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HomeMy WebLinkAboutAgenda BOC 032411AGENDA CITY OF PALM BEACH GARDENS BUDGET OVERSIGHT COMMITTEE Thursday March 24 , 201 1 , 8:3 0 AM CITY COUNCIL CHAMBERS I. CALL TO ORDER II. PLEDGE OF ALLEGIANCE III. ROLL CALL : Regular Members L. Marc Cohn Chair Bernard Pettingill Regular Member Phillip Woodall Regular Member Marilyn Lew -Jacobs Regular Member IV. ADDITIONS, DELETIONS, MODIFICATIONS: V. APPROVAL OF MINUTES 1. February 24 , 2011 VI. ITEMS BY COUNCIL LIAISON VII. ITEMS BY STAFF LIAISON 1. Update on status of FY 2012 Budget preparation VIII. OLD BUS I NESS 1. Discussion of Blue Ribbon Panel Report on Canal System Restoration and Maintenance IX. NEW BUSINESS 1. Discussion of vacant Committee seat X. COMMENTS BY PUBLIC XI. COMMENTS BY THE BOARD XII. ADJO U RNMENT B UDGET O VERSIGHT C OMMITTEE M EETING PAGE 02 ·24 ·11 1 CITY OF PALM BEACH GARDENS 1 BUDGET OVERSIGHT COMMITTEE 2 REGULAR MEETING 3 FEBRUARY 24 , 20 1 1 4 5 I. CALL TO ORDER 6 The regular meeting was called to order at 8 :3 8 a.m. by Chair L. Marc Cohn . 7 II. PLEDGE OF ALLEGIANCE 8 III. ROLL CALL 9 PRESENT: Chair L . Marc Cohn , Bernard Petting ill, Phillip A. Woodall , Marilyn Lew -Jacobs . 10 ABSENT: Vice Chair Kenneth Menard . 11 ALSO PRESENT: Vice Mayor, Council Liaison Robert Premuroso; Finance Administrator, 12 Staff Liaison Allan Owens; Deputy Finance Administrator, Alternate Sta ff Liaison Mary 13 Anders on -Pickle . 14 IV. ADDITIONS, DELETIONS, MODIFICATIONS 15 None . 16 V. APPROVAL OF MINUTES 17 A motion was made and seconded for approval of the January 27, 2011 minutes . 18 Motion passed 4 -0. 19 VI. ITEMS BY COUNCIL LIAISON 20 None. 21 VII. ITEMS BY STAFF LIAISON 22 1. F Y 2012 Budget Calendar 23 Staff Pre sentation: Deputy Finance Administrator Mary Anderson -Pickle . 24 Discussion ensued. 25 2. FY 2012 Significant Budget Initiatives 26 Staff Presentation: Finance Administrator Allan Owens . 27 Discussion ensued. 28 VIII. OLD BUSINESS 29 None . 30 IX. NEW BUSINESS 31 None. 32 X. COMMENTS BY THE PUBLIC 33 None. 34 XI. COMMENTS BY THE BOARD 35 Chair Cohn requested the Palm Beach County Budget Fact Sheet be distributed to all Board 36 members . 37 38 (The remainder of this page intentionally left blank.) 39 40 41 42 43 44 45 46 47 48 49 B UDGET O VERSIGHT C OMMITTEE M EETING PAGE 02 ·24 ·11 2 XII. ADJOURNMENT 1 Marilyn Lew -Jacobs made a motion for adjournment. 2 Phillip Woodall seconded. 3 Motion passed , 4 -0. 4 T he meeting adjourned at 9 :22 a .m . The next regular meeting will be held March 24 , 201 1 . 5 6 APPROVED : 7 8 9 10 L. Marc Cohn , Chair 11 12 13 14 Kenneth Menard, Vice Chair 15 16 17 18 Bernard Pettingill 19 20 21 22 Phillip A. Woodall 23 24 25 26 Marilyn Lew -Jacobs 27 28 29 30 31 ATTEST : 32 33 34 35 Donna M. Cannon 36 Municipal Services Coordinator 37 38 39 40 41 42 43 NOTE: These minutes are prepared in compliance with 286.011 F.S. and are not verbatim transcripts of 44 the meeting. A verbatim audio recording is available from the Office of the City Clerk. All referenced 45 attachments on file in the Office of the City Clerk . 46 FISCAL YEAR 2011/2012 BUDGET UPDATE Budget Oversight Committee Meeting March 24, 2011 Summary Estimated reduction in property values: 1.Worst case could be -6% 2.Best case could be -2% to -3% Projected budget shortfall at -6% with no increase in taxes or other revenues and no cuts in personnel is about $5.3 million Projected budget shortfall at -2% with no increase in taxes or other revenues and no cuts in personnel is about $3.6 million Significant Budget Issues Personnel costs 1.Collective Bargaining Agreements 2.Public Safety Pensions Revenues 1.Maintain millage rate 2.Communication Service Tax 3.Use of Reserves Questions THE CITY OF PALM BEACH GARDENS BLUE RIBBON PANEL REPORT ON CANAL SYSTEM RESTORATION AND MAINTENANCE BLUE RIBBON PANEL Name 1. Marilyn Lew-Jacobs 2. TerryLewis 3. Joan Altwater 4. Terrie Bates 5. ChuckHaas 6. Linda Monroe 0 7. Sanford Pearl 8. Paul Auerbach 9. Wesley Lauer 1O.Theodore G. Thoburn 11. Louis Satriano 12. Adrian Salee Address 16 Bermuda Lake Drive Palm Beach Gardens, FL 33418 5703 High Flyer Road S. Palm Beach Gardens, FL 33418 91 80 Cypress Hollow Drive Palm Beach Gardens, FL 33418 11 11 0 Oak Way Circle Palm Beach Gardens, FL 3341 0 9003 Gardens Glen Circle Palm Beach Gardens, FL 3341 8 619 Hudson Bay Drive Palm Beach Gardens, FL 33410 9968 Dahlia Avenue Palm Beach Gardens, FL 33410 11 21 5 Curry Drive Palm Beach Gardens, FL 33418 3 Surrey Road Palm Beach Gardens, FL 3341 8 201 5 LaPorte Drive Palm Beach Gardens, FL 33410 4703 Lakemont Court Palm Beach Gardens, FL 33403 378 Kelsey Park Drive Palm Beach Gardens, FL 33410 Profession CPA Attorney Environmentalist SFWMD CPA Planner Resident Attorney Attorney Banker Business Resident c Pf 1 7 wo E QI llcl v) >I v) B 1- c) S 3 0 0 c) 0 . S 0 . m . 