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CLOSED CAPTIONING PROVIDED BY BUFORT COUNTY.
GET EVERYBODY TO TAKE THEIR SEATS.
AND WE CAN GO AHEAD AND CALL THIS, UH, TOWN COUNCIL WORKSHOP MEETING TO ORDER TUESDAY, APRIL 8TH, 2025.
DO WE HAVE AN AJO? UH, A MOTION TO ADOPT THE AGENDA, PLEASE? SECOND, SECOND.
ALL THOSE IN FAVOR? PLEASE IDENTIFY BY RAISING YOUR RIGHT HAND.
UM, MOVING ON TO THE WORKSHOP DISCUSSION, UH, BEACH REN NOURISHMENT FUNDING, UH, PROJECT FUNDING.
OUR FINANCE DIRECTOR, ADRIANA BURNETT.
SO MS. BURNETT, WE'LL TURN IT OVER TO YOU UNLESS, UH, MARK OR ANYBODY ELSE HAS SOME OTHER COMMENTS TO BEGIN WITH.
GOOD MORNING, MEMBERS OF COUNCIL AND GOOD MORNING COMMUNITY MEMBER AND EVERYBODY THAT IS LISTENING ONLINE.
I ACTUALLY HAVE TWO VERY IMPORTANT, UM, GUESTS THIS MORNING THAT I WOULD LOVE TO INTRODUCE.
WE HAVE MR. DAVID SHIP WITH AND ANDY SMITH.
THEY ACTUALLY ARE FROM FIRST TRY AND THEY ARE OUR NEW FINANCIAL ADVISORS FOR THE TOWN.
AND I WOULD LIKE FOR DAVID, IF YOU DON'T MIND, FOR TWO MINUTES, TALK ABOUT FIRST TRY AND SOME OF THE EXPERIENCE THAT YOU HAVE AS IT RELATES TO SURE.
THANKS VERY MUCH FOR INVITING US, UH, HERE THIS MORNING.
UH, I'M DAVID CHEATWOOD AND MY COLLEAGUE ANDY SMITH, UH, AT FIRST TRYING ADVISORS.
UH, WE ARE A FULL SERVICE FINANCIAL ADVISORY FIRM.
UH, SO WE'RE NOT A BANK OR A LENDER, AN UNDERWRITER.
WE'RE PURELY A FINANCIAL ADVISOR, WHICH MEANS WE SIT ON YOUR SIDE OF THE TABLE AND HELP YOU THINK THROUGH ALL THE DIFFERENT OPTIONS, UH, AND DECISIONS YOU HAVE.
UM, WE DO A LOT OF LONG-TERM FINANCIAL PLANNING, AND THEN IF YOU HAVE A FINANCING TO DO, WE TAKE YOU THROUGH THAT FINANCING PROCESS.
UM, OUR MAIN OFFICE IS IN CHARLOTTE, WHICH, WHICH IS WHERE I'M LOCATED, AND THEN ANDY'S IN COLUMBIA.
UM, AND WE WORK WITH YOUR PEERS ACROSS THE STATE.
WE WORK WITH LOCAL GOVERNMENTS, CITIES, COUNTIES, UTILITY SYSTEMS, UH, ALSO COLLEGES, UNIVERSITIES, UH, PRIVATE SCHOOLS, CHARTER SCHOOLS, HOSPITALS, ET CETERA.
UH, UM, I DO, I WORK PRIMARILY IN, ANDY DOES AS WELL WITH THE LOCAL GOVERNMENTS IN NORTH AND SOUTH CAROLINA, A LITTLE BIT IN GEORGIA AS WELL.
UH, BUT WE'RE HELPING THEM AGAIN THROUGH THIS LONG-TERM FINANCIAL PLANNING AND, UH, THROUGH THE FINANCING PROCESS.
WE, UM, WE WORK WITH, I THINK 16 OR 17 OF THE TOP 20 IN SOUTH CAROLINA IN TERMS OF POPULATION, UH, FOR CITIES.
AND SO WE WORK WITH ALL OF YOUR PEERS ACROSS THE STATE.
WE WORK WITH A LOT OF COASTAL COMMUNITIES AS WELL THAT HAVE UNIQUE ISSUES THAT THEY'RE, THEY'RE DEALING WITH.
AND SO WE'VE GOT A LOT OF EXPERIENCE THERE, UM, WORKING WITH YOUR PEERS THAT WE, WE BRING TO THE TABLE WHEN WE'RE TALKING THROUGH DIFFERENT IDEAS, UH, AND LOOKING AT YOUR DIFFERENT PROJECTS THAT YOU HAVE TO FUND.
SO, UH, THAT'S A LITTLE BIT ABOUT US.
HAPPY TO ANSWER ANY QUESTIONS YOU HAVE, HAVE THOUGH, ABOUT OUR FIRM.
I'M SURE WE'LL HAVE SOME QUESTIONS, BUT ANY QUESTIONS RIGHT NOW? GREAT.
SO LET'S START TALKING ABOUT THE VISION NOURISHMENT PROJECT.
I KNOW THIS IS NOT THE FIRST WORKSHOP THAT WE HAVE.
THIS IS A CONTINUATION OF THE WORKSHOP THAT WE HAD THAT WE STARTED, UH, PROBABLY A FEW MONTHS AGO.
AND THERE'S A FEW QUESTIONS STILL THAT I WANTED TO ANSWER THAT ARE STILL PENDING.
ONE OF THE THINGS THAT I WANT TO START BY SAYING IN THIS PRESENTATION, THIS PRESENTATION DOES NOT HAVE AN EXACT NUMBERS.
WHAT THAT MEANS IS THERE ARE ASSUMPTIONS.
FIRST ASSUMPTION IS WE DON'T KNOW HOW MUCH THIS PROJECT IS GOING TO COST.
SO WE ARE MAKING, RIGHT NOW, THE ASSUMPTION THAT IT'S GOING TO BE 47 AND A HALF OTHER ASSUMPTIONS THAT WE'RE MAKING IS AS IT RELATES TO INTEREST RATES.
AS YOU KNOW, OUR ECONOMY RIGHT NOW, OUR MARKET, WE DON'T KNOW WHAT'S GOING TO HAPPEN IN THE NEXT SEVEN YEARS.
WE DON'T KNOW WHAT'S GOING TO HAPPEN AT THE END OF THIS YEAR.
SO WE'RE MAKING A LOT OF ASSUMPTIONS AS IT RELATES TO THE INTEREST PAYMENTS AND THE INTEREST THAT WE ARE CALCULATING IN THIS PRESENTATION.
UH, WE ALSO MAKE ASSUMPTIONS AS IT RELATES TO ESTIMATING REVENUES.
UM, I MEAN, WE JUST WENT THROUGH THE TWO BY TWOS WITH COUNCIL TALKING ABOUT ESTIMATED REVENUES.
AGAIN, THIS IS OUR BEST ASSUMPTION BASED ON OUR HISTORICAL TRENDS.
SO I JUST WANTED TO PUT THAT OUT THERE BECAUSE THIS IS, THIS IS THE BEST INFORMATION WE HAVE AT THIS POINT IN TIME.
SO IF WE START WITH THE FIRST SLIDE, THE FIRST SLIDE IS IN, IN RELATION TO EXISTING DEBT.
SO WE TALK A FEW MONTHS AGO ABOUT HAVING A TWO BONDS OR TWO PAYMENTS THAT ARE CALLABLE BONDS.
WHAT THAT MEANS IS THAT WE HAVE THE OPTION, AND THAT OPTION IS GOING TO HAPPEN ON AUGUST 1ST TO POTENTIALLY CALL THOSE BONDS AND REDEEM
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THEM.ACTUALLY GO AHEAD AND PAY THEM OFF AND JUST MOVE THEM OUT OF THE WAY.
UM, THE AMOUNT THAT WE HAVE IS ABOUT $7.5 MILLION OF OUTSTANDING DEBT.
AND RIGHT NOW, THE INTEREST THAT WE HAVE IS ABOUT 5%.
SO WE ALSO HAVE SOMETHING, AND WE'RE TRYING TO COMPARE THIS, A SPECIAL OBLIGATION BOND THAT WE HAVE AGAINST, IF WE WERE TO UTILIZE $7.5 MILLION AND WE WERE TO INVEST THAT MONEY IN OUR SOUTH CAROLINA LOCAL GOVERNMENT INVESTMENT POOL.
AND BY THE WAY, THIS IS THE INVESTMENT TOOL THAT WE HAVE WITH THE STATE OF SOUTH CAROLINA.
WE HAVE THE OPTION OF INVESTING MONEY, AND WE DO, WE USE THEM A LOT.
WE INVEST OUR MONEY THERE AND WE GET, NORMALLY WE GET A VERY GOOD RETURN.
IF WE COMPARE THAT AGAIN, SOMETIMES WHAT BANKS ARE CHARGING, SOMETIMES THE SOUTH CAROLINA, WE CALL IT L-G-P-L-G, SOMETIMES WE GET, UH, A BETTER RETURN ON THE INVESTMENT IF WE DEPOSIT, IF WE USE THEM, UH, TO INVEST OUR MONEY.
IN THIS PARTICULAR EXAMPLE, WE UTILIZING 4.5600000000000005%.
SO IF WE WERE TO UTILIZE THE SAME MONEY, THE 7.5, WE DECIDE THAT WE DON'T WANT TO GO AHEAD AND PAY THAT.
WE WANT TO GO AHEAD AND LEAVE THE MONEY IN LEP.
THEN THE RETURN ON INVESTMENT, AGAIN, WE UTILIZING A, AN ESTIMATED NUMBER.
WE ARE THINKING THAT EVERYTHING IS GOING TO REMAIN COST CONSTANT FOR THE NEXT SEVEN YEARS.
SO THAT'S THE RATE THAT WE'RE GOING TO POTENTIALLY BE GETTING ON THE INVESTMENT OF $7.5 MILLION.
WHEN YOU COMPARE THOSE TWO RATES, THEN WE UNDERSTAND THAT IT'S MORE COST EFFECTIVE TO PAY OFF THE BOND WITH CASH NOW RATHER THAN LATER.
HOWEVER, I JUST WANT YOU TO MAKE AWARE THAT IT'S VERY CLOSE.
SO IT'S NOT THAT WE'RE TALKING ABOUT A BIG GAP BETWEEN THE TWO IS VERY CLOSE.
SO THE DECISION HERE IS MORE ABOUT HOW COMFORTABLE DO YOU FEEL ABOUT PAYING $7.5 MILLION IN CASH NOW, OR DO YOU LEAVE THE MONEY AND WE INVEST THE MONEY CONSIDERING THAT THERE IS NOT A BIG GAP BETWEEN THE TWO.
I KNOW IN THE PAST I HEARD FROM SOME OF YOU SAYING THAT IF YOU WANT TO DO SOMETHING NEW, YOU WANT TO START FRESH, THEN IT MIGHT BE BETTER FOR YOU TO GET THAT OUT OF THE WAY.
SO YOU DON'T HAVE ANY SPECIAL BONDS OUT THERE.
SO THAT IS AN OPTION AND A DECISION THAT NEEDS TO BE MADE, UH, FOR YOUR INFORMATION.
ONE THING THAT I WANT TO MAKE YOU AWARE, AND IN OUR BUDGET PROPOSAL THAT WE'RE GOING TO BE PRESENTING TO YOU IN MAY, UH, WE DO HAVE THE CALLABLE BONDS RIGHT NOW, UM, AS SOMETHING THAT WE'RE GOING TO GO AHEAD AND PAY OFF AND GET OUT OF THE WAY.
HOWEVER, BASED ON THE DECISION THAT YOU MAKE TODAY, THEN WE CAN EITHER UPDATE THAT NUMBER IN OUR BUDGET THAT THAT IS GOING TO BE PRESENTED IN MAY, OR WE CAN JUST GO AHEAD AND LEAVE IT AS THIS.
SO ONE THING THAT I DO WANT TO MENTION TOO, UM, MY GOAL TODAY, AND THIS IS SOMETHING THAT I WANTED TO START SAYING IN THE PRESENTATION, MY GOAL TODAY IS TO GET GUIDANCE FROM YOU AS IT RELATES TO THIS BISHOP REN NOURISHMENT, UH, AND GUIDANCE IN TERMS OF THE DECISIONS THAT ARE MADE AS IT RELATES TO BISHOP REN NOURISHMENT.
HOW WE'RE GOING TO PAY FOR THIS AFFECTS OUR BUDGETS FOR FISCAL YEAR 26.
SO EITHER YOU TALK ABOUT PAYING EVERYTHING IN CASH, A HUNDRED PERCENT.
I HAVE SEVERAL OPTIONS THAT I WANT TO PRESENT TO YOU TODAY.
WE HAVE THE 70 30 WHERE WE PAY 70% IN CASH AND WE FINANCE 30.
WE HAVE 60 40 WHERE WE PAY 60% IN CASH, AND THEN WE FINANCE 40, AND THEN WE HAD THE 50 50 OPTION WHERE WE ACTUALLY PAY 50 AND FINANCE 50 QUESTIONS.
SO FAR, COMMENTS? MARK, YOU WANTED TO SAY SOMETHING? ALL I WANNA SAY IS WELL, THANK YOU ADRIANA.
I JUST WANNA SAY, YEAH, THAT IS ONE OF THE SEVERAL QUESTIONS WE WILL ASK TODAY ABOUT PAYING OFF THE CALLABLE OR NOT PAYING OFF THE CALLABLE.
I APPRECIATE THAT ADRIANA SAID IT'S CLOSE, RIGHT? AND, BUT LET'S HOLD OFF THAT ANSWER UNTIL WE GET THROUGH THE PRESENTATION AND CIRCLE BACK.
WE'LL COME BACK TO YOU AND ASK YOU THOSE QUESTIONS.
THE NEXT SLIDE IS CASH VERSUS DEBT FUNDING.
SO AGAIN, WE ARE MAKING ASSUMPTIONS HERE ON THE RATE.
SO WE'RE SAYING THE, OUR PROPOSED SPECIAL OBLIGATION BOND, IF WE WERE TO ISSUE A NEW ONE, WE'RE SAYING THAT OUR RATE IS GOING TO BE ABOUT 3.35%.
AND AGAIN, WE'RE MAKING THE ASSUMPTION THAT IT'S GOING TO BE A SEVEN YEAR BOND.
AND WE, THE SEVEN YEAR CAME FROM, YOU KNOW, AS WE'RE THINKING ABOUT REN NOURISHMENT, WHEN IS THE NEXT FISHER
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REN NOURISHMENT PROJECT GOING TO TAKE PLACE? THE, UH, THE BISHOP NOURISHMENT BOND THAT WE HAD IN 2017.WE ASSUME THAT IT WAS GOING TO BE A 10 YEAR PLAN, BUT NOW WE REALIZE THAT WE NEED TO DO THAT VISION REN NOURISHMENT PROJECT SOONER RATHER THAN LATER.
SO WE'RE MAKING THE ASSUMPTION THAT IT WILL TAKE ABOUT SEVEN YEARS BY THE TIME WE HAVE TO DO OUR NEXT VISION REN NOURISHMENT PROJECT.
THAT'S WHERE THE SEVEN YEAR CAME ABOUT.
SO AGAIN, IF WE'RE THINKING ABOUT L GB, AGAIN, INVESTING THAT MONEY AT THAT FOUR POINT 56% RATE, THEN THE QUESTION IS THE INVESTMENT RATE IS GREATER IN INTEREST RATE ON BONDS, AND IT'S MORE COST EFFECTI TO BORROW FOR PROJECTS.
SO LET ME GO INTO THE SCENARIO SO I CAN EXPLAIN THIS BETTER.
UH, ONE THING BEFORE I GET THERE, ONE THING THAT I ADDED TO THIS AND, AND I HAVE SOME CHALLENGES AS IT RELATES TO PRESENTING THIS SLIDE, BUT I'M PRESENTING IT TO YOU JUST TO GIVE YOU A VERY HIGH LEVEL OVERVIEW OF IF WE WERE TO INVEST $47.5 MILLION, ASSUMING THAT OUR INTEREST RATES STAY CONSTANT, WHICH KNOW THAT INTEREST RATES ARE NOT GOING TO STAY CONSTANT, BUT WE'RE MAKING THE ASSUMPTION THAT THEY'RE GOING TO STAY CONSTANT.
SO IN SEVEN YEARS, IF WE INVEST 47 MILLIONS AND A HALF, THEN THE RETURN ON INVESTMENT CAN POTENTIALLY BE $17.4 MILLION.
THIS IS ASSUMING THAT WE DEPOSIT, WE INVEST THIS MONEY.
THERE'S SOMETHING THAT I DO WANT YOU TO BE AWARE OF THIS, THIS IS SOMETHING THAT BOTH DAVID AND ANDY HELP US PUT TOGETHER.
BUT ONE THING THAT IS MISSING IN THIS PRESENTATION HERE IS THAT WE DO NOT HAVE FISCAL YEAR 26 ESTIMATED REVENUES IN THESE NUMBERS.
SO THE BALANCE THAT YOU SEE AT THE END WHERE IT SAYS RESULTING FUND BALANCE, THAT $12 MILLION, 3 21, 6, 5 6 THAT YOU SEE IN THE FIRST SCENARIO DOES NOT INCLUDE FISCAL YEAR 26 ESTIMATED REVENUES.
THE FISCAL YEAR 25 NUMBERS DO INCLUDE THE ESTIMATED REVENUES DO INCLUDE EXPENDITURES THAT WE'RE PLANNING TO ASSUME FOR THE REMAINING OF FISCAL YEAR 25.
SO I JUST WANTED TO MAKE SURE TO BE AWARE WHEN YOU'RE THINKING ABOUT MAKING DECISIONS AND UTILIZING THIS ENDING BALANCES.
I HAVE ANOTHER SLIDE LATER ON THAT SHOWS THE BALANCE, THE ENDING BALANCE AS OF FISCAL YEAR 26 WITH REVENUES, WITH FISCAL YEAR REVENUES, ESTIMATED ESTIMATED REVENUES IN THAT NUMBER.
SO IF WE LOOK AT THE 70 30, UM, WE'RE SAYING AGAIN THAT 70% WE'RE GOING TO GO AHEAD AND FINANCE, UM, UH, EXCUSE ME, PAY IN CASH, 70%, AND THEN WE'RE GOING TO FINANCE 30%.
SO IF WE LOOK AT THESE NUMBERS, UH, THE BORROWING OR THE FINANCES THAT WE WILL BE DOING IN THIS 70 30 EXAMPLE, WE ARE GOING TO BE BORROWING FOUR $14,250,000.
AGAIN, IF WE ASSUME AN INTEREST RATE COST OF 3.33, WE'RE SAYING THAT OUR PAYMENTS ON AN ANNUAL BASIS, BOTH PRINCIPAL AND INTEREST, IS ABOUT $2.3 MILLION.
SO AFTER SEVEN YEARS, WE ARE MAKING THE ASSUMPTION THAT THE COST IS GOING TO BE ABOUT $16.5 MILLION.
AGAIN, LOOKING AT THE 53 0 6 6 NUMBER, THIS IS OUR FISCAL YEAR, 2025, INCLUDING THE REMAINING REVENUES THAT WE HAVE FOR THE REMAINING OF THE YEAR, INCLUDING EXPENDITURES.
IF WE TAKE THE 7.495 NUMBER, WHICH IS THE CALLABLE BALANCE OUT, IF WE TAKE THE CASH, THE 70% CASH THAT WE'RE GOING TO PAY, WE'RE SAYING THAT THE RESULTING FUND BALANCE IS 12 MILLION THREE HUNDRED AND TWENTY ONE, SIX HUNDRED FIFTY SIX.
AGAIN, THIS DOES NOT INCLUDE THE ESTIMATED REVENUES FOR 4 26.
LET'S ASSUME TOO, AND THIS IS A DISCUSSION THAT WE'VE BEEN HAVING DURING THE TWO BY TWOS RIGHT NOW, OUR RESERVE NUMBER RIGHT NOW, OUR RESERVE NUMBER IS $12 MILLION UP TO $12 MILLION.
ONE OF THE THINGS THAT WE'RE PLANNING TO, TO, TO PROPOSE IN OUR FISCAL YEAR 26 IS TO MOVE THAT RESERVE NUMBER FROM BEACH PRESERVATION FEE TO $20 MILLION.
SO LET'S ASSUME THAT $20 MILLION IS THE, IS THE RESERVE THAT YOU APPROVE.
SO AGAIN, UM, I WILL BE TALKING LATER ON ABOUT, I'M NOT GOING TO COMPARE THE 20 WITH THE 12 RIGHT NOW, BECAUSE AGAIN, WE'RE MISSING REVENUES FOR 26.
SO IF WE MOVE TO THE SCENARIO NUMBER TWO IS THE 60 40, AGAIN, IN THIS CASE, WE ARE FINANCING $19 MILLION.
