Note: Due to time limitations at the December 5, 2018, City Commission meeting the public hearing was opened and continued to this Special meeting.
Legislative Update: The proposed ordinance was presented on first reading to the City Commission on November 7, 2018 and was approved by a 3-0 vote. No changes have been made to the document. On December 5, 2018, due to time limitations this item was tabled to a Special meeting later schedule for December 13, 2018.
Issue Statement: The 2007 Note with Capital One is secured by a covenant to budget and appropriate (CBA) sufficient moneys to pay the principal and interest of the Note from Legally Available Non-Ad Valorem Tax Revenues. The covenant of this specific Note contains irregular language that restricts such Revenues to only Revenues Attributable to the General Fund. All of CBA debt held by Oakland Park, and CBA debt in general throughout the State, does not contain this restrictive requirement. The existence of the language requires staff to perform multiple coverage ratio and dilution tests, and complicates financial reporting and documentation within the Comprehensive Annual Financial Report and other reports. City bond counsel, Capital One, and City staff recommend amendment of the language.
Recommended Action: The terms of the loan were adopted by ordinance and can only be modified by such. Staff recommends the City Commission adopt the proposed ordinance on second reading, amending the covenant language and authorizing the City Manager to execute a modification agreement on behalf of the City.
In May 2007, the City Commission purchased the Municipal Building (5399 N. Dixie) and established its intent to reimburse costs through the future issuance of tax exempt financing. In October 2007, the City Commission adopted an ordinance approving a $4 million, 20-year loan with Wachovia Bank, N.A. The 2007 ordinance is attached to this agenda item as reference. In 2008, Wachovia Bank, N.A. was acquired by Wells Fargo in a merger. In February 2015, the Note was sold by Wells Fargo to Capital One Public Funding, LLC and notice was provided to the City in March of that year (letter attached).