Fort Walton Beach Council minutes — 01-27-09 regular minutes — reading text

questioned the risks, or liability, to the City if the project is unable to be completed. The City Attorney agreed that a lot of time has been put into the Development Agreement and the enthusiasm for the project remains, but the developers are saying there is a change to the format of what was originally proposed. The City Attorney advised in her responses to the developer, she laid out very specific provisions from the Development Agreement, mainly that the developer would not permit or constitute a mortgage or lien upon any property or assets owned by the City. She explained the City has leased the City parking lot to the developer, so they have a lease on the property, and they are now basically mortgaging their rights under the Development Agreement which includes the lease. The City Attorney stated when she received this issue, it was a legal concern, but as was reported earlier, it is not just the construction of the garage, there are obligations after the construction that the developer is still liable for to the City, including the continuing maintenance outlined in the Development Agreement, as well as the condominium association setup, because there is a 5 -year timeframe where the City and developers will be working as partners. Mr. Nathan stated he anticipates closing with Georgian Bank, but he would rather have the document approved in the form presented in case there was a substitute lender. The City Attorney discussed the right of the lender upon default of the borrower, and that without waiving any other rights under applicable law, the Lender may perform any and all obligations of the Borrower, which means that the Georgian Bank has no obligation to step in to take over the obligations of the developer, so there is no way for the City to enforce the Development Agreement against a third party bank. The City Attorney stressed she is giving legal advice, but that it is Councils decision on how to handle it, and suggested that if Council is inclined to go forward, the Development Agreement needs to be reviewed. She advised the only other way to secure complete performance under the agreement, in her opinion, is to get an up -front performance bond directly from the principals, not the contractor. The Development Agreement required that from the developers, and it would be about $ 50, 000 to secure the performance bond for the $ 4, 250,000. 00.  115 Regular Council Meeting 1/ 27/ 09 COLLATERAL ASSIGNMENT (CONT) Mr. Houle reminded that there is approximately $ 300, 000 worth of value of their property they are deeding to the City for the parking garage. Mr. Nathan advised he is willing to review the Development Agreement with the City Attorney, and that they have spoken and that is probably the next best action; however, Mr. Nathan advised they are faced with time pressure on the collateral assignment because financing does not remain forever and if they cannot get it done immediately, it may dry up. The City Attorney stated, in her opinion, the liability is the possibilities of `what if,' whether or not the developer can come through. She advised Council could, perhaps, accept something less than a performance bond such as letters of guarantee from the principals and that under the Development Agreement that is required but it is not in writing. The City Attorney explained such action would place pressure on the developers to move forward and would give the City some level of security. Mr. Nathan stated they are asking to take them on their word and commitment in the Development Agreement, they do intend to follow through with their obligations and want to move forward with the project. The Mayor opened the public hearing. As there was none, the public hearing was closed. Mr. Minich moved to approve the Collateral Assignment of Development Agreement between the City of Fort Walton Beach and Ft. Walton Development Partners LLC to the Georgian Bank and authorize the Mayor and City Clerk to execute the document on behalf of the City upon sufficient proof from the developers of a performance and payment bond of no less than $ 4,250,000. Mr. Garvie seconded motion and it carried by a vote of 6 -1 with Holmes, Miller, Garvie, Pullen, Hartwell, Minich in favor and Reeves opposed. Mr. Minich moved to direct the City Attorney to work with Development Services Director and the developer to initiate review of the Development Agreement. Mr. Holmes seconded motion and it carried unanimously with Holmes, Miller, Reeves, Garvie, Pullen, Hartwell, and Minich in favor. CHANGE CAPITAL IMPROVEMENT PROGRAM TO INCLUDE WATER MAIN ON KEPNER DRIVE Consideration of a request for authorization to change the Capital Improvement Program to include the replacement of 1, 650 linear feet of 2- 1/ 4" galvanized iron water main on Kepner Drive between Okaloosa Road NE and Choctawhatchee Road NE in the not to exceed amount of $ 35, 000 using 2005 Utility Bond funds that were originally earmarked for water main replacement projects. John Hofstad, Utilities Director, informed that the City is receiving complaints weekly of " dirty water' in the area north of Hollywood and east of Ferry Road due to the aging water mains in that area. The project will allow the City to replace 1600 feet of line with 6" PVC and will eliminate the adverse condition in the area. The Mayor asked for public input. There was none. 116 Regular Council