HomeMy WebLinkAboutLTC 275-2026 SOFNA Communication Critical Infrastructure Item R7 ADM IAMI BEACH
OFFICE OF THE CITY CLERK
LETTER TO COM M ISSION
LTC #275-2026
TO:
FROM:
DATE:
SUBJECT:
Mayor Steven Meiner and Members of the City Commission
Rafael E.Granado,City Clerk N
June 22,2026
SOFNA Communication Concerning Critical Infrastructure Item R7 AD,June 24,
2026 City Commission Meeting.
On behalf of the Board of Directors of the South of Fifth Neighborhood Association
(SOFNA),please find the Communication from Keith Marks,SOFNA Board President,
concerning critical infrastructure funding in item R7 AD for the June 24,2026 City
Commission Meeting.
CAUsers\CLERBarRAppData\Local\Temp\3BAA7D-1\LTCSOF-1.DOC
Dear Mayor and Commissioners.
SOFNA has worked hand in hand with Commissioner Suarez on many important topics and
will continue to seek his support on aligned issues. Commissioner Suarez just send out
this morning, 6/22/2026 an email that does not accurately describe, in our opinion, the
choices in front of the commission. To quote Commissioner Suarez email; "Water rate
increases are one of the most unfair ways to fund major infrastructure because they hit
people regardless of income or ability to pay. " The choice is an Enterprise Bond vs a G.O.
Bond not the previous water rate increase request. The problem seems to be that an
Enterprise Bond requires a small lift of water rates to cover the bonds. Do not let the just
passed water rate moratorium be used as a political football with Public Works.
The core responsibility of government is to provide to the health and safety of its residents
and visitors. A city does not ask the public to vote on the staffing size of its police and fire
departments with funding from a G.O. Bond. A city has the responsibility to authorize
Enterprise Bonds when critical infrastructure is required to be fixed, and authorized
projects like the 1st street pump station are required to be completed. A city does not ask
the public to vote on clean, safe, water to drink, and sewer lines that do not fall into
disrepair and crumble. That is your job as a Commission.
So, what is Commissioner Suarez discussing? He wants to place 100% of the responsibility
of issuing Bonds on the voting public, No matter how many MB city senior employees tell
him this is not the way major cities fund the critical needs of public works, he goes on to
discuss the old proposal of increasing water rates as if Enterprise Bonds do not exist. In
fact, the City Administration was on the record at the last FERC meeting saying that a
commission authorized bond has a lower interest rate of payment than a G.O. Bond The
city and FERC discussed issuing Stormwater Enterprise Bonds for Public Works identified
NIPS phases, such as 1st Street phase 1 & 2, West Ave, North Beach and a select number of
critical public works projects including those who are required to be completed per
agreement with the County.
A Stormwater enterprise bond is not the same as a direct water rate hike. For example, a
$200 million commission authorized bond needs water rates to increase at a 15 to 1 ratio
verse a 1 to 1 increase in water rates to rase the same dollars. The bond would not require
large annual increases in water rates, but a small increase of the water rate of
approximately $10 dollars per month for bond coverage at a 1.40 value. If the rate increase
is based on Stormwater coverage calculations, which is based on property size runoffs,
most of the burden would be passed to large condos like Continuum and the South of Fifth
Area, Commercial buildings and hotel resorts like the Fontainebleau. It will have little to no
financial effect on renters and low-income small homeowners.
The issue being is it responsible for asking the public to pass a massive G.O. Bond against
their property taxes on the same ballot that voters are being asked by the State of Florida to
significantly decrease their property taxes via a homestead deduction increase. We believe
the answer is absolutely no. It is a set-up for failure and delay by avoiding your
responsibility as a Commission to issue Bonds.
The water moratorium needs to be lifted to cover the Enterprise Stormwater Bonds which
you are allowed to approve via commission votes.
Attached is the SOFNA letter to FERC and a PowerPoint that explains why an Enterprise
Stormwater Bond is the proper vehicle for our critical Public Works projects. I hope you
read both attachments and please reach out to me if you have any questions.
