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Video-1: youtube.com/watch?v=u4QcIHqoOPM

Part: 1

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Heat. Heat. N. You're Boo. Boo. behind. Behind Please take your seats. The meeting is about to begin. Remember to speak into the microphone as this meeting is being

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recorded for public record. Please stand by. We are going on air in 5 4 3 2 1. All right. Good morning everybody. Uh welcome to the June Finance and Economic

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Resiliency Committee. Um pleased to be joined by my colleagues. A lot of important discussions today. I'm going to kick it over to our CFO, then our city attorney, and then we'll get started with the meeting. >> Hi, good morning. Today's meeting of the finance and economic resiliency committee has been scheduled in a hybrid format with a quorum of the committee

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physically present and remaining members, staff, and members of the public appearing either in person or virtually via Zoom. In order to participate in today's meeting virtually, members of the public may dial 1888-475-4499 and enter the webinar ID which is

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8636059-5462 pound or log into the Zoom app and enter the webinar ID which again is 8636059-5462. Any individual wishing to speak on an item must click the raise hand icon if they are using the Zoom app or dial star9 if you are participating by phone.

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>> Uh thank you chair. We just have uh two announcements before the first item. We have two time certain 10 a.m. MB6 and 11:30 a.m. for MB1. Shall I call the first item? >> Uh yes. Uh Azie, uh you making your way

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up to the podium lets me know that you have the first item ready. >> What will that be? >> Uh yes. Uh MB4 discuss first amendment to the lease agreement between the city of Miami Beach owner and RK Ravani LLC tenant relating to the property located

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at 1691 Michigan Avenue property set amendment to include two additional 20-year option terms enhancement to the lease rent structure and additional public benefits. and before. >> Good morning, Mr. Chair, Commissioner Zazi Dominguez, division director of asset management. Uh, this item was uh

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was brought before and we went back to negotiate some final items on the term sheet uh that needed further clarification with the tenant um uh for the property at at the Lincoln. Uh we

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have completed those discussions and negotiations and submitted the item. Since then, we made two more tweaks uh to incentivize the tenant for completion of the anticipated project. Um and those those changes were to increase the base

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minimum rent if they do not achieve TCO by 2033. Uh their base minimum rent will increase to 515,000. And if it's not completed by 2034, then their base minimum rent will increase to 575,000.

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That's an an additional uh $70,000 um for for that year. Uh in addition, we've added some >> Azie, help me out with that. >> Right. Of course, we want it completed. They want it completed. And it's good if we're,

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as I understand it, the lease wouldn't extend if they don't complete the project, right? >> Uh well, the the lease wouldn't extend if they don't complete if they don't complete the project by 2036. So these are these are some earlier steps to incentivize them to keep the momentum

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going and get their permits completed or secured and get their TCO done. Uh and with each of those levels, their base rents will increase as well in addition to their 5-year um annual escalations. >> Okay. Uh and then one last stipulation

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that we added was that if they do not secure uh their um sorry just want to make sure that I say it correctly. Yeah. So, if they do not receive their

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master building permit by July by July 1st of 2031, they do have an option at the city manager's discretion to extend it by 6 month and that will buy them an extra six month to get it. But if they do not receive it by then, then they will have some liquidated damages that

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will start at $500 a day. And usually I'm very uh keen to provide incentives to have these public private partnerships uh done uh quicker. So for instance, I think the city did very well

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with five park doing putting in milestones to be sure that the park was completed before um the the building was completed because we learned our lesson. Let's call it uh perhaps some other projects further up north where there was just this huge time frame. But those

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were public land and it was like public projects that needed to be done. I don't know if that same incentive and structure really exists here. Uh it's not as if we're asking any public improvements. This is on their property.

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Granted, city-owned ground lease. And it's not as if we're giving them anything, right? We're not giving them uh something except for an extension of a lease which won't be extended if they don't complete the project. Uh so I'm

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not completely uh against this. It just it catches me by surprise. Not in a bad way, right? Um I I I know you're being as diligent as possible just from I didn't think there was going to be any updates uh from the last time. I'm just trying to on the fly work through my head. Should that exist? Like I always

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oh almost always agree that we should be incentizing a P3 project to get done sooner but increasing their base rent when we're actually not giving anything. Um we are we in addition to the extensions

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that we're giving them we're also giving caps to those extensions. Those extensions are are typically at market rents. So there those two additional extensions uh will have caps that typically that currently do not exist in the agreement. >> But again only if the project gets done

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if they don't do the project none of this happens. It's not as if in five parks case we have two blocks of city land that is just sitting there undeveloped and our residents are like well what the heck is going on? How do we get this project done quicker? there.

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You want every incentive as possible to get this project done as quickly as possible. This is sort of like a nice to have because we get more money flowing into the system. I don't know if we want to be I don't want to say punitive, but really

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putting pressure to get that done because we're not giving up city land. We're not giving F increases. We're not giving height increases. It's like we really want this done because it's better economics for us, but if the project doesn't get done, we haven't given anything. We don't have blocks of

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city land that's just sitting there unactivated. It's kind of on the project owner. Um, that's just my initial take. I'll let my colleagues talk and uh maybe if Nick wants to talk on behalf of uh the project owner. If you guys are saying, "Hey, this is cool." Cool with me. >> Yeah. Through the chair, I think we have

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some presentation that we can run through. The real goal here is to really just make sure the city is whole in all scenarios and then it's also fair to the tenant. And so I think we've worked really hard to strike that balance. It's taken a few different iterations of the term sheet, but um I think we we've

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arrived there with this term sheet that we're presenting today. >> Okay. >> So um I have a presentation. Aussie, can I just use the clicker? >> Sure. >> So um Nicholas Rodriguez, 200 South Biscane Boulevard for the record. And I just want to say it's been a pleasure working with Azie and with David

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Martinez. Uh we've had to work through multiple iterations. It's kind of like you pull one lever and it affects another lever and there's an unintended consequence. So we've had to go through different negotiations. But again, I think where we've arrived is something that is mutually beneficial where we create an environment where Rivani can

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be successful. Um but the city is also getting their revenue increase. So again, we all know the property. It's at 1691 Michigan between Jefferson and Michigan. Uh this is the existing condition. So, the vision here for the Rivani entity is to develop an addition on this rooftop that's very seldomly

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utilized. You can see there's kind of a ramp to nowhere and almost nobody parks up here. Uh the phase 2 improvements are a $50 million investment in the building to create an addition on that seldomly used rooftop. It's not generating any revenue now because no one's parking there. Uh so, it's better to convert it

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into revenue generating uh leasable office space about 36,000 ft and 6,000 ft of restaurant. Um and we just we updated some renderings here. I know at the commission meeting it was requested that we kind of try to put these in context. So we'll just run through these quickly but the idea is uh an addition

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on the rooftop and kind of create this campus feel wellnessoriented office uh space and then uh this is a view from Lincoln Road. We wanted to just give the building a crown really and make it a lot more interesting as a visual from Lincoln Road than what you see now with

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the parking garage. Um so these are the the terms. Uh the ones highlighted in red are really what we spent 99% of our time negotiating since this this went to commission in May. Uh and as Azie mentioned, the base rent, there's three different scenarios, and those are

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addressing basically three different timelines. We essentially have an aggressive timeline that incentivizes Robert to move quicker and it's a better deal. If Robert uh gets the project done faster, the city collects a higher base rent for a longer amount of time. So, it's a lower amount of an increase in

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base rent. There's kind of a middle tier scenario in which it's it's very fair to Robert, but it's a little bit more delayed, so it's a slightly higher amount of base rent. And then there's the kind of the outside date worst case scenario, in which case the project took longer. Uh so there's a slight bump in

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the base rent, but it's it's really intended to make sure that the city gets their revenue. It's not punitive against Rivani. It's really just making sure that the scales are even in all three scenarios. Uh and then the other term that was at issue that we've come to to

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agreement on is the caps on the market rate adjustment. So when this lease reaches its its final term, there will be an appraisal process to increase the value of the base rent. Um and we're placing caps on the ability of the base rent to be or the total rent to be

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increased. Uh so it's not like a blank check here. This this provision was kind of an issue for lenders. It's completely unknown what the base rent could be at the end of the term based on an appraisal. So, we're just placing uh reasonable boundaries on how much that rent can increase. So, overall and

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through the end of the initial term of the lease, which ends in 2015, uh the first line is what the city would have gotten if Ravani did not purchase this building and do these phase one and phase 2 improvements. It would have been about 20 mill $21 million of revenue. uh with the Revani phase 1 and phase 2

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improvements, it's uh 39 million in revenue estimated. Uh so it's approximate net increase of $18 million. And you'll see here the three scenarios and the number in green is really the the most important thing is in each scenario, the city is basically guaranteed their $18 million of

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increased revenue. As you can see in scenario three, the worst case, it's a slightly lower uh value of $18 million. So it's not punitive. the city and Rivani are kind of sharing in the cost of that delay as partners and landlord and tenant, but the city's still getting the revenue increase from the project.

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Um, and scenario one, it's the most aggressive timeline. Uh, if the project is completed in 2032, that kind of assumes that everything goes really well and all of the entitlements happen and the construction happens with no delays. Uh, but as we know, those uh, construction and entitlement process

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without delays, nearly impossible. So, we think scenario two is kind of the most reasonable scenario to expect and it's the scenario that's most likely and it's the scenario that leads to the most revenue to the city, but it's also fair to Revani uh because it's not subjecting them to such a significant increase in

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base rent. Uh something that they can absorb and still be successful. So, just showing our work here a little bit how we got to these figures. The first line is what the building would have generated. Uh so if you look at 2033 for example, they would have received $738,000

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in 2033 as base rent in an entire year. Uh under the proposed terms, it's almost doubling to $1.4 million uh in that year. And then fast forwarding to the end of the lease, uh what the city would have been getting around a million dollars a year for the lease, they'll be

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getting about $2 million a year for the lease. uh and given some uncertainty uh with the the future of property taxes in municipalities, I think leveraging these types of city assets is really important and seeing this uh you know a million $2 million a year coming in uh pretty much

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guaranteed to the city is uh is going to be very important. >> Nick, go back to previous years. So even in 2032 we could be looking this called another half million dollars in additional rent revenues above and beyond what's coming in

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>> right and then every five years it >> and is that pro-forma is that minimum base guarantee so it could be higher than that or is there a cap on that is that fixed >> so the the base rent it's a two-prong rent it's base rent it would be in this scenario 515,000 subject to the 12% and

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then there's a percentage rent that's increased from 2 and 12% to 3%. There's no cap. If the building does better, that 3% will be higher. Um, this is an >> I just saw yesterday in Bickl at $250 per square foot lease rate. If this building outperforms, we share in that

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upside. There's no cap on the rent, >> right? Absolutely. >> But if it underperforms, there is a floor. >> You'll get your base rent and you're going to get your 3% no matter what. But if it underperforms, the Ravani and the city share in that underperformance in terms of the percentage rent component.

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Okay. >> Um, so and again the public benefits, it's a million-dollar public benefit package. I think we went through this at the last FK meeting and at the city commission meeting. There hasn't been much changes to this. Um, but if any >> What is >> Yeah. >> What is the second one? >> So uh a request to contribute towards

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maintenance and rehabilitation of uh religious institutional buildings in the Palm View neighborhood which is right across the street from the project. I think there's a Cuban Hebrew synagogue that is uh one of the buildings. Was that here last time? >> Uh, it that was modified from a 17th

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Street master plan to a request from uh the commissioner Fernandez requested us to to uh have this public benefit instead of the 17th Street master plan. >> I think it's a it stems from complaints from the neighborhood about the condition of that property.

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Um happy to discuss the public benefits more at uh >> if that's we've worked through with others. >> So the biggest public benefit here is really the Lincoln Road contribution. That's what's most important to Revani. Uh what they would love to do is some

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type of park improvement uh or like playground improvement on Lincoln Road. Um we have some very conceptual ideas as to what that could be. It would have to go through an HPV process, but just some very conceptual ideas of where and what it could be. Um, just two different iterations.

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>> Go back to the first one. >> Yeah, >> this would have to go through an HPB process. This is not a full park design or anything, but I personally think we should be doing the entire bucket into stuff like this, but it's not a hill I'll die on.

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>> Okay. I I just I that that is a public benefit >> for road >> that that is a public benefit. Um but that's my take. Uh again, uh many cooks in the kitchen and and

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not a hill I'll die on. Um but I I think the more that we could do like this, what was the next one? I I don't know about that. >> It's just a different design. I mean, this would we'd have to engage a legitimate playground designer and go through an HPB process, but it's just the renderer kind of coming. You create that in chat GPT on your way in or what?

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>> First time I'm seeing this. I can't believe this. >> Yeah, >> it's a little retro, you know, but >> aim a little better. Okay, >> you like the blob better. >> These are very very conceptual. We would have to go through the jellyfish. >> Yes. Um, that's all I've got, Mr. Chair.

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Thank you very much. >> So, you two are aligned. >> We are totally aligned on this term sheet and we're good. >> I want to just reiterate, Mr. on the on the rents there is no uh minimum guarantee it is I'm sorry there is a minimum guarantee but the percentage

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rent of gross always continues regardless of you know where the uh where the benchmark is >> okay >> even if the asset owner performs the minimum base rent protects us >> correct >> and that increases versus what is in there currently >> correct >> so even if the building goes vacant you

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know >> we are guaranteed the the base rent Perfect. >> And what is the process this travels? So this gets referred to uh the June full commission and it needs two readings there. One meeting. >> We will be coming back to the June 24th

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commission meeting and then the July commission meeting and then followed by referendum. And >> and Rick, for the record, if I can just have it stated again how insane it is to have like nine hearings on this stuff. Um if we just add that to the record. >> Okay. >> Right. This will be heard what five

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times. >> It's efficiency friends. Let's go. >> Process, >> but it's fine tuned. >> So I think to to move it out of committee, we'd be looking for someone to make a motion to for favorable recommendation return to commission with a favor recommendation to approve the lease amendment uh as presented. >> I'll move it.

