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HomeMy WebLinkAbout2004-25767 Reso RESOLUTION NO. 2004-25767 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING, IN SUBSTANTIAL FORM, THE AGREEMENT BETWEEN THE GREATER MIAMI CONVENTION AND VISITOR'S BUREAU (GMCVB) AND THE CITY OF MIAMI BEACH, FOR A FIVE (5) YEAR TERM, COMMENCING RETROACTIVELY ON OCTOBER 1, 2004 AND ENDING ON SEPTEMBER 30, 2009; FURTHER AUTHORIZING THE CITY MANAGER'S OFFICE TO CONCLUDE NEGOTIATIONS WITH THE GMCVB AS TO THE REMAINING POINTS IN THE AGREEMENT ATTACHED TO THIS RESOLUTION; PROVIDING THAT THE FINAL NEGOTIATED AGREEMENT SHALL BE SUBJECT TO THE FINAL REVIEW AND APPROVAL OF THE CITY MANAGER AND CITY ATTORNEY'S OFFICE, AND THAT ANY SUBSTANTIVE CHANGES SHALL BE BROUGHT BACK TO THE MAYOR AND CITY COMMISSION; AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE FINAL NEGOTIATED AGREEMENT. WHEREAS, on May 22,2002, the Mayor and City Commission adopted Resolution No. 2002-24854, authorizing the renewal of the Agreement between the City of Miami Beach and the Greater Miami Convention and Visitors Bureau (the "Bureau" and/or "GMCVB"), conditioned upon the issuance of a Request for Proposals (RFP) to review and assess the current Bureau governance, structure, processes and overall operations, and make recommendations as to what model and/or structure should provide the services to achieve optimal sales, marketing, and public relations efforts to enhance the City's Tourism and Convention Industries; and WHEREAS, on November 13, 2002 the Mayor and City Commission adopted Resolution No. 2002-25072, and authorized a contract with Economics Research Associates (ERA) to: . Review and assess the Bureau governance, structure, processes and overall operations; . Make recommendations as to what type of model/structure should exist to enhance the City of Miami Beach's tourism and convention industries; . Compare and provide a comprehensive report on Bureau operations relative to industry standards; . Evaluate and recommend strategic approaches for the City to meet objectives identified in the Market Assessment; . Assess any adverse/positive impact as a result of the Bureau's efforts to market Greater Miami versus Miami Beach only; and WHEREAS, on January 14, 2004, the City Commission referred discussion regarding the ERA study to the Finance and Citywide Projects Committee; and WHEREAS, on March 15, 2004, the Finance & Citywide Projects Committee discussed the City's review assessment and recommended structure of the GMCVB conducted by ERA; and WHEREAS, the Committee instructed the Administration to review and analyze the GMCVB's latest contract to rate how it has fulfilled its obligations and compare the ERA report, in conjunction with Miami-Dade County's findings and the GMCVB's strategic plan; and WHEREAS, on July 28,2004, the GMCVB's'Strategic Plan was submitted to the Mayor and City Commission for their review and as required pursuant to the current contract; and WHEREAS, based on the various findings and recommendations contained in the reports and studies conducted by the City, the GMCVB and the County, over the past year, recommend the Bureau model; and WHEREAS, a summary of the GMCVB's contract performance and a summary of a City-initiated survey conducted of Miami Beach hoteliers and stakeholders vis-a-vis the GMCVB has also been reviewed; and WHEREAS, the Bureau presented a financial analysis outlining funding requiremfts over the term of the proposed contract (i.e. 5 years) to maintain the current level of se ices provided and implementation of some of the identified strategic initiatives; and WHEREAS, it is recommended that the Mayor and City Commission approve the attached Agreement, in the attached substantial form, subject to final negotiations with the GMCVB; the final Agreement should be subject to further review and approval by the City Manager and City Attorney's Office, and any unresolved substantive changes shall be brought back to the Mayor and City Commissioner for their consideration. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission of the City of Miami Beach, Florida, approve, in substantial form, the attached Agreement between the Greater Miami Convention and Visitor's Bureau (GMCVB) and the City of Miami Beach, for a five (5) year term, commencing retroactively on October 1 , 2004 and ending on September 30, 2009; further authorizing the City Manager's Office to conclude negotiations with the GMCVB as to the remaining points in the Agreement attached to this Resolution; provided that the final negotiated Agreement shall be subject to the final review and approval of the City Manager and City Attorney's Office, and that any substantive changes shall be brought back to the Mayor and City Commission; and authorizing the Mayor and City Clerk to execute the final negotiated Agreement. (U~ CITY CLERK PASSED and ADOPTED this ~ day of December, 2 JMG/CMC/rar T:\AGENDA\2004\Dec0804\Regular\GMCVB.RES.doc APPROVED AS TO FORM & LANGUAGI & FOR EXECUTION '/~ CITY OF MIAMI BEACH COMMISSION ITEM SUMMARY m Condensed Title: A Resolution approving, in substantial form, the Agreement between the Greater Miami Convention and Visitor's Bureau (GMCVB) and the City of Miami Beach, for a five (5) year term, commencing retroactively on October 1, 2004 and ending on September 30, 2009; further authorizing the City Manager's Office to conclude negotiations with the GMCVB as to the remaining points in the Agreement attached to this Resolution; providing that the final negotiated Agreement shall be subject to the final review and approval of the City Manager and City Attorney's Office, and that any substantive changes shall be brought back to the Ma or and Cit Commission; and authorizin the Ma or and Cit Clerk to execute the final A reement. Issue: Shall the City Commission approve and authorize the execution of the Agreement? Item Summary/Recommendation: As discussed on September 1, 2004 and November 23, 2004, the parties have been negotiating in accordance with the parameters provided by the Finance and Citywide Capital Projects Committee. On September 13 and 27, 2004 and November 18, 2004, the parties met to further discuss these parameters. The Bureau presented a financial analysis outlining funding requirements over the term of the proposed contract (i.e. 5 years) to maintain the current level of services provided a~d implementation of some of the identified strategic initiatives. On November 23, 2004, The Finance and Citywide Projects Committee directed the Administration to tie the contract remuneration to the Bureau's performance. If the City Commission concurs with this directive, then the Administration would recommend the CPI adjustment to the annual $5 million contribution be contingent upon achievement of mutually agreed upon performance measures. With the exception of this aforementioned clause, the parties reached agreement on the following terms, which are included in the attached contract. Financial Information: Source of Funds: Approved D Finance Dept. islative Trackin T:\AGENDA\2004\DecOB04\Regular\GMCVB.SUM.doc AGENDA ITEM DATE R1L /2.-"6-oy CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 www.miamibeachfl.gov To: From: Subject: ANALYSIS COMMISSION MEMORANDUM Mayor David Dermer and Members of the City Commission Jorge M. Gonzalez ~WL- City Manager Date: December 8, 2004 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING, IN SUBSTANTIAL FORM, THE AGREEMENT BETWEEN THE GREATER MIAMI CONVENTION AND VISITOR'S BUREAU (GMCVB) AND THE CITY OF MIAMI BEACH, FOR A FIVE (5) YEAR TERM, COMMENCING RETROACTIVELY ON OCTOBER 1, 2004 AND ENDING ON SEPTEMBER 30, 2009; FURTHER AUTHORIZING THE CITY MANAGER'S OFFICE TO CONCLUDE NEGOTIATIONS WITH THE GMCVB AS TO THE REMAINING POINTS IN THE AGREEMENT ATTACHED TO THIS RESOLUTION; PROVIDING THAT THE FINAL NEGOTIATED AGREEMENT SHALL BE SUBJECT TO THE FINAL REVIEW AND APPROVAL OF THE CITY MANAGER AND CITY ATTORNEY'S OFFICE, AND THAT ANY SUBSTANTIVE CHANGES SHALL BE BROUGHT BACK TO THE MAYOR AND CITY COMMISSION; AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE FINAL NEGOTIATED AGREEMENT. On May 22, 2002, the Mayor and City Commission adopted Resolution No. 2002-24854, authorizing the renewal of the Agreement between the City of Miami Beach and the Greater Miami Convention and Visitors Bureau (the "Bureau") conditioned upon the issuance of a Request for Proposals (RFP) to review and assess the current Bureau governance, structure, processes and overall operations, and make recommendations as to what model and/or structure should provide the services to achieve optimal sales, marketing, and public relations efforts to enhance the City's Tourism and Convention Industries. On July 31, 2002, the Mayor and City Commission discussed whether the City of Miami Beach should participate with Miami-Dade County and the City of Miami in a collaborative study and evaluation of the Bureau, and elected to conduct its own study. On November 13, 2002 the Mayor and City Commission adopted Resolution No. 2002- 25072 and authorized a contract with ERA to: . Review and assess the Bureau