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Minutes 11-08-05 MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY HELD IN COMMISSION CHAMBERS, CITY HALL, BOYNTON BEACH, FLORIDA, ON TUESDAY, NOVEMBER 8,2005 AT 6:30 P.M. Present: Jeanne Heavilin, Chairperson Henderson Tillman, Vice Chair James Barretta Alexander DeMarco Don Fenton Marie Horenburger Steve Myott Ken Spillias, Board Attorney Lisa Bright, Assistant Director I. Call to Order Chairperson Heavilin called the meeting to order at 6:30 p.m. She recognized the presence in the audience of Mayor Taylor and his wife, Vice Mayor McCray, and Commissioners Ensler and McKoy. II. Roll Call The Recording Secretary called the roll and declared that a quorum was present. III. Agenda Approval A. Additions, Deletions, Corrections to the Agenda There were no additions, deletions, or corrections to the agenda. Motion Mr. DeMarco moved to accept the agenda as presented. Mr. Myott seconded the motion that passed 7-0. IV. Consent Agenda Chair Heavilin asked if any items were to be pulled from the Consent Agenda. Mr. Barretta indicated he wished to pull all items except the Approval of the CRA Board Meeting 2006 Calendar (G). A. Approval of Minutes for the September 22, 2005 Workshop B. Approval of Minutes for the CRA Board Meeting October 11, 2005 C. Approval of reimbursement in the amount of $lJ39.00 for the SEBOF Self-Assembly group appraisal under their Assembly and Redevelopment Incentive Grant D. Approval of reimbursement in the amount of $964.61 for legal fees for the Boynton Beach Railroad Self-Assembly group under their Assembly and Redevelopment Incentive Grant E. Approval of reimbursement for the Fa<,;:ade Grant to Ocean Chiropractic in the amount of $15,000 F. Approval of minor amendments to the Direct Incentive Program G. Approval of the CRA Board Meeting 2006 Calendar Motion Mr. Barretta moved to approve the Consent Agenda as amended. Mr. DeMarco seconded the motion that passed 7-0. Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Attorney Spillias asked for a reconsideration of the agenda. Motion Ms. Horenburger moved to reconsider the adoption of the agenda. Mr. Fenton seconded the motion that passed 7-0. Mr. Hudson indicated that the agenda should reflect three items for Estancia: 1) land use amendment, 2) rezoning, and 3) site plan approval, all of which had to be considered concurrently. It was agreed to add these properly noticed items to the agenda as items 6-C and 6-D. Motion Mr. DeMarco moved to adopt the agenda as amended. Mr. Myott seconded the motion that passed 7-0. V. Public Audience Chair Heavilin opened the floor for the public to speak on any matter not on the agenda, but closed it when no one came forward to speak. VI. Public Hearing A. Abandonment 1. Project: Agent: Owner: Location: Description: Spotts Abandonment (ABAN OS-007) Daniel Spotts Miami Aqua Culture, Inc. 805 North Federal Highway Request for abandonment of a portion of a 20- foot wide right-of-way west of North Federal Highway abutting the Florida East Coast Railway Kathleen Zeitler, Planner, presented this request for abandonment on behalf of staff. A discussion took place at the previous meeting regarding a difference of opinion on what the procedures are for abandonment in relation to whether the applicant would get the entire width or have to split it between adjacent property owners. According to the Property Appraiser's Office, on abandonments that abut rights-of-way such as a railroad, the applicant would receive the total width and not have to split it as it is typically done. Staff recommends approval of the abandonment. There is a utility line that goes through the middle of the alley and staff recommends as a condition of approval that the applicant dedicate an easement over that. Chair Heavilin asked if the FEC owned any part of this property, the railroad right-of-way. Ms. Zeitler responded FEC does own the right-of-way but the property in question, an unimproved alley, is City- owned property. Mr. DeMarco asked what the footage was from the railroad track to the beginning of the property. The applicant responded that the FEC right-of-way was 25 feet on either side of the railroad tracks and the alleyway itself was 20-foot wide. Chair Heavilin noted that other abandonment requests had come before the Board with FEC rights-of-way and asked if the finding of the Property Appraiser's Office and Planning & Zoning would apply to them and any subsequent requests. Ms. Zeitler said staff's research showed in previous abandonment requests in this area abutting the FEC railroad right-of-way, the entire footage was abandoned and transferred to the applicant. 2 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Daniel Spotts, Miami Aqua Culture, Inc., thanked the Board for putting this off a month to clarify the issues involved. Mr. DeMarco asked Mr. Spotts if he had asked FEC about this since the last meeting. Mr. Spotts had not entered any new requests, but as of the last meeting, they had said they owned the right-of-way, but not the land. Also, FEC had declined to attend any of the meetings. Chair Heavilin opened the floor for the public to speak on this item, and closed it when no one came forward. Motion Vice Chair Tillman moved to approve the request for abandonment at 805 North Federal Highway for Daniel Spotts (ABAN 05-007). Mr. Barretta seconded the motion that passed 7-0. B. Land Use Plan Amendment Ms. Horenburger announced that she was recusing herself from participation in the Estancia items. She had no personal interest in the project but had a client who did. Ms. Horenburger duly completed a Voting Conflict form and gave it to the Recording Secretary. Attorney Spillias asked Board members to reveal any ex-parte communications they may have had with anyone regarding any of the items being considered under public hearings. None were declared. Attorney Spillias explained the procedures and requirements involved in quasi-judicial proceedings. He then swore in all who planned to speak during public hearing. Description: Estancia @ Boynton Beach (LUAR 05-009) Carlos Ballbe, Keith & Ballbe, Inc. HHC Boynton, LLC 3010 South Federal Highway (east side of Federal Highway, approximately 300 feet south of the intersection of Federal Highway and Old Dixie Highway Request to amend the Comprehensive Plan Future Land Use Map from High Density Residential (HDR) and Low Density Residential (LDR) to Special High Density Residential (SHDR); and 1. Project: Agent: Owner: Location: C. Rezoning 1) Project: Description: Estancia @ Boynton Beach (LUAR 05-009) Request to rezone from Planned Unit Development (PUD) and R-1-AA Single Family Residential to Infill Planned Unit Development (IPUD). Dick Hudson, Sr. Planner, presented this item on behalf of Planning & Zoning staff. Mr. Hudson explained that this project was located on the former site of the Sun Wah restaurant. The previous applicant was Dakota Lofts, whose application was approved for a land use amendment and rezoning on February 19, 2001. At that time, the highest density that could be requested in this area was 10.8 dujac and development regulations for the IPUD zoning district had not been approved. The property has languished in an undeveloped state since that approval. The staff report mentions a condominium 3 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 development to the northwest of the subject project called Heritage Club and it should state Colonial Club. This project was constructed at a density of 21 du/acre. Staff recommended approval of the requested land use amendment and rezoning because: 1) The future land use amendment is consistent with the policies of the City's adopted Comprehensive Plan, particularly the portions of policy 1.16.1 that defines Special High Density Land Use relative to redevelopment planning, urban densities and housing opportunities. 2) The requested land use amendment and rezoning meet or exceed the criteria for review as required in the Land Development Regulations. 3) The proposed redevelopment plan is consistent with the vision and recommendations of the Federal Highway Corridor Community Redevelopment Plan. Due to the regulations of IPUDs, the site plan approval has to be concurrent with this approval. D. New Site Plan 1. Project: Agent: Owner: Location: Description: Estancia (NWSP 05-0260 Carlos Ballbe, Keith & Ballbe, Inc. HHC Boynton, LLC 3010 South Federal Highway Request for new site plan approval to construct 30 townhouse units and related site improvements on 2.65-acres to be rezoned Infill Planned Unit Development (IPUD) Eric Johnson, Planner, presented the site plan on behalf of staff. Mr. Myott commented that he and Mr. Barretta had requested they be provided with full size plans and not the scaled down version in the agenda packets and they had not received them. The architectural and other details are not really visible on the smaller versions. Vivian Brooks apologized for the omission and hoped that Mr. Johnson's presentation and the applicant would be able to answer their questions. Mr. Johnson shared his full-sized plan with the board members so Mr. Myott and Mr. Barretta would be able to see what they wanted to see. Mr. Johnson showed the elevations of the project. Mr. Fenton and Mr. DeMarco inquired about the status of the water issue that arose with the Dakota Lofts project. Mr. Johnson said unless there were underlying conditions or requirements such as deed restrictions granting water rights to the existing users, it was incumbent upon the applicant to either install a new well to serve those residential dwellings or to connect the aforementioned dwellings to City water. Mr. Johnson understood that 821 Bamboo Lane is connected to potable water and sanitary sewer but it appeared that 2 Virginia Gardens Drive is still on a well and septic tank. Steve Gallagher, 816 Bamboo Lane, resident abutting the proposed project, commented that the developer had agreed to pay for the installation of the water meter and hookup at 816 Bamboo Lane. Mr. Gallagher submitted a letter to the Clerk that the applicant had written to the developer outlining the understanding