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Town Council Regular Meeting Minutes 12/6/2010
TOWN COUNCIL

TOWN OF SOUTH WINDSOR

Minutes Page 1  December 6, 2010



TOWN COUNCIL – Regular Meeting
Council Chambers – South Windsor Town Hall

1.      Call Meeting to Order

Mayor Pelkey called the Regular Meeting to order at 8:04 p.m., recessed the Regular Meeting in order to finish the Work Session and then reconvened the Regular Meeting at 8:15 p.m.

4.      Roll Call

Members Present:        Mayor John Pelkey
        Deputy Mayor Edward Havens
        Councillor Gary Bazzano
        Councillor Tom Delnicki
        Councillor Janice Favreau
        Councillor Kathryn Hale
        Councillor Kevin McCann
        Councillor Cary Prague (arrived at 10:15 p.m.)
        Councillor Keith Yagaloff

Also Present:           Matthew B. Galligan, Town Manager

5.      Public Input

Mr. Ken Johnson, 57 Palmer Drive came before the Town Council and stated that he has been a Union Electrician for 28 years and came to speak in support of the Connecticut Studios Project.  Mr. Johnson gave the Council 72 signatures of co-workers that he presently works with all speaking in favor of this project.

Mr. Don Gonsalves, 40 Bayberry Trail came forward and stated he is not against the project, but is concerned with the method being used to finance this project.  This should be reviewed further before being voted on, there is no way developers can pay off these bonds.

Mr. Tom Deffenbaugh of Manchester stated that when he first opened his business called Summit Studios Performing Art Center and could not get any bank around to finance this business.  The business has now been running now for 10 years.  Mr. Deffenbaugh encouraged the Town Council to move forward.  This is a great project for the area.  Manchester is presently moving forward to put plans in place to make Manchester more inviting for film and production business.  


ITEM:

5.      Public Input (Continued)

Ms. Amy Boyer, Director of the Sales at the Hampton Inn Suites in Manchester who is a South Windsor Chamber of Commerce member as well as on the Studio Support Committee and is 100% in favor of moving forward with the project as well as the Connecticut Studios Project.

Ms. Mary Etter, Director of the South Windsor Public Library came before the Town Council to announce that the South Windsor Public Library will be hosting New York Times Best Selling Author at the South Windsor Public Library, Author Wally Lamb on December 17, 2010 at a Booked for Lunch program from 12:30 p.m.  There will be books available for signing.

Mr. Bart Pacekonis, 39 Blue Ridge Drive came forward and stated that he is very glad to see the Town Council putting in the Project Labor Agreement that 30% of those hired for the Connecticut Studios project should be South Windsor residents and feels the Town Council should look to do this whenever a tax abatement agreement is done.  

Mr. Tony Vieira, 68 Kelly Road came before the Town Council and suggested that there should be a certain percentage of materials should be provided to Connecticut Studios from South Windsor businesses.

6.      Environmental Health & Safety Message

Councillor Hale suggested that an electronics trash pick up should be scheduled after the holiday season.  Mr. Galligan informed the Council that a program is being worked on where the drop off point would be Town Hall.  

7.      Adoption of Minutes of Previous Meetings

BE IT RESOLVED that the South Windsor Town Council approves the Minutes of the following Town Council Meetings:  Work Session of November 15, 2010; Public Hearings (2) of November 15, 2010; and Regular Meetings of October 18, 2010 and November 15, 2010.

Was made by Councillor McCann
Seconded by Councillor Bazzano

Councillor Favreau requested that the October 18, 2010 Regular Minutes be pulled from the vote in order to amend the minutes.  Item 17. A., page 7, sixth paragraph, last sentence, would like clarification on the sentence, is not complete.

ITEM:

7.      Adoption of Minutes of Previous Meetings (Continued)

Councillor Hale requested that the November 15, 2010 Regular Minutes be pulled from the vote in order to have verbatim minutes complete.

Mayor Pelkey called for a vote on the remainder of the minutes; they passed by a Roll Call vote of 7-0 with Deputy Mayor Havens abstaining.

8.      Public Petitions

None

9.      Communications from Officers and Boards Directly Responsible to Council

None

10.     Communications and Reports from Town Manager

Town Manager, Matthew Galligan reported that Judy Hall has officially retired.  ADP has been hired to do a lot of the human resource items.  Personnel will be handled by the Town Manager’s Office.  Workman’s Compensation will be handled by Melanie Crucitti who is the Director of Finance.

Councillor Delnicki requested a letter from Robinson & Cole answering a variety of questions which have been handed out to Council members.

A final draft of the TIF financing resolution has also been handed out to the Town Council.

Councillor Delnicki questioned why the present Town Attorney feels the Ordinance for Preference To Town Based Bidders would not be possible when previous Town Attorney’s have allowed the Ordinance to be heard by the Town Council?  Town Attorney Dwight Johnson explained that the Town Charter specifies for projects that are over $5,000 the Town is required to go out to bid and required to select the lowest, responsible bidder.  There is a Superior Court decision which was issued in 1993 involving the City of Danbury and this decision is consistent with the way lowest responsible bidder has been interpreted at Murtha Cullina.  A bidder is responsible if the bidder has the financial ability and the technical capacity to provide the services that are covered by the bid.  In the Danbury case the city had passed an Ordinance which had provided that if a bidder who was a city based bidder and if the bidder was within 10% of the lowest bid then the city based bidder would receive the contract and the Superior Court reviewed the language “lowest responsible bidder” and concluded that the Ordinance was illegal.  The Town Council could change the charter which would be a lengthy process.

Councillor Delnicki stated that he was seeking for some sort of mechanism so that the Town could ensure that Town businesses have an opportunity for the jobs that will be created by this project.  Town Attorney Johnson explained that he will address this issue within the Project Labor Agreement.  

Answering questions from the Council, Mr. Galligan explained that the Probate Court will be housed at the South Windsor Town Hall.  Modifications will have to be made which will require the Registrars to move into the Mail Room, Probate Court will take over the Registrars area and the mail machine will be moved up to the Town Manager’s Office.  Costs for the Probate will be split between South Windsor, East Windsor and Windsor.

11.     Reports from Standing Committees

None

12.     Reports of Temporary Committees

None

13.     Communications and Petitions from Council

Councillor McCann stated that he requested earlier that a resolution be put on ther agenda tonight before the Town Council voted on the TIF financing which entailed restrictions of all Town Councillors presently sitting on the Council from going to work for the studios for a period of one year after leaving office.  This has been discussed with the Town Attorney and the Town Attorney suggested that Town Councillors be restricted from going to work for the studios for a period of one year after issuance of the bonds.  The reason this item has been brought up is because presently this item will not be voted on until after the TIF Financing.  Councillor McCann stated that he would be suspending the rules to go to this item prior to a decision being made on the TIF Financing.

Mayor Pelkey reminded Town Council members that there will be a ceremony at Veterans’ Memorial Park for Wreaths Across America on December 11, 2010 beginning at 12:00 p.m.  This is a new program for the Town of South Windsor and will entail placing wreaths on graves of those who have served our country.




