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12-27-89SpMtg DECEMBER 27, 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 5:40 P.M., Tuesday, December 27, 1989. Roll call showed: Present - Commissioner William Andrews Commissioner Patricia Brainerd Commissioner Mary McCarty Commissioner Jimmy Weatherspoon (Arrived 5:44 P.M.) Mayor Doak S. Campbell Absent - None Also present were - Interim City Manager Malcolm T. Bird 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 considering: 10. Considerati. on of. Language for Delray Golf, Inc. Letter of Credit Securing Performance of the 'Li~'ense Agreement. City Attorney recommends against acceptance of Proposed Language. Mayor Campbell stated they have had a request, due to a conflict in scheduling, to move this item first on the agenda. The City Attorney reported that, as background, the license agreement which the Commission approved a few weeks ago provides in Article XX that a security for faithful performance of the contract is to be supplied in the amount of $250,000 in a form acceptable to the City Attorney's Office. The form of the letter of credit which has been submitted initially and throughout up to the present time is not accept- able to them. They have insisted upon a letter of credit format in the form used with other vendors and contractors, and including the previous licensee at the golf course, which is a simple irrevocable letter of credit containing no conditions. The licensee apparently wished to come here this evening and state his case to the Commission. This item is on the agenda primarily for the Commission to see if they desire to direct the City Attorney's Office to approve something other than that which they have declined to approve. Paul Shapiro, attorney for Mr. Goldstein, stated that what the agreement provides for and what the bid package contemplated was a surety bond concerning the obligations of the licensee, or in the alternative, the ability to provide a letter of credit. As he under- stands it, when the time came to provide a surety bond the licensee was unable to do this; it was difficult to obtain because it is an unusual request. In lieu of a surety bond they requested the ability to post a letter of credit which was accepted. They have NCNB, which is going to be doing the banking for the corporation, prepared to issue that letter of credit. The language was designed, essentially, to put the City in the same position that it would be in were a surety bond issued. Mr. Shapiro advised that in his experience with surety bonds it gives one assurance that there is a pocket there to pay it; it does not make it any easier to get paid. They prepared language to say that the City could draw upon the letter of credit if the City walked into the bank with an affidavit, signed appropriately, which said Delray Golf, Inc., had defaulted in one of the ways listed in the license agreement, that the value of the default is "x" dollars, that they had given any notice that was required under the agreement and any cure period that was provided had expired, and in addition, they have given notice to the licensee of their intention to draw on the letter of credit within 15 days. It further says that if the licensee submits to the bank a statement that it disputes the City's right to collect on the letter of credit, that nevertheless the bank will pay under the letter of credit; however, instead of paying the money to the City it will pay it into a separate bank account, until the dispute between the City and the licensee is resolved. He stated they also were willing to provide, if there were such a dispute, that the legal fees of the prevailing party would be the responsibility of the losing party. Mr. Shapiro added that in his opinion as a commercial lawyer this is a clean letter of credit and it is irrevocable. Obviously, the cleanest letter of credit would be a letter of credit in favor of the City and says the City can walk in any time and just draw; they don't have to allege what's wrong, give any notice, etc. He introduced Lee Weekes of Weekes & Calloway, Inc. who is providing insurance for the golf course; he will confirm to the Commission that he can provide Mr. Goldstein/Delray Golf, Inc. with a surety bond, if that is what the City would prefer because of the liability for them to agree on letter of credit language. He added that they may deliver a surety bond; the letter of credit is an option. Mr. Weekes confirmed that he feels strongly they could acquire a surety bond in the amount of $250,000 for Mr. Goldstein; however, it seems perhaps like an unnecessary step due to the fact that the premium is somewhere in the $2500 to $7500 range for the bond. Mayor Campbell stated that his own feeling is that he is willing to go part way and would have no problem with a middle ground wherein there is no burden on the City to initiate any action to file a legal proceeding in order to collect that; that burden should really be put on the applicant, but looking at it much like a surety as opposed to an absolute right to collect money. Something along the lines that for any monetary damages that the City would claim that the City would give them 10 days notice that they intend to collect on the letter of credit to cure default, and if they did not do it within the 10 days, we present the letter. Also, that they could, if they felt there was a dispute with regard to the authenticity or legitimacy, of the complaint, the burden would be on them and they could file a declaratory action in court to try and litigate it; but the burden again is on them to initi- ate such, incurring those initial costs, time and effort. Also, if they were not to prevail, that the City would be reimbursed in regard to attorney's fees and costs. Money