governance, structure, processes and overall operations; . Make recommendations as to what type of model/structure should exist to enhance the City of Miami Beach's tourism and convention industries; . Compare and provide a comprehensive report on Bureau operations relative to December 8, 2004 City Commission Memorandum GMCVB Contract Negotiations Page 2 of 6 industry standards; . Evaluate and recommend strategic approaches for the CMB to meet objectives identified in the Market Assessment; and . Assess any adverse/positive impact as a result of the Bureau's efforts to market Greater Miami versus Miami Beach only. On January 14, 2004 the City Commission referred discussion regarding the ERA study to Finance and Citywide Projects Committee. On March 15, 2004, the Finance & Citywide Projects Committee discussed the City's review assessment and recommended structure of the GMCVB conducted by ERA. The Committee instructed the Administration to review and analyze the GMCVB's latest contract to rate how they have fulfilled their obligations and compare the City's consultant report in conjunction with Miami-Dade County's and the GMCVB's strategic plan. On July 28, 2004, the GMCVB's Strategic Plan was submitted to the Mayor and City Commission for their review and as required pursuant to the current contract. Outlined below is a summary of the ERA Report and the GMCVB Strategic Plan which serves to consolidate the various findings and recommendations contained in the reports and studies conducted by the City, the GMCVB and the County, over the past year. Additionally, a summary of the GMCVB's contract performance and a summary of a City initiated survey conducted of Miami Beach Hoteliers and stakeholders vis-a-vis the GMCVB is also provided. Collectively, this information should be utilized to provide guidance relative to ongoing contract negotiations. ERA Studv As stated above, ERA performed an analysis of the GMCVB for the City of Miami Beach. In summary, ERA's findings reflect the following: Issue: Review and assess the Bureau governance, structure, processes and overall operations Finding: GMCVB is performing professionally and effectively however, some immediate improvements are needed, namely improving the quality of the relationship between the Bureau and the City, completing the strategic plan and strengthening the governance of the Bureau. Issue: Make recommendations as to what type of model/structure should exist to enhance the City of Miami Beach's tourism and convention industries Finding: The GMCVB is the appropriate model/structure however there is room for improvement. Issue: Compare and provide a comprehensive report on Bureau operations relative to industry standards. Finding: Benchmarking the GMCVB against seven peer bureaus found operations in Miami to be comparable to those in other major tourist destination metropolitan areas. December 8, 2004 City Commission Memorandum GMCVB Contract Negotiations Page 3 of 6 Issue: Evaluate and recommend strategic approaches for the CMB to meet objectives identified in the Market Assessment. Finding: The Strategic Plan should address targeting and positioning. The CMB can gain the most leverage on the invested effort by working through the regional bureau and yet maintain a local capability for ongoing tourism product development and community relations. Issue: Assess any adverse/positive impact as a result of the Bureau's efforts to market Greater Miami versus Miami Beach only. Finding: An attempt on the part of the CMB to "go it alone" independent of the GMCVB would have an adverse impact on Miami Beach. It is in the best interest of the CMB to continue to participate in the regional marketing structure provided by the GMCVB, but retain responsibility for some local tourism programs as well. Strateqic Plan As required pursuant to the existing contract between the City of Miami Beach and the Greater Miami Convention and Visitor's Bureau (GMCVB) and serving as a consolidating document of the City of Miami Beach's Economic Research Associates (ERA) study, the Miami-Dade performance review and evaluation prepared by CSLlMarshall Murdaugh, research finding/recommendations by Ernst & Young, the attached Strategic Plan and Stated Goals is submitted as the GMCVB's future strategic work plan. The Strategic Plan was approved by the GMCVB Board and Executive Committee on July 21, 2004 and serves to consolidate the various findings and recommendations contained in each of the aforementioned studies/reports. In summary, the Strategic Plan incorporates the findings