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)
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