Public Hearing Benefit Special Assessments and Recreation
Bonds - Series 2019
November 21, 2019

Viera East Community Development District Boundaries

VIERA EAST COMMUNITY DEVELOPMENT DISTRICT COMPONENTS
31 SUBDIVISIONS/COMMUNITIES
APPROXIMATELY 4,200 HOMES
APPROXIMATELY 205 ACRES OF COMMERCIAL PROPERTIES
OVER 1,000 ACRES OF WETLANDS & CONSERVATION AREAS
SCRUB JAY HABITAT
84 CDD MAINTAINED RETENTION PONDS
5+ MILES OF SIDEWALKS AND BIKE PATHS
RESTAURANT – LEASED TO THIRD PARTY
WOODSIDE PARK
VARIOUS INFRASTRUCTURE MAINTENANCE AREAS THROUGHOUT CDD
NATURAL AREA TRAILS
18 HOLE CHAMPIONSHIP GOLF COURSE AND PRACTICE RANGE
CDD EMPLOYS 50 STAFF MEMBERS (Including Golf Course)
VISIT THE CDD WEBSITE: WWW.VIERAEASTCDD.COM

CDD Accomplishments
Lake Bank Restoration – CDD Owns 33.1 miles of lake banks
Restores 2,000 linear feet per year
10k LF since 2015
Fire Line Maintenance
Over 51k linear feet per year – 1/3 per year
TifEagle Greens and Putting Surfaces Added – 2016 – Improved play on the course, increased play since installation
EZ Links Software and Tee Time System – 2017 – Improved ability to sell rounds of golf
New Rainbird Pump Station – 2018 – Improved reliability and reduced downtime. Will be compatible with any future upgrades.
Mike Hogan Golf School for Youth Since 2014 – Approx. 100 students per Summer

Current FY 2020 Assessment Rates

Current Assessment Breakdown
Recreation - Operations,
$13.18, 2%

Recreation Bond, $115.49, 17%
General Fund,
$135.95, 20%

Water Mangement Debt, $413.74, 61%

Water Management Debt Fund (Series 2006 Bond)
Assessments Fund Principal and Interest
Remaining Debt at Start of FY 2020: $6,425,000
Fully Paid Off on 5/1/2022
FY 2020 Adopted Budget (Series 2006 Bond):
Beginning Fund Balance: $179,548
Assessments: $2,423,170
Interest Income: $1,500
Bond Interest: ($369,438)
Bond Principal: ($2,020,000)
Other Debt Service Costs: ($46,873)
Ending Fund Balance: $167,908 (Projected remaining at end of FY 2020)
Remaining Debt at End of 2020: $4,405,000

General Fund
General CDD Administration
Park Maintenance
Lake Maintenance
Fire Line Maintenance
Conservation Area Maintenance
FY 2020 Budget Summary
Assessments and Other Revenues - $864,536
Expenses – ($864,536)

Recreation Fund Assessment
Assessment ($128.67 per unit) - $622,056 (net)
Expenses
Recreation Operations – $51,777
Recreation Debt (Series 2012 Bond) – $558,355
Remaining Debt at start of FY 2020: $3,305,000
Series 2012 Bond Fully Paid Off on 5/1/2026
Bond Interest – ($156,825)
Bond Principal – ($410,000)
Interest Income – ($1,000)
Ending Debt - $2,895,000

Recreation Revenues and Golf Rounds

	FY 2019	FY 2018	FY 2017	FY 2016	FY 2015	FY 2014	
Recreation Revenue	$1,764,662	$1,769,952	$1,631,399	$1,243,463	$1,282,146	$1,349,661	
Expenses (Net of Transfer)	$1,741,079	$1,714,841	$1,597,625	$1,407,736	$1,272,534	$1,291,992	
Effective Income	$23,583**	$55,111	$33,774	($164,273)*	$9,612	$57,669	
							
