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Minutes 05-28-91MINUTES OF THE SPECIAL CITY COMMISSION MEETING HELD IN COMMISSION CHAMBERS, CITY HALL, BOYNTON BEACH, FLORIDA, TUESDAY, MAY 28, 1991 AT 7:00 P. M. PRESENT Arline Weiner, Mayor Edward Harmening, Vice Mayor Jose' Aguila, Commissioner Lillian Artis, Commissioner Lynne Matson, Commissioner J. Scott Miller, City Manager Jim Cherof, City Attorney Sue Kruse, City Clerk Mayor Weiner called the meeting to order at 7:00 P.M. PUBLIC HEARING regarding the establishment of a Community Development District (CDD) for Quantum Corporate Park Mayor Weiner announced that the Petitioners would speak first and then the public. The Petitioners could respond and then the City Commission would speak. Edward Deutsch, Managing Member, Quantum Associates, P. O. Box 21703, Fort Lauderdale, FL 33335-1703, said when they purchased what is now Quantum Corporate Park, they had to spend many years before the Treasure Coast Regional Planning Council in Palm Beach County as well as the City of Boynton Beach. They were asked to do something that had never been done before and still has not been done until this date. That was to do environmental programs in the park. Quantum has set aside some 40 acres of very high priced useable land for environmental purposes (sand pine preserve and a gopher tortoise program). Quantum has also spent millions of dollars to do what Treasure Coast and the City asked them to do. Mr. Deutsch stated that they were asked to see if they could install all of the infrastructure, landscaping, lights, roads, water and sewer, The partners in Quantum had a lengthy meeting with Chase Manhattan, their prime lender, to reach an affirmative decision to do that. Mr. Deutsch elaborated about Quantum Park and said Quantum was not sorry they did that, bUt they have a problem with what it resulted in. The result was that it caused Quantum Park to be non-competitive price wise with similar pieces of property not as well located, not as beautiful, and without as many amenities. Recently, Quantum received a written offer from a company Quantum wanted to accept. It was for the acquisition of 17 and 20 acres of property with construction of approximately 300,000 square feet of building. Mr. Deutsch said Quantum 1 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 could not meet the competition's price. The company purchased property south of Boynton Beach which did not have half of what Quantum has, but the company was very price conscious. If the CDD was in effect at that time. Mr. Deutsch said they could have made that deal. The deal would have resulted in hundreds of jobs for the City during construction and permanent jobs after construction. The ad valorem tax the City would have received would have been $115,000 per year from the building. The City's homeowners would then have less tax to pay. Because of that, Mr. Deutsch stated Quantum thought they would again come before the Commission and present them with a petition to create a Community Development District (CDD). He advised that the District is a body that is done pursuant to Florida Statutes 190. It is an open public body in the Sunshine, and the City is informed of everything that is done. The District issues assessment bonds, which are pay- able over a period of years. The bonds are issued, and the owners of Quantum convey to the District some of the infra- structure. Mr. Deutsch called attention to an overlay and said the infrastructure that would be conveyed was shown in orange. The boundaries of the District were shown in gray. Mr. Deutsch explained the effect of the bond issue was that each year, when the Tax Collector of Palm Beach County sends out tax bills, an assessment bill will also be sent for the annual assessment for each particular piece of property. Should a property owner not pay the assessment bill, the Tax Collector and the Trustee, on behalf of the bond holders, have a right to lien that particular piece of property. The entire District is not affected. It is not a general obli- gation bond. Mr. Deutsch introduced Gary Moyer, 10300 N. W. llth Manor, Coral Springs, FL, who professionally manages bonding. districts (particularly CDDs). His company manages 21 of the districts that have been formed in the State. Mr. Moyer gave a history of districts and put them into a relationship with Chapter 190, F.S. In creating the Quantum Corporate Park CDD, Mr. Moyer said Chapter 190, F.S. was the topic they were talking about. He stated a lot of safeguards were provided in Chapter 190. Mr. Moyer said districts have become partners with general purpose government in providing infrastructure. During the 2 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 late '70s and the early 1980s, special purpose districts accounted for 1/2 of all the bonded indebtedness in the State of Florida for providing infrastructure. In 1985, the Advisory Council of Intergovernmental Relations was charged by the Department of Community Affairs (DCA) to look at Districts because there was concern that there were too many districts in the State. They found the State did not have enough governmental mechanisms in place for all of the infrastructures necessary for the type of growth the State was experiencing. After further commenting, Mr. Moyer said there are probably only 20 or 30 CDDs in the State. He informed Vice Mayor Harmening that CDDs are being created almost on a monthly basis, so it is hard to keep track of exactly how many CDDs there are in the State. Besides the one in Manatee County, Vice Mayor Harmening questioned how many are in*fault. There was the problem Vice Mayor Harmening mentioned, and a District called Gateway in Pinellas County, which is not yet in fault, but those two were the only ones Mr. Moyer was aware of. Vice Mayor Harmening inquired why those two Districts had problems. Mr. Moyer could only give what little knowledge he had on the two Districts. The District in Manatee County was created in the early 1980s and did not have the safe- guards of today. Vice Mayor Harmening asked what the safe- guards were. Under Chapter 189 right now, in order to sell District bonds, Mr. Moyer said you have to meet one of four thresholds. The bonds either have to be registered in the four largest categories; purchased by what is called an accredited, knowledgeable investor; accompanied by the opinion of a financial advisor; or they have to have some sort of a guarantee for municipal bond insurance. Mr. Moyer stated the Legislators wanted to make sure whoever buys the bonds understands the investment risk of buying them and undertakes due diligence on their own to determine whether the project is feasible or not. He stressed that their bonds are special assessment bonds. The assessment runs with a given piece of land. It is not district wide, where if there is a default the balance of the property would have to pick up the default. These bonds are much different in character. Mr. Moyer did not know anything about Gateway or even if there is a default there. Mr. Moyer elaborated about Chapter 190, how Districts work, and how they interface with local governments. He said Districts are required to adopt budgets much like a City or *Should be default 6/18/91 Minutes - 3 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 County. The District would have to provide its budget to the City sixty days prior to its adoption to give the City time to review it and make comments. Mr. Moyer concluded by saying he has been associated with some of the very best Districts in the State. The Districts have been responsible for some very good projects in the State that have been very successful, and they have provided a lot of tax base to the City in which they are located. Questions of Mr. Moyer by the City Commission Although they are required to show the City Commission their budget 60 days before it is due, Mayor Weiner noted there was nothing the Commission would be able to do about it. Mr. Moyer responded that the Commission would not have the approval process. The Commission would provide comments for consideration by the District. Mayor Weiner remarked that the City would be like an advisory Board to the District. At the time the project's DevelOpment of Regional Impact (DRI) comes through, Commissioner Matson said it would normally be when a project would have its application processed as a Planned Industrial Development (PID). She asked whether Mr. Moyer had managed any projects like this where it was applied