Agenda 04/09/2024 Item #16K 4 (Resolution - Issue revenue bonds to be used to finance the construction of expansions and improvements to the central water system that serve the Ave Maria University and Town)04/09/2024
EXECUTIVE SUMMARY
Request by the Collier County Industrial Development Authority for approval of a resolution authorizing
the Authority to issue revenue bonds to be used to finance the construction of expansions and improvements
to the central water, wastewater, and reuse systems that serve the Ave Maria University and Town, and the
refunding of the currently outstanding bonds from the Authority's issuance of bonds in 2005 to fund the
initial construction of the system.
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OBJECTIVE: To accomplish the necessary approvals to authorize a proposed revenue bond issue by the Collier
County Industrial Development Authority (the "Authority") to be used to finance the construction of certain water
and wastewater facilities owned and operated by Ave Maria Utility Company, to provide utility services to Ave
Maria town and university.
CONSIDERATIONS: The Authority received an application for financing from Ave Maria Utility Company,
LLLP ("AMUC") requesting approval of an Inducement Resolution approving the issuance of revenue bonds for
proposed expansions and improvements to the central water, wastewater, and reuse systems that serve the Ave
Maria University and Town, (the "Project" as described below), and the refunding of the currently outstanding
bonds from the Authority's issuance of bonds in 2005 to fund the initial construction of the system.
Background - Collier County Industrial Development Authority
Chapter 159, Florida Statutes, authorizes each county of the state to establish an industrial development
authority, and the Collier County IDA was created by the Board of County Commissioners in 1979. An IDA is
empowered under Chapter 159 to issue revenue bonds for a variety of projects and facilities, the development of
which are deemed to foster a public purpose. Over the past 43 years, the IDA has issued bonds for private
educational facilities such as Community School and Seacrest Country Day School, manufacturing facilities such as
Gulf Coast American Blind Corporation and March Performance, Inc., retirement communities such as the
Arlington of Naples, and hospital and medical facilities such as for the recent Naples Community Hospital Heart
Center and Orthopedic Hospital.
Background - Ave Maria Utility Company
AMUC was established in 2004 following the creation of the town of Ave Maria in eastern Collier County
as part of the county's Rural Lands Stewardship Program. Construction of the system started in summer, 2005, a nd
service began in late 2007 with a .99 MGD water treatment facility and a .90 MGD wastewater treatment facility.
The initial construction was financed by bonds issued by the Authority in 2005 in the original amount of $18
million. The 2005 bonds were approved by the Commission on April 26, 2005, by Resolution 05-170 (copy
attached). These bonds are currently outstanding in the amount of $10,655,000. The application states that these
bonds are not, and have never been, in default, and all payments have been made in accordance with the
requirements of the bonds. A portion of the proceeds of the currently proposed financing will refund/re -issue these
bonds.
AMUC is the exclusive water and wastewater provider within the Ave Maria community, and is a
regulated, privately-owned, but public utility obligated to provide service to all those persons or businesses within
its territory on a fair, equal, and non-discriminatory basis. It is the holder of a certificate to operate by the Collier
County Water and Wastewater Authority.
The proposed financing is a response to, and made necessary by, the substantial growth of the Ave Maria
community. There are currently 8,000 water and 8,175 equivalent residential connections (ERCs) scheduled to be
connected to the system over the next few years. AMUC's peak plant flow is nearing capacity, and without the
proposed expansion, the continued development of the Ave Maria community would be severely compromised.
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The Project
Water Treatment Plant (WTP): The WTP Phase 2 Expansion Project will increase the WTP permitted production
capacity to 2.5 mgd using the existing membrane facility capacity of 1.67 mgd of permeate and up to 0.83 mgd of
Sandstone aquifer well bypass blending. Other process components are being modified to produce finished water
that meets the Borrower's goals and Florida Department of Environmental Protection ("FDEP") drinking water
standards.
Wastewater Treatment Plant (WWTP): The Phase 2 WWTP Expansion will increase the FDEP permitted capacity
to 1.80 mgd utilizing existing components and adding new components to the existing facilities that will
accommodate growth. Future expansion phases to the WTP and WWTP will be required to meet the projected
community growth demands.
