HomeMy Public PortalAbout22-9944 - Convert Debt Payments to Interest Only PaymentsSponsored By: City Manager
RESOLUTION NO. 22-9944
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-
LOCKA, FLORIDA, AUTHORIZING THE CITY MANAGER TO
EXECUTE AMENDMENT #2 TO THE STATE OF FLORIDA
DEPARTMENT OF ENVIRONMENTAL PROTECTION LOAN
AGREEMENT WW800050 TO CONVERT DEBT PAYMENTS TO
INTEREST -ONLY PAYMENTS FROM DECEMBER, 2021 THROUGH
JUNE, 2023; PROVIDING FOR INCORPORATION OF RECITALS;
PROVIDING FOR AN EFFECTIVE DATE
WHEREAS, the City of Opa-Locka's Water -Sewer Fund has certain debt due to
having borrowed from the State of Florida Department of Environmental Protection State
Revolving Fund and also debt owed to the Miami -Dade Water and Sewer Department;
and
WHEREAS, the Water -Sewer Fund for the City is operating at a loss due to the high
level of annual debt service associated with this debt; and
WHEREAS, the City of Opa-Locka has requested the State of Florida Department of
Environmental Protection Department (State Revolving Fund) to convert debt repayment
on these loans to interest -only loans for a period of time in order to invest in water and
sewer infrastructure projects; and
WHEREAS, the State of Florida Department of Environmental Protection Department
(State Revolving Fund) and the City of Opa-Locka desire to enter into Amendment #2 to
Loan Agreement WW800050 (Attached hereto as Exhibit A"), in order to convert debt
payments during the period December, 2021 through June, 2023 to interest -only
payments.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSION OF
THE CITY OF OPA- LOCKA, FLORIDA:
SECTION 1. The recitals to the preamble herein are incorporated by reference.
SECTION 2. AUTHORIZATION
The City Commission of the City of Opa-Locka, Florida hereby authorizes the City
Manager to execute Amendment #2 to Loan Agreement WW800050, attached as Exhibit
"A", in order to convert debt payments during the period December, 2021 through June,
2023 to interest -only payments.
Resolution No. 22-9944
SECTION 3. SCRIVENER'S ERRORS
Sections of this Resolution may be renumbered or re -lettered and corrections of
typographical errors, which do not affect the intent of this Resolution may be authorized
by the City Manager, following review by the City Attorney, without need of public
hearing, by filing a corrected copy of same with the City Clerk.
SECTION 4. EFFECTIVE DATE
This Resolution shall take effect upon the adoption and is subject to the approval of the
Governor or Governor's Designee.
PASSED and ADOPTED this 12th day of January, 2022.
V-ronica J. Williams, Mayor
ATTEST:
J . nna Flores, City Clerk
APPROVED AS TO FORM AND
LEGAL SU FICIENCY:
Bur . o ette Norris -Weeks, P.A.
Moved by: Commissioner Davis
Seconded by: Vice Mayor Taylor
VOTE: 5-0
Commissioner Bass: YES
Commissioner Davis: YES
Commissioner Dominguez: YES
Vice -Mayor Taylor: YES
Mayor Williams: YES
2
City of Opa-locka
Agenda Cover Memo
Department
Director:
Bob Anathan
Department
Director Signature:
City
Manager:
John E. Pate
CM Signature:
Commission
Meeting
Date:
Jan 12, 2022
Item Type:
(EnterXin box)
Resolution
O ce
Other
%
Fiscal
Impact:
(EnterXin box)
N/A
Yes
No
Ordinance Reading:
(Enter X in box)
1si Reading
2"d Reading
X
Public Hearing:
(EnterXin box)
Yes
No
Yes
No
Funding
Source:
Account# :
(Enter Fund &
Dept)
Ex:
Advertising Requirement:
(EnterXin box)
Advertised on TRIM Notice sent out by County
Property Appraiser on August 24, 2020
Yes
No
Contract/P.O.
