Loading...
02-12-02 SpMtgFEBRUARY 12, 2002 A Special Meeting of the City Commission of the City of Delray Beach, Florida, was called to order by Mayor David Schmidt in the First Floor Conference Room at City Hall, Tuesday, February 12, 2002, at 6:00 p.m. Roll call showed: Present - Commissioner Patricia Archer Commissioner Jon Levinson Commissioner Alberta McCarthy Commissioner Jeff perlman Mayor David W. Schmidt Absent - None Also present were - City Manager David T. Harden City Attorney Susan A. Ruby Deputy City Clerk Angela Wong The City Manager, David T. Harden, announced the removal of Item No. 2, Solid Waste Authority Interlocal Agreement/Temporary Use Permit. Mayor Schmidt called the meeting to order and announced that it had been called for the purpose of considering the following items: RESOLUTION NO. 11-02: Consider approval of Resolution No. 11-02 authorizing the City of Delray Beach to issue Revenue Bonds not to exceed $22,000,000 for the purpose of financing the cost of land acquisition with respect to Atlantic High School, the City's Beach Re-nourishment Program, and parking facility improvements at the Delray Beach Library with SunTrust Bank. Joseph Safford, Finance Director, introduced the item and explained that before the Commission is Resolution No. 11-02 which authorizes the financing of $22,000,000 with SunTrust Bank, which was awarded at the February 5, 2002 City Commission meeting. Mr. Safford explained that the resolution sets the terms and conditions for the financing which was prepared by the Bond Council. He continued to state, based upon the bid, the money could not be drawn on until an agreement had been entered into with the Palm Beach County School Board. The City could not accept the condition due to the Beach Re-nourishment Project and a portion of the land acquisition would pre-date the agreement with the School Board. Negotiations have been underway to obtain better terms and conditions for the financing of the funds. SunTrust Bank submitted a proposal to allow the City to draw 11.5 million on the Line of Credit without an executed agreement with the School Board, which will allow the City to expend money relative to the Tare property in the amount $6.4 million, the Beach Re-nourishment Project in the amount of $4.1 million and the Parking Improvements relative to the South County Courthouse and Delray Beach Library of $1 million. In addition, the language allows the City to draw on the remaining 10.5 million on the Line of Credit without an executed agreement between the City and School Board if the bank agrees to it. Mr. Safford continued to state all other items are traditional financing items and do not need to be discussed. In response to Ms. McCarthy's question as to why the Beach Re-nourishment Project and Parking Improvements have to be packaged together with the Land Acquisition financing, Mr. Harden responded by stating the City would be able to save issuance costs and legal costs if financed together. Ms. McCarthy inquired if it was possible for the Bank to issue a wrap-around loan that is similar to a construction loan. Mr. Harden responded by stating the City does not have to use any of the funds if it is not needed, and funds will be drawn on what is actually needed. Mr. Safford explained the Beach Re-nourishment Project funding in the amount of $4.5 million will be borrowed to up-front the cost of the project. The expenses will be 100% reimbursed by the Federal, State and County governments once the project is complete. Mr. Harden stated there is no prepayment penalty, which is one of the conditions of the financing because if the City proceeds with the land acquisition and the land was sold back to the School Board, the timing is unknown. Therefore, the financing is structured to where the money is available if and when it is needed. It can be repaid at any time whether the money is reimbursed or permanent financing is entered into. Mr. Safford continued to explain if there are any problems encountered where the City needs the financing and the bank would not authorize the City to draw on the $10.5 million, then the financing would be turned into a bond anticipation and the City would sell bonds if necessary. In response to Mr. Perlman's question as to how much public parking will be achieved, Mr. Harden explained that Palm Beach County's plans as they have been developed show no public parking. There will be 170 spaces for the Delray Beach Library and over 400 for the South County Courthouse. The City has asked from Palm Beach County for a cost to strengthen the foundation in order for a third level to be added at a later date if so desired. The $1 million was based on obtaining 60-70 parking spaces. The cost of strengthening the foundation should be considerably less than $1 million, but the cost has not been received yet. If no public