board of directors meeting - florida municipal power agency · pdf fileboard of directors bill...

Board of Directors

Bill Conrad, Newberry, Chairman Larry Mattern, Kissimmee Barbara Quiñones, Homestead – Vice Chairman Clay Lindstrom, Lake Worth William Thiess, Fort Pierce, Treasurer Patrick Foster, Leesburg Lynne Tejeda, Key West, Secretary Alan Shaffer, Lakeland Gary Hardacre, Alachua Harry Ogletree, Moore Haven Bradley Hiers, Bartow Charles Revell, Mount Dora Vacant, Blountstown W. Ray Mitchum, New Smyrna Beach Bruce Hickle, Bushnell Sandra Wilson, Ocala Elmon Lee Garner, Chattahoochee Claston Sunanon, Orlando Danny Williams, Clewiston Mike Wade, Quincy Fred Hilliard, Fort Meade Donna Cooley, St. Cloud David Beaulieu, Gainesville Ricky Thompson, Starke Vacant, Green Cove Springs Randy Old, Vero Beach Howard McKinnon, Havana Terry Atchley, Wauchula Harry Royal, Jacksonville Beach Scott Lippmann, Williston Jerry Warren, Winter Park

Meeting Held 10:00 a.m.

Thursday, February 19, 2015 Florida Municipal Power Agency

8553 Commodity Circle Orlando, Florida 32819

Report

Board of Directors Meeting February 19, 2015

10:00 AM

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MEMORANDUM TO: FMPA Board of Directors FROM: Nicholas P. Guarriello DATE: February 17, 2015 RE: Special Called Board of Directors Meeting Thursday, February 19, 2015 – 10:00 a.m. PLACE: Florida Municipal Power Agency, 8553 Commodity Circle, Orlando, FL 32819 Chairman Bill Conrad, Presiding

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AGENDA

1. Call to Order, Roll Call, Declaration of Quorum ................................................... 4

2. Recognition of Guests ............................................................................................ 5

3. Public Comments (Individual Public Comments to be Limited to 3 Minutes) ... 6

4. Set Agenda (by vote) .............................................................................................. 7

5. Report from the General Manager (Nicholas Guarriello) ..................................... 8

6. Consent Agenda a. Approval of Minutes – Board of Directors Meeting Held January 22, 2015 ....... 10 b. Approval of the Projects’ Financials as of December 31, 2014 ......................... 14 c. Approval of the Treasury Reports as of November 30, 2014 (pulled from January

22, 2015 Board of Directors meeting) and December 31, 2014 ........................ 16

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FMPA Board of Directors Meeting Being Held February 19, 2015 Page 2

7. Action Items

a. Approval of Resolution 2015-B1 – Authorizing the Commencement of CR-3 Decommissioning on Behalf of the CR-3 Municipal Joint Owners (Dan O’Hagan) ..................................................................................... 25

b. Approval of an Increase in Lobbying Expenditures (Nick Guarriello) ................. 32

8. Information Items a. Annual Debt Report (Ed Nunez) ........................................................................ 40

b. Syncora Buys Majority Stake in Swap Financial Group

(Mark Larson/Nat Singer) .................................................................................. 46

9. Member Comments ............................................................................................... 55 10. Adjournment.......................................................................................................... 56 NPG/su

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AGENDA ITEM 1 - CALL TO ORDER, ROLL CALL, DECLARATION OF QUORUM Board of Directors Meeting February 19, 2015

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AGENDA ITEM 2 – RECOGNITION OF GUESTS Board of Directors Meeting February 19, 2015

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AGENDA ITEM 3 – PUBLIC COMMENTS (Individual Public Comments Limited to 3 Minutes) Board of Directors Meeting February 19, 2015

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AGENDA ITEM 4 – SET AGENDA (By Vote) Board of Directors Meeting February 19, 2015

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VERBAL REPORT AGENDA ITEM 5 – REPORT FROM THE GENERAL MANAGER Board of Directors Meeting February 19, 2015

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AGENDA ITEM 6 – CONSENT AGENDA

a. Approval of Minutes – Board of Directors Meeting Held January 22, 2015 Board of Directors Meeting February 19, 2015

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CLERKS DULY NOTIFIED ............................................................... JANUARY 13, 2015 AGENDA PACKAGES/CDS SENT TO MEMBERS ......................... JANUARY 13, 2015 LEGAL AD PUBLISHED .................................................................. JANUARY 19, 2015

MINUTES FMPA BOARD OF DIRECTORS MEETING

FLORIDA MUNICIPAL POWER AGENCY 8553 COMMODITY CIRCLE

ORLANDO, FL 32819 THURSDAY, JANUARY 22, 2015

10:00 A.M. MEMBERS Bruce Hickle, Bushnell (via phone) PRESENT Lee Garner, Chattahoochee (via phone)

