Okaloosa County BOCC — February 18, 2014 — Issuance of Industrial Dev Bonds For AWS — reading text

BURN WATER SYSTEW, 1, p 3097 LOCKE LN CRESTVIEW, FL 32536 850-682-1258 OR 850-682-3413 ~ FAX 850-398-6643 January 31, 2014 The Honorable Kelly Windes, Chairman Okaloosa County Board of County Commissioners 1804 Lewis Turner Bouelvard Fort Walton Beach, Florida 32547 Re: Issuance of Industrial Development Bonds for Auburn Water System, Inc. Dear Chairman Windes: The Auburn Water System, Inc., a Florida not-for-profit corporation ("Auburn") hereby respectfully requests that Okaloosa County (the "County") consider the issuance of industrial development bonds (the "Bonds"), the proceeds of which may be loaned to Auburn for the purposes of refunding certain of Auburn’s outstanding indebtedness and financing the cost of improvements to Auburn’s existing utility system. The Bonds would be issued under the provisions of Chapter 159, Part II, Florida Statutes, and as such all responsibility for repayment of the Bonds would rest with Auburn, and the County would never be required or compelled to use any of its own revenues or its ad valorem taxing power to repay principal of and interest on the Bonds. It is anticipated that the interest on at least a portion of the Bonds will be excluded from gross income for purposes of federal income taxation. In connection therewith, Auburn requests that the County consider adopting a resolution in the form attached hereto (the "Inducement Resolution") stating the County’s intention to consider the financing, which action will set a date allowing Auburn to go back and recover its costs from that point forward when the Bonds are issued. The Inducement Resolution also authorizes the scheduling of a required public hearing with respect to the issuance of the Bonds. The Inducement Resolution does not obligate the County to issue the Bonds, and Auburn will be required to come back to the Board of County Commissioners for authorization and approval of the Bond issue and the terms thereof prior to closing. We believe that use of this well-recognized financing vehicle will allow Auburn to receive a lower interest rate on its indebtedness, to the benefit of its customers in Okaloosa County. As you aware, Auburn services 6,283 accounts over a 120 square mile area within the County. We strive to keep our costs as low as possible, and this financing would assist us in doing so, without subjecting the County to any risk. We have discussed this with Nabors, Giblin & Nickerson, P.A., the County’s bond counsel, and they have prepared the attached documentation in the form normally utilized for such financings around the State. Thank you for your consideration. Sincerely, Doug Sims General Manager Cc: Ernie Padget-County Administrator