03/30/1992 (2)
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CITY COMMISSION SPECIAL MEETING
March 30, 1992
The City Commission of the City of Clearwater met at City Hall with the following
members present:
Rita Garvey
Sue Berfield
Lee Regulski
William Nunamaker
Richard Fitzgerald
Also present were:
Michael J. Wright
M. A. Galbraith, Jr.
Cynthia E. Goudeau
Mayor/Commissioner
Vice~Mayor/Commissioner
Commissioner
Commissioner
Commissioner
City Manager
City Attorney
City Clerk
The Mayor called the meeting to order at 9:01 a.m. for the purpose of
discussing the amendment to the lease agreement with the Chi Chi Rodriguez Youth
Foundation (Foundation).
The 1985 lease agreement between the City and the Foundation provides the
City with the right of first refusal to assume up to $2 million in outstanding
debt which the Foundation has obtained to construct the golf course located on
McMullen~Booth Road.
With the balloon payment on the loan coming due in March, the Foundation
contacted the City and requested the guarantee be strengthened to include a firm
guarantee in lieu of a right of first refusal as well as an increase in the
maximum guarantee to $2.5 million.
The City's guarantee will apparently allow the Foundation to refinance at
more favorable interest rates and the additional $500,000 to be borrowed will be
used to purchase additional machinery and carts and to complete construction of
golf course facilities.
Upon investigating the request, City staff, in conjunction with the City
bond counsel, determined that the requested guarantee modifies the arrangements
enough to produce new City debt, actually contingent debt, which requires
compliance with State law and City Charter provisions. Further, such a guarantee
can not be made from ad valorem tax revenues and can not exceed $1 million unless
it is first approved by the voters at referendum.
With these restrictions in mind, City bond counsel has drafted t~e lease
amendment and ordinance which provide for a $1 million guarantee and a right of
first refusal on the remaining debt, not to exceed an additional $1.5 million.
An ordinance is required for all City ~ebt under Section 41.11(a) of the City
Code of Ordinances.
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The golf course is currently operational and reporting operating profits.
In the event the Foundation defaults on their debt, it is likely the City would
exercise the existing right of first refusal and assume operation of the course.
City staff has reviewed the Foundation's request and the lease amendment
as drafted by bond counsel. The Foundation has agreed to reimburse the City for
bond counsel fees and to payoff the remaining balance of the $27,264 on a 1989
City loan used for transportation impact fees out of the refinancing proceeds.
This item has been discussed several times by the City Commission with
concerns regarding the term of the loan and the assignability of the guarantee
being mentioned. These concerns have been addressed and Exhibit A to the
Ordinance, which is the amended lease agreement, is now ready for approval.
In response to a question, the City Attorney indicated he was comfortable
with the changes to the documents.
A question was raised regarding whether or not the provision which had
been in the documents saying that the loan could be increased and the guarantee
with it, was still a part of the document. The City Attorney indicated it had
been deleted and there is no longer any provision for future advancements on the
loan. Essentially the documents allow the Foundation to borrow $2.5 million and
no more. He indicated any changes would require City Commission approval.
A question was raised regarding what related improvements would be included
in the loan as referenced on page 5. Tim Coop, representing NeNS, indicated this
is a proposed middle school and the new entrance to the course.
Concerns were raised that due to cuts in the school system, the middle
schaal on the golf course may be affected. It was indicated it should not be as
this is a federally funded program.
In response to questions, the City Manager indicated that essentially the
documents limit the loan amount to $2.5 million with the City's guarantee being
limited to $1 million.
A question was raised regarding the rate on the loan and it was indicated
that it was 8.75%.
A concern was raised regarding the assignability of the guarantee and the
City Manager indicated the clause which gives the City some control over this,
is found on page 6 of the guarantee document. '
A question was raised regarding the environmental indemnification and it
was indicated that this was prepared as the bank did not wish to assume any
liabilities for any environmental problems that may exist on the property.
Commissioner Regulski moved to approve the amendments to the lease
agreement with the Chi Chi Rodriguez Youth Foundation. The motion was duly
seconded and carried unanimously.
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The City Attorney presented Ordinance 15178-92 for second reading and read
it by title only. He indicated that the previous motion approves the amended
Exhibit A to the ordinance. Corrmissioner Regulski moved to adopt Ordinance
'5178-92'on second reading. The motion was duly seconded and upon roll call, the
vote was:
IIAyes": Regulski, Nunamaker, Fitzgerald, Berfield and Garvey.
UNaysll: None.
The meeting adjourned at 9:16 a.m.
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