11-17-67SpMtg 20 -
NOVEMBER 17, 1967.
A special meeting of the City Council of the City of Delray
Beach, Florida, was held in the Council chambers at 2:00 P.M., Friday,
November 17, 1967, with Mayor Al. C. Avery in the Chair, City Manager
David M. Gatchel, City Attorney John Ross Adams, and councilmen J.
LeRoy Croft, James H. Jurney, LeRoy W. Merritt and George TalbOt, Jr.,
being present.
An opening prayer was deliver'ed: by City Clerk R. D. Worthing,
and the- Pledge of Allegiance to the Flag of the United States of ~x
America was given.
City Manager Gatchel said the principal purpose of this meeting
is to consider the purchase o~ the water system and all accessories
relating thereto, located in Tropic Palms Subdivision, from the Delray
Beach Utilities, INC., in accordance with the terms of the Water Agree-
ment , dated June 1, 1959, and that negotiations concerning same have
been in accordance with C(~uncil instructions given last month.
The City Manager introduced Mr. Eugene K. Wheelock of Birmingham,
Michigan, President, and Mr. Robert Gas.tmeyer of WeSt Palm Beach, Vice-
President, of Delray Beach Utilities, In¢~
He then presented the following CLOSING STATEMENT to the Council
and said he believes both the seller and the buyer are agreed upon the
amounts shown, as a result of a meeting held this morning with Mr.
Wheelock and Mri Gastmeyer:
Purchase of Property of Delra¥ Beach Utilities, Inc. ~'in Tropic Palms b~ Cit~ of Delra¥ Beach
Purchase Price $ 36.150.00
Return of Refundable Deposit on Hand j,,i~0Q0.00
$370150.00
Less: ApPlicable Credits
Neptune Meter Inv. 08-92660 of 5-6-60 1,248.36
Palm Beach County Taxes., 1966 and 67 !,939.39
Water Account. Owing City of D.B.
Billing of 10-27-67 $ 253~50"
'' Billing of 11'17-67 .J 26~9! .... 280.41 .
TOtal Credits .3t468.16
Total'Due 'Delray Beach Utilities, Inc. ~$3~681~84
Co~cer~ng the legality of this transaction, City Attorney Adams
explained to Council as follows: "In co~n~ctiom, with this, and be-
fore issuing a check in the amount that we would ask you to authorize,
we will.get from Mr'. wheelock a personal ~uaran.ty and Indemnity Agree-
ment which will indemnify us from any losses by any. minority stock-
holders or any other person. We are getting a Bill of Sale conveying
all interest in that Water Agreement dated June 1, 1959. We will get
a Resolution of the Corporation that they have met and have good title
to the items.they are.conveying.. In addition to that, I have been in
touch with Mr. Mellon's Attorney and have been assured that I will get
from him a personal release, from his wife a personal release, from
Mellon Land Company a personal release and also a convenant not to sue.
I believe there is no doubt that we are getting what we pay for.
There is one Item that I will mention, we presume you will ap-
prove the Closing Statement. I have an Escrow Agreement that I would
like for you to authorize the Mayor to execute on t~s $1,939.39 ~o~al
property taxes. I don't b~!ie~e',it is fair to say that Mr.. Maxwell
was wrong, I just don't think he had the necessary information to
legally assess this. After we show him our information, I think he will
cancel it out."
City AttorneyAdams continued: "I think one motion, to authorize
the purchase of the Water System in Tropic Palms from Del. ray Beach
-1- Sp. 11-17-67
;-202
Utilities, Inc., for a total purchase price of $36,150.00 would be the
first motion." It was so moved b~ Mr. Talbot, e~conded by Mr. Jurney
and unanimously carried.
Mayor Avery asked the City Attorney to phrase the next motion,
and the City Attorney did so as follows: "To authorize the execution
of an Escrow Agreement with Delray Beach Utilities, Inc., relating to
the $1,939.39 which would be held in escrow pending the eventual deter-
mination of legality of the assessment." It was so moved by Mr. Talbot,
seconded by Mr. Merritt and unanimously carried.
City Attorney Adams continued: "We need a motion, Sir, that the
money to purchase this come from the Contingency Account; of the Water
and Sewer Fund." It was so moved by Mr. Talbot, seconded by Mr. Jurney.
and unanimously carried. (Copy of Resolution of Corporate Board, Guar-
anty and Indemnity Agreement, Bill of Sale and Escrow Agreement are
attached to the official copy of these minutes and Covenant Not to Sue.)