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>> Second. >> All in favor? I. >> Item passes. >> Thank you. Thank you all very much. Have a great weekend. Jason, any small little ones do we want to hear from our OIG quick or are there other small not small items but quick

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items we could get out of the way because I know uh we'll have some other items that'll um take up the bulk of timing. Not that I want to defer them all afternoon, but maybe if we do that at like 11:15, 11:30. >> Yeah. Um I think MB3 we short, but the

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commissioner Dominguez isn't here. Um, so I think that one might want to wait. Um, but I'm not sure. Uh, >> yeah. >> If you wanted you wanted to do the OG1 first, >> please. >> Okay. Let me call the OG1

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uh MB2. We call that MB2 uh call on office of the inspector general to present their annual report at the finance and economic resiliency committee and adopt audit committee recommendation to institutionalize this

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practice yearly MB2 >> Joe how are you happy Friday >> good morning uh Mr. Chair and commissioners uh Mr. Green, uh, city attorney. Um, I, uh, Joseph Sanorino, Inspector General. I appreciate that we

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were given the opportunity to come and and and speak to you. This is something that was actually u suggested by the audit committee. We meet with the audit committee periodically and and you know, they review our reports and so forth and um, you know, they suggested what you know, do you ever go in front of the

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commission or in front of the finance committee? And you know, we do occasionally, but not specifically to talk about any report. and they they really uh strongly urged us to try to do something. I appreciate that the you know the chair has uh you know agreed to to do this. Um the our annual report

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comes out in usually in January early January for the previous calendar year. Um so you you and you've all get copies of it and you've probably you know looked at it and read it. So you and most of these things we would talk about you probably have some familiarity with

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from that. But I think there's some value in, you know, going over some of the highlights of it maybe and and uh and and and the themes that we have found in the in the work that we've done. Um and so and I'll try not to make this too long. I know you have a lot of

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other things to deal with, but we'll try to go through some of the things we we we've done and and uh we can answer questions if you have them. I have with me the distinguished uh chief auditor of the Inspector General's Office. You don't see him too often. um he doesn't always wear a green eye shade, but he's

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he's always uh he's always at work and he's a lot of work to do because he's got most of the work we do falls into the audit uh the audit area. Um talk about some of the the the major audits we did in the past year. Um and uh uh I I'll start with a with the with the

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marina, something I think most of you have know something about and have have heard about. Um you know the the problem that we had with the marina which was a big audit and a very contentious audit um was there was you know there was a def what we perceived as a deficiency

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and what they were paying the city. They they under the contract they have you know they were supposed to be paying certain amount of to of a percentage from their their uh their gross revenues. We had a disagreement with them about what their gross revenues were, a significant disagreement, and we

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felt there was a significant shortfall about $660,000 to to the city. Um, that led, as you know, to some negotiations by the administration. Um and there is a there is a pending uh item regarding uh the

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the final settlement I guess you could say uh that goes beyond you know the the findings because frankly the problem that that we saw here and it's a problem this is a general theme and we we've we've seen it in in many uh many of the

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audits we've done is this a tendency to kind of passively accept what some of the contractors are doing. Um, and I, you know, we've spoken to the administration about it and they acknowledge it's an issue. Um, and I I think it comes down to do we have the

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the personnel to, you know, to to really to monitor these these these contracts. Um, you know, that I I we think that something needs more needs to be done generally speaking in contract monitoring. Even if it's spot checking,

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it doesn't have to be auditing. we only get to audit them every several years, five, six, whatever years that uh and in the meantime what happens of course is that the the practices that that occur where the the contractor is interpreting

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the contract to their benefit unless somebody is you know monitoring that regularly to make sure that they're paying what the what they're supposed to pay. you know, we get into a situation where the city's accepted that for several years and is in a difficult negotiating

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position uh because of that. And uh we worked a lot with the city attorney on this and I think the administration did a good job in coming up with a settlement that include different aspects of of of uh of benefits that

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were going to come to the city. Uh they valued them at about $4.6 $6 million and uh you know that value would not have occurred without without the audit. But we we could do better than that. I think you know the the fact just I I always point out the the two cent per gallon

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that for 40 years we had it we we got 2 cents a gallon from the from this the fuel sales uh at the marina. Nobody ever and and that that contract was renewed a number of times and nobody ever looked at the contract to say two cents. I mean it's time. Joe, in summation, the

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recommendation then, uh, Commissioner Suarez, >> the >> is there a recommendation? I get where you're going with it. Is there kind of an overarching here? >> Well, the overarching is is is more monitoring at the manage managerial level, >> but is that do you have like a tangible

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here is what we're looking for? Well, I think that's that's really a a management decision to make, but but you know, there's a need for it and and I re recognize it's going to take more time to do that to look at each contract. Um, you know, and we can help them from time

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to time maybe to say, "Look, we think you should look at this or look at that." Um, you know, we're willing to work with them, but that's really that's a management function that is not being being fulfilled, we think, right now. >> Um, you know, other things we we've done, you know, the Oh, yes.

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>> When you mean mid-level managerial, have has your office considered using AI? >> I'm sorry. >> When you mean mid-level managerial, has your office considered using AI to >> We Oh, yeah. Well, we do. I'm maybe you

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want to make We're not We're not, you know, as far as we would like to be, but we we do have u have some u usage of AI in in audits. You want to make a comment? hopefully better than Azy's uh AI for the playground uh picture.

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>> Um good morning chair vice chair Norman Blota. Uh the use of AI we are implementing uh some usage we haven't uh I mean that's up to each department uh

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to the level of of of AI use that they going to uh implement. However, uh that's something that uh is new is a little concerning because we are always dealing with uh sensitive information.

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So sometime sometimes pulling up that to the to an AI is concerning. So we are giving small steps in order to use AI. But yes, it's in it's in our agenda to to uh use more AI in the future. But

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still uh there's a little concern on on the use especially when we're dealing with sensitive information. >> Okay. Understood. >> Um I will say that that what what we have been doing more and more of is data analytics which is looking at you know

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big picture of of u models of of of data and and looking at trends in there to pick out issues and problems. That's something that Norman has has a background in. I think one of our auditors has >> almost if I'm correctly almost like a what a palunteer would do.

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>> Yeah. I mean yeah that's and that and that I think is a is an important thing to bring into into auditing. >> Now if we ever looked at that because as I understand one of their core pillars actually is government services. >> I think that we don't I don't we don't contract with anybody for that but we do

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have people who have some training in that. And so we and we've I think in the BTR area I know Dorman has done work uh on on on finding problems with you know people who haven't renewed BTR BTRs using uh using that.

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>> Yeah. I and before you go, I think part of their >> Thanks >> um >> push is like, hey, the money you're going to spend here, you're making back multiple times over besides just, you know, the the governance angle, but the

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amount of money that they're able to use for cost savings for government efficiency, I think is uh I'm not overly familiar with the company, but whether it be that company or others like it, data analytics can really lead to uh good return on ROI. Right. >> Mhm.

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>> Well, uh mostly uh data analytic we have been using on on resource tax to select um businesses to be audited or for example for uh analysis for PPP loans on on on business or I'm sorry for

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employees that have been requesting those kind of loans. Uh yes, we use data analytics. However, uh that requires training and not I mean right now to be honest I'm the only one who really knows they

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>> saying is it better to contract that service we don't have to decide today but something to keep in mind. >> Sure. >> Right. >> Um the other one a major audit was on insurance compliance you know BTR renewals people are businesses that do

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business you're required to have insurance as part as a uh uh condition of the BTR. and they and they'll they'll they'll have that insurance usually at at the outset, but do they renew it? I mean, when they when they go for the BTR renewal, are they maintaining that

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insurance? Obviously, if they if they're operating uninsured, that creates liability for them, but also for the city. And um that's something that we felt needed to be tightened up because we found that that the required insurance was not being verified by the renewal stage. Um I think we've been

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told that it's going to be automated um by July of this year. I think that's is that's the the plan. So we we're hopeful that that's going to make an improvement in that area and we'll be monitoring that. Um beachfront management that's the another big audit that we do that

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every year and the reason we do that every year is that the state requires it. um you know we we don't have the the capacity to to audit every contract every year but that's one that we do look at and that involves you know all the concessions on the beach the beach is a state property and we we are

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required by the state to do that to to to to audit them as well as to make sure that that the proper sand tax is being paid to the state and uh I think that's got that's gotten you know the last couple of years hasn't been bad I mean that involves you any big hotel or you

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know Buchchet brothers that's that's that has concessions on the beach. Um they're required to under agreement with the city to pay the city revenue and that's something that that we audit and u you know we always find problems to some extent but I don't think there have been big big problems in that area.

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Maybe it's because we do audit them every year um that they get the kind of oversight that they that they need. Um resort tax audits we have five resort tax auditors. one of whom is is a both a auditor and a supervisor of

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the other resort tax. That's a big big revenue stream for the for the city. I think it's about $100 million. It's it's a huge revenue stream. We've got 4,000 accounts in the city. Um we do maybe 150

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or so audits or 160 or 70 a year. So that's you know fairly small percentage. They include, you know, some of the the major hotels which are are, you know, huge uh audits, but it also includes small small restaurants and mom and pop

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things and and it includes uh you know, people who might have a couple of units uh of small short-term rentals. I mean, and and and so there's a range of of difficulty with those. Um we assessed last year $3.9 million

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um that an unpaid resort taxes that and what the process is is that you know we we don't enforce anything. All we do is we do the audit. We we we figure out an assessment. It may include it often includes penalties and interest if they have hasn't been paid over a course of

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several years and then it goes to the finance department and uh it's up to them to you know to there can be an appeal if they if and that happens a lot of people don't want to pay and they they want to appeal and say you know we don't think you're you're being fair and

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uh it's up to the finance department to uh first of all to to look at it and and uh deal with that and sometimes they reach a settlement uh sometimes s they pay the whole thing, sometimes they pay less. Uh but they usually almost always pay something. And then if they want to appeal and get a hearing, they have a

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very distinguished magistrate. Um Jason Green is the he's the hearing officer on on appeals. And uh I don't think he it's his favorite uh his favorite thing that he does, but he does a good job at that. And he's very fair and people get get a

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fair hearing. And if they they're still unhappy, they can go to court, but that hasn't happened much. It really hasn't. In fact, the, you know, the biggest we last year we had the biggest um uh recovery I think that we that the city's ever had in a single resort tax audit.

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The font and blue 67 they paid 671,000 >> dollars to the city. >> And I'm aware of one that uh you're working on right now that is in a similar level and I commend you and your office for finding that and hopefully we're >> Yeah, we can't really talk about that but yes, we think we're going to break

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the record this year. um you know just >> and a lot of the and as I understand it it's not through any type of nefarious accounting. I talked to the uh the owners there and it was just simple. We got advice from our accountants years ago where you didn't and it's you know technical nuance. We didn't have to

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collect uh the resort tax on service charge that was applied on tips. Right. From a layman's perspective I'd say okay that sounds reasonable. That's our advice. But your team was there to uh define that and kind of >> you bring that up, you know, and and that's that's one of the that the tip area or at least the service charge ship

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is is a bone of contention often because you know, you'll see on your bills 20% service charge when you audit time at a lot of restaurants. And you know, you might assume that's going to the staff. And if all of that's going to the staff, well, it's not it's not taxable. But if

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the if the if the restaurant's retaining some of that, that that's revenue to the restaurant, which is taxable. And we found situations where the entire 20% was being kept by the restaurant. Um, you know, and we've seen situations

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where the restaurant was charging the 2% but keeping the the 2% keeping the city's the city's tax revenue basically. So, you know, that's the kind of thing that happened. What happened just quickly with the with the Fountain Blue is they were having big events, big- time events. You know, you entry, you

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pay $400, $500 to go to this event and this food and drink that includes food and drink. Well, they weren't paying any any any kind of tax on that, but obviously good chunk of that money is toward food and beverage, which are taxable. So, uh, and I'm sure they're going to be changing, although we're

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going to continue to audit them. Actually, we covered I think three years. We're going to do some more auditing u uh this year. >> And Joe, incredible work. Not that your department is a revenue generating uh cost center, but you are saving our

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taxpayers uh money, right? That that is rightfully their >> I would say so. In fact, I every year the resort tax auditors generate more funds for the city than you know the cost of their >> um of their uh their salaries. And it is a deterrent effect. I mean, once

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somebody's been caught, I mean, they're going to be more likely to comply in the future and people people know that we're serious about it. >> I I teed you up to uh bring in all for a landing on a tremendous note. Let's uh let's see if we could do that. >> Okay. Um there there's a few other matters I'd like to mention if we have time to to just briefly

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>> How much time we talking? >> I I'll do it quickly. Okay. I'll just I just want to mention a few things. So, I appreciate waste hauler audits and CND audits that we do. We have two franchise haulers that uh pay 24% of their gross, you know, and and I think we're we may

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end up with more haulers that may be coming. Um, you know, they um they're not properly separating their tax exempt recycling from their waste recycling. It's the waste that's that's taxable. But when they get combined together,

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then that creates a problem. It's up to them to make sure that there's a a proper separation and auditing of that and that we found that to be uh not being done properly and I think that the documentation is going to is going to be

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uh done u by the end of this month. I'm hoping we're hoping that there's going to be an improvement in that. the uh CN D that's that's that's uh the de your de basically your your demolition type uh work that used to be just rolloffs which

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were stationary uh receptacles. It was extended by the commission through commissioner bot's ordinance to wheeled containers. There was no reason to exempt them and they had been kind of exempted. So uh we're seeing more uh more people now coming online. we've had

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to do some some some monitoring of people that are that are operating um without permits and who are not used to paying these fees. Um and that's made us into somewhat of a of an enforcement. Uh we used we go with code and we we get we

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get tips all the time of unpermitted unbtred uh uh waste uh CND callers. That's not part of the franchise. they there's about 20 or so permitted haulers, but we think there are many more unpermitted ones that are operating. So, we're

