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HomeMy WebLinkAbout3/12/1980-WEDNESDAY, MARCH 1.2, 19RO THE BOARD OF COUNTY COMMISSIONERS OF INDIAN FIVER COUNTY, FLORIDA, MET IN SPECIAL SESSION AT THE COURTHOUSE, VERO REACH, FLORIDA, ON WEDNESDAY, MARCH 12, 1980, AT 10:00 O'CLOCK A.M. PRESENT WERE WILLARD W. SIEBERT, JR., CHAIRMAN: ALMA LEE Loy, VICE CHAIRMAN: WILLIAM C. WODTKE, JR.: R. DON DEESON: AND PATRICK R. LYONS. ALSO PRESENT WERE NEIL NELSON, ASSISTANT COUNTY ADMINISTRATOR: L. S. "TOMMY" THOMAS, INTERGOVERNMENTAL COORDINATOR; GEORGE G. COLLINS, SJR., ATTORNEY TO THE BOARD OF COUNTY COMMISSIONERS: .JEFFREY BARTON, FINANCE OFFICER: AND VIRGINIA HARGREAVES, DEPUTY CLERK, THE CHAIRMAN CALLED THE SPECIAL MEETING TO ORDER AND ANNOUNCED THAT THE FIRST ITEM ON THE AGENDA OF THIS SPECIAL MEETING WAS A DISCUSSION IN REGARD TO THE FINANCING OF THE COUNTY ADMINIS- TRATION BUILDING. INTERGOVERNMENTAL COORDINATOR THOMAS REQUESTED GEORGE BLAND OF WILLIAM R. HOUGH & CO. TO EXPLAIN THEIR PROPOSAL FOR THE FINANCING OF THIS PROJECT. MR. BLAND INTRODUCED WILLIAM HOUGH, PRESIDENT OF WILLIAM R. HOUGH & CO., ARNOLD SCHNEIDER AND MR. WECHTER, A NEW MEMBER OF THEIR ORGANIZATION. MR. BLAND INFORMED THE BOARD THAT WHEN MR. SCHNEIDER WAS HERE TWO WEEKS AGO, THEY NEEDED ADDITIONAL INFORMATION FOR THE OFFICIAL DISCLOSURE STATEMENT, AND THEY NOW HAVE ALL THEY NEED AT THIS PARTICULAR JUNCTURE. MR. BLAND THEN REVIEWED SOME OF THE FINANCIAL NUMBERS AND SITUATIONS EXISTING IN THE UNITED STATES TODAY AND DISPLAYED A CHART SETTING OUT THE FOLLOWING INFORMATION: INFLATION AT ANNUAL RATE OF 20%. MONEY RATES TRYING TO CATCH UP WITH INFLATION. UNCERTAIN GOVERNMENT INFLATIONARY PROGRAM. INVESTORS DON'T WANT TO GET LOCKED INTO LONG TERM - RATES COULD GO HIGHER. LENDERS DON'T WANT TO GET LOCKED INTO LONG TERM - RATES COULD GO LOWER. MAR 121980 $0° 42. p MAR 12 1980 Box 42 i ci 901 MORTGAGE RATES RANGING FROM 14% TO 16-1/2% (HOUSE DEMAND COLLAPSES) BANK CD's PAYING 18-1/4% FOR 3 MOS. - 18% - 6 MOS. S&L MUST PAY 14.8% FOR 6 MOS. MONEY (30% OF S&L DEPOSITS) PRIME RATE 17-3/4% DISCOUNT RATE NOW 13%. RUMORS OF INCREASE CAUSING MARKET JITTERS - PROBABLY GO TO 15% SOON. FEDERAL FUNDS RATE 16-3/4% COMMERCIAL PAPER - 17-1/4% MR. BLAND COMMENTED THAT ALL THIS CHART DOES IS SHOW THAT THE PRICE OF MONEY IS VERY EXPENSIVE, AND INTEREST ON SHORT TERM MONEY IS VERY HIGH. MR. BLAND THEN DISPLAYED A CHART SHOWING THE RISE OF .THE PRIME RATE OVER THE LAST FEW MONTHS, NOTING THAT ONE CHICAGO BANK AND SOME ON THE WEST COAST ARE AT 18%, AND THE RATES ARE MOVING VERY FAST. HE NEXT PRESENTED A CHART OF THE BOND PUYER'S INDEX, AN INDICATOR OF WHAT IS GOING ON IN THE FISCAL MARKET, WHICH SHOWS THAT OVER THE LAST THREE TO FOUR WEEKS, THE AVERAGE YIELD HAS JUMPED FROM 7-3/4 TO 8.94. MR. BLAND INFORMED THE BOARD THAT UNTIL ABOUT THREE TO FOUR WEEKS AGO, THEY HAD FELT IT WOULD BE A GOOD IDEA TO GO TO NOTES AND THAT THEY WOULD HAVE NO DIFFICULTY IN CONVERTING INTO BONDS IN TWO OR THREE YEARS, BUT NOW HE WISHED TO GIVE THE COMMISSION AN ALTERNATIVE TO CONSIDER - BONDS VERSUS NOTES. HE CONTINUED THAT THEY HAVE BEEN WORKING WITH THE MBIA, THE INSURANCE COMPANY WHICH INSURES MUNICIPAL BONDS AND WHICH IS COMPRISED OF FOUR OF THE LARGEST INSURANCE COMPANIES IN THE UNITED STATES. HE ASKED THE BOARD TO STUDY A CHART SHOWING NOTES VERSUS BONDS AND EXPLAINED THAT IF THE BONDS WERE UNINSURED AND PLACED ON THE MARKET, THEIR RATING WOULD BE ABOUT BAA. HE NOTED THAT THE MARKET FEELS INDIAN RIVER COUNTY IS A GOOD SOUND COUNTY, BUT THAT IT HAS NO TRACK RECORD WITH CREDIT. INTERGOVERNMENTAL COORDINATOR THOMAS NOTED THAT THE COUNTY LANDFILL BONDS WHICH WERE SECURED WITH STATE REVENUE SHARING OBTAINED AN A RATING AND ASKED WHY THE CAPITAL IMPROVEMENT BONDS, WHICH WILL BE SECURED BY RACETRACK FUNDS, SHOULD RECEIVE A LOWER RATING. __ 2 MR. BLAND STATED THAT IT SHOULD BE THE SAME EXCEPT THAT FOR A NUMBER OF YEARS THERE HAS BEEN SOME DISCUSSION THAT RACETRACK FUNDS MIGHT BE ELIMINATED, ALTHOUGH OF COURSE, THE STATE WOULD HAVE TO CONTINUE TO SUPPORT THE BONDS, ALSO WITH THE RATE GOING UP, THE BONDS ARE GOING TO HAVE TO ABSORB PRACTICALLY ALL THE RACETRACK FUNDS; SO ONE OF THE FACTORS IS.COVERAGE. MR. HOUGH EXPLAINED THAT THE RATING AGENCIES AND INVESTORS REGARD THE RACETRACK TAXES, EVEN THOUGH. THEY ARE HISTORICALLY STABLE, AS BEING A GAMBLING TAX, AND THEY ARE NOT GIVEN THE SAME DIGNITY AND STABILITY AS STATE REVENUE SHARING. A GAMBLING TAX SEEMS SPECULATIVE TO A RATING AGENCY, AND THIS WOULD HOLD TRUE FOR ANY COUNTY - ALL WOULD HAVE THE SAME RATING. COMMISSIONER LOY NOTED THAT, IN OTHER WORDS, IF WE BACK THE BONDS WITH THAT TYPE OF REVENUE, WE CAN T EXPECT ANYTHING BUT A BAA RATING, AND MR. HOUGH AGREED. MR. BLAND INFORMED THE BOARD THAT IF YOU INSURE THE BONDS, YOU GET AN AUTOMATIC AAA RATING BECAUSE IF THE COUNTY