Agenda 09/22/2015 Item #11G 9/22/2015 11 .G.
EXECUTIVE SUMMARY
Recommendation to adopt a Resolution authorizing 1) the issuance of the Collier County Water-
Sewer District Water and Sewer Refunding Revenue Bond, Series 2015, in a principal amount not
to exceed $18,000,000 to advance refund a portion of the Collier County Water-Sewer District
Water and Sewer Revenue Bonds, Series 2006, to achieve debt service savings of approximately
$1.18 million; 2) a negotiated sale of the Series 2015 Bond pursuant to the proposal of Bank of
America, N.A.; 3) the execution and delivery of an escrow deposit agreement with The Bank of New
York Mellon Trust Company, N.A.; and, 4) the execution and delivery of a rate lock agreement
with Bank of America,N.A.
OBJECTIVE: To partially refund Collier County Water-Sewer District (District) Water and Sewer
Revenue Bonds Series 2006, in order to realize net present value debt service savings of approximately
$1.18 million.
CONSIDERATIONS: On September 8, 2015, as Agenda Item 11E, the Board of County
Commissioners accepted the quote of Bank of America, N.A., to provide the District with a term loan to
refund a portion of the District's outstanding Water and Sewer Revenue Bonds, Series 2006 (the
"Refunded Bonds").
This request is to authorize the issuance of the Series 2015 Bond to refund the Refunded Bonds, to
appoint The Bank of New York Mellon Trust Company,N.A. as the escrow agent for the transaction, and
to ratify the execution and delivery of a rate lock agreement with Bank of America,N.A.
FISCAL IMPACT: At the interest rate proposed by Bank of America, N.A. and locked pursuant to
the rate lock agreement, the net present value debt service savings is approximately $1.18 million (6.87
percent)(net of all issuance costs).
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney working with
outside bond counsel, is approved as to form and legality, and requires majority vote for approval. -JAK
GROWTH MANAGEMENT IMPACT: There is no Growth Management Plan impact associated
with this item.
RECOMMENDATION: That the Board of County Commissioners, Ex-officio the Governing
Board of Collier County Water-Sewer District, adopt a Resolution authorizing 1) the issuance of the
Collier County Water-Sewer District Water and Sewer Refunding Revenue Bond, Series 2015, in a
principal amount not to exceed $18,000,000 to advance refund a portion of the Collier County Water-
Sewer District Water and Sewer Revenue Bonds, Series 2006, to achieve debt service savings of
approximately $1.18 million; 2) a negotiated sale of the Series 2015 Bond pursuant to the proposal of
Bank of America, N.A.; 3) the execution and delivery of an escrow deposit agreement with The Bank of
New York Mellon Trust Company,N.A.; 4) execution and delivery of a rate lock agreement with Bank of
America,N.A.; and, 5) any necessary budget amendments.
Prepared By:
Joe Bellone, Director. Financial Operations Support Division,Public Utilities Department
Laura Zautcke, Senior Management&Budget Analyst,Public Utilities Department
Attachments:
Attachment A-Bond Resolution
Attachment B—Financial Analysis
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COLLIER COUNTY
Board of County Commissioners
Item Number: 11.11.G.
Item Summary: Recommendation to adopt a Resolution authorizing 1)the issuance of
the Collier County Water-Sewer District Water and Sewer Refunding Revenue Bond, Series
2015, in a principal amount not to exceed $18,000,000 to advance refund a portion of the
Collier County Water-Sewer District Water and Sewer Revenue Bonds, Series 2006, to achieve
debt service savings of approximately$1.18 million; 2) a negotiated sale of the Series 2015
Bond pursuant to the proposal of Bank of America, N.A.; 3) the execution and delivery of an
escrow deposit agreement with The Bank of New York Mellon Trust Company, N.A.; and, 4) the
execution and delivery of a rate lock agreement with Bank of America, N.A.
Meeting Date: 9/22/2015
Prepared By
Name: ZautckeLaura
Title: Management/Budget Analyst, Senior,Public Utilities Department
9/9/2015 1:41:45 PM
Submitted by
Title: Management/Budget Analyst, Senior,Public Utilities Department
Name: ZautckeLaura
9/9/2015 1:41:46 PM
Approved By
Name: HapkeMargie
Title: Recycling Coordinator,Public Utilities Department
Date: 9/9/2015 2:40:13 PM
Name: Joseph Bellone
Title: Division Director-Operations Support, Public Utilities Department
Date: 9/9/2015 3:53:58 PM
Name: Joseph Bellone
Title: Division Director-Operations Support, Public Utilities Department
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Date: 9/11/2015 9:06:51 AM
Name: KlatzkowJeff
Title: County Attorney,
Date: 9/11/2015 9:13:49 AM
Name: IsacksonMark
Title: Division Director-Corp Fin&Mgmt Svc, Office of Management&Budget
Date: 9/11/2015 10:49:29 AM
Name: CasalanguidaNick
Title: Deputy County Manager, County Managers Office
Date: 9/13/2015 9:36:19 AM
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9/22/2015 11 .G.
RESOLUTION 2015- /CWS RESOLUTION 2015-_
A RESOLUTION SUPPLEMENTING RESOLUTION NO.
CWS-85-13 IN CERTAIN RESPECTS, WHICH
RESOLUTION NO. CWS-85-13, AMONG OTHER
THINGS, RESTATED RESOLUTION NO. CWS-85-5 IN
ITS ENTIRETY AND AUTHORIZED THE ISSUANCE BY
THE COLLIER COUNTY WATER-SEWER DISTRICT OF
WATER AND SEWER REVENUE BONDS FROM TIME
TO TIME; AUTHORIZING THE ADVANCE REFUNDING
OF A PORTION OF THE COLLIER COUNTY WATER-
SEWER DISTRICT WATER AND SEWER REVENUE
BONDS, SERIES 2006 IN ORDER TO ACHIEVE DEBT
SERVICE SAVINGS; AUTHORIZING THE ISSUANCE
OF A NOT EXCEEDING $18,000,000 AGGREGATE
PRINCIPAL AMOUNT OF COLLIER COUNTY WATER-
SEWER DISTRICT WATER AND SEWER REFUNDING
REVENUE BOND, SERIES 2015 IN ORDER TO EFFECT
SUCH REFUNDING; AUTHORIZING A NEGOTIATED
SALE OF SAID BOND PURSUANT TO THE PROPOSAL
OF BANK OF AMERICA, 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:
AUTHORIZING THE EXECUTION AND DELIVERY OF
AN ESCROW DEPOSIT AGREEMENT AND
APPOINTMENT OF AN ESCROW AGENT THERETO;
APPROVING AND RATIFYING THE EXECUTION AND
DELIVERY OF A RATE LOCK AGREEMENT; 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, 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,
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1985, as amended and supplemented (collectively, the "Resolution"), for the purposes
described therein.
(B) The Issuer previously issued its Collier County Water-Sewer District Water
and Sewer Revenue Bonds, Series 2006 (the "Series 2006 Bonds") pursuant to the
Resolution for the purpose of financing and refinancing certain capital improvements to
the Issuer's System (as defined in the Resolution).
(C) The Resolution provides for the issuance of Additional Bonds, payable on a
parity with Bonds Outstanding (as such terms are defined in the Resolution) under the
Resolution (the "Outstanding Parity Bonds"), for the purpose of advance refunding a
portion of the Series 2006 Bonds (as determined pursuant to the provisions hereof, the
"Refunded Bonds"), upon meeting certain requirements set forth in the Resolution.
(D) The Issuer deems it to be in its best interest to issue its Collier County
Water-Sewer District Water and Sewer Refunding Revenue Bond, Series 2015 (the
"Series 2015 Bond") for the principal purpose of advance refunding the Refunded Bonds
in order to achieve net present value debt service savings for the Issuer, which Series
2015 Bond shall be issued on parity in all respects with the Outstanding Parity Bonds
pursuant to the terms of the Resolution.
(E) For the refunding of the Refunded Bonds, the Issuer shall, as provided
herein, deposit part of the proceeds derived from the sale of the Series 2015 Bond,
together with other legally available moneys of the Issuer, in a special escrow deposit
trust fund (the "Escrow Fund"), which shall be sufficient to pay the Refunded Bonds as
the same mature or are redeemed prior to maturity, all as provided herein and in the
hereinafter described Escrow Deposit Agreement; subsequent to the defeasance of the
Refunded Bonds, the Refunded Bonds shall no longer be payable from or be secured by
any portion of the Pledged Funds (as defined in the Resolution).
(F) On September 8, 2015, the Governing Body determined that the proposal of
Bank of America, N.A. (the "Purchaser") to purchase the Series 2015 Bond (the
"Proposal") was the most cost effective and conforming proposal the Issuer received in
response to its previously issued Request for Quote and the Issuer accepted the Proposal.
(G) Due to the potential volatility of the market for tax-exempt obligations such
as the Series 2015 Bond and the complexity of the transactions relating to such Series
2015 Bond, it is in the best interest of the Issuer to sell the Series 2015 Bond by a
negotiated sale to the Purchaser pursuant to the Proposal and the provisions hereof and of
the 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 2015 Bond.
(H) The Issuer hereby certifies that it is current in all deposits into the various
funds and accounts established by the Resolution and all payments theretofore required to
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have been deposited or made by the Issuer under the provisions of the Resolution have
been deposited or made and the Issuer has complied with the covenants and agreements
of the Resolution and is not currently in default under the Resolution.
(I) The Resolution provides that the Series 2015 Bond shall mature on such
dates and in such amounts, shall bear such rates of interest, shall be payable in such
places and shall be subject to such redemption provisions as shall be determined by
Supplemental Resolution (as defined in the Resolution) adopted by the Issuer; and it is
now appropriate that the Issuer determine certain of such provisions, terms and details
and establish the mechanisms for determining the remaining provisions, terms and
details.
(I) The Series 2015 Bond 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, in the manner and to the extent
provided in the Resolution.
(K) The covenants, pledges and conditions in the Resolution shall be applicable
to the Series 2015 Bond herein authorized and said Series 2015 Bond shall be on a parity
with and rank equally as to the lien on and source and security for payment from the
Pledged Funds and in all other respects with the Outstanding Parity Bonds, and shall
constitute a "Bond" within the meaning of the Resolution.
SECTION 2. DEFINITIONS. When used in this Supplemental
Resolution, the terms defined in the Resolution shall have the meanings therein stated,
except as such definitions shall be hereinafter amended and defined.