Danny Williams, Clewiston (via phone) Fred Hilliard, Fort Meade (via phone) Bill Thiess, Fort Pierce David Beaulieu, Gainesville (via phone) Howard McKinnon, Havana Barbara Quiñones, Homestead Harry Royal, Jacksonville Beach Lynne Tejeda, Key West Larry Mattern, Kissimmee Patrick Foster, Leesburg Bill Conrad, Newberry Sandra Wilson, Ocala Mike Wade, Quincy Donna Cooley, St. Cloud (via phone) Randy Old, Vero Beach Jerry Warren, Winter Park (via phone)

OTHERS Paul Jakubczak, Fort Pierce PRESENT Mike Perri, Fort Pierce Grant Lacerte, Kissimmee

Greg Woessner, Kissimmee Bill Polk, Leesburg David Anderson, Ocala Mike Poucher, Ocala Diane Reichard, Ocala Craig Dunlap, Dunlap and Associates Donna Painter, nFront Consulting Tim Zorc, Indian River County Commissioner Matt Williams, Bank of America Merrill Lynch David Thornton, Wells Fargo Helen Painter, Purvis & Gray Mark White, Purvis & Gray

STAFF Nick Guarriello, General Manager and CEO Board of Directors Meeting Minutes 1 January 22, 2015

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PRESENT Fred Bryant, General Counsel Jody Finklea, Assistant General Counsel and Manager of Legal Affairs Frank Gaffney, Assistant General Manager, Power Resources Mark McCain, Assistant General Manager, Member Services, Human Resources and Public Relations Sue Utley, Executive Asst./Asst. Secy. to the Board Michelle Pisarri, Power Resources Secretary II Carol Chinn, Regulatory Compliance Officer Bud Boudreaux, Executive Consultant Janet Davis, Treasury Manager Ed Nunez, Assistant Treasurer

ITEM 1 - CALL TO ORDER, ROLL CALL AND DECLARATION OF QUORUM Chairman Bill Conrad, Newberry, called the Board of Directors Meeting to order at 10:41 a.m. on Thursday, January 22, 2015, in the Board Room at the Florida Municipal Power Agency, 8553 Commodity Circle, Orlando, Florida. The roll was taken and a quorum was declared with 19 members present representing 33 votes out of a possible 48.5. ITEM 2 – Recognition of Guests Lynne Tejeda, Key West, said she was accompanied by Keys Energy Services Board Chairman, Peter Batty. Sandra Wilson, Ocala, introduced Diane Reichard, City of Ocala Chief Financial Officer/Assistant City Manager. ITEM 3 – PUBLIC COMMENTS (Individual Public Comments Limited to 3 Minutes) None ITEM 4 – SET AGENDA (by vote) MOTION: Lee Garner, Chattahoochee, moved approval of the agenda as presented. Howard McKinnon, Havana, seconded the motion. Motion carried 33-0. ITEM 5 – REPORT FROM THE GENERAL MANAGER Nicholas Guarriello said the Auditor General sent its preliminary and tentative findings out yesterday and if Members did not receive it to ask Sue Utley to send it to you.

Board of Directors Meeting Minutes 2 January 22, 2015

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ITEM 6 – CONSENT AGENDA a. Approval of Minutes – Meeting Held December 11, 2014 b. Approval of the Projects’ Financials as of November 30, 2014 c. Approval of Treasury Reports as of November 30, 2014 – Item was pulled from

Agenda MOTION: Lee Garner, Chattahoochee, moved approval of the Consent Agenda as amended. Bill Thiess, Fort Pierce, seconded the motion. Motion carried 33-0. ITEM 7 – ACTION ITEMS a. Approval of Annual Audited Financial Report (AAFR) for Fiscal Year 2014 MOTION: Harry Royal, Jacksonville Beach, moved approval of fiscal year ended September 30, 2014, Annual Audited Financial Report, and the associated Purvis, Gray & Company reports. Also, move approval to recover or refund all over-or under-recovery amounts through the billing true-up process. Larry Mattern, Kissimmee, seconded the motion. Motion carried 33-0. ITEM 8 – INFORMATION ITEMS a. FMPA-ECG Alliance Agreement – Service Confirmation Document Mark McCain gave an update to the Alliance Agreement – Service Confirmation Document for the Linemen’s Safety Training. ITEM 9 – MEMBER COMMENTS None. ITEM 10 – ADJOURNMENT There being no further business, the meeting was adjourned at 11:28 a.m. Bill Conrad Lynne Tejeda Chairman Secretary Approved: Seal BC/LT/su

Board of Directors Meeting Minutes 3 January 22, 2015

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AGENDA ITEM 6 – CONSENT AGENDA b. Approval of the Projects’

Financials as of December 31, 2014


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AGENDA PACKAGE MEMORANDUM TO: FMPA Board of Directors FROM: Mark Larson DATE: February 10, 2015 ITEM: 6b – Approval of Projects’ Financials as of December 31, 2014

Discussion: The summary financial statements and detailed financial statements of the Projects for the period ended December 31, 2014 will be posted on the Member Portal section of FMPA’s website.

