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BCC Minutes 09/11/1986 S Naples, Florida, September 11, 1986 LET IT'~E REMEMBERED, that the Board of County Commissioners in and for the County of Collier, and also acting as the Board of Zoning Appeals and as the governing board(s) of such special districts as have been èreated according to law and having conducted business herein, met on this date at 10:00 A.M. in SPECIAL SESSION in Building "F" of the Courthouse Complex. East Naples, Florida, with the following members present: CHAIRMAN: John A. Pistor VICE-CHAIRMAN: Anne Goodnight Frederick J. Voss Max A. Hasse C. C. "Red" Holland ALSO PRESENT: James C. Giles, Clerk; Maureen Kenyon, Deputy Clerk; Donald B. Lusk. County Manager; Neil Dorrill, Assistant County Manager: Ken Cuyler. County Attorney; Tom Olliff, Administrative Assistant to the County Manager; Nancy Israelson, Administrative Assistant to the Board; and Deputy Chief Ray Barnett, Sheriff's Department. AGENDA Request for approval of Resolution authorizing issuance of Capital Improvement Revenue Refunding Bonds, Series 1985. Tape #1 RESOLUTION 86-163 AUTHORIZING ISSUANCE OF NOT EXCEEDING $29,62ð,OOO IN CAPITAL IMPROVEMENT REVENUE REFUNDING BONDS, SERIES 198ð, TO FINANCE THE COST OF REFUNDING CERTAIN OUTSTANDING OBLIGATIONS or THE COUNTY - ADOPTED Mr. Dave Fischer. Financial Advisor, stated that this meeting is for the purpose of looking at refunding capital improvement bonds. He Page 1 m~ 097 p~:,( 87 ""__.___"",,",,.,,,,..,,,,_,,,,;..>.'·~~N,"W'·'··>' · &DOK 097 w.£ 88 September II, 1986 noted that this issue was set up quite some time ago, but the market was not right. He indicated that on September 8. 1986, the window became available where he accomplished all the goals and decided it was a good idea to go into the market and refund the bonds. He referred to a handout which compared Collier County's issue with other issues that have sold recently, adding that the best comparison was Pinellas County Sports Authority. who sold $85 million with a Triple "A" rating. He noted that Collier County still did better than Pinellas County. indicating that Pinellas started with a yield of 5.25' and went out to a 7.375'. He noted that Collier County's goals were not accomplished by the interest as much as they were by the investment agreem~nts with the Treasuries. He stated that PaineWebber had proposed an annual average savings of $112,000, which is actually coming out to about $124,000. with the proposed savings being $2.8 million and the actual savings coming out at $3.1 million and the pro- posed present value savings of $1.2 million coming to actual present value savings of $1.377,000. He stated that all goals were achieved, and then some. He stated that with regard to the underwriters, the management fee was $1.00 per $1.000; expenses were $32,887: and average takedown was $12.90, which was very favorable. He indicated that the issuance costs are also in line with what was originally estimated and the issue achieved better results than they expected. He noted that there are two other issues that he~is prepared to refund, one being the General Obligation issue and the other is the Page 2 - - .. September 11, 1986 Gas Tax issue. He stated that the Gas Tax issue does not have favorable investments at this time and the General Obligation still needs the insurance from Amback and he should hear from them by the end of the week. adding that if it is favorable next week for the GO issue, he will be back to the Board of County Commissioners to look at that issue. Commissioner Pistor questioned if the interest in the escrow account is going to cover the interest on this issue, to which Mr. Fischer stated that the investment program will carry the issue. Commissioner Pi8tor questioned if the County will still be able to finan=e at the interest rate that this issue was at with the same amount of debt service on the issue that i. being refunded, to which Mr. Fischer stated that this issue really refunds the total last issue, but it can not retire it until the call date, adding that in a sense the other issue is retired and the new issue will be supported by the revenues which is where the $120,000 per savings was obtained from. which allows him to add $1.4 million more in bonds to the new issue, which will provide the County with bricks and mortar money for the expansion of the Criminal Justice Complex of $1.247 million. Commissioner Pistor stated that the agreement has two underwriters and questioned if this was a mutual agreement? Mr. Fischer stated that at the time of the proposals. it was recommended that PaineWebber and Smith Barney be retained as the investment bankers as a team. County Manager Lusk stated that this was recommended by the Finance Committee to be a joint venture because of the cost. &DDK 097 PAGE 89 Page 3 r t . am 097 Plr,r gO September 11, 1986 