of the homeowners and the develope(s offer to pay the costs associated with the hook up of water to Mr. Gallagher's home. Mr. Gallagher also submitted letters to him from the former developer offering to reimburse Bruce Jarvis and Christina Fried for the actual cost of hooking up to City water and meter fees up to $4,000 and other commitments. Mr. Gallagher asked to have the letters from the developers included in the conditions of approval. The residents also wanted the southern side of the 4 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 proposed project to be more aesthetically pleasing to those residents who had to look at it and the developer agreed to put awnings on the south side. Mr. Barretta asked Mr. Johnson to elaborate on Condition of Approval #36 recommending enhancing the south fa<;ade of the southernmost building proposed along Federal Highway. He explained that the south- facing fa<;ade was a focal point for the City and needed to be enhanced. Mr. Barretta thought the applicant had been aware of this comment and wondered whether the applicant had responded to the comment with an elevation to show the board what it would look like. He hoped the board was not being asked to approve something without knowing what it would look like. Chair Heavilin asked to have the applicant and the CRA Planner make their presentations because Mr. Barretta might find his question answered during their comments. Vivian Brooks, CRA Planning Director, stated she had reviewed the plan for Estancia and recommended approval. The conditions CRA staff applied were to 1) incorporate on-street parking on South Federal Highway, since the project only had four surplus parking spaces, and 2) underground the overhead utilities on South Federal Highway. She had met with the developer the day before and they had agreed to pursue on-street parking with FDOT and the utilities request. Mr. Myott inquired whether the project would have gates along the side fronting on South Federal Highway. He did not see them on the drawings and without them, the project would be much too "open." The developer responded that there were gates but they were not shown on the particular elevation that was shown during this meeting. Carlos Ballbe, 4401 West Tradewinds Avenue, Lauderdale-by-the-Sea, appeared representing HHC of Boynton, the new owners of the former Dakota Lofts project. He was proud of the work done by the developers in meeting with the neighbors and coming up with a plan that met all the conditions of approval given to the Dakota Lofts project. He introduced his team of consultants to answer specific questions. A PowerPoint presentation was shown for the project and the board asked questions. The project architect stated the theme of the project was to have a courtyard feeling with townhouses as opposed to a condo look. Gate and wall details were not shown but they did have a detailed blowup of the gates in the architectural drawings. There is a main gate made of iron between the units and individual gates with pilasters in front of them. Mr. Barretta asked if the elevations satisfied staff and Mr. Johnson said he would have to evaluate them. Mr. Barretta wanted the board to know what it was approving, saying the board had asked staff not to have open-ended design items. He felt if staff made open-ended comments, they should ask the petitioner to bring drawings that satisfied those comments, review the drawings and let the board know whether they were satisfied or not. The board is supposed to approve the aesthetics of the project but it was not clear what they were actually approving. Mr. Barretta was satisfied with the embellishments the applicant suggested for the southern end of the building, but if he approved it, he would expect the final result to look like that. Mr. Fenton confirmed with the applicant that the turning ratio for fire trucks issue had been resolved. Mr. DeMarco inquired about parking and Mr. Ballbe responded they had eight spaces for guests on site. The landscape architect discussed the plant material planned for the proposed project. Mr. Myott asked the applicant's plans for watering the landscaping. Mr. Ballbe said due to the potential of salt-water intrusion into the water supply, the City Utility Department preferred those living east of u.s. 1 to use other than non-City water if possible. They had not been able to find water at 40 to 60 feet yet but were 5 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 continuing to try. The City would allow them to use City water if they were ultimately unsuccessful in finding water. Chair Heavilin opened the floor to the public and closed it when no one came forward. Vice Chair Tillman asked the applicant what timetable they were looking at for the project. Mr. Ballbe responded they would start working on the construction drawings upon Commission approval. It would take about four months to get site development permits through the City and the property had to be replatted. It would take about six months to get the plat recorded. They hoped to open the first quarter of 2006. Chair Heavilin asked when they planned to demolish the remaining buildings on the parcel. The developer responded, "by the end of the year." Motion Mr. Myott moved to approve the request to amend the Comprehensive Plan Future Land Use Map from High Density Residential (HDR) and Low Density Residential (LOR) to Special High Density Residential (SHDR) (LUAR 05-009). Vice Chair Tillman seconded the motion that passed 6-0. Motion Mr. Myott moved to approve the request to rezone from Planned Unit Development (PUD) and R-1-AA Single Family Residential to Infill Planned Unit Development (IPUD) (LUAR 05-009). Vice Chair Tilman seconded the motion that passed 6-0. Chair Heavilin suggested the board might wish to include the two CRA staff comments as conditions. The board might also consider the request of the homeowner abutting Estancia to include the developer's agreements pertaining to water and certain aesthetic features as conditions also. Mr. Barretta asked about the awnings the homeowners had requested on the south side of the project and the architect's feelings about it. Also, he wanted to know what any proposed awnings would look like. The project architect responded that they had no problem with awnings or carrying out the theme from the South Federal Highway side to the south side. The homeowner commented that it did not have to be awnings but could be windows, balcony railings, or something similar to the South Federal Highway fa<;ade - just so it did not look like a blank wall. Attorney Spillias commented if the board wished to make the homeowner's letter from the developer a condition of approval, they should read it or have it read into the record. Mr. Myott suggested stating the developer would have the same architectural features on the south elevation as on the west elevation. Chair Heavilin read a portion of the letter from the developer to the Gallaghers as follows: "We will agree to pay the costs associated with the hook up of water to your home (Steve Gallagher, 816 Bamboo Lane) and will also reimburse Bruce Jarvis and Christina Fried for the actual cost of the work and meter fees up to $4,000 each. We will agree at a minimum to add awnings to the second floor square windows that face Bamboo Lane, which will complete your request. Additionaliy, we will review other options with our architect today to see if additional decorative items can be added to the Bamboo Lane elevation." Attorney Spillias suggested that the issue having to do with awnings would be appropriate issues to place as conditions for site plan approval. Agreements for payments to be made between individuals would probably not be appropriate to place on the site plan approval. Mr.. Fenton agreed, adding that the homeowners in question were not in the City limits. Motion Mr. Barretta moved to approve the site plan with the addition of the two CRA conditions and removal of staff's Condition #36. Mr. Myott seconded the motion. 6 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Chair Heavilin asked if Mr. Barretta wanted to include the comment about awnings, but Mr. Barretta did not wish to include it. The motion passed 6-0. Ms. Horenburger returned to the dais. VII. Pulled Consent Agenda Items A. Approval of Minutes for the September 22, 2005 Workshop On page 8, Mr. Barretta wanted to delete the second sentence in the third paragraph from the bottom and replace it as follows: There should be no blank walls in excess of 20' x 10' without windows. On page 9, Mr. Barretta wanted to add, "Mr. Rumpf confirmed this' following the statement about sidewalks not having to be paved. On the same page, fifth paragraph from the bottom, "but staff is flexible" should be replaced with" the guidelines are flexible. " On page 12, third paragraph from the bottom, the words "45' step back" should be deleted. The intent was to provide a 5 or 10-foot setback at heights of 45 feet. On page 15, second paragraph, insert the words "for example" after INCA. On page 15, third paragraph, delete words "have worked" and replace with" will work." On page 15, fourth paragraph, "this proposal versus the current zoning" should read instead, "their current proposal versus the current zoning. "In the same paragraph, "Mr. Hutchinson said he would work with City staff on this" should be replaced with "Mr. Hutchinson said he would have eRA staff prepare the document/data. " On page 16, Map #6, MU-L! should be MU-Ll. On page 18, third paragraph from the bottom, strike the words "or R-3. On page 19, third paragraph from the bottom, sentence ending in mixed use should be "mixed-use low." In the next paragraph on page 19, a reference is made to a consultant reviewing the current height limit in M-1 zoning districts. Mr. Barretta did not recall such a comment and did not know who that consultant might be. Mike Rumpf, Planning & Zoning Director, stated that they had preliminary comments and recommendations from the consultant regarding the M-1 zoning district and building heights. Mr. Barretta asked if the consultant should, then, be identified by name. Ms. Horenburger stated, "Not if you didn't then; it would be changing the record." On page 20, the last paragraph prior to Adjournment, add "meaning density" after the word people. Ms. Horenburger said that if this was not what he said, the record should not be changed. Attorney $pillias agreed. Mr. Barretta stated he was recommending the changes. He spoke at length at the meeting on density and a lot of it was stricken. He felt if the members listened to the tape, they would agree adding "meaning density" was appropriate to what he said at that meeting. Mr. Barretta asked if the board wanted to listen to the tape, but Chair Heavilin thought that would not be necessary. 