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HomeMy WebLinkAbout12/23/1982Thursday, December 23, 1982 The Board of County Commissioners of Indian River County, Florida, met in Special Session at the County Commission Chambers, 1840 25th Street, Vero Beach, Florida, on Thursday, December 23, 1982, at 11:00 o'clock A.M. Present were Don C. Scurlock, Jr., Chairman; Dick Bird; and William C. Wodtke, Jr. Absent were Vice Chairman Alfred Grover Fletcher and Patrick B. Lyons, who were out of town. Also present were Michael J. Wright, County Administrator; Gary Brandenburg, Attorney to the Board of County Commissioners; Finance Director, Jeffrey K. Barton; and Virginia Hargreaves, Deputy Clerk. The Chairman called the meeting to order and led the Pledge of Allegiance to the Flag. RAMPMASTER INDUSTRIAL DEVELOPMENT BONDS CLOSING DOCUMENTS Attorney Brandenburg reviewed the following memo: TO: Members of the DATE: FILE: December 22, 1982 Board of County Commissioners SUBJECT: Rampmaster Industrial Development Revenue Bonds Series 1982 in the Amount of $850,000 FROM: Gary M. Brandenburg REFERENCES: County Attorney. The closing for this bond issue is scheduled for December 29, 1982, in Ft. Lauderdale. The issue will close into escrow awaiting the expiration of the appeal period on January 3, 1983. On December 29th I will be in Jacksonville closing the $2.7 million water and sewer revenue issue along with the Chairman and Administrator and will not be able to attend the Lauderdale closing. The Rampmaster closing will be handled by our bond counsel specifically Peter Dame of Freeman, Richardson, Watson and Kelly, P.A.. All closing instruments must be executed by the County in advance and delivered to our bond counsel in trust until the closing. Attached to this memorandum for your review are the following documents (to save on Xerox costs the majority of the documents have not been included in your backup but are available for review in the Commission office) . to 465 DEC 2 3 198 DEC 2 31982 1. A resolution fixing the maturity and interest payment dates for a $850,000 Industrial Development Revenue Bond Series 1982 (Rampmaster Project), of Indian River County, Florida; awarding the bond at negotiated sale to the purchaser; and providing an effective date. 2. Loan Agreement, Mortgage and Security Agreement between In River County and the Davises together with extra signature pages. 3. Bond Purchase Agreement between Barnett Bank, Indian River County, the Davises and Rampmaster, Inc.. 4. The Bond in the amount of $850,000. 5. Officers Certificate. 6. Arbitrage Certificate (executed by the Davises only). 7. UCC Financing Statement; (a) for the Bank, (b) for the County. , 8. Mortgage and Security Agreement with extra signature sheets. 9. Guaranty Agreement; Rampmaster, Inc. to Indian River County with extra signature pages. 10. Guaranty Agreement; Davises as individuals to Indian River County with extra signature pages. 11. Escrow Agreement 12. Assigment of Mortgage between Indian River County and Barnett Bank Also available in my office for your review are the following documents which will be used at closing: (a) Closing memorandum (b) Certificate regarding project (c) Promissory note (d) Certificate designating authorized representative and making certifications required by Section 4 (i) of Bond Purchase Agreement. (e) Certificate required by Section 4 (j) of Bond Purchase Agreement. To proceed in this closing will require County Commission's authorization for the Chairman to execute the above referenced documents in the appropriate places and such other documents as are required to successfully close the issue and authorization for the County Attorney's Office to deliver the instruments in escrow to our bond counsel for the closing on the'29th. Respectfully submitted, y Brandenbur GMB/mg 2 �I Attorney Brandenburg noted that there is a specific proviso that none of the above documents will be changed without checking with him in Jacksonville for approval. Commissioner Tlodtke's only question was to be assured any cost involved will be paid for by Rampmaster. Attorney Brandenburg explained that all closing costs will be figured in as expenses for Rampmaster at closing; the County does not incur any direct costs at all - our bond counsel expense is also included as a cost at closing. He noted that the County already has collected the application fee from Rampmaster. Commissioner Bird asked if we have some protection in these documents whereby Rampmaster is mandated to do this if we issue the bonds; in other words, they cannot go somewhere else and develop. Attorney Brandenburg confirmed that is not possible; he noted that their plant is already built, and