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HomeMy WebLinkAbout6/30/1987Tuesday;, June 30, 1987 The Board of County Commissioners of Indian River County, Florida, met in Special Session at the County Commission Chambers, 1840 25th Street, Vero Beach, Florida, on Tuesday, June 30, 1987, at 9:00 o'clock A.M. Present were Don C. Scurlock, Jr., Chairman; Margaret C. Bowman, Vice Chairman; Richard N. Bird; Carolyn K. Eggert; and Gary C. Wheeler. Also present were Charles P. Balczun, County Administrator; Charles P. Vitunac, Attorney to the Board of County Commissioners; Joseph Baird, OMB Director; and Virginia Hargreaves, Deputy Clerk. The Chairman called the meeting to order. -- ADDITIONS TO THE AGENDA/EMERGENCY ITEMS Utilities Director Pinto requested that an item be added to the agenda for permission to hold a public hearing re an applica- tion for a grant relating to septage and sludge treatment. He explained the emergency nature of the request is that we have to give 45 days notice of the public hearing. ON MOTION by Commissioner Eggert, SECONDED by Com- missioner Bowman, the Board unanimously approved addition of the above matters to today's agenda. ON MOTION by Commissioner Eggert, SECONDED by Com- missioner Bowman, the Board unanimously authorized staff to advertise the public hearing required for application for a grant re septage and sludge treatment. Commissioner Bird advised that he would like to make a report on the status of the Howell -Chapman condemnation lawsuit. JUN 30198 7 BOOK J JUN � 0 987 BOOK 68 PAGE 669' SALE OF 3.5 MILLION CAPITAL IMPROVEMENT REV. BONDS, SERIES 1987 Chairman Scurlock announced that we are here today on the 3.5, actually 3.8 million, bond issue. Our finance advisor, bond counsel, and underwriters, all are present. The Chairman felt that we have been extremely successful working with Mr. Diamond of M. G. Lewis as our finance advisor; Smith Barney, the under- writer; and bond counsel, Rhoads & Sinon. The Chairman advised that both the Resolutions to be handed out were not done in advance because of the fact that they change right up until today. He then introduced Art Diamond, Finance Advisor. Mr. Diamond expressed his pleasure at being present and advised that despite the fact that this is a fairly straight forward bond issue, there have been some complications. One over which they have had no control has been the market environment, which has been extremely volatile. Over the last two months Wall Street has lost over a billion dollars in the bond market; so, considering the environment, they have come to what he considered a successful conclusion on this bond issue, the amount of which is $3,655,000. Mr. Diamond informed the Board that they spent a long hard day yesterday with the underwriter, Smith Barney, working out the interest rate, and negotiations continued all day until they got to a point acceptable to all. The county gained 15 basis points during the day, which translates into something close to $98,000. While this is a practice normal in the industry, it takes a lot of hard work and cooperation between the county and the underwriter. Mr. Diamond congratulated everyone concerned for being level headed and felt the county got a great deal. He then introduced Peter Zent, Managing Director for Smith Barney in their Tampa office and Gregory Carey, Second Vice President of Smith Barney in their West Palm Beach public finance office. Mr. Zent referred to the following chart showing interest rate comparisons': 2 ft 1988 1989 1990 1991• 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Indian River County, Florida Capital Improvement Revenue Bonds Series 1987 Interest Rate Comparisons 7.751) 8.00 Ratings AAA/Aaa AAA/Aaa Sale Date 6/30/87 6/17/87 (1) 99.50 to yield 7.80% City of Jacksonville Excise Tax 4.75 5.00 5.25 5.50 5.75 6.00 6.20 6.40 6.60 6.80 7.00 7.15 7.30 7.75(1) NR/Aaa 6/23/87 Palm Beach Co. Solid Waste Authority 6.25 6.50 6.75 7.00 7.25 7.50 7.75 8.25 AAA/Aaa 5/20/87 Mr. Zent noted that in a bond issue you are concerned about two things - the rate of interest you receive and the price you pay for your bonds - the underwriter's discount. The most important thing, of course, in an issue that lasts 18 years is the interest rate. He then reviewed the rates set out in the above chart, noting that the Palm Beach Solid Waste Authority was a triple "A" issue in the market over a month ago, and those rates are 6.25 to 8.25. He also