for later on. Mr. Moyer answered that Chapter 190 does not actually tie the creation of a 190 District to a development order pursuant to a DRI or a PID. Some Districts have been created before the DRI application has been submitted. Sometimes they run parallel. Mr. Moyer advised the law is very clear that granting a petition to create a'CCD is not a development order. It appeared to Vice Mayor Harmening the idea was to create the CDD and then build the infrastructure, not build the infrastructure and then come in for a CDD. He inquired whether Mr. Moyer had experience with any Districts that had been created in this "cart before the horse" fashion. With- in the last year, Mr. Moyer had probably done three or four bond issues for different Districts which were not dissimilar to what they were doing for Quantum, where a good portion of the infrastructure was constructed. The District acquired those assets by purchase. Vice Mayor Harmening asked what a good portion of the infrastructure was percentage wise. Mr. Moyer answered, "Usually 50% or thereabouts." Commissioner Aguila asked whether the Commission was given a list of some of the Districts Mr. Moyer has been managing 4 *Should be CDD. See 6/18/91 Minutes. MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 that the City could follow up on. If not, he wondered if they could get such a list. Mr. Moyer answered affirma- tively. Mr. Edward Deutsch informed Vice Mayor Harmening that at least they know what the infrastructure is, and they will know what it will cost once the Engineers and the Accountants for the Engineers certify what was in the ground and what was put there. At least they will not have to worry about cost overruns. Mr. Deutsch apprised the Commission that two things remain to be done: One was in relation to the 1-95 Interchange, and the other was what they were proposing. Mr. Deutsch stated that another substantial improvement (a berm and landscape buffer wherever it is adjacent to other properties) was being proposed with this District. He told of a situation that arose with the residents of Skylake over a landscape buffer. Mr. Deutsch said the buffer would be between Quantum's property and Dos Lagos. He estimated the buffer would cost approximately $650,000. Steve Deutsch spoke with the Department of Community Affairs (DcA'~''' and was assured the Gateway District had a problem at one time, but is now back up and running. Ellen Gibbs, Esq., 401 East Tropical Way, Plantation, FL, has been in public service for 22 years and a City Attorney for various municipalities. She is now the Attorney for the North Broward Hospital District and Chairman of the Indian Trades Community Development District, west of Fort Lauderdale. The District is providing the infrastructure for the western community. It is residential, but they also have some industrial, commercial and business areas within that District. Attorney Gibbs gave the history of the District and said they were the first District to be approved by the State of Florida. The District was originally organized to put in the drainage district and the roads. They are now approaching the structure of a water and sewer facility to provide water and sewer services to that District. The District is extremely successful and has worked with Broward County and the State. Attorney Gibbs was proud that at this point, the District will be turning over to the residents of that area a community which has developed to a point where it is viable and the financing is in place. Mr. Edward Deutsch noted questions had been raised as to the potential liability of the City on the bonds, should the bonds be issued. Paul Lester, Esq., Bond Counsel, 2601 South MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Bayshore Drive, Miami, FL told the Commission the City would have no liability, and he said that unconditionally. Attorney Lester referred to comments made by Mayor Weiner with respect to the budget, and he emphasized this would not be a shadow government. There are regulations by the DCA. With respect to this District, Attorney Lester had reviewed the continuity requirement, the potential 1-95 cost incre- ment, and was prepared to opine that all of those things should be legally permissible. Some questions were raised by the City Staff with respect to how the existing protective covenants and the City's Ordinances concerning maintenance of certain facilities might be affected. Attorney Lester advised that protective covenants run with the land. The District would take the land, subject to those covenants. With respect to the City Ordinances, it seemed to Attorney Lester that a burden would be lifted from the City because the District would take over certain of those responsibilities in addition to raising the tax base and making assessments. He reiterated that the City itself would not have liability or responsibility. Vice Mayor Harmening agreed with Attorney Lester that the City would not have to pick up the tab in case of a default. He had correspondence dated May 23, 1991 from Municipal Bond Investors Assurance Corporation (MBIA), Armonk, NY, which said, ". . . Default by a special assessment district, which comprises a minor portion of the overlapping political entity, would not necessarily detract from the insurability of the overlapping city, county or school district if the reasons for the default were specific to the special assess- ment district and all other credit points remained favor- able." Vice Mayor Harmening remarked there were too many ifs, and there was not a clear answer to the Commission's question. He was speaking in terms of the City's image. Attorney Lester questioned whether the letter was in reference to an independent District or a CDD District, which are two wholly separate things. He was informed it was a 190. It seemed to Attorney Lester the answer to Vice Mayor Harmening's query was that any bonds issued by the Distr~ct would be District bonds. He referred to Okeechobee County's Industrial Development Authority issuance of bonds and said he believed default in those bonds would not affect the credit rating of the larger municipalities under any circumstance. Attorney Lester felt the question was one an underwriter should answer. 6 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Vice Mayor Harmening noticed the Internal Revenue Service (IRS) has continued to take a dim view of government paper. He asked whether CDD bonds of this nature received approval by the IRS. Attorney Lester replied that Districts are required to make annual filings. He was not aware of any problems. Attorney Lester added that Florida has one of the best statutory frameworks. Carrie Parker, Assistant City Manager, spoke with Moody's, and they indicated that since the bonds were within the City, they would raise a question. However, once it was understood that it was an independent District, Ms. Parker said Moody's understood it would basically have no affect on the credit of the City. Vice Mayor Harmening spoke with Grady Swann, Finance Director, a few minutes ago, and it did not seem that his concerns had been set aside. Rick Ashburn, Investment Banker, 4844 Willow Crest Avenue, North Hollywood, California, worked for an underwriting firm in California over the last seven years. He is now President of a financial advisory firm in California and New York. About 95% of his practice was underwriting land secured special district bonds identical to Chapter 190 bonds. In the last five years, he underwrote over 50 issues totaling over 500 million dollars. His company underwrote over 250 issues, totaling nearly two billion dollars, and none of those are in default. One issue is in technical default because they invested their money with Executive Life Insurance. That was against his company's recommendations. Mr. Ashburn referred to Vice Mayor Harmening's question about putting the cart before the horse. He stated that acquisition districts by the investment community is viewed as a significant plus in favor of a given credit in that the facilities are in the ground and you know what they look like. The investor can visit the District, can get their hands on it, view financials, and have 100% of the informa- tion before they invest in the District. The more conserva- tive cities and counties he has worked with adopt a policy where they require that the facilities be put in place prior to the District being formed and financed. The more liberal and aggressive communities finance them before they