BCC Minutes 01/28/1987 S
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Naples, Florida, January 28, 1987
LET IT BE REMEMB~1EO, that the Board of County Commissioners in
and for the County of C~llicr, and also acting as the Board of Zoning
Appeals and as the governing board(s) of such special districts as
have been created according to law and having conducted business
herein; ~~t on thtø ðate at 11:00 A.M. in SPECIAL SESSION in Building
"F" of the Courthouse Complex, East Naples, Florida, with the
following members present:
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CHAIRMAN: Max A. Hasse, Jr.
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VICE-CHAnV.\N: Arnold Lee Glus
(Absent)
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pc,: John A~ Pistor-
Bur~ L. Saunders
Anne Goodnight
ALSO PRESENT: James C. Giles, Clerk! Maureen Kenyon, Deputy
Clerk: Donald B. Lusk, County Manager! Ken Cuyler, County Attorney; ,
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Bruce Anderson, Assistant County Attorney! Tom Crandall, Utilities
Administrator: and Mike McNees, Utilities Administration Director.
AGENDA
Authorization for Conversion of $11.9 million
from the $76.6 million bond pool money.
PINANCIAL ADVISORS AUTHORIZED TO DRAW DOWN $11.9 MILLION WITHIN 30
DAYS FROM THB $76.6 MILLION BOND POOL MONEY
Mike McNees, Utilities Administration Director, stated that as
part of the $76.6 million bond pool, specific projects were defined
and from the first draw of $11.9 million, $5.2 million is being funded
and $2.6 is the final payment on the East Naples Utility acquisition
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January 28, 1987
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and the other $2.6 mil1.¡~n 'is'the repàyment of reserve funds that was
used to make the first çlyment. He stated that $1.29 million is needed
for. the reimbursement of reserve funds that was used to purchase the
Lely Utility, $400,000 for the design of the North Naples water main,
$l,190,OOO for the design of the South Sewer Treatment System, and
$2,120,000 to be contributed toward the construction of the South
Regional Water treatment plant expansion and the remainder of that
would be funded from capital reserves or system development lees. He
stated that this makes a total of $10.6 ~i11ion which will be the
total usable funds from the first draw.
Mr. Dave Fischer of Sun Trust Securities stated that last Aug~st,
$76.6 million was banked and approximately $55 million of that was
earmarked for the Utility Department. He stated that the earmarked
money can be brought out at various times because it is invested to
earn the County money, adding that there is actually $!~.6 million
that can be brought OUt at any time, which is in a variable rate and
is available every first of the month. He stated that the bondholders
have to be given notification that it will be converted into project
bonds or fixed rate bonds. He stated that if the Board wants to
proceed with the first $11.6 million, he needs approval in order to
notify the bondholders on the first of the month in order to get the
money on March l, 1987. He stated that in order to accomplish this
drawdown, they are on a fast track as there is only about 20 days left
to do this. He stated that there has been ð problem due to the time
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January 28, 1987
involved in getting the engineers full report up to date and in
getting the rating agencies to come to Collier County, but it will not
effect the County. He slated that this bond pool will have to be
insured in order to get the Triple "A" rating to get the good interest
rate. He stated that if the bonds went to market this date, the
interest would be about 6-3/4\ which is the lowest interest rates he
has seen in the last ten years. He stated that legal action is needed
in order to notify the bondholders that have the variable rate bonds
that they have ~n option to convert th~ bonds on March 4, adding that
it takes 30 days to do this. He not~d that after this issue, every
quarter starting April 1, approximately $5 milliòn ~omes up for review
to see if the County wants to bring it O..t of the variable rate into a
fixed rate for project bonds. He noted that as far as the August bond
issue was concerhed, the idea was to make money on the arbitrage
opportunities or low rate floating bonds and money is being made at a
minimum of $91,000 a month, which means that the cost of the $76.6
million issue will have paid for itself in May, 1987, and after that
it will be money earn~d. He noted that as this pool is drawn down, it
will earn less, but there will still be a lot of money made before it
is completely drawn down. He stated that he is recommending that the
Board move forward on this issue in order to,get the fixed rate that
is.nowavailable.
In answer to Commissioner Pistor. as to why $11.6 is being drawn
ðown,if only $10.6 is being spent, Mr. Fischer stated that a minimum
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January 28, 1987
of about $l million will have·to,be set aside in the reserve fund.
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Commissioner Saunders questioned who will be handling the
.underwriting aspect, to which Mr. Fisc\'· . stated that the original
underwriters are Smith Barney and they are also project conversion
underwriters.
Commissioner Saunders questioned if bond counsel should be pre-
sent, to which Mr. Fischer stated that it is not necessary to have Mr.
Giblin here.
Mr. Fischer stated all that is needed is legal language approving
the conversion of the $11.6 million into a fixed rate and notifying
the bondholders the first of next week.
County Manager Lusk stated that the action is only to notify the
bondholders that the County is getting ready to proceed with the
$11.6 million drawdown.
1~~Clerk Giles questioned if the County will receive all the earnings
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after expenses are paid or does it depend on how much is drawn down,
to which Mr. Fischer stated that once the issue is paid for, which
will be about May, there will probably be a surplus account and after
that money will flow to the County monthly.
Clerk Giles questioned if the County is entitled to the full
amount of the interest if the full amount of the bond proceeds are not
used, to which Mr. Fischer replied affirmatively, adding that the
intent was there. Mr. Fischer p~ated that there is a percentage that
can be left and still earn all the interest.
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January 28, 1987
County Attorney Cu~ler ßtated that he spoke with Mr. Giblin and
there was no reason for him to be at this meeting and questioned if
something had come up?
Mr. Fischer stat~d that the question is the language that is
needed in order to have Mr. Giblin draw up the necessary resolution
notifying the registrar to notify the bondholders about converting the
money, adding that Mr. Giblin indicated to him that all it would take
would be the intent of the Commission t· ~o this.
count~,Attorney Cuyler stated that this is the·same thing that Mr.
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Giblin~Jn~icated tó him on the telephone and it would be a period of
30-4Sþavs but the County needed to get started.
c~issroner Saunders stated that A. G. Edwards is not involved as
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an und~{~Jlter i~·this issue, but n. G. Edwards br6kers maý be
'inv~lved~~~6:thesalè.of bonds that comes from this conversion and
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questioned if this would constitute a conflict of interest on his
part? .Mr. Cuyler stated that he does not feel that this would consti-
tute a conflict of interest.
Mr. Cuyler stated that what is needeð~>:.!~~å\Jthor$,za:~i~~rfð~'ih~"
financial advisors and bond counsel to proceed and take whatever steps
are necessary to notify the bondholders of the $ll.6 conversion and
come back to the Board in 30 days.
Commissioner Pistor moveð, seconðeð by Commissioner Saunðers and
carried 4/0, (Commissioner Glass not present), that the Bo_rd
authorize the tinancial advisors and bond counsel to notity the
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January 28, 1987
bondholders of the intent to draw down $11.6 million of the
$76,600,000 Colli.r County, Florida, capital Improvement Program
Revenue Bonds, Series 1986, within 30 days.
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There boing no further business, t. ''9' meeting was adj ourned by
Order of the Chair - Time:
11: 25 A.M.
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ATTEST:
~AMES C~' GILES~ CLERK
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BOARD OF COUNTY COMMISSIONERS/
BOARD OF ZONING APPEALS/EX
OFFICIO GOVERNING BOARD(S) OF
SPECIAL DISTRICTS UNDER ITS
'CONTROL .
~t2.çjh~
MAX A. HASSE, JR., CH~IRMAN
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