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Minutes 10-30-73MiNVdTES OF THE SPECIAL MEETING OF THE CIT~Y COUNCIL OF THE CITY OF BOYNTON BEACH, FLORIDA, HELD AT CITY H~J~L, T~ESDAY, OCTOHER 5~, 1975 ~.T 4:00 PRESENT Emily M. Jackson, Mayor Joe belong, Vice Mayor David Roberts, Councilman Forrest L, Wallace, Councilman Edward F. Nmrmenirz3, Councilman ABSENT Tereesa Padgett, City Clerk Prank Kohl, City M~nager Ernest G. Simon, City Attorney Mayor Jackson called the Special Meeting of October 30, 1975 to order at 4:02 P.M. It was noted that Mr~ Simon and Mr. Harmening had not yet arrived. It was decided to hold off the reading of the Emergency Ordinance un- t-il the arrival of the City Attorney. Ordinance No. 73-44 r 2nd Reading~ Re Bancshares of America Mr. Kohl read Ordinance No. 73-44 ~n second reading by caption only: An Ordinance of the City of Boynton Beach, Florida, Extending the Municipal Territorial Limits of Said Mur~cipality by the Annexation of a Certain Unincorporated Tract of Land Containing Less than Ten Registered Voters, Lying Contiguous Thereto and Within Palm Beach County, Florida, etc. Mr. Wallace moved to adopt Ordinance No. 73-44 on se'cond reading, seconded by Mr. Roberts. Under discussion, Mr. DeLong said under the new Home Rule laws, Section 166.041, sub-para~aph 4, a roll call vote must he taken by the City Clerk in alphabetical order rather than the Chair putting the motion to the body, and then the Chair will announce the results of the roll call. In the absence of the City Clerk, Mr. Kohl conducted the roll call vote as follows: Councilman Roberts - Aye Councilman Wallace Aye Vice Mayor DeLong - Yes Mayor Jackson Yes Motion carried 4-0. Mr. Harmeninghad not yet arrived. For the record, Mr. Kohl noted that the proof of advertising back-up material was in Council's file. A~9~eem~to~_De~cembe~r 13, 196% - Mayor Jackson Mayor Jackson said there was some question as to whether or not the City should continue this ag-~eementwith Developers, R.C.R. Corporation and B.B.R. Corporation. As discussion began, Mr~ Harmening arrived. -1- MI~dTES OF THE SPECL~L MEETING OF THE CITY COUNCIL OF THE CITY OF BOYh~ON BEACH, FLORIDA, HELD AT CITY HALL, TUESDAY, OCTOBER 30, 1973 at 4:00 P.M. Mayor Jackson read the last sentence of Section 4, page 5: ~'In the event that the service herein contemplated is terminated by either party hereto £or any reason whatsoever, subsequent to five years from the date hereof;~(note: 1961)"the option hereinabove set forth shall be available to the Developers, their successors or assigns, the in- tent of the above and foregoing provision being that the City shall be guaranteed, at its option, a minimum period of five years service to the area herein involved." Mayor Jackson noted that this ag-2eement was over five years old and before doing anythio~, it would be ascertained what s.e~vice the City was giving. After some discussion, it was decided that this matter be handled administratively with a report being brought back to Council. Mr. DeLong noted that the principal concern was what the ~ates would be, what a~e the rates being paid and what are the going rates. Emez~Jency Ordinance No. 7D-5~ Re: Sewe~ Hook-ups After some discussion clarifying that an Emergency O~dinance must be passed by two thirds of the Council with a roll call vote, it was decided that Mr. Kohl should read Emergency Ordinance No. 7D-5~.~' kn Emergency Ordinance of the City of Eoynton Beach, Florida, Amending Section DOB-D2(I) of Chapter DOB of the Codified Ordinances of Said City, to Provide for Said Section to be Made Applicable Immediately and to Provide for an ~mendment to the Exceptions SYnereunder, ere. Before the reading, Mr. DeLong gave some background information for the benefit of all concerned. He said the City presently has on hand approximately $50,000 in the Building Department for hook-ups which the Bui.td. ing Official can't movg.~o5. This also entails another $2~ million e~i potentia~6~k~up char~.es. In going over the Ordinance adopted by this Coun6il, first reading July 17, second reading~ August 7, 1973, some insufficiencies were found, so it was decided that it be corrected. In the absence of Mayor Jackson, it was decided that Mr. DeLong meet with M~. Clark' s assistant, Mr. Flushing as Mr. Clark was on vacation; Mr. Simon and Mr. Barrett. The City Manager was not present~ but was apprised of the meeting. Mr. Simon drew up the apR~ropriate Emergency O~dinance on ~.oday~.s agenda, Mr. Kohl then r~ad Emel~Jency Ordinance No. 7D-5~-~n its entirety. Mr. Roberts moved for the adoption of Emergency Ordinance No. 7D-5~ seconded by Fir. Harmening. ~nder discussion, Mr. Roberts asked for satisfaction that this ordinance made certain distinctions and DeLon9 noted particular parts that were circled that were insufficient. Mr. Wallace asked if this put anyone within the City such as developers? in any bind or caused any problem. Mr. DeLong said no, there was an amount of $50,000 available for hook-up charges and this ordinance provided a clearer distinction as to how it should be handled so there - 2- MINI/TES OF THE SPECIAL MEETING OF THE CI~F COUNCIL OF THE CITT OF BOYNTON BEACH, FLORIDA, HELD AT CITY HALL, TUESDAY~ OCTOBER 1973 AT ¢:00 P.M. would be no doubt. Mr. Kohl conducted the roll call vote as follows: Councilman Roberts - Aye Councilman Wallace - Aye Vice Mayor DeLong - Yes Councilman Harmening - Aye Mayor Jackson - Aye Motion carried 5-0. Resolution - County Police Chiefs Association of Palm Beach Cry., Pla. Mr. Kohl referredto a Resolution that was passed by the County Police Chiefs Association relating to the p~oposed centralized co~unieation centers. He pointed out