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2019.02.06_FAB_Minutes_Regulara. ` TOWN OF HIGHLAND BEACH FINANCIAL ADVISORY BOARD REGULAR MEETING MINUTES Town Hall / Commission Chambers Date: February 6, 2019 3614 South Ocean Boulevard Time: 1:00 PM Highland Beach, Florida 1. CALL TO ORDER: Chairperson Greg Babij called the Financial Advisory Board Regular Meeting to order at approximately 1:00 PM. Roll call was taken followed by the Pledge of Allegiance. PRESENT: Member Alan Polin Member Edward Kornfeld Member James Karabec Member Neil Eisenband (Arrived at 1:02 PM.) Vice Chairperson David Stern Chairperson Greg Babij Town Attorney Pamala Ryan Finance Director Matthew Lalla (Arrived at 1:04 PM) ABSENT: Member Jeff Hollander 2. ADDITIONS, DELETIONS OR ACCEPTANCE OF AGENDA: Chairperson Babij asked if there were any additions, deletions or modifications to the Agenda. Hearing none, the agenda was accepted as presented. MOTION: Vice Chair[person Stern moved to accept the agenda as amended. Member Polin seconded the motion, which passed unanimously. 3. PUBLIC COMMENTS AND REQUESTS: Chairperson Babij stated Public Comments would be limited to three minutes due to time constraints. Financial Advisory Board Regular Minutes Wednesday, February 6, 2019 Pale 2 of 7 Rick Greenwald provided comments regarding educating the residents in understanding the referendum. He asked that the recommendations from the Financial Advisory Board be given to the Commission in ample time as well as the residents. 4. APPROVAL OF MINUTES: None. 6. OLD BUSINESS: There was no Old Business. 7. NEW BUSINESS: A. Discussion on the Summary Comments and Recommendations from the Financial Advisory Board Meeting of January 24, 2019 provided by Chairperson Babij. Chairperson Babij provided comments regarding the February 5, 2019 Commission Meeting and addressed a presentation made by Commissioner Gossett -Seidman at that meeting regarding the many inaccuracies that were presented to the residents. In her comments, she mentioned that the Town of Highland Beach has been granted a one-year extension so there is no longer a rush to make a decision. The Commission voted 3 to 2 in favor of not taking advantage of the time extension and moving forward with the $45 million referendum. Chairperson Babij explained that not all the members of the Financial Advisory Board were involved in the financial aspect of this project. He addressed Commissioner Donaldson's letter to the Financial Advisory Board regarding the costs being justified and the PRAG letter regarding their fiduciary duties. Chairperson Babij explained that in terms of financing, there are other possible sources for this project. It does not have to be a bond issue. It could be bank loans. Discussion ensued regarding Commissioner Donaldson's letter that he submitted to the Financial Advisory Board. MOTION: Chairperson Babij moved to create a series of recommendations for the Commission and also attach the summary he provided from the last meeting. The motion was seconded by Member Polin. UPON ROLL CALL: Chairperson Babij - Yes Member Polin - Yes Member Karabec - Yes Member Eisenband - Yes Financial Advisory Board Regular Minutes Wednesday, February 6, 2019 Paj4e 3 of 7 Member Komfeld - Yes Vice Chairperson Stern - Yes Motion passed on a 6 to 0 vote. Chairperson Babij handed out information to each board member. The handouts were titled as follows: Item 1 — Comments on Commissioner Barry Donaldson's Letter to the FAB: 2/6/2019 Item 2 — FAB Statements to Vote on Item 3 — Comments to the Commission Member Polin provided comments regarding Chairperson Babij's recommendations and requested the following motions: MOTION: Chairperson Babij moved to have a final recommendation beyond these example recommendations that we recommend to move forward with the $45 million financing referendum or not. The motion was seconded by Member Polin. UPON ROLL CALL: Chairperson Babij - Yes Member Polin - Yes Member Karabec - Yes Member Eisenband - Yes Member Kornfeld - Yes Vice Chairperson Stern - Yes Motion passed on a 6 to U vote. Discussion ensued regarding the wording of this motion. Town Attorney Ryan suggested the board make a decision of exactly what they want to say. She mentioned that they take the time to go through each one of these recommendations. If you want to add something you can. Either you agree with Chairperson Babij's recommendations or you don't. You need to debate it to see if it is a good idea and that would be the vote. Regarding the second motion, the Town would have no problem putting it on the website as your memo to the Commission on this issue, and it would go to the Commission as a recommendation as well. MOTION: Member Polin moved to determine if we are able to somehow publicly disseminate this information. The motion was seconded by Chairperson Babij. Chairperson Babij asked if there was any discussion regarding his summary which was attached to the agenda as Item 7A. Financial Advisory Board Regular Minutes Wednesday, February 6, 2019 Pane 4 of 7 Member Polin suggested the quote taken out of the PRAG opinion letter dated January 22nd to the Commission be added under the heading "Comments to the PRAG Letter" as follows: "The Moody score card is not a final rating calculator". Chairperson Babij was not in agreement that this be included in his summary since it was a summary of the last meeting. He was in agreement that it be one of the recommendations that should be sent to the Commission. MOTION: Chairperson Babij moved that the Financial Advisory Board create a series of recommendations for the Commission and also attach the summary he provided from the last meeting. The motion was seconded by Member Polin. UPON ROLL CALL: Chairperson Babij - Yes Member Polin - Yes Member Karabec - Yes Member Eisenband - Yes Member Kornfeld - Yes Vice Chairperson Stern - Yes Motion passed on a 6 to 0 vote. The Board Members discussed Item 2 — Page 1 — FAB Statements to Vote on. All the members were in agreement with Paragraphs 1, 3, 4 and 5 except Member Eisenband who was not in agreement with Paragraph 2. The board members continued their discussion on Item 2, Page 2, Paragraph 1. Paragraph. 