Concurrency Mitigation Fees(9 MI!AMIBEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
DATE:
Jorge M. Gonzalez, City Manager ~~
Kathie G. Brooks, Budget and P~rfor ance _Improvement Director ~
James J. Sutter, Internal Auditor '/J ~ "'P/,/UF
March 6, 2012 .
AUDIT: Concurrency Mitigation Fees
PERIOD: October 1, 2008 to September 30, 2010
This audit report is the result of a regularly scheduled audit of the Concurrency Mitigation Fees
collected and administered by the City.
INTRODUCTION
The Concurrency Management System was created in 1998 in order to comply with the Florida
Growth Management Act of 1985, which requires that public facilities and services needed to
support development be available concurrent with the impacts of developments. The
administrative process for monitoring development and changes in land use to ensure that
adequate facilities and services are in place or will be in place, is overseen and directed by the
Concurrency Management Division within the City's Planning Department.
Concurrency is a State-mandated system, to ensure that all development that increases the
demand for public facilities in the City can be served by adequate public facilities in accordance
with the levels of service which are established in the City's comprehensive plan. Applications
for development orders (building permits, certificates of occupancy and new licenses or
certificate of use) must be reviewed by the City to determine their demand for public facilities,
based upon the density and intensity of each proposed use. Credit is given for level of existing
development being replaced, and the net impact of the proposed new development is
calculated.
Concurrency applies to several aspects of infrastructure, including potable water, sanitary
sewer, solid waste and storm water management facilities, parks and recreational facilities, and
roads and transit facilities (Transportation). The City charges impact fees on new projects for
water and sewer, sanitation, and storm water. For transportation and parks and recreation, the
City imposes a concurrency (mitigation) fee for each.
Transportation concurrency mitigation fees are calculated for each project using industry
standards trip generator formulas, which assess various types of uses and predict vehicular
traffic based upon the density and intensity of the project. Credit is given for proximity to transit
routes, pedestrian pass-by traffic, and for mixed and shared uses. When a project is
determined to generate additional vehicle trips, and thus impact the roadway network, a
mitigation fee is charged, which is based upon the number of additional vehicle trips generated.
Parks and recreation concurrency mitigation fees are based upon number of persons added to
the project. The minimum level of service standard for each facility type shall be based on a
minimum number of units per population, permanent and seasonal by specific facility types.
We are committed to providing excellent public service and safely to all who live, work, and play in our vibrant, tropical, historic communily.
Internal Audit Report
Concurrency Mitigation Fees
March 6, 2012
These fees are assessed prior to the issuance of a building permit, or the approval of a new
business license. The mitigation fees for transportation are pooled into separate accounts for
North Beach, Middle Beach and South Beach. The funds are spent on transportation related
improvement projects contained within the City's Municipal Mobility Plan (MMP) created in
1999, such as roadway capacity, corridor enhancements and alternative transportation projects.
In addition, concurrency funds are used to provide funding for the South Beach Local Shuttle
Service. Mitigation fees for parks and recreation are used for improvements to City parks and
are in one citywide pool.
The applicant for a development project submits a Concurrency Determination Questionnaire,
which contains all the relevant information about the project. Concurrency staff utilizes the
computerized Concurrency Management System (CMS) to review and analyze the submitted
data. This result in a determination as to whether or not the proposed project would create a
demand to exceed the City's level of service standards, and if so, how much it will cost to
construct the necessary public service or facility improvements, to mitigate the negative impact.
Under Resolution No. 2000-2387 4, the Mayor and City Commission of the City of Miami Beach
approved and adopted administrative fees to be charged for the issuances of Individual
Concurrency Statements ranging from $125 to $335 in cost. The revenues are to be used for
the operation of the concurrency department for processing (calculating and invoicing) the fees,
and the maintenance and bi-annual update of the Concurrency Management System and
Municipal Mobility Plan.
Concurrency management and administrative fees recorded in the City's Eden general ledger
for the audit period were as follows:
Revenues FY 08/09 FY 09/10 Total
South Beach $ 784,760.91 $ 506,651.60 $ 1,291,412.51
Middle Beach 249,732.40 361,166.78 610,899.18
North Beach 31,563.49 94,010.08 125,573.57
Parks & Recreation 3,762.50 104,798.95 108,561.45
Administrative fees 20,305.00 16,040.00 36,345.00
Total $1,090,124.30 $1,082,667.41 $2,172,791.71
PURPOSE
The purpose of this audit is to determine whether events, transactions, adjustments, and
processing procedures relating to Concurrency Management Fees are established, authorized,
accounted for, economically and efficiently processed, accurately and promptly recorded,
reported, and followed up in accordance with the various ordinances and with departmental
policies and procedures.
