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HomeMy WebLinkAboutR-96-0819J-96-1338 11/15/96 RESOLUTION NO. 9 r _ 8 19 A RESOLUTION ACCEPTING, IN PRINCIPLE, THE STRATEGIC FINANCIAL RECOVERY PLAN ("THE STIERHEIM REPORT"), DATED NOVEMBER 15, 1996, PRESENTED TO THE MAYOR AND CITY COMMISSION BY CITY MANAGER MERRETT R. STIERHEIM. BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The Strategic Financial Recovery Plan ("The Stierheim Report"), dated November 15, 1996, presented to the Mayor and City Commission by City Manager Merrett R. Stierheim, is hereby accepted in principle. Section 2. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 51 th day of November 1996. 0 J E CAROLLO, MAYOR ATTEST: 0", 4—e ALTER J FO CITY CLE iK�N APPROVED AS TO FORM AND CORRECTNESS: A. I J ES, III CITY AT O BY W1388:BSS .CITY COMMISSION MEETING OF NOV 1 5 1996 Resolution No. 9E- 819 0 STRATEGIC FiNANCIAL RE '. ERY PIAN r is inCoae 88ATE8 C� 18 88 n Presented to THE MAYOR AND CITY COMMISSION Submitted by MERRETT R. STIERHEIM City Manager NoVEMBER 15, 1996 r TO: Honorable Mayor & Members of the City Commission + FROM : A. CITY OF MIAMI,'FLORIDA INTER -OFFICE MEMORANDUM DATE: November 15, 1996 FILE: SUBJECT: Strategic Financial Recovery Plan for City of Miami REFERENCES: Merrett R. Stierheim ENCLOSURES: City Manager My final report as interim City Manager is a Strategic Recovery Plan which sets forth recommendations on how the City's fiscal health can be regained and enhanced. Included in this plan are extensive task force analyses and recommendations on the City's organizational structure, management prerogatives, internal administrative procedures, and financial and service delivery systems. What confronted the Mayor and Commission in early September was certainly much larger than any of us anticipated when you asked me to "keep a steady hand on the tiller" as you went through the process of selecting your new City Manager. Two months later, I leave the City Manager's Office with a feeling of comfort that all that could possibly have been done was done; and a sense of confidence because I am turning over my responsibilities to a competent professional whom the Mayor and City Commission very wisely selected. As your permanent City Manager, however, Ed Marquez can only do so much. Critical to the process of recovery and fiscal solvency is a sustained and focused commitment by the Mayor and Commission. Recommended Actions 1. Accept this report and approve it conceptually. While this action will not formally adopt each of the recommendations in the plan, your adoption of the plan conceptually would send a very positive signal to everyone who has a concern and interest in the welfare of the City of Miami. Those interested include our Miami residents, the citizens of Dade County, financial investors in businesses and property in the City, bondholders, Wall Street analysts, legislators, and the Governor, to name a few. It is important to act! In effect, you will be saying: "Yes, we acknowledge our problem, we are going to solve this problem, and we have a plan." Component solutions may well change because the process is fluid as the weeks and months go ��819 by, but it is far better to have a conceptual plan in front of you, to keep your eye on and benchmark, than to move forward blindly. 2. The second major and substantive signal should occur on November 21St and December 12th when you will consider on first and second reading the ordinance increasing solid waste fees in the City. This issue is dealt with in the body of this report and in a separate memorandum that has been prepared for your November 21 st Agenda. 3. It is recommended that you direct your City Manager and City Attorney to prepare an Omnibus Ordinance or separate ordinances containing the necessary language to amend, increase and/or adopt other recommended fee, permit,. and revenue enhancements, as well. as to amend the City Code to affect other recommendations included in this plan. 4. It is recommended that you amend in the near future your FY 1996-97 budget ordinance to bring that budget into balance. Remember, a budget is a financial plan and that the City's books are either in balance or out of balance after the fiscal year ends on September 30ti' and they are subsequently audited. Please recall that when the FY 1996-97 budget was adopted on second reading on September 26, 1996 that we publicly acknowledged that the approved budget was $50 million out of balance (not i including an $18 million shortfall in the City's capital program) and that, we would, during the fiscal year, correct that imbalance in accordance with State law. The. amending ordinance should track expanded revenue streams and reduced personnel and other operating capital costs in accordance with planned cost containment actions. During a recent task force meeting a pro bono executive wisely asked a rhetorical question, "What kind of medicine is the City really willing to take?" My response was that there were four options: 1) to dissolve the City, which would include some form of a Metro Dade takeover; 2) to procrastinate, which will result in further financial deterioration, insolvency and/or bankruptcy; 3) to request that the State invoke the emergency provisions of Section 218 of the Florida Statutes and ask the �I Governor to intercede and appoint an Oversight Board; or, preferably, 4) to face up to the reality of the situation and commit to resolve the problem within and through the City Government. 96� ;819 2 s Ii All of my efforts over the past two months have been focused on the City dealing with this problem in -.house by equitably distributing the "medicine" among all the members of the City family. I strongly _recommend that the City Commission commit itself to resolve this fiscal crisis forthrightly and with courage so as not to find it necessary to call on the Governor or deal with a bankruptcy judge. It can be done! This report details how. Fiscal Deficit, Recurring Revenue Increases and Expenditure Reductions My previous reports outlined in detail the City's fiscal problem. Simply stated, the City got into this position over the past several years by first consuming reserves, exhausting enterprise funds, consuming unrestricted and in some cases restricted capital funds; depending on one time revenue sources; and finally by inappropriately consuming self insurance and pension bond revenues, all of which went to support general operating requirements. The $68 million deficit described in my previous reports and the Fairness Matrix of October 7' is, after more detailed review, still generally applicable (Exhibits 1 and 2). Aside from the sale of assets and other one-time infusions of capital, I believe that a sustaining, recurring revenue and/or cost containment schedule of at least $60 million will not only bring the City into fiscal solvency, but will, over the next several years, enable the City to gradually re-establish renewal and replacement reserves for facilities and equipment, reduce unfunded liabilities, begin to address accumulated deficits in enterprise and internal service funds, and replace depleted capital funds. Some- have speculated that the City's FY 1996-97 budgetary problem may be bigger than $68 million. Though debatable, I disagree! That speculation is predicated on combining unfunded liabilities and depleted reserve and capital accounts which are in excess of $200 million. These liabilities include compensated absences; worker's compensation, general liability, health and self insurance funds; enterprise fund retained earnings deficits prior to contributed capital adjustments; and equipment renewal and replacement, capital improvement, and contingency fund reserve requirements. What must be understood however, is that total unfunded liability and reserve funding requirements are not items that must be fully addressed nor are they expected to be fully addressed in any one fiscal year. I would agree and suggest, however, that true fiscal solvency will not be fully realized until the City does, in fact, have reserves sufficient to meet near -term liabilities. 3 ' "'. �61OR r Suffice it to say that the funding solutions target for FY 1996-97 is $68 million with at least $60 million in sustained, recurring revenue and/or cost reductions for FY 1997- 98 and beyond. This will meet the recurring budget shortfall and allow for appropriations to reserve and capital accounts. Over the long run, the intelligent, planned disposition of surplus City land and other assets will generate substantial dollars that should immediately be placed into those reserve accounts and/or depleted enterprise and capital funds. Only after adequate reserves have been established should the City Commission consider new or expanded services. The $68 million budgetary shortfall must be addressed immediately and, to the maximum extent possible, with recurring revenue and cost containment solutions. Remember, time is money. See Exhibit 3 which illustrates this point based on a $68 million shortfall. A comprehensive cash flow analysis has been prepared for the general fund (Exhibit 4) which indicates that the City will run out of discretionary funding by March or April of 1997, if no actions are taken by the City Commission. The Commission must make hard decisions now. Delay will make State oversight or bankruptcy probable. To address the $68 million budgetary shortfall I have prepared a detailed funding solutions matrix which when applied against the FY 1996-97 and FY 1997-98 projected shortfalls will produce the summarized results shown in the following table (a detailed breakdown of this table is provided in Exhibit 5). 4 City of Miami Strategic Financial Recovery Plan Summary 11 One -Time De' I Adjustments ! s''c r Y97 i ' INUMOR-1 F-iqAT,.EkP B, U '9 F_4 J�gf Jr�A6%,WO*,'qO,4.fZ I C04—T,CONTAINMENTMEASURES430=01: $6,056,0771 M386,820 UNION;CONCESSIONSi :-- J A- -$12$018;8181 $13,929,833 i�,:z,"."��.,�,i'.. JPENSlON-ADJUSTMENTS::_,.` $6,900;0001 $6,900P000 EXPENDITURE'REDUCTIONS 4200001 ' 411,0,569,0371;X . .-'$110,967J ': REVENUE ENHANCEMENTS ,4200239,193421,876,974"$38,639,664 '289j193J--,,'-.' ',$56;4 I rw -_it N;E�.T--;',.'.iA�DJIU.'S�.��T�,.M�"�'INT��le.-,.�..',.,�'-,;$2Qi289il93l�,.-,�,.I:��,-,$65,117,,Q $74i,997�184 -,&/qj 997� iffy %49Pf PaRLq%tkO, PA J,,M.WAUJW$7,r4_AQ'jO9%,J Projected recurring General Fund related deficit for FYI 988 is $45 million plus $15 million for immediate capital -related cash flow needs. Includes one-time and recurring items. A detailed breakdown of this plan is provided in Exhibit 5. r It is strongly recommended that the balance of $7.5 million in FY 1996-97 and $7.141S million in FY 1997-98, when realized, be reserved to restore enterprise, internal, service and reserve accounts and to begin addressing other unfunded liabilities. It is further recommended that $1.25 million per year be provided from these balances for the City Manager to fund priority management, revenue enhancing positions, and/or outside consulting studies. The City has no capacity for productivity analyses which can save millions in operating costs and/or significantly improve public services. A comprehensive operations review of all major City departments would be particularly beneficial for management as well as the City's service delivery systems. Suffice it to say that with professional management a dollar invested in these efforts will generate many dollars in measurable benefits. For example, as Metro Dade County Manager, I recommended the creation of a Productivity Analysis Unit at an annual cost of $187,000. I pledged to the Commission that it would save more than its cost in the first year through its initial study. The annual recurring savings of that first study in the Tax Collector's Office were $2,250,000. When I left the County, the auditable, recurring annual savings of all studies were approximately $25,000,000. Exhibit 6 shows the positive affect of recommended funding solutions on the FY 1996-97 general fund cash flow analysis. As one can see, the funding solutions presented will provide sufficient cash flow for FY 1996-97 and will affirmatively address forecasted recurring shortfalls in FY 1997-98 and beyond. The recommended plan for solving the FY 1996-97 budgetary shortfall represents a balance of revenue increases, union and non -union expense reductions and other cost containment measures (See pie chart on the next page). By agreement, union concessions are dependent on the City Commission imposing new and increased revenues. The solution plan represents a carefully interconnected package which depends on all components being approved. Failure to act on one can jeopardize the entire package and risk the financial collapse of the City. g 9 6 14r* V UNION CONCESSIONS $12,019 (16%) COST CONTAINN MEASURES $5,056 (7%) City of Miami l=Y 1997 Strategic Financial Recovery Plan Summary (Dollars in 1,000s) Total Value of FY 1997 Initiatives - $75,460,099 PENSION EXPENDITURE ADJUSTMENTS REDUCTIONS $6,900 $9,319 (12%) Igo/.I ONE-TIME SOLUTIONS $20,289 (27%) REVENUE ENHANCEMENTS $21,877 (29%) �i The initiatives contained in each of the major sections of the solutions matrix -are summarized as follows: Administrative Actions Taken. Several cost saving initiatives have already been instituted which include a Citywide hiring freeze, the impoundment of all non- essential City vehicles assigned to City executives and City workers, the imposition of a portal-to-portal use fee for approved vehicle assignments, a deductible for executive health care, the elimination of executive cellular phone allowances and auto insurance allowances and a freeze on non -essential overtime usage. These actions, which are included in the solutions matrix in Exhibit 5 will generate FY 1996-97 savings of approximately $4.9 million. Actions affecting executives only will generate approximately $1.1 million in annual savings. Union Concessions and Pension Adjustments. Major discussionswere held with the leadership of the four City unions, the results of which I am pleased to report will generate approximately $26 million over the next two fiscal years. The four concession agreements can be found in Exhibit J. The values of all concession items are included in Exhibit 5. Simultaneously, and with the support of our Union Presidents, we requested that the City's two Pension Boards have their actuaries analyze the assumption rates in view of wage freezes over the next two years and the recent performance of the stock market. While we do not have the final results, there is reason for guarded optimism that approximately $7 million in amlual, recurring reduced pension contributions can be realized ($14 million over the next two years). Non -Union Expense Reductions. Even though severely constrained by collective bargaining agreements, which in some cases prohibit layoffs or privatization, require minimum staffing levels for fire rescue service and include an extensive number of middle management and support positions, over $10.6 million of expenditure reductions were possible (see Exhibit 5 for details). Major recommendations include: • Eliminate 53 full-time, part-time and temporary positions (approximately $900,000 excluding positions included in initiatives below). • Close Dinner Key Boatyard and Bobby Maduro Stadium ($513,000). • Reduce costs associated with operation of Dinner Key Marina, Coconut Grove Convention Center, Miami Springs Golf Course, Miami Convention Center and the Orange Bowl ($162,000). 96 819 8 F,i • Reduce general fund overtime costs in' Police Department through internal management controls ($1 million), the use of the Law Enforcement Trust Fund for eligible overtime costs ($100,000), and soon to be revised procedures in the court system to help control court -related overtime ($400,000). • Close the North and South Police Substations which will have no adverse impact on current patrols or police deployment whatsoever ($207,000). Sworn personnel on the street will actually increase. A report will be provided to further explain this proposal. • Eliminate compensation (including health insurance) to appointed City board members ($189,000) • Utilize federal COPS grant funds, through a full waiver of local grant match requirement and an agreed upon reduction in base officer position count requirements for purposes of the grant to the Police Department ($3.8 million). • Close Virginia Key Beach ($112,000). • Eliminate funding budget for not -for -profit agencies ($192,000). • Reduce funding for Bayfront Park Management Trust by 15 percent ($174,000). • Modify E911 call -taking protocols ($100,000). • Reduce number of NET offices to 8 from 13 ($362,000). • Reduce projected trash -related solid waste disposal costs by delivering no more than two of five daily trash deliveries to County transfer stations ($1.2 million). • Reduce operations of year-round pools at Hadley and Jose Marti Parks to eight weeks in the summer ($200,000). City Commission Responsibility/Fee Increases and Adjustments. Certainly the most difficult part of the recovery process is for the Mayor and Commission to generate additional recurring revenue through the adoption of necessary fees. Some union members and others have speculated that the one time infusion of cash through land or other asset sales can solve this problem. Unfortunately that assumption does not work because of the size of the shortfall and the recurring nature of the problem. Aside from helping to bridge the FY 1996-97 $68 million shortfall, the proceeds from the sale of assets should be placed in renewal and replacement capital accounts, and/or should be used to reduce negative retained earnings balances in enterprise funds and/or should be used to reduce unfunded liability levels. 9 IN Solid Waste Collection Fee. The first major test of the Commission's resolve will occur on November 21 st when increasing the solid waste fee must be considered if the January billing is to contain a fee increase. Given the City's financial crisis it is hard to understand why garbage and trash collection service is currently subsidized by the general fund in excess of 50 percent of its cost. Doubling the fee, which will generate $10 million in desperately needed funds, would still leave Miami homeowners paying less than unincorporated residents and the citizens of most major Dade cities. Increasing the fee to $320 would ensure full cost coverage without general fund support and would represent the first solid waste fee increase since 1985. A comparison of solid waste fees in major Dade County cities follows: Comparison of Solid Waste Collection Fees in Major Dade County Jurisdictions JURISDICTION Miami Hialeah Coral Gables Miami Beach North Miami North Miami Beach Unincorporated Dade FY 1995-96 FEE $160 $324 $498 $325 $360 $375 $349 In my judgment, this action should have been taken without a fiscal crisis. Given the latter condition it becomes essential, and the Commission's decision on this matter will send a very clear signal on the Commission's and the City of Miami's commitment to resolve its fiscal dilemma. Two other potential alternatives may be considered in the future. They are not, however, considered practical at this time. First, a transfer of solid waste collection service to Metro would impose a higher annual fee than the one proposed ($349 vs. $320) provided that is a politically viable option for the Commission, and the County is ready to assume this function. Secondly, privatization cannot be considered for adoption until the FY 1997-98 fiscal year because of privatizationprohibitions in the sanitation worker's union contract (LIUNA bargaining unit). (The City could evaluate, seek proposals, etc. in the summer of 1997 but not implement, such a service change until October 1, 1997). If privatization or other actions reduce the actual cost of service, the Commission could revisit the fee schedule. 00_� 8:i9 10 City employees, union leaders (whose agreements call for positive City Commission action), residents, the business community, the Governor's Office, bondholders, as well as municipal finance institutions, will all be watching the City Commission's action on this important item. Fee -Based Fire Rescue Service Assessment. The City Commission has already authorized a Request for Proposals for a professional study on shifting the net cost of fire rescue service ($42 million net of revenue annually) from ad valorem property taxes to a square footage or other non -ad valorem based fee assessment method. We are currently negotiating a contract with the successful proposer. The ultimate adoption of such a plan will accomplish many goals. First, assuming the full implementation of the assessment on all taxable and certain exempt property, the Commission could provide approximately a two mill reduction in property taxes. We believe that the fee system can be structured on a"close to comparable cost" for the average homeowner. We also believe that many of the property tax exempt institutions can be assessed a fee to support this important service. This will partially eliminate the present practice of City taxpayers subsidizing the cost of that service to the almost 34 percent of the City's tax base which is tax exempt. At a minimum, for some exempt institutions there should be a negotiated "payments in lieu of taxes" for this service. Our overall objective is to generate an additional $20-$25 million in new revenue on a recurring basis. We believe that it may be possible forthe City to consider adopting this plan during the current fiscal year while at the same time pledging a property tax reduction for FY 1997-98. To be prudent however, and recognizing the potential of legal challenges and other obstacles, the funding plan does not include receipt of these funds until FY 1997-98. The Fire Fee is a critical and vital component of the recovery plan. Other Recommended Near -Term Revenue Enhancements. In addition to the solid waste fee increase and the proposed fire rescue service fee, a number of additional revenue enhancement measures are recommended. These include more aggressive collection efforts for a number of locally imposed fees, charges and fines, as well as new and increased fees and charges for special purpose, consumption -based and permit related activities. These measures, the more significant of which are outlined below, should be imposed as soon as possible and more aggressive revenue do collection efforts should be an immediate priority for all departments. Major revenue initiatives include: • Establish annual lobbyist registration fee ($30,000) • Impose Fire Permit Fee and aggressively coordinate enforcement of certificates of use, occupational licenses and fire inspections ($1.55 million net of cost of a required 10 additional inspectors) • Charge for all special event fees and costs ($400,000) • Allocate a portion of future CDBG entitlements to eligible city projects which would otherwise require general fund support ($450,000) • Obtain MSEA contribution for City convention facilities ($300,000 in recurring revenue) • Increase selected and improve collection of building and inspection fees ($402,750 net of a required 11 additional inspectors and clerk positions) • Increase EMS collections ($250,000) • Eliminate marina discounts for City residents and increase selected Marina rates ($376,000) • Increase Park user fees ($200,000) • Implement an hourly Police off -duty surcharge and increase alarm fees ($780,000) Task Force Reports Included as part of this Strategic Plan are copies of all Task Force reports. These are outstanding reports of tremendous value which were prepared over a short period of time by teams of loaned pro bono executives and City staff. Task Force executives were assigned to conduct studies in 13 priority areas of management concern which were: A. Task Force Pro Bono Executive Assignments B. Financial/Audit Controls C. Pension Program Review D. Fleet Management E. Health Insurance F. Self Insurance Programs G. Debt Restructure H. Financial/Budgetary Analysis I. Capital Improvement Plan Review J. Labor Relations 96- 819 12 Em. r K. Opportunities Areas (privatization, service transfer, revenue enterprise and asset management opportunities) L. Loan and Grant Programs M. Parks and Recreation I urge the Commission to review these reports in detail. They will give each of you a very clear picture of your departmental operations. Exhibit A provides a listing of all task forces, their membership and expected deliverables. Task Force reports are included as Exhibits B through M and primarily address areas of longer -term management concern. These exceptional reports, would have cost, collectively, between $500,000 and a million dollars to prepare if not done on a pro bono basis. Your new City Manager has already begun evaluating the reports and will be implementing those recommendations contained in the task force reports that he is supportive of. Longer -Term Revenue Enhancements and Cost Containment Initiatives. A number of revenue enhancement and expenditure reduction initiatives will take time to analyze and institute and some that are in Task Force Reports are somewhat speculative. While not viewed as viable for FY 1996-97 these measures should be thoroughly explored and instituted to the extent feasible. Many are significant and appropriate to address the City's long term financial problems, such as unfunded reserves, renovation and replacement accounts, and unfunded liabilities. In many cases these are one time revenue sources such as asset sales. In other cases recurring revenue can be used for the same purposes already outlined and potentially, for service enhancements or personnel restorations. These longer -term initiatives include: Revenue Enhancement Measures: • Pursue land or other asset sale opportunities with the State, County and others. • Negotiate the potential transfer of regional and special use parks to Metro -Dade County and others. • Pursue parking facility sale and/or sale -leaseback opportunities with the Department of Off -Street Parking. • Explore propriety of property tax credits made by Florida Power and Light on franchise payments to the City with possible additional recurring revenue of $2 million per year to the City. 13 96=8`1�9_ cm • Negotiate receipt of a fair share of vessel registration funds received by County that are not shared with the City even though 30% of registered boaters reside in Miami. • Aggressively pursue revenue maximization opportunities through public -private development on appropriate City properties. • Further evaluate feasibility of street lighting fee. • Increase ad valorem millage to ten mills, which yields roughly $4.4 million. • Audit solid waste franchise fee and all utility tax payors to ensure proper fee and tax payments. • Evaluate all City leases, permits, licenses, and concession/management agreements regarding City properties to ensure revenue operating opportunities are maximized. • Aggressively pursue Legislative initiatives, including but not limited to: • Establish a surcharge for recordation of documents to be provided to support municipal Clerk capital equipment modernization efforts (potential of $150,000). • Accelerate receipt of state shared revenues for State fiscal year 1997-98 to July 1997 thereby allowing City to receive $34 million in advance to assist with cash flow to the extent necessary. • Aggressively oppose efforts to remove property appraiser's current presumption of correctness. • Authorize the City to impose a surcharge on all parking facilities, public or private, to provide funding to help defray City costs associated with commuter use of the City's public infrastructure. • Authorize partial year assessments to allow local governments to capture the value of property for the remaining portion of the first year development is substantially complete. • Authorize payments -in -lieu -of -taxes to allow the City to recover a portion of municipal costs incurred providing services to tax exempt properties. Cost Containment Initiatives: • Negotiate state funding of state roadway medians and rights -of -way in the City of Miami. • Pursue privatization opportunities, as appropriate, including solid waste and information technology. 96-- 819 14 • Increase corporate sponsorship and community group/volunteer involvement in Parks and Recreation programs and facilities maintenance. • Institute a vehicle replacement program. • Pursue recommendations of Health Insurance and Self -Insurance Programs Task b orces (Exhibits E & F). • Assess feasibility of issuance oflegitimate Pension Obligation Bonds to minimize future liabilities through favorable interest rate spreads (Exhibit Q. • Evaluate the possibility of restructuring non ad -valorem and ad valorem debt to achieve present value savings (non ad -valorem debt) and/or to provide for reductions in the City's debt service millage (ad -valorem debt) (Exhibit G). • Maximize use of CDBG entitlement funds to provide funding for projects or programs which would otherwise require general fund support (Exhibit L). City Management Responsibilities The City Manager and his Executive Staff have wide-ranging responsibilities to closely monitor cost containment initiatives and revenue enhancement efforts as outlined in this report. This is a complex, sustained management process that will require structured reporting systems and scheduled reviews. It will also provide the basis for informing the Mayor and Commission, the Governor's Office, bond holders Wall Street rating agencies, City Unions and other interested parties on a regular basis. This reporting process is critical and is one your new City Manager and his management team will have to emphasize. Perception/Image Abroad and At dome As we grapple with the City's fiscal problems it is important that we be aware of the importance of the perception and image of the City both nationally and internationally. Until this crisis our image had improved dramatically in recent years. Image and perception have a great deal to do with corporate relocation decisions, investment and disinvestment strategies, and the travel plans of tourists, convention planners and other potential visitors. Obviously, all of this has a direct and significant effect on the economic welfare of the Greater Miami community and is a compelling argument against dissolution, insolvency, and bankruptcy. 15 In recent meetings with Downtown and Brickell business leaders, there were deep concerns expressed over the signals the City's fiscal crisis was sending in the business world. As investors and owners in the heart of our city who pay the lion's share of City and County taxes, their concerns and anxieties should be carefully considered. If we enthusiastically and practically address our fiscal problems, our perception and image will be enhanced. Great cities like New York, Cleveland and others that have met their financial challenges forthrightly are now stronger, and widely respected for their actions. Of perhaps greater importance is our City residents' grassroots pride, confidence and perception of their City — their hometown! I would submit that a City Commission and City Administration that faces up to the tough tasks at hand and cleans up the City's financial problems and improves the level and quality of municipal services will be respected and praised for its courage even though no one ever wants to pay more taxes or fees and there will be those who will demagogue this issue for their personal agendas. Organizational Structure/Reporting Relationships The present management structure of the City is impractical and dysfunctional. Having five Assistant City Managers functioning as department directors physically removed from the City Manager's Office greatly handicaps the Manager and limits his management capability. It was immediately obvious that it was essential for me to bring outside professionals into the management and fiscal review process which left Assistant City Manager Cuervo to almost single-handedly manage the day-to- day activities of the City including the preparation for and staffing of City Commission meetings. It is essential that your new City -Manager rebuild a competent, professional upper management staff within the City Manager's Office. Department directors carrying the title of Assistant City Manager do not provide your Manager with the depth of Citywide management oversight assistance that a City of the size and complexity of Miami requires. This refers also to my earlier comments on productivity and research. The parks & Recreation Department now functions under the Public Works Department rather than operating as a stand-alone Department reporting directly to the City Manager or one of his Assistants. Park Maintenance is performed by Public Works. I recommend that City Manager Marquez organize for the Commissioners a 96- 8,19 16 tour of your major city parks. A review of the Parks Task Force report found in Exhibit M.will explain why. Solid Waste functions under the General Services Department. And, the NET Program functions under the Building and Zoning Department. All of these departments should operate independently, reporting to and accountable to the City Manager and/or his designees. Fleet Maintenance is housed in the Police Department while the City's Risk Management and Cable Television franchise regulation programs are placed in the Fire Department. The Public Works Department is responsible for the City's Capital Improvements Program which is administered by a Fire Captain. While not, in all cases, questioning the efficiency or effectiveness of these organizational assignments, they nonetheless are in the wrong places. Disk Management and Fleet Management should be placed in a stronger, better managed, properly funded, General Services Administration (GSA). There is virtually no analytical capability in the City Manager's Office both in terms of staff and time. I have recommended to City Manager Ed Marquez that he consider designating Department Directors who are not Assistant City Managers and bring in to the City Manager's Office sufficient staff to assist him in carrying out his strategic and operational management responsibilities. Further, the Office of Management & Budget should be removed from the Finance Department and made an integral part of the City Manager's Office. The Capital Improvements Program and capital budget should be prepared under the direction of the Office of Management and Budget. The only two organizations in City government that appear to be reasonably well staffed are the Police and Fire Departments. For example, both departments have Public Information Offices while the City Manager, Mayor and Commission have none. There should be a Public Information Office attached to the City Manager's Office to work with the Mayor, Commission and Manager to keep the media, the citizens of Miami and City's employees informed. This office should also oversee and manage the City's Cable 'Television channel, the programming of which should be substantially expanded with publicservice education programs and be responsible for both external and internal communications. This office should also coordinate r other public information functions which should Departments and which appear to do an excellent job. remain in the Police and Fire The Director and staff of the Community Redevelopment Agency should be assigned under the City Manager. Similarly, other staff to City boards (excluding the Pension and Civil Service Boards) should be brought under the City Manager's direction. If the Mayor and Commission wishes to continue with a board, the director and staff can report to the board but still subject to the direction and oversight of the City Manager. The practice of compensating appointed board members and providing health insurance should be eliminated. The current Civil Service system is obsolete and in need of restructuring. The Rules and Regulations are outdated and must be revised. In addition, it is my recommendation that appeals and disciplinary hearings be handled by a professional arbitrator or mediator. This would require a charter change. The City's information technology functions (data processing) are currently placed in the Finance Department. Information Technology should be a separate department with a director, who should be the City's Chief Information Technology Officer, reporting directly to the City Manager or his designee. A review of the Task Force Reports will indicate several other recommendations and suggestions. Certainly fleet maintenance, risk management (including workers compensation) and many other city operations could be privatized. The outsourcing of Information Technology is also a viable option. It seems clear that previous management's efforts to reduce and streamline the City administration resulted in the dysfunctional alignment of activities and the elimination of an adequate support staff to assist in the proper management and oversight of an organization of 3300 employees with a $275 million annual operating budget. This must be corrected. Management should not have to apologize for, or hide a competent staff. Such staff is an asset to the citizens of Miami and the City Commission. There should be no question that a competent professional City Manager's Assistant or Budget Analyst can and will generate savings, efficiencies and/or more effective public services that can be measured cost effectively against the salary of the staff member. A review of the attached Task Force reports will indicate repeated recommendations for staff studies and/or staff enhancements. Today, the City Manager's Office has virtually no capability to conduct those P studies and that must be changed. As stated earlier, the financial recovery plan provides $1.25 million for the City Manager to make targeted investments in management and support personnel, as well as strategic position needs in operating departments. Management Issues I have previously reported that management had in recent years largely abdicated its rights and prerogatives through the collective bargaining process. For example, everyone below the Assistant Department Director level is under the Civil Service system and included in the AFSCME bargaining unit. Administrative Assistants (secretaries) to Department Directors, staff in the Personnel Department and staff in the Office of Management and Budget are all under civil service and eligible to be members of the AFSCME bargaining unit. As a result, union leaders receive virtually all memos and reports sent to the City Manager. There is no management confidentiality! Often, while at the table in discussions with union leaders, they demonstrated that they had a better filing system and better intelligence than I, or members of my staff did on particular issues. Quoting from a memo to me from R. Sue Weller, the City's Labor Relations Officer (Exhibit 7) "In November 1991, as a result of labor/management cooperation, the City and AFSCME entered into a Memorandum of Understanding (Attachment A of Exhibit 7) transferring 186 classifications (275 employees) to the AFSCME bargaining unit (Attachment B of Exhibit 7). Among classified employees this left the City with 47 managerial/confidential employees (26 classifications) (Attachment C of Exhibit 7). Essentially, this left every department. in the City with no managerial/confidential employees below the level of Assistant Director, except for Personnel Management, Internal Audits and Computers." In addition to confidentiality, the whole principle of serving at the will and pleasure of the City Manager or the Department Director has been undermined. Supervisory personnel, at least at the division head level, and preferably at the section head level; and support personnel including Executive Secretaries, as well as Budget and Personnel Department staffs, should be appointed and maintain their employment on the basis of managerial ability, skill, competence, and non -divided loyalty. Executive or management personnel in this category should be exempt or unclassified while secretarial or technical support personnel should be "managerial or confidential" as provided for under Chapter 447 of the Florida Statutes. This imbalance must change, and I recommend to the City Manager that this be an 19 .. 'A r immediate priority. The City Attorney or retained outside counsel should advise the City Manager on the steps necessary to achieve a proper and appropriate balance between the Exempt Management or Confidential Unclassified Service and the Classified Civil Service. Collective bargaining agreements largely prohibit layoffs (AFSCME) or privatization (LIUNA), and require minimum staffing levels for department operations (IAFF). These restrictions severely limit the City Manager's ability 'to make staffing adjustments or modify service levels (up or down). Special Programs and Account The City Commissions' attention is drawn to Exhibit 5, page 8, where $1.5 million has been removed from a variety of previously funded activities and community groups. These reductions will undoubtedly create political challenges for the City Commission. The Commission might want to consider creating a much smaller fund to be administered similar to the Metro -Dade Tourist Development Council. All groups requesting funds should make new requests and justify the request. In addition, it is recommended that payments for special events to the City be sufficient to offset related City services, or alternatively, such events should at least make a payment of up to a minimum rate pre -established by the Commission. City Commission Budgets Several members of the City Commission personally asked me for help in understanding their office budgets. These requests were prompted by voluntary reductions in staff and other expenses. Like the rest of the City's finances, the practice of the previous administration was to charge the cost of Commission staff and other expense items to other departments or operations so that the true cost of commission activities was obfuscated. Acting Finance Director, Mike Lavin will be completing this analysis shortly and will discuss his findings with each Commissioner and the City Manager. I recommend that at the conclusion of this process the Commission, with the City Manager's guidance, formally adopt policy guidelines for present and future Commissioners regarding authorized staffing and budget allowances (i.e., auto, phone, overhead, official business expenses, etc.). Combined allowances for travel and miscellaneous expenses could be included. Unfortunately, past practice was not uniform nor equitable for each Commissioner. 96-- 59 ao f The Mayor's Office, by virtue of his responsibilities under the Charter, is larger. The Mayor and Commission are reminded that they, in the process of adopting the budget, also establish the budgets for their respective offices. NET Program Given the City's fiscal condition, it is proposed that the NET Offices be reduced from 13 to 8 which would effectively provide for an approximately 5 square mile service area per NET office. It is my opinion that the reduction of NET offices will not detract from the accomplishments achieved through this decentralized form of government that reaches deep into the City's neighborhoods. Support staff can be shifted into higher service areas while maintaining the integrity of the program's effectiveness. Ideally, this issue should be professionally analyzed and I recommend that a complete evaluation of the NET Program be a priority for City Manager Marquez. Friends of Friends/Nepotism A. problem that I did not have sufficient time to properly deal with involves the long- standing practice of placing individuals both in the Unclassified ranks and/or in the Classified Civil Service for reasons other than merit. There are many non- productive employees that have been placed in jobs without a truly competitive recruitment process. I heard this not only from Department Directors as well as individual employees, but it came across loud and clear in my four meetings with approximately 1,500 City employees. It was also reported by Task Force pro bono executives as well. The City Manager has the authority to deal with the Unclassified Service and should over a reasonable period of time separate those non -productive and unnecessary employees. Department Directors have long been conditioned to the possibility of reprisals or recrimination if they chose to act against employees who were either placed, or had loyalties to someone outside the Department. This must change. Clearly, the appointment of a new professional City Manager will facilitate that change. Department Directors must follow established procedures for Civil Service employees by documenting poor attendance, poor work habits, disciplinary problems and so on, to justify suspensions/dismissals and/or demotions. These collective efforts will restore to the City administration the professionalism that it once enjoyed. ici �+ . ` 21 K3' lli Employee Empowerment I have consistently been impressed with the overall dedication and competence of the City's workforce. I refer specifically to the Parks & Recreation Task Force (see Exhibit M) that in a short period of time empowered Park Managers in a creative, participatory management process. It was enlightening for me to attend just one of those meetings and witness the potential benefits of empowering City employees in participatory problem -solving activities. This is essentially the same process that takes place in Total Quality Management. The pro bono executives that led the Parks & Recreation effort have volunteered to provide additional pro bono service in other departments. I recommend that the City Manager take advantage of this offer and, consistent with his own management style, extend the participatory process to all City departments. City Charter - City Code - Administrative Procedures Both the City Charter and City Code are antiquated and should be recodified. I am advised that there has been some work done on this but it has not been completed or acted upon by the City Commission. It should be completed. Additionally, Administrative Procedures should be dusted off, updated, codified and approved by the City Manager and City Commission. The Strategic Planning Task Force We also created a Strategic Planning Task Force and held one meeting with the appointees. There was consensus that the efforts of this group should beginafter all other Task Forces had completed their studies and we submitted this final report to the Mayor and Commission. This has since been' discussed with City Manager Marquez who concurs that such a group would be extremely beneficial and a resource to him on an ongoing basis. It is recommend that a major corporate CEO chair this effort and that its membership be carefully selected by the Mayor, Commission and City Manager sometime in the first quarter of 1997. Its charge would be to review the City's progress on the recovery plan and to formulate a long-term process and plan for monitoring and improving the overall fiscal and operational health of the City of Miami. I recommend this action and suggest that some of the pro bono executives who participated on the Task Forces be considered for membership on this Task Force. 