2008-26819 ResoRESOLUTION NO. 2008-26819
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A
CONTRACT BETWEEN MIAMI-DADE COUNTY AND THE CITY,
PROVIDING FOR THE RENDITION OF WATER SERVICE.
WHEREAS, on March 21, 1995, the County and the City entered into a contract
providing for the rendition of water service by the County to the City; and
WHEREAS, on April 26, 2000, the County and the City entered into Addendum
Number One to extend the aforestated contract; and
WHEREAS, on May 10, 2006, the County and the South Florida Water
Management District (SFWMD) entered into a contract which requires the County to
obtain twenty (20) year water service contracts with" its volume water customers to
coincide with the request of the County for twenty (20) year Consumptive Use Permits
issued by the SFWMD; and
WHEREAS, on November 15, 2007, the County was granted a 20-year Water
Use Permit which requires that, within six (6) months, the County and the City executive
a contract for water and sewer services which must be submitted to the SFWMD; and
WHEREAS, the County and the City desire to enter into the attached new
contract so that the County can continue to render water service to the City; and
WHEREAS, the new contract provides for a twenty (20) year term, <commencing
upon execution by the parties.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE
CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and
City Commission hereby approve and authorize the Mayor and City Clerk to execute a
contract between Miami-Dade County and the City, providing for the rendition of water
service.
PASSED and ADOPTED this 14thday of MaY , 2008.
ATT
CITY CLERK
Robert Parcher
F:\cmg r\$ALL\BOB\WaterAgreementM B20YearReso. doc
ayor
Matti Herrera Bower
APPROVED AS TO
FORM $ LANGUAGE
t4 FOR f~CECUTION
COMMISSION ITEM SUMMARY
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A Resolution approving a contract between Miami-Dade County and the City of Miami Beach, Florida,
providing for the rendition of water service.
Ke Intended Outcome Su orted:
Well-Improved Infrastructure
Supporting Data (Surveys, Environmental Scan, etc.): N/A
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Shall the Mayor and City Commission approve the contract between Miami-Dade County and the City of
i Miami Beach
Item Summa /Recommendation:
The 20 Year Water Supply Agreement replaces a previous Agreement between the City and the County
which expired in January, 2004. For at least the last two years, the City's Administration has been
negotiating with the Miami-Dade County Water and Sewer Department to develop the attached successor
Agreement. This Agreement has only been reached after several meetings with the respective staff and
the involvement of the City and County Manager on several occasions.
The requirement fora 20 Year Water Supply Agreement is imposed by the South Florida Water
Management District (SFWMD) as a condition of the water permit granted to Miami-Dade County to act as
a water supplier.
The City has also been successful in having the Agreement reflect an equality of treatment between
customers in Miami Beach and throughout Miami-Dade County. This level playing field was an important
feature and one which will become even more important with the passage of time as water scarcity,
treatment requirements and necessary conservation measures will tend to drive rates higher.
The 20 Year Water Supply Agreement presented to the City Commission is the result of a great deal of
staff time both at the City and the County. The Agreement terms and conditions are unique to the City of
Miami Beach, as no other volume customer has been able to negotiate the same terms.
It is recommended the City Commission approve the Agreement as presented.
Advisory Board Recommendation:
At the April 12, 2008 Finance and Citywide Projects Committee meeting, the agreement was discussed
and forwarded to the full Commission with no recommendation.
Financial Information:
- ---------- ---- - - -
Source of -
Amount
Account
Funds: ~
2
3
OBPI Total
Financial Impact Summary:
Ci Clerk's Office Le islative Trackin
Robert C. Middaugh, Assistant City Manager
Sian-Offs:
Department Director Assistant City Manager City Ma ger
RCM JMG
T:WGENDA\2008VNay 14\Regular\20YearVVaterSupplyAgreementSummary.doc
I~~~ ~~~~~ AGENDA.. ITEM ~?~-
~ DATE S'I~(-US
m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachH.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members oft City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: May 14, 2008
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION APPROVING A
CONTRACT BETWEEN MIAMI-DAbE COUNTY AND THE CITY OF MIAMI
BEACH, FLORIDA, PROVIDING FOR THE RENDITION OF WATER SERVICE.
ADMINISTRATION RECOMMENDATION
Approve the Resolution.
ANALYSIS
Attached please find a copy of the proposed 20 Year Water Supply Agreement between the
City of Miami Beach and Miami-Dade County.
