The G.O. Bond: Behind the Numbers

Susan Askew
Susan Askew

The G.O. Bond: Behind the Numbers:

Early voting starts October 22

This year’s Miami Beach ballot initiatives include establishing an Office of the Inspector General, leasing City-owned land for a hotel connected to the new Convention Center, and a General Obligation (G.O.) Bond. Following is a look at the G.O. Bond initiative which will be voted on as three separate questions. 
 
After attending numerous public meetings on the topic, we interviewed Miami Beach CFO John Woodruff about some of the most frequently asked questions.
 
Overall, the Bond questions include 57 projects and total $439 million.
 
Ballot Question 4: Parks, Recreational Facilities and Cultural Facilities ($169 million)
 
Ballot Question 5: Neighborhoods and Infrastructure ($198 million)
 
Ballot Question 6: Police, Fire and Public Safety ($72 million)
 
How the projects were chosen: Approximately 1,000 residents participated in surveys or via public meetings and provided feedback through local neighborhood organizations. A G.O. Bond Advisory panel of 11 residents appointed by the Mayor narrowed the list using the feedback provided. The City Commission considered the projects and approved a final list to go to voters.

According to the City’s Voter’s Guide, the G.O. Bond Advisory Panel decisions were based on:
  • Public input support for the project
  • Long-term return on investment associated with the project
  • Quality of life enhancements associated with the project
  • Citywide impact associated with the project
  • Equitable distribution of enhancements to Mid-Beach, North Beach, and South Beach
  • The resiliency and/or safety benefits associated with the project
 
More information and a 6-minute video can be found here
 

Interactive tools


Calculator to see how the bond impacts you based on your taxable property value

Map to view projects by neighborhood
 
 

Why now?

The City Commission and Administration determined the low-interest rate environment and the City’s favorable credit rating made this a good time to ask voters to support some of the large-scale projects that have been approved but not funded.
 
The City’s low debt also played a factor. According to the Voter’s Guide, “As of September 30, 2017, the City’s property tax supported debt is $41.8 million, which amounts to less than 1% of the $5.6 billion assessed property value in the City. The State of Florida limits property tax-supported debt to no more than 15% of the total assessed property value in the City, which means that the City cannot have more than $835 million in property-tax supported debt outstanding. If the proposed Bond Program is approved by the voters, the City’s tax supported debt would be 8.9% of the total assessed property value in the City, which is well within the 15% permitted by law.”
 

Why doesn’t the City fund these projects out of its general budget?

Miami Beach CFO John Woodruff says the City uses bonds to borrow money to fund large projects over time. It is a common practice, he says, among municipalities, the “go-to funding mechanism to do large capital projects,” similar to the way homeowners use home equity lines.
 
Because the City continues to maintain a low millage (property tax) rate – currently the lowest in five decades – there has not been funding available for large projects. The annual operating budget is allocated toward costs such as “maintenance, personnel, operations, and public service programs,” according to the Voter’s Guide.
 
In FY 2019, sources of capital funding for general capital projects total $7.3 million. “If you don’t do a G.O. bond, you’re only able to do the small scale projects and the most critical projects, which really means something you don’t do many quality of life or nice to have projects.”
 
“Most residents of Miami Beach, that’s really not what they probably want,” Woodruff said.
 
For example, the City’s stormwater bonds are funding underground projects for sewer and stormwater infrastructure as well as resiliency efforts but those bonds cannot be used for above ground improvements. The City’s general fund budget and capital monies are not enough to pay for new landscaping, lighting, or sidewalks once the projects are completed.  “If we don’t do the G.O. bond, we’re not going to have the money to do many of the above ground improvements,” according to Woodruff.
 
While most people understand the concept of putting money away in a savings account or, in the case of condo associations, a reserve fund, governments don’t work that way, Woodruff said. There are many political pressures to spend money rather than keeping it sitting in a reserve fund. “Usually you do a G.O.-type bond to fund these types of projects,” he said. 
 
In Miami Beach, Woodruff added, when property values increased City Commissioners historically have said, “We’d rather have a very low millage rate and pass that on to the property owners of the City rather than have a higher millage rate.” The City has still collected higher taxes, though, as property values have gone up, only the rate has remained the same.
 
