786-EPD-Clean Water~ ~, c.:..' Department of
' Environmental Protection
~. '0n
Twin Towers Office Building
Jeb Bush 2600 Blair Stone Road
Governor Tallahassee, Florida 32399-2400
~0
David B. Struhs
Secretary
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
OEC 2 0 ~999
Mr. Anthony Vanderworp
City Manager
City of Sanford
Post Office Box 1788
Sanford, Florida 32772 - 1788
Re: CS120586220 - Sanford
Collection & Transmission System Improvements
Dear Mr. Vanderworp:
We arc pleased to provide State Revolving Fund financial assistance for construction of
your collection and transmission system improvements. One copy of the fully executed
loan agreement is enclosed. To draw money under the agreement, please call Sheri
Garcia at 850/488-8163 for assistance in completing a disbursement request.
We congratulate you and your staff on your efforts and are pleased 'that we can work with
you on this project.
Sincerely,
Secretary
DBS/ak/k
Enclosure
cc: David A. Gierach - Conklin Porter & Holmes-Engineers, Inc.
Paul R. Moore - City of Sanford
Christianne Ferraro - DEP/Central District
"Protect, Conserve and Manage Horida's Environment and Natural Resources"
Printed on recycled paper.
STATE OF FLORIDA
DEPARTMENT OF ENVIRONMENTAL PROTECTION
AND
CITY OF SANFORD, FLORIDA
CLEAN WATER STATE REVOLVING FUND
CONSTRUCTION LOAN AGREEMENT
CS120586220
Florida Department of Environmental Protection
Bureau of Water Facilities Funding
Twin Towers Office Building
2600 Blair Stone Road, MS 3505
Tallahassee, Florida 32399-2400
CLEAN WATER STATE REVOLVING FUND CONSTRUCTION LOAN AGREEMENT
CONTENTS
PAGE
ARTICLE I - DEFINITIONS
1.01. WORDS AND TERMS.
1.02. CORRELATIVE WORDS.
ARTICLE II - WARRANTIES, REPRESENTATIONS AND COVENANTS
2.01. WARRANTIES, REPRESENTATIONS AND COVENANTS.
2.02. LEGAL AUTHORIZATION.
ARTICLE III- LOAN REPAYMENT ACCOUNTS 3.01. LOAN DEBT SERVICE ACCOUNT.
3.02. INVESTMENT OF LOAN DEBT SERVICE ACCOUNT MONEYS.
3.03. LOAN DEBT SERVICE ACCOUNT WITHDRAWALS.
3.04. LOAN REPAYMENT RESERVE ACCOUNT.
3.05. LOAN REPAYMENT RESERVE WITHDRAWALS.
3.06. RESTORATION OF LOAN REPAYMENT RESERVE ACCOUNT.
3.07. INVESTMENT OF LOAN REPAYMENT RESERVE MONEYS.
3.08. ASSETS HELD IN TRUST.
ARTICLE IV - PROJECT INFORMATION
4.01. PROJECT CHANGES.
4.02. TITLE TO PROJECT SITE.
4.03. PERMITS AND APPROVALS.
4.04. ENGINEERING SERVICES.
4.05. PROHIBITION AGAINST ENCUMBRANCES.
4.06. COMPLETION MONEYS.
4.07. CLOSE-OUT.
4.08. LOAN DISBURSEMENTS.
ARTICLE V - RATES AND USE OF THE WATER AND SEWER SYSTEMS
5.01. RATE COVERAGE.
5.02. NO FREE SERVICE.
5.03. MANDATORY CONNECTIONS.
5.04. NO COMPETING SERVICE.
5.05. MAINTENANCE OF THE WATER AND SEWER SYSTEMS.
5.06. ADDITIONS AND MODIFICATIONS.
5.07. COLLECTION OF REVENUES.
ARTICLE VI - DEFAULTS AND REMEDIES
6.01. EVENTS OF DEFAULT.
6.02. REMEDIES.
6.03. DELAY AND WAIVER.
ARTICLE VII - THE PLEDGED REVENUES
7.01. SUPERIORITY OF THE PLEDGE TO THE DEPARTMENT.
7.02. ADDITIONAL DEBT OBLIGATIONS.
i
3
3
6
6
6
6
6
7
7
7
7
7
7
7
8
8
8
8
8
8
8
9
9
9
9
9
10
10
10
10
10
11
11
12
12
12
CLEAN WATER STATE REVOLVING FUND CONSTRUCTION LOAN AGREEMENT
CONTENTS
ARTICLE VIII - GENERAL PROVISIONS 8.01. DISCHARGE OF OBLIGATIONS.
8.02. PROJECT RECORDS AND STATEMENTS.
8.03. ACCESS TO PROJECT SITE.
8.04. ASSIGNMENT OF RIGHTS UNDER AGREEMENT.
8.05. AMENDMENT OF AGREEMENT.
8.06. ANNULMENT OF AGREEMENT.
8.07. SEVERABILITY CLAUSE.
ARTICLE IX - CONSTRUCTION CONTRACTS AND INSURANCE
9.01. AUTHORIZATION TO AWARD CONSTRUCTION CONTRACTS.
9.02. SUBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS.
9.03. INSURANCE REQUIRED.
ARTICLE X - DETAILS OF FINANCING
10.01. PRINCIPAL AMOUNT OF LOAN.
10.02. LOAN SERVICE FEE.
10.03. INTEREST AND GRANT ALLOCATION ASSESSMENT RATES.
10.04. LOAN TERM.
10.05. REPAYMENT SCHEDULE.
10.06. PROJECT COSTS.
10.07. PROJECT SCHEDULE.
ARTICLE XI- EXECUTION OF AGREEMENT
PAGE
12
12
12
13
13
13
13
13
13
13
14
14
14
14
15
15
15
15
16
16
17
CLEAN WATER STATE REVOLVING FUND CONSTRUCTION LOAN AGREEMENT
CS120586220'
THIS AGREEMENT is executed by the STATE OF FLORIDA DEPARTMENT OF
ENVIRONMENTAL PROTECTION (Department) and the CITY OF SANFORD, FLORIDA, (Local
Government) existing as a local governmental agency under the laws of the State of Florida.
