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BCC Minutes 01/08/1987 S ~ .- Naple~, Florida, January 8, 1987 LET IT BE REMEMBERED, that in acc~"~ance with action taken on January 6, 1987, the Board of County Commissioners in and for the County of Collier, and also acting as the Board of Zoning Appeals and as the governing board(s) of such special districts as have been created according to law and having conducted business herein, met on this date at 2:03 P.M. in SPECIAL SESSION in Building "F" of the Courthouse Complex, EdSt Naples, Florida, with the following members present: ÇHAIRMAN: Max A. Hasse, Jr. VICE-CHAIRMAN: Arnold Lee Glass .r John A. Pis tor Burt L. Saunders Anne Goodnight ALSO PRESENT: James C. Giles, Clerk; Virginia Magri, Deputy Clerk; Donald B. Lusk, County Manager; Neil Dorrill, Assistant County Manager; Ken Cuyler, County Attorney; George Archibald, Public Works Administrator; Bob Fahey, Solid Waste Director; Nancy Israelson, Administrative Assistant to the Board; and Deputy Chief Ray Barnett, Sheriff's Department. \GENDA 1. Disucssion and consideration of proposed changes to Chapter 78-489, Laws of Florida, a Special Act validating the Collier County Water-Sewer District, by expanding the boundaries and strengthening the powers and functions of said District. 2. Discussion and consideration of various documents and pro- cedural options relating to Resource Recovery. ~oox 100 r~<;( 518 "..", ." ,,,--_._- - Page 1 ~QOI: 100 nr,r 519 January 8, 1987 PROPOSED CHANGES TO SPECIAL ACT HE EXPANDING BOUNDARIES OF COLLIER COUNTY WATER-SEWER DISTRICT - ~9NTINUED TO 1/13/87 As request~d by County At,~~ney Cuyler, Commissioner Glass moved, seconded by Commissioner Saunders and! '.rried unanimously, that a discussion regarding proposed changes to the Special Act regarding expansion of the boundaries of the Collier County Water-Sewer District be continued to 1/13/87. RESOLUTION 87-9 HE EXTENSION OF RESOURCE RECOVERY BONDS FOR ONE YEAR _ ADOPTED. STAFF TO CONTINUE NEGOTIATIOUS WITH WESTINGHOUSE Prior to the discussion, Commissioner Saunders explained that regarding resource re~overy, he has a conflict of interest under the new statute. He said that in the event that there is ~ny vote taken that could affect the progress of the project, he will abstain. Commissioner Saunders said that he has spoken with the County Attorney and it is his understanding that he can participate in the discussion .... but he is not permitted to vote, He said that the reason for the conflict is that he is employed by A. G. Edwards and they have a small part in the bonding of the project. He said they have a contingent fee if the project proceeds and he is employed by the firm that does have a financial interest in the outcome of the project. Mr. Jerry Aron, rep~esentative of the County with respect to resource recovery matters, said that the initial purpose of the meeting today is to consider extension of existing bonds which Mr. Tom Giblin, Bond Counsel, will talk ".bout, noting that the bonds terminate the end of this month unless notice is sent out by January 15th that Page 2 .. - - ,.~"",""";;.,.,,."--'","---'''' ....... .. ,- - January 8, 1987 would extend the bonds. He 8~id that Collier County, Resource Recovery of Collier County, S',,'1 Bank and Westinghouse need to execute documentation as early as possible. H~ said that there is a January 31st date by which the County and Westin~house/Shawmut have a right to terminate the ~ervice agreement but lead time necessitates meeting earlier. Mr. Aron said that under the agreement and in light of the circumstances that have occurred they have been talking with respect to the existing service agreement and within the last 24 hours Westinghouse and Shawmut Engi~eering have come with a proposal and he recommends that it be approved at today's meeting. Continuing, Mr. Aron explained the proposal as; , ,. (1) Extend the bonds for 1 year. (2) Extend service agreement which is terminable on January 31st for 60 days from January 31st in order to come to final resolution with Westinghouse and Shawmut on terms that are agreeable to both. (3) In event such agreement cannot be reached between Westinghouse/Shawmut and the County, either party has the right to terminate the service agreement at that time. Continuing, Mr. Aron said that in the event that agreement is not reached on or before t~at date Westinghouse/Shawmut and Resource Recovery of Collier will execute in favor of Collier County a general release of all liabilities that the County may have to Westinghouse/ Shawmut or Resource Recovery. Also, the County would execute a simi- lar release to Shawmut and Westinghouse for any liability to the underlying service agreement. In additio~, he said that the County would receive an assignment of the eXisting service agreement from tOOl: 100 P~<;t 520 Page 3 'QQ~ 100 w·~ 52.1 January 8, 1987 Westinghouse and Shawm'¡'. as well as a transfer of all of the stock of Resource Recovery of coll;~t, ¡~c., which would mean that at the end of the 60 days the County ~oul¿ own Resource