Loading...
Minutes 10-14-91MINUTES OF SPECIAL CITY COMMISSION MEETING HELD IN COMMISSION CHAMBERS, CITY HALL, BOYNTON BEACH, FLORIDA ON MONDAY, OCTOBER 14, 1991 AT 7:30 P.M. PRESENT Arline Weiner, MaYor ~Edward Harmening, Vice Mayor Jose Aguila, Commissioner Lillian Artis, Commissioner Lynne Matson, Commissioner J. Scott Miller, City Manager James Cherof, City Attorney Sue Kruse, City Clerk I. CALL TO ORDER M~yo r weiner called the meeting to order at 7:32 ~p.m. II. UPDATE BY SMITH BARNEY ON THE REFUNDING OF THE 1984 GOLF COURSE BOND ISSUE (PLUS CONSTRUCTION DOLLARS) FOR REBUILDING/ RESURFACING CHAMPIONSHIP GREENS - BOYNTON BEACH MUNICIPAL GOLF COURSE David Levy, of Smith, Barney, Harris Upham & Company, explained %hat the City was approached regarding refunding the 1984 bonds. The interest rate on those bonds is 10.125%. If new bonds are issued in today's market, the interest rate will be 6.30%. The savings will help to defray the costs associated with golf course renovations. In addition, the City can issue additional bonds to ~inance a portion of the renovation of the golf course greens. Mr. Levy pointed out that interest rates are the lowest they have been in the last ten years. (A copy of a handout is attached to the original copy of these minutes on file in the City Clerk's Office.) It is expected that $4,370,000 in bonds will be issued. Approxi- mately 3.8 million of the bonds will be used to refund the 1984 bonds. $400,000 will be used to renovate the golf course, and $85,000 of that $400,000 is savings over the old issue. The remaining amount of the bond issue will be used to pay the costs of the issuance. On October 21, Smith Barney will price the bonds. 0~ October 22, the City Commission will be asked to pass an Award Resolution and Sign Bond Purchase Contract. The bonds will be awarded to Smith Barney and they will sign a contract guaranteeing payment to the City on the closing date of November 12. MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA OCTOBER 14, 1991 A savings of $85,000 is expected as a result of the refunding. Also, by modernizing '~he bonds, the bond covenant has been reduced. The new rate covenant will require that greens fees be charged and the additional revenues from the golf course plus expenses equal 1.25% of the debt service. Although this will not lower the greens fees, it will provide flexibility for the City. Long-term fixed rate funding for golf couse improvements will be locked in. The matters to be considered by the Commission are the approval of a bond resolution, and delegation of power to the City Manager to approve the use of an Official Statement. This will allow Smith Barney to market the bonds. It is also necessary to approve the use of a Bond Insurer, a Paying Agent, Registrar and Escrow Agent. Vice Mayor Harmening asked if there is any tie in with the public service taxes. Mr. Levy responded that the bonds are backed by public service taxes. City Manager Miller stated that the City had attempted to have the first lien removed, but it would have left the City in a position where getting insurance would have been impossible. Commissioner Aguila wondered what happened with Southeastern. Mr. Levy advised that Southeastern is not in a position to be associated with the bond issue at this time. They are in the ~rocess of recapitalizing. The City will not be affected by this in any way. Mark Raymond, of Mo¥1e, Flanigan, Katz, FitzGerald & Sheehan, serves as the City's Bond Counsel on this issue. He explained that in 1984, the City issued $4 million in recreational facili- ties bonds. These bonds are payable from golf course revenues. If, at any time, golf course revenues are insufficient, the City is obligated to use public service tax revenues to pay off the bonds. It is intended that a portion of the new bond issue will be put into an escrow which will be invested. These investments will produce interest and maturing principle which will pay the debt service on the 1984 bonds through November 1, 1994. On November 1, 1994, the remaining 1984 bonds will be called for early