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HomeMy WebLinkAbout1992-06-19 - City Commission Public Hearing Meeting MinutesCITY OF TAMARAC CITY COUNCIL PUBLIC HEARING MEETING FRIDAY, JUNE 19, 1992 Tape 1 CALL TO ORDER Mayor Bender called the City Council Public Hearing meeting to order at 2:00 P.M. in Conference Room #1, City Hall. PRESENT Mayor H. L. Bender Vice Mayor Henry Schumann Councilman Norman Abramowitz Councilman Irving Katz Councilman Joseph Schreiber ALSO PRESENT : John P. Kelly, City Manager Dina McDermott, Assistant City Manager Mitchell S. Kraft, City Attorney Michael R. Couzzo, Director of Public Services/ Assistant City Manager Mary Blasi, Finance Director Phyllis Polikoff, Secretary 1. PUBLIC HEARING - MOTION TO ADOPT Tem . Reso. #6314 revising customer user charges and the rate structure or utility customers east of State Road 7 (441) (Tamarac Utilities East). SYNOPSIS OF ACTION DISCUSSED (See Page 10 for FINAL ACTION) City Attorney Kraft read Temp. Reso. #6314 by Title. City Manager Kelly said utility rates needed to be increased for Tamarac Utilities East customers and today's Public Hearing would give Council the specific details concerning the proposed rate increase. Mr. Kelly said there were approximately 1,000 Utilities East customers who had not been given any increases for the past five years. He said the Utilities East system had absorbed a 5% increase each year from the City of Fort Lauderdale and the increase had not been passed on to the customers. Mary Blasi said Utilities East was not covered by a Bond Covenant and they could stand on their own although a Bond was issued for Utilities West. Ms. Blasi reiterated that Utilities East had not received a rate increase during the past five years but their expenses had increased based on the City of Fort Lauderdale Large User Agreement for water and wastewater. She reiterated that although Utilities East absorbed the increases from the City of Fort Lauderdale, these increases had not been passed down to the customers. Ms. Blasi said Hartman 6 Associates, Inc., was asked to do a rate study and they determined that revenues had decreased because of conservation efforts mandated by the South Florida Water Management District (SFWMD). Mr. Kelly said the Utility Funds were Enterprise Funds and were supported by the rates they charged. C/M Abramowitz said Utilities West had approximately 25,000 customers and Utilities East had approximately 1,000 customers. City Council Public Hearing Meeting 6/19/92/PP Page 2 Robert Ori, Manager of Rates and Finance from Hartman & Associates, Inc., stated that Utilities East had not grown in the past several years but operating expenses had increased over 12% and now they could no longer be absorbed. Mr. Ori said over the past five years, the City of Fort Lauderdale had increased rates almost 20% which represented almost 56% of the total cost. C/M Abramowitz reiterated Mr. Ori's comments and added that C.I.A.C. funds were depleted. He said residents had to be made aware of why utility rates had to be increased. Mr. Kelly said he had already explained to many Utilities East residents why there was a need for the increase. He said 5,300 gallons of water per month was the average consumed by Utilities East customers. He said if the increase was approved, a Utilities East customer would pay approximately $.04 more per month. C/M Abramowitz reiterated that C.I.A.C. funds were depleted but the City had collected $1,243,200 in 1988 and $204,800 had been collected in 1991. C/M Schreiber asked how much of these funds went to Utilities East and Mr. Kelly said, zero funds. Ms. Blasi agreed. C/M Katz said there was a disparity between Utilities East rates and Utilities west rates and he was concerned that Utilities West customers would feel they were being discriminated against. C/M Katz said a Bond repayment would be incorporated into the Utilities West increase but this could not be done for Utilities East because they did not have a Bond repayment. He said Utility East's increase would be one-third and Utility West's increase would be two-thirds. Ms. Blasi said the rates were very close and Utilities West had the Debt Service but Utilities East also had the Debt Service through the City of Fort Lauderdale. Mr. Ori said each system was different and Utility East's rates were based on the cost to provide service to Utilities East and Utilities West rates were based on those costs. He said funds were transferred from Utilities East to the Utilities West budget for shared expenses, i.e., meter reading and maintenance. C/M Schreiber asked what the City of Fort Lauderdale charged for services to Utilities East customers and