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working on on improving that. um just the the the major investig you know about the Poseidon investigation which you know showed that when there's a no bid contract there's been no due diligence of of the contractor and that was I think a real flaw in the city's

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process and uh there is uh I think that's already been given uh first passage uh the uh to uh basically to fix that problem. We appreciate the commission's action on that. Um the uh uh just just to comment quickly about

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outside employment which has been a steady problem in the city. We've done eight I think we're working on we're about to put out our ninth report on on on outside employment by city employees. It's not been well monitored in the past. I think there I've seen some

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changes. In fact, I think the HR has been putting out some uh some uh emails lately that we we appreciate and I think that might might hopefully people was people had their own businesses operating their own businesses and they didn't think that was outside employment. Well, of course it is, but I

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mean they thought well you know unless I get a paycheck someplace else. Um so um you know I want to mention quickly fire station one which is a sore subject for everybody. Um but you know that that was a um you know

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it was one and it's happened a number of times and it's probably going to happen again late in the process. Change it. Let's change this. Let's move something here. I'll do something differently. Um after the thing's been designed after, you know, costs have been incurred. Um

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and uh that was that that frankly will probably the the several years that that sat and nothing happened probably cost the city several million dollars and we're hopeful that that that can that can be stopped or at least reduced

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significantly in the future. There is an ordinance uh Commissioner Fernandez's ordinance stop the pause. There was a stop the pause one that just applied to major uh critical infrastructure projects. We're then out stop the pause

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two I think got first passage. It's now being reviewed by the uh resiliency projects uh advisory committee and uh there is going to be some more changes but and we're actually involved in that. Um but it's hopefully going to come back to the commission very shortly and uh

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you know that's going to make for a higher threshold in order to uh to pause or stop uh a project that's uh that's been substantially uh improve substantially um uh completed uh with a

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higher level of uh uh of votes required to uh to have that done. Um you know that that's a real frustration. In fact, we hear from management all the time and they're not always as able as we are to speak up on these things, but uh um you know, we think that that more more care

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needs to be taken when there's been a big investment in a project. It's uh most the most of the work's been done. It's online. It's ready to go. Um and it it it it if there's going to be a challenge to it, it should have happened earlier. I think that that's something

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that this cost the city uh a lot of money. >> Excellent. >> Thank you for your time. >> Well, it's uh it's like that Jack Necklace movie uh from a few good men, right? Where uh you need me on this wall. It's uh like I said, not just the things you catch, but the deterrent that

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it is. So, I appreciate you and your team's dedication to service to our city. >> Thank you. >> So, thank you all. This is an item that's going to be just heard and closed, right? I don't think there's an action. Okay, we'll show the item heard and closed. NB2. >> Okay, why don't we uh hear NB6, Jason?

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Funding for utility projects. MB6, discuss funding critical resiliency and neighborhood infrastructure through dedicated capital mill and reducing reliance on water and sewer rate increases. MB6. >> And John, I'll just kick it off here. I don't know where this is going to go or

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the structure format it's going to take. I have a feeling a little bit of everything all over the place. I'll give my opening salvo. Um I think we're all when I say all the legislative body, city staff, uh our residents aligned

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that we're trying to thread a delicate needle, right? We have a lot of competing interests. We have tremendous amounts of um whether it just be our core water, wastewater, sewer stuff that needs to get done to our more ambitious

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yet still needed infrastructure resiliency. Just this past week or 10 days has been uh perhaps a needed reminder of, you know, the the issues that we continuously face that will be compounded. Uh but at the same time uh

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residents in Miami Beach and and elsewhere across the region, the county, the country are facing um affordability challenges. Uh so we have to balance that, wear many hats, we're at this point where we're at now, I think for my

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colleagues, while we may have different ideas of how to get to the same place. Um, I don't want to put words in anybody's mouth, but I I think we're all trying to thread the needle of getting some of these critical projects across. Perhaps not the full menu of what would

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be ideal. Um, because it does every project that we do comes with a cost, right? It comes with uh a challenge that is going to be borne by the users of the system, which are primarily our residents and our businesses. Uh, so

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that's where we're at. Um me personally, I'll just say high level. I'm not dogmatic about this. I I want to thread that needle of delivering our core projects. Probably not our entire wish list or everything that we had planned. Uh but doing so in a way that is going

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to be coste effective, efficient, and bearable for our residents. And that's likely going to be if we want to keep those levels low or at dimminimous or even at zero have to be offset from other areas of our budget. We'll get

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into various funding mechanisms here. That's going to be my thought, belief, and argument that these should be funded through the enterprise system. And if we want to essentially keep that flat through uh offsetting um

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expense reductions out of our general fund, I think that is just good governance and and city municipal financing. Uh but let me turn it over to you to kind of open this up, then I'm going to turn it over to my colleagues and our city staff. Uh, listen, I we're

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going to be pulled in all different directions. As city staff, you're public works. You want everything as you should, right? As you absolutely should. That is your job, right? Our CFO, he's going to say, "Okay, well, here here's our budget challenges." And as

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legislators, we're going to have to uh find how to thread that needle. Um, it's it's never been easy. uh when affordability is probably as precarious as ever. Uh that's going to be challenging more than ever now. Um I

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think where this discussion is going to center on is what are we able to take on because I don't think it's nothing. I don't think that's anybody's uh thought. I could be wrong. Again, not putting words in people's mouths, but what are those critical projects that are

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missionritical, we need to move forward with and how is the best mechanism to fund those? And while we may have differences in how to get there, I think that's what we want to talk through is if that is our kind of overarching goal, which listening to uh just people's even

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private comments or how we collectively uh talk in commission, I I think that is where we're at where it's perhaps not an appetite for everything. What is mission critical and how what are the proper funding mechanisms to get there. So let let me turn it over to you and then I'll

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give the floor over to everybody else. Good morning. John Norris, public works director. So, a little bit of clarification. This list that we presented as part of the utility increase, we have gone over this list many, many times. We've extended it

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out. We've moved projects. Our neighborhood improvement projects. There are a few on here, but we have them throughout the city. The 2024 estimate for neighborhood improvement projects was close to $5 billion. So, as you can see, we are not this is not

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everything. We're not asking for the Cadillac. We are asking for what is critical or has been directed by commission in the past to do. So, that's kind of where we are today. Some neighborhood improvement projects turned

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in to critical needs projects because the neighborhoods didn't want them and and those projects were stopped. So, those are very critical projects to solve some flooding issues. But instead of raising the roads and replacing water and sewer and everything, we might be upgrading the storm water system,

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installing a smaller pump station to get rid of the water. So, I just wanted to clarify that this list is the result of months of our engineering team going through everything, not only making sure that it was a critical project to get

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done or was directed by commission to do, but that we could also get the work done in the time period because that is a concern. You know, can we spend that money and get these projects constructed? We see the challenges with

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lane closures already throughout the city with the projects we have going on. So, we're trying to balance all those different demands, make sure we can get the projects done in a timely manner. And that is what was presented at the last FK meeting where there was unanimous vote to move it on to full

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commission. >> And colleagues, how how would you like to move forward? Do you want to see what some of these top projects are? What direction do we want to collectively take this in? I know there's a PowerPoint. I I bet there is Jason. But what where do we want to see? Do we

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want to see what did the administration recommend previously that there was about 700 $800 million in borrowing? I'm sorry, billion. >> It was a little lower than that. It was about $650 billion. Million. >> Yeah. If I if I may, uh the initial one,

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which is the standard way, you know, through utility rates, was approximately a $1 billion uh total program as we've spoken. um the funds generate uh cash. So it's a partially PIGO structure. So it using the revenue bond model uh it

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was about $625 million in borrowing was needed. The rest would be generated self um by the the fund itself through those utility rates. Um it would be a higher borrowing amount um which we'll get to. I think it's in the in the presentation a little bit. uh when it comes to a geo

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structure um because the funds would generate less cash with only a minimal CPI increase. So I think the to do develop the same program deliver the same program we'd actually have to borrow $783 million on a geo perspective. And Jason or John, feel

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free to answer this, but that original proposed where it was a billion uh hundred billion. >> Yeah. >> Billion one. Yes, I'm getting my decimal places

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wrong. 1 bill625 million in borrowing. What back of the envelope rate increase did that lead to? Let's call it in year three and however else you show it. Maybe year 10 >> that was about uh year one was about $15

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for the average single family home. Year two was about >> $15 >> per month. >> Per month. Yeah. I'm sorry. And then by year >> and is that the same for single families and condos, John? I think we had discussion it was lesser right for condos. >> So condos are challenging because a

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condo has a master meter. They're getting one bill for all of the condo owners and they split that up and it's paid through the HOA. uh assessment usually. So we estimated that we took about 10 condo buildings throughout the

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city of all different sizes like an 8-unit building and a 100 unitit building. So we got a relatively good sampling it was about 70% if I remember correctly which was around $11 a month increase per condo unit >> and without going year two year three

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let tell me where that number would be. Let's call it year five. I think 20 thou I can't have it. It's on it's slide nine. Um 2013 I think you would estimate the single family would be about $1,000 uh per year

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uh and $735 on a on a condo. So again, I think it matches kind of what John was saying. >> Can you give that in a per month? Uh I I have my phone too, but >> it's what we pay you for. >> I like annual amounts.

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>> It's what? 80 and uh that's called 508 about $85 on a single family home. >> So I have the amounts per year. First year would be 1177 a month for a condo per month. Then 1351 the next year 1321

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the next year. >> Where do we get in year five? Year five would be $11.51 and year six it would drop down to $516. >> If I may, one important thing in the utility rate model was after 2031 it basically drops the CPI. So we go back

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to CPI. >> I'm sorry. So for that billion dollar borrowing in year one, that would be an increase of $15 a month for a single family home, $11 a month for a condo. >> Yes. And it wasn't a billion dollars in borrowing. is 625 million,

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>> right? >> The presentation. >> Yeah. Um, but in year five, what are you saying about >> year five would be the last significant increase of $11.51 for a condo and $14 for single family residents and

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then year six is where it drops down to a smaller increase closer to CPI. >> Sorry, the aggregate though versus the delta from now Right. You know what I'm saying, Jason? >> No. I'm sorry. >> About $80 for a single family

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>> home per month over that six-year period. >> Mhm. >> That's an approximate approximate >> condo would be like 65. >> Yes. Something >> okay. Right around the 70% rule. >> Okay. >> That's over sixyear period. >> Through the chair. I understand you have a presentation that compares the two.

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Correct. >> Yes, I do. I' through the chair. I'd like I'd love to see that presentation. >> And those are this is an annual amount. So >> PJ, if you put uh PJ, if you put the presentation up. I think John, you probably have it on the laptop.

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>> Joe, while you're queuing up the presentation, can I ask a quick question? >> Sure. Um, John and Jason, can you address if you've planned this as a five-year amortization process to get us to just

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CPI increases, are we able to bond out if we do it over, let's say, seven or eight years, so the increases are smaller year-toear, but it's still a rate increase. Have Have you studied that model as well? I I think what

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you're asking is um 2027 through 31 have above CPI uh combined utility rate increases and if we're look at something smoothing instead of 11% 977 if it was something like five flat um we

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could look at that it would just uh we would have to cut some projects delay some projects but if that's the will of the committee and the commission to explore a if they say I'm going to give you a number or percentage I think that um and I'll look to Brian Mance if if if

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I'm off on this is they can go back and model that and see how much total capacity is and then we can kind of backfill what projects we can afford uh through that process and I see Brian shaking his head that he could do that. So that's one way of attacking it if you wanted to say you know here's a comfortable percentage we have or if you

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want to do two and a half one or the other if you want to explore water and sewer but storm water a different model there's there's a lot of options the commission could go down. Yeah, I think you know I think before we decide one one way or the other, we do need to look at those additional kinds

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of models because maybe there's a way to bifrocate the most critical projects and get them fully funded ASAP and then have a slightly slower pace um a slightly slower pace to to uh proceed with the

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things that aren't as mission critical. >> Yes. I mean even if it's just to say whatever the first four years are 27 28 29 and 30 uh which which is up there on the presentation there which is about I think um almost half a billion dollars

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worth of work there. If they wanted to look at just that and say what would that look from a utility rate uh structure um and kind of pump the other projects to have a discussion on on different rate structure in four years that's a a different way of attacking it. Absolutely. So the current >> yeah I I would like to I would like to see that before we make a final decision

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about how to proceed. >> Okay. The current slide shows a breakdown between the first four years in the last four years. So that gives you the dollar amounts associated. >> And if I can just for clarification the dollars that you're seeing here uh are

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um based on a geo bond debt financing. So that would be the amount of debt needed if we ran through a geo bond model. A revenue bond model would be different. and would be lower amounts. Um, but this is from a geo bomb model perspective, which is the kind of where the discussion kind of went. We talked

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about the rate mortum and commissioner Suarez's uh and commission and co-sponsored by Commissioner Fernandez. Uh, I believe this item to be sent here for discussion. We discussed payo wasn't really going to work. It was really going to be a revenue bond through utility rates, which is typical or we wanted to go in a geo bond structure.