WITNESSETH:
WHEREAS, pursuant to Section 403.1835, Florida Statutes, the Department is authorized to make loans
to local government agencies to finance or refinance the construction of wastewater pollution control
facilities, the planning and design of which have been reviewed by the Department; and
WHEREAS, the Local Government has made application for the icing of the Project, and the
Department has determined that such Project meets all requirements for a loan.
NOW, THEREFORE, in consideration of the Department loaning money to the Local Government, in the
principal amount and pursuant to the covenants hereinafter set forth, it is agreed as follows:
ARTICLE I - DEFINITIONS
1.01. WORDS AND TERMS.
Words and terms used herein shall have the meanings set forth below:
(1) "Agreement" or "Loan Agreement" shall mean this construction loan agreement.
(2) "Authorized Representative" shall mean the official of the Local Government authorized by
ordinance or resolution to sign documents associated with the Loan.
(3) "Capitalized Interest" shall mean the indebtedness accruing on the Loan before the 20-year
repayment period begins and it is financed as part of the Loan principal.
(4) "Depository" shall mean a bank or trust company, having a combined capital and unimpaired
surplus of not less than $50 million, authorized to transact commercial banking or savings and loan
business in the State of Florida and insured by the Federal Deposit Insurance Corporation.
(5) "Grant Allocation Assessment" shall mean an assessment, expressed as a percent per annum,
accruing on the unpaid balance of the Loan. It is computed similarly to the way interest charged on the
Loan is computed and is included in the Semiannual Loan Payment. The Department will use Grant
Allocation Assessment moneys for making grants to financially disadvantaged small communities pursuant
to Section 403.1835 oft he Florida Statutes.
(6) "Gross Revenues" shall mean all income or earnings received by the Local Government from
the ownership or operation of its Water and Sewer Systems, including investment income, all as calculated
in accordance with generally accepted accounting principles. Gross Revenues shall not include proceeds
from the sale or other disposition of any part of the Water or Sewer System, condemnation awards or
proceeds of insurance, except use and occupancy or business interruption insurance, received with respect
to the Water or Sewer System.
(7) "Loan" shah mean the amount of money to be loaned pursuant to this Agreement and
subsequent amendments.
(8) "Loan Application" shall mean the completed form which provides all information required to
support obtaining construction loan financial assistance.
(9) "Loan Debt Service Account" shall mean an account, or a separately identified component of
a pooled cash or liquid account, with a Depository established by the Local Government for the purpose of
accumulating Monthly Loan Deposits and making Semiannual Loan Payments,
(10) "Loan Repayment Reserve Account" or "Loan Repayment Reserve" shall mean the account
into which will be deposited the amount set aside to pay temporary and unexpected deficiencies, if any, in
the Semiannual Loan Payment.
(11) "Loan Service Fee" shall mean an origination fee which shall be paid to the Department by
the Local Government.
(12) "Monthly Loan Deposit" shall mean the monthly deposit to be made by the Local Government
to the Loan Debt Service Account.
(13 ) "Operation and Maintenance Expense" shall mean the costs of operating and maintaining the
Water and Sewer Systems determined pursuant to generally accepted accounting principles, exclusive of
interest on any debt payable from Gross Revenues, depreciation, and any other items not requiring the
expenditure of cash.
(14) "Pledged Revenues" shall mean the specific revenues pledged as security for repayment of the
Loan and shall be the Gross Revenues derived yearly from the operation of the Water and Sewer Systems
after payment of the Operation and Maintenance Expense and the satisfaction of all yearly payment
obligations on account of the Senior Revenue Obligations and any senior obligations issued pursuant to
Section 7.02 of this Agreement.
(15) "Project" shall mean the works financed by this Loan and shall consist of furnishing all labor,
materials, and equipment to construct the Sanford South Water Reclamation Facility and wastewater
collection and transmission system improvements in accordance with the plans and specifications accepted
by the Department for the following contracts:
(a) Airport Boulevard Phase lIB Utility Relocations.
(b) Lake Mary Boulevard Phase III Utility Relocations.
(c) East Lake Mary Boulevard Utility Reloeations.
(d) Marquette Avenue Utility Construction.
(e) East Lake Mary Boulevard Segment II Utility Construction.
(f) CR 46A Utility Relocations (Oregon Avenue to Upsala Road).
(g) CR 46A Utility Relocations (Upsala Road to Old Lake Mary Road).
(h) Airport Boulevard Phase III Sewer Construction.
(i) 54 Street Sanitary Sewer Construction.
(j) Narcissus Avenue Sanitary Sewer and Force Main Construction.
(k) Sanford North Water Reclamation Facility Chlorine Handling Facilities Improvements.
(1) Sanford South Water Reclamation Facility.
The Project is in agreement with the City of Sanford 201 Facilities Plan Addendure, dated
November 1998. Approval of this Project is provided by the Florida Finding of No Significant Impact
dated May 28, 1999. This Project is being financed with Federal funds.
(16) "Semiannual Loan Payment" shall mean the payment due from the Local Government to the
Department at six-month intervals, and it is comprised of principal, interest, and Grant Allocation
Assessment. In addition, the Loan Service Fee and all associated interest are deducted from the first two
payments.
(17) "Senior Revenue Obligations" shall mean the following debt obligations:
issued in the
Co)
issued in the
City of Sanford, Florida, Water and Sewer System Refunding Revenue Bonds, Series 1992,
mount of $17,000,000, pursuant to Resolution No. 1623; and
City of Sanford, Florida, Water and Sewer System Refunding Revenue Bonds, Series 1993,
amount of $25,605,000, pursuant to Resolution No. 1668, as amended and supplemented; and
(c) Additional bonds issued on a parity with the obligations identified above pursuant to
Section 18 of Resolution No. 1423; and
(d) Any refunding bonds issued to refund the obligations identified above provided such bonds
shall not increase annual debt service during the repayment period of this loan.