Regards,
Keith Marks
SOFNA Board President
CITY OF MIAMI BEACH
Finance and Economic Resiliency Committee — Memorandum
TO: Members of the Finance and Economic Resiliency Committee (FERC)
FROM: Keith Marks, SOFNA
DATE: 6/1/2026
RE: Request to Consider a Narrow Stormwater Bond Carve-Out to the Rate Moratorium — Protecting South
of Fifth from Tidal Flooding
Dear Chair and Members of the Committee,
I want to begin by affirming what the Commission got right. The moratorium on water, sewer, and
stormwater rate increases adopted on May 20 (Item C7 AI) was a response to a real problem. Our
residents are absorbing rising insurance premiums, higher assessments, inflation, and a 19% wholesale
sewer pass-through from Miami-Dade County — all in a single year. The “death by a thousand cuts”
concern is legitimate, and the Commission was right to draw a line in defense of affordability.
This memo is not a request to abandon that principle. It is a request to refine it.
The unintended consequence: a one-size-fits-all freeze locks us out of our only tool.
The moratorium, as written, treats all three utilities identically. But the Stormwater Fund is structurally
different from water and sewer in one critical way: it is the only legal funding source for a stormwater
pump station, and a stormwater rate increase is not a regressive tax. Because our stormwater fee is
calculated on impervious surface area — roofs, parking decks, and paved lots — the burden falls
overwhelmingly on those most able to bear it. The commission has the authority to issue a $200 Million
Enterprise Stormwater Bond. To do so requires a narrow lifting of the utilities moratorium for a
Stormwater Rate increase to cover the cost of the bond payments. Based on a estimate provided in the
attached PowerPoint PDF, a single-family homeowner would see roughly $69 a year/$5.75 per month
increase to their cost of living. A large beachfront hotel would see roughly $6,900 a year, and a major
resort over $34,500 a year — paying as much as 500 times what a resident pays. The bulk of our lower-
income population are renters, who do not receive this bill directly. This is the opposite of a regressive
tax; it is a targeted, fee-for-service charge tied to the runoff each property creates.
By freezing this mechanism alongside water and sewer, the moratorium inadvertently closes off the
single most equitable path we have to fund critical drainage infrastructure — and it does so at the worst
possible moment.
Why this is urgent for South of Fifth.
The accompanying PowerPoint lays out the full analysis, but the essentials are these:
• South of Fifth pays roughly 15% of the City’s entire property tax base — yet received virtually
nothing for flood protection. The 2018 G.O. Bond allocated approximately $730,000 to the
neighborhood (0.17% of $439M) and zero dollars to the 1st Street Pump Station, which was never
on that ballot. By contrast, Flamingo Park received $20M, La Gorce $14M, and North Shore $8M.
• Only the Stormwater Fund can legally fund this project. Of the City’s 14 infrastructure funding
streams, the Sewer and Water Funds are the wrong purpose, the City Center and North Beach RDAs
are the wrong geography, and the G.O. Bond does not fund underground pump stations. A
Stormwater Revenue Bond — issued by Commission resolution, requiring no public vote — is the
appropriate instrument.
• The clock is running on $35 million in grants. We have 18 months reserved for permitting Phases 1
and 2. If we cannot fund the construction start within that window, we risk losing $35M in
committed grant dollars — money our residents will not get back.
• A safe, prudent bond requires only a modest, well-targeted increase. To support a $200M
Stormwater Revenue Bond — funding the full 1st Street project plus other critical citywide drainage
needs — at a rating-agency-safe 1.40x coverage, the analysis points to roughly a 23% stormwater
increase: about $5.75 per month for a typical household. For perspective, the water/sewer
ordinance the Commission declined in May proposed roughly $79 per month. Bond financing
leverages this modest increase at approximately 15-to-1.
What we are asking of FERC.
We are not asking the Commission to rescind the moratorium wholesale, nor to walk back its
commitment to affordability. We are asking the Committee to consider recommending a narrow,
surgical carve-out — lifting the moratorium solely for the purpose of a stormwater rate adjustment
dedicated to this bond issuance — and to direct the Administration and our financial advisor to confirm
the exact coverage figures and model a simultaneous refunding of the callable Series 2017 bonds, which
could reduce the required increase further. We would further recommend pairing any increase with a
low-income lifeline rate and a senior hardship exemption, so that the residents the moratorium was
designed to protect remain protected.
The moratorium protects residents from being nickel-and-dimed. A targeted stormwater carve-out
protects those same residents from something far worse — the loss of their homes and their tax base to
recurrent flooding. These goals are not in conflict. With the right structure, we can honor both.