SECTION 3. AUTHORITY FOR THIS SUPPLEMENTAL
RESOLUTION. This Supplemental Resolution is adopted pursuant to the provisions of
the Act.
SECTION 4. AUTHORIZATION OF THE ADVANCE REFUNDING
OF THE REFUNDED BONDS; CONFIRMATION OF PROPOSAL. (A) The
Issuer hereby authorizes the advance refunding of the Refunded Bonds for the purpose of
achieving net present value debt service savings. Prior to the issuance of the Series 2015
Bond, the Chairman shall determine, in his sole discretion and upon the advice of the
Issuer's financial advisor, Public Financial Management, Inc. (the "Financial Advisor")
and the Issuer's Bond Counsel, Nabors, Giblin & Nickerson, P.A. (the "Bond Counsel"),
which specific maturities of the Series 2006 Bonds (or portions thereof) shall be refunded
in connection with the issuance of the Series 2015 Bond and only such maturities (or
portions thereof) shall constitute "Refunded Bonds" hereunder.
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(B) The Issuer hereby confirms its prior acceptance of the Proposal of the
Purchaser, a copy of which is attached hereto as Exhibit A.
SECTION 5. AUTHORIZATION AND DESCRIPTION OF THE
SERIES 2015 BOND. The Issuer hereby authorizes the issuance of a Series of Bonds in
the principal amount of not exceeding $18,000,000 to be known as the "Collier County
Water-Sewer District Water and Sewer Refunding Revenue Bond, Series 2015" (or such
other designation as the Chairman may determine), for the principal purpose of
refunding, on an advance basis, the Refunded Bonds. The specific principal amount of
the Series 2015 Bond to be issued pursuant to the Resolution shall be determined by the
Chairman, upon the advice of the Issuer's Financial Advisor, provided such principal
amount does not exceed $18,000,000. The Series 2015 Bond shall be on parity in all
respects and shall rank equally as to lien on and source and security for payment from the
Pledged Funds with the Outstanding Parity Obligations.
The Series 2015 Bond 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 Bond
in the denomination of its outstanding principal amount and shall be numbered "R-1."
The Series 2015 Bond shall bear interest from its dated date at a fixed interest rate of
1.75% per annum (the "Interest Rate"). The Interest Rate is subject to adjustment as
provided in Sections 12 and 13 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 2015 Bond
shall be payable semi-annually, on January 1 and July 1 of each year (the "Interest
Payment Dates"), commencing on January 1, 2016. The Series 2015 Bond shall be
issued as a single Term Bond with a final maturity of July 1, 2022 and shall be subject to
mandatory sinking fund redemption in such Sinking Fund Installments commencing on
July 1, 2017 and on each July 1 thereafter through the maturity date of the Series 2015
Bond, 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 2015 Bond. The Series
2015 Bond 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 2015 Bond. The
interest Rate on the Series 2015 Bond shall comply in all respects with Section 215.84.
Florida Statutes. For purposes of the Resolution, "Bond Year" shall mean the period
commencing on July 1 of each year and continuing through the next succeeding June 30.
The Series 2015 Bond shall be payable as to principal and interest by 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 2015 Bond in whose name the
Series 2015 Bond 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
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owner of the Series 2015 Bond shall present and surrender the Series 2015 Bond to the
Issuer for the final payment of the principal of the Series 2015 Bond or shall provide
evidence that such Series 2015 Bond has been cancelled. Principal of and interest on the
Series 2015 Bond 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 2015 Bond shall be substantially in the form set forth in Section
2.10 of the Resolution, with such changes, amendments, modifications, omissions and
additions as may be approved by the Chairman. Execution of the Series 2015 Bond by
the Chairman shall be conclusive evidence of approval of any such changes.
SECTION 6. REDEMPTION PROVISIONS. (A) The Series 2015 Bond
may be redeemed in whole, or in part, on any date, with three (3) days prior written
notice to the Series 2015 Bondholder by payment in an amount equal to the principal
amount to be prepaid plus accrued interest thereon to the date of prepayment plus the
Prepayment Fee. For purposes of this Section 6, the Prepayment Fee will be the sum of
fees calculated separately for each Prepaid Installment (as defined below), as follows:
(i) The Series 2015 Bondholder will first determine the amount of interest
which would have accrued each month at the Taxable Equivalent Rate (as defined below)
for the Prepaid Installment had it remained outstanding until the applicable Original
Payment Date (as defined below).
(ii) The Series 2015 Bondholder will then subtract from each monthly interest
amount determined in (i) above, the amount of interest which would accrue for that
Prepaid Installment if it were reinvested from the date of redemption through the Original
Payment Date, using the Treasury Rate (as defined below).
(iii) If (i) minus (ii) for the Prepaid Installment is greater than zero, the Series
2015 Bondholder will discount the monthly differences to the date of by the Treasury
Rate. The Series 2015 Bondholder will then add together all of the discounted monthly
differences for the Prepaid Installment.
The following definitions will apply to the calculation of the Prepayment Fee:
"Original Payment Dates" mean the dates on which the redeemed principal would
have been paid if there had been no redemption. If any of the principal would have been
paid later than the end of the fixed rate interest period in effect at the time of redemption,
then the Original Payment Date for that amount will be the last day of the interest period.
"Prepaid Installment" means the amount of the redeemed principal which would
have been paid on a single Original Payment Date.
"Taxable Equivalent Rate" means the interest rate per annum derived from the
following formula: Interest Rate on the applicable Series 2015 Bond divided by the
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difference of (1 minus the Maximum Corporate Income Tax Rate). The "Maximum
Corporate Income Tax Rate" is the highest marginal federal income tax rate charged to
U.S. corporations in effect at the time of the prepayment calculation. The "Maximum
Corporate Income Tax Rate" is cun•ently 35% (or 0.35 in numerical terms).
"Treasury Rate" means the yield on the Treasury Constant Maturity Series with a
maturity equal to the Original Payment Date of the Prepaid Installment calculated as of
the date of prepayment in accordance with accepted financial practice and rounded to the
nearest quarter-year, as reported in Federal Reserve Statistical Release H.15, Selected
Interest Rates of the Board of Governors of the Federal Reserve System, or any successor
publication. If no maturity exactly corresponding to such Original Payment Date appears
in Release H.15, the Treasury Rate will be determined by linear interpolation between the
yields reported in Release H.15. If for any reason Release H.15 is no longer published,
the Series 2015 Bondholder shall select a comparable publication to determine the
Treasury Rate.
(B) Notwithstanding any other provision of the Resolution, the Issuer shall not
be required to provide the Series 2015 Bondholder with any notice with respect to the
payment of any scheduled Sinking Fund Installment.
SECTION 7. APPLICATION OF SERIES 2015 BOND PROCEEDS.
The proceeds derived from the sale of the Series 2015 Bond shall be applied by the Issuer
simultaneously with the delivery thereof as follows:
(A) A sufficient amount of Series 2015 Bond proceeds, together with other
legally available moneys of the Issuer, shall be deposited irrevocably in trust in the
Escrow Fund established under the terms and provisions of the hereinafter defined
Escrow Deposit Agreement to pay the principal of; Redemption Price, if applicable, and
interest on the Refunded Bonds as the same mature and become due and payable or are
redeemed prior to maturity.
(B) A sufficient amount of the Series 2015 Bond proceeds shall be applied to
the payment of costs and expenses relating to the issuance of the Series 2015 Bond.
SECTION 8. TRANSFER OF CERTAIN MONEYS. The Refunded
Bonds will be refunded from proceeds of the Series 2015 Bond and from other legally
available funds of the Issuer. Any excess moneys on deposit in the Sinking Fund
established for the benefit of the Refunded Bonds pursuant to the Resolution and not
required to remain on deposit therein shall be transferred to the Escrow Fund established
pursuant to the Escrow Deposit Agreement.
SECTION 9. APPOINTMENT OF PAYING AGENT AND
REGISTRAR. The Clerk is hereby designated Registrar and Paying Agent for the
Series 2015 Bond.
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SECTION 10. AUTHORIZATION TO EXECUTE ESCROW DEPOSIT
AGREEMENT. The Issuer hereby authorizes and directs the Chairman to execute and
the Clerk to attest an escrow deposit agreement (the "Escrow Deposit Agreement") and to
deliver the Escrow Deposit Agreement (the "Escrow Agreement") to The Bank of New
York Mellon Trust Company, N.A., Jacksonville, Florida, which is hereby appointed as
Escrow Agent. The Escrow Deposit Agreement shall be in substantially the form of the
Escrow Agreement attached hereto as Exhibit B with such changes, amendments,
modifications, omissions and additions, including the date of such Escrow Agreement, as
may be approved by said Chairman. Execution by the Chairman of the Escrow
Agreement shall be deemed to be conclusive evidence of approval of such changes.
The Chairman is authorized and directed to determine, upon the advice of the
Financial Advisor and Bond Counsel, whether to fund the escrow deposit trust fund
established under the Escrow Deposit Agreement, with uninvested cash or Refunding
Securities (as defined in the Resolution) and the provisions of the Escrow Deposit
Agreement may be modified accordingly.
SECTION 11. APPROVAL AND RATIFICATION OF RATE LOCK
AGREEMENT. The Issuer hereby approves and ratifies the Issuer's prior execution and
delivery of the rate lock agreement attached hereto as Exhibit C (the "Rate Lock
Agreement") and all actions taken by officials and staff of the Issuer, the Financial
Advisor and Bond Counsel in connection therewith. If the Issuer is obligated to pay a
breakage fee pursuant to the Rate Lock Agreement, such obligation shall be secured by
and payable from a pledge of and lien on the Gross Revenues (as defined in the
Resolution); provided, however, such pledge of and lien on the Gross Revenues shall be
junior and subordinate in all respects to the pledge and lien granted to the holders of the
Bonds and the Issuer's outstanding state revolving loan agreements.
SECTION 12. DETERMINATION OF TAXABILITY. (A) In the event
of a Determination of Taxability (as defined below), the Interest Rate on the Series 2015
Bond shall be immediately increased to a rate equal to 154% of the then applicable
Interest Rate (the "Adjusted Rate"); provided, however, such Adjusted Rate shall never
exceed the maximum rate allowable by law. Immediately upon a Determination of
Taxability, the Issuer agrees to pay to the Series 2015 Bondholder on demand, the
Additional Amount. "Additional Amount" means (i) the difference between (a) interest
on the Series 2015 Bond for the period commencing on the date on which the interest on
the Series 2015 Bond(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 2015 Bond during the Taxable Period at
the Interest Rate applicable to the Series 2015 Bond prior to the adjustment to the
Adjusted Rate, plus (ii) any penalties, fines, fees, costs and interest paid or payable by the
Series 2015 Bondholder to the Internal Revenue Service by reason of such Determination
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of Taxability. This provision shall survive the repayment of the Series 2015 Bond until
such time as the federal statute of limitations under which the interest on the Series 2015
Bond could be declared taxable under the Internal Revenue Code has expired.
