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08-03-93SpMtg AUGUST 3, 1995 A Special Meeting of the City Commission of the City of Delray Beach, Florida, was called to order by Mayor Thomas E. Lynch in the Commission Chambers at City Hall at 6:00 p.m. on Tuesday, August 3, 1993. 1. Roll call showed: Present - Commissioner Jay Alperin Commissioner Ken Ellingsworth Commissioner David Randolph Commissioner Barbara Smith Mayor Thomas E. Lynch Absent - None Also present were - City Manager David T. Harden and City Attorney Susan A.Ruby The City Manager requested that a fifth item be added to the special meeting agenda as an emergency item, that being a bid award for the purchase of furniture for the Fire Station Headquarters. Dr. Alperin moved to amend the special meeting agenda to include consideration of a bid award for furniture at the Fire Station Headquarters as item %5, seconded by Mr. Ellingsworth. Upon roll call the Commission voted as follows: Mrs. Smith - Yes; Dr. Alperin - Yes; Mr. Ellingsworth - Yes; Mr. Randolph - Yes; Mayor Lynch - Yes. Said motion passed with a 5 to 0 vote. 1. Presentation of Proclamation - Delray Beach National Little League. Mayor Lynch read and presented a proclamation official- ly honoring the Delray Beach National Little League, Major League All-Stars for their District 7, Sectional, and Florida State Championships, and wishing them continued success at the upcoming Southeast Regional Finals to be held in St. Petersburg, Florida, on August i0, 1993. Each of the team members and coaches was individually recognized and congratulated on the team's efforts and achieve- ments. 2. Decade of Excellence Bond I~sue Repayment Schedule. Joe Safford, Finance Director, explained that the city is ready to embark on the sale of the second half of the Decade of Excellence bond issue and has been studying how best to incor- porate the debt service for the new bond issue in the budget process. He reviewed with the Commission two different financing scenarios, the purpose being to compare a declining debt service with a wrap around or level debt structure in order to evaluate the millage impact of the different financing techniques. The declining debt service would cost the City .3412 mils or about $800,000 in annual debt service next year. If the wrap around method is used, the increase in millage will only be .1782 and the added annual debt service next year is roughly $417,000. That is the positive feature of the wrap around. The negative feature of the wrap around is that the total debt service will increase by $I.8 million over a period of 20 years. However, if you take the $1.8 million and apply a present value table to it, because we have moved so much of the new debt service to the end, you actually have a savings on a present value basis by going the wrap around method. Mr. Safford stated that he recommends the wrap around debt structure since it provides for fairly level debt service over the life of the bond issue, has the least amount of impact on debt millage and is the most cost effective scenario when compared on a net present value basis with the declining debt service scenario. Discussion ensued as to the benefits and drawbacks for each of the two financing scenarios. Some concern was expressed that with the wrap around method, the city is simply putting things off and shifting the burden to future generations. On the other hand, if the new debt is added to the present level, the current customer assumes a bigger burden under the declining debt scenario. After discussion, it was the majority consensus of the Commission to support the staff recommendation of using the wrap around scenario. The Mayor stated he would like to revisit this issue before the budget is finalized. Discussion followed as to a schedule for budget workshop meetings. It was the consensus of the Commission to schedule budget work sessions for Wednesday, August 25th, and Tuesday, August 31, 1993. 3. Fiscal Year 1993/94 Budqet and Proposed Millage Rate for Fiscal Year 1993/94, The City Manager distributed a summary sheet to show comparisons by department. He noted that the Support Services function is being eliminated and will be combined with Adminis- trative Services. Further, with respect to the Fire Department, the $8,231,000 figure includes the cost of serving Highland Beach. The comparitive cost for just serving Delray Beach is $7,163,000. Under Engineering, the method of accounting for certain personnel has been changed. Instead of directly funding positions working on Decade of Excellence projects out of the bond issue budget, they are now being funded in the General Fund by monies transferred from the bond issue. The same thing is being done with the Water and Sewer Bond. There is no additional staff; it is simply a change in accounting procedures. -2- 8/3/93 Following questions and discussion on the handout, the City Manager reviewed certain elements set forth in the transmit- tal letter of the proposed budget document. Items discussed included increased costs for maintenance of completed Decade of Excellence Phase I projects, maintenance of beautification areas, and personal services costs (i.e., proposed merit increases, increased contribution to the General Employees Pension, and increased health care costs). Because of the combined effect of decreasing tax base, flat non-ad valorem revenues, increasing costs and increases in level of service, the City Manager stated that he is recommending a property tax millage of 8.25. At the 8.25 mils, the proposal is to delete and freeze seven (7) posi- tions as outlined in the transmittal letter. In addition, the Manager has reduced his funding recommendation for the Library to a figure which is $6,800 less than what had been requested. Old School Square's request for additional funding in the amount of $114,500 is not included in the proposed budget. Direct funding to the Delray Affair in the amount of 83,000 has also been elimi- nated, although the city would continue to provide in-kind ser- vices. There are a number of service improvements that are included in the budget as presented. In the area of youth ser- vices and neighborhoods, the Parks and Recreation budget includes $28,710 for teen and young adult programs. Grants include $51,150 for the Boys and Girls Club to complete the $85,000 agreed to by the Commission last spring. Transfers to the