The attached PowerPoint provides the supporting data, the funding inventory, the coverage analysis,
and the equity breakdown. I am grateful for the Committee’s time and for its continued stewardship of
both our residents’ wallets and our City’s future.
Respectfully,
Keith Marks
South of Fifth Neighborhood Association, President
President@sofna.org
Attachment: Stormwater Bond Decision Package (8-slide analysis)
City of Miami Beach · Commission BriefingStormwater Bond
Decision Package
Funding the 1st Street Pump Station & Citywide Resilience
A $200M Revenue Bond Analysis
The ChallengeThe Challenge in Front of Us
$125M
Total 1st Street Pump Station
shortfall
Phase 1&2: $54M
Phase 3&4: $71M
$35M
Grants at risk
Forfeited if Phase 1 does not break
ground within the 18-month window.
18
months —permitting window
Time reserved for permitting before
Phase 1&2 funding must be in place.
South of Fifth faces tidal flooding. The clock is running on $35M in grants. We need a funding
decision now.
City of Miami Beach | Stormwater Bond Decision Package 02/8
How We Got Here · The 2018 Bond GapWhat South of Fifth Pays vs. What It Got
The 1st Street Pump Station Was Never on the 2018 Ballot
Taxable Property Value
SoFi: ~15% $9B taxable value · $50M/yr property tax)
2018 G.O. Bond —Exclusive SoFi Allocations
◄SoFi: ~0.17% ($730K of $439M —South Pointe Park $480K + bollards $250K)
2018 Bond —1st Street Pump Station
SoFi: 0% not on the ballot, $0 allocated
15% of the tax base. 0.17% of the bond. 0% of the pump station.For comparison: Flamingo Park $20M · La Gorce $14M ·
North Shore $8M · South of Fifth $730K
This isn't neglect —the 1st Street Pump Station simply wasn't on the 2018 ballot. The bond's structure
determined what was funded, and the pump station was not among the listed projects.
And no new infrastructure G.O. Bond has been authorized since 2018.
City of Miami Beach | Stormwater Bond Decision Package 03/8
The Funding InventoryWhich Funding Source Can Legally Pay for It?
Of 14 Funding Streams, Only One Fits Without Restriction
Stormwater Enterprise Fund ELIGIBLE the only clean fit
South Pointe RDA Legacy $6.97M already pre-allocated to 1st Street
General Fund PayGo / Capital Millage Conditional · modest capacity
State / Federal Grants The $35M at risk · time-limited
Sewer Fund / Water Fund ✕Wrong purpose
City Center / North Beach RDA ✕Wrong geography
2018 G.O. Bond ✕Doesn't fund underground pumps
The Stormwater Enterprise Fund is the legally and geographically appropriate source. Revenue bonds backed by it require NO
public vote —Commission resolution only.
City of Miami Beach | Stormwater Bond Decision Package 04/8
The ObstacleThe May 2026 Moratorium Blocked the Path
Item C7 AI Passed May 20, 2026
What It Does
Freezes all water, sewer & stormwater rate increases.
THREE ESCAPE HATCHES
a A 5/7ths rescission vote by the Commission
b A declared public safety emergency
c A regulatory order compelling action
The Impact
The Stormwater Revenue Bond pathway is functionally blocked.
Without the ability to grow rates, the Stormwater Fund
cannot increase net revenues to back new debt.
A larger bond needs additional coverage —and coverage
requires revenue growth the freeze prevents.
To issue a bond large enough for the full program, the Commission would need to lift the moratorium by a 5/7ths vote.
City of Miami Beach | Stormwater Bond Decision Package 05/8
The Bond Capacity AnalysisCan the Stormwater Fund Support $200M As-Is?
Not Without a Rate Increase —But the Actual Need Fits
The Coverage Math
Current net revenues available ~$34M
Current debt service (~2.0× coverage)~$17M
A $200M bond adds ~$13.8M/yr →~$30.8M
Coverage with no rate increase ~1.10×
Legal floor —financially unsafe, downgrade risk
Capacity without a rate increase lands at roughly $155175M —short of the
full $200M citywide program.
What Fits Today
$54M
Phase 1&2 · ~$3.7M/yr Easily supported
$125M
All phases · $8.6M/yr
Supported
$200M
Full citywide program
Exceeds capacity
without a rate
increase
The $125M actual need fits within current capacity. The full $200M citywide program requires a rate increase to stay safe.