See pages 204-A-F.
Clerk Worthing reminded council of the Primary Election for
City
Mayor and Couhcilmen to be held Tuesday, November 21st, and said it is
mandatory that a Special Council Meeting be held within three days
after the election for the purpose of canvassing the returns of said
election.
A Special Council Meeting was scheduled for Wednesday, November
22, 1967, at 11=30 A.M. for the purpose of certifying the election
results, and for any other business that may come before the meeting.
Concerning the Beach Revetment, City Manager (~atchel reported as
follows: "I would like to Just give a verbal report to the Council and
the Press for the benefit of the citizens ofi:Delray concerning the
sea wall, the revetment wall. This is as a result of your instructions
issued to me last Monday night.
Our Engineers, Glace ~ngineering Inc., were over here, represented
by Mr. Stan Kelley, Vice-President, last Tuesday and this supplemented
our own Administrative inspection of the wall and the various depres-
sions or sinks that had developed in it as a result of the Northeasters
of last weekend. Mr. Kelley felt that there was not a great deal to be
alarmed about in this minor failure over there. The inspection itself
did not lend readily to determining the exact cause, but definitely it
appears .there is a loss of material from under the blocks. Any number
of things could have happened,, but, at any rate, it seems that about
the greatest depression, when you get down and start citing the line
of the blocks of the revetment, the greatest depression is about 18
inches. That 18 inches is made up of loss of the rock, which is the
rock itself on top of the filter material. There is 12 inches of that,
a foot of that, so it only leaves about a loss of .~l:~und 6'~ne/~es .of
sand from underneath the filter material. Mr. Kelley feels that a
limited amount of this can be expected in~ construction of this type.
There have been a few small settlements before, before this past rough
weather that we experienced, and which were readily repaired and taken
care of. Mr. Kelley pointed out that considering approximately 150,000
square feet of the filter material, which is supposed to be impervious
and water-proof, and considering the 20,000 blocks that were used in
the wall, that the 30 blocks that are sunken or misplaced at this time
only represents about 1/10 of one per cent of the total project. He
further pointed out that in the reco~mmendations given to Council in the
feasibility report prior to the construction of the wall, it was pointed
out" that the wall wii1 probably need some maintenance forever, period-
ically. Just as when you build any building, or highway, sidewalks,
sewer, water systems, or anything of the sort, all such man-made
structures do need some degree of maintenance and they do so forever.
We have a pretty accurate description of our weather conditions
which reached a heighth last weekend, and Mr. Kelley feels, that con-
sidering the weather conditions, that the wall did a very adequate
job, and reemphasized that settlements of this nature should not cause
undue concern. He further commented that he would hate to think of the
condition of the beach had the wall not been there. To coin an old
phrase, he said just because you ~ind one soft apple in the barrel
-2- Sp. 11-17-67
203
he hopes that no one would condemn the entire barrel.
These are notes which'l~r. Kelley dictated to my secretary
prior to leaving here last Tuesday.
The Contractor was called in and he arrived Thugsday morning.
This was Mr. Ted Tyson of'Dickerson, Inc., the contractors on the wall,
and here again, Mr. Tyson did not register.any undue concern or alarm
about these depressions. They have built many thousands of feet of
s~milar revetment structures up and down the coast of Florida, and
they, from time to tim~, have experienced such depressions as this.
He looked it over quite thoroughly. He felt that he could not, in the
name of Dickerson, Inc., accept the responsibility of the repair of
this wall due to a failure on the part' of Dickerson, Inc., in the
constructionwork. He did not feel that he had that prerogative, and
that decision was not' his. Mr. Tyson did leave here and was planning
to contact Mr. Walter Crowell,' the Vice-President of D~ckerson, Inc.,
who is in charge of the Florida operations, and he will be in touch as
soon as he can get in touch with Mr. Crowell. Mr. Crowell is up in
the northern section of the state and was not read£1y accessible by
telephone. Mr. Tyson even went so far as to say that he did not con-
sider this damage over there as one that needed repair work immediately.
He thOUght that we would be plenty safe in shoring up these through
the means of a hot asphalt, hot sand base asphalt, to prevent any
further leakage. That's his analysis and interpretation of the damage.
