Item K12
L/23
BOARD OF COUNTY COMMISSIONERS
C ounty of M onroe
Mayor David Rice, District 4
Mayor Pro Tem Craig Cates, District 1
The Florida Keys
Michelle Coldiron, District 2
Vacant, District 3
Holly Merrill Raschein, District 5
County Commission Meeting
March 16, 2022
Agenda Item Number: K.12
Agenda Item Summary #10371
BULK ITEM: Yes DEPARTMENT: Airports
TIME APPROXIMATE: STAFF CONTACT: Richard Strickland (305) 809-5200
N/A
AGENDA ITEM WORDING: Approval of a Resolution adopting Airport Financial Policies to
establish target levels of both Unrestricted Reserves
Coverage Ratio for outstanding debt in anticipation of the issuance of Series 2022 General Airport
Revenue Bonds for the Concourse A and Terminal Improvements Program.
ITEM BACKGROUND: The Airport plans to issue bonds to fund a portion of the Concourse A
and Terminal Improvements Program. In addition to the requirements that will be included in the
bond documents (e.g., a Debt Service Reserve Fund equal to approximately one year of annual debt
service), Airport management recommends adopting financial policies to establish targets for both
Service Coverage Ratio for outstanding debt. The policies will ensure that management has the tools
it needs to address any future shortfalls in traffic and/or revenue caused by general economic
declines and worldwide events such as the COVID pandemic. Airport Management recommends
establishing targets versus specific requirements to
financial position and market conditions in the aviation sector as it updates its financial plans and
forecasts. Establishing such financial policies is considered a best practice within the airport
industry.
Days Cash on Hand Policy The amount of Days Cash on Hand carried by an organization reflects
the number of days it can pay its expenses in the absence of any revenue. Airport management plans
on targeting a minimum of 365 Days Cash on Hand to provide a liquidity level sufficient to meet any
unexpected disruption to its operations. Cash levels above the 365 days target would be used for
operating expenses and/or capital expenditures at the Airport.
Days Cash on Hand will be calculated each fiscal year based on the following formula:
(Total unrestricted cash ÷ FY operating expenses) * 365 days
Debt Service Coverage Ratio Policy This ratio provides information to investors on the level of
net revenues (remaining revenue after operating expenses have been covered) available to make
Qbdlfu!Qh/!2715
L/23
payments on any outstanding debt and is a key metric used by the rating agencies to assign ratings to
bonds. For example, if an airport has $100 in annual debt service payments, it must generate $125 in
net revenues in order to remain in compliance with its bond covenants to investors. The bonds
issued by the Airport later in 2022 will include a legal requirement to achieve an annual minimum
Debt Service Coverage Ratio of 1.25x; a standard ratio used in the airport industry. However; to
ensure that there is an adequate buffer above the minimum legal requirement and to support
to target a Debt Service Coverage Ratio in the range of 1.50x 1.75x
PREVIOUS RELEVANT BOCC ACTION: N/A
CONTRACT/AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATION: Approval.
DOCUMENTATION:
Resolution - Financial Management Policies
FINANCIAL IMPACT:
Effective Date: 3/16/2022
Expiration Date: Remains in perpetuity unless amended or cancelled
Total Dollar Value of Contract: -0-
Total Cost to County: -0-
Current Year Portion:
Budgeted:
Source of Funds:
CPI:
Indirect Costs:
Estimated Ongoing Costs Not Included in above dollar amounts:
Revenue Producing: If yes, amount:
Grant:
County Match:
Insurance Required: No
Additional Details:
REVIEWED BY:
Beth Leto Completed 03/01/2022 4:38 PM
Qbdlfu!Qh/!2716
L/23
Richard Strickland Completed 03/01/2022 4:40 PM
Pedro Mercado Completed 03/01/2022 5:06 PM
Purchasing Completed 03/01/2022 5:11 PM
Budget and Finance Completed 03/01/2022 5:12 PM
Maria Slavik Completed 03/01/2022 5:24 PM
Lindsey Ballard Completed 03/01/2022 5:26 PM
Board of County Commissioners Pending 03/16/2022 9:00 AM
Qbdlfu!Qh/!2717
L/23/b
RESOLUTION NO. -2022
A RESOLUTION BY THE MONROE COUNTY BOARDOF
COUNTY COMMISSIONERSADOPTING FINANCIAL
MANAGEMENT POLICIESTO ESTABLISH TARGETS FOR
BOTH THE LEVEL OF UNRESTRICTED RESERVES AND
FOR THE TARGETED DEBT SERVICE COVERAGE RATIO
FOR OUTSTANDING DEBT ASSOCIATED WITH THE
BONDS ISSUED TO FUND THE CONCOURSE A EXPANSION
PROJECT AT KEY WEST INTERNATIONAL AIRPORT.