Mr. Ori said, $.85 per 1,000 gallons of metered service for wastewater. He said ground water was also metered and had to be paid for. Mr. Ori said water charges were monthly service rates based on the number of inter -connection points between Utility East's system and the City of Fort Lauderdale's system. He said there were three different sizes of meters and the usage charge was $1.20 per 1,000 gallons. He said the City of Fort Lauderdale advised that charges for water services would be increased approximately 5% per year. Mr. Ori said wastewater services would be increased approximately 1% per year. He said the City of Fort Lauderdale provided service to Utilities East through the 201 Facilities Plan and Broward County provided service to Utilities West services through their 201 facilities plan. C/M Schreiber asked if the 5% increase would be sufficient over the next several years and Mr. Ori said, yes. He said Temp. Reso. #6314 also requested a second year increase. C/M Abramowitz said consumption and income had dropped and he suggested that utility rates should be increased but the Council at that time did not wish to do so. He said the less water was City Council Public Hearing Meeting 6/19/92/PP Page 3 used, the more it cost. C/M Katz suggested that the last sentence in Section I(i) - Automatic Annual Rate Increase - should be amended to include, "subject to approval of Council each year." He said the same language should also be included at the end of the last sentence of Section II(i) and in all other applicable Sections. Mr. Ori agreed. C/M Katz suggested that the same language should be included in the Utilities West Resolution at the end of the first sentence of Section I(i) and Section II(d) and in all other applicable ections. Mayor Bender agreed. Mr. Kelly said if the proposal was approved, it would mean that Utilities East rates would be increased to $32.08 and Utilities West rates would be increased to $33.33. C/M Katz said Page 6, Section III(h) of the Resolution referred to equipment and charges and he mentioned seeing some equipment being used. He asked Mike Couzzo, Director of Public Services, about the equipment and was advised that the City had to investigate the sewer system to make sure it was adequate before accepting responsibility from the developer. He said there was no Section in the Resolution which addressed this and it should be included. He said a developer should be charged for equipment and services. Mr. Kelly said some charges were already included in the permit fees and he suggested that the permit fees should be reviewed again. C/M Katz said if a developer was already charged, he did not have a problem, but it should be addressed in the Resolution if the developer was not charged. C/M Abramowitz said the charges in the Resolution and the permit fees should be the same and if the Resolution indicated higher fees, the permit fees should be adjusted. v/M Schumann said the proposed increase was 8.5% for Utilities East and Ms. Blasi agreed and indicated this was an additional increase and the effective dates were for 1993 and 1994. Mr. Ori said the average increase for the residents would be 7.8%. Ms. Blasi said the charges for Utilities west would also become effective on and after October 1, 1993. Anthony Grimaldi, resident, expressed his concerns about the rate increase and asked about the 5% annual increase from the City of Fort Lauderdale. Mr. Ori responded that he spoke with several individuals who reviewed Tamarac's rates and charges and they also did a rate analysis. He said the City of Fort Lauderdale indicated a 5% increase on water and 1% on sewer. Mr. Grimaldi said in his opinion, less water would be used in the future but it would cost more. Mr. Kelly said water lines were older and had to be repaired or replaced and if this was not done on a regular basis, costs would escalate dramatically. He said the City always budgeted monies for these repairs, etc., and reiterated the 20% increase from the City of Fort Lauderdale over the past five years which was not passed on to the residents. He said Bond ratings would indicate the City was fiscally responsive to its residents. Mr. Kelly said utility costs were supported by user rates not from taxes and Mr. Grimaldi said when money was needed, it was taken from the utilities and put into the General Fund. C/V Katz reiterated has suggestion that the Agreement should be subject to approval by Council who would determine if a rate increase was necessary or unnecessary. Mayor Bender said City Council Public Hearing Meeting 6/19/92/PP Page 4 Council would review the contract every year. Tape 2 C/M Abramowitz said with regard to water