The 20 Year Water Supply Agreement replaces a previous Agreement between the City and
the County which expired in January, 2004. For several years the agreement was not a
priority of the County. For at least the last two years, the City's Administration has been
actively negotiating with the Miami-Dade County Water and Sewer Department to develop
the attached successor Agreement. This Agreement has only been reached after several
meetings with the respective staff and the involvement of the City and County Manager on
several occasions.
The requirement fora 20 Year Water Supply Agreement is imposed by the South Florida
Water Management District (SFWMD) as a condition of the water permit granted to Miami-
Dade County to act as a water supplier. The SFWMD has as part of its mandate, the
responsibility to insure that water supplies are appropriately managed in their geographic
area which generally encompasses a large portion of South Florida. The County as part of
its permit from SFWMD has had to identify the source and supply of water within and for its
jurisdiction and how that supply will be managed going forward with anticipated levels of
growth and development. The County as part of its permit from the SFWMD also had to
identify alternate sources of water supply, plans for water reuse and water conservation
efforts.
Most of the provisions of the 20 Year Water Supply Agreement relate to the process of
supplying, utilizing and paying for water. The Agreement addresses technical issues with
the supply of water, points of delivery for the water and provisions related to the metering
and auditing of the water supplied.
The Agreement also contains some very important policy and rate related information which
will have a direct impact upon the cost of water for consumers in the City of Miami Beach.
Most of the negotiation between the City and County revolved around these key conceptual
sections of the 20 Year Water Supply Agreement. These specific sections will be the focus
of this overview memorandum.
One theme which the City has been successful in having represented in the Agreement is to
clearly identify that the terms of the Agreement are as contained therein and can not be
altered by independent action or Ordinance of the County at some later date. Unfortunately,
over history the County has followed the practice of making changes in Agreements by
unilateral action of the Board of County Commissioners in enacting a separate and
independent Ordinance. The 20 Year Water Supply Agreement as presented requires that
any changes in the Agreement be made only through negotiation and agreement between
the two parties.
The City has also been successful in having the Agreement reflect an equality of treatment
between customers in Miami Beach and throughout Miami-Dade County. This level playing
field was an important feature and one which will become even more important with the
passage of time as water scarcity, treatment requirements and necessary conservation
measures will tend to drive rates higher. The equal treatment language ensure that as rates
are driven higher, Miami Beach residents will not be treated differently than the County retail
water customers.
KEY AGREEMENT SECTION OVERVIEW
Section Eleven
This section of the Agreement stipulates the methodology for the computation of the rate per
gallon of water received by the City of Miami Beach. This section provides for a
methodology of separating regional water system charges from other water expenses
incurred by the County. The regional water system encompasses all of the volume users of
the County and includes the City of Miami Beach, and the fourteen communities listed in the
attached table 3-7. The balance of the customers are considered retail customers that are
directly supplied by the County.
As the table 3-7 indicates, Miami Beach uses 8.1 billion gallons of water per year (22.2
million gallons of water per day) out of a County total of 95.7 billion, or about 8.5% of the
total water consumed. For all wholesale customers only (27.5 billion gallons), Miami Beach
represents 29.5% of that consumption.
While the section defines the methodology to be utilized, it does not actually result in a
specific rate, as that number needs to be calculated on an annual basis from the different
expenses assigned as determined by the methodology. In separate discussions with the
County, the City is still working to better understand the basis for the actual assignment of
expenses pursuant to this methodology which will result in the specific rate per gallon
charged to the City of Miami Beach.
It was recently reported to the Finance and Citywide Projects Committee that the City rate of
water consumption is below the level predicted in last years budget and that a rate increase
would be necessary later in the year. In order not to adjust the rate multiple times, no rate
increase will be presented for City Commission consideration until the anticipated rate
increase from the County for fiscal year 2008-2009 is received.
Section Twelve
This section obligates the City to comply with an existing County Ordinance which deals with
water conservation. As a condition of the County's permit from SFWMD, the County was
mandated to have a Water Conservation Plan and by extension the City of Miami Beach is
also required to have a Water Conservation Plan as a customer of Miami-Dade County.
Section Twelve specifically reserves for the County the ability to impose a surcharge on
amounts of water consumed by the City of Miami Beach which otherwise would not have
been consumed if a Conservation Plan had been implemented effectively in the City of
Miami Beach.
There were two significant features to this clause which were agreed upon by the County.