Following the Great Recession, Woodruff said, the City experienced a strong rebound in property values. “In that strong rebound, the decisions were made to lower the millage rate. Some of that makes sense when you have extra high growth. But there’s a certain point where we’re probably not adequately funding things… basic type maintenance that’s capital related,” he said.
 
The decision made to pass the savings along to the property owners, he said, “sounds great until you run into a situation where property values aren’t growing as much” which is the case now. At that point, he said, “You’ve lost your chance to set aside a good amount of money.” The option of raising millage rates is something “people don’t want to do. It’s not political viable.”
 
The City is also playing some catch-up with projects that have been deferred for a while. “The Great Recession had a lot to do with that,” Woodruff said. Sidewalks are one of those projects. 
 
The City is now working to “build up our capital accounts in our operating budget” so that “10-20 years from now, you wouldn’t see those kind of projects in a G.O. bond because we’d have the kind of funding” needed for those, Woodruff said.
 
“Folks see some of these projects and say ‘Gee, why are you showing me playground replacement and sidewalks. Why isn’t that already in the budget?’” he recounted. “I’m not saying that’s not a legitimate concern. It’s just that we want to try to fix it.”
 
As to the big projects, “You need a G.O. bond because that’s exactly what the G.O. bond is designed to do,” fund large projects over time, he said. 
 

Why can’t resort taxes fund these projects?

Woodruff says the City benefits from a strong tourist base. As a result, only 53% of our revenue comes from property taxes. In most cities, it’s higher, he said.
 
While the Resort Tax Quality of Life funds are providing $1.4 million for each of North, Mid, and South Beach in FY 2019, the rest of the Resort Tax dollars must be spent on items related to tourists and tourism. He said there have been some funding for projects in “parks on the water frequented by tourists … [but we] don’t have hardly any funding for neighborhood parks… youth centers for example used by residents.”
 
The City’s youth centers are in need of “big improvements,” he said, but “we don’t have any real money to help us do that. That’s really what’s driving the G.O. Bond," the projects for residents that have gone unfunded. "The Par 3 [Community Park] has been sitting around for a long time, but we couldn’t afford to actually execute the design.” 
 
“The Middle Beach beachwalk, we’ve only been able to set aside a small amount of money per year,” he said. “It can feel like it’s taking forever… and I get it.”
 
For residents who have been waiting, he said, “This G.O. bond program is one of the best ways to get this done quickly… There might be other ways to get there, but I can safely say this is one of the best funding mechanisms to make projects happen.” It is a “common tool,” he said. “Interest rates are low. It’s a good time to borrow.”


 
Source: City of Miami Beach


 

How will this impact my property taxes?

Because the City will not draw down on the entire amount all at once, the property tax increase will be implemented over a ten-year period, phased in over time.

To see specifically how you will be impacted, the City has created a calculator.

Enter your taxable property value, and it will show you, beginning in 2020, the cost to you. Slide to the right and you can see how much you will pay in each year until 2030. After 2030, the amount remains flat until the bonds are paid off. 
 
We asked Woodruff how the burden, over time differs between homesteaded and non-homesteaded properties. In an email, he provided the following data points:
 
  • Homesteaded properties make up 24% of the properties in Miami Beach.  However, they only pay 16% of the property taxes. 
  • That means that 84% of property taxes (and the cost of the G.O. Bond) would be paid by non-homesteaded properties such as commercial businesses, owners of vacation homes, etc.  
 
Woodruff also shared that:
  • 18% of Homesteaded properties have a taxable value of less than $100,000 (GO Bond: pay $82 or less between now and 2030)
  • 51% of Homesteaded properties have a taxable value of less than $250,000 (GO Bond: pay $205 or less between now and 2030)
  • 75% of Homesteaded properties have a taxable value of less than $500,000 (GO Bond: pay $410 or less between now and 2030)
 
 

   



What about resiliency? How is the City addressing its efforts to combat flooding and sea level rise in the G.O. Bond? 

