Item D160
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: March 21, 2007
Bulk Item: Yes X No
Division: Budget and Finance
Department: OMB
Staff Contact Person: Tina Boan- 4472
AGENDA ITEM WORDING: Approval to advertise a Budget Amendment for Key West Int'l
Airport Fund 404, and KW AIP Series 2006 Bonds Fund 405.
ITEM BACKGROUND: The Office of Management & Budget recently met with the Clerk's
Finance Department and it was agreed that there is a need to amend the Key West International
Airport's Fund-404. This will reflect changes in recording the Passenger Facility Charge revenue
as required by the Bond Covenants, which was previously budgeted in Fund 404 prior to the
issuance of the Variable Ratio Demand Obligation bond. Changes in Fund 404 and the New
Airport Terminal Bond Proceeds Fund-405 require a budget amendment to bring these funds
into compliance.
PREVIOUS RELEVANT BOCC ACTION: The previously Adopted FY 07 Budget, BOCC
approved at the September 20, 2006 regular meeting.
CONTRACT/AGREEMENT CHANGES:
NONE
STAFF RECOMMENDATIONS:
Approval
TOTAL COST: N/A BUDGETED: Yes No
COST TO COUNTY: N/A SOURCE OF FUNDS: Various, PFC,& Fund Bal
REVENUE PRODUCING: Yes _ No _ AMOUN"ONTO-- Year
APPROVED BY: County Atty _ OMB/Purchasing Risk Management
DOCUMENTATION: Included X Not Re ' ed
DISPOSITION: AGENDA ITEM #
Revised 8/06
Ratings: Moodys Aal/VMIGl
NEW ISSUE •BOOK ENTRY ONLY
Standard & Poor's AA/A-1+
In the opinion of Bond Counsel, under existing statutes, regulations, rulings and court decisions and subject to the conditions described herein under "TAX
MATTERS," interest on the Series 2006 Bonds (as hereinafter defined) of the County is excluded from gross income for federal income tax purposes, except that such exclusion
shall not apply to interest on any Series 2006 Bond for any period during which such Series 2006 Bond is held by a person who is a "substantial user" of the facilities financed or
refinanced by the Series 2006 Bonds or a "related person" within the meaning of Section 147(a) of the Internal Rer"ue Code of 1986, as amended. However, interest on the
Series 2006 Bonds is an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Such interest may be subject to
other federal income tax consequences referred to herein under "TAX MATTERS." Bond Counsel is further of the opinion that the Series 2006 Bonds and the interest thereon
are exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes.
$30,455,000
MONROE COUNTY, FLORIDA
Airport Variable Rate Revenue Bonds
(Key West International Airport),
Series 2006
Dated: Date of Delivery Due: October 1, 2035
Monroe County Florida (the "County") is issuing its Airport Variable Rate Revenue Bonds (Key West International Airport), Series 2006 (the "Series
2006 Bonds") as fully registered Bonds, which initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC").
Individual purchases will be made in book entry form only in denominations of $100,000 and any integral multiple of $5,000 in excess thereof. Purchasers of the
Series 2006 Bonds (the "Beneficial Owners") will not receive physical delivery of the Series 2006 Bonds. Transfer of ownership in the Series 2006 Bonds will be
effected by DTCs book -entry system as described herein. As long as Cede & Co, is the registered owner as nominee of DTC, principal and interest payments
will be made directly to such registered owner which will in turn remit such payments to the Participants (as defined herein) for subsequent disbursement to the
Beneficial Owners. From the date of the original issuance of the Series 2006 Bonds through October 15, 2009 (subject to extension or earlier termination), the
Series 2006 Bonds also will be payable from funds drawn under an irrevocable, direct -pay letter of credit issued by
Bank of America, N.A.
(the "Bank"). The Letter of Credit entitles the Paying Agent to draw thereunder an amount sufficient to pay the principal of the Series 2006 Bonds and up to 35
days interest accrued on the Series 2006 Bonds at a maximum interest rate per annum of 12%.