Any surcharge which is levied by the County will be uniformly applied to all customers of the
County so as to ensure that volume and retail customers will be equally affected by any
surcharge. As the surcharge reflects a penalty for not meeting stated goals, any funds
collected through the surcharge will also be maintained in a specific fund at the County and
available to be applied only to water conservation programs in the City of Miami Beach.
The City will need to develop a Water Conservation Plan and take a more active role in the
promotion of water conservation in the future.
Section Thirteen
This section recognizes that the County plans to implement a peak flow rate structure as part
of the future water billing system. While it was not possible to negotiate this provision out of
the Agreement and then deal with it when it arose, the City has been successful in
negotiating changes to mitigate the impact on City residents.
A peak flow rate structure is one which charges a premium for water that is consumed
during periods of peak consumption. The theory behind a peak flow rate structure is that it is
more expensive for the County to maintain the ability to provide the plant capacity for peak
water flows which only occur periodically during the day, thereby causing unused or excess
capacity for non-peak portions of the consumption day. To the extent the peak rate flow
structure is successful in spreading the peaks over longer periods or shifting water use to
non-peak times, overall system capacity should be increased and in theory system
efficiencies achieved.
In our discussions with the County, they do not have a peak rate plan conceived or a plan for
implementation. While the County intends to implement this type of rate structure, it is very
complex to put into place.
In this section, the City was able to negotiate that if a peak flow rate structure is imposed it
would be done equally for all water customers and only after as specific analysis that
includes the City in review of whatever the peak flow rate impact would be upon customers.
The language also specifically requires that if there is a peak flow charge, that it be identified
on all water use bills.
Sub Section -Section Twentv Six
This section of the Agreement deals with the 20 Year duration of the Agreement. The City
was successful in negotiating language which recognizes that in the event a future and
heretofore unknown water supply opportunity arises, such condition would be beneficial both
to the City and County and that the parties will agree to discuss and alter the Agreement
accordingly.
A letter addressed to Mayor Bower from the SFWMD is attached to the memo which
indicates that the 20 Year Agreement is a requirement of the District and the permit that was
issued to the County.
Sub Section -Section Twenty Seven
This section represents one of the conditions which the County had to include in its permit
from SFWMD. The County's permit requires a specific Water Reuse Plan for non-drinking
purposes, such as irrigation or farming. The City's Agreement specifically reflects that no
such infrastructure is available nor do we have the plan to provide such infrastructure in the
near future. Even though the water re-use option may not be feasible in Miami Beach, the
County anticipates the need to expend 3-5 billion dollars to develop the system and
technology to comply with SFWMD permits.
Finance and Citywide Proiects Committee Review
At the April 21, 2008 meeting of the Finance and Citywide Projects Committee, the 20 Year
Agreement and its key provisions were reviewed and discussed. In detailed conversation
with the Deputy Director of the Miami Dade Water and Sewer Authority (WASD) the
Committee addressed questions about the Agreement, as well as other pending capital
projects, such as the impacts associated with the elimination of the currently used ocean
outfalls for effluent.
The Committee spent time discussing the provision of the Agreement that allows the City to
develop alternate water sources in the future and the possible implications of such a
change.
The Committee did not make a specific recommendation on the 20 Year Agreement and
forwarded the full Agreement for the City Commission's consideration.
CONCLUSION
The 20 Year Water Supply Agreement presented to the City Commission is the result of a
great deal of staff time both at the City and the County. The Agreement terms and
conditions are unique to the City of Miami Beach, as no other volume customer has been
able to negotiate the same terms. With the exception of the City of Hialeah, all volume
customers have approved a 20 Year Agreement with the County. The City of Hialeah Draft
Agreement currently includes provisions that are less beneficial than those in the Miami
Beach Agreement and some different language to address a possible Agreement
termination.
Language that is in the Hialeah Agreement for termination includes a two year notice to the
County, a requirement that all necessary permits have been received and that in the event
the County can not use water capacity or facilities designed for Hialeah use to serve other
customers (thus addressing the capital costs), the City of Hialeah will pay the County one
half of the City share of such facility costs.
As of the date of this memo, no objections to a termination clause have been expressed by
the County so long as the necessary permits (SFWMD) are received and that the City
address its share of any capital costs incurred by the County that benefit the City. The
language currently in the Miami Beach draft recognizes that a termination can be
accomplished, but that the two parties need to agree to the terms and conditions. In our
current version, the City and County would need to agree on an effective date, permit
changes and any capital costs that might need to be addressed.