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V L II v) m- a) m S L U S m a, I m- a) u c 0 2 0 m CI 4 n U L c V U I m- II S S m U a, E FL E a > 0 H S m c L I m S H- a S m m L 8 m V m L 3 m m a, L n-mm c a, a L -w a, m U 3 a II m% 0 a, > a I 7 S 0 mm U U S a) E E 0 W a) S m CL S 0 0 CI a L a, m v) v) m L n m a, V m a, V cn 0 L 0 E 3 U c a, tj 2 CI BLUE RIBBON PANEL @ REPORT ON CANAL SYSTEM RESTORATION AND MAINTENANCE TABLE OF CONTENTS TOPIC PAGE NUMBER Introduction 1 Research and Analysis 2-3 Funding AI ternatives 4-6 Recommendation 7-8 Methodology for Establishing a MSBU for Restoration 9 - 11 How and why the strategy will work 12 - 14 Conclusion 15 EXHIBITS Exhibit A: Overview of restoration projects identified in the Stormwater Management Plan and Neighborhood Maps Exhibit B: List and chart of funding sources and special district alternatives for stormwater capital improvements and maintenance Exhibit C: Comparison between MSTU and General Revenue Bond for restoration Exhibit 0: Map of areas to receive discounts for existing stormwater systems BLUE RIBBON PANEL REPORT ON CANAL SYSTEM RESTORATION AN0 MAINTENANCE INTROOUCTION On May 3, 2002, the Blue Ribbon Panel was established by Resolution 80, 2002, at the direction of Mayor Eric Jablin who requested the assistance of the City Manager to form a committee of residents to address quality of life issues facing the City, including stormwater drainage. The Panel's charge has been to examine various options and make recommendations to the City Council on how best to address and fund such maintenance and improvements in a fair and equitable manner. The Panel met on a bi-monthly basis from July to December 2002, focusing on finding a solution to fund the City's canal restoration and maintenance programs. There is extensive documentation to support the fact that many of our canals have minimal water storage capacity available, and minimal conveyance due to sedimentation. There is a direct correlation between the ability of the City's stormwater system to effectively store and convey stormwater, avoidance of water quality and related environmental impacts, and comprehensive, citywide flood protection for our homes and businesses. These are quality of life factors that impact all City residents. The Panel recognized those facts, and searched for the most cost effective way to fund a program that will fix the current stormwater system deficiencies in a timely manner, and provide a long-term program to fund ongoing maintenance. The Panel had technical assistance f rom City staff. However, the recommendation presented in this report is the direct result of the Panel's work, and the guidance of several panel members themselves who have technical, legal and financial expertise in the area of establishing funding for stormwater system restoration and maintenance. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 1 RESEARCH AND ANALYSIS Over the years the City's stormwater system has grown less effective. The original canal design cross sections for much of the system has diminished, resulting in less stormwater storage and conveyance capacity, and contributing to flooding which has occurred in areas of the City. While some restoration activities were planned and implemented to clean the canals to decrease the frequency of flooding, many pro.iects still need to be addressed to avoid future floodins in all neishborhoods. During their analysis, Panel members considered the following information as the basis for making their recommendation for funding canal restoration and maintenance: 9 The City has historically provided funding within the Public Works Department budget to perform canal and swale maintenance. Current funding levels have been at a total of approximately $1 million for these maintenance programs each year. 9 In addition, for Fiscal Years 2002 and 2003 the City included in the budget $400:000 for canal restoration projects. 9 The City's Stormwater Management Plan was presented to City Council on April 4, 2002. The Plan defined and prioritized stormwater system restoration projects. In June 2002, City Council directed staff to proceed with the first two priority projects listed in the Plan (Thompson River Canal from Lighthouse Drive to Holly Drive and 1-95 to Military Trail). 9 The Stormwater Management Plan indicates that approximately $5 million is needed to restore the City's stormwater system to maintain a minimum level of service. The Plan identified ten (10) areas as priority restoration projects. 9 The City has continuously searched for other funding sources such as Federal and State grants. As an example, the City received a FEMA grant in the amount of $350,000 to improve the drainage facilities in Plat 4 (Garden Woods). Blue Ribbon Panel Report on Canal System Restoration and Maintenance 2 12/26/02 9 The Panel asked the City Engineer what amount of funding would be needed to completely restore, upgrade and maintain the City's entire drainage system. 