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Backup Documents 11/15/2016 Item #11C 11C RESOLUTION 2016-2 5 E'CWS RESOLUTION 2016-0 2 A RESOLUTION AUTHORIZING THE CURRENT REFUNDING OF ALL OF THE COUNTY'S OUTSTANDING STATE REVOLVING FUND LOANS IN ORDER TO ACHIEVE DEBT SERVICE SAVINGS; AUTHORIZING THE ISSUANCE OF A NOT EXCEEDING $90,000,000 AGGREGATE PRINCIPAL AMOUNT OF COLLIER COUNTY WATER-SEWER DISTRICT WATER AND SEWER REFUNDING REVENUE NOTE (SUBORDINATE), SERIES 2016 IN ORDER TO EFFECT SUCH REFUNDING; AUTHORIZING A NEGOTIATED SALE OF SAID BOND PURSUANT TO THE PROPOSAL OF FLORIDA COMMUNITY BANK, N.A.; DELEGATING CERTAIN AUTHORITY TO THE CHAIRMAN IN CONNECTION WITH THE APPROVAL OF THE TERMS AND DETAILS OF SAID BOND; APPOINTING THE CLERK AS PAYING AGENT AND REGISTRAR FOR SAID BOND; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, ACTING AS THE EX-OFFICIO GOVERNING BOARD OF THE COLLIER COUNTY WATER-SEWER DISTRICT: SECTION 1. FINDINGS. It is hereby found and determined that: (A) On July 30, 1985, the Board of County Commissioners of Collier County, Florida (the "County"), acting as the ex-officio governing board (the "Governing Body") of the Collier County Water-Sewer District (the "Issuer") duly adopted Resolution No. CWS-85-5, as amended and restated by Resolution No. CWS-85-13 duly adopted on December 26, 1985, as amended and supplemented (collectively, the "Bond Resolution"), for the purposes described therein. (B) The County has previously incurred various loans under the State of Florida's State Revolving Fund Loan Program (the "SRF Loans") for the purpose of financing and refinancing certain capital improvements to the System (as defined in the Bond Resolution). (C) The Bond Resolution allows for the issuance of Subordinate Indebtedness, payable on a junior and subordinate basis with Bonds Outstanding (as such terms are defined in the Bond Resolution) under the Bond Resolution and any subsequently issued Additional Bonds, as defined in the Bond Resolution (collectively, the "Senior Bonds"), for the purpose of current refunding of all of the outstanding SRF Loans. 1 1 C (D) The Issuer deems it to be in its best interest to issue its Collier County Water-Sewer District Water and Sewer Refunding Revenue Note (Subordinate), Series 2016 (the "Series 2016 Note") for the principal purpose of currently refunding the SRF Loans in order to achieve net present value debt service savings for the Issuer, which Series 2016 Note shall be issued on a junior and subordinate basis in all respects to the Senior Bonds. (E) In response to a request for loan proposals distributed on behalf of the Issuer by the Issuer's financial advisor, Public Financial Management, Inc. (the "Financial Advisor"), to qualified financial institutions, Florida Community Bank, N.A. (including any successors and assigns thereof, the "Purchaser") submitted a proposal (the "Proposal") to the Issuer for the purchase of the Series 2016 Note which provides the Issuer with the most beneficial terms and provisions for refunding the SRF Loans. A copy of the Proposal is attached as Exhibit A hereto. (F) Due to the potential volatility of the market for tax-exempt obligations such as the Series 2016 Note and the complexity of the transactions relating to such Series 2016 Note, it is in the best interest of the Issuer to sell the Series 2016 Note by a negotiated sale to the Purchaser pursuant to the Proposal and the provisions hereof and of the Bond Resolution, rather than at a specified advertised date, thereby permitting the Issuer to obtain the best possible price, terms and interest rate for the Series 2016 Note. (G) The Issuer hereby certifies that it is current in all deposits into the various funds and accounts established by the Bond Resolution and all payments theretofore required to have been deposited or made by the Issuer under the provisions of the Bond Resolution have been deposited or made and the Issuer has complied with the covenants and agreements of the Bond Resolution and is not currently in default under the Bond Resolution. (H) The Series 2016 Note shall not be or constitute a general obligation or indebtedness of the Issuer as a "bond" within the meaning of any constitutional or statutory provision but shall be a special obligation of the Issuer, payable solely from and secured by a lien upon and pledge of the Pledged Funds (as defined in the Bond Resolution) which lien and pledge shall be junior and subordinate in all respect to the Senior Bonds. SECTION 2. DEFINITIONS. When used in this resolution, the terms defined in the Bond Resolution shall have the meanings therein stated, except as such definitions shall be hereinafter amended and defined. SECTION 3. AUTHORITY FOR THIS RESOLUTION. This resolution is adopted pursuant to the provisions of the Act. 2 11C SECTION 4. AUTHORIZATION OF THE CURRENT REFUNDING OF THE SRF LOANS; ACCEPTANCE OF PROPOSAL. (A) The Issuer hereby authorizes the current refunding of the SRF Loans for the purpose of achieving net present value debt service savings. (B) The Issuer hereby accepts the Proposal of the Purchaser, a copy of which is attached hereto as Exhibit A. SECTION 5. AUTHORIZATION AND DESCRIPTION OF THE SERIES 2016 NOTE. The Issuer hereby authorizes the issuance of a note in the principal amount of not exceeding $90,000,000 to be known as the "Collier County Water-Sewer District Water and Sewer Refunding Revenue Note (Subordinate), Series 2016" (or such other designation as the Chairman may determine), for the principal purpose of refunding, on a current basis, the SRF