As a practical matter, if the City were to attempt to develop an alternate water supply source,
such project would take years (under current regulations and technological conditions 8-10
years) and still require the permission of the SFWMD. The current language as to a
termination protects the interests of the City and even though very unlikely, provides for a
termination and the flexibility to negotiate the necessary other language can be considered if
that is the desire of the City Commission.
It is recommended the City Commission approve the Agreement as presented.
JMG\RCM\sam
T:WGENDA\2008\May 14\Regular\20YearWaterSupplyAgreementcommemo.doc
Attachments
SOUTH FLORIDA WATER MANAGEMENT DISTRICT
EX08-035
April 16, 2008
Mayor Matti Herrera Bower
City of Miami Beach
1700 Convention Center Drive
Miami Beach, FL 33139
Dear Mayor Bower:
Condition 54 of Miami Dade County's Water Use Permit issued in November 2007 requires that
within 6 months of issuance of the permit, the County must provide copies of executed
agreements to serve its wholesale water customers. The South Florida Water Management
District (District) understands that your cities have not yet reached any agreements with Miami-
Dade County, as anticipated by the District's permit. We also understand that you are moving
forward on scheduling the wholesale agreement for approval at the City of Miami Beach
Commission meeting which will be held on May 14tH
Because these agreements are not executed, there is no demonstration that adequate water
supplies will be available to serve any new proposed comprehensive plan amendments that
would increase the number of water customers within the City. As a result, the District must
inform you that we may be forced to make negative comments on any future comprehensive
plan amendments proposed by the City of Hialeah or the City of Miami Beach. In addition, the
District reserves the right to take enforcement measures against the County, including partial
permit revocation, if appropriate.
The District remains hopeful that your Cities can reach resolution with Miami-Dade County so
that these, agreements may be executed in compliance with the permit condition.
Please fek'ilfree to contact me if I can be of assistance. You may reach me at 561-682-6597.
Si~'c~e~ J /'~/ ~'a
(~t
Chip ram
Deput Executive Director
Water Resources
CM/le
c: George Burgess, County Manager
John Renfrow, Director, Miami-Dade Water & Sewer
Douglas Yoder, Assistant Director, Miami-Dade County Water & Sewer
3301 Gun Club Road, 1Nest Palm Beach, Florida 33406 (561) 686-8800 FL 4~'ATS 1-800-432-2045
Mailing Address: P.O. Box 24680,1Nest Palm Beach, FL 33416-4680 ~~ti~ti>sfwmd.gov
SOUTH FLORIDA WATER MANAGEMENT DISTRICT
EX08-035
April 16, 2008
Mayor Julio Robaina
City of Hialeah
501 Palm Ave.
Hialeah, FL 33011
Dear Mayor Robaina:
Condition 54 of Miami Dade County's Water Use Permit issued in November 2007 requires that
within 6 months of issuance of the permit, the County must provide copies of executed
agreements to serve its wholesale water customers. The South Florida Water Management
District (District) understands that your cities have not yet reached any agreements with Miami-
Dade County, as anticipated by the District's permit.
Because these agreements are not executed, there is no demonstration that adequate water
supplies will be available to serve any new proposed comprehensive plan amendments that
would increase the number of water customers within the City. As a result, the District must
inform you that we may be forced to make negative comments on any future comprehensive
plan amendments proposed by the City of Hialeah or the City of Miami Beach. In addition, the
District reserves the right to take enforcement measures against the County, including partial
permit revocation, if appropriate.
The District remains hopeful that your Cities can reach resolution with Miami-Dade County so
that these agreements may be executed in compliance with the permit condition.
Please f ~e ree to contact me if I can be of assistance. You may reach me at 561-682-6597.
~ ~, r %
~.- ,~v
i err m ~,
~ \ (`.
Dep ty Executive Director ~ ~ J
Water Resources
CM/le 1~. F,
c: George Burgess, County Manager
John Renfrow, Director, Miami-Dade Water 8~ Sewer
Douglas Yoder, Assistant Director, Miami-Dade County Water & Sewer
3301 Gun Club Road, Nest Palm Beach, Florida 33406 (561) 686-8800 Ft 1NAT51-800-432-2045
Mailing Address: P. O. Box 24680, West Palm Beach, FL 33416-4680 www.sfwmd.gov