The City has planned to spend a total of $500 million on stormwater system upgrades. As noted above, those bonds cover below ground infrastructure. The G.O. Bonds include above grade improvements among other blue and green infrastructure recommended by the recent Urban Land Institute “red team” assessment of the City’s resiliency efforts.
 
Woodruff said, “Approximately 25 percent of the projects in the Miami Beach G.O. Bonds are directly resilient” or $117 million of the $439 million total. 
 
In an email, he broke that number down as follows:
 
51% of the Neighborhoods & Infrastructure Bond is directly Resilient
(Resilient Seawalls $10M; Above Ground $85M; Street Trees $5M)
  • Resilient Seawalls and Living Shorelines ($10 million)
  • Above Ground Improvements (total $85 million) [covers next ten years of planned stormwater/water & sewer projects]
    • Neighborhood Above Ground Improvements ($43 million)
    • Flamingo Park Neighborhood Improvements ($20 million)
    • La Gorce Neighborhood Improvements ($14 million)
    • North Shore Neighborhood Improvements ($8 million)
  • Street Tree Master Plan ($5 million) - up to 5,000 tree plantings that would consider the overall benefit to the city’s green infrastructure as well as strategic planting of trees to improve our stormwater management capacities. A properly planted large species tree can contribute an added 4,000 gallons of stormwater management once matured.
 
10% of the Parks, Recreational, & Cultural Facilities Bond is directly Resilient 
  • Green/blue infrastructure in various parks projects ($17 million included in the projects below in addition to the normal project budget)
    • Par 3/Community Park
    • Flamingo Park & Youth Center
    • Maurice Gibb Park
    • 72nd Street Park, Library, & Aquatic Center
 
He also noted, “Many projects will incorporate resiliency elements due to new design standards (ex. Fire Stations #1 and #3) or are indirectly resilient (ex. roof replacements may consider white or green roof designs).”
 

How will the projects be prioritized?

“After the vote, we’ll be working on sequencing of the projects, which ones comes first, taking into account the operating and maintenance costs of some of these projects,” Woodruff said.
 
Other considerations, traffic impacts and determining if there’s a “synergy or conflict where it might be disruptive for residents.”
 
“In terms of priority,” he said, “We are looking at it at least over a ten year time frame.”

“We’d also be aware that folks want to see results. There’s a lot of parks-type projects that could probably move pretty quickly.”
 
“The youth centers… we wouldn’t want all three to be under construction at the same time,” he said. Whenever one would be under construction, programs would need to move from one center to another to ensure as little disruption as possible.
 
“There’s a lot of thought that needs to go into it,” he said. But there is time. If approved, “We probably wouldn’t have the first tranche in hand until March-April. We’d want to have it all figured out by then.” He noted the City Commission will be involved and there will be a G.O. Bond Oversight Committee as well as transparency tools on the City’s GOMB website to update timelines, project status and spending. 
 
In addition, also on the ballot is a question to set up an Office of the Inspector General. If approved, that office will provide additional oversight of the Bond Program.
 

The Questions and the Projects

 
Below is a look at the top five projects by cost in each measure with links to all of the projects.
The project descriptions are from the City’s Voter’s Guide with additional info noted by us.
 
All 57 projects are mapped in an interactive tool. Click here to see how they are distributed throughout the City and what’s planned in your neighborhood if the bond measures pass. 
 

Ballot Question 4:

To improve the City’s parks, recreational facilities, and cultural facilities, including playgrounds, baywalks, beachwalks, waterways, landscaping equipment, lighting, security, and parking related to such facilities, shall the City be authorized to issue general obligation bonds, from time to time, not exceeding $169,000,000 in aggregate principal amount, payable from unlimited ad valorem taxes, bearing interest not exceeding the maximum legal interest rate, and maturing no later than 30 years from issuance date?
 
30 projects to upgrade 20 parks throughout the City.
 
As noted, City CFO John Woodruff says 10% of this bond is directly resilient including the Par 3/Community Park, Flamingo Park & Youth Center, La Gorce Neighborhood Improvements, and the North Shore Neighborhood Improvements. 
 
72 Street Park, Library & Aquatic Center: $53.8 million
"For new facility at 72nd Street between Collins Avenue and Harding Avenue that includes a new recreational park space, rooftop competition pool, library and media center, fitness gym with running track, and parking garage."

