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Home My WebLink About9/14/1987Monday, September 14, 1987 The Board of County Commissioners of Indian River County, Florida, met in Special Session at the County Commission 0 Chambers, 1840 25th Street, Vero Beach, Florida, on Monday, September 14, 1987, at 10:30 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 and announced that the purpose of the Special Call meeting is to look at the long term debt analysis which has been prepared by Mr. Art Diamond of M.G.Lewis & Co. in conjunction with OMB Director Baird. Mr. Diamond confirmed that he has worked with staff on this and has tried to use numbers that have some validity to them. By and large what he is attempting to do here is to give the Board an overall look at the county's long term debt situation, and he has tried to break it down into what he felt were logical areas - the immediate long term debt needs - needs over the next 2-3 year period - an estimate of future needs - and then revenues generated and bondable capacity. Mr. Diamond then used a projector to display charts and graphs, starting with Section A dealing with existing long term debt and the relationship of the various categories: ROCK 69 PAGE 424. S E P 141987 9 C1112, W C3 pa INDIAN RIVER COUNTY CD Existing Long 'Perm Debt o Average m Initial Amount Interest Final Boni urc Bond Security g mown' . -. Remainine Ralc Maturity Itcntainine Ralin Pledee Various Water &Sewer $ 9,215,100 $ 9,068,500 5% 2017-2024 34 Ycars.• • � Gross Water & Sewcr 11-evenue Bonds Revenues' ,. (1 issues) (FHA) Water & Sewer Revenue 7,215,000 4,190,575 • 10% 1995 81years "Special Assessments Londs (2 issues) (SR60) Solid Waste Disposal 1,815,000 1,170,000 5.3% 1994 7 Ycars A/A .. Net Revenues, Guaranteed System Revenue Entitlement Bonds Capital Improvement 9,855,000 9,625,000 89% 2005 18 Years :..Aaa/AAA. One-Half Cent Sales 1'ax;=, Revenue Bonds (2 issues) 3;655,000 3655,000 7.3% 2005 18 Years Insured -Revenue N Recreational Revenue 2,720,000 2,720,000 7.5% 2015 '28 Years ' . NR/AAA . ' Net Revenues, Race Track; Bonds (Sandridge (InsuYed) • Revenues Golf Course) General Obligation.: 5.000.000 1.125,000 6.5% 1988 1 Year 'A/A. Ad-Valorem Tax ltevenuls Bonds (Beach Bonds) $39,475,100 $31,554,075 7.4%* 20 Years** * ',Average over-all interest rate ' ** Average over-all bond life General Obligation debt is approximately 3.69o.'- - of total 'outstandingLLJ ; Go P3.. • Xxistiing Long Term Delrt. $31;554,075 3:57% 1328%. y IN ON. L..Vvfl . 41 •074 16dJ w� Revenue .� # ° '/� Sales Tax Assessment .. 42.097. Chairman Scurlock had two questions related to the first sheet. Our Farmers Home 9 million issue shortly will go to about 18 million with our Gifford project, and he wondered if we have been looking at an FmHA offer to discount these issues. Mr. Diamond confirmed that we have, but stated that it is his understanding that you can't utilize bond proceeds to take these bonds out for the discount, which means you would have to borrow real money, and it was decided it isn't worth it. Chairman Scurlock then noted that there is seven years remaining on the Landfill issue for the first cell, and he believed the actual life of that cell now has been exhausted. a SEP 14 1987 ' BOOK 69 PAGE426 S E P 14 1967 BOOK 69 -PACE 427 It, therefore, appears we have a bond issue where the issue was longer than the Fife of the facility it funded. Typically across the country landfills are constructed and end up closing prior to having enough revenue to support the closure, and the Chairman felt that highlights the need to include monies for closure through a surcharge of some kind when we go to the next cell. OMB Director Baird wished to point out that the first call date on those bonds is in 1988, and staff will be evaluating that and then will come back to the Board with a recommendation. Mr. Diamond then reviewed the percentage chart of existing debt and stated that he felt the County's outstanding debt picture is a fairly reasonable one. Mr. Diamond next referred to Section B which deals with immediate long term debt needs, noting that one issue was left off the top list - the Rockridge Sewer issue as they did not have the figures for it; it is an EPA grant type situation and a revenue type issue. The top list contains both revenue supported issues and tax supported issues, and the immediate long