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428-Revolving Loan Fund STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION WASTEWATER TREATMENT REVOLVING LOAN FUND AGREEMENT Florida Department of Environmental Regulation Bureau of Local Government Wastewater Financial Assistance Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 WASTEWATER TREATMENT REVOLVING LOAN FUND AGREEMENT CONTENTS PAGE ARTICLE I DEFINITIONS 1.01. WORDS AND TERMS. 1 1.02. CORRELATIVE WORDS. 3 ARTICLE II WARRANTIES, REPRESENTATIONS AND COVENANTS 2.01. WARRANTIES, REPRESENTATIONS AND COVENANTS. 3 2.02. CONDITIONS PRECEDENT° 5 ARTICLE III MONTHLY ESCROW AND LOAN REPAYMENT ACCOUNTS 3.01. MONTHLY ESCROW ACCOUNT. 5 3.02. INVESTMENT OF ESCROW MONEYS. 6 3.03. ESCROW WITHDRAWALS. 6 3.04. LOAN REPAYMENT RESERVE ACCOUNT. 6 3.05. LOAN REPAYMENT RESERVE WITHDRAWALS. 6 3.06. RESTORATION OF LOAN REPAYMENT RESERVE ACCOUNT, 6 3.07. INVESTMENT OF LOAN REPAYMENT RESERVE MONEYS. 6 ARTICLE IV PROJECT INFORMATION 4.01. PROJECT CHANGES. 6 4.02. TITLE TO PROJECT SITE. 7 4.03. PERMITS AND APPROVALS° 7 4.04. ENGINEERING SERVICES. 7 4.05. PROHIBITION AGAINST ENCUMBRANCES. 7 4.06. COMPLETION MONEYS. 7 4.07. SURPLUS LOAN FUNDS. 7 4.08. LOAN DISBURSEMENTS. 7 ARTICLE V HATES AND USE OF THE WATER AND SEWER SYSTEMS 5.01. RATE COVERAGE. 8 5.02. NO FREE SERVICE. 8 5.03. MANDATORY CONNECTIONS. 8 5,04. NO COMPETING SERVICE. 8 5.05. MAINTENANCE OF THE WATER AND SEWER SYSTEMS. 8 5,06. ADDITIONS AND MODIFICATIONS. 9 5,07. COLLECTION OF REVENUES. 9 ARTICLE VI DEFAULTS AND REMEDIES 6,01. EVENTS OF DEFAULT. 9 6.02. REMEDIES. 10 - 6.03. DELAY AND WAIVER. 10 ARTICLE VII THE PLEDGED REVENUES 7.01. SUPERIORITY OF THE PLEDGE TO THE DEPARTMENT. 11 7.02, ADDITIONAL DEBT OBLIGATIONS. 11 i CONTENTS PAGE ARTICLE VIII GENERAL PROVISIONS 8.01. DISCHARGE OF OBLIGATIONS° 11 8.02. PROJECT RECORDS AND STATEMENTS. 11 8.03. ACCESS TO PROJECT SITE. 12 8.04. ASSIGNMENT OF RIGHTS UNDER AGREEMENT. 12 8.05. AMENDMENT OF AGREEMENT. 12 8.06. SEVERABILITY CLAUSE. 12 8.07. EXECUTION OF AGREEMENT. 12 ARTICLE IX PROJECT PROCUREMENT AND INSURANCE 9.01. PROCUREMENT PROCEDURES. 12 9.02. AUTHORIZATION TO AWARD CONSTRUCTION CONTRACTS. 13 9.03. SUBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS. 13 9.04. INSURANCE REQUIRED. 13 ARTICLE X CLEAN WATER ACT PROVISIONS 10.01. MINORITY AND WOMEN'S BUSINESS ENTERPRISE. 14 10.02. DAVIS-BACON LABOR WAGE PROVISIONS, 15 ARTICLE XI DETAILS OF FINANCING 11.01. PRINCIPAL AMOUNT OF LOAN. 15 11.02. EXACT FIGURES. 15 11.03. PROJECT SCHEDULE. 15 11.04. INTEREST RATE. 16 11.05. LOAN TERM 16 11.06. REPAYMENT SCHEDULE. 16 ATTACHMENT A: DESCRIPTION OF PLEDGED REVENUES. 18 ATTACHMENT B: PROJECT DESCRIPTION. 19 ATTACHMENT C: ESTIMATED LOAN DISBURSEMENT SCHEDULE. 20 ii WASTEWATER TREATMENT REVOLVING LOAN FUND. AGREEMENT THIS AGREEMENT is executed by the STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION (Department) and the CITY OF SANFORD, FLORIDA, existing as a local government agency (Local Government) 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 financing 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 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) "Additional Completion Loan" shall mean a loan subsequent to the Loan authorized by this Agreement, which may be made to the Local Government by the Department for the purpose of furnishing additional funds to complete the Project. The interest rate for any Additional Completion Loan shall be established pursuant to Chapter 17-503 of the Florida Administrative code. (2) "Agreement" or "Loan Agreement" shall mean this agreement. (3) "Annual Loan Payment" shall mean the payment due from the Local Government to the Department in each Fiscal Year, and it is comprised of principal and interest. (4) "Authorized Representative" shall mean the official Of the Local GOvernment authorized by ordinance or resolution to sign documents associated with the Loan. (5) "Capital Contribution" shall mean moneys from such sources as impact fees, assessments, and contributions in-aid-to-construction. (6) "Capitalized Interest" shall mean the total interest, which accrues at the rate established for this Loan, for all disbursements from the date of actual warrants until the date scheduled for construction Completion, at '1 which time it will become part of the Loan principal. This interest shall be recomputed as of the date established in the final amendment to this Agreement in the event disbursements occur after the scheduled construction completion date. (7) "Cost of ConstrUction" shall mean the costs for furnishing and installing, equipping, constructing, altering, remodeling, or improving facilities° It shall also mean the cost of interim financing, refinancing, or payment of other debt of the Local Government, the proceeds of which were used for the foregoing purposes. (8) "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 or the Federal Savings and Loan Insurance Corporation. (9) "Loan" shall mean the amount of money to be loaned pursuant to this