04-16-90SpMtg APRIL 16, 1990
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., Monday, April 16, 1990.
1. Roll call showed:
Present - Commissioner Jay Alperin
Commissioner William Andrews
Commissioner Mary McCarty
Commissioner David Randolph
Mayor Thomas E. Lynch
Absent - None
Also present were - Interim City Manager Robert Barcinski and
Acting City Attorney Jeffrey S. Kurtz.
Mayor Lynch called the meeting to order and announced that this
meeting has been called for the purpose of considering (1) Short Term
Financing for the Wastewater Treatment Plant; and (2) Selection of
Candidate to fill City Manager position.
1. The Interim City Manager reported that several weeks ago the
C~mmission directed staff to confer with our financial management firm,
Public Financial Management, (PFM) and the bond attorney to look at
options or ways for short term financing of the sewer plant project in
order to meet the deadline on the bid award the end of June.
David Huddleston, Finance Director, went through the letter
from PFM with basically four options. Option ~1 was the possibility of
doing one bond issue for the entire 22 million dollars. There were
problems with this because there are not rates sufficient at this time
to do, pass and approve a total of 22 million for financing. Also,
based upon the new IRS regulations they could not meet the two year
drawdown schedule with a June sale. Option #2 would be to do two water
and sewer issues, one for 6 million dollars for the Regional Plant and
also to incorporate engineering and design costs for other projects
which would be included in the 22 million. The advantage of this would
be that those monies would be available to proceed with the design and
engineering work so that when the second issue would come out they could
meet the 24 month drawdown. Concerns with this methodology would be
that it would not meet the timetable if the City decides to go with a
validation for this issue. Also, an engineering report would have to be
completed and available and in place for the Official Statement. He
stated that in talking with the Utilities Director he was informed that
Post Buckley feels they will have that report in hand either the end of
this week or next week.
Mr. Huddleston advised that Option #3 was to do a bond antici-
pation note and then follow up with a Water and Sewer Bond Issue. The
disadvantages are basically the same - as far as bond validation and
engineer's report and also it would be a slightly higher cost of issu-
ance. The two bonds would be slightly more advantageous and would also
take into consideration locking interest rates today which are generally
considered somewhat favorable. Option #4 is to do a line of credit and
then to take that out with a water and sewer bond issue. The advantage
of that is it would be the quickest to secure financing available,
depending on two options. It would normally take about a month if you
waived the advertising requirement; you could cut about two weeks out of
that process. The disadvantages are that you would have a higher cost
and there would not be the opportunity to earn arbitrage.
Mr. Huddleston stated the committee met on April llth and made
the recommendation to go with the two bond issues; you would always have
available in case something went wrong with that scenario the use of the
line of credit. Based on cost and timing, that would meet the June
award date which was one of the concerns.
Upon question by Mayor Lynch, Mr. Huddleston advised that a 60
day extension would give them a concern with meeting the drawdown
schedule to do the entire 22 million. Basically, they would be looking
at the first bond issue to provide all the engineering costs. The 24
month period is really one of the problems; even another 60 days only
gives them two months and they were looking at two and a half to three
years. What they were looking to do by combining it into one of the
options in the initial financing was to eliminate all that process of
the 24 month concern. It also allows you to have gone out for bid, hold
the bids for 90 days, can look at the exact cost of the project and then
you can place the bond issue very easily. Based upon that luxury you
arbitrage the money and make unlimited earnings, basically, if you can
meet the drawdown schedules.
Upon question by Mayor Lynch, Tom Huestis for PFM, stated with
regard to the money difference going to two bonds, it probably would not
cost the City anything because it can earn arbitrage earnings on the 24
month period; if they did one bond issue the risk that you could not
earn those arbitrage earnings would offset the earnings you would get in
that first bond issue.
Discussion followed on the validation question. Assistant City
Attorney Kurtz advised they always recommend that the bonds be validat-
ed; the .problem has been with a June time frame as far as the City
needing the money. If that was extended out for two months they would
have enough time to go through a validation proceeding. There is really
no question on the purpose of this project nor on the source of funding.
The Assistant City Attorney indicated .there would not be much of a
problem on validating the issue. Upon question, the Interim City
Manager advised that the extension question will be on the agenda
Thursday night at the Sewer Board meeting and he believes there will be
an option for a 60 day extension; it may cost a bit more because there
will be engineering work to do up front and some lead items that will
have to be bought by the contractor. Mayor Lynch asked that the City
Attorney's Office furnish him something in writing as to why they
validate sometimes and not at other times. Mr. Huddleston commented
that if this is going to be an open issue, in looking at the two-bond
issue they were looking that they would always have in abeyance the line
of credit option. They may want to proceed with that because that gives
them the flexibility to make all of those decisions; if they want to go
through validation they are going to be looking at a hearing date and he
did not know if the scheduling date would accommodate a June award. Mr.
Huddleston further commented that they may want to look at the line of
credit option and then have a summer sale; that might allow them to
expand it based on the 24 month spend down rule.
