OIG No. 20-02: Audit of State Beachfront Management Agreement, No. 3595MIAMI BEACH MEMORANDUM
City of Miami Beach, 1700 Convention Center Drive , M iam i Beach , Florida 3 3139, www.miamibeachfl.gov
Office of the Inspector General
Tel : 305-673-7020
December 5, 2019
TO : Honorable Mayor and Members
FROM: Joseph Centorino, Inspector Gen r
RE: State Beachfront Management
OIG Audit No. 20-02
Executive Summary
Attached is the Office of Inspector General's audit of the operational controls surrounding the
City's managing of the State Beachfront Management Agreement No . 3595 and the
corresponding amendment which extended its terms through February 7 , 2032 for the period of
October 1, 2017 through September 30, 2018. A separate audit report focusing on our financial
review will be issued to the State of Florida in accordance with the ag reement. Lastly, the audit
scope has been extended to include verifying that beachfront concession fees charged for
equipment, food/beverage and water sports were accurately billed to the applicable hotels,
apartments and condominiums through the Finance Department's business tax receipt process
during the 2018/19 fiscal year.
Based on the results of our audit, it was concluded that City Bills and M iscellaneous Cash
Receipts were generally accurately calculated and distributed among the appropriate general
ledger accounts. Furthermore, this data along with upland fees were typically found to be properly
entered into the City's Financial System. Despite these positives , the following shortcomings
were noted that need improvement:
1. The City inadvertently overpaid the State of Florida by $2,363.94 due to incorrect general
ledger entries .
2. A comparison of the figures reflected in the Office of Real Estate 's beachfront concess ion
letter agreements with the corresponding amounts invoiced by the Finance Department's
Licensing Section identified ten (1 0) transactions that were underbilled by a net total of
$7,051.00.
3. The Finance Department's Licensing Section incorrectly overbilled one (1) entity by a total
of $810.00 in beachfront concession permit fees for equipment, food/beverage and/or
water sports based on a comparison of the EnerGov System with the Office of Real Estate
master summary schedule.
4. The tested Boucher Brothers Inc.'s 21 st & 46th Street concession payments were not
properly distributed among the City's general ledger accounts by the Office of Real Estate
and they were not calculated in accordance with Section 4.2 of the Concession
Agreement's terms , resulting in a $72,151.72 (excluding state sales tax) underbilling to
Boucher Brothers Inc. by the City of Miami Beach and a $13,470.94 sand tax
underpayment to the State of Florida 's Department of Environmental Protection. If the
City's intent differs from the terms of the agreement, then the agreement needs to be
promptly revised and approved by the City Commission.
5 . Penrod Brothers Inc. incorrectly reported food and beverage sa les to the City resulting in
a net overpayment of $113.56 to the State of Florida 's Department of Environmental
Protection.
6 . The Office of Real Estate did not include sand tax on the additional lump sum amount paid
by Penrod's Brothers Inc., which was needed to meet the min imum guarantee, resulting
in a $555.25 underpayment to the State of Florida 's Department of Environmental
Protection.
EXECUTIVE SUMMARY
State Beachfront Management Agreement (#3595) Audit
0/G Audit No. 20-02
December 5 2019
We would like to personally thank Tourism and Culture Department, Economic Development
Department and Finance Department staff for their cooperation and assistance during this audit
process.
Page 2 of 2
M IAMI BEACH FINAL AUDIT REPORT
City of Miami Beach , 1700 Convention Center Drive, Miami Beach , Flor ida 33139, www.miam ibeachA .gov
Office of the In spector General
Tel: 305-673-7020
TO: Honorable Mayor and Members oft e
FROM: Joseph Centorino, Inspector Gener I
DATE : December 5, 2019
AUDIT: State Beachfront Management Agree
OIG Audit No. 20-02
n
PERIOD : October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Beachfront Concession Fees)
This report is the result of a regularly scheduled audit of the operational controls surrounding the
City's managing of the State Beachfront Management Agreement No. 3595 and the
corresponding amendment which extended its terms through February 7, 2032 . A separate audit
report focusing on our financia l review will be issued to the State of Florida in accordance with
the agreement. Lastly, the audit scope has been extended to include verifying that beachfront
concession fees charged for equipment, food/beverage and water sports were accurately billed
to the applicable hotels, apartments and condominiums through the Finance Department's
business tax receipt process during the 2018/19 fiscal year.
INTRODUCTION
State Beachfront Management Agreement No. 3595 requires the City of Miami Beach to remit
25% ("sand tax") from any and all monies collected from private concessionaires or other private
concerns for the use of State beachfront property to the Florida Department of Environmental
Protection . There are currently four (4) categories of beachfront property users:
• Operators of concessions seaward of Lummus Park, Ocean Terrace, North Shore Open
Space Park, 21st Street and 461h Street, and Pier Park (Boucher Brothers and Penrod
Brothers) who pay for the use of the beachfront as per their respective contractual
agreements with the City.
• Miami Beach hoteliers, apartments and condominium associations pay beach upland fees
to the City annually based on the number of units concurrent with their business tax receipt
fees. This category also includes non-upland fee properties that have negotiated an
agreement with nearby upland fee properties whereby their residents can use the beach
amenities of upland properties.
• Members of the public who run organized, usually one-time only events on the beach such
as weddings, volleyball tournaments and corporate affa irs. Payments from these special
events are remitted to the City's Tourism and Culture Department.
• Productions requiring the parking of essential vehicles on the beach or sand areas must
purchase vehicle beach access passes from the City's Tourism and Culture Department.
The cost of the pass is $150, per vehicle, per event. Event producers may purchase a
maximum of ten ( 1 0) vehicle access permits per event, unless additional passes are
approved by the City Manager o r his designee.
The following table lists the total amount of sand tax paid by the City to the State of Florida for the
use of their beachfront property during the past three (3 ) fiscal years:
W e are com mitted to providing excellent public service and safety to all who live, work , and pla y in our vibrant, trop ical, historic com munity.
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30 , 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland , Non-Upland and Beachfront Concession
Fees)
December 5, 2019
Category FY 2015/16 FY 2016/17 FY 2017/18 Total
Beachfront Concessions $347,893 $236 ,368 $150,310 $734 ,571
Hoteliers and Condo Associations $58,528 $44,096 $123 ,598 $226,222
Special Events $41 ,513 $37,106 $41 ,831 $120,450
Vehicle Beach Access Passes $12,694 $11 ,023 $9 ,356 $33,073
Subtotal $460,628 $328 ,593 $325 ,095 $1 ,114,316
Adjustments ($13 ,602) $6 ,245 ($2,059) (9,416)
Total $447,026 $334,838 $323,036 $1,104,900
Adjustments typically incl ude prior yea r aud it co rrect io ns as well as an y other needed revisions identified by the Finance
Department.
OVERALL OPINION
City Bills and Miscellaneous Cash Receipts were generally a ccurately ca lculated and distributed
among the appropriate general ledger accounts. Further more, thi s data along with upland fees
were typ ically found to be properly entered into the City's Financial System . Despite these
positives, the following shortcomings were noted that need improvement:
1. The City inadvertently overpaid the State of Florida by $2 ,363 .94 due to incorrect general
ledger entries.
2. A comparison of the figures reflected in the Office of Real Estate 's beachfront concession
letter agreements with the corresponding amounts invoiced by the Finance Department's
Licensing Section identified ten (1 0) transactions that were underbilled by a net total of
$7 ,051.00.
3. The Finance Department's Licensing Section incorrectly overbilled one (1) entity by a total
of $810.00 in beachfront concession permit fees fo r equipment, food/beverage and/or
water sports based on a comparison of the EnerGov System with the Office of Real Estate
master summary schedule.
4. The tested Boucher Brot hers Inc.'s 21 st & 46th Street concession payments were not
properly distributed among the City's general ledger accounts by the Office of Real Estate
and they were not calculated in accordance w ith Section 4 .2 of the Concession
Agreement's terms, resulting in a $72 ,151 .72 (excluding state sales tax) underbilling to
Boucher Brothers Inc. by the City of Miami Beach and a $13,470.94 sand tax
underpayment to the State of Florida 's Department of Environmental Protection. If the
City's intent differs from the terms of the agreement, then the agreement needs to be
promptly revised and approved by the City Commission.
5. Pe nrod Brothers Inc. incorrectly reported food and beverage sales to the City resul t ing in
a net overpayment of $113.56 to the State of Florida 's Department of Environmental
Protection.
