HomeMy WebLinkAbout2005-25951 ResoRESOLUTION NO. 2005-25951
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT
TO EXCEED $60,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY
OF MIAMI BEACH, FLORIDA TAXABLE SPECIAL OBLIGATION
REFUNDING BONDS (PENSION FUNDING PROJECT), SERIES 2005, FOR
THE PRINCIPAL PURPOSES OF, TOGETHER WITH OTHER AVAILABLE
MONEYS: (i) REFUNDING CERTAIN OUTSTANDING CITY OF MIAMI
BEACH, FLORIDA TAXABLE SPECIAL OBLIGATION BONDS (PENSION
FUNDING PROJECT), SERIES 1994, AND (ii) MAKING ANY REQUIRED
TERMINATION PAYMENT WITH RESPECT TO A HEDGE AGREEMENT;
PROVIDING FOR THE RIGHTS AND SECURITY OF ALL HOLDERS OF
BONDS ISSUED PURSUANT TO THIS RESOLUTION; PROVIDING
CERTAIN DETAILS OF THE BONDS; DELEGATING OTHER DETAILS
AND MATTERS IN CONNECTION WITH THE ISSUANCE OF THE BONDS,
THE REFUNDING OF THE PRIOR BONDS TO BE REFUNDED AND THE
HEDGE AGREEMENT TO THE MAYOR, WITHIN THE LIMITATIONS
AND RESTRICTIONS STATED HEREIN; APPOINTING A BOND
REGISTRAR; AUTHORIZING A BOOK-ENTRY REGISTRATION SYSTEM
FOR THE BONDS; AUTHORIZING THE NEGOTIATED SALE AND
AWARD BY THE MAYOR OF THE BONDS TO THE UNDERWRITERS,
WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN;
APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND
DELIVERY OF A BOND PURCHASE AGREEMENT; APPROVING THE
FORM OF AND DISTRIBUTION OF A PRELIMINARY OFFICIAL
STATEMENT AND OFFICIAL STATEMENT AND AUTHORIZING THE
EXECUTION AND DELIVERY OF THE OFFICIAL STATEMENT;
COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN
CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES
AND EXCHANGE COMMISSION RULE 15c2-12 AND AUTHORIZING THE
EXECUTION AND DELIVERY OF A COMMITMENT WITH RESPECT
THERETO; AUTHORIZING THE REFUNDING, DEFEASANCE AND
REDEMPTION OF THE BONDS TO BE REFUNDED; APPROVING THE
FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN
ESCROW DEPOSIT AGREEMENT AND APPOINTING AN ESCROW
AGENT; APPROVING THE FORM OF AND, IF NECESSARY,
AUTHORIZING THE EXECUTION AND DELIVERY OF AN AUCTION
AGENT AGREEMENT AND THE APPOINTMENT OF AN AUCTION
AGENT; CREATING CERTAIN FUNDS AND ACCOUNTS AND
PROVIDING FOR THE APPLICATION OF THE PROCEEDS OF THE
BONDS; PROVIDING FOR A BOND INSURANCE POLICY FOR THE
BONDS; PROVIDING FOR THE DEPOSIT OF A RESERVE ACCOUNT
INSURANCE POLICY TO THE CREDIT OF THE DEBT SERVICE RESERVE
ACCOUNT AND APPROVING THE FORM OF AND AUTHORIZING THE
EXECUTION AND DELIVERY OF A GUARANTY AGREEMENT WITH
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THE PROVIDER THEREOF; PROVIDING COVENANTS FOR THE
PROVIDER OF SUCH CREDIT FACILITY AND RESERVE ACCOUNT
INSURANCE POLICY; PROVIDING FOR A SURETY BOND FOR THE
HEDGE AGREEMENT IF NOT TERMINATED OR ASSIGNED;
AUTHORIZING OFFICERS AND EMPLOYEES OF THE CITY TO TAKE
ALL NECESSARY RELATED ACTIONS; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, pursuant to Resolution No. 94-21170, adopted by the Mayor and City
Commission (collectively, the "Commission") of the City of Miami Beach, Florida (the "City")
on May 18, 1994, Resolution No. 94-21390, adopted by the Commission on November 2, 1994,
and Resolution No. 95-21487, adopted by the Commission on February 1, 1995 (collectively, the
"Prior Resolution"), the City issued on March 1, 1995 its $57,710,000 principal amount of City
of Miami Beach, Florida Taxable Special Obligation Bonds (Pension Funding Project), Series
1994 (the "Prior Bonds"), $43,525,000 principal amount of which are currently Outstanding (as
defined in the Prior Resolution), for purpose of discharging certain of the City's unfunded
actuarial liabilities with respect to three pension plans maintained by the City, all as more
particularly described in the Prior Resolution; and
WHEREAS, pursuant to Resolution No. 96-21909, adopted by the Commission on March
6, 1996 (the "Swap Resolution"), and an ISDA Master Agreement dated as of March 1, 1995, a
Schedule to the Master Agreement dated as of March 1, 1995 and a Confirmation dated March
26, 1996 (collectively, the "Swap Agreement"), each between the City and Morgan Stanley
Capital Services Inc. (the "Swap Provider"), the City sold on March 26, 1996 to the Swap
Provider an option, exercisable on August 1, 2005 (the "Option"), to enter into a swap
transaction with the City on September 1, 2005 (the "Related Swap Transaction"), for which the
Swap Provider paid a premium of $1,400,000 to the City (the "Swap Premium"), all as more
particularly described in the Swap Resolution and the Swap Agreement; and
WHEREAS, under the provisions of the Swap Agreement, if the Swap Provider exercises
the Option, the City is entitled to a payment from the Swap Provider of $1,567,615 on September
1, 2005 (the "Swap Exercise Payment"), and the Related Swap Transaction shall terminate on
September 1, 2005 (the "Mandatory Early Termination Date"), unless the City takes certain
actions to keep the Related Swap Transaction in effect; and
WHEREAS, based on current market conditions, the City expects that the Swap Provider
will exercise the Option and that the City will either (i) permit the Related Swap Transaction to
terminate on the Mandatory Early Termination Date, or (ii) pursuant to a bidding process, assign
the City's rights and obligations under the Related Swap Transaction to another party (the "Swap
Assignee"), and in either case the City will be required to make a payment with respect to the
Related Swap Transaction (the "Termination Payment"); and
WHEREAS, the City has determined that, whether or not the Swap Provider exercises the
Option, it is beneficial to provide for the issuance of bonds (the "Bonds") for the principal
purposes of, together with other available moneys, (1) refunding the Prior Bonds maturing on
September 1, 2015 and September 1, 2021 (the "Prior Bonds to be Refunded"), and (2), if the
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Option is exercised by the Swap Provider and the Related Swap Transaction terminates on the
Mandatory Early Termination Date or is assigned to the Swap Assignee, making any required
Termination Payment, all as more particularly set forth in this Resolution; and
WHEREAS, the City Commission has determined that it is in the best interest of the City
to delegate to the Mayor, who shall rely upon the recommendations of the Chief Financial
Officer (as such term is defined in this Resolution) and RBC Dain Rauscher Inc., the City's
financial advisor (the "Financial Advisor"), various matters in connection with the Related Swap
Transaction as set forth in this Resolution, the final terms of the Bonds, the final award of the
Bonds to the Underwriters (as such term is defined in this Resolution), and other matters in
connection with the issuance of the Bonds and the refunding of the Prior Bonds to be Refunded
not set forth in this Resolution; and
WHEREAS, for the reasons more fully set forth in this Resolution, the Commission finds
and determines it to be in the best interests of the City to authorize the sale of the Bonds on the
basis of a negotiated sale rather than a public sale by competitive bid;
NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA AS FOLLOWS:
ARTICLE I
DEFINITIONS, AUTHORITY AND FINDINGS;
RESOLUTION CONSTITUTES A CONTRACT
SECTION 101. DEFINITIONS. In addition to the terms defined elsewhere in this
Resolution, including the recitals and Exhibit B hereto, and except as otherwise defined in
Exhibit B if the Bonds are issued as Variable Rate Bonds, the following terms shall have the
following meanings in this Resolution:
"Account" shall mean an account created and established under this Resolution other than
any accounts in the Liquidity Facility Proceeds Fund or the Remarketing Proceeds Fund.
"Act" shall mean the Constitution of the State, Chapter 166, Florida Statutes, as
amended, Chapter 159, Part VII, Florida Statutes, as amended, and the City of Miami Beach
Charter.
"Ambac Assurance" shall mean Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance company.
"Amortization Requirements" shall mean such moneys required to be deposited in the
Bond Redemption Account for the purpose of the mandatory redemption or payment at maturity
of any Term Bonds, the specific amounts and times of such deposits to be set forth in the
Mayor's Certificate.
"Annual Debt Service Requirement" for any Fiscal Year, as applied to the Bonds, shall
mean the respective amounts which are needed to provide:
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(a) for paying the interest on all Bonds then Outstanding which is payable on
each Interest Payment Date in such Fiscal Year;
(b) for paying the principal of all Serial Bonds then Outstanding which is
payable upon the maturity of such Serial Bonds in such Fiscal Year; and
(c) the Amortization Requirements, if any, for the Term Bonds of such Series
for such Fiscal Year.
For purposes of computing (a), (b) and (c) above, any principal, interest or Amortization
Requirements due on October 1 in a Fiscal Year shall be deemed due in the preceding Fiscal
Year.
The following rules shall apply in determining the amount of the Annual Debt Service
Requirement for any Fiscal Year:
(a) With respect to Variable Rate Bonds, the interest rate shall be assumed to
be the average rate of interest for all Variable Rate Bonds for the prior Fiscal Year or
portion thereof while said Bonds were Outstanding or if there were no Variable Rate
Bonds Outstanding during such prior Fiscal Year, then the lesser of (i) the initial rate of
interest on such Variable Rate Bonds and (ii) the average rate of interest for the prior
Fiscal Year under a published variable interest rate index selected by the Financial
Advisor which is generally consistent with the rate of interest such Bonds shall bear;
"average rate" with respect to Outstanding Variable Rate Bonds shall mean the rate
determined by dividing the total annualized amount of interest paid on Variable Rate
Bonds in such Fiscal Year or portion thereof by the average principal amount of Variable
Rate Bonds Outstanding during such Fiscal Year or portion thereof;
(b) With respect to Put Bonds, (i) the "put" date or dates and the terms of the
reimbursement obligation to any Liquidity Facility Provider securing payment of the
Bonds shall be ignored and the stated dates for Amortization Requirements and principal
and interest payments shall be used; provided, however, that during any period of time
after the Liquidity Facility Provider has advanced funds thereunder, the reimbursement
obligation of which is payable from and secured on a parity with the Bonds and before
such amount is repaid, Annual Debt Service Requirements shall include the principal
amount so advanced and interest thereon, in accordance with the principal repayment
schedule and interest rate or rates specified in the Liquidity Facility;
(c) To the extent that the City has entered into a Hedge Agreement with
respect to any Bonds, while the Hedge Agreement is in effect and the Counterparty has
not defaulted thereunder, the interest rate with respect to the principal amount of such
Bonds equal to the "notional" amount specified in the Hedge Agreement shall be
assumed to be (i) if the City's payment obligations under the Hedge Agreement are
computed based upon a fixed rate of interest, the actual rate of interest upon which the
City's payment obligations are computed under such Hedge Agreement and (ii) if the
City's payment obligations under the Hedge Agreement are computed based upon a
variable rate of interest, the average rate of interest for the City's payment obligations
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under the Hedge Agreement for the prior Fiscal Year or portion thereof which the Hedge
Agreement was in effect or if the Hedge Agreement was not in effect during such prior
Fiscal Year, then the lesser of (x) the initial rate of interest for the City's payment
obligations under the Hedge Agreement and (y) the average rate of interest for the prior
Fiscal Year under a published variable interest rate index agreed upon by the City and the
Counterparty which is generally consistent with the formula which shall be used to
determine the City's payment obligations; "average rate" with respect to the City's
payment obligations for the prior Fiscal Year shall mean the rate determined by dividing
the total annualized amount paid by the City under the Hedge Agreement in such Fiscal
Year or portion thereof by the "notional" amount specified in the Hedge Agreement for
such Fiscal Year; and
(d) If all or a portion of the principal of or interest on Bonds is payable from
funds irrevocably set aside or deposited for such purpose, together with projected
earnings thereon to the extent such earnings are projected to be from Permitted
Investments, such principal or interest shall not be included in determining Annual Debt
Service Requirements if such funds and/or Permitted Investments will provide moneys
which shall be sufficient to pay when due such principal and interest.
"Bond Insurance Policy" shall mean the financial guaranty insurance policy issued by
Ambac Assurance insuring the payment when due of the principal of and interest on the Bonds
as provided therein.
"Bond Insurer" shall mean Ambac Insurance or, if permitted by the terms of Exhibit B
hereto, the provider of any Substitute Bond Insurance Policy.
"Bond Purchase Agreement" shall mean the Bond Purchase Agreement to be entered into
between the City and the Underwriters providing for the sale of the Bonds to the Underwriters.
"Bond Registrar" shall mean Wachovia Bank, National Association.
"Bonds" shall mean the City's Taxable Special Obligation Refunding Bonds (Pension
Funding Project), Series 2005, authorized to be issued pursuant to this Resolution.
"Bondholder", "Holder", "Holder of Bonds" or "Owner" or any similar term, shall mean
any person who shall be the registered owner of any Outstanding Bond or Bonds.
"Chief Financial Officer" shall mean the Chief Financial Officer of the City or his or her
designee or the officer succeeding to his or her principal functions.
"City" shall mean the City of Miami Beach, Florida.
"City Attorney" shall mean the City Attorney of the City or his or her designee or the
officer succeeding to his or her principal functions.
"City Clerk" shall mean the Clerk of the City or his or her designee or the officer
succeeding to his or her principal functions.
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"City Manager" shall mean the City Manager of the City or his or her designee or the
officer succeeding to his or her principal functions.
"Commission" shall mean the Mayor and City Commission of the City.
"Continuing Disclosure Commitment" shall mean the Continuing Disclosure
Commitment to be delivered by the City in connection with the City's continuing disclosure
obligations with respect to the Bonds under the Rule.
"Counterparty" shall mean a financial institution, investment bank or insurance company,
or any subsidiary of any of the foregoing, which enters into a Hedge Agreement with the City.
