have a remote participant. Council member Fernandez is um connected remotely and so I think it would probably be appropriate since we have an in-person quorum if there's a motion to approve her remote participation
>> to approve um council member Fernandez attending remotely. >> Second. >> Any discussion? If not, all those in favor say I. >> I. I. >> Okay. And council member Kravitz, I'm told, is going to be a little late, but he should be here. So, okay, Mr. Bea.
>> Thank you, Mr. Mayor, members of council. Uh, as you know, we are preparing uh with the council's blessing to move towards um hopefully issuing some debt next year um to get us to the point of building a public safety facility. In that process, we rely very
heavily not only on our financial adviser, but as well as on our bond council to guide us through through this whole endeavor. Um, I'm happy to present uh Dwayne Draper, our bond council, here this uh this morning. He's going to walk you through the the general obligation
bond process, uh, answer any questions you might have, uh, and hopefully beginning maybe introduce himself and give us a little bit of background on on him and his practice. >> Very good. Mr. Draper, good morning. >> Good morning. I'm glad to be here. Uh, my name is Dwayne Draper and uh, I'm with the law firm of Bryant Miller
Olive. Um, firm's 55 years old. Um it's my 30th uh year at the firm and I've been serving uh Temple Terrace as its bond council for this is my 20th year. Um I think we've done uh closer to 10
bank loans uh during that time frame. So uh it's great to be back in front of you and um and I'm happy to kind of walk you through uh the general obligation bonding process. Um and I would encourage anybody to interrupt me at any time with any questions that you may
have. this is uh uh what a workshop is for. So um the city does have the ability under its charter under the Florida constitution to finance police and fire capital projects um uh through
a new the creation of a new revenue source uh in in essence um utilizing uh geo bonds um you can do it as a single question. So, police and fire is a is a public safety complex or complexes. Um,
it requires a citywide referendum. Um, I'll give you an example of a a referendum question um that passed 60% to 40% in 2024 uh in a different city here in Florida, the city of Key West. Um and it read on
the ballot, you know, city of Key West general obligation bonds for public safety projects PN police and fire closed PN and the question itself which is limited to 75 words was to finance acquisition construction improvement and
equipping of police and fire infrastructure including a new fire station. Shall the city of Key West issue not exceeding $60 million, general obligation bonds in one or more series, maturing in 30 years or
less, bearing interest not exceeding the maximum uh legal rate secured by and payable from the full faith credit and unlimited advalorum taxing power of the city. And then it's yes for bonds, no against bonds. So that's an example of,
you know, what could end up in front of your citizenry if you all were to proceed with a general obligation bond. In addition to the city of Key West, this mechanism has recently been used successfully by other Florida municipalities including uh the cities
of Cape Coral, Dorado, Fort Lauderdale, Fort Meyers, Hollywood, Melbourne, Miami Beach, Miami Gardens, Oakland Park, Palm Bay, Pompo Beach,
Port St. Lucy, uh, Port Orange, South Miami, Sunrise, Venice, and Palm Beach. >> Mr. Mayor, I'm sorry. I'm sorry to interrupt. Just because Council Member Fernandez is reaching out, she's having trouble hearing. Would you mind moving that microphone? It's got to be real
close to you, else it won't freely project. That's much better. >> How does that sound? >> That should be better. Yeah. >> Okay. Wonderful. Um, the revenue source is called the voted millillage. um which is separate and distinct from and in addition to your standard operating
millage. It is in effect the city's unlimited advorum taxing power for a time certain for example 30 years from bond issuance. So it's not a forever tax is considered by lenders and rating
agencies to be the strongest source of security that the city can offer. uh which means the lowest possible borrowing costs. The GEO referendum could be scheduled to
occur at the 2026 primary election or the 2026 general election. In other words, piggybacking an existing election to to min minimize the costs. We would work, Linda, I would work with
Linda to contact the Hillsborough County Supervisor of Elections to determine the deadline relating to the desired election. Um, most likely would be next summerish. Um, so, uh, what that would
mean is that the city council would be required to adopt a resolution calling that referendum before that deadline, which, you know, for discussion purposes, we could assume would be in spring 2026. Um, the statute would then require
notice of the bond of the bond referendum to be published twice in advance of the election. Um, one one interesting u sidebar that's uh that's helpful once you do call a referendum, if you call a referendum, is
um a 2022 Florida law that prohibits the expenditure of public funds by local governments to educate the voters um whether advocacy or even providing just factual information.