96- 819 22 Appreciation There are many people from both the private and public sector who have unselfishly and freely given of their time and talents to assist the City of Miami and me in so many ways. Most specifically, I extend my deep appreciation to George Burgess, Deputy Director of the Metro Dade Office of Management and Budget, and Bill Hampton, Deputy Court Administrator for the Eleventh Judicial Circuit, who have consistently been by my side since the second week of my appointment on September 13`'. And, special appreciation is extended to Assistant City Manager Christina Cuervo who was really the shadow Manager and relieved me of day-to-day normal management activity. Additionally, Ms. Rachel Baum, Metro Dade Deputy Finance Director; Roger Carlton of Lockheed -Martin Company; Dick Montalbano of W. R. Hough & Company; Bob Nachlinger, City of Miami Beach Finance Director; Carolyn Brownstein of the Greater Miami Convention and Visitors Bureau; Kevin Lynskey of Metro Dade's Audit and Management Services Department; Mike Wilkinson of the Metro Dade Office of Management and Budget; Judy Cannon, Task Force Coordinator; Mike Lavin, Acting City Finance Director; and all of the wonderful support staff in the City Manager's Office, namely Dulce Borges, Danette Perez, Angie Ruiloba, Mayte Rodriguez, Lissette De Arenas, plus the forty senior executives on our Task Forces all deserve our most sincere thanks and appreciation. I also extend my appreciation to Dipak Parekh, Phil Luney and Pete Chircut of the Finance Department who consistently went above and beyond to research and assist in documenting'what went wrong and helping me determine how we might proceed. Finally, and in a personal sense, I wish for you Mr. Mayor, each member of the City Commission, City Manager Marquez, the Department Directors and City Employees God speed as you all proceed with the challenging task of bringing the City of Miami back to fiscal and operational health. Remember, it can be done! Sincerely, Merre R. Stierheim City Manager Attachments 23 k 5m Ll TO: Honorable Mayor & City Commission DATE: September 26, 1996 FROM: Merrett R. Stie SUBJECT: CURRENT & City Manager PROPOSED BUDGET FISCAL ANALYSIS From every contact that I have had, the City of Miami is blessed with a very dedicated group of employees and department directors. Because of that, and because of my former City employment and the affection I have for the City, this is a difficult report to make. While only thirteen days have passed since you appointed me as interim CityManager, my waking hours have been intensely focused on reviewing the proposed budget and the financial condition of the City. I want to acknowledge the tremendous support I have received from a small team of highly skilled professionals without whom this report would not have been possible in such a short time. They are: Roger Carlton, former City Manager of Miami Beach, on loan from Lockheed Martin Corporation, Bill Hampton, former City Manager of South Miami, on loan from Chief Judge J. Farina, and George Burgess, Metro Dade Deputy Budget Director, on loan from County Manager Armando Vidal. All of these outstanding professionals who are here this evening are serving pro Bono and have worked tirelessly in our review of both the budget and the financial affairs of the City. This past weekend we conducted almost 20 hours of budget meetings with all of the major City departments. Most of our department directors and their staff, as well as the collective bargaining representatives, participated in that process. In hindsight, I am sorry that I did not invite the City Commission and you, Mr. Mayor, to sit in and hear what I heard. From my observations, your Department Directors, exempt staff, and our City workforce and their representatives are all experiencing a great deal of pain and trauma over the City's fiscal crisis. There is also a lot of frustration and anger as to how this situation could have progressed so far without disclosure. Mr. Mayor, you and the. Commission were absolutely right in requesting a thorough analysis of the budget and the City's financial affairs. Unfortunately, this should have happened a long time ago because I don't think anyone really had a feeling for the gravity of the situation. If anyone did, no one was forthcoming in the public's interest. I have discussed with the Governor's Office, the Department of Revenue and the City Attorney the most practical way to proceed with the adoption of the 96/97 proposed budget. I requested the City Attorney to prepare language for this evening that will acknowledge the need to balance the budget and set forth generically the City Commission's desire to achieve this objective as soon as possible. I am recommending that you adopt the proposed millage and budget documents. Please recognize that we cannot raise the millage at this point. It must be certified to the Tax Collector by October 8' . 96,-819 There have been malty questions raised by bond rating agencies and other institutions as to the capacity bf the City to meet its current and near -term debt obligations. Based upon a cash flow analysis presented -by staff, and the issuance of Tax Anticipation Notes in October (which has been a practice of the City for many years), there should be no concern over bond default or that bondholders are at risk. This presumes, however, that the Commission proceeds forthwith to take the necessary actions to balance the budget. You were promised that all issues and concerns over the fiscal affairs of the City would be publicly presented. This report is the first major component of that analysis. Please understand that this report deals with the proposed operating budget. It does not include an analysis of the City's Capital Improvement Budget. That analysis -has only recently started and we are finding serious problems there as well. A separate report will be submitted for capital projects and their funding. Contrary to the statements and figures provided within the proposed operating budget that you adopted on first reading on September 12n' , the budget did not reflect the true financial picture of the City. Attached to this report in Schedule 1 are specific examples of overstated revenues, understated'expenses and a, far more accurate projection of current 95/96 year-end carryover which our analysis shows is actually a liability. Specifically, I regret to report that the City will experience a $19.4 million dollar shortfall which means that, as we close out the current fiscal year, the City will start the new fiscal year with a negative carryover balance. As you will note in the attachments, the situation worsens as we move into the analysis of the proposed budgets' 1996-97 revenue and expense projections. In addition to the 95/96 $19.4 million dollar shortfall, we must add another $19.5 million in 96/97 overbudgeted revenues and underbudgeted expenses (itemized in Schedule 1) making a total of $38.9 million that must be dealt with in order to balance next year's budget. We have also identified another $13.4 million in potential revenue and expenditure liabilities that we believe can be mitigated by prompt'Commission action and diligent management actions. Even though the $13.4 million represents a further imbalance in the proposed budget, I have not combined the $38.9 and $13.4 million because the latter may be manageable while the $38.9 million is a hard figure that can only be eliminated by reducing expenditures, increasing .revenues, or a combination of both. Attached in Schedule 2 are 76 separate actions that the City Commission and your management staff should evaluate and prioritize in order to develop a strategy to eliminate the identified shortfall. We have not had time to develop dollar projections on each of these suggestions. Mayor Carollo has suggested Commission workshops beginning next week for the Commission to discuss priorities and give direction to both the City Manager and City Attorney to bring selected proposals before them in public hearings as soon as possible. I fully concur with the Mayor's thinking. 2 J. What Caused the Problem - An Assessment In the process of reviewing the proposed budget, prior budgets, and analyzing the financial and audit reports of the City, I think it appropriate to share my professional assessment of what contributed to this condition. Briefly stated, and not in any order of importance, these conditions are: 1. The questionable delegation of fundamental management responsibility 2. Inadequate and insufficient financial reporting 3. Inadequate or non-existent checks and balances 4. Lack of adequate management accountability S. Inadequate and questionable auditing practices, both internal and external 6. An absence of appropriate collective bargaining from the management perspective 7. The manipulation and commingling of funds that should be segregated 8. The depletion of necessary or required reserve accounts 9. The issuance of bonds to meet operating requirements 10. Inadequate or insufficient reporting to the City Commission on fund availability 11. The withholding of critical financial information that sheltered this crisis 12. The misuse of discretionary spending authority 13. A complete lack of fiscal planning 14. The approval of projects without identified funding sources for both capital and operating needs 15. The consistent withholding of important financial data from department directors 16. The abuse of executive benefit -authority 17. Questionable authorization of compensation. 18. No comprehensive cash flow analyses Tor *the past several years This list is not all-inclusive, but these conditions must be corrected immediately — procedurally, organizationally, and operationally. I hope, with your support, to have the vast majority either corrected or corrective action in process before I leave. r ELEMENTS OF FISCAL YEAR 1995-96 AND 1996-97 FUNDING GAPS Fiscal Year 1995-96 Year -End Shortages ® Combined general fund revenue shortfalls ($5.7 million) ® Payroll costs overruns ($5.2 million) a. Operating expenditure overruns ($4.0 million) ® Unbudgeted Riverside Center operating costs ($1.3 million) • Unbudgeted Dupont Plaza rent extensions ($ 1.0 million) to Self'insurance fund claims payouts in excess of budget ($2.8 million) ■ Health insurance claims payouts in excess of budget ($0.7 million) v Solid waste cost overruns ($2.6 million) M. Fleet/motor pool costs over budget ($1.7 million) • Public facility operating losses ($1.4 million) (e.g, Knight Center, Coconut Grove Exhibition Center) ® Net cost of Tax Anticipation Notes ($0.1 million) $26.5 million Less: 1995 Early Retirement Incentive/sick,vacation pay (bond revenue) $ 7.1 million TOTAL AMOUNT OF FY 1995-96 SHORTAGE ($19.4 million) Fiscal Year 1996-97 Proposed Budget Problems Revenue Shortfalls from FY 1996-97 Proposed Budget: ■ 1995-96 Carryover deficit ($19.4 million) s Property tax under -collection ($ 1.0 million) ■ Interest earnings ($ .3 million) ■ Overbudgeted utility tax revenue ($ 3.0 million) • Overbudgeted solid waste fees ($ 1.0 million) ■ Bedminster contract ($ 1.0 million) ■ Recycling grant ($ .5 million) TOTAL AMOUNT OF FY 1996-97 REVENUE SHORTFALLS ($26.2 million) Airtrr i I f • Projected FY 1996/97 Expenditure Overruns: ® Solid waste costs $2.6 million ■ Riverside Center operating expense $0.5 million ■ Under -budgeted pension payments & interest $1.6 million ■ Public official ICMA deferred compensation rollover into City pension program $ .5 million ■ Self insurance/group health costs $3.5 million ■ Fleet costs $2.0 million ■ Police overtime $2.0 million TOTAL AMOUNT OF FY 1996-97 EXPENDITURE OVER -RUNS $12.7 million TOTAL, AMOUNT OF FY 1996-97.PROBLEMS $38.9 million Additional Potential FY 1996-97 Budget Variances: Revenue Shortfalls: ■ Uncertain 1997 Law Enforcement Block Grant ($ 3.0 million) ■ EMS fees ($ .5 million) ■ Parking tickets ($ .5 million) ■ Certificate of Use renewal fees {$ .4 million) W Self insurance mist fund bonds ($ 5.0 million) ($ 9.4 million) Expenditure Over -runs*: ■ Special events, contributions, donations, etc. $ 1.0 million ■ 1996-97 cost if unable to convert FEMA loan to grant $ 2.5 million Unbudgeted pension administrative expense $ .5 million $ 4.0 million * Excludes potential unbudgeted cost for capital projects 9/26/96 11:50 a.m. Schedule 1 2 Potential Funding Solution Alternatives For Fiscal Year 1996-97 A) Short-term Loans, Cash Flow Enhancements 1. Internal pooled cash 2. Tax Anticipation Notes 3. Loans from other governments and quasi -City organizations 4. Loan from pension funds 5. Seek advance payments from utilities for franchise and utility taxes B) New/Enhanced Revenues: 6. Increase EMS fees and billings and pursue payment from City residents 7. Re-establish parking ticket issuance to previous levels (particularly downtown) 8. ,Reform code enforcement process and institute hearing examiners 9. Utilize 1996-97 Law Enforcement Trust Fund moneys for Police overtime 10. Increase user fees where feasible 11. Increase solid waste fee to a level comparable with other jurisdictions 12. Increase marina, live -aboard and other public facility fees 13. Increase alarm, towing and certificate of use renewal fees 14. Pursue leveraged leases (sale -leaseback) transactions for appropriate City facilities 15. Sell parking garages to Off -Street Parking Authority 16. Sell City assets such as land, buildings and assets 17. Pension trust to absorb administrative costs 18. Aggressively pursue, accelerated grant drawdowns from state and federal governments 19. Aggressively pursue recovery of state and federal grant reimbursements 20. Identify non -franchised or licensed businesses on City property 21. Evaluate all City leases for opportunities to increase revenues 22. Charge for all special event,costs incurred by the City 23. Evaluate all available prior year CDEG, HOME and other federal fimds for potential' reprogramming 24. Maximize all indirect charges to grant funds by controlling program costs under administrative cap 25. Establish a suggestion award program for all employees 26. Establish firm and challenging guidelines for the waiver of City fees 27. Expand revenue collection program for delinquent accounts . 28. Explore all new City hires joining State pension.plan in lieu of existing City plans.... C) Expenditure Reductions 1. Institute across -the board reductions in operations depending on service implications 2. Reduce managerial and administrative positions 3. Review all executive benefits 4. Evaluate benefit packages for all employees - unionized and non -unionized 5. Re -open and re -negotiate all union contracts 6. Consider/negotiate deferral of the 4 percent January cost -of -living adjustment for all employees. 7. Freeze or cancel 1996-97 merit increases 8. Reduce number of and charge monthly use fee for take home vehicles 9. Define City Manager's discretionary authority to provide for disclosure and appropriate checks and balances including periodic auditing 10. Reduce cellular phones 11. Evaluate the growth in temporary and part-time positions 12. Immediately freeze all funded vacancies 13. Freeze all travel, memberships, and non -essential purchases 14. Stop portal-to-portal coverage for protective service employees 96- M 15. City Commission, City Clerk, City Attorney & City Manager to evaluate their office expenses and establish future guidelines which are approved, public and part of formal City procedures 16. Increase use of volunteers and community groups at park facilities 17. Close costly obsolete public facilities that are a drain on the treasury 18. Modify current level of solid waste service, including reducing trash service 19. Review recycling program 20. Re-evaluate and restructure NET program to reduce costs 21. Reduce general fund supported community based organizations consistent with reductions to City operations 22. Reduce funding in special programs and accounts area (non -departmental allocations) 23. Review all utility expenses Potential Funding Solution Alternatives For Fiscal Year 1997-98 and Beyond 1. Raise property taxes to 10 mill level 2. Present extraordinary two year millage for voter consideration 3. Transfer fire service to County or establish a City non -ad valorem based special assessment district for fire service . 4. Transfer E-911 service to County 5. Evaluate feasibility of transferring other services to Dade County. 6. Pursue legislative proposals to enhance revenue - partial year assessments, payments -in -lieu -of -taxes for exempt land in City, etc. 7. Evaluate all.outstanding loans due the City from various loan programs and aggressively pursue repayment of all delinquent amounts S. Establish non -ad valorem based special assessment districts for street lighting and other services 9. Restructure pension program and City contribution level, sharing programs; audit current programs for savings opportunities 10. Tie cost containment and performance goals to compensation levels for City executives 11. Develop replacement program for City vehicles•and.equipment 12. Properly fund all self irmrrance trust funds and begin to build adequate reserves to help cover unfunded liabilities 13. Thoroughly analyze worker's compensation and general liability and other self insured liability programs to develop procedures and systems to contain and/or reduce costs 14. Eliminate dependence on debt financing for operating purposes 15. Fund essenjdal renewal and replacement on a pay-as-you-go basis 16. Pursue privatization opportunities as appropriate 17. Develop two-tier compensation program for new hires in all areas of City service 18. Assess feasibility of restructuring City debt 19. Reduce dependence on TANs 20. Pursue renegotiating agreements with MSEA and County regarding funding for debt and operations of public facilities eligible for convention development tax support 21. Aggressively seek all outstanding FEMA receivables 22. Restructure health insurance program to contain and/or reduce costs 23. Institute plan to make all City conference, convention and public facilities self sufficient with no general fund or utility tax support required 24. Work with FP&L to institute energy savings programs in all City facilities 25. Evaluate privatization of garbage and trash collection Schedule 2 9/26/96 FAIRNESS MATRIX FOR ADDRESSING DEFICIT (All dollars in millions) Year beginning carryover deficit Projected FY 1996.97 revenue shortfall 6.8 Projected FY1996-97 expenditure overruns 12.7 Potential additional revenue shortfalls 9.4 Potential additional expenditure overruns 1.5 Capital Improvement Program shortfalls 18.2 Total MU COMPOSITION OF DEFICIT -RECURRING VS. ONE-TIME: A) Extent of required recurring revenues/savings solutions: Recurring shortages regvire recurring solutions $30.4 Capital repair and renovation reserves @ 5% 10.0 Fleet/equipment replacement funding @ 2.5% 5.0 Contingency 1.1 B) Extent to which ohe-time revenues are reasonable],g Total A) Recurring revenue/cost savings breakdown: Seek pension program cost reductions $6.0 Feelrevenue Increases 14.0 Service reductions/modifications & non -union cuts 3.0 Union concessions (appr=10% of total non -pension payroll) 15.0 - Can be workforce reductions, base pay decreases, hinge benefit reductions or any combination of each - Police - $7.5 million (half of general fund budget) - Fire - $3.75 million ( one quarter of genT fund budget) -AFSCME and Sanitation Workers - $3.75 million B) One time revenues: Leasebacks, Internal asset sales, MSEA $15.0 Land, other asset sales 10.0 Federal and state grants, match waivers, LETF 1.0 Pension forbearance/loan or other loan or one-time solutions 4,_0 Total$LQ loan onai pension fund loans, forbearances, asset swaps s from City authorities, County and/or state Long-term solutions: Non -ad valorem fire assessment Multi -tier compensation program Privatization Further asset sales Service transfers to County 10/07/96 To: Honorable Mayor & Members of the City Commission From: Merrett R. Stiertieim City Manager This Fairness Matrix has been prepared on a very preliminary basis after we determined the total City deficit ($68,000,000) which must be covered through Increased revenue, reduced expenses, loans, or one time revenues, If the City is to balance the 1996/1997 budget I strongly emphasize that these allocations are preliminary and are subject to substantial change. The matrix represents our Initial effort to design a fiscally responsible plan by which the City could achieve fiscal solvency. $80, 000, 000 $70,00o,000 $60,000,000 $50,000,000 $40,000,000 - $30,000,000 - $20,000,000 $10,000,000 City of Miami TIME IS MONEY Amount required per Month to Eliminate $68 Million by End of Fiscal Year (Assuming all New Revenues & Expenditures Reductions are Monthly) $0 - Oct-96 Nov-96 Dec-96 Jan-97 Feb-97 Mar-97 Apr-97 May-97 Jun-97 Jul-97 Aug-97 Sep-97 11/14/96 11:33 AM li `1 11114M6 GENERAL FUND PROJECTED REVENUES, EXPENDITURES AND CAPITAL PROJECT CASH REQUIREMENT 9:55 PM FOR FISCAL YEAR 1996-97 - (WITHOUT STRATEGIC FINANCIAL RECOVERY PLAN) 6 T 8 DESCRIPTION Oct 96 Nov 96 Dec 96 Jan97 Feb 97 Mar-97 Aar-97 May-97 Jun-97 JUW Au0"97 Seat 97 TOTAL Buda* t Variance REVENUE: BEGINING BALANCE $ (19.838,564) S (1,133.564) $ (4,495.655) f 22,376,791 $ 19.572.040 S 10,899.966 S (622,747) ; (7,531,658) S (21,915,885) S (29,719,123) f (36.241.950) $ (42.511,783) AD VALOREM TAXES FRANCHISE FEES 1,759,784 4,190,699 12,083,853 1.005.164 57.304.979 1,397,126 9.598,824 5.418,003 3.082.289 5.801,956 2,826,320 2.079,745 3.103,620 1.333.170 2.261.056 106.653,599 107,653,599 (1,000,000) LICENSESAND PERMITS 625.450 96.867 92.621 46,2t1 57.633 53.716 390.534 72.246 1.950.000 58,927 984,520 24,193 903.866 6,075 999,660 808,561 1.009.764 3.452,798 13.331,353 5,395,300 13,331,353 5,395.300 - . OTHER LICA PERMITS INTERGOVT REV.&FED.GRANTS 12.154 22,470 34,987 24.996 25.787 - 10.979 3,000,OW 17,116 20,252 35.786 23,765 . 153,205 19,408 15.413 W.860 400,712 400.712 CIGARETTE TX -TWO CENTS 23.958 29,878 23,795 25,791 - 20.711 27,112 24.573 47.261 26.311 - 30.105 51,144 22,964 27,502 27.015 192.076 59.787 3,365,449 350.000 6,355.449 350,000 (3,000,000) STATE REV.SHARING HALF -CENT SALES TAX 3,785,414 13.817.833 - - - - - - - _ _ 3.785,414 3.785,414 SHAREDREVA.00ALGOVT. 265,870 138,1D0 61,504 - T7,675 86.975 69,291 56,280 71.976 68,528 1,10QOW 44.971 1.301.014 63,397 1.481,153 67.932 17,700.000 1.072,600 17,700.0W 1.072,600 _ CHARGES FOR SERVICES 5,464 11.570 12.991 5,280 9.576 7.661 8.427 9.576 9.576 9.576 6.741 13.173 109.611 109.611 P(1BLIC SAFETY & FIRE HUMAN SERVICES & RECREATION 416.278 45.871 462,190 49.522 491,539 30,876 2,077,375 40.332 365,070 406,460 494.590 658.065 665.696 377,345 461.667 426,805 7.303,080 8.203,060 (900,000) OTHER CHARGES FOR SVCE 41.201 326.060 125,152 81,635 48,132 498,099 43.209 189,102 55,421 53.683 68,820 149,645 58.927 1.113.832 84,512 67.238 23.603 288,933 147.225 182.924 694.450 3.117.505 694.450 3,117,505 F-'-c & FOREFEITURES EVENUE 212.948 182.521 205.934 194.882 192,873 204,672 224.444 222,850 242.389 235.757 247.666 245,212 2.612.148 3.112,148 (500.000) ST INCOME R AL PROPERTIES 18.708 34.062 110,336 144.653 130.583 123.557 116,448 112,797 117,476 120.931 124,424 85.975 1,240.000 1.540,000 (300.000) 155,023 125,902 97,972 173.008 154.918 165,011 156,264 130,602 257,159 118,077 108,912 257,152 1,900,000 1,90O.O0 ROUSE MIAMI INC 112.500 112.500 112.500 112,5W 112.500 112.500 112,500 112,500 112,5D0 112.500 112,50D 112.500 1,350.000 1,350.OW OTHER REVENUE 33.780 272,266 87.344 23.782 100,067 157.870 61,260 207,573 62,464 13,000 67,231 69.966 1,156,609 1.156.609 CONT.FROM SPECAEV: _ PUBLIC SERVICE TAXES 1.119,478 1.119.478 1,119,478 1,119.478 1.119,478 1,119.478 1.119.478 2.241,068 1.119,478 1,119,478 1.119,478 1,119.464 14,555,312 17.555.312 CONT.FROM ENTERP.FUND: (3•WQ000) PLANNING,BLDG,&ZONING - 316,933 158,451 158,451 158.451 158,451 158,451 158,451 158,451 158,451 158,451 158,453 1,901,445 1,901,445 ORANGE 8OD1/IJGUARANTEED ENTL - - - - - - - _ _ 1,193.425 1.486.020 2.679.445 2,679.445 DINNER KEY COCONUT GROVE EXHIBITION CTR - _ - _ _ _ 886.000 - _ 886,OW 866.000 CONT.FROM LAW DEPT: 34.938 - - - - - - 90,062 - 202,396 - 202,396 125,DW 202,396 125,OW CONT.FROM MEAARENA: - - - 75.000 - - 75.000 150.000 - 300.000 300,O00 _ TELEPHONE FRANCHISE 4,867 33,419 158.454 26,547 14,984 8.524 16,046 7,817 5,752 8.583 3.687 6.254 294,964 294.964 GUARANTEED ENTITLEMENT 2,651.953 - - - - - - - - _ _ 158,997 2.810,950 2.810.950 LOANS FROM OTHER FUNDS' 7.582,772 7,582,772 TOTAL REVENUE PROJECTION S 17,065,911 S 15.326.724 f 57,156,152 S 39.204.195 f 28 083 209 f 16 849121 S 8.910.r.42 S 1.552467 S (1`651 789) S (20,990,509) f (27 599 500) S (29 282 8441 202,576,114 S 203,993,342 f (8,700,000) Note: Beginning Balances not reflected in Total 'Note: BellSouth 2,423,680 and Gas tax 5.159,092 EXPENDITURE: PAYROLL AND FRINGE BENEFITS GENERAL GOVERNMENT PUBLIC SAFETY & FIRE -VED COMPENSATION )TAL $ 2.517,814 10.324.542 383.026 $ 13.225.382 $ 2.517,814 S 10.324,542 19.312 $ 12,861,668 $ 3.776,737 S 15.486,813 27.415 19,290.965 ; 2,517,814 S 10.324,542 11.453 12.853.809 S 2,517.814 S 10.324.542 82.546 12,924.902 $ 2,517.814 S 10.324,542 31,337 12.873,693 $ 2,517,814 S 10.324,542 22,433 12.664 789 $ 3.776.737 S 15.486.813 800,420 20 063 970 $ 2,517,814 S 10,324,542 302.118 13,144,474 $ 2,517,814 S 10.324.542 95.469 12,937,825 $ 2,517.814 S 10,324.542 38410 12,878.765 f 2,517,815 S 10,291,529 51.237 12,860,531 $ 32.731,6t5 134.186.033 1.863.176 168,780.824 S 32.731.615 S 132,186,033 (2,O00,000) 1.863,176 S 166,760.824 $ (2,000.000) OPERATING EXPENSES GENERAL GOVERNMENT SW,000 642.770 572.654 359.618 2BOA90 323,148 257,029 241.623 276,025 222,247 216.335 136,658 S 4.028,597 $ 4,028.597 PUBLIC SAFETY & FIRE 1,500,OW 3,033,261 3.033,261 3.033,261 1.679.735 1.679,735 1,679,735 1.679.735 335,939 280,352 503,923 423,461 18,862.403 Ikl!62,403 SPECIAL PROGRAMS & A/C -CONT.TO ENTERP.FD 387,967 1.034.576 1,034.576 1.034,576 1.034,570 573.735 - _ _ _ _ _ 5,1W,OW (S,iW,OW) -CONT.INTSVSE 967.228 1,198.247 1.198.247 500,OW 5W,OW 1,183.328 985,213 985.213 985.213 985.213 485.213 5AS5,217 15,458,332 4.958.332 (10,500,DW) -CONT.SPEC.REV 665.896 351.261 353.658 676.271 423.031 147,127 147,127 147.127 149.619 50,O00 221.103 472,354 3,804,574 3,804.574 -CONT.TO T&A: 453,002 118.988 908,003 416,346 - - - - - - 403,013 453.002 2.750.354 150,354 (2,6W,OW) -REPAYMENT OF TAN'S _ _ _ -OTHER CHARGES 500,O00 581,608 607,225 848,274 340,515 691.102 508.607 350.684 176,054 775.804 203,925 _ 1.124.450 _ 6.908,258 5.408,253 (1,500,000) PENSION DUE 10/1195 _ _ _ REPAYMENT OF LOANS TO OTHER FUNDS' 7,582.772 7 582 772 SUB -TOTAL $ 4.974.093 S 6,960,711 $ 15ABS.396 $_ 6.865.346 $ 4.255,341 S 4,598,175 S 3 577 711 $ 3 404 382 $ 1 922 860 S 2.313.616 S 2,033.517 $ B 095142 $ 64 495 290 $ 3T.212.518 (19 700 000) TOTAL EXPENDITURE S 18.199,475 S 19822,379 f 34,779,361 S 19722,155 $ 17,183,243 f 17,471,668 f 16,u2SW S 23,468,352 f 15,067,334 i 15,251,"1 It 14,912.283 $20,955,723 S _233,276,114 $ 203,993,342 S(21,700,000) GENERAL FUND ENDING BALANCE (f1,133,564) (f4,495,655) f22,376,791 $19,572.040 $10.699.966 (3822,741) ($7,531,958) (321,915,885) ($29,719,123) (f36,241,950) (f42,511,783) (f50,238,564) S(30,400,000) CAPITAL PROJECT SHORTFALL f - f - f (1,500,000) f (1,500,000) S (1,500,000) S (1,500,000) f (1,500,000) f (1,500,000) f (1,500,000) f (1,500.000) S (1,500,000) S (4,500,000) (18,000,O00) COMBINED CASH POSITION (111,133,564) (f4,495,655) $20,876,791 $16,572,040 $6,399,966 (56,622,747) (f15,031,858) (f30,915,685) ($40,219,123) ($48,241.950 (f56,011,783) (368,238,564) awm City of Miami Strategic Financial Recovery Flan - Funding Solutions Matrix A) Citywide Expenditure & Union -Related Reduction RecommendationsM A -I IV1Y."'1. IAKl:_-Nlt;;OSiT CONTAINMENT MEASURES Reduce take home vehicles/portal-to-portal user fee ity light fleet reductions ` Eliminate all funded vacancies (including appropriate fringes) Eliminate 4% cost of living adjustment for non -union employees Eliminate stipend & health insurance for all City Board members (needs code Eliminate non -union executive benefits, Car insurance Cellular phones and cellular phone cash allowances Health insurance deductible Car allowance Sub -Total UNION CONCESSIONS LIUNA =lets $500 bonus +Yorker's compensation/supplemental limited to 80% of pay L/UNA Total AFSCME Defer 4% cost of living adjustment until September 1,1998 Federal forfeiture funds Defer receipt of uniforms for FY 1996.97 Drop grievance #f4-96 on 24 hour cars AFSCME Total FOP Defer 4% cost of living adjustment until September 1,1990 Health premium waiver Page 1 1201 $341, $30,000 ,200,300,500 E $0 $1,508,918 $1,8 44,233 $600,000 $60,000 $500,000 $2,068,918 $2,344,233 $1,661,100 $2,030,300 $900,000 $900,000 il h City of Miami Strategic Financial Recovery Plan - Funding Solution A) Citywide Expenditure & union -Related Reduction R s IVlata Recommendations Take home car tee (40$ per pay period) lake home car maintenance 'ideral forfeiture fund — /Fine. Worker's compensation/supplemental limited to 8o% of Defer receipt of uniforms for FY 1gg6_g7'i"—"' Seven year car rotation schedule—�— tAFF FOP Total Defer 4%cast of living adjustment until September 1, 1998 Reduce 42 hour training shift (FY 96-9T = 8 positions and FY 97-98 = fi positions) EEE itions (FY 9fi-97 and FY 97-98 = fi positions including 1 captain) osition Aorker's compensationtsupplemental limited to 10o% of salary Naive receipt of salary reserves teduce revenue incentive pay from 2.6% to 1.6% fAFF Total Sub -Total PENSION CONTRIBUTION ADJUSTB)AEN?S tF1rer!iqh�fer!sV' emplo yee*�ffii n employee`s retirement trust etirement trust Sub -Total CITYWIDE TOTALS Page 2 $1 $26,21 City of Miami Strategic Financial Recovery Plan - Funding solutions Matrix +� " C) 6 ry , B) Departmental Expenditure Reduction Recommendations - 0 0 +_f.�}A'l9 - .i �j 'S`i.�s �92 '� �• � f b .+t �'s7 1�t91�.tl� w Y �, � A ^^c r R■ A M A /+CRRCwIT Reduce advertising for RFPs, bids, and sale of properties 11/15 $3,000 $3,000 Reduce professional engineering services .educe use of outside attorneys for litigation of city properties 11/15 11115 $10,000 $$5,000 $10,000 932 $$5,000 Reduce survey services 14/15 $5,000 $5,000 Reduce office and miscellaneous supplies 11/15 $3,000 $3,000 Eliminate internal service charges for Public Works reproductions ,11/15 $1,500 $1,500 Sub -Total $47,432 $47,432 / ITV P+1 CMIZ* Reduce tuition reimbursements 11/15 $400 $400 Reduce delivery services and limit postage expenses 1111b $1,000 $1,000 Eliminate hiring from temporary employment agency Reduce office supplies 11115 11115 $5,000 $1,000 $5,000 $1,000 Sub -Total $7,400 $7,400 '4% and anniversary/longevity increase for support staff included in Citywide numbers el ITV RR Iiminate reimbursements for parking expenses 11/15 $250 $250 Reduce office equipment rental 11/15 $1,000 $1,000 Reduce professional services provided to CBOs ($4,500 checks) Reduce office machine repairs 11/15 ' 11116 $23,000 $792 $23,000 $792 Sub -Total $25,042 $25,042 w RaM.■&9- 9MI Aw.wilwI 7ATIAw1 Eliminate Administrative Ass't. I and savings from salary downgrade 1 12/1, $46,$25 $56,546 Reduce Unified Development Project consulting services 11/.1b $17,000 $17,000 Do not purchase ESRI software multi-user license and printer 11115 $10,000 $10,000 Eliminate contracting outside architectural services 11/15: ,000 ,000 Reduce various professional services concerning development projects 11116' $25,000 $25,000 Page 3 City of Miami Strategic Financial recovery Plan - Funding Solutions Matrix 13) Departmental Expenditure reduction Recommendations 4 mplemei0 9 Po' sitions' F1( im R,_ M- Adjfastment FY97FY98 : . Reduce outside contractual services for project implementation 11M5 $3,000 $3,000 Reduce allocation for beverages provided to committees 11/15 $1,500 $1,500 Reduce office and miscellaneous supplies 11116' $10,000 $10,000 'iminate internal service charges for Public Works reproductions 11115: $3,600 $3,600 Sub -Total $124,925 $134,646 CIVIL SERVICE Reduce contractual legal services provided to the Civil Service Board 11115 $11,000 $11,000 Forego purchase of Meridian Key Expansion Module for office telephones 1.1/15 $535 $535 Forego purchase of new filing units 11115 F $1,792 $1,792 Sub -Total $13,327 $13,327 EQUAL OPPORTUNITY Downgrade position and achieve salary savings 1011 $8,116 $9,801 Eliminate tuition reimbursements 11M6 $800 $800 Eliminate ICMA retirement contribution which is not required 11115 $200 $200 Do not advertise for workshops and community events 11/15- $1,000 $1,000 Forego reimbursement for parking expenses 11/15 $380 $0 Zeduce postage usage and delivery services AII115'- $900 $900 -jo not provide plaqueslawards to board members 111M $180 $180 Do not cover miscellaneous expenses associated with sponsoring events -11116 $500 $0 Reduce office and miscellaneous supplies -11116 $1,800 $1,800 Sub -Total $13,876 $14,681 FINANCE Eliminate 2 filled unclassified positions 2 1211:': $20,237 $24,439 Eliminate 5 vacant Resource Specialists and 6 filled Task Force temp positions 11 ''.121,1 $105,294 $105,294 Reduce tuition reimbursements 11M6. $9,300 $9,300 Eliminate employee awards 1.1/15 $300 $300 Eliminate electricity and water utility costs 1 fi1b; $20,074 $20,074 G T S V 6 Page 4 O� City of Miami Strategic Financial Recovery Plan - Funding Solutions Matrix 6 T 8 Bj Departmental Expenditure Reduction Recommendations s {� `Cm lemeri ioINS K: "Cr Positions0 P9d7 Time 1Q . zQ :._3Q 4Q 1 = d� stmen� 1(97 yY FYv a FT. ,Pi' 'CP:. .. w ..- Reduce office equipment rental 1Vi5` $2,000 $2,000 Reduce payments for licenses to upgrade computer software '11lt5 $50,000 $50,000 Reduce contractual services for microfiche machine maintenance and temp staff 'educe 11115 $28,046 $28,046 telephone usage -:11115 $3,000 $3,000 Reduce office equipment repairs and supplies !!hs $3,600 $3,600 Adjust for salary expenses incorrectly charged to GOB debt service accounts 11115 -$1081040 -$130,471 Sub -Total $133,811 $115,582 HEARING BOARD Provide compensatory time for evening work, rather than overtime 11115 $800 $1,000 Reduce tuition benefit budget 11115 $1,000 Reduce legal service support Use less expensive, innovative advertising methods .11115 11115 $10,000 $12,750 $12,000 $17,000 Reduce postage by distributing materials from NET offices Reduce office supply use Eliminate motor pool expense 11l1S. 11H5: t11M6 $6,000 $375 $600 $8,000 $500 $6,000 Sub -Total $31,525 $44,500 '.ABOR RELATIONS educe temporary salaries and expenses 11115 $3,494 Sub -Total $3,494 HUMAN RESOURCES Reduce operating expenses 1J111141$30,1401 $30,140 Sub -Total $30,140 $30040 INTERNAL AUDITS Achieve savings from replacement Director 10114 ms-idl:tl $19,500 Eliminate one filled unclassified position 1 91/1S`_ $27,819 $33,595 Defer professional services for one year 11115 $20,000 $0 $0 Page 5 City of Miami Strategic Financial Recovery Plan - ending Solutions Matrix 13) Departmental Expenditure Reduction Recommendations A a n MMM W, ueC.ia `: -='Ell ONEM Reduce temporary salaries allocation 1111151$16,1481 $16,148 Sub Total $20,000 $60,115 $69,243 .AW* Eliminate two vacant Assistant City Attorneys and no 5% increases for attorneys 2 11112 $131,264 $158,517 Eliminate reimbursements for court costs and fees 11/15 $300 $300 Reduce amount available to repair office equipment 11/15 $2,007 $2,007 Reduce -office supplies 19f16 $4,635 $4,635 Do not purchase new chairs or upgrade typewriter 11/16 $4,200 $4,200 Sub -Total $142,406 $169,659 `4% and anniversaryAongevity increase for support staff included in Citywide numbers PUBLIC FACILITIES Close Dinner Key Boatyard effective January 1,1997 (property to be developed) 1 2 111 $250,324 $333,733 Close Bobby Maduro Stadium with insurance paid through 6197 11115 $129,541 $178,900 Eliminate 3 part-time positions & reduce operating expenses at Dinner Key Marina 3 MIS $78,000 $78,000 Reduce part-time salaries and operating expenses at Coconut Grove Convention Cta 11115- $18,400 $18,400 Reduce part-time staff and operating expenses at Miami Springs Golf Course 6 11116 $49,011 $49,011 ?educe operating expenses at Miami Convention Center & Orange Bowl 11116 $16,500 $16,500 Sub -Total $541,776 $674,544 POLICE Reduce general operating expenses 11116 $188,000 $188,000 Eliminate Aviation detail operating expenses ".11/1-' $180,000 $180,000 Close North and South sub -stations; redeploy officers to field (report pending) 111`°` $191,167 $207,000 COPS funding if full waiver granted 1l1.`', $3,930,000 $3,828,000 Reduce LETF funding to outside organizations to help cover overtime for investigations ' 111% $83,333 $100,000 Reduce overtime In operations through Internal controls 11116 $1,000,000 $1,000,000 Reduce DUi/court overtime through pilot program to control costs ;_11145' $333,3331 $400,000 Sub -Total $5,905,833 $5,903,000 Page 6 6TS -96 City of Miami Strategic Financial Recovery Plan a Funding solutions Matrix B) Departmental Expenditure Reduction Recommendations mrrJP uJ+s�''V Yi�C - / • � � � •....R,Y��aYe�e'10111111CM111111 �rVk J Rr Sa � I. PUBLIC WORKS Reduce overtime and operating expenses 11/16 $193,900 $193,900 'liminate one budgeted permanent part-time position 1 11/16 $26,667 $32,000 Eliminate one temporary filled position 1 "11/15 $19,933 $23,920 Close Virginia Key Beach - no access 12 11/15 $112,167 $112,167 Cancel grounds maintenance of Fire Stations and College: Fire absorb cost 11/1S $18,230 $21,876 Cancel grounds maintenance of Police Building and Stations: Police absorb cost 11/16' $9,090 $10,908 Reduce waste disposal budget based on projected costs 11/15 $15,000 $15,000 Sub -Total $394,987 $409,771 Page 7 City of Miami Strategic Financial Recovery Plan - Funding Solutions Matrix B) Departmental Expenditure Reduction Recommendations PC - DeScr�ptio.rtFT SPECIAL PROGRAMS P. Arrni Intro Eliminate funding for Commission on Status of Women (City provides staff support) Eliminate funding for Nuisance Abatement Board (Hearing Brit. provides staff support) 'Iminate funding for International Trade Board Eliminate funding for International Trade Board - Promotion Eliminate funding for Gibson Memorial Oratorical Eliminate funding for BPW Club -Gibson Oratorical Eliminate funding for Bay of Pigs Eliminate funding for Best Buddies Eliminate funding for Boys Club Eliminate funding for Ounce of Prevention Eliminate funding for Kids In O-de Society Reduce funding to Sister Cities by 16% Reduce funding for System Consultant Inc. accounting software Reduce Protocol account by 15% Eliminate funding for Computer Training Reduce funding for legislative liaison services Reduce funding for Miami River Center from projected love[ Reduce funding for Bayfront Park Management Trust by 13% Sub -Total 11/15; 11116 11115' 11l15 11/15 1111b 11115 11115 11/15 11115 11116' 1i/15 11115 .11115' 1111ti: ! 1/15 1111ti if1 $40,000 $89,870 $$89,O70 $125,000 $50,QOQ 2 $2,000 $2,000 $10,OOD $50,000 $15,000 $20,000 $22,500 $100,000 00,000 $90,000 $150,000 $150,OOD $400,000 $1,557,320 $40,000 $$40,00 $119,826 000 $2gD,000 $ 50,OgQ $50 $22,000 ,000 $10,000 $50,000 $15,QOD $20,000 $22,500 $100,000 00,000 $90,000 $$90,000 $150.000 $400,0AA 00 $1,612,276 FIRE GENERAL SERVICES ADMINISTRATION Reduce equip., tire, and fuel due to service adjustments from projected Is "' 11,r <; $97,500 $13Q,gD0 Sub -Total $97,500 $130,000 NEIGHBORHOOD ENHANCEMENT TEAM Page 8 City of Miami Strategic Financial Recovery Plan - Funding Solutions Matrix B) Departmental Expenditure Reduction Recommendations - C40 Reduce NET offices from 13 to 8 requiring 8 personnel rollbacks Sub -Total ;OLID WASTE Reduce disposal costs for trash by delivering a max. of 40% to transfer stations PARKS Eliminate 1 full-time unclassified position 1 1)1 Eliminate I temporary position Reduce 2 year-round pools to 8-week programs (Hadley & Jose Marti parks) 1r1 Cut Tacolcy grant-in-aid by 15% Cut Little Havana grant-in-aid by 15! (,(; V M4ii V.QI EXPENDITURE REDUCTION TOTALS Page 9 $1 $15,390 $24,700 $16,125 $21,600 $150,000 $15,400 $200,000 $15,400 $12,0001 $12,000 $273,700 $208,915 $20,000 $10,5691037 $11,390,967 il City of Miami Strategic Financial Recovery Plan - Funding Solutions Matrix c) Revenue Enhancement Recommendations 'y,n�_ a • _ • I. --. nSissc.d f$� f.' }'�"' d„ai'.4 S�if: Dl� MOM CITY CLERK Establish annual lobbyist registration fee 1t1 $15,0001 $30,000 Sub -Total $15,000 $30,000 COMMUNITY PLANNING & REVITALIZATION _ __ Sub -Total DI IRI If` CAP11 ITIFC Marine rate increase - eliminate 20% discount for City residents (ordinance change) 1J1 ` $109,152 $145,536 Marina rate increase - sightseeing increase from $.4011' to $.801f (ordinance change) 1/1 $74,340 $99,120 Marina rate increase - commercial increase from $.201f to .381f (ordinance change) ;1K $98,519 $131,358 Dinner Key anchorage 100 moorings 3811' at $.10lf - cost $50 per mooring 4/1 ' $38,400 $76,800 Sub -Total $320,411 $452,814 BUILDING & ZONING* Collect glazing inspection fee (glass buildings) already part of code istitute a mandatory inspection fee on homes for sale (requires ordinance) Close out active back -log of code compliance cases Institute certification fee of $100 for buildings older than 40 years (requires ordinance) Fully enforce permitting of buildings with full-time maintenance crews Fully enforce signage ordinance Increase electrical and burglar alarm fees to County level (requires ordinance) Increase structural fees to County level (requires ordinance) Increase mechanical (elevator) fees to County level Add 11 inspectors and staff to ensure revenue collection Sub Total *Dependent upon add -back of inspectors and staff 1/1 $10,000 $10,000 1M $75,000 $100,000 1f1 $100,000 $100,000 111 $10,000 $4,000 111' $25,000 $25,000 `111" $97,500 $130,000 $26,625 $36,500 111". $16,688 $22,250 $235,000 $235,000 -$292,000 -$352,000 Page 10 $303,813 $309,750 I City ®f Miami Strategic Financial Recovery Plan - Funding Solutions Matrix Cj Revenue Enhancement Recommendations • • �;h`''�_..-�� � � , 0• • l,pi tx .:� Y'.-�: �' � s�- �-lP'1� !el°Yt'f s'/- ?