HomeMy WebLinkAboutR-97-0544J-97-536
7/24/97
RESOLUTION NO. 9 7` 544
A RESOLUTION, WITH ATTACHMENT (S), APPROVING
THE "DISSOLUTION PLAN FOR THE CITY OF MIAMI",
DATED JULY 24, 1997, ATTACHED HERETO AND AND
MADE A PART HEREOF.
WHEREAS, the City Commission, pursuant to Resolution
No. 97-330 adopted May 7, 1997, called and provided for a special
municipal election to be held on Thursday, September 4, 1997, for
the purpose of submitting to the qualified electors of the City
of Miami for their approval or disapproval, the question of
whether the City of Miami shall retain its existence as a
municipality and not be abolished effective September 30, 1998;
and
WHEREAS, the provisions of said Resolution required that the
City provide for public review, no less than thirty days prior to
the election, a proposal for the transfer of the City of Miami's
municipal functions, services, responsibilities and liabilities
in the event of a favorable vote on dissolution by the electorate
on September 4, 1997;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY
OF MIAMI, FLORIDA:
I
As
f Z7 tit,
rat
C%T COMOSSION
MEETING OF
J U L 2 4 1997
MR�esolution No.
9l- 544
0
11
Section 1. The recitals and findings contained in the
Preamble to this Resolution are hereby adopted by reference
hereto and incorporated herein as if fully set forth in this
Section.
Section 2. The "Dissolution Plan for the City of Miami,,,
dated July 24, 1997, attached hereto and made a part hereof, is
hereby approved.
Section 3. This Resolution shall become effective
immediately upon its adoption.
PASSED AND ADOPTED this 24th day of July , 1997.
CA LLO, MAYOR
ATTE
WALTER\L..APMMV
CITY CLERK
APPROVED AS TO FORM AND CORRECTNESS:
A. QMfNN 5fQ I f I
CITY ATT EY
BSS:W1775
- 2 - 97- 544
•
•
Dissolution Plan for the City of Miami
Dated: July 24, 1997
L�
I - Introduction
On May 7, 1997, the City Commission adopted Resolution No. 97-330 which called ford
special election to be held on Thursday, September 4, 1997, for the electors of the City of
Miami to approve or disapprove the question as to whether the City of Miami shall retain
its existence as a municipality and not be abolished. The effective date of the City's
dissolution shall be September 30, 1998, if so decided by the electorate.
Pursuant to the resolution, the City Manager was directed to prepare a proposal for the
transfer of municipal functions, services, responsibilities and liabilities, in the event of a
favorable vote on the municipal corporation's dissolution by the electorate. This proposal
(the "dissolution plan") must be presented to the electorate no later than 30 days prior to
the election. This document is the dissolution plan.
The City Commission and City Administrafion have fiduciary responsibilities to ensure
that the citizens, creditors, vendors and employees of the City of Miami are as protected
as can be during the dissolution process.
The default government -- that is, the government to provide municipal services to the
geographic area of Miami should it be dissolved -- is Metro -Dade County, specifically,
the Unincorporated Municipal Service Area (UMSA). Although UMSA will be there to
provide municipal services if the electorate votes to dissolve the City, it cannot under
existing law absorb and pass through to all of its citizens the costs associated with the
past liabilities of the Geographic Area Formerly Known as Miami (GAFKAM). That is
the reason why a Special Assessment Taxing District will be created to pay for, over
time, those outstanding liabilities existing at the time of dissolution.
Logistically, in order to ensure that the dissolution of the City of Miami is done legally
correct and. in an equitable fashion, and to guarantee that municipal services to the
GAFKAM are adequately provided, literally hundreds of decisions need to be made and
items addressed. It is for this reason that this dissolution plan addresses the liquidation of
broad classes of assets and liabilities and the transfer of certain distinct municipal
functions.
97- 544
II - General Operating Parameters
A) Should the electorate vote to dissolve the City, all sections of the City Charter other
than Section 1 though Section 4, inclusive, shall be immediately suspended and the
City of Miami shall be otherwise operating pursuant to this document. Nothing herein
shall prevent the City Commission from reinstating any portion of the City Charter
through adoption of an enabling City resolution, if it is beneficial to do -so.
B) The current City Commission shall remain in place through September 30, 1998, to
serve as the board of directors of the municipal corporation to ensure a smooth
transition during the dissolution process.
C) All actions of the City Commission during this time frame shall be approved by the
State Financial Emergency Oversight Board.
D) The City Commission shall appoint a professional Receiver who shall advise the City
Manager throughout the dissolution process as to the best business methods to
employ in the liquidation of assets and liabilities.
E) As further elaborated below, one or more trust estates may be created as the end of
business on September 30, 1998. Competent trustees shall be named by the City
Commission and the expenses of the trustees shall be paid out of such trust estates.