7 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8,2005 Motion Ms. Horenburger moved approval of the minutes of the September 22, 2005 Workshop as amended. Vice Chair Tillman seconded the motion that passed 7-0. B. Approval of Minutes for the CRA Board Meeting October 11. 2005 Mr. Barretta stated that on page 3, third paragraph from the bottom, the words "and engineering" should be added to this sentence: "Currently the site is non-conforming for landscaping and ADA requirements." Chair r Heavilin asked if this was what was stated at the meeting, and Mr. Barretta responded that it was. On page 22, a motion was made with no indication of a vote or resolution of the motion. He did not know if this was an omission by the Secretary or whether the board had not acted on the motion. The board agreed that the motion had died in light of Mr. Reardon's subsequent remarks. Motion Ms. Horenburger moved to approve the minutes of the October 11, 2005 CRA meeting, as amended. Mr. Barretta seconded the motion that passed 7-0. C. Aooroval of reimbursement in the amount of $1.739.00 for the SEBOF Self-Assembly Group aooraisal under their Assembly and Redevelooment Incentive Grant Vivian Brooks, CRA Planner, said this was a reimbursement for one of the self-assembly groups that was located at the southeast corner of Ocean and Federal and they were making progress, considering the size of their group. They have 26 property owners and are close to signing their Memo of Understanding. They have intense development interest in this site and she recommended approval for reimbursement of their expenses. Mr. Barretta wanted to see a map showing which property owners had agreed to it and which had not, since he felt this was necessary to gauge the effect on the development. Ms. Brooks responded the grant agreement did not require that 100% of the property owners execute the agreement and they had well over a super-majority now. She added the board had already granted the money, a grant agreement was in place, and the grant requirements had been met. Ms. Brooks offered to bring a map to the next meeting, but did not think it was worth holding up the reimbursement. An agenda item with status on the assembly efforts was suggested along with the submission of a "map" on future grant projects. Motion Vice Chair Tillman moved approval of the reimbursement in the amount of $1,739.00 for the SEBOF Self- Assembly Group Appraisal. Ms. Horenburger seconded the motion. The motion passed 7-0. D. Aooroval of reimbursement in the amount of $964.61 for legal fees for the Boynton Beach Railroad Self-Assembly Grouo under their Assembly and Redevelooment Incentive Grant Ms. Brooks said this was on Boynton Beach Boulevard on the Fred & Joe's site and all owners were in agreement and entertaining development offers at this time. Mr. Barretta remarked of almost $7K there was a detailed invoice for only $1900. He asked about the other invoices. Ms. Brooks said they had been on prior agendas. Each reimbursement comes to the board with the backup for the check that is being paid. Motion Vice Chair Tillman moved approval of reimbursement in the amount of $964.61 for legal fees for the Boynton Beach Railroad Self-Assembly Group Appraisal. Ms. Horenburger seconded the motion that passed 7-0. 8 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 E. Approval of reimbursement for the Fa<;ade Grant to Ocean Chiropractic in the amount of $15.000. Ms. Brooks indicated Ocean Chiropractic had completed a major overhaul of an older building on Boynton Beach Boulevard and had done a very nice job. Staff recommended approval. Mr. Barretta was concerned that the Certificate of Occupancy named the contractor as Paradise Development LLC, but all the checks were written to Tucker Design Build. To approve payment, the board needed to know what the money was spent on. Checks without accompanying invoices were not satisfactory. Ms. Brooks responded when application is made, proposals are included from the various contractors on the job. This information was in the original grant package that was approved by the board. The information is also in the grant file at the CRA office. Mr. DeMarco was concerned also and expressed his intent to come by the CRA office to look at the grant file. Chair Heavilin expressed confidence in the job staff performs before the reimbursement requests are brought to the board for approval. Motion Vice Chair Tillman moved approval of the reimbursement of the Fa<;ade Grant to Ocean Chiropractic. Ms. Horenburger seconded the motion that passed 7-0. F. Approval of minor amendments to the Direct Incentive Program. Ms. Brooks recommended some minor changes to this program. It was originally designed to mold development behavior, but the results had not always been to the liking of the CRA, especially in regard to affordable housing and design. The suggested recommendations included a request to submit a development pro forma in the original application package. The burden of proof is on the applicant to show that the project could not be developed with the desired public amenities without subsidy. Motion Mr. Barretta moved approval of the suggested amendments to the Direct Incentive Program. Ms. Horenburger seconded the motion. Chair Heavilin commented the requirement for affordable units to be identified on a site plan with percentages of affordability levels (80%, 100%), along with the price of each affordable unit, was possibly premature. She did not think that developers were doing that at this stage. Ms. Brooks responded this would tell the CRA how the developer planned to move the units. They had seen problems with current projects where the affordable units were not being advertised or marketed and this is not satisfactory. The answer could be a simple statement from the developer, "We plan to work with the local Community Development Corporation to get qualified buyers." Ms. Brooks will be recommending that developers who have T.I.F. agreements with the CRA work with the CDCs to get qualified buyers. Ms. Horenburger asked who was not performing and Ms. Brooks responded, The Promenade. There are a number of units in that development per the T.I.F. agreement that are to be sold at a certain price. People have called and nobody at the sales office knows anything about those units. Attorney Spillias pointed out a modification that should be made to item one on the agenda request form for this item, item 1. After the words, "shall terminate this Agreement," add "it shall be of no further force and effect." Chair Heavilin said there was quite a discussion when the Incentive Agreement was initiated about the idea of having developers submit a pro forma statement and she sought Ms. Brooks' opinion on this. Ms. Brooks responded she had never seen the government give money for development without a development pro forma. 9 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Mr. Barretta amended his motion to include Attorney Spillias' comment and Ms. Horenburger agreed to the amendment. The motion passed 7-0. VIII. Old Business A. Review and discussion of the "Independent Accountant's Report on Applying Agreed- Upon Procedures" Robert Reardon, CRA Controller, introduced Linda Dufresne of Dufresne & Associates, CPA, PA, the CRA's independent auditor, who presented speCific observations shown in the draft procedural audit covering the period October 1, 2004 through May 31, 2005. Ms. Dufresne did not present the report, but responded to specific questions from the board as follows. One of the auditor's observations on credit card usage was turnpike toll passes where Mr. Hutchinson used his CRA credit card on a regular basis (2-3X a month). The auditor was not able to determine the destinations or whether a public purpose was served by the expenditure of these funds since there was no documentation associated with it. Another observation regarding credit card usage was expenses for which CRA personnel, for the most part Mr. Hutchinson, were reimbursed related to a weekend retreat held in Naples, Florida February 18 - February 20, 2005. Some other CRA personnel made expenditures on the CRA credit card for supplies, trophies, and similar items. The auditor observed personal use of CRA credit cards, all but one instance of which were eventually reimbursed to the CRA. The expenditures were primarily those of Mr. Hutchinson although one instance was found where the former controller had made a credit card expenditure for personal use, for which she subsequently reimbursed the CRA. Mr. Fenton spoke of this as "floating" and Ms. Dufresne agreed. She added that no documentation that disciplinary action had been taken was found and it is required in the CRA's policy manual. Mr. Fenton confirmed that no disciplinary action was taken because the board was unaware of it. Mr. Fenton inquired about the meals that were charged on credit cards that were not a part of the retreat and asked who charged them. Ms. Dufresne responded these expenditures were on Mr. Hutchinson's CRA credit card. This was in December. It was represented to the auditor that this was trips made to Naples to plan the upcoming retreat. Mr. Fenton asked for details on the purchase from a drug store listed in the draft report. Ms. Dufresne commented that a purchase for a prescription was supported by a purchasing credit card accountability form indicating the purchase of a camera. Conversation with the drug store confirmed the receipt was for the purchase of a prescription and not a camera. Ms. Dufresne had a copy of a note from the former controller who questioned Mr. Hutchinson about a designation of Rx on a purchase, but signed off on it when advised it was for a camera. Reimbursement was made to Mr. Hutchinson. Ms. Horenburger inquired about the meal expense reimbursements policy where no allowance shall be made for meals when "...travel is confined to the city or town of the official headquarters or immediate vicinity, except assignments of official business outside the traveler's regular place of employment ..." She asked for the dollar amount and/or number of meals charged inappropriately. Ms. Dufresne said there were frequent, almost daily, reimbursements for lunches and/or dinners charged to Mr. Hutchinson's CRA credit card. She did not recall the total dollar amount. If desired, staff could pull the credit card records and give the board a total. 