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OMNI-CRA-R-02-0086
OMNI/CRA ITEM 69 RESOLUTION NO. 0 2` 086 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OMNI COMMUNITY REDEVELOPMENT AGENCY ("CRA") ACKNOWLEDGING ACCEPTANCE AND APPROVAL OF THE AUDITED FINANCIAL STATEMENTS FOR SEPTEMBER 30, 2001 AND MANAGEMENT LETTER AS PREPARED BY KPMG, NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE OMNI COMMUN�TY iZEDEVELOPM2N`1' AGENCY OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the ) Preamble to this Resolution are incorporated herein as if fully set forth in this Section. Section 2. The Board of Directors hereby acknowledges acceptance and approval. of the audited financial statements for September 30, 2001 and Management Letter as prepared by KPMG. Section 3. This resolution shall be effective immediately upon its adoption. omiz/c , 02-- 086 PASSED AND ADOPTED this 29th day of Octoher, 2002. ATTEST PRISCILLA A, THOMPSON CITY CLERK i APPROVED AS TO FORM AND CORRECTNESS ALFJ,-AN 0 VILARELLO CIT TTORNEY OMNI/CRA R-02-86;ELF ARTHUR E. TEELE, JR., CHAIRMAN CPA Page Page 2 of 2 - 086 ITEM 6B )- 86 RESOLUTION NO. OMNI/CRA R- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OMNI COMMUNITY REDEVELOPMENT AGENCY (CRA) RECEIVING THE AUDITED SEPTEMBER 30, 2001 FINANCIAL STATEMENTS AND MANAGEMENT LETTER AS PREPARED BY KPMG NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE OMNI COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are incorporated herein as if fully set forth in this Section. Section 2. The CRA Board of Directors hereby acknowledge receipt of the audited September 30, 2001 financial statements and Management Letter as prepared by KPMG Section 3. This resolution shall be effective immediately upon its adoption. PASSED AND ADOPTED this 28`h day of October, 2002. Priscilla A. Thompson Clerk of the Board APPROVED AS TO FORM AND CORRECTNESS: Alejandro Vilarello CRA General Counsel Arthur E. Teele, Jr., Chairman SEOPW/CRA OMNI/CRA 0 2 W- 162 02- 86 ITEM 6B C11'Y OF TAIA ��II. 11-ORIDA 'i o: Chairman Arthur E. Teele, Jr. and Members of the CRA Board I-I_01i1: Annette Lewis Acting Executive Director RECOMMENDATION Doi i c : October 14, 2002 1 1 k° : !LibJec l: KPMG September 30, 2001 Audit Rcl�lenccA�: Resolution It is respectfully recommended that the CRA Board approve the attached Resolution receiving the audited financial, Statements and Management Letter for period ending September 30, 2001, as prepared by KPMG (Deferred from July 29, 2002) JUSTIFICATION The CRA is submitting this resolution for Board approval Pursuant to §163.387 F.S., each redevelopment agency " ... shall provide for an independent financial audit of the trust fund each fiscal year and a report of such audit" General Source: N/A Account Number: N/A OMM/CRA 02- 86 SEOPW / CRA 02- 162 icPM:G CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Pules of the Auditor Genera.1 of the State ol' Florida Year ended September 30, 2001 OMNI/CRA 0 2 — 86 SEOPW/CRA 02" 16� Executive Summary KPMG LLP (KPMG) hereby submits this management letter to the City of Miami Southeast Overtown Parkwest Redevelopment Agency and City of Miami Omni Community Redevelopment Agency, Component Units of the City of Miami, Florida (the Agencies) for the fiscal year ending September 30, 2001. The management letter is presented in accordance with the Rules of the Auditor General of the State of Florida. In accordance with Government Auditing Standards, we are required to consider the Agencies' internal control during our planning and performing of our audit of the financial statements in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control. In fulfilling this responsibility, estimates and judgments made by management are required to assess the expected benefits and related costs of internal control policies and procedures. The objectives on internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of its financial statements in accordance with accounting principles generally accepted in the United States of America. The management letter is organized in the following manner: Executive summary; Current year's observations, recommendations, and management's responses; and Status of prior year's observations, recommendations, and management's responses. Only comments issued in the prior years that are still relevant are included in this management letter. We would be pleased to discuss these comments with you and, if desired, to assist you and management in implementing corrective action steps. KPMG appreciates the cooperation we received from the Agencies' staff and management and is honored to serve the Agencies as its external auditors. SEOpW / CRA 0MNT/CJ 2 -- 16 9 o2- 1XIM671,6rhM One Biscayne Tower Suite 2800 2 South Biscayne Boulevard Miami, FL 33131 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida To the Board of Directors of the City of Miami Southeast Overtown Parkwest Redevelopment Agency and City of Miami Omni Community Redevelopment Agency, Component Units of the City of Miami, Florida Telephone 305 358 2300 Fax 305 913 2692 We have audited the financial statements of the City of Miami Southeast Overtown Parkwest Redevelopment Agency and City of Miami Omni Community Redevelopment Agency, Component Units of the City of Miami, Florida (the Agencies), as of and for the fiscal year ended September 30, 2001, and have issued our report thereon dated April 5, 2002. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Independent Auditors' Report on Compliance and Internal Control over Financial Reporting. Disclosures in that report, which is dated April 5, 2002, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General. Those rules (Section 10.554(1)(g)l.a.) require that we address in the management letter, if not already addressed in the auditors' report on compliance and internal controls, whether or not inaccuracies, shortages, defalcations, fraud, and/or violations of laws, rules, regulations, and contractual provisions reported in the preceding annual financial audit report have been corrected. We noted no inaccuracies, irregularities, shortages, defalcations, and/or violations of laws, rules, regulations, and contractual provisions disclosed in the preceding annual report. The Rules of the Auditor General (Section 10.554(1)(g)l.b.) require that we disclose in the management letter, if not already disclosed in the auditors' report on compliance and internal controls, whether or not recommendations made in the preceding annual financial audit report have been followed. The recommendations made in the preceding annual financial audit report have been corrected, except for those reported below under the heading "Status of prior year's observations, recommendations and management's responses." 5EOPw / CRA ■. ■ KPMG LLP KPMG LLP, a limited y Partnership, is a member of KPMG International, onal, a Swiss association Obi/CRA,2_ �s2 02- 86 The Rules of the Auditor General (Section 10.554(1)(g)6.a.), state that a management letter shall include a statement as to whether or not a unit of local government is in a state of financial emergency as a consequence of conditions described in Section 218.503(1), Florida Statutes. Section 218.503(1) states that a local governmental entity is in a state of financial emergency when any of the following conditions occur: a. Failure, within the same fiscal year in which due, to pay short-term loans from banks or failure to make bond debt service payments when due. b. Failure to transfer at the appropriate time, due to lack of funds: (1) taxes withheld on the income of employees; or (2) employer and employee contributions for a) federal Social Security, or b) any pension, retirement or benefit plan of an employee. C. Failure for any one period to pay, due to lack of funds: (1) wages and salaries owed to employees; or (2) retirement benefits owed to former employees. d. An unreserved or total fund balance or retained earnings deficit for which sufficient resources of the local government entity are not available to cover the deficit for two successive years. e. Noncompliance of the local government retirement