testing, the Federal Government required three tests and now they required over 100 tests. He said it was odd that it cost more to use less water and rationalized that it was because of the equipment and availability of the water. He said originally the City had one laboratory and now the City had two laboratories. Herman Gross, resident, expressed his concerns about the rate increase and said today's newspaper indicated a 13% increase with an automatic 3% annual increase. He said Mr. Kelly indicated revenues decreased 8% and expenses increased 12%. Mr. Gross said the Annual Audits for Utilities East for 1989/1990 and 1990/1991 indicated a 1.9% decrease in revenues and a 2.8% increase in operating expenses. He said the Annual Audits for Utilities West for the same time periods indicated a 1.2% increase in revenues and a 6.7% increase in operating expenses. He said he could not justify the 12% increase in expenses. He said less water was used in 1991 due to water conservation. Mr. Gross said the 1992/1993 budget should be looked at very thoroughly before any rates were increased. Mr. Kelly said the 13% increase indicated in the newspaper represented the five-year period from 1987 through the present date. Mr. Gross said non -cash expenses indicated were $500,000 and was less than $1,000,000 and he believed the proposed rate increase was double what was needed. Mr. Ori agreed with Mr. Gross and said expenses were out -pacing revenues and the original proposed increase was $1,500,000. He said the City had to meet certain Utilities West Bond Covenants and to do so, there was a minimum increase which had to be imposed. He said the City was required to maintain a Debt Service coverage based on rates and operating expenses and the City would not meet the Bond Covenant this year if the .increase was not imposed. Mr. Gross requested seeing the preliminary budget because he did not believe what the City requested was really needed. He said certain Utility bonds were being considered for refinancing and they would reduce the cost of interest. Mr. Ori said the approved 1991/1992 budget was reviewed and he projected 1992/1993 expenses but since that time, the preliminary 1992/1993 budget was prepared. He said the City reduced some figures to cut costs. Mr. Ori said since 1987, rates had not increased but expenses had increased. He said the City utilized its cash balances but if revenues continued to decrease, the cash balances would not be available because utilities were not growing. He said C.I.A.C. charges indicated growth and the City collected over $1,200,000 in 1988 and over $40,000 in 1992. He said the $40,000 was being used to offset the Debt Service. Mr. Ori said to -date, the City had not refinanced any Bonds although the City's initial plan was to refinance Bonds to reduce the debt service by approximately $60,000 per year in the Utilities West budget. He said many capital improvements had to be done and the savings from the debt service would go toward those improvements and rates would not have to be increased as much. Mr. Gross reiterated that the budget should be looked at very thoroughly before any decisions were made witn regard to increasing the rates. C/M Schreiber agreed and added it was 1 1 City Council Public Hearing Meeting 6/19/92/PP Page 5 also possible that an increase might not be necessary for October 1. C/M Schreiber said Utilities East maintained itself very well. He said the matter of increasing utility rates evolved when the City endeavored to refinance some Bonds and realized they had not been able to meet the 120% Bond Covenant. He said this had nothing to do with Utilities East because they did not have any Bond issues. C/M Schreiber reiterated the suggestion that an increase should not be implemented for Utilities East until the budget was completely reviewed. He said an increase could always be implemented. Mayor Bender said Bond refinancing had nothing to do with the rate increases with regard to Utilities West. C/M Schreiber disagreed. Ms. Blasi said the City was not deficient this year with regard to the Bond Covenant but would be next year. C/M Abramowitz asked if the City would be in technical default next year if they did not meet the Bond Covenant and the bonds were not refinanced and Ms. Blasi said, yes. C/M Abramowitz said a Utility Department could not wait until an emergency to act. Mr. Ori said Utilities East averaged approximately $70,000, which was down from $104,089 in 1991 after expenses were paid and the $70,000 was expected to decrease even further. He said rates would fund cash contributions towards capital improvements and not any old equipment. He said $103,000 would be needed