Rounds of Golf	52,632	52,534	52,709	41,968	42,209	40,626	

*FY 2016 – Installation of new grass on 20 greens, putting green, and irrigation heads
**FY 2019 – Loss of 15 days of play more than FY 18 due to weather, reduction of approx. $68k

Series 2019 Bond Projects

Woodside Park Improvements
Restroom Improvements
Dog Park
Replacement Playground
Rentable Pavilion – For Individuals or Businesses

District Wide Sidewalks

Sidewalk Repairs throughout the CDD Maintained Sidewalks 1,280 square feet

Golf Course Irrigation System
Using state-of-the-art computerized control systems, portable hand-held controllers, and variable frequency drive pumping systems to apply water in the most efficient means to reduce water and energy consumption
Improved irrigation uniformity through careful evaluation of sprinkler head design, nozzle selection, head spacing, pipe size and pressure selection
The use of sophisticated on-site weather stations will help determine accurate daily irrigation replacement needs, thus reduce over-irrigation
Current system is original, and is over 25 years old
New system reduces downtime, increases watering efficiency, and improves playability and playtimes available

Golf Course Irrigation System

Golf Course Club House
Current clubhouse is original and over 25 years old
New kitchen, dining room, and covered outside seating
Revenue to be generated from potential facility lease
Facilities can be used by anyone, not just golfers
Renovate the CDD offices and a new conference room
Conference Room available for community and business group rentals
Renovate and enlarge the golf pro shop
Renovate and enlarge men’s and women’s restrooms

VIERA EAST  GOLF CLUB
PROPOSED RENOVATION ILLUSTRATION	5-6-2019
■

Bunker Renovation
Capillary concrete bunker liners and new drainage pipe
66 bunkers
One of the major architectural features of the course
New Bunkers will have a 20-25 year life
Reduction in Maintenance Needed by Staff

Bunker Renovation

Replace Golf Course Bulkheads

Replace Golf Course Bulk Heads
Current Bulkheads Require Replacement, over 25 years old and deteriorate as they age
1,000 LF of structural bulk heads supporting 5 greens complexes
Major architectural features of the course
Addresses Health Safety/ Potential Liability Concerns

Other Major Improvements
Tee Box Renovation
Cart Path Extension and Renew & Repair
Maintenance Building Renew & Repair
Lake Bank Restoration – 9,100 LF
Regrassing Fairways

Options for Financing Projects
O & M Increase
One Time – Approx. $1,800/home/ERU
Over Several Fiscal Years – Multiple Phases
Debt Options
Issue Debt – Pay Now - Minimum Capitalized Interest
Wait to Issue Debt Until WM Paid Off (2022)
Issue Debt – Capitalize Interest until 2023

Benefits of Recommended Plan
Complete Projects Now
Lock In Historically Low Interest Rates
Assessments Remain at Current Levels Until Water Management Bond Paid Off
Assessment Costs Spread Over Property Benefitting from Improvements for Next 20 Years

Important Notes
Any project funds not spent for projects listed in ER would be refunded against outstanding Bonds
Projects will be bid in accordance with Florida Statutes before completed – current projects costs estimated using best engineering and industry standards

Bond Approval History
1992 – CDD Went Through Bond Validation Process and Received A Final Judgment Authorizing the Issuance of Bonds in the Total Principal Amount of $19MM to be spent in a series of projects for recreational improvements
CDD issued $7,730,000 in total Principal for First Series of Projects in 1992
There is $11,270,000 in Principal Remaining Under Original Validation to be Used in this Series of Projects

Series 2019 Bonds

Series 2019 Bonds
– Estimated Sources & Uses

2019 Project Funds	$9,092,913	
Debt Service Reserve	$284,550	
Capitalized Interest	$1,024,281	
Underwriter Discount	$169,050	
Bond Insurance	$321,068	
Cost of issuance	$200,000	
Surety Bond	$9,959	
Issue Discount	$168,179	
	$11,270,000	
		
Average Coupon Rate	3.01%	
Amortization	20 years	
Capitalized Interest	Through 11/1/2022	
Max Annual Payment	$1,138,200	
		
