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Minutes 12-06-04MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY SPECIAL MEETING HELD IN COMMISSION CHAMBERS, CITY HALL, BOYNTON BEACH, FLORIDA ON MONDAY, DECEMBER 6, 2004 AT 6:30 P.M. Present Jeanne Heavilin, Chairperson Henderson Tillman, Vice Chair James Barretta Alexander DeMarco Don Fenton Marie Horenburger Steve Myott Terry Lewis, Board Attorney Doug Hutchinson, CRA Director I. Call to Order Chairperson Heavilin called the meeting to order at 6:30 p.m. I1. Roll Call The Recording Secretary called the roll and declared that all members were present. Chair Heavilin welcomed the Board's new attorney, Terry Lewis, from the law firm of Lewis, Longman & Walker. Attorney Lewis stated that Ken Spillius would be the Board's regular counsel. Attorney Lewis introduced his associate, Ms. Amy Dukes, and noted that his firm specializes in representing governmental entities. Chair Heavilin introduced Assistant City Manager, Dale Sugerman. II1. Agenda Approval A. Additions, Deletions, Corrections to the Agenda None B. Motion Adoption of Agenda Ms. Horenburger moved for approval. Motion unanimously carried. IV. New Business seconded by Vice Mayor Tillman and A. Consideration of Adoption of CRA Bond Resolution Special Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida December 6, 2004 Mr. Hutchinson requested that the Board's Bond Counsel, Mark Raymond, assume the podium. Mark Raymond, from the firm of Moyle, Flanigan, Katz, Raymond & Sheehan, P.A. presented a Resolution for the Board's consideration that was included in the agenda packet. No substantive changes have been made to this Resolution. If the Board adopts the Resolution, it would serve as the blueprint for the series 2004 bonds that are currently being proposed for issuance and any future bonds that the CRA may decide to issue. CRA tax increment revenues secure the bonds. The adoption of the Resolution would authorize the issuance of up to the principal amount of $19,575,000 in series 2004 bonds. After adoption, the underwriters would market the bonds over the next one-week period. This would lock in the terms of the bonds and the Resolution delegates to the Chairperson the authority to approve the details of the bonds, subject to a not-to-exceed principal amount of $19,575,000. The final maturity date would not exceed 25 years from the date of issuance. The bond issue would be sized to produce a certain deposit to the CRA's construction fund of approximately $17,700,000. In today's market, producing that amount of proceeds requires the issuance of $19,160,000 in bonds. The bond issue is being structured to provide level annual debt service over the next 20 years. Level annual debt service would be combined with the CRA's existing bank loan, which is approximately $300,000 per year. This means that while the bank loan is outstanding, the bonds would have a debt service of approximately $1.4 million. When the loan is paid off, the debt service on the bonds increases to $1.7 million to make up the difference. At that point, the bond would be level for the next 20 years. In today's market, the bonds would be sold with yields of 2.15% at the shod end, up to 4.56% at the long end. Attorney Raymond noted that the Board previously chose Bank of America Securities to serve as the underwriter for the bonds and the Resolution would authorize the Chairperson to enter into a contract with Bank of America. Once the details of the bonds are known, the contract would be executed. In approximately one week after execution, the funding of the bond issue would take place. Adoption of the Resolution also approves the ancillary documents that include the official statement for the bonds, i.e. the prospectus for the bond issue. This is a document that informs investors of all material information concerning the purchase of the bonds. U.S. Bank is the paying agent for the bonds. U.S. Bank would act as the intermediary between the CRA's agency and the bondholders. Also, the Resolution authorizes the execution of an agreement between the agency and U.S. Bank. Attorney Raymond explained that the Board's financial advisor used a bidding process to select the paying agent. U.S. Bank was the entity that was willing to provide these services at the lowest cost, which is $200 annually for the life of the bond issue. Special Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida December 6, 2004 The bonds are backed by bond insurance issued by MBIA Insurance Corporation. MBIA would make the debt