6 . The Office of Rea l Estate did not include sand tax on the additional lump sum amount paid
by Penrod 's Brothers Inc., which was needed to meet the minimum guarantee , resulting
in a $555.2 5 underpayment to the State of Florid a's De partment of Environmental
Protection .
Page 2 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
SCOPE, OBJECTIVES, AND METHODOLOGY
The scope of this audit is to determine whether the City complied with the terms of State
Beachfront Management Agreement No. 3595 by accurately calculating, remitting and properly
recording sand tax payments to the Florida Department of Environmental Protection equal to 25%
of all revenues collected from private concerns for the use of State beachfront property. Also, the
2018/19 fiscal year beachfront concession fees for equipment, food/beverage and/or water sports
billed to hotel, apartment and condominium property owners will be examined to validate
accuracy.
The audit focused on the following general objectives:
• To ensure that all sand tax transactions for fiscal year 2017/18 were properly calculated
and recorded in the City Financial System.
• To ensure that the City's Finance Department properly remitted the sand tax payments
due to the State of Florida Department of Environmental Protection.
• To ensure that the Finance Department properly billed fiscal year 2018/19 upland, non-
upland and beachfront concession fees to all applicable hotels, apartments and
condominiums.
• To determine whether deficiencies noted in the prior audit have been corrected.
• Other audit procedures as deemed necessary.
The audit methodology included the following:
• Review of applicable provisions of agreements, and City policies and procedures;
• Interviews and inquiries of staff to gain an understanding of the internal controls, assess
control risk, and plan audit procedures;
• Performance of substantive testing consistent with the audit objectives, including but not
limited to examination of applicable transactions and records;
• Conclusions based on the results of testing, made corresponding recommendations, and
obtained auditee responses and corrective action plans; and
• Other audit procedures as deemed necessary.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
1. Finding: The State of Florida was Inadvertently Overpaid by $2,363.94 in Sand Tax During
the Audit Period due to Incorrect General Ledger Entries
Upon collection of any monies related to the use of State of Florida owned beachfront
property, the City's Finance Department is tasked with calculating and remitting sand tax
payments to the Florida Department of Environmental Protection based on the entries into
general ledger account 601-7012-229068 by the applicable departments.
For example, the Tourism and Culture Department's (TCD) Special Events Division is
responsible for creating invoices in the City's Financial System that details the general
ledger account number distribution for special event permits and any vehicle beach access
passes issued related to the event. The event organizers must meet specified criteria and
Page 3 of22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
remit various fees to stage these organized, usually one-time only events held on the
beach. Vehicle beach access (VBA) passes are also available at a daily fee of $150 per
vehicle for event organizers that park essential vehicles on the City beach or sand areas.
Since the amount owed is known in advance, TCD creates City invoices billing the event
organizers accordingly.
However, in cases where companies request additional VBA passes, TCD staff will often
manually prepare pre-numbered Miscellaneous Cash Receipt forms (MCRs) to process
monies received. The MCR provides such pertinent information as the payer's name,
address, reason for paying, the total paid, the general ledger account number distribution
for these monies, as well as the preparer's relevant information. This form accompanied
by the payment is then brought to the Central Cashier for processing and validation.
Meanwhile, the Finance Department's Licensing Section is responsible for creating
invoices in the City's Financial System that details the general ledger account number
distribution for all beachfront property billed through the business tax receipt process. City
Ordinance No. 2003 -3420 states that any hotel, apartment or condominium that operates
on the beachfront shall pay an upland fee ($15 per unit charge in the 2003/04 fiscal year
which has since been increased by 5% every other year rounded to the nearest dollar),
currently in the amount of $22 per unit for the 2017/18 fiscal year. In addition, the
maximum annual fee was increased from $10,000 to $15,000 per upland property as of
October 1, 2016 though the City Commission's adoption of Resolution No. 2016-29403.
·Lastly, the Office of Real Estate is responsible for creating invoices in the City's Financial
System that details the general ledger account number distribution for all beachfront
concessionaire monies billed in accordance with their respective contractual agreements
with the City.
Office of the Inspector General (OIG) staff reviewed all sand tax transactions processed
for the 2017/18 fiscal year to confirm that they were properly calculated, accurately
recorded in the City's Financial System and timely remitted to the State of Florida's
Department of Environmental Protection. Testing determined that the State of Florida was
inadvertently overpaid by a total of $2,363.94 as shown in Exhibit A located at the end of
this audit report. Staff from the TCD, Office of Real Estate and the Finance Department
reviewed these incorrect entries and agreed to make the appropriate adjusting journal
entries. A summary of the differences noted by department/division and the
corresponding reasons are as follows:
• Four (4) instances in which the TCD incorrectly recorded general ledger
distributions, resulting in an overpayment of $375.00.
• One (1) instance in which the Office of Real Estate incorrectly applied sand tax to
a transaction that did not occur on State beachfront property, resulting in an
overpayment of $2,097.70.
• One ( 1) instance in which the Office of Real Estate incorrectly billed and applied
the payment in the City's Financial System, resulting in an underpayment of
($226.58).
• One (1) instance in which the Finance Department duplicated a transaction not
subject to sand tax, resulting in an overpayment of $75.00.
Page 4 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
• One ( 1) instance in which the Finance Department's Licensing Section incorrectly
applied sand tax to a customer not subject to sand tax, resulting in an overpayment
of $14.38.
• Two (2) instances in which the Finance Department incorrectly calculated the
amount to be paid to the State, resulting in a total underpayment of ($1.06).
• Seven (7) instances in which the Finance Department incorrectly billed upland
property owners due to a rounding error in the EnerGov System (the City's
licensing and permitting system), resulting in an overpayment of $29.50.
Recommendation(s):
After completing the necessary adjusting journal entries, the $2,363.94 in incorrectly
calculated sand tax payments should be deducted from the City's next quarterly payment
to the State of Florida. Going forward, all general ledger distributions on City invoices and
Miscellaneous Cash Receipts should be closely reviewed for accuracy before being
processed by the originating department/division.
Management Response (Finance Department):
The general ledger was corrected by August 2019 by posting of entries totaling $2,363.94,
comprised of the following transactions:
• Tourism and Culture Department -$375.00 overpayment due to incorrectly
identified general ledger account. Minimized risk of reoccurrence due to the
transition from MCR to Munis (no longer utilizing hand-written notes to provide
accounting instructions).
• Office of Real Estate-$1,871.12 overpayment due to incorrect application of sand
tax to a non-beach transaction for $2,097.70 and incorrect billing and application
of a payment to the sand tax general ledger account for ($226.58)
• Finance Department -$117.82 total overpayments
o The next quarterly payment to the State will be reduced by $14.38 due to
the inappropriate application of sand tax to a non-beach related
transaction. The amount will be reclassed from sand tax to fire revenue in
the general ledger in September 2019.
o Total duplicated transactions, $75.00 were corrected in the general ledger
in May 2019. Analysis is now performed by the unique identifier, the receipt
number, thereby minimizing future duplication errors.
o Finance is working with EnerGov Support to resolve the systematic
rounding errors in the rate table, which will eliminate the need for future
manual corrections. Until the EnerGov Support team finds a solution for
the systematic rounding errors, Finance recommends a rounding threshold
of $30 per business tax receipt (BTR). The affected BTRs fall within the
threshold; therefore, the rounding variances will not be addressed. The
rounding threshold is being codified in departmental procedural
instructions.
o Overpayments on customer accounts ($1.06) were refunded to the
customer on 09/06/2019. Future customer overpayments will be promptly
refunded to customers thus ensuring the sand tax payable general ledger
account accurately reflects the amount payable to the State.
Page 5 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30,2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
The Acting Revenue Manager and Financial Analyst Ill are responsible for authorizing via
the workflow approval process the quarterly payments to the State of Florida thus ensuring
the next quarterly payment is reduced by $2,363.94.
Management Response (Office of Real Estate):
The Office of Real Estate agrees with the OIG that $2,097.70 was inadvertently applied to
the State sand tax account instead of a sales tax account. The Office of Real Estate
agrees with the OIG that Penrod Brothers was billed incorrectly for the month of June
2018, resulting in an underpayment of State sand tax in the amount of $226.58.
Implementation Date (Office of Real Estate):
Completed -the Office of Real Estate submitted the necessary journal entries to adjust
the $226.58 and $2,097.70 on 09/09/19.