emphasized the volatility of the market, noting that they have never seen shifts like those taking place in the last two months. Mr. Zent continued that the City 3 JUN 3 0 1987 BOOK Fa,cE i U City of Tallahassee Indian River (Tallahassee Memorial County Hospital) 4.75 5.00 5.25 5.50 5.75 6.00 6.20 6.40 6.90 6.60 7.00 6.80 7.15 7.00 7.30 7.20 7.40 7.30 7.50 7.60 7.751) 8.00 Ratings AAA/Aaa AAA/Aaa Sale Date 6/30/87 6/17/87 (1) 99.50 to yield 7.80% City of Jacksonville Excise Tax 4.75 5.00 5.25 5.50 5.75 6.00 6.20 6.40 6.60 6.80 7.00 7.15 7.30 7.75(1) NR/Aaa 6/23/87 Palm Beach Co. Solid Waste Authority 6.25 6.50 6.75 7.00 7.25 7.50 7.75 8.25 AAA/Aaa 5/20/87 Mr. Zent noted that in a bond issue you are concerned about two things - the rate of interest you receive and the price you pay for your bonds - the underwriter's discount. The most important thing, of course, in an issue that lasts 18 years is the interest rate. He then reviewed the rates set out in the above chart, noting that the Palm Beach Solid Waste Authority was a triple "A" issue in the market over a month ago, and those rates are 6.25 to 8.25. He also emphasized the volatility of the market, noting that they have never seen shifts like those taking place in the last two months. Mr. Zent continued that the City 3 JUN 3 0 1987 BOOK Fa,cE i U JUN 3® IW7 500r 68 Facc671 of Tallahassee was an issue done June 17th, and their rates are a little better. Then last week they priced out the City of Jacksonville issue on a Monday morning and had a very good market. Unfortunately last week the market dropped some, and it opened up yesterday on a fairly sour tone caused by a lot of economic indicators as well as the apathy caused by the holiday coming up Friday, but it improved during the daytime. Mr. Zent confirmed that negotiations during the day resulted in an improvement of 15 basis points, which means a lower rate of interest, or a $98,000 difference. He noted that the other major proponent is bond discount. They submitted a proposal showing their discount in the range of $6.05 to $7.50. Bond discount and rates go hand in hand, and they settled on a discount of $7.00 which is a very aggressive market rate. Mr. Zent stated that they have very little expenses in that; it is a very trim budget. He thanked the Chairman, the County Attorney, and the OMB Director, for their help in expediting this and announced that the closing will be in their offices in Tampa. Chairman Scurlock requested that Mr. Zent explain about insurance versus non -insurance for the benefit of the new Com- missioners. Mr. Zent explained that typically they look at an "A" rated bond versus insurance and what you pay for insurance versus what the interest would be if you did not have it. The county was very fortunate to receive bids from two insurers almost identical in nature, one being possibly $3,000-$4,000 higher. One was with a bond reserve account and one without. They chose the MBIA insurance policy which has a little bit better name, and the premium was $48,320. As noted before, the 15 basis point improvement in their price amounted to $98,000 over the life of the issue. There is probably a 25 basis point difference between an insured issue and a non-insured issue; that would translate into dollar savings of approximately $75,000 with the insurance policy; so, it was prudent to go with the insurance. 4 Chairman Scurlock advised that the Board now needs to adopt two Resolutions. Charles Sieck of Rhoads & Sinon, Bond Counsel, informed the _ Board that the first Resolution is the one amending and supplementing Resolution 85-75; it authorizes the projects which are going to be funded out of the bond proceeds and also authorizes the Series 1987 bond issue in an amount not to exceed - 3.8 million. it makes the necessary amendments to the original Resolution dealing with the 185 series, which is also paid for out of sales tax revenues. The second Resolution is the awarding Resolution, which authorizes entering into a contract of purchase whereby Smith Barney buys the bonds from the county under the rate structure set forth in the contract and also the Resolution. Commissioner Eggert requested five minutes -to read the Resolutions. Chairman Scurlock asked Mr. Diamond if Smith Barney came in within the parameters we had set, and Mr. Diamond confirmed that came in within the parameters of the spread they had originally proposed, the maximum being 7.5, and we negotiated down to 