Recovery of Collier, Inc. Also, he said that if an agree,~,nt was not reached to the satisfaction of both parties, there would b~ ~n assignment of any permits or similar documents that Westin~house or Shawmut 'r Resource Recovery now has, if they are not proprietary in nature, t~ Collier County. He said that if they are not able to agree with Westinghouse as to terms of services within the 60 day period, the County would issue a jOint press release with Westinghouse and Shawmut indicating that the pro- ject is not moving forward as a result of financial changes and cir- cumstance. He said that th~ proposal is with the understanding that Collier County and Westinghouse will, over the next 14 days, work to reach an extension agreement. ... . Mr. Aron said that a major benefit of the proposal would be to get releases from Westinghouse and Shawmut Engineering. He said that in the event both parties have proceeded in good faith, Westinghouse may be entitled to reimbursement up to $500,000 for out-of-pocket engineering and architectural fees. He said that he disputes their claim that that may b~ due, but it is a potential problem and by getting the release under the new proposal they would eliminate any exposure to that condition. Also, he said the County has flexibility. If no agreement is reached, they can terminate or pursue Possible options under the existing service agreement and, at the enG of the 60 Page 4 - - - ,."......."''','.-...".,,-''''...-.---,-""'',''''''''..."'"... .~.._--_... --',.- ·~_·~._.w..._,.__.____..._. .. - - January 8, 1987 day period the County can ~lso t~~minate the agreement and walk away from the deal with Westinghou~~ with full releases in hand and not worry about any liabilities re?a~ding the service agreement. He encouraged the Commission to extend the bond for one year and to take no further official action regarding th& Jervice agreement at this point in time, which would be deemed by them to be the Board's authorization to proceed along the proposal that has been outlined. County Attorney Cuyler said that they would meet with various representatives over the next several weeks and if they cannot nego- tiate an extension agreemen~ the Board has the same options. Commissioner ~~sse questioned the liabilities and Mr. Aron explained that a condition of the proposal is that both sides would be released. Mr. Cuyler said that the proposal would be returned to the Board to review and that there will be a mutual termination agreemen t. Commissioner Hasse said that he can see some benefit to the County and questioned the benefit to Westinghouse? Mr. Aron said that their benefit is to terminate the existing agreement without going through the 60 day extension; the benefits to the County are much greater. Mr. Cuyler said that Shawmut/Westinghouse have certain financial conditions that they want to present to the County and there is not enough time between now and January 31st t:.o do that. Mr. Aron said that they propose to work on a complete package over the next 60 days and come bê'~k to the Board for them to make a ~oox 100 p~<;r 522 Page 5 ,··"'-''''''''''·"·,_""'_'".,._"'_.....'_H'"''__......,.*,;.,,'~''"',.,"'_,ù''''..''''''''"'"'.,'".."........_ ....-""'- ." aOOK 100 r~'~1 523' January 8, 1987 decision. Responding to commissionel ~lass, Mr. Aron said that if the County should go along with tlo~ yroposal and at the end of the period opts to give them a release, it is a m~~ual release. Commissioner Goodnight questioned th_ term of the bond extension and Mr. Aron sdid he has heard it is 12 months with an option to con- vert at 6 months, pointing out that the bonds are not related to a vendor at this time. Commissioner Hasse questioned the cost to the County, assuming that the bond extension is for one year. Mr. Tom Giblin, Bond Counsel for the County, said that in 1985 Collier cou~ty issued $88,000,000 in bonds and they were structured by conditions that had to be met by Westinghouse/Shawmut and the County. He said the money .. . is sitting in escrow and up to now they have had tNO initial payment dates pa$s. He said that if conditions are not met by January 15th of this month, basically the deal will fall through and the bonds will be paid off. He said that they have to inform Sun Bank that they have to extend out or all conditions have been met. Mr. Giblin presented a proposed resolution extending the life of the bonds for one year, incorporating two more initial payment dates, August 1, 1987 and February 1, 1988. If conditions are not met by February, 1988, Mr. Giblin said, the bonds would be called and the deal would fall apart. Commissioner Glass asked what happens regarding management fees if the Board extends the bonds? Mr. Giblin replied that they agreed that Page 6 - - - .' '-'~'"'-""-"'---~-""" - ,- - January 8,1987 they would not b~ paid unl t$S the deal goes through and if it is suc- cessfully concluded they w'~uld ~Xp~ct to be paid. Commissioner Glass asked if they are locked intc ~he management fee of $4.00/thousand and Mr. Giblin said that they are ~~~, Mr. Bruce