Loans. The specific principal amount of the Series 2016 Note to be issued pursuant to this resolution shall be determined by the Chairman, upon the advice of the Issuer's Financial Advisor, provided such principal amount shall not exceed $90,000,000. The Series 2016 Note shall be junior and subordinate in all respects as to lien on and source and security for payment from the Pledged Funds with the Senior Bonds. The Series 2016 Note shall be dated as of its date of issuance, or such other date as the Chairman may determine, shall be issued in the form of one fully registered note in the denomination of its outstanding principal amount. The Series 2016 Note shall bear interest from its dated date at a fixed interest rate of 1.80% per annum (the "Interest Rate"). The Interest Rate is subject to adjustment as provided in Sections 10 and 11 hereof. The Interest Rate shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest on the Series 2016 Note shall be payable semi-annually on January 1 and July 1 of each year (the "Interest Payment Dates"), commencing on January 1, 2017. The Series 2016 Note shall be issued as a single term note with a final maturity of July 1, 2029 and shall be subject to mandatory sinking fund redemption in such principal amounts commencing on July 1, 2017 and on each July 1 thereafter through the maturity date of the Series 2016 Note, as determined by the Chairman, upon the advice of the Issuer's Financial Advisor, and approved by the Purchaser prior to the issuance of the Series 2016 Note. The Series 2016 Note shall be sold on a negotiated basis to the Purchaser at a purchase price equal to 100% of the aggregate principal amount thereof. The Purchaser shall provide the Issuer with an executed Disclosure Letter and Truth-in-Bonding Statement as required by Section 218.385, Florida Statutes, prior to the issuance of the Series 2016 Note. The Interest Rate on the Series 2016 Note shall comply in all respects with Section 215.84, Florida Statutes. The Series 2016 Note shall be payable as to principal and interest by check or draft, bank wire transfer or direct debit of a deposit account of the Issuer or in such other manner as is agreed to between the Issuer and the holder of the Series 2016 Note in 3 1 1 C whose name the Series 2016 Note shall be registered on the registration books maintained by the Issuer as of the close of business on the fifteenth day (whether or not a business day) of the calendar month next preceding an Interest Payment Date; provided, that the registered owner of the Series 2016 Note shall present and surrender the Series 2016 Note to the Issuer within a reasonable period of time after the final payment of the principal of and interest on the Series 2016 Note has been made or shall otherwise provide evidence that such Series 2016 Note has been cancelled. Principal of and interest on the Series 2016 Note shall be payable in any coin or currency of the United States of America, which at the time of payment, are legal tender for the payment of public and private debts. The Series 2016 Note shall be substantially in the form set forth in Exhibit B hereto, with such changes, amendments, modifications, omissions and additions as may be approved by the Chairman. Execution of the Series 2016 Note by the Chairman shall be conclusive evidence of approval of any such changes. SECTION 6. SECURITY FOR THE SERIES 2016 NOTE; COVENANTS. (A) The Series 2016 Note shall not be or constitute a general obligation or indebtedness of the Issuer as a "bond" within the meaning of any constitutional or statutory provision, but shall be a special obligation of the Issuer, payable solely from and secured solely by a lien upon and pledge of the Pledged Funds, on a junior or subordinate basis in all respects to the Senior Bonds; provided, however, the Series 2016 Note shall not be secured in any manner by the Reserve Account. The Purchaser shall never have the right to compel the exercise of any ad valorem taxing power to pay such Series 2016 Note, or be entitled to payment of such Series 2016 Note from any moneys of the Issuer or the County except from the Pledged Funds. The Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal of or Redemption Price, if applicable, and interest on the Series 2016 Note, on a junior and subordinate basis to the Senior Bonds and subject to the application thereof for the purposes and on the conditions permitted by the Bond Resolution. (B) So long as any amounts are due and owing by the Issuer to the Purchaser with respect to the Series 2016 Note, all of the covenants of the Issuer set forth in Article V of the Bond Resolution shall inure to the benefit of the Purchaser and shall be considered incorporated herein by reference. SECTION 7. REDEMPTION PROVISIONS. (A) The Series 2016 Note may be redeemed in whole, or in part, on any date, with ten (10) days prior written notice to the Purchaser, by payment in an amount equal to the principal amount to be prepaid plus accrued interest thereon to the date of prepayment, without premium or penalty. Unless otherwise agreed by the Issuer and the Purchaser, any prepayment in part shall be applied to the then scheduled principal payments in inverse order. (B) The Issuer shall not be required to provide the Purchaser with any notice with respect to the payment of any scheduled principal payments. 