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Resolution 2024-33024RESOLUTION NO.! 2024-33024 A RESOLUTION OF THE MAYOR AND CITY COMMISSION ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS APRIL 19, 2024 MEETING TO AUTHORIZE THE ADMINISTRATION TO EXECUTE A DECLARATION OF OFFICIAL INTENT TO ISSUE NEW WATER AND SEWER BONDS IN THE AMOUNT OF $85.0 MILLION, INCLUDING ISSUANCE COSTS. WHEREAS, in November 2007, the Mayor and City Commission approved Ordinance No. 2007-3582 which amended the procedures that the City followed in connection with the approval of a bond issue and added Section to Chapter 2 of the Miami Beach City Code, entitled "Administration"; Article V entitled "Finance"; Sec. 2-278, entitled "Procedures governing the issuance of bonds" (the text of Section 2-278 of the City Code is attached as Exhibit A to the Commission Memorandum accompanying this Resolution); and WHEREAS, on December 9, 2020, the City Commission enacted Ordinance No. 2020- 4384 to amend the rates and charges for services of the Water and Sewer Utility established in the Rate Ordinance (the "Amending Rate Ordinance") (the text of Ordinance No. 2020-4384 is attached as Exhibit B to the Commission Memorandum accompanying this Resolution); and WHEREAS, pursuant to the Amending Rate Ordinance, the monthly water and sewer user rates for services of the Water and Sewer Utility will be increased by the following amounts at the beginning of the following Fiscal Years: City of Miami Beach, Florida Water and Sewer Utility Adopted Rate Increase Effective Fiscal Year Water System Sewer . Combined Date Ending Rate System Rate Rate (October 1) September 30 Adjustment') Adjustment(') Adjustment (2) 2021 2022 2.8%(1) 3.8% (4) 3.4% 2022 2023 5.5% + PTA 2.4% + PTA '3.6% + PTA 2023 2024 5.5%+PTA 2:4%+ PTA 3.6% + PTA 2024 2025 5.5% + PTA 2.4%+ PTA 3.6%+PTA 2025 (5) 2026 (5) PTA + Rate PTA + Rate PTA + Rate Indexing Indexing Indexing (1) PTA= Pass Through Adjustment. See "Automatic Adjustments to Monthly User Rates - Pass - Through of Wholesale Rate Adjustments" below. (2) The combined adjustment is estimated, based on the average increase expected for the Water and Sewer Utility from across-the-board implementation of the water and sewer rate adjustments. (3) The rate adjustment for the Water System for Fiscal Year 2022 reflects a 1.0% adopted rate adjustment plus an estimated 1.8% pass-through adjustment. (4) The rate adjustment for the Sewer System for Fiscal Year 2022 reflects a 1.0% adopted rate adjustment plus an estimated 2.8% pass-through adjustment. (5) Pursuant to the terms of the Amending Rate Resolution, beginning in Fiscal Year 2026, annual increases in monthly water and sewer user rates will be governed by the automatic rate indexing provisions contained in the Original Rate Ordinance..See "Automatic Adjustments to Monthly User Rates -Automatic Rate Indexing" below; and WHEREAS, on September 30, 2023, the City had approximately $136.3 million in outstanding Water and Sewer Enterprise fund debt that was issued in 2017 and 2021; and WHEREAS, the outstanding debt for each Series in the Water and Sewer system are as follows: Series 2017 New Issue and Refunding Revenue Bonds of $107.2 million and Series 2021A Refunding Bonds of $29.1 million; and WHEREAS, the city currently has $54.5 million in the 2017 Water & Sewer Bond Fund which are appropriated to current projects; and WHEREAS, the City's FY 2024 Capital Improvement Program assumed $21.5 million in proceeds from a to -be -issued future revenue bond to complete needed appropriations for unfunded FY 2024 water and sewer projects; and WHEREAS, on April. 19, 2024, staff presented to the Finance & Economic Resiliency Committee (the "FERC") the need for new money to support the rest of FY 2024 and the FY 2025 capital improvement program for the Water & Sewer fund; and WHEREAS, the FERC approved a recommendation to the full Commission to authorize the Administration to execute a Declaration of Official Intent in the amount of $85.0 million in new money proceeds, including issuance costs; and WHEREAS, the item was retained in FERC for staff to return at a later date to proceed with the issuance of tax-exempt revenue bonds via a bond resolution; and. WHEREAS, in accordance with the provisions of Section 2-278 Procedures governing the issuance of Bonds, the Administration prepared the required fiscal analysis Executive Summary, a copy of which is attached as Exhibit C to the Commission Memorandum accompany this Resolution; and WHEREAS, the Executive Summary includes the following breakdown of the proposed Water and Sewer Bond issue. • Sec. 2-278 (a) 1 (a) - Estimated cost of the projects: The water and sewer program will fund priority repair or replacement projects as well as the water and sewer portion of existing and future neighborhood projects, as identified by the Public Works Department. The upgrades include portions of Critical Needs projects to upgrade or replace the aging water and sewer infrastructure. The Critical Needs.Program was approved by Commission on March 18., 2020 via Resolution No. 2020-31211 (see Exhibit D, attached to the Commission Memorandum accompanying this Resolution). In addition, it includes agreements with the Florida Department of Transportation (FDOT) to replace water mains under state roads, while they are already undergoing construction. See Exhibit E attached to the Commission Memorandum accompanying this Resolution for a complete list of projects with associated costs. The estimated portion of the projects for which the bonds are to be issued is $84.0 million. The City to date has not committed any proceeds for future projects that are to be funded from future bond proceeds. • Sec. 2-278 (a) 1 (b) - Estimated revenues to be generated by the projects: These projects will either replace or enhance portions of the existing water and sewer VA system; the operation of such system is funded by water and sewer rates and charges. No additional fees are anticipated to be earned as a result of these projects. The City has adopted water and sewer rate increases as specified above. • Sec. 2-278 (a) 1 (c) - Estimated annual cost of maintaining, repairing, and operating the projects: The City's utility rates for water and sewer services are structured to collect the necessary revenues to meet annual operating and maintenance costs of the infrastructure, to cover debt service for water and sewer bonds, to maintain adequate operating fund reserves, and, to pay Miami -Dade County for wholesale water purchased, the treatment of the City's sewage and other fees; and WHEREAS, the Administration is not recommending the immediate issuance of new money revenue bonds, but instead, requesting that the Commission authorize the Administration to execute a Declaration of Official. Intent defined as: "Declaration of Official Intent" means a declaration of intent, in the form, manner and time contemplated in the Reimbursement Regulations, that the advances for expenditures referred to therein are reasonably expected to be reimbursed from the proceeds of Bonds to be issued after those expenditures are paid.'; and WHEREAS, issuing a prior Declaration of Official Intent is a legal mechanism that allows an issuer to use its own funds initially for project expenses and later reimburse itself with the proceeds from the sale of tax-exempt revenue bonds, and is, therefore, a cost-effective strategy because the issuance of new money bonds can be deferred; and WHEREAS, in this case, the water and sewer fund's reserves would be utilized to provide the interim funding of the projects; and WHEREAS, the Declaration of Official Intent will not be effective unless the bonds providing moneys for the reimbursement are issued and the reimbursement for the projects described in the attached is made ,within the, applicable period prescribed in the Treasury Regulations - generally, 18 months after the later of the date of the expenditure or the date the Project is placed in service,, but in no event later than three years after the date of the expenditure (attached as Exhibit F to the Commission Memorandum accompanying this Resolution is a copy of Resolution 2016-29612 which authorizes Declarations of Official Intent; and WHEREAS, some advantages to this approach include: • Timina and Flexibility: Delaying the issuance of revenue bonds provides the City with flexibility in terms of timing. It allows the City to initiate and fund a project using the water and sewer fund's reserves while waiting for the most opportune moment to issue long- term bonds. This can be advantageous in instances where market conditions are not favorable or when the project timeline is uncertain. Reduced Interest Costs: By using internal funds initially, the City can avoid incurring interest costs associated with long-term debt during the early stages of projects. • Market Conditions: Delaying the issuance allows the City to monitor and take advantage of favorable market conditions. If interest rates are expected to decrease or if there is 3 increased demand for bonds, the City may be able to secure more favorable terms, ultimately lowering the overall cost of financing. • Project Initiation Assessment: The delay provides the City with additional time to assess when certain project milestones are reached. This may involve confirming that the project is progressing as planned. A more solid project foundation can enhance investor confidence and contribute to lower borrowing costs; and WHEREAS, for the foregoing reasons, the Administration recommends that the City Commission authorize the Administration to execute a Declaration of Official Intent in the amount of $85.0 million in new water and sewer money proceeds, including issuance costs. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission accept the recommendation of the Finance and Economic Resiliency Committee at its April 19, 2024 meeting to authorize the Administration to execute a Declaration of Official Intent to issue new Water and Sewer bonds in the amount of $85.0 million, including issuance costs. PASSED AND ADOPTED this /s day of, 2024. ATTEST: MAY 2 1 2024 Rafael E. Granado, City Clerk n Steven Meiner, Mayor APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION City Attomey 'Sdi3%Z_oZe— Date 5/9/24, 9:56 AM Item Coversheet 1n MIAMIBEACH TO: Honorable Mayor and Members of the City Commission FROM: Rickelle Williams, Interim City Manager DATE: May 15, 2024 COMMISSION MEMORANDUM SUBJECT: A' RESOLUTION OF THE MAYOR AND CITY COMMISSION ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS APRIL 19, 2024 MEETING TO APPROVE THE ADMINISTRATION TO EXECUTE A DECLARATION OF OFFICIAL INTENT IN THE AMOUNT OF $85.0 MILLION IN NEW WATER AND SEWER MONEY PROCEEDS, INCLUDING ISSUANCE COSTS. SUPPORTING SURVEY DATA NA FINANCIAL INFORMATION NA Is this a "Residents Right to Know" item, -pursuant to City Code Section 2-14? Yes I -egislative Tracking Finance ATTACHMENTS: Does this item utilize G.Q. Bond Funds?_ Yes Description D Commission Memo D Exhibit A- Debt issuance ordinance D Exhibit B - Rate Ordinance 2020-4384 D Exhibit C- Water & Sewer Bonds Financial Feasibility Executive Summary D Exhibit D- Reso 2020-31211- Critical Needs WS Rate Study_ D Exhibit E- List of Projects Costs D Exhibit F- Intent to Reimburse from bond proceeds 2016-29612 Reso D Exhibit G 5M Water & Sewer DECLARATION OF OFFICIAL INTENT D Resolution 577 https://miamibeach.novusagenda.com/AgendaWeb/CoverSheet.aspx?ltemlD=35187 111 MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachtl.gov COMMISSION MEMORANDUM TO: Honorable Mayor Steven Meiner and Members of the City Commission FROM: Rickelle Williams, Interim City Manager DATE: May 15, 2024 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS APRIL 19, 2024 MEETING TO AUTHORIZE THE ADMINISTRATION TO EXECUTE A DECLARATION OF OFFICIAL INTENT TO ISSUE NEW WATER AND SEWER BONDS IN THE AMOUNT OF $85.0 MILLION, INCLUDING ISSUANCE COSTS. BACKGROUND In November 2007, the Mayor and City Commission approved Ordinance No. 2007-3582 which amended the procedures that the City followed in connection with the approval of a bond issue and added the following Section to Chapter 2 of the Miami Beach City Code, entitled "Administration"; Article V entitled "Finance"; Sec. 2-278, entitled "Procedures governing the issuance of bonds". See attached Exhibit A. On December 9, 2020, the City Commission enacted Ordinance No. 2020-4384 to amend the rates and charges for services of the Water and Sewer Utility established in the Rate Ordinance. (the "Amending Rate Ordinance"). See attached as Exhibit B. Pursuant to the Amending Rate Ordinance, the monthly water and sewer user rates for services of the Water and Sewer Utility will be increased by the following amounts at the beginning of the following Fiscal Years: City of Miami Beach, Florida Water and Sewer Utility Adopted Rate Increase Effective Fiscal Year Water System Sewer Combined Date Ending Rate System Rate Rate (October 1) September 30 Adjustment') Adjustment(') Adjustment Uzi 2021 2022 2.8%(1) 3.8% (4) 3.4% 2022 2023 5.5% + PTA 2.4% + PTA 3.6% + PTA 2023 2024 5.5%+PTA 2.4%+ PTA 3.6% + PTA 2024 2025 5.5% + PTA 2.4%+ PTA 3.6%+PTA 2025(l) 2026 (5) PTA + Rate PTA + Rate PTA + Rate Indexing Indexing .Indexing 578 Water and Sewer Revenue Bonds Intent to Issue May 15, 2024 Page 2 (1) PTA= Pass Through Adjustment. See "Automatic Adjustments to Monthly User Rates - Pass -Through of Wholesale Rate Adjustments" below. . (2) The combined adjustment is estimated, based on the average increase expected for the Water and Sewer Utility from across-the-board implementation of the water and sewer rate adjustments. (3) The rate adjustment for the Water System for Fiscal Year 2022 reflects a 1.0% adopted rate adjustment plus an estimated 1.8% pass-through adjustment. (4) The rate adjustment for the Sewer System for Fiscal Year 2022 reflects a 1.0% adopted rate adjustment plus an estimated 2.8% pass-through adjustment. (5) Pursuant to the terms of the Amending Rate Resolution, beginning in Fiscal Year 2026, annual increases in monthly water and sewer user rates will be governed by the automatic rate indexing provisions contained in the Original Rate Ordinance. See "Automatic Adjustments to Monthly User Rates -Automatic Rate Indexing" below. On September 30, 2023, the City had approximately $136.3 million in outstanding Water and Sewer Enterprise fund debt that was issued in 2017 and 2021. The outstanding debt for each Series in the Water and Sewer system are as follows: Series 2017 New Issue and Refunding Revenue Bonds of $107.2 million and Series 2021A Refunding Bonds of $29.1 million. The city currently has $54.5 million in the 2017 Water & Sewer Bond Fund which are appropriated to current projects. The City's FY 2024 Capital Improvement Program assumed $21.5 million in proceeds from a to -be -issued future revenue bond to complete needed appropriations for unfunded FY 2024 water and sewer projects. On April 19, 2024, staff presented to the Finance & Economic Resiliency Committee (FERC) the need for new money to support the rest of FY 2024 and the FY 2025 capital improvement program for the Water & Sewer fund. FERC approved a recommendation to the full Commission to authorize the Administration to execute a Declaration of Official Intent in the amount of $85.0 million in new money proceeds, including issuance costs. The item was retained in FERC for staff to return at a later date to proceed with the issuance of tax-exempt revenue bonds via a bond resolution. ANALYSIS In accordance with the provisions of Section 2-278 Procedures governing the issuance of Bonds, the Administration prepared the required fiscal analysis Executive Summary (see attached Exhibit C) which include the following breakdown of the proposed Water and Sewer Bond issue. Sec. 2-278 (a) 1 (a) - Estimated cost of the projects: The water and sewer program will fund priority repair or replacement projects as well as the water and sewer portion of existing and future neighborhood projects, as identified by the Public Works Department. The upgrades include portions of Critical Needs projects to upgrade or replace the aging water and sewer infrastructure. The Critical Needs Program was approved by Commission on March 18., 2020 via Resolution No. 2020-31211 (see attached Exhibit D). In addition, it includes agreements with the Florida Department of Transportation ,(FDOT) to replace water mains under state roads, while they are already undergoing construction. See attached Exhibit E for a complete list of projects with 579 Water and Sewer Revenue Bonds Intent to Issue May 15, 2024 Page 3 associated costs. The estimated portion of the projects for which the bonds are to be issued is $84.0 million. The City to date has not committed any proceeds for future projects that are to be funded from future bond proceeds. Sec. 2-278 (a)1 (b) - Estimated revenues to be generated by the projects: These projects will either replace or enhance, portions of the existing water and sewer system; the operation of such system is funded by water and sewer rates and charges. No additional fees are anticipated to be earned as a result of these projects. The City has adopted water and sewer rate increases as specified above. Sec. 2-278 (a) 1 (c) - Estimated annual cost of maintaining, repairing, and operating the projects: The City's utility rates for water and sewer services are structured to, collect the necessary revenues to meet annual operating and maintenance costs of the infrastructure, to cover debt service for water and sewer bonds, to maintain adequate operating fund reserves, and, to pay Miami -Dade County for wholesale water purchased, the treatment of the City's sewage and other fees. Declaration of Official Intent Currently, the Administration is not recommending the immediate issuance of new money revenue bonds but to instead request. the Commission to authorize for the Administration to execute a Declaration of Official Intent defined as: "Declaration of Official Intent-" means a declaration of intent, in the form, manner and time contemplated in the Reimbursement Regulations, that the advances for expenditures referred to therein are reasonably expected to be reimbursed from the proceeds of Bonds to be issued after those expenditures are paid." Issuing revenue bonds with a prior Declaration of Official Intent can be a cost-effective strategy. A prior Declaration of Official Intent is a legal mechanism that allows an issuer to use its own funds initially for project expenses and later reimburse itself with the proceeds from the sale of tax-exempt revenue bonds. In this case, water and sewer fund's reserves would be utilized to provide the interim funding of the projects. The Declaration of Official Intent will not be effective unless the bonds providing moneys for the reimbursement are issued and the reimbursement for the projects described in the attached is made within the applicable period prescribed in the Treasury Regulations — generally, 18 months after the later of the date of the expenditure or the date the Project is placed in service, but in no event later than three years after the date of the expenditure. See attached Exhibit F for Resolution 2016-29612 which authorizes Declarations of Official Intent. Some advantages to this approach include: • Timing and Flexibility: Delaying the issuance of revenue bonds provides the City with flexibility in terms of timing. It allows the City to initiate and fund a project using the water and sewer fund's reserves while waiting for the most opportune moment to A-111 Water and Sewer Revenue Bonds Intent to Issue May 15, 2024 Page 4 issue long-term bonds. This can be advantageous in instances where market conditions are not favorable or when the project timeline is uncertain. • Reduced Interest Costs: By using internal funds initially, the City can avoid incurring interest costs associated with long-term debt during the early stages of projects. • Market Conditions: Delaying the issuance allows the City to monitor and take advantage of favorable market conditions. If interest rates are expected to decrease or if there is increased demand for bonds, the City may be able to secure more favorable terms, ultimately lowering the overall cost of financing. • Project Initiation Assessment: The delay provides the City with additional time to assess when certain project milestones are reached. This may involve confirming that the project is progressing as planned. A more solid project foundation can enhance investor confidence and contribute to lower borrowing costs. CONCLUSION The Administration recommends the City Commission approve an authorization for the Administration to execute a Declaration of Official Intent in the amount of $85.0 million in new water and sewer money proceeds, including issuance costs. Was agenda item initially requested' by a lobbyist which, as defined in Code Sec. 2- 481, includes a principal engaged in lobbying? No If so, specify name of lobbyist(s) and principal(s): N/A 581 ORDINANCE NO. 2007-3582 AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAIYII BEACH, FLORIDA, AMENDING CHAPTER 2 OF THE CODE OF THE CITY OF MIANH BEACH, FLORIDA, BY AMENDING ARTICLE V THEREIN, ENTITLED "FINANCE;" BY CREATING A NEW SECTION 2- 278, ENTITLED "PROCEDURES GOVERNING THE ISSUANCE OF BONDS,"; PROVIDING FOR REPEALER; SEVERABILITY; CODIFICATION; AND AN EFFECTIVE DATE. NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: SECTION 1. Chapter 2 of the City Code is hereby amended, creating a new Section 2- 278, entitled "Procedures governing the issuance of bonds," as follows: Section 2-278. Procedures Governing the Issuance of Bonds. I(,a) Prior to the adoption by the City Commission of the final resolution approving the issuance of any bonds by the City, the following requirements shall be complied with: 1. In order for the City Commission and the public to be fully informed on all matters relating to the proposed issuance of bonds, the City Manager shall prepare, or cause to be prepared, a fiscal analysis of the economic impact of the progosed bond issuance using the following criteria: (a) The estimated cost of the project or projects on account of which such bonds are to be issued: (b) The estimated annual revenues, if an , two be generated by such project or projects: and (c) The estimated annual cost of maintaining, repairing and operating such project or projects. 2. Upon completion of the fiscal analysis in subsection (a)1, the proposed issuance of bonds shall be first considered and reviewed by the City's Finance and Citywide Projects Committee. 