Frequently Asked Questions
All About VKB Resilience
What is the question that will be on the ballot?
“Shall the Village issue general obligation bonds not exceeding $100 million in one or more series maturing not later than thirty years from their issuance dates, bearing interest not exceeding the maximum rate allowable by law, payable from ad valorem taxes levied by the Village, to:
Mitigate effects of sea level rise and flooding;
Protect Village beaches and shoreline; and
Harden infrastructure to the effects of hurricanes?
Shall the above described proposal be adopted?
[ ] For Bonds
[ ] Against Bonds”
What is the VKB Resilience mission statement?
Protect our natural assets and upgrade our infrastructure to build a resilient future for the Village of Key Biscayne that strengthens our Island Paradise from current and future climate related threats.
What are the informational town hall meetings for?
The Village is hosting four (4) GOB-related Town Hall meetings. On August 06, 2020 the Town Hall topic was dedicated to financial aspects of the GOB. On August 20, 2020, the Town Hall was focused on the Shoreline Protection program. The remaining will be dedicated to the other two (2) bond programs: Mitigating the effects of sea level rise and flooding (September 03, 2020) as well as hardening infrastructure to minimize the impacts from Hurricanes (September 17, 2020).
After each Town Hall, the presentation and video recording will be posted on this website and aired on our local TV channel (Comcast channel 77, ATT channel 99). Presently, the first two town halls are available online for viewing.
Miss a meeting? Click on the button below to take you to Resources page where you can view past presentations.
What Benefits will the Proposed Bond-Funded Projects Provide?
Mitigating the Effects of Sea Level Rise and Flooding
These projects will reduce flooding through a Complete Streets approach; a method that ensures that roadways are planned, designed, constructed, maintained, and operated in a holistic manner for all users of all abilities - not just motor vehicles. A Complete Streets approach for the Village will ensure all elements of a roadway are fully utilized to mitigate flooding. The elements of a roadway improvement for this bond program include but are not limited to: travel lanes, swales, medians, pedestrian and bike facilities, and street lighting.
Protecting the Village’s Beaches and Shoreline
These projects are oriented towards preserving a healthy and wider beach to protect valuable real estate/assets. Projects will place sand on the beach, restore and enhance the dunes (a critical element of shoreline protection), and the long-term solution, an offshore structure that serves as the first line of defense to our shoreline and preserves the sand we place on the beach.
Hardening Infrastructure to the Effects of Hurricanes
These projects that underground utility infrastructure include power and telecommunications. The undergrounding of utilities is intended to improve the reliability and security of these utilities. The hardening of structures that support the electrical components of the grid such as transformers, switchgear, capacitor banks, etc., are included in this program.
G.O. Bonds + the Referendum
What is a General Obligation (G.O.) Bond?
A General Obligation Bond, also known as a G.O. Bond, is a funding mechanism that is financially backed by the assessment of ad valorem taxes. Ad Valorem taxes are commonly referred to as property taxes.
A G.O. Bond referendum giving the Village Council access to this type of financing tool is passed by a majority of the Key Biscayne registered voters voting in the November election. The decision to issue a G.O. bond to implement a specific project(s) must be approved by a super majority (5-2) vote of the Village Council.
What is a Bond Referendum?
The Florida Constitution requires General Obligation Bonds to be approved by a majority of voters within the boundaries of the issuing entity (the Village). A referendum is a set Village-wide election date on which voters may consider the proposition or approval of the bonds.
Why is the General Obligation Bond being considered?
G.O. Bonds are a steady financing mechanism that would allow for the coordinated implementation of significant resilience and climate adaptation projects to address our communities current and future vulnerability to sea level rise and flooding, erosion of our shorelines, and hurricane impacts. A stable funding source allows for implementation of projects in a unified, logically sequenced manner that yields a cost-effective infrastructure upgrade without duplication of effort or a piecemeal approach. Pledging the full faith, credit, and taxing power of the Village, generally allows for longer term financing (e.g. 30 years) at a lower cost when compared to other sources of funding.
Why doesn’t the Village try to get funding from grants and other sources before we issue
debt?
The Village Government works diligently with the County, State, and Federal government as well as any relevant nonprofit organizations to explore and obtain grants and other favorable funding opportunities to minimize the cost of all our municipal projects. However, the success of grant proposals and the timing of receipt of monies and other aid is uncertain. The bond(s) proposal asks for authorization up to the estimated full cost of the projects as a backstop in the event the Village does not receive additional funds.
What are the benefits of Issuing G.O. Bonds as opposed to other forms of bonds?
G.O. Bonds are generally the most cost-effective bonds to issue, typically offering the lowest interest rate compared to other bond types.
Does the Village have to issue all $100M of G.O. bonds?
No. The referendum is simply an authorization that gives the Village the ability to issue up to, but not more than, $100 million in bonds. The Village does not have to use the entire $100 million authorized nor does the Village have to use the GO Bond(s) if there are more economical sources of funding available at the time a project needs to be funded.
What is the estimated cost per resident?
For each individual property owner, based on today’s interest rates, the tax is estimated to be $65 per every $100,000 of a property’s taxable value, once all the bonds have been issued. Since the entire $100 million GOB program will be implemented over a period of 10 years, rather than all at once, the associated debt service tax rate will be gradually phased in. The total cost per resident over the 10 years may be more or less than the estimate, depending on interest rates and other market conditions at the time each series of bonds is issued.
How will the new bonds impact annual debt service payments and property taxes?
Once the General Obligation Bonds are sold and the interest rate is fixed, the debt service to the Village will be fixed. The actual amount of debt service and the exact millage rate will depend on the interest rate and other factors at the time when the bonds are actually issued. Because overall property values for the Village, and individual property values, may fluctuate over time, the millage rate may be adjusted up or down to collect the projected amount of annual debt service in each fiscal year.
Who will decide whether the G.O. Bonds should be used to fund a series of projects vs. using an alternate funding source?
The terms of each series of bonds will depend on market conditions at the time of issuance. The Village Council generally will set parameters for acceptable not-to-exceed interest rates, the maximum amount of bonds to be issued, and the not-to-exceed amount to be paid to the underwriters. The Financial Advisor will provide advice on these matters, so the rates and fees are kept within a reasonable range. Based on these criteria a decision will be made by Village Council whether to use the GO Bonds or some other funding mechanism. The decision by Village Council to use the GO Bonds maybe informed by an Oversight Committee, however, the Council has not yet decided whether to create an Oversight Committee. Village Council may choose to do so as part of the process of moving forward with projects.
How are G.O. bond funds typically utilized and paid back?
Generally, when the G.O. Bond funds become available to the Village to cover the contract(s) for a specific project(s), contracts for construction can be executed. The funds come from the bond money, not the tax revenues. The tax revenues are used to pay back the bonds. The bond money is the source of funding for the projects and will be available before the tax revenues are collected. The bond payments are generally structured with interest payable every six months and principal payable annually. For example, if bonds are issued in April 2021, the first interest payment would be in October 2021 and the first principal payment would be in April 2022. The millage levy would be placed on the tax roll for the fiscal year beginning on October 1, 2021, and the first taxes would be collected between November 1, 2021 and March 31, 2022.
Schedule + Timing
What Prompted the Village to Consider the Need for Funding Resilience Projects Now?
The Southeast Florida Regional Climate Change Compact recently released its 2019 updated sea level rise projections, which indicate that over the next 20 years sea level is expected to rise 10 to 17 inches, significantly threatening the Village of Key Biscayne Shoreline, as well as intensifying the existing street flooding and all the associated negative impacts to safety, economy, and quality of life.
Do all of the G.O. Bonds have to be issued at the same time?
No. The authorized amount (not to exceed $100 million) would be accessible incrementally as needed as a series of project specific bond issuances. The bonds can be issued in series over time as projects are approved by Village Council and if other sources of funds are not available. A series is a single issue of a bond. The referendum being voted upon allows for the issuance of up to $100 million in G.O. Bonds, in one issuance or as a series of issuances not to exceed the authorized total. The decision to use the GOB to fund a particular project would be made by the Village Council.
Assuming the Bond referendum passes in November, how would the Village Council likely proceed?
An initial project list would be prioritized according to upcoming stormwater system analyses, utility undergrounding masterplan and upcoming shoreline protection needs.
Engineering professionals would be engaged to begin design, cost estimating and scheduling for start and projected completion dates for the first several projects on the list.
When the planning is complete, Council would approve moving forward with a desired project(s).
Council would approve the selection of underwriters to structure and market the first serie(s) of bond issuance(s).
Council would approve by ordinance and supplemental resolution a series of bonds sufficient to provide funding for the first set of projects (or portions thereof) that can be completed within 3 years after bond issuance. The tax law requirement is that the bond money must be spent within 3 years from the date of bond issuance.
The series of bonds would be issued and the proceeds received are used to pay or reimburse the Village for costs of the projects.
The same procedures are undertaken by Council on a continuous basis to fund the next set of projects on the priority list as they become ready to move forward. For example, if, within a year of the first bond issuance, Council decides the next set of projects are ready for consideration, steps 2 through 6 will be undertaken for the next projects in line, even if the first projects are still ongoing.
Sea Level Rise + Flooding
How is the $18M for stormwater work going to be financed? Is that an Enterprise user fee bond that is not subject to the debt cap?
Yes, this will be a revenue bond financed by the Stormwater user fee. It is not subject to the Village’s debt cap because stormwater operations are financed and operated in an independent, self-liquidating manner and recovered entirely through currently collected user fees.
How will flooding risk to unelevated homes be addressed?
Specific roadway elevations will depend on many factors (i.e. location, degree of vulnerability, existing and projected environmental conditions, etc.). Over the next few months, subject to Village Council approval, the Village will be conducting detailed surveying and additional stormwater modeling, which will assist in identifying appropriate roadway elevations throughout the Village. As a part of this modeling, flooding risk to unelevated homes will be evaluated relative to storage, pumping and discharge approaches.