in 1993 to fund capital improvements and reiterated that $70,000 was presently the average. Mr. Ori said the water increase was 5% but it could be higher because the City of Fort Lauderdale was also expecting a rate increase. He said the need for the rate increase was due to lack of growth in the Utilities East system and increased expenses. He said the City was taking surplus funds and putting them back into Utilities East and would do this for the next two years. He said they should not continue doing this. C/M Katz said the City should not have to operate in a deficit situation. He said the proposed rate increase was for a single year and reiterated that every year, Council should review every proposed increase. He said a proposed increase should be for a one-year period only. Mr. Ori recommended that the increase should be for a minimum of two -years. C/M Abramowitz suggested that Council should have the opportunity to review proposed increases every year. C/M Katz said if rates were not increased, the City would be in a deficit situation. Mr. Kelly said there was a tie-in between refinancing the Bonds and the rate increase. Arthur Ziev, Vice President of Public Finance of Raymond James & Associates, Inc., said the proposed rate increase was indirectly Lied into the Bond refinancing. He said the existing Bond Covenant had to be met each year. Mr. Ziev said net revenues plus C.I.A.C. impact funds and minimum net revenues had to equal the 120% Debt Service. He said over the past several years, C.I.A.C. impact funds went from over $1,200,000 to $40,000 and the City had to meet the Debt Service almost entirely from net revenues. He said it did not matter if Bonds were refinanced or not and reiterated that City Council Public Hearing Meeting 6/19/92/PP Page 6 next year, the City would be in a deficit situation. Mr. Ziev said the Bond Covenant stipulated that the City was required to adjust the rates to meet the Debt Service. He agreed that the City would be in technical default if the Bond Covenant was not complied with and the Bond insurer had the right to take the City to Court to enforce increased rates to remain in compliance. Mr. Ziev said the City could save almost $60,000 if the Bonds were refinanced but this amount would be insufficient to off -set the proposed rate increase. Mr. Ori said what was happening in Utilities East was also happening in Utilities West. 2. PUBLIC HEARING - MOTION TO ADOPT Temp. Reso. #6313 revising customer user charge and the rate structure or utility customers west of State Road 7 (441) (Tamarac Utilities West). SYNOPSIS OF ACTION . DISCUSSED (See Page 10 for FINAL ACTION) City Attorney Kraft read Temp. Reso. #6313 by Title. C/M Katz said with regard to Maps 2.1 and 2.2, the Service Areas for Utilities West were not the same on the Water System Service Area. Mr. Ori said this information came from maps he had received and the information did not impact on the numbers. He said the maps would be corrected and resubmitted to the City. C/M Katz said the Map information would impact if the residents were not indicated on the Service Area. Mr. Ori said he obtained actual billing records for the total system. Mr. Ori said Utility West's rates were governed by Broward County's Wastewater charges which had increased over 30% during the past five years. He said this increase was in excess of over $2,000,000 per year with charges based on a combination of Operation/Maintenance and Debt Service. He said the current Debt Service was $900,000 and it would go over $1,200,000 by 1994. Mr. Ori said the Debt Service was paid to Broward County for the City's share in their wastewater system. He said there would be a very slight increase in the Operation/Maintenance fees for 1993 but there would be a 10% increase for 1994. Mr. Ori said Broward County's annual costs would go from $2,200,000 in 1992 to approximately $2,800,000 in 1994. C/M Katz asked about sludge being brought to a reclamation point at the City of Coconut Creek and C/M Abramowitz said the Environmental Protection Agency could not do anything for the next three or four years. Mr. Ori said the growth slowed in Utilities West although there were approximately 25,000 customers and the City was approaching build -out. He said growth was less than 1% annually while expenses were increasing 3% to 4% for this same period. Mr. Ori said in past years, cash funds were used to meet the deficit and the balances were decreasing but also the interest which would have been earned was decreasing. He said C.I.A.C. funds were being used to pay the Debt Service on Series 1986 Bonds and over $400,000 was used for 1991/1992. He said the budget projection for 