Plan of Finance
The total cost of the Project and the refunding is $42,355,000. The application is for bonds not exceeding
$35 million, and as stated therein, the applicant will make a cash equity contribution of the remaining $7,355,000.
The bonds will be revenue bonds, payable from, and secured by, a first lien on system revenues. While the
application states that the bonds may also be further secured by a mortgage on system assets, or by a secondary
pledge from Applicant's parent corporation, the application states (and affirmed by company officers) that "the net
cash flow from the AMUC operations are sufficient to allow AMUC to make timely payment on not only its
existing, but its future debt obligations being incurred hereby, plus pay for its cost of operations, inclu ding
maintenance."
The bonds will not be publicly offered, but will be privately placed with US Bancorp. Similar to the 2005
issue, the bonds are intended to be backed by a letter of credit.
Authority Public Hearing/Findings and Determinations by the Authority
The Authority met on March 19, 2024, considered the application and supporting documentation, and heard
presentations from AMUC's officers and representatives. The meeting was noticed by publication in the Naples
Daily News in accordance with the regulations for such notice contained in the Internal Revenue Code, inviting
attendance, participation, and comments from members of the public. The meeting was also noticed through a
press release by the County's Public Information Office, and a notice of the meeting and the agenda were placed on
the Authority's page on the County website. No members of the public attended the meeting either in person or
remotely or submitted comments. At the conclusion of the public hearing and the presentations by AMUC the
Authority determined to proceed with the financing and adopted a resolution evidencing such approval (the
"Authority Resolution", attached as Exhibit A to the "County Resolution"). The notice published in the Naples
Daily News is attached as Exhibit A to the Authority Resolution.
As set forth in Chapter 159, Florida Statutes, in considering a bond financing application, the Authority
considers several factors as follows:
1. The project is appropriate to the needs and circumstances of the community and shall make a significant
contribution to the economic growth of the County; shall provide or preserve gainful employment; shall preserve
the environment; and shall serve a public purpose by advancing the economic prosperity, the public health, or the
general welfare of the State. With respect to AMUC, the application and information presented to the Authority
shows the following:
A. AMUC currently operates a Phase I water treatment plant (.999 mgd) and a Phase I wastewater
treatment plant (.900 mgd). It provides water and wastewater utility services to the Ave Maria
town and university under a certificate from the Collier County Water and Wastewater Authority
along with necessary permits from the Florida Department of Environmental Protection. DER
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regulations provide that as a system nears capacity, it must begin design, permitting, and
construction of necessary expansions.
B. The AMUC system currently has 23 employees, and the contemplated expansion will create an
additional 12 full-time jobs. Beyond the direct effects of the project, without the continued
expansion of the Ave Maria utility system further development of the system will slow or cease,
and there will be an adverse ripple effect throughout the Ave Maria community.
C. The recent growth of the Ave Maria community has exceeded its planning expectations. As of
December 2023, there were 5,845 equivalent residential water connections and 5,567 equivalent
residential wastewater connections. There are approximately 8,300 water and 8,175 wastewater
equivalent residential connections scheduled for addition to the system over the next several years.
The system is nearing its capacity limitations, and without the contemplated expansion will at some
point face a DER-imposed moratorium on new connections.
2. The financing agreement for the project is to be entered into with a party that is financially responsible and
fully capable and willing to fulfill its obligations under the financing agreement, including the obligations to make
payments in the amounts and at the times required; to operate, repair, and maintain at its own expense the project;
and to serve the purposes of the Act and such other responsibilities as may be imposed under the financing
agreement. The application and testimony presented show that:
A. AMUC is not and has not been in default on any previous tax-exempt bond obligation to the
Authority.
B. AMUC presented extensive financial data in its application, including its last five Annual Reports
to the Collier County Water and Wastewater Authority. Responsible officers of AMUC testified
that in view of AMUC's financial condition it would be fully able to meet its obligations under the
bond financing agreements and to maintain AMUC's facilities.
3. Adequate infrastructure is available to enable responsible governmental units to cope satisfactorily with the
impact of the Projects.
A. Ave Maria is a planned community. The project site is on lands within the community designated
and zoned for such use. The project will not create infrastructure burdens that are not accounted
for.
