C6B-Report- Finance And Citywide Projects Committee Meeting On January 19 2012(9 MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMITIEE MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: City Manager Jorge M. Gonzalez
DATE: March 21,2012
SUBJECT: REPORT OF THE FINANCE
MEETING OF January 19, 2012.
OLD BUSINESS
1. Follow up: Report on the number of Business Tax Receipts (BTRs)
outstanding
ACTION
The Committee requested quarterly updates be given via Letter to Commission
{LTC).
Georgina Echert, Assistant Director of the Finance Department, presented the item. The
City began sending out the Fiscal Year (FY) 2012 renewal notices in early July of 2011.
As of January 13, 2012, the following is a summarry on the status FY 2012 BTR
renewals:
• 7,801 renewal notices were mailed out;
• 1 ,624 renewal notices remain unpaid; and
• 1 ,879 renewals have been paid, but remain in pending status.
A list of business entities that have not renewed their BTR has been sent to Code
Compliance for follow-up action. Ms. Echert also stated that a follow up notice has been
sent to remind businesses that have not renewed their BTR. Commissioner Jerry libbin
asked how this compares to previous years. Ms. Echert stated that the compliance level
was approximately 65-70% last year, as compared to 80% this year. The Committee
requested quarterly updates be given via letter to Commission (l TC).
2. Discussion regarding amendments to the Recycling Ordinance
ACTION
Item Deferred
3. Discussion regarding towing permits
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· Agenda Item C.t; _8
Date 3~/-JL
ACTION
The Committee recommended that:
• the auditing and inspection provisions resemble the provisions in the
Boucher Brothers contract
• option 1 for resident discounts be put into the contract
• review the towing software and in-vehicle camera enhancements in one
year
• Administration continue to negotiate with the Permittees regarding the
number of hours a vehicle is stored at no charge to the customer
• the item be brought to the full Commission
The Committee asked that the Permittees explain why credit cards and personal
checks are not accepted when the item is brought to the full Commission and that
a discussion regarding the City's towing policy be had.
Assistant City Manager Jorge Gomez presented and gave a brief history of the item.
The Committee discussed the auditing and inspection provisions for the towing
permittees. Commissioner Jorge Exposito asked if the City has the legal ability, other
than what is granted to the City by contract, to determine the profitability of a company or
the ability to set a standard of profit. Chief Deputy City Attorney Raul Aguila stated that
the City did not have the ability to determine profitability. Discussion ensued. The
Committee recommended that auditing and inspection provisions resemble the
provisions in the Boucher Brothers contract and that option 1 for resident discounts be
implemented. The Committee discussed the requirements for retrieving a towed vehicle.
Chairperson Deede Weithorn suggested that a revision provision be included in the
contract to ensure that the permittees are making progress in regards to implementing
the enhancements required by the contract. Ralph Andrade asked why GPS tracking
devices were being required. Parking Director Saul Frances stated that the tracking
would be used for vehicles that are providing city services and the tracking software will
address issues with accountability and show the proximity of the tow truck to vehicle
which is to be towed. Mr. Frances also added that city vehicles are equipped with GPS
tracking devices. Commissioner Jerry Libbin stated that he was not in favor of moving
forward with the renewal of towing permits before an audit was performed. Ralph
Andrade, attorney for Beach Towing, gave a power point presentation regarding
increasing the towing rates. City Manager Jorge Gonzalez asked Mr. Andrade of the
jurisdictions shown as comparables, how many, if any, have towing as a regulated
industry with a limited number of operators. Mr. Andrade stated that he was unsure if
any were regulated like the City is. Mr. Gonzalez stated that the way industry was
regulated would affect the pricing, more towing companies would yield more competitive
rates. Chairperson Weithorn opened the floor to public comment which included
suggestions on revising the towing bill of rights to better protect the vehicle owner,
raising fees not by a percentage but rather a flat fee, and support for auditing provisions.
