BRADENTON, Fla. Running up against a deadline that, if missed, could result in additional federal fines, Miami-Dade County commissioners demanded to know why more hasn’t done to implement the south Florida county’s massive $12.6 billion water and sewer system capital program.
Embedded in the program are $1.6 billion in critical repairs necessary to resolve state environmental issues and federal Clean Water Act violations.
Commissioners, faced with federal penalties up to $37,500 per day, approved the consent decree in May.
In addition to specific projects to eliminate sewer overflows and other violations, the consent decree required the county to pay $15 million for maintenance, $2 million for an environmental project funded with general obligation bonds, $825,000 for a monitoring program, and $978,100 for a civil penalty.
Frustration by some commissioners boiled over Tuesday during an update on the status of work, much of which has been delayed because of problems selecting a construction manager to oversee the consent-related work.
The delay occurred recently when county Mayor Carlos Gimenez decided to throw out a selection committee’s recommendation to award the job to CH2M Hill because the firm was allowed to file additional materials to the committee after the submission deadline had passed.
While no evidence of wrongdoing was found under county procurement rules, Gimenez decided it would be fairer to appoint a new selection committee to review proposals submitted by both CH2M Hill and AECOM Technical Services.
It is not clear how long the new selection process will take, but the clock is ticking with the timeline on the consent decree set to begin Dec. 7, according to John Renfrow, director of the county’s water and sewer department.
Renfrow said the deadlines to complete some elements of the consent decree are “very tight.”
“I don’t want anybody to think we haven’t been doing anything because contracts haven’t gone out,” he said. “We have approximately 20 projects in play basically we’re not dead in water yet.”
Still, commissioners questioned why the water and sewer program isn’t farther along.
Commissioner Lynda Bell said she had many concerns primarily because there has been “delay after delay after delay” in consent-related work.
A new committee review process could push the county past its deadline.
“We’re under a federal consent decree and we are going to get into trouble,” Bell said. “I don’t know why we can’t get it right.”
Similar concerns were expressed by Commissioner Barbara Jordan, who also felt that even with a new review panel the county could be back at square one.
Jordan said she hoped the mayor would start the process over completely or consider dividing the contract between the two companies that applied.
The commission has already taken several votes to approve the consent decree, raised sewer rates, and sold the first series of bonds for the water and sewer program, Commissioner Sally Heyman pointed out.
With the approvals and financing in hand, Heyman said it is unacceptable that old pipes continue to burst, costing even more to repair. She also said flooding is causing businesses to shut down, damaging them during peak tourist season, which is under way.
With no violation found in the selection of the construction manager, the process was transparent and it should “just be a matter of accepting what the selection committee voted on,”. Heyman said.
“This is the biggest thing on our plate right now,” she said, asking, “What do we need as a legislative body to move things ahead?”
The county attorney told the board that the mayor would report to the commission within 90 days of receiving a report from the selection committee, and if the mayor does not agree with the committee he can request additional time to continue the review process.
“Businesses are going out, and pipes are breaking all over town,” said Commissioner José “Pepe” Diaz. “I’m looking forward to some kind of decision.”
Assistant County Manager Alina Hudak said she hoped that a decision would be ready for the commission to entertain in December. She added that multiple water and sewer projects are under way.
Miami-Dade County has been under some form of consent decree since 1994. The latest decree took more than a year to negotiate.
To support the early stages of consent and other water and sewer work, commissioners approved a $4.2 billion initial bond program supported by an 8% sewer rate increase that went into effect in October.
The plan also calls for rate hikes of 6% in each of the following two years, and another two years of rate hikes at 5% each year.
In July, Miami-Dade priced $492.6 million of water and sewer system revenue bonds with more than $300 million in new proceeds earmarked for the capital program. The rest of the debt was a refunding.
As part of the finance plan, county commissioners agreed to increase the rate covenant to 1.25 times from 1.1 times to improve the credit quality of the water and sewer department’s bonds.
Even with the higher covenant, Moody’s Investors Service downgraded its rating to Aa3 from Aa2 ahead of the bond sale in July, affecting $1.8 billion in outstanding senior-lien water and sewer revenue bonds.
Moody’s cited projections for narrower debt service coverage and the county’s “moderate” level of debt.
Fitch Ratings and Standard & Poor’s each assigned an A-plus ratings to the bonds.
The overhaul of Miami-Dade’s water and sewer system is the largest infrastructure program ever under taken by the state’s largest county.
The system has 14,000 miles of pipes, enough to stretch halfway around the world if laid end-to-end, and serves more than 440,000 customers.