(18) "Sewer System" shall mean all facilities owned by the Local Government for collection,
transmission, treatment and reuse ofwastewater and its residuals.
(19) "Water System" shall mean all facilities owned by the Local Government for supplying and
distributing water for residential, commercial, industrial, and governmental use.
1.02. CORRELATIVE WORDS.
Words of the masculine gender shall be understood to include correlative words of the feminine and
neuter genders. Unless the context shall otherwise indicate, the singular shall include the plural and the
word "person" shall include corporations and associations, including public bodies, as well as natural
persons.
ARTICLE II - WARRANTIES, REPRESENTATIONS AND COVENANTS
2.01. WARRANTIES, REPRESENTATIONS AND COVENANTS.
The Local Government warrants, represents and covenants that:
( 1 ) The Local Government has full power and authority to enter into this Agreement and to
comply with the provisions hereof.
(2) The Local Government currently is not the subject of b.ankmptcy, insolvency, or
reorganization proceedings and is not in default of, or otherwise subject to, any agreement or any law,
administrative regulation, judgment, decree, note, resolution, charter or ordinance which would currently
restrain or enjoin it from entering into, or complying with, this Agreement.
(3) There is no material action, suit, proceeding, inquiry or investigation, at law or in equity,
before any court or public. body, pending or, to the best of the Local Govemment's knowlodge, threatened~
which seeks to restrain or enjoin the Local Government from entering into or complying with this
Agreement.
(4) All permits, real property interests, and approvals required as of the date of this Agreement
have been obtained for construction and use of the Project. The Local Government knows of no reason
why any future required permits or approvals are not obtainable.
(5) The Local Govemment shall undertake the Project on its own responsibility, to the extent
permittexl by law.
(6) To the extent permitted by law, the Local Government shall release and hold harmless the
State, its officers, members, and employees from any claim arising in connection with the Local
Govemment's actions or omissions in its planning, engineering, administrative, and construction activities
financed by this Loan or its operation of the Project.
(7) All Local Government representations to the Department, pursuant to the Loan Application
and Agreement, were true and accurate as of the date such representations were made. The financial
information delivered by the Local Government to the Department was current and correct as of the date
such information was delivered. The Local Government shah comply with Chapter 62-503, Florida
Administrative Code, and all applicable State and Federal laws, rules, and regulations which are identified
in the Loan Application or Agreement, including Item(v) under Part II1(2) of the Loan Application. To the
extent that any assurance, representation, or covenant requires a future action, the Local Government shall
take such action as is necessary for compliance.
(8) The Local Government shall maintain records using Generally Accepted Governmental
Accounting Principles established by the Governmental Accounting Standards Board. As part of its
bookkeeping system, the Local Government shall keep accounts of the Water and Sewer Systems separate
from all other accounts and it shall keep accurate records of all revenues, expenses, and expenditures
relating to the Water and Sewer Systems, and of the Pledged Revenues, Loan disbursement receipts, Loan
Debt Service Account, and Loan Repayment Reserve Account.
(9) In the event the anticipated Pledged Revenues are shown by the Local Government's annual
budget to be insufficient to make the Semiannual Loan Payments for such Fiscal Year when due, the Local
Government shall include in such budget other legally available funds which will be sufficient, together
with the Pledged Revenues, to make the Semiannual Loan Payments. Such other legally available funds
shall be budgeted in the regular annual governmental budget and designated for the purpose provided by
this Subsection, and the Local Government shall collect such funds for application as provided herein. The
Local Government shall notify the Department immediately in writing of any such budgeting of other
legally available funds. Nothing in this covenant shall be construed as creating a pledge, lien, or charge
upon any such other legally available funds; requiring the Local Government to levy or appropriate ad
valorem tax revenues; or preventing the Local Government from pledging to the payment of any bonds or
other obligations all or any part of such other legally available funds.
(10) Beginning with the Fiscal Year in which the Loan Agreement is executed and continuing for
each year thereafter until the Loan is retired, the Local Government shall submit annual audit reports to the
Department. The audits shall be conducted under the Office of Management and Budget Circular A-133 if
applicable based on the expenditure amount of Loan proceeds. If an audit under Circular A-133 is not
applicable, the audit shah be conducted under Section 11.45, Florida Statutes. Regardless of which type of
audit is conducted, such audits shall address at a minimum the Local Government's financial enndition,
accounts of the Water and Sewer Systems or other sources generating the Pledged Revenues, Loan
disbursements received and Project expenditures (if any), and compliance with the Loan Agreement
cover~ants. Beginning with the Fiscal Year of the first Semiannual Loan Payment, the scope of audits shall
encompass the Loan Debt Service Account and Loan Repayment Reserve Account. The Local
Government shall cause its auditor to notify the Department immediately if anything comes to the auditor's
attention during the annual examination of the Local Government's records that would constitute a default
under the Loan Agreement.
(11) Within 12 months of the amendment establishing final Project costs, the Local Government
shall submit to the Department a separate audit, by an independent certified public accountant, of the Loan
related revenues and expenditures. The audit shall be conducted in accordance with Government Auditing
Standards issued by the Comptroller General of the United States. The audit shall address whether the
Local Government complied with requirements set forth in the Loan Agreement, including applicable State
and Federal laws and regulations referenced in Subsection (7) above. The audit findings shall set aside or
question any costs that are unallowable under Chapter 62-503, Florida Administrative Code. A final
determination of the allowability of such costs shall be made by the Department.
