MEMORANDUM. Mr. Mark C. Mason, CPA Financial Services Director, City of Tamarac, Florida

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1 Larson Consulting Services University Blvd, #117 Orlando, Florida MEMORANDUM TO: FROM: Prospective Respondents Mr. Mark C. Mason, CPA Financial Services Director, City of Tamarac, Florida Jeff Larson, President Larry Aubrecht, Senior Vice President Larson Consulting Services, Financial Advisor to City RE: City of Tamarac, Florida ( the City ), Request for Proposal for Up to $25,000,000 Revolving Credit Bank Facility, Series 2013 DATE: August 9, 2013 The City is requesting a proposal for up to $25,000,000 in total lender capacity for a Capital Improvement Revenue Refunding Note, Series 2013 ( 2013 Note ) for (a) the refunding of any outstanding debt under a current $20,000,000 Taxable Redevelopment Note, Series 2011 that closed on February 24, 2011 for City economic development, land assemblage, (b) cost of issuance for the 2013 Note, (c) development, redevelopment, design, project management or other capital requirements per the City s ongoing Economic Development Program that included the Tamarac Village Project, and (d) any additional land assemblage requirements or City CIP capital requirements during the Interest Only Period. Each Lender is requested to provide in their response (1) taxable fixed rate and floating rate options, and (2) tax exempt Non BQ and BQ floating rate and fixed rate options, with any debt under either (a) or (b) covering any usage under either (a) the initial three (3) year Interest Only Period or (b) a subsequent seven (7) year Term Out Period. All interest rate options should be based on readily identifiable indices, and the City requests that you hold these indices through October 31, The 2013 Note will be supported by the City s Covenant to Budget and Appropriate Pledge ( CB&A), which is the same source of security as for the City s existing CB&A Debt and as detailed in the 2013 Official Statement for the $13,785,000 Capital Improvement Revenue Refunding Bonds, Series 2013 (" 2013 CB&A Bonds") that closed on May 14, 2013 (see Exhibit A). There is $13,771,509 outstanding on the 2011 Note as of September 30, 2012 (see page 53; 2012 CAFR). A summary of the City s Ratings is attached in Exhibit A, along with the most recent Rating Agency Reports for the 2013 CB&A Bonds University Blvd., #117 Orlando, FL Tel:

2 RESPONSE DUE DATE Responses will be due by 2:00 p.m. on September 5, 2013 Enclosed is a description of the City, Request for Proposal, Summary of Proposed Terms for the proposed 2013 Note, and historical Covenant to Budget and Appropriate ( CB&A ) Coverage Ratios (using FYE September 30, 2011 and 2012 financials). The City s Historical audits and budgets are available on the City s website (for reference, please refer to Exhibit A). The Official Statement for the 2013 CB&A Bonds that fully defeased the 2005 Bonds, and other SEC 15c-2-12 continuing disclosure information are also available on the DAC Website ( The City s current CB&A underlying ratings are Aa3 (Moody s), AA- Stable (S&P), and AA- Stable (Fitch). Upon your review of the enclosed, please do not hesitate to get in touch with either Mr. Mark C. Mason, CPA, Director of Financial Services, at , mark.mason@tamarac.org, or Jeff Larson, Larson Consulting, at either Telephone: , jlarson@larsonconsults.com, or in his absence, Larry Aubrecht, laubrecht@larsonconsults.com, with any questions or requests for additional information. 2

