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Minutes 06-18-76MINU~S OF SPECIAL CITY COUNCIL MEETING OF THE CITY OF BOYNTON BEACH, FLORIDA, HELD IN CITY HALL, FRIDAY, JUNE 18, t976 PRESENT Joe ~Long, Mayer Edward F. Harmening ,. Councilman Emily M. Jackson, Councilwoman Norma~ F. Strnad, Councilman Fra~kKohl, City Manager Rbbert B. Reed, City Attorney Tereesa Padgett, City Clerk Mayor DeLong called the meeting to order at 4:30 P. M. and announced itwas a calle~ special meeting by the Mayor i~ ac- cil. He the~, requested that background information be given co~rmimg why two resolmtions were proposed. Mr. to the City Co,mucil adopting a resolution in the sale of revenu~ bonds in the amour of 6.5 The first phase for 2..6 million dollars has already beem issmed a~d sold..The proposed Resolution No. 76-HH relates to the second phase of 3.9 millmon dollars. Alternate A City to issue and sell bonds on the ~asis Of a?ubl~c sale. to use in conme~ti0n-with s amd re~empt~m regarding the possi~ie ~ri~ate bo~ds. These bonds are being that the buds would be Hough & the sale on le~ in 40 days or on or before J~ly 20. I to ~0, which means they would not for a public to let the bid on the of ~the con- B were presented. Mayor the them and B a~d B. Strnad Kohl pies for members had received ha~ identified he A Verslons~ During Mr. Kohl's absence, ~. Shepar~ tol~ about his interest in the Boynton Beach Bicentennial Film and how ~e planned to ~ake arrangements to rem~ Ut to sh~w to peop!~ i~ New York own- ing Boynton Beach bonds. He commended the City on this project. MINU~ES - SPEOIAL CITY COUNCIL MEETING BOYNTON BEACH, FLORIDA JUNE 18, 1976 Mr. Kohl returned with the copies and distributed them. Mr. ghepard stated he thought the place to start was where they left off the other night where he was instructed to go back and be ready to present their ideas and the status of the bomd issue and give whatever informa%ion he could about the resolu- tion. He added that he would tell the Council what they think, hut the responsibility for making the decision rests with the Goumcil. He them read the attached memo listing the points to consider. Mr. Shepard added that they were keeping a r~ning file of what is going on in the U. 3. as to the percentage of mu~icipal bonds sold. In years past, the ame~mt of bonds sold at private sale were 20 to 3G%. For the past five months, the percentage ef bond sales have been 45% at private sales. He explained how they made the proposal in association with five to si~ firms. Also, they spent yesterday a~d today mpdating the official statement by working with the City Finance Director~ He then complimented the City on their records. Mayor DeLong asked what the amem~t of interest w~ they were offering? Also, what was the last offer they made a~d the City accepted when they previously had private negotiations? ~. Shop,rd replied it was 7.07. He continued that the proposal of today is 99 cents on 1 dollar on the bonds. The met inter- est cost of this proposal getting the effect of the discomnt is 6.404, which represents a complete ringing out of this group. M~yor DeLong asked what the going price on the~m~rket was of yesterday? Mr. Shepard passed out a ~tabulation sheet showing things in the market this week. He added that this sheet re- presents a number of sales in Florida in the last 30 days. He referred to the fifth column being very short A rated bonds and the more comparable ones being in the last four. He re- ferred to the municipal bond bar interest and read how it was different for every week. He pointe~out how it did not indi- cate a~y trend. M~. Shepard then pointed out that the important ~art of the pro- posal was that it did not call for a~y specialbbanking relations en their part. It leaves it in the hands of the City Council and Finance Director as to what they do with the management of in- vested funds a~d paying agent. They do assist the City in ar- riving at prices for the proposals. Mr. Shepard then passed out a blank copy of the formal proposal and stated the information to be filled in the blanks. He added with reference to No. IO~ the official statement would have to have a paragraph referring to the Pratt situation, but will not affect the legality of the bonds. After reading No. 12, he added that he was a little worried about the status of printing the bonds and the official statement. He has commitment from the printer that the official ~tatement will be done by Tuesday of next week. They have submitted the bond proof without cou- pons to the prin~ing firm and have been given assurance that delivery will be by July 1. -2- MINUTES - SPECIAL CITY COUNCIL MEETING BOYNTON BEACH, FLORIDA JUNE 18, 1976 At this time, ~ayor DeLong opened the floor to the members of the Council for any questions they desired to ask. ~e also asked if the members were in agreement with the proposal made? ~s. Jackson referred to the letter given them and the last thre lines referring to public sale, which were not quite c to her. Mr. Shepard replied that they were just pointing out that on any type of public transaction where yom have a com- mitment or statement from a lawyer which says he is willing to close the transaction now or an a particalar date. Until the tranmactien iscclosed, it isnot closed. He explained how there was the possibility the attorney may change his mind. It is Sust a consideration. Mr. Reed asked if Hough & Co. had made a~y forecasts as to the trend in interest rates in three to four weeks from now and Mr. ~hepard replied that they had notknowledge or firm convic- tion, the market can go up or down. He added that there were times when they did h~ve a feeling about the market improving, but have ne feeling about whether the market will be better or less favorable. They can only took at history and say the sit- uation is be~ter now ~han a short time ago, but not as good as it Was in January or February, but better than last year. D~r- lng five YearS, Florida municipal bonds may move from 6.40 today and the lOWest they would have emjoyed would be 6.35. He ex- plained