Commission Memorandum
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CITY OF MIAMI BEACH
to
1700 CONVENTION CENTER DRIVE, MIAMI BEACH FL 33139-1824
http:\\ci.miami~beach.f1.us
COMMISSION MEMORANDUM No.l9~ -00
TO:
Mayor Neisen 0, Kasdin and
Members of the City Commission
DATE: October 18, 2000
FROM:
Jorge M. Gonzalez
City Manager
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SUBJECT: RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA AUTHORIZING THE ISSUANCE OF CITY OF MIAMI
BEACH, FLORIDA STORMWATER REVENUE BONDS, SERIES 2000, IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $57,500,000, FOR THE
PURPOSE OF PAYING A PORTION OF THE COST (AS DEFINED HEREIN) OF
IMPROVEMENTS TO THE CITY'S STORMW ATER UTILITY; PROVIDING FOR
THE ISSUANCE OF ADDITIONAL STORMW ATER REVENUE BONDS AND THE
INCURRENCE OF OTHER TYPES OF INDEBTEDNESS OF THE CITY TO PAY
ALL OR PART OF THE COST OF ADDITIONAL IMPROVEMENTS TO THE
CITY'S STORMWATER UTILITY AND FOR REFUNDING OUTSTANDING
STORMW ATER REVENUE BONDS; PROVIDING FOR THE PAYMENT OF SUCH
BONDS, OTHER UTILITY DEBT AND THE INTEREST THEREON; SETTING
FORTH THE RIGHTS AND REMEDIES OF THE HOLDERS OF SUCH BONDS AND
OTHER INDEBTEDNESS; PROVIDING CERTAIN DETAILS OF THE SERIES 2000
BONDS; DELEGATING CERTAIN MATTERS IN CONNECTION WITH THE
ISSUANCE OF THE SERIES 2000 BONDS TO THE MAYOR; APPOINTING A
BOND REGISTRAR FOR THE SERIES 2000 BONDS; AUTHORIZING THE
NEGOTIATED SALE OF THE SERIES 2000 BONDS AND APPROVING THE
FORM, EXECUTION AND DELIVERY OF THE BOND PURCHASE AGREEMENT
FOR THE SERIES 2000 BONDS; APPROVING THE FORM OF PRELIMINARY
OFFICIAL STATEMENT FOR THE SERIES 2000 BONDS AND AUTHORIZING
THE EXECUTION AND DELIVERY OF THE OFFICIAL STATEMENT FOR THE
SERIES 2000 BONDS; PROVIDING FOR A CREDIT FACILITY AND A RESERVE
ACCOUNT INSURANCE POLICY AND APPROVING THE FORM, EXECUTION
AND DELIVERY OF A DEBT SERVICE RESERVE FUND POLICY AGREEMENT
WITH THE PROVIDER THEREOF; COVENANTING TO PROVIDE CONTINUING
DISCLOSURE IN CONNECTION WITH THE SERIES 2000 BONDS IN
ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15c2-
12 AND APPROVING THE FORM, EXECUTION AND DELIVERY OF A
COMMITMENT WITH RESPECT THERETO; AUTHORIZING OFFICIALS OF
THE CITY TO TAKE ALL NECESSARY ACTIONS IN CONNECTION WITH THE
ISSUANCE OF THE SERIES 2000 BONDS; PROVIDING A SEVERABILITY
CLAUSE, A REPEALER PROVISION AND PROVIDING AN EFFECTIVE DATE.
Agenda ItellL-Q../'P
Date 10-1 &"-CD
ADMINISTRATIVR RRCOMMENDATION
Adopt the Resolution.
ANALYSIS
The attached bond resolution authorizes the City of Miami Beach to issue Stormwater Revenue Bonds in an
amount not to exceed $57,5 million to pay for improvements to the stormwater utility system,
This resolution delegates certain matters in connection with the issuance of the series 2000 bonds to the
Mayor and authorizes the following actions in connection with the sale of the series 2000 bonds:
o a negotiated sale of the bonds;
o approval of the form and execution of the bond purchase agreement (Exhibit D);
o approval of the form of preliminary official statement (Exhibit E);
o authorizes officials of the city to take all necessary actions for the issuance of the bonds;
o appointment of a bond registrar;
o authorizes execution ofthe official statement;
o covenants to provide continuing disclosure in accordance with securities and exchange
commission rule 15c2-12 (Exhibit F);
o and approval of the form and approval of a debt service reserve fund policy agreement (Exhibit
G).
The projects to be funded from the bond proceeds include installation or upgrade of drainage facilities as
summarized in the Stormwater Capital Improvement Program, attached as Exhibit A to this memorandum,
The total cost of these improvements, which would provide the level of service anticipated in the Stormwater
Master Plan, is estimated to be $60 million. The debt service for these bonds will be paid from user fees
collected by the Stormwater Utility Enterprise Fund,
The City's Financial Advisor, Dain Rauscher, Engineers and Rate Consultant, CH2MHill along with
administrative staff, worked diligently to structure the borrowing including the size of the debt, payment
schedule and timing of the issue, Additionally, all available sources of funds were utilized in an effort to
minimize the fees for the community, while maintaining a fiscally sound stormwater utility. Cash reserves
of $4 million from the stormwater utility fund will be used to defray debt service costs over the initial 18
months of the program thereby permitting increases to user fees to occur at a slower rate, The bonds will be
payable over a 30-year period and will be issued at market interest rates.