9 An overview along with neighborhood maps showing all of the projects that were identified by the Stormwater Management Plan which would restore and upgrade the City's primary canal system is attached to this report as Exhibit A. 9 For the Panel's analysis, the base case is the combination of the priority projects as well as additional areas identified for further investigation in the Stormwater Management Plan. The base case also includes the recently annexed areas of Garden Oaks, Sunset Drive and Mary Circle. > For purposes of this report. the "base case plus" includes the base case or central part of the City, Units 2 and 19 of Northern Palm Beach County Improvement bistrict. the Cabana Colony Canal and the RCA Boulevard Drainaqe - Ditch, as shown on Exhibit A4. The total estimated capital costs for all of the canal restoration Drojects are $10,793.000. 0 9 The City Engineer advised that approximately one million dollars in capital improvement projects could be completed in a year. 9 At the.current funding levels, it would take approximately 25 years to completely restore and upgrade the City's primary canal system as outlined in the Plan and on Exhibit Al. Throuqh its research, the Panel found that ad valorem taxes as a revenue source have not provided and likely could not provide the level of fundinq - necessary to fully address all of the restoration pro-iects in the Stormwater Manaqement Plan. Given competinq annual budqetary demands. the challenqe has become how to establish a dedicated source of fundinq to restore the City's primary drainaqe system. and a dedicated source of fundinq - for continued maintenance in the areas that directly benefit from or contribute discharqe to the system. The dedicated sources of fundinq would be set aside specifically for canal restoration and maintenance, and for no other budqetary purpose. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 3 12/26/02 FUNOING ALTERNATIVES Panel members extensively reviewed and discussed many of the possible alternatives and types of funding mechanisms. Based upon their financial and legal expertise and knowledge, several Panel members compiled information on the subject, and made presentations to the Panel on each of the funding sources and special district alternatives for canal system restoration and maintenance. Attached, as Exhibit B is a list and chart of the options analyzed by the Panel. Below is a summary of some of their review: Grants: The Panel concluded that the City should continue to seek those sources of funding. However, they pointed out that many grants require City matched dollars, and take time and resources to obtain and implement. State Appropriations: There are water resources projects throughout the State that generally qualify, such as those which restore or improve surface water and wastewater or stormwater discharges. Two examples, which the City will be applying for, are the Lake Worth Lagoon restoration funds, and House Bill 851 Water Project Funding. Ad Valorem Taxes: The Panel looked at a Municipal Service Taxing Unit (MSTU) or an independent special district with taxing authority by special legislative act. The revenues can be generated through a millage rate, authorized by law and must be approved by voter referendum. If city taxes are dedicated for longer than one year at a time, a referendum is required. An independent district would also require referendum approval to levy an ad valorem tax. Ad Valorem Tax Increment Financinq (TIF): Some cities use Community Redevelopment Agencies (CRA's), which are generally dependent districts for blighted areas. TIFs were also discussed as an option. Utility Taxes: Some cities receive taxes on electric, water, gas, and all telecommunications. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 4 Non-Ad Valorem Assessments: Such assessments are levied against benefited properties based on the benefit received. There are a variety of institutional vehicles to levy such assessments without a required voter referendum: Special Assessment District - created by City Ordinance, governed by the City Council, designates areas to receive a special benefit from publicly financed infrastructure. Municipal Service Benefit Unit - created by City Ordinance as an area receiving special benefit. The assessments are paid according to the relative benefits received. Northern Palm Beach County Improvement District - City Council can request legislative action to amend Northern's legal boundaries to include all of Palm Beach Gardens, and request the creation of a special unit for restoration and maintenance. During their discussion, Panel members also considered the possibility of forming an interlocal agreement with another entity to manage the City's canals. They of ten discussed Northern Palm Beach County Improvement District as such an entity. They recognized, however, that Northern Palm Beach County Improvement District's territory currently excludes much of the City's original sections, which need attention. The City could consider contracting with Northern to perform the restoration and maintenance. However, legislative action would be required in order to expand Northern's jurisdiction, and the Governor's Office generally requires a public referendum to support such action. The Panel spent a great deal of time considering the creation a citywide Municipal Service Taxing Unit (MSTU), with the authority, subject to public referendum approval, to levy ad valorem assessments at a rate based on assessed property values. For example, if one-quarter of a mill was levied, generating $1 million in revenues, a property owner with a house value of $175,000 and $25,000 homestead exemption would pay approximately $37.50 a year while a property owner with a house value of $500,000 would pay $118.75. However, the Panel felt that a MSTU would not be fair or equitable because the tax rate would be based on assessed property values rather than the benefits associated with improved flood protection. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 5 The Panel also compared a MSTU with financing a General Revenue bond, as reflected by the attached Exhibit C. However, the Panel felt that bonding generally costs more financially and administratively, due to underwriting fees, reserve requirements and legal fees associated with implementation. Considering the variety of alternatives, the Panel members re-examined the non-ad valorem options, and discussed how everyone generally benefits from a fully restored canal system that operates properly and effectively. They also learned how properties contribute stormwater discharge to the City's canal system, resulting in the need for continuous maintenance. Ultimately, they recognized the need to have a dedicated source of funding for canal system restoration citywide, and a separate dedicated source of funding for continued maintenance. Regarding restoration, the Panel felt that a Municipal Service Benefit Unit (MSBU) is the most fair and equitable funding solution because it is based on the benefits conferred upon all assessable properties in the City, rather than assessed property values. Regarding maintenance, the Panel was clear that a separate MSBU is needed for residents who directly benefit from or contribute stormwater discharge to the City's canal system. After careful study and analysis of the historical as well as current significant drainage problems in the City, as presented in this report, the Panel unanimously recommends to the City Council the following strategy to fund restoration and maintenance of the City's drainage system. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 6 RECOMMENDATION An under lying theme of the Panel's recommendat ion is fairness and equity, 0 and the need to reinvest in our community. Regardless of where one lives, all residents are affected by the City's primary canal system. As a result, there is citywide importance to its restoration. There are quality of life issues to consider regarding the need for these improvements and maintenance, namely those that directly impact the public health and safety of our residents, as well as City infrastructure protection and enhancement of public and private property values. Therefore, the Panel created the following two-part approach to establish dedicated sources of funding, protected from the annual budget process and used specifically for (1) restoration and (2) continued maintenance: 1. For restoration: In order to create one community regarding stormwater, the primary stormwater system should be restored as one City, one-time, and the costs of doing so should be borne by all assessable parcels. As the best funding mechanism analyzed, the Panel unanimously recommends that the City Council create a citywide Municipal Service Benefit Unit (MSBU) for the purpose of fundinq the restoration of the City's primary flood control facilities with a non-ad valorem assessment aqainst - each assessable dwellinq unit and non-residential unit in the City, not to exceed $15 per year for a period not to exceed ten years. 0 The Panel recommends restoring the projects listed in Exhibit Al. The total estimated capital costs are $10,793,000 (excluding the $800,000 that has been allocated for projects last year and this year). AND 2. For maintenance: Only those who directly benefit from or contribute stormwater discharge to the City's primary canal system should bear the costs for future maintenance. As the best funding mechanism analyzed, the Panel unanimously recommends that the City Council create a separate Municipal Service Benefit Unit (MSBU) that would pay for maintenance of the City's primary canal system qoinq forward throuqh non ad valorem assessments. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 7 The Panel defined the maintenance MSBU area as the "base case plus," as shown in Exhibit A4, on the neighborhood map titled "base case plus RCA plus Cabana Colony." For location purposes, the Panel also referred to the "base case plus" area as the central part of the City. The MSBU rate would be based on the total number of benefit units, which is defined in terms of estimated effective stormwater units (ESU's), or square footage amount of impervious area. Based on the City Engineer's initial calculations, the estimated MSBU maintenance fee would cost approximately $63.04 each year for those units in the service or benefit area. Residents within the "base case plus" area of the City that have existing stormwater management systems, for which they are already paying a stormwater system fee, would receive a discount to their City assessed annual fees. Attached to this report, as Exhibit 0, is a map of the areas that would receive discounts for existing stormwater systems. As shown on the map, they are the units of development maintained by the Northern Palm Beach County Improvement District. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 8 METHODOLOGY FOR ESTABLISHING A MSBU FOR RESTORATION The Panel did extensive research on stormwater assessments and found that in 1994 and 1995, Sarasota County enacted three ordinances to define how additional stormwater improvements would be implemented through special assessment. The ordinances were challenged, and the Florida Supreme Court held that they were legally sound. The Panel studied the methodology used in Sarasota County, and borrowed certain portions of it to craft its strategy. The Panel learned about the legal standard that local governments follow to establish a valid stormwater assessment. The two legal requirements are: 1. The property assessed must receive a special benefit from the stormwater system; and 2. The assessment must be fairly and reasonably apportioned among the properties receiving the benefit. Essentially, the City must show a logical relationship between the assessment and the benefits received by the properties. If the assessment is challenged, this is the standard by which the courts would judge the validity of the assessment. The Panel's legal expert on the subject of special assessments advised that the courts historically have deferred to the local legislative body, if there are sufficient factual findings to support how the restored system specially benefits the assessed property and the assessments are fairly apportioned. Applying this standard, the Panel members felt that a restored and improved citywide canal system would confer special benefits to all properties served or potentially served by the stormwater system. Some of the benefits that the properties could receive include: o Improved flood protection for essential services for the entire community, in particular during emergencies (i.e., fire rescue, police, medical , water and sewer sys terns). Improved roads. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 9 o Improved access to public facilities and services (i.e., schools, community colleges, hospitals, fire and police stations, court houses, parks and recreation facilities, libraries). P Improved hurricane evacuation routes. o Enhanced water quality and aesthetics of the environment. o Increased safety and better access to property. Improved values of residential and non-residential properties. Regarding apportionment, according to the Panel's legal expert, as long as an assessment is not arbitrary, unreasonable or discriminatory, the courts should uphold it as valid. Apportionment according to a precise calculation of benefits to each individual property is not required, only that it is reasonably fair. Following the approach used in Sarasota County, property that contributes polluted stormwater runoff would be specially benefited by the treatment of that runoff. Untreated stormwater often leads to flooding. As an example, historically, Unit 2 runoff has contributed significantly to flooding in Plat 4. The Panel also recoqnized that to be consistent and fair, all benefited properties in the City should be assessed. In effect, the whole City would become a benefit unit for purposes of canal system restoration. Exemptions can occur only if they are allowed by statute, or if a determination is made that the property receives no benefit. Federal properties and the U.S. Postal Service are exempt by statute. Churches are not exempt from special assessments, but they are exempt from ad valorem taxes. Schools could be included if prior approval is obtained from the school board. In defining relative benefit and cost, the City Engineer would need to evaluate the geographic areas throughout the City, and then look at the relative contribution of stormwater runoff produced by properties in those areas. Based on a preliminary evaluation by the City Engineer, there are approximately 17,000 dwelling units (such as single-family, multi-family, condominiums, apartments and rnobi le homes), 65,000 non-residential units without impervious area (such as vacant land and preserves), and 150,000 non-residential units with impervious (such as commercial, industrial and institutional areas). The restoration assessment rate would generally be based on dwelling units and impervious area. 0 Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 10 The City needs to generate approximately $1 million in revenues each year, for a period not to exceed ten years. All dwelling units would be grouped together under one rate and used to obtain a statistically significant sampling of impervious area to determine an average square footage of impervious area per residential unit. 0 Based on initial calculations, the MSBU fee assessed to each residential property owner for restoration would not exceed $15 a year for ten years. This is a conservative estimate. Non-residential parcels would be assessed on an equivalent square foot of impervious area basis. Each year, a City resolution would need to be adopted to set the assessment roll which would account for when undeveloped property becomes developed, in order to capture those assessments. As a result of adding more properties to the assessment roll, the rate per unit could decrease as more property owners share the assessment burden. The MSBU for restoration would sunset at the end of the tenth year. if not sooner, and the canals would be at a minimum restored to their oriqinal conditions. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 11 HOW AND WHY THE STRATEGY WILL WORK 1. 2. One MSBU would fund canal restoration and a separate MSBU would fund continued maintenance. Those dwelling units and non- residential units in the maintenance benefit area would pay both the restoration MSBU rate and the maintenance MSBU rate for the term of the restoration MSBU (not to exceed ten years). For residents in the maintenance benefit area, this would cost a total of approximately $80 each year. Starting the eleventh year, those in the maintenance benefit area would only pay the maintenance assessment fee each year. Those outside of the maintenance benefit area would only pay the restoration assessment fee for a maximum of ten years. Who is soinq to benefit from this stratesy? - First, all of our residents because our primary canal system will be restored to its original condition. In particular, the quality of life issues associated with canal restoration are the significant benefits in the short term. Localized street flooding is a typical example of such impact. The primary canal system is designed to decrease the amount of standing water in the streets, improve water flow to the inlets, and increase water storage to the overall drainage system. This benefit would be provided at a total cost of approximately $150 for each homeowner, and the restoration MSBU will sunset in ten years, if not sooner, with canals fully restored. Importantly. a restored primary canal system will protect critical public infrastructure such as roads, potable water and sewer systems, recreational areas and public health and safety facilities. Hurricane evacuation will be improved as well. The result will be substantial special benefit to all public and private property in the City by the protection and enhancement of value. Second, in the long term, the continued maintenance will benefit those living immediately adjacent to and directly contributing to the City's canal system. All of the communities in the Northern Palm Beach County Improvement Oistrict Units of Development with a permit from the South Florida Water Management District will receive a credit for their existing water storage systems, based on the quantity of water stored and the runoff generated. With the MSBU for Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 12 0 0 maintenance, funds will be dedicated to ensure that those who directly benefit continue to support the canal system and not allow it to fall into disrepair asain. 3. What differentiates this strategy from previous efforts to create a Stormwater Utility in 2001? (a) Since then, the City created a Stormwater Management Plan that is being implemented. Projects have been identified and prioritized, and additional work anticipated in the Plan has been investigated. We now know what needs to be fixed or improved and the costs to do so. (b) For future maintenance, the Panel felt that the residents would positively benefit from the City's improvements to and operation of the Cabana Colony Canal and the RCA ditch. Therefore, the service area as defined by Florida Statute for a MSBU would be expanded to include residents living in those sub-basins. This would result in an overall decrease in the annual user fees. (c) As reflected by the City's current budget, ad valorem taxes are paying for some canal system restoration. However, this revenue source has not historically provided enough funding to accomplish the projects necessary. Having a restoration MSBU dedicates those funds separately and guarantees that the restoration work continues, above and beyond funds that may or may not be provided through the annual budget process. (d)Under the Panel's approach, all residents would pay for restoration, and then only those who directly contribute stormwater discharge to the canal system would pay for future maintenance. (e)The Panel members will help with presentations to the neighborhoods. A thorough public education program will be implemented so that residents clearly understand the benefits of this solution. Citizens will talk to citizens. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 13 4. Why include improvements to the Cabana Colony Canal and the RCA Ditch as referenced in the Stormwater Management Plan? Both have a significant impact on the City's drainage system. The Cabana Colony Canal will provide a second outfall for Unit 2 where there has historically been flooding. The City Engineer has advised that water surface elevations flood homes and not the size of the rainfall event. With a second outfall the water surface elevation could be lowered by approximately a foot, without releasing waters beyond the permitted 25-year three-day storm discharges, and as a result, reduce the potential for future flooding. Since the flood in 1995, the City has provided many capital improvements along the RCA ditch. What is mostly needed at this time is maintenance work, such as tree removal near area neighborhoods, re-grading the bottom of the ditch and rebuilding the canal banks so that water run off does not continue to erode them. 5. The solutions for both canal restoration and maintenance are interconnected. One cannot succeed without the other. An ordinance must be adopted to ensure sufficient funding is available for restoration citywide, and a separate ordinance must be adopted to ensure sufficient funding for future maintenance. The goal is to bring the entire City up to the same level of protection as the newer communities that are already being maintained by the Northern Palm Beach County Improvement District. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 14 CONCLUSION The Panel strongly recommends approval of the funding strategy outlined in this report, to establish a MSBU for canal system restoration, and a separate MSBU for ongoing maintenance. The projects, costs and their benefits are known and identified. Through the Panel's deliberations and analysis of the findings, the Panel has created a solution for funding the improvements and maintenance in a fair and equitable manner. Implementing this strategy eliminates the need for continuing the current $400,000 annual appropriation for canal restoration and provides a dedicated revenue source, separate from the City's annual budget process. At the $400,000 funding level, it would take approximately 25 years to complete the restoration projects outlined in the Plan. The Panel is recommending the MSBU for restoration because they believe it is the fairest solution. All properties would be assessed at a rate based upon benefits from the City's primary flood control facilities. The Panel understands that if the City does not create a restoration MSBU, the problem is not diminished. The City will need to find another way to continue canal restoration. The Panel's strategy will help us improve water storage in a more timely fashion. With a dedicated funding source, we will be able to assure a fully restored and improved canal system within ten years. By regaining the maximum operational efficiency of our canals system, we can reduce the chances for another high water incident in our community. The Panel is recommending the MSBU for the ongoing maintenance because it reflects the most equitable way to fund long-term maintenance activities in the areas that benefit, similar to the way in which others pay Northern Palm Beach County Improvement District for their benefit. The Panel looked for ways to keep maintenance costs as low as possible for the central or original parts of the City. The MSBU would replace the $1 million in the City's current budget that is used for canal and swale maintenance. Overall, this approach to canal system restoration and maintenance is based upon principals of fairness. The restoration and maintenance activities must be done. The underlying equitability is that all property owners would pay to restore the canal system to its original condition, and then those who continuously benefit would maintain it. Blue Ribbon Panel Report on Canal System Restoration and Maintenance 12/26/02 15 BLUE RIBBON PANEL n REPORT ON CANAL SYSTEM RESTORATION AND MAINTENANCE EXHIBITS Exhibit A: Overview of restoration projects identified in the Stormwater Management Plan and Neighborhood Maps Exhibit B: List and chart of funding sources and special district alternatives for stormwater capital improvements and maintenance Exhibit C: Comparison between MSTU and General Revenue Bond for restoration Exhibit 0: Map of areas to receive discounts for existing stormwater systems (Northern Palm Beach County Improvement District Units of Development) 0 I BLUE RIBBON PANEL n REPORT ON CANAL SYSTEM RESTORATION AN0 MAINTENANCE BLUE RIBBON PANEL 0 REPORT ON CANAL SYSTEM RESTORATION AN0 MAINTENANCE EXHIBIT A Exhibit Al: Overview of restoration projects identified in the Stormwater Management Plan Exhibits A2 - A4: Neighborhood Maps A2 - Base Case A3 - Base Case Plus Cabana Colony Canal A4 - Base Case Plus RCA Blvd. brainage Ditch Plus Cabana Colony Canal 0 0 EXHIBIT A Exhibit Al: Overview of restoration projects identified in the Stormwater Management Plan Exhibits A2 - A4: Neighborhood Maps A2 - Base Case A3 - Base Case Plus Cabana Colony Canal A4 - Base Case Plus RCA Blvd. brainage Ditch Plus Cabana Colony Canal EXHIBIT A1 PALM BEACH GARDENS - CANAL RESTORATION A. Prioritv Canal Restoration Proiects Identified in the Stormwater ManaPement Plan B. Additional Areas Identified in the Stormwater Management Plan That Reauired Further Investigation I Eannan (Military Tr. To 1-95) Earman (1-95 to Thompson River) Earman (MacArthur to C-17) Allamanda Canal (Gardens East Loop) Allamanda Canal (Gardens East Main Canal