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05-04-38 Special ~~ COUNCIL CHAMBER May 4, 1938 The Council met in special session at 7:30 P.M. with the City Attorney and the following members present: Mr. Gwynn, Mr. Hall, Mr. Hill, Mr. Miller and Mr. Wod- ' ischek. , The refunding agreement, recently submitted to the City by the Bondholders Committee, was taken up and discussed in detail, with the following comments and objections noted: Paragraph 3 of the Preamble: The words "SUQcessor Municipality known as City of Delray Beach" should be eliminated since no bonds have been floated by said successor Dity,Rnown as City of Delray Beach. See. 1 Page 1: Objection was raised to the inclusion of accrued interest on past due principal bonds, and, in the redrafting of the agreement, the members requested that this accrued interest amount- ing to approximately $&4,127.00 be not included in the Refunding Bonds. See. 3 Page2: Should read "Said bonds shall constitute general obligations of the City, excepting that portion formerly known as the Town of Delray Beach". This was ordered corrected. Also exclude i~, the word "revenues7 in the same paragraph. Paragraph {bl Page 2: ~liminate the entire paragraph which pledged excess revenues, of the Water Department to payment of interest and sinking fund. An agreement with such a provision, would never be passed by the electors of the City, it was stated. Paragraph {cl Page 2: The provision requir- ing a levy of millagJfor principal retirement equal to that levied f9r dJbt service, would have to be eliminated, it was stated, as $62,000. or $74,000. would be an impossible levy requirement for the years 1939-1940 and 1940-1941. I -:. See. 5 Page 3: Mr. Hall asked if this para- graph didn't virtually appoint the Bondholders Com- mittee as the City's fiscal agents for the proposed refunding and the City Attorney advised that this was the case, and asked if this was not the intent 01' the Council. All agreed that this was in accord with their previous understanding, and that the Council ~~,;;:; COUNCIL CHAMBER - May 4, 1938 did, by said agreement, designate the Bondholders Committee as ., fiscal agents in said refunding to round up scattered bonds, interest obligations and claims evidencing bond indebtedness, to be refunded. Paragraph {bl Page 3: Mr. Hall contended that this paragraph was contradictory, first oblig- at~ the City to purchase bonds at lowest tenders and then permitting the rejection of all tenders. The apparent contradiction was considered unimportant, however. Section 10 Page 5: Should definitely ex- elude the Old Town of Delray Beach, in the levying for debt obligation on the Refunding Issue. Omit the worHs "extensions", and "mergers", which might be assumed to mean the Old Town 01' Delray Beach. See. 14 Page 5: Re-draft paragraph to show bonds 01' the Old Town of Delray Beach, as excepted in this agreement. ( I , '. ~''-'..:.:>.,.~ ' .. See. 16 Page 6: The provision, directing that proceedS of tax collections held in sinking fund be paid over to The Committee to redeem its obligations, should include the words "in proportion to the amount" of said obligationsll.1J. The words "uncontrolled discretion" in the last line of same section was objected to and it was recommended that they be elim- inated. ! After reading of the agreement, the City Attorney, by regular motion of the Council was in- structed to re-draft said agreement in compliance with recommendations and changes suggested by the Council. , The Clerk submitted and read the followrng letter from Mr. L'Engle and asked instruction in regard to continuing the acceptance of tax adjustment applications. L'ENGLE & SHANDS No. 207 Law Exchange Jacksonville, Fla. May 2nd, 1938 Hon. C.Y. Byrd City Attorney Delray Beach, Fla. Dear Mr. Byrd: Delray Beach ~~i. COUNCIL CHAMBER _ May 4, 1938 ~;; Referring again to the proposed action of the City of Delray Beach in setting up a Tax Adjust- ment Board, permit us to say that the Bondholders Committee cannot consent to the reduction or can- cellation of taxes levied for bond service for years subsequent to 193~. We are sure that you realize that some of the tax levies for bond service since 193~ have been pursuant to peremptory writ of man- damus, and it is hardly necessary to point out that such levies could not be disturbed without the affirmative consent of the bondholders at whose instance and for whose benefit the levies have been made. Although all of the same grounds do not apply to levies for bond service not made pursuant to judicial proceedings, it is the con- tention of the Bondholders Committee that such levies cannot be comprbmised or cancelled without the consent of those for whose benefit the levies have been made. ~ . We trust that these views meet your approva+, and that the Bondholders Committee will have the cooperation of the City Council and yourself. If the Committee should change or modify its views with respect to the above matters, you and the city officials will of course be promptly notified. Faithfully yours, L' ENGLE & SHANDS By ~.J. L'Engle After discussion, it was moved by Mr. Hall, in deference to the wishes of the Committee, and in view of the impending refinancing of the City, that the Council hold up further adjustments, other than applications already acted upon. Mr. Wodischek ~ seconded the motion, which carried unanimously. ' Upon enquiry by Mr. Hall as to whether the Committee would oppose the settlement of taxes on outlying lands, now excluded from the City limits, Mr. Byrd advised that he believed the Committee would be favorable to adjustments on such property, and the Clerk was accordingly instructed to accept and present such applications to the Board for settlement. Mr. Hill suggested that the Council, in view of the impending refunding, appoint an attormey to represent the City in the necessary negotiations. Mr. Byrd was recommended for the work and asked to specify the amount of fee he would charge for s~ch. After discussion he stipulated his fee, as follows: f ~) , . , .", ....'. ~~'J ;)'. COUNCIL CHAMBER -MAY 4, 1938 For validation through the Circuit Court and required work in connection therewith $l,OOO.OO If carried to the Supreme Court, an additional fee of 250.00 ], And if Federal Bankruptcy Law proceedings are necessary another additional fee of 500.00 '\ These 'fees, totalling $l,750.00 were discussed, and(ompared with those paid by other cities for such work. It was agreed that same compared favorably with Mr. Byrd's, which were lower, in most cases, than the figures submitte4 by other such municipalities. It was accordingly moved by Mr. Hall that the City Council retain a special attorney for the purpose of handling. the refunding of the City's debt; said special attorney to do all the legal work outlined in Section II of the bond refunding agreement at an agreed fee of $1,000.00, said fee to cover all legal work . in connection with the issuance of the refunding bonds, including validation through the Circuit Court, and such attendant work necessary thereto; an additional fee of $250.00 if appeal to the Supreme Court is necessary; and an additional fee of $500.00 should proceedings under the Federal Municipal Bankruptcj'LalC be resorted to -- the City to assume all extra explfise of transcripts and suchlike. Mr. Wodischek seconded Mr. Hall's motion, and on roll call the vote was as. follows: Mr. Gwynn yes, Mr. Hall yes, Mr. Hill yes, Mr. Miller yes, Mr. Wodischek yes. The motion carried. Upon motion, regularly made, seoonded and carried, Council adjourned. v , f AdLLJ.Ct~ City Cl k APPROVED: -JMnk