3. The City Commission shall hold two (2) public hearings, each advertised not less - - -- -than. fifteen -(15) days prior to the hearing; -in-order-to-obtain- citizen-iWut into -the proposed bond issuance. (b) In the event the particular issuance of bonds is one that is subject to referendum 582 approval pursuant to Florida law then the conditions in subsections (1) and (2) of section (a) above shall be complied with prior to adoption by the City Commission of the resolution calling for the referendum_ pertaining to the issuance of the proposed bonds. (c) To meet a public emergency affecting life, health property or public safety, the City Commission mai by 5/7ths vote of the members of the City Commission waive the requirements of this section,• provided however, that such waiver shall not be deemed to be a waiver of any other legal requirements under local State, and federal law for the issuance of the proposed bonds. (d) The provisions of this section shall not apply to the issuance of any bonds to refund or refinance outstanding bonds or other obligations. SECTION 2. REPEALER That all Ordinances or parts of Ordinances in conflict herewith be and the same are hereby repealed. SECTION 3. CODIFICATION. It is the intention of the City Commission, and it is hereby ordained that the provisions of this Ordinance shall become and be made part of the Code of the City of Miami Beach as amended; that the sections of this Ordinance may be renumbered or relettered to accomplish such intention; and that the word "ordinance" may be changed to "section" or other appropriate word. SECTION 4. SEVERABILITY. If any section, subsection, clause or provision of this Ordinance is held invalid, the remainder shall not be affected by such invalidity. SECTION 5. EFFECTIVE DATE. This Ordinance shall take effect on the 1st PASSED and ADOPTED this 21st day of ATTEST: Mok Y VK ' David Dermer CITY CLERK Robert Parcher APPROVED ASTO FAatto\AGUR\RESOSARD\Bonds - Procedures governing the issuance - Ord (2nd Reading - Final 10-22-OPORM & LANGUAGE -IM ID MIAMI BEACH City of Miami Beath, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Mayor David Dermer and Members of the City Commission FROM: Jorge M. Gonzalez, City Manage SECOND READING DATE: November 21, 2007 PUBLIC HEARING SUBJECT: AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING CHAPTER 2 OF THE CODE OF THE CITY OF MIAMI BEACH, FLORIDA, BY AMENDING ARTICLE V THEREIN, ENTITLED "FINANCE;" BY CREATING A NEW SECTION 2-278, ENTITLED "PROCEDURES GOVERNING THE ISSUANCE OF BONDS,"; PROVIDING FOR REPEALER; SEVERABILITY; CODIFICATION; AND AN EFFECTIVE DATE. ADMINISTRATION RECOMMENDATION. Adopt the Ordinance. KEY INTENDED OUTCOMES SUPPORTED Improve the City's overall financial health and maintain overall bond rating. Ensure expenditure trends are sustainable over the long term. ANALYSIS The Ordinance, prepared at the request of Mayor Dermer, amends Chapter 2 of the City Code and creates a new Section 2-278 and establishes procedures to be followed by the Mayor and City Commission, prior to the adoption of a final resolution approving the issuance of City bonds. These requirements are necessary to ensure that there has been a thorough fiscal analysis and review completed, to fully inform both the Mayor and City Commission and the public of the financial and economic impact resulting from the issuance of the proposed bonds. Specifically, the fiscal analysis shall include the estimated cost of the project or projects that will be funded from the proposed bonds along with the estimated annual cost of maintaining, repairing and operating each project. Additionally, any revenues that may be generated from the project should be estimated and considered in the analysis. Following completion of the analysis, the proposed issuance of bonds must be presented to the City's Finance and Citywide Projects Committee for their review and the ordinance must be approved -by a -majority vote of the Committee. 584 The Ordinance further requires that the City Commission hold two public hearings each advertised not later than fifteen (15) days prior to the hearing, in order to obtain citizen input on the proposed bond issuance. In the case of General Obligation Bonds or other bonds that are subject to referendum approval pursuant to Florida law, the fiscal analysis and approval of the bond issuance by the City's Finance and Citywide Projects Committee must occur prior to the adoption of the resolution calling for the referendum (i.e. the ballot question). In the event of a public emergency, the provisions of the Ordinance may be waived by 5/7ths vote of the City Commission and it will not apply to refunding or refinancing of outstanding bonds or other obligations. FISCAL IMPACT The economic impact for this ordinance will vary based on the number of projects to be funded with the proposed bonds and the complexity of the determination of the revenues to be generated, if any, along with the operating and maintenance costs of such projects. CONCLUSION The Administration recommends that the Mayor and City Commission adopt the ordinance. JMG/PDW "r\AGENDA\2007\nov07O7\Regular\FINAL 2nd reading commission memo for pre bond ordinance.doc 585 rr 00 Cm MIAMIBEACH CITY OF MIAMI BEACH NOTICE of PUBLIC HENUNG NOTICE tS MMY given that a second reading and public hearing will behold by the Mayor and Clty Commisslar of the City of Miami Beach, Flo kUL in the Commission Chambers, 3rd floor, City Hall, 1700 Conveftn Center Drive, Miami Beach, Rodde, on wednasday, NDYwprflat 7, 2007, at 11:00 a.m., to Consider Adopt An Ordinance Amending Chapter 94 Of Cade Of The City Of Miami Beach, Florida, EntitledSpecial Assessments," By AmandIng Artige III Thereof. Entitled "Bonds"By Creating A New Section 9496, Entitled 'Procedures Governing The Issuance Of Bands". However, in the event a run-off election Is held, the second reading and public hearing on this Ofdlname shall not be held on November 7, 2007, but shall instead be held an Nlsdaesday, November 21, 2091 at 110 a.m. lnquk* may be direcxed to Finance Dwpartment at (305)1373.7466. • INTERE M PARTIES are invited to appear at this mewing, qbe represented by an agent, or to express their views in writing addressed to the City Commiseion./o the City Clerk. 1700 Convention Center Oft 1st Moor, City Han, Miami Beach, Florida 33139. Caples of fh(s ordinance are available for ppublic ilspection during normal busirreas hours in the City Clerk's Once, 1700 Convent M Center Olive.1st Floor, City Nan, Miami Beach, Florida 33139. This meeting may be continued and under such circumstances addtdonat lege! notice would not be provk1ed. Robert E F'alntter, Clly.Cterk Clly of Miami Beach Pursumd to Secicn 285.0105, Fla. Stat:, the CRY haft advises the PUM that: if a parson decides to appealor Jany decision made by the Cityy Commission with respect to an matter considered at ns meeting ch person mast ensure that a verbatim MW of the proceedings is made, which record indudefing's fhe testimony and evidence upon whicft flit appeal Is to be based. This notice does not confide consent by the City for the intraductlon or admission of otherwise Inadmissible or Irrelevant evidelmt nor does it authoflte challenges or appeals not otherwise alWAvd by law. To n3*W this mQWtal In aacesalbte format, sign language Interpreters, tnformation on. access for Persorw With disabilities, aiWor any accommodation to review any or WW"M sponsored oeto �qg' please contact (305) ,304.24P (vohal. (305)673-721q" five days n your request. M users may also can 711;Florida Relay Service). Ad #4W MU `b,x►h1� 3t 1 a„n!•a,4hr tit `94"t I*PA& 0 '.!,41 (,Cr; !BFR 18.20x7 I :ft -•• COMMISSION ITEM SUMMARY :ondensed Title: An Ordinance Amending Chapter 2 Of The Code Of The City Of Miami Beach, Florida, Entitled "Finance" By Amending Article V Thereof, Entitled "Bonds;" By Creating A New Section 2-278, Entitled "Procedures. Governing The Issuance Of Bonds"; Providing For Repealer, Severablity; Codification; And An Effective Key Intended Outcome Supported: To make the city more business friendly. Improve the City's overall financial health and maintain overall bond rating Ensure expenditure trends are sustainable over the long term. Supporting Data (Surveys, Environmental Scan, etc.): Bond ratings have improved for SBP from Al in FY 2000/01 to AA- in FY 2006/07and Moody's from A in FY 2000/01 to AA3 in FY2006/07. Issue: Shall the City Commission approve new procedures governing the issuance of bonds? Item READING PUBLIC HEARING The Ordinance, prepared at the request of Mayor Dermer, establishes procedures to be followed by the Mayor and City Commission, prior to the adoption of a final resolution approving the issuance of City bonds. These requirements are necessary to ensure that there has been a thorough fiscal analysis and review completed, to fully inform both the Mayor and City Commission and the public of the financial and economic impact resulting from the issuance of the proposed bonds. The Administration recommends adopting the ordinance. Board Recommendation: Financial Information: Source of Amount Account Approved Funds: l 2 3 4 OBPI Total Financial Impact Summary: City Clerk's Office Legislative Tracking: Patricia Walker, Chief Financial Officer o:...•_ewma. Department Director Ass nt City Manager City Manager PDW JMG T:WGENDA%2007VviO7071Reguiar%2nd reading pre bond ordinalhCe Suaimary.doC IM MIAMIBEACH 587 U AGENDA ITEM RSA DATE fl-2J—o,7 ORDINANCE NO. 2020-4384 AN ORDINANCE OF THE MAYOR AND CITY COMMISSION, OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING CHAPTER 110 OF THE CODE OF THE CITY OF MIAMI BEACH ENTITLED "UTILITIES," ARTICLE IV, ENTITLED "FEES, CHARGES, RATES AND BILLING PROCEDURE," BY AMENDING SECTION 110-166 THEREOF, ENTITLED "SCHEDULE OF MONTHLY WATER USER RATES AND TAPPING CHARGES;" BY AMENDING SECTION 110-168 THEREOF, ENTITLED "SCHEDULE OF MONTHLY SANITARY SEWER USER RATES" ARE TO BE AMENDED; AND BY AMENDING SECTION 110- 171 THEREOF, ENTITLED "RATE INDEXING," IN ORDER TO ADJUST AND MODIFY HOW WATER AND SANITARY SEWER RATES ARE CALCULATED AND APPLIED; AND FURTHER, AMENDING APPENDIX A OF THE "CITY CODE, ENTITLED "FEE SCHEDULE," TO INCREASE THE WATER RATES AND SANITARY SEWER SERVICE CHARGES IMPOSED BY THE CITY PURSUANT TO SECTIONS 110-166,110-168, 110-171, AND APPENDIX A; PROVIDING FOR CODIFICATION; REPEALER; SEVERABILITY; AND AN EFFECTIVE DATE. WHEREAS, Chapter 110, of the Code of the City of Miami Beach, entitled "Utilities" and Appendix A to Chapter 110 establish the City's potable water rates for all water users and the sanitary sewer rates for all sanitary sewer users except sewer rates for wholesale customers established through contract; and WHEREAS, the City's utility rates for water and sanitary sewer services are structured to collect the necessary revenues to meet annual operating and maintenance costs of the water and sanitary sewer infrastructure, to cover debt service for water and sewer bonds, to fund capital improvements to the City's utility system infrastructure, maintain adequate operating fund and capital reserves, and to pay Miami -Dade County Water and Sewer Department (WASD) for wholesale water purchased and for the treatment of the collected City sewage; and WHEREAS, the City and its consulting engineers recently completed master plans for the water and sewer systems that identified critical capital projects to be completed over the next several years; and WHEREAS, WASD has historically raised the rates for wholesale water and sanitary sewer to recover its cost of providing service and it is anticipated by WASD that it will continue to raise the rates for service due operating expenditures and debt service increases and the need to fund future capital improvements; and 14.11.3 WHEREAS, through a formal procurement process, the City retained the fine of GovRates, Inc. (GovRates) to assist in the determination of revised water and sanitary sewer rates in order to meet the projected expenditure and funding needs of the City's utility system over the next ten years; and. WHEREAS, GovRates has recommended revised rates to recover the cost of service and promote the overall sustainability of the utility system; provide the ability to adjust rates due to changes in the cost of wholesale water and wastewater service as provided by WASD; and provide the ability to index the rates for inflation and other expenses to provide utility operating margins to fund capital improvements and the repayment of debt issued by the City in support of the funding of capital improvements; and WHEREAS, the financial and rate plan proposed by GovRates recognizes the refunding the City's outstanding Series 2010 Bonds and the issuance of additional bonds in a few years; and WHEREAS, the City adopted Resolution No. 95-21585, as amended and supplemented from time to time, which authorized the issuance of utility revenue bonds to finance capital improvements to the utility system (hereinafter the "System") which included a requirement that the revenues of the System shall at all times meet the rate covenant requirements as delineated in such resolution for the protection of the bondholders; and WHEREAS, when the City issues new debt to finance critical capital needs, bond rating agencies expect that, all rates needed to pay the debt have already been adopted; and WHEREAS, in order to properly fund the City's water and sewer program, the City seeks to amend Chapter 110 and Appendix A to codify the GovRates recommendations; and WHEREAS, the GovRates recommendations recognize the need to increase combined water and sewer user rate revenues by 2.4%, 2.36/6, 2.3%, 2.3%, and 2.3% for the fiscal years 2021, 2022,, 2023, 2024, and 2025 respectively, as well as to pass- through future WASD wholesale water and sewer rate increases beyond Fiscal Year 2021; and WHEREAS, as part of the rate design to recover the necessary revenue for each fiscal year, GovRates recommends improving the utility's revenue stability by gradually increasing the monthly water and sewer base charges over time to bang them in line with industry standards; and WHEREAS, at the October 23, 2020 meeting, the Finance and Economic Resiliency Committee recommended approval of the GovRates recommendations; and WHEREAS, at the November 18, 2020 meeting, the City Commission members had the title of the Ordinance read for the record, and adopted the Ordinance on First Reading with the following direction: • Administration to come back with actual dollars • Ensure they use all available funds deemed appropriate and determine the proper rate increase • John Woodruff to prepare a chart on stormwater by Second Reading. • Commissioner Richardson to work with Administration WHEREAS, at the December 9, 2020 meeting, Public Works presented three options for the City Commission's consideration (including detailed charts and tables), each of which is more fully set forth in the Commission Memorandum accompanying this Ordinance. 'Specifically, Option 1 eliminated any increase for 2021; Option 2 eliminated any increase for 2021 and limits the increase for 2022 to 1 %; and Option 3 eliminated any increase for years 2021 & 2022. Each option provided the total revenue increase needed over the remaining 5 -year term of the plan; and WHEREAS, the City Commission determined it would be in the best interests of the City to phase in the required rate increase over time, and in a manner that would avoid economic impacts to rate payers in 2021, in view of the significant financial hardship associated with the COVID-19 pandemic; and WHEREAS, the City Commission, following substantial discussion, approved the one-time increase of water and sewer user rate revenues, set forth as Option 2 in the Commission Memorandum accompanying this Ordinance, with the total increase (inclusive of CPI increases otherwise permitted under the existing ordinance), to be phased in from 2021 through 2025, as follows: 0% in 2021; 1% in 2022; 3.6% in 2023; 3.6% in 2024; and 3.7% in 2025; and WHEREAS, the amendments set forth below are necessary to accomplish the above objectives. NOW THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: SECTION 1. That Chapter 110 of the Miami Beach City Code entitled "Utilities," Article IV,- entitled "Fees, Charges, Rates -and Billing procedure," -at Section 110-166, entitled "Schedule of monthly water user rates and tapping charges;" Section 110-168, entitled 59b "Schedule of monthly sanitary sewer user rates," -and Section 110-171, entitled "Rate indexing" are hereby amended as follows: CHAPTER 110 UTILITIES ARTICLE IV. Fees, Charges, Rates and Billing Procedure. Sec. 110-166. - Schedule of monthly water user rates and tapping charges. (a) There is hereby imposed, upon all premises within the city connected to or using the facilities of the city's potable water system, a monthly water user rate. Every premises connected to or using the facilities of the city's potable water system shall be billed monthly user rates consisting of: i) a base facility charge which serves as the monthly minimum service charge on each service installed, varying with and based upon the size of the meter installed in accordance with the rules of the public works department; ii) a water consumption charge; and iii) a purchased water pass-through adjustment rate to recover the cost of purchased wholesale water as billed by the Miami -Dade Water and Sewer Department (WASD). The monthly water user rates charged for service shall be in accordance with the consumer applicability provisions and the corresponding schedule set forth in Appendix A, as may be adjusted from time to time based on the provisions of the section. There shall not be a rental charge on meters. The monthly water user rates shall be charged to each individually metered water consumer each month in accordance with the following applicability provisions: (1) Individual Metered Residential Service - Applicable to all consumers that represent service to a residential dwelling unit that is individually metered for potable water service that is not classified as irrigation service. (2) Master Metered Multifamily Residential Service - Applicable to all consumers that represent service to a residential dwelling units that is master -metered (more than one residential dwelling unit being served by the water meter measuring service to the premise) which would include, but not be limited to, condominiums, apartments, and duplexes, that are not classified as irrigation service. (3) Nonresidential Service - Applicable to all water customers that are not classified as individually metered residential service, master -metered residential service, or irrigation service which primarily represents service to commercial customers public authorities, and institutional customers. (4) Residential Irrigation Service - Applicable to all residential dwelling units that are individually metered for domestic water use (reference subsection 110-166 (a)(i)) and which have a separate meter for irrigation service or other similar water use. 591 (5) Master Metered Multifamily Residential In7gation Service - Applicable to all master metered residential customers that are individually metered for domestic use (reference subsection 110-166 (a)(ii)) and which have a separate meter for irrigation service or other similar water use. (6) Nonresidential Irrigation Service - Applicable to all customers classed as nonresidential that are individually metered for domestic use (reference subsection 110-166 (a)(ii)) and which have a separate meter for irrigation service or other similar water use. (b) To the extent practical, all water delivered to a consumer shall be metered and shall be billed the water consumption charge and the purchased water pass-through charge, which rate shall be prorated for each 100 gallons in the event of increments of less than 1,000 gallons for all consumers of water. With respect to the billing for water use, the water consumption rates and the purchased water pass-through rate as defined in this section may be added together for rate application or billing purposes on a consumer's bill. (c) Pass -Through of Purchased Wholesale Water Charges. The Purchased Water Pass- through Rate, which is applied to all water consumers being billed for potable water service, shall be increased or decreased by the city by applying a pass-through adjustment factor for any change in the average annual rates charged to the city for Wholesale potable water purchased from WASD (the "Water Pass -Through Adjustment') to the Purchased Water Pass-through Rate charged by the city. (1) Adjustment schedule. The implementation of the adjustment to the Purchased Water Pass -Through Rate for any month that a change in wholesale potable water rates by WASD is effectuated ("Water Cost Recovery") shall occur without a public hearing. Water Cost Recovery shall be employed each time that WASD adjusts the average annual wholesale potable water rates that are billed to the city. Any adjustment to the Purchased Water Pass -Through Rate based on the determination of the change in wholesale rates shall be implemented in the month immediately following the determination of the Purchased Water Pass -Through Adjustment. The Purchased Water Pass -Through Rate as shown on Appendix A and as may be further adjusted automatically in the future by the implementation of the provisions of this section and in Appendix A and which are then in effect shall be increased or decreased by the city by applying a Purchased Water Pass- through Adjustment established in accordance with this subsection and in Appendix A to the then effective Purchased Water Pass -Through Rate prior to such application. Nothing herein shall preclude the city from making additional changes to the monthly water user rates for service. (2) Applicability of Purchased Water Rates. The Purchased- Water Pass -Through Rate shall be in addition to any water consumption rates for all retail and Wholesale customers that are billed for potable water service by the city. The following are the customers that shall be subject to the application of the Purchased Water Pass-through Rate and shall be subject to the pass-through for changes in the cost of purchased water from WASD (the "Applicable Customers"): (i) The retail water customer classes that are billed the water consumption charge referenced in this section. (ii) All separate utilities or local governments that may receive wholesale potable water service provided by the city currently or in the future which is not considered as. retail customers. (3) Calculation of Purchased Water Pass -Through Adjustment. The Purchased Water Pass -Through Adjustment shall be calculated useng the following fGFFnula using the formulas and methodology specified in Appendix A.: . , .am.- ZKYJ1 MIR . Ir • 1 , ■ MIrIMIr.