from Lighthouse to Prosperity Farms Road) Allamanda Canal (Sandalwood Estates from Burns Road to G.E.M.) Bellwood South Bellwood North Consumer Canal from 1-95 to C- 17 Gardens Oaks Canal (Military to 1-95) City Participation in Design of the S-44 Structure City Participation in Construction of the S-44 Structure Total Estimated Capital Cost $3,024,000 Total Estimated Capital Cost for Base Case of Improvements (A + B) $8,493,000 C. Cabana Colonv Can a1 Atlantic Rd. to Cabana Colony Canal Cabana Colony Canal (A-1-A to Frenchman’s CS) Cabana Colony Canal (Frenchman’s CS to Prosperity Farms Rd.) Cabana Colony Canal (Prosperity Farms Rd. to Intracoastal Waterway) Cabana Colony connection to EPB -3 Total Estimated Capital Cost $1,748,000 I D* RCADitch A- 1-A to Campus Drive Campus Drive to Prosperity Farms Rd. Prosperity Farms Rd. to Intracoastal Waterway Total Estimated Capital Cost $ 552,000 a Grand Total Estimated Capital Costs $10,793,000 BLUE RIBBON PANEL REPORT ON CANAL SYSTEM RESTORATION AND MAINTENANCE EXHIBIT B List and chart of funding sources and special district alternatives for stormwater capital improvements and maintenance FUNDSOURCE Exhibit B FUNDING SOURCES FOR STORMWATER CAPITAL IMPROVEMENTS/MAINTENANCE 1. FederalGrantdhans 2. StateGrantdLoans 3. State Appropriation (as part of a regional project) 4. Ad Valorem Tax 5. Non-Ad Valorem Assessments 6. Ad Valorem Tax Increment 0 7. Utility Tax on Telecommunications 8. Stormwater Utility Fees 9. Ad Valorem Bonds 10. Non-Ad Valorem Assessment or Revenue Bonds FUNDING GOVERNMENTS EPA Department of Environmental Protection Florida Legislature Palm Beach Gardens Independent Special District with Tax Authority PalmBeachGardens Special Assessment District (Palm Beach Gardens - Ch. 170, F.S.) MSBU (Palm Beaoh Gardens - Ch. 166, F.S.) NPBID (Special Legislative Act) New Independerit Special District (Special Act) Community Redevelopment Agency (Palm Beach . Gardens - Ch. 163, Part III, F.S.) PalmBeachGardens Palm Beach Gardens *Palm Beach Gardens *Independent Special District with Tax Authority Palm Beach Gardens Special Assessment District MSBU NPBID New Independent Special District *Requires Referendum Approval P a - e ill nn BLUE RIBBON PANEL n REPORT ON CANAL SYSTEM RESTORATION AN0 MAINTENANCE EXHIBIT C Comparison between MSTU and General Revenue Bond for restoration Exhibit C 4. Absent a new revenue source, would probably require a tax increase to offset the pledge on existing revenue sources - COMPARISON OF CANAL RESTORATION FUNDING OPTIONS Option 1 - MSTU Advantages: I Disadvantages: 1 1. Eliminates cost of money factor (interest (underwriting costs, reserve requirements, etc.1 1. Requbes voter approval 2. Timing for referendum is poor (other tax issues are on ballot) I 3. Shorter time me (10 years vs. 20) I 3. Extends time to begin until next year 4. Eliminates the need for continuing the current $400,000 annual appropriatiin for storm water improvements 5. Segregates tax increase from the general (after referendum) 4. Double taxation for residents currently paying NPCID operating millage rate 6. Provides a dedicated revenue source 7. Does not require a pledge or creation of any other general fund revenue Option 2 - General Revenue Bond Advantages : 1. Could spread cost over longer period, e.g., 20 years, resulting in lower annual impact to residents than MSTU for 10 vears 2. Requires no voter approval, as opposed to G/O debt 3. Could be done much sooner than creation of an MSTU 4. Provides a dedicated source of funding for restoration. Disadvantages: 1. This type of financing has high costs of issuance (underwriting fees, reserve requirements, legal fees, etc.) 2. Purchases less hard construction per I dollar due to costs and interest expense 3. Would require a pledge of an existing or creation of a new revenue source I t CITY OF PALM BEACH GARDENS MEMORANDUM TO: DATE: August 6,2002 FROM: Allan Owens, Finance Administrator SUBJECT: Financing Options Sheryl Stmart, Assistant to the City Manager As requested, I have Zevimed two possible options for financing $5,000,000 fix cad restoration. The first do is based on a bankqualified loan with a ten-year amortization. The second option is based on a bond issue that would net $5,000,OOO, after costs, with a twenty-year amortization. Effect on $125,000 H6me With $ 25.000 Ex emntion Amount ' Debt wage Financed Senrice Eauivdent Option 1 - 10-YearBank QualifiedLoan $5,000,000 $613,390 .14 $14 Annual Inorease in Taxes Option 2 - 20-Year Bond Issue $5,575,000 w25,OOo .10 $10 hual Increase in Taxes The amount financed in the bond issue scenario is greater than the amount required because of additional costs and reserve 8ccoullf requirements that would be added to the issue amount. However, the annual debt service is lower due to the twenty-year venrrmp ten-year amortization, If you have any questions, please let me know. BLUE RIBBON PANEL REPORT ON CANAL SYSTEM RESTORATION AND MAINTENANCE EXHIBIT 0 Map of areas to receive discounts for existing stormwater systems (Northern Palm Beach County Improvement District Units of Development) I t .. -. . f t I I m