ITEM:

14.     Public Participation

Mr. Gilbert Holt, 533 Rye Street came forward and reiterated that a lot of businesses will thrive off Connecticut Studios and new businesses will develop.  Mr. Holt urged the Town Council to support the Connecticut Studios project.

Ms. Cindy Muska, Nevers Road stated that if South Windsor doesn’t go forward with the Connecticut Studios project, another Town will jump at this opportunity and South Windsor will regret their decision.

15.     Consent Agenda

Councillor Bazzano made a motion to approve Items 16. A. through 16. I; Councillor Yagaloff made a motion to approve Items 17. A. through 17. G.  Councillor Delnicki seconded the motions; and they were approved, unanimously.

16.     Unfinished Business

* A.    Resolution Appointing Phil Koboski (R) to the South Windsor Agricultural Land Preservation Commission

        BE IT RESOLVED that the South Windsor Town Council hereby appoints Phil Koboski (R) to the South Windsor Agricultural Land Preservation Commission for a term ending November 30, 2013 to fill the expired term of Frank Intino.

(Approved by Consent Agenda)

* B.    Resolution Reappointing Elizabeth Warren (R) to the South Windsor Agricultural Land Preservation Commission

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Elizabeth Warren (R) to the South Windsor Agricultural Land Preservation Commission for a term ending November 30, 2013.

(Approved by Consent Agenda)

ITEM:

16.     Unfinished Business (Continued)

* C.    Resolution Reappointing Tim Shepard (R) to the South Windsor Agricultural Land Preservation Commission

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Tim Shepard (R) to the South Windsor Agricultural Land Preservation Commission for a term ending November 30, 2013.

(Approved by Consent Agenda)

* D.    Resolution Reappointing Jonathan Foster (R) to the South Windsor Agricultural Land Preservation Commission

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Jonathan Foster (R) to the South Windsor Agricultural Land Preservation Commission for a term ending November 30, 2013.

(Approved by Consent Agenda)

* E.    Resolution Appointing Bill Jodice (R) to the Economic Development Commission

BE IT RESOLVED that the South Windsor Town Council hereby appoints Bill Jodice (R) to the Economic Development Commission for a term ending November 30, 2011 to fill a vacancy.

(Approved by Consent Agenda)

* F.    Resolution Reappointing Teri Dickey-Gaignat (R) to the Patriotic Commission

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Teri Dickey-Gaignat (R) to the Patriotic Commission for a term ending August 31, 2013.

(Approved by Consent Agenda)

ITEM:

16.     Unfinished Business (Continued)

* G.    Resolution Reappointing Joan Murphy (R) to the Housing Authority

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Joan Murphy (R) to the Housing Authority for a term ending November 30, 2015.

(Approved by Consent Agenda)

* H.    Resolution Appointing Teri Dickey-Gaignat (R) to the Zoning Board of Appeals

BE IT RESOLVED that the South Windsor Town Council hereby appoints Teri Dickey-Gaignat (R) to the Zoning Board of Appeals for a term ending November 30, 2011 to fill a vacancy.

(Approved by Consent Agenda)

* I.    Resolution Appointing Carolyn Carey (R) to the Human Relations Commission

BE IT RESOLVED that the South Windsor Town Council hereby appoints Carolyn Carey (R) to the Human Relations Commission for a term ending November 30, 2013 to fill a vacancy.

(Approved by Consent Agenda)

17.     New Business

* A.    Resolution Reappointing Cliff Slicer (D) an Alternate to the Board of Assessment Appeals and Postponing Consideration of this Motion until the Town Council’s Next Regularly Scheduled Meeting

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Cliff Slicer (D) an Alternate to the Board of Assessment Appeals for a term ending November 30, 2014 and postpones consideration of this motion until the Town Council’s next regular scheduled meeting.

(Approved by Consent Agenda)

ITEM:

17.     New Business (Continued)

* B.    Resolution Reappointing Cile Decker (D) to the Agricultural Land Preservation Advisory Commission and Postponing Consideration of this Motion until the Town Council’s Next Regularly Scheduled Meeting

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Cile Decker (D) to the Agricultural Land Preservation Advisory Commission for a term ending November 30, 2013 and postpones consideration of this motion until the Town Council’s next regular scheduled meeting.

(Approved by Consent Agenda)

* C.    Resolution Reappointing Joseph Kennedy (D) to the Agricultural Land Preservation Advisory Commission and Postponing Consideration of this Motion until the Town Council’s Next Regularly Scheduled Meeting

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Joseph Kennedy (D) to the Agricultural Land Preservation Advisory Commission for a term ending November 30, 2013 and postpones consideration of this motion until the Town Council’s next regularly scheduled meeting.

(Approved by Consent Agenda)

* D.    Resolution Reappointing James Kupchunos (D) to the Agricultural Land Preservation Advisory Commission and Postponing Consideration of this Motion until the Town Council’s Next Regularly Scheduled Meeting

BE IT RESOLVED that the South Windsor Town Council hereby reappoints James Kupchunos (D) to the Agricultural Land Preservation Advisory Commission for a term ending November 30, 2013 and postpones consideration of this motion until the Town Council’s next regularly scheduled meeting.

(Approved by Consent Agenda)

ITEM:

17.     New Business (Continued)

* E.    Resolution Reappointing Robert Waldron (D) to the Agricultural Land Preservation Advisory Commission and Postponing Consideration of this Motion until the Town Council’s Next Regularly Scheduled Meeting

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Robert Waldron (D) to the Agricultural Land Preservation Advisory Commission for a term ending November 30, 2013 and postpones consideration of this motion until the Town Council’s next regularly scheduled meeting.

(Approved by Consent Agenda)

* F.    Resolution Reappointing Sandy Jeski (D) to the Agricultural Land Preservation Advisory Commission and Postponing Consideration of this Motion until the Town Council’s Next Regularly Scheduled Meeting

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Sandy Jeski (D) to the Agricultural Land Preservation Advisory Commission for a term ending November 30, 2013 and postpones consideration of this motion until the Town Council’s next regularly scheduled meeting.

(Approved by Consent Agenda)

* G.    Resolution Reappointing Jean Klein (D) to the Historic District Commission and Postponing Consideration of this Motion until the Town Council’s Next Regularly Scheduled Meeting

BE IT RESOLVED that the South Windsor Town Council hereby reappoints Jean Klein (D) to the Historic District Commission for a term ending November 30, 2015 and postpones consideration of this motion until the Town Council’s next regularly scheduled meeting.