are put in. Mr. Ashburn thought what Quantum had was a significant advantage. Mr. Ashburn referred to a program presented by 60 Minutes and said there is a very important distinction between Florida law and Colorado law. The Colorado law is no longer MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 in existence. Florida does not have the payment of bonds based on an ad valorem or percentage tax rate. Mr. Ashburn explained what happened in Colorado and assured the Commis- sion it would not happen here. He stated that the invest- ment community will not buy those kinds of bonds. The strict assessment is better for the property owner, the CDD, South Florida, and the investor. That is what exists in Chapter 190. Mr. Ashburn noted a question was raised about the annual budget of the CDD. He advised that the Statute does not provide a terrific amount of guidance on that. The bond indenture will contain covenants about the budgetary activities of the CDD. They will be acquired to adhere to Code, announce their budget, adopt it by a certain date each year, and send copies to the Bond Trustee. Mr. Ashburn thought the question of financial responsibility was answered. He was familiar with the MBIA letter. Mr. Ashburn's partner worked for MBIA until 30 days ago, and he was the Senior Analyst for South Florida and had insured these kinds of bond issues. It was true this issue would not likely be insured, but Mr. Ashburn said they will pursue a credit rating. If the credit rating does not come through- for them, they expect the bonds will be sold strictly to credit investors. The bonds will be sold in large denomin- ations to large institutions such as insurance companies and investment companies. Mr. Ashburn said the bond will be structured as a fully amortized bond issue maturing in 20 years with principal once a year and interest twice a year. There will be a reserve fund funded to the maximum amount permitted under the Federal tax Code of 10% of the bond proceeds that will be held by the Bank Trustee. Vice Mayor Harmening asked whether any part of that would be a renewal or replacement. If it is ever dipped into, Mr. Ashburn said it would be replenished either by a property owner when he becomes current on his tax bill or assessment or if there is a tax sale. Vice Mayor Harmening questioned whether the fund would have to stay current within a certain period of time, or if they would have to increase the assessment. If pro- perty owner A defaults, Mr. Ashburn said property owner B's assessment will not be raised to make it up. The default will stay there. If property owner A is 10% of the District, there would be enough in the reserve fund to cover his delinquencies for ten years. It only takes two years to get tax sales, so it is a good protection. 8 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Mr. Ashburn repeated prior statements. He noted a question was asked what the perceived liability of the City would be, beyond any legal or contingent liability there might be. Mr. Ashburn advised that the investment community is rather sophisticated. Folks know the difference between a City debt and something that is not. The prospectus will say very clearly, unequivocally, that there is no contingent liability of the State of Florida, Palm Beach County, of the City of Boynton Beach. Commissioner Matson wondered who the purchasers will be. Mr. Ashburn knew of two or three institutions. One is a major household name casualty insurance company based in Chicago. This company generally insists on an all or nothing purchase. Another investment fund generally likes to buy all bonds maturing after 10 years. Another invest- ment company in Boston likes to buy bonds inside of 10 years. Mr. Ashburn guessed there would be fewer than 1/2 a dozen bond holders on the project. They may go with a book entry to make it easier to administer. Commissioner Aguila asked what the book entry would be. Mr. Ashburn answered that a company called DTC, based in New York, is mutually owned by the securities and trust companies where, rather than issue dozens of different bonds to various investors, one bond is issued and handed to DTC. DTC has a book entry system identical to the way the U. S. Treasury manages its bond holders. If they ever need to reach bond holders quickly with information, they can, and they also get their checks faster. No retail distribution should be anticipated right now. Mr. Ashburn mentioned strength and weaknesses of this issue as a .credit. He referred to speculation, such as the 1-95 Interchange may not be built; Quantum Park is not off the ground yet; there is a weak property owner; but it was approved anyway. Mr. Ashburn said that would be a strike against the City. Beyond that, it would be difficult to imagine any other scenario whereby an issue like this could hurt the City. The strengths of the project are its loca- tion and it is a completed park. It has very strong property owners, and Deutch Ireland has a strong reputation in South Florida. Another advantage is there is a Trustee of a major money center bank standing behind the bonds. Every year the assessment installments go onto the property tax bill and are due and payable. If a property owner does not pay that and it goes to tax sale, 99 times out of 100, the commercial bank makes the payment for them to avoid a 9 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 tax sale. A lot of times that is the difference between getting the bonds sold and not getting them sold. Mr. Ashburn thought the strongest plus in the credit column was the South Florida economy. South Florida and Southern California dominate the list for the strongest and fastest growing communities. The project needs growth to sell property and bring jobs into the community. The only weak- ness Mr. Ashburn could come up with was one property owner versus many property owners, but he felt it was mitigated by the strength of this property owner. Mr. Edward Deutsch informed the Commission their lender is Chase Manhattan Bank. The City received a letter from Chase Manhattan, who has been informed of Quantum's efforts. Chase Manhattan recognizes its role, should there be a default by a particular owner. Mr. Deutsch noted questions were raised about the out par- cels, and he apprised the Commission that those property owners paid the purchase price based upon Quantum's then existing purchase price. If Quantum can go forward with the CDD and drop the purchase price, which they hope to do, the property owners will be paying a yearly assessment and will be hit double because they will be paying twice for the improvements. That was why those property owners were excluded from the District. The out parcels were reflected on a chart. Questions of City Attorney Cherof by City Commission Vice Mayor Harmening was informed that according to Chapter 166, Florida Statutes, the definition of compactness means a concentration of a piece of property in a single area. It precludes any action which would create enclaves, pockets, or fingers. Commissioner Matson wondered who protects the pockets and how they fit in. She asked what kind of cri- teria the City uses to define sufficiently contiguous. City Attorney Cherof replied that one finding they need to make is that the property is compact and contiguous. That is one of the six criteria set forth in Chapter 190. Chapter 190 does not define either of those terms. Chapter 189 defines contiguous. The only other definition in the Statutes of compactness is in Chapter 166. City Attorney Cherof believed Attorney Lester expressed an opinion with respect to this meeting the criteria of the Statute on compactness. 