10 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Ms. Horenburger stated another observation was made under Class C travel reimbursements required to be reported on a W-2 form. She asked how the board would know if these were being done properly. Ms. Dufresne remarked there should have been a payroll item reflecting those reimbursements as a taxable event to Mr. Hutchinson. They did not find any evidence that this occurred. Mr. Fenton asked whether Ms. Dufresne had asked the previous controller why this was not done. Ms. Dufresne did not because she was not employed during the term of the audit. The only thing Ms. Dufresne asked the former controller was whether she recalled writing the note about the prescription versus the camera because there were no initials and she wanted to be sure who had written the notes. Ms. Horenburger questioned the auditor's observations under Purchasing Policy requiring three verbal quotes for all purchases in the amount of $50 to $1,999, three written quotes for purchases in the amount of $2,000 to $9,999, and a formal bid process for purchases over $10,000. The draft mentioned the documentation provided did not support that the CRA was consistently adhering to the purchasing policy. She asked how many instances of this Ms. Dufresne had observed and whether she had any data on it. Ms. Dufresne stated they had tested 24 purchases and approximately 80% of them had not followed the purchasing policy. Ms. Horenburger inquired about journal entries from the draft report. Ms. Dufresne stated journal entries that do not go through a prescribed approval process create a climate where fraudulent transactions can occur. While observations in regard to this did not violate written policies and CRA procedures, the steps in correct journal entries would reduce the risk of fraud and were highly recommended. Ms. Horenburger commented on the portion of the draft report stating Ms. Dufresne's firm had not conducted an actual audit, but an analysis of the CRA's agreed upon policies and procedures. Ms. Horenburger wanted to see the board ask for an actual audit, the objective of which would be to obtain an opinion and further, to do a forensic audit. This audit only covered the period from October of 2004 through May of 2005 and she wanted to see an audit that went further back. Ms. Dufresne clarified that an agreed upon procedures report is what could be prepared in respect to a forensic investigation. There was not really an audit opinion that could be attached to a forensic investigation, because in a forensic investigation, they could not conclude that they found all instances. They could not provide an opinion on that. All they could do was point out the deficiencies they found. However, with respect to a financial statement audit, they would be giving an opinion that the financial statements present in all material respects, fairly, the financial position. The report provided was the type of report that attaches to a forensic investigation. Ms. Horenburger believed the draft report was telling the board of regular and egregious violations of the CRA's policies by the person who recommended the policies to the board and the board subsequently adopted. In regard to the comments in the newspaper about this being "nickel and dime" stuff, the nickels and dimes the CRA board deals with are taxpayers nickels and dimes and they did not like the CRA to casually spend its money. She was very upset about the report. Chair Heavilin said the report was a good tool and pointed out some areas of potential concern. She did not believe it was as serious as was just stated. It could be, but that is the reason they asked to address the concerns before they became any more serious. Mr. Barretta asked for the status of Mr. Reardon's mitigation plan. Mr. Reardon responded the mitigation plan was started; however, he was reluctant to pursue it until the board had seen the auditor's observations. With the new software, no purchase will occur without a purchase order. Each individual department head has been given a copy of the purchasing policy. In the future, if there is no purchase order, there is no purchase. If there is no bid, there is no purchase order. He or his staff will control the purchase orders. They have a policy against which to measure each 11 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 request for expenses above $500.00. CRA staff has taken the audit observations and comments seriously and now constantly asks, "What is the public purpose for this expenditure?" Ms. Dufresne found her statistics in regard to journal entries as follows: She found ten different journal entries relating to five types of deficiencies and two of them were listed as having various journal entries with the same problem. She confirmed that some number in excess of 50% were found to be deficient per the procedures. Ms. Horenburger said Mr. Hutchinson's response to questions in this audit was that there were flaws in the CRA policies. While this might be, there was no flaw in the policies that would allow someone to expect the taxpayers to pay for a prescription because they submitted a receipt for a prescription, claiming it was a camera they purchased. Mr. Reardon commented he would not be hesitant to bring to the board's attention any malfeasance on the part of any of the staff members. In regard to Chair Heavilin's question about what constituted a final report, Mr. Reardon indicated the draft report would become the final report because none of the points the auditor brought out were refuted or dismissed by the board. Ms. Dufresne said there was one change where a reference to a bank reconciliation was removed due to misinformation about the date the former controller left. The rest of the report stands. Motion Ms. Horenburger moved approval and acceptance of the Independent Accountant's Report on Applying Agreed-Upon Procedures". Vice Chair Tillman seconded the motion. Chair Heavilin was not comfortable with the word "approval" since there was no way the report could be proved or disproved. She accepted it, but couldn't approve it. She asked if Ms. Horenburger would consider changing that wording. Ms. Horenburger stated her motion was to approve and accept the report. The motion passed 7-0. IX. New Business A. Consideration of Direct Incentive Agreement for Affordable Housing, LLC With Regard to the Ocean Breeze Development in the Heart of Boynton Ms. Brooks made the correction that while Affordable Housing, LLCwas one of the joint venture partners, the applicant for the direct incentive was actually Boynton Associates, Ltd. Vivian Brooks, CRA Planner, indicated this project was located at the site of the old Boynton Terrace for which the CRA funded the demolition. The developer is applying for T.LF. incentives and forgiveness of the $350K demolition lien formerly paid by the CRA. Ms. Brooks requested the pro forma and reviewed it based on this being the first major project going into the Heart of Boynton. They wanted to see something of quality and a plan that met the requirements of the HOB plan, which was essentially a Floribbean style of architecture. The 3 BR, 2-1/2 BA fee simple town homes with recreation area and garages are intended to be owner-occupied. The initial plan was unacceptable and the developer was asked to have a metal roof, a more enhanced Seacrest frontage, and some nice signage for the project. Ms. Brooks believed the incentive was warranted and necessary to help the developer create the market for this product and produce an architecturally significant product in an affordable range. The developer offered to price all 84 units at 12 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 $280K but committed to the CRA's request for 10 units at $280K, which is Palm Beach County's new definition of affordable housing. This is significantly lower than any other project coming before the CRA at this time. The total impact to the CRA over ten years is $1.6M. Ms. Brooks recommended approval of the incentive. Ms. Brooks believed the developer truly needed the incentives. The CRA required the developer to have a standing seam metal roof per HOB schematics and this one item added $750K to the cost of the project. Ms. Brooks was not certain whether the $280K price point would hold in light of subsequent market conditions due to the hurricane and other issues. If the CRA moves forward with the project, the developer agreed to keep ten units at $280K and no higher, regardless of the market. The $350K for the demolition has already been expended. Mr. Myott suggested exploring the idea of trading forgiveness of the $350K demolition lien for ongoing homeowner association dues assistance. The T.I.F. over ten years is meant to cover the affordability aspect of the project. Mr. Barretta wanted assurances there were affordable units for a period of ten years. Ms. Brooks said when the agreement was drafted, she would recommend an actual lien against the affordable units to guarantee affordability. This would go away over time for the owner. Typically, this type of lien goes down the longer people stay. Sometimes it is ten, fifteen, or twenty years. This would be negotiated and brought back to the board