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.