_____________________________________________________
WHEREAS, Monroe County owns and operates the Key West International Airport; and
WHEREAS, the Monroe County Board of County Commissioners (BOCC) has approved
the construction of a new passenger concourse otherwise referred to as the Concourse A Expansion
project; and
WHEREAS, the BOCC will issue bonds to fund a portion of the Concourse A Expansion
project; and
WHEREAS, by establishing financial management policies which set forth a liquidity
target of 365 days of unrestricted cash on hand and a debt service ratio in the range of 1.50x –
1.75xthe policy will help to secure and maintain an investment grade rating for the bonds;
NOW THEREFORE, BE IT RESOLVED THAT THE BOARD OF COUNTY
COMMISSIONERS OF MONROE COUNTY, FLORIDA HEREBY SETS FORTHTHE
FOLLLOWING POLICIES:
1.Days Cash on Hand Policy-The amount of Days Cash on Hand carried by an
organization reflects the number of days it can pay its expenses in the absence of any
revenue. Airport management plans on targeting a minimum of 365Days Cash on
Hand to provide a liquidity level sufficient to meet any unexpected disruption to its
operations. Cash levels above the 365days target would be used for operating expenses
and/or capital expendituresatthe Airport.
Buubdinfou;!Sftpmvujpo!.!Gjobodjbm!Nbobhfnfou!Qpmjdjft!!)FZX!23!.!Bjsqpsu!Gjobodjbm!Qpmjdjft*
Days Cash on Hand will be calculated each fiscal year based on the following formula:
(Total unrestricted cash ÷ FY operating expenses) * 365 days
2.Debt Service Coverage Ratio Policy–This ratio provides information to investors on
the level of net revenues (remaining revenue after operating expenses have been
covered) available to make payments on any outstanding debt and is a key metric used
Qbdlfu!Qh/!2718
L/23/b
by the rating agencies to assign ratingsto bonds. For example, if an airport has $100
in annual debt service payments, it must generate $125 in net revenues in order to
remain in compliance with its bond covenants to investors. The bonds issued by the
Airport in 2022 will include a legal requirement to achieve an annual minimum Debt
Service Coverage Ratio of 1.25x; a standard ratio used in the airport industry.
However; to ensure that there is an adequate buffer above the minimum legal
requirement and to support maintaining an investment grade rating on the Airport’s
bonds, management will implement a policy to target a Debt Service Coverage Ratio
in the range of 1.50x – 1.75x.
PASSED AND ACCEPTED by the Board of County Commissioners of Monroe County,
Florida, at a meeting of said Board held on the 16th day of March, 2022.
Mayor David Rice _____
Mayor Pro Tem Craig Cates _____
Commissioner Michelle Coldiron _____
Commissioner District 3 (vacant) _____
Commissioner Holly Raschein _____
(SEAL) BOARD OF COUNTYCOMMISSIONERS
Attest: KEVIN MADOK, ClerkOF MONROE COUNTY, FL
By_________________________ By________________________________
As Deputy ClerkMayor David Rice
Buubdinfou;!Sftpmvujpo!.!Gjobodjbm!Nbobhfnfou!Qpmjdjft!!)FZX!23!.!Bjsqpsu!Gjobodjbm!Qpmjdjft*
Qbdlfu!Qh/!2719