redemption. There is a 3% premium for early redemption. He pointed out that the resolution before the City Commission does not obligate the City to go forward with the financing. Upon adoption of the resolution, Smith Barney will market the bonds using the Official Statement. On October 22, the Commission will be asked to consider a resolution which will fix the details of the bonds. This resolution will establish the interest rate, the maturity by dollar amounts and give formal approval to the appointment of the Paying Agent and Registrar, MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA OCTOBER 14, 1991 authorize the payment of the bond insurance premium, authorize the signing of a bond purchase contract, an escrow agreement, a Paying Agent agreement, etc. When that resolution is adopted, the City will then be bound to go forward. III. LEGAL ao Proposed Resolution No. R91-168 Re: Approve bond resolution reference Recreational Facilities Golf Course Refunding Revenue Bonds, Series 1991 Attorney Cher°f read Proposed Resolution No. R91-168 by title only: A RESOLUTION OF THE CITY COMMISSION OF BOYNTON BEACH, FLORIDA, AUTHORIZING THE ISSUANCE BY THE CITY OF NOT EXCEEDING $5,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF RECREATIONAL FACILITIES REFUNDING REVENUE BONDS, SERIES 1991, TO FINANCE THE COST OF REFUNDING THE CITY'S RECREATIONAL FACILITIES REVENUE BONDS, SERIES 1984, TO PROVIDE FUNDS TO FINANCE THE COST OF IMPROVEMENTS TO THE CITY'S GOLF COURSE, TO FUND A DEBT SERVICE RESERVE AND TO PAY THE COSTS OF ISSUANCE OF SUCH BONDS; PLEDGING TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH BONDS CERTAIN PLEDGED FUNDS, INCLUDING THE GROSS REVENUES OF THE GOLF COURSE, UNDER CERTAIN CIRCUMSTANCES PUBLIC SERVICE TAX REVENUES, ALL MONIES ON DEPOSIT IN AND INVESTMENTS HELD FOR THE CREDIT OF CERTAIN FUNDS CREATED HEREUNDER, AND THE EARNINGS ON SUCH INVESTMENTS; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE OWNERS OF SUCH BONDS; PROVIDING FOR THE APPOINTMENT OF A PAYING AGENT AND REGISTRAR; PROVIDING FOR THE CREATION OF FUNDS AND ACCOUNTS; AND PROVIDING AN EFFECTIVE DATE. Vice Mayor Harmening moved the adoption of Proposed Resolution No. R91-168. Commissioner Matson seconded the motion. A roll Gall vote was polled by City Clerk Sue Kruse. The vote carried 5-0. Proposed Resolution No. R91-169 Re: Authorization to enter into a Commitment to Issue a Financial Guaranty Insurance Policy with MBIA reference $4,680,000 (est) City of Boynton Beach, Florida, Recreational Facilities Golf Course Refunding Revenue Bonds, Series 1991 Attorney Cherof read Proposed Resolution No. R91-169 by title only: A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOYNTON BEACH, FLORIDA, AUTHORIZING AND DIRECTING THE MAYOR AND CITY CLERK TO ENTER INTO A COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY WITH MUNICIPAL BOND INVESTORS MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA OCTOBER 14, 1991 ASSURANCE CORPORATION (MBIA), A COPY OF SAID COMMITMENT BEING ATTACHED HERETO AS EXHIBIT "A"; AND PROVIDING AN EFFECTIVE DATE. Commissioner Aguila moved to approve Proposed Resolution No. R91-169. Vice Mayor Harmening seconded the motion. A roll call vote was polled by City Clerk Sue Kruse. The vote carried 5-0. Co Proposed Resolution No. R91-170 Re: Appointing the Paying Agent, Escrow Agent and Registrar for the proposed Recreational Facilities Golf Course Refunding Bonds, Series 1991 Attorney Cherof read Proposed Resolution No. R91-170 by title only: A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOYNTON BEACH, FLORIDA, AUTHORIZING THE APPOINTMENT OF FIRST UNION AS PAYING AGENT, ESCROW AGENT AND REGISTRAR FOR THE RECREATIONAL FACILITIES REVENUE AND REVENUE REFUNDING BONDS; AND PROVIDING AN EFFECTIVE DATE. Vice Mayor Harmening moved the adoption of Proposed Resolution No. R91-170. Commissioner Aguila seconded the motion. A roll call vote was polled by City Clerk Sue Kruse. The vote carried 5-0. Proposed Resolution No. R91-171 Re: Authorize City Manager and City Attorney to approve preliminary official statement