SESSION OF THE TOHOPEKALIGA WATER CHAMBERS LOCATED AT 101 NORTH CHURCH

Transcription

1 m SESSION OF THE TOHOPEKALIGA WATER AUTHORITY BOARD MEETING HELD WEDNESDAY, OCTOBER 22, 2003 AT THE CITY OF KISSIMMEE CITY HALL, COMMISSION CHAMBERS LOCATED AT 101 NORTH CHURCH STREET, KISSIMMEE, FLORIDA Present at the meeting of the Tohopekaliga Water Authority Board of Supervisors were Chairman Van Meter, Supervisor Arrington, Description ` Supervisor Reich, Supervisor Wells, Supervisor Moody, Executive Director Wheeler, Attorney Davis, Ex -officio Member Owen and Administrative Secretary Diaz. Ex -officio member Gant was absent. Date 10/ 22/ 03 Location CITY OF KISSIMMEE TIMEIEM MINUTES 6: 06: 29 MEETING CALLED TO ORDER - The meeting was called to order by Chairman Van Meter and the Invocation was led by Executive Director Wheeler followed by the Pledge of Allegiance. 6: 07: 08 - HEAR THE AUDIENCE No one came forward to discuss items that were not agendaed. 6: 29: 28 i 16: 07: 30 - CONSENT AGENDA APPROVAL OF MINUTES OF OCTOBER 8, 2003 Executive Director discussed the changes that were made to the minutes. These changes included under Old Business 8C Include last names and titles for Bruce Van Meter, Don Smallwood, Jo Thacker, and Brian Wheeler. Under New Business 9B Supervisor Arrington was under the impression that a time limit had been set for returning to the Board with the modifications made to the Administrative Policies and Personnel Procedures and also the Purchasing Policy. After listening to the tape, it was confirmed that the only time period mentioned was i" expeditiously". Under the 7: 21: 49 Section, Sunervisor Arrinatan had requested that the section

2 be separated into two paragraphs; one section discussing Space Use Permit and the other section discussing the Meeting for October 15, After verification that the minutes had been changed according to the recommendations; Supervisor Wells moved for approval of the minutes of October 8, 2003 with the revisions as discussed and Supervisor Reich seconded the motion. Motion passed 4 to 0. ( Supervisor Arrington was not present at this time.) 6: 12: 12 - OLD BUSINESS SECTION 8A SUBORDINATE BORROWING FOR FLORIDA WATER SERVICES CORPORATION ACCOUNTS RECEIVABLES. Toby Wagner, Southeastern Investment Securities, Inc. addressed the Board concerning the Addendum from SunTrust Bank which is an exhibit to Resolution The Resolution calls for short- term borrowing not to exceed $ 650, 000. Florida Water to supply Toho Water Authority with the correct amount before the end of the month. The amounts discussed are from $ 500, 000 to $ 650, 000. This short- term borrowing is an accommodation that SunTrust is doing for the Authority. SunTrust is not making much money on this. The interest rate that they are quoting is either a 30 -day Libor or a 90 -day Libor. We have the option of choosing whichever one when we are ready to close we can look at those Libors and see which is the best one and Brian Wheeler can determine how quickly he thinks he is going to get this receivable money back in. But Toho would have a commitment for ninety (90) days. As of today' s date, on a 30 -day Libor it would be 192 on a 90 -day Libor quote it would be 197. The difference between 192 and 197 on $ 650, 000 is roughly $25.00 a month. The cost of this is relatively inexpensive and it' s the cheapest way to go. There is a spreadsheet that Mr. Wagner did and it shows if the Finance Team had done it under the Bond Issue or if the Finance Team had done it tax exempt or taxable. Taxable proved out to be a little bit cheaper because Toho did not have as high legal expenses as opposed to a tax-exempt loan. ThP Finnnr`P Team is rpr.nmmpnriinn a tnynhh- Innn

