11-04-1991 - Regular
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CITY COUNCIL OF EDGEWATER
REGULAR MEETING
NOVEMBER 4. 1991
MINUTES
CALL TO ORDER
Mayor Wessler called the meeting to order at 7:00 p.m. in the Community Center.
ROLL CALL
Mayor Tanya Wessler
Councilman Kirk Jones
Councilperson Louise Martin
Councilperson NoraJane Gillespie
Councilman Michael Hays
City Attorney Krista Storey
City Manager George McMahon
City Clerk Susan Wadsworth
Police Chief Lawrence Schumaker
Present
Present
Present
Present
Present
Present
Present
Present
Present
INVOCATION. PLEDGE OF ALLEGIANCE
Reverend Dean Hampton, Bella Vista Baptist Church, delivered the invocation. There
was a pledge of allegiance to the Flag.
AWARD CERTIFICATE TO JAMES CASTETTER AS VOLUNTEER TEAM MEDIC FOR POP WARNER FOOTBALL -
Mayor Wessler read the letter of accomplishments written by Fire & Rescue Chief
William Vola and presented the certificate to Mr. Castetter.
APPROVAL OF MINUTES
Special Meeting of October 10. 1991 - Councilman Hays moved to approve minutes of
October 10. Councilperson Martin seconded the motion. Motion CARRIED 4-0.
Councilman Jones abstained from voting as he was not present at that meeting.
Regular Meeting of October 21. 1991 - Council person Gillespie moved to accept.
Councilman Hays seconded the motion. Motion CARRIED 5-0.
CITIZEN COMMENTS
Mayor Wessler asked for audience comments for anything not on the agenda. There
were no comments at this time.
CONSENT AGENDA
Approval of Florida Inland Navigation District Project Agreement related to Riverwalk:
Appointing Beautification Committee as Interim Tree Committee: Request to waive
purchase requirements for certain routine and recurrina vendors to streamline
purchasina: and Ratification of baraaining unit aareements for Public Emplovees
Association Su ervisors Pubic Em 10 ees Association and Police Benevolent
Association Post oned 10 21 91 - Councilperson Gillespie asked if Ms. Storey had
reviewed the agreements and is satisfied with them. Ms. Storey replied she reviewed
these and consulted with Mr. Gil Wooten and he indicated the agreements are as he
bargained with the unions on behalf of Council. Councilperson Gillespie moved to
accept the consent agenda. Councilman Jones seconded. Motion CARRIED 5-0.
NEW BUSINESS
Merit Board's recommendations to approve various arade and class descriptions and
title change and uparade - Councilman Hays moved to TABLE this and give Mr. McMahon
an opportunity to review this. Councilperson Gillespie seconded the motion. Motion
CARRIED 5-0.
ORDINANCES. PUBLIC HEARINGS. AND RESOLUTIONS
PUBLIC HEARING (OTHER THAN ORDINANCES)
Public Hearing on Transmittal of Proposed Comprehensive Plan Amendment with first
readina of Ord. 91-0-13 - Councilperson Gillespie moved to go to public hearing.
Councilman Hays seconded the motion. Motion CARRIED 5-0.
Mayor Wessler requested audience comments. Mary Hansen, 1620 S. Clyde Morris, Daytona
Beach, represented the applicant for annexation. She referred to a meeting held with
County staff members and City's Planning Director regarding several issues including
traffic engineering. She noted they may need to go through a vacation process and
comments from the County look positive for Growth Management Commission and Department
of Community Affairs. She noted the 650 units which is maximum is only about 100 off
what the County calculated it would have under its own density which should help
with DCA.
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ORDINANCES. PUBLIC HEARINGS. AND RESOLUTIONS (Continued)
PUBLIC HEARING (OTHER THAN ORDINANCES)
Public Hearing on Transmittal of Proposed Comprehensive Plan Amendment with first
reading of Ord. 91-0-13 (Continued) Mayor Wessler requested a motion to close public
hearing. Councilperson Gillespie so moved to close public hearing. Councilman Hays
seconded the motion. Motion CARRIED 5-0.
Mayor Wessler read the Ordinance. ORD. 91-0-13 - AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF EDGEWATER, FLORIDA, PURSUANT TO SECTION 163.3184, FLORIDA STATUTES,
ADOPTING AN AMENDMENT TO THE CITY OF EDGEWATER'S COMPREHENSIVE PLAN LAND USE MAP;
CONTAINING A REPEALER PROVISION, A SEVERABILITY CLAUSE AND PROVIDING FOR AN EFFECTIVE
DATE. Councilman Hays moved to accept 91-0-13. Ms. Storey explained the purpose of
this first reading is to transmit the proposed plan amendment to DCA and then it will
come back to Council subsequent to their review. Councilperson Gillespie seconded
the motion. Motion CARRIED 5-0.
FIRST READING:
Ord. 91-0-14 Annexing approx. 450 acres known as Victoria Lakes - Mayor Wessler read
the Ordinance. ORD. 91-0-14 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
EDGEWATER, FLORIDA, ANNEXING CERTAIN REAL PROPERTY TO THE CITY OF EDGEWATER, FLORIDA,
LOCATED IN SECTION 48, TOWNSHIP 18 SOUTH, RANGE 34 EAST, VOLUSIA COUNTY, FLORIDA,
PURSUANT TO SECTION 171.044, FLORIDA STATUTES; REDEFINING THE BOUNDARIES OF THE CITY
OF EDGEWATER, FLORIDA BY AMENDING SECTION 1-10 OF THE CODE OF ORDINANCES OF THE CITY
OF EDGEWATER, FLORIDA; PROVIDING THAT UPON ADOPTION CERTIFIED COPIES BE FILED WITH
THE CLERK OF THE COURT IN VOLUSIA COUNTY AND THE DEPARTMENT OF STATE; CONTAINING A
REPEALER PROVISION, A SEVERABILITY CLAUSE AND PROVIDING FOR AN EFFECTIVE DATE.
Councilman Hays moved to accept 91-0-14. Councilman Jones seconded the motion.
Motion CARRIED 4-1. Councilperson Martin voted NO.
Ord. 91-0-15 Rezoning approx. 450 acres known as Victoria Lakes from Volusia County
A-3 to City MH-2 Mobile Home Subdivision District and B-3 Highway Service Business
District - Mayor Wessler read the Ordinance. ORD. 91-0-15 - AN ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF EDGEWATER, FLORIDA, REZONING APPROXIMATELY 450 ACRES OF
PROPERTY KNOWN AS VICTORIA LAKES AND LOCATED IN SECTION 48, TOWNSHIP 18 SOUTH, RANGE
34 EAST, VOLUSIA COUNTY, FLORIDA, AND ANNEXED INTO THE CITY OF EDGEWATER PURSUANT TO
ORDINANCE NO. 91-0-14 FROM VOLUSIA COUNTY A-3 TO CITY OF EDGEWATER MH-2 MOBILE HOME
SUBDIVISION DISTRICT AND B-3 HIGHWAY SERVICE BUSINESS DISTRICT; DIRECTING THE CITY
CLERK TO ADVERTISE THIS ORDINANCE AS PROVIDED BY LAW; AMENDING THE OFFICIAL MAP OF
THE CITY OF EDGEWATER ACCORDINGLY; CONTAINING A REPEALER PROVISION, A SEVERABILITY
CLAUSE AND PROVIDING FOR AN EFFECTIVE DATE. Councilman Hays moved to accept 91-0-
15. Councilman Jones seconded the motion. Councilperson Gillespie asked that Mr.
Karet explain the change for the public's benefit. Planning & Zoning Director Mark
Karet stated the purpose of this rezoning is to place a designation on the property
for the two uses that have been discussed, the first being commercial, which is B-3
highway service district, and the residential use, which is the MH-2, which is
actually listed in the book as manufactured housing subdivision. He explained it's
simply to have zoning designation and the development will be controlled by the
development agreement that will be negotiated between the City and the developer.
Councilman Hays asked if it should state MH-2 Manufactured Housing versus Mobile
Homes. Council person Gillespie asked if it should be changed. Mr. Karet replied yes,
the proper name of MH-2 is manufactured housing subdivision district. Motion CARRIED
4-1. Councilperson Gillespie voted yes as amended and Councilperson Martin voted NO.
Mayor Wessler introduced George McMahon, the new City Manager, and welcomed him to
Edgewater.
Res. 91-R-60 Appointing one member to Citizens Council Advisorv Committee due to
resignation of Stanley Carlson - Mayor Wessler stated she agreed with the way they
appointed people to these boards but doesn't any more and would like the City Manager
and City Attorney to brainstorm a way for Council to make these appointments.
Councilperson Gillespie asked if she's referring to all of them voting on each one
and if she'd like Council to render input to the City Manager. Mayor Wessler replied
yes, and referred to an appointment made on the day the application was turned in
which wasn't fair and shouldn't happen again. She said they shouldn't have to agree
to someone's nomination if they don't want to. Councilperson Gillespie noted she
thought they might run into problems. Councilman Hays noted one of the reasons they
changed this from a nomination to an appointment was so each person has an opportunity
to appoint someone of their choice to the board and the previous process didn't seem
to be working well. He added the process is an embarrassment for some people. Mayor
2 Council Regular Meeting Minutes
November 4, 1991
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ORDINANCES. PUBLIC HEARINGS. AND RESOLUTIONS (Continued)
Res. 91-R-60 Appointing one member to Citizens Council Advisory Committee due to
resignation of Stanley Carlson (Continued) Wessler requested they all give input to
Ms. Storey and Mr. McMahon and if it stays the same. the Council member making the
appointment could call the other applicants and tell them they won't be nominated
or reappointed before the meeting so as not to embarrass them here.
Mayor Wessler nominated Richard Jones, 1530 Sabal Palm. She read the Resolution.
RES. 91-R-60 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EDGEWATER, FLORIDA,
APPOINTING ONE MEMBER TO THE CITIZENS COUNCIL ADVISORY COMMITTEE; PROVIDING FOR A TERM
OF OFFICE; PROVIDING FOR RIGHTS, PRIVILEGES, AND RESPONSIBILITIES; REPEALING ALL
RESOLUTIONS IN CONFLICT HEREWITH AND PROVIDING FOR AN EFFECTIVE DATE. Councilman
Jones moved to accept the recommendation. Council person Gillespie seconded the
motion. Motion CARRIED 5-0.