F) All decisions dealing with the disposition of assets shall be governed by the "prudent
person" doctrine.
G) The City Commission and City Administration shall work with their counterparts at
the County level to ensure a smooth transition of municipal functions to Metro -Dade
County.
H) Services by the City of Miami shall cease to exist as of September 30, 1998, unless it
can be accomplished prior to that time.
III - The Payment of Outstanding Long-term Liabilities
A) Long-term Bonded Debt
1) There currently exists an escrow agreement with First Union National Bank
(the "Escrow Agent") whereby First Union receives all debt service payments
from the City for ultimate dissemination to the appropriate Bond Trustee or
Bond Paying Agent. The duration of this escrow agreement shall be extended
to cover the life of all existing debt issues and the scope of the agreement shall
2 97- 544
also be modified to provide for the payment of other long-term liabilities
(such as certain pension liabilities). All expenses of the Escrow Agent shall
be paid for by excess interest earnings related to the temporary investment of
escrow proceeds.
2) The debt service millage associated with existing General Obligation debt
(outstanding amount = $170.65 Million at 9/30/96 and projected debt service
and millage of $20.13 Million and 1.92 mills for FY 1998, respectively) shall
continue to be assessed on the GAFKAM for so ..long as the debt is
outstanding. The Dade County Tax Collector will be obligated to transmit the
proceeds of this debt service tax collection to the Escrow Agent in accordance
to its normal tax distribution procedures.
3) On an annual basis and in accordance to State budgetary laws, the Dade
County Commission shall approve a Special Tax Assessment assessed on the
GAFKAM to pay for the debt service associated with existing Special
Obligation and Revenue bonded debt (outstanding amounts of $228.32
Million and $60.21 Million, respectively, as of 9/30/96). The Dade County
Tax Collector will be obligated to transmit the proceeds of .this debt service
tax collection to the Escrow Agent in accordance to its normal tax distribution
procedures.
B) Insurance Claims Outstanding
On an annual basis and in accordance to State budgetary laws, the Dade County
Commission shall approve a Special Tax Assessment assessed on the GAFKAM to pay
for the estimated insurance claims payable for the upcoming fiscal year associated with
the existing Worker's Compensation, General Liability, Group, Accident, and Health
Claims Payable (Actuarially determined, discounted at a rate of 3%, and valued on
9/30/96 at $77.23 Million). The Dade County Tax Collector will be obligated to transmit
the proceeds of this special tax assessment collection to the Escrow Agent in accordance
to its normal tax distribution procedures.
C) Outstanding Pension Fund Liabilities
On an annual basis and in accordance to State budgetary laws, the Dade County
Commission shall approve a Special Tax Assessment assessed on the GAFKAM to pay
for the estimated General Employees and Sanitation Employees Pension System
("GESE") past service payment obligation as dictated by a court decision related to the
"Gate's Case." In keeping with the court's approved settlement, the valuation of the
annual special tax assessment shall take into account certain pension system investment
earnings, if any. As of September 30, 1996, the outstanding value of future payments
totaled approximately $150 Million with annual payments escalating from $12 Million to
$17 Million to be made over the next ten years. The Dade County Tax Collector will be
3 = 5,44
C�
obligated to transmit the proceeds of this special tax assessment collection to the Escrow
Agent in accordance to its normal tax distribution procedures.
IV- The Payment of Current Liabilities
A) Generally Speaking
Current liabilities will be paid from current assets (cash, investments, incoming revenues,
etc. ) through the end of Fiscal Year 1998. The Receiver, to be named by the City
Commission, shall work with the City Manager to help smooth out the transition of
municipal services to the County with the intent of minimizing the negative fiscal
impacts on the City's vendors and employees and the negative operational impacts on
those services being provided by the City during the transition period.
B) Compensated Absences
City employees are entitled to payments of certain vacation and sick leave benefits upon
separation from City service. As of September 30, 1996, the accumulated unpaid
compensation balance amount totaled $ 49.4 Million. As employees are .either laid off or
transferred to the County, this amount becomes a current liability and must be provided
for from current assets. To the extent that current assets are not sufficient as of
September 30, 1998, to cover this liability, then the County Commission will be charged
with establishing a one-time Special Tax Assessment to be assessed against the
GAFKAM and due in early Fiscal Year 1999. The Dade County Tax Collector will be
obligated to transmit the proceeds of this special tax assessment collection to a Trust
Account to be established for this purpose in accordance to its normal tax distribution
procedures.
C) Excess Current Assets or Current Liabilities As of September 30, 1998
1) If, at the end of business of September -30, 1998, there exist excess current
monetary assets belonging to the City of Miami, these assets shall be turned
over to the Escrow Agent so that it may serve to reduce the annual Special
Tax Assessment to be assessed against the GAFKAM.