(B) For purposes of this Section 12, 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 2015 Bond becoming includable for federal income tax purposes in
the gross income of the Series 2015 Bondholder as a consequence of any act or omission
of the Issuer. For all purposes of this definition, a Determination of Taxability will be
deemed to occur on the date as of which the interest on the Series 2015 Bond is deemed
includable in the gross income of the Series 2015 Bondholder. A Deteimination 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 13. DEFAULT. After the occurrence of an Event of Default
under Section 7.01 of the Resolution or if any of the Outstanding Bonds are downgraded
below Baa3/BBB-BBB- (or the equivalent) by any of Moody's Investors Service,
Standard & Poor's Ratings Service or Fitch Ratings, respectively, notwithstanding any
other terms hereof or of the Resolution, the Purchaser may adjust the Interest Rate to the
maximum rate allowed under applicable law until such Event of Default is cured or until
no such rating is below Baa3/BBB-/BBB- (or the equivalent). The Purchaser shall give
the.Issuer notice of any such adjustment.
If any payment of principal or interest with respect to the Series 2015 Bond is not
paid within 15 days of the respective due date, the Purchaser may impose a late fee equal
to four percent (4%) of the delinquent amount.
SECTION 14. REPORTING FINANCIAL INFORMATION. As soon as
available, but not later than 270 days following the end of each Fiscal Year, the Issuer
shall provide the Purchaser with the Issuer's annual audited financial statements. The
Issuer shall provide the Purchaser with its annual budget within 30 days of adoption and
shall provide the Purchaser with other information relating to the Series 2015 Bond or the
security with respect thereto upon reasonable request.
SECTION 15. TRANSFER. The Holder of the Series 2015 Bond may sell,
transfer or assign the Series 2015 Bond in whole only in accordance with the provisions
of Section 2.08 of the Resolution 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 Holder of the Series 2015 Bond may transfer the Series 2015
Bond to an affiliate of the Holder without restriction. The Series 2015 Bondholder shall
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notify the Issuer and the Clerk of any sale, transfer or assignment of the Series 2015
Bond.
Notwithstanding the foregoing, the Purchaser may sell participations in the Series
2015 Bond to any number of Participants as long as the Purchaser complies with all
applicable securities laws.
SECTION 16. 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 the Resolution, the
Series 2015 Bond or any agreement contemplated to be executed in connection with the
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 the Resolution, the
Series 2015 Bond or any agreement contemplated to be executed in connection with the
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 17. 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 Supplemental Resolution, the Resolution, the Rate Lock Agreement or
the Escrow Agreement, or desirable or consistent with the requirements hereof or the
Resolution or the Escrow Agreement for the full punctual and complete performance of
all the terms, covenants and agreements contained herein or in the Series 2015 Bond, the
Resolution, the Rate Lock Agreement and the Escrow Agreement 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 Supplemental Resolution.
SECTION 18. MODIFICATION OR AMENDMENT OF THIS
SUPPLEMENTAL RESOLUTION. No modification or amendment of this
Supplemental 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.
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SECTION 19. SEVERABILITY AND INVALID PROVISIONS. If any
one or more of the covenants, agreements or provisions herein contained shall 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 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
2015 Bond.
SECTION 20. RESOLUTION TO CONTINUE IN FORCE. Except as
herein expressly provided, the Resolution and all the terms and provisions thereof are and
shall remain in full force and effect.
SECTION 21. DATE. This Supplemental Resolution shall become effective
immediately upon its adoption.
DULY ADOPTED, in Regular Session this 22nd day of September, 2015.
ATTEST: BOARD OF COUNTY COMMISSIONERS
DWIGHT E. BROCK, CLERK COLLIER COUNTY, FLORIDA, AS THE EX-
OFFICIO CHAIRMAN OF THE
GOVERNING BOARD OF THE COLLIER
COUNTY WATER-SEWER DISTRICT
By: By:
Derek Johnssen, Deputy Clerk Tim Nance, Chairman
Approved as to form
and legality:
Jeffrey A. Klatzkow
Count ° Attorney
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EXHIBIT A
PROPOSAL OF THE PURCHASER
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Collier County, Florida
Agusc 31.„ 2015
Bank of Amesica
FAerriH LYEICET
Eankoffunerica
Merin Lynch
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Summary of Terms and Conditions
Submission date: August 31,2015
Parties to the Transaction
Borrower: Collier County,Florida(the"Borrower" or the"City"or the"Issuer")
Bank of America,N.A. or any other subsidiary of Bank of America Corporation
Lender: ("BANA"or the"Bank"). W-9 forms will be submitted as requested upon award.
The Facility
Facility: Fully funded term loan
Facility Amount: Not to exceed$18,000,000
Security: First lien upon the Net Revenues of the County's Water and Sewer System and
certain charges imposed by the District on Persons(as further defined in the
Resolution). All security language shall be acceptable to the Bank and its
counsel.
Use of Proceeds: To refund a portion of Collier County's Water and Sewer Districts outstanding
Water and Sewer Revenue Bonds,Series 2006 and to pay the cost of issuance.
Optional reps ments and Commitment Reductions:
Prepayments are permitted at any time with three business days' prior notice.
All prepayments will be subject to a prepayment penalty as set forth on Exhibit
A hereto.
Interest Rates:
Interest Rate: An indicative non bank qualified Interest rate as of August 31, 2015 is 1.71%.
The actual rate shall be set two business days prior to closing utilizing the sum
of(i)the fixed rate of at 57 month interest rate swap rate having a floating rate
equal to three (3) month Libor as determined by linear interpolation plus 5
basis points. The Bank shall use Bloomberg to establish such rates.
If for any reason swap rates are no longer listed on Bloomberg, the Bank shall
select a comparable platform to determine the interest rate swap rate. The
above pricing formula is valid only if the loan is closed on or before October 30,
2015. After October 30, 2015, the formula is subject to change at Bank's sole
discretion.
The above interest rate assumes that this is a non bank qualified tax exempt
obligation and is subject to a legal opinion acceptable to the Bank and its
counsel.
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Repayment Terms/ Interest shall be payable semi-annually on January 1 and July 1, commencing
Maturity Date: on January 1,2016. Principal shall be due annually on July 1,commenicng July
1, 2017. Interest shall be calculated on a 30/360 day count basis. The
amortization is assumed as follows. Modification to amortization shall be
accepted at Bank's sole discretion.
July 1,2017 $2,523,000
July 1,2018 $2,575,000
July 1,2019 $2,625,000
July 1,2020 $2,680,000
July 1,2021 $2,739,000
July 1,2022 $4,585,000
Determination of Upon a Determination of Taxability with respect to the Facility, the Facility will
Taxability: bear interest from the date that taxability commences at a rate equal to the
product of the tax-exempt rate of interest otherwise in effect and the Taxable
Rate Factor(currently 1.54).
Determination of Taxability will only include circumstances resulting from the
action or inaction of the Issuer (e.g., will not include changes to the Internal
Revenue Code).
The Taxable Rate Factor is the amount by which the tax-exempt rate must be
mulitplied to achieve the equivenlant taxable ate given the highest margin
federal corporate tax rate, currently 35%. The Taxable Rate Factore is subject to
change should the highest marginal federal corporate tax rate change.
The Borrwer is also responsible for payment of any interest,penalties or charges
owed by the Lender as a result of interest on the Facility that accrues from
becoming includable in the gross income fo the Lender, together with any and
all attorneys' fees, court costs, or other out-of -pocket cost ncurred by th4e
Lender in connection therewith.
A change in the interest rate due to this provision will NOT trigger an
exception for the prepayment penalty provision.
Day Count: Interest of the Facility will be calculated on the basis of twelve 30 day months
and a 360 day year.
De:au.1-, na te: During the continuance of and default under the Facility, the interest rate shall
be increased to the maximum rate allowed under law.
Other Fees and Expenses
Lank Counsel: Fixed at 55.500 plus disbursements
Timing of Payments: All fees are non-refundable and are payable at closing in immediately available
funds.
Other Standard Provisions
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Indemnification: To the extent permitted by law,the Borrower will indemnify and bold harmless
BANA and its respective affiliates and its partners, directors, officers,
employees, agents and advisors from and against all losses, claims, damages,
liabilities and expenses arising out of or relating to the Facility, the Borrower's
use of loan proceeds or the commitment including, but not limited to,
reasonable attorneys' fees (including on appeal and including the allocated cost
of internal counsel) and settlement costs.This indemnification shall survive and
continue for the benefit of all such persons or entities.
Assignment and BANA will be permitted to make assignments to other financial institutions and
Participations: sell participations without the consent of the Borrower.
Waivers/ Amendments and waivers of the provisions of the Agreement and other
Amendments: definitive credit documentation will require the approval of BANA.
Choice of Law/Jury Trial/Venue
Governing Law: This Proposed Term Sheet and any other documents to which the Bank shall
become a party will be governed by the laws of the State of Florida.
jury Trial: The Issuer agrees, to the extent permitted under applicable law, to waive any
right to a trial by jury in any action or proceeding with respect to any dispute or
controversy under the Loan Documents.
Venue: Any litigation involving the Bank shall be brought in the appropriate Florida or
United States court having jurisdiction over the matter.
Description of the Basic Documentary Terms and Conditions
Representations and Warranties:
Standard for this type of facility subject to review and acceptance by Bank and it
counsel.
Covenants: Usual and customary for transactions of this type subject to review and
acceptance by Bank and it Counsel.
Financial; Covenants: The debt shall be subject to a rate covenant and additional bonds of 1.25x
defined as net revenues divided by annual debt service for the rate covenant
and maximum annual debt service for the additional bonds test and 1.00 times
defined as net revenues divided by annual debt service plus required reserve
deposits for the rate covenant and net revenues divided by maximum annual
debt service and reserve requirements for the additional bonds test. All final
covenant definitions are subject to review and acceptance by Bank and its
counsel.
