2016-29273 Reso RESOLUTION NO. 2016-29273
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, DECLARING THE OFFICIAL
INTENT OF THE CITY OF MIAMI BEACH, FLORIDA TO ENTER INTO A
LOAN IN ORDER TO, AMONG OTHER THINGS, REIMBURSE ITSELF
FROM THE PROCEEDS OF SUCH LOAN FOR FUNDS ADVANCED BY
THE CITY FOR CERTAIN EXPENSES INCURRED WITH RESPECT TO
THE PLACEMENT UNDERGROUND OF UTILITY LINES ON SUNSET
ISLANDS 3 AND 4; AND AUTHORIZING CERTAIN INCIDENTAL
ACTIONS.
WHEREAS, United States Treasury Regulations §1.150-2 (the "Reimbursement
Regulations") prescribe conditions under which proceeds of bonds, notes or other obligations
("Bonds") used to reimburse advances made for capital and certain other expenditures ("Original
Expenditures") paid before the issuance of such Bonds will be deemed to be expended (or
properly allocated to expenditures) for purposes of Sections 103 and 141-150 of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder (collectively,
the "Code"), upon such reimbursement so that the proceeds so used will no longer be subject to
requirements or restrictions under those sections of the Code; and
WHEREAS, certain provisions of the Reimbursement Regulations require that there be a
declaration of official intent not later than 60 days following payment of the Original
Expenditures, and that the reimbursement occur within certain prescribed time periods after the
Original Expenditures are paid or after the property resulting from that Original Expenditure is
placed in service; and
WHEREAS, the City of Miami Beach, Florida (the "City") expects to enter into a loan,
which may be in the form of a line of credit or other obligations (the "2016 Loan"), for the
purpose of financing the cost of acquisition, construction and equipping of certain projects,
including the placement underground of utility lines for electrical, telephone and cable television
services on Sunset Islands 3 and 4 (the"Sunset Islands 3 and 4 Project"); and
WHEREAS, in connection with the Sunset Islands 3 and 4 Project, the City expects to
make Original Expenditures not to exceed $2,500,000 that will be reimbursed from proceeds of
the 2016 Loan;
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA:
SECTION 1. Definition. The following definition applies to the terms used herein:
"Reimbursement" or "Reimburse" means the restoration to the City of money
temporarily advanced from its own funds and spent for Original Expenditures before entering
into the 2016 Loan, evidenced in writing by an allocation on the books and records of the City
that shows the use of the proceeds of the 2016 Loan to restore the money advanced for the
Original Expenditures. "Reimbursement" or "Reimburse" generally does not include the
010-8175-0732/1/AMERICAS
refunding or retiring of Bonds previously issued and sold to, or borrowings from, unrelated
entities.
SECTION 2. Declaration of Official Intent. The City hereby declares its official intent
to enter into the 2016 Loan and, to the extent permissible under the Code, use a portion of the
proceeds of the 2016 Loan to Reimburse the City for not to exceed $2,500,000 in funds advanced
by it for Original Expenditures incurred and to be incurred with respect to the Sunset Islands 3
and 4 Project. This Resolution is intended as a declaration of official intent under the
Reimbursement Regulations.
SECTION 3. Incidental Action. The appropriate officers, employees and agents of the
City are hereby authorized to take such actions as may be necessary to carry out the purpose of
this Resolution and the Code.
SECTION 4. Effective Date. This Resolution shall take effect immediately upon its
adoption.
PASSED AND ADOPTED this 13 day of aifiAir 2016.
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010-8175-0732/1/AMERICAS
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Of The Mayor And City Commission Of The City Of Miami Beach, Florida, Declaring The
Official Intent Of The City Of Miami Beach, Florida To Enter Into A Loan In Order To, Among Other
Things, Reimburse Itself From The Proceeds Of Such Loan For Funds Advanced By The City For Certain
Expenses Incurred With Respect To The Placement Underground Of Utility Lines On Sunset Islands 3
And 4; And Authorizing Certain Incidental Actions.
Key Intended Outcome Supported:
Ensure expenditure trends are sustainable over the long term, and build and maintain priority
infrastructure with full accountability.
Supporting Data (Surveys, Environmental Scan, etc.): The 2014 Customer Satisfaction Survey
indicated that over 77% of residents rated recently capital improvements projects as"excellent"or"good".
Item Summary/Recommendation:
On October 14, 2015, the Mayor and City Commission adopted Resolution No. 2015-29180, creating
pursuant to Chapter 170, Florida Statutes, a special assessment district to be known as the Sunset
Islands 3 & 4 Utility Improvement District (the "District"), for a term of ten (10) years, to fund the
placement underground of overhead utilities on Sunset Islands 3 & 4, at an estimated cost of
$2,412,397.70 (including financing and processing costs).
