Capital Improvement Plan Financial Options

1. Capital Improvement PlanFinancial Options September 12, 2013 Presented by: City Administration • Finance Department

2. Capital Improvement Plan Capital Projects Short Term: $25 Mill Long Term: $71.8 Mill Streets Buildings Canals Short: $17 Mill Long : $10 Mill Short : $1.5 Mill Long : $500 K Short : $ 1 Mill Long : $30 Mill Utilities Parks Short : $2.5 Mill Long : $30 Mill Short : $3 Mill Long : $1.3 Mill

3. Capital Improvement Plan • Directed Administration to get a price quote for a comprehensive engineering study from Calvin Giordano (CG). Directed Administration to explore financial options on how to fund the projects.

4. Capital Improvement Plan • At a minimum, following projects need to be considered in the engineering study • Sanitary Sewer – Shall include all necessary equipment, material, labor and misc. items needed to line all 200,000 LF of 8”-12” V.C.P. sanitary sewer mains, line 300,000 LF of 6” laterals, rehabilitate 1,200 manholes, and the upgrade of ten (10) sewage pump stations to submersible type. • Street Resurfacing – Shall include but not be limited to resurfacing and reconstruction of the City’s street right-of-ways - would sidewalk repair, swale restoration, upgrade of all City streets by of overlay, milling of asphalt, or removal of asphalt and road rock regrading. Approximately 72 miles of roadway. • Canal Restoration – Shall include reestablishing the current canals to their original profiles by doing complete bank restoration with a boulder/rock rubble bank and excavation/dredging to original depths for approx. 5.21 miles of canals. Storm drain outfall lining and headwall replacement shall also be included. • Parks -Shall include the replacement of approx. ninety (90) field lights poles and light fixtures at three (3) parks in the City.

5. Capital Improvement Plan • Option 1: Status Quo – Patch Problems as Necessary • Option 2 : Pay As We Go • Option 3 : Public-Private Partnership (P3)

6. Capital Improvement Plan • Option 1 – Status Quo – Patch Problems as Necessary • The City has $ 2 million in available annual funding • Action Needed by Commission to Implement • None – can be built into CIP

7. Capital Improvement Plan • Option 2 – Pay As We Go/Use Reserves/Debt • Engage CG to complete a study of need ($300,000) • City has an annual capacity of approx. $2M for infrastructure work without the need of a tax increase. • It is highly likely that the City will at some point in time need to increase taxes or issue debt/bonds to get the identified projects completed in a timely manner. • A Debt issuance combined with the use of reserves without a tax increase can get approx. 50% of the work completed within 5 years.

8. Capital Improvement Plan • Option 2 – Pay As We Go/Use Reserves • Action Needed by Commission to Implement • Resolution Authorizing the expenditure of $300,000 to engage CG to complete a comprehensive engineering study. • Subject to study details, subsequent Commission approvals needed.

9. Capital Improvement Plan • Option 3 – Public-Private Partnership (P3) • New State of Florida Law. • Provides for engaging in public –private partnerships for “qualifying projects”

10. Capital Improvement Plan • Option 3 – Public-Private Partnership (P3) • Qualifying Projects • A facility that serves a public purpose • An improvement that is principally owned by a public entity • Water, wastewater, surface water management or other related infrastructure

11. Capital Improvement Plan • Option 3 – Public-Private Partnership (P3) – Steps in the process • City Commission must find that it intends to explore a P3 option for a qualified project. • Advertise the projects in the Florida Administrative Register • Prior to approval, the City must also determine the following: • That the qualified project is in the public’s best interest. • That the qualified project is for a facility that is owned by the City or for a facility for which ownership will be conveyed to the City. • That the qualified project has adequate safeguards in place to ensure that additional costs or service disruptions are not imposed on the public in the event of a material default or cancellation of the agreement by the City. • That the qualified project has adequate safeguards in place to ensure that the City or private entity has the opportunity to add capacity to the proposed project or other facilities serving similar predominantly public purposes. • That the qualified project will be owned by the City upon completion or termination of the agreement and upon payment of the amounts financed.

12. Capital Improvement Plan • Option 3 – Public-Private Partnership (P3) – What does this mean in financial terms for the City? • If the project is approximately $100 Million then the City’s portion will be $50 million. • Based on the current interest rate environment and the City’s need to maintain a certain level of reserves, it is recommended that the City issue 30 year bonds to pay for the project. • The bonds would be funded with a blend of revenue sources and reserves. (see example next screen).

13. Capital Improvement Plan $100 million

14. Capital Improvement Plan • $50 million City Share – Revenue Scenario • Place $25 million from reserves in an escrow account (Use the interest and principal to make debt payments) • Use $1.5 million out of potential $2 million of annual revenues for debt service payments – NO TAX INCREASE $100 million This will fund $50 million over 30 years at current anticipated rates

15. Capital Improvement Plan • Option 3 – Public-Private Partnership (P3) – continued.

16. Capital Improvement Plan • Option 3 – Public-Private Partnership (P3) – continued.

17. Capital Improvement Plan Questions?