OVERALL OPINION
Our review of Planning Department and Finance Department records revealed that Concurrency
Management fees, with regards to the revenues and expenditures in general were adequately
documented, correctly computed, and properly assessed in compliance with the City Code and
departmental policies and procedures. However, there are other areas that we believe need
improvement:
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Internal Audit Report
Concurrency Mitigation Fees
March 6, 2012
• Policies and Procedure need to be updated to delineate the day to day operations of the
division.
• The concurrency management division needs to establish a filing system where each
project has the following information attached (i.e. concurrency questionnaire,
Miscellaneous Cash Receipts and the Concurrency Calculation Sheet). The files can be
kept by the different geographical areas such as South Beach, Middle Beach and North
Beach.
• Reconciliation of the General Ledger accounts needs to take place on a monthly basis.
• Separate running balance for concurrency fees are not maintained for each category
North Beach, Middle Beach, South Beach and Parks in order to track how much funds
are available for any future projects.
• New operating procedures for the concurrency process have not been fully
implemented.
SCOPE
1. Confirm that the division has established operating policies and procedures for the
proper administration and processing of the concurrency management fee.
2. Confirm that Concurrency Fee billed and collected were adequately documented,
correctly computed, and properly assessed.
3. Confirm that all Concurrency Fee revenues were timely received, deposited and
correctly recorded by the Finance Department.
4. Confirm that expenditures from Concurrency Fee accounts were made for authorized
purposes, were pre-approved by the City Commission, and were correctly recorded in
the general ledger.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
1. Finding: Lack of formally documented policies and procedure.
The Planning Department utilizes numerous authoritative sources (such as City
Ordinances, Resolutions, City Commission letter) in order to accurately calculate the
Concurrency Fees, however it was noted that there are no Policies and Procedures as a
guide for day-to-day operations.
Recommendation
Detailed policies and procedures covering the day-to-day operations should be created
in order to serve as a guide to the use of the authoritative source mention above. This
will serve as a guide for any new person into the department as well as a good source
for current staff to refer to.
Management Response
The Department agrees with the finding and accepts the recommendation. Staff will
begin the preparation of new and updated written policies and procedures guides.
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Internal Audit Report
Concurrency Mitigation Fees
March 6, 2012
2. Finding: Records not properly kept.
The Planning Department does not keep the Concurrency Records for each applicant in
separate files or summarized in a spreadsheet. Out of the fifty-six (56) files selected,
five (5) did not have the Miscellaneous Cash Receipts stamp by the cashier attached to
the documents; even though the Planning Department was able to provide the MCR
number and we were able to trace to the correct general ledger account. In addition,
twenty-four (24) Concurrency questionnaires were not available at the time of the audit.
Recommendation
The Planning Department should establish a filing system where all the proper
documentation for each project is kept together. (i.e. the files could be divided by the
different areas such as South Beach, Middle Beach, and North Beach). If possible,
consideration should be given to automate this process by imaging records utilizing the
Building Department's records management I imaging system. It is also recommended
that when a project is cancelled, and the concurrency fee needs to be returned, an
explanation as to why the fee is being returned should be documented in the file. Files
that are abandoned or pending should be followed up on a monthly basis to ensure that
all files are closed at one point. It is also recommended that even though it is done in
some cases and not in others that the building permit number is written in the
concurrency fee calculation sheet.
Management Response
The Department agrees with the finding and accepts the recommendation. The
Department is currently participating in the finalizing of the contract with Accela to
implement the next generation permitting software system, Accela Automation, which is
robust enough to incorporate concurrency mitigation fee calculation and billing. While it
is hoped that this is the long term solution to the issue raised above, in the shorter term,
staff will begin implementing the recommendation to improve existing the filing system
for concurrency payments.
3. Finding: Reconciliation of Miscellaneous Cash Receipts (MCR) to General Ledger
accounts
The Planning Department does not reconcile the different General Ledgers accounts.
Miscellaneous Cash receipt (MCR) #24053 was written as voided, however we were
able to trace the MCR to the General Ledger account that was written on the MCR. If a
process of reconciliation of MCR to General Ledger was in place, then the voided MCR
would have been discovered in a timely manner.
Recommendation
The Planning Department needs to reconcile on a monthly basis the different General
Ledger accounts. By doing this any discrepancies would be found on a timely basis. In
addition, if there is any paper work missing, it will be easier to trace and include in the
file that it belongs.
Management Response
The Department agrees with the finding and accepts the recommendation. Staff is being
directed to reconcile the General Ledger accounts on a monthly basis.