that this is getting into regionalism and it's possible that later on, the City wouldn*t have much to say in regard to its police department. The Palm Beach County Sheriff's Department will take over as far as the commum/cation from Boca Raton, Delray, Boynton, Briny Breezes and Gulfstream in this area. Ther~ are four different regions in Palm Beach County. Twenty Police Chiefs met at the Association and 17 voted against and 3 for. They would~ like the City to go along with them and write to the legislature that they are definitely against this communications center as far as being centralized. Mr. Wallace felt this could be handled administratively after a vote by the Cou~uci! that the State legislature be contacted and in order to help move things along~ a letter be written to Sheriff Heidtman, stating the City was against this. Mr. Kohl noted his understanding was ~hat Sheriff Heidtman didn't have anythinglto do %%th this at the beginning, but it was being pushed on him to take o~er the communica- tions. After some discussion, Mr. DeLong moved that the City Manager take the appropriate action in view of the Coumcil's wishes to levy a protest. Mr. Wallace seconded~ adding that he d like a letter to also go to Sheriff Heidtman. Mr. DeLong added to the motion that a copy of the letter to the State legislature go to Sheriff Heidtman. Mr. Kohl noted that he would have an appropriate reso~tion drawn up for the next regular meeting on November 6~ 1975. 'Mot!on carried 5-0. Touche Ross Agreement After some discussion, it was decided to read the letter of September t0, 1973 from Touche Ross into the Minutes. Mr. Kohl read the letter which is attached herto and made a part hereof. Mr. Wallace said he was satisfied as long as the administration within the City was satisfied, including the City Manager and Mr. Flynn. If there were any questions, he wanted to hear them. Mr. Kohl noted that a copy of the letter had been sent to the City Attorney. Mr. Simon said his only concern was that there was no definite fixed -3- MINGTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CiTY OF BOYNTON BEACH, FLORIDA, HELD BT CITY HkLL~ TUESDAY, OCTOBER 30, 1973 AT 4:00 P.M. maximum amount in the letter and in the event of its exceeding the estimated $15, 00C, something should be included requiring the consent of the City. S~bsequent to receiving that, he also had a question regarding t~he ~ auditsuggested agreement that might involve services beyond%hat which ia contemplated under this letter. Mr. Flynn said regarding the RUD agreement and subsequent detail by the Federal Government of an audit by an outside independent firms this matter came up afte~ at! thoughts of CPA firms in the City. This would be an additional assignment .which is not contemplated in the contrect presented~.~ the City. M~'. Ftynn noted.that the Pederal Government had ext~nsiv~ requirements and he advised that the City go along with the present certified firm and give them this particular extra assignment. He did not know what the cost would be and thought there might be a possibility that the Fe~era! ~overrm~ent itself might absorb this cost. He a~lded ~hat a representative of Touche Ross was present at the meeting and might be able to enlighten Council. Mr. Wallace asked Mr. Flynn if the City was getting what it was paying for within the $15,000 agreement and Mr. Flynn said yes. Even though it was going to cost more than in the pasts the extent of the audit would be of great benefit to the City with new procedures ~eing incorporated into the City. He felt the Council would be very satis- fied. Mr. Wallace felt the City Attorney's questions could be handled by a special contreet with Touche Ross, with the exception of the excess amount incurred over $15,000. How would this be handled. Mr. F!ynn thought that it was decided at a prior Council meeting that if any additional charges were to be incurred or any additional step to be taken that would incur additional charges, these facts would be brought to the Council through the City Manager. Hntil approval was received, Touche Ross would be limited to the amount of $15,000. Mr. DeLong noted that this provision was noted in the September 10th letter. He was in agreement ~ith Mm. Wallace and made a motion that if the City Attorney felt something specific should be included in the agreements it should be turned over to Mr. Simon to be worked out with Touche Ross to come up with something of a concrete nature in writing. I~. Wallace seconded. Mr. Simon felt he and Mr. p!ynn should l~now if the Council wants the agreement to ~ncorporate within itself a stated figure of a maximum amount of $15,000. PiP. F!ynn said he woulf like to be educated along with the City Attorney, from a CAP standpoint~ as to what limitations they have that the City might not be aware of. It was clarified that the amount of $15,000 maximum should be stated in the contract unless there are special orders on the jobs. ~r. Wallace noted that in the past, the City ~aced instances where the final figure was twice as much as the original proposal. If Touche Ross had a doubt that there might be an override above the $15,000 at this time, he wanted to know about it. Mr. Flynn noted - 4- MIh~dTES OF THE SPECIAL MEETING OF THE CiTY COUNCIL OP THE CITY BOYNTON BEACH, FLORIDA, HELD AT CITY ~L%LL: TUESDAY~ OCTOBER D0, 1975 AT 4:00 that although Touche Ross was engaged to prepare an audit as of September 50~ 197D~ he looked upon them as certified consultants to the City~ not solely in the preparation of the financial statement. Mr. Wallace wanted to make sure thateveryoney s understanding was olarified in the agreement. Motion carried 5-0. Wainwright $ Ramsey - Sewer and Water Situation Mr. George N. Shaw of Wainwright & Ramsey, Inc., municipal bond consultants, gave a synopsis of his letter to Mayor Jackson dated October 25, 1973o Said letter is attached hereto and made a part here- of. M~. Shaw noted the City's immediate need for $1% million for improvements to the sewage disposal plants. Under the provisions of the basic resolution No. 6&-FP, authorizing the Cityts water and sewer revenue bonds, the City could only issue approxSunate!y $100~000 in bonds at this time as the net reuenue as of last year is insufficient to produce the needed amount of money. He felt the only immediate answe~ to the p~oblem was some adjustment of rates and revenues to permit the issuance of the desired financing. Going further into the requirements, the net revenue at the time bonds are issued must be at least 140% of the maximum annual principal and interest of the out- standing issue, plus the maximum annual principal and interest of the proposed new issue. Mr. Shaw said a fturther complication in the City's basic bond resolution is that if the revenues are increased during a portion of the test period which is in this case, the year 1971-72 (the last reporting year available), the City can only take into account in the test for the issuance of additional bonds, 75% of the additional revenue pro- duced by that increase during the entire test period. Mr. Shaw said that the table attached to his letter sets out those factions. The alternate answer to permit t~e issuance of $1~ million additional bonds, is that the City would have to increase its revenues and consequently its rates about 20%. He saw no other way to accomplish this necessary financing for th~ sewage disposa~ plant. He further recommended with the City's entire program being $8~ million, which woul~ involve an increase in revenues and rates of 105% to be incurred within the next 2-~ years~ if the City changed its rates~ it might make the total change at this time to anticipate the need fo~ addi- tional financing. In doing this over 2 or 5 years, the City might have e×eess net revenue which could be impounded and used against later improvements, thereby ~educing the amcunt of financing necessary for them. Mayor Jackson referred to areas ~nere the City sold water wholesale which would make a difference in the CityYs overall status. Mr. Shaw assumed that those contracts are subject to adjustment as are the local rates. It was noted that Mr. Flynn was working on this. Mr. Shaw said there was one other possible approach which wouldn't obviate the necessity of a rate increase, but which might make it - 5 - MINUTES OF THE SPEC/AL MEETING OF THE CITY COLiNCIL OF THE CITY OF BOYNTON BEACH, FLORIDA, HELD AT CITY HALL~ TdESDAY, OCTOBER 50, 1975, AT ¢:00 P.M. easier and reduce the amount of the subsequent necessary financing for the two additional steps which a~e the improvements in the water plant and the connector lines of the regional system. It would be necessary to first discuss this with the City's Bor~ counsel to determine whether or not his ideas were feasible. Since the~e was no charge for the early exploration and work~ Mr. Shaw reco~nended as Bond Counsel the firm previously used: F~ Watson of William, Richardson, Watson, etc. of Jacksonville. Mr. DeLong asked if the City was in a bind with the State as far as time with regard to its own person~] pla~s. How can everything be worked out to meet the deadline? M~ Shaw said M_~. Ga~cia of Russell & Axon was going to try to get an extension of the deadline. He noted that the City was approximately 6 months away f~om the selling and delivery of bonds or 5 months at the least, as there were many legal routines to go through. Mr. DeLong noted that the City couldn't get the needed $1~ million for the extension of the sewer plant unless its chaises are incroased approximately 20%o. Mr. Shaw concurred. Mr. DeLong felt this was because this system was originally set up on a charge basis rather than a front foot assessment basis. .wi~. Shaw said the City's possi- bilities on that are limited and besides assessment liens secured bonds are the poorest security in the market. He wouldn't recommend this because the City would pay a maximum rate and probably sell at a discount which would cost money in the long run. Aftersome discus- sion about a revolving fund, M~. Shaw said he would recommend against this method. Referring to the south end tie-in with Delray Beach, M~. DeLong asked how the City Council could be firmly convinced about the stability of this cost. He felt one of the most important projects confronting the City at the present time is an immediate move on the expansion of the sewer plants and then get busy on the infiltration of this water because that will increase the capacity that much more by the amount of infiltration. Mayor Jackson felt rather than getting into the whole p~lan, the City should show its good faith with regard to getting rid of the temporary operation and have the extension of the sewer plant. After some further discussion, Mr. DeLong moved to designate William, Richardson, Watson, Slade, McCarthy and Kelly as the City's Bond Counsel. He asked if they would give the City immediate service and Mr. Shaw said yes as they were closely located in Jacksonville. Mr. Harmening seconded the motion: especially based on the fact~that the initial consultation was free. llnder discussion, Mr. Wallace asked if the initial bond could be reissued or refunded and Mr. Shaw said no~ he would not recommend refunding what the City has. Mr. Roberts - 6 - * as stated by the City's fiscal agent~ represented by Mr. Shaw (11/20/75 Minutes) MINVdTES OF THE SPEC~L