for discussion and approval. Mr. Barretta asked Ms. Brooks if she had reviewed a marketing plan for the ten units, and she responded that she had not. Mr. Finkelstein (the applicant) had indicated that he had reservations for all the units. Mr. Fenton understood that the developer would not be able to "flip" the ten units. Ms. Brooks will request in the T.I.F. agreement that the H.U.D. closing statements are submitted to the CRA so the CRA would have proof the affordable units had sold at that price. Also, the CRA would lien the property to prevent "flipping." The ultimate protection was if the developer did not produce, the CRA would not have to pay the money. The people could realize equity growth, but not flip their unit and take the CRA's money to make money from public dollars. Mr. Myott felt time was of the essence on this project. The terms of forfeiture of the T.I.F. would need to be included in the agreement. Ms. Brooks felt that having the T.I.F. money "floating out there" for several years would make budgeting difficult. She felt the T.I.F. had to be for a time certain. Also, major site plan modifications would bring it back to the board for total review. Mr. Myott felt that expiration of the site plan would be sensitive also. Mr. Barretta asked what would prevent the developer from selling ten units at $280K and then selling the remainder at $380K. Ms. Brooks replied, nothing. Mr. Barretta asked why would/should the CRA give up the $350K lien spent by the CRA to demolish Boynton Terrace. It was anticipated at the time that the money would be recouped. Ms. Brooks commented that what the CRA wanted to attract in the Heart of Boynton was economic parity. Mr. Barretta suggested putting a cap on the sales price, and Ms. Brooks did not think that would be appropriate. The CRA had never done this and wanted to have economic diversity throughout the City. Mr. Barretta had a hard time giving up the $350K that had been earmarked for other things. Vice Chair Tillman agreed with Mr. Barretta's concern unless the $350K was tied into the actual reduction. He was envisioning T.I.F. over ten years with $350K at the end of it. If that was the case, he wanted to see an additional reduction on cost and maybe even take that $350K and do some sort of maintenance package for X amount of years. He was not comfortable with just giving away the $350K. Vice Chair Tillman said since there was a proposal before the board and since the board did control the $350K, he wanted to see the CRA maximize every effort to get the type of product it wanted and sustain it with the $350K. 13 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Mr. Fenton said the CRA didn't make a commitment - the City did and the CRA paid. He voted against it. Chair Heavilin said when the decision was made to pay the $350K for the demolition, the board decided it was in the interest of the community not to have those condemned buildings there. The sense of the board was that it would probably never see the $350K again. Ms. Brooks agreed, saying that when CRAs did land acquisition and so forth, they were trying to find a way to attract the private sector into developing areas that had been ignored by the private sector. In many cases, particularly neighborhoods that have been especially blighted, a lot of incentives were going to be needed. When they go out for RFP on the site on which eminent domain was just completed, the CRA would probably be looking at a major markdown of the property. The money might be recouped, but it would be over many, many years. Mr. DeMarco received assurance from Ms. Brooks that she had reviewed this project in concert with the CRA Director and City Planning staff. Ms. Brooks commented she had been involved in many meetings on it with the City Manager as well. It seemed to Mr. Myott that if the units sold on day one at $280K and the developer raised the price to $380K because he could, he was not an affordable developer, but a profiteer. If $8M comes into the developer's pocket, there is no way he should be entitled to $1.2 of T.LF. money in that case. Ms. Brooks said the agreement could be structured to read that it was based on a percentage of the units selling at the price stated in the application." In response to a question, Ms. Brooks stated the developer had represented in his application that all units sold in this project would be priced at the current cap on affordability, which is $280K. Mr. Myott asked if it could be said that they would all be kept at that price on an ongoing basis until sold out at $280K. Ms. Brooks would love to see that; however, the current T.LF. Direct Incentive Program was not structured that way. If a developer has 100% affordable, he would not get any more points for it. Chair Heavilin said with the rising cost of materials, no one could be held at a certain price. Mr. Myott felt the affordable price was constantly moving up and the agreement should be indexed to what was considered affordable by the agency setting the standard, i.e. Palm Beach County. Larry Finkelstein, 104 N. Federal Highway, Suite 102, Boynton Beach, Florida, came forward to answer questions. Ms. Horenburger asked Mr. Finkelstein what mechanism he had in place to see that people were not just investors who were purchasing units they would flip in six months or a year. Mr. Finkelstein stated this was difficult to do and this was not a complete affordable housing project. The program required an affordable element, which is what Ms. Brooks asked him to do - 10% or 8.4 units, and they agreed to do 10 units. They had reservations from three people for over 40 units, but they were thrown out. Their goal was to adhere to the intent of the Heart of Boynton Plan, which was to bring owner/occupants to the area. Various means of insuring this had been discussed such as deed restriction, which was the same thing Ms. Brooks was calling a lien. He would agree to have the 10 affordable units deed restricted for a reasonable length of time. He believed the CRA was in the process of drafting some kind of documentation answering this, but he did not know the status of that effort. Some of this would be covered in the homeowner association documents, but it was too early to draft them at this stage. Ms. Horenburger inquired whether the applicant would have gotten 20 points if he only agreed to have 10 affordable units. Ms. Brooks responded it was based on how affordable they were. When the T.LF. Direct Incentive Program was started, there was never any expectation that anyone would come forward with a totally affordable project; therefore, the maximum points would be 20. The maximum of 20 points was given because the developer stated they were all affordable. Mr. Finkelstein did not believe this was in his application, but might be in the backup. The CRA was not giving him $1.2M for an affordable 14 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 housing project. There was a whole program involved with different points and it was based on the entire package. The money was actually going to offset some significant upgrades the developer was required to do, but did not feel were necessary to market the project in this area. The metal roof alone was three times more expensive than a Fiberglas shingle roof, which would be more than adequate. The entire area has Fiberglas shingle roof except some commercial projects. The developer had added the roof, bumpouts on the front, garages for all, entry upgrades, and a whole list of items the CRA would be getting in exchange for the incentives, not just 10 units of affordable housing. With reservations for all of the units and over 200 telephone calls, it was difficult for Mr. Barretta to believe that human nature would not take over at some point when the developer would charge more for the units, just because he could. He asked for some kind of assurance this would not happen. Mr. Finkelstein said the CRA's program did not ask for that. Mr. Barretta responded the program did not ask the CRA to remove liens either. Since the developer was asking for incentives over and above the program, he wanted assurances the developer was not going to be enriched by raising the price of the units. Mr. Finkelstein felt the majority of people would need a lot of help and assistance to qualify to get into the units. Vice Chair Tillman wanted to see staff get together with the developer to work out a concrete mechanism by which they could reach agreement on this point. Attorney Spillias declared if the board were going to consider the resolution at this meeting, he was going to suggest changes. The changes were going to indicate they were not approving the monies specifically tonight. What they would be authorizing the attorney and the director to do was to negotiate a Direct Incentive Funding Agreement with the applicant to be brought back to the board for final approval. Using the Promenade Agreement as a template, the application would be made a part of the Agreement and, therefore, the commitments made in the application would be commitments that ultimately become binding commitments in the agreement. There were also mechanisms set forth in that Agreement for binding the units that are treated as affordable units to be affordable for a particular period of time. If the board wanted to move it forward but were not ready to specifically approve the Grant, they could work from the numbers. It had been scored, and if the board preliminarily accepted the scoring mechanism for purposes of negotiating an agreement, it could direct the Attorney and Director to negotiate an agreement they could bring back to the board with a staff recommendation. This could help move the project forward without making a determinative decision tonight. Mr. Myott said this was much different from the Promenade because in this type of development -- a neighborhood the CRA was trying to improve, there had to be limitations on absentee ownership and a strong effort to get residents in those units. He told Mr. Finkelstein it was a good-looking project and one he thought would be of huge benefit to the Heart of Boynton. There could be some more urban planning type information to see how it related to the neighborhood and what made it appropriate and the right thing for the first big project in the Heart of Boynton. He supported I,t but he did not want it to repeat the mistakes of other developers. D.R. Horton's advertising, for example, really limits what investors are allowed to do and that people have to occupy the units. Ms. Horenburger asked Mr. Finkelstein if the upgrades came anywhere close to $1.6M and Mr. Finkelstein responded, "absolutely." The roof alone came to $750K. Mr. Finkelstein said they had no objection to working out some of the details and their goal was to make the project owner occupied. Ms. Horenburger asked for the consensus of the board to tie the $350K lien forgiveness to ongoing maintenance. Motion Ms. Horenburger moved to authorize the Attorney and staff to negotiate an agreement with the applicant as outlined by the Attorney. Vice Chair Tillman seconded the motion. 