Management Response (Tourism and Culture Department):
Prior to the internal audit, the Tourism and Culture Department conducted its own analysis,
as part of its internal financial processes which happen twice a year and submitted Journal
Entries to the Finance Department to correct the discrepancies regarding the four
(4) instances found in the General Ledger as part of the Department's internal
audit. The Department submitted Journal Entries ( 1 0-030 and 06-1 05) on May 14, 2019
and May 28, 2019. Furthermore, the Tourism and Culture Department transitioned from
MCR's to Munis invoicing, which will help to prevent these incorrect handwritten GL
accounts on MCR's.
Implementation Date (Tourism and Culture Department): July 2019
2. Finding: Beachfront Upland Fees of $7,051.00 were Not Properly Billed Based on a
Comparison with the Signed Beachfront Concession Letter Agreements
Any hotel, apartment or condominium that collects monies from some combination of
equipment rentals, food/beverage sales and/or water sports rentals occurring on the
beachfront during the 2018/19 fiscal year was to be billed upland fees at $22 per unit in
accordance with City Ordinance No. 2003-3420 ($15 per unit charge in the 2003/04 fiscal
year which has been increased by 5% rounded to the nearest dollar every two years since)
in addition to their other pertinent annual charges.
A maximum charge of $15,000 per upland property was in effect for each affected location
from October 1, 2016 due to the City Commission's adoption of Resolution No. 2016-
29403. Only three properties (the Loews Hotel, The One Hotel and Condo and the
Fontainebleau Hilton Resort) currently have more than 681 (682 x $22 > $15,000) units
and were charged the $15,000 upland fee maximum during the 2018/19 fiscal year.
Furthermore, Section 3(c) of the Third Amended and Re-stated Rules and Regulations for
Beachfront Concession Operation states "In the event that the concession area is utilized
by any additional property or properties (non-upland), other than the upland property, the
upland property owner must receive prior written approval from the City and shall pay an
upland fee, per property, based on the number of units contained in the upland
concessions utilized by multiple properties. There shall be no maximum upland fee for
beachfront concessions utilized by multiple properties or for two or more beachfront
Page 6 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30,2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
concessions held by a concessionaire." This section was created as the Office of Real
Estate became aware that some non-upland fee properties were negotiating agreements
with upland fee properties so their residents can use the beach amenities of upland
properties.
The Office of Real Estate prepared and mailed letter agreements to all known properties
authorized to operate beachfront concession(s) that are subject to the upland fee. These
letter agreements provide the framework for permitted beachfront concessions which
include the number of upland units, the amount of upland and beachfront concession
permit fees due, etc. As these letter agreements serve as the basis for billing these
concessionaires' annual business tax receipts, which are typically mailed annually in
July/August, it is important that the Office of Real Estate timely provide this information to
the Finance Department's Licensing Section.
The Office of Real Estate submitted a master summary schedule of these fees for each
property location to the Licensing Section on June 29, 2018 so that the corresponding
business tax receipts could be accurately billed. This master summary schedule included
33 non-upland properties that had negotiated agreements with upland fee properties.
Subsequent revisions were sent via email to the Licensing Section on July 13, 2018 and
August 7, 2018.
OIG staff performed a comparison of the upland fees owed according to the master
summary schedule provided by the Office of Real Estate on May 17, 2019 and those
amounts billed in the City's EnerGov System (the City's licensing and permitting system)
whereby ten (1 0) transactions were found to not have been accurately billed. Exhibit B
located at the end of this audit report provides a detailed listing of these ten (1 0)
differences totaling $7,051.00.
Of these ten (1 0) differences, the Shelborne Hotel (non-upland Mondrian South Beach
Hotel) totaling $6,072.00 was not included on the master summary schedule provided to
the Licensing Section by the Office of Real Estate. Therefore, this property would not
have been billed correctly.
As part of our follow-up to determine whether the Finance Department had corrected the
deficiencies noted during last year's audit regarding upland and non-upland fees, it was
found that one (1) beachfront property overbilled by $1,320.00 during the 2017/18 fiscal
year still has not received a credit. Also, it was noted that two (2) properties were billed a
total of $26,166.00 but no monies have been paid to date by the Versailles Hotel
($23,016.00) for the 2014/15, 2015/16, 2016/17 and 2017/18 fiscal years and Triton
Tower-AC Hotel ($3, 150.00) for the 2017/18 fiscal year.
Recommendation( s ):
The Finance Department's Licensing Section should promptly correct the ten (1 0) upland
fee owners' business tax receipts listed in Exhibit B. Going forward, the Office of Real
Estate should email only the adjustments to the master summary schedule to the Finance
Department to avoid confusion so that only those identified can be revised. This practice
should also help ensure that the property owner is billed correctly and that the stated
amounts reconcile correctly with those amounts billed in the City's Financial System.
Page 7 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30,2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
Management Response (Finance Department):
• Finance Department-($7,051) total under billings
o The Licensing Section will promptly bill Shelborne Hotel and Four Points
Sheraton Hotel $7,172, collectively for the under the billings. Going
forward, the Office of Real Estate will only communicate changes to the
master schedule to ensure clarify in billing revisions.
o Finance is working with EnerGov Support to resolve the systematic
rounding errors in the rate table ($121), which will eliminate the need for
future manual corrections. Until the EnerGov Support team finds a solution
for the systematic rounding errors, Finance recommends a rounding
threshold of $30 (over/under) per BTR. The affected BTRs fall within the
threshold; therefore, the rounding variances will not be addressed. The
rounding threshold is being codified in departmental procedural
instructions.
o Collection efforts for $26,166 in uncollected monies for the 2014 -2018
periods have begun. In addition, a lien search (which is being attached to
the appropriate properties) identifies the outstanding balances associated
with the affected portfolios, which will further collections efforts in the event
the portfolios are made available for sale.
o The 2017/18 overbilling for $1,320 to The Mimosa Hotel will be either
refunded or applied to another outstanding balance in September 2019.
Management Response (Office of Real Estate):
Non-Upland Mondrian was not included on the master summary and has since been
added as a Non-Upland property to Shelborne Hotel.
Implementation Date (Office of Real Estate):
The above adjustments have been completed by the Finance Department. Going forward,
the Office of Real Estate will continue providing the master summary in a timely manner
and will provide necessary revisions with a detailed description.
3. Finding: Beachfront Concession Permit Fees Were Incorrectly Charged Resulting in One
(1) Entity Being Over Billed by a Total of $810.00
Hotels, apartments and condominiums subject to upland fees along with beachfront
concessionaires will also owe some combination of concession fees for equipment,
food/beverage and/or water sports. The cost of each applicable beachfront concession
fee permit for the 2018/19 fiscal year was $810.00. These fees are billed through the
City's annual business tax receipt process similar to upland fees.
Signed beachfront agreement letters prepared by the Office of Real Estate authorize the
entity to operate a beachfront concession and among other terms, it includes the
corresponding amount of fees owed. All the individual fees owed are summarized for
each property in the master summary schedule which is furnished to the Finance
Department's Licensing Section to help ensure the accuracy of all billed transactions.
Page 8 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
OIG staff performed a comparison of the master summary schedule's entries with the City
Financial System's 2018/19 fiscal year beachfront concession fees billed and found that
Shore Club Property Owners LLC was overbilled by $810.00.
As part of our follow-up testing to determine whether the Finance Department's Licensing
Section had corrected the deficiencies noted during last year's internal audit regarding
concession fees, it was found that three (3) beachfront properties were overbilled by a
total of $2,430.00 during the 2017/18 fiscal year still have not received a credit (the
Sagamore $810.00, The Mimosa Hotel $810.00 and the Triton Tower Condominium
$81 0.00). Also, it was noted that two (2) properties were billed but no monies have been
remitted to date. As a result, $6,211.00 is due to the City from these two (2) property
owners which is comprised of $6,172.00 owed by the Versailles Hotel and $39.00 by the
Ritz Carlton South Beach.
Recommendation( s ):
The Finance Department's Licensing Section should correct the two (2) transactions
related to beachfront concession fees listed in Exhibit C and the identified transactions
from the prior year audit. In the future, the Finance Department should ensure that the
timely furnished master summary schedule's results agree with the amounts billed in the
City's Financial System. Any noted differences should be promptly investigated and
corrected if necessary.