Mayor Wessler called a 5-minute recess at 7:18 p.m. She called the meeting back to
order at 7:24 p.m.
SECOND READING: (PUBLIC HEARING)
Ord. 91-0-11 Annexing 4.98 acres on West side of U.S. 1. Bella Vista Baptist Church
property - Mayor Wessler requested a motion to open public hearing. Councilperson
Martin so moved. Councilperson Gillespie seconded the motion. Motion CARRIED 5-0.
Mayor Wessler asked for comments on this annexation. There were none. She requested
a motion to close public hearing. Councilperson Gillespie so moved. Councilman Hays
seconded the motion. Motion CARRIED 5-0.
Mayor Wessler read the Ordinance. ORD. 91-0-11 - AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF EDGEWATER, FLORIDA, ANNEXING CERTAIN REAL PROPERTY TO THE CITY OF
EDGEWATER, FLORIDA, LOCATED AT SECTION 12, TOWNSHIP 18 SOUTH, RANGE 34 EAST, PURSUANT
TO SECTION 171.044, FLORIDA STATUTES; REDEFINING THE BOUNDARIES OF THE CITY OF
EDGEWATER, FLORIDA BY AMENDING SECTION 1-10 OF THE CODE OF ORDINANCES OF THE CITY OF
EDGEWATER, FLORIDA; PROVIDING THAT UPON ADOPTION CERTIFIED COPIES BE FILED WITH THE
CLERK OF THE COURT IN VOLUSIA COUNTY AND THE DEPARTMENT OF STATE; CONTAINING A
REPEALER PROVISION, A SEVERABILITY CLAUSE AND PROVIDING FOR AN EFFECTIVE DATE.
Counc ilperson Gi llespie moved to accept 91-0-11. Councilman Hays and Counci lman Jones
seconded the motion simultaneously. Motion CARRIED 5-0.
Ord. 91-0-12 Annexing 5.41 acres on West side of U.S. 1. South of Silver Ridge and
North of Carter's Motel - Mayor Wessler requested a motion to open public hearing.
Council person Gillespie so moved. Councilman Hays seconded the motion. Motion
CARRIED 5-0. Mayor Wessler asked for comments on this annexation. There were none.
She requested a motion to close public hearing. Councilperson Gillespie so moved.
Councilman Hays seconded the motion. Motion CARRIED 5-0.
'II
Mayor Wessler read the Ordinance. ORD. 91-0-12 - AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF EDGEWATER, FLORIDA, ANNEXING CERTAIN REAL PROPERTY TO THE CITY OF
EDGEWATER, FLORIDA, LOCATED AT SECTION 2, TOWNSHIP 18 SOUTH, RANGE 34 EAST, PURSUANT
TO SECTION 171.044, FLORIDA STATUTES; REDEFINING THE BOUNDARIES OF THE CITY OF
EDGEWATER. FLORIDA BY AMENDING SECTION 1-10 OF THE CODE OF ORDINANCES OF THE CITY OF
EDGEWATER, FLORIDA; PROVIDING THAT UPON ADOPTION CERTIFIED COPIES BE FILED WITH THE
CLERK OF THE COURT IN VOLUSIA COUNTY AND THE DEPARTMENT OF STATE; CONTAINING A
REPEALER PROVISION, A SEVERABILITY CLAUSE AND PROVIDING FOR AN EFFECTIVE DATE.
Councilperson Gillespie moved to accept Ordinance 91-0-12. Councilman Jones seconded
the motion. Motion CARRIED 5-0.
UNFINISHED BUSINESS
Specia 1 report on Capital Improvement Proaram expenditures as prepared by Brent
Millikan & Company - Alex Kish, partner with Brent Millikan and Company, introduced
Mr. Carey White in the audience, who was in charge of this engagement. He explained
that in June they were asked by Council to look at the Capital Improvements Program
from its inception through at that time May 31st with respect to looking at the
propriety of some of the expenditures and other data charged to the program, and
that program was a target of a large amount of controversy. He said they were charged
with 5 major things to do, and first they made a recapitulation of all charges made
to the program and went back to 1986 and reviewed the audit reports and reconciled
data. He said they included an Exhibit A that has a recap of all the funds spent
on the CIP by vendor and not by function or type of work performed. He said they
tried to break down major sources of the financing and they put in Exhibit B a
3 Council Regular Meeting Minutes
November 4, 1991
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UNFINISHED BUSINESS (Continued)
Special report on Capital Improvement Proqram expenditures as prepared by Brent
Millikan & Company - Alex Kish (Continued) recap of all the bond funds and those two
numbers agree with the recap of sources in Exhibit A. He stated the most important
parts of the study were to dispel a lot of controversy associated with the program
and to verify that all charges were supported by documentation sufficient to prove
they incurred those charges and to verify all contracting was done in accordance with
existing City policies. He said the last item was if there were any duplicated or
unnecessary expenditures and it's very difficult because of the scope limitation
placed on the overall examination and they were looking at only CIP charges and not
what hit the utility fund in that 5 year period in addition to that being capitalized.