there is a mortgage on the specific property. ON MOTION by Commissioner Wodtke, SECONDED by Commissioner Bird, Commissioners Fletcher and Lyons being absent, the Board by a 3 to 0 vote adopted Resolution 82-140 authorizing the Chairman to sign all the documents listed in the memo dated December 22, 1982, and the Attorney to deliver same to bond counsel. ON MOTION by Commissioner Bird, SECONDED by Commissioner Wodtke, Commissioners Fletcher and Lyons being absent, the Board by a 3 to 0 vote authorized the Chairman to sign any additional documents relating to the Rampmaster Industrial Bond closing that might be required but inadvertently might have been overlooked. DEC 231982 3 c 52 7 RESOLUTION NO.. 82-140 A RESOLUTION FIXING THE MATURITY AND INTEREST PAYMENT DATES FOR AN $850,000 INDUSTRIAL DEVELOP- MENT REVENUE BOND, SERIES 1982 (RAMPMASTER PROJECT), OF INDIAN RIVER COUNTY, FLORIDA; AWARDING THE BOND AT NEG07IATED SALE TO THE PURCHASER; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, a resolution (hereinafter called "Resolution") of the Board of County Commissioners (hereinafter called "Governing Body") of Indian River County, Florida (hereinafter called "Issuer"), duly adopted on November 3, 1982, authorized the issuance of not exceeding $850,000' Industrial Development Revenue Bonds, Series 1982 (Rampmaster Project), hereinafter called "Bonds," to provide for the acquisition and construction of a capital project in the area of the Issuer; and WHEREAS, the Bonds were validated and confirmed by final judgment of the Circuit Court, Nineteenth Judicial Circuit, in and for Indian River County, Florida, and the appeal period will expire midnight, January 3, 1983; and WHEREAS, Barnett Bank of South Florida, N.A., Miami, Florida (hereinafter called "Purchaser"), has offered to purchase the Bonds at the price of .par, pursuant to the remaining terms of the Bond Purchase Agreement attached hereto as Exhibit A (hereinafter called "Bond Purchase Agreement"); and WHEREAS, industrial development revenue bonds are tradi- tionally sold on a negotiated basis and, consequently, a com- petitive sale of the Bonds would in all probability not produce better terms than a negotiated sale, particularly in view of the timing of such an offering and the current instability of the bond market; and WHEREAS, the Bonds are payable from the proceeds of the Loan Agreement, Mortgage and Security Agreement, as defined in the Resolution, and, therefore, the Issuer does not have a direct interest in the terms of sale and the Proprietor, as defined in the Resolution, has expressed its unwillingness to undertake the risks and expenses attendant to a public sale of the Bonds; and WHEREAS, the complex nature of the security for payment of the Bonds requires a lengthy review of the credit of the Proprietor which would be financially impractical for bidders to undertake in a competitive sale context; and WHEREAS, the Governing Body deems it necessary and desirable at this time to fix the maturity and interest payment dates for the Bonds, and to award the Bonds at negotiated sale to the Purchaser, subject to the condition subsequent of an appeal being taken from the validation proceeding for the Bonds within the time prescribed by law; now, therefore, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA: SECTION 1. REMAINING FISCAL DETAILS FOR BONDS. The Bonds shall bear interest payable on February 1, .1083, the first day of each month thereafter, and at maturity; and shall mature on December 28, 1992. SECTION 2. AWARD OF BONDS. The Bonds, in the form of a single, fully registered Bond, are hereby awarded and sold to Barnett Bank of South Florida, N.A., Miami, Florida, at the price of par and upon the remaining terms and conditions of the Bond ORIGINAL RESOLUTION AND CLOSING DOCUMENTS WILL BE PUT ON FILE IN THE OFFICE OF THE CLERK _ WHEN RECEIVED. _ 2.75 MILLION WATER & SEWER REVENUE BOND AWARD County Administrator Wright announced that the second agenda item related to the proposed issuance of 2.7 million in Water and Sewer Revenue Bonds Anticipation Notes as explained in the following memo from Attorney Brandenburg: TO: Members of the DATE. December '22, 1982.FILE: Board of County Commissioners SUBJECT: $2.75 million Indian River County Florida Water and Sewer Revenue Bonds Series 1982 Anticipation Notes FROM: Gary M. Brandenburg REFERENCES: County Attorney The $2.75 million note issue will be closed in Jacksonville, Florida on the 30th of December, 1982. A pre-closing will occur on the 29th of December which will have in attendance our bond counsel, Chairman of the Board of County Commissioners, County Administrator and myself. In order to proceed to closing it will be necessary