Miami-Dade Legislative Item
File Number: 121384
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File Number: 121384 File Type: Resolution Status: Adopted
Version: 0 Reference: R-650-12 Control: Board of County Commissioners
File Name: THE ARMY IN THE APPROXIMATE AMOUNT OF $180,000,000 Introduced: 7/5/2012
Requester: Port of Miami Cost: Final Action: 7/17/2012
Agenda Date: 7/17/2012 Agenda Item Number: 14A3
Notes: Title: RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF PROJECT PARTNERSHIP AGREEMENT BETWEEN MIAMI-DADE COUNTY AND THE UNITED STATES DEPARTMENT OF THE ARMY IN THE APPROXIMATE AMOUNT OF $180,000,000; EXPRESSING INTENT OF COUNTY TO ISSUE PORT REVENUE BONDS TO FINANCE PART OF PORT’S PHASE III DREDGING PROJECT’S COSTS; AUTHORIZING THE MAYOR OR THE MAYOR’S DESIGNEE TO EXECUTE THE AGREEMENT FOR AND ON BEHALF OF MIAMI-DADE COUNTY AND TO EXERCISE ANY CANCELLATION, TERMINATION AND/OR FUNDING PROVISIONS CONTAINED THEREIN; AND, AUTHORIZING THE COUNTY TO ADVANCE A PORTION OF PROJECT COSTS FROM COUNTY POOLED CASH, TO BE REIMBURSED UPON FUTURE PORT REVENUE BOND PROCEEDS BECOMING AVAILABLE
Indexes: NONE
Sponsors: Rebeca Sosa, Prime Sponsor
  Dennis C. Moss, Co-Sponsor
Sunset Provision: No Effective Date: Expiration Date:
Registered Lobbyist: None Listed


Legislative History

Acting Body Date Agenda Item Action Sent To Due Date Returned Pass/Fail

Board of County Commissioners 7/17/2012 14A3 Adopted P

Office of the Chairperson 7/13/2012 Additions 7/17/2012

Economic Development & Social Services Committee 7/11/2012 3B Forwarded to BCC with a favorable recommendation P
REPORT: Assistant County Attorney Terrance Smith read the foregoing proposed resolution into the record. Chairwoman Sosa asked to be listed as the sponsor of this item. Mr. Bill Johnson, Director, Port of Miami, explained that this item concerned a construction agreement between the County and the US Army Corps of Engineers. He noted he believed this was one of the most important infrastructure projects in the history of the Port of Miami, which would transform the Port. He urged the Committee members’ support of this important item. In response to Mr. Johnson’s request for a waiver, Chairwoman Sosa indicated that she would ask staff to prepare the appropriate memorandum asking the Board of County Commissioners Chairman Joe A. Martinez to waive the Board’s Rules and Procedures to allow the foregoing proposed resolution to be heard at the July 17, 2012, Board meeting. Commissioner Moss asked to be listed as a co-sponsor on this proposed resolution. Hearing no further questions or comments, the Committee proceeded to vote on this proposed resolution, as presented.

County Attorney 7/5/2012 Assigned Richard Seavey

County Mayor 7/5/2012 Assigned County Attorney 9/4/2012
REPORT: Port-(Pending Cmte Request)- CAO (Bass or Seavey) Waiver after committee will be requested

County Mayor 7/5/2012 Assigned Jack Osterholt

Legislative Text


TITLE
RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF PROJECT PARTNERSHIP AGREEMENT BETWEEN MIAMI-DADE COUNTY AND THE UNITED STATES DEPARTMENT OF THE ARMY IN THE APPROXIMATE AMOUNT OF $180,000,000; EXPRESSING INTENT OF COUNTY TO ISSUE PORT REVENUE BONDS TO FINANCE PART OF PORT’S PHASE III DREDGING PROJECT’S COSTS; AUTHORIZING THE MAYOR OR THE MAYOR’S DESIGNEE TO EXECUTE THE AGREEMENT FOR AND ON BEHALF OF MIAMI-DADE COUNTY AND TO EXERCISE ANY CANCELLATION, TERMINATION AND/OR FUNDING PROVISIONS CONTAINED THEREIN; AND, AUTHORIZING THE COUNTY TO ADVANCE A PORTION OF PROJECT COSTS FROM COUNTY POOLED CASH, TO BE REIMBURSED UPON FUTURE PORT REVENUE BOND PROCEEDS BECOMING AVAILABLE

BODY
WHEREAS, this Board desires to accomplish the purposes outlined in the accompanying memorandum, a copy of which is incorporated herein by reference,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that this Board:

Section 1. Approves the Project Partnership Agreement between Miami-Dade County and the United States Department of the Army (“Agreement”) in substantially the form attached hereto and made a part hereof;

Section 2. Expresses the intent of County to issue Seaport revenue bonds in fiscal year 2013 to finance a portion of the Seaport’s Phase III Dredging Project’s costs;

Section3. Authorizes the Mayor or the Mayor’s designee to execute the Project Partnership Agreement, after review and approval by the County Attorney’s Office, and to exercise any cancellation, termination, and/or funding provisions contained therein; and

Section 4. Authorizes the Mayor or the Mayor’s designee to advance portions of the Phase III Dredging Project costs due the Army under the Agreement from County pooled cash, provided such advances shall be reimbursed within the same fiscal year upon future Seaport revenue bond proceeds becoming available.

HEADER
Date:

To: Honorable Chairman Joe A. Martinez
and Members, Board of County Commissioners
From: Carlos A. Gimenez
Mayor
Subject: Resolution Approving and Authorizing Execution of Project Partnership Agreement between Miami-Dade County and the United States Department of the Army for the Construction of Miami Harbor Federal Navigation Project Phase III
..RECOMMENDATION
It is recommended that the Board approve the accompanying resolution approving and authorizing the execution of the Project Partnership Agreement between Miami-Dade County (“County”) and the United States Department of the Army (“Army”) for the construction of the minus 50 feet below mean lower low water Miami Harbor Federal Navigation Project Phase III (“Project”) at PortMiami.

SCOPE
The PortMiami is located within District 5 – Commissioner Bruno A. Barreiro, however the impact of this agenda item is countywide as PortMiami (“Port”) is a regional asset and generates employment for residents throughout Miami-Dade County.

FISCAL IMPACT/FUNDING SOURCE
The total cost of the Project, including the cost of construction, Army procurement and administration, environmental mitigation and monitoring, and an Army required contingency, is estimated to be $180,000,000.This dredging project is a budgeted capital project to be paid from future anticipated Port revenue bond proceeds and State grants. In a separate, future agenda item, the County will seek Board approval (via ordinance) to issue approximately $110,000,000 in Port revenue bonds, the proceeds of which will be used to fund the costs associated with the Army’s award of the base dredging contract. Since timing for this Project is critical to the Port’s objective of completing the deep dredge work to coincide with completion of the Panama Canal expansion, should the Port’s anticipated issuance of revenue bonds not be completed before the County’s payment of base bid associated costs to the Army is due, such payment (estimated to be $108,000,000 in Fiscal Year 2013) shall be funded from County pooled cash, with the Seaport expected to reimburse such advance as soon as its bond proceeds become available (anticipated in the first quarter of calendar year 2013). As Project work is completed, the County anticipates receiving reimbursements from both existing and future Florida Department of Transportation grants. These grant monies will then be used by the County to fund much of the later disbursements required for Options One and Two, respectively in Fiscal Years 2014 and 2015.

To the extent the deepening of the Miami Harbor below – 45 feet results in an incremental increase in future dredging maintenance costs, these incremental costs will be cost-shared 50/50 with the Department of the Army, provided, however, the County will pay 100% of the incremental increased maintenance costs (if any) attributable to the last foot of harbor deepening work (excluding overdepth). It is anticipated that maintenance work will only be necessary approximately once every ten years, at an estimated cost of $1,000,000 per maintenance event, to be funded through the Port’s operating budget.

Finally, while the Army will procure and administer the construction of the Project, under the Project Partnership Agreement, the County is required to procure and fund certain post-construction monitoring of environmental resources and Project mitigation features, the anticipated costs of which are included in the above-referenced $180,000,000 Project cost estimate.

TRACK RECORD/MONITOR
The Seaport Department staff members responsible for monitoring the Agreement are Patrick Shortal, Chief, Engineering Design Services, Capital Development Division and Becky Hope, Environmental Manager, Capital Development Division.

BODY
In November 2007, Congress approved the Water Resources Development Act of 2007, which, among other things, authorized the Port’s deep dredge Project, which will deepen the Port’s outer and south channel to a depth of minus 50 feet. This additional depth is critical for the Port since it will enable it to accommodate deeper draft cargo vessels and help the Port remain competitive with both competing U.S. ports as well as foreign ports. Worldwide, the major shipping lines are increasingly procuring and deploying larger cargo vessels requiring deeper channel depths. At the proposed minus 50 foot depth, the Port will be able to remain a strategic hub for international commerce in both the north/south and east/west trade routes, as well as remain a dominant player with Latin America and the Caribbean. Additionally, as the closest United States East Coast port to the Panama Canal, the Port is uniquely positioned to take advantage of the expanded international trade and cargo traffic opportunities anticipated to be produced by the Panama Canal’s soon to-be-completed expansion.

While the Water Resource Development Act of 2007 authorized the Department of the Army to deepen PortMiami, Congress has not yet appropriated any federal funds to construct the Project. Consequently, the only way for the Congressionally authorized PortMiami deep dredge project to go forward on a timely basis--to enable the Project to be completed in time for the anticipated early-2015 completion of the on-going Panama Canal improvements--is for the County to commit to both fund its (local) share of the Project’s costs and to advance the federal government’s share. Approval of the attached and recommended Project Partnership Agreement between the County and the Department of the Army, under which the County will fund both the local and federal shares of Project costs, allows the PortMiami deep dredge Project to go forward now—without federally appropriated construction funds. Although the Project Partnership Agreement requires the County to advance the federal government’s share of Project costs (estimated to be about $90 million), the County retains the right to seek federal reimbursement of part or all of the County advanced federal share of Project costs if and to the extent federal funds are later appropriated for such purpose. If federal funds are not appropriated for such purpose, the County will not be eligible for such federal reimbursement.

While the Project Partnership Agreement requires the County to pay or advance all of the required Project construction costs, to lessen the County’s financial burden, the County successfully sought financial commitments from the State of Florida to provide approximately $112 million ($112,000,000), or about 62% of the Project’s estimated costs. In response, the Florida Department of Transportation has included $112 million in support of the Project in its five-year transportation improvement plan. An existing Joint Participation Agreement (JPA Contract #AQF69) with the Florida Department of Transportation already contains $55,831,244 of the committed funds. It is anticipated that the additional $56 million in state funds--which have already been included as a line item in the Florida Department of Transportation’s five-year transportation improvement plan--will become available subject to future Joint Participation Agreements between the Florida Department of Transportation and the County and/or added to existing County-Florida Department of Transportation Joint Participation Agreements. It is anticipated that these state funds will be used to reimburse the County for the majority of the County’s Project expenditures over the next four (4) years.

As to the remaining anticipated Project costs above the amount of anticipated state funds, funding has been previously included in Miami-Dade County’s approved five-year capital improvement plan. The funding allocation set in the County capital improvement plan was closely coordinated with the Army’s staff and reflects anticipated County funding (including Florida Department of Transportation’s state funds) requirements of $108M in Fiscal Year 2013, $62M in Fiscal Year 2014 and $10M in Fiscal Year 2015.

To accommodate both the County’s capital improvement plan and the Florida Department of Transportation funding allocation, the Project is being contracted in three (3) phases: a base contract and two (2) option elements. Under this base bid plus options approach, rather than having to advance the full $180,000,000 upfront, the County can instead fund the Project through four (4) separate disbursements over four fiscal years. Based on the U.S. Army Corps of Engineer’s preliminary construction schedule, it is anticipated the County will disburse $250,000 to the Army in Fiscal Year 2012 (disbursement one); 100% of the costs associated with the base contract award, plus a Corps of Engineer’s required contingency thereon (estimated to be approximately $108,000,000) in Fiscal Year 2013 (disbursement two); and 100% of the costs associated with Options One and Two in Fiscal Years 2014 and 2015 (disbursements three and four, respectively) (estimated in aggregate, including contingencies, to be $72,000,000).