=Mr. 1 � I - ... _ ■ _ _ no 12—TR- The Pass Through Rates that aFe to be plaGed an e#ert fGF the GuFFe AR - The Applinehle Rates in effent immediately r•ri8F to the enelieatien of the Pass -ThFeugh F=aGWF. PTC - The Pas Thre. reh Carter s detemlin d by the Gity to reGGVer the net (e) On all water supply service, each month shall be a complete period in itself, and no excess consumption of water during one month shall be charged or be added to the consumption of any other month. (1) Exception. The provisions contained in this subsection (e) shall not apply to an, owner or consumer of a single -family home that participates in the "budget billing" process of the utility billing system. The "budget billing" process allows owners or consumers to pay the same monthly amount for water and sewer consumption based on the average of the previous annual consumption history. If the variance in actual consumption becomes more than 50 percent of the annual consumption average, the budgeted amount would be recalculated or the budget billing would cease and regular billing would commence. To be eligible to use this "budget billing" feature, the owner and/or consumer would have to submit an application to the finance department for budget billing. After the approval of the finance department, the budget billing would commence and would only cease upon written request by the owner or consumer or the failure to pay the budget amount when the payment is due. (f) A monthly base facility charge as shown on Appendix A shall be billed to all privately owned fire-protection systems and equipment connected to the city water system in accordance with the size of the service line connecting the private system to the city's system. All costs of providing fire sprinkler service, including the service lateral, meter vault and detector check meter shall be the applicant's responsibility. If any consumer shall connect any appurtenance other than sprinkler heads to a fire service line, that consumer shall pay all connection-related charges set out in this section and the monthly water service charges identified in this section regarding service to customers delineated under the general service designation. (g) Upon the application of the owner or consumer for water service on the premises to which there has not been made any previous service for water, the tapping charges as specified in appendix A shall be ' made to cover the cost of the tap and the installation of the service to the property line of the lot to be supplied with water service. (h) Every owner or consumer making an application for water service shall be required to make a deposit with the public works department called a guarantee of payment deposit. The amount of such deposit shall be according to the size of the service, as specified in appendix A. If the owner or consumer making such deposit wishes the service to be discontinued, the guarantee-of payment deposit shall be refunded less outstanding charges for water, sewer, stormwater or garbage and waste. If at any time the total service charges for a given account exceed the amount of the deposit, the city reserves the right to demand an additional deposit up to four times the amount of any previous monthly bill on that service, (i) A request by the owner or consumer to have the water meter re -read for validation of the correctness of a meter reading will result in a fee in accordance with the schedule set forth in appendix A. This fee will be charged only if the re -read validates the accuracy of the reading in question. (j) A request by the owner or consumer to have a special water meter read at a time other than a normally scheduled read date as set by the utility will result in a fee in accordance with the schedule set forth in appendix A. (k) Meter/meter equipment and City of Miami Beach utility property servicing a premises found damaged, destroyed or missing will be charged to the owner or consumer in accordance with the schedule set forth in appendix A. (1) A request by the owner or consumer to have a field visit by a technician. This fee will be charged only if the technician finds that the problem/issue is not that of the utility. Sec. 110-168. - Schedule of monthly sanitary sewer user rates. (a) There is hereby imposed, upon all premises within the city connected to or using the facilities of the city's sanitary sewer system, a monthly sanitary sewer user rate. Every premises connected to or using the facilities of the city's sanitary sewer system shall be billed monthly user rates consisting of, (1) A base facility charge which serves as the monthly minimum service charge on each service installed, varying with and based upon the size of the meter installed in accordance with the rules of the public works department; (2) A sanitary sewer consumption charge; and (3) Purchased sanitary sewer pass-through adjustment rate to recover the cost of purchased wastewater treatment and disposal services as billed by WASD. The monthly sewer user rates charged for service shall be in accordance with the consumer applicability provisions and the corresponding schedule set in Appendix A as may be adjusted from time to time based on the provisions of the section and in Appendix A. The billed sewer consumption shall be based on the metered water delivered to the consumer for which the monthly water user rates apply. The provisions of this section shall not be applicable to any water sold and delivered through separate meters measuring water delivered and consumed solely for swimming pools, lawn sprinkler systems, cooling towers or other purposes not requiring the use of sanitary sewer system facilities of the city.. The monthly sanitary sewer user rates shall be charged to each consumer each month in accordance with the following applicability provisions; 50 (b) (c) (1) Individual Metered. Residential Service - Applicable to all consumers that represent service to a residential dwelling unit that is individually metered for water service. (2) Master -metered Multifamily Residential Service - Applicable to all sewer consumers that represent service to a residential dwelling units that is master - metered (more than one residential dwelling unit being served by the water meter measuring service to the premises) which would include, but not be limited to, condominiums, apartments, and duplexes. .(3) Nonresidential Service - Applicable to all sewer customers that are not classified as individually metered residential service or master -metered residential service which primarily represents service to commercial, public authorities. and institutional customers. To the extent practical, all sanitary sewer service provided to a consumer shall be based on the metered water delivered to the premises, exclusive of water -only service which is separately metered by the city, and shall be billed the sewer consumption charge and the purchased sanitary sewer pass-through charge, which rate shall be prorated for each 100 gallons in the event of increments of less than 1,000 gallons for all consumers being billed for sanitary sewer service. With respect to the billing for sanitary sewer use, the sewer consumption rates and the purchased sanitary sewer pass-through rate as defined in this section may be added together for rate application or billing purposes on a consumer's bill. Pass -Through of Purchased Wholesale Sanitary Sewer Charges. The Purchased Sanitary Sewer Pass-through Rate, which is applied to all sanitary sewer consumers being billed for sewer service, shall be increased or decreased by the city by applying a pass-through adjustment factor for any change in the rates charged to the city for wholesale wastewater treatment and disposal services purchased from WASD (the "Sanitary Sewer Pass -Through Adjustment") to the Purchased Sewer Pass-through Rate charged by the city. (1) Adjustment Schedule. The implementation of the adjustment to the Purchased Sanitary Sewer Pass -Through Rate for any month that a change in wholesale sanitary sewer rates by WASD is effectuated ("Sewer Cost Recovery") shall occur without a public hearing. Sewer Cost Recovery shall be employed each time that WASD adjusts the average annual wholesale sanitary sewer rates that are billed to the city. Any adjustment to the Purchased Sanitary Sewer Pass - Through Rate based on the determination of the change in wholesale rates shall be implemented in the month immediately following the determination of the Purchased Sanitary Sewer Pass -Through Adjustment. The Purchased Sanitary Sewer Pass -Through Rate as shown sin Appendix A and as may be further adjusted automatically in the future by the implementation of the provisions of this section and in Appendix A and which are then in effect shall be increased or decreased by- the city by applying -a Purchased Sanitary Sewer Pass-through Adjustment established in accordance with this subsection and in Appendix A to the then effective Purchased Sanitary Sewer Pass -Through Rate prior to such 569 application. Nothing herein shall preclude the city from making additional changes to the monthly sanitary sewer user rates for service. (2) Applicability of Purchased Sanitary Sewer Rates. The Purchased Sanitary Sewer Pass -Through Rate shall be in addition to any sewer consumption rates for all retail and wholesale customers that are billed for wastewater treatment and disposal services by the city. The following are the customers that shall be subject to the application of the Purchased Sanitary Sewer Pass-through Rate and shall be subject to the pass-through for changes in the cost of purchased wastewater treatment and disposal services from WASD (the "Applicable Customers"): (i) The retail water customer classes that are billed the sewer consumption charge referenced in this section. (ii) All separate utilities or local governments that may receive wholesale sewer service provided by the city currently or in the future which is not considered as retail customers. (3) Calculation of Purchased Sanitary Sewer Pass -Through Adjustment. The Purchased Sanitary Sewer Pass -Through Adjustment shall be calculated using the following formula: edTn - ((IWWG _ oWWG) * (141 -(Dr + T +_n)u Jnr used fgr Sewer Dost Rer.oyen/ to determine the menetanr adjustment Ou tam . 'P{e_P6PT-Ar repFeseRtstF— he resppeGtl%re—dvrellar f to the Purnhased Cannan! Sewer Pass_ThFough R WSW- The innreaced average annual wholesale or purnhased sanitafy that h e effective for the month immediately after the PWSG. Fate ohaFged by WASP expFessed enF per 1,000-gallens basis Fc-Ae by WAS D. OF - The fee paid to the Department of Envirenmental Reseumes- the Gity. T - Any and all taxes_ eF tax equivalents that rsay be paid by the seweF system that '-s based en Fevenues billed by the Gity, iAGluding any payment in leew-ef tax imposed by the pity nn its sanitane sewer sy tern that i based- en -revenue hiller! -h.r the nit... .env nv funding of renewals _ and Feplamnent fund deposits that 'a deteffRined ar, a per-GeRt of Fevenues billed. (4) Determination of P-11ra-lbased San#ar-y Sewer- Pass Thr-euo Rate. The PuFGhased ganitaFy SeweF Pass-ThFough Rate shall be deteFmined based on the addition GF 549 fill I I. a. Sec. 110-171. - Rate indexing. (a) Water and sewer rates. Except as otherwise provided in this subsection, the monthly user rates established in subsections 110-167(a) for the water system and 110- 168(a) for the sanitary sewer system (collectively, the "applicable rates") as shown on sGhedule Appendix A and as may be further adjusted automatically in the future by implementation of the automatic rate indexing provisions as specified in Appendix A. the- pFwAsiens of this seGtien and whiGh aFe then in efferA shall be the niiy/ each dear by applying the mine inrlev faGWF established fnr that - _ MMAYA19WAILT.T.1tr-",.i tLi. r. .114 / Pi 'r M7NO- -TM MMMI" - - 1 - 60 6U .. A .. TP �• - - - 011001-10- -01. - 6U Line No. eR a Aflaet 9p $56,98535 Less: R @i4,258,4 4 2 Fh,mh:a,-;;-i&-%AMstewater Expenses IPSPT-R 1$20,865,353 Other Pass thFough Expenses 4 RT A Adjusted OpeFating_ 5-1. 23-4 1$21,78 Effnn}nin D►inn Inane APFII 2015 GPI 'Rdex 5 1245.195 4515 1248.741 GhaRgSiR GPI IRdex 8=7-69 13.546 9-8 11.44% I9 i Less, PTR Revenue ppu� @77�R� 7zvrvTvc 6U (ii) D rmine ed rates The indexed rates shall he determaneri irTvetQmnrr�tiexcv--razcr.�--n� based en the p9ee index faGWF applied unifeFmly to the applirable Fates in effecA and shall be reunded to the neaFest dent. The deteFFAInation shall be IQ - /AQ\/I i 12IC\ 1R - The indexed ennlic-able rated that are to he planed in effent in the the pFire index- farAeF; (b) Stormwater rates. Except as otherwise provided in this subsection, the monthly user rates established in section 110-109 for the stormwater system as shown on ssbedule in Appendix A and as may be further adjusted automatically in the future by implementation of the automatic rate indexing provisions as specified in Appendix A. the pFay-sions of this sertiGR and whiGh are then in effert shall be inGFeased by the Glty earah yeaF by applying the GonsumeF PFire index (GPi) established f9F that yea ;GeFdaRee w0th the GPI, as defined below, to the then steFmwateF Fate to offset the a e6tt of inflation on the eest of eperatiRg and maintai ihe-system The PI rn�G� hall never he less than 0.0 ne►eent The v9ns' �mQmer PFire index , as way of exam pie, the CP 1 published by Bure-au, of I-a-hGF StatistiGS -All"rhanGeRSUMeFE� Miami -Cert 1 uderdale as of Ancil 2917 is 2.8 nereent ' SECTION 2. That Chapter 110, "UTILITIES," Article IV "Fees, charges, rates and billing procedures," in APPENDIX A is hereby amended asfollows: sag �.4.A-�To y try Y 0.89% ww ritl�s! Ma t -1-F! i 8.00%tTax Taxer, and Equivale 4-7 t 0.00% MeF Adjustments 48 0.00% - 141 - (D+T-+C)))-i 49 1 Ogg9e �n�9 p 0:97% (ii) D rmine ed rates The indexed rates shall he determaneri irTvetQmnrr�tiexcv--razcr.�--n� based en the p9ee index faGWF applied unifeFmly to the applirable Fates in effecA and shall be reunded to the neaFest dent. The deteFFAInation shall be IQ - /AQ\/I i 12IC\ 1R - The indexed ennlic-able rated that are to he planed in effent in the the pFire index- farAeF; (b) Stormwater rates. Except as otherwise provided in this subsection, the monthly user rates established in section 110-109 for the stormwater system as shown on ssbedule in Appendix A and as may be further adjusted automatically in the future by implementation of the automatic rate indexing provisions as specified in Appendix A. the pFay-sions of this sertiGR and whiGh are then in effert shall be inGFeased by the Glty earah yeaF by applying the GonsumeF PFire index (GPi) established f9F that yea ;GeFdaRee w0th the GPI, as defined below, to the then steFmwateF Fate to offset the a e6tt of inflation on the eest of eperatiRg and maintai ihe-system The PI rn�G� hall never he less than 0.0 ne►eent The v9ns' �mQmer PFire index , as way of exam pie, the CP 1 published by Bure-au, of I-a-hGF StatistiGS -All"rhanGeRSUMeFE� Miami -Cert 1 uderdale as of Ancil 2917 is 2.8 nereent ' SECTION 2. That Chapter 110, "UTILITIES," Article IV "Fees, charges, rates and billing procedures," in APPENDIX A is hereby amended asfollows: sag APPENDIX A FEE SCHEDULE 110- Article IV. Fees, Charges, Rates and Billing Procedure 166(a) Division 2. Rates, Fees and Charges The monthly water and sewer user rates for Fiscal Years 2021 to 2025 are based on City Commission direction pursuant to a_formal rate study completed in 2020. The water user rates are designed to increase water revenues by 0% in Fiscal Year 2021, 1 % in Fiscal Year 2022, and 5.48% per year in Fiscal Years 2023 to 2025. The sewer rates are designed to increase sewer revenues by 0% in Fiscal Year 2021 1 % in Fiscal Year 2022, and 2.35% per year in Fiscal Years 2023 to 2025 On a combined basis the monthly user rates are designed to increase overall utility revenues by 0% in Fiscal Year 2021 1 % in Fiscal Year 2022 and approximately 3.6% to 3.7% per year in Fiscal Years 2023 to 2025. These increases are in addition to the pass-through of future wholesale water and sewer rate increases from the Miami -Dade County Water and' Sewer Department after 166(a)(1) Fiscal Year 2021 After Fiscal Year 2025 the City shall continue to implement automatically the cuss -through increases and rate indexing adiustments as allowed by the City Code. 110- GhaFqa Monthl 166(a) Water Rates Individual Metered 110- 166(a)(1) Service Service Annual Adjustment (References shown are Rate Rate Rate Rate to defined at Effective Effective Effective Effective Effective the end of January October October October October this 1. 2021 1.2021 1. 2022 1. 2023 1, 2024 Appendix A) Base Facility Charge (per meter size) Rate 3/. -inch $8-32 $8.501 $8.591 $9.061 $9.56 $10.081 [C] 1 -inch &-N 8.87 8.96 9.45 9.97 10.52 [C] 1 %z -inch 8-.W 1 9.74 9.841 10.38 10.95F-1:1:5:5 [C] 2 -inch 48-38 1 10.61 1 10.72 11.31 11.9312.58 [C] 669 3 -inch 40:98 11.14 11.25 11.87 12.52 13.21 [C] 110- 4 -inch 4266 12.83 12.96 13.67 14.42 15.21 [C] 166(a)(2) Water Consumption Charge (per 1,000 Annual gallons) Adjustment 0 to 8,000 Gallons $0:96 0.98 0.99 1.04 $1.10 $1.16 [C] 8,001 to 16,000 2,64 2.701 2.73 2.88 3.04 3.21 [C] Gallons Rate Rate Rate Rate Rate defined at 16,001 to 24,000 13--ol 4.01 4.05 4.27 4.50 4.75 (C] January Gallons October October October this 1.2021 Above 24,000 1, 2022 5.48 5.53 5.83 6.15 6.49 [C] Gallons Purchased Water Pass -Through Rate Rate (per 1,000 gallons) $8.32 $8.50 $8.591 .9.06 $9.56 $10.081 [C] All Water Use 47,96 1.88 1.90 1 JZ.00 2.11 2.23 [C] 669 Master -Metered 110- Multifamily 166(a)(2) Residential Service Annual Adjustment (References shown are Rate Rate Rate Rate Rate defined at Effective Effective Effective Effective Effective the end of January October October October October this 1.2021 1.2021 1, 2022 1.2023 1.2024 Appendix A) Base Facility Charge (per meter size) Rate '/.-inch $8.32 $8.50 $8.591 .9.06 $9.56 $10.081 [C] 1 -inch 47,96 18.36 18.54 19.56 20.63 21.76 [C] 1'/z -inch 34 26 35.01 35.36 37.30 39.34 41.49 [C] 2 -inch 53.66 54.84 55.39 58.42 61.62 65.00 ,[C] 3 -inch 403.62 105.90 106.96 112.82 119.00 125.52 [C] 4 -inch 46"2 164.46 166.10 175.20 184.80 194.92 [C] 6 -inch 322 38 329.47 332.76 350.99 370.22 390.50 [C] 8 -inch 609.40 520.30 525.50 1 554.28 584.64 1 616.66 [C] 669 Size of Meter 10 -inch 730.80 746.88 754.35 795.67 1 839.25 1 885.22 1 [C] 0 to 40,000 12 -inch 11,359.95 1,380.67 1.394.48 1,470.86 1.551.43 1.636.41 1 [C] 128,001 to 256,000 Water Consumption Charge (per 1,000 gallons)[ ' ] 3 -inch 0 to 256,000 256,001 to 512,000 Over 512,001 4 -inch 0 to 400,000 400,001 to 800,000 1 Over 800,000 Block 1 $81. $1.721 $1.741 $1.841 $1.941 $2.051 [C] 10 -inch Block 2 1 2-.0 I 2.94 1 2.97 3.13 3.30 1 3.48 [C] Block 3 1 3413 3.91 3.95 4.17 4.40 4.64 [C] Purchased Water Pass -Through Rate (per 1,000 gallons) Effective Effective, Effective Effective Effective the end of January All Water Use $99 1.88 1.90 2.00 2.11 2.23 [C] 1. -2021 ['] Usage blocks by meter size: 1-.-2022 1, 2023 1, 2024 Appendix A) Size of Meter Block 1 (gallons) Block 2 (gallons) Block 3 (gallons) %-inch 0 to 16,000 16,001 to 32,000 Over 32,000 1 -inch 0 to 40,000 40,001 to 80,000 Over 80,000 1.5 -inch 0 to 80,000 80,001 to 160,000 Over 160,000 2 -inch 0 to 128,000 128,001 to 256,000 Over 256,000 3 -inch 0 to 256,000 256,001 to 512,000 Over 512,001 4 -inch 0 to 400,000 400,001 to 800,000 1 Over 800,000 6 -inch 0 to 800,000 800,001 to 1,600,000 Over 1,600,000 8 -inch 0 to 1,280,000 1,280,001 to 2,560,000 Over 2,560,000 10 -inch 0 to 1,840,000 1,840,001 to 3,680,000 Over 3,680,000 12 -inch 0 to 3,440,000 3,440,001 to 6,880,000 Over 6,880,000 110- Nonresidential 166(a)(3) Service Annual Adjustment (References shown are Rate Rate Rate Rate Rate defined at Effective Effective, Effective Effective Effective the end of January October October October October this 1. -2021 1, 2021 1-.-2022 1, 2023 1, 2024 Appendix A) sag Size of Meter Base Facility Charge (per meter size) Rate Block 3 (gallons) %-inch 0 to 16,000 16,001 to 32,000 Over 32,000 1 -inch 0 to 40,000 %-Inch 1 $8:32 8.50 J 0 to 80,000 9.06 9.56 10.08 [C] 128,001 to 256,000 1 -inch 17.961 18.36 18.54 19.56 20.63 21.76 1 [C] II Y2-inch 34:26 1 35.01 35.36 37.30 1 39.34 41.49 [C] 10 -inch 2 -inch 53.66 54.84 55.39 58.42 61.62 65.00 [C] 3 -inch 103.62 105.90 106-96,112.82 119.00 125.52 [C] 4 -inch 460.92 164.46 166.10 175.20 184.80 194.92 [C] 6 -inch 322.38 329.47 332.76 350.99 370.22 390.50 [C] 8 -inch 58910 520.30 525.50 554.28 584.64 616.66 [C] 10 -inch 730.80 746.88 754.35 795.67 839.25 885.22 [C] 12 -inch 4,369.95 1.380.67 1,394.48 1.470.86 1.551.43 1.636.41 [C] Water Consumption Charge (per 1,000 gallons) ['I Block 1 4-.C8 1.72 $1.741 $1.841 1.94 2.05 [C] Block 2 287 I 2.94 1 2.973.13 3.303.48 [C] Blbck 3 3:83 1 3.91 3.95 4.17 4.40 4.64 [C] Purchased Water Pass -Through Rate (per 1,000 gallons) All Water Use 4-:99 1.88 1190 $2.001 2.11 2.23 [C] [ ' ] Usage blocks by meter size: Size of Meter Block 1 (gallons) Block 2 (gallons) Block 3 (gallons) %-inch 0 to 16,000 16,001 to 32,000 Over 32,000 1 -inch 0 to 40,000 40,001 to 80,000 Over 80,000 1.5 -inch 0 to 80,000 80,001 to 160,000 Over 160,000 2 -inch 0 to 128,000 128,001 to 256,000 Over 256,000 3 -inch 0 to 256,000 256,001 to 512,000 Over 512,001 4 -inch 0 to 400,000 400,001 to 800,000 Over 800,000 64nch 0 to 800,000 800,001 to 1,600,000 Over 1,600,000 8 -inch 0 -to 1,280,000 1,280;001 to 2;560,000 Over 2,560;000 10 -inch 0 to 1,840,000 1,840,001 to 3,680,000 Over 3,680,000 12 -inch 0 to 3,400,000 3,440,001 to 6,880,000 Over 6,880,000 660 ".L Individual Metered 110- Residential 166(a)(4) Irrigation Service Annual Adjustment (References shown are Rate Rate Rate Rate Rate defined at Effective Effective Effective Effective Effective the end of January October October October October this 1.2021 1.2021 1.2022 1, 2024 1.2023 Appendix A) Base Facility Charge (per meter size). fitate 3/ -inch 1 8:32 $8.501 8.59 9.06 1 AqM 10.08 [C] 1 -inch &.N 1 8.87 1 .96 9.45 9.97 10.52 [C] 1Y, -inch 9,53 9.74 9.84 10.38 10.95 11.55 [C] 2 -inch 4036 10.61 1 10.72 11.31 11.93 12.58 [C] I. 3 -inch 40.89 11.14 11.25 11.87 12.52 J 13.21 1 [C] 4 -inch 42.56 12.83 12.96 13.67 14.42 15.21 [C] Water Consumption Charge (per 1,000 gallons) 0 to 16,000 Gallons 2 &3 $2.691 $2.721 $2.871 3.03 $3.20 [C] Above 16,000 646 5.48 5.53 5.83 6.15 6.49 [C] Gallons Purchased Water Pass -Through Rate (per 1,000 gallons) All Water Use. 4-.88 1.88 $1.901 $2.001 $2.111 $2.231 [C] Master -Metered 110- Multifamily 166(a)(5) Residential Irrigation Service Annual Adjustment (References shown are Rate Rate Rate Rate Rate defined at Effective_ Effective Effective Effective Effective the end of October October October January October this 1, 2024 1, 2021 1.2021 1.2022 1.2023 Appendix A) ".L Size of Base Facility Charge (per meter size) P -ate Meter (gallons) Over %-inch '/o -inch I 9--U 8.50 8.59 9.06 9.56 $10.081 [C] 1.5 -inch 14nch 17.961 18.36 18.54 19.56 20.63 21.76 I [C] 2 -inch 1 Y. -inch 34.26 1 35.01 35.36 37.30 39.34 41.49 [C] 2 -inch 53.661 54.84 55.39 58.42 61.62 65.00 [C] 3 -inch 10:162 105.90 106.96 112.82 119.00 125.52 [C] 4 -inch 460.92 164.46 166.10 175.20 184.80 194.92 [C] 6 -inch 322.38 329.47 332.76 350.99 370.22 390.50 [C] 8 -inch 509.10 520.30 525.50 554.28 584.64 616.66 [C] 10 -inch X80 746.88 754.35 795.67 839.25 885.22 [C] 12 -inch 4,350.95 1,380.67 1.394.48 1.470.86 1.551.43 1,636.41 1 [C] Water Consumption Charge (per 1,000 gallons)[*] Block 1 M 2.69 2.72 2.87 $3.03 3.20 1 [C] Block 2 5.