to adopt the attached resolution entitled Resolution Authorizing the Issuance of Not Exceeding $2,750,000 Water and Sewer Revenue Bond Series 1982, Anticipation Notes of Indian River County, Florida; Providing for the Payment Thereof and Entering into Certain Covenants and Agreements with the Holders Thereof; Awarding the Notes to the Purchaser at Private Sale; and Providing an Effective Date. The resolution has attached as an exhibit the escrow agreement. it will also be necessary for the Board to authorize the Chairman to sign any and all necessary documents to close the transaction and for this office to deliver the documents. You will note that the paying agent and trustee for the notes must be inserted on Pages 3 and 9 of the resolution and the purchase price for the notes inserted on Page 11. Resper dully.4sub itted, ry Brandenbur Stan Livingood of Arch W. Roberts & Co. came before the Board to review the background of this bond issue, noting that Phase 1 includes the purchase of Ixora and Treasure Coast Utilities, the reimbursement of costs the County incurred when operating them in the hiatus, and the cost U E C 4 3 1982 -52 ?w 469 I DEC 2 31992ur 7 overrun for the South County project; Phase 2 deals with construction of mains to transport water to the developments served by Treasure Coast and Ixora Utilities as required by the DER mandate; and Phase 3, which has not been totally defined, concerns expansion of the South County water facility, possibly in the form of greater capacity, additional wells, etc., or substantial extension of distribution mains in the South County area. ' Commissioner Wodtke asked if the cost overrun is actually an overrun or whether it is due to increasing the capacity of the plant. Mr. Livingood agreed that was a misnomer. He believed the bids exceeded the funds available by $426,000; in order to proceed and enter into the contracts at that time, the County pledged other legally available funds, and FmHA subsequently agreed to include the reimbursement of those funds. Mr. Livingood then explained that the bond issue must be able to do the following: (1) pay the costs of phases 1, 2 and 3,' (2) pay the interest on the notes through May 1, 1984, and (3) pay the issue expenses and the underwriting discount of issuing the notes. This total exceeds the 2.7; so, they are counting on interest income on some of the proceeds of the financing to generate the additional dollars needed. This is covered in their proposal. Mr. Livingood commented that Finance Director Barton has come up with a proposal to generate these funds through interest income, which is totally comparable with his firm's proposal so they have decided to delete theirs. Administrator Wright clarified that we are going to get roughly $900,000 on closing back into the General Fund, and the 1.7 million or so that is left over will be spread out 5 in investments which will mature at times that will coincide with when we need to spend the money. Discussion followed regarding the investment underwriting expenses listed in Schedule A of Mr. Livingood's letter of December 30th and those listed in Schedule A of the Purchase Agreement. Mr. Livingood explained that Schedule A attached to the Purchase Agreement has three items totaling $3,560. The Schedule A on the Disclosure statement omitted the third item relating to courier pickup and delivery, which should have been included and added to the $7,940 estimated underwriting expense. He noted that the primary purpose of this estimated underwriting expense statement is to comply with the Florida State law which requires the underwriter to provide a schedule of estimated expenses that specifically does not include any finder's fee. The three items on the Purchase Agreement Schedule A should be duplicated in the estimated underwriting expenses on the disclosure statement. Those additional underwriting expenses on the disclosure are, of course, paid from the discount. Discussion ensued as to how much the county pays and how much the underwriter absorbs, and Mr. Livingood stated that of the total underwriting expenses ($8,690), $3,560 will be reimbursed by the County, and the balance will come out of their spread. It was felt it would be better if these figures were spelled out in schedules designated with different letters, and Mr. Livingood agreed this would be done. Mr. Livingood next discussed escrowing 1 million until 1984 as security for those who purchase the notes, noting that the best security would be if the County had the FmHA commitment right now, but they do not have that FmHA Guide lA Commitment Letter and cannot afford to wait for it until March of 1984. FmHA has made a preliminary commitment and 31 DEC 2 3 1982 p� . 