<�' p p p FIRE Establish non ad valorem based Fire assessment fee V 1111.7$22,500,000 Aggressively pursue EMS collections (use collection agency for delinquent accounts) ' 1/1` $175,0001 $250,000 Sub -Total $175,000 $22,750,000 NEIGHBORHOOD ENHANCEMENT TEAMS Sub -Total PARKS Increase park user fees I 1/1 $100,0001 $200,000 Reinvest park user fees into park programs ill- $100,000-$200,000 Sub -Total $0 $0 POLICE Sell two OH-6 helicopters from Aviation detail 10117 $300,000 Enforce parking code particularly in downtown area 11115 $200,000 $250,000 Increase towing Administrative Fee to $20.00 from $15.00 11N5 $172,000 $206,000 icrease private property towing Administrative Fee to $15.00 from $5.00 1/1 $24,750 $33,000 Amend City Ordinance to include $500.00 fee for cars used in crimes 1/1 ;., $750,000 $1,000,000 Amend City's Alarm Ordinance 111 $400,000 $480,000 Hire collection agency to collect delinquent fines U1. $193,000 Amend City Code sec. 42-8 to increase service fees (records) 4!1 - $69,750 $93,000 Replace off -duty surcharge of $8 per officer per shift with hourly surcharge of $3 11/15' $250,0001 $300,000 Sub -Total $493,000 $1,866,500 $2,362,000 SOLID WASTE Increase solid waste fee to $320 to fully cover costs I $10,000,000F $10,000,000 Sub -Total $10,000,000 $10,000,000 Page 11 N City of Miami Strategic Financial Recovery Plan - Funding Solutions Matrix C) Revenue Enhancement Recommendations SPECIFIC Sub -Total *Dependent upon addition of 10 inspectors; revenues are net of additional positions REVENUE ENHANCEMENT TOTALS GRAND TOTALS I U0,2119,11931 $56,420,9051 $76,247,1841 1 ADD -BACKS Restoration of management and key support positions Establishment Of operational and management analysis capability NET OF ADD -BACK TOTALS Sub -Total -W.WW'wWul _WbulM $0 -$1,250,000 -$1,250,000 WE1,239,11931 $55,170,9051 $74,997,184 Page 12 mi C 11/14/96 GENERAL FUND PROJECTED REVENUES, EXPENDITURES AND CAPITAL PROJECT CASH REQUIREMENT FOR FISCAL YEAR 1996.97 (WITH STRATEGIC FINANCIAL RECOVERY PLAN) 10:06 PM GO 1 DESCRIPTION Oct 96 Nov 96 Dec 96 Jan97 Feb 97 MarA7 Apr-97 May97 Jun-91 Jut-97 Au0.97 Sept 97 TOTAL Bud Oat Y_ anan REVENUE: BEGINING BALANCE S (19.838.564) S (475,184) S (2,716.819) S 24.988.759 S 25,482.925 $ 30.543.935 S 21.719.041 S 17,307.749 S 5.329.221 $ 3.273.982 S 6.699.154 S 3,177.320 AD VALOREM TAXES 1.759.794 12,0113.853 57.304.970 9,598.824 5,418,003 3,082,289 5,801,958 2.825.320 2,979,745 3.103.620 1.333,170 2251.056 108,863,599 tOT.653,599 (1,000,000) FRANCHISE FEES 4.190,699 1.005,184 1.397.126 - - - 890.534 t.950,000 994.520 903,865 999.660 1.009,764 13.331,353 13,331.353 - LICENSES AND PERMITS B25,450 95,887 92,621 46.211 57.633 53316 72,240 56,927 24.193 6.075 808.58t 3.452,798 5,325.300 5.395.300 - OTHER LIC.6 PERMITS IZ154 34.987 25.787 10.979 17,110 20,252 35.788 23.765 153.205 19.408 15.413 31.860 400.712 400,712 - INTERGOVTREVAFED.GRANTS 22.470 24,996- - 3.000,000 - _ - 47.261 - 61,144 27.602 192.076 3.365,449 6,365.440 (3.000.000) CIGARETTE TX -TWO CENTS 23.958 29,870 23.795 25.791 28,711 27.112 24,573 26,311 30.105 22,964 27,015 59,787 350.000 350.000 - STATE REV.SHARING 3,765.414 - • - - - - - - 3,785,414 3,785,414 - HALF -CENT SALES TAX 13.817,833 - - - - - - - - 1,100.000 1.301.014 1.481,153 17,700.WO 17,700,D00 - SHARED REVILOCAL GOVT. 265,670 138.100 61,504 77.676 86,975 69,291 56.280 71,978 88,628 44.971 63,397 67.032 1,072.600 1,072,800 - CHARGES FOR SERVICES 5,464 11,570 12,991 5.280 9.576 7,661 8.427 9,576 9.576 9,578 6,741 13,173 109,611 109.611 - PUBLIC SAFETY 6 FIRE 416,278 462,190 491,539 2,077,375 385,070 08,460 494.590 658,065 665.696 377,345 461,867 426,805 7.303.080 8,203.080 (900.000) HUMAN SERVICES 6 RECREATION 45,871 49.522 30.876 40.332 40.132 43,209 55.421 68.820 58.927 84,512 23,603 147,225 694,450 694,450 - OTHER CHARGES FOR SVCE 41,201 326.060 125,152 81,635 498.099 189.102 53,883 149.648 1.113.832 67.238 288.933 182,924 3.117.505 3.117.505 F-•'FS 8 FOREFEITURES 21ZS48 162.521 205.934 104.882 192.873 204,672 224.444 222,850 242,389 235.757 247.60 245,212 2.612,148 3,112.148 (500.000) 1EVENUE: _ST INCOME 18.708 34.062 110,338 144.653 130,583 123.557 116.448 112.797 117.478 120,981 124,424 85.975 1,240,000 1,540,000 (300.000) .tAL PROPERTIES 155,023 125.902 97.972 173.008 154,918 165.011 156.264 130,602 257.150 118.077 108.912 257,152 1.900.000 1,900.000 - ROUSEMIAMIINC 112.5DD 112.500 112,500 112.500 112,500 112,500 112,500 112,500 112,500 lIZ500 112.500 112.500 1.35D,000 1,350,DDO - OTHER REVENUE 33.780 272.266 87.344 23,782 100,067 157.870 61.260 207.573 62.464 13.006 67.231 69.966 1,158.609 1,156,W9 - CONT.FROM SPEC.REV: PUBLIC SERVICE TAXES 1.119,478 1.119,478 1,119.478 1.119,478 1.119.478 1,119.478 1,10.478 2,241.068 1.119.478 1.119,478 1.119.478 1,119,464 14.555.312 17.555,312 (3,000,000) CONT.FROM ENTERP.FUND: PLANNING,BLDG, S ZONING - 316.933 158,451 158.451 158,451 150,451 158,451 158,451 158.451 158.451 156.451 i5B,453 1,901,445 f,90t,145 ORANGE BOWUGUARANTEED ENTIL - - - - - - - - - 1.193.425 1.456.020 2,679,445 2.679.445 - DINNER KEY _ _ _ _ _ _ _ 888,000 - - 868,000 866.000 - COCONUT GROVE EXHIBITION CTR - - - - - - - - - - - 202.396 202.396 202,396 - CONT.FROM LAW DEPT: - - 34,938 - - - - - 90.062 - - 125.000 125.000 - CONT.FROM MIAARENA: _ _ _ _ _ 15.000 - - 75.000 150,000 - 300.000 300.000 TELEPHONE FRANCHISE 4.867 33.419 158.484 26,547 14.954 8,524 16.040 Ta17 5.752 8.583 3.687 6.254 294.964 294.964 - GUARANTEED ENTITLEMENT, 2,651.953 - - - - - - - - - 158,997 2,810,950 2.810,950 - LOANS FROM OTHER FUNDS' 7.582.772 7,582.772 TOTAL REVENUE PROJECTION S 17 065 911 f 16 965104 S 58,234,1198 S 41 906163 S 34194 094 S 36,493,1193 S 31 252,430 3 26,392,074 S 12,693,317 $ 12,002,596 f 15,341,604 S 16,406,262 S 202,676,114 S 203,993,342 f (8.700,000) Note: Beginning Balances not reflected in Total 'Note: BellSoalh 2.423.080 and Gas tax 5.159,092 EXPENDITURE: PAYROLL AND FRINGE BENEFITS GENERAL GOVERNMENT f 2.517.814 $ 2.517.814 $ 3,776,737 S 2.517.814 f 2,517.814 $ 2,517,814 S 2,517.814 $ 3.778.737 S 2.W.S/4 $ 2,517,814 S 2,517.814 $ 2,517,815 $ 32.731,81S S 32,731.615 S - PUBLIC SAFETY 8. FIRE 10.324.542 10.324,542 15.486.813 10.324,542 10,324.542 10.324.542 10.324.542 15.486,813 10.324,542 10.324.542 10,324,642 10,291.529 134.186.033 132.196.033 (2,000,000) ACCRUED COMPENSATION 383.025 10.312 27.415 11,453 82,546 31,337 22.433 800.420 3D2,118 95.469 36.410 51,21T 1,663.175 1,863,176 SUBTOTAL S 13 225 382 $ 12,861.658 S 19.290.965 S 12.853.809 S 12.024.902 f 12 873 693 S 12.864.789 $ 20.063.970 $ 13144 474 $ 12,937.825 $ 12.878.768 $ 12.560 581 $ 188,780.824 $ 166.780.824 f (Z.000.WO) ' 4TING EXPENSES GENERAL GOVERNMENT 500,000 642.770 572.654 359,618 280.490 323.148 257.029 241.623 275.025 222.247 216.335 136,658 $ 4.028.597 $ 4,028,597 - PUBLIC SAFETY 8 FIRE 1,500,000 3.033,261 3.033.261 3.033.261 1.679,735 1,679,735 1,679.735 1,679,735 335,939 290,352 503,928 423,461 18,86Z,403 18,662.403 - SPECIAL PROGRAMS d A/C -CONT.TO ENTERPTD 387,967 1.034.576 1,034.576 1.034,576 1.034,570 573,735 - - - - - - 5,100,000 (5.100,000) -CONT.INT SVSE 967.228 1,198.247 1,190,247 500,000 500,0DO 1.183,320 085.213 985,213 985,213 085.213 485.213 5.465.217 15.458,332 4.958,332 (10,500,00(1) -CONT.SPEC.REV 665.696 351.261 353,658 676.271 423.031 147.127 147,127 147.127 149,619 50,000 221.103 472.354 3,804.574 3.804,574 - -CONT.TO T&A: 453.002 118.988 906,003 • 410.346 - - - - - - 403.013 453,002 2,750,354 150.354 (2.600,000) -REPAYMENTOFTANS -OTHER CHARGES 5DO,ODO 581,608 807,225 $48.274 340.515 691.102 508.607 350.684 - 176.0S4 775,804 203.925 - 1.124.450 6.908,258 5.408.258 (1.500.000) PENSION DUE 10I1195 - - - - - - - - 7.592.772 REPAYMENT OF LOANS TO OTHER FUNDS' SUBTOTAL $ 4,974,093 S (1,960.711 S 7.582.772 15.488.396 S 0.365.340 f 4,250.341 $ 4.598.175 S 3,577.711 $ 3.4G4.382 $ 1.922.860 $ 2.313.818 f 2,033.517 f 8,095.142 $ 64.495.290 $ 37.212.518 (19,7W.OW) TOTAL EXPENDITURE S 18.199.475 $ 19.822,379 f 34.779.361 $ 18 722155 $ 17183 243 S 117,471.868 f 16 442 500 $ 23 468 362 $ 15,067.334 $ 15,261,"1 3 14,912.283 $ 20,955.123 f 233,276,114 S 103,993,342 S(21,700,000) CAPITAL PROJECT SHORTFALL (1,500,000) (1,500,000) (1,600,000) (1,600,000) (1,600,000) (1,500.000) (1,600,000) (1,600,000) (1,600,000) (4,600,000) (18.000,000) STRATEGIC FINANCIAL RECOVERY PLAN S 658,380 $ 1,120,45S f 2.333,132 S 5,798.917 f 14.233.084 S 4,197.819 S 3,997,919 $ 3.205.499 S 7,247,999 f 11.447.999 S 4.247,999 f 16.270,999 11 15,460.102 COMBINED CASH POSITION (5476,164) (112,716,1119) $24,939,759 $26.482,925 $30,643.935 $21,719.041 $17,301,749 $5,329,221 $3,273,982 56,699,164 13.177.320 $7.221,533 li r CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM TO: Merrett Stierheim DATE : November 13, 1996 FILE City Manager SUBJECT: Mid -Level Management FROM: R. Sue Weller REFERENCES: Labor Relations Officer ENCLOSURES: This memorandum is in response to your request for information on the insufficient number of mid -level management.employees in the City. Typically, in the State of Florida public sector arena where a governmental agency is unionized, you will find a group of employees who have been designated as managerial and/or confidential. This designation is determined by the Public Employees Relations Commission (PERC) and usually consists of your mid -level managers and those who act in a confidential capacity to these managers. The following is a summary of the City's history on managerial and/or confidential designations. • 1978 - PERC, after holding a unit determination hearing, issues order excluding classifications as managerial and/or confidential. • 1978-1991 - Determination of new classifications as managerial/confidential or AFSCME bargaining unit classifications negotiated during normal process of labor negotiation. • 11/21/91 - Memorandum of Understanding entered into between AFSCME and City transferring managerial/confidential classifications (275 employees) to the AFSCME bargaining unit. • 1991 to Present - All new classified classifications placed in AFSCME bargaining unit. Following is a detailed history on the establishment of managerial/confidential classifications in the City of Miami, the subsequent placement of managerial/confidential classifications in AFSCME and possible future actions. In 1977 PERC held a unit determination hearing to determine what employee positions should be considered as managerial and/or confidential. As specified by State law, "managerial employees" are those employees who: 96-- 819 e r Merrett Stierheim -2- November 13, 1996 Perform jobs that are not of a routine, clerical, or ministerial nature and required the exercise of independent judgment in the performance of such jobs and to whom one or more of the following applies: 1. They formulate or assist in formulating policies which are applicable to bargaining unit employees. 2. They may reasonably be required on behalf of the employer to assist in the preparation for the conduct of collective bargaining negotiations. 3. They have a role in the administration of agreements resulting from collective bargaining negotiations. 4. They have a significant role in personnel administration. 5. They have a significant role in employee relations. 6. They are included in the definition of administrative personnel contained in S. 228.041(10). or 7. They have a significant role in the preparation or administration of budgets for any public agency or institution or subdivision thereof. A "confidential employee" is a person who acts in a confidential capacity to assist or aid managerial employees. As a result of a unit determination hearing PERC issued an order in 1978 identifying 282 employees as managerial and/or confidential. It should be understood that in designating a position as managerial/confidential PERC looks at the duties performed by the individual employee and not the classification as a whole. In other words, not all employees in the same classification may be declared as managerial and/or confidential Between 1978 and 1991 and between labor contracts, the Office of Labor Relations reviewed all new classifications established and determined whether the classification as a whole should be designated as managerial/confidential or be placed in the AFSCME bargaining unit. When actual labor negotiations occurred �6- 819 r Merrett Stierheim -3- November 13, 1996 between the City and AFSCME those classifications that had been established between negotiations were reviewed by the parties and as a result of negotiations may or may not have remained as a designated managerial/confidential classification. In November 1991, as a result of labor/management cooperation, the City and AFSCME entered into a Memorandum of Understanding (Attachment A) transferring 186 classifications (275 employees) to the AFSCME bargaining unit (Attachment B). Among classified employees this left the 1 y with 47 managerial/confidential employees (26 classifications) ( ttac men ssentiall i,th no managerial/confidential e below the level of Assistant Director, except for Personnel Since entering into the Memorandum of Understanding as classified classifications have been established they have been placed in the AFSCME bargaining unit. Should the City desire to reestablish managerial and/or confidential employees throughout the City, the City would be required to petition PERC for a unit clarification hearing. In conducting a unit clarification hearing, the City would need to be prepared to present evidence that each employee it desires to be designated as managerial/confidential meets one of the criteria as stated above. This may be presented either through employee affidavits or direct testimony on the part of.the employee. In such hearings it is not uncommon for employees to testify that they do not serve in a managerial/confidential capacity. Given the length of time since a unit clarification has been issued and the number of clarifications that have been established since then, the City should expect a lengthy hearing on this issue. It should be noted that even if the City and AFSCME were to revisit this issue and agree on which classifications are to be designated as managerial/confidential, PERC retains the right to determine the appropriate designation and may or may not take into consideration any agreement between the City and AFSCME. RSW/sw 96- 819', �A ATTACHMENT A MEMORANDUM OF UNDERSTANDING The City of Miami and AFSCME, Local 1907 hereby agree that certain classified managerial/confidential occupations, upon their transfer, will be entitled to the benefits as specified in the AFSCME labor agreement. Those classified occupations to remain as managerial/confidentia.1, are so designated on the attached listing. In the event a PERC filing is required, the parties consent to filing an agreement with PERC in accordance with this Memorandum of Understanding, however, the City of Miami and/or AFSCME, Local 1907 have the right to petition PERC for a unit clarification hearing during negotiations of a subsequent labor agreement. The party seeking a unit clarification before PERC shall bear the burden of proof. The parties further agree that those managerial/confidential employees now considered as part of the AFSCME bargaining unit shall not be entitled to receive benefits that heretofore were exclusive to managerial/confidential employees. Managerial/ confidential employees which are now considered as part of the AFSCME bargaining unit shall be placed at the appropriate pay step of Salary Schedule A as determined by Labor Relations. The placement of the managerial/confidential employees in the AFSCME bargaining unit shall occur during the month of November 1991, however, any employees eligible, as determined by the City, for the newly implemented 20 year longevity increase shall receive such longevity increase retroactive to October 6, 1991. HUI= 819 -`, - ATTACHMENT D MANAGERIAL/CONFIDENTIAL TRANSFER TO AFS CVIE 1991 Position Typist Clerk IV Secretary IV Legal Secretary Legal Services Aide Auditor Staff Auditor Sr. Budget Assistant Debt Services Coordinator Investment Analyst Investment Specialist Finance Manager Benefits Aide. Workers Compensation Claim Specialist Group Benefits Specialist Procurement Supervisor Property and Lease Manager Program Liaison Benefits Aide i Job Code 1023 1028 1035 1042 1124 1126 1140 1145 1150 1152 1153 1154 1155 1157 1215 1230 1235 1302 Position Administrative Aide II Administrative Assistant I Administrative Assistant II Intergovernmental Assistant Personnel Aide Personnel Assistant Personnel Specialist Research Psychologist Personnel and Safety Officer Management Analyst Assistant Safety Coordinator Technical Operations Coordinator Management Analyst Sr. Management Analyst Chief Management Operations Analyst Finance Services Coordinator Resource Coordinator Market Service Coordinator Research and. Development Specialist Procurement Contracts Officer Fiscal Assistant 2 Job Code 1306 1309 1310 1312 1313 1316 1317 1321 1324 1329 1330 1332 1334 1336 1337 1339 1340 1341 1342 1344 1345 r Position Job Code Marketing Supervisor 1350 Business Development Sr. 1352 Business Development Supervisor 1356 Economics Analyst Principal 1359 Training Officer 1365 Staff .Analyst Assistant 1366 Staff .Analyst 1367 Staff Analyst Sr. 1368 Staff Analyst Principal 1369 International Trade Coordinator 1371 Sanitation Services Coordinator 1373 Job Training Supervisor 1377 Sanitation Services Aide 1381 Support Services Coordinator 1382 Productivity Analyst Assistant 1384 Productivity Analyst 1385 Productivity Analyst, Sr. 1386 Productivity Analyst, Principal 1387 Public Relations Specialist 1414 Public Information Officer 1422 Convention Activity Coordinator 1424 3 96- 819 i A Position Job Code Auditorium Manager Assistant 1427 Special Events Coordinator - Conventions 1432 National Sales Manager 1434 Facilities Promotion Agent 1440 Print Shop Assistant Superintendent 1528 Print Shop Superintendent 1529 Productivity Control Supervisor 1537 Systems Engineer II 1541 Computer Operations Supervisor 1557 Programmer Assistant 1560 Systems Programmer 1562 Programmer Jr. 1566 Programmer 1567 Programmer Sr. 1568 Programmer Chief 1569 Computer Operations Chief 1572 Systems Analyst Sr. 1576 Teleprocessing Coordinator 1582 Data Librarian 1584 Scheduler/Expediter 1586 Information Center Specialist 1588 819 4 6 Position Collections/Billing Supervisor Claims Adjustor I Claims Adjustor II i Collections/Subrogation Specialist Engineer I Professional Engineer II Professional Engineer III Professional Engineer IV Landscape Architect Supervisor Project Representative Cable TV Engineer Building Inspector Chief Electrical Inspector Chief Plumbing Inspector Chief Zoning Inspector Chief Mechanical Inspector Chief Codes Com Inspector chief Supervisor Permits and Revenues Chief Code Enforcement Officer Planner II Planner III 5 Job Code 1629 1810 1812 1820 2022 2023 2024 2034 2054 2056 2060 2112 2122 2132 2152 2160 2171 2176 2178 2221 2222 Position Job Code Community Development Coordinator .2224 Housing Specialist Principal 2226 Housing Specialist Sr. 2227 Social Programs Analyst Sr. 2234 Social Programs Analyst Supervisor 2235 Community Development Project Supervisor 2237 Special Funding Services Coordinator 2238 Social Programs Coordinator 2239 Urban ACT Grant Coordinator 2248 Urban Development Coordinator 2252 Project Development Coordinator 2263 Sanitation Supervisor 3022 Waste Collector Superintendent Assistant 3025 Waste Collector Superintendent 3026 Property Maintenance Assistant Superintendent 3370 i Property Maintenance Superintendent 3371 Police Security and Facility Supervisor 3372 Building Maintenance Supervisor 3375 Garage Assistant Superintendent 3420 Assistant Fleet Manager 3452 Fleet Management Specialist 3455 Ci I Position - Job Code Police Property Unit Manager - 5016 Police Property Unit Assistant Manager 5017 Police Property Unit Supervisor 5018 - Police Records Supervisor 5060 - Professional Compliance Assistant 5076 Professional Compliance Representative 5077 Fire Safety Specialist Supervisor 5303 Exercise Physiologist 5312 Paramedic Instructor 5314 Fire Service Instructor 5316 Fire Safety Education Supervisor 5318 Video Program Producer 5323 Fire Protection Engineer 5326 Communications Maintenance Assistant Supt. 5407 Communications Technical Superintendent 5408 Telecommunications Systems Development Mgr. 5420 Clerk I M/C 1010 Clerk II M/C 1011 Clerk III WC 5706 Clerk IV M/C 5708 Typist Clerk I M/C 5710 x 9 819 r Position Typist Clerk II M/C Typist Clerk III M/C Secretary I M/C Secretary II M/C Secretary III MIC Account Clerk MIC Accountant M/C Accountant Sr. M/C Administrative Aide M/C Switchboard Operator MIC Civil Engineer II M/C Civil Engineer III M/C Beach Operations supervisor Parks Tech Services Supervisor M/C Parks Tech Services Supervisor E&S Parks Operations Coordinator Parks Superintendent Officer Operations, Assistant Chief Chief of Operations, Parks Assistant Stadiums Adm Marine Stadium Manager 8 Job Code 1021 1022 5715 1026 1027 1110 1119 1120 1305 1505 5733 5734 6029 6047 6048 6049 6050 6051 6053 6059 6062 0 Position Auditorium Manager Marina Operation Supervisor Marinas Assistant Marinas Facility Manager Cultural Affairs Coordinator Superintendent of Recreation Golf Course Superintendent Assistant Superintendent of Golf Liaison Specialist Youth Program Specialist Recreation Assistant Superintendent Events Supervisor Day Care Administrator Day Care Administrator Assistant Medical Assistant Head Nurse Jobs Training Program Coordinator Citizen Program Supervisor Citizen Part Supervisor Sanitation Inspector II Sanitation Inspector Chief L" Job Code - 6065 6066 6069 6071 6119 6126 6132 6133 6141 6156 6162 6172 6300 6301 7004 7006 7017 7019 7023 7031 7032 M ..= N1 s ATTACHMENT C SUPPORT STAFF OCCUPATIONS 1036 Senior Legal Secretary 1125 Staff Auditor 1126 Senior Staff Auditor 1127 Principal Staff Auditor 1128 Assistant Auditor 1159 Group Benefits Supervisor 1160 insurance Coordinator 1311 Administrative Assistant III 1318 Personnel Officer 1320 Senior Personnel officer 1322 Personnel Supervisor 1325 Assistant Personnel Administrator 1326 Validation Supervisor 1328 Classification & Compensation Supervisor 1335 Principal Management Analyst 1338 Management Analyst Supervisor 1368 Senior Staff Analyst (Mimi Turin Only) 1570 Systems Software Manager 1573 Data Base Manager 1577 Project Analyst 1587 Information Center Manager 1816 Claims Adjuster III 1822 Assistant Claims. Super -visor 1824 Claims Supervisor 6726 Accountant Supervisor (Angel De Pedro Only) 7009 Nurse Advisor 819 0 MANAGEMENT REVIEWS AND TASK FORCE STUDY AREAS TASK ASSIGNED TO DELIVERABLES Financial/Audit Controls Rachel Baum, Matto Dade - Recommend organizational structure for City's financial operations - - Corinne Brady, Metro Dade - Develop of recommended internal control systems Sol Stamm, FPL Michael Rey, American Bankers - Assess internal controls and integrity of new Victor Monzon, Lonzo Construction Co. Dolores, McRae, City of Miami automated financial systems - Draft audit plan for Internal Audit Department for FY 1996.97 Steve Margolis, City of Miami - Recommend organization, mission, goals and objectives for Internal Audit Department - Special Assignment - Purchasing Mike Lavin, Staff Liaison Review IV, Monzon) Pension Programs Review Bob Nachiinger, Miami Beach City Actuary - - Identify funding options for administrative costs City Attorney - Evaluate Feasibility merging of 9 9 Pension programs (pros, cons, any benefits?) - Valuation alternatives Outside Counsel Christina Cuervo, City of Miami -Quantification and feasibility of any other alternatives to reduce City - Without impacting employee benefits pension costs Plan Administrators Sue Weller, Staff Liaison - With impacts to future employees only - With impacts to all employees Fleet Management Bob Schomber, FPL Mark Glaiber, Metro Dade - Assess City fleet maintenance, fueling and replacement programs and policies - Formulate recommended organizational Olga Diaz, Metro Dade policy and funding system to properly manage fleet - Evaluate fleet size and formulate recommendations Daniel Coughlin, Metro Dade for proper fie - Pool, -B hour and 24 hour assignments et size and composition Jane Kamp, Metro Dade Dexter Groose, Value Search - Develop policy on appropriate vehicle use fee and car allowance, if any Chief Carlos Gimenez, City of Miami - Identify excess vehicles, if any, that can be auctioned and estimate sale reciepts Art Fernandez, City of Miami Lt. Andrew Vera, Staff Liaison Health Insurance Bill Walsh, University of Miami - Evaluate current programs and recommend Ron Stone, Private Insurance Company opportunities for reform and savings to the City - Assess feasibility and benefits of consolidating all Angela Bellamy, City of Miami employees into one City health insurance program Sue Weller, City of Miami Nancy Fernandez, City of Miami Frank Rollason, Staff Liaison Self Insurance Programs Wayne Johnson, Ryder Gail Krinsky, Ryder - Identify and place a cost (eg, personnel costs) on reforms, policy recommendations and new David Hopps, Ryder programs to reduce risk exposure (worker's comp. and auto, general & public officials liabirrty! - Identity alternatives and implementation steps to begin Bart Douglas, Ryder funding a portion of the City's unfunded liabilities in self insurance programs Anne Marie LaMoine, Bell South fly Actuary CT.1 City Attorney - j Frank Rollason, Staff Liaison Debt Restructure Dick Montaibano, William R.Hou h g Gerry Hefferman, County Attorney - Evaluate opportunities to restructure all outstanding City debt to effect annual debt service savi ngs Orlando Cruz, First Union Bank Howard Whitaker, Greenberg Trourig Pete Chircut, Staff Liaison - 11/13/96 DATE DUE 11/1196 11l1196 1111196 1111196 1111/96 MANAGEMENT REVIEWS AND TASK FORCE STUDY AREAS 11/13/96 '- TASK ASSIGNED TO DELIVERABLES DATE DUE " j-^ nanciellRudgetary Analysis Art Haggen, American Bankers - Analyze all City operating funds and assess extent of deficits In non -general fund accounts 11/1/96 o� Orlando Cruz, First Union - Evaluate FY 1996-97 operating budget and all revenue and expenditure assumptions - Rachel Baum, Metro Dade - Identify, to the extent possible, value of deficits in restricted use funds which require repayment " Dipsk Parekh, City of Miami - Formulate recommendation to expand revenue collection programs for derinquent accounts Pete Chircut, City of Miami - Identify areas of and extent of commingling and misuse of funds " Phil Luney, City of Miami Acting Asst. City Managers Mike" Lavin, Staff Liaison Strategic Financial Recovery Plan Glen Cardwell, U of M - Formulate five-year strategic recovery plan 11/1196 (on hold) Bob Nachlinger, Miami Beach Leon Zucker, JMH Finance (Retired) Dr. Milani Dluhy, FIU Dr. Howard Frank, FIU " Dr. Antonio Jorge, FIU City Manager Acting Asst. City Managers Mike Lavin, Staff Liaison Capital improvement Plan Review Jose Rodriguez, Peat Marwick - Thoroughly evaluate City's Capital Improvement Program and validate extent of shortfall; 11/1/96 Lynn Hambright, Price Waterhouse - recommend deferrals, project phasing and funding/budgeting strategies to reduce deficit Grant Sheehan, City of Miami Pete Chircut, City of Miami " Dipsk Parekh, Staff Liaison Labor Relations City Manager - Prepare labor negotiation strategies Ongoing Acting Asst. City Managers • Cost out labor contracts and alternative proposals City Attorney - Evaluate benefit packages for all employees - unionized and non -unionized Jim Crosland, Outside Council - Develop alternative Drop Program strategies Dean Mieike, Retired - Evaluate multi -tier hiring and compensation programs Angela Bellamy, City of Miami Frank Rollason, City of Miami Sue Welter, Staff Liaison Opportunities Task Force Joe Fletcher, Klmiey-Horn - Evaluate feasibility and savings to City of all viable privatization and service transfer proposals 11 /1196 Geoff Swan, Post Buckley - Evaluate all current City revenue facility operations, leases and asset management policies Thomas Bradley, Arthur Anderson - Identify all opportunities for revenue enhancement and/or cost reduction and quantify potential Joe Ruiz, Metro Dade additional revenue John Vodenicker. Ernst and Young - Present pros and cons of all such initiatives and steps required to increase revenue or reduce costs Acting Asst. City Managers for alternative development Eduardo Rodriguez, City of Miami Christina Cuervo, City of Miami Jack Luft; City of Miami - " Cristina Abrams, Staff Liaison " _ _ .. " .. _..__.__.,_ -_ �.__...•..:__...., ,____ ...-......,r.-:.........rr. e...J ..mL.ne rn rnrn:,n 4,:nric - MANAGEMENT REVIEWS AND TASK FORCE STUDY AREAS TASK ASSIGNED TO DELIVERABLES Parks and Recreation Larry Adams, FPL (retired) - Provide operations review and recommendations to improve City Parks and Recreation Department Gorman Daniels, DCYF Bud Hunter, FPL (retired) Ramon Ferrer, FPL - Ray Galiardo, Retired Terry Griffin, City of Miami - Albert Ruder, Staff Liaison Funding Solutions Analysis Acting Asst. City Managers - Evaluate all departmental responses to 76 initiatives and validate savings & revenue estimates (from 1011196 Commission Workshop) Finance Department - Recommend those items appropriate for City Commission action Evaluation of Savings Plans Acting Asst. City Managers - Evaluate all plans submitted by depts. and validate savings & revenue estimates _ Finance Department - Recommend those appropriate for City Commission action Deficit Reduction Thermometer Acting Asst. City Managers - Track all approved and instituted savingstrevenue measures relative to current projected deficit MRC Command Center Task Force Coordination Bill Hampton - Coordinate efforts of and provide technical support to all Task Forces Judy Cannon Georgia Ruiz COD 11/13/96 DATE DUE 11 /1196 1111196 Ongoing OngoingOngoing COMPANY AMERICAN BANKERS ARTHUR ANDERSEN ILP BELL SOUTH CANNON SYIERHEIM Productivity Mgmt. Teamwork 1 Vh JUDICIAL CIRCUIT STATE OF FLORIDA CITY OF MIAMI REACH COMPREHENSIVE COMP DADE COUNTY YOUTH FAIR DEAN MIELKE ERNST & YOUNG FIRST UNION NATIONAL BANK November 4,1996 LOANED-EXECUTNE INITIATIVE LOANED EXECUTIVE AREA OF EXPERTISE Larry Adams FP&L/Retired Ray Gallardo Retired Leon Zucker JMH, VP FfnancetRetired Art Heggen, Chief Accountant Accounting, Finance Michael Rey, Exec. Vice President Systems, Finance, Management Thomas Bradley, Partner Accounting, Finance, Government Operations Anne Marie LaMoine Worker's Compensation Attorney Judy Cannon Productivity Management Georgia Ruiz Productivity Management Bill Hampton, Deputy Court General Government Administrator Adm* inistration, Budgeting Bob Nachlinger, Finance Director Finance, Pension Systems Ronald G. Stone Gorman Daniels Dean Mielke Collective Bargaining Consultant John Vodenicker Orlando Cruz, Jr. Health Insurance Parks and Recreation Collective Bargaining, Labor Relations Gove*mment Enterprise Financeffiond ij LOANED EXECtffIVE lNfflAUVE FLORIDA INTERNATIONAL Dr. Milarn Diluhy Public Administration UNIVERSITY Dr. Howard Frank Public Administration Dr. Antonio Jorge Economics & Int'l Relations FLORIDA POWER & LIGHT Ramon Ferrer, Mgr. Major Accounts -Dade County Sol Stamm, Mgr., Auditing Bob Schomber, Fleet Reg. Mgr GREENBERG TRAURIG Howard Whitaker GRIMM, VINCE Vince Grimm Former Miami City Engineer KfMLEY-HORN Joseph Fletcher, Regional VP KPMG PEAT MARWICK Jose Rodriguez, Partner LANDZO CONSTRUCTION CO. Victor Monzon LELAND HUNTER MGMT. Leland Hunter LOCKHEED MARTIN Roger Carlton METRO DADE COUNTY George Burgess, Dept. Budget Dir Michael Wilkinson 2 Electrical Engineer, Customer Service, Economic Forecasting (Schedule through Ramon Ferrer) Fleet Management (Schedule through Don Ashton, Dir. Fleet Management) Municipal Finance Lawyer Engineering Engineering, Transportation, Gen. Government, Construction, Purchasing, Central Services Finance & Related Areas Purchasing - Special Assignment Management Process Government Administration/ M,gmt., Finance & Budgeting Gen. Gov't Admin., Budget & Finance, Mgmt. Analysis LOANED EXECUTIVE INJTIAII�VT METRO DAVE COUNTY (CONrF) Kevin Lynskey Cathy Jackson, Deputy Dir., Audit Audit & Management & Mgmt. Joe Ruiz, Assist. Solid Waste Rachael Baum, Dept. Finance Dir. Solid Waste Corinne Brody, Dir. of Mgmt. Finance Organizational Review/mgmt. Consulting Division, Audit & Tony Crapp, Dir. Community & Mgmt. Department U.S. HUD Programs Economic Development Mark Glaiber Olga Diaz Fleet Management Daniel Coughlin Jane Kamp Gerald Heffernan, Asst. County Attorney Bond Counsel/County Attorney's office POSTAUCKLEY, SHUH & JERNIGAN PRICE WATERHOUSE LLP RYDER SYSTEMS, INC UNIVERSITY OF MIAMI Geoff Swan Lynn Hambright Gail Krinsky David Hopps Wayne Johnson Bart Dod las Glen Cardwell Asst. VP Budgeting Dr. Linda Neider Bill Walsh 3 Finance Corporate Finance, Recovery and Dispute (Forensic Reviews & Analyses)- Limited to as requested, as needed basis Worker's Compensation Risk Management Business & Finance Chairman - Management Dept. Director of Employee Benefits LOANED EXECUTIVE INITIATIVE VALUE SEARCH, INC. Dexter Groose Industrial Eng./Life Cycle Costing Performance/Productivity Analysis WILLIAM It. HOUGH, Dick- Montalbano finance & CO. 0 4 li i 9 - 819 MEMORANDUM - TO: Merrett R. Stierheim City Manager FROM: Rachel Baum Chai erson Financial & Audit Controls Task Force Executive Summary Background DATE: . November 7, 1996 SUBJECT: Task Force Report The Financial & Audit Controls Task Force was requested to review the finance and audit organization and in general the financial and audit processes and controls in place at the City of Miami. Task Force members consisted of Rachel Baum and Corinne Brody from Metro -Dade, Michael Ray from American Bankers Insurance Group and Sol Stamm from Florida Power & Light Co. Also participating on the team from the City ofMiami staff were: Michael Lavin, Dolores McRae and Steve Margolis. The Task Force conducted its review by interviewing City staff from the Finance Department and the Department of Internal Audit & Reviews (Internal Audit) and reviewing relevant documentation. This report contains not only what we believe are the critical issues facing the City, but also suggestions for interim and long term solutions, recognizing the financial realities and prioritization of corrective actions. The report is organized by department (i.e. Finance, Auditing) and then by division within department, but first some overall critical success factors. Critical Success Factors In conducting our interviews it was clear that City staff want desperately to do a good job but lack several critical tools to make it happen. They are summarized as follows: • Governance, Goals and Objectives, and Accountability: Overall there has been a lack of direction from the top which has caused misaligned and -poorly defined functions. As a direct result, the City has departments and divisions with no clear cut goals and objectives and no measurement tools to monitor their performance. Thus no accountability. Realignment of some functions should take place to provide focus. More importantly, staff must be held accountable and departmental objectives and metrics to measure the agreed upon objectives must be established. • PersonneI practices: Two factors have contributed to the City's lack of professionally trained staff. The first is the ability to substitute "business related experience" for professional credentials, and the other factor is the hiring freeze. There is a tremendous need for technically qualified individuals ( Accountants, CPA's) within the Finance and Internal Audit Department in order to perform necessary analytical reviews that are not being done today. Further, the hiring freeze has caused an inability to go out and get needed resources which has exacerbated the situation. The City should selectively review and waive the hiring freeze for positions where it is demonstrated that a need for outside recruitment exists. A reevaluation of job descriptions should be performed and qualifications which allow the substitution of "equivalent combination J��- 819 of training and experience" for professional credentials should be deleted from professional level positions, Further, the City should conduct a comprehensive review of its personnel practices. • Information Technology: The focus of Information technology is to provide the tools and information necessary to make good business decisions today and in the future. The team suggests that an information systems steering committee be set up to help focus the work being done today as well as to provide direction for the future. The committee should be chaired by an Assistant City Manager and each department should be represented to ensure "buy in" at the department level, in order to initiate change. Several other critical success factors exist that are specific to departments or sections and are contained below: • Audit focus and oversight: Internal Audit's focus needs to shift to that of business risks. While some revenue audits should continue to be performed, a change in focus to controlling business risk, including systems, will help the City to understand and improve its processes, which is a prerequisite for improvement. • Oversight of the Internal Audit is currently not performed by the Audit Advisory Committee. The team believes that the Committee should be set up similar to the private sector and other governmental jurisdictions and tasked with the responsibility for reviewing the work of the Internal Audit department. The Committee should be made up of individuals from the business community and not be limited to only C.P.A.'s. In addition, the Committee should have at least one City Commissioner as a member of the Committee to ensure that the understanding of the fiduciary responsibilities of elected officials is strengthened. • Budget Process: The budget process is fragmented and incomplete. Currently the City's budget process is carried out within the Budget division and within the Public Works Department. Limited monitoring of departmental budgets is done. A business. planning cycle should be implemented which should include a business plan,, capital budget and operating budget. It should be prepared by each department under guidelines set forth by the Budget division and should be reviewed by the City Manager in part and in total. Departments should then be charged with the responsibility of reviewing actual vs. budget, explaining differences and forecasting both operating and capital to year end. Procurement oversight: The procurement controls at the City are focused in the wrong area, low dollar, high volume items. Too much time and money is spent on controlling these items which in turn slows down City workers responsiveness in getting things done. Conversely, not enough oversight is present in service related purchases, which has led to high dollar service contracts awarded without a competitive bidding process being used, as well as contracts awarded without budget dollars available to cover the procurement. 96- 819 2 S.r Finance Department Review The Finance Department (Attachment I) consists of the following divisions: Accounting, Treasury, Procurement, Budget, Information Technology and Group Benefits. The following are more detailed observations: Accounting Division The primary responsibilities of the Accounting Division are to issue checks to City vendors (Disbursement function), pay City employees (Payroll function) including all taxation issues, maintain the accounting system and coordinate the annual audit which culminates in the completion, of the City's comprehensive financial accounting report. There appears to be a lack of technically qualified staff in some critical areas of the division. Vacant positions are not filled for the fear that unqualified staff will be placed into technical positions due to the "hiring from within" policy. A senior accountant has been assigned to Union activities while being charged to Accounting and occupying a position. As a result, some accounting functions, such as reconciliations, are behind. The Accounting Division should adopt formal closing procedures whereby payrolls are posted immediately after the payperiod, monthly and year end closing take place on a speedier bases and high level accounting reports are distributed to the appropriate management level personnel. Payroll Process Police and Fire departments enter their time and attendance information into a time and attendance system which is uploaded to the payroll module. Other departments time and attendance is recorded by Finance. Two departments, Solid Waste and GSA purchased an automated time and attendance record keeping system called KRONOS which utilizes swipe technology. As noted in the IT section of this report, decisions to automate should be done systematically in conjunction with the IT division which can assist with the preparation of a business case identifying costs and benefits. A total solution for the City vs. a point solution for departments should be developed based on a determination of Citywide requirements. If it is determined that swipe technology for time and attendance is the preferred method, a plan -should be developed to bring all departments on the system. Changes such as swipe technology may enable the City to run the payroll a day earlier, and thereby meet their obligation to pay all City workers on pay day, including those on direct deposit. Currently, some City employees who participate in direct deposit for their payroll and do not bank with the City's bank are paid on Monday, the next day after pay day. Budget Management Division The mission of the Budget -Management Division is to prepare the operating budget of the City and to monitor departmental expenditure levels. Typically, the Budget Office is staff to the City Manager's office. There are five Budget Analysts with three temporary City employees who are responsible for monitoring the budgets of the various City departments. Other functions that are currently in the Budget 3 :+ 96- 819 0- Office include a Task Force unit responsible for additional revenue generation and a grant writing unit. These functions could remain in the Budget division or, over time, be redirected to other departments. The Task Force unit is charged with the responsibility of generating additional revenue through the issuance of parking tickets, enforcing scofflaw, renewal of certificate of use, etc. Placement for these positions within the NET Offices should be investigated as an option. Positions may be outstationed to NET Offices based on enforcement volume data and employees cross trained with existing NET staff. There are 17 temporary City employees performing this task. We recognize that the existing function is a revenue generator for the City, however, this function is not within the traditional responsibilities of the Budget Office and as such dilutes the main focus of the office. The Capital Improvement Program (CIP) is administered by the Public Works Department. In some cases contracts go to the Commission with no identified funding or with statements that "Funds will be identified". This practice should stop and future contracts should have funding codes identified and approved by the Budget Office prior to award. Grants Process Currently the Budget Office has two positions that are primarily focused on grant writing. Departments also write grants in conjunction with the Budget Office, as well as independently. Recently the Budget Office has attempted to assume the grants coordination role for the City in order to ensure that the City aggressively pursue grants in a coordinated and non conflicting manner for the benefit of the entire City. Grant administration and grant reimbursement processing is also not uniform throughout the City. During the interim, grant coordination should be strengthened. Communication of the establishment of a central coordination point for grant writing and availability needs to be well know to all departments. Grant writing should to be performed in a partnership with individual departments which possess the intimate knowledge of the subject area and will ultimately administer the grant. The Budget Office may provide the technical assistance in selected areas of grant writing. The reimbursement process should also be the responsibility of the administrating department. Over time the City may wish to investigate removing the grant function from the budget office . Procurement Management Division The Procurement Division is part of the Finance Department. In some organizations, procurement is part of General Services Administration function. There is a close interaction between procurement and the financial process, and we therefore believe that it is not necessary to change the organization at this time. However, oversight and related policies should be strengthened. In addition to being responsible for Procurement and Minority Business Development, the Director is also the Equal Employment Officer (EEO) for the City and in that capacity, the Director reports to the City Manager. There should be a more in depth evaluation to determine if these multiple assignment are beneficial to the City. During our review we noted that personal and professional services under $ 50,000 are excluded from competitive negotiation requirements, although formal competitive bids are required for commodity purchasing in excess of $ 4,500. Further, a formal Request for Proposal process is not mandated for ��- 819 4 purchase of services over $ 50,000, only evidence of interviews with three individuals or firms. These practices should be reevaluated to ensure a competitive process occurs when procuring large dollar services. In addition all contracting should flow through the Procurement Office. The controls over the use of "direct" purchases should be vigorously enforced to make sure that purchasing procedures are not bypassed. Direct purchases should only be used for such purchasing as utility payments, subscriptions, memberships, where there is no competitive process to obtain these services. A formal training program needs to be adopted. Further, the division is sometimes forced to hire unqualified staff since" hiring from within" is encouraged. This appears to be a problem in many areas, as noted previously. Information Technology Division (IT) Information Technology has a budget of $ 3.7 million and 39 positions. The number of positions has been reduced from a high of 62 to the current level of 39. The division has operated with limited resources. As the City migrates to the distributed (PC/Network) environment, costs will escalate, and the current budget may not be adequate to maintain support of the existing applications. It is recommended that IT should report to the City Manager's Office and not to Finance. If this is not i achievable. due to budgetary constraints, at a minimum the City Manager should establish a technology Steering Committee chaired by an Assistant City Manager. The Division should redefine its mission in light of the trends in technology development. A Steering Committee should be established with representatives of department heads of the major user departments. The Steering Committee should establish technology priorities and strategies to accomplish cost savings through sharing of applications. In addition business cases should be presented to the committee documenting costs and benefits prior to undertaking major system development. These cases should be ranked and than worked based on priority and staff availability. Other comments relating to IT are as follows: Security: IT must govern security issues and these should not be overridden by departments. Security will become more critical as the City expands its network environment. • It is estimated that of the City's systems, 60 % are year 2000 compliant. A plan will need to be devised and funded to complete this critical task. A comprehensive disaster recovery plan should be developed that addresses the PC networks as well as the mainframe. • Backup procedures should be developed for the PC systems. • Funding will need to be identified and reserves will need to be built up to finish the network infrastructure for the Police and Fire departments and to replace PC's which have a limited life span (3 to 4 years). 