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2010-27448 ResoRESOLUTION NO. '. 2010-27448 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND ADOPTING THE FIRST AMENDMENT TO THE CITY OF MIAMI BEACH CAPITAL BUDGET FOR FISCAL YEAR (FY) 2009/10 AND DECLARING THE INTENT OF THE CITY TO ISSUE DEBT OF THE CITY TO REIMBURSE FUNDS ADVANCED FROM THE STORMWATER PROJECTS LINE OF CREDIT FOR CERTAIN STORMWATER EXPENSES WHEREAS, of the total of $168,754,362 approved in the adopted Capital Budget for FY 2009/10, approximately $44.8 million in proposed new Water and Sewer Bonds, $65.7 million in proposed new Stormwater Bonds, and $18.2 million in Parking Bonds were anticipated for FY 2009/10, as part of a multi-year financing plan; and WHEREAS, the City's Capital Improvement Plan identifies a five (5) year need of $51.2 million for water and sewer projects and $95.5 million for stormwater projects; and WHEREAS, a line of credit was secured to allow for preliminary financing and would ultimately be replaced by Water/Sewer and Stormwater bonds issued over a series of years beginning in FY 2009/10; and WHEREAS, there is an immediate need for $1,107,397, of which an appropriation of $357,397 from the Stormwater Projects Line of Credit is recommended to substitute for the "Future Bonds" identified in the Bayshore Neighborhood Sunset Islands 1 & 2 Bid Package 8E project, in the Adopted Capital Budget for FY 2009/10; and WHEREAS, an additional appropriation of $45,000 from the Stormwater Projects Line of Credit is recommended for the Belle Isle Outfall Replacement Project; and WHEREAS, an appropriation of $705,000 from the Fund 420 Water and Sewer Gulf Breeze Loan is recommended to substitute for the "Future Bonds" identified in the North Shore ROW Neighborhood Improvement Project, in the Adopted Capital Budget for FY 2009/10; and WHEREAS, it is recommended that the stormwater related expenses be funded from the Stormwater Projects Line of Credit in order to keep these projects moving until such time as financing can be put in place. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission approve and adopt the First Amendment to the Capital Budget for FY 2009/10 (to replace previously approved funding through future bonds as shown below: Projects: Funding: Stormwater- Water & Sewer Pro'ect Component Component Sunset Islands 1 & 2 Outfalls No. 1 & 2 $307,397 Sunset Islands 1 & 2 ROW ----------------------------------------------------- $50,000 --------------- --------------- Belle Isle Outfall Replacement______________ ___ $45,000_ _______ North Shore ROW Water Main Crossin s $705,000 Total: $402,397 $705 000 Fundin Source Amount Stormwater Projects Line of Credit: Fund 420 -Gulf Breeze W&S Loan $402,397 $705,000 Total: $1,107,397 PASSED AND ADOPTED THIS ~ DAY OF ~4~ 2010. Attest: ~~.c~ ROBERT. PARCHER, CITY CLERK I ERR OWER, MAYOR APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION rl ~, ~ ti ~ it Attorn Date Condensed Title: COMMISSION ITEM SUMMARY A Resolution of the Mayor and City Commission of the City of Miami Beach, Florida, approving and adopting the First Amendment to the City of Miami Beach Capital Budget for Fiscal Year (FY) 2009/10 and declaring the intent of the City to issue debt of the City to reimburse funds advanced from the Stormwater Projects Line of Credit for certain stormwater expenses. Ke Intended Outcome Su orted: Improve Stormwater Drainage Citywide; Ensure Value and Timely Delivery of Quality Capital Projects; Maintain Ci 's Infrastructure; and Increase Communi Satisfaction with Ci Government Supporting Data (Surveys, Environmental Scan, etc.): Based on the 2009 Community Survey, 43.7% of the residents rated storm drainage to avoid flooding as excellent or good. Completed Capital Improvement Projects are a major driver in resident perceptions of value of services for tax dollars paid and overall quality of life. Storm drainage and water main replacements are ca ital-related im rovements still identified as ke areas of focus. Issue: Should the Commission amend the Ci of Miami Beach FY 2009/10 Ca ital Bud et? item summa iRecommendation: The City's Capital Improvement Plan encompasses a planning horizon of five (5) years and outlines anticipated annual capital budget needs on a year by year basis during this five (5) year planning horizon. The Adopted FY 2009/10 Capital Budget identified $168,754,362 in capital needs. The Adopted FY 2009/10 Capital Budget also identified proposed bond issuances in the approximate amounts of $44.8 million in Water and Sewer, $65.7 million in Stormwater, and $18.2 million in Parking, as part of amulti-year financing plan. The city's Capital Improvement Plan identifies a five (5) year need of $51.2 million for water and sewer projects and $95.5 million for stormwater projects. These projections are forecasted through FY 2013/14. In order to proceed with the capital needs of the