Board of County Commissioners
Agenda Request

Statement of Issue:
This agenda item requests Board approval of a Resolution that updates their existing interlocal agreement with Jackson and Gadsden Counties regarding the Florida Rural Utilities Financing Commission (Attachment #1). 

Background:
On April 1, 1999, Wakulla County approved an interlocal agreement with Jackson County and Gadsden County, respectively, to create the Florida Rural Utility Financing Commission (FRUFC).  Since that time, the FRUFC has provided interim financing to eligible tax-exempt entities in the state for their drinking water and wastewater projects who are awaiting permanent project financing from either FDEP-SRF or USDA-RD.  This interim financing (up to five years) provided by the FRUFC enables a local government to proceed with construction on these critical projects as compared to seeking bridge financing from a local bank or seeking other bonds directly: often a challenging process with higher costs.  Upon the creation of the FRUFC, the county administrator was selected to serve as Wakulla County’s representative on this body and continues to serve in that capacity today – presently as Vice-Chairman (Attachment #2). 

The FRUFC normally collects applicant projects from across the state into groups.  When a sufficient number of projects are pooled together and an economy is achieved, the FRUFC pursues one bond issue for the cost saving benefit to all.  This process results in a bond deal at a better rate and lower issuance cost to borrowing local governments:  usually far improved than what could be achieved by “going alone.”  Through a series of comprehensive loan agreements between the FRUFC and each borrower, one borrower does not negatively affect the terms for other borrowers in this pooled approach, and the supporting counties, including Wakulla County, do not have any pledged financial commitment or fiscal exposure.   

Since inception, numerous Florida governments have benefited from the wisdom of the founding counties (including Wakulla County) in creating the FRUFC.  In fact, the upcoming sewer expansion into Wakulla Gardens and related enhancements may tap this interim financing resource to the betterment of this priority Wakulla County project.

Analysis:

As will be presented further to the Board during their September 22nd Workshop on Sewer issues, the state’s DEP revolving fund program to finance critical water and wastewater projects has been immensely successful.  As the Board may recall, it is this low-interest financing option that we are targeting for our $20 million wastewater improvement project.  In fact, the state’s program has proven so successful that there presently exists a $1 billion + backlog of projects waiting for state DEP-SRF funding.  For comparative purposes, the state program can process about $100 million of these projects in an average year.  As such, the interim financing provides by the FRUFC has received enhanced attention by the state in recent months and the attention of tens of local governments with well-vetted water and wastewater projects that are in queue for state funding prior to beginning their needed improvements. 

In fact, representatives from the state DEP have recently petitioned the FRUFC to consider expanding our interim financing programs to provide long-term financing to water and wastewater projects that the state has approved or intend to approve but for which they don't have funding.  As the demand for state financing programs has hit new peaks to which the state FDEP is having difficulty managing alone (for necessary capital projects to expand, replace or construct new drinking water and wastewater facility needs across the state), an enhanced partnership is being developed.  Without intervention by the FRUFC, many of these projects that can not wait for SRF funding or delay project construction (due to public health or environmental protection concerns), would be forced to face higher financing costs and increase their fiscal exposure.

The attached update to the enacting resolution for the FRUFC, which was prepared by legal counsel of the Florida Rural Water Association, seeks only to modify and update the governing charter of this entity in two key ways:  1) by dropping “rural” from the organization’s name to reflect its enhanced statewide role, and 2) by allowing for enhanced financing options to be provided to petitioning local governments, potentially including Wakulla County, to include long term financing options that extend beyond five years (in accordance with state DEP request).  No increased fiscal exposure to the creating entities of Wakulla, Gadsden and Jackson Counties is anticipated from this resolution update.  Approval of similar resolutions are being pursued and approved during August by the Boards of Gadsden and Jackson Counties.  Pending the review of the County Attorney, at this time, staff encourages Board approval of this resolution (Option #1).

Options:

1. Approve the Resolution amending and updating the inter-local agreement of the Florida Rural Utility Financing Commission.
2. 2.Do not approve the resolution.
3. Board Direction.

Recommendation:
Option #1

Attachments:

1. Proposed Resolution No. 2008-XX, Amending the Existing Interlocal Agreement of the Florida Rural Utility Financing Commission.
2. January 11, 2000 First Amended and Restated Interlocal Agreement of the Florida Rural Utility Financing Commission.

BHP