5 96- 819 e. Positions will need to be created and funded which will bring to the City the appropriately skilled staff to maintain the City in today's technology environment. A formal training program should be adopted especially for project management and structured methodologies to maintain technical levels of competency. A formal tracking mechanism should be developed to create measurability of performance for the IT department. Review of backlog and a determination of criticality of needs. Backloged projects should be reviewed for need by the Steering Committee on an annual bases. Department of Internal Audit & Reviews The Department of Internal Audits and Reviews is composed of two divisions; Internal Audit and the Office of Professional Compliance (Attachment II). The fiscal 1996-97 budget is $1,026,496. Internal Audit The Internal Audit function is staffed with a Chief Internal Auditor, three Principal Auditors, a Senior Systems Analyst, a Senior Auditor and two Administrative Aides. The City Code establishes an Audit Advisory Committee ("Audit Committee") composed of five members appointed by the City Commission. The City should expeditiously hire a Director of Internal Audit with a C.P.A., C.I.A. or C.I.S.A. and a strong background in audit. The Audit function should have dual reporting to the City Manager and to the Audit Advisory Committee. The appointed Director should focus on the department's organization and reporting, the development of the audit plan and the implementation of the recommendations outlined below. 96- 819 The audit plan is currently prepared based on a questionnaire distributed to departments which requests an inventory of all contracts and also asks departments to identify audits which they would like performed. The audit plan should be developed in conjunction with the City Manager and department heads and should be revised to incorporate a risk based approach focusing on internal controls and business risks. The plan should include a greater complement of performance audits. These performance audits should be directed at business controls for both processes and systems. It should be recognized that performance audits may require a team staffing approach and will be of a longer duration. Given the limited staffing within the Department, these audits should be targeted to areas where they will have the greatest impact. In addition, the audit plan should be reviewed by the Audit Committee to ensure it is balanced. The audit plan should be realistic in terms of scheduled audits and special project requests. Given the recent move towards greater automation and distributed networks at the City, the audit plan should also provide for a sufficient review of systems security, (including data, back up and networks). As time permits, Systems Development Life Cycle reviews for critical applications C. such as the impl7mentation of the SCI Financial System should be conducted. Audit review should also be provided to the YEAR 2000 systems conversion effort to assure that all critical applications are compliant. • The skill set of audit staff should be broadened in order to meet the requirements of the Charter and fulfill the role of an Internal Auditor. Audit staff should receive the appropriate level of training through a complement of in-house and external courses, Staff persons with C.P.A. licenses should be required to meet CPE requirements. It should be noted that no funds were budgeted for fiscal 1996-97 to provide for training. In the future the budget should provide sufficient resources to cover a specified level of training which could be supplemented by courses attended on an individual basis. • Audit reports should be delivered to the City Manager as well as to the Auditee. A summary of the audit results as well as the audit responses should be prepared quarterly and presented to the Audit Committee and the City Commission, Audit staff work should focus on auditing. Any time spent on non -audit functions should be reviewed. For example, staff currently summarizes ad valorem tax receipts from Dade County. This function would more appropriately be handled by the Finance Department. • Audit staff positions should be filled with individuals possessing finance, accounting, audit, EDP and business backgrounds. Not all staff currently within the department possess the appropriate background. • Job descriptions should be rewritten to reflect the correct roles and responsibilities of the staff as well as requisite college degrees and experience in audit, accounting, finance, general business and/or EDP. A review of job descriptions indicates: ...Responsibilities are not current and include roles related to Equal Employment, which previously was organized under audit. .'.Responsibilities delineated are not appropriate for the audit function, including preparation and administration of budgets for various City departments and assistance in the conduct of collective bargaining negotiations ...Training and experience may substitute for a college degree, which is not appropriate for professional positions. • The City code requires significant revision to bring about the recommendations outlined including pw a basic re -write to exclude functions which do not currently reside in the Audit Department, such as Affirmative Action. Audit staff dispersed in other departments should be identified and centralized within the department, as appropriate. 7 96- 819 r Audit AdvisoU Committee • The Audit Committee is currently composed of 5 members, - each appointed by a City Commissioner and possessing a background in accounting, law, banking or business management. Each member is required to be a controller or chief financial officer, a commercial investment banker or a practicing C.P.A. The current Audit Committee is composed of practicing C.PA.s. The City Charter should more specifically delineate Audit Committee composition in order to provide representation from varied business backgrounds. This can be accomplished by specifying that each Committee slot have a particular background (i.e. one member who is a CFO of a large organization , one member who is an internal auditor in a large organization, etc.). Ordinance revisions will be required to adjust the City Code in order to accomplish this. • The Audit Committee should be expanded to include a City Commission member as a non -voting member. This member will also serve as a liaison to the City Commission when audit issues are presented. • The Director of Internal Audit should be an integral participant in Audit Committee meetings. Past Audit Committee notes do not reflect significant participation. The Internal Audit Director should present the audit plan, as well as audit report findings and recommendations during the meetings. In addition the Committee should monitor corrective actions from auditees. City Code stipulates, and prior meeting notes confirm, that the Audit Committee serve an active role in issuing the RFP for external auditors, reviewing the Manager's selection of external auditors, reviewing the progress of work as well as audit results and management letter comments.. The City Code also stipulates that the Committee review internal controls, compliance with Municipal Finance Officers' Association(MFOA) guidelines and audit reports where it is felt by the auditor that fraud or criminal conduct may be involved. The role of the Audit Committee should be expanded and clarified to ensure review of both external and internal audit results. Meetings should be conducted quarterly, at a minimum, and be structured to ensure that the Audit Committee performs effectively. • The Audit Committee should provide a quarterly report to the City Commission. The City Commission should be educated on their role in reviewing results audit results and interacting with the Audit Committee. Ofiice of Professional Comliance 96- 819 The Office of Professional Compliance, which focuses on investigations and independent reviews ofPolice Department actions as they relate to civilians, should be removed from the department. Staff performing this function report to the Internal Audit Director and are currently located at the Police Department. Consideration should be given to incorporating this function within the Police Department organization, reporting directly to the Police Chief. Typically this unit would oversee the investigation of alleged or suspected misconduct and conduct ongoing inspections. In addition, a review of other local jurisdictions of similar size should be conducted to determine, if there is a need for a separate review function, how it is typically organized. N. f The Financial & Audit Controls Task Force Members would like to thank City staff for their patience, and cooperation during the review process. They were open and honest, and responded to our numerous requests during trying times. cc: Corrine Brody Michael Ray Sol Stamm 9 9�_ 819 AT'I:AC�A`'1IIV'� T ' DEPARTMENT OF FINANCE FV97 FUNCTIONAL TABLE OF ORGANIZATION $9,382,589 AD pamnew sla+s Aw.CIIT1/Almm t AIMAW.1 ACCOUN M t2.37MU GIOR7ALI19l>m A ST. CUMC^ITIII 1 ii i0t�[TAfTr 1 AaWtA MAW i ACOO A WT i XCUT. Q M 2 I/f.11r.OKLA7Ift 1 ,TA/fA7GLTtTt0. 1 AM=AMI I cxm a 1 If PAY AI%Tm= MTA8iA1t2 S= rAT1mLRYLUWAMANUL1 Ii D=A000Wr TR 1 AOOW"Aff 1 AC2b1Di CUM i u CD�OiOL1If r 2'lOiOJAIO ADImetIDATrotACOZWCLM AOCDIATt7Tt. i Al11C cum 1 TRZASURT MAKAMMUM W7.2n c"Enow mam rater el2artaTlcsaoota 1 ACCWAITCLM ADICD:A10tI t OSAI I 1 i CoLzz1Ki t>OC>OrAtCt CoLLW"mlt=r CCO mvt AOCO1 ltNTAl1T ! At»mcAtOcc 1 Wt@LQ%lrw L 1 A4T.T7VIMrcum : C AR=a 2 14 BUDGET MANAGEMENT SMUT" DOVIAVOWWwaroam AND rsoAt;1.TD1t WDfi= AYAt.TR�1T1. 1 ..Orm.AMTW I ADIIMAWr.m 2 AccouxTwm @l,T TA>miLYR 1 CAft90M AWr 1 remcTffim ! AMM AMC t ti tI2:=AWrwrttaer TA21'.I0C=FVL 1 LLwMAD".■ 1 PROCUREMENT KAXAMMEff t!=us reacumcmgNt WL 1 qC!SLMMNW- ADWLAmca I ADWMA(WLI 1 MISICUMCM e.... rvst,Am rwmspzc A w 2 ACOOMAW. 1 rtOGTAtIDATAiT. 1 Trnr o=m 1 i /TlOtm1 !@UItt1TAFrAMS AMMAtDC 1 1 SURFIAM DmnaAt i tT09clarm I 1 ORCm11Oti OOIITiOL ACL'WNtA.\T I DOORMATION TECHNOLAW SVS9=6 olua .norraA3wm om&uTnomctOQ 1 SCHIMMnAmmcom DATA IA RMUM 1 O iTsyna AM rtOiL'CT ANALTfT ! SLUMMrAP"TV i R r110QAMM i AE6mf.AmT.4 1 rNMAJAM i tTArr A.V&Wr 1 rwQA16�AL 1 r A10�AWE t L srsnas DATALUC UM 1 iTf7271gwm mm 1 Ia7T10ti[mm 1 iTmwa rtO0A66= 2 rROGLAMM 1 MDCiMOmAMr. t t GROUP BENEFITSO OwI.TDSADWx I CtDU MoM 1 rocALAwr. 1 TawcLux 1 i 'SEE SELF INSURANCE TRUST FUND FOR DATA ON FUNDING. f ATTACT II DEPARTMENT OF INTERNAL AUDITS AND REVIEWS FY'97I FUNCTIONAL TABLE OF ORGANIZATION $19026,496 ADAHNISTRATION $207,277 DIRECTOR 1 SECRETARYIV 1 .. 2 . i INTERNAL AUDIT $601,765 HEF INTERNAL AUDITOR 1 7AFF AUDITOR PRINCIPAL 3 GAFF AUDITOR SR. 1 MAIN. AIDE I 2 (STEMS ANALYST SR 1 8 PROFESSIONAL COMPLIANCE $217,45.4 PROF. COMPLIANCE COORD. 1 SECRETARY III 1 PROF. COMPLIANCE REP. 1 3 L 96- 819 NOV-09-SG 17.22 FROM- MIF' BEACH FINANCE CITY OF MIAMI ID. 305+673+7795 AA FACE O E ^ C H CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 3$139 1 10INANa9 DINECTON merroit •Stiethelm, flora "er City of Nowd 35M Pan Amerim skive hfiamL FL 33133 r Re: Pension Systems Review Comatose 1)calr h�err+Ctt:' ' ••'�1 1°..� CITY HALL 110 CONVENTION CENTER DRIVE TtL 'RPHONE: Ini4Ed November 6,1996 The Pension Systems Review Conhnhittee has met with both the General Employees and Sanitation Etaploym Pension Board (GESE) and the Fire Fighters and Police Officers; Retirement Trust (FW) in an effort to provide current od ongoing fiscal relief from a portion of the present funding costs of the City's pension systems. These meetings occurred on November 1 ailed November 4 respectively. The results of these nwetings ware that the GESE Board has agreed to consider reducing the salary increase assumption fiam 6 % % to 6% and to increase the rate of return Umotion from go/@ to 8.1% and to amend the September 30,1995 Actuarial Report which would affect the'extlrw ye=required funding. Should the GESE Hoard move these changes the fhscal 'impact Would be approximately $1,500,000 amuall,y. If the FW0 Board approves the proposed changes the annual savings to the City will appmimatc $ 5,400,000. This $6,900,000 in savings would we = to the fiscal 1996J97 year and continue as annual savings into the future. I would MW to take this o Vmft sty to C]Ptss "easUM in WoAdng with the City Staff on We CM101ttce who were cxtmmdy helpful and responsive to the requests for information and asss'lstauscc in this effort. Additionally, I would Me to c omple wt. the two pension boards for their willingness to do their pact to solve the cwavd fxd crisis ofthe City. As an item for fortune cCaaasidesatioatq the City may wish to investigaste the possibility of issuing Pa nim ObUgation Boaads (actually placing the ptocxeds in the pension fund) to eliminate the unftauled liability in the GESE Plash. This bond issue would be issued on a taxable basis and if issued at alh tower inkrest cad than the coat of the hoe est i *'an the unfmuied liability would annually save the me differ=6c,on $I45 million over thcn*.tw"-nine years. K iNwimming ; Chairash>rrt , 96 - 819 r 0 FPL November 1, 1996 City Manager Merrett Stierheim City of Miami 3500 Pan American Drive Miami, FL 33133 Dear Merrett: Florida Power & Light Company, P. 0. Box 029100, Miami, FL 33102-9100 Attached is the report of the Fleet Management Task Force as requested in your October 16, 1996 letter to Task Force Leaders. In submitting this report I feel compelled to make the following important observations: 1. While the task force was dismayed to observe the impact of the city's financial crisis on the condition of the fleet and resources to manage and maintain it, we were singularly impressed with the dedication and commitment of the city employees who are struggling on a daily basis with an extremely difficult situation. Specifically, we found Lt. Andrew Vera from the Police Department, Assistant Chief Maurice Kemp from the Fire Department, and Aristides Fernandez, Deputy Director of the General Services Administration, totally committed to performing their jobs and improving the management of the fleet in spite of limited staff, systems and resources. 2. The Task Force was hampered by the minimal availability of city cost and management information pertaining to the fleet. Consequently the recommendations are based on interviews with city staff, observations made when we visited city facilities, and the fleet expertise and experience of members of the team. As such, the report should be considered as initial guidance to the new City Manager regarding direction and options to improve the current situation. 3. It is important that you are aware of the make-up of the task force and the contributions of some additional participants. The final task force consisted of: Mark Glaiber - Director, Fleet Management, Metro -Dade Daniel Coughlin - Administrative Supervisor, Fleet Management, Metro -Dade Olga Diaz - Assistant to Director, Fleet Management, Metro -Dade Dexter Groose - President, Value Search, Inc. Jane Kamp - Senior Fleet Analyst, Florida Power & Light Company Bob Schomber - Regional Manager, Florida Power & Light Company The teamwork and dedication of these individuals, their contributions of personal time and expertise, and the support of their respective organizations is exemplary. 4. Finally, as fellow residents, we wish to commend and thank you for your personal leadership of the City in this time of crisis. The recruiting of these Task Forces and the resulting involvement of major community businesses and organizations has shifted public focus from negative finger pointing and redirected energy toward making positive contributions for improvement. All of us who share your vision of making Miami a better place to live regard this activity as an opportunity and feel privileged to "step up to the plate" with you. Best Regards, Robert W. Schomber Regional Manager, Florida Power & Light Company Fleet Management Task Force Leader an FPL Group company 96- 819 0" City of Miami Fleet Management Task Force Review I November 1,1996 Fi CITY OF MIAMI - FLEET TASK FORCE OVERALL RECOlV MENDAMN Currently, fleet management in the City of Miami is fragmented into various components. In order to restore a coherent system of fleet services, a number of steps must be taken. The most critical of these are: (1) determination of an appropriate level of outsourcing, and (2) establishment of an appropriate centralized organizational framework for in- house fleet services. Without substantial changes in these areas, there can be no meaningful improvement in city fleet services. It was determined that the areas of greatest potential are: • A) Outsourcing all or partial fleet management functions. The size and scope of any organization is largely dependent upon which functions, if any, will be outsourced. Outsourcing of fleet services can be as drastic as total privatization, or as discriminatory as the outsourcing of those functions which can be more economically and efficiently performed by other service providers. To that end, outsourcing decisions should be determined as soon as possible. Once outsourcing decisions are made, the development of an appropriate organizational structure for the effective management of remaining centralized fleet services is critical. B) Termination of the current Police Take -Home Policy. Further assessment of the remaining individual assignments and take-home policies needs to be conducted. • C) Acquisition and implementation of a management information system. Readily available data concerning vehicle repairs, utilization and costs have tremendous impact on decisions related to proper staffing and determination of appropriate vehicle assignments. • D) Enhancement and implementation of an effective Bids and Contracts process. This issue speaks directly to availability of parts and service. E) Determination of an appropriate fleet size and composition. Statistical data from the management information system will facilitate this decision. 9�- 819 :Rr' BACKGROUND, The fleet management of any organization is comprised of three major functions: specify and procure, maintain and repair, and manage/administer. It is not a responsibility to determine the optimal vehicle number and type for its using agencies. Fleet Management's mission is to provide services in the most cost effective and efficient manner, based on the needs of its using departments. As such, costs including labor, parts, contracting services, and capital equipment are totally dependent on the operational scope or activity level of its users including Police, GSA/Solid Waste, Public Works and Fire departments. Although fleet management does not have direct control over the majority of its operating costs, such as fuel and parts, it can indirectly impact costs by better managing, organizing and controlling its major functions. This review of the current state of fleet services is aimed at the organizational structure itself and in no way reflects upon the motivation and dedication of the people currently trying to make the best of an impossible situation. A review of current fleet operations has revealed at best a splintered organizational concept lacking in overall management direction, bereft of adequate funding to perform the assigned tasks. As a result, entities such as police and fire have taken over those fleet services which relate directly to their operations. Due to the nature of both the police and fire departments, the reality of inadequate allocations would not necessarily stop them from acquiring required goods and services. This same funding shortage would stop an internal service organization in its tracks. In the interest of organizational efficiencies, the centralization of all fleet functions is recommended. Appropriate funding is absolutely critical. Implementation of any or all committee recommendations cannot, and will not, be successful unless funding levels are sufficient to the task. With these factors in mind, an analysis was performed attempting to identify those areas where the greatest impact could be accomplished. A matrix was developed to compare fleet management objectives to specific business improvement opportunities identified by the team. (See Attachment I - City of Miami Fleet Management Matrix) A more detailed description of the recommendations follow: RECO NDATION A: OUTSOURCING Within any organization, there are areas of work which are not performed in the most cost effective manner. These are typically areas where the volume of work doesn't justify the staff position, or the work is very technical and requires sophisticated and expensive equipment. Solutions to this may be as simple as outsourcing selected functions (partial), or as extreme as the privatization of the entire function. 96- M 2 �w. G RECOMMENDATION A (Continued) A determination must be made with respect to outsourcing all fleet services through either the private sector or Metro. Taking advantage of Metro's existing infrastructure and fleet management expertise would enable the city to receive effective and cost efficient service. The outsourcing decisions will not necessarily yield immediate savings, however they are required to determine the part or parts of the work the city must manage itself. Outsourcing Outsourcing All Services Private,Metro Partial Private/Metro Benefits - Reduce operating costs - Reduce operating costs - Improve quality of service - Improve quality of the specific service Barriers - Not politically popular - Union resistance - Union resistance - Need for continuous - Management resistance communication with vendor - Fleet composition & age increases fees Aids - Structures and expertise exist - Structures and expertise exist - Current fiscal crisis - Current fiscal crisis Cost hnpact - Decreased salaries - Decreased salaries - Increased contractual service - Increased contractual service costs costs - Decreased parts and tires costs - Decreased parts and tires costs - Potential ca ital cost savings I - Potential capital cost savings Once outsourcing decisions are made, the structure necessary to perform remaining in- house services must be developed. It is strongly recommended that the services performed at the General Services Administration, Miami Police, and the Miami Fire Departments be consolidated. Significant areas affecting the efficient operation of any fleet are information systems, procurement of goods and services, and appropriate decisions regarding fleet size and use. Recommendations in these areas are as follows: RECOMMENDATION B: IN-HOUSE FLEET SERVICES -TAKE HOME POLICIES Review individual vehicle assignment and vehicle take home policies. It is important to conduct a thorough review of the individual and take home assignments as this is an area of potential significant savings. Benefits: - Capital cost savings resulting from significant fleet reduction - Operational cost savings resulting from elimination of portal to portal expenses.; s 3 96 — 819 RECOMMENDATION B (Continued) Barriers: - Bargaining agreements - Past labor practice: employee perception that they are entitled to a vehicle - Perception/Image from high police visibility (If more cars better safety) - Possibility of increased vehicle damages (Labor retaliation) - No management "buy -in" for fleet reductions Aids: - Existing Fiscal Crisis - Visibility issue is minimal at best since most employees do not live in city Cost Impact: Changing the individual and take home policies will significantly impact all of the seven major fleet cost categories referred to on Attachment H. Due to the unique nature of the Police Take -Home Program, a separate detailed analysis was performed and is described in Attachment III. RECOMMENDATION C: IN-HOUSE FLEET SERVICES -MIS Implement a complete Management Information System with a Fleet Management module to include a: a) Work Order Chargeback System b) Parts Inventory Control System c) Mileage Tracking System The underlying assumption here is that the city fleet services will continue to be performed in-house, at least partially. If all fleet services are outsourced, there would not be a need for a computerized equipment system. �- 819 Benefits: Provides essential vehicle repair, mileage and manpower usage information needed for rational decision making. - Provides timely information to monitor shop performance. - Provides essential inventory management information - Facilitates effective scheduling of preventive maintenance of all vehicles - Provides chargeback system to allocate vehicle charges to using agencies. - Creates efficiencies by facilitating decisions using empirical data. Barriers: - The cost of the computer software, hardware and training required - The lack of trained staff available to manage and operate the computers - The length of time required to implement - Resistance to change and accountability 4 A�. J`� RECOMMENDATION C (Continued) Aids: - There exists the need to be measurable and be competitive - There are a number of reliable fleet software packages available - There exists management/staff support at the local level for an information system Cost Impact: The implementation of a computer information system will impact four of the seven major fleet cost categories referred to on Attachment H. The costs associated with salaries, contractual services, parts/tires and capital will decrease i as a result of computerizing the fleet operations. RECOMMENDATION D: IN-HOUSE FLEET SERVICES-BiI'1S & CONTRACTS Improve the bids and contracts process to enable the acquisition of goods and services in ! a timely and cost efficient manner. i Benefits: - Improved availability of needed parts and other related services - Dollar savings due to better pricing on commodities purchased Barriers: - Parochial interest/reluctance to adopt other municipal contracts - Lack of contract skills - Inadequate funding procedures result in insufficient funds to pay for parts and services Aids: - Standard and local purchasing procedures exist - Willingness to learn contracting skills - Municipal contracts exist Cost Impact: The implementation of a bids and contracts process will impact four of the seven major fleet cost categories referred to on Attachment II. The costs associated with contractual services, parts/tires, capital and miscellaneous are anticipated to decrease with the implementation of an effective bids and contracts system. RECOMMENDATION E: IN-HOUSE FLEET SERVICES - FLEET SIZE Work with using agencies to determine fleet size and composition necessary to perform departmental functions. While this must be determined by the using department, Fleet management can assist by providing statistical data on vehicle utilization, repair and cost history. 5 ��- b �i 96- 819 RECOMMENDATION E (Continued) Benefits: - Maximize utilization - Delete unnecessary vehicles - Appropriate fleet size will help determine appropriate manpower - Dollar savings associated with vehicle needs assessment Barriers: - Departmental resistance due to using vehicles as unofficial benefits - Employee unwillingness to forfeit unofficial benefits - Technical data unavailable to assist in analysis. Aids: - Current Fiscal Crisis - Industry standards available from Stone & Webster Cost Impact: The determination of an appropriate fleet size and composition process will impact all of the seven major fleet cost categories referred to on Attachment H. OVERALL 11"LEMENTATION As discussed, determination of services for outsourcing will better enable the design of an appropriate in-house management structure. For best resin±.- ',lie critical path described below should be followed during the implementation phase. Time Line Decide Outsource/In-House Improve Bids & Contracts Process implement MIS Determine Appropriate Fleet Size Assess Individual Assignments %Take Home AREAS OF CONTINUOUS IMI PROVEMENT To maintain the gains of improvement it is necessary to develop and implement other opportunities listed on the matrix. • Establish productivity and job standards • Optimal classification and number of employees - an assessment of manpower needs to determine proper classifications for work performed - currently employees are performing work out of class 6 [A AREAS OF CONTINUOUS IMPROVEMENT (Continued) • Evaluate and establish a motorpool, where applicable • Implement vehicle replacement/disposal program - proceeds from sale of vehicles should be used to offset new vehicle purchases - discontinue current practice of donating surplus equipment • Adhere to DERM and OSHA standards - complete review needed to determine noncompliance areas • Optimize the physical plant - layout, work flow processes needs improvement These opportunities assist in enhancing the management structure to meet critical business objectives. (See Attachment I - City of Miami Fteet Management Matrix) In House/Consolidate Out Source _ C s-' y,, _ 4 HOWs a cn cL cn E CL N w- E as V7 V i WHATs E cc 4d LE `�` CS 8-c� Purchase Price p p 010 0 Z�S Maintenance QQOp0000000000 Costs Fueling 0 Q O 0 0 0 14L N Q Q A a 0 0 D L, 0 Overhead Q Q O o Safety & Environment OSHA/DERM Q Q Q O L, 0 Availability Q Q Q Q Q Q 0 C•Q 0 0 0 N Reliability 0 0 0 010 0 0 0 0 Timeliness Q 0 Q 0 m Accuracy of Rep Q CO) Q 1 Q Q D'L Q Utilization Utilization 0 QQ Q Q. 0 d 0 0 Productivity Manpower (Mech Q Q, Q Q Q Q Q Q 00 Q. ABSOLUTE IMPORTANCE. o rV) •— 'd' .— Ln rh f r- V— ' Cv un r,05 co mot- Nr) � CV •-� C14 r� �!- o U'j M *o RELATIVE IMPORTANCE L s M to MATRIX WEIGHTS Strong O 9 Medium Q 3 Weak A 1 9,489,525 8,000,000 2 6,000,000 (D CL w 4,000,000 2,000,000 City of Miami 00 Total Fleet Operating Costs For Fib' 95/96 .4 n ri 01 75% 50% E E 25% �0% U -\o pjv jok\ \Se 1\9 It. WS ?101? Oki V). 0 000-1 S1. G. Capital Costs - Unavailable Contributions Fire Department I Categories GSA & Police Freelance Graphics f.,kcommon\autNIoday\lane.pre Attachment 11 V VL:1 1: 11 0 RECOMIENDATION B Recommendations 1. That the Take Home policy of Police cars by Police Officers be discontinued. 2. That car assignments be reallocated on the basis of shift size and duty assignment. 3. That vehicle service life be extended from 5 years and / or 75,000 miles to 6 years and / or 100,000 miles. 4. That all cars surplus to the City's needs, or ready for retirement, be auctioned off instead of donated to a sister city or any other entity. Executive Summary The current practice of assigning police cars to sworn officers as their personal vehicles to travel to and from work results in high operational and capital costs fleetwide. It is estimated that the take home policy results in an additional 7.75 million m+le-- of driving on the City's fleet each year. This has a great impact on fuel, oil, tires and depreciation expenses. Capital Requirements can be reduced by almost $3 million in 1996 - 1997, and by $7.3 million in the next 3 years by having a fleet that is only 47% as large to support. Direct Operdting Costs can be reduced $1.38 million a year by eliminating the take home policy on police cars. Summary background and analysis The current take home policy was authorized on page 65 of the Labor Agreement between the City and the FOP, explicitly for Sworn Officers residing in the City of Miami. For Officers residing outside the City the language appears ambiguous. These officers were to be provided a car on a voluntary basis, at the rate of 250 for'95= 96, another 250 for'96-97, and the balance for'97298. The current inventory of police cars is reported at 1024 appears to already cover all sworn officers, regardless of where they reside. j 95- 819 I Ii Switching to a No Take Home policy will immediatAy free up an additional 541 vehicles which the city can liquidate. At a minimum value of just $1,500 each, this would generate $.8 million at auction; higher bids would generate proportionately more. The current fleet of police cars is substantially greater than what is needed to provide security services to the residents of Miami. Taking police cars home may improve the profile of police where they reside. But if the officer resides in unincorporated Dade County, Broward County, or even Palm Beach County as a few reportedly do, that is of no value to the taxpayers of the City of Miami. This policy adds substantial costs to the City's operating budget for fuel and maintenance with no direct benefit to the taxpayers of the City of Miami. Cost Savings Estimate Reduced Operating Cost (fuel, body repairs, parts) Reduced Capital Budget One Time $2.9 mil. C96 -'97) Recurring $1.38 million a year $2.1 million (following years) The first year capital savings is greater than succeeding years because of the liquidation of surplus vehicles. Benefits A change in Take Home Policy will provide the City immediate relief in both it's Operating and Capital Budgets, A No Take Home policy will enable the City to liquidate 541 vehicles that are excess to it's needs. This liquidation could produce cash revenues of from $1 to $2.5 million or more. This report estimates surplus sale revenues conservatively at $.81 mil. on just $1,500 per vehicle. A smaller fleet will be more manageable and controllable and improve overall cost visibility. There may also be some reduction in self insurance costs associated with 7.75 million fewer miles being driven under a No Take Home policy, although no savings are anticipated in this report. 2 819 S�r 1i Potential Pitfalls / Liabilities Discontinuing the Take Home policy will be unpopular and may only be achieved by reopening the labor agreement. Some additional vehicle abuse may be incurred. In some cases this policy change will require police employees to purchase an additional vehicle for their personal transportation to and from work. In all cases it will require police who drive their own vehicles to pay for their own gas as well as wear and tear costs associated with commuting to work. Implementation Strategy / Timing A detailed review of current vehicle allocations for NRO's, Beat Officers, Investigations, and Administration requirements should be conducted to determine the minimum inventory for such non patrol assignments. This figure should then be fin-ther adjusted if necessary to be in compliance with the City's ability to fiord these services. The CiWs reduced fleet should be comprised of equal number of cars ranging in age from 1 to 6 years. This will enable the City to gain the most revenue from it's surplus auction. The City will then continue a normal replenishment in 1996-1997 for 16% of it's , Fleet. 96 - 819 3 r City of Miami Police Fleet Assignment Comparison - ANNUAL OPERATING COST TAKE HOME NO TAKE HOME Fleet Requirements 24 HOUR 8 HOUR notes North Station Swom Officers, NROs, Beats, Sgts., Us 160 87 Central Station Swom Officers, NROs, Beats, Sgts., Us 247 137 South Station Swom Officers, NROs, Beats, Sgts., Lts 220 123 Field Support, 2 shiftsl 61 24 pool @ 80% Investigations, 2 shifts 225 90 avg. pool @ 80% Administrative and Other Staff 111 22 pool Q 20% Total 1024 483 Vehicle miles per year 14,900 15,500 from attachment Total Miles in Millions 15.26 7A9 fuel mpg 15 13 police estimate fuel requirement in gallons 1,017,173 575,885 Fuel cost at 1.05/gal. $1,068,032 $604,679 Annual body repairs $745,000 $365,552 Maintenance, its only $.07/mi. $1,068,032 $524,055 Total Annual Operating Cost / Year = $2,881,064 $1,494,286 ANNUAL CAPITAL COST Fleet Size Required 1024 483 Est. Surplus Fleet Compared to Current Inventory 0 541 EsL Liquidation Value of Surplus Vehicles $0 $811,500 @ $1,500 ea. Replacement Policy, in yrs / miles 5 / 75,000 6 / 100,000 Cost of 20% Replacements in'96 -197 $4,096,000 $1,120,500 uses surplus rev. Cost of 20% Replacements in'97 -'98 $4,096,000 $1,932,000 Cost of 20% Replacements in.'98 -199 $4,096,000 $1,932,000 Estimated Capital Cost Over 3 Years $12,288,000 $4,984,500 Total 3 Year Operating Cost Savings = $4,160,335 Total 3 Year Capital Cost Savings = $7,303,500 3 Year Total Saving: 1 $11,463,835 . 4 96- 819 Average Police Car Mileage 96-- 819 5 1 �Y r im 1 M OF November 5, 1996 Merritt R. Stierheim Acting City Manager 444 Southwest 2nd Avenue Miami, Florida 33131 Dear Mr. Stierheim: Enclosed with this letter of transmittal is the final report of the Health Insurance Task Force. We hope the value of the report matches the effort and serious thought which went into its preparation. Respectfully, Nancy Fern dez nald . ' Stone Sue Weller Frank Rollason Employee Benefits P.O. Box 248106 Coral Gables, Florida 33124-1415 (305) 284-6830 96-- 819 OVERVIEW The existence of a self insurance trust is referenced in several city documents including the City Budget, Deloitte & Touche actuarial studies and the City Code. Three Trustees are named by position. A trustee of funds for any benefit has a fiduciary responsibility to require financial accountability where funding is involved, and, also according to City documents, has a responsibility to assure that the Trust operates as if it is an insurance company with reserves to assure financial solvency. In the case of healthcare benefits, the Task Force has isolated several concerns for which clear answers are not evident. Specifically: • The Task Force cannot identify reserves in any amount to cover the potential liability of the plans. • The Task Force cannot identify how and where employer and employee contributions are placed in trust for their intended purpose. • The Task Force does not believe that the method currently used to pay monthly healthcare costs, where the carrier calls the City and asks that current funds be deposited to pay for accumulated claims, is consistent with proper insurance trust operations.. • The Task Force is told that the City, through CIGNA, purchases excess "stop -loss" coverage for health benefit claims. However, no current actuarial analysis or healthcare Trust audit reports exist, and the most recent available actuarial report (Deloitte & Touche 1995) on the S.I.T.F. states that the City has not purchased commercial excess insurance for = self insured coverage and is responsible for all losses. The presence of these matters suggests that benefit plan participants could stand unprotected in certain instances. Accordingly, the Task Force urges the City Manager to act with deliberate speed on the recommendations which follow. � - 819 r UNIVERSITY OF HEALTH INSURANCE TASK FORCE REVIEW November 6, 1996 Recommendations: The Benefits Department should be part of the Human Resources Department or Labor Relations Office. Currently, Benefits is part of the Fire Department. • Workers Compensation payments should be integrated and coordinated with health care to avoid dual payments and unnecessary cost to the health care plan. • Each health care carrier (medical -dental -vision and prescription) should produce a claims analysis which is reviewed semi-annually by Benefits and Finance staff. A claims and financial analysis should be reviewed annually by Benefits, Finance, Human Resources/Labor Relations and the city attorney. • There should be a quarterly reconciliation and accounting of prescriptions against the administrative fee. It should be performed by the carrier and reviewed by Benefits staff. A Summary Plan Description of all benefit plans clearly marked as such should be prepared and distributed to each plan member. All terms and conditions should be clearly spelled out in language the plan member can understand. • Form 5500 for each benefit where that form is required should be examined by staff in Benefits, Human Resources/Labor Relations and the Finance departments before being submitted to the IRS. Each staff should be required to attest to completeness and accuracy. • The chief benefits officer should participate in some form with Union negotiations involving each of the bargaining units where benefits issues are involved. The function of this position should be to provide cost analyses and to assist in the establishment of objectives and benefit plan design. An insurance broker should be available to the management negotiating team. The broker should be prepared to provide actuarial analyses. Employee Benefits P.O. Box 248106 ,, k Coral Gables, Florida 33124-1415 ' (305) 284-6830 .e 819 • Multiple year health care (medical -dental -vision and prescription) carver contracts should be negotiated with stabilized premium rates, and renegotiated not less than every two years. • The Benefits Office should have the services of an insurance broker available for use upon demand. • Authority to negotiate any type of benefit plan with an insurance carrier should require prior knowledge of the Chief Human Resources Officer/Labor Relations Officer, city attorney and Chief Financial Officer before incurring the obligation. Authority for the City Manager to contract with an insurance carrier should require prior approval of the above listed positions. • The City ofMiami should explore the possibility of contracting for some benefits utilizing the combined leveraging ability of multiple local communities. • A strong subrogation clause should be established and enforced within the health care plan to insure that the City recovers costs which it should not have to pay. • Cost containment incentives for the third party administrator or health care contractor should be added to the contract to replace the existing disincentives. Currently, greater claims payment equates to greater income to the third party administrator or health care contractor. • Wire transfer procedures should be examined semi-annually and transfer accounts should be continuously audited for accuracy. • One person should be designated in writing as plan administrator. This person should have fresponsibility for conducting a performance audit semi-annually on terms and conditions of all ASO contracts. • A survey of all benefits should be conducted not less than every two years to determine the competitive position of the total benefits package. The survey should be conducted and concluded prior to any union negotiations. • The plan administrator should be very knowledgeable in matters involving applicable regulatory compliance. • A sense of urgency coupled with empowerment and responsibility should be developed within the Benefits Office operating as a component of Human Resources/Labor Relations. • The city should periodically evaluate the differences between self insurance and commercial insurance to determine if advantages lie in changes. 96 - 819 Lew Ei Executive Summary: Summary Background and Analysis The City of Miami offers its administrative staff and employees a complete and attractive benefits plan. It includes a full range of benefits which makes the City generally competitive for its workforce needs. The life insurance plan is modest and it may be wise for the City to consider offering, on a voluntary (employee pay all) basis, supplemental life and disability insurance. The delivery system is disjointed, inefficient, uncoordinated and replete with infirmities including lost opportunities for arresting and controlling costs. Staff members are clearly intelligent and skilled. Their task -orientation is enviable; however, they deliver services in an environment where systems thinking and team logic is absent. Controls, audits, an established, communicated and understood set of procedures and written rules are noticeably absent. Limits of authority, scope of responsibility and approval paths are unclear or altogether undefined. Communication patterns are ad -hoc in many instances. Accountability is diffused. Resources to define and implement a solid delivery system remain untapped. The fact that the program works at all is testimony to the dedication of staff who themselves confess knowledge of these insufficiencies but are limited in their ability to affect change. At this point in time the benefits program generally, and health insurance specifically needs: I. A formal delivery system. 