reference Recreational Facilities Revenue and Revenue Refunding Bonds, Series 1991 when final Attorney.Cherof read Proposed Resolution No. R91-171 by title only: A RESOLUTION OF THE.CITY COMMISSION OF THE CITY OF BOYNTON BEACH, FLORIDA, AUTHORIZING THE CITY MANAGER AND CITY ATTORNEY OF THE CITY TO APPROVE THE PRELIMINARY OFFICIAL STATEMENT FOR THE CITY'S PROPOSED RECREATIONAL FACILITIES REFUNDING REVENUE BONDS, SERIES 1991; AND PROVIDING AN EFFECTIVE DATE. Commissioner Aguila moved to approve Proposed Resolution No. R91-171. Vice Mayor Harmening seconded the motion. A roll call Vote was polled.by City Clerk Sue Kruse. The vote.carried.5,0. IV. LITIGATION.UPDATE - VINCENT FINIZIO vs. CITY OF BOYNTON BEACH ~City Manager Miller explained the City was in court on O-tober 3 and October 10, with regard to the above-mentioned case. A letter dated O~tober 11, 1991, was received from Jim Vance, the City's attorney on this case. That letter explained the court 4 MINUTES - SPECIAL CITY COMMISSION MEETING BOYNTON BEACH, FLORIDA OCTOBER 14, 1991 denial of plantiff's motion for injunctive relief prohibiting the City from hiring a professional engineer. However, the court did enjoin a city professional engineer from assuming any of the pre- sent duties and responsibilities of the plantiff until final determination of the suit. Mr. Vance has recommended that the City appeal that portion of the judge's order relating to Mr. Finizio's present duties and that he be authorized to commence that appeal immediately. Vice Mayor Harmening moved to instruct the City's attorney in this matter, Jim Vance, to file an appeal to the portion of the judge's final order on the injunction on behalf of the City of Boynton Beach to the District Court of Appeals. OTHER None ADJOURNMENT There being no further business, Vice MaYor Harmening moved to adjourn the meeting at 7:55 p.m. Commissioner Aguila seconded the motion which carried 5-0. ATTEST: ~cording Secretary (One Tape) THE CITY OF BOYNTON BEACH // Mayor Vice Ma~f/ ~" ~ 7 -- --- ~.ommiss-ioner ~- Commissioner SMITH BARNEY City of Boynton Beach, Florida Refunding of Series 1984 Goff Course Bonds ¸1. J Goals of Financing Provide savings by refinancing Series 1984 Bonds. (Old Bonds 10.125%, New Bonds 6.30%) (*) Use savings to defray golf course renovation costs. Issue additional bonds to finance a portion of the renovation of golf course greens at lowest possible cost. Sm/th Barney, Harris Upham& Co. ~' SMITH B~Y City of Boynton Beach, Florida Historical Tax-Exempt Interest Rates 1982 - Date 14.00% 12,00% 10. 00% 8.00% 6.00% 1/82 1/83 1/84 1/85 1/86 1/87 1/88 1/89 1/90 I Historical Tax-Exempt Interest Rates 10/91 __l-~- SMITH BARNEY City of Boynton Beach, Florida Refunding of Series 1984 Goff Course Bonds Summary of Sources and Uses of Funds Sources of Funds: Bonds Issued $4,370,000 Uses of Funds: Escrow for Series 1984 Bonds Construction Fund (1) Costs of Issuance (2) 3,868,193 400,000 $153,890 (1) (2) Inclusive of $85,000 Net Savings. $52,000 of Costs of Issuance will be paid from the City's existing Reserve Fund. Sm~th Barney, Harris Upham & Co. .... SMITH BARNEY City of Boynton Beach, Florida Refunding of Series 1984 Goff Course Bonds Time Schedule October 21 Bond Pricing October 22 November 12 Special Meeting to Award Bonds and Sign Bond Purchase Contract Closing Smith Barney, Harris Upham & Co. ?¢MITH BARNEY City of Boynton Beach, Florida Refunding of Series 1984 Golf Course Bonds Expected Results from Refunding Net Savings of $85,000 (after all costs are paid). Reduced Golf Course Rate Covenant Old Test: Revenues = 150% of Debt Service. New Test: Revenues = 125% of Debt Service. 3. Long Term Fixed Rate Funding for Golf Course Improvements. Em~th Barney, Harr/s ~Jpham & Co. ,' SMITH BARNEY City of Boynton Beach, Florida Refunding of Series 1984 Goff Course Bonds Matters for Commission Action this Evening 1. Approve Bond Resolution. Delegate to City Manager to Approve Use of Official Statement. 3. Approve Bond Insurer. 4. Approve Paying Agent, Registrar, and Escrow Agent. Sm~th Barney, lYarris Upham & Co.