MINUTES
OF MEETING
CORAL
SPRINGS
IMPROVEMENT
DISTRICT
The regular meeting of the
Board of Supervisors of the Coral Springs Improvement District was held on
Present and constituting a quorum
were:
Bob Fennell President
Sharon Zich Vice President
Glen Hanks Secretary
Also present were:
Dan Daly Interim Manager
Ed Goscicki Co-Manager –
Dennis Lyles District Counsel
Jane Early District Engineer –
CH2M-Hill
Shawn Skehan CH2M-Hill
Isabelo Rodriguez CH2M-Hill
Cedo DaSilva CH2M-Hill
Daniel Bohorquez CH2M-Hill
Kevin Mulshine Prager,
Sealy & Company
Denise Ganz Ruden, McClosky, et.
al.
John McKune District Capital Improvement
Coordinator
Doug Hyche CSID Utilities
Director
Randy Frederick CSID
Drainage Supervisor
Jim Aversa Chief Operator –
Wastewater
Kay Woodward CSID Accountant
Jan Zilmer CSID Human
Resources
Dave Hulett Sunshine WCD
Supervisor
Craig Wrathell Wrathell,
Hart, Hunt & Associates
John Hart Wrathell, Hart,
Hunt & Associates
Bill Benson Keefe, McCullough
Numerous Residents
FIRST ORDER OF BUSINESS Roll
Call
Mr.
Goscicki called the meeting to order and called the roll.
Mr.
Goscicki introduced Mr. Hulett from the Sunshine Water Control District.
Mr.
Fennell stated welcome Mr. Hulett. We
are happy to have you here.
SECOND ORDER OF BUSINESS Approval of the Minutes of
the July 16, 2007 Meeting
Mr. Fennell stated each Board member
received a copy of the minutes of the
Ms. Zich stated are Ms. Woodward and
Mr. Zilmer Severn Trent Services employees?
Mr. Daly responded no, they are CSID
employees
Mr. Fennell stated on page two, the
sentence halfway down the page should say, “The way we collect revenues is by
charging each household a certain amount of money for canal maintenance”, not
water. On page three, “$175,000” should
be “$75,000”.
Mr. Daly stated on pages 25 and 26,
“Mr. Hoffnagel” should be “Mr. Halperin”.
The next paragraph should say, “Most people use 100 gallons per day or
3,000 gallons per month per person”, not 2,000.
Mr. Hanks asked is the 2,000 gallons
per day in the sentence above correct?
Mr. Daly responded no, it should be
3,000 gallons.
On MOTION by Mr. Hanks seconded by Ms. Zich
with all in favor the minutes of the
THIRD ORDER OF BUSINESS Presentation of Keefe,
McCullough & Co., LLP Audit for Fiscal Year Ended
Mr.
Benson stated the Board members previously received copies of the audit. I looked at the financials for the prior year
and wanted to point out one or two items and answer any questions from the
supervisors. The table at the bottom of
page five of the financial statements, shows on a consolidated basis, the
entire District for the year. The right
two columns, Total Primary Government
show under Change in net asset a decrease of $611,178 versus
$102,507 last year. For the operations
of the District, you make a great deal of free cash flow. However, in recent years, you have been
taking those free cash flows into your Water Treatment Plant for refurbishment,
replacement and repairs. At a meeting of
the Board I attended last year, there was discussion about the upcoming bond
issue and the long range plan for the bond to provide the necessary capital. We will not be taking all our free cash flow
every single month and pouring it into repairs to keep the assets going.
On
the top of page 15 is the CASH FLOWS FROM OPERATING ACTIVITIES, which shows we
made $2,701,644 from operations. In
addition, we received grants of $498,416.
This means realistically on a month to month basis, we made $3.3
million. Then we paid off $1,340,000 in
bonds and put $2,062,485 into our Water Treatment Plant and paid interest of
$689,917. The good news is we made $3.3
million. The bad news is we spent
$4,092,402 for the Water Treatment Plant.