He stated they must look at results very objectively and hindsight is 20/20 and it's
easy to go through after the fact and be critical. He noted they're looking at a $5
million project from inception and there will be exceptions basically on the magnitude
of the project. He said they need to break down items they feel are significant and
the appropriate disposition of those comments will be left up to Council. He stated
total charges through May 31 were $5,091,589 and sources were internal financing
$311!688 came from existing surplus funds, $52,792 from restricted development funds,
and ~4,727,109 came from BAN proceeds. He explained they broke down the $4,727,109
in Exhibit B and looked at compliance with contracting provisions. He said item 3
on page 1 shows one of the most important parts was to review all CIP expenditures,
compile them to examine, and then traced each contractu a 1 ob 1 igat ion back with
invoices, contracts, and any other documentation that would substantiate the charges.
He added they looked to be sure the expenditures were appropriately authorized per
Section 9 of the City Code. He noted there were some applicable restrictive loan
covenants that were entered into with respect to borrowing dollars and they were
examined. He said on page 2 the first finding showed expenditures prior to receiving
written certification of approval. He said the certification was required as a
covenant indicating all expenditures were approved in writing by the consulting
engineer prior to being disbursed. He said that provision was placed in the 1989
financing and they noted $1,252,443 cash disbursements that did not have certificates
prior to being disbursed. He said 99% had received certificates of approval in
writing subsequent to issuance and because they were not prior to that, they're listed
as compliance exceptions. He stated to avoid that in the future a system should be
put in place to monitor cash disbursements of construction fund dollars. He said they
had a lot of compliance requirements that get put into some of these instruments and
he can understand how some can be passed over but they are required procedures. He
noted there were instances where invoices were rendered by contractors and paid from
the construction fund prior to formal authorization or a contract. He said Section
9-26 of the Code requires all purchases for services in excess of $3,000 be approved
by the City Counci 1. He stated they have a number of contract ing circumstances
available to the City with acquisition of personal services but it does require
Council approval if over $3,000. He said invoices for contract services totalling
$68,194 were disbursed prior to obtaining that authorization. He suggested they
develop an internal contracting system to monitor those. He added that about $68,000
did not have the required approvals, or about 2%, of the 4-5 million dollars.
Mr. Kish stated on page 3, item C, they have professional services for legal services
at hourly rates that were not in agreement with contracts in effect during the period
of time the services were rendered. He noted Mr. Alvarez received compensation at
$75 an hour for all in-house legal services related to the CIP on a retroactive basis.
He explained that prior to May 15 the authorized rate was $35 an hour and he was paid
directly from closing at one of the bond issues. He noted that after the fact the
City did detect the overpayment and a credit of $3,010 was posted to his second
invoice rendered and that credit equalled the excessive billing on the first time.
He pointed out that after the secondary credit was posted it came to Council and they
approved the retroactive increase from $35 to $75 an hour. He said it was an
exception and it was monitored and detected from the City's purchasing system, but
Council did approve it subsequent to that point. He stated this is a contracting item
and it was in excess of the $3,000 purchasing limit and required evidential
adjustments to documented contracts and there was none, but the amount was approved
by Council.
Mr. Kish stated on page 3, item 0, they noted the 1990 BAN refinancing had two issues
written off the City's books with the Gulf Breeze note and another obligation to
eliminate any conflicting covenants or promises, or they get a better interest rate
and defease these issues from placing funds in escrow. He said pursuant to the 1990
refinancing, the financial advisor on behalf of the City negotiated a $4,000 contract
with a County firm to perform these escrow verification services and after inquiry,
4 Council Regular Meeting Minutes
November 4, 1991
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Mr. Kish stated there was an additional closing as a result of circumstances that
required this same firm be engaged to perform a secondary escrow verification on
additional dollars and again the first or second contracts could not be provided for
review and nothing to indicate they had been approved by Council.
Mr. Kish said on item 4, page 4, they reviewed all professional service contracts to
see that providers request for payments were in compliance with the terms and
conditions. He said references have been brought in the past regarding the contract
with Greenburg, Traurig, etc. in Miami and this firm was solicited to act as bond
counselor responded to the request for legal services and their contract response
to the City had several different remuneration provisions with one being a blended
rate, one a fixed rate, and one a basic hourly rate at an individual's level of
competence or specialty. He noted they could find nothing that the City exercised
any of these three options and the contract was approved but without a provision for
payment so the firm charged the actual hourly rate of the individuals involved. He
said they found the work performed was not in agreement with the original contract
but the contract was approved with a resolution and there was a paragraph to provide
additional services but no formal decision was ever made as to a payment provision.
He stated a contract ing system shou ld be cons idered for development that can be
monitored for the breakdown of services provided to the City.
Mr. Kish stated on page 4, item B, Resolution 89-R-56, they had an agreement with the
current accounts to perform services and provide necessary services associated with
the CIP at a discounted rate of 30% off normal hourly billing rates and in review of
all charges, including their own charges, they found an invoice dated August 2, 1989,
and June 14, 1990, indicating billing rates did not coincide with rates provided for
in the contract. He said there's confusion with the contract because it lists billing
rates for each member of the firm but he thinks those were rates charged on everything
and it's uncertain which rates were in effect during that time and which rates were
at 30% discount. He explained the contract and resolution attached and minutes
engaging the firm indicate anything non-audit related provided to the City would be
30% discount and representatives of the firm were present at that meeting and did not
dispute the arrangement. He added the contract was not amended to include any changes
to the contract. He said hourly rate increases were 21% and 38% for principal and
manager time charged to the City but the contract approves specific limits on annual
hourly rate increases and limited those to 5% based on the consumer price index and
the first adjustment could not take effect until October 1, 1990, and these were retro
before that date. .
