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HomeMy WebLinkAbout4/27/1989Thursday, April 27, 1989 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, April 27, 1989, at 10:00 o'clock A.M. Present were Gary C. Wheeler, Chairman; Carolyn K. Eggert, Vice Chairman; Richard N. Bird; Margaret C. Bowman; and Don C. Scurlock, Jr. Also present were James E. Chandler, County Administrator; Charles P. Vitunac, Attorney to the Board of County Commissioners; Joseph Baird, OMB Director; and Virginia Hargreaves, Deputy Clerk. Chairman Wheeler called the meeting to order and announced that the only item on the agenda is a Resolution authorizing the execution and delivery of a bond purchase agreement for the sale and award of $6,510,000 Water and'Sewer Revenue Refunding Bonds, Series 1989, and he asked Board Administrative Assistant Liz Forlani to read the Resolution title, which she read aloud as follows: APR 2 7 1989Li A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT FOR THE SALE AND AWARD OF $6,510,000 AGGREGATE PRINCIPAL AMOUNT OF WATER AND SEWER REVENUE REFUNDING•BONDS, SERIES 1989, OF INDIAN RIVER COUNTY, FLORIDA, AT PRIVATE SALE BY NEGOTIATION, TO THE PURCHASER THEREOF; AUTHORIZING AND APPROVING CERTAIN TERMS OF SAID BONDS; RATIFYING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT; AUTHORIZING THE EXECUTION AND DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE MARKETING OF SAID BONDS; AUTHORIZING ALL OTHER NECESSARY, DESIRABLE AND/OR APPROPRIATE ACTIONS IN CONNECTION WITH THE ISSUANCE AND DELIVERY OF SAID BONDS; APPOINTING A PAYING AGENT AND BOND REGISTRAR FOR SAID BONDS; AUTHORIZING THE PURCHASE, REDEMPTION AND RETIREMENT OF CERTAIN BONDS*OF THE COUNTY; AUTHORIZING ALL NECESSARY, DESIRABLE AND/OR APPROPRIATE ACTIONS IN CONNECTION THEREWITH; AND SPECIFYING THE EFFECTIVE DATE HEREOF. BOOK FAGC 71 APR 2 1989 ROOK 6 PAGE 719 County Attorney Vitunac introduced County Financial Advisor Art Diamond and asked him to bring us up to date re the activi- ties in the refinancing the County is undertaking. He noted that this is one of the most complicated issues the County has ever done, and it was still hanging in the balance as late as last week. Financial Advisor Diamond explained that about 1I years ago FmHA came out with a program that enabled agencies with outstanding loans to buy them back at a discount. This oppor- tunity was explored by the County at that time, but met with resistance from the FmHA on the local level to the extent that it was not felt it was wise to continue to try to take advantage of it at that time. The County has been trying to get out from under FmHA supervision. The Resolution FmI-IA has installed with regard to the water and wastewater system is restrictive and would hamper the expansion and improvement of the system as the county grows. He continued that the same program was reoffered earlier this year, at which point the County again indicated to FmHA that they wanted to take advantage of the program, but again met with some resistance. Mr. Diamond did not really understand the basis of that resistance. He noted that the County at that point decided to p.tess onwards and what the Board sees today is the culmination of the -efforts of many people, plus staff and consultants, and what they have done is refinance the first 4 loans the County has taken with FmHA. Mr. Diamond advised that there are 4 main advantages to this refinancing. We have replaced the outstanding debt on the four loans, which amounted to about 8.8 million, with a debt of 6.5 million. The annual debt service has stayed the same; however, we have shortened the term from 40 year loans down to 30 year loans, and that represents a significant savings with regard to total debt service. In addition, approximately $839,000 in cash was released up front by this refinancing; and $650,000 of that will go to fund the debt service reserve for the Gifford issue 2 which becomes due December, 1990, leaving approximately $139,000 to improve the County's immediate cash position. Next, and probably most important, we have, in effect, installed a new underlying Bond Resolution which in many ways is much more flexible and much less restrictive and will allow the County to grow and expand their system. Mr. Diamond explained that it is common practice to require more restrictions on issues for new systems which have no credit standing in the marketplace. Commissioner Scurlock wished to have on record just where the credit is due for all this because he did not believe the Commission is fully aware what a critical situation we faced in the last 3 to 4 months. He explained that what FmHA said to us was that they originally