First Class Parking, LLC Parking Operational Audit 08-30-17MIAMI BEACH INTERNAL AUDIT REPORT
City of Miami Beach, 1700 Conve ntion Ce nter Drive, Miami Beach , Florida 33 139,
Office o f Internal Audit
Tel: 305-673-7020
TO :
FROM :
DATE :
AUDIT :
Jimmy L. Morales , City Manag~~..JA.
James J. Sutter, Internal Auditi fr
August30, 2017
First Class Parking , LLC Valet Parking
.mi a mibeac hfl .gov
PERIOD : Tuesday November 29th through Sunday ecember 4th , 2016
(Design Miami and Art Basel Miami Beach 2016)
This report is the result of an audit of First Class Park ing, LLC 's valet parking operations during
Design Miami and Art Basel Miami Beach 2016 which was held between November 29th and
December 4th in an effort to determine their compliance with selected provisions in their signed
concession agreement.
INTRODUCTION
The Design Miami event was held in a specially constructed tent located in the northwest corner
of the Miami Beach Convention Center preferred parking lot near the intersection of Meridian
Avenue and 19th Street. This event attracts the world 's top galleries who present museum-
quality exhibitions of furniture , lighting and art objects . It opened on Tuesday, November 29 and
continued to operate concurrently with Art Basel Miami Beach which was held from Wednesday,
November 30 through Sunday , December 4 .
Art Basel Miami Beach 2016 was held at various City locations (Convention Center, Bass
Museum of Art, New World Center, etc.) combining an international art show with an exciting
program of special exhibitions, parties and crossover events including music, film, architecture
and design. Simi lar to 2015 , event attendance was reported to equal 77,000 with many patrons
using the valet parking services provided by the City 's concessionaire called First Class
Parking, LLC.
City Resolution No . 2010-27474 was adopted on September 15, 2010 authorizing First Class
Parking, LLC to perform management and operation of valet parking services at the Miam i
Beach Convention Center, the Fillmore Miami Beach at the Jackie Gleason Theater and other
City properties between October 1, 2010 and September 30, 2013. The concession agreement
covered a multitude of terms including monthly fixed minimum rental payments , required
insurance coverage, signage , performance bonds, property maintenance, etc. On September
11, 2013 , the City Commission approved to exercise the agreement's addit ional two year
renewal option valid through September 30, 2015.
W ith the Miami Beach Convention Center undergoing an unprecedented multiple year
renovation project , the Finance and Citywide Projects Committee recommended approving a
waiver of competitive bidding and awarding the current provider , First Class Parking, LLC, with
a term of three years or substantial completion of the project, whichever occurs first. The City
Commission agreed with their recommendation and approved Resolution No. 2015-28943 on
March 11, 2015 authorizing the City Administration to negotiate an extension to the concession
agreement.
We are committed to providing excellent public service and safety to all who live , work , and play in our vibrant, tropico/, historic community.
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
The following table lists the daily number of valet parked vehicles by First Class Parking, LLC
during the past five Design Miami and Art Basel Miami Beach events as reported by the
concessionaire:
Event Days (Actual Dates Vary) 2012 2013 2014 2015 2016
Tuesday 94 86 79 51 136
Wednesday 649 635 487 494 547
Thursday 497 492 542 497 588
Friday 583 550 580 563 663
Saturday 745 777 622 735 846
Sunday 513 596 578 561 623
Total 3,081 3,136 2,888 2,901 3,403
OVERALL OPINION
The City's valet parking concessionaire (First Class Parking, LLC) generally satisfied Design
Miami and Art Basel Miami Beach 2016's valet parking needs, regardless of the limited
availability of parking spaces, traffic congestion, etc. Internal Audit believes that the
concessionaire, in conjunction with the City's Parking and Police Departments, performed
sufficiently in overcoming these obstacles.
Despite the successes achieved, there are still areas in need of improvement that can be of
assistance in the planning of valet parking operations for Design Miami and Art Basel Miami
Beach 2017. Shortcomings in the following areas were noted during testing and are described
further in the section entitled "Findings, Recommendations and Management Responses".
