mean an agreement in writing between the County and
a Counterparty pursuant to which (a) the County agrees to pay to the Counterparty an
amount, either at one time or periodically, which may, but is_ not required to, be
determined by reference to the amount of interest (which may be at a fixed or variable
rate) payable on debt (or a notional amount) specified in such agreement during the
period specified in such agreement and (b) the Counterparty agrees to pay to the County
an amount, either at one time or periodically, which may, but is not required to, be
determined by reference to the amount of interest (which may be at a fixed or variable
rate) payable on debt (or a notional amount) specified in such agreement during the
period specified in such agreement.
"Hedge Payments" shall mean any amounts payable by the County on the
notional amount under a Qualified Hedge Agreement; excluding, however, any payments
due as a penalty or by virtue of termination of a Qualified Hedge Agreement or any
obligation of the County to provide collateral.
"Interest Rate" shall mean the Tax -Exempt Interest Rate or Taxable Interest
Rate, whichever is applicable, with respect to a particular Draw.
"LIBOR Reserve Percentage" shall mean the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including, without
limitation, supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities").
"Master Notes" shall mean, collectively, the Tax -Exempt Master Note and the
Taxable Master Note.
"Maximum Annual Debt Service" shall mean the largest aggregate amount of
the Annual Debt Service coming due in any Fiscal Year in which Draws are outstanding
and unpaid hereunder.
"Mayor" shall mean the Mayor of the Board or, in his or her absence or
unavailability, the Mayor Pro Tem of the Board or such other person as may be duly
authorized to act on either's behalf.
"Moody's" shall mean Moody's Investors Service, and any successor or assigns
thereto.
"Non -Ad Valorem Revenues" shall mean all revenues of the County, other than
Ad Valorem Revenues, which are legally available to make the payments required herein.
"Noteholder" shall mean PNC Bank, National Association and its successors and
assigns.
E
"One -Month LIBOR" shall mean, for each Reset Date, the interest rate per
annum determined by the Noteholder by dividing (i) the rate which appears on the
Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates
at which US dollar deposits are offered by leading banks in the London interbank deposit
market), or the rate which is quoted by another source selected by the Noteholder as an
authorized information vendor for the purpose of displaying rates at which US dollar
deposits are offered by leading banks in the London interbank deposit market (an
"Alternate Source"), at approximately 11:00 a.m., London time, two (2) business days
prior to such Reset Date, as the one (1) month London interbank offered rate for U.S.
Dollars commencing on such Reset Date (or if there shall at any time, for any reason, no
longer exist a Bloomberg Page BBAMI (or any substitute page) or any Alternate Source,
a comparable replacement rate determined by the Noteholder at such time (which
determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00
minus the LIBOR Reserve Percentage. One -Month LIBOR shall never be less than
0.00% for purposes of this Agreement.
"Person" shall mean an individual, a corporation, a partnership, an association, a
joint stock company, a trust, any unincorporated organization, governmental entity or
other legal entity.
"Prime Rate" means that index rate of interest which the Noteholder from time to
time announces as its prime lending rate, which rate is an index rate for guidance to loan
officers and is not necessarily the best or lowest rate charged borrowing customers of the
Noteholder, or if such rate is no longer announced, such comparable prime rate as shall
be published in the Wall Street Journal.
"Qualified Hedge Agreement" shall mean a Hedge Agreement with respect to
which the County has received written notice from at,least two of the Rating Agencies
that the rating of the Counterparty is not less than "A."
"Rating Agencies" shall mean Fitch, Moody's and Standard and Poor's.
"Reset Date" shall mean the first day of each month.
"Resolution" shall mean Resolution No. 020-2018 adopted by the Board on
January 17, 2018, which, among other things, authorized the execution and delivery of
this Agreement and the issuance of the Master Notes.
"Standard and Poor's" shall mean S&P Global Ratings, and any successors and
assigns thereto.
"State" shall mean the State of Florida.
"Taxable Interest Rate" shall mean a variable rate of interest for Draws against
the Taxable Master Note equal to One Month LIBOR plus 85 basis points (0.85%).
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"Taxable Master Note" shall mean the Monroe County, Florida Taxable Master
Revenue Note (PNC Bank, National Association Line of Credit), Series 2018 authorized
to be issued by the Resolution and more particularly described in Article III hereof.
"Tax Certificate" shall have the meaning ascribed thereto in Section 2.03 hereof.
"Tax -Exempt Interest Rate" shall mean shall mean a variable rate of interest for
Draws against the Tax -Exempt Master Note equal to (80% of One Month LIBOR) plus
71 basis points (0.71%), as the same may be adjusted as described in Section 3.03 hereof.
"Tax -Exempt Master Note" shall mean the Monroe County, Florida Tax -
Exempt Master Revenue Note (PNC Bank, National Association Line of Credit),
Series 2018 authorized to be issued by the Resolution and more particularly described in
Article III hereof.
SECTION 1.02. INTERPRETATION. Unless the context clearly requires
otherwise, words of masculine gender shall be construed to include correlative words of
the feminine and neuter genders and vice versa, and words of the singular number shall
be construed to include correlative words of the plural number and vice versa. Any
capitalized terms used in this Agreement not herein defined shall have the meaning
ascribed to such terms in the Resolution. This Agreement and all the terms and
provisions hereof shall be construed to effectuate the purpose set forth herein and to
sustain the validity hereof.
SECTION 1.03. TITLES AND HEADINGS. The titles and headings of the
articles and sections of this Agreement, which have been inserted for convenience of
reference only and are not to be considered a part hereof, shall not in any way modify or
restrict any of the terms and provisions hereof, and shall not be considered or given any
effect in construing this Agreement or any provision hereof or in ascertaining intent, if
any question of intent should arise.
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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS;
SECURITY FOR NOTES
SECTION 2.01. REPRESENTATIONS BY THE COUNTY. The County
represents, warrants and covenants that:
(a) The County is a political subdivision of the State. Pursuant to the
Resolution, the County has duly authorized the execution and delivery of this Agreement
and the Master Notes, the performance by the County of all of its obligations hereunder
and under the Master Notes, and the issuance of the Master Notes.
(b) The County has complied with all of the provisions of the Constitution and
laws of the State, including the Act, and has full power and authority to enter into and
consummate all transactions contemplated by the Resolution, this Agreement, or under
the Master Notes, and to perform all of its obligations hereunder and under the Master
Notes. To the best knowledge of the County, the transactions contemplated hereby do
not conflict with the terms of any statute, order, rule, regulation, judgment, decree,
agreement, instrument or commitment to which the County is a party or by which the
County is bound.
(c) The County is duly authorized and entitled to issue the Master Notes and
execute and deliver this Agreement and, when this Agreement is executed and delivered
and the Master Notes are issued in accordance with the terms of this Agreement, the
Agreement and the Master Notes will each constitute a legal, valid and binding obligation
of the County enforceable in accordance with their respective terms, subject as to
enforceability to bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting creditors' rights generally, or by the exercise of judicial discretion in
accordance with general principles of equity.
(d) There are no actions, suits or proceedings pending or, to the best knowledge
of the County, threatened against or affecting the County, at law or in equity, or before or
by any governmental authority, that, if adversely determined, would materially impair the
ability of the County to perform the County's obligations under this Agreement or under
the Master Notes.
(e) The County will furnish to the Noteholder within 210 days after the close
of each Fiscal Year of the County a copy of the annual audited financial statements of the
County. The County shall also provide the Noteholder with a copy of the annual budget
of the County each year within 30 days of the adoption of such budget and any other
information reasonably requested by the Noteholder.
(f) The financial information concerning the County heretofore delivered to the
Noteholder is complete and correct and fairly presents the financial condition of the
County for the.period(s) referred to and has been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the period(s)
involved. There are no liabilities (of the type required to be reflected on balance sheets
prepared in accordance with generally accepted accounting principles), direct or indirect,
fixed or contingent, of the County as of the date of such financial information which are
not reflected therein. There has been no material adverse change in the financial
condition or operations of the County since the date of such information (and no such
material adverse change is pending or threatened, to the County's knowledge), and the
County has not guaranteed the obligations of, or made any investment in or loans to, any
Person except as disclosed in such information.
SECTION 2.02. GENERAL REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE NOTEHOLDER. The Noteholder hereby represents, warrants
and agrees that it is authorized to execute and deliver this Agreement and to perform its
obligations hereunder, and such execution and delivery will not constitute a violation of
its articles of incorporation or bylaws. Pursuant to the terms and provisions of this
Agreement, the Noteholder agrees to establish a revolving line of credit on behalf of the
County pursuant to which it will make one or more loans to the County for the purpose of
financing or refinancing Extraordinary Expenditures.
SECTION 2.03. TAX COVENANT. (a) In order to maintain the exclusion
from gross income for purposes of Federal income taxation of interest on the Draws made
against the Tax -Exempt Master Note, the County shall comply with each requirement of
the Code applicable to the Tax -Exempt Master Note and the Draws there against. In
furtherance of the covenant contained in the preceding sentence, the County agrees to
continually comply with the provisions of the Certificate as to Arbitrage and Certain Tax
Matters executed in connection with the issuance of the Tax -Exempt Master Note, as the
same may be amended or supplemented from time to time, as a source of guidance for
achieving compliance with the Code (referred to herein as the "Tax Certificate").
(b) The County shall make any and all rebate payments required to be made to
the United States Department of the Treasury in connection with the Tax -Exempt Master
Note pursuant to Section 148(f) of the Code.
(c) So long as necessary in order to maintain the exclusion from gross income
of interest on Draws against the Tax -Exempt Master Note for Federal income tax
purposes, the covenants contained in this Section shall survive the payments of such
Draws and the interest thereon, including any payment or defeasance thereof.
(d) The County shall not take or permit any action or fail to take any action
which would cause the Tax -Exempt Master Note to be an "arbitrage bond" within the
meaning of Section 148(a) of the Code.
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SECTION 2.04. MASTER NOTES AND DRAWS NOT TO BE
INDEBTEDNESS OF THE COUNTY OR STATE. The Master Notes, when
delivered by the County pursuant to the terms of this Agreement, and the Draws made
thereagainst, shall not be or constitute an indebtedness of the County, the State of Florida
or any political subdivision or agency thereof, within the meaning of any constitutional,
statutory or charter limitations of indebtedness, but shall be payable solely from the
Designated Revenues as herein provided. The Noteholder shall never have the right to
compel the exercise of the ad valorem taxing power of the County, or taxation in any
form on any property therein to pay the Draws or the interest thereon. The Draws and the
Master Notes are special and limited obligations payable as to principal and interest from
the Designated Revenues. The Master Notes are secured by a covenant of the County to
budget and appropriate Non -Ad Valorem Revenues to the extent and in the manner
provided in Section 2.06 hereof.
SECTION 2.05. SECURITY FOR MASTER NOTES AND DRAWS. The
Master Notes and Draws shall be secured by and payable from the Designated Revenues.
The County does hereby irrevocably pledge the Designated Revenues to the payment of
the principal of and interest on the Draws in accordance with the provisions hereof. The
pledge of and lien on such Designated Revenues shall attach with respect to each Draw at
the time it is made.
SECTION 2.06. COVENANT TO BUDGET AND APPROPRIATE NON -
AD VALOREM REVENUES. The County covenants and agrees to appropriate in its
annual budget, by amendment, if necessary, from Non -Ad Valorem Revenues lawfully
available in each Fiscal Year, amounts which shall be sufficient to pay debt service on the
Draws. Such covenant and agreement on the part of the County to budget and
appropriate such amounts of Non -Ad Valorem Revenues shall be cumulative to the extent
not paid, and shall continue until such Non -Ad Valorem Revenues or other legally
available funds in amounts sufficient to make all such required payments shall have been
budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant of the
County, the County does not covenant to maintain any services or programs, now
provided or maintained by the County, which generate Non -Ad Valorem Revenues.
Such covenant to budget and appropriate does not create any lien upon or pledge
of such Non -Ad Valorem Revenues, nor, except as provided in Section 2.08 herein, does
it preclude the County from pledging in the future its Non -Ad Valorem Revenues, nor
does it require the County to levy and collect any particular Non -Ad Valorem Revenues,
nor does it give the Noteholder a prior claim on the Non -Ad Valorem Revenues as
opposed to claims of general creditors of the County. Such covenant to appropriate Non -
Ad Valorem Revenues is subject in all respects to the payment of obligations secured by
a pledge of such Non -Ad Valorem Revenues heretofore or hereafter entered into
(including the payment of debt service on bonds and other debt instruments). However,
the covenant to budget and appropriate in its general annual budget for the purposes and
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in the manner stated herein shall have the effect of making Non -Ad Valorem Revenues
available for the payment of debt service on the Draws in the manner described herein
and in the Resolution and placing on the County a positive duty to appropriate and
budget, by amendment, if necessary, amounts sufficient to meet its obligations hereunder;
subject, however, in all respects to the restrictions of Section 129.07, Florida Statutes,
which provides, in part, that the governing body of each county make appropriations for
each Fiscal Year which, in any one year, shall not exceed the amount to be received from
taxation or other revenue sources; and subject, further, to the payment of services and
programs which are for essential public purposes affecting the health, welfare and safety
of the inhabitants of the County or which are legally mandated by applicable law.
SECTION 2.07. PAYMENT COVENANT. The County covenants that it
shall duly and punctually pay the principal of and interest on the Draws at the dates and
place and to the extent and in the manner provided herein and in the Master Notes
according to the true intent and meaning hereof and thereof and all other amounts due
under this Agreement. Failure to comply with this Section 2.07 shall result in an Event of
Default under Section 5.01(a) hereof.
SECTION 2.08. ANTI -DILUTION. During such time as any Draw remains
outstanding and unpaid hereunder, the County agrees and covenants with the Noteholder
that Non -Ad Valorem Revenues shall cover projected Maximum Annual Debt Service on
the Draws and maximum annual debt service on Debt by at least 1.2x. The calculations
required by the immediately preceding sentence shall be determined using the average of
actual Non -Ad Valorem Revenues for the prior two Fiscal Years based on the County's
annual audited financial statements. For purposes of such calculation, Maximum Annual
Debt Service on the Draws and maximum annual debt service on Debt shall be done on
an aggregate basis whereby the annual debt service for each is combined and the overall
maximum is determined.
For the purposes of determining maximum annual debt service for Debt pursuant
to the covenants contained in this Section 2.08, annual debt service on Debt means, with
respect to Debt that bears interest at a fixed interest rate, the actual annual debt service,
and, with respect to Debt which bears interest at a variable interest rate, annual debt
service on such Debt shall be determined assuming that interest accrues on such Debt at
the current "Bond Buyer Revenue Bond Index" as published in The Bond Buyer no more
than two weeks prior to any such calculation; provided, however, if any Debt, whether
bearing interest at a fixed or variable interest rate, constitutes Balloon Indebtedness, as
defined in the immediately following sentence, annual debt service on such Debt shall be
determined assuming such Debt is amortized over 25 years on an approximately level
debt service basis. For purposes of the foregoing sentence, "Balloon Indebtedness"
means Debt, 25% or more of the original principal of which matures during any one
Fiscal Year. In addition, with respect to debt service on any Debt which is subject to a
Qualified Hedge Agreement, interest on such Debt during the term of such Qualified
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Hedge Agreement shall be deemed to be the Hedge Payments coming due during such
period of time. With respect to debt service on any Debt with respect to which the
County elects to receive or is otherwise entitled to receive direct subsidy payments from
the United States Department of Treasury, when determining the interest on such Debt
for any particular interest payment date the amount of the corresponding subsidy payment
shall be deducted from the amount of interest which is due and payable with respect to
such Debt on the interest payment date, but only to the extent that the County reasonably
believes that it will be in receipt of such subsidy payment on or prior to such interest
payment date.
Notwithstanding any other provision herein, the County shall not make any Draw
hereunder that would cause it to violate the covenants contained in this Section 2.08.
SECTION 2.09. USE OF GRANT PROCEEDS. To the extent the County
receives any grant proceeds or other funds from any local, state or federal agency or
entity that are intended to pay or reimburse the County for any Extraordinary
Expenditures financed or refinanced with proceeds, of a Draw hereunder, the County
covenants and agrees to use such grant proceeds or other funds to pay debt service with
respect to the applicable Master Note.
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ARTICLE III
DESCRIPTION OF MASTER NOTES AND DRAWS; PAYMENT TERMS;
OPTIONAL PREPAYMENT
SECTION 3.01. DESCRIPTION OF THE MASTER NOTES AND
DRAWS. (a) At or prior to the date the County makes the initial Draw against the Tax -
Exempt Master Note pursuant to Section 4.01(b) of this Agreement, the County shall,
pursuant to the authority granted under the Resolution, issue and deliver a note to the
Noteholder, which note shall be in an amount equal to not exceeding FORTY MILLION
AND 00/100 DOLLARS ($40,000,000) and shall be designated as the "Monroe County,
Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line of
Credit), Series 2018". At or prior to the date the County makes the initial Draw against
the Taxable Master Note pursuant to Section 4.01(c) of this Agreement, the County shall,
pursuant to the authority granted under the Resolution, issue and deliver a note to the
Noteholder, which note shall be in an amount equal to not exceeding FORTY MILLION
AND 00/100 DOLLARS ($40,000,000) and shall be designated as the "Monroe County,
Florida Taxable Master Revenue Note (PNC Bank, National Association Line of Credit),
Series 2018". Notwithstanding anything herein to the contrary, the aggregate principal
amount of Draws that may be made and be outstanding against the Master Notes at any
one time is limited to $40,000,000 as provided in Section 3.01(c) hereof. The text of
each Master Note shall be substantially in the form attached hereto as Exhibit B, with
such omissions, insertions and variations as may be necessary and desirable to reflect the
particular terms of each Master Note. The provisions of the form of Master Note are
hereby incorporated in this Agreement.
(b) Each Master Note shall be dated the date of its delivery. Each Master Note
shall be executed in the name of the County by the manual signature of the Mayor and
the official seal of the County shall be affixed thereto and attested by the manual
signature of the Clerk. In case any one or more of the officers who shall have signed or
sealed a Master Note shall cease to be such officer of the County before such Master
Note so signed and sealed shall have been actually delivered, such Master Note may
nevertheless be delivered as herein provided and may be issued as if the person who
signed or sealed such Master Note had not ceased to hold such office. Each Master Note
may be signed and sealed on behalf of the County by such person who at the actual time
of the execution of such Master Note shall hold the proper office, although at the date
such Master Note shall actually be delivered, such person may not have held such office
or may have been so authorized.
(c) Through the Final Draw Date, the County shall be entitled to borrow, repay
and re -borrow funds from the Noteholder in accordance with the terms hereof provided
that the aggregate principal amount which is outstanding and owed to the Noteholder
under this Agreement and against both Master Notes does not exceed FORTY MILLION
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AND 00/100 DOLLARS ($40,000,000) at any one time. The County and the Noteholder
may mutually agree in writing to reduce the aggregate principal amount that may be
borrowed hereunder pursuant to Section 6.01 hereof. In such event, the County shall
execute and deliver new Master Note(s) to evidence such reduction. Each Draw made
against the Master Notes shall be designated as "[Tax -Exempt] [Taxable] Draw
Number " All Draws shall be made by the County in accordance with Article IV
hereof. All Draws made against the Tax -Exempt Master Note in accordance with Article
IV hereof shall bear interest from the respective Date of Issuance of such Draws, at the
Tax -Exempt Interest Rate, as the same may be adjusted pursuant to Section 3.03 hereof.
All Draws made against the Taxable Master Note in accordance with Article IV hereof
shall bear interest from the respective Date of Issuance of such Draws at the Taxable
Interest Rate.
(d) Subject to the adjustments set forth in Section 3.03 hereof which shall
apply only to Draws against the Tax -Exempt Master Note, all Draws made against a
Master Note shall bear interest at the applicable Interest Rate. The applicable Interest
Rate shall be adjusted as of each Reset Date to reflect changes in the Prime Rate or One -
Month LIBOR, as the case may be. Interest on all Draws made against the Master Notes
shall be payable semi-annually on February 1 and August 1 of each year (the "Interest
Payment Date") so long as any amount under the Master Notes remains outstanding,
interest on a particular Draw commencing on the first Interest Payment Date which next
succeeds the date of the Draw. Principal of all Draws shall be due and payable on the
Final Maturity Date. Each Draw must be in a principal amount no less than $2,000,000
and must be made in integral multiples of $1,000,000 in excess thereof. Each Draw must
be made on a Reset Date. When all Draws have been paid in full in accordance with the
terms hereof and no other Draws may be made hereunder, the Noteholder shall cancel the
Master Notes and deliver them to the County or shall otherwise provide evidence to the
County that such Master Notes have been cancelled. Interest on all Draws made against
the Master Notes shall be calculated on a 30/360-day basis.
The outstanding principal amount of all Draws against the Tax -Exempt Master
Note and/or the outstanding principal amount of all Draws against the Taxable Master
Note as of the Final Draw Date shall be amortized through the Final Maturity Date on an
approximately level annual debt service basis, assuming for purposes of this calculation
the applicable Interest Rate then in effect for each Master Note, with principal being due
and payable on August 1 of each year commencing August 1, 2020. The principal
amortization schedules are subject to the Noteholder's prior written approval, such
approval not to be unreasonably withheld. The County shall provide the Noteholder with
the proposed principal amortization schedules within 30 days of the Final Draw Date.
(e) All payments of principal of and interest on Draws made against the Master
Notes shall be payable in any coin or currency of the United States which, at the time of
payment, is legal tender for the payment of public and private debts and shall be made to
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the Noteholder (i) in immediately available funds, (ii) by delivering to the Noteholder no
later than the payment date a check or draft of the County, or (iii) in such other manner as
the County and the Noteholder shall agree upon in writing.
(f) Commencing May 1, 2018, during such period of time thereafter as the
aggregate principal amount of Draws that are outstanding hereunder is less than 50% of
the maximum aggregate principal amount that may be drawn and outstanding hereunder,
the County will be charged a non-use fee equal to 10 basis points (0.10%) per annum
(calculated on a 30/360 day basis) of the principal amount not drawn against the Master
Notes. Such fee shall be due and payable quarterly in arrears on the first day of May,
August, November and February 1 of each year so long as the outstanding principal
amount of Draws hereunder is less than 50% of the maximum aggregate principal amount
that may be drawn and outstanding hereunder. In accordance with Section 3.01(c) and
Section 6.01 hereof, the County and the Noteholder may agree in writing to reduce the
maximum aggregate principal amount of Draws that may be made hereunder at any time
and the fee described hereunder shall be adjusted accordingly. Except as provided in this
Section 3.01(f) and Section 6.01, the Noteholder shall pay for all of its costs, including
any legal fees and expenses, relating to servicing the line of credit. The County shall pay
legal fees of Bryant Miller Olive P.A., counsel for the Noteholder, in the amount of
$12,500 in connection with the initial issuance of the Master Notes.