gave us a commitment to loan 9.2 million for the Gifford sewer project, and this Commission went out and sold that to the Gifford Community by saying that we would be able to stabilize rates if we could expand into the community, pave roads, etc. FmHA then said we now had demonstrated an ability to go to the commercial market. So, our financial people, along with Utilities Director Pinto, went to FmHA and negotiated that if we could demonstrate to them that by going to the commercial market there would be a significant rate increase that would negatively impact our lower income community, then we still would be eligible for the program. Because of this whole group, Joe Baird and others doing a lot of work, we finally got a letter stating that we have demonstrated that we are still eligible. Commissioner Scurlock stressed that they all tried to do this very quietly so that it did not get in the Press and upset anyone because if this team was not successful, we would have been looking at going to the commercial market and he believed we would have been looking at a significant rate increase. Although no one is here from the public to hear all this, he wished to congratulate our staff and have it on the record that Joe Baird, 3 APR 2 7 1989 POOK F7 6 FADE 720 APR 27 1989 BOOK 76 PGE 721. Charlie Vitunac, Jim Chandler, Terry Pinto, and this group here, solved a very big problem for us in a very quiet way. Commissioner Scurlock went on to explain how you have to continue to demonstrate need in order to prove your eligibility to FmHA and how staff negotiated FmHA down to where we could prove our eligibility if we could demonstrate going to the commercial market would necessitate a 15% increase in rates when at first they had required that we show it would cause a 25% increase. Financial Advisor Art Diamond introduced Arthur Ziev of Gulfstream Financial Associates to go over the details of the sale of the bonds, which was done at a very favorable rate to the county. Mr. Ziev thanked Commissioner Scurlock for his compliments and confirmed that the team spent long hours and did a lot of hard work to accomplish this. He then informed the Board of the problems in getting the insurance for this issue, and described how he, Director Pinto and Director Baird, had to spend a great deal of time on the phone with FGIC and at the last minute finally received the insurance commitment. Mr. Ziev next reviewed the technicalities of going into the market yesterday and repricing the bonds when the market moved a bit. He advised that usually underwriters want to lower the price so the yield goes up, but they did the reverse and that repricing actually saved another 11 basis points to the county. He advised that the exact size of the issue is $6,510,000, and 5.9 million will be used to pay off the FmHA loan. Mr. Ziev again wished to commend staff on their incredible job in managing to get this through. Commissioner Bird, simply out of curiosity, wished to be informed about the issuance cost and how it is divided up. Commissioner Scurlock noted that we require them to itemize those costs. J 11 Mr. Ziev advised that Gulfstream indicated they would be doing the transaction for a maximum fee of $17.50 per thousand dollar bond, and the final fee negotiated was $16.75 per bond. Mr. Ziev then reviewed in detail how they pay their counsel, the management fee and various other fees, plus expenses and risk, all of which totals to $109,042 which goes to Gulfstream and their attorneys. He stated that he personally has been working on this for a year and a half and felt their fees are reasonable. OMB Director Baird further explained the issuance costs which total up to $79,000. These costs include our Financial Advisor, whose fee will be roughly $19,000. He is paid based on the size of the bond issue, and it has to be over 5 million for him to be paid. For all the other issues he worked on, he just received expenses. Bond Counsel has been working on this with us for probably over 2Z years, and they receive $35,000. Director Baird listed the various other costs, including printing costs, ratings costs, the Paying Agent, etc., which add up to the $79,000, and advised that the insurance premium is roughly $112,000. Commissioner Scurlock believed these costs are a little higher than usual because it is a negotiated situation as opposed to a bid, and Director Baird noted that there is another factor. The Library issue, for instance, will cost a lot less because the term is a lot shorter. If you match our costs with those that other counties experience, he believed we are well within range. Commissioner Bird noted that, in other words, the major costs are $109,000 to Gulfstream, $79,000 issuance expenses, which include our Financial Advisor and Bond Counsel, and $112,000 insurance. Director Baird agreed and pointed out that we had a considerable savings on insurance between going non -rated and a Triple "A" rating. Over the life of the bond, we saved more than half a million based on that. 5 APR 21 1989 BOOK 6 PAGE 122 APP 2 1 1989 BOOK 76 PAGE 723 Charles Sieck, Bond Counsel, came before the Board to review the proposed Resolution, which he explained awards the bonds to Gulfstream and authorizes County officials to execute all necessary documents. It also authorizesretirement of the bonds held by FmHA at this designated price. ON MOTION BY Commissioner Eggert, SECONDED by Com- missioner Bowman, the Board unanimously adopted Resolution 89-42 authorizing sale and award of $6,510,000 Water and Sewer Revenue Refunding Bonds, etc. RESOLUTION NO. 89 - 42 A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT FOR THE SALE AND AWARD OF $6,510,000 AGGREGATE PRINCIPAL AMOUNT OF WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 1989, OF INDIAN RIVER COUNTY, FLORIDA, AT PRIVATE SALE BY NEGOTIATION, TO THE PURCHASER THEREOF; AUTHORIZING AND APPROVING CERTAIN TERMS OF SAID BONDS; RATIFYING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT; AUTHORIZING THE EXECUTION AND DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE MARKETING OF SAID BONDS; AUTHORIZING ALL OTHER NECESSARY, DESIRABLE AND/OR APPROPRIATE ACTIONS IN CONNECTION WITH THE ISSUANCE AND DELIVERY OF SAID BONDS; APPOINTING A PAYING AGENT AND BOND REGISTRAR FOR SAID BONDS; AUTHORIZING THE PURCHASE, REDEMPTION AND RETIREMENT OF CERTAIN BONDS OF THE COUNTY; AUTHORIZING ALL NECESSARY, DESIRABLE AND/OR APPROPRIATE ACTIONS IN CONNECTION THEREWITH; AND SPECIFYING THE EFFECTIVE DATE HEREOF. WHEREAS, the Board of County Commissioners of Indian River County, Florida (the "Board" and the "County", respectively), by Resolution No. 89-19, duly adopted on February 14, 1989, heretofore authorized the issuance of Water and Sewer Revenue Refunding Bonds, Series 1989, of the County in an aggregate principal amount not to exceed $7,500,000 (the "Bonds"); 6 WHEREAS, the County deems it in its long term best interest that the Bonds be sold at this time at private sale by negotiation; WHEREAS, it is necessary and desirable to authorize and approve certain terms and provisions with respect to the Bonds and the sale thereof; WHEREAS, the County desires to appoint a Paying Agent and Bond Registrar for the Bonds, to ratify the distribution of a Preliminary Official Statement and to authorize the execution and distribution of an Official Statement therefor; WHEREAS, Gulfstream Financial Associates, Inc., as manager (the "Purchaser"), has offered to purchase the Bonds on the terms and conditions hereinafter described; and WHEREAS, it is necessary and desirable to authorize the purchase, redemption and retirement of certain outstanding bonds of the County. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA: SECTION 1. The Bondb_shall be in the aggregate principal amount of $6,510,000, shall be dated as of April 15, 1989, shall be in fully registered form, shall be in denominations of $5,000 or any integral multiple thereof, shall bear interest payable semiannually on May 1 and November 1 of each year, commencing November 1, 1989, until the principal amount thereof is paid, by check mailed by the Paying Agent to the Registered Owner thereof at his address as the same appear on the registration books kept by the Bond. Registrar on behalf of the County at 5:00 p.m. local time at the location of the Bond Registrar on the fifteenth (15th) day of the month immediately preceding the applicable interest payment date, at the interest rates per annum set forth in the Preliminary Official Statement hereinafter referred to, shall mature on May 1 of the years and in the principal amounts set forth in the Preliminary Official Statement and shall be subject to optional and mandatory redemption as set forth in the Preliminary Official Statement. APR 2 ri 1989 7 LOOK 76 FAu. °72 4 Pr" APR 2 7 1989 COOK. i PAGE 725 SECTION 2. Florida National Bank, St. Petersburg, Florida, is hereby appointed Paying Agent and Bond Registrar for the Bonds. SECTION 3. The Bonds are hereby awarded and sold to the Purchaser at a total price of $6,367,357.50 plus accrued interest from April 15, 1989 to the date of delivery thereof. The Bond Purchase Agreement dated April 27, 1989 by and between the Purchaser and the County, in the form attached hereto as Exhibit "A" (the "Bond Purchase Agreement"), is hereby approved and accepted and the proper officers_of the