Required:
(EnterXin box)
Yes
No
RFP/RFQ/Bid#:
X
Strategic
Plan Related
(EnterXin box)
Yes
No
Strategic Plan Priority
Enhance Organizational
Bus. & Economic Dev
Public Safety
Quality of Education
Qual. Of Life & City Image
Communication
Area:
1111
Strategic Plan Obj./Strategy:
(list the specific objective/strategy this
item will address)
X
•
•
I■
•
III
Sponsor
Name
City Manager
Department:
City Manager
Short Title:
Conversion of State Revolving Fund Loan WW800050 to Interest -Only for a Twenty -Four Month Period to
facilitate the Water and Sewer Fund entering into a Resolution to borrow $1 million
Staff Summary:
Issue / Recommendation: Staff recommends the City Commission approve the conversion of the State
Revolving Fund Loan WW800050 repayment schedule for the Water -Sewer Fund to interest -only for a twenty-
four month period to improve this fund's liquidity to address current issues.
History: Several years ago the City obtained loans from the State through the State's Revolving Fund Loan
program to finance various water and sewer projects,. The current annual repayment schedule for these loans
$773,473. Additionally, during the period when the the City was experiencing extensive financial problems,
the City failed to make payments owed to the County. It was subsequently agreed that the City would repay
the County $5.5 million over a five-year period, plus interest at a 3% interest rate, as restitution for these
unpaid charges. These payments began in June, 2019 and are $1,201,092 annually.
Additionally, as part of the agreement for the County to assume responsibility for the billing of and collection
from the City's utility customers, the County has replaced nearly all of the City's water meter system for
approximately $2.5 million. There have been informal discussions with the County that this additional expense
will also be repaid over a five-year period at a 3% interest rate, starting in January, 2022. Consequently the FY
22 budget for debt repayment to the County is $1,611,092, with total debt payment, including payment to the
State, totaling $2,384,565. It should be noted that thus far there hasn't been formal agreement as to the amount
and timing of the second layer of County debt.
Current Activity: With $2.4 million of debt payment this year, the Water -Sewer Fund is forecasted to have a
loss of approximately $1.6 million. Without the debt payment requirement, the fund would have a surplus of
approximately $0.8 million. The operating parameters of the City's utility service have been compared to
another small utility and no significant operating cost issues were noted.
Since the City's utility rates are deemed to be high, a rate increase to return the service to at least financial
break-even isn't being proposed at this time, particularly since the primary cause of the loss is the significant
amount of debt service payments. Consequently, staff has been working with the County and State to
restructure the City's debt payment schedule, with initial emphasis on converting debt to interest -only
payments for a period of time to allow the Fund to avoid operating at a loss.. In response to these discussions,
the State has offered to convert loan WW800050 to interest -only for a twenty-four month period.
Financial Impact: The current annual payment for principal and interest on this loan is $139,240 or $278,480
for a twenty-four month period. Interest -only payments will be $24,337 for the same period. Converting this
loan to interest -only for a twenty-four month period will provide the Water -Sewer Fund with an additional
$254,143 to address other issues. The State has has left the period of repayment unchanged. Consequently, as
of December, 2023, the annual debt payment on this loan will increase to $205,741.
Staff recommends that the City Commission approve the second amendment to Loan Agreement WW800050
to covert it to interest -only through June, 2023.
Attachment:
1. Resolution
2. Loan Agreement Second Amendment
3. Revised Loan Amrotization Schedule
STATE REVOLVING FUND
AMENDMENT 2 TO LOAN AGREEMENT WW800050
CITY OF OPA-LOCKA
This amendment is executed by the STATE OF FLORIDA DEPARTMENT OF
ENVIRONMENTAL PROTECTION (Department) and the CITY OF OPA-LOCKA,
FLORIDA, (Local Government) existing as a local governmental entity under the laws of the
State of Florida. Collectively, the Department and the Local Government shall be referred to as
"Parties" or individually as "Party".