• The concessionaire did not meet the performance standards designated in section 12.1
of the signed agreement and therefore owes $7,520 in penalties to the City.
• Shortcomings were noted concerning Flash Valet software, stored vehicles security and
pedestrian safety of event patrons.
• The December 2016 supplied listing of concessionaire employee names and driver
licenses were incomplete in reference to City Code Section 18-340(6). In addition, one
of the concessionaire's employees who worked as a runner driving patrons' vehicles was
determined to have done so with an expired driver license.
• All twelve monthly concession payments were received late or after the agreement's
designated due dates and the concessionaire's 2016/17 fiscal year business tax receipt
were not renewed timely.
PURPOSE
The purpose of this audit is to determine whether First Class Parking, LLC complied with
selected terms in their concession agreement aimed at providing timely and quality professional
valet services to Design Miami and Art Basel Miami Beach 2016 attendees.
Page 2of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
SCOPE
1. Confirm that First Class Parking, LLC (concessionaire) has complied with selected
criteria outlined in the concession agreement. Examples of areas to be tested include
comparing calculated turnaround times to stated goals, monitoring V.l.P. parking and the
rates charged, assessing the performance of assigned staff toward valet patrons, etc.
2. Confirm through observations that the concessionaire has implemented sufficient
internal controls in their valet parking operations and followed valet parking guidelines
established by the City.
3. Confirm that the concessionaire is current with their annual business tax receipt and has
maintained sufficient insurance coverage.
4. Confirm that concession fees have been accurately and timely paid in accordance to the
signed concession agreement. If not, determine whether the appropriate late charges
were levied and paid.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
During the course of Internal Audit's physical observations, inquiries with key personnel and
review of provided supporting documentation, the areas below were deemed in need of
improvement with any repeat of prior year's findings denoted by an asterisk (*) in the left hand
margin.
1. Finding -The Concessionaire did not meet the Performance Standard designated in
Section 12. 1 of the Concession Agreement and therefore Owes $7, 520 in Penalties to
the City
The City provided the concessionaire with approximately 130 parking spaces in the
surface lot located directly south of the Miami Beach Convention Center at the northeast
corner of 17th Street and another 100 parking spaces on the rooftop of the Pennsylvania
Avenue and 1 ]1h Street garage. However, these 230 total parking spaces are not
sufficient to handle patron demand.
As a result, the concessionaire at its own expense negotiated with the Miami-Dade
County School Board to lease parking spaces at the Miami Beach Senior High School
(MBSHS) to increase their vehicle storage capability. In theory, these corresponding
large parking lots should also help improve turnaround times as their entrances/exits are
a shorter distance from Hall D and the designated valet pick-up location in front of the
Miami Beach Botanical Gardens. A turnaround time equals the amount of time elapsed
from when a valet customer submits his/her claims ticket to the time that his/her vehicle
is delivered. Unfortunately, the MBSHS lots can only be used by the concessionaire
when school is not in session which encompasses weekdays after 4:00PM and all day
on the weekends.
Page 3of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
The concessionaire utilized the Flash Valet software application to manage valet parking
volume and revenue. This cloud-based software allows the concessionaire to track
vehicles in real time by providing a record of events associated with each parked
vehicle, such as drop-off time, storage location, request time, and delivery time.
Additionally, the software application gives the concessionaire the ability to accept credit
card payments and retrieve summary data reports that provide the number of vehicles
parked, revenue from cash and credit cards, revenue per type of credit card, total
revenue, average customer retrieval times, etc.
Section 12.1, of the concession agreement, entitled "Performance Standard" states the
following: "Concessionaire acknowledges that timely acceptance and return of patron
vehicles directly impacts patron's experience of Venue's serviced in this Agreement. As
such Concessionaire agrees to ensure that not less than eighty percent (80%) of all
vehicles parked for any Venue event shall be returned to patrons within twenty (20)
minutes of patron's request for a vehicle (the "Performance Standard'). In the event
Concessionaire fails to meet this standard for any Venue event, Concessionaire shall
pay to the City a penalty in the amount of Forty and No/100 Dollars ($40.00) for every
vehicle delivered below the Performance Standard (the "Penaltv'J."
