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Agenda 07/22/2008 Item #16G 1Agenda Item No. 16G1 July 22, 2008 Page 1 of 7 EXECUTIVE SUMMARY Report to the Collier County Community Redevelopment Agency (CRA) providing an update on a proposed November 4, 2008 public referendum allowing the CRA to incur debt and to delay indefinitely the pursuit of a referendum. OBJECTIVE: Provide the Collier County Community Redevelopment Agency (CRA) with an update on a proposed November 4, 2008 CRA public referendum to allow the CRA to incur debt and to delay indefinitely the pursuit of a referendum. BACKGROUND: • On September 11, 2007, the County Bond Counsel informed the Board of the impacts of the recent Florida Supreme Court ruling in the Strand Case on the CRA's ability to incur debt. • On September 25, 2007, the Bayshore Gateway Triangle CPA Executive Director updated the CRA Board on the option to place `public referendum' language on the January 29, 2008 Presidential Primary ballot. • The Court heard Strand Case oral arguments at a rehearing on October 9, 2007; however the Court did not change the requirement for a CRA to receive public approval prior to issuing any form of debt. • On November 27, 2007 the CRA agreed to delay the referendum question until the November 4, 2008 Presidential election date. • In February 2008 the Court heard two Bay County, Florida CRA cases concerning use of TIE and bonding. CONSIDERATIONS: In view of the above, an inquiry was made to the Florida Redevelopment Association (FRA) as to the general opinion in the CRA community of when a Strand case opinion may be issued. FRA representatives stated that counsel associated with the pending cases believe that the Court will publish their opinion on CRAB and debt in early August 2008 just before summer recess. The Supervisor of Elections office deadline for submission of BCC - approved referendum language is August 26, 2008; however the last date to receive BCC approval is on this July 22, 2008 agenda. Any language approved in July will not be able to modified or corrected by the BCC based on the Court's opinion. Also unrelated to the Court ruling, but a factor to consider, are impacts of the 2007 Florida State Legislature's property tax reform actions and the January 2008 property tax reform ballot question recently passed by the electorate. These actions have had an effect on the CRA's future TIF calculations, and new TIF projections have not been recalculated but will be this fiscal year. The Bayshore Gateway Triangle CRA Local Advisory Board has discussed the options, benefits, and liabilities of holding a public referendum on the November 4, 2008 Presidential election ballot. The Advisory Board acknowledges the uncertainties of the situation and supports an l indefinite delay until after the Supreme Court opinion is known, and the CRA's TIE projections can be updated in which to make more accurate future financial decisions. Agenda Item No. 16G1 July 22, 2008 Page 2 of 7 Discussions with the County's Finance Committee on June 27, 2008, which included Bond Counsel, Nabors, Giblin, & Nickerson and Public Financial Management representatives, confirms that there are numerous factors to consider in determining the appropriate language and details to be included in a referendum question. Many of these factors remain undetermined at this time and will remain variables until the Supreme Court publishes its opinion. The Committee was in support of a CRA referendum delay. FISCAL IMPACT: None. The Bayshore Gateway Triangle CRA Trust Fund has sufficient funds to operate throughout FY2008 and FY2009. GROWTH MANAGEMENT IMPACT: Policy 4.7 of the Future Land Use Element of the Growth Management Plan states that redevelopment plans may be developed for specific areas within the County, including the Bayshore Gateway Triangle CRA. LEGAL CONSIDERATIONS: The County Attorney Office in conjunction with the County's Bond Counsel, Nabors, Giblin & Nickerson, Public Financial Management, the County Finance Committee, and based upon the expressed direction of the Bayshore Gateway Triangle CRA Local Advisory Board, recommends holding the CRA referendum at a later date. Any future referendum language will be drafted by the County Attorney and Bond Counsel for approval by the CRA and BCC. (SRT) RECOMMENDATION: That the Collier County Community Redevelopment Agency (CRA) receives this update on the proposed November 4, 2008 public referendum to allow the CRA to incur debt and delays indefinitely the pursuit of a referendum. Prepared by David L. Jackson on July 8, 2008 Executive Director, Bayshore Gateway Triangle CRA Page 1 of 1 Agenda Item No. 16G1 July 22, 2008 Page 3 of 7 COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS Item Number: 16G1 Item Summary: Report to the Collier County Community Redevelopment Agency (CRA) providing an update on a proposed November 4, 2008 public referendum allowing the CRA to incur debt and to delay indefinitely the pursuit of a referendum. Meeting Date: 7/22/2008 9.00.00 AM Prepared By David Jackson Executive Director Date Community Redevelopment Agency Bayshore- Gateway Redevelopment 7/912008 10:00:58 AM Approved By David Jackson Executive Director Date Community Redevelopment Agency Bayshore- Gateway Redevelopment 7/912008 10:01 AM Approved By OMB Coordinator OMB Coordinator Date County Manager's Office Office of Management & Budget 7/9/2008 10:14 AM Approved By Mark Isackson Budget Analyst Date County Manager's Office Office of Management & Budget 7/9/2008 10:17 AM Approved By James V. Mudd County Manager Date Board of County Commissioners County Managers Office 7/9/2008 12:28 PM file• / /C'.