It is contemplated that the expected $52 million in bond proceeds, in addition to an estimated $7 million from
allowable interest earnings on the construction fund and other available funds eamed by the stormwater utility
will be sufficient to accomplish the work to be done over the next 6 years. It is anticipated that additional
stormwater improvements, in areas not included in the priority basins, as set out in the master plan or as part
of the G,O. bond neighborhood projects, will be funded from future bonds.
In support of the bond issue, a Stormwater Bond Feasibility Study (Feasibility Study) was prepared by
CH2MHill, which developed fees for stormwater for the fiscal years ending September 30,2001 through
2006. It should be noted that the current fee of$2.50 per month per ERU has been in place since the utility's
inception in 1993. Based on the Feasibility Study, the minimum fees proposed for this period are as follows:
Stormwater FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 Cumulative
Proposed Fees (Current) Increase
Monthly Charge $2.50 $3,25 $4.00 $5.50 $5,80 $5,80 $5.80 $3.30
In addition to providing for the required debt service coverage as set forth in the resolution, these fees will
also fund projected increases in operating and maintenance costs for the utility, as reflected in the Feasibility
Study. The attached Exhibit B demonstrates the projected revenue requirements for the utility to provide the
required debt coverage.
The proposed fees are presented for the 6-year period so that the community is aware of the planned increases
for this period. The ordinance scheduled to be considered by the City Commission in conjunction with this
resolution provides for adoption of the incremental annual stormwater user fees for the period beginning
October 1, 2000 through September 30, 2006.
A summary of water, sewer, stormwater and garbage collection fees is presented in Exhibit C, attached to this
memorandum,
BACKGROUND
In 1991, Miami-Dade County adopted an ordinance establishing a county-wide stormwater utility, for the
construction of stormwater management systems to collect, convey, treat, use or reuse water, prevent or
reduce flooding and water pollution, In 1992, the City of Miami Beach executed an interlocal agreement with
the County's Departmental of Environmental Resources Management (DERM) for the planning, control,
operation, construction and maintenance of storm water systems located within the limits of the City. In 1993,
the City established a stormwater utility enterprise fund. Under the umbrella of the Miami-Dade County
stormwater utility, the City began billing a stormwater user fee of $2.50 per month per equivalent residential
unit (ERU). This fee was established by the County at that time and has remained the same since the City
began collection of a stormwater user fee in 1993.
Additionally, the City is one of 16 municipalities that entered into an interlocal agreement with Miami-Dade
County authorizing the County to be the lead applicant in submitting a National Pollutant Discharge
Elimination System (NPDES) stormwater permit application, Miami-Dade County was one of approximately
eight counties in Florida that was required to submit the permit application in 1994,
The conditions of the permit, issued by the U.S. Environmental Protection Agency, required that the applicant
(and all co-applicants) prepare a Stormwater Master Plan (identifying problems and levels of service for
improvements), implement ordinances restricting stormwater discharge, provide public education, monitor
construction sites, conduct dry weather sampling, and implement improvements to reduce the pollutants in
stormwater runoff originating from new or modified projects. As a result, all new private developments and
modifications to public projects are now required to have on-site improved stormwater collection and disposal
systems. In 1994, the City hired the engineering firm CH2MHill to perform a citywide stormwater mitigation
and management program study.
Funding for improvements recommended in the study will be from the issuance of proposed stormwater
revenue bonds, It was subsequently determined that to issue the bonds the City needed to create a stormwater
utility separate from the County's stormwater utility, In 1995, the County approved the exemption of the City
from the provisions of the County's Stormwater Utility Ordinance. In 1996, the City created its own
independent stormwater utility,
In 1997, CH2MHill completed a master plan for the upgrade, expansion and rehabilitation of the City's
stormwater system. The master plan divided the City into 169 storm drainage basins and identified and
ranked 34 of these basins as high priority areas for upgrades and rehabilitation during a proposed five-year
program. The plan projected estimated costs of $40 million to complete this work. The stormwater master
plan adopted the flood level of service guidelines utilized by Miami-Dade County. These guidelines
established levels of service for different road classifications.
Applicable road classifications for Miami Beach and corresponding levels of service are:
Road Classification
Collector and Residential streets
J ,evel of Service
Passable during a five year storm; passable means
flooding does not exceed the crown of pavement
Passable during a ten year storm; passable means
flooding does not exceed the crown of pavement
Passable if flooding does not exceed 8" in depth above
the crown of pavement during a 100 year storm
Minor arterial road
Principal arterial road
Subsequently, other neighborhood and streetscape projects, which would require drainage work, were added
to the stormwater program. Following the approval of the G,O bonds, additional stormwater improvements
were identified to be coordinated with the G.O, bond neighborhood projects. The expansion of the stormwater
program became necessary at this time because it is prudent, and in many instances required by DERM, that
certain improvements to address water quality be implemented during the construction of projects. The total
revised estimated cost for stormwater work is $63 million. It should be noted that to provide a higher level
of service the cost of the program would increase substantially.
CONCLUSION
The City Commission should adopt the resolution so that the improvements to the stormwater system may
continue in coordination with the water and sewer upgrades and the G.O, Bond neighborhood enhancements
to minimize disruptions and reduce costs,
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