2) If by July 1, 1998, it is projected that there will be an excess of current
liabilities over current assets as of September 30, 1998, the County
Commission will be charged with establishing a one-time Special Tax
Assessment to be assessed against the GAFKAM and due in early Fiscal Year
1999. The Dade County Tax Collector will be obligated to transmit the
proceeds of this special tax assessment collection to a Trust Account to be
established for this purpose, in accordance to its normal tax distribution
procedures.
4 0' _ 544
V - The Disposition of Long -Term Assets
A) Real Estate Holdings that are under Lease with Third Parties
1) These properties shall be transferred to and managed by Metro -Dade County
pursuant to a Trust arrangement. All proceeds, net of reasonable management
expenses, from these lease agreements shall be transferred to the Escrow
Agent for either direct debt service payments or for the -funding of a
defeasence account to liquidate long-term debt -- both of which serve to
reduce the annual Special Tax Assessment to be assessed against the
GAFKAM.
2) Whenever a lease terminates, the subject property shall be transferred by the
County to be sold pursuant to the arrangements contemplated by section "V-
B" below.
B) Real Estate Holdings that not under Lease with Third Parties (other than Parks)
1) Arrangements, primarily through the Receiver, shall be made to liquidate
these properties, in a business -like manner and not on a "fire -sale" basis, in
order to maximize the sale proceeds that can be generated and deposited with
the Escrow Agent for either direct debt service payments or for the funding of
a defeasance account to liquidate long-term debt -- both of which serve to
reduce the annual Special Tax Assessment to be assessed against the
GAFKAM.
2) If the FEClBicentennial property is not under lease to the County, as of
September 4, 1997, then it will not be sold but rather transferred, in Trust, to
the Friends of Bayside Inc., or some other similar non-profit organization, to
be maintained as a community park in perpetuity for the benefit of the citizens
of the GAFKAM.
C) City Parks
During the course of Fiscal Year 1998, the City Commission shall, on a case -by -case
basis, determine whether individual. parks shall be transferred to Metro -Dade County to
be operated and maintained as park land or, to be sold either directly to Dade County,
should the County desire the property, or sold pursuant to section "V - B" above.
5 97- 544
D) Other Long-term Assets
All other long-term assets, e.g. rolling stock, equipment, art work etc., of the City shall be
disposed of in a business -like manner and not on a "fire -sale" basis through arrangements
recommended by the Receiver, in order to maximize the sale proceeds that can be
generated and deposited with the Escrow Agent for either direct debt service payments or
for the funding of a defeasence account to liquidate long-term debt -= both of which serve
to reduce the annual Special Tax Assessment to be assessed against the GAFKAM.
E) Transfer of Assets
Notwithstanding anything to the contrary, the City may transfer any assets covered by
sections V(A), V(B)(1), V(C), V(D) above to Metro -Dade if the City determines that such
transfer improves the cost efficiency of services to be provided to the citizens of
GAFKAM and does not unduly affect the creditors, vendors, or former employees of the
City.
VI --Transfer of Municipal' Services to Dade County
A) Effective Dates of Transfers
Effective September 30, 1998, all municipal services provided by the City of Miami shall
cease. If prior to that date it is practical to transfer certain functions to Metro -Dade and it
makes good business sense to do so, it may be accomplished by City Commission action.
B) Transfer of Employees
It is solely the decision of Metro -Dade County whether to transfer, hire, or otherwise
retain City employees for those functions transferred to the County. The City
Commission and administration will advocate the transfer of City employees to Metro -
Dade.
C) Expectations as to Levels of Service After Transfer of Functions to Metro -Dade
1) Solid Waste
Citizens living within the GAFKAM can expect to pay the County's uniform rate
of $349 per household annually and receive services similar to that provided to
the unicorporated areas of the County.
6 97- 544
2) Police and Fire Services and NET offices
The City of Miami provides a much higher level of service for these functions
than that provided in the unincorporated areas of the County primarily due to the
density of the City. After the dissolution of the City, citizens living within the
GAFKAM can expect to either receive a lower level of service for these functions
or to pay an additional Special Tax Assessment (over and above the normal
UMSA operating millage) for a level of service which is differenLthan what the
County provides in the unincorporated areas of the County.
3) All Other Municipal Functions
Metro -Dade County will have sole discretion to determine which functions shall
be provided and what level of service shall be maintained.
97- 544
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO : Honorable Mayor and Members DATE : July 17, 1997 FILE
of the CityACommission
-SUBJECT :
Discussion Item
Edward Marc�(,lez-
FROM City Mana; REFERENCES:
ENCLOSURES:
Discussion regarding the dissolution plan to be presented to the public as of August 4,
1997.
