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HomeMy WebLinkAboutMinutes Council 062790CITY COUNCIL SPECIAL REGULAR MEETING ® CITY OF PALM BEACH GARDENS JUNE 27, 1990 The Special Regular Meeting of the City Council of the City of Palm Beach Gardens, Florida, was called to order by Mayor Martino at 7:30 P.M., in the Assembly Room of the Municipal Complex, 10500 North Military Trail, Palm Beach Gardens, Florida; and opened with the Pledge of Allegiance to the Flag. ROLL CALL The City Clerk called the roll, and present were Mayor Martino, Vice Mayor Aldred, Councilwoman Monroe, Councilman Kiselewski and Councilman Russo. PUBLIC GOLF COURSE Attorney Brant stated, based on the contract, all items are completed from a legal aspect and ready to move forward. The City Manager stated he would like clarifications on the changing of speed limits on the roadways and who will pay for the additional costs for the de- acceleration lane. In response to the City Manager, Richard Orman, Public Golf Corporation, stated tr,e additional $7,500 cost is the responsibility of Public Golf Corporation and has been included in the budget. Attorney David Norris, pointed out there is a contingency fund for such items. The City Manager questioned the other off -site improvements in the Official Statement, stating the bond monies can only be used for on -site Improvements. In response to the City Manager, Attorney Norris stated that will be clarified and language will be added to the effect that they are not only required to construct the golf course and the facilities related thereto, A CITY COUNCIL SPECIAL REGULAR MEETING, 6/27/90 PAGE TWC but -,he assuciated aft -site improvements required in the Official Statement. The City Manager stated all permits and letters have been received, the signed contract and the final letter needed was received this afternoon. The City Manager stated the breakeven point for the golf course is at least 100 round per day, 365 days per year, at $31.00 per round, which does include a cart. In response to Councilman Russo, the City Manager stated that it is possible to play 300 to 400 rounds per day. Councilwoman Monroe was concerned that a cart would be required for all players, however, the City Manager stated that would be determined later. Councilman Russo requested further clarification on the $7,500 cost for the de- acceleration lane and if there was an agreement to this effect. Richard Orman stated that had been included in the budget, however, the County required further construction for a future 6 -lane road. Attorney Brant stated that whatever is required to meet the plans and spe- cifications would be paid by Public Golf Corporation, not the City. In response to Councilman Russo, the City Manager stated the City required a breakdown of every items in the contract, and asked for a total sum contract, ($3,612,863 for the contruction) and the City doesn't care how they spend it, as long as we get the product. The City Manager stated the total cost including equipment, golf cart building, architect, fencing, clubhouse and all buildings was $4,207,863. The City Manager stated that if the cost came in up to 10% over that amount, the City will pay for it and if the overrun is over 10 %, Public Golf Corporation will pay. CITY COUNCIL SPECIAL REGULAR MEETING 6/27/90 PAGE THREE In ruaponse to Counciin +an Russo, Attorney Norris stated they tried to get a completed project bond, but was unable to, so therefore the profit will stay In escrow until completion of project. In response to Councilman Russo, Attorney Brant stated we have a Contractor's Performance Bond in the amount of $4,900,000. In response to Councilman Russo, the City Manager stated the classifica- tion of the insurance company which wrote the bond is A +. In response to Councilman Kiselewski, the City Manager stated the $31.00 per round was referred to in the feasibility study. In response to Councilman Kiselewski, the City Manager stated the City would pledge the half -cent sales tax up to the cost of the debt service. The debt service for the first year is captitalized interest se there will be no impact on this year's budget. Next year, it will depend on the revenue source and the completion of the golf tour ,,e. The City Manager stated the City could be impacted up to the full extent of the debt ser- vice, which would be approximately $500,000 +. Mark Raymond of Moyle, Flanigan, Katz, FitzGerald & Sheehan, epresenting the City of Palm Beach Gardens as Bond Counsel, addressed the City Council stating in May 1990 the City Council adopted Resolution 75, 1990, the bond resolution. Attorney Paymond