_____________________________________________________________ Recommended Move approval of the Projects’ Financial Reports for the month ended

December 31, 2014. _____________________________________________________________ ML/emc

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AGENDA ITEM 6 – CONSENT AGENDA c. Approval of the Treasury

Reports as of November 30, 2014 and December 31, 2014


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AGENDA PACKAGE MEMORANDUM TO: FMPA Board of Directors

FROM: Janet Davis

DATE: February 10, 2014

ITEM: BOD 6c – Approval of Treasury Reports as of November 30, 2014

Strategic Relevance FMPA’s Relevant Strategic Goals 1. Be the lowest cost wholesale electricity provider in Florida

• Identify, understand and manage risk responsibility • Maintain sound financial policies and practices

2. Foster a positive communication culture • Improve board-staff communication

Policy Decisions/Implications • To report operation and effectiveness of asset management

• To report on the current opportunities and risk environment affecting FMPA

Introduction • This agenda item is a quick update of the Treasury Department’s functions.

• The Treasury Department reports for November are posted in the member portal section of FMPA’s website.

Debt Discussion Below is a summary of the total debt outstanding and the percentage of debt that

was fixed, variable or synthetically fixed with interest rate swaps as of November 30, 2014.

Total Debt

Outstanding Fixed Rate

Variable Rate

Synthetically Fixed

Agency 1,005,000 100% 0% 0% St Lucie 331,900,000 51% 0% 49% Stanton 39,204,000 99% 1% 0% Stanton II 148,391,000 52.75% 0.61% 47.64% Tri City 15,756,000 99% 1% 0%

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BOD 6c – Approval of Treasury Reports as of November 30, 2014 February 10, 2014 Page 2

The St Lucie investment strategy to pay down St Lucie debt: As of November 30, 2014, the St. Lucie Project holds investments with a market value of $146 million that can be used for future bond principal payments. These investments and the Merrill Lynch investment contract (Forward Sale Agreement) will mature between now and 2026 with a value of $238 million, assuming the Merrill Lynch investment contract is executed as it currently stands.

The market value is the estimated value, calculated by Bloomberg, if we had sold all of the assets as of 11/30/2014.

St Lucie Accounts Future Holdings 11/30/14 Market Value

10/1/26

(Estimated) of Holdings (Estimated)

2011A&B Debt Service Reserve 7,751,000 6,609,000

2012 Debt Service Reserve 3,445,000 3,461,000

ML Forward Sale Agreement 139,475,000 57,555,000

ML FSA Collateral 9,785,000 7,785,000

General Reserve 77,597,000 70,731,000

Total 238,053,000 146,141,000 The future holdings on 10/1/26 as listed above, assumes that the investments mature sans default and then are held in cash until 10/1/26. Note that the final value of the Forward Sale Agreement ($139.5 million) is contingent on the St Lucie Project continuing to make the purchases as per the Merrill Lynch agreement and that the assets are held until maturity. Our expectation is that at least, an estimated $238 million will be used to pay the outstanding debt of the St Lucie Project.

Swap Discussion The St Lucie and Stanton II Projects have a total of 13 interest rate swap contracts.

As of November 30, 2014, the cumulative termination value of the interest rate swaps for the St Lucie Project was ($23,502,904) and ($13,764,382) for the Stanton II Project. The Swap Valuation Report is a snap shot of the mark-to-market values at the end of the day on November 30, 2014. The reports for November are posted in the “Member Portal” section of FMPA’s website.

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BOD 6c – Approval of Treasury Reports as of November 30, 2014 February 10, 2014 Page 3 Investment Discussion The investments in the Projects are comprised of debt from the government-

sponsored enterprises such as the Federal Farm Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation (Freddie Mac), and Federal National Mortgage Association (Fannie Mae), as well as investments in U.S. Treasuries, Commercial Paper, Municipal Bonds and Money Market Mutual Funds. Below is a graph of US Treasury yields for the past 5 years. The blue line is the 2 year Treasury which closed the month of November at 0.4685%. The red line is the 5 year Treasury which was 1.4805%, and the green line is the 10 year Treasury which was 2.164%.

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2-Yr Treasury Yield 5-Yr Treasury Yield 10-Yr Treasury Yield

The weighted average yields on investments earned as of November 30, 2014 in the Projects along with their benchmarks (SBA’s Florida Prime Fund and the 10 Year US Treasury Note) are as follows:

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BOD 6c – Approval of Treasury Reports as of November 30, 2014 February 10, 2014 Page 4

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FMPA Project's Weighted Average Yields5-Year History

Agency St. Lucie Stanton Stanton II

Tri -City FL Prime 10 Yr. Treasury

Recommended Motion Move approval of the Treasury Reports for November 30, 2014.

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FROM: Janet Davis


ITEM: BOD 6c – Approval of Treasury Reports as of December 31, 2014

Strategic Relevance FMPA’s Relevant Strategic Goals 1. Be the lowest cost wholesale electricity provider in Florida

• Identify, understand and manage risk responsibility • Maintain sound financial policies and practices

2. Foster a positive communication culture • Improve board-staff communication

Policy Decisions/Implications • To report operation and effectiveness of asset management

• To report on the current opportunities and risk environment affecting FMPA

Introduction • This agenda item is a quick update of the Treasury Department’s functions.