10 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Answering Commissioner Matson's question, Mr. Edward Deutsch said the out parcels are still part of the Property Owners' Association (POA), and they pay a specific sum. He agreed with Vice Mayor Harmening that they are not a part of the CDD. Mr. Deutsch clarified that the POA would enter into a contract with the CDD to make sure their property is covered for no additional charges. The thrust of Vice Mayor Harmening's question was whether this would meet the test of Chapters 189 and 166's defini- tions of compactness. He was not certain it did. Attorney Lester read the criteria from Chapter 190, F.S. as follows: ". .. whether the area of land within the proposed District is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community." He thought all of the clauses within the sentence should be read to the last phrase within the last phrase, and he said" . . . to be developable as one functional interrelated community" was the question Attorney Lester answered. Vice Mayor Harmening stated he would go back and study this. He thought the text in Chapters 189 and 166 was nice, constructive and evidentiary, but it was not what he would look to in determining what his opinion on the matter would be. Dr. Henry Fishkind, Fishkind & Associates, Inc., 12424 Research Parkway, Suite 275, Orlando, FL 32826, has been involved in many Districts throughout the State of Florida and is the Economist helping Quantum to construct the CDD. Dr. Fishkind said his firm serves as Financial Advisors to 12 CDDs in the State. To date, they have successfully financed 70 million dollars of CDD bonds. All of their issues are current. None are in default. They are also Financial Advisors to a number of cities and counties. Dr. Fishkind stated they plan to use special assessment bonds on this District. Mr. Ashburn, Mr. Moyer, and he felt strongly that was the appropriate way to finance these kinds of development districts. Special assessment bonds have a couple of properties which Dr. Fishkind thought were very important. One is that each piece of property within the District is responsible for its own piece of the debt. That is important because it provides protection for those who buy the land and makes for a clear relationship between the benefits provided and the costs allocated to the land. The special assessment procedure is very particular in that regard (that the costs must be only in relationship to the benefits provided by the infrastructure. Dr. Fishkind said there is a significant disclosure required under Chapter 190, Florida Statutes, to that end. 11 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Dr. Fishkind reminded the Commission that the bonds will be issued as special assessment bonds pursuant to Chapter 190, and they are governed by Chapter 170. That was the method he expected to proceed under. The current construction and acquisition costs are estimated at approximately 32 million dollars today. Dr. Fishkind said that was the best estimate they had from the Engineers. After elaborating, he advised that will require a bond issue of approximately 41.6 million dollars. Dr. Fishkind again referred to Chapter 170, F.S., and said they expect to use 20 year bonds. They will have two years of capitalized interest and one year of debt ser- vice reserve, which is the maximum allowed under the Tax Code. Dr. Fishkind structured all of the bonds they ser- vice by using those exact parameters. The bonds, with the underwriting discount, explains the difference between the 32 million dollars in construction acquisition money and the approximately 41.6 million dollars on the bond side. Dr. Fishkind said the bonds will be repaid by special assessments, which are non-ad valorem taxes collected under Chapter 197, F.S. That is also important because it provides the collection strength of the State of Florida, so the District does not collect the taxes. The collection process, being very strong, allows the bonds to be marketable. The liens run with the land, so there are no general obligation bonds and no Colorado situation. Dr. Fishkind felt this was a good structure because (1) it protects the buyers of the property, and (2) the bonds are very marketable. Dr. Fishkind thought it was useful to examine what happens during recessions. We are in a recession right now, and he asked what happens if sales are very slow. If Quantum ends up with such another period over the life of the 20 year bonds which, in his opinion, is a certainty, Dr. Fishkind said the result will be that the developer will hold the land for a longer period of time, subjecting himself and his property to a taxing district. The risk does not affect someone who will buy a parcel of land. The person who is at risk is the developer, who is the person who should be at risk. Dr. Fishkind informed the Commission that the bonds will be structured with a lot of denominations. A denomination of $100,000 is typical for these kinds of bond transactions. Dr. Fishkind stated the reputations of those presenting the project depend on this. He felt very strongly it was impor- tant that those who invest understand the risks involved, so they are careful in that regard and in regard to disclosure. 12 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Dr. Fishkind apprised the Commission that he had a number of similar districts, such as Tampa's Business Park, and others which he named. Dr. Fishkind stated it is not unusual to have a district when the infrastructure is already in place. Dr. Fishkind noted questions were asked about the potential impact on the City of a default by a 190 District in terms of the City's reputation for bond rating. He said they represent clients in bond rating presentations. Dr. Fishkind listened carefully to the pertinent parts of the letter from MBIA. He thought the letter was raising the risk that if the economy of South Florida were to go into deep recession and be affected so that this development was unable to carry the tax burden, it would not be a problem just for the District. It would be a problem for the whole area, which would affect everybody's bond rates. That did not reflect on whether this District would affect the City's bond rates. Dr. Fishkind thought that was a very different question. Dr. Fishkind stated the City is not at risk in terms of its bond ratings and insurability of City issues. Vice Mayor Harmening interjected that the City might have to pay a higher fee for insurability. Dr. Fishkind did not believe that would be the case. The issue being raised was the liability of the whole region's economy, not the effect of a rating or impact of default. In the case of the District in Manatee County, the bond ratings of the City and County were not affected, nor were the insurance rates. Dr. Fishkind told Vice Mayor Harmening there is a strong market for the bonds among sophisticated investors, so he did not believe the marketability of the bonds would be a major issue. He also informed Vice Mayor Harmening that the renewal and replacement are typically handled by the main- tenance tax by the Property Owners Association. It would be handled here with the special assessment bonds being for the capital improvements issues. Mr. Edward Deutsch stated they commissioned Goodkin Research Corporation, Goodkin Building, 275 Commercial Boulevard, Lauderdale-by-the-Sea, FL 33308, to report what the effect will be should this District be approved and the bond issued. Goodkin did a study that showed the growth pattern and what the financial impact would be to the City and the community with the CDD and without the CDD. Mr. Deutsch asked the author of the study, R. Thomas Powers, CRE, Executive Vice President, to explain further the financial impacts to the City and to the community as a result of the bonds and the CDD. 13 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Mr. Powers began to present slides, a copy of which were in a booklet that had been presented to the Commission. There was a question about figures, and he advised that the copies before them were correct. (Copies of the booklets are in the Office of the City Clerk). Vice Mayor Harmening determined Mr. Powers was saying times have changed, and his recent survey pointed that out. If times were to change tomorrow, next week, or next year, Mr. Powers' present survey would be outdated. Mr. Powers replied that the possibility existed, but he did not think it would be totally outdated. He said the CDD designation would offer the jump- start Quantum needs. The key is the land prices. Land prices per square foot will be an estimated $2.50 less as a CDD. Land sales over this decade will be 56% higher as a CDD. Mr. Powers stated his corporation has been doing this work for 20 years in Florida, and their record is good. Mr. Powers said the total projected employment at Quantum with the CDD in the year 2000 is projected at 8,565. They should expect somewhere around an addditional 2,400 plus or minus jobs to be added outside of the park due to the CDD designation. The cumulative wages earned by onsite and off- site workers will be somewhere around 707 million dollars with a CDD. Approximately 100 additional jobs will be added with the CDD, and approximately 118 support jobs will be added. The cumulative wage and salary impact will be an additional 70 million dollars. The "Assessment of the Fiscal Impacts of a CDD Designation" and "Table 1, Quanti- fying the Economic and Fiscal Impacts of a CDD Designation for Quantum" are attached to the original copy of these minutes in the Office of the City Clerk as Addenda A and B. Questions by City Commission and City Staff As the assumptions used in generating these figures shift, Vice Mayor Harmening asked what the percentage of error or accuracy would be that Mr. Powers could project. Mr. Powers answered 15% plus or minus. Commissioner Matson asked whether the City got a comparative analysis of what the competition's prices were. Ms. Parker replied that the City did not get any from the developer, but the City Staff generated some this morning. She said the Commission had two economic reports, both being from reputable Economists. Ms. Parker thought the difficulty in doing those types of projections were well illustrated in the reports from Dr. Fiskind and Goodkin in that both of the Economists used different absorption schedules. The effect 14 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 was that the multipliers they were using, if the Commission went through the schedules, resulted in the fact that there will be additional property taxes coming to the City if there is building at Quantum. If there is no building, the City will not get anything. Vice Mayor Harmening remarked that multipliers can shift very rapidly. Commissioner Matson inquired whether this would put Quantum in line with everybody else's prices. After development, Ms. Parker said the developer provided costs related to their undevelopment. At this point, the City did not have any costs relating to the surrounding market. Ms. Parker talked to several Realtors this morning. One point the Commission needs to be aware of is this is not an unusual situation with the economy at this point in time. The closest competitor at this point is the Arvida Commerce Park in Boca Raton. Except for some recent sales in the previous three years, they did not have any sales of their property either. Delray's Park of Commerce has also had financial difficulties because of the lack of sales. In 1985 and 1986, Ms. Parker said Arvida was selling at approximately $6.25 per square foot, which was similar to Quantum's prices. Quantum is currently in the neighborhood of $5.00 and $5.50 a square foot. The most recent sale at Arvida was at $3.00 a square foot, so Quantum is not competitive with that market. The Palm Beach Park of Commerce on Palm Beach Lakes Boulevard is selling parcels for $3.50 a square foot. The Boynton Commerce Center on Woolbright Road and 1-95 is selling for $2.75 a square foot. The Delray Park of Commerce's property was auctioned last year, and they received from $1.50 to $2.50 per square foot. Ms. Parker stated that $3.00 to $3.75 per square foot seems to be what the market is requiring at this point, and Quantum has been unable to meet those prices. Commissioner Aguila commented that Quantum is not able to meet those prices because of their current debt service. Mr. Edward Deutsch confirmed that was correct. Ms. Parker informed the Commission that Quantum is current with their property taxes. Another concern the City Staff had was whether it would have a detrimental impact and negate any benefit the City would receive from the issuance of the CDD, if QuantuTM is able to reduce its price $2.00 to $3.00 but puts on a large assessment. Vice Mayor Harmening answered that his Certified Public Accountant (CPA) said, "No." 15 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Ms. Parker continued by saying the special assessment Dr. Fishkind mentioned would have some property tax advan- tages to the individual purchasers of the property. The assessment estimates Dr. Fishkind came up with included operational maintenance of about $16,000 an acre. That was assuming the 45 million dollar debt service with a 7.7% interest rate, which was probably a little low at this point. Ms. Parker said the assessment is probably somewhere in the neighborhood of $16,000 to $19,000. The City Staff assumed the square foot~ge costs with that assessment broken down to $1.67 per square foot or the 20 year term of the bond's present value of only about 92¢ on that. With the tax advantages, it was not really a significant factor in someone sufficient to purchase the property, looking at the effect of the loan. One other outstanding concern the City Staff had was the total value of the improvements. At 4:00 P. M. today, Ms. Parker said the City received some backup information. They did not have time to review it, but a cursory review looked like the 32 million dollars had been documented. If they do not have enough bond issue to reduce the debt service, Ms. Parker said 'they will not be able to get to the $3.00. Commissioner Matson wanted someone to contact Parkway in Tampa, as she understood that business park was similar to this proposal. Perhaps the Mayor of Tampa could give a report. Mr. Edward Deutsch congratulated the City Staff for being perceptive and asked good questions. He stated there were many questions the City Staff may still have. If the Commission did not make a finding tonight, Mr. Deutsch volunteered they would bring Dr. Fishkind in for an all day meeting in order for the staff to continue its research. They will provide whatever information the staff desires. In the petition, Commissioner Aguila noticed five persons were designated to serve as an initial Board. He wanted to know all about the five people. If he understood the Statute, the City has an option to recommend, suggest, or put people on the Board. Commissioner Aguila wanted comments on the possibility of the City Commission appointing two of the five Members to the Board. Mr. Edward Deutsch had no objections to that. He told Mayor Weiner today they would welcome City representation on the Board. Mr. Deutsch informed the Commission that R. Scott Ireland and Steven W. Deutsch are principals of the company. 16 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Philip R. Augustyn is their CPA. Mr. Harold C. Morrison is in the insurance business, and J. Berle Oster is an Attorney. All are local residents. By law, they cannot be somebody out of the State. Vice Mayor Harmening asked why the change of people from the last time. Mr. Deutsch did not remember who was on the first Board, but he remembered one was a Consultant for them but he no longer is. Vice Mayor Harmening stated there were several changes, not just one. Mr. Deutsch replied there was also a question of the residency of one of the persons. Section 2.2.3 under "Costs" said, "Administrative costs for establishing District 1 by the City of Boynton Beach". Commissioner Aguila inquired whether that was what they were going through now. Dr. Fishkind replied that was what the City was going through now. Commissioner Aguila asked if the application fee of $15,000 should cover 1/10th of that. Dr. Fishkind answered affirmatively and added that is why it is in the Statute. On Sec. 2.2.4, Commissioner Aguila noticed something was referred to as MSTU. Someone in the audience answered that would be Municipal Service Taxing Unit, and MSBU would be a benefit. Each of those can form a dependent special district in contrast to an independent special district. Commissioner Aguila mentioned a finding of fact regarding Allstate, and Mr. Deutsch asked for a continuance of that matter so they could give that information to the City. F.S. Chapter 190.016(15) provides exclusively that a default on the bonds or applications of a District shall not consti- tute a debt or obligation of a local general purpose govern- ment. Commissioner Matson questioned whether the Statute was saying the City would have no liability. City Attorney Cherof answered that was true. Vice Mayor Harmening commented that he had not received the appropriate information, unless it was furnished late this afternoon and he did not have the opportunity to see if it included answers to certain questions he had posed. He asked Assistant City Manager Parker if all of the questions to Quantum included in her memorandum No. 91-040C were answered to the City's satisfaction. Ms. Parker replied that the City received answers which were attached to the memo she gave the Commission on Friday. Some of the ques- tions will be answered at the time of the bond issue. 