The Committee asked that the Permittees explain why credit cards and personal checks
are not accepted when the item is brought to the full Commission. The Committee
recommended that:
• the auditing and inspection provisions resemble the provisions in the Boucher
Brothers contract
• option 1 for resident discounts be put into the contract
• review the towing software and in-vehicle camera enhancements in one year
• Administration continue to negotiate with the Permittees regarding the number of
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hours a vehicle is stored at no charge to the customer
• the item be brought to the full Commission
4. Discussion of a proposed modification of the Promissory Note dated
February 5, 2007, between MBCDC: Meridian Place, LLC, a Florida Limited
Liability Corporation, to the Miami Beach Redevelopment Agency; and to
discuss a subordination of the City's mortgages in favor of a mortgage
made by a commercial lending institution
ACTION
The Committee recommended that the item be brought to the full Commission and
that the funding chart be included as part of the memo.
Real Estate, Housing, and Community Development Director Anna Parekh presented
the item.
A modification of the repayment terms in the Promissory Note dated February 5, 2007,
between MBCDC: Meridian Place, LLC, to the Miami Beach Redevelopment Agency
was requested in order to facilitate the completion of Meridian Place, as well as to
prevent jeopardizing $6,415,085 of additional public funds which have been awarded to
this affordable housing project for formerly homeless elderly people. The repayment
terms in the Promissory Note are not feasible because this affordable housing project
cannot produce sufficient cash flow to cover annual principal payments in the amount of
$150,000 to the RDA. The project rehabilitation is 70% complete, and therefore had no
rental revenue cashflow to make the first $150,000 annual loan payment which was due
in December 2011. Subsequent annual payments are due every December for the next
nine years. In the event the RDA Promissory Note debt service is not modified, the
project cannot be completed and the other existing funding sources are in jeopardy.
Each of the other funding sources entered into various governing documents with
MBCDC and its predecessor to secure the use of funds and project execution. While all
the documents were prepared independently by each lender, all the loan documents
share common covenants which require the delivery of a completed affordable housing
project. Assistant City Manager Hilda Fernandez noted that neither the $2,864,642 of
the City's HUD HOME and CDBG funds or the $1,379,395 of Miami-Dade County's
Documentary Stamp Surtax Funds require repayment as long as the building is kept
affordable even at the end of the affordability period. The Administration recommended
that the RDA loan repayment terms be restructured to be consistent with other
affordable housing grants (loans) from the City which defer the repayment of the funding
as long as the project is kept "affordable" in accordance with HUD guidelines. This
project's "affordability period" is currently thirty (30) years, commencing at the issuance
of the Final Certificate of Completion. It was also recommended that at the expiration of
the 30-year affordability period, that the City may be given the option to either call in the
note, extend the affordability period (e.g. another thirty years), or otherwise modify the
note. The Committee recommended that the item be brought to the full Commission and
that the funding chart be included as part of the memo.
REPORTS
5. Report on the status of FY 2010/11 potential new revenue initiatives
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ACTION
None Required
The Committee did not discuss the item.
NEW BUSINESS
6. Request for approval to issue a Request for Qualifications (RFQ) for a
fourth solid waste franchise contractor to provide commercial waste
collections and disposal services
ACTION
The Committee recommended that this item and the item regarding the Recycling
Ordinance be brought back to the March 1, 2011 Finance & Citywide Projects
Committee Meeting.
Public Works Director Fred Beckmann presented the item.
