Agenda 09/26/2017 Item #16K2009/26/2017
EXECUTIVE SUMMARY
Recommendation to approve a resolution authorizing the Collier County Industrial Development
Authority to issue bonds for a charter school known as Gulf Coast Charter Academy South.
OBJECTIVE:
To accomplish the necessary approvals to authorize bonds to be issued by the Collier County Industrial
Development Authority (the “Authority”) to be loaned to and used by Gulf Coast Charter Academy
South, Inc., (the “Borrower”), a Florida not-for-profit corporation and the owner and operator of a charter
school known as Gulf Coast Charter Academy South (the “School”) for the purpose of funding the costs
of acquiring and renovating the Facilities currently being leased by the School (the “Project”). The
Facilities consist of approximately 3.52 acres located at 215 Airport Pulling Road North, in the
unincorporated area of Collier County, upon which is located a 40,228 square foot building constructed in
1997 and substantially renovated in 2013 and 2014. The land is currently owned by an unrelated third
party and leased to the Borrower. Upon closing of the bond issue, ownership of the Facilities will be
acquired by the Borrower, and certain HVAC and roof repairs and improvements will be funded. The
zoning permits the use of the land for a school.
CONSIDERATIONS:
The School
The School operates as a public charter school pursuant to a Charter between the Borrower and the
School Board of Collier County, originally granted in 2013 and renewed in 2016 for the period July 1,
2016 through June 30, 2021. The School commenced operations for the 2013-14 school year serving
approximately 323 students in grades K-6. For the 2016-17 school year, the School served approximately
669 students in grades K-8. Management expects the School to achieve stabilized enrollment of
approximately 715 students for the 2019-20 school year.
The documents and testimony presented to the Authority show that the mission of the School is to foster
pride in academic achievement for all students coupled with a concerted effort focused on the English
Language Lerner (“ELL”) population, through an interdisciplinary teaching approach incorporating the
Science, Technology, Engineering, and Mathematics Model (“STEM”). The purpose of the STEM Model
is to promote higher student learning gains and develop the student’s creative ability. Like all public
schools, the School is required to participate in the Florida Standards Assessment testing program.
Schools are assigned a grade based primarily upon student achievement data from the F SA. For the past
three years the School has achieved grades of “B”, “C”, and “B”. In addition, the School presented data
to the Authority showing that the School had been deemed as meeting objectives in the various areas that
were reviewed by School District staff in recommending renewal of the Charter in 2016.
The financing structure
As are all private activity revenue bonds, the bonds are payable by the revenues of the Borrower, and
secured by a mortgage on the facilities. No other revenues of the Authority or any governmental entity
are pledged for the payment, including taxes of any governmental entity. [See language in bold in
Authority Resolution, which is also contained on the Bond itself].
The Bonds will be issued in a maximum principal amount of $10 million and in minimum denominations
of $100,000 and offered for sale only to purchasers who are either Qualified Institutional Buyers or
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Accredited Investors as defined under Federal securities laws.
Authority Findings and Determinations
Chapter 159, Florida Statutes (the “Act”), the statute granting the powers of the Authority, provides that,
prior to entering into any financing agreement, the Authority must determine to its satisfaction that certain
criteria, as discussed below, have been met.
In reaching these determinations, members of the Authority are required to consider relevant information
and exercise prudent business judgment. In their determination Authority members are entitled to rely on
information in the application and the presentation by the representatives of the applicant, input from the
public at any public hearing concerning the application, input from bond counsel and legal counsel to the
Authority, and any other information which the members, in good faith, believe to be relevant and reliable
(collectively, the “Application”). The criteria to be considered, and a discussion of the available
information from the Application with respect to each is 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; or shall serve a public purpose by advancing the economic
prosperity, the public health, or the general welfare of the State;
Discussion: Information relevant to the economic significance of the Project includes the demand for
these facilities in the community. The Application shows a steady enrollment increase and a waiting li st.
The acquisition of the building will have a positive fiscal impact on the community by fixing occupancy
costs through the elimination of rent increases and escalators, thus stabilizing the economic position of the
School. Current employment is 57 full time employees, and 9 part-time. The application projects an
increase of three full time and two part time in the next five years. By legislative declaration, the
provision of educational facilities is deemed to be in the public and economic interest.