City, a line of credit was secured to allow for preliminary financing and would ultimately be replaced by water/sewer and stormwater bonds issued over a series of years beginning in FY 2009/10. Under this approach, the City intended to first seek a line of credit which would allow the City to have the necessary funding capacity to enter into new agreements, while allowing the City more time to both build the necessary rate capacity (debt service coverage) to issue additional tax-exempt bonds through rate increases and also spend down the current committed but unspent bond proceeds. Further, this approach provided the City with more time to refine the cost estimates for the water, sewer, stormwater and parking projects anticipated for FY 2009/10.On May 13, 2009, Resolution No. 2009-27076 was approved, "Authorizing Loans /n An Aggregate Principal Amount Not To Exceed $60,000,000 Outstanding At Any Time From Suntrust Bank, Bank of America, N.A., And Wachovia Bank, National Association, To Pay Costs of Water, SewerAnd Stormwater Projects..." On October 14, 2009, Resolution No. 2009-27243 was approved, authorizing three loans from the City of Gulf Breeze, Florida, which included "The Issuance Of Not To Exceed $30, 000, 000 In Aggregate Principal Amount Of City of Miami Beach, Florida Water And Sewer Revenue Bonds, Taxable Series 2009)-1 C, For The Principal Purpose Of Paying The Cost Of Certain Improvements To The Waterand Sewer Utility...': The issuance of bonds has been impacted by the destabilization and lack of liquidity of the financial markets. Although this has slowed the process of accessing funds for the City's CIP, the City continues to work with its Financial Advisors to secure the necessary funding. Nonetheless, the administration remains committed to the goal of keeping the infrastructure projects moving forward. There are four projects that are either fully permitted and ready for construction, or in the permitting process, which will benefit from mid-year appropriations in order to keep the projects moving forward. To fund these needs, the appropriations below are recommended to substitute for the "Future Bonds" identified in the Adopted Capital Budget. Advisory Board Recommendation: Financial Information: Source of F Amount Account unds: ~ $402,397 Stormwater Projects Line of Credit 2 705,000 Fund 420 Gulf Breeze, Series 2010 W&S Loan OBPI Total $1,107,397 Financial Impact Summary: ....~ v.c. A .7 VIIIGC LCyI.`ilA~1Ve ~ racK~ng: S KGB COQ/V" FHB JMG T:WGENDA~2010Uu1y 14U2egular~FY10 - 1st Capital e d nt S M.doc m M l AM I B EAC H AGEPIDA ITEM~C 7 u DATE ~ (~ m MIAMIBEACH Cif~- of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachN.gov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower and Members of the City Commission FROM: Jorge M. Gonzalez, City Manager DATE: July 14, 2010 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND ADOPTING THE FIRST AMENDMENT TO THE CITY OF MIAMI BEACH CAPITAL BUDGET FOR FISCAL YEAR (FY) 2009/10 AND DECLARING THE INTENT OF THE CITY TO ISSUE DEBT OF THE CITY TO REIMBURSE FUNDS ADVANCED FROM THE STORMWATER PROJECTS LINE OF CREDIT FOR CERTAIN STORMWATER EXPENSES ADMINISTRATION RECOMMENDATION Adopt the Resolution. BACKGROUND Planning for capital improvements is an ongoing process; as needs change within the City, capital programs and priorities must be adjusted. The Capital Improvement Plan ("CIP") serves as the primary planning tool for systematically identifying, prioritizing and assigning funds to critical City capital development, improvements and associated needs. The City's annual capital budget represents the first year of that Capital Improvement Plan. The City's Capital improvement Plan encompasses a planning horizon of five (5) years and outlines anticipated annual capital budget needs on a year by year basis during this five (5) year planning horizon. The Adopted FY 2009/10 Capital Budget identified $168,754,362 in capital needs. The Adopted FY 2009/10 Capital Budget also identified proposed bond issuances in the approximate amounts of $44.8 million in Water and Sewer, $65.7 million in stormwater, and $18.2 million in Parking, as part of a multi-year financing plan. The city's Capital Improvement Plan identifies a five (5) year need of $51.2 million forwaterand sewer projects and $95.5 million for stormwater projects. These projections are forecasted through FY 2013/14. In order to proceed with the capital needs of the City, a line of credit was secured to allow for preliminary financing and would ultimately be replaced by water/sewer and stormwater bonds issued over a series of years beginning in FY 2009/10. Under this approach, the City intended to first seek a line of credit which would allow the City to have the necessary funding capacity to enter into new agreements, while allowing the City more time to both build the necessary rate capacity- (debt service