HomeMy WebLinkAbout1990-11-07 - City Commission Workshop Meeting MinutesCITY Or TAMARAC
CITY COUNCIL
COUNCIL WORKSHOP MEETING
WEDNESDAY, NOVEMBER 7, 1990
Mayor Abramowitz called this meeting to Order on
Wednesday, November 7, 1990 at 9:30 A.M. in the Conference Room 1.
PRESENT•
Mayor Norman Abramowitz
Vice Mayor
Bruce
Hoffman
Councilman
Dr. H.
Larry Bender
Councilman
Henry
Rohr
Councilman
Henry
Schumann
John P. Kelly, City Manager
Alan Ruf, City Attorney
Kelly Carpenter, Director of Community 'Development
Patricia Marcurio, Office Manager City Clerk's Office
Mayor Abramowitz said one of the principles for Item 1 was not present
yet, and Tabled Item 1 pending his arrival.
Mayor Abramowitz said representatives of St. Malachy's Church and School
are willing to lend the City tables and chairs any time they are needed
at no cost. He said the City would need to pick them up and return
them. He said Council action is required to lend City equipment to an
organization.
City Manager Kelly said this is appropriate. He said it will only be
needed for one day and will be returned immediately following their
event.
Mayor Abramowitz said that Council's expression is that there is no
problem with lending St. Malachy's Church the spotlight and that Council
is pleased with the offer of the tables and chairs.
City Manager Kelly said he has no authority to approve lending City
equipment without Council approval. He asked Council if they would want
him to make these decisions with notice to Council without calling a
Special Meeting.
Mayor Abramowitz said he has enough confidence in City Manager Kelly's
decisions to know if Council action needed to be taken that he would not
do something without bringing it before Council. He recommended
approval of this to eliminate using City money and time for unnecessary
meetings. Council'.agreed to give permission to City Manager Kelly to
make this type of decision.
•� r = .� _ .
Mayor Abramowitz suggested that City Manager Kelly have a crossing guard
placed there on a 60 day trial basis with a report at the end of the
sixty days for proof of necessity.
Vice Mayor Hoffman asked if this was for the crossing of University
Drive or 75th Street.
Mayor Abramowitz said it would be for the crossing of 75th Street from
the University Club Apartments there. He said there is a tremendous
amount of traffic coming from the back entrance next to Waterford Place
going east to University Drive north and south. He said the residents
Page 1
City Council Workshop Meeting
11/07/90/KJ
at the University Club Apartments have indicated that are severaL
children using that route at present. He said last year, when they
requested a crossing guard, a guard was placed there and then removed
due to there being only one or two children. He said they claim there
are between 12 to 15 children now.
Vice Mayor Hoffman said this needs to be done by Resolution.
City Manager Kelly said it would be placed on the Agenda for Wednesday,
November 14, 1990 at 7:00 F.M. and Council agreed.
1. 1100e"ant G"flan4 Adult, rgre A ,Vinq rjRei4*;y [AC ,71,
PrgRpsal
City Manager Kelly said the City has given approval for a complex in the
Woodmont area. He said the City has been proceeding with the intent to
have an Adult Care Living Facility in Woodmont. He said it would be on
a 7 acre area consisting of a 300 bed unit. He said there have been
several extensions granted by Council to keep this Facility a
possibility. He said the deadline is approaching in mid --December and
they are anxious to move forward with this project. He said an
industrial development bond is in order to finance this project. He
said the proposed issuance is authorized by the Tax Reform Act and is
sponsored by the developer, which is a qualified 501-C-3 tax exempt
organization.
City Manager Kelly said the Industrial Development Bond; however, is to
be issued through the City at the expense of the developer. He said
there are certain selling points to it that City Attorney Ruf has
reviewed that raise some concern and needs to be reviewed and discussed
at a Public meeting. He said there are other factors that will be
discussed during the presentation.
Mayor Abramowitz said this project was first instituted four years ago
at which time he was the President of the Woodmont Country Club
Homeowners Association. He said at that time, this project was to be
located on Woodmont Golf Course and the petitioners presented theiz
proposal to the members of the Woodmont Homeowners Association. He said
the Board of Directors at that time, was in favor of this project. He
asked City Attorney Ruf if there would be a conflict of interest a. the
present time with him making decisions as Mayor opposed to when he was
acting as President of the Woodmont Homeowners Association.