(Approved by Consent Agenda)

ITEM:

17.     New Business (Continued)


  • Resolution Authorizing the Board of Education to Proceed with Preparation of the necessary Schematic Drawings and Outline specifications for the Handicapped Accessibility Code Compliance Renovations and Improvements at South Windsor High School
WHEREAS, a referendum appropriating $1,100,000 for Handicap Accessibility Code Compliance Renovations and Improvements at South Windsor High School and authorizing the issuance of $1,100,000 bonds of the Town to meet said appropriation and pending the issuance thereof the making of Temporary Borrowings for such purpose was approved by the South Windsor residents at the Election held on November 2, 2010; and

WHEREAS, on November 29, 2010, the South Windsor Town Council appointed the South Windsor Board of Education as the Building Committee for Handicapped Accessibility Code Compliance Renovations and Improvements to be done at South Windsor High School

NOW, THEREFORE, BE IT RESOLVED that the South Windsor Town Council authorizes the South Windsor Board of Education to proceed with preparation of the necessary schematic drawings and outline specifications for the project and authorizes South Windsor’s Superintendent of Schools to file an application for a school construction project grant.

Was made by Councillor Favreau
Seconded by Mayor Pelkey
The motion was approved, unanimously

I.      Resolution Approving a Refund of Taxes to Fifty (50) South Windsor Taxpayers

BE IT RESOLVED that the South Windsor Town Council hereby approves a refund of property taxes to fifty (50) South Windsor Taxpayers, the total of said refund being $8,545.63, and as more fully described on attached Exhibit A.

Was made by Councillor Delnicki
Seconded by Councillor Bazzano
The motion was approved, unanimously

ITEM:

Councillor McCann made a Motion to Suspend the Rules in order to go to Item 17. K.  Councillor Bazzano seconded the motion.

Council members began debating this issue and Town Attorney Dwight Johnson informed the Council that according to a document of parliamentary procedure provided by the State, a motion to suspend the rules is not debatable.

Mayor Pelkey called for a vote on the motion, it failed on a Roll Call vote of 4 to 4 with Councillor Bazzano, Delnicki, McCann and Yagaloff voting in favor of Suspending the Rules and Mayor Pelkey, Deputy Mayor Havens, Councillor Favreau and Hale voting in opposition to Suspending the Rules.

J.      Resolution Appropriating $15,000,000 for the Financing of The Connecticut Studios Project and Authorizing the Issuance and Sale of Not Exceeding $15,000,000 Special Obligation Revenue Bonds of the Town of South Windsor, Connecticut to Meet Said Appropriation

WHEREAS, the Town of South Windsor, Connecticut (the “Town”) is a political subdivision of the State of Connecticut (the “State”); and

WHEREAS, the Town is authorized pursuant to Chapter 132, Municipal Development Projects, Sections 8-186 to 8-200b, inclusive (as amended from time to time, the “Act”), of the General Statutes of Connecticut, Revision of 1958, as amended (as amended from time to time, the “Connecticut General Statutes”), to undertake a development project for the assembly, improvement and disposition of land or buildings, or both, to be used principally for industrial or business purposes, including, but not limited to, any commercial, financial or retail enterprise, including any enterprise which promotes tourism and any property that produces income; and

WHEREAS, pursuant to the Act, the Town is authorized to and has by vote of its Town Council on September 15, 1997 designated the South Windsor Redevelopment Agency as its development agency (the “Development Agency”) and is authorized to exercise through the Development Agency the powers granted to the Town under the Act; and



(Resolution Continued on Next Page)

ITEM:

17.     J.      (Continued)

WHEREAS, pursuant to the Act, the Development Agency adopted a project plan entitled “I-291 Corridor District Municipal Development Project dated May 2003”, on July 7, 2003 (the “Original Project Plan”); and

WHEREAS, pursuant to Section 8-189(b)(2) of the Act, in order for the Original Project Plan to remain in effect, the Town Council is required to review and reapprove, or amend the Original Project Plan, a minimum of once each ten-year period commencing from the time of the initial approval; and

WHEREAS, the Development Agency has prepared a First Amendment to Project Plan, dated October 2010 (the “First Amendment”), to comply with the provision of Section 8-189(b)(2) of the Act and to amend and supplement the Original Project Plan for the Connecticut Studios Project (defined below); and

WHEREAS, the Original Project Plan, as amended by the First Amendment (the “Project Plan”), has been submitted to the South Windsor Planning and Zoning Commission and the Capitol Region Council of Governments in accordance with the Act to determine that it is in accord with the plan of development for the Town and the region, respectively; and

WHEREAS, the Project Plan establishes a project area generally bounded by Route 5 to the west, Chapel Road to the north, Long Hill Road to the east, and Burnham Road to the south, and more particularly described in Appendix A thereto (the “Project Area”); and

WHEREAS, Connecticut Studios, LLC, a Connecticut limited liability company (the “Developer”), has proposed the development of a motion picture studio, including the acquisition, construction and improvement of all or a portion of the following components: (a) roads, public easements, outdoor parking lots, sewers, water lines, utilities, and other supporting infrastructure within the Project Area, and engineering, management and construction costs related thereto (collectively, the “CSP Public Infrastructure Improvements”); (b) four (4) buildings containing nine (9) sound stages totaling approximately 161,600 square feet of space; (c) approximately 103,200 square feet of full service finished production offices; (d) approximately 73,500 square feet of mill and storage facilities for set and sound stage creation and storage, including 13,575 square feet of television sound stage and 3,750 square feet of commissary space; (e) a 100-150 room business class hotel; (f)~four (4) full service restaurants, and (g)~approximately 16,000 square feet of retail space and other facilities (collectively, the “Developer’s Project”); and

(Resolution Continued on Next Page)

ITEM:

17.     J.      (Continued)

WHEREAS, the Town has agreed to finance: (a) the CSP Public Infrastructure Improvements; (b) the funding of capitalized interest on the Series 2011 Bonds (defined herein); (c) the funding of a debt service reserve fund for the Series 2011 Bonds; and (d) the payment of certain costs of issuance, administrative expenses and credit enhancement fees, if any, with respect to the Series 2011 Bonds (collectively, the “Connecticut Studios Project”); and

WHEREAS, the Connecticut Studios Project will be located on parcels of land within the Project Area as more particularly described in Schedule~A attached hereto (the “Connecticut Studios Project District”); and

WHEREAS, the Town has agreed to pledge one hundred percent (100%) of the assessed real property taxes and payments in lieu of taxes, if any, each fiscal year in excess of the real property taxes and payments in lieu of taxes, if any, which would be produced by applying the then current tax rate of the Town to the total sum of the assessed value of real property in the Connecticut Studios Project District as of July 7, 2003 (the effective date of the Original Project Plan) (the “Tax Increment Revenue”), to secure the payment of the principal or purchase price of, the redemption price and interest on, and certain administrative expenses in connection with bonds, notes, temporary notes, interim certificates, debentures or other obligations of the Town (“Bonds”), to finance the Connecticut Studios Project; and

WHEREAS, the Town has agreed to establish by ordinance (the “SSD Ordinance”) a special services district with the same boundaries as the Connecticut Studios Project District to be known as the Connecticut Studios Project Special Services District (the “CSP Special Services District”) pursuant to Chapter 105a, Municipal Special Services Districts, Sections 7-339m to 7-339t, inclusive (as amended from time to time, the “SSD Act”), of the Connecticut General Statutes, to promote the economic and general welfare of the Town’s citizens and property owners through the preservation, enhancement, protection and development of the economic health of the Town; and