Internal Audit calculated the corresponding percentage of turnaround times exceeding
the twenty minute benchmark using the initial Flash Valet data provided by the
concessionaire. In doing so, four hundred thirteen ( 413) erroneous records, from
December 4th, described in more detail in finding 2.b., had to be excluded despite
several requests shortly after the events conclusion. Additionally, it was determined that
the Pennsylvania Avenue Garage's average turnaround times were only two minutes
longer than those calculated for the MBSHS lots on Wednesday 11/30/16 so its impact
was minimal.
Then on March 15, 2017, the concessionaire provided a revised dataset of turnaround
times that occurred on December 4th, which was used to re-calculate the percentage of
turnaround times exceeding the twenty minute benchmark. As a result, it was calculated
that the concessionaire returned 2,533 out of 3,401 or 74.48% of vehicles parked to
valet patrons in twenty (20) minutes or less. Therefore, 188 or 5.52% vehicles (3,401
total vehicles x 80% = 2, 721 -2,533 = 188) were delivered below the performance
standard goal of eighty percent (80% ). A penalty, per section 12.1 of the concession
agreement, in the amount of forty dollars ($40) for every vehicle delivered below the
performance standard goal results in the concessionaire owing the City a total of $7,520
(188 vehicles x $40). The chart and table below provide a summary of the
concessionaire's daily performance in reference to daily vehicle retrieval turnaround
times in relation to the performance measure standard.
Page 4of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August 30, 2017
"'C 100.00 %
cu .:.:: ... ro 80 .00 % c..
"' cu u 60.00 % :c cu > -40 .00 % 0
cu
bO ro 20.00 % +' s::: cu u ... 0 .00 % cu c..
Date
29-Nov
30-Nov
1-Dec
2-Dec
3-Dec
4-Dec
Perfomance Standard Compliance Analysis
29-Nov 30-Nov 1-Dec 2-Dec 3-Dec 4-Dec
•Percentage of Vehicles Returned in> 20 minutes
•Percentage of Vehicles Returned in 20 minutes or less
Percentage of Vehicles Percentage of Vehicles
Returned in> 20 minutes (Red) Returned in 20 minutes or less (Blue)
1.47% 98.53%
22 .12% 77.88%
18 .37% 81.63%
26 .85% 73 .15%
17.85% 82 .15%
49.60% 50.40%
25.52% 74.48%
As shown in the graph and chart above, the concessionaire typically was either slightly
above or below the 80% performance standard in section 12 .1 except for Sunday
12/04/16. The concessionaire only used the nearby surface lot located directly south of
the Miami Beach Convention Center at the northeast corner of 1 yth Street plus the
MBSHS lots on Sunday which should have resulted in their meeting the mutually agreed
upon performance standard's terms.
Recommendation(s):
Based on the data provided, the Parking Department should work with the
concessionaire to resolve the $7,520 owed in penalties for not fully complying with
section 12.1. Going forward, the City's Parking Department should request the
concessionaire 's Flash Valet calculated turnaround t imes for various events to determine
whether the performance standard goals have been achieved. Lastly, the
concessionaire should strive harder to attain quicker turnaround times by adding or
repositioning personnel, etc.
Page 5 of 14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
Concessionaire's Response:
Concessionaire does not concur with the Audit Department's finding and its companion
recommendation regarding the imposition of substantial financial penalties pursuant to s.
12.1 of the Concession Agreement for the following reasons:
a. The Flash Valet System employed by the Concessionaire is a software product
designed to assist it with its efforts to efficiently manage its valet parking
operation in order to provide patrons with an optimal customer service
experience. It also allows patrons to request their vehicle via text or at the
cashier's area. It also allows the Concessionaire to seamlessly track the
inventory of vehicles in its possession. The moment an owner drops off his
vehicle, Concessionaire can record the parking attendant who parked the
vehicle, the area where the vehicle was stored, the time taken to retrieve the
vehicle key from the key controller, the time when a vehicle was requested by
patron, the time that take for key controller to assigned the key to a parking
attendant, and the time when the transaction was completed. Having that
information available in our system allows our ramp supervisors to know which
vehicles are in transit and which ones are not. Hence, if an owner inquires about
the status of his vehicle after it was initially requested, Concessionaire's staff are
able to inform the patron if their vehicle is in route and the name of the parking
attendant assigned to bring their vehicle to the pick-up ramp.