PUlver, PaineWebber, said the underwriter's fee was negotiated with the financial advisor a~ ~he time of the initial tran- saction. He said that the out-of-pocket fees that the County would be obligated for does not affect the underwriter's fee and the fees would not increase due to the extension. He predicted that the fees would be no higher than $15,000 for the year. Commissioner Glass asked Mr. Pulver if the $4.00 fee is nego- tiable. Mr. Pulv~~.sajd that they'are set on that fee. He said that they negotiated the fee with the financial advišor and they liere com- mitted to the project and involved over a long period of time with respect to the project. Commission~r Saunders said that it is not fair to compare the fee for a water/sewer issue with that of a resource recovery issue because it is much more complex and $4-6 is not excessive. Mr. Pulver said that the fee was compared to other resource recovery projects and is comparable, if not low~r, than other projects in Florida. County Manager Lusk pointed out that PaineWebber was part of the negotiating team and in put in a lot of hours. Prior to public comments Commissioner Hasse advised the pUblic that the meeting today is not for the purpose of discussing environ- &GOK 100 n(.[ 524 Page 7 " "---..............,q;,'''''''''''',.-''''..,......-..--".."'"''.>,.."." . mx 100 rÂr.\ 525 January 8, 1987 mental aspects of a resource r·:~very plant, it is to discuss the contract and extension of bonds. Mrs. Edith Williams said that she (. ~s not like to see the County sign anything and she understands that up to now the County is not committed. Commissioner Glass' advised that the County has a firm contract in existence and a bond issue in existence and the discussion is whether or not to extend them. County Attorney Cuyler said that there are valid legal reasons why the County is not permitted to go back and revisit environmental con- siderations and the contract does not permit that at this time. Mr. Jim Melchore, Golden Gate resident, said that he hears a sense of urgency to avoid potential liability of $500,000 for services and the project is yet to be proven to be economically feasible. He asked that the Board take no action to extend the bond issue. Commissioner .> ' Hasse said that they may be avoiding the possibility of a suit in the future and that has to be looked at; also, related to that is possibly a lot more expense than lvgal fees. Commissioner Glass said that they have a committee of very good CPA's and they are trying to come up with a good economic answer. He said that the original contract is economically feasible and they have to have a bond issue in place to be able to make that decision. Mr. Chester Dobeck said that if the County has a contract his feeling is to live with the contract the way it is and if Westinghouse cannot live with it, then both parties should be excused from it. Page 8 - - - --_. .,.._-_.~_. ..'~._'--.'- - .- - January 8, 1987 Mr. John Keschl said it is ~is understanding that there is not a binding contract with Westingõouse because the Board of Directors of Westinghouse did not pa~tic1pate. Mr. Cuyler said that is not the case, there is a valid, binding contra~ with Westinghouse. Certain provisions in the agreement may take Director's approval but the agreement is a valid contract. There was no one present from Westinghouse to address Mr. Keschl. For the record, Mr. Cuyler said that he has no problem that there is an existing, valid contract. Mr. Keschl requested that when the ffiatter is all settled, the taxpayers be given facts and figures as to the cost. Mr. Walt Coul~~n, member of Residents Opposed to Incinceration, pointed out that a survey was taken by the Golden Gate Eagle and 94% respcnded that they did not want a trash burning plant in their area. He said the Board should live by the current contract and if it is not feasible, get out of the contract and not build the plant. Mr. Irving Berzon said that one argument for extending the contract today is to allow the County to use the funds even if the deal with Westinghouse/Shawmut falls through. On the assumption that it does tall through and another entity takes over the concept or plan and comes up with something costing lower, he asked how that will af:ect the cost of financing if the County has an $88,000,000 bond issue now and have need for only half of that? Mr. Giblin replied that in the case of underwriting fees, they are on a per bond, so if the size of the issue goes down, they would look for further compen- ~co~ 100 r~<;! 526 Page 9 ""'''"''''''"__'C''''''""__","""""""'''''__'"""",,,.,,,,,,",,·,.,,",," &COX 100 FF.¡ 527 January B, 1987 sation. Mr. Giblin said that the underwriter fee is based on dif- ferent things that they do; negotiate the deal, sell the bonds, remarket the bonds. and finally once t:. 