Mr. Kish stated on the escrow verification analysis, they noted essential personnel
billing data was not supplied to the City to substantiate actual time and hourly
rates and there's a question of which contract, if any, these services fall under.
He said inquiries showed they were contracted directly by the Financial Advisor under
a separate contract agreement and to his knowledge the City has not executed the
contract. He said in the absence of the agreement, they based it on the existing
contract with the Orlando office, and if that's the case, it goes into the 30%
discount area. He stated either they have a contract or not, and if so, and it's in
effect, they need to be supplied that information and see where it was approved by
Council. He added if it was grandfathered under the other agreement, that has a
clause that services will be with 30% discount. He said they can resolve if they have
a contract or not, and it's not a significant amount of money but is a compliance
problem. He noted that Mr. Munoz's response indicated it warrants additional inquiry.
Mr. Kish stated they reviewed Dyer, Riddle, Mills & Precourt contracts, which were
the largest, but didn't have individual rate information and obtained those rates
from Dyer, Riddle to substantiate amounts charged on the project. He pointed out the
contract agreement has a provision that requires fringe benefit rates and overhead
rates to be annually reviewed and adjusted and they're looking at a contractual
compliance section and had those rates been adjusted they'd probably have been upward,
5 Council Regular Meeting Minutes
November 4, 1991
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UNFINISHED BUSINESS (Continued)
Special report on Capital Improvement ProQram expenditures as prepared by Brent
Millikan & Company - Alex Kish (Continued) but this is a compliance exception and
should be done annually. He said rates were maintained without change throughout the
CIP and they're talking only about fringe benefits and overhead rates. He suggested
this be done annually to be fair to both sides.
Mr. Kish stated on page 6, item 5, they reviewed copies of minutes including committee
meetings to get an understanding of chronological actions and changes which took a
lot of effort and a few items need to be brought to their attention from a compliance
perspective. He said in October, 1987, a contract for engineering services indicated
engineering services in excess of $2,000 would be specifically approved by Council
and this conflicts with existing purchasing requirements and because of the lower
threshold places a burden on them internally. He noted that was done through Mach,
1988, but subsequent to that time procedures were discontinued. He said Mr. Munoz
researched this and it appears there was a change in policy of the then City Manager
but it's a direct compliance situation and a conflict with the contract being more
restrictive than the internal purchasing policies and procedures. He added he feels
the more restrictive would prevail and found some items were not approved from this
contracting provision.
Mr. Kish stated they recommend they look at a master contract for payment of hourly
rates to cover any hurdles and the contract system breakdown will be effected by
having provisions in a contract that are more restrictive than the internal Code of
Ordinances and because of that several contract provisions have bounced as exceptions
in Exhibit 0 of the report.
Mr. Kish stated item 6 was to decide if they had duplicated billings and services and
they're looking at data that they reconciled the financial statements that's a
component of an enterprise activity and they have utility operations that are
continuing to move and have charges for services and other activities that are hitting
the general labor and they were not in a position to re-audit the utility operation
for the last 5 years. He noted this places a scope limitation and they could not
verify if things were duplicated if they couldn't see the entire system and he doesn't
think that was the intent.
Mr. Kish said on item A, page 7, they noted the consulting engineering firm was
simultaneously engaged to perform all sorts of services and throughout this phase
there was a possibility they could have a problem and they want it made clear they
are not suggesting there was a problem, just a potential to have a problem generated
as a resu 1 t of contract i ng those serv ices. He sa i d those were done over an
overlapping period of time and attestation of services could not be performed by
independent parties and the procedure is not uncommon, but there's a potential that
duplicated services could be performed without any verification.
Mr. Kish noted the other item in B was fringe benefits and overheard were not analyzed
yearly and individual hourly rate adjustments are made by the engineers at their
discretion and there's no procedure in effect that allows you to monitor those
changes. He said they feel they should develop a master plan to require all service
providers to notify the City of any hourly rate adjustments prior to the effective
date of those adjustments.