Series 2019 – Estimated Project Costs
Golf Course			
	Irrigation System	$2,080,000	
	Bunker Renovations & Liners	$1,100,000	
	Bulkhead Replacement	$375,000	
	Tee Box Renovations	$250,000	
	Cart Path Extensions	$175,000	
	Regrass Fairways and Slopes	$150,000	
	Maintenance Building Repair	$40,000	
	Driving Range Tee - Level and Enlarge	$35,000	
	Golf Course Lake Bank Repair	$275,000	
	Rebuild #7 Green	$65,000	
	Drainage #6 Left Rough	$30,000	
	#11 Canal Side - Rough Regrade	$25,000	
	Fountain Aerators	$27,500	
	Drinking Water/Ice Stations	$32,000	
	Irrigation Pump Filter	$35,000	
	Culvert Repair	$37,500	
	Maintenance Equipment	$395,000	
	Lost Revenue	$287,395	
	Irrigation Pump Station Lease	$163,190	

Series 2019 – Estimated Project Costs

	Clubhouse Renovations	$2,900,000	
			
Recreation Facilities			
	Woodside Park - Restroom	$25,000	
	Woodside Park - Dog Park	$55,000	
	Woodside Park - Playground	$45,000	
	Sidewalk Repairs	$75,000	
	Pavilions	$95,000	
			
	Contingency	$250,000	

	Total All Projects	$9,022,585	

Series 2019 Bonds
Projected Average Coupon Rate – 3.014%
20 year Bond Repayment Schedule
Capitalized Interest through 11/1/2022
First Principal Payment in 2023
Paid Off in 2038
Per House
Par Debt: $2,244.48
Total Bond Gross Assessments Through Amortization: $2,967.55

$600
Projected Residential Assessments with 2019 Project
$679	$679	$679	$679	$679	$679	$679
$129	$129	$129	$129	$129	$129	$129

$400

$200

$414	$414	$414	$414	$414	$414	$414
$447	$447	$447	$449

$182	$182	$182	$241

$129	$129	$129

$334

$182
$72	$16
$136	$136	$136	$136	$136	$136	$136	$136	$136	$136	$136	$136
$0
2016	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027
Series 2019	Recreation*	Water Management Debt	O & M*
* - Assessments can fluctuate based on annual budget process

Projected Commercial Assessments with 2019 Project, for 1 acre

$6,000
$5,609	$5,609	$5,609	$5,609

$4,500

$3,000

$1,500
$3,835
$3,835
$3,835
$3,835

$2,502	$2,502	$2,502	$2,512

$2,051

$64

$1,260
$0
$1,260
$1,260
$1,260
$1,260
$1,260
$1,260
$1,260
$1,260
2019	2020	2021	2022	2023	2024	2025	2026	2027-2038
O & M*	Water Management Debt	Recreation*	Series 2019	Total

* - Assessments can fluctuate based on annual budget process

Total CDD Bond Assessments

	2020 -
Current	2027 - with
Series 2019	
Residential Unit	$529	$182	
			
Commercial Acre	$4,297	$727	

Resolution 2020-04
To be considered by Board tonight:
Finds and Determines to undertake the Project and issue the Bonds
Authorizes the Project as described in the Engineer’s Report
Identifies the total estimated costs of the Project
Equalizes, confirms and approves of the Benefit Special Assessments contained in the Assessment Report
Provides for finalizing the Benefit Special Assessments when the Project is complete, allowing for credits if the cost is less than estimated

Resolution 2020-04
To be considered by Board tonight:
Provides for the Payment Terms and Method of Collection of the Benefits Special Assessments
Confirms the intention to issue District Bonds
Provides for a requirement that Benefit Special Assessment be prepaid prior to a transfer of assessed real property to the government
Provides that a Notice of Assessment be recorded in the official records of Brevard County
Repeals and Replaces Resolution 2019-04

Questions from the CDD Board?