The Department and the Local Government entered into a State Revolving Fund Loan
Agreement, Number WW800050, as amended; and
The Local Government has requested a restructuring of the Loan; and
Certain provisions of the Agreement need to be revised.
The Parties hereto agree as follows:
1. The Semiannual Loan Payment, as established in Section 10.05 of the Agreement
and revised in subsequent Amendments, is amended as follows:
Semiannual Loan Payments numbered 29-32, due December 15, 2021 through
June 15, 2023 shall be $6,084.36 for interest only and zero (0) for principal. Semiannual Loan
Payments numbered 33-40 beginning December 15, 2023 and continuing semiannually thereafter
on June 15 and December 15 of each year until all amounts due hereunder have been fully paid,
shall include principal and interest and shall be in the amount of $102,870.57.
2. All other terms and provisions of the Loan Agreement shall remain in effect.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
1
This Amendment 2 to Loan Agreement WW800050 may be executed in two 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 amendment to the Loan
Agreement to be executed on its behalf by the Secretary or Designee and the Local Government
has caused this amendment to be executed on its behalf by its Authorized Representative and by
its affixed seal. The effective date of this amendment shall be as set forth below by the
Department.
for
CITY OF OPA-LOCKA
City Manager
Attest: Approved as to form and legal sufficiency:
City Clerk City Attorney
SEAL
for
STATE OF FLORIDA
DEPARTMENT OF ENVIRONMENTAL PROTECTION
Secretary or Designee Date
2
Calculation of Semiannual Payment for Remaining Years
Sponsor: Opa-Locka Funding Number: 800050
Beginning of Repayment Period: 06/15/2007 Payments Remaining: 12
Original Loan Combined Rate: 1.53
Date
Balance Disbursement Comb. Int Total Owed Present Payment
Forward Or Serv. Fee At At Value* At Amount
12/15/2023 12/15/2023 06/15/2023
06/15/2023 795,341.50 0.00 6,084.36 801,425.86
Totals: 801,425.86 795,341.50 102,870.57
Totals: 801,425.86 795,341.50 102,870.57
*Present value is the total owed divided by (1+(Combined interest rate)/2)
The Payment Amount is computed using the present value.
Thu, 28 Oct 2021 13:19 Page 1 of 7
State Re vol vi ng Fund Loan
*** Amortized Repayment Schedule * **
Spo nsor: Opa-Locka F unding Number: 800050
O riginal Loan
Interest: .765 GAA Rate: .765
Pmt . Serv . Fee SF
D ate No . Payment Paid I nterest I nterest Grt. All. Assmt . Principal Paid Total to Pay*
06/15/2007 0 .00 0 .00 0 .00 0 .00 0.00 0 .00 2,375,142 .00
12/15/2007 1 71,143 .00 0 .00 0.00 3,326 .56 3,326 .56 64,489.88 2,310,652.12