WE'RE UTILIZING THE SAME INTEREST COST OF
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3.33%, AND THEN THE PAYMENTS ON THIS ONE ARE ABOUT $3 MILLION.IF YOU LOOK AT YEAR AFTER YEAR.
SO WE'RE SAY WE'RE PROJECTING THE COST FOR A 60 40, UM, FOR SEVEN YEARS WOULD BE ABOUT 21.9.
AGAIN, THE SAME THING AS THE ONE BEFORE.
WE HAVE THE 53 NUMBER BALANCE.
WE TAKE THE COLORABLE BONDS OUT, WE USE THE CASH, WHICH IS THE 60%, UM, THAT WHICH IS A 28 AND A HALF.
THEN THAT LEAVES A $17 MILLION NUMBER.
IF WE MOVE TO A SCENARIO THREE, THIS ONE IS THE 50 50 OPTION.
SO WE ARE FINANCING, IN THIS CASE, $23,750 MILLION.
AGAIN, THE PAYMENTS HERE ARE A LITTLE BIT HIGHER THAN THE TWO SCENARIOS BEFORE, BUT ONE THING THAT YOU DO NEED TO TAKE INTO CONSIDERATION RIGHT NOW, WE PAY IN THE BONDS THAT WE HAVE RIGHT NOW IN THE TOWN, WE PAY ABOUT $3.9 MILLION.
SO THIS ONE IS A LITTLE BIT LOWER THAN WHAT WE ARE PAYING RIGHT NOW FOR OUR PITCH, UH, BONDS.
SO THAT WILL LEAVE US ABOUT THE COST FOR, FOR SEVEN YEARS WOULD BE ABOUT 27.4.
AGAIN, USING THE SAME NUMBERS AS, AS THE SCENARIOS BEFORE, WE HAVE A BALANCE OF 53.
WE TAKE THE COLORABLE BONDS OF SEVEN, 7.5.
THAT WILL LEAVE US A 21,821 NUMBER.
I WOULD SHOW THAT IN THE ANOTHER SLIDE.
THIS ONE IS, UH, SCENARIO NUMBER FOUR THAT WE ADDED.
AND BY THE WAY, WE ADDED THIS SLIDE.
UM, IT WASN'T IN THE ORIGINAL SLIDES THAT WE SENT TO YOU OVER THE WEEK AGO, SO YOU DO NOT HAVE THIS ONE.
THIS ONE IS BRAND NEW AGAIN, THIS ONE IS UTILIZING, UH, A HUNDRED PERCENT, A HUNDRED PERCENT CASH.
WE STARTED WITH THE SAME BALANCE OF 53.
WE TOOK OUT THE COLORABLE BONDS.
WE USED CASH TO PAY 47 AND A HALF.
THEN THE RESULTING FUND BALANCE IS A NEGATIVE 1.9.
AGAIN, THIS IS NOT INCLUDING THE REVENUES 4 26.
BEFORE I GO TO THIS ONE, LET ME GO TO THIS ONE.
THIS ONE IS WHAT I CALL A SUMMARY.
THIS IS BRAND NEW TO THE PRESENTATION AS WELL.
THIS IS A SLIDE THAT I JUST ADDED.
SO AGAIN, THIS IS COMPARING ALL THE DIFFERENT SCENARIOS THAT I JUST MENTIONED.
SO IF WE START WITH THE FIRST ONE, ALL CASH, THE FISCAL YEAR, UH, FISCAL YEAR, 25 YEAR END PROJECTED FUND BALANCE.
AGAIN, THIS IS A 53 NUMBER THAT YOU SAW PREVIOUSLY FOR ALL THE DIFFERENT SCENARIOS.
IF WE PAY THE COLORABLE BONDS, THAT WOULD BE A LESS THAN $7.5 MILLION.
IF WE PAY IN THE FIRST COLUMN IS UTILIZING A HUNDRED PERCENT CASH.
AND THE 70 30 WE PAY 33.2 5 0 60 40.
AND THE 50 50 WE PAY 23 AND A HALF.
AS YOU CAN SEE, THE FUND BALANCES WITHOUT PROJECTED FISCAL 26 REVENUES ARE THE SAME NUMBERS THAT YOU SAW IN THE PREVIOUS TABLE.
NOW, LET'S TALK ABOUT THINGS THAT ARE REVENUES OR POTENTIAL REVENUES TO US.
SO AS YOU KNOW, AND WE'VE BEEN TALKING ABOUT THIS FOR A WHILE, THAT WE HAVE SOME FEMA, POTENTIAL FEMA MONEY THAT WE CAN POTENTIALLY GET FOR PAST STORMS THAT WE HAD ON THE ISLAND.
SO WE ARE PROJECTING A $7 MILLION FEMA NUMBER.
I DO WANT TO MAKE YOU AWARE THAT THIS IS THE AMOUNT THAT WAS APPROVED BY FEMA.
IT DOESN'T MEAN THAT IT'S THE AMOUNT THAT WE ARE GOING TO RECEIVE FROM FEMA BECAUSE IT DEPENDS.
WE, OUR JOB IS TO SUBMIT TO THEM OUR EXPENSES, OUR RECEIPTS, AND IT'S THEIR DECISION TO MAKE.
DO THEY ACCEPT THAT EXPENSE, YES OR NO? SO WE WANT TO BELIEVE THAT WE WILL GET THE FULL $7 MILLION, BUT IT'S NOT A GUARANTEE YET.
SO I JUST WANTED YOU TO BE AWARE OF THAT.
YOU WANT TO ADD SOMETHING ON THAT? MM-HMM
AS IT RELATES TO THE FISCAL YEAR 26 REVENUES, THIS IS THE AMOUNT THAT IF IN THE TWO BY TWOS THAT WE HAD THIS WEEK, UM, THE ESTIMATED REVENUE THAT WE ARE EXPECTING FOR PITCH PRESERVATION FEE FOR 2016 IS $30 MILLION, SIX HUNDRED AND TWENTY FIVE, FIVE HUNDRED THIRTY SEVEN.
AND THIS IS THE SAME REVENUE AMOUNT FOR ALL THE SCENARIOS WE HAVE.
AGAIN, UM, ANOTHER COMPONENT TO THIS IS NO BENCH RENOURISHMENT, CIP PROJECTS THAT WE WILL BE PROPOSING IN MAY FOR YOUR
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APPROVAL.THESE ARE PROJECTS THAT ALSO ARE PAID OUT OF THE BEACH PRESERVATION FEE.
SO THAT AMOUNT IS ABOUT $1.3 MILLION.
AND THEN THE ESTIMATED ENDING FISCAL YEAR 26 FUND BALANCE THAT WE HAVE FOR ALL CASH IS $17 MILLION FOR 70 30 IS 31.6.
AND FOR 50 50 IS ABOUT $41 MILLION.
OKAY? SO THESE ARE THE ESTIMATED BALANCES.
NOW, LET'S THINK ABOUT THE RESERVES THAT WE DISCUSSED BEFORE THAT WE WOULD LIKE TO GET APPROVED BY YOU COUNCIL MEMBERS.
IF WE INCREASE OUR POLICY RESERVE FROM 12 TO 20.
IF I'M LOOKING AT THAT 20, AND I'M COMPARING THAT AGAINST THE ENDING, THE ESTIMATED ENDING BALANCE OF FISCAL YEAR 26, IT LOOKS LIKE WE WILL BE SHORT.
WE WON'T BE ABLE TO HAVE A RESERVE OF 20 IF WE DO ALL CASH.
IF WE DO THE 70 30 AND WE DO THE SAME COMPARISON, IF I'M LOOKING AT 31 VERSUS 20, SEEMS LIKE WITH THE 70 20, WITH THE 70 30 OPTION, WE HAVE ENOUGH MONEY TO RESERVE.
I MEAN, WE WILL HAVE ABOUT $11.6 MILLION LEFT.
IF WE DO THE 60 40, WE WILL HAVE A LITTLE BIT MORE.
SO 36 VERSUS 20, WE WILL HAVE ABOUT $60 MILLION LEFT.
IF WE DO THE 50 50, WE WILL HAVE ABOUT $21 MILLION LEFT ONCE WE DO THE RESERVE.
UM, SO THAT'S THE SUMMARY AS IT RELATES TO ALL THE DIFFERENT SCENARIOS.
UM, ONE OF THE THINGS THAT I I, I WANT YOU TO BE AWARE IS THERE'S SOMETHING CALLED A COVER RATIO.
AND THE WAY IT'S CALCULATED IS PLEDGE REVENUE DIVIDED BY DEBT SERVICE PAYMENTS.
I HIRED A DEBT SERVICE COVERAGE RATIO INDICATES A STRONGER ABILITY FOR THE TOWN TO COVER THEIR PAYMENTS USING OPERATING CASH FLOW.
AND AS YOU CAN SEE ALL THE DIFFERENT SCENARIOS, WE ARE ACTUALLY A VERY, AND I MENTIONED THIS BEFORE, WE ARE VERY PRIVILEGED AS A TOWN TO BE ABLE TO HAVE THE COVER RATIO THAT WE HAVE REGARDLESS OF THE SCENARIOS.
SO THAT MEANS WE HAVE ENOUGH MONEY TO PAY FOR OUR, UM, OUR DEBT.
AND THAT'S WHAT THIS REPRESENTS, THIS SLIDE HERE.
SO I WANT YOU TO BE AWARE OF OUR COVERAGE RATIO REGARDLESS OF THE OPTION.
THIS HERE IS VERY BUSY AND I APOLOGIZE FOR HOW BUSY THIS IS.
THIS ACTUALLY IS SOMETHING THAT WE WILL BE PRESENTING TO YOU DURING OUR CIP PRESENTATION.
SO WHAT WE NORMALLY DO IN FINANCE EVERY YEAR, WE LOOK AT ALL THE FUNDS THAT WE CAN USE TO PAY FOR OUR CIP PROJECTS.
AND IN, IN HERE, I'M, I'M GIVING YOU BASED ON WHERE WE ARE, AND THIS NUMBER IS A LITTLE OFF BECAUSE WE HAVE MADE SOME CHANGES TO OUR CIP SPREADSHEET SINCE LAST TIME WE CREATED THIS.
BUT JUST TO GIVE YOU A GENERAL IDEA, THESE ARE, WE'RE PROJECTING PROJECTS TO BE ABOUT $77 MILLION.
AND AGAIN, THIS NUMBER IS GOING, IS SUBJECT TO CHANGE.
BUT IF I'M LOOKING AT ALL THE PROJECTS THAT WE HAVE ALL TOGETHER AND I'M LOOKING AT ALL THE DIFFERENT FUNDS, THE FISCAL YEAR 26, PROJECTED ENDING BALANCE, THOSE ARE THE BALANCES THAT WE'RE PROJECTING TO HAVE AT THE END.
UH, ONCE ALL THESE PROJECTS ARE, UM, PAID FOR, THIS IS THE ENDING BALANCE.
SO IF I'M LOOKING AT THE BEACH FEE, THE ONLY THING THAT THAT 10.4 NUMBER DOESN'T HAVE IS A $7 MILLION FEMA NUMBER.
THAT'S WHY THAT 10 VERSUS THE 17 THAT I SHOW YOU BEFORE, IS THAT THE SAME.
BUT I JUST WANTED TO HIGHLIGHT THIS, THAT WE'RE NOT ONLY PAYING CASH REGARDLESS OF THE SCENARIO THAT YOU PICK, WE ALSO PAY IN CASH FOR OTHER PROJECTS THAT ARE NOT BINGE RENOURISHMENT PROJECTS.
AND RIGHT NOW, BASED ON THE NUMBERS THAT WE HAVE, WE'RE TALKING ABOUT 30, $31 MILLION IN CASH THAT WE WILL BE USING TO PAY FOR OTHER PROJECTS THAT ARE NOT DISH RELATED.
SO I JUST WANTED TO MAKE YOU AWARE, WE, WE KEPT TALKING ABOUT BISHOP RENOURISHMENT, BISHOP RENOURISHMENT, AND THAT'S NOT THE ONLY PROJECT THAT WE'RE FUNDING WITH CASH.
SO THIS, THIS IS ONLY FOR ILLUSTRATION PURPOSES.
SO YOU ARE AWARE THAT WE UTILIZING CASH SOMEWHERE ELSE AS WELL, OTHER THAN BEACH.
AND THAT'S THE END OF THIS PRESENTATION.
AGAIN, I, WE NEED YOUR DIRECTION COUNCIL MEMBERS AND ANY QUESTIONS THAT YOU MAY HAVE.
I HAVE OUR PROFESSIONALS HERE READY TO ANSWER ANY BOND FINANCING RELATED QUESTIONS THAT YOU MAY HAVE.
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ANY QUESTIONS? OKAY, THANK YOU.UM, SO I'LL OPEN UP TO COUNCIL MEMBERS FIRST FOR QUESTIONS, BRYSON.
UH, FIRST OF ALL, THANK YOU SO MUCH FOR ALL THE DETAILED FINANCIAL INFORMATION, UM, IN, IN THE NEW CHART, WHICH IS PAGE NINE, UM, WHICH INCLUDES A PROJECTED, UH, FY 2026 REVENUES.
UM, SO, UH, JUST IN, IN LOOKING AT THAT CHART, UM, AND AT THE DIFFERENCE THAT YOU WENT THROUGH DOWN AT THE BOTTOM, UH, WITH THE ESTIMATED FUND BALANCES MINUS THE FUND BALANCE POLICY, UM, AND, AND SO TAKING, UM, 70 30, IT'S 11.6 MILLION, UM, THAT WE WOULD HAVE, UM, IN ADDITION TO THE NEW FUND BALANCE PROPOSED OF 20 MILLION.
SO IF WE'RE LOOKING TO TRY TO, UM, INCREASE FUNDS FROM THE BEACH PRESERVATION FEE OVER THE NEXT SEVEN YEARS TO BE ABLE TO FUND THE NEXT, UM, BEACH RENOURISHMENT, IT WOULD SEEM AS THOUGH WE WOULD WANT TO HAVE A LARGE NUMBER OF THOSE REVENUES TO GATHER IN ADDITION TO THE, THE MINIMUM RESERVE BALANCE.
SO WE NEED 20 MILLION PLUS SEVEN YEARS TIMES THAT TO BE ABLE TO FUND THE NEXT NEXT B TREE NOURISHMENT.
SO THAT'S WHAT I'M LOOKING FOR IS, IS A WAY TO DO THIS THAT WE CAN CONTINUE TO PUT AWAY MONEY TO FUND THE NEXT BEACH TREE NOURISHMENT.
UM, SO I, I THINK, I THINK I UNDERSTAND IT THAT WAY.
UM, THEN, UM, I DO HAVE A QUESTION ON PAGE 10.
UM, THE LAST ONE, WHICH UM, INCLUDES, UM, WHAT IS CURRENTLY PROJECTED FOR, UM, OUR CIP PROJECTS.
UM, AND, UH, AS I UNDERSTAND IT, UH, THE CURRENT ESTIMATE IS AROUND 77 MILLION FOR, UM, CIP PROJECTS.
AND THEN YOU TAKE OUT THE 47 AND A HALF MILLION FOR BEACH RENOURISHMENT.
SO THAT'S ABOUT 30 MILLION IN CIP PROJECTS.
UM, SO I, I THINK IT'S IMPORTANT TO REMEMBER THAT NUMBER.
UM, THE ONE DETAILED QUESTION I HAVE ON THIS PAGE IS ABOUT THE STATE AT TAX COLUMN.
UM, AND, AND THAT IS WHEN YOU LOOK AT, UH, FY 25 PROJECTED ENDING BALANCE IS NEGATIVE 9.9 MILLION
SO, UM, AND I DON'T, UM, I DON'T KNOW WHETHER THAT'S REFLECTIVE OF THE TIMING OF WHEN WE GET STATE A TAX MONEY AND WHEN WE, UM, WHEN WE EXPEND THAT MONEY.
BUT, UM, WHEN YOU LOOK ON DOWN AT THE VERY BOTTOM, UM, AFTER WE HAVE THE CAPITAL PROJECTS, THERE'S STILL A NEGATIVE BALANCE AT THE END OF FY 26.
SO MY, MY QUESTION IS WHAT'S CAUSING THOSE NEGATIVE BALANCES IN THAT STATE? A TAX CHART? SO ONE THING TO, TO, UM, TO KNOW IS WHEN WE GET THE INCOME FOR ESTATE A TAX, THE WAY WE GET IT IS ON A CALENDAR BASIS, THE WAY WE WE ACCOUNT FOR IT IS ON A FISCAL BASIS.
THE OTHER ONE IS IN RELATION TO, AND ONE THING THAT WE ARE PLANNING TO BRING IN FRONT OF COUNCIL IS OUR POLICY IN RELATION TO ALLOCATION OF AT TAX.
AND A DECISION THAT HAS TO BE MADE IS HOW DO WE UTILIZE AT TAX MONEY? DO WE UTILIZE AT TAX MONEY? UM, NOT ONLY AS A COMBINATION OF CIP PROJECTS, COMBINATION OF THE A TAX MONEY THAT POTENTIALLY WE ALLOCATE TO THE DIFFERENT PROFITS AND ORGANIZATIONS THAT WE HAVE IN.
SO THAT'S SOMETHING THAT NEEDS TO BE TAKEN INTO CONSIDERATION.
UM, SO WE DON'T HAVE, DON'T HAVE THE NEGATIVES THAT WE HAVE.
'CAUSE RIGHT NOW, IF YOU LOOK AT THE NUMBERS, AND AGAIN, WE'RE LOOKING AT, WE'RE COMPARING APPLES TO ORANGES AS IT RELATES, THAT'S SOMETHING THAT NEEDS TO BE TAKEN INTO CONSIDERATION.
THAT'S SOMETHING THAT WE'RE NOT DOING HERE AND IT'S POTENTIALLY SUBSIDIZE THIS, THIS IS WHAT WE CALL THE TRANSFERS IN AND OUT, BUT RIGHT NOW I'M JUST SHOWING YOU THE BARE BONES WITHOUT ANY TRANSFERS, WITHOUT ANY RE CLASSES OF FUNDS.
SO, SO YOU HAVE A PICTURE OF, IF WE DON'T DO ANY OF THAT, THAT WOULD BE THE ENDING BALANCE.
SO BASICALLY, EXCEPT FOR STATE ATEX, ALL OF THESE, UH, WE CAN LOOK AT 'EM AND FEEL COMFORTABLE WITH FISCAL YEAR.
BUT WHAT WE REALLY NEED TO DO IS TO TAKE THE STATE ATEX FUNDS OUT OF HERE AND LOOK AT IT ON A CALENDAR YEAR BASIS.
AND I'M HEARING THAT ON A CALENDAR YEAR BASIS, WE'RE OKAY, IT'S NOT NEGATIVE.
THAT ALWAYS MAKES ME FEEL BETTER WHEN OUR NUMBERS ARE NOT IN THE NEGATIVE.
[00:30:01]
QUESTION ABOUT, UM, CHARTS.UM, NO, THAT'S THE ONE THAT I ASKED ABOUT.
UH, AND THAT IS THE NEW CHART SHOWING, UM, FY 26 FUND BALANCE WITH PROJECTED REVENUES SHOWING THAT WE CAN EXCEED, UNBALANCED AND STOCK MONEY AWAY FOR THE NEXT SPEECH.
UM, THERE'S MY QUESTIONS RIGHT NOW, MAYOR, UM, OTHER THAN, UM, I HAVEN'T HEARD A STAFF RECOMMENDATION YET AS TO WHICH ONE TO GO, BUT I'LL, I'LL HOLD THAT QUESTION IN ADVANCE TILL I HEAR OTHER QUESTIONS.
JUST, JUST FOR THE PURPOSE OF, UM, THE AUDIENCE AND THOSE WHO ARE WATCHING ONLINE, A COUPLE THINGS THAT WE'RE TRYING TO FIGURE OUT HERE IS THAT, UM, THE NEXT TIME THAT A BEACH BEER NOURISHMENT COMES AROUND, THAT WE AT LEAST HAVE THE FUNDS IN PLACE THAT IT COSTS US THE LAST TIME TO DO IT.
NOT SAYING NECESSARILY THAT WE'RE GONNA PAY CASH FOR IT NEXT TIME, BUT TO HAVE THOSE FUNDS READILY AVAILABLE BECAUSE WE KNOW IT'S GONNA BE AN ONGOING EXPENSE, BUT REALLY TO SHORE UP THAT ACCOUNT TO MAKE CERTAIN THAT FUNDS ARE THERE, WHETHER THEY'RE USED TO BORROW OR USED TO PAY CASH.
I JUST WANNA MAKE THAT CLEAR FOR EVERYBODY AS WELL, MR. HUNTER? YES.