Management Response (Finance Department):
• Finance Department-$203 in over billings
o Shore Cub Property Owners LLC under billing of $810 will be adjusted via
the 2019/20 annual business tax receipt billing.
o The City opened a ticket with Tyler Technologies to address the
inconsistency with the La Tour Condominium invoice amount at the time of
issuance and payment remittance.
o 2017/18 overbillings for $2,430 (The Mimosa Hotel, Triton Tower
Condominium and The Sagamore for $810, each) will be either refunded
or applied to other outstanding balances in September 2019.
o Collection efforts for $6,211 in uncollected monies for the 2017/18 period
have begun. In addition, a lien search (which is being attached to the
appropriate properties) identifies the outstanding balances associated with
the affected portfolios, which will further collections efforts in the event the
portfolios are made available for sale.
4. Finding: The Tested Boucher Brothers Inc.'s 21st & 46th Street Concession Payments
were Not Properly Distributed among the City's General Ledger Accounts by the Office of
Real Estate and they were Not Calculated in Accordance with Section 4.2 of the
Concession Agreement's Terms, Resulting in a $72,151.72 (Excluding State Sales Tax)
Underbilling by the City of Miami Beach and a $13,470.94 Sand Tax Underpayment to the
State of Florida's Department of Environmental Protection
The Boucher Brothers Inc.'s 21 51 and 46 1h Street Public Beachfront Concession Agreement
(Agreement) states that the concessionaire shall pay to the City a minimum guarantee
annual concession fee (MG), in the amount of $122,000 for food and beverage sales,
beach equipment rentals, and the sale of beach-related sundries/skincare products. Fifty
Page 9 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
percent (50%) of the MG for each Agreement year shall be due and payable to the City
on January 1st of each such year during the term, and the remaining fifty percent (50%) of
the MG for that Agreement year shall be due and payable to the City on July 1st of each
such year during the term for the right to operate the concessions at the designated 21st
and 46th Street locations.
In addition, Section 4.2 of the Agreement states that the concessionaire (Boucher Brothers
Inc.) shall pay to the City the greater of ($122,000) the minimum guaranteed, or if annual
gross receipts exceed $600,000, twenty-five percent (25%) of ALL the gross receipts.
This true-up provision is to be calculated based on the concessionaire's provided revenue
reports in the following March.
As the actual amount of sales occurring on the beach is not known when the MG payments
are received, the Office of Real Estate estimates the portion of sales subject to sand tax
based primarily on projected sales. When documentation is subsequently received
reporting the actual sales, separated by sand and building revenue among other
categories, the Office of Real Estate is to re-calculate the amount of sand tax due and to
make the necessary adjustments.
Given this information, testing was conducted on Boucher Brothers Inc.'s concession
payments remitted to the City whereby the following deficiencies were noted:
Agreement Year 2 covering January 1 I 2017 through December 31 I 2017
As summarized in the table below, it was confirmed that the estimated percentage was
consistently applied in the Boucher Brothers Inc.'s sand tax calculations during the
2017/18 fiscal year audit. However, the impacted general ledger accounts, including sand
tax, were not adjusted to actuals upon receipt of their revenue reports in March 2018 by
the Office of Real Estate. Subsequent calculations determined that the sand tax general
ledger account was understated, and the State of Florida's Department of Environmental
Protection incorrectly did not receive $2,163.38 in sand tax.
In addition, under the interpretation of the Office of Real Estate given to Section 4.2's true-
up provision, Boucher Brothers Inc. was charged as follows: $122,000 MG + 25% of all
gross receipts AFTER $600,000. However, this practice differs from both the OIG and the
City Attorney's Office interpretation, which is that 25% of ALL gross receipts received
during the specified Agreement year (going back to the first dollar earned) are to be paid
to the City once the $600,000 threshold is surpassed. It is the position of the OIG that the
plain language, "all gross receipts", rather than, "all gross receipts in excess of $600,000"
compels this result.
Therefore, OIG staff re-calculated the 2017 Agreement year's true-up due in March 2018
and determined that the Office of Real Estate did not bill Boucher Brothers Inc. by a total
of $38,999.44 {($1 ,026,785.92 gross receipts x 25%)-$217,697.04 payments made} plus
the applicable sales tax. If the City collects the aforementioned $38,999.44 (plus sales
tax), a total of $7,951.85 {($38,999.44 x 81.56% (percentage of beach sales-sand
revenues) x 25% sand tax)} will be due to the State of Florida.
Page 10 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30 , 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland , Non-Upland and Beachfront Concession
Fees)
December 5, 2019
Amount Paid
by
Concessionaire
1st Minimum Gurarantee Payment $ 61 ,000 .00
2nd Minimum Gurarantee Payment $ 6 1,000.00
(Rece i pt #116687) True-up 25% $ 95 ,697.04
Unpaid additional True-up after lA
Percentage
of Sand Amount
Revenues Subject to
(PBC) Sand Tax
8 1.56% $ 49,750 .72
8 1.56% $ 49,750 .72
8 1.56% $ 78,049.13
Sand Tax
Due Based
on Actuals
$ 12,437.68
$ 12,437.68
$ 19,5 12.28
Sand Tax
Paid to
State
$ 9,150.00
$ 9,150 .00
$23,924.26
Difference
Over/(Under)
$ (3,28 7.68)
$ (3,287.68)
$ 4,411 .98
Additional Due to State $ (2 ,163.38)
calculati on $ 38 ,999.44 8 1.56% $ 3 1,807.38 $ 7,951.85 $ $ (7,951.85) ••
256 ,696.48 209 ,357.96 $ 52 ,339 .49 $42,224.26 $ (10,115 .23)
**Not due to State until City Collects under-billed true up amount
Agreement Year 3 covering January 1, 2018 through December 31, 2018
Similar to agreement year 2, it was confirmed that the Office of Real Estate consistently
applied the estimated perce ntage in the Boucher Brothers Inc.'s sand tax calculation s
during the 2018/19 f iscal year audit. However, the impacted general ledger accounts ,
including sand tax, were not adjusted to actuals upon receipt of thei r revenue reports in
March 2019 by the Office of Real Estate. Subsequent ca lculations determined t hat the
sand tax general ledger account was understated , and the State of Florida 's Department
of Environmental Pro tection d id not receive $2 ,1 57 .56 due to the State in sand tax as
shown in the table below .
It was determined that the concessionaire 's true-up calculations for agreement year 3 and
due in March 2019 followed the same approach as for ag reement year 2. As a result , the
Office of Real Estate did not bill Boucher Brothers Inc. by a total of $33 ,152.28 plus the
applicable sales tax {($1 ,008 ,950 .38 gross receipts x 25%) -$219 ,085.32 payments
made} in accordance with the OIG and the City Attorney's Office interpretation of Section
4.2. If the City collects the aforementioned $33,152 .28 (plus sales tax), a total of
$6 ,768.43 {($33, 152.28 (under billed amount) x 81 .66% (percentage of beach sales-sand
revenues) x 25%)} of sand tax will be owed to the State of Flo rida.
Pe rcentage
Amount Pa id of Sa nd Amount Sa nd Ta x
by Revenues Subject to Due Based Sand Ta x Diffe rence
Concessiona i re (PBC) Sand Tax on Actuals Paid to State Over/(Under)
1st Mi nimum Gu rarantee Payment $ 6 1,000.00 81.66% $ 49,8 15.52 12,453 .88 9,150 .00 (3,303.88)
2nd Minimum Gurarantee Payment $ 6 1,000 .00 81.66% $ 49,815.52 12,453.88 9,150 .00 (3,303 .88)
(Receipt #180579) True-up 25 % $ 97,085 .32 81.66% $ 79,284.52 19,821 .13 24,271 .33 4,450.2 0
Additional Due to State (2, 157.56)
Unpa id add itional True -u p after lA
cal c ula tion $ 33,152.28 81.66% $ 27,073.74 6,768.43 (6, 768 .43) -
$ 252,237.60 205,989.29 51,497 .32 42,57 1.33 (8,925.99)
-Not due to State until City Collects under-billed true up amount
During review of the MG payments for the 2017/18 fiscal year, OIG staff noted that the
MG payment remitted by the Boucher Brothers Inc. on December 31 , 2018 (applicable to
the agreement year 3 -rece ipt #170795) was incorrectly distributed as it omitted the sand
tax gene ral ledg er account resulting in a n und e rp aym e nt to th e State of Florid a's
Department of Environmental Protection of $9, 150.00.