County are authorized and directed to execute the acceptance thereof in the space provided therefor on the Bond Purchase Agreement. SECTION 4. The Preliminary Official Statement with respect to the Bonds, in the form attached hereto as Exhibit "B" (the "Preliminary Official Statement"), is hereby approved and ratified by the County, and the County hereby approves and ratifies the use by the Purchaser of the Preliminary Official Statement in connection with the sale and public re -offering of the Bonds. The Official Statement with respect to the Bonds, in substantially the form of the Preliminary Official Statement, with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Chairman of the Board prior to the execution thereof (the "Official Statement"), is hereby approved by the County and the proper officers of the County are hereby authorized to execute the Official Statement and to deliver the same to the Purchaser for use by it in connection with the sale and distributionof the Bonds, the necessity and/or desirability and approval of any such omissions, insertions and variations as may be reflected in the Official Statement shall be conclusively presumed by such execution and delivery. SECTION 5. The proper officers of this County are hereby authorized and directed to execute the Bonds, when prepared, by manual or facsimile signatures, and to deliver the same to the Purchaser upon payment of the purchase price without further authority from the Board.. The Chairman, the Vice -Chairman and the 8 Clerk of the Board and the proper officers of the County are each hereby authorized to take all other actions on behalf of the County as may be necessary, desirable and/or appropriate in connection with the sale, issuance and delivery of the Bonds, including without limitation to execute and deliver any and all documents and instruments on behalf of the County. SECTION 6. It is hereby found, ascertained, determined and declared by the Board that a negotiated sale of the Bonds is in the long term best interest of the County. SECTION 7. In compliance with Subsection 218.385(4), Florida Statutes, as amended, there has been provided to the County, prior to the adoption of this Resolution, a disclosure statement containing the information required by paragraphs (a) through (g) of said Subsection 218.385(4). A copy of said disclosure statement is attached hereto as Exhibit "C". SECTION 8. The proper officers of the County are hereby authorized and directed to execute and deliver on behalf of the County an Investment Certificate, in order to comply with certain provisions of the Internal Revefiue Code of 1986, as amended, with respect to the Bonds. The Chairman of the Board and the County Attorney are each designated agents of the County in connection ,with the execution and delivery of said Investment Certificate, and are authorized and empowered, collectively or individually, to take all other actions as may be necessary or appropriate to execute and deliver the same. SECTION 9. The purchase, redemption and retirement of the outstanding Original Bonds, as defined in Resolution No. 89-19, pursuant to and as more fully described in the letter dated January 10, 1989 to the County from the Government, as defined in Resolution 89-19, is hereby authorized, the price thereof less deposit plus accrued interest through May 4, 1989 being approximately $5,487,678.47. The Chairman, the Vice -Chairman and the Clerk of the Board and the proper officers of the County are each hereby authorized to take all actions on behalf of the County as may be necessary, desirable and/or appropriate in connection APR 2 7 1989 9 eoaK 76 PAGE 726 Fr - APR APR 2 7 1989 Boor 76 PGE 727 with the purchase, redemption and retirement of the Original Bonds, including without limitation to execute and deliver any and all documents and instruments on behalf of the County. SECTION 10. This Resolution shall take effect immediately upon its adoption. The foregoing resolution was offered by Commissioner Eggert who moved for its adoption. The motion was seconded by Commissioner Bowman and, upon being put to a vote, the vote was as follows: Chairman Gary C. Wheeler Aye Vice Chairman Carolyn K. Eggert Aye Commissioner Don C. Scurlock Aye Commissioner Richard N. Bird Aye Commissioner Margaret C. Bowman Aye The Chairman thereupon declared the Resolution duly passed and adopted this 27th day of April , 1989. 1 I1 (SEAL) Attest: ON. Y�/krra BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA BY: ,Yof Gary C./Wheeler, Chairm There being no further business, on Motion duly made, seconded and carried, the Board unanimously adjourned at 10:30 o'clock A.M. ATTEST: Clerk 10 IMP