2011-0809 City Commission Workshop

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Summary Minutes:City Commission Workshop August 9,2011 City of Sunny Isles Beach,Florida Mayor Edelcup said he thinks we should look at it that we would provide the financing and that from time to time the Commission would always look at whether or not it wants to forgive some of that debt. A lot of it is going to depend on the economics of where we are at, but if it is a five-year, seven-year note payoff anywhere in that time period we can certainly be looking at either making annual small gifts to forgive it in part. Commissioner Scholl said contrary to popular belief, our pockets are not as deep as people think they are. We are in better shape than most cities but we are in better shape because we've approached our budget with all fiscal conservatism, we didn't bond up into future revenue we didn't have. Long before he was a Commissioner, he and the Mayor used to meet annually with the City Manager and dice up the budget and figure out how to deal with this from a prudent fiscal perspective, nonetheless we maintained our numbers but the decrease in assessment has effected us as well. Assistant City Manager/Finance Minal Shah said just like every other municipality or governmental agency our revenues are also declining which does make it more difficult to meet our debt covenant. So we too are nearing our debt capacity and so one of the questions she has is if we do come to an agreement with the School Board she is hoping that there is some language in there that is contingent upon the City being able to get the financing from a third party from banking, because we will be required to get waivers for our debt calculations. Jamie Torres said one thing that is different with the proposal for Sunny Isles Beach is that they spoke to their Treasurer and based on the amount we are talking about, she has already committed to begin repayment basically immediately. At this point it would show of their share to begin repayment immediately, and not wait the five to seven years. As far as revenue, he thinks that would help the City. Assistant City Manager Shah said if we had a commitment and the Interlocal Agreement executed, how much lead time does the City have to get the financing. Mayor Edelcup said if we can come up with the documents that it is going to take to make this thing happen,the repayment schedule,and that everything is predicated on the City being able to get the financing,and we fully expect to be able to get the financing, but it has to be part of the language, and for the purposes of these documents he wants to see the document he would assume for the moment that it is the full amount of the debt not half the debt but that the City would acknowledge annually looking at perhaps making a gift of forgiveness of some portion of that debt but in the event the City is unable to do it for economic reasons then the payoff period will definitely have to be for a longer period and we wouldn't expect you to pay it off in half the time if you are paying 100% of the debt. But likewise, if the economy improves hopefully the City is in the position to look at making that forgiveness. He would like the documents to reflect the opportunity of gift but the documents to reflect that it is really the full amount and a potential repayment of the full amount. Ms. Rijo-Conde said she would send that to their financial people. Commissioner Scholl said he doesn't think the length of the repayment is as important, it is what it is, but as the Mayor is saying, it would give us flexibility as well which is what is important. Mayor Edelcup said as much as we can he would like the legal instrument as close to being a form of debt as possible because it also gives us opportunities to be able to finance that deal by showing that there is that legal obligation there even if we are wrapping the City's credit on top of the School Board's credit 9