would come out of the bank and be put into the registry of the court. Upon question by Ms. Brainerd, the City Attorney advised that his preference in order would be: (1) a simple clean irrevocable letter of credit; (2) dependent on the language of the surety bond, those may be interchangeable. The advantage of the first option is that the City holds the money throughout if litigation ensues. The disadvantages of the reverse of that is in one case you have no money anywhere and you are basically litigating with the principal and the surety on a bond and you would be litigating with the licensee over the amount of money which was deposited with the bank or with the court. Discussion followed with the City Attorney relative to the various options. Mr. Weatherspoon stated his first preference, obviously, would be the control of the money; however, he is willing to compromise as long as he is assured that the funds are there to cover whatever the problem is. He felt since this is a contractual agreement, a partner- ship between the City and Delray Golf, they should try and work with a sense of fairness. Ms. Brainerd moved to direct the City Attorney's Office to approve a letter of credit with the compromise language that Mayor Campbell has suggested, seconded by Mr. Weatherspoon. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Ms. McCarty - No; Mr. Weatherspoon - Yes; Mayor Campbell - Yes. Said motion passed with a 4 to 1 vote. 1. Public Hearing on Two Offers to Purchase City Owned Property at Miramar and Venetian Drive. The City Attorney reported that the Commission has before them two separate contract offers which have been advertised for Public Hearing. What the Commission needs to do is (1) open a Public Hearing -2- 12/27/89 for comment upon the two offers, (2) accept any additional offers for the property or accept any modifications to the offers pending and (3) after the closing of the Public Hearing they need to discuss what, if any, of the offers are acceptable to them and then take a vote to accept one or more; they are under no obligation to select any of the offers. At that point it would be direction to the Administration and the City Attorney's Office to enter into the contract and then to closing in accordance with the terms of whatever contract they chose. The City Attorney outlined the two basic contracts: (1) An offer from Steve Curic in the amount of $475,000 through Gimelstob Realty. Essentially there are no terms or conditions to this except that it has to be able to pass satisfactory soil tests and subject to financing approval (2) An offer from William Bradley through Plum Realty in the amount of $474,900. There are conditions to this which are the issuance of building permits and the approval by the Commission of the plat and a site and development plan for the site to show 15 two story residential town house zero lot line units; deposits would be placed in an interest bearing account with Sun Bank and the contingency that the effective date would be six months. A public hearing was held having been legally advertised in compliance with the laws of the State of Florida and the Charter of the City of Delray Beach, Florida. The public hearing was closed. Ms. McCarty stated she felt they should take the offer that affords them the least amount of conditions so they can be done with it as smoothly as possible. Mayor Campbell commented that one of the differences he sees is the absolute closing date of February 20th on the Gimelstob offer. Ms. McCarty moved for approval of the Curic proposal, seconded by Mr. Andrews. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Ms. McCarty - Yes; Mr. Weatherspoon - Yes; Mayor Campbell - Yes. Said motion passed with a 5 to 0 vote. 2. Public Hearing on an Offer to Purchase the City Owned Property at 2507 North Federal Highway (Adult Bookstore). The City Attorney reported there is a proposal from David and Sheila Turner and their assigns in the amount of $250,000; this is subject to receiving first mortgage financing approval and is a cash transaction to the City, less the real estate commission. There is an absolute closing date of February 28th with a mortgage contingency. The City Attorney added there are two other contingencies, i.e., if there are any structural or site improvements that exceed 3% of the contract price the buyer would have the right to rescind and return his deposit, and they also have a hazardous waste material inspection. Ms. McCarty questioned the code improvement estimates relative to the 3%; other than the water, could Code Enforcement go out and make a list as she believes they had asked to have done. It is hard to make a determination if they don't know what kind of figures they are talking about. The Interim City Manager stated he believes the estimate is in the neighborhood of $6,000 or $7,000 for electrical improvements, potential roofing and other things which would be required to bring it to code (interior of the building). If they are talking about landscap- ing, then they would have those additional costs to add. A public hearing was held having been legally advertised in compliance with the laws of the State of Florida and the Charter of the City of Delray Beach, Florida. The public hearing was closed. A representative, speaking for Mr. Turner, advised that his main concern is the building and that the City may condemn it. He has not really taken the landscaping code into consideration relative to the 35. The Interim City Manager stated that part of the lack of surety as to exact costing is that part of what they are going to be doing is go in and rip out all of that interior material that has not yet been removed; they don't know what is behind it. -3- 12/27/89 Mayor Campbell commented that the structural