He did not consider it to be major at all. We did ask him to get a
statement for us, or determination for us, as to Dickerson's involve-
ment in this on the stand~oint of defective workmanship or materials
or anything of th~ sort. I asked him to then give uS his impression
of what it would take to get Dickerson in here to do this repair work
if it were the desire of the City Council to proceed along that line.
This he .promised to do for me. Mr. Crowe11, incidentally,, is due back
in Stuart, their home office, tomorrow, Saturday.
I think, Gentlemen, this is a complete report with the exception
that we asked Mr. Tyson for an estimated cost, in his opinion, of get-
ting this work repaired. Of course, weather conditions would affect
such a cost cons£derably, if they had good weather when they went in
there, it would be one thing. If it was bad weather, that would be
another, He felt that we could not get out for less than '$800 to
$1,000 minimum. In fact, he said around $800 would be the minimum and
he did not see, even under more adverse conditions, where the cost
should exceed $2,000 as an absolute maximum.
Gentlemen, this is my report to you. I have chosen to put it on
tape as I have been so busy I have not been able to prepare it in writ-
ten form bUt I do hope that the Press will treat this in well respect
so that we can put at ease the'minds of the Citizens of Delray."
Mayor Avery: "Mr. City Manager, do you a~d the City Engineer
concur in these opinions?"
City Manager Gatchel: "Yes, I feel sure that we do. We have
been working very closely on this matter all of this week."
City Engineer Fleming: "Although we concur, I am inclined to
think that the repairs should be undertaken immediately, and not let
them drag out like that."
Mayor Avery pointed out that with the season approaching, the
City wants this to make its best appearance.
The Mayor asked that a copy of the City Manager's report be
furnished to the newspapers not represented today, in order that the
best coverage will be made of the true facts in the interests of the
citizens.
Mr. Talbot said he thought that was an excellent report, but
wishes it could have included the thinking of what would have happened
if that sea wall had not been in~ further, from the o~dt~s around
town, and from what information he could gather in talking with them, un-
authori~a~ively, that part of Ocean Boulevard near 410 would have been
completely out, the berm would have been gone all down the line from
that point.
Mr. Talbot said there would need to be repairs on the revetment
from time to time, arg] suggested that the City Manager, subject to
-3- Sp. 11-17-67
204
approval of Council, make a survey of what mobile equil~ent the City
should have along with such specific tools, if any, to do the particu-
lar job of taking out the blocks and refilling and'replacing the
pollyfilterand gravel as he feelsthe City should have those tools
available when such damage happens. He said that he is very much
against filling those blocks with asphalt.
Mayor Avery directed the City Manager to furnish Council with the
necessary recommendations in order that the City may maintain said wall.
City Manager Gatchel reported further= "We talked about this,
~entlemen, with reference to the condition of the beach had the Wall
not been there. I don't think there is any doubt whatsoever, I don't
think there is any doubt in anyone's mind, Contractors or Engineers,
but to what we would have lost A1A, and perhaps even more, had this
revetment not been there. We talked about the City's ability to get
in and do repair work of this nature. Our own ability, rather than
have outsiders come in. I can't help but feel we can do this, but it
would require some equipment. We do not have a boom on any of our
equipment."
Mr. Merritt said he believed Mr. Mike Yargates had talked to most.
of the councilmen about the item of beautification of his parking area
in John B. Reid's Village, and displayed a blueprint of same which will
cost Mr. Yargates approximately $5,000. Further, that Mr. Yargates ia
asking.that the City place twelve of the City trees, the Adonidia Palm,
in the City right-of-way adjoining his property to the West on Venetian
Drive.
During discussion, MayOr Avery said that as far as he is concerned,
he would be willing to vote for that subject to having the Palm trees
in the City nursery, and subject to the Beautification Conunittee
proval. It was so moved by Mr. Talbot, seconded by Mr. Merritt and
unanimously carried.
City Manager Gatchel thanked all the members of his staff who
worked so diligently in the preparation of the Agreement with the
Delray Beach Utilities, Inc., and reported that they had done a very
fine job.
Mayor Avery said the Council compliments those staff members
through the City Manager.
The meeting adjourned at 2=37 P.M.