Agreement° (10) "Loan Repayment Reserve Account" shall mean the account into which will be deposited the amount set aside to pay unexpected deficiencies, if any, in the Annual Loan Payment. (11) "Monthly Loan Deposit" shall mean the monthly deposit to be made by the Local Government to an escrow account. (12) "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 Revenues; depreciation and any other items not requiring the expenditure of cash; any amounts expended for capital replacements, repairs and maintenance not recurring annually or reserves therefor; and reserves for administration, operation and maintenance occurring in the normal course of business. (13) "Pledged Revenues" shall mean the specific Revenues pledged as security for repayment of the Loan and shall be the Revenues derived yearly from the Local Government's Subordinated ~ebt Service Fund funded by 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 debt obligations identified on Attachment A to this Agreement. Pledged Revenues are the specific Revenues pledged as security for repayment of the Loan. Although such revenues q~ ~a~x_es are not pledged to repayment of the Loan, for the purposes of Sections 5.01 and 7.02 only, the term Pledged Revenues shall include any revenues or taxes of the Local Government pledged to the debt obligations or proposed debt obligations referenced in Sections 5.01 and 7.02. (14) "Project" sh~all mean facilities, consisting of the components needed to meet present and estimated future requirements, as described in Attachment B to this Agreement° (15) "Revenues" shall mean all income or earnings received by the Local 2 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. Revenues shall not include proceeds from the sale or other disposition of any part of the Water or Sewer Systems, condemnation awards or proceeds of insurance, except use and occupancy or business interruption insurance, received with respect to the Water or Sewer Systems, (16) "Sewer System" shall mean all facilities owned by the Local Government for collection, transmission, treatment and reuse of wastewater and its residuals. (17) "Subordinated Debt Service Fund" shall mean the fund, created pursuant to Local Governmental Resolution No, 1423, adopted October 7, 1985, as amended and supplemented, in which Pledged Revenues shall be deposited. (18) "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. Capitalized words not otherwise defined herein shall be defined as set forth in the Florida Administrative Code, Chapter 17-503. 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 is not presently subject to bankruptcy, insolvency, or reorganization 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 Government's knowledge, threatened, which seeks to restrain or enjoin the Local Government from entering into or complying with this Agreement. (4) The Local Government shall not issue bonds, notes or other evidences of indebtedness in any manner secured by Pledged Revenues without prior written notification to the Department. (5) The proceeds of any indebtednesS, which will be refunded or refinanced by this loan, were used for the construction of this Project. Refinancing, or reimbursement of the cost to issue and service such indebtedness, shall be limited to net costs (expenses less investment earnings). (6) 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. (7) The Local Government shall undertake the Proj.ect on its own responsibility, to the extent permitted by law, and shall release and hold harmless the State, its officers, members, and employees from any claim arising in connection with the Local Government's actions Or omissions in its planning, design, construction or operation Of the Project. (8) All Local Government representations to the Department, pursuant to the Loan application and Agreement, are true and accurate. 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. (9) The financial information delivered by the Local Government to the Department is current and correct. The Local Government shall provide the Department with additional financial information via audits required by Chapter 17-503 of the Florida Administrative Code, notification of changing conditions adversely affecting the Local Government's ability to repay this Loan, or upon request of the Department. (10) The Local Government shall, as part of its bookkeeping system, keep accounts of the Water and Sewer Systems separate from all other accounts and it shall keep accurate records of all Revenues, Pledged Revenues, Capital Contributions, Loan disbursement receipts, expenses, and expenditures relating to the Water and Sewer Systems. (11) The Local Government shall furnish, prior to the beginning of each Fiscal Year, an annual budget setting forth the amount of Pledged Revenues anticipated to be received; Revenues anticipated to be received from, and the expenses to be incurred for, the operation of the Water and Sewer Systems; provisions for the renewal and replacement of the Water and SewerI Systems; and debt service payable from Water and Sewer Systems Revenues. A budget shall be submitted for each year, beginning one year before the Project is scheduled for construction completion and ending with the year during which the loan is retired. In the event the anticipated Pledged Revenues are shown by the budget to be insufficient to make the Annual Loan Payment 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 Annual Loan Payment. 