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Sorry. But I would be careful to say that the ones in future years FY 31 through 34 are less critical than FY27 through 30. It it that's just where they are as far as scheduling with design and

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construction. As I said earlier, all of these projects have been vetted and put in a priority list based on their need. Those are all the projects. >> These are all the projects that are

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included in the debt financing. >> This presentation was put out as a supplemental uh last night. So, everyone at home also will have access to it online. >> Y >> this the same slide just split up into two. I'm sorry. This has all of the

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funding sources. shows the debt, the PIGO, above above ground money and grant money and this is broken down into the years and just as I know from the geo bond perspective um it's some very the a lot of the dollars are in the NIP. So I

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think um of the 783 million if you're going a geo bond model um more than I think about a little more than half of it are NIPs about 346 million of it are non NIP so they would be critical needs and other other needs determined by

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public works this is where I come in so I I was requested uh to look at what would this look like from a if this was modeled as a geo bond. So after we got the information from the public works department about what their um when they

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ran through their model after able to cash finance part of some of some projects designs and things like that what their annual debt financing needs are and on uh page 163 of the overall agenda there was just showing their annual needs of 43 million 18194. some

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some big numbers. So, we modeled uh we had PFM here. We have a representative from PFM if there any questions for him, but they ran through a data amortization schedule if we did the whole 8-year program. The next slide will show four, but if we ran as an 8-year model. So, what I take you through here is in 27 we

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would do a declaration of intent to issue. I would probably issue that debt somewhere towards the end of 2028. So, there would be actual no impact uh from a property tax millage perspective. In 29 uh we would actually have the first debt service and you we modeled this

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with four uh tranches of debt being issued uh going and and so it's 29 31 33 and 35. The reason I slid this slide up to 35 though most you see on 34 is 35 would be max debt service um and actually max debt service in in either

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perspective. So it would climb from about $15 million for debt financing up to 52 million in 2035. And those are the two years I'm going to concentrate on. So the area that's a little light gray and bolded there is if we looked at what would the geo bond millage need to be

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from this model if we had average growth over the past 20 years the taxable base uh for the city of Miami Beach since 2007 has been 6.7%. I am aware that we just got our our preliminary numbers at 3 and a half. It's been a little light, but the average and this includes the

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Great Recession and and a lot of negatives in there. It averages out at 6.7%. That's new construction plus existing values. So, if we just extrapolate that out, we see that we would need about 0.2 ms the first year and in 2035 max.5

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mills. That model is based on two two assumptions. the 6.7% increase in the taxable base of the city which is around 60 billion now increasing and then also what I looked at was the median homesteaded property tax and the average

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homesteaded property tax. Um the median homestead of property uh as of this last year was $36,000. So the median is the number I like to look at because that's 50% above and 50% of people are below that. So the middle is the average home. Let's say the average homestead of

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property is taking all the value. So, you're getting a real skewed in values uh from lower-end properties up to 20, 30, $50 million properties. That's why you're seeing that disparit $94,000 on average. So if I took that those median homestead of properties and I put

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in the 3% cap uh by by the state constitution that in your taxable value could increase I see that in 2035 that 306 would go to 387 and the average homestead would be up to about 1.1 million. So that would show that the median homestead of property tax would

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be approximately $195 and $577. the box below it or set of numbers is I would call ultra worst case scenario in which there would be no growth uh which is not reasonable but I wanted to show it from the higherend perspective. So if the properties did not increase in value

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and the city did not build one new thing and the city's values today are the same values in in about 10 years. Uh but that does show obviously a higher millage needed.9 to support that same debt service in 2035. So that's a 276 and an 817 let's call it uh from an average

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perspective that would be as if we financed the entire eight years exclusively as a geo bond. Next slide three these next two slides or they're they're similar but I wanted to show it. So this one I won't spend too much time. This is if you just said I want to go

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bond finance the next four years of the program. So same deal. I'm just going to go right out to 2035. We're at about.3 ms 117 $116 and then the average would be $343. Worst case I'm projecting about $165 and

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485. And then the last slide is I was able to get through the office of management budget in coordination with the property tax appraiser what some averages and medians were on on all residential. So uh as of right now we are you know heavily residential. I

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think it's like 80% residential in the city. So, this is going to mix both your homestead and your non-h homestead. The interesting thing is they're not materially different when it comes to the median residential property of 341,000 and the the median and the average at $8.84. Um, so they're they're very

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similar. So, just running this, this is just the 8-year model going all the way out, we're about.5 mil still, $289 and $748 from an average residential. And then next and then next I'll let John take this.

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But what we did the top part that's in the lighter shaded gray white gray is just taking those numbers from those earlier slides. This is the assumed average growth assumes the 8-year model. And it just shows the median and average

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homesteaded and the median and a average residential property. and then as compared to a single family home and a condominium type building in compared to an annual cost. But John, do you want >> So Jason, it's just looking at this, it

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looks significantly less than if if we were to use the geo bond with tax savings or savings on the on the millage swap.

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It's significantly less than the utility bill increase. Is that correct? >> Yes. I think on the surface when you do compare what a median or average homestead at a residential property is more than likely it would show uh it to be cheaper. Um obviously the

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>> Jason walk simplistically I mean without getting tell me how what's behind that like tell me how there's cost savings. Keep it high level. borrowing from a general obligation bond versus an enterprise

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fund. >> Well, you know, we've had this conversation. Um, is that the standard way that, you know, most pretty much everyone >> I get that how and why is it cheaper? Walk me through the structure of how it's cheaper.

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>> It's the it's the the the concept that the higher value properties are paying more of it. So, it would be the concept of u I'll say a pizza as a perspective. Um, I go to NYX on Second Street. I get a pizza for $20. Everyone who goes in pays $20. You bought a pizza, everyone

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pays. It's the fair amount. Um, using a let's say a a geob bomb tax perspective. The person who has the more expensive house might pay $40 for the pizza. I paid 20 and someone else paid $7 for the pizza. That's why you're kind of getting that skew. Um, the median prop or homestead of properties on on the median

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side are lower. So um our more higher uh cost or higher valued properties will be taking more of that. It's a tax shift. >> But one thing I want >> this is the median correct? Yes. The combined annual utility bill increase for a single family. So that that is

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also that that you don't have to have a median because that's everybody. Correct. >> The median is the 50% line. >> No. No. the the last two rows. >> The last two are the util are the what the utility >> it would be for everyone. It doesn't there is no median. >> Correct. Yeah. Well, this is this is is

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kind of the >> based on usage. >> Correct. >> Right. Right. Um and but it's important to note that from a long-term financial um resiliency perspective on how you fund utility projects. Um I do understand the concept of we're the

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commission is having a philosophical debate on utility rates versus uh versus doing this versus property taxes. Um it is it is allowed to be done by property taxes. It is not typical uh especially water and sewer. Uh storm water is a little bit more. City of Miami did a

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$200 million Miami forever bond to partially fund their storm water. Uh it just came to my attention that North Bay Village uh did a geode very recently and they're in the process of working their way through that that was approved by their voters only for storm water but not water and sewer. Um and that's something the committee or the

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commission could could explore. But from the long-term financial perspective as you build these utility rates and it generates revenues, those revenues will be there going forward. So as you issue debt and then as you pay that off there will be bounding capacity in the future

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to fund the ne partially fund some next range of projects. If you do geo bond you get a slug of money four years eight years and then you're back at square where square one no additional capacity. So, I just wanted to sort of for the record explain that um I do understand that those numbers look that

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perspective, but at the end of the day when when we're looking multigenerational, you know, the utility rate structure does help better from that perspective. Um and I think that's uh important. Um and I don't know if um maybe wanted to bring up the financial adviser to talk a

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little bit about his experience. still don't understand >> because >> without using pizza this is important stuff. Tell me how our residents pay less if we fund it through a geo bond or

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through a utility revenue bond >> through the chair if I may. It's PJ, if you want to put this slide back up so we don't So the the two middle gray rows are the median. Meaning

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the median is if you look at a graph, if you look at a a sheet, an Excel sheet, literally the median is the middle row and anything above is 50%, anything below is another 50%. So that is the median range of what people who have a value of $36,000

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I believe. Uh, correct, >> Jason. The bottom two rows is everyone. That's the everyone would pay. That's the cost that everyone would pay in the city of Miami Beach over the next 8 years.

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The me the two middle rows is the median. Now, someone who owns a property on North Bay Road is going to pay significantly more than, for example, near 2035, more than $289.

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It'll be probably closer to I mean not 780 that that'd be the average the 740 uh 748 but it it'll be significantly more because their property is worth more and it's more commensurate with with their their property. So that's why you see a

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difference that it's it's the median median compared to in the bottom two rows everyone pays that >> right? So you're going to have a lot of people above that paying correct that number. So it may look $290 on the median geob for all residential low.

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>> And my my take on this and my uh perspective is that a lot of these neighborhood improvement projects is exactly what it is. It's a neighborhood improvement project, right? So it should be commensurate with your property taxes

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because it's not I don't believe it's just water and sewer. It's also landscaping. It's it's parking. It's it's um aesthetics on on the improvement project. It's not simply just a a pipe

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in the ground. It it involves a lot more. Like West Avenue, for example, is going to look beautiful after this. They're not simply going to just replace the pipes and put everything above ground back the way it is. It's going to enhance the value of the neighborhood,

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which really is commensurate with property taxes. So um it's a philosophical you know take some cities like to do it through everyone in the city pays the same thing to to to make that happen. My take is I think it

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should be commensurate with how you know how valuable your property is. So >> and Rick walk me through the legal dynamics of how these would be issued. We would have to go for voter referendum for a geo bond but not a utility rate

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revenue bonds. >> That's correct. >> And why is that? >> Because the um property tax increase requires the property owners to or the residents to vote to tax themselves. The utility rate increase does not require

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consent in that way. And and one more thing through the chair. If with my with my proposal, if we do the geo bond, what I would like to do is have a resolution, a policy

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that every year, whatever the debt service increase is, we have to find cuts to make up for that. Therefore, there is no tax increase. So, what are what are we talking about? >> Can I can I jump in with a question?

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>> Let me just finish my train of thought, Commissioner. But, so just so that we're clear. Whatever those increases were, I want them to negate out. So, it doesn't matter if you have a home on North Bay Road or you have a a small um condo in

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Flamingo Park. The through the through the operating fund, we can find every year I believe it was what 14 15 million Jason. >> Uh yes, in our discussion 15, but it

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would end up at 52 million. So every year through my through what I'm proposing, the city administration would literally have to come every year and say this is what you would need to cut in order to offset the the debt service that we

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would pay every year. So there would be no tax increases. And then what we're doing is we're prioritizing water, sewer, infrastructure over some luxuries that we may have to forego. and we'll have that decision

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every year to make. >> Commissioner B. >> Yeah. Thank you. Um, a couple of questions. One is um what happens if we have an emergency and we don't have funds in in the budget or we don't have access to money because

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for for example the the bond referendum doesn't pass. Um, are we procluded from finding resources? and at this this notion that we're going to find, >> you know, $650 million in in budget

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savings to pay for our infrastructure needs that have been approved by this commission is is a fallacy. I mean, I am all for uh trimming back the budget and looking responsibly at it, but you know, we're facing a potential property tax um

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cut. You know, it may not be a total repeal. It may be a partial cut and maybe it's nothing this year, but it's not going to go away. Um, this is going to be an ongoing conversation. What happens to the maintenance costs? I mean, to me, this feels like you're you're getting a, you know, take transferring money from one credit card

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to another, but there's no there's no money there. So, I I very much like this idea of the more valuable your property is, the more valuable, you know, the the the more you pay for the the upgrades. I think that's I think that's a a

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perfectly plausible way to proceed. I I I think it's hard to make this decision at this meeting without having seen the other options of bifurcating critical needs of water and sewer um versus some some smaller projects. I will also say

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that I've gotten a number of emails from residents who have said, you know, this is not an enormous issue for the entire city, but my street, my house floods twice a summer. Um, and I've had to replace my floor four times in 6 years since I've lived here or whatever the

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statistics are. So, I I'm really concerned that um, you know, if if this doesn't pass at referendum, what do we do then? We're back to where we were. We've lost another year and we've the costs have crept up and we've had more

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flooding. Um, can you talk to us a little bit about that, Jason, about how we can deal with emergency? And and I will say that I'm not really psyched about the idea of of tying our hands perspectively about how we manage our city's resources in in

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terms of um what we're able to do. I mean, we're elected to make challenging decisions when we're faced with challenging circumstances. And I don't want this year's budget austerity flavor to color what we are permitted to do going forward as the needs change. I think

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that's dangerous and it's a bad precedent. It's why I'm so um distressed about the moratorum that was passed because it it handcuffs us instead of giving us the opportunity to talk about how to fund things.

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>> Selenus. >> Um >> sure. >> Well, Jason, do you want to answer that real? I don't mind. And then thank you, Mr. Chair. >> All right. Well, I think I mean >> before before Jason got on, I think that's >> I I think >> I did actually want to hear from our CFO

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if that's okay. >> Yeah, look, I'm sure. >> Uh there's a couple of questions in there. I'll try to answer them best of my ability. If I if I miss one, Commissioner, please um remind me at the end. So, a couple things. Emergencies. Uh the fund wonders storm water does

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have reserves. So if something exploded tomorrow, uh we could probably have some dollars to address that. There's also general fund reserves that could be deployed and uh quickly if this is obviously a big emergency and we end up with a million gallon uh sewer uh issue

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and and and and uh John says that you know we need $25 million tomorrow. So in an emergency perspective we we could cover that but we would need to backfill that money obviously. Um I think the other uh item about >> and Jason Jason I I'm sorry to interrupt

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and perhaps the city attorney can correct this. I believe that the moratorum also has an exception in the event of an emergency uh that that moratorium is lifted. >> Correct. >> That is correct. Yes. >> Uh correct. So that just like we had in

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Fort Lauderdale uh number of years ago when they had a I think a several hundred million gallon uh uh issue they had to do an emergency $250 million bond issuance with immediate utility rate increases that's obviously on the table even with the moratorum. So I think well one of the questions was it what happens if this goes forward the geo bond

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whether it's the whole program part of the program the storm water portion perhaps with the utility rates on the water and sewer uh and it fails on the geo bond side you know it's it's I think it is back to square one what the commission wants to do uh on funding these projects so utility rates could be

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obviously back on the table or wait a year for another different smaller uh different type of geo bond question. Um one other point of clarification on the um the NIPs the improvement projects there it is already partially funded it's 10% uh but it is partially funded

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with property taxes some through a previous geo bond and some have been funded uh like West Avenue was funded uh with PGO dollars I think last year. So there are there are elements of property tax support when it comes to the big um NIP. I don't know commissioner I did

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answer all of your questions because there were a couple in there. Um, one other uh, yes, sort of. Um, one other question which has just escaped me. Um, I don't I don't remember. I'll I'll chime in in a minute, but you know, I I