system with actuarial conditions provided by law. Section 218.503(2) states that local government entity shall notify the Governor and the Legislative Auditing Committee when one or more of the conditions specified in Section 218.503(1) have occurred or will occur if action is not taken to assist the local governmental entity. Nothing came to our attention that caused us to believe that the Agencies are, or during the fiscal year was in a state of financial emergency as a consequence of conditions in Section 218.503(1) Florida Statutes. Section 11.45, Florida Statutes, states that an auditor shall notify each member of the governing body of a local government entity for which deteriorating financial conditions exist which may cause a condition described in Section 218.503(1) to occur if actions are not taken to address such conditions. Management of the Agencies has determined that deteriorating financial conditions do not exist which could cause a condition described in Section 218.503(1) to occur if actions are not taken to address such conditions. The Rules of the Auditor General (Section 10.554(1)(g)2.), state that a management letter shall include a statement as to whether or not a local governmental entity complied with Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Agencies complied with Section 218.415, Florida Statutes, relating to local governmental investment policies. The Rules of the Auditor General (Section 10.554(1)(g) 3.) states that a management letter shall include recommendations to improve the local government entity's present financial management, accounting procedures and internal accounting controls. The recommendations made in the current year are listed in the section titled "Current year's observations, recommendations and management's responses." The Rules of the Auditor General (Section 10.554(1)(g)4.) require disclosure in the management letter of the following matters if not already addressed in the auditors' reports on compliance and internal controls (1) violations of laws, rules, regulations, and contractual provisions that have occurred, or are likely to have occurred; (2) improper or illegal expenditures; (3) improper or inadequate accounting procedures (for example, the omission of required disclosures from the financial statements); (4) failures to properly record financial transactions; and (5) other inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that come to the attention of, the auditor. No such conditions were noted during the audit. SECPW/ACM 2 ®'l�iM/CRA. _ �;2- fG The Rules of the Auditor General Section (Section 10.554(1)(g)(5) state that a management letter shall include the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the management letter, unless disclosed in the notes to the financial statements. Disclosure is made in note 1 to the agencies financial statements. As required by the Rules of the Auditor General (Sections 10.554(g)(6)c. and 10.556(8)), we applied financial condition assessment procedures. It is management's responsibility to monitor the Agencies financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. With respect to the financial report for the fiscal year 2001 required to be filed with the State of Florida Department of Banking and Finance pursuant to Section 218.32 Florida Statutes, the Agencies do not file a separate report with the State of Florida Department of Banking and Finance. The financial operations of the Agencies are included in the general purpose financial statements of the City of Miami, Florida for the year ended September 30, 2001. This management letter is intended solely for the information and use of the Board of Directors, Management of the Agencies, the State of Florida Office of the Auditor General, and federal and state awarding agencies and pass -through entities, and is not intended to be and should not be used by anyone other than these specified parties. April 5, 2002 K'PMC, LCP C 1MM / CRA SEOPW / CRA 62- 86 62- 162 Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 Current Year's Observations, Recommendations and Management's Responses Summary No. Current Year's Observations REPORTABLE CONDITIONS: 2001-1 Level of Staff Within the Finance Department 2001-2 Budget Compliance 2001-3 Encumbrance Accounting 2001-4 Payroll File Maintenance 2001-5 Project Cost Accounting OTHER OBSERVATIONS: 2001-6 Operational Review 2001-7 Authorized Check Signing 2001-8 Budgetary Accounting 4 ONM/CRA SEOPW/CRA Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY, AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 REPORTABLE CONDITIONS 2001-1 LEVEL OF STAFF WITHIN THE FINANCE DEPARTMENT Observation The Finance Department is presently short-staffed of the qualified personnel required to manage and maintain the accounting processes of the agencies. The absence of qualified staff has significantly delayed the financial reporting process, and the progress of the current year's audit, because most if not all of the analysis and reconciliation of general ledger accounts are not performed on a timely basis. Recommendation The Finance Department is responsible for maintaining the general ledger, which is the official record of the Agencies financial activities and serves as the basis for the preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America. Accordingly, providing complete and accurate financial information in a timely manner is crucial, in order to effectively manage the operations of the Agencies. The Department should be staffed with a qualified person who should be responsible for the accounting and financial reporting process. The Finance Director's duties should include but not be limited to the following: 1. The design and implementation of an internal control system that provides for the processing and recording of accounting transactions; 2. the review and approval of all accounting journal entries; 3. the reconciliation of subsidiary accounts and other detail account listing to that of the general ledger; 4. the proper maintenance of the Agencies' operating budget; and 5. the preparation of monthly and annual financial reports for both internal and external presentation. Management's Response Management agrees. 5 Ol�'I/CRA SEOPW/CRA U2- 86 02- 162 Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY, AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 2001-2 BUDGET COMPLIANCE Observation The Anti -Deficiency Act, as set forth in the provisions of Chapter 18 of the Code of the City of Miami, Florida, requires the Agencies to maintain a structurally balanced budget. As such, recurring revenues should fund current expenditures. Non -recurring revenues and budget surpluses should replenish reserve levels, support auxiliary liabilities and pay for non -recurring expenditures. During the fiscal year 2001, the Miami OMNI Community Redevelopment Agency's actual expenditures exceeded its budgeted appropriations by approximately $307,000. By exceeding its spending limits, the Agency did not comply with the budget provisions of Chapter 18. Recommendation The budget process should design to control fiscal spending and monitor the on -going operations of the Agencies. Accordingly, actual expenditures should be compared to Board approved budget appropriations. This may be accomplished by the utilization of financial reports comparing budgeted revenues and expenditures to actual amounts, on a monthly, and year-to-date basis. Management's Response Management agrees; preceding management did not properly budget for Margaret Pace Park construction expenses. 