97- 544
1
Draft #1 For Discussion Purposes Only
Dissolution Plan for the City of Miami
Dated: July 24, 1997
I - Introduction
On May 7, 1997, the City Commission adopted Resolution No. 97-330 (copy attached),
which called for a special election to be held on Thursday, September 4, 1997, for the
electors of the City of Miami to approve or disapprove the question as to whether the City
of Miami shall retain its existence as a municipality and not be abolished. The effective
date of the City's dissolution shall be September 30, 1998, if so decided by the electorate.
Pursuant to the resolution, the City Manager was. directed to prepare a proposal for the
transfer of municipal functions, services, responsibilities and liabilities, in the event of a
favorable vote on the municipal corporation's dissolution by the electorate. This proposal
(the "dissolution plan") must be presented to the electorate no. later than 3.0 days prior to
the election. This document is the dissolution plan.
The City Commission and City Administration have fiduciary responsibilities to ensure
that the citizens, creditors, vendors and employees of the City of Miami are as protected
as can be during the dissolution process.
The default government -- that is, the government to provide municipal services to the
geographic area of Miami should it be dissolved -- is Metro -Dade County, specifically,
the Unincorporated Municipal Service Area (UMSA). Although UMSA will be there to
provide municipal services if the electorate votes to dissolve the City, it cannot under
existing law absorb and pass through to all of its citizens the costs associated with the
past liabilities of the Geographic Area Formerly Known as Miami (GAFKAM). That is
the reason why a Special Assessment Taxing District will be created to pay for, over
time, those outstanding liabilities existing at the time of dissolution.
Logistically, in order to ensure that the dissolution of the City of Miami is done legally
correct and in an equitable fashion, and to guarantee that municipal services to the
GAFKAM are adequately provided, literally hundreds of decisions need to be made and
items addressed. It is for this reason that this dissolution plan. addresses the liquidation of
broad classes of assets and liabilities. and the transfer of certain distinct municipal
functions.
97— 544 3
II - General Operating Parameters
A) Should the electorate vote to dissolve the City, all sections of the City Charter other
than Section 1 though Section 4, inclusive, shall be immediately suspended and the
City of Miami shall be otherwise operating pursuant to this document.
B) The current City Commission shall remain in place through September 30, 1998, to
serve as the board of directors of the municipal corporation to ensure a smooth
transition during the dissolution process.
C) All actions of the City Commission during this time frame shall be approved by the
State Financial Emergency Oversight Board.
D) The City Commission shall appoint a professional Receiver who shall advise the City
Manager throughout the dissolution process as to the best business methods to
employ in the liquidation of assets and liabilities.
E) As further elaborated below, one or more trust estates may be created as the end of
business on September 30, 1998. Competent trustees shall be named by the City
Commission and the expenses of the trustees shall be paid out of such trust estates.
F) All decisions dealing with the disposition of assets shall be governed by the "prudent
person" doctrine.
G) The City Commission and City Administration shall work with their counterparts at .
the County level to ensure a smooth transition of municipal functions to Metro -Dade
County.
1T) Services by the City of Miami shall cease to exist as of September 30, 1998, unless it
can be accomplished prior to that time.
III - The Payment of Outstanding Long-term Liabilities
A) Long-term Bonded Debt
1) There currently exists an escrow agreement with First Union National Bank
(the "Escrow Agent") whereby First Union receives all debt service payments
from the City for ultimate dissemination to the appropriate Bond Trustee or
Bond Paying Agent. The duration of this escrow agreement shall be extended
to cover the life of all existing debt issues and the scope of the agreement shall
also be modified to provide for the payment of other long-term liabilities
(such as certain pension liabilities). All expenses of the Escrow Agent shall
4 2 97- 544
be paid for by excess interest earnings related to the temporary investment of
escrow proceeds.
2) The debt service millage associated with existing General Obligation debt
(outstanding amount.= $170.65 Million at 9/30/96 and projected debt service
and millage of $20.13 Million and 1.92 mills for FY 1998, respectively) shall
continue to be assessed on the GAFKAM for so long as the debt is
outstanding. The Dade County Tax Collector will be obligated IZ transmit the
proceeds of this debt service tax collection to the Escrow Agent in accordance
to its normal tax distribution procedures.
3) On an annual basis and in accordance to State budgetary laws, the .Dade
County Commission shall approve a Special Tax Assessment assessed on. the
GAFKAM to pay for the debt service associated with existing 'Special
Obligation and Revenue bonded debt (outstanding amounts of $228.32
Million and $60.21 Million, respectively, as of 9/30/96). The Dade County
Tax Collector will be obligated to transmit the proceeds of this debt service
tax collection to the Escrow Agent in accordance to its normal tax distribution
procedures.