parking is acquired, than there is no expense to the City for the project and all costs will be paid by Palm Beach County and the Library. The City will continue to have the use of the parking spaces during the weekend and evenings. The existing use agreement for the courthouse parking would apply to the parking deck as well as the existing surface parking. Mr. Harden responded to Mr. Perlman's question as to when the plans will be finalized with Palm Beach County by stating that the County is hoping to begin construction in November and will have within 60 days preliminary plans developed at a point where they can be presented to SPRAB and obtain site plan approval. Mr. Harden confirmed Mrs. Archer's statement that the City will have expenses if the City desires to have the foundation strengthened or to add public parking at a later date. If that is not the decision, than there will be no expense to the City. Mrs. Archer inquired whether the City will have any input into the development of the plan if the City decided to strengthen the foundation and to verify that the first floor is high enough to include bus or trolley traffic. Mr. Harden replied by stating any configuration the City desires would be at the City's expense. He continued to state the courthouse only needs surface parking, so that is what Palm Beach County is willing to put into the project. The difference between the surface parking and the construction of one level is being paid by the Library. -2- February 12, 2002 In response to Mr. Perlman's inquiry as to how many parking spaces the Library currently has, Mr. Harden stated there are very few dedicated to them, possibly around twenty parking spaces. Mrs. Archer stated that she has a basic problem with the funding; the City is authorizing a total of $16 million for land acquisition and has no idea whether or not the School Board is going to consent to use the land. Mayor Schmidt stated that the City does not have to borrow funds if the School Board does not consent. Mrs. Archer exclaimed that the School Board has not taken any position, they are not going to take a position, the City is taking a position, and the City is taking all the heat. Mrs. Archer questioned why the delay in taking this position, why the School Board, when they originated the concept, is not here, and why is the City racing ahead to approve $16 million when City doesn't know what the School Board will do. The School Board could eventually decide against the purchase and walk away, and the City does have expenses involved. Mrs. Archer questioned if the City would have the same amount of expenses if approving funding for only the Beach Re-nourishment and Parking Improvements. Mr. Safford responded by stating it would be a less, but the major cost would be based upon how much is drawn on the Line of Credit due to the interest cost. If the City does not proceed with the agreement with the School Board, the City will not draw on money and no interest will be applied. Mr. Levinson commented that the City locks into a low rate, and reiterated if the City does not draw on the funds, than the City does not pay. In addition, Mr. Levinson announced the School Board will make a decision next Wednesday night, therefore the City will know where the school will be built. Mr. Perlman inquired about an article he had read in the Palm Beach Post regarding the City Commission voting on a subject regarding Breezy Ridges next Tuesday night. Mr. Harden replied by stating it was an error by the Palm Beach Post and a correction will be printed. Mayor Schmidt made a motion to approve Resolution No. 11-02, seconded by Commissioner Levinson. Upon roll call, the Commission voted as follows: Mr. Perlman - Yes; Mrs. Archer - No; Mr. Levinson - Yes; Ms. McCarthy -Abstained; Mayor Schmidt - Yes. Said motion passed with a 3 to 1 vote. REQUEST FOR LOAN/SOUL OF DELRAY: Consider a request from the Soul of Delray Committee for a $30,000 loan associated with administrative and production costs for the "Celebrate the Soul of Delray" event to be held on Saturday, February 16, 2002 Robert Barcinski, Assistant City Manager, introduced the item and explained that before the Commission is a request from Mr. Clay Wideman on behalf of the Soul of Delray for a one-time grant in the amount of $30,000 to assist in covering the expenses associated with the administration, entertainment, and production costs for the event. Mr. Barcinski stated the estimate of revenues and expenses for the event is a result of a meeting held late yesterday afternoon with Mr. Wideman, Ms. Murray, the production company and himself. The two grants, one from Palm Beach County in the amount of $20,000 and a second from The Cultural Council, will be up-fronted by the Downtown Development Authority (DDA) under certain conditions. Mr. Barcinski introduced Mr. Wideman