3 REQUEST FOR BANK CREDIT FACILITY PROPOSALS FOR (1) CAPITAL IMPROVEMENT REVENUE REFUNDING NOTE, SERIES 2013 I. INTRODUCTION: CITY OF TAMARAC, FLORIDA August 9, 2013 The City of Tamarac, Florida ( the City ) hereby solicits responses for a 2013 Note in accordance with the terms, conditions, and specifications outlined in this Request For Proposal and the attached Summary of Proposed Terms. The City of Tamarac, Florida is located in Broward County and has a current estimated population of approximately 61,102. The City was incorporated in 1963 and operates under its own charter. The governing body of the City consists of a five-member commission of which four members are elected by district and the mayor is elected at large. The City provides a full range of municipal services including police (via Broward County Sheriff), and fire protection, highways and streets, planning, zoning, parks, recreation, water, sewer, storm water, sanitation (via Waste Management) and general administrative services. The proposed up to $25,000,000 Capital Improvement Revenue Refunding Note, Series 2013 ( 2013 Note ) will provide funds for (a) the cost of issuance, (b) payoff/refund/defease the existing Bank CB&A debt outstanding under the Taxable Redevelopment Revenue Note, Series 2011 ( 2011 Note ) (if advantageous to City) prior to its conversion to a Term Note in April 2014, (c) additional funds to reimburse the City for any design, construction, development or redevelopment capital costs, and (d) provide for additional capacity up to an aggregate of $25,000,000 for future land assemblage, capital improvement and infrastructure needs (ie. roads, utilities, storm water, parking, public works, etc.) within the City of Tamarac during a Three Year Interest Only Period. The City projects a need for (i) approximately $2,500,000 to $4,000,000 in additional land assemblage and redevelopment related capital project costs and (ii) the potential for traditional City CIP public purpose tax-exempt capital requirements of approximately $5,000,000. Assuming a closing of this Credit Facility by October 30, 2013, the City will be in a position in September 2013 to determine the initial sizing of the 2013 Note. Any unused capacity up to $25,000,000 would be available for future advances until the end of the Interest Only Period on September 30, 2016 and prior to the Term Period Conversion date of October 1, The City could elect to Term out any outstanding debt under the 2013 Note (if not refinanced or paid off prior to October 1, 2016). Any unused capacity under the aggregate 2013 Note would be eliminated at the end of the Interest Only Period. Proposals are subject to Financial Advisor and City Staff review, and City Commission approval. II. PROPOSAL DUE DATE: Responses for the Credit Facility Proposal will be due at the Office of the City s Director of Financial Services no later than 2:00 p.m. EST, September 5, Please include in the Proposal along with your transmittal letter (1) the proposed Bank Contact Officer(s), (2) Bank s Counsel and fees, (3) Floating and Fixed Rate Taxable, Non BQ and BQ Tax Exempt Funding Options for both (i) the Interest Only Period and (ii) the Term Period of the $20Million Credit Facility, (4) a comparable CB&A or General Fund Florida Experience list for the last three years 3

4 (limit experience to 3 pages), and (5) three recent Florida references for comparable financings. Incomplete and/or proposals received after the due date will not be accepted. ed Proposals for the Credit Facility shall be marked: 2013 Note, City of Tamarac, Florida and ed to the attention of Mr. Mark C. Mason, CPA, Director of Financial Services, as noted below: Fax #: mark.mason@tamarac.org Labeled: 2013 Note Proposal, City of Tamarac, Florida An additional copy should be ed to the City s Financial Advisor by 2:00 p.m. EST, September 5, Labeled: jlarson@larsonconsults.com 2013 Note Proposal, City of Tamarac, Florida III. SUBMISSIONS OF PROPOSALS: (A) ACCEPTANCE / REJECTION / MOFIDICATION TO PROPOSAL: The City reserves the right to negotiate modifications to Proposals that it deems acceptable, to reject any and all Proposals, and to waive minor irregularities in the procedures or to award to other than the low respondent if it is in the best interest of the City. (B) PROPOSALS BINDING: All Proposals for the 2013 Note Proposal, City of Tamarac, Florida should be binding until October 30, IV. ADDITIONAL INFORMATION: Any questions regarding this proposal should be directed to either Mark Mason, Director of Financial Services at mark.mason@tamarac.org, or to the City s Financial Advisor, Jeff Larson, President, Larson Consulting Services, at (407) and/or jlarson@larsonconsults.com, or in his absence, Larry Aubrecht, Senior Vice President, Larson Consulting Services, at laubrecht@larsonconsults.com. The Financial Advisor will provide any additional information to all respondents, in the interest of fairness, after conferring with the City s Director of Financial Services. This, however, is in no way intended to discourage any innovative or unique proposals beyond those required in this RFP. Please note that any verbal or written contact by a respondent with City Staff (other than identified above), City Management, City Attorney, City Bond Counsel, or City elected officials will result in a disqualification of that respondent. 4

5 UP TO $25,000,000 REQUEST FOR CAPITAL IMPROVEMENT REFUNDING REVENUE NOTE, SERIES 2013 CITY OF TAMARAC, FLORIDA Summary of Proposed Terms Issuer/Borrower: Financial Advisor: Bond Counsel: Amount: Tax Exemption: Award Date: City of Tamarac, Florida ( City ) Larson Consulting Services, Orlando, Florida Bryant, Miller & Olive, Tampa Up to and not to exceed $25,000,000 for (a) Cost of Issuance, (b) refinancing of any current CB&A debt under the $20,000,000 Series 2011 Note (currently outstanding in the amount of $13,771,509), and (c) any capital or infrastructure costs related to the City s approved CIP program, Economic Development Program or Tamarac Village Project. The 2013 Note usage may be either (i) a bank qualified obligation, (ii) a non Bank Qualified obligation, or (iii) a taxable obligation, all subject to Bond Counsel review. At this time, the initial 2013 Note usage at closing related to (b) above for the payoff of the Series 2011 Note is expected to be a taxable obligation initially during the Three Year Interest Only Period. Subject to Bond Counsel s review and subsequent opinion, future advances could be either (i) a BQ or Non BQ tax exempt obligation or (ii) taxable obligation during the Three Year Interest Only Period. It is anticipated that the City s Bond Counsel will prepare the Bond/Award Resolution, Note and other Credit Facility documentation for review by Lender s Counsel, and provide documentation for any future taxable, tax-exempt (BQ or Non BQ) advance under the aggregate $25,000, Note, including a Bond Counsel opinion for any tax-exempt City borrowing. Following a review of the proposals and recommendation to the City by its Financial Advisor, an award date by the City Commission is expected on October 9, Est. Closing Date: Estimated to be October 22, 2013, with a preclosing/ signing on October 21, 2013, following City Commission action noted above. Purpose of the Loans: To provide funds to the City in the form of a 2013 Note for economic development, redevelopment and capital infrastructure projects as part of the City s approved economic development and redevelopment initiative and adopted CIP program. The City currently owns some land purchased by advances under the 2011 Note, Grant Funds, and other City funds that is part of the targeted Economic Development projects in various areas of the City, including Tamarac Village, representing a net loan balance of $13,771,509 as of 9/30/12. Additional land, capital improvements, or reimbursement to the City for any project related capital or project costs, could be made as future advances under the 2013 Note up to the aggregate limit of $25,000,000 during the Interest Only Period. It would be the City s intent to utilize any land proceeds to repay advances under the

6 Note to the extent not already repaid by City funds, or grants. The Term Out Period for the 2013 Note is established to provide the City with the flexibility to term out any outstanding debt under the 2013 Note, so as to better match the term of the debt with the underlying asset, and as an alternative to other sources of permanent financing, including but not limited to County, State or Federal Grants, taxable or tax exempt long term bond issues, and PPP financing structures including MSTU s, SADs, and CDDs. It is requested that any taxable funds borrowed and repaid during the Three Year Interest Only Period ending on September 30, 2016 can be reborrowed as necessary with a conventional corporate Revolving Credit Facility or Line of Credit, subject to the City s compliance with the Anti Dilution Test as detailed in the 2013 CB&A Refunding Bonds Official Statement, and City compliance with other financial covenants and conditions. The seven year Term Period will begin on October 1, 2016, have a final maturity of October 1, 2023, and will be structured on a level debt service basis with semi-annual interest each April 1 and October 1, beginning April 1, 2017, and principal paid annually with the initial principal due on October 1, 2017 and final maturity on October 1, PLEASE NOTE IF YOUR INSTITUTION IS NOT ABLE TO PROVIDE A TOTAL TERM OF UP TO THE REQUESTED TEN (10) YEARS, PLEASE PROVIDE THE LENGTH OF THE TERM OUT PERIOD THAT MAY BE AVAILABLE BEGINNING ON OCTOBER 1, Authority: Documentation And Legal Counsel Opinion: Security: Will be governed by the typical bond authorizing documents and opinions prepared by Bond Counsel and City Attorney and approved by selected Lender and its Counsel. The City expects to utilize its existing CB&A definitions and Anti-Dilution test as outlined in its 2013 CB&A Refunding Bonds. The City s obligation to repay any fees and Credit Facility draws will be documented in a manner typical of similar credit facilities, together with the customary closing papers and legal opinions from the City Attorney, Lender s Counsel and Bond Counsel, as needed. Advances under the 2013 Note, unless otherwise documented to the lender and supported by a Bond Counsel opinion, will be taxable. The 2013 Note will be payable from, and secured by a Covenant to Budget and Appropriate from legally available Non Ad Valorem Revenues. Please refer to Exhibit A and the City s FYE 2012 CAFR which provides updated information on the CB&A Anti-Dilution Coverages on an historical basis using the 2011 and 2012 FYE audited financials. The outstanding CB & A related debt currently consists of the $13,785,000 Series 2013 Refunding Bonds and the debt outstanding under the 2011 Note of $13,771,509 as of 9/30/12. No additional usage under the 2011 Note is expected and at closing of the 2013 Note the 2011 Note will be fully paid off with no additional advances under the 2011 Note. As provided to the rating agencies as part of the process for the 2013 CB&A Refunding Bonds, historical CB&A coverage has ranged from 7.66X to 8.27X based on a Anti-Dilution Test minimum of 1.50X. As of August 2013, the City had underlying CB&A ratings from Moody s, Fitch and S&P, respectively of Aa3, AA-, and AA-. Exhibit A provides a summary of current ratings and the recent CB&A credit rating reports. 6