The Series 2006 Bands as initially issued will bear interest at the Weekly Rate and the initial Weekly Rate and each subsequent Weekly Rate to be bome
by the Series 2006 Bonds will be determined by UBS Securities LLC, as Remarketing Agent. While the Series 2006 Bonds bear interest at the Weekly Rate,
interest will be payable on the first business day of each month beginning August 1, 2006. The rate of interest on the Series 2006 Bonds may be changed to the
Fixed Rate designated and determined as described herein. The Series 2006 Bonds are subject to tender for purchase at the option of the Bondholders and, under
certain circumstances, are subject to mandatory tender for purchase, in the manner and at the times described herein. The Series 2006 Bonds are also subject to
optional redemption and mandatory redemption in the manner and at the times described herein.
Principal and any premium on the Series 2006 Bonds are payable upon surrender thereof at the designated payment office of U.S. Bank National
Association, acting as tender agent, registrar and paying agent for the Series 2006 Bonds. So long as DTC or its nominee, Cede & Co., is the registered owner of
the Series 2006 Bonds, payments of the principal of, premium, if any, and interest on the Series 2006 Bonds will be made directly to Cede & Co. See the caption
"Me Series 2006 Bonds - Book -Entry System" herein.
Any purchase of the Series 2006 Bonds should be based solely upon the financial strength of the Bank, and the Series 2006 Bonds are being
offered on such basis.
This cover page contains information for quick reference only. It is not a summary of the issue. Investors must read this entire Official Statement to
obtain information essential to the making of an informed investment decision.
Price: 100%
The payment of the principal of, redemption premium, if any, and interest on the Series 2006 Bonds shall be secured forthwith equally and ratably by a
pledge of and lien upon (i) the net revenues derived from the operation of the Key West International Airport received by the County pursuant to the Resolution
adopted by the Board of County Commissioners of the County (the 'Board") on June 21, 2006, as supplemented by a Resolution adopted by the Board on June 21,
2006 (collectively, the 'Resolution"), (ii) until applied in accordance with the provisions of the Resolution certain Other Available Moneys, (as defined in the
Resolution) and (iii) all moneys, including investments thereof, in certain funds and accounts created under the Resolution including the Reserve Account
(collectively the "Pledged Funds")
The Series 2006 Bonds are being issued to provide funds to (i) acquire, construct and equip various capital improvements at the Key West International
Airport as more fully described herein, (ii) fund the Reserve Account, and (iii) pay costs associated with the issuance of the Series 2006 Bonds, including the
letter of credit fees.
THE SERIES 2006 BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS "BONDS"
WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE COUNTY,
PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND PLEDGE OF THE PLEDGED FUNDS, IN THE MANNER AND TO THE EXTENT
PROVIDED IN THE RESOLUTION. NO HOLDER OF ANY SERIES 2006 BONDS SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD
VALOREM TAXING POWER TO PAY SUCH SERIES 2006 BOND, OR BE ENTITLED TO PAYMENT OF SUCH SERIES 2006 BONDS FROM ANY MONEYS OF
THE COUNTY EXCEPT FROM THE PLEDGED FUNDS IN THE MANNER AND TO THE EXTENT PROVIDED IN THE RESOLUTION,
The Series 2006 Bonds are offered when, as and if issued, subject to the approHng legal opinion of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel.
Certain legal matters will be passed upon for the County by Suzanne Hutton, County Attorney, and Bryant Miller Olive, Tampa, Florida, Disclosure Counsel. Squire, Sanders
& Dempsey L.L.P. is serving as Underwriter's Counsel. Moyle, Flanigan, Katz, Raymond, White & Kraske, P.A. is serving as Letter of Credit Bank's Counsel, Public
Financial Management, Inc., Fort Myers, Florida is Financial Advisor to the County in regard to the issuance of the Series 2006 Bonds. The Series 2006 Bonds in definitive
form are expected to be available for delivery in New York, New York through the facilities of DTC on or about July 19, 2006.