R eportine Within 270 days after the close of each fiscal year of the Borrower,the Borrower
Requirements: shall provide complete audited financial statements of the Borrower. In
addition upon request by BANA, the Borrower shall provided the board
authorized budget and any such other information as the BANA may
reasonable request.
Pao-- CankafAmerica
Berri&[Lynch
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Events of Default: Usual and customary in transactions of this type including, without limitation,
the following: (i) nonpayment of principal, interest, fees or other amounts; (ii)
failure to perform or observe covenants set forth in the loan documentation; (iii)
any representation or warranty proving to have been incorrect when made or
confirmed; (iv) cross-default to other parity debt(v) bankruptcy, insolvency,
debt moratorium, etc.; (vi) monetary judgment defaults in an amount to be
agreed and material non-monetary judgment defaults; (vii) actual or asserted
invalidity or impairment of any loan documentation; and (viii) downgrade
below Baa3/BBB-/BBB- (or the equivalent) by Moody's, S&P or Fitch,
respectively.
Remedies: The Bank may, among other things, cause the Default Rate to apply to all
outstanding obligations of the Borrower to the Bank and pursue any other
remedies to which it is entitled under the Agreement, at law or in equity. For
any payment that is more than 15 days late, the Bank may impose a late fee
equal to 4% of the amount of the late payment.
Contacts
Bank of America,N.A.(BANA):
Name: Holly Kuhlman
Title: Senior Vice President
Address: 9128 Strada Place,Suite 10110
Naples,Florida 34103
Telephone: (239)598-8805
tly i , I
ennui::
Bank Counsel:
Bank Counsel: Mark Raymond
Address: 4360 Northlake Blvd,Suite 204
Palm Beach Gardens,Florida 33418
Telephone: (561)775-8440
email:
l-zoo oeed Terms and Conditions Subiect to Certain Events
This Slunlnar:!of Tories is intended only as an outline of certain of the material terms of the Facility and does not
purport to summarize all of the conditions, covenants, representations,, warranties and other provisions that tore/n'
Sc contained in definitive docunaentation for the Facility contemplated hereby. This Sumrnarl; of Terms is not a
commitment, It represents a willingness on the part of BANA to seek approval to provide the commitment indicated
herein and cC;isl!h1117e7te a transaction based upon the terms and conditions outlined in this terms sheet(777(1 is sithieCt
t0:
Final credit approval(see"Credit Process Timeframe" below),
Aasence of any material adverse change in the financial condition, operations or
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Merrill Lynch
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prospects of the Borrower, or in any law, rule or regulation (or their
interpretation or administration), that, in each case, may adversely affect the
consummation of the transaction, to be determined in the sole discretion of
BANA,
Such additional due diligence as the Lender may require,and
Agreement as to all final terms and conditions and satisfactory documentation
thereof(including satisfactory legal opinions).
Credit Process: The credit process will take 10 business days from the point at which the Bank is
officially awarded the transaction and has in its possession all materials
necessary to undertake a full credit analysis.
Expiration: Consideration of a financing based on the terms and conditions presented in this
term sheet shall automatically expire 15 days from the date hereof unless the
Bank has received this terms sheet executed by the City.
If the Bank issues a commitment,the Bank reserves the right to terminate,reduce
or otherwise amend its commitment if the subject transaction is not closed within
90 days of the receipt of a signed term sheet.
Future The terms,conditions, pricing levels and fees (including legal fees and expenses)
Modifications: cited herein reference the financing and the Facility Amount as described in this
Summary of Terms and Conditions and are subject to revision in the event that
(i) the Facility Amount changes, (ii) the security or transaction structure is
modified, (iii) the transaction deviates materially from what was initially
described in the RFP or in conjunction therewith, (iv) the proposed financing
does not close within 90 days of acceptance by the Borrower.
No Advisory or Fiduciary Role
This proposal is submitted in response to your Request for Proposals dated
August 17, 2015. The contents of this proposal and any subsequent discussions
between us, including any and all information, recommendations, opinions,
indicative pricing, quotations and analysis with respect to any municipal
financial product or issuance of municipal securities, are provided to you in
reliance upon the exemption provided for responses to requests for proposals or
qualifications under the municipal advisor rules (the "Rules") of the Securities
and Exchange Commission(Rule 15Ba1-1 et seq.).
In submitting this proposal, we are not undertaking to act as a "municipal
advisor" to you or any other person within the meaning of Section 15B of the
Securities Exchange Act of 1934 and the Rules. In connection with this proposal
and the transactions described herein, we are not acting as a financial advisor or
municipal advisor to you or any other person, and are not subject to any
fiduciary duty to you or to any other person. We understand that you will
consult with and rely on the advice of your own municipal, financial, tax, legal
and other advisors in connection with your evaluation of this proposal and the
transactions described herein.
The Issuer acknowledges and agrees that: (i) the transaction contemplated by
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this Summary of Terms and Conditions is an arm's length, commercial
transaction between the Issuer and the Bank in which the Bank is acting solely as
a principal and for its own interest; (ii) the Bank is not acting as a municipal
advisor or financial advisor to the Issuer; (iii) the Bank has no fiduciary duty
pursuant to Section 15B of the Securities Exchange Act of 1934 to the Issuer with
respect to the transaction contemplated hereby and the discussions,
undertakings and procedures leading thereto (irrespective of whether the Bank
has provided other services or is currently providing other services to the Issuer
on other matters); (iv)the only obligations the Bank has to the Issuer with respect
to the transaction contemplated hereby expressly are set forth in this Summary
of Terms and Conditions; and (v) the Bank is not recommending that the District
take an action with respect to the transaction contemplated by this Summary of
Terms and Conditions, and before taking any action with respect to the
contemplated transaction, Issuer should discuss the information contained
herein with its own legal, accounting, tax, financial and other advisors, as it
deems appropriate. If Issuer would like a municipal advisor in this transaction
that has legal fiduciary duties to Issuer, Issuer is free to engage a municipal
advisor to serve in that capacity. This Summary of Terms and Conditions is
provided to Issuer pursuant to and in reliance upon the "bank exemption"
provided under the municipal advisor rules of the Securities and Exchange
Commission,Rule 15Bal-1 et seq.
Agreement by the Borrower
The Borrower hereby agrees to engage Bank of America to provide the Facility,
which is the subject hereof, pursuant to the terms and conditions stated herein.
Please evidence your agreement with the foregoing by signing and returning a
copy of the document to Bank of America.
Accepted and Agreed to:
COLLIER COUNTY,FLORIDA
By: Date:
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Exhibit A
The[Bonds, Notes, Certificates, Borrower Note -*conform to defined terms] may be[prepaid, redeemed -
*Use Applicable Language] in whole, or in part, on [any date -*Use for Fixed Rate Transactions][at the
end of any Interest Rate Period -*Use For Variable Rate Transactions],with three (3)days prior written
notice to the[Bondholder, Noteholder, Certificate Holder, Bank, Lender-*conform to defined terms] by
payment in an amount equal to the principal amount to be[prepaid/redeemed -*Use Applicable
Language]plus accrued interest thereon to the date of[prepayment/redemption - *Use Applicable
Language] plus the Prepayment Fee. For purposes hereof, the Prepayment Fee will be the sum of fees
calculated separately for each Prepaid Installment, as follows:
(i) The Bank will first determine the amount of interest which would have accrued each
month at the Taxable Equivalent Rate for the Prepaid Installment had it remained outstanding until the
applicable Original Payment Date, using the interest rate applicable to the Prepaid Installment under this
Agreement.
(ii) The Bank will then subtract from each monthly interest amount determined in (i), above,
the amount of interest which would accrue for that Prepaid Installment if it were reinvested from the date
of prepayment or redemption through the Original Payment Date, using the Treasury Rate.
(iii) If(i) minus(ii)for the Prepaid Installment is greater than zero, the Bank will discount the
monthly differences to the date of prepayment or redemption by the Treasury Rate. The Bank will then
add together all of the discounted monthly differences for the Prepaid Installment.
The following definitions will apply to the calculation of the Prepayment Fee:
(i) "Original Payment Dates" mean the dates on which the prepaid or redeemed principal
would have been paid if there had been no prepayment or redemption. If any of the principal would have
been paid later than the end of the fixed rate interest period in effect at the time of prepayment or
redemption, then the Original Payment Date for that amount will be the last day of the interest period.
(ii) "Prepaid Installment"means the amount of the prepaid or redeemed principal which
would have been paid on a single Original Payment Date.
(iii) "Taxable Equivalent Rate" means the interest rate per annum derived from the following
formula: [interest rate on the Bond, Note, Certificate, Borrower Note -*Use Applicable Term]divided by
the difference of(1 minus the Maximum Corporate Income Tax Rate). The"Maximum Corporate Income
Tax Rate" is the highest marginal federal income tax rate charged to U.S. corporations in effect at the
time of the prepayment calculation. The"Maximum Corporate Income Tax Rate" is currently 35% (or
0.35 in numerical terms).
(iv) "Treasury Rate" means the yield on the Treasury Constant Maturity Series with maturity equal to
the Original Payment Date of the Prepaid Installment which are principal payments (calculated as of the
[date of redemption/prepayment -*Use Applicable Language] in accordance with accepted financial
practice and rounded to the nearest quarter-year), as reported in Federal Reserve Statistical Release
H.15, Selected Interest Rates of the Board of Governors of the Federal Reserve System, or any
successor publication. If no maturity exactly corresponding to such Original Payment Date appears in
Release H.15, the Treasury Rate will be determined by linear interpolation between the yields reported in
Release H.15. If for any reason Release H.15 is no longer published, the [Bondholder, Noteholder,
Certificate Holder, Bank, Lender, *conform to defined terms] shall select a comparable publication to
determine the Treasury Rate.
Bankof America
Merrill Lynch
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EXHIBIT B
FORM OF ESCROW DEPOSIT AGREEMENT
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ESCROW DEPOSIT AGREEMENT
ESCROW DEPOSIT AGREEMENT, dated as of September 30, 2015, by and
between COLLIER COUNTY WATER-SEWER DISTRICT (the "District"), and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (the "Escrow
Agent"), a national banking association existing under the laws of the United States of
America, having its designated place of business in Jacksonville, Florida, the address of
which is 10161 Centurion Parkway, Jacksonville, Florida 32256, as escrow agent
hereunder.