On December 9, 2015, the Mayor and City Commission adopted Resolution No. 2015-29223, which
approved, following a duly noticed public hearing pursuant to Sections 170.07 and 170.08, Florida
Statutes, the final assessment roll for the District, and confirmed such assessments as legal, valid, and
binding first liens upon the property against which assessments are made until paid.
Florida law requires all governments to have funds available in the amount of the contract at the time of
awarding the contract. The most effective way to meet the City's financing needs, without incurring
significant additional cost, is to pay original costs from the City's General Fund to be reimbursed by the
future line of credit. The amount to be advanced from the General Fund will be the amount exclusive of
the financing and processing costs, which amounts to $1,532,002. However, the full amount of the
project, including the financing and processing costs, will be funded by the special assessment imposed
on the District.
By approving this Resolution by the Mayor and City Commission, the City hereby declares its official
intent to enter into a loan and, to the extent permissible under the Code, use a portion of the proceeds of
the loan to reimburse the City for not to exceed $2.5 million in funds advanced by it for Original
Expenditures incurred and to be incurred with respect to the Sunset Islands 3 & 4 Project. This
Resolution is intended as a declaration of official intent under the Reimbursement Regulations.
The Administration recommends approval of the resolution.
Advisory Board Recommendation:
Finance and Citywide Projects Committee October 5, 2015
Financial Information:
Amount Account Approved
Source of Funds:
OBP $1,532,002 011-7000-128901
ToaL
City Clerk's Office Legislative Tracking:
John Woodruff, Interim Chief Financial Officer
Sign-Offs:
DepartiwIt Director istant City Manager City Manager
AW IN J, J LM,
T:\AGENDA\2016\January\Sunset Islands 3&4 , mary Memo.docx
wr AGENDA ITEM R-►ie MIAMI B EAC H DATE
0.- MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSIO , MEMORANDUM
TO: Mayor Philip Levine and Members of ; e City Corn ission
FROM: Jimmy L. Morales City Manager
DATE: January 13, 2016
SUBJECT: A RESOLUTION OF THE MAYOR £-ND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, DECLARING THE OFFICIAL
INTENT OF THE CITY OF MIAMI BEACH, FLORIDA TO ENTER INTO
A LOAN IN ORDER TO, AMONG OTHER THINGS, REIMBURSE
ITSELF FROM THE PROCEEDS OF SUCH LOAN FOR FUNDS
ADVANCED BY THE CITY FOR CERTAIN EXPENSES INCURRED
WITH RESPECT TO THE PLACEMENT UNDERGROUND OF
UTILITY LINES ON SUNSET ISLANDS 3 AND 4; AND AUTHORIZING
CERTAIN INCIDENTAL ACTIONS.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution
KEY INTENDED OUTCOMES SUPPORTED
Ensure expenditure trends are sustainable over the long term, and build and maintain
priority infrastructure with full accountability.
BACKGROUND
On October 5, 2015, the Finance and Citywide Projects Committee held a discussion
regarding the establishment of a special assessment district on Sunset Islands 3 & 4 to
fund the relocation underground of overhead utilities. The Finance Committee approved
staff's recommendation to refer this item to the City Commission, to adopt the first
resolution to create the special assessment district.
On October 14, 2015, the Mayor and City Commission adopted Resolution No. 2015-
29180, creating pursuant to Chapter 170, Florida Statutes, a special assessment district
to be known as the Sunset Islands 3 & 4 Utility Improvement District (the "District"), for a
term of ten (10) years, to fund the placement underground of overhead utilities on
Sunset Islands 3 & 4, at an estimated cost of $2,412,397.70 (including the financing an
processing costs).
On December 9, 2015, the Mayor and City Commission adopted Resolution No. 2015-
29223, which approved, following a duly noticed public hearing pursuant to Sections
170.07 and 170.08, Florida Statutes, the final assessment roll for the District, and
confirmed such assessments as legal, valid, and binding first liens upon the property
against which assessments are made until paid.
Commission Memo
Sunset Islands 3&4 Underground of Utilities
January 13,2016
Page 2 of 3
On December 9, 2015, the Mayor and City Commission adopted Resolution No. 2015-
29224, authorized an easement agreement with Florida Power & Light (FPL), as well as
agreements with FPL in the amount of $939,915, an agreement with AT&T in the
amount of $169,056, and an agreement with Atlantic Broadband (ABB) in the amount of
$82,626, for the placement underground of overhead utilities on Sunset Islands 3 & 4.
