Coversheet


		Item 12. COMMITTEE MEMORANDUM

TO:	Sustainability Resiliency Committee Meeting

FROM:	Jimmy L. Morales, City Manager

DATE:	September 26, 2018

SUBJECT:	DISCUSSION OF THE BUSINESS CASE ANALYSIS FOR THE STORWATER PROGRAM


RESPONSIBLE DEPARTMENT: Amy Knowles, Deputy Resiliency Officer


SPONSORED: City Manager's Office


BACKGROUND: At the January 2017 Sustainability and Resiliency Committee, during the Resilience Strategy Work Plan monthly update, Commissioner Arriola and other the four additional Commissioners present discussed the need for and requested a data-based business case study of our stormwater resilience program. Staff consulted with the 100 Resilient Cities network who were quite intrigued with our complex question. The Network connected us to several subject matters experts, who found this study at the edge of their traditional work, however one firm felt the analysis was feasible. At the April 2017 SRC, a letter outlining the firm’s approach was presented to the Sustainability and Resilience Committee, and staff worked to finalize this with legal. In July 2017, however, the item was brought back to SRC to advise that legal matters could not be resolved. Staff received support to competitively solicit for this solution to test the market, different scenarios and price to seek the best product for the City of Miami Beach. A competitive process was conducted, and on February 14, 2018, the City Commission accepted the recommendation of the City Manager pursuant to request for qualifications (RFQ) No. RFQ 2017-3000-KB for a Business Case Analysis of the City of Miami Beach Stormwater Program. The City has since negotiated a contract with ICF Incorporated, LLC, as the top ranked proposer. The City also established a pool of qualified contractors.


Analysis The Business Case Analysis is a complex project and has taken quite a bit of time to develop the recommended scope of services with the consultant team and staff. While reports have been published noting the South Florida risk to sea level rise, analysis to assess the benefits of our adaptation is new. As a ‘first of a kind’ analysis, staff has worked through multiple (five) draft proposals, with extensive discussions about the tasks, scenarios, data needs and analysis, and geographic study area. We have worked to fine-tune the ways to approach this, from risk analysis to stormwater modelling, to private property adaptation approaches. ICF has assembled a multidisciplinary team, including AIR Worldwide, Brizaga, Kimley Horn and FAU – to provide expertise in economics, property values, risk management, science, engineering and communications. Multiple departments have been engaged with developing the tasks, including the Chief and Deputy Resilience Officers, the Assistant City Manager and City Engineer for Public Works, the Chief Financial Officer, and the Risk Manager. This item has been discussed at the routine staff READY Team meeting. In the RFQ, the business case study scope included “economic analysis(es) of the value of our risk reduction investments to address flooding and sea level rise. This analysis should explain the risk cost of inaction (in dollar terms) and the extent to which the risk cost is likely to be reduced as a result of the city’s infrastructure investments (also in dollar terms). The work may consider the complex relationship and impact(s) among City investments (that reduce risk to flooding and sea level rise) to the City’s property tax base, flood insurance, real estate market and financial mortgage cycles, and City credit ratings, land use issues, or any other factor that may be pertinent to the work”. The primary audience for this analysis is City decision-makers (including city managers and elected officials). Secondary audiences include the general public, community organizations, credit rating agencies, insurers, and others interested in the long-term resilience of Miami Beach. The outcome of this project will be compelling, concise communication materials for City decision-makers articulating the business case for resilience investments, backed by a robust technical analysis incorporating integrated flood modeling and economic analysis. In addition, this project will produce a replicable methodology that can be scaled and used to support future decision-making. The economic analysis is designed to capture a wide range of the costs and benefits of resilience investments. The full draft proposal is attached. The preliminary limits of the modeled area will be between 1st Street and South Pointe Drive, West of Washington Avenue to the western coastline. This area was selected due to its mix of property use types. The scope of work includes the following step-by-step approach: Stage 1: Kick Off Task 1. User Engagement and Data Collection Stage 2: Determine Effectiveness of Resilience Investments Task 2. Citywide SLR and Storm Surge Risk Modeling Task 3. Integrated Flood Modeling (Neighborhood-scale) Task 4. Determine Property Value Impacts Stage 3: Build Business Case for Resilience Investments Task 5. Build Individual Property Business Case Task 6. Build Neighborhood Business Case Task 7. Build City-wide Business Case Stage 4: Communicate Results Task 8. Communication Materials The deliverable for this work includes a cost/ benefit analysis of multiple scenarios, including a single family home, a neighborhood, and then a citywide analysis. The analysis would include four-storm event types, with no action, with public infrastructure investment, and low, medium, and high cost of private adaptation investment. The initial, highest end cost estimate for this work was $1,595,000. After many meetings and calls to define the scope, the proposed cost for the above tasks is now $395,000. The timeline to complete the full analysis is 12-months. If the Committee would like to proceed, funding will need to be identified, as it is not currently budgeted.

CONCLUSION:

The administration seeks discussion and feedback on the business case proposal. If the Committee would like to proceed, the item will be forwarded to the October 17, 2018 City Commission Agenda. This could be a great tool for us to talk to our residents and businesses about the value of our programs; show other cities the value of this investment cycle; and communicate true risk and risk reduction efforts to banks and the insurance industry. While this proposal may not answer all the questions generated by this complex issue, it should provide valuable insight.

ATTACHMENTS:
	Description	Type
	Attachment A: ICF Scope of Work	Other