Capital Budget Update Presented to the Board of County Commissioners October 14, 2008
Interest Rate Environment DateRate 9/111.89% 9/185.82% 9/257.34% 10/25.33% 10/94.50% We continue to see some improvements in the interest rate environment. Since the spike in mid-September, rates continue to fall.
Remarketing of Bonds Remarketing Bank Amount Tendered Liquidity Bank Terms of Standby Purchase Agreement Wachovia$160.3 million DEPFAInterest rate: 1 st 90 days: prime After 90 days rate goes to prime + 1% Redemption Provision: After 90 days, accelerated redemption of O/S principal in six fiscal years. Paid annually. Wachovia$5.8 millionHelabaInterest rate: 1 st 30 days = prime 31 days to 180 days = prime + 1% 181+ = prime +2% Redemption Provision: After 90 days, accelerated redemption of O/S principal in five years. Paid quarterly. Citigroup$4.6 millionBank of America Interest rate: LIBOR plus 90bps – must maintain AAA rating – or rate increases to prime. Redemption Provision: Payment of O/S principal due upon expiration of agreement.
Financial Exposure Debt service would increase significantly due to the accelerated redemption provision On DEPFA bank bonds, principal payments would increase from $9.9 to approximately $27.7 million Options: Replace Liquidity Provider & Remarketing Agent Convert bonds from weekly reset to one-year bond Convert variable rate to fixed rate bonds
Update on Bond Sale Met with most departments No new contracts requiring capital dollars should be executed. Immediate cash needs being identified
Projected Sale Amount
Possible Deferred Projects Projects impacted by reduced sale amount: Freedom Mall – Phase 3 (Hal Marshal Relocation) IST Data Center Taylor Renovation – CPCC Center for Automotive Technology – CPCC Parking Deck – CPCC Bahakel Broadcast Center – CPCC Van Every Replacement – CPCC Harper Campus 3 Land acquisition activities Construction activity on 20 school projects Ed Center Replacement Second Ward Park – Phase 1 Brooklyn Village Infrastructure Up fit of various Park & Recreation facility projects
Time Line Continue to monitor the situation 12/2/08: Seek Board approval for COPs 1/6/09: Seek Board approval for Bonds
Questions