At the Finance and Citywide Projects Committee Meeting of January 26, 2010, the
Committee recommended that the City pursue the option of maintaining four (4)
franchise haulers and to accept the services package presented combined with a five (5)
year term. The Committee also recommended that a minimum of four (4) haulers be
retained and in the event the number falls below four, the matter be brought to the
attention of the City Commission. There are presently three waste collection and
disposal services franchisees in the City of Miami Beach: Waste Management of Dade
County; Waste Services, Inc.; and Choice Environmental Services of Miami. In 2011, a
previous fourth franchisee, General Hauling Services, Inc. was purchased by Waste
Services. The current waste collection and disposal services franchisees have
petitioned the City to maintain at three the number of haulers providing services within
the City. It was recommended that the fourth hauler negotiations could provide the
opportunity for the three remaining haulers to proffer additional resources for the
educational and enforcement requirements of the new recycling ordinance. However,
the re-written ordinance significantly reduces the resource requirements for enforcement
and therefore does not present the same opportunities. The haulers have requested
that -in exchange for agreeing to increase their current contribution to fund green
initiatives form 1.5% to 2% (representing an annual revenue increase of approximately
$1 00,000), and double their annual cash allocation for the purchase of recycling
containers from (15) containers valued at approximately $18,000 to (30) containers
valued at approximately $36,000, or current market value-they would like to keep only
three haulers and exercise the three (3) year renewal option currently at the City's
discretion in September 2014. Chairperson Deede Weithorn stated that she would like
to delay discussing this item so that it could be discussed in conjunction with the item
regarding the Recycling Ordinance. Mr. Beckmann stated that the proposed recycling
ordinance is ready aside from the few details that needed to be confirmed with the
County. Commissioner Jerry Libbin was also in favor of deferring the discussion.
Commissioner Jonah Wolfson and Commissioner Jorge Exposito were in favor of
issuing the RFQ. Discussion ensued. Public comment included support for both issuing
the RFQ and support for keeping the number of waste haulers at three. The Committee
recommended that this item and the item regarding the Recycling Ordinance be brought
back to the March 1, 2011 Finance & Citywide Projects Committee Meeting.
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7. Discussion concerning City Fees and Charges for Gay Pride 2012
ACTION
Item Deferred
8. Discussion pertaining to the issuance of a Request for Proposals (RFP) for
auditing services for the City's (CAFR), (OMB A-133 Single Audit), The
Miami Beach Redevelopment Agency's basic financial statements (RDA),
... (PSF), (VCA) financial statements, The Miami Beach Convention Center,
as managed by Global Spectrum, financial statements, The Children's Trust
Program, The Building Better Communities Bonds Program, and The Safe
Neighborhood Parks and Bond Program (SNP)
ACTION
The Committee recommended moving forward with the issuance of a Request for
Proposals (RFP) for auditing services.
Georgina Echert, Assistant Director of the Finance Department, presented the item. The
current auditors, McGiadrey and Pullen were selected in Request for Proposals (RFP)
No. 23-05/06 and approved under Commission Resolution 2006-26247 to provide
auditing services for a period of five (5) years with the sole option and discretion of the
City to renew for five(5) additional one (1) year periods. The Committee recommended
moving forward with the issuance of a Request for Proposals (RFP) for auditing
services.
9. Discussion regarding property assessed clean energy (PACE) program
ACTION
Item Deferred
10. Discussion pertaining to a retail lease agreement between the City and
South Florida Salon Group, Inc., for use of approximately 1 ,327 square feet
of City-owned property located at 1701 Meridian Avenue, Unit 1 (A/KIA 765
17TH Street), Miami Beach, Florida
ACTION
The Committee recommended that the item be brought to the Commission with
the best deal.
Assistant City Manager Hilda Fernandez presented the item. On November 16, 2011,
Koniver Stern Group, the City's contracted real estate broker, presented the City with a
Letter of Intent (LOI) on behalf of the South Florida Salon Group, Inc., (SFSG) for use of
approximately 1 ,327 square feet of City-owned space located at 1701 Meridian Avenue,
Unit1. The New York-based investment group which is behind SFSG is proposing to
introduce a relatively new and exciting concept taking hold in many retail markets
throughout California, New York, Arizona, Texas, Atlanta and Miami in the form of a
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blow-dry hair salon. As the name implies, the facility would offer an attractively
affordable fixed-price menu of blow-dry hair styling options as well as manicuring
services. In addition to SFSG, the City received inquiries about the availability of the
space from the current adjacent tenant, operating as Massage Envy. This existing
tenant wished to expand their current space as well as introduce certain services not
currently included in their franchise agreement, which formed the basis of the lease for
their current space. Further, the initial terms proposed were deemed not favorable to the
City, while the prospective tenant submitted terms more favorable for the City's
consideration. While the adjacent tenant has remained interested in the vacant retail
space, and has since offered comparable terms, the City's broker advised staff that
securing a diverse tenant mix would protect the City further, as compared to leasing out
this space to the adjacent tenant and having one tenant control two of four retail spaces.