SO, UM, I WANTED TO GO THROUGH WHAT THE DECISIONS ARE THAT WE WANNA TALK ABOUT AND WHERE I STAND ON THOSE DECISIONS.
SO THE FIRST ONE WOULD BE INCREASING THE MINIMUM FOR THE BEACH.
UM, RENOURISHMENT FUND BALANCE, CURRENTLY IT'S SET AT A MAXIMUM OF $12 MILLION AND YOUR PROPOSAL IN HERE IS TO SET IT AT A MINIMUM OF $20 MILLION.
UM, I AM IN AGREEMENT TO DO THAT.
UM, I THINK IT'S IMPORTANT THAT, UH, WE HAVE A STRONG RESERVING, UM, POLICY.
IT SETS US UP FOR SUCCESS IN CASE THERE'S SOME TYPE OF, UM, WEATHER RELATED INCIDENT IN BETWEEN OUR BEACH RENOURISHMENT.
UH, IT PROVIDES A SAFETY IN REGARDS TO THAT.
AND SO I AM COMFORTABLE WITH THAT.
ONE OF THE THINGS THAT YOU MAY WANNA CONSIDER IS HAVING SOME TYPE OF ECONOMIC ESCALATOR INCLUDED AS WELL, SO THAT, UM, YOU KNOW, IT REFLECTS THAT $20 MILLION TODAY ISN'T $20 MILLION 10 YEARS FROM NOW.
SO SOMETHING TO CONSIDER THERE.
SO I'M VERY MUCH ALIGNED WITH THAT, AND THAT IS A KEY DECISION THAT NEEDS TO BE MADE IN ORDER THEN TO PICK WHICH OPTION YOU KNOW, YOU'RE GOING FOR.
SO WANTED TO LET YOU KNOW WHERE I WAS ON THAT.
UH, NUMBER TWO, IN REGARDS TO THE STRUCTURE OF BONDING, I LIKE THE FACT THAT IT'S A SEVEN YEAR BOND AND NOT A 10 YEAR BOND.
UM, YOU KNOW, 10 YEAR BOND WAS WHAT WAS DONE LAST TIME WITH, UH, THE THOUGHT PROCESS THAT WE WOULD BE DOING BEACH DREAM NOURISHMENTS EVERY 10, 10 YEARS.
AND WE ARE SEEING AT LEAST, UH, OUR POSITION NOW IS THAT IT'S LESS THAN 10 YEARS.
SO LET'S ALIGN OUR, UH, BORROWING TO THE SCHEDULE OF WHEN WE THINK WE ARE GOING TO NEED TO RENOURISH AGAIN.
SO I LIKE THE IDEA THAT IT'S A SEVEN YEAR BOND.
UH, THE NEXT PIECE IS IN REGARDS TO, UH, WHAT PERCENTAGE OF, UM, DEBT DO WE WANT TO INCUR? AND I JUST WANNA MAKE IT CLEAR THAT I, UM, MY INITIAL POINT OF VIEW WAS TO PAY ALL CASH.
AND THAT'S WHAT I SAID AT THE LAST MEETING.
UH, BUT THAT WAS BEFORE WE HAD THE CONVERSATION REGARDING WHAT THE APPROPRIATE MINIMUM NEEDED TO BE.
AND WITH THE DECISION OF MOVING FROM 12 TO 20, THAT MEANS THAT THE ALL CASH OPTION DOES NOT WORK.
UM, SO I, SO NOW I AM LEANING TOWARDS THE 70 30 OPTION.
UH, THE REASON FOR 70 30 IS THAT IT DOES PROVIDE EXACTLY WHAT IT IS THAT WE, UM, REQUIRE IN THAT IT PROVIDES US FUNDS TO PAY FOR THE BEACH RENOURISHMENT.
IT ALLOWS US TO LIVE INTO THE $20 MILLION, AND THERE IS SOME EXCESS THERE FOR, UH, POTENTIAL PROJECTS, UH, THAT WE MAY NEED.
UM, IN ADDITION, UH, ONE OF THE THINGS THAT WE NEED TO THINK ABOUT IS, UH, TO COUNCILMAN BRYSON'S, UH, POINT, WE WANT TO SAY, AND MAYOR PERRY'S POINT, WE WANT TO SAVE MONEY TOWARDS THE NEXT SPEECH RENOURISHMENT.
AND THAT MEANS THAT, UM, SEVEN, EIGHT YEARS FROM NOW, WE NEED THE $20 MILLION OR THE INCREASED BECAUSE OF ECONOMIC NUMBERS, MORE THAN $20 MILLION PLUS THE COST OF THE BEACH RENOURISHMENT.
AND THE WAY WE'RE GOING TO FUND THAT IS THROUGH OUR ANNUAL BEACH RENOURISHMENT FEES THAT WE COLLECT EVERY YEAR, LESS OUR
[00:35:01]
MAINTENANCE COSTS, LESS OUR DEBT COSTS.SO IF WE HAVE MORE DEBT, WE'RE GONNA HAVE TO SUBTRACT MORE MONEY OUT OF WHAT WE COLLECT EVERY YEAR AS WE TRY TO FUND, UH, 100% OF THE BEACH RENOURISHMENT FOR THE NEXT TIME.
SO, YOU KNOW, IN SIMPLE MATH, WE COLLECT ABOUT $13 MILLION A YEAR.
YOU KNOW, UM, ARIANA HAS LAID OUT, UH, $1.3 MILLION IN NON CIP FUNDS, WHICH I'M ASSUMING IS MAINTENANCE.
AND THEN IF WE RULE OUT, UM, AND REMOVE $2 MILLION FOR DEBT, THAT LEAVES ABOUT $10 MILLION, YOU KNOW, IN WHAT I WOULD CALL DISCRETIONARY FUNDS THAT YOU COULD BE SAVING TOWARDS THAT GOAL OF, UH, BERE NOURISHMENT IN THE FUTURE YEARS.
SO I THINK IT MEETS ALL THOSE TESTS.
I THINK IT'S ALSO IMPORTANT TO RECOGNIZE THAT WHEN WE BORROW THIS MONEY, WE'RE BORROWING THE MONEY AGAINST OUR BEACH RENOURISHMENT FEES, AND THAT MEANS THAT THE MONEY THAT WE HAVE IN BONDING SHOULD BE GOING TOWARDS BEACH RENOURISHMENT PROJECTS.
SO, UM, WHAT, WHAT THAT MEANS IS IF WE HAVE EXTRA MONEY, THAT DOESN'T MEAN THAT THAT CAN GO TO PARKS AND ROADWAYS OR, UH, OTHER TYPES OF PROJECTS.
IT NEEDS TO STAY INTO THE, IN THAT BUCKET.
SO AGAIN, I BELIEVE THE 70 30 PROVIDES US ALL THAT WE NEED, UH, FOR NOW AND IN THE FUTURE.
UM, IN REGARDS TO THE PAYOFF OF THE CURRENT BOND OF SEVEN AND A HALF MILLION DOLLARS, UM, ARIANNA MENTIONED THAT THERE ISN'T A BIG DIFFERENCE BETWEEN THE BOND PAYMENT OF, UH, 5% AND WHAT WE COULD INVEST.
WE ONLY HAVE TWO YEARS LEFT OF PAYMENTS.
UM, AND IF YOU THINK ABOUT IT, WHAT WE WOULD BE DOING IS WE TAKING THAT $7 MILLION THAT WE PAY OFF IN TWO YEARS AND NOW PUT IT INTO, UM, A NEW FUND, UM, BOND FUND THAT WE'D PAYING BE PAYING OFF IN SEVEN YEARS.
SO WE'D HAVE FIVE MORE YEARS OF, UM, YOU KNOW, PAYMENT OF INTEREST.
AND WE, WHEN YOU LOOK AT THE DIFFERENCES BETWEEN WHAT WE'RE PAYING NOW VERSUS, I'M SORRY, MELINDA, YES, BUT VERSUS WHAT WE ARE INVESTING, IT'S, IT'S, IT'S PRETTY CLOSE.
UM, SO I WOULD SAY THAT, UH, IT'S PROBABLY, YOU KNOW, YOU COULD, YOU COULD DO IT, YOU COULD NOT DO IT.
ONE OF THE THINGS THAT I THINK WE SHOULD CONSIDER THOUGH, IN REGARDS TO THE PAYOFF OF THAT $7 MILLION IS, UH, THE $7 MILLION FEMA REIMBURSEMENT.
SO THAT IS A, UM, IMPORTANT PIECE IN THE EQUATION.
UM, IT'S, YOU KNOW, IT LAID OUT THERE THAT WE WOULD BE GETTING A $7 MILLION FEMA PAYMENT, UM, AND THAT'S WHAT WE KNOW TODAY.
BUT YOU KNOW, IT'S A CHANGING WORLD OUT THERE.
AND SO IT COULD BE DELAYED, IT COULD BE REMOVED.
AND SO IF WE WERE CONCERNED ABOUT OUR ABILITY TO COLLECT THAT $7 MILLION, WE COULD OFFSET THAT RISK BY NOT PAYING OFF THE SEVEN AND A HALF MILLION DOLLARS BOND EARLY, AND WE'D STILL BE IN THE SAME FINANCIAL PICTURE THAT YOU SEE IN PAGE NINE.
UH, THE LAST COMMENT IS IN REGARDS TO THE STATE AT TAX AND, UM, YOU KNOW, HAVEN'T HAD A CHANCE TO TAKE A LOOK AT IT.
AND I KNOW WE HAD OUR TWO BY TWOS, AND ONE OF THE THINGS THAT, UH, WE DIDN'T HAVE TIME TO GO THROUGH WAS, AND I'M INTERESTED IN, IS THE ALLOCATION METHODOLOGY OF HOW WE DECIDE HOW WE'RE GOING TO FUND, UM, YOU KNOW, ALL OF OUR PROJECTS.
AND TO ME, THE QUESTION ON THAT PAGE IS IT'S NOT SO MUCH THE REVENUES AND WHEN WE GET THEM, IT'S WHY WE HAVE ALLOCATED $27 MILLION IN EXPENDITURES TO STATE A TAX.
UM, IT, I DON'T KNOW THAT WE'VE SPENT THAT MUCH FOR THOSE TYPES OF CIP ALLOCATIONS IN THE PAST FOR STATE ATECH.
SO THAT'S JUST A QUESTION THAT I HAVE.
DON'T NEED TO ANSWER IT TODAY, BUT AS WE, UH, GO THROUGH THE, UM, BUDGET PROCESS, THAT'LL BE SOMETHING THAT I'LL WANNA BETTER UNDERSTAND.
OTHER COMMENTS FROM COUNSEL? MR. DESMOND? JUST ONE QUICK ONE.
UM, GOOD REASON WHY I HAVE FINANCIAL ADVISORS
BUT, UM, I MEAN, THERE'S A PHILOSOPHICAL ANSWER ALL OF US MAY HAVE ABOUT THIS, AND THEN I THINK THERE'S AN EXACT FINANCIAL NUMBER AND AN ANSWER, UH, SHOULD BE GIVEN.
AND I'M REALLY CURIOUS TO HEAR NOT JUST WHAT OUR STAFF HAS TO SAY, BUT WHAT OUR ADVISORS HAVE TO SAY.
AND IF IT'S DIFFERENT, WHY, AND IF IT'S THE SAME, THEN IT'S OB THEN IT'S OBVIOUS.
UM, BECAUSE JUST LIKE I SAID IN OUR
[00:40:01]
FIRST MEETING, AT SOME POINT THESE LINES INTERSECT AND IT'S NOT EXACTLY 70, 30, 60 40, 50, 50, IT'S A REAL NUMBER AND WE'RE CAPABLE OF MAKING A REAL NUMBER, WHATEVER THAT NUMBER IS, 64, WHATEVER.IT'S, AND SO I THINK WHATEVER'S FINANCIALLY, UM, RESPONSIBLE AND LINE CROSSES IS WHERE WE NEED TO LAND.
AND JUST FOR FOOD, FOR THOUGHT FOR THE FUTURE, I THINK WE AS A COUNCIL NEED TO EXAMINE AND LOOK MEASURES TO TRY TO LOOK FORWARD TO RETAIN THE SAND THAT WE HAVE FOR A LONGER PERIOD OF TIME.
YOU PROBABLY KNOW WHAT I'M TALKING ABOUT.
SO I MEAN, THERE'S, THERE'S WAYS OF DOING THAT THAT, AND THERE'S THINGS WE NEED TO EXPLORE WITH, UH, WITH OUR ENGINEERING FIRM OUTTA JACKSONVILLE, FIND OUT WHAT THE COST OF THOSE MEASURES WOULD BE AND LINE THEM UP WITH WHAT WE SPEND ON RENOURISHMENT.
AND AT SOME POINT THOSE LINES INTERSECT.
SO, UM, IT'S A HUGE FINANCIAL RESPONSIBILITY.
THE TOWN HAS TO RETAIN THE BEACH, AND I JUST THINK THAT, UH, THERE'S POSSIBILITIES THAT WE CAN GET A LONGER LIFE OUT OF WHAT WE HAVE UNLESS WE HAVE AN INTERMEDIATE SOMEWHERE BETWEEN FIVE AND EIGHT YEARS.
I'M LOOKING FORWARD TO HEARING YOUR RECOMMENDATION.
RIGHT, MR. ALFRED? I HAVE APPRECIATE THE COMMENTS OF MY VIEW IS SOMEWHAT DIFFERENT.
I PREFER TO DO A MUCH LARGER BORROWING, AND THEN THE LARGEST ONE ON THIS SHEET IS 50 50.
SO THAT'S WHERE I WOULD COME OUT.
AND THE REASONS FOR THAT ARE SEVERAL.
FIRST, I THINK ONE OF THE PRIMARY CONSIDERATIONS IS THE DIFFERENCE BETWEEN THE RATE THAT WE SPEND ON BORROWING AND THE RATE WE RECEIVE ON OUR INVESTMENTS.
AND I THINK THAT IS A PRIMARY CONSIDERATION.
AND HERE THE SUGGESTION IS WE WILL DO BETTER ON OUR OWN INVESTMENTS THAT SUGGESTS BORROWING.
UH, THE SECOND ASPECT IS THAT I, I THINK IT IS MORE CONSERVATIVE TO MAINTAIN A SIZABLE CASH RESERVE.
UH, ONE THING WE KNOW FOR SURE IS THAT THE NEXT TIME WE DO THIS, IT'S GONNA BE A LOT MORE EXPENSIVE.
BUT WE LIVE IN, UH, IN TERMS OF, OF WEATHER, WE LIVE IN VERY UNPREDICTABLE TIMES.
IT'S NOT IMPOSSIBLE THAT WE HAVE A HURRICANE IN THE NEXT SEVEN YEARS THAT WIPES OUT MUCH OF THE BEACH AND WE HAVE TO DO THIS AGAIN, THAT PARTICULAR POINT, AND THAT'S NOT SEVEN YEARS FROM NOW.
AND THEN WHAT DO WE DO? SO I LIKE HAVING MORE CASH AROUND FOR A VARIETY OF REASONS.
ONE OF, ONE OF THE BASIC REASONS THAT MUNICIPALITIES ENGAGE IN BORROWING TO FUND CAPITAL PROJECTS AND OTHER SIMILAR PROJECTS IS WHO BEARS THE IMPACT OF THE EFFORT.
IF WE PROCEED TO PAY A SUBSTANTIAL AMOUNT OF CASH, THAT MEANS THAT PEOPLE WHO USE THE BEACH IN THE PAST, UH, PAID FOR IT, NOT THE PEOPLE WHO ARE USING THE BEACH DURING THE TIME THAT IT'S BEEN RENOURISHED.
SO I THINK THERE'S A VERY SIGNIFICANT FACTOR WHO PAYS FOR THIS, THE PEOPLE WHO ARE USING THE IMPROVEMENT OR THE PEOPLE AT SOME OTHER POINT IN TIME.
SO ALL THAT SUGGESTS TO ME IS THAT WE, UH, GO FOR ONE, ONE OTHER ASPECT IS IF WE PAY OFF OUTSTANDING BONDS, IN EFFECT WE'RE USING MORE CASH IN, IN ORDER TO CUT DOWN ON THE USE OF CASH, I WOULD FAVOR MORE BORROWING.
SO I END UP FAVORING THE 50 50 PROPOSAL.
UM, I TOO WANT TO HEAR FROM STAFF AND OUR FINANCIAL ADVISORS.
IT'S GOOD TO BE IN Y'ALL'S COMPANY.
UM, WE'RE GONNA LOOK FOR THAT CRYSTAL BALL ON SOME STUFF A LITTLE LATER.
UM,
UM, ONE ABOUT THE CALLABLE AND IT SEEMS AS IF STAFF IS ALREADY RECOMMENDING THAT WE PAY THE CALLABLE, SO I'M SUPPORTIVE OF THAT.
AND AGAIN, I WANT TO HEAR, UM, MORE ABOUT YOUR RECOMMENDATION AS FAR AS THE SPLIT IS CONCERNED.
UM, AND I'VE GOT SOME COMMENTS AROUND IT.
BEFORE I GET TO THOSE COMMENTS, I WANT TO ASK A COUPLE QUESTIONS OF STAFF.
UM, ONE IS, UM, MAYBE MR. ORLANDO CAN HELP WITH THIS.
SO THE, THE, THE BEACH FEE, THE EXPENDITURES THAT WE USE THAT MONEY FOR OUTSIDE OF BEACH FOR NOURISHMENT.
[00:45:01]
THAT? YES, SIR.AND I THINK ADRIANA IS SHOWING MAYBE A $30 MILLION SPEND THIS YEAR.
I'M JUST CURIOUS OF THE TREND, YOU KNOW, OVER THE LAST FEW YEARS.
WHAT HAS THAT SPEND BEEN OUTSIDE OF BEACH RENOURISHMENT? UM, I DUNNO IF WE CAN GIMME SORT OF AN ESTIMATE ON THAT.
JUST WONDERING, IS IT, ARE WE SPENDING 30 MILLION A YEAR OR DOES IT FLUCTUATE? WHERE, WHERE ARE YOU POINTING AT 30 MILLION OF BEACH PRESERVATION FEE USE? WHAT LINE? SO I'M LOOKING AT ALL THE CIP PROJECTS, RIGHT? UNNECESSARY $30 MILLION FOR BEACH.
I THINK SOME OF THAT REFERENCE WAS $30 MILLION IN CAPITAL PROGRAMMING PROPOSED.
I STILL HAVE A COUPLE WEEKS BEFORE I PRESENT THE FIRST READING OF A BUDGET TO YOU ALL.
AND BEFORE WE SIT DOWN AND TALK AT WORKSHOP, THE BEACH RENOURISHMENT IS A CONSIDERABLE SIZE AND PORTION RIGHT.
IN PART OF OUR CIP, RIGHT? OUR CIP IS AN ADDITIONAL $30 MILLION FOR PARKS AND ROADS AND PATHWAYS AND SOME OTHER THINGS.
I THINK THAT WAS THE REFERENCE.
BUT OVER TIME, I'VE NEVER UNDERSTOOD.
AND IN MY, IN MY FOUR YEARS OF HISTORY HERE, I, I'VE ALWAYS SAID THIS IS MY VERY FIRST BEACH RENOURISHMENT PROJECT.
AND US FIGURING OUT THE PAST WITHOUT SCOTT LIGGETT AT THE TABLE HAS, HAS BEEN A A, A REAL LESSON.
AND, AND THE TOWN HAS UTILIZED BEACH PRESERVATION REVENUE FOR PROJECTS OTHER THAN BEACH RENOURISHMENT, BEACH PRESERVATION DOESN'T.
BY, BY THE STATUTE AND BY THE ABILITY TO USE THE DOLLARS DOESN'T JUST MEAN BEACH RENOURISHMENT.
WE HAVE SOME DOLLARS EARMARKED FOR ISLANDERS BEACH PARK.
WE HAVE IT FOR MAINTENANCE WHEN THE, THE BOARDWALK OR THE DECKS ARE IN, IN POOR REPAIR, UH, IT IS A REALLY GOOD SOURCE OF REVENUE.
UM, AND I BELIEVE A REALLY GOOD EXPENDITURE TO USE BEACH PRESERVATION FEES AT THOSE, AT THOSE AREAS BECAUSE THAT'S WHERE IT CAN BE USED.
IT CAN'T BE USED ANYWHERE ELSE.
AT TAX IS ALSO PROBABLY A GOOD SOURCE OF REVENUE.
SCA TAX AND OR LOCAL, UM, SC AS WE LOOK AT OUR BUDGET, WE USE A LOT OF SCA TAX IN THE CAPITAL AREA FOR PATHWAYS.
IT'S EASY TO, EASY TO USE AT TAX FOR PATHWAYS A LOT EASIER THAN BEACH PRESERVATION FEE.
