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HomeMy WebLinkAboutMinutes_Miscellaneous_09/30/1996_Finance & Administration Committee c VILLAGE OF TEQUESTA Post Office Box 3273 • 357 Tequesta Drive Tequesta, Florida 33469 -0273 • (407) 575 -6200 3 Fax: (407) 575 -6203 - o 9 4 f�cH coUNty VILLAGE OF TEQUESTA FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30 1996 I. CALL TO ORDER AND ROLL CALL The Tequesta Finance and Administration Committee held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Monday, September 30, 1996. The meeting was called to order at 5:00 P.M. by Chairman Joseph Capretta. A roll call was taken by Betty Laur, the Recording Secretary. In attendance were the following Committee members: Joseph Capretta and Michael R. Meder. Also in attendance were Village Manager Thomas G. Bradford, village Clerk Joann Manganiello and Department Heads. Committeemember Mayor Ron T. Mackail was absent due to his attendance at another meeting. II. APPROVAL OF AGENDA Committeemember Meder made a motion to approve the agenda as submitted. Chairman Capretta seconded the motion. The vote on the motion was: Joseph N. Capretta - for Michael R. Meder - for The motion was therefore passed and adopted and the agenda was approved as submitted. III. COMMUNICATIONS FROM CITIZENS (NON-AGENDA ITEMS) Recucled Paper VILLAGE OF TEQUESTA Post Office Box 3273 - 357 Tequesta Drive Tequesta, Florida 33469 -0273 - (407) 575 -6200 - z Fax: (407) 575 -6203 o 9 4 f,C co "4" VILLAGE OF TEQUESTA FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 I. CALL TO ORDER AND ROLL CALL The Tequesta Finance and Administration Committee held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Monday, September 30, 1996. The meeting was called to order at 5:00 P.M. by Chairman Joseph Capretta. A roll call was taken by Betty Laur, the Recording Secretary. In attendance were the following Committee members: Joseph Capretta and Michael R. Meder. Also in attendance were Village Manager Thomas G. Bradford, village Clerk Joann Manganiello and Department Heads. Committeemember Mayor Ron T. Mackail was absent due to his attendance at another meeting. II. APPROVAL OF AGENDA Committeemember Meder made a motion to approve the agenda as submitted. Chairman Capretta seconded the motion. The vote on the motion was: Joseph N. Capretta - for Michael R. Meder - for The motion was therefore passed and adopted and the agenda was approved as submitted. III. COMMUNICATIONS FROM CITIZENS (NON-AGENDA ITEMS) Kenic1cd Paper FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 2 ------------------------------------ There were no communications from citizens. IV. REVIEW OF REVERSE OSMOSIS TREATM33NT FACILITY FINANCING OPTIONS Village Manager Bradford explained that this meeting had been called to discuss problems associated with financing a new reverse osmosis treatment facility. Present for this discussion were the project engineers, Mr. Reese and Mr. Jenson; Financial Advisor Clark Bennett; Water Department Manager Tom Hall; and Finance Director Bill Kascavelis. Village Manager Bradford reported that a test well had produced 90* of the data sought by the engineers. ENCON would not let the Village to tap into the sewer system; therefore, the test had been conducted according to instructions provided by SFWMD. When the pit began to leak the test had to be halted; however, the engineer was satisfied that enough information had been obtained and that the quantity and quality of the water at the 1,740 -foot depth were good and would produce approximately 1,800 gallons per minute. Mr. Reese explained that 1,200 gallons per minute were needed per well. Mr. Reese reported that not all water quality test results had been received, but based on the information received to date the quality appeared good. Village Manager Bradford commented that technically everything was ready to proceed. Chairman Capretta questioned why the 1.3 million gallons had been disposed of, to which the Village Manager responded that SFWMD had required that it be pumped back into the well after tests were completed, which was what had been done. Village Manager Bradford explained that the engineering firm had completed preliminary design and needed authorization to proceed with final design of the entire project and payment of an additional $200,000 - $300,000, which could be funded without a bond issue. Village Manager Bradford explained that the real constraint FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 3 ------------------------------------ was the Jupiter issue. Jupiter- had objected to issuance of the permit needed by the village for R.O. discharge, and Village Manager Bradford commented that since the reason for that objection was frivolous, that he expected them to object to every permit needed for this project. In light of the expectation that Jupiter would attempt to stop issuance of each permit, the question was whether the village was willing to risk going into debt for 7.9 million dollars, whether this would present a problem with a standard bond issue, or whether the Village should look at interim financing options. Chairman Capretta commented that Jupiter had objected to the brine because of where the Village wanted to discharge, which seemed trivial; but they were also objecting because they said this was an indication that Tequesta was trying to avoid purchasing water from Jupiter. This was related to the other lawsuit and Chairman Capretta stated he felt this reason was more to the point. Village Manager Bradford commented that as far as the Village knew in writing that Jupiter's objection was strictly economic -- that they feared Tequesta's R. O. plant was an attempt to become free and to ultimately violate the bulk rate agreement with them; however, Tequesta believed that was frivolous because the Village had the facts to show that the demand curve required the Village to have a plant under construction in order to meet Health Department regulations. Chairman Capretta inquired whether Jupiter could legally stop the R.O. plant, to which the village Manager responded they had