Art Basel 2008 Valet Parking OperationsMIAMI BEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
Jorge M. Gonzalez, City Manager _,)?
Kathie G. Brooks, Budget and Performance Improvement DirectorY
James J. Sutter, Internal Audito~,/~/r
May 15, 2009 7 DATE:
AUDIT:
PERIOD:
Valet Parking Operational Audit-Art Basel 2008
December 3 through December 7, 2008
This report is the result of an audit of the Gold Star Inc./First Class Parking Systems LLC valet
parking operations conducted during Art Basel Miami Beach 2008 as requested by the Parking
Department Administration.
INTRODUCTION
Art Basel Miami Beach 2008 was held at various City locations (Convention Center, Botanical
Garden Center, etc.) between December 3rd and ih. It combined an international art show with an
exciting program of special exhibitions, parties and crossover events including music, film,
architecture and design. The Miami Herald's 12/08/08 article estimates event attendance to barely
top 40,000 (a six percent decline from last year's 43,000) with many patrons using the convention
center valet parking services provided by the City's contractor called Gold Star Inc./First Class
Parking Systems LLC.
Gold Star Inc., an active Florida for-profit corporation, was granted through the City Commission's
adoption of Resolution No. 2005-25791 the exclusive privilege of operating valet parking
concessions at the Fillmore (formerly TOPA), Miami Beach Convention Center and such other
properties authorized by the City as the Bass Museum of Art, Botanical Garden Center, Miami City
Ballet, etc. The corresponding agreement commenced on 11/01/05 and expired on 10/31/08 with
the City having the sole option to renew the same terms and conditions for an additional two years.
It encompassed a multitude of issues including monthly fixed minimum rental payments, insurance
coverage, signage, property maintenance, etc.
In compliance with Section 7 of Gold Star Inc.'s agreement entitled "assignment; no sublet", the City
Commission through the ratification of Resolution No. 2007-26732 on 01/17/07 approved the sale of
a majority interest in Gold Star Inc. to Jorge Zuluaga, the principal shareholder of First Class Parking
Services LLC. Mr. Zuluaga acquired a 75% interest in the company while Arthur Schultz retained a
25% interest.
The City elected not to extend the contract terms for an additional two years in 2008 as a Request
for Procurement was prepared and distributed. Until a final decision is made on the selection of a
new vendor, Gold Star Inc./First Class Parking Systems LLC's contract has been extended on a
month-to-month basis.
In an effort to improve future customer/promoter satisfaction and turnaround times at this year's
event, the Parking Department and contractor agreed in a 11/25/08 signed letter to additional more
We ore commilled to providing excellent public seJVice ond sofeiy to o/1 who live, work, one! ploy in our vibrant, trapicol, historic comrnuniiy.
Internal Audit Report
Valet Parking Operational Audit-Art Basel 2008
May 15, 2009
stringent terms than those listed in the agreement (similar terms were followed for Art Basel Miami
Beach 2006 and 2007).
The following table compares the number of valet parked vehicles by day during the last three Art
Basel Miami Beach events:
Event Days
(Actual Dates Vary) 2006 2007 2008
Wednesday 635 781 746
Thursday 340 583 360
Friday 610 655 521
Saturday 670 735 471
Sunday 620 461 475
Total 2,875 3,215 2,573
The 19.97% decrease in valet parked vehicles for the Miami Beach Art Basel 2008 event in
comparison to 2007 can be attributed to the economic downturn per Gold Star management. The
contractor stated that they have experienced similar decreases in the number of valet parked
vehicles at the recently held International Boatbuilders Exhibition and Conference or IBEX (1 0/06/08
through 10/08/08) and the South Florida International Auto Show (11/07/08 through 11/16/08).
PROCESS DESCRIPTION
Customers arriving at Art Basel Miami Beach 2008 via their personal vehicles have the option of
either self-parking in the nearby lots or garages and paying up to $15 daily, paying the single and/or
master meters the prescribed rate based on the estimated length of their stay or valet parking in
front of Hall D for $20. If they choose to valet park, then the customer enters the valet ramp located
just south of Hall C and outlined with traffic cones.
A Gold Star Inc./First Class Parking Systems LLC ramp attendant greets the customer and tries to
collect the $20 valet parking fee. Per Resolution No. 2008-26767, Art Basel Miami Beach 2008 is
one of the eight sanctioned events whereby the contractor is able to increase the valet parking fee
from $15 to $20 with the City receiving $2 of this incremental $5 increase. The $5,146 (2,573 valet
parked vehicles times $2 per vehicle) payment from Gold Star Inc. was received on 02/02/09 via
check number 2360.