(Resolution Continued on Next Page)


ITEM:

17.     J.      (Continued)

WHEREAS, the Developer and the other holders of record of a taxable interest in real property within the Connecticut Studios Project District, if any, will hold a referendum to approve the SSD Ordinance; and

WHEREAS, the CSP Special Services District will enter into a contract with the Town (the “CSP SSD Services Contract”) to provide services which the Town is authorized to provide in connection with the CSP Special Services District’s construction, ownership, operation and maintenance of the CSP Public Infrastructure Improvements (the “CSP SSD Services”); and

WHEREAS, the SSD Ordinance will provide for a levy on real property within the CSP Special Services District (“CSP SSD Tax Revenue”), which shall be an obligation of the Town to impose such levy as a municipal levy, in addition to the regular municipal levy, and to collect such levy for the benefit of the District to pay for the CSP SSD Services; and

WHEREAS, the Town has agreed to utilize the CSP SSD Tax Revenue collected pursuant to the CSP SSD Services Contract to secure the payment of the principal or purchase price of, the redemption price and interest on, and certain administrative expenses in connection with Bonds, to finance the Connecticut Studios Project; and

WHEREAS, in accordance with the Act, the Town, acting by and through the Development Agency, is authorized to issue from time to time Bonds of the Town which are payable solely from and secured by (a) a pledge of and lien upon any and all of the income, proceeds and revenues of development projects, (b) taxes or payments in lieu of taxes, or both, in whole or in part, allocated to and paid into a special fund, or (c) any combination of the methods in (a) or (b); and

WHEREAS, the Town, in order to secure the Bonds, shall allocate to and when collected, shall pay (a) the Tax Increment Revenue into the Revenue Fund established under the Trust Indenture (defined below) pursuant to the Act, and (b) the CSP SSD Tax Revenue into the Revenue Fund pursuant to the SSD Act; and

(Resolution Continued on Next Page)

ITEM:

17.     J.      (Continued)

WHEREAS, the Town has determined to issue not exceeding $15,000,000 aggregate principal amount of Bonds to be designated “Town of South Windsor, Connecticut (acting by and through the South Windsor Development Agency) Special Obligation Revenue Bonds (Connecticut Studios Project), Series 2011”, or such other designation as shall be determined for such Bonds (the “Series 2011 Bonds”), to finance the Connecticut Studios Project; and

WHEREAS, the issuance of the Series 2011 Bonds and the use of the proceeds thereof will be in furtherance of the purposes of the Act, will encourage development in the Project Area, will expand the tax base of the Town over time, and will create employment opportunities in the Town;

NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of South Windsor:

Section 1.      In furtherance of the underlying purposes of the Act, the Town hereby appropriates not exceeding $15,000,000 to finance the Connecticut Studios Project, grants a pledge of and a security interest in the Tax Increment Revenue and the CSP SSD Tax Revenue to secure the payment of the principal or purchase price of, the redemption price and interest on, and certain administrative expenses in connection with the Series 2011 Bonds, and authorizes the issuance of not exceeding $15,000,000 aggregate principal amount of the Series 2011 Bonds to meet said appropriation subject to the provisions of this Resolution and a Trust Indenture (the “Trust Indenture”), by and between the Town and a state banking corporation or national banking association to be appointed by the Town Manager and the Town Treasurer to serve as trustee (the “Trustee”); provided that (a) Tax Increment Revenue and CSP SSD Tax Revenue in excess of the payment of the principal or purchase price of, the redemption price and interest on, and certain administrative expenses in connection with the Series 2011 Bonds shall be transferred to the Town on at least an annual basis, free and clear from the pledge of the Trust Indenture; and (b) Tax Increment Revenue and CSP SSD Tax Revenue collected during any period in which the principal or purchase price of, the redemption price and interest

(Resolution Continued on Next Page)



ITEM:

17.     J.      (Continued)

on, or certain administrative expenses in connection with the Series 2011 Bonds is financed from the proceeds of the Series 2011 Bonds (the “Capitalized Interest Period”) shall be transferred to the Town on at least an annual basis, free and clear from the pledge of the Trust Indenture.

The Series 2011 Bonds shall be special obligations of the Town and shall be payable solely from Tax Increment Revenue, the CSP SSD Tax Revenue and other receipts and moneys pledged therefore pursuant to the Trust Indenture.  The Series 2011 Bonds shall not constitute a pledge of the faith and credit of the State, the Town or the Development Agency, shall not constitute or give rise to any right on the part of any bondholder to compel the exercise of the taxing power of the State or the Town (except as otherwise specifically set forth in the Trust Indenture with respect to the Town’s pledge of the Tax Increment Revenue), shall not subject the State, the Town or the Development Agency to any liability thereon (except as otherwise specifically set forth in the Trust Indenture with respect to the Town’s pledge of the Tax Increment Revenue and the CSP SSD Tax Revenue), shall not be payable out of any funds or properties other than those pledged therefor under the Trust Indenture, and shall not be subject to the debt limitation prescribed by Section 7-374 of the Connecticut General Statutes.

The Series 2011 Bonds shall be of an aggregate principal amount, of such series, in such principal amounts, be dated, mature on such dates (not exceeding thirty (30) years from their date), bear interest at such fixed or variable rates, bear interest which shall be excluded or included in gross income (or any combination thereof) for federal income tax purposes, be payable as to principal and interest at such places and in such medium of payment, be in such denominations and forms, carry such exchange or registration privileges, have such rank or priority, be executed in such manner, be subject to such terms of purchase and redemption (including optional redemption not later than the ten year anniversary of the issue date of the Series 2011 Bonds), and contain such other provisions and particulars (collectively, the “Bond Terms and Conditions”) set forth in the Trust Indenture, as shall be determined by the Town Manager and the Town Treasurer.  The Series 2011 Bonds shall be executed in the name and on behalf of the Town by the manual or facsimile signature of the Town Manager and the Town Treasurer, provided at least one such signature shall be a

(Resolution Continued on Next Page)

ITEM:

17.     J.      (Continued)

manual signature, and shall be sealed with the Town’s corporate seal or a facsimile thereof.  The Town Manager and the Town Treasurer are authorized to determine the CSP Public Infrastructure Improvements to be financed by the Series 2011 Bonds, and the type and amount of annual administrative expenses in connection with the Series 2011 Bonds to be paid from Tax Increment Revenue and CSP SSD Tax Revenue.  The Town Manager and the Town Treasurer are authorized to execute and deliver the Trust Indenture, and amendments or supplements thereto, on such terms and conditions as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of the Trust Indenture containing such provisions.