WHEREAS, the District has heretofore issued its Collier County Water-Sewer
District Water and Sewer Revenue Bonds, Series 2006 (the "Series 2006 Bonds")
pursuant to Resolution No. CWS-85-5 adopted on July 30, 1985, as amended and restated
by Resolution No. CWS-85-13 adopted on December 26, 1985, as amended and
supplemented (collectively, the "Resolution"); and
WHEREAS, the District has determined to exercise its option under the
Resolution to advance refund that portion of the outstanding Series 2006 Bonds which
are described on Schedule A attached hereto (the "Refunded Bonds"); and
WHEREAS, the District has determined to issue its $ aggregate
principal amount of Collier County Water-Sewer District Water and Sewer Refunding
Revenue Bond, Series 2015 (the "Series 2015 Bond") pursuant to the Resolution, a
portion of the proceeds of which Series 2015 Bond will be used to purchase certain
United States Treasury obligations in order to provide payment for the Refunded Bonds
and discharge and satisfy the pledge of the Pledged Funds (as defined in the Resolution)
and the covenants, agreements and other obligations of the District under the Resolution
in regard to such Refunded Bonds; and
WHEREAS, the issuance of the Series 2015 Bond, the purchase by the Escrow
Agent of the hereinafter defined Escrow Securities, the deposit of such Escrow Securities
into an escrow deposit trust fund to be held by the Escrow Agent and the discharge and
satisfaction of the pledge of the Pledged Funds and the covenants, agreements and other
obligations of the District under the Resolution in regard to the Refunded Bonds shall
occur as a simultaneous transaction; and
WHEREAS, this Agreement is intended to effectuate such simultaneous
transaction;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
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SECTION 1. PREAMBLES. The District represents that the recitals
stated above are true and correct and incorporated herein.
SECTION 2. RECEIPT OF RESOLUTION AND VERIFICATION
REPORT. Receipt of a true and correct copy of the above-mentioned Resolution and
this Agreement is hereby acknowledged by the Escrow Agent. The applicable and
necessary provisions of the Resolution, including but not limited to Article III and
Section 9.01 of the Resolution, are incorporated herein by reference. The Escrow Agent
also acknowledges receipt of the verification report of Robert Thomas CPA, LLC, dated
September 30, 2015 (the "Verification Report"). Reference herein to or citation herein of
any provisions of the Resolution or the Verification Report shall be deemed to
incorporate the same as a part hereof in the same manner and with the same effect as if
the same were fully set forth herein.
SECTION 3. DISCHARGE OF PLEDGE OF HOLDERS OF
REFUNDED BONDS. The District by this writing exercises its option under Section
9.01 of the Resolution to cause the pledge of the Pledged Funds and all covenants,
agreements and other obligations of the District under the Resolution to the holders of the
Refunded Bonds to cease, terminate and become void and be discharged and satisfied.
SECTION 4. ESTABLISHMENT OF ESCROW FUND. There is
hereby created and established with the Escrow Agent a special, segregated and
irrevocable escrow fund designated the "Collier County Water-Sewer District Water and
Sewer Revenue Bonds, Series 2006, Escrow Deposit Trust Fund" (the "Escrow Fund").
The Escrow Fund therein shall be held in the custody of the Escrow Agent as a trust fund
for the benefit of the holders of the Refunded Bonds separate and apart from other funds
and accounts of the District and the Escrow Agent. The Escrow Agent hereby accepts the
Escrow Fund and acknowledges the receipt of and deposit to the credit of the Escrow
Fund the sum of$ received from the District from proceeds of the Series
2015 Bonds (the "Bond Proceeds") and $ received from the District from
certain moneys on deposit in certain funds and accounts allocated to the Refunded Bonds
(the "District Moneys").
SECTION 5. DEPOSIT OF MONEYS AND SECURITIES IN
ESCROW FUND. The District hereby directs and the Escrow Agent represents and
acknowledges that, concurrently with the deposit of the Bond Proceeds and District
Moneys under Section 4 above, it has used $ of the Bond Proceeds and
$ of District Moneys to purchase on behalf of and for the account of the
District certain United States Treasury obligations (collectively, together with any other
securities which may be on deposit, from time to time, in the Escrow Fund, the "Escrow
Securities"), which are described in Schedule B hereto, and the Escrow Agent will
deposit such Escrow Securities and $ in cash (the "Cash Deposit") in the
Escrow Fund. All Escrow Securities shall be noncallable. direct obligations of the United
States of America.
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In the event any of the Escrow Securities described in Schedule B hereto are not
available for delivery on September 30, 2015, the Escrow Agent may, at the written
direction of the District and with the approval of the District's bond counsel ("Bond
Counsel"), substitute other United States Treasury obligations and shall credit such other
obligations to the Escrow Fund and hold such obligations until the aforementioned
Escrow Securities have been delivered. Bond Counsel shall, as a condition precedent to
giving its approval, require the District to provide it with a revised Verification Report in
regard to the adequacy of the Escrow Securities, taking into account the substituted
obligations to pay the Refunded Bonds in accordance with the terms hereof. The Escrow
Agent shall in no manner be responsible or liable for failure or delay of Bond Counsel or
the District to promptly approve the substitutions of other United States Treasury
obligations for the Escrow Fund.
SECTION 6. SUFFICIENCY OF ESCROW SECURITIES AND THE
CASH DEPOSIT. In reliance upon the Verification Report, the District represents that
the Cash Deposit and the interest on and the principal amounts successively maturing on
the Escrow Securities in accordance with their tends (without consideration of any
reinvestment of such maturing principal and interest) are sufficient such that moneys will
be available to the Escrow Agent in amounts sufficient and at the times required to pay
the amounts of principal of, premium, if any, and interest due and to become due on the
Refunded Bonds as described in Schedule C attached hereto. If the Escrow Securities
and the Cash Deposit shall be insufficient to make such payments, the District shall
timely deposit to the Escrow Fund, solely from legally available funds of the District,
such additional amounts as may be required to pay the Refunded Bonds as described in
Schedule C hereto. Notice of any insufficiency shall be given by the Escrow Agent to the
District as promptly as possible, but the Escrow Agent shall in no manner be responsible
for the District's failure to make such deposits.
SECTION 7. ESCROW SECURITIES AND THE CASH DEPOSIT IN
TRUST FOR HOLDERS OF REFUNDED BONDS. The deposit of the Escrow
Securities and the Cash Deposit in the Escrow Fund shall constitute an irrevocable
deposit of Federal Securities (as defined in the Resolution) and cash in trust solely for the
payment of the principal of, premium. if any, and interest on the Refunded Bonds at such
times and in such amounts as set forth in Schedule C hereto, and the principal of and
interest earnings on such Escrow Securities and the Cash Deposit shall be used solely for
such purpose.
SECTION 8. ESCROW AGENT TO PAY REFUNDED BONDS
FROM ESCROW FUND. The District hereby directs, and the Escrow Agent hereby
agrees, that it will take all actions required to be taken by it under the provisions of the
Resolution referenced in this Agreement, including the timely transfer of money to the
paying agent for the Refunded Bonds (U.S. Bank National Association) as provided in
the Resolution, in order to effectuate this Agreement and to pay the Refunded Bonds in
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the amounts and at the times provided in Schedule C hereto. The Escrow Securities and
the Cash Deposit shall be used to pay debt service on the Refunded Bonds as they mature
or are redeemed prior to maturity. The Refunded Bonds shall be redeemed prior to their
respective maturities on July 1, 2016 (the "Redemption Date") at a redemption price
equal to 100% of the principal amount of each Refunded Bond, plus interest accrued to
the Redemption Date. If any payment date shall be a day on which either the paying
agent for the Refunded Bonds or the Escrow Agent is not open for the acceptance or
delivery of funds, then the Escrow Agent may make payment on the next business day.
The liability of the Escrow Agent for the payment of the principal of, premium, if any,
and interest on the Refunded Bonds pursuant to this Agreement shall be limited to the
application of the Escrow Securities and the Cash Deposit and the interest earnings
thereon available for such purposes in the Escrow Fund.
SECTION 9. REINVESTMENT OF MONEYS AND SECURITIES IN
ESCROW FUND. Moneys deposited in the Escrow Fund shall be invested, other than
the Cash Deposit, only in the Escrow Securities listed in Schedule B hereto and, except as
provided in Section 5 hereof and this Section 9, neither the District nor the Escrow Agent
shall otherwise invest or reinvest any moneys in the Escrow Fund.
Except as provided in Section 5 hereof and in this Section 9, the Escrow Agent
may not sell or otherwise dispose of any or all of the Escrow Securities or the Cash
Deposit in the Escrow Fund and reinvest the proceeds thereof in other securities nor may
it substitute securities for any of the Escrow Securities, except upon written direction of
the District and where, prior to any such reinvestment or substitution, the Escrow Agent
has received from the District the following:
(a) a written verification report by a firm of independent certified public
accountants, of recognized standing, appointed by the District and
acceptable to the Escrow Agent, to the effect that after such reinvestment or
substitution the principal amount of Escrow Securities, together with the
interest therein and any uninvested cash, will be sufficient to pay the
Refunded Bonds as described in Schedule C hereto; and
(b) a written opinion of nationally recognized Bond Counsel to the effect that
(i) such investment will not cause the Series 2015 Bonds or the Refunded
Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Internal Revenue Code, as amended, and the regulations promulgated
thereunder or otherwise cause the interest on the Refunded Bonds or the
Series 201.5 Bonds to be included as gross income for purposes of federal
income taxation, and (ii) such investment does not violate any provision of
Florida law or of the Resolution.
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The above-described verification report need not be provided in the event the District
purchases Escrow Securities with the proceeds of maturing Escrow Securities and such
purchased Escrow Securities mature on or before the next interest payment date for the
Refunded Bonds and have a face amount which is at least equal to the cash amount
invested in such Escrow Securities.
In the event the above-referenced verification concludes that there are surplus
moneys in the Escrow Fund, such surplus moneys shall be released to the District upon
its written direction. The Escrow Fund shall continue in effect until the date upon which
the Escrow Agent makes the final payment to the paying agent for the Refunded Bonds in
an amount sufficient to pay the Refunded Bonds as described in Schedule C hereto,
whereupon the Escrow Agent shall sell or redeem any Escrow Securities remaining in the
Escrow Fund, and shall remit to the District the proceeds thereof, together with all other
money, if any, then remaining in the Escrow Fund.