slowed the process. Chairman Capretta questioned why the discharge problem needed to be solved at this time since the first discharge would not be done for a year. Village Manager Bradford explained that his concern was whether the Village wanted to proceed with the biggest project in village history knowing that Jupiter was attempting to stop it. Chairman Capretta's repled only if there was a risk that Jupiter could really stop the project instead of just slowing it down. In response to Councilmember Meder's question regarding FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 4 ------------------------------------ whether data provided to the Health Department had also been provided to Jupiter's attorney, Village Manager Bradford explained that Attorney Hawkins had forwarded the data the previous week. Councilmember Meder inquired what the village had done to enlist help from the Health Department to fight Jupiter's objection to the issuance of the discharge permit. Village Manager Bradford explained that nothing had been done because the Health Department had never really been sure where the Village stood because of the Jupiter contract, and contacting them to enlist their help would alert them to the fact that the Village was in violation of the 80%- and 90% requirements, so that they might fine the Village. Water Department Manager Tom Hall explained that when demand reached 90% the village was required to have a new facility under construction; when 90W was reached the Health Department had the authority to prohibit the village from installing any new mains or any new connections until the new facility was completed and on line. Mr. Hall stated that 89* had been reached, and if any long -term drought occurred the percentage would go higher. Chairman Capretta commented that he had seen no legal indication that building a reverse osmosis plant would in any way affect the Jupiter water contract, and that Tequesta needed the R.O. plant in order to comply with the water contract they had. Village Manager Bradford explained that the Village would go to court within the next thirty days on the false charge that Tequesta was building an R.O. plant to violate the Jupiter contract, and that the Village attorney would be satisfied that the data he planned to present would stand up in court before going to court. Village Manager Bradford explained that Jupiter's objection to DEP was economic, therefore Tequesta's attorney believed Tequesta would prevail, and DEP had told the Village off the record that the Jupiter objection was a joke. Village Manager Bradford stated that the expectation that Jupiter would attempt to stop or slow the process at each hurdle could affect the perc chart and the related bond issue, and that he wanted to be sure the Committee was comfortable with the FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 5 ------------------------------------ game plan as proposed. Village Manager Bradford commented that the Village was a month behind on the perc chart prepared by Financial Advisor Clark Bennett because of the action Jupiter had taken. Mr. Bennett explained that he had spoken with Finance Director Kascavelis and Engineer Bill Reese several times regarding this matter. From his experience with DEP, Mr. Bennet believed they could only rule on environmental protection issues at their administrative hearing, and stated that he did not know how fast they might move and when the hearing officer might make his judgement. Mr. Reese commented that depended upon the vigor of the opponent as well as how vigorously Tequesta pursued the matter. Mr. Bennett commented that he did not believe any bond counsel would sign off on issuing tax exempt municipal securities- - long term bonds - -under the present clouded situation, and that in his opinion the Village should not even consider issuing long -term debt until required permits were in hand. Mr. Bennett explained that the village was in jeopardy because they could not build the plant without the permits, and if the plant could not be built the debt service could not be paid, which would lead to default on the bonds. Mr. Bennett suggested that another way to proceed could be to finance interim funds costs by interfund transfers; however, he did not know if that was possible. Mr. Bennett explained that for other municipalities when such a problem existed, he had gone to a bank to ask for a standby line of credit on a tax exempt basis which could be drawn on as needed. when the problems with Jupiter were resolved, the bank debt would be paid off by including the outstanding balance in the long -term bond issue. Mr. Bennett did not recommend Bond Anticipation Notes because debt service would be required on the total amount. Mr. Bennett advised that although interest rates were important that they were still relatively low, and they were not as important as the fact that the Village was at the trigger point where they must begin construction or violate Health Department regulations. FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 6 ------------------------------------ Bill Reese anticipated at least two more points where Jupiter might file an objection, which would be when the Village applied for the Environmental Resource Planning Permit and for the plant permit itself. Mr. Reese explained that his firm was trying to overlap the preliminary and final design phases and expected both to be completed by April or May, 1997, after which money for the plant construction would be needed; and that the first payment would probably have to be made in September. Mr. Bennett explained that there were federal tax constraints regarding borrowing of money by a municipal government, one of which was a spend down provision requiring the municipality to spend down at least 80W of the proceeds of the bonds within three years. If they did not, a tax problem would be created. However, any temporary borrowing, such as a line of credit, would not be impacted by that rule. Mr. Bennett stated that therefore it would not be wise to borrow now for a bond issue in anticipation of resolving the