Viera East
Community Development District
November 21, 2019 Public Hearing

Presented by
MBS Capital Markets, LLC

Selection of an Underwriter

The partners of MBS have been the underwriters of record for VECDD since 2002 with history with the District dating back to 1996.

There are two major firms with familiarity with the specialized nature of CDD Bonds, MBS and FMS. CDD Bonds are specialized and require a story for the marketing and sale to potential investors/bondholders. Due to the history of MBS with the District since 1996 MBS is in the best position to tell the story for not only the sale of the bonds but for the ratings and bond insurance providers in order to achieve the best interest rates possible.

Of the two firms in this business, the average fee charged by FMS from 2017 to date for new money transactions is 2.042%. The average fee charged by MBS is 2.0. By contract with VECDD, MBS has agreed to charge 1.5%. This lower fee is due to our knowledge and experience with the District since 1996.

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Interest Rate Environment

The Board determined the issuance of the long-term bonds during their meetings held between February and July of 2019 based upon 2 factors:
The historical low interest rate market;
The need for certain improvements for the health and safety of the community.
A Comparison of Interest Rates from August 2019 to Present (November 13, 2019)

Interest Rates	August 2019	November 2019	Variance	
MMD	Rates	(2038
maturity)	1.64	2.01	+ 0.37	

Municipal bonds for credits such as Viera East will typically trade at 145 to 150 bps above the AAA Municipal Bond Buyer Index.
An investment grade rating and insurance will provide an additional 30 to 50 bps savings on interest rate.
MBS was able to obtain an investment grade rating on the proposed bonds of BBB+ from Standard and Poors.
MBS was able to obtain a bond insurance commitment from AGM which would have decreased the interest rate approximately 35 bps. (Due to the litigation, the insurance commitment was rescinded).
Interest rates, based on the table above, have increased 37 basis points as of November 13, 2019.
It is unknown where interest rates will be in 2020 after the resolution of the litigation or whether the District will be able to re-secure the bond insurance commitment. With interest rates being at an historical low in mid-2019, it is projected they can only go up from there.

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The 30-Year MMD - Snapshot

30 Year MMD means as of any particular date, an interest rate equal to the Municipal Market Data Index for general obligation bonds having an “Aaa”, “AAA” or “AAA” credit rating from Moody’s, Standard and Poor’s
or Fitch, respectively, having a term equal to 30 years.	42

The 30-Year MMD - Snapshot

30 Year MMD means as of any particular date, an interest rate equal to the Municipal Market Data Index for general obligation bonds having an “Aaa”, “AAA” or “AAA” credit rating from Moody’s, Standard and Poor’s
or Fitch, respectively, having a term equal to 30 years.	43

The Proposed Series 2019 Bonds

MBS prepared two additional financing scenarios for this public hearing. These scenarios assume a closing in 2020.
The first 2020 scenario reflects funds to be included in the bond proceeds that would pay the interest on the bonds until 11/1/2022 thereby eliminating any impact on the property owner’s total assessments until 2023 when the current Series 2006 Water Management Bonds are paid in full.
This scenario resulted in total debt service paid per unit, including principal and interest, of $2,655.41.
This equates to average annual debt service per unit of $165.96 (including principal and interest) over 16 years.
The second 2020 scenario reflects funds to be included in the bond proceeds that would pay the interest on the bonds until 11/1/2020, the minimum period prior to when the new assessments could be levied for collection. This scenario would reflect the new assessment to the property owners beginning in November 2020.
This scenario resulted in total debt service paid per unit of $2,619.94.
This equates to average annual debt service per unit of $145.55 (including principal and interest) over 18 years.
The difference between the two 2020 scenarios is $35.47 per unit for the life of the bonds ($2,655.41 - $2,619.94). This equates to an average of $1.97 per unit per year. This means that keeping the total annual assessments level and waiting until 2023 to start the new assessments only costs each individual unit, on average, a $1.97 per year.

44

The Projected Annual Assessments

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