"Defeasance Obligations" shall mean to the extent permitted by law:
(i) Direct general obligations of, or obligations the payment of the principal
of which and the interest on which is unconditionally guaranteed by, the United States of
America; and
(ii) Evidences of indebtedness issued by the Bank for Cooperatives, Federal
Home Loan Banks, Federal Home Loan Mortgage Corporation (including participation
certificates), Federal Land Banks, Federal Financing Banks, or any other agency or
instrumentality of the United States of America created by an act of Congress which is
substantially similar to the foregoing in its legal relationship to the United States of
America; provided that the obligations of such agency or instrumentality are
unconditionally guaranteed by the United States of America or any other agency or
instrumentality of the United States of America; and
(iii) Evidences of ownership of proportionate interests in future interest and
principal payments on specified obligations described in (i) above held by a bank or trust
company as custodian, under which the owner of the investment is the real party in
interest and has the right to proceed directly and individually against the obligor on the
underlying obligations described in (i) above, and which underlying obligations are not
available to satisfy any claim of the custodian or any person claiming through the
custodian or to whom the custodian may be obligated; and
(iv) Municipal obligations which do not permit redemption prior to maturity at
the option of the obligor and provision for the payment of the principal of, premium, if
any, and interest on which shall have been made by the irrevocable deposit with a bank or
trust company acting as a trustee or escrow agent for holders of such obligations of
securities described in clauses (i) or (ii) above, the maturing principal of and interest on
which, when due and payable, will provide sufficient moneys to pay when due the
principal of, premium if any, and interest on such obligations, and which securities
described in clauses (i) or (ii) above are not available to satisfy any other claim, including
any claim of the trustee or escrow agent or of any person claiming through the trustee or
escrow agent or to whom the trustee or escrow agent may be obligated, including in the
event of the insolvency of the trustee or escrow agent or proceedings arising out of such
insolvency.
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"DTC" shall mean The Depository Trust Company, New York, New York.
"Escrow Agent" shall mean Wachovia Bank, National Association.
"Escrow Deposit Agreement" shall mean the Escrow Deposit Agreement to be entered
into between the City and the Escrow Agent in connection with the refunding of the Prior Bonds
to be Refunded.
"Fiduciaries" shall mean the Bond Registrar and any other fiduciaries appointed by the
City in connection with the Bonds pursuant to this Resolution.
"Financial Advisor" shall mean RBC Dain Rauscher Inc.
"Fiscal Year" shall mean that period commencing on October 1 and continuing to and
including the next succeeding September 30, or such other annual period as may be prescribed
by law or by the City in accordance with law.
"Fixed Rate Bonds" shall mean Bonds, which may be either Serial or Term Bonds, issued
on the date of original issuance of the Bonds with a rate of interest which is fixed in percentage
for the entire term thereof.
"Fund" shall mean a fund created and established under this Resolution other than (i) the
Escrow Deposit Trust Fund, (ii) the Liquidity Facility Proceeds Fund and (iii) the Remarketing
Proceeds Fund.
"Guaranty Agreement" shall mean the Guaranty Agreement to be executed by the City
and Ambac Assurance in connection with the delivery of the Reserve Account Surety Bond by
Ambac Assurance.
"Hedge Agreement" shall mean and include an interest rate exchange agreement, interest
swap agreement, interest cap agreement or other financial product which is used by the City as a
hedging device with respect to its obligation to pay interest on any of the Bonds, entered into
between the City and a Counterparty.
"Interest Payment Date" shall mean such dates of each Fiscal Year on which interest on
the Bonds is payable on any Bonds that are Outstanding, as set forth in the Mayor's Certificate.
"Mandatory Early Termination Date" shall have the meaning assigned to such term in the
recitals to this Resolution.
"Maximum Annual Debt Service" shall mean, at any time and with respect to all of the
Bonds, the greatest Annual Debt Service Requirement in the then current or any succeeding
Fiscal Year.
"Mayor" shall mean the Mayor of the City or in the absence or disability of the Mayor of
the City, the Vice Mayor of the City, or the officers succeeding to their principal functions.
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"Mayor's Certificate" shall mean the certificate of the Mayor dated on or prior to the date
of the original issuance of the Bonds fixing certain terms and details of the Bonds and other
matters.
"Non-Ad Valorem Funds" shall mean all revenues of the City derived from any source
other than ad valorem taxation on real or personal property, which are legally available to make
the payments required herein.
"Official Statement" shall mean the final Official Statement with respect to the Bonds.
"Option" shall have the meaning assigned to such term in the recitals to this Resolution.
"Outstanding" when used with reference to the Bonds, shall mean, as of any date of
determination, all Bonds theretofore authenticated and delivered except:
(i) Bonds theretofore canceled by the Bond Registrar or delivered to the Bond
Registrar for cancellation;
(ii)
herein;
Bonds which are deemed paid and no longer Outstanding as provided
(iii) Bonds in lieu of which other Bonds have been issued pursuant to the
provisions hereof relating to Bonds destroyed, stolen or lost, unless evidence satisfactory
to the Bond Registrar has been received that any such Bond is held by a bona fide
purchaser; and
(iv) For purposes of any consent or other action to be taken hereunder by the
Holders of a specified percentage of principal amount of Bonds, Bonds held by or for the
account of the City.
"Permitted Investments" shall mean and include such obligations as shall be permitted to
be legal investments of the City by the laws of the State.
"Pledged Funds" shall mean, collectively, all moneys, securities and instruments held in
the Funds and Accounts created and established by this Resolution.
"Preliminary Official Statement" shall mean the Preliminary Official Statement with
respect to the Bonds.
"Prior Bonds" shall have the meaning assigned to such term in the recitals to this
Resolution.
"Prior Bonds to be Refunded" shall have the meaning assigned to such term in the
recitals to this Resolution.
"Prior Resolution" shall have the meaning assigned to such term in the recitals to this
Resolution.
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"Put Bonds" shall mean Bonds which by their terms may be tendered by and at the option
of the owner thereof for payment prior to the stated maturity thereof.
"Regular Record Date" shall have the meaning assigned to such term in Section 202 of
this Resolution.
"Related Swap Transaction" shall have the meaning assigned to such term in the recitals
to this Resolution.
"Reserve Account Insurance Policy" shall mean the insurance policy, surety bond or
other acceptable evidence of insurance, if any, deposited in the Debt Service Reserve Account in
lieu of or in partial substitution for cash or securities on deposit therein. The issuer providing
such insurance shall be a municipal bond insurer rated, at the rime of deposit in the Debt Service
Reserve Account, in any of the two highest rating categories of Moody's and S&P.
"Reserve Account Letter of Credit" shall mean the irrevocable, transferable letter of
credit, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitution
for cash or securities on deposit therein. The issuer providing such letter of credit shall be a
banking association, bank or trust company or branch thereof rated, at the time of deposit into the
Debt Service Reserve Account, in any of the two highest rating categories of Moody's and S&P.
"Reserve Account Requirement" shall mean the Maximum Annual Debt Service.
"Reserve Account Surety Bond" shall mean the surety bond issued by Ambac Assurance
in satisfaction of the Reserve Account Requirement.
"Resolution" shall mean this Resolution as the same may from time to time be further
amended and supplemented in accordance with the terms hereof.
"Rule" means Rule 15c2-12 promulgated by the United States Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.
"Serial Bonds" shall mean the Bonds which shall be stated to mature in annual or semi°
annual installments but not including Term Bonds.
"State" shall mean the State of Florida.
"Swap Agreement" shall have the meaning assigned to such term in the recitals to this
Resolution.
"Swap Assignee" shall have the meaning assigned to such term in the recitals to this
Resolution.
"Swap Exercise Payment" shall have the meaning assigned to such term in the recitals to
this Resolution.
"Swap Premium" shall have the meaning assigned to such term in the recitals to this
Resolution.
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"Swap Provider" shall have the meaning assigned to such term in the recitals to this
Resolution.
"Swap Resolution" shall have the meaning assigned to such term in the recitals to this
Resolution.
"Swap Surety Bond" shall mean the surety bond issued by Ambac Assurance insuring
certain payment obligations of the City under the Swap Agreement.
"Term Bonds" shall mean the Bonds which shall be stated to mature on one date and for
the amortization of which Amortization Requirements are required to be deposited into the Bond
Redemption Account in the Sinking Fund.
"Termination Payment" shall have the meaning assigned to such term in the recitals to
this Resolution.
"Underwriters" shall mean UBS Financial Services Inc., J.P. Morgan Securities Inc.,
SunTrust Capital Markets, Inc. and Estrada Hinojosa & Company, Inc.
"Variable Rate Bonds" shall mean Bonds, which may be either Serial Bonds or Term
Bonds, issued on the date of original issuance of the Bonds with a variable, adjustable,
convertible or other similar rate which is not fixed in percentage for the entire term thereof.
Words importing singular number shall include the plural number in each case and vice
versa. Words defined in Section 101 hereof that appear in this Resolution in lower case form
shall have the meanings ascribed to them in the definitions in Section 101 unless the context
shall otherwise indicate. The word "person" shall include corporations and associations,
including public bodies, as well as natural persons, unless the context shall otherwise indicate.
The word "Bond" or "Bonds" shall mean any Bond or Bonds or all of the Bonds, as the case may
be, issued under the provisions of this Resolution.
SECTION 102. AUTHORITY FOR THIS RESOLUTION. This Resolution is
adopted pursuant to the provisions of the Act.
SECTION 103. FINDINGS. It is hereby ascertained, determined and declared:
(a) The recitals to this Resolution are incorporated herein as findings.
(b) The issuance of the Bonds and the refunding of the Prior Bonds to be
Refunded and the payment of any required Termination Payment with the proceeds
thereof and any other available moneys will serve a valid public and municipal purpose in
accordance with the Act.
(c) The principal of and interest on the Bonds and all required sinking fund,
reserve and other payments shall be payable solely from the Pledged Funds and, solely to
the extent provided in Section 304(A) hereof, the Non Ad-Valorem Funds. None of the
City, the State of Florida or any political subdivision thereof shall ever be required to
levy ad valorem taxes to pay the principal of or interest on the Bonds or to make any of
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the sinking fund, reserve or other payments required by this Resolution or the Bonds, and
the Bonds shall not constitute a lien upon any property owned by or situated within the
corporate territory of the City, except as provided herein with respect to the Pledged
Funds. Notwithstanding the foregoing or anything else contained in the Resolution, the
Purchase Price of tendered Bonds shall not be payable from or secured by a lien on or
pledge of the Pledged Funds or Non-Ad Valorem Funds, but shall be payable solely from
remarketing proceeds and amounts paid under a Liquidity Facility in the manner and to
the extent provided in Exhibit B hereto and such Liquidity Facility.
(d) Due to the character of the Bonds, the provisions of the Swap Agreement,
the complexity of structuring the financing, prevailing market conditions and the
recommendation of the Financial Advisor that the sale of the Bonds be by negotiation,
the sale of the Bonds on the basis of negotiated sale rather than a public sale by
competitive bid is in the best interest of the City and is hereby authorized.
SECTION 104. RESOLUTION CONSTITUTES CONTRACT. In consideration of
the acceptance of the Bonds authorized to be issued hereunder by those who shall own the same
from time to time, this Resolution shall be deemed to be and shall constitute a contract between
the City and such Bondholders, and the covenants and agreements herein set forth to be
performed by the City shall be for the equal benefit, protection and security of the owners of any
and all of such Bonds, all of which shall be of equal rank and without preference, priority, or
distinction of any of the Bonds over any other thereof except as expressly provided therein and
herein.
[END OF ARTICLE I]
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ARTICLE II
AUTHORIZATION AND DETAILS OF BONDS, CERTAIN DOCUMENTS,
REFUNDING AND RELATED SWAP TRANSACTION
SECTION 201. AUTHORIZATION OF BONDS. Subject and pursuant to the
provisions of this Resolution, bonds of the City to be known as "Taxable Special Obligation
Refunding Bonds (Pension Funding Project), Series 2005" (the "Bonds"), are hereby authorized
to be issued in an aggregate principal amount not to exceed Sixty Million Dollars ($60,000,000),
for the purpose of, together with other available moneys, (i) refunding the Prior Bonds to be
Refunded, (ii) paying any required Termination Payment and (iii) paying certain costs of
issuance of the Bonds and refunding the Prior Bonds to be Refunded.
Subject to the limitations contained herein, the Bonds shall be issued in such aggregate
principal amount, shall be dated, shall mature on such date or dates, but not later than September
30, 2021, and in such principal amounts, shall, subject to the provisions of the next succeeding
paragraph, be issued as Fixed Rate Bonds, shall be in the form of Serial Bonds or Term Bonds or
a combination thereof, shall have such Interest Payment Dates, shall bear interest at such rates
not to exceed the maximum rate permitted by law, with respect to any Term Bonds shall have
such Amortization Requirements, shall be subject to redemption at such times and at such prices,
all as shall be determined by the Mayor, after consultation with the Chief Financial Officer and
the Financial Advisor, and set forth in the Mayor's Certificate.
Notwithstanding the provisions of the foregoing paragraph or anything else contained in
this Resolution, if the Related Swap Transaction does not terminate on the Mandatory Early
Termination Date or is not assigned to the Swap Assignee, as more particularly described in
Section 215 of this Resolution, the Bonds shall be issued as Variable Rate Bonds, initially in a
DUtch Auction Mode, in accordance with, and subject to the provisions of Exhibit B hereto, all
as shall be determined by the Mayor, after consultation with the Chief Financial Officer and the
Financial Advisor, and set forth in the Mayor's Certificate. If the Bonds are issued as Variable
Rate Bonds, the Bonds shall be subject to the provisions of Exhibit B hereto and, to the extent of
any conflict between the provisions of Exhibit B and any other provisions of this Resolution, the
provisions of Exhibit B shall control.
The Commission hereby appoints Wachovia Bank, National Association, as Bond
Registrar for the Bonds.
The payment of principal of and interest on the Bonds when due will be insured by the
Bond Insurance Policy and the Reserve Account Requirement will be satisfied by the Reserve
Account Surety Bond.
SECTION 202. CERTAIN DETAILS OF BONDS. The Bonds shall be issued as
fully registered bonds in denominations of $5,000 or any integral multiple thereof and shall be
numbered consecutively from 1 upward preceded by the letter "R".