7.00. We also negotiated the bond counsel down. Mr. Diamond felt the county ended up with what he felt is a more than fair market rate and stated that he is proud to be associated with the county, which he felt has one of the top Board of Commissioners in the state. Commissioner Bird wished to know if this bond issue totally encumbers the sales tax fund, or could there be additional funding accomplished in the future. Mr. Diamond stated that additional funding could be accom- plished through the County's 1/26 sales tax. All the bonds the county issues on that lean on the entire amount, but you only need just so much to pay your debt service. Chairman Scurlock pointed out that when you issue bonds based on the 1/26 sales tax, it has an impact on the current proposed budget because the revenue pledged for that purpose is 5 JUN 3 0 1987 BOOK 66 F,�u 672 jUN 3 0 1987 BOOK 68 FAGE 673 G3 then committed and cannot be pledged to other things during our budgetary process. OMB Director Baird confirmed that with this bond issue, the loss of revenue would amount to about $375,000. ON MOTION by Commissioner Eggert, SECONDED by Com- missioner Wheeler, the Board unanimously adopted Resolution 87-59 amending and supplementing Resolu- tion 85-75 authorizing construction and equipping of certain capital projects and providing for the issuance of capital improvement revenue bonds in the maximum amount of 3.8 million dollars. RESOLUTION 87 - 59 A RESOLUTION AMENDING AND SUPPLEMENTING RESOLUTION 85-75 OF INDIAN RIVER COUNTY, FLORIDA, AS AMENDED AND SUPPLEMENTED; AUTHORIZING THE CONSTRUCTION, ACQUISITION, FURNISHING AND EQUIPPING OF CERTAIN CAPITAL PROJECTS IN THE COUNTY; PROVIDING FOR THE ISSUANCE OF CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 1987, IN THE MAXIMUM AGGREGATE PRINCIPAL • AMOUNT OF $3,800,000 AS THE SECOND INSTALLMENT OF THE BONDS ORIGINALLY AUTHORIZED UNDER SAID RESOLUTION; TO PAY THE COST OF SAID PROJECTS; PROVIDING FOR THE PAYMENT OF SAID BONDS FROM THE SALES TAX REVENUES RECEIVED BY THE COUNTY; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE HEREOF. BE ' IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA: SECTION 1. Authority for Resolution. This Resolution is adopted pursuant to the provisions of Chapters 125 and 279, Florida Statutes (1985), as amended; County Home Rule Ordinance No. 77-19, as amended; the Master Bond Resolution and other applicable provisions of law. SECTION 2. Definitions. All terms herein shall have the meanings ascribed to them in the Master Bond Resolution, except as otherwise provided herein. When used in this Resolution, the following terms shall have the following meanings, unless the context clearly requires otherwise: "Act" shall mean Chapters 125 and 279, Florida Statutes (1985); County RESOLUTION 87-99'IS ON FILE IN THE OFFICE OF CLERK TO THE BOARD IN ITS ENTIRETY. 6 3 ON MOTION by Commissioner Eggert, SECONDED by Com- missioner Bird, the Board unanimously adopted Resolution 87-60 authorizing the execution of the bond purchase agreement for the sale and award of $3,655,000 Capital Improvement Revenue Bonds, Series, 1987 RESOLUTION NO. 87- 60 A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT FOR THE SALE AND AWARD OF $3,655,000 AGGREGATE PRINCIPAL AMOUNT OF CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 19871 OF INDIAN RIVER COUNTY, FLORIDA, AT PRIVATE SALE BY NEGOTIATION, TO THE PURCHASER THEREOF; AUTHORIZING AND APPROVING CERTAIN DETAILS OF SAID BONDS; AUTHORIZING THE EXECUTION AND DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE MARKETING OF SUCH BONDS; AUTHORIZING OTHER APPROPRIATE AND NECESSARY ACTIONS IN CONNECTION WITH THE DELIVERY OF SUCH BONDS; APPOINTING A PAYING AGENT AND BOND REGISTRAR FOR SUCH BONDS; AND SPECIFYING AN EFFECTIVE DATE HEREOF. WHEREAS, the Board of County Commissioners of this County, by Resolution No. 85-75, duly adopted on July 10, 1985, as amended and supplemented by Resolution No. 85-125, duly adopted on October 23, 1985 (collectively the "Master Bond Resolution"), heretofore authorized the issuance of revenue bonds of this County in the maximum aggregate principal amounts of $25,000,000, including an initial installment of such revenue bonds designated as the Refunding and Improvement Revenue Bonds, Series 1985, in the aggregate principal amount of $9,855,000 (the "Series 1985 Bonds"); and WHEREAS, the Board of County Commissioners of this RESOLUTION 87-60 IS ON FILE IN THE OFFICE OF CLERK TO THE BOARD IN ITS ENTIRETY. Peter Zent presented the Chairman with Smith Barney's good faith check in the amount of $36,500. 