SECTION 3.02. OPTIONAL PREPAYMENT. The County may prepay and
redeem any Draw or all Draws made against a .Master Note, in whole or in part, on any
Reset Date by paying to the Noteholder the principal amount of the Draw to be prepaid,
together with the unpaid interest accrued on the amount of principal so prepaid to the date
of such prepayment, without any prepayment premium or penalty. Each prepayment of a
Draw shall be made on such Reset Date and in such principal amount as shall be
specified by the County in a notice delivered to the Noteholder not less than five (5)
business days prior thereto specifying the principal amount of the Draw or Draws to be
prepaid and the date of such prepayment. Notice having been given as aforesaid," the
principal amount of the Draw stated in such notice or the whole thereof, as the case may
be, shall become due and payable on the prepayment date stated in such notice, together
with interest accrued and unpaid to the prepayment date on the principal amount then
being paid. If on the prepayment date moneys for the payment of Draw or portion
thereof to be prepaid, together with interest to the prepayment date on such amount, shall
have been paid to the Noteholder as above provided, then from and after the prepayment
date interest on such portion of the Draw shall cease to accrue. If said moneys shall not
have been so paid on the prepayment date, such principal amount of such Draw or portion
thereof shall continue to bear interest until payment thereof at the rate or rates provided
for in this Agreement.
Upon any partial prepayment in accordance with this Agreement which occurs
after the Final Draw Date, the principal amortization shall be revised in accordance with
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the mutual agreement of the County and the Noteholder. In the absence of any such
mutual agreement, prepayments shall be applied in inverse order of maturity.
SECTION 3.03. ADJUSTMENT TO TAX-EXEMPT INTEREST RATES.
In the event of a Determination of Taxability, the Tax -Exempt Interest Rate on all Draw
amounts outstanding under the Tax -Exempt Master Note, whether then outstanding or
funded after the Determination of Taxability, shall be immediately increased to the
Taxable Interest Rate; provided, however, such Taxable Interest Rate shall never exceed
the maximum rate allowable by law. Immediately upon a Determination of Taxability,
the County agrees to pay to the Noteholder, the Additional Amount. "Additional
Amount" means (i) the difference between (A) interest on the outstanding drawn amount
(which may have increased or decreased during the hereinafter defined Taxable Period)
for the period commencing on the date on which the interest on such drawn amount (or
portion thereof) is deemed to have lost its tax-exempt status and ending on the effective
date of the adjustment of the Tax -Exempt Interest Rate to the Taxable Interest Rate (the
"Taxable Period") at a rate per annum equal to the Taxable Interest Rate and (B) the
aggregate amount of interest paid on such drawn amount during the Taxable Period at the
Tax -Exempt Interest Rate applicable to such drawn amount prior to the adjustment to the
Taxable Interest Rate, plus (ii) any penalties, fines, fees, costs and interest paid or
payable by the Noteholder to the Internal Revenue Service by reason of such
Determination of Taxability.
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ARTICLE IV
CONDITIONS FOR DRAWS
SECTION 4.01. CONDITIONS FOR DRAWS. (a) In connection with any
Draw, the Noteholder shall not be obligated to make any loan under this Agreement
unless at or prior to the date specified for the making thereof the County delivers to the
Noteholder a Draw Request of the County's intention to make a Draw at least seven (7)
business days prior to the date specified for such Draw, which specified date for such
Draw must be a Reset Date. Such Draw Request shall be substantially in the form
attached hereto as Exhibit C. Such Draw Request must be signed by an Authorized
Officer in connection with each Draw. On or prior to the date of any Draw, the County
shall provide the Noteholder with a certificate signed by an Authorized Officer
substantially in the form attached hereto as Exhibit A.
(b) On or before the date the initial Draw is made against the Tax -Exempt
Master Note, the County shall have caused to be delivered to the Noteholder the Tax -
Exempt Master Note and the following items in form and substance acceptable to the
Noteholder: '
(i) A fully executed Tax Certificate relating to the Tax -Exempt Master
Note and such initial Draw;
(ii) A copy of a completed and executed Form 8038-G to be filed with
the Internal Revenue Service;
(iii) An opinion of Bond Counsel to the effect that (A) the Agreement
and the Tax -Exempt Master Note, as the case may be, have been duly authorized
by the County and are enforceable obligations in accordance with their terms
(enforceability of such instruments may be subject to standard bankruptcy
exceptions and the like), and (B) subject to certain standard assumptions, interest
on the Tax -Exempt Master Note and initial Draw shall be excluded from gross
income for federal income tax purposes and will not be treated as a preference
item for purposes of computing the alternative minimum tax imposed by
Section 55 of the Code (however, the interest on the Tax -Exempt Master Note is
taken into account in determining adjusted current earnings for the purpose of
computing the alternative minimum tax on certain corporations (as defined for
federal tax purposes));
(iv) An opinion of the County Attorney in form and substance acceptable
to the Noteholder and Bond Counsel; and
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(v) Such additional certificates, instruments and other documents as the
Noteholder or its Counsel or Bond Counsel, or the County Attorney may deem
necessary or appropriate.
(c) On or before the date the initial Draw is made against the Taxable Master
Note, the County shall have caused to be delivered to the Noteholder the Taxable Master
Note and the following items in form and substance acceptable to the Noteholder:
(i) An opinion of Bond Counsel to the effect that the Agreement and the
Taxable Master Note, as the case may be, have been duly authorized by the
County and are enforceable obligations in accordance with their terms
(enforceability of such instruments may be subject to standard bankruptcy
exceptions and the like);
(ii) An opinion of the County Attorney in form and substance acceptable
to the Noteholder and Bond Counsel; and
(iii) Such additional certificates, instruments and other documents as the
Noteholder or its Counsel or Bond Counsel, or the County Attorney may deem
necessary or appropriate.
(d) Upon satisfaction of the conditions set forth in paragraphs (a) and (b)
and/or (c) above, the County may borrow, repay and re -borrow funds from the
Noteholder in accordance with the terms hereof provided that the aggregate principal
amount which is outstanding and owed to the Noteholder under this Agreement and
against both Master Notes does not exceed FORTY MILLION AND 00/100 DOLLARS
($40,000,000) at any one time. The County shall apply the proceeds of each Draw to
finance or refinance, or reimburse itself for prior expenditures incurred for, costs of
Extraordinary Expenditures and costs related to the preparation, execution and delivery of
this Agreement and the issuance of the Master Notes.
(e) Each Draw Request shall constitute a covenant and reaffirmation of the
County that the warranties and representations in this Agreement and the Master Notes
are still true and correct, that the Resolution, Master Notes and this Agreement are in full
force and effect and have not been amended, modified or superseded except as provided
pursuant to Section 6.01 hereof, that all of the terms and conditions of this Agreement
have been and are being complied with, and that no Event of Default or event which, with
the giving of notice or passage of time or both, would constitute an Event of Default
hereunder has occurred as of the date of the Draw.
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ARTICLE V
EVENTS OF DEFAULT; REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. An "Event of Default" shall be
deemed to have occurred under this Agreement if:
(a) The County shall fail to make timely payment of principal or interest then
due on any Draw;
(b) Any representation or warranty of the County contained in this Agreement
or any certificate provided the Noteholder under Article IV shall prove to be untrue in
any material respect on the date made or deemed made;
(c) Any covenant of the County contained in this Agreement shall be breached
or violated for a period of thirty (30) days after the County's notice of such breach or
violation, unless the Noteholder shall agree in writing to an extension of such time prior
to its expiration;
(d) There shall occur the dissolution or liquidation of the County, or the filing
by the County of a voluntary petition in bankruptcy, or the commission by the County of
any act of bankruptcy, or adjudication of the County as a bankrupt, or assignment by the
County for the benefit of its creditors, or appointment of a receiver for the County, or the
entry by the County into an agreement of composition with its creditors, or the approval
by a court of competent jurisdiction of a petition applicable to the County in any
proceeding for its reorganization instituted under the provisions of the Federal
bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now
be in effect or hereafter amended;
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(e) This Agreement is determined to be unenforceable by a competent court of
law; or
(f) The County defaults on any other Debt or any other Debt is accelerated as a
remedy in the event of a default thereunder.
SECTION 5.02. REMEDIES. (a) If any Event of Default shall have occurred
and be continuing, the Noteholder or any trustee or receiver acting for the Noteholder
may either at law or in equity, by suit, action, mandamus or other proceedings in any
court of competent jurisdiction, protect and enforce any and all rights under the Laws of
the State of Florida, or granted and contained in this Agreement, and may enforce and
compel the performance of all duties required by this Agreement or by any applicable
statutes to be performed by the County or by any officer thereof, including but not limited
to specific performance. No remedy herein conferred upon or reserved to the Noteholder
is intended to be exclusive of any other remedy or remedies, and each and every such
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remedy shall be cumulative, and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. No failure or
delay by the Noteholder to insist upon the strict performance of any term, covenant or
agreement contained herein or in the Master Notes, or to exercise any right, power or
remedy consequent upon a breach thereof, shall constitute a waiver of any such term,
covenant or agreement or of any such breach, or preclude the Noteholder from exercising
any such right, power or remedy at any later time or times.
(b) If an Event of Default occurs, the County shall also be obligated to pay as
part of the indebtedness evidenced by the Master Notes and Draws thereunder, all costs
of collection and enforcement hereof, including such reasonable attorneys' fees as may be
incurred by any Noteholder, including on appeal or incurred in any proceeding under
bankruptcy laws as they now or hereafter exist.
(c) Upon the occurrence and during the continuation of an Event of Default the
entire outstanding principal amount of all Draws made against the Master Notes shall
bear interest at the Default Rate and the Noteholder shall not be obligated to honor any
further Draws hereunder.
[Remainder of page intentionally left blank]
20
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. AMENDMENTS, CHANGES OR MODIFICATIONS TO
THE AGREEMENT. This Agreement shall not be amended, changed or -modified
without the prior written consent of the Noteholder and the County, it being understood
that the fees and expenses of the Noteholder relating to any amendments which are
requested by the County shall be borne by the County.
SECTION 6.02. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which, when so executed and delivered, shall be an
original; but such counterparts shall together constitute but one and the same Agreement,
and, in making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart.
SECTION 6.03. SEVERABILITY. This Agreement and the Master Notes
constitute the entire agreement of the parties with respect to the subject matter hereof,
and supersede all prior and contemporaneous writings or agreements. If any clause,
provision or section of this Agreement shall be held illegal or invalid by any court, the
invalidity of such provisions or sections shall not affect any other provisions or sections
hereof, and this Agreement shall be construed and enforced to the end that the
transactions contemplated hereby be effected and the obligations contemplated hereby be
enforced, as if such illegal or invalid clause, provision or section had not been contained
herein.
SECTION 6.04. TERM OF AGREEMENT. This Agreement shall be in full
force and effect from the date hereof and shall continue in effect as long as any amount is
outstanding against a Master Note. The commitment of the Noteholder to honor Draws
in accordance with the terms hereof shall expire on the Final Draw Date.
SECTION 6.05. NOTICE OF CHANGES IN FACT. Within 10 days of
becoming aware of the same, the County will notify the Noteholder of (a) any change in
any material fact or circumstance represented or warranted by the County in this
Agreement or in connection with the issuance of the Master Notes, and (b) any default or
event which, with notice or lapse of time or both, could become an Event of Default
under this Agreement, specifying in each case the nature thereof and what action the
County has taken, is taking and/or proposed to take with respect thereto.
SECTION 6.06. NOTICES. Any notices or other communications required
or permitted hereunder shall be sufficiently given if delivered personally or sent
registered or certified mail, postage prepaid, to Monroe County, Florida, 500 Whitehead
Street, Key West, Florida 33040, Attention: Monroe County Clerk of Court, with a copy
21
to: County Administrator, 1100 Simonton Street, Suite 205, Key West, Florida 33040,
and to the Noteholder, PNC Bank, National Association, 420 S. Orange Ave., Suite 300,
Orlando, Florida 32801, or at such other address as shall be furnished in writing by any
such party to the other, and shall be deemed to have been given as of the date so
delivered or deposited in the United States mail.
SECTION 6.07. APPLICABLE LAW. The substantive laws of the State of
Florida shall govern this Agreement.
SECTION 6.08. INCORPORATION BY REFERENCE. All of the terms
and obligations of the Resolution are hereby incorporated herein by reference as if said
Resolution was fully set forth in this Agreement.
SECTION 6.09. ASSIGNMENT. The rights and obligations of the
Noteholder hereunder and under the Master Notes may be assigned in whole to another
financial institution prior to the end of the period during which Draws may be made, and
to any person that is an "accredited investor" (as that term is defined in the regulations
promulgated under the Securities Act of 1933, as amended), after the end of such period,
without the consent of the County. The rights and obligations of the County hereunder
and under the Master Notes may not be assigned, transferred, conveyed or encumbered
without the consent of the Noteholder. The County shall maintain a register of assigns of
this Agreement and the Master Notes. This Agreement and the Master Notes shall be
binding on the parties and their respective permitted successors and assigns.
SECTION 6.10. WAIVER OF JURY TRIAL; APPLICABLE LAW AND
JURISDICTION. (A) To the extent permitted by applicable law, the County,
knowingly, voluntarily and intentionally waives any right it may have to a trial by jury in
respect of any litigation based on, or arising out of, under or in connection with the
Resolution, the Master Notes or this Agreement, or any course of conduct, course of
dealing, statements (whether verbal or written) or actions of the County or the
Noteholder.
(B) The substantive laws of the State of Florida shall govern this Agreement.
The County submits to the jurisdiction of Florida courts and federal courts and agrees that
venue for any suit concerning this Agreement shall be in Monroe County, Florida and the
Southern District of Florida.
SECTION 6.11. USA PATRIOT ACT COMPLIANCE NOTIFICATION.
The Noteholder hereby notifies the County that pursuant to the provisions of the USA
PATRIOT Act, it is required to obtain, verify and record information that identifies the
County. The County will provide the Noteholder with all documentation and other
information the Noteholder requests in order to comply with its ongoing obligations
under applicable "know your customer" and anti -money laundering regulations, including
the USA PATRIOT Act.
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth herein.
(SEA
AT]
0
Clerk of the Circuit Court and
Ex-Officio Clerk to the Board
APPROVED AS TO FORM AND
LEGAL SUFFICIENCY:
By:
CouiUy Attorney's Office
MONROE COUNTY, FLORIDA
By:
Mayor
PNC BANK, NATIONAL ASSOCIATION
By: �AZXS4%��
Name: Nick Ayotte
Title: Vice President, Public Finance
o
23
EXHIBIT A
FORM OF DRAW CERTIFICATE
The undersigned, on behalf of Monroe County, Florida (the "County"), in
connection with a Draw (the "Draw") to be funded on the day of ,
in the amount of $ , pursuant to that certain Line of Credit Agreement
dated as of February 1, 2018 (the "Agreement"), between the County and PNC Bank,
National Association (the "Noteholder"), HEREBY CERTIFIES as follows:
1. The capitalized terms used herein that are not otherwise defined herein shall
have the meanings ascribed thereto in the Agreement.
2. The Resolution is in full force and effect and has not been rescinded,
repealed, modified or amended since the date of its adoption except as otherwise
described herein.
3. The Agreement is in full force and effect and has not been terminated,
modified or amended since the date of its execution except as otherwise described herein.
4. The County has complied in all respects with the terms and provisions of
the Resolution, the Master Notes and the Agreement and the County is not in default
under any provisions of either the Resolution or the Agreement.
5. All of the representations and warranties contained in the Agreement, the
Master Notes and the Resolution are true and correct as of the date hereof.
6. The Extraordinary Expenditures to be financed or refinanced with proceeds
of the Draw has been duly authorized and approved by the Board.
7. The County is in full compliance with the Tax Certificate relating to the
Tax -Exempt Master Note.
8. The County has delivered to the Noteholder a_Draw Request with respect to
the Draw in accordance with and in compliance with the Agreement; all necessary
approvals of or by the County which are required as a condition precedent to making the
Draw have been satisfied.
9. The proceeds of the Draw will be used solely to finance or refinance
Extraordinary Expenditures to be funded by the Draw and described in the Draw Request
referred to in Paragraph 8 above.
10. All terms, conditions, representations, warranties and covenants contained
in the Agreement, the Resolution and the Master Notes are incorporated by reference as if
fully restated herein.
A-1
11. Upon the funding of the Draw, the County shall be in compliance with the
anti -dilution test set forth in Section 2.08 of the Agreement.
Executed as of this day of
MONROE COUNTY, FLORIDA
By: _
Title:
A-2
EXHIBIT B
UNITED STATES OF AMERICA
STATE OF FLORIDA
MONROE COUNTY, FLORIDA
[TAX-EXEMPT] [TAXABLE] MASTER REVENUE NOTE
(PNC Bank, National Association Line of Credit), Series 2018
Interest Rate Date of Issuance
Final
Maturity Date
Variable February 1, 2018 August 1, 2022
MONROE COUNTY, FLORIDA (the "County"), for value received, hereby
promises to pay, solely from the Designated Revenues described in the within mentioned
Agreement, to the order of PNC BANK, NATIONAL ASSOCIATION, or its successors
or assigns (the "Noteholder"), the lesser of the principal sum of FORTY MILLION AND
00/100 DOLLARS ($40,000,000.00) or so much thereof as may be advanced and
outstanding (the "Advanced Amount") pursuant to that certain Line of Credit Agreement
by and between the Noteholder and the County, dated as of February 1, 2018 (the
"Agreement"), and to pay interest on such Advanced Amount from the dates amounts are
advanced hereunder and under the Agreement from time to time, or from the most recent
date to which interest has been paid, at the Interest Rate (as determined and defined in the
Agreement and subject to adjustment as provided in the Agreement) semi-annually on
February 1 and August 1 of each year, commencing with respect to each advance
hereunder on the first February 1 or August 1 that follows the date of such advance until
such Advanced Amount shall have been paid. Interest shall be calculated on a 30/360
day basis. The Advanced Amount hereof shall be payable on the Final Maturity Date.
Such Advanced Amount and interest is payable in any coin or currency of the United
States of America which, at the time of payment, is legal tender for the payment of public
and private debts.
The outstanding Advanced Amount as of August 1, 2019 shall be amortized
through the Final Maturity Date on an approximately level annual debt service basis,
assuming for purposes of this calculation the Interest Rate then in effect for this Note,
with principal being due and payable on August 1 of each year commencing August 1,
2020, through and including August 1, 2022, in accordance with the Agreement. The
principal amortization schedule is subject to the Noteholder's prior written approval, such
approval not to be unreasonably withheld. The County shall provide the Noteholder with
the proposed principal amortization schedule within 30 days of the Final Draw Date (as
defined in the Agreement).
All payments of principal of and interest on the Advanced Amount shall be
payable in any coin or currency of the United States which, at the time of payment, is
legal tender for the payment of public and private debts and shall be made to the
Noteholder (1) in immediately available funds, (2) by delivering to the Noteholder no
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later than the payment date a check or draft of the County, or (3) in such other manner as
the County and the Noteholder shall agree upon in writing.
This Note is issued under the authority of and in full compliance with the
Constitution and statutes of the State of Florida, including, particularly, Chapter 125,
Florida Statutes, and other applicable provisions of law, Resolution No. 020-2018 duly
adopted by the County on January 17, 2018 (the "Resolution"), as such Resolution may
be amended and supplemented from time to time, and is subject to all terms and
conditions of the Resolution and the Agreement. Any term used in this Note and not
otherwise defined shall have the meaning ascribed to such term in the Agreement.
This Note is being issued to finance or refinance the costs of Extraordinary
Expenditures, as described in the Agreement. This Note is secured by the County's
covenant contained in Section 2.06 of the Agreement to budget and appropriate legally
available Non -Ad Valorem Revenues and a pledge of the Designated Revenues, all as
provided in the Agreement. This Note shall be payable from the Designated Revenues as
described in the Agreement.
This Note shall bear interest at the Interest Rate on a 30/360-day year basis. Such
Interest Rate is subject to adjustment as provided in Section 3.03 of the Agreement. The
Noteholder shall provide to the County upon request such documentation to evidence the
amount of interest due with respect to any Draw (as defined in the Agreement) against
the Note. Upon the occurrence and during the continuation of an Event of Default (as
defined in the Agreement), this Note shall bear interest at the Default Rate (as defined in
the Agreement).
Notwithstanding any provision in this Note to the contrary, in no event shall the
interest contracted for, charged or received in connection with this Note (including any
other costs or considerations that constitute interest under the laws of the State of Florida
which are contracted for, charged or received) exceed the maximum rate of interest
allowed under the State of Florida as presently in effect.
All payments made by the County hereon shall apply first to accrued interest, and
then to the principal amount then due on this Note.
IT IS EXPRESSLY AGREED BY THE REGISTERED HOLDER OF THIS
NOTE THAT THE FULL FAITH AND CREDIT OF THE COUNTY, THE STATE OF
FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, ARE
NOT PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON
THIS NOTE AND THAT SUCH HOLDER SHALL NEVER HAVE THE RIGHT TO
REQUIRE OR COMPEL THE EXERCISE OF ANY TAXING POWER OF THE
COUNTY, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR
AGENCY THEREOF, TO THE PAYMENT OF SUCH PRINCIPAL AND INTEREST.
THIS NOTE AND THE OBLIGATION EVIDENCED HEREBY SHALL NOT
M.
CONSTITUTE A LIEN UPON ANY PROPERTY OF THE COUNTY, BUT SHALL
CONSTITUTE A LIEN ONLY ON, AND SHALL BE PAYABLE SOLELY FROM,
THE DESIGNATED REVENUES TO THE EXTENT AND IN THE MANNER
PROVIDED IN THE AGREEMENT. THIS NOTE IS SECURED BY A COVENANT
OF THE COUNTY TO BUDGET AND APPROPRIATE NON -AD VALOREM
REVENUES TO THE EXTENT AND IN THE MANNER PROVIDED IN THE
AGREEMENT.