And I'll I'll give you some color around that so you all could understand kind of how to operate in that environment um in just a minute. But if in if the GEO bond referendum does pass in November 2026,
for example, the city council would adopt a bond resolution authorizing the issuance of the bonds. This would be in the wake of the successful vote in this scenario. And we would do a bond validation procedure under the Florida
statutes that utilizes usually takes three to four months and those are typical uh in general obligation bond issues. On a parallel track to the bond validation, uh the city manager, the finance director, and the rest of the team could work with the financial
adviser and others to prepare documentation along with us for the bond issue uh to ultimately be presented to the rating agencies andor the lender community. Um so the first trunch of the geo bonds um in this scenario would be
ready for uh issuance in the early part of 2027. So beginning to end um it's about 18 months to get money in the bank I would say. Um and again that is presumes you selected one of those two uh scheduled
elections to piggy back off of. And a big question is always how can we uh city council members how can we city staff communicate with the electors once we've called the referendum in advance of the referendum in section 106.113
Florida statutes uh does not preclude the local government or a person on beha working on behalf of local government from some of the following actions. reporting on official actions uh of the local government government's governing
body in an accurate, fair and impartial manner. Um posting factual information on a government website or in printed materials, hosting and providing information of public forum, providing factual information in
response to inquiry, or providing information as otherwise authorized or required by law. According to the Division of Elections Opinion 10-06, factual information must be limited to
verifiable actualities. Example, the new tax will permit uh the city to purchase 25 buses at a cost of $100,000 each. It cannot um have subjective or qualitative statements or
comments. For example, the attacks will improve public transportation. Elected officials can always express their opinions. Government employees are allowed to express their opinions at any time on any manner so long as the statement of
opinion does not violate the prohibitions of 106.113 regarding use of public funds. I.e. can't spend public funds to amplify opinions through political advertisements or any other communications sent to electors.
Anyone may speak to the media to express their opinion on a referendum item as long as public funds are not used to pay for providing the communication. For example, agency officer, employee, staff member speaks to editorial staff or
other media outlet. This is allowed as long as the media is not being paid for the communication. Staff would be allowed to use public equipment to prepare for the interview. Officials can speak as they wish regarding an issue, but are only allowed to expressly advocate a position if no
public funds are used to pay for the media coverage. An example is an employee could use the agency copy machine to copy material leaflets or pamphlets which contain only factual information. Leaflets in and of
themselves do not violate the statutory uh prohibition um as long as they are not sent to electors. Leaflets could be provided to those in attendance at a public forum since hosting and providing information at a public forum is is
authorized by the law. Can you express an opinion while using the computer? An employee would be allowed to use an agency computer so long as they are not creating material which constitutes a political advertisement or any other communication
sent to electors concerning a referendum. For example, uh no emails to electors. Posting of opinions on the internet is allowed as long as it is considered expenditure of public funds for communications media in general.