B) Insurance Claims Outstanding
On an annual basis and in accordance to State budgetary laws, the Dade County
Commission shall approve a Special Tax Assessment assessed on the GAFKAM to pay
for the estimated insurance claims payable for the upcoming fiscal year associated with
the existing Workmen's Compensation, General Liability, Group, Accident, and Health
Claims Payable (Actuarially determined, discounted at a rate of 3%, and valued on
9/30/96 at $77.23 Million). The Dade County Tax Collector will be obligated to transmit
the proceeds of this special tax assessment collection to the Escrow Agent in accordance
to its normal tax distribution procedures.
C) Outstanding Pension Fund Liabilities
On an annual basis and in accordance to State budgetary laws, the Dade County
Commission shall approve a Special Tax Assessment assessed on the GAFKAM to pay
for the estimated General Employees and Sanitation Employees Pension System
("GESE") past service payment obligation as dictated by a court decision related to the
"Gate's Case." In keeping with the court's approved settlement, the valuation of the
annual special tax assessment shall take into account certain pension system investment
earnings, if any. As of September 30, 1996, the outstanding value of future payments
totaled approximately $150 Million with annual payments escalating from $12 Million to
$17 Million to be made over the next ten years. The Dade County Tax Collector will be
obligated to transmit the proceeds of this special tax assessment collection to the Escrow _
Agent in accordance to its normal tax distribution procedures. -
3 97 44 5
0 .0
IV- The Payment of Current Liabilities
A) Generally Speaking
Current liabilities will be paid from current assets (cash, investments, incoming revenues,
etc. ) through the end of Fiscal Year 1998. The Receiver, to be named by the City
Commission, shall work with the City Manager to � help smooth out the: -transition of
municipal services to the County with the intent of minimizing the negative fiscal
impacts on the City's vendors and the negative operational impacts on those services
being provided by the City during the transition period.
B) Compensated Absences
City employees are entitled to payments of certain -vacation and sick leave benefits upon
separation from City service. As of September 30, 1996, the accumulated unpaid
compensation balance amount totaled $ 49.4 Million. As employees are either laid off or
transferred to the County, this amount becomes a current liability and must be provided
for from current assets. To the extent that current assets are not sufficient as of
September 30, .1998, to cover this liability, then `she County Commission will be charged
with establishing a one-time Special Tax Assessment to be assessed against the
GAFKAVn and due in early Fiscal Year 1999. The Dade County Tax Collector will be
obligated to transmit the proceeds of this special tax assessment collection to a Trust
Account to be established for this purpose in accordance to its normal tax distribution
procedures.
C) Excess Current Assets or Current Liabilities As of September 30, 1998
1) If, at the end of business of September 30, 1998, there exist excess current
monetary assets belonging to the City of Miami, these assets shall be turned
over to the Escrow Agent so that it may serve to reduce the annual Special .
Tax Assessment to be assessed against the GAFKAM.
2) If by July 1, 1998, it is projected that there will be an excess of current
liabilities over current assets as of September 30, 1998, the County
Commission will be charged with establishing a one-time Special Tax
Assessment to be assessed against the GAFKAM and due in early Fiscal Year
1999.. The Dade County Tax Collector will be obligated to transmit the
proceeds of this special tax assessment collection to a. Trust Account to be
established for this purpose, in accordance to its normal tax distribution
procedures.
6 4 97- 544
V - The Disposition of Long -Term Assets
A) Real Estate Holdings that are under Lease with Third Parties
1) These properties shall be transferred to and managed by Metro -Dade County.
pursuant to a Trust arrangement. All proceeds, net of reasonable management
expenses, from these lease agreements shall be transferred to the Escrow
Agent for either direct debt service payments or for the funding �Pf a
defeasence account to liquidate long-term debt -- both of which serve to
reduce the annual Special Tax Assessment to be assessed against the
GAFKAM.
2) Whenever a lease terminates, the subject property shall be transferred by the
County to be sold pursuant to the arrangements contemplated by sectidri "V-
B" below..
B) Real Estate Holdings that not under Lease with Third Parties (other than Parks)
1) Arrangements, primarily through the Receiver, shall be made to liquidate
these properties, in a business -like manner and not on a "fire -sale" basis; in
order to maximize the sale proceeds that can be generated and deposited with
the Escrow Agent for either direct debt service payments or for the funding of
a defeasance account to liquidate long-term debt -- both of which serve to
reduce the annual Special Tax Assessment to be assessed against the
GAFKAM.
2) If the FECBicentennial property is not under lease to the County, as of
September 4, 1997, then it will not be sold but rather transferred, in Trust, to
the Friends of Bayside Inc., or some other similar non-profit organization, to
be maintained.as a community park in perpetuity for the benefit of the citizens
of the GAFKAM.
Q City Parks
During the course of Fiscal Year 1998, the City Commission shall; on a case -by -case
basis, determine whether individual parks shall be transferred to Dade County to be
operated and maintained as park land or to be sold pursuant to section "V - B" above.