6 S-p / CRA O/CRA OPW 62- 86 62- 162 Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY, AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 2001-3 ENCUMBRANCE ACCOUNTING Observation We noted that the Agencies do not use a "Purchase Order" system to encumber the purchase of goods and services. Recommendation We recommend that a "Purchase Order" (PO) system be implemented, whereby a PO document is created for each expenditure. The PO document should provide information which includes a description of the goods and services being purchased, the name of the authorized vendor, the balance of available budgeted amounts, and the signature of the appropriate personnel authorizing the purchase. Additionally, the Agencies should utilize an encumbrance accounting system. Under the encumbrance system, purchase order contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation. The encumbrance outstanding should be reported as reservation of fund indicating that portion of fund balance that may not be used for additional appropriations. Management's Response Even though the CRA is in the practice of issuing purchase orders, it does not have a governmental accounting software package with encumbrance capabilities. It is the intention of the CRA to purchase such a package. oivMICRA SE®PW/CRA 62-- S6 6�-t� Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY, AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 2001-4 PAYROLL FILE MAINTENANCE Observation We noted several instances in which documentation supporting staff salaries and pay rates were not included in the employee personnel file. Recommendation Each employee personnel file should immediately be updated to include appropriate documentation to support current payroll rates and salaries. Each subsequent payroll adjustment should be accompanied by a pay rate adjustment form which should be maintained in their respective payroll file. Management's Response As a result of inadequate levels of staffing management agrees with this comment. A review will be performed on all files of existing employees of the CRA for compliance. 8 SEOPW/CRA OMMICRA 6 2 - 162 62- 86 Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY, AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 2001-5 PROJECT COST ACCOUNTING Observation The Agencies do not have a formal system to account for ongoing capital projects. As a result, there is no readily available information regarding the financial status of each capital project. Recommendation We recommend that the Agencies develop a project costing accounting system. Such system should be able to account for the initial estimated project cost, identify project -to -date expenditures and an estimate of expenditures remaining to complete each project. Each project should be reviewed periodically to ensure compliance with contractual terms and conditions and status/percentage of project completion. Management's Response Management agrees; the level of staffing as well as the lack of the proper accounting software package has a direct impact. This feature is one that will be included in the software that will be acquired by the CRA. 9 SEOPW / CRA OMNI/CRA 6 2 - 162 12- 86 Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY, AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 OTHER OBSERVATIONS 2001-6 OPERATIONAL REVIEW Observation The City of Miami, Florida has experienced significant population growth and economic development over the past decade. The mission and importance of the Agencies has become increasingly important with respect to redevelopment activities pertaining to residential and commercial areas. Accordingly, the present organizational structure does not support the demands on staff to maintain an efficient and effective operation. Recommendation We recommend that a comprehensive review of the operations of the Agencies be performed. The review should focus on the organizational structure of the Agencies and provide recommendations for operational improvements. The review would include but not limited to the following: Staffing Requirements — An assessment of and evaluation of staff levels including job description, qualifications and pay structure and benefits, Services Provided — An assessment and evaluation of the current level of services provided by the Agencies, including the use of performance measures and benchmarking against peer groups; Legal Compliance — A review of state and local laws and regulations including the various inter local and contractual agreements to ensure compliance, and a design of a system to monitor compliance with such provisions. Management's Response Management agrees. 10 OMNI/CRA SEOPW/CRA. 62- 86 02- 162 Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY, AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 2001-7 AUTHORIZED CHECK SIGNING Observation We noted that one of the authorized signatures on the Agencies' payroll checks is no longer employed. Recommendation We recommend that the Agencies update and change its authorized check signing authorities and/or signatures to only those who are currently employed or who are officers of the Agencies. Management's Response This matter is being resolved. 11 Cx / CRA SEOPW / CRA � 2- 86 02- 162 Appendix A CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY, AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 2001-8 BUDGETARY ACCOUNTING Observation The Agencies currently uses governmental fund accounting model for external financial reporting purposes, which includes a general fund, special revenue fund, debt service fund and a capital projects fund. However, the Agencies prepare their annual budget on a combined entity -wide basis, as opposed to a fund basis. Recommendation We recommend that the Agencies adopt its annual budget for the general fund, special revenue fund and the debt service fund. This will provide financial information on a more comprehensive level to aid in the evaluation of operating results. Management's Response The CRA has corrected the budgeting process, in fiscal year 2001-2002, by preparing budgets at the project level of accounts, which represent the required governmental funds including general, special revenue and debt service. 12 OIL/CRA SEOPW/CRA 62- 86 62- 162 Appendix B CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 Status of Prior Year's Observations, Recommendations and Management's Responses Summary No. Prior Year's Observations Comment Addressed or No Longer Relevant REPORTABLE CONDITIONS: 2000-1 Establishing Controls Over General Ledger 2000-2 Timely Preparation of Financial Statements 99-1 Leased Properties 99-2 Fixed Assets Records OTHER OBSERVATIONS: 2000-3 Timely Recording of Board Minutes Changes in the Government 2000-5 Reporting Model 99-3 Department of Off -Street Parking Lease Agreement X 99-4 Fund Structure X 13 C;WTI/CnA 02- 86 Comment is Still Relevant K4 X X X X X SEOPW / CRA 62_ 1 62 -1 — Appendix B CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 Status of Prior Year's Observations, Recommendations and Management's Responses REPORTABLE CONDITIONS 2000-1 ESTABLISHING CONTROLS OVER GENERAL LEDGER Observation The City of Miami, Florida (the City) performs certain key accounting functions on behalf of the Agencies, which includes the recording and summarization and processing of accounting transactions, including cash disbursements and cash collections. The City provides the Agencies detailed general ledger reports which summarizes the accounting transactions. The Agencies rely only on the general ledger reports prepared by the City, and do not perform an independent reconciliation of account balances and activity, including cash balances. Recommendation We recommend that the Agencies develop appropriate accounting controls to monitor and reconcile account balances reported by the City. This should include a review of the account activity and analysis of ending account balances. Such review and analysis should be performed monthly, and significant differences and exceptions should be investigated and resolved in a timely manner. The completeness and accuracy of the financial statements are the responsibility of the Agencies' management and this process will help to meet such responsibility. Management's Response As of the 2001 fiscal year the CRA is in the process of establishing separate books from the City and intends to perform a monthly reconciliation of the accounts (inclusive of cash). Current Year's Status This observation is applicable in the current year. 14 C",JINI?lI CRA SEOPW/CRA 86 62- 162 Appendix B CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 Status of Prior Year's Observations, Recommendations and Management's