-V 1 5.48 5.53 5.83 6.15 6.49 [C] Purchased Water Pass -Through Rate (per 1,000 gallons) All Water Use 1--N I 1.88 1.90 2.00 $2.11 2.23 [C] ['] Usage blocks by meter size: Size of Block 1 (gallons) Block 2 Meter (gallons) Over %-inch 0 to 32,000 32,000 1 -inch 0 to 80,000 Over 80,000 1.5 -inch 0 to 160,000 Over160,000 Over Over1256,000 2 -inch 0 to 256,000 3 -inch 0 to 512,000 Over512,001 Over Over 4 -inch 0 to 800,000 0 s� 60 Over 6 -inch 0 to 1,600,000 11,600,000 Over 8 -inch 0 to 2,560,000 2,560,000 Over 10 -inch 0 to 3,680,000 3,680,000 Over [12 -inch 0 to 6,880,000 6,880,000 Nonresidential 110- Irrigation 166(a)(6) Service Annual Adjustment (References shown are Rate Rate Rate Rate Rate defined at Effective Effective Effective Effective Effective the end of Ja uarV October October October October this 1, 2021 1, 2021 1, 2022 1, 2023 1, 2024 Appendix A) Base Facility Charge (per meter size) Rate 3/. -inch 842 $8.501 $8.591 $9.061 $9.561 $10.081 [C] 1 -inch 17 86 18.36 18.54 19.56 20.63 21.76 [C] 1 %z -inch 34.26 35.01 1 35.36 37.30 39.34 41.49 [C] 2 -inch 53.66 54.84 55.39 58.42 61.62 65.00 [C] 3 -inch 493.62 105.90 106.96 112.82 119.00 125.52 [C] 4 -inch 460.92 164.46 166.10 175.20 184.80 194.92 [C] 6 -inch 322.38 329.47 332.76 350.991 370.22 390.50 [C] 8 -inch 589:49 1 520.30 525.50 554.28 584.64 616.66 [C] 10 -inch 730.89 746.88 754.35 795.67 839.25 885.22 [C] 12 -inch 4,359.95 1.380.67 1.394.48 1,470.86 1.551.43 1.636.41 1 [C] Water Consumption Charge (per 1,000 gallons) [' ] Block 1 1 Z.93 2.69 2.72 2.87 $3.03 3.20 [C] Block 2 1 5.36 1 5.48 5.53 5.83 6.15 6.49 [C] Purchased Water Pass - 60 Size of Meter Through Rate Block 2 (gallons) 3/ -inch 0 to 32,000 1 Over 32,000 1 -inch 0 to 80,000 Over 80,000 1.5 -inch (per 1,000 Over 160,000 2 -inch 0 to 256,000 1 Over 256,000 3 -inch 0 to 512,000 1 Over 512,001 4 -inch gallons) 1 Over 800,000 6 -inch 0 to 1,600,000 Over 1,600,000 8 -inch 0 to 2,560,000 Over 2,560,000 10 -inch All Water Use 1 4-N 1.88 1.90 2.00 2.11 2.23 [C] 168(a)(1) [ ' ] Usage blocks by meter size: Size of Meter Block 1 (gallons) Block 2 (gallons) 3/ -inch 0 to 32,000 1 Over 32,000 1 -inch 0 to 80,000 Over 80,000 1.5 -inch 0 to 160,000 Over 160,000 2 -inch 0 to 256,000 1 Over 256,000 3 -inch 0 to 512,000 1 Over 512,001 4 -inch 0 to 800,000 1 Over 800,000 6 -inch 0 to 1,600,000 Over 1,600,000 8 -inch 0 to 2,560,000 Over 2,560,000 10 -inch 0 to 3,680,000 Over 3,680,000 12 -inch 0 to 6,880,000 Over 6,880,000 110- Monthly Sewer 168 a Rates Individual metered 110- residential 168(a)(1) service: Annual Adjustment (References shown are Rate Rate Rate Rate Rate defined at Effective Effective Effective Effective Effective the end of January October October October October this 1.2021 1. 2022 1. 2023 1.2021 1. 2024 Appendix A) Base facility charge (all meter sizes) mate All meter sizes �9S 9.19 9.28 9.50 9.72 9.95 [D] Sewer consumption - charge (per 1,000 gallons) 62b 644 All gallons (based on metered water consumption) 4-.693 $4.63 $4.68 $4.79 $4.90 5.02 [D] 110- Purchased sanitary 168(a)(2) sewer pass-through rate (per 1,000 gallons) Annual All gallons (based Adjustment on metered water J5.57 5.70 5.83 5.97 [D] consumption shown are 644 Master -metered 110- multifamily 168(a)(2) residential service: Annual Adjustment (References shown are Rate Rate Rate Rate Rate defined at Effective Effective Effective Effective Effective the end of January October October October October this 1.2021 1.2022 1.2023 1.2021 1.2024 Appendix A) Base facility charge (per meter size) dais I- % -inch &Q8 9.19 9.28 $9.501 $9.721 $9.95 1 [D] 1 -inch 20.081 20.52 20.73 21.22 21.72 22.23 [D] 1'/ -inch 38:57 39.42 39.81 40.74 41.70 42.68 [D] 2 -inch 68:75 1 62.09 62.71 64.18 65.69 67.23 [D] 3-inch1 122.55 123.78 126.69 129.66 132.70 [D] 4 -inch 456.7 190.57 192.48 197.00 201.62 206.35 [D] 6 -inch 37134 379.51 383.31 392.31 1 401.52 410.95 [D] 8 -inch 593.481 606.23 612.29 626.66 641.37 656.43 [D] 10 -inch 852.88 870.74 879.45 900.10 921.23 942.86 [D] 12 -inch 1,59148 1.626.49 1642.75 1.681.31 1.720.78 1.761.18 [D] Sewer consumption charge (per 1,000 gallons): All gallons (based on metered water 433 14.63 .6814 -79 4.90 $5.02 [D] consumption) 644 110- Purchased sanitary 168(a)(3) sewer pass-through rate (per 1,000 Annual gallons): Adjustment All gallons (based (References on metered water 5:33 $5.51 $5.57 $5.70 $5.83 $5.97 [D] consumption) Rate Rate Rate Rate Rate defined at 110- Nonresidential 168(a)(3) service: Annual Adjustment (References shown are Rate Rate Rate Rate Rate defined at Effective Effective Effective Effective Effective the end of January October October October October this 1.2021 1.2022 1, 2023 1.2021 1, 2024 Appendix A) Base facility charge mate (per meter size) %-inch 1 8:89 $9.191 $9.281 $9.501 191Z 9.95 I [D] 1 -inch 20.08 20.52 20.73 21.22 21.72 22.23 I [D] 1'/z -inch M.57 1 39.42 39.81 40.74 41.70 42.68 [D] 2 -inch 60 75 1 62.09 62.71 1 64.18 65.69 67.23 [D] 3 -inch 119.91 122.55 123.78 126.69 1 129.66 132.70 [D] 4 -inch i 86 47 190.57 192.48 197.00 201.62 206.35 [D] F__ 6 -inch 374.34 379.51 383.31 392.31 401.52 1 410.95 [D] F__ 8 -inch 593.18 606.23 612.29 626.66 641.37 656.43 1 [D] 10 -inch 852 AA 870.74 879.45 900.10 921.23 942.86 [D] 12 -inch 1,591.4 8 J 1,526.49 1,642.75 1.681.31 1.720.78 1,761.18 [D] Sewer consumption charge (per 1,000 gallons): All gallons (based on metered water 453 $4.63 $4.68 4.79 J5..02 [D] consumption) Purchased sanitary sewer pass-through rate (per 1,000 gallons): SA Annual Adjustment Reference Definitions: [C] = Pass -Through of Purchased Wholesale Water Charges and Rate _Indexing. Pass -Through of Purchased Wholesale Water Charges. The Purchased Water Pass -Through Rate, which is applied to all water consumers being billed for potable water service, shall be increased or decreased by the city by applying a pass- through adjustment factor for any change in the average annual rates charged to the city for wholesale potable water purchased from the Miami -Dade Water and Sewer Department ("WASD") to the Purchased Water Pass -Through Rate charged by the city (the "Purchased Water Pass -Through Adjustment"). (1) Adjustment schedule. The implementation of the adjustment to the Purchased Water Pass -Through Rate for any month that a change in wholesale potable water rates by WASD is effectuated ("Water Cost Recovery") shall occur without a public hearing. Water Cost Recovery shall be employed each time that WASD adjusts the average annual wholesale potable water rates that are billed to the city. Any adjustment to the Purchased Water Pass -Through Rate based on the determination of the change in wholesale rates shall be implemented in the month immediately following the determination of the Purchased Water Pass -Through Adjustment. The Purchased Water Pass - Through Rate as shown sin Appendix A and as may be further adjusted automatically in the future by the implementation of the provisions of this section and which are then in effect shall be increased or decreased by the city by applying a Purchased Water Pass -Through Adjustment established in accordance with this subsection to the then effective Purchased Water Pass - Through Rate prior to such application. Nothing herein shall preclude the city from making additional changes to the monthly water user rates for service. (2) Applicability of Purchased Water Rates. The Purchased Water Pass -Through Rate shall be in addition to any water consumption rates for all retail and wholesale customers that are billed for potable water service by the city. The following are the customers that shall be subject to the application of the Purchased Water Pass-through Rate and shall be subject to the pass-through for changes in the cost of purchased water from WASD (the "Applicable Customers"): (i) The retail water customer classes that are billed the water consumption charge referenced in this section. M. All gallons (based on metered water "S IL51 5.57 5.70 5.83 5.97 [D] consumption) Annual Adjustment Reference Definitions: [C] = Pass -Through of Purchased Wholesale Water Charges and Rate _Indexing. Pass -Through of Purchased Wholesale Water Charges. The Purchased Water Pass -Through Rate, which is applied to all water consumers being billed for potable water service, shall be increased or decreased by the city by applying a pass- through adjustment factor for any change in the average annual rates charged to the city for wholesale potable water purchased from the Miami -Dade Water and Sewer Department ("WASD") to the Purchased Water Pass -Through Rate charged by the city (the "Purchased Water Pass -Through Adjustment"). (1) Adjustment schedule. The implementation of the adjustment to the Purchased Water Pass -Through Rate for any month that a change in wholesale potable water rates by WASD is effectuated ("Water Cost Recovery") shall occur without a public hearing. Water Cost Recovery shall be employed each time that WASD adjusts the average annual wholesale potable water rates that are billed to the city. Any adjustment to the Purchased Water Pass -Through Rate based on the determination of the change in wholesale rates shall be implemented in the month immediately following the determination of the Purchased Water Pass -Through Adjustment. The Purchased Water Pass - Through Rate as shown sin Appendix A and as may be further adjusted automatically in the future by the implementation of the provisions of this section and which are then in effect shall be increased or decreased by the city by applying a Purchased Water Pass -Through Adjustment established in accordance with this subsection to the then effective Purchased Water Pass - Through Rate prior to such application. Nothing herein shall preclude the city from making additional changes to the monthly water user rates for service. (2) Applicability of Purchased Water Rates. The Purchased Water Pass -Through Rate shall be in addition to any water consumption rates for all retail and wholesale customers that are billed for potable water service by the city. The following are the customers that shall be subject to the application of the Purchased Water Pass-through Rate and shall be subject to the pass-through for changes in the cost of purchased water from WASD (the "Applicable Customers"): (i) The retail water customer classes that are billed the water consumption charge referenced in this section. M. (ii) All separate utilities or local governments that may receive wholesale potable water service provided by the city currently or in the future that are not considered to be retail customers. (3) Calculation of Purchased Water Pass -Through Adjustment. The Purchased Water Pass -Through Adjustment shall be calculated using the following formula: PWPTA = ((IWWC - PWWC) * (1/(14DF + T + O))) Where: PWPTA = The Purchased Water Pass -Through Adjustment to be used for Water Cost Recovery to determine the monetary adjustment in the Purchased Water Pass-through Rate to be applied the Applicable Customers. The PWPTA represents the respective dollar increase or decrease to account for changes in wholesale potable water rates charged by WASD to the city that is added or subtracted, respectively to the Purchased Water Pass -Through Rate. IWWC = The increased annual average wholesale or purchased water rate charged by WASD expressed on a dollar per 1,000 gallons basis that became effective for the month immediately after the PWWC. PWWC = The prior annual average wholesale or purchased water rate charged by WASD expressed on a dollar per 1,000 gallons basis immediately prior to the billing of the adjusted wholesale or purchased water rate defined as the IWWC. DF = The fee paid to the Department of Environmental Resources Management (DERM) which is based on a percent of rate revenues billed by the city. T = Any and all taxes or tax equivalents that may be paid by the water system that is based on revenues billed by the city, including any payment in lieu of tax imposed by the city on its water system. O = Any and all charges that may be paid by the city on behalf of the water system that is based on revenues billed by the city, including any funding of renewals and replacement fund deposits that is determined as a percent of revenues billed. (4) Determination of Purchased Water Pass -Through Rate. The Purchased Water Pass -Through Rate shall be determined based on the addition or subtraction of the Purchased Water Pass -Through Adjustment to the rates in effect immediately preceding such adjustment and shall be rounded to the nearest .cent.. The_ Purchased Water Pass -Through Adjustment application shall be based on the following formula: APWTR = PWPTR + PWPTA 6Qn TT Where: APWTR = The Adjusted Purchased Water Pass -Through Rate that is to be placed in effect after the application of the Purchased Water Pass -Through Adjustment to all Applicable Customers billed for potable water service. PWPTR = The Purchased Water Pass -Through Rate in effect immediately prior to the application of the PWPTA. PWPTA = The Purchased Water Pass -Through Adjustment as determined as a result of a change in wholesale water rates as billed by WASD. (5) [Example of calculation.] An example of the calculation of the determination of the Purchased Water Pass -Through Adjustment and the corresponding change to the Purchased Water Pass -Through Rate is illustrated in the following table: Pass -Through Adjustment Charges. The Applicable Rates as may be further adjusted automatically in the future by the implementation of the provisions as contained in this Appendix A and which are then in effect shall be increased or decreased by the city by applying a pass-through adjustment factor established in accordance with this subsection (the "Pass -Through Factor") to the then effective Applicable Rates for increases or decreases in the Applicable Costs. All Applicable Rates so adjusted (the "Pass -Through Rates") shall be charged by the city's water system. (1) Adjustment Schedule. The implementation of Pass -Through Rates for any month associated with a change in Applicable Costs ("Cost Recovery") shall be placed into effect automatically and shall occur without a public hearing. 6�� Line No. Formula Reference Amount Prior Wholesale Purchased Water Rate ($/1,000 gallons) 1 PWWC $1.7350 Increased Wholesale Purchased Water Rate ($/1,000 gallons) 2 IWWC $1.7700 Percent Change in Wholesale Purchased Water Rate 3=(2-1)/1 2.02% Adjustments Department of Environmental Resources Management 4 DF 8.00% Taxes and Tax Equivalents 5 1 T 0.00% Other Adjustments 6 O 0.00% Adjustment Factor=1/1-(D+T+O)).=1/0.92 7 1 1.08696 Purchased Water Pass -Through Percent Adjustment 8=(3*7) 2.20% Prior Purchased Water Pass -Through Rate ($/1,000 gallons) 9 PWPTR $1.93 Purchased Water Pass -Through Adjustment 10=9*8 PWPTA $0.04 Adjusted Purchased Water Pass -Through Rate ($/1,000 gallons) 11=9+10 APWTR $1.97 Pass -Through Adjustment Charges. The Applicable Rates as may be further adjusted automatically in the future by the implementation of the provisions as contained in this Appendix A and which are then in effect shall be increased or decreased by the city by applying a pass-through adjustment factor established in accordance with this subsection (the "Pass -Through Factor") to the then effective Applicable Rates for increases or decreases in the Applicable Costs. All Applicable Rates so adjusted (the "Pass -Through Rates") shall be charged by the city's water system. (1) Adjustment Schedule. The implementation of Pass -Through Rates for any month associated with a change in Applicable Costs ("Cost Recovery") shall be placed into effect automatically and shall occur without a public hearing. 6�� Nothing herein shall preclude the city from making additional changes to the monthly water user rates for service. (2) Applicable Rates. The water base facility, water consumption charges, and Purchased Water Pass-through Rate referenced in subsection 110-166(a) shall be subject to Cost Recovery. (3) Applicable Costs. Only the following cost categories qualify as Applicable Costs for Cost Recovery: (i), All increases or decreases in the percentage charge of the Department of Environmental Resources Management. (ii) All increases or decreases in the application of any tax or tax equivalents, including any payment in lieu of tax imposed by the city on its water system. (iii) All other cost increases incurred by the water system as a result of any regulatory changes or requirements imposed by any regulatory agency having jurisdiction over the utility system operations (a "Regulator"). (4) Calculation of Pass -Through Factor. The Pass -Through Factor shall be calculated using the following formula: PTF = ARR/ER Where: PTF = The Pass -Through Factor used for Cost Recovery to determine the monetary adjustment in the Applicable Rates. The PTF represents the estimated annual increase in the Applicable Costs, expressed as a percentage of the most recent historical revenues derived from the Applicable Rates for the most recently completed fiscal year. ARR = Additional Required Revenue equal to the estimated annual change in the Applicable Costs that will affect the overall cost of providing water system services as determined by the city. ER = The total actual revenues earned by the Enterprise System from the Applicable Rates for the potable water system as reported in the city for the most recently completed fiscal year. (5) Determination of Pass -Through Rates. The Pass -Through Rates shall be determined based on the Pass -Through Factor applied uniformly to the Applicable Rates in effect and shall be rounded to the nearest cent. The Pass- through application shall be based on the following formula: PTR = (AR)(1 + PTF) Where: PTR = The Pass -Through Rates that are to be placed in effect for the current fiscal year through application of the Pass -Through Factor. 649 AR = The Applicable Rates in effect immediately prior to the application of the Pass -Through Factor. PTF = The Pass -Through Factor as determined by the city to recover the net change in Applicable Costs. Rate Indexing. Effective for all bills rendered on or after October 1, 2025, and except as otherwise provided, the monthly user rates established in subsections 110-167(a) for the water system and 11.0-168(a) for the sanitary sewer system (collectively, the "applicable rates") as shown in Appendix A and as may be further adjusted automatically in the future by implementation of the provisions of this section and which are then in effect shall be increased by the city each year by applying the price index factor established for that year in accordance with this subsection (the "price index factor") to the then applicable rates to offset the effects of inflation on the cost of operating and maintaining the system. The Rate Index shall never be less than 0.0%. All applicable rates so adjusted (the "indexed rates") shall be implemented by the city. (1). Adjustment schedule. Each implementation of indexed rates ("rate indexing") shall be placed into effect automatically and shall occur without a public hearing. Rate indexing shall not be employed more than once in any fiscal year_ Any indexed rates based on the operating and maintenance expenses for the most recently completed fiscal year shall be implemented as of October 1 of the subsequent fiscal year. Nothing herein shall preclude the city from making additional changes to the water or wastewater rates for service. (2) Applicable rates. The water base facility charge and water consumption charges referenced in subsection 110-167(a) for the water system and sanitary sewer base facility charge and sanitary sewer consumption charges referenced in subsection 110-168(a) for the sanitary sewer system shall be subject to rate indexing. The purchased water pass-through rate and the purchased sanitary sewer pass-through rates as referenced in the respective subsections shall not be subject to rate indexing. (3) Calculation of price index factor. The price index factor shall be determined based on the actual reported financial results as contained in the annual comprehensive annual financial report and the records for the most recently completed fiscal year preceding the determination of the rate index (the "calculation period"). By way of ,example, the rate index to be applied on October 1, 2017 would be based on the actual financial results for the 12 months ended September 30, 2016. The price index factor shall be calculated using the following formula: PIF = ([OP- (PWE+PSE+PT)]*EPI)/[(ER-PTR)/ * (1/(1- (DF+T+O)))] Where: PIF = The price index factor used for rate indexing to determine the monetary adjustment in the applicable rates. The PIF represents the estimated increase in operation and maintenance expenses during the calculation period that is subject to inflation, expressed as a percentage of applicable rates revenues earned during the calculation period. The amount of the rate index increase is a component of any additional revenue required by the utility system to ensure compliance with the bond covenants and fiscal requirements of the utility system (the "additional required revenue"). OP = The total expenses, paid or accrued, for the operations, maintenance, and repair of the water and wastewater systems as reported in the comprehensive annual financial report and other financial records for the city for the calculation period after excluding: (a) allowances for depreciation and amortization expense; and (b) capitalized salaries and other overhead related to the city's capital improvement program (CIP). Such total expenses as adjusted for the stated exclusions are hereinafter referred to as the "operating expenses". PWE = That component of the operating expenses (OP) that represent the cost of purchased water service from WASD for the calculation period, adjusted to include the fee paid to the Department of Environmental Resources Management (DERM) which is based on a percent of rate revenues billed by the city for this component of expense. PSE = That component of the operating expenses (OP) that represent the cost of purchased sanitary sewer service from WASD for the calculation