The ordinance authorizes the City of Lauderdale Lakes to refinance an existing $2,545,521 promissory note held by SunTrust Bank at a more favorable interest rate. The refinanced note would extend the term for 5 years, lower the interest rate from the current 4.19% to either 3.75% or 3.25% depending on the city's budget, and include quarterly mortgage-style payments. Revenue to pay the note would continue to come from stormwater utility fees and a pledge of non-ad valorem revenues. Staff recommends approval to lower borrowing costs in line with the city's financial plan.
The ordinance authorizes the City of Lauderdale Lakes to refinance an existing $2,545,521 promissory note held by SunTrust Bank at a more favorable interest rate. The refinanced note would extend the term for 5 years, lower the interest rate from the current 4.19% to either 3.75% or 3.25% depending on the city's budget, and include quarterly mortgage-style payments. Revenue to pay the note would continue to come from stormwater utility fees and a pledge of non-ad valorem revenues. Staff recommends approval to lower borrowing costs in line with the city's financial plan.
The ordinance authorizes the City of Lauderdale Lakes to refinance an existing $2,545,521 promissory note held by SunTrust Bank at a more favorable interest rate. The refinanced note would extend the term for 5 years, lower the interest rate from the current 4.19% to either 3.75% or 3.25% depending on the city's budget, and include quarterly mortgage-style payments. Revenue to pay the note would continue to come from stormwater utility fees and a pledge of non-ad valorem revenues. Staff recommends approval to lower borrowing costs in line with the city's financial plan.
The ordinance authorizes the City of Lauderdale Lakes to refinance an existing $2,545,521 promissory note held by SunTrust Bank at a more favorable interest rate. The refinanced note would extend the term for 5 years, lower the interest rate from the current 4.19% to either 3.75% or 3.25% depending on the city's budget, and include quarterly mortgage-style payments. Revenue to pay the note would continue to come from stormwater utility fees and a pledge of non-ad valorem revenues. Staff recommends approval to lower borrowing costs in line with the city's financial plan.
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Special Commission Meeting-August 21, 2012
CITY OF LAUDERDALE LAKES
Agenda Cover Page Workshop: 0 Fiscal Impact: [gl Yes 0 No ContractRequirement [gl Yes D No 0 Public Hearing [gl Ordinance [gl 1 ;t Reading Title 0 Quasi-Judicial 0 Resolution 0 2nd Reading Page 2 of7 7. A
ORDINANCE #2012-14 AUTHORIZING THE REFINANCING AND BORROWING OF CERTAIN MONIES FROM SUNTRUST BANK, EVIDENCED BY THE CITY'S PROMISSORY NOTE, SERIES 2012, IN AN AMOUNT NOT TO EXCEED $2,545,521 Summary This Ordinance provides authorization to execute the refinancing of the existing Promissory Note that is held by Sun Trust Bank. The City of Lauderdale Lakes seeks to refinance and refund the existing SunTrust Promissory Note, Series 2012, in an amount not to exceed $2,545,521, as negotiated in the refinancing proposal. The SunTrust Promissory Note will be secured by a pledge of a portion of the City's stormwater utility fees and by a covenant to budget and appropriate non-ad valorem revenues. Staff Recommendation . Staff recommends approval of the refi9-ancing and borrowing of monies from SunTrust Bank which is consistent with the City's Adopted Five Year Financial Plan. Background: As part of the City of Lauderdale Lakes' adopted Five Year Financial Plan, the City seeks to refinance its existing SunTrust Promissory Note which has a current 4.19% interest rate and a balloon payment that is due October 1, 2013 (in Fiscal Year 2014). City Staff believes that it is fiJCally-prudenU9 refinance the Note and realize more favorable terms and conditions before the - To accomplish the goal of refmancing the SunTrust Promissory Note, the City of Lauderdale Lakes presented a refmancing request to SunTrust Bank for consideration and retained the law firm of Weiss Serota Helfman Pastoriza Cole and Boniske, P.L. to serve as bond counsel for the loan refinancing transaction. SunTrust Representatives and City Officials had numerous meetings to discuss the rates, terms, and conditions for refinancing the City's existing SunTrust Promissory Note. In the end, SunTrust Representatives and City Officials agreed on a mutually beneficial refinancing proposal. City Bond Counsel reviewed the modified SunTrust Promissory Note and determined its validity and security. City Bond Counsel and the City Attorney worked closely with SunTrust Bank Representatives in preparing the required ordinances and resolutions for City Commission consideration. In summary, the modified SunTrust Promissory Note refinancing will accomplish the following. Page 3 of7 Special Commission Meeting-August 21, 2012 1. The existing Slll1Trust Promissory Note will be refmanced, refunded, and extended for five (5) years, commencing on October 1, 2012 and maturing on October 1, 2017. ---? 