State Beachfront Management Agreement FY10 (State Financial)MIAN\1 BEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO: Jorge M. Gonzalez, City Manager
VIA: Kathie G. Brooks, Budget and P~erform. ~ ang.e Improvement Director
James J. Sutter, Internal Auditor-~aJ'/ FROM:
,/
DATE: October 31, 2011
AUDIT: State Beachfront Management Agreement (#3595) Financial Review
October 1, 2009 through September 30, 2010 PERIOD:
This audit report is being submitted in compliance with the annual audit reporting requirement of
subparagraph (2) of the original State Beachfront Management Agreement No. 750-0006 dated
February 3, 1982, which was subsequently reassigned No. 3595 by the State Department of Natural
Resources. Furthermore, amendment number 1 was signed on August 9, 2007 extending the
original terms for an additional twenty-five years until February 7, 2032.
INTRODUCTION
State Beachfront Management Agreement No. 3595 requires that the City of Miami Beach remit to
the Florida Department of Environmental Protection 25% ("sand tax") of any and all monies the City
collects from private concerns for the use of State beachfront property. There are three categories
of beachfront property users:
• Operators of beachfront concessions seaward of Lummus Park, Ocean Terrace, North
Shore Open Space Park and Pier Park (Boucher Brothers and Penrod Brothers) who pay for
use of the. beachfront as per their respective contractual agreements with the City.
• Miami Beach hoteliers and condominium associations, which pay beach upland fees to the
City on an annual basis, at the same time that they pay their business tax receipt fees.
• Members of the public who run organized, usually one time only, events on the beach, such
as weddings, volleyball tournaments and corporate affairs. These are called special events,
and payments are remitted to the City's Tourism and Cultural Development Department.
The following table lists the audited rounded amounts of sand tax collected, due and paid to the
State by the three categories of users during the audit period:
*
Category Total 25% Sand Amount Difference
Revenues Tax Due Remitted
Collected
Beachfront Concessions $737,487 $184,123 $184,123 $0
Hoteliers and Condo Associations $254,837 $64,177 $64,177 $0
Special Events $129,654 $32,414 $32,273 ($140)
Total $1 '120,985 $280,714 $280,574 ($140)
The City made the following four sand tax payments totaling $280,574.03 to the State of Florida based on the
applicable revenues collected during the 2009/1 0 fiscal year:
We are committee/to providing excellent public service one/ safety to oil who live, work, and play in our vibrant, tropical, historic community
Internal Audit Report
State Beachfront Management Agreement Financial Review (#3595)
For the Fiscal Year Ending September 30, 2010
October 31, 2011
Check Number
292582
297236
301278
305300
OVERALL OPINION
Check Date
01/20/10
05/04/10
07/29/10
10/20/10
Check Amount
$184,612.59
$39,427.60
$14,604.56
$41,929.28
Based upon our examination of City records, it has been determined that during the audit period of
October 1, 2009 through September 30, 2010, the City received a total of $1,122,856.89 in revenues
subject to the State Beachfront Management Agreement. This figure represents an increase of
$114,201.39 or 11.32% over the fiscal year 2008/09's total of $1 ,008,655.50.
PURPOSE
The purpose of this audit is to determine whether the City complied with State Beachfront
Management Agreement No. 3595 by accurately calculating, timely remitting and properly recording
sand tax monies to the Florida Department of Environmental Protection equal to 25% of any and all
revenues collected from private concerns for the use of State beachfront property.
FINDING AND RECOMMENDATION
Finding: The State of Florida was Inadvertently Underpaid $140.19 in Sand Tax
Internal Audit's testing found that the City remitted $280,57 4.03 in sand taxes to the State of Florida
which was $140.19less than the actual amount due of $280,714.22 ($1 ,122,856.89 x 25%). This
overage was identified in last year's audit but has not been corrected to date by the City's Finance
Department. See the attached supporting schedule for revenue details by beachfront property user
during the audit period.
Recommendation(s):
The City's Finance Department has been notified and will add $140.19 to their next quarterly sand
tax payment.
Management Response (Finance):
The City will increase its next quarterly sand tax payment by the $140.19 identified by Internal Audit
staff. This will bring the total tax remitted to the State of Florida for the period audited to the
adjusted amount of $280,714.22, instead of the initial remittance of $280,574.04.