2. Coordination to arrest and control costs. 3. Management skills to recover some unnecessary expenses involving subrogation and coordination of benefits. 4. An audit, review and control function for health care claims management. �5. A method to recover unnecessary tax expenses such as those found in flexible spending accounts, pre-tax benefit plans and possibly in retiree health care. 6. Self insured plans must be run like an insurance company with proper current funding and adequate insurance coverage and reserves. 7. Employee contributions must be deposited into a trust account immediately or deposited with the carrier or risk bearing agency. Cost Savings/Revenue IncrgMs The benefits plans are ripe for intense management evaluation. In many instances benefits staff have no idea of the frequency at which health care claims are filed. They do not know how claims are counted. Neither do they know if the administrative fees paid match the frequency of usage. An example is the matter of prescriptions. A fee is paid for each prescription which is dispensed but it is unknown if the benefits office ever analyzed data to determine usage. 96- 819 There are scores of opportunities to affect costs. They include: • Paying lower administrative fees for larger supplies of medications. • Utilizing the services of a Pharmacy Benefit Manager to control prescription costs. • Coordinating medical payments with Workers Compensation where appropriate. • Negotiating hospital confinement rates when out -of -network care is needed. • Implementing a strong subrogation clause and employing a law firm to protect those interests, paying their fees from monies which are recovered. • Reevaluating the proportional cost for health care bome by the City where retirees are concerned. • Expanding flexible benefits and avoid paying the employer portion of taxes on earnings. . • Reevaluating the executive plan which provides no incentive for managed care election by the executive and is therefore at an exorbitant cost to the City. • Incorporating into future ASO contracts a stipulation that it is the responsibility of the third parry administrator to constantly seek opportunity for cost efficiency through purchasing. While highly speculative, an educated judgement is that it is very reasonable to expect a cost reduction of 4% to 7% in the benefits budget. The sentinel effect alone (of audits and oversight) adds a sense of responsibility which cannot be measured in dollars. Benerits The benefits to be attained with a revamped delivery system are principally: • Efficiency and speed. • Control and responsibility • Coordination with other departments • Predictability of costs • Arrest and control of increasing costs. • Competitive benefits. �- 819 Potential Pit&U Liabilities The City may not have in the incumbent staff all of the knowledge and skills necessary to manage a revised delivery system. This revised system demands a relatively comprehensive knowledge of some highly technical and legal matters. Implementation Strategy/Timing The observations and recommendations contained herein are thought by the Task Force to be of such critical nature that they require immediate attention of the City Manager and City Commission. ciqmiian,.rtr 0 li R November 8, 1996 Mr. Merrett Stierheim Acting City Manager City of Miami 444 S.W. 2nd Avenue 10th Floor Miami, Florida 33130 RE: City of Miami, Risk Management Department Review Executive Summary Dear Mr. Stierheim, At your request we met with Deputy Fire Chief, Frank Rollason, and Mario Soldevilla of the Risk Management Department for the City of Miami. it appears to us that the City of Miami has cut the Risk Management Department, especially in the area of claims handling, to the point where it is no longer possible for them to do an adequate job. While the City may be saving money in employee costs, this is more than offset by the increased cost of claims for both workers compensation and liability.* Our report details specific recommendations to implement "best practices" in the area of claims management. This could be done quickly by bringing in an outside third party administrator (TPA) to manage and supervise the claims function within the Risk Management Department. This would help them to quickly get control of this situation. The present staff is inadequate to properly handle the number of claims currently outstanding. Prompt claims handling is essential to produce the lowest overall cost for the City. Professionally trained claims adjusters need to be brought in as soon as possible to get the claims situation under control or this will continue to be a source of funding losses for the City. Hiring and training new people may be a long-term process. A faster solution may be to implement the RFP previously approved by the City Council to outsource much of the Risk Management and claims handling function to a qualified third -party administrator as quickly as possible to get things under control. We also believe that levels of authority for paying claims is too low. Any claim greater than $25,000 must go before the City Commissioners for approval. We believe this should be changed to $100,000 with levels below that delegated to an insurance committee consisting of people from Risk Management, City Attorney and Finance. The delay in settling claims increases the ultimate cost of claims. 96- st9 Merrett Stierheim November 8, 1996 Page -2- Successful workers compensation claims management is dependent on the people and the process. The more significant opportunities for improvement include: • Increasing staffing in the claims functions to increase their efficiency and effectiveness; • Revising hiring practices to employ more experienced claims professionals; • Utilizing nurse case managers to manage the medical aspects of the claims and improve control over disability costs; • Evaluating disability pay policies to eliminate incentives to remain out of work; and • Enhancing the claim department's authority to settle claims early and avoid costly litigation. Further, it appears to us, that the City of Miami does not have an effective safety and loss control function. Much of the process has been developed but not implemented. The safety function should report to the City Manager to enhance its organizational effectiveness and emphasize the importance of this function. Also, we recommend that the open safety position in the police department be filled as quickly as possible. I believe that Frank Rollason knows most of the right things to do but does not have the proper funding or staff to make these things happen. Without improvements in the claims handling and safety and loss control procedures, the City will continue to experience increasing losses resulting in even higher budget deficits. We hope these suggestions and recommendations have been helpful. While it is hard to add people or resources when you are trying to reduce the budget, we believe the benefits will justify the additional funding required. Please let us know if you have any questions. Sincerely yours, Wayne tnson On- Behalf of the Team '--Attachments Owaynelmerrett 95- r CITY ®F141IA.MI Review. of Risk Management Activity Including Insurance, Safety and Claims Handling As requested by Acting City Manager - Merrett Stierheim Review and Report Prepared By: Wayne Johnson Ryder System, Inc. Gail Krinsky Ryder System, Inc. David Hopps Ryder System, Inc. Bart Douglas Ryder System, Inc. Annamarie Lemoine BellSouth Telecommunications, Inc. November 8, 1996 .f 95- 819 �i INTRODUCTION Risk Management, insurance, safety and self insured losses represent a cost of approximately $17,469,000 to the City of Miami, $14,382,000 (82%) of the total is for retained losses (see attached breakdown). Risk Management and Insurance Costs Fixed Property Insurance $1,487,000 Claims Self Administration Costs 1,200,000 Legal Costs (In-house) Included Safety/Loss Prevention Costs (est.) 200,000 Risk Management Department Costs (est.) 200,000 Total $3,087,00 Variable Property Losses within Deductible Not Available *Workers' Compensation Losses 5,686,000 *Police Professional Losses 2,097,000 *Automobile Liability Losses 1,452,000 *General Liability Losses 5,147,000 Automobile Physical Damage Losses (A) 800,000 Total $14,382,000 Grand Total $17,469,000 "Reflects actuarial estimates of cash flows for 1997. These estimates are subject to fluctuations. (A) Police $750, 000; Fire $35, 000; GSA $15, 000 Issues Impacting Risk Management Costs • Claims Management/Procedures/Best Practices •, Defense Strategy/Settlement Authority • Claims Cost Containment Activities/Return to Work • Inconsistencies in reporting and accountability for risk management and safety • Benefit levels for workers compensation greater than private industry inhibits return to work, and increase costs • Structural problems such as City Charter Resolution 39802, union contracts etc., may inhibit best claims practices such as medical management and return to work programs • No service provided by broker 96- 819 1 0 En r CITY OF MIAMI RECOMMENDATION 1 (Mandated by State Law) By December 1, 1996 a managed -care arrangement for worker's compensation should be submitted to the Florida Agency for Health Care with an effective date of January 1, 1997. Failure to do so may result in the loss of the City's authorization to self -insure for workers' compensation. The loss of self-insurance authority may result in an increase of cash outflow for 1997 of at least $2,000,000. RECOMMENDATION 2 The City should utilize "best practices" claims management procedures for the handling of all claims. An audit by an outside professional organization will identify areas where the City of Miami is deficient. The review to date indicates that many problems exist. RECOMMENDATION 2a The City should conduct an immediate review of City Commission Resolution 39802 which provides for supplementary salary for injured workers. RECOMMENDATION 2b The City should conduct an immediate review of all labor agreements to identify. cost savings as it relates to supplemental pay when off work due to a work related injury/illness and what is presumed to be "on -duty" Summary Background and Analysis Organizations which have adopted a "best practices" claims management philosophy have been successful in reducing their loss costs by at least 25%. The areas subject to this j review are as follows: ' • claim reporting procedures • claim investigation process • determination of liability/compensibility • reserve philosophy • settlement authority • settlement/defense strategy • cost containment programs • documentation of safety violations • subrogation and indemnity collections • medical treatment strategy 2 96- 819 r The audit will compare the practices of the City of Miami self-administered claim units to what is considered in the claim handling industry to be "best practices". In any area where the City of Miami adjusters are not utilizing "best practices" recommendations will be made, and training provided to bring the competency of the adjusters up to the desired level. Our limited review of the current claims management process indicates that they are not "best practices" driven. There does not seem to be any consistency from department to department on how claims are reported to the claim handling staff. The investigation and determination of liability/compensibility is not aggressive. The levels of authority to settle claims is low enough to impede the process, and the City attorney and City commissioners are inconsistent in their review and granting of settlement authority. Claims should be handled more aggressively. City adjusters appear to be passive in many areas. The claims audit would focus on practices in areas that we feel are deficient. • City pays workers compensation benefits for first seven days off, resulting in an incentive to take off work. • City pays compensation for losses that are not covered by Florida Workers Compensation statues. • City does not aggressively seek indemnification and reimbursement from third parties employing off -duty policemen, or from the policemen themselves. • Adjuster work flow and procedures. • Adjuster supervision is presently lacking due to staff reductions. Cost Savings/Revenue Increases The Deloitte and Touche Actuarial Analysis dated September 30, 1995 outlines the projected cash flow for 1996 and 1997, and recommend reserves for 1996. They are as follows: Workers' Compensation Automobile Liability Police Professional Liability Public Officials Liability Other Liability Total Cash Flow (1996) $ 5,142,000 1,382,000 1,867,000 3,559,000 662,000 $ 12,612,000 The estimated cash flow for 1997 is $14,382,000. Reserves $ 34,069,000 2,921,000 8,711,000 26,200,000 4,752,000 $ 76,653,000 If the City adopts "best practices" claims management procedures we believe a cash flow savings of $2,000,000 could be recognized in 1997. This savings could be achieved by aggressive management of the claims being settled in 1997 aswell as a review and reduction of outstanding reserves ultimately resulting in lower claim payments. These estimates assume that losses are adequately reserved per the actuarial reports which will be confirmed by the audit. 96- 819 3 Adopting "best practices" claims management standards will continue to show benefits to the City of Miami intci the future, by continuing to reduce the cash flow necessary to pay claims, and reduce the reserves carried by the City for open claims. Additional cost to the City of Miami would be limited to the cost of the audit which we estimate to be $50,000, and the results of costs from any resulting staffing recommendations made by the auditors to enable the claim handling units to perform at "best practices" levels. Implementation Strategy/Timing As soon as the audit results are reviewed and accepted, the implementation and training could be accomplished in sixty (60) days. RECOMMENDATION 3 The current method of allocating claims settlement authority is inefficient resulting in delays in developing claim values and defense strategy. It is recommended that a committee of individuals representing claims, legal and finance be formed and meet monthly to discuss all claims reserved over various levels and claims resulting in death or serious injury or other types as agreed. Size of Claim Authority Levels Claims < $10,000 Risk Management Department Claims 10,000 - $25,000 Risk Management Department, City Attorney and Finance Department Claims > $25,000 Full committee recommend to City Commissioners for approval 1. Determine if investigation is complete, if not set course of action for adjuster. 2. Set reserve and target settlement value for claim. The adjuster would have the authority for the target value. 3. Determine defense and negotiation strategy. 4. Review progress to date to insure strategy is being followed and make changes where necessary. This is a best practice employed by firms that have dramatically reduced or minimized claims costs. 4 96- 819,. -IN -.1,,` - Summary Background and Analysis In our opinion, the current claims procedure does not facilitate the prompt identification, valuation and settlement of claims that should be settled. As a result, claimants become agitated, seek legal representation, and incur more treatment resulting in larger claims settlements. Cost Savings/Revenue Increases This recommendation could be implemented at no increased cost to the City. Only a reallocation of the committee members' time would be required. The benefit would be a more timely and consistent approach to claims management. This recommendation could be implemented immediately,. Assuming that change would not conflict with the City charter, union agreements, etc. RECOMMENDATION 4 We recommend that the City Commission consider raising the dollar level of claims that need to come before the Commissioners for approval for the current level of $25,000 to $100,000. Summary Background and Analysis In today's dollars $25,000 is a very low amount to require City Commissioners approval. Proper checks and balances could be built into the system by increasing the approval levels for the Risk Management Department, the City Attorney's office and Finance Department that would allow claims to be handled in a more expeditious manner. The current process is too slow and delays the prompt settlement of claims. Cost Savings Prompt handling of claims will result in lower settlement values and ultimately lower costs for the City. Increasing the limits will allow the trained professionals to do a better job and free up Commissioners' time to handle other important city business. RECOMMENDATION 5 The City should request a proposal for third party administrative claims handling services where professional claims handling companies would bid to take over the City's claims either by providing supervision of the City adjusters or taking the City adjusters on as their employees. 19 5 r Summary Background and Analysis The current claims handling process we believe to be below industry standards. This would be verified by doing the claims audit (see Recommendation #2), therefore, this recommendation should not be completed until the claim audit is completed and analyzed. Cost Savings/Revenue Increased The cost of implementing this recommendation would be determined by comparing the cost of the TPA versus the cost of maintaining in-house claims adjusters. Additional costs may be justified as the improvement in supervision and claims handling practices may result in a greater reduction in claims costs. RECOMMENDATION 6 Perform cost/benefit analysis to determine if the deductible on the property policy provides the City ultimate cost effectiveness. Summary Background and Analysis Insurance premiums are reduced when the deductible is increased. The deductible level the City should have is determined by reviewing the cost of claims stratified by layer, and contrasting the results with premium quotations for various deductibles. This should be done in conjunction with a review of all the coverages being provided to determine that the best overall program has been put in place at the most efficient rate available in the market. Implementation Strategy/Timing Generally, the selection of a deductible level is negotiated at the policy renewal. The reduction in premium must be greater than the cost of assuming the losses within the higher deductible layer. if the cost/benefit analysis shows a substantial benefit to the City, negotiations with the insurance company should be started immediately. Cost Savings/Revenue Increases With a total property premium of $1,500,000, a higher deductible could save the City $100,000. However, the overall package needs to be considered for all lines of coverage. RECOMMENDATION 7 Consideration should be given to a cost benefit analysis for purchasing excess liability insurance coverage for those losses that are not limited by a sovereign immunity doctrine (i.e., police professional, civil rights, etc.). 0 Ag 4: The City has experienced a wide fluctuation in claims paid over the sovereign immunity limitation as much a's $8,000,000. The City may find the purchase of catastrophic insurance to be cost effective over the long term. Insurance will stabilize the cost of large claims over time. In addition, the City will benefit by the insurer's experience in claims management and loss prevention. Cost Savings/Revenue Increases There would be no cost to the City as this analysis should be completed by the current insurance broker. The coverage would only be purchased if it was deemed to be cost effective. RECOMMENDATION 8 Re -open the RFP process in accordance with Resolution 95-393. Summary Background and Analysis In May of 1995, the City of Miami passed Resolution 95-393 which authorized the City Manager to issue a request for proposal (RFP) to outsource the risk management function. The city recognized that a professional risk manager was essential the control the cost of insurance, safety and claims, and that no one in the present employment of the City had those talents. The RFP was very comprehensive and addressed safety, light duty, claims adjusting, loss control services, quality control and supervision, management information systems and insurance procurement. It is our understanding that the RFP was never issued Cost Savings/Revenue Increases Re -initiating the RFP would not cost the City of Miami any money 1 Since the City no longer has an Insurance Committee, once the RFPs are returned, the City should hire an independent risk management consultant to select the appropriate vendor. The cost of this consultant would be $10,000 - $15,000. Alternatively, the City, could establish the Insurance Committee and with or without the help of an independent consultant, select a service provider to implement the RFP. Once the appropriate vendor is selected, the on -going cost to the City would be minimal as the oversight of this vendor should be included in the insurance broker fee agreement (see Recommendation ##9). Implementation strategy/timing the RFP process and selection of a risk management vendor could be accomplished within 90 days. Fi RECOMMENDATION 9 Review method of broker compensation. Summary Background and Analysis We believe that the City's current insurance broker realized approximately $150,000 in commissions per. year for placing the City's property insurance coverage. This coverage should be placed net of any commissions. Cost Savings/Revenue Increases The City should consider changing the broker's compensation to a fixed fee for services rendered. A fair fee for just placing the property coverage would be $50,000. This leaves the City with $100,000 to pay for risk management services either from an independent consultant or the insurance broker. The estimated fee paid will be determined by the amount of services requested by the City. Either way, the City should be able to get better results and wider coverage by compensating the broker on a fee basis. RECOMMENDATION 10 The City should re-evaluate the reporting hierarchy for the Safety Department. Summary Background and Analysis The Safety Department appears to have been an "orphan" department over the years because it has reported to numerous departments (i.e. personnel, risk management, fire, law, finance). The Safety Department has reported to some of these departments more than once. The Department needs to report to as influential a Department and individual as possible to raise the level of awareness and importance of safety. The structure included in LMP- 1-95 which was issued in April is a step in the right direction in establishing full time positions, but the overall reporting relationship needs to be evaluated further. Cost Savings/Revenue Increases There should be no cost associated with changing the reporting relationship of the Safety Department. 1:1 96- 819 o� �d RECOMMENDATION 11 Fully implement LMP-1-95 and fill the Police Department Safety Coordinator position within the next 30 days. Summary Background and Analysis LMP-1-95 was issued in April, 1996 , but the Police Department position is yet to be filled. In addition, the City-wide Safety Committee as well as most of the Department Safety Committee have yet to meet. It is essential that the Police Department position be filled so that there is a functional champion leading the safety & health effort. The Fire Department has a functioning and apparently effective safety committee in place, but there was no evidence that the same held true for the City as well as the other Departments as set forth in LMP 1-95. LMP-1-95 gives the City-wide Safety Committee the "authority to require policy and/or operational changes, if necessary to reduce injuries and liability". This is a powerful mandate, but has not been put into action. Cost Savings/Revenue Increases There will be a cost associated with the additional position, but little or no cost for the committees. The Police Department comprises too large a population of the City and represents a significant portion of the risk; therefore, there should not be a delay in filling this position. RECOMMENDATION 12 Identify the roles and responsibilities of all City management as it relates to safety and hold them accountable. Summary Background and Analysis One of the fundamentals of any effective safety & health effort is management accountability. It does not appear that roles and responsibilities regarding safety & health are in writing, and if so, are not followed through with. What gets measured gets done. There does not appear to be any structured process for periodic appraisals of individual performance which leads to complacency and a lack of follow through. Cost Savings/Revenue Increases There would be no cost associated with the development of roles and responsibilities and the pay back in increased focus and awareness would be almost immediate. 96-- 819 E r RECOMMENDATION 13 Complete an assessment of each City Department's safety and health program using the OSHA Program Evaluation Profile (PEP) included in Exhibit I. Summary Background and Analysis There is little evidence of any formal ongoing assessment activities. In order to ensure that key areas are targeted for action you need to know where the strengths and deficiencies of the safety & health program exist. This PEP (Exhibit 1) is a relatively simple and accurate tool that is currently being piloted by State and Federa! OSHA to assess employers efforts regarding safety & health. The City should also consider benchmarking their safety & health efforts against other large cities in Florida and elsewhere. Cost Savings/Revenue Increases There would be little additional cost to do this "desktop" assessment. With a little training the Safety Officers could complete this exercise. OSHA's consultation branch could possibly provide some free guidance on the process. The results of this assessment could then be prioritized, included in the strategic plans mentioned in Recommendation 13 and actioned. The side benefit of this assessment will be a better understanding of your compliance status. RECOMMENDATION 14 Develop an overall safety & health strategic plan for the City as well as for each Department. Summary Background and Analysis Especially during these critical times, it is essential to have a plan in order to achieve the goals desired. The plan should prioritize by City Department the critical items, both from a compliance and cost savings standpoint. Most of this information would come from the PEP assessment. Short-term (3-6 months), medium -term (6-12 months) and long-term (12+ months) actions should be identified, management responsibility assigned and ongoing executive follow up should occur until completed. Cost Savings/Revenue Increases This is where the cost will be incurred. It is unrealistic to guess at a cost figure without having the benefit of the assessment. Most items will cost peoples' "time" versus "money". However, there will be costs associated with development of needed programs, training for management and repair of identified critical equipment/structures. 10 ��� 819 RECOMMENDATION 15 Establish a formal professional development plan for each of the Department Safety Officers including the use of internal and external resources. Summary Background and Analysis Since the current Department Safety Officers are not fully trained and educated safety professionals there is a need to educate them further so that they have the necessary knowledge and skills to carry out their responsibilities. This cannot be accomplished solely with "in-house" on-the-job training. There is a need for use of external resources such as the OSHA Training Institute and affiliated University Education Centers, American Society of Safety Engineers and the National/Florida Safety Councils. Cost Savings/Revenue Increases The cost of this training would be between $5,000-$10,000 for the entire department, but the return on improved productivity and reduced losses should be several fold. 11 EXHIBIT I PROGRAM EVALUATION PROFILE (PEP) Elements There are six elements to be scored in the PEP: 1. Management Leadership and Employee Participation 2. Workplace Analysis 3. Accident and Record Analysis 4. Hazard Prevention and Control 5. Emergency Response 6. Safety and Health Training Factors These elements (except for #6) are divided into factors, which are also scored. The score for an element will be determined by the factor scores. These factors are: 1. Management Leadership and Employee Participation * Management leadership * Employee participation * Implementation (tools provided by management, including budget, information, personnel, assigned responsibility, adequate expertise and authority, line accountability, and program review procedures) * Contractor safety 2. Workplace Analysis * Survey and hazard analysis *Inspection * Reporting 3. Accident and Record Analysis * Investigation of accidents and near -miss incidents * Data analysis 4. Hazard Prevention and Control * Hazard control * Maintenance * Medical program 5. Emergency Response * Emergency preparedness * First aid. 6. Safety and Health Training (as a whole). im 96- 819 r Scoring Each individual element and factor are scored from 1 to 5. Scores for each of the six elements are determined as follows: a) The score for the "Management Leadership and Employee Participation" element shall be whichever is the lowest of the following: 1 The score for the "Management Leadership" factor. 2 The score for the "Employee Participation" factor. 3 The average score for all four factors. Note: The factors of "Management Leadership" and "Employee Participation" are given greater weight because they are considered the foundation of a safety and health program. b) For the sixth element, Training, just determine the level 1-5 that best fits the worksite and note it in the appropriate box on the PEP. c) For each of the other four elements, average the scores for the factors. d) In averaging factor scores, round to the nearest whole number (1, 2, 3, 4, or 5). Round up from one-half (5) or greater; round down from less than one-half (5) Overall Score. An "Overall Score" for the organization will be recorded on the score summary. This will be the average of the six individual scores for elements, rounded to the nearest whole number (1, 2, 3, 4, or 5). Round up from one-half (5) or greater; round down from less than one-half (5). Example: A PEP's element scores are: 1) 2 2) 2 3) 1 4) ' 3 5) 2 6) +3 13 13/6 = 2.16 = 2 Program Levels The overall score of the PEP constitutes the "level" at which the Organization's safety & health program is scored. -The following chart summarizes the levels: Score Level of Safety and Health Program 5 Outstanding program 4 Superior program 3 Basic program 2 Developmental program 1 No program or ineffective program 13 OSHA PROGRAM EVALUATION PROFILE (PEP) MANAGEMENT LEADERSHIP AND EMPLOYEE PARTICIPATION Management Leadership Visible management leadership provides the motivating force for an effective safety and health program. (1989 Voluntary Safety and Health Program Management Guidelines, b 1 and c 1 1 Management demonstrates no policy, goals, objectives, or interest in safety and health issues at this worksite. 2 Management sets and communicates safety and health policy and goals, but remains detached from all other safety and health efforts. 3 Management follows all safety and health rules, and gives visible support to the safety and health efforts of others. 4 Management participates in significant aspects of the site's safety and health program such as site inspections, incident reviews, and program reviews. Incentive programs that discourage reporting of accidents, symptoms, injuries, or hazards are absent. Other incentive programs may be present. 5 Site safety and health issues are regularly included on agendas of management operations meetings. Management clearly demonstrates --by involvement, support, and example --the primary importance of safety and health for everyone on the worksite. Performance is consistent and sustained or has improved over time. 14 MANAGEMENT LEADERSHIP AND EMPLOYEE PARTICIPATION Employee Participation Employee participation provides the means through which workers identify hazards, recommend and monitor abatement, and otherwise participate in their own protection. Guidelines, b 1 and c (1).) 1 Worker participation in workplace safety and health concerns is not encouraged. Incentive programs are present which have the affect of discouraging reporting of incidents, injuries, potential hazards or symptoms. Employees/employee representatives are not involved in the safety and health program. 2 Workers and their representatives can participate freely in safety and health activities at the worksite without fear of reprisal. Procedures are in place for communications between employer and workers on safety and health matters. Worker rights under the Occupational Safety and Health Act to refuse or stop work that they reasonably believe involves imminent danger are understood by workers and honored by management. Workers are paid while performing safety activities. 3 Workers and their representatives are involved in the safety and health program, involved in inspection of work area, and are permitted to observe monitoring and receive. results.. Workers' and representatives' right of access to information is understood by workers and recognized by management. A documented procedure is in place for raising complaints of hazards or discrimination and receiving timely employer responses. 4 Workers and their representatives participate in workplace analysis, inspections and investigations, and development of control strategies throughout facility, and have necessary training and education to participate in such activities. Workers and their representatives have access to all pertinent health and safety information, including safety reports and audits. Workers are informed of their right to refuse job assignments that pose serious hazards to themselves pending management response. 5 Workers and their representatives participate fully in development of the safety and health program and conduct of training and education. Workers participate in audits, program reviews conducted by management or third parties, and collection of samples for monitoring purposes, and have necessary training and education to participate in such activities. Employer encourages and authorizes employers to stoe activities that present potentially serious safe!and health hazards. 96-- 8.19 15 MANAGE. ENT LEADERSHIP AND EMPLOYEE PARTICIPATION Implementation Implementation means tools, provided by management, that include: - budget - information - personnel - assigned responsibility - adequate expertise and authority - means to hold responsible persons accountable (line accountability) - program review procedures Guidelines, b 1 and c 1 1 1 Tools to implement a safety and health program are inadequate or missing. 2 Some tools to implement a safety and health program are adequate and effectively used, others are ineffective or inadequate. Management assigns responsibility for implementing a site safety and health program to identified person(s). Management's designated representative has authority to direct abatement of hazards that can be corrected without major capital expenditure. 3 Tools to implement a safety and health program are adequate, but are not all effectively used. Management representative has some expertise in hazard recognition and applicable OSHA requirements. Management keeps or has access to applicable OSHA standards at the facility, and seeks appropriate guidance information for interpretation of OSHA standards. Management representative has authority to order/purchase safety and health equipment. 4 All tools to implement a safety and health program are more than adequate and effectively used. Written safety procedures, policies, and interpretations are updated based on reviews or the safety and health program. Safety and health expenditures, including training costs and personnel, are identified in the facility budget. Hazard abatement is an element in management performance evaluation 5 All tools necessary to implement a good safety and health program are more than adequate and effectively used. Management safety and health representative has expertise appropriate to facility size and process, and has access to professional advice when needed. Safety and health budgets and funding procedures are reviewed periodically for adequacy. W qq� 819 r r MANAGEMENT LEADERSHIP AND EMPLOYEE PARTICIPATION Contractor Safety Contractor safety: An effective safety and health program protects all personnel on the worksite, including the employees of contractors and subcontractors. It is the responsibility of management to address contractor safety. (Guidelines, (b) (1) and (c) 1 1 Management makes no provision to include contractors within the scope of the worksite's safety and health program. 2 Management policy requires contractor to conform to OSHA regulations and other I e al re uirements. 3 Management designates a representative to monitor contractor safety and health practices, and that individual has authority t o stop contractor practices that expose host or contractor employees to hazards. Management informs contractor and. employees of hazards present at the facility. 4 Management investigates a contractor's safety and health record as one of the biddin2 criteria. 5 The site's safety and health program ensures protection of everyone employed at the worksite, i.e., full-time employees, contractors, temporary and part-time employees. 17 r WORKPLACE ANALYSIS Survey and Hazard Analysis Survey and hazard analysis: An effective, proactive safety and health program will seek to identify and analyze all hazards. In large or complex workplaces, components of such analysis are the comprehensive survey and analyses of job hazards and chan es in conditions Guidelines, c 3 1 1 No system or requirement exists for hazard review of planned/changed/new operations. There is no evidence of a comprehensive survey for safety or health hazards or for routine job hazard analysis. 2 Surveys for violations of standards are conducted by knowledgeable person(s), but only in response to accidents or complaints. The employer has identified principal OSHA standards which apply to the worksite. 3 Protocol, task, and environmental surveys are conducted by knowledgeable person(s) and updated as needed and as required by applicable standards. Current hazard analyses are written (where appropriate) for all high -hazard jobs and processes; analyses are communicated to and understood by affected employees. Hazard analyses are conducted for jobs/tasks/workstations where injury or illnesses have been recorded. 4 Methodical surveys are conducted periodically and drive appropriate corrective action. Initial surveys are conducted by a qualified professional. Current hazard analysis are documented for all work areas and are communicated and available to all the workhorse; knowledgeable persons review all planned/changed/new facilities, processes, materials, orequipment. 5 Regular surveys including documented comprehensive workplace hazard evaluations are conducted by certified safety and health professional or professional engineer, etc. Corrective actin is documented and hazard inventories are updated. Hazard analysis is integrated into the design, development, implementation, and changing of all processes and work practices. 18 P WORKPLACE ANALYSIS Inspection _ Inspection: To identify new or previously missed hazards and failures in hazard controls, an effective safety and health program will include regular site inspections. Guidelines, c 2 ii . 1 I No routine physical inspection of the workplace and a ui ment is conducted. 2 Supervisors dedicate time to observing work practices and other safety and health conditions in work areas where they have responsibility. 3 Competent personnel conduct inspections with appropriate involvement of employees. Items in need of correction are documented. Inspections include compliance with relevant OSHA standards. Time 2eriods for correction are set. 4 Inspections are conducted by specifically trained employees, and all items are corrected promptly and appropriately. Workplace inspections are planned, with key observations or check points defined and results documented. Persons conducting inspections have specific training in hazard identification applicable to the facility. Corrections are documented through follow-up inspections. Results are available to workers 5 Inspections are planned and overseen by certified safety or health professionals. Statistically valid random audits of compliance with all elements of the safety and health program are conducted. Observations are analyzed to evaluate Brogress. WORKPLACE ANALYSIS Hazard Reporting A reliable hazard reporting system enables employees, without fear or reprisal, to notify management of conditions that appear hazardous and to receive timely and appropriate responses. Guidelines, c 2 iii . 1 No formal hazard reporting system exists, or employees are reluctant to report hazards. 2 Employees are instructed to report hazards to management. Supervisors are instructed and are award of a procedure for evaluating and responding to such reports. Employees use the system with no risk of reprisals. 3 A formal system for hazard reporting exists. Employee reports of hazards are documented, corrective action is scheduled, and records maintained. 4 Employees are periodically instructed in hazard identification and reporting procedures. Management conducts surveys of employee observations of hazards to ensure that the system is working. Results are documented. 5 Management responds to reports of hazards in writing within specified time frames. The workforce readily identifies and self -corrects hazards; they are supported b4 management when they do so. 9�- 819 19 r ACCIDENT AND RECORD ANALYSIS Accident Investigation. Accident investigation: An effective program will provide for investigation of accidents and "near miss" incidents, so that their causes, and the means for their prevention, are identified. Guidelines, c 2 iv 1 No investigation of accidents, injuries, near misses, or other incidents is conducted. 2 Some investigation of incidents takes place, but root cause may not be identified, and correction may be inconsistent. Supervisors prepare injury reports for lost time cases. 3 OSHA - 101 is completed for all recordable incidents. Reports are generally prepared with cause identification and corrective measures prescribed. 4 OSHA -recordable incidents are always investigated, and effective prevention is implemented. Reports and recommendations are available to employees. Quality and completeness of investigations are systematically reviewed by trained safety personnel. 5 All loss -producing accidents and "near -misses" are investigated for root causes by teams or individuals that include trained safe!ersonnel and employees. ACCIDENT AND RECORD ANALYSIS Data Analysis Data analysis: An effective program will analyze injury and illness records for indications of sources and locations of hazards, and jobs that experience higher numbers of injuries. By analyzing injury and illness trends over time, patterns with common causes can be identified and prevented. Guidelines, c 2 v 1 Little or no analysis of injury/illness records; records (OSHA 200/101, exposure 1 monitoring) are kept or conducted. 2 Data is collected and analyzed, but not widely used for prevention. OSHA - 101 is completed for all recordable cases. Exposure records and analyses are organized and are available to safe ersonnel. 3 Injury/illness logs and exposure records are kept correctly, are audited by facility personnel, and are essentially accurate and complete. Rates are calculated so as to identify high risk areas and jobs. Workers compensation claim records are analyzed and the results used in the program. Significant analytical findings are used for prevention. 4 Employer can identify the frequent and most severe problem areas, the high risk and job classifications, and any exposures responsible for OSHA recordable cases. Data are fully analyzed and effectively communicated to employees. Illnesslin'u data are audited and certified by a responsible person. 5 All levels of management and the workforce are aware of results of data analyses and resulting preventive activity. External audits of accuracy of injury and illness data, including review al all available data sources are conducted. Scientific analysis of health information, including non -occupational data bases is included where appropriate in the program. 