stated Resolution 86, '990 amends and resta- tes Resolution 75, 1990, in its entirety. Attorney Raymond stated Resolution 86, 1990, on page 15, Section 202, authorizes an issue of bonds not to exceed $0,115,000; Article 3, page seven, states the Issurer may redeem these bonds under redemption provisions to be determined at a later date. Attorney Raymond stated these redemption provisions are determined in a resolution to be considered later this evening. Page 30, Article 4, CITY COUNCIL SPECIAL REGULAR MEETING, 6/27190 0 PAGE FOUR the security of the bonds is discussed, the flow of funds, and how the bonds will be paid; page 39, Section 406, sales tax proceeds are discussed. Each month the City receives a portion of the half -cent sales tax and that money will 1;:,,iediately be deposited into a fund. As long as it is in that fund it is subject to a lien in favor of the bondholders and is only to be used to the extent that the revenues from the golf course are insufficient in any month to meet the monthly financial obligations. If at the end of the month the issurer has made it through the month and is current, the sales tax proceeds can be used by the City. The City Manager stated that even though the money can be used at the end of the month the City must budget for the entire year. However, to be able to use those monies, we must amend the budget each time. ® Attorney Raymond stated on page 43, the ability of the City to issue addi- tional debt secured by golf course revenues and by sales tax proceeds are discussed and provided that the City can meet certain tests which indicate the City is paying these bonds am there is enough to pay the proposed bonds. The City may go ahead and issue the proposed bonds for any legal purpose. Attorney Raymond stated on Page 47, Section 507 provides a requirement that the City set the rates at the golf course sufficient to satisfy the debt service requirement on the bonds. There is a provision that has been added at Mr. Orr's request that indicates that if the City does choose to budget sales tax proceeds to pay the debt service on the bond; then the rates charged at the golf course can he lowered to that extent. Attorney Raymond stated that in Article 5 there are various cove- nants where the City promises not to sell or mortgage the facility in any way that would impede it's ability to pay the bonds, and to carry CITY COUNCIL SPECIAL REGULAR MEETING, 6/27/90 PAGE FIVE Insurance on the project: Section 515, page 51, contains a covenant that the City will not do anything that would adversely affect the tax status of the bonds. Article 6, page 55, discusses what could happen if there is ever a default in the payment of the bonds. Article 7, page 61, discusses the City's ability to amend the resolution without bondholder consent and when br ^dholder consent is required. Article 8, contains miscellaneous provisions. Page 67, Section 804, states that nothing in this resolution will be a liability of any member of the Council, any employee or agent of the City, and this is not a general obligation of the City, but payable solely from golf course revenues and sales tax proceeds. In response to Councilman Kiselewski, the City Manager stated there is no mention in any of the documents of the management aspect. In response to Councilman Russo, the City Manager stated he has had the contract reviewed by two or three different people and everything seems to be in line. In response to Councilman Kiselewski, the City Manager stated the contrac- tor who has the bond with the developer, if he does not complete the ro- ject within a period of time, there is a penalty clause, and he is assuming the contractor has enough money to honor the penalty clause. The City Manager stated the penalty clause will go to the developer, thrn by a separate agreement the penalty would come to the City, so the City indirectly will get any monies if the developer does not complete the pro- ject on time. The City Manager stated he has a good faith check from Joe Wise, Hough & Co., in the amount of $82,500.00. CITY COUNCIL SPECIAL REGULAR MEETING, 6/27/90 PAGE SIX Mayor MarCinu stated the Official Statement will be amended to include the changes discussed by Mr. Raymond, and that monies for the de- acceleration lane will be taken from the Public Golf Corporations' area of respon- sibility. RESOLUTION 86, 1990 The City Clerk read, by title only, Resolution 86, 1990, authorizing the issuance of special obligation revenue bands, Series 1990, for $8,000,000.00. Vice Mayor Aldred made a motion to adopt Resolution 86, 1990; seconded by Councilman Kiselewski. Councilman Russo