HomeMy WebLinkAbout08-20-2013 Regular Meeting179
Minutes of the Fairhope Airport Authority
August 20, 2013
The Fairhope Airport Authority met Tuesday, August 20, 2013, at 4:30 p.m. in the Delchamps Room,
City Building, 161 N. Section Street.
Present: Chuck Zunk, Chairman. Members: Rod Platt, Charlie Bassett, Pam Caudill, Joe McEnerney,
Howard Hadley, Jack Burrell (arrived at 4:40 p.m.); Non-members included James Gillespie and David
Bagwell, lawyer. Gayle Fogarty, City Executive Assistant took the minutes.
The minutes of the July 16, 2013 meeting were considered and approved on a motion Vt by Rod Platt,
2"d by Charlie Bassett were approved and unanimously carried.
Update on'The Academy at Fairhope"- Charlie Bassett informed the group that the lease for the
Academy was approved by the Baldwin County Board of Education on July 11. Chairman Zunk stated
that he e-mailed the proposed resolution for the Authority to approve that same lease between the
Airport Authority and the Baldwin County Board of Education to the Airport Authority members prior to
the meeting. A motion was made, I" by Pam Caudill and 2"d by Howard Hadley and unanimously carried,
approving the proposed resolution, inserted below in these Minutes.
Discussion of Advantage Sites Program — Rod Platt stated that Thompson Engineering informed him
that Phase I of the Environmental Assessment has been completed. The cultural survey was planned to
begin on August 19, 2013, Rod was unsure if that happened yet. Chairman Zunk asked when the
certification would be complete. Rod Platt stated that he plans to submit the information in January
2014.
Update on Wetlands/Stream Mitigation Bank Project — Rod Platt stated that he met with
Goodwyn/Mills/Caywood to review the estimated cost of revenue available. The company suggested a
stream bank rather than a wetland project. Goodwyn/Mills/Caywood will be in touch with Rod soon to
let him know if they think the project will generate some revenue. Chairman Zunk provided more
explanation and information on the topic.
Update on the East Side Project- Chairman Zunk stated that Volkert has completed their part of the
project, and that the Authority has received approval from the Army Corps of Engineers.
Update on Fiber Optics Installation — Charlie Bassett stated South light is installing a fiber optics cable
from CR 32 to Continental Motors.
Update on FBO lease renewal strategy options— Howard Hadley provided an update on the FBO lease
stating that he has spoken to Continental, and that he and Rod Platt have scheduled additional meetings
with Continental to discuss options.
Update of Hangar Site Proposals — Chairman Zunk stated that hangar spaces have received more
interest recently, than in the last six years. There was general discussion of the hangar site proposals.
Update on facility upgrades and maintenance of Public Safety Hangar — Howard Hadley informed the
group that the Public Safety Hangar is almost complete. He added that there was an issue with floor
staining that should be done in a couple of days, and then troopers will be ready to move in.
Update on roof repairs for main FBO building and hangars — Howard Hadley stated that the north
section of the main hangar is 25% done on the inside. The roof will be completed by mid -Sept. 2013, the
total cost will be: $174,000.
Update on storm damage and repair — Chairman Zunk informed the group that the storm on July 11,
2013 caused damage. Two major items damaged:
1. AWOS was damaged, est. of damages: $56,000/ Airport Authority will receive $25,000 from the
insurance company. It will be rebuilt differently than original construction; the tower will cost
$15,000.
2. Aground water drainage junction Box was also damaged.
Proposal to set a date for presentation of long term plans to City Council — Chairman Zunk stated that
he would like to present Airport Authority strategic plans at the City Council work session on Monday,
September 23, 2013. Jack Burrell agreed to set this item on the agenda.
Treasurer's Report- Joe McEnerney provided the treasure's report to the Airport Authority. He made a
few comments.
There being no furthgr business, the meeting was adjourned at 5:49 p.m.
C
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BE IT RESOLVED by the Board of Directors (the "Directors") of the
FAIRHOPE AIRPORT AUTHORITY, a public corporation under the laws of the State of
Alabama (the "Authority"), as follows:
Section 1. Findings. The Directors have found and ascertained and do
hereby declare as follows:
(a) the Authority owns and operates a public airport within the City of
Fairhope, Alabama, known as the H.L. "Sonny" Callahan Airport (the "Airport");
and '
(b) the Authority and the Baldwin County Board of Education, an
agency of the State of Alabama (the 'Board of Education") have determined it to
be necessary, wise and in the public interest that the Authority design, construct,
acquire, install and equip certain capital improvements near the Airport
(consisting initially of three, approximately 5,000 square foot class rooms and
related equipment and improvements) to establish a public aviation training
facility (the "Aviation Training Facility"); and
(c) the Aviation Training Facility will be utilized by the Board of
Education pursuant to a Lease Agreement between the Authority and the Board of
Education, the form of which is attached as Exhibit I hereto (the "Lease"), in
educating high school students of the Board of Education and, through a
collaboration arrangement among the Board of Education, Faulkner State
Community College and Enterprise State Community College, college/adult age
students of those institutions, in the fields of industrial and aircraft maintenance
and repair, welding, and other technical aviation -related skills; and
(d) pursuant to an agreement between, among others, the Authority
and the Board of Education, the Authority has obtained a line of credit from
Compass Bank, an Alabama banking corporation, of which not in excess of
$250,000 is presently outstanding (the "Line of Credit") and was borrowed to pay
design, architecture, engineering, legal and other soft costs, site preparation and
related costs respecting the Aviation Training Center; and
(e) the Board of Education has agreed to pay (1) all costs to design,
construct, acquire, install and equip the Aviation Training Facility, (2) such
amount as shall be required to pay and retire the Line of Credit), and (3) all costs
and expenses (including, without limitation, legal fees) incurred by the Authority
in connection with the Lease and the transactions therein contemplated (all such
costs and expenses collectively herein called the "Development Costs"); and
(f) upon the execution of the Lease, and prior to the Authority issuing
a notice to proceed respecting development of the Aviation Training Center, the
Board of Education shall remit to the Authority in immediately available funds
the amount of the Development Costs in an amount not in excess of $2,700,000
(the "Up -Front Development Amount"); and
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(g) pursuant to the Lease, the Board of Education will pay rent
consisting of, among other things, any and all amounts required to insure, operate,
repair, and maintain the Aviation +Training Facility, all as more particularly set
forth and described in the Lease; and
(h) the Authority has determined and deems it necessary, wise and in
the public interest to authorize the Chairman of the Directors to execute and
deliver the Lease, including such changes and modifications as the said Chairman
may deem necessary or desirable.
Section 1. Authorization of Lease. The Directors hereby authorize and
direct the Chairman of the Directors to execute and deliver, for and in the name and behalf of the
Authority, the Lease, in substantially the form presented to the meeting at which this resolution
is adopted (which form shall be attached to the minutes of such meeting as Exhibit I thereto and
which is hereby adopted in all respects as if set out in full in this resolution), together with such
changes, revisions and modifications as the said Chairman may negotiate with the Board of
Education or that the said Chairman may otherwise deem necessary, desirable or in the best
interest of the Authority. The Secretary of the Authority is hereby authorized and directed to
affix the corporate seal of the Authority to the Lease and to attest the same.