elements are already taken care of in the preprinted contract and suggested that the Commission accept the contract deleting Items 1 & 2. Ms. McCarty moved to accept the contract deleting Items 1 & 2, seconded by Mr. Andrews. Upon roll call the Commission voted as fol- lows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Ms. McCarty - Yes; Mr. Weatherspoon - Yes; Mayor Campbell - Yes. Said motion passed with a 5 to 0 vote. Before roll call the following discussion was had: Ms. Brainerd clarified that if they go with this as proposed the net loss to the City on this acquisition is $20,000; in other words, from the purchase price of $257,000 to what they have come away with being $237,000. The difference is because of the real estate commis- sion. Ms. McCarty stated she would be curious to see an indication of the manpower savings from the Police Department where less patrols have had to be on North Federal Highway. At this point the roll was called to the motion. 3. Public Hearing on Request for Waiver of Sign Code to Permit a Nonconforming Sign at 2055-85 South Congress Avenue. Harry Kwartler made reference to a letter written by his son, Robert, to the Mayor and dated August 24, 1989, which amply stated their case. He furnished the Commission with photographs of the subject property. Upon question by Mayor Campbell, Mr. Kwartler stated they had representation from the seller that everything was conforming and they were unaware that the seller had been cited. A public hearing was held having been legally advertised in compliance with the laws of the State of Florida and the Charter of the City of Delray Beach, Florida. The public hearing was closed. Upon question by Ms. McCarty regarding the fact that Code Enforcement decisions are not appealable to the Commission and there- fore, why is it being discussed, the City Attorney stated this is a request, nonetheless, for a waiver of the Code which would indirectly excuse a finding of a violation by the Code Enforcement Board. Ms. McCarty stated she felt they were setting a very dangerous precedent by using the words "waiver of the Code" However, she commented that she was very sympathetic to Mr. Kwartler's plight as he had been misled and misrepresented. She felt the only way it would be important for the Commission to discuss is if the City, in some way, was negligent. Ms. McCarty moved to deny the waiver, seconded by Ms. Brainerd. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Ms. McCarty - Yes; Mr. Weatherspoon - Yes; Mayor Camp- bell - No. Said motion passed with a 4 to 1 vote. 4. Public Hearinq on Request for Waiver of the Sign Code to Permit a Non-conforming Sign on the Linpro Property. The City Attorney reported the situation is similar here in that the problem is not caused by the City. He added that this will, in his mind, broaden the scope of the waivers that the Commission has accepted in the past; his recollection is that the ones that have been done in the past either dealt with procedural things, payment of fees or temporary situation. This would have a permanency affected to the property, somewhat like a variance. A representative from the Linpro Property advised that origi- nally there was a complete sign program for tenant, directional and main identification which was designed to enhance the project as a whole and keep the colors consistent. During the processes of the project there was a difference in location brought about for visibility which brought it to the north end of the project. The sign program was presented to and reviewed by the CAB with the necessary documents and approval was -4- 12/27/89 granted at that time for all of the signs with a slight minor change in copy to the large sign. The reader board was then issued a permit stating that the setback requirement was 150 feet from 1-95. He stated the sign was installed with that setback, inspected and approved at this location. However, the sale of the property and the replatting of the northernmost building made the existing sign a nonconforming sign to the sale property and it was necessary to relocate it. In summary, he stated it was discovered that the sign was too close to the property line; presently they are unable to obtain the permit for the sign due to the fact that it is too close and they cannot move it back far enough to meet the 10 foot setback. The sign is in no way hazardous or interferes with any easements, pedestrian or vehicular traffic as it abuts a railroad and is over 250 feet from 1-95. A public hearing was held having been legally advertised in compliance with the laws of the State of Florida and the Charter of the City of Delray Beach, Florida. The public hearing was closed. Discussion followed with regard to how this differs from the case beforehand. The Interim City Manager also advised that they were in the setback when it was originally constructed; the road widening brought the pavement closer to the sign. He clarified that this loca- tion is the same distance from the 1-95 right-of-way line, although the sign was physically moved 500 feet directly south when a portion of the property was sold. There was discussion as to the location of the original sign and the various approvals. Ms. Brainerd commented that she did not feel the problem is with the City; staff told him that if he moved the sign it would be in violation and subject to a triple penalty. The representative advised that just to move the sign with the same distance back is not acknowl- edged as a violation; to do it before the permit was actually in hand would be the said violation. Mr. Weatherspoon stated the City apparent- ly did not pick up on the setback the first time and due to the time constraints was why they opted to pay the penalty and move it. The Interim City