Naples issues $29M in bonds for beach outfall project

Naples City Council approved issuing $29 million in bonds to fund stormwater-utility system capital improvements for its $86.2 million beach outfall system — the largest project in the city’s history. 

The project is designed to improve the quality of filtered water discharged into the Gulf, reduce beach erosion, protect environmental species, remove unsightly stormwater pipes from Naples beaches and reduce significant flooding to homes along Gulf Shore Boulevard. The city gets an average annual rainfall of 56 inches — about 14 billion gallons — mostly during four to five summer months, which causes street flooding. 

Council unanimously approved issuing the bonds at its Aug. 19 meeting, representing $27 million in bond costs and $2 million in closing fees. Underwriters will then bid on the public utilities revenue bonds, which are repaid to investors through money collected from customer utility fees rather than taxes. 

“These are bonds that were contemplated as part of the stormwater beach outfall project,” Finance Director Stefan Massol told Council, adding the issuance was already planned to ensure continuous funding and liquidity of the Stormwater Fund. “This is kind of the last piece of the puzzle to maintain the plan for liquidity within our Stormwater Fund for our short-term needs and kind of the beginning of future debt issuances that have been contemplated.” 

The Stormwater Fund has received project-expenditure reimbursements as milestones were reached during construction, he explained, and due to the projected rate of spending, debt issuance is necessary to ensure the fund’s liquidity, as city officials had anticipated. 

The project took a decade to come to fruition and came 14 years after the Florida Department of Environmental Protection ordered Naples to remove beach outfall pipes, two years after a verbal warning. Council then worked with residents who were concerned pump stations and generators at beach ends would ruin Gulf views, prompting much of the project to be moved underground. 

The first phase began in 2022 with design and preconstruction. Citywide, 12- to 54-inch backflow preventers were installed inside outfall pipes to allow stormwater runoff to pass into surface water, preventing it from backing up into the stormwater-collection system and flooding streets. 

In June 2024, Council awarded the $86,224,216 contract to Broward County-based Kiewit Infrastructure South Co., the construction manager at risk, which reviewed and certified the design and costs by Milwaukee-based design consultant Graef USA to ensure the project stays within budget. 

Groundbreaking on the second phase began in October 2024 at the Third Avenue North beach, where construction began on the south pump station, which is 95% complete. Construction on the north pump station at the Eighth Avenue North beach end is about 75% complete. Work extended from Oleander Drive south to Second Avenue South. 

In September 2024, Massol said, Council approved an interfund loan between the Stormwater Fund and the city’s pooled cash, with an interest rate of 2.67%, which is still owed to the city’s General Fund and Water Fund. “The intent would be to refund those short-term interfund loans once this debt has been completed,” he said. 

In June 2025, Council approved a county Tourist Development Tax grant agreement that provided $10 million to fund the project, which boosts tourism due to the beach work. Kiewit and subcontractors have substantially completed storm drainage and water main infrastructure between Fourth Avenue North and First Avenue North, and crews are expected to complete the remaining supplemental drainage infrastructure to First Avenue North by the end of this month. 

The final roadway, drainage and water main phase between First Avenue North and Second Avenue South is expected to be substantially complete by year’s end. 

Kiewit told city officials the project is moving ahead of schedule. The contractual completion date is June 4, 2027, but Kiewit’s estimated completion date is May, possibly earlier. Once the system is fully operational, the unsightly pipes will be removed from city beaches. 

The project involves 9,600 linear feet of stormwater pipes, 6,100 linear feet of water mains, 113 inlet and manhole structures, and 3,200 linear feet of 36-inch HDPE offshore outfall pipes.