b. The data provided by the Concessionaire to the Audit Department, which it used
as the basis of the Audit Department's determination of the Concessionaire's
compliance with s. 12.1 of the Concession Agreement does not reflect the time
period intended to be captured by the Performance Standard. Said section, in
pertinent part, states:
Concessionaire agrees that not less than eighty percent (80%) of
all vehicles parked for any Venue event shall be returned to
patrons within 20 minutes of the patron's request for a vehicle.
As noted above, the data provided to the Audit Department reflects the time
encapsulated in the Performance Standard and, in addition, the time subsequent
to the patron's acceptance of the vehicle and necessary to complete the
transaction. In other words, the time reflected in the data includes the time when
a patron's vehicle was returned and any additional time associated with patron's
entry into the vehicle and the time needed by the key controller to close-out a
transaction confirming that the patron's vehicle has left the Concessionaire's
control.
c. The data in the Flash Valet System provided to the Audit Department does not
record the time that elapses between when a vehicle is requested and returned
to a patron at the valet ramp. This fact was recognized by Audit Department staff
when they conducted their random audits of the operation on-site. The on-site
auditors observed vehicles arriving at the pick-up ramp and remaining there until
such time as the vehicle owner picked them up.
d. As mentioned on page 4, item c of 2015 Art Basel Audit:
Page 6of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
Some patrons did not promptly proceed to the "valet drop-off'
kiosk after submitting their ticket at the "valet pick-up" kiosk
resulting in the vehicles being unclaimed upon delivery by the
concessionaire's runners.
Such a delay in patron's retrieval of their vehicles significantly adds to the time
recorded in the Flash Valet System noted for the completion of the transaction.
e. As the conditions at Art Basel are unique, Concessionaire would recommend that
the Audit return to its past practice of utilizing audited turnaround times to
determine compliance with the Performance Standard in lieu of the Flash Valet
System data which all parties (Parking Department staff and Audit Department
staff) recognize is less precise. In 2015, the Audit Department concluded as
follows:
... Internal Audit calculated turnaround times daily at various
intervals during the events to help provide a representative
sample which are summarized in the following table ...
Given the Audit Department's past reliance on its own internal data to determine
compliance with the Performance Standard, Concessionaire recommends that
the Audit Department rely on the data collected from its random audits of the
operation during this year's event in order to determine compliance with s. 12.1
of the Concession Agreement and whether any penalties are due and owing from
the Concessionaire. The use of such data is likely more reliable and does not
suffer from the defects outlined hereinabove.
f. Concessionaire also believes that it warrants noting that the Flash Valet System
allows the Concessionaire the opportunity to solicit feedback regarding a patron's
satisfaction with its level of service via text messaging capabilities. As such, the
Concessionaire distributed a survey to all 352 patrons serviced during this year's
Art Basel Event that requested the return of their vehicle via text message. The
text message survey provides patrons an opportunity to rate the quality of
Concessionaire's service on a scale of 1 to 10 -with a rating of "1" indicating
poor service and a rating of "1 O" indicating outstanding service. 182 of the 352
patrons surveyed provided a response (a 51 % response rate) with
Concessionaire receiving an average service rating of "9" in response to the
survey. While we agree that the timely acceptance and return of patron vehicles
directly impacts patron's experience of Venue's serviced in this Agreement, we
believe that this survey provides real-time, reflection of patron satisfaction with
the service provided at this year's event. We have attached a .pdf file of the
survey results for your review.
g. Further, in a post-event meeting held at the Convention Center on December 5,
2016, with the Art Basel staff, the City Parking Department staff, convention
center event managers, Concessionaire's staff, and others, it was noted by the
Art Basel staff that not a single complaint was received about the quality of the
valet parking services rendered during the event.