City Attorney Ruf said there is no conflict of interest involved. Mayor
Abramowitz said he has no monetary interest and is not associated with
these people.
'vice Mayor Hoffman said he would like more information on the bonds, who
issues them, who is responsible for them and what the City's
responsibility is in this project.
City Attorney Ruf suggested an introduction of the petitioners as
follows:
Harry Rappaport, President of Woodmont Gardens, ACLF
Alan Gabriel, Attorney for Woodmont Gardens, ACLF
Clark Bennett, Vice President of William R. Hough & Company
Ira Cor, Vice President of Woodmont Gardens, Inc.
Mayor Abramowitz said this has come before the Council in the past. He
said he is very interested and there are many questions to be answered.
Mr. Bennett said the bonds are Industrial Development Bonds that are
authorized under the Tax Reform Act of 1986. He said that Act was a
rather restrictive restructuring of what could or could not be done
under existing tax laws. He said it tremendously restricted the ability
of a municipal government to issue bonds. He said the Industrial
Development Bond is one of those permissible acts that a City may
undertake for a number of reasons. He said the City of Tamarac issues
the bonds.
Page 2
City Council Workshop Meeting
11/07/90/KJ
1
Mr. Bennett said the City is a conduit that is a municipal body that is
empowered to issue bonds for projects such as this. He said the
developer or the person building the project is responsible for the
bonds. He said there is no moral or other pledge of the City's ad
valorem taxes or any of the non -ad valorem revenue streams such as sales
taxes or guaranteed entitlements. He said nothing is pledged to these
bonds.
Mr. Bennett said what is pledged to the bonds are the earnings from the
project. He said the earnings from the project flow through a trustee
and are paid by the trustee to a bond holder. He said the City has no
responsibility in any way to administer the bonds. He said neither City
Manager Kelly nor any of his staff are involved in any administration of
the bond or any of its documents.
Mr. Bennett said the City authorizes the issuance of the bonds and the
City employs a Bond Counsel to represent the City. He said the Bond
Counsel's fees and expenses are paid for, as are all of the fees and
expenses of this transaction from proceeds of the bond issue. He said
there is no liability, monetary or otherwise, to become a part of the
City. He said interest payments and principle payments are made
directly to a trustee, and when the payments are received by the trustee
on the appropriate days, the trustee pays the bond holder. He said if
there is a default, it does not affect the City and the City is not
responsible for making any kind of payment to the bond holder. He said
this does not affect the City's credit rating.'
Vice Mayor Hoffman asked what happens if there is no profit to pay the
bond holders.
Jeffrey Miller, owner of Woodmont Gardens,, Inc., entered and joined the
meeting.
Mr. Bennett said should the developer or project fail, and the money is
not available to pay the interest on the bonds, the bonds would be in
default. He said the pledge is a first lien on the property. He said
the property is pledged or,there is a mortgage against that property and
the property would be sold. He said the bond holder takes that risk.
Mr. Bennett said he has been an underwriter for the City of Tamarac and
knows the bond ratings for the City and other items. He said unlike the
City of Tamarac's bonds that are rated and/or insured, these bonds will
not receive a bond rating nor will an insurance company insure them. He
said they are not normally the kind of bonds, unless there is an
extraordinary pledge of some other kind of support to the bonds, that
would receive any kind of rating. He said in the bond document, there
would be certain eventualities in the event of default provided for. He
said the City would be creating a loan to the developer through the
issuance of the bonds. He said the primary role of the City is to allow
the developer to borrow money at a lesser rate than that which he would
borrow from a bank or any other lending institution. He said the
developer would be borrowing at tax exempt rates.
C/M Schumann asked if the City is brought in as a party defendant in a
lawsuit, who defends that lawsuit and who pays the cost of it.
Mr. Gabriel said there would be an indemnification agreement between the
City and the developer as part of the agreement and the developer would
be responsible. He said there will be development agreements drawn up
as part of the bond agreement that will provide for the developer's
obligations as they relate to the City.