EVER DEFAULTS ON THE BONDS, THE INSURANCE COMPANY IS RESPONSIBLE FOR MAKING GOOD ON THE PRINCIPAL AND INTEREST DUE. HE STATED THAT THEY HAVE LEARNED THAT THE COST OF INSURANCE ON THESE PARTICULAR BONDS WOULD BE ABOUT $110,000, BUT -POINTED OUT THAT YOU WOULD AUTOMATICALLY RECOVER YOUR COST OF THE INSURANCE, PLUS SOME SAVINGS, DUE TO THE FACT THAT THE INTEREST RATES ON THE ONE TYPE OF BOND ARE MUCH LESS THAN ON THE OTHER TYPE OF BOND. MR. HOUGH SUGGESTED THAT THEY GIVE THE BOARD THE NUMBERS FOR TODAY WITH BOND NOTES AND BONDS SO THEY CAN BE DEALING WITH ACTUAL FIG- URES. HE STATED THAT THE TIC (TRUE INTEREST COST) ON A NOTE ISSUE FOR INDIAN RIVER COUNTY WOULD BE 11.207% BASED UPON A FIRM BID WHICH THEY CAN GIVE THE BOARD FOR THEIR ACCEPTANCE THIS MORNING. THE TIC FOR THE BONDS, ALSO BASED ON A FIRM BID, WOULD BE 9.241%, AND IT INCLUDES THE COST OF THE INSURANCE WHICH IS TREATED AS ADDITIONAL INTEREST COST. MR. HOUGH INFORMED THE BOARD THAT THE MARKET HAS CHANGED SUBSTANTIALLY ON NOTES DURING THE LAST WEEK. 3 HE CONTINUED THAT im 42 PAGE (W MAR 121980 ooic 42 PACE 9- . IF YOU WERE GOING TO SELL NOTES, 11.207% IS A FAIR RATE IN A SITUATION WHERE YOU HAVE 15-16% TREASURY BILLS AND 177 PRIME RATE. HE STATED THAT THEY DID HAVE SOME NOTES FOR TALLAHASSEE AT AROUND 8.90, BUT THEY WERE MIG 1, THE BEST RATED BOND FOR THE CAPITOL OF FLORIDA. MR. HOUGH EXPLAINED THAT THE REASON FOR THE RATING FOR THE INDIAN RIVER COUNTY BONDS GETS BACK TO THE RELATIVELY MINIMAL MARKETABILITY FOR A RACETRACK SECURED BOND SINCE ONLY A FEW MAJOR INSTITUTIONS WILL BUY THEM. HE FURTHER NOTED THAT THE CHICAGO PARK BOARD YESTERDAY SOLD SOME MIG 1 RATED NOTES AT 10-3/4% SO THERE IS A WIDE VARIATION OF INTEREST RATES THAT CAN BE APPLIED TO THE SAME QUALITY. COMMISSIONER WODTKE NOTED THAT THESE ARE TAX FREE NOTES, AND MR. HOUGH INFORMED HIM THAT MUNICIPAL BONDS AND MUNICIPAL NOTES GENERALLY SELL AT ABOUT 2/3 OF THE INTEREST RATE AT WHICH A TAXABLE SECURITY OF SIMILAR QUALITY SELLS. HE FELT, RELATIVELY SPEAKING, YOU COULD GET A MORE FAVORABLE BOND SALE THAN A NOTE SALE, BUT NOTED THAT IF YOU SELL THE NOTES, YOU HAVE THE OPPORTUNITY TO REFINANCE THEM WITHIN THE NEXT THREE YEARS; WHILE IF WE SHOULD GET A DECLINE IN INTEREST RATES, YOU THEN WOULD BE ABLE TO REFINANCE* AND SELL YOUR BONDS AT A LOWER INTEREST RATE. COORDINATOR THOMAS NOTED THERE ARE OTHER FACTORS THAT CAN EFFECT A DROP IN INTEREST RATES. MR. HOUGH STATED THAT UNFORTUNATELY WE ARE IN A CRISIS SITUATION WITH NO WAY TO PREDICT; MOST PEOPLE IN BANKING NEVER EXPECTED THE PRIME RATE TO COME TO 17%. HE CONTINUED THAT HE WOULD GUESS THAT AFTER A PERIOD OF TIME, YOU WILL HAVE LOWER INTEREST RATES, BUT UNLESS THE GOVERNMENT AND OTHER SUPPLY AND DEMAND FACTORS WORK, MAYBE IT WILL GO TO 20-25%. HE NOTED THAT IN SOME OTHER COUNTRIES, NAMELY ARGENTINA, IT HAS GONE AS HIGH AS 60%. CHAIRMAN SIEBERT COMMENTED THAT IF WE SHARE THAT FEELING, WE GO BY WAY OF THE NOTES; IF WE DON T WE GO BY BONDS. DISCUSSION ENSUED IN REGARD TO THE COST OF itDEFEASING" BONDS. MR. BLAND STATED THAT THE RULE OF THUMB TO WARRANT DE- FEASEMENT WOULD BE A REDUCTION IN INTEREST RATES OF 1%, BUT THAT A 2% REDUCTION WOULD BE NECESSARY TO REALIZE SIGNIFICANT SAVINGS. PSR. BLAND THEN PRESENTED A CHART DEMONSTRATING THE TWO ALTERNATIVES - ISSUANCE OF $4,080,000 NOTES AGAINST ISSUANCE OF $4,350,000 INSURED BONDS. HE NOTED THAT WITH BONDS IF THE MARKET IMPROVES SUBSTANTIALLY, THEY CAN BE ADVANCE REFUNDED AND POINTED OUT THAT IF YOU LOCK IN ON THE BONDS, YOU THEN KNOW WHAT THE BONDS WILL BE AND YOU HAVE THE OPPORTUNITY TO GO LOWER. IF YOU GO FOR THE NOTES, YOU HAVE TO FACE UP TO PLACING A PERMANENT BOND WITHIN A TWO YEAR PERIOD. HE NOTED THAT HE DISCUSSED THESE ALTERNATIVES WITH FINANCE OFFICER BARTON AND COORDINATOR THOMAS YESTERDAY AND THEY HAVE CERTAIN REAC- TIONS WHICH THE BOARD MIGHT WISH TO HEAR. FINANCE OFFICER BARTON EXPLAINED THAT IF THE BONDS WERE ISSUED AND HAVE A "CALL" FEATURE, THEY CAN BE ° CALLED " OR "DEFEASED" IN TEN YEARS, I.E. YOU CANNOT PAY THEM OFF WITHIN THE TEN YEARS, AND YOU PAY A 3% PREMIUM TO CALL THEM WITHIN THE TEN YEARS. MR. HOUGH FELT WHAT MR. BARTON IS GETTING AT IS THERE IS NO WAY YOU CAN SAVE ANY MONEY ON REFUNDING THE BONDS UNTIL TEN YEARS, AND THEN YOU WILL HAVE A COST TO RECALL THEM, PROBABLY A 1-2% ONE TIME COST. IF YOU SELL THE BOND, YOU WILL PAY 9.82% FOR TEN YEARS AND AT THE END OF TEN YEARS, IT WILL COST ABOUT TWO POINTS TO HAVE A NEW ISSUE OR 3 POINTS IF YOU RECALL THEM. ON THE OTHER HAND, WITH THE NOTES, YOU ARE NOT GOING TO SAVE ANY MONEY FOR TWO YEARS BECAUSE THEY ARE NON -CALLABLE, BUT IF YOU DEFEASED THEM, GENERALLY YOU COULD BREAK EVEN. COORDINATOR THOMAS FELT IT STILL GETS BACK TO WHETHER, IN THE BOARD'S OPINION, THE INTEREST RATES WILL OR WILL NOT COME DOWN, AND HE FELT THAT THEIR OPINION WAS AT LEAST AS GOOD