ACFR - FY2020 5-28-21 FINAL - Flipbook - Page 103
NOTES TO FINANCIAL STATEMENTS
CITY OF EUSTIS, FLORIDA
(Continued)
Note 10 - Long-Term Debt (Continued)
Governmental Activity Liabilities
The following is a summary of all long-term liabilities of the governmental funds at
September 30, 2020:
Note Payable - 2018 (Direct Placement)
The City contracted with United Southern Bank to provide financing in the amount of
$800,000 over a five year period. The purpose of the financing is to acquire a Pierce Fire
Ladder Truck. The five-year financing agreement is at a fixed interest rate of 2.29% with
the value of the equipment to be used as the collateral to support the loan. Principal and
interest are paid annually, commencing April 2018. Principal and interest for the current
year are $174,897.
Events of default include non-payment of amounts due (principal and interest), failure to
perform bond covenants without remedy within a 30-day period and bankruptcy or
receivership for longer than 90 days. Upon an event of default, the holder of the note may
appoint a trustee or receiver to pursue limited legal action to compel payment of all
amounts then due. In addition, the interest on the note increases to the default rate of 6%.
Acceleration of the payments due on the note shall not be a remedy unless other debt
secured by Non-Ad Valorem revenues is accelerated.
Note Payable – 2016 (Direct Placement)
The City awarded a contract to U.S. BankCorp Government Leasing and Finance, Inc. for
the financing of a Pumper Fire Truck. The five-year financing agreement in the amount of
$437,550 is at a fixed interest rate of 2.01% with the value of the truck will be used as
collateral to support the loan. Principal and interest are paid annually, commencing
January 2017. Principal and interest for the current year are $92,857.
Events of default include non-payment of amounts due (principal and interest), failure to
perform bond covenants without remedy within a 30-day period and bankruptcy or
receivership for longer than 90 days. Upon an event of default, the holder of the note may
declare all amounts for that fiscal year due and payable including application of the default
interest rate of 12%. Other remedies include taking possession of the leased asset for sale
with the proceeds utilized to pay off outstanding principal. Additional amounts may still be
due from lessee if proceeds are not sufficient to cover principal and applicable fees and
costs of disposal.
CRA Loan
In September of FY 2020, City contracted with USB bank to provide financing in the
amount of $3,000,000 for CRA – Community Redevelopment Trust Fund, projected three
large land blocks, located at City of Eustis Downtown purchase. The five-year financing
balloon loan is at a fixed interest rate of 2.875%. Principal and interest payments of
$16,512.37 will be paid monthly, commencing October 2020. In the event of default, the
lender may sell the collateral to pay all amounts due with proper written notice.
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