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Interest Remaining <br />Principal Discount Rate <br />Principal Rate <br />$ 402,500 <br />236,000 <br />5,825,900 <br />2,750,700 <br />450,000 <br />9,200,000 <br />$18,865,100 <br />5% <br />0 <br />5% <br />5% <br />0 <br />5% <br />7.3375% <br />5% <br />0 <br />$ 366,500 <br />221,000 <br />5,592,000 <br />2,698,000 <br />450,000 <br />9,200.000 <br />$18,527,500 <br />.66130 <br />.65087 <br />.64133 <br />.63262 <br />.82600 <br />.61739 <br />Payoff <br />$ 242,366.45 <br />143,842.27 <br />3,586,317.36 <br />1,706,808.76 <br />371,700.00 <br />5,679,988.00 <br />$11,731,022.84 <br />Farmer's Home Administration recently announced that they are <br />offering a discount purchase program in order to reduce federal <br />loans. Because most of Indian River County debt is 5% over forty <br />(40) years, the discount offered means a considerable reduction in <br />the principal @amount of debt outstanding. The overall annual debt <br />service will remain about the same if we participate in the discount <br />program; however, we would be released from some of the Farmer's Home <br />Administration restrictions which in the future could discourage or <br />hamper the expansion of the Utility system. An additional plus is <br />that the refinancing would improve several of our financial ratios <br />(e.g. debt/asset, debt/# customers, debt/per capita, debt/equity). <br />Staff has reviewed the merits of refinancing the debt and feels that <br />it will definitely be in the county's best interest and will be <br />approved by the Financial Advisory committee at it's next meeting. <br />There is a deadline of May 9, 1989 if the county wishes to <br />participate. Staff must begin working with Farmer's Home <br />Administration, Bond Counsel, Bond Insurer's, Financial Advisers and <br />rating agencies to draft bond documents. This takes considerable <br />time; therefore, we need permission to proceed immediately. <br />RECOMMENDATION <br />Board of County Commissioners give staff authority to participate in <br />the Farmer's Home Administration loan program and proceed in <br />refinancing the debt. <br />Attorney Vitunac advised that last month the Board approved <br />the refinancing of certain loans held by the FmHA, and today we <br />are asking the Board to pass the refunding resolution which will <br />remove certain restrictive covenants. It will delete 3 items <br />presently covered by the pledge to the FmHA that have caused the <br />Utilities Department great problems. We are asking the FmHA to <br />release special assessments, impact fees, and surcharges, which <br />are the mechanisms by which Utilities has been using to purchase <br />several small utility systems throughout the county. We are <br />going to run up against a brick wall in 3 years unless the FmHA <br />releases our pledge of those revenues. If this resolution passes <br />FEB 4i9q <br />63 <br />BOOK 76 Pk1E 134 <br />