71 .1 52 it is everyone's reasonable expectation that the Guide lA Letter will be received in 1984, but a purchaser is looking at today in terms of security. Mr. Livingood informed the Board that they have an engineering report that projects future net revenues of the system through 1987, and they have set up an escrow agreement whereby the County is free to draw down on funds received from sale of -the notes up to the amount necessary to assure that in 1984 there is one million remaining in the constructions funds. As soon as the FmHA Guide lA Letter is received, the one million in escrow will be released and can be used to complete phase 3 of the construction. Commissioner Wodtke asked if we could borrow against that escrow, and Mr. Livingood did not believe so. He noted that the one million is essentially the cost of Phase 3 of the project, and the county will not be incurring costs for that phase until after receipt of that letter. Commissioner Bird asked if we are under commitment to that one million dollar expansion, and Administrator Wright stated that philosophically he believed the Board is committed to expanding to handle the needs of the South County and the decision will have to be made early next year which way we want to go - whether we want to expand the lines and then use the impact fees to expand the plant, or expand the plant, etc. Discussion ensued about expanding the customer base and as to any commercial activity in the area that could be tied into the system. The possibility of the City transferring some allocation from where we are relieving them in the south was brought up, and the Chairman noted that City Manager Little indicated they might consider a transfer of that allocation to the Hospital area. Mr. Livingood then discussed the purchase proposal made by Arch W. Roberts & Co. stating that they are proposing 7 that the notes bear a coupon of 84% and they will purchase from the County at 98% of par with a 1985 maturity. He believed that what they are proposing represents essentially the best that is available in the market, and explained that the 2% discount they are proposing is higher than the 14% they proposed for the 5 million issue they purchased in 1981 because this is not a totally secured situation and the buyer is looking at a market risk; also market conditions have changed some. Discussion continued in regard to negotiating the 2%, and Administrator Wright informed the Board that Mr. Livingood has learned that the securities he can provide for the County will generate essentially an additional $2,000 more than Mr. Barton's proposal. The Administrator agreed that if we buy the securities from Mr. Livingood, he gets a fee while if Mr. Barton handles this, there is no fee, but if we buy the securities through Mr. Livingood, he might be willing to accept a lower discount. He asked Mr. Livingood if the securities amount he stated would mature in 1985 included his fee Mr. Livingood confirmed that it includes the fee. He stated that their investment proposal would meet all the requirements of the financing, i.e., pay the interest through May 1, 1984; pay all the construction draws, reimburse the County $881,500; pay issuance expenses and discounts; and produce on September 1, 1984, not one million dollars, but $1,063,955. After further negotiations, Mr. Livingood agreed that if his firm provides the securities, he would agree to a 1-3/4% discount and they would guarantee to meet all the financing requirements and produce $1,063,955 on September 1, 1984. ON MOTION by Commissioner Wodtke, SECONDED by Commissioner Bird, Commissioners Fletcher M soot FAIU 473 DEC 231982 and Lyons being absent, the Board by a 3 to 0 vote, approved the Purchase Agreement with Arch W. Roberts & The Leedy Corporation per the terms discussed and authorized the signa- ture of the Chairman. Said Purchase Agreement is on file in the Office of the Clerk. ON MOTION by Commissioner Wodtke, SECONDED by Commissioner Bird, Commissioners Fletcher and Lyons being absent, the Board:by a 3 to 0 vote, adopted Resolution 82-141: AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $2,750,000 WATER AND SEWER REVENUE BONDS, SERIES 1982, ANTICIPATION NOTES OF INDIAN RIVER COUNTY, FLORIDA; PROVIDING FOR THE PAYMENT THEREOF AND ENTERING INTO CERTAIN COVENANTS AND AGREEMENTS WITH THE HOLDERS THEREOF; AWARDING THE NOTES TO THE PURCHASER AT PRIVATE SALE; and PROVIDING AN EFFECTIVE DATE; and further designating First National Bank of Tampa, Florida, as Trustee. Said Resolution is on file in the Office of the Clerk. There being no further business, on Motion made, seconded and carried, the Board adjourned at 11:50 o'clock A.M. ATTEST: Clerk Chairman :7 �,