City Applying for Permits Before Bond $ Comes Through

 

Florida Department of Environmental Protection Bob Martinez Center 2600 Blair Stone Road Tallahassee, Florida 32399-2400

 

Rick Scott, Governor   Jennifer Carroll, Lt. Governor   Herschel T. Vinyard Jr., Secretary

Permit: Water - Domestic Wastewater Collection/Transmission System
Project name: MOUNT OLIVE TO POLK CITY...
Location id: 266369
Location name: CITY OF POLK CITY INTERIM WWTF FLA489093
Address: Not available
County: Polk
Application number: 266369-007

For further information, please contact the Southwest District permitting office in Temple Terrace at (813)632-7600

Permit: Water - Domestic Wastewater Type II Wastewater Treatment Plant Permit
Project name: POLK CITY INTERIM
Location id: FLA489093
Location name: Polk City, City of Interim
Address: Not available
County: Polk
Application number: FLA489093-002

For further information, please contact the Southwest District permitting office in Temple Terrace at (813)632-7600

Commission Won't Raise Property Taxes, But Will Raise Fire, Garbage Fees

Commission Won't Raise Property Taxes, But Will Raise Fire, Garbage Fees

Polk City Manager Wants Employee Raises

Polk City Manager Wants Employee Raises

Increase in Polk City Tax Rate Proposed

Increase in Polk City Tax Rate Proposed

Kevin Bouffard, from the Ledger, Check Your Math!

Kevin Bouffard, you state in your article Economic Turmoil Has Upside for Polk City that,"The financial turmoil in Washington, D.C. and the world stock markets saved Polk City $7 million over the next 30 years." 

When calculating the savings you need to figure the principle amount of the bond, approximately $10.3 Million, using a standard amortization calculator, at the new 4.97%, compared to the previous 5.25%, over the 30 year period.  Per my calculations, the actual savings due to the interest rate change is only $645,126.76 in interest over the entire life of the loan.  Comparing the principle loan amount plus interest on the $10.3 M bond over the life of the loan went from $20,677,332.46 down to 20,032,205.70.  This new interest rate also reduces the annual payment by $21,500.23, making the new portion of the annual payment for this bond to $667,744.19. 

The additional 3 existing loans that are not being refinanced are obviously not being impacted by the new rate on the new bond, so no savings can be applied to that debt.  Lumping all three of these loans together for simplicity, the principle amount is roughly $4,446,925.17, after the interest this amount increases to $6,456,549.60.  The annual payment for these 3 combined loans is roughly $218,528.00.

When you add the new bond total debt at the new interest rate, $20,032,205.70, to the debt not being refinanced, $6,456,549.60, you still get a total debt of $26,488,755.30, with a total debt annual payment of $886,272.19.   The city's annual payment will increase from the current $821,000, by $65,272.19 annually.  Remind me again, how we are cutting expenses and lowering our annual payment!

Kevin, your article states, "That pushed down total principal and interest over the 30-year bond term to $19.4 million from $26.3 million estimated previously."  For the life of me, I cannot figure out how you could possibly have your calculations come up with this much difference unless somehow you are adding in debt that is not being refinanced when calculating your savings.  That is obviously not correct.  Can you please print a correction to your article with more accurate savings numbers reflected?  Your article over-estimates the savings by roughly $6.4 Million.  This mis-information to the public needs to be corrected.

Economic Turmoil Has Upside for Polk City

Economic Turmoil Has Upside for Polk City

Planning Commission Agenda August 16, 2011

Planning Commission Agenda August 16 2011

This meeting is scheduled for next Tuesday at 6:00 PM.  They will be considering changing zoning from commercial to industrial on a 3.86 acre parcel located on Commonwealth Ave and Palmetto Lane E.

August 15th Budget Workshop Agenda

August 15, 2011 City Council Budget Workshop Agenda

This workshop is scheduled for 6:00 PM

Lakeland Electric Smart Meter Opt-Out Considered

Opt-Out Plan for Meters Considered

Polk City Gets Final $10.5 Million Bond Approval

Polk City Gets Final $10.5 Million Bond Approval

The Loan Document - Finally

RESOLUTION NO.2011‐07 

Polk City Council to Vote on Bond Approval

Polk City Council to Vote on Bond Approval

Responses to The Ledger's Kevin Bouffard's Inquiries

Hello, Kevin.  

Ms. Lawson is not considering the interest on the additional monies above and beyond the $10 M, i.e. the $269,000 for insurance on the bond. This too, will be financed over the term of the loan, so this will be subject to finance charges and is not limited to the lower figures quoted in Ms. Lawson’s response below.  If this additional money was not going to also be financed, there would be no reason for having to make the most recent increase from $10 M to the $10.5 M in the principle amount of the bond.   Tom Cloud stated himself in the special city council meeting held on July 27th, that the increase in the bond principle amount was due to this fact.

In addition to the 2 options Ms. Lawson is presenting in her email below, there are other options that are not being considered.  