(12) Each year, beginning three months before the first Semiannual Loan Payment and ending
with the year during which the final Loan repayment is made, the Local Govemment's Authorized
Representative or its chief financial officer shall submit, pursuant to the schedule established in
Section 10.07, a certification that: (a) Pledged Revenue collections satisfy, on a pro rata basis, the rate
coverage requirement; (b) the Loan Debt Service Account contains the funds required; (c) the Loan
Repayment Reserve Account contains the funds required; and (d) insurance, including that issued through
the National Flood Insurance Program authorized under 42 U.S.C. sees. 4001-4128 when applicable, in
effect for the facilities generating the Pledged Revenues, adequately covers the customary risks to the extent
that such insurance is available.
(13 ) Pursuant to Section 216.349 of the Florida Statutes, the Local Government shall not use the
Loan proceeds for the purpose of lobbying the Florida Legislature, the hdicial Branch, or a State agency.
(14) The Local Government agrees to construct the Project in accordance with the Project
schedule. Delays incident to strikes, riots, acts of God, and other events beyond the reasonable control of
the Local Government are excepted. If for any reason construction is not completed as scheduled, there
shall be no resulting diminution or delay in the Semiannual Loan Payment or the Monthly Loan Deposit or
funding of the Loan Repayment Reserve Account.
(15) The Local Government covenants that this Agreement is entered into for the purpose of
constructing, refunding, or refinancing the Project which will in all events serve a public purpose. The
Local Government covenants that it will, under all conditions, complete and operate the Project to fulfill the
public need.
2.02. LEGAL AUTHORIZATION.
Upon signing this Agreement, the Local Government' s legal counsel covenants that:
( 1 ) This Agreement has been duly authorized by the Local Government and shall constitute a
valid and legal obligation of the Local Government in accordance with its terms upon execution by both
parties; and
(2) This Agreement specifies the revenues pledged for repayment of the Loan, and the pledge is
valid and enforceable.
ARTICLE III- LOAN REPAYMENT ACCOUNTS
3.01. LOAN DEBT SERVICE ACCOUNT.
The Local Government shah establish a Loan Debt Service Account with a Depository and begin
making Monthly Loan Deposits no later than the date set forth for such action in Section 10.07 of this
Agreement.
Beginning six months prior to each Semiannual Loan Payment, the Local Government shall make
six Monthly Loan Deposits. The first five deposits each shall be at least equal to one-sixth of the
Semiannual Loan Payment. The sixth Monthly Loan Deposit shall be at least equal to the amount required
to make the total on deposit in the Loan Debt Service Account equal to the Semiannual Loan Payment
amount, taking into consideration investment earnings credited to the account pursuant to Section 3.02.
Any month in which the Local Government fails to make a required Monthly Loan Deposit, the
Local Government' s chief financial officer shall notify the Department of such failure. In addition, the
Local Government agrees to budget, by amendment if necessary, payment to the Department from other
legally available funds all sums becoming due before the same become delinquent. This requirement shall
not be construed to give superiority to the Department's claim on any revenues over prior claims of general
creditors of the Local Government, nor shall it be construed to give the Department the power to require the
Local Government to levy and collect any revenues other than Pledged Revenues.
3.02. INVESTMENT OF LOAN DEBT SERVICE ACCOUNT MONEYS.
Moneys on deposit in the Loan Debt Service Account shall be invested pursuant to the laws of the
State of Florida. Such moneys may be pooled for investment purposes. The maturity or redemption date
of investments shall be not later than the date upon which such moneys may be needed to make Semiannual
Loan Payments. The investment earnings shall be credited to the Loan Debt Service Account and applied
toward the Monthly Loan Deposit requirements.
3.03. LOAN DEBT SERVICE ACCOUNT WITHDRAWALS.
The withdrawal of moneys from the Loan Debt Service Account shall be for the sole purpose of
making the Semiannual Loan Payment or for discharging the Local Government' s obligations pursuant to
Section 8.01.
3.04. LOAN REPAYMENT RESERVE ACCOUNT.
A Loan Repayment Reserve Account shall be established with a Depository. The Local
Government shall deposit into the account the reserve amount identified in Section 10.07 of this Agreement
by the date set forth therein.
3.05. LOAN REPAYMENT RESERVE WITHDRAWALS.
The Loan Repayment Reserve Account shall be used by the Local Government to cure a temporary
and unexpected deficiency in any Semiannual Loan Payment. The Local Government' s chief financial
officer shall promptly notify the Department upon any withdrawal from the account. Any unused portion
of the Loan Repayment Reserve Account shall be applied to the final Semiannual Loan Payment(s) or used
for discharging the Local Government' s obligations pursuant to Section 8.01.
3.06. RESTORATION OF LOAN REPAYMENT RESERVE ACCOUNT.
A default causing the Local Government to use the Loan Repayment Reserve Account or the use of
the account to prevent default shall result in the Local Government being responsible for making special
deposits to restore the account. Special restoration deposits shall be made from the first moneys legally
available to the Local Government for such purpose.
3.07. INVESTMENT OF LOAN REPAYMENT RESERVE MONEYS.
Moneys on deposit in the Loan Repayment Reserve Account shall be invested pursuant to the laws
of the State of Florida. Such moneys may be pooled for investment purposes. The maturity or redemption
date of investments shall be not later than the date set for the final Semiannual Loan Payment provided,
however, that moneys must be available for withdrawal, if necessary, pursuant to Section 3.05 of this
Agreement. All investment income and earnings shall be credited to the Loan Repayment Reserve Account.
3.08. ASSETS HELD IN TRUST.
'The assets in each of the accounts created under this Loan Agreement shall be held in trust for the
purposes provided herein and used only for the purposes and in the manner prescribed in this Agreement;
and, pending such use, said assets shall be subject to a lien and charge in favor of the Department.
ARTICLE IV - PROJECT INFORMATION
4.01. PROJECT CHANGES.
Project changes prior to bid opening shall be made by addendure to plans and specifications.