• The Treasury Department reports for December are posted in the member portal section of FMPA’s website.

Debt Discussion Below is a summary of the total debt outstanding and the percentage of debt that

was fixed, variable or synthetically fixed with interest rate swaps as of December 31, 2014.

Total Debt

Outstanding Fixed Rate

Variable Rate

Synthetically Fixed

Agency 1,005,000 100% 0% 0% St Lucie 331,900,000 51% 0% 49% Stanton 39,204,000 99% 1% 0% Stanton II 148,391,000 52.75% 0.61% 47.64% Tri City 15,756,000 99% 1% 0%

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BOD 6c – Approval of Treasury Reports as of December 31, 2014 February 10, 2014 Page 2

The St Lucie investment strategy to pay down St Lucie debt: As of December 31, 2014, the St. Lucie Project holds investments with a market value of $149 million that can be used for future bond principal payments. These investments and the Merrill Lynch investment contract (Forward Sale Agreement) will mature between now and 2026 with a value of $240 million, assuming the Merrill Lynch investment contract is executed as it currently stands.

The market value is the estimated value, calculated by Bloomberg, if we had sold all of the assets as of 12/31/2014.

St Lucie Accounts Future Holdings 12/31/14 Market Value

10/1/26

(Estimated) of Holdings (Estimated)

2011A&B Debt Service Reserve 7,751,000 6,618,000

2012 Debt Service Reserve 3,445,000 3,455,000

ML Forward Sale Agreement 139,475,000 58,925,000

ML FSA Collateral 9,785,000 7,873,000

General Reserve 77,619,000 70,757,000

Total 240,075,000 149,625,000 The future holdings on 10/1/26 as listed above, assumes that the investments mature sans default and then are held in cash until 10/1/26. Note that the final value of the Forward Sale Agreement ($139.5 million) is contingent on the St Lucie Project continuing to make the purchases as per the Merrill Lynch agreement and that the assets are held until maturity. Our expectation is that at least, an estimated $240 million will be used to pay the outstanding debt of the St Lucie Project.

Swap Discussion The St Lucie and Stanton II Projects have a total of 13 interest rate swap contracts.

As of December 31, 2014, the cumulative termination value of the interest rate swaps for the St Lucie Project was ($22,833,849) and ($13,771,870) for the Stanton II Project. The Swap Valuation Report is a snap shot of the mark-to-market values at the end of the day on December 31, 2014. The reports for December are posted in the “Member Portal” section of FMPA’s website.

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BOD 6c – Approval of Treasury Reports as of December 31, 2014 February 10, 2014 Page 3 Investment Discussion The investments in the Projects are comprised of debt from the government-

sponsored enterprises such as the Federal Farm Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation (Freddie Mac), and Federal National Mortgage Association (Fannie Mae), as well as investments in U.S. Treasuries, Commercial Paper, Municipal Bonds and Money Market Mutual Funds. Below is a graph of US Treasury yields for the past 5 years. The blue line is the 2 year Treasury which closed the month of December at 0.6841%. The red line is the 5 year Treasury which was 1.679%, and the green line is the 10 year Treasury which was 2.1871%.

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US Government Treasury Securities Interest Rates 5-Year History

2-Yr Treasury Yield 5-Yr Treasury Yield 10-Yr Treasury Yield

The weighted average yields on investments earned as of December 31, 2014 in the Projects along with their benchmarks (SBA’s Florida Prime Fund and the 10 Year US Treasury Note) are as follows:

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BOD 6c – Approval of Treasury Reports as of December 31, 2014 February 10, 2014 Page 4

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FMPA Project's Weighted Average Yields5-Year History

Agency St. Lucie Stanton Stanton II

Tri -City FL Prime 10 Yr. Treasury

Recommended Motion Move approval of the Treasury Reports for December 31, 2014.

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AGENDA ITEM 7 – ACTION ITEMS a. Approval of Resolution 2015-B1 –

Authorizing the Commencement of CR-3 Decommissioning on Behalf of the CR-3 Municipal Joint Owners


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FROM: Dan O’Hagan


ITEM: BOD 7a - Resolution 2015-B1 - Authorizing the Commencement of CR-3 Decommissioning on Behalf of the CR-3 Municipal Joint Owners

Discussion Pursuant to the Crystal River unit 3 Decommissioning Agreement between

FMPA and six of the eight CR3 municipal joint owners1, dated July 1990, FMPA acts as agent for the administration of the nuclear decommission trust (“NDT”) funds for those six CR3 joint owners. In 1990, the Nuclear Regulatory Commission (“NRC”) issued Regulatory Guide 1-159 entitled “Assuring the Availability of Funds for Decommissioning of Nuclear Reactors.” The purpose of the Regulatory Guide was to assist nuclear licensees in their compliance with the NRC’s regulations regarding the funding of nuclear decommissioning. While the NRC rules allow for a number of decommissioning funding methods, the most common, and the one used by the six CR3 joint owners at issue, is the establishment of a nuclear decommissioning trust fund. To this end, the Regulatory Guide provides for and recommends a “pro forma” trust agreement. FMPA, on behalf of the six CR3 joint owners, largely adopted the pro forma trust agreement with its trustee – SunTrust Bank.