Page 11 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
Follow-up of Prior Audit Results
As part of our follow-up testing to determine whether the Office of Real Estate had
corrected the deficiencies noted during last year's audit regarding adjustments to the sand
tax projected payments and therefore paid to the State, it was found that the adjusting
journal entry was not completed by the Office of Real Estate. As a result, $7,860.36 is
due to the State of Florida's Department of Environmental Protection.
Recommendation( s ):
The Office of Real Estate should promptly invoice the Boucher Brother Inc. for the
difference identified in the true-up calculations of $72,151.72 plus any applicable state
sales tax ($38,999.44 for the Agreement year 2 + $33,152.28 for the Agreement year 3).
If subsequently collected, the City should remit the applicable sand tax due $7,951.85
(Agreement year 2) + $6,768.43 (Agreement year 3) to the State of Florida's Department
of Environmental Protection. This action would be consistent with the plain language of
Section 4.2 in the existing agreement.
The City should also promptly remit the $13,470.94 plus sales tax ($2, 163.38 from the
2017 Agreement year 2 true-up + $2,157.56 from the 2018 Agreement year 3 true-up +
$9,150.00 MG receipt #170795) in addition to the $7,860.36 from last year's audit report,
which have not been paid to date.
Going forward, the Office of Real Estate should ensure that the true-up or the adjustment
of the estimated revenues to actuals is properly calculated in accordance with the terms
of the Agreement and ensure that any sand tax due to the State of Florida is remitted
timely.
Management Response (Office of Real Estate):
The true-up amount of $72,151.72 calculated by OIG staff consists of 1) $56,000 based
on the interpretation of Section 4.2 of the Agreement, 2) $14,953.27 based on
displacement fees and 3) $1,198.45 which was applied by concessionaire as an
accounting adjustment. Regarding item 1, the City Manager's Office agrees with the
interpretation by the Office of Real Estate regarding Section 4.2 of the Agreement in that
the amount paid by concessionaire shall be a $122,000 Minimum Guarantee+ 25% of all
gross receipts after $600,000. Otherwise, using OIG's interpretation, concessionaire
could actually increase gross sales while at the same time earning less revenue. For
example, if concessionaire generated $600,000 in gross sales, they would owe the City
$122,000 (the minimum guarantee) in concession fees and retain $478,000. However, if
concessionaire increased its gross sales by only $1.00, to $600,001, it would owe the City
$150,000 (25%) in concession fees and only retain $450,000. Thus, a $1,00 increase in
sales would actually cost the concessionaire $28,000 in additional fees to the City. The
Office of Real Estate and the City Manager's Office believe the intent of Section 4.2 of the
Agreement is to provide an incentive for the concessionaire to increase gross sales while
allowing both the concessionaire and the City to share in the increased revenue.
Accordingly, the $56,000 ($28,000 times two years) is not owed from concessionaire.
Regarding item 2, even though the displacement fees are to be included as gross receipts,
concessionaire pays the City its portion (25%) of the displacement fees separately from
the true-up payment. For Agreement years 2017 and 2018, concessionaire owed
$14,953.27 in displacement fees but only paid $8,953.27. The Office of Real Estate billed
Page 12 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
concessionaire for the $6,000 shortage and the amount was paid in full in September 2019
with the corresponding amount being applied to sand tax. Regarding item 3, the Office of
Real Estate agrees with OIG that the $1,198.45 accounting adjustment should be
disallowed. The Office of Real Estate billed concessionaire accordingly and, even though
concessionaire disagreed with the City's position, they paid the amount in full in
September 2019.
Because the sand tax payments are made in advance based on estimated revenues
subject to sand tax, the actual amount of sand tax due is not known until the
concessionaire submits the annual revenue reports at year end. Adjustments will always
be required to true-up the sand tax payments based on actual revenues. The Office of
Real Estate has made the necessary journal entries to adjust the $13,4 70.94 ($2, 163.38
from the 2017 Agreement year true-up + $2,157.56 from the 2018 Agreement year true-
up + $9,150.00 MG receipt #170795) payment to the State. Additionally, the Office of
Real Estate has made the necessary journal entry for the 2017 audit in the amount of
$7,860.36. Going forward, sand tax adjustments will be made upon receipt and review of
the year-end revenue reports.
Implementation Date (Office of Real Estate):
The Office of Real Estate will work with Legal to clarify Section 4.2 of the Agreement and
will submit an amendment to the City Commission for approval. The displacement fees
shortage and the accounting adjustment were paid by concessionaire in September 2019
with the corresponding amounts being applied to sand tax. The necessary journal entries
to adjust the true-up payments were made in September 2019.
OIG Audit Observation:
The Boucher Brothers Inc. should be recognized for increasing annual revenues from
$510,708.03 for Agreement year 1 which falls below the designated $600,000 threshold
for which no true-up monies are due to $1,026,785.92 and $1,008,950.38 for the
Agreement years 2 and 3 respectively which were significantly above the threshold.
Consequently, the Office of Real Estate concerns about de-incentivizing the
concessionaire to attain and report gross revenues exceeding $600,000 are not relevant
to the application of the clear language in the agreement to the revenues in question.
Enforcement of the existing language would be in the City's financial interests. If the
language does not accurately reflect the mutual intent of the parties, it must be promptly
corrected.
In the event that the City elects to adopt the interpretation of Section 4.2 favored by the
Office of Real Estate, OIG staff proposes that the MG should be increased exponentially
each agreement year as the $600,000 designated threshold is fixed and is set too low.
Consequently, the City has had to wait until the following March to collect the balance of
the monies owed in the true-up payment.
Lastly, it should also be noted that the Office of Real Estate's accounting adjustments
failed to include the applicable state sales tax ($72, 151.72 + sales tax $2,729.96 year
2017 + $2,320.66 year 2018 = $77,202.34) and should be promptly corrected.
Page 13 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
5. Finding: Penrod Brothers Inc. Incorrectly Reported Food & Beverage Sales to the City
Resulting in a Net $113.56 Overpayment to the State of Florida's Department of
Environmental Protection
Penrod Brothers Inc. submitted a monthly revenues report (Rent Report) to the City of
Miami Beach that included their food and beverage sales and their sales occurring on the
beach among others. The Office of Real Estate used this report to invoice Penrod
Brothers Inc. each month in accordance with their executed agreement.
As part of the audit process, OIG staff noted that the reported December 2017 food and
beverage revenues were identical to those in January 2018, and similarly the June 2018
reported revenues equaled July 2018. As a result, the supporting documentation was
requested from the concessionaire whereby it was determined that the sand tax general
ledger account was overstated, and the State of Florida's Department of Environmental
Protection was overpaid by a net of $113.56.
Recommendation(s ):
After completing the necessary adjusting journal entries, the $113.56 in incorrectly
calculated sand tax payments should be deducted from the City's next quarterly payment
to the State of Florida's Department of Environmental Protection. Going forward, Office
of Real Estate staff should request the supporting documentation from Penrod Brothers
Inc. to validate the amounts included on the Rent Report to help prevent future mistakes
from occurring.
Management Response (Office of Real Estate):
Prior to completion of the internal audit, the Office of Real Estate had identified the
duplicative reporting and had requested the corrected sales reports from Penrod Brothers
Inc. on June 6, 2019. The Office of Real Estate agrees with the OIG that supporting
documentation should be provided with the Rent Report in order to ensure accurate billing.
Implementation Date (Office of Real Estate):
The Office of Real Estate submitted the necessary journal entry to adjust the sand tax
amount of $113.56 on 09/09/19. Additionally, the Office of Real Estate requested that the
supporting documentation be provided with the monthly payments and Penrod Brothers
Inc. has been including such documentation since July 2019.
6. Finding: The Office of Real Estate did not Include Sand Tax on the Additional Lump-Sum
Amount Remitted by Penrod Brothers Inc. Needed to Meet the Minimum Guarantee
Resulting in a $555.25 Underpayment to the State of Florida's Department of
Environmental Protection
Penrod Brothers Inc.'s Beachfront Concession Agreement (Agreement) states that the
concessionaire shall pay to the City a minimum guaranteed annual concession fee (MG)
equal to a percentage of their gross receipts. The MG shall be payable as monthly
percentage (6.5%) rent to the City by the fifteenth day of each month for the preceding
month. The Office of Real Estate should review the concessionaire's annual gross
receipts and re-calculate the MG every year. If the concessionaire does not meet the MG
amount, then they shall also pay an additional lump-sum amount to the City equal to the
difference between the percentage of gross receipts amount and the MG amount.