Page 7of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
Based on the results of its survey and event sponsor's feedback, Concessionaire
believes that it met or exceeded the Performance Standard set forth in the
Concession Agreement for the 2016 Art Basel event. We, therefore, request a
copy of the data collected by the Audit Department staff during the random audits
conducted during the course of the event and a meeting between Audit
Department and Parking Department staff to discuss this finding and the
Auditor's recommendation related to the imposition of penalties.
City's Response (Parking Department):
The Parking Department will create a City Bill invoicing the concessionaire for the
$7,520 owed in penalties. Flash Valet malfunctions will be reviewed with First Class. It
is expected that the addition of parking at the new Convention Center will have an
impact on the valet operation. The Parking Department will work with First Class to
promote expedient valet service, including ensuring staffing levels are conducive to
improve vehicle delivery times.
2. Finding -Shortcomings were noted Concerning the Flash Valet Software, Stored
Vehicles Security and the Pedestrian Safety of Event Patrons
The following shortcomings were noted that are in need of corrective action concerning
the Flash Valet software, the security of stored vehicles and pedestrian safety:
Flash Valet Software
a. The process to retrieve a vehicle was initiated by the customer by either
submitting their valet ticket at the valet drop-off tent to be scanned or by texting a
mobile phone number to request their vehicles ahead of time, before exiting the
event. The customer would then proceed to the valet pick-up area, across
Convention Center Drive, with their valet ticket stub. The request would then be
received by the corresponding parking lot dispatchers, where the vehicle was
stored, who would then assign a parking lot runner to deliver the vehicle to the
valet pick-up location. The delivery would only be completed when the runner
delivered the vehicle to the valet patron and retrieved the customer's valet ticket
stub in order to complete the vehicle retrieval process.
Vehicles would occasionally have to be re-parked when valet customers would
request their vehicle and not appear timely at the valet pickup area. The
concessionaire claims that these vehicles would then be re-entered into the
Flash Valet system and corresponding duplicate reports would be generated for
the re-parked vehicles, providing data for both the primary and secondary trips.
Internal Audit had concerns that substandard turnaround times could be masked
by having concessionaire staff re-park vehicles but the requested duplicate
reports were never provided by the concessionaire.
b. Internal Audit excluded 413 of Sunday December 4, 2016's 623 total records or
66.29% since 139 of these records contained negative turnaround times as the
vehicles were recorded as having been received before they were requested and
the remaining 27 4's Flash Valet calculated retrieval times did not equal the
difference between the received time and requested time. However, on March
15, 2017, the concessionaire provided a revised dataset of turnaround times that
Page 8of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
occurred on December 4th_ Internal Audit analyzed the newly provided dataset
and verified that Flash Valet turnaround times equaled the difference between
received and requested times. The dataset was then used to re-calculate the
percentage of turnaround times exceeding the twenty minute benchmark.
Security of Stored Vehicles
c. * Despite concessionaire staff taking immediate action upon notification, Internal
Audit's unannounced walkthroughs of the temporary storage lots found the
instances below whereby the patrons' vehicles were not properly safeguarded
thereby potentially exposing their contents to the weather and/or unscrupulous
individuals:
• The rear driver's side window was left down for ticket number 123603 on
Friday December 2, 2016.
• The rear passenger window was left down for ticket number 124429 on
Saturday December 3, 2016.
• The parking lights were left on for ticket 124490 on Saturday December 3,
2016.
• A total of 23 vehicles were discovered that were not locked in various lots
throughout Art Basel Miami Beach 2016.
Pedestrian Safety
d. A safety barrier consisting of cones connected by taped ribbons dividing
Convention Center Drive's northbound and southbound lanes was used to keep
vehicle traffic flowing efficiently and to deter drivers from making spontaneous U-
turns. The safety barrier was also meant to keep foot traffic crossing Convention
Center Drive at the designated, Police Officer patrolled crosswalk in front of Hall
D of the Miami Beach Convention Center (MBCC). Additionally, Parking
Enforcement Specialists were assigned to ensure pedestrians used the
crosswalks at 18th Street and Convention Center Drive as well as the one, in front
of Hall C of the MBCC, to direct foot traffic attempting to cross Convention Center
Drive at 19th street to the appropriate crosswalk in front of Hall D, in front of Hall
D to deter vehicles from parking illegally, and at the taxi stand.