if there are any questions from the Commission. In addition, some of the service contracts had already been committed to by Mr. Wideman. -3- February 12, 2002 In response to the Commission's question as to how much money is currently available in the budget, Mr. Harden explained in the Special Events contingency, there are $3,250 and a contingency in grants of $6,000 for a total $9,250 in available funds. Mr. Harden continued to state the City is looking at a potential revenue shortfall that is significant and he could not recommend spending money that is not budgeted at this point. Mr. Levinson explained that he had a conversation with Mr. Wideman and has followed the event for the past couple of years. Mr. Levinson suggested since the event is in four days and the City is in an un-enviable position, the City should look at providing a loan to Mr. Wideman which would have some expectation of repayment. The same arrangement was made with SPADY and EPOCH, and it would provide an answer to the situation without expensing funds, which would be a bad precedent, with the expectation that the event would do better with sponsorships this year and hopefully better with income as well. Mr. Perlman expressed the event was great in previous years and the City is trying to do more for West Atlantic Avenue, but he is upset that the Commission is notified about this situation four days prior to the event. Mr. Perlman continued by questioning whether the event needs $44,000 for entertainment plus costs. Mr. Levinson added that he believed the DDA has reviewed the contracts for entertainment. Discussion followed regarding sponsorship in previous years for the event. Mr. Harden explained that the City's experience with loans and non-for-profit cultural groups has not been good. The City has eventually had to write-off loans because of having no hope the loans would ever be repaid. Mrs. Archer added that she sees no income to repay the loan, and if there is another event, the City will be in the same situation. Mr. Wideman expressed his feelings and the importance of the event. He continued to state the Delray Merchant's Association (DMA) has worked on the event since July 2001 and everything was moving fairly smoothly. Local churches, residents and businesses have donated to the event as well as him. Mr. Wideman introduced James Thomas as also one of the individuals who assisted in promoting the event and Unique Productions as well. Mayor Schmidt inquired as to the City's expectations of repayment of the loan i.e. who would be repaying the loan and how long it would take to repay the loan. The Commission has to be able to answer these questions for the taxpayers in the City. Mr. Wideman responded by stating a loan is a good idea and he would use his word as his bond. He feels confident that the funds will be collected by Saturday for repayment of the loan. Mr. Wideman added that he would request a one- year term on the loan. Mr. James Thomas, WI)DR-Miami, stated that without receiving any funds, his station assisted by promoting the event, which is worth $30,000-$40,000 in in-kind services. Mr. Thomas suggested to Mr. Wideman that his station will promote, at no cost, future events who will serve as fundraisers for the Soul of Delray event. The event has been promoted over the last month with Shirley Caesar and The Spinners as entertainers for the event, and a radio station, WFFL, out of Fort. Pierce and White City will be transporting people to Delray for the event. -4- February 12, 2002 Mrs. Archer expressed concern regarding past and current funding for the event. Mrs. Archer made a motion to provide the DMA with a $10,000 grant and a $20,000 loan to be paid off in two years. This was followed by discussion regarding up-front funding and contractual obligations for the event. Mr. Perlman questioned the need for $44,000 in entertainment costs, and if the entertainers chosen are really necessary. Mr. Thomas replied by saying the entertainment was cut back to only three entertainers geared towards adults and spiritual performers. Mr. Perlman stated that the City recently approved approximately $13,000 in in-kind services which would bring the total to $43,000 that the City would be investing in the event. Mr. Wideman requested from the Commission to give the DMA one year to repay the loan and charge interest if the City desires. Mr. Levinson stated he would like to speak against the motion and see the Commission make the full $30,000 a loan. In addition, Mr. Wideman would be requested to institute a program where booths would be set up during the event for voluntary donations. Mr. Levinson stated he would like to vote against the motion and substitute it with a motion that the $30,000 be a loan, but the Delray Merchant's Association should try their best to generate donations and fundraise at the