that their business was to help put things together in the best way t~ey can an~ try to meet the ~emands of their clients when theyaee~ the money. ~. Reed referred to them being the City's fiscal consultants and exoerts in m~micipal finance and asked if there were any advantages to selling at public sale and Mr. SheDard replied that it could be argued that it ts_kes lees conrage. Mr. Reed asked if there was any reason to sell these particular bonds at public sale and Mr. Shepard replied that he didn,t see any rea- son. May~r DeLon~ clarified they were moving this way to meet the requirements of the 40 day period and N~. Shepard replied that even if there wasn't that pressure, the facts would be the same. He further explained how there was no way to put these bonds intothe market at a high interest rate and referred to the rates of other cities. Mayor DeLong asked how the other members of the Council felt? Mr. Strnad referred te not being an expert in financial matters and re~meSted the Finance Director to give ~is o~in~em~ ~r. Krih~s stated personally he could see nothing in it which, would affect ~heir decision. They must consider whether this interest rate is the best the City cam procure. Mayor DeLong asked if it was in the ball park and Mr. Kribbs replied: yes. Mr. Strnad thanked him for his opinion. Mrs~ Jackson and Mr. Harmening added that they had no questions. -3- MINUTES - SPECIAL CITY COUNCIL MEETING BOYNTON BEACH, FLORIDA JUNE 18, 1976 Mr. Reed referred to being requested to research and give~ an opinion with reference to the 40 day period in which construc- tion bids must be awarded and the effect of the 40 day period on the Council's decision. His opinion is if the City were to award the bid for the construction work on July 20 prior to havimg in hand the proceeds from the sale of these bonds, they would not stand in pessession of liability to the successful bidder as long as the Council disclosure had been made to the tow bidder and as long as they provided sufficient safeguards in the contract to be executed. He does not want anybody to feel awarding of the sonstruc~ion bid should influence their decision with regards te public sale. Mayor DeLomg referre~ to a private sale an~ considering the condition of themarket a favorable percentsge by the fiscal agents. hew the last saie at 7.07 was a considerable sav- ing. the i~surance Bid with the savings. This and he has always been an advocate elf the in this particular instance cam see the benefit the recommendation of the fiscaI agent. At this time, Mayor DeLong requested Mr. Reed to read Resolu- tion No. 76'HH~. Alternate B. Mr. Reed rea~ propose4 Resolution No. 76-MM. Mr. Strnad moved for the adoption of Resolution No. 76-NH, ~econded by Mr.'Harmening, Mrs. Padgett took a roll call vote as follows: Councilman Harmening - Aye Councilwoman Jackson - Aye ~ouncilman Strnad Aye Mayor DeLong Aye Motion carried 4-0. Mayor DeLong announced that a motion was in order to have the proper City officials execute the agreement with Wm. R. Hough & Co. Mr. Strmad so moved, seconded by Mr. Harmening. Mrs. Padgett took a roll call vote as follows: Councilman Harmening - Aye Councilwom~n Jackson - Aye Councilman Strnad - ~je Mayor DeLong - Aye Motion carried 4-0. Ad$ournment Mrs. Jackson made a motion to adjourn, seconded by Mr. Harmening. Motion carried 4-0 and the meetingwas properly adjourned at 5:3~ ~. M. 1.Uilli m l ou_ h & Co. June l8, 1976 Points to consider regardiu9 the acceptance or rejechion of tc~ght's offer to purc/~ase the $3,900,000 Bol;nton Beach WateI and Sewer Rev~r~L~ Bonds. 1. In%erest ra~es today are favorable although they are slightly higher than they were the earlier part of this w~ek. By the ~ the public sale of the ~nds is conducbed (3 to 4 weeks aw~y) they m~y rise or go down. We have no crystal ball in this respect, hG~ever~ we have no reason to t~_lieve that they will be ar~ t~ore favorable frc~ the City's standpoint than they are today. 2. By a sale of the bends tonight, the City would be able bo plan on a closing of the transaction, fer cash ~y the end of tl~ ~onth, and therefor make an award well he_fore the expiration date of the construction contract it has in hand (July 20, 1976), without having to make the award subject to funds b=~ng av~iTable at a later date. 3. A public sale will re~ire additional ~ in that we would have to reapply for and wait for a recc~niL~nt of the MBIA insurance_ The same would also apply to a reestabl.~hn~nt of the ~ond ratings. ~ sate date should not be set unl-il we have %b~se rec~vmi~ts. We should ~l~o allow ten to fourteen days ~ t33~ for adverhis~h or'the public sale in the Daily Bond Buyer in New Yolk. This advertisem~nh for the bend sale should'~ notice as to whether or not the MBIA ~ce cc~a~'ttn~_nt is available, also. The extra time needed for the public sale would likely result in a sale date of about Ju/ly 15, ~Imich would be the .dat~ the interest rate would be set for the loan (as opposed to a sehtin9 of the interest rates today if Bough's proposal is accepted). 4. The most optimist/c date than for a ~oney closing at a public sale would be about August 10. It should be pointed out that at the present time ~~e have a pretty finn cuaaittment frGn bond counsel that they will give their unqualified ~Pr~On as to legality of the bends and a separate opinion to the effect that the th case as it nG~ stands does not constitute litigation affectin9 the legality of the bends. It is assun~d that they will render these opirklons at the ~ of a Closing provided there is no change in ~Geir thinking bet~en now and a closing, whether such a closing be a public or a private sale. The closing on August 10 as opposed to July 1 however, does increase the time during wkich anything might happen to change ever so slightly the present ~ of bond counsel. M~TES - SPECIAL CITY COUNCIL MM, ETING BOYNTON BEACH, FLORIDA JU~E 1 8, 1976 CITY OF BOY~ON BE~AGH, FLORIDA BY ~ity Clerk Respectfully submitted, Suzanne Kruse Recording Secretary (Two Tapes) 'or ~~~~ember Member ~ff~*~~~ ~uncil Member ~ -5-