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P.O. BOX 25010
TAMARAC, FLORIDA 33320
5811 NORTHWEST 88TH AVENUE 0 TAMARAC, FLORIDA 33321
TELEPHONE (305) 722.5900
January 18, 1988
NOTICE
CITY COUNCIL
WORKSHOP MEETING
There will be a Workshop Meeting of the City Council on
Thursday, January 21, 1988 at 10:00 a.m. in the Council
Chambers at City Hall, 5811 N.W. 88th Avenue, Tamarac,
Florida. The subject of this meeting is Square One Debt
Service.
-Zt.
Carol E. Barbuto
City Clerk
AN EQUAL OPPORTUNITY EMPLOYER
POLICY OF NONDISCRIMINATION ON THE BASIS OF HANDICAPPED STATUS
CITY OF TAMARAC
CITY COUNCIL WORKSHOP MEETING
THURSDAY, JANUARY 21, 1988
CALL TO ORDER: Mayor Hart Called this Meeting to Order on Thursday,
January 21, 1988 at 10:03 A.M. in the Council Chambers.
PRESENT:
ABSENT AND EXCUSED
ALSO PRESENT:
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Mayor Bernard Hart
Councilman Bruce Hoffman
Councilman Henry Rohr
Councilman Jack Stelzer
Vice Mayor Sydney Stein
John P. Kelly, City Manager
Richard Doody, City Attorney
Patricia Marcurio, Secretary
Mayor Hart said this Item would be on the next City
Council Agenda. He said the purpose of this Workshop was
to inform Council of the Square One Debt Service.
Bill Greenwood, Director of Utilities/Engineering, said
the backup Council should have contained a memo drafted
to City Manager Kelly and a Resolution of Intent
explaining the Square One Debt Service. He said on April
9, 1986, the Council passed Resolution No. R-86-114,
authorizing appropriate City officials to execute leases
for wastewater capacities with the Cities of Pompano
Beach, Deerfield and Broward County. He said this
Resolution lead to Resolution No. R-84-406, approving the
Release of Assignment of excess wastewater capacity to
the following Large Users, Coral Springs, North
Lauderdale, Deerfield Beach, Broadview and Broward
County.
Mr. Greenwood said back then, the City decided to be out
of the sewage treatment plant business. He said when the
City bought the Utility, there was an existing agreement
with the Regional Plant. He said the City got out of the
Regional Plant and then in 1986, the City tried to rejoin
the 201 Force Main and no excess capacities were
available. He said none of the Large Users would agree
to give up any of their capacities. He said the only way
capacities were received was by leasing instead of
purchasing. He said the City of Tamarac had leases with
Pompano for 2 million gallons, Deerfield for 1 million
gallons and with Broward County for 1.5 million gallons
worth of treatment and 2 million gallons worth of
transmission. He said with a lease, equity was not
received for the property. He said the County refused to
sell capacity property in 1986 and, after working closely
with them, they finally agreed to sell. He said the City
was paying for mortgage twice under the lease.
Mr. Greenwood said as of January 1, 1992, the City would
owe a large lump sum payment to buy out the capacities
and a sinking fund was created to have the money
available at that time.
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Bill Greenwood said he would explain the Square One Debt
Service. He said, for example, if the City had a
mortgage on a piece of property for $100.00 per year and
had four people owning the property, each having equal
capacity, the County divided 4 into 100 for the
proportionate share, which would be $25.00. He said if
the City paid the debt service for 4 years, the City
would be paying $100.00. He said if a new person wanted
to join the property, they would have to pay for the
reserve capacity for 4 years; therefore, the equity had
to be split. He said the County took the total mortgage
payment (debt service), divided 5 into 100 and the cost
for each would be $20.00 and, since the payments were for
4 years, the cost would be $80.00. He said the new
person would have to come up with a lump sum payment to
buy in and the lump sum payment was reimbursed to the
other Large Users, evenly, from day one. He said this
was a standard concept with the County, everyone was
treated the same and none carried reserve capacity.
Bill Greenwood said he was recommending the City Council
buy the capacity as opposed to leasing until January 1,
1992. He said under the existing agreements, the City
agreed to pay the Square One Debt Service as of January
1, ;M ; however, the City was not building equity with
the existing lease payments. He said the total monies in
the January 12, 1988, memo are in the amount $731,972.00
and the memo suggested funding sources. He said the
excess or reserve capacity would be from CIAC Funds
because it would be for future development.
Mr. Greenwood said the proportionate share to serve the
existing customers would be from the Tamarac Utilities
West Revenue Fund. He said to come up with the total
monies the contingency would be depleted in the amount of
$50,000.00 and the Unexpended Fund would be used in the
amount of $17,400.00. He said he checked with the
Finance Department and the Funds were available.
At 10:10 A.M., C/M Stelzer ENTERED the meeting.