Although the safety barrier dividing Convention Center Drive did deter vehicles
from making inappropriate U-turns, it did not deter pedestrians from crossing at
locations other than the crosswalks. Pedestrians were routinely observed
crossing Convention Center Drive by breaking, stepping over, or pulling the tape
thereby increasing the risk of an accident. While Parking Enforcement Specialists
were observed attempting to deter individuals from crossing at these unsafe
locations, most pedestrians did not pay attention and continued to cross. Also,
the placement of the Parking Enforcement Specialists, at the northwest corner of
19th Street and Convention Center Drive, was not conducive to deterring
individuals from crossing as most of their verbal advisories occurred after they
had crossed Convention Center Drive.
Page 9of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
Recommendation(s ):
The concessionaire should implement the following recommendations:
a. The concessionaire should either substantiate the claims that re-parked cars'
historical data is recorded in Flash Valet and provide it to Internal Audit or work
with the software provider to rectify this limitation for the Design Miami/Art Basel
2017 event.
b. The concessionaire should provide complete and accurate datasets of records to
the City in a timely manner in order to determine the concessionaire's
compliance with the City's Performance Standard requirement per section 12.1 of
the concession agreement.
c. The concessionaire should ensure that valet patrons' vehicles are safeguarded
and protected by adequately training their employees in regards to vehicle
storage security and safety. In addition, they should designate individuals to
periodically review the vehicles parked inside the lots to better ensure that they
are properly secured while stored inside.
d. The City should consider installing higher pedestrian barricades on Convention
Center Drive instead of the cones with the taped ribbon in order to deter jay-
walking pedestrians and to help ensure that they use Police and Parking
Enforcement controlled crosswalks. The Parking Enforcement Specialists should
also be positioned where they would be able to better prevent the unsafe and
illegal crossing of Convention Center Drive.
Concessionaire's Response:
a. Concessionaire will request to software provider to produce a report that reflects
re-parked car's for the Design Miami/Art Basel 2017 event.
b. Concessionaire has provided records to the City to determine compliance with
the City's performance standard requirement per section 12.1 of the concession
agreement.
c. Concessionaire concurs with the auditor's recommendation. Concessionaire
takes the safeguarding of client vehicles and personal items very seriously and,
as such, we will continue to reinforce with concessionaire staff the need to
secure stored vehicles when parked by an attendant and control the parking lot
areas. However, it bears noting that the auditor's finding of 26 instances of
deficiencies in this area represents less than 1 % of the total vehicles processed
by the concessionaire.
d. Concessionaire agrees with the auditor's recommendation with regard to the
installation of higher pedestrian barricades on Convention Center Drive.
City's Response (Parking Department):
The Parking Department will address with First Class the Flash Valet malfunction to
ensure correct data on vehicle return times. Additionally, First Class will be required to
assign an employee to ensure vehicles are properly safeguarded.
Page 10of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
The Art Basel operation will be re-evaluated upon completion of the new Convention
Center. It is recommended that if needed, a location be identified for legal U-turns, thus
avoiding the need to close roadways for this purpose. It is expected that the addition of
parking at the Convention Center will reduce pedestrian traffic crossings at Convention
Center Drive.
3. * Finding -The December 2016 Supplied Listing of Concessionaire Employee Names and
Driver Licenses was Incomplete in Reference to City Code Section 18-340(6)
City Code Section 18-340(6), entitled "Employees and valet operators code of conduct"
states:
"Valet operators shall submit to the parking department a list of all employees or
contractors employed or retained by the valet operator who are engaged in valet
services in the city. Additions and deletions to the valet employee roster shall be
reported monthly. The employee report shall be submitted to the attention of the parking
director no later than the fifth day of each month. The employee list shall contain the
name of the employee or contractor and their valid Florida Driver's License numbers. A
photocopy of each employee or contractor's valid Florida Driver's License shall be
submitted for each employee or contractor on the roster."
The concessionaire has been providing monthly employee listings with the
corresponding driver license numbers to the Parking Department since at least
December 2015 but they did not provide the required photocopies addressed above.