The principal of and redemption premium, if any, on the Bonds shall be payable upon
presentation and surrender at the designated corporate trust office of the Bond Registrar. Interest
on the Bonds shall be paid on each Interest Payment Date by check or draft drawn upon the Bond
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Registrar and mailed to the Holders of the Bonds at the addresses as they appear on the
registration books maintained by the Bond Registrar at the close of business on the 15th day
(whether or not a business day) of the month next preceding the Interest Payment Date (the
"Regular Record Date"); provided, however, that (i) if ownership of Bonds is maintained in a
book-entry only system by a securities depository, such payment may be made by automatic
funds transfer to the securities depository or its nominee or (ii) if such Bonds are not maintained
in a book-entry only system by a securities depository, upon written request of the Holder of
$1,000,000 or more in principal amount of Bonds, such payments may be made by wire transfer
to the bank and bank account specified in writing by such Holder (such bank being a bank within
the continental United States), if such Holder has advanced to the Bond Registrar the amount
necessary to pay the cost of such wire transfer or authorized the Bond Registrar to deduct the
cost of such wire transfer from the payment due to such Holder. Notwithstanding anything in
this paragraph to the contrary, any interest not punctually paid on a Regular Record Date shall
forthwith cease to be payable to the Holder on such Regular Record Date and may be paid at the
close of business on a special record date for the payment of such defaulted interest to be fixed
by the Bond Registrar, notice of which shall be given not less than 10 days prior to such special
record date to such Holder.
SECTION 203. REDEMPTION PROVISIONS. The Bonds may be subject to
redemption prior to maturity at such times, at such redemption prices and upon such terms in
addition to the terms contained in this Resolution as may be set forth in the Mayor's Certificate.
Notice of redemption for Bonds being redeemed shall be given by deposit in the U.S.
mail of a copy of a redemption notice, postage prepaid, at least thirty (30) and not more than
sixty (60) days before the redemption date, to all registered owners of the Bonds or portions of
the Bonds to be redeemed at their addresses as they appear on the registration books to be
maintained in accordance with the provisions hereof. Failure to mail any such notice to a
registered owner of a Bond, or any defect therein, shall not affect the validity of the proceedings
for redemption of any Bond or portion thereof with respect to which no failure or defect
occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by
each Bond being redeemed, the name and address of the Bond Registrar, the redemption price to
be paid and, if less than all of the Bonds then Outstanding shall be called for redemption, the
distinctive numbers and letters, including CUSIP numbers, if any, of such Bonds to be redeemed
and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof
to be redeemed. If any Bond is to be redeemed in part only, the notice of redemption which
relates to such Bond shall also state that on or after the redemption date, upon surrender of such
Bond, a new Bond or Bonds in a principal amount equal to the unredeemed portion of such Bond
will be issued. Any notice mailed as provided in this section shall be conclusively presumed to
have been duly given, whether or not the owner of such Bond receives such notice.
SECTION 204. EXECUTION OF BONDS. The Bonds shall be executed in the
name of the City by the Mayor, and the seal of the City or a facsimile thereof shall be affixed
thereto or imprinted or reproduced thereon and attested by the City Clerk, either manually or
with their facsimile signatures. In case any one or more of the officers who shall have signed or
sealed any of the Bonds shall cease to be such officer before the Bonds so signed and sealed shall
have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as
herein provided and may be issued as if the person who signed and sealed such Bonds had not
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ceased to hold such office. Any Bond may be signed and sealed on behalf of the City by such
person as at the actual time of the execution of such Bond shall hold the proper office, although
at the date of such Bonds such person may not have held such office or may not have been so
authorized.
The Bonds shall bear thereon a certificate of authentication, in the form set forth in
Exhibit A hereto, executed manually by the Bond Registrar. Only such Bonds as shall bear
thereon such certificate of authentication shall be entitled to any right or benefit under this
Resolution and no Bond shall be valid or obligatory for any purpose until such certificate of
authentication shall have been duly executed by the Bond Registrar. Such certificate of the Bond
Registrar upon any Bond executed on behalf of the City shall be conclusive evidence that the
Bond so authenticated has been duly authenticated and delivered under this Resolution and that
the Holder thereof is entitled to the benefits of this Resolution.
SECTION 205. NEGOTIABILITY, REGISTRATION AND CANCELLATION.
At the option of the Holder thereof and upon surrender thereof at the designated corporate trust
office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond
Registrar duly executed by the Holder or his duly authorized attorney and upon payment by such
Holder of any charges which the Bond Registrar or the City may make as provided in this
Section, the Bonds may be exchanged for Bonds of the same aggregate principal amount of the
same maturity of any other authorized denominations.
The Bond Registrar shall keep books for the registration of Bonds and for the registration
of transfers of Bonds. The Bonds shall be transferable by the Holder thereof in person or by his
attorney duly authorized in writing only upon the books of the City kept by the Bond Registrar
and only upon surrender thereof together with a written instrument of transfer satisfactory to the
Bond Registrar duly executed by the Holder or his duly authorized attorney. Upon the transfer
of any such Bond, the City shall cause to be issued in the name of the transferee a new Bond or
Bonds.
The City, the Bond Registrar and any other Fiduciaries may deem and treat the person in
whose name any Bond shall be registered upon the books kept by the Bond Registrar as the
absolute Holder of such Bond, whether such Bond shall be overdue or not, for the purpose of
receiving payment of, or on account of, the principal of, premium, if any, and interest on such
Bond as the same becomes due and for all other purposes. All such payments so made to any
such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability
upon such Bond to the extent of the sum or sums so paid, and neither the City, the Bond
Registrar nor any other Fiduciary shall be affected by any notice to the contrary.
In all cases in which the privilege of exchanging Bonds or transferring Bonds is
exercised, the City shall execute and the Bond Registrar shall authenticate and deliver Bonds in
accordance with the provisions of this Resolution. All Bonds surrendered in any such exchanges
or transfers shall forthwith be delivered to the Bond Registrar and canceled by the Bond
Registrar in the manner provided in this Section. There shall be no charge for any such exchange
or transfer of Bonds, but the City or the Bond Registrar may require the payment of a sum
sufficient to pay any tax, fee or other governmental charge required to be paid with respect to
such exchange or transfer. Neither the City nor the Bond Registrar shall be required (a) to
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transfer or exchange Bonds for a period of 15 days next preceding any selection of Bonds to be
redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or
exchange any Bonds called for redemption.
All Bonds paid or redeemed, either at or before maturity shall be delivered to the Bond
Registrar when such payment or redemption is made, and such Bonds, together with all Bonds
purchased by the City, shall thereupon be promptly canceled. Bonds so canceled may at any
time be destroyed by the Bond Registrar, who shall execute a certification of destruction in
duplicate by the signature of one of its authorized officers describing the Bonds so destroyed,
and one executed certificate shall be filed with the City and the other executed certificate shall be
retained by the Bond Registrar.
SECTION 206. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In
case any Bond shall become mutilated, destroyed, stolen or lost, the City may execute and the
Bond Registrar shall authenticate and deliver a new Bond of like maturity, denomination and
interest rate as the Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any
mutilated Bond, such mutilated Bond shall first be surrendered to the City and, in the case of any
lost, stolen or destroyed Bond, there shall first be furnished to the City and the Bond Registrar
evidence of such loss, theft, or destruction satisfactory to the City and the Bond Registrar,
together with indemnity satisfactory to them. In the event any such Bond shall be about to
mature or has matured or has been called for redemption, instead of issuing a duplicate Bond, the
City may direct the Bond Registrar to pay the same without surrender thereof. The City and
Bond Registrar may charge the Holder of such Bonds their reasonable fees and expenses in
connection with this transaction. Any Bond surrendered for replacement shall be canceled in the
same manner as provided in Section 205 hereof.
Any such duplicate Bonds issued pursuant to this Section shall constitute additional
contractual obligations on the part of the City, whether or not the lost, stolen or destroyed Bonds
be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and
proportionate benefits and rights as to lien on and source and security for payment from the
Pledged Funds, with all other Bonds issued hereunder.
SECTION207. PREPARATION OF DEFINITIVE BONDS; TEMPORARY
BONDS. The definitive Bonds shall be lithographed, printed or typewritten. Until the definitive
Bonds are prepared, the Mayor and City Clerk may execute and the Bond Registrar may
authenticate, in the same manner as is provided in Section 204, and deliver, in lieu of definitive
Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, one
or more printed, lithographed or typewritten temporary fully registered Bonds, substantially of
the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in
authorized denominations, and with such omissions, insertions and variations as may be
appropriate to such temporary Bonds. The City at its own expense shall prepare and execute
and, upon the surrender at the designated corporate trust office of the Bond Registrar of such
temporary Bonds for which no payment or only partial payment has been provided, the Bond
Registrar shall authenticate and, without charge to the Holder thereof, deliver in exchange
therefor, at the principal corporate trust office of the Bond Registrar, definitive Bonds of the
same aggregate principal amount and maturity as the temporary Bonds surrendered. Until so
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exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security
as definitive Bonds issued pursuant to this Resolution.
SECTION 208. FORM OF BONDS. The text of the Bonds shall be of the tenor set
forth in Exhibit A to this Resolution, with such omissions, insertions and variations as may be
necessary and desirable and authorized or permitted by this Resolution, including Exhibit B
hereto.
SECTION 209. BOOK-ENTRY ONLY SYSTEM FOR THE BONDS;
QUALIFICATION FOR DTC. The Bonds shall initially be issued as uncertificated securities
through the book-entry only system maintained by DTC. The City, the Bond Registrar and any
other Fiduciaries are hereby authorized to take such actions as may be necessary to qualify the
Bonds for deposit with DTC, including but not limited to those actions as are set forth in the
letter of representations between the City and DTC, wire transfers of interest and principal
payments with respect to the Bonds, utilization of electronic book entry data received from DTC
in place of actual delivery of Bonds and provisions of notices with respect to Bonds registered by
DTC (or any of its designees identified to the City and the Bond Registrar) by overnight
delivery, courier service, telegram, telecopy or other similar means of communication.
SECTION 210. NEGOTIATED SALE; BOND PURCHASE AGREEMENT. The
negotiated sale of the Bonds to the Underwriters is hereby authorized at a purchase price (not
including original issue premium or original issue discount) of not less than 99% of the
aggregate principal amount of the Bonds (the "Minimum Purchase Price") and at a true interest
cost rate computed, as applicable, by including the Termination Payment or based upon the
scheduled payments by the City under the Swap Agreement ("TIC") not to exceed 9.00% (the
"Maximum TIC"). The Mayor, after consultation with the Chief Financial Officer and the
Financial Advisor, is hereby authorized to award the Bonds to the Underwriters at a purchase
price of not less than the Minimum Purchase Price and at a TIC not in excess of the Maximum
TIC. The execution and delivery of the Bond Purchase Agreement for and on behalf of the City
by the Mayor shall be conclusive evidence of the City's acceptance of the Underwriters'
proposal to purchase the Bonds.
Upon compliance with the requirements of Section 218.385, Florida Statutes, by the
Underwriters, the Commission hereby authorizes the Mayor to execute and deliver the Bond
Purchase Agreement for and on behalf of the City, in substantially the form presented at the
meeting at which this Resolution was considered, subject to such changes, modifications,
insertions and omissions and such filling-in of blanks therein as may be determined and
approved by the Mayor, after consultation with the Chief Financial Officer and the City
Attorney. The execution of the Bond Purchase Agreement for and on behalf of the City by the
Mayor shall be conclusive evidence of the City's approval of the Bond Purchase Agreement.
SECTION 211. PRELIMINARY OFFICIAL STATEMENT; OFFICIAL
STATEMENT. The Preliminary Official Statement and the Official Statement in connection
with the issuance of the Bonds are hereby approved in substantially the form of the Preliminary
Official Statement presented at the meeting at which this Resolution was considered, subject to
such changes, modifications, insertions and omissions and such filling-in of blanks therein as
may be determined and approved by the Mayor, after consultation with the Chief Financial
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Officer and the City Attomey. The execution of the Official Statement, for and on behalf of the
City by the Mayor and the City Manager shall be conclusive evidence of the City's approval of
the Preliminary Official Statement and the Official Statement. The distribution of the
Preliminary Official Statement and the Official Statement in connection with the marketing of
the Bonds and the execution and delivery of the Official Statement by the Mayor and the City
Manager are hereby authorized. The Mayor or his designee, after consultation with the Chief
Financial Officer and the City Attorney, is hereby authorized to make any necessary
certifications to the Underwriters regarding a near final or deemed final Official Statement, if
and to the extent required by the Rule.
SECTION 212. CONTINUING DISCLOSURE. For the benefit of the Holders and
beneficial owners from time to time of the Bonds, the City agrees, in accordance with and as the
only obligated person with respect to the Bonds under the Rule, to provide or cause to be
provided certain financial information and operating data, financial statements and notices, in
such manner, as may be required for purposes of paragraph (b)(5) of the Rule. In order to
describe and specify the terms of the City's continuing disclosure agreement, including
provisions for enforcement, amendment and termination, the Chief Financial Officer is hereby
authorized and directed to sign and deliver, in the name and on behalf of the City, the Continuing
Disclosure Commitment, in substantially the form presented at the meeting at which this
Resolution was considered, subject to such changes, modifications, insertions and omissions and
such filling-in of blanks therein as may be determined and approved by the Chief Financial
Officer, after consultation with the City Attorney. The execution of the Continuing Disclosure
Commitment, for and on behalf of the City by the Chief Financial Officer, shall be deemed
conclusive evidence of the City's approval of the Continuing Disclosure Commitment. The
agreement formed, collectively, by this paragraph and the Continuing Disclosure Commitment,
shall be the City's continuing disclosure agreement for purposes of the Rule, and its performance
shall be subject to the availability of funds to meet costs the City would be required to incur to
perform it. Notwithstanding any other provisions of this Resolution, any failure by the City to
comply with any provisions of the Continuing Disclosure Commitment shall not constitute a
default under this Resolution and the remedies therefor shall be solely as provided in the
Continuing Disclosure Commitment.
The Chief Financial Officer is further authorized to establish, or cause to be established,
procedures in order to ensure compliance by the City with the Continuing Disclosure
Commitment, including the timely provision of information and notices. Prior to making any
filing in accordance with such agreement, the Chief Financial Officer may consult with, as
appropriate, the City Attorney or bond counsel. The Chief Financial Officer, acting in the name
and on behalf of the City, shall be entitled to rely upon any legal advice provided by the City
Attomey or bond counsel in determining whether a filing should be made.
SECTION 213. GUARANTY AGREEMENT. The Commission hereby authorizes
the Mayor to execute and deliver the Guaranty Agreement, in substantially the form presented at
the meeting at which this Resolution was considered, subject to such changes, modifications,
insertions and omissions and such filling-in of blanks therein as may be necessary to secure
delivery of the Reserve Account Surety Bond. The execution and delivery of the Guaranty
Agreement by the Mayor shall be conclusive evidence of the City's approval of the Guaranty
Agreement.