Mr. Huestis advised the bond counsel is actually giving them an
opinion that these bonds are legal and validly issued.
Robert Federspiel, attorney for the Sewer Board, advised the
agreement is still being worked on, but the contractor is indicating
that he would extend for 60 days on the basis that the Commission would
preauthorize some engineering review that will have to be done during
the process; thus, they would not lose that time in construction. The
net cost, if they cancelled, would be approximately $164,000. Mr.
Federspiel stated he understood Boynton Beach has their funding.
Upon question by Mr. Randolph as to an estimate of what the
cost to the citizens will be, Mr. Huddleston stated the total for the 22
million dollars in projects will basically be $5.00 per month. If they
go with two issues they could blend that in over the two different
issuances.
Upon question by Ms. McCarty as to how expensive the line of
credit would be, Mr. Huddleston stated if you only use it to award the
contract you are looking at bond counsel's cost and also the bank±s
closing costs; probably under $10,000 for the two.
The Assistant City Attorney advised the authorizing resolutions
are going to be on the April 24th agenda, in any event, so you are going
to know at the time you vote on those what happened at the Sewer Board
meeting. Upon question by Mayor Lynch, the Assistant City Attorney
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reiterated that validation is absolutely the safest position to take;
they do not anticipate any problems in getting this bond validated.
They were operating under a presumption that June was the target date
and that eliminated the possibility of validation. August 29th is the
end of the 60 day period.
Mr. Andrews moved to go with the two bond option, seconded by
Mr. Randolph. Upon roll call the Commission voted as follows: Ms.
McCarty - Yes; Dr. Alperin - Yes; Mr. Andrews - Yes; Mr. Randolph - Yes;
Mayor Lynch - Yes. Said motion passed with a 5 to 0 vote.
Before roll call the following discussion was had:
The Assistant City Attorney stated the question of validation
can be placed on the upcoming agenda of April 24th; that is actually the
time period where they are going to have the authorizing resolution and
this can be addressed at that time. Mayor Lynch clarified they can
still go ahead tonight so everyone will know they are on target; it is
just that they may extend the contract for 60 days and validate and that
will be a later decision.
At this point the roll was called to the motion.
2. Mayor Lynch stated that they all had the opportunity today to
meet with David Harden and asked for comments.
Mr. Andrews advised his comfort level was raised substantially
with the items regarding the financial burdens they face and also with
the management decisions which should be made. He felt very comfortable
in his ability to work with Mr. Harden and believed all of them could
get the things accomplished that they wanted to do.
Ms. McCarty stated she too is very comfortable with Mr. Harden
as the choice, more comfortable than she was a few weeks ago.
Dr. Alperin stated he is very agreeable to the decision favor-
ing Mr. Harden and would go along with it.
Mr. Randolph advised the brief time he spent with Mr. Harden
today just further strengthened his resolve; he feels he can do the job
and believes they will have a City Manager on board who will have enough
going for him to have some tenure here.
Mayor Lynch commented that he feels Mr. Harden has a very good
feeling for people and one of his most important jobs will be working
with the personnel and staff in City Hall. He was always comfortable
with his financial outlook and his ability to work with the City govern-
ment. The opinions of the people whom he talked with from Winter Park
this past week have all been very positive. Mayor Lynch recommended
that some direction be given to the Attorney's Office in discussing
contract and negotiations with Mr. Harden.
Ms. McCarty moved to negotiate a contract with Mr. Harden,
seconded by Mr. Andrews. Upon roll call the Commission voted as fol-
lows: Dr. Alperin - Yes; Mr. Andrews - Yes; Mr. Randolph - Yes; Mayor
Lynch - Yes; Ms. McCarty - Yes. Said motion passed with a 5 to 0 vote.
It was the consensus of the Commission to start negotiating at
$70,000 and, severance, six months. Regarding vacation and sick time,
the Commission concurred that they would allow Mr. Harden to have an
advance on both these items the first year, 12 days sick, 12 days
vacation, rather than accrual. In other words, at the end of that year
he would have earned this time like any normal employee, it is just the
time of usage that makes the difference.
Ms. McCarty advised that Mr. Harden would be interested in
participating in the ICMA program which is standard. He would also be
more interested in a car allowance than a City car, the amount per
month to be determined later. The Assistant City Attorney clarified
that the Commission would want a car allowance that would equate,
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essentially, to a car. Moving expenses and allowance for temporary
quarters would be provided. Mayor Lynch commented that Mr. Harden would
want one month to finish up some projects he is involved in, but would
agree to come for at least two or three days at a time during that
period to make sure he is involved in the budget making.
It was the consensus of the Commission to have an open ended
contract.
Mayor Lynch declared the meeting adjourned at 6:40 P.M.
JCi~Y -Cl~rk
ATTEST:
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 April 16, 1990 which minutes were formally
approved and adopted by the City Commission on ~f],~ ~7 /~O
/ '
City Clerk~
NOTE TO READER: If the minutes that you have received are not completed
as indicated above, then this means that these are not the official
minutes of 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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