If, in the future, the United States Congress appropriates federal construction funds that may be used to reimburse the County for the federal share of Project costs it previously advanced, the County may then seek reimbursement from the Army for the federal share of Project costs advanced by the County. If, however, the County were to receive full federal reimbursement for County-advanced federal costs (approximately $90,000,000), the Florida Department of Transportation would require the County to reimburse it approximately $75,000,000 because state grant funds will essentially be used by the County to meet much of the County’s federal funding obligations under the proposed Project Partnership Agreement.

On March 3, 2009, the Board previously passed Resolution R-203-09, approving a Design Agreement between the Army and the County, under which the Army agreed to pay 75% of the design and engineering costs of the Project and the County, as the Project’s “Local Sponsor”, agreed to pay the remaining 25%. The Design Agreement was executed on April 11, 2009. On July 7, 2011, the Board passed Resolution R-576-11, approving Design Agreement Amendment Number One, under which the County agreed to advance the Army additional design funds up to $1,000,000. Design Agreement Amendment Number One was executed on July 28, 2011. To date, $140,000 has been advanced to the Army to support its completion of Project design.

In late 2011, the Florida Department of Environmental Protection advertised public notice of its intent to issue a dredging permit and certain variances to the Army. Three administrative petitions were filed raising objections to the Florida Department of Environmental Protection’s proposed permit. In response, the Board directed the County Attorney’s Office to formally intervene in the administrative permit challenge to defend the Florida Department of Environmental Protection’s proposed issuance of a dredging permit. On May 1, 2012, the Board passed Resolution R-422-12, approving a Settlement Agreement between Tropical Audubon Society, Inc., Biscayne Bay Waterkeeper, Inc., and resident Dan Kipnis (collectively, “Petitioners”) and the County. This settlement resolved the administrative challenge brought by Petitioners and resulted in the administrative petition being withdrawn, with prejudice, on May 21, 2012. On May 22, the Florida Department of Environmental Protection issued its final dredging permit to the Army.

Under the terms of the recommended Project Partnership Agreement, the County will disburse funds to the Department of the Army (estimated at $180,000,000) over four fiscal years as described above. In the event the Project costs more than the estimated $180,000,000, the County’s funding obligations will increase accordingly. Prior to contract award, however, should the bids come in at levels that would cause overall Project costs to exceed an existing statutory cap of $181,750,000, the Army could not to go forward with the Project unless additional congressional authority was obtained or the Project was reprocured at a lower price (beneath the cap). If post award events or claims cause the Army’s Project obligations to increase overall Project costs above the referenced statutory cap, the Army will stop the Project unless additional congressional authority is obtained.

While several Florida ports, including Port Everglades, Tampa, and Jacksonville, are currently seeking congressional authorization to deepen their harbors and channels to the desired depth of -50 feet, the Port of Miami is the only Florida port already so authorized. In fact, only three east coast ports have unconditional congressional authorization to deepen to -50 feet: the Port Authority of New York and New Jersey, Norfolk, Virginia, and PortMiami. A portion of the Port of Baltimore is also deepened to -50 feet. As such, the Port presently has an advantage over all other east coast ports in the race to capitalize on the new trade opportunities arising from the Panama Canal expansion, expected to be completed in early 2015. By approving the recommended Project Partnership Agreement, this Board will allow the PortMiami Project to move forward in a timely manner that keeps the Port’s strategic advantage intact. Moreover, the Panama Canal’s expansion is anticipated to not only increase the Port’s future cargo traffic, but also create new opportunities to service newer and larger cargo vessels that require deeper draft channels. It is therefore vital for the County to keep this critical deepening Project moving forward and on schedule. Without the requested Project Partnership Agreement, completion of the Project in time to coincide with the anticipated completion of the on-going Panama Canal improvements will be jeopardized.


DELEGATED AUTHORITY
In accordance with Section 2-8.3 of the Miami-Dade County Code related to identifying delegation of Board authority, there are no authorities beyond those specified in the resolution which include the Mayor or designee to execute the Agreement, in its substantial form, and to exercise the cancellation, renewal, and funding provisions set forth in the Agreement.


___________________________________
Jack Osterholt, Deputy Mayor



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