MEETING OF THE CITY COllNCIL OF THE CITY OF BOYNTON BEACH, FLORIDA, HELD AT CI~ HALL, TtlESDAY~ OCTOBER 30, 1973 AT 4:00 P.M. asked Mr. Klinck if this interim addition would last s minimum of two years and he said yes. (11/20/73 minutes) Mr. DeLong asked in regard to th~ first issue of $1~ ~illion, if the first step must have Council action of raising the rates 20% before it can even be attempted to float a revenue certificate issue. Mr. Shaw concurred. Mr. Roberts asked if there was a choice and Mr. DeLong said no, but he wanted that to be taken into consideration. Mr. Wallace noted that he would like to comment on a statement just made after the vote was taken. Motion carried 5-0. Returning to the discussion of rates, Mr. Wallace asked if everyone in the City was paying the same rate. If they were not and if this were totally equalized throughout, then what would happen to the financial condition in this area. Mr. DeLong said regardless of what the outcome would be, he felt it would be eneumbent upon the Council to equalize the rates and stop the double set of standards. After some discussion~ Mr. DeLong clarified that if everyone paid his just share, the 20% would be ~edueed by a certain amount. Mayor Jackson noted that in Resolution No. 64-FF, it states that no preferential treatment should be given to anyone but there were cases contrary to this. Mr. DeLong felt there should be a motion to have a study made to determine those who are not paying the same prevalent rate for all homeowners. Mr. Wallace noted the problem of apartment houses with four families on one meter and Mr. Ha~mening added that Briny Breezes was the worst example in the City. Mr. Harmenin~ asked Mr. DeLong if Council was authorizing the consulting engineers to make a new rate study for water and sewer rates or just for clarification to determine where inequities exist in the present rate structure and the application thereof. Mr. DeLong felt that in o~der to get a fair and proper viewpoint of the whole situation, it should first be determined that everyone is paying an equal share. Then the City's revenue will increase~ thereby lowering the percentage of the cost the City would have to increase the charges. Mr. Harmening agreed. Mayor Jackson noted that the water contractfor Briny Breezes would be on the agenda for the following week. Mr. Harm~ning said there were inequities relating to Councils many years ago~ but the present Council should consider the way the rate structure is normally computed as it pertains to volume. After a per, on pays for his share of the plant and the major t~ansm/ssion and distribution lines, he then pays for the cost of the water itself used and then above that, the rate goes down as he uses more water. He asked for Council's thinking regarding the inequities because he didn't think a graduated scale of use based on volume was necessarily inequitable. MINUTES OF THE SPEC/AL MEETING OF THE CITY COUNCIL OF THE CITf OF BOYNTON BEACH, FLORIDA, HELD AT CITY HALL, TUESDAY, OCTOBER 1973 AT 4:00 P.M. M~. DeLong felt the people who were being paid a fee by the City, such as the fiscal agent and consulting engineer should get together and work out this problem in conjunction with the FiD~nce Director and City Attorney~ The Council should ben guided by their recommends- Mr. Shaw recommended that the City make s total study including the inequities to determine ~hat that would bring in and a study of the rates to see how they might increase to produce the necessary amount because time is a vital matter and two separate rate studies would take a long time. Mr. DeLong clarified that a thorough and complete study should be made and that was the gist of the motion wherein M~. Shaw was to get in touch with the Bonding counsel and engage his services for an exploratory mission at no charge to the City. Mt.Roberts referred to an ordinance which was amended recently to bring Up some of the inequities concerning the sewer and he asked if this had any bearing on today's discussion. Mr. Kohl said that was about the $225,000 hook-up and would be brought up another day. Mr. Flynn noted that the immediate concern of the City was to raise the funds to finance this $1~million sewer expansion program. Re- garding certain inequities, he said there were large volume customers on a meter in the City that just pay the rate of 26¢, the maximum volume per 1,000 which he felt could be adjusted on an equitable basis. Mr. Harmening noted that the rate study recommendation could accomplish this. Mr. Flynn said the last rate study was made by Russell g Axon in 1968 which was on record in the City files, however, the Ci~] didn't follow the rate structure as recommended at that time. In trying to project the immediate raising of funds to take care of the sewer expansion, Mr. Flynn felt that a 20% increase in the overall rate structure would basically be ~eded. Basic sales of water this year amounted to $820,739 and sewage income was another $575~239 and a 20% increase on this figure, deducting the 75% that has to be allowed for prime bond issues and leaving the City a net income of 15% would give the City $209,596 of income towards funding the bond issue. Re- ferring to the sewer increase put into effect about 5 weeks ago, Ordinance No. 72-59, he said the net effect of that increase brought in $40,815 of which 7~would also be considered for funding new. bond issues or another $50,611. Mr. F!ynn continued, giving a detailed proposal of how the City could raise Pevenue towards funding the $1~million bond issue. He felt the equalization rates could bring in an additional $10,000. After the immediate problem of the sewer expansion is taken care