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12/29/1988 CITY COMMISSION SPECIAL MEETING December 29, l988 The City Commission of the City of Clearwater met in special session at the City Hall, Thursday, December 29, l988, at 6:30 p.m., with the following members present: Rita Garvey Mayor/Commissioner Lee Regulski Commissioner Don Winner Commissioner William Nunamaker Commissioner Absent: James L. Berfield Vice-Mayor/Commissioner Also present: Cynthia E. Goudeau City Clerk Ron H. Rabun City Manager M. A. Galbraith City Attorney Daniel Deignan Finance Director The Mayor called the meeting to order. Item #1 - Ord. 4738-88 - Oaks of Clearwater. Authorizing borrowing $38,000,000 from Gulf Breeze, Fla. local government loan pool program to finance certain capital projects; authorizing submission of loan application; authorization of execution and delivery of loan agreement; authorizing issuance of variable rate note to evidence obligation of governmental entity to repay loan; authorizing pledge of certain revenues to secure repayment of loan and note; fixing term and repayment provisions thereof. The Oaks of Clearwater, Inc., a charitable, non-profit corporation, has requested the City provide up to $38,000,000 from the Gulf Breeze Loan Pool to fund the acquisition and improvement of the Oaks Bluff project at 420 Bay Avenue and the Oak Cove project at 210 S. Osceola Ave. These projects contain 500 units designed for adult congregate care, and a 116 bed nursing care facility. The proposed bond program provides for title to both properties vesting in the City of Clearwater, free of incumbrances upon payment of the bonded indebtedness, 26 years from now. The City Manager reported that a lot of study and staff time has gone into reviewing the documents proposed. He stated that City assets are not at risk and while there is no compelling reason not to do this, staff has verified that there is no risk for the City to participate. Dan Deignan, Finance Director, stated that his role has been to examine the documents to see if the City incurs any financial liability, and that he feels strongly that there is no financial liability to the City. This will be a 'pass through' funding allowing Oaks of Clearwater to obtain the financing through the Gulf Breeze Local Government Loan Pool. He stated staff has not evaluated the financial feasibility of the project, Citadel, the mortgage insurers, and the Federal Health and Urban Development Department (HUD) are doing that. He stated the Oaks of Clearwater is a 501-(3)(C) organization. He stated Citadel has reviewed the project and does feel it is financially viable and is recommending the project to HUD. Mr. Deignan has also confirmed the State Division of Insurance has reviewed and approved the background of the principals involved in the Oaks of Clearwater. Dan Livermore, the City's Bond Counsel, stated that he has prepared the documents and has analyzed the City Charter and feels confident that the exemptions to the $1,000,000 revenue bond limitation does apply to this item. The City Manager reported he wished to doubly insure the financial review and asked William R. Hough, the City's Financial Advisor, to review the documents. Ed Bulliet, of William R. Hough & Co., stated he reviewed the financial structure to evaluate the City's liability. He stated if the Oaks forfeits Citadel and HUD will be responsible. The City does not have any liability for the project. Paul Raymond, Attorney for the Oaks of Clearwater, stated that while Citadel was unable to be at the meeting, they did FAX a letter describing the process used to review the project. They did review the building, the sprinkling system, whether or not there was asbestos in the building, lead paint and other building safety items. The buildings are at 70% occupancy with 10% at market rate. In response to questions Mr. Raymond stated that all contracts with residents would be honored but that there would be increases to those whose contracts still allowed increases. He stated $9,000,000 will be in escrow, for an operating deficiency reserve and for refunds of liabilities. Two (2) Citizens spoke in opposition to the project expressing concerns regarding advertisement of the Ordinance, placing new debt upon old debt, that the professional fees being made are too high, and that the City should not be "bailing out" a private enterprise. They also expressed concerns that while the City is being told there will be no liability, they are uncertain that that will be the case. They also questioned whether or not the Oaks of Clearwater was a 501-(3)(C) non-profit organization, and that the issuance of these bonds did violate the Charter limitation. Dan Livermore and Ed Bulliet reaffirmed their previous statements that there is no liability to the City that the Oaks of Clearwater is a 501-(3)(C) non-profit organization and that the issuance of these bonds will not violate the Charter limitation. Mr. McCullough, a resident of Oak Bluffs, stated that half of the vacancies are due to the difficulties over the last years regarding the financial status of the present owners. He stated it is not a death trap and the new owners will be improving the property. Mr. Raymond stated in response to some of the concerns that have been raised that the Oaks of Clearwater is a 501-(3)(C) non-profit organization and that the 3 year probation rule regarding 501-(3)(C) corporation only applies to private foundations. He stated that the full faith and credit of the Federal Government will be behind the bonds and that the value of these facilities are not typical of residential buildings as they are above normal in amounts of common areas, services available and nursing home facilities. The City Attorney presented Ord. 4738-88 for 2nd Reading, and read it by title only. Commissioner Nunamaker moved to pass and adopt Ord. 4738-88 on second and final reading. The motion was duly seconded. Upon roll call the vote was: Ayes - Winner, Regulski, Nunamaker and Garvey. Nays - none. Absent - Berfield. Commission recessed from 8:26 p.m. to 8:31 p.m. Item #2 - Gray Settlement. The City Attorney reported a counter offer had been delivered to his office at 4:15 p.m. this afternoon. A total number of 253 units has been substituted for the method to calculate density. The units requested are based on the beach property and an assumed vacation of right-of-way. Paula Harvey, Planning