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Internal Audit Report
Concurrency Mitigation Fees
March 6, 2012
4. Finding: Lack of running balances of concurrency funds for each separate TCMA
The concurrency mitigation fees are pooled into separate Transportation Concurrency
Management Areas (TCMA) accounts for North Beach, Middle Beach, and South Beach
categories. The funds are to be spent on transportation related improvement projects
contained within the City's Municipal Mobility Plan (MMP). Currently as fees are
collected, they are deposited into separate general ledger revenue accounts on the
City's Eden general ledger within the TCMA Mitigation Plan Endowment Fund (Fund
#158). Included in this Fund are deposits for concurrency fees for Parks. Expenditures
are tracked by project on the City's Eden general ledger by a department number
assigned for each project. At the end of each fiscal year, revenues and expenditures for
these categories are closed out through the control accounts leaving a combined total in
the equity section of the fund's statement. There is no separation of balances for each
TCMA area maintained. To arrive at this, one would have to extract all of the revenues
and projects by each fiscal year to arrive at an available balance. Unrestricted balances
(net assets) available in total for all categories the past two fiscal years amounts to as
follows:
Fiscal Year ended Amount
9/30/2009 $8,326,083
9/30/2010 $8,921,387
As a result, the amounts available in each area are not as easily determined as they
might be, and there is the risk that monies might be appropriated for future projects
without certitude that they are actually available.
Recommendation
A separate running balance should be maintained for each category North Beach,
Middle Beach, South Beach and Parks to track how much funds are available for any
future projects. This should include each appropriation and/or expenditures to determine
unspent funds for each area.
Management Response
Planning Department staff notes that the Public Works Department has in the past been
the Department responsible for expenditures from these funds, and that Department
should be able to provide balances.
Public Works Department has responded that they will complete an accounting for the
balances for these funds by each category by the end of April 2012.
5. Finding: Implementation of new procedures
In a Letter to Commission #114-2008, new operating procedures were outlined and
proposed for the Building Department and Planning Department. New operating
procedures for the concurrency process within the Planning Department included the
following:
a. Implement a two person system with a staff planner who handles the plan review
and customer interface and have a concurrency planner that handles solely
concurrency calculations without direct interaction with the customer.
b. Adjust the procedure for payment of fees by separating the payment of fees from
the concurrency planner and moving this responsibility to a separate staff
member.
c. Relocate concurrency management system (CMS) computer function to a
different department.
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Internal Audit Report
Concurrency Mitigation Fees
March 6, 2012
Procedures were reviewed with department personnel to arrive at the following status of
implementation:
a. This procedure has been partially implemented. Planners have been trained to
use a simplified excel spreadsheet which calculates the mitigation fees for most
of the projects. For more complex projects, the Planning Director calculates the
mitigation fees separately.
b. This procedure has been implemented. The payment is handled separate by
clerical staff personnel who prepared an MCR. The client takes payment to the
City centralized cashier and then is instructed to return the validated receipt copy
to the Planning clerical staff. In addition, utilization of Eden's invoicing system by
Planning Department personnel is being considered.
c. This has not been implemented and is still under consideration. Initially it was
considered that Public Works would assume the concurrency management
system computer, however, personnel in that area are not available to take over
this function.
Recommendation
Planning Department should continue to implement new procedures as outlined above
to enhance the internal processes within the department. Invoicing for fees should be
done through the City's financial software (EDEN) system.
Management Response
The Department agrees with the finding and accepts the recommendation. Many of the
recommended improvements have already been implemented. Staff will acquire the
required training from the Finance Department in order to process payments within the
EDEN system, rather than using paper MCR's. This will require a slight change in the
EDEN invoicing procedures currently in place by the Finance Department, so that
customers can pay directly at the cashier's window rather than having to wait for an
invoice to be processed first by the Finance Department. Finance staff has indicated the
ability and willingness to arrange for this.
EXIT CONFERENCE
An exit meeting was held to discuss the audit report and to solicit management responses noted
above. Participants included Richard Lorber, Acting Planning Director, James Sutter, Internal
Auditor and Laura Franco-Rubines, Assistant Internal Auditor. Management responses were
received thereafter and incorporated in the report. All were in agreement with the contents of
this report.
JJS:LR:Ir
(Audit performed by Laura Franco-Rubines, Assistant Internal Auditor)
F:\OBPI\$AUD\INTERNAL AUDIT FILES\DOC1 0-11\REPORTS-FINAL\Concurrency Management Fees.docx
cc: Jorge Gomez, Assistant City Manager _
Richard Lorber, Acting Planning Director
Susana Alonso, Senior Planner
Fred Beckman, Public Works Director
Patricia Walker, Chief Financial Officer
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