Capital Improvement Plan - City of North Lauderdale

Report
Capital Improvement Plan
Financial Options
September 12, 2013
Presented by:
City Administration
Finance Department
Capital Improvement Plan
Capital Projects
Streets
Buildings
Short : $1.5 Mill
Long : $500 K
Short Term: $25 Mill
Long Term: $71.8 Mill
Canals
Short : $ 1 Mill
Long : $30 Mill
Short: $17 Mill
Long : $10 Mill
Parks
Utilities
Short : $3 Mill
Long : $1.3 Mill
Short : $2.5 Mill
Long : $30 Mill
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.
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.
Capital Improvement Plan



Option 1:
Status Quo – Patch Problems as Necessary
Option 2 :
Pay As We Go
Option 3 :
Public-Private Partnership (P3)
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
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.
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.
Capital Improvement Plan

Option 3 – Public-Private Partnership (P3)
 New
State of Florida Law.
 Provides
for engaging in public –private partnerships
for “qualifying projects”
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
Capital Improvement Plan

Option 3 – Public-Private Partnership (P3) – Steps in the process

Advertise the projects in the Florida Administrative Register


City Commission must find that it intends to explore a P3 option for a qualified project.
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.

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).
Capital Improvement Plan
$50 • City’s Share
Million
$100 million
•
Grant
from
$50
Public-Private
Million
Partner
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)
$100 million
• Use $1.5 million out of potential $2 million of
annual revenues for debt service payments –
NO TAX INCREASE
This will fund $50 million over 30 years at current
anticipated rates
Capital Improvement Plan

Option 3 – Public-Private Partnership (P3) – continued.
Funding Sources
General Fund
Utility Fund
Stormwater Fund
Water Control District
Total
Annual Debt Service Required
$258,581
$1,000,000
$100,000
$115,000
$1,473,581
Deposit into Debt
Payment Reserve
$15,000,000
$8,000,000
$1,300,000
$700,000
$25,000,000
Detail of Funding Source
General Fund
Current Transfer to CIP
After Debt Payment
$600,000
$341,419
Utility Fund
Current Budget for Sewer R&M After Debt Payment
$1,000,000
Stormwater Fund
Current Annual Surplus
After Debt Payment
$170,362
$70,362
Water Control District
Current Annual Surplus
After Debt Payment
$119,499
$4,499
$0
Numbers are Estimates based on financial formulas. Actual figures based on market data and issuance costs will be different.
Capital Improvement Plan

Option 3 – Public-Private Partnership (P3) – continued.
General Fund
Utilities Fund
Stormwater Fund
Water Control District
Fund Balance 09-30-12
$24,686,743
$14,379,847
$1,879,598
$770,082
$41,716,270
Ending Fund Balance
$9,689,746
$6,379,847
$579,598
$70,082
$16,719,273
Capital Improvement Plan
Questions?

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