I think there is talk of going out and circulating bonds in order to
have the capital necessary to have a long range plan to protect the capital
assets and not taking our monthly cash flows and pouring it into the Water
Treatment Plant. You are along the lines
of where you need to be as a District.
Things are going well. Do the
supervisors have any questions? This is
your statement and you need to accept it so the District Manager can file it
with the appropriate governmental agencies.
Ms.
Zich stated this is August 20th and the audit says September 30th
of last year.
Mr.
Benson stated correct.
Ms.
Zich asked does it usually take a year to receive this report?
Mr.
Benson responded not in most instances.
Ms.
Zich asked what is the normal time to receive this report?
Mr.
Benson responded typically for a September 30 year end client, we are usually
in and out of the field before November and December and provide the annual
statement by January 31st.
Ms.
Zich stated we are receiving ours in August.
Mr.
Benson stated I can discuss this with you off the record.
Ms.
Zich stated I did many of these and I am amazed at the amount of time it took
to complete the audit.
Mr.
Goscicki stated you can expect to see a significant improvement in next year’s
financials.
Mr.
Benson stated this is a function of two things; a function of the auditing firm
and what they are auditing and how quickly information is provided.
Ms.
Zich asked were there many problems?
Mr.
Benson responded we had some issues, which we addressed with staff. I think they made some changes. I feel comfortable about the statement and there
being improvements in the future.
Ms.
Zich stated I was surprised to see the date of this audit.
Mr.
Daly stated Ms. Woodward our in-house CPA is with us today. We have one more month to go after this one
until year end.
Ms.
Zich asked when will we see the audit for this fiscal year?
Mr.
Daly responded as soon as our audit firm can get it out.
Mr.
Benson stated we will do all of the field work in the October through December
time frame. Therefore, I think it is
realistic to see a draft in January.
Last year, when we came in November or December, the documents were not available
and it took a considerable amount of time to obtain. We have gone through all of this in great
detail with staff and I feel comfortable going forward with them.
On
MOTION by Ms. Zich seconded by Mr. Hanks with all in favor the audit for fiscal
year ended
FOURTH ORDER OF BUSINESS Distribution of Proposed Water
and Sewer Budget for Fiscal Year 2008 and Consideration of Resolution 2007-9
Setting a Public Hearing
Mr.
Goscicki stated we distributed the proposed Water and Sewer Budget to the Board
in order to set the public hearing for the next meeting. Staff did a great deal of work in putting
this budget together. Mr. Daly in
particular, worked through the details with Mr. Hyche. This is probably a better budget than you
have had in quite some time in terms of the information and comfort we have
with it. It fits within the framework of
the overall revenue we are predicting with the rate increases. The debt coverage you will see projected in
the Engineer’s Report is consistent with this budget.
Mr.
Daly stated I want to give special thanks to Mr. Hyche and Mr. Zilmer and most
importantly Ms. Woodward for their assistance involving this budget. As far as wages, there was a 6% increase
across the board. Historically it has
come in much lower than the 6%. This is
one of the determinations made. I
provided to the Board a copy of an article published in July in the Sun
Sentinel showing a 4.4% cost of living increase in
Mr.
Fennell stated in the end, we will have to review all of the salaries.
Mr.
Daly stated there are a handful of employees who are maxed out. I am one of them as well as Mr. Zilmer who
will not receive any raise other than a cost of living increase. Last year, the pension was 9.8% of salary and
was approved with the idea the pension plan will be taken elsewhere. However, it remained at 6% even though it was
budgeted at 9.8%. This year, it was at 8%
for discussion purposes. Some employees
came back to us because they heard about the 9.8% pension. However, it turned out this was not the best
thing for us and we can go in this direction.
This will be a decrease from last year but an increase from last year’s actual.
Mr.
Fennell stated one of the issues we have going forward is the need to become
cost conscious. We just went through the
hurricane debris removal. We are no
longer in the position to where we have cash balances. It is going to have to be this way. We cannot take a 7% increase every year in
operating costs, which is what we have been doing. Hopefully we can decrease some of our costs
in water filtration.
Mr.