The rights and obligations of the Noteholder hereunder and under the Agreement
may be assigned in whole to another financial institution prior to the end of the period
during which Draws (as defined in the Agreement) may be made, and to any person that
is an "accredited investor" (as that term is defined in the regulations promulgated under
the Securities Act of 1933, as amended), after the end of such period, without the consent
of the County.
The County may prepay and redeem the Advanced Amount, in whole or in part, in
accordance with the provisions of Section 3.02 of the Agreement.
Reference to the Resolution and the Agreement and any and all resolutions
supplemental thereto and modifications and amendments thereof and to the Act is made
for a description of the provisions and covenants securing this Note, the nature, manner
and extent of enforcement of such provisions and covenants, and the rights, duties,
immunities and obligations of the County.
It is hereby certified, recited and declared that all acts, conditions and prerequisites
required to exist, happen and be performed precedent to and in the execution, delivery
and the issuance of this Note do exist, have happened and have been performed in due
time, form and manner as required by law, and that the issuance of this Note is in full
compliance with and does not exceed or violate any constitutional or statutory
limitation. It is further certified that all of the representations, warranties, terms,
conditions, and covenants made and set forth in the Agreement, the Resolution and in the
ancillary and closing documents relevant to this Note are remade and incorporated fully
by reference herein.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the County caused this Note to be signed by the
manual signature of the Mayor and the seal of the County to be affixed hereto or
imprinted or reproduced hereon, and attested by the manual signature of the Clerk, and
this Note to be dated the Date of Issuance set forth above.
(SEAL)
Attest:
do
Clerk of the Circuit Court and
Ex-Officio Clerk to the Board
APPROVED AS TO FORM AND
LEGAL SUFFICIENCY:
go
County Attorney's Office
MONROE COUNTY, FLORIDA
51
Mayor
EXHIBIT C
FORM OF DRAW REQUEST
The undersigned, on behalf of Monroe County, Florida (the "County"), hereby makes
this Draw Request in accordance with Section 4.01(a) of that certain Line of Credit
Agreement dated as of February 1, 2018 (the "Agreement"), between the County and PNC
Bank, National Association (the "Noteholder") and in connection with the Monroe County,
Florida [Tax -Exempt] [Taxable] Master Revenue Note (PNC Bank, National Association
Line of Credit), Series 2018, dated as of February 1, 20 (the "Note").
Type of Draw: [Tax -Exempt] [Taxable]
Draw Amount: $
Undrawn Amount (taking into account the amount of this Draw): $
Date of Draw:
Description of Extraordinary Expenditures:
Executed and made a part of the Agreement and the Note as of this day of
MONROE COUNTY, FLORIDA
By: _
Title:
APPROVED:
By: _
Title:
C-1
December 19, 2017
Monroe County Purchasing Department
1100 Simonton Street
Suite 2-213
Key West, FL 33040
FAO Kevin Madok, County Clerk
Cynthia Hall, Assistant County Attorney
Sergio Masvidal, PFM
Pete Verona, PFM
Re: Monroe County, Florida — Request for Proposals: Revolving, Taxable or Tax Exempt (NBQ)
$40,000,000 Line of Credit
Good afternoon,
On behalf of The PNC Financial Services Group ("PNC"), attached please find PNC Bank, N.A.'s ("PNC
Bank") response to Monroe County, Florida's (the "County") Request for Proposals for a Revolving, Taxable
or Tax Exempt (NBQ) Line of Credit (the "Line" or "Credit Facility") in an amount not to exceed $40,000,000
(the "UP"). PNC Bank is excited for the opportunity to assist the County in the completion of this
transaction. .
In response to the RFP, PNC Bank is offering a floating rate, Taxable or Tax Exempt NBQ, Revolving Line
of Credit Facility for a total of 54 months. PNC is offering the requested 18-month revolving period followed
by a three-year term out and is also offering the option for an extended revolving period, not to exceed 54
months for maximum flexibility.
PNC brings a team -oriented approach to each financing, offering deep industry experience and sound
technical expertise. Furthermore, PNC Bank believes in developing full relationships with its clients. We
work hard to comprehensively understand our clients' unique financial needs, and leverage the complete
capabilities of the bank to respond with thorough, thoughtful solutions.
Once again, PNC is pleased to be able to support the County in this credit financing solution and aims to
get the transaction completed in a timely fashion. If you have any questions or need any additional
information, please do not hesitate to contact me.
Regards, /
Nick Ayotte - Vice President, Public Finance
PNC Bank, National Association
16740 San Carlos Blvd
Ft. Myers, FL 33908
(T): 239-437-3736
(F): 239-433-0359
This Summary of Terms and Conditions is not a commitment or an offer to lend and does
not create any obligation on the part of the Bank. The Bank will not be deemed. to extend
any commitment to the Borrower unless and until a formal commitment letter is issued.
This outline is only a brief description of the principal terms of the suggested loan and is
intended for discussion purposes only.
MONROE COUNTY, FLORIDA
SUMMARY OF TERMS AND CONDITIONS
December 19, 2017
Borrower Monroe County, Florida ("County" or the "Borrower")
Bank PNC Bank, National Association (the "Bank")
Amount Subject to credit approval and documentation, PNC proposes to
provide:
Credit Facility: A Taxable or Tax -Exempt (NBQ) Revolving Line of
Credit for up to $40,000,000 (the "Line" or "Credit Facility")
Purpose The proceeds of the Credit Facility will be drawn upon to provide
funding for costs of repairs and improvements, including debris
pickup, related to Hurricane Irma, and to pay the costs of issuance
related to the Line. This offering is for a private placement on the
Bank's balance sheet (no CUSIP number).
Collateral The payment of the principal and interest shall be secured by a
CB&A from the County's legally available Non -Ad Valorem
Revenues. Such covenants and agreement plus an Anti -Dilution
Test which will be the same as per the County's other CB&A debt at
1.20 times while this Credit Facility remains outstanding.
Amortization, Interest &
Maturity Taxable or NBQ Tax -Exempt Revolving Line of Credit Facility:
The initial revolving period will be 18 months from the Closing Date
with any outstanding balance at the end of the revolving period
amortized over a 36 month period. The County has the option to
request a longer revolving period beyond the first 18 months to a
maximum of 54 months (the "Final Maturity Date") but the request
must be made prior to closing. Semi-annual interest -only payments,
based on the drawn amounts, every April 1st and October 1st
commencing on April 1st, 2018 (30/360) until the Final Maturity Date
which will be 54 months from the Closing Date. Full outstanding
Monroe County, Florida - $40,000,000 Taxable or Tax Exempt (NBQ) Revolving Line of
Credit Facility
Summary of Terms and Conditions
Variable Interest
Rates (30/360)
balances with all accrued interest will be due and payable, in full, at
the Final Maturity Date.
Minimum draws amounts will be in no less than $2,000,000 and in
denominations of $1,000,000 thereafter. Draws are also limited to
one draw per month and must be made on the 1 Month Libor reset
date.
Option 1 Taxable:
1 Month Libor + 85 basis points
Option 2 Tax -Exempt NBQ:
(70% x 1 Month Libor) + 54 basis points
Option 3 Tax -Exempt NBQ:
(80% x 1 Month Libor) + 71 basis points
Event of Taxability For Options 2 and 3, in the event determination of taxability shall
occur for any reason, in addition to the amounts required to be paid
with respect to the Loan, the Issuer shall be obligated to pay to the
Purchaser an amount equal to the positive difference, if any,
between the amount of interest that would have been paid during the
period of taxability if the Loan had borne interest at a taxable rate
and the interest actually received by the Purchaser with respect to
the Loan, together with penalties, interest and other costs incurred
by the Purchase in connection therewith.
Margin Rate Factor For Option 2, in the event of a change in the Purchaser's corporate
tax rate (from 35%) during any period where interest is accruing on a
tax-exempt basis causes a reduction in the tax equivalent yield on
the Loan, the interest payable on the Loan shall be increased to
compensate for such change in the effective yield to a rate
calculated by multiplying the interest rate on the Loan by the ratio
equal to (1 minus A) divided (1 minus B), where A equals the
Purchaser's corporate tax rate in effect as of the date of the
corporate tax rate adjustment as announced by the IRS and B
equals the Purchaser's corporate tax rate in effect on the date of the
original issuance of the Loan. The Margin Rate Factor will not be
applicable for Option 3.
Fixed Interest Rates Because draw schedules are not available and future estimated
balances and repayments are unknown, a fixed rate cannot be given
at this time. However, the Bank is willing to offer a fixed rate during
the term -out provision closer to when the County establishes a
clearer picture of a term out balance and period.
Monroe County, Florida - $40,000,000 Taxable or Tax Exempt (NBQ) Revolving Line of
Credit Facility
Summary of Terms and Conditions
Unutilized Fees At the three (3) month mensiversary, 50% of the Credit Facility must
be drawn upon, or fees for unutilized amounts will be paid quarterly
in arrears at 10 basis points per annum (30/360).
Libor Floor Libor will have a floor rate of 0.00%
Default Rate Prime + 3.00% or maximum allowable by law, whichever is less.
Commitment Reduction Subject to a legal amendment and mutual written agreement by both
the County and the Bank, the County has the ability to reduce the
commitment about of the Credit Facility while it remains outstanding.
Prepayment Prepayment at any time and without penalty. The County must give
the Bank written prepayment notice no less than five (5) business
days prior to a repayment and the Prepayment must be made on a
1-Month Libor reset date.
If the County considers a fixed rate during the term out period, the
prepayment will be subject to the Bank's standard make -whole
provisions.
Covenants Affirmative and negative covenants will be specified by the Bank for
inclusion in the Credit Facility Agreement including but not limited to
those listed in the County's existing CB&A debt.
The County covenants that it will use the proceeds from federal,
state, county or municipal grants moneys, receipt or reimbursements
received by the County relative to the clean-up, collection and
disposal of debris as well as other extraordinary expenses caused by
the 2017 hurricanes to pay down the Credit Facility.
Expenses All expenses incurred by the Bank shall be paid by the Borrower.
These include, but are not limited to, fees and expenses of legal
counsel (inside and outside) and any other expenses in connection
with documenting, closing, monitoring or enforcing the Credit Facility
and shall be payable at closing or otherwise on demand. Payment
by Borrower of expenses described above shall not be contingent
upon the closing of the Credit Facility. Legal fees will be for the
account of the Borrower after documentation of the transaction has
started. If the County Attorney is comfortable, Mr. Duane Draper of
Bryant Miller Olive P.A. will again serve as bank counsel and review -
only fees for the Credit Facility will be no greater than $12,500.
Please also see Condition 6 below.
Representations
Monroe County, Florida - $40,000,000 Taxable or Tax Exempt (NBQ) Revolving Line of
Credit Facility
Summary of Terms and Conditions
And Warranties The Borrower shall make representations and warranties standard
for this type of transaction, in form and substance satisfactory to the
Bank.
Conditions Precedent Including, but not limited to, the following all of which shall be in form
and substance satisfactory to the Bank:
1) All documentation relating to the Credit Facility in form and
substance satisfactory to the Bank.
2) Satisfactory review of other agreements relating to the Credit
Facility.
3) Evidence that Borrower is authorized to enter into this
transaction.
4) No material adverse change in the condition, financial or
otherwise, operations, properties, assets or prospects of the
Borrower.
5) No material threatened or pending litigation against the Borrower
or additional material contingent obligations of the Borrower.
6) Delivery of initial opinions of counsel will be required. It is
assumed that future draws of the Credit Facility will not be
considered reissuances. If this is correct, subsequent opinions
will not be required for each draw. If futures draws are deemed
to be reissuances, opinions will be required and additional fees
paid by the Borrower may apply.
7) Payment of all legal fees.
8) The County must provide the Bank with mathematical
demonstration of the Anti -Dilution Test.
Reporting
Requirements Annual audited financial statements for the borrower within 210 days
of the Borrower's fiscal year end.
Budgets, forecasts and other items as may be reasonably requested
by the Bank which are prepared by the Borrower and submitted to
the Bank no later than the first day of each Fiscal Year.
Events of Default 1) Payment default.
2) Breach of Representations or Warranties.
3) Violation of covenant(s).
4) Bankruptcy, insolvency.
Monroe County, Florida - $40,000,000 Taxable or Tax Exempt (N13Q) Revolving Line of
Credit Facility
Summary of Terms and Conditions
5) Any Default with any other NAV Revenue indebtedness or any
condition which results in the acceleration of other indebtedness
of the Borrower.
6) Loan documents unenforceable.
7) Adverse judgments.
8) Change of control.
9) Cessation of business.
10) Default under governing bond documents.
Other Events of Default as appropriate. The Borrower shall notify the
Bank within 10 days of its knowledge of an Event of Default.
Documentation Resolution and other loan documents in form and substance
satisfactory to the Bank must be executed and delivered containing
representations, warranties, covenants, indemnities, conditions to
lending, events of default and other provisions as are appropriate in
the Bank's opinion and specified by the Bank.
Governing Law State of Florida. Consent to Florida Jurisdiction. Waiver of jury trial.
Indemnification Standard indemnification of the Bank by the Borrower will apply.
Underwriting Should PNC be appointed the winner of this RFP, the Bank requires
a minimum of 2 weeks for the formal underwriting process from the
appointed date.
Expiration This proposal expires February 1, 2018 and the Credit Facility must
close no later than this date unless otherwise extended by the Bank
in writing.
Corporate Information Please refer to the following link for detailed corporate information
including all filings, history, corporate governance, officers, directors
and investor relations:
https://www. pnc.com/en/about-pnc/com pany-profile/corporate-
overview. html
References Ivan Perrone: School Board of Broward County, Florida
754-321-1980
Ivan. perroneCaD-browardschools.com
Erica Paschal: City of Miami, Florida
305-416-1330
EPaschal (a)-miamigov.com
Monroe County, Florida - $40,000,000 Taxable or Tax Exempt (NBQ) Revolving Line of
Credit Facility
Summary of Terms and Conditions
Lisa Chong: City of Pembroke Pines, Florida
954-435-6728
IchongCaD-ppines.com
PROPOSER'S QUALIFICATIONS STATEMENT
PROPOSER shall furnish the following information. Failure to comply with this requirement will render
Bid non -responsive and shall cause its rejection. Additional sheets shall be attached as required.
PROPOSER'S Name and Prirt*a) Addres§: ,{ j
Contact Person's Name and Title:
PROPOSER'S Telephone and Fax Number: 9 3 373-6
PROPOSER'S License Number: - -''
(Please attach certificate of competency d/or state re istration.)
PROPOSER'S Federal Identification Number:'
Number of years your organization has been in business, in this type of work:
Names and titles of all officers, partners, or individuals doing business under trade name:
The business is a: Sole Proprietorslupu
Name, address, and telephone number of Surety
on this contract: /11 /J (v Jk 1)�
Partnership U Corporation M.
and agent who will provide the required bonds
Have you ever failed to complete work awarded to you. If so, when, where and why?
Have you personally inspected the proposed WORK and do you have a complete plan for its
performance?
29885782v2 7
Will you subcontract any part of this WORK? if so, give details including a list of each sub-contractor(s)
that will perform work in excess of ten percent (10%) of the contract amount and the work that will be
performed by each subcontractor(s).
The foregoing list of subcontractor(s) may not be amended after award of the contract without the prior
written approval of the Contract Administrator, whose approval shall not be reasonably withheld.
List and describe all bankruptcy petitions (voluntary or involuntary) which have been filed by or against
the Proposer, its parent or subsidiaries or predecessor organizations during the past five. (5) years. Include
in the description the disposition of each such petition.
In the normal course of business, PNC Bank, N.A. ("PNC Bank") is subject to various pending or
threatened legal proceedings, including adversary actions by bankruptcy trustees, in which claims for
monetary damages and other relief are asserted. We do not anticipate, at the present time, that the
ultimate aggregate liability, if any, arising out of such adversary proceedings will have a material
adverse effect on PNC's financial position or that of The PNC Financial Services Group, Inc.
("PNC"). Matters that are considered material are reported in the Legal Proceedings section on the
Forms 10-K and 10-Q reports filed by PNC.
List and describe all successful Bond claims made to your surety (ies) during the last five (5) years. The
list and descriptions should include claims against the bond of the Proposer and its predecessor
organization(s).
List all claims, arbitrations, administrative hearings and lawsuits brought by or against the Proposer or its
predecessor organizations(s) during the last (5) years. The list shall include all case names; case,
arbitration or hearing identification numbers; the narne of the project over which the dispute arose; and a
description of the subject matter of the dispute.
Please see the "Legal Proceedings" section of the reports of The PNC Financial Services Group, Inc.
("PNC") to the United States Securities and Exchange Commission on Forms 10-K and 10-Q. In
addition to the proceedings or other matters described therein, PNC and its subsidiaries, particularly
its principal banking subsidiary, PNC Bank, N.A. ("PNC Bank"), in the normal course of business,
are subject to various other pending and threatened legal proceedings in which claims for monetary
damages and other relief are asserted. We do not anticipate, at the present time, that the ultimate
aggregate liability, if any, arising out of such other legal proceedings will have a material adverse
effect on our financial position or ability to perform the requested services.
In addition, as a result of the regulated nature of our business and that of a number of our subsidiaries,
particularly in the banking and securities areas, we and our subsidiaries are the subject from time to
time of investigations and other forms of regulatory inquiry, often as partof industry -wide regulatory
reviews of specified activities. Our practice is to cooperate fully with these investigations and
inquiries.
29885782v2
List and describe all criminal proceedings or hearings concerning business related offenses in which the
Proposer, its principals or officers or predecessor organization(s) were defendants.
This response is limited to executive officers and directors of PNC Bank, N.A. ("PNC Bank") and
The PNC Financial Services Group, Inc. ("PNC"), and solely with respect to their activities in the
course of their work in the ordinary course of their activities for PNC. PNC Bank is a National
Bank and an indirect subsidiary of a publicly traded corporation, PNC, whose stock is traded on the
New York Stock Exchange. As of the date of.this Proposal, neither PNC, PNC Bank, nor any
executive officer or director of PNC or PNC Bank in the ordinary course of their activities for PNC
or PNC Bank is involved in any Federal, State or other government investigation concerning
criminal violations by PNC or PNC Bank.
29885782v2
4
PNC BANK, NATIONAL ASSOCIATION
DISCLOSURE LETTER AND
TRUTH -IN -BONDING STATEMENT
February 1, 2018
Board of County Commissioners
of Monroe County, Florida
Key West, Florida
Re: Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank,
National Association Line of Credit), Series 2018
Ladies and Gentlemen:
In connection with the purchase of the not to exceed $40,000,000 principal amount
of the Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank, National
Association Line of Credit), Series 2018 (the "Master Note") authorized to be issued by
Resolution No. 020-2018 adopted by the Board of County Commissioners of Monroe
County, Florida (the "Issuer") on January 17, 2018 (the "Resolution") and issued pursuant
to the Line of Credit Agreement (the "Agreement") dated as of February 1, 2018,
between the Issuer and the undersigned purchaser of the Master Note (the "Original
Purchaser"), the Original Purchaser hereby acknowledges and represents that (1) the
Original Purchaser is familiar with the Issuer as it relates to the above transaction; (2) the
Original Purchaser has been furnished certain business and financial information about
the Issuer; (3) the Issuer has made available to the Original Purchaser the opportunity to
obtain additional information and to evaluate the merits and risks of an investment in the
Master Note; and (4) the Original Purchaser has had the opportunity to ask questions of
and receive answers from representatives of the Issuer concerning the terms and
conditions of the offering and the information supplied to the Original Purchaser.
The Original Purchaser acknowledges and represents that it has been advised that
the Master Note has not been registered under the Securities Act of 1933, as amended, in
reliance upon the exemption contained in Section 3(a)(2) thereof, and that the Issuer is
not presently registered under Section 12 of the Securities and Exchange Act of 1934, as
amended. The Original Purchaser, therefore, realizes that if and when the Purchaser
wishes to resell the Master Note, there may not be available current business and
financial information about the Issuer. Further, no trading market now exists for the
Master Note. Accordingly, the Original Purchaser understands that it may need to bear
Board of County Commissioners
of Monroe County, Florida
February 1, 2018
Page 2
the risks of this investment for an indefinite time, since any sale prior to the maturity of
the Master Note may not be possible or may be at a price below that which the Original
Purchaser is paying for the Master Note.
It is understood that the Original Purchaser is relying upon the accuracy,
completeness and truth of any statements made or information provided by the Issuer
concerning any of the material facts relating to this transaction, including information
regarding the business and financial condition of the Issuer. The Original Purchaser has
conducted its own investigation to the extent it deemed necessary. The Original
Purchaser has been offered an opportunity to have made available to it any and all such
information it might request from the Issuer. On this basis, it is agreed by
acknowledgment of this letter that the Original Purchaser hereto is not relying on any
other party or person to undertake the furnishing or verification of information relating to
this transaction other than the Issuer.
The Original Purchaser acknowledges that the Master Note is being purchased as
part of a private placement of the Master Note negotiated directly between the Issuer and
representatives of the undersigned. Accordingly, no Official Statement or other
disclosure document has been prepared in connection with the issuance of the Master
Note and we hereby acknowledge that we have made our own independent examination
of all facts and circumstances surrounding the Master Note and the financing and that no
reliance has been placed on anyone other than the Issuer.
The Original Purchaser is purchasing the Master Note for its loan portfolio and not
with any present intent to distribute or resell the Master Note. The Original Purchaser
hereby covenants that if the Original Purchaser subsequently decides to distribute or
resell the Master Note, it shall comply in all respects with all securities laws then
applicable with respect to any such distribution or resale.
The Original Purchaser further acknowledges and represents that (1) it is the only "
initial purchaser of the Master Note, (2) it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of the
Master Note, and (3) it is not purchasing the Master Note for more than one account or
with a view to distributing the Master Note. The Original Purchaser acknowledges that
the representations contained in this paragraph are being made in order to meet one of the
exceptions to the continuing disclosure requirements set forth in Rule 15c2-12
promulgated under the Securities Exchange Act of 1934.
Board of County Commissioners
of Monroe County, Florida
February 1, 2018
Page 3
Pursuant to the provisions of Section 218.385, Florida Statutes, the Original
Purchaser is providing the following information with respect to the purchase of the
Master Note. The Original Purchaser represents to you as follows:
(a) The nature and estimated amounts of expenses to be incurred by the
Original Purchaser in connection with the issuance and sale of the Master
Note are: $12,500.00 of fees and expenses of counsel to the Original
Purchaser (Bryant Miller Olive P.A.) to be paid by the Issuer.