OR MAYBE BETTER THAN THE EXPERTS. CHAIRMAN SIEBERT ASKED HOW PSR. THOMAS AND MR. BARTON FELT ABOUT THE ALTERNATIVES PRESENTED, AND MR. THOMAS STATED THAT HE WAS INCLINED TO GO WITH THE NOTES, MAINLY BECAUSE HE FELT THAT THE 5 BOOK : 42-M E'4 MAR 121990 max 42:, PAcE 905 COUNTRY COULD NOT LIVE WITH A 20-25o PRIME RATE AND THAT SOMETHING WILL DEFINITELY HAPPEN. MR. BARTON CONCURRED. MR. HOUGH STATED THAT HIS OWN ADVICE IS THAT WITH THE BONDS, YOU CAN'T GET IN ANY TROUBLE. HE BELIEVED THAT INTEREST RATES WILL BE LOWER TWO YEARS FROM NOW, BUT POINTED OUT THAT IF YOU HAVE TO PAY 11% FOR BONDS IN 1981 TO PAY OFF THE NOTES, YOU COULDN'T MEET THE PAYMENT AND YOU WOULD HAVE TO MAKE UP THE DIFFERENCE. HE FELT THE CONSERVATIVE FINANCIAL DECISION WOULD BE TO SELL THE BONDS, WHILE MOST LIKELY THE BEST PROBABILITY WOULD BE TO SELL THE NOTES. COORDINATOR THOMAS COMMENTED THAT THERE IS ONE OTHER ALTERNATIVE - NOT TO ISSUE THIS BIG AN ISSUE AND DRAW ON SOME RESERVES FOR A PORTION INSTEAD. COMMISSIONER LYONS FELT THAT WE ARE LOOKING AT VERY HARD TIMES AND STATED HE WOULD HATE TO JEOPARDIZE OUR CASH POSITION, WHICH HE FELT WOULD BE LOOKING FOR TROUBLE. COMMISSIONER WODTKE NOTED THAT A COUPLE OF WEEKS AGO WE WERE LOOKING AT 87 AND NOW WE ARE LOOKING AT 11 PLUS. HE WONDERED ABOUT ANY POSSIBILITY OF A NOTE IN THE LOCAL AREA, BECAUSE IN THE PAST WE HAVE HAD FINANCIAL INSTITUTIONS INTERESTED ON A LOCAL PARTICIPATION BASIS. COORDINATOR THOMAS INFORMED THE BOARD THAT WE HAVE SOME LOCALINVESTORS WHO HAVE IN THE PAST BOUGHT NOTES FROM HOUGH & COMPANY. HE CONTINUED THAT HE HAS TALKED TO FIRST CITRUS, AND THEY HAVE INDICATED THAT THEY ARE NOT SURE, BUT THEY WOULD LIKE TO BE ADVISED. HE POINTED OUT THAT PART OF HOUGH'S FUNCTION IS TO TRY TO MAKE ARRANGEMENTS FOR PURCHASE OF THESE NOTES, AND THEY ARE INTERESTED IN GETTING RID OF THEM AS FAST AS THEY CAN. HE DID NOT FEEL THIS WILL AFFECT THE INTEREST RATE. MR, HOUGH COMMENTED THAT THE FIRST PEOPLE THEY WOULD CALL WOULD BE THE LOCAL BANKS, BUT IT WOULD BE UNLIKELY THEY WOULD TAKE THE WHOLE THING. FINANCE OFFICER BARTON ASKED IF THEY ARE SAYING THEY WOULD BUY THEM ALL TODAY, AND MR. HOUGH STATED THAT THEY ARE PREPARED TO MAKE A FIRM BID TODAY. ATTORNEY COLLINS DID NOT BELIEVE THE COMMISSION IS IN A POSITION TO ACCEPT EITHER BID TODAY BECAUSE OF THE NECESSITY OF AGAIN CHANGING THE HOME RULE ORDINANCE, WHICH WAS RECENTLY CHANGED TO 9%, AND MR. HOUGH FELT IT COULD BE AMENDED BY AN EMERGENCY ACTION. ATTORNEY COLLINS FURTHER COMMENTED THAT MR. HOUGH STATED THAT THE NOTES WOULD NOT BE CALLABLE FORA PERIOD OF TWO YEARS, BUT THE WAY THE RESOLUTION IS DRAFTED THEY WERE REDEEMABLE WHENEVER THE INTEREST IS DUE, WHICH HE BELIEVED IS SEMI-ANNUALLY. MR. HOUGH BELIEVED THEY WOULD PURCHASE THEM WITHOUT A REDEMPTION PROVISION. HE STATED THEY ARE NOT MARKETABLE IF THEY ARE CALLABLE, AND HE FELT YOU CAN ACCOMPLISH THE SAME THING BY DEFEASING THE NOTES. ATTORNEY COLLINS STATED THAT IS INCONSISTENT WITH ALL PRIOR DISCUSSIONS. MR. BLAND FELT THAT THEY DID HAVE A REDEMPTION PROVISION AT SOME POINT, BUT THE ONE REASON THEY HAVE GONE FOR NO REDEMPTION IS BECAUSE OF THE MARKETABILITY OF THE NOTES. COORDINATOR THOMAS STATED HE WAS NOT CONCERNED ABOUT THAT BECAUSE HE BELIEVED YOU HAVE A PERFECT EDGE WITH DEFEASEMENT. DISCUSSION FOLLOWED ABOUT WHETHER THE LEGAL DOCUMENTATION WAS CONSISTENT WITH THE PROPOSAL, AND IT WAS ESTABLISHED THAT AS FAR AS THE NOTES ARE CONCERNED, THEY ARE CONSISTENT WITH 'ANO CALL." ATTORNEY COLLINS POINTED OUT THAT THE NOTES AS PREPARED BY JOHN KELLEY ARE NOT CONSISTENT WITH THIS, BUT IT WOULD BE NO PROBLEM TO CHANGE THAT. HE FELT THIS SHOULD HAVE BEEN DISCUSSED MORE STRONGLY PREVIOUSLY, AND MR. BLAND APOLOGIZED THAT THIS WAS NOT MADE CLEAR SOONER. HEPBURN WALKER, INTERESTED CITIZEN, QUESTIONED WHETHER, IN REGARD TO SETTING A TRACK RECORD, IT WOULD MAKE ANY DIFFERENCE IF YOU WERE TO GO BY NOTE OR BOND, AND MR. HOUGH BELIEVED IT WOULD BE THE SAME EITHER WAY. HE NOTED THAT EACH RATING HAS TO STAND ON ITS OWN, AND RACETRACK FUNDS ARE CONSIDERED DIFFERENTLY. 7 MAR- l 2 NO w 4Z PO r � MAR 121980 soon, 42 PncE907 PHIL LONG, NEWSMAN, ASKED IF THERE IS AN ADDITIONAL LEGAL FEE FOR ISSUANCE OF A NOTE. MR. BLAND STATED THAT THERE WOULD BE SOME DIFFERENCE BETWEEN NOTES AND BONDS, BUT IN TWO YEARS, THE PROSPECTUS WOULD STILL BE VALID AND NOT HAVE TO BE REDONE. SOME ATTORNEYS CHARGE $2.00 PER BOND, ETC. MR. LONG COMMENTED THAT THE SCHOOL BOARD WAS CHARGED AN ADDITIONAL $1.00 PER BOND FOR NOTES -INSTEAD OF BONDS, AND ATTORNEY COLLINS BELIEVED IT WOULD BE THE SAME IN THIS SITUATION. MR. BLAND STATED THAT THEY HAVE TWO PROPOSALS THEY CAN SHOW THE BOARD TODAY. COMMISSIONER WODTKE ASKED IF THE BOARD IS GOING TO BE ASKED TO MAKE A FINAL DECISION TODAY, AND COMMISSIONER LOY FELT WE HAVE TO. COMMISSIONER WODTKE NOTED THAT TWO WEEKS AGO WE