D) Other Long-term Assets
All other long-term assets, e.g. rolling stock, equipment, art work etc., of the City shall be
disposed of in a business -like manner and not on a "fire -sale" basis through arrangements
recommended by the Receiver, in order to maximize the sale proceeds that can be
generated and deposited with the Escrow Agent for either direct debt service payments or
97- 544 7
for the funding of a defeasence account to liquidate long-term debt -- both of which serve
to reduce the annual Special Tax Assessment to be assessed against the GAFKAM.
VI - Transfer of Municipal Services to Dade County
A) Effective Dates of Transfers
Effective September 30, 1998,'all municipal services provided by the City of Miami shall
cease. If prior to that date it. is practical to transfer certain functions to Metro -Dade and it
makes good business sense to do so, it may be accomplished by City Commission action:
B) Transfer of Employees and Pension System Participation
It is solely the decision of Metro -Dade County whether to transfer, hire, or otherwise
retain City employees for those functions transferred to the County. Likewise, it is the
County's sole decision as to whether to allow the employees who are transferred, hired,
or otherwise retained to continue to participate under their pension plans or to require
participation under the Florida Retirement System.
C) Expectations as to Levels of Service After Transfer of Functions to Metro -Dade
1) Solid Waste
Citizens living within the GAFKAM can expect to pay the County's uniform rate
of $349 per household annually and receive services similar to that provided to
the unicorporated areas of the County.
2) Police and Fire Services and NET offices
The City of Miami provides a much higher level of service for these functions
than that provided in the unincorporated areas of the County primarily due to the
density of the City. After the dissolution of the City, citizens living within the
GAFKAM can expect to either receive a lower level of service for these functions
or to -pay an additional Special Tax Assessment (over and above the normal
UMSA operating millage) for a level of service which is different than what the
County provides in the unincorporated areas of the County.
3) All Other Municipal Functions
Metro -Dade County will have sole discretion to determine which functions shall
be provided and what level of service shall be maintained.
8 6 97- 544
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO : Walter J. Foeman DATE August 4, 1997 FILE
City Clerk
SUBJECT : Dissolution Plan for the
City of Miami
FROM Edward Marq eZ REFERENCES
City Manager I ) ENCLOSURES:
Attached please find the Dissolution Plan for the City of Miami to be filed as an original
document within the City Clerk's office.
If you have any questions, please do not hesitate to contact me.
Attachments
.-)
_+ >9
: i3
_< 0
M
-4 rT1
-�
-
71
3
Dissolution Plan for the Citv of Miami
Dated: July 24, 1997
I - Introduction
On May 7, 1997, the City Commission adopted Resolution No. 97-330 which called for a
special election to be held on Thursday, September 4, 1997, for the electors of the City of
Miami to approve or disapprove the question as to whether the City of Miami shall retain
its existence as a municipality and not be abolished. The effective date of the City's
dissolution shall be September 30, 1998, if so decided by the electorate.
Pursuant to the resolution, the City Manager was directed to prepare a proposal for the
transfer of municipal functions, services, responsibilities and liabilities, in the event of a
favorable vote on the municipal corporation's dissolution by the electorate. This proposal
(the "dissolution plan") must be presented to the electorate no later than 30 days prior to
the election. This document is the dissolution plan.
The City Commission and City Administration have fiduciary responsibilities to ensure
that the citizens, creditors, vendors and employees of the City of Miami are as prote3ted
as can be during the dissolution process.
The default government -- that is, the government to provide municipal services to the
geographic area of Miami should `it be dissolved -- is Metro -Dade County, specifically,
the Unincorporated Municipal Service Area (UMSA). Although UMSA will be there to
provide municipal services if the electorate votes to dissolve the City, it cannot under
existing law absorb and pass through to all of its citizens the costs associated with the
past liabilities of the Geographic Area Formerly Known as Miami (GAFKAM). That is
the reason why a Special Assessment Taxing District will be created to pay for, over
time, those outstanding _liabilities existing at the time of dissolution.
Logistically, in order to ensure that the dissolution of the City of Miami is done legally
correct and. in an equitable fashion, and to guarantee that municipal services to the
GAFKAM are adequately provided, literally hundreds of decisions need to be made and
items addressed. It is for this reason that this dissolution plan addresses the liquidation of
broad classes of assets and liabilities and the transfer of certain distinct municipal
functions.
II - General Operating Parameters
A) Should the electorate vote to dissolve the City, all sections of the City Charter other
than Section 1 though Section 4, inclusive, shall be immediately suspended and the
City of Miami shall be otherwise operating pursuant to this document. Nothing herein
shall prevent the City Commission from reinstating any portion of the City Charter
through adoption of an enabling City resolution, if it is beneficial to do -so.
B) The current City Commission shall remain in place through September 30, 1998, to
serve as the board of directors of the municipal corporation to ensure a smooth
transition during the dissolution process.