of, the City would have to get to work on the connection down to De]ray. - 8 - MINTJTES OF THE SPECIAL MEETING OP THE CITY COUNCIL OF THE CITY OP BOYNTON BEACH, FLORIDA, HELD AT CITY HALL: TUESDAY, OCTOBER 1975 AT 4:00 Mr. Flynn then spoke about a report the City received entitled ~'The Bishop Report~' which projected that Boynton ar~ Delray could operate a sewage facility separate and apart from any other County operation. The plan incorporated the creation of a sewer authority, similar to the Miami Port Authority or Miami International Airport Authority -- it would be called the South Pa/m Beach County Sewer Authority with the distinct objective of disposing of the sewage down to that particular point. He said that each City could retain its autonomy as an individual by collecting for the operation of this system based on the number of users in each city and paying for the operation of The Sewer Authority on a volume basis. Based on the possibility that the Federal Goverrment may want to make changes in 1983~ Boynton and Delray would have a separate authority, distinct from other eom- munities with an equity interest in its operation. Flynn gave each member of Council a copy of his proposal and Mr. DeLong stated that the prime concern of the City right now was The million that had to be raised. Mr. Kohl said hewould like to hear what Mr. Garcia of Russel! & Axon had to say about the Temporary Operating Permit and the Department of Pollution Control. Mr. DeLong wanted to know the time period involved to get moving. Mr. Klinck said that Mr. Garcia would speak later. For the record, the Temporary Operating Permit is based on start of construction, November 10th; completion of construction, May 31st. That was predicated upon an award of contract for the construction by November 1st but no one was in a position to do this, particularly because of lack of funds. Mr. Klinck said regarding the extension of the Temporary Operating Permit, calling for the plant in full operation and all analysis and testing completed by next November, he has tried for the past ~o weeks to get information from the Ft. Lauderdale regional office of the Department of Pollution Control in answer to the question~ "How do we go about applying for an extension?" He wanted to be sure that everything was done in order to apply for the extension. The Department of Pollution Control advised Mr. Klinck that perhaps after today's meeting with City Council regarding financing, Russell g Axon might be in a position to suggest an alternate scheduleas to when the extension could be completed, As far as good faith~ the Department of Pollution Control wants to know~nat date will be requested for the extension. Mr. Kiinck felt the source of the financing had to be determined first. ~wir. DeLong enumerated the number of financial matters that had to be concluded before a date could be given and Mr. Wa]lace suggested passing a motion contingent upo~ certain factors. He questioned whether the Council was willing to set up a 20% rate increase based ~ 9 - MI~/TES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CI~ OF BOYNTON BEACH, FLORIDA, HELD AT CITY HALL, TdESDAY: OCTOBER 50, 1973 B~T $:00 P.M. upon the results of the study to be made. If the rate structure showed a surplus of money, perhaps that money could be restozed as far as rate cuts, etc. He felt if the City had to raise Si%million, it would have to go to the 20% rate increase. Mayor Jackson asked for an explanation of the 20% rate increase and Mm. K!inck said he was advised that it would be a gross increase -- the revenues must increase 20%. M~. Harmening asked how long it would take for a new rate study to be completed, including the inequities and standard rate study. Mr. Garcia said assuming they could have all the accounting from the different customers, or g~oups of users, a rate study could be presented to Council in approximately 6 weeks~ or in an emergency, 4 weeks. Mr. Klinck said the Department of Pollution Control in Pt. Lauderdale gave him the impression they were waiting to issue a moratorium on them -- possibly next week. Mm. Harmening suggested that 'the City authorize Russe/t g Axon to conduct this rate study as quickly as possible and that Council pass an emergency ordinance at this meeting adopting a 20% increase in utility rates across the board. He also suggested in order to expedite this matter, that the Mayor be authorized to approach the local banks to see if the City could borrow up to $1½ million -- a local bank being one in Palm Beach County, not necessarily in Boynton. Council discussed the various aspects of such a loan to the City. Mr. Wallace said if the City was faced with a moratorium, there would be t/me to look into the various ramifications of the issues put before Council today. He felt from past experience that the City would~ not have much success in approaching the banks for a loan. Mm. Shaw said the problem in getting a loan is that the City would have no visible means of paying them. It would have to be a general obligation or a pledge of some existing available revenues of the City, other than the water and sewer revenues. Since the bank would not extend a long-term loan the City would have to pledge a very high rate. Mr. Garcia reconmended the City go to the amount of money needed for the rehabilitation and expansion of the present plant as soon as ~ss~ble plus a certain amount that would route the bond issue to about 2 million. Based on the WOrk that he completed up to the fiscal year 1971-72, that would require a 30% increase. However~ after dis- cussing the matter with Mr. F~vnnand Mr. Heckman, Mm. Gareia said using a pro lo,ma basis -- $125 