Daly stated the next increase will be in electricity.
Mr.
Fennell stated although at this point, the electricity costs are substantially
higher than last year. They were already
high last year.
Mr.
Daly stated if you want to put more new Water Treatment Plants online, it will
most likely raise the electricity cost, according to Mr. Hyche and Mr.
McKune. One of the high points is Mr.
Zilmer has been working with our Insurance Broker in regards to health
insurance. What was the original cost?
Mr.
Zilmer responded they came in with an increase of 18.8%. Every year we go through this. They are saying it is non negotiable. We bid the insurance out and received a good
plan from Blue Cross/Blue Shield for 80 cents more than what we are currently
paying. In the budget, there was a 15%
increase.
Ms.
Zich asked is it equivalent coverage?
Mr.
Zilmer responded it is actually better.
Mr.
Fennell asked are we approving this budget?
Mr.
Lyles responded you are approving it as a proposed budget and setting the
public hearing for September 17th.
Mr.
Fennell stated the only other issue I have is the interest from the State Board
funds, which we are projecting at 3%.
This always bothers me. Interest
earned from the money market account was 4%.
Mr.
Hanks asked are there any guarantees on the capital improvement costs for next
year?
Mr.
Daly responded I went to CH2M-Hill and asked them to provide an estimate on the
capital improvement costs. On the onset
of this capital improvement plan, they have to know what is going to be done
next. They should be able to produce a
number so as not to be two or three times higher later. In past years, there was a collection pot
with all of this extra engineering work and it is never accounted for. In this budget, I broke out Mr. McKune’s time
in a separate line item so it was not misconstrued as engineering work. We have an engineering firm who supplied me
with a number to put into the budget, which they feel is accurate at this point
in time.
Mr.
Goscicki stated the bulk of the engineering fees are not in this budget. They will be charged in the capital
improvement program for the bond financing.
Ms.
Zich asked is the Capital Projects Coordinator part of the capital program?
Mr.
Goscicki responded we will be charging this back against the bond proceeds but
we wanted to identify it separately in the Operating Budget.
Ms.
Zich asked is this an expense?
Mr.
Goscicki responded yes.
Ms.
Zich asked is it part of the project expense?
Mr.
Lyles responded it is an expense they are identifying for you but if I
understand correctly, it is 100% chargeable to the project and what we pay for
bond proceeds and not your assessment program.
It will be a capital charge; not an O&M charge.
Ms.
Zich asked why is it in there?
Mr.
Fennell responded it does not have to be just for the ongoing projects. This is for our engineer as opposed to the
Capital Projects Coordinator.
Mr.
Daly stated for example, for canal bank maintenance.
Mr.
Lyles stated not out of this budget.
Mr.
Goscicki stated the main reason for putting it in this line item was to
identify the fee so the Board can see what we are doing, rather than burying it
under a $40 million capital improvement program. The real reason was to expose it to the
Board.
Mr.
Hanks stated our expectation is for there to be additional engineering fees in
the Capital Improvement Budget. We
already know there are additional fees associated with the General Fund.
Mr.
Goscicki stated you have engineering fees in the General Fund. What we went through with Mr. Daly and the
engineer, was in the Water and Sewer Fund; we did not see any significant
engineering work outside of the major capital improvement program and did not
see other engineering activities.
Therefore, we kept $50,000 in this line item. Quite honestly, I will be surprised if we hit
this number this year. The engineers
have been busy moving the capital improvement program forward.
Mr.
Fennell stated it is a field expense.
Ms.
Zich stated so long as it is not just for projects. I was concerned we were using the funds for
another purpose.
Mr.
Goscicki stated you are absolutely correct.
We could theoretically roll 100% of Mr. McKune’s contract into the
capital improvement program but we wanted to expose it to the Board.
Ms.
Zich stated $80,000 is a great deal of money to put in there.
Mr.
Goscicki stated some of his expense needs to be taken from this line item. We have not figured out how much of his time
was spent doing water resource permitting associated with the reuse plan. It may or may legitimately be
capitalized. However, some percentage will
need to remain in this line item.