Internet usage of online activity is considered uh an expenditure if there's an actual cost associated with the activity. Um example, paying for the creation of a website or email lists. The cost of the internet access is not deemed an expenditure of public funds if
the internet access was in place prior to the dissemination of the material. And lastly, use of agency telephone. The use of telephone is considered an expenditure of public funds only if the f phones or equipment were purchased specifically for this
purpose. Cost of pre-existing phone service is not considered an expenditure of public funds for this purpose. So, that kind of gives you a little bit of color and flavor as to how uh elected officials and staff could communicate
um and interact with the electorate uh should you call a referendum between then and and when the referendum actually happens. So, that's kind of a flyover of of the process and um some of the issues that tend to come up during
the process. Um, you know, next steps to the extent that the city council is amendable uh to this would be um in consultation with the city attorney, we would draft um a resolution that would include a ballot question uh that would
be ultimately considered for adoption um at a future meeting in uh in 2026 for uh for the city council. and we would, you know, try to and and and determine which of the elections uh if if the city council were amendable to this process,
which uh which election to aim for and and to work backwards from that. So, I'll stop and see if there are any questions. That's kind of the the general flyover of the general obligation bonding process. I have not been through this with you um as a
community before, but we have done this um many times in recent years um in the periphery. Um we're considering some geo bond questions in city of St. Petersburg. Um for the same cycle, uh we
we serve as their bond council. We serve as Pasco County's bond council. we did for successful bond referenda question in 2019. Um uh just to give you a sense of some of the folks we bond council to Hillsboro County and Hillsboro County has recently
um when I say recently in the last decade renewed their environmentally sensitive lands program utilizing the general obligation mechanism. So, um, so this is tried and true in the area as well is is Florida in general.
>> Mr. Draper, can you back up just a little bit and and talk to us um about some of the benefits to bonds as opposed to traditional bank financing for larger projects and things like that. And I'm
I'm assuming that the the debt service cost less, the interest rates are better for bonds. But could you do a little comparison contrasting between conventional financing and bonds to kind of lay the groundwork for us? >> Yeah, Mayor, that's a great question.
And when I refer to bond or bonds plural or bond singular, I'm talking about um capital markets transactions and bank loans which are direct private placements. Typically a bank loan is evidenced by a bond singular. So the
five to 10 financings that we have worked on for the city over the years, we've issued a bond. Um and um as it pertains to um what makes more sense, a direct private placement or a capital markets transaction, a lot of times that
has to do um and and and you have a really great financial adviser who will help guide you through the process of the financial structuring. But what I tend to hear them say is it depends upon how long you want to pay the debt back
over. Um uh what's what's good about um debt for capital projects is you're able to pay the debt commensurate with the useful life of the asset being financed. And the two types of projects we're talking about fire andor police public
safety complexes are long useful life assets. So, um, if you were to finance it over a period of 10 to 15 years, um, you would probably have a choice between a direct placement bank loan and a
capital markets transaction. Um, and, uh, and and you might make that decision based upon what is the lowest cost of funds. Um if you were to use 30-year um financing,
um typically the direct placement option goes away because banks um are reticent to give you a fixed interest rate over more than about 10 to 15 years. Whereas in the capital markets, you're able to
get a fixed interest rate. Therefore, you know, in essence, lock in the um the operating mill of course work of the voted mill of course works against a tax valuation, but to lock in your your your payments for the 30-year period of time.
And so, your financial adviser would work closely with you as to whether or not you wanted to do a directly placed bond or a capital markets transaction, i.e. bonds based in part on um decisions you all would make about uh how how long to pay the debt back over.
So that's kind of that's kind of the nuance there. And then there's two types of bonds. There's the general obligation bond which we're talking about today. There's also the revenue bond. What's useful about the general obligation bond is twofold. One, it creates a new
revenue source to pay for it and it does so with the blessing of the electorate. Um the revenue bonds we've done in the past or revenue bond singular have typically been operating within your existing resources, your existing
revenue model um without creating a new revenue source. And so um so that's the benefit of the general obligation bond is it creates an additional funding source that's blessed by the electorate. >> Thank you council members. Mr. Be
>> just to add a little bit more to what said. So, we're looking at costs that are probably going to be anywhere between 15 to $20 million. We don't have an estimate yet, so once we get it from the architect, it could be different, but I'm just guessing here what the cost might be. Um, if the general the the
value the real value of the general obligation bond, not only for the the the term we're talking about, Mr. Draper put is is the fact that it's not going to put pressure on the budget because if we have to rely rely on that every year through a revenue bond type of approach
where we actually have to make those numbers work, it's going to put a lot of pressure on our millage rate um to make all the math work. Uh not that I concerned that we're going to hit the 10 max mills, but it it does put pressure on the military. Um, and so it it from a
perspective of this, police and fire are two of the services that I think are the most popular in our city. So I feel fairly confident that the voters would support a general obligation bond. That's also part of the reason why I've been recommending it uh to the council. Um, and financially I think it makes
more sense for us at this point. >> Vice Mayor. >> Yes. Uh, thank you. Thanks for your information. I believe you called it a devoted millillage or a dedicated millillage. How does that work within the the cap of 10 mills?