15 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8,2005 Chair Heavilin did not know whether it was legal to use an incentive to offset association fees that were under the auspices of an association. Ms. Horenburger said it was not part of the incentive itself. It was part of the lien forgiveness. Ms. Brooks said it was included in the incentive to the developer. If the board wanted to move it out from incentive to developer and put it on deposit for the homeowner fees for the affordable units, she would have to defer to Attorney Spillias. Mr. Barretta said the lien forgiveness was not part of the T.I.F. incentive. Ms. Brooks agreed, but said if the developer were released from paying, it would be a benefit that would inure to him and she called it an incentive. Attorney Spillias said if the board wanted the $3S0K to be interrelated with continuing maintenance, they would look for a mechanism to make it happen. Chair Heavilin believed they had to look at the total project, not just the affordable aspect. They were asking this developer to do things they had not asked anybody else to do on the Direct Incentive Program. What she was hearing from staff and the applicant was that without this incentive, they could not do what CRA staff was asking them to do to comply with the HOB design guidelines. She felt it should be approved including the $3S0K. Mr. Finkelstein suggested if the CRA wanted, they could move the $3S0K off the property and lien the incentive package. Also, Ms. Brooks and he had talked several times about the upcoming bond issue and a buy down program. He offered to set aside those ten units and work with her on that program as well. If the board wanted to throw that into the mix, it was on the table as well. Ms. Brooks will bring the negotiated proposed agreement back to the board by the next meeting. Mr. Fenton felt it would be a mistake for the board to determine how much money a developer could make. He wanted to see some kind of mechanism using the Palm Beach County Index for affordable housing as part of the package. The bubble would not continue forever. If the index went down, that would be part of the deal. If it did not, that was all right also. The board agreed it did not need to see the project in detail at this time. The motion passed 7-0. A RECESS WAS TAKEN AT 9:01 P.M. THE MEETING RESUMED AT 9:10 P.M. B. Resolution 05-05 to Address the Salary Adjustment for the Interim Director Robert Reardon, CRA Controller, stated there was a typo in Section I of the Resolution. The dollar amount should read $93,500 instead of $96,305. The recommendation was to adjust the salary of the Interim Director to an amount equal to the duties and obligations of the position. This would be retroactive. Motion Vice Chair Tillman moved approval of a $93,500 salary for the Interim Director. Mr. Myott seconded the motion. At the request of the Chair, the Recording Secretary polled the vote. The motion passed 6-0 (Mr. Fenton was out of the room). 16 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8,2005 C. Resolution 05-06 to Establish 401(a) Contributions for Salaried Staff Robert Reardon explained that the International City Manager's Association Retirement Corporation (ICMA-RC) would administer the agency's 401(a) program. This Resolution is the mechanism establishing contribution amounts for salaried staff. Motion Ms. Horenburger moved approval of Resolution 05-06. Vice Chair Tillman seconded the motion. Mr. Myott asked for an explanation of this item. Were they talking about allowing staff to contribute to one? Was there matching and if so, what percentage was matched? He also asked about the form associated with this with the blank spaces. Mr. Reardon explained there were two plans: 457(b) and 401(a). The 457(b) is at the initiative of the employee; the 401(a) is the compensation from the CRA as a contribution to the employee. Both plans are in addition to salary for staff. Mr. Reardon said the board was to consider the amounts for a contribution level and those amounts had to be equal - one person cannot be treated differently than another. It could be done by dollar amount or percentage. Attorney Spillias commented this was usually done by percentage. Ms. Bright suggested tabling this item pending the results of the HR classification and pay study, since potentially higher salary levels might influence the board's decision about percentages. Motion Vice Chair Tillman moved to table Resolution 05-06 to establish 401(a) Contributions for Salaried Staff until the next regular board meeting. The motion passed 7-0. D. Resolution 05-07 to Establish Per Diem Travel & Mileage Reimbursement Mr. Reardon declared this was one of the responses to the draft audit of policies and procedures just heard. It was meant to set the per diem rate and the mileage rate for travel reimbursement on Class A travel, which is travel outside of the immediate vicinity. The per diem rate was established by the board by consent in the past; however, the auditor's opinion was that it should be done by Resolution. Mr. Reardon combined the current policy level for per diem rate with the Internal Revenue Service benchmark for mileage. When the IRS benchmark changes, the policy/resolution would also change. This item is meant to cover staff and board members alike. He apologized for his oversight in not including the board members on the resolution in the agenda packets. Wherever the Resolution said staff, the words and/or board members should be added (Sections 1 and 2). This also affected the heading of the Resolution. Mr. Barretta asked about City Commissioners who were invited by the CRA to travel and whether they would be included in this. Attorney Spillias will research that and report back to the board. Mr. Reardon commented that a separate resolution could be drafted at a later date if it were determined to be desirable and legally correct. Motion Vice Chair Tillman moved approval of Resolution 05-07 to Establi.sh Per Diem Travel & Mileage Reimbursement for CRA staff and board members as amended. Mr. Fenton seconded the motion that passed 7-0. E. Consideration to allow CRA staff to opt out of major benefits and potentially receive 50% of the savings in return Mr. Reardon indicated this item was being withdrawn for further investigation by Legal staff. 17 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Chair Heavilin did not know whether it was legal to use an incentive to offset association fees that were under the auspices of an association. Ms. Horenburger said it was not part of the incentive itself. It was part of the lien forgiveness. Ms. Brooks said it was included in the incentive to the developer. If the board wanted to move it out from incentive to developer and put it on deposit for the homeowner fees for the affordable units, she would have to defer to Attorney Spillias. Mr. Barretta said the lien forgiveness was not part of the T.I.F. incentive. Ms. Brooks agreed, but said if the developer were released from paying, it would be a benefit that would inure to him and she called it an incentive. Attorney Spillias said if the board wanted the $350K to be interrelated with continuing maintenance, they would look for a mechanism to make it happen. Chair Heavilin believed they had to look at the total project, not just the affordable aspect. They were asking this developer to do things they had not asked anybody else to do on the Direct Incentive Program. What she was hearing from staff and the applicant was that without this incentive, they could not do what CRA staff was asking them to do to comply with the HOB design guidelines. She felt it should be approved including the $350K. Mr. Finkelstein suggested if the CRA wanted, they could move the $350K off the property and lien the incentive package. Also, Ms. Brooks and he had talked several times about the upcoming bond issue and a buy down program. He offered to set aside those ten units and work with her on that program as well. If the board wanted to throw that into the mix, it was on the table as well. Ms. Brooks will bring the negotiated proposed agreement back to the board by the next meeting. Mr. Fenton felt it would be a mistake for the board to determine how much money a developer could make. He wanted to see some kind of mechanism using the Palm Beach County Index for affordable housing as part of the package. The bubble would not continue forever. If the index went down, that would be part of the deal. If it did not, that was all right also. The board agreed it did not need to see the project in detail at this time. The motion passed 7-0. A RECESS WAS TAKEN AT 9:01 P.M. THE MEETING RESUMED AT 9:10 P.M. B. Resolution 05-05 to Address the Salary Adjustment for the Interim Director Robert Reardon, CRA Controller, stated there was a typo in Section I of the Resolution. The dollar amount should read $93,500 instead of $96,305. The recommendation was to adjust the salary of the Interim Director to an amount equal to the duties and obligations of the position. This would be retroactive. Motion Vice Chair Tillman moved approval of a $93,500 salary for the Interim Director. Mr. Myott seconded the motion. At the request of the Chair, the Recording Secretary polled the vote. The motion passed 6-0 (Mr. Fenton was out of the room). 