SECTION 10. REDEMPTION OF CERTAIN OF THE REFUNDED
BONDS. The District hereby irrevocably instructs the Escrow Agent to give, or cause
the Registrar and Paying Agent for the Refunded Bonds (U.S. Bank National
Association) to give, on behalf of the District, at the appropriate times the notice or
notices, if any, required by the Resolution in connection with the redemption of the
Refunded Bonds. The Refunded Bonds shall be redeemed on July 1, 2016 at a
redemption price equal to 100% of the principal amount thereof, plus accrued interest.
The Escrow Agent shall file, or cause the Registrar for the Refunded Bonds to file, such
redemption notice with the Electronic Municipal Market Access within 10 days of it
being so given.
SECTION 11. DEFEASANCE NOTICE TO HOLDERS OF
REFUNDED BONDS. Concurrently with the deposit of the Escrow Securities and Cash
Deposit set forth in Section 5 hereof, the Refunded Bonds shall be deemed to have been
paid within the meaning and with the effect expressed in Section 9.01 of the Resolution.
Within 60 days of the deposit of moneys into the Escrow Fund, the Escrow Agent, on
behalf of the District, shall mail, or cause the Paying Agent for the Refunded Bonds (U.S.
Bank National Association) to mail, to the Holders of the Refunded Bonds the
appropriate notice in substantially the form provided in Schedule D attached hereto. The
Escrow Agent shall file, or cause the Registrar for the Refunded Bonds to file, such
defeasance notice with the Electronic Municipal Market Access within 10 days of the
date hereof.
SECTION 12. ESCROW FUND IRREVOCABLE. The Escrow Fund
hereby created shall be irrevocable and the holders of the Refunded Bonds shall have an
express lien on all Escrow Securities and the Cash Deposit deposited in the Escrow Fund
pursuant to the terms hereof and the interest earnings thereon until paid out, used and
applied in accordance with this Agreement and the Resolution. Neither the District nor
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the Escrow Agent shall cause nor permit any other lien or interest whatsoever to be
imposed upon the Escrow Fund.
SECTION 13. AMENDMENTS TO AGREEMENT. This Agreement is
made for the benefit of the District and the holders from time to time of the Refunded
Bonds and it shall not be repealed, revoked, altered or amended without the written
consent of all such holders and the written consent of the Escrow Agent; provided,
however, that the District and the Escrow Agent may, without the consent of, or notice to,
such holders, enter into such agreements supplemental to this Agreement as shall not
adversely affect the rights of such holders and as shall not be inconsistent with the terms
and provisions of this Agreement, for any one or more of the following purposes:
(a) to cure any ambiguity or formal defect or omission in this Agreement;
(b) to grant, or confer upon, the Escrow Agent for the benefit of the holders of
the Refunded Bonds, any additional rights, remedies, powers or authority
that may lawfully be granted to, or conferred upon, such holders or the
Escrow Agent; and
(c) to subject to this Agreement additional funds, securities or properties.
The Escrow Agent shall be entitled to rely exclusively upon an unqualified
opinion of Bond Counsel with respect to compliance with this Section 13, including the
extent, if any, to which any change, modification or addition affects the rights of the
holders of the Refunded Bonds, or that any instrument executed hereunder complies with
the conditions and provisions of this Section 13.
SECTION 14. FEES AND EXPENSES OF ESCROW AGENT;
INDEMNIFICATION. In consideration of the services rendered by the Escrow Agent
under this Agreement, the District agrees to and shall pay to the Escrow Agent the fees
and expenses as shall be agreed to in writing by the parties hereto. The Escrow Agent
shall have no lien whatsoever upon any of the Escrow Securities in the Escrow Fund for
the payment of such proper fees and expenses. To the extent allowed by applicable law,
the District further agrees to indemnify and save the Escrow Agent harmless, to the
extent allowed by law, against any liabilities which it may incur in the exercise and
performance of its powers and duties hereunder, and which are not due to the Escrow
Agent's own negligence or misconduct. Indemnification provided under this Section 14
shall survive the termination of this Agreement.
Whenever the Escrow Agent shall deem it necessary or desirable that a matter be
proved or established prior to taking, suffering or omitting any action under this
Agreement, such matter may be deemed to be conclusively established by a certificate
signed by an authorized officer of the District. The Escrow Agent may conclusively rely,
as to the correctness of statements, conclusions and opinions therein, upon any certificate,
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report, opinion or other document furnished to the Escrow Agent pursuant to any
provision of this Agreement; the Escrow Agent shall be protected and shall not be liable
for acting or proceeding, in good faith,upon such reliance; and the Escrow Agent shall be
under no duty to make any investigation or inquiry as to any statements contained or
matters referred to in any such instrument. The Escrow Agent may consult with counsel,
who may be counsel to the District or independent counsel, with regard to legal
questions, and the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered by it hereunder in good faith in
accordance herewith. Prior to retaining such independent counsel, the Escrow Agent
shall notify the District of its intention.
The Escrow Agent and its successors, agents and servants shall not be held to any
personal liability whatsoever, in tort, contract or otherwise, by reason of the execution
and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance
and disposition of the various moneys and funds described herein, the purchase, retention
or payment, transfer or other application of funds or securities by the Escrow Agent in
accordance with the provisions of this Agreement or any non-negligent act, omission or
error of the Escrow Agent made in good faith in the conduct of its duties. The Escrow
Agent shall, however, be liable to the District and to holders of the Refunded Bonds to
the extent of their respective damages for negligent or willful acts, omissions or errors of
the Escrow Agent which violate or fail to comply with the terms of this Agreement. The
duties and obligations of the Escrow Agent shall be determined by the express provisions
of this Agreement.
SECTION 15. REPORTING REQUIREMENTS OF ESCROW AGENT.
As soon as practicable after the first day of January and July of each year, commencing
January 1, 2016, so long as the Escrow Fund is maintained under this Agreement, the
Escrow Agent shall forward in writing to the District a statement in detail of the Escrow
Securities held as of January 1 and July 1 of that year, whichever is applicable, and the
income and maturities thereof, and withdrawals of money from the Escrow Fund, since
the last statement furnished pursuant to this Section 15.
SECTION 16. RESIGNATION OR REMOVAL OF ESCROW AGENT.
The Escrow Agent, at the time acting hereunder, may at any time resign and be
discharged from the duties and obligations hereby created by giving not less than 60 days'
written notice to the District and mailing notice thereof, specifying the date when such
resignation will take effect to the holders of all Refunded Bonds then outstanding, but no
such resignation shall take effect unless a successor Escrow Agent shall have been
appointed by the holders of a majority in aggregate principal amount of the Refunded
Bonds then outstanding or by the District as hereinafter provided and such successor
Escrow Agent shall have accepted such appointment, in which event such resignation
shall take effect immediately upon the appointment and acceptance of a successor Escrow
Agent.
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The Escrow Agent may be replaced at any time by an instrument or concurrent
instruments in writing, delivered to the Escrow Agent and signed by either the District or
the holders of a majority in aggregate principal amount of the Refunded Bonds then
outstanding. Such instrument shall provide for the appointment of a successor Escrow
Agent, which appointment shall occur simultaneously with the removal of the Escrow
Agent.
In the event the Escrow Agent hereunder shall resign or be removed, or be
dissolved, or shall be in the course of dissolution or liquidation, or otherwise become
incapable of acting hereunder, or in case the Escrow Agent shall be taken under the
control of any public officer or officers, or of a receiver appointed by a court, a successor
may be appointed by the holders of a majority in aggregate principal amount of the
Refunded Bonds then outstanding by an instrument or concurrent instruments in writing,
signed by such holders, or by their attorneys in fact, duly authorized in writing; provided,
nevertheless, that in any such event, the District shall appoint a temporary Escrow Agent
to fill such vacancy until a successor Escrow Agent shall be appointed by the holders of a
majority in aggregate principal amount of the Refunded Bonds then outstanding in the
manner above provided, and any such temporary Escrow Agent so appointed by the
District shall immediately and without further act be superseded by the Escrow Agent so
appointed by such holders. The District shall mail notice of any such appointment made
by it at the times and in the manner described in the first paragraph of this Section 16.
In the event that no appointment of a successor Escrow Agent or a temporary
successor Escrow Agent shall have been made by such holders or the District pursuant to
the foregoing provisions of this Section 16 within 60 days after written notice of
resignation of the Escrow Agent has been given to the District, the holder of any of the
Refunded Bonds or any retiring Escrow Agent may apply to any court of competent
jurisdiction for the appointment of a successor Escrow Agent. and such court may
thereupon, after such notice, if any, as it shall deem proper, appoint a successor Escrow
Agent.
In the event of replacement or resignation of the Escrow Agent, the Escrow Agent
shall have no further liability hereunder and the District shall indemnify and hold
harmless the Escrow Agent, to the extent allowed by law, from any such liability,
including reasonable costs or expenses incurred by the Escrow Agent or its counsel.
No successor Escrow Agent shall be appointed unless such successor Escrow
Agent shall be a corporation with trust powers organized under the banking laws of the
United States or any State, and shall have at the time of appointment capital and surplus
of not less than $30.000.000.
Every successor Escrow Agent appointed hereunder shall execute, acknowledge
and deliver to its predecessor and to the District an instrument in writing accepting such
appointment hereunder and thereupon such successor Escrow Agent, without any further
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act, deed or conveyance, shall become fully vested with all the rights, immunities,
powers, trusts, duties and obligations of its predecessor; but such predecessor shall
nevertheless, on the written request of such successor Escrow Agent or the District
execute and deliver an instrument transferring to such successor Escrow Agent all the
estates, properties, rights, powers and trust of such predecessor hereunder; and every
predecessor Escrow Agent shall deliver all securities and moneys held by it to its
successor; provided, however, that before any such delivery is required to be made, all
fees, advances and expenses of the retiring or removed Escrow Agent shall be paid in
full. Should any transfer, assignment or instrument in writing from the District be
required by any successor Escrow Agent for more fully and certainly vesting in such
successor Escrow Agent the estates, rights, powers and duties hereby vested or intended
to be vested in the predecessor Escrow Agent, any such transfer, assignment and
instruments in writing shall, on request, be executed, acknowledged and delivered by the
District.
Any corporation into which the Escrow Agent, or any successor to it in the trusts
created by this Agreement, may be merged or converted or with which it or any successor
to it may be consolidated, or any corporation resulting from any merger, conversion,
consolidation or tax-free reorganization to which the Escrow Agent or any successor to it
shall be a party shall be the successor Escrow Agent under this Agreement without the
execution or filing of any paper or any other act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 17. TERMINATION OF AGREEMENT. This Agreement
shall terminate when all transfers and payments required to be made by the Escrow Agent
under the provisions hereof shall have been made. Upon such termination, all moneys
remaining in the Escrow Fund shall be released to the District.