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. Nothing in this covenant shall be construed as (a) creating a pledge, lien, or charge upon any such other legally available funds, nor (b) requiring the Local Government to levy or appropriate ad valorem tax revenues, nor (c) 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, nor (d) expending such funds for other governmental purposes, prior to such application. Beginning with the fiscal year during which the Loan is executed and for each year until the Loan is retired, the Local Government shall have audited, as part of the Single Audit Act, the accounts of the Water and Sewer Systems and promptly furnish the audit to the Department. The audit shall also address the Local Government's financial condition pursuant to Chapter 17-503 of the Florida Administrative Code~ The Local Government shall have the Loan Agreement covenants reviewed as part of the audit process to ensure compliance and establish, during the course of the examination, whether anything came to the auditor's attention which would constitute a default. The auditor shall verify that the Revenues collected, beginning no later than the date set for construction completion, satisfy the rate coverage requirements of this Agreement. (12) 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 by the specified completion date, there shall be no resulting diminutions or delay in the Annual Loan Payment or the Monthly Loan Deposit or funding of the Loan Repayment Reserve Account. (13) 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. CONDITIONS PRECEDENT. As conditions precedent to this Agreement, the Local Government shall deliver the following to the Department: (1) A copy of all resolutions and ordinances authorizing this Agreement and establishing the Local Government's legal right and authority to undertake the Project. (2) The opinion of counsel to the Local Government that this Agreement has been duly authorized and executed and shall constitute a legal, valid, and binding obligation in accordance with its terms upon execution by both parties. ARTICLE III- MONTBLy ESCROW AND LOAN REPAYMENT ACCOUNTS 3.01. MONTHLY ESCROW ACCOUNT. The Local Government shall establish a monthly escrow account with a Depository. Beginning on the date of construction completion (beneficial use), the Local Government shall make a monthly deposit from the Pledged Revenues to the monthly escrow account. In any month in which the amount on deposit in the monthly escrow account does not equal or exceed five-sixths (5/6) of the Annual Loan Payment, the Depository shall be required to promptly notify the Department in writing if 5 the Local Government fails to make a monthly loan deposit which equals or exceeds one-twelfth (1/12) of the Annual Loan Payment. In the event there is an insufficient amount in the monthly escrow account thirty (30) days prior to each Annual Loan Payment, 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 ESCROW MONEYS. Upon the direction of the Local Government, a Depository shall invest escrowed moneys pursuant to the laws of the State of Florida. The maturity or redemption date of investments shall be not later than the date upon which such moneys may be needed to make Annual Loan Payments. 3.03. ESCROW WITHDRAWALS. The withdrawal of moneys from the monthl~ escrow account shall be for the purpose of making the Annual Loan Payment. 3.04. LOAN REPAYMENT RESERVE ACCOUNT. A Loan Repayment Reserve Account shall be established with a Depository in the amount of fifteen (15) percent of the Annual Loan Payment. The reserve shall be fully funded upon the beneficial use date specified in this Agreement. 3.05. LOAN REPAYMENT RESERVE WITHDRAWALS. The Loan Repayment Reserve Account shall be used by the Local Government to cure a temporary deficiency in any Annual Loan Payment. The Depository shall be requiredto promptly notify the Department upon any withdrawal from the Account. Any unused portion of the Loan Repayment Reserve Account shall be used to reduce the final Annual Loan Payment. 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 payments to restore its Loan Repayment Reserve Account. special restoration payments shall be made from the first moneys legally available to the Local Government for such purpose. 