Section 2. Additional Documents and Actions Authorized; Authority
Checking Account. (a) The Chairman of the Directors and the Secretary of the Authority, or
either of them, are each hereby authorized and directed to execute and deliver, by and on behalf
of the Authority, such other instruments, consents, notices, directions, certificates, agreements or
other documents as may be necessary or desirable in carrying -out the transactions contemplated
by this resolution.
(b) The Directors do hereby resolve to open and establish a checking account at
Compass Bank in the County of Baldwin, Alabama for the purpose of holding the Up -Front
Development Cost payment from the Board of Education pending application of such funds for
payment of the costs of the Aviation Training Facility. Funds on deposit in said account shall be
invested as directed in writing by the Chairman or Treasurer of the Authority to such bank.
Section 3. Post -Issuance Tax Compliance Policy. The Directors hereby
adopt a policy respecting post -issuance compliance obligations of the Authority (the "Post -
Issuance Tax Compliance Policy") regarding any tax-exempt obligations of the Authority
heretofore or hereafter issued pursuant to the Internal Revenue Code of 1986, as amended (the
"Code"), in substantially the form presented to the meeting at which this resolution is adopted
(which form shall be attached to the minutes of such meeting as Exhibit II thereto and which is
hereby adopted in all respects as if set out in full in this resolution). The Chairman and the Vice -
Chairman are each hereby authorized and directed to modify or amend the Post -Issuance Tax
Compliance Policy as from time to time may be necessary or desirable in order to help enable the
Authority comply with its post -issuance obligations under the Code.
IN
FAIRHOPE AIRPORT AUTHORITY
EXHIBITS FOR RESOLUTION OF AUGUST 20, 2013
EXHIBIT I - OPERATING LEASE
[REST OF THIS PAGE BLANK, EXHIBIT STARTS NEXT PAGE]
tEj
OPERATING LEASE
STATE OF ALABAMA
COUNTY OF BALDWIN )
This Lease made as of the day of , 2013, by and between
FAIRHOPE AIRPORT AUTHORITY, a public corporation under the laws of the State of
Alabama, hereinafter called "Lessor," and the BALDWIN COUNTY BOARD OF
EDUCATION, an agency of the State of Alabama, hereinafter called "Lessee," which terms
Lessor and Lessee shall include, whatever the context admits or requires, singular and plural, and
the legal representatives, successors and assigns of the respective parties.
WHEREAS
(a) Lessor owns and operates a public airport within the City of
Fairhope, Alabama, known as the H.L. "Sonny" Callahan Airport (herein called
the "Airport"); and
(b) Lessor and Lessee have determined it is necessary, wise and in the
public interest that Lessor design, construct, acquire, install and equip certain
capital improvements at the Airport (consisting initially of three, approximately
5,000 square foot class rooms and related equipment and improvements) to
establish a public aviation training facility; and
(c) pursuant to the terms hereof, the aviation training facility will be
utilized by Lessee in educating certain high school students of Lessee and,
through a collaboration arrangement among Lessee, Faulkner State Community
College and Enterprise State Community College, college/adult age students of
those institutions, in the fields of industrial and aircraft maintenance and repair,
welding, and other technical aviation -related skills; and
(d) Lessee has agreed to pay all costs to design, construct, acquire,
install and equip the aviation training facility (including, without limitation, funds
to pay and retire a short term loan obtained by Lessor to pay design, development
and related costs), as well as all costs and expenses (including, without Iimitation,
legal fees) incurred by Lessor in connection with this Lease and the transactions
herein contemplated (collectively, the "Development Costs"); and
(e) Upon the execution of this Lease, and prior to Lessor issuing a
notice to proceed respecting development of the aviation training center, Lessee
shall remit to Lessor in immediately available funds the amount of the
Development Costs in an amount not in excess of $2,700,000 (the "Up -Front
Development Amount"); and
OPERATING LEASE Page 1 of 15
Q1
(f) Lessor has agreed to lease the facility to Lessee, and Lessee has
agreed to pay rent consisting of, among other things, any and all amounts required
to insure, operate, repair, and maintain the aviation training facility, all as more
particularly set forth and described herein.
This Lease is granted and accepted upon the following terms, covenants, conditions, and
stipulation:
WITNESSETH
PREMISES:
1.1 The Lessor does hereby let unto the Lessee the School, including the building,
parking lot, walkway, and immediately -adjacent areas, located in the City of Fairhope, County of
Baldwin, State of Alabama, on that site more particularly described in Exhibit A-1 attached
hereto (the "Main Site"), and the parking lot to be used jointly by the Lessor and Lessee on that
site more particularly described in Exhibit A-2 (the "Joint Parking Lot" and, together with the
Main Site and all improvements thereon, herein collectively from time to time called the
"School" or the "Premises").
2. TERM:
2.1 Subject to the terms and conditions contained herein, existing easements, and all
other applicable rules and regulations this Lease shall continue in force for and during the term
of Forty (40) years (the "Initial Term") immediately following the execution and delivery hereof.
2.2 At the end of the Initial Term this Lease shall be automatically be renewed for
additional five (5) year terms (each, an "Extension Term") unless Lessee gives Lessor written
notice of its intention to vacate the Premises subject to this Lease at least six (6) months prior to
the expiration of the Initial Term or the Extension Term then in effect.
2.3 The "Additional Rent Commencement Date" shall be the date upon which a
certificate of occupancy has been issued and the School and other improvements constructed for
the Lessee on the land shall have been delivered to Lessee.
3. USE:
(a) Lessee will comply at all times and in all respects with all applicable laws and
ordinances, insofar as the Premises hereby let are concerned, and the Lessee will not by any act
or omission render the Lessor liable for any violation thereof. Lessee will not commit any waste
of the property, or permit the same to be done, and will take good care of the Premises at all
times. The Lessee will be solely responsible for maintaining the Premises. Lessee may use the
Premises only for a school. As used in this Section 3(a) and elsewhere in this Lease, the term
"school" shall mean a facility that's primary use is the teaching of students of Lessee and/or the
OPERATING LEASE Page 2 of 15
students of any subtenant or licensee of Lessee. A facility that is primarily used for storage,
offices (including teacher offices), administrative, or other functions, even if such functions are
necessary in connection with the teaching of students or are required in connection with the
teaching of students at other locations, shall not be considered a "school" for purposes of this
Lease.
(b) Lessee and Lessor understand, acknowledge and agree that each shall have use
and access of the Joint Parking Lot in connection with the operation and use of the School, in the
case of the Lessee, and the Airport, in the case of the Lessor.