UBS INVESTMENT BANK
Dated: July 18, 2006
10
In
F. ADVANCED PRINCIPAL RETIREMENT
As stated above, the plan of finance for the 2006 Project calls for the application of $4,600,000
in anticipated future AIP entitlement grants funds to the advanced payment of Series 2006 Bonds
principal in equal amounts over the course of two (2) years (Fiscal Year 2007 through Fiscal
Year 2008). In addition to these AIP grant funds, the plan of finance calls for the application of
approximately $8.7 million in anticipated future FDOT grant funds to the advanced payment of
Series 2006 Bonds principal in varying amounts over the course of five (5) years (Fiscal Year
2006 through Fiscal Year 2010).
As a result of the application of these grant funds, it is estimated that principal outstanding on the
Series 2006 Bonds will be reduced by $14,978,000 by Fiscal Year 2011 resulting in an estimated
remaining outstanding principal amount of $15,476,000 at that time. Table II4 depicts the
application of AIP Entitlement grant funds and FDOT grant funds to the advanced payment of
principal outstanding on the Series 2006 Bonds.
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Newton & Associates, Inc.
C- 12 Report of the Airport Consultant
G. PFCS APPLIED TO SERIES 2006 BONDS DEBT SERVICE
C
The County has applied to and received approval from the FAA for the collection and use of
certain PFCs for the payment of the PFC eligible portions of the Series 2006 Bonds debt service.
The plan of finance for the 2006 Project assumes that 100% of the Series 2006 Bonds debt
service will be PFC eligible and payable from PFCs (except for the advanced payment of
principal to be paid with FDOT and AIP grant funds)'.
The estimated amount of annual PFC collections and their application toward the payment of
debt service on the Series 2006 Bonds are presented on Table II-4. Based on (i) the estimated
amount of PFC collections prior to and accumulated during the period in which interest is being
capitalized on the Series 2006 Bonds (second half of Fiscal Year 2006, Fiscal Year 2007 and the
first half of Fiscal Year 2008) and (ii) the advanced repayment of outstanding principal on the
Series 2006 Bonds for each Fiscal Year, annual PFC collections and certain PFCs accumulated
in the PFC Capital Improvement Fund would be sufficient to pay the annual debt service payable
for each such year. Furthermore, it is estimated that an aggregate amount of PFCs sufficient to
pay all the PFC eligible debt service on the Series 2006 Bonds would be collected by the County
by Fiscal Year 2027.
H. THE BOND RESOLUTION
The proposed Series 2006 Bonds are to be issued under the terms and conditions of the Airport
Revenue Bond Resolution ("Resolution") describing the terms for the sale of the Series 2006
Bonds and adopted by the County on June 21, 2006. A summary of certain terms and conditions
of the Resolution is provided in Section V hereof.
I. AIRPORT IMPROVEMENT PROGRAM GRANTS
Congress began appropriating money for airport development in 1946 through the enactment of
the Federal Airport Act and since has subsequently enacted a series of laws in support of the
national air transportation system. In 1970, the Airport and Airway Revenue Act of 1970 was
enacted which established the Airport and Airways Trust Fund ("Trust Fund") to pay for needed
airport improvements. The Trust Fund is supported by a series of taxes on the users of the
national air transportation system through charges on passenger rickets, cargo waybills, aviation
jet fuel, etc.
The Airport and Airway Improvement Act of 1982 ("1982 Act") authorized the capital grant-in-
aid program known as the Airport Improvement Program which authorizes and appropriates
funds for eligible airport improvements. The AIP is funded by the Trust Fund and administered
by the FAA. AIP eligible projects include (i) airport planning; (ii) airport development; (iii)
noise compatibility programs (80% at large and medium hub airports); and (iv) terminal
development at all but large hub airports. An airport must be included in the National Plan of
' See Section II (K) for a discussion on PFC eligibility of the 2006 Project and FAA approval status.
Newton & Associates, Inc. C-13 Report of the Airport Consultant