Internal Audit's review of the 65 driver license numbers furnished in December 2016
found that all were valid and did not expire until after the conclusion of the Design
Miami/Art Basel Miami Beach 2016 event but one could not verify that the individuals
were actually those working the event.
Additionally, the concessionaire's provided event time sheets showed that a total of 102
valet employees actually worked during the events, contrary to the 65 valet employees in
the initial listing provided. This total included 52 valet employees from the initial listing
and an additional 50 valet employees not previously submitted. Of these 50 additional
valet employees, driver license numbers were provided for 25 valet employees for which
it was determined that one employee worked all event days as a runner (driving patrons'
vehicles) with an expired license.
Furthermore, City Code Section 18-343(a)(2) entitled "Penalties and enforcement"
states:
(2) A violation of section 18-340 shall be subject to the following fines:
i. If the violation is the first offense, there shall be a civil fine of $100.00;
ii. If the violation is the second violation within the preceding nine months, there shall be
a civil fine of $250. 00;
iii. If the violation is the third violation within the preceding nine months, there shall be a
civil fine of $500. 00;
iv. If the violation is the fourth or subsequent violation within the preceding nine months,
there shall be a civil fine of $1,000.00.
Page 11of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August 30, 2017
Yet, no violations were issued to the concessionaire in the past year for not complying
with the above City Code section.
Recommendation(s):
The concessionaire should prospectively furnish a complete listing and photocopies of
all employee driver licenses to the Parking Department by the fifth of each month or be
subject to the penalties addressed in City Code Section 18-343(a)(2). The validity of
each submitted driver license's information should be checked by the Parking
Department with the valet company notified that any non-conforming employees are to
be prohibited from driving until additional documentation is provided showing that the
identified shortcomings have been resolved. Additionally, Parking Department personnel
should periodically conduct site inspections to confirm that the actual valet employees
working are the same as those for which names and driver licenses were submitted. The
appropriate enforcement actions should be taken for any differences found.
Concessionaire's Response:
Concessionaire has been providing the Parking Department with a list of their names of
each of its valet drivers, their driver's license numbers and copies of each license by the
5th day of each month. Concessionaire will update that list as needed.
Concessionaire has administrative staff, such as an event office manager, key
attendants, lot attendants, customer service ambassadors, cashiers, and traffic
controllers. Administrative staff does not drive patron vehicles. As such, driver's licenses
were not provided to the Parking Department for such administrative staff. The names
of such employees; however, were included in the list of all the employees that worked
at the Art Basel 2016 provided to Auditor.
Due to the size of the Art Basel event, last minute parking attendants were asked to
work during the event. However, attendance log sheets were prepared that included a
field for the driver's license number for each driver and copies of these log sheets were
provided to Auditors during the course of the event. Each driver's license was checked
by the Office Manager on a daily basis. In addition, parking supervisors directed all
parking attendants to carry on their driver license with them while working the event.
City's Response (Parking Department):
A Notice to Cure was sent to the concessionaire for not submitting the photocopies of
the licenses. As of January 2017 the employee listings as well as photocopies of the
licenses have been received in a timely matter. Currently, an Office Associate IV has
been checking the licenses on a monthly basis. In the Notice to Cure, the concessionaire
was made aware of the penalties going forward.
4. Finding -All Twelve Monthly Concession Payments Tested were Received Late or After
the Signed Agreement's Designated Due Date and the Concessionaire's Business Tax
Receipt was also not Renewed Timely
Section 3.1.1 through 3.1.3 of the current signed agreement requires the concessionaire
to remit fixed monthly minimum payments of:
• $12,007.41 (which includes $785.53 in state sales tax) during the initial contract
year, fiscal year 2015-2016;
Page 12 of 14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
• $12,007.41 (which includes $785.53 in state sales tax) during the second
contract year, fiscal year 2016-2017; for any month during the second contract
year in which the Miami Beach Convention Center (MBCC) venue is closed, the
concessionaire shall receive a full abatement of the MBCC venue portion of the
concession fee, which is calculated at $7,204.45 (which includes $471.32 in state
sales tax);
• $13, 160.12 (which includes $860.94 in state sales tax) during the third contract
year, fiscal year 2017-2018; for any month during the third contract year in which
the Miami Beach Convention Center (MBCC) venue is closed, the
concessionaire shall receive a full abatement of the MBCC venue portion of the
concession fee, which is calculated at $8,357.16 (which includes $546. 73 in state
sales tax);
The monthly payments must be submitted by the fifteenth of the month or be subject to
an 18% interest penalty. Since the monthly payment amount is known and fixed, the
corresponding City Bill was routinely created on the first of each month. A Parking
Department Office Associate IV is to create another City Bill in the City's Financial
System for the appropriate amount of interest if the concessionaire's monthly payment is
not received by the fifteenth of each month per section 3.1 of the agreement.