(b) There are no "finders," as defined in Section 218.386, Florida Statutes, as
amended, in connection with the issuance of the Master Note.
(c) No underwriting fee will be paid to the Original Purchaser by the Issuer.
(d) No management fee will be charged by the Original Purchaser in
connection with the issuance of the Master Note.
(e) No other fee, bonus or other compensation will be paid by the Original
Purchaser in connection with the issuance of the Master Note to any person
not regularly employed or retained by the Original Purchaser (including a
"finder" as defined in Section 218.386, Florida Statutes).
(f) The name and address of the Original Purchaser is:
PNC Bank, National Association
420 S. Orange Avenue, Suite 300
Orlando, Florida 32801
(g) The Issuer is proposing to issue the Master Note for the principal purpose
of financing and refinancing various capital improvements within the
Issuer. Draws against the Master Note are expected to be repaid over
various periods. Assuming that the Issuer draws the entire $40,000,000
against the Master Note on the date hereof, pays interest only through
August 1, 2019, and then amortizes the principal balance with payments on
each August 1, commencing August 1, 2020 through and including
August 1, 2022, in accordance with Section 3.01(d) of the Agreement, all at
an assumed interest rate of 4.01 %, on reliance upon schedules provided by
Public Financial Management, Inc., total interest paid over the life of such
draw will be approximately $5,655,905.00. The expected sources of
repayment for draws against the Master Note are the Non -Ad Valorem
Revenues budgeted and appropriated in accordance with the Agreement to
Board of County Commissioners
of Monroe County, Florida
February 1, 2018
Page 4
pay debt service on the draws and the proceeds of the draws pending the
application thereof. Making the foregoing assumptions, authorizing the
Master Note will result in an average of approximately $10,145,757.00 (in
reliance upon schedules provided by Public Financial Management, Inc.) of
such Non -Ad Valorem Revenues of the Issuer being expended to pay debt
service on the Master Note each year.
Very truly yours,
PNC BANK, NATIONA ASSOCIATION
By:
Name: Nick Ayotte
Title: Vice President
UNITED STATES OF AMERICA
STATE OF FLORIDA
MONROE COUNTY, FLORIDA
TAX-EXEMPT MASTER REVENUE NOTE
(PNC Bank, National Association Line of Credit), Series 2018
Final
Interest Rate Date of Issuance
Variable February 1, 2018 August 1,
MONROE COUNTY, FLORIDA (the "County"), for va�teeceiid; .,.hereby
promises to pay, solely from the Designated Revenues descriV d..in th' :within mentioned
Agreement, to the order of PNC BANK, NATIONAL ASCIAION, Or, its successors
or assigns (the "Noteholder"), the lesser of the principal=sui�;' ,of E. RTY Ni fdION AND
00/100 DOLLARS ($40,000,000.00) or so much;,.thereof`i:. may be advanced and
outstanding (the "Advanced Amount") pursuant to thrtain fe of Credit Agreement
4
by and between the Noteholder and the County, dkeths ofbruary 1, 2018 (the
"Agreement"), and to pay interest on such A� ; ��tmced Aoun.Qrn the dates amounts are
advanced hereunder and under the Agreemr of from `%n o time, or from the most recent
date to which interest has been paid, at %Jnterd9t.Raff-' �, determined and defined in the
Agreement and subject to adjustment as�jjgvided'inw the Agreement) semi-annually on
February 1 and August 1 of ,each year, ed" neno g with respect to each advance
ti.:.:=
hereunder on the first February,"..-.1 or August 1 d follows the date of such advance until
such Advanced Amount shall ,ve been pa%d. -ATnterest shall be calculated on a 30/360
day basis. The Advance A'`AmoV . hereof Fshall be payable on the Final Maturity Date.
Such Advanced Amount and, inteable in any coin or currency of the United
States of America WhM, at_theme of payment, is legal tender for the payment of public
and private debts
The Watstandffig Advanced Amount as of August 1, 2019 shall be amortized
through,Abe Fist Maturity Date on an approximately level annual debt service basis,
assuring or purpbsgs of this calculation the Interest Rate then in effect for this Note,
with= ra ipa .-being MR
pe and payable on August 1 of each year commencing August 1,
2020, 'rb`ugh a64 including August 1, 2022, in accordance with the Agreement. The
principal amortiz4 ion schedule is subject to the Noteholder's prior written approval, such
approval not 'be unreasonably withheld. The County shall provide the Noteholder with
the proposed principal amortization schedule within 30 days of the Final Draw Date (as
defined in the Agreement).
All payments of principal of and interest on the Advanced Amount shall be
payable in any coin or currency of the United States which, at the time of payment, is
legal tender for the payment of public and private debts and shall be made to the
Noteholder (1) in immediately available funds, (2) by delivering to the Noteholder no
later than the payment date a check or draft of the County, or (3) in such other manner as
the County and the Noteholder shall agree upon in writing.
This Note is issued under the authority of and in full compliance with the
Constitution and statutes of the State of Florida, including, particularly, Chapter 125,
Florida Statutes, and other applicable provisions of law, Resolution No. 020-2018 duly
adopted by the County on January 17, 2018 (the "Resolution"), as such Resolution may
be amended and supplemented from time to time, and is subject to.., -all terms and
conditions of the Resolution and the Agreement. Any term used in tlNote and not
otherwise defined shall have the meaning ascribed to such term in the Agreeffir
This Note is being issued to finance or refinance t11 ` cos ss '"'of=`=E Qrdinary
Expenditures, as described in the Agreement. This Note; f§* ecured-::::by the County's
covenant contained in Section 2.06 of the Agreement tgtip.udgetd apporate legally
available Non -Ad Valorem Revenues and a pledge oftli&*Des, iked'Reuenues, all as
provided in the Agreement. This Note shall be payal# from'��pesign►`ted Revenues as
described in the Agreement.
This Note shall bear interest at the Int
Interest Rate is subject to adjustment as providi
Noteholder shall provide to the County,'*9n re
amount of interest due with respect to ari
the Note. Upon the occurrence,, during
defined in the Agreement), thiseNote shall bear
the Agreement).
�p a` 0/3,60-day year basis. Such
; I n V63 of the Agreement. The
documentation to evidence the
efined in the Agreement) against
cation of an Event of Default (as
at the Default Rate (as defined in
Notwithstandittg any prov ::,. is Note to the contrary, in no event shall the
interest contracted,farahargied,or.received in connection with this Note (including any
other costs or cQ1k .deraf�t��,s that cdhstitute interest under the laws of the State of Florida
which are cQritrac`P4. for;' agt or received) exceed the maximum rate of interest
r
allowed und6f1he St #e of F16r da as presently in effect.
""All payments ;glade by the County hereon shall apply first to accrued interest, and
then4o_the,= Oval amount then due on this Note.
IT IS EXPRESSLY AGREED BY THE REGISTERED HOLDER OF THIS
NOTE THAT,.'I'T E FULL FAITH AND CREDIT OF THE COUNTY, THE STATE OF
FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, ARE
NOT PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON
THIS NOTE AND THAT SUCH HOLDER SHALL NEVER HAVE THE RIGHT TO
REQUIRE OR COMPEL THE EXERCISE OF ANY TAXING POWER OF THE
COUNTY, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR
AGENCY THEREOF, TO THE PAYMENT OF SUCH PRINCIPAL AND INTEREST.
THIS NOTE AND THE OBLIGATION EVIDENCED HEREBY SHALL NOT
2
CONSTITUTE A LIEN UPON ANY PROPERTY OF THE COUNTY, BUT SHALL
CONSTITUTE A LIEN ONLY ON, AND SHALL BE PAYABLE SOLELY FROM,
THE DESIGNATED REVENUES TO THE ' EXTENT AND IN THE MANNER
PROVIDED IN THE AGREEMENT. THIS NOTE IS SECURED BY A COVENANT
OF THE COUNTY TO BUDGET AND APPROPRIATE NON -AD VALOREM
REVENUES TO THE EXTENT AND IN THE MANNER PROVIDED IN THE
AGREEMENT.
The rights and obligations of the Noteholder hereunder and under"'lhe Agreement
may be assigned in whole to another financial institution prior to the end `6f',the period
during which Draws (as defined in the Agreement) may be made,gti.eson that
is an "accredited investor" (as that term is defined in the regulations- Promu gated :under
the Securities Act of 1933, as amended), after the end of suet period, .Athout the consent
of the County.
The County may prepay and redeem the Adva
accordance with the provisions of Section 3.02 of the
Reference to the Resolution and
supplemental thereto and modifications 4a
for a description of the provisions and
and extent of enforcement of suck%%,pro,
immunities and obligations of the `County.
It is hereby certified,
required to exist, happep'�a
and the issuance of tb,4` Nc
time, form and marma.-as
compliance with:;•."sand
limitation. It: is . fisher c
conditions;' aril;oveants r
anc
by
in whole or in part, in
aid -any and all resolutions
iereof and to the Act is made
this Note, the nature, manner
cants, and the rights, duties,
d and declared. -that all acts, conditions and prerequisites
b�erformed precedent to and in the execution, delivery
do '€te happened and have been performed in due
aired. by law, and that the issuance of this Note is in full
not oAceed or violate any constitutional or statutory
if ed- that all of the representations, warranties, terms,
WLd set forth in the Agreement, the Resolution and in the
its relevant to this Note are remade and incorporated fully
[Remainder of page intentionally left blank]
3
IN WITNESS WHEREOF, the County caused this Note to be signed by the
manual signature of the Mayor and the seal of the County to be affixed hereto or
imprinted or reproduced hereon, and attested by the manual signature of the Clerk, and
this Note to be dated the Date of Issuance set forth above.
MONROE COUNTY, FLORIDA
(SEAL)
6' By:
<" Mayor
Attest;
By:
Clerk of the Circuit Court and
Ex-Officio Clerk to the Board
APPROVED AS TO FORM AND
LEGAL SUFFICIENCY:
(l
By;
Coui Attorney's Office
4
6
INCUMBENCY CERTIFICATE
I, Kevin Madok, the undersigned Clerk of the Circuit Court of Monroe County,
Florida (the "County") and Ex-Officio Clerk to the Board of County Commissioners (the
"Board") of Monroe County, Florida, am delivering this Certificate relating to the
issuance of the Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank,
National Association Line of Credit), Series 2018. I hereby certify, to the best of my
knowledge, as follows:
1. The following are now, and have continuously been since the dates of
beginning of their respective current terms shown below, the duly elected, qualified and
acting members of the Board of County Commissioners of Monroe County, Florida, and
the dates of the beginning and ending of their respective current terms are hereunder
correctly designated opposite their names:
Member
David Rice, Mayor
Sylvia Murphy, Mayor Pro Tem
Heather Carruthers
Danny Kolhage
George Neugent
Beginning Date
of Current Term
November 2014
November 2016
November 2016
November 2016
November 2014
Ending Date
of Current Term
November 2018
November 2020
November 2020
November 2020
November 2018
3. The following are now, and have continuously been since the dates of
beginning of their respective current terms of office shown below, the duly appointed or
elected (as the case may be), qualified and acting officers of the County and the dates of
the beginning and ending of their respective current terms of office are hereunder
correctly designated opposite their names:
Office
Beginning Date
Name of Current Term
Ending Date
of Current Term
Mayor David Rice November 2017 November 2018
Clerk Kevin Madok January 2017 January 2021
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official
seal of the County the 1 st day of February, 2018.
Clerk of the Circuit Court of Monroe County
and Ex-Officio Clerk to the Board of County
Commissioners
CERTIFICATE AS TO SIGNATURES
We, the undersigned, DO HEREBY CERTIFY as follows:
1. That we did heretofore cause to be officially executed the not to exceed
$40,000,000 Tax -Exempt Master Revenue Note (PNC Bank, National Association Line
of Credit), Series 2018 (the "Series 2018 Note") of Monroe County, Florida (the
"County").
2. That David Rice, Mayor of the Board of County Commissioners (the
"Board") of the County, has executed the Series 2018 Note by his manual signature, and
said Mayor was on the date he executed the Series 2018 Note and is now the duly elected,
qualified and acting Mayor of the County.
3. That we have caused the official seal of the County to be imprinted on the
Series 2018 Note, said seal imprinted hereon being the official seal of the County, and
that Kevin Madok, Clerk of the Circuit Court of the County and Ex-Officio Clerk to the
Board, caused such seal to be attested by his manual signature, and that said Clerk was on
the date he signed the Series 2018 Note and is now a duly qualified and acting Clerk.
4. That the seal which has been impressed on or otherwise reproduced on the
Series 2018 Note and upon this certificate is the legally adopted, proper and only seal of
the County.
IN WITNESS WHEREOF, we have hereunto set our hands and affixed the
official seal of the County as of the 1st day of February, 2018.
Term of
Title of Office Office Expires
Mayor November 2018
Clerk January 2021
MONROE COUNTY ATTORNEY
A)4VC',
/ CYNTHIA L. HALL
ASSIS ANT COUNTY ATTORNEY
Date -
8
CERTIFICATE OF MONROE COUNTY, FLORIDA
We, David Rice, Mayor of the Board of County Commissioners of Monroe
County, Florida (the "County"), and Kevin Madok, Clerk of the Circuit Court and Ex-
Officio Clerk to the Board of County Commissioners, are delivering this Certificate
relating to the issuance of the Monroe County, Florida Tax -Exempt Master Revenue Note
(PNC Bank, National Association Line of Credit), Series 2018 (the "Master Note"). All
terms not otherwise defined herein shall have the meanings ascribed thereto in Resolution
No. 020-2018 adopted on January 17, 2018 (the "Resolution") or in the Line of Credit
Agreement dated as of February 1, 2018 (the "Agreement"), between the County and
PNC Bank, National Association. We hereby certify, to the best of our knowledge, as
follows:
1. The County has complied or is presently in compliance with all agreements
related to the Master Note, including, but not limited to, the Agreement and the
Resolution and has satisfied all conditions on its part to be observed or satisfied under the
Agreement and the Resolution at or prior to the date hereof.
2. The representations, warranties, covenants and agreements of the County
contained in the Agreement and the Resolution are true and correct in all respects on and
as of the date hereof as if made on the date hereof.
3. The County is not presently in default nor has it been in default since
December 31, 1975 as to the payment of principal or interest with respect to any
obligations issued by it.
4. There is no litigation of which either of us have notice and no litigation is
pending or threatened (A) to restrain or enjoin the issuance or delivery of the Master Note
or the execution or delivery of the Agreement, (B) in any way contesting or affecting any
authority for the issuance of the Master Note or the execution and delivery of the
Agreement or the validity of the Master Note, the Resolution or the Agreement, (C) in
any way contesting the existence or powers of the County, (D) to restrain or enjoin the
collection of revenues to be used to pay the principal of and interest on any draws made
under the Master Note, or (E) which .may result in any material adverse change in the
business, properties, assets or the financial condition of the County taken as a whole.
5. The County is not in material breach of or material default under any
applicable constitutional provision, law or administrative regulation of the State or the
United States or any applicable judgment or decree or any loan agreement, indenture,
bond, note, material resolution, material agreement or other material instrument to which
the County is a party or to which the County or any of its property or assets is otherwise
subject, and no event has occurred and is continuing that with the passage of time or the
giving of notice, or both, would constitute a default or event of default under any such
Board of County Commissioners
of Monroe County, Florida
February 1, 2018
Page 2
instrument; and the execution and delivery of the Master Note, the adoption of the
Resolution, the execution and delivery of the Agreement and compliance with the
provisions on the County's part contained therein, will not conflict with or constitute a
material breach of or default under, any constitutional provision, law, administrative
regulation, judgment, decree, loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the County is a party or to which the County or
any of its property or assets is otherwise subject, and any such execution, delivery,
adoption or compliance will not result in the creation or imposition of any lien, charge, or
other security interest or encumbrance of any nature whatsoever upon any of the property
or assets of the County under the terms of any such ordinance, law, regulation or
instrument, except as expressly provided by the Master Note, the Resolution or the
Agreement.
6. Since September 30, 2016, no material adverse change has occurred in the
condition, financial or otherwise, operations, properties, assets or prospects of the
County, the County has not incurred any material liabilities other than in the ordinary
course of business, and there are no pending or, to the best of our knowledge, threatened
material contingent obligations of the County that have not been disclosed to PNC Bank,
National Association.
7. The County is duly authorized to make Draws in accordance within the
Agreement to finance and refinance Extraordinary Expenditures.
8. That the authority to make Draws pursuant to the Agreement as set forth in
the Resolution has not been revoked, amended or modified.
9. The interest rate on the Master Note shall be in compliance with the
maximum interest rate provisions contained in Section 215.84, Florida Statutes.
[Remainder of page intentionally left blank]
2
Board of County Commissioners
of Monroe County, Florida
February 1, 2018
Page 3
IN WITNESS WHEREOF, we have hereunto set our hands and affixed the
official seal of the County as of the 1st day of February, 2018.
(SEAL)
MONROE COUNTY, FLORIDA
BOARD OF COUNTY COMMISSIONERS
D�e l
By:l-
Mayor
By:
Clerk of the Circuit Court and Ex-Officio
Clerk to the Board of County
Commissioners
MONROE COUNTY ATTORNEY
AP j V TSJ FMf1 J
NTHIA L.. HALL
ASSISTANT COUNTY ATTORNEY
Date I --p q - a01 lb
3
E
TAX EXEMPT DRAW REQUEST (DRAW #1)
The undersigned, on behalf of Monroe County, Florida (the "County"), hereby makes
this Draw Request in accordance with Section 4.01(a) of that certain Line of Credit
Agreement dated as of February 1, 2018 (the "Agreement"), between the County and PNC
Bank, National Association (the "Noteholder") and in connection with the Monroe County,
Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line of Credit),
Series 2018, dated as of February 1, 2018 (the "Note").
Type of Draw: Tax -Exempt
Draw Amount: $10,000,000
Undrawn Amount (taking into account the amount of this Draw): $30,000,000
Date of Draw: 2/1/2018
Description of Extraordinary Expenditures:
Cleanup and removal of debris from local hurricane damage, costs related to emergency base
camp, and costs of issuance.
Executed and made a part of the Agreement and the Note as of this 29th day of
January, 2018.
MONROE COUNTY, FLORIDA
Bv: ; L ( )*1 �o e�
Title: Clerk of Circuit Court
APPROVED:
By: Nick Ayotte
Title: Vice President
10
DRAW CERTIFICATE
The undersigned, on behalf of Monroe County, Florida (the "County"), in
connection with a Draw (the "Draw") to be funded on the lst day of February, 2018 in
the amount of $10,000,000, pursuant to that certain Line of Credit Agreement dated as of
February 1, 2018 (the "Agreement"), between the County and PNC Bank, National
Association (the "Noteholder"), HEREBY CERTIFIES as follows:
1. The capitalized terms used herein that are not otherwise defined herein shall
have the meanings ascribed thereto in the Agreement.
2. The Resolution is in full force and effect and has not been rescinded,
repealed, modified or amended since the date of its adoption except as otherwise
described herein.
3. The Agreement is in full force and effect and has not been terminated,
modified or amended since the date of its execution except as otherwise described herein.
4. The County has complied in all respects with the terms and provisions of
the Resolution, the Master Notes and the Agreement and the County is not in default
under any provisions of either the Resolution or the Agreement.
5. All of the representations and warranties contained in the Agreement, the
Master Notes and the Resolution are true and correct as of the date hereof.
6. The Extraordinary Expenditures to be financed or refinanced with proceeds
of the Draw has been duly authorized and approved by the Board.
7. The County is in full compliance with the Tax Certificate relating to the
Tax -Exempt Master Note.
8. The County has delivered to the Noteholder a Draw Request with respect to
the Draw in accordance with and in compliance with the Agreement; all necessary
approvals of or by the County which are required as a condition precedent to making the
Draw have been satisfied.
9. The proceeds of the Draw will be used solely to finance or refinance
Extraordinary Expenditures to be funded by the Draw and described in the Draw Request
referred to in Paragraph 8 above.
10. All terms, conditions, representations, warranties and covenants contained
in the Agreement, the Resolution and the Master Notes are incorporated by reference as if
fully restated herein.
1
11. Upon the funding of the Draw, the County shall be in compliance with the
anti -dilution test set forth in Section 2.08 of the Agreement, as demonstrated by the
attached calculation.
Executed as of this 1st day of February, 2018.
MONROE COUNTY, FLORIDA
0
Clerk of the Circuit Court of Monroe
County, Florida and Ex-Officio Clerk to the
Board of County Commissioners
2
ANTI -DILUTION TEST CALCULATION
Year
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
Series 2007 Series 2014
Mayfield Interlocal
Series 2016
2010 Clean Water SRF
2018 Line'
Total DS
3,531,125 3,957,494
2,000,000
234,904
682.000
1,726,338
12,131,862
- 4.284.202
2,000,000
1,118,119
682,000
2,585,742
10,670,063
- 4.281,292
2,000,000
1,118,754
682,000
2,590,442
10,672,487
- 4,281,376
2.000,000
1,119,135
682,000
2,588,337
10,670,848
- 4,279,336
2,000,000
1,124,263
682,000
2,589,628
10,675,227
- 4,280,172
2,000,000
1,119,063
682,000
2,589,114
10,670,339
- 4,283,766
2,000,000
1,118,674
682.000
2.586,796
10,671,236
- -
5,403,042
682.000
2,687,674
8,672,715
- -
6,399,739
682,000
2,586.646
8,668,285
682,000
2.588,414
3,270,414
6B2,000
2,588,076
3,270,076
682,000
2,590,532
3,272,532
682.000
2.590,583
3,272,683
2,588,227
2,588,227
2.588,466
2,588,466
2.586,098
2,586,098
2,586,123
2,586,123
2,588.342
2,588,342
2,587,553
2,587,553
2,588.766
2,588,756
2,586,752
2,586.752
2,586,539
2,586,539
2,587,918
2,587.918
2,585,688
2.685.688
2,589,849
2,589.849
-Assumes the full $40 million is outstanding from the data of Issuance of the line; amortized over 25 years using the Bond Buyer Revenue Bond Index
as of January 22. 2018 (4.01%)
Fund
FY 2016 CAFR NAV Revenues
FY 2015 CAFR NAV Revenues
Gene21 Fund
17,689,752
14,205,574
Fine & Forfeiture
6,703,549
5,048,652
One Cent Infrastructure Surtax
20,921,345
23,935,647
Big Coppitt Wastewater Project
450,029
398,546
All Debt Service
15,780
6,579
Nonmajor Governmental Funds
6,650,845
7,221,977
Pledged CB&A Revenues':
Maximum Annual Debt Service:
61,624.138
12,131,862
Coverage: 4.26x
Minimum Coverage Required: 1.20x
(1) Based on average of 2015 and 2016 CAFR; uses non -ad valorem revenues from total governmental funds
(2) MADS projected to occur in Fiscal Year 2018
Form 8030-G Information Return for Tax -Exempt Governmental Obligations
(Rev. September 2011) ► Under Internal Revenue Code section 149(e) OMB No. 1545-0720
► See separate instructions.