SECTION 18. GOVERNING LAW. This Agreement shall be governed by
the applicable laws of the State of Florida. Any action or proceeding, in law or equity,
arising out of or in any way related to this Agreement or the obligations hereunder shall
be in Collier County, Florida.
SECTION 19. SEVERABILITY. If any one or more of the covenants or
agreements provided in this Agreement on the part of the District or the Escrow Agent to
be performed should be determined by a court of competent jurisdiction to be contrary to
law, such covenant or agreement shall be deemed and construed to be severable from the
remaining covenants and agreements herein contained and shall in no way affect the
validity of the remaining provisions of this Agreement.
SECTION 20. COUNTERPARTS. This Agreement may be executed in
several counterparts, all or any of which shall be regarded for all purposes as one original
and shall constitute and be but one and the same instrument.
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SECTION 21. NOTICES. Any notice, authorization, request or demand
required or permitted to be given in accordance with the telius of this Agreement shall be
in writing and sent by registered or certified mail addressed to:
Collier County, Florida
Collier County Government Complex
3299 Tamiami Trail East, #202
Naples, Florida 34112
Attention: County Manager
Facsimile: (239) 252-8588
The Bank of New York Mellon Trust Company, N.A.
10161 Centurion Parkway
Jacksonville, Florida 32256
Attention: Corporate Trust Department
Facsimile: (904) 645-1997
IN WITNESS WHEREOF, the parties hereto have each caused this Escrow
Deposit Agreement to be executed by their duly authorized officers and appointed
officials and their seals to be hereunder affixed and attested as of the date first written
herein.
ATTEST: COLLIER COUNTY WATER-SEWER
DWIGHT E. BROCK, CLERK DISTRICT
By: By:
Derek Johnssen, Deputy Clerk Chairman, Board of County Commissioners
of Collier County, Florida. as the Ex-Officio
Chairman of the Governing Board of the
Collier County Water-Sewer District
Approved as to form
and legal sufficiency:
Jeffrey A. Klatzkow
County Attorney
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THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Escrow Agent
By:
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SCHEDULE A
DESCRIPTION OF THE REFUNDED BONDS
Maturity Principal Interest
(July 1) Amount Rate
2017 $2,310,000 4.250%
2018 2,410,000 4.250
2019 2,510,000 4.250
2020 2,620,000 4.000
2021 2,730,000 4.000
2022 4,630,000 4.125
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SCHEDULE B
ESCROW SECURITIES
District Moneys
Type Maturity Date Par Amount Rate Total Cost
Bond Proceeds
Type Maturity Date Par Amount Rate Total Cost
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SCHEDULE C
DISBURSEMENT REQUIREMENTS FOR REFUNDED BONDS
Principal
Date Interest Redeemed Total
January 1, 2016
July 1, 2016
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SCHEDULE D
FORM OF NOTICE OF DEFEASANCE
Notice is hereby given pursuant to Resolution No. CWS-85-5 adopted on July 30,
1985, as amended and restated by Resolution No. CWS-85-13 adopted on December 26,
1985, as amended and supplemented, that the Collier County Water-Sewer District Water
and Sewer Revenue Bonds, Series 2006, set forth below (the "Refunded Bonds") are
deemed to be paid within the meaning of Section 9.01 of the Resolution and shall no
longer be payable from the Pledged Funds as provided under the Resolution and shall be
secured solely from the irrevocable deposit of U.S. Treasury obligations and cash made
by the District with The Bank of New York Mellon Trust Company, N.A., as Escrow
Agent, in accordance with Section 9.01 of the Resolution.
Further, the Refunded Bonds shall be redeemed, prior to their respective
maturities, on July 1, 2016 (the "Redemption Date") at a redemption price equal to 100%
of the principal amount of each Refunded Bond to be redeemed, together with interest
accrued thereon to the Redemption Date.
The Refunded Bonds to be defeased and redeemed are as follows:
Maturity Principal Interest
CUSIP No.* (July 1) Amount Rate
222642HR4 2017 $2.310,000 4.250%
222642HS2 2018 2,410,000 4.250
222642HT0 2019 2,510,000 4.250
222642HU7 2020 2,620,000 4.000
222642HV5 2021 2,730,000 4.000
222642HW3 2022 4,630,000 4.125
* The District is not responsible for the CUSIP Numbers and no representation is made as to their
accuracy.
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EXHIBIT C
COPY OF RATE LOCK AGREEMENT
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Rate Lock Agreement
I. Collier Water-Sewer District (the "District"), a dependent special district of the State
of Florida, has requested Bank of America,N.A., a national bank(the "Lender") to make a loan
(the "Loan") to the District in the principal amount of not less than$17,634,000.00 and not more
than $17,734,000.00 (the "Amount"). The Loan will be made on September 30, 2015 (the
"Closing Date"), will bear interest calculated on the basis of a 360 day year consisting of twelve
thirty day months, payable in arrears on January 1, 2016 and each January 1 and July 1
thereafter, will be repaid in installments of principal due on July 1 of the years and in the
amounts set forth on Exhibit A attached hereto (subject to adjustment as herein provided), and
will mature on July 1,2022 (the "Maturity Date"). The amortization schedule attached as Exhibit
A provides for the amortization of$17,734,000.00, and in the event the Amount of the Loan is
less than $17,734,000.00 (but not less than $17,634,000.00), the District may reduce the
scheduled amortization shown on Exhibit A in any year or years in an aggregate amount not in
excess of the difference between $17,734,000.00 and the Amount of the Loan.The Loan will be
issued as an "Additional Bond" pursuant to the District's Resolution CWS-85-5 (the "Bond
Resolution")of the District, adopted July 30, 1985, as the same has been supplemented, amended
and restated through the date hereof, and shall have such other terms and conditions as set forth
in the Summary of Terms and Conditions of the Lender, dated August 31, 2015 (the "Terms
Sheet")attached hereto as Exhibit B as the same may be modified hereby.
2. The District desires to obtain the agreement of the Lender that the Loan will bear an
interest rate locked in by the Lender at this time. In response to the District's request, the Lender
has agreed to lock in a fixed rate(the "Rate") for the Loan of 1.75%per annum.
3. The District understands that, if the Loan is not funded in the Amount and by 5:00
p.m. Eastern Time on the Closing Date (such funding and delivery being referred to herein as the
"Closing"), the Lender may suffer breakage costs and other losses, expenses and liabilities,
including lost revenue and lost profits, as a result of having locked in the interest rate in advance.
Accordingly, in consideration of the Lender's agreement to lock in the Rate, the District agrees to
pay to the Lender a breakage fee (the "Breakage Fee") as provided herein in the event the
Closing does not occur on the Closing Date for any reason other than the Lender's refusal to fund
the Loan pursuant to and in breach of the terms and conditions set forth in the Terms Sheet. Once
the Closing occurs on the Closing Date,this Agreement will terminate.
4. The Breakage Fee will be determined on the assumption that the Loan fully funded on
the Closing Date and was then immediately prepaid by the District in full, and as follows:
(i} The Lender will first determine the amount of interest which would have accrued as of
each scheduled payment date for each Prepaid Installment (hereinafter defined) had it remained
outstanding from the Closing Date until the Original Payment Date (hereinafter defined) using an
interest rate equal to the Rate.
(ii) The Lender will then subtract from each interest amount determined in (i), above, the
amount of interest which would have accrued on each respective Prepaid Installment as of each
scheduled payment date if it were reinvested from Closing Date through the Original Payment
Date, using the Swap Rate as of the Closing Date.
(iii) If(i) minus (ii) for a Prepaid Installment is greater than zero,the Lender will discount the
periodic differences to the Closing Date using the Swap Rate as the discount rate.The sum of the
discounted periodic differences for each Prepaid Installment will be the Breakage Fee.
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The following definitions will apply to the calculation of the Breakage Fee:
(i) "Original Payment Date"means the dates on which principal is required to be paid as set
forth on Exhibit A.
(ii) "Prepaid Installment" means any amount of principal that is paid prior to its Original
Payment Date.
(iii) "Swap Rate" means the fixed rate for an interest rate swap with a floating rate of three
month Libor and having a term of 57 months as reported on a commercially reasonable source
selected by the Lender at or most recently prior to 5:00 p.m.Eastern Time on the applicable date.
If no term exactly corresponding to 57 months is reported,the Swap Rate will be determined by
linear interpolation between the reported terms that are the closest shorter and longer terms
reported.
5. The District agrees that the Breakage Fee represents a reasonable estimate of the
breakage costs and other losses, expenses and liabilities, including lost revenue and lost profits,
that the Lender may suffer if the Closing does not occur in the Amount on the Closing Date.The
District agrees that the Lender's willingness to lock in the Rate in advance of the Closing Date is
sufficient consideration for the District's agreement to pay the Breakage Fee. Any Breakage Fee
will be due and payable in full on the day immediately following the Closing Date.
6. This Agreement is dated September 2, 2015 and shall be governed by Florida law.
Any amount due under this Agreement which is not paid upon demand by the Lender shall bear
interest until paid at the Rate plus five percentage points. The parties hereby waive trial by jury
in any dispute between the parties concerning this Agreement. The prevailing party in any
litigation (including any appeal) will be entitled to its reasonable attorneys' fees, including the
allocated cost of in-house counsel.
7. To secure the obligations of the District to the Lender hereunder,the District grants to
the Lender a lien upon and security interest in the Gross Revenues, as defined in the Bond
Resolution, provided that such lien and pledge is subordinate in all respects to the lien on and
pledge of Pledged Funds given to secure Bonds and Subordinated Indebtedness as such terms are
defined in and as provided in the Bond Resolution. The obligations of the District to the Lender
hereunder are subject to the ratification of this agreement by the Board of County
Commissioners of Collier County,ex-officio as the governing body of the District, by resolution
duly adopted on or before September 22,2015, and if not so ratified then this agreement shall be
null and void after September 22,2015.
