Okaloosa County BOCC — May 5, 2015 — W&S Bond Resolution Amendment — agenda request — reading text

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: May 5, 2015 TO: Honorable Chairman and Members of the Board FROM: Rick Owen SUBJECT: W&S Bond Resolution Amendment DEPARTMENT: County Administrator BCC DISTRICT: All STATEMENT OF ISSUE: On April 21, 2015, the Board approved Resolution No. 15-99 authorizing the issuance of water and sewer revenue bonds which would be secured by the net revenues of the system. As part of this refunding, various restrictions that existed as to the use of the Water and Sewer Building were eliminated and therefore, surplus space within the building would be able to be leased to non-governmental entities without the prior restrictions. Resolution 15-99 currently includes the Water and Sewer Building as part of the system which means that any revenue generated from the renting of the Building would be considered part of the revenue stream of the Water and Sewer Department. However, should the Board so desire, it has the ability to exclude the Water and Sewer Building from the System and include it as part the County general inventory of other buildings. This would allow any revenue generated from the rental of the Water and Sewer Building to be deposited and used within the County’s General Fund or such other Fund as the Board deems appropriate. BACKGROUND AND ANALYSIS: On April 21, 2015, the Board approved Resolution No. 15-99 for the issuance of water and sewer revenue bonds which would be secured by the net revenues of the system. This Resolution refunded the prior indebtedness related to the water and sewer system and resulted in a substantial savings to the County. As part of this refunding, various restrictions that existed as to the use of the Water and Sewer Building were eliminated and therefore, surplus space within the building would be available to be leased to non- governmental entities without some of the prior restrictions. Under Resolution 15-99, the County currently includes the Water and Sewer Building as part of the system which means that any revenue generated from the renting of the Building would be considered part of the revenue stream of the Water and Sewer Department. However, for a limited amount of time, the Board has the ability, should it so desire, to adopt an Amended Resolution which would exclude the Water and Sewer Building from the definition of the “system”. This would then treat the Water and Sewer Building as any other building owned by the County and enable revenue generated from the rental of the Water and Sewer Building to be used within the County’s General Fund or such other Fund as the Board deems appropriate. Once the Bonds are sold, (projected at the end of May, 2015), the opportunity to make this change will no longer be available. It is the opinion of the County Attorney that the Amendment of the Resolution would provide the Board the maximum degree of flexibility in the future. If the Water and Sewer Building is treated the same as other County buildings, then the revenue generated from rents at that building could be used to fund some General Fund activities or such other purposes as the Board might determine. However, the Board would be under no obligation to do so and could continue to allow the revenues to be paid to the Water and Sewer Department, just as they have in the past. The distinction is that if we do not amend the Bond Resolution prior to the sale of the bonds, then we will have no ability to allocate those revenues for any other purpose in the future other than Water and Sewer and that restriction will continue throughout the life of the Bonds. The County Attorney’s office felt it was appropriate to bring this opportunity to the Board's attention to evaluate whether this change would be appropriate and prudent. OPTIONS: Approve/Disapprove. RECOMMENDATION: Approve the Amended Resolution excluding the Water and Sewer Building from the definition of the Water and Sewer System. RECOMMENDED BY: APPROVED BY: John Hofstad, County Administrator