Okaloosa County BOCC — September 15, 2015 — Approve Resolution to Finance/Refinance Airports CIP Projects — agenda request

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: September 15, 2015 TO: Honorable Chairman and Members of the Board FROM: Sunil Harman SUBJECT: Approve Resolution to Finance/Refinance Airports CIP Projects DEPARTMENT: Airport BCC DISTRICT: 1,2 & 5 STATEMENT OF ISSUE: The Board of County Commissioners is requested to adopt the attached Resolution to authorize a borrowing of (not to exceed) $8,000,000 from the Pooled Commercial Paper Loan Program of the Florida Local Government Finance Commission (FLGFC). BACKGROUND: The Board previously approved the solicitation of quotes on October 21, 2014. The FLGFC was the only respondent. The FLGFC loan program has been used on two prior occasions for the Airport: $4.5 million during the construction of the Terminal Development Project, and another $2.0 million during the construction of the Rental Car Facility and several other related projects. The FLGFC Loan will provide interim cash-flow funding for two CIP projects being undertaken by the Department of Airports: the Destin Air Traffic Control Tower at an estimated $5 million and the Foy Shaw Access Road at Bob Sikes Airport at an estimated $7.5 million. These projects will recieve significant funding from the Federal Aviation Administration and the Florida Department of Transportation (FAA and FDOT, respectively), but must be funded with Airport reserves up front pending reimbursement from the government agencies. The Foy Shaw Access Road project is funded primarily (80%) from FDOT funds (no FAA funding), but under the deferred reimbursement agreement between FDOT and the County, the majority of its funding is from future appropriations over four fiscal years beginning in 2016 (See Attached). The initial assessment of the Airports staff and its Financial Advisor (PFM) is that this form of a “bridge” loan will provide a low interest source of advance funding to cash-flow these projects while preserve its cash reserves to maintain a higher than minimum debt service ratio which is integral to maintaining the Airport’s BBB+ rating from Standard and Poor’s. The FLGFC Loan will also be used to refinance two outstanding State Infrastructure Bank (SIB) loans between the County and FDOT, in the amount of approximately $2.5 million, which were used for taxiway and stormwater improvement projects, and the land purchase for the Foy Shaw Parkway access road at Bob Sikes Airport. The refinancing will lower the interest rates from what is currently being paid on the SIB loans (3%) and increase the repayment flexibility, which is important, given that the County has recently received FAA approval to repay approximately $1.9 million of the loan from Passenger Facility Charges (PFCs) to be collected by the air carriers and remitted to the County. This will provide the County flexibility to manage the repayment of the loan from PFCs. The initial draw from this loan is planned for $1 million plus the repayment of the SIB balance of $2.5 million. The Department Staff is requesting BCC approval to enter into the loan agreement with the Florida Local Government Finance Commission under the terms of this Resolution. The Department anticipates closing on the two FDOT SIB loans on October 1st. The closing documents require signatures from the Chairman, the Clerk and the County Finance Officer. The FLGFC attorney, Mr. Steve Miller of Nabors, Giblin & Nickerson will be forwarding these documents for the closing. OPTIONS: Approve, Disapprove, Table RECOMMENDATIONS: The Airports Department staff recommends Board approval to enter into the loan agreement with Florida Local Government Finance Commission under the terms of this Resolution. RECOMMENDED BY: APPROVED BY: John Hofstad, County Administrator