2011-0809 City Commission Workshop

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Summary Minutes:City Commission Workshop August 9,2011 City of Sunny Isles Beach,Florida year need ahead of them, or three-year need, or five-years down the road doesn't mean conditional. Funding, we are trying to look at this in a more global light. We have had similar problems in other areas where we have very successful schools and people always seem to find a way to get in there,and she knows they have a problem with a couple of other cities, and a plan to try to attack all of these issues. Commissioner Scholl asked to talk School Board finances,and he heard the term the bonding capacity was maxed out, and so he asked for metrics now on your revenue versus your debt service versus if we get a credit enhancement,etc. How is it structured and how does it stack up against your existing capacity. Ms. Rijo-Conde said over the four years we have lost a considerable amount of revenue not just due to the decrease in qualified monies from the capital,but also as a result of the market, and Commissioner Scholl said right your shrinking assessment. She said most if not all of the revenues they receive presently goes toward either the payment of the debts that they issued or for maintenance expenses, and so there is basically nothing left to go out and issue additional debt. In fact this year we have made significant reduction to our work force to be able to balance the budget which was very painful because people are actually on the street but we took some significant drastic measures to be able to keep within that,that we have coming in. We do have a problem with short term, short to mid term, she thinks it is anywhere from seven to ten years before they can issue any additional debt. What they are trying to do is basically engage in a collaborative effort where if that particular local government has the ability to issue a debt, they would enter into an Interlocal Agreement with that City and the exact increments would have to be figured out but they could probably offer some security to secure the debt. They are dealing similarly with the City of Miami and Key Biscayne. What we are looking for is the debt issuance upfront and then a Interlocal Agreement that is binding with a promise to be paid from the School Board over a number of years and typically the debt would be issued for a 20-year term. This is a small amount in comparison. If their debt issuance capacity were to look significant more favorable in the next five years then they would have the option to pay this more quickly, which we did with the City of North Miami and they turned around two years later and paid it off and that was $124 Million worth of unsecured debt. The way they like to approach this is by you sharing in the cost of the program,the project. They spoke to their Treasurer and because of the amount,we think we will be able to start repaying once the debt is issued. And we had talked about a possible 50/50 collaborative effort. Vice Mayor Thaler said one of the questions that came up is when will you need the money to get this thing off the ground, and Ms. Rijo-Conde said we have tentatively included this project as funded assuming we can work out a collaboration. We would first need to do the design, etc. and have the funds available for FY 2011/2012, and then the balance available for the actual construction award because we can't award the project without having the dollars in place,which would be about$3.2 Million with the walkway connected,and so she would say probably if they had in the vicinity of$500,000 to $600,000 the first year, that would allow them to complete the design, engineering etc., with the money for the construction coming in the following year, and that could be worked into the Interlocal. Mayor Edelcup asked if we could create something like a line of credit that is collateralized by something, that would make some sense. In the financing structure because you can't issue"debt", there won't be a bond of evidences this loan,are you predicate in any way from 7