Responses 2000-2 TIMELY PREPARATION OF FINANCIAL STATEMENTS Observation The Agencies do not have a formalized year-end financial reporting process to facilitate the preparation of their financial statements. The current financial reporting system is not adequate to provide management with complete, accurate and timely information needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America. Recommendation The Agencies' management is responsible for the preparation of its financial statements. We recommend that a financial reporting system be established which will ensure the timely compilation of the financial statements. These should include detailed closing procedures, the assignment of each area to specific personnel and timeline for the completion of each assigned task. The development and implementation of a formal financial reporting system will improve the timeliness and accuracy of financial information and thereby assist management in meeting their reporting requirements, and provide them with a reliable tool for monitoring the Agencies' progress and making informed financial decisions. Management's Response This is contemplated as indicated in Management's response to reportable condition 00-1. Monthly reconciliation of the CRA's ledgers to that of our fiduciary will become a part of the CRA's control of the balances reported by the City. Current Year's Status This comment is still applicable for the current year. This comment has been updated to include additional observation and recommendation. See comments 2001-2. Current Year's Status This observation is applicable in the current year. 15 CRA SEOPW I CRA 62- 86 62_ 162 Appendix B CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 Status of Prior Year's Observations, Recommendations and Management's Responses 99-1 LEASED PROPERTIES Observation The Agencies, through its operations, leases various properties to third parties. However, the Agencies does not have a system that allows for the identification of all properties held for lease. As a result, the Agencies is not in a position to properly enforce the timely collection of rental revenue from its tenants. In fact, the Agencies recently discovered, through the receipt of a payment subsequent to the Agency's year end, lease revenue that was due from a developer. The Agencies is not able to determine if other properties are leased and the nature of the lease agreements. Recommendation We recommend that the Agencies perform extensive research of all of its available records (for example, minutes, resolutions, lease agreements, development agreements, other contracts/agreements, and so on) in order to identify all properties held for leasing. In addition, the Agency should attempt to locate all agreements and contracts associated with the leased properties and establish procedures for monitoring and enforcing all the terms of the contract. Without the proper knowledge of all revenue that is due to the Agency, the Agency's revenue could be understated, thus understating fund balance. Current Year's Status This observation is still applicable in the current year. The Agency has not identified all properties leased. 16 SEOPW / CRA OMIv1I / CRA 02- 86 62- 162 Appendix B CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 Status of Prior Year's Observations, Recommendations and Management's Responses 99-2 FIXED ASSETS RECORDS Observation We noted that the Agency does not have a current detailed listing of fixed assets or sufficient records documenting ownership of its equipment, furniture and fixtures, and land holdings. Recommendation Since the Agency is autonomous and separate from the City, we recommend the following: • The Agency should research its available records, as well as immediately perform an inventory, to identify all its fixed assets, including equipment, furniture and fixtures, and land holdings, in an effort to create a current and complete listing of assets. The listing should include, at a minimum, a description of the asset, the date the asset was placed in service, and the value that was assigned to the asset; • The Agency should adopt a policy whereby the fixed asset listing is updated each time there are changes to the fixed asset composition, preferably on a quarterly basis (that is, purchases and/or disposals of assets). The fixed asset listing should also be reconciled to the general ledger control account each time it is updated; and • Perform periodic inventory counts of fixed assets and compare to the detailed listing. Creation and maintenance of a current and complete listing of fixed assets and the performance of periodic inventory counts will provide for an accurate financial position and will also help to provide for proper controls over the safeguarding of those assets and help reduce the risk of misappropriation. Current Year's Status This observation is still applicable in the current year. The Agency has not updated its fixed asset listing, or performed an inventory of fixed assets. 17 ONINI/CRA SEOPW/CRA 02- 86 012- 162 1 - Appendix B CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 Status of Prior Year's Observations, Recommendations and Management's Responses OTHER OBSERVATIONS 2000-3 TIMELY RECORDING OF BOARD MINUTES Observation We noted that the minutes of the board of directors' (the Board) meetings were not completely summarized in a timely manner. For example, the July 2001 minutes were not summarized and available until November 2001. Recommendation We recommend that management implement a process that helps to ensure that all minutes of board meetings are summarized timely in order to be made readily available. The minutes represents a summary of the Boards actions taken and the directives they wish management should follow. Not having the minutes timely and readily available could cause specific Board request to be ignored. Management's Response The CRA shares the City of Miami's City Clerk as indicated by our Inter -local Agreement, as of January 2002 the Clerk has hired additional personnel to respond to the CRA's overall service requirements from that office. Current Year's Status This observation is applicable in the current year. 18 ©-j&,ff / CRA SEOPW / CRA v2- 86 62- 162 Appendix B CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance with the Rules of the Auditor General of the State of Florida September 30, 2001 Status of Prior Year's Observations, Recommendations and Management's Responses 2000-5 CHANGES IN THE GOVERNMENT REPORTING MODEL Observation In June 1999, the Governmental Accounting Standards Board (GASB) issued GASB Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis - for State and Local Governments. This statement dramatically changes the presentation of government's external financial statements. In the GASB's view, the objective of the new reporting model is to enhance the clarity and usefulness of government financial statements to the citizenry, oversight bodies, investors, and creditors. It will affect the Agencies' financial data accumulation and financial statement presentation processes. Some of the key aspects of the changes are as follows: Management's Discussion and Analysis (MD&A) — A comprehensive MD&A will now be included as required supplementary information. The MD&A will introduce the financial statements by presenting an analysis of the government's financial performance for the year and its financial position at year-end. Government -wide Reporting — The Agencies will be required to report financial operations and net assets, not only at the fund perspective for governmental activities, but will also have to prepare statements at the government wide level. This level will distinguish between government and business type activities. All information at the government -wide level will be reported using the economic resources measurement focus and accrual basis of accounting, as enterprise funds do under the current model. Fiduciary activities will be excluded from the government -wide level of reporting. General government fixed assets, and long-term liabilities of the government will be included on the assets and liabilities section of the government -wide level of reporting. Statement of Activities — Governments will now be required to use a "net program cost" format for the government -wide statements instead of a traditional operating statement. This new format groups revenue and expenses by functional categories (such as, public safety, public works, and so on). The purpose of the new statement is to inform readers about the cost of specific functions and the extent to which they are financed with program revenue or general revenue of the government. Governments will have the option of reporting both direct and indirect program costs. Depreciation expenses will now generally be reflected as a cost in the statement of activities. 