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HomeMy WebLinkAbout10-06-88 WS . OCOEE CITY COMMISSION WORKSHOP SESSION HELD OCTOBER 6, 1988 The meeting was called to order by Mayor Ison at 8:01 P.M. in the Commission Chamber. Present: Mayor Ison, Commissioners Bateman, Dabbs, Hager and Johnson (arrived late). Also present: City Attorney Rosenthal, Assistant City Attorney Woodson, Chuck Rosenthal, City Manager Ryan and City Clerk Grafton. Absent: None Municipal Governaent Transportation Project City Manager Ryan introduced Chuck Rosenthal of Public Financial Management. Public Financial Management were consultants to Ocoee during the last bond issue. Manager Ryan, Paul Rosenthal and Chuck Rosenthal had met primarily to discuss financing for Clark Road, since there was some concern about using impact fees for bonded indebtedness. Impact fees have been used for bonded indebtedness, usually as a secondary indebtedness, but these fees can have primary uses also. . Chuck Rosenthal, talking to the Commission, stated that the last time Ocoee floated a bond issue, it used franchise fees and gas taxes as a pledge to the bond holders. The magnitude of the Clark Road project, the amount of capacity left of that revenue and other uses for that money would limit ability to use that revenue for another bond issue as had been done in the past. Impact fees are starting to be used as security for bond issues. Impact fees have limited use, since they had to be used within the area the fee is received from and they have to be used for growth projects. However, if they are available, they can be used for a fixed percentage of the project. This requires certain certifications as to correct use, etc. Generally, impact fees can be used more from a cash flow standpoint. A general obligation bond is another source of funds for specific projects. The developers are the ones who would benefit most from the new road. One way to have them financially support the project is to just tell them to go ahead and build it. Another way, attractive to city and developer, is to issue a bond and finance the road all up front and have it secured by assessments levied against property owners for a period of 10 or 15 years. This would require a special assessment district that would include all properties that would be benefitted by the improvements. The method is dependent on a few people and is not as secure for bonding companies. Assessments are difficult to get done. In the current City Developers Agreement there are some things to be looked at under this assessment method. The agreement in some cases allows impact fee credits for building roads and if the developer is assessed for the building of the road, is this the same thing? Find out if the developers want the City to finance the road for them. The road is partially in Orange County. You cannot assess outside of the City. . When the City decides which of the funding methods to use, there is a certain amount of design work to be done. Could be upwards of $500,000.00. Funds cannot be issued before the road is designed because you don't know how many bonds to issue. Get a local bank to accept the takeout of the bond issue as security. - Page 2 Ocoee City Commission Workshop October 6, 1988 Attorney Rosenthal mentioned one problem inherent to as big a project as Clark Road is that the owners may not benefit 100% and, therefore, would not be responsible for 100% of the assessment. Secondary financing would probably be part of this scenario. Mr. Rosenthal recommends ironing out intentions and resources before going into any work on the project. He also recommended not depending on early expenditures on Bowness Road being reimbursed and available. The attorneys expressed a warning in that the interplay between assessment moneys and impact fees is precarious. You cannot get assessment funds and impact fees both from the same source. If Clark Road was done on a special assessment basis, Clark Road would come out of the projects that are being considered from transportation funding. On Developer Agreements, the language must be changed to provide for city coming in with special assessment districts. Manager Ryan: Developers could build the road in sections. You would not need special assessments or anything. We get different designs and quality of road construction and get disjoint at different sections at different times. It is not pro-active. The consensus of the group seemed to be that if the Commission wanted to go forward with the project, it would be best to either go through the special assessment process or do the project in cooperation or partnership with the landowners. ~ Commissioner Dabbs asked Chuck Rosenthal how many special assessment