term debt needs are as follows: Indian River County flnunediate Long; Term Debt Needs P a rl►ose Gifford Sewer Expansion (FHA) Landfill Expansion North County Sewer Expansion West County Sewer & Water Expansion Indian River Boulevard North Petition Paving Jail, Phase III County Library Systcm South County Part: Facility TOTAL Approximate Amount $9,200,000 6,500,000 7,500,000 2,000,000 2,000,000 2,000,000 4500,000 50(X),000 3,100,000 3 Possible Pledge Gross Water and Sewer Revenues Net Revenues, Special Taxing District Revenues Special Assessments Special Assessments Gas Tax or Special Assessment Gas Tax or Special Assessment One -Half Cent Sales Tax Ad Valorem Tax Revenues Ad Valorem Tax Revenues 0 � � r Other Immediate Long Term Debt Needs Court Facility Downtown Redevelopment Additional Administrative Offices Health Facility Jail Phases IV and V Road Infrastructure Development of Additional County Parks Wetlands Purchase North Beach Utility Purchase Chairman Scurlock asked if the 2 million shown for Indian River Boulevard North is net after impact fees are used as that north extension obviously is going to require substantially more than 2 million dollars. OMB Director Baird advised that is the amount they felt they might be short as far as cash flow is concerned. They did not take impact fees into consideration as it is too difficult to determine what they will amount to because of the many factors involved; also, you can't bond based on impact fees - you can bond on gas tax monies. The 2 million is what we would have to borrow if we didn't have enough built in our gas tax money. Based on our cash flow projections, if we used all the gas tax revenue in Fund 109, we would probably need 2 million additional, and we would bond the gas tax revenues to cover the 2 million. Chairman Scurlock noted that you can use impact fees to retire the debt; you just can't use them as a primary pledge. He continued to discuss impact fees and zones, and noted that we may be required by the new law to acquire R/W and to pay for it, and what we projected originally did not include large sums for R/W acquisition. The Public Works Director has advised him that R/W acquisition makes up almost 50% of the cost of the project; so, we may have to direct staff to work with our consultant to come up with revised impact fee numbers that include R/W acquisition or else be faced with a substantial shortfall. The Chairman felt staff should move immediately to revisit our impact fee structure. L_ SEP 141987 4 - aov :. 69 PAGE X28 S EP 141987 BOOK 69.. PAGE 429 - On Petition Paving, the Chairman believed we should look very closely at non -participation by the county and have the petitioners bearing 1000 of the cost. In the past all costs were not included - i.e., we did not include base material, and we, therefore, actually were paying more than 250. The Chairman noted that it appears from the chart shown we are talking about more than doubling our debt. Mr. Diamond agreed, but reiterated that the list does not include Rockridge. Also, the bottom list shows things that are needed in the future, and they all are vital things for which they do not have the numbers. The Chairman asked where we are in regard to coming up with user fees for development of parks. Director Baird advised that study is on hold until we decide how we are going to handle recreation - whether we are going to contract with the City or have our own recreation department. it is necessary to determine which way we are going before we can come up with a user fee. Chairman Scurlock asked why we can't move toward impact fees. Whatever the improvement will be, City or County, it will be in that particular zone, and he felt strongly that we are going to have to go toward an impact fee for recreation and parks because we are going to have to set priorities, and he felt we have to build a courthouse and expand the jail ahead of developing more recreation facilities. He believed we have enough park land for our existing population. OMB Director Baird noted that we had a full study authorized 0 and staff will continue to work on impact fees and bring it back separately. Commissioner Eggert commented that beyond considering just -- the acquisition of land, etc., we also need to bill out what these various projects will cost to develop and what they will cost to man. It is fine to go with the jail, for instance, but now we need extra personnel. 