Issuance of the Series 2011 Bonds shall be subject to the satisfaction of the following conditions:

  • Adoption of the Project Plan (as amended by the First Amendment to Project Plan) by the Development Agency in accordance with the Act;
  • Approval of the Project Plan (as amended by the First Amendment to Project Plan) by the Town Council in accordance with the Act;
  • Establishment of the CSP Special Services District pursuant to the SSD Ordinance, including appointment of an initial board of commissioners, by the Town Council;
  • Approval of the SSD Ordinance by the Developer and the other holders of record of a taxable interest in real property within the Connecticut Studios Project District;
  • Execution and delivery of the CSP SSD Services Contract;
  • Delivery of a market study acceptable to the Underwriter (defined herein);
(Resolution Continued on Next Page)

ITEM:

17.     J.      (Continued)

  • Delivery of an appraisal acceptable to the Underwriter;
  • There have been no changes to the scope of the Connecticut Studios Project having a material impact on the projections of Tax Increment Revenue and CSP SSD Tax Revenue, as determined by the Town Manager and the Town Treasurer;
  • Bond Terms and Conditions acceptable to the Underwriters;
  • An amendment to the Purchase and Sale Agreement, dated on or about May~18, 2009 (the “Purchase and Sale Agreement”), by and between the Developer and the South Windsor Redevelopment Agency, to provide (i) that the Town’s obligations to provide financing to the Developer pursuant to Section 8.1 of the Purchase and Sale Agreement have been satisfied and (ii)~that the Town remains open to the consideration at a later date of additional tax increment financing assistance or other appropriate assistance with respect to additional development by Developer in the Project Area;
  • An agreement between the Town and the Developer, or the Developer’s successors or assigns which own the Developer’s Project (“CSP Owner”), which provides for the payment in arrears by the CSP Owner to the Town, during any fiscal year after the Capitalized Interest Period in which Tax Increment Revenue is less than the amount of principal and interest due on the Series 2011 Bonds during such fiscal year, of an amount representing one percent (1%) of the principal amount of the Series 2011 Bonds outstanding, in a form acceptable to the Town Manager and the Developer; and
  • Satisfaction of any other terms and conditions set forth in the Trust Indenture.
(Resolution Continued on Next Page)

ITEM:

17.     J.      (Continued)

Section 2.      Prior to the issuance of the Series 2011 Bonds, the Town Manager and the Town Treasurer are authorized to issue Bonds in the form of notes, temporary notes, interim certificates, debentures or other obligations of the Town (“Notes”) pursuant to Section 8-192 of the Act to finance the Connecticut Studios Project.  Such Notes shall be signed by the manual or facsimile signatures of the Town Manager and the Town Treasurer, have the seal of the Town or a facsimile thereof affixed, be payable at a bank or trust company designated by the Town Manager and the Town Treasurer, be approved as to their legality by Robinson & Cole LLP, bond counsel, and be certified by a bank or trust company designated by the Town Manager and the Town Treasurer.  Such Notes shall be secured as provided by, and shall be issued with maturity dates which comply with, the provisions of the Act.  The net interest cost on the Notes, including renewals thereof, and the expense of preparing, issuing and marketing the Notes, to the extent paid from the proceeds of such renewals or Series 2011 Bonds, may be included in the cost of the Connecticut Studios Project.  Upon the sale of the Series 2011 Bonds, the proceeds thereof, to the extent required, shall be applied forthwith to the payment of the principal of and the interest on any Notes then outstanding or shall be deposited with a bank or trust company in trust for such purpose.

Section 3.      The Series 2011 Bonds or Notes may be sold, in the discretion of the Town Manager and Town Treasurer, in a competitive offering or by negotiation.  If sold in a competitive offering, the Series 2011 Bonds or Notes shall be sold at not less than par and accrued interest, if any, on the basis of the lowest net or true interest cost to the Town.  A notice of sale or a summary thereof describing the Series 2011 Bonds or Notes and setting forth the terms and conditions of the sale may be published in advance of the sale in a recognized publication carrying municipal bond notices and devoted primarily to financial news and the subject of state and municipal bonds.  If sold by negotiation, the Town Manager and the Town Treasurer are authorized to appoint an underwriting firm or firms (the “Underwriter”) and the Series 2011 Bonds or Notes shall be sold pursuant to the terms of a bond purchase agreement or placement agreement (“Purchase Agreement”), at such prices and upon such terms and conditions as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town.  The Town Manager and the Town Treasurer are authorized to execute

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ITEM:

17.     J.      (Continued)

and deliver the Purchase Agreement, on such terms and conditions as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of such Purchase Agreement containing such provisions.

Section 4.      The Town Manager and the Town Treasurer are authorized to prepare and distribute, or cause the preparation and distribution of, a preliminary and/or final official statement or placement memorandum containing customary information regarding the Town, the Project Area, the Connecticut Studios Project District, the Connecticut Studios Project, the Series 2011 Bonds or Notes, the security and sources of payment therefore, the plan of finance for the Connecticut Studios Project, and such other information as determined by the Town Manager and the Town Treasurer to be in the best interests of the Town in order to sell the Bonds (“Offering Memoranda”).  The Town Manager and the Town Treasurer are authorized to execute and deliver Offering Memoranda containing such information as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of such Offering Memoranda containing such information.

Section 5.      The Town Manager and the Town Treasurer are authorized to negotiate and approve the terms and conditions of, including necessary covenants, limitations and restrictions on the Town necessary to obtain, letters of credit, lines of credit, financial guaranty insurance policies, standby bond purchase agreements, guarantees of the Developer or third parties, surety agreements, or any similar agreements (“Credit Facilities”) with one or more financial institutions or other persons providing Credit Facilities (“Credit Facility Providers”) to provide additional security for and for the purchase upon tender of the Series 2011 Bonds or Notes, if any, under circumstances set forth in the Trust Indenture.  The Town Manager and the Town Treasurer are authorized to execute and deliver commitments, reimbursement agreements, policies and such other documents pertaining to Credit Facilities, on such terms and conditions, including necessary covenants, limitations and restrictions on the Town necessary to enter into Credit Facilities, as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of such Credit Facilities containing such provisions.

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ITEM:

17.     J.      (Continued)

Section 6.      The Town Manager and the Town Treasurer are authorized to appoint remarketing agents, investment banking firms or other financial institutions (“Reoffering Agents”) to determine the interest rate on variable rate Series 2011 Bonds or Notes.  The Town Manager and the Town Treasurer are authorized to approve the terms and conditions of, including necessary covenants, limitations and restrictions on the Town necessary to enter into remarketing agreements and other agreements with the Reoffering Agents (“Reoffering Agreements”), which shall provide for, among other things, the terms and conditions for reoffering variable rate Series 2011 Bonds or Notes, the Reoffering Agents’ compensation and the disclosure of the Town’s financial condition.  The Town Manager and the Town Treasurer are authorized to execute and deliver Reoffering Agreements, on such terms and conditions as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of such Reoffering Agreements containing such provisions.

Section 7.      The interest on all or a portion of the Series 2011 Bonds or Notes may be includable in the gross income of the holders thereof under the Internal Revenue Code of 1986, as amended (the “Code”), and if includable, it is determined to be in the public interest to finance the Connecticut Studios Project.