3 The next step that the Finance Team will be looking into is to see if Brian Wheeler will need a short term line for anything but the Board is going to find that their cash position is probably going to be okay where the Board is not going to have to dig into a line. The Finance Team will certainly look into that once the bonds are closed and move forward. Supervisor Wells inquired as to why are we having to acquire the accounts receivable before we take title to Florida Water Service. Toby Wagner said that it' s going to be at the same time. This loan is going to close at the same time we would close on the Florida Water deal which would be sometime in November. It doesn' t have anything to do with the A Bonds. This is over and above the purchase price. The question posed was if Toho is purchasing FWSC, why are we having to take out a short- term loan to acquire their accounts receivables. Isn' t that part of the acquisition? Answer: The accounts receivables the business deal. were outside of To rephrase that, it was inside the business deal but outside the purchase price. Supervisor Wells stated if bottom- line this is part of the original agreement? Supervisor Arrington inquired as to why SunBank was chosen and had we shopped around for others? Toby Wagner said that he did a quick check just calling around went to Bank of America and Republic Bank and their rates were similar. Bank of America was a little bit higher. The only reason the Finance Team chose Sun Bank was because of the relationship is starting out with Sun and it was just a quick way of moving into the Sun. Supervisor Arrington stated that Florida local governments have the right to use Commercial Paper and authorities under local governments can use that also. The interest rate on that is cheaper, why did the Finance Team not look at that? Mr. Wagner said because you have more cost of issuance with the CP program. Their rate right now is about 1%. Is the issuance going to make that much difference? There are two issues that the Finance Team considered; 1. Mr. Wagner did not think that they would allow Toho to do a subordinate lien 2. They could not move as quickly 13th. as we need to by November We can certainly nn hark anri Innk nt thi-, if thin Rnarri want. the

4 from the City and someone from the County. After some months look at it to see how it is working. Right now separating City investments from the Toho investments. In a short time will be able to present to the Board exactly where we stand in our percentages of investment with the City. Supervisor Reich motioned for approval of Resolution as drafted but with the addition of a quarterly report to the Board. Supervisor Arrington seconded the motion. Motion passed 5 to 0 6: 36: 36 8C OLD BUSINESS TRANSFER, ASSIGNMENT AND ASSUMPTION AGREEMENT - Mark Lawson explained to the Board what Resolution was all about. When the City and the County respectively authorized an Interlocal agreement in May they adopted resolutions that directed their staff and employees and officials to do all things necessary to close on the Transition Interlocal Agreement. The Authority adopted a similar resolution in July. Things that would have happened in two to three years have happened in two to three months. The Public Service Commission yesterday approved that transfer is a matter of right. There was no question about Toho. There were questions about FGUA but Toho was treated just like a county or a city. When the assignment was authorized, the Florida Water lawyers, not understanding the distinction between Toho and FGUA and Golf Breeze, voiced their concern. The acquisition agreement for Florida Water, notwithstanding the fact the County could have signed it to Toho stated that if Toho failed to close that the County was still on the hook so we thought it would be wise to, and at the request of the County Attorney' s office, and the lawyers have no problem adding a provision to the Agreement that made it clear that Toho would indemnify and hold harmless the County if it failed to close. In the transition agreement there are no will indemnify or hold harmless agreements; that was just the structure so we thought it would be appropriate to bring that document back. This Transfer, Assignment and Assumption Agreement was brought back and explained to all three bodies. The County and City have already approved the Aareementt Asa footnote_ this Transfer_

5 Assignment and Assumption Agreement is one of three instruments that serve to bring over all of the stuff that you get when you acquire a utility. A deed that has a catch all provisions, and specific provisions, there is a bill of sale to capture the personal property and then there is a Transfer, Assignment and Assumption Agreement that says that if we forgot anything we' ll pool it all in. It also happens to have provisions about reconciliation of accounts post closing so that there will be no economic disadvantage breaking up investments but to make a long explanation short, the reason it is before the Board tonight is to simply address that one little aspect in the Florida Water acquisition agreement because otherwise the Board has already given your staff direction and authority to close the transaction. One other thing that was added which Jo Thacker talked about before the County Commission on Monday when they approved it is in Section 4. Post Closing Relationship; Final Accounting and Reconciliation, SubSection ( F). Because this part did not make it into the Agenda, Mr. Lawson proceeded to read it. The City and County have underwritten the costs of determining the feasibility, creation and establishment of the Authority and implementation of the Transition Interlocal Agreement through the Transfer Date pursuant to their December 2001 Interlocal Agreement (the " Feasibility Interlocal Agreement"). Provided that the City and County agree not to seek reimbursement under the Feasibility Interlocal Agreement of Section of the Transition Interlocal Agreement, the City and County acknowledge and agree to reconcile and share equally all costs reasonably expended in determining the feasibility, creation and establishment of the Authority and implementation of the Transition Interlocal Agreement through the Transfer Date without reimbursement therefore." Reason the agreement was brought before the Board was to address the added paragraph. In summary, if the city was not going to seek reimbursement than the County would not. Supervisor Wells moved for approval of the Transfer, Assignment and Assumption Agreement with the inrli minn of Paranranh 4F ac rtnnd intn tha

