Agenda 03/24/2009 Item #16F 7
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EXECUTIVE SUMMARY
Recommendation to authorize cash amounts to be allocated on March 31, 2009 for the
parity Debt Service Reserve Account associated with the County's Capital Improvement
Reveuue Bonds (Series 2002/2003/2005) in an amount not exceeding $8,026,972
OBJECTIVE: That the Board of County Commissioners authorize certain monies to be
allocated to a Debt Service Reserve Account in order to remain in compliance with applicable
bond covenants.
CONSIDERATIONS: On April 30, 1985, the Board of County Commissioners (the
"Board") of Collier County, Florida (the "Issuer") duly adopted Resolution No. 85-107 (as
amended and supplemented, the "Bond Resolution"), authorizing, among other things, the
issuance of Capital Improvement Revenue Bonds from time to time. On July 28, 1992, the
Board duly adopted Resolution No. 92-399 (the "Supplemental Resolution"), supplementing
the Bond Resolution and authorizing the issuance of the Issuer's Collicr County, Florida
Capital Improvement Revenue Refunding Bonds, Series 1992. Section 19(D)(4) of the Bond
Resolution permits the Issuer, in lieu of making certain required deposits into the Reserve
Account created there under, to cause to be deposited into such Reserve Account a Reserve
Account Insurance Policy to meet the Reserve Account Requirement.
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Section l3(E) of the Supplemental Resolution supplements Section 19(D) (4) of the Bond
Resolution and requires the Issuer to cash fund the Reserve Account over time or replace a
Reserve Account Insurance Policy in the event that the claims-paying ability rating of the
Insurer for such Reserve Account Insurance Policy falls below "AAA" by Standard & Poor's
Corporation or "Aaa" by Moody's Investors Service.
Based on the Debt Service Reserve Requirement and the dramatic deterioration of the bond
insurer's credit ratings, thc County is obligated to allocate approximately $8.026 million for
the parity Reserve Account by March 31, 2009. That amount will satisfy the requirement for
the Series 2002 Bonds, and approximately three-quarters of the 2003 and 2005 Bonds. The
additional funding requirement related to the 2003 and 2005 Bonds will be funded at a later
date, if necessary. The monies to be allocated are currently hcld as undesignated fund
balances of the Collier County WaterlSewer District Capital and Solid Waste Landfill Closure
accounts. The investment of those monies will not be altered by this action.
While this funding requirement is necessary at this time in order to remain in compliance with
the applicable bond covenants, the Finance Department is simultaneously working with its
Bond Counsel, Financial Advisor, and the Bond Insurers to attempt to amend the bond
covenants in order to alleviate or eliminate the funding requirements.
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FISCAL IMPACT: The County wiil still maintain the accounts and all interest earnings
accrued in such accounts. Therefore, there will be no direct fiscal impact as a result of
designating these monies for the parity Reserve Account. However, if the County were to
default on any debt service payment related to the Capital lm!,TOvement Bonds, bondholders
would have a senior claim on the designated monies, and would be within their rights to seek
debt service payment from the amounts on deposit in the Reserve Account. An event of
default is considered highly unlikely.
GROWTH MAJ"'AGEMENT IMPACT: There IS no Growth Management Impact
associated with this Executive Summary.
RECOMMENDATION: That the Board authorize certain monies to be allocated to the Debt
Service Reserve Account in order to comply with thc bond covenants for the Capital
Improvement Revenue Bonds.
Prepared by: John A. Yonkosky, Director, Office of Management and Budget
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Item r'~o. 1':'3:=7
r\'1a,,~h 24, 2009
Page 3 of 3
COLLIER COUNTY
BOARD OF COUNTY COMr~lSSlor~ERS
Item Number:
16F7
Item Summary:
Recommendation to adopt a resolution authorizing cash amounts to be allocated on March
31,2009 for the par-ity Debt Service Reserve Account associated with the Countys Capital
Improvement Revenue Bonds (Series 2002/2003/2005) in an amount not exceeding
58.026.972
3/24/20099.0000 AM
Meeting Date:
A pproved By
John A. Yonkosky
Director of the Office of Management
Date
County Manager's Office
Office of Management & Budget
3118120098,20 AM
Approved By
OMS Coordinator
OMS Coordinator
Date
County Manager's Office
Office of Management 8. Bung;:t
3i1S:2009 9: 1 5 AM
Approved By
James V. Mudd
County Manager
Cate
Board of County
Commfssioners
County r\o:'anag~r's Office
3/i8!2QP9 4:11 PM