Special Commission Meeting-August 21, 2012

CITY OF LAUDERDALE LAKES

Agenda Cover Page
Workshop: 0
Fiscal Impact: [gl Yes 0 No
ContractRequirement [gl Yes D No
0 Public Hearing
[gl Ordinance
[gl 1 ;t Reading
Title
0 Quasi-Judicial
0 Resolution
0 2nd Reading
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7. A

ORDINANCE #2012-14 AUTHORIZING THE REFINANCING AND BORROWING OF
CERTAIN MONIES FROM SUNTRUST BANK, EVIDENCED BY THE CITY'S
PROMISSORY NOTE, SERIES 2012, IN AN AMOUNT NOT TO EXCEED $2,545,521
Summary
This Ordinance provides authorization to execute the refinancing of the existing Promissory Note
that is held by Sun Trust Bank. The City of Lauderdale Lakes seeks to refinance and refund the
existing SunTrust Promissory Note, Series 2012, in an amount not to exceed $2,545,521, as
negotiated in the refinancing proposal. The SunTrust Promissory Note will be secured by a
pledge of a portion of the City's stormwater utility fees and by a covenant to budget and
appropriate non-ad valorem revenues.
Staff Recommendation .
Staff recommends approval of the refi9-ancing and borrowing of monies from SunTrust Bank
which is consistent with the City's Adopted Five Year Financial Plan.
Background:
As part of the City of Lauderdale Lakes' adopted Five Year Financial Plan, the City seeks to
refinance its existing SunTrust Promissory Note which has a current 4.19% interest rate and a
balloon payment that is due October 1, 2013 (in Fiscal Year 2014). City Staff believes that it is
fiJCally-prudenU9 refinance the Note and realize more favorable terms and conditions before the
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To accomplish the goal of refmancing the SunTrust Promissory Note, the City of Lauderdale
Lakes presented a refmancing request to SunTrust Bank for consideration and retained the law
firm of Weiss Serota Helfman Pastoriza Cole and Boniske, P.L. to serve as bond counsel for the
loan refinancing transaction. SunTrust Representatives and City Officials had numerous
meetings to discuss the rates, terms, and conditions for refinancing the City's existing SunTrust
Promissory Note. In the end, SunTrust Representatives and City Officials agreed on a mutually
beneficial refinancing proposal. City Bond Counsel reviewed the modified SunTrust Promissory
Note and determined its validity and security. City Bond Counsel and the City Attorney worked
closely with SunTrust Bank Representatives in preparing the required ordinances and resolutions
for City Commission consideration.
In summary, the modified SunTrust Promissory Note refinancing will accomplish the following.
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Special Commission Meeting-August 21, 2012
1. The existing Slll1Trust Promissory Note will be refmanced, refunded, and extended for
five (5) years, commencing on October 1, 2012 and maturing on October 1, 2017.
---?
2. The current interest rate for the SunTrust Promissory Note The rate and terms
for the existing SunTrust Promissory Note were mo ed in favor and support of the
City. The interest rate will remain the commencing on December 1, 2012
with an automatic interest rate reduction when the City achieYes a balanced budge.tat the
close of The do\\nward rate adjustment schedule iS" as follows: The first
adjusted rate is 3. 75% per annum; the second adjusted rate is 3.25% per annum; and
future adjusted rates would be variable equal to one-month LIBOR plus 3.0 per annum
and never exceed 3.25% per annum.
3. The new SunTrust Promissory Note will include a mortgage style payment on a quarterly
basis for best practices in municipal budgeting.
The purpose of the agenda item, (including the ordinance and a separate resolution that will be
presented at Meeting), will serve to authorize the refinancing and
borrowing of monies primarily for capital improvement projects and acquisition. Staff is
recommending that the City Commission approve both the ordinance and the forthcoming
resolution to refinance the existing Sun Trust Promissory Note.
The existing SunTrust Promissory Note will be refinanced and refunded through the issuance of
a new SunTrust Promissory Note, Series 2012, in an amount not to exceed $2,545,521, as
negotiated in the refinancing proposal. The new Sun Trust Promissory Note will be secured by a
proportional pledge of the City' s stormwater utility fees and a covenant to budget and
appropriate of non-ad valorem revenues of the City. The pledge of revenues is in harmony with
how the City has preyiously processed the debt service for the existing SunTrust Promissory
Note in prior years.
Under the existing Sun Trust Promissmy Note, the Stormwater Fund pays 62 perceg_t of the debt

service relating to previous stormwater capital projects. The remaining aebt service is paid by the
0 In summary, the existing SunTrust Promissory Note was secured and paid through
V\ an annual government principal payment (i.e. General Fund) and an annual business principal
( ('___ payment (i.e. Stormwater Fund).
Initially, staff proposed that the cost for the SunTrust Promissory Note refinancing Oegal fees,
bank fees, etc.) be paid out of the fmancial transaction. However, the City will cover these costs
separate and apart from the financial transaction. The cost will be borne proportionally from
three (3) City Funds: General Fund, Stormwater Flllld and Fire...R.escue Fund, based upon the
direct relationship of costs for the capital improvements and acquisitions in the original SunTrust
Promissory Note.
ARTICLE Ill. - GOVERNMENT OF THE CITY
Page 1 of 1
Section 3.17. - Ordinances and resolutions.
"Ordinance means an official, legislative action of the city commission which action is a regulation of general and permanent nature and
enforceable as a local law.
A "resolution is an expression of the city commission on matters of official concern, opinion or administration, of a temporary character, or
a provision for the disposition of a particular item of the administrative business of the governing body.
(1) Form. Each ordinance or resolution shall be introduced in writing and shall embrace but one subject and matters properly connected
therewith. The subject shall be clearly stated in the title. No ordinance shall be revised or amended by reference to its title only.
Ordinances to revise or amend shall set out in full the revised or amended act, section, subsection or paragraph of a section or
subsection.
(2) Procedure. The proposed ordinance shall be read in full on the first reading, and by title or in full on the second reading on at least
two (2) separate dates, at either regular or special meetings of the city commission; provided, however, upon the affirmative vote of
five (5) members of the city commission, the necessity that the ordinance be read in full on the first reading may be waived. At least
eight (8) days prior to the second at least once in a of general ---.,
.... enactment shall state the date, limeanap!ace or places within the city where such
ptOpos&d:Otdmance-may be inspected by the public. Said notice shall also advise that interested parties may appear at the meeting
and be heard with respect to the proposed ordinance.
(3) Effective date. Each ordinance shall become effective on the date specified therein; provided that in the absence of such
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