SO AS WE REALLY LOOK AT THE BIG ART AND THE SCIENCE OF OUR, OF OUR BUDGET ALLOCATIONS AND OUR FUND ALLOCATIONS, BEACH PRESERVATION TO US HAS, HAS MEANT TRY TO TRY TO WIPE YOUR, YOUR, YOUR PRIMARY, YOUR, YOUR PRIORITY IS BEACH RENOURISHMENT.
LET'S NOT GO FOR A BROKE AND SAY ALL OUR DOLLARS WENT TO FIXING A BOARDWALK OR BUILDING A NEW BEACH PARK AND PARKING.
BUT WE HAVE USED IT, IT'S A LONG ANSWER, BUT I HOLISTICALLY, WE AREN'T JUST SAYING BEACH PRESERVATION IS TO RENOURISH.
AND THAT IS A POLICY DECISION.
IT'S A POLICY DECISION THAT WAS VOTED ON IN A PAST BUDGET THAT ALLOCATED BEACH PRESERVATION REVENUE TO CAPITAL PROJECTS OUTSIDE OF BEACH RENOURISHMENT.
WE, UH, MAY I ADD SOMETHING ELSE TOO? UM, I THINK EVERY TIME, UM, AND I DON'T KNOW IF IT'S JUST WHAT I HEARD, BUT I THINK THERE'S A MISCONCEPTION AS IT RELATES TO BEACH PRESERVATION FEE.
IT IS NOT THE SAME AS BEACH REN NOURISHMENT.
SO WE'RE TALKING VISION REN NOURISHMENT IS ANOTHER PROJECT THAT WE HAVE.
SO TO EXTENT TO WHAT MARK SAID, WE USE BEACH PRESERVATION FEE NOT ONLY FOR CIP PROJECTS, BUT ALSO FOR OPERATING EXPENSES TOO.
SO I WANT TO MAKE SURE THAT'S CLEAR.
SO WITH THAT, UM, AND WE WILL CONTINUE TO HAVE ONGOING MAINTENANCE OPERATIONS.
WE HAVE TO, WE HAVE TO, AND WE'VE ALREADY EXPERIENCED A TERM REDUCTION.
WE THOUGHT IT WOULD BE EVERY 10 YEARS.
NOW WE BACK AGAIN IN SEVEN YEARS AND I DON'T KNOW WHAT IT'S GONNA BE OVER THE NEXT SEVEN YEAR TERM IF WE HAVE TO SHORTEN ONCE AGAIN.
UM, AND LORD FORBID WE HAVE A, A NAME SOMEBODY COME THROUGH HERE AND WE HAVE TO DO IT IN THE INTERIM.
SO, UM, WITH ALL THAT SAID, UM, I AM LEANING MORE TOWARDS, UM, MORE OF A BORROW SITUATION AS COUNCILMAN ALFRED HAS, UH, ARTICULATED.
UM, JUST SO THAT WE POSITION OURSELVES TO DEAL WITH THE OTHER THINGS THAT WILL COME UP ALONG WITH BEACH RENOURISHMENT.
[00:50:01]
THE, UM, THE STATE POOL THAT WE'RE, WE'RE GENERATING REVENUE OFF OF, YOU KNOW, AT A RATE OF, YOU KNOW, 4.35%, UM, WHAT'S THE INDEX THAT THAT'S RUN ON 'EM, WHAT'S HISTORICALLY THE AVERAGE THAT'S, THAT'S BEEN THERE? DO WE HAVE ANY IDEA ON THAT? IT'S A SHORT TERM INVESTMENT FUND, SO IT'S DRIVEN BY WHAT THE FED FEDERAL FUNDS RATE IS.AND SO IT'S VERY MUCH LINKED TO MOVEMENT IN THAT.
YEAH, I THINK, I THINK IT'S IMPORTANT TO UNDERSTAND THE INDEXES THAT ARE BEING UTILIZED TO GENERATE THOSE REVENUES, YOU KNOW, AS, AS WE MAKE A DECISION GOING FORWARD BECAUSE IT'S NOT JUST A 4.35 NUMBER, IT IS BASED UPON EVERYTHING ELSE THAT'S GONNA HAPPEN.
UM, AND WHEN, WHEN IT COMES TO, TO THE DEBT SERVICE COVERAGE RATIOS, UM, YOU KNOW, OBVIOUSLY HAVING ANYTHING GREATER THAN THAN A A TWO TIME OR THREE TIME IS, IS VERY POWERFUL.
UM, BUT WITHIN THE THREE THAT HAVE BEEN REPRESENTED HERE, DO ANY OF THEM MAKE ANY DIFFERENCES TO THE BONDING AGENCIES AS TO OUR STRENGTHS AND OUR RATINGS? SO LOOKING AT THE DIFFERENT COVERAGE LEVELS, UM, AND I'LL JUST SPEAK IN GENERAL AND THEN WE CAN LOOK AT, UH, GREAT, THANKS ADRIANA.
UM, THE WAY I, AND I'LL, I'LL TAKE MOODY'S, THAT'S ONE OF THE TWO AGENCIES THAT RATES THE TOWN.
UH, MOODY'S LOOKS AT THESE TYPES OF BONDS.
THEY START WITH YOUR GENERAL OBLIGATION BOND RATING, WHICH IS AAA, AND THEN THEY WILL NOTCH IT DOWN FROM THERE BASED ON CERTAIN ASPECTS OF THE FEE.
IN GENERAL, HOW BROAD BASED IS IT? AND THEN ALSO THE COVERAGE LEVEL IS ANOTHER BIG DRIVER.
SO, UM, AND, AND YOUR HOSPITALITY BONDS THAT YOU HAVE OUTSTANDING HAVE VERY STRONG COVERAGE AND THEY'RE ACTUALLY RATED ON PAR WITH YOUR GOS.
THEY'RE AAA CURRENTLY THESE BEACH PRESERVATION FEE BONDS FROM 2017 ARE RATED AA TWO.
UM, THEY HAVE A LITTLE BIT LOWER COVERAGE, STILL VERY STRONG MOODY'S, THEIR, UM, THEIR RATING CRITERIA SAYS IF YOU'RE BETWEEN, UH, TWO AND FOUR TIMES COVERAGE, THEN IT SHOULD BE RATED ONE TO TWO NOTCHES BELOW THE, THE, UM, THE GEO RATING.
IF YOU ARE GREATER THAN FOUR TIMES THAN IT CAN BE RATED ON PAR OR WITHIN A NOTCH.
SO LOOKING AT THE DIFFERENT COVERAGE LEVELS, THAT SCENARIO THREE, UM, IS A LITTLE BIT BELOW FOUR TIMES.
THE OTHER TWO ARE ABOVE FOUR TIMES.
SO BASED ON THAT, THEY COULD SAY, WELL, SCENARIO THREE, THE 50 50, IT MAY BE ONE NOTCH LOWER, IT MAY BE A DOUBLE A TWO, WHEREAS YOU COULD GET TO A DOUBLE A ONE IF YOU WERE ONE OR TWO, IT'S VERY CLOSE.
UM, YOUR FOLLOW UP QUESTION MAY BE, WHAT'S THE DIFFERENCE IN THE INTEREST RATE ON THAT? AND IT WOULD BE ANYWHERE FROM, UM, FIVE TO 10 BASIS POINTS, WHICH IS 0.05% TO 0.1%.
SO ON A SEVEN YEAR DEAL, A FAIRLY NEGLIGIBLE DIFFERENCE IN THE OVERALL INTEREST RATE AND THEN SUING DEBT SERVICE COSTS.
AND, AND WHEN IT'S, YOU KNOW, IN, IN TERMS OF HAVING THE $7 MILLION OUTSTANDING IN THE, IN THE PREVIOUS OFFERING, YOU KNOW, TWO YEARS LEFT.
AND LET ME ASK YOU THIS FIRST.
UM, IT, ARE THERE TWO PAYMENTS LEFT ONE BEFORE? SO THERE'S THREE PAYMENTS LEFT.
UM, SO IN THE EYES OF THE BO OF THE RATING AGENCIES, AND DOES THAT MAKE ANY DIFFERENCE OF HAVING IT OUTSTANDING VERSUS HAVING IT PAID OFF IN TERMS OF THOSE TO TERMS OF OUR RATINGS? SO IT WOULD, WHEN WE LOOK AT THE COVERAGE LEVEL, BECAUSE IF YOU KEEP THOSE TWO MATURITIES OUTSTANDING, WHICH WOULD BE OUTSTANDING FOR YOUR FISCAL YEAR 27 AND 28, RIGHT.
AND WE ISSUED THAT, NOW IT'S GONNA STACK, I'M USING MY HANDS, IT'S GONNA STACK ON TOP OF YOUR EXISTING DEBT, WHICH IS GONNA IN TURN LOWER YOUR COVERAGE.
AND SO IF YOU WERE TO PAY THOSE BONDS OFF, YOU'VE GOT A CLEAN SLATE AND, AND THAT'S THE COVERAGE THAT'S SHOWN.
THAT'S ASSUMING YOU PAID THOSE BONDS OFF.
IF YOU DIDN'T, YOU WOULD HAVE TWO YEARS WHERE YOUR COVERAGE IS LOWER AND THEN IT WOULD GET TO THAT LEVEL.
SO OUR BOND RATINGS OVER THE PAST, UM, I'LL JUST SAY THREE YEARS, UM, AND I'M ASKING A QUESTION, HAVE DONE WHAT HAVE THEY GONE UP THE RATINGS, YOUR GEO BOND GENERAL OBLIGATION BONDS HAVE STAYED AT AAA AND THEN YOUR HOSPITALITY BONDS AND YOUR BEACH PRESERVATION FEE BONDS HAVE GONE UP BECAUSE MOODY'S ACTUALLY REVISED THEIR CRITERIA TO TAKE INTO ACCOUNT WHAT I WAS DESCRIBING.
AND SO THEY'VE GONE UP BECAUSE OF HOW STRONG THE COVERAGE IS.
THAT'S, THOSE ARE THE, THOSE ARE THE REAL CRUX OF MAKING THE DECISION ON HOW WE BORROW AND, AND WHAT'S BEST FOR, UM, THE ECONOMIC, EXCUSE ME, THE ECONOMIC SIDE OF OUR COMMUNITY.
SO, YOU KNOW, I, I DON'T KNOW WHAT THE RIGHT ANSWER IS.
YOU KNOW, I KNOW THAT WE'VE GOTTA MAINTAIN OUR, OUR BOND RATINGS AND PREFERABLY OVER, YOU KNOW, FOUR TIMES, UM, ON THE DEBT SERVICE COVERAGE RATIOS.
UM, SO AS, AS MR. DESIMONE STATED, THERE IS, UH, A MEETING OF THE CURVE WHERE IT MAKES THE MOST SENSE, WHERE YOUR RETURN ON INVESTMENT VERSUS BORROWING HAS THAT PREMIUM POINT.
AND IF IT IS A, IF IT'S A A 61, YOU KNOW, 39, 62, 38, 65, 35, 60 40, 50 50, YOU KNOW WHERE THAT LANDS.
UM, I DON'T KNOW THAT'S Y'ALL'S
[00:55:01]
JOB, RIGHT? BUT FROM MY STANDPOINT IS WHERE IS THE BEST AVENUE FOR US TO LAND THAT MAKES, MAKES THE MOST ECONOMIC SENSE THAT RETAINS OUR BOND RATINGS AND OUR BORROWING POWERS THAT WE'VE WORKED SO HARD TO GARNER.UM, YOU DON'T WANT TO USE THE, YOU KNOW, A HIGH PERCENTAGE OF YOUR AVAILABLE BORROWING CAPACITY BECAUSE THEN IT STARTS TO AFFECT WHERE YOU ARE.
UM, BEING THAT WE, WE ARE FORTUNATE TO HAVE CASH AND WE'VE GOT GREAT RESERVES, YOU KNOW, HOW DO WE PUT OURSELVES IN THAT BEST POSITION GOING FORWARD? SO, YOU KNOW, I I'M HEARING 70 30, 50 50, UM, FIRST OF ALL, I'M HEARING BORROW RIGHT? SO, YOU KNOW, IT'S NOT CASH.
UM, ONE THING THAT I, THAT I'M HEARING THAT'S A LITTLE CONCERNING, UM, IS THAT I DON'T THINK WE'VE DONE ENOUGH WORK ON IS WITHIN THAT, UM, MINIMUM THRESHOLD OF $20 MILLION.
HOW DO WE BREAK THAT DOWN TO THE DIFFERENT PROJECTS, TO THE DIFFERENT RESPONSIBILITIES? IS IT BEACH PRESSURE PRESERVATION THAT WE'RE LOOKING FOR? OR IS IT THE BEACH PRESERVATION FEE? YOU KNOW, SO I THINK WE NEED TO HAVE A, AN UNDERSTANDING AS TO WHAT THOSE DOLLARS ARE THERE FOR, UM, AND, AND REALLY KIND OF ADDRESS THAT POLICY SIDE OF IT TO MAKE CERTAIN THAT WE'RE ADDRESSING IT CORRECTLY.
SO THAT I, I WANNA BE CERTAIN OF, MARK, DO YOU HAVE A QUESTION? NO, I JUST WANNA LET YOU KNOW, I, I HEAR YOU, WE TALKED A LITTLE EARLIER, YOU KNOW, YOU ALL ARE TALKING AND, AND I HAVE, I HAVE ALSO BROUGHT FORWARD, WE HAVE BROUGHT FORWARD 12 TO 20, BUT WE HAVE TO MAKE A DECISION.
WE, WITH THE GOAL OF NEXT TIME HAVING ENOUGH CASH FOR THE PROJECT, DOES THAT MEAN THE FUND BALANCE IS 47 5 PLUS 20? RIGHT? RIGHT.
SO WE WERE TALKING EARLIER, I SAID WE HAVE TO SEPARATE, AND I WOULD SEPARATE THE FUND BALANCE EXPECTATION FROM A CHECKING AND A SAVINGS ACCOUNT.
THE SAVINGS HAS TO BE PRIMARILY AND ONLY BE RIGHT COMFORTABLE WITH THE, THE ADDITIONAL THAT WE HAVE IN THERE FOR AN EMERGENCY OTHER THAN BEACH PRESERVATION, OTHER THAN BEACH RENOURISHMENT.
SO I JUST, THAT THAT'S A CONVERSATION WE'RE GONNA HAVE TO HAVE A LITTLE BIT MORE IN DEPTH ON.
UM, SO MS. PRICE, IF YOU LEMME JUST ONE SECOND.
UM, SO, YOU KNOW, BASED OFF OF WHAT I'M HEARING, I I I'M IN FAVOR OF PAYING OFF THE DEBT.
UM, I DON'T THINK WE'RE IN A POSITION THAT IT CAUSES ANY DETRIMENT TO THE FINANCIAL STANDING OF THE, OF THE TOWN.
UM, AS A MATTER OF FACT, I THINK IT, IT'S A NEGATIVE IF WE DON'T PAY IT OFF, ESPECIALLY IF WE'RE GONNA ISSUE ADDITIONAL BONDS.
UM, AND I'M GONNA GO BACK TO, UM, YOU KNOW, THE GUIDANCE ON THE FINANCING.
I, I THINK THERE'S A MATRIX THAT YOU HAVE TO RUN TO REALLY UNDERSTAND WHERE IT NEEDS TO BE, BUT I THINK THAT A DEBT SERVICE COVERAGE RATIO OF FOUR PLUS IS WHAT WE NEED TO BE LOOKING FOR TO MAINTAIN EVERYTHING.
SO MS. BRYSON, MAYOR, UM, I, I WANNA COME BACK TO WHERE I'M LANDING NOW.
UM, I, I WANTED TO GIVE FOLKS OPPORTUNITIES TO SAY, UH, TO, TO ASK OTHER QUESTIONS AS WELL.
UM, SO I, I'M GOOD WITH THE 20 MILLION FUND BALANCE.
UM, I LIKE THE, UH, ADDING SOME SORT OF ACCELERATION FACTOR IN THERE.
DON'T KNOW WHAT THAT'S GONNA BE, BUT SOMEBODY WISER THAN ME CAN FIGURE THAT PART OUT.
UM, AND, AND THEN, UM, UM, I'M IN A 60 40 CAMP.
UM, I, AND I'M IN THE GO AHEAD AND PAY OFF THE CALLABLE BONDS, ESPECIALLY AS YOU DESCRIBE, AS OUR FINANCIAL ADVISORS, UH, DESCRIBE AS STACKING.
UM, I WONDERED WHERE THE NUMBERS WOULD COME OUT.
SOUNDS LIKE THE NUMBERS ARE FAIRLY EVEN AS FAR AS PAYMENT PAYMENTS GO, BUT IF IT AFFECTS OUR BOND RATING, THAT'S A DIFFERENT, UH, UH, THANKS MAYOR FOR ASKING THOSE KIND OF QUESTIONS.
UM, SO THAT'S WHERE I AM WITH THAT.
UM, UH, I'M CONCERNED ABOUT THE FEMA PAYMENT.
UM, AND SO I THINK THAT DOES REDUCE THE, THE FUND BALANCE THAT WE WOULD HAVE.
UM, I THINK WE OUGHT TO JUST TAKE THAT OUT AND SAY WE MAY NOT GET THAT MONEY.
UM, THAT'S WHERE I'D LOOK AT IT.
BUT THE REASON THAT I'M LEANING TOWARDS 60 40, UM, IS, IS I THINK, UH, I THINK THE 50 50 DOESN'T GET US THERE AS FAR AS THE DEBT SERVICE COVERAGE RATIO.
UM, AND ALSO, UM, YOU KNOW, WHEN I THINK ABOUT IT, THE BEST WAY I CAN THINK ABOUT IT IS, IS MY HOME.
UM, SO IF I'VE GOT SOME SAVINGS AND I'M STOCKING AWAY, PUTTING SO MUCH MONEY, I CALL IT A SELF ESCROW ACCOUNT, WE PUT SO MUCH MONEY EVERY MONTH BACK INTO A SAVINGS ACCOUNT IN CASE WE NEED TO REPLACE THE ROOF IN CASE WE NEED, WE HAVE TWO HVAC SYSTEMS
AND SO IF I USE MY CASH TO BUY THAT, THEN WHAT? AND LET'S SAY I USE MY CASH TO, TO, TO TAKE CARE OF REPLACING ONE OF THE HVAC SYSTEMS, NEXT THING I KNOW THE ROOF FALLS
AND I THINK THAT THAT'S A WISER WAY TO GO, UM, THAN, THAN PAYING MORE CASH.
AND IF YOU TAKE THAT 7 MILLION OUT, UM, THEN, UM, IT MAKES A BIG DIFFERENCE IN WHAT OUR ENDING FUND RESERVE IS.
SO I'M AT 60 40, UM, WITH THE 20 MILLION, UH, FUND BALANCE, UM, UH, PAYING OFF CALLABLE BONDS
[01:00:01]
AND I CAN'T REMEMBER, MELINDA DID A GREAT JOB OF SETTING OUT THOSE QUESTIONS.CAN I MAKE ONE QUICK CLARIFICATION? ABSOLUTELY.
UM, YOUR CURRENT HOS UH, BEACH PRESERVATION FEE BONDS ARE IN THAT TWO TO FOUR TIMES COVERAGE RANGE.
SO EVEN UNDER A 50 50, YOU WOULD MAINTAIN YOUR SAME CREDIT RATING THAT YOU HAVE.
NOW IT'S, IF YOU GOT OVER FOUR, YOU HAVE SOME UPSIDE IN THAT CREDIT RATING.
EVEN IF YOU WENT THE 50 50, WE'RE NOT LOOKING AT GOING LOWER THAN WHERE YOU ARE TODAY.
I DUNNO IF THIS IS A FAIR QUESTION, AND I'M PUTTING DAVID AND ANDY ON THE SPOT HERE.
UM, BUT AS FINANCIAL ADVISORS, EVERY TIME WE GO, LIKE MR. DECIMAL MENTIONED, WHEN WE GO TO FINANCIAL ADVISORS FOR RECOMMENDATIONS, SO BASED ON WHAT, YOU KNOW, I KNOW WE'VE BEEN WORKING FOR A FEW WEEKS NOW, FOR A FEW MONTHS NOW, UM, WHAT IS THE RECOMMENDATION FOR OUR TOWN? IS THAT A FAIR QUESTION TO ASK? YEAH, ADD TO THAT.
THE, THE GOOD QUESTION OF WHERE THAT LINE CROSSES OF DEBT VERSUS CASH CONTRIBUTION SCENARIO.
UM, SO I'LL START YOU, YOU CHEN
UM, SO TAKING EACH OF THESE IN TURN LIKE YOU DID, WHICH I THOUGHT YOU LAID IT OUT VERY WELL ON, STARTING WITH THE FUND BALANCE.
I THINK IT'S A GREAT IDEA TO MOVE AND IT SOUNDS LIKE THERE'S CONSENSUS AROUND THAT.