17 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Vice Mayor Harmening recalled the meeting was to be adver- tised for four weeks, and he wondered if there was a proof of publication. He was informed Deutsch Ireland will provide a proof of publication to the Commission. THE COMMISSION TOOK A BREAK AT 8:55 P. M. resumed at 9:02 P. M. The meeting Lloyd Powell, Alpine Florist, 1112 North Federal Highway, read his letter of May 23, 1991 and urged the Commission to vote "yes" on this proposal. He believed the CDD would bring light industry, increased employment, increased local spending, a decrease in employment taxes paid by all busi- nesses, increased ad valorem taxes, and positive press. Mr. Powell understood there would be no liability on the City or its citizens if the CDD was approved. He did not want to read about another Kraft Foods locating in another city. Doris Pastl, President, Greater Boynton Beach Chamber of Commerce, stated that the Chamber strongly supports Quantum Corporate Park and its request for a CDD. Edward and Steve Deutsch had many meetings with the Chamber's Board of Directors to explain and answer any questions the Chamber had. There are Florida Statutes protecting the local government and taxpayers. This has worked successfully in many other Florida cities and is strictly a taxing district for commercial developers and businesses only who are lo- cating in Quantum Park. Ms. Pastl said it was important that Deutsch Ireland had completed many of its roads, land- scaping, lakes and bike paths before commercial businesses located in the park. Most developers take off before that final stage of construction and are never seen again. Ms. Pastl said the City has already lost Kraft Foods, hundreds of thousands of tax base dollars, and employment opportunities. The City needs Quantum Park, a stronger tax base, a CDD, and the Commission's approval. Vice Mayor Harmening asked if $3.00 per square foot was Quantum's target. He asked how much Kraft Foods paid for the property they purchased. Ms. Parker spoke to Caldwell Banker in Boca Raton, the Realtor who handled the purchase by Kraft Foods, and the price was $3.00 per square foot. Craig Livingston, 323 North Federal Highway, Past President and Member of the Board of Directors of the Chamber of 18 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Commerce, and a Director on the Business Development Board of Palm Beach County, said it is the Development Board's job to find and bring jobs and relocate businesses in Palm Beach County. He read an article from today's Palm Beach Post called "Changes, layoffs taking toll on teachers morale". Mr. Livingston said the jobs created in Palm Beach County, as represented by the Business Development Board were 1,148. Boynton Beach had 70, which was the expansion of the Curt Joa plant. The 70 jobs represented 5% of the jobs created in the County over the past 12 months. Mr. Livingston asked the Commission to say "yes" to jobs in Boynton Beach. Cynthia Greenhouse, 618 N. E. 20th Lane, wanted the Commis- sion to look at F.S., Sec. 190.046(4) under "Termination of Contractual Expansion of the District", as it caused her concern. She read the Section and asked whether that Section of the Statute would enable a future Commission to adopt a non-urgency Ordinance which would obligate the City for this liability. Ms. Greenhouse was concerned that could be a possibility when a different Commission comes on board. City Attorney Cherof answered that was the obvious intent of that subsection of the Statute. In calculating the dollar amount for the infrastructure, Ms. Greenhouse thought the wetlands and preserve were included. She questioned whether that would make a difference in the amount of the bonds that could be floated. City Manager Miller answered it would. The City received the breakdown of the infrastructure costs at 4:00 P. M. today. City Manager Miller still had some questions. As to the break- down, there were also hard dollar and soft dollar costs involved. City Manager Miller was concerned with some of those staying totaled in with a total of 32 million dollars in construction costs. It appeared from reading the Statute that it was correct.. However, City Manager Miller did not have an opportunity to go through it and satisfy himself that it represented fully the hard and soft dollar costs that could be included in the infrastructure. Ms. Greenhouse asked whether he meant there was a possibility the 80 acres of preserve could be included. City Manager Miller answered, "Can or cannot." City Manager Miller explained the costs, which he stated appeared to be all inclusive. However, he had questions relative to what Ms. Greenhouse addressed, as well as some of the soft costs being directly related to the infrastructure or other aspects of the development. 19 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Ms. Greenhouse inquired whether the City knew how many other CDDs in the State are commercial CDDSs. She wondered what difference that would make for purposes of the City's consideration if the majority were residential as opposed to commercial. Vice Mayor Harmening thought commercial would be much more desirable than residential. Ms. Parker explained why commercial would be better than residential. The City did a survey in October and only five CDDs responded. Ms. Parker said the City could get more informa- tion from the State. Of the five that responded, two were strictly commercial. Two were mixed (commercial and resi- dential), and one was purely residential. Robert Taylor, Vice President for Finance, Bethesda Memorial Hospital, 2815 South Seacrest Boulevard, Boynton Beach, read a letter authorized by Robert Hill, President of the Hospital and Bethesda Healthcare Corporation. The letter from Mr. Hill stated that the Board of Trustees of Bethesda Healthcare Corporation strongly believes the CDD will enable Quantum to become more competitive with other industrial parks. The Board and their Attorney were sure there would be no financial risk to the City if the Commission approved this. Anything that would speed up the development of Quantum Park could only be beneficial to the City. The City will benefit by receiving increased tax revenues, creating new jobs, and receiving spin-off benefits for the economy of the area. Mr. Hill's letter had a newspaper article which appeared in The Miami Herald on Friday, May 10, 1991 attached. It appeared to Mr. Hill, from reading the article, that Coral Springs came to the conclusion that if they do not attract additional tax paying businesses that the ever increasing cost of providing essential city services can only be accomplished by disproportionately increasing the tax burden on the homeowner. They are preparing drastic measures in Coral Springs. All Boynton Beach has to do is provide Quantum Park with an Ordinance to permit a CDD. Mr. Taylor also read a letter addressed to him, dated May 10, 1991, from Timothy E. Monaghan, Attorney at Law, Jones, Foster, Johnston & Stubbs, P.A., Flagler Center Tower, 505 South Flagler Drive, West Palm Beach, FL. The letter stated: ". . .The legislature enacted Chapter 190 in 1980 to provide an alternative mechanism for planning, management and financing the delivery of capital infrastructure needed to 20 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 service growth. One purpose of the law is to facilitate partnerships between government and the private sector to promote economic development. These districts also serve to relieve the municipalities from some of the burden of meet- ing infra-structure needs while simultaneously supporting the concept that growth should help to pay for itself. The law allows property owners to organize themselves and to propose a plan of development to the municipality. The municipality retains control over planning and development without assuming any financial responsibility for the project. Florida Statutes Sec. 190.015(15) specifically provides that bonds or obligations of a community development district shall not constitute a debt or obligation of a local general purpose government or the state. As you know, it can be very difficult, if not impossible, to obtain conventional financing for developmental projects in today's market. Additionally, the interest on bonds issued by such special districts is usually more favorable than most other forms of financing. This is due, at least in part, to the fact that the law provides effective means of securing the collateral and a high priority for the liens thereon. Often the difference in financing costs can be critical to the decision to proceed with the development. In