19 SEOPW / CRA O/CRA 02-`Z 02 - 86 Appendix B CITY OF MIAMI SOUTHEAST OVERTOWN PARKWEST REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY REDEVELOPMENT AGENCY (COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA) Management Letter in Accordance• with the Rules of the Auditor General of the State of Florida September 30, 2001 Status of Prior Year's Observations, Recommendations and Management's Responses Fund Level Reporting — Fund level financial statements will still be required and will provide information about the Agencies' fund types, including fiduciary funds and blended component units. General capital assets and general long-term liabilities will only be reported at the government -wide level. Fund level reporting will continue to focus on fiscal accountability and reflect the flows and balances of current financial resources. The modified accrual basis of accounting will continue to be used at the fund level, except for proprietary and fiduciary funds which would continue reporting based on economic resources and the accrual method of accounting. Reconciliation between the fund and the government -wide statements will be required on the face of the fund statements. Presentation of Budgetary Information — The standard requires budgetary statements for the general fund and certain other governmental funds as required supplementary information. The original adopted budget of the Agencies as well as the final revised budget must be presented. Actual results on a budgetary basis will need to be reconciled to the GAAP (generally accepted accounting principles) basis on the face of the statements. The effective date of the new pronouncement will require implementation by the Agencies for their fiscal year ending September 30, 2002. Recommendation The magnitude of these changes and the time required to prepare for implementation should not be under -estimated. We recommend that the Agencies begin to look at its systems and processes to ensure that the required information will be available to help ensure timely implementation. Further, we recommend that the Agencies consider the cost of required changes to its systems and processes to help ensure availability of necessary funds in its upcoming budget. We also recommend that the Agencies formulate a strategic plan which should incorporate all factors to help ensure that the necessary timetables and manpower needs are properly addressed. Current Year's Status This observation is applicable in the current year. 20 SEOPW/CRA OrINri/C,"R-41, 2 _ 62 0 2 - 86 om CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Table of Contents Page Independent Auditors' Report 1-2 Financial Statements: Combined Balance Sheet — Governmental Fund Types and Account Groups 3-4 Combined Statement of Revenue, Expenditures and Changes in Fund Balances — All Governmental Fund Types 5 Statement of Revenue, Expenditures and Changes in Fund Balances — Combined Budget and Actual — All Governmental Fund Types 6 Notes to Financial Statements 7-14 OMNI/CRA SEOPW/CPA 02- 86'2- 62 ILE'RA67IG-M One Biscayne Tower Suite 2800 2 South Biscayne Boulevard Miami, FL 33131 Independent Auditors' Report The Board of Directors City of Miami Southeast Overtown Park West Redevelopment Agency: Telephone 305 358 2300 Fax 305 913 2692 We have audited the accompanying financial statements of the City of Miami Southeast Overtown Park West Redevelopment Agency (the Agency), a component unit of the City of Miami, Florida, as of and for the year ended September 30, 2001, as listed in the table of contents. These financial statements are the responsibility of the Agency' management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in note 1, the accompanying financial statements referred to above present fairly, only the Agency and are not intended to present fairly the financial position of the City of Miami, Florida and the results of its operations in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Agency, as of September 30, 2001, and the results of its operations for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in note 11 to the financial statements, the Agency has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 33, Accounting and Financial Reporting for Non -Exchange Transactions. CAR (hpppSEOPW / CRC, KPMG LLP KPMG LLP a US limited liability partnership, is V 2 V 6 `2 a member of KPMG International, a Swiss association In accordance with Government Auditing Standards, we have also issued a report dated April 5, 2002 on our consideration of the Agency's internal control over financial reporting and our tests of their compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. April 5, 2002 2 ONM/CRA SEOPW /CRA 02- 86 02- 162 M Account Groups General General Total fixed long-term Memorandum assets obligations Only — — 6,121,383 — — 63,427 — — (63,427) — — 107,910 — — 876,226 15,034,177 — 15,034,177 — 814,026 814,026 — 3,749,838 3,749,838 15,034,177 4,563,864 26,703,560 — — 791,212 — — 554,148 — — 531,736 — — 125,800 — 4,563,864 4,563,864 — 4,563,864 6,566,760 15,034,177 — 15,034,177 — — 34,385 — — 814,026 — — 2,339,028 — — 1,915,184 151,034,177 — 20,136,800 15,034,177 4,563,864 26,703,560 4 OMN / CRA 012- 86 SEOPW /CRA 62- 162 CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Combined Statement of Revenue, Expenditures and Changes in Fund Balances All Governmental Fund Types For the year ended September 30, 2001 Revenue: Tax increment revenue State of Florida revenue sharing Rental Interest Total revenue Expenditures: Current: General government Community development Debt service: Principal Interest Capital outlay Total expenditures Deficiency of revenue under expenditures Other financing sources (uses): Operating transfers in Operating transfers out Operating transfers in from primary government Total other financing sources (uses) Excess (deficiency) of revenue and other financing sources over (under) expenditures and other financing uses Fund balances, beginning of year Fund balances, end of year See accompanying notes to financial statements. Governmental Fund Types Total Special Debt Capital Memorandum General revenue service project Only $ - 918,384 - - 918,384 - - 300,000 - 300,000 79,826 - - - 79,826 35,353 124,922 39,663 142,009 341,947 115,179 1,043,306 339,663 142,009 1,640,157 1,339,635 - - - 1,339,635 - 375,000 - - 375,000 105,000 - 105,000 - - 251,600 - 251,600 276,035 1,833,812 - 342,151 2,451,998 1,615,670 2,208,812 356,600 342,151 4,523,233 (1,500,491) (1,165,506) (16,937) (200,142) (2,883,076) - 22,106 56,600 - 78,706 (22,106) (56,600) - - (78,706) 1,426,210 384,015 - 282,652 2,092,877 1,404,104 349,521 56,600 282,652 2,092,877 (96,387) (815,985) 39,663 82,510 (790,199) 1,497,182 1,357,374 774,363 2,290,903 5,919,822 $ 1,400,795 541,389 814,026 2,373,413 5,129,623 5 SEOPW/CRA OMNI/CRA UA2- 162 62- 86 CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Combined Statement of Revenue and Expenditures — Budget and Actual For the year ended September 30, 2001 Revenue: Tax increment revenue State of Florida revenue sharing Parking lease Rental Interest Impact fees Total revenue Expenditures: Current: General government Community development Debt service: Principal Interest Capital outlay Total expenditures Deficiency of revenue under expenditures Other financing sources (uses): Operating transfers in Operating transfers out Operating transfers from