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don't want us to be the poster children of how not to handle things. You know, we've talked about this for a number of months now. And every time we do, Fort Lauderdale is raised as, you know, look what they had to deal with. It was a disaster. I you know we're supposed to be the model of resilience and proactive

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thinking and and wise urban planning stewardship and we know we have issues. So I again I really think it's without seeing this idea of bifurcating you know prioritizing um the the needs the immediate needs now

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with a much smaller rate increase and then perhaps bonding out this the smaller projects that can be spread out over a little bit more time is is maybe the best possible solution going forward that covers everybody's goals and I mean we are completely united in getting this stuff done there's no question about

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that but you know this this notion of um how do we do it with the least pain possible? The the longer we delay, you know, the more expensive it gets and the more people are dealing with flooding situations and nobody wants that. And you know, our my colleagues and I may have different views on how to move

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forward and I respect everybody's point of view. Um, I think we are and I want the public to know this that we are absolutely uh missiondriven to get these projects fixed and resolved and you know the next decade is it's going to take a decade to

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get them all addressed if we're lucky. So, we're all very eager to get this going. We just are trying to figure out the the best way to move forward so it doesn't seem punitive. >> Jason, can we use enterprise funds for any to help supplement any of this? Sorry,

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>> enterprise funds. >> Well, yes, that's what was mentioning. Whether it's a geo bond or a revenue a revenue bond through the enterprise funds, the program will be partially cash funded by the funds itself. So that's why it mentioned that the uh approximate $1 billion capital program

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over this I believe 8year window uh if you go the geo bond model, we would be issuing 783 million. Uh if you went the revenue bond model, uh it would be about 625 million. So that means uh you know 375 million um would be cash funded with

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these utility rate increases if we move forward with them. So it would put a less of a debt burden um on on on rateayers. >> Okay. Well stated that a little too fast and I also would like to see that. Is there can I look at in this packet where

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that is reflected? >> I'm sorry the the totals. >> Yeah. Everything that you just said, is that a part of our packet? >> It is. And I think believe in the in the first slide of the PowerPoint presentation is where it mentions the $783 million that's also in the memo. I'm referencing um since we moved uh

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this this particular item was more geared towards uh property taxes. I was referencing back to the April 1st FK though. I think the last time it was here, the water and sewer rate ordinance, April 1st, 2026 FK memo, uh, where the model was presented on the utility rate increases, which uh, which

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is where the, you know, the $15 a month, I think in first year impact was mentioned by, uh, our public works director, but in that detail on one of the pages, uh, it does break down the cash versus the, uh, the financing perspective. And in that memo, uh, if you add up the water, sewer, and the

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storm water, it's about 520, I'm sorry, uh, $625 million worth of, uh, debt financing needs. >> And then, so I guess to address, so I, you know, I feel like doing a geo bond is the best

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way to go here. And you know, I'm still a little confused on the details like Commissioner Magazine. I guess my only hesitation now is that um I'm just hearing that Commissioner Suarez um wants to

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make sure that the administration can reduce the budget side to offset the tax, which sounds great. I mean it really does sound great on paper but then we are going to be hurting somewhere else and

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I'm worried about where that other pain point will be. So that is worrisome to me. Yeah, and that's a valid concern, Commissioner Mateelinas, but I think I personally

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our job as local elected officials is to prioritize our funding for the basic tenants of government, which is public safety, sanitation, and infrastructure. So I I think what this does is

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it it really makes us put our thinking caps on and prioritize what is most important in government, right? And it doing doing the the water rate increase, that's the easy way out, right? That's

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just the easy button. You push it. Hey, we're taxing everyone and there's there's nothing on our side that we do to help ease the burden of affordability es especially in Miami Beach. So, what this does is it forces us to have that

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conversation every year. And and I think I think that's good. I think that's a I think that's a great thing to do as it's part of our job. I I believe that if we go through this route, it will address the same thing. It will address

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the same projects that the water rate hike would have would have addressed, right? Except for >> um in what my opinion is, it's more fairly approached to who pays what, right? So,

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so let me ask though to clarify, but if we were to adopt this your suggestion and then we ask the administration to show us cuts, would we have the option to then not fully cut? Because

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>> No, it's it's every year. It it's it's up to us. It's we're not we're not we it's it's illegal to tie our hands to do that. >> Okay. because I would be concerned that we say, you know, let's cut over here and then we're facing, you know, cutting

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some of our art and culture stuff or stuff that I know might seem like a luxury luxury, but it's also a part a huge part of our brand and who we are and and we, you know, it's we're we're all very proud of, you know, so I just

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don't want to, you know, tie our hands to saying something like, you know, we have to cut something that we shouldn't cut, you know. So, I want to know more about this. >> Well, well, from what I can understand and the city attorney and Jason also,

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it's every year we would have to have that conversation. >> We're not necessarily bound to it, >> although I certainly would like to be. So, because I'm a fan of prioritizing our funds for what I believe is what's most important. And that's just me. I

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know I know to many others arts and culture is very important and it is to Miami Beach. But at the same time I think you know maybe the next four years the uh

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one um one priority overweighs the other and that's what we have to make come to decision every year. >> So Mike if I can just add on to that. So, as you know, the the administration has been um is is directed to deliver a

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rolled back rate budget for discussion uh this summer. Um and our initial estimates are around 177 million $18 million, let's say. And we're still getting this refine. We won't know definitively till we get the certified values, right? So, let's just say we're going to deliver, you know,

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>> come say hi. >> 1567 million in cuts uh for the commission to determine whether they want to move forward on, you know, then we have the uh ballot question that's going to be on for property tax reform uh which our early estimates are in the $156 million uh

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impact. So, what's interesting is that when you go through this budget cycle, you'll see what the property tax home the new homestead exemption increases would look like as they get impacted in the future. So, if if that passes, the commission is going to have some interesting things to do. It may be difficult to do both. If the the the

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property tax reform goes through and it ends up being a $16 million cut to also afford another $15 million in 2029, but just as a reminder, I think getting commissioner to your point that 15 million two years later becomes 30 million, two years later becomes 40

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million. Two years later becomes 518 million. And here's the other part of it. Hold on. If if we pass this through being funded out of geo bonds and this ballot question passes, >> uh, in addition to the budgetary

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constraints that we're facing, we're essentially then going to be removing a large swath of payers into these utility and infrastructure projects. And there's two very interesting points there. Um one one is if this decides or some

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portion of it whatever whatever it is goes out and the voters vote on it. They voted and we have to legally we cannot state that that we cannot advocate for it and and we cannot legally as the commissioner said we had discussion with the the city attorney. You cannot tie the hands of a future commission. So you

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can't say go ahead and vote for this because I'm going to cut your taxes later and you're not going to pay anything. We can't state that. You can make a statement about there being a goal and we'll have a discussion every year, but there's no promise to that. At the end of the day, the voters, which I am, I will have to look at it from the perspective, do I want to buy this and

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pay that tax, you know, as it were. Um, and I think that's that's >> Jason, I have a couple of questions. >> Yep. >> Sorry. Sorry guys, I'm It's really loud here. I apologize and thank you for your patience with me. Jason, if there's a property tax roll back,

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how does the geo bond work? If it's predicated upon property taxes, does that change how the function how how the mechanics of a geo bond? >> Uh, not really. The roll back rate would have no effect. It's its own separate millage. Once the commission approves it, it goes to the voters, the voters

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approve it, and I go ahead and issue that issue that debt. Um the the determined millage needed to cover that service is done by uh my one of my offices the budget office will say this is the the needed millillage. The commission approves it but doesn't really have a say. It's this is the millillage we need to cover that. Now

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talk about the homestead exemption change. It will continue to shift that more from homestead into non non-h homestead residential and commercial will pick up even more of a burden. So this is going into the fairness question uh really um at the end of the day is is

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you know from the utility rate you know it's the pizza >> that's commercial but renters >> uh renters are would be in the residential right and they would be in the non-h homestead but that there is an interesting point which a lot of people haven't talked about is moving that from a 10 to a 5% increase so they're closer to a homesteaded increase. So there will

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be some impacts there but there is still a shift everyone would be paying more from that perspective. So it's difficult to model what that what that number would be. The utility rates you know as we talked about that's a everyone pays the same and again I I haven't seen really and and I as I discussed with the

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team water and sewer really being done as a geo we have seen let me pull back and this is where I'm heading with things right and can I have our consultant or >> Yeah. >> I'm sorry Brian Brian Mance uh from Governing

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over to you yet. Yeah, but you're a financial consultant adviser or >> he's the rate consultant. >> Okay, so here's where I think we should go with things. And this isn't because I have like some dog in the fight or I'm dogmatic about how to to do things. It

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is just good governance, right? How municipal financing 101 is done, right? I I've I've looked at more municipal budgets than 99.95% of human beings on this earth. Right? I

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literally made a career acting as somebody that only made money if I was smarter than Moody's and S&P and found inefficiencies in how they rated things and where those bonds were trading, right? And did well at that.

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So, I know a lot about how these government financings and projects work. It is just and I can sit up here and if people want to talk about the academic reasons and they're numerous why these types of projects are overwhelmingly if not

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entirely funded through revenue bonds, right? And it's not like it's not uh um it's not my personal preference, right? I I don't care. But if you're going to move me from that, I need to know why. So I don't

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think the feedback that we've gotten, our residents want an increase to the extent that our administration had proposed. So where I'm looking to steer

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things is coming in at a lesser amount. Right? If those numbers said, "Well, if we do $625 million of borrowing year one, that'll be a $15 a month increase uh for single family homes, $11." Well,

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if that's too much, then we need to see what is more digestible, right? And John, I talked to you this morning, and I don't expect you to have this ready, but if that's linear, if we would say, well, you know what? What if we borrow a third of that, right, through utility uh

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revenue bonds? That would equate to a $5 a month increase and $3 a month increase. And then if we wanted to take it upon ourselves and make those offsetting adjustments in our general fund, that is good governance, right?

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funding $625 million or a billion dollars of utility, storm water, wastewater, and infrastructure through our general fund puts our general fund at risk. Especially when there's going to be a lot of philosophical debate over

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what happens to the pricing, the market pricing of general obligation bonds in Florida if homestead property exemptions are out. We could ver like think about the timing of this. What a bond is okay we'll step back to 101 is investors out

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there yes it's through Wall Street banks but it's made up of individual people right municipal bonds are held through retail through everyday mom and pops and their retirement accounts. Florida is

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going to take a step possibly that nowhere else has done and essentially say your general bonds, general obligation bonds going forward no longer have homestead property taxes to rely on. And what general obligation bonds

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are, they're called adorum tax revenue. That means we promise to pay you back and we can tax as much as we can to fund those projects, right? And that is why you're able to borrow to a cheap

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rate. If the voters vote to remove homesteaded uh property taxes from being accessible to geobonds, the market's going to say, "Well, we're really not sure what's going on here, and we're going to go to market when there's a tremendous deal of

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uncertainty." I don't think that's good governance, right? So, I want to get to the same place as my colleagues about not passing these significant increases on to the taxpayers or our residents. I just think and I have to be moved off it if

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if we're going to go a different direction why we're trying to recreate or reinvent the wheel of municipal finance 101. These are the epitome of projects that are to be funded out of utility rates, right? It actually

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protects our city. It protects our taxpayers. So we're not just passing that advorum possibility taxing onto our general fund. And I think we've all collectively heard or at least I and the ones that voted for the moratorum.

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Our residents don't have the appetite for all of that. So let's scale that back. Instead of $625 million, let's just do we could have that debate. May maybe it's $200 million of the most critical and that would be year one increase of

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$5 per month at a maximum and actually $3 for condos. And if we want to go and find that offsetting amount in our general fund each year, I support that, right? I'm fiscally conservative. I want to find that

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offsetting dollar. It's just the mechanics is it's just municipal government 101 about how to fund these our consultant I I haven't spoken to you except for 30 seconds earlier today. So, not like we couldn't if I'm off here,

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tell me >> through the chair. One caveat is cuz I think what you're saying is let's we shouldn't use the full amount, right? >> Yeah. >> And two things. Um,

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how many how many NIPs, John, is this? It's it's West Avenue, South of Fifth, Northshore D, couple critical infrastructure projects in Flamingo and and a couple other critical

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infrastructure project. I I believe there's 42 out of 56. >> There are no 42 projects, but that is not all NIPs. There's only five NIPs in this plan. And but the critical needs the bulk of the of the >> there are sign I wouldn't say the bulk

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but there are significant portion of that but they're only five of the 42 projects. >> So right there so there are five of 42 projects. So, Commissioner Magazine, the the issue is that I foresee we

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almost make it political if we bifurcate and cherrypick what projects get done. So, >> or politicians, >> I I understand that, but if it's going to go to a geo bond, the the the voters have to vote on it. And if you're only

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just hypothetically, let's say we only do South of Fifth and West Avenue, what does Mid Beach get out of this? What does North Beach get out of this? They're not they're why would I vote for that if it's not in my neighborhood? And that is because ultimately this goes to

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referendum. People have to vote on it. And if there's really nothing in my neighborhood that I'm going to benefit from, why would a resident vote for it? as opposed to, you know, we just throwing on the tax. That's that's the

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that's the the curveball here is that it's going to have to be voted on by the majority of the city. >> Well, what I'll say is if we do how what we've always done and what is the

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>> what is always done >> is funding these through utility revenue bonds, right? the enterprise funds we vote on that and if we just like we were going to do and

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if we don't have the appetite which I don't for such a large amount and passing on those rate increases then we vote on a lesser amount and we can reverse engineer into that right we don't have to well we could do either we could pick the most critical projects or we could say well you know what we're

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going to uh issue a $200 million bond so go out and find the projects that are most in need of $200 million, right? Um >> yeah, but again the people if it's through a bond and it's a referendum so >> it has to be voted on.