Manager commented the City gave them a mea- surement from 1-95, they met that requirement and that was the condi- tion; when they placed the sign they were in conformance but they are their setback and that is improper. Now in making application to relocate it 500 feet south, it was rereviewed, was reviewed against the plat line and it is 4 feet inside the setback. He clarified that it is now clearly identified as being improperly placed in that it is 4 feet inside the setback. Ms. McCarty stated she could base her opinion on the issue that the City made an error early on which is different than the other case. Also, since the applicant moved the sign without a permit and was willing to take on the fines, she felt those fines should stand. Discussion followed relative to the Commission's feeling with regard to appeals from the Code Enforcement Board. Mr. Andrews comment- ed that if the Building Department erred on a health or safety issue it would be up to the property owner to make it right and he felt they should be consistent. Mr. Weatherspoon stated it has been clearly identified that the sign was in violation of the setback prior to the current location; therefore, it was issued in error. He also believed the Commission, as the ultimate authority, should be willing to accept the cases when they are presented. Mr. Weatherspoon moved to approve the waiver request, seconded by Ms. McCarty. The City Attorney advised that if it is the Commission's inclination to approve the request, he wished to point out that the sign code requires all non-conforming signs to come into compliance in June 1991. He construes the motion to be forever. Ms. Brainerd made a substitute motion that they approve the waiver with the stipulation that it too must come into conformity in 1991, seconded by Mr. Weatherspoon. Upon roll call the Commission voted as follows: Mr. Andrews - No; Ms. Brainerd - Yes; Ms. McCarty - Yes; Mr. -5- 12/27/89 Weatherspoon - No; Mayor Campbell - Yes. Said motion passed with a 3 to 2 vote. Before roll call the following discussion was had: Mr. Weatherspoon stated that unfortunately the applicant has no footage to move the sign; if so, he would have done it by now and that is the problem. The City Attorney added the motion could come to pass; however, the sign would have to go. At this point the roll was called to the motion. 5. Request for Waiver of Performance Bond Requirements for A. L. Roarke, Inc. Ms. Brainerd moved for approval of the waiver, seconded by Ms. McCarty. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Ms. McCarty - Yes; Mr. Weatherspoon - Yes; Mayor Campbell - Yes. Said motion passed with a 5 to 0 vote. 6. Proposed Agreement Between the City and Ackerly Communications and Approved Agreement Between the City and Eagle Outdoor Advertising Regarding the Movement of a Billboard. Mayor Campbell reported he had a call from the attorney on this item and that it was no longer really appropriate. The City Attorney stated it was his understanding that (1) the agreement with Eagle Outdoor is now going to fail for lack of a condi- tion precedent, that is, they are not going to be the lessee; (2) that Ackerly Communications' attorney talked with him and said they have no interest in pursuing an agreement of this nature or the one which they submitted with the letter from Chapin and Armstrong; and (3) the agree- ment with Eagle was a double jointly and severally agreement with Park Ten Business Park property owners. Unless he is directed otherwise he would presume that the Commission also has no interest in endeavoring to enforce the previous agreement as against the property owner. He believed there would be little likelihood of success but the option is still there. Ms. McCarty left the Chambers at this time. 7. Ratification of South Central Regional Wastewater Treatment and Disposal Board amended 1989-90 Operating Budget in the amount of $3,249,480. Ms. Brainerd moved for the approval, seconded by Mr. Weather- spoon. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Mr. Weatherspoon - Yes; Mayor Campbell - Yes. Said motion passed with a 4 to 0 vote. 8. Ratification of South Central Regional Wastewater Treatment and Disposal Board amended Operatinq Budget which increased the user Charqe to .7055 cents per thousand gallons for sewage, .5975 cents for Opera- tion and Maintenance, .031 cents for Purchase of Ocean Outfall and .095 cents for Sinking Fund. Ms. Brainerd moved for approval, seconded by Mr. Andrews. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Mr. Weatherspoon - Yes; Mayor Campbell - Yes. Said motion passed with a 4 to 0 vote. 9. Authorization to Submit an Application to the Florida Depart- ment of Environmental Regulations to participate in their Revolving Loan Program. Ms. Brainerd moved for approval of authorization, seconded by Mr. Andrews. Upon roll call the Commission voted as follows: Mr. Andrews - Yes; Ms. Brainerd - Yes; Mr. Weatherspoon - Yes; Mayor Camp- bell - Yes. Said motion passed with a 4 to 0 vote. -6- 12/27/89 11. Determination of Hours Within Which the Noise Ordinance May be Waived. The Interim City Manager reported the Noise Ordinance grants specific authority to his office to grant waivers in cases of special events, outside activities, etc. This is a specific request concerning New Year's Eve at Atlantic Plaza and runs from 7:00 P.M. to 2:00 A.M. Direction is requested. It was the consensus of the Commission to grant the time of 12:30 A.M. Mayor Campbell declared the meeting adjourned at 7:00 P.M. ~ity~ Clerk ATTE S T: 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 December 27, 1989, which minutes were formal- ly approved and adopted by the City Commission on ~Lu~ ~Ojlqg~ · 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. -7- 12/27/89