4 11c SECTION 8. APPLICATION OF SERIES 2016 NOTE PROCEEDS. The proceeds derived from the sale of the Series 2016 Note shall be applied by the Issuer simultaneously with the delivery thereof as follows: (A) A sufficient amount of Series 2016 Note proceeds, together with other legally available moneys of the Issuer, shall be paid directly to the State of Florida on the date of issuance of the Series 2016 Note in order to prepay the SRF Loans in full. (B) A sufficient amount of the Series 2016 Note proceeds shall be applied to the payment of costs and expenses relating to the issuance of the Series 2016 Note. SECTION 9. APPOINTMENT OF PAYING AGENT AND REGISTRAR. The Clerk is hereby designated Registrar and Paying Agent for the Series 2016 Note. SECTION 10. DETERMINATION OF TAXABILITY. (A) In the event of a Determination of Taxability (as defined below), the Interest Rate on the Series 2016 Note shall be immediately increased to the Adjusted Rate (as defined in the immediately succeeding sentence); provided, however, such Adjusted Rate shall never exceed the maximum rate allowable by law. The "Adjusted Rate" shall mean that interest rate which is determined by dividing the then current Interest Rate by the remainder of one (1) minus the then maximum federal corporate income tax rate for the Purchaser. The Purchaser will provide the Issuer with evidence of such determination upon request. Immediately upon a Determination of Taxability, the Issuer agrees to pay to the Purchaser on demand, the Additional Amount. "Additional Amount" means (i) the difference between (a) interest on the Series 2016 Note for the period commencing on the date on which the interest on the Series 2016 Note (or portion thereof) is deemed to have lost its tax-exempt status and ending on the effective date of the adjustment of the Interest Rate to the Adjusted Rate (the "Taxable Period") at a rate per annum equal to the Adjusted Rate and (b) the aggregate amount of interest paid on the Series 2016 Note during the Taxable Period at the Interest Rate applicable to the Series 2016 Note prior to the adjustment to the Adjusted Rate, plus (ii) any penalties, fines, fees, costs and interest paid or payable by the Series 2016 Bondholder to the Internal Revenue Service by reason of such Determination of Taxability. This provision shall survive the repayment of the Series 2016 Note until such time as the federal statute of limitations under which the interest on the Series 2016 Note could be declared taxable under the Internal Revenue Code has expired. (B) For purposes of this Section 10, the term Determination of Taxability shall have the meaning ascribed thereto as follows: "Determination of Taxability" shall mean the circumstance of interest paid or payable on the Series 2016 Note becoming includable for federal income tax purposes in the gross income of the Purchaser as a consequence of any act or omission of the Issuer. 5 11C For all purposes of this definition, a Determination of Taxability will be deemed to occur on the first date as of which the interest on the Series 2016 Note is deemed includable in the gross income of the Purchaser. A Determination of Taxability shall not occur solely in the event such interest is taken into account in determining adjusted current earnings for the purpose of the alternative minimum income tax imposed on corporations. SECTION 11. DEFAULT. The Events of Default set forth in Section 7.01 of the Bond Resolution shall apply with respect to the Series 2016 Note. In addition, it shall be considered an Event of Default with respect to the Series 2016 Note: (A) to the extent any representation or warranty made in writing by or on behalf of the Issuer in this resolution, the Series 2016 Note or any documents executed in connection therewith shall prove to have been false or incorrect in any material respect on the date made or reaffirmed, or (B) if the Issuer fails to promptly remove any execution, garnishment or attachment of such consequence as will materially impair the Issuer's ability to carry out its obligations with respect to the Series 2016 Note. With respect to an Event of Default described in Section 7.01(c) of the Bond Resolution, written notice from the Purchaser of such an Event of Default shall be sufficient to trigger the 30-day cure period described therein. After the occurrence of a payment default with respect to the Series 2016 Note, the Interest Rate shall adjust to a rate equal to the lesser of(a) the maximum rate allowed under applicable law, or (b) the Purchaser's prime lending rate as established from time to time, plus 5.00%. The Purchaser shall give the Issuer notice of any such adjustment. In the event of any of the foregoing Events of Default, the Purchaser may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the Laws of the State of Florida, or granted and contained in this 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 Issuer or by any officer thereof. Acceleration shall not be an allowable remedy. SECTION 12. REPORTING FINANCIAL INFORMATION. As soon as available, but not later than 210 days following the end of each Fiscal Year, the Issuer shall provide the Purchaser with the County's annual audited financial statements prepared and certified by an independent certified public accountant reasonably acceptable to the Purchaser to the effect that such audit has been conducted in accordance with generally accepted auditing standards and stating whether such financial statements present fairly in all material respects the financial position of the County and the results of its operations (including the System) and cash flows for the periods covered by the audit report, all in conformity with generally accepted accounting principals applied on a consistent basis. Such financial