3.07. INVESTMENT OF LOAN REPAYMENT RESERVE MONEYS. Upon the direction of the Local Government, a Depository shall invest reserved moneys pursuant to the laws of the State of Florida. The maturity or redemption date of investments shall be not later than the date set for Annual Loan Payments. ARTICLE IV- PROJECT INFORMATION 4.01. PROJECT CHANGES. Project changes prior to bid opening shall be via addendum to plans and specifications. Changes subsequent to bid opening shall be by change order. The Local Government shall submit all addenda and all change orders to the Department. Any addendum or change order which affects the Project performance standards or which increases the contract amount by more than one hundred thousand dollars ($100,000) or which alters 6 the Project purpose shall be submitted for written approvalby 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 materially affect 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 the construction of the Project or portion of the Project funded under this Agreement. The Local Government shall Obtain Operation permits, if applicable, when construction is complete. 4.04. ENGINEERING SERVICES. A professional engineer, registered in the State of Florida, shall beemployed 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 Revenues, so long as this Agreement 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 XI. Failure of the Department to approve an Additional Completion Loan shall not constitute a waiver of the Local Government's covenants to complete and place the Project in operation. 4.07. SURPLUS LOAN FUNDS. Upon execution of all construction contracts, the Project contingency shall be reduced to not more than five (5) percent of the sum of the as-bid prices for all construction contracts. After Project performance certification by the Local Government, the Department will establish the final Project costs to be financed by the Loan. The balance Of funds remaining will be eliminated. The principal amount of the loan will be similarly adjusted by the Department. This adjustment will reduce, on a pro rata basis, an equal amount of the Annual Loan Payments. 4.08. LOAN DISBURSEMENTS. Disbursements shall be made only upon the issue of warrants signed by the state Comptroller and only when the requests for such warrants are accompanied by a Department certification that such withdrawals are proper expenditures. The disbursement of moneys may be made bY electronic means or by means of a magnetic tape or other transfer medium. Disbursements shall be made directly to the Local Government for design and administration allowances; reimbursement of the incurred Cost of Construction and related services; establishing a loan repayment reserve upon beneficial use; Project performance certification services; and final audit services. Disbursements to the Local Government shall be made no more frequently than monthly upon receipt of the following: (1) A written request signed by the Authorized Representative. such 7 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 funds 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; that payment is in accordance with construction contract provisions; 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 o'ther certificates or documents by engineers, attorneys, accountants, contractors, or suppliers as may be reasonably required. 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 Annual Loan Payment and all debt service payments on the debt obligations identified in Attachment A attached hereto. 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 Government'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 Water and Sewer Systems to connect such building to the Water and Sewer Systems° 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, as such systems exist as of the effective date of this Agreement, so as to adversely affect Revenues. 5.05. MAINTENANCE OF TEE 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 MODIFICATIONS. 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 ~f the Water or Sewer System. All such renewals, replacements, additions, modifications and improvements shall become part of the Water and Sewer Systems. 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 amount 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 Systems 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 Lean Repayment Reserve or to make any Monthly Lean Deposit or to make any installment of the Annual Loan Payment when it is due and such failure shall continue for a period of thirty (30) days. (2) Failure to comply with the provisions of this Agreement or in the performance or observance of any of the covenants or actions required by this Agreement other than as provided in Subsection 6.01(1), above, or Subsection 6.01(7), below, and such failure shall continue for a period of sixty (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 in any material respect. (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 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 sixty (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 Revenues of the Water'~or Sewer System. (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 sixty (60) days after 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 thirty (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 Comptroller delinquency on loan repayments, the Department may intercept the delinquent amount plus six (6) 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 thirtieth (30th) day following the date upon which payment is due. (6) By notifying financial market credit rating agencies. (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 by as much as three (3) percent per annum on the unpaid principal of the Loan for a default under Subsection 6.01(1). 