5 0 OMB Director Baird agreed that when we talk about a larger court facility, that will involve more personnel also; it is the same for all these expenses. Commissioner Bird believed the $3,000,000 figure shown for the South County Park facility is all inclusive - acquisition, capital improvements, etc. Discussion continued in regard to charging for recreation and the Chairman noted that the City charges for use of the tennis and racquetball courts at Memorial Park and he felt we will have to pattern after that. Chairman Scurlock emphasized that what we are facing in- volves phasing; it will not all be done at once. Commissioner Wheeler believed that the downtown redevelop- ment project will require participation by the merchants and those who own property there. Commissioner Eggert commented that she would like to talk to the Hospital Board about the new health facility as she felt the best location for that facility would be on the hospital campus and possibly they could work with us on this. Discussion ensued in regard to the new Health Director and his needs. Mr. Diamond next referred to the Pledge Summary chart: Revenue Supported Issues INDIAN RIVER COUNTY Immediate Long Term Debt Needs Pledge Summary \Fater R Sewer Special Taxing District ,Special Assessment Gifford $9,210,000 Landfill S6=000 North County Sewer 57$00,000 i West County Sewer 2,0001000 & Water Petition Paving 2,0001000 'Each sl$XX),(XX) of long term debt: =.0249. mit (30 year bond issue @ 8.057o) =.0663 mil (5 year band issue Gtr 600^/5) SEP 14 1-9-8-7 - Tax Supported Issues* Cas Tax Sales Tax Ad Valorem Indian River Jail, Phase III $4,500,000 Library $5,900,000 Blvd. $2,(00,01X) South County Park $3,100,000 6 - 'ROOK 69 FACE 4"JuI 'SEP 14 1997 BOOK 69 AGE 431' Mr. Diamond stated that if the Board utilizes these taxes this way, it will have an impact on the General Fund. Chairman Scurlock noted that he would like to move the South County Park to the other side where it is revenue supported through some sort of user fees. He continued to stress that we can't kid ourselves - the court facility and jail have to be done first, and we must consider moving toward impact fees for recreation. Commissioner Bird asked if such an impact fee would be similar to the transportation impact fee where you can borrow against it because you would have a guaranteed revenue source. Chairman Scurlock agreed that it generates money, but you can't use it as the primary pledge, and Director Baird confirmed that you would have to have a secondary pledge, but it would definitely strengthen your position. Chairman Scurlock estimated that only about $150,000 per year could be raised by a recreation impact fee based on 1,500 new units at $100 per unit. Commissioner Bird hoped that impact fees could cover land acquisition and improvements and then user fees would cover operating costs. Commissioner Eggert inquired about the status of Golden Sands, and Commissioner Bird advised there is money in the budget for the County's portion, we have a grant from the state, and it is in the final construction drawings. Chairman Scurlock asked about the land next to the Tracking Station Park we had considered disposing of, and Commissioner Bird advised that the appraisals are finished and should be coming back to the Board shortly. OMB Director Baird reported that on Golden Sands we need the -_ money up front to do the initial work and that is coming out of the Park Development fund and then the grant. There will be very little impact to the taxpayer the way we are doing it. 7 Chairman Scurlock brought up Round Island Park, noting that he has had many comments, including that it is a St. Lucie County park - possibly we should get rid of it, etc. Commissioner Bird informed the Board that the Parks 8 Recreation Committee has discussed it a lot, and it is low on the priority list and in sort of a holding plan. We have built a boat ramp on the riverside and really haven't spent any money on the ocean side of the park for years. He emphasized that it is a valuable piece of property. It seems that St. Lucie County is progressing pretty well with the Save Our Coast program to get them to buy a large tract just beyond our border. He did believe the river side of the park has tremendous possibilities for the future since it has a deep water basin and access out to the waterway, and possibly it could lend itself to a user fee. Mr. Diamond reviewed the graph comparing the categories of immediate long term debt needs, and OMB Director Baird pointed out that Environmental and Recreation includes the library. Discussion ensued regarding revenues, the optional sales tax, the service tax, possible repeal, and various alternatives. It was emphasized that this immediate Long I erm ueoi Neeas .: in a state of flux. _ went •. $42;700,000: following Summary of Long $20000000•, ` $18,700,000 $180000oo' i $16000000 $14000000 $1200.0000 $10000000. r $9;;000. $8000000 n . $800,000 E.