per water connection and $250 for sewer connections plus satisfying the requirement of about $60~000 for the pro rata share of the utilities for the general administration expenses, it would be possible to decrease for a $2 million bond issue to 20~. He was in favor of this latter alterumtive rather than the larger increase. - 10 - MtNTdTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF BOYNTON BEACH, FLORIDA~ HELD AT CITY HALL: ~dESDAY: OCTOBER 50~ 1975 AT 4:00 P~M. M~. Garcia said if the City was going to go with the water: it would probably have to contemplate a 48~ rate increase which is rather steep and he felt it was better to move in steps with the 20~ increase. Realistically~ when the City has one or two months, revenue in~ a trend will be seen that it is the right amount. He pointed out that water wouldnYt be covered by any EPA 9~ant -- only sewers, and that past of the sewers that is plant, t~ansmission liD~s~ pumping stations and force mains will be eligible. He felt the City should put a rate increase into effect as soon as possible and get out of the bind of a temDora~y operating permit. He hoped theme would be no moratorium because in that case~ even the rate increase for customers would have to be higher. M~.DeLonq ascertained with Mm. C~cia that in view of the fact that he has already done a 9~eat deal of investigation on this subjects perhaps he could get the study in before 6 weeks and M~. Gareia said he could possibly get it in ~%thin four weeks. Aftem some discussion, it was clarified that the last study done by Russell Axon for the City was done in 1968 with some action taken that was not completely in accord with the recommendations. After some discussion about water rates per number of units, M~. DeLong noted that the main problem was the possibility of a sewer moratorium and he asked if some corrections had to be made on the present plan in order to keep within the good'g~aees of the Deuartment of Pollution Control. l{m. Garcia clarified that his recc~mendation was that the present plant be kept in the best operatin9 condition to avoid any furthem t-~ouble that would impair the g~anting of the ex- tension of the tempoma~y operating per, it. Without charge to the City~ M~. Gareia advised Mr. Clark of a couple of things he should pay pamticular attention to~ and ~ Cla~k assured him that he would do so. The rehabilitation of the plant involves more than just keeping the plant operating at the max~u~ efficiency, such as the ability to measure the different flows to the various parts of the p!ant~ making sure there are no by-passes of which there are too many at present on the old part of the plant. He felt this eould not be accomplished without adhering to the program recommended by Russell ~ Axon. Mr. DeLong asked Mr. Kohl to cheek out whether or not Mr. Clark adhered to the recon~endations of Mr. Gareia. Mr. Wallace suggested that Mr. Garlic t~y to have his study ready for presentation and discussion at the Regular City Council meeting of November 20:1975 so that an intelligent decision could be made at that time as to what direction to follow. He felt based on the info,nation presented at today's meeting and the impact it would have on the total community: he would rather a vote be taken at a regular Couneit meeting. After further discussion, M~. Roberts asked if both the water and sewer rates were changed last October in Delray and how those rates compared with those of Boynton Beach. Mr. Garcia confirmed that there was a rate increase in Delray but he didn't know how it compared - tl MI~dTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF BOYNTON BEACH, FLORIDA, HELD AT CITY HALL, TUESDAY, OCTOBER 50, 1975 AT 4:00 P.M. with Boynton. Mr. Kohl was asked to check into this. Mr. Harmening noted the City was in its present condition fOr several reasons -- its water rates have been lower than other towns along the coast for a relatively long period of time; there should have been a front foot assessment basis; and some of the prior Councils have continually charqed the Water and Sewer Pund instead of the General Fund. He also felt that the water tap fee should have been raised some t/me ago since he doubted the City recovered its costs. Mr. Gareia advised that he and Mr. Klinek recalled the past rate increase recommendation to be from $250 to $450 as a basic minimum with a fixture dharge on top of that and the water rate was a flat 20% overall. Mayor Jackson asked Mr. Klinck if what Council has done today will enhance the City's position with the Department of Pollution Control in Pt. ~auderdale and Mr~ Klinck anSwered, without knowing to what degree, yes. Mm. Garcia added that the recommended water increase minimum for residential was to $3.00. He didn't know about the recent rate increase, but this was a comparison to Boynton at that time. Mr. Wallace suggested that people within the community with construc- tive criticism be permitted to speak on this subject at the Regular Meeting of November 6th and that Council take definitive act-ion at the Regular Meeting of November 20, 1973. Mayor Jackson noted that for the rate increase in 1968, one night was set aside just to discuss that. Council agreed to follow Mr. Harmening's suggestion and have the City Manager follow through in checking with the banks about a loan. Mr. Wallace noted Mr. Roberts' suggestion as far as public relations that it might be advisable for the City Manager to compile a list of the rates of all the surrounding cities. Mr. Klinck wished to comment on two items that were discussed here today. One was Mr. Simon's mention of a HUD requirement for the contract with the CPA. HUD has furnished a reco~aended