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SECTION 214. REFUNDING; ESCROW DEPOSIT AGREEMENT. The
refunding, defeasance and redemption of the Prior Bonds to be Refunded is hereby authorized
and approved. The Mayor, after consultation with the Chief Financial Officer and the Financial
Advisor, is hereby authorized to determine the date on which the Prior Bonds to be Refunded
which will be redeemed as shall be set forth in the Escrow Deposit Agreement. The Mayor and
the City Clerk are hereby authorized to execute and deliver the Escrow Deposit Agreement to
provide for the defeasance and redemption of the Prior Bonds to be Refunded with Wachovia
Bank, National Association, which is hereby appointed Escrow Agent with respect to the Prior
Bonds to be Refunded, in substantially the form presented at the meeting at which this
Resolution was considered, subject to such changes, modifications, insertions and omissions and
such filling-in of blanks therein as may be determined and approved by the Mayor, after
consultation with the Chief Financial Officer and the City Attorney. There is hereby established
the Escrow Deposit Trust Fund (as defined in the Escrow Deposit Agreement) under the Escrow
Deposit Agreement for the deposit of proceeds of the Bonds and any other available moneys to
be applied as provided in the Escrow Deposit Agreement. The purchase of Defeasance
Obligations (as defined in the Prior Resolution) from the proceeds of the Bonds and any other
available moneys in order to provide for the defeasance and redemption of the Prior Bonds to be
Refunded is hereby authorized and approved. The execution and delivery of the Escrow Deposit
Agreement by the Mayor and the City Clerk shall be conclusive evidence of the City's approval
of the date of redemption of the Prior Bonds to be Refunded, the Escrow Deposit Agreement and
the purchase of such Defeasance Obligations.
SECTION 215. CONCERNING THE RELATED SWAP TRANSACTION AND
THE VARIABLE RATE BONDS. If the Swap Provider exercises the Option, the City is
authorized, as determined by the Mayor, after consultation with the Chief Financial Officer and
the Financial Advisor, to either (i) permit the Related Swap Transaction to terminate on the
Mandatory Early Termination Date, in which case the City shall pay the Termination Payment to
the Swap Provider, or (ii) conduct (or cause to be conducted) a bidding process for the
assignment of the City's rights and obligations under the Related Swap Transaction on or prior to
the Mandatory Early Termination Date and, with the consent of the Swap Provider, assign such
rights and obligations to the bidder agreeing to the lowest Termination Payment by the City,
which bidder shall be the Swap Assignee, in which case the City will take all actions required for
the Related Swap Transaction to be assigned to the Swap Assignee and shall pay the Termination
Payment to the Swap Assignee; provided, however, that if based on the then current market
conditions, the Mayor, after consultation with the Chief Financial Office and the Financial
Advisor, determines that it is beneficial for the City not to permit the Related Swap Transaction
to terminate on the Mandatory Early Termination Date, (A) the City shall take the actions
required for the Related Swap Termination not to so terminate and to secure the Swap Surety
Bond, (B) the City hereby ratifies the Related Swap Transaction, (C) for all purposes of this
Resolution, the Swap Agreement shall be treated as a Hedge Agreement and the Swap Provider
shall be treated as a Counterparty, (D) all references in the Swap Agreement to (1) the "Bonds"
shall mean the Bonds issued under this Resolution and (2) the "Resolution" shall mean this
Resolution, and (v) the Bonds shall be issued as Variable Rate Bonds as provided in Section 201
hereof.
If the Bonds are issued as Variable Rate Bonds, the Mayor, after consultation with the
Chief Financial Officer and the Financial Advisor, is authorized to appoint the initial Auction
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Agent and Broker-Dealer(s) and to execute and deliver an Auction Agent Agreement with the
Auction Agent in connection with the initial issuance of the Bonds in a Dutch Auction Mode,
such Auction Agent Agreement to be in substantially the form presented at the meeting at which
this Resolution was considered, subject to such changes, modifications, insertions and omissions
and such filling-in of blanks therein as may be determined and approved by the Mayor, after
consultation with the Chief Financial Officer and the City Attorney. The execution and delivery
of the Auction Agent Agreement by the Mayor shall be conclusive evidence of the City's
approval of the appointment of such Auction Agent and Broker-Dealer(s) and of the Auction
Agent Agreement.
After the issuance of the Bonds as Variable Rate Bonds, the Mayor is also authorized,
based upon the recommendations of the Chief Financial Officer and the Financial Advisor, to
take such additional actions from time to time, including appointment of other agents or
fiduciaries and securing Liquidity Facilities and/or Substitute Bond Insurance Policies, as shall
be necessary to change the Bonds from one Interest Mode to another Interest Mode, and to
execute and deliver a Subsequent Bond Series Certificate in connection therewith.
[END OF ARTICLE II]
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ARTICLE III
COVENANTS, FUNDS AND APPLICATION THEREOF
SECTION 301. BONDS NOT TO BE INDEBTEDNESS OF THE CITY. The
Bonds shall not be and shall not constitute an indebtedness of the City, within the meaning of
any constitutional, statutory or charter provisions or limitations, but shall be payable solely, as
provided in this Resolution, from the Pledged Funds and, solely to the extent provided in Section
304(A) hereof, the Non-Ad Valorem Funds. No holder or holders of any Bonds issued
hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the
City, the State or any political subdivision thereof, or taxation in any form of any real or personal
property therein, or the application of any funds of the City, except the Pledged Funds and,
solely to the extent provided in Section 304(A) hereof, the Non-Ad Valorem Funds to pay the
Bonds or the interest thereon or the making of any sinking fund, reserve or other payments
provided for herein. Notwithstanding the foregoing or anything else contained in this
Resolution, the Purchase Price of tendered Bonds shall not be payable from or secured by a lien
on or pledge of the Pledged Funds or Non-Ad Valorem Funds, but shall be payable solely from
remarketing proceeds and amounts paid under a Liquidity Facility in the manner and to the
extent provided in Exhibit B hereto and such Liquidity Facility.
SECTION 302. BONDS SECURED BY PLEDGE OF PLEDGED FUNDS. The
payment of the principal of, interest and premium, if any, on all of the Bonds issued hereunder
shall be secured forthwith equally and ratably by a first lien on and pledge of the Pledged Funds.
The Pledged Funds are hereby irrevocably pledged to the payment of the principal of and interest
on the Bonds authorized herein, and other payments provided for herein, as the same become due
and payable. The Bonds and the obligation evidenced thereby shall not constitute a lien upon
any property of or in the City, but shall constitute a lien only on the Pledged Funds all in the
manner provided in this Resolution.
The Bonds shall be payable from the Non-Ad Valorem Funds solely in accordance with
the provisions of Section 304(A) hereto.
Notwithstanding the foregoing or anything else contained in this Resolution, the Purchase
Price of tendered Bonds shall not be payable from or secured by a lien on or pledge of the
Pledged Funds or Non-Ad Valorem Funds, but shall be payable solely from remarketing
proceeds and amounts paid under a Liquidity Facility in the manner and to the extent provided in
Exhibit B hereto and such Liquidity Facility.
SECTION 303. APPLICATION OF BOND PROCEEDS AND OTHER MONEYS.
Proceeds (net of Underwriters' discount) from the sale of the Bonds and available
moneys not to exceed $3,342,615.00 (representing an amount equal to the Swap Premium,
investment earnings thereon and, whether paid by the Swap Provider or applied as a credit
against any Termination Payment, the Swap Exercise Payment) shall be applied as follows:
(1) An amount equal to the accrued interest on the Bonds, if any, shall be
deposited in the Interest Account, hereinafter created and established, and used for the
purpose of paying interest on the Bonds as the same becomes due and payable.
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(2) The mount set forth in the Escrow Deposit Agreement shall be deposited
with the Escrow Agent to be applied as provided in the Escrow Deposit Agreement.
(3) The amount necessary to pay any Termination Payment (or balance
thereof) shall be paid to the Swap Provider or the Swap Assignee, as applicable.
(4) The balance of the proceeds derived from the sale of the Bonds shall (i) be
deposited in a Cost of Issuance Fund which is hereby created and established and used
for the purpose of paying such costs of issuance of the Bonds and refunding the Prior
Bonds to be Refunded as the City shall determine are appropriate and/or (ii) applied
directly to the payment of any premiums due Ambac Assurance.
SECTION 304. COVENANTS OF THE CITY. The City hereby covenants and
agrees with the holders of any and all of the Bonds issued pursuant to this Resolution as follows:
(A) Covenant to Budget and Appropriate. The City covenants and agrees to budget
and appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Funds
lawfully available in each Fiscal Year, amounts sufficient to satisfy (i) the Annual Debt Service
Requirement for such Fiscal Year, (ii) any deposits required to be made into the Debt Service
Reserve Account during such Fiscal Year, (iii) any other amounts due the Bond Insurer, any
Liquidity Facility Providers, the issuers of any Reserve Account Insurance Policies or Reserve
Account Letters of Credit and any Fiduciaries during such Fiscal Year and (iv) to the extent not
included under (i) above, any amounts due Counterparties under any Hedge Agreements during
such Fiscal Year. Notwithstanding (i) above, if at any time the City determines that the Annual
Debt Service Requirement for a Fiscal Year will not be sufficient to pay the interest becoming
due on the Bonds during such Fiscal Year, the City's covenant and agreement under this Section
304(A) shall, subject to all the provisions of this Section 304(A), include amounts sufficient to
pay the interest becoming due on the Bonds during such Fiscal Year. Such covenant and
agreement on the part of the City to budget and appropriate such amounts of Non-Ad Valorem
Funds shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem
Funds 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 City, the City does not covenant to maintain any services or programs, now
provided or maintained by the City, which generate Non-Ad Valorem Funds.
Such covenant to budget and appropriate does not create any lien upon or pledge of such
Non-Ad Valorem Funds, nor does it preclude the City from pledging in the future its Non-Ad
Valorem Funds, nor does it require the City to levy and collect any particular Non-Ad Valorem
Funds, nor does it give the Bondholders, the Bond Insurer, any Liquidity Facility Providers, the
issuers of any Reserve Account Insurance Policies or Reserve Account Letters of Credit, any
Fiduciaries or any Counterparties a prior claim on the Non-Ad Valorem Funds as opposed to
claims of general creditors of the City. Such covenant to budget and appropriate Non-Ad
Valorem Funds is subject in all respects to the payment of obligations secured by a pledge of
such Non-Ad Valorem Funds heretofore or hereinafter 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 available in the manner described herein Non-Ad Valorem Funds and
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placing on the City a positive duty to budget and appropriate, by amendment, if necessary,
amounts sufficient to meet its obligations hereunder; subject, however, in all respects to the
restrictions of Section 166.241(3), Florida Statutes, which provides, in part, that the governing
body of each municipality 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 City or which are legally mandated by
applicable law.
(B) Disposition of Non-Ad Valorem Funds. There is hereby created and established
the "Taxable Special Obligation Refunding Bonds (Pension Funding Project) Sinking Fund"
(hereinafter referred to as thc "Sinking Fund"). There are also hereby created four (4) separate
Accounts in the Sinking Fund to be known as the "Interest Account," the "Principal Account,"
the "Bond Redemption Account" and thc "Debt Service Reserve Account." The Sinking Fund
and the Accounts therein shall bc held by the City.
Non Ad-Valorem Funds appropriated in each Fiscal Year for the purposes hereunder
under the provisions of Section 304(A) above shall be applied in the following manner:
(1) To the full extent necessary, for deposit into the Interest Account in the
Sinking Fund, on the fifth (5th) day preceding each Interest Payment Date, such sums as
shall be sufficient to pay the interest becoming due on the Bonds on each such Interest
Payment Date; provided, however, that such deposits for interest shall not be required to
be made into the Interest Account to the extent that money on deposit therein is sufficient
for such purpose and, provided further, that in the event the City has issued Variable Rate
Bonds or entered into a Hedge Agreement pursuant to the provisions of this Resolution,
sums shall be deposited at such other times and/or in such other amounts or transferred to
such other parties as necessary to pay the interest becoming due on the Variable Rate
Bonds or the payments due under the Hedge Agreement on the next Interest Payment
Date which under the terms of such Hedge Agreement are payable from the Interest
Account.
The City shall, on each Interest Payment Date, transfer to the Bond Registrar
moneys in an amount equal to the interest due on such Interest Payment Date or shall,
prior to such Interest Payment Date, advise the Bond Registrar of the amount of any
deficiency in the amount so to be transferred so that the Bond Registrar may give the
appropriate notice required to provide for the payment of such deficiency on such Interest
Payment Date from any Reserve Account Insurance Policy or Reserve Account Letter of
Credit on deposit in the Debt Service Reserve Account or from the Bond Insurance
Policy, as applicable.
(2) (a) To the full extent necessary, for deposit in the Principal Account in the
Sinking Fund, on the fifth (5th) day preceding each principal maturity date, the principal
amount of Serial Bonds which will mature and become due on such maturity dates;
provided, however, that such deposits for principal shall not be required to be made into
the Principal Account to the extent that money on deposit therein is sufficient for such
purpose.
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Miami/16317.4
The City shall, on each principal payment date, transfer to the Bond Registrar
moneys in an amount equal to the principal due on such principal payment date or shall,
prior to such principal payment date, advise the Bond Registrar of the amount of any
deficiency in the amount so to be transferred so that the Bond Registrar may give the
appropriate notice required to provide for the payment of such deficiency on such
principal payment date from any Reserve Account Insurance Policy or Reserve Account
Letter of Credit on deposit in the Debt Service Reserve Account or from the Bond
Insurance Policy, as applicable.
(b) To the full extent necessary, for deposit into the Bond Redemption
Account in the Sinking Fund on the fifth (5th) day preceding each redemption or maturity
date, the Amortization Requirements as may be necessary for the payment of the Term
Bonds payable from the Bond Redemption Account on such redemption or maturity
dates.
The moneys in the Bond Redemption Account shall be used solely for the
purchase or redemption of the Term Bonds payable therefrom. The City may at any time
purchase any of said Term Bonds at prices not greater than the then redemption price of
said Term Bonds. If the Term Bonds are not then redeemable, the City may purchase
said Term Bonds at prices not greater than the redemption price of such Term Bonds on
the next ensuing redemption date. The City shall be mandatorily obligated to use any
moneys in the Bond Redemption Account for the redemption prior to maturity of such
Term Bonds in such manner and at such times as the same are subject to mandatory
redemption. If, by the application of moneys in the Bond Redemption Account, the City
shall purchase or call for redemption in any year Term Bonds in excess of the
Amortization Requirements for such year, such excess of Term Bonds so purchased or
redeemed shall be credited in such manner and at such times as the Chief Financial
Officer shall determine over the remaining payment dates.