Page 14 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
As part of the audit process, OIG staff noticed that upon reviewing the provided Written
Annual Statement of Gross Receipts for the period from May 1, 2017 -April 30, 2018 that
Penrod Brothers Inc.'s sales were short of the MG by $70,165.81. Consequently, Penrod
Brothers Inc. paid an additional lump sum amount in adherence with Article 4.1.2 of the
Agreement. However, the Office of Real Estate did not apply sand tax to that payment
(receipt #140436), so we calculated the percentage of sales on the beach for that period
and applied that percentage to the total lump-sum amount which concluded that the State
of Florida's Department of Environmental Protection was underpaid by $555.25 in sand
tax ($70, 165.81 x 3.17% beachfront sales x 25% sand tax percentage).
Recommendation( s ):
After completing the necessary adjusting journal entry, the $555.25 should be included in
the City's next quarterly sand tax payment to the State of Florida's Department of
Environmental Protection. Going forward, the Office of Real Estate should re-calculate
the percentage of beach sales for each period and if an additional lump sum payment is
due, then they should use the percentage of applicable beach sales to determine the
amount of sand tax to be remitted.
Management Response (Office of Real Estate):
The Office of Real Estate agrees with the OIG and has submitted the necessary journal
entry to correct the sand tax due to the State. Going forward, in the event Penrod Brothers
Inc. does not reach the minimum guaranteed annual concession fee, upon receipt of the
lump sum true-up payment, the Office of Real Estate will calculate the sand tax due to the
State based on the percentage of beach sales for the applicable period.
Implementation Date (Office of Real Estate):
The Office of Real Estate submitted the necessary journal entry to adjust the sand tax
amount of $555.25 on 09/09/19.
EXIT CONFERENCE
An exit conference was held in the Finance Department's conference room on August 20, 2019.
Participants included Manny Marquez (Assistant Finance Director), Sasha Gonzalez (Customer
Services Manager), Allison Williams (Deputy Finance Director), Evelyn Giles (Revenue Manager),
Tonda Shaw (Finance Analyst Ill), Cheryl Perez, (Finance Analyst 1 ), Mark Milisits (Office of Real
Estate Division Director), Heather Shaw (Assistant Director Tourism & Cultural), Linette Nodarse
(Special Project Coordinator), Geraldine Toussaint (Special Event Administrator), Veronica
Hennig (Film Liaison), John Ripple (Beach Maintenance Director), Gabriela Alfonsin
(Administrative Officer), Bryan Sebastian (Field Monitor), Mark Coolidge (Interim Internal Auditor)
and Jessica Romero (Auditor). Management responses were solicited and included above. All
parties agreed as to the contents of this report.
F:\OBPI\$AUD\INTERNAL AUDIT FILES\DOC18-19\REPORTS-FINAL\BEACHFRONT 2018 CITY AUDIT REPORT 12-5-19.docx
Page 15 of 22
State Beachfront Management Agreement (#3595)
October 1, 2017 through September 30, 2018 (Sand Tax Payments)
October 1, 2018 through September 30, 2019 (Upland, Non-Upland and Beachfront Concession
Fees)
December 5, 2019
cc: Jimmy Morales, City Manager
Mark Taxis, Assistant City Manager
Susanne Torriente, Assistant City Manager
Matt Kenny, Tourism and Culture Department Director
Bo Martinez, Economic Development Department Director
Mark Milisits, Division Director, Office of Real Estate
John Woodruff, Chief Financial Officer
Audit conducted by: Jessica Romero Losada, Auditor
Audit reviewed by: Mark D. Coolidge, CPA, CIA
Interim Internal Auditor
Page 16 of 22
SCHEDULE OF FEES COLLECTED
BEACH FRONT MANAGEMENT AGREEMENT
FISCAL YEAR 2017/18
EXHIBIT A
VEHICLE
BEACH BEACH SPECIAL
UPLAND CONCESSION ACCESS EVENTS TOTAL OWED
TOTAL 25%DUE 25oyq DUE 25%DUE 2:i%DUE 25%DUE REMITTED TO
ENTITY FEES* STATE STATE STATE STATE STATE TO STATE STATE
1500 OCEAN DRIVE CONDO $4,928.00 $1,232.00 $0.00 $0.00 $0.00 $1,232.00 $1,232.00 $0.00
2 2377 COLLINS RESORT $421.88 $105.47 $0.00 $0.00 $0.00 $105.47 $105.47 $0.00
3 24-7 CREATIVE $300.00 $0.00 $0.00 $75.00 $0.00 $75.00 $75.00 $0.00
4 3201 HOTEL LLC $32,821.48 $1,001.00 $0.00 $975.00 $6,229.37 $8,205.37 $8,204.31 ($1.06)
5 360 DESTINATION GROUP $8,423.76 $0.00 $0.00 $375.00 $1,730.94 $2,105.94 $2,105.94 $0.00
6 ALEXANDER CONDOMINIUM $5,060.00 $1,265.00 $0.00 $0.00 $0.00 $1,265.00 $1,265.00 $0.00
7 AL TOPE FILMS CORP $300.00 $0.00 $0.00 $75.00 $0.00 $75.00 $75.00 $0.00
8 AQUA SOL $300.00 $0.00 $0.00 $75.00 $0.00 $75.00 $75.00 $0.00
9 ART FAIRS UNLIMITED LLC $24,161.76 $0.00 $0.00 $562.50 $5,477.94 $6,040.44 $6,040.44 $0.00
10 ATLANTIC VIEW PARTNER $2,926.00 $731.50 $0.00 $0.00 $0.00 $731.50 $731.50 $0.00
11 BEACH HOTEL ASSOCIATION $4,576.00 $1 '144.00 $0.00 $0.00 $0.00 $1,144.00 $1,144.00 $0.00
12 BOUCHER BROTHERS $6,978.52 $0.00 $0.00 $0.00 $1,744.63 $1,744.63 $1,744.63 $0.00
13 BROADER PRODUCTIONS $150.00 $0.00 $0.00 $37.50 $0.00 $37.50 $37.50 $0.00
14 CADILLAC HOTEL & BEACH CLUB $15,396.80 $3,849.20 $0.00 $0.00 $0.00 $3,849.20 $3,849.20 $0.00
15 CAPITOL SERVICES OF FLORIDA $8,043.76 $0.00 $0.00 $225.00 $1,785.94 $2,010.94 $2,010.94 $0.00
16 CARE RESOURCE $7,875.00 $0.00 $0.00 $0.00 $1,968.75 $1,968.75 $1,968.75 $0.00
17 CARRILLON HOTEL $24,940.00 $6,235.00 $0.00 $0.00 $0.00 $6,235.00 $6,242.25 $7.25
18 CASABLANCA CONDOMINIUM $12,672.00 $3,168.00 $0.00 $0.00 $0.00 $3,168.00 $3,168.00 $0.00
