06-17-93SpMtg JUNE 17, 1993
A Special Meeting of the City Commission of the City of
Delray Beach, Florida, was called to order by Vice-Mayor Ken
Ellingsworth in the Commission Chambers at City Hall at 4:05
P.M., Thursday, June 17, 1993.
Roll call showed:
Present - Commissioner Jay Alperin
Vice-Mayor Ken Ellingsworth
Commissioner Barbara Smith
Mayor Thomas Eo Lynch (Arrived 4:07 P°M.)
Absent - Commissioner David Randolph
Also present were - Acting City Manager Robert A.
Barcinski and
City Attorney Susan A.Ruby
Vice-Mayor Ellingsworth called the meeting to order and
announced that this meeting has been called for the purpose of
considering the following:
1. Resolution No° 60-93. The Commission is to consider
authorizing the negotiated sale of Water and Sewer Refunding
Bonds Series 1993A in the aggregate principal amount of
$30,000,000 and Water and Sewer Revenue Bonds 1993B in the ini-
tial aggregate principal amount of $10,000,000, and determining
certain details of said bonds as further described in the caption
of the resolution.
The City Manager presented Resolution No. 60-93:
A RESOLUTION OF THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH, FLORIDA, AUTHORIZING
THE NEGOTIATED SALE OF CITY OF DELRAY BEACH,
FLORIDA, WATER AND SEWER REFUNDING REVENUE
BONDS, SERIES 1993 A, IN THE INITIAL AGGRE-
GATE PRINCIPAL AMOUNT OF $21,238,997.35, AND
CITY OF DELRAY BEACH, FLORIDA, WATER AND
SEWER REVENUE BONDS, SERIES 1993 B, IN THE
INITIAL AGGREGATE PRINCIPAL AMOUNT OF
$6,865,477.25; DETERMINING CERTAIN DETAILS OF
SAID BONDS; PROVIDING FOR THE APPLICATION OF
THE BOND PROCEEDS; APPROVING THE FORM OF, AND
AUTHORIZING THE EXECUTION AND DELIVERY OF, A
BOND PURCHASE AGREEMENT TO EFFECT THE NEGOTI-
ATED SALE OF THE BONDS; APPROVING THE FORM OF
AN AUTHORIZING THE EXECUTION OF AN OFFICIAL
STATEMENT IN CONNECTION WITH THE OFFERING AND
SALE OF THE BONDS AND APPROVING, RATIFYING
AND CONFIRMING THE DISTRIBUTION OF A PRELIMI-
NARY OFFICIAL STATEMENT BY THE UNDERWRITERS;
AWARDING THE BONDS; APPOINTING AN ESCROW
AGENT; APPROVING THE FORM OF AND AUTHORIZING
THE EXECUTION AND DELIVERY OF AN ESCROW
DEPOSIT AGREEMENT; APPOINTING A PAYING AGENT;
APPOINTING A REGISTRAR; APPROVING THE FORM OF
AND AUTHORIZING THE EXECUTION AND DELIVERY OF
A PAYING AGENT AND REGISTRAR AGREEMENT RELAT-
ING TO THE BONDS; PROVIDING FOR A BOND INSUR-
ANCE POLICY AND A RESERVE ACCOUNT CREDIT
FACILITY SUBSTITUTE FOR THE BONDS PROVIDED BY
AMBAC INDEMNITY CORPORATION; AUTHORIZING THE
RELEASE AND APPLICATION OF CASH AND PERMITTED
INVESTMENTS OF SUCH CASH FROM THE DEBT SER-
VICE RESERVE ACCOUNT AND PROVIDING FOR THE
REPLACEMENT THEREOF WITH A RESERVE ACCOUNT
CREDIT FACILITY SUBSTITUTE PROVIDED BY AMBAC
INDEMNITY CORPORATION; APPROVING THE FORM OF
AND AUTHORIZING THE EXECUTION AND DELIVERY OF
GUARANTY AGREEMENTS WITH AMBAC INDEMNITY
CORPORATION RELATING TO THE RESERVE ACCOUNT
CREDIT FACILITY SUBSTITUTES; AMENDING AN
SUPPLEMENTING CERTAIN PRIOR RESOLUTIONS IN
CONNECTION WITH THE FOREGOING; AUTHORIZING
THE PROPER OFFICERS OF THE CITY TO DO ALL
OTHER THINGS DEEMED NECESSARY OR ADVISABLE AS
TO THE SALE AND DELIVERY OF THE BONDS; AND
PROVIDING FOR AN EFFECTIVE DATE.
(Copy of Resolution No. 60-93 is on file in the offi-
cial Resolution Book)
Stacy Donnelly, Public Financial Management, Inc.,
stated the purpose of this refunding is two-fold. Primarily, the
rates have dropped since the City issued bonds in 1988 and 1991,
and the City was able to get quite a significant amount of
present value savings by refinancing a portion of each issue.
Also, the City looked in their capital plan and decided to add to
that 86,674,000 for new improvements to the water and sewer
system. The project consisted of various things; golf course
wells, land acquisition, storage tank improvements, production
wells, installation of six 12" water mains and high service well
pumps.
Ms. Donnelly advised they structured this bond issue so
as to spread out the payments to allow the City to keep rates the
same and have their budgeted increases. What it did was lower
the City's debt service by about $375,000 from now until the year
2000 and then raises it only $150,000 for thereafter. She empha-
sized that the security is the net revenue of the water and sewer
system.
Ms. Donnelly advised that the refunding plan consists
of putting governmental securities into the escrow account which
will pay off the refunded bonds. They also did a mechanism which
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is called the forward purchase contract which gave the City an
additional approximate $95,000 that the City did not have to
provide in funds. She added that the reason they tried to accom-
plish this refunding quite quickly was because of the tax law
considerations that the City was under with refunding the 1988
bond issue; they wanted to make sure that they got this refunding
accomplished during the time the old regulations were in effect,
which at that time was until July 1st.
Ms. Donnelly stated they bid out the bond insurance to
the three major bond insurors; the result of that competitive
process saved the City somewhere between $20,000 and $60,000 on
the refunding. She advised the bottom line of this transaction -
the total gross savings of the refunding - was about 3.5 million
dollars and the net present value savings to the City was almost
1.2 million dollars. She felt the City received a very favorable
deal and they were very pleased with the underwriters and the
performance they had selling the bonds. Ms. Donnelly recommended
that the City accept the bond purchase agreement.
Steve Sanford, Mudge Rose, stated Resolution No. 60-93
will basically set the details of the bonds, finishes up all of
the terms, awards the bonds to the underwriters and approves the
form of certain documents which are necessary to complete the
transaction. In addition, it formally appoints First Union as
the City's paying agent and registrar and escrow agent for the
refunding. Mr. Sanford advised there are six agreements which
are attached to the resolution and delineated Exhibits A through
F.
Mr. Ellingsworth moved for adoption of Resolution No.
60-93, seconded by Dr. Alperin. Upon roll call the Commission
voted as follows: Mrs. Smith - Yes; Dr. Alperin - Yes; Mr.
Ellingsworth - Yes; Mayor Lynch - Yes. Said motion passed with a
4 to 0 vote.
Mayor Lynch declared the meeting adjourned at 4:20 P.M.
ATTEST:
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The undersigned is the City Clerk of the City of Delray
Beach and that the information provided herein is the minutes of
the meeting of said City Commission of June 17, 1993, which
minutes were formally approved and adopted by the City Commission
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.
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