Section 8.      The Town Manager and the Town Treasurer are authorized to execute and deliver a continuing disclosure agreement, on such terms and conditions as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of such continuing disclosure agreement containing such provisions, to comply with the requirements of Section 15c2-12(b)(5) of the Securities Exchange Act of 1934, as amended.


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ITEM:

17.     J.      (Continued)

Section 9.      The Town Manager and the Town Treasurer are authorized to execute and deliver a tax regulatory agreement, on such terms and conditions as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of such tax regulatory agreement containing such provisions, to ensure that the interest on any of the Series 2011 Bonds or Notes intended to be excluded from gross income pursuant to the Code, shall be so excluded.

Section 10.     The Town Manager and the Town Treasurer are authorized to execute, deliver and assign to the Trustee the CSP SSD Services Contract, a tax payment agreement, security agreements, and such other agreements with the CSP Special Services District, the Developer, the Trustee and other parties, in accordance with the Act, the SSD Act and other provisions of the Connecticut General Statutes, on such terms and conditions as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of such agreements containing such provisions.

Section 11.     The Town Manager and the Town Treasurer are authorized to execute and deliver a development agreement with the Developer, if necessary, on such terms and conditions as shall be determined by the Town Manager and the Town Treasurer to be in the best interests of the Town as evidenced by their execution of the final form of such development agreement containing such provisions.

Section 12.     The Town Manager and the Town Treasurer are authorized to appoint, and if any such appointment shall heretofore have been made by the Town Manager or the Town Treasurer, such appointment is hereby ratified and confirmed, the Trustee, the Underwriter and such additional firms or professionals, or substitute firms or professionals, as shall be necessary or appropriate to consummate the transactions contemplated by this Resolution and the foregoing documents.


ITEM:

17.     J.      (Continued)

Section 13.     The Town Manager and the Town Treasurer are authorized, and if any such action shall heretofore have been taken by the Town Manager or the Town Treasurer, such action is hereby ratified and confirmed, (i) to publish such notices, hold such hearings, make such representations and agreements, and take such other actions as shall be necessary to issue the Series 2011 Bonds or Notes authorized by this Resolution and exclude the interest on such Series 2011 Bonds or Notes from gross income for federal income tax purposes, (ii) to make, execute and deliver all such additional instruments, agreements, certificates, and documents, including, but not limited to, any tax compliance agreements, tax certificates, tax forms, investment agreements or assignments, and (iii) to do and perform such acts and to take such actions as may be necessary or required for the consummation of the transactions provided for and contemplated by this Resolution and any supplements or amendments thereto and the financing or reimbursing of the costs of the Connecticut Studios Project and related expenses.

Section 14.     This Resolution shall take effect immediately; provided, however, that the authority granted hereunder for the issuance of the Series 2011 Bonds shall expire on January 1, 2012.

Was made by Councillor Hale
Seconded by Councillor Favreau

Councillor Hale stated that it is obvious tonight that there is massive support for this financing.  The TIF financing is the technical piece that allows this project to come to this Town.  The Town has hired the best professionals to review this project and how it is being financed.  General Obligation Bonds are not being used because if General Obligation Bonds are used the taxpayers of the Town will be responsible for paying that back.  What is being proposed with the TIF financing is the best possible, least risk with the most benefits.  Jobs are needed and the Town should be moving forward with this project and the financing.  The land has been vacant for 15 years and there are no other prospects for this parcel.  Councillor Hale then stated that she fully supports this project and the TIF financing.

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ITEM:

17.     J.      (Continued)

Councillor Yagaloff stated that he would be requesting an amendment later in the meeting after he has heard other Councillors comments.  The amendment that he will propose is in subsection (k), to strike out the language “in which Tax Increment Revenue is less than the amount of principal and interest due on the Series 2011 Bonds during such fiscal year”.  This would allow the Town to receive 1% of the principle amount of the Series 2011 Bonds yrearly.  Councillor Yagaloff stated he is not satisfied with the TIF financing agreement because it does not generate revenue during phase I.  Would like the TIF financing mechanism modified to an 80/20 pledge.

Councillor McCann agreed with Councillor Yagaloff and felt that the Town Council’s job is to protect the taxpayers.  If this project is not fully built out, the Town will not generate enough taxes to pay off the bond.  There is not enough support to review using General Obligation Bonds which would save the Town money, so the Town Council needs to review other alternatives and arrive at a compromise.  Councillor McCann stated that in the past he has stated that he would not support a pledge of 100%, but if the Town were to pledge 100% for the first five years that would get the Town through the period of all the projected buildings being built.  After the five years the Town could then pledge 80% to pay off the financing.  This would protect the Town from this project not being built out as scheduled.

Councillor Favreau referred to a memo from Robinson & Cole which says the TIF bonds would not oblige the Town of having any legal obligation to pay the principle or interest on these TIF Bonds.  The burden of repayment relies upon the taxes which are solely coming from the Principals and the owners.  To substitute a General Obligation Bond would put the full faith and credit of the Town behind paying those bonds.  The deal being looked at tonight is the best deal for the South Windsor taxpayers.


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ITEM:

17.     J.      (Continued)

Mr. Galligan explained that the 100% pledge comes from talking with the Developer and Underwriters because this is what they are looking for.  The concerns with subsection (k), Mr. Galligan said he tried to come up with a system without having any bad effects on the bonds.  This would give a mechanism that would allow minimal payment to come to the Town regardless of what the appraisal came in at.  Attorney Panico could review the remainder of this resolution.  The Consultants that the Town has hired are the individuals who are reviewing this project to make sure it is the best interest of the Town and will protect the taxpayers.

Answering questions from the Council, Mr. Galligan explained that the studio, the mill building and the hotel will have to be done first and those three items will be enough to pay for the TIF financing.  The hotel can not get an abatement because the project is using TIF financing and a project can not get both.  Mr. Galligan then explained that he has been trying to get the 20% in a different way.  This is a business deal not a municipal deal and trying to make sure that the Town has next to no risk and if it is great project, moves forward and makes a lot of money then at some point the Town will get the reward to go along with that.  What the Town Council is doing for that risk is giving up future taxes that you do not have right now and getting public improvements.  If the Town Council does not do the deal then there will be no taxes other than the $18,000 per year.  

Councillor Bazzano stated that the Town is giving the developers 21 acres and he would like to see something in return such as real estate taxes.  Councillor Bazzano stated he does like Councillor Yagaloff’s suggestion.

Attorney Panico stated that the subsection (k) was structured so that it only applies in years when the tax revenue did not exceed the debt service on the bonds.  The theory being that once the Town is getting money in excess of the debt service the whole amount will be coming to the Town.  There is a limitation under the Internal Revenue code that you can not get payments back from the developer that equal more than 10% of the debt service on the bonds.  If it is written into the contract that the $150,000 payment or the 1% of


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ITEM:

17.     J.      (Continued)

the principle amount is going to occur every year during the bond sale it is going to exceed the 10% level.  There will be a mechanism put in that will ensure that the Town never receives more than 10% of the debt service over the life of the bonds from this private payment from the developer.