The city has not seriously considered taking up the very generous offer from the Polk County officials to take back the Mt. Olive Utility system.  This offer has been made by the county and rejected by city officials on more than one occasion, and may still be on the table.  This will reduce the city’s required utility improvement expenses there.  Not to mention, if this utility asset is returned to the county, the county will likely renegotiate the remaining debt on this purchase, currently financed at 11%, resulting in a much more favorable deal for the city, if the county doesn’t forgive this debt entirely.

The way the city has been operating since the new administration has taken over, there have been claims of reducing operating expenses.  This does not appear to be the case when all is said and done, due to the fact that the overall debt of the city increased when the most recent audit came out.  Although, several major expenses were cut in police services and administrative headcount, additional expenses incurred from numerous studies, outsourcing, and hiring experts has appeared to not only have canceled out any savings, but has actually increased overall expenses.

In this tough economy, Polk City is not the only municipality to feel the financial pinch.  It has forced many small and large municipalities to file for bankruptcy and consider negotiating a solution with county and possibly other local municipality governments to work out the most favorable solution to resolve their debt crisis.  This will require officials to swallow their pride, but in the long run is the only reasonable solution.  Dissolution of Polk City may be a result of this bankruptcy process, but the future of this area would be much worse off if the debt is increased to the proposed levels of nearly $27 M and property values will continue to plummet at a much faster rate than they are already.  Standard & Poor’s rating of the US Federal Government’s debt was recent down-graded to an AA+ rating after raising the debt ceiling this week.  This rating has never been decreased below AAA until now.  This rate decrease will have unprecedented negative impact on all U.S. debt including municipalities’ bonds, credit card debt, etc.  Increasing Polk City’s debt ceiling is not the best solution.

The Cardinal Hill plant situation may be better solved by working together with the county to come up with a short term solution and combine resources to come up with a more cost efficient long term solution. The Polk City tax base is too small to effectively support a full blown water and sewer utility without substantial expenses being passed on to the residents, who are already overburdened.  

If the city is willing to allow the county to take back Mt. Olive Utilities, the county may be open to negotiations regarding the outstanding $531,000 for the back impact fees.  Based on financial information as of 7/29/2011, the city has an approximate $820,963.21 combined balance in its accounts.  This balance does reflect the revenue of recently deposited utility revenues for July.  These account balances can be viewed in a report which I have attached.  

Lisa B. Shifflett Polk City Bank Balances as of 7-29-2011  -------Original Message------- From: Bouffard, Kevin Date: 8/5/2011 4:49:23 PM To: 'helppolkcityresidents@earthlink.net' Subject: FW: Polk City's Answers to Questions about $10.5 M Bond Ms. Shifflett, I am going to write about the exchange below, and I invite you to comment about Pam Lawson’s response or anything else in this exchange or the bond issue. Please respond by 3 p.m. Sunday. Thanks. Regards, Kevin Bouffard The Ledger Office: 863-422-6800 Fax: 863-422-2107 Cell: 863-797-5676  "The job of the newspaper is to comfort the afflicted and afflict the comfortable." -- Finley Peter Dunne, 1876-1936, syndicated columnist under the pen name "Mr. Dooley."  From: Pamela Lawson [mailto:Pamela.Lawson@mypolkcity.org] Sent: Thursday, August 04, 2011 4:26 PM To: Bouffard, Kevin Cc: Matt Brock Subject: RE: Polk City's Answers to Questions about $10.5 M Bond   Kevin, Here are the facts.   Option 1. Existing debt for FY12 forward, no new bond (P&I through life of loan) is $14,749.500.23.  Annual debt service payment $820,946.02 for FY 12.  Option 2. New bond, at $10,000,000 at 5.25% (estimated at this point because we still do not have exact figures), FY12 debt forward totals $26,334,180.19 (P&I through life of loan).   Annual debt service for FY 12 is estimated $894,352.07.  It is important to note that the principle was originally estimated to be as low as $9,750,000 at 5.25%, and was increased to the figure of $10,000,000, or more is because of the requirement for bond insurance of approximately $269,000.    It is important to note that the option number 1 calculation of existing debt and no new bond fails to consider and address required additional debt that would have to be incurred to fund required:  improvements at the Cardinal Hill waste water treatment plant and other required utility improvements totaling $1,370,001. ·         purchase of property ($850,000) for the same waste water treatment plant.  ·         impact fee debt to Polk County of $531,000 that must be paid.   Conclusion:  Additional debt would have to be incurred and added to option number 1 to fund these required projects if option 2, new bond, was not incurred.  Debt total in Option 1 fails to recognize that.      Pamela Lawson, Finance Director City of Polk City 123 Broadway Blvd SE Polk City, FL 33868 (863)984-1375 x 246 From: Bouffard, Kevin [mailto:kevin.bouffard@theledger.com] Sent: Thursday, August 04, 2011 3:08 PM To: Pamela Lawson Cc: Matt Brock Subject: FW: Polk City's Answers to Questions about $10.5 M Bond   Ms. Lawson,  Do you differ from the figures cited in this post, presumably by Lisa Shifflett? I guess the bottom line is whether the bond debt and non-bond debt annual payments add up to $920,528 or to $702,000, as you mentioned in the meeting.  **** Adding these 3 remaining annual payments totaling $218,528 to the new $10.5 M bond debt annual payment of roughly $702,000, will bring the annual debt payment to roughly $920,528. According to Pam Lawson and Attorney Tom Cloud in the meeting on July 27th, the current debt payment per year is $821,000. If my calculations are correct, buy adding this new debt to the remaining 3 debt items not being refinanced, the city's annual payment will INCREASE BY $99,528 PER YEAR. The whole reason the city has been trying to push this refinance was to LOWER the annual debt payments to allow the city to "save" money. If the annual payment is that much higher, how is the city saving any money anywhere? Why are they increasing the debt by nearly 3 fold and burdening the current residents and the next generation? They keep blaming the previous administration for the financial mess the city is in, but this one bond move will make the previous debt mess look like child's play. WHAT ARE THEY THINKING?!?!?! ******  Regards, Kevin Bouffard The Ledger Office: 863-422-6800 Fax: 863-422-2107 Cell: 863-797-5676 "The job of the newspaper is to comfort the afflicted and afflict the comfortable." -- Finley Peter Dunne, 1876-1936, syndicated columnist under the pen name "Mr. Dooley."