B. A new elementary school in the Ave Maria community is currently under design, with plans to
open in 2026. The expansion project is necessary to permit the connection of the school, which
otherwise would not be permitted to open.
Process and Procedure
Federal tax law requires two approvals for the issuance of private activity bonds. First, the Authority must
hold a public hearing, and must adopt a resolution in favor of issuing the bonds. This was done at the conclusion of
the public hearing on March 19, 2024, as described above. Following this approval, the governing body of the
jurisdiction must also approve the bond issue. This does not have to be a specially advertised hearing but mu st be
done at a regularly noticed and held meeting of the Board. A Resolution for the Board to consider (the "County
Resolution") is attached.
Bonds issued by the Industrial Development Authority are defined in the Internal Revenue Code as private
activity bonds. They are not County bonds and are not debt of the County but are payable solely by revenues
pledged by the financing documents between the Authority and AMUC, and no other revenues of the Authority.
There is no pledge of any taxes, or a pledge of any County or other public revenues. Neither the County, the Board,
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nor any other governmental entity is liable for their payment. Further, both the Authority Resolution and the
proposed County Resolution expressly provide that approval by the Board does not abrogate any County
regulations including land use regulations.
FISCAL IMPACT: As explained above, the issuance of the bonds does not require any contribution from, or
create any payment obligation on, the Board of County Commissioners or any other County agency.
GROWTH MANAGEMENT IMPACT: The adoption of the attached resolution will have no adverse growth
management consequences. The existing AMUC facilities were constructed in accordance with all applicable
County growth management regulations, and are subject to the LDC, the Growth Management Plan, concurrency
requirements, and the payment of impact fees where applicable.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney’s office. Review of these
and similar bonds by the Governing Body is a statutory requirement and serves as a safeguard against the issuance
of inappropriate bonds, which is not the case here. The County has no liability, contingent or otherwise, with
respect to these bonds. With that noted, this item is approved as to form and legality, and requires majority vote for
Board approval. -SAA
RECOMMENDATION: The Board of County Commissioners adopt the attached Resolution.
Prepared by:
Donald A. Pickworth, Counsel
Collier County Industrial Development Authority
ATTACHMENT(S)
1. Resolution - IDA Revenue Bonds Ave Maria Utilities (PDF)
2. BCC Resolution 2005-170 - 2005 Bonds (PDF)
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COLLIER COUNTY
Board of County Commissioners
Item Number: 16.K.4
Doc ID: 28430
Item Summary: Request by the Collier County Industrial Development Authority for approval of a resolution
authorizing the Authority to issue revenue bonds to be used to finance the construction of expansions and
improvements to the central water, wastewater, and reuse systems that serve the Ave Maria Uni versity and Town,
and the refunding of the currently outstanding bonds from the Authority's issuance of bonds in 2005 to fund the
initial construction of the system.
Meeting Date: 04/09/2024
Prepared by:
Title: Legal Assistant – County Attorney's Office
Name: Wanda Rodriguez
03/26/2024 8:30 AM
Submitted by:
Title: County Attorney – County Attorney's Office
Name: Jeffrey A. Klatzkow
03/26/2024 8:30 AM
Approved By:
Review:
County Attorney's Office Sally Ashkar Level 2 Attorney Review Completed 03/26/2024 4:46 PM
Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 03/27/2024 9:17 AM
County Attorney's Office Scott Teach Level 3 County Attorney's Office Review Completed 03/28/2024 9:34 AM
Office of Management and Budget Christopher Johnson OMB Reviewer Completed 04/02/2024 5:10 PM
County Manager's Office Amy Patterson Level 4 County Manager Review Completed 04/03/2024 10:15 AM
Board of County Commissioners Geoffrey Willig Meeting Pending 04/09/2024 9:00 AM
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Packet Pg. 1321 Attachment: Resolution - IDA Revenue Bonds Ave Maria Utilities (28430 : Industrial Development Authority issue revenue bonds - Ave Maria
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Packet Pg. 1334 Attachment: BCC Resolution 2005-170 - 2005 Bonds (28430 : Industrial Development Authority issue revenue bonds - Ave Maria utilities)
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Packet Pg. 1335 Attachment: BCC Resolution 2005-170 - 2005 Bonds (28430 : Industrial Development Authority issue revenue bonds - Ave Maria utilities)