Block Grant program from the General Fund are increased by $36,590 to fund a Neighborhood Program Specialist position and the Planning and Zoning budget includes $43,091 for a Neighborhood Planner. In conclusion, the Manager stated that staff will continue to work to identify possible alternatives to reduce the millage to 8.0 mils. In response to a question from Mayor Lynch, the City Manager stated the proposed millage of 8.25 is based on the wrap around method for debt service. If the Commission wants to allow for the declining method, he would recommend that the proposed millage be set at 8.40 mils. In response to a question from Mr. Randolph as to what other positions might be affected, the City anager advised that the Safety Officer position is vacant, the Traffic Engineer has resigned and that position will be vacant, the proposal to bring in a Neighborhood Planner could be eliminated, and there is also a clerical position vacant in the Planning Department at this time. With respect to the gas tax, the City Manager advised that it is scheduled for final action by the County Commission on August 17th. If the gas tax increase is adopted, that will give the City additional revenue of approximately $325,000 which, in turn, equates to about 12/100 of a mil. Discussion ensued rela- tive to the impact of the gas tax if adopted. -3- 8/3/93 Mr. Randolph moved to set the proposed millage rate at 8.25 mils, seconded by Mrs. Smith. Upon the roll call, the Commission voted as follows: Dr. Alperin - Yes; Mr. Ellingsworth - Yes; Mr. Randolph - Yes; Mayor Lynch - Yes; Mrs. Smith - Yes. Said motion passed with a 5 to 0 vote. 4, Approval of Road Construction Agreements with William Swaim an~ Associates. The City Attorney stated these are two agreements with William Swaim, one for George Bush Boulevard and one for Palm Trail. She wants to insert a base year into the agreements for the purpose of determining the amount the City would pay back at one time for the incremental pay back scenario as put forth in the agreement. She has also suggested that this agreement be approved, but effective upon amendment of the Community Redevel- opment Agency Plan, to protect the City from having to expend monies and not really receive the value we were looking to re- ceive from the CRA perhaps doing other projects down the line. They also tried to get, in the indemnification clause, Mr. Swaim to hold the City harmless for any inverse condemnation kinds of lawsuits that may arise, but he is not willing to do that. Dr. Alperin stated this is the first time he has seen anything in black and white, and he has numerous questions which he would want addressed before he would consider voting on the issue. Considerable discussion ensued relative to how much money is really being waived, the amount of the annual reimburse- ment payments, the Community Redevelopment Agency's involvement and commitment to revise their plan, prioritization of improve- ments to the northeast area, and the provision of a time frame for completion of the road construction improvements. In response to a question from Mrs. Smith, Mr, Chris BrQwn. Community Redevelopment Agency, stated the CRA plan amend- ment should be before the Commission in September 1993. The City Attorney stated that changes could be made to the agreements to include a base year and also to clarify that this is the entire agreement; that the City does not mean to supersede the conditions imposed by the Planning and Zoning Board. The other item which needs a consensus is whether to make it effective upon the CRA amending its plan. MS. Bonnie Miscall,. of the law firm Rude, Barnett, McClosky, Smith, Schuster and Russell, representing Bill Swaim and Associates, stated they were prepared to add in some sort of time frame for commencement; however, they are opposed to the CRA amendment because in their view that would make the documents null and void. -4- 8/3/93 Discussion followed on the need to provide for a base year for calculation of the tax increment and establishment of a payment date that would be acceptable from a budgetary stand- point. The Mayor asked for a consensus from the Commission as to whether they wished the agreements to be modified to require the condition of the CRA's amended plan. It was the consensus to not require this change. Direction was given to the City Attor- ney to work on the verbiage changes discussed and, if acceptable to all parties, to bring the agreements back to the Commission at the August 10, 1993, regular meeting for final approval. Bid Award/Furniture Purchase fQr Fire Station Headquar- ters. The City Manager stated that an issue has been brought to Assistant City Manager Barcinski's attention by Mr. Andrews in that the two bids are for different manufactures, and Mr. Andrews has advised that the quality of the manufacturers is significant- ly different. In view of the questions which have been raised, the potential for saving $1,500 is not worth any possible loss of public confidence in the process used. The Manager felt that it would be better to take our time and ensure that all of the issues which have been raised are addressed. The Assistant City Manager stated since there are some clouds or questions as to the quality or the differences between the two vendors, he would rather not have Commission act at this time but have the Purchasing staff take it through the bid pro- cess to ensure the best value for the money. On further discussion, it was the consensus of the Commission to defer action on this item until it has been proper- ly reviewed by staff and a formal recommendation is developed. There being no further business, Mayor Lynch declared the special meeting adjourned at 8:05 p.m. City -el e~k F ATTEST: The undersigned is the City Clerk of the City of Delray Beach, Florida, and the information provided herein in the min- utes of the special meeting of said City Commission held on -5- 8/3/93 August 3, 1993, which minute, s were formally approved and adopted by the City Commission on , c~ty Cle/fk NOTE TO READER: If the minutes that you have received are not completed as indi- cated above, then this means that these are not the official minutes of the City Commission. They will become the official minutes only after they have been reviewed and approved which may involve some amendments, additions or deletions to the minutes as set forth above. -6- 8/3/93