HAD A 7-112 - 8% PROPOSAL AND NOW WE GET 11% - HOW DO WE CHECK THIS? MR. HOUGH FELT THEIR FUNCTION IS TO CHECK OUT THE MARKET AND WENT ON TO DISCUSS RATINGS, ETC. COORDINATOR THOMAS INFORMED THE BOARD THAT WHEN YOU GO INTO THE ORIGINAL NOTES, BY NATURE OF THE CONSTRUCTION JOB AND BY REASON OF THE IRS RULES, WE ARE PUT IN A VERY FAVORABLE POSITION TO USE THE ARBITRAGE RULES BECAUSE HE FELT THE LOCAL BANKS WILL ASSIST US IN INVESTING THIS MONEY IMMEDIATELY. HE STATED THAT HE WOULD HOPE TO MAKE ABOUT $300,000 JUST ON ARBITRAGE ALONE TO OFFSET INTEREST EXPENSE. WILLIAM KOOLAGE, INTERESTED CITIZEN, ASKED IF YOU CAN HEDGE BY GOING PARTLY BONDS AND PARTLY NOTES, AND MR. HOUGH STATED IT COULD BE DONE BUT THEY ARE NOT PREPARED TO MAKE SUCH A PROPOSAL NOW. CHAIRMAN SIEBERT NOTED YOU COULD ALSO HEDGE BY USING PART CASH, BUT ATTORNEY COLLINS STATED THAT HE WOULD NOT RECOMMEND THAT. COMMISSIONER LYONS COMMENTED THAT IF YOU GO WITH THE BONDS, IF THE MARKET DROPS BY MORE THAN 2%, YOU CAN THEN GO AHEAD AND END UP WITH A LOW INTEREST RATE FOR THE REMAINDER OF THE TIME, EXCHANGING BONDS; WE DON T HAVE ANY PROBLEM WITH SECURITY; AND OUR SECURITY COULD BE LESS. IF YOU GO WITH THE NOTES AND IT TURNS OUT THAT THE INTEREST RATES ARE GOING TO RISE, WHICH IS A POSSIBILITY, WE COULD END UP WITH.INSUFFICIENT SECURITY AND THEN WHAT DO WE DO? HE STATED THAT CONSIDERING ALL THIS, HE WOULD VOTE FOR THE BONDS. FINANCE OFFICER BARTON INQUIRED ABOUT THE PRICE FOR A REOFFERING. MR. HOUGH STATED THAT THE BONDS WOULD BE PRICED OUT TO AN 8.75 YIELD ON A REOFFERING. THE ATTRACTION FOR THE NOTES IS TO MAKE A PROFIT ON REINVESTMENT, BUT THIS WOULD ALSO EXIST ON THE BONDS AND COULD EVEN BE GREATER. ANY ULTIMATE SAVINGS FROM REFUNDING THE BONDS WOULD NOT BE GENERATED UNTIL AFTER THE TENTH YEAR. COORDINATOR THOMAS FELT IT ALL GETS BACK TO THE QUESTION OF WHETHER INTEREST RATES WILL COME DOWN. COMMISSIONER WODTKE NOTED THAT WE HAVE SEEN THE RATES ON THE NOTES GO FROM 7% TO 11% IN THE LAST FEW WEEKS AND INQUIRED ABOUT THE RATES ON THE BONDS. MR. HOUGH REPORTED THAT THEY HAVE GONE FROM 8 TO 9. COORDINATOR THOMAS STATED THAT THERE HAS BEEN A COMPLETE REVERSAL IN THE MARKET ON LONG TERM AND SHORT TERM MONEY, AND MR. HOUGH NOTED THAT THIS HAPPENS IN A CREDIT CRUNCH. COMMISSIONER LOY ASKED HOW SOON THE COUNTY CAN RECEIVE THE FUNDS IF WE GO WITH THE BONDS. MR. BLAND STATED THAT THE BONDS COULD BE COMPLETED AND PRINTED WITHIN TWO WEEKS, AND THE NOTES ABOUT THE SAME. THE COUNTY WOULD PHYSICALLY GET THE MONEY IN TWO TO THREE WEEKS, AND THE RATE WOULD BE LOCKED IN. CHAIRMAN SIEBERT STATED THAT HIS GUT REACTION IS THAT THE INTEREST RATES WILL GO DOWN, BUT, JUST THE SAME AS COMMISSIONER LYONS, HE IS CONCERNED ABOUT GUESSING, WRONG AND DID NOT WISH TO GAMBLE BECAUSE IF THE INTEREST RATES DON'T DROP, WE COULD BE IN SERIOUS TROUBLE. 9 MAR 121980 wx 42. PAcE 908 MAR 121990 �o 42 Pa EW9 MR. HOUGH STATED THAT ANOTHER THING IN FAVOR OF THE BONDS IS THAT FOR THE LAST 30 DAYS THERE HAS NOT BEEN A MBIA INSURED BOND OFFERED IN FLORIDA, AND HE BELIEVED THERE IS A GOOD MARKET FOR THEM RIGHT NOW, WHICH WOULD BE A PLUS, COMMISSIONER DEESON INFORMED THE BOARD THAT HIS OPINION AND FEELINGS HAVE CHANGED TREMENDOUSLY IN THE LAST TWO TO THREE WEEKS. WHEN WE WERE LOOKING AT A 7-8% NOTE, HE WAS INCLINED TO LEAN TOWARD NOTES, BUT IN VIEW OF THE LAST FEW WEEKS, HIS CONSER- VATISM HAS WON OUT, AND HE PERSONALLY FEELS WE SHOULD LOCK IN THE RATE ON A BOND ISSUE BECAUSE HE IS GREATLY CONCERNED ABOUT COST IF RATES CONTINUE TO CLIMB. HE TENDED TO BELIEVE THEY CAN'T, BUT WOULD STILL FAVOR THE BONDS. ATTORNEY COLLINS POINTED OUT THAT AN EMERGENCY ORDINANCE REQUIRES A 4/5 VOTE, AND HE BELIEVED IF THE BOARD MAKES THE DECISION, THEY WILL HAVE TO PASS AN EMERGENCY ORDINANCE. HE NOTED THAT SUCH AN ORDINANCE WOULD APPLY TO ANY ISSUE,NOT JUST THIS PARTICULAR ONE. COMMISSIONER DEESON LEFT THE MEETING AT 11.:20 O'CLOCK A.M. TO COUNT ABSENTEE BALLOTS AND RETURNED AT 11:30 O'CLOCK A.M. ATTORNEY COLLINS REQUESTED MR. BLAND TO SUMMARIZE WHAT HAS HAPPENED TO THE AAA BOND MARKET IN THE LAST YEAR. MR. HOUGH ANSWERED THAT THE TRIPLE A MARKET TODAY IS PROBABLY TYPICALLY AROUND 8-3/4 - 9-1/4%, DEPENDING ON THE SIZE OF THE ISSUE, AND IT HAS BEEN DOWN AROUND 6% IN THE LAST 12-18 MONTHS. HE ALSO COMMENTED THAT THE PRIME RATE HAS BEEN UNDER 10 IN THE LAST 28 MONTHS, AND IT IS HARD TO KEEP TRACK. IN FURTHER DISCUSSION, IT WAS NOTED THAT THE FINANCE OFFICER AND THE INTERGOVERNMENTAL COORDINATOR FAVOR THE NOTES. COMMISSIONER WODTKE ASKED IF WE WENT WITH THE NOTES FOR TWO YEARS, LOOKING AT THE INSURED BOND RATE RIGHT NOW, WHAT WILL THE BOND RATE HAVE TO DROP IN ORDER FOR US TO ACCOMPLISH WHAT YOU ARE DISCUSSING? MR. BLAND EXPLAINED THAT IN TWO YEARS YOU WILL BE PAYING INTEREST ONLY ON THE NOTES. HE MENTIONED THAT INSOFAR AS THE BONDS ARE CONCERNED, THEY