C/M Schumann asked if there would be any impact fees payable to the
City.
Mayor Abramowitz asked that issue be held for discussion later in the
meeting. He suggested to have the responsibility of the City be
discussed at present.
C/M Schumann asked what taxes would normally be on this property and who
would make the assessment to see that the City would receive an
Page 3
City Council Workshop Meeting
11/07/90/KJ
equivalent amount as to what it would receive if some other development
were built there insofar as ad valorem taxes.
Mr. Gabriel said he had made a proposal on behalf of the developer of
paying to the City $80,000 up front as financing fees to help the City
for purposes like this.
C/M Rohr asked why the City should do this and what advantage there is
for the City to issue bonds and supply low financing for the developer.
Mr. Bennett said this development has been before Council since late
1987. He said the developer has been attempting to get this development
Into the ground since the beginning proposal. He said circumstances
beyond their control have developed for various reasons. He said at
present, it is the economy that prevents financing. He said the
developer does not want to lose this development. He said the developer
has similar developments of this type in Dade County.
Mr. Bennett said the advantage to the City is to have the ACLF first,
because if this developer cannot build it, there is no one else
available that could be able to do it. He said it is a beautiful
development and it is one that everyone has accepted since the beginning
of the process. He said the City would get the benefit of ad valorem
tax increases and all else that is part of a new development coming in
and the proposals being made to the City are so the City would not lose
that benefit.
Mr. Gabriel said the City would be getting a first class facility that
will provide the services needed and income.
Mayor Abramowitz said he would like City Attorney Ruf's remarks
regarding the responsibility and liability of the project.
City Attorney Ruf said he is not an expert on these types of bonds;
therefore, he called in Howard Whittaker, currently with Greenberg Traug
from Miami, to assist him with this issue. He said Mr. Whittaker has
been to Tamarac twice to meet with him regarding this issue and he said
there is a Statute that indicates that the City is not responsible in
case of default. He said he has reviewed this carefully and there is no
obligation by the City.
Mayor Abramowitz asked if there is any responsibility on the part cf the
City if a default or failure occurs, whatever the case may be.
City Attorney Ruf said by Statute, the City is insulated from liability
or responsibility.
Mayor Abramowitz asked if this affects Tamarac's.standing in the bond
market as far as ratings are concerned.
Mr. Bennett said prior to 1986, before there were certain Statutory
changes in this law and before there were changes in what a City could
or could not do as far as Industrial Development Bonds were concerned,
it would have impacted the City. He said since then and because of the
nature of the changes, it is his experience that there is no impact on
the City. He said the bond rating agencies and insurance companies
fully know that the City is acting as a conduit and it has nothing to do
with the collections of the City's ad valorem taxes or the profitability
of the City's Water and Sewer Department or any other non -ad valorem
avenues. He said they all stand alone.
Mayor Abramowitz suggested viewing of a site plan.
Mr. Miller said some changes were made to the original site plan. He
said there is a proposed lake between the two buildings with little
patio areas within the courtyard areas.
Discussion was held regarding the proposed site plan.
Vice Mayor Hoffman asked if this project would have a nursing facility.
Page 4 1—
City Council Workshop Meeting
11/07/90/KJ
Mr. Bennett said there will be no nurses, but there will be assistants
to help them.
Mr. Rappaport said the doctors will be their own doctors. He said
dispensing of medication will be done by a -nurse.
Mayor Abramowitz said his interpretation of ACLF was the ability to
dispense without the ability to prescribe medications. He said C/M
Bender is also a resident of Woodmont Gardens and was not involved with
the Homeowner's Association at the time of the initial proposal.
V/M Hoffman asked how the land is acquired.
Mr. Rappaport said the land is already owned by Woodmont Gardens ACLF.
C/M Bender said the land was formerly owned by Florida Power and Light
and was sold by FPL and the sub -station had to be moved to Southgate
Boulevard. He said there has been some discussion made that there are
Statutory regulations covering this. He asked if the Statutory
regulations change, what protection does the City have and how would it
be handled.
Mr. Gabriel said once the City approves this and it is an ongoing
entity, the City is vested with the regulations under which it was
approved.