4. RENTAL:
4.1 In the event the Development Costs exceed the amount of the Up -Front
Development Amount paid by Lessee to Lessor, the difference shall be remitted by Lessee to
Lessor in immediately available funds within twenty (20) days of receipt by Lessee of an invoice
for such payment (the Up -Front Development Amount and any such other amount, 'Base Rent").
4.2 In addition to Base Rent, Lessee shall pay all costs associated with the insuring of,
the maintenance, upkeep and repair of, and the taxing of, the Premises, to be performed as a
"Triple Net Lease" with the Lessor, except as provided in Section 6.1 hereof and, further, if and
to the extent that the expenses of Lessor [including but not limited to interest and insurance]
connected with the Premises go up or down, Lessor and Lessee will agree on the amount
required to be paid and Lessee shall remit the same to Lessor. All amounts required to be paid
by Lessee to Lessor under this Lease, including, without limitation, the amounts required to be
paid pursuant to this Section 4.2 and Section 4.3 hereof, other than Base Rent, are herein
collectively called "Additional Rent". As used herein, "Triple Net Lease" means a lease
agreement wherein the lessee is solely responsible for all of the costs relating to the premises
being leased (including, without limitation, net real estate taxes, net building insurance and net
maintenance and repair) in addition to the base rent fee applied under the lease.
4.3. Lessor and Lessee agree that any assessments, license fees, municipal liens, and
every other type of special or ordinary governmental charge of whatsoever name, nature, or kind
which may be levied, assessed, charged or imposed on Lessor or which may become a lien or
charge on or against the land hereby demised, including any ad valorem tax imposed on the
property of Lessor or any sales, use or rental tax imposed on the rent paid by Lessee to Lessor, or
any part thereof, shall be paid and discharged by Lessee as they become due, promptly and
before delinquency, in the following manner (and that all such amounts shall be included within
the meaning of "Additional Rent"):
4.3.1 The Lessee shall pay all assessments, license fees, municipal liens, sewer
liens, and every other type of special or ordinary governmental charge of whatsoever name,
nature, or kind, which may be levied, assessed, charged or imposed or which may become a lien
or charge on or against the land hereby demised, including any ad valorem taxes imposed on the
property of the Lessor or any sales, use or rental tax imposed on the rent paid by Lessee to
OPERATING LEASE Page 3 of 15
Lessor, or any part thereof shall be paid and discharged as they become due, promptly and before
delinquency, or any part thereof, and upon the termination of this Lease the property or
possession thereof shall be returned to the Lessor without any liens, assessments, or charges on
the property.
4.3.2 If the Lessee shall in good faith desire to contest the validity of the amount
of any assessment, levy or other governmental charge herein agreed to be paid by Lessee, Lessee
shall be permitted to do so, and to defer payment of such charge, the validity or amount of which
Lessee is so contesting, until final determination of the contest, on giving to Lessor notice
thereof prior to the commencement of any such contest and the Lessee agrees to protect the
Lessor against any such tax or cost arising out of any such contest.
4.4 It is the intent and purpose of this Lease and the foregoing language in
establishing the monthly rental due from Lessee to Lessor for the Lease of the Premises that,
except as expressly provided for herein, Lessor shall incur no expense, costs, outlay, insurance
premiums, repair, maintenance, taxes, if any, or upkeep of any kind of the Premises, and that all
such amounts and costs shall be paid by Lessee.
4.5 All payments of Base Rent and Additional Rent hereunder shall be made from
such funds of the Lessee that shall be legally available for such purpose.
5. REPAIRS:
5.1 Except as otherwise expressly provided herein, Lessee shall make any and all
structural repairs to both the exterior and interior of the School, including the roof, which shall
remain the responsibility of the Lessee throughout the term of its occupancy of the leased
Premises. Lessor shall repair the same within a reasonable time after discovery. Should the roof
of the School leak at any time, the Lessee will repair (or, if necessary, replace) the same within a
reasonable time after discovery (not to exceed sixty (60) days except for force majeure plus
delays caused by Lessor) and in no event shall the Lessor be liable for damages or injuries
arising from the failure to make said repairs, nor shall the Lessor be liable for damages or
injuries arising from defective workmanship or materials installed by Lessee or otherwise, the
Lessee hereby expressly waiving the same. Lessor and its agents shall not be liable for any
deaths, injury, loss or damage resulting from any repair or improvement undertaken, voluntarily
or involuntarily, by or on behalf of, the Lessee, other than negligence or willfully wrongful acts
of Lessor. Any construction or roof installation provided by Lessee requiring a penetration of
the roof or which would otherwise compromise the structural integrity of the roof and supporting
members shall first require the written approval of the Lessor or architect/engineer of the Lessor.
Lessor's approval shall not be unreasonably withheld.
5.2 Without limiting the generality of Section 5.1 hereof, in the event air conditioning
equipment or a part of any air conditioning equipment is installed by Lessee on the roof of the
School, or in the event that the Lessee installs a sign on the roof, then Lessee shall be responsible
OPERATING LEASE Page 4 of 15
for repairing all roof leaks attributable to such installation during the term of this Lease at the
Lessee's sole cost and expense.
5.3 The Lessee will keep the Premises reasonably free of all debris and trash, and will
keep the downspouts, gutters and drains, if any, clean, open and free of obstruction, and in good
working order.
5.4 Lessor shall not be obligated or required to make any repairs or do any work on or
about the Premises or any part thereof, or on or about any other premises connected therewith,
but not hereby leased, except to the extent that may be herein expressly agreed. All other
portions of any building hereby leased shall be kept in good repair by Lessee and at the end of
the term hereof, the Lessee shall deliver the Premises to Lessor in good repair and condition,
reasonable wear and tear excepted.
5.5 Lessor reserves the right to enter upon the Premises upon reasonable notice
(except in an emergency) and to make such repairs and to do such work on or about the Premises
as Lessor may deem necessary, or that Lessor may be lawfully required to make, provided that
Lessor shall make all reasonable efforts to prevent or minimize disturbance to Lessee's
operations. Lessor reserves the right to visit and inspect the Premises at all reasonable times
upon reasonable notice. Lessor shall have the right to display "For Sale" and "For Rent" signs
on Premises, if Lessee fails to renew the Lease.
5.6 Should the Lessee fail to make repairs required under this Lease, and should such
failure continue beyond any applicable notice or cure period set forth in Section 12 hereof, the
Lessor may enter the Premises and make such repairs and collect the actual cost thereof from the
Lessee as additional rent after first furnishing Lessee reasonable notice. Except as herein
specifically provided, the Lessee will not make or permit to be made any alterations, additions,
improvements, or changes in the Premises, nor will the Lessee paint the outside of the School or
permit the same to be painted without the written consent of the Lessor, which consent shall not
unreasonably be withheld, before work is performed. The consent to a particular alteration,
addition, improvement or change shall not be deemed a consent to, nor a waiver or a restriction
against, alterations, additions, improvements or changes for the future.