Mr. Kish said the third item on 6, C, had escrow verification services rendered on
two occasions with respect to refinancing of the 1989 BAN and defeasance of Gulf
Breeze and another obligation. He said on June 7, 1990, and August 27, 1990, there
were separate invoices for $4,000 each by the verifying account who performed those
services. He stated they noted the re-performance was required on a secondary closing
on August 27, 1990, due to an error made in determining the amount necessary to refund
the Gulf Breeze obligation and that amount was not known at the June 7, 1990, closing
and required scheduling of a secondary closing. He added as a result, the
verification was performed for the first closing with what was thought to be numbers
and then again in August and they were advised that due to an oversight the amount
to be held in escrow for Gulf Breeze was not absolutely confirmed on June 7. He said
it was uncertain as to who was responsible for making that error but as a result there
was a secondary closing required for August and a second verification was prepared
for $4,000. He said additional charges were charged after the date of their report
at the close of permanent financing in August, 1991, with $4,200 by bond counsel for
attendance at the secondary bond closing so they feel something should have been done
to tie that dollar amount down on the Gulf Breeze obligation. He said there was
6 Council Regular Meeting Minutes
November 4, 1991
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UNFINISHED BUSINESS (Continued)
Specia 1 report on Capital Improvement Program expenditures as prepared by Brent
Millikan & Company - Alex Kish (Continued) correspondence that the dollar amount had
been agreed upon but it was not and the City spent $8,179 as a result of that and
something should be done to explore who was at fault but he doesn't know if there's
any recovery or what can be done. He added they received correspondence back from
other parties but still feel there's a problem there and it's not a large dollar
amount but is a slip up and they didn't have a firm number tied down and the City
incurred what they feel were duplicated costs.
Mr. Kish stated each of these areas need to be reviewed by Council and some are
significant, some insignificant, and in discussing it with the City Manager and
Finance Director he thinks certain actions or system changes should be considered
to avoid these happening in the future. He suggested Council look at each comment
and pursue whatever action they wish and he can respond on each of the recommendations
if they wish or help them with implementing anything they want to or to get a better
understanding. He pointed out they didn't perform an audit, the purpose was to render
an opinion on the financial statements and they looked at a component and are not
in a position to render an opinion on the financial statements that have been
previously rendered.
Councilman Hays stated he has a lot of questions but perhaps it might be wiser to give
the City Attorney and City Manager a chance to go over this and review it and get back
in a few days with their recommendations. He noted apparently there are some problems
and he'd like Ms. Storey and Mr. McMahon to have an opportunity to look at it and give
their recommendations before they proceed. Councilperson Gillespie agreed and said
she wants the public to have access to it to get their input. Mayor Wessler noted
anyone can review it. Councilman Hays suggested they schedule another workshop or
meeting to give them time to ask Mr. Kish questions. Councilperson Gillespie stated
she'd like a special meeting or workshop,. whatever Ms. Storey and Mr. McMahon prefer.
Ms. Storey noted she has no problem with a special meeting or workshop. Mayor Wessler
asked Ms. Storey and Mr. McMahon to set up a meeting when they're ready. Mr. Kish
stated he can be called if Council has questions. Councilman Jones suggested anyone
mentioned in the document could be notified to have their comments to the City
Manager. Mayor Wessler agreed anyone in this document should be able to respond as
they see fit. Councilperson Gillespie noted they have some of the correspondence and
they should be invited to come.
COUNCIL/OFFICERS REPORTS
City Attorney
Ms. Storey stated she got previous approval at the October 7 meeting to proceed with
ordering the computer system for her office and she coordinated it with David Colee
who provided her with a proposal and quotes from a couple of firms held dealt with
in the past. She said with Mr. Munoz's help they solicited another bid and Mr. Colee
reviewed that bid and Mr. Munoz was aware of the local firm that would be able to
provide service to us. She added Mr. Colee's initial recommendation would be a firm
providing services from Altamonte Springs and after talking with Mr. Colee he felt
the price for the system they'd received from Computers Unlimited of Daytona Beach
was a good proposal and based on the same type purchasing requirements Mr. Kish
mentioned, the price of the system would be $4,964 and requires special Council
approval. She explained that Mr. Munoz had provided in the capital portion of her
budget $3,900.12 and she has delayed hiring her legal secretary and has funds she can
adjust into that system. She requested Council authorization to proceed forward with
this purchase. Councilperson Gillespie so moved. Councilperson Martin seconded the
motion. Motion CARRIED 5-0.
Citv Manaaer
Mayor Wessler introduced George McMahon, who started working this morning. Mr.
McMahon thanked Council for the opportunity to be here and the privilege of working
with them. He said helll meet with City staff tomorrow morning. He said he feels
this will be an enjoyable experience and hopes he will live up to their expectations.
City Council
Councilman Jones stated he welcomed Mr. McMahon this morning and feels he'll help
accomplish things Council wants done and they need to give him the direction they
want to go. He said he mentioned the newsletter and Mr. McMahon is familiar with
that and is eager to get started with it.
7 Council Regular Meeting Minutes
November 4, 1991
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COUNCIL/OFFICERS REPORTS (Continued)
Councilperson Martin welcomed Mr. McMahon and said she's glad to see him sitting
down with them and getting involved in their problems.
Councilperson Gillespie welcomed Mr. McMahon and said she passed along the clown Mr.
Billups had given her.
Councilperson Gillespie thanked the 17 volunteers that filled the 3,000 candy bags
for the Spook House, the 8 who worked the Toddler Fun House, and the 4 that suggested
new games which she'll pass along to Mr. Corder. She said it was wonderful and she
appreciates the opportunity.
Councilperson Gillespie stated Mrs. Wadsworth gave them a memo about the by-laws for
the Citizens Advisory Committee and they can comment on that or put it on the agenda.
Councilperson Gillespie wished a safe trip for those going to Tallahassee for the
League of Cities meeting. She asked if they'll be signing the SRF loans while there.