R. , D. WORTHING
City Clerk
APPROVED:
' ~'"~...¥ o ~' -
-4- Sp. 11-17-67
204-A
RESOLUTION OF CORPORATE BOARD
(Certified Copy)
I HEREBY CERTIFY.that I am the duly elected and qualified
President of DELRAY BEACH UTILITIES, INC.; that the .following is a
true and correct copy. of a resolutiOn duly adopted at a meeting of
the Board of Directors thereof held in accordance with its by-laws
on the 17~ day of .,4/Wg/~'A~f~ , 1967, and that the same is now
in full force.
COPY OF RESOLUTION
"Be It Resolved, that the President of this Corporation be
and he is hereby authorized and empowered, on behalf of and in the
name of this Corporation, to execute a Bill of Sale conveying to the
City of Delray Beach, 'the following described personal property
located in the City of Delray Beach, State of Florida:
All water mains, supply-lines and appurtenances
presently located in Tropic Palms Subdivision,
-including all right, title and interest of
Delray Beach Utilities, Inc. in that Agreement
dated June 1, 1959, between the City of Delray
Beach and South Coast Development Corporation
and Tropic Palms, Inc.,including amendments,
which Agreement was subsequently assigned to
Delray Beach Utilities, Inc.
IN WITNESS WHEREOF, I have hereunto affixed my name as
President, this /~Tt~ day of /V~/%~ , 1967.
204-B
GUARANTY AND INDEMNITY AGREEMENT
The undersigned, being the majority stockholder of DELRAY
BEACH UTILITIES, INC., in order to induce the CITY OF DELRAY BEACH
to purchase all the water systems, supply lines and appurtenances
located in Tropic Palms Subdivision, Delray Beach, Florida, including
the assignment of all right, title and interest in and to a certain
Water Agreement dated June 1, 1959, including amendments, between
the City of DelraY Beach and South Coast Development Corporation and
Tropic Palms, Inc., which Agreement was subsequently assigned to
Delray Beach Utilities, Inc., unconditionally guarantees to the
Buyer that the Corporation has the full authority to make the' conveyance
free and clear of any encumbrances or obligations except those shown
on the closing statement:which the City agrees to assume and pay
and free and clear of any Claim by Mellon Land Corporation or by
any minority stockholder of said Delray Beach Utilities, Inc.
The Guarantor also individually agrees to indemnify and
hold harmless the City of Delray Beach from any claim or litigation
against the personal property which claim or lien existed or right of
assertion arose prior to the date of the closing of the sale of said
assets. This guaranty and indemnity also specifically includes any
attorney fees and costs incurred by the City in defendant any such
claims asserted by any creditor, lien claimant, by Mellon Land Cor-
poration, or by any stockholders of Delray Beach Utilities, Inc.
The Guarantor shall have the right to defend any action on notice.
In consideration of the sum of Ten Dollars and other good
and valuable considerations, the Guarantor has individually signed
this Guaranty and Indemnity Agreement this~~y'~/~ of November,
1967.
Signed, sealed and delivered
in the presen~ of:
204-C
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, That DELRAY .BEACH UTILITIES,
INC., a corporation, party of the first part, for and in 'consideration
of the sum of TEN DOLLARS lawful money of the United States and
other considerations to it paid by the CITY OF DELRAY BEACH, Florida,
a municipal corporation, party of the second part', the receipt whereof
~. is hereby acknowledged, has granted, bargained, sold, transferred and
~ delivered, and by these presents does grant, bargain, sell, trans-
fer and deliver~unto the said party of the second part, its successors
and assigns, the following goods and chattels: ~
All water mains, supply lines and appurtenances
presently located in Tropic Palms Subdivision,
including all right, title and interest of f...
Delray Beach Utilities, Inc. in that Agreement
dated June 1, 1959, between the City of Delray
Beach and South Coast Development Corporation
and Tropic Palms, Inc., including amendments,
which Agreement was subsequently assigned to
Delray Beach Utilities, Inc.
TO HAVE AND TO HOLD the same unto the said party of the
second part, its successors and assigns forever.
And it does for itself and its successors and assigns, cove-
nant to and.with the said party of the second part, its successors
and assigns, that said party of the first part is the lawful owner
of the said goods and chattels; that they are free from all incum-
brances; that it has good right to sell the same as aforesaid, and
that it will warrant and defend the sale of the said property, 'goods
and chattels hereby made, unto the said party of the second part, its
executors and successors and assigns, against the lawful claims and
demands of all persons whomsoever.
IN WITNESS WHEREOF, said party of the first part has here-
unto set its hand and seal. this /?~day of November, 1967.