20 96- 819 HAZARD PREVENTION AND CONTROL Hazard Control Hazard Control: Workforce exposure to all current and potential hazards should be prevented or controlled by using engineering controls wherever feasible and appropriate, work practices and administrative controls, and personal protective e ui ment (PPE). Guidelines, c 3 1 1 Hazard control is seriously lacking or absent from the facili . 2 Hazard controls are generally in place, but effectiveness and completeness vary. Serious hazards may still exist. Employer has achieved general compliance with applicable OSHA standards regarding hazards with a significant probability of causing serious physical harm. Hazards that have caused past injuries in the facility have been corrected. 3 Appropriate controls (engineering, work practice, and administrative controls, and PPE) are in place for significant hazards. Some serious hazards may exist. Employer is generally in compliance with voluntary standards, industry practices, and manufacturers, and suppliers' safety recommendations. Documented reviews of needs for machine guarding, energy lockout, ergonomics, materials handling, bloodbome pathogens, confined space, hazard communication, and other generally applicable standards have been conducted. The overall program tolerates occasional deviations 4 Hazard controls are fully in place, and are known and supported by the workforce. Few serious hazards exist. The employer requires strict and complete compliance with all OSHA, consensus, and industry standards and recommendations. All deviations are identified and causes determined. 5 Hazard controls are fully in place and continually improved upon based on workplace experience and general knowledge. Documented reviews of needs are conducted by certified health and safety professionals or professional engineers, etc. 21 r HAZARD PREVENTION AND CONTROL Maintenance Maintenance: An effective safety and health program will provide for facility and equipment maintenance, so that hazardous breakdown are prevented. (Guidelines, (c) 3 ii 1 No preventive maintenance program is in place; break -down maintenance is the rule. 2 There is a preventive maintenance schedule, but it does not cover everything and may be allowed to slide or performance is not documented. Safety devices on machinery and equipment are generally checked before each production shift. 3 A preventive maintenance schedule is implemented for areas where it is most needed; it is followed under normal circumstances. Manufacturers' and industry recommendations and consensus standards for maintenance frequency are complied with. Breakdown repairs for safety related items are expedited. Safety device checks are documented. Ventilation system function is observed enodicall . 4 The employer has effectively implemented a preventive maintenance schedule that applies to all equipment. Facility experience is used to improve safety -related —_preventative maintenance scheduling. 5 There is a comprehensive safety and preventive maintenance program that maximizes equipment reliability. HAZARD PREVENTION AND CONTROL Medical Program An effective safety and health program will include a suitable medical program where it is appropriate for the size and nature of the workplace and its hazards. (Guidelines, (c) 3 iv 1 Employer is unaware of, or unresponsive to medical needs. Required medical surveillance, monitoring, and reporting are absent or inadequate. 2 Required medical surveillance, monitoring, removal, and reporting responsibilities for applicable standards are assigned and carried out, but results may be incomplete or inadequate. 3 Medical surveillance, removal, monitoring, and reporting comply with applicable standards. Employees report early signs/symptoms of job -related injury or illness and receive appmpriate treatment. 4 Health care providers provide follow-up on employee treatment protocols and are involved in hazard identification and control in the workplace. Medical surveillance addresses conditions not covered by specific standards. Employee concerns about medical treatment are documented and responded to. 5 Health care providers are on -site for all production shifts and are involved in hazard identification and training. Health care providers periodically observe the work areas and activities and are fully involved in hazard identification and training. 22 96- 819 EMERGENCY RESPONSE Emergency Preparedness Emergency preparedness: There should be appropriate planning, training/drills, and equipment for response to emergencies. Note: In some facilities the employer plan is to evacuate and call the fire department. In such cases, only applicable items listed below should be considered. Guidelines, c 3 iii and iv 1 1 Little or no effective effort to prepare for emergencies. 2 Emergency response plans for fire, chemical, and weather emergencies as required by 29 CFR 1910.38, 1910.120, or 1926.35 are present. Training is conducted as required by the applicable standard. Some deficiencies may exist. 3 Emergency response plans have been prepared by persons with specific training. Appropriate alarm systems are present. Employees are trained in emergency procedures. The emergency response extends to spills and incidents in routine production. Adequate supply of spill control and PPE appropriate to hazards on site is available. 4 Evacuation drills are conducted no less than annually. The plan is reviewed by a qualified safety and health professional. 5 Designated emergency response team with adequate training is on -site. All potential emergencies have been identified. Plan is reviewed by the local fire department. Plan and performance are reevaluated at least annually and after each significant incident. Procedures for terminating an emergency response condition are clearly defined. EMERGENCY RESPONSE First Aid First aid/emergency care should be readily available to minimize harm if an injury or illness occurs. Guidelines, c 3 iii and iv . 1 Neither on -site nor nearby community aid (e.g., emergency room can be ensured. 2 Either on -site or nearby community aid is available on eve shift. 3 Personnel with appropriate first aid skills commensurate with likely hazards in the workplace and as required by OSHA standards (e.g., 1910.151, 1926.23) are available. Management documents and evaluates response time on a continuing basis. 4 Personnel with certified first aid skills are always available on -site; their level of training is appropriate to the hazards of the work being done. Adequacy of first and is formally reviewed after significant incidents. 5 Personnel trained in advanced first aid and/or emergency medical care are always available on -site. In larger facilities a health care provider is on -site for each production shift. 96 - 819 23 SAFETY AND HEALTH TRAINING . � ` Safety and health training should cover the safety and health responsibilities of all personnel who work at the site or affect its operations. It is most effective when incorporated into other training about performance requirements and job practices. It should include all subjects and areas necessary to address the hazards at the site. Guidelines, b 4 and c 4 . 1 Facility depends on experience and peer training to meet needs. Managers/supervisors demonstrate little or no involvement in safety and health training responsibilities. 2 Some orientation training is given to new hires. Some safety training materials (e.g. pamphlets, posters, videotapes) are available or are used periodically at safety meetings, but there is little or no documentation of training or assessment of worker knowledge in this area. Managers generally demonstrate awareness of safety and health responsibilities, but have limited training themselves or involvement in the site's training program. 3 Training includes OSHA rights and access to information. Training required by applicable standards is provided to all site employees. Supervisors and managers attend training in all subjects provided to employees under their direction. Employees can generally demonstrate the skills/knowledge necessary to perform their jobs safely. Records of training are kept and training is evaluated to ensure that it is effective. 4 Knowledgeable persons conduct safety and health training that is scheduled, assessed, and documented, and addresses all necessary technical topics. Employees are trained to recognize hazards, violations of OSHA standards, and facility practices. Employees are trained to report violations to management. All site employees -- including supervisors and managers --can generally demonstrate preparedness for participation in the overall safety and health program. There are easily retrievable scheduling and recordkee in s stems. 5 Knowledgeable persons conduct safety and health training that is scheduled, assessed, and documented. Training covers all necessary topics and situations, and include all persons working at the site (hourly employees, supervisors, managers, contractors, part-time and temporary employees). Employees participate in creating site -specific training methods and materials. Employees are trained to recognize inadequate responses to reported program violations. Retrievable recordkeeping system program for appropriate retraining, makeup training, and modifications to -training as the result of evaluations. 24 9lip� ��� 1i [A 11/08/1996 06:02 3053772113 WILLIAM R HOUGH CITY OF MIAMI, FLORIDA FINANCE DEPART GENERAL OBLIGATION BONDS OUTSTANDING AS OF SEPTEMBER 30, 19W PRINCIPAL ISSUE MATURITY DESCRIPTION BALANCE DATE DATE BOND ISSUE 9/30196 1011/72 1011197 PUBLIC PARK REC 11115,000 slim 5/1197 SANITART SEWER 6255,000 slim 511/97 FIRE FIGHTING FACILITIE 260,000 511177 511197 POLICE HEADQUARTERS 165,000 SMI77 511197 STORM SEWER IMP 110.000 12111r1 1211197 FIRE FIGHTING FAC 110,000 12J1,77 iVII03 PUBLIC PARK & REC 3,380,000 1211/T7 1211108 HOUSING 940.000 1211176 1211M STREET 8. HIGHWAY 690,000 12I1I78 1211188 SANITARY SEWER 930.000 12/1178 IVII96 FIRE FIGHTING FAC 360,000 12J1/78 1211M STORM SEWER IMP. 1,?20,000 8/1/81 W1101 FIRE FIGHTING FAC 450,000 8/1181 8/1/01 STORM SEWER IMP. 1.130.000 8/1181 811/11 HOUSING 3,120,000 411185 4/11116 FIREFIGHTING 50,000 411185 411128 SANITARY SEWER 885,000 411185 41110 STORM SEWER IMP. 565,000 411185 W1/98 STREET & HIGHWAY 670,000 4/1185 411198 POLICE HEADQUARTERS 535,000 fillies 611/96 POLICE HEADQUARTERS 0 8/1188 8/1/98 STORM SEWER IMPROVEMENT 0 8/1188 6H/98 SANITARY SEWER 0 Wim 511196 STREET7HIGHWAY 0 8/1186 8/1196 G.O.R REFUND.1966 0 1011/86 1011M PULLUTIONCONTROL FAC 0 10MM 101U95 STREET & HIGHWAY 0 W/1187 811/87 POLICE HEADQUARTERS 65,000 811187 811197 SANITARY SEWER 115,000 811197 811197 STREET a HIGHWAY 230,000 8/1/87 811M STORM SEWER IMP 30,000 11h188 81111W POLICE 190.000 11/1/88 1111/98 STORM SEWER IMP. 405,000 11/1188 1111198 SANITARY SEWER 680.000 11/1/e8 1111198 STREET & HIGHWAY 51gp00 1111/88 11/1/98 FIRE FIGHTING 3W.000 4iI159 411M GEN.OeUG, REFUND.1ea7 2.500,000 511/91 511/13 GEN. OBUG. REFUND. 1991 12150Q000 711191 Willi SANITARY SEWER 1.440.000 711191 711111 FIRE FIGHTING 620,000 s/1l92 811/17 STORM SEWER SERIES 1922 9.340.000 12/1/92 1211114 GEN. OULIG. REFUND.1992 89,945,000 911193 7/1113 GEN. OBLIG. REFUND,1903 31,455,000 611196 6/1115 SANITARY SEWER SERIES 1995 22,300,000 TOTAL $ 170.670.0w 96- H9 Pane I PAGE 07 r 11/08/1996 06:02 3053772113 WILLIAM R HOUGH City Ci of Miami • Finance Department Debt Service Requirement Fiscal Year 96-97 I , Description G.O. Bonds Sunshine State Comm. Paper Series 1995 Sunshine State Comm. Paper Series 1994 Sushine State Loan Pool Series 1987 Special Obligation Bonds Series 1995 (FPL Bldg) Pension Bonds Series 1995 Revenue Refunding Bonds. Series 1987 (Conf. & Conv.) Revenue Refunding Bonds Series 1992 Sunshine State Comm. Paper Series 1995 . Sunshine State Comm. Paper Series 1995 Sunshine State Comm. Paper Series 1995 Sunshine State Secondary Loan Poor Special Obligation Bonds Series 1994 Sunshine State Goan Pool Series 1987 Sunshine State Goan PcKA Series 1987' Community Development Bonds Series 1990 Dept of HUD Section 108 Loan Revenue Refunding Bonds Series 1987 (Conf. & Conv.) Spec. Oblig. Bonds Series 1989 Guaranteed enti. Spec.Oblig.Housing Bonds Series 1986 A Rental Revenue Bonds(US.GOV 7) Total 1. PAGE 06 Amount Funding Source $ 22,902,380 Ad Valorem Taxes 917.595 Utlility Service Tax 3.118,675 Utlility Service Tax 966.645 Utiility Service Tax 1,271,855 Ullility Service Tax 5.807,635 Utlility Service Tax 3,351.458 Utlility Service Tax 984,600 Utlility Service Tax 1.269,405 Orange Bowl Revenue 162,CW Migmartna Revenue 81.000 • Boatyard Revenue 304,000 Golf Course Revenue 1,526,091 Internal Service Fund Budget 927.656 Dinner Key Marina Revenue 164,501 Coconut Grove Exhibition Revenue 547.088 Ad Valorem 7axesIS300,000 Guamt Emit 420,428 Ad Valorem Taxes 2,773,307 Convention Center Revenues 608.737 State Revenue Sharing 408.712 BellSouth Franchise Fee 2,595,000 Lease Payment Fed. Gov. ' $ 51,107,966 96- 819 �'r 11/08/1996 06:02 3053772113 Mr. Merrett Stietheim November 8, 19% Page 4 WILLIAM R HOUGH PAGE 05 Both Moody's and Standard & Poors, bond rating agencies, have been provided with extensive information regarding the City's current budgetary situation, current cash Bow projections and anticipated short term and tong term solutions. We have also provided information to certain bond 'ensurers of the City's outstanding debt and to the Sunshine State Financing Commission which is another source of funding of capital projects for the City. These agencies and institutions will require timely financial updates. We suggest that the Manager appoint comeone within the City. preferably the new Finance Director, to establish a recurring reporting practice to such entities of the progress the City is maldng in the adoption and implementation of its recovery plan. RM:pb Enclosure r 11/08/1996 06:02 3053772113 WILLIAM R HOUGH PAGE 04 Mr. Derrell Stierheim November 8, 1996 Page 3 Given that the City has the Series 1989 and a portion of the Series 1990 bonds secured by the Guaranteed Entitlement component of the State Revenue Sharing, the debt service component received in this advance payment from the State should be segregated in the debt service fund outside of the pooled Cash account. We have reviewed a number of the City outstanding bond issues to determine if there are any savings which could be achieved by restructuring or refinancing such obligations. We have identified three transactions with present value savings of approximately $1.4 million which could be available to fund current year projects. As stated previously, we do not believe that the City is in a position at this time to eater into the capital markets to do a publicly offered financing. Such savings will fluctuate with changes in interest rates. The specific transactions are as follow: Upfwnt Ement Value vi $4,290,000 Special Obligation $296,904 Bond Series 1996A $65,271,325 Special Revenue 690,721 Refunding Bonds Series 1987 $6,500,000 Guaranteed 435_791 Entitlement Revenue Bonds, Series 1969 We have also identified several general obligation issues which could be restructured at no cost to the City to reduce debt service over the next few years. Such restructuring would reduce the general obligation debt service tax mileage but would not generate any new revenues to the City. With respect to the City's obligation to the capital market, Mr. Howard Whitaker, partner of Greenberg, Traurig has agreed to research and to draft appropriate disclosure information to the Nationally Recognized Municipal Securities Information Depositories. As of the date of this report, Mr. Whitaker has not yet received the information he requested from the City's Treasury Department to prepare whatever disclosure information he determines appropriate in light of the City's bond documents, Continuing Disclosure Agreements, the financial conditions of the City, and the City's recent downgrading by both Moody's and Standard & Poors. 96- `S19 11/08/1996 06:02 3053772113 WILLIAM R HOUGH PAGE 03 Mr. Merrett Steierheim November 9, 19% Page 2 the use of cash in the Debt Service Funds in the first half of this year without achieving a balanced budget, could result in the City's defaulting on its debt obligation later this year. The enclosed schedule of general obligation debt service reflects total principal and interest payments for the year of $23 million. Of this amount, approximately $11 million will be paid between April and August, 1997. 1f these bonds are not properly segregated as such ad valorem taxes are collected from the Dade County Tax Collector, they will be deposited in the pooled cash account and could be disbursed inappropriately prior to the maturity datcs commencing in April. We bave also requested a schedule reflecting the monthly debt service obligations for the non general obligation debt service for the currant fiscal year. That schedule has not yet been provided by the City's Treasury DepartmeM however, the same theory supports the needs to segregate the debt service fund outside of the pooled cash. As previously stated, approximately $16.5 mullion of debt service for this current fiscal year will be funded from the Utility Service Tax. The City's adopted budget relating to the Utility Service Tax Special Revenue Fund for the current fiscal year reflects the following distribution of Utility Service Tax of such bonds: General Fund $17,555,312 Debt Service 8,962,730 Enterprise 4,181,819 Internal Service fi.273,217 Total S3. g:=??$ As these 'funds are collected on a monthly basis, they sbould be deposited on a pro rata basis to the respective funds listed above. We have been told that portions of the Utility Service Tax which flows into the Enterprise and Internal Service Fund also comprise the balance of the S 16.5 million contributed from the Utility Service Tax. The City has already received $22,443,568 from the State of Florida which reflects the funds which the City would normally receive on a moothly basis from October, 1996 through June, 1997. This advance from the State consists of the following: State Revenue Sharing $5,722,104 Optional Gas Tax 4,392,492 Half Cent Sale Tax 12.328-M Total w 44 95 ; 819 r 11/08/1996 06:02 3053772113 WILLIAM R HOUGH PAGE 02 William iHouth &U 100 SOUTHEAST SECOND STREET SUITE 2800 MIAMI, FLORIDA 33131.2148 (3m) 5774M FAX: (306) 377.2113 MEMORANDUM TO: Merrett Stierheim FROM: Dick Moutalbano DATE: November 8, 1996 RE: Debt Restructuring Task Force Report ;Z., :_I.4 It is the recommendation of the Task Force that the City immediately establish segregated Debt Service Funds to be held by outside trustees and not to be included within the City's pooled cash. We have also identified potential debt service savings from restructuring specific outstanding bonds. Such savings, however, cannot be achieved until the City stabilizes its financial condition and has completed its audited financial statement for the fiscal year ended September 30, 1996. We also recommend that the City immediately prepare a disclosure statement which should be submitted to the Nationally Recognized Municipal Securities Information Depositories (NWSED). We have reviewed the City's outstanding debt and the accompanying schedule which reflects the City's total debt service for the current fiscal year which totals approximately $51.1 million. Of this amouct, approximately $23 million is funded from general obligation ad valorem millage and $16.4 million is funded f m the Utility Service Tax. The remaining $11 million is funded from a number of revenue sources which are described in the attachment. We are concerned that at least $1.5 million in debt service has not been properly provided for since it is funded from the Internal Service Fund which currently operates at a deficit. There are a number of other transactions which are supported by enterprise revenues which may be at risk if the net revenues of such enterprise funds are insufficient to meet debt service requirements. The majority of the City's bond resolution provide for the City to deposit by the 25th of each month one -sixth of the interest becoming due on the next semi-annual interest payment date and one- twelfih of the next annual pruicipal payment. Given the City's past practice of commingling all revenues in the pooled cash account, the City has had the opportunity to utilize debt service funds for operational and capital requirements and not appropriately funding the Debt Service Funds in accordance with the legal documents. Given the magnitude of the City's overall projected cash deficit for this year, STATE. COUNTY AND MUNICIPAL BONDS 96- 819 t4a:. 61 SUee11 C" OF SMAML FLOR70A FIRANCEOEPARTMEKT OENERALOaUGATION SONOa PROJECTED PAYMENTS FISCAL YEAR 1007 AESi�t2214t1 1!ffi 1��p9�1��Le��� i�`@wy9w�Lr,� i ay aifitz WL A im im IOYZ luz 119Z PRIICPAL ,, IRTER 6T ..Q6ir6147e0,,000.00 3TOTALS WI0SOWA a�1i M2O 1T3060,T00- 2r474006 O3p 4aiU47I 1,0d00m T .-- 00i000Ar .3n0 1100..775 J0 404 34126 181 .O5b10,,047028.00 Pole i aQ '. F-s City of Miami Parks and Recreation Department Management Review Task Force Presented to: Merrett R. Stierheim, City Manager November 4, 1996 Prepared by: Larry Adams - Team Leader Gorman Daniels Ramon Ferrer Raymond Gallardo Leland Hunter 96= 819 si I RECOMMENDATIONS a'' r JinanciaC l &d ptarV __Ana1V6i6 Ja6h Jorce C� its o/ �iami j November 12, 1996 Merrett R. Stierheim City Manager City of Miami Re:, Report by Financial / Budgetary Analysis Task Force Dear Mr. Stierheim: As requested, the Financial / Budgetary Task Force has reviewed the charge it was given by your office. The Task Force has performed analysis on selected financial data furnished to it and held discussions with City of Miami staff in its efforts to fulfill its role. It should be noted that there was no attempt to audit financial information per se- that is, financial information furnished to the Task Force was accepted at face value. j Moreover, additional information obtained directly from staff personnel was also received and used without undergoing investigation. The Task Force did, however, question and investigate data or information which the Task Force felt warranted such attention. The financial statements for the City of Miami have not been finalized for the 1996 fiscal year and won't be for some time. Financial data presented is based on recorded activity plus estimates by staff personnel of the more significant year year-end accounting accruals necessary to close the year. APPROACH The Task Force obtained preliminary trial balances for the general and non - general funds and assembled them in the combined format used for annual reporting by the City. Fund balances (surplus / deficits) were reconciled to prior year end balances. Interfund totals and transfers were balanced. Finally, we tried to identify and include significant entries needed for year end close-out accounting. FINDINGS (1) Analyze al/ City Operating funds and assess extent of deficits in non -general funds. Based on procedures described above, it appears the following amounts are representative of the 1996 fiscal year financial results and year-end fund balances - (in thousands) 10101/95 Fund 09/30/96 Fund Surplus Transfers 1996 Operating Surplus Generic Fund Type Notes (Deficit) In (Out) Surplus (Deficit) (Deficit) General 26,659 (5,596) (34,080) (13,017) Special Revenue 5,008 (26,776) 28,013 6,245 Debt Service 5,636 2,839 (2,592) 5,883 Capital Project 48,823 21,633 (17,619) 52,837 Enterprise a 17,029 6,195 (4,807) 18,417 Internal Service (95,328) 1,951 (16,981) (110,358) Trust & Agency b, d 872,975 (246) 45,240 917,969 General Fixed Assets c 0 0 0 0 General Long - Term Debt c 0 0 0 0 Total 880,802 0 (2,826) 877,976 Notes: a- The Enterprise Fund has several operating accounts which are restricted use funds and as such are not to be counted towards the City's surplus. Restricted funds include those managed by Off -Street Parking, the Convention Center, and Gusman Theater. To get a clear picture of the deficit / surplus in these operating accounts, revenue needs to be segregated from the Enterprise Fund. b- The pension fund's operations, (Trust and Agency Fund) and the G & O Enterprise Fund are administered by a trustee. Financial activity from the trustee was not available for review. For purposes of the report, the pension portion of the fund was assumed to be revenue and surplus neutral c- The General Fixed Assets and the General Long -Term Debt Funds were not relevant to this analysis and therefore excluded from the table. d- Much confusion exists over an item, approximating $24 million, which represents fiscal year 1995 pension expense. Although it appears in the 1995 CAFR report, we could not ascertain its effect or treatment on the 1996 operating surplus. While the amounts in total appear to be indicative of the 1995 -1996 financial activity and balances, it is possible that there may be significant inter -fund transfer activity yet to record. Such activity, because it is inter -fund, however would have no effect on the 9� 819 x '�Y overall total, but may have significant effects on individual generic fund ending balances. Also, it should be pointed out that the Trust and Agency Fund includes approximately $72,000,000 in revenues associated with proceeds. received from Non Ad Valorem Revenue Bonds issued in December, 1995. It should be noted that - economically speaking - such reporting treatment should not be included in evaluating the financial condition of the City of Miami. Since this transaction is (1) non -recurring and (2) ignores the immediate recognition of the financial liability by, in effect, deferring the offsetting expenditures to future periods, receipt of the bond proceeds should not be considered in evaluating the long-term financial structure or viability of the affected funds. Such proceeds are primarily responsible for the $45,240,000 operating surplus shown in the Trust and Agency Fund - again, non -recurring because of the bond proceeds received. Moreover, pension expense for 1996 ($32,817,000) is currently reflected in the Trust and Agency Fund and is covered by the $72,000,000 bond issuance. However, it appears that such expense more appropriately should be reflected in the current fund where other employee expenses are reported. Such treatment would increase the operating deficit in the General Fund by $32,817,000 and would be more indicative of the extent of the general operating deficiencies in the General Fund. The 1996 financial activity includes non -recurring activity whereby the General Fund includes $18,000,000 in transfers out to the Capital Project Fund in connection with the Miami City Administration Building. We were not able, in the time allotted, to assess the ongoing proper inter -fund transfer activity which is critical in evaluating the magnitude of any structural surplus or deficiencies of any individual fund. Such analysis would be critical in determining the long-term financial health of the City and any of its funds. (2) Evaluate For Year 1996 - 1997 operating budget and all revenue and expenditure assumptions. The expenditure side of the budget is heavily tied to payroll and related costs. Therefore, absent any significant changes in the number of employees or level of compensation / pension / related payroll costs, it appears that the expenditures budget should be fairly reliable. In that context, discussions we had with staff did not yield any significant revenue concerns other than those previously reported in the document "Elements of Fiscal Year 1995 - 96 and 1996 - 97 Funding Gaps" which was previously circulated. This document shows projected revenue shortfalls by category. 96- 819 We recommend however, that an analysis be made for each major revenue category showing the following: (1) Revenue category (2) Budget risk assessment- based on confidence or reliability level, volatility, etc. This could be a useful tool for monitoring the budget and adjusting operations during the year. 3) Identify, to the extent possible, value of deficits in restricted use funds which require repayment. Of necessity,. this step would have to be prepared only after all adjustments and year end transfers and accruals have been made. It is premature to comment on these circumstances in the absence of such information. (4) Formulate recommendation to revenue collection programs for delinquent accounts. Analysis was performed on the delinquent accounts receivable held by the City. While the amounts are significant ($6.6 million*) in the aggregate, there did not appear to be any individually significant balances. The City follows a routine of converting many of the balances to tax liens and selling them at public auction. Remaining balances are not significant. It appears that some balances arise because the City's processes and procedures result in billings which are not proper (relocated or discontinued businesses, etc.). Some process should be developed to minimize or eliminate such false billings. The City may also want to consider the introduction of an amnesty period followed by more vigilant enforcement and/or use of an outside collection agency. * Per "Miscellaneous Accounts as of November 7, 1996 by Bill Type Report" (5) Identify areas of and extent of commingling and misuses of funds. The City of Miami employs a "pooled cash" concept under which cash from all funds is collected and disbursed from co -mingled cash accounts regardless of where the cash was originally sourced. This approach is in lieu of maintaining separate and distinct bank accounts for each fund. This approach not only simplifies cash management operations, but offers the opportunity to maximize the investment earnings. There is a discipline, however, required in such an environment to insure that funds are not spent simply because pooled cash is available. To do so results in the functional equivalence of inter -fund borrowings, which may or may not be proper. Such transactions are manifested as negative "equity in pooled cash positions" by the 9£- 819 rA 0 individual funds in the pooled cash account. Some of these are present (before year- end transfers and accrual entries) in sizable amounts as of the fiscal year end. Discipline called for in such an environment should include high level approval plus plans/projections for subsequent repayment or correction. It is noted that several recommendations for future financial management initiatives are being proposed. It is paramount that such efforts include the timely ongoing use of monthly reports showing the comparison of budget versus actual results. - 9f9 r CONCLUSION We trust this report will be useful to the City of Miami. We acknowledge the help and assistance of City of Miami Staff personnel in preparing this report. Respectfully submitted .%J V Arthur W. Heggen Chairperson Task Force Members Loaned Executives Arthur W. Heggen, Chairperson Rachel Baum Orlando R. Cruz, Jr. City of Miami Pete Chircut Dipak Parekh Phil Luney Mike Lavin - Staff Liaison Assistant Michelle Wagner 967 819 Low Affiliation American Bankers Insurance Group Metro Dade County First Union National Bank American Bankers Insurance Group li 0 r CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM Merrett R. Stierheim November 13,1996 FILE DATE To : City Manager � S`^T' SUBJECT Jose Rodriguez, KPMG Peat Marwtck'LI:. Lynn Hambright, Price Waterhouse el — FROM v "�• Report from CIP Task Force Grant Sheehan, City of Miami,�/ : Pete Chlrcut, City of Miami REFERENCES: Dipakray Parekh, City of Miami% Elbert L. Waters, City of Miami ENCLOSURES CIP Task Force The Capital Improvement Projects ("CIP") Task Force is please to present its findings with respect to its analysis as to the status of CIP projects and related estimated expenditures and fundings, as follows: Background The CIP Task Force was assembled in order to assist the City of Miami ( the "City" ) in an evaluation of its current position with respects to CIP projects which have been approved by the City Commission and are in various stages of development and/or completion. The Task Force included members from various departments within the City and two loaned executives from international public accounting and consulting firms. The evaluation of CIP focused on the following: M Identification of approved projects; ■ Evaluation of funding sources; and ■ Estimating the unfunded liability for CIP. Attached to this memorandum as Exhibit I is a detailed analysis which summarizes these three areas, as identified above. Process In identifying projects we categorized the projects as follows: ■ Ongoing projects with expenses paid from Pool Cash; ■ Ongoing projects with outstanding encumbrances; or ■ Projects to be completed in fiscal '97,'98 or'99. Merrett R. Stierheim City Manager November 13, 1996 Page 2 The various departments of the City who are responsible for the respective projects were contacted and asked to verify the information provided for each individual CIP project. The verification by the various department included: ® Confirmation of project estimated dollar value; ® Estimation of fiscal year in which the funds to complete the project are needed; and ■ The availability of alternative funding sources, if any. With respect funding, the Treasury, Finance and Budget departments work together and identified funding availability, as follows: ® Funding sources allocated in place and certain; or • Funding is questionable. Results Fiscal Fiscal Fiscal 1997 1998 1999 Total ( in millions ) Estimated cash requirements for projects with questionable funding $22.8 $17.6 $3.5 $43.9 Estimated cash requirements in place funding 31.8 2.8 0.5 ' 35.1 $ 54.8 $20.4 $4.0 $79.0 The Finance Department of the City has estimated the equity in pool cash of the CIP fund to be approximately $45.5 million at September 30,1996. Of the estimated $45.5 million approximately $40.5 million is due from other funds of the City ( the amount due from other funds at September 30,1995, as indicated in the City's audited financial statements was approximately $43.0 million. In addition, it is estimated that the City will receive $10.4 million from the Stormwater Utility Fund and the Local Option Gas Tax in addition funding for the projects enumerated in Exhibit I attached, through fiscal 1999. Merrett R. Stierheim City Manager November 13, 1996 Page 3 If all amounts due from other funds of the City are collected by the CIP fund, the estimated cash deficit through September 30,1999 is approximately $23.0 million. In addition we received input from various departments on projects which are currently not in the system, but need consideration for funding over the next three years, as follows: Fiscal Fiscal Fiscal New Projects Budget 1997 1998 1999 .( in million ) Renovations of Fire Stations $ 1.38 $ 0.25 $ 0.25 $ 0.25 James L. Knight Ctr. A/C - Roof 2.00 2.00 Orange Bowl ramps & waterproofing 2.50 0.35 0.35 0.35 Marine Stadium boat rack 0.17 0.17 M.R.0 parking lots 0.18 0.18 M.R.0 parking garage 0.13 0.13 Fairway storm sewers 1.50 1.50 Miami River Improvements 0.50 0.50 $ 8.340 $ 3.565 $ 0.600 $ 2.100 The committee is grateful for the excellent cooperation received from City employees and are available to discuss these findings at your convenience. il Cityof Miaml DRAFT 11/13/96 2:16 PM SHADING IN BOLD INDICATES FUNDING IN PLACE PROJECTS WITH QUESTIONABLE FUNDING G.J.S 1 1 1 Merrett R. Stierheim City Manager November 13, 1996 Page 3 If all amounts due from other funds of the City are collected by the CIP fund, the estimated cash deficit through September 30,1999 is approximately $23.0 million. In addition we received input from various departments on projects which are currently not in the system, but need consideration for funding over the next three years, as follows: Fiscal Fiscal Fiscal New Projects Budget 1997 1998 1999 .( in million ) Renovations of Fire Stations $ 1.38 $ 0.25 $ 0.25 $ 0.25 James L. Knight Ctr. A/C - Roof 2.00 2.00 Orange Bowl ramps & waterproofing 2.50 0.35 0.35 0.35 Marine Stadium boat rack 0.17 0.17 M.R.0 parking lots 0.18 0.18 M.R.0 parking garage 0.13 0.13 Fairway storm sewers 1.50 1.50 Miami River Improvements 0.50 0.50 $ 8.340 $ 3.565 $ 0.600 $ 2.100 The committee is grateful for the excellent cooperation received from City employees and are available to discuss these findings at your convenience. CityofMiami DRAFT 11/13/96 SHADING IN BOLD INDICATES FUNDING IN PLACE PROJECTS WITH QUESTIONABLE FUNDING 2:16 PM G.J.S CIPO PROJECT BUDGET PAID OUT POOLED CASH FUND 32 - COBS FEMA ALLOCATED FUNDING BALANCE TORE COMPLETED FUNDED aRiroww TO BE COMPLETED FUNDED «.s,a, .. TO BE COMPLETED FUNDED OUTSTANDING ENCUMBRANCES 1997 1998 1999 i876,561 $416.270 $459,298 ' S42,949 $576,968 11009 UNDERGROUND STORAGE TANK RETROFITTING $1.656.300 $06 $2,018.619 $2,013.619 $1,018,619 $1,000,000 311D76 UPGRADE MAINFRAME COMPUTER EB,617,000 31,031.225 $1,494,676 $287460 f1,207,128 300,830 S397,236 31101a RELOCATION OF MUNICIPAL SHOP OPEKATIUN3j E2,300.900 4200.682 $698.000 $690,000 $210,144 $698,000 311027 FINANCIAL INFORMATION SYSTEM. $972.000 $400,000 E700.000 $Iao.000 311031 INTEORATEDTEXT&IMB,SYST. $100,00D - $19,000 $19,000 $19,000 311033 CITY CLERK OFFICE MICRO FILM 319,000 $1,652,640 $1,652,640 $671,6T2 $1,863,640 311042. F.P.L. BUILDING ACQUISITION "118,293.800 $1,461.2551 S1,461,165 5111,50$ . $1,461,2651 311043 1 NETWORK INFRASTRUCTURE AND ROBOTICS $3,600.000 SO $1,600,000 $1,500.000 f0 ]11044 IMICRO COMPUTERS PERIPHERALS 6 SOFTHWAR S1,600,000 $994,167 5894,]67 5994,167 311045 MICROCOMPS. PERIPHS SOFTWARE & SERV $2.600,000 03,500,000 $3,500,900 $3,500.0001 311046 MICROCOMPS. PERIPHS SOFTWARE i SERV $3,600,000 $184.000 : $184,000 S184,000 311006 WATSON ISLAND WATER MAIN DSR. $184,000 $238,702 $238,702 $230,701 311$08 MIAMIYACHT CLUB D3R. 3069 $330,000 $203,775 $49,567 $49,567 $78,690 $49.567 311521 HURRICANE ANDREW TRUST FUND -RICKENDA $95.000 $13,286 $20,664 $20.664 $1,340 $28.054 311823 HURRICANE ANDREW TRUST FUND -PIONEER CL E208,S00 $6,950 $67,100 $67,109 $57,100 3111926 CITY HALL EXT. PAINTING $571.000 $467,931 $467,931 $467,9]1 E4B7.911 312010 POLICE MOBIL DIGITAL TERMINAL REFINEMENT. $1.724,000 $629.946 $626,946 $61.302 - $623,945 312015 POLICE FACILITY EXPANSION 6 REMODELING $1.074.000 i178,638 $1TS,S36 $9,226 $178,630 312018 POLICE EQUIPMENT ACQUISITION -FY'S9-FYVO 111."9,600 $5GD.DDD $600,000 SO 312020 POLICE E-911 BACKUP SITE $195,800 $106,600 $39,000 $195,600 312023 CENTRAL POLICE STA IMPACT FEE $166,000 $31.000 $11.800 $19,200 $31,000 3t2026 MOBILE DIG. TERMINALS $1,015,000 $262,123 $26$123 $245,750 �4282,123 312029 CONSOLIDATION OF POUCEFFiRE COMMUNICATI $826,000 $262,123 $125,000 " - $125.000 $0 312030 POLICE PARKING GARAGE $125,000 $6,000,000 S3,000,000 $3,000,000 $4.947,339 $6,000,000 312032 MOBIL DIGITAL COMPUTERS -PHASE 1. ORD. 113 $0.000,000 35.000.000 38,000,000 $8.000.000 312033 MOBIL DIGITAL COMPUTER P-11 $8.000,000 $1,000.000 - $1,000,00G 42,000.000 . $2,000,000 $2,240.969 $3,000.000 312034 UPGRADE EMER, GENERATORS 6 RELATED EQU - $3.000,000 $447,602 $0,241 $6,241 f8,1d1 $4.376 313657 FIRE STATION NO. 3-LOC 45-022 $12.500 313658 FIRE STATION NO. 9A-LOC 45428 462,800 $4.549 $23.342 $21,342 $23,342 $79 $79 $79 49,500 313731 FIRE MAINTENANCE SHOP -LOC 45-039 E30.800 $609,666 $609.566 $32,320 $809,668 - 321038 HAVANA LAND ACQUISITION $1.616,000 $239,893 $198,711 $41.182 1.405 S219,891 $37,306 322059 OVERTOWN SHOPPING CENTER RENOVATIOMS $239.393 $100,000 $100,000 f10D,000 322060 MANUEL ARTIME CENTER RENOV. $100.000 $302.334 $802.834 $502,834 322061 TOWER THEATER REHAB. $802.800 $174.970 $43,370 $131,900 $37.164 $179.970 331042 LUMMUS PARK REDEVELOPMENT/ CD87002013' E691,900 $127,031 $207.800 $207,800 $26.600 $207.800 131070 ATHAUE RANGE PARK REHABILITATION -ORD. 1 $243,500 $22,916 $22.915 $15,010 $22,9m 331305 SAYFRONT PARK REDEV: SOUTH END AND CHO $1,639,600 f0 $131,367 $131,367 $33,432 $131,367 3313D7 CITYWIDERALLFIELDRENOVATIONS-ORD.1035 32t7,600 $377,634 i301,771 $69.903 $1,6/4 3777,634 331309 ALLAPA7 TA" COM STOCK PARK $600,000 $186,244 548,654 39,000 f79,651 S48,fi6t 331312 LEGION PARK RENOVATION $282,500 $24.438 $40,656 $40.645 $4%1 331313 MORNINGSIDE PARK RENOVATIONS $602,000 $12,678 f45,701 $173,033 $144.200 $23,236 $2,189 $173,035 $31315 VIRRICK PARK RENOVATIONS-ORD. 10364 E423,800 $169,735 $169,735 $169.735 $12.962 331336 CITYWIDE IRRIGATION PROJECTS -ORD. 10364 $400.000 $94.051 $84,061 $00,000 $94.051 S31241 GIBSON PARK IMPROVEMENTS-ORD. ID3641 CO $300,000 $40,313 $40,313 $45.313 f37,4111 3313" REEVES PARK RENOVATIONS-ORD. 10364 $150.000 S4,260 $26,000 $25,000 $25,000 331345 SIMPSON PARK RENOVATION -ORD, 10412 Sea, 000 *12,024 $90,377 $1.121,009 $1,121,009 $1,121,009 331349 14ADLEY PARK- POOL REPLACEMENT $3.100.000 $99D,519 E9A16 E264,068 E261,04d f16,74$ E258,330 77U6T DORSEY PARK RENOVATIONS/CD6 706402 34,661,000 ES2.794 $19 S118,261 $135,261 Et18,264 331369 PEACOCK PARK SITE IMPROVEMENTS $315.000 434.552 S1p,952 $18,962 i4,911 - $1S,962 331360 SHENANDOAH PARK IMPROVEMENTS-ORD. 110 -$50,000 511,250 $108,676 $183,676 $16,339 $188,676 331361 EATON PARK IMPROVEMENTS-ORD. 11094/CDS $249.000 $1.720 $12,107 $22,107 $18,566 - $22,107 331363 TOWN PARK RENOVATIONS -ORO-I'lowcoo70 $60,000 $13,034 5279,616 $279,526 $55,869 $279,526 SStS54 TACOLCY PARK C.O. IMPROVEMENTS COT02101 $415,000 463,030 $13,076 $73,076 $73,076 43,642 331332 COCONUT GROVE MINI PARK RENOVATION-C.D. $110,000 $46,411 $129,500 $129,500 $120.000 - - 4129.500 331394 GIBSON PARK C.D. IMPROVEMENTS CD705401 $129.500 $600,953 $600.953 ifi00,953 f8,460 331385 JOSE MARTI PARK DEVELOPMENT -PHASE 111- f812,100 E26,278 E6i,161 38476t 554,355 $41039 "- 331357 LUMMUS PARK ADULT CENTER IMPROVEMENTS f55,000 S5,703 9. 7..: .-,. .. ..__ _._ _... . -_.. .^... .. �. �_ �._..- ._ .. �_.. ._.-_. _. J :L_-if3�Da �,W;t_"EISb 200 ...` _ a -._ _. i133.9GC ]31349 HEEYES PARKC D. IMFRuvcMEN,':6�CD7Gs(us;ya:yp{i7>:.1G4 .. :::.�'•••• g •"-sz4co aJ.,S _. .: ;:..c. 6:';:,� _. .. 61 J r TO: Honorable Mayor and Members of the City Commission FROM: Merrett Stierb City Manager RECOMMENDATION: CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM DATE: FILE: SUBJECT: Resolution Amending 1995-1998 Labor Agreement Between the City of Miami and AFSCME, Local 1907 REFERENCES: ENCLOSURES: It is recommended that the City Commission adopt the attached Resolution authorizing the execution of the attached Memorandum of Understanding by the City Manager amending the labor agreement between the City of Miami and the employee organization known as the American Federation of State, County and Municipal Employees, Local 1907 (AFSCME) for the period of October 1, 1995 through September 30, 1998 in accordance with the terms and conditions as set forth herein. BACKGROUND: In an effort to' address the City's fiscal crisis the City and the American Federation of State, County and Municipal Employees, Local 1907 (AFSCME) entered into discussions to identify possible concessions that would assist the City in its current fiscal crisis. The parties after meeting on several occasions were able to reach an agreement and have entered into a Memorandum of Understanding addressing certain concessions agreed to by the AFSCME. These concessions include the deferral of a four (4%) percent wage increase, previously due in January 1997, to September 1998; and a deferral on the issuance of city uniforms for Fiscal Year 1997. As a result of these agreed upon changes the parties have agreed that there will be no reopener on Wages in 1997 as currently specified in the labor agreement. AFSCME will also support the City in utilizing Federal forfeiture funds/fines to match City dollars to fund special projects with the Miami Police Department and will withdraw a grievance recently filed in connection with the City requiring employees to turn in assigned 24 hour vehicles. The Memorandum of Understanding also provides for an Oversight Hiring Committee. This Committee will consist of three (3) members, a union representative, a management representative and a neutral member. It will be the responsibility of the Committee to review departmental requests to hire new employees and make recommendations to the City Manager. The City Manager retains the authority to authorize or disapprove the filling of a position. 