Ron Ferland, Vice President of Dyer, Riddle, Mills & Precourt, Inc., suggested they
stop by because they should be ready.
Councilperson Gillespie stated if anyone wishes to read the report, Mrs. Wadsworth
can arrange to check it out or she can make copies at 15 cents a sheet.
Councilman Hays thanked Jack Corder and all those who participated in the Halloween
House. He said it was unbelievable what they did and it was a job well done.
Mayor Wessler stated that Mr. Munoz asked that Stan Livengood speak at this time.
Stan LivenQood, Financial Advisor with Raymond James Associates,' stated they've been
working on something for a few months that was put in motion by the previous Council
regarding refunding of BAN's last summer. He explained when the two debt service
obligations, Gulf Breeze and 1964 bonds, were refunded an escrow consisting of U. S.
Government Secur i ties was placed with Sun Bank to prov i de for payment of those
obligations until their maturity, and they told Council at that time that because the
BAN's were expected to be refunded with the bonds that were issued earlier this year
that the bonds were expected to bear a higher interest rate than bond anticipation
notes and Federal tax law restricts the allowable investment yield on that escrow to
the interest rate on the refunding obligations. He said the bonds bear a higher
interest than the BAN's and it's possible to restructure that escrow at a higher
allowable yield which means a lower principal amount of securities must be in the
escrow invested at a higher rate will produce the same cash flow to payoff those two
obligations. He said they were aware of the potential of doing this last year when
the BAN's were issued and the first and second escrows were established. He stated
they feel a total of $50,000 will be available to the City ultimately and upon
completion of this transaction immediately, which can be carried out in 10 days to
2 weeks, they can generate in excess of $15,000 now and an additional $35,000
available and freed up from this escrow upon extinguishment of this escrow and
obligations being paid off on this escrow, which will occur in 1995. He requested
authorization to proceed with that restructuring with the caveat that no less than
$15,000 of cash will be freed up and generated with no less than $35,000 upon the
extinguishment of the escrow in 1995. He explained this is net of all expenses and
there will be an additional verification report that will have a written proposal
before Council before any work is carried forward on that third verification.
Councilperson Gillespie asked if another verification will be $4,000 of that $15,000.
Mr. Li vengood rep 1 i ed it's net of a 11 expenses and there wi 11 be a fee of bond
counsel, but will not be a financial advisory fee involved. He noted Sun Bank's
attorney may have some fee and Sun Bank would remain as escrow holders as they agreed
to serve as escrow holders for no fee as long as they continued as paying agent for
the outstanding obligation. Councilperson Gillespie asked about the escrow fee from
Sun Bank's attorney that was in the report. Mr. Livengood replied Sun Bank did not
agree to absorb any attorney fees but Sun Bank Trust Department did not charge a fee.
Mayor Wessler requested Ms. Storey's input. Ms. Storey explained this is not her area
of expertise and she thinks she and Mr. McMahon may need an opportunity to discuss
this further. Councilperson Gillespie asked if they could approve his request subject
to Mr. McMahon's and Ms. Storey's approval. Mr. Livengood stated he'll arrange for
Dan Livermore to call Ms. Storey and perhaps Mr. McMahon. Mayor Wessler requested
a motion for approval. Councilperson Martin made the motion. Councilperson Gillespie
seconded the motion. Motion CARRIED 5-0.
8
Council Regular Meeting Minutes
November 4, 1991
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QUESTIONS FROM PRESS
There were no questions from the press.
CITIZEN COMMENTS
Norm Billups welcomed the new City Manager and City Attorney. He requested details
on the well casings and if the taxpayer is responsible for correcting this or if the
contractor will. Councilman Hays explained the drilling process at the wellfields
and that they reached a point where it's like caverns and they cannot finish the wells
because it could cave in on itself. He noted they need steel casing with caulk around
it and it's a way to protect the wellfields from caving in from the top. He added
as the contractor was working on the wellfield there was a possibility of caving in
and it could take equipment and all. He said if they didn't put these casings in the
ground, the contractor would have no choice but to pull away from the job and they'd
have to start with square one, and they evaluated it and are going to go on with the
wellfields because they need the water. He said 6 out of 7 wells hit that and there's
no way to know that until they poke a hole in the ground and they did look at the
options. Mr. Billups asked if the contractor will pay for it. Councilman Hays
replied it will come from CIP. Mayor Wessler pointed out it's not the contractor's
fault. Councilman Hays explained they put aside a certain amount in the CIP as a
contingency for something like this and there's not going to be another assessment.
He said he doesn't know of any way the contractors could have known it was there.