Attorney Dave Panico explained that Councillor Delnicki posed several questions as follows:

  • Question:  It has been stated that there are no risks to the Town if the Connecticut Studios fails and defaults on the TIF Bonds that would be issued by the Town.  Is this true that there is no risk of any kind to the Town?  
Answer:  It can’t be ensured that there is no risk of any kind.  It is never known in the future what risks there could be, however the Statutes are very clear on the matter.  If you structure the bond issue the proper way, the Town’s sole limitation to the Bond Holder is to pay the taxes generated by this property.  There is not a general obligation pledge.  There is no moral or implied obligation to pay the bonds from any other source of funds, it is solely from the property taxes generated from the property which are paid by the owner of the property which is contemplated to be the developer.

Councillor Delnicki stated for the record that the resolution that was provided is structured to meet that test?  Attorney Panico answered exactly.

Attorney Panico stated that there will be agreements in place where the Town has an obligation to assess, collect or foreclosure with respect to this project.  

  • Question:  would the failure of the bonds harm in any fashion the credit rating, future ability to sell General Obligation Bonds, or future TIF Bonds for other projects?
Answer:  Matt asked the Town’s General Obligation Bond Financial Advisor and they were unaware of any situation where a TIF Bond default effected a General Obligation Bond rating of the Town and we have been told that the Bond Buyers for these bonds are very sophisticated and understand the limited recourse of these bonds and

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ITEM:

17.     J.      (Continued)

understand it is really the developers obligation to pay for the debt service on the bonds, it is not the full faith and credit of the Town.  Therefore there is a distinction so the end result is it would not affect the Town’s ability to sell General Obligation Bonds or TIF Bonds.

Councillor Delnicki stated for the record, so if the Town does what the Town is supposed to do here, the Town is protected?  Attorney Panico stated yes.

  • Question:  If there is a default and the properties are liquidated to satisfy creditors, would any future tax revenue associated with the parcels liquidated be encumbered causing tax revenues to go to the future holders of defaulted TIF Bonds?
Answer:  In the analysis that is a possibility because what could occur is the most likely scenario is there will be a mortgage placed on these properties by the Bank who is financing the production of the studios.  If the owner is not paying their taxes, the Bank would step in and they would pay the taxes on the property because they want to protect their mortgage on the real estate.  If necessary the Bank will foreclose on the owners of the property and they will take it over and sell the property.  In the event that there are tax liens that are so great that not even the Bank wants to keep paying the property taxes it is possible that the Bond Holders would not get paid.  The Bond Holders would be interested in restructuring the bonds and selling off the project and make the debt service smaller and it is possible that the Town would not see tax revenue from these parcels for a very long time.  This would be a very particular set of circumstances that would create that situation.

Attorney Panico stated that in the bond offering documents there is usually a bond risk and consideration section where you try to layout as many potential risks to bond holders as possible.  A change in legislation that would affect this project like a change in the production credits is definitely going to be laid out for people to see.  


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ITEM:

17.     J.      (Continued)

Councillor Delnicki then stated that Councillor Yagaloff and McCann both make very interest points on different views of what the Town could be doing to slightly restructure how this deal is stated.  Councillor Delnicki feels the Town needs as many tax dollars up front as possible.  

Attorney Panico explained that the idea behind subsection (k) is that accompanying this clause would be what is called a Tax Regulatory Agreement.  The Tax Regulatory Agreement would prohibit the Town from receiving an amount representing more than 10% of the present value of the debt service on the bonds and every year there would be a measurement of that amount and to the extent that the amount would exceed 10% the Town would not be able to receive it.

Mayor Pelkey stated that the Town has to balance this issuance in a way that it will sell out in the bond market and not violate any of the rules and get the Town the tax dollars and jobs.  The Town has hired the best possible consultants to advise the Town how to structure this TIF financing in such a way that the bonds are marketable.  The Town could do an 80/20 pledge but would get a worse rate.  Mayor Pelkey informed the public of Mr. Ramiro Albarran’s credentials and qualifications.  Mayor Pelkey then questioned Mr. Albarran if the Town went to an 80/20 pledge, would the Town get an 8% rate?  Mr. Albarran explained that the interest rate will be much more penalizing because there will be a larger reliance on the phase II portion of the project and the bank loans that are necessary to complete the construction are not in place yet so there is a lot more risk and therefore the yield will be higher.  The Town also runs the risk that the amount of bonds that are necessary to move this project forward so that the tax revenues become available do not yield enough in proceeds to move the project forward.  

Mayor Pelkey stated that the Town is governed by certain rules and regulations that need to be met.  The bonds need to be structured in order to be sold.  The bond holders will evaluate this project to make sure everything is in place.  The investors will be putting their money up and will evaluate this project.  The Town presently brings in revenue of $18,000 per year on this property.  

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ITEM:

17.     J.      (Continued)

Councillor McCann made a motion to extend the meeting past 11:00 p.m. in order to finish Agenda Items 17. J. and 17. K.  Councillor Yagaloff seconded the motion, and the Motion failed.

Councillor Hale made a motion to extend the meeting for twenty minutes past 11:00 p.m. in order to finish Item 17. J.  Mayor Pelkey seconded the motion, and the Motion failed.

Councillor Hale made a motion to extend the meeting in order to finish Item 17. J.  Mayor Pelkey seconded the motion.

Councillor McCann amended the motion to add Item 17. K.  Councillor Prague seconded the Amendment.  The Amendment failed; and the Motion failed.

Councillor Yagaloff made a motion to extend the meeting past 11:00 p.m. in order to finish Items 17. J. and 17. K.  Councillor Prague seconded the motion; and it failed.

Mayor Pelkey made a motion to Call the Question.  Councillor Hale seconded the Motion, and it failed on a Roll Call vote of 5 to 4 with Mayor Pelkey, Deputy Mayor Pelkey, Councillor Delnicki, Favreau and Hale voted in favor of Calling the Question; and Councillors McCann, Yagaloff Bazzano and Prague voted in opposition of Calling the Question.

Councillor Hale made a motion to extend the meeting for half an hour past 11:00 p.m.  Mayor Pelkey seconded the motion; and it was approved, unanimously.

Mayor Pelkey reiterated that he feels if the original proposal for the TIF Bonds is changed from its original version, the Town may risk the chance of floating these bonds at the best rate that the market will bear and would put this project in jeopardy.

Deputy Mayor Havens felt that the Council should listen to the Consultants and support this resolution as a whole.  This project will be good for the community.


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ITEM:

17.     J.      (Continued)

Councillor Yagaloff felt that Councillor McCann has made a tremendous concession from his previous view of refusing to do a 100% financing and has suggested doing 100% pledge for five years and an 80% pledge for the remainder of the time until the bonds are paid off.