contract form which should cover all the necessary infoz~ation. Also included was a sample audit report that the auditor will have to submit. HUD will not disburse more than 75% of the grant funds until they have received s copy of that contract which calls for the auditor to prepare that audit as soon as the project construction is complete. Mr. Flynn said the auditors have received the outline and he received a copy through the City Manager's office. He was given a flat rate for the completion of the audit by Touche Ross. He was advised as to how this should be.set up and the City has progressed along those lines. ~ 12 - MIh~dTES OF THE SPECIAL MEETING OF THE CITY COtlNCIL OF THE CITY OF BOYNTON BEACH, FLORIDA, MELD AT CITY HALL, T~ESDAY, OCTOBER 30, 1975 AT 4:00 P.M. Mr. DeLong said he would like this incorporated in the Touche Ross agreement and M~. Sin~n pointed out that this was a different item. M~. Klinck added that this ~ant from HUD would be of help towards reimbursing the City for the present sewer contract. Mr. DeLong noted that the City's Utility General would have to be used to meet the cost of*El~bsxx~x~x and ~he PR1D grant will just be used to replenish that Fund, therefore, it would not be an excess. Mr. Harmening asked how the clean-up and restoration on the present project is going. Mr. Klinck reported that itts been gcing very badly. Last week a letter was issued to the contractor that Russell & Axon would not approve another pay estimate for payment by the City until certain areas were taken care of. Due to an incident the preceding Friday, the City Manager advised Russell & Axon to issue a stop work order which they are under with a specific schedule for com~ptetion. In regard to the City's regional plan and location on the priority list, Mr. Klinck noted that the Application of Boynton Beach is 37 for fiscal year 1975 funding. The City will not be able to stay on the list unless certain documents are filed by January 1st and fol- lowed up by April 15, 1974 with other documents. The City has received a letter dated October 5, 1975 from the Department of Pollution Con- trol with another set of forms, a new application to be submitted by January !, 1974. Among the accompanying documents to be completed is the infiltration inflow project which M~. DeLong had mentioned as being a ~-2 priority. Mr~ Klinck had completed plans and specifications for an infiltration project of television inspection and chemical sealing of sewers with certain areas being marked for suspect infil- tration -- which could cost the City f~om $100-$150, 000. Two very important aspects are: Russell & Axon is p~eparing this for EPA approval under their guidelines and in submitting, Russell & Axon wants the City to apply for funding for the infiltration control project. He noted that there was an eligibility for Federal funding hut the City first had to establish eligibility. Council agreed that Russell & Axon follow through with their reco~nendations to the City. M~. Ha~mening asked if this project contemplated entire chemical sealing of the lines or is certain digging and repairing also contemplated. Mr. Klinck confirmed that it would include the latter phase. Mayor Jackson referred to a letter received from Mr. Fields and asked that the City Attorney look into this matter for its legality regarding water hook-ups, etc., adding that ~!r. Flynn was also working on this. Mr. Wallace suggested it be handled administratively. Mr. Wallace moved to adjourn, seconded by Mr. DeLong. Motion carried 5-0. Meeting adjourned at 5:50 P.M. the present expansion of the sewer system (11/20/75 minutes) MINI1TES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF BOYNTON BEACH, FLORIDA~ HELD AT CITY HALL~ TUESDAY~ OCTOBER 5% 1975 AT 4:00 P.M. CITY OF BOYNTON BEACH: FLORIDA Co~Lman Councilman ATTEST: Councilman ~ 14 - TOUCHE ROSS & CO. ~ September 10, 1973 Mr. Frank Kohl~ City Manager City of Boynton Beach Po 0. Box 310 !20 Northeast 2 Avenue Boynton Beach~ Florida 33435 Dear M_r. Kohl: We are pleased to serve as independent accountants for the City of Boynton Beach~ Mr. E. A. Duff Macbeth will be in charge of all work we perform for you. Examining and. reporting oa your annual finaneia! statements is to be our recurring basic assigrmaent.. We would-like ~.lso to be helpful to you on current problems as~they'arise through- out the year. Hence, we hop~ you ~l!l call ~. Macbeth whenever you feel he can be of assistslnce~ It.iS our usual practice to have a consulting partner on each client assignment. The purpose of this arrangement is to have another person who is familiar with your City's ~pera~ions and who can substitute for ~. Macbeth in b~s a~sence or work w-ith him when' a second viewpoint is desired. Mr. Frank Schneider will be the consmlting partner for your City. It wiZt be the responsibility of 1~. Macbeth and Mr. Schneider to make sure that lout management receives good service. They will, as desirable, call upon other individuals with special- ized knowledge~ either in this office or elsewhere in our firm. A supervising accountant will be assigned to your work and we expecv that he will soon establish direct working relationships with s®propriate personnel in the City. The purpose of our engagement is to examine the City's financial statements for the period ended September 30, !9%$, and evaluate the fairness of presentation cf'the statements in conform~ ity with generally accepted accounting principles applied on a basis consistent with that of the.preceding period. Our examination will be conducted in accordance with gen- erally accepted auditing standards which will inatude a review of the system of internal control and