Department of the Treasury Caution: If the issue price is under $100, 000, use Form 8038-GC.
Internal Revenue Service
Reporting Authority If Amended Return, check here ► ❑
1 Issuer's name
2 Issuer's employer identification number (EIN)
Monroe County, Florida
59-6000749
3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions)
3b Telephone number of other person shown on 3a
Steven E. Miller, Esq., Bond Counsel
813/281-2222
4 Number and street (or P.O. box if mail is not delivered to street address)
Room/suite
5 Report number. (For IRS Use Only)
c/o Nabors, Giblin & Nickerson, P.A., 2502 North Rocky Point Drive
1060
3
6 City, town, or post office, state, and ZIP code
7 Date of issue
Tampa, Florida 33607
February 1, 2018
8 Name of issue Monroe County, Florida Tax -Exempt Master Revenue
9 CUSIP number
Note (PNC Bank, National Association Line of Credit), Series 2018'
N/A
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see
10b Telephone number of officer or other
instructions)
employee shown on 10a
Kevin Madok, Clerk of Circuit Court
3051292-3550
Tvne of Issue (enter the issue price). See the instructions and attach schedule.
11
12
13
14
15
16
17
18'
Education . . . . . . . . . . . . . . . . . . . . . . . .
Health and hospital . . . . . . . . . . . . . . . . . . . . .
Transportation . . . . . . . . . . . . . . . . . . . . . . .
Public safety . . . . . . . . . . . . . . . .
Environment (including sewage bonds) . . . . . . . . . . . . . . .
Housing . . . . . . . . . . . . . . . . . . . . . . . . .
Utilities . . . . . . . . . . . . . . . . . . . . . . . . .
Other. Describe ► Various Governmental Purposes
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
11
12
13
14
15
16
17
18
40,000,000
00
19
20
If obligations are TANS or RANs, check only box 19a . . . . . . . . . .
If obligations are BANS, check only box 19b . . . . . . . . . . . . .
If obligations are in the form of a lease or Installment sale, check box . . . . .
. . . ► ❑
. . . ► ❑
. . . ► ❑
Description of Obligations. Complete for the entire issue for which this form is being filed.
(a) Final maturity date
(b) Issue price
(c) Stated redemption
price at maturity
(d) Weighted
average maturity
(e) Yield
21
08/01/2022
40,000,000
40,000,000
3,5261 years
VR
UMM
Uses of Proceeds of Bond Issue (including underwriters' discount)
22
23
24
25
26
27
28
29
30
Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . .
Issue price of entire issue (enter amount from line 21, column (b)) . . . . .
Proceeds used for bond issuance costs (including underwriters' discount) . 24 65,000 00
Proceeds used for credit enhancement . . . . . . . . . . . . 25 0 00
Proceeds allocated to reasonably required reserve or replacement fund 26 0 00
Proceeds used to currently refund prior issues . . . . . . . . . 27 0 00
Proceeds used to advance refund prior issues . . . . . . . . . 28 0 00
Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . .
Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here)
22
0
00
23
40,000,000
00
65,000
00
=-.y
29
30
39,935,000
00
Description of Refunded Bonds. Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► NIA years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► N/A years
33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) . . . . . . ► NIA
34 Enter the date(s) the refunded bonds were issued ► (MM/DD/vvvY) N/A
For Paperwork Reduction Act Notice, see separate instructions. cat. No. 63773s Form 8038-G (Rev. 9-2011)
Line of Credit; the initial draw is $10,000,000.00.
Form 8038-G (Rev.9-2011)
Page 2
35
Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35
36a
Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
(GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a
b
Enter the final maturity date of the GIC Do-
c
Enter the name of the GIC provider ►
37
Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . S7
38a
If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► ❑ and enter the following information:
b
Enter the date of the master pool obligation ►
c
Enter the EIN of the issuer of the master pool obligation Po-
d
Enter the name of the issuer of the master pool obligation ►
39
If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ►
❑
40
If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ►
❑
41a
If the issuer has identified a hedge, check here ► ❑ and enter the following information:
b
Name of hedge provider ►
c
Type of hedge Po-
d
Term of hedge ►
42
If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . ►
❑
43
If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations (see instructions), check box . . . . . . . . ►
❑
44
If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . ►
❑
45a
If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount
of reimbursement . . . . . . . . . ►
b
Enter the date the official intent was adopted ►
Under penalties of perjury, 1 declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge
Signature and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the Issuer's return information, as necessary to
and procTtie,
etum, tot e n that I have authorized above.
Consent 02101/2018 ' Kevin Madok, Clerk of the Circuit Court
ignaiure of issuer's authorized representative Date Type or print name and title
Paid Print/Type preparer's name Prepa pr's s1 natu a Date PTIN
Check ❑ if
Preparer 1Steven E. Miller, Esquire 02101/2018 self-employed P01236498
Use Only Firm's name ► Nabors, Giblin & Nickerson, P.A. Firm's EIN ► 59.2427540
Firm's address ► 2502 North Rocky Point Drive, Suite 1060, Tampa, Florida 33607 1 Phone no. 8131281-2222
Form 8038-C (Rev. 9-2011)
Notice Of Sale Printed On: 1/22/2018 1:17:26PM
Bond issue name: Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line of
Credit), Series 2018
Sale date: 02/01/2018
Closing date: 02/01/2018
Submitted by: kavery@ngn-tampa.com
Submission date: 01/22/2018
Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line
of Credit), Series 2018
Last Save Date: 1/25/2018 11:25:35AM Printed On: 1/25/2018 11:25:47AM
Issuer
Name of Governmental Unit:
Monroe County, Florida
Mailing Address of Governmental Unit or its Manager:
500 Whitehead Street
Address 2:
[blank]
City: State: Zip Code:
Key West FL 33040
Counties in which governmental unit has jurisdiction:
Monroe
Type of Issuer:
County
Is the Issuer a Community Development District?
No
Bond Information
Bond Issue Detail(s):
Name of Bond Issue Amount Issued Interest Calculation Yield
Monroe County, Florida, Tax -Exempt Master Revenue 40,000,000.00 Arbitrage Yield VR
Note (PNC Bank, National Association Line of Credit),
Series 2018
Amount Authorized:
40,000,000.00
Dated Date:
02/01 /2018
Sale Date:
02/01 /2018
Delivery Date:
02/01 /2018
Legal Authority For Issuance:
Ch. 125, F.S.
Type Of Issue:
Bank Loan/Line of Credit
Is this a Private Activity Bond?
No
Specific Revenue(s) Pledged:
Primary. Other
Secondary. None
Other.' CBA Non -Ad Valorem Revenues
Purpose(s) of the Issue:
Primary: Other
Secondary: None
Other: Operations and Waste Disposal
Page 1 of 5
Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line
of Credit), Series 2018
Last Save Date: 1/25/2018 11:25:35AM Printed On: 1/25/2018 11:25:47AM
Is this a Refunding Issue?
No
Bond Refunding Issue Detail(s):
Name of Refunding Issue Dated Date Original Par Value . Par Value Refunded
[blank]
Type of sale:
Negotiated
Insurance/Enhancements:
No Credit Enhancement
Rating(s):
Moody's: NR
S&P. NR
Fitch: NR
Other: [blank]
Debt Service schedule provided by:
Email
Optional Redemption Provisions provided by:
Email
Participants
Provide the name and address of the Senior Managing Underwriter or Sole Purchaser.
Underwriter:
PNC Bank, National Association
Mailing Address of Underwriter:
420 S. Orange Avenue
Address 2:
Suite 300
City: State: Zip Code:
Orlando FL 32801
Co -Underwriter:
None
Provide the names and addresses of any attorneys who advised the unit of local government with respect to the bond
issue.
Bond Counsel:
Nabors, Giblin & Nickerson
Mailing Address of Bond Counsel:
2502 North Rocky Point Drive
Address 2:
Suite 1060
City: State: Postal Code:
Tampa FL 33607
Co -Bond Counsel:
None
Page 2 of 5
Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line
of Credit), Series 2018
Last Save Date: 1/25/2018 11:25:35AM Printed On: 1/25/2018 11:25:47AM
Provide the names and addresses of any financial consultant who advised the unit of local government with respect to
the bond issue.
Financial Advisor/Consultant:
Public Financial Management Inc.
Mailing Address of Financial Advisor/Consultant:
225 Alhambra Circle
Address 2:
Suite 404
City:
Coral Gables
Co -Financial Advisor/Consultant:
None
Other Professionals:
Bryant Miller Olive P.A.
Mailing Address of Other Professionals:
201 N. Franklin Street
Address 2:
Suite 2700
City:
Tampa
Paying Agent:
None
Registrar:
None
State: Zip Code:
FL 33134
State: Zip Code:
FL 33602
Fees
Has any fee, bonus, or gratuity been paid by any underwriter or financial consultant, in connection with the bond
issue, to any person not regularly employed or engaged by such underwriter or consultant?
Fees Paid:
Company Name Fee Paid Service provided or function served
[blank]
Have any other fees been paid by the unit of local government with respect to the bond issue, including any fee paid to
attorneys of financial consultants?
Total Bond Counsel Fees Paid:
47,500.00
Total Financial Advisor Fees Paid:
5,000.00
Other Fees Paid:
Company Name Fee Paid Service Provided or Function Served
Bryant Miller Olive P.A. 12,500.00 Bank Counsel
Page 3 of 5
Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line
of Credit), Series 2018
Last Save Date: 1/25/2018 11:25:35AM
Filing of this form has been authorized by the official of the issuer identified below:
Name:
Kevin Madok, Clerk of the Circuit Court
Title:
Governmental Officer primarily responsible for coordinating issuance of the bonds
Fees charged by Underwriter:
Management Fee (per thousand par value):
0.00
OR
Private Placement Fee:
0.00
Underwriter's expected gross spread (per thousand par value):
0.00
Respondent
For additional information, the Division of Bond Finance should contact:
Name:
Steven E. Miller, Esquire
Title:
Bond Counsel
Phone:
813-281-2222
Company:
Nabors, Giblin & Nickerson, P.A.
Mailing Address of Respondent:
2502 North Rocky Point Drive
Address 2:
Suite 1060
City: State: Zip Code:
Tampa FL 33607
Printed On: 1/25/2018 11:25:47AM
Page 4 of 5
Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line
of Credit), Series 2018
Last Save Date: 1/25/2018 11:25:35AM
Information relating to party completing this form (if different from above):
Name:
(blank]
Title:
[blank]
Phone:
[blank]
Company:
[blank]
Mailing Address:
[blank]
Address 2:
[blank]
City: State: Zip Code:
[blank] [blank] [blank]
Printed On: 1/25/2018 11:25:47AM
Continuing Disclosure
If the issuer is required to provide continuing disclosure information in accordance with SEC Rule 15C2-12, do you
want the Division of Bond Finance to remind you of your filing deadline?
No
Page 5 of 5
14
CERTIFICATE AS TO ARBITRAGE
AND CERTAIN OTHER TAX MATTERS
We, David Rice, Mayor of the Board of County Commissioners (the 'Board") of
Monroe County, Florida (the "County") and Kevin Madok, Clerk of the Circuit Court of
the County and Ex-Officio Clerk of the Board, being persons duly charged, together with
others, with the responsibility for issuing the not to exceed $40,000,000 Monroe County,
Florida Tax -Exempt Master Revenue Note (PNC Bank, National Association Line of
Credit), Series 2018 (the "Master Note"), dated as of February 1, 2018, all being done
this day, DO HEREBY CERTIFY that:
1. AUTHORIZATION AND DEFINITIONS. The Master Note is being
issued pursuant to the authority contained in Chapter 125, Florida Statutes, and other
applicable law (the "Act"), and under and pursuant to Resolution No. 020-2018 adopted
on January 17, 2018 (the "Resolution") and a Line of Credit Agreement dated as of
February 1, 2018 (the "Agreement"), between the County and PNC Bank, National
Association
The terms defined in the Resolution and the Agreement shall retain the meanings
set forth therein when used in this Certificate unless the context clearly indicates another
meaning is intended. Other terms used in this Certificate shall have the meanings set
forth for the same in other provisions hereof or in the Internal Revenue Code of 1986, as
amended, and the applicable Treasury Regulations promulgated thereunder (collectively,
the "Code"), or in the Regulations applicable thereto, or in the Arbitrage Rebate
Statement attached hereto as Exhibit A, in each case unless the context clearly indicates
another meaning is intended.
2. PURPOSE. The Master Note is being issued for the purpose of financing
and refinancing, from time to time, various capital improvements, repairs and other
extraordinary expenditures within the County resulting from damage caused by Hurricane
Irma, all as described in the Resolution and the Agreement (the "Extraordinary
Expenditures"). An initial draw in the principal amount of $10,000,000.00 is being made
on the date hereof to finance various Extraordinary Expenditures consisting of debris
collection and disposal and costs related to the emergency base camp and pay costs of
issuance.
3. PAYMENT OF DRAWS. The County has agreed pursuant to the
Resolution to pay interest on all Draws against the Master Note on February 1 and
August 1 of each year and principal on all Draws on August 1 of each year, commencing
August 1, 2020, to the extent any amounts are outstanding as of August 1, 2019, through
and including August 1, 2022, all in accordance with the terms of the Agreement.
4. YIELD. For purposes of this Certificate, note yield is, and shall be,
calculated in the manner provided in Treasury Regulations Section 1.148-4, and the
provisions therein will be complied with in all respects. The term "bond yield" means,
with respect to a bond or note, the discount rate that when used in computing the present
value of all the unconditionally payable payments of principal and interest and all the
payments for a qualified guarantee paid and to be paid with respect to the bond or note
produces an amount equal to the present value, using the same discount rate, of the issue
price of the bond or note as of the issue date. In computing the purchase price of the
Master Note, which is equal to the issue price, the County did not take into consideration
the costs of issuance. The purchase price of the Master Note, therefore, is $40,000,000
(the principal amount). For purposes hereof, yield is, and shall be, calculated on a 360-
day year basis with interest compounded semiannually. The yield on the Master Note
calculated in the above -described manner is herein referred to as the "Note Yield."
Because the interest rate for the Master Note is variable the yield cannot be determined at
this time. It should be noted, however, that such yield may, under certain circumstances
set forth in the Treasury Regulations, be subject to recalculation. See Exhibit A hereto.
The issue price of the Master Note is being determined in accordance with Treasury
Regulations section 1. 148- 1 (f)(2)(i). See Exhibit B hereof.
The purchase price of all obligations other than certain tax-exempt investments
("Taxable Obligations") to which restrictions as to yield under this Certificate apply shall
be calculated using (i) the price, taking into account discount, premium, and accrued
interest, as applicable, actually paid or (ii) the fair market value (as described in the
Arbitrage Rebate Statement attached hereto as Exhibit A) if less than the price actually
paid and if such Taxable Obligations were not purchased directly from the United States
Treasury. The County will acquire all such Taxable Obligations directly from the United
States Treasury or in arm's length transactions without regard to any amounts paid to
reduce the yield on such Taxable Obligations and the County will not pay or permit the
payment of any amounts to reduce the yield on any Taxable Obligations.
5. FURTHER CERTIFICATIONS. The County will neither take nor
permit any action which would cause the Master Note to become a Private Activity Bond
(as such term is defined in the Code), including, without limitation, any sale, lease,
management or similar use of any of the Extraordinary Expenditures to or by any person
other than a governmental unit. None of the Gross Proceeds of any Draw is- expected to
be used directly or indirectly in any trade or business carried on by any person other than
a governmental unit.
No bonds or other obligations of the County (a) were sold in the 15 days preceding
the date of sale of the Master Note or (b) were sold or will be sold within the 15 days
after the date of sale of the Master Note, pursuant to a common plan of financing with the
plan for the issuance of the Master Note and payable out of substantially the same source
of revenues.
The County does not expect that the proceeds of any Draw will be used in a
manner that would cause the Master Note to be an arbitrage bond under Section 148 of
2
the Code. The County does not expect that the proceeds of any Draw will be used in a
manner that would cause the interest on the Master Note to be includable in the gross
income of the holder of the Master Note under Section 103 of the Code.
6. REBATE. In the event the County has rebatable arbitrage, it agrees to
establish a Rebate Fund which shall be held for the benefit of the United States
Government as contemplated under the provisions hereof and shall not constitute part of
the trust estate held for the benefit of the holder of the Master Note. The County
acknowledges and agrees to comply with the terms of the Arbitrage Rebate Statement
attached hereto as Exhibit A.
7. AMENDMENTS. The provisions hereof need not be observed and this
Certificate may be amended or supplemented at any time by the County if, in each case,
the County receives an opinion or opinions of Note Counsel that the failure to comply
with such provisions will not cause, and that the terms of such amendment or supplement
will not cause, the Master Note to become an arbitrage bond under Section 148 of the
Code, or other applicable section of the Code, or otherwise cause interest on any Draw to
become includable in gross income for federal income tax purposes under the Code.
8. NOTE NOT FEDERALLY GUARANTEED. Payment of debt service
on the Master Note is not directly or indirectly guaranteed in whole or in part by the
United States, within the meaning of Section 149(b) of the Code. None of the Net
Proceeds of any Draw will be invested directly or indirectly in federally insured deposits
or accounts.
9. NOTE NOT HEDGE BOND. It is reasonably expected that not less than
85% of the Net Proceeds of any Draw will be used to carry out the governmental
purposes of such Draw within three years from the date of each Draw. None of the Net
Proceeds of any Draw is reasonably expected to be invested in nonpurpose investments
having a substantially guaranteed yield for four years or more (including but not limited
to any investment contract or fixed yield investment having a maturity of four years or
more). The reasonable expectations stated above are not based on and do not take into
account any expectations or assumptions as to the occurrence of changes in market
interest rates or of federal tax law or regulations or rulings thereunder. These reasonable
expectations are not based on any prepayments of items other than items which are
customarily prepaid.
10. ADDITIONAL COVENANTS. The County further agrees to (a) impose
such limitations on the investment or use of moneys or investments related to the Master
Note, (b) make such rebate payments to the United States Treasury, (c) maintain such
records, (d) perform such calculations, (e) enter into such agreements, and (f) perform
such other acts as may be necessary under the Code to preserve the exclusion from gross
income for purposes of federal income taxation of interest on the Master Note, which it
may lawfully do.
3
11. INFORMATION. The County agrees to file all information statements as
may be required by the Code.
12. VALUATION AND MARKET PRICE RULES. In determining the
amounts on deposit in any fund or account for purposes of this Certificate, the "market
price rules" set forth in Exhibit A attached hereto shall apply.
13. NO .REPLACEMENT. No portion of the amounts received from
issuance, conversion, sale or remarketing of the Master Note will be used as a substitute
for other funds which were otherwise to be used for the payment of debt service on the
Master Note, and which have been or will be used to acquire, directly or indirectly,
obligations producing a yield in excess of the Note Yield.
14. NO ADVERSE ACTION. The County has neither received notice that its
Certificate may not be relied upon with respect to its issues, nor has it been advised that
any adverse action by the Commissioner of Internal Revenue is contemplated.
To the best of our knowledge and belief there are -no facts, estimates or
circumstances other than those expressed herein that materially affect the expectations
herein expressed, and, to the best of our knowledge and belief, the County's expectations
are reasonable. We further represent that the County expects and intends to be able to
comply with the provisions and procedures set forth herein, including Section 148 of the
Code.
IN WITNESS WHEREOF, we have hereunto set our hands as of the 1st day of
February, 2018.
MONROE COUNTY, FLORIDA
By:
Mayor
By:
Clerk of the Circuit Court of Monroe
County, Florida and Ex-Officio Clerk to the
Board of County Commissioners
MONROE COUNTY ATTORNEY
AP=L4-4--
AS j0 0
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C NTHIA L. HALL
ASSISTANT COUNTY ATTORNEY
4 Data- - - L:_ �1.. 2-0_r 6
EXHIBIT A
ARBITRAGE REBATE STATEMENT
This Arbitrage Rebate Statement ("Statement") is intended to set forth certain
duties and requirements necessary for compliance with Section 148(f) of the Code to the
extent necessary to preserve the tax-exempt treatment of interest on the $40,000,000
Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank, National
Association Line of Credit), Series 2018 (the "Master Note"). This Statement is based
upon Section 148(f) of the Code and by analogy, to the Regulations. However, it is not
intended to be exhaustive.
Since the requirements of such Section 148(f) are subject to amplification and
clarification, it may be necessary to supplement or modify this Statement from time to
time to reflect any additional or different requirements of such Section and the
Regulations or to specify that action required hereunder is no longer required or that
some further or different action is required to maintain or assure the exemption from
federal income tax of interest with respect to the Master Note.
For purposes hereof, any covenant relating to a fund, account or subaccount
established under the Resolution or the Agreement shall be deemed to apply only to that
portion of such fund, account or subaccount allocable to the Master Note.
SECTION 1. TAX COVENANTS. Pursuant to the Agreement, the
County has made certain covenants designed to assure that the interest with respect to the
Master Note is and shall remain excludable from gross income for purposes of federal
income taxation. The County shall not, directly or indirectly, use or permit the use of any
proceeds of the Master Note or any other funds or take or omit to take any action that
would cause the Master Note to be "arbitrage bonds" within the meaning of Section 148
of the Code or that would cause interest on the Master Note to be included in gross
income for federal income tax purposes under the provisions of the Code. The County
shall comply with all other requirements as shall be determined by Note Counsel to be
necessary or appropriate to assure that interest on the Master Note will be excludable
from gross income for purposes of federal income taxation. To that end, the County shall
comply with all requirements of Section 148 of the Code to the extent applicable to the
Master Note.
SECTION 2. DEFINITIONS. Capitalized terms used herein, not
otherwise defined herein, shall have the same meanings set forth in the Resolution, the
Agreement or in the County's Certificate as to Arbitrage and Certain Other Tax Matters
relating to the Master Note.
"Code" means the Internal Revenue Code of 1986, as amended.
IW
"Computation Date" means each date selected by the County as a computation
date pursuant to Section 1.148-3(e) of the Regulations and the Final Computation Date.
