|Manatee County Government Administrative Center Commission Chambers, First Floor 9:00 a.m. - February 12, 2013|
Agenda Item #36
Refinancing of Bonds
Contact and/or Presenter Information
Jim Seuffert, Director, Financial Management Dept, x 3760
Approval of Resolution R-13-036 authorizing issuance of Manatee County Revenue Refunding and Improvement Bonds, Series 2013, in an amount not to exceed $105 million.
Florida Constitution, Chapter 125 and Part VII, Chapter 159, Florida Statutes
On December 18, 2012, the County Commission authorized staff to begin the process to refund certain portions of outstanding bonded debt because current low interest rates offer an opportunity to realize significant savings by doing so.
Staff, attorneys, the Clerk’s Office, and our Financial Advisor have developed a plan that would provide for refinancing of portions of the 2004 Transportation Revenue Bonds, the 2004 Revenue Improvement Bonds, and the 2006 Revenue Improvement Bonds. The 2004 Transportation Bonds were used to finance a variety of road improvement projects, and the 2004 and 2006 Revenue Improvement Bonds were used to finance the Judicial Center and the Public Safety Building (EOC).
The proposed resolution will authorize the final steps necessary to issue the new bonds through the underwriting team that was approved on December 18, 2012. Ed Bulleit of MBS Capital, Financial Advisor for the County, with support from County staff and legal counsel will negotiate with the underwriting team to accomplish the pricing and other details of the refinancing. The proposed underwriting team approved for this issue would is Wells Fargo/Gardnyr Michael Capital (joint venture) as managing underwriter, and Citi.
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 plan for the 2004 Transportation Bonds could yield savings of up to 9.1%; for the 2004 and 2006 Revenue Bonds, combined savings of up to 7.25% could be realized.
Savings can be realized either through reducing future debt service costs, or by maintaining current debt service levels and taking “new money” out of the transaction. Due to our current financial circumstances, it is recommended that we select the latter alternative. New money from the transaction can be used to supplant and/or reimburse county capital improvement funds, and the county funds originally budgeted can then be freed up to be used for future budget stabilization needs.
The “not to exceed” figures shown in the resolution are set higher than the amounts that we actually expect to issue; this allows latitude in structuring bond details based on what is happening in the market. The resolution also sets parameters that guarantee certain levels of savings are realized – if those savings cannot be achieved, the bonds will not be issued. It is not unusual for edits and/or additions to bond documents to be made right up to the date of commission approval, so it may be necessary to provide updated versions of these documents after the agenda has been completed. Also, a letter will be provided by our Financial Advisor, Ed Bulleit of MBS Capital Markets, explaining the rationale for choosing to issue bonds via negotiated sale. All documents as well as any changes will be based on advice from Bond Counsel and the County Attorney.
County Attorney Review
Other (Requires explanation in field below)
Explanation of Other
Documents prepared by Steve Sanford, Bond Counsel and reviewed by William Clauge, County Attorney's Office.
Instructions to Board Records
Certified Copies of R-13-036 to County Attorney for delivery to Steve Sanford.
Return stamped copy of this agenda memorandum to William Clauge, County Attorney's Office and Jim Seuffert, Financial Management.
Cost and Funds Source Account Number and Name
Amount and Frequency of Recurring Costs
Attachment: #382944177v6_WPB_ - Escrow Deposit Agreement - Manatee County - Revenue Refunding Bonds, Series 2013-from Steve S.19JAN2013.pdf
Attachment: #382944575v10_WPB_ - Bond Resolution - 2013 Revenue Refunding Bonds - from Steve S.06FEB2013.pdf
Attachment: 207-00022.B2 Appendix B-from Jennifer LaRocco.05FEB2013.pdf
Attachment: 207-00022.C3 POS clean copy - from Jennifer LaRocco.07FEB2013.pdf
Attachment: 207-00022.E3 Purchase Contract for agenda-from Jennifer LaRocco.07FEB2013.pdf
Attachment: 382963691_v_2_Bond Counsel Opinion - Manatee County Revenue Refunding 2013-from Steve S.06FEB2013.pdf
Attachment: Financial Advisor Recommendation Letter - 2013 Rev Refunding Bonds.07FEB2013.pdf