FEEL ASSURED THAT THEY WILL GET THE MBIA INSURANCE THOUGH THEY HAVE CERTAIN RULES ABOUT WHAT THEY WILL AND WILL NOT INSURE AND THEY ARE VERY MUCH CONCERNED ABOUT THE LONG TERM MARKET RIGHT NOW. COMMISSIONER WODTKE ASKED IF MR. BLAND WAS SAYING THAT THE 9.24 INSURANCE BOND IS A DEFINITE PROPOSAL, AND MR. HOUGH STATED THAT IT IS DEFINITE; THEY ONLY HAVE ONE CONTINGENCY AND THIS IS TO GET THE MBIA INSURANCE, BUT HE BELIEVED IT IS 99% SURE. CHAIRMAN SIEBERT FELT WITH A CONTINGENCY IT IS NOT FIRM. MR. HOUGH STATED THAT THE RATE IS FIRM AND THE BID IS FIXED, SUBJECT TO THE LEGAL OPINION OF THE BOND ATTORNEYS. IN REGARD.TO THE MBIA INSURANCE PREMIUM, HE NOTED THAT THEY HAVE GONE THROUGH THE ANALYSIS AND HAVE ALREADY QUOTED A PREMIUM OF $110,000, AND ONCE THEY GET TO THAT POINT, IT IS AN AUTOMATIC THING. IF THERE.SHOULD BE A WAR OR CLOSING OF THE BANKS BETWEEN NOW AND CLOSING, THEN THERE IS NO DEAL. MR. HOUGH THEN DISCUSSED THE REQUIREMENT FOR A ONE YEAR DEBT SERVICE MAXIMUM AMOUNT IN A RESERVE ACCOUNT, OR $424,000. HE STATED THAT THEY CAN PUT THIS IN A TEN YEAR CERTIFICATE OF DEPOSIT OR TREASURY BOND, ETC. THE CD AT 11% CAN BE CASHED WITHOUT PENALTY AT ANY TIME. HE STATED IT HELPS THEM IN MARKETING THE BONDS TO BE ABLE TO OFFER THE CERTIFICATE OF DEPOSIT TO A BANK IN RETURN FOR THEM BUYING THE BONDS, AND THIS IS INCLUDED AS A CONDITION OF THE PROPOSAL BEFORE THE BOARD. CHAIRMAN SIEBERT ASKED WHAT IS THE PURPOSE OF THEM SELECTING THE BANK, AND MR, HOUGH EXPLAINED THAT THEY USE IT AS LEVERAGE TO SELL THE BONDS. IT HELPS THEM TO GIVE THE BOARD A BETTER BID, AND THIS WOULD BE SECURED IN ACCORDANCE WITH THE LAWS OF FLORIDA. HE STATED THAT THEY ARE NOT MAKING ANY PROPOSAL ABOUT INVESTING ANY MONEY ON THE NOTES, JUST THE BONDS. COORDINATOR THOMAS EXPLAINED THAT IN THE BOND FIELD IT IS NOT INFREQUENT TO SELL AAA BONDS AT A PREMIUM, WHICH, IN EFFECT, INCREASES THE COST. B BONDS WILL NOT SELL AT A PREMIUM. THIS IS HOW BOND COMPANIES MAKE THEIR MONEY. 11 ROOK 42 PAGE 91jifl MAR 12 1980 BOOK 42 PAGE 911> MR. HOUGH NOTED THAT EVERY DAY THEY DONT SELL THE BONDS, THEY HAVE TO CHANGE THE RATES. COMMISSIONER WODTKE ASKED HOW FAR THE RATE WILL HAVE TO GO UP ON THE NOTES BEFORE WE GET IN A PROBLEM WITH OUR RACETRACK FUNDS NOT BEING SUFFICIENT SECURITY, AND MR. BLAND STATED IT WOULD BE $424,000 PER YEAR PLUS OR MINUS A SMALL AMOUNT - THE DEBT SERVICE PER YEAR ON THE BONDS. FINANCE OFFICER BARTON NOTED THAT THE RACETRACK FUNDS ARE $446,500 PER YEAR, OR JUST A LITTLE OVER ONE TIMES COVERAGE, AND AT PRESENT ALL COUNTIES GET THE SAME AMOUNT, COMMISSIONER WODTKE ASKED WHAT A 1% RATE INCREASE IN THE BOND MARKET WOULD DO TO THE DEBT SERVICE, APPROXIMATELY, AND MR. HOUGH STATED THAT IT WOULD BE ABOUT $30,000, ACTUALLY ABOUT $40,000 THE FIRST YEAR AND IT WOULD GRADUALLY DECLINE AS YOU PAID OFF THE COMMISSIONER WODTKE STATED THAT, IN OTHER WORDS, IF IT WENT UP 1%, THE RACETRACK FUNDS WOULD NOT BE SUFFICIENT, AND MR. BLAND NOTED THAT THE INTEREST EARNED ON THE RESERVE ACCOUNT IS PLEDGED ALSO. COMMISSIONER WODTKE NOTED THAT IF WE WENT TO THE BOND MARKET, IT WOULD HAVE TO DROP 2% BEFORE IT WOULD BE PROFITABLE TO DEFEASE. CHAIRMAN SIEBERT FELT THE BOARDS ATTORNEY WILL HAVE TO REVIEW THE DOCUMENTS, AND ATTORNEY COLLINS STATED THAT HE HAS LOOKED AT MOST OF THE DOCUMENTS AND DID NOT FEEL THE LEGAL WOULD HOLD US UP. CHAIRMAN SIEBERT COMMENTED THAT IT SEEMS THREE BOARD MEMBERS PREFER THE BONDS AT THIS POINT AND ASKED IF COMMISSIONERS LOY AND WODTKE WISHED TO COMMENT. COMMISSIONER LOY NOTED THAT EVERY TIME SHE SAYS THE INTEREST RATE CAN T GO UP, IT GOES UP SOME MORE. DISCUSSION CONTINUED IN REGARD TO INSURED BONDS VERSUS UNINSURED BONDS, AND INTERGOVERNMENTAL COORDINATOR THOMAS STATED 12 THAT IF THE BOARD SHOULD DECIDE TO GO BONDS, HE WOULD CERTAINLY RECOMMEND THE MBIA ROUTE. THE BOARD AGREED. THE COORDINATOR CONTINUED TO DISCUSS AN ISSUE OF $4,350,000 FOR BONDS AND $4,0$0,000 FOR NOTES AND ASKED, IN THE EVENT WE ONLY NEEDED TO USE $4,150,000, WHAT OUR POSITION WOULD BE AS FAR AS THE ARBITRAGE IS CONCERNED. MR. BLAND EXPLAINED THAT THE REST OF THE MONEY GOES INTO THE CONSTRUCTION RESERVE ACCOUNT, AND IT COULD BE INVESTED. IF YOU DIDNIT SPEND IT ALL, YOU WOULD HAVE A SURPLUS. COMMISSIONER LYONS NOTED THAT PEOPLE HAVE STOPPED SAVING MONEY EVEN IN SPITE OF THE BAD TIMES, AND THERE WON'T BE MONEY TO LOAN. HE FELT IT WILL KEEP THE INTEREST RATES UP AND DID NOT BELIEVE ALL THIS WILL BE REVERSED IN TWO YEARS, WHICH IS WHY HE FAVORS THE BONDS, COMMISSIONER DEESON AGREED THAT REPORTS SHOW THAT PEOPLE ARE SPENDING AND NOT SAVING. COMMISSIONER LOY ASKED IF WE GO THE ROUTE OF THE BONDS WITH THE INSURANCE, WHICH GIVES AN AUTOMATIC AAA RATING, COULDN'T WE DO ANY BETTER THAN THE 9.21 AND MR. HOUGH STATED THAT HE DID NOT BELIEVE SO; THAT THEY HAVE GIVEN IT THEIR BEST SHOT. DISCUSSION FOLLOWED ON BACKING BY THE RACETRACK FUNDS AND WHY, IF THEY ARE INSURED, THEY ARE NOT AS GOOD AS ANYTHING ELSE, AND COORDINATOR THOMAS NOTED THAT IF YOU FORFEIT, THE RACETRACK FUNDS ARE USED BEFORE YOU GO TO THE INSURANCE COMPANY. ATTORNEY COLLINS ASKED IF THE INSURANCE REQUIRES ONLY A ONE TIME PREMIUM, AND MR. BLAND STATED THAT IT IS JUST A ONE TIME PAYMENT AND IF YOU REFUND, YOU GET A CREDIT. HE CONFIRMED THAT THE INSURANCE COST WILL BE.