BRADENTON, Fla. — The South Florida Water Management District has hired Public Financial Management as the financial adviser for the sale of up to $1.8 billion of certificates of participation to accelerate completion of eight environmental restoration projects in the Florida Everglades.
Water management district board members, meeting on Wednesday, were told that the contract with PFM had been signed and that work is under way preparing to take bids to obtain a bank loan for interim financing, Paul Dumars, the district’s chief financial officer, said yesterday.
The water management district is a state agency that oversees water resources in 16 South Florida counties as well as a major portion of the Everglades.
The eight projects being financed with COPs, a program dubbed Acceler8, are part of the state-federal Everglades restoration plan estimated to cost $8.4 billion. The cost has slowed work on the restoration plan, so the COP financing plan was devised to fast-track completion on eight projects.
District managers currently are determining how the projects will be designed, engineered and constructed.
“The state of Florida is really in dire need of major restoration, particularly in South Florida, so to get it done early is the challenge,” Dumars said. “We are finalizing our immediate funding needs and looking to use as much in cash balances as we can afford for some of the early phases. We’ll probably do one bank loan before COP issuance.”
Since this is believed to be a new financing mechanism for environmental restoration, documents seeking legal validation of the COPs were expected to be filed in court yesterday, Dumars said.
“We think to use this method of financing is precedent-setting,” said Dumars.
The nonprofit South Florida Water Management District Leasing Corp. — a new credit in the bond market — has already been created to sell the debt, which will be secured by ad valorem taxes assessed by the water management district as well as available revenues.
Rating agencies and insurers are expected to receive presentations in the spring.
The tentative plan is to issue COPs in five to seven tranches with the first issuance coming to market in mid to late 2006. The first tranche is expected to take out the short-term financing.