primary government Total other financing sources (uses) Deficiency of revenue and other financing sources under expenditures and other financing uses See accompanying notes to financial statements. Variance favorable Budget Actual (unfavorable) $ 944,862 918,384 (26,478) 300,000 300,000 — 150,000 — (150,000) 90,155 79,826 (10,329) 90,000 199,938 109,938 150,000 — (150,000) 1,725,017 1,498,148 (226,869) 3,013,693 — 3,013,693 — 375,000 (375,000) 105,000 105,000 — 251,600 251,600 — 849,160 3,476,482 (2,627,322) 4,219,453 4,208,082 11,371 (2,494,436) (2,709,934) (215,498) 56,600 78,706 22,106 (56,600) (78,706) (22,106) 658,488 1,810,225 1,151,737 658,488 1,810,225 1,151,737 $ (1,835,948) (899,709) 936,239 6 f3jv-'M/CRA SEOPW/CRA 02- 86 62- 162 �1T CITY OF NIIANII SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Notes to Financial Statements September 30, 2001 (1) General Description and Basis of Presentation The City of Miami Southeast Overtown Park West Redevelopment Agency (the Agency), was established in 1983, by the City of Miami, Florida (the City) under the provisions of Section 163.330, Florida Statutes. The purpose of the Agency is to eliminate blight and slum condition within the redevelopment area of the Agency pursuant to the redevelopment plans of the Agency for new residential and commercial activity in the Southeast Overtown area. The board of directors of the Agency is comprised of the five members of the City commission and are separate, distinct and independent from the governing body of the City. The City entered into Interlocal Cooperation Agreements, dated March 31, 1982 with Miami -Dade County, Florida (the County) and related ordinances of the City and County whereby tax increment revenue collected by the parties would be paid to the Agency and used in accordance with the approved budgets of the redevelopment plans and terms and conditions of the Interlocal Agreements for the benefit of the Agency. The Agency meets the criteria for inclusion in the City's reporting entity as a blended component unit, and therefore, has been reported in the general purpose financial statements of the City. The financial statements presented herein only include the fund types and the account groups of the Agency, and is not intended to be a complete presentation of the financial position of the City and the results of its operations in conformity with accounting principles generally accepted in the United States of America. (2) Summary of Significant Accounting Policies (a) Basis of Accounting The accounts of the Agency are organized on the basis of funds and an account group, each of which is considered a separate accounting entity. The operations of each fund are accounted for in a separate set of self -balancing accounts that is comprised of its assets, liabilities, fund equity, revenue, and expenditures, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The Agency has the following fund -type and account groups: 0 Governmental Funds Governmental funds are accounted for on a financial flow measurement basis. Only current assets and current liabilities are generally included on the balance sheet. The operating statements present sources (revenue and other financial sources) and uses (expenditures and other financing uses) of available spendable resources during the period. The modified accrual basis of accounting is used for all governmental fund types. Under this method, revenue amounts are recorded when they are both measurable and available. "Measurable" means that the amount of a transaction can be determined, and "available" means that the amount of a transaction is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when goods or services are received and actual liabilities are incurred. Disbursements for the 7 OMNI/C,RA SEOPW/CgOontinued) 02- 86 02- 162 CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Notes to Financial Statements September 30, 2001 purchase of capital assets providing future benefits are considered expenditures and are accounted for in the general fixed assets account group. The revenue susceptible to accrual includes property taxes and intergovernmental revenue. Governmental fund types include the following funds: The General Fund is the general operating fund of the Agency. All financial resources, except those required to be accounted for in another fund, are accounted for in the General Fund; Special Revenue Fund accounts for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted for specified purposes; Debt Service Fund accounts for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs; and Capital Project Fund accounts for financial resources to be used for the acquisition or construction of major capital facilities. (ii) Account Groups General fixed assets is used to provide accounting control and accountability for all of the Agency's fixed assets. General long-term obligations is used to account for the outstanding balances for all long-term obligations of the Agency. (b) General Fixed Assets The general fixed assets account group provides physical and dollar value accountability. The costs of purchasing or constructing by the governmental funds are recorded as expenditures in those funds. The expenditures are capitalized in the general fixed assets account group at historical cost, except for donated fixed assets, which are recorded at fair value at the date of donation. Fixed assets consisting of certain improvements other than buildings, including roads, curbs, gutters, streets and sidewalks, drainage systems and lighting systems are generally not reported in the general fixed assets account group. No depreciation has been provided on general fixed assets. (c) Cash The Agency's cash, other than described below is pooled together with the City's cash. All such cash is reflected as equity in pooled cash on the Agency's balance sheet. Certain cash is set aside for the repayment of the special obligation bonds and loans and is therefore classified as restricted cash. ONLINI/CRA (Continued) 0 2 - 86 SEOPW/CRA 02-- 162 CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Notes to Financial Statements September 30, 2001 (d) Budgets As set forth in the Interlocal Cooperation Agreements between the Agency and the City, the Agency adopts an annual budget for the combined governmental operations and not on an individual fund level. Capital Project funds are budgeted on a total project basis for which annual budgets are not available. The budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The statement of revenue, expenditures and changes in fund balances, budget and actual is presented for funds which have annual budgets. Budgetary control is maintained at the fund level. No later than 30 days prior to the date the City Commission establishes the millage rate for the City, the Agency's director shall prepare, for the approval of the board, the budget for the operations of the Agency for the ensuing fiscal year. The budget shall be prepared in the same manner as required of all departments of the City. When approved by the board, the budget shall not require approval of any officer or body of the City. (e) Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management's estimates. (fl Totals Memorandum Only The total columns in the accompanying financial statements are captioned "Memorandum Only -to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present the financial position or results of operations, in conformity with generally accepted accounting principles. Neither is such data comparable to consolidation. Interfund eliminations have not been made in the aggregation of the data. (3) Cash The Agency's cash as of September 30, 2001 is summarized as follows: Cash: Equity in pooled cash Restricted cash Total $ 6,121,383 876,226 $ 6,997,609 9 0o- / 8 6 SE0FW0M*ued) 02 - 162 CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Notes to Financial Statements September 30, 2001 In addition to insurance provided by the Federal Depository Insurance Corporation, all time and demand deposits are held in banking institutions approved by the State Treasurer of the State of Florida to hold public funds. Under the Florida Statutes, Chapter 280, "Florida Security for Public Deposits" Act (Chapter 280), the State Treasurer requires all qualified public depositories to deposit with the Treasurer or another banking institution eligible collateral equal to 50% to 125% of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage of eligible collateral (generally in the form of U.S. government and agency securities, state or local government debt, or corporate bonds) to public deposits is dependent upon the depository's financial history and its compliance with Chapter 280. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting loss. (4) Note Receivable On January 9, 1997, the City transferred ownership of various properties to the Agency, including the property located at 269 N.W. Wh Street, which was sold by the Southeast Overtown District to Bethel A.M.E. Church, Inc. (the Church), a Florida nonprofit organization, pursuant to City Resolution 97-7 and F.S. 163.380. The Church paid cash of $30,000 and signed a $65,000 purchase money note and mortgage for the property. The purchase money note and mortgage has an annual interest rate of 6%, amortized over thirty (30) years with a balloon payment of $46,729 in the fifteenth year. The balance of $63,427 at September 30, 2001, has been fully reserved as collection of the note receivable is doubtful. (5) Fixed Assets During the fiscal year ending September 30, 2001, the Agency's additions to its general fixed assets included the purchase of land in the amount of $79,225. The changes in general fixed assets for the year ended September 30, 2001 are summarized as follows: Fixed Assets Balance, October 1, 2000 $ 14,954,952 Additions 79,225 Balance, September 30, 2001 $ 15,034,177 10 owz SEOPW/CRA(Continued) 62- 86 62- 162 (6) CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Notes to Financial Statements September 30, 2001 Long -Term Obligations The changes in the general long-term obligations for the year ended September 30, 2001 are summarized as follows: Special obligation bondsand loans Balance, October 1, 2000 $ 4,668,864 Principal retired (105,000) Balance, September 30, 2001 $ 4,563,864 The principal and interest requirements on the special obligation bonds and loans are as follows: Gran Series 1990 Bonds Central Principal Interest Principal Total 2002 $ 115,000 242,675 — 357,675 2003 125,000 232,900 — 357,900 2004 135,000 222,275 — 357,275 2005 145,000 210,800 — 355,800 2006 155,000 198,475 — 353,475 Thereafter 2,180,000 1,028,075 1,708,864 4,916,939 Total $ 2,855,000 2,135,200 1,708,864 6,699,064 A description of each obligation is as follows: (a) On November 8, 1990, the City issued $11,500,000 aggregate principal amount of Community Redevelopment Revenue Bonds, Series 1990, maturing through 2015, with interest rates ranging from 7.15% to 8.5%. These bonds are secured by a pledge of guaranteed entitlement revenue received from the State of Florida and the tax increment revenue amounts received from the City and County on the Southeast Overtown/Park West Redevelopment area. The proceeds of the bonds were used mainly to refinance a $5,958,000 Section 108 HUD promissory note, to reimburse the City for moneys advanced to the Agency by the City in an amount not to exceed $750,000, and to finance the acquisition and clearing of certain real property and the construction of certain infrastructure improvements within the Southeast Overtown/Park West Redevelopment Area defined in the Phase I Development Programs of the Agency's Interlocal Agreement and related resolutions of the City and County. 11() j,/ aTI / tRA 02- 86 SEOPW / CRA (Continued) 02- 162 M CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Notes to Financial Statements September 30, 2001 (b) On January 9, 1992, the City entered into a loan agreement with the Gran Central Corporation (GCC) to finance 50% of the cost to acquire a parcel of property within the SEO/PW CRA Area and relocate and widen Northwest First Avenue between Northwest First Street and Northwest Eighth Street. The loan, in the amount of $1,708,864, does not bear interest and is payable from tax increment funds received from the City and County within a designated Area defined in the loan documents on a junior and subordinate basis to the lien granted to holders of the $11,500,000 Community Redevelopment Revenue Bonds, Series 1990. GCC is to be fully repaid by the year 2008 with annual payments to be made to the extent funds are generated by tax increment revenue within the designated Area, as defined in the loan document, is available after required payments for the Series 1990 Bonds debt service and any requirement of the reserve fund or reserve product, as defined in the Series 1990 Bond indenture. As of September 30, 2001, no payments have been made by the City. (7) Related Party Transactions During the fiscal year 2001, $554,148 was received from the City for the purpose of making payments for certain construction related expenditures. The balance due to the City at September 30, 2001 is payable in full by September 30, 2002. During the fiscal year 2001, $765,350 was received from the City of Miami Omni Community Redevelopment Agency, (the Omni), for the purpose of making payments for certain preconstruction expenditures. At September 30, 2001, the remaining balance of $531,736 is payable in full by September 30, 2002. (8) Tax Increment Revenue The Agency's primary source of revenue is tax -increment funds. This revenue is computed by applying the operating tax rate for the City and the County, multiplied by the increased value of property located within the boundaries of the redevelopment areas of the Agency, over the base property value, minus 5%. Both the City and the County are required to fund this amount annually without regard to tax collections or other obligations. (9) State of Florida Revenue Sharing The Florida Revenue Sharing Act of 1922, Part 11, Chapter 218, Florida Statutes provides for the distribution of certain revenue by the state to units of local government, including municipalities, such as the City. The shared revenue is computed based on a formula on the sum of state cigarette tax, state road tax and state motor fuel tax (Guaranteed Entitlement Revenue). The $11,500,000 City of Miami, Florida Community Redevelopment Revenue Bonds, Series 1990 is secured by a pledge of $300,000 per year by the City from the proceeds of its Guaranteed Entitlement Revenue, in addition to the tax increment revenue received by the City and County. As a result, the City deposits $300,000 per year with the trustees of the bond indenture which represents its portion of the state of Florida's shared revenue for the payment of principal and interest on the bonds. O/CRA SEOPW/CRA � _ 8 � � � � 162 s 2 (Continued) 0 CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Notes to Financial Statements September 30, 2001 (10) Parking Lease Revenue On February 23, 1988, the City and the Department of Off -Street Parking (DOSP), a discretely presented component unit of the City, entered into an agreement whereby DOSP leased certain lots surrounding the Miami Arena. The term of the lease agreement was for a period of five years, which commenced on June 1, 1988 and expired on June 1, 1993. DOSP paid the City $500,000 upon signing the lease agreement and agreed to pay annually as rent eighty-five percent (85%) of gross revenue earned net of operating expenses incurred on the operations of the leased lots for each respective lease year. On October 20, 1993, the City and DOSP entered into an agreement to extend the lease term of the original agreement which expired on June 1, 2000. Currently, the City and DOSP have extended the lease agreement to an undetermined amount of time. All of the lots leased to DOSP are within the limits of the Southeast Overtown district, therefore, the City allocates all moneys received from DOSP to the Southeast Overtown district. (11) New Accounting Pronouncement In December 1998, the Governmental Accounting Standards Board (GASB) issued GASB Statement No. 33, "Accounting and Financial Reporting for Non -Exchange