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GOLF COURSE FINANCING <br />eooK 63 - P,.n.185 <br />The Board reviewed the following memo dated 1/3/86: <br />TO: Honorable Board of County ®ATE: January 3, 1986 FILE: <br />Commissioners <br />THROUGH: Michael WriJisator <br />County Admi <br />FROM:l <br />Joseph" A. Baird <br />OMB Director <br />SUBJECT: Golf Course Financing <br />REFERENCES: Letters: Southeast Bank <br />Barnett Bank <br />M.G. Lewis, on Indian River County's behalf, mailed proposals to eight <br />financial institutions to finance the $2.1 million Sandridge Golf Course. <br />Of the eight institutions, only the Barnett Bank and Southeast Bank replied. <br />The banks gave similar proposals quoting variable rates and no fixed rate. <br />The best offer was from the Barnett Bank which was 64% of prime adjusted <br />on a monthly basis. At today's prime rate of 92%, this would mean a rate of <br />6.08% for the month of January. <br />The Southeast Bank's offer was 65% of prime which would adjust daily. <br />At a prime rate of 92%, this would mean 6.18% rate. <br />Neither bank gave a cap on the adjustable rate, therefore, the only <br />limitation would be the statutory requirement. Both banks proposals con- <br />tained gross up provisions to hedge against any tax law change. <br />After evaluating the proposals, everyone involved felt there was very <br />little advantage in the temporary financing because of the terms and con- <br />ditions offered. At present, 30 year bonds can be issued at between 8 3/4% <br />and 9%. By going long-term, we could lock in a rate and forego the issuance <br />costs involved with temporary financing. <br />RECOMMENDATION <br />The Honorable Board of County Commissioners not accept the two offers <br />submitted for temporary financing and authorize staff to proceed with ob- <br />taining long-term financing of the Sandridge Golf Course. <br />52 <br />