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REQUEST FOR AUTHORIZATION FOR BOARD TO EXECUTE PURCHASE AGREEMENT <br />AND AWARD OF NOTES FOR PURCHASE OF NORTH BEACH WATER COMPANY <br />Attorney Vitunac gave a brief recount of the events leading <br />up to today's request for authorization to award bond <br />anticipation notes to fund the purchase of North Beach Water <br />Company. On August 1, 1988, the County purchased the North Beach <br />Water Company for $3.1 million with cash on hand from the <br />Utilities Department. On November 8, 1988, the County passed <br />Resolution 88-120, authorizing the sale of bond anticipation <br />notes to borrow from the financial community the $3.1 million and <br />give it back to Utilities Dept. The sate of the notes took place <br />yesterday and consultants are here today to explain the outcome. <br />Before the Board today is a resolution authorizing the Chairman <br />to execute the Note Purchase Agreement by which we enter into an <br />agreement with the underwriters. There are 3 attachments to the <br />resolution which the Board does not have before them: Exhibit A, <br />a 20 -page Note Purchase Agreement; Exhibit B, a 30 -page <br />Preliminary Official Statement dated 11/28/88; and Exhibit C, a <br />4 -page comfort letter from Prescott, Bali & Turben, Inc. (PBT). <br />Financial adviser Art Diamond explained that we went to bond <br />anticipation notes because of a shift in position by the FmHA <br />with regard to their lien on the revenues of the water and sewer <br />system. PBT proposed going to bond anticipation notes, the <br />security for which is simply a pledge of a future permanent bond <br />issue rather than revenues of the system. He reported that $3.9 <br />million worth of anticipation notes were sold on the New York <br />bond market yesterday. Despite the competition from another bond <br />issue of up to $125 million from South Carolina, Indian River <br />County came out with a percentage rate of 6-7/8. <br />Art Ziev of Prescott, Bali & Turben (PBT), the underwriters <br />who handled the sale of the bonds, explained that his firm bought <br />a majority of the bonds on the first day the issue was available <br />in the market. As a result of last minute negotiations, the <br />NOV 2 9 1988 <br />2 BOOF <br />`� F.48 <br />