Director, stated that a survey of the property had been delivered and that the calculations for the density did include areas of right-of-way. If the area for the right-of-way is deleted, the total number would be reduced by 21 units, to 232. The concerns regrding allowing construction 50 ft. forward of the platted lot lines have been answered by: if they are allowed to build that far forward, they will abide by the setbacks, etc., in the code. If they cannot build in that 50 ft. area, setback variances will be requested. Concerns were expressed that the agreement had just been received and there had not been an opportunity to review it. Attorney Richard Salem, representing the property owners, stated that the draft was the same as the previous submission, however, changes had been made regarding the number of units. The three areas of concern regard use of the beach, density and avoiding damages. He stated the settlement is in the spirit of compromise and that the public will have the right to use the beach. Concerns were expressed regarding the density from the right-of-way areas and it was stated that the Charter would not allow vacation of those right-of-ways. Discussion ensued regarding how to calculate the density and also consideration of the public access to the beach through this settlement. The Planning Director stated that the parameters for the construction of the building, setbacks, height etc., will be the key to the development, not the density allowed. Concerns were expressed regarding the impact if a settlement was not reached. Further discussion ensued regarding the setbacks and it was suggested that a sliding scale be used. That if they could build 50 ft. beyond the Coastal Construction Control Line no variances to the setbacks would be requested and if the construction line is moved back from that 50 ft. mark, setbacks requested would be proportional to the reduced land area. Harry Cline, attorney representing Ed Hunter, owner of Clearwater Beach Hotel, spoke in opposition to the settlement, stating that they object to the buildings beyond the current building line. He stated that if this should occur, it will open the door for other buildings on the beach to request the same consideration. Commissioner Nunamaker moved to continue this item to the meeting of January 5, l989. The motion was duly seconded and carried unanimously. Item #3 - Charter Review Recommendations. The City Manager reported there were still two points that the Commission had requested clarification on, (1) regarding the $1,000,000 limitation on revenue bonds and (2) raising the purchasing limit from $7500 to $10,000. He stated an increase in the purchasing limitation would not eliminate the competitive process. He stated a review of other municipalities resulted in finding that Clearwater is the only municipality with a limitation on revenue bonds. He feels the limitation should be removed. Discussion ensued regarding the proposed Charter and the Mayor requested that the phrase "within three months after adoption of this Charter" be deleted from Section 2.01(C)(2). Discussion ensued regarding the 15 year limitation for leases of municipal property. One (1) Citizen spoke recommending that a question regarding the removal of the limitation for revenue bond issues be a separate question on the ballot. Discussion ensued regarding the elimination of the $1,000,000 limitation for revenue bonds which requires that anything over $1,000,000 go before the voters before it can be approved. The limitation does not apply to bond issues relating to public health and safety. It was questioned what issues would it affect. It was stated such issues as the purchase of property for park purposes and the construction of the City Hall Complex would fall within this limitation. Consensus of the Commission was to remove the limitation and to place this on the ballot as a separate question. Discussion then returned to the 15 year limitation on leases. Various options were discussed. The Commission consensus was to leave the 15 year limitation, but to remove the provision for a referendum for leases longer than 15 years. Discussion ensued regarding whether or not to establish a date that a term of office begins. Consensus was to establish the 1st Thursday of April as the beginning date of terms. Questions were raised regarding proposed Section 2.07(B)(5) reqarding forfeiture of office if a Commissioner becomes a candidate for City, County, State or Federal offices. The City Attorney stated that the Florida Resign to Run Law covers the situation. It was recommended that 2.07(B)(5) be deleted, 2.07(A) be amended to insert the words "or required" between "authorized" and "by" in the second line. Consensus of the Commission was to approve this. The Mayor requested that on Page 10, in the last line, that "his or her" be inserted. The City Attorney raised concerns regarding the proposed wording for Sections 6.09(A) and (B), which provides for initiative and referendum questions to be approved by the voters who cast a ballot. He was concerned that not all voters would vote regarding the issue, and this could be misinterpreted to require a majority of those who cast the ballot not necessarily those that vote on the issue. Consensus of the Commission was to leave the language as it currently exists in the Charter. A question was raised regarding Section 4.05 which states that the Commission will set the compensation for the attorney and his assistants. Consensus was to eliminate "Assistant City Attorneys" from this paragraph. Consensus of the Commission was for the City Attorney and City Clerk to compile the Charter Ordinances based upon tonight's discussion and to bring the Ordinance forward for 1st Reading at the January 5, l989 meeting. Item #4 - Direction regarding setting of the 2/2/89 meeting and consideration of the Florida League of Cities Legislative Conference. Commissioner Regulski moved to cancel the 2/2/89 meeting. The motion was duly seconded and carried unanimously. The City Attorney reported that the judge had denied the temporary injunction requested by those opposed to the billboard ordinance that has been proposed through citizen initiative. A question was raised regarding whether or not the Commission could clarify the question proposed in the ordinance, and it was stated that this was possible if the Committee agreed. The meeting adjourned at 10:25 P.M.