96- 819 Honorable Mayor and Members of the City Commission Page 2 of 2 In recognition of the AFSCME's cooperation in assisting the City to address its fiscal crisis the Memorandum of Understanding provides that the City and the City Commission will fulfill its obligations by adopting the necessary revenue enhancement measures and cost containment measures as set forth in my Fair Share Matrix dated October 7, 1996. The City has also agreed to provide a bi-monthly status report which will indicate the savings and actions taken by the City and the employees to meet the City's deficit. Should either the IAFF or FOP bargaining unit employees receive the 4% wage increase prior to 1998 or if the LIUNA bargaining unit employees receive the wage bonus then the Memorandum of Understanding will not be effective on the AFSCME. It is estimated that the concessions agreed to by the AFSCME will save the City over four (4) million dollars over Fiscal Years 1996-1997 and 1997-1998. r MEMORANDUM OF UNDERSTANDING AFSCME, LOCAL 1907 This Memorandum of Understanding is entered into between the City of Miami and the Miami General Employees (AFSCME) Local 1907 as it pertains to the future hiring of City employees, City obligations and modifications of the 1995-1998 labor agreement between the City of Miami and AFSCME, Local 1907. Labor Agreement Modifications r (1) Effective upon ratification by the -AFSCME bargaining unit and the City Commission, the four percent (4%) across-the-board salary increase effective the first full pay period following January 1, 1997, as specified in the 1995-1998 labor agreement, shall be changed for receipt beginning the first full pay period following September 1, 1998. (2) Effective upon ratification of this Agreement it is agreed by the parties that AFSCME bargaining unit members will not be issued city uniforms through September 30, 1997. (3) AFSCME and the City of Miami agree that the reopener provision on Wages, as specified in Article 53 - Term of Agreement, is hereby deleted. (4) AFSCME, Local 1907 hereby agrees to drop Grievance 4-96 effective upon ratification of this Memorandum of Understanding by the AFSCME bargaining unit and the City Commission. Federal Forfeiture Funds/Fines AFSCME fully supports utilizing Federal forfeiture funds/fines to match City dollars to fund special projects within the Miami Police Department which will reduce the City's budget for the department by $500,000 annually. 1111196 1:36 PM 96- 819 - Oversight Hiring Committee In an effort to address the fiscal crisis facing the City of Miami it is recognized by the parties that the number of new hires for the City of Miami must be kept to a minimum. The parties therefore agree to the establishment of an "Oversight Hiring Committee". The "Oversight Hiring Committee" shall be composed of three (3) members: a union representative, a management representative appointed by the City Manager, and a neutral member selected jointly by the management representative and the unions (collectively). Each of the City's four unions shall select a union representative, each of whom shall sit on the Committee on a rotating basis, provided that the position(s) to be considered by the Committee are not within the seated representatives' union, in which event the next union representative on the rotation schedule shall be seated. The Committee shall meet on an ad hoc basis. When a department requests authorization to hire a new employee the Committee shall meet to review justification of such request. Upon review of the hire request the Committee will make a recommendation in writing to the City Manager stating their reasons for approval or disapproval of the hiring request. The City Manager will take into strong consideration the recommendation of the Committee, however, the City Manager retains the final authority to authorize or disapprove the hiring of a new employee. Determinations by the City Manager to authorize the hiring of a new employee are. not subject to appeal through the grievance procedure, civil service board, or outside forum. Nor does the Committee have the right to review the hiring of new employees directed by the City Commission. Unless otherwise agreed to by the parties hereto the "Oversight Hiring Committee" will cease to exist as of September 30, 1998. 1111196 1:36 PM 819 i i City Obligations In recognition of the AFSCME's cooperation in assisting the City of Miami to address its fiscal crisis the City agrees to adopt necessary revenue enhancement measures and cost containment measures as set forth in the City Manager's Fair Share Matrix dated October 7, 1996. In other words AFSCME is willing to meet its fair share, as specified within this agreement, provided the City Commission and City Manager fulfill its obligations as set forth in this Agreement. Beginning January 1, 1997 the City Manager will issue a bi-monthly status report which will indicate the savings and actions taken by the City and the employees to meet the City's deficit. The bi-monthly status report will be -distributed to City departments and employees. This Agreement shall not be effective on the AFSCME, if the IAFF or FOP bargaining unit employees receive the 4% across the board increase prior to September 1998 or if the LIUNA bargaining unit employees receive the wage bonus during the remainder of their current labor agreement.. AFSCME, on behalf of its bargaining unit members, and the City of Miami hereby agree to the provisions of this Memorandum of Understanding. MIAMI GENERAL EMPLOYEES ON THE PART OF THE CITE' OF AFSCME, LOCAL 1907, AFL-CIO MIAMI, MIAMI, FLORIDA Charles Cox Merrett Stierheim President City Manager Date Date 11/12/96 3:07 PM CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM TO: Honorable Mayor and Members DATE: FILE: of the City Commission SUBJECT: Resolution _Amending 1995-1998 Labor Agreement Between the City of Miami and FOP, Lodge No. 20 FROM: Merrett Stier REFERENCES: City Manag ENCLOSURES: RECOMMENDATION: It is recommended that the City Commission adopt the attached Resolution authorizing the execution of the attached Memorandum of Understanding by the City Manager amending the labor agreement between the City of Miami and the employee organization known as the Fraternal Order of Police, Lodge No. 20 for the period of October 1, 1995 through September 30, 1998 in accordance with the terms and conditions as set forth herein. BACKGROUND: In an effort to address the City's fiscal crisis the City and the Fraternal Order of Police, Lodge No. 20 (FOP) entered into discussions to identify possible concessions that would assist the City in its current fiscal crisis. The parties after meeting on several occasions were able to reach an agreement and have entered into a Memorandum of Understanding addressing certain concessions agreed to by the FOP. These concessions include the deferral of a four (4%) percent wage increase, previously due in January 1997, to September 1998; the reduction of the City's contribution to the FOP's Health Trust by $900,000 annually; a deferral on the issuance of uniforms for Fiscal Year 1997 and an agreement to limit payment of workers' compensation and supplemental pay to 80% of the employee's regular base pay as a result of not paying taxes on the worker's compensation, portiori. The employee will receive on the average 100% of their salary not to exceed the employee's weekly net base pay. Under the take home car program the FOP has agreed to the payment, by bargaining unit members, of a take home car fee of $40 per pay period and the establishment of a preventative vehicle maintenance program by the FOP whereby the bargaining unit members will provide, at their expense, routine preventative maintenance. As a result of these agreed upon changes the parties have agreed that there will be no reopener on Wages in 1997 as currently specified in the labor agreement. FOP will also support the City in utilizing Federal forfeiture funds/fines to match City dollars to fund special projects with the Miami Police Department. The Memorandum of Understanding also provides for an Oversight Hiring Committee. This Committee will consist of three (3) members, a union representative, a management 96 - 819 1i Honorable Mayor and Members of the City Commission Page 2 of 2 representative and a neutral member. It will be the responsibility of the Committee to review departmental requests to hire new employees and make recommendations to the City Manager. The City Manager retains the authority to authorize or disapprove the filling of a position. In recognition of the FOP's cooperation in assisting the City to address its fiscal crisis the Memorandum of Understanding provides that the City and the City Commission will fulfill its obligations by adopting the necessary revenue enhancement measures and cost containment measures as set forth in my Fair Share Matrix dated October 7, 1996. The City has also agreed to provide a bi-monthly status report which will indicate the savings and actions taken by the City and the employees to meet the City's deficit. Should either the IAFF or FOP bargaining unit employees receive the 4% wage increase prior to 1998 or if the LIUNA bargaining unit employees receive the wage bonus then the Memorandum of Understanding will not be effective on the FOP. It is estimated that the concessions agreed to by the FOP will save the City over fifteen (15) million dollars over Fiscal Years 1996-1997 and 1997-1998. MEMORANDUM OF UNDERSTANDING FOP, LODGE NO. 20 This Memorandum of Understanding • is entered into between the City of Miami and the Fraternal Order of Police (FOP), Lodge No. 20 as it pertains to the future hiring of employees, City obligations and modifications of the 1995-1998 labor agreement between the City of Miami and FOP, Lodge No. 20. Labor Agreement Modifications (1) Effective upon ratification by the FOP bargaining unit and the City Commission, the four percent (4%) across-the-board salary increase effective the first full pay period following January 1, 1997, as specified in the 1995-1998 labor agreement, shall be changed for receipt beginning the first full pay period following September 1, 1998. (2) 1n recognition that workers' compensation pay is not taxed the FOP agrees that ,effective upon ratification of this Agreement, the City shall only pay eighty (80%) percent of the employee's regular base pay. When added to the worker's compensation portion the employee will receive on the average one hundred (100%) of their salary not to exceed the weekly net base pay (excluding overtime and any pay supplements) received prior to the employee's line of duty injury, accident or occupational disease. The net pay may be adjusted for Court ordered payments. (3) Currently the City contributes approximately 3.6 million dollars annually to the FOP Health Trust. Effective upon ratification of the Agreement the City's contribution shall be reduced to approximately 2.7 million dollars annually. The reduction in the City's contribution to the FOP Health Trust shall be accomplished through a reduction in the City's biweekly contribution beginning the pay period of November 24, 1996. The FOP agrees that for Fiscal Year 1996-1997 the City's biweekly contribution to the FOP Health 11/11/96 3:56 Phi I �i Trust for single and family health coverage shall be reduced in the amount of $40,909.09 per pay period. Effective for Fiscal Year 1997-1998 it is agreed that the City's biweekly contribution to the FOP Health Trust for single and family health eoverage shall be reduced in the amount of $34,615.38 per pay period. (4) Effective upon ratification of this Agreement uniforms, as specified in Article 23 - Uniform Allowance, shall not be issued uniforms, unless damaged, throughout the remainder of Fiscal Year 1996-1997. (5) Effective upon ratification of this Agreement Article 43 - Vehicle Program, shall be modified whereby FOP bargaining unit employees who are assigned a take home vehicle, including rental vehicles motorcycles, shall have a take home vehicle fee in the amount of $40 per pay period deducted from their biweekly pay check. The take home vehicle fee shall not be applicable to bargaining unit employees whose domicile is within the City of Miami. The FOP also agrees that the current replacement schedule under the take home vehicle program will be increased from a five (5) year replacement schedule to a seven (7) year replacement schedule. (6) Effective upon ratification of this Agreement the FOP agrees to establish a program with various vehicle maintenance centers where bargaining unit employees will be required at their expense to have routine preventative maintenance (oil and oil filters,. fluids, Tube, etc.) performed on their assigned vehicles. All bargaining unit employees who are assigned a take home vehicle will be required to maintain a vehicle maintenance log which is subject to inspection by the City. Bargaining unit employees will be required to submit copies of receipts of vehicle maintenance to fleet services. 11/12/96 12:25 PM Within sixty (60) days of ratification of this Agreement the FOP agrees to implement a preventative maintenance program. Should the FOP not establish the preventative maintenance program within the specified sixty (60) days bargaining unit employees shall have deducted from their biweekly pay check a vehicle maintenance fee of $20 per pay period.. It is agreed by the FOP that vehicle maintenance will not be performed off -duty by bargaining unit members. The FOP. agrees that overtime requirements shall not apply in any future FLSA litigation concerning any matter for which overtime is not paid for off -duty preventative maintenance of assigned vehicles. (7) The FOP and the City of Miami agree that the reopener provision on Wages, as specified in Article 44 - Term of Agreement, is hereby deleted. Federal Forfeiture Funds/Fines The FOP fully supports utilizing Federal forfeiture funds/fines to match City dollars to fund special projects within the Miami Police Department which will reduce the City's budget for the department by $1,000,000 annually. Oversight Hiring Committee In an effort to address the fiscal crisis facing the City of Miami it is recognized by the parties that the number of new hires for the City of Miami must be kept to a minimum. The parties therefore agree to the establishment of an "Oversight ffiring Committee". The "Oversight Hiring Committee" shall be composed of three (3) members: a union representative, a management representative appointed by the City Manager, and a neutral member selected jointly by the management representative and the unions (collectively). Each of the City's four unions shall select a union representative, each of whom shall sit on the Committee on a rotating basis, provided that the position(s) to be considered by the 11/11/96 3:56 PM 96- 819 0 Committee are not within the seated representatives' union, in winch event the next union representative on the rotation schedule shall be seated. The Committee shall meet on an ad hoc basis. When a department requests authorization to hire a new employee the Committee shall meet to review justification of such request. Upon review of the hire request the Committee will make a recommendation in writing to the City Manager stating their reasons for approval or disapproval of the hiring request. The City Manager will take into strong consideration the recommendation of the Committee, however, the City Manager retains the final I authority to authorize or disapprove the hiring of a new employee. Detemunations by the City Manager to authorize the hiring of a new employee are not subject to appeal through the grievance procedure, civil service board, or outside i forum. Nor does the Committee have the right to review the hiring of new employees directed by the City Commission. Unless otherwise agreed to by the parties hereto the i "Oversight Hiring Committee" will cease to exist as of September 30, 1998. City Obligations In recognition of the FOP's cooperation in assisting the City of Miami to address i its fiscal crisis the City agrees to adopt necessary revenue enhancement measures and cost containment measures as set forth in the City Manager's Fair Share Matrix dated October 7, 1996. In other words FOP is willing to meet its fair share, as specified within this agreement, provided the City Commission and City Manager fulfill its obligations as set forth in this Agreement. Beginning January 1, 1997 the City Manager will issue a bi- monthly status report which will indicate the savings and actions taken by the City and the employees to meet the City's deficit. The bi-monthly status report will be distributed to City departments and employees. This Agreement shall not be effective on the FOP, if the 11/11/96 3:56 PM )9G_ 1 AFSCME or IAFF bargaining unit employees receive the 4% across the board increase prior to September 1998 or if the LIUNA bargaining unit employees receive the wage bonus during the remainder of their current labor agreement. FRATERNAL ORDER OF POLICE, LODGE NO.20 James Mann Vice President Date ON THE PART OF THE CITY OF MIAMI, MIAMI, FLORIDA Merrett Stierheim City Manager Date i CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM TO: Honorable Mayor and Members DATE FILE of the City Commission SUBJECT: Resolution Amending 1995-1998 Labor Agreement Between the City of Miami and IAFF, Local 587 FROM: Merrett Sti 1 REFERENCES : City Man er ENCLOSURES: RECOMMENDATION: It is recommended that the City Commission adopt the attached Resolution authorizing the execution of the attached Memorandum of Understanding by the City Manager amending the labor agreement between the City of Miami and the employee organization known as the International Association of Firefighters, Local 587 GAFF) for the period of October 1, 1995 through September 30, 1998 in accordance with the terms and conditions as set forth herein. BACKGROUND: In an effort to address the City's fiscal crisis the City and the International Association of Firefighters GAFF), Local 587 entered into discussions to identify possible concessions that would assist the City in its current fiscal crisis. The parties after meeting on several occasions were able to reach an agreement and have entered into a Memorandum of Understanding addressing certain concessions agreed to by the IAFF. These concessions include the deferral of a four (4%) percent wage increase, previously due in January 1997, to September 1998; an agreement to reduce the minimum manning requirement from 605 positions to 590 positions thereby allowing the department to reduce positions on 40 hour, 42 hour and 52 hour shifts; an agreement by the IAFF to waive its rights to receipt of certairi "Salary Reserves" for Fiscal Years 1995-1996 and 1996-1997 as currently specified in the labor agreement; to reduce Revenue Incentive Pay by 1% for Fiscal Years 1996-1997 and 1997- 1998; and an agreement whereby employees injured in the line of duty and receiving workers' compensation and supplemental pay shall pay $70 weekly so that the employee does not receive more than 100% of their weekly net base pay as a result of not paying taxes on the workers' compensation portion. As a result of these agreed upon changes the parties have agreed that there will be no reopener on Wages in 1997 as currently specified in the labor agreement. The Memorandum of Understanding also provides for an Oversight Hiring Committee. This Committee will consist of three (3) members, a union representative, a management representative and a neutral member. It will be the responsibility of the Committee to review departmental requests to hire new employees and make recommendations to the City Manager. The City Manager retains the authority to authorize or disapprove the filling of a position. 9 r. - P Honorable Mayor and Members of the City Commission Page 2 of 2 In recognition of the IAFF's cooperation in assisting the City to address its fiscal crisis the Memorandum of Understanding provides that the City and the City Commission will fulfill its obligations by adopting the necessary revenue er&ancement measures and cost containment measures as set forth in my Fair Share Matrix dated October 7, 1996. The City has also agreed to provide a bi-monthly status report which will indicate the savings and actions taken by the City and the employees to meet the City's deficit. Should either the AFSCME or FOP bargaining unit employees receive thb 4% wage increase prior to 1998 or if the LIUNA bargaining unit employees receive the wage bonus then the Memorandum of Understanding will not be effective on the IAFF. It is estimated the concessions agreed to by the IAFF will save the City six (6) million dollars for Fiscal Years 1996-1997 and 1997-1998. I 9 - b19 r. MEMORANDUM OF UNDERSTANDING IAFF, LOCAL 587 This Memorandum of Understanding is entered into between the City of Miami and the Inteinational Association of Firefighters (IAFF), Local 587 as it pertains to the future hiring of City employees, City obligations and modifications of the 1995-1998 labor agreement between the City of Miami and IAFF, Local 587. Labor Agreement Modifications (1) Effective upon ratification by the IAFF bargaining unit and the City Commission, the four percent (4%) across-the-board increase effective the first full pay period following January 1, 1997, as specified in the 1995-1998 labor agreement (Article 18 - Wages), shall be changed for receipt beginning the first full pay period following September 1, 1998. (2) Effective upon ratification of this Agreement IAFF bargaining unit employees who receive supplemental and worker's compensation pay, as specified in Article 12 - Line of Duty Injuries, shall have a weekly amount of $70 ($140 biweekly) deducted from supplemental salary while on workers' compensation. Should the bargaining unit employee receive supplemental and workers' compensation pay for less than a week then the $70 weekly deduction shall be prorated as appropriate for the days the bargaining unit employee was on workers' compensation. It is agreed by the parties that the receipt of supplemental and workers' compensation pay shall not exceed nor be less than one hundred (100%) percent of the employee's weekly net base pay (excluding overtime and any pay supplements not included in the employee's base salary) prior to the line of duty injury, accident, or occupational disease. The $70 weekly deduction will be deducted on a priority basis above any other deductions, excluding 10/30/96 6:13 PM g, r withholding taxes, FICA, pension or court ordered deductions. To the extent that the bargaining unit employee's weekly net base pay either exceeds 100% or is less than 100% of the weekly nef base pay the Fire Department will retroactively adjust the $70 weekly deduction as appropriate. (3) For Fiscal Year 1996-1997 and Fiscal Year 1997-1998 the IAFF agrees that the number of funded bargaining unit positions in the Fire Department shall be reduced from 605 positions to 590 positions. The reduction in funded positions shall result in the number of 40 hour positions to be reduced by six (6), the number of 42 hour positions to be reduced by eight (8) and the elimination of one (1) vacant position. Employees reassigned from these positions shall be assigned to new positions in accordance with the departmental bidding system. (4) Effective upon ratification of this Agreement the IAFF agrees, as specified in Article 32 - Hours of Work, that due to a reduction in the number of funded positions, there will be a reduction of 52 hour shift positions. The remaining number of 52 hour positions shall be determined by the number of vacancies remaining and occurring in the future, based upon 590 funded positions. Employees reverting to a 48 hour shift shall be determined by 1) employees volunteering to revert by shift, then 2) junior employees by shift. (5) Effective upon ratification of this Agreement the IAFF agrees to waive its right to receipt of the "Salary Reserves", as specified in Article 36 - Shift Strength, in the amount of $564,920 for Fiscal Year 1995-1996 and $350,757 for Fiscal Year 1996-1997. Should the reserves for Fiscal Year 1996-1997 not meet the projected amount of $350,757 the difference may be acquired through the elimination of additional vacancies. (6) Effective the first full pay period in January 1997 the IAFF agrees that the Revenue Incentive Pay, as specified in Article 44 - Revenue Incentive Pay, will be reduced from 2.5% to 1.5% for calendar year 1997, and reduced 1% from the amount to be paid in calendar year 1998 819 10/30/96 6:13 PM r (i.e., -if incentive pay would be 2.8% then incentive pay would be reduced to 1.8%). Pay supplements which include the Revenue Incentive Pay will be adjusted to reflect the 1% reduction. (7) The IAFF and the City of Miami agree that the reopener provision on Wages, as specified in Article 46 - Termination and Modification, is hereby deleted. Oversight Miring Committee In an effort to address the fiscal crisis facing the City of Miami it is recognized by the parties that the number of new hires for the City of Miami must be kept to a minimum. The parties therefore agree to the establishment of an "Oversight Hiring Committee". The "Oversight Hiring Committee" shall be composed of three (3) members: a union representative, a management representative appointed by the City Manager, and a neutral member selected jointly by the management representative and the unions (collectively). Each of the City's four unions shall select a union representative, each of whom shall sit on the Committee on a rotating basis, provided that the position(s) to be considered by the Committee are not within the seated representatives' union, in which event the next union representative on the rotation schedule shall be seated. The Committee shall meet on an ad hoc basis. When a department requests authorization to hire a new employee the Committee shall meet to review justification of such request. Upon review of the hire request the Committee will make a recommendation in writing to the City Manager stating their reasons for approval or disapproval of the hiring request. The City Manager will take into strong consideration the recommendation of the Committee, however, the City Manager retains the final authority to authorize or disapprove the hiring of a new employee. 10/30/96 6:13 PM 96 819 r Commission. Unless otherwise agreed to by the parties hereto the "Oversight Mring Committee" will cease to exist as of September 30, 1998. City Obligations In recognition of the IAFF's cooperation in assisting the City of Miami to address its fiscal crisis the City agrees to adopt necessary revenue enhancement measures and cost containment measures as set forth in the City Manager's Fair Share Matrix dated October 7, 1996. In other words IAFF is willing to meet its fair share, as specified within this agreement, provided the City Commission and City Manager fulfill its obligations as well. Beginning January 1, 1997 the City Manager will issue a bi-monthly status report which will indicate the savings and actions taken by the City and the employees to meet the City's deficit. The bi-monthly status report will be distributed to City departments and employees. This Agreement shall not be effective on the IAFF, if the AFSCME or FOP bargaining unit employees receive the 4% across the board increase prior to September 1998 or if the LIUNA bargaining unit employees receive the wage bonus. INTERNATIONAL ASSOCIATION OF ON THE PART OF THE CITY OF FIREFIGHTERS, LODGE 587 MIAMI, MIAMI, FLORIDA William "Shorty" Bryson Merrett Stierheim President City Manager Date 11/14J96 3:06 PM 96 819 Date Em 1i TO: Honorable Mayor and Members of the City Commission FROM: Merrett' Stier e City Mana RECOMMENDATION: CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM DATE: FILE: SUBJECT: Resolution Amending 1994-1997 Labor Agreement Between the City of Miami and LIUNA, Local 800 REFERENCES: ENCLOSURES: It is recommended that the City Commission adopt the attached Resolution authorizing the execution of the attached Memorandum of Understanding by the City Manager amending the labor agreement between the City of Miami and the employee organization known as the Laborers International Union of North America, Local 800 (LIUNA) for the period of October 1, 1994 through September 30, 1997 in accordance with the terms and conditions as set forth herein. BACKGROUND: In an effort to address the City's fiscal crisis the City and the Laborers International Union of North America, Local 800 (LIUNA) entered into discussions to identify possible concessions that would assist the City in its current fiscal crisis. The parties after meeting on several occasions were able to reach an agreement and have entered into a Memorandum of Understanding addressing certain concessions agreed to by the LIUNA. These concessions include the forfeiture of a $500 wage bonus which was due in October 1996; and an agreement to limit payment of workers' compensation and supplemental pay to 80% of the employee's weekly base salary as a result of not paying taxes on the workers' compensation portiori. LIUNA has also agreed to the receipt of pay checks on Fridays instead of Thursdays. The Memorandum of Understanding also provides for an Oversight Hiring Committee. This Committee will consist of three (3) members, a union representative, a management representative and a neutral member. It will be the responsibility of the Committee to review departmental requests to hire new employees and make recommendations to the City Manager. The City Manager retains the authority to authorize or disapprove the filling of a position. In recognition of the LIUNA's cooperation in assisting the City to address its fiscal crisis the Memorandum of Understanding provides that the City and the City Commission will fulfill its obligations by adopting the necessary revenue enhancement measures and cost containment measures as set forth in my Fair Share Matrix dated October 7, 1996. The City has also agreed to provide a bi-monthly status report which will indicate the savings and actions taken by the City and the employees to meet the City's deficit. Should either the IAFF, FOP or Af SCME ., 06" 819 r Honorable Mayor and Members of the City Commission Page 2 of 2 bargaining unit employees receive the 4% wage increase prior to 1998 then the Memorandum of Understanding will not be effective on the LIUNA. It is estimated that the concessions agreed to by the LIUNA will save the City $233,500 for Fiscal Year 1996-1997. There are no savings for Fiscal Year 1997-1998 as the LIUNA's labor agreement expires September 30, 1997. j - ` MEMORANDUM OF UNDERSTANDING LIUNA, LOCAL 800 This Memorandum of Understanding' is entered into between the City of Miami l and the Laborers International Union of North America (LIUNA), Local 800 as it pertains i to the future hiring of City employees, City obligations and modifications of the 1994- i i 1997 labor agreement between the City of Miami and LItJNA, Local 800. Labor Agreement Modifications (1) Effective upon ratification by the LIUNA bargaining unit and the City Commission, the $500 wage bonus due for payment the first full pay period following October 1, 1996, as specified in the 1994-1997 labor agreement, shall be deleted and not received by the bargaining unit employees. (2) Effective upon ratification of this Agreement supplemental pay and worker's compensation pay, as specified in Article 26 - Line of Duty Injury, shall be paid to bargaining unit employees to the extent that the total of such benefits shall not exceed eighty (80%) of the employee's weekly base salary (excluding overtime and any pay supplements not included in the employee's base salary) prior to the line of duty injury, accident, or occupational disease. (3) Effective upon ratification of this Agreement it is agreed to by the parties that employee pay checks will be issued to employees every other Friday. Oversight Hiring Committee In an effort to address the fiscal crisis facing the City of Miami it is recognized by the parties that the number of new hires for the City of Miami must be kept to a minimum. The parties therefore agree to the establishment of an "Oversight Hiring Committee". The 1114196 3:00 PM 96- 819 51 "Oversight Hiring Committee" shall be composed of three (3) members: a union representative, a management representative appointed by the City Manager, and a neutral member selected jointly by the management representative and the unions (collectively). Each of the City's four unions shall select a union representative, each of whom shall sit on the Committee on a rotating basis, provided that the position(s) to be considered by the Committee are not within the seated representatives' union, in which event the next union representative on the rotation schedule shall be seated. The Committee shall meet on an ad hoc basis. When a department requests authorization to hire a new employee the Committee shall meet to review justification of such request. Upon review of the hire request the Committee will make a recommendation in writing to the City Manager stating their reasons for approval or disapproval of the hiring request. The City. Manager will take into strong consideration the recommendation of the Committee, however, the City Manager retains the final authority to authorize or disapprove the hiring of a new employee. Determinations by the City Manager to authorize the hiring of a new employee are not subject to appeal through the grievance procedure, civil service board, or outside forum. Nor does the Committee have the right to review the hiring of new employees directed by the City. Commission. Unless otherwise agreed to by the parties hereto the "Oversight Hiring Committee" will cease to exist as of September 30, 1998. City Obligations In recognition of the LIUNA's cooperation in assisting the City of Miami to address its fiscal crisis the City agrees to adopt necessary revenue enhancement measures and cost containment measures as set forth in the City Manager's Fair Share Matrix dated October 7, 1996. In other words LIUNA is willing to meet its fair share, as specified 11/4196 prs { 1i within this agreement, provided the City Commission and %,1ty Manager fulfill its obligations as well. Beginning January 1, 1997 the City Manager will issue a bi-monthly status report which will indicate the savings and actions taken by the City and the employees to meet the City's deficit. The bi-monthly status report will be distributed to City departments and employees. This Agreement shall not be effective on the LI JNA, if the IAFF, AFSCME or FOP bargaining unit employees receive the 4% across the board increase prior to September 1998. LIUNA, on behalf of its bargaining unit members, and the City of Miami hereby agree to the provisions of this Memorandum of Understanding. LABORER'S INTERNATIONAL UNION ON THE PART OF THE CITY OF OF NORTH AMERICA, LOCAL 800 MIAN% MIAMI, FLORIDA Diane Ragone Business Agent Date l 1114196 3:00 PM Merrett Stierheim City Manager Date '-� 819 96- 819 IO: �i To: Merrett R. Stierheim From: Joseph Fletcher, Kimley, Horn & Assoc. Tom Bradely, Arthur Anderson & Assoc. Geoffrey M. Swan, Tite Co. John Vodenicker, Jr., Ernst & Young Date: November 11, 1996 Subject: The Opportunities Task Force Attached are recommendations prepared by the Opportunities Task Force. These recommendations identify opportunities to be focused on to develop short and long range goals. Our attention was primarily on The Enterprise Fund Operations of Solid Waste and Conferences, Conventions and Public Facilities. These areas comprise 84% of the total 96/97 Enterprise Fund appropriation amounting to 40.2 million. The financial reports for the 95/96 operating year were studied and compared to the budget submitted in September 1995. The budget anticipated the Conferences, Conventions and Public Facilities would generate a subsidy to the General Fund of $1,639,061 and to the Enterprise Fund of $1,635,991. The financial report indicates that this did not occur and in fact the General Fund subsidized the Conferences, Conventions and Public Facilities by $1,507,747. A review of the reports for Solid Waste Operation was made. The 95/96 budget reflected an overall net cost for operation of $16,000,000 which included a subsidy of $3,021,210 from other sources. The 96/97 budget estimates a net cost of operation at $16,570,039. This also includes a subsidy of $3,021,210 from other sources also. Revenue for 95/96 was anticipated at $15,014,088 and for 96/97 $16,570,039. It could not be determined what basis was used for either revenue projections, and the '95 Comprehensive Annual Financial Report indicated a deficit of 12 million. Meetings were held with City Staff and many of the recommendations came from them. We believe the staff of Enterprise Operations is professional and with top administrative support and accurate, timely financial information and the political support for the recommendations, these operations can be turned around to generate surplus revenue to support a true enterprise operation. Joseph M. Fletcher Chairman 96- 819 STATE OF CITY'S CURRENT FINANCIAL CONDITION Our Task Force aha!yzed the latest available financial statements for the fiscal year ended September 30, 1995. This review indicated the City had accumulated unfunded long term liabilities in the range of $150 to $200 million on September 30, 1995. In addition, the City Manager's current 1996 budget estimate reflects an operating and capital budget shortfall of $68 million which would increase the short and long term liability to $218 to $268 million. There are a number of other financial observations highlighted below based on the financial statements at September 30, 1995: • Operating cash and investments totaled $7,533,000 which was well below desirable short term cash flow needs. The operating cash reserve should be sufficient to cover 30 to 60 days of operation. • The City has accumulated an unfunded self-insurance liability of $78,824,000. Even though many claims are not settled within a short period of time, it is prudent to maintain cash reserves of not less than 30% to 50% of outstanding claims. + The City provides post -employment health care benefits on a pay-as-you-go basis totaling $14 million annually. The City should be funding a portion of the future benefits being earned by current employees on these benefits. • The City currently has funded 82% of its pension benefit obligation which represents a long term unfunded pension obligation of $182 million which is being met actuarially through annual appropriations. • The City has transferred revenue received for restricted purposes to other funds as follows: • Rescue Services $56,000 • Law enforcement 84,000 • Metro -Dade tourist tax 42,000 • Street improvement 4,086,000 • Municipal use 5,668,000 + Public use 5,894,000 • Sewers 27,853,000 $43,683,000 With the elimination of cash reserves from these restricted accounts, the City must fulfill obligations when they become due from the annual operating budget since other operating cash reserves are so depleted. The Task Force believes the financial position of the City is so weak that it is necessary for the City to complete a long term financial workout plan. This workout plan must include a one -to -two year short-term plan, which the Interim City Manager is currently preparing. The plan should be designed to immediately improve the operating cash flow through significant revenue increases and expenditure reductions. Also the City's long-range workout plan should consider partially eliminating accumulated deficits through sale of real estate, refinancing debt and rightsizing City services. 96 819 r j I City of Miami Opportunities Task Force Recommendations November 11, 1996 Accurate Assessment of Current Situation Public discussions regarding the City of Miami's financial condition have focused on a deficit of $68 million. This amount relates only to the anticipated 1996 and projected 1997 operating deficits. This analysis ignores a much larger problem — the City's accumulated deficit or excess of liabilities over assets. A review of the City's fiscal 1995 financial statements indicates that the City had accumulated unfunded liabilities in the range of $150 to $200 million as of September 30, 1995. These long range liabilities must be addressed in addition to the $68 million operating deficit. As soon as possible, the City should determine its actual financial position as of the current date. Comprehensive operating and cash flow projections should them be developed for a five year period. The projections should address the future courses of action which will be required for the City to continue as an operating entity. Consideration should be given to the possible claims of bondholders, creditors and others if the City Commission does not adequately respond to the City's financial deficiencies. Integrity of Financial Information A consistent theme which we heard during our task force deliberations was that City personnel do not trust the accuracy of the information included in the City's budget or its internal and external financial statements. It is not possible to operate an organization of the size of the City of Miami without accurate financial and management information. Steps should be taken -immediately to implement procedures, upgrade systems and provide adequate professional staff to improve the timelines and integrity of the City's financial and management information. Solid Waste Enterprise Fund The City operates its solid waste utility as an enterprise fund. User charges in an enterprise fund should be sufficient to cover operating expenses. This fund is currently operating at a substantial deficit,. For the fiscal year ending September 30, 1995, Solid Waste had an operating deficit in excess of $12 million. Steps should be taken to return this fund to profitability, including:" r g `= � 19` �i • Raise user charges to an appropriate amount based on related costs and charges for similar services provided by other South Florida municipalities. The City charges approximately half the rate of other local cities and should double its fees. • Review the levels of service provided and reduce service if appropriate. For example, limit the number of trash pick-ups, build pick-ups, etc. • Increase enforcement efforts to reduce the level of illegal dumping within the City which is required to be cleaned up by Solid Waste. • Increase efforts to audit or otherwise verify that the City is receiving the full amount due from franchise revenues from commercial solid waste companies. (See Attachment A) Real Property The City has approximately 640 parcels of real property. Some of these parcels are vital to the operation of the City. Others are currently providing a return to the City through leases to third parties. Many other parcels may be surplus and require the City to provide funding for maintenance, insurance and other costs. The following actions should be taken: • A complete inventory of all real estate parcels owned by the City should be compiled. This inventory should include such information as the location, description, current use, etc. • Parcels should be categorized according to their use, i.e., city operations, leased to third party, vacant, etc. An analysis should be performed for each parcel of leased property to determine such factors as: • Whether payments are being made on a timely basis • If the lessee is in compliance with the lease terms (land use % rent audit 96- 819 requirements, etc.) • When the lease term will expire • Whether the terms of the lease are economically reasonable for the City • If it is possible to re -negotiate or modify the lease in the best interest of the City • Whether the City should sell the property to the lessees or another third Party For parcels currently used by the City an analysis should -be conducted to determine: . • Is it economically feasible for the City to use the parcel in its operations? • Is it possible to use only a portion of the parcel? • Could the parcel be sold and leased back by the City? • If user charges are associated with the City's operation of the parcel, is it possible to raise the charges? For surplus parcels an analysis should be performed as follows: • All legal documents relating to each parcel should be accumulated and reviewed to facilitate future actions? • What is the annual operating cost and foregone tax revenue as a result of the City's ownership? • Is it possible to sell the property? • Is it possible to lease the property? • Should the property be transferred to another local government or not -for - profit organization A parcel of waterfront property which belongs to the City may be used as the site of a New Miami Arena. This is an extremely valuable piece of property. The transaction should be reviewed in detail to ensure that the return to the City is commensurate with the fair market value of the parcel. In this regard and in light of the City's current financial position, serious consideration should be given to obtaining as large a payment as possible in the near term and/or long term recurring revenues. (See Attachment B) Outsourcing and Privatization A large percentage of the activities performed by the City of Miami are also conducted by .other local governments and private companies. A review of all City activities should be conducted to determine which of the activities could be performed more economically and with a higher level of service by another local government or by a private enterprise. These activities could include: • Solid waste • Fleet management • Workers' compensation underwriting and administration • Risk Management • Golf Course operations • Marina operations 9-' g�9 r • Police operations • Fire operations • Internal Audit • Finance administration • Data processing operations Accounts Receivable A complete listing of all the City's account receivable balances should be compiled. This listing should include revenues recorded in the accounting records as well as balances which may not be recorded because they are long overdue or because the City is not sure whether they are collectible. All possible efforts should be made to collect the receivable. This may include commencement of legal action, use of a collection agency, termination of City services for non-payment, repossession of leased property for non-compliance, etc. User Fees and Charges The City charges fees for various services provided by the City. The City should review all services provided to determine the level of fees and charges associated with each. The City should determine whether the fees are reasonable based on the fully loaded cost of the service, rates charged by other local governments and private enterprises for similar services and other factors. Rates should be adjusted to ensure service users are paying the associated costs and to provide a return to the City which is appropriate. The City should also consider the circumstances under which the payment of user charges is waived. Formal policies should be adopted regarding when such waivers are to be granted. (See Attachment Q Convention and Exhibition Centers The City of Miami/University of Miami/James L. Knight International Center and Parking .Garage and the Coconut Grove Exhibition Center have an accumulated operating deficit of approximately $36 million. For the 1995 fiscal year, the fund had an operating loss of approximately $5.5 million. The fund also lost almost $4 million in 1996. Steps should be taken immediately to reduce or eliminate the financial burden associated with ownership of these facilities. For example, it may be possible to raise parking fees in the NationsBank Tower. The Hyatt Regency may be underreporting revenue and therefore underpaying rent. The City should also consider selling the Miami properties to one of the lessees or another third party. ��'- 819 J�1 Attachment A Solid Waste A sub -task force consisting of Joseph M. Fletcher, Tom Bradely, Joseph Ruiz and Mark Glaiber was requested to review the operations of the Solid Waste Division of General Services Administration. A review of the 95/96 and 96/97 budgets was conducted and input was obtained from the staff regarding the operations of the Department. Revenue comes from three major sources. Households (62,500) pay annually $160 for their services. These services consist of two garbage pickups per week and one trash and one recyclables pick up per week. In addition, each household ineligible to receive up to four bulky waste pick ups per year. All special events requiring clean up theoretically pay for total costs associated with that service. The Storm Water Fund contributes for private companies responsible for collection of commercial accounts (greater than four household units) pay an annual franchise fee. The attached analysis supports the four recommendations made by the "Opportunities Task Force". 