Changes afar bid opening shall be made by change order. The Local Government shall submit all addenda
and all change orders to the Department. Any change order which increases the contract amount by more
than one hundred thousand dollars ($100,000) or which alters the approved Project scope or which involves
a procurement method that is not consistent with the approved method or which involves deletion or
substantive modification of any requirement of Chapter 62-503, Florida Administrative Code, requires
written approval by the Department.
4.02. TITLE TO PROJECT SITE.
The Local Government shall have an interest in real property sufficient for the construction and
location of the Project free and clear of liens and encumbrances which would impair the usefulness of such
sites for the intended use.
4.03. PERMITS AND APPROVALS.
The Local Government shall have obtained, prior to the Department's authorization to award
construction contracts, all permits and approvals required for construction of the Project or portion of the
Project funded under this Agreement.
4.04. ENGINEERING SERVICES.
A professional engineer, registered in the State of Florida, shall be employed by, or under contract
with, the Local Government to oversee construction.
4.05. PROHIBITION AGAINST ENCUMBRANCES.
The Local Government is prohibited from selling, leasing, or disposing of any part of the Water or
Sewer System which would materially reduce operational integrity or Gross Revenues so long as this
Agreement, including any amendment thereto, is in effect unless the written consent of the Department is
first secured.
4.06. COMPLETION MONEYS.
In addition to the proceeds of this Loan, the Local Government covenants that it has obtained, or
will obtain, sufficient moneys from other sources to complete construction and place the Project in
operation on, or prior to, the date specified in Article X. Failure of the Department to approve additional
financing shall not constitute a waiver of the Local Govemment's covenants to complete and place the
Project in operation.
4.07. CLOSE-OUT.
The Department shall Conduct a final inspection of the Project and Project records. Following the
inspection, deadlines for submitting additional disbursement requests, if any, shall be established, along
with deadlines for uncompleted Loan requirements, if any. Deadlines shall be incorporated into the Loan
Agreement by amendment. The Loan principal shall be reduced by any excess over the amount required to
pay all approved costs. As a result of such adjustment, the Semiannual Loan Payment shall be reduced
accordingly, as addressed in Seelion 10.05.
4.08. LOAN DISBURSEMENTS.
Disbursements shall be made only by the State Comptroller and only when the requests for such
disbursements are accompanied by a Department certification that such withdrawals are proper
expenditures. Disbursements shall be made directly to the Local Government for administrative and
engineering allowances, reimbursement of the incurred construction costs and related services, establishing
a Loan Repayment Reserve Account, and Project start-up services. Disbursement of the allowances shall
be made upon the Department' s receipt of a disbursement request form. Disbursements for materials,
labor, or services shall be made upon receipt of the following:
(1) A completed disbursement request form signed by the Authorized Representative. Such '
requests must be accompanied by sufficiently itemized summaries of the materials, labor, or services to
identify the nature of the work performed; the cost or charges 'for such work; and the person providing the
service or performing the work.
(2) A certification signed by the Authorized Representative as to the current estimated costs of the
Project; that the materials, labor, or services represented by the invoice have been satisfactorily purchased,
performed, or received and applied to the project; that all ~mds received to date have been applied toward
completing the Project; and that under the terms and provisions of the contracts, the Local Government is
required to make such payments.
(3) A certification by the engineer responsible for overseeing construction stating that equipment,
materials, labor and services represented by the construction invoices have been satisfactorily purchased, or
received, and applied to the Project in accordance with construction contract documents; stating that
payment is in accordance with construction contract provisions; stating that construction, up to the point of
the requisition, is in compliance with the contract documents; and identifying all additions or deletions to
the Project which have altered the Project's performance standards, scope, or purpose since the issue of the
Department construction permit.
(4) Such other certificates or documents by engineers, atWrneys, accountants, contractors, or
suppliers as may reasonably be required by the Department.
ARTICLE V - RATES AND USE OF THE WATER AND SEWER SYSTEMS
5.01. RATE COVERAGE.
The Local Government shall maintain rates and charges for the services furnished by the Water
and Sewer Systems which will be sufficient to provide, in each Fiscal Year, Pledged Revenues equal to or
exceeding 1.15 times the sum of the Semiannual Loan Payments due in such Fiscal Year. In addition, the
Local Government shall satisfy the coverage requirements of all senior and parity debt obligations.
5.02. NO FREE SERVICE.
The Local Government shall not permit connections to, or furnish any services afforded by, the
Water or Sewer System without making a charge therefor based on the Local Govemment's uniform
schedule of rates, fees, and charges.
5.03. MANDATORY CONNECTIONS.
The Local Government shall adopt, as necessary, and enforce requirements, consistent with
applicable laws, for the owner, tenant or occupant of each building located on a lot or parcel of land which
is served, or may reasonably be served, by the Sewer System to connect such building to the Sewer System.
5.04. NO COMPETING SERVICE.
The Local Government shall not allow any person to provide any services which would compete
with the Water or Sewer System so as to adversely affect Gross Revenues.
5.05. MAINTENANCE OF THE WATER AND SEWER SYSTEMS.
The Local Government shall operate and maintain the Water and Sewer Systems in a proper,
sound and economical manner and shall make all necessary repairs, renewals and replacements.
5.06. ADDITIONS AND MODIHCATIONS.
The Local Government may make any additions, modifications or improvements to the Water and
Sewer Systems which it deems desirable and which do not materially reduce the operational integrity of any
part of the Water or Sewer System. All such renewals, replacements, additions, modifications and
unprovements shall become part of the Water and Sewer System.
5.07. COLLECTION OF REVENUES.
The Local Government shall use its best efforts to collect all rates, fees and other charges due to it.
The Local Government shall establish liens on premises served by the Water or Sewer System for the
mount of all delinquent rates, fees and other charges where such action is permitted by law. The Local
Government shall, to the full extent permitted by law, cause to discontinue the services of the Water and
Sewer Systems and use its best efforts to shut off water service furnished to persons who are delinquent
beyond customary grace periods in the payment of Water and Sewer System rates, fees and other charges.