MOVE YOUR MINIMUM FUND BALANCE POLICY UP.
I DO LIKE THE IDEA OF AN ESCALATOR BECAUSE FRANKLY THAT'S WHERE YOU ARE TODAY.
YOU STARTED AT 12 MILLION WHENEVER IT WAS.
WE'RE TALKING ABOUT 20 JUST BECAUSE OF INFLATION AND COSTS ARE GOING UP.
SO THAT'S A, THAT'S A VERY GOOD, UH, IDEA TO ADD ON TO THAT.
UM, IN TERMS OF PAYING OFF THE DEBT VERSUS LEAVING OUTSTANDING, I WOULD, UH, PAY IT OFF.
I'D RECOMMEND PAYING THAT OFF FOR A COUPLE OF REASONS.
ONE, I THINK IT'S AGAIN, UM, A CONSENSUS THAT YOU HAVE CASH TO USE.
SO I WOULD START WITH PAYING OFF THAT DEBT FOR TWO REASONS.
ONE, UM, THE INTEREST RATE ON IT, THE COUPON IS 5%.
IT'S UNLIKELY THAT YOUR EARNING RATE'S GONNA GO HIGHER.
IT MAY ACTUALLY GO A LITTLE BIT LOWER DEPENDING ON WHAT THE FED DOES.
AND SO THAT'S A BETTER USE OF YOUR CASH TO PAY OFF HIGHER COSTING DEBT, EVEN THOUGH IT MEANS YOU MAY NEED TO BORROW A LITTLE BIT MORE.
YOUR CURRENT BORROWING COST IS GONNA BE AROUND THREE AND A HALF, HALF PERCENT.
SO WHEN I'M DEPLOYING CASH, I WOULD RATHER PAY OFF HIGHER COSTING DEBT.
UM, AND THEN IT ALSO HAS THE ADDED BENEFIT OF CLEAN SLATE WITH THE NEW BORROWING AND THE COVERAGE, UH, IN TERMS OF THE NEW BORROWING AND, AND I KNOW THAT'S PROBABLY WHERE THERE'S THE MOST, UM, UH, KIND OF NOT DIFFERENCE OF PENDING 'CAUSE I THINK WE'RE ALL TALKING ABOUT BORROWING.
IT'S JUST EXACTLY HOW MUCH I THINK LOOKING AHEAD, UM, AND ABOUT HOW MUCH, WHAT I'LL CALL NET REVENUES.
NET CASH YOU DROP TO THE BOTTOM LINE EACH YEAR.
UH, MR. BROWN, YOU ASKED THAT ABOUT HOW MUCH NON BEACH RENOURISHMENT PROJECTS YOU HAVE COMING IN.
SO IF YOU'VE, I WAS DOING SOME KIND OF ROUGH MATH ON MY SHEET HERE.
IF YOU'VE GOT 13 AND A HALF MILLION OF TOTAL REVENUES AND YOU KNOW, YOU'RE GONNA SPEND AT LEAST IN FISCAL 26, 1,000,003 I THINK WAS ON THAT SHEET FOR NON BEACH PRESERVATION PROJECTS, WE'LL HAVE DEBT SERVICE SOMEWHERE AROUND $3 MILLION OR SO.
YOU MAY BE ABLE TO CLEAR TO DROP TO THE BOTTOM LINE $10 MILLION A YEAR.
SO IF THE GOAL IS OF THE COUNCIL IS TO BUILD UP ENOUGH CASH SO THAT IN SEVEN YEARS YOU'VE GOT ENOUGH CASH THERE TO PAY, UH, THAT, UH, PAY CASH FOR A NEW PROJECT, UM, THAT'S IMPORTANT TO KIND OF TAKE INTO CONSIDERATION.
UM, ALL THAT SAID, I I LEAN TOWARDS THE 50 50 OR THE 60 40 A, A SLIGHTLY HIGHER TILT ON THE BORROWING SIDE, AND THAT'S PARTLY JUST, UM, OUR NATURE A LITTLE BIT MORE CONSERVATIVE.
JUST MAKING SURE YOU HAVE MORE CASH ON HAND BECAUSE WHILE WE'RE LOOKING AT THAT $1.3 MILLION OF NON BEACH PRESERVATION PROJECTS, THAT'S FOR FISCAL 26, I DON'T HAVE ANY INSIGHT AS TO YET WHAT FISCAL 27 OR BEYOND BRINGS IN TERMS OF SOME OF THOSE.
SO I WOULD HATE FOR Y'ALL TO BE IN A POSITION WHERE YOU'VE LOWERED YOUR CASH, IT'S STILL COMING IN, STILL HEALTHY, BUT YOU'VE GOT SOME OF THESE NON BEACH PRESERVATION FEE PROJECTS THAT POP UP THAT YOU WANT TO USE FOR THAT.
SO GIVEN THAT THE COVERAGE IS REALLY STRONG, WHETHER IT IS 50 50 OR 60 40, I WOULD LEAN TO THE 50 50 JUST TO GIVE YOU A LITTLE BIT MORE CUSHION FOR, TO ADDRESS SOME OF THESE OTHER PROJECTS.
AND THEN ESPECIALLY IF Y'ALL PUT AN ESCALATOR ON YOUR MINIMUM FUND BALANCE, THEN THAT MINIMUM BALANCE IS GONNA GROW.
AND THEN MY LAST POINT IS, YOU KNOW, IN TERMS OF HAVING MONEY ON HAND IN SEVEN YEARS FOR THE NEXT PROJECT, WHILE IT'S 48.5 MILLION TODAY, IF WE ADD AN ESCALATOR ONTO THAT, YOU KNOW, THREE 4%, YOU KNOW, YOU FAST FORWARD SIX OR SEVEN YEARS, YOU'RE GONNA BE INTO THE $60 MILLION RANGE FOR ANOTHER PROJECT OF SIMILAR SIZE AND SCOPE.
SO I THINK THAT'S IMPORTANT, UH, TO KEEP IN MIND IS IT'S LIKELY NOT GONNA BE 48 AND A HALF MILLION IN SEVEN YEARS.
IT'S GONNA BE SOMETHING HIGHER.
ONE THING I'D ADD IS IS I KNOW THERE WAS SOME DISCUSSION ABOUT PAYING THE DEBT OFF OR NOT, AND WE SHOWED INVESTMENT RATES AND SHORT RATES GONNA FLUCTUATE, NO DOUBT ABOUT
[01:05:01]
IT.BUT, UM, YOU'RE JUST IN SUCH A GOOD SPOT AND YOU DO NEED TO VIEW THIS FEDERAL SOURCE AS A, AS A RESTRICTED GOTTA GO FOR THAT.
AND SO TO BE ABLE TO GET THAT CLEAN SLATE, YOU GUYS APPEAR TO BE KIND OF ALL ON THE SAME PAGE ABOUT PROTECTING YOURSELF IN THE FUTURE.
UNDERSTANDING I GREW UP IN A BEACH.
YOU GREW UP IN ALL OF PALMS DURING HUGO, OKAY.
AND, AND WHAT THEY WENT THROUGH AND THE CUSHION THAT YOU NEED TO HAVE, GET OUT IN FRONT OF FRANK FEMA REIMBURSEMENTS AND THEN TO DO OTHER THINGS THAN THEY BETTER THAN IT WAS BEFORE.
UM, I AGREE WITH DAVID, THAT 6 40, 50 AND YOU'RE SHORTENING THE DEAL UP TO SEVEN YEARS, GIVES YOU A GREAT INTEREST RATE IN ADDITION TO THE FACT SUCH A GREAT, UM, YOU'RE, YOU'VE GOT JUST THE ABILITY TO HAVE ESSENTIALLY THE CHEAPEST RATES ON THE PLANET FOR COMMUNITY YOUR SIZE QUESTION.
SO ARE THOSE PERCENTAGES THAT YOU RECOMMEND RELATIVE, UH, IN WHERE IF OUR BIDS COME IN 10 MILLION HIGHER OR 10 MILLION LESS, DOES THAT CHANGE YOUR MIND? UM, YES.
I THINK THE TOTAL COST OF THE PROJECT WOULD, WOULD CERTAINLY PLAY INTO IT.
AND SO IF IT'S, IF IT'S, I THINK WE WOULD WANT TO REFRESH THE SCENARIO IF IT COMES IN DRAMATICALLY OR MATERIALLY DIFFERENT THAN THE 48 EVERYTHING.
SO WHAT IS MATERIAL? YOU MENTIONED THE WORD MATERIAL.
UM, FOR ME AS AN ACCOUNTANT, THAT'S A, THAT'S A BIG WORD.
SO WHAT IS MATERIAL? UM, I WOULD SAY IF IT'S A GREATER THAN, UH, IF YOU'RE GETTING IN BIDS PLUS OR MINUS 10%, UM, IN TERMS OF MATERIALITY, I KNOW THAT'S A, I JUST HONESTLY JUST KIND OF PICKED THAT UP, BUT I'M TRYING TO THINK IF THAT'S FOUR TO $5 MILLION EITHER WAY.
I DON'T THINK THAT DRAMATICALLY CHANGES THIS PICTURE, BUT IF WE'RE STARTING TO GET, UM, GREATER THAN 10% HIGHER OR LOWER, I THINK THAT'S WHERE WE CAN UPDATE THIS.
AND MAYBE THAT'S A DIFFERENT ANSWER.
SO THAT, THAT BRINGS A QUESTION OF IF WE START THE PROCESS ON BORROWING X, AT WHAT POINT IN TIME CAN WE CHANGE THAT DIRECTION TO CHANGE THE AMOUNT? WELL, WE'LL HAVE TIME TO REVISIT, RIGHT? HOPEFULLY.
BUT I'M JUST, YOU KNOW, IF WE START A PROCESS OF BORROWING, YOU KNOW, WHEN DO YOU SAY, YOU KNOW WHAT, WE NEED TO LOWER THIS OR IN, YOU KNOW, OUR PROCUREMENT, UM, WE'RE GETTING BIDS RIGHT NOW FOR OUR PROJECT.
SO THE CLOSING IS APRIL 17TH, CORRECT? YEAH, SEAN, NEXT WEEK.
UM, THEN QUICKER THOUGHT, THEN THE TEAM HAS TO MEET AND MAKE UP, DO THE INTERVIEWS, NEVERMIND.
AND MAKE A DETERMINATION AT THAT POINT.
SO I I I, I DO HAVE A QUESTION ABOUT WHERE THOSE LINES MEET, RIGHT? BECAUSE WE, WE, WE KNOW THAT WE'VE GOT A, AN INTEREST RATE RIGHT NOW, 4.35% ON A RETURN FOR INVESTING.
AND, AND BETWEEN THE THREE OPTIONS, IT'S, IT'S A $2 MILLION SWING IN INTEREST, RIGHT? FROM THE, FROM THE 70 30 TO THE 50 50.
UM, YOU KNOW, WHAT IS, AND I, I KNOW WE CAN'T REALLY PROJECT REVENUE OFF OF AN INTEREST RATE THAT'S GONNA CHANGE AT ANY MOMENT, WHICH THEY HAVE BEEN.
BUT WHAT DO WE EXPECT THE DIFFERENCE TO BE? I MEAN, WE'VE GOTTA HAVE SOME KIND OF A FORECAST IN THERE.
UM, YOU KNOW, IF, IF WE'RE GONNA PAY $4 MILLION IN INTEREST, HOW MUCH ARE WE GONNA RECEIVE ON THE INVESTMENTS THAT WE'RE PUTTING IN? YOU KNOW, WHERE IS IT GONNA BE OFFSET, RIGHT? SO WE'VE, WE'VE GOT A RETURN COMING IN, BUT YEAH, WE'RE STILL PAYING OUT INTEREST.
SO WHAT IS THE NET EFFECT OF THAT? ARE WE EXPECTING FORECASTING? RIGHT? UM, SO PUT ON CRYSTAL BALL.
CRYSTAL BALL'S VERY IN MY OTHER LIFE, JUST SO YOU KNOW, I'M A MORTGAGE BANKER, SO I GET TO ASK THE CRYSTAL BALL ALL THE TIME, BUT I LOVE ASKING THE QUESTION.
I THINK WE'RE CHANGING YOUR TITLE NOW.
THEY ALWAYS HAVE THAT DISCLAIMER ON THE BOTTOM AND, AND VERY MUCH, I MEAN, IT'S BEEN A VOLATILE MARKET THROUGHOUT THE CALENDAR YEAR, BUT PARTICULARLY THE LAST WEEK OR SO, IT'S BEEN, I MEAN, WE'VE SEEN, UH, VERY DRAMATIC SWINGS IN INTEREST RATES, HIGH, HIGHER, AND LOWERS.
SO, UM, I THINK WHERE IF, IF I CAN KINDA USE SOME OF THE NUMBERS HERE AND I'LL ROUND, YOU KNOW, RIGHT NOW THAT LOCAL GOVERNMENT INVESTMENT POOL AROUND 4.5%, RIGHT NOW, YOU BORROW AROUND 3.5%.
SO THAT'S WHERE THAT WOULD SAY DEBT IS THE MORE COST EFFECTIVE.
'CAUSE I CAN EARN MORE CASH THAN I THAN I'M PAYING AN INTEREST.
SO WHERE DOES THAT CROSS? IF YOU LOOK AT, AND I THINK THE FEDERAL RESERVE IS IN A VERY TOUGH SPOT BECAUSE ON THE ONE HAND, IF YOU LOOK AT IN, UH, THE TARIFFS COMING ON THAT THAT LEADS TO INFLATION, HIGHER COST THEY'VE BEEN GUARDING AGAINST AND TRYING TO GET INFLATION IN CHECK FOR, UH, SEVERAL YEARS NOW.
AND SO THAT PIECE OF IT WOULD SAY, WELL, THE FED'S GONNA KEEP THEIR FOUR POINT HALF PERCENT RATE AT THAT LEVEL FOR LONGER.
THEY'RE GONNA BE HESITANT TO LOWER IT.
BUT WHAT WE'VE SEEN IN THE MARKET HERE OVER THE PAST COUPLE OF WEEK, PAST WEEK OR SO, WITH THE IMPLEMENTATION OF, OF TARIFFS, THE MARKET IS
[01:10:01]
EXPECTING THE FED MAY START TO CUT ITS RATE, LOWER ITS RATE BECAUSE OF THE RECESSION CONCERNS.AND SO IT'S A VERY TOUGH, THEY'RE IN A TOUGH SPOT.
YOU GOT RECESSION CONCERNS AND YOU GOT THE INFLATION CONCERNS ALL DRIVEN BY THE SAME COMPONENT.
AND THAT'S, AND THAT'S, THAT'S, YOU KNOW, WE'RE IN A PRECARIOUS POSITION TRYING TO, TO DECIDE UPON, UH, A DIRECTION WHEN THERE IS SO MUCH, UM, FLUCTUATION.
UM, YOU KNOW, SO, SO I'M KIND OF LOOKING AT IT, OKAY, WHAT IF THE INTEREST RATES MARRY EACH OTHER AT SOME POINT IN TIME, RIGHT? THREE AND A HALF, THREE AND A HALF, RIGHT? IT'S, IT'S, IT'S A NET NEUTRAL, SO TO SPEAK.
UM, OBVIOUSLY IF IT GOES SOUTH OF THAT AND WE'RE PAYING MORE AN INTEREST, THEN THAT'S, THAT'S A PROBLEM.
THAT'S NOT WHERE WE WANT TO BE, BUT THAT'S NOT THE POSITION THAT WE'RE IN.
UM, AND EVERYTHING I'M READING IS THAT WE'RE 68, 70% GONNA HIT A RECESSION, AND I THINK IT'S, YOU KNOW, A GLOBAL RECESSION BY END OF YEAR.
BUT I THINK WE'LL HIT A A, A COUNTRY RECESSION BY THE END OF JUNE.
WHERE WHERE DOES THE FED DECIDE TO GO? HOW DO THEY ADDRESS? UM, SO AS WE, AS WE PONDER ALL OF THIS, WE NEED TO KEEP THAT IN MIND AND, YOU KNOW, HELP IT GUIDE US.
BUT NO, I, I, OH, SORRY, QUESTION.
UM, I THINK THE FACT THAT, I'M NOT SAYING THERE'D BE A DIFFERENT ANSWER, BUT IF YOU WERE BORROWING OVER 20 YEARS OR 25 YEARS, RIGHT? I THINK THIS IS WHERE THIS COMES UP MORE.
THE FACT THAT YOU'RE BORROWING OVER SEVEN YEARS AND YOU'RE ABLE TO PAY THIS OFF PRETTY RAPIDLY, THAT'S GONNA MITIGATE ANY, YOU KNOW, HINDSIGHT WE SHOULD HAVE DONE THIS OR THAT BECAUSE IT'S A RELATIVELY MINIMAL AMOUNT OF INTEREST THAT YOU'RE PAYING OVER A SEVEN YEAR PERIOD.
SO I THINK THAT'S A BIG BENEFIT TO THIS STRUCTURE.
UM, AND, AND IT'S, AND IT JUST SHORTENS THE TIME HORIZON.
UH, SO I THINK THAT, UH, I KNOW THAT DOESN'T ANSWER YOUR QUESTION, BUT THAT MITIGATES TO ME ANYTHING OF, OH, WELL WE SHOULD HAVE DONE THIS, OR WE, WE SHOULD HAVE DONE THAT.
I THINK IT'S, YOU'LL FIND THAT PROBABLY GETS TO ABOUT THE SAME, YOU KNOW, IF WE WERE TO PROJECT RATES TO GO DOWN, UH, SO KIND OF RIGHT OUT OF THE GATE, YOU'RE BETTER OFF BORROWING MAYBE IN A COUPLE YEARS.
YOUR, YOUR, YOUR INVESTMENT RATE GOES BELOW 3.5% IF THEY DO LOWER RATES.
UM, BUT OVER THE TI UH, YOU KNOW, FULL SEVEN YEAR PERIOD, IT'S ABOUT A WASH.
UM, SO YEAH, I JUST WANTED TO MAKE THE POINT THAT WHEN YOU LOOK AT THE COST OF A BORROWING VERSUS THE INVESTMENT AND THE DIFFERENCE THAT YOU CAN MAKE, THAT ASSUMES THAT YOU DON'T SPEND THAT MONEY, RIGHT? RIGHT.
I THINK IT WOULD BE HELPFUL IF WE'RE GONNA, AS WE GO THROUGH THE DECISION MAKING PROCESS TO ANSWER ONE OF THE QUESTIONS THAT WAS RAISED AND THAT'S WHAT DO WE HAVE PLANNED FOR CAPITAL RELATED EXPENSES THAT WOULD COME, UH, OUT OF THE BEACH, UH, PRESERVATION FEE.
I THINK THAT WOULD BE HELPFUL BECAUSE YES, WE DO, UH, SPEND THOSE FUNDS, UH, NOT JUST FOR BEACH RENOURISHMENT, BUT FOR CAPITAL RELATED IMPROVEMENTS.
I KNOW WE'VE GOT ISLANDERS COMING UP, UM, THAT IN THE FUTURE AS WELL AS OUR REGULAR MAINTENANCE.
UH, BUT I THINK IT WOULD BE GOOD TO LAY THAT OUT.
WE HAVE A PLAN THAT WE ARE LOOKING AT FOR FIVE YEARS, SO IF WE COULD LAY OUT THE SPECIFIC ONES THAT WOULD HIT THAT, UM, SOURCE OF FUNDS, I THINK THAT WOULD BE HELPFUL.
RIGHT NOW WE HAVE ISLANDERS BEACH PARK FUNDED WITH, WITH SOME BEACH PRESERVATION FEE.
FORGIVE ME ENOUGH FOR NOT HAVING THE WHOLE CIP AS WE'RE PLANNING IT PROPOSED, BUT THAT, THAT WOULD FALL IN FY 27 JUST BASED ON RIGHT.
NOURISHMENT AROUND $5.5 MILLION, UM, FOR ISLANDERS.
SO PLUS WHAT YOU SEE HERE, SO, ALRIGHT, WELL, I WOULD SAY TO GET READY FOR YOUR BUDGET, I, I DON'T KNOW IF YOU'RE READY FOR ME TO GIVE, GIVE SOME THOUGHT.
I THINK MR. DESIMONE IS ASKING FOR THAT LINE WHERE THEY CONNECT AND WE'RE HEARING THAT THAT LINE AT SOME POINT MIGHT BE A WASH.
I, I DO WANT TO SAY JUST FOR THE ROOM, THERE'S A, THERE'S A COUPLE THINGS THAT I'M, THAT I'M THINKING ABOUT.
ONE, THE DIFFERENCE BETWEEN 70 30, RIGHT? 70 30 AND 60 40 IS A PHILOSOPHICAL DECISION OF TOWN COUNCIL.
I'M HAPPY TO PROPOSE 60 40 AND KEEP 36 3 5 7 AND 31 6 OH OR EITHER ONE WORK.