Mr. Billups asked why they didn't have a geologist come in, perhaps from the State
University, and run a sound study on that. Councilman Hays said he asked that it was
told typically the cost for that testing is far greater than the casings. Mr. Ron
Ferland, Vice President, Dyer, Riddle, Mills & Precourt, Inc., stated before they
drilled the holes they drilled the 4" test well to do what Mr. Billups is saying and
that was when they identified that the subsurface strata was not capable of supporting
itself during the drilling of the actual wells and they put these pit casings in to
protect the hole so it ~ill not cave in on itself. He said they have a sand dune
there with very little clay to hold the wall of the hole up while they put the casing
pipe in. He said from a fiscal standpoint they did two things before that came to
Council, they considered going to second low bidder to see if it changed the price
but even with the change order, it's still lower bidder then the second low bidder
who would not have 90 feet of pit casing per well. He added there was an alternative
method of drilling the well, the cable tool method, where you push the casing pipe
down into the ground and it wou 1 d take 3 times as long and 1 abor wou 1 d be more
expensive than this method. He said the additional cost incurred was not anticipated
but it was caught before they drilled the well and lost it by sink hole formation and
by doing the testing the well driller did. He said whether the well driller does it
or the geologist does it, the results will still be the same and they need 90 feet
of pit casing. Mr. Billups asked to see those figures and asked Mr. Ferland if he's
the contractor. Mr. Ferland replied no, and explained the situation was not
anticipated and it was found during drilling and the extra cost does not create an
undue burden on the program, and it still keeps the low bidder the low bidder compared
to the other bids received. Mr. Billups said he understands there were 7 wells
involved and they had the test well so why didn't they find it on the first well
before drilling more. Mr. Ferland explained the test well was 611 versus 12" and it
was done by cable tool method and that spot did not have that problem and to incur
cost savings to the City and hasten drilling of the wells they went with the drilling
methods and out of 7 wells doing the test borings, 6 had the problem, and the 7th
that's located in the middle of the site didn't have the problem, it's in place and
is done. He said the geological formation is cavernous and sandy and requires pit
casing. Mr. Billups said it should have been discovered before they sunk 4 or 5 more
wells with additional expense to the CIP and he calls that faulty engineering. Mr.
Ferland said testing was done prior to drilling of the wells and pit casing was
identified from that testing and it was brought to the City.
Alice Murphy, 230 N. Riverside Drive, stated she has a home on the West side and
owns a strip on the East side about 10 feet deep and is unbuildable but assures her
riparian rights. She said the County has appraised this land so that it costs $500
a year for taxes for that 10 foot strip of land. She noted a short distance from
her property is a City park and City crews cut the grass and trim shrubs to improve
the view and she pays to have hers cut and trimmed, and she does donate that view to
passersby. She said there will soon be a bicycle path along the edge of her property
but that doesn't bother her because she likes people. She said she has no objection
to that property being zoned unbuildable or conservation with the aim of giving her
tax relief and she suggested all unbuildable lots on the East side of Riverside Drive
be so treated. She stated that those that build on the river and block the view are
not in the same category as those that leave it open and the latter should have tax
relief. Mayor Wessler suggested Ms. Murphy might want to turn it over to the City
9 Council Regular Meeting Minutes
November 4, 1991
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CITIZEN COMMENTS (Continued)
Alice Murphy (Continued) for tax relief. Ms. Murphy stated then you can't build a
dock and the City has expense and liability with public ground and she has no
objection to keeping the men working and Mr. Overstreet's crew worked all day and made
a beautiful view but there's no point in having 100 foot lots here and there that
they have to maintain and have the liability if someone gets hurt. She said they
could just zone it conservation and maybe some of the people would not sell the land
in front. Mayor Wessler suggested the City could own it and change it to
conservation. Ms. Murphy stated where the City has a park a former citizen tried
to build a dock but they wouldn't let him do it and he couldn't sell the property.
She said if she gives the land to the people, when her heirs try to sell her property,
they'll be told they cannot build a dock and nobody wants to buy a house on the river
if they can't build a dock. Mayor Wessler asked if she's saying that when she sells
the property, she could make money because they can put a dock there. Ms. Murphy
noted she has 10 feet that she can never build on and asked if it makes sense to
charge someone that amount of money for 10 feet. She added that New Smyrna Beach
permits docks but Edgewater does not. Mayor Wessler suggested Edgewater look at it
and asked if it would be worth $500 if they allow her to put it there. Ms. Murphy
replied not necessarily, and she referred to building officials allowing buildings
on certain unbuildable lots on Riverside Drive. She asked why they'd build a bike
path and destroy the view because they should keep the view open. She referred to
problems at high tide with people getting permission from the State to fill in.
Planning & Zoning Director Mark Karet noted he'll be happy to give a letter to anyone
that has an unbuildable lot but very rarely does the tax assessor's office lower the
assessment and they place a value on those riparian rights. Ms. Murphy stated they
don't like to give tax relief because people say they have an unbuildable lot and get
the relief and the next week they get a permit from our building department. Mayor
Wessler suggested Ms. Murphy talk with Mr. Karet to get relief, or the Council can
help. Ms. Murphy stated she'll go to Clay Henderson, and referred to a 94-year old
lady who bought property 40 years ago and didn't get relief from the County.
Pat DiLeva, former Safety Director, welcomed the new City Manager and referred to the
various capabilities and talents of the City's department heads. He noted he's still
a volunteer fireman. He said the City Council needs a lot of support and it can be
a hot seat. He added he thinks the new City Attorney will help the City a lot.
ADJOURN
Councilman Hays moved to adjourn. Council person Gillespie seconded the motion.
Meeting was adjourned at 8:48 p.m.
;#1-
ATTEST:
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CITY CLERK
Approved this 18thday of
November , 199-1--.
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MAYOR ~--\ -
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10 Council Regular Meeting Minutes
November 4, 1991