5.7 Except as provided in paragraph 5.1, Lessee will keep all air conditioning
equipment, electrical wiring, water, water pipes, water closets, drains, sewer lines and other
plumbing on the Premises in such good order and repair and will do all repairs, modifications
and replacements which may be required by the applicable laws or ordinances. Lessor shall not
be liable to Lessee for any damages caused by, or growing out of, any breakage, leakage, getting
out of order or defective conditions of said air conditioning equipment, electric wiring, pipes,
water closets, drains, and sewer lines of plumbing, or any of them caused by Lessee, Lessee's
failure to comply with its obligations as set forth herein, or otherwise.
6. FIXTURES AND INTERIOR ALTERATIONS:
OPERATING LEASE Page 5 of 15
6.1 Lessee, at its own expense, and without approval of Lessor, may from time to
time during the term of this Lease make any interior alterations, additions, and improvements in
and to the Premises which it may deem necessary or desirable and which do not adversely affect
the structural integrity thereof or reduce the value of the School. Lessee shall perform such work
in a good workmanlike manner and in accordance with all valid requirements of municipal or
other governmental authorities. All permanent structural improvements shall belong to the
Lessor and become a part of the Premises upon termination or expiration of this Lease.
6.2 Lessee may construct and build or install in the Premises any and all trade
fixtures, floor coverings, interior and exterior lighting, heavy equipment, and other fixtures and
equipment of every kind and nature as may be necessary or desirable in the Lessee's operations,
which trade fixtures, floor coverings, interior and exterior lighting, heavy equipment and other
fixtures and equipment shall at all times be and remain the property of the Lessee or its
Licensees; and Lessee may remove all or any part of the same from Premises at any time,
provided, Lessee shall repair or reimburse Lessor for the cost of repairing any damage to the
Premises resulting from the installation or removal of such items.
7. HAZARD LOSS: CONDEMNATION, DEFAULT OF LESSOR:
7.1 In the event of the total destruction of, or partial damage to, the School and/or the
equipment upon the Premises by fire or other casualty, Lessee shall either, (i) proceed with due
diligence and dispatch to repair and restore the School and/or the equipment to the conditions to
which they existed immediately prior to the occurrence of such casualty, at Lessee's sole cost
and expense, or (ii) be deemed to have vacated the Premises and this Lease shall be deemed to
have terminated. Under no circumstances shall Lessor be obligated to rebuild or restore the
Premises, regardless of the reason for such damage or destruction.
7.2 No abatement of rent shall be made during the periods of repair, except to the
extent of any business or rent interruption insurance proceeds available to Lessor.
7.3 If all or any part of the Premises is taken by eminent domain ("eminent domain"
shall include the exercise of any similar power of taking, and any purchase or acquisition in lieu
of condemnation), or in the event the improvements are condemned and ordered torn down or
removed by lawful authority, then the term of this Lease shall cease as of the date possession
shall be taken by the condemning authority, or as of the date improvements are ordered torn
down or removed, whichever may be applicable, and all proceeds shall distributed on a prorated
basis between the Lessor and Lessee, with the Lessor receiving that portion attributable to the
land and the Lessee receiving that portion attributable to the improvements constructed with
proceeds of Base Rent, provided, however, if as a result of a partial taking of the Premises by
eminent domain, the ground floor area of the School is reduced by not more than twenty-five
percent (25%), the Lessor or the Lessee may elect to continue the term of this Lease and to
restore, at Lessee's expense, the remaining Premises to a complete architectural unit, signs and
interior of equal appearance and utility as they had previous to the taking, provided however, that
Lessee shall agree, in its sole discretion, that such reduced School is suitable for Lessee's use.
OPERATING LEASE Page 6 of 15
The Lessor shall be entitled to receive all of the proceeds of any total or partial taking of the
Premises by eminent domain, including any part of such award as may be attributable to the
unexpired leasehold interest or other rights of the Lessee in the Premises, and the Lessee's right
to receive any part of such proceeds. None of the foregoing shall in any way be construed to
preclude or prevent Lessee from seeking, in its own behalf, to defend such condemnation or to
procure damages for any and all losses occasioned thereby.
7.4 Notwithstanding anything to the contrary in this Lease, Additional Rent shall be
payable hereunder from and after the Additional Rent Commencement Date regardless of any
hazard loss, destruction, condemnation, force majeure, or other similar events (including, without
limitation, those provided above in this Article 7).
8. NOTICES:
Any and all notices, elections, or demands, permitted or required to be made under this
Lease shall be in writing, signed by the party giving such notice, election or demand, and shall be
delivered personally, or sent by overnight courier service by a company regularly engaged in the
business of delivering business packages (such as Federal Express) or sent by registered or
certified mail, to the other party at the address as may be supplied in writing. The date of
personal delivery or, if sent by overnight courier then the date of delivery as evidenced by the
courier's receipt, or, if mailed, then ten (10) days after the date of postmark, shall be the effective
date of such notice, election, or demand. For the purpose of this Lease:
The business address of the Lessor is:
The Fairhope Airport Authority
161 N. Section Street
Fairhope, Alabama 36532
Attention: Chairman
The business address of the Lessee is:
The Baldwin County Board of Education
2600 North Hand Avenue
Bay Minette, Alabama 36507
9. INSURANCE:
9.1 Lessee will provide for the, School liability, casualty insurance, wind and fire
insurance in the amounts and types customarily carried for its other school buildings, and will
seek to add Lessor as an additional insured on each policy.
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9.2 Any property stored in the Premises shall be at the sole risk of Lessee or its
licensees. The Lessor and its directors, officers, affiliates, servants, licensees, invitees and
employees shall not be responsible or liable at any time for any loss or damage to Lessee's
merchandise, equipment, fixtures or other personal property of any nature unless caused by the
negligent or willful acts or omissions of same..,
9.3 Neither Lessor nor Lessee shall be liable to the other for any loss or damage from
risks ordinarily insured against under fire insurance policies with extended coverage
endorsements, irrespective of whether such loss or damage results from their negligence or that
of any of their agents, servants, employees, licensees or contractors to the extent that such losses
are covered by valid and collectible insurance on the property at the time of the loss.
9.4 Lessee shall, at its expense, (i) keep the School premises and all improvements
thereon fully insured against loss and damage by fire, tornado and windstorm, vandalism,
malicious mischief and against such other hazards as are customary in the locale for the School
in an amount not less than the full replacement cost of the School premises and all improvements
thereon without consideration for depreciation, (ii) to the extent the Premises is ever determined
to be in a flood zone, keep the School premises and all improvements thereon fully insured
against loss and damage by flood in an amount not less than the full replacement cost of the
School premises and all improvements thereon without consideration for depreciation, and (iii)
provide general liability insurance and such additional insurance against injury, loss or damage
to persons or property arising out of the use or operation of the School premises as is customarily
maintained by owners of property similar to the School. All such policies shall state that the
Lessor shall be notified of any proposed cancellation at least 30 days prior to the date set for
cancellation. All such insurance shall be in form, issued by such insurance companies and be in
such amounts as shall be reasonably satisfactory to the Lessor, and shall provide that losses, if
any, shall be payable to the Lessee as a "loss payee," and all such liability insurance shall include
the Lessor as an "additional insured." Lessee shall provide the Lessor with a certificate or other
evidence of insurance acceptable to the Lessor evidencing the insurance coverage required
hereunder. In the event Lessee fails to provide such evidence within 10 business days of the
Lessor's request, or upon the Lessor's receipt of a notice of policy cancellation, the Lessor may
(but shall not be obligated to) obtain insurance covering the Lessor's interest in the School
premises and the Additional Rent payable with respect thereto at Lessee's sole expense, which
expense shall be included in, and payable by Lessee as, "Additional Rent" under this Lease.