"Fair Market Value" means, when applied to a Nonpurpose Investment, the Fair
Market Value of such Investment as determined in accordance with Section 4 hereof.
"Final Computation Date" means the date the Master Note is discharged.
"Gross Proceeds" means, with respect to the Master Note:
(1) Amounts constituting Sale Proceeds of the Master Note.
(2) Amounts constituting Investment Proceeds of the Master Note.
(3) Amounts constituting Transferred Proceeds of the Master Note.
(4) Other amounts constituting Replacement Proceeds of the Master
Note, including Pledged Moneys.
"Investment Proceeds" means any amounts actually or constructively received
from investing proceeds of the Master Note. ,
"Investment Property" shall have the meaning as ascribed to such term in
Section 148(b)(2) of the Code, which includes any security, obligation or other property
held principally as a passive vehicle for the production of income, within the meaning of
Section 1.148-1(e) of the Regulations.
"Issue Date" means February 1, 2018.
"Master Note Year" means any one-year period (or shorter period from the Issue
Date) ending on the close of business on the day preceding the anniversary of the Issue
Date.
"Net Proceeds" means Sale Proceeds, less the portion of such Proceeds invested
in a reasonably required reserve or replacement fund under the Code.
"Nonpurpose Investment" means any Investment Property in which Gross
Proceeds are invested which is not an investment that is acquired to carry out the
governmental purpose of the Master Note, e.g., obligations acquired with Gross Proceeds
that are invested temporarily until needed for the governmental purpose of the Master
Note, that are used to discharge a prior issue, or that are invested in a reasonably required
reserve or replacement fund, as referenced in Section 1.148-1(b) of the Regulations.
"Nonpurpose Payments" shall include the payments with respect to Nonpurpose
Investments specified in Section 1.148-3(d)(1)(i)-(v) of the Regulations.
FEW
"Nonpurpose Receipts" shall include the receipts with respect to Nonpurpose
Investments specified in Section 1. 148-3 (d)(2)(i)-(iii) of the Regulations.
"Note Counsel" means Nabors, Giblin & Nickerson, P.A., Tampa, Florida or
such other firm of nationally recognized note counsel as may be selected by the County.
"Pledged Moneys" means moneys that are reasonably expected to be used
directly or indirectly to pay debt service on the Master Note or as to which there is a
reasonable assurance that such moneys or the earnings thereon will be available directly
or indirectly to pay debt service on the Master Note if the County encounters financial
difficulties.
"Pre -Issuance Accrued Interest" means amounts representing interest that has
accrued on an obligation for a period of not greater than one year before its issue date but
only if those amounts are paid within one year after the Issue Date.
"Proceeds" means any Sale Proceeds, Investment Proceeds and Transferred
Proceeds of the Master Note.
"Qualified Administrative Costs" means reasonable, direct administrative costs,
other than carrying costs, such as separately stated brokerage and selling commissions
that are comparable to those charged nongovernmental entities in transactions not
involving tax-exempt bond proceeds, but not legal and accounting fees, recordkeeping,
custody or similar costs. In addition, with respect to a guaranteed investment contract or
investments purchased for a yield restricted defeasance escrow, such costs will be
considered reasonable if (1) the amount of the fee the Issuer treats as a Qualified
Administrative Cost does not exceed the lesser of (a) $40,000 (for calendar year 2018),
and (b) 0.2% of the "computational base," or, if more, $4,000; and (2) the Issuer does not
treat as Qualified Administrative Costs more than $113,000 (for calendar year 2018) in
brokers' commissions or similar fees with respect to all guaranteed investment contracts
and investments for yield restricted defeasance escrows purchased with Gross Proceeds
of the issue. For purposes of this definition only, "computational base" shall mean, with
respect to guaranteed investment contracts, the amount of Gross Proceeds the Issuer
reasonably expects, as of the date the contract is acquired, to be deposited in the
guaranteed investment contract over the term of the contract and for investments other
than guaranteed investment contracts, "computational base" shall mean the amount of
Gross Proceeds initially invested in such investments. The above -described safe harbor
dollar amounts shall be increased each calendar year for cost -of -living adjustments
pursuant to Section 1.148-5(e) of the Regulations.
"Rebatable Arbitrage" means, as of any Computation Date, the excess of the
future value of all Nonpurpose Receipts over the future value of all Nonpurpose
Payments.
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"Rebate Fund" means the Rebate Fund described in Section 3(b) hereof.
"Regulations" means Treasury Regulations Sections 1.148-0 through 1.148-11,
1.149(b)-1 and (d)-1, and 1.150-0 through 1.150-2, as amended, and any regulations
amendatory, supplementary or additional thereto.
"Replacement Proceeds" means amounts that have a sufficiently direct nexus to
the Master Note or to the governmental purpose of the Master Note to conclude that the
amounts would have been used for that governmental purpose if the Proceeds of the
Master Note were not used or to be used for that governmental purpose. For this purpose,
governmental purposes include the expected use of amounts for the payment of debt
service on a particular date. The mere availability or preliminary earmarking of amounts
for a governmental purpose, however, does not in itself establish a sufficient nexus to
cause those amounts to be Replacement Proceeds. Replacement Proceeds include, but
are not limited to, amounts held in a sinking fund or a pledged fund. For these purposes,
an amount is pledged to pay principal of or interest on the Master Note if there is
reasonable assurance that the amount will be available for such purposes in the event that
the County encounters financial difficulties.
"Sale Proceeds" means any amounts actually or constructively received by the
County from the sale of the Master Note, including amounts used to pay underwriters'
discount or compensation and interest other than Pre -Issuance Accrued Interest. Sale
Proceeds shall also include, but are not limited to, amounts derived from the sale of a
right that is associated with the Master Note and that is described in Section 1.148-
4(b)(4) of the Regulations.
"Tax -Exempt Investment" means (i) an obligation the interest on which is
excluded from gross income pursuant to Section 103 of the Code, (ii) United States
Treasury -State and Local Government Series, Demand Deposit Securities, and (iii) stock
in a tax-exempt mutual fund as described in Section 1.1504(b) of the Regulations. Tax -
Exempt Investment shall not include a specified private activity bond as defined in
Section 57(a)(5)(C) of the Code. For purposes of this Statement, a tax-exempt mutual
fund includes any regulated investment company within the meaning of Section 851(a) of
the Code meeting the requirements of Section 852(a) of the Code for the applicable
taxable year; having only one class of stock authorized and outstanding; investing all of
its assets in tax-exempt obligations to the extent practicable; and having at least 98% of
(1) its gross income derived from interest on, or gain from the sale of or other disposition
of, tax-exempt obligations or (2) the weighted average value of its assets represented by
investments in tax-exempt obligations.
"Transferred Proceeds" shall have the meaning provided therefor in
Section 1.148-9 of the Regulations.
"Universal Cap" means the value of the then outstanding Master Note.
FEW
"Value" (of the Master Note) means with respect to the Master Note issued with
not more than two percent original issue discount or original issue premium, the
outstanding principal amount, plus accrued unpaid interest; for any other Master Note, its
present value.
"Value" (of an Investment) shall have the following meaning in the following
circumstances:
(1) General Rules. Subject to the special rules in the following paragraph, an
issuer may determine the value of an investment on a date using one of the following
valuation methods consistently applied for all purposes relating to arbitrage and rebate
with respect to that investment on that date:
(a) an investment with not more than two percent original issue discount
or original issue premium may be valued at its outstanding stated principal
amount, plus accrued unpaid interest on such date;
(b) a fixed rate investment may be valued at its present value on such
date; and
(c) an investment may be valued at its Fair Market Value on such date.
(2) Special Rules. Yield restricted investments are to be valued at present
value provided that (except for purposes of allocating Transferred Proceeds to an issue,
for purposes of the Universal Cap and for investments in a commingled fund other than a
bona fide debt service fund unless it is a certain commingled fund):
(a) an investment must be valued at its Fair Market Value when it is first
allocated to an issue, when it is disposed of and when it is deemed acquired or
deemed disposed of, and provided further that;
(b) in the case of Transferred Proceeds, the Value of a Nonpurpose
Investment that is allocated to Transferred Proceeds of a refunding issue on a
transfer date may not exceed the Value of that investment on the transfer date used
for purposes of applying the arbitrage restrictions to the refunded issue.
"Yield on the Master Note" or "Note Yield" means, for all Computation Dates,
the Yield expected as of the date hereof on the Master Note over the term of such Master
Note computed by:
(1) using as the purchase price of the Master Note, the amount at which such
Master Note was sold to the public within the meaning of Sections 1273 and 1274 of the
Code; and
on
(2) assuming that the Master Note will be paid at its scheduled maturity date or
in accordance with any mandatory redemption requirements.
"Yield" means, generally, the discount rate which, when used in computing the
present value of all the unconditionally payable payments of principal and interest on an
obligation and all the payments for qualified guarantees paid and to be paid with respect
to such obligation, produces an amount equal to the present value of the issue price of
such obligation. Present value is computed as of the date of issue of the obligation.
There are, however, many additional specific rules contained in the Regulations which
apply to the calculation and recalculation of yield for particular obligations and such rules
should be consulted prior to calculating the yield for the Master Note on any
Computation Date. Yield shall be calculated on a 360-day year basis with interest
compounded monthly. For this purpose, the purchase price of a Nonpurpose Investment
or a Tax -Exempt Investment is its Fair Market Value, as determined pursuant to
Section 4 of this Statement, as of the date that it becomes allocated to Gross Proceeds of
the Master Note.
SECTION 3. REBATE REQUIREMENTS.
(a) The County shall pay to the United States Government at the times and in
the amounts determined hereunder, the Rebatable Arbitrage. For purposes of
determining the Rebatable Arbitrage, the County shall cause the calculations to be made
by competent tax counsel or other financial or accounting advisors or persons to ensure
correct application of the rules contained in the Code and the Regulations relating to
arbitrage rebate.
(b) If there is any Rebatable Arbitrage, the County shall establish an account
separate from any other fund or account established and maintained under the Agreement
designated the "Rebate Fund." The County or its designated agent shall administer the
Rebate Fund and continuously invest all amounts held in the Rebate Fund in U.S.
Treasury obligations or Tax -Exempt Investments.
(c) Within 30 days after any Computation Date, the County shall calculate or
cause to be calculated the Rebatable Arbitrage or any penalty due pursuant to Section 3(f)
hereof. Immediately following such calculations, but in no event later than 60 days
following the Computation Date (90 days in the case of any penalty payment due
pursuant to Section 3(f) hereof), the County shall remit an amount which when added to
the future value of previous rebate payments shall not be less than 90% (100% with
respect to the Computation Date on the final repayment or retirement of the Master Note)
of the Rebatable Arbitrage or 100% of any penalty due pursuant to Section 3(f) hereof as
of the applicable Computation Date.
Each payment shall be accompanied by Internal Revenue Service Form 8038-T.
.n
(d) The obligation to pay Rebatable Arbitrage to the United States, as described
herein, shall be treated as satisfied with respect to the Master Note if (i) Gross Proceeds
are expended for the governmental purpose of the Master Note by no later than the date
which is six months after the Issue Date and if it is not anticipated that any other Gross
Proceeds will arise during the remainder of the term of the Master Note and (ii) the
requirement to pay Rebatable Arbitrage, if any, to the United States with respect to the
portion of the Reserve Account allocable to the Master Note is met. For purposes of the
preceding sentence, Gross Proceeds do not include (i) amounts deposited in a bona fide
debt service fund, so long as the funds therein constitute bona fide debt service funds, or
a reasonably required reserve or replacement fund (meeting the requirements of Section
1.148-2(f) of the Regulations), (ii) amounts that, as of the Issue Date, are not reasonably
expected to be Gross Proceeds but that become Gross Proceeds after the date which is six
months after the Issue Date, (iii) amounts representing Sale or Investment Proceeds
derived from any Purpose Investment (as defined in Section 1.148-1 of the Regulations)
and earnings on those payments, and (iv) amounts representing any repayments of grants
(as defined in Section 1.148-6(d)(4) of the Regulations). If Gross Proceeds are in fact
expended by such date, then, except as to the Reserve Account, Rebatable Arbitrage with
respect to such Gross Proceeds need not be calculated and no payment thereof to the
United States Department of Treasury need be made. Use of Gross Proceeds to redeem
the Master Note shall not be treated as an expenditure of such Gross Proceeds.
Notwithstanding the foregoing, if Gross Proceeds which were reasonably expected
to be Gross Proceeds on the Issue Date actually become available after the date which is
six months after the Issue Date, then the requirements described herein relating to the
calculation of Rebatable Arbitrage and the payment thereof to the United States must be
satisfied, except that no such calculation or payment need be made with respect to the
initial six-month period. Any other amounts not described in this Section 3(d) which
constitute proceeds of the Master Note, other than a bona fide debt service fund, will be
subject to rebate.
(e) As an alternative to Section 3(d) above, the obligation -of the County to pay
Rebatable Arbitrage to the United States, as described herein, shall be treated as satisfied
with respect to the Master Note if (i) the rebate requirement is met for all proceeds of the
Master Note other than Gross Proceeds (as defined in Section 3(d) hereof) and (ii) the
Gross Proceeds of the Master Note are expended for the governmental purposes of the
issue within the periods set forth below:
(i) at least 15% of such Gross Proceeds of the Master Note are spent
within the six-month period beginning on the Issue Date;
(ii) at least 60% of such Gross Proceeds of the Master Note are spent
within the 1-year period beginning on the Issue Date; and
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(iii) at least 100% of such Gross Proceeds of the Master Note are spent
within the 18-month period beginning on the Issue Date.
As set forth in Section 1.148-7(d)(2) of the Regulations, for purposes of the
expenditure requirements set forth in this Section 3(e), 100% of the Gross Proceeds of the
Master Note shall be treated as expended for the governmental purposes of the issue
within the 18-month period beginning on the Issue Date if such requirement is met within
the 30-month period beginning on the Issue Date and such requirement would have been
met within such 18-month period but for a reasonable retainage (not exceeding 5% of the
Net Proceeds of the Master Note). If Gross Proceeds are in fact expended by such dates,
then Rebatable Arbitrage need not be calculated and no payment thereof to the United
States Department of Treasury need be made. Any failure to satisfy the final spending
requirement shall be disregarded if the County exercises due diligence to complete the
project financed by the Master Note and the amount of the failure does not exceed the
lesser of (i) 3% of the issue price of the Master Note or (ii) $250,000. Use of Gross
Proceeds to redeem the Master Note shall not be treated as an expenditure of such Gross
Proceeds. For purposes of this Section 3(e), "Gross Proceeds" shall be modified as
described in Section 3(d) above.
(f) As an alternative to Sections 3(d) and (e) above, the obligation to pay
Rebatable Arbitrage to the United States, as described herein, shall be treated as satisfied
with respect to the Master Note if the Available Construction Proceeds (as defined in
Section 148(f)(4)(C)(vi) of the Code and described below) are expended for the
governmental purposes of the issue within the periods set forth below:
(i) at least 10% of such Available Construction Proceeds are spent
within the six-month period beginning on the Issue Date;
(ii) at least 45% of such Available Construction Proceeds are spent
within the 1-year period beginning on the Issue Date;
(iii) at least 75% of such Available Construction Proceeds are spent
within the eighteen -month period beginning on the Issue Date; and
(iv) at least 100% of such Available Construction Proceeds are spent
within the 2-year period beginning on the Issue Date.
For purposes of this Section 3(f), the term Available Construction Proceeds means
the Net Proceeds of the Master Note, increased by earnings on such Net Proceeds, and
earnings on all of the foregoing earnings, and reduced by the amount of such Net
Proceeds deposited to the Reserve Account and amounts used to pay issuance costs. Any
amounts which constitute proceeds of the Master Note other than Available Construction
Proceeds and amounts on deposit in a bona fide debt service fund will be subject to
rebate.
As set forth in Section 148(f)(4)(C)(iii) of the Code, for purposes of the
expenditure requirements set forth in this Section 3(f), 100% of Available Construction
Proceeds of the Master Note shall be treated as expended for the governmental purposes
of the issue within the 2-year period beginning on the Issue Date if such requirement is
met within the 3-year period beginning on the Issue Date and such requirement would
have been met within such 2-year period but for a reasonable retainage (not exceeding
5% of the Net Proceeds of the Master Note). Use of Available Construction Proceeds to
redeem the Master Note shall not be treated as an expenditure of such Proceeds.
Any failure to satisfy the final spending requirement shall be disregarded if the
County exercises due diligence to complete the project financed by the Master Note and
the amount of the failure does not exceed the lesser of (i) 3% of the issue price of the
Master Note or (ii) $250,000.
For purposes of Section 148(f)(4)(C)(vii) of the Code, in the event the County fails
to meet the expenditure requirements referred to above, the County may elect to pay, in
lieu of the Rebatable Arbitrage otherwise required to be paid with respect to such Gross
Proceeds, a penalty with respect to the close of each 6-month period after the Issue Date
equal to 1.5% of the amount of the Available Construction Proceeds of the Master Note
which, as of the close of such period, are not spent as required by the expenditure
provisions set forth above. The penalty referred to above shall cease to apply only after
the Master Note (including any refunding note or bonds issued with respect thereto) is no
longer outstanding. The County makes no election in regard to the above -described
penalty.
In order to qualify for the exemption from the obligation to pay Rebatable
Arbitrage to the United States pursuant to this Section 3(f), at least 75% of the Available
Construction Proceeds must be used for construction expenditures (as defined in
Section 1.148-7(g) of the Regulations) with respect to property which is owned by a
governmental unit or an organization described in Section 501(c)(3) of the Code. The
term "construction" includes reconstruction and rehabilitation of existing property and
rules similar to the rules of Section 142(b)(1)(B) of the Code shall apply. If only a
portion of an issue is to be used for construction expenditures, such portion and the other
portion of such issue may, at the election of the issuer, be treated as separate issues for
purposes of this Section 3(f) (although the remaining portion may not be entitled to the
benefits of Section 3(d) hereof). The County does not elect to treat any portion of the
Master Note as a separate issue.
(g) The County shall keep proper books of records and accounts containing
complete and correct entries of all transactions relating to the receipt, investment,
disbursement, allocation and application of the moneys related to the Master Note,
including moneys derived from, pledged to, or to be used to make payments on the
Master Note. Such records shall, at a minimum, be adequate to enable the County or its
consultants to make the calculations for payment of Rebatable Arbitrage as required by
this Statement. The records required to be maintained under this Section 3(g) shall be
retained by the County until six years after the retirement of the last obligation of the
Master Note or for such other period as the United States Treasury may by regulations
otherwise provide. Such records shall at least specify the account or fund to which each
investment (or portion thereof) is to be allocated and shall set forth, in the case of each
investment security, (i) its purchase price (including the amount of accrued interest to be
stated separately), (ii) identifying information, including par amount, coupon rate, and
payment dates, (iii) the amount received at maturity or its sale price, as the case may be,
including accrued interest, (iv) the amounts and dates of any payments made with respect
thereto, (v) the dates of acquisition and disposition or maturity, (vi) the amount of
original issue discount or premium (if any), (vii) the frequency of periodic payments (and
actual dates and amounts of receipts), (viii) the period of compounding, (ix) the
transaction costs (e.g., commissions) incurred in acquiring, carrying or disposing of the
Nonpurpose Investments, and (x) market price data sufficient to establish that the
purchase price (disposition price) was not greater than (less than) the arm's-length price
(see Section 4 below) on the date of acquisition (disposition) or, if earlier, on the date of a
binding contract to acquire (dispose of) such Nonpurpose Investment.
SECTION 4. MARKET PRICE RULES. Except as provided below, the
County agrees to comply with the requirements relating to the "Fair Market Value" of
acquired Nonpurpose Investments, as defined in Section 1.148-5(d) of the Regulations
("Fair Market Value"). All investments required to be made pursuant to this Statement
shall be made to the extent permitted by law. In this regard, the County agrees, among
other things, that it will not acquire or cause to be acquired a Nonpurpose Investment (or
any other investment acquired with Gross Proceeds or on deposit in the Rebate Fund) for
a price in excess of its Fair Market Value or sell any such investment at a price
(determined without any reduction for transaction costs) less than its Fair Market Value,
except as provided below. For this purpose, the following rules shall apply:
(a) Established securities markets. Except as otherwise provided below, any
market especially established to provide a security or obligation to an issuer of municipal
obligations shall not be treated as an established market and shall be rebuttably presumed
to be acquired or disposed of for a price that is not its Fair Market Value.
(b) Arm's-len tgth price. Any transaction in which a Nonpurpose Investment is
directly purchased with Gross Proceeds, or in which a Nonpurpose Investment allocable
to Gross Proceeds is disposed of, shall be undertaken in an arm's-length manner, and no
amount shall be paid to reduce the yield on the Nonpurpose Investment.
(c) Safe harbor for establishing Fair Market Value for guaranteed investment
contracts and Nonpurpose Investments purchased for a yield restricted defeasance
escrow. In the case of a guaranteed investment contract or Nonpurpose Investments
purchased for a yield restricted defeasance escrow, the purchase price shall not be
considered to be an arm's-length price unless all the following conditions are met:
1
(i) The County makes a bona fide solicitation ("Bona Fide Solicitation")
for the purchase of the investment that satisfies all of the following requirements:
(1) The bid specifications are in writing and are timely forwarded
to potential providers;
(2) The bid specifications include all terms of the bid that may
directly or indirectly affect the yield or the cost of the investment;
(3) The bid specifications include a statement notifying potential
providers that submission of a bid is a representation that the potential
provider did not consult with any other potential provider about its bid, that
the bid was determined without regard to any other formal or informal
agreement that the potential provider has with the County or any other
person (whether or not in connection with the note or bond issue), and that
the bid is not being submitted solely as a courtesy to the County or any
other person for purposes of satisfying these requirements;
(4) The terms of the bid specifications are such that there is a
legitimate business purpose for each term other than to increase the
purchase price or reduce the yield of the investment (e.g., for solicitations
of Nonpurpose Investments for a yield restricted defeasance escrow, the
hold firm period must be no longer than the County reasonably requires);
(5) For purchases of guaranteed investment contracts only, the
terms of the solicitation take into account the County's reasonably expected
deposit and draw down schedule for the amounts to be invested;
(6) All potential providers have an equal opportunity to bid (e.g.,
no potential provider is given the opportunity to review other bids before
providing a bid); and
(7) At least three providers are solicited for bids that have an
established industry reputation as a competitive provider of the type of
investments being purchased.