ARTICLE VI - DEFAULTS AND REMEDIES
6.01. EVENTS OF DEFAULT.
Each of the following events is hereby declared an event of default:
( 1 ) Failure to fund the Loan Repayment Reserve Account or to make any Monthly Loan Deposit
or to make any installment of the Semiannual Loan Payment when it is due and such failure shall continue
for aperiod of 30 days.
(2) Except as provided in Subsections 6.01(1) and 6.01(7), failure to comply with the provisions
of this Agreement or failure in the performance or observance of any of the covenants or actions required
by this Agreement and such failure shall continue for a period of 60 days after written notice thereof to the
Local Government by the Department.
(3) Any warranty, representation or other statement by, or on behalf of, the Local Government
contained in this Agreement or in any information furnished in compliance with, or in reference to, this
Agreement, which is false or misleading.
(4) An order or decree entered, with the acquiescence of the Local Government, appointing a
receiver of any part of the Water or Sewer System or Gross Revenues thereof; or if such order or decree,
having been entered without the consent or acquiescence of the Local Government, shall not be vacated or
discharged or stayed on appeal within 60 days after the entry thereof.
(5) Any proceeding instituted, with the acquiescence of the Local Government, for the purpose of
effecting a composition between the Local Government and its creditors or for the purpose of adjusting the
claims of such creditors, pursuant to any federal or state statute now or hereafter enacted, if the claims of
such creditors are payable from Gross Revenues of the Water or Sewer System.
10
(6) Any bankruptcy, insolvency or other similar proceeding instituted by, or against, the Local
Government under federal or state bankruptcy or insolvency law now or hereafter in effect and, if instituted
against the Local Government, is not dismissed within 60 days at'mr filing.
(7) Failure of the Local Government to give immediate written notice of default to the Department
and such failure shall continue for a period of 30 days.
6.02. REMEDIES.
Upon any event of default and subject to the rights of others having prior liens on the Pledged
Revenues, the Department may enforce its rights by any of the following remedies:
( 1 ) By mandamus or other proceeding at law or in equity, cause to establish rates and collect fees
and charges for use of the Water and Sewer Systems, and to require the Local Government to fulfill this
Agreement.
(2) By action or suit in equity, require the Local Government to account for all moneys received
from the Department or from the ownership of the Water and Sewer Systems and to account for the receipt,
use, application, or disposition of the Pledged Revenues.
(3) By action or suit in equity, enjoin any acts or things which may be unlawful or in violation of
the rights of the Department.
(4) By applying to a court of competent jurisdiction, cause to appoint a receiver to manage the
Water and Sewer Systems, establish and collect fees and charges, and apply the revenues to the reduction
of the obligations under this Agreement.
(5) By certifying to the Auditor General and the Comptroller delinquency on loan repayments, the
Department may intercept the delinquent amount plus six percent, expressed as an annual interest rate,
penalty of the amount due to the Department from any unobligated funds due to the Local Government
under any revenue or tax sharing fund established by the State, except as otherwise provided by the State
Constitution. Penalty interest shall accrue on any amount due and payable beginning on the 30th day
following the date upon which payment is due.
(6) By notifying financial market credit rating agencies and potential creditors.
(7) By suing for payment of amounts due, or becoming due, with interest on overdue payments
together with all costs of collection, including attorneys' fees.
(8) By accelerating the repayment schedule or increasing the interest rate on the unpaid principal
of the Loan to as much as 3.333 times the Loan interest rate for a default under Subsection 6.01(1).
6.03. DELAY AND WAIVER.
No delay or omission by the Department to exercise any right or power accruing upon event of
default shall impair any such right or power or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right and power may be exercised as often as may be deemed
expedient. No waiver or any default under this Agreement shall extend to or affect any subsequent event of
default, whether of the same or different provision of this Agreement, or shall impair consequent rights or
remedies.
ARTICLE VII- THE PLEDGED REVENUES
7.01. SUPERIORITY OF THE PLEDGE TO THE DEPARTMENT.
From and after the effective date of this Agreement, the Department shall have a lien on the
Pledged Revenues prior and superior to any other lien, pledge or assignment with the following exception.
All obligations of the Local Government under this Agreement shall be junior, inferior, and subordinate in
all respects in right of payment and security to the Senior Revenue Obligations defined in Section 1.01 of
this Agreement and any additional senior obligations issued with the Department' s consent pursuant to
Section 7.02. Any of the Pledged Revenues may be released from the lien on such Pledged Revenues in
favor of the Department if the Department makes a determination, based upon facts deemed sufficient by
the Department, that the remaining Pledged Revenues will, in each Fiscal Year, equal or exceed 1.15 times
the debt service coming due in each Fiscal Year under the terms of this Agreement.
7.02. ADDITIONAL DEBT OBLIGATIONS.
The Local Government may issue additional debt obligations on a parity with, or senior to, the lien
of the Department on the Pledged Revenues provided the Department' s written consent is obtained. Such
consent shall be granted if the Local Government demonstrates at the time of such issuance that the Pledged
Revenues, which may take into account reasonable projections of growth of the Water and Sewer Systems
and revenue increases, plus revenues to be pledged to the additional proposed debt obligations will, during
the period of time Semiannual Loan Payments are to be made under this Agreement, equal or exceed 1.15
times the annual combined debt service requirements of this Agreement, of any other State Revolving Fund
loans secured by the Pledged Revenues, and of the obligations proposed to be issued by the Local
Government. However, no such consent is required with respect to issuance of Senior Revenue Obligations
as defined in Section 1.01.