Most customers paid upon arrival but the option is also extended to pay when leaving with their pre-
numbered blue ticket noted accordingly. Only cash is accepted and the ramp attendant is required
to have a sufficient amount of change.
VIP parking is available at the customer's request of those willing to pay the $20 valet parking fee
plus a premium for quick curbside service. The amount of the premium given is at the discretion of
the customer and should not be specified by the ramp attendant. These VIP vehicles were primarily
parked in front of Hall C in the valet ramp or at the Holocaust Memorial lot.
The pre-numbered blue tickets for this event started at 4000 and continued sequentially afterwards.
The blue tickets have three different sections with one given to the customer upon delivery of the
vehicle, one positioned face up on the vehicle's dashboard and the third attached to the customer's
keys.
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Internal Audit Report
Valet Parking Operational Audit-Art Basel 2008
May 15, 2009
The next runner or contractor employee responsible for parking and retrieving patron's vehicles, in
the queue is summoned to drive the vehicle to its temporary storage location in one of the 530
spaces pre-approved by the City's Parking Department. He/she indicates on the ticket attached to
the keys the location where the vehicle was parked (lot, row and space). Additionally, the contractor
marks a color coded circle on the ticket to further specify the applicable lot as another means to
facilitate locating.
The runner then returns the customer's keys attached to the ticket to the contractor's administrative
personnel for storage on the key board. The key board is located underneath a white tent located
just south of Hall D. Here the keys remain safeguarded until the event patron decides to leave and
requests return of his/her vehide by submitting their ticket.
A runner is summoned to retrieve the vehicle while the ticket is returned to the customer who is then
instructed to cross Convention Center Drive to the pick-up area in front of the Botanical Gardens. A
Gold Star representative is stationed here with a radio to help expedite the process and answer any
customer questions.
As the vehicles are driven by the runner to the pick-up area, the ticket numbers are announced. The
customers are required to remit their section of the ticket to take possession of the vehicle and exit
the premises.
OVERALL OPINION
The City's valet parking contractor Gold Star Inc./First Class Parking Systems LLC faced a daunting
and formidable task in satisfying Art Basel Miami Beach 2008's valet parking needs. The daily time
certain event ending, the volume of vehicles and the limited availability of parking spaces made it
difficultfor the contractor to succeed. Yet, Internal Audit believes that the contractor in conjunction
with the City's Parking and Police Departments performed commendably. While there was a
decrease in valet parked vehicles, overall Improvement was noted in customer key safekeeping,
customer service, logistics, and turnaround times.
However, regardless of the successes there are still areas where improvement can be made prior to
next year's Art Basel Miami Beach. A majority of these issues arose because of the time constraints
associated with Vernissage and the inherent difficulty in supervising the runners. Shortcomings in
the following areas were noted during testing and are described further in the section entitled
"Findings, Recommendations and Management Responses".
• Contractor personnel,
• Utilization of provided parking spaces,
• VIP parking, and
• Turnaround times.
PURPOSE
The purpose of this audit is to determine whether the contractor complied with selected terms listed
in both their signed agreement and the 11/25/08 letter aimed at providing timely and quality
professional valet services to Art Basel Miami Beach patrons.
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Internal Audit Report
Valet Parking Operational Audit-Art Basel 2008
May 15, 2009
SCOPE
1. Confirm that the contractor has complied with selected criteria outlined in the signed
agreement and the Parking Department's 11 /25/081etter. Examples of areas tested include
meeting minimum staffing requirements, comparing calculated turnaround times to stated
goals, monitoring VIP parking and the rates charged, assessing the performance of
assigned staff toward valet patrons, et.
2. Confirm through observations that the contractor has implemented sufficient internal controls
in their valet parking operations and followed valet parking guidelines established by the
City.
3. Confirm that the contractor is current with their business tax receipt and maintains sufficient
insurance coverage.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
1. Finding -Contractor Personnel
The contractor employed more than eighty different people at various times to handle the
event's valet parking needs. Although properly attired in uniforms and noted acting
courteous to customers, the following observations were noted:
a. Among other items, the 11/25/08 letter signed by both the City's Parking Director and
Gold Star Inc. required the contractor to have thirty-five runners (individuals
responsible for parking and retrieving patron's vehicles) present one hour before
show times and to remain throughout the show. However, a verbal agreement was
reached between the City's Assistant Parking Director and the contractor allowing
Gold Star Inc. to have fewer runners initially and then to ramp up to at least thirty-five
later in the day as needed, and as long as customer service was not affected. Yet,
subsequent review of submitted Employee Sign-In Sheets showed that the
contractor only had a total of twenty-eight runners work on 12/05/08 and thirty-one on
12/07/08. A sufficient number of runners were present for the other three days of the
event.