6.03. DELAY AND WAIVER. NO delay or omission 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 l0 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 prier and superior to any other lien, pledge or assignment not specifically set forth in this Agreement. If the Loan is made in accordance with an existing bond resolution authorizing additional Local Government indebtedness with superior or parity liens On Pledged Revenues, all obligations of the Local Government under this Agreement shall be subordinate in right of payment to all bonds heretofore or hereafter issued under said bond resolution. Any of the Pledged Revenues may be released from the lien on such 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 Annual Loan Payment 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 ~i~h ~h~ ~rit~e~ con~e~t ~f_~he~De~a~tm~ent if the Local Government demonstrates, at the time of issuance of such additional debt obligations, that the Pledged Revenues plus revenuesto be pledged to the additional proposed debt obligations will equal or exceed 1.15 times the annual combined debt service requirements of this Agreement plus debt service On Other obligations proposed to be issued by the Local Government. 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 principal amount of the Loan and interest required, the pledge of, and lien on, the 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, design documents, contract documents, and papers shall be available to the 11 authorized representatives of the Department and the U.S. Environmental Protection Agency'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. 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 consent of the Department. 8.05. AMENDMENT OF AGREEMENT. This Agreement may be amended, except that no amendment shall be permitted which is inconsistent with statutes, rules, regulations, executive orders, or w~itten agreements between the Department and the U.S. Environmental Protection Agency. This Agreement may be amended after all construction contracts are executed to reestablish the Project cost, Loan amount, Project schedule, and Annual Loan Payment. The final amendment shall be executed after the final Project cost has been determined by the Department, The final figures shall be determined after the administrative close-out, which is to be held within six (6) months after the date established for Project performance certification. 8.06. SEVERABILITY CLAUSE. If any provision of this Agreement shall be held invalid or unenforceable, the remaining provisions shall be construed and enforced as if such invalid or unenforceable provision had not been contained herein. 8.07. EXECUTION OF AGREEMENT. This Agreement 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. The Agreement becomes effective upon execution. ARTICLE IX- PROJECT PROCUREMENT AND INSURANCE 9.01. PROCUREMENT PROCEDURES. The Local Government shall obtain all consulting services necessary for implementation of the Project consistent with Chapter 287.055, F.S. The Local Government shall procure equipment, materials, and construction contractors' services using the formal advertising method; the use of competitively or noncompetitively negotiated procurement requires prior written approval by the Department. The formal advertising method requires the following: (1) Adequate bidding documents shall be formally advertised in local and statewide newspapers, giving adequate public notice such that a complete description of what is required is stated; two or more responsible bidders compete for the work; fixed-price contracts are used; and the selection of 12 the successful bidder is made principally on the basis of price. Certified checks or bid bonds in the amount of five (5) percent of construction bids shall be required for bid guarantees. (2) Adequate bidding documents shall include statements of the required work schedule; a clear explanation of the method of evaluating bid prices and the basis for awarding contracts; prevailing wage rates to be used; and the deadline and place to submit bids for public opening. (3) The award of a contract shall be to the lowest, responsive, responsible bidder. Contractors debarred, suspended or voluntarily excluded from participating in federally assisted programs shall not be considered responsible bidders. Participation of minority and women's business enterprises in the work shall be considered in the award of contracts. All bids may be rejected when in the best interest of the Local Government. 