Okaloosa County BOCC — August 19, 2014 — Action Item Printout — reading text

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: August 19, 2014 TO: Honorable Chairman and Members of the Board FROM: Sunil Harman SUBJECT: Approval for RFP to Finance Airport Capital Projects DEPARTMENT: Airport BCC DISTRICT: ALL STATEMENT OF ISSUE: The Board of County Commissioners is requested to approve the solicitation for $5 Million in interim cashflow financing for capital projects BACKGROUND: As an enterprise fund, the Airport Department must maintain adequate unrestricted cash balances in order to satisfy certain coverage requirements for bond issues. In addition, in order to maintain its BBB+ rating from Standard and Poor's, the Airport's liquidity is a major consideration. The Department of Airports has six major capital projects estimated at $22.4 Million in total cost over the next several years that will severely strain its unrestricted cash balances. These projects include the Aircraft Rescue and Fire Fighting facility on Eglin at $3.3 million, the Destin Air Traffic Control Tower at $5 million, the Foy Shaw Access Road at Bob Sikes Airport at $7.5 million, the Northwest Florida Regional Airport Baggage Handling and Inspection System at $4.5 million, two new Passenger Loading Bridges (PLB) at $1.9 million, and four new bag lifts for PLB's at $200,000. These projects are all significantly Federal Aviation Administration/Florida Department of Transportation (FAA/FDOT) grant and Department of Homeland Security/Transportation Security Administration (DHS/TSA) Other Transaction Agreement (OTA) funded, but must be funded with Airport reserves up front pending reimbursement from the government agencies. Two of these anticipated reimbursements are particularly lengthy. The TSA is funding (100% of the Baggage Handling and Inspection System, but quarterly reimbursements can take up to an additional 120 days for approval processing. The Foy Shaw Road project is funded primarily (80%) from FDOT, but under the deferred reimbursement agreement between FDOT and the County, the funding is from future appropriations over three fiscal years beginning in 2017. The initial assessment of the Airport staff and its Financial Advisor (PFM) is that a minimum of $5 million in the form of a "bridge loan" as a line of credit will provide the interim pay -as- you-go financing until reimbursement from DHS, FAA and/or FDOT is received. The Department staff is requesting BCC approval to solicit proposals from commercial banking institutions and obtain quotes from the Florida Association of Counties (FAC) Pooled Commercial Paper Program. FAC loans have been used on two prior occasions: $4.5 million during the construction of the Terminal Development Project, and another $2.0 million during the construction of the Rental Car Service Facility and several other related projects. Most recently, the Airport successfully solicited commercial banking institutions for funding the 2014 Refunding Bond issue fore the 2003 Series Bonds. OPTIONS: Approve, Disapprove, Table RECOMMENDATIONS: Airport Staff recommends solicitation from both of the identified sources; FAC Commercial Paper Program and commercial bank loans. RECOMMENDED BY: APPROVED BY: Ernie Padgett, County Administrator