districts there are. It is a traditional form of financing. There are thousands of them. Commissioner Dabbs asked Chuck Rosenthal when Mr. Ryan had called about an opinion regarding impact fees. Mr. Ryan responded by saying he called Chuck last week and Drexel Burnham 6 or 8 months ago. Mr. Ryan said everyone told him it could be done. Usually the funding sources are flip flopped, primary pledge usually becomes secondary. Commission Hager commented that the assessment route sounded easier and you would not want to be half way into project when you would turn around to use another source of revenue. Impact fees would be 70%, the city would still be looking at 30% funding. Mayor Ison: Clark Road is not there now. Since it is non-existent, 100% of the project could be related to growth. Could some criteria other then front footage be applied to Clark Road? This type of tiered arrangement is acceptable and has been used. Is it possible that property owners benefiting from the construction might be involved in special assessment with a private sale of bonds? (Partnership with developer and they take back the debt.) Clark Road is not a ci tizen need - only for growth and development. Orange County Commissioners have indicated they would prorate a share of a given project in which the county has a specific interest. Whether or not this will still be in effect after the November election is a question. - Any of these proposals would work fine if 100% of the people agreed. Any dissent would create a problem. Commissioner Dabbs wants "ducks aligned" and have some hard data and the commitment fron the affected developers, commitment from the bank on funds and from the Commission on the fact it would want the road built. . Page 3 Ocoee City Commission Workshop October 6, 1988 Mayor lson suggested that, to begin the process, Attorney Rosenthal might be instructed to write an interlocal agreement for sharing of right-of-way with Orange County. The county could use its authority to reserve right-of-way for five years and agree to condemn any land use. City might be able to identify some contribution from Orange County also. Mayor Ison outlined the following: 1. Flow chart and interlocal agreement, 2. meet with developer and tiered group, and 3. call on bank on the basis of $500,000.00 advance for design. Call a meeting after these things have been accomplished and see where we stand. Attorney Rosenthal recommended caution and suggested that the Commission consider it will run into every obstacle possible, every delay and be prepared to understand. City Manager Ryan reported that the Barnett Bank has expressed an interest in participating in this project. He suggested Attorney Rosenthal start the interlocal agreement. Chuck Rosenthal will be available to assist with financial advice. This leaves the contacts with the developers, which should be done. A status report would follow. Commissioner Bateman recalled that the City vacillated on Bowness Road. Orange County representatives have expressed the fact that this should have been done long ago and would have been better and less costly for all concerned. He ~ cautioned against waiting. Mayor Ison again urged the Commission to move on Clark Road. He wants the developers in a public meeting with the Commission. He proposes building to Clarcona/Ocoee Road. Commissioner Dabbs: This road will create a need for sewer and water in this area. He wants the Commission to remember this impact also. City Manager Ryan and Mayor Ison discussed the basis for the public meeting. Mr. Ryan was concerned about "hitting the developers cold with this idea". Mayor Ison said he did not intend to "hit them cold". Mayor lson repeated that Clark Road will make a significant enhancement for the East/West Expressway. It will be a local collector road, bringing traffic from Clarcona/Ocoee Road to the East/West. Agreement: Mid-November meeting with developers in a workshop session. Establish Monday, November 14 at 7: 30 P.M. in the Backroom at the Holiday Inn. Paul Rosenthal will look into Developer Agreement. Mr. Ryan will contact the Barnett Bank. . Mayor Ison questioned pre-payment of bonds. Bonds are pre-payable at any time. The interest rate at ten years would be 7 1/2 and 8%. Why ten years? Assessments are traditionally ten years. Paul Rosenthal suggested that Mr. Ryan write the letter and invitation to the Developers. Mr. Ryan suggested a letter from the Mayor. . . . Page 4 Ocoee City Commission Workshop October 6, 1988 Mayor Ison stated that he felt the City of Ocoee was about to experience a new and better relationship with Orange County. ADJOURNKENT The meeting was adjourned at 9:13 P.M. ATTEST:~ ~.. Cit Clerk Thomas R. lson, Mayor F\~t"'OViP II-\\-q\