$110,000. COMMISSIONER Loy STATED THAT HER CONSERVATIVE NATURE IS GOING TO PREVAIL. SHE JUST DOES NOT FEEL THE RATES WILL COME DOWN APPRECIABLY VERY SOON AND WOULD, THEREFORE, SUGGEST WE DO WHATEVER WE CAN TO EXPEDITE THIS MATTER AND GO WITH THE BONDS. W" BOOK 42, -PAGE -Qi 2 MAR 121980 MAR 12 1980 Nol 42 PAGE 913 COMMISSIONER LYONS REITERATED THAT EVEN THE EXPERTS HAVE GUESSED WRONG SO FAR, AND BASED ON EVERYTHING HE HAS HEARD TODAY, HE FELT THE CONSERVATIVE APPROACH IS TO GO WITH THE BONDS. INTERGOVERNMENTAL COORDINATOR THOMAS INFORMED THE BOARD THAT HE AND FINANCE OFFICER BARTON WERE NOT THAT STRONGLY AGAINST EITHER POSITION. COMMISSIONER WODTKE STATED THAT HE WOULD LEAN TOWARD THE NOTES BECAUSE HE BELIEVED SOMETHING HAS GOT TO OCCUR BETWEEN NOW AND THE END OF THE YEAR. HE ADMITTED THAT TAKING THAT POSITION WOULD PROBABLY BE MUCH MORE OF A GAMBLE THAN GOING WITH THE BONDS, BUT NOTED THAT IF WE WENT WITH THE NOTES, THE FINANCE OFFICER HAS SAID THEY CAN BE INVESTED AT 17% POSSIBLY, WHICH IS NOT (QUITE A 6 POINT SPREAD. HE STATED THAT HE WOULD NOT BE UPSET WHICHEVER WAY WE GO WITH THIS, AND COMMENTED THAT IT ALL IS JUST A MATTER OF HITTING AT THE RIGHT TIME. ATTORNEY COLLINS STATED THAT IF THE BOARD WISHES TO ACT, THE FIRST STEP IS TO DECLARE THAT AN EMERGENCY EXISTS IN RELATION TO THIS PARTICULAR MATTER, AND HAVING MADE THE DECLARATION, THEN GO AHEAD AND PASS AN AMENDMENT TO ORDINANCE 77-19 AND 80-3, SECTION 2. ON MOTION MADE BY COMMISSIONER LYONS, SECONDED BY COMMIS - STONER LOY, THE BOARD UNANIMOUSLY DECLARED THAT AN EMERGENCY EXISTS IN CONNECTION WITH THE FINANCING OF THE COUNTY ADMINISTRATION COMPLEX THAT WOULD REQUIRE AN AMENDMENT TO THE EXISTING HOME RULE ORDINANCE WITHOUT THE NECESSARY NOTICE. ON LOTION BY COMMISSIONER LYONS, SECONDED BY COMMISSIONER DEESON, THE BOARD UNANIMOUSLY ADOPTED EMERGENCY ORDINANCE 80-10 AMENDING ORDINANCE 77-19 AND ORDINANCE 80-3, BOTH AS TO SECTION 2, INCREASING THE "NOT TO EXCEED" INTEREST RATE PER ANNUM FROM 9% TO 9.5% WITH THE UNDERSTANDING THAT ALL THE BALANCE OF SECTION 2*SHALL REMAIN AS EXISTS IN THOSE ORDINANCES. ORDINANCE NO. 80-10 AN EMERGENCY ORDINANCE AMENDING COUNTY ORDINANCE NO. 77-19 ENTITLED: "AN ORDINANCE RELATING TO THE ACQUISITION, CONSTRUCTION, FURNISHING AND EQUIPPING OF COUNTY CAPITAL PROJECTS IN INDIAN RIVER COUNTY, FLORIDA; AUTHORIZING THE ISSUANCE OF BONDS BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA, TO FINANCE THE COST OF SUCH PROJECTS,PAYABLE FROM REVENUES, IF ANY, DERIVED FROM SAID PROJECTS AND ALSO PAYABLE FROM A PORTION OF THE STATE REVENUE SHARING TRUST FUNDS RECEIVED BY INDIAN RIVER COUNTY OR OTHER FUNDS OF THE COUNTY DERIVED FROM SOURCES OTHER THAN AD VALOREM TAXES; PROVIDING THE METHOD BY WHICH THIS ORDINANCE SHALL BECO14E EFFECTIVE"; INCREASING THE MAXIMUM RATE OF INTEREST WHICH BONDS ISSUED THEREUNDER MAY BEAR; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH; PROVIDING AN EFFECTIVE DATE. WHEREAS, pursuant to Article VIII, Section 1 of the Constitution of the State of Florida and Section 125.01 et seq., Florida Statutes, the Board of County Commissioners of Indian River County, Florida, has all powers of local self-government to perform County functions and to render County services in a manner not inconsistent with general or special law and such power may be exercised by the enactment of County ordinances; and WHEREAS, the County has heretofore enacted County Ordinance No. 79-19 authorizing the issuance of bonds to finance County capital projects; and WHEREAS, because of conditions in the municipal bond market, it is necessary for the public health, safety and general welfare of the County and its citizens that said Ordinance be amended to increase the maximum interest rate at which bonds issued pursuant to said Ordinance No. 77-19 may bear; NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA: SECTION 1. Section 2 of Ordinance No. 77-19, duly enacted on August 3, 1977, and effective August 9, 1977, and referred to by title in the title of this Ordinance, be and the same is hereby amended to read as follows: "SECTION 2. To pay the cost of such projects, as above described, or to refund any bonds issued for �O�K 42 PAGE 9�4 - MAR 1 Z 1980 Bou 42 PACE 915 such purposes, the Board is authorized to issue bonds from time to time (hereinafter referred to as "bonds"). Such bonds may be in coupon form, in such denomination