www.mymanatee.org
Manatee County Government Administrative Center Commission Chambers, First Floor 9:00 a.m. - October 21, 2014
October 21, 2014 - Regular Meeting
Agenda Item #55


Subject
Utility System Bond Issue

Briefings
None

Contact and/or Presenter Information
Jim Seuffert, Director Financial Management, ext. 3760


Action Requested

Authorize negotiations with underwriting team recommended in Paragraph 2 below to provide for financing for Utility system Capital projects and possible refinancing of certain portions of Manatee County bonded utility debt.



Enabling/Regulating Authority
F.S. 125


Background Discussion

The adopted Water and Wastewater Capital Improvement Program for FY 2015-2019 anticipates issuance of bonds to finance a portion of the 2015 water and wastewater projects.   Based on current low interest rates, staff believes that it is prudent to proceed with issuing bonds sooner rather than later.  In addition, there is the possibility of refinancing some of the currently outstanding utility bonds to produce savings of more than $1 million.  Staff, attorneys, the Clerk’s Office, and our Financial Advisor are working on a plan that would provide for the issuance of the bonds.

It is recommended that Ed Bulleit of MBS Capital, Financial Advisor for the Port and for the County, with support from County staff,  and legal counsel, be authorized to negotiate with the proposed underwriting team to accomplish the issuance.  The proposed underwriting team for this issue would be Wells Fargo/Harbor Financial (joint venture) as managing underwriter, and Citi. Underwriters have been chosen based on the efforts that they have made to date to provide creative suggestions relating to the special circumstances involved in this underwriting, and/or on the history of involvement on the part of their key personnel in previous successful county financings.

Generally, it is considered to be cost effective to refinance bonds if savings greater than 3% of the amount refinanced can be realized.  The most recent estimates indicate that the refinancing possibilities for the 2006 Utility  Bonds could yield savings of up to 7% or $1.3 million for the debt that would be refinanced.  

As details are developed, one or more Bond Resolutions will be presented to the County Commission for approval in the near future.  Your Financial Advisor, the Clerk of the Circuit Court, and County staff recommend that the bonds be issued as soon as possible to take advantage of the current market.  All documents will be reviewed and approved by Bond Counsel and the County Attorney prior to issuance of debt.

The FY14 CIP anticipated borrowing $25 million, but the decision was made not to borrow in FY14 and to combine that with the FY15 borrowing, estimated at $32 million. However, due to variables such as the unforeseen expenses for dam repairs, and the opportunity to lock in low interest rates the final amount to be borrowed could be higher. 

After discussions with underwriters, additional details will be provided to the BCC before final action is taken in the issuance of bonds.



County Attorney Review
Not Reviewed (No apparent legal issues)

Explanation of Other


Reviewing Attorney
N/A

Instructions to Board Records
None

Cost and Funds Source Account Number and Name
N/A

Amount and Frequency of Recurring Costs
N/A