Mr.
Lyles stated let me remind everyone, this is just a proposed budget and you are
not adopting this budget. Between now
and the public hearing on September 17th, they can work with this
number.
Ms.
Zich stated thank you!
Mr.
Fennell asked are there any other concerns?
Not
hearing any,
Mr.
Goscicki stated Resolution 2007-9 by title is:
“A
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE CORAL SPRINGS IMPROVEMENT
DISTRICT APPROVING THE BUDGET FOR FISCAL YEAR 2008 AND SETTING A PUBLIC HEARING
THEREON PURSUANT TO FLORIDA LAW”
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor Resolution 2007-9 Approving the Water and Sewer Proposed
Budget and Setting the Public Hearing for
FIFTH ORDER OF BUSINESS Consideration of
Certain Documents Related to the Issuance of New Bonds
Mr. Fennell asked what are we
considering?
Ms. Ganz responded the Amending Resolution,
Subordinate Bond Resolution, Reimbursement Resolution and the Engineer’s
Report.
Mr. Lyles stated you will be
accepting the form of the Engineer’s Report but the resolutions are formal
resolutions of the Board.
Mr. Goscicki stated with us tonight
is Mr. Skeehan from CH2M-Hill, who will give a brief overview of the capital
improvement program; Ms. Ganz, Bond Counsel and Mr. Mulshine with Prager, Sealy
& Company.
Mr. Skeehan from CH2M-Hill provided
the following presentation on the capital improvement plan, which will be made
a part of the official record:
● Why is CIP important to CSID?
○ Provides highest level of service to
customers:
▪ Affordable rates
▪ High redundancy and reliability
▪ Replacement of aging infrastructure
○ Meet current and future regulations:
▪ Implementation of advanced water
treatment technologies and effluent reuse in the future.
▪ Responsibility to regional aquifer
recharge through reuse in connection with Water Use Permit.
▪ Preserve the surficial aquifer
allocation
● CIP goals
○ Replacement of aging infrastructure in
water and wastewater plant.
○ Proposed projects
○ Providing high level of service to
customers
● Costs by project and phase – Phase 1 - $39.6 million:
○ Solids Handling - $7.5 million
○ Nanofiltration Plant - $24.8 million
○ Rotoguard/Belt Press - $1.5 million
○ Wastewater A&B - $3.9 million
○ Reclaimed Water Facility - $400,000
○ Monitoring Well - $1.5 million
● Costs by project and phase – Phase 2 - $14.7 million:
○ Reclaimed Facility/Conveyance - $13
million
○ Operating Building Expansion - $1.7
million
○ Uncertainty of what is required for this
work – dependent upon agencies and Water Use Permit.
● CIP schedule:
○ Expended over a three year period
○ Changed timeline to reflect starting
period in October rather than April and ending in September of 2010, with
exception of solids handling which is currently underway.
○ Estimates are from prior presentation in
May and pertain to 2008 dollars.
○ A $5 increase on water in 2008, $6 increase
in 2009 and $7 increase in 2010.
Significant drop in 2011 and into the future. As part of bond covenants, 3% is required,
which is included in the increases.
○ As part of the bond covenants, 3% is
required in 2011 and 2012.
Mr. Goscicki stated the first three
years reflect the increase the Board approved two months ago. Mr. Skeehan is reflecting in years 2011 and
2012, there will have to be a 3% increase to keep up with the cost of living.
Ms. Zich stated these increases are
from July 1st through June 30th.
Mr. Skeehan stated correct.
Mr. Fennell stated another way of
looking at this is taking the rate of inflation and saving 3.5% per year and
figuring out the last time you increased rates.
Mr. Skeehan stated this was 12 years
ago.
Mr. Fennell stated you are
projecting this out another eight years beyond the 12 years. For 15 years, we were able to keep rates flat
by using our own infrastructure and not having to pay it off. Eventually the infrastructure got worn
out. This is still reasonable as far as
what we paid originally and what most people pay now as reflected in Section
4.4 of the Engineer’s Report compared with other districts. We are still at the median price.