Ken Burroughs, Finance Director, said the City would be
saving $100,000.00 per year by buying the property. He
said the Revenue Fund would be recouped in four years and
he agreed with the recommendation by the
Utilities/Engineering Department.
Mayor Hart asked if the Funds were available now and Ken
Burroughs said yes. Mr. Burroughs said the only problem
would be in the Revenue Fund, which had a deficit of
530,000.00. He said the money would come from the
General Fund on a temporary basis. He said the Audit
Report would be released within the next few days and
there were sufficient funds in the General Fund to absorb
the loss from the Utilities Fund.
C/M Stelzer asked if the money would come from the City's
General Fund and Ken Burroughs replied, yes. Mr.
Burroughs said Administrative Services would be short
changed.
C/M Hoffman asked if a lump sum was placed in a Fund
to buy the properties being leased and Bill Greenwood
replied, yes. C/M Hoffman asked if the money would be
available for the first year with the exception of
$30,000.00.
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Ken Burroughs said that was correct plus the Utilities
Contingency zudget would be spent.
C/M Hoffman asked what the Contingency Fund would be used
for if it was not used for this Project and Mr. Burroughs
said this was the first year for the Contingency Fund in
Utilities.
C/M Hoffman said from now until the next budget, there
would not be a Contingency Fund for Utilities and Ken
Burroughs said that was correct.
C/M Rohr asked if it was possible to borrow $30,000.00
and Ken Burroughs said for the initial cash outlay, the
money for the Project would have to be used; however,
from now until September, he was confident that the
Utilities Fund would generate sufficient revenues to
overcome $30,000.00.
C/M Stelzer said .6 million gallons would be relinquished
to Coral Springs and he asked if Tamarac would be getting
money for that.
Bill Greenwood said no, in the proposed Agreement from
the County, the City's existing Lease Agreement would be
cancelled. He said the existing Lease Agreement had 1.5
MGD lease capacity of treatment and transmission plus an
additional 2 million gallons worth of transmission. He
said the City would not have to be paying lease on the
600,000 gallons presently in the Lease.
C/M Stelzer asked how Mr. Greenwood planned to get
$188,000.00 from the Revenue Fund. He asked if fees
would be raised and Mr. Burroughs said fees were not
being raised. He said the City would be reducing
expenses that were being paid out.
C/M Stelzer said the expenses would be reduced and the
difference would come from the Revenue Fund and Ken
Burroughs said the expenses would be decreased and the
Contingency Fund would be used.
C/m Stelzer said $188,000.00 was not being taken from
income; however, it was coming from expenses and Mr.
Burroughs replied, yes.
C/M Stelzer asked how much would be taken from the
General Fund and Ken Burroughs said $30,000.00; however,
the money was not being taken from the General Fund. He
said transferring to the General Fund for Tamarac
Utilities West Administrative Fee was being held back.
C/M Stelzer said if TUW was not distributing into their
General Fund, the money would have to come from another
fund and Ken Burroughs replied, initially; however, he
was confident that from now until September, $30,000.00
would not have to be held back.
Mayor Hart asked if the City was arranging to purchase
the capacity they were renting from the County and Bill
Greenwood replied, yes.
Mayor Hart asked if there was anything in the Lease
prohibiting the City of Tamarac from relinquishing the
property they have with Coral Springs.
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Bill Greenwood said the proposed County Agreement would
cancel the Lease Agreement, reallocate capacity to the
City of Tamarac and then reallocate 600,000 gallon
capacity to Coral Springs, which eliminates the City of
Tamarac's responsibility for the payment of 600,000
gallon capacity.
Mayor Hart asked if the contracts with Deerfield and
Pompano were still in effect and Bill Greenwood answered,
Yes. Mr. Greenwood said Deerfield and Pompano would not
sell the property until 1992. He said the City of
Deerfield determined they would be out of capacity soon
and would like the City of Tamarac to cancel.
Mayor Hart asked if the County would be increasing their
capacity and if the City of Tamarac had an agreement with
the County on purchasing the extra capacity.
Bill Greenwood replied, yes. He said the County was
designing their planned expansion at this time and
expected to have the capacity on line in 1991. He said
the County asked the City for flow projections to the.
year 2010. He said the Utilities/Engineering Department
worked closely with the City's Planning and Community
Development Department on the population projections and
by using the population projection growth factors,
projected flows were outlined. He said in 1991, the City
would still have sufficient capacity.
Mayor Hart asked if Mr. Greenwood would recommend this
purchase as practical and feasible for the City and Mr.
Greenwood answered, yes. Mr. Greenwood said the City
would not be paying for the capacity twice as it was at
this time.
Mayor Hart asked Ken Burroughs if he recommended this
purchase as financially feasible for the City and Ken
Burroughs replied, yes.
C/M Hoffman asked City Attorney Doody if he was
comfortable with this purchase and City Attorney Doody
said Broward County currently had the Agreement which
they were modifying. City Attorney Doody said he has not
seen the Agreement; however, the concept of the Agreement
seemed to be legally feasible. He said when he reviews
the Agreement, he would notify the Council if there was a
problem.