Per the trust agreement, the Trustee will only release trust funds upon written certification from the FMPA Board of Directors’ Treasurer or Secretary that the following conditions have been met:

1. Duke Energy is required to commence nuclear decommissioning of CR3;

2. The plans and procedures for decommissioning have been noticed and approved by the NRC; and

3. The FMPA Board of Directors has adopted a resolution authorizing the commencement of decommissioning.

1 The six joint owners for whom FMPA administers the decommissioning trust include the City of Alachua, the City of Bushnell, the City of Gainesville, Kissimmee Utility Authority, the City of Leesburg, and the City of Ocala. The Utilities Commission, City of New Smyrna Beach and the Orlando Utilities Commission administer their own nuclear decommissioning funds.

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BOD 7a – Resolution 2015-B1 - Authorizing the Commencement of CR-3 Decommissioning on Behalf of the CR-3 Municipal Joint Owners February 19, 2015 Page 2

Pursuant to the settlement agreement between the CR3 joint owners and Duke, the eight CR3 joint owners are entitled to withdraw $429.560.21, which includes $287,100.39 for the six joint owners for whom FMPA administers the trust, from the NDTs prior to final settlement closing. This amount is a reimbursement for decommissioning expenses incurred and paid by the CR3 joint owners prior to settlement that are eligible for payment from the NDT. Duke has advised the CR3 joint owners to wait until the NRC grants Duke’s NURC rule exemption request regarding the use of decommissioning funds for certain decommissioning activities. The NRC approved Duke’s exemption request on January 26, 2015.

Although FMPA is not a CR3 joint owner, we believe it is appropriate at this time that the FMPA Board of Directors adopt, as agent for the six CR3 joint owners and in accordance with the trust agreement between FMPA and SunTrust, the attached resolution authorizing the commencement of decommissioning, which will allow staff to direct SunTrust bank to release $287,100.39 on behalf of the six CR3 joint owners.

Recommended Motion Approve Resolution 2015-B1.

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Resolution 2015-B1 FMPA Board of Directors

February 19, 2015

RESOLUTION OF THE BOARD OF DIRECTORS OF THE FLORIDA MUNICIPAL POWER AGENCY: (I) AUTHORIZING THE COMMENCEMENT OF CRYSTAL RIVER UNIT 3 DECOMMISSIONING; (II) DESIGNATING AUTHORIZED OFFICERS; AND (III) PROVIDING AN EFFECTIVE DATE. Whereas, the City of Alachua, the City of Bushnell, the City of Gainesville,

Kissimmee Utility Authority, the City of Leesburg, the City of New Smyrna Beach and the Utilities Commission, City of New Smyrna Beach, the City of Ocala, and the Orlando Utilities Commission (the “CR3 Joint Owners”) each have an ownership interest in the Crystal River Unit 3 nuclear power plant (“CR3”); and

Whereas, pursuant to the Crystal River Unit 3 Decommissioning Agreement

between FMPA and the City of Alachua, the City of Bushnell, the City of Gainesville, Kissimmee Utility Authority, the City of Leesburg, and the City of Ocala (the “CR3 Trust Joint Owners”), FMPA has agreed to act as agent to administer the CR3 Joint Owners’ CR3 nuclear decommissioning trust funds; and

Whereas, pursuant to the Trust Fund Agreement between FMPA and Sun Bank, N.A., dated July 19, 1990, as amended on March 24, 1992 and December 4, 2001, and FMPA Executive Committee Resolution 90-E4, dated June 26, 1990, FMPA established a nuclear decommissioning trust on behalf of the CR3 Trust Joint Owners in accordance with Nuclear Regulatory Commission requirements; and

Whereas, pursuant to the Trust Fund Agreement, in order to withdraw funds

from the nuclear decommissioning trust, among other things, the FMPA Board of Directors is required to adopt a resolution authorizing the commencement of CR3 decommissioning on behalf of the CR3 Trust Joint Owners; and

Whereas, pursuant to the CR3 Settlement, Release and Acquisition Agreement between Duke Energy Florida, the CR3 Joint Owners and certain municipal wholesale customers, dated as of September 26, 2014, the CR3 Joint Owners may withdraw $429,560.21, including $287,100.39 for the CR3 Trust Joint Owners, from the nuclear decommissioning trust funds prior to transferring such trust funds to Duke Energy Florida; and

Whereas, the conditions precedent in the Trust Funds Agreement permitting

the withdrawal of funds, including, but not limited to the withdrawal of the

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aforementioned $287,100.39, from the CR3 Trust Joint Owners’ nuclear decommissioning trusts have occurred.

BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FLORIDA MUNICIPAL POWER AGENCY THAT: SECTION I. Authorization of CR3 Decommissioning. On behalf of the CR3 Trust Joint Owners, the commencement of CR3 decommissioning is hereby authorized.

SECTION II. Designation of Authorized Officers. The General

Manager & CEO, General Counsel, Associate General Counsel, Chief Financial Officer, FMPA Treasurer, Treasurer of the Board, Secretary of the Board, and Assistant Secretary of the Board are each hereby designated as Authorized Officers of FMPA for the purpose of withdrawing funds from the nuclear decommissioning trusts in accordance with NRC regulations and the CR3 Settlement, Acquisition and Release Agreement on behalf of the CR3 Trust Joint Owners and to take such other actions necessary to carry out the purpose of this Resolution.

SECTION III. Effective Date. This Resolution shall take effect

immediately upon its adoption.

This Resolution 2015-B1 is hereby approved and adopted by the Board of Directors of the Florida Municipal Power Agency on February 19, 2015. ___________________________________ Chairman, Board of Directors

I HEREBY CERTIFY that on February 19, 2015, the above Resolution 2015-B1 was approved and adopted by the Board of Directors of the Florida Municipal Power Agency, and that this is a true and conformed copy of Resolution 2015-B1. ATTEST: _______________________________ SEAL Secretary or Assistant Secretary

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Resolution 2015-B1 FMPA Board of Directors

February 193, 2015

RESOLUTION OF THE BOARD OF DIRECTORS OF THE FLORIDA MUNICIPAL POWER AGENCY: (I) AUTHORIZING THE COMMENCEMENT OF CRYSTAL RIVER UNIT 3 DECOMMISSIONING; (II) DESIGNATING AUTHORIZED OFFICERS; AND (III) PROVIDING AN EFFECTIVE DATE. Whereas, the City of Alachua, the City of Bushnell, the City of Gainesville,

Kissimmee Utility Authority, the City of Leesburg, the City of New Smyrna Beach and the Utilities Commission, City of New Smyrna Beach, the City of Ocala, and the Orlando Utilities Commission (the “CR3 Joint Owners”) each have an ownership interest in the Crystal River Unit 3 nuclear power plant (“CR3”); and

Whereas, pursuant to the Crystal River Unit 3 Decommissioning Agreement

between FMPA and the City of Alachua, the City of Bushnell, the City of Gainesville, Kissimmee Utility Authority, the City of Leesburg, and the City of Ocala (the “CR3 Trust Joint Owners”), FMPA has agreed to act as agent to administer the CR3 Joint Owners’ CR3 nuclear decommissioning trust funds; and

Whereas, pursuant to the Trust Fund Agreement between FMPA and Sun Bank, N.A., dated July 19, 1990, as amended on March 24, 1992 and December 4, 2001, and FMPA Executive Committee Resolution 90-E4, dated June 26, 1990, FMPA established a nuclear decommissioning trust on behalf of the CR3 Trust Joint Owners in accordance with Nuclear Regulatory Commission requirements; and

Whereas, pursuant to the Trust Fund Agreement, in order to withdraw funds

from the nuclear decommissioning trust, among other things, the FMPA Board of Directors is required to adopt a resolution authorizing the commencement of CR3 decommissioning on behalf of the CR3 Trust Joint Owners; and

Whereas, pursuant to the CR3 Settlement, Release and Acquisition Agreement between Duke Energy Florida, the CR3 Joint Owners and certain municipal wholesale customers, dated as of September 26, 2014, the CR3 Joint Owners may withdraw $429,560.21, including $287,100.39 for the CR3 Trust Joint Owners, from the nuclear decommissioning trust funds prior to transferring such trust funds to Duke Energy Florida; and

Whereas, the conditions precedent in the Trust Funds Agreement permitting

the withdrawal of funds, including, but not limited to the withdrawal of the

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aforementioned $429,560.21287,100.39, from the CR3 Trust Joint Owners’ nuclear decommissioning trusts have occurred.

BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FLORIDA MUNICIPAL POWER AGENCY THAT: SECTION I. Authorization of CR3 Decommissioning. On behalf of the CR3 Trust Joint Owners, the commencement of CR3 decommissioning is hereby authorized.

SECTION II. Designation of Authorized Officers. The General

Manager & CEO, General Counsel, Associate General Counsel, Chief Financial Officer, FMPA Treasurer, Treasurer of the Board, Secretary of the Board, and Assistant Secretary of the Board are each hereby designated as Authorized Officers of FMPA for the purpose of withdrawing funds from the nuclear decommissioning trusts in accordance with NRC regulations and the CR3 Settlement, Acquisition and Release Agreement on behalf of the CR3 Trust Joint Owners and to take such other actions necessary to carry out the purpose of this Resolution.

SECTION III. Effective Date. This Resolution shall take effect

immediately upon its adoption.