1 come out of escrow they must be remarketed. Mr. Pulver said that there is a management fee which really has to do with the amount of time spent on the project and the big part of the underwriter's fee has to do with the selling com- mission and is on a per bond basis and the per bond amount stays the same. Mr. David Graham, President of the Golden Gate Civic Association, asked if hp. is right in assuming that the agreement is not in writing at this time? Mr. Aron said that the extension agreement is not in writing and they are not asking the Board to vote on an unwritten agreement. Commissioner Glass advised that all the Board is voting on today is the bond extension. Mr. Graham said that their group will ..' support any issue that will remove the proposed plant from Golden Gate, even if it costs money. Mrs. Charlotte We.Jtman, representing the League of Women Voters of Collier County, said that the Board is familiar with the League'e position on the proposed project. She said that the League would sup- port the extension of the bonds for a number of reasons. She said that it appears that the proposal made by Westinghouse was made in good faith and she would hope that the entire Commission would approach the whole aspect of the negotiating p~riod on a good faith basis with an open mind. Page 10 .. - - - - - January 8, 1987 Dr. Armand Oppenheimer, ~~presenting the Collier County Audubon Society, said that they have u',?~imously voted to reject the proposi- tion, which was taken largely on environmental ground. He said that it has not been wasted ~oney, it was good education, and eventually the Board will find a plan to deal witÞ ~aste management. Mr. George Keller, President of the Collier County Civic Federation, askÐd if the bond issue is extended, are they forfeiting part of the contract? He said that it has been mentioned that if the bond issue is not extended the County will lose all of the tax bene- fits. Mr. Keller said that is not correct, under the present tax sta- tute, if the County built and operated the plant and used the electricity in its"own facilities ·it would still come under the same tax structure. Mr. keller said that if the County accepts the assign- ment and decides not to take the project on, funds will be needed to dissolve the corporation. Assistant County Manager Dorrill said that the County could sell revenue bonds, but the County decided very early that they did not want to own a power plant and that is the rationale behind the deve- lopment bonds. Mr. Bob Krasowski, representing the Collier County Democrats Environmental Committee, said that there has been no time for the residents to digest the new proposal and it should not be acted upon without the benefit of a vote from the residents of the County. Mr. Krasowski said that by extending the bond issue it is keeping the pro- mx 100 pg: 528 Page 11 -"<~,---",-----_._,-,,,._-". ·~;_","·,"__.,.""",,,C",,",,,''''',",..,.·......,,,,",,......,,,,,,,~,......,.;.>.,,,,..,,..,,,"-''.~.~,.,,". ". ~QO~ 100 H',í 529 January 8, 1987 ject alive and the people do not want it. Mr. Cuyler said that if the Board is inclined to address the extension of the bonds, Mr. Giblìn wil: walk them through what is necessary to do that. If there is no f.,ther action by the Board, he said that he and Mr. Aron will take that as direction to meet with Westinghouse and come back to the Board by January 31st. As a point of clarific~tion for Dr. Oppenheimer, Mrs. Westman said thl¡t the Board of Directors of the League of Women Voters met Monday and the discussion included extension of the bonds. Mr. Cuyler said that he wants it known that anything that was listed by Mr. Aron is not being agreed to today. Commissioner Goodnight said that her problem is not with Westinghouse/Shawmut or resource recovery and she wants it on the record that she believes resource recovery is better th~ñ landfill. She said that she was in favor of extending the escrow bonds for 12 months and to instruct staff to work with Westinghouse/Shawmut for the extension of the presen~ contract and to come back to the Board. Commissioner Hasse asked Mr. Giblin if by extending the bonds 12 months are they are limited to 12 months? Mr. Giblin said that they can get a further exten&ion for the period of time needed. He said that they have the expectation that the deal can be completed. If the chances of completing the transaction are 1 in 100 they would not want to leave the bond out. Commissioner Goodnight moved to adopt Resolution 87-9 for the Page 12 .. - - _......"....,_...,..._;----~'''",.,'' . - - .. .January 8, 1987 extension of the bonds. Commissioner Glass seconded the motion which carried '/0, Commissioner Saunders abstaining. See pages¿)~/-~4';I. (See Form 8B appended on page,,-~~ -~fL3. ... There being no further business for t~e Gciod of the County, the meeting was adjourned by Order of the Chair - Time: 3:28 P.M. . .. ATTEST: .JAMES C. GILES, CLERK ~.\.'~ lia v/' Æ:{2~·~j2~~~ Dc ~-¿¡;¡ :~ J .:.. C/ ~ ~hf"~~jn~~~~pproved by the Board as ... ~'e~~:n~ecÌ") . V- or as corrected ,- I~ '. "'I ... ..."('" ~~Ol: 100 w'~ 530 ,I· .. , .' BOARD OF COUNTY COMMISSIONERS/ BOARD OF ZONING APPEALS/EX OFFICIO GOVERNING BOARD(S) OF SPECIAL DISTRICTS UNDER ITS CONTROL #f.~~¿ on !2-~-;J/..z? ,?.?;' ¿1 . ' Page 13 '''''''''