This resolution also authorized the City to fund the agreements with the three utility
companies, the installation of the conduits, and all the financing costs, which shall be
funded with special assessments levied within the District.
By February 28, 2016, the City must execute the agreements and pay the respective
utility company for all work, in order to complete the placement underground of electrical,
telephone, and cable television services on Sunset Islands 3 & 4. The cost of
performing the improvements, including the agreements with the utility companies, the
installation of conduits, and all financing costs, shall be funded with special
assessments.
ANALYSIS
Certain provisions of the US Treasury Regulations Section 1.150-2 (the "Reimbursement
Regulations") require that there be a declaration of official intent not later than 60 days
following payment of the Original Expenditures, and that the reimbursement occur within
certain prescribed time periods after the Original Expenditures are paid or after the
property resulting from the Original Expenditures is placed in service. Original
Expenditures are advances made for capital and certain other expenditures paid before
the issuance of the loan (i.e. bonds, notes, or other obligations).
The Reimbursement Regulations prescribe conditions under which proceeds of bonds,
notes or other obligations used to reimburse advances made for capital and certain other
expenditures paid before the issuance of such indebtedness will be deemed to be
expended for purposes of Internal Revenue Code ("Code") Sections 103 and 141-150,
upon such reimbursement so that the proceeds so used will no longer be subject to
requirements or restrictions under those sections of the Code.
The City expects to enter into a loan, which may be in the form of a line of credit or other
obligation, for the purpose of financing the cost of acquisition, construction and
equipping of certain projects, including the placement underground of utility lines for
electrical, telephone and cable television services on Sunset Islands 3 & 4 (the "Sunset
Islands 3 & 4 Project").
In connection with the Sunset Islands 3 & 4 Project, the City expects to make Original
Expenditures not to exceed $2.5 million that will be reimbursed from proceeds of the
loan.
By approving this Resolution by the Mayor and City Commission, the City hereby
declares its official intent to enter into a loan and, to the extent permissible under the
Code, use a portion of the proceeds of the loan to reimburse the City for not to exceed
$2.5 million in funds advanced by it for Original Expenditures incurred and to be incurred
with respect to the Sunset Islands 3 & 4 Project. This Resolution is intended as a
declaration of official intent under the Reimbursement Regulations.
Commission Memo
Sunset Islands 3&4 Underground of Utilities
January 13,2016
Page 3of3
Florida law requires all governments to have funds available in the amount of the
contract at the time of awarding the contract. The most effective way to meet the City's
financing needs, without incurring significant additional cost, is to pay original costs from
the City's General Fund to be reimbursed by the future line of credit. The amount to be
advanced from the General Fund will be the amount exclusive of the financing and
processing costs, which amounts to $1,532,002. However, the full amount of the
project, including the financing and processing costs, will be funded by the special
assessment imposed on the District.
In accordance with Section 218.385, Florida Statutes, as amended, undertaking this
financing program on a negotiated basis through the line of credit is in the best interest
of the City (rather than a sale through competitive bidding) and will serve a proper public
purpose because it offers (1) borrowing at lower rates than those which the City could
command in the market, and (2) flexibility of financing which could not be obtained in a
sale through competitive bidding.
The total proposed special assessment had been reduced by the amount of the design
deposits paid by the HOA, as set forth in the table below. The costs are broken down as
follows:
Utility Company Construction Design Deposit Remaining
Cost paid by HOA
FPL $939,915.00 ($9,020.00) $930,895.00
ATT $177,056.00 ($8,000.00) $169,056.00
ABB $82,626.00 $82,626.00
$1,199,597.00 ($17,020.00) $1,182,577.00
City's Cost to Install Conduits
(including material testing) $349,425.00
Subtotal: Amount to be advanced
from the General Fund $1,532,002.00
Financing&Processing Costs $880,395.70
Total Cost of the Project to be
funded by Special Assessments $2,412,397.70
This Resolution authorizes the appropriate officers, employees and agents of the City to
take such actions as may be necessary to carry out the purpose of this Resolution and
the Code.
CONCLUSION
The Administration recommends that the Mayor and City Commission of the City of
Miami Beach, Florida, adopt the attached resolution, declaring the official intent of the
City of Miami, Florida to enter into a loan in order to, among other things, reimburse itself
from the proceeds of such loan for funds advanced by the City for certain expenses
incurred with respect to the placement underground of utility lines on Sunset Islands 3 &
4, and authorizing certain incidental actions.
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