tests of transactions to the extent we believe necessary. Accordingly, ir'will D~ot include a detailed audit of transactions to the extent which would be recuired if intended to disclose defalcations or other irregularities, although their discove~j may result. ~OUCHE ROSS & CO. _~. Frank Kohl Page -2- -City of Boynton Beach September 10, 1973 We direct your attention to the fact that the City's manage- ment has the responsibility for the proper recording of transactions in the books of a.ccount~ for the safeguarding of assets~ and for the substantial accuracy of the financial statements. Such statements are the representations of the City's management. The objective of our examination is the expression of an unqualified opinion on the Cityts financial statements~ dependent on the facts and circumstances at the date of our opinion. If our opinion w~_~l be other than unqua.lified~ the reasons therefor will be fully disclosed. In addition~ we will submit, as a normal part of our exami- nation, a letter advising you of Opportunities we have observed for economies in or improved internal controls over~ your operations. It is our uractice to prepare a letter bringing such matters to the attention of the appropriate level of the City's management. We are, of course, available Lo assist you in other areas that might arise~ as discussed in our statement of aualifications dated July'!9~ i973. Our fees are based on the amount of tim~ required a.t various levels of responsibility~ plus actual out-or-poc.ket expenses' (travel~ typing~ telephone~ etc.), payable upon presentation of our invoices. If the ~orego_ng is in accordance with your understanding~ ~tease sign and return to us the duplicate copy of this !e~ter. We very much appreciate the opportunity to serve you and trust that our association will be a Long and pleasant one. Yours very truly, Cerf~ified PUblic Accountants FSS:EADM:!ts Enclosure Accepted: By: Date: ~AINWiqIO~ c~ RAtISEY N. SHA. W October 257 1973 Honorable Emily M. Jackson. Mayor 1~. O. Box 310 Boy. ton Beach, Florida 33435 6~5.659! Dear Mayor jackson: This letter is in consequence cf the discussion on Wednesday, October 17th of the problems of financing the sewage treatment and disposal needs of the City. Russell ~ Axon your Consulting Engineers, es- timated the cost of the immediate project at $1, 300, 000. To this, we have added: interest during the year of construction, $1tZ. 500; e~Pense of preparing, validating, sale and delivery of the issue, $25, 000; unforeseen contingencies: $6Zi 500; total SZ00, 000, bringing the amount to be financed to $1, 500, 000. 5¥e have used the maximum allowable rate of 7-1/2~0 in estimating interest cost, quite a bit higher than the rate we hope and believe you would receive, but in this era of fluctuating markets we feel it is wise to guard against the worst when estimating and setting up financing, particularly when adjusting rates. Your basic resolution No. 64-FF, which auth~ orized the initial is sue of refunding and improvement ]Bonds and established the conditions under which additional bonds may be issued, contains the following test for such bonds: "~cxxxX3~ the average annual net revenues during the immediately preceeding twenty four (24) months, or the net revenues derived during the immediately preceeding twelve (~2) months, whichever is the lesser, equals not less than one-hundred forty ]~er centum (140~0) of the largest amou~.t of principal arid interest which will become due in each year thereafter on (i) all t~onds and all additional parity bonds if any then outstanding, and (ii} on the ad- ditional parity bonds" to be issued~ and further, "in the event a change has been made in the rate schedules for services from the ~%rater and Sewer System prior to the issuance of the proposed additional parity bonds for a par~ of the same perio(1 or periods and such change has resulted in an increase in net revenues, seventy-five percent (75~0) of an estimate made by such Consulting Engineers of such additional net revenues for the same base period or periods" t%qay be added to such actual net revenues for the purpose of the test. At present, the controlling figure is the net rev- enue for the year ended September 30, 1972 -- $659,99Z, which is less than the average of the two years ended in I97] and 1972. Continued ,-% c r¢.~ o%1 B_O.~ c)N B~ACI4. Estimate of extent of rate incr, e_~-~ed re_q2Hred to make possible additional financing under the provisions o] resglution 6~-Ft" for the proposed -- ~-~ge ~atment and I-~T~-' A~nount of Exist~rkg Maximum Annam P & 1 F. stimated Amount of Maximum Annual P & J for Additional Bonds Total Maximum Annual P ~ I After Issuance of Additional Bonds Plus 40% Required Coverage Factor Total Net Revenue Required Minus Existing Net Revenue (t971-72/ Additional Net Revenue Required For Debt Service Before Adjusemen~ Plus ~ount Required (33-I/3%~ to comply with provision of Resolution No. 64-FF allowing cnly 75% of Additional Net Revenue, as es- tJmated by Consulting ~ng~neer, to be used in Test for lssuance of Additional Bonds Total Additional Nel Revenue Required Plus existing Gross Revenue Total Gross Revenue Required Divided by E~sting Gross Revenue Required Gross Revenu~ As Percentage ~f ~xisting Gross Revenue Overall New Rates as Percentage of Overall ~xlsl lng Rates Percentage of Increase of Existing Rates $1~500 000 $8.000 000 First_?.b_~se Total Pr?,gram $ ,461, 508 $ 461.508 135, 000 $ 596, 508 720.000 $ 1.-181, 508 238,603 472.603 $ 835, 1tl $1,654,111 659,992 659,992 175, 119 58, 373 $ 994, 119 331,371 $ 233. 492 $1,325.490 1,258, 137 1.258, 137 $ 1. 491,6Z9 $2, 583. 627 1,258 137 1,258. 137 119% 205% ]19% 205%