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BCC Minutes 03/01/1985 S - r= .. Naple., Florida, March 1, 1985 LET IT BE REMEMBERED, that in accordance with action taken on rebruary 19, 1985, the Board of County Co.mi..ioner. in and for the County of Collier .et in 8PICIAL 1188101 on this date at 10a50 A.M. In Building .p. of the Courthou.e Complex, Ea.t Naples, Florida, with the following ...ber. pre..ntl CHAIRMAN I Prederick J. Vo.. VICE CHAIRMANI C. C. -R.d- Holland Max Haaa. Anne Goodnight ABSENT I John A. Pi.tor ALSO PRESr.NTI Jaa.a C. Gil.a, Piscal Officer: Elinor M. Slcinner, Deputy Clurk: Burt L. Saunder., County Attorney: Donald B. Luak, County Manager, Neil Dorrill, Aaaiatant County Manag~r: Nancy Iaraelaon, Adain1.trative Asaiatant, various depart.ent heada and Deputy Chief Ra)'llOnd Barnett, Sheriff'. Departllent. AGENDA Diacu.sion regarding Bond Refinancing GDDAL DIlCU88ICXI Hr. David Fischer, of Fischer, JOhnaon. Allen and Burke, Inc., .aid he waa present to report on refunding the bond isaue. He .aid hi. fir. proc~eded, after the last Board lIeeting when the inveataent bankers and legal counael were aelected, with a aeeting where di.cu..ion wa. held regarding atrategy for rofunding. He .aid data ha. been gathered and hi. fir. has talked with rating aervices and the in.urer. and, within two w..k., it would be possible to go into a refunding. He .aid interest ratea have risen aince the laat Board .eeting. He aaid in Dec..ber, 1984 interest ratea for a aillilar i..ue were a. high a. 10-5/8\, which were higher than the original ia.ue. Re aald at the end of January there was auch an abaence of ia.u.. that inter..t. had fallen below 9'. He a.id what happena in a -window. i. that aoaething of a technical nature, that 1s not real, happen.. H. .aid intereat rates had not fallen below 9' but the technicality of an ab.ence of iaaues allow&d a "dried up" aupply and inter..t rata. fell .o.entarily. He aaid intere.t rat.a have now gone back to approxi- aately 9-5/8' ao, although the County Is off the aark now it do.a not 800~ ()~f)P~Gt ~~ Page 1 " '.I.' ,. '\.;,~""' '-...--....,.., 086 26 March 1, 1985 '* Pi';\' ...n a aonth fro. now i~~.re.t could not go back down. He .aid hi. fir. will proceed and will be r.ady to do the refunding if inter..t rat.. go down again. In r..pon.e to Co.-i..ioner Vo.., Hr. Fi.cher ..i4 it would talc. hi. fir. about thr.e weelc. to be ready to do the refunding. Mr. Pi.cher .aid When everything i. in place hi. fira can act a. quickly a. they receive authority froa the Board of County Comai..ion and could literally go out to aarket in two days. He .aid that the tea. had a target of approxiaately 9-1/8' a year ago but the rate. neyer got to that point. Mr. Pi.cher reterred to the hand-out he di.tributed and .xplained that at 9-1/4' there would be a Pre.ent Value Savingw of $785,000 which .e.na that over the lit. of the i..ue OVer 3 ~illion dollara would be .aved laying the refunding over the old i..ue. Hr. Pi.cher .aid a. far as the new i..u. for n.w proj.ct. in the real. of 5 to 6 million dollar., the County can i..ue this a. a .eparate i.¡~f or it would be convenient if it w.re i..ued together with the retinancing i.sue, which would result in a .avlngs of approxi.ately $100,000. He said refunding allowø the County to recapture up to 85' of th~ .xpen.... He eaid all the fee. charged, coaai..ion. paid to sales~.n to s~ll the bonde, and bond counsel fee. are recaptured by arbitrage. H. said if the County caae out at 9' the Internal Rev.nue S.rvic.. allow. the County to inve.t those proceeda at whatever it take. to recapture the co.ts, up to 85', .0 there i. an advantage of adding the 5 or 6 ~illion dollar i..ue to the refinancing i..u.. H. .aid if there i. a 30 ye~r bond is.ue, ev.n for a 5 million dollar bond i..ue, 30 y.ar. later it would cost 15 million dollar. to retire the principle and int.re.t. Be .aid even with a sllving. on the refunding, at be.t, the County woulcl eave betw~en 3 and 5 million dollar.. H. .aid that any expansion pro~rall that the County want. to add to the, or1gin"l bond i..ue will be additional burden, to a certain extent. He .aid to add 5 million dollars would add approximately $400,000 or $500,000 whlch ehould be taken into the Colllli..ioner.' deliberations. Mr. Fiecher r.co..ended on the r.fundlng that the teall go ah.lld at no co.t to the County, .ince all tee. are contingent upon a bond issue, and get the i.sue in plac~ and if a lIarlcet occur. where the n.t intere.t co.t i. 9-1/4' or better, which would give a top .aving. of $785,000, that would be II good refunding. Page 2 ..