Mr. Skeehan stated I provided a
quick overview of the general process of the utility cost allocations and
revenue requirements.
● CIP projected rate adjustments:
○ 2008 - $5.17
○ 2009 - $5.90
○ 2010 - $7.20
○ 2011 - $2.76
○ 2012 - $1.74
● Overview of rate development process (from
Utility cost allocations
○ Utility revenue requirements
▪ Revenues to be recovered from user
charges
▪ Other system revenues
▪ Allocations of revenue requirements to
utility functions
▪ Customer class user characteristics
▪ Allocation of costs to user classes
▪ Design of utility rates
● Projected operating expenses from 2003 to
2012 with annual increases – being addressed with the rate changes.
● Existing debt service
●
● CIP funding – 1st Revenue Bond:
○ $44.6 Million - $39 million going towards
capital projects
○ 3.1% issuance cost including insurance
○ 4.2% interest rate
○ 30 year debt repayment schedule
○ Repayment of bonds wrapped around
existing debt
○ 2 years capitalized interest
● CIP funding – 2nd Revenue Bond:
○ Bond Issued in 2011
○ $14.7 Million
○ 3.1% issuance cost including insurance
○ 4.2% interest rate
○ 30 year debt repayment schedule
○ Repayment of bonds wrapped around
existing debt
● Required change in rate revenues with new
debt service:
○ 2007/08 – 15%
○ 2008/09 – 14%
○ 2009/10 – 14%
○ 2010/11 – 5%
○ 2011- 2014 – 4%
● Rates compared to other local communities:
○ 2008 analysis
○ CSID in lower ranking of rates with the
15% increase
Mr. Fennell stated the new
construction areas in Port St. Lucie and Bel Glades have to charge $80. We can charge less until we need to increase
our rates. When there are new
communities, you have to step up and pay the new costs. Now we need to increase our costs but even
so, we are still less than the City of
Mr. Skeehan stated clearly CSID has
been on the right track for a number of years and this chart reflects this very
well.
● Projected debt coverage with proposed
rate revenue adjustments for FY 2008 through 2015:
○ Addresses all components in the
Engineer’s Report for revenues and operating expenses.
○ Money for debt service is meeting the
requirements for the new bond.
● Projected bond coverage without Series
2010 bonds
Ms. Ganz stated assuming the bonds
are issued now and in the future to finalize the program, you will have certain
rate increases to support this program, which is shown in the first table. The second table shows the bond coverage
without Phase 2, which will have a more limited rate increase to support the
Phase 1 capital improvement program.
Mr. Skeehan stated the schedule of
the draw down, as included in the Engineer’s Report, shows the monies allocated
to the bond. It was modified slightly to
work within the three years required by the bond. Ultimately, you are in the perfect position
in order to continue providing this high level of service to your customers,
meet the current and future regulations and provide class 1 reliability across
the board.
Mr. Fennell stated the Board has
heard this presentation before in more detail.
Mr. Skeehan stated correct.
B. Engineer’s Report
Mr.
Lyles stated a motion to accept the Engineer’s Report, as presented by the
Consulting Engineer is in order at this time.
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor the Engineer’s Report relating to the funding for the
water and wastewater projects as presented by CH2M-Hill was accepted.
Mr. Fennell stated in the report
where you discuss how much water was used, you said “millions of gallons”. This should be “thousands of gallons”.
Mr. Skeehan stated we will have this
corrected.
A. Amending Resolution (2007-10)
Ms. Ganz stated my firm serves as
Bond Counsel for the District and we created the financing documents you need
to support your CIP. In terms of the
documents to proceed with the financing, staff looked at the existing bond
resolutions. You have the water and
sewer bonds from 1992, which are outstanding under a general bond
resolution. Those bonds have a lien on
the water and sewer revenues generated by the system. When we looked at the documents, we realized
unlike other more typical situations; we could not just issue more debt. We needed to complete a coverage task to make
sure you had enough revenue to pay your existing debt within the new
bonds. The 1992 and 2002 bonds could
have financed some of the earlier new money to build the Water Treatment Plant. However back in 1972, when these bonds were
issued, they were approved in a referendum.