The City shall, on each redemption or maturity date, transfer to the Bond
Registrar moneys in an amount equal to the payments due on the Term Bonds on such
redemption or maturity date or shall, prior to such redemption or maturity date, advise the
Bond Registrar of the amount of any deficiency in the amount so to be transferred so that
the Bond Registrar may give the appropriate notice required to provide for the payment
of such deficiency on such redemption or maturity date from any Reserve Account
Insurance Policy or Reserve Account Letter of Credit on deposit in the Debt Service
Reserve Account or from the Bond Insurance Policy, as applicable.
(3) To the full extent necessary, for deposit into the Debt Service Reserve
Account in the Sinking Fund on the fifteenth (15th) day of each month in each year,
beginning with the fifteenth (15th) day of the first full calendar month following the date
on which there is a deficiency in the amount required to be on deposit in the Debt Service
Reserve Account, 'such sums as shall be at least sufficient to pay an amount equal to one-
twelfth (1/12) of the difference between the amount on deposit in the Debt Service
Reserve Account (including any Reserve Account Insurance Policy or Reserve Account
Letter of Credit) and the Reserve Account Requirement; provided, however, that no
payments shall be required to be made into the Debt Service Reserve Account whenever
Miami/16317.4
23
and as long as the amount on deposit therein (including any Reserve Account Insurance
Policy or Reserve Account Letter of Credit) shall be equal to the Reserve Account
Requirement.
Moneys in Debt Service Reserve Account shall be used only for the purpose of
making payments of principal of and interest on the Bonds when the moneys in any other
Fund or Account held pursuant to this Resolution and available for such purpose are
insufficient therefor.
Any moneys in the Debt Service Reserve Account in excess of the Reserve
Account Requirement for the Bonds Outstanding may, in the discretion of the City, be
transferred to and deposited in the Interest Account, the Principal Account or the Bond
Redemption Account as the City at its option may determine.
Notwithstanding the foregoing provisions, in lieu of or in substitute for the
required deposits (including existing deposits therein) into the Debt Service Reserve
Account, the City may cause to be deposited into the Debt Service Reserve Account a
Reserve Account Insurance Policy or a Reserve Account Letter of Credit for the benefit
of the Holders of the Bonds Outstanding, which Reserve Account Insurance Policy or
Reserve Account Letter of Credit shall be payable or available to be drawn upon, as the
case may be (upon the giving of notice as required thereunder), on any Interest Payment
Date or principal payment date or mandatory redemption date on which a deficiency
exists which cannot be cured by moneys in any other fund or account held pursuant to
this Resolution and available for such purpose. If a disbursement is made under the
Reserve Account Insurance Policy or the Reserve Account Letter of Credit, the City shall
be obligated to either (i) reinstate the maximum limits of such Reserve Account
Insurance Policy or Reserve Account Letter of Credit within twelve months by increasing
the amount payable or available to be drawn thereunder in equal monthly amounts over
such twelve month period, or (ii) deposit, on a monthly basis in accordance with the first
paragraph of this Section 304(B)(3), into the Debt Service Reserve Account from the
Non-Ad Valorem Funds appropriated in accordance with Section 304(A) hereof, funds in
the amount of the disbursements made under such Reserve Account Insurance Policy or
Reserve Account Letter of Credit, or a combination of such alternatives as shall equal the
Reserve Account Requirement for the Bonds Outstanding. The City shall satisfy the
Reserve Account Requirement on the date of original issuance of the Bonds by causing
the Reserve Account Surety Bond to be provided by Ambac Assurance.
In the event that upon the occurrence of any deficiency in the Interest Account,
the Principal Account or the Bond Redemption Account, the Debt Service Reserve
Account is then funded with one or more Reserve Account Insurance Policies and/or
Reserve Account Letters of Credit, the City or the Bond Registrar, as applicable, shall, on
an interest or principal payment date or mandatory redemption date to which such
deficiency relates, draw upon or cause to be paid under such facilities, on a pro-rata basis
thereunder, an amount sufficient to remedy such deficiency, in accordance with the terms
and provisions of such facilities and any corresponding reimbursement or other
agreement governing such facilities; provided however, that if at the time of such
deficiency the Debt Service Reserve Account is only partially funded with one or more
Miami/16317.4
24
Reserve Account Insurance Policies and/or Reserve Account Letters of Credit, prior to
drawing on such facilities or causing payments to be made thereunder, the City shall first
apply any cash and securities on deposit in the Debt Service Reserve Account to remedy
the deficiency and, if after such application a deficiency still exists, the City or the Bond
Registrar, as applicable, shall make up the balance of the deficiency by drawing on such
facilities or causing payments to be made thereunder, as provided in this paragraph.
Amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account
Letter of Credit shall be applied as set forth in the second paragraph of this Section
304(B)(3). Any amounts drawn or paid under a Reserve Account Insurance Policy or
Reserve Account Letter of Credit shall be reimbursed to the issuer thereof in accordance
with the terms and provisions of the reimbursement or other agreement governing such
facility, including with respect to the Reserve Account Surety Bond, the Guaranty
Agreement.
The Debt Service Reserve Account shall be valued on the last day of each Fiscal
Year and the value of securities on deposit therein shall be the lower of par, or if
purchased at other than par, amortized value. Amortized value, when used with respect
to securities purchased at a premium above or a discount below par, shall mean the value
at any given date obtained by dividing the total premium or discount at which such
securities were purchased by the number of interest payment dates remaining to maturity
on such securities after such purchase and by multiplying the amount so calculated by the
number of interest payment dates having passed since the date of purchase; and (i) in the
case of securities purchased at a premium, by deducting the product thus obtained from
the purchase price, and (ii) in the case of securities purchased at a discount, by adding the
product thus obtained to the purchase price.
(4) To the various Fiduciaries, Liquidity Facility Providers, issuers of Reserve
Account Insurance Policies or Reserve Account Letters of Credit and Counterparties, as
applicable, in payment of amounts payable to such parties during such Fiscal Year not
paid pursuant to the above provisions.
Notwithstanding the foregoing or any other provision herein to the contrary, if any
amount applied to the payment of principal of and premium, if any, and interest on the Bonds
that would have been paid from an account in the Sinking Fund, is paid instead under the Bond
Insurance Policy or a Liquidity Facility, amounts deposited in such relevant account may be
paid, to the extent required, to the Bond Insurer or the Liquidity Facility Provider having
theretofore made said corresponding payment.
(C) Investment of Funds. The Sinking Fund, including the Interest Account,
Principal Account, Bond Redemption Account and Debt Service Reserve Account, and the Cost
of Issuance Fund shall constitute trust funds in favor of the Bondholders and shall be invested by
the City as provided in this Section 304(C).
Moneys on deposit in the Interest Account, Principal Account, Bond Redemption
Account and Cost of Issuance Fund may be invested in Permitted Investments maturing not later
than the dates on which such moneys will be needed for the purposes of such fund or account.
Miami/16317.4
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Moneys on deposit in the Debt Service Reserve Account may be invested in Permitted
Investments maturing not later than the final maturity of any of the Bonds.
All income and earnings received from the investment and reinvestment of moneys in the
Interest Account, the Principal Account and the Bond Redemption Account in the Sinking Fund
shall be retained in the respective accounts and applied as a credit against the obligation of the
City to deposit moneys to such accounts pursuant to Section 304(B)(1) and Section 304(B)(2)(a)
and Section 304(B)(2)(b) of this Resolution, respectively.
All income and earnings received from the investment and reinvestment of moneys in the
Debt Service Reserve Account in the Sinking Fund shall be retained in the Debt Service Reserve
Account and applied as a credit against the obligation of the City to deposit moneys to such
Account, unless the amount in such Account shall exceed the Reserve Account Requirement, in
which event such excess may be applied in the manner set forth for excess amounts in the Debt
Service Reserve Account, as described in Section 304(B)(3).
All income and earnings received from the investment and reinvestment of moneys in the
Cost of Issuance Fund shall be transferred to the Interest Account.
For the purpose of investing or reinvesting, the City may commingle moneys in the
Funds and Accounts created and established hereunder in order to achieve greater investment
income; provided that the City shall separately account for the amounts so commingled. The
amounts required to be accounted for in each of the Funds and Accounts designated herein may
be deposited in a single bank account provided that adequate accounting procedures are
maintained to reflect and control the restricted allocations of the amounts on deposit therein for
the various purposes of such Funds and Accounts as herein provided. The designation and
establishment of Funds and Accounts in and by this Resolution shall not be construed to require
the establishment of any completely independent Funds and Accounts but rather is intended
solely to constitute an allocation of certain revenues and assets for certain purposes and to
establish such certain priorities for application of certain revenues and assets as herein provided.
(D) Books and Records. The City will keep separately identifiable accounting
records for the Pledged Funds by the use of a fund established in accordance with generally
accepted accounting principles, and any Holder of a Bond or Bonds issued pursuant to this
Resolution, shall have the right at all reasonable times to inspect all records, accounts and data of
the City relating thereto. Such records and accounts shall contain the statements required by
generally accepted accounting principles applicable to governmental entities.
(E) No Impairment of Contract. The City has full power and authority to
irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the
Bonds. The pledge of such Pledged Funds, in the manner provided herein, shall not be subject to
repeal, modification or impairment by any subsequent resolution, ordinance or other proceedings
of the City so long as any Bonds are Outstanding hereunder. The City shall take all actions
necessary and pursue such legal remedies which may be available to it either in law or in equity
to prevent or cure any impairment by any entity other than the City within the meaning of this
subsection.
Miami/16317.4
26
(F) Remedies. Any Holder of Bonds issued under the provisions of this Resolution
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, or
granted and contained in this Resolution, and may enforce and compel the performance of all
duties required by this Resolution or by any applicable statutes to be performed by the City or by
any officer thereof. Nothing herein, however, shall be construed to grant any Holder of such
Bonds any lien on any property of or within the corporate boundaries of the City, except as
provided herein. No Holder of Bonds, however, shall have any right in any manner whatever to
affect adversely, or prejudice the security of this Resolution or to express any right hereunder
except in the manner herein provided, and all proceedings at law or in equity shall be instituted
and maintained for the benefit of all Holders of Bonds.
Notwithstanding anything in this Resolution to the contrary, so long as the Bond Insurer
shall not be in default in its payment obligations under the Bond Insurance Policy, the Bond
Insurer shall be deemed to be the Holder of all Bonds so secured for all purposes of this Section
304(F).
(G) Discharge and Satisfaction of Bonds. The covenants, liens and pledges entered
into, created or imposed pursuant to this Resolution may be fully discharged and satisfied with
respect to all or a portion of the Bonds in any one or more of the following ways:
(1) by paying the principal of and interest on such Bonds when the same shall
become due and payable; or
(2) by depositing in the Interest Account, the Principal Account and the Bond
R~demption Account and/or in such other accounts which are irrevocably pledged to the
payment of Bonds as the City may hereafter create and establish by resolution, certain
moneys which together with other moneys lawfully available therefor, if any, shall be
sufficient at the time of such deposit to pay when due the principal, redemption premium,
if any, and interest due and to become due on said Bonds on or prior to the redemption
date or maturity date thereof; or
(3) by depositing in the Interest Account, the Principal Account and the Bond
Redemption Account and/or such other accounts which are irrevocably pledged to the
payment of Bonds as the City may hereafter create and establish by resolution, moneys
which together with other moneys lawfully available therefor, when invested in
Defeasance Obligations which shall not be subject to redemption prior to their maturity
other than at the option of the holder thereof, will provide moneys which shall be
sufficient to pay when due the principal, redemption premium, if any, and interest due
and to become due on said Bonds on or prior to the redemption date or maturity date
thereof and delivering a verification report of a nationally recognized certified public
accountant as to the adequacy of such deposit, together with investment earnings thereon,
to pay when due the principal, redemption premium, if any, and interest due or to become
due on or prior to the redemption date or maturity date of the Bonds.
(4) As to Variable Rate Bonds, whether discharged and satisfied under the
provisions of subsection (2) or (3) above, the amount required for the interest thereon
Miami/16317.4
27
shall be calculated at the maximum rate permitted by the terms of the provisions which
authorized the issuance of such Variable Rate Bonds; provided however, that if on any
date, as a result of such Variable Rate Bonds having borne interest at less than such
maximum rate for any period, the total amount of moneys and Defeasance Obligations on
deposit for the payment of interest on such Variable Rate Bonds is in excess of the total
amount which would have been required to be deposited on such date in respect of such
Variable Rate Bonds in order to fully discharge and satisfy such Bonds pursuant to the
provisions of this Section, the City may use the amount of such excess free and clear of
any trust, lien, security interest, pledge or assignment securing said Variable Rate Bonds
or otherwise existing under this Resolution.
(5) Notwithstanding any of the provisions of this Resolution to the contrary,
Put Bonds may only be fully discharged and satisfied either pursuant to subsection (1)
above or by depositing in the Interest Account, the Principal Account and the Bond
Redemption Account, or in such other accounts which are irrevocably pledged to the
payment of the Put Bonds as the City may hereafter create and establish by resolution,
moneys which together with moneys lawfully available therefor, if any, shall be sufficient
at the time of such deposit to pay when due the maximum amount of principal of and
redemption premium, if any, and interest on such Put Bonds which could become payable
to the Holders of such Bonds upon the exercise of any options provided to the Holders of
such Bonds; provided however, that if, at the time a deposit is made pursuant to this
subsection (5), the options originally exercisable by the Holder of a Put Bond are no
longer exercisable, such Bond shall not be considered a Put Bond for purposes of this
subsection (5).
(6) Notwithstanding the foregoing, all references to the discharge and
satisfaction of Bonds shall include the discharge and satisfaction of any portion of the
Bonds, any maturity or maturities of the Bonds, any portion of a maturity of the Bonds or
any combination thereof.