statements shall include a balance sheet and statement of revenues, expenditures and changes in fund balances. The Issuer shall provide the Purchaser with the County's annual budget within 30 days of adoption and no later than 45 days after the commencement of the corresponding Fiscal Year and shall provide the 6 11C Purchaser with other information relating to the Series 2016 Note or the security with respect thereto upon reasonable request. SECTION 13. ADDITIONAL COVENANTS. (A) To the extent the Issuer shall determine that it has any rebateable arbitrage with respect to the Series 2016 Note under the Code or the applicable federal tax regulations, it shall deposit such amounts in the Rebate Fund and shall otherwise comply with the provisions of Section 5.21 of the Bond Resolution. (B) So long as the Series 2016 Note is outstanding, the Issuer shall fix, establish and maintain such rates and collect such fees, rates or other charges for the products, services and facilities of its System, and revise the same from time to time, whenever necessary, as will always provide in each Fiscal Year, Pledged Funds (after payment of Annual Debt Service on the Senior Bonds) adequate at all times to pay in each Fiscal Year at least one hundred fifteen percent (115%) of the annual debt service on the Series 2016 Note and all other outstanding Subordinated Indebtedness becoming due in such Fiscal Year. (C) So long as the Series 2016 Note is outstanding, the Issuer shall comply in all respects with the provisions of Section 6.02 of the Bond Resolution with respect to the issuance of Additional Bonds. The Issuer shall not issue any other Subordinated Indebtedness on parity with the Series 2016 Note unless the Pledged Funds (after deducting the Maximum Annual Debt Service for the Senior Bonds) for the immediately preceding Fiscal Year or any 12 months out of the immediately preceding 24 months is equal to at least one hundred fifteen percent (115%) of the maximum annual debt service on the Series 2016 Note, any other then outstanding Subordinated Indebtedness and the proposed Subordinated indebtedness. The Issuer shall not issue any Subordinated Indebtedness that has a prior or superior lien on the Pledged Funds to the Series 2016 Note without the prior written consent of the Purchaser. (D) So long as the Series 2016 Note is outstanding, the Issuer shall apply Gross Revenues in accordance with Section 4.05 of the Bond Resolution and, specifically, shall make debt service payments on the Series 2016 Note pursuant to Section 4.05(B)(6) thereof. (E) So long as the Series 2016 Note is outstanding, the Issuer shall provide advance notice to the Purchaser of any proposed amendments to the Bond Resolution. SECTION 14. TRANSFER. The Purchaser may sell, transfer or assign the Series 2016 Note in whole only to an "accredited investor" under Regulation D promulgated under the Securities Act of 1933, as amended, or a "qualified institutional buyer" under Rule 144A promulgated under the Securities Act of 1933, as amended; provided, however, the Purchaser may transfer the Series 2016 Note to an affiliate of the 7 11C Purchaser without restriction. The Purchaser shall notify the Issuer and the Clerk of any sale, transfer or assignment of the Series 2016 Note. Notwithstanding the foregoing, the Purchaser may sell participations in the Series 2016 Note to any number of Participants as long as the Purchaser complies with all applicable securities laws. SECTION 15. WAIVER OF JURY TRIAL; APPLICABLE LAW AND JURISDICTION. (A) To the extent permitted by applicable law, the Issuer, knowingly, voluntarily and intentionally waives any right it may have to a trial by jury in respect of any litigation based on, or arising out of, under or in connection with this resolution, the Series 2016 Note or any agreement contemplated to be executed in connection with this resolution or any course of conduct, course of dealing, statements (whether verbal or written) or actions of the Issuer or the Purchaser. (B) The substantive laws of the State of Florida shall govern this resolution, the Series 2016 Note or any agreement contemplated to be executed in connection with this resolution. The Issuer submits to the jurisdiction of Florida courts and federal courts and agrees that venue for any suit concerning this resolution shall be in Collier County, Florida and the Middle District of Florida. SECTION 16. GENERAL AUTHORITY. The members of the Governing Body of the Issuer, the County Manager, the Clerk and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this resolution or the Bond Resolution, or desirable or consistent with the requirements hereof or the Bond Resolution for the full punctual and complete performance of all the terms, covenants and agreements contained herein or in the Series 2016 Note and the Bond Resolution and each member, employee, attorney and officer of the Issuer and the Clerk is hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. In the event the Chairman is absent or unavailable to perform any function or duty hereunder the Vice-Chairman is hereby authorized to perform any and all of such functions or duties. Bond Counsel and the Issuer's Financial Advisor are hereby authorized and directed to take all action necessary and desirable to carryout the intent and purposes of this resolution. SECTION 17. MODIFICATION OR AMENDMENT OF THIS RESOLUTION. No modification or amendment of this resolution or of any resolution amendatory thereof or supplemental thereto, which would have an adverse effect on the Purchaser may be made without the consent in writing of the Purchaser. SECTION 18. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held 8 I. I. C 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 separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Series 2016 Note. SECTION 19. RESOLUTION TO CONTINUE IN FORCE. The Bond Resolution and all the terms and provisions thereof are and shall remain in full force and effect. SECTION 20. EFFECTIVE DATE. This resolution shall become effective immediately upon its adoption. .DULY ADOPTED, in Regular Session this 15th day of November, 2016 . ''-,,, ATTEST: BOARD OF COUNTY COMMISSIONERS DWIGHT E.BROCK, CLERK COLLIER COUNTY, FLORIDA, AS THE EX- OFFICIO GOVERNING BOARD OF THE COLLIER COUNTY WATER-SEWER DISTRICT r By: By: /.„,...�- c::),/,(4.Z, 'puty Clerk Chairman Appr lye. ,S t• form and 1',ga '\ i '' / ' ' . ' - 1111111 111 Jeffre latz ow DistriA;i'.rney 9 11c EXHIBIT A PROPOSAL OF THE PURCHASER I C EXHIBIT A 9'fCB FLORIDA COMMUNITY BANK October 13,2016 Joseph Bellone Collier County Water and Sewer District iosephbellone@colliergov.net Sergio Masvidal PFM Financial Advisors LLC masvidals@pfm.com Nicklas Rocca PFM Financial Advisors LLC roccan@pfm.com RE: Collier County Water-Sewer District Refunding Revenue Bond, Series 2016 Gentlemen: Florida Community Bank,N.A.a national banking association("Bank"and/or"FCB")is pleased to consider a financing arrangement(the"Facility")for the Collier County Water-Sewer District,(the"District),the basic terms and conditions of which are set forth below. The proposed Facility is subject to the satisfactory completion of FCB's customary due diligence,underwriting and receipt of credit approval. Borrower: Collier County Water-Sewer District(the"District") Facility: Non-Bank Qualified Tax Exempt Term Note Amount: $97,000,000(not to exceed) Purpose: The proceeds of the Note will be used by the District to refund all of the District's outstanding State Revolving Fund Loans and to pay the cost of issuance. Term: The term of the Note will be approximately 13 years from the date of the closing, fully amortizing with a final stated maturity of July 1,2029. Collateral: The payment of principal and interest on the Note will be secured by a pledge of and junior, inferior, and subordinate lien upon (1) the Net Revenue of the District's Water and Sewer System and(2)certain charges imposed by the District on Persons. Repayment: Semi-Annual interest payments on the 1st of each January and July, commencing on January 1, 2017.Principal will be due annually on the 1st of each July,commencing July 1.2017. Interest Rate: The interest rate would be fixed at 1.80 percent. This rate will be held until November 17,2016. In the event the closing is delayed past this date,the rate will be reset 3 days prior to closing and would be indexed to 65 percent of the prevailing Ten(10)Year Treasury Constant Maturity plus 68 basis points with a floor of 1.80 percent. The Treasury Constant Maturity will be as published by the Federal Reserve(http://www.federalreserve.gov/releases/h15/update/). 1 FioridaCommunityBank.com 120WerN oTc 11C Pre-payment.• The District may prepay and redeem the Notes,in whole or part,at any time or from time to time, without penalty or premium,by paying to the Bank all or a part of the principal amount of the Note to be repaid,together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment and redemption of such Notes shall be made on such date and in such principal amount as shall be specified by the District in a written notice delivered to the Bank not less than ten days prior thereto specifying the principal amount to be prepaid and the date of such prepayment. Fees: The District is responsible for all legal and out of pocket expenses associated with the proposed financings.The Bank will be represented by Greenspoon Marder Law,whose fee will be fixed at $10,000. Covenants: For so long as any of the principal amount of or interest on the proposed Notes are outstanding or any duty or obligation of the District contemplated under the proposed Note remain unpaid or unperformed, the Bank shall be entitled to the Covenants of the Issuer as defined in that certain Resolution No.CWS-85-5 of the District duly adopted on July 30, 1985 as amended,restated and supplemented and as may be amended,restated and supplemented by the District thereafter. Financial Reporting Audited Financial Statements-The District shall cause an audit to be completed of its books and accounts and shall furnish to the Bank within 210 days after the end of each fiscal year audited year-end financial statements of the Authority certified by an independent certified public accountant acceptable to the Bank to the effect that such audit has been conducted in accordance with generally accepted auditing standards and stating whether such financial statements present fairly in all material respects the financial position of the District and the results of its operations and cash flows for the periods covered by the audit report, all in conformity with generally accepted accounting principles applied on a consistent basis. Such financial statements shall include a balance sheet and statement of revenues, expenditures and changes in fund balances, with comparative figures to the prior year and including a comparison of actual results to budgeted projections. Annual Budget. The District shall adopt an annual budget as required by law. The District shall provide the Bank with a copy of its annual operating budget for each fiscal year not later than 45 days after the commencement