and recommendations of the independent studies performed and the recommended priorities adopted by the GMCVB Board. The plan sets forth the GMCVB Shared Vision for the destination which is to be America's Premier Tropical, Cosmopolitan Destination and it lists 5 specific goals as follows: . Enhance the Destination's Tourism and Related Infrastructure and Continue to Develop and Expand Attraction Assets . Enhance the Visitor Experience . Optimize Sales and Marketing Activities Resulting in Maximum Performance and Results . Position the GMCVB as "True Stewards" and "Voice" of the Visitor Industry . Establish Measurement Criteria for Each Element of the Strategic Plan (both for the GMCVB and the Community) including Clearly defined Leadership Roles, Time- Lines and Funding Requirements. As the Strategic Plan is prepared in fulfillment of a contract requirement, future performance will be tied to the deliverables and performance measures contained therein. GMCVB Performance The Administration and GMCVB staff have reviewed the contract terms specified in the Amended Agreement between the City of Miami Beach and the Greater Miami Convention December 8, 2004 City Commission Memorandum GMCVB Contract Negotiations Page 4 of6 and Visitors Bureau (GMCVB). Attached hereto and pursuant to my request, the GMCVB has prepared a Contract Performance Analysis for the contract period of October 1 , 2002 through September 30, 2004 (to date) with regard to the key elements included in the contract. The analysis indicates that the GMCVB complied with all contract terms, including but not limited to, the Advertising RFQ requirements and maintaining Miami Beach's representation on the GMCVB Boards and Committees at 40% of the total. Additionally, a summary of the deliverables relative to the sub-market initiatives is included. A further review of the GMCVB performance in the area of Convention Sales and Marketing has been requested. Specifically, performance in the area of bookings, estimated economic impact and the resultant return on investment as well as a comparative visitor profile depicting growth in overnight visitors and in shoulder season occupancy will be provided. I would rate the GMCVB's performance over the contract period to be generally positive. As in past years, we struggle with determining the direct and indirect outcome of their efforts but there is no doubt that tourism (in its broadest definition) in Miami Beach has prospered over the past two (2) years. Resort tax collection, average daily room rates and occupancy rates all indicate strong performance for the industry. While not completely or directly a function of the GMCVB's efforts, these indicators are influenced by their activities. A key indicator, however, is our focus on the summer festival season and the GMCVB has made and continues to make significant efforts to improve tourism during this period. Indications are that we have made great strides as a destination in generating business during the summer months. While generally the industry and the destination has performed well during the past two (2) years, there are certain initiatives which I believe the GMCVB could have and should have been handled in a better manner. The issue of the office relocation is one example. It is my beliefthatthis review was mishandled by the GMCVB leading to a greater strain on the relationships between the GMCVB and the City. While I am disappointed in the outcome, I am more troubled with the process. A decision of that significance should not have been considered and voted on by the Board in such a rushed manner with little or no sensitivity to the concerns of certain Miami Beach partners. Another example is the entire Strategic Planning Process. While I am pleased with the final product, it should be noted that the plan was adopted by the GMCVB in July 2004, nearly one year later than its contractual deadline, and after significant input and modification from the City of Miami Beach. Stakeholder Survey As part of the City's review of the GMCVB's performance, in addition to the evaluation of their performance, the Administration solicited input from a variety of sources. This input included, but was not limited to, distributing a questionnaire to the following organizations: Miami Beach Hoteliers Stu Blumberg, Chair, Greater Miami and Beaches Hotel Association Grace Calvani, Latin Chamber of Commerce Elsie Howard, Chair, Visitors and Convention Authority December 8, 2004 City Commission Memorandum GMCVB Contract Negotiations Page 5 of 6 David Kelsey, South Beach