Okaloosa County BOCC — March 27, 2014 — II.d. MSBU — reading text

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: March 18, 2014 TO: Honorable Chairman and Members of the Board FROM: Ed Schroeder SUBJECT: Approval to advertise ordinance to repeal Destin MSBU DEPARTMENT: Tourist Development Department BCC DISTRICT: All STATEMENT OF ISSUE: Staff has been asked to research the feasibility of repealing the special assessment which has been levied for the Western Destin Beach Restoration Project. Those revenues, along with the proceeds of the 1* Penny of Tourist Development Tax, have been pledged for the repayment of the Bank note funding the Western Destin Project. To repeal the special assessment, the permission of the Hancock Bank which holds the note will be required. Staff has worked with First Southwest and legal team to determine the willingness of the Bank to release the pledge of the special assessment so that the special assessment may be repealed, should the Board consider it appropriate. To complete this action, staff needs direction to obtain the necessary executed consents from the Bank and upon obtaining that release to develop, advertise, and bringing to the Board an ordinance to repeal existing Ordinance 07-57 that established the MSBU. BACKGROUND: On November 8, 2007, the Okaloosa County Board of County Commissioners approved County Ordinance 07-57 that established a MSBU for the purpose of repaying a portion of the financed amount for the Beach Restoration Project through “Special Assessment Revenues” or SAR. The assessment was to be imposed for a maximum of eight (8) years. The first year it was levied was for Fiscal Year 2008-09 and if it was levied for its full term, the last year it would be levied would be Fiscal Year 2015-16. The amount derived from the SAR by the MSBU is approximately $350,000 per year. The Western Destin Beach Renourishment Project was funded with a Bank note which will be paid off in September 2020, and has a current balance of approximately $4.1 million. The SAR is one of the pledged revenues which secure the Bank note which funded the Western Destin Beach Renourishment Project, along with the 1° Penny of the Tourist Development Tax. The County, as part of the consideration of the note, was required to agree that it would keep the pledged revenues in place through the maturity of the note. Therefore, the consent of the Bank would be necessary to release the SAR as one of the pledged revenues. First Southwest has been working with Hancock Bank to determine their interest in Packet Pg. 604 releasing any pledge on the SAR and we have received a letter confirming that they are willing to do so. The attached letter provides confirmation of the consent by the Hancock Bank. To finalize the release of the SAR as one of the pledged revenues for the Bank note, documentation would need to be prepared for the execution by the Bank. At that point, the Board would be able to repeal the Ordinance creating the MSBU. If the above request is approved, staff would work with legal counsel to prepare the necessary documentation for the Bank to release the pledge of the SAR and draft an ordinance repealing the existing ordinance, advertise, and bring that proposed Ordinance to the Board for approval. In the event that the SAR is released as a pledged revenue and the MSBU repealed, there would no longer be an assessment for the remaining two years of the original eight year term. The total lost revenue available for the repayment of the Bank note which would have been received from the SAR during those last two years would have been approximately $700,000. That difference would now be funded from the proceeds of the 1 Penny of Tourist Development Tax. Though there are sufficient proceeds of the 1" Penny of Tourist Development Tax to fund this difference, it reduces the availability of these revenues for other beach related services and improvements. OPTIONS: Approve/Disapprove staff direction to prepare the necessary documentation to release the pledge of the assessment revenue and to develop, advertise, and bring to the Board an ordinance repealing Ordinance 07-57 that established the MSBU. RECOMMENDATIONS: Staff recommends approval of staff direction to prepare the necessary documentation to release the pledge of the assessment revenue and to develop, advertise, and bring back to the Board an ordinance to repeal existing Ordinance 07-57 that established the MSBU. RECOMMENDED BY: , County Administrator 3/12/2014 APPROVED BY: Ernie Padgett, County Administrator Packet Pg. 605 Hancock Bank PUBLIC FINANCE DEPARTMENT March 10, 2014 Honorable Board of County Commissioners of Okaloosa County, Florida C/o: — Mr. Gary Stanford Finance Officer Okaloosa County, Florida C/o: = Mr. Mark Galvin Senior Vice President First Southwest Re: $5,000,000 Beach Restoration Revenue Note, Series 2012 Amending the loan documents to release the pledge of Special Assessment Revenues Dear Commissioners: The County’s financial adviser, First Southwest, has requested that Hancock Bank consider relinquishing its rights to the pledge of “Special Assessment Revenues” (SARs) that are currently pledged toward the repayment of the above referenced loan. In addition to the SARs the loan is also secured by the proceeds of the County’s 1* penny Tourist Development Tax (TDT) and certain funds and accounts established in conjunction with the issuance of the 2012 Note. Hancock Bank very much desires to work with the County and to give the Board of Commissioners the flexibility it needs to deal with its constituents and stakeholders. Given the sufficiency of the TDT revenues, Hancock Bank would agree to release the pledge of Special Assessment Revenues toward the Series 2014 Note. Our offer is contingent upon the County’s Bond Counsel (Nabors, Giblin & Nickerson) working closely with us regarding any amendments to the Note Resolution and other loan documents that would be necessary to effect the release of the SARs lien. 113 Designer Circle / Dothan, Al. 36303 334-792-8422 / Fax 334-792-8424 / Toll Free (888) 516-7373 Packet Pg. 606 Okaloosa County Beach Restoration Revenue Note, Series 2014 Page 2 The Bank would need to review and approve all changes to the loan documents (reflecting this release of lien) prior to adoption and/or execution. In addition, the County’s Bond Counsel would provide to Hancock Bank an opinion letter (addressed to the Bank) in a form and substance acceptable to the Bank. The opinion letter would provide assurances to us that no changes are being made to the loan security and terms, other than the releasing of the lien on the Special Assessment Revenues. Please let me know if you need additional information. Sincerely, HANCOCK BANK fh ELE Steven E. Cole Senior Vice President Public Finance Department Packet Pg. 607