period, adjusted to include the fee paid to the Department of Environmental Resources Management (DERM) which is based on a percent of rate revenues billed by the city for this component of expense. PT = The sum of all other components of the operating expenses (OP) for the Calculation Period for which increases in those components may be recovered separately as a pass-through adjustment pursuant to subsections 110-167(d) for the water system and 110-168(a) for the wastewater system. EPI = The Consumer Price Index - All Urban Consumers. Miami -Fort Lauderdale -West Palm Beach (Series ID: CUURS35BSA0), as published by Bureau of Labor Statistics (the "effective price index") as reported for the month of April of the current year compared to the index reported for the immediately preceding month of April. By way of example, the effective price index published by Bureau of Labor Statistics - All Urban Consumers. Miami - Fort Lauderdale, as of April 2015 was 245.195 and as of April 2016 was 248.741 or a change of 1.446% which shall be applied to the applicable operating expenses reported for fiscal year 2015. ER = The total actual revenues earned by the utility system from the applicable rates as reported in the comprehensive annual financial reports and other financial records for the calculation period. PTR = The total actual revenues earned by the utility system during the calculation period from the application of i) the purchased -water pass - 611 through rate; ii) the purchased -wastewater pass-through rate; and iii) any other expense that was categorized as a pass-through expense and separately evaluated. (4) Price index calculation example. (i) An example of the calculation of the Price Index Factor based on reported fiscal year 2015 information is illustrated in the following table: (ii) Determination of indexed rates. The indexed rates shall be determined based on the price index factor applied uniformly to the applicable rates 6H Line No. Formula Reference Amount Total Operating Expenses 1 OP $56,906,238 Less: Purchased Water Expenses 2 PWPTR $14,258,442 Purchased Wastewater Expenses 3 PSPTR 20,865,353 Other Pass-through Expenses 4 PT 0 Adjusted Operating Expenses 5=1-2-3-4 $21,782,443 Effective Price Index EPI 'April 2015 CPI Index 6 245.195 April 2016 CPI Index 7 248.741 Change in CPI Index 8=7-6 3.546 Annual Percent Change 9=8/6 1.44% Additional Required Revenue (Numerator) 10=5*9 $313,667 Actual Applicable Rate Revenues Earned 11 ER $73,291,986. Less: PTR Purchased -Water Pass Through Rate Revenue 12 $15,498,307 Purchased -Sanitary Sewer Pass -Through Rate Revenue 13 22,679,732 Applicable -Rate Revenue (Denominator) 14=11-12-13 $35,113,974 Price Index Factor before Adjustments 15=10/14 0.89% Adjustments: Department of Environmental Resources Management 16 DF 8.00% Taxes and Tax Equivalents 17 T 0.00% Other Adjustments 18 O 0.00% lAdjustment Factor = 1/(1-(D+T+O)) =1/0.92 19 1.08696 Price Index Adjustment 20=15*19 PIF 0.97% (ii) Determination of indexed rates. The indexed rates shall be determined based on the price index factor applied uniformly to the applicable rates 6H in effect and shall be rounded to the nearest cent. The determination shall be based on the following formula: IR = (AR)(1 + PIF) Where: IR = The indexed applicable rates that are to be placed in effect in the current fiscal year through application of the price index factor. AR = The applicable rates in effect immediately prior to the application of the price index factor. PIF = The price index factor determined for the calculation period. [D] = Pass -Through of Purchased Wholesale Sanitary Sewer Charges and Rate Indexing. Pass -Through of Purchased Wholesale Sanitary Sewer Charges. The Purchased Sanitary Sewer Pass -Through Rate, which is applied to all sanitary sewer consumers being billed for sewer service, shall be in or decreased by the city by applying a pass-through adjustment factor for any change in the rates charged to the city for wholesale wastewater treatment and disposal services purchased from WASD (the "Sanitary Sewer Pass -Through Adjustment") to the Purchased Sanitary Sewer Pass -Through Rate charged by the city. (1) Adjustment schedule. The implementation of the adjustment to the Purchased Sanitary Sewer Pass -Through Rate for any month that a change in wholesale sanitary sewer rates by WASD is effectuated ("Sewer Cost Recovery") shall occur without a public hearing. Sewer Cost Recovery shall be employed each time that WASD adjusts the average annual wholesale sanitary sewer rates that are billed to the city. Any adjustment to the Purchased Sanitary Sewer Pass -Through Rate based on the determination of the change in wholesale rates shall be implemented in the month immediately following the determination of the Purchased Sanitary Sewer Pass -Through Adjustment. The Purchased Sanitary Sewer Pass -Through Rate as shown ein Appendix A and as may be further adjusted automatically in the future by the implementation of the provisions of this section and which are then in effect shall be increased or decreased by the city by applying a Purchased Sanitary Sewer Pass -Through Adjustment established in accordance with this subsection to the then effective Purchased Sanitary Sewer Pass -Through Rate prior to such application_ Nothing herein shall preclude the city from making additional changes to the monthly sanitary sewer user rates for service. (2) Applicability of Purchased Sanitary Sewer Rates. The Purchased Sanitary Sewer Pass -Through Rate shall be in addition to any sewer consumption rates for all retail and Wholesale customers that -are billed -for wastewater treatment and disposal services by the city. The following are the customers that shall be subject to the application of the Purchased Sanitary Sewer Pass -Through Rate 61% and shall be subject to the pass-through for changes in the cost of purchased wastewater treatment and disposal services from WASD (the "Applicable Customers"): (i) The retail water customer classes that are billed the sewer consumption charge referenced in this section. (ii) All separate utilities or local governments that may receive wholesale sewer service provided by the city currently or in the future which is not considered as retail customers. (3) Calculation of Purchased Sanitary' Sewer Pass -Through Adjustment. The Purchased Sanitary Sewer Pass -Through Adjustment shall be calculated using the following formula: PSPTA = ((IWWC - PWWC) * (1/(1 -(DF + T + O))) Where: PSPTA = The Purchased Sanitary Sewer Pass -Through Adjustment to be used for Sewer Cost Recovery to determine the monetary adjustment in the Purchased Sanitary Sewer Pass-through Rate to be applied the Applicable Customers. The PSPTA represents the respective dollar increase or decrease to account for changes in average annual wholesale wastewater rates charged by WASD to the city that is added or subtracted, respectively to the Purchased Sanitary Sewer Pass -Through Rate. 1WSC = The increasedaverage annual wholesale or purchased sanitary sewer rate charged by WASD expressed on a dollar per 1,000 -gallons basis that became effective for the month immediately after the PWSC. PWSC = The prior average annual wholesale or purchased sanitary sewer rate charged by WASD expressed on a dollar per 1,000 -gallons basis immediately prior to the billing of the adjusted wholesale or purchased sewer rate by WASD. DF = The fee paid to the Department of Environmental Resources Management (DERM) which is based on a percent of rate revenues billed by the city. T = Any and all taxes or tax equivalents that may be paid by the sewer system that is based on revenues billed by the city, including any payment in lieu of tax imposed by the city on its sanitary sewer system. O = Any and all charges that may be paid by the city on behalf of the sanitary sewer system that is based on revenues billed by the city, including any funding of renewals and replacement fund deposits that is determined as a percent of revenues billed. (4) Determination of Purchased Sanitary Sewer Pass -Through Rate. The Purchased Sanitary Sewer Pass -Through Rate. shall be determined based on the addition or subtraction of the Purchased Sanitary Sewer Pass -Through 624 Adjustment to the rates in effect immediately preceding such adjustment and shall be rounded to the nearest cent. The Purchased Sanitary Sewer Pass - Through Adjustment application shall be based on the following formula: APSTR =PSTR +PSPTA Where: APSTR = The Adjusted Purchased Sanitary Sewer Pass -Through Rate that is to be placed in effect after the application of the Purchased Sewer Pass - Through Adjustment to all Applicable Customers billed for wastewater service. PSTR = The Purchased Sanitary Sewer Pass -Through Rate in effect immediately prior to the application of the PSPTA. PSPTA = The Purchased Sanitary Sewer Pass -Through Adjustment as determined as a result of a change in wholesale wastewater rates as billed by WAS D. (5) [Example of calculation. j An example of the calculation of the determination of the Purchased Sanitary Sewer Pass -Through Adjustment and the corresponding change to the Purchased Sanitary Sewer Pass -Through Rate is illustrated in the following table: rT--'Tt-_'J Line No. Formula Reference l Amount Prior Wholesale Purchased Sanitary Sewer Rate ($/1,000 gallons) 1 1 PWSC $2.7879 Increased Wholesale Purchased Sanitary Sewer Rate ($/1,000 gallons) 2 IWSC $2.9477 Percent Change in Wholesale Purchased Sanitary Sewer Rate 1)1 5.73% Adjustments Department of Environmental Resources Management 4 DF 8.00% Taxes and Tax Equivalents 5 1 T 0.00% Other Adjustments 16 10 10.00% Adjustment Factor = 1 /(1 -(D+T+O)) =1/0.92 7 1 1.08696 Purchased Sewer Pass -Through Percent Adjustment 8=(3'7) 6.22% Prior Purchased Sanitary Sewer Pass -Through Rate ($/1,000 gallons) 9 PSTR $3.50 Purchased Sanitary Sewer Pass -Through Adjustment 10=91'8 1 PSPTA $0.22 Adjusted Purchased Sanitary Sewer Pass -Through Rate ($/1,000 gallons) - 11=9+10 APSTR$3.72 I- rT--'Tt-_'J Pass -Through Adjustment Charges. The Applicable Rates as shown in Appendix A and as may be further adjusted automatically in the future by implementation of the provisions of this section and which are then in effect shall be increased or decreased by the city by applying a pass-through adjustment factor established in accordance with this subsection (the "Pass -Through Factor") to the Applicable Rates for increases or decreases in the Applicable Costs. All Applicable Rates so adjusted (the "Pass -Through Rates") shall be charged by the city's sanitary sewer system. (1) Adjustment Schedule. The implementation of Pass -Through Rates for any month associated with a change in Applicable Costs ("Cost Recovery") shall be placed into effect automatically and shall occur without a public hearing. Nothing herein shall preclude the city from making additional changes to the monthly sanitary sewer user rates for service. (2) Applicable Rates. The sewer base facility, sewer consumption charges, and Purchased Sewer Pass-through Rate referenced in subsection 110-167(a) shall be subject to Cost Recovery, (3) Applicable Costs. Only the following cost categories qualify as Applicable Costs for Cost Recovery: (i) All increases or decreases in the percentage charge of the Department of Environmental Resources Management. (ii) All increases or decreases in the application of any tax or tax equivalents, including any payment in lieu of tax imposed by the city on its sanitary sewer system. (iii) All other cost increases incurred by the sanitary sewer system as a result of any regulatory changes or requirements imposed by any regulatory agency having jurisdiction over the utility system operations (a "Regulator"). (4) Calculation of Pass -Through Factor, The Pass -Through Factor shall be calculated using the following formula: PTF = ARR/ER Where: PTF = The Pass -Through Factor used for Cost Recovery to determine the monetary adjustment in the Applicable Rates. The PTF represents the estimated annual. increase in the Applicable Costs, expressed as a percentage of the most recent historical revenues derived from the Applicable Rates for the most recently completed fiscal year. ARR = Additional Required Revenue equal to the estimated annual change in the Applicable Costs that will affect the overall cost of providing sanitary sewer system services as determined by the city. M. ER = The total actual revenues earned by the Enterprise System from the Applicable Rates for the sanitary sewer system as reported in the city for the most recently completed fiscal year. (5) Determination of Pass -Through Rates. The Pass -Through Rates shall be determined based on the Pass -Through Factor applied uniformly to the Applicable Rates in effect and shall be rounded to the nearest cent. The Pass- through application shall be based on the following formula: PTR = (AR)(1 + PTF) Where: PTR = The Pass -Through Rates that are to be placed in effect for the current fiscal year through application of the Pass -Through Factor. AR = The Applicable Rates in effect immediately prior to the application of the Pass -Through Factor. PTF = The Pass -Through Factor as determined by the city to recover the net change in Applicable Costs. Rate Indexing Effective for all bills rendered on or after October 1, 2025, and except as otherwise provided, the monthly user rates established in subsections 110-167(a) for the water system and 110-168(a) for the sanitary sewer system (collectively, the "applicable rates") as shown on Appendix A and as may be further adjusted automatically in the future by implementation of the provisions of this section and which are then in effect shall be increasedby the city each year by applying the price index factor established for that year in accordance with this subsection (the "price index factor") to the then applicable rates to offset the effects of inflation on the cost of operating and maintaining the system. The Rate Index shall never be less than 0.0%. All applicable rates so adjusted (the "indexed rates") shall be implemented by the city. (1) Adjustment schedule. Each implementation of indexed rates ("rate indexing") shall be placed into effect automatically and shall occur without a public hearing. Rate indexing shall not be employed more than once in any fiscal year. Any indexed rates based on the operating and maintenance expenses for the most recently completed fiscal year shall be implemented as of October 1 of the subsequent fiscal year. Nothing herein shall preclude the city from making additional changes to the water or wastewater rates for service. (2) Applicable rates. The water base facility charge and water consumption charges referenced in subsection 110-167(a) for the water system and sanitary sewer base facility charge and sanitary sewer consumption charges referenced in subsection 110-168(a) for the sanitary sewer system shall be subject to rate indexing. The purchased water- pass-through rate and -the purchased sanitary sewer pass-through rates as referenced in the respective subsections shall not be subject to rate indexing. M (3) Calculation of price index factor. The price index factor shall be determined based on the actual reported financial results as contained in the annual comprehensive annual financial report and the records for the most recently completed fiscal year preceding the determination of the rate index (the "calculation period"). By way of example, the rate index to be applied on October 1, 2017 would be based on the- actual financial results for the 12 months ended September 30, 2016. The price index factor shall be calculated using the following formula: PIF = ([OP- (PWE+PSE+PT)]*EPI)/[(ER-PTR)/ * (1/(1- (DF+T+O)))] Where: PIF = The price index factor used for rate indexing to determine the monetary adjustment in the applicable rates. The PIF represents the estimated increase in operation and maintenance expenses during the calculation period that is subject to inflation, expressed as a percentage of applicable rates revenues earned during the calculation period. The amount of the rate index increase is a component of any additional revenue required by the utility system to ensure compliance with the bond covenants and fiscal requirements of the utility system (the "additional required revenue"). OP = The total expenses, paid or accrued, for the operations, maintenance, and repair of the water and wastewater systems as reported in the comprehensive annual financial report and other financial records for the city for the calculation period after excluding: (a) allowances for depreciation and amortization expense: and (b) capitalized salaries and other overhead related to the city's capital improvement program (CIP). Such total expenses as adjusted for the stated exclusions are hereinafter referred to as the "operating expenses". PWE = That component of the operating expenses (OP) that represent the cost of purchased water service from WASD for the calculation period, adjusted to include the fee paid to the Department of Environmental Resources Management (DERM) which is based on a percent of rate revenues billed by the city for this component of expense. PSE = That component of the operating expenses (OP) that represent the cost of purchased sanitary sewer service from WASD for the calculation period, adjusted to include the fee paid to the Department of Environmental Resources Management (DERM) which is based on a percent of rate revenues billed by the city for this component of expense. PT = The sum of all other components of the operating expenses (OP) for the Calculation Period for which increases in those components may be recovered separately as a pass-through adjustment _pursuant to subsections 110-167(d) for the water system and 110-168(a) for the wastewater system. 06 EPI = The Consumer Price Index - All Urban Consumers. Miami -Fort Lauderdale -West Palm Beach (Series ID: CUURS35BSA0), as published by Bureau of Labor Statistics (the "effective price index") as reported for the month of April of the current year compared to the index reported for the immediately preceding month of April. By way, of example, the effective price index published by Bureau of Labor Statistics - All Urban Consumers, Miami -Fort Lauderdale, as of April 2015 was 245.195 and as of April 2016 was 248.741 or a change of 1.446% which shall be applied to the applicable operating expenses reported for fiscal year 2015. ER = The total actual revenues earned by the utility system from the applicable rates as reported in the comprehensive annual financial reports and other financial records for the calculation period. PTR = The total actual revenues earned by the utility system during the calculation period from the application of i) the purchased -water pass- through rate; ii) the purchased -wastewater pass-through rate: and iii) any other expense that was categorized as a pass-through expense and separately evaluated. (4) Price index calculation example. (i) An example of the calculation of the Price Index Factor based on reported fiscal year 2015 information is illustrated in the following table: 65 Line No. Formula Reference Amount Total Operating Expenses 1 OP $56,906,238 Less: Purchased Water Expenses 2 PWPTR $14,258,442 Purchased Wastewater Expenses 3 PSPTR 20,865,353 Other Pass-through Expenses 4 PT 0 Adjusted Operating Expenses 5=1-2-3-4 $21,782,443 Effective Price Index EPI April 2015 CPI Index 6 245.195 April 2016 CPI Index 7 248.741 Change in CPI Index 8=7-6 3.546 Annual Percent Change 9=8/6 1.44% Additional Required Revenue (Numerator) 10=5*9 $313,667 Actual Applicable Rate Revenues Earned 11 ER $73,291,986 [Less. PTR ( Purchased -Water Pass=Through Rate Revenue F12 $15,498,307 65 Purchased -Sanitary Sewer Pass -Through Rate Revenue 13 22,679,732 Applicable -Rate Revenue (Denominator) 14=11-12-13 $35,113,974 Price Index Factor before Adjustments 15=10/14 0.89% Adjustments: Department of Environmental Resources Management 16 DF 8.00% Taxes and Tax Equivalents 17 T 0.0001 Other Adjustments 18 O 0.00% Adjustment Factor=1/(1-(D+T+O)) =1/0.92 19 1.08696 Price Index Adjustment 20=15*19 PIF 0.97% (ii) Determination of indexed rates. The indexed rates shall be determined based on the price index factor applied uniformly to the applicable rates in effect and shall be rounded to the nearest cent. The determination shall be based on the following formula: IR = (AR)(1 + PIF) Where: IR = The indexed applicable rates that are to be placed in effect in the current fiscal year through application of the price index factor. AR = The applicable rates in effect immediately prior to the application of the price index factor. PIF = The price index factor determined for the calculation period. SECTION 3. REPEALER. All ordinances or parts of ordinances in conflict herewith be and the same are hereby repealed. SECTION 4. SEVERABILITY. If any section, subsection, clause or provision of this Ordinance is held invalid, the remainder shall not be affected by such invalidity. SECTION 5. CODIFICATION. It is the intention of the Mayor and City Commission of the City of Miami Beach, and it is hereby ordained that the provisions of this ordinance shall become and be made a part of the Miami Beach City Code. The sections of this ordinance may be renumbered std or relettered to accomplish such intention, and the word "ordinance" may be changed to "section," "article," or other appropriate word. SECTION 6. EFFECTIVE DATE. This Ordinance shall take effect on January 1, 2021, and the revised rates shall be applied to all bills rendered on or after the effective date. PASSED and ADOPTED this q day of DI e C" bP- (2020 ATTEST: 2 I z� �-I Rafael E. Granado, City Clerk Underline denotes additions StdkethFGugh denotes deletions (Sponsored by David Richardson) Dan Gelber, Mayor 651 APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION -�-- 19'-- ZC) c�V auaRey RA -f Date MIAMIBEACH C TINAN,CIAL FEASIBILITY'Or- .$85 MILLION "NEW MONEY" WATER AND SEWER REVENUE'BO' -4=- GovRates www.crovrates.com 632 CONTENTS ;EXECUTIVE SUMMARY: Background.......................................................................................................................................1 Water and Sewer Capital Needs................................................................................2 Exhibit 1: Summary of Water and Sewer Capital Needs ($ Millions). 2 Sample Pictures of Miami Beach Utility Renewal and Replacement Needs.........................3 Financial Metrics with Issuance of Series 2025 Bonds ...................... 3 Exhibit 2: Projected Senior Lien Debt Service Coverage and Unrestricted Cash Balances.........................................................................................3 Recommendations.................................................................................................................... 