Miami-Dade County to Move Forward With $4.7 Billion Sewer, Water Program

BRADENTON, Fla. — Miami-Dade County is moving forward with the implementation of a $4.7 billion water and sewer program that includes $1.9 billion to build alternative water supply sources to reduce its dependence on south Florida’s aquifer. The plan, which includes using highly treated recycled wastewater to reduce pollutants and replenish water needed by the Florida Everglades, will be financed with general obligation and revenue bonds, a state revolving fund, state alternative water supply funding, and federal funding for the Comprehensive Everglades Restoration Plan.An essential component came last week when the South Florida Water Management District approved a 20-year consumptive-use water permit structured to meet the water needs of Miami-Dade’s growing population, projected to reach 2.7 million residents by 2027. The permit’s key feature is increased reliance on alternative water supply sources to serve that growth.“Miami-Dade has successfully stepped up their water resource and infrastructure planning to meet population growth, [while] at the same time providing protection to the nearby Everglades,” said Eric Buermann, chairman of the district’s governing board. Florida’s largest county had depended largely on withdrawing water from the aquifer, but didn’t have a plan for reducing consumption or reusing wastewater. The water and sewer system currently serves nearly 2.4 million residents.Over the past 18 months, the Miami-Dade Water and Sewer Department developed the alternative water-use plan and implemented a water-use efficiency proposal to reduce consumption in order to get the 20-year Consumptive Use Permit from the water management district. The county now will move forward on a capital program that includes construction of a new water reclamation plant as well as a reverse osmosis plant to treat brackish water. A reclaimed or recycled water component will provide for the infrastructure to irrigate green spaces and to highly treat recycled water that will replenish groundwater supplies and hydrate wetlands.“The new 20-year CUP agreement represents a major milestone, a historic moment if you will, for Miami-Dade County,” said John Renfrow, director of the Water and Sewer Department.The general finance plan through 2016 calls for the county to issue $2.7 billion of water and sewer revenue bonds, with annual tranches expected to begin selling in fiscal year 2010.The plan is also partly financed with $206.2 million of county-issued general obligation bonds, the proceeds of which are funneled to the Water and Sewer Department annually through the county’s $2.9 billion Building Better Communities GO bond program approved by voters in 2004.With the permit in hand, work is underway to finalize an “efficient and flexible” finance strategy, said Diane Camacho, assistant director of finance for the department. She said a finance team has not been named.“Obviously, we’re going to time this as much as we can so we don’t sell debt before there’s a physical need,” Camacho said.The county’s last water and sewer revenue bond deal was a $344.7 million refunding that priced Sept. 10-11 with a syndicate of 14 underwriters led by Morgan Keegan & Co. Public Financial Management Inc. was the financial adviser. The bonds, insured by XL Capital Assurance, yielded 3.53% in 2009, 3.74% in 2016, and 4.31% in 2026.The refunding captured more than 7.18% in present value savings, or $25.3 million, taken over the life of the bonds without extending maturities. Camacho said a number of factors worked in the county’s favor, including the fact that no market indicators were released prior to the sale and the deal was the largest in the market those two days. “We had a good story to tell,” she added. She noted that Fitch Ratings and Moody’s Investors Service revised the outlook on the county’s water and sewer system bonds to stable from negative prior to the refunding sale, and rated the bonds A-plus and A1, respectively. Standard & Poor’s rated the bonds A-plus with a stable outlook.“Given the nature of our long-range plans, the savings are significant for us,” Camacho said.