1, Page 2. — MOTION: Member Eisenband moved to read instead of a "decline" in property values, a "change" in property values. Member Polin seconded the motion. UPON ROLL CALL: Member Eisenband - Yes Member Polin - Yes Member Karabec - Yes Member Kornfeld - Yes Vice Chairperson - Yes Chairperson Babij - Yes Motion passed on a 6 to 0 vote. All board members agreed on paragraph 2. Discussion continued on Pace 2. Financial Advisory Board Regular Minutes Wednesday, February 6, 2019 Pane 5 of 7 Paragraphs 3 and 4, Page 2. — MOTION: Member Eisenband moved to reverse the order of 92 and #3. Member Polin seconded the motion. Member Karabec was not in favor of reversing the order. Member Eisenband was not in favor of Paragraph 5. Paragraph 6, Page 1. — MOTION: Member Eisenband moved to change "moderate multiple of revenues" to "percentage of the value of the property". The motion failed for lack of a second. Chairperson Babij called for a proposed final summary recommendation. Discussed ensued regarding the board's recommendations. Member Polin explained that the residents need to see something very clear in how the Financial Advisory Board viewed this issue as being financial wrong. MOTION: Member Karabec moved that the Financial Advisory Board recommends not to support the $45 million borrowing referendum based on all of the available materials received. Member Polin seconded the motion, which passed unanimously. Finance Director Matthew Lalla referred to Item 7A which was attached to the agenda as follows: • Under the section entitled "Big Picture"— Water and Sewer Revenues, he explained that the rate structure was never intended to cover debt service. It is covered through a transfer of ad valorem revenues. • Section regarding millage rate comparison. • Comparing revenues and expanding debt of surrounding towns. • Section regarding financial proposal. • Additional administrative fees by Florida Municipal Loan Council which pays for the hiring of the professionals for the bond financing team. Member Polin asked for clarification regarding administrative fees. He questioned the amount of money that would be paid. Finance Director Lalla explained that it is part of the issuance cost of the debt. It is a cost that is going to be incurred regardless of the method or the financing team used. You need to pay bond council since you cannot issue debt without using bond council. Discussion ensued regarding bond financing versus bank loan and PRAG's opinion letter. Member Kornfeld addressed the water and sewer revenues rate structure not covering debt service. He suggested it does when they do the next study. The cost of water and sewer should be increased and it should have been done years ago. This is a small Town and was not in favor of putting $45 million of debt on the Town's balance sheet. Financial Advisory Board Regular Minutes Wednesday, February 6, 2019 Pace 6 of 7 Finance Director Lalla explained that in terms of the Town" s balance sheet, there is not a significant impact. You are adding $45 million of debt and you are adding $45 million of capital projects. Those two offset each other. The debt service is paid for by the ad valorem taxes approved by the voters. Member Kornfeld questioned how many projects would last the 30 years and have to be replaced. Finance Director Lalla provided comments regarding the average useful life of the projects. He explained that a bond council would not provide an opinion that would support this issuance if the bonds do not qualify under federal tax law. Federal tax law has a schedule and they provide a useful life to the type of project being financed. 8. REPORTS — BOARD MEMBERS A) Member Eisenband provided comments regarding increasing the taxes and the value of the investment in this project B) Member Karabec had no report. C) Member Polin had no report. D) Member Kornfeld had no report. E) Vice Chairperson Stern commented on the fact that the real issue may not be increasing taxes for value. The real issues may be the background, what we are going to get for the value, what Town is going to get in the justifications. A delay in order to obtain more facts, would be a more important way to address the issue. F) Chair?erson Babij commented that it is not about spending the money but doing it appropriately. He concurred with Vice Chairperson Stern. Chairperson Babij explained that Item 3 is for the board's reading. Town Clerk Gaskins read Member Hollander's email into the record that provided comments for the committee's consideration. 9. ANNOUNCEMENTS Town Clerk Lanelda Gaskins made the following announcements: • Natural Resource Preservation Advisory Board Meeting — February 21, 2019 — 9:30 AM • Town Commission Workshop Meeting — February 26, 2019 — 1:30 PM. • Town Hall would be closed: February 18, 2019 in observance of President's Day. Financial Advisory Board Regular Minutes Wednesday, February 6, 2019 Page 7 of 7 • Monday, February 11, 2019 —Candidate's Forum presented by the Women League of Voters of Palm Beach County to be held in the Library from 6:00 to 8:00 PM. 10. ADJOURNMENT There being no further business to come before the Board, Chairperson Babb called for a motion to adjourn. MOTION: Vice Chairperson Stern moved to adjourn the meeting at 3:07 PM. The motion was seconded by Member Kornfeld, which passed unanimously. Alan Polin, Chairperson Transcribed by: Rosalie DeMartino everly, A. Wrighf Dat Deputy Town Clerk