Transactions" effective for periods beginning after June 15, 2000. The Statement established financial reporting standards to guide state and local governments' decisions about when (in which fiscal year) to report the results of non -exchange transactions involving cash and other financial and capital resources. The Agency has evaluated the effect of implementing this new pronouncement and has determined there is no material impact of the financial statements. (12) Commitments and Contingencies The Agency is contractually obligated for approximately $549,000 at September 30, 2001, for construction projects. The Agency incurred $74,417 in operating lease expenses for facilities and equipment during the fiscal year ending September 30, 2001. The following is a summary of operating lease payments under non - cancelable operating leases: 2002 $ 90,970 2003 94,219 Total 1 5 1 L9 SWIM 13 ©NMI / CRA i�2- Mnued) 62- 86 CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST REDEVELOPMENT AGENCY (A COMPONENT UNIT OF THE CITY OF MIAMI, FLORIDA) Notes to Financial Statements September 30, 2001 On September 28, 2001, the Agency by resolution SEOPW/CRA 01-74 dated June 25, 2001, agreed to advance to the State of Florida, Department of Transportation (Department) an amount not to exceed $500,000 for the Port Access Improvements Project. In addition, the Department has agreed to repay the Agency for the advance funds in lump sum amounts no longer than 90 days from July 1, 2002. The Departments performance and obligation to pay under the agreement is contingent upon an annual appropriation by the State of Florida. On May 17, 2001, the Agency awarded a grant in the amount of $750,000 to the Technology Center of the Americas, LLC. (TCOTA). The grant award shall be used for site infrastructure, road, utilities, in connection with a Network Access Point/telecom facility. As of September 30, 2001, the Agency has paid $375,000 in grant monies to TCOTA and the remaining commitment of $375,000.is to be disbursed through the fiscal year 2002. The Agency is a defendant in several legal actions. The outcome of these actions cannot be determined at this time, but management is at the opinion that liability, if any, from these actions will not have a material effect on the Agency's financial condition. SE(OPW/C"I 14 OM 4TI/CRA Off- 86 �2 Lm ITEM 6A CITY Y Of` MIAM1. FLORIDA 1 ORAND ,d Chairman Arthur E. Teele, Jr. and Members of the CRA Board From: Annette Lewis Acting Executive Director RECOMMENDATION Date: October 14, 2002 ; � i, : SL1hject: Discussion and Review of Accepted Final CRA Budget for Fiscal Year 2002 Rei-erences: ErtC-10 AA r, S: Review and Discussion of the Board approved the final CRA budget for Fiscal Year 2002 for South East Overtown/Parkwest Community Redevelopment Agency (SEOPW/CRA) and OMNI Community Redevelopment Agency (OMNUCRA) (Deferred from July 29, 2002 JUSTIFICATION On July 29'', 2002, the Community Redevelopment Agency Board of Directors adopted Resolution SEOPW/CRA R-02-130 and OMNI/CRA 02-61, approving and transmitting the adjusted Budget of the South East Overtown/Parkwest Community Redevelopment Agency (SEOPW/CRA) and OMNI Community Redevelopment Agency (OMNI/CRA), for Fiscal Year Ending 2002, to the City of Miami and Miami -Dade County. This budget is being submitted to the Board of Directors documents all final ratification's to the Fiscal Year 2002 budget. (;Ni M/CRA 02- 86 SEOPW/CRC. 62- 162 Cr )2 Proposeu einal Budget GENERAL FUND Final FY '02 (as of 6/29) FY '02 Actual Amended Revenues 055011 070 Rental Properties 094 Interest on investments 140 Transfer from Comm. Development. 11,059 1,0 193 Contribution from General Fund 488,150 244 Carryover Fund Balance 186,326 279,488 736 Contibution from Off -Street Pkg, 1,400,000 749 Gain/(loss) on investments 23,356 23,3566,753 Total revenues (6,753) (8,400) 213,987 2,197,594 Expenditures 550011 001 Salaries - Classfied Perm. FT 74,691 � 006 Earned Time Payoff 125,742 I 010 Salaries- Unclassified 1,001 1,001 n 080 Expense Allowance 186,594 493,210 (:�o 083 Car Allowance - O� 100 Social Security Contribution 130 Group Insurance Contrib. 19,693 47,426 1 Worker's Compensation 15,129 20,00050 C.� 160 Unenployment Compensation 62 290 ts,D ® 170 Severance Pay 549 - I `0 180 Tuition Reimbursement 3,882 5,000 375 2,500 Page 1 of 3 Cr 32 Proposed anal Budget GENERAL FUND FV'02 (as of 6/29) FY'02 Actual Amended 230 Professional Svc. Appraisal - 15,000 250 Professional Svc. -Legal 148,105 180,000 270 Professional Svc. - Other 392,834 435,573 280 Professional Svc. -Accounting 4,563 25,000 287 Advertising 63,673 95,000 289 Special Svc. - miscellaneous(City Clerk) - 35,000 330 Taxes 340 Other Contractural svc. 190,856 232,731 410 Travel & Per Diem - Training 485 3,000 420 Travel & Per Diem - Other 5,178 7,050 495 Parking Expense 11,100 20,000 510 Communication Svc. - Telephone 36,769 46,800 533 Postage 604 1,000 534 Delivery Services 5,787 7,094 560 Utility Svc. -Water 5,970 9,800 610 Rent of Equipment outside 16,907 30,000 620 Rent Buildings 70,676 88,000 650 Insurance -Liability (1,623) 5,700 670 Repair/Maintenance-outside _ 680 Printing/Binding outside 20,003 25,000 i" 690 1 Promotional activities 36,621 45,000 700 Office Supplies (275) 8,500 0 710 Food 00 722 Miscellaneous supplies (42) 4,377 1,500 760 Books Publications Memberships 6,299 8,900 810 Land W 840 Equipment - New p 841 1 Office Furniture - new _ 2,500 843 Equipment - Lease -purchased _ n 901 Personal Services _ Page 2 of 3 0 903 Materials and supplies 940 Other Grants & Aids xxx Allocation to City Atty. 996 Budget Reserve Total expenditures C' )2 Proposeu -inal Budget GENERAL FUND FY'02 (as of 6/29) Actual FY '02 Amended 59,949 60,000 22,648 35,000 - 75,000 1,399,063 2,197,594 0 Page 3 of 3 4 _.l ITEM 7.13 RESOLUTION NO, SEOPW/CRA R- 0 2 - 3 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SOUTHEAST OVERTOWN/PART{ WEST (SBOPW) COMMUNITY REDEVELOPMENT AGENCY (CRA) APPROVING AND TRANSMITTING THE ADJUSTED BUDGET OF THE SEOPW COMMUNITY REDEVELOPMENT AGENCY FOR FISCAL YEAR ENDING 2002 AS DETAILED IN EXHIBIT "A" TO THE CITY OF MIAMI COMMISSION AND MIAMI-DADE COUNTY, NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE SEOPW COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF NUAMI FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are incorporated .herein as if fully set forth in this Section. Section 2. The CRA Executive Director is hereby authorized ro transmit the approved Adjusted Budget of the SEOPW Corrununity Redevelopment Agency for fiscal year ending 2002 to the City of Miami Commission and Miami -Dade County. Section .3. This resolution shall be effective immediately upon its adoption, PASSED AND ADOPTED this 29"' day of July, 2002. Arthur E. Teele, Jr., Chairman Priscilla A. Thompson Clerk of the Board APPROVED AS TO FORM AND CORRECTNESS: - Alejandro Vilarello _ CRA General Counsel ()M i/CRA SEOPW/CRA CRA AGFINWA, July 29, 2002 02- 86 112- 162 ITEM 7C RESOLUTION NO, OMNUCRA R- 0 2 — 6 1 A RESOLUTION OF THE .BOARD OF DIRECTORS OF THE OMNI COMMUNITY REDEVELOPMENT AGENCY (CRA) APPROVING AND TRANSMITTING THE ADJUSTED BUDGET OF THE OMNI COMMUNITY REDEVELOPMENT AGENCY FOR FISCAL YEAR ENDING 2002 AS DETAILED IN EXHIBIT "A" TO THE C]TY OF MIA.MI COMMISSION AND MIAMI-DADS COUNTY. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE OMNI COMMUNITY REDEVELOPMENT AGENCY OF THE CT>["Y OF MIAMI, FLORIDA: Section I The recitals and findings contained in the Preamble to this Resolution are incorporated herein as if fully set forth in this Section. Section 2. The CRA Executive Director is hereby authorized to transmit the approved Adjusted Budget of the OMNI Community Redevelopment Agency for fiscal year ending 2002 to the City of Miami Commission and Miami -Dade County, Section 3. This resolution shall be effective immediately upon its adoption. PASSED AND ADOPTED this 29`� day of July, 2002, Priscilla A. Thompson Clerk of the Board APPROVED AS TO FORM AND CORRECTNESS: Alejandro Vilarello CRA General Counsel Arthur E. Teele, Jr., Chairman 4��OMNI/CRA SEOPW/c�GYNDA July29,2002 V 2 —' 8 6 V 2 r 162 TOTAL P. 17