ARTICLE VIII - GENERAL PROVISIONS
8.01. DISCHARGE OF OBLIGATIONS.
All payments required to be made under this Agreement shall be cumulative and any deficiencies in
any Fiscal Year shall be added to the payments due in the succeeding year and all years thereafter until
fully paid. Payments shall continue to be secured by this Agreement until all of the payments required shall
be fully paid to the Department. If at any time the Local Government shall have paid, or shall have made
provision for the timely payment of, the entire principal mount of the Loan, interest, and Grant Allocation
Assessment, the pledge of, and lien on, the Pledged Revenues to the Department shall be no longer in effect.
Deposit of sufficient cash, securities, or investments, authorized by law, from time to time, may be made to
.effect defeasance of this Loan. However, the deposit shall be made in irrevocable trust with a banking
institution or trust company for the sole benefit of the Department. There shall be no penalty imposed by
the Department for early retirement of this Loan.
8.02. PROJECT RECORDS AND STATEMENTS.
Books, records, reports, engineering documents, contract documents, and papers shall be available
to the authorized representatives of the Department and the U.S. Environmental Protection Ageney's
Inspector General for inspection at any reasonable time after the Local Government has received a
disbursement and before three (3) years have elapsed after the Department's final Project disbursement to
the Local Government.
12
8.03. ACCESS TO PROJECT SITE.
The Local Government shall provide access to Project sites and administrative offices to authorized
representatives of the Department at any reasonable time. The Local Government shall cause its engineers
and contractors to cooperate during Project inspections, including making available working copies of plans
and specifications and supplementary materials.
8.04. ASSIGNMENT OF RIGHTS UNDER AGREEMENT.
The Department may assign any part of its rights under this Agreement after notification to the
Local Government. The Local Government shall not assign rights created by this Agreement without the
written consent of the Department.
8.05. AMENDMENT OF AGREEMENT.
This Agr~ment may be mended in writing, except that no amendment shall be permitted which is
inconsistent with statutes, rules, regulations, executive orders, or written agreements between the
Department and the U.S. Environmental Protection Agency. This Agreement may be amended afar all
cometion contracts arc executed to re-establish the Project cost, Loan mount, Project schedule, and
Semiannual Loan Payment amount. A final amendment establishing the final Project costs shall be
completed after the Department' s final inspection of the Project records.
8.06. ANNULMENT OF AGREEMENT.
The Department may unilaterally annul this Agreement if the Ixw, al Government has not drawn any
of the Loan proceeds within eighteen months after the effective date of this Agreement. If the Department
unilaterally annuls this Agreement, the Department will provide written notification to the Local
Government.
8.07. SEVERABILITY CLAUSE.
If any provision of this Agreement shall be held invalid or unenforccable, the remaining provisions
shall be construed and enforced as if such invalid or unenforceable provision had not been contained herein.
ARTICLE IX - CONSTRUCTION CONTRACTS AND INSURANCE
9.01. AUTHORIZATION'TO AWARD CONSTRUCTION CONTRACTS.
The following documentation is required to receive the Department's authorization to award
construction contracts:
(1)
(2)
engineer).
(3)
Proof of advertising.
Award recommendation, bid proposal, and bid tabulation (certified by the responsible
Certified copy of the Local Government's tentative award resolution.
13
(4) Certification of compliance with the conditions of the Department's approval of competitively
or non-competitively negotiated procurement.
(5) Certification by the Authorized Representative that affirmative steps were taken to encourage
Minority and Women' s Business Enterprises participation in Project construction.
(6) Current certifications for Minority and Women' s Business Enterprises participating in the
contract. If the goals as stated in the plans and specifications are not met, documentation of actions taken
shall be submitted.
9.02. SUBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS.
After the Department's authorization to award construction contracts has been received, the Local
Government shall submit contractor insurance certifications and notices to proceed with construction.
9.03. INSURANCE REQUIRED.
The Local Government shall cause the Project, as each part thereof is certified by the engineer
responsible for overseeing construction as completed, and the Water and Sewer Systems (hereafter referred
to as "Revenue Producing Facilities") to be insured by an insurance company or companies licensed to do
business in the State of Florida against such damage and destruction risks as are customary for the
operation of Revenue Producing Facilities of like size, type and location to the extent such insurance is
obtainable from time to time against any one or more of such risks.
The proceeds of insurance policies received as a result of damage to, or destruction of, the Project
or the other Revenue Producing Facilities, shall be used to restore or replace damaged portions of the
facilities. If such proceeds are insufficient, the Local Government shall provide additional funds to restore
or replace the damaged portions of the facilities. Repair, construction or replacement shall be promptly
completed.
ARTICLE X - DETAILS OF FINANCING
10.01. PRINCIPAL AMOUNT OF LOAN.
The estimated principal mount of the Loan is $14,765,500, which consists of $14, 117,000 to be
disbursed to the Local Government and $648,500 of Capitalized Interest.
Capitalized Interest is not disbursed to the Local Government, but is amortized via periodic Loan
repayments to the Department as if it were actually disbursed. Capitalized Interest is computed at the
combined rate of interest and Grant Allocation Assessment, or rates, set for the Loan. It accrues and is
compounded annually from the time when disbursements are made until six months before the first
Semiannual Loan Payment is due. Capitalized Interest is estimated prior to establishing the schedule of
actual disbursements.
This project is a Segmented Project. Additional State Revolving Fund icing for the Project is
dependent upon the availability of additional funds. The current funding limitations and future funding
priority entitlement for Segmented Projects are set forth in the Chapter 62-503 of the Florida
Administrative Code.
14
10.02. LOAN SERVICE FEE.
The Loan Service Fee is $274,117 for the Loan amount authorized to date. The fee represents two
percent of the Loan amount excluding the Loan Repayment Reserve and Capitalized Interest amounts; that
is, two percent of $13,705,825. An additional Loan Service Fee amount will be assessed for any additional
funding provided by amendment to the Agreement. The fee shall be adjusted downward if adjustment of
Project costs results in a Loan decrease, provided that the decrease amendment is executed before the first
Semiannual Loan Payment due date.