4 Requested Finance and Economic Resiliency CommitteeAction.............................................................................................................4 SUPPORTING TABLES: Table 1: Estimated Multi -Year Capital Improvement Program ..................... 5 Table 2: High -Level Water and Sewer System Financial Overview ............. 6 633 Financial Feasibility of $85 Million "New Money" Water and Sewr Revenue Bonds MIAMIBEACH April 19, 2024 EXECUTIVE SUMMARY Financial Feasibility of $85 Million "New Money" Water and Sewer Revenue Bonds Background The City of Miami Beach (the "City") last issued "new money" water and sewer bonds in 2017. The Water and Sewer Revenue and Revenue Refunding Bonds, Series 2017 (the "Series 2017 Bonds") had a principal amount of $115,180,000, which consisted of $85,000,000 in proceeds to fund capital projects, with the remainder of the principal dedicated to refinance old bond issues and pay for issuance costs. The proceeds from the Series 2017 Bonds are now fully appropriated, and the City's water and sewer utility (the "Utility") is unable to fund certain critical needs projects without additional debt proceeds. A second "new money" bond issue has been in the Utility rate and financial plans since 2017 and is now contemplated in 2025 (the "Series 2025 Bonds"). Historical adopted rate adjustments have preserved the ability to issue the second bond issue, which now contemplates financing approximately $84 million in identified capital needs. Historical. rate adjustments have included: > Automatic pass-throughs of Miami -Dade County wholesale water and sewer rate increases. ➢ Adjustments adopted pursuant to recommendations of a formal rate study. y Automatic Consumer Price Indexing adjustments in absence of formal rate study recommendation. , In its 2023 credit report, Moody's (one of the three major bond rating agencies) mentioned the automatic rate increase provisions as a credit strength for the Utility. The last formal rate study for the Utility was completed in December 2020 (the "2020 Rate Study") in the middle of the COVID-19 pandemic when the City was experiencing an economic decline (e.g., reduced tourism, loss of customers, etc.) and the Utility's revenues were lower. The 2020 Rate Study assumed economic recovery within three years. The rate ordinance adopted pursuant to the 2020 Rate Study recognized overall annual adjustments of 0% in Fiscal Year 2021, 1.0% in Fiscal Year 2022, 3.6% in Fiscal Year 2023, 3.6% in Fiscal Year 2024, and 3.7% in Fiscal Year 2025 in addition to the pass-through adjustments. From December 2019 to December 2020, the Miami -Fort Lauderdale -West Palm Beach Consumer Price Index ("CPI") increased by 1.1 %. At that time, there was no way of knowing that this local index would increase by 634 Financial Feasibility of $85 Million "New Money" MIAMIBEACH Water and Sewr Revenue Bonds a cumulative 24.4%, or an average 7.5% per year, from December 2020 to December 2023. The water and sewer rate study assumed the Congressional Budget Office's (most current at the time) published national CPI projections of 2.3% to 2.6% per year. As such, the City's actual local CPI increases have been an average 5% more per year than the 2020 national projections. Florida's inflation is currently outpacing the national trends. The historical rate adjustments have not kept up with all of the Utility's cost increases, but no water and sewer rate adjustments are anticipated to be needed to issue $85 million principal amount of water and sewer revenue bonds (about $84 million of project costs plus issuance costs). However, $85 million is close to the maximum amount that could be issued without negatively affecting the Utility's "AA" credit rating. Future user rate adjustments will be primarily driven by how/when/if the City addresses the identified water and sewer capital needs above the $84 million. Water and Sewer Capital Needs The Utility has identified capital needs of about $389 million as shown in the following Exhibit 1 and as detailed in Table 1 at the end of this executive summary. Capital Needs Critical Needs Projects $ 55.0 $ 19.3 $ 60.0 $ 40.7 $ 5.0 $ 27.1 $ 207.0 Neighbohood Improvement Projects - - 65.6 51.5 8.9 - 125.9 Other Projects - 9.8 23.7 5.4 3.2 1.8 43.8 Departmental Capital 7.2 0.6 1.2 1.8 0.6 0.7 12.2 Total Capital Needs 62.3 5 29.7 $150.4 S 99.5 S 17.6 S 29.5 S389.0 Funding Sources Series 2025 Bonds $ 55.0 $ 29.0 $ - $ - $ - $ - $ 84.1 Cash -Funded 7.2 0.6 34.8 1.8 0.6 0.7 45.8 Unfunded - - 115.6 97.6 17.0 28.8 259.1 Total Funding Sources 62.3 29.7 150.4 99.5 17.6 29.5 389.0 These capital needs consist of critical needs projects, neighborhood improvement projects, other projects, and departmental capital (vehicles, equipment, etc.) The Finance and Economic Resiliency Committee (the "FERC") has been previously briefed on these needs. The Series 2025 Bonds would finance the first two years of critical needs projects and other projects. Implementation of the critical needs projects is a public safety priority. These projects are primarily replacements or rehabilitations of utility assets. Some of the Utility's infrastructure dates back to the 1930's and 1940's. Sample pictures of the Utility's renewal and replacement needs follow. 635 2 Financial Feasibility of $85 Million "New Money" MIAMIBEACHWater and Sewr Revenue Bonds SAMPLE PICTURES OF MIAMI BEACH UTILITY RENEWAL AND REPLACEMENT NEEDS Financial Metrics with Issuance of Series 2025 Bonds With the issuance of the Series 2025 Bonds, the Utility is anticipated to meet target debt service coverage and cash levels and to maintain its existing "AA" bond rating as shown in the following Exhibit 2. Exhibit 2• Projected Senior Lien Debt Service Coverage and Unrestricted Cash Balances Projected Senior Lien Debt Service Coverage 260% 25146 [� I" =11 150% o% 2024 2025 '.026 2027 2028 �Cdcdated Stotur tlen Debt Service Coinage —Tarpt So1Q 11. Debt Service Co w -v (190%) — Regdred Smim lieu Debt SemeeCoverage (110%) aew.0 I S120.0 200�e 8g 5100.0 a SSM 560.0 re stag e S20.c 2029 Projected Ending Unrestricted Cash Balances �Eadlag Vamtrlcted Cmh Uses —T.V1- 0.,V— or Operm/aa Eap-- L-, %*—.Cah Item. Sack m Depred tl- Senior lien debt service coverage is determined by the following formula: Senior Lien Debt Service Coverage= Gross Revenues - Operating Expenses Less Non -Cash Items Such as Depreciation Less Administrative Fees Annual Bond Debt Service The above_graphs do not reflect funding of about $259 million of identified water and sewer capital needs through Fiscal Year 2029. More details of our analysis are shown in Table 2 at the end of this executive summary. 636 Financial Feasibility of $85 Million "New Money" Water and Sewr Revenue Bonds Recommendations MIAMIBEACH Based on discussions with the City staff and our analyses, GovRates recommends that: ➢ The City Commission should authorize an $85 million issuance of water and sewer bonds to enable the Utility to continue funding critical needs projects that are considered a public safety priority. The issuance of the Series 2025 Bonds does not require user rate adjustments above what have already been adopted. ➢ The City should perform an updated water and sewer rate study prior to issuing the bonds. During the rate study, the City Commission can determine how/when/if the City addresses additional capital needs above the $84 million. For the Utility to maintain the existing "AA" bond rating, the Official Statement for the Series 2025 Bonds should show a fully funded five-year rate and financial plan under which the Utility continues to meet the target coverage and cash levels. All necessary rate adjustments should already be adopted. Requested Finance and Economic Resiliency Committee Action The City staff requests that the FERC approve the recommendations as contained in this Executive Summary and supporting documentation such that the City can move forward with presenting the recommendations for City Commission consideration. 637 4 Table 1 City of Miami Beach, Florida Water and Sewer System Estimated Multi -Year Capital Improvement Program CAPITAL IMPROVEMENT PROGRAM Departmental Capital 1 Vehicles and Equipment - Water S 898,096 S S 898,096 S 162,000 S 5,800 S 1,030,000 S 105,200 S 61,100 $ 2,262,196 2 Vehicles and Equipment - Sewer 3,359,870 - 3,359,870 - 708,100 376,600 42,750 224,800 4,712,120 3 Other Departmental Capital - Water 2,948,100 2,948,100 475,000 475,000 400,000 400,000 400,000 5,098,100 4 Other Departmental Capital - Sewer 24,000 - 24,000 - 24,000 24,000 24,000 24,000 120,000 5 Subtotal - Departmental Capital S 7,230,066 S - S 7,230,066 S 637,000 S 1,212,900 $ 1,830,600 S 571,950 S 709,900 $ 12,192,416 Major Capital Projects 6 SCADA & PLC Critical Needs S - S - S - $ 50,000 S - S - S - S - S 50,000 7 SEWER PUMP STATION ODOR CONTROL Critical Needs - - 1,500,000 1;500,000 - - 3,000,000 8 WASTEWATER STATIONS REHABILITATION Critical Needs 22,047,319 - 22,047,319 6,775,335 1,000,000 10,000,000 39,822,654 0) WASTEWATER MANHOLE REHABILITATION Critical Needs 405,235 405,235 3,500,000 1,500,000 1,000,000 1,000,000 1,000,000 8,405,235 CO WATER & WASTEWATER MAINS AND REHAB Critical Needs 32,568,580 - 32,568,580 11,959,792 37,083,145 37,725,881 4,001,122 7,055,675 130,394,195 CO WATER PUMP STATIONS IMPROVEMENTS Critical Needs 4,075 - 4,075 2,248,421 13,094,801 1,000,000 9,000,000 25,347,297 12 1 ST STREET-ALTON RD TO WASHINGTON Neighborhoods - - - - 35,795,600 - - - 35,795,600 13 NORTH BAY RD AND LAKEVIEW SEWER COLLECTION Neighborhoods 14,005,000 - - - 14,005,000 14 WEST AVENUE PH III Neighborhoods 15,766,604 - - - 15;766,604 15 NORMANDY ISLES A Neighborhoods - - - 8,851,800 - 8,851,800 16 NORTH SHORE D - TOWN CENTER Neighborhoods - - 51,493,579 - - 51,493,579 17 17TH STREET IMPROVEMENTS PHASE I Other - 18,400,000 - - - 18,400,000 18 DERM & EPA CONSENT DECREE - Water/Sewer Fund Other 1,359,370 1,000,000 1,000,000 1,000,000 1,000,000 5,359,370 19 PUBLIC WORKS FACILITY -PUMP STATION Other - - 299,000 - 2,691,000 - - 2,990,000 20 STORMWATER CRITICAL NEEDS Other - 184,000• 2,156,000 1,712,000 2,178,000 778,000 7,008,000 21 FDOT UTILITIES RELOCATION Other - 7,935,000 1,200,000 - - - 9,135,000 22 COLLINS PARK ANCILLARY IMPROVEMENTS Other - - 946,089 - - - 946,089 23 Subtotal - Major Capital Projects $ 55,025,208 $ S 55,025,208 $ 29,035,583 S 149,222,574 $ 97,622,460 $ 17,030,922 S 28,833,675 $ 376,770,423 24 Total Capital Improvement Program $ 62,255,274 $ $ 62,255,274 $ 29,672,583 S 150,435,474 $ 99,453,060 $ 17,602,872 $ 29,543,575 ' S 388,962,839 ' Table 2 City of Miami Beach, Florida Hiah-Level Water and Sewer System Financial Overview Line Ilisluricid Fiscal Year Ended Seplembtr 30, Fiscal Year Ending September 30, No. Description 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 1 1 F0yer311 Rate Adjustments 11 J 0.00%u - 6 68% ' 3.86% 3 92% 3 98 /o v - 4.04%� 2 Net Revenues Without Administrative Fee; S 28,042,537 S 29,155,164 S 28,846,948 $ 28,504,994 S 28,127,926 $ 27,714,305 3 Net Revenues With Administrative Fees $ 25,078,537 S 26,042,964 S 25,579,038 S 25,073,793 S 24,525,166 S 23,931,407 Automatic Adjustments: in Absence of Rate Study Recommendatiot 4 Estimated Pass -Through Adjustment (PTA) (2. 5 Estimated Consumer Price Index Adjustment on Other Operating Expenses (2 6 Total Adopted Automatic Adjustments Adopted Multi -Year Plan; 7 Estimated Pass -Through Adjustment (PTA) (2: 8 Additional Adopted Amoum 9 Total Adopted Multi -Year Plan Debt Service Coverage Requirement (110%) Met? I Available for. Pays -You -Go Capital Funding After - it of Operating Expenses and Debt Service Unrestricted Cash and Cash Equivalents Balance 13] s I Cash Balance (Recognized. Cash Target) Balance Target Met? 2.98% 2.96% 3'.03% 3.09% 3.15% 0.87% 0.90% 0.89% 0.89% 0.90% 3.86% 3.86% 3.92% 3.98% 4.04% 2.98% 3.70% 6,68% ;1% '260%" 187% 205% 203% Yes Yes Yes Yes Yes S 13,892,487 1 14,844,414 S. 10,130,488 1 111,193,993' S 10,649,366' S 10,054,857 S 109,131,274 S 123,338,688 S 98,646,858 - S 108,010,251 S 118,087,667 S 127,432,623 S 87,270,000 $ 92,603,133 S 97,498,458 , $ 102,674,746 5 108,148,576, 5113,937,596 Yes Yes Yes Yes ' Yes Yes 18 Starting Cash and Cash Equivalents Balance LS 102,_ 6 ,; 53j $. 109,131,274 S 123,338,688 S 98,646,858 S 108,010,251 $ 1.18,087,667 19 Year -End Surplus / (Deficiency', 6,662,421 14,207,414 (24,691,831) 9,363,393 10,077,416 9,344,957 20 Operating Expenses: 21 (Does Not Include Depreciation and Amortization Expenses: Personal Services S 7,584,311 $ 6,933,674 S 8,516,370 $ 7,197,520 S 7,973,287 1 S '8,691,000_ S 9,168,900 _ S 9,675,030 S 10,211,235 S 10,779,49E `S 11,381,939 22 Operating Supplies 382,852 210,706 26,443 129,119 224,509 I 145,300 149,759 154,357 159,098 163,986 169,028 23 Contractual Services 46,109,389 40,721,413 44,774,995 45,568,217 56,108,003' i 63,810,200 68,141,215 71,998,785 76,082,707 80,406,408 84,984,174 _ 24 Utilities 1,246,788 1,151,168 1,165,410 1,108,959 1,134,669 I 1,207,000 1,252,290 1,299,302 1,348,102 1,398,759 1,451,344 25 Internal Charges 3,450,731 3,222,000 3,480,587 4,333,618 4,212,000 4,286,000 4,500,300 4,725,315 4,961,581 5,209,660 5,470,143 26 Administrative Fees 1,768,000 2,400,000 2,596,000 2,856,000 2,518,000 i 2,964,000 3,112,200 3,267,810 3,431,201 3,602,761 3,782 899 27 Other Operating 865,668 1,934,776 1,444,349 2,199,736 2,661,924 3,022,500 3,134,469 3,233,859 3,336,823 3,443,507 3,554,071 28 Contingency 3,144,000 3,144,000 3,144,000 3,144,000 3,144,000 3,144,000 29 _ _ Operaling Expenses - �^ � % S 61,407,739 S 56,573,737 S 62,004,154 S 63,393,169 S 74,832,392 S 87,270,000 S 92,603,133 S 97,498,458 S 102,674,746 S 108,148,576 S 113,937,596 30 _Total _ _ __ _ Increase I (Decrease) - Percent -7.9% 9.6% 2.2% 18.0% 16.6% 6.1% 5.3% 5.3% 5.3% 5.4% 31 Current Expenses for Coverage Purposes S 59,639,739 S 54,173,737 S 59,408,154 S 60,537,169 S 72,314,392 S 84,306,000 $ 89,490,933 S 94,230,648 S 99,243,546 S 104,545,815 S 110,154,698 (Operating Expenses Less Administrative Fees; Five -Year Historical Growth Raie in Total Operating Expenses 5.1% 3.7% <= Contingency as percent of other operating expenses. Services Five -Year Historical Growth Rate in Contractual Services, 5.00/6 - - - 32 SenrLlen'Deb'(4jY_ r -- J K06- — -1-,-19s,-5§b'_ , 1 3,$79)00 S 13,675.800 S 13,876,5$0 33 fSRF Loans J4J, -- --' - - - - 34 _-----�__� _ _ _- --- Total Debt Service $ 11,186,050 $ 11,198,550 S 15,448,550 S 13,879,800 S 13,875,800 S 13,676,550 Other Revenue Requirements - 35 '__Pay, As You_Go CupituI .Improvemeo_t Program 36 Total Other Revenue Requirements I S� 7 i370,0_66 S 637,000 S 3A,82?,318 5 1,830.600 S 571,950 5 7VO 1 S 7,230,066 S 637,000 S 34,822,318 S 1,830,600 S 571,950 S 709,900 37 Gross Revenue Requirements S 105,686,116 S 104,438,683 S 147,769,326 $ 118,385,146 $ 122,596,326 S 128,524,046 Table 2 City of Miami Beach, Florida Hieh-Level Nater and Sewer System Financial Overview Historical Fiscal Year Ended September 30. Fiscal Venr Ending Seplember 30. No. Descriplitin 2019 2020 2021 2022 2023 2024 21125 2026 2027 2028 2021) Less Income and Funds from Other Sourcet ----3- __ _ _ __ 38 Scwcr Tces -Outside ; $ 3,328,990 �S 3,429,000 S 3,531,870 S 3,637,626 S -3,796,9b1 5 3,859,37Q_.5 39 i OtherOperatlngRevenuc __-- _ 1,806,123 I 1,479,000 1,458,090 1,473,633 1,489,642 1506,131 1,523,1151 40 Unrestricted Interest Income 3,120,572 2,776,000 1,000,000 2,000,000 2,000,000 2,000,000 2 000,000 I 41 Net Revenue Requirements Revenue from Existing Rates 42 1 -Water User Rntc Revenue --Retail 43 Sewer User Rate Revenue- _Retell 44 Total System Revenue - Retall _ 45 Prior Year Rate Adjustment 46 Total Applicable Rate Revenue 47 Rate Adjustments 48. Effective Months 49 Percent of Current Year Effective 50 Revenue from Current Rate Adjustment w/ Effective Month: 51 Total Revenue w/ Effective Months S 39,884,406 59,021,059 S 98,905,465 S 98,002,116 $ 97,448,723 $ 140,657,868 S 111,148,544 S 115,230,825 S 121,025,790 79 $ 43,872,847` S 43,872,8'47 60.791.690 60.791.690 6,991,600 11,301,500 15,847,400 20,643,704 S 104,664,537 S 104,664,537 S 111,656,137 S 115,966,037 S 120,511,937 $ 125,308,241 0.00% 6.68% 3.86% 3.92% 3.98% 4.04% 12 12 12 12 12 12 100.0% 100.0% 100.0% 100.0% 10D.0% 100.0% - S 6,991,600 $ 4,309,900 S 4,545,900 S 4,796,304 S 5,062,496 S 98,905,465 S 104,664,537 S 111,656,137 S 115,966,037 S 120,511,937 S 125,308,241 $ 130,370,737 50) Revenue Surplus/(Deficiency) Under Proposed Rates S 6,662,421 S 14,207,414 $ (24,691,831) S 9,363,393 S 10,077,416 S 9,344,957 510h Revenue Surplus/(Deficiency) as % of Revenue 6.4% 12.7% -21.3% 7.8% 8.0% 7.2% _0 Footnotes: [ 1 ] Should include estimated effects of pass-through and Consumer Price Index adjustments. [2] Estimated rate adjustments due to pass-through and Consumer Price Index adjustment clauses: Pass -Through Adiustmcnt to dractual Services -Wholesale Water Services (Does Not Include_ True -Up) _ Percent Increase ,Contractual Services^ Wholesale Sewer Services (Docs Not Include True_Up)_ Percent Increase Total Contractual Services DERM Fee (%) Total Contractual Services with DERM Fee Total Increase in Cost User Rate Revenues Before Pass -Through Adjustment Clause Estimated Rate Adjustment Due to Pass -Through Adjustments Consumer Price Indcx Adiustmcnt 1.1 ,Applicable 0peratln6 Expenses fur Consumer P_ rice Inde_z Adjustment _ _ _ Percent Increase "Sst meted Consumer Price1ndex Adjustment Additional Required Revenue (Numerator) Actual Applicable Rate Revenues Earned Less Purchased Water and Sower Rate Revenue Applicable Rate Revenue (Denominator) Price Index Factor Before Adjustment S__y16,105,000 S _ 17,071 300_ S _ 18,095,578 S-19,181 313_ S 20 332,191 S 21,552,123! $ 32,816,000_ S _ 34,784,960 S_ 36_,872,058 S__39_,084,381 -S _ 41,429,4f4Y S__ d3,9I5,211! 6.0% 6.0%T 6.0% 6.0% 6.0% S 48,921,000 S 51,856,260 S 54,967,636 S 58,265,694 S 61,761,635 S 65,467,333 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% S 52,043,617 S 55,166,234 S 58,476,208 S 61,984,781 S 65,703,867 $ 69,646,099 S 3,122,617 S 3,309,974 S 3,508,572 S 3,719,087 $ 3,942,232 S 104,664,537 S 111,656,137 S 115,966,037 S 120,511,937 S 125,308,241 2.98% 2.960/6 3.03% 3.09% 3.15% I_Sy_25371,134,S�31,264,000_ S 33,106,497 5,34,5 15,296 S_35,496,652 S 98,905,465 S 52,620,920 S 56,489,903 S 57,489,829 S 58,527,156 0.9% 1.8% 1.8% 1.8% 1.8% 4.3% 4.3% _ -993,195 S 862,721 S 937,920 S S 1,035,459 S 1,079,900 S 98,905,465 S 104,664,537 S 111,656,137 S 115,966,037 S 120,511,937 S - S (52,043,617) S (55,166,234) S (58,476,2011) S (61,984,781) S 98,905,465 S 52,620,920 S 56,489,903 S 57,489,829 S 58,527,156 0.9% 1.8% 1.8% 1.8% 1.8% Table 2 City of Miami Beach, Florida Hiah-Level Water and Sewer System Financial Overview DERM Fee (%) Price Index Adjustment Estimated Overall Revenue. Adjustment 6.0% 6.0% 6.0% 6.01/6 6.0% 0.9% 1.91/6 1.9% 1.9% 2.0% 0.87% 0.90% 0.89% 0.89% 0.90% ['] This adjustment is calculated based on the actual results published in the latest Annual Comprehensive Financial Report. The Fiscal Year 2024 adjustment is calculated based on Fiscal Year 2022 results, the Fiscal Year 2025 adjustment is calculated based on Fiscal Year 2023 results, etc. [3] Does not include cash balances in impact fee funds or construction funds from debt financing. [4] Breakdown of debt service: Description Water and Sewer Revenue and Revenue Refunding Bonds, Series 2017 Water and Sewer Revenue Refunding Bands, Series 2021A Assumed Water and Scwer-Revenue Bond s,.Ser tes 2025__ Total [5] Represents capital needs no► funded through debt, impact fees, surtaxes, grants, or developer contributions. M S 6,640,400 S 10,222,900 $ 10,227,400 $ 8,658,650 S 8,654,650 S 8,655,400 4,545,650 975,650 975,650_ 975,650 _ 975,650 -975,650 - - �- -� 4,245,500 4,245,500 - 4,245,500 Y 4,245.500 $ 11,186,050 $ 11,198,550 $ 15,448,550 S 13,879,800 S 13,875,800 $ 13,876,550 RESOLUTION NO, 2020-31211 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS FEBRUARY 28, 2020 MEETING, TO ACCEPT THE FIVE-YEAR CRITICAL NEEDS CAPITAL PLAN FOR THE CITY'S WATER AND WASTEWATER SYSTEM, TO APPROVE THE USE OF THE $24 MILLION AVAILABLE FROM BOND PROCEEDS, AND TO COMMENCE A RATE STUDY OF THE WATER AND WASTEWATER UTILITY TO DETERMINE FINANCIAL CAPACITY FOR THE WATER AND WASTEWATER WORK ASSOCIATED WITH THE JACOBS ENGINEERING NEIGHBORHOOD PRIORITIZATION AND THE REMAINING $61 MILLION DOLLARS OF CRITICAL NEEDS. WHEREAS, public infrastructure serves as the backbone of a well-run municipality, and typically, as infrastructure ages and the needs of a growing city expand, existing infrastructure requires rehabilitation and upgrades; and WHEREAS, the failure to reinvest in utility infrastructure has resulted in neighboring communities having had numerous water main breaks and sewerage spills resulting in one community being fined $1.8 million by state regulators; and WHEREAS, recognizing the increasing need to strategically invest in the water and sewer utility, the Public Works Department tasked Hazen and Sawyer with developing a Water and Sewer Master Plan that prioritizes projects over 25 years; and WHEREAS, at its October 23, 2019 Sustainability and Resiliency Committee ("SRC') meeting, Public Works staff presented to the Committee a progress update on the Water and Sewer Master Plan (the "Master Plan"); and WHEREAS, the staff stated it has reviewed the Master Plan and was ready for the Finance and Economic Resiliency Committee ("FERC') (formerly the Finance and Citywide Projects Committee) to review and to further discuss a financing plan; and WHEREAS, the SRC Committee made a motion to refer the Master Plan to the FERC to identify funding sources; and WHEREAS, the Master Plan reflects the utility's needs as defined by the Water and Sewer Master Plans and internal renewal and replacement plans; and WHEREAS, the plan accounts for an investment of $122.3 million, of which approximately $37.5 million is -already funded; -and 642 WHEREAS, an additional $24 million of unencumbered water and sewer bond funds have been identified — if these funds were appropriated toward the proposed five- year critical needs capital plan, there would remain a funding gap of approximately $61 million; and WHEREAS, when planning the sequencing of projects, staff often takes into account work within the projects' proximity and, when beneficial, projects are grouped into larger neighborhood jobs; and WHEREAS, approximately $37 million of the overall $122.3 million plan have been identified as independent projects — independent projects generally include aerial pipe crossings, subaqueous pipelines, or other work that lies outside neighborhood boundaries; and WHEREAS, thus, some projects within the Water and Sewer Critical Needs Five Year Capital Plan may fall within the boundaries of possible neighborhood jobs; and WHEREAS, however, due to the criticality of these projects, the Administration may proceed with their design and/or construction prior to the start of a neighborhood job; and WHEREAS, it is important to note that this plan only includes the critical needs defined in the Master Plan and does not encompass general water and sewer work, which may occur as part of the City's neighborhood jobs; and WHEREAS, the cost and scope of water and sewer work within neighborhood jobs will be quantified upon completion of the Jacobs Engineering Neighborhood Priority List; and WHEREAS, in order to facilitate further discussion, the Water and Sewer Five Year Priority Lists were presented to the FERC at its February 28, 2020 meeting, and within the lists, a column identified which projects are independent from larger neighborhood jobs; and WHEREAS, the estimates presented were for planning and budgeting purposes; the actual costs will be determined when the projects are fully designed and bid; and WHEREAS, FERC made a motion to proceed to the City Commission to seek acceptance of the five-year critical needs capital plan for the City's water and wastewater system, and approval of the $24 million available from bond proceeds subject to a future appropriation; and WHEREAS, additionally, FERC recommended commencing a rate study of the water.and wastewater utility to determinefinancial capacity for the water and wastewater 643 work associated with the Jacobs Engineering neighborhood prioritization and the remaining $61 million dollars of critical needs. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby accept the recommendation of the Finance and Economic Resiliency Committee at its February 28, 2020 meeting, to accept the five-year critical needs capital plan for the City's water and wastewater system, to approve the use of the $24 million available from bond proceeds, and to commence a rate study of the water and wastewater utility to determine financial capacity for the water and wastewater work associated with the Jacobs Engineering Neighborhood Prioritization and the remaining $61 million dollars of critical needs. PASSED and ADOPTED this I- day of ArCk , 2020. ATT,/6 1 RA AEL E. GRANA150, CITY CLERK DAN GELBER, MAYOR 644 APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION P, City Alto Date Resolutions - C7 V MIAMIBEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Jimmy L. Morales, City Manager DATE: March 18, 2020 SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS FEBRUARY 28, 2020 MEETING, TO ACCEPT THE FIVE-YEAR CRITICAL NEEDS CAPITAL PLAN FOR THE CITY'S WATER AND WASTEWATER SYSTEM, APPROVE THE USE OF THE $24 MILLION AVAILABLE FROM BOND PROCEEDS; AND TO COMMENCE A RATE STUDY OF THE WATER AND WASTEWATER UTILITY TO DETERMINE FINANCIAL CAPACITY FOR THE WATER AND WASTEWATER WORK ASSOCIATED WITH THE JACOBS ENGINEERING NEIGHBORHOOD PRIORITIZATION AND THE REMAINING $61 MILLION DOLLARS OF CRITICAL NEEDS.. The Administration recommends acceptance of the five-year critical needs capital plan for the CWs water and wastewater system, and approval of the $24 Million available from bond proceeds, subject to a future appropriation. Additionally, the Administration recommends commencing a rate study of the water and wastewater utility to determine financial capacity for the water and wastewater work associated with the Jacobs Engineering neighborhood prioritization and the remaining $61 Million dollars of critical needs. BACKGROUNDIHISTORY Public infrastructure serves as the backbone of a well -fun municipality. Typically, as infrastructure ages and the needs of a growing city expand, existing infrastructure requires rehabilitation and upgrades. Such is the case with the City's water and sewer utility. Recognizing the increasing need to strategically invest in the water and sewer utility, the Public Works Department tasked Hazen and Sawyer with developing a Water and Sewer Master Plan that prioritizes projects over 25 years. At its October 23, 2019 Sustainability and Resiliency Committee (SRC) meeting, Public Works --staff provided the members of the Committee a progress update on the -Water -and -Sewer Master Plan. The Administration stated it has reviewed the plan and was ready for the Finance and Economic Resiliency Committee (FERC) (formerly the Finance and Citywide Projects Page 545 of 1097 645 Committee) for review and to further discuss. a financing plan. The SRC Committee made a motion to refer the Water and Sewer System Master Plan to the F ERC to identify funding sources. ANALYSIS The proposed five year critical needs capital plan for the City's water and wastewater system is summarized below. Capital Project PROJECT TITLE FY20 Est. Cost FY21 Esti Cast FY22 Est Cost Fy23 Est. Cost FY24 Est_ Cost Total Water & Wastewater Mains and Rehab $ 16,93,000 $ 10,271,855 • $ 14,214,469 $ 15,441,872 $ 15,268,653 $ 71,295,848 Water Pump Station Improvements $ 5,592,900 $ 4,710,396 is 10,303,296 Wastewater Stations Rehab. $ 11,103,400 $ 5,209,019 ! I $ 16,312,419 Valve Assessment & Replacement Program $ 900,000 S 927,000 $ 954,810 • $ 2,781,810 Sewer Pump Station Odor Control S 850,600 $ 850,600 CADA & PLC (W&5 only) $ 1,625,250 $ 1,625,250 Wastewater Manhole Rehab. $ 115001000 $ 1,545,000. $ 1,591,350 ' S 1,639,091 $ 1,688,263 ° 5 7,963,704 Water Meter Replacement i $ 11,104,893 I $ 11,104,893 TOTAL $ 122,237,819 This plan reflects the utilitys needs as defined by the Water and Sewer Master Plans and internal renewal and replacement plans. As seen above, the plan accounts for an investment of $122.3 Million, of which approximately $37.5 Million is funded. An additional $24 Million of unencumbered water and sewer bond funds have been identified. If these funds were appropriated toward the proposed five year critical needs capital plan, there would remain a funding gap of approximately $61 Million. When planning the sequencing of projects, staff often takes into account work within the projects' proximity and, when beneficial, projects are grouped into larger neighborhood jobs. Approximately $37 Million of the overall $122.3 Million plan have been identified as -independent projects. Independent projects generally include aerial pipe crossings, subaqueous pipelines, or other work that lies outside neighborhood boundaries. Thus, some projects within the Water and Sewer Critical Needs Five Year Capital Plan may fall within the boundaries of possible neighborhood jobs. However, due to the criticality of these projects, the Administration may proceed with their design and/or construction prior to the start of a neighborhood job. It is important to note that this plan only includes the critical needs defined in the Water and Sewer Master Plans and does not encompass general water and sewer worts, which may occur -as' part of- the City's neighborhood jobs. The cost and scope -of water and- sewer work within neighborhood jobs will be quantified upon completion of the Jacobs Engineering Neighborhood Priority List. Page 546 o 1097 In order to facilitate further discussion, the Water and Sewer Five Year Priority Lists are attached herein. Within the fists, a column identifies which projects are independent from larger neighborhood jobs. The estimates presented herein are for planning and budgeting purposes; the actual costs will be determined when the projects are fully designed and bid. Regionally then: is a growing need to reinvest in utility infrastructure. The failure to reinvest in utility infrastructure has resulted in neighboring communities having had numerous water main breaks and sewerage spills resulting in one community being fined $1.8 million by state regulators. These projects are needed to reduce the risk of similar events happening in the City of Miami Beach. At its February 28, 2020 meeting, the Finance and Economic Resiliency Committee made a motion to proceed to the full Commission to seek acceptance -of the five-year critical needs capital plan for the City's water and wastewater system, and approval of the $24 Million available from bond proceeds subject to a future appropriation. Additionally, the Committee recommended commencing a rate study of the water and wastewater utility to determine financial capacity for the water and wastewater work associated with the Jacobs Engineering neighborhood prioritization and the remaining $61 Million dollars of critical needs. CONCLUSION The Administration recommends accepting the recommendation and adoption of the Resolution. Applicable Area Citywide Legislative TrackhM Public Works ATTACHMENTS: Description Does this item utilize GA. Bond Funds? 2T o Water and Sewer System priority lists Page 547 of 1097 647 - Water System Critical Needs Priority List ProectName independent Pro ect location SCRInDate Tobi W-2 Booster Station PIpInst Rehabilitation Replacement of WMaerial crossings venetian Isles ✓ ✓ 75th Street and Dickens Ave Venetian Isles 2020 2020 S L200 000.00 5 4,420,000.00 RehabilitationofWMaerial crossings artMxArthur ✓ MacArthur Bridge 2020 S 2,27L478.00 Water Main PoF/CoF Priori 1 30 -Inch FM Alton Rd and 41st St., others.TBD 2020 $ 25,127,797.70 Fire Flow Project 1 , loth Streetbetween Lenox Ave and Washington Ave. 2020 1 S 520.000.00 • Fire Flow Project 3 _ IMeridian Awe and 13th Street 2020 S 250.000.00 Fire Flow Pro-era5 Locations vary 2020 S 150.000.00 11 Meter Replacement ✓ Ci Wide 2020 511.104,893.40 Valve Assessment and Replacement Prolgram ✓ f City Wide 2020 S 11.11BL815.00 WaterSCADA ✓ City Wide 2020 5 406,312.50 Fire Flow Project 7 locations vary, 2021 S 72,100 00 Fire Flow Project 13 Fire Flow Proect 16 Mchi an and 7th Ave Alton Rd. and Michigan Ave 2021 1 2021 S 484,100.00 `• 15 630.600.00 Fire Flow Project 17 Terminal Island 2021 S 175,100.00 I Construction of New Booster Station North Beach 2021 S S. 900.00 Aerial Crossin Water Main Replacement _ _ v" 41st Street between Meridian Ave and Chase Ave 2021 S 72,100.00 I Aerial Crossing Water Main Replacement ✓ 41st Street between Pine Tree Or and Indian Creek 2021 $ 2DE6000.00 Aerial Crossing Water Main Replacement ✓ 7LstStreet and Bonita Dr. 2021 $ 18S,400.00' Water Main on MacArthur Causeway ✓ IMacArthur Causeway 7022 15 0.105,683.00 Belle Isle Booster Station Rehabilitation jBelle Isle 2022 IS 4,7]0 396 00 Fire Flow Pra'ect 2 lWestAveandFliLmingo 2022 S 456187.00 Fire Flow Project 4 Eudid and 14th PI 2072 S 169,744.00 Flre Flaw Project 15 Eudid and 14th Street 2022 S 307,66100 Fire Row Project 6Collins Park 2023 5 98,345.43 Fire Flow Proect8 Meridian and 15th Street 2023 S 131,127.24 Fire Flow Project 10 2Dth Street and Collins Ave 2023 S 87 418.16 . Fire Flow Pro ea 11 18th Street and Collins Ave 2D23 S 1D9,27L70 Fire Flow Project 12 _ lCollins and 17th Street 2024 $ 97.42&8.16 Fire Flow Project 9 N. Bay Rd between 4lstand 43rdSt 2024 S 82L62L43 Fire Flow Project 14 INarth Beach, Varies 2024 S 8SS.386-70 • Total Water 565,68,67.41 Sewer System Critical Needs Priority List Project Name Independent proiect location Begin Date Total Gravity Main Replacement - Priority 1 Basin 18(la Gorce Island), others TBD 2020 S 4,926,259.76 Gravity (wins 1/1 Reduction - Priority 1(a) 04 (Hibiscus), OS (Palm), 02 (Star), others TBD 2020 S 2,256,357.00 Venetian Way aerial crossing replacement in kind V Venetian Causeway 2020 $ 770,000,00 Vaive assessment and replacement 0 t Wide 2020 S 1,699,995,00 ,Pump Station No. 2force main replacement ✓ Star Island to 10th Street and West Ave. 2020 5 ZSSO.OMOO Force Mains PoF/CoF Priority 1 Terminal to Star Island, Normandy Isles, other TBO 2020 5 9,813,027.17 °Pump Station No. 18 force main replacement fa Gorce island 2020 5 • 550,000.00 ,Odor Control System SewerSCADA ✓ f Varies City Wide 2020 2020 S 850.600.00 S 1,I1a937.50 Manhole inspection and rehabilitation City Wide I020 S 7,961703.72 Pump Station 6,7 and grerouting 18elle Isle 2021 $ L194,80D.00 Aerlal crossing Pine Tree Drive 51stStreet to 47th St. 1PIne Tree Drive 2021 IS 700,400.OD Pum 1) Station No. 28 Reh abilitation 128thstreetandPineTree 2021 1 S1L103,400.00 Pump Station No. 1 Rehabilitation I 11th Street 2022 1 5 3,140.264.00 Pump Station No. 30, well lining, and electrical upgrades ITerminal island 2022 15 2,068,755.00 Pump Station No. 4force main replacement Between Palm and Hibiscus Island 2022 1 S 477,405.00 IPump Stations No. 5 force main replacement Palm Island 2022 $ 4117SLOO Pump Station No. 14 force main replacement Sunset Island 3 2022 S 90L765.00 Pump Station No. 23 force main replacement 75th Street and Dickens Ave 2022 5 $3.045.00 Pump Station No. 27force main replacement Collins Ave and 52nd Street 2022 $ 53,045.00 Gravi9f Mains I Reduction - Priority 1(b) Basin 23; other TBD 2023 $ 3,643.452.32 Total Sewcr S 56.338.5.07 Page 548 648of 1097 RESOLUTION NO. 2016-29612 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING DECLARATIONS OF OFFICIAL INTENT UNDER U.S. TREASURY REGULATIONS WITH RESPECT TO REIMBURSEMENTS FROM BOND, NOTE AND OTHER OBLIGATION PROCEEDS OF TEMPORARY ADVANCES MADE FOR PAYMENTS PRIOR TO ISSUANCE, AND RELATED MATTERS. 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 (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 expected to be reimbursed from proceeds of Bonds, and that the reimbursement occur within certain prescribed time periods after an Original Expenditure is paid or after the property resulting from that Original Expenditure is placed in service; and WHEREAS, the Mayor and City Commission of the City of Miami Beach, Florida (the "City") wishes to take steps to comply with the Reimbursement Regulations; NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: Section 1. Definitions. The following definitions apply to the terms used herein: "Authorized Officer" means the City Manager of the City, the Chief Financial Officer of the City or in the absence of both, the Treasury and Debt Manager of the City. "Declaration of Official Intent" means a declaration of intent, in the form, manner and time contemplated in the Reimbursement Regulations, that the advances for expenditures referred to therein are reasonably expected to be reimbursed from the proceeds of Bonds to be issued after those expenditures are paid. "Reimbursement" or "reimburse" means the restoration to the City of money temporarily advanced from its own funds and spent for Original Expenditures before the issuance of the Bonds, evidenced -in writing by. an allocation- on the books and records of the City that shows the use of the proceeds of the Bonds to restore the - money advanced for the Original Expenditures. 01"26"252/1/AMERIM 649 "Reimbursement" or "reimburse" generally does not include the refunding or retiring of Bonds previously issued and sold to, or borrowings from, unrelated entities. Section 2. Authorization and Requirement of Declarations of Official Intent. Each Authorized Officer is authorized to prepare and sign Declarations of Official Intent in substantially the form attached with respect to Original Expenditures to which the Reimbursement Regulations apply, to be made from money temporarily advanced and that is reasonably expected to be reimbursed (in accordance with applicable authorizations, policies and practices) from the proceeds of Bonds, to make appropriate reimbursement and timely allocations from the proceeds of the Bonds to reimburse such Original Expenditures, and to take any other actions as may be appropriate, all at the times and in the manner required under the Reimbursement Regulations in order for the reimbursement to be treated as an expenditure of such proceeds for purposes of Sections 103 and 141 to 150 of the Code. No -advance from any fund or account or order for payment may be made for Original Expenditures (other than expenditures excepted from such requirement under the Reimbursement Regulations) that are to be reimbursed subsequently from proceeds of Bonds unless a Declaration of Official Intent with respect thereto is made within the time required by the Reimbursement Regulations. Section 3. Effective Date. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this j day of OC / (Seal) Attest: City Clerk B P PRATED: �'1NCQR = cn H2 2 010-8268-6252/1/AMERICAS 650 APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION (d,9 16 City Attorney n1V Date DECLARATION OF OFFICIAL INTENT For Reimbursement of Expenditures from Bonds/Notes This is a Declaration of Official Intent under U.S. Treasury Regulations for purposes of Sections 103 and 141 to 150 of the Internal Revenue Code of 1986, as amended (the "Code"). 1. The undersigned, on behalf of the City of Miami Beach, Florida (the "City") declares that the City reasonably expects that the capital and other expenditures described in paragraph 2 (the "Project") will be reimbursed with the proceeds of "bonds" (as defined in Section 150 of the Code). The maximum principal amount of bonds expected to be issued for the' Project is.$ 2. Description of capital and other expenditures to be reimbursed'. [Complete either the first option or the second option but do not use the second option unless the functional purpose of the fund or account is generally descriptive of the purpose of the expenditures.] Expenditures for (insert a general functional description of property, project, program or purpose): LCLRj Expenditures initially made from and to be reimbursed to the fund or account entitled the general functional purpose of which fund or account is The undersigned has been authorized by the City to make and sign this Declaration on behalf of the City. Date of Declaration: CITY OF MIAMI BEACH, FLORIDA 20 T BY (Signature) (Type or print Name and Title) Caution: This Declaration of Official Intent will not be effective unless the bonds providing moneys for the reimbursement are issued and the reimbursement for the Project described above is made (by an allocation on the books .and records identifying the expenditures as -in- paragraph 2_ above)_ within the applicable period prescribed in -the Treasury Regulations — generally, 18 months after the later of the date of the expenditure or the date the Project is placed in service, but in no event later than three years after the date of the expenditure. 010.8268-6252/1/AMERICM 651 INSTRUCTIONS for DECLARATION OF OFFICIAL INTENT for Reimbursement From Tax -Exempt Bonds/Notes PURPOSE The form to which these instructions pertain is intended for use under Treasury Regulations §1.150-2 (the "Reimbursement Regulations") in order that capital and certain other expenditures paid with moneys temporarily advanced from other funds that are reasonably expected to be reimbursed from proceeds of subsequently issued notes, bonds or other obligations ("Bonds") may qualify for such reimbursement. Failure to comply can result in the inability for federal income tax purposes to treat proceeds of the Bonds used to reimburse the expenditures as spent for arbitrage/rebate purposes. - With certain exceptions for qualified "preliminary expenditures" and certain de minimis expenditures, a Declaration of Official Intent must be made not later than 60 days after payment of any expenditure expected to be reimbursed from proceeds of Bonds. Declarations of Official Intent should not be made systematically for all expenditures or in exaggerated amounts regardless of actual expectations, but only when it is realistically expected that the expenditure will be reimbursed from the proceeds of Bonds. In general only capital expenditures can be reimbursed from the proceeds of Bonds. "Capital expenditures" include (subject to any more restrictive state law) any costs related to the acquisition or construction of land or interests in real estate, buildings, structures, additions thereto, or other permanent improvements, and restoration or betterments made to increase the value of property or substantially prolong its useful life, and machinery, equipment, furniture and fixtures or other property having a useful life of at least one year or such longer period as is required by applicable state law. Costs of issuance of the Bonds are capital expenditures. Certain other expenditures also qualify for reimbursement. The Regulations do not apply to, and this form is not needed in connection with, the use of proceeds of Bonds to finance expenditures paid on or after the date of issuance of the Bonds. This form also generally is not needed in connection with the issuance of Bonds to refinance external borrowings (taxable or tax-exempt). INSTRUCTIONS These instructions are based on the Reimbursement Regulations currently in effect. The references are to the particular paragraphs on the form of Declaration of Official Intent. Paragraph 1. Insert the anticipated maximum principal amount of Bonds expected to be issued for the Project. The amount should include the maximum principal amount of all Bonds to be issued for the Project (i.e., Bonds for reimbursement of prior. expenditures and Bonds to finance expenditures to be paid on or after the date of issuance of the Bonds). A Project includes any property, project, or program (e.g., highway capital improvement program, hospital equipment acquisition, or school building renovation). Paragraph 2. The general description of the capital expenditures to be reimbursed may be set forth in one of two ways -- either by a functional description of the property, project or program for which the expenditures are made — Examples -- "highway capital improvement program"; "street and bridge improvements"; "hospital equipment acquisition"; "school buildings renovation"; or by identification -of the fund or account from which the money will be advanced to pay the expenditures that will be reimbursed subsequently from Bonds, and a statement of the general functional purpose of that fund or account - 010.8268-6252/1/AMERICAS 652 Example -- "parks and recreation fund, the general functional purpose of which fund or account is recreational facility capital improvement program." The second option concerning identification and description of the fund can be used where the fund purpose, in effect, describes the generic purpose of the project, property or program, such as a waterworks improvement for which money is advanced from the water utility capital improvement fund. If the money is to be advanced from a general purpose fund such as the general fund or a capital improvements fund that is available for any type of capital improvement, use the first option by stating the generic function of the project, property or improvement. 501(c) Organizations. If the proceeds of the Bonds will be loaned to a 501(c)(3) organization, either the 501(c)(3) organization or the issuer of the Bonds.may make the Declaration with respect to expenditures of the 501(c)(3) organization that are to be reimbursed. 