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>> A revenue bond isn't through a referendum and Rick, right? >> Correct. >> I thought you meant GO. >> Yeah. So my argument is whether we were raising a dollar or a billion dollars for infrastructure like this, our water,

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wastewater, neighborhood improvements, it is just good governance to do so through revenue bonds. >> Can I just I'm sorry. >> Yep. And we can have Is that your area of expertise? Are you good at that? Maybe

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you could explain that more elementary than I. Um but that is the way 95% of municipalities fund their projects and it's because there's a multitude of issues. Uh one I think we borrow at a

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cheaper level and Jason you you alluded to that where uh it actually costs us less. Um we're able to go out to market quicker. Uh >> so >> well it it is good governance like it doesn't put your general fund at risk.

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Let's say these projects run over, there's more transparency. It just doesn't get co-mingled into this large billion dollar budget, right? It is just the way government is done and and happy to have that philosophical argument. So then it comes, well, if we don't want to

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pass on any increases, which we can have that philosophical debate as well, then we go, well, if we're going to do a $200 million bond over 30 years, how much then should we be looking to offset out of our budget? And that is through the general fund, right? And we can do that every single budget year where we go,

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well, if we passed on $5 per month of increased borrowing to our rateayers, how do we save them that out of the general fund? And I'm happy to champion that issue with you. >> Another thing add something really. >> If I may, if I may, the chair,

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>> hold on. Uh, Commissioner Selenus bot Suarez. >> I just wanted to add that I actually disagree with you, Commissioner Suarez. I don't think someone would not vote for this because it doesn't affect their neighborhood cuz it will eventually affect their neighborhood. It's over the course of time and so they're just going

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to be in that queue. But it's I think our neighbors, you know, are want to help out their neighbors and Miami Beach as a whole. And then it will end up funding, you know, the whole a lot of projects over the course of what we have a four year and a eight-year um in front

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of us. But, you know, but what we need to do is we need to tell folks that this is this is something that's going to benefit everyone. You know, people all over Miami Beach go into different neighborhoods to to dine or to, you

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know, do whatever they want to do. And so, it's it's going to be good for all of us if we if we were to support this. So, I understand your concerns on that because there has been, you know, push back from certain neighborhoods. But I I just don't think that, you know, people will not want to help their neighbor for

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the good of Miami Beach. My opinion. >> Yeah. And and what I also wanted to mention was Commissioner Magazine, you said or you were alluding to maybe we just do a partial, but the problem with that is the longer we wait, the more the other projects are going to cost. In

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five years, they could be doubled, right? So, I don't want to kick the can down the road. I'd rather just deal with it now in for for the next 8 10 year plan and so that in the next four years it's not 50% more. It's not 100% more.

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We've already got the money and we're already addressing it. I think if we're going to do this, I think we should do this now. It'll be generational and it's going to certainly cost the average

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person on Miami Beach a lot less through the operating fund geo bond than a water rate utility. I mean, it it was pretty pretty clear uh from from from staff's slide that it's significantly different.

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So, and I think it's more fair. I think I think it's more fair that we're, you know, we're asking people with more expensive properties to to pay more for um this sort of infrastructure

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as opposed to a regressive tax where everyone struggling um set income residents have to cost to bear such as our seniors and our fixed income. Oh,

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>> through the chair. I I think I was supposed to have been next, so I'm going to jump in if I may. Um, a a couple of questions. Jason, um, the bonds contemplate construction. They don't contemplate maintenance and repair, you know, minor normal course of life of

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project repair. Is that correct? It's just building it. And and the other and I have a couple of other questions, so please let me just um get this going. Um, is that correct? It's just the build. It's not the ongoing maintenance.

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>> Yes, but this would not materially uh impact operations and maintenance the way water, sewer, and storm water projects work. >> Okay, perfect. So, one of the things that I heard in conversation was this notion of um you know, we're going to pit neighborhoods against each other

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because who would possibly vote again for something that doesn't benefit them uh immediately directly in front of their house? Well, we're a seven mile sandbar in the middle of the Atlantic Ocean. I think we're all impacted and so I reject that notion and I think that is only something that gets stirred up by a

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false narrative. I think we're all very cognizant that if you are working in South Beach and you live in North Beach and Mid Beach is flooded, you're affected, right? So, um you know, I I think that is something we need to keep an eye on. Make sure that we are measured in our words when we talk to

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our constituents about um why this matters even if your particular home doesn't flood. I mean, I lived in Beayshore, which has historic flooding and has for decades. My house never flooded. I was there in a 1926 house for 13 years, and I loved it, and it never

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flooded once. I would vote for this 10 times over because I know that my neighbors two blocks down the street, flooded all the time. So, I I just want to put that on the record. I want to make sure that that is heard loud and clear. The other thing that I keep hearing about, we're going to find the money for these in our existing budget.

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You know, I I I appreciate that we all have different priorities, but you know, we've just turned the ship of state on this city. We are being viewed globally as the the um the epicenter of of arts and culture and

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fitness and finance. And why would we undo the work that's taken us a decade? We are seeing historic uh activations and people trying to have events here. We have to beat them away with a stick. Not literally. Don't, you know, for anybody listening up, nobody's

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advocating violence, but I'm saying, you know, we're we're having to say thank you, but no thank you. We are full right now. So, why would we undo that? And I know that it's not everybody's priority. I get that loud and clear, but every dollar invested in arts and culture

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generates $5 in in return. And that is a basic fundamental ROI math equation that is indisputable. And when we are looking at all the other tax cuts that we do not have control over whether they come this

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year at all or partially or fully or in five years you know we need to insulate us ourselves from what happens at the state level. We must make sure that we have revenue coming into this city from other sources and attracting businesses

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and new families moving in who are starting uh their their you know moving their their headquarters down here. All those things it it's additive. Jason, can you give me a ballpark? And I don't mean to give you a pop quiz, but can you give me a ballpark on a couple things?

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How much money we spend on arts and culture every year? how much money we spend on parks and wreck every year and how much money we spend on. >> Yeah, I don't want to confate both departments. >> I don't want to confate >> these two. This isn't

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>> No, but Joe, if you let me finish, please notion of um we're going to >> this isn't a linked analysis, right? Commissioner Suarez's proposal isn't even and I don't even want to spend too much time, >> but the issue is that we keep being we

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keep hearing that we're going to find the savings from other places because we're going to prioritize. >> But that is a totally different item. Totally different. >> We're not going to generate we're not going to generate $650 million to pay for these items. >> Then we address that at that item.

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Right. I >> but it's it's a false narrative that's being put out as part of this narrative. And I would like to just address if we're going to find this >> Commissioner Bot. I I want I want everyone to know I'm I'm not trying to do a false narrative. I'm not simply saying we're going to defund arts and

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culture to pay for this. No, not at all. I think there we have a billion dollar budget. There's only 83,000 residents in Miami Beach. I think we can certainly find efficiencies in our government through perhaps AI. >> And let's keep it at that. I didn't have

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her, you know, I stopped her from going into where those cost savings would come from. >> But I just I just want to make it clear that I'm not I'm not advocating for cut arts and culture. >> It's right. It I mean it's going to have to come from somewhere, right? Like if if but that's not the discussion to have today. That's the discussion that's out

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there in the stratosphere that okay, if we're not going to pass on any type of cost increase, it'll come from somewhere. But those are two different debates, right? >> But I don't think they are. I think they're linked because that's what we're hearing. And so I'm trying to figure out where are we going to come up with $650 million from our budget.

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>> But it's not $650 million, Commissioner. It's $15 million. >> I'm literally I'm literally in the middle of a sentence. and and so, okay, it's $15 million this year and next year it's $30 million and the year after it's a bunch more. And so the question is with all the other stuff going on, you

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know, are we are we making decisions on false um and look, I could be wrong. Maybe maybe we only spend a total of $7 million on parks and wreck and Alba's department and and arts and culture and then you know what, then we have that discussion. But I'm just saying I'm not I'm not slamming anybody. I want this to

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be a conversation. I'm not pointing fingers and accusing. I'm saying I don't think even if we were super austere and cut everything, we wouldn't find the money that we needed to find to fund what we know we need to keep our island literally and figuratively afloat. And

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then there's the the sort of subjective conversation about what do we what do we put out into the world? And um you know, do we put a full stop on the things that people come here for? You know, and that's a conversation. That's a very different conversation. I just want to

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get to the numbers of what what it would be if we rolled all that stuff up and said, you know what, the chair because I have a question on that. If I could throw the chair, >> go ahead. Um, and so Commissioner Suarez's

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proposal, if I understand, was on a yearly basis, the commission would determine at its discretion. It would it it would be its prerogative every year to to figure out whether from the general fund it can and it will uh

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subsidize or or or or shift funding to I guess cushion uh the the impact of the bond on the rest of is would that be a proper explanation in >> uh to the attorney or the CFO?

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>> Yes. I think that's the the commissioner's um concept and and I think as he mentioned >> and so then and so and and so then it would be every year on the commission's discretion and the commission's prerogative based on available funding

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and based on on the priorities. Uh but it's but it's not necessarily set on stone. It's it doesn't become the policy. I from from from what I'm hearing from from from the from the commissioner, he's thinking of something

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that um that could almost be um the word is is is escaping me. Uh but uh >> aspirational exactly a aspirational I think I think what's important here is is a distinction of the approach that

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we're take. The first approach through a re through a through a rate increase to do revenue bonds. We were potentially imposing a significant yearly rate increase on our residents. Us imposing

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it on people who may or may not be able to afford it as opposed to going out to our residents and asking them, hey, these are the needs of of the community. Do you want to buy into this? Do you

416
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want to impose this on yourselves because you see uh that the critical nature and the importance of it? And if the community then says yes, we want to take on this obligation because we see this this priority then in the future

417
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the commissions depending on the economy the the depending on the tax landscape and the policies that that are passed can then determine okay uh on a yearly basis will determine whether we shift uh dollars or or not. But the very basic

418
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question is, you know, are are are the residents willing to to take this upon themselves? And then it's up to the commission's prerogative afterwards if the if if the numbers work out whether whether they do that shift to cushion

419
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the impact on the residents. >> If I may add, >> becomes purely aspirational. If I may add just to because the to kind of put two things together here is there are two different discussions right there's uh are we going to do the projects is it going to be revenue bonds

420
02:12:22.719 --> 02:12:38.719
is it going to be a geo bond and then did we want to have it you know that that aspirational goal every year to offset that I know the chair had been you know because I think there's also two different perspectives and I think the chair had mentioned that you could have that goal to also lower whether it is a revenue bond or not is to have that

421
02:12:38.719 --> 02:12:53.679
um that discussion with the administration say how much is the increase in the you know the offset because of the revenue bond or or the geo bond and lower that. So whether you know there's two ways of attacking that same goal is whether it's it's a geob bond millage uh that you would offset

422
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and lower operating expenses to cover that or it's on the enterprise fund and you're paying it through there and saying what's that impact and I think that's chair I think that was something a discussion you had earlier. >> I I just feel we're elected to make decisions. We don't go out to our voters to ask should we fund the police. We

423
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don't go out to our voters to say, "Should we fund the parks?" That's what we're elected to do. This is part of that, right? So, we say, "What do we feel as if that appropriate number is?" If it's all of it, then we do all of it. If it's none of it, we do none of it. If

424
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it's part of the way there, we do part of the way there. I would like somebody to come up and tell me if I'm wrong, and I am open to being wrong. But I would like somebody to raise their hand and

425
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say, "I'm the expert in the room." And talk about here's the benefits and here's the drawbacks of funding either through a revenue bond or a um geo bond. Who >> and if I can build on that,

426
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>> please hold on. Who is that expert in the room? Okay, because if I'm wrong, then I will fall into place and say, "You know what? We should do a geo bond." But I also want all of us to take this seriously, right? For me, I'm not

427
02:14:14.320 --> 02:14:30.639
dogmatic. I don't need credit. I I actually don't like being this. I I rather take a vote and and not have a bond hanging over our head for the next five months, right? So for me, it's not about I'm not like, oh, this is Joe Revenue Bond magazine. Like

428
02:14:30.639 --> 02:14:46.639
it to me, it's just about what is the best way to do good government? What is the best way? And if I'm wrong, tell me I am wrong and I will gladly shift, right? I'm just coming down on that side of I think it's more appropriate for a

429
02:14:46.639 --> 02:15:02.159
revenue bond because that's my understanding. Not because I have a dog in the fight or or that's my personal preference or that's my middle name. It's just how I've been brought up to understand good government is done. If if it's better to do a geo bond, then

430
02:15:02.159 --> 02:15:18.320
tell me those reasons and I will fall in line. Um, but let's start with that. What is the best way to fund these types of projects? And >> I know you're the expert in the room because you raised your hand, but I don't know your name. So, tell us who

431
02:15:18.320 --> 02:15:33.119
you are and tell us why you're the expert we should listen to. >> Sure. So, good afternoon. Uh, my name is Pete Verona and I am with PFM. So, PFM is the financial adviser to the city. Uh, so this is what we specialize in is doing these municipal bonds day in day

432
02:15:33.119 --> 02:15:49.599
out. uh we do a lot of utility bonds and that is the typical method that municipalities use to issue these projects and I think there's probably two major reasons for that. One is the is the way that they are paid. You know it's it's a user fee. You pay for how

433
02:15:49.599 --> 02:16:06.079
much you use. That that's a typical thing that it's done for utilities. And I think that's probably viewed as a fair way of doing things is you pay for what you use. Uh the second major thing is I I do think that these utility projects that we discuss are so critical that

434
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they have to be done essentially one way or another. There there's not really a choice. A lot a lot of times these projects if they're not done then you you go into a state of disrepair and things just compound and get worse. So you typically wouldn't go to the voters to ask that question because

435
02:16:23.040 --> 02:16:39.599
and and this is a hypothetical. What happens if that vote fails? then you're back to square one where you're going to be probably raising utility rates anyway. So one way or another, the project almost demands to be done. So I think that a lot of municipalities and probably the reason why these are done

436
02:16:39.599 --> 02:16:56.080
99% utility revenue bonds is because you all as the commission have the ability to raise those rates based on your discretion and the question doesn't go to voters where it then becomes a risk. Do do these projects get approved? If I could add on to that, I mean, I could