Interest shall accrue on the Loan Service Fee at the combined rate of interest and Grant Allocation
Assessment, or rates, set for the Loan until the fee is paid. Loan Service Fee interest shall be compounded
annually from the effective date of the Loan until six months before the first Semiannual Loan Payment is
due at which time it is capitalized. The estimated capitalized Loan Service Fee interest is $25,960.
10.03. INTEREST AND GRANT ALLOCATION ASSESSMENT RATES.
The combined rate of interest and Grant Allocation Assessment on the unpaid principal of the Loan
amount specified in Section 10.01 is 3.34 percent per annum. Individually, the interest rate is 1.67 percent
per annum and the Grant Allocation Assessment rate is 1.67 percent per annum. However, if this
Agreement is not executed by the Local Government and returned to the Department before
January 1, 2000, the interest and Grant Allocation Assessment rates may be adjusted. New interest and
Grant Allocation Assessment rates shall be established for any funds provided by amendment to this
Agreement.
10.04. LOAN TERM.
The Loan shall be repaid in 40 Semiannual Loan Payments.
10.05. REPAYMENT SCHEDULE.
The Semiannual Loan Payment shall be computed based upon the principal amount of the Loan
plus the Loan Service Fee and capitalized Loan Service Fee interest and the principle of level debt service.
The Department will deduct the Loan Service Fee and all associated interest from the first two payments.
The Semiannual Loan Payment amount may be adjusted, by amendment of this Agreement, based upon
revised information. After the final disbursement of Loan proceeds, the Semiannual Loan Payment shall be
based upon the actual Project costs and actual dates and amounts of disbursements, taking into
consideration any previous payments. Actual Project costs shall be established after the Departmenfs
inspection of the completed Project and associated records.
Each Semiannual Loan Payment shall be in the amount of $519,363 until the payment amount is
adjusted by amendment. The interest and Grant Allocation Assessment portions of each Semiannual Loan
Payment shall be computed on the unpaid balance of the principal amount of the Loan, which principal
includes Capitalized Interest. Interest (at the combined rate of Loan interest and Grant Allocation
Assessment) also shall be computed on the unpaid balance of the Loan Service Fee and capitalized Loan
Service Fee interest. The interest and Grant Allocation Assessment on the unpaid balance shall be
computed as of the due date of each Semiannual Loan Payment.
Semiannual Loan Payments shall be received by the Department beginning on April 15, 2003 and
semiannually thereafter on October 15 and April 15 of each year until all amounts due hereunder have been
fully paid. Funds transfer shall be made by electronic means.
15
10.06. PROJECT COSTS.
The Local Government and the Department acknowledge that the actual Project costs have not
been determined as of the effective date of this Agreement. Project cost adjustments may be made as a
result of construction bidding or mutually agreed upon Project changes. An additional Loan Repayment
Reserve Account deposit will be required for any additional funding provided by amendment to this
Agreement. Capitalized Interest will be recalculated based on actual dates and amounts of Loan
disbursements. If the Local Government receives other governmental funding for this Project, the costs
funded by such other governmental funding will not be financed by this Loan. The Department shall
establish the final Project costs after its final inspection of the Project records. Changes in Project costs
may also occur as a result of the Local Govemment's Project audit or a Department audit. The Local
Government agrees to the following estimates of Project costs:
PROJECT COSTS
CATEGORY
( 1 ) Administrative Allowance
(2) Engineering Allowance
(3) Construction and Demolition
(4) Contingencies
(5) Technical Services During Construction
(6) Start-up Services
SUBTOTAL
(7) Loan Repayment Reserve *
SUBTOTAL (Disbursable Amount)
(8) Capitalized Interest
TOTAL (Loan Principal Amount)
AUTHORIZED LOAN
COST(S) AMOUNT(S) TO DATE
99,291
992,914 Line items
14,080,000 may vary
1,407,572 based on
986,000 Actual
75,000 Disbursements
17,640,777 13,705,825
529,223 411,175
18,170,000 14,117,000
648,500 648,500
18,818,500 14,765,500
* The Loan Repayment Reserve represents three percent of the Loan amount excluding the Capitalized
Interest and Loan Repayment Reserve amounts; three percent of $13,705,825 equals $411,175 for the
Loan amount authorized to date.
10.07. PROJECT SCHEDULE.
The Local Government agrees by execution hereof:
(1) Initiation of Project construction is scheduled for January 1, 2000.
(2) Project cometion close-out is scheduled for October 15, 2002.
(3) The Loan Repayment Reserve Account shah be established and $411,175 shall be deposited
no later than October 15, 2002.
(4) The Loan Debt Service Account shall be established and Monthly Loan Deposits shall begin
no later than October 15, 2002.
(5) The initial annual certification required under Subsection 2.01(12) of this Agreement shall be
due January 15, 2003. Thereafter, until the final Semiannual Loan Repayment is made, the certification
shall be submitted each year at the time the annual audit report is submitted under Subsection 2.01(10).
(6) The first Semiannual Loan Payment in the amount of $5 19,363 shah be due April 15, 2003.
1¸6
ARTICLE XI - EXECUTION OF AGREEMENT
This Loan Agreement CS 120586220 shall be executed in three or more counterparts, any of which
shall be regarded as an original and all of which constitute but one and the same instrument.
IN WITNESS WHEREOF, the Department has caused this Agreement to be executed on its behalf
by the Secretary of the Department and the Local Government has caused this Agreement to be executed on
its behalf by its Authorized Representative and by its affixed seal. The effective date of this Agreement
shall be as set forth below by the Secretary of the Department.
for
CIT S ORD
Attest
SEAL
I attest to the covenants of Section 2.02, entitled
Legal Authorization, and as to form and legal
sufficiency.
ddr CityAttorney
for
STATE OF FLORIDA
DEPARTMENT OF ENVIRONMENTAL PROTECTION
0 mS
Secretary Date
17