•• $60000Q0 $4,500,000 $4,000,000 .$4000000 • .$, $20000b0 $o Wafer &•3ewer '' Env. Solid Waste Capltal`Imp. Roads r Purpose Discussion ensued regarding revenues, the optional sales tax, the service tax, possible repeal, and various alternatives. It was emphasized that this is all in a state of flux. Mr. Diamond next went over the following Summary of Long Term Debt: 8 �� SEP 1 81 BOOK 69 PAGE'432 Ptirpose \\later and Sewer Capital Improvement Environment and Recreation Solid Waste Roads '1'0TA L Pledce Revenue Asscssmen t Sales Tax C.i.O. Gas Tax TOTAL A INDIAN RIVER COUNTY Stininlary of Long Terni Debt Existins Debt % Immediate Nerds % Total yo $13,259,075 42.02% $18,700,000 43.79%n $31,959,075 43.04% 13,280,000 42.08% 4,500,000 10.54% 17,780,000 23.94% 3,845,000 12.19% 9,000,900 21.08% 12,845,000 17.30% T. 1,170,000 3.71% 6,500,000 15.22% 7,670,000 1033010 - 4,000,000 9.37% 4.000.000 5.39010 $31,554,075 $42,700,000 $74,254,075 $12,958,500 41.07% $15,700,000 36.76% $28,658,500 38.601/6 4,190,575 13.28% 9,500,000 22.25% 13,690,575 18.44% 13,280,000 42.08% 4,500,000 10.54% 17,780,000 23.9496' 1,125,000 3.57% 9,000,000 21.08% 10,125,000 13.64% - 4,000.000 9.37% 4,000,000 539% $31,554,075 $42,700,000 $74,254,075 1 aI 11 Chairman Scurlock asked what the $9,000,000 under G.O. is for, and was informed it is for the South County Park. --The Chairman again stressed that he wants to keep the G.O. available for what he considers essential services, such as the jail, - courts, health, etc., not parks. He wished to know if the Courthouse Committee is looking at possible sources through the court system itself to fund new court facilities. Director Baird informed the Board that Hillsborough County has an $1,000 fee on a D.U.I which goes toward the jails, and he is trying to get information on this. He believed if you look at our outstanding debt, it can be seen that we are making an effort to take the burden off the ad valorem taxpayer. Mr. Diamond noted that the figures show that the debt would be more than doubled if all this were done at one time. OMB Director Baird pointed out that all this falls within two to three years and only takes into consideration those costs we can actually estimate at this time. He felt in the future before we start projects we should have a financial feasibility study done up front. Chairman Scurlock felt this chart is a bit misleading because it is not all in ad valorem taxes; it includes funds we have sources for such as water and sewer. He further noted that we passed a franchise fee, and he would like to look at possibly using that as a source of revenue. Director Baird commented the problem there is that he uses it as revenue to offset operating costs. Chairman Scurlock expressed his belief that the franchise fees will accelerate considerably, and he is saying let's not just paint the worst picture; there are some options available. Mr. Diamond then addressed Section C dealing with Estimated Future Needs: 10 BOOK 69 FACE ,34 S E nr' 14197 SEP 14, 1987 BOOK 69 FACE 4;35 INDIAN RIVER COUNTY Estimated Future Needs (to 2005) Water System $62,600,000 Sewer System 65,400,000 Solid Waste Disposal System 1120,000 Road Infrastructure 131,000,000 TOTAL $27020,000 Other Estimated Future Needs General Government ,$11,800,000 `Public Safety 32,400,000 Environment & Human Services 3,000,000 Culture and -Recreation 481 . O0.000 TOTAL $62,000 000 Mr. Diamond noted that since these needs are being estimated to approximately 2005, they necessarily are "fuzzy" figures and are just intended to indicate that in the next 17-18 years, the county may be looking at the needs listed. Commissioner Bird questioned where they got the figure for roads, which works out to about $8,000,000 a year, and