City Attorney Ruf said the bond documents would indicate that they
cannot look to the City.
V/M Hoffman said even if the regulations change the City would still be
protected.
Mr. Bennett said no matter what happens to Federal regulations and no
matter what changes they may make, the bond documents that are going to
be put in place that authorize these bonds, will provide for those
things now in effect that will insulate and protect the City. He said
those documents cannot be changed, unless all of the bond holders agree
that they can be changed however many bond holders there are. He said
these bond documents are what control the liability.
V/M Hoffman said the change could be done by the bond holders. Mr.
Bennett said only to the extent that it affects their receiving
interest, principle and the security. Mr. Gabriel said they cannot
change the terms of the documents.
V/M Hoffman asked if the bond holders have a meeting and unanimously
agree to something, can they state that the City.will have to assume
responsiblity. Mr. Bennett said absolutely not.
Mayor Abramowitz asked if the bond holders have a meeting and decide to
defer interest payments on this for five years and they all agree, that
would be alright and Mr. Bennett agreed.
Mayor Abramowitz said there is no way that anybody can change the
particulars once they are issued regarding the liability and exposure
and Mr. Bennett agreed.
City Manager Kelly asked how these Industrial Development Bonds differ
from the County and is the County issuing the same type with them being
a conduit.
Mr. Bennett said the County does act as a conduit also. He said William
R. Hough & Company is a member of the Broward County Health Facilities
Authority. He said any Authority created by the County can issue
Industrial Development Bonds. He said there is an ongoing issuance for
a Catholic Nursing Home in Broward County. He said the County is acting
through its Health Facilities Authority as a conduit for that issuance
with the entire sole purpose to achieve a lower rate of interest.
City Manager Kelly said discussions have been held regarding a one time
fee, such as an inducement fee of $100,000.00, to encourage the City to
participate. He said it was also indicated that this fee is to be paid
Page 5
City Council Workshop Meeting
11/07/90/KJ
to the City at the time of closing. He said at the closing of the bond
transaction, the City would receive a total payment of $95,000.00 plus
any actual out--of-pocket expenses the City has incurred.
Mr. Gabriel said he had originally proposed a one-time fee of $80,000.00
to the City. He said he then took into consideration the ad valorem
issue and he tried to give the City some kind of certainty of.what the
assessment may be and what monies it may be getting in the future. He
said he did that by taking today's assessed value as the property is and
tripled it. He said based on the tripling, he gave the City an up -front
fee for immediate payment, and gave his developer a period of 5 years
for which there would be no payments made to the City which would give
him the opportunity to get operating before his payments would be due to
the City. He said the benefit to the City is that the fee was paid up-
front.
Mr. Gabriel said commencing on the date taxes are actually due these
would be a new assessment payment made to the City that would Increase
every other year by 5%, whether there is a down -turn in the economy or
whatever, the City would get its money and the City would know what
money was to come in.
Mr. Gabriel said since that time, City Manager Kelly and he have had a
conversation and an indication was made for a change to that original
proposal and the counter -proposal was a $100,000.00 up -front fee. He
said basically one year no ad valorem taxes until the building is issued
a Certificate of Occupancy and the Tax Appraisers office reappraises the
property as a completed development. He said then the Tax Appraisers
office would show the value with a tax exempt and no payments being made
to the various governmental entities. He said the agreement was made
that if it was to be done that way, the developer would let the Property
Appraisers office reappraise the property as normal, let the City set
the millage as normal, and the developer would pay whatever would have
been paid if it were not a tax exempt entity to the City. He said the
only thing that the developer wanted to reserve was the ability to go
against the Property Appraisers office if they did not agree with his
appraised value. He said that concept is agreeable with the developers.
V/M Hoffman said a time limitation should be placed on this. Mr.
Gabriel said a time limitation would be on it by Law with the Tax
Appraisers office. He said language would be placed in the documents
that would provide for this and it would say, "Pursuant to today's laws
and abilities to question the Property Appraiser's assessment, we would
be permitted to do that". He said the City would receive payment no
matter what.