-. .---, r- .. -"--," ,..,...._-,-~. -_._--".-."".. .. t=I .. Karch 1, 1985 In r..ponle to Co..i..ioner Vo.., Mr. Pischer .aid if there i. a change in the federal tax .tructure the bond. would not become retroactive taxable. Coa.i..loner Va.. .aid it i. logical to have the team get everything in place to be ready for a "window· if it cOile.. He aaid the ..cond thing to do i. decide on the ·window.. Mr. Fi.cher aaid that even if the COlllli..ion decide. on a 9-1/4' window and the tea. goe. to ..r~et, they would still have to co.e baclc to the Coaai..ion and the Co"'la.ioner. would have the right to approve or dilapprove the awarding of the bond.. He .aid all the CoII.i..ion would do this date, rather than reconvening to give perlli..ion to go out into the aar~et, would be to allow the team to go out into the ..rtet at. the decided level. Fi~:al Officer Gile. referred to Schedule 4 of the hand-out and .aid it .how. difference. in the early year. cf the debt service and Hr. Pi.cher .aid that i. at 9-1/2' rate. Mr. Gile. .aid In the early year. there i. a difference of about $14,000 and that i. a lot of work for that a.ount. Hr. Pi.cher .aid thi. would achiev. a level debt .ervice where, ba.ically, the .aving. end. up greater on the long end than on the .hort end. Hr. Giles said that the co.t of i.suing i. li.ted at $861,000 and it wa" hi. underatandinq that if the cost of i..uing the refunding bond. was ~re than the present value .avings it would not be a good .ituation. Mr. Fi.cher .aid hi. figure. are all e.tiaates and it would be clo.e to a "wa.h" and 85' of the cost. would be covered. CoaIIhdoaer Goodaight ao.ed, .econded by eoaahdoner Ba..e aDd carr1.a 4/0, to ,et the refinancing tea. 1a p1ac. on the r.fuDdiDg. Coalli..ioner VO.. .aid the .econd decisiDn i. to deter.ine what inter.st rate the Board of County Comlli..ion would declare a ~window". Mr. Saunder. .aid, in the inter ill. if th~ noard decide. to add acre acney then that could be adverti.ed. Mr. Gilea agreed that waa a good idea and aaid, once the Commi.sion e.tabli.hed the "wlndow·, that the Co..i..ionera ahould reque.t froa the Financial Advisor a .tate.ent of Pre.ent Value Saving. at the refunding at l~vels COII.ia.ioner VO.. .uggeated at the la.t .eeting at 1, 3 and 5 million dollar. .0 the .aving. would be known if there i. an increa.e on top of the refinancing. CoaII1uioner Bau. ao.ed, .econded by Co_iu10ner Goodnight aDd carr1.a 4/0, that the ·w1ndow· 1ntere.t rate be .et at 9-1/4' or 1e.. BoDe 086 PAr.t 27 Page 3 _..__......"',......._.,....._.,,-.."'.._.,.,'-'''_....-_..;,,~.. ........ aÍÞ« 086 rACl 2~' to tIM edati.. reUDaDCi... eo..i..loner Yo.. ..ked Mr. Pilcher to let at this ·window· what the debt .ervice would be ~ey i. added to tbe current 23 .illion dollar avr..d. eo..i..ioner Holland .aid he would llke to ..e Mr. Pi.cher coae baok with the a.aunt that the County can i..ue that ha. already been validated. Mr. Pi.cher ..1d that 35 ~llllon dollar. w.re validated. Øe .aid that the County ha. another con.traint which i. the ability to pay which i. about 6-1/2 .illion dollar.. March 1, 1985 the Co..I..loner. know at variou. level. if i..ue. Mr. Pi.Cher . . . There being no further bu.in..., the aeeting w.. adjourned by Order of the Chair - Tlae, 11117 A.H. BOARD OF COUNTY COMMISSIONERS ,/~ PREDERIC~; . ~¡~, CH"IRMAN ATTEST I WILLIAM J. R!:AGAN, CLERK '\I'" ~~, A:'¿.t/{( ..6Y~' /'") r~,'~'K~--j'A: ~ ----ð___-I~.C. ;'Ó1e~e .inut~. F7U ap Oved by the ßCC onJ::1'~_.,6IY./'~ .. ~ ". '... ~r.'.nte4 , or a. corrected I'ø . . 'I ~N;""," Paqe .. LJ CJ r-, - ~----- ---E .,,, '