Upon such payment or deposit in the amount and manner provided in this Section
304(G), Bonds shall be deemed to be paid and shall no longer be deemed to be Outstanding for
the purposes of this Resolution and all liability of the City with respect to said Bonds shall cease,
terminate and be completely discharged and extinguished, and the Holders thereof shall be
entitled to payment solely out of the moneys or securities so deposited; provided that in the event
said Bonds do not mature and are not to be redeemed within the next succeeding sixty (60) days,
the City shall have given the Bond Registrar irrevocable instructions to give, as soon as
practicable, a notice to the Holders of said Bonds by first-class mail, postage prepaid, stating that
the deposit of said moneys or Defeasance Obligations has been made with an appropriate
fiduciary institution acting as escrow agent solely for the Holders of said Bonds and other Bonds
being defeased, and that said Bonds are deemed to have been paid in accordance with this
Section and stating such maturity or redemption date upon which moneys are to be available for
the payment of the principal of and premium, if any, and interest on said Bonds,
In the event that the principal and redemption price, if applicable, and interest due on the
Bonds shall be paid by the Bond Insurer pursuant to the terms of the Bond Insurance Policy, the
assignment and pledge created hereunder and all covenants, agreements and other obligations of
Miami/16317.4
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the City to the Bondholders shall continue to exist and the Bond Insurer shall be subrogated to
the rights of such Bondholders.
If any portion of the moneys deposited for the payment of the principal of and
redemption premium, if any, and interest on any portion of Bonds is not required for such
purpose, the City may use the amount of such excess free and clear of any trust, lien, security
interest, pledge or assignment securing said Bonds or otherwise existing under this Resolution.
SECTION 305. COVENANTS FOR AMBAC ASSURANCE. The Commission
hereby authorizes the City to secure the Bond Insurance Policy and the Reserve Account Surety
Bond in connection with the issuance of the Bonds and to pay the premiums with respect thereto.
For all purposes of this Resolution, the Reserve Account Surety Bond shall be treated as a
Reserve Account Insurance Policy hereunder.
For so long as the Bond Insurance Policy and the Reserve Account Surety Bond are in
effect and Ambac Assurance has not defaulted in its obligations thereunder, and notwithstanding
any provisions to the contrary contained in this Resolution, the City and the Bond Registrar, as
applicable, covenant and agree, but solely for the benefit of Ambac Assurance, as follows:
(A) Consent of Ambac Assurance. Any provision of this Resolution expressly
recognizing or granting rights in or to Ambac Assurance may not be amended in any manner
which affects the rights of Ambac Assurance without the prior written consent of Ambac
Assurance.
(B) Consent of Ambac Assurance in Lieu of Bondholder Consent. Ambac
Assurance's consent shall be required in lieu of Bondholder consent, when required, for the
following purposes: (i) execution and delivery of any supplemental resolution or any
amendment, supplement or change to or modification of this Resolution; (ii) removal of the
Bond Registrar and selection and appointment of any successor Bond Registrar; and (iii)
initiation or approval of any action not described in (i) or (ii) above which requires Bondholder
consent.
(C) Rights of Ambac Assurance in the Event of Insolvency. In the event of any
reorganization or liquidation, Ambac Assurance shall have the right to vote on behalf of all
Bondholders but shall in no event vote to reduce the principal amount of Bonds Outstanding or
to reduce the interest rate which the Bonds bear.
(D) Consent of Ambac Assurance Upon Default. Anything in this Resolution to the
contrary notwithstanding, upon the occurrence and continuance of a default under this
Resolution, Ambac Assurance shall be entitled to control and direct the enforcement of all rights
and remedies granted to the Bondholders under this Resolution.
(E) Notices to Ambac Assurance; Accountings.
(1)
Assurance:
The City or the Bond Registrar, as applicable, shall furnish to Ambac
Miami/16317.4
29
(a) as soon as practicable after filing thereof, a copy of any financial
statement of the City and a copy of any audit and annual report of the City;
(b) a copy of any notice to be given to the registered owners of the
Bonds, including, without limitation, notice of any redemption of or defeasance of
Bonds, and any certificate rendered pursuant to this Resolution relating to the
security for the Bonds;
(c) all information and notices to be provided under the Continuing
Disclosure Commitment; and
(d) such additional information it may reasonably request.
(2) The Bond Registrar or the City, as applicable, shall notify Ambac
Assurance of any failure of the City to provide relevant notices or certificates.
(3) The City will permit Ambac Assurance to discuss the affairs, finances and
accounts of the City or any information Ambac Assurance may reasonably request
regarding the security for the Bonds with appropriate officers of the City. The Bond
Registrar and the City will permit Ambac Assurance to have access to and to make copies
of all books and records relating to the Bonds at any reasonable time.
(4) Ambac Assurance shall have the right to direct an accounting at the City's
expense, and the City's failure to comply with such direction within thirty (30) days after
receipt of written notice of the direction from Ambac Assurance shall be deemed as a
default hereunder; provided, however, that if compliance cannot occur within such
period, then such period will be extended so long as compliance is begun within such
period and diligently pursued, but only if such extension would not materially adversely
affect the interests of any registered owner of the Bonds.
(5) Notwithstanding any other provision of this Resolution, the Bond
Registrar or the City, as applicable, shall immediately notify Ambac Assurance if at any
time there are insufficient moneys to make any payments of principal of and/or interest
on the Bonds as required and immediately upon the occurrence of any default under this
Resolution.
(F) Defeasance of Bonds. In the event that the principal and/or interest due on the
Bonds shall be paid by Ambac Assurance pursuant to the Bond Insurance Policy, the Bonds shall
remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered
paid by the City, and the assignment and pledge created under this Resolution and all covenants,
agreements and other obligations of the City to the registered owners shall continue to exist and
shall run to the benefit of Ambac Assurance, and Ambac Assurance shall be subrogated to the
rights of such registered owners.
(G) Payment Procedure Pursuant to the Bond Insurance Policy.
(1) At least one (1) day prior to all Interest Payment Dates the Bond Registrar
will determine whether there will be sufficient funds in the Funds and Accounts
30
Miami/16317.4
established under the Resolution to pay the principal of or interest on the Bonds on such
Interest Payment Date. If the Bond Registrar determines that there will be insufficient
funds in such Funds or Accounts, the Bond Registrar shall so notify Ambac Assurance.
Such notice shall specify the amount of the anticipated deficiency, the Bonds to which
such deficiency is applicable and whether such Bonds will be deficient as to principal or
interest, or both. If the Bond Registrar has not so notified Ambac Assurance at least one
(1) day prior to an Interest Payment Date, Ambac Assurance will make payments of
principal or interest due on the Bonds on or before the first (1 st) day next following the
date on which Ambac Assurance shall have received notice of nonpayment from the
Bond Registrar.
(2) The Bond Registrar and the City, as applicable, shall, after the giving of
notice to Ambac Assurance as provided in (1) above, make available to Ambac
Assurance and, at Ambac Assurance's direction, to The Bank of New York, in New
York, New York, as insurance trustee for Ambac Assurance or any successor insurance
trustee (the "Insurance Trustee"), the registration books maintained by the Bond
Registrar, and all records relating to the Funds and Accounts maintained under this
Resolution.
(3) The Bond Registrar shall provide Ambac Assurance and the Insurance
Trustee with a list of registered owners of Bonds entitled to receive principal or interest
payments from Ambac Assurance under the terms of the Bond Insurance Policy, and the
Bond Registrar shall make arrangements with the Insurance Trustee (i) to mail checks or
drafts to the registered owners of Bonds entitled to receive full or partial interest
payments from Ambac Assurance and (ii) to pay principal upon Bonds surrendered to the
Insurance Trustee by the registered owners of Bonds entitled to receive full or partial
principal payments from Ambac Assurance.
(4) The Bond Registrar shall, at the time it provides notice to Ambac
Assurance pursuant to (1) above, notify registered owners of Bonds entitled to receive the
payment of principal or interest thereon from Ambac Assurance (i) as to the fact of such
entitlement, (ii) that Ambac Assurance will remit to them all or a part of the interest
payments next coming due upon proof of Bondholder entitlement to interest payments
and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an
appropriate assignment of the registered owner's right to payment, (iii) that should they
be entitled to receive full payment of principal from Ambac Assurance, they must
surrender their Bonds (along with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee to permit ownership of such Bonds to be registered
in the name of Ambac Assurance) for payment to the Insurance Trustee, and not the Bond
Registrar and (iv) that should they be entitled to receive partial payment of principal from
Ambac Assurance, they must surrender their Bonds for payment thereon first to the Bond
Registrar who shall note on such Bonds the portion of the principal paid by the Bond
Registrar and then, along with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the
unpaid portion of principal.
Miami/16317.4
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(5) In the event that the Bond Registrar has notice that any payment of
principal of or interest on a Bond which has become Due for Payment (as defined in the
Bond Insurance Policy) and which is made to a Bondholder by or on behalf of the City
has been deemed a preferential transfer and theretofore recovered from its registered
owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a court having competent jurisdiction,
the Bond Registrar shall, at the time Ambac Assurance is notified pursuant to (1) above,
notify all registered owners that in the event that any registered owner's payment is so
recovered, such registered owner will be entitled to payment from Ambac Assurance to
the extent of such recovery if sufficient funds are not otherwise available, and the Bond
Registrar shall furnish to Ambac Assurance its records evidencing the payments of
principal of and interest on the Bonds which have been made by the Bond Registrar and
subsequently recovered from registered owners and the dates on which such payments
were made.
(6) In addition to those rights granted Ambac Assurance under this
Resolution, Ambac Assurance shall, to the extent it makes payment of principal of or
interest on Bonds, become subrogated to the rights of the recipients of such payments in
accordance with the terms of the Bond Insurance Policy, and to evidence such
subrogation (i) in the case of subrogation as to claims for past due interest, the Bond
Registrar shall note Ambac Assurance's rights as subrogee on the registration books
maintained by the Bond Registrar upon receipt from Ambac Assurance of proof of the
payment of interest thereon to the registered owners of the Bonds, and (ii) in the case of
subrogation as to claims for past due principal, the Bond Registrar shall note Ambac
Assurance's rights as subrogee on the registration books maintained by the Bond
Registrar upon surrender of the Bonds by the registered owners thereof together with
proof of the payment of principal thereof.
(H) Payment Procedure Pursuant to the Reserve Account Surety Bond.
(1) In the event and to the extent that moneys on deposit in the Sinking Fund,
including all amounts on deposit in and credited to the Debt Service Reserve Account in
excess of the amount of the Reserve Account Surety Bond, are insufficient to pay the
amount of principal and interest coming due on the Bonds, then upon the later of: (i) one
(1) day after receipt by the General Counsel of Ambac Assurance of a demand for
payment in the form attached to the Reserve Account Surety Bond as Attachment 1 (the
"Demand for Payment"), duly executed, certifying that payment due under this
Resolution has not been made; or (ii) the payment date of the Bonds as specified in the
Demand for Payment presented to the General Counsel of Ambac Assurance, Ambac
Assurance will make a deposit of funds in an account with the Bond Registrar, sufficient
for the payment to the Bond Registrar, of amounts which are then due to the Bond
Registrar under this Resolution (as specified in the Demand for Payment) up to but not in
excess of the Surety Bond Coverage, as defined in the Reserve Account Surety Bond;
provided, however, that in the event that the amount on deposit in, or credited to, the
Debt Service Reserve Account, in addition to the amount available under the Reserve
Account Surety Bond, includes amounts available under any other Reserve Account
Insurance Policy or Reserve Account Letter of Credit (the "Additional Funding
32
Miami/16317.4
Instrument"), draws on the Reserve Account Surety Bond and the Additional Funding
Instrument shall be made on a pro rata basis to fund the insufficiency.
(2) The City shall, after the submission to Ambac Assurance of the Demand
for Payment as provided in (1) above, make available to Ambac Assurance all records
relating to the Funds and Accounts maintained under this Resolution.
(3) The Bond Registrar shall, upon receipt of moneys received from the draw
on the Reserve Account Surety Bond, as specified in the Demand for Payment, cause the
City to credit the Debt Service Reserve Account to the extent of moneys received
pursuant to such Demand.
(4) The Debt Service Reserve Account shall be replenished under the
provisions of Section 304(B)(3) of this Resolution in the following priority: (i) principal
and interest on the Reserve Account Surety Bond, as provided under the Guaranty
Agreement, and on any Additional Funding Instrument shall be paid from Non Ad-
Valorem Funds appropriated in each Fiscal Year under the provisions of Section 304(A)
of this Resolution on a pro rata basis and (ii) after all such amounts are paid in full,
amounts necessary to fund the Debt Service Reserve Account to the required level, after
taking into account the amounts available under the Reserve Account Surety Bond and
any Additional Funding Instrument, shall be deposited from next available Non Ad-
Valorem Funds appropriated in each Fiscal Year under the provisions of Section 304(A)
of this Resolution. For purposes of clause (ii) of the first paragraph of such Section
304(A) of this Resolution, the payment of principal and interest on the Reserve Account
Surety Bond, as provided under the Guaranty Agreement, and on any Additional Funding
Instrument during any Fiscal Year shall be included in the computation of "any deposits
required to be made into the Debt Service Reserve Account during such Fiscal Year."
(I) Interested Parties. To the extent that this Resolution confers upon or gives or
grants to Ambac Assurance any right, remedy or claim thereunder, Ambac Assurance is hereby
explicitly recognized as being a third-party beneficiary hereunder and may enforce any such
right, remedy or claim conferred, given or granted hereunder.
[END OF ARTICLE III]
Miami/16317.4
33
ARTICLE IV
CONCERNING THE BOND REGISTRAR
SECTION 401. APPOINTMENT AND ACCEPTANCE OF DUTIES. The Bond
Registrar shall signify its acceptance of the duties and obligations imposed upon it by this
Resolution by executing and delivering to the City a written acceptance thereof.
SECTION 402. RESPONSIBILITIES OF BOND REGISTRAR. The recitals of
facts contained herein and in the Bonds shall be taken as the statements of the City and the Bond
Registrar assumes no responsibility for the correctness of the same. The Bond Registrar makes
no representation as to the validity or sufficiency of this Resolution or of any Bonds issued
thereunder or as to the security afforded by this Resolution, and the Bond Registrar shall not
incur any liability in respect thereof. The Bond Registrar shall, however, be responsible for its
representation contained in its certificate of authentication of the Bonds. The Bond Registrar
shall be under no responsibility or duty with respect to the application of any moneys paid by the
Bond Registrar in accordance with the provisions of this Resolution to or upon the order of the
City. The Bond Registrar shall be under no obligation or duty to perform any act which would
involve it in expense or liability or to institute or defend any suit in respect thereof, or to advance
any of its own moneys, unless properly indemnified. The Bond Registrar shall not be liable in
connection with the performance of its duties hereunder except for its own negligence,
misconduct or default.
SECTION 403. EVIDENCE ON WHICH BOND REGISTRAR MAY ACT.