C/M Rohr asked the estimated dollar value of this project. Mr. Bennett
said they are talking about a bond issue of 12 million dollars.
Mr. Rappaport said the 12 million dollar bond issue is not the value of
the property. He Said involved in the bond issue are certain things
such as administrative costs.
V/M Hoffman asked if the value of the property would be around 8 or 9
million dollars. Mr. Gabriel said it would probably be around that.
V/M Hoffman asked if a development was to be placed on the same property
for an 8 or 9 million dollar project, what would the developers feels and
impact fees bring the City.
Mr. Gabriel said one thing the Council needs to realize is that this
development has already paid whatever fees were required of it when .it
originally was proposed in 1987. He said those fees have been held by
the City throughout this time, so when impact fees are questioned, this
has been paid until this point.
V/M Hoffman said he would like to know what the normal development
impact fee would be. He said if this has already been paid, it would
need,to be deducted from what the City would normally receive.
City Manager Kelly said this depends on the type of project.
Page 6
City Council Workshop Meeting
11/07/90/KJ
Mayor Abramowitz said regardless of the fact of what is being built and
how it is being built, he would like to be assured that if any other
development was built there, the City would get exactly the same amount
of money. He said there is no way that he would want to give any tax
concessions in any form to the project because of the nature of the
project.
Mr. Gabriel said this property was originally part of the Leadership
Housing, Inc., litigation and certain rights were brought through to
this developer as a result of the court order. He said this was all
packaged together at that time and provided for all of what was believed
to be the impact fees required by the City. He said he had the
impression that all fees associated to this project had already been
paid. He said City Manager Kelly had a summary prepared as to what was
due, if any, on this project and it was brought back with some items for
discussion. He said there is a question about local parks and
recreation, which was thought to have been taken care of. He said there
are questions regarding on -site beautification fees which was handled,
engineering fees and engineering bond fees which, if part of obtaining a
building permit, were not dealt with. He said everything depends upon
the discussion of the list being reviewed.
Mr. Gabriel said the future traffic needs are not verified. He said the
City has had over $226,000.00 paid since 1987 and has been, hopefully,
collecting interest. He said they always said they would provide the
City with some kind of financing fee for going through the trouble of
doing this which has always been acknowledged.
Mr. Gabriel said there has been no bond issue made by a Broward County
municipality to be able to determine where a fee was paid. He said
Deerfield had one, but no fee was paid to Deerfield. He said Broward
County has an annual fee rather than a lump sum fee. He said Dade
County has a lump sum fee, where a project of this type would be around
$50,000.00.
Mr. Gabriel said the fee with the City is now at $100,000.00 with the
understanding that all impact fees that have been discussed, have been
handled.
V/M Hoffman said he does not want them to pay more than anyone else, but
the City could get less than what a motel would offer which needs to be
worked out. Mr. Gabriel said they have committed from the beginning to
pay whatever they would be responsible to pay. He said there needs to
be an understanding between the City and the developer of what those
requirements are.
V/M Hoffman said at present, he has no objections to moving forward with
this project as discussed at this meeting.
C/M Bender said he would like to see a summation of everything
discussed.
C/M Schumann said Tamarac would be the City issuing the bonds. He said
there was some reluctance of insurance companies to underwrite this or
to insure them and he asked why.
Mr. Gabriel said unless these types of projects are extraordinarily
well -managed and well -financed, insurance companies have taken the
position that they are not interested in issuing a policy on this type
of facility. He said the reason is because, when dealing with the Water
and Sewer Department, the City has the ability to raise the rates
wherever they need to be raised to cover expenses and costs. He said
the City is not restrained by anything other than a political
environment to do that. He said there is an upper limit to appoint
where any individual facility can raise its rates and still retain its
clientele. He said costs can sky -rocket and they can still only raise
their rates so much. He said the upper limit says they can only go so
high and, if they cannot make those payments, or if they cannot service
their debt out of their net profit, there is a problem and that is what
the insurance companies and rating agencies are looking at. He said the
concern is that these types of problems could arise in the future.
Page 7
City Council Workshop Meeting
11/07/90/KJ
Mr. Gabriel said the buyer of these types of bonds will normally be
individual buyers; most are brokerages. He said this will probably be
placed with a very few institutional, sophisticated investors that
understand the risks and rewards in this kind of paper.