(ii) The bids received by the County must meet all of the following
requirements:
(1) The County receives at least three bids from providers that
the County solicited under a Bona Fide Solicitation and that do not have a
material financial interest in the issue. A lead underwriter in a negotiated
underwriting transaction is deemed to have a material financial interest in
the issue until 15 days after the issue date of the issue. In addition, any
entity acting as a financial advisor with respect to the purchase of the
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investment at the time the bid specifications are forwarded to potential
providers has a material financial interest in the issue. A provider that is a
related party to a provider that has a material financial interest in the issue
is deemed to have a material financial interest in the issue.
(2) At least one of the,three bids described in paragraph (c)(ii)(1)
above is from a provider that has an established industry reputation as a
competitive provider of the type of investments being purchased; and
(3) If the County uses an agent to conduct the bidding process,
the agent did not bid to provide the investment.
(iii) The winning bid must meet the following requirements:
(1) Guaranteed investment contracts. If the investment is a
guaranteed investment contract, the winning bid is the highest yielding
bona fide bid (determined net of any broker's fees).
(2) Other Nonpurpose Investments. If the investment is not a
guaranteed investment contract, the following requirements are met:
(A) The winning bid is the lowest cost bona fide bid
(including any broker's fees). The lowest bid is either the lowest
cost bid for the portfolio or, if the County compares the bids on an
investment -by -investment basis, the aggregate cost of a portfolio
comprised of the lowest cost bid for each investment. Any payment
received by the County from a provider at the time a guaranteed
investment contract is purchased (e.g., an escrow float contract) for a
yield restricted defeasance escrow under a bidding procedure
meeting these requirements is taken into account in determining the
lowest cost bid.
(B) The lowest cost bona fide bid (including any broker's
fees) is not greater than the cost of the most efficient portfolio
comprised exclusively of State and Local Government Series
Securities from the United States Department of the Treasury,
Bureau of Public Debt. The cost of the most efficient portfolio of
State and Local Government Series Securities is to be determined at
the time that bids are required to be submitted pursuant to the terms
of the bid specifications. If such State and Local Government Series
Securities are not available for purchase on the day that bids are
required to be submitted because sales of those securities have been
suspended, the cost comparison described in this paragraph is not
required.
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(iv) The provider of the investments or the obligor on the guaranteed
investment contract certifies the administrative costs that it pays (or expects to
pay) to third parties in connection with supplying the investment.
(d) The County shall retain certificates and records documenting compliance
with the above requirements until three years after the Master Note is redeemed
including, but not limited to, the following:
(i) For purchases of guaranteed investment contracts, a copy of the
contract, and for purchases of Nonpurpose Investments other than guaranteed
investment contracts, the purchase agreement or confirmation;
(ii) The receipt or other record of the amount actually paid by the
County for the investments, including a record of any administrative costs paid by
the County and the certification required in paragraph (c)(iv) above;
(iii) For each bid that is submitted, the name of the person and entity
submitting the bid, the time and date of the bid, and the bid results;
(iv) The bid solicitation form and, if the terms of the purchase agreement
or the guaranteed investment contract deviated from the bid solicitation form or a
submitted bid is modified, a brief statement explaining the deviation and stating
the purpose for the deviation; and
(v) For purchase of Nonpurpose Investments other than guaranteed
investment contracts, the cost of the most efficient portfolio of State and Local
Government Series Securities, determined at the time that the bids were required
to be submitted.
SECTION 5. MODIFICATION UPON RECEIPT OF NOTE
COUNSEL OPINION. Notwithstanding any provision of this Statement, if the County
shall receive an opinion of Note Counsel that any specified action required under this
Statement is no longer required or that some further or different action is required to
maintain or assure the exclusion from federal gross income of interest with respect to the
Master Note, the County may conclusively rely on such opinion in complying with the
requirements of this Statement and the covenants herein shall be deemed to be modified
to that extent. This Statement shall be amended or modified by the parties hereto in any
manner which is necessary to comply with such regulations as may be promulgated by
the United States Treasury Department from time to time.
SECTION 6. ACCOUNTING FOR GROSS PROCEEDS. In order to
perform the calculations required by the Code and the Regulations, it is necessary to track
the investment and expenditure of all Gross Proceeds. To that end, the County must
adopt reasonable and consistently applied methods of accounting for all Gross Proceeds.
A-13
Appendix I hereto sets forth a description of the required allocation and accounting rules
with which the County agrees to comply.
SECTION 7. ADMINISTRATIVE COSTS OF INVESTMENTS.
Except as otherwise provided in this Section 7, an allocation of Gross Proceeds to a
payment or receipt on a Nonpurpose Investment is not adjusted to take into account any
costs or expenses paid, directly or indirectly, to purchase, carry, sell or retire the
Nonpurpose Investment (administrative costs). Thus, administrative costs generally do
not increase the payments for, or reduce the receipts from, Nonpurpose Investments.
In determining payments and receipts on Nonpurpose Investments, Qualified
Administrative Costs are taken into account by increasing payments for, or reducing the
receipts from, the Nonpurpose Investments. Qualified Administrative Costs are
reasonable, direct administrative costs, other than carrying costs, such as separately stated
brokerage or selling commissions, but not legal and accounting fees, recordkeeping,
custody and similar costs. General overhead costs ' and similar indirect costs of the
County such as employee salaries and office expenses and costs associated with
computing Rebatable Arbitrage are not Qualified Administrative Costs.
Allocation and accounting rules are provided in Appendix I attached hereto.
A-14
APPENDIX I
ALLOCATION AND ACCOUNTING RULES
(a) General Rule. Any issuer may use any reasonable, consistently applied
accounting method to account for Gross Proceeds, investments and expenditures of an
issue. An accounting method is "consistently applied" if it is applied uniformly within a
Fiscal Period (as hereinafter defined) and between Fiscal Periods to account for Gross
Proceeds of an issue and any amounts that are in a commingled fund.
(b) Allocation of Gross Proceeds to an Issue. Amounts are allocable to only
one issue at a time as Gross Proceeds. Amounts cease to be allocated to an issue as
Proceeds only when those amounts (i) are allocated to an expenditure for a governmental
purpose; (ii) are allocated to Transferred Proceeds of another issue of obligations; or
(iii) cease to be allocated to that issue at retirement of the issue or under the Universal
Cap.
(c) Allocation of Gross Proceeds to Investments. Upon the purchase or sale of
a Nonpurpose Investment, Gross Proceeds of an issue are not allocated to a payment for
that Nonpurpose Investment in an amount greater than, or to a receipt from that
Nonpurpose Investment in an amount less than, the Fair Market Value of the Nonpurpose
Investment as of the purchase or sale date. The Fair Market Value of a Nonpurpose
Investment is adjusted to take into account Qualified Administrative Costs allocable to
the investment. Thus, Qualified Administrative Costs increase the payments for, or
decrease the receipts from, a Nonpurpose Investment.
(d) Allocation of Gross Proceeds to Expenditures. Reasonable accounting
methods for allocating funds from different sources to expenditures for the same
governmental purpose include a "specific tracing" method, a "gross -proceeds -spent -first"
method, a "first -in -first -out" method or a ratable allocation method, so long as the method
used is consistently applied. An allocation of Gross Proceeds of an issue to an
expenditure_ must involve a current outlay of cash for a governmental purpose of the
issue. A current outlay of cash means an outlay reasonably expected to occur not later
than five banking days after the date as of which the allocation of Gross Proceeds to the
expenditure is made.
(e) Commingled Funds. Any fund or account that contains both Gross
Proceeds of an issue and amounts in excess of $25,000 that are not Gross Proceeds of that
issue if the amounts in the fund or account are invested and accounted for collectively,
without regard to the source of the funds deposited therein, constitutes a "commingled
fund." All payments and receipts (including deemed payments and receipts) on
investments held by a commingled fund must be allocated (but not necessarily
distributed) among each different source of funds invested in the commingled fund in
accordance with a consistently applied, reasonable ratable allocation method. Reasonable
ratable allocation methods include, without limitation, methods that allocate payments
and receipts in proportion to either (i) the average daily balances of the amounts in the
commingled fund from each different source of funds during any consistent time period
A-I-1
within its fiscal year, but at least quarterly (the "Fiscal Period"); or (ii) the average of the
beginning and ending balances of the amounts in the commingled fund from each
different source of funds for a Fiscal Period that does not exceed one month.
Funds invested in the commingled fund may be allocated directly to expenditures
for governmental purposes pursuant to a reasonable consistently applied accounting
method. If a ratable allocation method is used to allocate expenditures from the
commingled fund, the same ratable allocation method must be used to allocate payments
and receipts on investments in the commingled fund.
Generally, a commingled fund must treat all its investments as if sold at Fair
Market Value either on the last day of the fiscal year or on the last day of each Fiscal
Period. The net gains or losses from these deemed sales of investments must be allocated
to each different source of funds invested in the commingled fund during the period since
the last allocation. This mark -to -market requirement does not apply if (i) the remaining
weighted average maturity of all investments held by a commingled fund during a
particular fiscal year does not exceed 18 months, and the investments held by the
commingled fund during that fiscal year consist exclusively of obligations; or (ii) the
commingled fund operated exclusively as a reserve fund, sinking fund or replacement
fund for two or more issues of the same issuer. Subject to the Universal Cap limitation,
and the principle that amounts are allocable to only one issue at a time as Gross Proceeds,
investments held by a commingled fund must be allocated ratably among the issues
served by the commingled fund in proportion to either (i) the relative values of the notes
or bonds of those issues; (ii) the relative amounts of the remaining maximum annual debt
service requirements on the outstanding principal amounts of those issues; or (iii) the
relative original stated principal amounts of the outstanding issues.
(f) Universal Cap. Amounts that would otherwise be Gross Proceeds allocable
to an issue are allocated (and remain allocated) to the issue only to the extent that the
Value of the Nonpurpose Investments allocable to those Gross Proceeds does not exceed
the Value of all outstanding notes or bonds of the issue. Nonpurpose Investments
allocated to Gross Proceeds in a bona fide debt service fund for an issue are not taken
into account in determining the Value of the Nonpurpose Investments, and those
Nonpurpose Investments remain allocated to the issue. To the extent that the Value of
the Nonpurpose Investments allocable to the Gross Proceeds of an issue exceed the Value
of all outstanding notes or bonds of that issue, an issuer should seek the advice of Note
Counsel for the procedures necessary to comply with the Universal Cap.
(g) Expenditure for Working Capital Purposes. Subject to certain exceptions,
the Proceeds of an issue may only be allocated to "working capital expenditures" as of
any date to the extent that those expenditures exceed "available amounts" as of that date
(i.e., "proceeds -spent -last").
A-I-2
For purposes of this section, "working capital expenditures" include all
expenditures other than "capital expenditures." "Capital expenditures" are costs of a type
properly chargeable (or chargeable upon proper election) to a capital account under
general federal income tax principles. Such costs include, for example, costs incurred to
acquire, construct or improve land, buildings and equipment having a reasonably
expected useful life in excess of one year. Thus, working capital expenditures include,
among other things, expenditures for current operating expenses and debt service.
For purposes of this section, "available amount" means any amount that is
available to an issuer for working capital expenditure purposes of the type financed by
the issue. Available amount excludes Proceeds of the issue but includes cash,
investments and other amounts held in accounts or otherwise by an issuer for working
capital expenditures of the type being financed by the issue without legislative or judicial
action and without a legislative, judicial or contractual requirement that those amounts be
reimbursed. Notwithstanding the preceding sentence, a "reasonable working capital
reserve" is treated as unavailable. A working capital reserve is reasonable if it does not
exceed five percent of the actual working capital expenditures of an issuer in the fiscal
year before the year in which the determination of available amounts is made. For
purpose of the preceding sentence only, in determining the working capital expenditures
of an issuer for a prior fiscal year, any expenditures (whether capital or working capital
expenditures) that are paid out of current revenues may be treated as working capital
expenditures.
The proceeds -spent -last requirement does not apply to expenditures to pay (i) any
Qualified Administrative Costs; (ii) fees for qualified guarantees of the issue or payments
for a qualified hedge for the issue; (iii) interest on the issue for a period commencing on
the Issue Date and ending on the date that is the later of three years from the Issue Date
or one year after the date on which the financed project is placed in service; (iv) the
United States for yield reduction payments (including rebate payments) or penalties for
the failure to meet the spend down requirements associated with certain spending
exceptions to the rebate requirement; (v) costs, other than those described in (i) through
(iv) above, that do not exceed five percent of the Sale Proceeds of an issue and that are
directly related to capital expenditures financed by the issue (e.g., initial operating
expenses for a new capital project); (vi) principal or interest on an issue paid from
unexpected excess sale or Investment Proceeds; (vii) principal or interest on an issue paid
from investment earnings on a reserve or replacement fund that are deposited in a bona
fide debt service fund; and (viii) principal, interest or redemption premium on a prior
issue and, for a crossover refunding issue, interest on that issue. Notwithstanding the
preceding paragraph, the exceptions described above do not apply if the allocation merely
substitutes Gross Proceeds for other amounts that would have been used to make those
expenditures in a manner that gives rise to Replacement Proceeds.
A-I-3
EXHIBIT B
ISSUE PRICE CERTIFICATE
The undersigned, on behalf of PNC Bank, National Association (the "Purchaser"),
hereby certifies as set forth below with respect to the purchase of the not exceeding
$40,000,000 Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank,
National Association Line of Credit), Series 2018 (the "Master Note"). Capitalized terms
used herein and not defined herein shall have the respective meanings ascribed to them in
the Certificate as to Arbitrage and Certain other Tax Matters, dated February 1, 2018, to
which this Issue Price Certificate is attached (the "Tax Certificate").
1. Purchase of the Master Note. On the date of this certificate, the Purchaser
is purchasing the Master Note for an amount equal to 100% of the aggregate principal
amount of the initial draw thereof, $10,000,000. To the extent Monroe County, Florida
(the "Issuer") makes subsequent draws against the Master Note, the Purchaser shall fund
each such draw in an amount equal to 100% of the principal amount thereof. The
Purchaser is not acting as an Underwriter with respect to the Master Note. The Purchaser
has no present intention to sell, reoffer, or otherwise dispose of the Master Note (or any
portion of the Master Note or any interest in the Master Note). The Purchaser has not
contracted with any person pursuant to a written agreement to have such person
participate in the initial sale of the Master Note and the Purchaser has not agreed with the
Issuer pursuant to a written agreement to sell the Master Note to persons other than the
Purchaser or a related party to the Purchaser.
2. Defined Terms. (a) Public means any person (including an individual,
trust, estate, partnership, association, company, or corporation) other than an Underwriter
or a related party. The term "related party" for purposes of this certificate generally
means any two or more persons who have greater than 50 percent common ownership,
directly or indirectly.
(b) Underwriter means (i) any person that agrees pursuant to a written contract
with the Issuer (or with the lead underwriter to form an underwriting syndicate) to
participate in the initial sale of the Master Note to the Public, and (ii) any person that
agrees pursuant to a written contract directly or indirectly with a person described in
clause (i) of this paragraph to participate in the initial sale of the Master Note to the
Public (including a member of a selling group or a party to a retail distribution agreement
participating in the initial sale of the Master Note to the Public).
The representations set forth in this certificate are limited to factual matters only
that are in existence on the date hereof. Nothing in this certificate represents the
Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.
The undersigned understands that the foregoing information will be relied upon by the
Issuer with respect to certain of the representations set forth in the Tax Certificate and
with respect to compliance with the federal income tax rules affecting the Master Note,
mm
and by Note Counsel in connection with rendering its opinion that the interest on the
Master Note is excluded from gross income for federal income tax purposes, the
preparation of the Internal Revenue Service Form 8038-G, and other federal income tax
advice that it may give to the Issuer from time to time relating to the Master Note;
provided, however, that the Purchaser (a) makes no representation as to the legal
sufficiency of the representations of fact set forth herein and (b) makes no representation
as to any conclusions of law made by Note Counsel.
PNC BANK, NATIONAL ASSOCIATION, as
Purchaser
By:���1
Nick Ayotte, Vi President
Dated: February 1, 2018
TALLAHASSEE 1S
1500 Mahan Drive
Nabors
Suite 200
TAMPA
Tallahassee, Florida 32308
2502 Rocky Point Drive
(850) 224-4070 Tel
Suite
Giblien&(850)
2244073 Fax
Tampa, Floridaida 33607
(813) 281-2222 Tel
FORT LAUDERDALE
(813) 281-0129 Fax
Nickerson
110 East Broward Boulevard
P.A.
Suite 1700
A T T 0 R N E Y 5 A T L A W
Fort Lauderdale, Florida 33301
(954) 315-3852 Tel
February 1, 2018
Board of County Commissioners
of Monroe County, Florida
Key West, Florida
Commissioners:
We have examined a record of proceedings relating to the issuance of a not
exceeding $40,000,000 aggregate principal amount of the Monroe County, Florida Tax -
Exempt Master Note (PNC Bank, National Association Line of Credit), Series 2018, (the
"Master Note") pursuant to that certain Line of Credit Agreement dated as of February 1,
2018 (the "Agreement"), between Monroe County, Florida (the "County") and PNC
Bank, National Association ("PNC"). The Master Note is issued pursuant to the Laws of
the State of Florida, including, particularly, Chapter 125, Florida Statutes, and other
applicable provisions of law (the "Act"), and pursuant to Resolution No. 020-2018
adopted by the Board of County Commissioners. of the County on January 17, 2018 (the
"Resolution") and the Agreement.
No Draw (as defined in the Agreement) may be made against the Master Note
after August 1, 2019. Draws against the Master Note shall bear interest at the Interest
Rate as. defined in the Agreement. Interest on Draws shall be paid on February 1 and
August 1 of each year. The Draws against the Master Note are subject to prepayment
prior to maturity in accordance with the terms of the Agreement. The Master Note is in
the form of one fully registered Master Note. Draws may only be made to finance or
refinance costs of Extraordinary Expenditures (as defined in the Agreement) to the extent
and in the manner provided in the Agreement.
As to questions of fact material to our opinion, we have relied upon the
representations of the County contained in the Resolution and the Agreement and in the
certified proceedings related thereto and to the issuance of the Master Note and other
certifications of public officials furnished to us without undertaking to verify the same by
independent investigation. Furthermore, we have assumed continuing compliance by the
County with the covenants and agreements contained in the Resolution, the Agreement
and the Certificate as to Arbitrage and Certain Other Tax Matters executed in connection
with the issuance of the Master Note (the "Tax Certificate"). We have not undertaken an
Board of County Commissioners
of Monroe_ County, Florida
Page 2
February 1, 2018
independent audit, examination, investigation or inspection of the matters described or
contained in any agreements, documents, certificates, representations and opinions
relating to the Master Note, and have relied solely on the facts, estimates and
circumstances described and set forth therein. In our examination of the foregoing, we
have assumed the genuineness of signatures on all documents and instruments, the
authenticity of documents submitted as originals and the conformity to originals of
documents submitted as copies.
Certain requirements and procedures contained or referred to in the Resolution, the
Agreement, the Tax Certificate and other relevant documents may be changed, and
certain actions may be taken under the circumstances and subject to the terms and
conditions set forth in such documents, upon the advice or with an approving opinion of
nationally recognized bond counsel. No opinion is expressed herein as to any Draw or
the interest thereon or on the Master Note if any such change occurs or action is taken
without our advice or approval or upon the advice or approval of bond counsel other than
ourselves.
Based on the foregoing, under existing law, we are of the opinion that:
1. The County is a duly created and validly existing political subdivision of
the State of Florida.
2. The County has the right and power under the Constitution and Laws of the
State of Florida to adopt the Resolution and execute and deliver the Agreement, the
Resolution has been duly and lawfully adopted by the County, the Agreement has been
duly and lawfully executed and delivered by the County, and assuming that the
Agreement is valid and binding against PNC, each are in full force and effect in
accordance with their respective terms and are valid and binding upon the County and
enforceable in accordance with their respective terms, and no other authorization for the
Resolution or the Agreement is required. The Resolution and the Agreement create the
valid pledge which they purport to create of the Designated Revenues (as defined in the
Agreement), subject to the provisions of the Resolution and the Agreement permitting the
application thereof for the purposes and on the terms and conditions set forth in the
Resolution.
3. The County is duly authorized and entitled to issue the Master Note, and
the Master Note has been duly and validly authorized and issued by the County in
accordance with the Constitution and Laws of the State of Florida, the Resolution and the
Agreement. The Master Note constitutes a valid and binding obligation of the County as
provided in the Resolution and the Agreement, is enforceable in accordance with its
terms and the terms of the Resolution and the Agreement and is entitled to the benefits of
Board of County Commissioners
of Monroe County, Florida
Page 3
February 1, 2018
the Resolution and the Agreement. The Master Note does not constitute a general
indebtedness of the County or the State of Florida or any agency, department or political
subdivision thereof, or a pledge of the faith and credit of such entities, but is payable
from Designated Revenues pledged therefore in the manner and to the extent provided in
the Resolution and the Agreement. No holder of the Master Note shall ever have the
right to compel the exercise of any ad valorem taxing power of the County or the State of
Florida or any political subdivision, agency or department thereof to pay the Master Note.
4. The County has covenanted and agreed to appropriate in its annual budget,
by amendment, if necessary, from Non -Ad Valorem Revenues lawfully available in each
fiscal year of the County, amounts which shall be sufficient to pay debt service on the
Draws made against the Master Note. Such covenant and agreement on the part of the
County to budget and appropriate such amounts of Non -Ad Valorem Revenues shall be
cumulative to the extent not paid, and shall continue until such Non -Ad Valorem
Revenues or other legally available funds in amounts sufficient to make all such required
payments shall have been budgeted, appropriated and actually paid. Notwithstanding the
foregoing covenant of the County, the County does not covenant to maintain any services
or programs, now provided or maintained by the County, which generate Non -Ad
Valorem Revenues.