7 JUN 3 0 1987 BOOK� Fact 674 JUN 3 0 1997 Boort 68 o 5 REPORT ON HOWELL-CHAPMAN CONDEMNATION SUIT Commissioner Bird reported that yesterday Assistant County Attorney Bruce Barkett presented before Judge Smith the condemnation suit to acquire the Howell -Chapman property on the North Barrier Island, and he did an excellent job. The property owner was represented by two attorneys out of Miami, and while they put up somewhat of a fight, he did not feel they came totally prepared to go into an all-out battle. The final result was that Judge Smith ruled in favor of the county and advised that on the 11th of August a jury will set the amount of compensation to be received by the property owner. We then have 20 days for the state and county to come up with the cash to complete the transaction. Commissioner Bird noted that the state has set aside about 2.5 million towards this purchase, and we already have had one M.A.I.appraisal at 2.7 million, which would indicate a $200,000 shortfall. Chairman Scurlock felt we should plan on looking for between $200 to $500,000. He also believed we should ask the appraiser to re-evaluate based on the potential impacts of the COBRA Bill. If that Bill passes, it could have a significant effect because flood insurance won't be available, and also there is the new coastal construction setback line to consider. Attorney Barkett entered the Chambers, and Commissioner Bird co-ngratulated him on his fine job in presenting the county's case for condemnation of the Howell -Chapman property. Attorney Barkett informed the Board that he has been in constant contact with Mr. Armfield, our appraiser, and he is aware of the COBRA Bill and its potential implications, as well as the coastal construction setback line. However, unless there are sales that reflect a depressing effect caused by the impending Bill and the setback line, it will not show up in the appraisal. Commissioner Bird noted since the state owns the property on one end of the subject property and we own on the other end, if 8 I] I= we are successful in acquiring the property, he.felt the title should be on a proportionate basis and that we should get a clear- _ cut title to whatever we pay for. He believed we will end up developing and managing the state's portion anyway. Attorney Barkett felt it is even possible since we are condemning it, that we will have the title to the whole parcel and just lease -a portion back to the state, which they, in turn, will turn over to us for management. Commissioner Bird noted that with this parcel adjoining the other property the state owns and we own, we could end up with 3,000 continuous feet of oceanfront in that area. SANDRIDGE GOLF COURSE - ROUGH AREA CLEAN-UP Commissioner Bird referred to the following -memo: TO: Honorable Members of the Board of County Commissioners THROUGH: Charles P. Balczun DATE: June 29, 1987 SUBJECT: GOLF COURSE ROUGH AREA CLEAN-UP FROM: Bob Komarinetz ' Director of Gol (+� I have contacted Guettler.Construction Company to come out to the golf course for a proposal to clean up the rough area with some heavy equipment. This clean up work is necessary in order to help keep golfer's moving at a much greater pace. A chopper to remove palmettoes at $37.00 per hour and a loader to have debris hauled away at $45.00 per hour is proposed. Guettler Company estimates a total cost of between $3,500 and $4,000. ON MOTION by Commissioner Eggert, SECONDED by Com- missioner Wheeler, the Board unanimously added the above matter to the agenda. 9 J UN 331 0 1987 BOOK 0 � Ka 6 16 JUN 3 0 1997 Bou 68 F,{ ,l r- 6'7 7 Commissioner Bird advised that there is some very heavy palmetto growth right on the edge of the fairways, which makes it very hard to locate balls and results in slowing up play on the course considerably. Therefore, he and Golf Director Komarinetz feel the clean up work described above is warranted. The work is estimated not to exceed $4,000, and there are funds left to cover this. ON MOTION by Commissioner Eggert, SECONDED by Com- missioner Bird, the Board unanimously authorized the above described work to be done by Guettler Construction Company at a cost not to exceed $4,000. There being no further business, on Motion duly made, seconded and carried, the Board adjourned at 9:35 o'clock A.M. ATTEST: Clerk 10 _ � c Chairman