thereof. Events of Default: An"Event of Default" shall be deemed to have occurred under this Agreement if: a) the District shall fail to make any payment of the principal of or interest on the Note after the same shall become due and payable,whether by maturity,or otherwise;or b) the District shall default in the performance of or compliance with any term or covenant contained in the Loan Documents, which default or noncompliance shall continue and not be cured within thirty(30)days after(i)notice thereof to the District by the Bank;or(ii)the Bank is notified of such noncompliance or should have been so notified,whichever is earlier;or c) any representation or warranty made in writing by or on behalf of the District in any Loan Document shall prove to have been false or incorrect in any material respect on the date made or reaffirmed;or d) the District admits in writing its inability to pay its debts generally as they become due or files a petition in bankruptcy or makes an assignment for the benefit of its creditors or consents to the appointment of a receiver or trustee for itself;or e) the District is adjudged insolvent by a court of competent jurisdiction , or it is adjudged bankrupt on a petition in bankruptcy filed by or against the District, or an order,judgment or decree is entered by any court of competent jurisdiction appointing,without the consent of the District, a receiver or trustee of the District or of the whole or any part of its property, and if 2 loridaCommunityBank.corn Orton Ira lic the aforesaid adjudications, orders,judgments or decrees shall not be vacated or set aside or stayed within 90 days from the date of entry thereof;or f) the District shall file a petition or answer seeking reorganization or any arrangement under the federal bankruptcy laws or any other applicable law or statute of the United States of America or the State of Florida;or g) failure by the District promptly to remove any execution, garnishment or attachment of such consequence as will materially impair its ability to carry out its obligations. Default Rate: The "default rate of interest" shall be the lesser of five percentage points in excess of the Bank's Prime Rate of interest charged at the time of the Monetary Default or the maximum legal interest rate.The default rate of interest shall only apply for interest during the period of time between when the Monetary Default occurs and when it is cured by the District. Interest Rate Adjustments: In the event the interest on the Loan becomes subject to federal income tax due to actions or inactions of the District,the interest rate will convert to the taxable rate during that period. The taxable rate will be calculated by dividing the current non-bank qualified tax-exempt rate by 1 minus the effective federal tax rate. In addition, the District shall make the Bank whole for any interest, penalties,and additions to tax suffered by the Bank. Conditions of Lending: The obligations of the Bank to lend hereunder are subject to the following conditions precedent: a) Documents are and shall be true and correct to the best of the District's knowledge at the time of closing. b) On the closing date the District shall be in compliance with all the terms and provisions set forth in the Loan Documents on its part to be observed or performed,and no Event of Default nor any event that, upon notice or lapse of time or both, would constitute such an Event of Default,shall have occurred and be continuing at such time. c) On or prior to the closing date, the Bank shall have received the following supporting documents, all of which shall be satisfactory in form and substance to the Bank (such satisfaction to be evidenced by the execution of the Notes by the Bank): (i) the opinion of counsel to the District, regarding the due authorization, execution, delivery, validity and enforceability of the Agreement and the Note,the District's power to incur the debt evidenced by the Note, the due adoption and enforceability of the Note Resolution and the due creation and existence of the District and to the effect that the Note is excluded from gross income for federal income tax purposes and is exempt from State excise tax on documents, and(ii) such additional supporting documents as the Bank may reasonably request. d) No material and adverse changes shall have occurred in the financial condition of the District. f) The Bank shall not be required to enter into the proposed Credit Accommodation until the completion of all due diligence inquiries,receipt of approvals from all requisite parties and the execution and receipt of all necessary documentation reasonably acceptable to the Bank and its counsel. The Bank complies with the US Patriot Act of 2001 (the "Act"), including, but not limited to; those sections relating to customer identification, monitoring and reporting of suspicious activities,and the prevention of money laundering.This Act mandates that we verify certain information about the borrower and any guarantor while processing the Credit Accommodation request. Furthermore, certain assumptions are made for this proposal which, if altered, could affect the overall credit approval and or the terms of the proposed Credit Accommodation. Waiver of Jury Trial District and Bank knowingly,intentionally,and voluntarily waive any right which any of them may have to a trial by jury in connection with any matter directly or indirectly relating to any loan 3 FlaridaCommunityBank.com omen Fp c 11C document executed in connection herewith or any other matter arising from the relationship between