(a) The Bond Registrar, upon receipt of any notice, resolution, request, consent,
order, certificate, report, opinion, bond, or other paper or document furnished to it pursuant to
any provision of this Resolution, shall examine such instrument to determine whether it
conforms to the requirements of this Resolution and shall be protected in acting upon any such
instrument believed by it to be genuine and to have been signed or presented by the proper party
or parties. The Bond Registrar may reasonably consult with counsel, who may or may not be
counsel to the City, and the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered by it under this Resolution in good faith and
in accordance therewith.
(b) Whenever the Bond Registrar shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering any action under this Resolution, such matter
(unless other evidence in respect thereof be therein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate of the Mayor, City Manager or Chief
Financial Officer, and such certificate shall be full warrant for any action taken or suffered in
good faith under the provisions of this Resolution upon the faith thereof; but in its discretion the
Bond Registrar may in lieu thereof accept other evidence of such fact or matter or may require
such further or additional evidence as it may deem reasonable.
(c) Except as otherwise expressly provided in this Resolution, any request, order,
notice or other direction required or permitted to be furnished pursuant to any provision hereof
Miami/16317.4
34
by the City to the Bond Registrar shall be sufficiently executed in the name of the City by the
Mayor, City Manager or Chief Financial Officer.
SECTION 404. COMPENSATION. The City may agree with the Bond Registrar to
pay to the Bond Registrar from time to time reasonable compensation for all services rendered
under this Resolution, and also all reasonable expenses, charges, counsel fees and other
disbursements, including those of its attorneys, agents and employees, incurred in and about the
performance of their powers and duties under this Resolution. The City may also agree with the
Bond Registrar to indemnify the Bond Registrar for any and all of its reasonable fees, costs and
expenses resulting from any claim, liability or the like incurred in and about the performance of
its powers and duties under this Resolution.
SECTION 405. CERTAIN PERMITTED ACTS. The Bond Registrar, individually
or otherwise, may become the owner of any Bonds, with the same rights it would have if it were
not a Fiduciary. To the extent permitted by law, the Bond Registrar may act as depositary for,
and permit any of its officers or directors to act as a member of, or in any other capacity with
respect to, any committee formed to protect the rights of Bondholders or to effect or aid in any
reorganization growing out of the enforcement of the Bonds or this Resolution, whether or not
any such committee shall represent the Holders of a majority in principal amount of the Bonds
then Outstanding.
SECTION 406. MERGER OR CONSOLIDATION. Any entity into which the
Bond Registrar may be merged or converted or with which it may be consolidated or any entity
resulting from any merger, conversion or consolidation to which it shall be a party or any entity
to which the Bond Registrar may sell or transfer all or substantially all of its business, provided
such entity shall be authorized by law to perform all duties imposed upon it by this Resolution,
shall be the successor to the Bond Registrar without the execution or filing of any paper or the
performance of any further act.
SECTION 407. ADOPTION OF AUTHENTICATION. In case any of the Bonds
contemplated to be issued under this Resolution shall have been authenticated but not delivered,
any successor Bond Registrar may adopt the certificate of authentication of any predecessor
Bond Registrar so authenticating such Bonds and deliver such Bonds so authenticated; and in
case any of the said Bonds shall not have been authenticated, any successor Bond Registrar may
authenticate such Bonds in the name of the predecessor Bond Registrar, or in the name of the
successor Bond Registrar, and in all such cases such certificate shall be fully effective.
SECTION 408. RESIGNATION OR REMOVAL OF BOND REGISTRAR AND
APPOINTMENT OF SUCCESSOR. The Bond Registrar may at any time resign and be
discharged of the duties and obligations created by this Resolution by giving at least 60 days'
written notice to the Bond Insurer, any Liquidity Facility Provider, the City, and any other
Fiduciaries. The Bond Registrar may be removed by the City at any time by an instrument filed
with the Bond Registrar, the Bond Insurer, any Liquidity Facility Provider and any other
Fiduciaries signed by the Mayor or the City Manager. Any successor Bond Registrar shall be
appointed by the City and shall be fully qualified to act in such capacity under the laws of the
State, be willing and able to accept the office on reasonable and customary terms and be
authorized by law to perform all the duties imposed upon it by this Resolution. The City shall
Miami/16317.4
35
notify the Bond Insurer, any Liquidity Facility Provider and any other Fiduciaries of the
appointment of any successor Bond Registrar. In the event of the resignation or removal of the
Bond Registrar, the Bond Registrar shall pay over, assign and deliver any moneys held by it as
Bond Registrar to its successor.
SECTION 409. VACANCY. If at any time hereafter the Bond Registrar shall resign,
be removed, be dissolved, or otherwise become incapable of acting, by bankruptcy or otherwise,
or if the bank, trust company or securities firm acting as Bond Registrar shall be taken over by
any governmental official, agency, department or board, the position of Bond Registrar shall
thereupon become vacant. If the position of Bond Registrar shall become vacant for any of the
foregoing reasons or for any other reasons, the City shall appoint a successor Bond Registrar.
If no appointment of a successor Bond Registrar shall be made pursuant to the foregoing
provisions of this Section, the Holder of any Bond Outstanding hereunder or any retiring Bond
Registrar may apply to any court of competent jurisdiction to appoint a successor Bond
Registrar. Such court may thereupon, after such notice, if any, as such court may deem proper
and prescribe, appoint a successor Bond Registrar.
[END OF ARTICLE IV]
36
Miami/16317.4
ARTICLE V
EXECUTION OF INSTRUMENTS BY BONDHOLDERS
AND PROOF OF OWNERSHIP OF BONDS
SECTION 501. PROOF OF EXECUTION OF DOCUMENTS AND OWNERSHIP.
(a) Any request, direction, consent or other instrument in writing required by this
Resolution to be signed or executed by Bondholders may be in any number of concurrent
instruments of similar tenor and may be signed or executed by such Bondholders in person or by
their attorneys or legal representatives appointed by an instrument in writing. Proof of the
execution of any such instrument and of the ownership of Bonds shall be sufficient for any
purpose of this Resolution and shall be conclusive in favor of the Fiduciaries with regard to any
action taken by it under such instrument if made in the following manner:
(1) The fact and date of the execution by any person of any such instrument
may be proved by the verification of any officer in any jurisdiction who, by the laws
thereof, has power to take affidavits within such jurisdiction, to the effect that such
instrument was subscribed and sworn to before him, or by an affidavit of a witness to
such execution. Where such execution is on behalf of a person other than an individual,
such verification shall also constitute sufficient approval of the authority of the signor
thereof.
(2) The ownership of Bonds shall be proved by the registration books required
to be maintained pursuant to the provisions of this Resolution.
Nothing contained in this Article shall be construed as limiting the Fiduciaries to such
proof, it being intended that the Fiduciaries may accept any other evidence of the matters herein
stated which it may deem sufficient.
(b) If the City shall solicit from the Holders any request, direction, consent or other
instrument in writing required or permitted by this Resolution to be signed or executed by the
Holders, the City may, at its option, fix in advance a record date for determination of Holders
entitled to give each request, direction, consent or other instrument, but the City shall have no
obligation to do so. If such a record date is fixed, such request, direction, consent or other
instrument may be given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Bonds have authorized or agreed or
consented to such request, direction, consent or other instrument, and for that purpose the Bonds
shall be computed as of such record date.
(c) Any request or consent of the Holder of any Bond shall bind every future Holder
of the same Bond in respect of anything done in pursuance of such request or consent.
[END OF ARTICLE V]
Miami/16317.4
37
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION601. MODIFICATION OR AMENDMENT. Except as otherwise
provided in the third paragraph hereof, no adverse material modification or amendment of this
Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made after
the issuance of any Bonds without the consent in writing of the Holders of more than fifty per
centum (50%) in aggregate principal amount of the Bonds then Outstanding; provided, however,
that no modification or amendment shall permit a change in the maturity of such Bonds or a
reduction in the rate of interest thereon, or affect the promise of the City to pay the principal of
and interest on the Bonds, as the same mature or become due, from the Pledged Funds or the
Non-Ad Valorem Funds as provided in Section 304(A) hereof, or reduce the percentage of
Holders of Bonds required above for such modification or amendment, without the consent of
the Holders of all the Bonds.
For the purposes of this Section 601, so long as the Bond Insurance Policy is in effect and
the Bond Insurer has not defaulted in its obligations thereunder, the Bond Insurer shall be
deemed the sole Holder of the Bonds.
This Resolution may be amended, changed, modified and altered without the consent of
the Holders of Bonds or the Bond Insurer or any Liquidity Facility Provider:
(a) to cure any ambiguity or formal defect or omission in this Resolution or
supplemental resolutions or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions contained herein; or
(b) to grant to or confer upon the Bondholders any additional rights, remedies,
powers, authority or security that may lawfully be granted to or conferred upon the
Bondholders; or
(c) to add to the conditions, limitations and restrictions on the issuance of
Bonds under the provisions of this Resolution, other conditions, limitations and
restrictions thereafter to be observed; or
(d) to add to the covenants and agreements of the City in this Resolution other
covenants and agreements thereafter to be observed by the City or to surrender any right
or power herein reserved to or conferred upon the City; or
(e) to qualify the Bonds or any of the Bonds for registration under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended;
or
(f) to qualify this Resolution as an "indenture" under the Trust Indenture Act
of 1939, as amended; or
(g) to make such changes as may be necessary to adjust the terms hereof so as
to facilitate the issuance of Variable Rate Bonds or Put Bonds; or
38
Miami/16317.4
(h)
bonds; or
to permit Bonds to be issued in book entry form with or without physical
(i) to make such changes as may be necessary for the Bond Insurance Policy,
a Liquidity Facility, a Reserve Account Insurance Policy or a Reserve Account Letter of
Credit deposited in the Debt Service Reserve Account or any Hedge Agreement entered
into in connection with the issuance of the Bonds.
If at any time the City shall so request the Bond Registrar, the Bond Registrar shall cause
a notice of a proposed supplemental resolution requiring the consent of Bondholders to be
mailed, postage prepaid, to all Holders of Bonds then Outstanding at their addresses as they
appear on the registration books. Such notice shall briefly set forth the nature of the proposed
supplemental resolution and shall state that a copy thereof is on file at the designated corporate
trust office of the Bond Registrar for inspection by all Bondholders. The Bond Registrar shall
not, however, be subject to any liability to any Bondholder by reason of its failure to mail the
notice required by this Section, and any such failure shall not affect the validity of such
supplemental resolution when consented to or approved as provided in this Section.
Whenever, at any time after the date of the mailing of such notice, the City shall have
received an instrument or instruments purporting to be executed by the Holders of more than
fifty per centum (50%) in aggregate principal amount of the Bonds then Outstanding, which
instrument or instruments shall refer to the proposed supplemental resolutions described in such
notice and shall specifically consent to and approve the adoption thereof, and the City shall file
with the City Clerk a certificate signed by the Mayor that the Holders of such required
percentage of Bonds have filed such consents, the City may adopt such supplemental resolution
in substantially such form without liability or responsibility to any Holder of any Bond, whether
or not such Holder shall have consented thereto. It shall not be necessary for the consent of the
Holders to approve the particular form of any proposed supplemental resolution, but it shall be
sufficient if such consent shall approve the substance thereof.
If the Holders of more than fifty per centum (50%) in aggregate principal amount of the
Bonds Outstanding at the time of the execution of such supplemental resolution shall have
consented to and approved the adoption thereof as herein provided, no Holder shall have any
right to object to the adoption of such supplemental resolution, or to object to any of the terms
and provisions therein contained, or the operation thereof, or in any manner to question the
propriety of the adoption thereof, or to enjoin or restrain the City from adopting the same or from
taking any action pursuant to the provisions thereof.
SECTION 602. SEVERABILITY OF INVALID PROVISIONS. If any one or more
of the covenants, agreements or provisions of this Resolution should be held contrary to any
express provision of law or contrary to the policy of express law, though not expressly
prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such
covenants, agreements or provisions shall be null and void and shall be deemed separate from the
remaining covenants, agreements or provisions, and shall in no way affect the validity of any of
the other provisions of this Resolution or of the Bonds issued hereunder.
Miami/16317.4
39
SECTION 603. UNCLAIMED MONEY. Notwithstanding any provisions of this
Resolution, any money held by the Bond Registrar for the payment of the principal or
redemption price of, or interest on, any Bonds and remaining unclaimed for five (5) years after
the principal of all of the Bonds has become due and payable (whether at maturity or upon call
for redemption), if such money were so held at such date, or five (5) years after the date of
deposit of such money if deposited after such date when all of the Bonds became due and
payable, shall be repaid to the City free from the provisions of this Resolution, and all liability of
the Bond Registrar with respect to such money shall thereupon cease; provided, however, that
before the repayment of such money to the City as aforesaid, the City shall first publish at least
once in a financial newspaper or journal published and of general circulation in New York, New
York, a notice, in such form as may be deemed appropriate by the City with respect to the Bonds
so payable and not presented, and with respect to the provisions relating to the repayment to the
City of the money held for the payment thereof.
SECTION 604. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND
HOLIDAYS. In any case where the date of maturity of interest on or principal of the Bonds or
the date fixed for redemption of any Bonds shall be a Saturday, Sunday or a day on which the
Bond Registrar is required, or authorized or not prohibited, by law (including executive orders)
to close and is closed, then payment of such interest, principal or redemption price, as applicable,
need not be paid by the Bond Registrar on such date but may be paid on the next succeeding
business day on which the Bond Registrar is open for business with the same force and effect as
if paid on the date of maturity or the date fixed for redemption, and no interest shall accrue for
the period after such date of maturity.
SECTION 605. CONTROLLING LAW; MEMBERS OF COMMISSION NOT
LIABLE. The provisions of this Resolution shall be governed by, and interpreted in accordance
with, the laws of the State. All covenants, stipulations, obligations and agreements of the City
contained in this Resolution shall be deemed to be covenants, stipulations, obligations and
agreements of the City to the full extent authorized by the Act and provided by the Constitution
and laws of the State. No covenant, stipulation, obligation or agreement contained herein shall
be deemed to be a covenant, stipulation, obligation or agreement of any present or future
member, agent or employee of the Commission or the City in his individual capacity, and neither
the members of the Commission nor any official executing the Bonds shall be liable personally
on the Bonds or this Resolution or shall be subject to any personal liability or accountability by
reason of the issuance or the execution of such Bonds.
