Fort Walton Beach Council agenda — 01-16-2010 Special-Annexation, Bonds — reading text

AGENDA CITY OF FORT WALTON BEACH SPECIAL MEETING Two Trees Restaurant, FWB Golf Club January 16, 2010 9: 00am 8: 30am Coffee and Danish will be available 9: 00am CALL TO ORDER 1. ACTION - DISCUSSION 1. 1 City Council Retreat 1. 1. 1 Annexation 1. 1. 2 Bonds 1. 1. 3 Council Items for Discussion ADJOURNMENT Any person who decides to appeal any decision made with respect to any matter at this meeting will need a record of the proceedings, and for such purpose may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. ( Chapter 286.0105 F.S.) The City of Fort Walton Beach adheres to the American with Disabilities Act and will make reasonable modifications for access to this meeting upon request. Please call City Clerk Helen Spencer at 850 -833- 9509 to make a request. For Hearing Impaired dial the City Hall TDD # 850- 833 -9925 or 1- 800 -955- 8771 ( TDD) or 1- 800 -955 -8770 ( Voice). Requests must be received at least 48 hours in advance of the meeting in order to allow the City time to provide requested service. City Council Special Meeting December 8, 2009  CITY OF FORT WALTON BEACH, FLORIDA MEMORANDUM Office of the City Manager DATE: January 7, 2010 TO: Honorable Mayor and Council Members FROM: Robert T. Mearns, City Manage SUBJECT: City Council Retreat 1. I believe that the City Council needs to develop several narrowly defined and attainable goals for this upcoming year that have a measurable outcome; and discuss strategies to attain these goals. 1. 1 Two issues that I have for discussion and direction are: 1. 1. 1 Annexation — Conducting an annexation campaign designed to bring additional lands into the city to increase revenues and even the city' s boundaries. This will require a broad look at a number of adjustments to the city' s operating policies and procedures 1. 1. 1. 1 There are at least eight lots in the Kenwood area that are totally surrounded by the city, yet remain unincorporated. There are also local residential streets totally within the city that are still identified as county streets. 1. 1. 1. 2 There is a state statute that allows the city to annex areas identified a " enclaves" by interlocal agreement with the county. An enclave is defined by statute as "( a) any unincorporated improved or developed area that is enclosed within and bounded on all sides by a single municipality; or (b) Any unincorporated improved or developed area that is enclosed within and bounded by a single municipality and a natural or manmade obstacle that allows the passage of vehicular traffic to that unincorporated area only through the municipality. " 1. 1. 1. 3 I have discussed the option of enclave annexations with Jim Curry, County Administrator, and he stated that the County Commission would certainly consider an interlocal agreement effecting such an annexation. 1. 1. 1. 4 There are other areas near the city that appear to be candidates for annexation. However, annexations of this type require a referendum by both the voters of the area to be annexed and city voters, and an annexation referendum is always predicated on the added cost to the property owner. Therefore, a campaign must be put together stressing the value added and services provided. This is a core reason that the cost of services and /or programs for non -city residents must necessarily be higher as city taxpayers help underwrite the cost of such services and have hence paid their fair share while non -residents have not. , Identifying  potential annexation areas and producing and conducting a campaign require the time of several individuals. And, there is no guarantee it will be successful. Therefore, before staff undertakes an annexation campaign, the City Council must determine that is in the city' s best interest to do so. 1. 1. 2 Bonds — As much of the city' s infrastructure ages, it is becoming increasingly costly to maintain some facilities and in some instances they are potentially unusable. The current, and future, budget( s) will not provide sufficient revenues to continue the current " pay as you go" capital replacement and renewal policy, resulting in the failure of city facilities and programs. Unless these issues are addressed, the city will be forced to close facilities and end programs. On one hand this will reduce the ad valorem rate, but on the other will affect service delivery and those quality of life concerns espoused by every Council member. A means to raise funds to address this is a bond issue to replace elements of the city' s aging infrastructure. 1. 1. 2. 1 There are basically two types of issues; general obligation and revenue bonds. 1. 1. 2. 1. 1 A general obligation bond is one in which projects are identified, estimates of cost established and the matter is placed before the voters in a referendum. In essence, the electors vote to tax themselves for a certain number of years for debt service payments in order to have the projects promised. In this manner, the people who use the facilities over the years are the ones paying for them rather than a " pay as you go" system where the people who arrive later do not have to pay but enjoy the use of the infrastructure or facility. 1. 1. 2. 1. 2 A revenue bond is one in which a revenue stream such as the % 2 cent sales tax, business receipt taxes, or utility revenue stream is pledged as debt service. This type of bond does not require voter approval and may be used so long as a revenue stream exists and is strong enough to support the debt service. 1. 1. 2. 2 Build America Bonds ( BAB) are part of the American Recovery and Reinvestment Act of 2009. These type bonds are attractive to bond buyers and municipalities as the federal government will guarantee to pay 35% of the interest on these debt issues, making repayment less stressful on a budget thus easing the debt load on the local government. BAB' s do not replace general obligation or revenue bonds they merely are used as the actual financial mechanism for the transaction. 1. 1. 2. 3 Prior to staff undertaking an analysis of long term capital facility and non -utility infrastructure requirements as well as analyzing financing options with the intention of bonding for the improvements, the City Council must determine that it is in the city' s best interest to do so as considerable staff time will be required.