As the largest project in the overall Bond proposal, this one generates a lot of comments.
 
Its genesis was in the North Beach Master Plan. Master Planners Dover Kohl wrote, “Residents of densely populated cities typically do not have a substantial private yard. As such, they depend upon public parks and trails for their connection to nature and for their recreational needs.” This project, located at the beginning of the proposed North Beach Town Center, contains many of the items suggested in the plan including park and recreational space. It would be across the street from the current North Shore Park's tennis courts and baseball fields and the Youth Center, creating what has been called a "recreational corridor."
 
The North Beach Master Plan also suggested the potential of a “prominent civic building” that could include “a public library branch (replacing and enhancing the one currently located at 75th Street.)”
 
The library and the competition pool have generated numerous comments and questions. Though there is more to this project than those two things, because they are the topic of many conversations, we asked for more details on those components.
 
One of the questions that comes up often is why doesn’t the County pay for the library? Woodruff told us in an email, “The City provides the facility and the County provides the operations. My understanding is that the County is indeed receptive to the proposed new facility. The current facility is approximately 5,000 square feet. The new library design focus is on today’s library user, with flexible use of spaces, sitting areas that provide both comfort and privacy, and incorporation of interactive technology, all while allowing the library to continue to serve its role as a community space that accommodates varied programs, activities, learning opportunities, public meetings, print and digital content, and access to technology.  
 
“The new facility, measuring up to 10,000 square feet, would enhance the Miami-Dade Public Library System’s ability to provide larger and more frequent community programs with a larger meeting room and/or additional smaller meeting rooms for activities such as tutoring, co-working, and digital literacy training, to name a few.  Additionally, a larger facility would present new opportunities for study rooms, a larger Children’s Department with more programming space, additional shelving and display spaces for new library materials, more computer work stations, and a separate, dedicated Young Adult area. The multi-use aspect of the proposed site benefits library users as they will have access to numerous amenities in one location, including pool access, retail shops, gymnasium, adult learning center, and library materials, resources, spaces, programs, and services.”
 
Carolina Jones, Chair of the Parks Advisory Board, member of the Mayor’s G.O. Bond Advisory Panel and a North Beach resident, told us another advantage to the library’s relocation is that it would be closer to the North Shore Youth Center, allowing the Center “to expand their offerings to all the kids in North Beach.”
 
Regarding the competition pool, Jones noted the swim team from Beach High has to go to North Dade for practices and all meets. At a recent City Commission meeting to discuss the Bond projects, one of the school’s swim coaches lamented the lost homework time for swimmers because of the time they spend on the road. In a text message, Jones said, “We want to provide our kids with as many sports and recreation possibilities on the island as possible… Having a competition sized pool in our city will provide our kids a dedicated home base for youth swim and water polo programs.” In addition, she said, Nautilus Middle School and other master swimmers will use the pool as well. 
 
Flamingo Park & Youth Center: $30.55 million
"Replace the Recreation Center (PAL) at 1200 Meridian Ave with a new 30,000 square-foot facility including a basketball gym, indoor running track, fitness center, locker rooms, community meeting rooms, classrooms, master plan improvements and resiliency enhancements."
 
Par 3/Community Park: $15.7 million
"Develop new park at 2795 Prairie Avenue, with elements such as lake, overlooks, and amphitheater; tennis courts; playground; vita course and trail system; environmental remediation; and resiliency components." Our previous coverage here.
 
Baywalk: $15 million
"Provide a continuous pedestrian path along Biscayne Bay from Government Cut to Lincoln road, by connecting the gaps in the existing public Baywalk including pedestrian bridge connection over 5th Street."
 
Waterway Restoration: $6 million
"Leverage grant funding from NOAA and the Florida Inland Navigation District for dredging of waterways, removal of invasive species along shorelines, as well as permitting and trimming of vegetation impacting navigation."
 
25 additional projects here.
 