Commissioner Voss questioned if the insurance costs are part of the $117,200, to which Mr. Fischer indicated that the insurance will be an addition to that but it is embedded in the issue because there was already insurance on the old issue and that crossover to the new issue had a rebate. In answer to Commissioner Pistor, Mr. Fischer stated that the new money is $1.4 million, but a certain amount has to be held for the reserve account and, therefore, the actual amount to build the building is $1,247,000. f" Clerk Giles questioned how the yield ~s restricted on the new money, to which Mr. Fischer indicated that no new money can be made on it. Clerk Giles stated that he would have to set this money up in a separate account and watch the interest rate carefully. Mr. Fischer stated that if there is any money made on this, it ~ will have to be rebated back to the Government. Mr. Lusk stated that there is some money from the old bonds in the bank now and questioned if that will be treated like new money? Mr. Mark Mustian with Nabors, Giblin, Steffens, and Nickerson, stated that the answer to this question is not really clear under the new Tax Act, adding that there is some concern that once the previous issue is refunded, that the three year benefit can no longer be used. He stated that this question will probably not be answered for about three weeks until the actual bill comes out, adding that the County should not plan on being able to arbitrage the money. Page 4 - - - 1'-~_"_";,,,__,",,-,,,,,,,,,_"_",,,,,.,,,,,,,,_,,,,,",,.;._._,,,...._,,,,,,, September 11, 1986 Mr. John Muse of PaineWebber stated that he was very pleased with the acceptance of the County's name in the market and very happy with the results of the financing. He stated that what is being done this date is an offer to purchase $31,375,000 of Collier County Capital Improvement Revenue Refunding Bonds for a total price of $30,725,464. He stated that this equates to a spread of about $14.93 and they are able to deliver a financing as predicted with the $1.00 management fee and expenses as previously presented. He stated that he was pleased with the spread component which is associated with the takedown. He stated the County is able to recoup the cost of insurance, $282,000, which is embedded in the price of the bonds and is recouped through the yield and the escrow. In answer to Commissioner Pistor. Mr. Muse stated that $72 million is the old debt service, adding that debt service i~ being refunded for $69 million. He stated that the difference between these two figures is $3 million which is the gross savings that this delivers to the County and on an average annual basis, it is appro~imately $120,000. Clerk Giles stated that one of the schedules that has been pre- sented shows the old debt service and the new debt service, adding that if nothing was done with the issue, there would be an interest payment of $1,190,000 under the old issue, but what is being proposed today the interest payment would $1,237,000, which is a semi~annual payment, adding that what has been worked out is the average of the years and it works out to about the same debt service. &DOK 097 W.[ 91 Page 5 --'-"""'.'''''<'''-'._~~'"''_.'''-'-'-'''~._.'''--~-~- aDOl: 097 PAGr 92 September 11, 1986 Mr. Mustian stated that the documents that need approval is the resolution which authorizes the issuance of the bonds and awards the bonds to PaineWebber and Smith Barney pursuant to the Purchase Contract, it also appoints a Registrar, a Paying Agent, and Escrow Agent for the financing and approves the Otficial Statement. He stated that Exhibit "A" to the Resolution is the Underwriters Disclo- sure Letter as required by State law, Exhibit "B" is the Bond Purchase Agreement, Exhibit "C" is a form of the! Escrow Deposit Agreement and Exhibit "cot is a form of the Official Statement that will be distri- buted with respect to this issue. Commissioner Voss moved, seconded by Commissioner Goodnight and carried unanimously, that Resolution 86-163 authorizing the issuance of not exceeding $29,625,000 in Capital Improvement Revenue Refunding / Bonds, Series 1985, to finance the cost of refunding certain oJtstanding obligations of the County be adopted. "See Pages qJ..l"'ó{;J.~ "1, ... Page 6 - .. - September 11, 1~86 There being no further business for the Good of the County, the meeting was adjourned by Order of the Chair - Time: 10:35 A.M. BOARD OF COUNTY COMMISSIONERS/ BOARD OF ZONING APPEALS/EX OFFICIO GOVERNING BOARD(S) OF SPECIAL DISTRICTS UNDER ITS CONTROL " ......" ATTE~cz:'r~'\\ü;¡ ¿".... JA':'!X~ ·~:.,~:E~ii!!~...: ::LERK ~;.ç.<~~£Jc \. 'r~~se .m.i~t1-t !"tI· aP.P1"oved by the Board on ¿¿;!~~ /~/?/.6 as ·p.te,e.e~.t;~.4:.:···,....-- or as corrected >'''''l' (j £1;¡ PISTOR! CHAIRMAN ðDüK 097 p~(.[ 93' Page 7 "'~'^"'""""""""""""""""'"""..'" .._........'_...·.._ov·~.._.__..,.._"'"""_..._______··..._