Mayor Pelkey questioned if the above scenario would allow the bonds to be floated?  Mr. Ramiro Albarran of Stone & Youngberg LLC explained that the Investors would still view this deal as an 80% transaction.

Councillor Yagaloff suggested that the Town Council approve the 100% pledge for 5 years and then 80% pledge for the remainder of the financing.  If after an analysis is done and it is felt the transaction will not work, then the Town Council could revise the vote.  

After further discussion, Councillor Yagaloff made a motion to amend the resolution, under Section 1, Item K, seconded by Mayor Pelkey, which presently reads as follows:

(k)     An agreement between the Town and the Developer, or the Developer’s successors or assigns which own the Developer’s Project (“CSP Owner”), which provides for the payment in arrears by the CSP Owner to the Town, during any fiscal year after the Capitalized Interest Period in which Tax Increment Revenue is less than the amount of principal and interest due on the Series 2011 Bonds during such fiscal year, of an amount representing one percent (1%) of the principal amount of the Series~2011 Bonds outstanding, in a form acceptable to the Town Manager and the Developer; and

Amend to read as follows (above bolded statement was removed):

(k)     An agreement between the Town and the Developer, or the Developer’s successors or assigns which own the Developer’s Project (“CSP Owner”), which provides for the payment in arrears by the CSP Owner to the Town, during any fiscal year after the Capitalized Interest Period of an amount representing one percent (1%) of the principal amount of the Series~2011 Bonds outstanding, in a form acceptable to the Town Manager and the Developer; and

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ITEM:

17.     J.      (Continued)

Attorney Panico from Robinson & Cole suggested an amendment by inserting “subject to limitations under the Code”.  This amendment was accepted as a friendly amendment.

Amend to read as follows (bolded item was inserted):

(k)     An agreement between the Town and the Developer, or the Developer’s successors or assigns which own the Developer’s Project (“CSP Owner”), which provides for the payment in arrears by the CSP Owner to the Town, during any fiscal year after the Capitalized Interest Period of an amount representing one percent (1%) of the principal amount of the Series~2011 Bonds outstanding, in a form acceptable to the Town Manager and the Developer and subject to limitations under the Code; and

Councillor McCann made a motion to amend the eighteenth WHEREAS, changing “and” to “or”.  In Section 1 after interest in, inserting “100% of” and in Section 1 after Tax Increment Revenue inserting “for the first five (5) years after issuance of the Series 2011 bonds and 80% of the Tax Increment Revenues thereafter”.  Councillor Bazzano seconded the amendments.

The first Amendment to read as follows (bolded change):

WHEREAS, in accordance with the Act, the Town, acting by and through the Development Agency, is authorized to issue from time to time Bonds of the Town which are payable solely from and secured by (1) a pledge of and lien upon any or all of the income, proceeds and revenues of development projects, (b) taxes or payments in lieu of taxes, or both, in whole or in part, allocated to and paid into a special funding, or (c) any combination of the methods in (a) or (b); and

The second Amendment to read as follows (changes bolded)

Section 1.      In furtherance of the underlying purposes of the Act, the Town hereby appropriates not exceeding $15,000,000 to finance the Connecticut Studios Project, grants a pledge of and a security interest in 100% of the Tax Increment Revenue for the first five (5) years after issuance of the Series 2011 Bonds and 80% of Tax Increment Revenue thereafter and the ...

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ITEM:

17.     J.      (Continued)

Councillor McCann explained that the reason for these amendments is to ensure that the project gets fully built out.  If the project is fully built out, these amendments will be irrelevant and the bonds will get repaid and the Town will get excess revenue.  If the built out is delayed the Town will run the risk of tax increment financing not being paid by the tax revenues.  Within the first five years the additional buildings should be built or underway and after the five year period the Town would not need to pledge more than 80% of the tax revenues because the Town would have more than enough to pay off those tax revenues.  

Mr. Ramiro Albarran of Stone & Youngberg LLC stated that the way the Bond Investor community is going to look at this is only phase I portion of this property.  Relying on future events of additional capital coming to this transaction, which would be necessary for phase II, the Town will not get that benefit in this project from the Investor community.  This amendment will have an impact on the rate and the total proceeds.  This proposal will be running the risk of dividing the proceeds to move the transaction forward.

Councillor Hale questioned Mr. Dan Marsh if there is an incentive already in the original agreement to give incentive to build the second phase?  Mr. Marsh explained that if the revenue from TIF is not sufficient to meet the debt service, the Special Service District mechanism will cover the amount necessary to meet the debt service.

Mayor Pelkey questioned if there is any incentive to the developers to get the second phase done?  Mr. Marsh stated that the developers do not get money unless they build and that will be the only way for them to make money.

Councillor Yagaloff stated that the Underwriter is saying this amendment may affect the interest rate or amount of the bonds, but the Underwriter will not know until he tries to go out and sell the bonds.  Mr. Ramiro Albarran explained that the Town is going to have five years, two of which are interest so really only three years of 100% pledge and then 25 years of the 80% pledge so amounts will be fairly close to one another in the end result.


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ITEM:

17.     J.      (Continued)

Mr. Galligan added that the Town will not know if the Bond Holders will take this deal, and if they do not the Town will not have a project and the tax credits will be gone.

Councillor Favreau stated that while it is the Town Council’s purview to protect residents, the Town has hired experts and the Town Council needs to rely on them to get this project done.  

Councillor Prague felt that that numbers could work and the Town Council should vote on this item.

Councillor McCann made a motion to extend the meeting five more minutes.  Mayor Pelkey seconded the motion; and it was approved, unanimously.

Councillor McCann stated he still wants to protect the Town but changing the five yeas to twenty year should be long enough to satisfy the Bond Holders.

Councillor McCann made a friendly amendment to change five (5) years to twenty (20) years.  Councillor Prague second; and it was approved, unanimously.

To read as follows (change in bold):

Section 1.      In furtherance of the underlying purposes of the Act, the Town hereby appropriates not exceeding $15,000,000 to finance the Connecticut Studios Project, grants a pledge of and a security interest in 100% of the Tax Increment Revenue for the first twenty (20) years after issuance of the Series 2011 Bonds and 80% of Tax Increment Revenue thereafter and the …

Mr. Ramiro Albarran stated that he has never sent this before, but clearly twenty years is better than five years.

Mayor Pelkey called for a vote on the Amendments and they passed on a Roll Call vote of 6 to 3 with Deputy Mayor Havens, Councillor’s Bazzano, Delnicki, McCann, Prague and Yagaloff voting in favor of the Amendments; and Mayor Pelkey and Councillor’s Favreau and Hale voting in opposition to the Amendments.

Mayor Pelkey called for a vote on the Amended Resolution; it was approved, unanimously.


ITEM:

22.     Adjournment

At 11:40 p.m. Councillor Hale made a motion to adjourn the Regular Meeting.  Mayor Pelkey seconded the motion; and it was approved, unanimously.

Respectfully submitted,


                                                
Deborah W. Reid
Clerk of the Council


Tax Refunds – Exhibit A