Meeting 1/ 27/ 09 CHANGE IN CIP TO INCLUDE KEPNER DRIVE Mr. Minich moved to authorize a change to the Capital Improvement Program to include the replacement of 1, 650 linear feet of 2 -1/ 4" galvanized iron water main on Kepner Drive between Okaloosa Road NE and Choctawhatchee Road NE in the not to exceed amount of $ 35,000 using 2005 Utility Bond funds that were originally earmarked for water main replacement projects. Mr. Garvie seconded motion and it carried unanimously with Holmes, Miller, Reeves, Garvie, Pullen, Hartwell, and Minich in favor. Mr. Garvie suggested that if there are other areas of the City that have this problem, to have replacement of the lines considered as part of the budget process. REVIEW OF CODE ENFORCEMENT PROCESS Review of code enforcement, lien and foreclosure process. The City Attorney gave a power point presentation on the Code Enforcement process which included discussion of Code powers, board functions and orders, and reductions /liens. Paul Horn, Chairman of the Code Enforcement Board, commented that the Board sees a lot of different cases, and that the Board does not automatically go with what the State Statute says. Mr. Horn continued that the Board tries to make changes beneficial depending on the circumstances and they work with the citizens. He advised the Board does not see the legal aspect of the various cases, and suggested it may be of interest to the Board if they could see the amount of fines collected so they could see the results of their actions. The Finance Director advised the total revenue from code enforcement last year was $ 72, 825, and that was due to a large revenue in the amount of $ 57, 000. She continued FY 07 was 36, 000, and FY 06 was $ 28, 000. Council suggested a mechanism to recover costs from the lien process be addressed, and noted this is one of the most difficult City boards to be on as they judge their fellow citizens. The Mayor asked for public input. Ray Seip, 121 Nebraska Avenue, stated he has issues with the $ 250.00 a day fines imposed by the Code Enforcement Board, and that the code enforcement fines in Nashville are $ 10. 00 a day, and that Council should look at the process. He also discussed the mailings of Notice of Violations and that individuals may not have received the notices, and questioned what type of mailings are used by code enforcement. Mr. Horn clarified some of the comments made by Mr. Seip, including the $ 250. 00 comes with an Order II, which means individuals did not comply with Order I and were given 60 or 90 days to comply; and that notices are sent out Certified Mail, return receipt requested, which means it must be signed for, and if it has not been signed and returned to the City, the case is not heard. Mr. Horn noted some of the fines are quite large, but noted some of the cases are dangerous to the public safety, such as exposed electrical lines or mosquito- infested swimming pools. David deVaux, 348 Marie Circle, asked that Council review the complete code enforcement issue, and stated he has sat through many cases, which he was not involved in, and that the Board issued citations to citizens that never should have been cited.  117 Regular Council Meeting 1/ 27/ 09 CODE ENFORCEMENT PROCESS ( CONT) Mr. deVaux noted the lack of legal representation for the citizens, and that both the City and the Board have attorneys. Mr. deVaux also stated that the code hearing is not a public hearing, as the lawyers restrict the public from speaking and only the cited person is allowed to speak, so if a neighbor attends and wants to speak they are not allowed. The City Attorney strongly disagreed with Mr. deVauxs' comments, informing that every effort is taken to ensure everyone present has the opportunity to testify, that she can remember several times when the public has shown up and they were able to testify, and noted the Chairman bends over backwards to ensure everyone is given the opportunity to speak. The City Attorney stated she cannot speak as to what occurred when the previous City Attorney was involved. Mr. Horn stated he does not know what Board Mr. deVaux is referring to, as he has been a member of the Board for over four years. He reiterated there is a time for public remarks, if you are sworn in you are able to speak. Mr. Horn noted a case that was controversial and the Council Chambers was full and the Board found for the individual and against the Staff, and that the Board looks at everything when making a decision. OTHER CITY BUSINESS FOR DISCUSSION PURPOSES Mr. Hartwell expressed disappointment in the process that previously occurred with The Advocacy Group where they filter through all the house bills and those they feel might be applicable to the city are forwarded to the City Manager and the Mayor; those are evaluated and the advocacy group are given direction from the City Manager and the Mayor as to which ones to lobby, with no input or direction from Council. He expressed the desire that Council take a second look at the $ 40,000 the City is spending for the lobbyists when there are other avenues to get the City's desires known. Mr. Minich requested the information received from The Advocacy Group be distributed to Council; and that an action report is provided to Council from anyone who lobbies on behalf of the City. The Mayor explained the first task of The Advocacy Group is to keep the City appraised of legislation that may impact the City and their second task is to look for