06/15/2008 2 71,143 .00 0.00 0 .00 8,838 .24 8,838.24 53,466 .52 2,257,185 .60
12/15/2008 3 71,143.00 0 .00 0.00 8,633 .73 8,633 .73 53,875 .54 2,203,310 .06
06/15/2009 4 71,143.00 0 .00 0 .00 8,427 .66 8,427 .66 54,287 .68 2,149,022 .38
12/15/2009 5 71,143. 00 0.00 0 .00 8,220 .01 8,220 .01 54,702 .98 2,094,319 .40
06/15/2010 6 71,143.00 0.00 0 .00 8,010 .77 8,010.77 55,121 .46 2,039,197 .94
12/15/2010 7 71,143. 00 0. 00 0.00 7,799.93 7,799 .93 55,543 .14 1,983,654.80
06/15/2011 8 71,143. 00 0. 00 0.00 7,587 .48 7,587 .48 55,968 .04 1,927,686 .76
12/15/2011 9 71,143. 00 0. 00 0. 00 7,373 .40 7,373 .40 56,396 .20 1,871,290 .56
06/15/2012 10 71,143. 00 0. 00 0. 00 7,157.69 7,157 .69 56,827 .62 1,814,462 .94
12/15/2012 11 71,143. 00 0. 00 0.00 6,940. 32 6,940 .32 57,262.36 1,757,200.58
06/15/2013 12 69,620. 18 47,503. 00 213. 06 6,721. 29 6,721 .29 8,461 .54 1,748,739 .04
12/15/2013 13 69,620. 18 0. 00 0. 00 6,688.93 6,688.93 56,242.32 1,692,496.72
06/15/2014 14 69,620. 18 0.00 0. 00 6,473. 80 6,473.80 56,672 .58 1,635,824 .14
Thu, 28 Oct 2021 13:19 Page 2 of 7
State Revolving Fund Loan
** * Amortized Repayment Schedule ***
Sponsor: Opa-Locka Funding Number: 800050
Original Loan Interest: .765
G AA Rate: .765
Pmt . Serv . Fee SF
Date No . Payme nt Paid Interest Interest Grt . All . Assmt. Principal Paid Total to Pay*
12/15/2014 15 69,620 .18 0 .00 0 .00 6,257 .03 6,257 .03 57,106.12 1,578,718.02
06/15/2015 16 69,620 .18 0.00 0 .00 6,038 .60 6,038 .60 57,542.98 1,521,175.04
12/15/2015 17 69,620 .18 0.00 0.00 5,818.49 5,818 .49 57,983.20 1,463,191.84
06/15/2016 18 69,620.18 0 .00 0 .00 5,596 .71 5,596 .71 58,426 .76 1,404,765 .08
12/15/2016 19 69,620. 18 0 .00 0 .00 5,373.23 5,373.23 58,873 .72 1,345,891.36
06/15/2017 20 69,620. 18 0.00 0 .00 5,148.03 5,148 .03 59,324 .12 1,286,567 .24
12/15/2017 21 69,620. 18 0.00 0.00 4,921 .12 4,921 .12 59,777 .94 1,226,789.30
06/15/2018 22 69,620. 18 0.00 0.00 4,692.47 4,692 .47 60,235.24 1,166,554.06
12/15/2018 23 69,620. 18 0. 00 0.00 4,462 .07 4,462 .07 60,696 .04 1,105,858 .02
06/15/2019 24 69,620. 18 0. 00 0.00 4,229.91 4,229 .91 61,160 .36 1,044,697.66
12/15/2019 25 69,620.18 0. 00 0. 00 3,995.97 3,995 .97 61,628 .24 983,069 .42
06/15/2020 26 69,620. 18 0. 00 0.00 3,760.24 3,760 .24 62,099 .70 920,969 .72
12/15/2020 27 69,620. 18 0. 00 0.00 3,522.71 3,522 .71 62,574 .76 858,394.96
06/15/2021 28 69,620.18 0. 00 0. 00 3,283. 36 3,283 .36 63,053 .46 795,341.50
12/15/2021 29 6,084. 36 0. 00 0.00 3,042.18 3,042.18 0.00 795,341 .50
Thu , 28 Oct 2021 13:19 Page 3 of 7
State Revol ving F und Loan
* * * Amortized Repayment Sched ule
Spo nsor: Opa-L ocka F unding N umber: 800050