9.02. AUTHORIZATION TO AWARD CONSTRUCTION CONTRACTS. The following documentation is required to receive the Department's authorization to award construction contracts: (1) Proof of advertising. (2) Detailed bid tabulation and the award recommendation, certified by the engineer responsible for overseeing construction. (3) Certified copy of the.Local Government's tentative award resolution. (4) Certification that affirmative steps were taken to encourage participation of women's and minority business enterprises in Project construction and documentation of the intended use of such enterprises therein. (5) Certification of compliance with the conditions of the Department's approval of competitively or noncompetitively negotiated procurement. 9.03. SUBMITTAL OF CONSTRUCTION CONTRACT DOCUMENTS. After the Department's authorization to award construction contracts has been received, the Local Government shall submit bonding and insurance certifications, construction and payment schedules, notices to proceed with construction, itemized construction cost breakdowns, and executed contract documents. 9.04. INSURANCE REQUIRED. The Local Government shall require contractors to file performance and payment bonds for the full amount of the contracts. Insurance against all risks during the period of construction shall be provided. Builder's risk or similar types of insurance in the amount of the full replacement cost of the Project shall be provided to the extent that such insurance is obtainable from time to time against any one or more of such risks. The Local Government shall cause the Project, as each part thereof is certified by the engineer responsible for overseeing construction as completed, and any other revenue producing facilities to be insured by an insurance company or companies licensed to do business in the State of Florida against such risks as are customary in connection with the operation 13 of revenue producing facilities Of like size, type and location in the amounts recommended by an independent consultant to the extent such insurance is obtainable from time to time against any one Or more of such risks. The Local Government shall cause insurance to be obtained and maintained against such risks as is customary during construction. Insurance requirements include workers' compensation, comprehensive general liability, contractors' indemnification Obligations, vehicle liability, and property. Business interruption insurance for the revenue producing facilities may be required by the Department. As documentation of insurance coverage, the Local Governmentshall file the following with the Department: (1) A certification describing the performance and payment bonds of contractors that have been retained for construction of the Project. (2) A certification Of insurance specifically describing the Project and the revenue producing facilities; stating that these facilities are covered; stating the specific risks covered, the amount of coverage provided against those risks, and whether the risks covered are those customarily insured against in connection with the operation of revenue producing facilities of like size, type and location to the extent that such insurance is obtainable at the time of the certification; and that the insurance coverage is adequate. This certification shall be updated annually as part of the required audit. (3) Such other certificates or documents by consultants, insurance carriers, or Local Government officials concerning insurance coverage as may reasonably be required by the'Department. Notwithstanding the foregoing provisions, the Local Government may institute and maintain actuarially sound and prudent self-insurance programs with regard to such risks as shall be consistent with the recommendations of a qualified insurance consultant. The proceeds of insurance policies received as aresult of damage to, or destruction of, facilities or structures which generate Pledged Revenues (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- CLEAN WATER ACT PROVISIONS 10.01. MINORITY AND WOMEN'S BUSINESS ENTERPRISE. The Local Government shall make reasonable efforts to encourage participation of minority and women's businesses in construction of the Project. A goal of fourteen (14) percent of the total cost for construction contracts plus the total value of materials and equipment purchased for the Project is established for minority and women's business contracts and subcontracts. Construction contracts shall not be executed by the Local Government until the Department has 14 approved the extent of participation of minority and women's business enterprises. Minority and women's business enterprise participation in consulting services and other non-construction activities may be counted toward achieving the goal. Documentation of efforts to utilize such persons shall be maintained by the Local Government and its consultants and contractors. 