437
02:16:56.080 --> 02:17:12.559
>> let me let me let me chime in also before it gets lost in confusion because I have a couple thoughts. You're absolutely right. I mean, they have to get done, >> right? It's how do we pay for that's at the end of the day that I believe that's a policy decision. That's why we're having this discussion. How how do we

438
02:17:12.559 --> 02:17:29.840
get to to the goal of of funding them? We certainly can just vote and say we know what we're going to double everyone's rates in the next 5 years and we're really sorry if you're on a fixed income or you're a senior and you can't afford it but you're out of

439
02:17:29.840 --> 02:17:47.040
here or we could do it the more fair way or it's commensurate with your property and that's in my opinion in Miami Beach specifically I think a much more fair way to to fund this. We're going to fund

440
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it either way. And sure, if it doesn't pass in November, if we if my colleagues can sign on and and go to the voters for this, then we're right. We're back to square one. But at least we gave the voters an opportunity to buy into it

441
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instead of forcing it down their throats. So, I believe we just passed a moratorum. It's a it's going to take a 57 vote. I don't think there's going to be enough votes for that. So at this current state where we're going to be able to to fund that project through a

442
02:18:20.800 --> 02:18:36.000
water rate hike. So this is one avenue >> to the chair. If I may, >> if I could just jump in because one of the things I I also think uh about this is that in Miami Beach, I think these infrastructure projects tie directly to

443
02:18:36.000 --> 02:18:51.040
to the value of of your property. They they increase the value of property in Miami Beach. uh it's not just something that benefits a user in the trad in in the traditional way that you know in

444
02:18:51.040 --> 02:19:06.240
with with rates that the that the user pays a rate for the service that they're getting. I think you know you could have properties that sit empty. Uh we have commercial properties that sit empty in our city that could benefit from

445
02:19:06.240 --> 02:19:22.719
infrastructure projects yet they're not contributing a single dollar towards it. uh because they're not using uh the utility yet their property value is going to go up by the improvement to their neighborhood. Why wouldn't they be

446
02:19:22.719 --> 02:19:41.439
contributing uh towards towards a a significant u significant project that's going to increase their their property values and that's that's one of the one of the level and playing fields that I see with um with this going going the

447
02:19:41.439 --> 02:19:57.359
general obligation route. um it's is that is that the the burden doesn't fall completely on the on the user uh and it spreads it out I believe more more fairly and evenly on on on different

448
02:19:57.359 --> 02:20:13.920
valued properties where they will now be contributing um towards towards projects that will continue to increase their own property values. Yeah. >> Uh, if I if I could >> through the chair, if I may, I I just wanted to jump in, Joe, on what you were

449
02:20:13.920 --> 02:20:29.760
saying because I agree with you. Um, and I would actually like in addition to the expert in the room who answered the question that you had. Um, I I would like the city to come back next month and I I I don't think we are ready to vote on this right now and certainly not at the commission and I think it needs

450
02:20:29.760 --> 02:20:44.960
to be hashed out further. I would like the city to come back and say, "Okay, here are the six things that need to be done immediately because we have grants and and other sources of funding that are risk if we don't start the project within 18 months." I I need to understand that because that is we

451
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nobody's talked about that. We have I know in north I can't speak for all the projects, but I know in Northshore D um and I think West Avenue has funding that is attached to it that is not through the city um but that might be jeopardized if this doesn't go forward in in a timely manner. And I want to

452
02:20:59.760 --> 02:21:16.399
understand what's at risk if we don't move forward and what if the the voters do not choose to tax themselves for increased infrastructure. That's number one I want to see from the city. And number two, what I want to see from the city is I I want to understand

453
02:21:16.399 --> 02:21:34.080
what our most urgent projects are because they are whether it's there they it's got funding attached to it that is at risk or because we have a history of major failures there or it's at risk of major failure or whatever it is like you come back to us and say in the ideal

454
02:21:34.080 --> 02:21:49.359
world we would push play on these let's say five projects or 10 projects and then back out what would it take to do a rate increase to cover just those and then we could do everything else through um through a a a bond question or what

455
02:21:49.359 --> 02:22:05.760
would it take to fund those immediately and then spread out the additional cost for the rest of those things over seven years instead of five years. I want options. I'm not seeing options now. I nobody wants to make this hard for everybody. But the fact of the matter is is that the commission for the last 30

456
02:22:05.760 --> 02:22:21.120
freaking years kicked this can down the road. They didn't even have CPI increases which is a dereliction of duty. It is an abrogation of fiduciary duty and that is really important. Okay. So I just I really want to understand what our options are.

457
02:22:21.120 --> 02:22:37.280
>> Okay. So here's where I can come down. Right. We have a handful of projects that we have significant funding for are at the one yard line. I mean we've talked about First Street for years. Okay. We're at

458
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the one yard line on that. We have funding we're going to lose. We need to do that ASAP, right? We have tractor trailers out on West Avenue ready to start that and we need $7 million, right? So, I want the city administration to come back and say,

459
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"Here's the projects that are literally at the one yard line that the residents have been working on for years, and these need to go forward." And then I will bring it to a vote. I know we have the moratorum in place. Bring it to a

460
02:23:08.880 --> 02:23:24.479
vote for our colleagues. These three to four projects, let's call it total 100 or $150 million. We can vote to uh issue revenue bonds for those. That would be

461
02:23:24.479 --> 02:23:41.520
$5 per month. And I am happy to support a resolution that would say and here's the offsetting savings in our general fund if we want to essentially keep expenses flat. And then for the more projects that are critical but not at

462
02:23:41.520 --> 02:23:58.399
the one yard line that we need to do right now with expediency if we want to put that out to the voters. I don't agree wholeheartedly with that and I'd like to drill down with our expert more about how we get there. But we can further that discussion and if it's the

463
02:23:58.399 --> 02:24:13.840
will of the body to throw the bulk of that remaining $600 million to the voters for your geo bond, I think we do so. But we can't sit up here and say, you know what, we're not going to take a vote

464
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to do First Street. We have promised that project and it is at the one yard line. We're going to lose funding if we don't do that. Right? We have the bulldozers and the plans and we've paid tens of millions of dollars in design and we only need another $5 million for

465
02:24:29.920 --> 02:24:46.720
West Avenue. Right? So, we could vote to move forward with those projects literally today and issue bonds that will only cost the average resident $5 a month and the average condo dweller $3 per month. And if we want to say, you know what, let's

466
02:24:46.720 --> 02:25:01.600
find that cost savings every single year in our general fund. Let's do that. And then for the rest of these projects, we can put that out to the voters. I I think that's compromised and and I would begrudgingly

467
02:25:01.600 --> 02:25:18.720
move forward with something like that, >> Mr. Chair. But I hear you. Um, but don't you think that's why we're in this predicament in the first place is because the commission over the years have been cherrypicking what to fund,

468
02:25:18.720 --> 02:25:34.800
what to raise to fund a certain project over the years. you know, I and and by the way, I don't I'm certainly against delaying this because I think by September 5th, you know, that's the deadline that we need

469
02:25:34.800 --> 02:25:51.680
to submit for a uh referendum question. I don't we can't wait. We're going to have to take a vote today >> through the July 24th. >> Oh, July 24th. So, it's even more of a right because we have to go through our own internal procedures. So I don't I

470
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don't think there's any appetite, at least for me, to wait another month. We can't if we want to make this happen this year. Correct. >> The commission would need to have two hearings in order to issue a geo fund. >> Correct. >> So that would have to be June and July. >> Yeah. So we have to move this forward

471
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today. Now the details of of what we fund obviously can is can can happen between first and second reading. But, you know, I think the reason why we're here today is because every commission in in years past, not us, not blaming

472
02:26:24.720 --> 02:26:41.280
us, is that they there's a critical needs project and we raise it just for that project. I don't want to ever have to visit this again, at least in the next 10 years. And >> and we're it's going to get, like I said, it's going to get funded. It's either going to get funded through a geo

473
02:26:41.280 --> 02:26:55.840
bond or we're going to have to tell the residents, listen, you know, you guys, you didn't want to, you didn't want to do this. We have critical need infrastructures that we have to fund. We're going to have to either do it through a water rate and and surpass the

474
02:26:55.840 --> 02:27:13.359
57s vote or not. But at le I I really want to see buyin from the residents to see, you know, what what their appetite is on this. And I I don't you know I think I was at a community meeting and and someone said well the

475
02:27:13.359 --> 02:27:31.120
reason it's not going to pass is because you're not selling kittens and puppies which is what the last geo bond was. I don't think so. I I have a I have very good faith in our in our residents and our taxpayers to know and understand that we have infrastructure needs and

476
02:27:31.120 --> 02:27:45.840
they're going to do the responsible thing and and want to vote in favor of this. So, I I think that's a much better approach. I mean, if you start bifurcating specific projects and saying, "Well, you know, it's only going to be $5 $10 a

477
02:27:45.840 --> 02:28:03.120
month extra." You know, you're picking winners and losers, right? I I don't I want to I want the whole city to be a winner in this >> through the Mr. Chair, if I could just ask >> Commissioner Selenus and then

478
02:28:03.120 --> 02:28:20.080
Commissioner Fernandez. Thank you, Mr. Chair. Thank you, Commissioner Fernandez. Um, I just have a question here. Um, is there a way that we could and and I want to add, by the way, that I also advocated for this to go to the voters because I think our voters are

479
02:28:20.080 --> 02:28:36.720
smart and I think they would do the right thing. And again, it this impacts and affects and it helps the whole city. So, I I I feel fairly confident that this would pass. I mean, who knows? I don't have a crystal ball, but I do think our voters are very, very smart and they understand that this needs to

480
02:28:36.720 --> 02:28:53.200
happen and we would have their buy in versus not. But I do have a question because what if we what if we did a revenue bond for water sewer rate and then did the geo bond for storm water? Could we do something like that, Jason?

481
02:28:53.200 --> 02:29:10.319
>> Um, and then what would be the rates there be? Okay, let me um you did you did ask me that and I'm trying to do a little back of the cocktail napkin, but yes, and I think because there's parties on both sides, right? Utility rates and and geo and that kind of splits the the model a bit, but yes, that absolutely

482
02:29:10.319 --> 02:29:27.760
could be done. The storm water component um if it was geo uh which is anti- flooding and I think that's one thing that you know you talk about where the revenue bond is water and sewer that is truly you use what you pay for what you use. I understand that that concept. I think that that passes some good muster.

483
02:29:27.760 --> 02:29:44.080
Um, so on the go side, it be 337 millionish uh for storm water. And if I looked at I just tried to do very back of the cocktail napkin for my model here and taking that 337 into the 783 which is the total and splitting that's around

484
02:29:44.080 --> 02:30:01.840
43%. So, if I just took the um tax impact um to the median out in 2035, which is the highest, it would be about $84 a year. Um and in 2029, which would be the first year debt service, around $25 per year to cover the storm water

485
02:30:01.840 --> 02:30:16.960
component. Back in the cocktail napkin, we'd have to go back and refine and get very specific numbers, which we could do if this comes out of committee this way uh for for for commission discussion. And then on the utility rate side, I think in talking to the team beforehand, again, back to the cocktail napkin,

486
02:30:16.960 --> 02:30:34.160
instead of that around $15 a month, let's say, um, it would be closer to half of that amount. I believe it would be like at a $7 to 8 per month range if you just covered water sewer. So, you can cut the utility rate increases in half >> by delivering that through revenue bonds on the water sewer side and on the storm

487
02:30:34.160 --> 02:30:51.200
water side if you issued that as geo bond. I I think that's a way of having much lower rate increases than was originally contemplated. Um it's kind of splits the difference a little bit. It it it shares on the property tax side. Um and it gets to that mutual benefit

488
02:30:51.200 --> 02:31:06.880
kind kind of situation where I think maybe from a voter's perspective flooding they can really especially now and those of us that lived here a long time remember it was dry and it's a lot more wet. um maybe can get behind that perspective and say this is going to tackle flooding citywide because you go from first street to Northshore D but

489
02:31:06.880 --> 02:31:22.800
water so it's it is what you use you you know I turn the water off when I'm brushing my teeth you know little things like that you have kind of things that you can do to mitigate those costs so those are the back of the cocktail napkin about half of the your utility rates increases would be cut in half

490
02:31:22.800 --> 02:31:39.120
before it gets to CPI out in 32 and my very back of the cocktail napkin numbers are let's call it an 85 $5 max uh millage for a median homesteaded uh property value. So yes, that is a definite I'd like to make Hold on. Hold

491
02:31:39.120 --> 02:31:54.080
on. Commissioner Bod, it's Commissioner Selenus, then Fernandez. >> I'd like to make a motion for us to bring that to the full commission to explore that model. >> Yeah, I'm fine to explore a lot of things. We're going to have a laundry

492
02:31:54.080 --> 02:32:09.439
list of stuff at the end. Um, Commissioner Fernandez and then Commissioner Bot. >> Yeah. And just um just just two points. Uh, Mr. Chair, I think I think you you brought forward uh a concept where where

493
02:32:09.439 --> 02:32:26.880
you're being very very responsible and taking great leadership and thinking of those projects that that truly are shovel ready. Uh if I could ask the public works director or the CFO, how many NIPs do we actually uh have uh in

494
02:32:26.880 --> 02:32:41.280
in this presentation that we had today for for the bond? How many neighborhood improvement projects were contemplated in it? >> There were five total. It's four, but two phases on one of them. >> I think it's Yeah. First, First Street,

495
02:32:41.280 --> 02:32:58.960
West Avenue, uh Northshore D, Normandy. >> Mhm. And I think and just you know on the cash side it's not in the debt model but there is design work for one or two other ones. Yes, Flamingo and Nautilus and I may have some of them off but uh so there is design work because we can't

496
02:32:58.960 --> 02:33:14.880
we don't want to uh issue geo bond because that was that model for for design not construction. Before Commissioner Fernandez makes his comments, I'll put another thing in that I think he'll allude to as well that went into my thinking when looking at those specific projects is we have