6 Finance Team to look at the CP Program more in depth. Experience with them has been that they take longer and are more expensive. We are talking a whole percentage point interest wise. had gone with bonds and just matured bonds for one year the interest rate would have been about If we 1 %. It' s lower interest wise on a bond issue than it is on a bank loan. The banks are the more expensive interest rate wise, cost wise they are a lot cheaper. That was the difference that we saw when we compared them. Supervisor Arrington would at least like for us to look to see if the cost of issuance is going to be the cheapest way to go. Local governments have a pool of funds that they borrow short term and it' s called Commercial Paper and it' s about the cheapest interest rate of any monies available to anyone. Commercial Paper loans are for quick fixes for short- term basis. You borrow from them short term. Toby Wagner says that there are two approaches that the Finance Team can take. They can defer it and come back at next meeting and even if Toho closes on the Florida Water Services Corporation water system and do this after the fact, that's fine. It is just cash coming out of Brian Wheeler' s pocket that he will be reimbursed for. Or the Board can approve the Resolution tonight subject to us looking into that CP Program or any other loan program to see if we can do anything cheaper and if so we will bring it back if not we can close on this loan and we can work either way. Supervisor Arrington made a motion to approve Resolution subject to it being modified by the attorney to include the language that Supervisor Arrington talked about. Supervisor Wells seconded the motion. Motion passed 5 to 0. I I power failure. At should be noted that at 6: we had a 6: 30:01 6: 30: 47 8B OLD BUSINESS TOHO WATER AUTHORITY INVESTMENT POLICY - It is the same as the City policy. Investment Committee would be members of the Toho Water Authority. It is important that the I I committee be diversified by brinaina someone in

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8 rates for Florida Water Services Corporation and Supervisor Reich seconded the motion. Motion passed 5 to 0. 7: 06: 21 9D PENSION ; PLAN 9D. PENSION PLAN RESOLUTION authorizes Tohopekaliga Water Authority employees to continue to be participants in the City' s pension plan. After a brief discussion, Supervisor Arrington moved for adoption of the Pension Plan with the caveat that we look at other pension plans for comparing purposes as government pension plans are not the best and we need to look at this long term. The motion was seconded by Supervisor Wells. Motion passed 5 to 0 9E. CARRY FORWARDS RESOLUTION j The financial analyst realized that he had left out some of the carry forwards and it is being provided 7: 09: 20 9E CARRY to you separately from the agenda packet. The FORWARDS carry forward figure was previously approved in the amended budget. Supervisor Wells moved for adoption of Resolution Supervisor Moody seconded the motion. Motion passed 5 to 0. 7: 09: STAFF REPORTS Toby Wagner, Southeastern Investments Securities, Inc. - As we are coming up on the closing, Mr. Toby Wagner gave a brief overview on the bond issue and Mark Lawson, Bryant, Miller and Olive, discussed the successful sale of bonds. It would have cost $ 1. 2 million more if we had priced the same day as Palm Coast. Marco Island ended up being a tat bit cheaper. Chairman Van Meter was very impressed with First Southwest and the way they kept us informed. Mark Lawson talked about the asset closing. Bryant Miller & Olive will be the Authority' s document escrow agents. ( Supervisor Reich left the meeting at this point).. E 7: 19: 20 Ex -officio member Owen left the meeting) 7: 30: 38 HEAR BOARD OFFICIALS Brian Wheeler discussed RESOLUTION NO which states that the Executive Director is hereby authorized to delegate to his subordinates such of his powers and functions as he may deem appropriate, provided that he may not delegate any function or anv nower to incur exnenses or liabilities

9 j 7: 35: 25 motion. After discussion, Supervisor Wells moved for adoption of Resolution and Supervisor Moody seconded the motion. Motion passed 4 to 0. RESOLUTION NO Adoption of policies and procedures of the City of Kissimmee. Brian Wheeler does not see any changes in the initial sense. Direction was sought from the Board as to bringing the issues relating to this resolution back to the Board piece meal rather than all at once. Supervisor Arrington commented that it looks like Mr. Wheeler' s staff is already working on making changes to the policies and procedures to reflect Toho and not City of Kissimmee. Supervisor Arrington moved to put Resolution on the agenda for discussion. Supervisor Wells seconded the motion. Supervisor moved for approval of Resolution and Supervisor Wells seconded the motion. Motion passed 4 to 0. Executive Director Wheeler informed the Board that he had given them a copy of the Preliminary Official 7: 41: 04 Statement and discussed the opening ceremony ; which is scheduled for next Friday, October 31Sat the North Bermuda water plant. Ex -officio member 7: 43: 47 Owen has already agreed to go. There being no further business to come before the Board, Chairman Van Metr adjourned the meeting at 7:44. 7: 44: 30 ADJOURNMENTC airman, Br Van Meter Secre, John E. Moody