Hotel & Restaurant Association Ulliam Lopez, South Beach Hispanic Chamber Michael Milberg/Bruce Singer, Miami Beach Chamber of Commerce Steve Polisar, Chair, Nightlife Industry Task Force Doug Tober, General Manager, SMG, Miami Beach Convention Center Ada L1erandi, Chair, Cultural Arts Council The questionnaire sought input as to the GMCVB's performance, strengths, weaknesses, effectiveness in promoting tourist services, key tourism industry needs, recommended future initiatives or enhancements and rating on member services. Consistent themes in the survey included the GMCVB's ability to quickly respond to situations, leverage resources and partnerships and its increased representation of Miami Beach businesses. Areas for future focus include strengthening the small and boutique hotel program, increased marketing off-season, improving the image of destination, and continuing to improve convention center bookings. While some respondents rated member services excellent, some expressed the desire for better outreach and a greater Miami Beach presence by the GMCVB. CONCLUSION: As discussed on September 1, 2004 and November 23, 2004, the parties have been negotiating in accordance with the parameters provided by the Finance and Citywide Capital Projects Committee. On September 13 and 27, 2004 and November 18, 2004, the parties met to further discuss these parameters. The Bureau presented a financial analysis outlining funding requirements over the term ofthe proposed contract (i.e. 5 years) to maintain the current level of services provided and implementation of some of the identified strategic initiatives. The Bureau also identified the need for incremental funding of $7.1 million to implement additional identified strategic initiatives in the areas of convention sales and marketing and tourism that are not currently part of the work plan. On November 23, 2004, The Finance and Citywide Projects Committee directed the Administration to tie the contract remuneration to the Bureau's performance. If the City Commission concurs with this directive, then the Administration would recommend the CPI adjustment to the annual $5 million contribution be contingent upon achievement of mutually agreed upon performance measures with the exception of this aforementioned clause, the parties reached agreement on the following terms, which are included in the attached contract: Term: 5 years, termination for convenience with 60 day notice. Funding: $5 million base; commencing in the 2nd year of the contract, the base will be adjusted annually by the lesser of CPI-U or 3%, subject to Bureau's achievement of the agreed upon performance measures (pending concurrence from GMCVB); December 8, 2004 City Commission Memorandum GMCVB Contract Negotiations Page 6 of 6 - GMCVB to provide funding for the CAC as follows: Year 1 - $200,000 Year 2 - $100,000 Year 3 -5 $ 50,000, annually; and - City allocation as Submarket Initiatives funded at $950,000 annually, within the base. - $20,000 annually for scholarship fund (not included in negotiated terms and conditions); Performance Measures Mandatory reporting benchmarks established in contract. Governance Structure New governance plan to be implemented by end of the first contract year (September 30, 2005). Incentive: Referenced above in the CPI clause; Bureau may contract for additional services, approved at sole discretion of the City, to be funded by City Resort Tax Contingency for Resort Tax related initiatives. Watson Island Fund: Estimated at $1,000,000 to be disbursed as follows: 2/3rd portion to be redirected to the Bureau's Business Recovery Fund, amortized over 5 year period, and the remaining 1/3rd portion to be reimbursed to City upon execution of agreement, to be reserved for use by the City for initiatives consistent with the purpose of the Agreement. Based on the foregoing, it is recommended that the Mayor and City Commission adopt the attached resolution and authorize execution of a new five (5) year contract between the GMCVB and the City of Miami Beach; further authorizing the City Manager's office to conclude negotiations with the GMCVB as to the remaining points in the agreement attached to this resolution; providing that the final negotiated agreement shall be subject to the final review and approval of the City Manager and City Attorney's office, and that any substantive changes shall be brought back to the Mayor and City Commission; and authorizing the Mayor and City Clerk to execute the final negotiated agreement. JMG~/rar T:\A.GENDA\2004\Oec0804\Regular\GMCVB.MEM.doc