HomeMy WebLinkAboutVI (B) Recommendation of Preference/Order for Financing Stormwater Utility Projects i:'.4
"CENTER OF GOOD LIVING - PRIDE OF WEST ORANGE" MAYOR• Ce�rt� � t;
OCOee S.SCOTT VANDRRCk1FT4`
0 .7..4, 5 COMMISSIONERS
RUSTY JOHNSON
a CITY OF OCOEE SCOTT ANDERSON
v O 150 N.LAKESHORE DRIVE SCOTT A.GLASS
f'� �t� OCOEE,FLORIDA 34761-2258 JIM GLEASON
'y� J� (407)656-2322 CITY MANAGER
�'� Of GOP�` ELLIS SHAPIRO
MEMORANDUM
Date: April 10, 1996
To: Honorable Mayor and Board of City Commissioners
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From: Wanda B. Horton, Finance Directo /1�
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Subject: Financing for Stormwater Utility Improvements
In December of 1995, Professional Engineering Consultants (PEC)
issued the Stormwater Utility Feasibility Study identifying
drainage problem areas, possible solutions and associated capital
costs for the recommended solutions. The project list was updated
in February, 1996 adding areas recommended by Mayor Vandergrift.
The projects were divided into two categories to comprise Phase I
and Phase II of the Capital Improvement Program. The cost estimate
for Phase I is $1,980, 198. 00 and for Phase II $1, 654, 584.00. These
estimates include engineering and design services and a fifteen
percent contingency.
Subsequent to discussions during a work session and commission
meetings, the charge per equivalent residential unit (ERU) was
increased from $3 . 00 per month per ERU to $4.50 per month per ERU
effective April 1, 1996 and to $5.00 per month per ERU in October,
1998. These increases were necessary to pay for the financing of
Phases I and II of the stormwater drainage projects as presented in
the Engineer's Report adopted with Ordinance 96-03 at the March 3,
1996 commission meeting.
A Request for Proposal (RFP) for "Bank Qualified" financing of the
Stormwater Utility Improvements for the City was advertised on
February 18, 1996. The criteria included:
* Commitment to finance both phases with only Phase I being
funded now
* Fixed rate issue for the life of the term
* The issue to be secured solely by stormwater revenues
* Statement of prepayment policy
* Level annual debt service payments
* Closing costs included in loan amount
Five responses were received. Attached is a summary of the
proposals for your review. The originals are on file with the City
Buyer, Mark Brace.
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Proposals were opened on March 12, 1996 from the following:
Barnett Bank
First Union National Bank of Florida
Nations Bank
SunTrust Bank
Riverside National Bank - No Bid
An evaluation committee comprised of Mayor Vandergrift, Jim Shira -
City Engineer/Utilities Director, Ken Hooper - Engineering
Consultant, Mark Galvin - Financial Advisor for the City and I
reviewed the proposals and met individually with representatives
from each of the four institutions.
The committee evaluated the proposals based upon types of financing
(bond vs. loan) , interest rates, terms, financing costs, penalties,
conditions and flexibility. The committee desired a bank loan
versus a bond issue to reduce upfront costs and not be bound by a
restrictive covenant for prepayment. SunTrust Bank and Nations
Bank offered the flexibility the committee desired, however, based
upon the attractive interest rate, the flexibility to prepay
anytime without penalty and SunTrust's commitment for the full 15
years, the committee ranked SunTrust Bank #1 and Nations Bank #2.
Action Requested
The Mayor and Board of City Commissioners authorize a
financing/negotiating team consisting of the City's Bond Counsel,
City Attorney, City Financial Advisor, and Finance Director to
proceed with negotiations with SunTrust Bank and if an agreement is
not reached with SunTrust then Nations Bank for the purpose of
securing financing for the Stormwater Utility Improvements to be
brought back by resolution to the next commission meeting.
2
CITY OF OCOEE,FLORIDA
Summary of Bank Proposals
Stormwater Utility System Improvement Program
• Barnett Bank • First Union NationsBank SunTrust
Estimated Phase I-$1,981,090 -Up to$1,981,090 Up to$1,981,090 Phase I-Up to$2,000,000
Amount
..... .
Rate Fixed Rate Option Fixed Rate Option Fixed Rate:> 10 year option - 4.59°I°>
Fixed 6 55%(Swap);15 years Fixed 5.43% • 4.99% average(Step Coupon)
6 25%(Swap) 10• years 15 ypaz option » 4.'X7%
average(Step Coupon)
Variable Rate Optio t Variable Rate Option: for rst 10'Yearsthen reset
• Gulf Breeze:Pool WI LOC • 3.98°l0(74%of 30.Day based on formula
VRDB Rate;3.25°10 Libor)
Annual Fees j J % Yr>Kurodollar
• F Total`Rate . X1.43°l0 Ftxed 1.48
15 Year
Period 11 to 16 Year Amortization 15 Year Amortization Amortization- 10& 15 Years
10 Year balloon
Prepayment laxed Garr be substantial ! Fixed-Can be substantialAt any tittle:: At any tune
Variable-At anytime, Variable.-At anytime w/o Penalty wfo Penalty
w/o Penalty w/o Penalty
Interest Rate
Gross-Up Yes Yes Yes Yes
Security Stormwater Stormwater Utility.Fees Stormwater Stormwater
Utility Fees and Net Sanitation Utility Fees Utility Fees •
System Revenues w/
release prevision
Rate Covenant 1.20x N/A N/A 1.15x
EEEAdditiOittil.E.E.EEEEE'E;:E.E•E.E.E.E:EE.-EE.EE.E.EEE'..E.E.E.I2Q)C.E.EEEE.E.E.E.E:EEEEEEEEEEE.::::EEEEE.:E..:EEEEEEEEEEEE'EEEE,EE'E.E.EEE.E.E.1•••••::: i.5Ux Not Provided 15t1>£
Bonds Test
Upfront Cost Both Phases -$87,775 $5,000 Legal $5,000 Legal $7,500 Legal
Phase I Only-$57,050
•Requires$1p,U00 non • Requires I SRF equal to
Other refundable capacity!charge toE:.::....•N//A N/A 1 %of Para-Subject to
Information• •lode in Phase ll Release