Original Loa n I nterest: .765
G AA Rate: .765
Pmt. Serv . Fee SF
D ate No . Payme nt Paid Interest I nterest Grt. All . Assmt . Principal Paid Total to Pay *
06/15/2022 30 6,084.36 0.00 0.00 3,042.18 3,042 .18 0.00 795,341.50
12/15/2022 31 6,084.36 0 .00 0 .00 3,042 .18 3,042 .18 0.00 795,341.50
06/15/2023 32 6,084.36 0.00 0 .00 3,042 .18 3,042 .18 0 .00 795,341 .50
12/15/2023 33 102,870.57 0.00 0 .00 3,042 .18 3,042 .18 96,786 .21 698,555 .29
06/15/2024 34 102,870. 57 0 .00 0 .00 2,671 .97 2,671.97 97,526 .63 601,028 .66
12/15/2024 35 102,870.57 0 .00 0.00 2,298.93 2,298 .93 98,272 .71 502,755 .95
06/15/2025 36 102,870.57 0.00 0 .00 1,923 .04 1,923 .04 99,024 .49 403,731.46
12/15/2025 37 102,870.57 0.00 0 .00 1,544 .27 1,544 .27 99,782 .03 303,949 .43
06/15/2026 38 102,870.57 0. 00 0.00 1,162 .61 1,162 .61 100,545 .35 203,404 .08
12/15/2026 39 102,870.57 0. 00 0. 00 778 .02 778.02 101,314 .53 102,089.55
06/15/2027 40 102,870. 53 0.00 0.00 390.49 390 .49 102,089 .55 0 .00
Subto tals: 2,813,418. 02 47,503. 00 213. 06 195,279.98 195,279 .98 2,375,142 .00
*Total to pay may reflect activity du ring repayment term
Thu, 28 Oct 2021 13:19 Page 4 of 7
State Revolving F und Loan
* * * Amortized Repayment Schedule
Spons or: Opa-Locka Funding Number: 800050
All Increments Combined
Pmt . Serv . Fee SF
Date No . Payme nt Paid Interest Interest Grt . All . Assmt . Principal Paid Total to Pay*
06/15/2007 0 .00 0 .00 0.00 0.00 0 .00 0 .00 2,375,142 .00
12/15/2007 1 71,143 .00 0.00 0 .00 3,326 .56 3,326 .56 64,489 .88 2,310,652.12
06/15/2008 2 71,143 .00 0 .00 0 .00 8,838 .24 8,838 .24 53,466 .52 2,257,185 .60
12/15/2008 3 71,143.00 0 .00 0 .00 8,633 .73 8,633 .73 53,875 .54 2,203,310 .06
06/15/2009 4 71,143.00 0 .00 0 .00 8,427 .66 8,427 .66 54,287 .68 2,149,022 .38
12/15/2009 5 71,143. 00 0 .00 0.00 8,220.01 8,220 .01 54,702 .98 2,094,319.40
06/15/2010 6 71,143.00 0.00 0.00 8,010 .77 8,010 .77 55,121.46 2,039,197 .94
12/15/2010 7 71,143.00 0. 00 0.00 7,799.93 7,799 .93 55,543 .14 1,983,654 .80
06/15/2011 8 71,143. 00 0.00 0.00 7,587 .48 7,587 .48 55,968.04 1,927,686 .76
12/15/2011 9 71,143. 00 0. 00 0. 00 7,373 .40 7,373 .40 56,396 .20 1,871,290 .56
06/15/2012 10 71,143. 00 0.00 0. 00 7,157.69 7,157 .69 56,827 .62 1,814,462.94
12/15/2012 11 71,143. 00 0. 00 0. 00 6,940. 32 6,940 .32 57,262 .36 1,757,200.58
06/15/2013 12 69,620.18 47,503. 00 213. 06 6,721. 29 6,721 .29 8,461.54 1,748,739 .04
12/15/2013 13 69,620. 18 0. 00 0. 00 6,688. 93 6,688.93 56,242 .32 1,692,496 .72
06/15/2014 14 69,620.18 0. 00 0. 00 6,473. 80 6,473.80 56,672 .58 1,635,824 .14
Thu, 28 Oct 2021 13:19 Page 5 of 7
State Revolving Fu nd L oan