coverage) to issue additional tax-exempt bonds through rate increases and also spend down the current committed but unspent bond proceeds. Further, this approach provided the City with more City Commission Memorandum Resolution Adopting the First Amendment to the City of Miami Beach FY 2009/10 Capital Budget July 14, 2010 Page 2 time to refine the cost estimates for the water, sewer, stormwater and parking projects anticipated for FY 2009/10. On May 13, 2009, Resolution No. 2009-27076 was approved, "Authorizing Loans In An Aggregate Principal Amount Not To Exceed $60, 000, 000 Outstanding At Any Time From Suntrust Bank, Bank of America, N.A., And Wachovia Bank, National Association, To Pay Costs of Water, Sewer And StormwaterProjects..." On October 14, 2009, Resolution No. 2009-27243 was approved, authorizing three loans from the City of Gulf Breeze, Florida, which included "The Issuance Of Not To Exceed $30,000,000 In Aggregate Principal Amount Of City of Miami Beach, Florida WaterAnd Sewer Revenue Bonds, Taxable Series 2009)-1 C, For The Principal Purpose Of Paying The Cost Of Certain Improvements To The Water and Sewer Utility...': The issuance of bonds has been impacted by the destabilization and lack of liquidity of the financial markets. Although this has slowed the process of accessing funds for the City's CIP, the City continues to work with its Financial Advisors to secure the necessary funding. Nonetheless, the administration remains committed to the goal of keeping the infrastructure projects moving forward. ANALYSIS There are four projects that are either fully permitted and ready for construction, or in the permitting process, which will benefit from mid-year appropriations in order to keep the projects moving forward. The projects are the following: Sunset Islands 1 ~ 2 ROW -The project is located in the Bayshore Neighborhood and is referred to as Bid Package 8E (BP-8E) in the ROW Improvement Projects program. The Project recently underwent a redesign effort to increase the scope, primarily to provide for additional stormwater improvements. The redesign phase of the Project is now complete and the project is in the permitting phase. The permit application has been submitted to the Department of Environmental Regulatory Management (DERM). The project consultant, Chen & Associates, estimates the DERM permit fee will approximate $42,000. However, the actual amount of the fee is determined by DERM after the permit application has been approved. Upon approval by DERM, a permit fee payment will be required. Staff requests approval to appropriate $50,000 from the stormwater Capital Projects Line of Credit to fund the permit fee when the permit application is approved and the amount of the final permit fee is determined by DERM. The amount drawn against the Line of Credit will only be the actual amount of the permit fee and would be repaid from future stormwater bond funds, when available. Sunset Islands 1 & 2 Outfalls No. 1 Sz 2 - In conjunction with part of the BP-8E project scope to provide additional stormwater improvements, the City performed detailed inspections of all the outfalls within these Islands to determine their condition and to identify required repairs and/or improvements. Upon reviewing the inspection results, the City determined that Outfalls No. 1 and No. 2, located adjacent to the West 29~' Street Bridge, were not operating at the optimal level of service and that their diameters should be increased. The City further determined that these improvements could be built in advance of the BP-8E project in order to improve the flooding conditions occurring at the entrance to Sunset Island 1 and to provide stormwater benefits to the Sunset Islands No.1 and 2 City Commission Memorandum Resolution Adopting the First Amendment to the City of Miami Beach FY 2009/10 Capital Budget July 14, 2010 Page 3 communities more quickly. Therefore, the Public Works Department designed and permitted an increase in the pipe sizes for Outfalls No. 1 and No. 2. These plans have been permitted and were provided to several contractors who are part of the Job Order Contracting (JOC) system. The scope of work to be performed includes the construction required to increase the diameter of the outfalls. Outfall No.1 will be increased from 8-inch diameter to 18-inch diameter. Outfall No.2 will be increased from 10-inch diameter to 18-inch diameter. The work also includes exfiltration trenches and relocation and replacement of existing landscaping. Job Order Contract (JOC) Price proposals to implement these improvements have been received from two JOC contractors. The Special Assistant to the City Manager has reviewed the proposals and is evaluating potential value engineering options and reviewing the proposals to identify further savings. The amount drawn against the Line of Credit will be repaid from future stormwater bond funds, when