2. The current interest rate for the SunTrust Promissory Note The rate and terms for the existing SunTrust Promissory Note were mo ed in favor and support of the City. The interest rate will remain the commencing on December 1, 2012 with an automatic interest rate reduction when the City achieYes a balanced budge.tat the close of The do\\nward rate adjustment schedule iS" as follows: The first adjusted rate is 3. 75% per annum; the second adjusted rate is 3.25% per annum; and future adjusted rates would be variable equal to one-month LIBOR plus 3.0 per annum and never exceed 3.25% per annum. 3. The new SunTrust Promissory Note will include a mortgage style payment on a quarterly basis for best practices in municipal budgeting. The purpose of the agenda item, (including the ordinance and a separate resolution that will be presented at Meeting), will serve to authorize the refinancing and borrowing of monies primarily for capital improvement projects and acquisition. Staff is recommending that the City Commission approve both the ordinance and the forthcoming resolution to refinance the existing Sun Trust Promissory Note. The existing SunTrust Promissory Note will be refinanced and refunded through the issuance of a new SunTrust Promissory Note, Series 2012, in an amount not to exceed $2,545,521, as negotiated in the refinancing proposal. The new Sun Trust Promissory Note will be secured by a proportional pledge of the City' s stormwater utility fees and a covenant to budget and appropriate of non-ad valorem revenues of the City. The pledge of revenues is in harmony with how the City has preyiously processed the debt service for the existing SunTrust Promissory Note in prior years. Under the existing Sun Trust Promissmy Note, the Stormwater Fund pays 62 perceg_t of the debt
service relating to previous stormwater capital projects. The remaining aebt service is paid by the 0 In summary, the existing SunTrust Promissory Note was secured and paid through V\ an annual government principal payment (i.e. General Fund) and an annual business principal ( ('___ payment (i.e. Stormwater Fund). Initially, staff proposed that the cost for the SunTrust Promissory Note refinancing Oegal fees, bank fees, etc.) be paid out of the fmancial transaction. However, the City will cover these costs separate and apart from the financial transaction. The cost will be borne proportionally from three (3) City Funds: General Fund, Stormwater Flllld and Fire...R.escue Fund, based upon the direct relationship of costs for the capital improvements and acquisitions in the original SunTrust Promissory Note. ARTICLE Ill. - GOVERNMENT OF THE CITY Page 1 of 1 Section 3.17. - Ordinances and resolutions. "Ordinance means an official, legislative action of the city commission which action is a regulation of general and permanent nature and enforceable as a local law. A "resolution is an expression of the city commission on matters of official concern, opinion or administration, of a temporary character, or a provision for the disposition of a particular item of the administrative business of the governing body. (1) Form. Each ordinance or resolution shall be introduced in writing and shall embrace but one subject and matters properly connected therewith. The subject shall be clearly stated in the title. No ordinance shall be revised or amended by reference to its title only. Ordinances to revise or amend shall set out in full the revised or amended act, section, subsection or paragraph of a section or subsection. (2) Procedure. The proposed ordinance shall be read in full on the first reading, and by title or in full on the second reading on at least two (2) separate dates, at either regular or special meetings of the city commission; provided, however, upon the affirmative vote of five (5) members of the city commission, the necessity that the ordinance be read in full on the first reading may be waived. At least eight (8) days prior to the second at least once in a of general ---., .... enactment shall state the date, limeanap!ace or places within the city where such ptOpos&d:Otdmance-may be inspected by the public. Said notice shall also advise that interested parties may appear at the meeting and be heard with respect to the proposed ordinance. (3) Effective date. Each ordinance shall become effective on the date specified therein; provided that in the absence of such http:/ /library .municode.com/HTML/19971/level3/PTICH _PREAMBLE_ ARTillGOCI.html 8/17/2012