my opinion, a well planned community development district is a win/win situation for local government as it allows a means for promoting responsible economic development, including the creation of new jobs, without financially encumbering the local government. . ." Ralph Marchese, former Mayor, 1901 Roma Way, Boynton Beach, recalled when Quantum Park first came to the City, it was thought they would provide a tax base. Quantum did every- thing they promised to do, and the City has had no problems with them. From what he heard, Mr. Marchese felt the City would have no liability in this matter. He trusted the Commission would question that even further. If the answers come up positive, the City should provide Quantum with the necessary business. Mr. Marchese believed Quantum would be an enhancement for the City not only economically but from a point of prestige. He further commented and urged the Commission to help Quantum Park. Nick Cassandra, former Mayor, heard areas of concern the Commission should address: (1) They would be generating another governmental body they would have no control over. 21 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 The Florida Statutes tell Quantum what it can do. Once the Commission votes, they will have nothing to say about it. (2) With regard to all of the questions about financing of the Consultants, the economics of the day will determine how Quantum will get its money. The intent of the law was ipso facto. This developer is trying to recoup his infrastruc- ture to pay off his debt. (3) There is a risk if any Commission decides it does not like what the CDD is doing and changes the Ordinance, the City must pick up all the debts. Mr. Cassandra said the Commission must decide whether they want to give Quantum that power, because they will never be able to take it away from them. Shirley Stevens, 2832 S. E. 5th Circle, Villa 4-B, Boynton Beach, recalled this project was starting when she was Administrative Assistant to Dorothy Wilkin, County Commissioner, and attended many meetings. She told how she was impressed with Quantum Park, and she praised Deutsch Ireland. Considering the City's financial status, Ms. Stevens asked whether the Commission could afford to turn this down. She stated the Commission was given an oppor- tunity to stimulate development, provide a strong base, and to provide jobs for the City's citizens. Ms. Stevens asked the Commission to consider the City's tax base and dire financial straits. Alexander J. De Marco, 10817 Quail Covey Road, Boynton Beach, worked for a client who has over 2,500 employees and is looking for a plant site. It would be the kind of plant Motorola has, and Mr. De Marco wanted to see it in Boynton. Francis Clary, 850 Horizons East, Boynton Beach, asked Mr. Moyer if any of the districts he had were in a CDD where a municipality backed or supported them. Mr. Moyer informed her all of his districts are in the State of Florida. He has one CDD in West Palm Beach called Downtown/Uptown. The other districts were created by counties. Because of market conditions, a lot of districts have not been activated at this point and time. The CDD in West Palm Beach was created by the City to encourage downtown redevelopment. Mr. Moyer stated there were significant differences between this district and the West Palm Beach district. Ms. Clary thought a commercial industrial park should be able to carry itself and not have to depend on the municipality to back itl Bill Martin, 4398 Caryota Drive, Boynton Beach, spoke as Past President of the Chamber of Commerce and Chairman of 22 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 its Economic Development Committee. He felt both sides of the case had been presented. Some questions probably needed to be answered, but Mr. Martin thought they could be resolved and this should go forward. His Committee is charged with the responsibility of increasing the tax base in Boynton Beach and spreading the burden of ad valorem taxes from the residents onto business, increasing new jobs in the City (thereby decreasing unemployment), and increas- ing the overall quality of life of the citizens of Boynton Beach. Mr. Martin thought his Committee and the Chamber stood firmly behind the creation of the CDD. He urged the Commission to vote for it. Gary Ashcraft, Executive Director, Greater Boynton Beach Chamber of Commerce, wanted the record to reflect that he has worked with this developer. He is the recruiter for the Chamber of industrial and business prospects. If Quantum had not been here, Mr. Ashcraft stated he probably would not have come to Boynton Beach. He stated the problem with selling the Park is price. Based on that issue, he was anxious for the CDD to become a reality. Bob Olenik, Jr., former Vice Mayor, 29-D Crossings Circle, noted Vice Mayor Harmening mentioned there being an infini- tesimal chance of the worst case happening. He thought that underscored the reason tonight for the Commission to weigh the benefits versus the pitfalls of this. Mr. Olenik thought the data throughout the presentation tonight and the research handed the Commission were in favor of the benefits rather than the pitfalls. Referring to Ms. Parker's report about the similarity of Quantum Park to other parks, Mr. Olenik asked why the Commis- sion should not give Quantum Park the edge and not be simi- lar to the other parks. After expounding about affordable housing, he told the Commission not to pass up the oppor- tunity to be the catalyst to provide corporate housing for new businesses in South Florida. Mr. Olenik reiterated his feelings that the benefits of this ~far outweighed the detriments. As a citizen, he wanted to hear the concerns of each individual Commissioner. If any of them were silent, Mr. Olenik stated he would not be satis- fied, especially if anyone voted in the negative without voicing his or her reason why. He stated this was one of the most important economic decisions this Commission or any Commission has faced in recent years. Mr. Olenik emphasized this will provide a positive to the City, and he alluded to Tradewinds being a negative. MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 Mr. Olenik asked the Commission to close the public hearing tonight and allow the City Attorney to draft an Ordinance for first reading. In the days between now and first reading of the Ordinance, the City Staff would have an oppor- tunity to finish its analysis of the data and provide the Commission with its recommendation. Mr. Olenik hoped the Commission's decision would be in the affirmative. Harry Marcus, 650 Horizons East, stated he was asked by a number of Commissioners to study this. He was concerned with digging out the financial facts. Mr. Marcus knew the question in the minds of the Commissioners was whether this was a viable, financially strong operation. He felt the liability of the City was also a concern. After reading what the developer wanted from the petition that was sub- mitted, Mr. Marcus began explaining a financial statement he had prepared. Mr. Olenik interrupted Mr. Marcus to ask who wanted him to get the financial statement. Ms. Parker explained that Mr. Marcus had talked to the City Staff, and they had some of the same concerns Mr. Marcus had. She referred to the following questions, which were contained in the "Questions to Quantum": "9. What is the value of the land vs. the value of the assessments?" 12. Section 1.2, paragraph 4, of the petition states that the financial design of the district is established to allow Quantum CDD to remain financially strong and capable of carrying out its obligations. Please provide data to support this conclusion." 