or denominations, bear interest at such rate or rates not exceeding nine and one-half per centum (9.5%) per annum and shall mature at such time or times not exceeding forty (40) years from their date or dates as may be determined by the Board. The bonds may be made redeemable before maturity, at the option of the Board, at such price of prices and under such terms and conditions as may be fixed by the Board prior to their issuance. The Board shall determine the place or places of payment of the principal and interest which may be at any bank or trust company within or without the State. The bonds shall be signed either by manual or facsimile signatures of the Chairman and Clerk of the Board, provided that such bonds shall bear at least one (1) signature which is manually executed thereon, and the coupons attached to such bonds shall bear the facsimile signature or signa- tures of such officer of officers as shall be designated by the Board. The bonds shall have the seal of the Board affixed, imprinted, reproduced or lithographed thereon, all as may be prescribed in the resolution or resolutions authorizing the issuance thereof. The bonds shall be sold at public sale or private sale at such price or prices as the Board shall determine to be in the best interest, provided that the price shall not be less than ninety-five per centum (95%) of the par value of the bonds sold." SECTION 2. All Ordinances in conflict with this Ordinance including specifically Ordinance No. 80-3, are hereby repealed. SECTION 3. The remaining provisions of said Ordinance No. 77-19 shall remain in full force and effect and are hereby ratified and confirmed. -2- r SECTION 4. This Board does hereby declare that an emergency exists and by no less than four-fifths (4/5) vote does hereby waive notice of intent to consider this Ordinance. SECTION 5. A certified copy of this Ordinance, as enacted, shall be filed by the Clerk of the Board with the Department of State of Florida, as soon after enactment as is practicable by depositing the same with the postal authorities of the Government of the United States for special delivery by registered mail, postage prepaid, to the Florida Department of State. This Ordinance shall take effect when a copy has been accepted by the postal authorities of the Government of the United States for special delivery by registered mail to the Florida Department of State. This Ordinance shall take effect March 14, 1980. eAOX : PAGE. , MAR 121990 umx 42. FACE91:71-; THE BOARD NEXT DISCUSSED A RESOLUTION ACCEPTING THE PROPOSAL OF HOUGH & CO., AND ATTORNEY COLLINS STATED THAT HE HAS NOT SEEN THE FORMAL BOND AND ASKED IF MR. HOUGH KNEW OF ANY INCONSISTENCIES. MR, HOUGH STATED THAT HE DID NOT KNOW OF ANY, BUT IF THERE SHOULD BE AN INCONSISTENCY, HE BELIEVED IT COULD BE REMEDIED. ON MOTION BY COMMISSIONER DEESON, SECONDED BY COMMISSIONER LYONS, COMMISSIONER WODTKE VOTED IN OPPOSITION, THE BOARD ADOPTED RESOLUTION N0. 80-28 ACCEPTING THE PROPOSAL OF WILLIAM R. HOUGH & CO. DATED MARCH 12, 1980 IN REGARD TO A $4,350,000 INDIAN RIVER COUNTY, FLORIDA CAPITAL IMPROVEMENT REVENUE BOND, SERIES 1980, AT A TIC RATE, AS PROVIDED THEREIN, NOT TO EXCEED 9.241808, WHICH INCLUDES MBIA INSURANCE, AND AUTHORIZED THE CHAIRMAN TO SIGN THE NECESSARY DOCUMENTS TO CONSUMMATE THE TRANSACTION. SAID PROPOSAL IS HEREBY MADE A PART OF THE MINUTES, AND RESOLUTION N0. 80-28 WILL BE MADE A PART OF THE MINUTES WHEN RECEIVED. 18 L - tuilham H. Hough &C6. P. O. BOX 3546 23 WEST CHURCH STREET ORLANDO. FLORIDA 32802 (305) 841-1685 ALFRED C. SHEPARD RESIDENT PARTNER GEORGE T. BLAND PARTNER ARNOLD W. SC14NEIDER VICE PRESIDENT The Honorable Chairman and Members of the Board of County Commissioners Indian River County Vero Beach, FL 33960 Gentlemen: March 12, 1980 HOME OFFICE FLORIDA FEDERAL BUILDING ST. PETERSBURG, FLORIDA 33731 This letter constitutes our offer to purchase $4,350,000 Indian River County, Florida Capital Improvement Revenue Bonds, Series 1980. The Bonds are scheduled to mature in accordance with the following schedule of stated maturity dates and are to bear interest at the rates shown below: The Bonds shall be subject'to prior redemption in accordance with the Official Statement, a copy of which is hereby attached. We offer to pay the sum of Four Million Two Hundred Forty Two .Thousand Nine Hundred Eleven and 70/100 dollars ($4,242,911.70) plus accrued interest to the date of delivery subject to the following terms and conditions: (1) The Bonds will have an MBIA insurance guaranty, with the MBIA insurance premium of approximately $120,000 to be.paid by the County. MAR 12 1980 MNICIPALMUNICIPAL NANCEBCOONSULTATION 42, PnE-91R Y y Coupon Coupon Maturity Amount Rate Maturity .Amount Rate 9/1/81 $ 35,000 8.75% 9/1/96 $ 115,000 8.400 9/1/82 40,000 8.75 9/1/97 