August 8, 2011 City Meeting Agenda

August 8th, 2011 Agenda

This regularly scheduled city meeting will take place at 7:00 PM on Monday.

They will have the second public hearing reading of the $10.5 M bond as well as a long list of new business.  See the link above for the details.

Polk City's Answers to Questions about $10.5 M Bond

City of Polk City

Lisa Shifflett’s Public Records Request made on 07/28/11

08/01/11

What existing debt items are not being refinanced into this $10.5 M bond? 1) The 2007 USDA bond for the construction of the Polk City Government Center, 2) The DEP loan, and 3) The Old National lease for the trucks.

What is the approximate balance of that remaining debt not being refinanced, including interest?

Current debt should be determined by the principal amount only, as that would be the amount due if we were to pay the loans off today. Per your request I have listed the balances  for the principal debt only, and then the principal and interest together for each.

Just the principal without any interest is 1) The 2007 USDA bond = $1,643,641.00, 2) The DEP loan = $2,764,300.18, and 3) The Old National Lease for the trucks = $38,983.99

Balances including principal and interest are 1) The 2007 USDA bond = $2,755,499.09, 2) The DEP loan = $3,659,953.51, and 3) The Old National Lease for the trucks = $41,097.00.

In addition to the approximate $702 K annual payment on the proposed $10.5 bond, what additional annual payments will be required on the remaining debt service not being included in this refinance? 1) The 2007 USDA bond = $102,089.00/year to FY37, 2) The DEP Loan = $100,000.00/year to FY14 and then increases to $174,208.00/year to FY33, 3) The Old National lease for the trucks = $16,439.00/year to FY13, and then $8,219.00 in FY14.

**** Adding these 3 remaining annual payments totaling $218,528 to the new $10.5 M bond debt annual payment of roughly $702,000, will bring the annual debt payment to roughly $920,528.  According to Pam Lawson and Attorney Tom Cloud in the meeting on July 27th, the current debt payment per year is $821,000.  If my calculations are correct, buy adding this new debt to the remaining 3 debt items not being refinanced, the city's annual payment will INCREASE BY $99,528 PER YEAR. The whole reason the city has been trying to push this refinance was to LOWER the annual debt payments to allow the city to "save" money.  If the annual payment is that much higher, how is the city saving any money anywhere?  Why are they increasing the debt by nearly 3 fold and burdening the current residents and the next generation?  They keep blaming the previous administration for the financial mess the city is in, but this one bond move will make the previous debt mess look like child's play.  WHAT ARE THEY THINKING?!?!?! ******

What is the approximate total debt figuring in the remaining debt not being refinanced, plus the new $10.5 million bond debt plus interest? Using my balances from the 2^nd question above plus Lisa’s amortization given to us at the meeting on 07/27/11, the total = $27,500,335.66. **I used Lisa’s total payments for 30 years = $21,043,786.06 for the $10.5mil bond calculation, as I (Pam Lawson) have not done any of my own calculations on that amount as I have not received any documentation showing that the debt will in fact be up to that amount yet. All I know at this point is that the amount is set not to exceed $10.5mil.

Are there any restrictions on the use of these funds to pay off the impact fee monies, plus penalties, owed to the county, similarly like were stipulated in the proposed BB&T deal that fell through last year? The past due impact fees due to Polk County will be paid for by the new bond. I am not aware of any penalties due to the County. As far as restrictions, the bond has already been designated to pay off certain loans and to fund certain projects.

Regarding the impact fee money owed to the county: What is the current amount owed, including penalties, if any?  The paper has printed some information on this issue that implies there may be more money due now, due to some penalties on top of the roughly $500 K that was originally owed.  Is this correct?  If so what are the terms the county is now requesting? $531,198.90 is the amount past due for the Polk County impact fees. I am not aware of any penalties. We are not aware that the County is requesting any terms.

Pamela Lawson,

Finance Director

(answers in red)