This Resolution 2015-B1 is hereby approved and adopted by the Board of Directors of the Florida Municipal Power Agency on February 193, 2015. ___________________________________ Chairman, Board of Directors

I HEREBY CERTIFY that on February 193, 2015, the above Resolution 2015-B1 was approved and adopted by the Board of Directors of the Florida Municipal Power Agency, and that this is a true and conformed copy of Resolution 2015-B1. ATTEST: _______________________________ SEAL Secretary or Assistant Secretary

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AGENDA ITEM 7 – ACTION ITEMS b. Approval of an Increase in

Lobbying Expenditures Board of Directors Meeting February 19, 2015

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AGENDA PACKAGE MEMORANDUM TO: FMPA Board of Directors and ARP Executive Committee

FROM: Nicholas P. Guarriello


ITEM: BOD 7b, EC 9a – Approval of an Increase in Lobbying Expenditures

Introduction • Indian River County, Board of County Commissioners has recently hired two

consultants in Tallahassee to develop a “comprehensive solution for addressing the FMPA problem.”

• FMPA’s Tallahassee-based legislative counsel has advised FMPA that it should respond to this action by securing additional assistance with legislative and media relations experience.

• This memo requests funding in an amount not to exceed $100,000 be added to existing approved contract expenditures with William J. Peebles, P.A.

Explanation FMPA has previously engaged William J. Peebles, P.A. as legislative counsel to

provide legislative and executive branch lobbying services. Under the terms of that existing agreement, the firm identifies legislative priorities, formulates appropriate strategies to accomplish the priorities, and reports on pending concerns to FMPA.

On Jan. 28, 2015, the Indian River County, Board of County Commissioners held

a special called meeting to discuss the preliminary and tentative findings of the Florida Auditor General regarding the operational audit of FMPA. The result of that meeting was approval by the Board of County Commissioners to immediately hire a consulting firm to “coordinate a statewide dialogue” with “members of FMPA and other interested parties” to develop a “comprehensive solution for addressing the FMPA problem.” The County reportedly plans to retain a Tallahassee-based government relations firm and a Tallahassee-based communications agency.

Since then, negative news articles about FMPA have begun appearing in radio,

television and newspapers around Florida, and a communications agency has issued at least one “Media Alert,” of which we are aware, that discussed the audit.

On February 16, 2015, Rep. Debbie Mayfield of Vero Beach filed a bill in the

Florida House of Representatives to amend the definition of a “public utility” to include certain entities created under the Florida Interlocal Cooperation Act of

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BOD 7b, EC 9a – Approval of an Increase in Lobbying Expenditures February 17, 2015 Page 2

1969 (HB 773). The effect of the bill (see Attachment A) would be to put an entity, like FMPA, under jurisdiction of the Florida Public Service Commission.

Analysis Mr. Peebles advises that it is important for FMPA to respond to the legislative and

public relations attacks. Currently, FMPA pays his firm $50,000 per year. Mr. Peebles has requested additional funding in an amount not to exceed $100,000 for the purposes of him retaining lobbying and public relations consultants who can assist Mr. Peebles in an appropriate response.

Solution Mr. Peebles has provided a letter agreement (see Attachment B) related to this

request. The agreement provides that consultants will be hired by William J. Peebles, P.A. and work under the general direction and control of the firm. The additional compensation will be spent as follows:

1. Capitol Insight: $40,000 payable immediately.

2. CoreMessage: $60,000 payable in monthly installments. William J. Peebles, P.A. will pass along the costs of the consultants on his invoices to FMPA without markup.

Evaluation • The actions of Indian River County, Board of County Commissioners and the

filing of HB 773 present a clear challenge to the interests of FMPA member owners. FMPA should respond or risk potential adverse consequences in the Florida Legislature.

Rate Impact The table below shows the rate impact of this expense.

Proposed Cost Annual MWh Billed* Rate Impact

$100,000 7,015,000 MWh $0.0143 per MWh

* Source: Fiscal 2015 Budget for all power supply projects, estimated Megawatt Hours billed

Legal Review The letter agreement from William J. Peebles, P.A. has been reviewed by FMPA’s

Office of General Counsel.

Recommended Motion Board: Move approval of the letter agreement with William J. Peebles, P.A. to

increase the firm’s authorized compensation by $100,000 to fund additional assistance with legislative and media relations, and authorize FMPA’s General Manager and CEO to execute the agreement.

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BOD 7b, EC 9a – Approval of an Increase in Lobbying Expenditures February 17, 2015 Page 3 EC: Move approval to increase expenditures with William J. Peebles, P.A. by

$100,000 to fund additional assistance with legislative and media relations, and to fund the additional expense from the fiscal year 2015 budget, within FMPA’s current authorized budget authority.