125,000 8.50 9/1/83 45,000 8.75 9/1/98 135,000 8.50 9/1/84 45,000 8.75 9/1/99 145,000 -8.6o 9/1/85 50,000 8.75 9/1/00 16o,000 8.6o 9/1/86 55,000 8.75 9/1/01 175,000 8.70 9/1/87 55,000 8.75 9/1/02 190,000 8.70 9/1/88 60,000 8.75 9/1/03 210,000 8.70 9/1/89 65,000 8.75 9/1/04 230,000 8.70 9/1/90 70,000 8.75 9/1/05 250,000 8.70 9/1/91 75,000 8.00 9/1/06 275,000 8.75 9/1/92 85,000 8.10 9/1/07 295,000 8.75 9/1/93 90,000 8.15 9/1/08 325,000 8.75 9/1/94 _ 100,000 8.20 9/1/09 355,000 8.75 9/1/95 105,000 8.30 9/1/10 390,000 8.75 The Bonds shall be subject'to prior redemption in accordance with the Official Statement, a copy of which is hereby attached. We offer to pay the sum of Four Million Two Hundred Forty Two .Thousand Nine Hundred Eleven and 70/100 dollars ($4,242,911.70) plus accrued interest to the date of delivery subject to the following terms and conditions: (1) The Bonds will have an MBIA insurance guaranty, with the MBIA insurance premium of approximately $120,000 to be.paid by the County. MAR 12 1980 MNICIPALMUNICIPAL NANCEBCOONSULTATION 42, PnE-91R Y y March 12, 1980 Page 2 woK .42 PAGE 919 - (2) The County will name the Central Plaza. Bank & Trust of St. Petersburg, Florida as Paying Agent. (3) The County shall invest from the proceeds the sun of Dollars ( $ ,�ZcE /2j') in ani,. percent°° Certificate of Deposit to b� issued by a bank to be subsequently named by William R. Hough & Co. and to mature ten (10) years from date of purchase. Such Certificate will be cancellable only if necessary to prevent a default on the Bonds. In such case, it will be redeemable by the County without penalty. (4) The Bonds will be accompanied at delivery by the unqualified legal opinion of Messrs. Freeman, Ricardson, Watson, Slade, Kelly & Livermore, Jacksonville; Florida. (5) The County agrees to pay all expenses of the issuance of the Bonds excluding the travel and communication expenses of William R. Hough & Co. The expenses to be paid by the County include Bond Counsel fee, Bond Counsel expenses, County Attorney's fees, Bond Printing, Bond Ratings, preparation and printing of Official Statement, Validation and Closing costs. (6) The obligation of William R. Hough & Co. to take delivery of the Bonds is further subject to the following: (i) no decision by a court of the United States or the tax court of the United States shall have been rendered, or a sling, regulation (final, temporary or proposed), or official statement by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made, or legislation shall have been enacted by or favorably reported to either the House of Representatives or the Senate of the United States with respect to Federal taxation upon revenues or other income of the general character derived by the County or upon interest received on the Bonds of the general character of the Bonds, which in the opinion of the undersigned, materially affects the market price of the Bonds, or (ii) there shall have been a declaration of war by the Gover-anent of the United States, or there shall have occurred a general suspension of trading on the New York Stock Exchange or the declaration of a general barking moratorium by the United States or New York State Authorities. (7) The County agrees to receive recommendations for investment in Certificates of Deposit of the bond proceeds not immediately required for disbursement, provided however, that the yield on said Certificates shall be acceptable to the County. (8) William R. Hough & Co. will provide within 24 hours of the acceptance of this proposal a good faith check in the amount of Thirty Thousand 'Doll ' ars ($30,000) to be held_ uncashed and applied to the purchase price of the onds or which is to be retained as full and liquidated damages by the County in the event that William R. Hough & Co., through its own fault, does not perform under the terms and conditions of this Purchase Proposal. If the County is unable to deliver the Bonds pursuant to the terns of this Proposal within thirty (30) days, then the County shall, at that time, return the good faith check to William R. Hough & Co. Respectfully submitted, WILLIAM R. 14DUGH & CO. orge T. �'a'nd" The -TIC excluding cost of MBIA Insurance = 8.922692 The TIC including cost of MBIA Insurance = 9.2+1808 CHAIRMAN SEIBERT ANNOUNCED THAT HE WISHED TO SET UP A MEETING WITH CHARLES SWALLOWS IN REGARD TO THE 201 HEARING AT 10:00 O'CLOCK A.M. ON WEDNESDAY, MARCH 26TH, AND COMMISSIONERS LYONS AND WODTKE STATED THAT THEY WOULD ATTEND. ATTORNEY COLLINS SUGGESTED THAT THE SECOND AGENDA ITEM IN REGARD TO UTILITY IMPACT FEES BE CARRIED OVER UNTIL THE NEXT REGULAR MEETING, AND THE BOARD AGREED. THERE BEING NO FURTHER BUSINESS, ON MOTION MADE, SECONDED AND CARRIED, THE BOARD ADJOURNED AT 12:15 O'CLOCK P.M. ATTEST: CLERK CHAIRMAN 21 MAR 12 X980 moK 42 PAGE 9TO