WE ARE THE DIFFERENCE BETWEEN 60 40 AND 70 30.
AND I, I DIDN'T HEAR YOU ALL TALK 50 50, SO I'M JUST LOOKING AT THOSE TWO WITH ALL DUE RESPECT TO MS. BUT I SAID ALL, UM, SO I HEARD IT'S A $4.7 MILLION DIFFERENTIAL.
AND WHAT, WHAT'S THE DIFFERENCE, ADRIANA, BETWEEN 70 30 AND 50 50 IN THE TOTAL BORROW THEN? SO WE'RE TALKING $10 MILLION DIFFERENCE BETWEEN THE TWO START GETTING INTO A LOT MORE DIFFERENTIAL IN BORROW THERE.
[01:15:01]
UM, SO THE PROCESS TO THINK THROUGH ALL OF THIS, WE'RE, WE'RE FOLLOWING IT.AND I'VE ALWAYS SAID, JUST EVEN IN MY CAREER AND, AND WITH ALL OF YOU, TRUST THE PROCESS, RIGHT? AND SO CAPITAL PLANNING AND BUDGET PREPARATIONS GO HAND IN HAND EVERY YEAR.
WE'RE STARTING TO ASK QUESTIONS ABOUT FUTURE YEAR CIP, NOT JUST WHAT ARE WE BUILDING THIS YEAR AND WHY DIDN'T WE BUILD IT LAST YEAR, CAPITAL PROGRAMMING QUESTIONS.
BUT WHEN YOU PREP THE BUDGET AND CAPITAL PLANNING, I JUST NEED TO KNOW WHERE YOU'RE LINING UP HERE TODAY.
IT MIGHT BE 65 35 BY THE TIME WE DIG INTO IT A LITTLE BIT, BUT I HAVE TO PLAN THE BUDGET AND ALIGN MILLAGE WITH DEBT.
AND SO WHETHER I'M USING CASH TO COVER OR DEBT TO COVER, I HAVE TO ALIGN THAT MILLAGE IN OUR DEBT FUND IN A, WITHIN A COUPLE WEEKS, FIRST READINGS IN MAY.
SO WE ARE TALKING 60, 40, 30, 70, 34 $0.7 MILLION DIFFERENCE.
70 30 TO 50 50 IS CLOSER TO 10.
WE'VE GOTTA PLAN THE BUDGET, WHICH WE'RE DOING, WE'RE GONNA PLAN FOR OUR CAPITAL PROJECTS, WHICH WE'VE SAID THIS IS THE HIGHEST PRIORITY AND I APPRECIATE THAT.
UM, THE NEXT STEP THAT YOU WOULD SEE IN ADDITION TO BUDGET, RIGHT? IN ADDITION TO FIRST READING, FIRST TUESDAY OF MAY, AND THEN THE TWO WORKSHOPS MAY 12TH AND 13TH, YOU WOULD ALSO AUTHORIZE THE, THE BOND RIGHT? VIA ORDINANCE THAT'S SEPARATE, ABOVE AND BEYOND THE BUDGET.
SO TOWN COUNCIL WOULD AUTHORIZE THE ORDINANCE AND THAT'S TWO READINGS AND WE'D KNOW A LOT MORE BY THEN.
WE'D KNOW THE BITS WOULD BE IN, WE'D KNOW THAT IF IT WAS MATERIAL OR NOT.
IN THE WAY I WOULD DEFINE MATERIAL AS IS.
I'M I'M THANK YOU FOR SAYING THAT PERCENTAGE IS ANYTHING THAT'S GOING TO DIP IN AND START AFFECTING OUR FUND BALANCE, UM, AT THAT 20 MILLION EXPECTATION.
UM, ONCE YOU PASS THE ORDINANCE, THEN YOU START STRUCTURING THE BOND AND ISSUING THE BOND, THOSE ARE AGAIN, SEPARATE.
AND SO THERE'S STILL A LOT MORE TO LEARN AND A LOT MORE TO FIGURE OUT.
AND THEN AFTER THAT IT'S JUST DEBT MANAGEMENT AND REPAYMENT.
SO FOR US TODAY, YOU KNOW, IT, IT, WE'RE, WE'RE TALKING ABOUT THE DIFFERENCE BETWEEN 10 AND $4.7 MILLION AND, UH, BOTH WORK FOR ME, I WOULD JUST SAY THIS, UH, RESPECT TO 60 40, 50 50 BOTH WORK AS I LOOK AT THIS BECAUSE I'M USED TO DEALING WITH CASH AND NOT BORROW AND GETTING A LOT DONE WHILE WE CAN AFFORD IT.
BUT I DO THINK THAT WE HAVE TO BE THINKING, AND I'M GLAD WE'RE HAVING A CONVERSATION BECAUSE YOU DO HAVE A FIVE YEAR CAPITAL IMPROVEMENT PROGRAM PRIORITY LIST THAT WE CANNOT FUND WITH ALL CASH.
WE, WE CANNOT FUND IT WITH ALL CASH.
WE CANNOT FUND DREESEN AND ISLANDERS AND, AND, AND COLIGNY AND SOCCER AND BASEBALL AND PICKLEBALL.
WE CAN'T, WE CAN'T KEEP FUNDING IT WITH ALL CASH.
BUT I THINK THAT THERE'S A DESIRE AND, AND, AND I THINK THERE'S A NEED WHEN WE START LOOKING AT STORM WATER PROJECTS.
SO, UM, I'M HAPPY TO BE, I'M, I'M, I'M ELATED TO BE A PART OF THIS CONVERSATION ABOUT WHERE ARE WE USING OUR DOLLARS, HOWEVER, IF WE'RE ISOLATING BEACH 65, UH, 35 WORKS AND ANYWHERE BETWEEN 70 30 AND 60 40 WORK, WE'LL MAKE BOTH WORK.
NEITHER OF THESE AFFECT OUR LONG-TERM HEALTH.
AND I WOULD SAY IN THE ROOM IF I FELT THAT IT WAS, IT'S A PHILOSOPHY.
I'M GONNA ASK SOME QUESTIONS IN A MINUTE, BUT BEFORE I DO, UM, DID, DID WE HAVE ANYBODY SIGN UP TO SPEAK? NO ONE SIGNED UP.
DID ANYBODY WANNA SPEAK SINCE WE HAVE SUCH A BUSY ROOM? YEAH, LET'S MAKE SURE.
ALRIGHT, SO, SO I'M GONNA ASK A COUPLE OF QUESTIONS IF I MIGHT.
UM, AND IT'S NOT TO SAY THAT THIS IS GONNA BE THE FINAL ANSWERS RIGHT NOW, BUT, BUT IT JUST KIND OF GIVES, GIVES, UH, MARK AND STAFF THE DIRECTION ON WHAT WE CAN AGREE UPON.
UM, SO WHEN IT COMES TO THE, THE CURRENT BONDS, THE 7 MILLION, YOU KNOW, ARE, ARE WE GIVING 'EM DIRECTION TO, TO PAY THOSE OFF NOW? OR, OR JUST TO HOLD ON, BASED OFF OF WHAT YOU'VE HEARD SO FAR.
YOU KNOW, JUST HEAD NODS IS KIND OF WHAT I'M GOING FOR.
SO I, I THINK YOU'VE GOT THAT LET'S, YOU KNOW WHAT GETTING THOSE PAID OUT, CLEARED UP IS, IS THE RIGHT WAY TO GO.
UM, THERE'S NO QUESTION FROM THE COMMUNITY.
THERE'S NO QUESTION FROM US WHERE WE ARE THAT'S CLEARED UP, PAID OFF AND, AND AT A HIGHER INTEREST RATE, UM, INCREASE IN, YOU KNOW, THE RESERVES AND, AND, AND I LOVE THE ECONOMIC ESCALATOR.
I THINK THAT IS A VERY, VERY VALUABLE ASPECT OF THAT.
YOU KNOW, UH, UH, I'M, I'M GATHERING THAT EVERYBODY IS PRETTY MUCH IN FAVOR OF THAT AS WELL.
UM, DO WE NEED TO GET, GATHER A LITTLE BIT MORE INFORMATION ON, ON THE, YOU KNOW, THE RETURNS ON THE YIELD CURVES AND HOW EVERYTHING PLAYS OUT BASED OFF OF SOME DIFFERENT DOLLAR AMOUNTS
[01:20:01]
AS TO WHAT MAKES THE MOST SENSE? 'CAUSE I'M NOT HEARING THAT WE HAVE TO MAKE THAT DECISION TODAY.UM, I'M NOT HEARING THAT WE'RE HAVING TO MAKE IT, BUT IF I'M, IF I'M INCORRECT, TELL ME.
BECAUSE I NEED TO KNOW WHAT TO PUT IN THE BUDGET FOR AN ALIGNED MILLAGE SUPPORT THAT.
RIGHT? WELL, I, I WAS GOING BETWEEN THE 50 SUPPORT, YOU KNOW, THE 50 50 AND THE 70 30.
ALRIGHT, WHERE, WHERE DO WE LAND? BUT I WAS HOPING TO HAVE A LITTLE BIT MORE DIRECTION FROM, FROM THE STAFF ON THAT AS TO WHAT IS THE MOST, UH, BENEFICIAL SAY WE, WE, WE HAVE THAT RECOMMENDATION.
ALRIGHT, SO, SO WHEN I STARTED THIS PROCESS, AND THIS WAS A FEW MONTHS AGO, UM, I'M BEING VERY CANDID, I FELT LIKE 50 50 WAS THE RIGHT ANSWER WHEN I STARTED THIS.
AND I STARTED TALKING TO, AND LISTENING TO ALL OF YOU TALK ABOUT HOW YOU FELT ABOUT WHERE WE ARE AND SOME OF THE THINGS THAT YOU'RE PLANNING TO DO OR WE'RE PLANNING TO DO HERE IN THE TOWN.
SO MY, MY, MY DECISION HAS CHANGED FROM 50 50 TO 60 40, UM, TAKING INTO CONSIDERATION THE MANY PROJECTS THAT WE'RE DOING, THE MANY THINGS THAT ARE, ARE TAKING PLACE WITHIN OUR ISLAND.
UM, SO THE RECOMMENDATION THAT I HAVE TODAY IS 60 40.
SO IS IT LOGICAL TO SAY THAT IF WE, IF WE ERR WE COULD ERR MORE ON THE SIDE OF BORROWING BECAUSE WE CAN ALWAYS BUY IT DOWN, RIGHT? YOU CAN AND, AND YOU CAN ALSO ERR ON THE SIDE OF, YOU KNOW, BECAUSE HERE'S THE EXTRA FACTOR, THE PRICE ESCALATOR ABOVE AND BEYOND $20 MILLION.
THAT MEANS, THAT MEANS THERE'S ROUGH MATH, UM, SEAN AND MARK MATH, UH, $7 MILLION A YEAR ABOVE AND BEYOND NEEDS TO BE PUTTING IN FUND BALANCE.
AND SO WHEN YOU HAVE YOUR DEBT SERVICE ABOVE AND BEYOND THAT, YOU'RE NOT GOING TO BE ABLE TO SAVE THE $7 MILLION.
AND SO WHEN YOU FACTOR ALL THAT IN, FORGIVE ME, I DON'T HAVE A SPREADSHEET AND A LINE CHART SHOWING IT.
WE, WE HAVE TO BE THINKING OF INTENTIONALLY WHAT WE'RE TRYING TO PUT IN FUND BALANCE, NOT JUST WHAT WE'RE TRYING TO BORROW OR NOT TO BORROW.
SO IF YOU'RE TRYING TO PUT $7 MILLION A YEAR IN FUND BALANCE OVER SEVEN YEARS MM-HMM
WHICH I THINK IS A MAJOR IMPROVEMENT, RIGHT? I THINK EVERYTHING WE'RE DOING IS A MAJOR IMPROVEMENT.
UM, FUND BALANCE IS GOING UP, INTENTIONALLY SAVING FOR BEACH DIFFERENT THAN EVER.
BUT WHEN YOU'RE TRYING TO SAVE 7 MILLION A A YEAR, YOU GOTTA BE, YOU, YOU CAN'T HAVE SO MUCH DEBT, YOU CAN'T, CAN'T DO THAT.
BUT I THINK, UH, DAVID, UM, BROUGHT A GOOD POINT.
WE DON'T KNOW AT THIS POINT HOW MUCH THIS PROJECT IS GOING TO COST.
SO I WILL, WE WILL BE SAYING HERE 70, 30, 60 40, 50 50, BUT UNTIL WE KNOW THE REAL NUMBER, I THINK THAT'S, THAT'S GOING TO BE, THAT'S GOING TO BE A, A BIG DECISION MAKING AND THIS MIGHT CHANGE.
UM, SO RIGHT NOW, UM, I KNOW OUR FINANCIAL ADVISORS MENTIONED 50 50 AND I MENTIONED 60 40.
IT IS A HARD DECISION, BUT IT IS ALSO SOMETHING THAT, UM, I THINK WE'RE THINKING LONG TERM, MORE LONG TERM NOW, WE'RE THINKING FIVE YEARS AS IT RELATES TO CIP.
WE'RE THINKING ABOUT, YOU KNOW, THE STORMS THAT ARE HAPPENING, THE DIFFERENT THINGS THAT WE'RE DOING THAT WE WANT TO DO ON THE ISLAND.
SO THAT SHOULD BE PART OF THE CONSIDERATION THAT YOU NEED TO KEEP IN MIND WHEN YOU'RE SELECTING THE RIGHT THING FOR US TO DO.
UM, JUST LISTENING TO THE CONVERSATION, MR. MAYOR, UM, WITH THE BIDS COMING IN VERY SOON, FIRST READING, BEING BEFORE US, JUST AFTER THAT, UM, YOU KNOW, MY PERSPECTIVE IS THE, THE EXPERTS, THE SUBJECT MATTER EXPERTS,
AND YOU NEED TO BORROW, PROTECT YOURSELF AS FAR AS THE FUTURE'S CONCERNED.
UM, SO AT THIS POINT, MR. MAYOR, YOU KNOW, I'M PREPARED TO SAY IF IT'S SOMEWHERE BETWEEN 60 40 AND 50 50 THAT THE STAFF AND THE FINANCIAL ADVISORS COME BACK WITH, FOR US TO VOTE AT OUR FIRST READING OF MAY.
I THINK WE HAVE BEAT THIS THING TO THE POINT WHERE THEY KNOW WHERE TO GO AND, AND BRING US BACK SOMETHING THAT MAKES SENSE.
AND I WOULD NOT BE OPPOSING A BUDGET IN FRONT OF US IF IT WAS 62 38, BECAUSE I'M BENT ON 50 50.
SO, UM, I I'M READY TO HAND IT OVER TO OKAY.
OTHER COMMENTS? ONE QUICK COMMENT.
WE DON'T HAVE BOND COUNCIL HERE, BUT I KNOW WE'VE LOOKED AT THE TIMING, UH, BASED UPON WHEN WE NEED TO HAVE THE FUNDS AVAILABLE AND, AND WHAT KIND OF TIMING.
'CAUSE ONCE YOU DECIDE ON A NUMBER THAT'S IN YOUR, UM, IN YOUR ORDINANCE, IN YOUR ADVERTISEMENT, UM, AND SO YOU CAN'T CHANGE IT AS I RECALL.
UM, SO ANY IDEA ABOUT, I I HEARD YOU SAY MR.
[01:25:01]
ORLANDO, THAT TODAY BECAUSE OF THE BUDGET, AND SO I'M THINKING TODAY WOULD BE ALSO THE ANSWER BASED ON, UM, THE BOND ORDINANCE PROCESS.SO WE HAVE 15 DAYS BEFORE WE HAVE TO PUT OUR NOTICE, UH, PUBLICLY.
UM, BUT YOU PROBABLY KNOW THIS BETTER THAN ME, MARK.
UM, AS IT DELAYS, ONCE WE PUT IT OUT THERE, CAN WE CHANGE IT? I DON'T KNOW THE ANSWER TO THAT.
YEAH, BACKWARDS A LITTLE BIT EASIER THAN FORWARDS IN TERMS OF MATERIAL CHANGE OR NOT.
I THINK MS. BRYSON WAS ASKING ME ABOUT THE SCHEDULE FOR BONDING.
IT, IT, IT'S, IT'S, IT'S NOT COMPLETELY 100% IN ALIGNMENT WITH THE BUDGET BECAUSE I NEED YOU TO ADOPT THE BUDGET BEFORE I HAVE THE CONFIDENCE TO FLOAT THAT BOND.
AND SO, BUT IT IS SOON THEREAFTER, AND IT'S ONLY, IT'S NOT ONLY, IT'S TWO READINGS OF TOWN COUNCIL AND THEN TO BOND MARKET.
UM, I WILL TALK WITH BRAND BECAUSE THERE ARE SOME VARIABLES WHEN I SHOW UP WITH FIRST READING, I MAY NOT KNOW WHAT THE BOND MARKETS ARE TELLING ME.
SO WHAT I MIGHT ASK YOU FOR IS A RESOLUTION THAT GIVES ME THE, THE CONFIDENCE TO, TO BID AND THEN BRING YOU BACK THE RESULTS.
OR YOU CAN TELL ME I TRUST YOU, UM, THROUGH THAT RESOLUTION GO BID AND AS LONG AS IT COMES BACK WITHIN THESE CENTER LINE, YOU KNOW, WITH, WITHIN THESE TWO LINES BONDED.
SO AGAIN, I THINK THAT'S SOME CONVERSATION I NEED TO HAVE WITH TOWN COUNCIL.
UM, BUT IT, IT, IT'S A NON-ISSUE IS JUST A MATTER OF TIMING, POST BUDGET ADOPTION, WHICH IS JUNE 3RD, I WOULD IMAGINE THIS IS HAPPENING FOR US IN JULY AND AUGUST.
WE, WE HAVE DOLLARS ALREADY IN PLACE, RIGHT? SO IN THE BUDGET, WE HAVE TO PLACE THE REVENUE IN THERE BECAUSE WE HAVE TO GO UNDER CONTRACT.
I DO THINK IT'S VERY IMPORTANT WE REMIND EVERYBODY THE, THE REASON AND IT'S NOT, IS NO, THERE'S NO FAULT.
WE ARE RENEWING THIS BEACH SOONER THAN EXPECTED, SOONER THAN ANTICIPATED, AND WE'RE COMPETING WITH A DEADLINE.
AND THE DEADLINE IS THE FEMA GRANT AGREEMENT AND THE REIMBURSEMENT.
AND WHILE THAT GRANT AGREEMENT AND REIMBURSEMENT'S IN PLACE, WE WEREN'T ABLE TO COME FORWARD WITH ALL OF THIS CONFIDENTLY, LET ALONE BID, BID UP 47 AND A HALF MILLION DOLLARS.
WELL, IF ANYONE'S LISTENING A $32 MILLION BEACH RENOURISHMENT PROJECT, UM, WHICH IS SOME OF OUR, SOME OF OUR DISCONNECT WITH OUR BIDS, BUT WE COULDN'T BID IT WITHOUT THE PERMIT IN HAND.
AND WE WORKED FOR A LONG TIME AND WORKED HARD TO, TO HAVE THE PERMIT IN PLACE THAT WAS APPROPRIATE FOR THE BEACH AND THE PRESERVATION AND THE ENVIRONMENT, AND ALSO FOR THE RESIDENTS AND THE USERS OF THE BEACH.
BUT WE ARE NOW UP AGAINST THE SHOCK CLOCK ABOVE THE BACKBOARD, UM, FOR FEMA.
OTHERWISE WE WOULDN'T BE TRYING TO GET ALL THIS DONE IN ALIGNMENT RIGHT THIS SECOND.
SO IT'S IMPORTANT THAT WE UNDERSTAND THAT NONE OF THIS IS ISOLATED.
IT'S NOT JUST A FINANCIAL DECISION.
SO ON A, ON A DIRECTION FOR, FOR STAFF, IS ANYBODY AND ANYBODY CHANGING WHERE THEY WERE AT FROM A 50 50, 60, 40, 70, 30 BASED OFF OF THE CONVERSATION THAT WE'VE HAD? I'M NOT CHANGING.
I ALREADY HAD YOU WRITTEN DOWN
I'VE ALREADY THOUGHT IT THROUGH WITH A LOT OF DETAIL.
AND, AND, UM, FOR CLARITY, 70 30.
70 30, AND, UH, I AM COMFORTABLE, I WAS, UM, WISHY-WASHY IS A TERRIBLE WORD ON THE PAYMENT OFF OF THE BOND.
UM, I COULD GO EITHER WAY WITH THAT, BUT YOUR COMMENT ABOUT, UH, THE STACKING AND THE IMPACT ON THE RATING, UM, AND I DIDN'T REALLY HAVE A STRONG FEELING ONE WAY OR ANOTHER.
