Issue Statement:  Oakland Park’s Public Works Department operates out of multiple locations.  As part of the long-term planning efforts related to the Building Our Second Century effort, the decision was made to consolidate all Public Works operations into a single complex to be located at 5100 NE 12th Terrace.  Design of the project is near finalization and award of construction is planned to occur in the second quarter of 2022.  As identified in the adopted Capital Improvement Plan and discussed during earlier Commission meetings, the funding strategy for the project includes a combination of grant funding, American Rescue Plan Act monies, and external financing.  The City released a request-for-proposal for the external financing in the amount of $16,030,000, divided into three separate component loans: Water & Sewer at $8,155,000, Stormwater at $2,200,000, and covenant to budget-and-appropriate (CBA) at $5,675,000.  All proposals were reviewed by staff, and the City’s financial advisors and bond counsel.  Webster Bank is recommended for all three loans.  Each loan requires a separate authorizing ordinance.  This agenda item specifically is in reference to the CBA loan, which is funded by the General Fund and the Solid Waste enterprise fund.

Recommended Action:  The City Commission pass an ordinance on first reading approving the Public Works Facility CBA (General Fund & Solid Waste) loan with Webster Bank in the amount not to exceed $5,675,000 at an interest rate of 2.28%

The City Commission adopted a FY 2022 CIP that included the consolidated Public Works Facility project.  This project was initially identified for funding in FY 2023, but award of the project in FY 2022 is needed to better meet grant timelines and to reduce the financial impact of ongoing construction inflation.  On January 20, 2022, the City released Request for Proposals #022422, $16 Million Water and Sewer, Stormwater and CBA Bank Loans, Series 2022.  Electronic proposals were on February 24 and the City received responses from five (5) banks:

·         JP Morgan Chase Bank

·         Key Government Finance

·         TD Bank

·         Truist (formerly BB&T and Suntrust)

·         Webster Bank (formerly Sterling National Bank)

Four (4) banks submitted proposals for all three (3) loans. JP Morgan Chase did not submit a proposal for the Water and Sewer loan.  On March 2, the City evaluation committee met to review and discuss the proposals.  The consensus recommendation for all three loans was Webster Bank.  A copy of the ranking memorandum and summary matrix proposals is attached for reference.

The attached ordinance establishes the legal authority to enter into the loan agreement with Webster Bank for the CBA portion of the Public Works Facility financing.  The CBA portion is paid from the General Fund and the Solid Waste enterprise fund. 

The proposed CBA loan for the Public Works Facility would be in the amount of $5,675,000 and closing would occur by April 21, 2022.  The cost of issuance is $18,334. The last payment would be made on August 1, 2037.  The length of the loan is approximately 15 years and the interest rate is 2.28%.  The loan may be prepaid without penalty beginning year 9 of the loan.  Debt service would be paid through the General Fund and Solid Waste Enterprise fund and will be included in the FY 2023 budget development. With the maximum amount of $5,675,000, the annual debt service would be $444,019. The debt service payments would allocated between the funds, with General Fund's share being 56 percent, or $248,651 annually, and Solid Waste's share being 44%, or $195,368 annually. 

The Public Works Facility’s construction cost is estimated to be approximately $26 million.  The project is being delivered using the construction manager-at-risk method and the guaranteed maximum price (GMP) is currently under development.  As discussed in earlier Commission meetings, the funding strategy for the project includes the use of loans, American Rescue Plan Act (ARPA) funding, and the $1 million Hazard Mitigation Grant Program (HMPG) awarded to the City for the emergency operations center component of the building.   A general overview of funding breakdown for the total project is as follows:

A budget amendment will be offered for Commission consideration at the time of the award of the construction GMP that will incorporate these funding streams into the FY 2022 budget.  Individual funding sources may change based on the value of the GMP.