Not only are they secured by water and sewer revenues, but they are
backed up by the District’s full faith and credit, meaning if for some reason
revenues were ever short, you have to pay the bonds. Of course this never happened and never
will.
This resolution is limited because it was
approved in a referendum back in 1972 where only $30 million was approved. This has already been issued. The bonds currently outstanding are funding
the original debt. This means you have a
limit on it. However, once you issue the
$30 million in bonds, other than the financings, you will not issue any more
debt with a lien. Of course, this makes
it more complicated but we will figure out something because you need to issue
bonds to improve your system.
We decided with your Underwriter and District
staff to issue bonds on a subordinate basis to the existing bond. In order to do this, we need to amend the
existing bond resolution so when water and sewer revenues flow into the
District to pay debt service on your existing bonds and operating expenses,
they open a spot to pay these subordinate bonds. The old documents did not have this
“spot”. To do this, we need consent from
a percentage of the bondholders of the senior bond. We were looking at how this will happen and
had the Underwriter talk to the bondholders who will need to consent. While we were looking at amending the senior
bond resolution to allow this money to come in to pay the subordinate debt, we
suggested modernizing the flow of funds and bring it up to date to give the
District more flexibility and ability to better manage those water and sewer
revenues, which were trapped in your Enterprise Fund. The way this was set up before, they were
trapped at the bottom of this fund after you paid the debt in a way, which was
not working for you. We said “Let’s talk
to the parties who have to consent to see if they will consent to this
amendment and change of the flow of funds”.
We worked with the bond insurer of the existing debt; one of the holders
of the 1992 bonds.
The first resolution before you is an amendment
to the existing water and sewer bond resolution to permit the money to come in
up to a certain point to pay the outstanding debt and create new bonds. There is a complete description in the
overview circulated to the Board. The
redline resolution was provided to you so you can see the changes. The consent is attached as an exhibit to the
resolution.
The other item we have to take care of is to draft
the bond resolution to the subordinate bond.
We wanted to give you a more up to date bond resolution, similar to the
senior bond resolution so it will have a flow of funds. However, in 2014 when the existing senior
bonds were paid in full at their final maturity, the bonds issued under the
subordinate bond resolution will only receive bond revenues and the other bonds
will go away. This created a
complication because I had to draft the resolution to work while they were
junior bonds so when the old bonds were gone, you did not have to do anything
more to this resolution. You had it all
in place. This made the resolution
somewhat complicated but it had the same flow of funds built into the senior
resolution. Now you have a Rate Stabilization
Fund for surplus funds and Renewal and Replacement Funds, which you can use
annually in accordance with your Consulting Engineer’s recommendations.
There are two phases of improvements in this
capital improvement plan, which the engineers are recommending. The first phase is what you want to finance
now. The subordinate bond resolution
gives you the ability to issue bonds without a limit to fund the water and
sewer system, as long as you meet certain tasks. Obviously, you have to be able to pay the
debt service on your bonds with some extra coverage. This is what the bond insurers require. The first series of bonds you issued are the
2007 bonds for the Phase 1 improvements, which are the projects totaling $39
million. This resolution puts a
mechanism in place for us to move forward and get those bonds marketed and sold
without having to take any further action.
Attached to this resolution are the following documents we will be using
in connection with the sale of the bonds:
● Prospectus prepared by Disclosure Counsel
● Bond Purchase Agreement prepared by
Underwriter; subject to parameters as set forth in the subordinate resolution:
▪ Setting
a par amount
▪ Setting
the interest rate
▪ Delegating
authority to the President to award the bonds to Prager
▪ Finding
the negotiated sale is in the best interest of the District
▪ Putting
into place what you need to do to get this bond issue in place
All we are authorizing today are the
2007 bonds. If you decide to do the
second phase of improvements, we will have the opportunity to consider a bond
issue, which requires an Engineer’s Report to estimate the cost of those
projects. We will then come back to you
with a financing plan for the next series of bonds. Keep in mind, the bond resolution is a
general framework for future bonds.