SECTION 606. FURTHER AUTHORIZATIONS. The Mayor, the City Clerk, the
City Manager, the Chief Financial Officer, the City Attorney and such other officers, employees
and staff of the City as may be designated by the Mayor and the City Manager or either of them
are each designated as agents of the City in connection with the issuance and delivery of the
Bonds and are authorized and empowered, collectively or individually, to take all action and
steps and to execute all instruments, documents and contracts on behalf of the City, that are
necessary or desirable in connection with the execution and delivery of the Bonds, and which are
not inconsistent with the terms and provisions of this Resolution.
SECTION607. HEADINGS FOR CONVENIENCE ONLY. Any headings
preceding the texts of the several articles and sections hereof shall be solely for convenience of
Miami/16317.4
40
reference and shall not constitute a part of this Resolution, nor shall they affect its meaning,
construction or effect.
SECTION 608. TIME OF TAKING EFFECT.
immediately upon its adoption.
PASSED AND ADOPTED this 6th day of
(SEAL)
Attest:
This Resolution shall take effect
,2005.
Mayor
Dav±d Dermer
City Clerk
Robert Parcher
APIsflOVED A~ TO
FORM & LANGUAGE
& FOR EXECUTION
Miami/16317.4
41
CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution of the Mayor and City Commission of the City of Miami Beach, Florida authorizing the issuance of not to
exceed $60,000,000 in aggregate principal amount of City of Miami Beach, Florida Taxable Special Obligation
Refunding Bonds (Pension Funding Project), Series 2005, for the principal purposes of, together with other available
moneys, (i) refunding certain outstanding City Of Miami Beach, Florida Taxable Special Obligation Bonds (Pension
Funding Project), Series 1994, and (ii) making any required termination payment with respect to a hedge agreement;
providing for the rights and security of all holders of bonds issued pursuant to this resolution; ...........................
Issue:
IShall the City Commission authorize the issue of not to exceed $60,000,000 in aggregate principal amount of City of
Miami Beach, Florida Taxable Special Obligation Refunding Bonds (Pension Funding Project), Series 2005.
Item Summary/Recommendation:
The Administration recommends the City Commission adopt the proposed Resolution which authorizes the City of
Miami Beach to: adopt an authorizing and delegating resolution which authorizes the City to issue refunding bonds
(whether or not Morgan Stanley Capital Sources Inc. exercises its option under the Swap) and, if Morgan Stanley
exercises their option, delegates to the appropriate City official, after consultation with the Chief Financial Officer, and
RBC Dain Rauscher as Financial Advisor, and Squire Sanders & Dempsey L.L.P as Bond Counsel, authorization to
determine in August, 2005 whether to maintain the Swap and issue variable rate bonds or terminate the Swap and
issue fixed rate bonds.
On February 1, 1995 the City of Miami Beach issued $57,710,000 of Taxable Special Obligation Bonds (Pension
Funding Project), Series 1994. The bonds were issued by the City for the purpose of providing the required funding:
to discharge the Unfunded Actuarial Accrued Liabilities as of October 1, 1993 with respect to the Pension Plans
($56,081,416): Fire and Police Base and Supplemental Plans = $50,520,480; Unclassified Employees' and Elected
Officials' Plan = $5,560,936; and to pay the cost of issuing the bonds.
Advisory Board Recommendation:
Finance and Citywide Projects Commission Committee - May 24, 2005 - approved the City Manager's
recommendation to adopt an authorizing and delegating resolution which authorizes the Administration, in concert
with the City's Financial Advisor, RBC Dain Rauscher, and Bond Counsel, Squire Sanders & Dempsey L.L.P. to
determine whether to: issue refunding bonds, at a fixed or variable rate depending on market conditions, if Morgan
Stanley does not exercise its option under the Swap Agreement; or, if Morgan Stanley exercises its option under the
Swap Agreement: uphold the Swap and issue variable rate bonds; or, terminate the Swap and issue fixed rate bonds.
Financial Information:
Source of Amount Account Approved
Funds: 1 $60,000,000.00 Special Obligation Refunding Bonds
Series 2005 (Pension Funding Project)
2
, 4
Finance Dept. Total $60,000,0O0.00
City Clerk's Office Legislative Tracking:
IPatricia D. Walker, Chief Financial Officer
Slain-Offs:
Department Director AsSistant City Manager City Manager
PDW
PDW
F:\fina\$CIP\$MAN~vlanuel\Debt Service~Pension Bonds\Pension 05 Summ.doc
AGENDAITEM
DATE
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.miamibeachfl.gov
To:
From:
Subject:
COMMISSION MEMORANDUM
Mayor David Dermer and Date: July 6, 2005
Members of the City Commission
Jorge M. Gonzalez .¢.,,~
City Manager
A RESOLUTION OP'THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT TO
EXCEED $60,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF
MIAMI BEACH, FLORIDA TAXABLE SPECIAL OBLIGATION REFUNDING
BONDS (PENSION FUNDING PROJECT), SERIES 2005, FOR THE
PRINCIPAL PURPOSES OF, TOGETHER WITH OTHER AVAILABLE
MONEYS: (i) REFUNDING CERTAIN OUTSTANDING CITY OF MIAMI
BEACH, FLORIDA TAXABLE SPECIAL OBLIGATION BONDS (PENSION
FUNDING PROJECT), SERIES lg94, AND (ii) MAKING ANY REQUIRED
TERMINATION PAYMENT WITH RESPECT TO A HEDGE AGREEMENT;
PROVIDING FOR THE RIGHTS AND SECURITY OF ALL HOLDERS OF
BONDS ISSUED PURSUANT TO THIS RESOLUTION; PROVIDING
CERTAIN DETAILS OF THE BONDS; DELEGATING OTHER DETAILS
AND MATFERS IN CONNECTION WITH THE ISSUANCE OF THE BONDS,
THE REFUNDING OF THE PRIOR BONDS TO BE REFUNDED AND THE
HEDGE AGREEMENT TO THE MAYOR, WITHIN THE LIMITATIONS AND
RESTRICTIONS STATED HEREIN; APPOINTING A BOND REGISTRAR;
AUTHORIZING A BOOK-ENTRY REGISTRATION SYSTEM FOR THE
BONDS; AUTHORIZING THE NEGOTIATED SALE AND AWARD BY THE
MAYOR OF THE BONDS TO THE UNDERWRITERS, WITHIN THE
LIMITATIONS AND RESTRICTIONS STATED HEREIN; APPROVING THE
FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A
BOND PURCHASE AGREEMENT; APPROVING THE FORM OF AND
DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND
OFFICIAL STATEMENT AND AUTHORIZING THE EXECUTION AND
DELIVERY OF THE OFFICIAL STATEMENT; COVENANTING TO
PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE
BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE
COMMISSION RULE 15c2-12 AND AUTHORIZING THE EXECUTION AND
DELIVERY OF A COMMITMENT WITH RESPECT THERETO;
AUTHORIZING THE REFUNDING, DEFEASANCE AND REDEMPTION OF
THE BONDS TO BE REFUNDED; APPROVING THE FORM OF AND
AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW
DEPOSIT AGREEMENT AND APPOINTING AN ESCROW AGENT;
APPROVING THE FORM OF AND, IF NECESSARY, AUTHORIZING THE
EXECUTION AND DELIVERY OF AN AUCTION AGENT AGREEMENT
AND THE APPOINTMENT OF AN AUCTION AGENT; CREATING
CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR THE
APPLICATION OF THE PROCEEDS OF THE BONDS; PROVIDING FORA
City Commission Memorandum
Pension Special Obligation Bonds, Series 2005
July 6, 2005
BOND INSURANCE POLICY FOR THE BONDS; PROVIDING FOR THE
DEPOSIT OF A RESERVE ACCOUNT INSURANCE POLICY TO THE
CREDIT OF THE DEBT SERVICE RESERVE ACCOUNT AND
APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND
DELIVERY OF A GUARANTY AGREEMENT WITH THE PROVIDER
THEREOF; PROVIDING COVENANTS FOR THE PROVIDER OF SUCH
CREDIT FACILITY AND RESERVE ACCOUNT INSURANCE POLICY;
PROVIDING FOR A SURETY BOND FOR THE HEDGE AGREEMENT IF
NOT TERMINATED OR ASSIGNED; AUTHORIZING OFFICERS AND
EMPLOYEES OF THE CITY TO TAKE ALL NECESSARY RELATED
ACTIONS; AND PROVIDING FOR AN EFFECTIVE DATE.
ADMINISTRATIVE RECOMMENDATION
Adopt the Resolution.
ANALYSIS
This resolution authorizes the City of Miami Beach to issue bonds to refund the City's
Taxable Special Obligation Bonds (Pension Funding Project), Series 1994 (whether or not
Morgan Stanley Capital Sources Inc. exercises its option under the Swap) and, if Morgan
Stanley exercises their option, delegates to the appropriate City official, after consultation
with the Chief Financial Officer and RBC Dain Rauscher as Financial Advisor, authorization
to determine in August whether to remain in the swap transaction and issue variable rate
bonds or terminate the Swap and issue fixed rate bonds. The resolution was drafted by
our Bond Counsel, Squire, Sanders & Dempsey L.L.P.
BACKGROUND
On February 1, 1995 the City of Miami Beach issued $57,710,000 of Taxable Special
Obligation Bonds (Pension Funding Project), Series 1994. The bonds were issued by the
City for the purpose of providing the required funding:
· To discharge the Unfunded Actuarial Accrued Liabilities as of October 1, 1993 with
respect to the Pension Plans ($56,081,416)
o Fire and Police Base and Supplemental Plans = $50,520,480
o Unclassified Employees' and Elected Officials' Plan = $5,560,936
· To pay the cost of issuing the bonds.
In March 1996 interest rates had declined by approximately one and one half percent and
in an effort to capture these savings, the City Commission approved the execution of a
transaction which allowed the City to: receive a payment of $1.4 million from Morgan
Stanley representing the present value savings from the reduction in interest rates as
though a traditional refunding of the Series 1994 Bonds had been accomplished; and,
obtain a bond insurance commitment if refunding bonds were issued in the future.
City Commission Memorandum
Pension Special Obligation Bonds, Series 2005
July 6, 2005
In exchange for this payment, the City contractually agreed to grant a one day option
(August 1, 2005) to Morgan Stanley that if exercised, could obligate the City to enter into
an interest rate swap agreement (the "Swap") and issue variable rate bonds on September
1,2005. The City can also choose to terminate the swap.on September, 2005 and make a
calculated termination payment to Morgan Stanley. If the Swap is exercised, Morgan
Stanley is also required to pay the City an additional sum of $1,567,615 (the "Swap
Exercise Fee") which should approximate the cost of issuance and the call premium for the
City to issue the bonds to refund the Series 1994 Bonds.
City's Current Position
Current market conditions make it highly likely that Morgan Stanley will exercise their
option on August 1,2005 and since the City Commission is in recess during the month of
August, the Administration is seeking authorization to take certain actions during August
and early September depending on the following foreseeable scenarios with respect to the
Swap Agreement:
· Option Expires Unexercised (this is a highly unlikely event)
If Morgan Stanley elects not to exercise its option, the City retains the original
payment of $1,400,000.
If current market conditions continue into August the City would refund the Series
1994 Bonds at rates of approximately 5% compared to the average rates on the
remaining outstanding Series 1994 Bonds of 8.58% and would achieve substantial
savings.
· Option is Exercised; Swap Becomes Effective; Refunding Accomplished with
Variable rate Bonds.
If Morgan Stanley elects to exercise its option, and the City determines that it is in
its best interests to remain in the Swap through maturity (December 1,2022), the
transaction must be completed with a variable rate refunding issue, with the City's
rate fixed throughout the Swap at 8.27%. Given market conditions on June 23,
2005 this action would reduce the original $1.4 million benefit by approximately
$100,000.
Variable rate bond interest rates are generally set periodically by a remarketing
agent or other agent. Pricing at each adjustment date reflects the interest rate
necessary to remarket all available bonds at par.
Variable rate bonds contain long maturities, full redemption flexibility and multiple
adjustment frequencies with daily, weekly or monthly adjustment periods being most
commonly used (quarterly, semiannual and annual also possible). Bonds would be
generally redeemable on any interest rate adjustment date.
City Commission Memorandum
Pension Special Obligation Bonds, Series 2005
July 6, 2005
Third-party liquidity support is generally required and investors have a demand
feature (a.k.a. the "put" option), unless the bonds are issued as auction rate
securities which typically require only 1 to 7 days notice of intent to tender bonds to
the remarketing agent. Despite long maturities, investor demand feature permits
treatment as a short-term investment and facilitates purchases by money market
funds. Variable rate bonds must carry high short-term ratings to be eligible for
purchase by most money market funds.
In addition, the City may achieve greater or lesser savings during the life of the
Swap depending on the relationship of the variable rate paid on the bonds to the
variable rate received from Morgan Stanley pursuant to the Swap. Also the City
may be exposed to liquidity facility renewal risk and counterparty risk.
· Option is Exercised; Swap is Terminated; Refunding Accomplished with Fixed Rate
Bonds.
If Morgan Stanley elects to exercise its option, and the City determines that it is in
its best interests to terminate the Swap (to avoid the potential additional risks and
costs) the City would sell fixed rate taxable refunding bonds, using the proceeds to
refund the Series 1994 Bonds and to pay any termination payment due under the
Swap.
Under the assumption of termination, although expenses associated with a fixed
rate bond sale have been provided for in the Swap Exercise Fee, but the City would
need to issue sufficient fixed rate bonds to pay the termination payment due Morgan
Stanley, which as of June 23, 2005 we estimate to be approximately $12.5 million.
This transaction would reduce the original $1.4 million benefit by $355,000 but this
is subject to change based upon market conditions.
Under this scenario, the City's resulting debt payment remains essentially
unchanged relative to the Series 1994 debt service; however, the City eliminates
interest rate, counterparty and liquidity facility renewal risk.
FINANCE AND CITYWIDE PROJECTS COMMITTEE RECOMMENDATION
On May 24, 2005 the Finance and Citywide Projects Commission Committee approved the
City Manager's recommendation to adopt an authorizing and delegating resolution
prepared by Bond Counsel, Squire Sanders & Dempsey L.L.P. which authorizes the
Administration, in concert with the Chief Financial Officer and the City's Financial Advisor,
RBC Dain Rauscher, to take all necessary actions to:
· Issue refunding bonds, at a fixed or variable rate depending on market conditions,
if Morgan Stanley does not exercise its option under the Swap Agreement; or,
City Commission Memorandum
Pension Special Obligation Bonds, Series 2005
July 6, 2005
If Morgan Stanley exercises its option under the Swap Agreement:
o Maintain the Swap and issue variable rate bonds; or,
o Terminate the Swap and issue fixed rate bonds