C/M Schumann asked if this would be the same as municipal bond of tax
fees. Mr. Gabriel said it will be tax exempt and will be a "municipal"
bond. He said it will be an Industrial Development Bond and will not
carry the same kind of security as if the City were to issue a bDnd for
street improvements.
C/M Schumann said these bonds would not be guaranteed by a.:usurety and
Mr. Gabriel agreed.
C/M Bender asked if the City can make the agreements so that it
perpetuates to the new buyer and City Attorney Ruf said yes.
V/M Hoffman asked why people would buy these bonds if they are not as
secure as general municipal bonds.
Mr. Gabriel said the rate is higher. He said the rate would be
approximately 10-1/4% tax exempt. He said the investor would look at
the substance of the developer and the management of the facility. He
said there is extensive investigation into those areas by the investor.
C/M Rohr asked how long of an extension would be needed. Mr. Gabriel
said he was going to ask for a one year extension which is typically
what the Code provides. He said the documents would not be prepared or
the bond issued by December 22, 1990. He said it takes approximately
120 days to issue the bonds.
Mayor Abramowitz said normal extensions are whatever are granted,
Mr. Gabriel said what will happen is that if this project does go
through for whatever reasons, they will have to figure out another means
of financing.
Mayor Abramowitz said he does not want to see figures only. He said he
would like a report on how much another project would bring in. He said
he would like to know if the developers have paid or owe and he would
like a total figure for this project.
Mr. Gabriel said they were prepared to offer the original $80,D00.00 up-
front with no strings attached and were prepared to go with the
understanding that the impact fees had already been paid to go to the
$100,000.00. He said with a question regarding impact fees now, he
feels they can still go with $100,000.00 and the impact fee question is
the only issue to be worked out.
Mayor Abramowitz said he does not want Council to get a set of figures
at present that will be changed later and asked City Manager. Kelly to
meet with the appropriate people to determine what is owed, if anything,
and bring that figure to Council for discussion.
Mr. Gabriel said after the numbers are worked out, he would do a similar
proposal to the one already submitted for Council to have somethinc in
writing.
Mayor Abramowitz agreed. He said the group met with the Woodmont
Homeowner's Association recently. He said he received a call from the
President of the Homeowner's Association indicating that he appreciated
the presentation by them. He said he wants to know all of the exact
facts.
V/M Hoffman said Council should give them the indication that If things
are as discussed at the table, Council is not opposed to it.
Mayor Abramowitz said an expression of interest has been shown by
Council.
City Manager Kelly said the discussion is regarding an inducement of a
$100,000.00 fee, payment in lieu of taxes at the equivalent to whatever
Page 8
City Council Workshop Meeting
11/07/90/KJ
R
it would be by Mr. Markham's standards and whatever the tax rate may be
in the City of. Tamarac. He said both parties indicated the developers
pay what is expected and if they have already paid, they would not be
asked to pay again and the determination will be made and presented to
Council. He said a closing transaction is $95,000.00 plus the out-of-
pocket expenses.
Mr. Gabriel said City Manager Kelly is taking the letter that -was sent
to him and adding another $95,000.00, which is not the case.
Mayor Abramowitz said that is what is needed to clarify and Council
wants to hear the final figures.
C/M Bender said there would be an increase every other year. City
Manager Kelly said that was in the original proposal.
Mr. Gabriel said the way it is now being presented is whatever the ad
valorem taxes would have been that the City will receive. Mayor
Abramowitz said he would like City Manager Kelly to bring a proposal
based on verification of fact to Council.
Mr. Gabriel said time is of the essence due to the economy and the
preparation of bonds.
With no further business to discuss, Mayor Abramowitz ADJOURNED this
meeting at 11:00 A.M.
CAROL A. EVANS
CITY CLERK
"This public document was promulgated at a cost of $130.85 or $2.91 per
copy to inform the general public, public officers and employees of
recent opinions and considerations of the City Council of the City of
Tamarac."
Page 9
City Council Workshop Meeting
11/07/90/KJ