M E M O R A N D U M
To: Honorable Mayor and Town Council
From: Rafael G. Casals, ICMA-CM, CFM, Town Manager
Date: September 24, 2020
Re: Issuance of $15,250,000 Capital Improvement Revenue Bonds
REQUEST
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A RESOLUTION OF THE MAYOR AND TOWN COUNCIL OF THE TOWN OF CUTLER BAY, FLORIDA AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $15,250,000 IN AGGREGATE PRINCIPAL AMOUNT OF TOWN OF CUTLER BAY, FLORIDA CAPITAL IMPROVEMENTS REVENUE BONDS, SERIES 2020, FOR THE PURPOSE OF FINANCING THE COSTS OF IMPROVEMENTS TO FRANJO PARK, ACQUIRING VACANT LAND FOR PRESERVATION, CONSERVATION AND RESILIENCY PURPOSES, AND REIMBURSING THE TOWN FOR THE ACQUISITION OF VACANT LAND FOR THE SITE OF A NEW CIVIC CENTER AND PUBLIC PARK, AND PAYING COSTS OF ISSUANCE OF THE BONDS; COVENANTING TO BUDGET AND APPROPRIATE CERTAIN LEGALLY AVAILABLE NON-AD VALOREM REVENUES OF THE TOWN TO PAY DEBT SERVICE ON THE BONDS; PROVIDING CERTAIN DETAILS OF THE BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF THE BONDS; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION WITH THE BONDS; AUTHORIZING THE NEGOTIATED SALE OF THE BONDS TO THE UNDERWRITER AND WAIVING COMPETITIVE BIDDING; APPROVING THE FORM AND EXECUTION OF A BOND PURCHASE AGREEMENT; DELEGATING CERTAIN AUTHORITY TO THE TOWN MANAGER FOR THE APPROVAL OF THE TERMS AND DETAILS OF SAID BONDS; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; APPROVING THE FORM OF AND AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT WITH RESPECT TO SUCH BONDS; AUTHORIZING OBTAINING A BOND INSURANCE POLICY AND ANY NECESSARY COVENANTS WITH RESPECT THERETO; AUTHORIZING THE EXECUTION AND DELIVERY OF A DISCLOSURE DISSEMINATION AGENT AGREEMENT WITH DIGITAL ASSURANCE CERTIFICATION, L.L.C; AUTHORIZING A BOOK-ENTRY REGISTRATION SYSTEM FOR THE BONDS; PROVIDING FOR SEVERABILITY; AND PROVIDING FOR AN EFFECTIVE DATE.
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BACKGROUND AND ANALYSIS
On August 26, 2020, the Town Council adopted Ordinance No. 20-09 authorizing the issuance of not exceeding $15,250,000.00 of Capital Improvements Revenue Bonds for the purpose of financing the cost of improvements to Franjo Park, acquiring vacant land for preservation, conservation and resiliency purposes, and reimbursing the Town for the acquisition of vacant land for the site of a new civic center and public park, in accordance with the provisions of the Charter of the Town and Chapter 166, Florida Statutes.
As a result, Town Staff is issuing the bond documents that we, in collaboration with the Town’s Financial Advisor (Estrada Hinojosa), Town Attorneys and Underwriters, have developed. Please find attached hereto the following exhibits for your review:
Ø Exhibit “A” - Form of Bond
Ø Exhibit “B” - Bond Purchase Agreement
Ø Exhibit “C” - Disclosure Dissemination Agent Agreement
Ø Exhibit “D” - Preliminary Official Statement
Our Financial Advisor has evaluated several municipal bond underwriting firms which have issued similar Capital Improvement Revenue Bonds. The Financial Advisor is recommending RBC Capital Markets, LLC (“RBC”) to Underwrite the Town’s proposed Revenue Bonds. RBC is a Florida based firm and one of the nation’s top municipal underwriting firms with over sixty-seven billion dollars ($67 billion) of bond issuances. Additionally, RBC serves as the City of Bonita Springs, FL’s Financial Advisor and has worked closely with our Financial Advisor on past issuances. RBC’s qualifications are attached hereto for your review as Attachment “A”.
Pursuant to the terms of Section 3.10(A) of the Town Charter, I am recommending the waiver of competitive bidding for the selection of RBC Capital Markets, LLC as Underwriter of the Bonds of the Capital Improvement Revenue Bond Series 2020. The waiver of competitive bidding is based on the impracticality of meeting the schedule for competitive bidding and in the current interest rate and political environment it is critical to market the Bonds prior to the November 3, 2020 general Federal election.
RECOMMENDATION
It is recommended that the Town Council approve the attached Resolution authorizing the issuance of not exceeding $15,250,000 in aggregate principal amount of Town Capital Improvements Revenue Bonds, Series 2020. In addition, waiving the competitive bidding process based upon the Town Manager’s recommendation to contract with RBC Capital Markets, LLC. as the Town’s Bond Underwriter. The purpose of the Capital Improvement Revenue Bonds is for financing the costs of improvements to Franjo Park, acquiring vacant land for preservation, conservation and resiliency purposes, and reimbursing the Town for the acquisition of vacant land for the site of a new civic center and public park, and paying costs of issuance of the bonds.
ATTACHEMENTS
Ø Attachment “A” - RBC Capital Markets, LLC Qualifications