Hillsborough County Public Schools Business
Action Item

DATE: Tuesday, June 10, 2008
TO: School Board Members
FROM: MaryEllen Elia, Superintendent

SUBJECT / RECOMMENDATIONS

Partial Refunding of Certificates of Participation (COPs), Subseries 1998A (the "Refunded Certificates")(Business Division)

  1. Adopt the Board Certificate Resolution authorizing the refunding of the Refunded Certificates in accordance with the 2003 UBS Agreement. Authorize the use of Wachovia Bank Letter of Credit and Wachovia Bank as Underwriter and Remarketing Agent. Authorize staff to work with the District's Financial Advisor and Bond Counsel to proceed with the refunding as long as market conditions remain favorable.
  2. Recess as members of the School Board and convene as the School Board Leasing Corporation.
  3. Adopt the Corporate Resolution authorizing the refunding of the Refunded Certificates.
  4. Adjourn as members of the School Board Leasing Corporation and reconvene as the School Board.

EXECUTIVE SUMMARY

In 2003 the School Board entered into a forward delivery interest rate exchange agreement with UBS AG. Pursuant to the terms of the agreement the District received a payment from UBS similar to the amount that it would have received had it been able to refund the Refunded COPs in 2003, which it could not do as a result of certain restrictions contained in the Internal Revenue Code applicable to tax exempt obligations such as the Refunded Certificates. In exchange for the payment to the District, UBS was granted the right to deliver the agreement commencing July 1, 2008 and in connection therewith it is necessary that the District refund the Refunded Certificates with variable rate refunding COPs, the interest on which will enable the District to manage its interest expense under the agreement. The new COPs will be secured by a direct pay letter of credit issued by Wachovia Bank, similar to the recently completed conversion of the Series 2004C COPs.

The refundings will be dependent upon market conditions. This agenda item has been reviewed as to legal form and sufficiency by John Stokes, Bond Counsel.

ANNUAL DISTRICT GOAL(S) AND CRITICAL SUCCESS FACTOR(S)

This agenda item is submitted to meet the requirements of law or rule. Mr. Ritesh Patel, Bond Counsel and Mr. Jerry Ford, Financial Advisor are present today to assist the Board in this endeavor.

FINANCIAL IMPACT (Budgeted: No)

The refunding of portions of the 1998A COPs issue is part of the District's program to maximize it's bonding capacity, thus enabling the taxpayers to realize additional school construction resources in excess of $1.6 million.

EVALUATION

SUBMITTED BY: Steve Brady, Assistant Department Manager of Cash Management

Susan Garcia
Manager of Services and Support, Budget
(813) 272-4064
Gretchen Saunders
Chief Business Officer
(813) 272-4270
A 5.19
Hillsborough County Public Schools (Florida) * Mtg.#20080610_330 * Section A Item# 5.19