stated he will not be voting for either Resolution 86, 1990, or Resolution 91, 1990, for reasons previously stated. Councilman Russo stated this will be the last evening he will be voting against anything on this golf course because he feels that when the golf course is completed it will be an asset of the City. Per a vote of 4 ayes and 1 nay vote, Resolution 86, 1990 was adopted. The nay vote was cast by Councilman Russo. RESOLUTION 91, 1990 Attorne, ,rant stated Resolution 91, 1990 enters into a contract with William R. Hough 8 Co. as the purchaser of the bonds. Joe Wise, Vice President of William R. Hough 6 Co., addressed the City Council, discussing the bond purchase agreement. Mr. Wise stated the agreement is for $8,115,000.00 par value and on page 2, tap paragraph, the agreement states they will pay the City in federal funds on July 2, 1990, a total of $7,901,284.20, which includes the underwriters discount of $162,300.00 and the original issue discount of $51,415.80. Mr. Wise stated the original issue discount is the discount when some of the bonds are offered at a price less than 100. Mr. Wise stated the good faith check is mentioned on page 3 in the amount of $81,500.00. Page 8, refers to the closing at the offices of Moyle, Flanigan, et al, on July 3rd, at CITY COUNCIL SPECIAL REGULAR MEETING, 0127190 0 PAGE SEVEN whicia time Lite money wire will be funded and transferred to the Fire Union Bank in the name of City of Palm Beach Gardens. The construc.-ion funds and the debt service fund will be immediately invested as of that date and will proceed tc earn interest at the rate of about $54,000.00 a year which will reduce the maximum gross debt from about $740,000 tc about $590,000. The draw schedule has already been established. The disclosure statements located on the last 3 pages contains the breakdown of the underwriting spread, the components of same and what the estimated er en- e: are from the underwriting spread. v- Wise stated on June 13th, he sent a letter to the City with sev(• .:1 schedules of various bond issues and a copy of the analysis of the insurers and breakdown of the City's estimated costs, etc. Mr. W1 e ® stated he has updated the letter for the proposal. Mr. Wise state, the bonds are callable starting in the 9th year. Attorney Raymond stated Resolution 91, 1990 incorporates all the fina.cial provisions which Mr. Wise spoke of and also appoints First Union National hank of Florida as the paying agent and registar of the bonds. This means they will mail the checks to all the bondholders and if the bondhold #r wants to transfer a bond, they must go through First Union. It approves the Official Statement, d,.ignates these bonds as qualified tax - exempt. bonds. This means the City will not issue more than $10 million in bonds in this year, and authorizes the Mayor and City Manager to purchase bond insurance on these bonds. Per a consensus of the City Council, the City Clerk read, t:v title only, Resolution 91, 1990, authorizing the issuance of the City', X8,115,000.00 ® aggregate principal amount of Special Obligation Revenue Bonds, Series CITY COUNCIL SPECIAL REGULAR MEETING, 5/27/90 a PAGE EIGHT 1950; setting forth interest rates, maturity schedule and payment provi- sions for such bonds; awarding the sale of the bonds to William F. Hough 8 Co. and making certain findings in connection therewith; appointing First Union National Bank of Florida, as paying agent and registar for the bonds; approving the form and use of a preliminary Official Statement and authorizing the execution and delivery of a final Official Statement supplementing certain provisions of the bond resolution of the City adopted June 27, 1990; authorizing and directing certain officials of the City to take all action required in connection with the issuance of the bonds; making certain other covenants and agreements in connection with the issuance of the bonds and providing an effective date. Vice Mayor Aldred made a motion to adopt Resolution 91, 1990; seconded by Councilman is Kiselewski. The City Manager stated the profit portion of $275,000 will be put in a special account which will be paid out at the end of the pro- ject if all work is correct, with no interest being paid on the $275,000. Per a vote of d ayes and 1 nay, Resolution 91, 1990 was adopted. The nay vote was cast by Councilman Russo. ITEMS FOR DISCUSSION LAND DEVELOPMENT REGULATIONS Per a consensus of the City Council, there will be a Special Meeting on 7112/90 at 7:30 P.M. to discuss land development regulations. ADJOURNMENT There being no further business to discuss, the meeting was adjourned at 8:40 P.M. Ll