I THINK THAT MAKES SENSE TO PAY IT OFF.
STEVE, IF YOU HAD TO DO A PERCENTAGE, WHERE WOULD YOU LIE? LAND.
SO, YOU KNOW, I'VE BEEN TAKING, TAKING NOTES AND, AND, AND YOU KNOW, MR. ALFRED, YOU'RE STILL 50 50, YOU KNOW, UM, THIS IS HOW I, I LOOK AT IT FOR WHATEVER IT'S WORTH.
UM, COMING IN WITH A DEBT COVERAGE RATIO CURRENTLY WHERE WE ARE ALMOST, I THINK IT'S AN OPPORTUNITY TO IMPROVE THAT, RIGHT? SO I, I LOOK AT THAT 4.45 AND I LIKE THAT.
I LIKE BEING A LITTLE BIT MORE CONSERVATIVE AND PROTECTING THAT, THAT BORROWING POWER, POWER.
UM, AND THEN, YOU KNOW, WE'RE LOOKING AT INTEREST COST OF 2.8, 3.8, 4.8, RIGHT? SO KIND OF JUST, YOU KNOW, GOING TO THE GAP THERE AND, AND, AND A 60 40 AT A, AT A 3.8 NUMBER, YOU KNOW, IT, IT'S CLOSE TO EVERYTHING ELSE WE'RE TALKING TO.
AND I THINK IT'S REALLY MINOR IN, IN O OVERALL SCHEME.
AND THE FACT THAT WE'RE TYING IT TO SEVEN YEARS, THE, THE LIFE OF THE PROJECT, I THINK IS, IS THE BEST WAY TO DO IT.
SO, YOU KNOW, MR. BROWN WAS A 60 40 TO 50 50, SOMEWHERE IN BETWEEN.
SO I, WHAT I'M HEARING IS THAT BASICALLY THE DIRECTION IS, IS PRETTY MUCH A 60 40, UM,
[01:30:01]
LOOK AT BORROWING, WE'LL ADJUST THE BUDGETS ACCORDINGLY.AND, AND THAT'S, I I HOPE Y'ALL TAKE AWAY THAT IT'S, IT MAY NOT BE AN EXACT POINT BECAUSE THERE IS GONNA BE AN INFLECTION POINT WHERE ONE MAKES MORE SENSE OVER THE OTHER.
AND THAT'S WHAT I THINK WE ALL WANNA SEE, YOU KNOW, TO, TO HELP MAKE THAT BEST DECISION.
ANY OTHER COMMENTS, QUESTIONS? SO BEF GO AHEAD, STEVE.
JUST A STAFF QUESTION, KIND OF RELATED, BUT RELATED.
UM, SO WHEN THE BIDS COME IN, UM, AND ASSUMING, WHICH I'M SURE ALL THE
UM, ALSO OUR, OUR BEACH CONSULTANT WILL BE INVOLVED IN HELPING US EVALUATE THE BID.
WHO WILL OUR BEACH CONSULTANT, CHRIS CREED WITH, UH, BOTH BEN WHO TAKES THAT CONTRACTOR AND, AND FOR ALL THE BIDDERS LISTENING AROUND NEGOTIATES THE REAL PRICE IFB.
SO PRICE WILL BE THE PRICE WITH A LOW BID, EVEN AFTER, EVEN AFTER THE EVALUATION, WHEN IT'S AN IFB, WE HAVE CERTAIN RESTRICTIONS THAT ARE PLACED IN US BY THE STATE AS FAR AS WHAT WE CAN AND CAN'T DO.
UH, ONCE THAT BID IS RECEIVED, THERE'S CERTAINLY THINGS THAT WE CAN ASK DURING THE BID PROCESS.
UH, BUT ONCE, IF IT'S, IF IT'S DETERMINED, BE A VALID PRICE AND A VALID BID, THEN WE HAVE THERE, THERE ARE STATE LIMITS AS TO WHAT WE CAN AND CANNOT ACCEPT FOR WHAT'S UNFORTUNATE.
JUST SO EVERYBODY'S UNDERSTANDING WHAT YOU'RE SAYING.
SO, UM, I JUST WANT TO SAY THIS JUST FOR EVERYBODY THAT'S HERE, AND OF COURSE ANYBODY THAT'S GONNA WATCH THIS NOW OR LATER, UM, WE ARE THE ONLY MUNICIPALITY IN THE STATE OF SOUTH CAROLINA AND OTHERS AS WELL THAT HAVE THE ABILITY TO PAY CASH THAT DO NOT NEED TO GO TO THE COUNTY, DO NOT NEED TO GO TO THE STATE, AND DO NOT NEED TO GO TO THE FEDERAL FUNDING SOURCES TO PAY FOR OUR BEACH RENOURISHMENT.
THAT ALLOWS US GREAT FLEXIBILITY IN WHAT WE CAN DO.
AND, AND I, IT'S IMPORTANT FOR THAT TO BE SAID BECAUSE, UM, HILTON HEAD ISLAND PAYS FOR ITS BEACH RENOURISHMENT, NOT BEAUFORT COUNTY, NOT THE STATE OF SOUTH CAROLINA, NOT THE FEDERAL GOVERNMENT.
WE PAY FOR OUR BEACHES AND WE MAINTAIN OUR BEACHES.
SO I, I WANT IT TO BE CLEAR THAT, UM, THAT OUR GUESTS THAT ARE HERE, THAT SPEND NIGHTS IN OUR ROOMS ARE THE ONES THAT ARE PAYING FOR THIS.
AND IT IS OUR ECONOMIC DRIVER THAT MAKES CERTAIN THAT WE ARE ABLE TO AFFORD A LOT THAT WE'RE TALKING ABOUT DOING WITHIN OUR CIP.
UM, AND, AND I, AND I CAN'T STRESS IT ENOUGH THAT HOW, THAT WE'RE SO FORTUNATE TO HAVE PREVIOUS COUNCILS TO HAVE PUT THIS INTO PLACE AS A PROTECTION ASPECT FOR OUR COMMUNITY.
UM, AND, AND TRYING TO ADDRESS IT GOING FORWARD, MAKING CERTAIN THAT IT IS MORE THAN SUBSTANTIAL AND THAT WE'VE GOT IT COVERED FOR, FOR RESILIENCY AND EVERYTHING ELSE IS VERY IMPORTANT.
UM, I JUST WANNA MAKE THOSE POINTS.
SO, UM, WITH THAT BEING SAID, KIM, HAS ANYBODY SIGNED UP TO SPEAK ON NON AGENDA ITEMS? NO PUBLIC COMMENT.
ANY, ANY LAST COMMENTS BY ANYBODY? I COULD JUST, MR. ORLANDO, IF I COULD JUST PARAPHRASE WHAT WE'RE GOING TO DO MOVING FORWARD.
YES, I THINK THAT JUST HELPS THE ROOM.
JUAN, FIRST AND FOREMOST, YOU MADE A A POINT.
YEAH, MR. MR. RILEY AND, AND THE TEAM PUTTING, PUTTING THIS REVENUE SOURCE IN PLACE HAS, HAS BEEN A GIFT.
AND SO I THINK THAT WE'RE ACTUALLY MAKING SOME GOOD DECISIONS ABOUT OUR FUTURE FROM CHANGING 12 TO 20 AND ESCALATING THAT OVER TIME.
SO I, UH, I'M PROUD OF INTERNALLY, BUT VERY GRATEFUL FOR THOSE FOLKS THAT WERE HERE BE BEFORE OUR TIME.
UM, SORRY, I FLIPPED THE PAGE OVER.
SO WE'RE GONNA BRING YOU A BUDGET FORWARD IN THE, IN THE COMING WEEKS, RIGHT? SO THE BUDGET, UM, IS PRESENTED TO THE PUBLIC THE FIRST TUESDAY OF MAY.
UH, I HAVE TO POST A PUBLIC HEARING NOTICE ON THAT A COUPLE WEEKS, 15 DAYS AHEAD OF TIME.
SO PROBABLY 16, 17 DAYS AHEAD OF TIME WILL, UM, PROPOSE A BUDGET THAT
[01:35:01]
WILL BE PUBLIC.AND, AND THAT'S JUST HOW THE PUBLIC HEARING PART OF IT WORKS.
BEFORE I EVEN PRESENT THE FULL BUDGET, YOU WILL SEE A PUBLIC HEARING NOTICE THAT INCLUDES THE VARIOUS FUNDS, THE MILLAGE, AND ALL OF THOSE FACTORS.
SO I WILL FACTOR ALL OF THIS IN THERE.
AND THAT'S TO ADRIANA'S POINT EARLIER, WELL, WELL, THE BUDGET'S NOT TILL MAY 3RD.
WE HAVE TO MAKE THIS DECISION RIGHT NOW BECAUSE I HAVE TO POST PUBLIC HEARING.
SO WITH THAT BEING SAID, WE WILL PAY OFF THE CALLABLE BONDS IN THE BUDGET, RIGHT? SO THIS, THE, THE, THE BUDGET PREP PART OF THIS, PAY OFF THE CALL OF BONDS, A FUNDING SCENARIO OVER SEVEN YEARS, NOT 10, WHICH I THINK IS A DRASTIC IMPROVEMENT.
WE HAVE TO DETERMINE THAT CASH VERSUS DEBT PERCENTAGE.
UH, FRANKLY, WHEN I'M WALKING IN THE ROOM TODAY, I'M LEANING CLOSER TO 70 30, BUT I'M HEARING YOU ALL SAY 50 50, 60 40, AND ALL VERY, VERY GOOD REASONS FOR OUR FUTURE.
AND I'M ALSO CONSIDERING THE FEMA GRANT AGREEMENT.
WELL, IT'S NOT A GRANT, IT'S A REIMBURSEMENT AGREEMENT WE HAVE WITH THEM.
UM, IT'S STILL NOT GUARANTEED.
SO WHEN I, WHEN I FACTOR ALL THAT IN AND AS SOME GREAT POINTS TODAY, UH, YOU WILL ALSO SEE A, A, A BUDGET WITH A BEACH PRESERVATION FUND BALANCE GOING FROM 12 TO 20 AT A MINIMUM RIGHT NOW, BUT WITH SOME STATED GOALS FOR THE FUTURE ANNUALLY TO ESCALATE THAT.
UM, YOU'LL ALSO SEE SOME FUND BALANCES ON OTHER FUNDS.
UM, AND TO YOUR POINT EARLIER, WE'RE GONNA START LOOKING AT RETAINING SAND AND NOT JUST PUMPING IT BACK.
I THINK THAT IS VERY IMPORTANT.
YOU KNOW, IN ADDITION TO DOLLARS IN OTHER AREAS, THEY DON'T HAVE SAND, RIGHT? AND SO WE ARE SO FORTUNATE.
SAND IS GOLD IS SOMETHING I LEARNED, JEFF.
ISN'T THAT ONE? YOU WERE WITH YOUR PEOPLE.
I LEARNED SAND IS GOLD AT, AT THAT, AT THAT.
UM, BUT I'M, I'M ALSO GONNA BRING YOU SOMETHING BACK THAT SHOWS A DEBT SERVICE COVERAGE OF FOUR PLUS.
AND THEN ALSO WITH THAT, I WILL HAVE A SCHEDULE PROCEEDING WITH THE BOND.
WE, WE NEED TO SPEND A LITTLE BIT OF TIME PLANNING THAT AGENDA, RIGHT? WITH FRA HEISER INCLUDED.
AND IT CAN INCLUDE A RESOLUTION TO KICK IT OFF, OR WE COULD GO STRAIGHT TO FIRST READING AND THEN, AND THEN BID, BID FOR THE BOND.
SO SOME GOOD, JUST GREAT, I'M VERY EXCITED.
THE FACT THAT WE'RE TRYING TO DECIDE OVER 4.7 MILLION OR 10 WHEN THE CASH IS THERE.
UH, THE FEMA OF ALL THINGS IN THE ROOM, TWO THINGS FOR ME ARE RISK NOT KNOWING THE PRICE OF THIS YET.
AND, AND THAT'S ON THE 17TH AND IT'S AFTER THE PUBLIC HEARING GOES OUT, AND THEN SEP SEPARATELY, UM, SEPARATELY, UH, THE FEMA REIMBURSEMENT.
THE, THE, THE PERMIT USED TO BE A BIG CONCERN.
IT WAS KEEPING US UP LATE, BUT WE HAVE THAT.
AND I APPRECIATE YOUR TIME AND GREAT JOB BY ADRIANA, OUR TEAM, AND APPRECIATE ALL OF THE TOWN COUNCIL MEMBERS, UM, INPUT AND FEEDBACK VERY MUCH.
THANK YOU ALL FOR YOUR, YOUR INPUT TODAY AND CONVERSATION.
YOU'RE WATCHING BEAUFORT COUNTY TV.
I'M THE OFF PARK RANGER HERE AT DREW ISLAND STATE PARK.
COME SPEND THE DAY WITH ME HERE WE ARE AT DRY STATE PARKS MARINA.
I AM OVER MANAGING THE SLIPS HERE AT THE MARINA.
48 OF 'EM ARE 25 BY 15 FOOT SLIPS, AND THEN WE HAVE TWO 50 FOOTER SLIPS.
UM, I'VE BEEN OVER THE MARINA PROGRAM FOR A FEW YEARS NOW, AND, UH, WHEN I FIRST STARTED WE HAD EIGHT SLIPS FILLED OUT OF 50.
AND, UM, AFTER RUNNING IT FOR ABOUT 13 MONTHS, WE WERE ABLE TO REACH FULL OCCUPANCY.
UM, AND AS OF RIGHT NOW, I'VE HAD A WAIT LIST WITH ABOUT 15 EVER SINCE.
UM, WE GIVE SPECIAL OFFERS ON, UH, SLIP PRICES FOR THE 25 BY 15 FOOT SLIPS.
UM, IF YOU, YOU CAN DO A SIX MONTH OR A 12 MONTH IS THE ONLY TWO WE OFFER.
IF YOU DO THE 12 MONTH AND YOU CHOOSE TO PAY UP FRONT, YOU GET A 10% DISCOUNT.
IT'S $2,700 RATHER PAYING, UM, MONTH BY MONTH.
IT'S TWO 50 A MONTH, WHICH ADDS UP TO THREE GRAND.
[01:40:01]
LEASE IS $1,500.UM, WHETHER YOU PAY IT ALL UPFRONT OR $250 PAYMENTS, I'M RESPONSIBLE FOR GENERATING INVOICES FOR OUR CURRENT LEASERS AS WELL AS SETTING UP NEW CONTRACTS, UM, AS WELL AS RESPONSIBLE FOR CLEANING OF THESE PEDESTALS, CHECKING THE UTILITIES, THE WATER, THE POWER.
WE HAD A COLD SNAP RECENTLY HAD TO MAKE SURE THAT, UH, I SET A DRIP SO THESE WOULDN'T BE WITHOUT, UM, RUNNING WATER FOR THE, UM, PEOPLE THAT COME OUT HERE OFTEN.
UM, AS WELL AS, UM, YOU KNOW, KEEPING UP WITH THE LEASERS THEMSELVES AND GETTING TO KNOW 'EM ON A FACE-TO-FACE BASIS.
AND KNOWING, UM, KNOWING WHO I HAVE HERE AT THE MARINA, WE HAVE A FEW REGULARS, UM, AND THEY'RE A VITAL PART IN KEEPING THE, UH, MARINA UP TO DATE.
THEY LET ME KNOW IF SOMEONE'S BOATS COME LOOSE OR IF THERE'S BEEN DAMAGE TO A STORM.
UM, THE WATER'S DOWN RIGHT NOW, SO IT'S, UH, UM, IT IS A BIT OF AN ISSUE KEEPING TRACK OF, UM, THE SAFETY OF THESE BOATS.
UM, THE MARINA'S LIKE MY BABY, I'VE HAD A CHANCE TO, UM, WATCH IT GROW.
UM, A LITTLE BIT OF HISTORY ABOUT THE MARINA.
UM, WE HAD AN OLD MARINA THAT USED TO BE RIGHT HERE.
UM, AND THEN IN 2008 WE HAD A REALLY BAD STORM THAT CAUSED ENOUGH DAMAGE THAT OVER THE YEARS AFTER THAT, UM, THE MARINA BEGAN TO SINK.
UM, LATER WE GOT THE BUDGET TO REDO THE MARINA, UM, WHICH IS WHAT YOU SEE HERE, AS WELL AS REDOING THE, UH, BATHHOUSE UP ON THE HILL, REMODELED ALL THE BATHROOMS, UM, SHOWERS, ALL THAT GOOD STUFF, ADDED HEAT AND AIR TO IT.
SO NEXT WE'RE GONNA GO TO ANOTHER FACILITY WHERE I'LL DEMONSTRATE SOME OF THE RESPONSIBILITIES I HAVE AS OUR SAFETY OFFICER HERE AT DRY ALLEN STATE PARK.
HERE WE ARE AT DRY ALLEN'S GAS STOCK RIGHT NEXT TO OUR TACKLE SHOP.
UM, AND HERE I'M GONNA SHOW YOU ONE OF THE RESPONSIBILITIES AS SAFETY OFFICER IS CHECKING ALL OF OUR FIRE EXTINGUISHERS.
UM, THIS IS THE BIGGEST ONE WE HAVE ON PARK.
UM, IT'S RATED SPECIFICALLY FOR THE GAS DOCK.
AND WHAT WE DO WHEN WE INSPECT A FIRE EXTINGUISHER, UM, IS FIRST YOU TAKE IT OFF ITS STAND AND YOU CHECK THE GAUGE, UM, SEE IF IT'S NOT UNDER OR OVERCHARGED.
BUT THE MAIN THING THAT YOU WANT TO CHECK, UM, AS SOMEONE WHO'S NOT A, UM, A CERTIFIED FIRE TECH IS, UM, IF YOU TURN IT UPSIDE DOWN, LIKE SO IF THE WEIGHT SHIFTS GRADUALLY, THAT MEANS YOU KNOW THAT THE CONTENTS ISN'T CLUMPED UP TOGETHER.
AND YOU CAN KEEP DOING THAT JUST TO SEE.
BUT IF YOU FEEL A BIG CLUMP, THAT MEANS IT'S CLUMPED UP TOGETHER, IT NEEDS TO BE REPLACED.
UM, AND I DO THIS WITH ALL 42 FIRE EXTINGUISHERS.
WE HAVE ON PARK, WE HAVE 'EM IN THE CAMPGROUNDS, EVERY FACILITY, OUR CABINS, VILLAS, UM, OUR TACKLE SHOP, AS WELL AS THE GAS DOCK.
AND THE MAIN THING IS TO CHECK THAT AND TO CHECK THE CHARGE.
AND THEN WHEN YOU'RE DONE, YOU CAN JUST HANG IT BACK UP AND THEN YOU CAN SIGN OFF ON THIS SPECIFIC MONTH, UM, WHICH THIS IS JANUARY.
UM, AND I'LL NOTE THAT ONCE A YEAR I HAVE, UM, A CERTIFIED FIRE TECH COME OUT AND HAVE THESE SERVICED.
I JUST HAD THIS ONE SERVICED, UM, IN DECEMBER, RIGHT BEFORE CHRISTMAS.
SO THIS ONE'S PRETTY MUCH GOOD FOR A WHOLE NOTHER YEAR.
UM, ANOTHER ASPECT OF BEING A SAFEST OFFICER HERE AT DREW ISLAND STATE PARK IS, UM, FACILITY INSPECTIONS, MAKING SURE EVERYTHING'S SAFE, MAKING SURE WE'RE STAYING UP TO DATE ON, UM, SCHEDULED MAINTENANCE ON OUR, UM, HVAC, ON ANYTHING THAT NEEDS IT, LOOKING FOR STRUCTURAL DAMAGE, LOOKING FOR ANYTHING THAT MIGHT NEED REPLACING OUR ATTENTION.
UM, AND OF COURSE FILING THE, UM, MONTHLY PAPERWORK FOR OUR FIRE EXTINGUISHER INSPECTIONS AS WELL AS THE FACILITIES.
UM, SO WE CAN STAY UP TO DATE AND BE OFFICIAL.
NEXT, WE'RE GONNA GO AND WE'RE GONNA TALK ABOUT THE LEAK.
HERE WE ARE ON OUR MAIN CAUSEWAY BRIDGE HERE AT DREW ISLAND STATE PARK.
UM, PERSONALLY THIS IS MY FAVORITE PART ABOUT COMING TO WORK, IS DRIVING ACROSS THIS CAUSEWAY BRIDGE AND LOOKING OUT AT THE LAKE EVERY DAY.
UM, AS I SAID EARLIER, THE LAKE'S DOWN PRETTY LOW RIGHT NOW.
UM, EVERY WINTER THEY DROP THE LAKE A FEW FEET, BUT THIS YEAR IS THE 10 YEAR LOW.
