05/19/2020 (3) - Laserfiche WebLink

Home Browse Search

Departmental Matters Indian River County Inter -Office Memorandum Office of Management and Budget TO: Members of the Board of County Commissioners DATE: May 12, 2020 SUBJECT: Limited (Land Acquisition) G.O. Refunding Note, Series 2015 Consideration of Early Payoff FROM: Kristin Daniels Director, Management & Budget Background On November 2, 2004, the voters of Indian River County approved a referendum authorizing a $50 million bond issue for the purchase of environmental, agricultural and historic properties. On May 23, 2006, the Board of Commissioners approved and adopted the Award and Sale (Resolution #2006-067) for the Indian River County, Florida, Limited General Obligation Bonds — Series 2006 in an aggregate principal amount not to exceed $50,000,000. This bond issue reaches final maturity on July 1, 2021, and the bonds became callable beginning on July 1, 2016. On April 7, 2015, the Board of County Commissioners approved a partial refunding of the Series 2006 Land Acquisition Bonds. The partial refunding was accomplished through the issuance of the $20,369,000 Limited General Obligation Refunding Note, Series 2015. The refunding resulted in debt service savings of $1,356,323 and a net present value (NPV) savings of $1,184,814. Early redemption of the Series 2015 Note is available any January or July 1, and the final original maturity date of July 1, 2021 remains unchanged. Analysis Staff has prepared an analysis regarding the payoff of the remaining principal outstanding during the current fiscal year. The note may be redeemed July 1, 2020, with no redemption fee. Of the $7,268,000 currently outstanding, $4,298,000 reaches maturity on July 1, 2020. This payment is already included in the current year budget. After the July 1, 2020 payment, a balance of $2,970,000 will remain. The debt service payments are supported by a millage rate levied by the Board of County Commissioners on all taxable property within the County. For the current fiscal year, this millage rate is 0.2568. Staff has evaluated using a combination of existing Land Acquisition Bond (note) Fund Balance with the shortfall provided by the General Fund to pay off the remaining amount outstanding. If these bonds are paid off, then the need to levy this millage is eliminated. This would provide a savings for all taxpayers of the County, which could be especially beneficial at this time considering the financial hardship some of our residents may be facing due to COVID19. Currently, reserves are available to retire this debt. The Government Finance Officers Association (GFOA) best practices include early retirement of debt as an appropriate use of fund balance. This use of fund balance is preferred to the use of fund balance to fund ongoing operations, which is not recommended. Additionally, a one-time 116