10.02. DAVIS-BACON LABOR WAGE PROVISIONS. The Local Government shall enforce the minimum prevailing wage rates established for its locality by the U.S. Department of Labor under the Davis-Bacon Act for Project construction. ARTICLE XI- DETAILS OF FINANCIN8 11.01. PRINCIPAL AMOUNT OF LOAN. The amount of the Loan authorized is Four Million Nine Hundred Twenty Nine Thousand Six Hundred Dollars ($4,929,600.00). Capitalized Interest in the amount of One Hundred Thirty Eight Thousand Six Hundred Dollars ($138,600.00) is included in the principal amount of the Loan but is not disbursed to the Local Government. 11.02. EXACT FIGURES. The Local Government and the Department acknowledge that the actual cost of the Project has 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. The final cost shall be established after all Project costs are reviewed subsequent to Project performance certification. Changes in Project costs may also occur as a result of the Local Government's Project audit or a Department audit pursuant to Chapter 17-503 of the Florida Administrative Code. The Local Government agrees to the following estimates for the Project cost: COST CATEGORY AMOUNT (1) Administrative Allowance $ 22,825 (2) Design Allowance $ 295,000 (3) Construction and Demolition $ 4,565,000 (4) Equipment and Materials $ -0- (5) contingencies $ 417,000 (6) Land $ -0- (7) Technical Services During Construction Contractual $ 235,000 Force Account $ -0- (8) Loan Repayment Reserve $ 55,523 (9) Financing Short Term $ -0- Refinancing (Net cost) $ -0- (10) Project Performance Certification $ 62,000 (11) Final Project Audit $ 20,000 (12) Capitalized Interest $ 138,600 TOTAL COST $ 5,810,948 11.03. PROJECT SCHEDULE. The Local Government agrees by execution 15 hereof: (1) The last date by which formal advertising is to be published is october 1, 1991. {2) The last date by which bids are to be publicly opened is November 1, 1991. (3) The disbursement of design and administrative allowances will be made upon request of the Local Government. (4) The schedule for Loan disbursements is set forth in Attachment C until such time as the contractors' construction schedules are available and this Agreement is amended. (5) The date by which construction is scheduled for completion (beneficial use of the Project or portions thereof financed by this Loan) is December 31, 1992. (6) The date by which the Loan Repayment Reserve Account is to be established by the Local Government and the date by which Monthly Escrow Account payments are to begin is December 31, 1992. (7) The date by which a request for the last Project construction disbursement (construction cost cut-off date) is to be submitted to the Department is March 31,'1993. (8) The date by which Project performance is scheduled to be certified and by which the first Annual Loan Payment becomes due is December 31, 1993. (9) The date by which a request for the last Project nonconstruction disbursement is to be submitted is January 31, 1994. 11.04. INTEREST RATE. The rate of interest on the unpaid principal of the Loan is four and twenty three one-hundredths (4.23) percent per annum. The rate Of interest shall be adjusted downward, if appropriate, pursuant to the provisions of Section 17-503.430 of the Florida Administrative Code. 11.05. LOAN TERM. The Loan shall be repaid in twenty (20) Annual Loan Payments. 11.06. REPAYMENT SCHEDULE. The first Annual Loan Payment shall be computed based upon the principal amount of the Loan, as estimated under Section 11.01, the estimated disbursement schedule identified in Attachment C, and level debt service. The remaining nineteen (19) equal installments shall be based upon the actual Project costs and actual dates and amounts of disbursements to the Local Government after adjustment for any overpayment, or underpayment, associated with the amount of the first payment. Actual Project costs shall be established after the Local Government's certification of Project performance, the Department's 16 inspection of the Project and associated records, and amendment of the Loan Agreement. Until this Loan Agreement is amended, each Annual Loan Payment - shall be in the amount Of Three Hundred Seventy Thousand One Hundred and Fifty Four Dollars ($370,154.00). The interest portion of each Annual Loan Payment shall be computed on the unpaid balance of the principal amount, including Capitalized Interest, of the Loan. Annual Loan Payments shall be received by the Department on or before December 31 of each year beginning in 1993. Funds transfer shall be madeby electronic means or by means of magnetic tape when such transfer mechanisms are available. IN WITNESS WEEREOF, 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 o r e tl f e e of reement ncor orate Atta hm nts A B s c e Ag i p , , and C hereto. DEPARTMENT OF ENVIRONMENTAL REGULATION , , - F City Manage/ CITY OF SANFORD ATTEST: City Clerk APPROVED AS TO FORM: City Attorney 17 A~TACHMENT A: DESCRIPTION OF PLEDGED REVENUES Pledged Revenues shall mean the Revenues derived yearly from the subordinated Debt Service Fund, as identified in Resolution 1546, adopted by the City Commission of the City of Sanford on May 8, 1989, and