NPG/mm Attachments

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AGENDA ITEM 8 – INFORMATION ITEMS a. Annual Debt Report Board of Directors Meeting February 19, 2015

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FROM: Edwin Nunez


ITEM: BOD 8b – Annual Debt Report

Introduction Pursuant to Section 7.1 (B) of the Debt Risk Management Policy (see copy of this

section as Attachment #1), the Treasury Department is required to report to the Board of Directors the annual debt report as of September 30, 2014. The information required by this policy does not include transactions capitalized due to accounting standards and reported as debt such as capitalized TARP payments to KUA and Keys Energy or the St. Lucie County commitment.

Explanation 1. The percentage of the portfolio of bonded debt and loans (“All Debt”) that is fixed

rate, variable rate, and synthetic fixed rate at fiscal year-end is as follows:.

Fixed Rate Debt:$1,044,425,000

65%

Syn. Fixed Rate Debt (VRDO's &

ARS, Bank Private

Placement's):$499,323,000

31%

CPI Synthically Fixed Rate Debt:

$41,180,0003%

Variable Rate Debt:

$21,664,0001%

FMPA All Debt

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BOD 8b – Annual Debt Report February 10, 2015 Page 2

2. The total amount of bonded debt and loans outstanding by Project is as follows:

3. The total cost of bonded debt and loans (effective interest rate) per each Project

for the previous year. Each Series of bonds times the all in interest rate, including the swaps attached to them. The total of all interest costs divided by the total of all bonds for each Project.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00% 5.16%

4.01%

5.11%

4.01%

2.21%

9/30/2014 9/30/2013 Agency $1,005,000 $1,180,000 ARP $1,047,360,000 $1,082,020,000 St Lucie $337,960,000 $326,465,000 Stanton $45,411,000 $52,052,000 Stanton II $156,180,000 $165,645,000 Tri-City $18,676,000 $38,694,000 Total $1,606,592,000 $1,666,056,000

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4. The interest rate swaps counterparty diversification report. Swap percentages by

dealer per Project.¹

All-Requirements Project B of A / Merrill Lynch 54,675,003 5% Goldman Sachs 33,179,999 3% JPMorgan Chase 83,958,000 8% Morgan Stanley 52,864,998 5% UBS 20,125,000 2% Wells Fargo 61,050,000 6% Unswapped Debt 741,507,000 71% Total Debt Outstanding 1,047,360,000 100%

St Lucie Project B of A / Merrill Lynch 119,699,541 35% Goldman Sachs 41,750,458 12% Unswapped Debt 176,510,000 52% Total Debt Outstanding 337,960,000 100%

Stanton II Project B of A / Merrill Lynch 35,310,674 23% JPMorgan Chase 10,226,826 7% UBS 27,662,500 18% Unswapped Debt 81,880,000 53% Total Debt Outstanding 155,080,000 100%

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1 – Numbers may not add due to rounding. 5. The debt ratio per project for the previous year.

1 – Total Debt divided by Total Assets.

Agency St. Lucie Stanton Stanton II Tri-City ARP FMPA Total

Total Debt $* 1,005 326,412 44,863 156,103 17,936 1,044,724 1,591,043 Total Assets $* 20,548 396,389 63,297 162,391 21,818 1,456,508 2,120,951

Debt Ratio 4.89% 82.35% 70.88% 96.13% 82.21% 71.73% 75.02% *From the FMPA Financial Statement Fiscal Year End 9/30/14. “Total Assets” was taken from the Financial Statement page 13. “Total Debt” was taken from Section, VIII. Long Term Debt, pages 36-42 less TARP payments and St. Lucie County Commitment. The “Total Debt” figures have been adjusted by the balances of unamortized premiums and discounts and unamortized losses on refunding’s.

Recommended Action: For information only. No action requested. Attachment #1

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Agency St. Lucie Stanton Stanton II Tri-City ARP FMPA Total

Debt Ratio - Total Debt / Total Assets¹

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AGENDA ITEM 8 – INFORMATION ITEMS b. Syncora Buys Majority Stake in

Swap Financial Group Board of Directors Meeting February 19, 2015

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AGENDA PACKAGE MEMORANDUM TO: Board of Directors

FROM: Mark Larson


ITEM: BOD 8b – Syncora Buys Majority Stake in Swap Financial

Background Nat Singer, of Swap Financial, the Agency’s Swap Advisor, made staff

aware of the partial sale of his firm to Syncora. See attached article copy as well as information letter from Nat. (Attachment A.) Nat will be available by phone to answer any of your questions. The renewed contract for services with Nat / Swap Financial runs through Oct. 1, 2016, but can be terminated by either party. See yellow-highlighted section of his contract. A copy of his entire contract is attached for ease of reference. (Attachment B.) The EC and Board, after discussion with Nat and other inquiries as may be desired, may wish to exercise its option. The Finance Team unanimously recommends no change in the current arrangement / contract.

Recommended None. This is for information only. Direction to staff is requested if any Action additional assistance is needed. ___________________________________________________________________

Attachments

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AGENDA ITEM 9 – MEMBER COMMENTS Board of Directors Meeting February 19, 2015

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AGENDA ITEM 10 – ADJOURNMENT Board of Directors Meeting February 19, 2015

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