problem within a few months; in addition, debt service would need to be paid. In response to Chairman Capretta's inquiry of the construction time needed, Mr. Reese responded that it would be 15 to 18 months from start of construction to operation of the plant. Mr. Reese expressed concern that a couple of dry weeks could cause the demand percentage to go to 100W in a hurry, and clarified that ground breaking would be considered the start of construction. Chairman Capretta inquired whether there was any other way to get more water other than from Jupiter. Village Manager Bradford responded that one way would be to violate permit limits from the District. Mr. Hall cautioned that could cause salt water intrusion. Chairman Capretta commented that the Village should be looking at any place else they could get water. Village Manager Bradford stated that the Village could work in conjunction with the District to find relief until the R.O. plant came on line. FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER. 30, 1996 PAGE 7 Mr. Bennett commented that he had worked for a town in Broward County attempting to do a similar project where a neighboring community had objected, so that the town felt they should validate their bonds. Mr. Bennett explained that this was a course of action that the Village might want to consider, and was in actuality a friendly legal suit wherein the village would sue and prove their right to issue bonds as a legally constituted municipal government. Anyone could appeal the suit, which was done in the case he referred to. The appeal was heard by the Supreme Court, and took more than a year. Mr. Bennett warned the Village not to enter into this transaction without validating, since they could be in serious trouble if they did not. Mr. Bennett advised that the Village should consult with their Village Attorney and with their Bond Counsel to make a decision when they would authorize the bond issue via resolution, and then if they agreed, to proceed with validation. The validation would provide some protection because if Jupiter did appeal, it could take a year, during which time the village would be forestalled from doing anything. Councilmember Meder asked whether the village could sue Jupiter for depriving the Village of the use of money they had borrowed, and for causing additional costs to be incurred such as recurring fines by the Health Department for violations, etc., because of their frivolous action. village Manager Bradford explained that the village could sue, but it was unknown whether it would stand up in court, since the village had learned from past experiences that the government was a target for many people who were not righteous in their attacks and that many times even if a case was found to be frivolous that there was no recourse for the government. Councilmember Meder commented this was not a private citizen exercising their constitutional right to sue, but was a well thought out campaign by another government entity. Chairman Capretta stated that validation was a good suggestion, and that because this would never end FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 8 ------------------------------------ until the lawsuit over price was won that the Village should do whatever could be done to accelerate that case. Village Manager Bradford stated that he would ask the attorneys about validation of the bonds and that staff would proceed with interim financing. Chairman Capretta asked that Village Manager Bradford also contact the attorneys to accelerate the lawsuit with Jupiter. Bill Reese described the test well, commenting that the pit was not as large as desired by the engineers and that they had wanted to pump longer and harder. After alleged lowering of the pit, the District halted testing and subsequently requested that two wells be drilled, which had been done, and that those wells be monitored weekly for one month. At the present time two cycles had been completed, with no indication of any abnormalities. Mr. Reese explained that the plant would require two wells for the first train, of which one would be a backup. Each train would require one well, and one standby well would be needed to back up all the trains, so that a total of five was planned; however, Mr. Reese commented that there was a possibility that with the volume indicated by the testing that the number of wells could be reduced by one. This would not be known until more wells had been drilled. Chairman Capretta questioned whether more pressure and better quality of water would result in lower operating costs. Mr. Reese explained that electrical consumption would be less, and assuming that chloride was the only limiting factor that a 10%- reduction in electrical use would only result in approximately 6$ actual cost reduction. Village Manager Bradford explained that this Committee should make a motion to approve a recommendation to the Village Council, and that the engineer would be requested to provide a proposal for final design and all permitting associated therewith; the Finance Director and possibly Mr. FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 9 ------------------------------------ Bennett would make arrangements for an interim line of credit at a bank, or whatever financing Mr. Bennett felt was best for the Village; and that he would consult with the attorneys regarding validation, and lawsuit acceleration. Committeemember Meder made a motion that village Manager Bradford proceed along the path he had just outlined to provide interim financing and continue engineering for the R.Q. plant. Chairman Capretta seconded the motion. The vote on the motion was: Joseph N. Capretta - for Michael R. Meder - for The motion was therefore passed and adopted. V. REVIEW OF OPTIONS FOR INCREASING COST OF HOLDING VACANT LAND Village Manager Bradford explained that this item was listed as the second of the top five priorities of the Village Council. Three options were suggested: 1) Special assessments 2) Creation of a Community Redevelopment Agency 3) Special Districts Village Manager Bradford explained that the