>> Great question. Yeah. So, uh what is I call it a voted millillage. Um so you have your operating millillage which is subject to the 10 mil cap, >> right? >> And you're very used to operating within the confines of that. The voted millage is outside of the 10 mil cap. So it
doesn't count towards. So uh you know once you have a an understanding of the cost of the project and the not to exceed amount you'll be able to figure out based on current taxable values what your voted millage would look like relative to your operating millage. But
for purposes of the 10 mil cap it's outside that calculation. >> How would that be listed then on property tax bills or >> it would be segregated? It'd be segregated. Okay. That's right. They would know it would require a simple majority for passage in a referendum. >> Correct.
>> Plus 1%. >> That's that's correct. And in fact, in fact, um residents of the city of Temple Terrace already on their tax bill probably already have a voted millage, for example, for the Hillsbor County um uh ELAP bonds, general obligation bonds.
So, it'd be a similar, you know, entry for your police and fire inside the inside the city, but it's a simple majority. >> Okay. um the uh the rating process, would that occur before or after the election? >> After >> after. >> So, while we're doing the bond
validation on the left, we would do a parallel track and um assuming that you're going to do a capital markets transaction, it would be necessary to get the bonds rated, the city rated. And um so that would be um uh on a parallel track as we prepare the bond issue it
would be to present the package to to the rating agencies and um and to get those ratings back so that you can enjoy the lowest cost of funds for your taxpayer on the voted millillage. That's correct. One one final question then would be the um uh
all referendums need to go back go through the BOCC for approval prior to placing on on on the ballot. Would this require that from non- taxing non- taxing authorities. Uh there was an issue with the school district a couple of years ago and BOCC rejected it but
then they found out that they were wrong and they they they couldn't stop. Would we would we be required to follow the same path? >> You would not. This this this would have nothing to do with the BCC. Okay. >> Yeah. You would you would be able to do this autonomously. >> Good. Okay. Thank you,
>> Mr. Derk. On the the voted millage, help us understand. So, if we went out for a bond, easy numbers, let's just say that it was $30 million and the payments were $1.5 million a year. But as every
year the valuation of property fluctuates. So would the voted millillage fluctuate in order to reflect okay we have to tax sufficient to make the payment every year. So that would change every year. >> Yeah that's a great question. I mean I
would say except for like 080910 um it's been drift the taxable values have been drifting north. Therefore if you had a voted millillage it would be decreasing as your taxable values were increasing. Um but if you did have um
you know the like the great recession happened when the great recession happened you know so t taxable values dropped then the the the voted millage had to go up to make the math work. So it's possible that you'd have that instance but um you know for 15 or 16
years in a row here we've had taxable values going up. Therefore your voted billage would be going down yeartoyear. Um now you could issue these bonds in one or more series. So, in the case of Key West, for example, they have not to exceed $60 billion in total. Um, and
that's an important number to get right because um you know um you could do this in phases. You might do um police then fire or fire then police or you might do them together, but um each the clock the 30-year clock based upon the way that
was drafted starts in the future when the bond or bonds are issued. um as far as the payback mechanism. Um but the not to exceed number never changes. So if you delay the phasing, you could be have some inflationary risk and things of
that nature um as well. But you don't have to do them, you know, all $60 million on day zero. You could do 10 million followed by a 30 million followed by a 20 million and each of them go out the 30 years the way that was crafted. >> Got it. Thank you, James.