Bank and District. Florida Community Bank appreciates the opportunity to submit this Proposal and looks forward to your favorable response. Please understand that this letter is not a formal commitment to extend a loan by the Bank,but is merely intended for discussion purposes only in order to provide you with the basic terms and conditions of our proposal,which are outlined above. In the event FCB is selected as the provider,a Letter of Commitment will be provided within 10 days of notice of said selection. The terms and conditions outlined in this Proposal are in effect until November 17,2016. If you have any questions or need additional information,please do not hesitate contacting me at(239)552-1819. Respectfully, jfr Jim Mitchell,SVP LeeAnn Kirwin Director of Public Finance Vice President Florida Community Bank Florida Community Bank 2325 Vanderbilt Beach Road 2325 Vanderbilt Beach Road Naples,FL 34109 Naples,FL 34109 (239)552-1819 (239)552-1879 imitchell@fcb1923.com lkirwin @fcb1923.com Agreed to and accepted this day of ,2016. BORROWER: Collier County Water-Sewer District Signature: Name: Title: 4 FloridaCommunityBank.com ate'°`"I FDIC 11C EXHIBIT B FORM OF SERIES 2016 NOTE 11C EXHIBIT B $ UNITED STATES OF AMERICA STATE OF FLORIDA COLLIER COUNTY WATER-SEWER DISTRICT WATER AND SEWER REFUNDING REVENUE NOTE (SUBORDINATE), SERIES 2016 Date of Interest Rate Maturity Date Original Issue CUSIP 1.80% July 1, 2029 November 17, 2016 None Registered Holder: FLORIDA COMMUNITY BANK,N.A. Principal Amount: THOUSAND AND 00/100 DOLLARS The Collier County Water-Sewer District, a political subdivision created and existing under and by virtue of the laws of the State of Florida (the "Issuer"), which is located in Collier County, Florida (the "County"), for value received, hereby promises to pay, solely from the Pledged Funds hereinafter described, to the Registered Holder identified above, or registered assigns as hereinafter provided, on the Maturity Date identified above, or upon earlier mandatory redemption as provided below, the Principal Amount identified above and to pay interest on such Principal Amount from the Date of Original Issue identified above or from the most recent interest payment date to which interest has been paid at the Interest Rate per annum identified above (subject to adjustment as herein provided) on January 1 and July 1 of each year (the "Interest Dates"), commencing January 1, 2017, until such Principal Amount shall have been paid. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Such Principal Amount and interest on this Note are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Payment of each installment of principal and interest shall be made to the person in whose name this Note shall be registered on the registration books of the Issuer maintained by the Clerk of the Board of County Commissioners of Collier County, Florida, acting as the ex-officio Clerk of the Governing Board of the Issuer, as Registrar, on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding each interest payment date by check or draft, bank wire transfer or direct debit of a deposit account of the Issuer, or in such other manner as is agreed to between the Issuer and the Registered Holder; provided that the Registered Holder of this Note shall present and surrender this Note to the Issuer within a reasonable period of time after the final payment of the principal of and interest on this Note has been made or shall provide evidence that this Note has been canceled. 11C This Note is issued for the principal purpose of refunding all of the County's loans under the State of Florida's State Revolving Fund Loan Program, under the authority of and in full compliance with the Constitution and laws of the State of Florida and Resolution No. CWS-85-5 duly adopted by the Board of County Commissioners of Collier County, Florida, acting as the Governing Board of the Issuer, on July 30, 1985, as restated, amended and supplemented (the "Bond Resolution"), and pursuant to Resolution No. / CWS Resolution No. adopted on November 15, 2016 (the "2016 Resolution") authorizing the issuance of this Note. This Note and the interest hereon are payable solely from and secured by a lien upon and a pledge of(i) the Net Revenues (as defined in the Bond Resolution) to be derived from the operation of the System (as defined in the Bond Resolution), (ii) the System Development Fees (as defined in the Bond Resolution), (iii) the Special Assessment Proceeds (as defined in the Bond Resolution), and (iv) until applied in accordance with the provisions of the Bond Resolution, all moneys, including investments thereof, in certain funds and accounts established by the Bond Resolution (collectively, the "Pledged Funds"); PROVIDED, HOWEVER, SUCH LIEN AND PLEDGE SHALL BE JUNIOR AND SUBORDINATE IN ALL RESPECTS TO THE BONDS (AS DEFINED IN THE BOND RESOLUTION) THAT ARE OUTSTANDING UNDER THE BOND RESOLUTION AND ANY SUBSEQUENTLY ISSUED ADDITIONAL BONDS, AS DEFINED IN THE BOND RESOLUTION (COLLECTIVELY, THE "SENIOR BONDS"), and subject in each case to the application thereof for the purposes and on the conditions permitted by the Bond Resolution. It is expressly agreed by the Registered Holder of this Note that the full faith and credit of Collier County, Florida (the "County") is not pledged to the payment of the principal of and interest on this Note and that such Holder shall never have the right to require or compel the exercise of any taxing power of the County to the payment of such principal and interest. The Issuer has no ad valorem