7 Future Financings: Future usage under the proposed 2013 Note up to the $25,000,000 aggregate limit will be tied to the City Commission s approval of any new parcels under consideration for land purchase, assemblage, development/ redevelopment/, and other project costs, and any other capital infrastructure or CIP program needs. Repayment Terms: Please refer to Exhibit A for the existing Series 2013 Bonds, and proforma 2013 Note s debt service schedules including the Key Preliminary Assumptions. Following the Interest Only period, principal repayments will continue to be structured on a level semi-annual principal and interest basis for the proposed Seven Year Term Period. Early Prepayment and Rate Quotes: The bidder shall specify clearly any prepayment restrictions and penalties, or make-whole provisions, if any, including any prepayment period. The City is requesting consideration of either (i) a variable taxable, NonBQ or BQ tax exempt Rate Options for the Interest Only Period and Term Period under the 2013 Note with no prepayment penalty of any kind, or, (ii) a fixed taxable, NonBQ or BQ tax-exempt Rate Options for the Interest Only or Term Periods (with or without a prepayment penalty). The City does not anticipate the need for, but reserves the right to consider, the future utilization of an interest rate hedge (cap, collar, or swap) on all or a portion of this debt if the floating rate option is utilized. All rate quotes are to be based on an acceptable market standard index of (A) a percentage (%) of Prime or (B) a percentage of 1 Month or 6 Month LIBOR for the variable rates, and an index based on U.S. Treasury Rates or other typical indices for the fixed rates. Reference to the 2012 CAFR will provide information regarding the current pricing under the 2011 Note Note Fees and Expenses: Please state the fees and expenses of the lender, if any, and its counsel that are applicable if Lender s Counsel is asked to only review documents provided by the City Attorney and Bond Counsel. All fees and expenses of the lender and their counsel under either scenario or other representatives of the lender shall be the obligation of the lender; however, such amount may be paid by an initial draw at closing and should be expressed as a not-to-exceed level. Such costs will be considered in determining the most favorable proposal. 7

8 Exhibit A A. Please review the attached documents for additional information. 1. City of Tamarac 2012 and 2011 CAFR s ( and 2010 Budget ( (available on the City s web-site at 2. Tamarac Historical (FYE 2012 and 2011), CB&A Coverage Tests and Schedule of Non-Ad Valorem Revenue Table. 3. Latest S&P, Fitch, Moody s rating agency CB&A reports and Summary of Ratings. 4. Proforma Sources and Uses Schedules and debt service schedules for proposed 2013 Note for the initial Three Year Interest Only Period and Seven Year Term Period based on the current level of debt outstanding on the 2011 Note. 5. $13,785,000 Series 2013 CB&A Bonds Official Statement. 6. Preliminary Financing Timetable, Series 2013 Note. 7. Distribution List, Series 2013 Note. 8