SFSG is offering to pay $46 per square foot for the space. Based on current market
conditions, the proposed rent is comparable and competitive. Lyle Stern of Koniver
Stern Group stated that Massage Envy had very recently made an offer which exceeded
the current $46 per square foot and suggested that more information be gathered before
a final recommendation is made. The Committee recommended that the item be
brought to the Commission with the best deal.
11. Discussion pertaining to a retail lease agreement with Groove Man
Entertainment, Inc. involving Suites 1 through 4 in the Anchor Shops,
located at 1550 Collins Avenue, Miami Beach, Florida
ACTION
The Committee recommended moving forward and bringing the item to the full
Commission.
Assistant City Manager Hilda Fernandez presented the item and gave a brief synopsis of
the memo.
On January 11, 2012, Koniver Stern Group, the City's contracted real estate broker,
presented the City with a Letter of Intent (LOI) on behalf of Groove Man Entertainment,
Inc., (Grooveman Music) for Suites 1 through 4 in the Anchor Shops. Grooveman Music
was founded by DJ/Producer George Acosta in the late 90's and has been doing
business on Miami Beach from their current location at 1543 Washington Avenue since
2002, selling DJ-related products, clothing and accessories, vinyls and CDs and
advance ticketing to music events anywhere in the world. Grooveman is interested in
moving its business to the Anchor Shops, which will not only allow them to expand their
business, but also allow them to develop higher-end boutique market with new products
and designers. Given current market conditions, the subject 2,884 square foot space
has been challenging to fill and has been vacant since December 2010. Grooveman
Music has proffered an offer of $31 per square foot, plus tax, to lease the space for an
initial term of five (5) years plus a renewal term of four (4) years and 364 days at the
City's option. The Committee recommended moving forward and bringing the item to
the full Commission.
12.Discussion regarding PAL's refusal to hand over Public Records
ACTION
The Committee recommended that should the PAL not comply with the public
records request to the satisfaction of the City Attorney's Office, a public hearing
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be scheduled to discuss what measures should be taken including termination of
funding.
City Attorney Jose Smith presented the item and went on to introduce Donald Papy,
Chief Deputy City Attorney. Mr. Papy stated that he had spoken with the new counsel
for the Police Athletic League (PAL), Israel Reyes, regarding the status of the Miami
Herald's public records request to the PAL for records and that Mr. Reyes stated that
they were cooperating with the Miami Herald and have asked for some additional time
because he had recently become the new counsel for the PAL. Mr. Papy stated that Mr.
Reyes conveyed his intent to fully comply with the request. Chairperson Deede
Weithorn asked Mr. Papy if he asked what the time frame was for Mr. Reyes to turn the
records in. Mr. Papy stated that he did not ask but stated that Mr. Reyes had asked for
an additional 30 days to respond to the request. Steve "Bubba" Cohen, former PAL
board member, stated that his attorney had made the same request in 2009 of the PAL
and that it took almost two years for the records to be turned over. Mr. Cohen also
stated that the PAL was requested to respond to the 2005 City Audit but the PAL has
never responded to the audit. Mr. Cohen was also concerned that the Parks and
Recreation Department, the Boys and Girls Club and the PAL are all in Flamingo Park
and all competing for a small pool of children. Chairperson Weithorn stated that if the
PAL has not complied with the request by the time that the budget is being discussed,
their funding could be cut. Commissioner Jonah Wolfson stated that he would also
support not funding the PAL. The Committee recommended that should the PAL not
comply with the public records request to the satisfaction of the City Attorney's Office, a
public hearing be scheduled to discuss what measures should be taken including
termination of funding.
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