EVERY 10 YEARS THEY DROP THE LAKE SIGNIFICANTLY LOW, UM, TO KILL AN INVASIVE HYDRILLA PLANT AS WELL AS FOR PEOPLE TO WORK ON THEIR DOCKS.
AND SINCE THE DAM AND THE TOWERS ARE SO OLD, IT GIVES THEM A CHANCE TO MAINTENANCE THOSE AS WELL.
UM, LAKE MURRAY IS 50,000 ACRES, UM, OF MANMADE LAKE AND ANDREA ISLAND.
UM, BENEFITS FROM THIS LAKE HEAVILY.
UM, IT BRINGS SO MUCH, SO MANY GUESTS TO OUR PARK.
UM, THEY COME TO HANG OUT HERE AT THE SHELTERS.
UM, PITCH A HAMMOCK LAY OUT AT THE LITTLE BEACHY AREA WE HAVE AT OUR OLD OFFICE.
UM, IT BRINGS A LOT OF VISITORS COME SUMMERTIME.
UM, ALSO IN THE SUMMERTIME, UM, BRINGS ALL OF OUR BIG GAME TOURNAMENTS.
DREW ISLAND'S KNOWN FOR ALL OF ITS FISHING TOURNAMENTS.
WE HAVE 'EM YEAR ROUND, JUST ABOUT EVERY WEEKEND.
UM, TO HIGHLIGHT ONE BIG ONE, DREW ISLAND GOT THE OPPORTUNITY TO HOST THE WORLD BASS CHAMPIONSHIP WHERE WE HOSTED 25 COUNTRIES, UM, FOR A WEEK AND WATCH THEM SHOOT OUT EVERY DAY AND COME IN AND SAW THE BIG WEIGH-INS.
AND THAT'S JUST ONE OF THE MANY BIG ONES THAT WE HAVE HERE.
UM, THAT'S A BIG JOB FOR OUR OPENING SHIFT HERE AT DREW ISLAND IS TO, UM, DIRECT ALL THE
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BOATERS FOR THOSE TOURNAMENTS AND, AND PARK 'EM AND MAKE SURE THAT WE CAN HOUSE ALL THOSE FISHERMEN FOR, UH, FOR THOSE TOURNAMENTS.WE HAVE THE BIG BASS, UH, CHALLENGE AND WE HAVE A WHOLE BUNCH OF SMALL TOURNAMENTS RANGING ANYWHERE BETWEEN 15 BOATS ALL THE WAY UP TO 150.
IF YOU'LL NOTICE, OVER HERE IS OUR FRONT CAMPGROUND, WHICH IS NEWLY RENOVATED.
UM, IT RECEIVED, UM, UPGRADES FOR ELECTRICAL, UP TO 50 AMP SERVICE, UM, NEW WATER, AND EVEN ADDED, UH, SEWER HOOKUPS AS WELL.
SO, UM, WHEN THIS ONE OPENS UP, HOPEFULLY EARLY SPRING, UM, IT'LL BE OPEN FOR THE GUESTS TO ENJOY A BRAND NEW CAMPGROUND WITH, UM, BRAND NEW FACILITIES.
UM, NEXT WE'RE GONNA GO AND WALK THROUGH ONE OF OUR VILLAS AND MAKE SURE IT'S READY FOR A GUEST CHECK-IN HERE WE ARE AT DREW ISLANDS VILLAS.
UM, THIS IS VILLA ONE BEHIND ME, BUT WE HAVE FIVE VILLAS, UM, VILLAS ONE, THREE AND FIVE ARE THREE BEDROOMS AND VILLAS TWO AND FOUR ARE TWO BEDROOMS. UM, THESE ARE A WONDERFUL OPPORTUNITY FOR PEOPLE THAT, YOU KNOW, AREN'T INTO THE, THE CAMPING LIFE OR THE TENT LIFE, UM, GLAMPING AS PEOPLE CALL IT.
UM, THESE PRICES RANGE ANYWHERE BETWEEN 1 35 A NIGHT TO MAYBE EVEN, UH, AS FAR AS TWO 50 A NIGHT, DEPENDING ON TIME OF YEAR, TWO BEDROOM, THREE BEDROOM.
UM, IF IT'S A WEEKEND WEEKDAY OR IF IT'S THE ONLY ONE LEFT.
UM, BILL IS ONE AND TWO ARE THE NEWLY REMODELED INSIDE AND OUT, NEW FURNITURE, NEW PAINT FLOORS, ALL THAT GOOD STUFF.
UM, THERE IS A DOCK BEHIND VILLA ONE.
IT IS THE ONLY DOCK THAT WE HAVE, UM, HERE AT THE VILLAS, BUT IT IS A COMMUNAL DOCK.
AND THE REASON THAT IT'S, IT'S ONLY BEHIND VILLA ONE IS BECAUSE VILLA ONE IS OUR HANDICAP ACCESSIBLE VILLA.
UM, BUT ANY VILLA CAN USE THAT DOCK AS A PLEASE.
UM, BUT WE'RE HERE TO DO A WALKTHROUGH OF THE VILLA, SO IF YOU WANNA FOLLOW ME, WE'LL GO AHEAD AND DO A WALKTHROUGH AND, UH, I'LL LET YOU KNOW EVERYTHING THAT GOES IN WITH THAT.
SO AS YOU'LL SEE, I USED A KEY CARD.
WE WERE ABLE TO INSTALL, UM, KEY CARD LOCKS AT ALL OF OUR VILLAS AND OUR CAMPER CABINS, AS WELL AS THE BATH HOUSES FOR THOSE.
UM, MAKES IT EASIER IN CASE, UH, OUR METAL KEYS GET LOST.
UM, AND IT'S BEEN A REAL, UH, TREAT TO USE.
SO THIS IS THE INSIDE OF VILLA ONE.
UM, WHAT I'M IN HERE TO DO IS TO WALK THROUGH IT AND MAKE SURE THAT IT'S READY FOR A GUEST, UM, DOWN TO THE NITPICKY STUFF.
UM, MAKE SURE THAT THE, UM, IT WAS CLEANED PROPERLY AND THAT WE DON'T HAVE ANY COMPLAINTS OUT OF OUR GUEST WHILE THEY STAY WITH US.
SO THEY HAVE THE BEST, UM, EXPERIENCE, UM, TOTAL.
SO WE ALWAYS, UH, CHECK THE FIREPLACE TO MAKE SURE THAT IT WORKS GREAT, WHICH IT DOES REMOTE'S PROGRAMMED AND EVERYTHING.
I'LL TURN THAT BACK OFF BECAUSE IT IS A LITTLE WARM IN HERE.
UM, WE TRY TO CHECK EVERY LAMP TO MAKE SURE THAT IT LIGHTS UP.
UM, EVERY LIGHT IN THE VILLA, WE WANNA MAKE SURE WORKS.
UM, OF COURSE WE, WE CHECK THE TV, MAKE SURE THEY WORK.
AND IN THE BATHROOM WE'RE GONNA CHECK AND MAKE SURE ALL THE LIGHTS WORK LIKE THE REST OF THE VILLA.
MAKE SURE THAT ALL THE TOWELS HAVE BEEN, UH, PUT IN PROPERLY AND AND STORED.
WE'RE GONNA CHECK THE CLEANLINESS OF THE, UH, THE TUBS AND MAKE SURE THAT THERE'S NO DIRT HAIR OR ANYTHING LIKE THAT.
WE WANNA MAKE SURE THAT EVERYTHING LOOKS GOOD.
UM, WE WANNA MAKE SURE THAT, UH, WE HAVE RUNNING WATER, FLUSH THE TOILETS, YOU KNOW, CHECK BEHIND, MAKE SURE EVERYTHING'S CLEAN.
THEN WE GO IN TO CHECK IN THE FIRST BEDROOM.
I LIKE TO DO IT IN A BIG CIRCLE SO I DON'T MISS ANYTHING WALKING THROUGH THESE VILLAS.
WE CHECK ALL THE DRAWERS TO MAKE SURE THAT A GUEST DIDN'T LEAVE ANYTHING BEHIND AND PREVIOUS DAY.
MOST IMPORTANTLY, WE WANT TO CHECK UNDER THE BEDS TO MAKE SURE THERE'S NOTHING UNDER THERE THAT, UM, WILL CAUSE AN ISSUE FOR A GUEST.
CHECK AROUND IN THE NIGHTSTAND AS WELL.
WANNA RUN OUR HAND ACROSS THE TABLE? MAKE SURE THERE'S NO DIRT OR CRUMBS LEFT FROM ANY PREVIOUS DAY.
WANNA CHECK THESE LIGHTS RIGHT HERE? MAKE SURE ALL THAT DON'T TURN ON.
WE'LL GO OUTSIDE REAL FAST AND WE'LL CHECK THE, UM, PORCH TO MAKE SURE EVERYTHING LOOKS GOOD.
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MAKE SURE THE LIGHTS OUT HERE WORK FOR OUR GUESTS.ALSO DO A VISUAL INSPECTION OF THE FIRE PIT.
MAKE SURE THAT EVERYTHING ON OUR OUTDOOR PATIOS WORK PROPERLY.
ONE, TWO, AND THREE ARE THE ONLY ONES THAT HAVE THIS, UH, OUTDOOR PATIO RIGHT NOW, BUT, UH, IT IS A PLAN FOR THE FUTURE TO HAVE THE REST OF THEM INSTALLED.
WE'LL GO BACK IN AND FINISH THE WALKTHROUGH.
SOMETIMES THERE'S SOME DISHES THAT ARE STILL LEFT IN HERE.
WE WANNA MAKE SURE THAT THEY'RE, UM, CLEAN AND IF SO, PUT THEM AWAY, UM, AND WIPE DOWN ANYTHING THAT NEEDS IT.
UM, ON THE COUNTERS, WE WANT TO RUN OUR HAND ACROSS THE COUNTER, MAKE SURE THERE'S NO CRUMBS OR ANY RESIDUE STILL LEFT.
UM, AS WELL AS CHECKING THE MICROWAVE AS WELL.
WE ALWAYS WANT TO CHECK THE DISH, MAKE SURE THAT THERE'S NO, UM, STUCK ON STAINS OR ANYTHING, ANY KIND OF SPATTER INSIDE THE MICROWAVE WAVE AND CHECKING EVERY CABINET TO MAKE SURE THAT THERE'S ABSOLUTELY NOTHING THAT SHOULDN'T BE IN THERE AND THAT EVERYTHING'S WHERE IT SHOULD BE.
ALL RIGHT, THE MIRROR AND EVERYTHING LOOKS GOOD IN HERE.
WE'LL MOVE ON TO THE LAST BEDROOM.
ALL RIGHT, NOW THIS WAS THE LAST ROOM IN THE VILLA TO WALK THROUGH.
NOW THAT EVERYTHING LOOKS GOOD, I'LL RADIO THE OFFICE UP FRONT, LET THEM KNOW THAT THE GUEST CAN CHECK IN.
THANKS FOR JOINING ME TODAY HERE AT ISLAND STATE PARK.
I'M GONNA GO BACK TO THE OFFICE AND FINISH UP SOME ADMINISTRATIVE STUFF FOR OUR HEAD OUT FOR THE DAY.
UM, WHAT YOU SAW HERE TODAY WAS JUST A FEW OF THE MANY THINGS WE GET TO DO AND EXPERIENCE HERE AT DREW ISLAND.
SO I ENCOURAGE EVERYONE TO COME OUT, ENJOY THE STATE PARKS AND SEE YOU FOR YOURSELF.
A METEOR SHOWER THAT OCCURS WHEN SKY AND WEATHER CONDITIONS ARE JUST RIGHT IS PROBABLY ONE OF THE MOST SPECTACULAR ASTRONOMICAL EVENTS THAT YOU CAN OBSERVE DURING A GOOD SHOW.
SOMETIMES HUNDREDS OF SHOOTING STARS AND FIREBALLS STREAK ACROSS THE SKY.
EVERY HOUR A METEOROID IS BASICALLY A ROCK FLYING AROUND IN OUTER SPACE.
IF ONE OF THOSE SPACE ROCKS ENTERS THE EARTH'S ATMOSPHERE, IT IS THEN CALLED A METEOR.
THE EARTH'S GRAVITY PULLS THE METEOR TOWARDS IT AND THE RESISTANCE, THE METEOR EXPERIENCES MAKES IT VERY, VERY HOT.
WHAT WE SEE FROM THE GROUND IS ACTUALLY THE GLOWING HOT AIR AROUND THE SUPER HOT SPACE ROCK AS IT ENTERS THE EARTH'S ATMOSPHERE.
MOST METEORS COME FROM DEBRIS LEFT BEHIND FROM COMETS.
SO COMETS ARE BASICALLY DIRTY SNOWBALLS THAT ARE ORBITING AROUND OUR SOLAR SYSTEM, AND THEY'RE MADE UP OF DIFFERENT COMPONENTS LIKE GAS AND DUST AND ICE AND LITTLE BITS OF ROCKS AND THINGS LIKE THAT.
SO WHAT WE'RE GONNA DO IS WE'RE GONNA MAKE A MODEL COMET HERE IN THE LAB SO YOU GUYS CAN SEE THE DIFFERENT COMPONENTS OF A COMET AND SEE HOW AS THAT COMET MELTS WHEN IT GETS CLOSE TO THE SUN, IT SHEDS DEBRIS THAT EVENTUALLY WILL BECOME A METEOR SHOWER.
SO WE'RE GONNA START OUT WITH JUST WATER.
AND WATER IS MADE UP OF HYDROGEN AND OXYGEN, THE SAME ELEMENTS THAT WERE PRESENT IN THE VERY EARLY FORMATION OF THE SOLAR SYSTEM.
COMETS ALSO CONTAIN SPACE DUST, AND THAT'S LIKE MINERALS AND STUFF LIKE THAT.
NOW I HAVE SOME REGULAR OLD DIRT TO REPRESENT THE SPACE DUST.
YOU HAVE TO KEEP IN MIND THAT DIRT HERE ON EARTH CONTAINS LIVING THINGS LIKE, UM, FUNGI AND BACTERIA, WHICH WOULD NOT BE PRESENT, UM, IN A COMET.
IT WOULD JUST BE THE MINERALS.
I'M GONNA PUT JUST A LITTLE BIT OF THE DIRT IN THERE.
AND THEN THE COMETS ALSO CONTAIN ORGANIC, UM, MATERIALS.
SO THINGS THAT CONTAIN CARBON, HYDROGEN, OXYGEN, NITROGEN.
UM, BASICALLY THE ELEMENTS THAT MAKE UP THE VAST
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MAJORITY OF LIFE ARE THOSE ORGANIC, UM, COMPOUNDS.AND SO EVEN IN THE EARLY FORMATION OF THE SOLAR SYSTEM, THERE WERE SOME VERY SIMPLE SUGARS PRESENT.
SO WE'RE ACTUALLY USING SODA TO REPRESENT THOSE SUGARS.
AND THEN AMMONIA, WHICH IS THE SAME KIND OF STUFF THAT'S, UH, MAKES WINDOW CLEANER, SO STINKY, THAT'S ANOTHER, UM, ORGANIC MATERIAL THAT YOU MIGHT FIND IN THE COMET.
I'M GOING TO STIR UP OUR INGREDIENTS TO GET IT ALL EVENLY MIXED BECAUSE THEY'RE ALL MIXED UP TOGETHER.
AND OUTER SPACE IS GENERALLY REALLY COLD, SO THE COMET'S ALSO GONNA CONTAIN CARBON DIOXIDE, BUT WHEN IT'S FAR AWAY FROM THE SUN, IT'S FROZEN SOLID.
SO HAVE YOU GUYS EVER SEEN DRY ICE? YEAH.
SO IT'S BASICALLY CARBON DIOXIDE, UM, THAT IS FROZEN AND IT DOESN'T EVER HAVE A LIQUID STATE.
SO WHAT THIS IS DOING IS THIS IS WELL BELOW FREEZING TEMPERATURES.
SO IT'S ESSENTIALLY FREEZING SOLID EVERYTHING THAT I PUT INTO THE BOWL.
SO WHAT I'M GONNA HAVE YOU DO IF YOU'LL COME AROUND HERE WITH ME IS KIND OF HOLD THE BAG UP JUST A LITTLE BIT RIGHT OVER THE BOWL, SINCE IT MIGHT BE A LITTLE BIT MESSY.
AND DON'T HOLD IT TOO HARD BECAUSE I DON'T KNOW IF YOU GUYS CAN TELL, SEE HOW IT LETS SOME OF THE AIR OUT.
THE CARBON DIOXIDE IS TURNING DIRECTLY.
I'M GONNA PUT IT DOWN INTO THE BOWL THIS TIME.
OKAY, SO LET'S SEE IF WE HAVE A COMET.
AND IT'S NOT PERFECTLY ROUND, BUT THAT IS OUR COMET.
AND YOU CAN SEE THAT AS THE, UM, DRY ICE IS SUBLIMATING TURNING BACK INTO GAS, THAT IT'S ESSENTIALLY PIECES OF THE COMET ARE MELTING OFF.
AND AS THE COMET PASSES BY, UH, THE SUN AND IT HEATS UP IN THAT CARBON DIOXIDE AND ICE MELTS, LITTLE PLUMES COME OFF THE BACK OF THE COMET AND THAT'S WHAT LEAVES A DEBRIS TRAIL BEHIND.
AND WHEN THE EARTH PASSES THROUGH THAT DEBRIS STREAM, THEY BURN UP IN OUR ATMOSPHERE AND BECOME A METEOR SHOWER.
MANY COMETS HAVE LEFT TRAILS IN DIFFERENT REGIONS ALONG THE PATH OF THE EARTH'S ORBIT.
SO THE EARTH PREDICTABLY ENCOUNTERS THESE DEBRIS FIELDS AS IT GOES AROUND THE SUN THROUGH THE COURSE OF A YEAR.
WE CAN COUNT ON REGULAR OCCURRENCES OF THESE METEOR SHOWERS DURING CERTAIN TIMES OF THE YEAR.
THE LDS PROCEEDS, ORIONIDS, LEONIDS, AND GEMINIDS ARE ALL MAJOR METEOR SHOWERS ASSOCIATED WITH COMET TRAILS.
METEOR SHOWERS ARE USUALLY NAMED FOR THE CONSTELLATION IN THE REGION OF THE SKY WHERE THEY APPEAR TO ORIGINATE.
IF YOU WATCH A METEOR SHOWER, YOU MAY NOTICE THAT THEY APPEAR TO BE ALL OVER THE SKY, BUT THE TAILS POINT BACK TO THE SAME GENERAL REGION.
THIS REGION WHERE ALL THE METEORS SEEM TO COME FROM IS CALLED THE RADIANT.
THIS OPTICAL ILLUSION IS ALL A MATTER OF PERSPECTIVE.
THE METEORS ARE USUALLY COMING TOWARDS US FROM THE SAME ANGLE, BUT WHEN THEY GET CLOSER TO US AS THEY ENTER THE ATMOSPHERE THE EFFECTIVE PERSPECTIVE MAKES THEM SEEM TO GET FURTHER APART.
IT'S LIKE LOOKING AT TRAIN TRACKS, EVEN THOUGH WE KNOW THAT THEY'RE PARALLEL TO ONE ANOTHER.
OFTEN THE DISTANCE IT LOOKS LIKE THE TRAIN TRACKS COME TOGETHER.
USUALLY THE SIZE OF PARTICLES ENTERING THE EARTH'S ATMOSPHERE IS NO LARGER THAN A GRAIN OF SAND, SO THEY BURN UP REALLY QUICKLY AND PRODUCE A SPECTACULAR SHOW.
VERY RARELY, A REALLY LARGE PIECE OF METEOR MAKES IT ALL THE WAY THROUGH THE ATMOSPHERE AND FALLS TO EARTH.
LARGE IMPACTS BY METEORITES ARE VERY RARE, BUT NASA SCIENTISTS SAY THAT THOUSANDS OF TINY SPECS OF SPACE ROCK HIT THE GROUND EVERY YEAR, MOSTLY UNNOTICED.
MOST METEORITES WEIGH LESS THAN ONE POUND, AND ONLY FIVE TO 10% OF METEORS MAKE IT THROUGH THE EARTH'S ATMOSPHERE.
A LARGE METEOROID, WHICH COMES FROM AN ASTEROID RATHER THAN A METEOR SHOWER IMPACTS EARTH.
METEOR CRA IN ARIZONA IS ONE SUCH LOCATION.
SO DON'T WORRY THAT ANY SPACE ROCKS ARE GOING TO BE CAUSING MAJOR PROBLEMS BY CRASHING INTO EARTH.
ANYTIME SOON, CHECK YOUR CALENDAR FOR A METEOR SHOWER.
SET UP A SLEEPING BAG ON THE LAWN AND WATCH ONE OF THE MOST SPECTACULAR SHOWS IN THE SKY.