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CRA MEETS
SunTrust Loan Update
07 July 2015
 
 
Meeting Specifics:
 
The Cedar Key City Community Redevelopment Agency met at 6 pm on Tuesday, July 7, 2015, at City Hall.
 
All CRA members and staff were in attendance.
Norm Fugate, City Attorney, Police Chief Virgil Sandlin, Fire Chief Robert Robinson, Public Works Director Bill Crandley, City Clerk Teresa George, Clerk’s Assistant Michael Hancock, Planning & Development Administrator Nicole Gill.
In the audience were: Leslie Valen, John McPherson, Chris Topping, Jeri and Bob Treat, Allison Nelson, Frank Offerle, Galina and David Binkley.
 
Public Comment
None
 
Storm Water & Sewer Maintenance Update
PWD Bill Crandley stated that the storm drains are being worked on but the progress is going slowly due to the high tides that have been occurring lately. The drains are being maintained as much as allowed by the tides. Some are affected more than others. The PWD crew will need to manually shovel the sand out of the one of the drains and replace the drain. Another drain needs to be replaced and Crandley is talking with DEP in Jacksonville and is hopeful that they will come up with some money and replace the drain. Maintenance upkeep is going on monthly.
 
SunTrust Bond Payments
Chairman Nelson turned the meeting over to the City Attorney Norm Fugate who gave a short background on the CRA/SunTrust bond and an update on the meetings and correspondence with SunTrust.
 
The SunTrust Bond is a revenue bond which is a loan based on revenue that the CRA receives from TIF (Tax Increment Fund). The bonds are limited to only being repaid by the revenue that the CRA receives in the form of TIF.  The CRA has no obligation to derive funds from any other source to repay the bond.  The city, itself, has no obligation to repay these bonds from any other source and it would be improper to designate any other source to repay these bonds.  The city does not have any liability as to the repayment of the note.

The bond was established in 2007 to fund certain city projects and it requires semi-annual payments which now exceed the TIF being received. We will not be able to make the full payment in October.
 
Through discussions between SunTrust, and Attorney Fugate and Chairman Nelson, SunTrust has submitted an amended loan agreement that increases the interest rate, extending the loan to 2045. 
 
Fugate asked the Board for direction in responding to the amendments submitted by SunTrust.
The discussion ranged from asking for a lower interest rate, the city having to absorb the CRA’s $100,000 maintenance budget, to taking a wait and see stance by not responding to SunTrust’s latest proposed loan amendment.
 
Fugate asked the commissioners if they had done any calculations as to how many more millions of dollars the amended loan, with increased interest rate and new 30-year term, would cost the city.  No clear figure could be provided.
From the audience, resident Jeri Treat spoke up and provided calculations. Based on the new monthly payment over a 30-year term, it would cost the CRA over $12,000,000 dollars. This would be an increase of $2,000,000 more than the original payoff.
 
After more discussion and no consensus on a direction, Heath Davis made the motion "to do nothing."  It was quickly seconded by Sue Colson.  The motion was discussed and, after a few comments, by the members and a clarification by Davis of "to do nothing” meaning wait until we hear from SunTrust, the question was called. The motion passed 3 to 2, with Register and Nelson voting nay.
 
CRA Inclusion in the City Audit/Budget
The meeting was again turned over to Attorney Fugate.
He stated that presenting the CRA and its finances combined with the city’s finances in the audit by Purvis Gray & Company is appropriate. The CRA, as established by the city, is a dependent special district and is reported as a component unit of the city.
 
The audit does need some corrections and clarifications in references to the city in the Long-term Debt sections. The motion was made by Davis to send a letter to Purvis Gray asking for corrections to the audit clarifying the separation of the city from the CRA debts. The motion was seconded by Sue Colson and passed unanimously. The audit has not been approved by the CRA and will be brought up and discussed at the next CRA meeting.
 
The meeting was adjourned at 7:08 pm
 
 
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