1992/1993 was over $438,000 and this Fund would end in 1994. Mr. Ori said with regard to capital improvements that the projects did not go away and they became more expensive to fix. F,1 City Council Public Hearing Meeting 6/19/92/PP Page 7 He said the City needed to start funding the Renewal/Replacement program. Mr. Ori said Hartman & Associates looked at the five-year Capital Improvement Budget and determined that the rate increase this year and next year would not entirely fund this Budget. He reiterated that no rate increases had been imposed for the past five years. Mr. Ori said a 13% overall increase over five years equalled 2% below the inflation mark and this was very good. C/M Schreiber asked if the C.I.A.C. funds would increase if there was an upsurge in the economy in the next several years. Mr. Ori said they would not increase today but in the year the economy rose this could happen. C/M Schreiber reiterated the rate increase resulted from Bonds considered for refinancing with a savings of approximately $50,000 per year. He said Utility West customers would get a rate increase and would have to pay an additional $1,343,280 for fiscal year 1992/1993 and he did not agree with the proposed rate increase. C/M Schreiber said Section 7.18 of the Charter pertained to commingling of funds and City Manager Kelly violated the Charter. He said in his opinion, the City Manager transferred at least $850,000 in excess funds from the Utilities West budget to the General Fund Budget to make up a deficit. He said it was improper to charge taxes to Utility West customers for a tax exempt facility and the Utility West Fund was being reduced which prevented operating revenues from meeting the 120% Debt Service in the Bond Covenant. C/M Schreiber asked about Utilities West figures on Page 73 of the Annual Financial Report. He said Non -departmental, Administration and Administrative Service charges totalled over $1,700,000. He asked why the figure was so high when the adopted budget was $350,000 but the year-end budget was over $767,000 and asked if there was justification that the City actually provided these services. C/M Schreiber said according to the Auditor, 107% of Council's budget was charged against Utilities West funds. Tape 3 Mr. Kelly disagreed that the increase was the result of considering Bonds for refinancing and Council authorized the rate study to ascertain whether the Utility funds were self- sufficient. He said it was the Investment Advisory Committee's opinion that the time was right to refinance the Bonds. Ms. Blasi said $767,274 referred to by C/M Schreiber represented $350,000 in Administrative fees and approximately $350,000 for payment in lieu of taxes from Utilities West to the General Fund. She said other Non -departmental charges referred to internal service charges for Fleet Maintenance and in her opinion, the General Fund provided more than what was charged. C/M Schreiber disagreed. She said for many years the City inadequately charged Utilities West for services provided by the General Fund. C/M Schreiber reiterated his request for justification of services provided and Ms. Blasi said, yes. Mayor Bender said there were documents to support the City's position for the rate increase. C/M Abramowitz asked if there was a charge --back from Utilities West to the General Fund. Mr. Kelly said $250,000 was charged back in 1986 and at that time he requested justification and an audit but Council denied his request. He said Council City Council Public Hearing Meeting 6/19/92/PP Page 8 recommended increasing the amount to $350,000 the following year and Mr. Kelly requested justification and it was denied. He said the charge -back was approved for $350,000 and it remained at that figure until Council gave their approval and the audit was completed and it was determined that the General Fund had subsidized the Utilities West budget for several years. C/M Schreiber said the $850,000 transfer did not explain that $350,000 represented Administrative expenses. C/M Katz said he believed there was back-up to support the transfer. C/M Katz said there were inequities with the water and sewer lines and too much was being put on single-family and multi- family homes and not enough was being put on commercial properties. He was advised that everyone who had a three-inch water line should pay the same rate but Southern Bell was paying one-third less than Woodmont and he asked why. Mr. Ori said this was Southern Bell's existing rate. C/M Katz said before the rates were increased, he wanted to make sure that commercial users as well as single-family and multi- family users were charged the same rate for water and sewer. Mr. Ori