03-03-89SpMtg MARCH 3, 1989
A Special Meeting of the City Commission of the City of Delray
Beach, Florida, was called to order by Mayor Doak S. Campbell in the
Commission Chambers at City Hall at 4:50 P.M., Friday, March 3, 1989.
Roll call showed:
Present - Commissioner Patricia Brainerd
Commissioner Marie Horenburger
Commissioner Mary McCarty
Commissioner Jimmy Weatherspoon
Mayor Doak S. Campbell
Absent - None
Also present were - City Manager Walter O. Barry and
City Attorney Herbert W.A. Thiele.
Mayor Campbell called the meeting to order and announced that
this meeting has been called for the purpose of (1) Consideration of
Interim Financing for Capital Improvements.
1. Mayor Campbell reported there have been some problems concern-
ing possible conflict of interest, how this was handled, and the fact
that it was a rather late packet entry with regard to those who wished
to review it. He stated he would like approval of the Commission, in
order that they do not have any kind of ethics consideration or viola-
tion, to first establish a dollar amount at which they would like to do
the short term borrowing; once that has been established, he would like
the Commission to agree that they confirm the essential recommendation
in the best interest of the City by the Financial Advisor, the Finance
Director and the City Manager. The original proposals that had come
were in the five million dollar range and that essentially listed both
those projects that were currently going to get underway and the ones
they have been discussing with regard to short term needs in the City
from streets and drainage to other potential projects.
The City Manager advised there are fundamentally three varying
types and sizes of issue (1) the five million dollar package; (2) the
3.8 million dollar package that has been discussed and (3) a 2.159
million dollar smaller package alternative.
Ms. Horenburger stated she believed they ought to go ahead with
the five million dollar project. Mr. Weatherspoon concurred, granted
there are some projects they may move around or may not do, but at least
have the latitude to go up to that amount.
David Huddleston, Finance Director, interjected that the City
borrow a sufficient amount to fund those projects and not specifically
state the dollar amount, but they would be looking at a range of five
million.
Ms. Horenburger moved to establish a financing of not to exceed
five million dollars as outlined in the memo from the Finance Director
(dated March 2, 1989), each of those projects to have Commission approv-
al, and then take the recommendation of the Finance Director as to what
is the best offer for the City with a separate vote of confirmation in
that regard; except for those projects which are already approved.
Also, to expend that amount of money within a three year period, second-
ed by Ms. Brainerd. Upon roll call the Commission voted as follows: Ms.
Brainerd - Yes; Ms. Horenburger - Yes; Ms. McCarty - No; Mr.
Weatherspoon - Yes; Mayor Campbell - Yes. Said motion passed with a 4
to 1 vote.
Mr. Huddleston made reference to page 2 of his memorandum and
stated that based upon the submittal of proposals this past Tuesday they
contacted the three apparent low bidders and asked if they were extend-
ing their commitments through Wednesday of next week. They have
indicated their commitments would be in place. Barnett and Sun Bank
have a specific amount they have quoted; Prudential Bache continues to
be a market driven proposal. Based upon the Commission's action to
proceed with the five million dollars, the two proposals that included a
fixed rate were Sun Bank and Pru-Bache; Sun Bank's fixed rate proposal
would have a cost to the City of 7.556 and Pru-Bache would have a rate
of 7.784. For the variable rate Sun Bank submitted a 7.3259 and Barnett
a 7.64. Sun Bank, therefore, has the lowest rate on both the fixed and
variable rate, and Mr. Huddleston stated he would recommend they go with
the fixed rate. In discussion with Stan Ross of Dean Witter, he also
indicated the preference for the fixed rate and Sun Bank.
Upon question by Ms. McCarty relative to refinancing after
three years, Mr. Huddleston advised that if the City paid nothing back
into the principal balance, the Commission has considered several sales
and other revenue sources to offset this balance, i.e., the sale of the
tennis center land at a price of $750,000 and the utilization of Recrea-
tional Impact Fees at another $600,000 over a three year period. The
other possibility is to enter into negotiations with the CRA to have
them pay for their portion of the debt service on the East Atlantic
beautification. Upon further question, Mr. Huddleston stated there is
the potential that the City would have an offset of $1,050,000 in actual
collections and that would leave a balance on the tentative projects of
2.5 million plus the other projects of 1.2. Basically, if the City
recovered all those offsets the net impact on an annual basis to the
General Fund would be between $295,000 and $300,000 a year, best case
scenario. If the City went out with the full five million with no
offsets, the worst case scenario would be about $550,000 a year to the
General Fund; that would be a 20 year refinancing instrument.
Upon question by Ms. Horenburger with regard to draw down, Mr.
Huddleston advised they would not be able to exceed the yield on the
issue with the expectations that they would still have a parking garage;
they are going to be going in with the expectations that they will be
exceeding five million dollars. Ms. Horenburger clarified that what
they are saying is that the City has five million dollars sitting in the
bank and if, for example, Old School Square wants $300,000 within the
next six months they have it to give them; so, they are not obligating
themselves to actually draw and spend this money. She wanted it made
clear that they started out with this to establish a line of credit to
address these needs in lieu of the Comp Plan and doing a long term bond
down the road; she did not think it was ever foreseen that this would be
a total financing package for these projects, but merely an interim
financing.
Mr. Weatherspoon commented that one thing that has not been
mentioned is that if the City waited to do these projects three years
from now it would cost them more money, so this is just providing the
mechanism to do some of the projects a little earlier.
Ms. McCarty stated they have at least 3.7 million dollars to
move ahead with immediately, that money is going to have to be financed
down the road and she is a little bit apprehensive about that. Upon
question with regard to the Utility Tax, which was mentioned in the Comp
Plan, as also the reserve to be gone to, Mr. Huddleston stated this
would not be utilized by this financing. There is nothing that would be
part of this action that would raise the current eight and a half cents
to 10 cents.
Ms. Horenburger moved to approve the line of credit with Sun
Bank to close this deal as soon as possible, seconded by Ms. Brainerd.
Upon roll call the Commission voted as follows: Ms. Brainerd - Yes; Ms.
Horenburger - Yes; Ms. McCarty - No; Mr. Weatherspoon - Yes; Mayor
Campbell - Yes. Said motion passed with a 4 to 1 vote.
Mayor Campbell declared the meeting adjourned at 5:10 P.M.
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ATTEST:
MAYOR
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 March 3, 1989, which minutes were formally
approved and adopted by the City Commission on~.~F~~/~~.
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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