10. HOLDOVER:
Should the Lessee continue to occupy the Premises after the expiration of any permissible
term or after a forfeiture incurred, whether with or against the consent of the Lessor, such
tenancy shall be a tenancy at sufferance and in no event a tenancy from month to month, or from
year to year, provided however, the Lessee shall in any event be required to give Lessor six (6)
months written notice of vacating the Premises as set out above.
11. NO WAIVER:
OPERATING LEASE Page 8 of 15
The failure of the Lessor or Lessee to insist, in any one or more instances, upon a strict
performance of any of the covenants of this Lease, or to exercise any right herein contained, shall
not be construed as a waiver; or a relinquishment for the future of such covenant or right, but the
same shall continue to remain in full force and effect. The receipt by the Lessor of rent, with
knowledge of the breach of any covenant hereof, shall not be deemed a waiver of such breach,
and no waiver by the Lessor of any provision hereof shall deemed to have made unless expressed
in writing, and signed by the Lessor.
12. DEFAULT:
12.1 The following events shall be "events of default" under this Lease.
12.1.1 Lessee shall stop using the Premises as a school for a period of six (6)
consecutive months.
12.1.2 Lessee shall fail to pay any installment of rent hereby reserved as and when
the same shall become due and such failure is not remedied within thirty (30) days following
written notice of such default, provided, however, that Lessor may impose a late charge equal to
five percent (5%) of any monthly installment of rental not paid by the fifth day of the month.
12.1.3 Lessee shall fail to comply with any material term, provision or covenant
of this Lease, other than the payment of rent, and shall not cure such failure within thirty (30)
days after written notice thereof is given by Lessor to Lessee, provided that if any such default
shall be a default that cannot be cured by the payment of money and cannot with diligence be
cured within such thirty (30) day period, and if the cure of such default shall be promptly
commenced and prosecuted with diligence, the period within which such default may be cured
shall be extended for such period of time as may be reasonably necessary to cure such default so
long as Lessee prosecutes such cure with diligence and continuity and provided the Lessor
receives periodic reports with respect thereto, and provided such additional time to cure shall not
apply to failure of Lessee to provide appropriate insurance coverages as are required in this
Lease.
12.2 Upon the happening of any one or more of the events of default as expressed
hereinabove, the Lessor shall have the right, at the option of the Lessor, to either annul and
terminate this Lease upon ten days written notice to Lessee and thereupon re-enter and take
possession of the Premises; or the right, upon thirty days written notice to the Lessee, to re-enter
and re -let the Premises, from time to time, as agent of the Lessee, and such re-entry or reletting
or both, shall not discharge the Lessee from any liability or obligation hereunder. Nothing
herein, however, shall be construed to postpone the right of the Lessor to sue for rents, whether
matured by acceleration or otherwise, but on the contrary, the Lessor is hereby given the right to
sue therefor at any time after default.
OPERATING LEASE Page 9 of 15
12.3 Upon termination or breach of this Lease or re-entry upon the Premises for any
one or more of the causes set forth above, or upon termination of this Lease or re-entry of the
Premises, the rents provided for in this Lease for the balance of the original rental term or any
renewal term or other extended term, and all other indebtedness of the Lessor owed by the
Lessee, shall be and become immediately due and payable at the option of the Lessor and
without regard to whether or not possession of the Premises shall have been surrendered to or
taken by the Lessor. Provided that Lessor is the prevailing party, the Lessee agrees to pay
Lessor, or on Lessor's behalf, a reasonable attorney's fee in the event Lessor employs an
attorney to collect any rent due hereunder by Lessee, or in the event the Lessee violates any of
the terms, conditions, or covenants on the part of the Lessee herein contained. In order to further
secure the prompt payments of said rents, as and when the same mature, and the faithful
performance by the Lessee of all and singular terms, conditions and covenants on the part of the
Lessee herein contained, and all damages, and costs that the Lessor may sustain any reason of the
violation of said terms, conditions, and covenants, or any of the them, the Lessee hereby waives
any and all rights to claim personal property as exempt from levy and sale, under the laws of any
State of the United States.
12.4 In the event the Lessee abandons the Premises before the expiration of the term,
whether voluntarily or involuntarily, or violates any of the terms, conditions, or covenants
hereof, the entire amount of any Base Rent and Additional Rent or other amounts owed by
Lessee shall be immediately due and payable by Lessee to Lessor, and the Lessor shall have the
privilege, at Lessor's option, of re-entering and taking possession of the Premises and leasing all
or any portion of the Premises for such term and for such use deemed satisfactory to the Lessor,
applying each month the net proceeds obtained from said leasing to the credit of amounts owed
by the Lessee herein, up to the amount due under the terms of this Lease and the balance to the
Lessor and said leasing shall not release the Lessee from liability hereunder for the rents reserved
hereunder, and said difference shall be payable to the Lessor on the first day of each month for
the residue of the term hereof. For the avoidance of doubt, Lessee shall not be deemed to have
abandoned the Premises, whether or not it continues to occupy the Premises, as long as it
continues to pay rent, maintain and insure the Premises, and perform its other obligations under
this Lease.
12.5 No re-entry hereunder shall bar the recovery of rent or damages for the breach of
any of the terms, conditions, or covenants on the part of the Lessee herein contained. The receipt
of rent after breach or condition broken, or delay on the part of Lessor to enforce any right
hereunder shall not be deemed a waiver of forfeiture, or a waiver of the right of the Lessor to
annul the Lease or to re-enter the Premises or to re -let the same or to accelerate the maturity of
the rents hereunder.
12.6 If this Lease is terminated by the Lessor for any reason, including non-payment of
rent, and the Lessee pays the rent, attorney's fees and other charges and thus makes itself current
and/or remains or continues to be in possession of the Premises or any part thereof, with the
Lessor's written consent, this Lease will be considered reinstated, and will continue in effect as
though it had not been terminated.