8. The addresses of the Lender and District are set forth below.
Bahl of America,N.A. / Collier Water-Sever District
By ♦ fE�1.�''�- Bd -�,.; c `1' _%, tom
Name:Ho . Kuhlman Name:Leo Ochs
Title: Senior Vice President Title:County Administraiorl
Address: 150 N. College St Address: Collier County Government Complex
NCI-028-17-06 3299 Tamiami Trail East
Charlotte,NC 28255 Naples,Florida 34112
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SOURCES AND USES OF FUNDS
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Dated Date 09/30/2015
Delivery Date 09/30/2015
Sources:
Bond Proceeds:
Par Amount 17,734,000.00
Other Sources of Funds:
Prior Sinking Fund 178,065.63
Reserve Release 79,257.80
257,323.43
17,991,323.43
Uses:
Refunding Escrow Deposits:
Cash Deposit 17,922,262.50
Delivery Date Expenses:
Cost of Issuance 68,257.90
Other Uses of Funds:
Additional Proceeds 803.03
17,991,323.43
Note: *Preliminary Numbers for discussion purposes only.
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BOND SUMMARY STATISTICS
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Dated Date 09/30/2015
Delivery Date 09/30/2015
First Coupon 01/01/2016
Last Maturity 07/01/2022
Arbitrage Yield 1.750219%
True Interest Cost(TIC) 1.750219%
Net Interest Cost(NIC) 1.750000%
All-In TIC 1.839299%
Average Coupon 1.750000%
Average Life(years) 4.552
Duration of Issue(years) 4.369
Par Amount 17,734,000.00
Bond Proceeds 17,734,000.00
Total Interest 1,412,840.82
Net Interest 1,412,840.82
Total Debt Service 19,146,840.82
Maximum Annual Debt Service 4,648,957.50
Average Annual Debt Service 2,835,402.18
Underwriter's Fees(per 81000)
Average Takedown
Other Fee
Total Underwriter's Discount
Bid Price 100.000000
Par Average Average PV of I bp
Bond Component Value Price Coupon Life change
Bond Component 17,734.000.00 100.000 1.750% 4.552 7,786.70
17,734.000.00 4.552 7,786.70
All-ln Arbitrage
TIC TIC Yield
Par Value 17.734.000.00 17.734.000.00 17.734.000.00
+Accrued Interest
+Premium(Discount)
-underwriter's Discount
-Cost))f Issuance Expense -68,257.90
-Other Amounts
Target Value 17.734,000.00 17.665,742.10 17,734.000.00
Target Date 09/30/2015 09%30/2015 09/30.2015
Yield 1.750219% 1.839299% 1.750219%
Note: *Preliminary Numbers for discussion purposes only.
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SUMMARY OF REFUNDING RESULTS
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Dated Date 09/30/2015
Delivery Date 09/30/2015
Arbitrage yield 1.750219%
Escrow yield 0.000000%
Value of Negative Arbitrage
Bond Par Amount 17,734,000.00
True Interest Cost 1.750219%
Net Interest Cost 1.750000%
Average Coupon 1.750000%
Average Life 4.552
Par amount of refunded bonds 17,210,000.00
Average coupon of refunded bonds 4.112339%
Average life of refunded bonds 4.621
PV of prior debt to 09/30/2015 @ 1.750219% 19,172,952.81
Net PV Savings 1,182,432.41
Percentage savings of refunded bonds 6.870612%
Percentage savings of refunding bonds 6.667601%
Note: *Preliminary Numbers for discussion purposes only.
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SUMMARY OF BONDS REFUNDED
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Maturity Interest Par Call Call
Bond Date Rate Amount Date Price
Series 2006(Post 2014 SRF Refunding):
SERIAL 07/01/2017 4.250% 2,310,000.00 07/01/2016 100.000
07/01/2018 4.250% 2,410,000.00 07/01/2016 100.000
07/01/2019 4.250% 2,510,000.00 07/01/2016 100.000
07/01/2020 4.000% 2,620,000.00 07/01/2016 100.000
07/01/2021 4.000% 2,730,000.00 07/01/2016 100.000
07/01/2022 4.125% 4,630,000.00 07/01/2016 100.000
17,210,000.00
Note: *Preliminary Numbers for discussion purposes only.
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SAVINGS
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Present Value
Prior Prior Prior Refunding to 09/30/2015
Date Debt Service Receipts Net Cash Flow Debt Service Savings @ 1.7502190%
07/01/2016 712,262.50 178,065.63 534,196.87 233,620.82 300,576.05 296,736.62
07/01/2017 3,022,262.50 3,022,262.50 2,850,345.00 171,917.50 168,451.54
07/01/2018 3,024,087.50 3,024,087.50 2,851,895.00 172,192.50 165,579.58
07/01/2019 3,021,662.50 3,021,662.50 2,849,640.00 172,022.50 162,325.62
07/01/2020 3,024,987.50 3,024,987.50 2,853,632.50 171,355.00 158,662.63
07/01/2021 3,030,187.50 3,030,187.50 2,858,750.00 171,437.50 155,767.11
07/01/2022 4,820,987.50 4,820,987.50 4.648,957.50 172,030.00 153,364.07
20,656.437.50 178,065.63 20,478,371.87 19,146,840.82 1,331,531.05 1,260,887.18
Savings Summary
PV of savings from cash flow 1,260,887.18
Less:Prior funds on hand -79,257.80
Plus:Refunding funds on hand 803.03
Net PV Savings 1.182,432.41
Note: *Preliminary Numbers for discussion purposes only.
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BOND PRICING
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Maturity
Bond Component Date Amount Rate Yield Price
Bond Component:
07/01/2017 2,540,000 1.750% 1.750% 100.000
07/01/2018 2,586,000 1.750% 1.750% 100.000
07/01/2019 2,629,000 1.750% 1.750% 100.000
07/01/2020 2,679,000 1.750% 1.750% 100.000
07/01/2021 2,731,000 1.750% 1.750% 100.000
07/01/2022 4,569,000 1.750% 1.750% 100.000
17,734,000
Dated Date 09/30/2015
Delivery Date 09/30/2015
First Coupon 01/01/2016
Par Amount 17,734,000.00
Original Issue Discount
Production 17,734,000.00 100.000000%
Underwriter's Discount
Purchase Price 17,734.000.00 100.000000%
Accrued Interest
Net Proceeds 17,734,000.00
Note: *Preliminary Numbers for discussion purposes only.
Sep 1,2015 11:07 am Prepared by Public Financial Management,Inc. = Page ó
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9/22/2015 11 .G.
BOND DEBT SERVICE
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Period
Ending Principal Coupon Interest Debt Service
07/01/2016 233,620.82 233,620.82
07/01/2017 2,540,000 1.750% 310,345.00 2,850,345.00
07/01/2018 2,586,000 1.750% 265,895.00 2,851,895.00
07/01/2019 2,629,000 1.750% 220,640.00 2,849,640.00
07/01/2020 2,679,000 1.750% 174,632.50 2,853,632.50
07/01/2021 2,731,000 1.750% 127,750.00 2,858,750.00
07/01/2022 4,569,000 1.750% 79,957.50 4,648,957.50
17,734,000 1,412,840.82 19,146,840.82
Note: *Preliminary Numbers for discussion purposes only.
Sep 1.2015 11:07 am Prepared by Public Financial Management.Inc. ro—_ Page 7
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9/22/2015 11 .G.
BOND DEBT SERVICE
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
01/01/2016 78,448.32 78,448.32
07/01/2016 155,172.50 155,172.50 233,620.82
01/01/2017 155,172.50 155,172.50
07/01/2017 2,540,000 1.750% 155,172.50 2,695,172.50 2,850,345.00
01/01/2018 132,947.50 132,947.50
07/01/2018 2,586,000 1.750% 132,947.50 2,718,947.50 2,851,895.00
01/01/2019 110,320.00 110,320.00
07/01/2019 2,629,000 1.750% 110,320.00 2,739,320.00 2,849,640.00
01/01/2020 87,316.25 87,316.25
07/01/2020 2,679,000 1.750% 87,316.25 2,766,316.25 2,853,632.50
01/01/2021 63,875.00 63,875.00
07/01/2021 2,731,000 1.750% 63,875.00 2,794,875.00 2,858,750.00
01/01/2022 39,978.75 39,978.75
07/01/2022 4,569,000 1.750% 39,978.75 4,608,978.75 4,648,957.50
17,734,000 1,412,840.82 19,146,840.82 19,146,840.82
Note: *Preliminary Numbers for discussion purposes only.
Sep 1.2015 11:07 am Prepared by Public Financial Management,Inc. — Page 8
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9/22/2015 11 .G.
ESCROW REQUIREMENTS
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Period Principal
Ending Interest Redeemed Total
01/01/2016 356,131.25 356,131.25
07/01/2016 356,131.25 17,210,000.00 17,566,131.25
712,262.50 17,210,000.00 17,922,262.50
Note: *Preliminary Numbers for discussion purposes only.
Sep 1.2015 11:07 am Prepared by Public Financial Management.Inc. - Page 9
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9/22/2015 11 .G.
ESCROW COST
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Purchase Cost of Cash Total
Date Securities Deposit Escrow Cost
09/30/2015 17,922,262.50 17,922,262.50
0 17,922,262.50 17,922,262.50
Note: *Preliminary Numbers for discussion purposes only.
Sep 1.2015 11:07 am Prepared by Public Financial Management. Inc. _ Page 10
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9/22/2015 11 .G.
ESCROW SUFFICIENCY
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Escrow Net Escrow Excess Excess
Date Requirement Receipts Receipts Balance
09/30/2015 17,922,262.50 17,922,262.50 17,922,262.50
01/01/2016 356,131.25 -356,131.25 17,566,131.25
07/01/2016 17,566,131.25 -17,566,131.25
17,922,262.50 17,922,262.50 0.00
Note: *Preliminary Numbers for discussion purposes only.
Sep 1.2015 11:07 am Prepared by Public Financial Management.Inc. =-- Page 11
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9/22/2015 11 .G.
ESCROW STATISTICS
Collier County,Florida(Water-Sewer District)
Water and Sewer Refunding Revenue Bond,Series 2015
PRELIMINARY NUMBERS
Bank Loan Provider:Bank of America,N.A.
Modified Yield to Yield to Perfect Value of
Total Duration Receipt Disbursement Escrow Negative Cost of
Escrow Escrow Cost (years) Date Date Cost Arbitrage Dead Time
SFI 178,065.63 177,282.99 782.64
BF 17,744,196.87 17,514,487.50 229,709.37
17,922,262.50 17,691,770.49 0.00 230,492.01
Delivery date 09/30/2015
Arbitrage yield 1.750219%
Note: *Preliminary Numbers for discussion purposes only.
Sep 1.2015 11:07 am Prepared by Public Financial Management.Inc. =_ Page 12
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