• \Aaenria Tect \Pxnnrt \111- hilv ° /�fl'I % ?n ?nog \16 o /nfl(YIU0PTQT0/ )0A(;P'kTn AA1 7/15/7(1f1R Agenda Item No. 16G1 July 22, 2008 Page 4 of 7 Finance Committee Agenda June 24, 2008 County Managers Conference Room 10:00 a.m. 1. Call to Order 2. Approval of January 18, 2008 Minutes 3. Financial Advisor discussion 4. Discussion on CRA Referendum - David Jackson , Executive Director, Bayshore Gateway Triangle CRA 5. Discussion on Surety concerns — Hal Canary, PFM; Steve Miller, NGN (telephone) 6. Discussion on bond disclosures: ■ Utility bond proceeds reallocation ■ Surety issue 7. Other Business ■ Conservation Collier 8. Adjourn. A The PFM Group Public Financial Maragemart Inc. PFM Asset Managemeo: LLC PFM Acvisors Memorandum Agenda Item No. 16G1 12730 New Brittany Boulevard 239- 2008 Suite 439 239 -93� 2 93 of 7 Fort Myers, FL www.afm. oiri 33907 -4685 June 23, 2008 To: John Yonkowsld From Hal Canary Sergio Masvidal CC: David Jackson, Crystal Kinzel, Jeff Klatzkow, Tom Wides, Steve Miller (NGN) Re: Finance Committee Topics —June 27 In order to expedite our discussions at the Finance Committee meeting this Friday, I provide the following comments on the CRA borrowing and replacement of sureties. Both items may appear on the Board of County Commissioners agenda for July 22. CRA Borrowing The ruling in the Strand v. Escambia County case has caused Tax Increment Financings to require county -wide voter approval. There has been some speculation that the ruling may be reversed or mitigated before November. But, the County should consider beginning the referendum process and initial work now, in order to be prepared to place this question to the voters, if necessary. PFM sees the following actions /decisions to be addressed: 1. Determine the will of the BCC; does the Board want to hold a referendum for a CRA financing? 2. Determine the nature of the financing. If the CRA must continue to hold a referendum for each borrowing, it probably should minimize the number of borrowings by increasing the size of the borrowings, within the confines of expected needs and arbitrage rebate regulations. The $7 million bank loan almost awarded to Wachovia last year will not meet current needs. The CRA should establish a timetable for land acquisitions and improvements around which PFM can structure a borrowing program. That program could consist of term loans, lines of credit, bonds or FLGFC commercial paper. 3. Draft referendum language consistent with the above determinations. Care must be taken to ensure the referendum question affords maximum flexibility as there are likely a number of variables and unknowns to arise in future financings. The referendum question must be approved by the BCC at its July 22 meeting. 4. Design and execute a public information program to make voters aware of the work the Bayshore- Gateway Triangle CRA does and how it benefits County taxpayers economically. Agenda Item No. 16G1 July 22, 2008 Page 6 of 7 5. If approved in November or if Strand is overturned before November, initiate the process to acquire appropriate financing. Replacement of Sureties In all of the County's recent bond issues, surety policies were purchased from the bond insurer as a substitute for a cash - funded Debt Service Reserve Fund. The sureties are generally secured in the amount of the Maximum Annual Debt Service and priced at a percent of MADS, generally around 2.0 to 3.0 percent. (Bond insurance is priced on a percent of Total Debt Service, generally around 0.3 to 0.5 percent.) The Bond Resolutions applicable to the bonds generally state a minimum rating requirement of the issuer of the surety policy, generally the highest rating category, Aaa /AAA /AAA, along with remedies required when the provider drops below the requirement. Generally such remedies require securing new surety or putting up qualified securities or cash within a specified period. The period may be five years for a drop to the second tier, Aa /AA /AA, and one year if below the second tier. Attached are tables of the rating status of bond insurers and the insurer information for County bond issues. We have already addressed the FGIC downgrade by idenfifving investment balances that can be designated as DSRF monies. Ambac and MBIA were downgraded last Friday by Moody's Investors Service to Aa3 and A2, respectively. They are still AA by Standard & Poor's and Fitch Ratings; however, Moody's matters and Fitch does not, according to the Bond Resolution. By Fridav, we should have concluded our analysis and consultation with the County's Bond Counsel. Preliminarily, it appears the Series 2005 Capital Improvement Bonds present the big challenge, MADS is $12.7 million and the MBIA surety of that amount must be replaced. Fortunately, Collier County has the resources available. We look forward to discussing these and other topics with you on Friday. - / E ƒ ) \ ) e ( \)\ \ \ \ \ \} \j ) \ / } z \ \ ( ) 7 73 } } } } ) ) J ±) \ \ ) \ ) e ( \)\ \ \ \ \ \} \j ) \ / } z \ \ / \ \ } } a a /78) § — \ \\ \\ - -\ } \ \) } \) \ \\ \ \ \\ \ } } })\) \)/ \)