said Council had requested that the rates should be revised and recommended eliminating the charges for smaller or larger size meters and to make everyone equal for all the meter sizes. C/M Katz said Mr. Ori had indicated at a previous meeting that everyone would be paying the exact same rate for the three-inch meter and Mr. Ori agreed. Mr. Ori said the source of availability cost for the commercial user was shifted back to the original rate for almost all the customers and commercial users would get a larger increase than what was originally calculated. He said the single and multi- family customers would get the savings for water and sewer. C/M Katz asked if there was a substantial difference between the proposed 13.9% and would anything be affected. Mr. Ori said, no, and the 13.9% was a total system revenue number. C/M Katz asked if additional revenues were collected from the commercial users, could the single-family and multi -family rates be reduced. Mr. Ori said, yes, and the facts were documented in a letter. Mr. Ori said the single-family rate would be reduced from $6.15 to $6.00 per 1,000 gallons and the multi -family rate would be reduced from $4.95 to $4.35 per 1,000 gallons. C/M Abramowitz asked how much was paid to the Cities of Fort Lauderdale and Deerfield Beach over the past several years. Ms. Blasi said the City signed a Lease Agreement for wastewater treatment capacity and paid $25,000 per month until Broward County's expansion project was completed and almost $65,000 was saved when it came under their wastewater program. C/M Abramowitz said the City should spend money before a catastrophe happened. He said large sums of money were spent to repair, maintain and improve the system. C/M Abramowitz said rates should have been increased many years ago but no one wanted to do this. He asked if 13.9% was the absolute minimum and Mr. Ori said, yes. C/M Schreiber disagreed and said single-family rates would be increased almost 17% and almost 20.5% for multi -family. Mr. Ori said 13.9% represented the system revenue required above the existing revenue and also to avoid the City going into technical default. He said different residential classes would receive greater than a 13.9% increase and the rate would be 16.7% for anything over the average of 5,300 gallons. 1 4J City Council Public Hearing Meeting 6/19/92/PP Page 9 Mr. Kelly said if a budget was prepared but needed projects were deferred, the City would end up paying larger sums of money. He said the typical solution was to defer spending for several years and then sell the project as a Bond issue. Mr. Kelly said if the City went into technical default, it would be more difficult to sell another Bond. Mayor Bender OPENED the Public Hearing portion of the Meeting. Barry Eden, resident, expressed his concerns and said commercial tenants were being discriminated against because they did not have a cap on sewer usage. He said residential users did not pay sewer charges if they used over 15,000 gallons. Mr. Eden said the existing water rate was $1.04 per 1,000 gallons and the increase would be $1.57 or a 66% increase. Mr. Ori disagreed and said commercial users would get an increasing block rate. Mr. Eden said sewer rates would be increased from $1.61 to $2.15 or 74%. He said charges to 26 of his tenants would be increased from $1,000 per month to $1,700. Mr. Ori disagreed and said the first 15,000 gallons was $1.12 and not $1.57. Mr. Eden asked that consideration should be given to the commercial users as was done to the residential users. Mr. Ori said commercial users were primarily indoor -water users and if a commercial user had a great deal of green space, an irrigation meter was usually installed to avoid paying the sewer charges. Mr. Eden said in his opinion, most commercial users would be unable to pay the increase based on 100,000 gallons. Mr. Ori responded that the first 15,000 gallons would be increased $.08. He said the increase was 30% on the flow charge and a slight increase on the service -availability charges. Mr. Eden said his 26 tenants were serviced by two, two-inch meters and 100,000 gallons was for both meters. Mr. Ori said the first 60,000 gallons would be $1.12 and the remaining 40,000 gallons would be $1.57. C/M Katz said there was a charge for each water hookup and the developer and the City were setting a usage per meter charge and in his opinion, the usage per meter should not be reduced. C/M Katz said it was not possible to place a cap on commercial users for sewer usage but a limit should be placed on the number of users hooked up to a meter without any additional connection charges or meters. C/M Abramowitz said the South Florida