* * * Amortized Repayment Sched ule
Sponsor: Opa-Locka Fu ndi ng Number: 800050
All Increments Combined
Pmt . Serv . Fee SF
D ate No . Payment Paid Interest Interest Grt . All . Assmt . Pri ncipal Paid Total to Pay *
12/15/2014 15 69,620 .18 0.00 0.00 6,257 .03 6,257.03 57,106.12 1,578,718 .02
06/15/2015 16 69,620 .18 0 .00 0.00 6,038 .60 6,038 .60 57,542.98 1,521,175 .04
12/15/2015 17 69,620.18 0.00 0 .00 5,818 .49 5,818.49 57,983.20 1,463,191.84
06/15/2016 18 69,620.18 0.00 0 .00 5,596 .71 5,596 .71 58,426.76 1,404,765 .08
12/15/2016 19 69,620. 18 0.00 0 .00 5,373 .23 5,373 .23 58,873.72 1,345,891 .36
06/15/2017 20 69,620. 18 0 .00 0.00 5,148.03 5,148 .03 59,324.12 1,286,567 .24
12/15/2017 21 69,620.18 0.00 0 .00 4,921 .12 4,921 .12 59,777 .94 1,226,789 .30
06/15/2018 22 69,620.18 0.00 0.00 4,692 .47 4,692 .47 60,235 .24 1,166,554 .06
12/15/2018 23 69,620.18 0. 00 0.00 4,462.07 4,462 .07 60,696 .04 1,105,858 .02
06/15/2019 24 69,620.18 0. 00 0.00 4,229 .91 4,229.91 61,160 .36 1,044,697 .66
12/15/2019 25 69,620.18 0. 00 0.00 3,995.97 3,995 .97 61,628 .24 983,069.42
06/15/2020 26 69,620.18 0. 00 0.00 3,760.24 3,760.24 62,099 .70 920,969 .72
12/15/2020 27 69,620. 18 0.00 0.00 3,522.71 3,522 .71 62,574 .76 858,394 .96
06/15/2021 28 69,620. 18 0. 00 0.00 3,283. 36 3,283 .36 63,053 .46 795,341.50
12/15/2021 29 6,084. 36 0.00 0.00 3,042. 18 3,042.18 0 .00 795,341 .50
Thu, 28 Oct 2021 13:19 Page 6 of 7
State Revol ving F und Loa n
*** Amortized Repayment Schedule ** *
Sp onsor: Opa-Locka Fundi ng Number: 800050
All Increme nts Combined
Pmt . Serv . Fee SF
D ate No . Payment Paid Interest Interest Grt . All . Assmt . Principal Paid Total to Pay*
06/15/2022 30 6,084 .36 0 .00 0 .00 3,042 .18 3,042 .18 0.00 795,341 .50
12/15/2022 31 6,084.36 0 .00 0.00 3,042.18 3,042 .18 0.00 795,341 .50
06/15/2023 32 6,084 .36 0 .00 0 .00 3,042 .18 3,042.18 0.00 795,341 .50
12/15/2023 33 102,870.57 0 .00 0.00 3,042 .18 3,042 .18 96,786.21 698,555.29
06/15/2024 34 102,870. 57 0 .00 0 .00 2,671 .97 2,671 .97 97,526.63 601,028.66
12/15/2024 35 102,870. 57 0 .00 0 .00 2,298.93 2,298 .93 98,272.71 502,755 .95
06/15/2025 36 102,870. 57 0.00 0 .00 1,923 .04 1,923 .04 99,024.49 403,731 .46
12/15/2025 37 102,870.57 0.00 0.00 1,544 .27 1,544.27 99,782.03 303,949 .43
06/15/2026 38 102,870.57 0. 00 0.00 1,162 .61 1,162 .61 100,545 .35 203,404 .08
12/15/2026 39 102,870. 57 0. 00 0. 00 778.02 778 .02 101,314 .53 102,089 .55
06/15/2027 40 102,870.53 0. 00 0. 00 390 .49 390 .49 102,089.55 0 .00
Totals: 2,813,418. 02 47,503. 00 213. 06 195,279.98
*To tal to pa y may reflect activity du ring repaymen t term
195,279 .98 2,375,142 .00
Thu, 28 Oct 2021 13:19 Page 7 of 7