available. Belle Isle Outfall Replacement - On November 16, 2009, the CIP Department was presented with a Technical Memorandum from Jacobs Edwards and Kelcey the Engineer of Record (EOR), outlining a solution to resolve the recirculation of storm water at the control structure (CS-3), leading to the Belle Isle east outfall. Control structure CS-3 had previously received remedial work pursuant to Jacobs' recommendations which included the installation of the tidal inflow prevention valves, and an orifice plate at CS-3 in December 2008. Tests were conducted in January 2009, and at that time there was no water observed recirculating at the CS-3. However, during the high tide events experienced in late 2009, it became apparent the "solution" provided by Jacobs was ineffective. CIP held a series of meetings and site inspections with Jacobs, who recommended the installation of a neoprene gasket at the CS-3 orifice. Jacobs later stated this would not be effective and proceeded to design the east outfall pipe replacement. Simultaneously, in October 2009, CIP hired EnviroWaste, to clean and videotape the conditions of the outfalls located to the east, west, and north (Farrey Lane) of Belle Isle, to determine their condition. The EnviroWaste Report was submitted in late October, and these outtalls have either collapsed, or are significantly restricted. The condition of the outfall pipes contributes to the ineffective tidal inflow prevention devices installed to the west and north outfalls since groundwater intrusion occurs upstream of the tidal inflow prevention devices. The Administration has included a project in the 2010/2011 Capital Budget forthe replacement of the Belle Isle east outfall pipe (Phase I) and replacement of the west and north outfall pipes (Phase II). The FOR submitted drawings and calculations for the east outfall pipe replacement on October 7, 2009, and the DERM permit application was prepared and submitted. On December 16, 2009, a Completeness Summary Report was issued by DERM requesting that the City first obtain a permit from the Florida Department of Environmental Protection (FDEP) as well as certain changes to the submitted drawings prior to DERM's approval. On March 5, 2010, following a series of discussions and a meeting with the FDEP, the FDEP issued a "No Notice General Permit for Activities in Uplands" for the Project. On a parallel path to the FDEP's permitting process, the FOR updated their drawings as requested by DERM in their summary report. The FDEP permit and Jacob's revised drawings were re- submitted to DERM. On June 6, 2010, the City received the DERM Class II permit required to commence the construction of the Belle Isle East Outfall. On April 27, 2010, the City provided construction documents to a Job Order Contracting (JOC) contractor for a bid, which was received on May 28, 2010. Staff has reviewed the JOC City Commission Memorandum Resolution Adopting the First Amendment to the City of Miami Beach FY 2009/10 Capital Budget July 14, 2010 Page 4 cost proposal for the specified scope of work and finds it to be fair and reasonable. With the issuance of the DERM Class II permit on June 6, 2010, the City has the necessary regulatory approvals to initiate construction. A request to Jacobs Engineering to pay for these services directly has been made but not responded to as of this writing. to an effort to get this resolved and based upon the direction previously received from the City Commission, the Administration requests approval of the outlined appropriation. The amount drawn against the Line of Credit will be repaid from future stormwater bond funds, when available. North Shore ROW Project Water Main Crossings -The North Shore ROW Neighborhood Improvement Project is referred to as Bid Package 2 (BP-2) in the ROW Improvement Projects program and includes extensive water main replacements throughout the neighborhood. The project consultant is Calvin Giordano and Associates, Inc. (CGA). On March 25, 2010, the State of Florida Department of Transportation (FDOT) notified the City that they had various projects along state-owned roads within the North Shore neighborhood that were scheduled to start within the next year. The FDOT always imposes apost- construction moratorium to not allow any work within their right-of-way for a five (5) year period. Therefore, staff met with FDOT personnel to evaluate the City's and FDOT's project scope of work and schedules. It was determined that a five (5) year moratorium along 71St Street, and Collins Avenue state rights-of-way, would impact the City's neighborhood improvement project. On May 2010, CGA provided the City of Miami Beach (CMB) signed and sealed drawings for the water mains in the North Shore neighborhood, which already have been submitted for permitting to the agencies which have jurisdiction on this matter. The previously mentioned FDOT projects only