All financial figures are planning estimates and require a formal feasibility study and confirmation by the City's financial advisor.
City of Miami Beach | Stormwater Bond Decision Package 06/8
The Coverage LadderWhat Rate Increase Safely Covers $200M?
Assumes the 5/7 Moratorium Is Lifted · Coverage Ladder
Rate Increase Coverage Monthly / Household Assessment
0%1.10 $25.00 RISKY —legal floor, downgrade
risk
~8%1.20× $27.00 MINIMUM —legal but thin
~18%1.35 $29.50 PRUDENT —solid cushion
~23%1.40× $30.75 SAFE RECOMMENDED
~30%1.50 $32.50 STRONG —aspirational
Recommended
~23% → 1.40× coverage → ~$30.75/month (+$5.75)—for a $200M
citywide resilience program.
Far smaller than the failed May 2026
~$79/month water/sewer ordinance. Bonds
leverage the increase ~15-to-1.
All financial figures are planning estimates and require a formal feasibility study and confirmation by the City's financial advisor.
City of Miami Beach | Stormwater Bond Decision Package 07/8
Who Actually Pays the 23% Stormwater Increase?
Because the Fee Tracks Impervious Surface, Hotels & Commercial Carry the Load —Not Residents
Miami Beach's stormwater fee is based on IMPERVIOUS AREA (roofs, parking, decks) —the actual cause of runoff. Properties pay in proportion to the burden they create. This makes
it a fee-for -service, not a flat tax.
Annual Increase by Property Type —drawn to scale
Single-family home
$25.00 → $30.75/mo $69/yr
Small condo
$1225/mo +$35–69/yr
Small retail
5,000 sq ft · 4.2 ERU +$290/yr
Mid commercial
50,000 sq ft · 42 ERU $2,900/yr
Large hotel
100,000+ sq ft · 100+ ERU $6,900/yr
Major resort
500,000+ sq ft · 500+ ERU +$34,500/yr
Residential Commercial Hotels / Resorts
~500×
A beachfront resort pays roughly 500what a homeowner
pays.The 23% increase falls primarily on hotels, resorts &
commercial —who cause the most runoff and recover costs
from tourists.
Why This Is Equitable
✓Fee tracks impervious area = the cause of runoff
✓Hotels / commercial pay 100500more than residents
✓Renters —most of MB's low-income —often shielded; billed to
owner
✓Modest resident impact: ~$5.75 / month
✓Most progressive of realistic options —vs. sales tax, flat fee, or
service cuts
Fairness Safeguards to Add
Fixed-income senior homeowners pay full freight • Flat residential ERU doesn't scale with wealth • Cumulative stacking atop the 19% WASD hike
→3 safeguards:1 Low-income lifeline rate (50% discount below AMI 2 Senior / fixed-income hardship exemption • (3 Renter pass-through transparency
The Verdict
Equitable in structure —far fairer than a sales tax or service cuts —but add
low-income and senior safeguards to protect the most vulnerable.
Source: Miami Beach Ordinance 2000-3274 (impervious-area ERU methodology); U.S. Census QuickFacts (median household income $72,856; poverty rate 14.4%); FY 2026 Utility Rates. Property-type figures are illustrative estimates based on the impervious-area formula (commercial ERU = impervious sq ft ÷ 791).1 / 1
The DecisionThe Path Forward
A Sequenced Decision to Protect Grants and Fund Resilience
1 LIFT the moratorium by 5/7ths vote —specifically
authorizing a stormwater rate adjustment tied to the bond.
2 ADOPT a ~23% stormwater rate increase → 1.40× coverage,
~$5.75/month per household.
3 AUTHORIZE a $200M Stormwater Revenue Bond by
Commission resolution —no public vote required.
4 ISSUE Series 2026A within the 18-month permitting window
to protect $35M in at-risk grants.
5 DEPLOY:Phase 1&2 ($54M) → Phase 3&4 ($71M) → other
citywide stormwater ($75M).
6 DIRECT Finance / financial advisor to confirm exact net revenues, run
the Additional Bonds Test, and model a simultaneous Series 2017
refunding to potentially reduce the rate increase.
This path protects $35M in grants, funds the full citywide resilience program, requires no public vote, and keeps household
impact modest —but depends on the Commission lifting the moratorium.
08/8