event. The loan would have a term of one-year. There was continued discussion regarding fundraising for the event. Ms. McCarthy inquired about past revenues that were raised from events and contractual obligations with the artists. Mr. Thomas explained that the contracts have been executed and deposits have been paid to secure the artists for the event. In addition, if the artists were cancelled, no monies would be contractually obligated other than what has already been paid as a deposit. Any contractual obligations would also fall upon Mr. Wideman as the signer of the contracts, not the City. Ms. McCarthy asked whether or not there is a financial contractual obligation to the performers for payment of the $43,000 if the contracts were cancelled. Mr. Wideman responded by stating he is unsure if there is any financial obligation. Mrs. Archer pointed out $41,000 comes from two grants and the only other income is $4,000 from carryover funds and $1,000 from sponsor income, so she assumes there has been no fundraising revenue. There was brief discussion regarding fundraising attempts by the DMA. Mayor Schmidt added that the Sister Cities Committee has made some commiunents, which is why he would support Mr. Levinson's suggestion. Ms. McCarthy expressed the importance of fundraising during the event and she would agree the entire amount should be a loan with interest of some sort attached. In addition, the DMA should involve other agencies to assist in fundraising and they will be held accountable for responsibility of fundraising also. Mrs. Archer withdrew her previous motion with the understanding that she would not like to see this situation happen again and would like to see at least 50% of the budget raised before the DMA requests permission to hold the event in the future. In addition, Mayor Schmidt suggested for the DMA to consider an admission charge if the event turns out to be as successful as anticipated. -5- February 12, 2002 Mr. Levinson moved to agree to loan to the Delray Merchant's Association the sum not to exceed ~30,000, that repayment be made within one year, that no interest be charged on the loan for the first year, and that the Delray Merchant's Association make a credible effort to seek contributions at the event through announcements on the stage, through proper placement donation booths throughout the event., seconded by Commissioner Archer. Upon roll call, the Commission voted as follows: Mrs. Archer - Yes; Mr. Levinson - Yes; Ms. McCarthy - Yes; Mayor Schmidt - Yes; Mr. Perlman - Yes. Said motion passed with a 5 to 0 vote. There being no further business, Mayor Schmidt declared the Special Meeting adjourned at 6:55 p.m., at which time the Commission convened to the regularly scheduled Workshop Meeting. ATTEST: City Clerk MAYOR The undersigned is the City Clerk of the City of Delray Beach, Florida, and the information provided herein is the Minutes of the Special Meeting of the City Commission held on Tuesday, January 15, 2002, which Minutes were formally approved and adopted by the City Commission on City Clerk NOTE TO READER: If the Minutes you have received are not completed as indicated above, this means they are not the official Minutes of the City Commission. They will become the official Minutes only after review and approval, which may involve amendments, additions or deletions to the Minutes as set forth above. -6- February l2,2002 Mr. Levinson moved to agree to loan to the Delray Merchant's Association the sum not to exceed $30,000, that repayment be made within one year, that no interest be charged on the loan for the first year, and that the Delray Merchant's Association make a credible effort to seek contributions at the event through announcements on the stage, through proper placement donation booths throughout the event., seconded by Commissioner Archer. Upon roll call, the Commission voted as follows: Mrs. Archer - Yes; Mr. Levinson - Yes; Ms. McCarthy - Yes; Mayor Schmidt - Yes; Mr. Perlman - Yes. Said motion passed with a 5 to 0 vote. There being no further business, Mayor Schmidt declared the Special Meeting adjourned at 6:55 p.m., at which time the Commission convened to the regularly scheduled Workshop Meeting. City Clerk ATTEST: MAYOR The undersigned is the City Clerk of the City of Delray Beach, Florida, and the informatton promded herein is the Minutes of the Specml Meeting of the City Commission held on Tuesday, Januaryl5, 2002, which Minutes were formally approved and adopted by the City Commission, oo4 City Clerk NOTE TO READER: If the Minutes you have received are not completed as indicated above, this means they are not the official Minutes of the C~ty Commission. They will become the official Minutes only after review and approval, which may revolve amendments, additions or deletions to the Minutes as set forth above. February 12, 2002