Broward County Commission Regular Meeting
Director's Name: Mark Gale
Department: Aviation Division: Business
Information
Requested Action
title
MOTION TO APPROVE Consent to Security Agreement between Broward County and Fort Lauderdale Fuel Facilities, LLC, to enter into a security and collateral agreement for a petroleum products terminaling agreement for a jet fuel terminal facility at Port Everglades, effective upon approval by the Broward County Board of County Commissioners; and authorize the Mayor and Clerk to execute.
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Why Action is Necessary
Chapter 2, Section 2-40 (a) of the Broward County Code of Ordinances, requires that Broward County Board of County Commissioners (“Board”) authorize any commercial activities or occupy any portion of the airport for any purpose unless specifically authorized by the County.
What Action Accomplishes
Approves a Consent to Security Agreement between Broward County (“County”) and Fort Lauderdale Fuel Facilities, LLC (“FLFF”) to allow FLFF enter into a security and collateral agreement for a long-term petroleum products terminaling agreement (“Terminaling Agreement”) in favor of South Florida Materials Corp. dba Vecenergy (“Port Everglades Terminal Operator”).
Is this Action Goal Related
No
Previous Action Taken
None.
Summary Explanation/Background
THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTION.
This action approves a Consent to Security Agreement between the County and FLFF to allow FLFF enter into a security and collateral agreement for a long-term Terminaling Agreement in favor of Port Everglades Terminal Operator.
FLFF is a consortium of airlines formed in 2011 through an interline agreement (“Interline Agreement”) to enter into a lease with the County for the operation and maintenance of the fuel system at Broward County’s Fort Lauderdale-Hollywood International Airport (“FLL”).
In addition to the increase fuel storage capacity created by the proposed terminal facility at Port Everglades, FLFF is also in the process of expending in excess of $24,000,000 on two additional fuel storage tanks, each with a capacity of 1,000,000 gallons, as well as constructing a state of the art operations building at FLL.
On June 12, 2012 (Item No. 6), the Board approved the Fuel System Lease Agreement (“Lease Agreement”) allowing FLFF to maintain and operate the Fuel System at FLL.
On March 12, 2013 (Item No. 1), the Board approved a Consent Agreement to permit a leasehold mortgage and a collateral assignment of the revenues from the operation of the fuel farm to secure the Fuel System Revenue Bonds, Series 2013, in a not-to-exceed amount of $40,000,000, with a term not-to-exceed 25 years. Further, the Board approved the First Amendment to the Lease Agreement in order to allow for the construction of the underground hydrant fuel system in Terminal 4, a new 1.15 million gallon aboveground storage tank in the fuel farm, and an extension of the term of the Lease Agreement for 25 years, or through September 30, 2038.
FLFF desires to enter into a long-term Terminaling Agreement wherein the Port Everglades Terminal Operator will construct jet fuel storage tanks at Port Everglades for FLFF’s use. The jet fuel storage tanks will contain at least 500,000 barrels of storage capacity and will be connected to a marine receipt system. The Port Everglades terminal facility will be connected to the Everglades Pipe Line Company pipeline (“Buckeye Pipeline”) currently serving FLL and will provide increased jet fuel storage capacity and increase the number of sources and suppliers of jet fuel to FLL. FLFF will pay the Port Everglades Terminal Operator a monthly throughput fee along with certain other charges and fees.
The Port Everglades Terminal Operator is requesting a security interest in the Interline Agreement, which is part of the Lease Agreement. The Lease Agreement requires the County’s consent to encumber the Interline Agreement. The Consent to Security Agreement allows FLFF to enter into such Security Agreement in favor of the Port Everglades Terminal Operator but does not modify, waive, or release FLFF from any of its contractual obligations to the County.
The Consent to Security Agreement has been reviewed as to form by the Office of the County Attorney.
Source of Additional Information
Mark E. Gale, A.A.E., CEO/Director of Aviation, (954) 359-6199
Fiscal Impact
Fiscal Impact/Cost Summary
This action does not have a fiscal impact.