in Resolution 1423, adopted by the City Commission of the city of Sanford on October 7, 1985, as amended and supplemented after payment of the Operation and Maintenance Expense and the satisfaction of all yearly payment obligations on account of the debt obligations identified as follows: (1) $16,975,000 City of Sanford Water and Sewer Revenue Bonds, series 1986, dated August 1, 1986, issued pursuant to Resolution 1423, adopted by the City Commission of the City of sanford on October 7, 1985, as amended and supplemented by subsequent resolution on July 25, 1986; and (2) $4,410,000 City Of sanford Water and Sewer Revenue Bonds, Series 1989, dated September 1, 1989, and issued September 14, 1989, pursuant to Resolution No. 1423 and Resolution No. 1546, as amended and supplemented. These bonds were issued to refund the $3,795,000 Water and Sewer Revenue Bond Anticipation Notes, Series 1987, dated August 1, 1987, and to pay expenses incurred in issuing the Series 1989 bonds~ (3) Any of the $3,615,000 remaining authorized but unissued debt obligations authorized pursuant to Resolution No. 1423 and Resolution No. 1546, as amended and supplemented. (4) $11,970,000 City of Sanford Water and Sewer Revenue Bonds, Series 1991, dated August 1, 1991, and issued August 20, 1991, pursuant to Resolution No. 1597, Resolution No. 1608 and Resolution No. 1609. Said Revenues are available from operation of the Water and Sewer Systems. 18 ATTACHMENT B: PROJECT DESCRIPTION The Project financed by this Loan, denoted by the Department's identifying Number CS120586170, consists of three contracts and a portion of a fourth contract which provide for the expansion of the Sanford Wastewater Reclamation Facility, extension of the Local Goverament's reclaimed water reuse system, and construction Of a discharge transmission main. The Project consists specifically of the components detailed below. 1. The contract entitled "Seasonal Discharge Transmission Main" includes construction of approximately 15,870 linear feet Of 20-inch-diameter and approximately 270 linear feet of 18-inch-diameter effluent force main from the Sanford wastewater treatment plant to a new post-aeration structure at the St. Johns River; construction of approximately 940 linear feet of 30-inch-diameter effluent gravity line from the new post-aeration structure into the St. Johns River; and modification of the existing dechlorination facilities. 2. The contract entitled "Water Reclamation Facility Expansion" includes the construction of new aeration tanks; a new sludge thickening/laboratory building (including a new 1.5 meter gravity belt sludge thickener); a new maintenance building; chlorination system improvements; rehabilitation of the existing aeration tanks; demolition of the existing primary tanks and Special Structure No. 1; construction of new bridges at existing Final Clarifier II and at the existing digester building; replacement of three existing blowers with four new blowers; renovation of the existing laboratory and office building; and cleaning of the existing stormwater/reject water holding ponds. 3. The contract entitled "Westerly Reclaimed Water Transmission system, Contract II" includes construction of approximately 8,080 linear feet of 16-inch-diameter reclaimed water transmission main; approximately 5,470 linear feet of 14-inch-diameter reclaimed water transmission main; and approximately 140 linear feet of 12-inch~diameter reclaimed water transmission main. 4. Those portions Of the contract entitled "Westerly Interceptor and Reclaimed Water Transmission Mains, Contract I" involving the construction of approximately 5,490 linear feet of 16-inch-diameter reclaimed water transmission main in State Road 46 from Mangoustine Avenue to Airport Road; the construction of approximately 170 linear feet of 12-inch-diameter and 720 linear feet of 6-inch-diameter reclaimed water transmission main in State Road 46 from Airport Road to Bevier Road; and appurtenant work. The project is in agreement with the Sanford 201 Facilities Plan Amendment Number 2 dated February 1988 and the Westerly Interceptor Addendum dated May 1989. Approval of the project is provided by the Florida Finding of No Significant Impact-Amendment dated April 12, 1991. 19 ATTACHMENT C: ESTIMATED LOAN DISBURSEMENT SCHEDULE The schedule for disbursement of the Loan, including the Cost of Construction, is as follows: Date Amount October 1991 318,000 November 1991 10,000 December 1991 400,000 January 1992 400000 February 1992 400000 March 1992 400000 April 1992 400000 May 1992 400 000 June 1992 4001000 July 1992 400.000 August 1992 400000 September 1992 242000 October 1992 240000 November 1992 117500 December 1992 181500 January 1993 2,500 February 1993 2,500 March 1993 2,500 April 1993 2,500 May 1993 2,000 June 1993 2,000 July 1993 2,000 August 1993 2,000 September 1993 2,000 october 1993 2,000 November 1993 30,000 December 1993 30,000 The total amount to be disbursed is $4,791,000. This amount is equal to the Loan amount less Capitalized Interest. 20