Such covenant to budget and appropriate does not create any lien upon or pledge
of such Non -Ad Valorem Revenues, nor, except as provided in Section 2.08 of the
Agreement, does it preclude the County from pledging in the future its Non -Ad Valorem
Revenues, nor does it require the County to levy and collect any particular Non -Ad
Valorem Revenues, nor does it give the Noteholder (as defined in the Agreement) a prior
claim on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the
County. Such covenant to appropriate Non -Ad Valorem Revenues is subject in all
respects to the payment of obligations secured by a pledge of such Non -Ad Valorem
Revenues heretofore or hereafter entered into (including the payment of debt service on
bonds and other debt instruments). However, the covenant to budget and appropriate in
its general annual budget for the purposes and in the manner stated herein shall have the
effect of making Non -Ad Valorem Revenues available for the payment of debt service on
the Draws in the manner described herein and in the Resolution and placing on the
County a positive duty to appropriate and budget, by amendment, if necessary, amounts
sufficient to meet its obligations hereunder; subject, however, in all respects to the
restrictions of Section 129.07, Florida Statutes, which provides, in part, that the
governing body of each county make appropriations for each fiscal year which, in any
one year, shall not exceed the amount to be received from taxation or other revenue
sources; and subject, further, to the payment of services and programs which are for
essential public purposes affecting the health, welfare and safety of the inhabitants of the
County or which are legally mandated by applicable law.
Board of County Commissioners
of Monroe County, Florida
Page 4
February 1, 2018
5. Under existing statutes, regulations, rulings and court decisions, the interest
on the Master Note (a) is excluded from gross income for federal income tax purposes
and (b) is not an item of tax preference for purposes of the federal alternative minimum
tax imposed on individuals. The foregoing opinions are subject to the condition that the
County comply with all requirements of the Internal Revenue Code of 1986, as amended,
(the "Code") that must be satisfied subsequent to the issuance of the Master Note in order
that interest thereon be (or continues to be) excluded from gross income for federal
income tax purposes. Failure to comply with certain of such requirements could cause
the interest on the Master Note to be so included in gross income retroactive to the date
of issuance of the Master Note. The County has covenanted to comply with all such
requirements. Ownership of the Master Note may result in collateral federal tax
consequences to certain taxpayers. We express no opinion regarding such federal tax
consequences arising with respect to the Master Note.
We have not been engaged or undertaken to review (1) the accuracy, sufficiency
or completeness of any offering or disclosure material relating to the Master Note and we
express no opinion relating thereto, or (2) the compliance with any federal or state law
with regard to the sale of the Master Note and we express no opinion relating thereto.
The opinions expressed in paragraphs 2 and 3 hereof are qualified to the extent
that the enforceability of the Resolution, the Agreement and the Master Note may be
limited by any applicable bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally, or by the exercise of judicial discretion
in accordance with general principles of equity.
The opinions expressed herein may be relied upon by the County who may
continue to rely on this opinion only to the extent that (1) there is no change in existing
law that may adversely affect the validity of the Master Note or the exclusion of the
interest thereon from gross income for federal tax purposes of the holder thereof, (2) the
representations, agreements and covenants contained in the Resolution, the Agreement,
and the Tax Certificate, as the same may be supplemented and amended from time to
time with our knowledge and consent, remain true and accurate and are complied with,
(3) the County complies with the Resolution, the Agreement, the Tax Certificate and the
Code with respect to all Draws made against the Master Note, (4) there has not been
delivered to the County an opinion of this firm of more recent date with respect to the
matters referred to herein, and (5) this opinion letter has not been expressly withdrawn as
evidenced by a letter to the County. Nothing contained in this opinion letter shall be
construed as any undertaking on our part to monitor any changes in applicable law or to
monitor or confirm the accuracy of any such representations or warranties or compliance
with any such agreements or covenants. In addition, we undertake no duty to expressly
Board of County Commissioners
of Monroe County, Florida
Page 5
February 1, 2018
advise any holder of the Master Note of any change or development of which we become
aware that may adversely affect this opinion letter.
The opinions set forth herein are expressly limited to, and we opine only with
respect to, the laws of the State of Florida and the federal income tax laws of the United
States of America. The only opinions rendered hereby shall be those expressly stated as
such herein, and no opinion shall be implied or inferred as a result of anything contained
herein or omitted herefrom.
This opinion is given as of the date hereof and we assume no obligation to update,
revise or supplement this opinion to reflect any facts or circumstances that may hereafter
come to our attention or any changes in law that may hereafter occur.
We have examined the form of the Master Note and, in our opinion, the form of
the Master Note is regular and proper.
Respectfully submitted,
TALLAHASSEE 1C)
1500 Mahan Drive
Nabors
Suite 200
TAMPA
Tallahassee, Florida 32308
2502 Rocky Point Drive
(850) 224-4070 Tel
Suite 1060
Gibli
(850) 224-4073 Fax
Tampa, Florida 33607
n
(813) 2812222 Tel
FORT DALE
(813) 281-0129 Fax
Nickerson P.A.
coward
110 East Broward Boulevard
Boulevard
Suite 1700
A T T O R N E Y S A T L A W
Fort Lauderdale, Florida 33301
(954) 315-3852 Tel
February 1, 2018
PNC Bank, National Association
Orlando, Florida
Re: Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank,
National Association Line of Credit), Series 2018
Dear Sir or Madam:
We have acted as Note Counsel to Monroe County, Florida (the "County") in
connection with the issuance by the County of the above -captioned Master Note and we
have participated in various proceedings relating thereto. Any capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the herein defined
Approving Opinion.
Of even date herewith, we have also delivered to the County our approving
opinion as Note Counsel with respect to the Master Note (the "Approving
Opinion"). This will confirm that you may rely on such Approving Opinion as if such
Approving Opinion were addressed to you; provided, however, no attorney -client
relationship has existed or exists between our firm and you in connection with the Master
Note and by virtue of this opinion letter or our Approving Opinion. This letter is
delivered to you solely for your benefit as the initial purchaser of the Master Note and
may not be used, circulated, quoted or otherwise referred to or relied upon for any other
purpose or by any other person.
We are also of the opinion that the Master Note is not subject to the registration
requirement of the Securities Act of 1933, as amended, and the Agreement is exempt
from qualification under the Trust Indenture Act of 1939, as amended.
The opinions expressed in our Approving Opinion may continue to.be relied upon
by you only to the extent that (1),there is no change in existing law that may adversely
affect the validity of the Master Note or the exclusion of the interest thereon from gross
income for federal tax purposes of the holder thereof, (2) the representations, agreements
and covenants, contained in the Resolution, the Agreement and the Tax Certificate
executed in connection with the issuance of the Master Note, as the same may be
PNC Bank, National Association February 1, 2018
Page 2
supplemented and amended from time to time with our knowledge and consent, remain
true and accurate and are complied with, (3) the County complies with the Resolution, the
Agreement, the Tax Certificate and the Code with respect to all Draws made against the
Master Note, (4) there has not been delivered to the County an opinion of this firm of
more recent date with respect to the matters referred to in our Approving Opinion, and
(5) our Approving Opinion has not been expressly withdrawn as evidenced by.a letter to
the County. Nothing contained in our Approving Opinion shall be construed as any
undertaking on our part to monitor any changes in applicable law or to monitor or
confirm the accuracy of any such representations or warranties or compliance with any
such agreements or covenants. In addition, we undertake no duty to expressly advise any
holder of the Master Note of any change or development of which we become aware that
may adversely affect our Approving Opinion.
This letter is furnished by us in our capacity as Note Counsel for the County and
not as counsel to any other person.
Sincerely,
County of Monroe
The Florida Keys
Robert B. Shillinger, County Attorney"
Pedro J. Mercado, Assistant County Attorney **
Cynthia L. Hall, Assistant County Attorney **
Christine Limbert-Barrows, Assistant County Attorney **
Derek V. Howard, Assistant County Attorney**
Steven T. Williams, Assistant County Attorney**
Peter H. Morris, Assistant CountyAttorney
Patricia Eables, Assistant County Attorney
Chris Ambrosio, Assistant County Attorney
** Board Certified in City, County & Local Govt. Law
February 1, 2018
Board of County Commissioners
of Monroe County, Florida
Key West, Florida
PNC Bank, National Association
Orlando, Florida
BOARD OF COUNTY COMMISSIONERS
Mayor David Rice, District 4
Mayor Pro Tem Sylvia J. Murphy, District 5
Danny L. Kolhage, District 1
George Neugent, District 2
Heather Carruthers, District 3
Office of the County Attorney
1111 121h Street, Suite 408
Key West, FL 33040
(305) 292-3470 — Phone
(305) 292-3516 — Fax
Re: Monroe County, Florida Tax -Exempt Master Revenue Note (PNC Bank,
National Association Line of Credit), Series 2018
Ladies and Gentlemen:
I am an Assistant County Attorney for Monroe County, Florida, a political
subdivision of the State of Florida (the "Issuer"), and am providing this opinion in
connection with the issuance of its not to exceed $40,000,000 Monroe County, Florida
Tax-Exeinpt Master Revenue Note (PNC Bank, National Association Line of Credit),
Series 2018 (the "Master Note") and the execution and delivery of the Line of Credit
Agreement dated as of February 1, 2018 (the "Agreement"), between PNC Bank, National
Association ("PNC Bank") and the Issuer. The Master Note has been issued to PNC Bank.
Capitalized terms used herein and not otherwise defined shall have the meaning ascribed
thereto in the Agreement or Resolution No. 020-2018 adopted by the Board of County
Commissioners of Monroe County (the "Board") on January 17, 2018 (the "Resolution") or
in the Agreement.
Board of County Commissioners of Monroe County, Florida
PNC Bank, National Association
February 1, 2018
Page 2
Based on the foregoing, I am of the opinion that:
1. The County is a duly created and validly existing political subdivision of the
State of Florida and had and has good right and lawful authority under the Constitution and
laws of the State to adopt the Resolution, enter into the Agreement, and to authorize and
issue the Master Note.
2. The Resolution has been duly adopted by the County and is in full force and
effect and, subject to the extent that the enforceability of the rights and remedies set forth
therein, may be limited by bankruptcy, insolvency or other laws affecting creditors' rights,
constitutes a valid and binding obligation of the County enforceable in accordance with its
terms.
3. The Issuer has duly authorized, executed and delivered the Agreement and
assuming the due authorization, execution and delivery of the Agreement by PNC Bank,
the Agreement constitutes a legal, valid and binding obligation of the Issuer enforceable
against the Issuer in accordance with its terms (except as enforcement thereof may be
limited by bankruptcy, insolvency or similar laws relating to the enforcement of creditors'
rights generally or by such principles of equity as the court having jurisdiction may impose
with respect to certain remedies which require, or may require, enforcement by a court of
equity).
4. The Master Note, issued in the authorized principal amount of not to exceed
$40,000,000, was duly executed and delivered by the Issuer under the authority and
pursuant to the provisions of Chapter 125, Florida Statutes, as amended, and other
applicable provisions of law (collectively, the "Act"), and under the authority and direction
of the Resolution and the Agreement.
5. The adoption of the Resolution, the execution and delivery of the Agreement
and the issuance of the Master Note and compliance with the provisions thereof will not
conflict with or constitute a material breach of or default under any existing law,
administrative regulation, court decree, resolution or agreement to which the County is
subject and the County has the power and authority to apply Draw proceeds to finance and
refinance Extraordinary Expenditures as contemplated by the Agreement, to budget and
appropriate Non -Ad Valorem Revenues to pay debt service on the Master Note to the
extent and in the manner provided in the Agreement, to pledge the Designated Revenues so
pledged under the Agreement and to pay the Master Note and interest thereon in
accordance with the terms thereof.
6. To the best of my knowledge after due inquiry, all approvals, consents,
authorizations and orders of any governmental authority or agency having jurisdiction in
Board of County Commissioners of Monroe County, Florida
PNC Bank, National Association
February 1, 2018
Page 3
any matter which would constitute a condition precedent to the performance by the County
of its obligations under the Resolution, the Agreement and the Master Note have been
obtained and are in full force and effect.
7. The County is lawfully empowered to pledge the Designated Revenues to the
extent provided in the Agreement.
8. As of the date hereof, there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, government agency, public board
or body, pending or, to the best of my knowledge, threatened against the County, affecting
or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Master Note or
the execution of the Agreement or the adoption of the Resolution or the collection of Non -
Ad Valorem Revenues to pay the principal of, premium, if any, and interest on the Master
Note, or contesting or affecting as to the County the validity or enforceability of the Act in
any respect relating to authorization for the issuance of the Master Note, the Resolution,
the Agreement or contesting the tax-exempt status of interest on the Master Note, or
contesting the powers of the County or any authority for the issuance of the Master Note,
or the execution of the Agreement, or the issuance of the Master Note or the adoption of
the Resolution or, except as has been disclosed in writing to PNC Bank, which could
materially adversely impact the financial condition of the County.
All of the above opinions as to enforceability of the legal obligations of the County
are subject to and limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws, in each case relating to or affecting the enforcement of creditors' rights
generally, and other general principles of equity.
Very truly yours,
OIWL�-� �."
Cynthia L. Hall
Assistant County Attorney
2222 Ponce de Leon 786-671-7481
f
Blvd. www.pfin.com
0
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3rd Floor
Coral Gables, FL
33134
CLOSING MEMORANDUM
TO: Working Group
FROM: Sergio Masvidal, PFM Financial Advisors LLC
Pete Varona, PFM Financial Advisors LLC
DATE: February 1, 2018
RE: Monroe County, Florida (the "County")
Tax -Exempt Master Revenue Note (PNC Bank, National Association), Series 2018
(the "Series 2018 Note")
Closing Wiring Instructions
I. SCHEDULE
Pre -Closing
Date: Monday, January 29, 2018
Time: 11:00 am
Location: County Administrator's conference room, Gato Building
1100 Simonton St. 2nd floor, Key West FL 33040
Closin
Date: Thursday, February 1, 2018
Time: Approximately 10:00 am. An e-mail will be sent to the working group
upon confirmation of wire receipt.
0 pf m
II. WIRE & TRANSFERS
Closing Memorandum
Monroe County
Series 2018 Note
Page 2
Please note the wire transfers do not constitute an allocation for purposes of the requirements of
the bond documents or for purposes of applicable federal tax requirements.
A. From PNC to the County
PNC Bank, National Association ("PNC') will wire $10,000,000.00 to the County, which
constitutes the initial draw on the Series 2018 Note. This amount will be used to pay for
cleanup and removal of debris from local hurricane damage, costs related to the
emergency base camp and costs of issuance. The wire instructions for the initial draw
are as follows:
Wiring Instructions
Iberia Bank
Routing Number: 265270413
Account Number: 20001154052
Costs of issuance are as found below:
BondCounsel...................................................................................................................... $47,500
BankCounsel...................................................................................................................... $12,500
FinancialAdvisor................................................................................................................. $5,000
If you have any questions or require any additional information, please do not hesitate to
contact Pete Varona at (786) 671-7481.
ACKNOWLEDGED AND AGREED BY
MONROE COUNTY:
By: X-C----
Kevin Madok
Clerk of the Circuit Court of Monroe County, Florida and
Ex-Officio Clerk to the Board of County Commissioners
�J
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SOURCES AND USES OF FUNDS
Monroe County, Florida
Line of Credit Initial Draw ($10 million)
Final Numbers
Line of Credit Provider: PNC National Assocation
Dated Date 02/01/2018
Delivery Date 02/01/2018
Sources:
Bond Proceeds:
Par Amount 10,000,000.00
10,000,000.00
Uses:
Project Fund Deposits:
Project Fund 9,935,000.00
Delivery Date Expenses:
Cost of Issuance 65,000.00
10, 000, 000.00
Jan 25, 2018 11:08 am Prepared by PFM Financial Advisors, LLC Page 1
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BOND SUMMARY STATISTICS
Monroe County, Florida
Line of Credit Initial Draw ($10 million)
Final Numbers
Line of Credit Provider: PNC National Assocation
Dated Date
02/01/2018
Delivery Date
02/01/2018
First Coupon
10/01/2018
Last Maturity
10/01/2042
Arbitrage Yield
4.009177%
True Interest Cost (TIC)
4.009177%
Net Interest Cost (NIC)
4.010000%
All -In TIC
4.071242%
Average Coupon
4.010000%
Average Life (years)
14.784
Weighted Average Maturity (years)
14.784
Duration of Issue (years)
10.734
Par Amount
10,000,000.00
Bond Proceeds
10,000,000.00
Total Interest
5,928,250.33
Net Interest
5,928,250.33
Total Debt Service
15,928,250.33
Maximum Annual Debt Service
648,281.50
Average Annual Debt Service
645,739.88
Underwriter's Fees (per $1000)
Average Takedown
Other Fee
Total Underwriter's Discount
Bid Price
100.000000
Par Average Average PV of 1 by
Bond Component Value Price Coupon Life change
Bond Component 10,000,000.00 100.000 4.010% 14.784 10,500.95
10,000,000.00 14.784 10,500.95
Par Value
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount
- Cost of Issuance Expense
- Other Amounts
Target Value
Target Date
Yield
TIC
10, 000, 000.00
10, 000, 000.00
02/01/2018
4.009177%
All -In Arbitrage
TIC Yield
10,000,000.00
-65,000.00
9,935,000.00
02/01/2018
4.071242%
10,000,000.00
10,000,000.00
02/01/2018
4.009177%
Jan 25, 2018 11:08 am Prepared by PFM Financial Advisors, LLC Page 2
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BOND DEBT SERVICE
Monroe County, Florida
Line of Credit Initial Draw ($10 million)
Final Numbers
Line of Credit Provider: PNC National Assocation
Period
Ending
Principal
Coupon
Interest
Debt Service
10/01/2018
165,000
4.010%
267,333.33
432,333.33
10/01/2019
250,000
4.010%
394,383.50
644,383.50
10/01/2020
260,000
4.010%
384,358.50
644,358.50
10/01/2021
270,000
4.010%
373,932.50
643,932.50
10/01 /2022
285,000
4.010%
363,105.50
648,105.50
10/01/2023
295,000
4.010%
351,677.00
646,677.00
10/01/2024
305,000
4.010%
339,847.50
644,847.50
10/01/2025
320,000
4.010%
327,617.00
647,617.00
10/01/2026
330,000
4.010%
314,785.00
644,785.00
10/01/2027
345,000
4.010%
301,552.00
646,552.00
10/01/2028
360,000
4.010%
287,717.50
647,717.50
10/01/2029
375,000
4.010%
273,281.50
648,281.50
10/01/2030
385,000
4.010%
258,244.00
643,244.00
10/01/2031
405,000
4.010%
242,805.50
647,805.50
10/01/2032
420,000
4.010%
226,565.00
646,565.00
10/01/2033
435,000
4.010%
209,723.00
644,723.00
. 10/01/2034
455,000
4.010%
192,279.50
647,279.50
10/01/2035
470,000
4.010%
174,034.00
644,034.00
10/01 /2036
490,000
4.010%
155,187.00
645,187.00
10/01/2037
510,000
4.010%
135,538.00
645,538.00
10/01/2038
530,000
4.010%
115,087.00
645,087.00
10/01/2039
550,000
4.010%
93,834.00
643,834.00
10/01/2040
575,000
4.010%
71,779.00
646,779.00
10/01/2041
595,000
4.010%
48,721.50
643,721.50
10/01/2042
620,000
4.010%
24,862.00
644,862.00
10,000,000
5,928,250.33
15,928,250.33
Jan 25, 2018 11:08 am Prepared by PFM Financial Advisors, LLC Page 3
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COST OF ISSUANCE
Monroe County, Florida
Line of Credit Initial Draw ($10 million)
Final Numbers
Line of Credit Provider: PNC National Assocation
Cost of Issuance $/1000 Amount
Bond Counsel 4.75 47,500.00
Financial Advisor 0.50 5,000.00
Bank Counsel 1.25 12,500.00
6.50 65,000.00
Jan 25, 2018 11:08 am Prepared by PFM Financial Advisors, LLC Page 4
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FORM 8038 STATISTICS
Monroe County, Florida
Line of Credit Initial Draw ($10 million)
Final Numbers
Line of Credit Provider: PNC National Assocation
Dated Date 02/01/2018
Delivery Date 02/01/2018
Redemption
Bond Component Date Principal Coupon Price Issue Price at Maturity
Bond Component:
10/01/2018
165,000.00
4.010%
100.000
165,000.00
165,000.00
10/01/2019
250,000.00
4.010%
100.000
250,000.00
250,000.00
10/01/2020
260,000.00
4.010%
100.000
260,000.00
260,000.00
10/01/2021
270,000.00
4.010%
100.000
270,000.00
270,000.00
10/01/2022
285,000.00
4.010%
100.000
285,000.00
285,000.00
10/01/2023
295,000.00
4.010%
100.000
295,000.00
295,000.00
10/01/2024
305,000.00
4.010%
100.000
305,000.00
305,000.00
10/01/2025
320,000.00
4.010%
100.000
320,000.00
320,000.00
10/01/2026
330,000.00
4.010%
100.000
330,000.00
330,000.00
10/01/2027
345,000.00
4.010%
100.000
345,000.00
345,000.00
10/01/2028
360,000.00
4.010%
100.000
360,000.00
360,000.00
10/01/2029
375,000.00
4.010%
100.000
375,000.00
375,000.00
10/01/2030
385,000.00
4.010%
100.000
385,000.00
385,000.00
10/01/2031
405,000.00
4.010%
100.000
405,000.00
405,000.00
10/01/2032
420,000.00
4.010%
100.000
420,000.00
420,000.00
10/01/2033
435,000.00
4.010%
100.000
435,000.00
435,000.00
10/01/2034
455,000.00
4.010%
100.000
455,000.00
455,000.00
10/01/2035
470,000.00
4.010%
100.000
470,000.00
470,000.00
10/01/2036
490,000.00
4.010%
100.000
490,000.00
490,000.00
10/01/2037
510,000.00
4.010%
100.000
510,000.00
510,000.00
10/01/2038
530,000.00
4.010%
100.000
530,000.00
530,000.00
10/01/2039
550,000.00
4.010%
100.000
550,000.00
550,000.00
10/01/2040
575,000.00
4.010%
100.000
575,000.00
575,000.00
10/01/2041
595,000.00
4.010%
100.000
595,000.00
595,000.00
10/01/2042
620,000.00
4.010%
100.000
620,000.00
620,000.00
10, 000, 000.00
10, 000, 000.00
10, 000, 000.00
Stated Weighted
Maturity Interest Issue Redemption Average
Date Rate Price at Maturity Maturity Yield
Final Maturity 10/01/2042 4.010% 620,000.00 620,000.00
Entire Issue 10,000,000.00 10,000,000.00 14.7837 4.0092%
Proceeds used for accrued interest
0.00
Proceeds used for bond issuance costs (including underwriters' discount)
65,000.00
Proceeds used for credit enhancement
0.00
Proceeds allocated to reasonably required reserve or replacement fund
0.00
Jan 25, 2018 11:08 am Prepared by PFM Financial Advisors, LLC Page 5