19 COMO TRAYMORE LLC $3,256.00 $814.00 $0.00 $0.00 $0.00 $814.00 $814.00 $0.00
20 CONTINENTAL EVENT & SPORTS MANAGEMENT $150.00 $0.00 $0.00 $37.50 $0.00 $37.50 $37.50 $0.00
21 CRYSTAL BEACH DEVELOPMENT $1,848.00 $462.00 $0.00 $0.00 $0.00 $462.00 $462.00 $0.00
22 DAYS INN ART DECO $3,212.00 $803.00 $0.00 $0.00 $0.00 $803.00 $803.00 $0.00
23 DECOPLAGE $27,500.00 $6,875.00 $0.00 $0.00 $0.00 $6,875.00 $6,875.00 $0.00
24 DIAMOND ENTERPRISES $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $14.38 $14.38
Page 17 of 22
VEHICLE
BEACH BEACH SPECIAL
UPLAND CONCESSION ACCESS EVENTS TOTAL OWED
TOTAL 25%DUE 25%DUE 25% DUE 25% DUE 25% DUE REMITTED TO
ENTITY FEES* STATE STATE STATE STATE STATE TO STATE STATE
25 DOUBLETREE SURFCOMBER $4,840.00 $1,210.00 $0.00 $0.00 $0.00 $1,210.00 $1,210.00 $0.00
26 EASTERN TV $150.00 $0.00 $0.00 $37.50 $0.00 $37.50 $37.50 $0.00
27 EDEN ROC LLP $13,882.00 $3,470.50 $0.00 $0.00 $0.00 $3,470.50 $3,470.50 $0.00
28 EDITION MANAGEMENT $6,468.00 $1,617.00 $0.00 $0.00 $0.00 $1,617.00 $1,617.00 $0.00
29 FIREBRAND EVENT PRODUCTIONS, LLC $1,800.00 $0.00 $0.00 $0.00 $450.00 $450.00 $450.00 $0.00
30 FONTAINEBLEAU FLORIDA $15,000.00 $3,750.00 $0.00 $0.00 $0.00 $3,750.00 $3,750.00 $0.00
31 FOUR POINTS BY ITT SHERATON $4,752.00 $1,188.00 $0.00 $0.00 $0.00 $1,188.00 $1,188.00 $0.00
32 GE PROJECTS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $150.00 $150.00
33 GRAND BEACH HOTEL $9,460.00 $2,365.00 $0.00 $0.00 $0.00 $2,365.00 $2,370.50 $5.50
34 GREENSPOON MARDER, P $5,610.00 $1,402.50 $0.00 $0.00 $0.00 $1,402.50 $1,402.50 $0.00
GREENSPOON MARDER, P (NON-UPLAND GALE SOUTH
35 BEACH) $14,344.00 $3,586.00 $0.00 $0.00 $0.00 $3,586.00 $3,586.00 $0.00
36 GREENSPOON MARDER, P (NON-UPLAND SACTUARY) $1,276.00 $319.00 $0.00 $0.00 $0.00 $319.00 $319.00 $0.00
37 HELLO FLORIDA DESTINATION MANAGEMENT $3,225.00 $0.00 $0.00 $75.00 $731.25 $806.25 $806.25 $0.00
38 HG PRODUCERS $450.00 $0.00 $0.00 $112.50 $0.00 $112.50 $112.50 $0.00
39 HORIZON PHOTO PRODUCTIONS $225.00 $0.00 $0.00 $56.25 $0.00 $56.25 $56.25 $0.00
40 HOTEL OPERATION $8,646.00 $2,161.50 $0.00 $0.00 $0.00 $2,161.50 $2,161.50 $0.00
41 JAW PRODUCTIONS $1,200.00 $0.00 $0.00 $300.00 $0.00 $300.00 $300.00 $0.00
42 KING RICHARD CONDO $1,144.00 $286.00 $0.00 $0.00 $0.00 $286.00 $286.00 $0.00
43 LA TOUR CONDOMINIUM $1,474.00 $368.50 $0.00 $0.00 $0.00 $368.50 $368.50 $0.00
44 LIFE TIME FITNESS ATHLETIC $12,261.00 $0.00 $0.00 $750.00 $2,315.25 $3,065.25 $3,065.25 $0.00
45 LOEWS MB HOTEL $30,000.00 $7,500.00 $0.00 $0.00 $0.00 $7,500.00 $7,500.00 $0.00
46 LOEWS MB HOTEL (Non-Upland Berkeley) $2,112.00 $528.00 $0.00 $0.00 $0.00 $528.00 $528.00 $0.00
47 LOEWS MB HOTEL (Non-Upland Hyatt Centric) $4,620.00 $1,155.00 $0.00 $0.00 $0.00 $1,155.00 $1,155.00 $0.00
48 LOGISTICS MANAGEMENT GROUP $450.00 $0.00 $0.00 $112.50 $0.00 $112.50 $112.50 $0.00
Page 18 of 22
VEHICLE
BEACH BEACH SPECIAL
UPLAND CONCESSION ACCESS EVENTS TOTAL OWED
TOTAL 25% DUE 25%DUE 25% DUE 25% DUE 25% DUE REMITTED TO
ENTITY FEES* STATE STATE STATE STATE STATE TO STATE STATE
49 MARRIOTT STANTON SOUTH BEACH $10,384.00 $2,596.00 $0.00 $0.00 $0.00 $2,596.00 $2,596.00 $0.00
50 MARSEILLES HOTEL $4,972.00 $1,243.00 $0.00 $0.00 $0.00 $1,243.00 $1,243.00 $0.00
51 MIAMI BEACH HOSPITALITY, LLC (DEAUVILLE BEACH RESORT) $11,880.00 $2,970.00 $0.00 $0.00 $0.00 $2,970.00 $2,970.00 $0.00
52 MIAMI BEACH RESORT & SPA $29,310.44 $7,327.61 $0.00 $0.00 $0.00 $7,327.61 $7,327.61 $0.00
53 MIAMI POLO, LLC $20,860.00 $0.00 $0.00 $337.50 $4,877.50 $5,215.00 $5,215.00 $0.00
54 MIAMI PRODUCTIONS SERVICES $450.00 $0.00 $0.00 $112.50 $0.00 $112.50 $112.50 $0.00
55 MJZ PRODUCTIONS $1,500.00 $0.00 $0.00 $375.00 $0.00 $375.00 $375.00 $0.00
56 MODEL VOLLEYBALL LLC $6,850.00 $0.00 $0.00 $225.00 $1,487.50 $1,712.50 $1,712.50 $0.00
57 MOMENTUM WORLDWIDE $5,237.52 $0.00 $0.00 $375.00 $934.38 $1,309.38 $1,309.38 $0.00
58 MOSAIC ON MIAMI BEACH $3,784.01 $946.00 $0.00 $0.00 $0.00 $946.00 $946.00 $0.00
59 N HOUSE PRODUCTIONS $2,100.00 $0.00 $0.00 $525.00 $0.00 $525.00 $525.00 $0.00
60 NAUTILUS SOUTH BEACH $15,543.00 $2,698.25 $0.00 $112.50 $1,075.00 $3,885.75 $3,885.75 $0.00
61 NEW NATIONAL LLC $7,040.00 $1,760.00 $0.00 $0.00 $0.00 $1,760.00 $1,760.00 $0.00
62 OCEAN HOUSE SOUTH BEACH $1,204.00 $301.00 $0.00 $0.00 $0.00 $301.00 $301.50 $0.50
63 OCEAN WALK ON SOBE $1,716.00 $429.00 $0.00 $0.00 $0.00 $429.00 $429.00 $0.00
64 ONE WASHINGTON AVE. CORPORATION $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $2,097.70 $2,097.70
65 PSTUDIOS $450.00 $0.00 $0.00 $112.50 $0.00 $112.50 $112.50 $0.00
66 PENROD BROTHERS INC. $59,961.88 $0.00 $14,915.47 $75.00 $0.00 $14,990.47 $14,763.89 ($226.58)
67 PRO ONE PRODUCTIONS $1,950.00 $0.00 $0.00 $487.50 $0.00 $487.50 $562.50 $75.00
68 RICHARD HALL $900.00 $0.00 $0.00 $225.00 $0.00 $225.00 $225.00 $0.00
69 RICHMOND HOTEL $2,354.00 $588.50 $0.00 $0.00 $0.00 $588.50 $588.50 $0.00
70 RIUTEL FLA $12,496.00 $3,124.00 $0.00 $0.00 $0.00 $3,124.00 $3,124.00 $0.00
71 ROYAL ATLANTIC CONDO $7,854.00 $1,963.50 $0.00 $0.00 $0.00 $1,963.50 $1,963.50 $0.00
72 ROYAL MANAGEMENT GROUP $1,100.00 $275.00 $0.00 $0.00 $0.00 $275.00 $275.00 $0.00
73 RP HOTEL HOLDING, LL $9,079.00 $2,269.75 $0.00 $0.00 $0.00 $2,269.75 $2,269.75 $0.00
74 RP/WG CABANA $10,164.00 $2,541.00 $0.00 $0.00 $0.00 $2,541.00 $2,541.00 $0.00
75 SAGAMORE MIAMI BEACH $3,978.00 $994.50 $0.00 $0.00 $0.00 $994.50 $994.50 $0.00
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VEHICLE
BEACH BEACH SPECIAL