>> Yeah, I have two. um on the referendum to the citizens, would there be an indication of what that millage would be or not? So, uh I think you could um as part of
your process, um education process, um understanding the public funds, make it clear as to how the math is estimated to work or you know, you could you could you could educate uh the voter based on current taxable values um and and and
parcels with the homestead. you know how this might impact each each our typical residential parcel. Um so uh the question though would not have that math in it. Um the question would be um
typically presented as an unlimited go meaning it whatever it needs to be to pay the debt service. So this would be sort of just part of the communication with the electorate you know in accordance with with with the law. There were these things called limited geos um
that really went out of style with the great recession because those limited geos have a cap like a millage cap inside the question and the problem is um those can get upside down and so uh
and the risk of those you've got to build in lots of coverage and um to get the rating agencies comfortable the lenders comfortable and the cost of funds can be higher because of the risks. And so um those have really gone out of vogue. Um so generally styled as
unlimited geos but it is you know it is a way you know there's pretty easy to figure out kind of how the math works in the context of the factual presentation of of uh of information during the process if that makes sense. >> It does. Thank you. The second question kind of hate to say it. Has there been
any talk about what this process would uh be like if property taxes at the state level or what the discussion is now. How do you guarantee something that property taxes may be going away? >> Yeah, I I I assume that um you I mean,
you know, nothing's changed. There's a lot of um uh uh discussion uh studies so forth. Um but um I think you'd you'd proceed along with the idea that the world remains generally the same. Um and um
and then uh you know between now and then I guess we'll have a legislative session and so um you know something we could have new information at that particular point in time that would change your strategy. Um but uh but you know um
you know >> I got you don't have an answer. >> We really don't have an answer. I really don't have an answer to that. It's hard hard for hard for me to imagine that we would move much off of this but >> Okay. Thank you. That's all. Council member Kitz. >> Thanks. >> Sorry for my tardiness. So if I ask any
questions you've already covered, very sorry about them. Um they're pretty straightforward. First of all, um is there any municipal bond analog to uh Treasury inflation protected security? And the second question is um if we
construct a building using a bond, uh does that building typically get pledged as collateral? So, the the uh the second I'll answer the second one first because that's that's a a fairly simple answer, which is um under the Florida Constitution, we
can't mortgage city hall. We can't mortgage the police station. So, the the source of security would really be just this revenue source, which would be the voted millage. um as it relates to um uh municipal bonds that may have um
inflation protectors built in or or what have you. You know, that's not something that we have seen much of in the public finance space. Um I think, you know, I use this not to exceed $60 million figure for the city of Key West uh
public safety complexes. it, you know, a lot of thought and planning and and and um ought to go into that number. So that not to exceed number doesn't necessarily mean you're going to issue $60 million of debt, but it just means that's going to be your cap. So you want to uh try to
get your head around your phasing and inflationary pressures uh in coming up with that number. you know, you you'll also have pressure on you from the standpoint of we don't want to put a number that's unrealistically high in front of our electorate on the one hand. On the other hand, you don't want to put
something in front of your electors that could get um become less effective because of inflationary or phasing um issues. And so that that is typically where that action is in connection with this as far as the um and then and then
um and then once you've got that number and it's locked in from the electric, you've got to work off of that. So value engineering, etc. But I don't um I don't see in our space investors taking that risk very often or at all.
>> Interesting. um which is you know I I'm generally working in a commoditized space with single AA double A and AAA credits and I very much expect that you all would fall within that things are fairly vanilla in this in this space you know uh interest rate swaps used to be a
thing um in this area um many years ago uh and during the great recession I I I think things went back to being more vanilla in this space just because of the nature of um the goals of cities and trying to you know put public um sector
dollars to use in a way that people can understand. And so some of the uh more interesting products that were floating around in the early 2000s, you know, really have have gone away. It's really mostly about how do we, you know, get the lowest cost of funds by putting
something out there that um will attract the most investors and so forth. >> Okay. Is there something like an inflation protected component at a lower interest rate in the short term that transitions over into a fixed rate later on or something like that that's not going to be workable?