Despite not reaching the desired number on 12/05/08, Internal Audit opines that the
shortage did not severely hinder valet operations and turnaround times (5.92 minute
average for the day). No testing was performed on 12/07/08 so the impact of not
being fully staffed could not be determined.
b. In an effort to comply with Ordinance No. 2003-3418, Miami Beach City Code
Section 18-341 and the 11/25/08 signed letter, the contractor provided an employee
report listing the names and drivers' license numbers of forty-four employees who
would be working the event to the Parking Department. Yet, only thirty of the forty-
four listed names or 68.18% actually worked one day of the event based on review of
the provided daily Employee Sign-In Sheets used by the contractor for payroll
purposes during Art Basel Miami Beach 2008. Furthermore, 57.75% or forty-one of
the seventy-one runners who worked at least one day during the event did not
appear on the aforementioned employee report provided to the Parking Department.
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Internal Audit Report
Valet Parking Operational Audit-Art Basel 2008
May 15, 2009
Additionally, the employee report is required to be submitted to the Parking Director
or his/her designee no later than the fifth of the month or be subject to a $25 per day
fine. However, the Parking Department did not receive this report via e-mail until
12/09/08 or four days past the due date at the insistence of the Parking Department
and no warnings or fines were apparently issued
Internal Audit's testing showed that three of the forty-one drivers' licenses furnished
either expired prior to or during Art Basel Miami Beach 2008. Of these, one runner
worked at the event when his submitted driver's license expired on 09/29/08.
c. The Parking Department provided driver license check results for only one Gold Star
employee. This report from the Florida Department of Highway Safety & Motor
Vehicles is used to determine the validity of the driver's license and that there are no
restrictions or endorsements outstanding.
d. Runners were initially confused about the lot numbers and locations within but the
confusion subsided as the event progressed. A handful of runners were overheard
receiving training upon their arrival as they apparently were not trained in advance or
did not retain the information received.
e. Runners were also frequently observed entering the lot and pressing the valet
vehicles' car alarm to expedite locating. Among other negative implications, it also
makes the time spent by the runner in determining and recording the vehicle's
parking space of lesser importance.
Recommendation(s)
The implementation of the following recommendations regarding contractor personnel
should help improve future performance and labor relations with the City:
a. The contractor should comply with all previously agreed upon terms and maintain
required staffing levels. Whenever possible, any deviations should be approved in
advance and in writing to help prevent any future disagreements.
b. Going forward, a complete employee report should be submitted to the Parking
Department timely or be subject to the associated fines. The Parking Department
should periodically review all submitted drivers' license expiration dates prior to the
event's start. Any expiring before or during the month should be flagged with the
applicable employee not able to work until corrected.
c. The designated Parking Department employee responsible for running the Driver
License Check reports should print a copy and attach it to each submitted employee
driver's license at least once a year.
d. The contractor should have better trained their runners prior to the event's
commencement.
e. Although difficult to enforce, runners should be instructed to refrain from entering lots
and pressing vehicles' car alarms to help locate the vehicle quicker.
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Internal Audit Report
Valet Parking Operational Audit-Art Basel 2008
May 15, 2009
Contractor's Response
The received contractor's response is as follows:
a. Staffing Levels: As your findings noted, an agreement was reached with the
Assistant Parking Director allowing for lower initial staffing levels at the event start
time with an agreed upon ramp-up to the desired staffing levels prior to "peak"
periods during the event. First Class Parking did not deploy staff at the agreed upon
levels for both 12/5/08 and 12/7/08 given lower than expected demand for valet
services on both dates. As noted in the audit, the reduced staffing levels did not
hinder service levels, as evidenced by the average vehicle delivery times
documented on page 8 of the audit. First Class Parking concurs with
recommendation a. set forth above and will continue to see prior authorization to any
deviations to their approved staffing plan. It is important to note, however, that
obtaining prior written approval may prove logistically challenging.
b. Employee Report: First Class agrees with the findings with respect to our failure to
timely submit the required employee report. Submission was complicated by
uncertainties surrounding the extension of the current valet concession contract,
which delayed management's planning for Art Basel. First Class will comply with the
required submission deadlines in the future.