payments to the bondholders should the CRA not be able to do so. Because the bonds are backed by this insurance, the bonds were given a Triple A rating, which is the highest rating and results in the lowest possible interest rate to the CRA. One of the conditions in obtaining this insurance is that the City of Boynton Beach would guaranty the debt service on the bonds. Attorney Raymond also furnished a form of guaranty that the City would sign. The Resolution includes a provision that the bonds could not be issued unless the City guaranties the debt service. This guaranty will be on the agenda in the form of a Resolution for adoption by the City Commission at its Tuesday, December 7, 2004 meeting. Attorney Raymond would be attending the City Commission meeting. Attorney Raymond explained that the bonds are payable solely from the CRA tax increment and the Board members have no personal liability whatsoever associated with the issuance of the bonds. The Board's legal counsel has reviewed the Resolution as well. Ms. Horenburger inquired why Attorney Raymond obtained MBIA Insurance. Attorney Raymond explained that obtaining this insurance gave the bonds the Triple A rating. Mr. Fenton asked why the bonds were not book-entry bonds. Attorney Raymond stated that initially the bonds were book-entry bonds, but there is no guaranty that future bonds would be issued in book-entry form. Also there is no guaranty that these bonds would remain in book- entry form and could be taken out of book-entry form. Mr. Fenton asked what the call feature was. Attorney Raymond stated that currently this is unknown, but he expects it to be 10 years at par. This is determined as part of the marketing process. Mr. Fenton inquired why The Arches project was included in the blueprint of the bonds and not the Promenade. Attorney Raymond explained that the CRA has already entered into an agreement with The Arches that obligates the CRA to pay 50% of the tax increment generated from that project and this obligation is senior to the bonds and had to be accounted for. Mr. Fenton reported that The Arches may not happen and they only had a six- month extension, which will be coming up soon. Attorney Raymond responded that if the project disappears, it would be removed. Mr. Hutchinson explained that the contracts for the Promenade would have language that state that the bonds would be superior to that incentive. Mr. Fenton gave kudos to Ms. Turner and Ms. Vielhauer for getting the Triple A rating for the first issuance of the CRA's bonds. Mr. Hutchinson responded that this saved the City over $2 million by achieving this rating. Mr. DeMarco noted that this Board throughout all the documents is referred to as the "Board of Commissioners" and inquired if this was appropriate. Attorney Raymond explained that statutorily this Board is referred to as the "Board of Commissioners." Special Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida December 6, 2004 Chairperson Heavilin noted that when this item was presented to the City Commission for consideration, certain projects had been earmarked and inquired if the Board was locked into those projects. Attorney Raymond explained that the wording in the Resolution states "any component of the Community Redevelopment Plan, as determined from time to time." There will be ancillary documents required as part of the closing that would tell him what the CRA is intending to do with the money. This information, however, is not furnished to the bondholders. Therefore, all those uses are tax-exempt uses. The benefit of doing it this way would allow the CRA to make changes without going to the bondholders for approval. Motion Vice Mayor Tillman moved to adopt CRA Bond Resolution No. 04-04. Motion seconded by Ms. Horenburger and unanimously carried. Chairperson Heavilin and Mr. Hutchinson thanked all the parties for their hard work in bringing this to fruition. Consideration of a TCEA Contract (with Kimley Horn) Change Order for Boynton Beach Boulevard FDOT Easement Release. Motion Ms. Horenburger moved for approval. Motion seconded by Mr. Fenton. Mr. Hutchinson explained that the purpose of the motion was to remove an extra 20' easement at no additional cost. Chairperson Heavilin asked if anyone in the audience would like to address this item and no one came forward to speak. Vote The vote on the motion was unanimous. V. Adjournment There being no further business, the meeting properly adjourned at 6:50 p.m. Respectfully submitted, Barbara M. Madden Recording Secretary (December 8, 2004) 4