OPERATING LEASE Page 10 of 15
12.3 Upon termination or breach of this Lease or re-entry upon the Premises for any
one or more of the causes set forth above, or upon termination of this Lease or re-entry of the
Premises, the rents provided for in this Lease for the balance of the original rental term or any
renewal term or other extended term, and all other indebtedness of the Lessor owed by the
Lessee, shall be and become immediately due and payable at the option of the Lessor and
without regard to whether or not possession of the Premises shall have been surrendered to or
taken by the Lessor. Provided that Lessor is the prevailing party, the Lessee agrees to pay
Lessor, or on Lessor's behalf, a reasonable attorney's fee in the event Lessor employs an
attorney to collect any rent due hereunder by Lessee, or in the event the Lessee violates any of
the terms, conditions, or covenants on the part of the Lessee herein contained. In order to further
secure the prompt payments of said rents, as and when the same mature, and the faithful
performance by the Lessee of all and singular terms, conditions and covenants on the part of the
Lessee herein contained, and all damages, and costs that the Lessor may sustain any reason of the
violation of said terms, conditions, and covenants, or any of the them, the Lessee hereby waives
any and all rights to claim personal property as exempt from levy and sale, under the laws of any
State of the United States.
12.4 In the event the Lessee abandons the Premises before the expiration of the term,
whether voluntarily or involuntarily, or violates any of the terms, conditions, or covenants
hereof, the entire amount of any Base Rent and Additional Rent or other amounts owed by
Lessee shall be immediately due and payable by Lessee to Lessor, and the Lessor shall have the
privilege, at Lessor's option, of re-entering and taking possession of the Premises and leasing all
or any portion of the Premises for such term and for such use deemed satisfactory to the Lessor,
applying each month the net proceeds obtained from said leasing to the credit of amounts owed
by the Lessee herein, up to the amount due under the terms of this Lease and the balance to the
Lessor and said leasing shall not release the Lessee from liability hereunder for the rents reserved
hereunder, and said difference shall be payable to the Lessor on the first day of each month for
the residue of the term hereof. For the avoidance of doubt, Lessee shall not be deemed to have
abandoned the Premises, whether or not it continues to occupy the Premises, as long as it
continues to pay rent, maintain and insure the Premises, and perform its other obligations under
this Lease.
12.5 No re-entry hereunder shall bar the recovery of rent or damages for the breach of
any of the terms, conditions, or covenants on the part of the Lessee herein contained. The receipt
of rent after breach or condition broken, or delay on the part of Lessor to enforce any right
hereunder shall not be deemed a waiver of forfeiture, or a waiver of the right of the Lessor to
annul the Lease or to re-enter the Premises or to re -let the same or to accelerate the maturity of
the rents hereunder.
12.6 If this Lease is terminated by the Lessor for any reason, including non-payment of
rent, and the Lessee pays the rent, attorney's fees and other charges and thus makes itself current
and/or remains or continues to be in possession of the Premises or any part thereof, with the
Lessor's written consent, this Lease will be considered reinstated, and will continue in effect as
though it had not been terminated.
OPERATING LEASE Page 10 of 15
13. TERMINATION:
The Lessee hereby agrees that upon the expiration or prior termination of this Lease, the
Lessee will promptly remove from the Premises all .signs, trash, debris and property of the
Lessee, and the Lessee will leave the floors, stairs, and passageways as clean as it is possible to
clean them by means of the use of broom and shovel, reasonable wear and tear accepted.
14. UTILITIES:
Lessor covenants and agrees that the Premises shall be serviced with electricity,
telephone, water, sewer, and natural gas as of the Additional Rent Commencement Date. Lessee
shall pay all charges for utility services furnished to the Premises during the Lease term, and all
costs for causing such utilities to be made available to the Premises.
15. QUIET ENJOYMENT SUBORDINATION:
15.1 As a condition precedent to this Lease, Lessor shall obtain from the holder of any
mortgage to the Premises, or of any lien on the Premises, a written agreement in recordable form
and in a form reasonably acceptable to Lessee and to Lessor's mortgagee, executed by the
mortgagee, or the holder of any other lien: (i) recognizing the existence of this Lease and
providing that so long as Lessee complies with the obligations imposed upon it in this Lease (i.e.,
so long as Lessee is not in default hereunder beyond any applicable notice and cure periods),
neither Lessee nor its successors and assigns shall be disturbed or molested in its possession of
the Premises and the full enjoyment of the rights granted to Lessee under this Lease; or (ii)
subordinating the mortgage, or other lien to this Lease. This provision shall be binding upon
beneficiaries and trustees in deeds of trust, mortgagee in mortgages and receivers thereunder, and
purchasers at any sale pursuant thereto, and holders of any other lien. Lessor's failure to comply
with this Article shall give Lessee, in addition to whatever other rights Lessee may have, the
right either to terminate this Lease or to be relieved of any or all obligations hereunder while said
failure on the part of the Lessor continues.
15.2 Lessor covenants and agrees that Lessee, subject to the terms and provisions of
this Lease, on payment of the rent and observing, keeping, and performing all of the terms and
provisions of this Lease on its part to be observed, kept, and performed, shall lawfully,
peaceably, and quietly enjoy the rights granted to Lessee under this Lease during the term hereof
without hindrance or ejection by any persons; provided, however, the Lessor is to have free
access to make use of the Joint Parking Lot (it being the understanding of the parties hereto that
the Joint Parking Lot will be used by Lessor and Lessee on a first come, first served basis.
15.3 Lessor represents and warrants to Lessee that:
15.3.1 Lessor has full right and power to execute and perform this Lease;
OPERATING LEASE Page 11 of 15
15.3.2 The Premises are free from all agreements, encumbrances or mortgages
except as specifically set forth in Exhibit B, provided however, that this Lease is subject to and
subordinate to all such encumbrances and mortgages as may now or hereafter be imposed on the
Premises (subject, however, to Lessee's right of non -disturbance), and to all renewals,
modifications, consolidations, replacements and extensions thereof. Any mortgage on the
property shall contain language which shall grant to Lessee its right to undisturbed occupancy of
the premises so long as the terms of the Lease are kept and maintained by Lessee.
15.3.3 There are no leases, agreements, restrictive covenants, zoning or other
ordinances or regulations which will prevent Lessee from using the Premises as a school without
restriction as to hours of operation. Lessor agrees not to adopt or impose any such matter in the
future which would have a material adverse effect on Tenant's business.
16. SELF HELP:
If Lessor shall default in the performance or observance of any agreement or condition
contained in this Lease which Lessor covenants on its part to perform or observe, and if Lessor
or any first mortgagee shall not cure such default within thirty (30) days after notice from Lessee
or Lessor specifying the default (except that no such notice shall be required in emergencies as
herein stipulated), or if Lessor shall not within the initial thirty (30) day period commence to
cure such default and diligently prosecute the cure to completion within a reasonable amount
paid or any reasonable contractual liability incurred by Lessee in so doing shall be deemed paid
or incurred for the account of Lessor; and Lessor agrees to reimburse Lessee therefor or save
Lessee harmless therefrom; provided, however, that Lessee may cure any such default as
aforesaid prior to the expiration of said waiting period and without such notice to Lessor and first
mortgagee if curing of such default prior thereto is reasonably necessary to protect the School or
Lessee's interest therein or to prevent injury or damage to persons or property. If Lessor shall
fail to reimburse Lessee within thirty (30) days after written notice upon demand for any amount
paid for the account of Lessor hereunder, said amount may be deducted by Lessee from the next
or day succeeding payments of rental due hereunder (excluding Base Rent).