C/M Hoffman said Council could not act on this matter
until City Attorney Doody reviews the Agreement.
Bill Greenwood said the City Staff and the City Council
had misunderstood this item in the past. Referring to
the Minutes of the Advisory Committee of December 29,
1987, Mr. Greenwood said the items highlighted on Page 2
were the items that caused confusion. Mr. Greenwood read
the highlighted text, "Large Users with excess capacity
who believe they should hold onto their capacity because
it will be cheaper than the additional capacity created
by the expansion project, are under a misconception.
According to the Large User Agreement, current plan
capacity does not remain separate from the new capacity
created by plan expansion. Each Large User will pay
their percentage based on total Square One cost when the
current new additional capacity Debt Service costs are
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combined. This process will also see Large Users Debt
Service charges changing. Some will receive a rebate,
some will not but, in most instances, Debt Service
charges will increase. This will be discussed in detail
later after the size of the plan expansion has been
locked in."
Mr. Greenwood said there would be a meeting next month on
this matter; however, at the end of 1991 and 1992, the
County's charges would be drastically increased.
C/M Stelzer said the savings for the cost would be
$188,000.00; however, the money saved from switching to
the purchase was $137,000.00. He asked where the
remaining $51,000.00 would be saved.
Bill Greenwood said the existing Debt Service payment was
$137,000.00 and the savings would come from not paying
that amount twice. Ken Burroughs said $188,000.00 was
needed from the Revenue Fund; however, the expenses were
being cut $95,000.00.
C/M Stelzer said the other accounts were not Revenue
Accounts and he asked what the $71,954.00 Account was.
xen turroughs said $71,954.00 was lease capacity fees the
City paid.
Bill Greenwood said the 950 Account was titled "Transfer
Square One Debt Reserve Fund" and Ken Burroughs said that
Fund was money being set aside for 1992.
C/M Stelzer said when he asked if $188,000.00 was
required from the Revenue Fund, he was told that the
money would be from reductions of cost in the amount of
$188,000.00. He said he could not see the cost of
running the capacity reducing the $188,000.00 if the
savings would only be $137,000.00 on the Purchase
AoireemenE. He asked where $50,000.00 was being saved and
-where the $188,000.00 figure came from.
Ken Burroughs said $188,000.00 was the Revenue Share Fund
of the transaction.
C/M Stelzer asked if $188,000.00 was money needed from
the Revenue Fund and Ken Burroughs replied, yes. C/M
Stelzer asked where $188,000.00 was coming from in the
Revenue Fund and Ken Burroughs said $95,000.00 would come
from two accounts recently discussed. He said $50,000.00
would come from the Contingency Fund and $17,000.00 would
cone from Unexpended Funds with the balance out of the
Germ --al Fund.
C/M Stelzer said he did not see where the savings of
$188,000.00 was in the Revenue Fund. Ken Burroughs said
the Reserve Fund was the Object Account within the
R,z;;e sue Fund. He said the Fund was not a Reserve
exactly.
C/M Stelzer said $188,000.00 would not be a reduction
of cost and Ken Burroughs replied, no, $95,000.00 would'
be the reduction.
City Attorney Doody said the backup documents indicated
that a portion of the funding would come from CIAC Fund
Impact Fees. He -said the Utility Department informed him
%hay: the portion of the Square One Debt Service would be
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paid by CIAC Funds. He said the Funds could be
appropriately used for that purpose since they were
portioned for the Debt One Service dealing with future
development.
Mayor Hart asked Mr. Greenwood to inform the County that
if the Agreement was not received for review by the City
Attorney before the January 27, 1988 City Council
meeting, the Item would be Tabled.
Bill Greenwood said the Resolution of Intent would be
received and, hopefully, so would the Agreement.
City Attorney Doody said if Council approves the
Resolution of Intent on January 27, 1988 and the
Agreement is not received, the Resolution would state,
"Subject to Review and Approval of the Appropriate
Agreement".
C/M Stelzer asked if $543,000.00 which was being taken
from the CIAC Fund had to go to Referendum and City
Attorney Doody said there was no construction involved.
City Attorney Doody said the Charter stated that if a
capital improvement was being done that cost so much
money, then a Referendum was needed. City Attorney Doody
said he would inform Council if a Referendum was needed.
C/M Rohr said the City would be in a better position in
the future by purchasing this property. He said he
agreed to this purchase because of the savings involved
for the City.
C/M Hoffman said the money used to buy the property would
be the same money used to rent the property.
Mayor Hart ADJOURNED this meeting at 10:45 A.M.
CAROL E. BARBUTO, CITY CLERK
"This public document was promulgated at a cost
inform the general public, public officers and
opinions and considerations of the City Council
of $46.35 or
employees of
of the City
$1.29 to
recent
of Tamarac."
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