2 010-8268-6252/1/AMERICAS 653 Resolutions-- R7 J MIAMI BEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Jimmy L. Morales, City Manager DATE: October 19, 2016 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING DECLARATIONS OF OFFICIAL INTENT UNDER U.S. TREASURY 'REGULATIONS WITH RESPECT TO REIMBURSEMENTS FROM BOND, NOTE AND OTHER OBLIGATION 'PROCEEDS OF TEMPORARY ADVANCES MADE FOR PAYMENTS PRIOR TO ISSUANCE, AND RELATED MATTERS. RECOMMENDATION Adopt the Resolution. ANALYSIS This Resolution is intended for use under Treasury Regulations §1.150-2 (the "Reimbursement Regulations") in order that capital and certain other expenditures paid with moneys temporarily advanced from other funds that are reasonably expected to be reimbursed from proceeds of subsequently issued notes, bonds or other obligations ("Bonds") may qualify for such reimbursement. Failure to comply can result in the inability for federal income tax purposes to treat proceeds of the Bonds used to reimburse the expenditures as spent for arbitrage/rebate .purposes. With certain exceptions for qualified "preliminary expenditures" and certain de minimis expenditures, a Declaration of Official Intent must be made not later than 60 days after payment of any expenditure expected to be reimbursed from proceeds of Bonds. Declarations of Official Intent should not be made systematically for all expenditures or in exaggerated amounts regardless of actual expectations, but only when it is realistically expected that the expenditure will be reimbursed from the proceeds of Bonds. In general only capital expenditures can be reimbursed from the proceeds of Bonds. "Capital expenditures" include (subject to any more restrictive state law) any costs related to the acquisition or construction of .land or interests in real estate, buildings, structures, additions thereto, or other permanent improvements, and restoration or betterments made to increase the value of property or substantially prolong its useful life, and machinery, equipment, furniture and fixtures or other property having a useful life of at least one year or such longer period as is required by applicable state law. Costs of issuance of the Bonds are capital expenditures. Certain other expenditures also qualify. _for reimbursement. The Regulations do _not _apply to,___and this Resolution is not needed in connection with, the use of proceeds of Bonds to finance expenditures paid on or after the date of issuance of the Bonds. This Resolution also generally is not needed in connection with the issuance of Bonds to refinance external borrowings Pageg of 1614 (taxable or tax-exempt). An Authorized Officer is authorized to prepare and sign a Declaration of Official Intent in the form attached to this resolution with respect to the expenditures to which the reimbursement regulations apply to be made from money temporarily advanced and that is reasonable expected to be reimbursed from the proceeds of the bonds. The Authorized Officers are defined in the resolution as the City Manager, the Chief Financial Officer, or in the absence of both, the Treasury Manager. CONCLUSION The Administration recommends that the Mayor and City Commission of the City of Miami Beach, Florida, adopt the attached resolution authorizing declarations of official intent under U.S. Treasury Regulations with respect to reimbursements from bond, note and other obligation proceeds of temporary advances made for payments prior to issuance, and related matters. KEY INTENDED OUTCOMES SUPPORTED Ensure Expenditure Trends Are Sustainable Over The Long Term FINANCIAL INFORMATION This Resolution does not have any financial impact. It only requires a Declaration of Intent to reimburse the City from future "bonds" for expenditures made prior to the issuance of those bonds. Legislative Tracking Finance ATTACHMENTS: Description ❑ Finance - Oct. 2016 Resolution Pageggg•of 1614 DECLARATION OF OFFICIAL INTENT For Reimbursement of Expenditures from Bonds/Notes This is a Declaration of Official Intent under U.S. Treasury Regulations for purposes of Sections 103 and 141 to 150 of the Internal Revenue Code of 1986; as amended (the "Code"). 1. The undersigned, on behalf of the City of Miami Beach, Florida (the "City") declares that the City reasonably expects that the capital and other expenditures described in paragraph 2 (the "Project") will be reimbursed with the proceeds of "bonds" (as defined in Section 150 of the Code). The maximum principal amount of bonds expected to be issued for the Project is .$ 2. Description of capital and other expenditures to be reimbursed. [Complete either the first option or the second option: but do not use the second option unless the functional purpose of the fund or account is generally descriptive of the purpose of the expenditure&J Expenditures for (insert a general functional description of property, project, program or purpose): [OR) Expenditures initially made from and to be reimbursed to the fund or account entitled the general functional purpose of which fund or account is The undersigned has been authorized by the City to make and sign this Declaration on behalf of the City. Date of Declaration: CITY OF MIAMI BEACH, FLORIDA 20 By (Signature) (Type or print Name and Title) Caution: This Declaration of Official Intent will not be effective unless the bonds providing moneys for the reimbursement are issued and the reimbursement for the. Project described above is made (by an allocation on the books and records identifying the expenditures as- in paragraph 2 above) within- the- applicable period prescribed in the Treasury. Regulations - generally, 18 months after the later of the date of the expenditure or the date the Project is placed in service, but in no event later than three years after the date of the expenditure. PagedS-V of 1614 010-8268-625 2/1/AMERICAS INSTRUCTIONS for DECLARATION OF OFFICIAL INTENT for Reimbursement From Tax -Exempt Bonds/Notes PURPOSE The form to which these instructions pertain is intended for use under Treasury Regulations §1.150-2 (the "Reimbursement Regulations") in order that capital and certain other expenditures paid with moneys temporarily advanced from other funds that are reasonably expected to be reimbursed fiom proceeds of subsequently issued notes, bonds or other obligations ("Bonds') may qualify for such reimbursement. Failure to comply can result in the inability -for federal income tax purposes to treat proceeds of the Bonds used to reimburse the expenditures as spent for arbitrage/rebate purposes. With certain exceptions for qualified "preliminary expenditures" and certain de minimis expenditures, a Declaration of Official Intent must be made not later than 60 days after payment of any expenditure expected to be reimbursed from proceeds of Bonds. Declarations of Official Intent should not be made systematically for all expenditures or in exaggerated amounts regardless of actual expectations, but only when it is realistically expected that the expenditure will be reimbursed from the proceeds of Bonds. In general only capital expenditures can be reimbursed from the proceeds of Bonds. "Capital expenditures" include (subject to any more restrictive state law) any costs related to the acquisition or construction of land or interests in real estate, buildings, structures, additions thereto, or other permanent improvements, and restoration or betterments made to increase the value of property or substantially prolong its useful life, and machinery, equipment, furniture and fixtures or other property having a useful life of at least one year or such longer period as is required by applicable state law. Costs of issuance of the Bonds are capital expenditures. Certain other expenditures also qualify for reimbursement. The Regulations do not apply to, and this form is not needed in connection with, the use of proceeds of Bonds to finance expenditures paid on or after the date of issuance of the Bonds. This form also generally is not needed in connection with the issuance of Bonds to refinance external borrowings (taxable or tax-exempt). INSTRUCTIONS These instructions are based on the Reimbursement Regulations currently in effect. The references are to the particular -paragraphs on the form of Declaration of Official Intent. Paragraph 1. Insert the anticipated maximum principal amount of Bonds expected to be issued for the Project. The amount should include the maximum principal amount of all Bonds to be issued for the Project (i.e., Bonds for reimbursement of prior expenditures and Bonds to finance expenditures to be paid on or after the date of issuance of the Bonds). A Project includes any property, project, or program (e.g., highway capital improvement program, hospital equipment acquisition, or school building renovation). Paragraph 2. The general description of the capital expenditures to be reimbursed may be set forth in one of two ways -- either by a functional description of the property, project or program for which the expenditures are made -- Examples -- "highway capital improvement program"; "street and bridge improvements"; "hospital equipment acquisition"; "school buildings renovation"; or by identification -of the fund or account from which the money will be advanced to pay the expenditures that will be reimbursed subsequently from Bonds, and a statement of .the general functional purpose of that fund or account -- Page657 of 1614 010.8268-625211/AMERICAS Example -- "parks and recreation fund, the general fimctional purpose of which fund or account is recreational facility capital improvement program." The second option concerning identification and description of the fund can be used where the fund purpose, in effect, describes the generic purpose of the project, property or program, such as. a waterworks improvement for which money is advanced from the water utility capital improvement fund. If the money is to be advanced fiom a general purpose fund such as the general fund or a capital improvements fluid that is available for any type of capital improvement, use the first option by stating the generic fiuiction of the project, property or improvement. 501(c) Organizations. If the proceeds of the Bonds will be loaned to a 501(c)(3) organization, either the 501(c)(3) organization or the issuer of the Bonds may make the Declaration with respect to expenditures of the 501(c)(3) organization that are to be reimbursed. 2 Page 15$8 of 1614 010-8268-6252/1/AMERICAS DECLARATION OF OFFICIAL INTENT For Reimbursement of Expenditures from Bonds/Notes This is a Declaration of Official Intent under U.S. Treasury Regulations for purposes of Sections 103. and 141 to 150 of the Internal Revenue Code of 1986, as amended (the "Code"). 1. The undersigned, on behalf of the City of Miami Beach, Florida (the "City") declares that the City reasonably expects that the capital and other expenditures described in paragraph 2 (the "Project") will be reimbursed with the proceeds of "bonds" (as defined in Section 150 of the Code). The maximum principal amount of bonds expected to be issued for the Project is $85,000,000. 2. Description of capital and other expenditures to be reimbursed. Expenditures for Water and Sewer Capital Improvements more particularly described in Exhibit A attached hereto. The undersigned has been authorized by the City to make and sign this Declaration on behalf of the City. Date of Declaration: CITY OF MIAMI BEACH, FLORIDA 2024 By (Signature (Type or print Name and Title) Caution: This Declaration of Official Intent will not be effective unless the bonds providing moneys for the reimbursement are issued and the reimbursement for the Project described above is made (by an allocation on the books and records identifying the expenditures as in paragraph 2 above) within the applicable period prescribed in the Treasury Regulations — generally, 18 months after the later of the date of the expenditure or the date the Project is placed in service, but in no event later than three years after the date of the expenditure. 1101087512111AMERICAS 659 Exhibit A Project Type Project Name Critical Needs D• SEWER PUMP STATION ODOR CONTROL WASTE WATER STATIONS REHABILITATION WASTEWATER MANHOLE REHABILITATION WATER & WASTEWATER MAINS AND REHAB WATER PUMP STATIONS IMPROVEMENTS Other DERM & EPA CONSENT DECREE PUBLIC WORKS OPERATIONS FACILITY STORMWATER CRITICAL NEEDS FDOT ALTON ROAD UTILITIES RELOCATION 660 RESOLUTION NO. A RESOLUTION OF THE MAYOR AND CITY COMMISSION ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS APRIL 19, 2024 MEETING TO APPROVE AUTHORIZE THE ADMINISTRATION TO EXECUTE A DECLARATION OF OFFICIAL INTENT TO ISSUE NEW WATER AND SEWER BONDS IN THE AMOUNT OF $85.0 MILLION- IN NE's"' WATFERAND SEb"IER—MONEY PROCEEDS, INCLUDING ISSUANCE COSTS. WHEREAS, Ig -in November 2007, the Mayor and City Commission approved Ordinance No. 2007-3582 which amended the procedures that the City followed in connection with the approval of a bond issue and added the feAewigg Section to Chapter 2 of the Miami Beach City Code, entitled "Administration"; Article V entitled "Finance"; Sec. 2-278, entitled "Procedures governing the issuance of bonds" (the text of Section 2-278 of the City Code is wee attached as Exhibit A to the Commission Memorandum accompanying this Resolution); and - WHEREAS, 9Pon December 9, 2020, the City Commission enacted Ordinance No. 2020- 4384 to amend the rates and charges for services of the Water and Sewer Utility established in the Rate Ordinance (the "Amending Rate Ordinance) (the text of Ordinance No. 2020-4384 is - See -attached as Exhibit B to the Commission Memorandum accompanying this Resolution); and: WHEREAS, Pursuant -pursuant to the Amending Rate Ordinance, the monthly water and sewer user rates for services of the Water and Sewer Utility will be increased by the following amounts at the beginning of the following Fiscal Years: City of Miami Beach, Florida Water and Sewer Utility Adopted Rate Increase Effective Fiscal Year Water System Sewer Combined Date Ending Rate System Rate Rate (October 1) September 30 Adjustment t'1 Adjustment(') Adjustment (2) 2021 2022 2.8% (3) 3.8%(4) 3.4% 2022 2023 5.5% + PTA 2.4% + PTA 3.6% + PTA 2023 2024 5.5%+PTA 2.4%+ PTA 3.6% + PTA 2024 2025 5.5% + PTA 2.4%+ PTA 3.6%+PTA 2025(l) 2026(s) PTA + Rate PTA + Rate PTA+ Rate Indexing Indexing Indexing (l) PTA= Pass Through Adjustment. See "Automatic Adjustments to Monthly User Rates - Pass - Through of Wholesale Rate Adjustments" below. (2) The combined adjustment is estimated, based on the average increase expected for the Water and Sewer Utility from across-the-board implementation of the water and sewer rate adjustments. (3) The rate adjustment for the Water System for Fiscal Year 2022 reflects a 1.0% adopted rate adjustment plus an estimated 1.8% pass-through adjustment. (4) The rate adjustment for the Sewer System for Fiscal Year 2022 reflects a 1.0% adopted rate adjustment plus an estimated 2.8% pass-through adjustment. (5) Pursuant to the terms of the Amending Rate Resolution, beginning in Fiscal Year 2026, annual increases in monthly water and sewer user rates will be governed by the automatic rate indexing provisions contained in the Original Rate Ordinance. See "Automatic Adjustments to Monthly User Rates -Automatic Rate Indexing" below and: WHEREAS, Att-on September 30, 2023, the City had approximately $136.3 million in outstanding Water and Sewer Enterprise fund debt that was issued in 2017 and 2021�and: WHEREAS, The -the outstanding debt for each Series in the Water and Sewer system are as follows: Series 2017 New Issue and Refunding Revenue Bonds of $107.2 million and Series 2021A Refunding Bonds of $29.1 million and: WHEREAS, The -the city currently has $54.5 million in the 2017 Water & Sewer Bond Fund which are appropriated to current projectsLand- WHEREAS, The -the City's FY 2024 Capital Improvement Program assumed $21.5 million in proceeds from a to -be -issued future revenue bond to complete needed appropriations for unfunded FY 2024 water and sewer projects and: WHEREAS, tan on April 19, 2024, staff presented to the Finance & Economic Resiliency Committee the "FERC") the need for new money to support the rest of FY 2024 and the FY 2025 capital improvement program for the Water & SewerfundLand: WHEREAS, the FERC approved a recommendation to the full Commission to authorize the Administration to execute a Declaration of Official intent in the amount of $85.0 million in new money proceeds, including issuance costs and: WHEREAS, The -the item was retained in FERC for staff to return at a later date to proceed with the issuance of tax-exempt revenue bonds via a bond resolution; and. ANAVYY-SM WHEREAS. ln-in accordance with the provisions of Section 2-278 Procedures governing the issuance of Bonds, the Administration prepared the required fiscal analysis Executive Summary, a copy of which is -(see-attached as Exhibit C to the Commission Memorandum accompany this Resolution)•, and WHEREAS. the Executive Summary whish --includes the following breakdown of the proposed Water and Sewer Bond issue. Sec. 2-278 (a) 1 (a) - Estimated cost of the projects: The water and sewer program will fund priority repair or replacement projects as well as the water and sewer portion of existing and future neighborhood projects, as identified by the Public Works Department. The upgrades include portions of Critical Needs projects to upgrade or replace the aging water and sewer infrastructure. The Critical Needs Program was approved by Commission on March 18., 2020 via Resolution No. 2020-31211 (see attached -Exhibit D attached to the Commission Memorandum accompanying this Resolution). In addition, it includes agreements with the Florida Department of Transportation (FDOT) to replace water mains under state roads, while they are already undergoing construction. See at*^�d—Exhibit E attached to the Commission Memorandum accompanying this Resolution for a complete list of projects with associated 662 Costs. The estimated portion of the projects for which the bonds are to be issued is $84.0 million, The City to date has not committed any proceeds for future projects that are to be funded from future bond proceeds. • Sec. 2-278 (a) 1 (b) - Estimated revenues to be generated by the projects: These projects will either replace or enhance portions of the existing water and sewer system; the operation of such system is funded by water and sewer rates and charges. No additional fees are anticipated to be earned as a result of these projects. The City has adopted water and sewer rate increases as specified above. • Sec. 2-278 (a) 1 (c) - Estimated annual cost of maintaining, repairing, and operating the projects: The Citys utility rates for water and sewer services are structured to collect the necessary revenues to meet annual operating and maintenance costs of the infrastructure, to cover debt service for water and sewer bonds, to maintain adequate operating fund reserves, and, to pay Miami -Dade County for wholesale water purchased, the treatment of the City's sewage and other feesLand-. nd. Deeiafatkm-of-OffisiaNntent WHEREASCufreRtly, the Administration is not recommending the immediate issuance of new money revenue bonds, but te-instead, mquest-reQuestino that the Commission te-authorize fGr-the Administration to execute a Declaration of Official Intent defined as: Declaration of Official Intent" means a declaration of intent, in the form, manner and time contemplated in the Reimbursement Regulations, that the advances for expenditures referred to therein are reasonably expected to be reimbursed from the proceeds of Bonds to be issued after those expenditures are paid.' and WHEREAS. Issuing-Issui ng a ses a prior Declaration of Official Intent is a legal mechanism that allows an issuer to use its own funds initially for project expenses and later reimburse itself with the proceeds from the sale of tax-exempt revenue bonds and is, therefore, a cost-effective strategy because the issuance of new money bonds can be deferred; and: WHEREAS, 4i -4n this case, the water and sewer fund's reserves would be utilized to provide the interim funding of the projects; and- WHEREAS. The -the Declaration of Official Intent will not be effective unless the bonds providing moneys for the reimbursement are issued and the reimbursement for the projects described in the attached is made within the applicable period prescribed in the Treasury Regulations — generally, 18 months after the later of the date of the expenditure or the date the Project is placed in service, but in no event later than three years after the date of the expenditure-. See -(attached as Exhibit F to the Commmission Memorandum accompanying this Resolution is a copy of fei=Resolution 2016-29612 which authorizes Declarations of Official Intent and. WHEREAS. Some some advantages to this approach include: • Timing and Flexibility: Delaying the issuance of revenue bonds provides the City with flexibility in terms of timing. It allows the City to initiate and fund a project using the water 663 and sewer fund's reserves while waiting for the most opportune moment to issue long- term bonds. This can be advantageous in instances where market conditions are not favorable or when the project timeline is uncertain. Reduced Interest Costs: By using internal funds initially, the City can avoid incurring interest costs associated with long-term debt during the early stages of projects. Market Conditions: Delaying the issuance allows the City to monitor and take advantage of favorable market conditions. If interest rates are expected to decrease or if there is increased demand for bonds, the City may be able to secure more favorable terms, ultimately lowering the overall cost of financing. Proiect Initiation Assessment: The delay provides the City with additional time to assess when certain project milestones are reached. This may involve confirming that the project is progressing as planned. A more solid project foundation can enhance investor confidence and contribute to lower borrowing costsand: WHEREAS, for the foregoing reasons. The -the Administration recommends that the City Commission authorize the Administration to execute a Declaration of Official Intent in the amount of $85.0 million in new water and sewer money proceeds, including issuance costs. BE its April 19 2024 meeting to authorize the Administration to execute a Declaration of Official Intent to issue new Water and Sewer bonds in the amount of $85.0 million, including issuance costs. PASSED AND ADOPTED this day of 2024. ATTEST: Rafael E. Granada, City Clerk Steven Meiner, Mayor 664 Formatted: Indent: Left 0", First line: O.S", Right 0", No widow/orphan control, Adjust space between Latin and Asian text, Adjust space between Asian text and numbers Formatted: Font Not Bold