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. In determining the financial
responsibility of such party, consideration shall be given to the party’s ratio of current assets to current
liabilities; net worth; earning trends; coverage of all fixed charges; the nature of the industry or activity
involved; its inherent stability; any guarantee of the obligations by some other financially responsible
corporation, firm, or other person; and other factors determinative of the capability of the party,
financially and otherwise, to fulfill its obligations consistently with the purposes of the Act;
Discussion: To support that the Borrower has the financial capability to meet its operational and capital
obligations, the Borrower provided three years of audited financial statements and certain financial
forecasts performed by its financial advisor, Charter Schools Services Corporation of Ft. Lauderdale, and
oral testimony by its entire financial team. This information shows that the Borrower’s income is
sufficient to meet its obligations.
3. The County will be able to cope satisfactorily with the impact of the Project and will be able to
provide, or cause to be provided when needed, the public facilities, including utilities and public services,
that will be necessary for the construction, operation, repair, and maintenance of the project at the
expense of the party for whom the project is financed and for the payment of the principal of and interest
on the bonds;
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Discussion: The Project is located within the urban area on Airport Road. The Project and the area
surrounding it is served by the existing County water and sewer utilities, and existing public roadways.
All essential public services (electricity, cable, EMS, fire protection, educational facilities, etc.) have been
constructed within the area of the Project.
The hearing and consideration process
The Internal Revenue Code requires two approvals for the issuance of the Bonds. First, the Authority
must hold a public hearing, and must adopt a resolution in favor of issuing the Bonds. 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 must be done at a regularly noticed and held meeting.
In this case, the Authority held two public hearings. The first, known as the TEFRA hearing, was held
June 21, 2017. The hearing was advertised more than 14 days before the hearing, as required by the IRC
(the “TEFRA Notice”). No members of the public appeared at the hearing or submitted comments prior to
the hearing. At the conclusion of the hearing the Authority deferred further action pending consideration
of additional information requested by members of the Authority. Following receipt, the Authority
scheduled a second hearing, to be held August 2, 2017. This hearing did not require the IRC mandated 14
day notice, but it required, and had, the 7 day advertising required by Chapter 159. Again, no members of
the public appeared or commented.
At the conclusion of the August 2 hearing the Authority made a series of findings as described above,
determined to proceed with the financing, and adopted a resolution evidencing such approval (the
“Authority Resolution”). The TEFRA Notice published in the Naples Daily News is attached to the
Authority Resolution as Exhibit A.
As noted above, the governing body of the jurisdiction must also approve the bond issue. A resolution for
Board consideration is attached. As are all revenue bonds or notes of this type, these bonds are based on
revenues of the project and are not obligations of the County. There is no pledge of any taxes, nor a
pledge of any revenues except the revenues of the School. Neither the County, the Board, the Authority,
nor any officer of the County is liable for their payment. Further, the Resolution expressly provides that
this approval by the Board does not abrogate any County regulations, including land use regulations.
Bonds of this type, termed “conduit debt” are not part of the County’s debt portfolio.
FISCAL IMPACT: Like all private activity bond issues, the issuance of the propose d bonds or the
construction of the Project does not require any contribution from the Board of County Commissioners or
any other County agency. On the other hand, the construction of these facilities has a positive fiscal
impact on the community by creating additional employment and local expenditures and providing
additional educational resources in this community.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to
form and legality, and requires majority vote for Board approval. -JAK
GROWTH MANAGEMENT IMPACT: The adoption of the attached resolution will have no adverse
growth management consequences. The facilities were constructed in accordance with all County growth
management regulations applicable at the time of construction.
RECOMMENDATION: The Board of County Commissioners adopt the attached Resolution.
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Prepared by: Donald A. Pickworth, Counsel
Collier County Industrial Development Authority
ATTACHMENT(S)
1. Resolution(1) (PDF)
2. Authority Resolution (PDF)
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COLLIER COUNTY
Board of County Commissioners
Item Number: 16.K.20
Doc ID: 3739
Item Summary: Recommendation to approve a resolution authorizing the Collier County
Industrial Development Authority to issue bonds for a charter school known as Gulf Co ast Charter
Academy South.
Meeting Date: 09/26/2017
Prepared by:
Title: Legal Assistant/Paralegal – County Attorney's Office
Name: Virginia Neet
09/05/2017 1:00 PM
Submitted by:
Title: County Attorney – County Attorney's Office
Name: Jeffrey A. Klatzkow
09/05/2017 1:00 PM
Approved By:
Review:
Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 09/05/2017 1:10 PM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 09/05/2017 1:11 PM
Budget and Management Office Mark Isackson Additional Reviewer Completed 09/05/2017 1:59 PM
County Manager's Office Nick Casalanguida Level 4 County Manager Review Completed 09/05/2017 3:11 PM
Board of County Commissioners Michael Cox Meeting Completed 09/12/2017 9:00 AM
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