GO Bonds: $153 million first tranche approved

Miami Beach Commissioners this week gave final approval for the City to issue the first tranche of the General Obligation (GO) Bonds approved by voters in November. The bonds are expected to be issued next month, but some projects will get underway immediately in anticipation of the funding.

The GO Bond program encompasses 57 projects with a total estimated cost of $439 million to be spread out over 10-12 years in four tranches approximately three years apart. Tranche one is $153 million but the City will issue bonds for $185 million so it can refinance $32 million in older debt at a lower interest rate thus reducing the tax impact of this first round of bonds.

GO Bond Program Project Director Maria Hernandez said 38 of the GOB projects are included within tranche one. “67 percent or two thirds of the projects in the entire GO Bond are scheduled to be executed or started in the first three years,” Hernandez said. “Of those, 55% are considered quick wins. Quick win projects are mostly public safety enhancements and projects that deliver fast quality of life improvements to every area of the city.”
 
The quick wins list includes 21 projects for a total of $40 million that will be delivered in less than 14 months, she noted.
 
In prioritizing the list of projects, the City administration proposed a draft schedule which was reviewed by the GO Bond Oversight Committee and then the City Commission. Commissioners agreed with the list but moved construction of the new Marine Patrol Fire/Police facility from tranche four to tranche one to coincide with the renovations of Maurice Gibb Park in order to minimize disruption to the neighborhood. 
 
Hernandez described the criteria used for prioritization. “The quick win projects were given the highest priority. Projects which are shovel ready are given top priority. Projects that have a big impact to the most amount of people with the most benefits have priority." Asset preservation was important including repairs to roofs, flood damage, etc., she said.
 
“Interdependency with non-GO Bond projects was also a consideration,” Hernandez told Commissioners. “Interdependencies, not only with a substantial amount of projects which the City is implementing, but also agencies that we cannot control such as the [Florida] DOT and the County.” 
 
Of the $153 million in tranche one, $87.7 million is allocated to parks, recreational facilities and cultural facilities; $36.9 million for police, fire and public safety measures; and $28.4 million for neighborhoods and infrastructure improvements. 
 
Commissioners approved $20 million in capital budget amendments to begin seven of the quick wins projects immediately in anticipation of the bond issuance. They include several related to public safety – license plate readers, security bollards for highly used public spaces, and additional security cameras – as well as construction of the Mid Beach Beachwalk and demolition of the existing wooden boardwalk between 23^rd and 46^th Streets.
 
After concerns were expressed by North Beach residents about the bulk of the funding for the 72^nd Street Park, Library, and Aquatic Center being placed in tranche two, Hernandez said $10 million in funding for planning and design is included upfront, a process that is expected to take about two years due to the project’s complexity. Requesting all of the funding in tranche one would require residents to pay taxes on money that is not ready to be spent and would delay other projects that are ready to go. That said, both she and Miami Beach CFO John Woodruff said the program is fluid.
 
“I do want to emphasize that there is flexibility in this plan,” Woodruff said. “If a project is delayed we can advance funding for other projects within a category such as the parks money. So, if a parks project, something slows down, we can always accelerate something else. Also as we get closer to the next tranche, if we’re within a year or so, we can usually provide bridge funding for projects that are advancing faster than we planned or that we’d like to move up.”
 
“For example, if the 72^nd Street project starts to move great guns and we need to start spending construction dollars, our intent would not be to pause that project and wait for tranche two,” Woodruff explained. “Our intent would be to recognize that, work with our plan to either use other parks money that has already been issued that isn’t needed right now because other projects have slowed down, or to be able to provide some bridge funding to be able to accelerate funds that we would get in tranche two.”
 
However, he said, “If you just look at tranche one and two to really see what’s being prioritized in this plan overall, North Beach is being prioritized. It’s getting 80% of its funding in the first two tranches. Mid Beach, South Beach, they’re getting 50-some percent.”
 
Hernandez added there’s nearly $15 million worth of non-GOB projects starting in North Beach this year, including the North Beach Oceanside Park renovation ($8.66 million), a public plaza for Rue Vendome near the fountain ($1.75 million), renovations for Fairway Park ($1.27 million) and Brittany Bay Park which will include a living shoreline ($1.24 million). Since 2013, there have been $39 million in projects completed or soon to be completed in North Beach, she said.
 
“When you add that to the GO Bond projects, it’s going to total about $90 million worth of investment in North Beach in less than ten years, that’s when we include the citywide projects, sidewalks and things like that that they are also entitled to,” Hernandez said. “So I think when we get all of this going, they’re going to be very happy.”
 
Mayor Dan Gelber responded that the City needs to make extra effort to communicate the volume of activity that’s coming. “There’s so much activity that is going to be happening in North Beach that people need to not be surprised.”
 
“I find it interesting and very encouraging for all of us that the residents not only voted overwhelmingly for the GO Bond, but they’re coming to us and saying ‘Go faster,’” Commissioner Ricky Arriola said. He noted the new contract for City Manager Jimmy Morales includes “a list of goals and objectives very closely tied to the implementation of these GO Bond projects, tying jimmy and his team to this GO Bond schedule, which is important to reassure the public that we want to get these things done as badly as you do.”
 
Karen Rivo who chairs the GO Bond Oversight Committee said, “We did make a promise to the voters to have a gradual impact fiscally from these projects. We wish that we could do them all at once but it’s not realistic.”
 
Another area of concern is the location of a new fire station in South Beach. One potential location, an asphalt parking lot in Flamingo Park is causing the most angst. Funding is in the first tranche.

Commissioner Mark Samuelian reassured residents, “This funding does not presume a location. We need to define a location and, given the strategic nature of this project, the amount of money involved, I think it goes without saying, we want a data driven approach. We’ll look at all sorts of options. We’re gonna figure out what to do and we’re going to do that in a thorough manner and that’s part of this work.”
 
Morales added, “Obviously, there are several factors that will weigh into that [choice of location]. Number one, driven by the Fire Department is service area it covers. Therefore, what’s the proper location, not too far north, not something too far south. That’s all gonna be driven by the demands and requirements applicable to the Fire Department on what’s the right area that it could fall within. Then, secondly, obviously, we’re going to have to look at the size of properties available. Do they have enough of a footprint to do what needs to be done.”
 
“We’ll figure in if it’s something we own or will have to acquire,” Morales said, “but I can tell you from my perspective, everything’s on the table. We have heard the community loud and clear and obviously it behooves all of us if we could find a better location that has the support of the community. I’d prefer to not have to buy something because, generally, you’re going to spend valuable capital dollars to purchase land.”
 
Morales said the administration has “some thoughts on potentially other locations” that will be discussed in the future with the Commission, “but approving this today does not already approve any set location.”
 
The remaining tranches of the GO Bond are anticipated to be $103 million for tranche two which is anticipated in FY 2022, tranche three for $98 million in FY 2025, and $85 million in FY 2028.  In spreading out the bonds, millage rates will increase gradually over the next ten years.

Follow the progress of the GO Bond program here.