Director Baird advised that it came from an impact fee study we had done. Chairman Scurlock noted that we were talking about having to include R/W acquisition costs, and if, for instance, we build a new King's Highway, or whatever will be a north -south route, we are talking about a tremendously expensive project. Director Baird pointed out that this figure also includes bridges, and we will need more bridges in the future. The Chairman believed the figures for Solid Waste are really conservative. Commissioner Eggert inquired about the cost for the new landfill cell, and Director Baird advised it is projected at 5.6 _ million plus costs to close the first cell. Commissioner Bird asked why we can't keep going higher on the cell we have now, and the Chairman explained that the limitation on height is determined by the slope on the side. If we had started with a larger base, we could have gone higher. In conclusion, Mr. Diamond went over the following summary _ of Estimated Available Bonding Capacity: Summary Estimated Available- Bonding Capacity (1) -(Assumed 20 year band, 795% (2)'average interest rate] Ad Valorem Taz: '$23,490,000 Local Option Sales Tax: • . ' 8;38slow Race Track: 1,315,000 Guaranteed Entitlement 4,145,000131 Franchise Fees: 7,880 000 Tourist Development Tax: ' 1,910,000 Gas Taxes: . 30,280,000 Local:Option Gas Tax'.. f0,030,000 Constitutional Gas Tax- 6,450,000 County -Gas-Tax. 3290,000. Transportation Impact Fees 10,510,000- - TOTAL.. $7.7,405,000 lt) For tax revenues only, does not include Water and Sewer System revenues,.. ' • Solid Waste Disposal System* revenues or Golf Course revenue `. (2) Based on current market conditions as of=September 2,1987: 131. Requires the redemption of "the Solid Waste, Disposal System Revenue Bonds, Series 1977 eNote: ":The use of any of the above tax. revenues for payment .of. debt service will impact upon the present use of lhese.monies in the General Fund of -the County. Mr. Diamond stressed that while these figures may look great, they are based on many variables and hypothetical situations, and the important thing to remember is that the use of any of these revenues for payment of debt service will impact the present use of these monies in the General Fund. Considerable discussion ensued regarding franchise fees, which the Chairman visualized as a tremendous source of future revenue. We have new systems springing up all over the county; he anticipated that we will have demands for service which we may not even be able to meet; and this is an additional potential source of revenue that is not ad valorem related. 12 n r� S E P 14 1987 BOOK 69 FAGS 436 r - SEP 14197 BOOK 69 FACE 4:x7 Mr. Diamond noted that it is fairly obvious that it will be necessary for the Board to set priorities. Chairman Scurlock brought up the possibility of considering the rate of return on utilities, especially since we haven't had a rate increase for five years. OMB Director Baird advised we will be looking into this but first had to get our feet on the ground; last year was the first year Utilities broke even. He agreed that we may have to do a rate increase. Mr. Diamond advised the Board that there was one other thing he would like to work with them on, and that is the possibility of getting an upgrading of bond rating. This would take a lot of work, and he did not know if it is even possible. Chairman Scurlock asked what elevating our rating by one level would mean, and Mr. Diamond felt possibly 25 basis points. The Chairman noted that we are talking about a quarter of a percent on possibly 70 million dollars, and he felt that would be worth pursuing. Mr. Diamond noted that if you go to bonding agencies and they don't know you, they look at you very carefully, but if you have been keeping them informed so they are familiar with you, you at least have an edge. Director Baird felt the Commission has taken a step in that direction by allowing him to increase his cash forward. Also, Finance Director Ed Fry got a Certificate of Conformance for the County, and that is very important. The Chairman congratulated Mr. Diamond and Director Baird on their presentation, and Commissioner Bird agreed that the format of the presentation was very simple and clear. - = There being no further business, on Motion duly made, seconded and carried, the Board adjourned at 12:00 Noon. --- ATTEST: C lerk- 13 w