In conclusion, we request you amend
the senior bond resolution so we can get the junior bonds issued, fix your flow
of funds, set up a mechanism for you to issue additional bonds for new
improvements to your system and authorize the first series of bonds to be
marketed and sold. We are hoping to have
the bonds sold in September.
Mr. Fennell stated sounds good to
me. Does the attorney approve?
Mr. Lyles responded I was part of
the working group who developed these documents, have seen all of the drafts
and revisions to the drafts and participated in conference calls. I can tell you from the standpoint of
District Counsel; these documents have been refined to the point of where they
are state of the art. They will
accomplish the goals described in the Engineer’s Report and outlined from the
technical financial side by Bond Counsel.
I have no further comment or input on the resolutions described by Ms.
Ganz.
Mr. Goscicki stated we have been
working on these documents for at least three months and working through the
structure and the process. I think
counsel did a good job working with the bond team to get these documents
structured to give us the additional flexibility we are looking for as well as getting
these bonds in place. This was not a
simple undertaking and Ms. Ganz makes it sound simple. We had to get approval from the existing
bondholders in order to amend your existing resolutions to go out and create
new debt. It was an arduous process.
Mr. Hanks asked is this going to
make future bond issues easier?
Ms. Ganz responded yes. All of hurdles in the documents will be
behind you and you will be left with a simple set of documents. When we get to Resolution 2007-11, Mr.
Mulshine from Prager, Sealy & Company can give you a simple overview.
On MOTION by Mr. Hanks seconded by Ms.
Zich with all in favor Resolution 2007-10 Amending, Subject to Receipt of
Requisite Consent, Certain Prior Resolutions of the Issuer, Including
Resolutions Adopted by the Issuer on June 5, 1972, December 27, 1977, December
27, 1983, April 29, 1986, May 31, 1988 and March 16, 1989, As Same Have Been
Supplemented and Amended Through the Date Hereof, Including by Resolution Nos.
92-6, 93-1 and 2002-5 Adopted by the Issuer on September 21, 1992, October 7,
1992 and September 16, 2002, Respectively, to Provide for Changes to the Flow
of Funds Set Forth Therein and Make Other Necessary Changes Related Thereto;
Providing for Severability and Providing an Effective Date was adopted as
presented.
C. Subordinate Bond Resolution (2007-11)
Ms.
Ganz stated the resolution you are being asked to approve today is identical to
the one provided to the Board in the agenda package. We made some cleanup changes.
Mr.
Goscicki stated this is what authorizes staff to proceed with this new debt.
Ms.
Ganz stated it delegates the authority to you to execute the Bond Purchase
Agreement, within the parameters of the bonds.
Mr.
Mulshine stated this way they do not have to wait for another meeting to issue
the bonds.
Mr.
Lyles stated this resolution identifies several documents; one of which is an
Offering Statement. If it is determined
something is wrong with the Offering Statement without minor revisions being
possible, they may have to come back before the Board. If the interest rate parameters cannot be
met, they may have to come back. I had
this happen twice in the past 30 days.
If the bonds get ready to close but they cannot sell them for the
interest rate cap the Board approved, we have to come back to you. The assumed interest rate is 5%.
Mr.
Mulshine stated these are parameters on an issuance the residents approve
through a Preliminary Offering Statement.
This has to be sent to investors prior to anyone being allowed to purchase
bonds. This document will be sent out in
the next couple of days. As early as
next week, we will be able to set prices on the bonds, set the actual interest
rates and sign the contract with the District.
However, we are looking at the week of September 3rd to close
and wire transfer the funds. The entire
transaction could be finalized as early as next week and funded the week after.
Mr.
Hanks stated it gives us the flexibility so we do not have to wait 30 days but
does not give the President the authority to go out and issue $10 million more
in bonds.
Mr.
Mulshine stated exactly.
Mr.
Fennell asked what is the interest rate?