17. SUBORDINATION OF LANDLORD'S LIEN:
Lessor hereby subordinates its landlord's lien upon any fixtures or equipment placed by
Lessee in the Premises to any mortgage or secured party of said fixtures or equipment, and
Lessor agrees to execute any instrument requested by Lessee and Lessee's mortgagee or secured
party which is reasonably required to effectuate the within subordination.
18. ATTORNEYS' FEES:
Lessee agrees to pay to Lessor all reasonably attorneys' fees incurred in event Lessor
employs an attorney to collect any rental or enforce other obligations due hereunder by Lessee,
or in the event Lessee violates any of the terms, conditions or covenants on the part of Lessee
herein contained. Likewise, Lessor agrees to pay Lessee all reasonable attorneys' fees incurred
OPERATING LEASE Page 12 of 15
in the event Lessor violates any of the terms, conditions and covenants on the part of Lessor
herein contained.
20. IMMIGRATION:
20.1 Compliance. By signing this contract, Lessor and Lessee affirm, for the duration
of the agreement, that they will not violate federal, immigration law or knowingly employ, hire
for employment, or continue to employ an unauthorized alien within the State of Alabama.
Furthermore, a contracting party found to be in violation of this provision shall be deemed in
breach of the agreement and shall be responsible for all damages resulting therefrom.
20.2 E-Verifv. Lessee shall at the outset of its performance under this contract, provide
to Lessor appropriate documentation establishing that it is enrolled in the E-Verify program.
During the performance of the contract, Lessee and each of its subcontractors shall participate in
the E-Verify program and shall from time -to -time at reasonable times verify that every employee
that is required to be verified according to the applicable federal rules and regulations, has been
verified.
21 MISCELLANEOUS:
21.1 Titles. The titles appearing in this Lease are for reference only and shall not be
considered a part of this Lease or in any way modify, amend or affect the provisions hereof.
21.2 Recordation. The Lessee agrees that any time on request of the Lessor, the Lessee
will execute a short form of the Lease in form permitting its recording. Lessee shall be required
to pay the cost of recording this Lease in the event Lessor shall record same, but shall not be
required to pay any intangible tax on the Lease or memorandum of Lease.
21.3 Complete Agreement. The written Lease contains the complete agreement of the
parties, except the Building Plans and Specifications to be formally approved by the parties in
accordance with the terms of this Lease. Neither party has made any representations or
promises, except as contained herein, or in some further writings, signed by the party making
such representation or promise. No waiver of any breach of covenant herein shall be construed
as a waiver of the covenant itself or any subsequent breach thereof.
21.4 Severability. If any term or provision of this Lease, or the application thereof to
any person or circumstance, shall, to any extent, be invalid or enforceable, the remainder of this
Lease or the application of such term or provision to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby, and each term and
provision to this Lease shall be invalid and enforced to the fullest extent permitted by law.
21.5 Time of Performance. Except as may be otherwise expressly provided herein,
time is of the essence of this Lease.
OPERATING LEASE Page 13 of 15
21.6 Successors and Assigns. (a) Each provision hereof shall extend to and shall, as
the case may require, bind and inure to the benefit of the Lessor and its successors and assigns,
and of the Lessee, and its successors, assigns and sublessees in the event this Lease has been
assigned or sublet. Each provision hereof shall be deemed both a covenant and a condition and
shall run with the land. Except as set forth in paragraph (b) immediately below, Lessee may not
assign the Lease or sublet all or any portion of the Premises without permission of Lessor, which
permission will not be unreasonably or capriciously withheld, judged by the standard of
commercial reasonableness.
(b) Anything in paragraph (a) immediately above to the contrary notwithstanding,
Lessee shall be permitted to sublease or license the Premises to Faulkner State Community
College, Enterprise State Community College, and any other educational institution within the
Alabama Community College System operated by the Department of Postsecondard Education
of the State Board of Education of the State of Alabama; provided, nothing herein shall release
Leseee from its obligations to pay Base Rent and Additional Rent to Lessor and, further,
provided Lessee and any such sublessee or licensee uses the Premises as a school.
21.7 Ambiguity. The terms, conditions and provisions of this Lease were agreed to in
arm's length negotiations in which each party was represented by independent counsel of its own
choosing. Accordingly, in the event of any ambiguity in this Lease, such ambiguity shall not be
resolved against the principal draftsman of this Lease.
This Lease consists of pages together with Exhibits which are attached
hereto and incorporated in this Lease by reference.
OPERATING LEASE Page 14 of 15
M
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease to be
executed, in multiple copies, each of which shall be deemed to be an original, as of the date first
written above.
LESSOR:
FAIRHOPE AIRPORT AUTHORITY,
a public corporation under the laws of the State of Alabama
As Its
ATTEST:
Its Secretary
LESSEE:
BALDWIN COUNTY BOARD OF EDUCATION,
an agency of the State of Alabama
NORMAN MOORE
As Its President
ATTEST:
ALAN T. LEE
As Its Superintendent and Ex-Officio Secretary
OPERATING LEASE Page 15 of 15
STATE OF ALABAMA
COUNTY OF BALDWIN
I,
State, hereby certify that
a Notary Public, in and for said County in said
, whose name as
, and , whose name as
of FAIRHOPE AIRPORT AUTHORITY, a public corporation under the
laws of the State of Alabama, are signed to the foregoing instrument and who are known to me,
acknowledged before me on this day that, being informed of the contents of the conveyance,,
they, as such officers and with full authority, executed the same voluntarily for and as the act of
said municipal corporation.
Given under my hand and seal this day of 12013.
Notary Public, Baldwin County, Alabama
My Commission Expires:
OPERATING LEASE
Page 16 of 15
EXHIBIT A-1
50
EXHIBIT A-2
51
EXHIBIT B
None
52
FAIRHOPE AIRPORT AUTHORITY
EXHIBITS FOR RESOLUTION OF AUGUST 20, 2013
EXHIBIT II - POST -ISSUANCE COMPLIANCE POLICY
[REST OF THIS PAGE BLANK, EXHIBIT STARTS NEXT PAGE]
53
FAIRHOPE AIRPORT AUTHORITY
POST -ISSUANCE COMPLIANCE POLICY FOR TAX-EXEMPT BONDS AND OTHER
TAX-EXEMPT OBLIGATIONS
This Post -Issuance Compliance Policy (this "Policy") sets forth specific policies and
procedures of the Fairhope Airport Authority (the "Authority"), designed to monitor post -
issuance compliance of its tax-exempt bonds and other tax-exempt obligations (collectively
referred to as 'Bonds") with applicable requirements of the federal securities laws and the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated
thereunder (the "Treasury Regulations"). The Authority reserves the right to change this Policy
from time to time.