16 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 C. Resolution 05-06 to Establish 401(a) Contributions for Salaried Staff Robert Reardon explained that the International City Manager's Association Retirement Corporation (ICMA-RC) would administer the agency's 401(a) program. This Resolution is the mechanism establishing contribution amounts for salaried staff. Motion Ms. Horenburger moved approval of Resolution 05-06. Vice Chair Tillman seconded the motion. Mr. Myott asked for an explanation of this item. Were they talking about allowing staff to contribute to one? Was there matching and if so, what percentage was matched? He also asked about the form associated with this with the blank spaces. Mr. Reardon explained there were two plans: 457(b) and 401(a). The 457(b) is at the initiative of the employee; the 401(a) is the compensation from the CRA as a contribution to the employee. Both plans are in addition to salary for staff. Mr. Reardon said the board was to consider the amounts for a contribution level and those amounts had to be equal - one person cannot be treated differently than another. It could be done by dollar amount or percentage. Attorney Spillias commented this was usually done by percentage. Ms. Bright suggested tabling this item pending the results of the HR classification and pay study, since potentially higher salary levels might influence the board's decision about percentages. Motion Vice Chair Tillman moved to table Resolution 05-06 to establish 401(a) Contributions for Salaried Staff until the next regular board meeting. The motion passed 7-0. D. Resolution 05-07 to Establish Per Diem Travel & Mileage Reimbursement Mr. Reardon declared this was one of the responses to the draft audit of policies and procedures just heard. It was meant to set the per diem rate and the mileage rate for travel reimbursement on Class A travel, which is travel outside of the immediate vicinity. The per diem rate was established by the board by consent in the past; however, the auditor's opinion was that it should be done by Resolution. Mr. Reardon combined the current policy level for per diem rate with the Internal Revenue Service benchmark for mileage. When the IRS benchmark changes, the policy/resolution would also change. This item is meant to cover staff and board members alike. He apologized for his oversight in not including the board members on the resolution in the agenda packets. Wherever the Resolution said staff, the words and/or board members should be added (Sections 1 and 2). This also affected the heading of the Resolution. Mr. Barretta asked about City Commissioners who were invited by the CRA to travel and whether they would be included in this. Attorney Spillias will research that and report back to the board. Mr. Reardon commented that a separate resolution could be drafted at a later date if it were determined to be desirable and legally correct. Motion Vice Chair Tillman moved approval of Resolution 05-07 to Establish Per Diem Travel & Mileage Reimbursement for CRA staff and board members as amended. Mr. Fenton seconded the motion that passed 7-0. E. Consideration to allow CRA staff to opt out of major benefits and potentially receive 50% of the savings in return Mr. Reardon indicated this item was being withdrawn for further investigation by Legal staff. 17 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 F. Consideration of "As-Needed" Contract with Douglas C. Hutchinson and Accompanying Resolution 05-08 Mr. Reardon stated this Resolution had also been amended and he deferred to Interim CRA Director, Lisa Bright. Ms. Bright announced that during the previous month, the board directed CRA staff and Attorney Spillias to begin negotiations with the former Executive Director, Douglas Hutchinson, on a consulting contract. She explained that the hurricane had intervened and prevented negotiations from taking place in a timely fashion. On the night before this meeting, Ms. Bright and Attorney Spillias met with Mr. Hutchinson and came up with a mutually agreeable consulting agreement that she forwarded to the board members on the day of this meeting via E-mail and distributed to them at this meeting. The draft consulting agreement would cover a 60-day period for consultations as needed. There was a per diem retainer to allow staff to discuss a variety of topics related to Mr. Hutchinson's work at the CRA as well as focus on project-specific items where Mr. Hutchinson's knowledge, expertise, and contacts could be helpful to the CRA. Ms. Bright sought discussion, questions, and comments from the board. Attorney Spillias outlined the changes from the current draft agreement. In summary the changes were: 1) a method of creating a protocol for communication back and forth, 2) the responsibility of Mr. Hutchinson for his own office and telephone, 3) further definition of what would constitute a conflict of interest, 4) changing the rate charged from $46.30 to $85.00 considering overhead,S) payment of $3,400 a month as a retainer, 6) requirements for invoicing and ceiling of $8,025 on billable hours, 7) out-of-pocket expense reimbursement at .485 cents per mile for meetings out of Boynton Beach, 8) that the contract is subject to termination in writing with or without cause by either party with five-day written notice. Attorney Spillias then outlined the changes from the draft Resolution 05-08 in the agenda packets and the corrected version which were, in summary: 1) contract term of 60 days, unless amended by consent of both parties. Attorney Spillias declared Mr. Hutchinson was present and all items he discussed in regard to the contract and resolution were discussed and agreed to on the night before this meeting. Douglas Hutchinson, former Executive Director, answered questions from the board, stating: "I have not responded to .......shots being taken at me personally, because I do not choose to get down into that level. I'll let my record stand on its own and any audit that I go through, quite frankly. I think the CRA has done a lot of good work here. I think people want reassurance that there will be continuity of the programs even with new staff and I hope that is what I can help provide. Quite frankly, I'm proud of the work I did here and it would be a shame to see that go by the wayside." Chair Heavilin sought comments or questions from the board. A lengthy discussion ensued. Some board members were in support of retaining Mr. Hutchinson's services under the contract terms and others were not. Some, including the Interim Director, expressed the belief that Mr. Hutchinson's knowledge, expertise, and contacts would be very useful to the CRA at this transitional time. Others felt the current staff was professionally capable of managing the job on its own. Some believed the credibility of the CRA in regard to professional ethics and standards had come under fire from the observations of the audit into the CRA's policies and procedures and did not wish to continue the association. Motion Ms. Horenburger moved approval of the consulting contract as amended and that expenses shall be given in advance by prior approval. Mr. Myott seconded the motion. 18 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 At the request of the Chair, the Recording Secretary polled the vote. The motion to approve the consulting contract for Mr. Hutchinson and its associated Resolution failed 3- 4, Ms. Horenburger, Vice Chair Tillman, Mr. Fenton, and Mr. Barretta dissenting. E. Consideration of HR Recruitment for a Planner F. Consideration of Implementing a Mechanism for Employee Recognition and accompanying Resolution 05-09 G. Consideration of a Boynton Beach CRA Cellular Telephone policy Due to the lateness of the hour and the length of the agenda, the board made the following motion. Motion Ms. Horenburger moved to postpone New Business Items E, F, & G. Vice Chair Tillman seconded the motion that passed 7-0. H. Consideration of the Underwriter for Bond Issue #2 Mr. Reardon called for the board to use the RFP for bond underwriting that was won by Bank of America in December of 2004. The Agency and its fiscal agents would then be able to go to the market in December of 2005. If the Agency can use the Bank of America's RFP, which is not more than 10 months old, it could quickly seek funds for Bond #2. The Agency might then be able to minimize the increase in interest rates that seem to be on the rise. Having 1% to 1.5% interest rate on a bond issue of over $10M would amount to sizable savings. Mr. Fenton did not know the board had approved the bond issue. Ms. Bright stated it was to be a topic before Hurricane Wilma, but she was trying to save the City money. It was up to the board, but she had been working closely with Mr. Bressner on this. If the board wanted to slow it down, they should give her direction to do so. Mr. Fenton asked if Bond #2 would bring the total indebtedness on the CRA up to $28M including the loan and Mr. Reardon responded, to about $30.4M. Mr. Fenton wanted to wait for an audit first. A clarification was made that the Bank of America RFP was actually not more than 11 months old. Ms. Horenburger was concerned about the bond because projects had not yet been identified. Mark Raymond, fiscal agent for the eRA, came forward to answer questions. He stated he had gone to the City Commission meeting a month previously believing he was going to talk to them to ascertain whether they were interested in guaranteeing the bond issue like they had done the previous year. This guarantee would allow the bond insurance company to charge a much lower premium than they would otherwise charge, translating into a better bond issue for the CRA. Mr. Raymond indicated the issue had not been taken up as expected at the City Commission meeting. His communications with Mr. Bressner led him to believe there should not be a problem with the City Commission approving that, but they were not scheduled to ask the City Commission again until December 6. Mr. Raymond declared they had a schedule worked out