Water Management District wanted a tiered billing system in an attempt to conserve water. He said many cities would soon be billed in this fashion. C/M Abramowitz said Tamarac did not have a utility tax and there was a difference in income. He said if a person did not conserve water, they should pay for it. Mayor Bender CLOSED the Public portion of the Meeting with no further response. I. PUBLIC HEARING - MOTION TO ADOPT Temp. Reso. #6314 revising customer user charges and the rate structure for utility customers east of State Road 7 (441) Tamarac Utilities East). SYNOPSIS OF ACTION RESOLUTION NO. R-92-110-PASSED (See Page 1 for Initial Discussion) APPROVED with amended language. Public Hearing was held. City Council Public Hearing Meeting 6/19/92/PP Page 10 City Attorney Kraft read Tem Reso. #6314 by Title. * C/M Abramowitz MOVED to ADOPT Temp. Reso. #6314 with additional language, "subject to approval by Council each year" in Section I (h and i) and Section II (h and i) and in all other applicable Sections, SECONDED by C/M Katz. VOTE C/M Abramowitz AYE C/M Katz AYE C/M Schreiber NAY V/M Schumann AYE Mayor Bender AYE 2. PUBLIC HEARING - MOTION TO ADOPT Temp. Reso. #6313 revising customer user charges and the rate structure for utility customers west of State Road 7 (441) (Tamarac Utilities West) SYNOPSIS OF ACTION RESOLUTION NO. R-92-110-PASSED (See Page 6 for Initial Action) APPROVED with amended language. Public Hearing was held. City Attorney Kraft read Temp. Reso. #6313 by Title. Tape 4 * C/M Katz MOVED to ADOPT Temp. Reso. #6313 with amended language, "subject to review by Council every year" in Section I(h and i) and Section II(c and d) and in all other applicable Sections, SECONDED by V/M Schumann. C/M Abramowitz asked if there would be a problem with regard to insurance ratings with the Bond refinancing and v/M Schumann said not for next year. Mr. Ziev said he spoke with several insurers and rating agencies and in his opinion, the matter of a lowered Debt Service coverage concerned them. He could not proceed with the Bond refinancing until Council decided what action they would take. He said once the insurers knew what the increase, if any, would be, they would look more favorably at the City. Mr. Ziev said in his opinion, the insurers would also look more favorably at the City if Council approved a two-year agreement. He said if Council only approved a one-year agreement, the Bond Covenant would require that an increase would also be necessary the following year. He said in his opinion, a two-year agreement would benefit the City's ability to get lower insurance or a higher rating on the Bonds. C/M Abramowitz asked what the percent of increase would be the second year if the City approved a one-year agreement and Mr. Ziev said he did not know. V/M Schumann said if the economy stayed status quo, the Bond Covenant would again have to be met in 1993/1994. V/M Schumann agreed with Mr. Ziev about a two-year agreement and C/M Abramowitz agreed. C/M Katz said he was concerned about a two-year agreement. Mr. Ziev said the insurers indicated 8.5% would be needed next year to meet the Bond Covenant. C/M Abramowitz said in his opinion, the City should agree to a two-year agreement because the City would probably be assured of a better rate and better insurance. Ms. Blasi said the increase proposed for next year was based on the Bond Covenants, total system rates, renewal and replacement City Council Public Hearing Meeting 6/19/92/PP Page 11 capital expenses and increases in the Debt Service coverage for Broward County. She said rates for October 1, 1993 were a bit higher than the minimum required to meet the Bond Covenant with the possibility of an excess to fund some capital improvements. C/M Katz said it would not be necessary for Council to review the Ordinance in 1992/1993 but the Ordinance would be reviewed in 1994. * C/M Katz AMENDED his MOTION that it would only be necessary for ,Council to review the Ordinance with regard to Section I(h) and Section II(c) in 1994, SECONDED by V/M Schumann. VOTE C/M Schreiber NAY V/M Schumann AYE C/M Abramowitz AYE C/M Katz AYE Mayor Bender AYE C/M Katz asked about rates and different sized meters and Mr. Ori said rates were being adjusted and rates were increased by meter size. C/M Katz said he received a memorandum from Gordon Sparks, Assistant City Engineer, with incorrect information regarding a concession stand being constructed. Mike Couzzo, Assistant City Manager, agreed and C/M Katz said he wanted back-up to clarify the memorandum. Mayor Bender ADJOURNED the PUBLIC HEARING at 4:20 P.M. lH. BENDER MAYOR CAROL A. EVANS CITY CLERK CITY OF I'.A MARAC APPROVED AT MEETING OF2- F