taxing power. This Note and the obligation evidenced hereby shall not constitute a lien upon the System or any other property of the Issuer or the County, but shall constitute a lien only on, and shall be payable solely from, the Pledged Funds. This Note is issued on a junior and subordinate basis to the Senior Bonds as to the lien on and pledge of the Pledged Funds. The Issuer may issue other obligations on a senior basis to this Note as provided in the Bond Resolution. Neither the members of the governing board of the Issuer nor any person executing this Note shall be liable personally hereon or be subject to any personal liability or accountability by reason of the issuance hereof. The Registered Holder may only sell, transfer or assign this Note in whole only to an "accredited investor" under Regulation D promulgated under the Securities Act of 1933, as amended, or a "qualified institutional buyer" under Rule 144A promulgated under the Securities Act of 1933, as amended; provided, however, the Registered Holder may transfer this Note to an affiliate of the Registered Holder without restriction. The Registered Holder shall notify the Issuer and the Clerk of any sale, transfer or assignment of this Note. 2 11C This Note may be redeemed in whole, or in part, on any date, with ten (10) days prior written notice to the Registered Holder by payment in an amount equal to the principal amount to be prepaid plus accrued interest thereon to the date of prepayment, without premium or penalty. Unless otherwise agreed by the Issuer and the Registered Holder, any prepayment in part shall be applied to the then scheduled principal payments in inverse order. This Note is subject to mandatory sinking fund redemption prior to maturity, on July 1, 2017 and on each July 1 thereafter, at a redemption price equal to the principal amount of such Note or portions thereof to be redeemed, plus interest accrued thereon to the date of redemption, on July 1, in the following years and in the following principal amounts: Year Principal Amount 2017 $ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029* *Maturity No notice of redemption shall be required to be given with respect to the mandatory sinking fund redemption provisions set forth above. The interest rate is subject to adjustment in accordance with the provisions of Sections 10 and 11 of the 2016 Resolution. All payments by the Issuer pursuant to this Note shall apply first to accrued interest, then to other charges due the Registered Holder, and the balance thereof shall apply to the principal sum due. The Issuer to the extent permitted by law hereby waives presentment, demand, protest and notice of dishonor. Reference to the 2016 Resolution, the Bond Resolution and any and all resolutions supplemental thereto and modifications and amendments thereof and to the Act is made for a description of the pledge and covenants securing this Note, the nature, manner and extent of 3 11C enforcement of such pledge and covenants, the rights, duties, immunities and obligations of the Issuer. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Note, exist, have happened and have been performed, in regular and due form and time as required by the Act (as defined in the Bond Resolution), and that the issuance of this Note does not violate any constitutional or statutory limitations or provisions. IN WITNESS WHEREOF, the Collier County Water-Sewer District has issued this Note and has caused the same to be executed by the manual signature of the Chairman of the Board of County Commissioners of Collier County, Florida, acting as the Ex-Officio Chairman of the Governing Board of the Issuer and by the manual signature of the Clerk of the Board of County Commissioners of Collier County, Florida, acting as the Ex-Officio Clerk of the Governing Board of the Issuer and its corporate seal to be affixed hereon. COLLIER COUNTY WATER-SEWER DISTRICT (SEAL) Chairman of the Board of County Commissioners of Collier County, Florida, acting as the Ex- Officio Chairman of the Governing Board of the Collier County Water-Sewer District ATTEST: Clerk of the Board of County Commissioners of Collier County, Florida, acting as the Ex-Officio Clerk of the Governing Board of the Collier County Water-Sewer District Approved as to form and legality: Jeffrey A. Klatzkow County Attorney 4 1 1 C ASSIGNMENT FOR VALUE RECEIVED,the undersigned sells, assigns and transfers unto Insert Social Security or Other Identifying Number of Assignee (Name and Address of Assignee) the within Note and does hereby irrevocably constitute and appoint , as attorneys to register the transfer of the said Note on the books kept for registration thereof with full power of substitution in the premises. Dated: Signature guaranteed: NOTICE: Signature must be guaranteed by an institution which is a participant in the Securities Transfer Agent Medallion Program NOTICE: The signature to this assignment (STAMP)or similar program. must correspond with the name of the Registered Holder as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever and the Social Security or other identifying number of such assignee must be supplied. 5 11C The following abbreviations, when used in the inscription on the face of the within Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM-- as tenants in common TEN ENT-- as tenants by the entireties JT TEN-- as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT- (Cust.) Custodian for under Uniform Transfers to Minors Act of (State) Additional abbreviations may also be used though not in list above. 6