UPLAND CONCESSION ACCESS EVENTS TOTAL OWED
TOTAL 25% DUE 25% DUE 25%DUE 25%DUE 25% DUE REMITTED TO
ENTITY FEES* STATE STATE STATE STATE STATE TO STATE STATE
76 SAVOY HOTEL PARTNERS (NON-UPLAND BENTLEY) $1 '113.00 $278.25 $0.00 $0.00 $0.00 $278.25 $278.25 $0.00
77 SAVOY HOTEL PARTNERS (NON-UPLAND ST. AGUSTINE) $528.00 $132.00 $0.00 $0.00 $0.00 $132.00 $132.00 $0.00
SAVOY HOTEL PARTNERS 67 Units+ Non-Upland Bentley 53
78 Units + Non-Upland The Julia Hotel 30 Units $3,300.00 $825.00 $0.00 $0.00 $0.00 $825.00 $825.00 $0.00
79 SCOPE ART FAIR INC. $35,051.24 $0.00 $0.00 $750.00 $8,012.81 $8,762.81 $8,762.81 $0.00
80 SELECT SERVICES $150.00 $0.00 $0.00 $37.50 $0.00 $37.50 $112.50 $75.00
81 SETAl HOTEL $3,872.00 $968.00 $0.00 $0.00 $0.00 $968.00 $968.00 $0.00
82 SHELBOURNE $5,610.00 $1,402.50 $0.00 $0.00 $0.00 $1,402.50 $1,402.50 $0.00
83 SHORE CLUB PROPERTY OWNERS LLC $14,300.00 $3,575.00 $0.00 $0.00 $0.00 $3,575.00 $3,575.00 $0.00
84 SLS SOUTH BEACH $6,160.00 $1,540.00 $0.00 $0.00 $0.00 $1,540.00 $1,540.00 $0.00
85 SLS SOUTH BEACH (NON-UPLAND -REDBURY) $1,496.00 $374.00 $0.00 $0.00 $0.00 $374.00 $374.00 $0.00
86 SOHO HOUSE BEACH HOUSE $6,253.00 $550.75 $0.00 $75.00 $937.50 $1,563.25 $1,563.25 $0.00
87 SOKOLOV LTD DBA BEST WESTERN $4,488.00 $1,122.00 $0.00 $0.00 $0.00 $1,122.00 $1 '122.00 $0.00
88 SOUTH BEACH HOSPITALITY LLC $40,000.00 $0.00 $10,000.00 $0.00 $0.00 $10,000.00 $10,000.00 $0.00
89 SOUTH SEAS HOTEL $5,148.00 $1,287.00 $0.00 $0.00 $0.00 $1,287.00 $1,287.00 $0.00
90 SPARKTACULAR $600.00 $0.00 $0.00 $150.00 $0.00 $150.00 $150.00 $0.00
91 STARBOARD CRUISE SERVICES $150.00 $0.00 $0.00 $37.50 $0.00 $37.50 $37.50 $0.00
92 SUPPLY AND DEMAND $450.00 $0.00 $0.00 $112.50 $0.00 $112.50 $112.50 $0.00
93 THE BATH CLUB $2,508.00 $627.00 $0.00 $0.00 $0.00 $627.00 $627.00 $0.00
94 THE BENTLEY BEACH HOTEL $4,796.00 $1 '199.00 $0.00 $0.00 $0.00 $1 '199.00 $1 '199.00 $0.00
95 THE BENTLEY BEACH HOTEL (Non-Upland Glass 120) $242.00 $60.50 $0.00 $0.00 $0.00 $60.50 $60.50 $0.00
96 THE BENTLEY BEACH HOTEL (Non-Upland One Ocean) $1,078.00 $269.50 $0.00 $0.00 $0.00 $269.50 $269.50 $0.00
97 THE CONFIDANTE $32,973.00 $8,243.25 $0.00 $0.00 $0.00 $8,243.25 $8,248.00 $4.75
98 THE PALM SOUTH BEACH $10,824.00 $2,706.00 $0.00 $0.00 $0.00 $2,706.00 $2,709.25 $3.25
99 THE PRODUCTION FACTORY $300.00 $0.00 $0.00 $75.00 $0.00 $75.00 $225.00 $150.00
100 THE RITZ-CARL TON, SOUTH BEACH $8,272.00 $2,068.00 $0.00 $0.00 $0.00 $2,068.00 $2,068.00 $0.00
101 TOPS EQUESTRIAN EVENTS BV $11,291.76 $0.00 $0.00 $750.00 $2,072.94 $2,822.94 $2,822.94 $0.00
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102 TOWER 3315 LLC $968.00 $242.00 $0.00 $0.00 $0.00 $242.00 $242.00 $0.00
103 TOWNHOUSE HOTEL $1,641.00 $410.25 $0.00 $0.00 $0.00 $410.25 $410.25 $0.00
104 TRITON TOWER CONDOMINIUM $13,112.00 $3,278.00 $0.00 $0.00 $0.00 $3,278.00 $3,285.50 $7.50
TRITON TOWER CONDOMINIUM (Non-Upland AC Hotel by
105 Marriott) $3,300.00 $825.00 $0.00 $0.00 $0.00 $825.00 $825.00 $0.00
106 VENDOME PLACE CONDO $1,782.00 $445.50 $0.00 $0.00 $0.00 $445.50 $445.50 $0.00
107 WESTGATE RESORT $2,024.00 $506.00 $0.00 $0.00 $0.00 $506.00 $506.75 $0.75
108 X2 $300.00 $0.00 $0.00 $75.00 $0.00 $75.00 $75.00 $0.00
Subtotal $796,828.81 $123,553.78 $24,915.47 $8,906.25 $41,831.70 $199,207.20 $201,571.14 $2,363.94
Prior Sand Tax Audit Corrections ($751.00) ($187.75) ($187.75) $0.00
Subtotal ($751.00) $0.00 $0.00 $0.00 $0.00 ($187.75) ($187.75) $0.00
Grand Total $796,077.81 $123,553.78 $24,915.47 $8,906.25 $41,831.70 $199,019.45 $201,383.39 $2,363.94
*Excludes state sales tax
Any negative amounts listed above indicated that the City underpaid the State of Florida while any positive amounts mean the State was overpaid
Page 21 of 22
SCHEDULEOFBEACHFRONTUPLANDFEES
BEACHFRONTMANAGEMENTAGREEMENT
EXHIBIT B
CONCESSION CONCESSION CONCESSION
AGREEMENT AGREEMENT PER AGREEMENT ENERGOV UPLAND
EFFECTIVE CALCULATED UNIT UPLAND UPLAND FEES
UPLAND CMB FISCAL NUMBER OF UPLAND FEES FEES DIFFERENCE
CONCESSIONAIRE ADDRESS YEAR UNITS FEE DUE BILLED (4-5) NOTES
Shelborne Hotel (Non-Upland Mondrian) 1801 Collins Ave. 2018/19 276 $ 22.00 $6 ,072.00 $0.00 ($6,072.00) Not billed (non-upland)
2 Four Points Sheraton Hotel (Non-Upland Soho) 4343 Collins Ave . 2018/19 50 $ 22.00 $1,100.00 $0 .00 ($1 ,100.00) Not billed (non-upland)
3 Soho Beach House Hotel 4385 Collins Ave. 2018/19 50 $ 22.00 $1 '100.00 $1 '103.00 $3.00 Overbilled round up problem
4 The Confidante 4041 Collins Ave 2017118 379 $ 22.00 $8,338 .00 $8 ,357 .00 $19 .00 Overbilled round up problem
5 Westgate Resort 3611 Collins Ave. 2017/18 46 $ 22.00 $1,012.00 $1 ,015.00 $3.00 Overbilled round up problem
6 Ocean House South Beach 121 Ocean Dr. 2017118 28 $ 22.00 $616.00 $618.00 $2.00 Overbilled round up problem
7 Grand Beach Hotel 4835 Collins Ave. 2017118 430 $ 22.00 $9,460.00 $9,482.00 $22.00 Overbilled round up problem
8 Carillon Hotel 6801 Collins Ave . 2017/18 580 $ 22.00 $12,760.00 $12,789.00 $29.00 Overbilled round up problem
9 Triton Tower Condominium 2899 Collins Ave . 2017/18 596 $ 22.00 $13,112.00 $13 ,142 .00 $30.00 Overbilled round up problem
10 The Palm South Beach 3025 Collins Ave. 2017/18 246 $ 22.00 $5,412.00 $5,425.00 $13.00 Overbilled round up problem
TOTAL $58,982.00 $51,931 .00 ($7 ,051.00)
ANY NEGATIVE AMOUNTS LISTED ABOVE INDICATE THAT THE CITY UNDERBILLED THE ENTITY, WHILE
ANY POSITIVE AMOUNTS MEAN THAT THE ENTITY WAS OVERBILLED AND IS DUE A REFUND
Page 22 of 22