I. Monitoring of Post -Issuance Compliance
A. Monitoring of post -issuance compliance for Bonds will be the primary responsibility
of Chairman of the Authority (herein called the "Chairman"). The Chairman may
designate officers or employees of the Authority to carry out, in whole or in part, such
duties under this Policy on his or her behalf; provided, however, the Chairman shall
cause to be implemented an adequate succession plan for transferring post -issuance
compliance responsibility when changes in leadership or staff occur.
B. The Chairman shall consult with bond counsel, a rebate consultant, financial advisor
to the Authority, IRS publications and/or such other resources as are necessary to
understand and meet the requirements of this Policy.
C. Training and education of the Chairman (which shall include, without limitation,
consultation with and training by bond counsel to the Authority) will be sought upon
the occurrence of new developments and/or upon the hiring of new staff or changes in
staff to implement this Policy.
II. Financing Transcripts. Documentation and Retention
A. The Chairman shall coordinate the receipt and retention of the following:
1. Basic records relating to the relevant tax-exempt financing (e.g., bond counsel
opinion, ordinances and resolutions, the Tax Compliance Agreement, .as
hereinafter defined, IRS Form 8038 and IRS Form 8038-G, yield of Bonds,
formal elections required by the Code, continuing disclosure agreement, etc);
2. Proof of filing of the IRS Form 8038-G, IRS Form 8038, or other appropriate IRS
forms filed in connection with the issuance of Bonds;
3. Documentation evidencing expenditure of proceeds of the issue (e.g., purchase
contracts, construction contracts, progress payment requests, requisitions, draw
requests, cancelled checks, payment of issuance costs, records of allocations of
proceeds, including reimbursements of project expenditures made before the
Bonds were issued);
ITS
4. Documentation regarding the types of facilities financed with the proceeds of the
issue;
5. Documentation evidencing the use of financed property by public and private
entities (e.g., any leases, subleases, agreements related to use, management
agreements, service agreements, and research agreements);
6. Documentation pertaining to any investment of the proceeds of the issue
(including the purchase and sale of securities, SLGs subscriptions, yield
calculations for investments, guaranteed investment contracts, and other types of
investments);
7. Documentation pertaining to any interest rate hedge or other derivative, including
the ISDA Master Agreement, schedules and annexes to the ISDA Master
Agreement, the initial confirmation and subsequent amendments or additional
confirmations, market valuations and payments and cash flows;
8. Rebate reports; and
9. Any reports of any IRS examination of Bonds.
B. The Chairman shall coordinate the retention of all such records in a manner that
ensures their complete access to the IRS for so long as the issue is outstanding
(including any refunding thereof), plus three (3) years. While this is typically
accomplished through the maintenance of hard copies, records may be kept in
electronic format so long as applicable requirements, such as Revenue Procedure 97-
22, are satisfied.
III. Federal Tax Law Compliance
A. Retention of Bond Counsel. With respect to each issue of Bonds, the Authority shall
engage nationally recognized bond counsel (herein called "Bond Counsel") to
provide an opinion or opinions as to the tax-exempt status of the Bonds, to address
requirements pertaining to the tax-exempt status of the Bonds, and to provide
guidance prior to and at closing with respect to any post -issuance tax compliance
matters. The requirements regarding the tax-exempt status of Bonds shall be
documented by Bond Counsel in a tax certificate or tax compliance agreement (herein
called the "Tax Compliance Agreement") finalized at or before the issuance of any
Bonds and signed by an authorized officer of the Authority.
B. Proper Use of Proceeds. The Chairman shall ensure that Bond proceeds are allocated
to expenditures in a manner set forth in the Tax Compliance Agreement, or, if
different than or not addressed in the Tax Compliance Agreement, as approved or
recommended by Bond Counsel. The Chairman shall maintain a procedure for
tracking expenditures and the allocation of proceeds of Bonds (including, without
2
55
limitation, investment earnings thereon) to expenditures. The Chairman shall
maintain proper procedures for tracking investment earnings for each issue of Bonds.
C. Investment of Proceeds. The Chairman shall ensure that proceeds of Bonds are
invested in investments as provided in the Tax Compliance Agreement, or, if different
than or not addressed in the Tax Compliance Agreement, as approved or
recommended by Bond Counsel. The Chairman shall maintain a system for tracking
investment earnings and monitoring investments during the applicable "temporary
period" (as defined in the Code and Treasury Regulations). The Chairman shall
arrange for timely yield restriction and/or the computation and payment of any yield
reduction payments (as such term is defined in the Code and Treasury Regulations), if
applicable.
D. Arbitraize Rebate Calculations. The Chairman shall cause the timely completion of
arbitrage rebate calculations, filings and payments.
E. Use of Bond -Financed Facilities. The Chairman shall consult with Bond Counsel
before the Authority enters into any agreement or other arrangement involving the
sale, lease, or use of the property financed with proceeds of any Bonds, including, but
not limited to, service, vendor and management contracts, research agreements,
licenses to use the financed property or naming rights agreements.
F. Post Issuance Transactions. The Chairman shall consult with Bond Counsel before
the Authority makes any modifications or amendments to the financing documents
for any Bonds, including, but not limited to, entering or. modifying investment
agreements, changing security for Bonds, engaging in post -issuance credit
enhancement transactions (e.g., municipal bond insurance, letters of credit, and
standby bond purchase agreements) or hedging transactions (e.g. interest rate swaps,
caps, or collars), releasing any liens, or reissuing or refunding Bonds.
G. Remedial Action. In the event it is determined that any use of the proceeds of the
Bonds, or facilities financed with Bonds, is a "change in use" as defined in the Code
and in Treasury Regulations) or otherwise causes Bonds to be deemed "nonqualified
bonds", the Chairman shall consult with Bond Counsel for the purposes of
determining the nature and extent of any remedial action necessary or proper for the
Authority to take with respect to Bonds or the facilities financed with proceeds
thereof.
IV. Continuing Disclosure Comnliance
The Chairman shall cause compliance by the Authority with each continuing
disclosure agreement and annually, per the continuing disclosure agreements of the
Authority, file or cause to be filed audited financial statements and other information
required by each continuing disclosure agreement of the Authority. The Chairman
will monitor the material events, as described in the continuing disclosure
agreements, and assure compliance with the material event disclosure requirements.
3
56
V. Annual Policy Review
On an annual basis, or sooner if deemed necessary by the Chairman, the Chairman
shall review this policy to assess the Authority's compliance with the same. The
Chairman shall suggest to Authority administration changes to the Policy as
appropriate to ensure compliance with the financing documents or requirements of
federal tax and securities law, and may rely upon the advice of Bond Counsel.
VI. Effective Date
This Policy shall be effective as of August 20, 2013, said date being the date on
which this Policy was adopted by resolution of the Board of Directors of the
Authority.
4
FAIRHOPE AIRPORT AUTHORITY
By:
Its: