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HomeMy WebLinkAboutUrban Redevelopment Agency Meeting March 3, 2014 URBAN REDEVELOPMENT AGENCY COMMISSION CHAMBER MEETING MARCH 3, 2014 PRESENT: Henry Ingram, Chairman, Bob Young, Brad Owens, Larry Jones, members of the Urban Redevelopment Agency. ABSENT: Terry Elam, member of the Urban Redevelopment Agency. Also Present: Jim Plunkett, Attorney; Nancy Morawski, Deputy Clerk of Commission. Mr. Ingram: --- to order. You have the agendas in front of you. Do you have any, this is our first meeting and I doubt if there will be any additions to the agenda that we need to add. Mr. Young: I’ve got a couple of housekeeping things that actually come out of the ordinance and we may want to address today or defer them. It discusses the adoption of an ethics policy for this board and I think we can just adopt the county’s --- Mr. Ingram: Okay. Mr. Young: --- ordinance that govern us. Mr. Ingram: We need to add that then if we’re going to take action today. Mr. Plunkett: And I believe, Bob, that that is already in existence. This is an not the initial meeting of this board so all --- Mr. Young: Do we know that the previous board has done this? Mr. Plunkett: I believe it did but if it has not we can certainly add it to the agenda and get confirmation --- Mr. Owens: Why don’t we do this just to be on the safe side we’ll go ahead and just add it. Because are we under a time constraints that you spoke of earlier? Mr. Plunkett: We are but I think we can go long but if we can keep it as close to five but that would be --- Mr. Ingram: Officially, what do you want to add, Bob? Mr. Young: Well, I just, adopt the County Ethics Ordinance as the governing ethics document for the agency. There’s also a reference in here that we need to adopt a budget at some point during the year that we have to create an annual report that’s completed by March st 31. I guess in some way we need to determine how to approach that. I know it’s going to be --- Mr. Ingram: Well, --- 1 Mr. Young: I don’t want to --- Mr. Ingram: But I think one of the things that Jim was going to do was bring us up to speed as to what the former board did. And I think some of this that you were concerned with will be --- Mr. Plunkett: To accomplish we will address these once they get added to the agenda. Mr. Ingram: Okay, that’s right. th Mr. Young: Then the other thing is the audit which is due by June 30. Mr. Ingram: Okay, anything else? Mr. Young: I just had a general question. Do we have a public office to call on? Mr. Plunkett: No. I’m not, that is, I’m not familiar with any type of E and O kind of coverage for members --- Mr. Young: Well, we’re probably going to need to have some Errors and Omission Coverage if we’re going to be dealing with bond money. Mr. Ingram: I concur with that. I think within the statute itself there is no liability attached to --- Mr. Plunkett: That’s correct. Mr. Ingram: --- but I agree with Bob --- Mr. Young: That doesn’t preclude somebody from suing us. Mr. Ingram: Exactly right Mr. Young: And that incurs expense. Mr. Ingram: Are you saying you’re not sure or do we --- Mr. Plunkett: Well, I will follow up on that as far as the D and O and how the Risk Management of Richmond County covers that. I can report back --- Mr. Ingram: Do we task him to do that and get that email out us pronto? Mr. Plunkett: Certainly. Mr. Ingram: Any other additions to the agenda? First election --- 2 Mr. Plunkett: Move, motion to approve the agenda and accept it. Mr. Ingram: Okay. Mr. Davis: So moved. Mr. Ingram: Can I get a second? Mr. Owens: Second. Mr. Ingram: It was properly seconded that we amend the opposed agenda. Any discussion? All those in favor vote aye. Opposes nay. Motion carries. First up is the election of Secretary of the Board. I asked Bob Young to serve as our secretary. One of the things Bob quickly said to me as long as he didn’t have to take any minutes he would without question be willing to serve. And that’s a suspicion that Jim will handle all the recordings and bring back the minutes to us. Is that correct? Mr. Plunkett: Ms. Nancy will --- Mr. Ingram: Okay, great --- Mr. Plunkett: --- between the two of us we’ll take care of that. Mr. Ingram: Between the two of us so I would look for a nomination. Mr. Owens: Mr. Chairman, I nominate Bob Young to be Secretary of the Board. Mr. Ingram: Bob has been, Bob Young has been nominated. Are there any other nominations? All those in favor of Bob being the Secretary of the Board vote aye. Opposed is nay. He’s the secretary. Mr. Ingram: Approval of bond resolution and intergovernmental agreement with Augusta Georgia. Mr. Plunkett: Mr. Chairman, it may be beneficial since that’s a little bit more of a conversation there if we maybe take some of the items that’s added on --- Mr. Ingram: We can do that. We’ll go with Ethics first. Mr. Plunkett: I believe that’s been adopted by the existing board. As you know this board was formed in 2010 in terms of the existing members have expired. We were holding it over until the appointment of new members. I believe that was taken care of in the original resolution. But if it’s not I will certainly report back to the board the minute the next meeting is up or we can take a motion as Mr. Young said to adopt that in lieu, in the event it’s not been previously adopted as the county board. 3 Mr. Young: --- provisional --- Mr. Ingram: Budget? Honestly we’re not in the partial position to because we don’t have one in front of us. What has been the activity of the former board? Are we meeting for the first time or there was in fact another board? Mr. Plunkett: There was, it was existing five members and their terms lapsed. So this is just a continuation. Mr. Young: They haven’t met for a year and a half. October 2012 was the last set of minutes I’ve seen. Mr. Plunkett: Okay, so it met on an as-needed basis as far as that goes. What we’re looking at is the board has no income, it has no expenses so if there’s not been a budget necessary previous to that. And I think that would continue to be true until there’s some independent funding source for that. I believe, Tim, that’s just how ya’ll accounted for it. Mr. Schorer: It’s, you are (unintelligible) the government. There is some activity but it’s debt service. Mr. Ingram: So any info that we call you for has that compensated. Mr. Plunkett: The county takes care of that. Mr. Owens: So the agency doesn’t have independent counsel. We use contract counsel through the county commission. Mr. Plunkett: I’m independent counsel to, I represent both the counsels, yes. There is no third party attorney. I represent the URA --- Mr. Owens: Because I like Byrd Warlick on the DDA or --- Mr. Plunkett: That’s correct. Mr. Owens: Okay. Mr. Ingram: But understand that we have the capability of selecting up our own counsel. Mr. Plunkett: You could. Mr. Owens: Does it, who tracks, just a quick, Mr. Chairman, who tracks that, who tracks the expenditures accrued by the Board? Do you, does, would that be part of our annual report or audit? Like how many hours would it be or how much money we actually cost the county by operating? 4 Mr. Schroer: The URA Board is a fund set up as in our in Augusta so basically the, once we have the bond issues done we have those revenues those funds came in and were expended for the Laney Walker/Bethlehem Project. It’s all folded up into accounting. It’s part of our annual audit as a discretely presented component unit. So it’s all handled within the Finance system. Mr. Owens: Jim, there’s no requirement by us by the 1955 Law to have our own direct accountability for the money we spend? Mr. Plunkett: Well, but it’s, thus far you haven’t expended monies in a sense of monies coming into your hands and out. The first transaction is Laney Walker/Bethlehem like IGA contracted with Chester Wheeler’s department with Augusta to handle those funds. As far a billing issues and keeping up with that (unintelligible) components, I bill to the county under the URA and things of that nature. This board has minimal expenditures in legal fees outside of issuance costs and that’s basically it. There are legal expenses for instance in the acquisition of real estate and things of that nature that are component of the use of the bond proceeds. But outside of that it’s fairly negligible as far as that. I’m not familiar with the need for independent counsel under that statute. You could seek other counsel if that, just in case and then you would need to solicit to the county for funding to be able to pay that. Mr. Ingram: Do you have copies of the previous budget annual report? Mr. Plunkett: It is my understanding URA did not prepare annual reports and one of the things I suggested to the --- Mr. Ingram: I mean I’m just asking --- Mr. Young: Section 12, Section 12 --- Mr. Plunkett: (unintelligible) it will be. Mr. Ingram: Okay. Mr. Plunkett: I understand. st Mr. Young: So we will provide that annual report by March 31 and we’ll have an audit th by June 30 and we will have a budget. And if don’t have any money I think that we need to have some showing in the minutes that we, so at least we know we’ve dealt with these things. Well we’re directed to. Mr. Ingram: The other question did the other commission authority members, agency members did they actually have a printed budget? Mr. Plunkett: They did not. 5 Mr. Ingram: So I guess my question is if it’s indicated we’re supposed to have how, why was that not done? Mr. Plunkett: That’s a good question. I don’t know and so let me kind of tell you a little bit about that so it makes some sense. Mr. Ingram: Well, let me, one of the things that I think all of us around this table I think the word that would probably come out first is transparency in making sure and insuring that everything that we do we follow the law, we follow the letter of the law and we have integrity in doing it. And I think, I don’t know what the others did because that’s somebody else but hopefully I can speak for this board. We will do it. Mr. Plunkett: And I’m glad of that. And my point of that is that in a memo I sent to the Board of Commission, Richmond County Board of Commission I suggested and I think, Brad, maybe was sent to you. One of those things is that the annual report had not been made and I suggested the annual report to be made to the county commission prior to issuing debt. Okay? So that was one of the things I think should be done. Now was the commission information available, yes, I think it was. These minutes have always been taken down by the Clerk of Commission. Mr. Wheeler has provided, you know, a great deal of data on the comings and goings of that. It’s simply, it’s not the moralizing of summary form. Mr. Ingram: Can I ask you a question? Were you the Counsel of Record during the last one? Mr. Plunkett: I was. It was just unclear whose responsibility it was. Mr. Ingram: But you’re supposed to help us with that, right? Mr. Plunkett: Well, and that’s why I’m trying to make sure it gets done and that’s my saying that it should be done prior to issuing debt. Mr. Ingram: Okay. Should we discuss the audit? Mr. Plunkett: Well, I think in general terms the audit is part of the component unit. If you were looking at this as being a separately funded entity, then an audit would be appropriate. There’s funds coming and going and it would be appropriate in a zero budget situation and it being a component of (unintelligible) I don’t see a need for a separate bond. Mr. Ingram: Well, let me just tell you what’s a little bit confusing to me. If you are the Attorney of Record and you’re billing for hours that you spend with us so there is a cost that is attached to the activities of this entity. So there are, there are definitely some costs and I’m just wondering all the other boards that I’ve served on as a relationship with the attorney there’s either a retainer agreement as to how the billings would go and there’s other sundry things. And I’m not beating you, I want you to know. What I’m just trying to do is get the lay of the land so going forward at this, what I’m concerned of being an organizational meeting that we all be on the same page. 6 Mr. Plunkett: Well, let’s, and that’s fine. Let’s establish what was going on in the past and then what’s going forward from there. The URA issued debt for the Laney Walker/Bethlehem Project to the extent that there were expenses relative to that meetings and any type of attorney’s fees relative to that. It was billed to the bond fund, okay, not to the county in that regard. If there was questions raised of legal issues ancillary issues there was a file that was billed to, for the county, fairly nominal amounts in that regard. So the board we met if infrequently. There was just not a great deal of expenditure for that. So I’m not sure going forward if this board will have other than the annual meeting and a periodic meeting if there’s some project to consider whether or not those fees will be incurred. As I said the county has made payment for those just like accounting may pay for separate counsel for someone they paid those expenses. And you can certainly treat this as an organizational meeting as how ya’ll want to handle that and then going forward we can decide, you know, talk to the Commission about if there should be some funding for that issue. I think the net result is going to be the same wash as far as that goes. And then, you know, outside of that I’m not sure what else needs to be addressed. Mr. Young: Well, I would with respect to the audit that if we don’t have our own budget our own bank account that’s one thing. But we do have bond covenants, we have an intergovernmental agreement and I think we do have a fiduciary responsibility as people have issued the bonds technically own the project until we turn it back over to insure that these covenants and these provisions are all being addressed. And that’s what an audit does to be sure that everything’s being done as it was initially agreed to be done. Mr. Ingram: Not necessarily just the numbers. Mr. Young: I think an audit’s very important. It’s a part of managing public funds. Mr. Owens: Mr. Chairman? Mr. Ingram: Brad. Mr. Owens: Jim, the audit, there has not been an audit done. Is that my understanding? Mr. Schroer: No, sir, there has been an audit of each and every year as part of the county audit. Mr. Owens: So it’s in the big audit. Mr. Schroer: Yes, sir. Mr. Owens: So if I said to you counsel, Mr. Chairman, I’d like to have our section of that audit cut out and presented to us in something, you know, so we can see what what’s going on with our projects, that we’re you know servicing the bonds or could that be done? Mr. Schroer: We can show you the funds. 7 Mr. Ingram: I don’t think he’s asking for a little bit. Mr. Owens: Yeah, I’m not asking for how much money. I mean you know an audit --- Mr. Schroer: It would be presented as a, I believe it’s presented as a fund URA audit. Mr. Owens: I would have a question for counsel on this then, Jim, you know, could we get with the parameters for the audit? I mean what’s required of the law for, you know, the audit to take place and what, during this audit what are we looking at and you know, kind of that’s what I would like to know that. And then I definitely think that, you know, I think ya’ll are right we need to take a real, you know, we need to take a look at that you know and make sure that everything’s going the way it’s supposed to and we’re in compliance on that. Mr. Ingram: Let me make a suggestion. I think that what is transpiring here is that we have a lot of questions. I think what, I think what would be more expedient for us to do if each of us members is just go ahead and pen those questions as to the ones we want answered and get them to Jim for him to get those answers back to us I think it would be a little bit more expedient to do it that way. Mr. Young: May I suggest that we submit that through the Chair? Mr. Ingram: Yeah, right, that would be fine. Mr. Plunkett: Mr. Chair, what I was planning to do as I said I suggest to the Commission was that we have a summary done. I will provide you the draft of that unofficial action. But I think that if I provide that to you and to the members of the board you may have a better feel for what has happened in the past. And it’s sort of reparatory for us as it has not been completely just whatever. You know, I just wanted you to understand that. Mr. Ingram: It almost seems that way. Mr. Young: It might be helpful if we all had copies of the minutes of that. The other group I don’t think they met four or five times. Mr. Plunkett: But you know each time there was, again it was dealing with the budgetary issues with the Laney Walker Project. That day was always provided to the board before it took an action on that, they considered it, questioned it and things of that nature. So it’s not just a completely conduit in that regard. Mr. Owens: Mr. Chairman --- Mr. Ingram: Yes. Mr. Owens: --- what I think, you know, they only have a single issue to deal with. I mean looking at all the stuff that’s going to come before this URA it looks like it’s going to be 8 we’re not going to meet once a year. I mean it doesn’t look like we’re going to need to meet once it looks like we’re going to have several projects in different areas of downtown. It’s going to talk about lots, like tens of millions of dollars worth of bonds being issued on each one of them and a lot of moving parts. So I mean maybe just stuff wasn’t done then because it wasn’t necessary because it’s much more simple. I think what we’re talking about is very simple what they were dealing with. I don’t get the feeling that this is going to be simple dealing with some of these projects. Mr. Plunkett: If this board and the Commission, County Commission sees that as a function, yes, it could be a very active board. And personally I think it’d be very good if it was an active board. I think it can do a lot of good in downtown. Mr. Ingram: Well, we’ve come to a consensus if you members would put those in writing and get them to me I will caucus and get with Jim to get those resolved and those questions answered. Going forward discussion of potential future URA projects and we’ll come back to the (unintelligible) last. Mr. Plunkett: There are two things. Mr. Wheeler’s here. He was I think he wanted to give some information about the existing project with Laney Walker. Is that correct, Chester? Mr. Wheeler: Well, I wanted to request some time. I would like to bring ya’ll up to speed and I can’t do that in an hour. We’ve been working since ten --- Mr. Ingram: Because obviously this would last more than an hour. Mr. Wheeler: --- yes, so my request would be that maybe you give me two or three hours, one at a time and I can get you brought up to speed as well take you out and see what’s going on physically so you can put it in context. Just me standing up talking to you and you not going out seeing it, it works better when you can really see it. Mr. Young: Could we just have a workshop over there maybe? Mr. Ingram: Yes, I think that’s (inaudible) but what I’d like for you to do, Chester, if you could give us some dates that I can bring back to the members and see what works. Mr. Wheeler: Am I limited to one hour, am I limited to --- Mr. Ingram: What do you need? Mr. Wheeler: It’s going to take at least two hours to, two and a half hours to go through everything. Mr. Ingram: No use going over there for a two hour meeting that you’re going only take an hour than we’re going leave half --- Mr. Wheeler: Right, I was following your statement that the meetings only last an hour. 9 Mr. Ingram: (unintelligible) the two hours and we’ll caucus about it and if you give us several dates to see what the schedule is for each of the members --- Mr. Wheeler: Okay. Mr. Ingram: --- then --- Mr. Wheeler: Is morning better or afternoon? Mr. Ingram: Okay, once you when you give us those dates give us a morning and --- Mr. Wheeler: Okay, I’ll do that. Mr. Ingram: Think that’ll work? Mr. Wheeler: That’ll work. Mr. Ingram: Thank you, sir. Mr. Wheeler: Thank you. Mr. Ingram: Thank you so much for coming. Jim, do you have any other --- Mr. Plunkett: Yes --- Mr. Ingram: --- about the project that the --- Mr. Plunkett: --- yes, I sent to you a couple of documents in an email one of which was the Augusta Downtown Urban Redevelopment Plan. This document here I can provide you all a hard copy if that would be easier. I know I send a tremendous amount of email materials. What I didn’t want you to do is have something last minute like today two minutes before hand --- Mr. Ingram: In the future you’ll provide the hard copies. Mr. Plunkett: I’ll be having, bring hard copies of anything. I’m also trying to be slightly green in a sense, you know, if I don’t have to produce it. But in that there are --- Mr. Young: You’ll need a paper budget. Mr. Plunkett: Somehow or another I don’t remember to pass that along (inaudible). Basically there are five areas that were designated as potential development areas. One of which was the Municipal Building, one of which was Port Royal. One is the Coliseum Complex the other ones the former library site and the other one was the Chamber of Commerce Building and the other one was the old depot site. For those who haven’t a copy it’s page four of that. Those are the areas in addition to Laney Walker/Bethlehem this body will have the ability to implement 10 a plan. Just for kind of a historical background basically the URA, the Urban Redevelopment Area is designated by the Commission. The Commission then adopts the plan for redeveloping those areas. And within those areas if a plan’s specific budgets are then adopted by the Commission to help that in that regard. The Municipal Building is obviously a project and it is listed in here. The second project is the Port Royal Project and there’s some interest in the acquisition of the commercial floors of that and creating into some public and private issues one of which is to create about 80-90,000 square feet of Class 1 Class B office space, the creation of the Folk Art Museum, the rehabilitation, or the renovation of the use of I think it’s the Paul Simon Theater in there, creating some incubators that are located downtown some space for those and a small amount of retail restaurant space about 8,000 square feet. The initial plan for that was to bring it downtown and it would bring approximately 400-500 people to the downtown community 9-5, you know, 8-5 hours. And so that was one of the projects if this was to go forward. And Matt Kwatinetz you may have heard that name ---- Mr. Ingram: Yeah. Mr. Plunkett: --- he was kind of managing that. If this goes forward then what would happen is the URA would be involved in the acquisition of that building, the renovation and the leasing of it. The --- Mr. Young: The acquisition of the public area not the condominiums. Mr. Plunkett: Just the two floors, the commercial what’s there, the commercial floors of that nothing to do with the residential above. And then the other part of that would be to create some parking for that facility. There’s inadequate parking for that many people to come into town. That is the old depot site. Obviously the depot site would be used for multiple uses of that but that would be the initial issue of trying to provide some flat parking for that facility to support the new infrastructure there. Mr. Ingram: Didn’t that emulate from a private developer’s plan? Mr. Plunkett: Well, I don’t know exactly. I know that Matt from ARC was actively trying to find things that would be catalytic for downtown. Now whether or not the tenant came to him first or he went to the tenant I’m not sure how that went but that would’ve been one of those issues to try to create something there. So the URA would be able to construct parking and oversee and Brad and I talked briefly beforehand you would probably, the structure of that deal would be the ownership would be the URA for a series of management agreements with ARC and probably would be a. for the management of the facility making sure that the theater was used properly so that there wasn’t any tax issue, disqualified management agreements on the number of days people could use that, things of that nature. And then kind of a day-to-day operational issues of making sure that the facility’s clean, the light bulbs are done and that would be the DDA. Those, that project has four, the rents on that would pay for not only the debt service for the initial part of that debt but it would pay for the ARC fees, the DDA fees and some other fees to Augusta for doing that. 11 Mr. Owens: And that’s assuming what type, excuse me, assuming what type of occupancy? Mr. Plunkett: Basically it’s 100% occupancy and what was going on with this, this is we’re doing the due diligence before the due diligence what was provided to this body prior to actually issuing the debt. It’s what were the rent rates and why were they there. What was the appraisal of the property and are we within the appraisal numbers. But the structure of that deal was just that it was a tenant, what’s been proposed by Matt is a 15-year lease with the tenant having the right, your tenant to walk on the deal with two years advance notice --- Mr. Owens: And the tenant would be? Mr. Plunkett: I prefer not to disclose the list at this point in time but --- Mr. Ingram: You’re saying you’ve got someone in line --- Mr. Plunkett: This is --- Mr. Ingram: --- that read the whole specs. Mr. Plunkett: --- the whole specs but they would still have (inaudible). Mr. Ingram: Clear. Mr. Plunkett: Realistically it’s in the specs. It may be that we have moved too slow as opposed to fast enough. Mr. Ingram: Jim, if I may, one of the things on this thing is because I think you said, one of the things is that apex from these developers is confidentiality. One of the things from the Development Authority or whatever you can run off developers and potential clients by divulging names. So I just wanted to convey --- Mr. Plunkett: Oh yeah, I understand --- Mr. Young: You don’t want to say it’s International Formal Wear. Mr. Ingram: Well, we don’t want the news to get out. But at the same time one of the things that we need to adopt to that too (unintelligible) one of the things that I initiated when I became Chairman is that I just believe if you have authority members that you can’t trust then they shouldn’t be authority members. So it’s a situation that will be something that we will discuss. Sometimes companies make you sign confidential agreements when you can’t do it but I don’t want it to think it’s a trust issue. Mr. Young: Well, isn’t this stuff pretty well known by the time it gets to us? Because it’s already been through the Commission, right? 12 Mr. Ingram: Not always. Mr. Plunkett: It could be. What this is, this is coming to the URA and there’s been a lot of discussion with, Tim, different bond counsels on how to structure who could be involved to do this deal. The issue of that one specifically is it’s a, it’s amortized over 30 years the debt with this 10 year, 15 year payment issue. So there’s a gap in time and that’s caused some pause on how, you know, the issue there --- Mr. Owens: That’s two thirds --- Mr. Plunkett: Yeah --- Mr. Owens: --- the time is unaccounted for. Mr. Plunkett: --- well, actually roughly half, 15 years. The flip of it though is a very positive thing. The likelihood is that they would renew. You would have an asset that’s worth multiple millions of dollars to do so. As far as this particular board’s risk in that and you owe me something (unintelligible) debt this would backed by Augusta’s full faith and taxing ability. So this board would not be on the hook without some other source of payment through some IGA. Mr. Ingram: And that’s --- Mr. Speakers: (unintelligible) Mr. Ingram: --- and that’s for all activity on this board, correct? Mr. Plunkett: Not necessarily. But I would suggest as counsel that anything that did not involve the full faith and taxing ability of Richmond County that ya’ll pay very, very close attention to the finances of that deal. And I would tend to say that there are very few deals that you would ever consider. Mr. Ingram: I can imagine. Mr. Plunkett: And as speaking for the Development Authority and most of those of kind of we used to refer to as phantom bonds or persons buying their own bonds. But if you go out and sell it to a third party market you really want it to be a good deal. And so that’s kind of an issue there. So it’s a bit of the Commission’s, and you are considering Commissioners that throws it off so I apologize for that. It’s really the County Commission willingness to back that. And this board can be as active or serve as much as a conduit only as need be. The URA deal that we’re talking about with Laney Walker due to the fact that it was a conduit. And here in the Port Royal deal I’ll be calling you a conduit plus because there’s a little bit more to make sure that you feel that it is appropriate to go forward with. So those are the two deals I’m familiar with. Chester wanted to give you updated information and this potential with MEDAC. You know I think that it is a positive deal for downtown. It is a deal that ya’ll need to feel good about and the County Commission needs to feel good about. I did want to bring it to ya’ll’s attention 13 because if the deal is kind of in flux it may not be going forward. If it is to be salvaged and that particular tenant is involved this board may be asked to meet again much more quickly than otherwise would be the case. And when I tell you this is maybe an annual, semiannual meeting rd and then you find out that we’re meeting March 3 and then I’m going to ask you to meet April st 1 and then I’m going to ask you to meet with Chester and then I’m going to ask you’re saying, Jim, you’ve lied to me in so many different ways so I don’t know where this comes from. So I do want you to understand that that type of thing if you’re interested as a body helping it will take some of your time. Prior to that, I will provide you with as much information as legally possible. You also mentioned the NDA’s, Nondisclosure Agreements. Generally a nondisclosure agreement can be signed by you individually. It cannot be signed effectively by the body because it would have to be discussed as a body. Mr. Owens: --- you have to have open records --- Mr. Plunkett: It really doesn’t affect you very well there. But that is the two projects that I’m familiar with, I’m referring to Port Royal being as but Port Royal and a little bit of parking on the other side of the street. Mr. Ingram: Any other questions, Jim, as to the projects that you just alluded to? Mr. Owens: No, I just, I’d like to Mr., help if I can. You know if there’s something we can do to get these folks to come on in to commit, Jim, have them talk to you. Let’s find out what it is. Mr. Plunkett: I will certainly reiterate if that’s generally the position of this body. As I will certainly reiterate to Matt by email and I will copy all of the emails saying that this board stands ready to act. Mr. Ingram: I think the very first thing we would do is create our strategy going forward, how we would do that, how we would engage potential developers going forward so we’d be on the same page. We don’t really need any renegades which I know we don’t have any here at this table. Mr. Young: Not yet. Mr. Ingram: Not yet. Mr. Young: You might have one with the historian here. Because I really when I first read this I was really concerned about using the pension property down here as a parking lot. I don’t know if that’s the highest and best use of property that’s on the river front because there is so little of it. So I’d love to have that dialogue with somebody because --- Mr. Ingram: Those are the kinds of things I would like whenever possible when you have those kinds of questions or those kinds of concerns that we kind of outside of our meeting that, you know, so that we don’t be here for two or three hours. 14 Mr. Plunkett: To address that real quickly it’s approximately 250 spaces. You would be dedicated from 7 to7 to the use of those facilities and then after those hours it would be available for public parking either for fee or non fee. It would probably be managed by the DDA. Any fees that they generate would go to their budget thereby by reducing this dependency on Augusta Commission funding. It would be available for the museum and things of that nature. It would be restricted during the day for those people. But you have this public theater of 250 seats, they need somewhere to go to sit. These two couple of restaurants the lower end of Broad. And the th idea why that was an attractive idea is that if you have 500 people coming on a daily basis 5 Street maybe some other things will open down. Mr. Owens: Mr. Chairman --- Mr. Ingram: Yes. Mr. Owens: --- I would like to ask that Mathew Kwatinetz you know --- Mr. Ingram: Sure. Mr. Owens: --- to give us a report. Tell us you know something about where the deal is, you know, and he’s the guy working the deal, correct? Mr. Plunkett: It is. Mr. Owens: That’s his job and we’re part of the financing piece of it. Mr. Plunkett: That’s correct. Mr. Owens: It would be nice to hear from Matt. Mr. Plunkett: But it will not be paving for the entire depot site. It will be a corner until something came along. And it’s understood by the potential tenant is that that parking will be eliminated when a real development comes along that may be (inaudible). Mr. Young: All I know is what I see in front of me. Mr. Ingram: And let me just say the reason why --- Mr. Plunkett: I understand how it was written, why that was written this way was to make it the authority --- Mr. Ingram: The reason why I said that in terms of our former Mayor knows where all the bodies are buried. I know he will have much conversation and discussion about a whole lot and we look forward to. Mr. Young: They spent a lot of money remediating the contamination there and if you just don’t pave it you didn’t need to remediate it. You just encapsulate it. 15 Mr. Ingram: Bad news for that money spent, right? Let’s go ahead and move forward. Number three, item number three on the agenda, Approval of Bond Resolution and Intergovernmental Agreement with Augusta Georgia. Let me just say before we even I’ve had conversations with several members and there is some concern. I’m going to recognize Brad first. We talked a little bit this morning about some of the encumbrances that, one comes to mind that one might have concerns about. Brad. Mr. Owens. Thank you, Mr. Chairman. My number one concern is that these are revenue bonds. That’s how I was at the Commission meeting when this went through and the way I read it is, is that, you know, these are the revenues going to be servicing these bonds if I’m correct is off of the SPLOST that just been proposed but it’s not been voted on. Correct? Mr. Plunkett: That is one revenue source. Mr. Owens: Okay, that’s one source. What’s the other sources? Mr. Plunkett: There’s a .71 mill for capital outlay projects and in the event that this SPLOST VII was not passed or it was passed that could be used to pay the debt service. Mr. Owens: So a tax increase is the other option for the Commission. Mr. Plunkett: No, sir. Mr. Owens: A reallocation of the stuff that’s already being collected. Mr. Plunkett: That’s correct. Mr. Owens: And that money is now used to what buy fire trucks and police cars and capital? Mr. Schroer: No, it’s for non SPLOST capital. IT is a big user of that and non emergency vehicles, small capital projects that are allocated on an annual basis. Mr. Owens: And how much does that tax rate bring? Mr. Schroer: That brings in approximately 3.4 million dollars. Mr. Owens: Okay. Another concern of mine, Mr. Chairman, was the just getting into the bond issue. The bonds that are being issued are these, the interest rate that I saw was 7%. Is that correct? Mr. Plunkett: Those are parameters not to exceed. Mr. Owens: What’s the actual bond rate because I remember 3.5% being what Ms McNabb said to the Commission. 16 Mr. Plunkett: What happened, what will happen is that the, they use different phases than what we think of in terms of residential real estate. But they have two one is a pricing, and one is, the way I look at it is it’s the date the price is set. Okay that’s pricing that’s when the interest rate and the bonds are sold. And then there’s a settlement date which is what they call closing which is I think of as funding and that occurs probably anywhere from 5-10 business days later. So until the bonds are priced we don’t know an interest rate. The bond market, the municipal bond market is fairly stable and Dianne has looked at this and she’s been doing this for a number of years. And she is usually within maybe five to ten basis points of where it would be. So she was saying the market was on a date certain 3 ½ percent it’s probably going to be in that 3 and a half 3.55, 3.56 percent. The problem that you have on the issuance of debt is that you can have spikes in the bond market, okay, anomalies that would occur. What we do is we this building needs to be renovated period. If the bonds spiked out of the ordinary we would probably not price that day. You have the right to pull back. What you don’t want to do is once you price the bonds and we sell them to a particular entity not close, okay. Theoretically you could but that would be very problematic for future debt issues. So we put a number that is well outside of the number so that the county commission has agreed to back a bond and if the rates have gone up I mean as an example are we going to invade Russia but that may affect the, you know, the bond market to some degree. Let’s say it went to 4% four and a half percent but we still need to borrow the money. But we had stopped at Diane’s number and said three and a half you could reissue, you could reissue the debt. So the parameters are put in there in large gaps to allow for this body to be able to issue it when it thinks is appropriate and a rate that thinks is appropriate. Mr. Owens: As I spoke to both of the commissioners that appointed me and they were under the impression that it would be 3.5%. Mr. Plunkett: Well, this isn’t --- Mr. Owens: Okay, I understand what you just explained but that’s one and I understand that. It just seems like double. I mean that’s 7 %, that’s pretty up there. I have another question on this line. It comes from the, about the issuance of the bonds. The SPLOST vote’s in what seven weeks, eight weeks? Mr. Ingram: Yeah, something like that. Mr. Owens: Timothy, are we going to run out of money in eight weeks before this vote st, takes place? I would be willing to meet on the 21 Mr. Chairman, if it passed --- Mr. Ingram: I guess the question what encumbrance do you have if we pass, voted on this bond resolution after SPLOST? Mr. Plunkett: Well, you have two different issues there. One is is that Tim is, can address the issues about money becoming tight. You’re looking at realistically we’re relatively in position to go on these bonds and it’s probably the end of March to issue the debt, first of th April. So you’re talking about a four or five week gap. So if you were to wait until May 20 you’re talking you know May, June something to do that. Tim can address the thing there. The 17 other practicality of it is that the Finance Department is kind of the one behind this. Their audit season is about to start. Their audit’s due June 30. And if SPLOST did not pass, SPLOST VII, you’d be looking at the capital mill to fund that until SPLOST did pass. Or alternatively continue to use that so your revenue source is built in. If SPLSOT VII failed to pass on May th, 20 this building either is renovated or it’s not with those income constraints. Mr. Owens: But if we issue the bonds my question is is that they’re not, how can we issue revenue bonds without a dedicated revenue source? That’s my question I guess. Mr. Plunkett: Because you have an intergovernmental agreement and that intergovernmental agreement says that Augusta will construct this building and Augusta will pay the debt service when it comes due. It’s effectively, they convey the property to you, you then sell the property back to them with enough money to build the building and they’ll make the payments. Mr. Owens: Well, who services the bonds between now and when SPLOST VII gets collected which is eighteen months from now? So I mean my question is isn’t there already got to be some sort of dipping in to some sort of area here that, you know, where’s the money coming from to service it until SPLOST VII begins? Mr. Plunkett: That’s more a cash flow issue for Tim. I’ll defer to Tim on how the annual bonds debt will be paid. Mr. Schroer: The debt service, what we’ll do is capitalize the interest on the bond issuance and use part of the funding from SPLOST VI to pay for the interest until SPLOST VII gets in to start paying debt service. Mr. Owens: And that can’t be done between now and June? Mr. Schroer: We are dangerously close to running out of funds to complete this project. We’ve pushed as far as I’m comfortable pushing. It is an $8 million dollar commitment for the IT Building that we’ve been pushing very hard to get the bonds issued. Mr. Owens: Okay, I’m confused. Mr. Ingram: I think, Brad, two things come to light for me. Number one no new taxes and two I asked early on in the 1.7 mil is --- Mr. Plunkett: 7.1 Mr. Ingram: 7.1 --- Mr. Plunkett: Well, .71. Mr. Ingram: --- .71 mil is monies that are already in the house if you will but just will be used for reprogram from one item to something else. 18 Mr. Plunkett: Yes, sir. Mr. Ingram: So I think the bottom line is it’s going to get done. Our decision has to be what the timeframe. Mr. Owens: Jim, I just don’t feel comfortable issuing revenue bonds on a revenue source that hasn’t been approved yet. I mean if we can, it doesn’t seem like we’re going and my question that’s why I’m confused about, Tim, is you’re saying that this is already covered no matter what happens. So how is it not covered if we just wait eight weeks to take our vote? Mr. Schroer: Because we’re running out, we’re getting to the point where our cash flow is becoming critical. Mr. Plunkett: I think I understand your question, Brad. Here’s the thing is that, all right, the first payment would be due October 1. Mr. Owens: Okay. Mr. Plunkett: These aren’t monthly payments so it’s semiannual payments. October 1 st and April 1. All right, we need to borrow money to finish the building. Mr. Owens: Okay. Mr. Plunkett: Okay? We need ‘x’ number of dollars to build what we said we were going to build. Okay. If we don’t have that money don’t worry about the monthly mortgage payment or the semiannual mortgage payment. If we don’t borrow the money, and you’re seeing I think the face is twenty, I apologize --- Mr. Owens: $28 million? Mr. Plunkett: --- I refer to him for the numbers. But the $28 million dollars, if we don’t have the $28 million dollars, you stop building. That’s just the, there’s no cash to build the building with. Mr. Owens: Right, but that’s a county commission problem not a URA problem. So what I’m saying is, is there any, you know, Mr. Chairman, you know, my point is that the vote’s in eight weeks. It’s in a couple of months. The question is or is construction going to stop inside of those eight weeks if we don’t issue these bonds or vote today to issue them. Can we wait until the SPLOST vote and then take up this revenue bonds once we have a revenue source? I understand they’d be coming out of the General Funds is basically because they’re backing it but I talked to both of my commissioners and that is not something that seems that they want to do. In other words let’s say if it was for SPLOST we issue the bonds and the SPLOST vote fails won’t they have to float that $2 million dollars or $3 million dollars for the twelve months anyway? In other words if the SPLOST fails if we vote and we start issuing these bonds and st borrow the $28 million is that payment not going to happen on October 1 anyway? 19 Mr. Plunkett: Yes. Mr. Owens: That’s my point. So if we, is it going to be --- Mr. Schroer: The revenue to pay that about would be from the Capital Outlay Fund. Mr. Young: Mr. Chairman, if I may. I probably know too much about what goes on in government but I can appreciate ya’ll looking for creative ways to fund this stuff. But, from somebody’s who’s been in the hot seat I don’t believe that you can rob from the capital budget to pay bonds. You have too many critical equipment needs and other needs that are included in that capital budget that you don’t need to keep deferring because you’re just going to get behind doing that. Now it’s not an issue if the SPLOST passes and then the bonds are taken care of. But what concerns me and I talked to one of my commissioners today and that is the city is potentially on the hook for $2.921 million dollars a year up to that much to service this debt. And I asked the commissioner I said well if SPLOST fails, do you have an extra $3 million dollars that you can service this debt. And he said he did not believe that that they have it. And I don’t know if the commissioners actually had that discussion what we’re going to do if the SPLOST fails. And as a steward in this case of public funds I just don’t feel that I could put the commission in a position of burdening them with a potential $3 million dollar a year debt not knowing whether they were going to have the resources to pay that off. I don’t think that’s fair to the commission and I don’t think it’s fair to the taxpayers in this city. Now I don’t have a problem with the bond issue. I don’t have a problem with the documents, everything looks fine to me. I just have a problem with the timing and I think we ought to give the people a chance to thst speak on May 20. If they say yes let’s meet on the 21 and approve the bonds. Mr. Ingram: Brad and if Larry doesn’t have anything to say we’re going to take this issue up. Mr. Owens: Mr. Chairman, I’d like to make a motion that we postpone the vote on Item th 3, table the vote on Item 3 until after the SPLOST vote on the 20. Mr. Ingram: We have a motion to table the vote on the bond resolution until after May. Is there a second? Mr. Young: I’ll second it. Mr. Ingram: Okay, it’s been moved and properly seconded we table the action on the approval of the bond resolution and the intergovernmental agreement. Any more discussion, let’s limit it. All those in favor of the motion vote aye. Opposed nay. We will table it. Okay, next up is setting up our next meeting. Jim, what --- st Mr. Young: It’s on May 21. We need to be here either way. Mr. Ingram: Let me just say this. I think Bob and Brad and also I did also talk to Larry too and I’m not convinced they were 100% sure about the ramifications at least that’s what it 20 sounded like to me as to the special activity or special financing package that you guys put together. And I think this is the reason why the consensus is to wait. And I think if we’re going to err on the side of being conservative and I think this, I don’t want this to sound like we are an obstacle to progress or even trying to get in the way of what the government is doing in renovating this building. The building needs renovation, it’s just that I think the timing the timing number one and to pull funds that can go to cars, trucks for the police and this type of thing I think we all agree is somewhat suspect. And I don’t think we want our names attached to that. Mr. Plunkett: Mr. Chairman, if I may, the difficulty that you’re putting Finance in the th county commission is this, is that if the let’s for arguments sake you wait until May 30 or May st 20, 21 to vote on this and the SPLOST package fails for some other reason, then this board will be back to the same position of would it then agree to use that 1.7 mil which is then used as the backup. Mr. Young: Well, then I think that’s an appropriate time for us to have a discussion with the Commission --- Mr. Plunkett: And the point of that --- Mr. Young: --- about what they’re willing to do. I don’t think it’s up to us to make a decision (inaudible). Mr. Ingram: Just one second. I think realistically we need to go back and talk to our Commissioners and to make sure that we’re on the same page because obviously I thought they had vetted the process and had approved and then we’re going to be purely the conduit. But the conversation I had, the conversation that Bob had, the conversation Brad had, the conversation Larry had there seems to be some misunderstanding or confusion. And let me just say we might th vote earlier than May 20 but I say we need to caucus again with our Commissioners. I think that would be the appropriate thing to do even if we met again next week if we had to. After having a conversation with the Commissioners and then bring this board back. I don’t want to etch in stone that we’ll wait until May, we may do it next week. We just ain’t doing it today. Mr. Plunkett: And truthfully, Mr. Chairman, I did not anticipate ya’ll voting today --- Mr. Ingram: Okay. Mr. Plunkett: --- up or down in light of the fact you all saw the documents Friday and things like that. I would ask that you talk to your commissioners between now and then. And if they have questions about alternative source or some of them may not necessarily like the choices. They sort of made the decision to go forth with the building and I would not want this board as you are saying the good steward issue. I would also not like this board to be seen as the st one who stopped the building of this because I think realistically that if we wait until May 21 or so it will suspend construction on the building. It’s not a threat, it’s just an observation. I think the county commission will have to; they won’t have the money to do it. 21 Mr. Young: Can you borrow from the fund balance and pay it back with the SPLOST to get you through for a couple of months? Mr. Plunkett: And these are things we’ll have to look at. But keep in mind and I feel like ya’ll are being sort of forced into a little bit of a corner. And we started this process trying to get new members to kind of go with this somewhere in July or August of last year. So you’re coming in on the brunt of it. We knew this was coming and we’re trying to get this into a position that we can do something and not be it at the end of the day on this. Now if your commissioners say okay I understood that or I didn’t say that well and please let me know and we’ll be happy to send out another meeting and start --- Mr. Owens: Mr. Chair, here’s my one concern. There’s a difference between a general obligation bond and a revenue bond. Correct? Mr. Ingram: Right. We can’t, we don’t have the authority to issue a general obligation bond. We don’t have that authority. Mr. Owens: So when we issue a revenue bond because of our intergovernmental agreements if the SPLOST didn’t pass you guys would have to come up with the money anyway, right? Right? Mr. Plunkett: That’s correct. Mr. Owens: Okay, so my point is is that I understand where you’re at however the commission would have to make that decision anyway. Mr. Plunkett: And they have. Mr. Owens: Right, they well --- Mr. Plunkett: They’ve approved they’ve been advised of the SPLOST is an option and the .71 mill is an option if that didn’t work. Mr. Owens: My, both of my commissioners I, you know, I’ve, you know, said but most of the commissioners I talked to today when I explained it to them what you just said based on what I’ve read was not their understanding. Now what I’m going to say is maybe it’s just a misunderstanding. It may be once we have this clarity, Mr. Chairman, we can come back and see these things. And I agree with you I just want to be sure that what we do we do right and we do right for the right reasons. And that’s all. Mr. Ingram: I think we all concur that’s what we’re going to do going forward is to caucus with our commissioners again and be at beck and call, you know, whether that’s next week it could be. One of the things I don’t want you to think that we’re etched in stone for May. It might be depending on what we get from the council, from the commission. I think the general consensus at the table here is it seems the commissioners were not fully let on all the 22 procedures on how we’re going to do the financing. So that’s what we need to discuss with them. Mr. Young: Sometimes we have to protect the Mayor and the Commissioners from these things. Mr. Ingram: We’ve already voted and that’s where we are. Do we have any other business to come before this board? Jim, setting our next meeting keeping in mind now after if you would if each of you after talking to your commissioners get back and talk to me and then I’ll caucus with Jim. And then if there needs to be a called meeting then we could facilitate. Is that all right? Mr. Plunkett: Well, Mr. Chair, that was for two different purposes. One was potentially for Mr. Wheeler. He is going to provide the dates. The other one was the pricing of these bonds which is now, you know, a moot issue as far as that goes. So I --- Mr. Ingram: Maybe temporarily. Mr. Plunkett: Well, let’s move for today --- Mr. Ingram: Right --- Mr. Plunkett: --- set a date for April 1 to price the bonds. And, you know, potentially if ya’ll caucus with the commissioners who recommended you to the Mayor. And by the way they do not appoint you directly. The Mayor nominated ya’ll and it was approved by the board. We will, you know, Mr. Chair, if you have reason to believe that there are, there’s the will of this body to move forward I’ll certainly get a notice sent out to the media. Mr. Ingram: I would just encourage us to do it as quickly as you can and try to come back with a consensus as to, you know, what in fact came up after the conversations with the commissioners. I’d ask you to do that quickly if you can. Mr. Plunkett: Okay. Mr. Ingram: Meeting dates. Any called meeting obviously we’ll communicate post haste. Any other business to come before this body? Anything else, Jim? Mr. Plunkett: I’m good. Thank you, sir. Mr. Ingram: Meeting adjourned. ADJOURNMENT: There being no further business, the meeting was adjourned. Nancy Morawski Deputy Clerk of Commission 23 CERTIFICATION: I, Lena J. Bonner, Clerk of Commission, hereby certify that the above is a true and correct copy of the minutes of the meeting of the Urban Redevelopment Agency held on March 3, 2014. __________________________________ Clerk of Commission 24