Subject:
Title
Resolution authorizing the issuance of Non-Ad Valorem Refunding Revenue Bonds, Series 2026
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Fiscal Impact:
The fiscal impact of this requested action will be to refund the Local Option Fuel Tax Refunding Bonds, Series 2016, resulting in approximately $2.7 million in present value interest savings.
Dept/Office:
County Manager/Central Services
Requested Action:
Recommendation
It is requested that the Board of County Commissioners adopt a Resolution authorizing the issuance of a Brevard County, Florida Non-Ad Valorem Refunding Revenue Bonds, Series 2026, not exceeding $50 million in aggregate principal amount and a present value saving of at least 4 percent. Delegate authority to the Chair to execute the Resolution and various closing documents relating to the issuance of the Series 2026 Bonds and authorize the County Manager to approve all necessary budget amendments (BCRs) to implement this requested action.
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Summary Explanation and Background:
The Local Option Fuel Tax Bonds, Series 2016, have a principle amount of $48,795,000 outstanding and have an initial call date of August 1, 2026. Because of tax law restrictions, the County must wait until the Refunded Bonds are eligible for refunding, which means the refunding cannot close more than 90 days prior to the initial call date of August 1, 2026. It is estimated that, under current market conditions, the County could realize approximately $2.7 million in net present value debt service savings and a reduction in annual debt service payments of $262,000 through the final maturity in 2037.
The County’s Financial Advisor, PFM, recommends that the County move forward with the financing documents and undertake the transaction if debt service savings are equal to or exceed 4 percent of the Refunded Bonds' par amount. This savings threshold is consistent with the Board Policy BCC-21, “Budget and Financial.” To provide the lowest interest rate and maximize debt service savings, PFM recommends that the County complete the refunding by issuing Non-Ad Valorem Refunding Revenue bonds, Series 2026, secured by a covenant to budget and appropriate legally available non-ad valorem revenues. The credit would likely result in a higher credit rating (AA category) versus the local option fuel tax pledge (A category). The County will still use the local option fuel taxes to make the actual debt service payments.
The requested transaction would be completed with the County’s current financing team, made up of County Staff, Clerk of Court Staff, PFM, County’s Financial Advisor, Nabors Giblin & Nickerson, County’s Bond Counsel, and Bryant Miller Olive, the County Disclosure Counsel. The refunding bonds would be sold through a competitive sale and awarded to the bidder offering the lowest true interest cost.
Due to funding constraints in the FY 2025-26 Budget, the County’s Public Works Department’s Road Resurfacing and Road Reconstruction programs were not funded sufficiently to recognize the effect that the consumer price increase had on these programs during the past year. Therefore, it is recommended that savings from the Non-Ad Valorem Refunding Bonds, Series 2026, will be used to restore funding to the County’s Road Reconstruction and Road Resurfacing programs. This investment in our infrastructure will preserve our road network for the future.
Clerk to the Board Instructions: