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RESOLUTION 87-18792 RESOLUTION NO. 87-18792 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, WAIVING FORMAL BIDDING PROCEDURES, AWARDING A CONTRACT TO LAVENTHOL AND HORWATH FOR THE COMPLETION OF AN UPDATE TO THE FINANCIAL FEASIBILITY FOR CONVENTION CENTER DEVELOPMENT TAX REVENUES AND AUTHORIZING THE MAYOR TO EXECUTE THE NECESSARY DOCUMENTS. WHEREAS, the City of Miami Beach entered into an interlocal agreement with Metropolitan Dade County in December of 1984 for the purpose of issuing a County Special Obligation Bond for the expansion of the Miami Beach Convention Center; and WHEREAS, the County authorized and issued $48,015,000 Series 1985A Special Obligation Bonds (Miami Beach Convention Center Project), utilizing the City's two-thirds portion of the Convention Center Development Taxes, for the purpose of expansion and improvement to the Center; and WHEREAS, the Tourism and Convention Center Expansion Authority and the City Commission are desirous in obtaining additional funding for the completion of the expansion project; and WHEREAS, the bond indenture allows for the issuance of additional bonds for the completion of the project; and WHEREAS, the exact amount of the additional bonds will be determined by an update to the financial feasibility study; and WHEREAS, it is in the best interest of the City to waive formal bidding procedures and award the contract to Laventhol and Horwath based on the fact that the original study was completed by this firm and a lower cost and shorter time to complete the update will be obtained; and WHEREAS, Laventhol and Horwath have submitted an engagement letter to the City outlining the scope of the services to be provided, the time for completion and the cost of the update; and WHEREAS, the City has funds available in the City's Convention Center Development Tax General Trust Fund for the purpose of said study. NOW, THEREFORE BE IT DULY RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that: Section 1. The City of Miami Beach, Florida, Commission hereby wavies formal bidding procedures and awards the contract to the firm of Laventhol and Horwath for the completion of an update to the Convention Center Development Tax in accordance with the attached engagement letter, which is incorporated into the resolution by reference, at a cost not to exceed $22,000. Section 2. The City of Miami Beach, Florida, Commission authorizes the Mayor, or in his absence the Vice-Mayor, to execute any documents which may be required for the completion of said update. PASSED and ADOPTED this 18th day of March 1987. Vice Mayor / Attest: City Clerk APPROVED AS TO FORM: • Leal Department Dated G��� Laventhol 0201 Alhambra Circle Coral Gables,FL 33134 Certified Public Accountants (305) 442-2000 Telex: 264822 March 4 , 1987 Mr. Rob Parkins City Manager City of Miami Beach 1700 Convention Center Drive Miami Beach, Florida Dear Mr. Parkins: Based on our recent conversations, we are pleased to present this proposal to provide various consulting services in connection with the Dade County Convention Center Development Tax (CDT) . We understand that you desire to retain our firm to update the estimated future revenues from the CDT to be available for the expansion of the Miami Beach Convention Center, previously prepared in November, 1985. In this proposal, we describe the scope of services we are prepared to perform, the terms and conditions, and timing and professional fees which will govern this engagement. It is our understanding that your office has constraints with respect to completion of this engagement. We will do our best to meet all imposed deadlines. A member of Horwath Sz Horwath International with affiliated offices worldwide. 4 Mr. Rob Parkins -2- March 4 , 1987 SCOPE OF SERVICES The objectives of our study will be as follows: To analyze the composition of CDT revenues collected for 1986 and compare to our November 1985 report. This information will be compiled for discussion purposes only. It will not be incorporated into our final report; To prepare updated estimates of future CDT revenues for the 1988 to 1995 period under study. In order to best accomplish the foregoing objectives, our study will be performed as follows: Update Estimates of Future Convention Development Tax Revenues Our work program to update our original estimates of future convention development tax revenues will concentrate on transient lodging accommodations which typically serve guests staying less than six months, as required by the revised tax legis- lation. These facilities would include primarily hotels and mo- tels. Other classifications such as apartments, apartment hotels and motels, rooming houses, tourist or trailer camps and condomin- iums typically serve permanent residents and guests staying more than six months. These facilities can be expected to generate little revenue subject to the tax, and will therefore be excluded from our primary analysis. Mr. Rob Parkins -3- March 4 , 1987 Our updated study will include, but will not necessarily be limited to, the following procedures. We will: • Meet with you to obtain information on administrative procedures, costs and ad- justments that are needed to translate the future estimates of CDT revenue figures into expected net tax collections ; ▪ Evaluate CDT revenues collected for 1986 against our original estimates and make comment as to any variations, as appropri- ate; ▪ Contact the major hotels, and a selection of secondary hotels and motels, as appro- priate, to obtain updated information re- garding historic and estimates of future occupancy, average rates, and the market mix of guests; ▪ Update our data base of economic, conven- tion and tourism trends in the area and proposed projects that will influence future growth in the demand for transient accommodations in the area; • Compile an updated future supply and demand analysis for hotels and motels in the vari- ous geographic sectors of the County for the period 1988 through 1995 ; • Estimate future gross sales in transient related accommodations and the amount of convention development tax revenues that Dade County is expected to collect annually for 1988 through 1995 ; • Estimate that portion of net convention development tax revenues which would be available for debt service on the proposed project for the 1988 to 1995 period. Mr. Rob Parkins -4- March 4 , 1987 We will not specifically include a detailed estimate of the potential impact that the proposed project would have on area rooms demand and the resulting tax revenues. However, the develop- ment of the project will be considered in estimating the overall growth rates for the various segments of rooms demand. COMMUNICATION AND REPORTING PROCEDURES Timely communication between Laventhol & Horwath and representatives of the City of Miami Beach is important to the successful completion of the study. On-going communication will serve as a means for us to keep you apprised of our progress and preliminary findings, and to receive input from you. We will not ascertain the legal and regulatory require- ments applicable to this project, including zoning, other state and local government regulations, permits and licenses. Further, no effort will be made to determine the possible effect on this pro- ject of present or future federal, state, or local legislation including any environmental or ecological matters or interpreta- tions thereof. We will present a written report containing our findings, conclusions and recommendations concerning the updated analysis of CDT revenues. The report will be based on estimates, assumptions • 3 Mr. Rob Parkins -5- March 4 , 1987 and other information developed from research of the market, knowl- edge of the industry and meetings with representatives of Dade County and other governmental authorities during which we will be provided with certain information. The sources of information and bases of the estimates and assumptions will be stated in the re- port. The terms of this engagement are such that we have not obligation to revise the report or the estimated future financial results to reflect events or conditions which occur subsequent to the date of our final report. However, we will be available to discuss the necessity for revision in view of changes in the eco- nomic or market factors affecting the project. Since the estimates will be based on assumptions which are inherently subject to uncertainty and variation depending upon evolving events, we will not represent them as results that will actually be achieved. You have informed us that you intend to include our reports in an offering circular for the purpose of soliciting investments in your convention development tax revenue bonds. We understand that you will retain legal counsel experienced in such bond offerings to guide you in this offering. Under the standards of the American Institute of Certi- fied Public Accountants (AICPA) , a presentation of estimated future Mr. Rob Parkins -6- March 4 , 1987 revenues, such as those included in our study, is not considered a full financial presentation and, accordingly, can not be the sole presentation in a public offering document. Therefore, in order to include our study as a supporting documentation in the offering, it is necessary for a full financial presentation to accompany it. We require that, before our reports are released for a distribution to investors, your legal counsel will furnish us a satisfactory letter which indicates that the proposed offering is being set up to comply with the Securities Act of 1933 , and that you are adopting and following appropriate procedures to assure compliance with that Act. The letter will also indicate the nature and extent of any filing and review requirements of applicable state authorities. All proofs of offering material must be sub- mitted to us prior to reproduction or publication in order for us to approve all references to our firm and the study. TIMING AND FEES Based on the scope of work outlined and our experience with similar engagements, we estimate that professional fees for the study will be $20, 000 and will take approximately four weeks to complete. (See Exhibit A for summary of personnel hours. ) Mr. Rob Parkins -7- March 4 , 1987 One week to ten days must be added to this time for typing, reproduction and review. Travel and maintenance expense and costs for typing, computer time and report reproduction are not included in the estimate above, but will be added to our invoices. These expenses will not exceed $2 , 000. Included in this estimate will be one original camera ready document. We understand that you will be responsible for any additional copies required. Our fee estimates include two meetings with the project team, which we consider reasonable in light of the nature and scope of our services. Should such meeting time exceed this estimate, we will bill you for the excess at our standard hourly rates. Our fees will be billed to you in accordance with the following schedule: Upon authorization $ 10, 000 Two weeks 5, 000 Upon completion 5, 000 plus expenses If our proposal meets with your approval, please sign the enclosed copy of this letter and return it to us as authorization to proceed with the study. The signed copy of this proposal will constitute our agreement. Mr. Rob Parkins -8- March 4 , 1987 We appreciate the opportunity to present this proposal to you and look forward to working with you on this engagement. Very t '•ly yours, LA 04 HOL & HO"WATH —;dora.: M Ch- = e Burr 1•. Senior Principal MCB/law Enclosure 41-#14438 cc: Mr. Robert Nachlinger Mr. Edward Marquez ACCEPTED BY: N\ jt.tatA.L,itd\ - ( Vice Mayor DATE: 3/),v17 Attest: elat-:—t- 591- 21.1-t City Clerk 3h-3/J'7FO R 1{, APPflVç': O LEGALDV r (3,./i21(1. 1-t-ae &Ace 1 • • • EXHIBIT A SUMMARY OF PERSONNEL HC URS DADE COUNTY CONVENTION CENTER DEVELOPMENT TAX MARCH 3, 1987 UPDATE ESTIMATES OF FUTURE CC* TF TICK DEVELOPMENT TAX REVENJ ES Partner Manager Consultant Total I.sk I: Planning and Orientation 4 4 8 16 Task II: Review Prior Estimates vs. Actual Collections 8 25 33 Task III: Update Lodging Market Performance 4 25 29 Task IV: Update Economic, Convention and Tourism Trends 3 25 28 Task V: Update Estimates of Lodging Supply and Demand 4 20 24 Task VI: Update Estimates of Gross Sales Subject to CTS 3 6 20 29 Task VII: Update Estimates of CDT Revenues 6 10 20 36 Total hours 13 39 143 195 Standard rates $ 180 $ 160 $ 80 $102.67 Professional fees $ 2,340 $ 6,240 $11,440_ $20,020 ORIGINAL RESOLUTION NO. 87-18792 Waiving formal bidding procedures, awardirq a contract to Laventhol and Horwath for the completion of an update to the finan- cial feasibility for Convention Center Development tax revenues and authorizing the Mayor to execute the necessary docu- ments)