C) All actions of the City Commission during this time frame shall be approved by the
State Financial Emergency Oversight Board.
D) The City Commission shall appoint a professional Receiver who shall advise the City
Manager throughout the dissolution process as to the best business methods to
employ in the liquidation of assets and liabilities.
E) As further elaborated below, one or more trust estates may be created as the end of
business on September 30, 1998. Competent trustees shall be named by the City
Commission and the expenses of the trustees shall be paid out of such trust estates.
F) All decisions dealing with the _disposition of assets shall be governed by the "prudent
person" doctrine.
G) The City Commission and City Administration shall work with their counterparts at
the County level to ensure a smooth transition of municipal functions to Metro -Dade
County.
H) Services by the City of Miami shall cease to exist as of September 30, 1998, unless it
can be accomplished prior to that time.
III - The Payment of Outstanding Long-term Liabilities
A) Long-term Bonded Debt
1) There currently exists an escrow agreement with First Union National Bank
(the "Escrow Agent") whereby First Union receives all debt service payments
from the City for ultimate dissemination to the appropriate Bond Trustee or
Bond Paying Agent. The duration of this escrow agreement shall be extended
to cover the life of all existing debt issues and the scope of the agreement shall _
2
also be modified to provide for the payment of other long-term liabilities
(such as certain pension liabilities). All expenses of the Escrow Agent shall
be paid for by excess interest earnings related to the temporary investment of
escrow proceeds.
2) The debt service millage associated with existing General Obligation debt
(outstanding amount = $170.65 Million at 9/30/96 and projected debt service
and millage of $20.13 Million and 1.92 mills for FY 1998, respectively) shall
continue to be assessed on the GAFKAM for so ..long as the debt is
outstanding. The Dade County Tax Collector will be obligated to transmit the
proceeds of this debt service tax collection to the Escrow Agent in accordance
to its normal tax distribution procedures.
3) On an annual basis and in accordance to State budgetary laws, the Dade
County Commission shall approve a Special Tax Assessment assessed on the
GAFKAM to pay for the debt service associated with existing Special
Obligation and Revenue bonded debt (outstanding amounts of $228.32
Million and $60.21 Million, respectively, as of 9/30/96). The Dade County
Tax Collector will be obligated to transmit the proceeds of this debt service
tax -collection to the, Escrow Agent in accordance to its normal tax distribution .... _._. _
procedures.
B) Insurance Claims Outstanding
On an annual basis and in accordance to State budgetary laws, the Dade County
Commission shall approve a Special Tax Assessment assessed on the GAFKAM to pay
for the estimated insurance claims payable for the upcoming fiscal year associated with
the existing Worker's Compensation, General Liability, Group, Accident, and . Health
Claims Payable (Actuarially determined, discounted at a rate of 3%, and valued on
9/30/96 at $77.23 Million). The Dade County Tax Collector will be obligated to transmit
the proceeds of this special tax assessment collection to the Escrow Agent in accordance
to its normal tax distribution procedures.
C) Outstanding Pension Fund Liabilities
On an annual basis and in accordance to State budgetary laws, the Dade County
Commission shall approve a Special Tax Assessment assessed on the GAFKAM to pay
for the estimated General Employees and Sanitation Employees Pension System
("GESE") past service payment obligation as dictated by a court decision related to the
"Gate's Case." In keeping with the court's approved settlement, the valuation of the
annual special tax assessment shall take into account certain pension system investment
earnings, if any. As of September 30, 1996, the outstanding value of future payments
totaled approximately $150 Million with annual payments escalating from $12 Million to
$17 Million to be made over the next ten years. The Dade County Tax Collector will be
t�l
obligated to transmit the proceeds of this special tax assessment collection to the Escrow
Agent in accordance to its normal tax distribution procedures.
IV- The Payment of Current Liabilities
A) Generally S ep aking
Current liabilities will be paid from current assets (cash, investments, incoming revenues,
etc. ) through the end of Fiscal Year 1998.. The Receiver, to be named by the City
Commission, shall work with the City Manager, to help smooth out the transition of
municipal services to the County with the intent of minimizing the negative fiscal
impacts on the City's vendors and employees and the negative operational impacts on
those services being provided by the City during the transition period.
B) Compensated Absences
City employees are entitled to payments of certain vacation and sick leave benefits upon
separation from City service. As of September 30, 1996, the accumulated unpaid
compensation balance amount totaled $ 49.4 Million. As employees are .either laid off or
_ tnuisferred to the County, this amount becomes a current liability and must be provided
for from current assets. To the extent that current assets are not sufficient as of
September 30, 1998, to cover this liability, then. the County Commission will be charged
with establishing a one-time Special Tax Assessment to be assessed against the
GAFKAM and due in early Fiscal Year 1999. The Dade County Tax Collector will be
obligated to transmit the proceeds of this special tax assessment collection to a Trust
Account to be established for this purpose in accordance to its normal tax distribution
procedures.