that would allow the financing to be completed if the board wished to this year. There was an advantage to that. They were in the same situation they were in the previous year. If the bond were closed this year, it would not "count" against an amount of bonds the City of Boynton Beach is allowed to issue each calendar year. There is a $10M limit on this. The City used that up this year so the advantage does not exist in 2005. If the CRA bond issue occurs in 2006, it would "eat into" that availability - it would cost the City money to do it next year. If they were going to complete the bond issue in 2005, they needed to know which underwriting firm the board wants to use. They could then start producing the documents. This deal would be exactly like Bond issue #1 the previous year with the Bank of America. The board's financial advisor, Julie Turner, reported to Mr. Raymond the Bank of America was willing to work for exactly the same thing they did on the last bond issue. The size of the contract is $60K. This could be bid out and someone might do it for less, but 19 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 the scale would be from $0 to $60K. It is the recommendation of Ms. Turner and Mr. Raymond that it would be in the financial interest of the CRA and the City to use Bank of America again, start preparing the documents, and come back to the board on December 13 and ask for formal approval at that point in time. The bonds would not have been sold yet, but they would be ready to market the bonds the next day if the board said to go forward. If the board said not to go forward, the deal would be off. Nothing would be owed to Mr. Raymond or the Bank of America. Ms. Bright commented Mr. Reardon had prepared a budget for the board outlining the projects given at the budget workshop for Bond issue #2. She referred to the agenda packet tab entitled "Bond Projects Fund," where it explained concisely what the money would be slated for. Chair Heavilin indicated the board did not have to approve the bond issue at this meeting. The Interim Director was trying to move the issue forward in the best financial interests of the CRA and the City. Vice Chair Tillman noted the bond issue was tied to the Heart of Boynton approval process. Chair Heavilin expressed the belief that the CRA would not be able to do what it had committed to do in the Heart of Boynton without this bond issue. Ms. Bright agreed, saying there was supposed to be a Joint CRA/City Commission workshop on October 24 which would have outlined the Heart of Boynton initiatives that were governed under the $3.2M being requested for affordable access programs in that area. The City Manager advised this meeting would be held the first week in December. Motion Vice Chair Tillman moved approval of negotiations for underwriting on issuance of Bond #2. Ms. Horenburger seconded the motion. Mr. Raymond, Julie Turner, and Attorney Spillias will work with the Bank of America to put together the Prospectus for the bond issue. At the CRA meeting of December 13, 2005, the board could adopt a resolution that delegates to the Chairperson the authority to sign a contract with Bank of America agreeing they will underwrite the bonds as long as what they agree to is within certain parameters that the board establishes. The next day they would go into the market with the bonds and if the conditions were right, the bonds would be sold that day. All that happened so far was to tell the fiscal agents whom they wanted to work with on this. Mr. Myott asked Mr. Reardon if he had seen anything in the budget or finances that would limit the CRA or cause concern about the acquisition of these bonds. Mr. Reardon responded that with the bond funds, he was more comfortable with some of the pledges the former director made and the incentives owed by the CRA. For example, the CRA owes the City $1.6M for the Hall property. Ms. Bright commented the negotiations for that were ongoing and it could be almost $5M for the Marina, so there was another million she was not confident was budgeted in 2004-05. Ms. Bright also needed to speak with the representatives of the Arches project to find out when the $2M incentive was due. There were a lot of dollar delivery promises with no dates or encumbered funds. The motion passed 7-0. X. Board Member Comments The board members engaged in a lengthy discussion about the observations of the application of agreed to procedures audit, Mr. Hutchinson's actions, and their feelings about both. If the observations of the auditor were correct, various board members expressed disappointment in Mr. Hutchinson. Others felt that absent Mr. Hutchinson's rebuttal, the observations of the auditor could not be proved or disproved. Mr. Myott in particular expressed a desire that when something of a serious nature became known to a board member, it should be brought before the full board for full discussion and disclosure. The opinion was expressed that orchestration by third parties and second-hand information played a part in the matter and was inappropriate. There was an atmosphere of forgetting the past and looking to the future. 20 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Interim Director Bright declared that staff was working together as a management team and trying to create checks and balances in the accounting and operational procedures and among staff. Mr. Reardon was handling all the accounting for Human Resources and Ms. Bright was going to handle the staffing. They were trying to split duties so there could be a depth of supervision, management and oversight. Ms. Bright thanked staff for being so supportive and pulling together in a really great team effort. They were having regular staff meetings and getting familiar with what they were doing. They invited board members to participate in these meetings if they so desired. Mr. Fenton asked Ms. Bright when she would be starting the one-on-one meetings with the board members, and she responded she would be chatting with each board member to determine this. Ms. Horenburger mentioned that some members might wish to have meetings by telephone also and this was her preference. Chair Heavlin commented there would be eleven Public Hearing items at the meeting in December. She suggested that the CRA handle the Public Hearing items at the first meeting of the month and address the CRA items at the third Thursday continuation meeting. There was consensus on this point, but Ms. Bright said this would be gated by Planning & Zoning requirements as well. Mr. Barretta noted there had been a lot of things he wanted to discuss tonight. When the board asks questions, they were often told they would be given an answer by CRA or City staff and some of them had fallen through the cracks. He planned to bring them up and asked for time at a meeting to do so. Ms. Bright said that as a City in a growth mode, they needed to come up with a standard two meeting a month schedule. She asked for the board members to think about this and she would bring it up at the next meeting. Time will be allowed on the agenda for Mr. Barretta to have his questions answered. They could also discuss operational issues that made sense from an efficiency point of view. She was working with Attorneys Spillias and Dukes to streamline the agenda. If she could eliminate the individual numbering of the pages, she felt this would be more efficient. Chair Heavilin recognized Attorney Spillias' comment about allowing the board to speak at any time during the meeting, but suggested that if presentations were given first, many of the questions could be answered during them. The interruptions were slowing the board down. Vice Chair Tillman felt this was under Chair Heavilin's control and she indicated an intention to intervene more in future. Ms. Horenburger said if everyone read their agenda packets, the detailed information they ask questions on is already in the agenda backup. Chair Heavilin encouraged board members to attend workshops because a great deal is discussed at them. XI. Monthly Report to the Board Ms. Bright said the report was in the packets and she would answer questions if desired. She had changed the format for it. Staff was now required to identify all the projects they had worked on so the board knew what staff was doing for the board and the community. XII. Legal Attorney Spillias asked those who recuse themselves on an item to do so before the item is discussed and to refrain from participating in the discussion. Mr. Barretta asked him to clarify this and Attorney Spillias said this was because once a person recuses himself or herself, they are not supposed to use their influence to affect the outcome. Attorney Spillias advised the board he had received a Subpoena on the JOHN J. HOECKER and N. KENT WILMERING in their derivative capacity as members/stakeholders on behalf of BOYNTON OCEAN, LLC, a 21 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida November 8, 2005 Delaware limited liability company and nominal defendant; F. DAVIS CAMALIER, and individual, TREVOR OSBORNE, an individual, and ONE BOYNTON, LLC, a Delaware limited liability company case. The Subpoena required him to provide all documents, e-mails, notes and so forth regarding that project. He examined it from the standpoint of any privileged material that might be there and he did not believe there was any. The information he had was not acquired in contemplation of litigation, so it was basically public record. He wanted to make the board aware of that in case anyone objected. However, he felt he was legally obligated to provide the information and had to respond before the board's next meeting. Mr. Marc Raymond, Lisa Bright, and Jonathan Ricketts also received this Subpoena. XIII. Other Items - None XIV. Future Agenda Items A. Workshop Meetings to be held on the following dates: 1. Thursday. November 17 at 6:30 p.m. (TBD) . Consideration of the Results of the HR Study XV. Future Project Preview - None XVI. Adjournment There being no further business, the meeting properly adjourned at 10:25 p.m. Respectfully submitted, ~lAA~-( Susan Collins Recording Secretary (110905) 22