>> You you can you can do that in the general obligation space though it's a little tough to manage um variable rate versus fixed rate. I mean it's um uh uh because uh oftent times in terms of the referendum and and educating your voters, interacting with your voters,
you want to have some level of certainty to that. Um, if you got in the revenue bond context, I mean certainly um uh certainly uh and we've done this with the city before when you choose variable rate versus fixed rate in part depending upon what investment rates are, what
your spend down is um you know to get tax exemption you've got to spend it pretty quickly. You can't sit on it and arbitrage without having to return it to the federal government. And so again, um, uh, there's not a lot of, uh, variety in so far as, but but, uh, but
the fixed rate variable rate decision in the revenue bond context is a little bit more, especially if if you're trying to figure out what rates are going to do, what you're getting on your investments, etc. Uh, in this space, I would expect it to to to be pretty much fixed rate.
Um, and and then the inflation stuff to be kind of managed and then not to exceed the phasing andor value engineering at the end of the day. And you mentioned two capital sources. One of which was uh private banks and the other one was what? >> Capital markets. So um uh public
offerings. So public offerings, capital markets where you have a broker dealer, an underwriter who would sell the bonds on your behalf to institutional and retail investors with a investment grade rating. And that's typically that action is usually in the you know 15 to 30 year
maturity space. um because banks generally don't want to give away their their balance sheet for more than 10 to 15 years at a fixed interest rate. So if your if your payback was 10 15 years um you'd also be able to consider a direct
placement of a bond with a bank. Um so that's um sophisticated resourceful lender dealing with a sophisticated resourceful uh uh borrower. Um, so you don't have to have public disclosure like an official statement or prospectus
associated with that. So there's some uh reasons that those are more efficient in terms of cost of issuance. No ratings, no public disclosure. Uh the disadvantages are sometimes you have to crunch that up to 15 years or 10 years as opposed to being able to take
advantage of the useful life of the asset which could be further and um could go out 20 20 years, 30 years. Um and um when you get in the middle area, it's um net net what's the least costly. So the financial adviser who works for
the city would help you all navigate um what the appropriate vehicle is depending upon what what your payback scenario is. >> Yeah, I got it. um for a bond of this size which is I assume quite small um would it be possible to split the issue
so that you for example draw on a private bank part of it and then maybe capital markets for the other part would that make sense it it would um it would it's it's I think at the end of the day it'll be what the math the math works best so um this this uh you know let's
say it's 15 million or 10 million or 20 million that would be attractive to either markets Um and um and so I think it's, you know, if you're in the 10 to 20 year range, you kind of have a choice. If you're in the 20 to 30 year range, you're you're most likely going
to be um headed towards a capital markets transaction with ratings and and public disclosure. >> Okay. So that's interesting because then you could split the issue and you could go for a shorter term bond from one source, longer term bond from the other, and then you've mitigated your risk in
various ways. Yeah, this will be a not to exceed amount and um of x billion and it'll be um maturing in 30 years or less for example. Um and so you don't have to pay your debt back over 30 years. Um you could pay it back over a lesser time
under the referendum and then it just becomes a matter of you know the lesser the payback is the more the voted millage will be right. So, it's a it's kind of a question of um at the end of the day, how is this going to impact the
um the property owner in terms of their tax bill? And so, most of the time, people will take advantage of the full 30 years to lessen the impact on the uh uh annually on the on the taxpayer. >> Yeah. And can the city uh keep a
contingent of bonds available to sell directly to interested parties? So, for example, if you wanted to have $5,000, $10,000 bonds that you potentially sell to your own residents or something or people in the area, would that be mixable with the other two
types that we just discussed? >> Yeah. So you your your financial adviser will uh uh lead you down this path of a a direct placement bank loan bond singular or a capital markets transaction which um has the ratings and
the public disclosure. Um the reason you have to do the public disclosure, the prospectus is because um you are potentially selling a $5,000 bond to somebody who's that's their entire retirement and they're not very sophisticated and so it is um on the