C) Excess Current Assets or Current Liabilities As of September 30, 1998
1) If, at the end of business of September 30, 1998, there exist excess current
monetary assets belonging to the City of Miami, these assets shall be turned
over to the Escrow Agent so that it may serve to reduce the annual Special
Tax Assessment to be assessed against the GAFKAM.
2) If by July 1, 1998, it is projected that there will be an excess of current
liabilities over current assets as of September 30, 1998, the County
Commission will be charged with establishing a one-time Special Tax
Assessment to be assessed against the GAFKAM and due in early Fiscal Year
1999. The Dade County Tax Collector will be obligated to transmit the
proceeds of this special tax assessment collection to a Trust Account to be
established for this purpose, in accordance to its normal tax distribution
procedures.
4
V - The Disposition of Long -Term Assets
A) Real Estate Holdings that are under Lease with Third Parties
1) These properties shall be transferred to and managed by Metro -Dade County
pursuant to a Trust arrangement. All proceeds, net of reasonable management
expenses, from these lease agreements shall be transferred to the Escrow
Agent for either direct debt service payments or for the --funding of a
defeasence account to liquidate long-term debt -- both of which serve to
reduce the annual Special Tax Assessment to be assessed against the
GAFKAM.
2) Whenever a lease terminates, the subject property shall be transferred by the
County to be sold pursuant to the arrangements contemplated by section "V-
B" below.
B) Real Estate Holdings that not under Lease with Third Parties (other than Parks)
il
1) Arrangements, primarily through the Receiver, shall be made to liquidate
these properties, in a business=like manner and not on a "fire -sale" basis, in
order to maximize the sale proceeds that can be generated and deposited with
the Escrow Agent for either direct debt. service payments or for the funding of
a defeasance account to liquidate long-term debt -- both of which serve to
reduce the annual Special Tax Assessment to be assessed against the
GAFKAM.
2) If the FECBicentennial property is not under lease to the County, as of
September 4, 1997, then it will not be sold but rather transferred, in Trust, to
the Friends of Bayside Inc., or some other similar non-profit organization, to
be maintained as a community park in perpetuity for the benefit of the citizens
of the GAFKAM.
C) City Parks
During the course of Fiscal Year 1998, the City Commission shall, on a case -by -case
basis, determine whether individual parks shall be transferred to Metro -Dade County to
be operated and maintained as park land or, to be sold either directly to Dade County,
should the County desire the property, or sold pursuant to section "V - B" above.
5
D) Other Long-term Assets
All other long-term assets, e.g. rolling stock, equipment, art work etc., of the City shall be
disposed of in a business -like manner and not on a "fire -sale" basis through arrangements
recommended by the Receiver, in order to maximize the sale proceeds that can be
generated and deposited with the Escrow Agent for either direct debt service payments or
for the funding of a defeasence account to liquidate long-term debt -- both of which serve
to reduce the annual Special Tax Assessment to be assessed against the GAFKAM.
E) Transfer of Assets
Notwithstanding anything to the contrary, the City may transfer any assets covered by
sections V(A), V(B)(1), V(C), V(D) above to Metro -Dade if the City determines that such
transfer improves the cost efficiency of services to be provided to the citizens of
GAFKAM and does not unduly affect the creditors, vendors, or former employees of the
City.
VI - Transfer of Municipal Services to Dade County
A). Effective Dates of Transfers
Effective September 30, 1998, all municipal services provided by the City of Miami shall
cease. If prior to that date it is practical to transfer certain functions to Metro -Dade and it
makes good business sense to do so, it may be accomplished by City Commission action.
B) Transfer of Employees
It is solely the decision of Metro -Dade County whether to transfer, hire, or otherwise
retain City employees for those functions transferred to the County. The City
Commission and administration will advocate the transfer of City employees to Metro -
Dade.
C) Expectations as to Levels of Service After Transfer of Functions to Metro -Dade
1) Solid Waste
Citizens living within the GAFKAM can expect to pay the County's uniform rate
of $349 per household annually and receive services similar to that provided to
the unicorporated areas of the County.
6
2) Police and Fire Services and NET offices
The City of Miami provides a much higher level of service for these functions
than that provided in the unincorporated areas of the County primarily due to the
density of the City. After the dissolution of the City, citizens living within the
GAFKAM can expect to either receive a lower level of service for these functions
or to pay an additional Special Tax Assessment (over and above the noimal
UMSA operating millage) for a level of service which is different -than what the
County provides in the unincorporated areas of the County.
3) All Other Municipal Functions
Metro -Dade County will have sole discretion to determine which functions shall
be provided and what level of service shall be maintained.
7