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HomeMy WebLinkAboutR-01-1330J-01-1049 12/06/01 RESOLUTION NO. w'" _ r�; _rJr Op A RESOLUTION OF THE MIAMI CITY COMMISSION ACCEPTING PAYMENT OF $194,924.35 FROM MCI WORLDCOM COMMUNICATIONS INC., (MCI) IN FULL AND COMPLETE SETTLEMENT OF ANY AND ALL CLAIMS, DEMANDS AND DISPUTES THE CITY HAS AGAINST MCI REGARDING THE PROVISION OF TELECOMMUNICATION SERVICES TO THE CITY UNDER THE CITY RIGHT-OF-WAY AGREEMENT DATED JANUARY 23, 1992, AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE SETTLEMENT AGREEMENT AND RELEASE ATTACHED AS EXHIBIT "A" FOLLOWING RECEIPT OF PAYMENT. WHEREAS, MCI and City entered into a five year Agreement dated January 23, 1992, (the "Right-of-way Agreement") wherein, among other things, MCI agreed to provide Long distance services and rates to the City substantially consistent with the lowest rates provided by MCI to other municipalities of equivalent size; and WHEREAS, the June 13'h, 2000, internal audit conducted by the City (Internal Audit No. 00-008) revealed certain differences between the terms of the Right-of-way Agreement and the long distance rates paid by the City to MCI throughout the five year term of the agreement and for the ensuing years following the expiration of the agreement (i.e., overpayments); and CITY COMMISSION KEET'.:`I OF DEC 1 "' '711 Rpsnlution No. WHEREAS, the City's Internal Auditor, Audit Advisory Committee and City Attorney, have reviewed and recommend acceptance of the MCI settlement offer of a one-time payment of $194,924.35 as full and final settlement of the City's claims under the Right-of-way Agreement, attached as Exhibit "A"; and WHEREAS, the City Commission finds it in the best interest of the citizens and residents of the City to accept the City's Internal Auditor, Audit Advisory Committee and City Attorney recommendation and authorize the City Manager to execute the attached settlement agreement; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are adopted by reference and incorporated as if fully set forth in this Section. Section 2. The City Manager is authorized to accept payment of $194,924.35 from MCI WORLDCOM Communications Inc., in full and complete settlement of any and all claims and demands by the City of Miami, regarding the provision of telecommunication services to the City under the City Right--of--way Agreement dated January 23, 1992. Furthermore, the City Manager is authorized to execute the settlement agreement and release attached as Exhibit "A. rr Page 2 of 3 Section 3. This Resolution shall become effective immediately upon its adoption and signature of the Mayorl/. PASSED AND ADOPTED this 13th day of December , 2001. MANUEL A. DIAZ, MAYOR In accordance with Miami Code Sec. 2-36, sinco the Mayor (lid not indicate ap;)rc!r' I of this legislation by sinning it in the dosignc,ted p€ xc_ t:,rovidf )d, said becomes effective with tate akpsac cif ton (10) � m tho date n,13 i Isic;n -on regarding same, without the Mayor mercis/9Jt o• Walter d. Foornm/CiA Ck)rk ATTEST: WALTER J. FOEMAN CITY CLERK APPROVED A GOrFORM AND CORRECTNESS: ATTORNEY -01 5853:ymt 1� If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission, Page 3 of 3 0 CITY OF MIAMI 0 CAw25 CITY ATTORNEY'S OFFICE MEMORANDUM _aoV TO: Mayor and Members of the f00ryJVmmission FROM: Alejandro Vilarello,ityorney� DATE: December 6, 2001 RE: MCI Long Distance4O'elephone Services; City Vommission Resolution No. 92-39 & City Internal Audit No. 00-008. HISTORICAL FACTS On January 9, 1992, the City Commission adopted Resolution No. 92-39 which authorized the City Manager to execute an agreement with MCI Telecommunications Corporation now doing business as MCI WORLDCOM Communications Inc., (hereinafter, referred to as "MCI") wherein among other things MCI agreed to provide long distance telephone services at rates "substantially consistent with the lowest rates currently provided by MCI to any municipalities of equivalent size The agreement was entered .into on January 23, 1992, for a maximum five-year term. The majority of the above-mentioned agreement, as well as, the authorizing Resolution concerned the economic need and funding for the proposed MCI Relay Service Center from Community Development Block Grant Funds and funds generated from the Southeast Overtown/Park West Tax Increment District and the Omni Tax Increment District. However, Section 7 of the Resolution and the Agreement each provided that the City accepted resolution of amounts it claimed outstanding, due and owing from MCI for telecommunication fees for use of City right-of-way and agreed to switch to and receive long distance telephone services from MCI. The inclusion of long distance telephone services in the Agreement was not as a result of an award based on competitive bids. The Agreement was not renewed nor was a new agreement entered into following January 23, 1997, when the Agreement expired by its own terms. However, the City continued to receive and pay for long distance telephone services from MCI to the present date at prevailing MCI tariff rates. On June 13, 2000, the City Office of Internal Audits released Audit No. 00-008 regarding the above-mentioned Mayor and Members of the City Commission December 5, 2001 Page 2 of 2 Re: MCI Long Distance Telephone Services. Agreement (hereinafter, referred to as the "Audit"). The Audit found, in pertinent part, overpayments by the City, to MCI of approximately $200,000.00 for the five-year team of the Agreement. The Audit was provided to MCI ultimately resulting in the proposed settlement offer from MCI of a one-time cash payment to the City in the amount of $194,924.35, as full and final settlement of the City's claims against MCI under the Agreement. This amount represents approximately 97% of the estimated overpayment by the City during the term of the Agreement. Furthermore, the City is in no way obligated to any term with MCI and is free to select other vendor(s) at any time. RECOMMENDATION The City's Internal Auditor, Audit Advisory Committee and City Attorney have reviewed and recommend acceptance of the above-mentioned. settlement offer along with the execution of the attached Settlement and Release Agreement. C: Carlos A. Gimenez, City Manager Walter J. Foeman, City Clerk Dr. Igwe, Director Internal Audit Elaine Buza, Telecommunications wo99