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F' MAR 2 1983 TO: The Honorable Members of DATE: February 28, 1983 the Board of County Commissioners FILE: SUBJECT: BEACH ACQUISITION FINANCING - Requested to be added to the March 2nd Agenda FROM: rich e fight REFERENCES: County ministrator The Finance Advisory Committee voted unanimously Friday to recommend a five year financing period for the recently approved $5 million beach acquisition bond issue. ,.Barring major compli- cations, a marketing period in late March can be anticipated. The Committee's recommendation was based primarily on the below detailed data: Payback Period 3 years 5 years 10 years`, 20 years Annual Debt Service $1,840,000 $1,176,000 $720,000 $540,000 Aggregate Anticipated Interest Rate 5.080 5.66% 7.27% 8.947% 1983 Millage .80 mills .51 mills .313 mills .234 mills A county wide assessment of one mill will yield: slightly more than $2.3 million. It is anticipated that the necessary millage to be levied in subsequent years will decrease as the property values increase. Financial consultant Worth Blackwell of W.R. Hough, Inc., based his analysis on an A -rated or better issue. It is antici- pated that a lower rated issue would increase the interest amount one-half of one per cent, or $20,000 in annual debt service. As it stands now, Blackwell estimated the bonds to be rated Baa -1, or a notch below the desired A rating. The recently issued Indian River County School Board bonds were rated Baa -1 by Moody's and A minus by Standard and Poors. The School'Board subsequently insured the bonds. There are two basic ways to improve the County's bond rating. The first method, which will guarantee a AAA rating, is to insure the bonds at a cost of between $35,000 and $40,000. In today's market, a AAA rating is fractionally better than an A rating. The second method, which is not guaranteed, would necessitate bringing representatives of the two rating agencies to Indian River County and literally sell them on improving the County's rating. This would cost air travel and overnight expenses for two representatives from each agency. Also it probably would be neces- sary to rent a small airplane for an aerial tour of the County. The Finance Committee encouraged the Commission to take this approach. It requires risking a couple of thousand dollars against saving the $35,000 plus insurance fee. Also, an'A-rating should positively effect the upcoming bond issues for the sub -aqueous water crossing and jail improvements. If you wish additional information, please contact me at your convenience. 57