JJS:MC:mc
audit performed by Mark Coolidge
cc: Patricia Walker, Chief Financial Officer
Georgina Echert, Assistant Finance Director
F:\OBPI\$AUD\INTERNAL AUDIT FILES\DOC10-11\REPORTS-FINAL\BEACH 10 STATE RPT.doc
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Internal Audit Report
State Beachfront Management Agreement Financial Review (#3595)
For the Fiscal Year Ending September 30, 2010
October 31, 2011
SCHEDULE OF FEES COLLECTED
BEACHFRONT MANAGEMENT AGREEMENT
FISCAL YEAR 09/1 0
75% OF 25% DUE
CONCESSIONAIRE TOTAL FEES* TOTAL STATE
1500 Ocean Drive Associates $1,322.76 $992.07 $330.69
2201 Collins Avenue, LLC $6,372.00 $4,779.00 $1,593.00
3B Productions LLC $700.92 $525.69 $175.23
AGT Crunch Acquisition LLC $93.44 $70.08 $23.36
Alexander Hotel $4,140.00 $3,105.00 $1,035.00
Beta Epsilon/Cadillac LLC $4,734.00 $3,550.50 $1 '183.50
Betsy Ross Owner LLC $638.76 $479.07 $159.69
BGW Design Limited Inc. $3,364.48 $2,523.36 $841.12
Boucher Brothers $710,973.32 $533,229.99 $177,743.33
Caribbean Condominium Association $1,872.00 $1,404.00 $468.00
Continuum on So. Beach $5,604.98 $4,203.74 $1,401.25
CR Miami LLC $5,004.00 $3,753.00 $1,251.00
Crown $3,132.00 $2,349.00 $783.00
Crystal Beach Development $1,512.00 $1 '134.00 $378.00
Dade Community Foundation $9,710.28 $7,282.71 $2,427.57
Damien J. Gallo & Associates $337.88 $253.41 $84.47
Days Inn Art Deco $2,628.00 $1,971.00 $657.00
Days Inn Oceanside $2,394.00 $1,795.50 $598.50
Decoplage Condo Assn. $18,496.00 $13,872.00 $4,624.00
Delano Hotel $42.00 $31.50 $10.50
Dental Productions Event Co. $360.76 $270.57 $90.19
Destination South Florida/USA LLC $700.92 $525.69 $175.23
Exclusive Sports Marketing $1,740.64 $1,305.48 $435.16
Fontainebleau Hotel $20,000.00 $15,000.00 $5,000.00
Four Points By ITI Sheraton $3,510.00 $2,632.50 $877.50
Gansevoort $22,020.00 $16,515.00 $5,505.00
George A. Skestos $584.12 $438.09 $146.03
Grand Beach Hotel $15,498.00 $11,623.50 $3,874.50
Hello Florida Inc. $1,812.12 $1,359.09 $453.03
Holiday Inn Miami Beach $4,428.00 $3,321.00 $1,107.00
II Villaggio Condo Assn. $2,286.00 $1,714.50 $571.50
IMG Worldwide Inc. Operator $4,105.12 $3,078.84 $1,026.28
Katrina's/TI1e Bath Club $3,600.00 $2,700.00 $900.00
King Richard Condominium $2,132.75 $1,599.56 $533.19
Leader Enterprise Inc. $18,950.48 $'14,212.86 $4,737.62
Live Nation $31,343.44 $23,507.58 $7,835.86
Loews $20,000.00 $'15,000.00 $5,000.00
Marriott Fairfield Inn $3,672.00 $2,754.00 $918.00
Marseille Hotel $2,034.00 $1,525.50 $508.50
Miami Beach Marriott $8,496.00 $6,372.00 $2,124.00
Michael Epstein Sports Productions LLC $2,913.56 $2,185.17 $728.39
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REMITTED
TO STATE DIFFERENCE
$330.69 $0.00
$1,593.00 $0.00
$175.23 $0.00
$23.36 $0.00
$1,035.00 $0.00
$1 '183.50 $0.00
$159.69 $0.00
$841.12 $0.00
$177,743.33 $0.00
$468.00 $0.00
$1,401.25 $0.00
$1,251.00 $0.00