With regard to the expired licenses, we acknowledge this oversight and can only
attribute the failure to our former office manager's failure to identify the expired
license during the preparation of the required employee report. We apologize for
this unfortunate oversight and hope that our compliance record in this area and
commitment to greater vigilance adequately addresses this finding.
d. Employee Orientation: Prior to Art Basel, First Class held two meetings to review
the operations plan with all employees scheduled to work the event. These
meetings were conducted on-site on December 1st and 2nd. The first meeting
consisted of an orientation and review of the operations plan for the event with all
staff. Each employee was provided with a copy of a map indicatingthe location of
valet service parking lots for the event and each numbered parking stall. Employees
were required to return the following day to obtain uniforms for the event and to ask
any questions about the orientation plan discussed at the prior meeting. As with any
other operation, less than a handful of employees did not recall the instructions
provided at the orientation meeting and/or had questions related to the mapwhich
management on-site during the event helped to clarify.
e. Valet Runners Use of Car Alarms: First Class has instructed all employees that use
of the car alarm to locate a vehicle in a valet lot is not an acceptable practice. As
noted in the auditor's recommendations, supervision and enforcement with respect
to this practice is a challenge. First Class has expressed to the Parking Department
that the numbering of parking stalls in city-owned parking lots may help curb this
practice by runners, as it will aid their efforts to locate a vehicle quickly without
reference to a printed map.
Parking Department's response:
a. Reduced staffing levels were not approved by the Assistant Parking Director and the
contractor did not meet their agreed numbers of staffing. For future events, the
contractor will be required to have staffing levels in accordance to agreed levels.
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c. The Parking Department employee responsible for running the Driver License Check
reports will print a copy and attach it to each submitted employee driver's license at
least once a year.
2. Finding -Parking Spaces
The Parking Department with the assistance of Global Spectrum, the independent company
hired by the City to manage the Convention Center, agreed to make a total of 530 parking
spaces accessible to the contractor during Art Basel Miami Beach 2008. These spaces
were located in the lot behind The Fillmore, the Miami Beach Convention Center's south and
north loading docks, the Holocaust Memorial lot, and the Miami Beach High School lot and
bus ramp. Testing done during the event found the following parking space limitations:
a. Trucks and containers, as well as Recreation Department and Convention Center
workers' personal vehicles blocked parking spaces in the north loading dock and
were not removed. As a result, the contractor had only about fifty of the one hundred
promised spaces available in this area for much of the event.
b. Despite having contractor provided security at the valet parking lots, parked vehicles
still contained advertising brochures on their windshield. Several customers
receiving their vehicles were subsequently noted throwing these brochures on the
ground.
Recommendation(s)
The following recommendations should be implemented as soon as possible:
a. Global Spectrum staff should have made one hundred spaces in the north loading
dock available to the concessionaire in accordance with the 11/25/08 signed letter.
Since this appears to be a reoccurring problem based on prior audits, Internal Audit
believes that the City should only commit to fifty spaces in this area for Art Basel
Miami Beach 2009.
b. Contractor security should halt individuals from placing advertising brochures on
vehicles under their care. If these individuals persist, the City's Code Compliance
Division should be called immediately to remedy the situation.
Contractor's Response
The contractor response to the aforementioned finding is stated below:
a. Parking Inventory: First Class concurs with the auditor's findings with respect to the
deficiency in the number of committed spaces. It would remain our preference to
have the existing commitment continued. Should the committed inventory be
reduced as recommended, we will do our best to work with Parking Department staff
to mitigate any adverse impact such a change might have on valet service levels.
b. Vehicle Leafleting: First Class recognizes that the leafleting of vehicles by area
vendors is viewed negatively by patrons. We will instruct our security staff to be
more vigilant in their efforts to curb such activities. First Class will work proactively
with the Parking Department to ensure that First Class site managers have access to
a contact number for the code compliance officer on duty on the evening of
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Valet Parking Operational Audit-Art Basel 2008
May 15, 2009
scheduled events that can assist with recalcitrant individuals.
3. Finding-VIP Parking
VIP customers are those requesting and willing to pay a premium for quick curbside service.
It is an industry accepted practice that is not addressed in either the signed agreement or
the 11/25/08 signed letter. We noted that frustrated VIP customers complaining, especially
during Vernissage, that they had to wait to pick up their vehicles across the street at the
designated area in front of the Botanical Gardens with the other customers.
Recommendation(s)
The City should incorporate VIP parking into the next agreement to eliminate any future
confusion. Meanwhile, the contractor should inform VIP customers in advance that their
vehicles will be returned as able at the designated area before additional monies are
received to help prevent any future misunderstandings.
Contractor's Response
First Class concurs with the auditor's recommendation that VIP Parking should be
addressed in its future agreement. Going forward, First Class would recommend that
vehicle delivery for VIP customers should occur at the ramp where the vehicle is stationed,
thus relieving the customer of their need to walk across the street and the additional delay
associated with the current delivery procedure. Given the limited number of vehicles that
utilize the VIP service, modification of the delivery procedure should not impact customer
safety.