Testing determined that all twelve monthly payments received for December 2015
through November 2016 were paid after the due date ranging from a low of 29 days for
December 2015 to a high of 37 days for November 2016. As a result, the concessionaire
was properly billed $2,040.97 in interest. As of February 7, 2017, the amount owed by
the concessionaire to the City was $138.35 which consists of the associated penalty
interest from November 2016 ($81.90), December 2016 ($38.74) and January 2017's
($17.71) late payments.
Additionally, section 3.4 of the signed concession agreement states "Concessionaire
shall obtain, at its sole expense and responsibility, any business tax receipts required by
the City for the proposed use(s) contemplated herein." Yet, testing determined that the
concessionaire submitted payment for their business tax receipt renewal, for the
proposed uses of the concession agreement, on January 13, 2017, or 104 days late.
The concessionaire was properly assessed and paid a 25% penalty of $348. 75 per City
Code section 102-37 4(b) which states:
(b) All business tax renewal fees are due and payable on October 1 of each year. Any
person failing to timely apply for the annual renewal of a business tax under this article
may be issued a tax receipt only upon payment of a delinquency penalty of ten percent
for the month of October or portion thereof and an additional five percent for each month
of delinquency thereafter or portion thereof until paid. Payments must be received by the
city prior to the first day of each penalty month to avoid additional penalties; however,
the total delinquency penalty shall not exceed 25 percent of the business tax amount.
Recommendation( s):
The concessionaire should better strive to pay the fixed monthly payments and business
tax receipt renewal fees to the City timely.
Page 13of14
Internal Audit Report
First Class Parking, LLC Valet Parking Operational Audit
Design Miami/Art Basel Miami Beach 2016
August30,2017
Concessionaire's Response
Concessionaire acknowledges that 2016 concession payments were paid between 29
days and 37 days late. However, Concessionaire is current on all past payments and
interest owed. As of 2017, Concessionaire timely paid the required concession monthly
payment on or before the 15th day of each month and will make sure its operational
license is timely renewed by the 1st day of October.
City's Response (Parking Department):
On January 5, 2017 the concessionaire was issued a Notice to Cure for not submitting
the monthly payments in a timely manner. In addition the Office Associate IV has been
working with the concessionaire ensuring timely payments.
EXIT CONFERENCE
The Parking Department initially declined the offer to hold an exit meeting to discuss the audit
report and submitted their management responses. The audit report was subsequently
forwarded to First Class Parking, LLC management. Management responses were received
from the concessionaire's management on March 10, 2017 but they were incomplete. The
concessionaire subsequently requested a meeting to further discuss the findings which was
held on April 20, 2017. Minor revisions were made to the draft report and it was sent again to
the concessionaire for their management responses which were received on May 19, 2017. All
parties management responses were incorporated in this report and all were in agreement with
the contents therein. The Parking Department will utilize this report in the planning for next
year's Design Miami and Art Basel Miami Beach events.
JJS:LM:MC
Audit performed by Auditor Luis Medina and Assistant Internal Auditor Mark Coolidge
F:\OBPl\$AUD\INTERNAL AUDIT FILES\DOC16-17\REPORTS -FINAL\FIRST CLASS PARKING, LLC RPT 2016.docx
cc: Kathie Brooks, Assistant City Manager
Saul Frances, Parking Department Director
John Woodruff, Chief Financial Officer
Jorge Zuluaga, Chief Executive Officer, First Class Parking, LLC
Page 14 of 14