Ballot Question 5:

To improve the City’s neighborhoods and infrastructure, including stormwater and flooding mitigation projects, sidewalk and street renovation and repairs, protected bicycle lanes, pedestrian paths, landscaping, and lighting, shall the City be authorized to issue general obligation bonds, from time to time, not exceeding $198,000,000 in aggregate principal amount, payable from unlimited ad valorem taxes, bearing interest not exceeding the maximum legal interest rate, and maturing no later than 30 years from issuance date?

14 projects
 
As noted above, City CFO John Woodruff says $100 million of this bond is directly resilient with a total of $85 million in above ground improvements to go along with the underground infrastructure paid for out of the stormwater bonds.
 
Neighborhood Above Ground Improvements: $43 million
"Beautify and upgrade functional elements, associated with neighborhood improvements such as green and blue infrastructure, lighting, landscaping, and tree canopy as part of the planned Stormwater/Water & Sewer projects."
 
Street Pavement Program: $30 million
"Enhance the City’s pavement condition by resurfacing streets and implementing pavement preservation strategies."
 
Flamingo Park Neighborhood Improvements: $20 million
"Beautify and upgrade the Flamingo Park neighborhood, including lighting, landscaping, and tree canopy as part of the planned Stormwater/Water & Sewer projects."
 
Ocean Drive Improvement Project: $20 million
"Pedestrianize Ocean Drive from 5 to 15 Streets by eliminating the sidewalks and curbs to create an 'at grade' profile with pavers and decorative design patterns."
 
41 Street Corridor: $15 million
"Create vibrant commercial revitalization enhancements to the 41 Street Corridor such as: lighting, increased tree canopies, sidewalk expansion, and shade structures." Our previous coverage here.
 
See all projects here.
 

Ballot Question 6:

To improve the City’s police, fire and public safety facilities, equipment, and technology, and to improve lighting and security throughout the City, shall the city be authorized to issue general obligation bonds, from time to time, not exceeding $72 million in aggregate principal amount, payable from unlimited ad valorem taxes, bearing interest not exceeding the maximum legal interest rate, and maturing no later than 30 years from issuance date?
 
13 projects
 
Street Lighting Improvements: $10 million
"Implement citywide street lighting program using energy efficient LED lights, to increase lighting levels and improve security."
 
Replace Fire Station #1: $10 million
"Replace Fire Station #1, located at 1051 Jefferson Avenue in South Beach to include the 911 Call Center. This station provides emergency assistance to the area south of 15 Street, Star Island, Palm Island, and Hibiscus Island – among other areas."
 
Police Headquarters Improvements: $10 million
"Renovate Police Headquarters at 1100 Washington Avenue to include upgrades of the fire alarm and sprinkler systems, generators, HVAC systems, electrical systems, and the indoor shooting range used by police officers for training and safety certification."
 
Replace Public Safety Radio System: $10 million
"Replace the City’s end-of-life system with a new radio system, to be used by police, fire and public safety officers to communicate with each other, and with other agencies, when responding to emergency calls or in the field."
 
Replace Fire Station #3: $10 million
"Replace Fire Station #3, located at 5303 Collins Avenue. This station provides emergency assistance to Mid-Beach, from 41 Street to 67 Street, and houses several special operations teams, such as the City’s hazmat team."
 
Other high interest projects include security cameras on the boardwalk, in the Entertainment District, and in business districts; security bollard systems to protect pedestrians at the Convention Center, Lincoln Road, Ocean Drive, SoundScape Park, and South Pointe Park; LED lighting in parks; additional License Plate Readers.
 
Details on those projects here.
 
More information and a 6-minute video: 
More Frequently Asked Questions
 

Important dates

Deadline to register to vote: Tuesday, October 9
 
Early voting: October 22 through November 4, 7 am to 7 pm
Vote at any of the Miami-Dade County Early Voting sites, including two in Miami Beach (Miami Beach City Hall at 1700 Convention Center Drive, and North Shore Branch Library at 7501 Collins Ave.)
For other Early Vote sites call 305-499-8683 or 305-499-8480 (TTY) or visit the website.

Deadline for Vote-By-Mail ballot: October 31
 
Election Day: Tuesday, November 6. Polls open 7 am to 7 pm.
Vote at precinct designated on your Voter Information Card.

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