involve above ground improvements, mainly including: moderate road reconstruction, milling, resurfacing, signage, pavement markings, curb & gutters, sidewalks, and ADA ramps. Since this is a time sensitive request and the water main crossings have to has to be completed and accepted by FDOT's imposed deadline of December 15, 2010, the City determined that the water main crossings could be constructed in advance of the rest of the BP-2 project. The North Shore Right-of-Way Improvements Project consists of water main construction across the 71St Street right-of-way at six (6) different locations and across Collins Avenue at 74th Street. It is estimated that the installation of approximately 2,639 LF of 8 inch diameter water main would be required to be installed in order to get the City's scope complete and ahead of the FDOT projects. It is estimated that the total funds needed forthe underground work, would approximate $705,000. The following table provides a funding summary of the projects described above: City Commission Memorandum ' Resolution Adopting the First Amendment to the City of Miami Beach FY 2009/10 Capital Budget July 14, 2010 Page 5 ROW PROJECTS - IMMEDIATE FUNDING NEEDS PROJECT FUNDING NEEDED TO ADVANCE CONSTRUCTION Sunset Islands 1 & 2 Outfalls No:1 & 2 (1) Permitted, Pre_Construction $ 307,397 Sunset Islands 1 & 2 ROW (1) ------------------------------------------------------- In Permitting -------------------------- $ 50,000 Belle Isle Outfall Replacement -------- Permitted, Pre-Construction -------------------- $ 45,000 Sub-total Stormwater Projects Line of Credit: $ 402,397 North Shore ROW Water Main Crossings (1) In Permitting $ 705,000 Sub-total Fund 420 -Gulf Breeze W&S Loan: $ 705,000 Total: Total: $ 1,107,397 ~~~ Hpprovea as tunaea by Future Bonds in FY 2009/10 Capital Budget As can be seen from the above table, the most immediate need is for $1,107,397, of which $1,062,397 had been approved as funded by Future Bonds in the Adopted Capital Budget for FY 2009/10. An appropriation of $357,397 from the Stormwater~Projects Line of Credit is recommended to substitute for the "Future Bonds" identified in the Bayshore Neighborhood Sunset Islands 1 & 2 Bid Package 8E project, in the Adopted Capital Budget for FY 2009/10, until such time as financing can be put in place. An additional appropriation of $45,000 from the Stormwater Projects Line of Credit is recommended fori the Belle Isle Outfall Replacement Project until such time as financing can be put in place. In the case, of the Belle Isle Outfall Replacement Project, the previously completed Venetian Neighborhood -Belle Isle ROW project did not identify Future Stormwater Bond Funds in the Adopted Capital Budget of FY 2009/10. Consequently, a Capital Budget request for the Belle Isle Outfall Replacement project was included in the Proposed Capital Budget for FY 2010!11. However, advanced funding for Phase I of the project hash been included as part of this Commission Item in response to a Commission request to expedite the necessary stormwater system improvements to alleviate spot flooding conditions that have been occurring due to recirculation conditions associated with the existing undersized Belle Isle East Outfall. With the recent approval of the Series 2010 Gulf Breeze Water and Sewer Loan, an appropriation of $705,000 from the Fund 420 Water and Sewer Gulf Breeze Loan is recommended to substitute for the "Future Bonds" identified in the Adopted Capital Budget for FY 2009/10. Stormwater Projects Line of Credit: $ 402,397 Fund 420 -Gulf Breeze W&S Loan: 705,000 Total: $ 1,107, 397 The three projects requiring the stormwater-related funding were not as far along in design at the time that the FY 2009/10 Capital Budget was finalized in September, 2009. Similarly, for the project requiring the water-related funding, the new Gulf Breeze Loan funding was not in place and the City was not aware of the previously-mentioned FDOT project. It is proposed that when the City is able to issue Stormwater Bonds that the Line of Credit funds used will be reimbursed. To allow reimbursement from futurelbonds, the Commission must declare the intent of the City to reimburse itself and; therefore, to preserve this option, appropriate language is provided in the related resolution. The City is continuing to pursue City Commission Memorandum Resolution Adopting the First Amendment to the City of Miami Beach FY 2009/10 Capital Budget July 14, 2010 Page 6 financing alternatives and will continue to evaluate project timing and needs on a case by case basis. CONCLUSION: The Administration recommends adoption of the attached Resolution, which amends the Capital Budget for FY 2009/10 and declares the intent of the City to issue debt of the City to reimburse itself for funds advanced for certain stormwater expenses. T:WGENDA~2010Uu1y 14~Regular~FY10 - 1st Capital Amendment MEMO.docx