problem with a CRA would require inclusion of developed land which could be construed as blighted. Special districts would be a possibility, but must be put together for specific items such as roads, fire rescue, etc. The simplest and easiest alternative would be through special assessments. State statutes allow special assessments for hard costs for infrastructure -type projects, such as a road, a sidewalk, landscaping, streetlights, parking facilities, etc. Each property owner benefiting from by the project would pay their proportionate share. FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 10 ------------------------------------ Chairman Capretta questioned whether stormwater runoff from the Dorner land caused flooding. Village Manager Bradford responded that the land had been sloped to send water to an underground retention area, and did not contribute to flooding problems. Councilmember Hansen, who was present at the meeting, commented that since the vacant land was not impervious, those property owners did not have to contribute to the Stormwater Utility. Chairman Capretta discussed reputations of local builders. village Manager Bradford reported that Mr. Van Brock had been one of the purchasers of the Fashion Mall shopping center from Ed Nelson, and also that Mr. Van Brock had commented to Mr. Bradford that he planned to go forward with his plan to build 200 apartments. Mr. van Brock had indicated that his partner in the apartments was one of the three finalists for the West Palm Beach City plan and if chosen by West Palm he believed the partner would back out of the apartment project even though the partner had indicated he could do both. Mr. van Brock had stated his intent to move forward even if his partner withdrew. During ensuing discussion regarding how much the Village could help themselves by assessments placed on Dorner Trust vacant land, village Manager Bradford explained that whatever amount was assessed would be used to provide the specified improvements and there would be no financial gain to the village. The village Manager estimated that on a $1,000,000 assessment project that the portion assessed to Dorner Trust might be $750,000. Chairman Capretta expressed his desire to make the owners of the Dorner Trust apply pressure on Mr. van Brock to build apartments by increasing the cost to hold the vacant land. village Manager Bradford commented that the assessment concept was the most valid way to increase their overhead, and if the Committee desired to do this that he needed to know the kinds of projects they would like to do. Councilmember Meder inquired what would happen if a multiyear project was started and then the land FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 11 was developed during the first year, to which Village Manager Bradford responded that a special assessment bond would be issued, landowners would have an opportunity to pay all of their share initially or to pay a portion initially and finance the remainder, and the Village and residents would not pay any interest or administration costs since those would be included in the assessment. Councilmember Meder commented that the Village owned the library property, and questioned whether there was any Village -owned land where a parking garage could be built. Village Manager Bradford responded that there was not, however the FEC Railroad could sell the strip of land from Old Dixie to the propane gas tank, and that he had also considered contacting Gil Roberts, Executive Director of Tri Rail, to tell him of the availability of the BRITT building which could be converted into a train station. The Village Manager expressed his opinion that getting the train station would be a plus for the Village. During ensuing discussion, Councilmember Meder suggested that a better location would be on Village Boulevard or at Tequesta Drive and Dixie Highway where shops or something else in addition to the train station could be built. It was suggested that Mr. Van Brock could build a parking garage at the corner of Village Boulevard with a catwalk over to the train station. Village Manager Bradford commented on the possibility that the land for the train station might be shown to be a direct benefit to the owner of the vacant land, that the Village could purchase the land and assess the Dorner Trust because they would benefit, and notify Tri Rail that the Village had land available for their train station. It was the consensus of the Committee that the Village Manager work with the engineers on possible assessment projects to be submitted to the Committee for their review. Another possible project mentioned was making a road out of St. Jude's drive to relieve future traffic problems. Chairman Capretta suggested that the road could go along the FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 12 new DiVosta project coming out at the location of The Flame; and also that it could either extend to Tequesta Drive or stop and go to the library. Councilmember Hansen questioned whether the Dorner Trust could provide paving for a walkway at the northwest gate of the DiVosta project so that people could walk to the library or to the post office. Chairman Capretta commented that he had discussed traffic concerns with Mr. Divosta, who had indicated that after the units were sold out that the Village could look at that, however, people really wanted gated communities for security with only one exit in and out. village Manager Bradford was directed to come back with engineering projects. V. ANY OTHER MATTERS There were no other matters to come before the Committee. VI. ADJOURNMENT Councilmember Meder made a motion to adjourn the meeting. Chairman Capretta seconded the motion. The vote on the motion was: Joseph N. Capretta - for Michael R. Meder - for The motion was therefore passed and adopted and the meeting was adjourned at 6:07 P.M. FINANCE AND ADMINISTRATION COMMITTEE MEETING MINUTES SEPTEMBER 30, 1996 PAGE 13 ------------------------------------ Respectfully submitted, Betty Laur ATTEST: Recording Secretary Joann Mangani to Village Clerk DATE APPROVED: