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LTC 130-2018 Municipal Parking Transaction - Financial ServicesMIAMI BEACH OFFICE OF THE CITY MANAGER NO. LTC # 130-2018 LETTER TO COMMISSION TO: Mayor Dan Gelber and Members of he City Com ssion FROM: Jimmy L. Morales, City Manager DATE: March 8, 2018 i SUBJECT: MUNICIPAL PARKING TRANS CTION — FINANCIAL SERVICES — NORTH BEACH TOWN CENTER EVELOPMENT The Parking Department issued an Invitation to Quote (ITQ) to seek financial services to review the proposed transaction for disposition of City of Miami Beach Municipal Parking Lot 80 (located on the SE corner of 71st Street and Byron Avenue - Folio: 02-321 1-002-0950) and Lot 84 (Located at 6964 Harding Avenue - Folio: 02-321 1-002-0910) in exchange for air rights on a separate lot, which are to be conveyed to the City for the purpose of City's construction of a City garage of up to 270 spaces. The consultant selected to perform this analysis was Walker Consultants. The consultant was instructed to prepare an analysis of whether the proposed transaction will have a material adverse impact on the Net Revenues of the Parking System. Attached please find the completed report for your consideration. If you should have any questions, please contact Saul Frances, Parking Director via email or at extension 6483. c: Kathie Brooks, Assistant City Manager John Woodruff, Chief Financial Officer Marcia Monserrat, Special Projects Coordinator JLM/KGB/SF f: \ping\$man\rar\soul\walker study 2018 Itc.docx •WALKER CONSULTANTS December 29, 2017 Mr. Jimmy L. Morales, City Manager and Mr. Saul Frances, Director City of Miami Beach 1700 Convention Center Drive Miami Beach, Florida 33139 Re: Municipal Parking Transaction — Financial Services ITQ # 06 -30 -17 -PARKING -SF Walker Project #15-2220.00 Dear Messrs. Morales and Frances: 4904 Eisenhower Boulevard, Suite 150 Tampa, FL 33634 813.888.5800 walkerconsultants.com (Sent via e-mail: saulfrances@miamibeachfl.aov) Walker is pleased to submit this assessment on the disposition of two municipal parking Tots located in North Beach and the subsequent impact on the net income of the City Parking System. This assessment represents our analysis and conclusions, and is intended to assist the City with various impacts associated with the transaction. We thank you and appreciate the opportunity to be of service to the City of Miami Beach. Please do call or email if there are any questions regarding our work. Sincerely, WALKER CONSULTANTS Jim Corbett, CAPP Consultant JMC:Ier BUILDING ENVELOPE, CONSULTING FORENSIC RESTORATION. PARKING DESIGN. PLANNING 111 I ui u I Financial Analysis Walker Project: 15-2220.00 BUILDING ENVELOPE CONSULTING FORENSIC RESTORATION PARKING DESIGN PLANNING Municipal Parking Transaction ITQ # 06 -30 -17 -Parking -SF Miami Beach, Florida December 29, 2017 City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139 WALKER CONSULTANTS jeWALKER CONSULTANTS TABLE OF CONTENTS EXECUTIVE SUMMARY INTRODUCTION 1 Proposed Term Sheet 2 Bond Resolution 3 NET INCOME 5 Operating Revenues 5 Operating Expenses 8 Net Income Summary 9 DISPOSITION IMPACT 10 LIST OF TABLES AND FIGURES Exhibit 1: 71st Street Town Center Development Site with North Beach... 1 Exhibit 2: 71st Street Town Center Development — Parcel A and Parcel B 2 Exhibit 3: Parking System Long -Term Debt Summary by Year 3 Exhibit 4: Parking System Aggregate Maturities of Long -Term Debt 4 Exhibit 5: Five -Year Revenues Net of Sales Tax — Municipal Lots P80 and P84 5 Exhibit 6: Five -Year Parking Citation Revenues — Municipal Lots P80 and... 6 Exhibit 7: Five -Year Revenue Totals — Municipal Lots P80 and P84 7 Exhibit 8: Five -Year Operating Expense Totals — Municipal Lots P80 and P84 8 Exhibit 9: Five -Year Net Income - Municipal Lots P80 and P84... 9 Exhibit 10: Parking System Enterprise Fund — Fiscal Year End Summary... 10 WALKER CONSULTANTS 1 1 FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION WALKER CONSULTANTS FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION EXECUTIVE SUMMARY The City of Miami Beach Parking Enterprise Fund generated $15,852,169 in operating income effective Fiscal Year Ended, September 30, 2016. After depreciation, nonoperating revenues and expenses, and transfers out were factored, the Fund showed a change in net position of $3.4 million'. Parking System Enterprise Fund — Fiscal Year End Summary (September 30, 2016) 2016 Operating Revenues $51,499,302 Operating expenses, excluding depreciation $35,647,133 Operating income before depreciation $15,852,169 Depreciation ($5,973,576) Nonoperating revenue $4,058,273 Nonoperating expenses ($1,361,533) Capital contributions $0 Transfers out ($9,215,478) Change in net position $3,359,855 Source: City of Miami Beach Financial Report Fiscal Year Ended September 30, 2016 The disposition of Municipal Lots P80 and P84 suggests a peak fiscal year (FY15) net income loss of $77,303.11, representing a per space annual income loss of $931.36 for the combined 83 total spaces. Five -Year Net Income - Municipal Lots P80 and P84 Combined P80/84 FY17* FY16 FY15 FY14 FY13 Revenues P80/84 Expenses Transient $67,715.38 $70,136.60 $74,547.47 $64,484.54 $46,944.56 Monthly $20,802.84 $15,248.55 $22,542.04 $18,051.31 $13,650.00 Citation $7,988.00 $7,111.00 $8,031.00 $8,628.00 $8,577.00 Total $96,506.22 592,496.15 5105,120.51 591,163.85 $69,171.56 Utility $2,590.26 2,342.89 $2,545.40 $2,593.17 $2,266.75 EMS $2,400.00 $2,400.00 $2,400.00 $2,400.00 $2,400.00 Warranty $1,700.00 $1,700.00 $1,700.00 $1,700.00 $1,700.00 Collection $720.00 $720.00 $720.00 $720.00 $720.00 Sanitation $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 Maintenance $452.00 $452.00 $452.00 $452.00 $452.00 Total $27,862.26 $27,614.89 $27,817.40 $27,865.17 $27,538.75 P80/84 Income $68,643.96 564,881.26 $77,303.11 $63,298.68 $41,632.81 Per Space $827.04 $781.70 $931.36 $762.63 5501.60 *Unaudited numbers subjected to adjustment Source: Walker Consultants and City of Miami Beach Finance Department 2017 ' City of Miami Beach FY16 CAFR, Page 33 WALKER CONSULTANTS I ii •WALKER CONSULTANTS FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION In accordance with the City of Miami Beach Parking Bond Resolution No. 2010-27491, Article VII - Particular Covenants; Section 713 (b), the City may in any fiscal year sell, lease or otherwise dispose of assets forming a part of the Parking System in excess of the amount set forth in clause (a) of this Section if, before any such transfer, there is delivered to the City Manager a report of the Consulting Engineers or the Rate Consultant demonstrating that the sale, lease or other disposition of the property will not have a material adverse impact on the Net Revenues and stating his or her reasons therefor. As demonstrated in the Five -Year Net Income summary, the disposition of Municipal Lots P80 and P84 provides for an approximate peak fiscal year net income loss of $77,303 from the Parking Fund's operating income statement. It is Walker's professional opinion that this estimated annual loss of $77,303 will not have a material adverse impact on the Net Revenues of the Parking System. This opinion is further supported by the results of the FY16 Fiscal Year End Summary where the Net Revenues of the Parking Enterprise Fund reveals a positive change in net position, resulting in a dollar amount that is substantially more than this estimated loss of net income. Subtracting the $77,303 net income loss from the FY16 Operating Income provides an adjusted Operating Income of $15,774,866. This adjusted amount allows for the Parking Enterprise Fund to continue to cover planned reductions to the fund balance to cover annual depreciation amounts, annual non-operating expenses, debt service coverage, and annual transfers out, which includes payments to the General Fund. To further support an opinion of the usefulness of the assets to be disposed and the uses to be made of any proceeds of the transaction, Walker understands the terms of the proposed municipal transaction, detailed in this assessment, provide for the offering of 270± new parking structure spaces (located in an adjacent North Beach development site) in exchange for the disposition of the 83± spaces located in Municipal Lots P80 and P84. Walker projects the potential for a positive net income impact if the 270± new parking spaces provide an annual operating income in excess of $287 per space. WALKER CONSULTANTS 1 III 0 1 Introduction WALKER CONSULTANTS FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION Introduction The North Beach Town Center Development, LLC ("NBTCD") has expressed interest in developing a mixed-use project and has approached the City of Miami Beach regarding the exchange of two city parking lots in North Beach to facilitate the development of municipal parking and workforce housing. The proposed project includes retail, office, residential and parking on two blocks between Byron and Harding Avenues. The terms of the transaction require the City to convey its two parking lots to NBTCD and NBTCD to convey to the City a parking structure with at least 270 spaces above the ground floor retail between Byron and Abbott Avenues. For a visual representation of the City parking lots and NBTCD properties, please reference the following exhibit. Exhibit 1: 7151 Street Town Center Development Site with North Beach City Parking Lots City of Miami Beach Lot no //. North Beach Town Center Development ILItegeAr • FeM4St.:i 17 - Source: Google Maps, Walker Consultants and the City of Miami Beach 2017 The City is requesting a review of the proposed transaction for the disposition of Municipal Parking Lot P80 with 30 spaces located on the SE corner of 71st Street and Byron Avenue (Folio: 02-3211-002-0950) and Municipal Parking Lot P84 with 53 spaces located at 6964 Harding Avenue (Folio: 02-3211-002-0910). 1 1 Introduction •WALKER CONSULTANTS PROPOSED TERM SHEET FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION The fee ownership on the property between Byron and Abbot Avenues will be divided as follows: 1. Parcel A, which will consist of ground floor retail use, upper floor commercial uses and parking on the second floor. 2. Parcel B, which will consist of ground floor retail use, the parking garage access ramps and the parking structure. The parking structure in Parcel B will contain at least 270 parking spaces and may contain workforce housing on the top of parcel B at the option of the City. Parcel A and B will be joined together via a Covenant in Lieu of Unity of Title ("CIL") and the City and NBTCD will join in an Easement and Operating Agreement as required by the CIL. Parcel A will be owned entirely by NBTCD. Parcel B will have ground floor retail owned by NBTCD and the City will own the parking structure ramp that starts at the ground floor and the parking structure situated above the ground floor on Parcel B. The parking structure ramp will also serve as access to NBTCD's parking structure located on Parcel A. NBTCD will pay its proportionate share of maintaining the access ramp and any other commonly used facilities such as elevators and stairways, etc. The Easement and Operating Agreement will identify the commonly used facilities and will provide for easements and cost sharing.' For a visual representation of the relationship between Parcel A and Parcel B, please reference the following exhibit. Exhibit 2: 71st Street Town Center Development — Parcel A and Parcel B Source: Google Maps, Walker Consultants and City of Miami Beach 71' Town Center Development Term Sheet 2 Proposed Term Sheet — 71St Street Town Center Development; City of Miami Beach 2 1 Introduction -1111 WALKER CONSULTANTS BOND RESOLUTION FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION Under Article VII — Particular Covenants; Section 713. - Sale or Other Disposition of the Parking System; the City shall not sell, lease or otherwise dispose of all or any part of the Parking System, except as provided in Section 709 and this Section.3 Specifically clause (b) states to the extent provided by law, the City may in any Fiscal Year sell, lease or otherwise dispose of assets forming a part of the Parking System in excess of the amount set forth in clause (a) of this Section if, before any such transfer, there is delivered to the City Manager a report of Consulting Engineers or Rate Consultant demonstrating the sale, lease or other disposition of such property will not have a material adverse impact on the Net Revenues and stating his reasons therefore. In determining whether to render such report, the Consulting Engineers or Rate Consultant shall consider the usefulness of the assets to be disposed of to the operations of the Parking System, the uses to be made of any proceeds of sale and the rental income to be received with respect to any lease thereof. In addition to the clauses in this Section, no sale, lease or any other disposition of assets of the Parking System shall be consummated nor shall the proceeds of any such disposition be applied unless prior to such consummation or application, there shall be delivered an opinion of Bond Counsel to the effect that such disposition and the application of the proceeds as required herein will have no adverse impact on the exclusion of interest on any of the Bonds or other System Debt from gross income for Federal income tax purposes. As provided by the City of Miami Beach Finance Department, the following exhibit details a summary of the Parking System long-term debt. Exhibit 3: Parking System Long -Term Debt Summary by Year 2017 1,600,000 4,652,713 6,252,713 2018 1,670,000 4,579,713 6,249,713 2019 1,740,000 4,512,913 6,252,913 2020 1,805,000 4,444,113 6,249,113 2021 1,895,000 4,354,663 6,249,663 2022-2026 10,865,000 20,392,221 31,257,221 2027-2031 13,710,000 17,542,782 31,252,782 2032-2036 17,445,000 13,809,750 31,254,750 2037-2041 22,265,000 8,989,750 31,254,750 2042-2045 22,165,000 2,838,500 25,003,500 Source: City of Miami Beach Finance Department 2017-FY2016 CAFR 3 City of Miami Beach Resolution 2010-27491 Master Parking Bond Resolution 3 1 Introduction •WALKER CONSULTANTS FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION In addition to the summary provided in the previous exhibit, the following exhibit details the Parking System aggregate maturities of long-term debt. Exhibit 4: Parking System Aggregate Maturities of Long -Term Debt ries 2010A Series 201 Interest Priv ` 2017 1,525,000 402,300 - 1,317,563 75,000 2018 1,590,000 331,550 1,317,563 80,000 2019 1,660,000 267,950 - 1,317,563 80,000 2020 1,725,000 201,550 1,317,563 80,000 2021 1,810,000 115,300 1,317,563 85,000 2022 620,000 24,800 1,170,000 1,317,563 200,000 2023 960,000 1,270,763 1,110,000 2024 1,000,000 1,231,163 1,165,000 2025 1,045,000 1,188,663 1,220,000 2026 1,095,000 1,139,019 1,280,000 2027 1,145,000 1,088,375 1,345,000 2028 1,195,000 1,035,419 1,415,000 2029 1,250,000 980,150 1,485,000 2030 1,310,000 922,338 1,560,000 2031 1,370,000 861,750 1,635,000 2032 1,440,000 793,250 1,715,000 2033 1,510,000 721,250 1,805,000 2034 1,585,000 645,750 1,895,000 2035 1,665,000 566,500 1,990,000 2036 1,750,000 483,250 2,090,000 2037 1,835,000 395,750 2,195,000 2038 1,930,000 304,000 2,300,000 2039 2,025,000 207,500 2,415,000 2040 2,125,000 106,250 2,540,000 2041 4,900,000 2042 5,140,000 2043 5,400,000 2044 5,670,000 2045 5,955,000 8,930,000 1,343,450 27,405,000 21,846,518 58,825,000 2,932,850 2,930,600 2,927,400 2,925,000 2,921,800 2,919,250 2,911,250 2,855,750 2,797,500 2,736,500 2,672,500 2,605,250 2,534,500 2,460,250 2,382,250 2,300,500 2,214,750 2,124,500 2,029,750 1,930,250 1,825,750 1,716,000 1,601,000 1,480,250 1,353,250 1,108,250 851,250 581,250 297,750 62,927,150 1,600,000 1,670,000 1,740,000 1,805,000 1,895,000 1,990,000 2,070,000 2,165,000 2,265,000 2,375,000 2,490,000 2,610,000 2,735,000 2,870,000 3,005,000 3,155,000 3,315,000 3,480,000 3,655,000 3,840,000 4,030,000 4,230,000 4,440,000 4,665,000 4,900,000 5,140,000 5,400,000 5,670,000 5,955,000 95,160,000 4,652,713 4,579,713 4,512,913 4,444,113 4,354,663 4,261,613 4,182,013 4,086,913 3,986,163 3,875,519 3,760,875 3,640,669 3,514,650 3,382,588 3,244,000 3,093,750 2,936,000 2,770,250 2,596,250 2,413,500 2,221,500 2,020,000 1,808,500 1,586,500 1,353,250 1,108,250 851,250 581,250 297,750 86,117,118 Source: City of Miami Beach Finance Department 2017 The remaining sections of this analysis will detail the historical net income of Municipal Parking Lots 80 and 84 and the impact the disposition of these properties have on the Parking System Enterprise Fund. 4 1 Introduction 02 Net Income •WALKER CONSULTANTS OPERATING REVENUES FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION NET INCOME Historical net revenues for Municipal Lots P80 and P84 have primarily consisted of transient and monthly permit revenues. To assist with our analysis, Walker requested a five-year history of parking revenues for these locations. The most recent fiscal year (FY17) shows a revenue, net of sales tax, of $559.02 per space for Lot P80 and a revenue, net of sales tax, of $1,353.73 per space for Lot P84. The following exhibit details the historical breakdown of transient and monthly revenues, net of sales tax for each lot. Exhibit 5: Five -Year Revenues Net of Sales Tax — Municipal Lots P80 and P84 FY17* Budget 1 Actual Revenue Lot Total 1 Transient Monthly Total Per Space P80 14,700.00 3,931.96 12,838.50 16,770.46 559.02 P84 70,900.00 63,783.42 7,964.34 71,747.76 1,353.73 *Unaudited numbers subject to adjustment FY16 Budget 1 Actual Revenue Lot Total 1 Transient Monthly Total Per Space P80 22,900.00 6,407.38 10,231.87 16,639.25 554.64 P84 56,400.00 63,729.22 5,016.68 68,745.90 1,297.09 FY15 Budget Lot Total P80 24,600.00 P84 49,100.00 Actual Revenue Transient Monthly Total Per Space 1,687.84 13,645.32 15,333.16 511.11 72,859.63 8,896.72 81,756.35 1,542.57 FY14 Budget 1 Actual Revenue Lot Total 1 Transient Monthly Total Per Space P80 17,700.00 8,702.75 12,668.07 21,370.82 712.36 P84 42,400.00 55,781.79 5,383.24 61,165.03 1,154.06 FY1.3 Budget Lot Total P80 20,500.00 P84 39,400.00 Actual Revenue Transient Monthly Total Per Space 9,715.15 12,530.00 22,245.15 741.51 37,229.41 1,120.00 38,349.41 723.57 Source: City of Miami Beach Finance Department 2017 5 I Net Revenue •WALKER CONSULTANTS FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION In addition to the transient and monthly revenues, Walker also requested the historical citation revenue amounts collected for each lot. Due to the procedure used by the Parking Administration to receive and record parking citation revenues in conjunction with Miami -Dade County, citation totals could not be readily segregated by Municipal Lots P80 and P84. To assist with this request from the Parking Administration, Walker received an approximation of citation revenues for each lot based on the percentage of total parking meter revenues collected by the Parking System. Assuming parking citation revenues collected are a direct correlation of parking meter revenues generated by location, the information provided has been based upon a similar percentage for all citation revenues. The following exhibit details this approximation. Exhibit 6: Five -Year Parking Citation Revenues — Municipal Lots P80 and P84 (Approximation) Annual Citation Revenue Lot FY13 FY14 FY15 FY16 FY17 P84 $6,021.26 $6,056.54 $5,638.24 $4,922.19 $5,672.78 Per Space $113.61 $114.27 $106.38 $92.87 $107.03 Lot FY13 FY14 FY15 FY16 FY17 P80 $2,555.97 $2,570.95 $2,393.38 $2,189.48 $2,315.24 Per Space $85.20 $85.70 $79.78 $72.98 $77.17 Source: City of Miami Beach Parking Administration 2017 Upon review of the Parking Administration's parking space rental tracking system for the most recent fiscal years, it was found that Municipal Lots P80 and P84 did not have any space rental revenue of record. Historically, most of the space rental requests have come from areas south of North Beach, particularly areas more suitable for South Beach demand. With no other revenue categories available for review and consideration, the following exhibit provides a comprehensive breakdown of all revenue categories associated with Municipal Lots P80 and P84. 