497
02:33:14.880 --> 02:33:30.560
significant amounts of state funding for those two projects, First Street and West Avenue, where if we don't move forward, we lose those. Those total >> $55 million, >> right? So, if we don't do those projects

498
02:33:30.560 --> 02:33:46.880
immediately, we we're in danger of losing that state funding. So, it's not just shovel ready, but those two projects specifically, we have $55 million of state funding that could dry up if this gets voted down and we uh

499
02:33:46.880 --> 02:34:03.920
don't have a pathway forward. So, begrudgingly, I'd be fine sending this broader swath to the electorate, but I'm not willing to not make a hard decision and risk $55 million in state funding. So, Commissioner Fernandez, I'll turn it over to you with just adding that

500
02:34:03.920 --> 02:34:21.840
additional component as well. Yeah, I I mean I think I I I think you're you're being very reasonable where where perhaps we identify okay which are the you know these these handful or you know

501
02:34:21.840 --> 02:34:38.560
these very few lowhanging uh fruit projects that are you know ready to to shovel ready shovel ready to move forward and where we may even have uh funding that we may lose and identify

502
02:34:38.560 --> 02:34:55.280
those, segregate those, you know, proceed uh with a revenue uh bond on those because the impact on the on the customer on our users uh wouldn't be as significant because quite frankly, you know, the problem is the rate increase

503
02:34:55.280 --> 02:35:11.520
that was brought to us. the the the the sheer significance of it when we talk about $1,000, you know, within a few years on an annual basis to to to our residents on something that isn't a luxury. Water and sewer is a bare

504
02:35:11.520 --> 02:35:28.319
necessity and they can't do without it. And so so when we were talking about $1,000, that is quite significant. Now if we go back and we say okay we have this handful of projects these are truly ready shovel ready and we actually uh

505
02:35:28.319 --> 02:35:45.840
may put ourselves in a worse in a worse fiscal position because we'll lose state funding if we don't move forward on those now and look at what the rate increase would be on that and then you know work on everything else through a general obligation bond that would also

506
02:35:45.840 --> 02:36:01.680
be u of a lesser impact to the residents. I'm not opposed to that. I'll be open-minded. Um be because I see I I see the merit in that, Mr. Chair. Uh and I'm and I'm willing to to to to be

507
02:36:01.680 --> 02:36:18.800
open-minded on it. Uh I also like the idea um that uh Commissioner Matil Selenus was just putting out there. Uh, I want to hear more about this idea about um, you know, focusing storm water

508
02:36:18.800 --> 02:36:35.840
on on on the bond. I I know that's included now. And one of the reasons why I like doing storm water through the general obligation bond is because right now uh you know we have this this eru system for for for storm water where we

509
02:36:35.840 --> 02:36:53.280
rely on these classifications and formulas that might not really capture the difference in how different homes and different properties of different lock coverages use uh the storm water drainage system and everyone's pretty

510
02:36:53.280 --> 02:37:09.760
much paying the same uh towards it no matter how more significant their impact is. Uh and so I always liked the idea of the storm water uh system being through a bond because it'll be more equitable

511
02:37:09.760 --> 02:37:25.680
in its distribution of the of the of the impact. But Mr. Chair, I just wanted to put in there I kind of like where you were going with that because they're certainly not all projects are the same and they're not all in in the same phases and I do think that there might

512
02:37:25.680 --> 02:37:40.800
be a couple that might be more urgent to move forward on that it might be prudent to consider what you're suggesting. >> John, >> I'm sorry. I think I think I was going to be up next. >> Commissioner B and Commissioner Suarez.

513
02:37:40.800 --> 02:37:56.399
>> Thank you, Joe. Um I I um just want to add to your list of $55 million at risk. Um it's another $10 million for Northshore Deep. So um just so we're all >> That wasn't exhaustive. Those are uh >> No, no, I know. >> Yeah, I'm fine. That's

514
02:37:56.399 --> 02:38:13.359
>> Yeah. So um the other thing is I wanted to echo Monica's I know I can't vote on this, but I absolutely co-sign her idea of coming back and bifurcating these. when I was talking about bifurcating things, I was not talking about choosing projects and winners and losers, but

515
02:38:13.359 --> 02:38:28.720
types of projects which are more urgent. And so, um, you know, bifurcating the way Monica suggested, it feels exactly right to me. So, I really encourage the voting members of this committee to to take that up and bring that back. Thank you,

516
02:38:28.720 --> 02:38:48.960
>> Mr. John. Just want to make sure. >> Sorry, we're trying to the the grant funding portion are are we at risk or is it still okay as long as we're working >> so for Northshore D in particular that grant funding is for design currently we are looking at grant opportunities for

517
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construction but from the design perspective we should be okay as long as the design is finished within the time period in which it's on >> 5th for example >> I'm sorry >> for all of the projects >> well for no for uh first street that does have to be constructed we will run

518
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out of time if we don't move forward on that >> what is the timeline. >> I >> Well, I think I think what he's asking is we would be at risk on the West Avenue and the First Street if we're just not going to build it because we just don't have the financing mechanism.

519
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As for uh deliverance of that, I believe uh First Street is is in design and permitting. Um and I think we talked about you would be in a position to be maybe in construction in the next 12 months. >> I think it was a little more than that. >> 189.

520
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>> Oh, 2029. If we have time, we're not going to lose grant funding in the next 6 months. If we for let's say for example, we want to go to a geo bond to see if we can get this funded through through the operating. >> Correct. >> It's we're we're not going to lose it on

521
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the next six months. Correct. >> No. No. Not the next six months. >> No. Yeah. >> Just want to make sure that we're clear on that. So, for those who are watching, at least until 2029, we're we're we're okay. because it's in that project's in per in permitting. Nor shard knee is out

522
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of is out of uh pretty much out of funds. So starting July 1st, that project will be put on pause until we uh you know identify because it's a big number. It's like $135 million for the next piece. Um and then uh West Avenue is almost we need to move forward. Um I I certainly don't think we should be

523
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deferring this to next month because we we will we will not have enough time to put this on the ballot. We can discuss it between now and there is >> my motion on the floor was to bring this to the commission. >> Perfect. I'll second. >> Okay. Thank you. And it but it was by

524
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bifurcating the storm water. >> Well, how about we how about we how about we have staff bring all the options and we decide at the commission. >> Okay. >> Between, you know, first when I see those faces, I know to let this guy talk.

525
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>> No, I've I've a lot of options have been presented. There's been suggested direction as far as us ranking what's critical and then we're talking about neighborhood improvement projects doing those. That's the bulk of the ask. Water and sewer is priority. That's what we

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are obligated as a utility to deliver to the residents. So if anybody asks me what's critical in here, >> so can you send a letter to commission breaking those out? >> Breaking out the water and sewer critical needs. >> Just those. >> Yeah, we can. If we can, we can take th those projects uh and break those costs

527
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into the water versus storm water. >> Some projects include both. >> The NI the NIP specifically, you have to do both. And that was what we were kind of talking about on on the side. And if I can trying to I think we have a path to continue this discussion a bit at the commission, but trying to refine this

528
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down into a couple >> is I I know there was a motion. and it was second to techn return to commission with a favor recommendation prepare geo bomb mail question for storm water uh and to increase utility rates for water and sewer. That being said, uh, as part of the item, the other options can be I

529
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think what Commissioner Magazine uh was speaking about and I think Commissioner Fernandez and Bot were weighing it also was what would it look like if we just uh ran a model to if I can not even what it would look like? I my my motion um

530
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will be carving out First Street West Avenue because we're at the one yard line and we have $55 million in grant money for that. So even if voters said no, I'd say we have to go forward with that anyway

531
02:42:34.479 --> 02:42:50.800
>> because we'll lose $55 million. It may not be for 6 months, but like you know even if they said no to the broader uh menu, which may or may not happen, we would need to go forward with that. So, let's just do that now through

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the utility. That'll be the minimum >> $3, $4 per month, right? We could find offsetting out of our general fund. We're going forward with that no matter what. So, let's carve that out and start that process right now. We've been waiting for 10 years. Let's just do that, right? We we can make that

533
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decision. Not only are we at the one yard line, but we have $55 million. We're not going to give up. So, let's just admit we're going to do that come hell or high water. Sorry for the punt. Um, if there's other projects like that, I'm happy to see the administration

534
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given those, you know, uh, kind of directions that I put in place where we're at the one yard line. Very significant amount of state funding that could be at risk, highlight those if they exist and we could consider them. But at least for those two projects, First Street and West Avenue, I want to call

535
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>> and Normandy Northshore D, please. Well, I I will leave that to Jason because there there's a different component where it's like that's a design, but I want to leave that to the experts to explain, not me. Um, >> but for those, you know, those two where we're at the one yard line where West

536
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Avenue is going to happen next week, well, next month hopefully. Uh um but for those two, that'll be my motion to send those that we vote >> to move those uh projects forward with funding through um utility bonds. Okay.

537
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>> And then send the broader package. I'll second that. Yes. As an option. And yeah. >> And the other option is the whole shebang on >> Yes. If I if I may. Uh yes. So, we'll we'll do uh Commissioner Selenus uh Selenus's motion seconded by

538
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Commissioner Suarez with the add-on to prepare other options including but not limited to uh and all utility rate utility rate increase uh cost to ensure First Street and West Avenue uh would be uh paid for

539
02:44:45.840 --> 02:45:02.800
and and um perhaps an option that funds other important shovel shovel ready or design ready projects as determined by public works. So you have some option, you have some flexibility perhaps to look through that critical needs of ultra critical needs. Um because there's

540
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some DOT work that we're contractually obligated to find money for. So let's have a we'll call it a public works slim down very slim down model to see what a utility rate >> not even ompic I mean like true tide slim down. Okay. >> So can I clarify West Avenue phase three

541
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just for the record and first street phase one and two. >> Yeah though it's a good question. Is it phase? Because the whole thing is designed. I believe all four phases are in. >> So tell me what are there only two for first street or are there three? >> There's four phases and two together.

542
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The ones that are mission critical right now, >> not the three and four. And that will give you the ability to leave here and go start paving Washington Avenue from Fifth Street to First Street. Okay? Cuz three and four are never going to happen. Okay? They're never going to

543
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happen. So, let's just admit that now. Let's fund one and two. >> Let's pave Washington Avenue from fifth to second, which I know you're going to do because there was a commission uh item and >> but it's things like that we shouldn't even be including

544
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>> for this revenue box because that's what makes it $5 billion and it's just not going to happen. But we can get 95% of the way there by being realistic in funding things like phase 1 and two and then we can also move forward as a city.

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02:46:23.120 --> 02:46:38.720
Does anybody see what a difference paving 17th street make? >> It it's almost like we live in America. It it is beautiful, right? But the bang for our buck that we got from that. John, thank you to you and your team. Incredible work you did. Let's see that

546
02:46:38.720 --> 02:46:55.200
on on Washington Avenue from Fifth to I guess called First Street right there. It is an embarrassment. Right. So doing this highlighting the critical projects that we move forward with also allows us to move forward as a city. Gotcha. And

547
02:46:55.200 --> 02:47:11.279
so so we'll we'll show that motion the G g and storm water utility rates for water and sewer is option one. Option two will be the one we spoke about. First Street phase one and two and West Avenue uh as a utility rate and then we'll have a third option which we'll call the public works super slim down

548
02:47:11.279 --> 02:47:26.319
option. I'll come up with more for Natalie on the minutes will be a little bit more refined term >> nothing besides the waste water >> well the water sewer but probably not the storm water but we we will we'll get it'll give public works a little flexibility

549
02:47:26.319 --> 02:47:42.560
>> storm water I think if we're going to go can be included in the >> public works will deliver a third or fourth option uh and what that would look like from utilities >> Jason are you >> Jason can you can you make sure that everything that has public funding that is not coming from the city is included

550
02:47:42.560 --> 02:47:58.240
in one of your critical options this, you know, slim down, whatever you want to call it. But I want to see everything that is has money at risk that we >> Yes, commissioner. I believe that was the chair's intent was that his option or any other option would include that we we're not losing money through a

551
02:47:58.240 --> 02:48:13.439
grant. So, anything that's grant funded, we'll make sure it's in the model. >> All right. >> Okay. Thank you. >> Jason, do you have an $80 million revenue bond that you're also issuing for water and sewer? Uh there there is a there's already a standing declaration of intent to issue for $85 million which was about a year

552
02:48:13.439 --> 02:48:29.040
or so ago which I will be issuing but the existing model had the capacity for that. These rate increases would not be >> what is that for the >> there was a I think it funded all of 2025s or 26's um uh water sewer needs at that time. It was a laundry list of of

553
02:48:29.040 --> 02:48:45.600
projects. >> Okay. So, I think we have a motion by Commissioner uh Monik Selenus uh and seconded by Commissioner uh Suarez. >> May I call the final vote, chair? >> Yes. >> Uh all in favor say I.

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>> Item passes three to nothing. >> So, we're going to hear this on June. Great. >> Oh, yippee. >> This will be fun having this for seven people. >> Thank you, Mr. Chair. Thank you all. Thank you.

555
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>> Um, if we wrap this up early, John, can we uh mean you'll go out to Washington Avenue and get this started or what? >> We're getting there. They're finishing up 17th and then Alton Court has another uh another request and then Washington.

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>> I know you are being pulled in a million different directions. Literally now as you're walking away from the podium and being pulled back literally and figuratively being pulled in a million directions. Thank you and your team. >> Yes, sir. Thank you. There's probably nobody in more of a political whirl

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storm than you and your department right now. Stick with us. What you are doing is as critical to our city as possible. You are a resident that is in the thick of this as both an employee and a resident and we thank you and your team for the service. Appreciate >> that. Thank you.

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>> Thank you, chair. Are we done? >> No, I'm not going to say the same about you, Jason. My goodness. Yes. Let's wrap. >> Okay. >> We're going to we're going to adjourn the meeting. >> Yes. >> Thank you all.

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>> Thanks. Oh, thank you all.