$783.00 $0.00
$378.00 $0.00
$2,427.57 $0.00
$84.47 $0.00
$657.00 $0.00
$598.50 $0.00
$4,624.00 $0.00
$10.50 $0.00
$90.19 $0.00
$175.23 $0.00
$435.16 $0.00
$5,000.00 $0.00
$877.50 $0.00
$5,505.00 $0.00
$146.03 $0.00
$3,874.50 $0.00
$453.03 $0.00
$1,107.00 $0.00
$571.50 $0.00
$1,026.28 $0.00
$900.00 $0.00
$533.19 $0.00
$4,737.62 $0.00
$7,835.86 $0.00
$5,000.00 $0.00
$918.00 $0.00
$508.50 $0.00
$2,124.00 $0.00
$728.39 $0,00
Internal Audit Report
State Beachfront Management Agreement Financial Review (#3595)
For the Fiscal Year Ending September 30, 2010
October 31, 2011
Michael J. Male & Lauren R. Male $272.84 $204.63 $68.21 $68.21 $0.00
Mosaic On Miami Beach $1,548.00 $1,161.00 $387.00 $387.00 $0.00
NASCAR $1,133.16 $849.87 $283.29 $283.29 $0.00
Nautilus Club $4,518.00 $3,388.50 $1 '129.50 $1 '129.50 $0.00
Palms South Beach $4,428.00 $3,321.00 $1,107.00 $1,107.00 $0.00
Penrod Brothers (Beach Concessions) $26,514.12 $19,885.59 $6,628.53 $6,628.53 $0.00
Penrod Brothers (Special Events) $21,000.00 $15,750.00 $5,250.00 $5,250.00 $0.00
Quality Inn $3,960.00 $2,970.00 $990.00 $990.00 $0.00
Radisson Deauville $8,604.00 $6,453.00 $2,151.00 $2,151.00 $0,00
Revolution $6,682.24 $5,011,68 $1,670.56 $1,670.56 $0.00
Richmond Hotel $1,926.00 $1,444.50 $481.50 $481.50 $0.00
Ritz Carlton $6,768.00 $5,076.00 $1,692.00 $1,692.00 $0.00
Ritz Plaza $2,376.00 $1,782.00 $594.00 $594.00 $0.00
Riutel Florida $5,112.00 $3,834.00 $1,278.00 $1,278.00 $0.00
Royal Palm $14,595.00 $10,946.25 $3,648.75 $3,648.75 $0.00
Sagamore Hotel $3,312.00 $2,484.00 $828.00 $828.00 $0.00
Shelborne Beach Resort $4,572.00 $3,429.00 $1,143.00 $1 '143.00 $0.00
Sllnc. LLC $12,482.48 $9,361.86 $3,120.62 $3,120.62 $0.00
So Be Fit Inc. $724.28 $543.21 $181.07 $181.07 $0.00
South of Fifth Condo Association $504.00 $378.00 $126.00 $126.00 $0.00
South Seas Hotel $2,106.00 $1,579.50 $526.50 $526.50 $0.00
Sports Mark $6,915.88 $5,186.91 $1,728.97 $1,728.97 $0.00
Starwood Hotel & Resorts $1,275.72 $956.79 $318.93 $318.93 $0.00
Sunshine Restaurant Merger ($994.32) ($745.74) ($248.58) ($248.58) $0.00
The Bentley Beach $1,962.00 $1,471.50 $490.50 $490.50 $0.00
Tile Michael Alan Group $560.76 $420.57 $140.19 $0.00 $140.19
The National Hotel (Special Events) $408.88 $306.66 $102.22 $102.22 $0.00
The National Hotel (Upland Fees) $5,760.00 $4,320.00 $1,440.00 $1,440.00 $0.00
The Savoy on South Beach $2,412.00 $1,809.00 $603.00 $603.00 $0.00
The Shore Club Hotel $5,850.00 $4,387.50 $1,462.50 $1,462.50 $0.00
U.S. Road Sports & Entertainment Fla $841.12 $630.84 $210.28 $210.28 $0.00
Vendome Place Condo $2,916.00 $2,187.00 $729.00 $729.00 $0.00
Westgate Resort $828.00 $621.00 $207.00 $207.00 $0.00
Wyndham Miami Beach Resort $7,722.00 $5,791.50 $1,930.50 $1,930.50 $0.00
Total $1 '122,856.89 $842,142.67 $280,714.22 $280,57 4.04 $140.19
*Excludes sales tax
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