6 1 Net Revenue WALKER CONSULTANTS Exhibit 7: Five -Year Revenue Totals — Municipal Lots P80 and P84 FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION FY17* Budget ( Actual Revenue Lot Total I Transient Monthly Citations Total Per Space P80 $14,700.00 $3,931.96 $12,838.50 $2,315.00 $19,085.46 $636.18 P84 $70,900.00 $63,783.42 $7,964.34 $5,673.00 $77,420.76 $1,460.77 *Unaudited numbers subject to adjustment FY16 Budget I Actual Revenue Lot Total I Transient Monthly Citations Total Per Space P80 $22,900.00 $6,407.38 $10,231.87 $2,189.00 $18,828.25 $627.61 P84 $56,400.00 $63,729.22 $5,016.68 $4,922.00 $73,667.90 $1,389.96 FY15 Budget I Actual Revenue Lot Total I Transient Monthly Citations Total Per Space P80 $24,600.00 $1,687.84 $13,645.32 $2,393.00 $17,726.16 $590.87 P84 $49,100.00 $72,859.63 $8,896.72 $5,638.00 $87,394.35 $1,648.95 FY14 Budget I Actual Revenue Lot Total Transient Monthly Citations Total Per Space P80 $17,700.00 $8,702.75 $12,668.07 $2,571.00 $23,941.82 $798.06 P84 $42,400.00 $55,781.79 $5,383.24 $6,057.00 $67,222.03 $1,268.34 FY13 Budget Lot Total P80 $20,500.00 P84 $39,400.00 Actual Revenue Transient Monthly Citations Total Per Space $9,715.15 $12,530.00 $2,556.00 $24,801.15 $826.71 $37,229.41 $1,120.00 $6,021.00 $44,370.41 $837.18 Source: City of Miami Beach Finance Department 2017 7 j Net Revenue •WALKER CONSULTANTS OPERATING EXPENSES FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION Operating expenses associated with Municipal Lots P80 and P84 consist of the following itemized costs: 1. Utility charges from Florida Power and Light (FPL) to provide nighttime lighting and electrical power for the pay stations. 2. Pay station management software costs associated with the operation, communications and management of data for each station and transaction. 3. Pay station warranty costs to maintain software and service repair needs. 4. Parking lot sanitation costs to ensure regular cleaning and trash removal requirements are met. 5. Pay station collection expenses related to the parking Administration's effort to collect and deposit monies from parking payment transactions. 6. Parking lot sign maintenance expense to ensure signs are maintained and refreshed as needed. The following exhibit provides a comprehensive breakdown of all operating expense categories4 associated with Municipal Lots P80 and P84. Exhibit 8: Five -Year Operating Expense Totals - Municipal Lots P80 and P84 Lot P84 P80 Lot P84 P80 Lot P84 P80 Lot P84 P80 Lot P84 P80 Lot P84 P80 tot P84 Per Space P80 Per Space FY12 $1,674.87 $574.24 $1,200.00 $1,200.00 $850.00 $850.00 $360.00 $360.00 510,000.00 510,000.00 $226.00 $226.00 FY13 FY14 FY15 FY16 Annual FPL Expense $1,816.98 $1,869.70 $1,779.41 $1,745.29 $449.77 $723.47 $765.99 $597.60 Annual EMS Pay Station Expense $1,200.00 51,200.00 $1,200.00 $1,200.00 $1,200.00 $1,200.00 $1,200.00 $1,200.00 Annual Pay Station Warranty Expense $850.00 5850.00 $850.001 $850.00 $850.00 $850.00 $850.001 5850.00 Annual Pay Station Collection Expense $360.00 $360.00 $360.00 $360.00 $360.00 $360.00 $360.00 $360.00 Annual Parking Lot Sanitation Expense $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 510,000.00 $10,000.00 Annual Parking Sign Maintenance Expense $226.00 $226.00 $226.00 5226.00 $226.00 5226.00 5226.00) Totals $14,505.70 $14,415.41 $14,381.29 $273.69 $271.99 $271.35 $13,359.47 $13,401.99 $13,233.60 $445.32 $446.73 $441.12 $14,310.87 $14,452.98 $270.02 $272.70 $13,210.24 $13,085.77 $440.34 $436.19 *Unaudited numbers subject to adjustment FY17* 51,928.87 $661.39 $1,200.00 $1,200.00 $850.00 $850.00 $360.00 $360.00 $10,000.00 $lo,000.00 $226.00 $226.00 $14,564.87 $274.81 $13,297.39 $443.25 Source: City of Miami Beach Finance Department 2017 4 All operating expense categories are shown as budgeted amounts except for the FPL expense category, which is shown as an actual amount. 8 1 Net Revenue •WALKER CONSULTANTS NET INCOME SUMMARY FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION The following exhibit details the combined net income for Municipal Lots P80 and P84 as a factor of operating revenues minus operating expenses, providing for a net income total and net income per space. Exhibit 9: Five -Year Net Income - Municipal Lots P80 and P84 Combined P80/84 FY17* FY16 FY15 FY14 FY13 Revenues P80/84 Expenses Transient $67,715.38 $70,136.60 $74,547.47 $64,484.54 $46,944.56 Monthly $20,802.84 $15,248.55 $22,542.04 $18,051.31 $13,650.00 Citation $7,988.00 $7,111.00 $8,031.00 $8,628.00 $8,577.00 Total $96,506.22 $92,496.15 $105,120.51 $91,163.85 $69,171.56 Utility $2,590.26 2,342.89 $2,545.40 $2,593.17 $2,266.75 EMS $2,400.00 $2,400.00 $2,400.00 $2,400.00 $2,400.00 Warranty 51,700.00 $1,700.00 $1,700.00 51,700.00 $1,700.00 Collection $720.00 $720.00 $720.00 $720.00 $720.00 Sanitation $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 Maintenance $452.00 $452.00 $452.00 $452.00 $452.00 Total $27,862.26 $27,614.89 $27,817.40 $27,865.17 $27,538.75 ?80/84 Income $68,643.96 $64,881.26 $77,303.11 $63,298.68 541,632.81'. Per Space $827.04 $781.70 $931.36 $762.63 $501.60- *Unaudited numbers subjected to adjustment Source: Walker Consultants and City of Miami Beach Finance Department 2017 As shown in the preceding exhibit, the combined net income for Municipal Lots P80 and P84 experienced a peak income level of $77,303.11 in FY15, representing a per space income of $931.36 for the 83 total spaces. If the lots are disposed through a property swap, all revenues and expenses become null, except for the $720 annual collection costs. This operating expense item is the result of an indirect cost allocation from the Parking System, representing the effort the Parking Administration assigns to the collection of revenues for these specific lots. It is understood that the disposition of the lots will not reduce Parking System personnel counts. 9 1 Net Revenue 03 Disposition Impact likWALKER CONSULTANTS FINANCIAL ANALYSIS MUNICIPAL PARKING TRANSACTION DISPOSITION IMPACT Walker received a copy of the City of Miami Beach Financial Report for the Fiscal Year Ended September 30, 2016. The report was prepared by the City of Miami Beach Finance Department and included an Independent Auditor's Report from Crowe Horwath, LLC, a section titled Management's Discussion and Analysis (Unaudited), the 2016 Financial Statements, and a section titled Required Supplementary Information (Unaudited). The following exhibit provides a summary of the revenues, expenses and changes in net position for the Parking System Enterprise Fund as detailed in the Financial Reports. Exhibit 10: Parking System Enterprise Fund — Fiscal Year End Summary (September 30, 2016) 2016 Operating Revenues $51,499,302 Operating expenses, excluding depreciation $35,647,133 Operating income before depreciation $15,852,169 Depreciation ($5,973,576) Nonoperating revenue $4,058,273 Nonoperating expenses ($1,361,533) Capital contributions $0 Transfers out ($9,215,478) Change in net position $3,359,855 Source: City of Miami Beach Financial Report Fiscal Year Ended September 30, 2016 As demonstrated in Exhibit 9 (Five -Year Net Income), the disposition of Municipal Lots P80 and P84 provides for an approximate peak fiscal year net income loss of $77,303 from the Parking Fund's operating income statement. It is Walker's professional opinion that this estimated annual loss of $77,303 will not have a material adverse impact on the Net Revenues of the Parking System. This opinion is further supported by the results of the FY16 Fiscal Year End Summary where the Parking Enterprise Fund reveals a positive change in net position, resulting in a dollar amount that is substantially more than this estimated loss of net income. Subtracting the $77,303 net income loss from the FY16 Operating Income provides an adjusted Operating Income of $15,774,866. To further support an opinion of the usefulness of the assets to be disposed and the uses to be made of any proceeds of the transaction, Walker understands the terms of the proposed municipal transaction, detailed in this assessment, provide for the offering of 270± new parking structure spaces (located in an adjacent North Beach development site) in exchange for the disposition of the 83± spaces located in Municipal Lots P80 and P84. Walker projects the potential for a positive net income impact if the 270± new parking spaces provide an annual operating income in excess of $287 per space. 5 City of Miami Beach FY16 CAFR, Page 33 10 1 Disposition Impact