4. Finding -Turnaround Times
Since turnaround time is not addressed under the current contract, the Parking Department
set a goal, on an operational agreement letter specifically to address the valet needs for the
Art Basel, of twenty minute turnaround times during Art Basel Miami Beach 2008. A
turnaround time equals the amount oftime elapsed after a valet customer submits his ticket
to the concessionaire to the time that his/her vehicle is delivered. Internal Audit calculated
turnaround times daily at various intervals to provide a representative sample. The table
below provides a daily average of the tested turnaround times in minutes by day and the
percentage of observations within five minute increments for the past two Art Basel Miami
Beach events:
Number of
Turnaround Times
Calculated
74
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72 96
10.39 5.92
Internal Audit Report
Valet Parking Operational Audit-Art Basel 2008
May 15, 2009
Although there is still room for improvement a positive trend has been shown in the table
above as the contractor was able to significantly reduce turnaround times at this year's event
in comparison to last year for similar days tested. For example, turnaround times decreased
by 35% to 10.39 minutes on Wednesday, which has the highest daily number of valet,
parked vehicles during Art Basel Miami Beach.
Furthermore, Wednesday typically has the highest daily turnaround times due to the
overlapping events (one event ended at 5:00pm while Vernissage began concurrently),
limited traffic flow and the large volume of vehicles valet parked within a short time period. If
Vernissage was discounted from consideration, then all tested valet parked vehicles were
returned to their owners within the Parking Department's twenty minute stated/desired goal.
Recommendation( s)
Since it is unlikely that Vernissage will be moved to a different time, the contractor should
consider different practices to try and improve its turnaround times. One approach is to
employ more runners on Wednesday evenings. Another might be to try and coordinate with
runners the parking of one vehicle in a particular lot with the corresponding return of another
from the same lot to help reduce transit time. A third option is to limit parking at the
Convention Center's north loading dock to the contractor as this lot is the closest to the pick-
up area and should help the runners avoid much of the congestion of vehicles heading north
on Convention Center Drive trying to reach the event.
Contractor's Response
First Class concurs with the auditor's observations with regard to delays experienced on
12/3/08 by valet patrons. However, much of the delays born of the overlapping events are
beyond the control of the contractor. Unlike the typical operational condition, the Vernissage
event has set times for the event start and conclusion. As such,approximately 600 of the
750 cars serviced during the event arrive and depart within a 90 minute window both at the
event start and conclusion. Timely delivery of the vehicles is also further complicated by
external operating conditions which include: area traffic, limited valet parking inventory
proximate to the convention center, patron load-in/load-out delays, and existing vehicle
delivery policies required by ti-e Parking Department
To minimize delivery delays, First Class currently coordinates receipt and parking of one
vehicle with the removal and delivery of a corresponding vehicle to reducetransit time. In
advance of the 2009 event, we will make best efforts to work with Parking Department staff
and Police Department staff to improve traffic management on-site and in the surrounding
area. First Class will also explore alternative staffing options with the Parking Department to
achieve 100% compliance with the vehicle delivery standard.
With regard to expanded use of the Convention Center's north loading dock, First Class
believes that the lots existing physical condition may limit its expanded use as recommended
by the auditor. First Class will discuss its concerns with respect to this recommendation
with Parking Department staff and explore solutions that may mitigate those concerns,
allowing for the north loading dock's expanded use.
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Internal Audit Report
Valet Parking Operational Audit-Art Basel 2008
May 15, 2009
EXIT CONFERENCE
Preliminary report findings were presented to First Class Parking's management for solicitation of
response. The contractor's management responses were received on March 6, 2009 and were
added to this audit report. The Parking Department reviewed the contractor's responses and added
their response subsequent to that date. All were in agreement with the contents of this report. The
Parking Department will utilize this report in the planning for the next Art Basel event. Findings will
be addressed with the parking contractor to ensure that correcti-.e action is in place.
JJS:MC:mc
Audit performed by Mark Coolidge and Fidel Miranda
F:\obpi\$AUD\INTERNAL AUDIT FILESDOCOS-09\REPORTS-FINAL\VALET PARKING-ART BASEL 2008.doc
cc: Tim Hemstreet, Assistant City Manager
Saul Frances, Parking Department Director
Charles Adams, Assistant Parking Director
Max Sklar, Cultural Arts & Tourism Development Director
Jorge Zuluaga, Gold Star, Inc.
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