city to tell them everything and that's the purpose of the perspectus in there. There are two types of methods of sale. One's called competitive sale, one's called negotiated sale. In either case, um you're interacting with that
same group of investors. The negotiated sale is when you bring an underwriter on board through an RFP or what have you early in the process and they can set up a protocol to make um priority orders for residents of the city um for
example. And so that's how that works. you would not be able to have that customization if you did a competitive sale as far as the um the capital market deal, but the negotiated sale, you could do that. >> It is um probably my last question. How
about something like uh a land to debt swap with a potential buyer here in Temple Terrace. We've got some properties on the market. would be possible to exchange those in exchange for the person interested in the property um purchasing a quantity of debt or receiving a quantity of debt
that they have to pay off in order to uh compensate the property. >> So you're saying that uh the bond holder would not would would uh purchase the bond with land. Is that in essence >> no other way around? We give them land and they buy debt from us. For example, instead of paying $2 million for the
property, they purchase $3 million worth of debt, something like that, or whatever amount, potentially interest free. Would something like that be workable? >> Uh, I I think I I would say to you that the general obligation concept is
uh that that would that would be uh challenging, but we we could we could look we could look at that. The general obligation is really uh a way in which to tie voted millage on the bill away from the operating
millillage to the debt service that is being um paid by the city and getting the voters approval for that. So there's a box that we're creating. um what you're describing is not undoable but may be more appropriate for a different
like for example a revenue bond context which is um >> okay >> you know what we've done some in the past but that's you know as the city manager mentioned that's um competing against existing resources and so forth which is still could be a side a side transaction because to the extent
there's something there that's best best interest of the city you know within the existing resources you could you could explore something like that in that context. >> Great. Okay. Thank you for being so well informed. I yield the floor. Thank you, >> Council Member Fernandez. She's still on
me caller. >> No, we got it. Um, >> so actually I need Mr. Beyu, when he's done there, I need you. So I this is probably beyond the scope of this particular conversation, but
just we're here. Let's talk about context a little bit. So one of the things that has emerged that wasn't on the radar when this whole discussion began was that the the PAS
project and the report that we'll be getting by the end of the year hopefully from CHA which will almost certainly involve a significant investment. We don't know the details of that yet. I think everybody understands that these
are separate issues and that any revenues to address the PAS issue would be concerning the water fund as opposed to a voted millillage. So it would be obligating a different thing
but it still goes to overall debt of the city. Um, so how how would this work together with that or is it too early to be able to answer that procedurally? I don't think they need
they'll overlap, but they'll be related. Um, from a credit rating perspective, when they do the bond rating, it's probably something they'll take into consideration. Um and when they they typically go through the bond raiders will go through ask a series of questions of staff and are there any
challenges out there in the you know on the horizon is typical question they'll ask so we'd have to mention that um this community I'm happy to say right now we we have very little debt relative to our size. Uh so I think from that perspective we're we're in a good
position uh for either of these of these funding mechanisms. Uh but it's something we'd have to declare in that process and we'd have to see what how that sugars out. And Mr. Draper may want to add to that. >> I would only just mention that um you know traditionally um you would uh fund
your capital improvements in your water and sewer system um off the rate base. Um so if you have a large capital expenditure in the water and sewer system um you would do that through existing water and sewer rate
customers. Um it is not um unheard of to buy down the rate increases through um a potential advorum bond. In fact what city of St. Petersburg is currently discussing is um something similar in
connection with accelerating the storm water and some of their water and sewer projects by doing a potential bond referendum in the spring. And the idea is that um uh they're going to put some of that going off the rateayer to the taxpayer
and that's a policy decision at the end of the day. But you know if you have a large number that um that is hard to fully absorb within the rate base, this is an option to export part of that cost
to the to to the taxpayer. It would have to be a separate question if you were to do it uh at the same election. It could be on a different timetable. Um, and then you're just going to um, you know, just have to weigh the the the effect on the taxpayer versus the water sewer
rateayer. And there's there they're they're similar but different. They're not mutually exclusive. You've got Homestead working on one versus um, and so there's there's some math there to just kind of figure out how would, you know, half of this on both versus all of
it on the rateayer work and and so forth. But it's not unheard of to to do something like that. One of the difficulties is if you if you have to do it and you don't um need to go to the voters to do it. Um you know, putting a part of that out to the voters and
getting to know then you still have to do it is is also a consideration. Um so a lot of times you'll see those as being projects we can put off. If it doesn't pass, we can put it off. We can defer it. It's not a regulatory issue. Um, so that's another consideration in terms of
whether you would want to use this geo mechanism for all or portion of a utility project. But um, but for the most part that is usually fully absorbed by the rate base inside the enterprise fund in the form of debt that that's weighing heavily on my mind
and kind of overshadowing this. Obviously, this project is been a priority for the council for a long time, but the PAS thing is stickier. For one thing, we don't have any choice on that. This one, we can have some choice
in this. The PAS one, we're not going to have a lot of choice. The second thing is is the funding is going to be far more complicated because our service area doesn't match our corporate city limits. I really don't see how the rateayers
are going to be able to fully absorb the cost of our mitigation. I mean, think of their water bill now and then an additional debt payment on $30 million or something. I mean, you'd be paying a dollar a gallon for water or
some ridic I mean, you couldn't and yet to transfer that just to taxpayers is not fair either because then the residents are paying the full costs and the people purchasing water that live outside the city aren't paying anything.
So, that's I don't know if I don't want to get lost on this, but this whole discussion to me is against that backdrop. I May. >> Yes, please. >> I I I agree with that. Um I would just remind everybody that we're not alone
because everybody around us will be having to do the same calculation and go through that same sort of processes like how does how do our rate payers, you know, fund this. Tampa's they're looking at the $200 million bill. Um so that'll fall on the rateayers unless they have
some other mechanism that I'm not aware of to to fund that. >> Okay. Sir, >> Council Member Fernandez, did you did you have anything? I don't know if she can't hear us or if she's
>> anything else. question regarding the rate based um bond called would that be a fixed rate or a use a customer rate or would that be a consumption rate
or does that matter? In other words, would it be $5 per month per bill for each I remember in the service service area or would it be a dollar a gallon or does that >> I don't know if I have an answer to that. Um, we're going
>> that make it that'll make a difference >> when we if we go down this road, which I anticipate we will, um, our financial advisor, actually not our financial advisor, excuse me, we're going to have to we're going to be obligated to go out and retain a rate study and they're going to dictate how the rate will be
structured. >> Okay. All right. >> Okay. >> Yes. Council member Travitz, >> just tiny comment on the cost question. When it comes to imposing the bond on
rateayers, just thinking out loud here, if we go for 20 million, let's say that we end up owing 35 million over the 30 years. So 15 million in interest roughly, just
ballparking it. Divide that by 30 years. Divide that by 12. Divide that by 30,000 rate payers. I don't know if we have 30,000 rate payers, but if we do, that's $3 a month. So, it's a little bit of a burden, but I
don't think it's going to blow the whole battleship out of the water just to So, let's wait for the numbers to actually come back before we worry about it too much. I think it's probably wise because we don't know what the interest rate will be or what the term is or anything yet. Yeah, bet.
>> Good. >> Yeah, she Council Member Fern just replied to me that she's she can hear, but it's uh she's on, but it's really hard to hear. Um, so I'm not sure if Linda uh city clerk, excuse me, stater. If you're right next to her, are you are you able to just talk into just ask her if she has any questions or what the
mayor just communicated to her? >> Council member Fernandez, do you have any questions? Uh, no, I don't have any questions. >> Okay. >> Anything else? >> Yes, sir. >> Good. Mr. Draper, thank you so much. Uh,
good presentation. It's always nice to have dialogue and and uh obviously know your business. So, thank you so much. Um, anything else? Okay, we'll be adjourned. Thank you everybody. Yes.
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