17. Section 2.2.3, paragraph 5 of the petition states, "the relevant concern here is whether Quantum CDD will be a financially viable entity. Will it have the revenues to finance its share of community infrastructure, and will it have sufficient revenues for operating and main- taining its infrastructure?" Ms. Parker stated the developer, being the major property owner of the CDD for the near term at least, will be respons- ible for paying the debt service on the bond. She thought Mr. Marcus' question was whether the City could ascertain the ability of the developer to pay the debt service on the bond in the near future, before the property is sold and the property owners take over the debt service. The Attorney 24 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 had advised Ms. Parker and the Commission that the City is not at the point of selling the bonds. The City Staff was told some of the information they asked for will be avail- able at the time of the bond sales. One reason why the City did not try to construct a financial statement was the City felt it was the responsibility of the developer to pro- vide that information. Commissioner Matson asked if the infrastructure figures were given to the City this afternoon. Ms. Parker answered affirmatively. Mr. Marcus thought the Commission should allow Deutsch Ireland to explain all of these things and perhaps bring in a representative from their bank. He again began explaining his financial statement. Commissioner Aguila referred to all of the time Mr. Marcus had spent gathering his information. To save time, he suggested that Mr. Marcus let Ms. Parker assimilate the information and bring back the facts. Discussion by City Commission Mayor Weiner commented that this petition has been going on for several months, and she mentioned some questions have never been answered. She thought before the Commission made a decision, every question asked by the City Staff should be answered by Mr. Deutsch and his associates. Mayor Weiner spoke to Mr. Deutsch about this, and he stated he would be willing to ask for a continuance of this meeting until the City Staff could get answers to every single question. Mayor Weiner asked the Commission for permission to continue the meeting at a time to be determined until those unanswered questions are answered. In Chapter 190, Vice Mayor Harmening said there are six questions the Commission should consider in passing on the CDD. He was a little bit negative on four of the six ques- tions. Vice Mayor Harmening felt Quantum could conceivably respond and clarify some of the questions that had arisen and had not been answered. One area he did not believe the developer could fix was question 3, stated in Ms. Parker's Memorandum No. 91-040C: "3. Whether the area of land within the proposed district is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community." Due to the out parcels and the configuration of the tract, Vice Mayor Harmening did not feel the developer could ever 25 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 comply with this. Considering all of these things, he felt it was an insoluble problem. In his opinion, it failed. Mayor Weiner asked for City Attorney Cherof's opinion. City Attorney Cherof thought that was one of the areas of concern. He had posed that question earlier. Counsel for the developer had expressed an opinion on that, but City. Attorney Cherof did not have an answer tonight as to whether the land within the proposed district was or was not suffi- ciently impact. He stated he would be happy to communicate with the developer's Counsel with respect to his research and advise the Commission. Vice Mayor Harmening looked at the map; the land did not appear to be contiguous, and he saw no way of fixing it. Commissioner Matson wanted to hear from Attorney Lester. Vice Mayor Harmening stated Attorney Lester's opinion would not affect his opinion. As Bond Counsel, Attorney Lester said he was asked to give an opinion that the bonds will be properly issued. He was happy to share his opinion with the Commission that this statutory element would be satisfied. Attorney Lester did not do that lightly, as his reputation was at stake. He did not through his background and as much research as he could muster. If Mayor Weiner would close the public hearing, Vice Mayor Harmening said he would be happy to make a motion. Commissioner Aguila personally had no argument with question 93 above. His position on the issue was that the developers made an excellent presentation. They had done everything to convince the Commission "this will fly." Commissioner Aguila had no problems with the CDD. He thought the Commis- sion should send a message that this is a progressive, optimistic, open minded community that is willing to work with businesses and encourage them to come to Boynton Beach. The only concern Commissioner Aguila had was that the implementation of the bonds will take some time. He did not mean to question %he developer's financial status, as he felt it was none of his business. Commissioner Aguila felt the Commission should go along on this. He admitted there would be a bigger problem if Quantum does not make it through the year or so it will take to get this to a point where the bonds are ready to be sold and monies are coming in, but he was willing to take that risk because he thought the overall advantage to the City was worth the risk. Commissioner Aguila did not think they should "beat this dead horse too much", or Boca Raton, Delray Beach, and everyone will slide right by the City again. If a motion 26 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 should be made to defeat this tonight, he could not support it. THE PUBLIC HEARING WAS CLOSED. Commissioner Matson agreed with Commissioner Aguila. She knew there were still questions to be answered, but she had faith in Messrs. Deutsch that the City would get the answers expeditiously. Commissioner Matson felt they should send the message out to the business community that Boynton welcomes them. She was prepared to make a decision. Commissioner Artis' concern was addressed when she heard the City would not be legally required to repay the bonds in the event of a default. She mentioned a decrease in the tax burden on the homeowners, the creation of new jobs, the increased tax revenue, tax benefits to small businesses, and felt Quantum's prices should be competitive with the surrounding areas. Mayor Weiner reminded the Commissioners they were not required to make a decision this evening, but they couid make a decision. Mot i on Commissioner Aguila moved to authorize the City Attorney to start preparing an Ordinance establishing a CDD, pending the clarification of any questions the Commission may have. It would not be necessary to have the clarification at the next Commission meeting, but it should be at the next appropriate time when some questions have been answered and satisfied. Commissioner Matson seconded the motion. City Attorney Cherof felt a time specific should be added to the motion. Commissioner Aguila suggested they say the first meeting in July. After comments about the month of June, it was decided the date should be the first meeting in July. Commissioner Aguila repeated his motion, which was to authorize the City Attorney to begin drafting an Ordinance for the creation of the Quantum Park CDD to be for first reading at the first Regular meeting of the Commission in July, pending all questions being answered at first reading. If there are still some outstanding issues at that time, City Manager Miller advised that the Commission could table 27 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA MAY 28, 1991 the Ordinance at first reading. Mayor Weiner asked whether that would include the issue of the land being contiguous. City Manager Miller replied that the Commission had the developer's interpretation, and they may like to have the City Attorney's. Vice Mayor Harmening did not believe the motion, as pre- sented, was appropriate at this time. At the very least, he thought they should have all questions cleared up before they even considered directing the Attorney to draft an Ordinance. Based On that, among other things, he would vote against the motion. City Attorney Cherof advised that the motion was an appropriate motion. Vice Mayor Harmening was not questioning the legality of the motion. Commissioner Aguila said his motion would stand. Commissioner Matson stated her second would also stand. A vote was taken on the motion, and the motion carried 3-2. Mayor Weiner and Vice Mayor Harmening cast the dissenting votes. ADJOURNMENT The meeting properly adjourned at 10:20 P. M. CITY OF BOYNTON BEACH ATTEST: ~ecording Secreta y// (Four Tapes) Mayor ~~~e~Mayor' Comml s s 1 oner C omm~ s ioner Commissioner 28 GOODKIN RESEARCH CORPORATION ASSESSMENT OF THE FISCAL IMPACTS OF A CDD DESIGNATION FOR QUANTUM VALUE OF THE BUILT PROPERTY, YR. 2000 W/O WITH CDD CDD $508.8 Mil. $787.8 Mil. IMPACT WITH CDD $279.0 Mil. CUMULATIVE REVENUES TO THE YR. 2000: SALES TAX PROPERTY TAX BUILDING PERMITS WATER AND SEWER POLICE AND FIRE TOTALS $ 160,000 $4,380,000 $1,476,000 $ 733,000 ($ 325,000) $6,424,000 $ 251,000 $6,780,000 $2,271,000 $1,216,000 ($ 608,000) $9,910,000 $ 91,000 $2,400,000 $ 790,000 $ 483,000 ($ 283,000) $3,486,000 Source: Goodkin Research ADDENDUM A 0 ADDENDUM B