Signed, sealed and delivered DELRAY BEACH U~LI~IES,/INC./ /
~ th~ presence of: ~ y ~--~/K~/ /' /' //t~ ~e~~~den
204-D-
STATE OF FLORIDA )
)
COUNTY OF PALM BEACH ), r ~
I HEREBY CERTIFY~ithat on this day, before me, an officer
duly authorized in the State and County aforesaid to take acknowledg-
ments, personally appeared EUGENE K. WHEELOCK and R. W. GASTMEYEH; JR.
well known to me to be the President and
Vice-PPesident respectively of DELRAY BEACH UTILITIES,
INC,, the corporation in whose name the foregoing instrument was
ex~cuted, and that they severally acknowledge executing the same as
such officers of such corporation freely and voluntarily under
authority duly vested in them by said corporation.
WITNESS my hand and official seal in the County and Stat~ . .
last aforesaid this l?thd&y of November, 1967. /
' ' ' ' ida
My commission expires:
-2-
204-~.
ESCROW AGREEMENT
This Agreement, entered into this /~ day of November,
1967, by and between Delray Beach Utilities, Inc., as SELLER, and
the City of Delray Beach, Florida, as BUYER; ~
W~IEREAS, the City of Delray Beach has contracted to pur-
chase all right, title and interest in and to that certain Water
Agreement, dated June .1, 1959, from Delray Beach Utilities, Inc.,
for a total price of $36,150.00; and
WHEREAS, on the closing statement there appears an item
of $1,939.39, representing alleged Palm Beach County personal
property taxes for 1966 and 1967, assessed against the seller;
and
WHEREAS, both parties feel that this alleged assessment
is illegal in view of the fact that the buyer owns the water lines
which were the subject of the assessment. ~
NOW, THEREFORE, it is agreed as follows:
1. The buyer will hold the aforesaid sum of $1,939.39
in escrow pending a final decision by the County TaX Assessor as
to the legality of the assessment. The buyer agrees to diligently
pursue the matter with the County Tax Assessor in an attempt to
have the 1966 and 1967 assessment cancelled.
2. In the event said assessments are Cancelled, the
buyer will refund the total amount to the seller, except that the
selIer agrees that if the 'County Tax Assessor assesses the 1967
taxes on a basis of the 1966 value of $6,500.00, the buyer may
withhold the amount to pay personal property taxes in that amount
from the funds held in escrow. In the event the County Tax Asses-
sor proves that the assessment, as shown on the closing statement
in the amount of $1,939.39, is legally owed by the seller, the
buyer is authorized to release said funds from escrow to the County
Tax Assessor in full payment of said amount. Provided, however,
the buyer agrees that it will give the seller ten (10} days written
notice prior to releasing said funds.
IN WITNESS WHEREOF, the parties hereto have signed thi~
Agreement the day. and year first above written.
~ K. Wheelock, President
ATTEST:. ~ BEACH UTILITIES, INC.
Vice Pres ~en'~
Al. C. Avery, Mayor
ATTEST: CITY OF DELRAY BEACH
- City Clerk ......
204-9
COVENANT NOT TO SUE
HENRY J. MELLON, individually and as a minority stock-
holder of Delray Beach Utilities, Inc., a Florida corporation, and
HENRY J. MELLON and BEATRICE L. MELLON, as and constituting a majority
of the last Board of Directors of MELLON LAND CORPORATION,. a dissolved
Florida corporation, for and in consideration of the sum Qf Ten Dollars
and other valuable consideration, agree and covenant to forever re-
frain from instituting, procuring or in any way aiding any suit,
cause of action or claim against the City of Delr. ay ,Beach or any
of its political subdivisions, in connection with the purchase by
the City of Delray Beach from Delray Beach Utilities, Inc. of the
water lines, mains, connections, water plant and water distribution
system, in TROPIC PALMS SUBDIVISION, Plats Nos. 1, 2, 3 and 4.
Sealed, signed, and delivered ~-~ /
in presence of ~~/~~/-~/%~t/'-~T
Henry J~./Me~on, individUally and
~ ~ ~ ~ as a~n_o~ty stockholder of Del-
/ ~ ~/ '--~'r~_ _~-~-~ ~ray Beag2~ Utilities, Inc.
........
He. ellen, as Trustee
Beatrice L. Mellon as and con-
stituting a majority of the last
Board of Directors of Mellon Land
Corporation, as Trustees