9' " 81'9 Cif 1V08/96 FRI 16:56 FAX 305 r`-A. 1673 ND SOLID WASTE -"\ _ MEMORANDUM 107Ar•17A ucnooax-M4►ar..wr. . TO: Joseph Fletcher DATE: November 5, 1996 O�rtu�ask Force _ SUBJECT: Joseph A Ruiz Jr. ~Y Evaluation of City of Miami FROM: Ile" Director Cost of Solid Waste Operations Department of Solid Waste Management Q002 We have been asked to compare the City of Miami (the City) solid waste cost information with the cost of solid waste service performed by the Metro Dade Department of Solid Waste Management (DSWM). Basal on the limited information available (copies of which are attached) we can make the conclusions summarized below. 1. Based on FY 1995 -1996 projected expenditures (assuming this reflects accruals for unpaid charges and liabilities), and adjusting this for inflation and the delivery of all trash to DSWM transfer stations and all garbage to DSWM Resources Recovery disposal £aa'lity, the total solid waste cost per household (net of street sweeping) is estimated at $379 per household. This compares with a total cost of solid waste service by DSWM (net of enforcement) of $342 per household and with prior full cost estimates by the City ofMiami in excess of $400 per household. A summary of fees and prior year full cost estimates for other Dade County cities also is attached for your information. Non -household fee revenues from franchise fees, lot clearing liens, are estimated to generate approximately $59 per household, with an additional $14 per household estimated to be derived from the $5 per ton credit on disposal fees for FY 96 - 97 as contained within the contract for the sale of the Central Transfer station, thereby reducing the amount needing to be covered by the household fee to approximately $306 per household. $900,000 in revenues from recycling fees and $1,000,000 from'Other revenues" although provided by the City, were not included since they have not been available in prior years. If these materialized, the net cost would be reduced further by $30 per household. Revenue from the stormwater utility fee is not included in the analysis as it is assumed that this can be used to offset street sweeping only. 2. The cost of solid waste disposal in the City of Miami is extremely high, approximately $127 per residential household in Fiscal Year 1995-96, and as much as $138 per household in Fiscal Year 1996-97 if all trash is delivered to the transfer stations. There appeasto be three primary reasons for this: a) The ratio of trash to garbage tonnage collected by the City of Miami from residential units is highly unusual. In FY 1995 - 1996 ( and as evidenced in October 1996), the City is collecting almost 110,000 tpns of trash per year while collecting only 60,000 tons of garbage i 41 11/08/96 FRI 16:57 FAX 305 1673 MD SOLID WASTE _ 9003 per year. On a Countywide basis, the breakdown is approximately 60 percent garbage and 40 percent trash For the unincorporated area residential collections by the Metro -Dade Department of Solid Waste Management (DSWNI), the split is almost 50 percent trash and 50 percent garbage. The City of Miami total trash collection represents approximately 2.7 tons per year of waste per residential customer versus approximately 2.4 tons of waste per residential customer in the unincorporated area. This suggests that potentially as much as 40,000 tons per year of trash is being collected by the City that is not generated by residential customers. While a lack of an illegal dumping enforcement program within the Solid Waste Division might help contribute to the problem, the primary contributor is probably the method of trash collection, whereby piles of trash left at curbside attract trash from non-paying customers, i.e., the method of collection does not allow the City to determine or charge the actual customers served. b) The City of 1'Yliami, as with other cities in the eastern and northeastern portion of the County can save fleet operating costs as well as crew time (thus, potentially increasing the work to be performed within the workday) by utilizing close -by Regional Transfer Stations. In the best case, the transfer station fee surcharge that is added to the disposal fee for the use of these stations should be offset by the savings. However, the City may be able to accomplish significant savings if a few loads per day could be directed directly to the disposal site without reducing the number of loads picked up per crew with the remainder going to the transfer station. The City has indicated that trash crews are on an incentive basis to pick-up 5 loads per day and that many of the crews have been able to take all loads to DSWM Resource Recovery ficility within 8 hours out of the 10 hour workday. According the City staff, attempting to direct all trash crews to solely utilize the Resources Recovery facility has resulted in some crews coming in late and some labor problems. Below is a summary of potential savings by household be directing a portion of these loads to disposal sites: 1 load per day 22,000 tons per year $198,000 per year $3 per household 2 loads per day 44,000 tons per year $396,000 per year $6 per household 3 loads per day 66,000 tons per year $594,000 per year $10 per household (based on 110,000 tons of trash disposed per year.) The City should have a more detailed evaluation of its use of transfer stations. While the proximity of the City to Central Transfer Station is clear, all loads from a vehicle may not need to go to a transfer station. In FY 1995 - 1996, almost 100 percent of all loads were directed to transfer stations. i c) The City collects waste without charge from other City Departments which is included with residential tonnage estimates. The magnitude of the waste collected is unknown. 9 6 - 819� �.., Ii/08/96 FRI 16:58 FAX 305 1673 AID SOLID WASTE _ Q004 3. The City's overall estimated cost of collections operations (adjusted for an estimated 4 percent inflation for Fiscal Year 1996-97 and without administrative overhead) is approximately $33 per customer more than that of DSWM estimated for FY 1996 - 1997 ($226 per household versus $193 per household). However, this is probably not an accurate comparison for the following reasons: - the City has maintained that it does not have sufficient staffing to allow coverage for sick leave, vacation leave, holiday time, etc., and thus, these shortfalls are covered by pulling staff from trash collection and street sweeping to ensure priority garbage pickup, thus creating gaps in these services. (This may also help create the unusually high trash tonnages in the City, as the longer a trash pile stays on the street, the more trash it "attracts".) Based on the information provided by City staff that it 24 garbage routes are served and supports 18 trash crews on a daily basis and based on the number of budgeted positions, garbage collection has approximately 35 percent extra .staff for coverage, however the trash division has no excess positions for coverage. - The City of Nam! appears to lag in its replacement plan. The City has estimated that approximately $4.8 million is required for vehicle replacement in FY 1996 - 1997 and $15.7 million over the next five years for an average of $3.14 million per year. Assuming a smooth replacement schedule on an annual basis, it would be expected that the depredation on vehicles should approximate replacement needs (adjusted for inflation over the life of the vehicle). The City depreciation in solid waste for Fiscal Year 1995 - 1996 was only $478,790. If the FY 1996 - 1997 collection component of cost per household was adjusted for the replacement cost per year, this would increase the per household cost by approximately $70 in FY 96 - 97 and an by an average of $50 over the next five years.. - The capital cost of the City's composting program is not included in the cost estimates as these costs have been funded through the State of Florida Recycling and Education Grant Program- 4. The City' overall estimated cost of administrative overhead (adjusted for an estimated 4 percent inflation for Fiscal Year 1996-97) is approximately $12 per customer less than the DSWM estimated cost for FY 1996 -1997 ($15 versus $27 per household). However, this is not an accurate comparison as most administrative support functions are not internalized within the City's solid waste Division and the Division pays no general support charge to the City's general fund. The DSWM performs its own billing functions, customer relations, pays an additional $1.4 million to the County's general fund for administrative support (approximately 5 per household) and cover costs related to its external audit, full cost accounting, etc. At a minimum, the solid waste costs should incorporate those costs directly related to billing residential customers for solid waste services, including mailing costs, staff support, and computer processing and disk space charges. The City includes a $3 per semi-annual surcharge on the solid waste bill for billing costs. If the $6 per household per year were included in the solid waste costs -for the City, as they are for DSWM, the differential would be much less. 916- 819 11/08/96 FRI 16:59 FAX 305 `1 1673 RD SOLID WASTE _ 5. Please note that.the DSWM's evaluation does not include an analysis of the street sweeping component of the City's cost as this function is not performed by our DSWM. Is is recommended that this should be independently reviewed by the The Metro -Dade Department ofPublic Works. Morally, all costs per unit were based on the assumption that the City serves 62,500 residential households. There has been no verification of this estimate either as to the actual number of bills mailed semi-annually or as to the number of bills actually paid. The City's solid waste division performs no periodic analysis to determine if the cumber of households served relate in to the number of households actually billed. As described above, the analysis of the cost information provides two primary areas of opportunity for savings, both in the area of trash collection: 1. Reducing disposal and operating costs by elimination or reduction of the weekly trash sweeps and by eliminating free service to City Departments; and 2. Directing a portion of trash vehicles to the Resources Recovery disposal facility. Additional savings may also be gained by billing annually. cc: Andrew Wilfork Kathie G. Brooks R 005 A SOLID WASTE MANAGEMENT A quick look at the City of Miami's Solid Waste Collection function: 1. Separate GSA from Solid Waste. The main purpose of a GSA is to service the other City departments in an equitable manner, which becomes extremely difficult when GSA is merged with any other department. 2. It appears upon cursory review of their equipment, that the Fleet is relatively new, i.e. most of the garbage trucks are 94s and 95s, most of the rubbish (trash open body trucks) trucks are 94s and 95s and the recycling trucks are 1990 models (Attachment A). More difficult to quantify are the trash cranes, since their equipment listing includes old and new cabs and chassis, and they are in a perpetual state of rebuilding. Dade County certainly can't disagree with this program since we constantly rebuild our cranes as well. The only difference is we contract for this service via competitive bid while the City uses its own staff to do the rebuilding. 3. Likewise, their shop staffing seems to be in the normal range (Attachment B). A better structure which would allow for a better sharing of overhead cost could be made if all the Fleet maintenance operations in the City were consolidated. This was recommended in our Fleet Task Force study (Attachment Q. 4. There are no capital funds budgeted and funded for replacement of equipment. Although the Fleet is relatively new, lack of a consistent replacement program will eventually cause a problem. Also, I get a real bad feeling when equipment with a ten to twelve year fife, gets bought in two years. That plays havoc with your replacement schedule. I believe they paid for their equipment through a bond issue/loan which may come back to haunt them as well. 5. Regarding their service level, garbage collection and recycling are normal. Their service level for trash pickup, bulky waste, white goods and illegal dumping are incredibly high which translate into a huge cost for salaries and equipment. The need for enforcement is obvious. Also, street sweeping and special events should have their own cost and revenue centers, and be self-sufficient financially, and avoid being subsidized by the waste fee. It is, of course, obvious that the waste fee itself is insufficient. I 6. Finally, they should not donate their retired equipment, but should sell it, especially recent model years (Attachment D); revenues from sales should be deposited in a Capital Replacement Fund. If you need anything further, please let me know. CITY OF MIAMI, FLORIDA ` INTER -OFFICE MEMORANDUM To : Merrett R. Stierheim City Manager FROM : Christina M. Cuervo o),L .Assistant City Manager DATE : October 31, 1996 FILE : SUBJECT : REFERENCES: ENCLOSURES: Sell City assets such as land, buildings and assets Sale of City .Assets 1. Objective: To sell assets such as land, buildings and assets Pursuant to the City Charter, City owned property can be disposed of once the City declares the property as surplus. Then pursuant to the City Code, the surplus property should be offered for sale to other governmental entities. If no governmental entity is interested in purchasing the property, then the City may offer the property for sale to the public once an appraisal is performed and a competitive bidding procedure is adhered to, which requires a minimum of three (3) acceptable bids to be submitted and if not a referendum is required.' Recommendation: • All city property offered for sale should be reviewed by the Law Department for any pertinent deed restriction or existing contract restricting such sale. In addition, the original funding source utilized to acquire and improve the city owned property needs to be identified to analyze if any restrictions of the proceeds from such sale may be restricted or have to be refunded to the original funding source. • Review all City Parks and evaluate the ability to provide a consolidated neighborhood park system, selling any non -essential and non -restricted park land. Evaluate the transfer of small neighborhood parks to Neighborhood associations. Specific Recommendations: • Sell Miami Springs Golf Course (at a minimum sell a portion of the golf course on the east side of road which consists of approximately 30 acres of developable land subject to zoning, maintaining the remaining 150 acres that partially sit ontop of water wells as a golf course subject to a deed restriction).-, • Sell Mel Reese Golf Course subject to the management agreement and/or sell a portion thereof. 19 Sell James L. Knight Center and Parking Garage # 4. • Sell Manuel Artime Theater (CDBG funds utilized to acquire property). Sell Manuel Artime Office Building (CDBG funds utilized to acquire property). j ! Sell Bobby Maduro Stadium (City Commission authorized Rafael Hernandez (Father Menendez) to come back with a proposal to develop housing on this site within specific time frame). • Investigate if any deed restriction exists that would limit the City's ability to lease or sell and develop for commercial purposes the north portion of Curtis Park fronting on NW 20th Street. • City is already pursuing the sale of undeveloped single family lots. • Sell the City's property maintenance facility located adjacent to Dade County Jackson Memorial Hospital (minimum sale price $2.5 million). • Sell the City property at 1145 NW I 1 Street; 75,000 sf building on top of approx. 8 acres (there is a current month -to -month lease with Dade County for the jail). • Sell vacant city property adjacent to Phyllis Wheatley Elementary to Dade County Public School Board for $125,000 subject to pilot fee (to be presented to City Commission on November 21, 1996). • Sell vacant city property known as lot #4 located at 185 NE 82 Terrace. • Sell former Parks and Recreation Administration Building located at 1390 NW 7 Street (currently under revocable license to GRASP (United Way Agency) and U.S. Department of Labor. Cost Savings/Revenue Increase (if relevant) The sale of city owned property will not only produce a significant one time revenue streain for the city, but will also contribute ongoing tax revenue if sold to the private sector. and maintenance and repair cost savings. If properties are sold to other governmental agencies, it is strongly recommended that the City negotiate a voluntary annual payment in lieu of taxes (PILOT) fee in connection with such sales transaction. Benefits • Property sale will produce one time revenue/cash infusion. Annual property tax revenue will be generated. j • Maintenance/Repair cost savings will be realized. Potential PitfalIs/Liabilities N/A 9 S1 Ii Implementation Strategy/Training The legaUbidding process for the disposal of city owned property is time consuming. Other than sales to governmental agencies, which can take as little as 3-6 months, sale of city owned property to the Public can take anywhere from 9 months to over a year if a referendum is required. • City owned property must be declared surplus by the City Commission (1 month) • Offer the city owned property to other governmental agencies pursuant to the City code (1 month) • Perform survey, title work, appraisal and deed restriction review by the Law Department (2 months) • Solicitation for bid prepared and approved by the City Commission (1 month) • Advertised for 90 days (3 months) • Bids evaluated and presented to the City Commission (l month) • If less than 3 bids are received, pursue a referendum of the electorate. cc: Christina Abrams, Director of Conferences, Conventions & Public Facilities Eduardo Rodriguez, Director of Asset Management r FROM : Panasonic FAX SYSTEM PHONE NO. : Oct. 29 1996 12:06PM P2 DEPARTMENT OF CONFERENCES, CONVENTIONS & PUBLIC FACILITIES The Department of Conferences, Conventions & Public Facilities is responsible for the management and operation of the following facilities. Miami Convention Center The Miami Convention Center consists of a 5,000 seat auditorium, 28,000 sq. ft. exhibition hall, lease agreement with Aetna for the air rights for the Hyatt Hotel, 1,400 parking space capacity garage, lease agreement' for the ground level retail and air rights to the Nations Bank office tower. Coconut Grove Convention Center This is a Convention/Exhibition Center with 150,000 sq. ft. capacity and 580 parking spaces. Orange Bowl Stadium The ,Radium seats 74,000 and has a ten year agreement with University of Miami for college football. The agreement is scheduled for renewal in 1998. Dinner Key Marina The marina has a capacity of 582 wet slips and operates at 94% capacity. Marine Stadium Marina The marina is a dry storage operation with a capacity of 255 slips. Current occupancy is at 88%. Miamarina/Bayside Marina The marina is currently under construction to build 104 wet slips that will'primarily serve transient vessels. The marina currently consists of 11 sightseeing vessels and 21 commercial vessels. Dinner Key Boatyard A Request for Proposal was issued for the private development and operation of the property. Three responsible bidders responded and are currently being evaluated by a committee who will submit a recommendation to the City Commission. Manuel .Artime Community Center The Center consists of two separate structures: an office building and theater. The office building is occupied by a child care center, the Blind Association, HRS, Catholic Services, etc. The theater is rented by promoters for perforrnances and has office space occupied by civic agencies. Bobby Maduro Stadium The stadium has severe damages to the seating areas, press box, roof, etc. and was officially closed this month. The parking lot is rented by a flea market operator on a monthly basis. October 23,1996 Page 1 96) ` b�� r TASK FORCE REVIEW OF COCONUT GROVE CONVENTION CENTER INCREASES Option Number One To increase the parking rate from $3.00 to $5.00. To increase sold out lot from $800/day to $1,500/day. To add a move-in/move-out rate. To increase minimum rental guarantees $2,000 per hall Executive Summary A survey of rates at a comparable exhibition/convention center was conducted (please see attached). The Coconut grove Convention Center rates are lower than most competing facilities in the area Based upon a competing hall of comparable size, our rates using the net square footage fee produced approximately half of the rental income that was produced by the competing hall. Revenue Increases Current Proposed Current Proposed Rate Rate Annual Annual Rate Rate With Increase Parking $3.00/vehicle $5.00/vehicle $58,345 1$97,250 Parking - Sell Lot $800/day $1,500/day $30,400 57,000 Move-in/Move-out $0 Free 1 in/1 out $66,000 $1,000/day for 1 hall $1500/day for 2 halls $2,000/day for entire hall Rental Charge Schedule Increase rate $2,000 per $464,977 $502,977 attached current hall rental Option Number Two To increase rental rates by charging a flat fee for usage of the halls, eliminating the option of a minimum or net rate. � - 819 1i TASK FORCE REVIEW OF MARINA RATE INCREASES Recommendations To increase the rate for sightseeing vessels. To increase the rate for commercial vessels. To eliminate the 20% discount to City residents. Executive Summary A survey of rates at comparable marinas was conducted (please see attached). The City of Miami rates are slightly higher than Dade County in most cases and comparable to surrounding marinas. There are three areas where fees may be increased: sightseeing, commercial vessels and the elimination of the 20% discount to City residents. Sightseeing vessels are a popular and unique attraction at Miamarina/Bayside which generates a great deal of pedestrian traffic and uses City services including trash, water and electricity more than other commercial vessels. We recommend increasing the rate from $.401f to $.80 If Commercial rates are the only rates lower than what is established by Dade County. We recommend increasing the rate to a rate comparable with the County. The 20 % discount to City residents results in a loss in revenue of $145,536 and is offered to 183 tenants. No other marina offers this discount, and we recommend that it be discontinued. Revenue Increases Current Proposed Rate Increase Annual Revenue Rate Rate Per If. Increase 20 % Discount $ 145,536 Sightseeing $0.40 $0.80 $ 0.40 99,120 Commercial 0.20 0.38 0.18 131,358 Total $ 376,014 Benefits 1. Increase revenues to the City. 2. Liveaboards have threatened to file a class action law suit against the City demanding that they receive a 20% discount to City residents currently offered at all City marinas. The elimination of the discount possibly resolves this issue. Potential Pitfalls/Liabilities 1. Historically vessel owners have strongly objected to rate increases. 2. Some vessel owners may refuse to pay the rate increase. 3. We estimate some of our tenants will leave the marinas if the discount is eliminated. Implementation Strategy 1. Change City Ordinance Sec. 53-86 to remove the phrase "...prior to the first day of September and prior to the first day of October...". 2. City Manager to institute an administrative directive increasing the rates. 3. Marinas' staff to send thirty day notices advising of the rate change. 4. Update internal records to reflect rate increase. ' Law Department needs to develop a more aggressive program for eviction of tenants with delinquent accounts. 819 Revenue Increases Current Proposed Current Proposed' Rate Rate Annual Annual Rate Rate With Increase Parking $3.00/vehicle $5.00/vehicle $58,345 $97,250 Parking - Sell Lot $800/day $1,500/day $30,400 $57,000 Move-in/Move-out $0 Free 1 in/1 out $66,000 $1,000/day for 1 hall $1500/day for 2 halls $2,000/day for entire hall Rental Charge Schedule Increase rate as per $464,977 $872,751 attached attached comparable flat rate schedule Benefits Increase revenues to City. Potential Pitfalls/Liabilities Option Number One - should be very little opposition to this proposed increase. Option Number Two - For many current trade and consumer shows, this would increase the fees substantially, with some shows, their use fee would double. Implementation Strategy Prepare City Ordinance recommending rate increase. - Notify promoters of increases on a graduated rate increase basis for those currently with contracts. Update rate schedules to reflect increases. 0 P ....._....__._ ____-......... CITY OF MIA.MI, FLORIDA REVENUE OPTIONS FOR CONSIDERATION The Opportunities Task Force has reviewed various revenue options available to the City of Miami. Each revenue option discussed below includes the revenue source, state statute section, brief description of current revenue with description of changes necessary to implement additional revenue sources and the annual estimated revenue increase.. • Ad Valorem Taxes - the City currently levies 9.5995 million on its real and personal property. The City could, through public hearing, increase the millage to 10 mills. • Franchise Fees - The City presently does not levy a franchise fee on garbage contractors within the City. The City could levy up to 20% on each non-exclusive franchise granted for garbage collection within the City limits. • Utility Service Tax - the Citypresently levies a 10% tax on local telephone service in accordance with Section 166.231, Florida Statutes. The City could adopt by ordinance a telecommunication ordinance levying 7% on intrastate long distance, cellular, pager and telegraph service. • Utility Service Tax - the City presently does not levy a utility tax on water service: In accordance with Section 166.231, Florida Statutes, the City could levy up to 10% on water service within the City limits. • Fire Service Fee - the City presently does not levy a fire service fee for services that enhance the value of property owners in Miami. The City could adopt by ordinance a fire services fee to all property owners within the City limits. • Other User Fees - The City has a number of Enterprise Fund operations (stadiums, convention and exhibition centers, marinas, golf courses, solid waste, parking garages) where operating expenses are not adequately covered by customers using these services. A rate analysis should be performed on all Enterprise Fund operations and revised rate schedules should be adopted by ordinance to recover expense of operations. 946 Ago, • Departmental Charges - The City has a number of Internal Service Fund operations (fleet management, property maintenance, print shop, procurement management and communication services) where the operating expenses are not adequately charged back to the user departments. A rate analysis should be performed on all these Internal Services Fund operations and revised charge back rates should be adopted to recover expense of operation. • Mobile Homes License Fees - The City currently receives from the Florida Department of Revenue an allocation of mobile home license fees collected by the County Tax Collector. There presently is no ability to enforce the collection of this fee and historically around the state not all mobile home owners are paying the annual license fee. We suggest the City review the annual revenues received and if revenue is flat or declining, establish an enforcement program to increase compliance within the City limits. • Miscellaneous Fees and Charges - The City has a large number of fees and charges revenues within the general fund. We suggest an analysis be performed on these fees and charges to update for inflation or increased operating expenditures. • Local Option Gas Tax - The City currently receives the local option gas tax based on population in accordance with an interlocal agreement. We suggest the City review the allocation of the LOGT and determine ability to change allocation methodology based on population, commuting traffic (jobs within City limits) and five year averaging of transportation expenditures. • Road Assessment Fee - The City currently does not levy a road assessment fee to property owners within the City limits to be used to maintain roadways. Many Florida cities have adopted ordinances assessing fees to maintain City roadways. 819 7mi REPORT ON TASK FORCE REVIEW AND EVALUATION OF USHUD FUNDED LOAN AND GRANT PROGRAMS IN AN EFFORT TO IDENTIFY OPTIONS WHICH WILL ASSIST IN RESOLVING THE CITY OF MIAMI FISCAL PROBLEM TASK FORCE MEMBERS: TONY E. CRAPP SR., METRO DADE COUNTY JOSE CINTRON, STATE COORDINATOR, USHUD PETE CHIRCUT, CITY OF MIAMI ELBERT WATERS, STAFF LIAISON NOVEMBER 8, 1996 `819 TABLE OF CONTENTS SECTION I. Report on Sub -Tasks #I and #2 SECTION II. Report on Sub -Task #3 SECTION III. Report on Sub -Tasks #4 and #S REPORT ON TASK FORCE REVIEW AND EVALUATION OF USHUD FUNDED LOAN AND GRANT PROGRAMS IN AN EFFORT TO IDENTIFY OPTIONS WHICH WILL ASSIST IN RESOLVING THE CITY OF MIAMI'S FISCAL PROBLEM I. SUB -TASKS # 1 AND # 2 : Evaluate all outstanding City issued loans, amounts in arrears, and options to recoup funds: and Assess risk and options to cancel loans pledged by the City's Community Development Block Grant (CDBG) entitlement. II. SUB -TASK ACTIVITIES: Obtain detailed schedules of outstanding loans (e.g. economic development, commercial revitalization, housing rehabilitation, housing construction, housing acquisition, Section 108, etc.) by funding source, including all pertinent loan data (e.g. loan date, original loan amount, loan terms, payment schedule and payment amount, amount outstanding, payment status, collateral description, etc.). Obtain a summary schedule and a detailed documentation support package for all outstanding and in -process Section 108 loans. III. RECOMMENDATIONS: It is recommended that the City of Miami take immediate steps to accelerate actions to improve the collection and servicing of outstanding and in -process loans in a diverse portfolio which includes a combination of single and multifamily housing loans, and commercial and industrial business and development loans totaling nearly $83 million from an originally issued or committed total of nearly $111 million. While the quality of the outstanding loans is somewhat varied, most of the loans are assessed as poor to marginally fair in terms of potential repayment ability. The use of private collection services should be explored to enhance the effectiveness of loan servicing. While the possibility of securitizing or privately refinancing some portions of the outstanding portfolio could be explored, the generally poor quality of the loan pool would indicate that this may not be a viable means of enhancing or expediting the recoupment of the City's finds. Mop In addition to taking a more aggressive approach regarding outstanding loans, the City should also take immediate steps to implement more stringent loan underwriting guidelines and procedures to reduce future loan losses relative to ongoing new lending activities. As the safest alternative, the City could immediately suspend all new lending and reprogram those loan funds and repayments or recoveries from outstanding loans to the greatest extent possible to meet other City expenditures in the wake of the current fiscal crisis. IV. EXECUTIVE SUMMARY: Summary Background and Analysis Loaned Executives from the City of Miami Task Force have conducted a review of the City's loan and grant programs for the specific purposes of 1) evaluating all outstanding loans, amounts in arrears, and options to recoup the loaned funds: and 2) assessing the risk and options available to cancel those loans pledged by the City's annual Community Development Block Grant (CDBG) entitlement. As the result of the assessment it has been determined that the City's outstanding loan portfolio represents a significant allocation of federal source loan and grant funds that have been invested in a diverse combination of housing, business, and economic development loans with generally poor to fair repayment ability. It is apparent that even with the prompt implementation of recommended actions, the City will likely sustain substantial losses of the federal source funds invested in these loans and will likely incur loses against its future CDBG entitlement grants specifically due to outstanding Section 108 loans with doubtful repayment ability from project generated revenues. Cost Savings/Revenue Increases (One-time or Recurring/Partial 96-97 and Full Year 97-98) The City has Section 108 loans outstanding and in -process for nine (9) projects totaling $37,445,184. Of this amount, the City Commission can reverse its previous approvals and cancel commitments for two (2) projects totaling $6,645,184 which have not been submitted to USHUD for processing and approval. This action would result in a significant one-time savings by reducing the potential liability against the City's future CDBG entitlement grants (which average approximately $13 million annually) by this amount. In addition, by taking immediate steps to impose more stringent loan underwriting guidelines and/or to curtail lending activities pending resolution of the City's fiscal crisis additional savings could be realized. 9 819 Benefits Implementation of the recommended actions would serve to expedite recoupment of the City's loaned funds and to reduce the City's exposure to lending loan losses and to liabilities against future CDBG entitlements. It should be noted that of the approved Section 108 loans totaling $30,800,000 only $7,600,000 in funding has been drawn down ( $5.1 million for the Southeast Overtown/Park West project and $2.5 million for the Citadel project). Potential Pitfalls/Liabilities The cancellation of in -process Section 108 loans amounting to $6,645,184 and approved Section 108 loans amounting to $23,200,000 for which no funds have been drawn down should be evaluated for the potential of litigation by the applicants for damages resulting from the withdrawal of the City's loan commitment. Implementation Strategy/Timing The recommended actions regarding the suspension of new lending activities and the cancellation of in -process Section 108 loans could be implemented immediately. Other recommended actions regarding improvements to loan servicing and collection and the cancellation of Section 108 loan commitments for approved loans for which funds have not been drawn down can and should be implemented within six months. ATTACHMENTS: -Summary Schedule and Analysis of City Issued/Funded Loans -Schedule of City of Miami USHUD Section 108 Loans -Schedule of City of Miami NET Department Loans as of July 31, 1996 -Schedule of City of Miami NET Department Housing Division Loans as of October 15, 1996 -Schedule of Miami Capital Development, Inc. Loan Portfolio Status as of September 30, 1996 -Memorandum from Herbert Bailey, Executive Director, Community Redevelopment Agency to Merrett Stierheim, City Manager dated October 16, 1996 RE: Section 108 Loans -Memorandum from Elbert Waters, Director, Department of Community Development/NET to Merrett Stierheim, City Manager dated October 4, 1996 RE: Section 108 Loan Program 9�- �19' �D {1) (2) 3 (7} SOURCE OF LOAN PROGRAM FUNDS SINGLE FAMILY I COMMUNITY DEVELOPMENT BLOCK GRANT PAGE NUMBER I OF I3 () (4) $ ORIGINAL '(5) # LOANS (6) $ LOANS POTENTIAL TO (8) # LOANS MADE LOAN AMOUNT OUTSTANDING OUTSTANDING RECOUP FUND S (EXCELLENT, COMMENTS GOOD,FAIR, POOR, NONE) 527 $ 9,745,186.95 438 $ 5,097,086.70 POOR -FAIR: {SEE NOTE 1 } D DEPENDING ON THE QUALITY' IN ADDITION OFLOAN EFFORTS COULD UNDERWRITING BE EXPLORED AND THE TO REFINANCE COLLATERAL THESELOANSIN OR EQUITY THE PRIVATE VALUE OF THE MARKET WITH CITY'S LOCAL BANKS MORTGAGE AND TO - POSITION. SECURITIZE THE MORTGAGE PORTFOLIO IN ORDER TO EXPEDITE THE RECOUPMENT OF THE CITY'S FUNDS i 1 po Cia SINGLE FAMILY COMMUNITY 31 $ 654,465.00 22 $ 295,322.44 SAME AS ABOVE SAME AS ABOVE DEVELOPMENT BLOCK GRANT SINGLE FAMILY COMMUNITY 41 $ 621,919.66 33 $ 326,179.71 SAME AS ABOVE SAME AS ABOVE DEVELOPMENT BLOCK GRANT SINGLE FAMILY COMMUNITY 54 $ 1,048,105.72 37 $ 427,155.16 SAME AS ABOVE SAME AS ABOVE DEVELOPMENT BLOCK GRANT MAUL NUMBER 2 OF 13 MULTI -FAMILY COMMUNITY 49 $20,118,003.00 44 $17,320,472.87 FAIR -GOOD: RE- DEVELOPMENT BLOCK GRANT SUBJECT TO THE STRUCTURING COLLATERAL OF SOME LOANS OR EQUITY SHOULD BE ` VALUE OF THE EXPLORED CITY'S ALONG WITH MORTGAGE MORE POSITION, AGGRESSIVE COLLECTION EFFORTS, ABSENT PRIVATE REFINANCING, FUNDS FROM THESE LOANS SHOULD BE RECOVERED IN 15-20 YEARS. MULTI -FAMILY RENTAL REHAB, 24 $ 5,944,128.00 24 $ 5,772,842.54 SAME AS ABOVE SAME AS ABOVE . a-- a, ­ I - 23 UDAG2ND MORTGAGES USHUDIURBAN DEVELOPMENT 44 $ 976,101.69 30 $ 602,801.89 SAME AS ABOVE SAME AS ABOVE ACTION GRANT PROGRAM WITH THE EXCEPTION THATTHESE LOANSHAVE REPAYMENT PERIODS OF 30 YEARS SCATTERED SITE SINGLE 15 $ 379,345.00 15 $ 371,010.06 GOOD: SAME AS ABOVE FAMILY DEPENDING ON - THE COLLATERAL OR EQUITY VALUE OF THE CITY'S MORTGAGE POSITION HOME SINGLE FAMILY 19 $ 699,583.00 19 $ 687,374.16 SAME AS ABOVE SAME AS ABOVE rAV�.tV UlY1t3t5K 4 V14 13 I- W CODEC 1 $ 1,000,000.00 1 $ 1,000,000.00 POOR - FAIR TOTAL AMOUNT OWED TO THE CITY INCLUDES $1.0M CONSTRUCTION LOAN AND $750K FOR THE CITY'S COST FOR SITE ACQUISITION. THE CITY SHOULD BE IN A POSITION TO RECOUP APPROX. $500K IN T' HE NEXT 4-6 MONTHS FROM THE CLOSINGS ON PHASE II OF THE MELROSE TOWNHOUSE PROJECT. THERE EXISTS SOME UNCERTAINTY ON THE REMAINING $500K AND $750K WHICH IS TO BE • SATISFIED WITH THE CLOSE-OUT PAGE NUMBER 5 OF 13 CITYWIDE LOAN I COMMUNITy PILOT PROGRAM DEVELOPMENT BLOCK GRANT MODEL CITY COMMUNITY PILOT LOAN DEVELOPMENT PROGRAM I BLOCK GRANT PAGE NUMBER 6 OF 13 10 G $ 186,918.00 $ 375,644.86 OF PHASE ffi (46 UNITS). 5 $ 94,384.15 NONE - POOR: ONLY 1 LOAN ALL FOR $34,964-75 OUTSTANDING HAS BEEN PAID LOANS ARE IN IN FULL. LEGAL ACTION. THE JUDGMENTS OBTAINED ON 3 LOANSSHOULD BE PURSUED BY COLLECTION ACTION AND JUDGMENTS SHOULD BE PURSUED ON THE OTHER 2 LOANS. 10 NONE - POOR: COLLECTION T$222,088.83 AS OF 7/31/96 ACTION SHOULD ALL LOANS ARE BE PURSUED ON IN LEGAL THE ACTION JUDGMENTS WHICH HAVE BEEN OBTAINED ON ALL OF THESE LOANS. OTHER CDBG& COMMUNITY 17 $13,984,441.31 14 $13,532,367.88 POOR. COLLECTION UDAG LOANS DEVELOPMENT AS OF 7131196 ACTION SHOULD BLOCK GRANT $278,850.51 OF BE INTENSIFIED & THE ORIGINAL AND LEGAL USHUDIURBAN AMOUNTS HAVE ACTION DEVELOPMENT BEEN EXPEDITED ACTION GRANT CONVERTED TO WHERE PROGRAM GRANTS BY THE WARRANTED. CITY COMMISSION. 2 LOANS TOTALING $675,000 ARE IN LEGAL - ACTION. OF THOSE REMAINING MOST ARE SERIOUSLY DELINQUENT AND HAVE DOUBTFUL REPAYMENT ABILITY. PAGE NUMBER 7 OF 13 MAW CAPITAL USHUD 49 $ 1,877,652.00 3 $ 34,708.55 FAIR - GOOD: DEVELOPMENT SECRETARY AS OF 9/30/96 INC. HUD LOAN DISCRETIONARY 3 LOANS PROGRAM GRANT OUTSTANDING ^` ARE IN CURRENT PAYMENT STATUS. MIAMI CAPITAL COMMUNITY 188 $13,977,497.28 85 $ 5,663,376.59 POOR - FAIR: LOAN DEVELOPMENT DEVELOPMENT AS OF 9/30/96 COLLATERAL IN INC. CITY OF BLOCK GRANT 90 DAY ADDITION TO MIAMI LOAN DELINQUENCIES CORPORATE PROGRAM AND AND PERSONAL NON-PERFORMI GUARANTEES Nr LOAN MAY COVER AMOUNTS SOME PORTION TOTAL OF THE $1,006,396.78; ANTICIPATED $521,479.80 IS UP LOAN LOSSES. TO 30 DAYS DELINQUENT; AND $4,135,500.31 IS CURRENT. PAGE NUMBER 8 OF 13 MIAMI CAPITAL 00 DEVELOPMENT DEVELOPMENT COMMUNITY 22 $ 852,000.00 DEVELOPMENT 15 $ 404,968.55 FAIR -GOOD: SAME AS ABOVE INC. LITTLE BLOCK GRANT AS OF 9/30/96 HAVANA LOAN $367,986.42 OF PROGRAM THE OUTSTANDING AMOUNT IS CURRENTIN PAYMENTS AND THE BALANCE OF $36,982.13 IS NON- PERFORMING. MIAMI CAPITAL COMMUNITY 9 $ 971,500.00 3 $ DEVELOPMENT DEVELOPMENT 65,429.13 SAME AS ABOVE INC. BAYSIDE BLOCK GRANT 0/96 7;$30,4473.13 LOAN PROGRAM OF OUTSTANDING AMOUNT IS CURRENT AND $34,956.00IS NON- PERFORMING. i PAGE NUMBER 9 OF 13 SECTION 108 COMMUNITY 9 $37,445,184.00 7 $30,800,000.00 POOR - FAIR: NOTE THAT 2 LOAN PROGRAM DEVELOPMENT USHUD BLOCK GRANT NOTE: NOTE: SEE NOTE 2 APPROVED - I PROJECT FOR THIS REFLECTS PROJECTS HAVE $5.6 M NOT YET LOANS SEE NOTE 3 FUNDING APPROVED BY APPROVED OR GRANTS THRU USHUD DC IN FINAL SEE NOTE 4 THE USHUD OFFICE STAGES OF ECONOMIC -1 PROJECT FOR APPROVAL BY SEE NOTE 5 DEVELOPMENT $1.5M USHUD INITIATIVES APPROVED BY PROGRAM CITY ATTACHED IN COMMISSION THE TOTAL BUT NOT YET AMOUNT OF SUBMITTED TO $970,000.00 USHUD -1 PROJECT FOR $5,145,184 APPROVED BY CITY COMMISSION BUT NOT YET SUBMITTED TO USHUD TOTAL 1,115 $110,857,675.50 805 $82,717,569.21 PAGE NUMBER 10 OF 13 R 00 p-NOTE 1: FJ A NUMBER OF THE SINGLE FAMILY REHAB. LOAN PROGRAM CASES HAVE DELINQUENT OUTSTANDING BALANCES THAT WERE ACCUMULATED FOR A PERIOD OF SEVERAL YEARS WHEN THE CITY'S COLLECTION POLICY WAS LESS AGGRESSIVE THAN IS THE CASE AT PRESENT. IN MANY L THESE INSTANCES, A PAYMENT PLAN WORKOUT HAS BEEN ACHIEVED. IN OTHER CASES WHEN A CLIENT EXPERIENCES A FINANCIAL HARDSHIP OR PROBLEM, THE PROGRAM GUIDELINES ALLOW FOR A REDUCED PAYMENT OR WAIVER TO REDUCE THE SCHEDULED PAYMENT TO AS LOW AS $20.00 PER MONTH FOR ONE (1) YEAR. DUE TO THE NATURE OF OUR CLIENTELE SOME LOAN FUNDS WILL BE LOST DUE E FORECLOSURES BY THE S $20. MORTGAGE HOLDER IN THE ABSENCE OF CITY ACTION, ASSUMING THE AVAILABILITY OF FUNDS, TO BUYOUT THE FIRST POSITION IF THERE IS FIRST SUFFICIENT EQUITY IN THE PROPERTY TO PROTECT THE CITY'S INFERIOR MORTGAGE POSITION. NOTE 2: IF ALL CURRENT AND PROPOSED COMMITMENTS ARE APPROVED THE CITY'S OUTSTANDING OBLIGATIONS WOULD EXCEED THE POTENTIAL USHUD LIMIT PER ENTITLEMENT PUBLIC ENTITY OFT MILLION. THIS LIMIT WOULD BE TRIGGERED PURSUANT TO USHUD CFR 570.705(A)(I)(i) WHICH ESTABLISHES THE CAP PER ENTITY IF THE TOTAL OF NATIONWIDE SECTION 108 OBLIGATIONS REACHES 50% OF THE AUTHORIZED TOTAL IC $1.5 BILLION. IN THE EVENT THAT THIS $35 MILLION CAP IS NOT TRIGGERED, THE CITY WOULD HAVE THE ABILITY TO MAKE SECTION I08 LOANS TOTALING UP TO FIVE (5) TIMES THE CITY'S ANNUAL CDEG ENTITLEMENT OF APPROXIMATELY $ I3 MILLION, FOR A TOTAL LIMIT OF $65 MILLION. NOTE 3: THE CITY COULD DECIDE NOT MOVE FORWARD ON 2 PROPOSED SECTION $5,145,184} WHICH HAVE BEEN APPROVED BY THE CIT108 PROJECTS TOTALING $6,645,184 (E.G. I FOR $1.5 MILLION AND I FOR Y COMMISSION BUT WHICH HAVE NOT YET BEEN SUBMITTED TO USHUD. IN ADDITION TO THE PROPOSED SECTION 108 LOAN OF $1.5 MILLION THE FLAGLER STREET PROJECT ANTICIPATES CITY OF MIAMI CAPITAL FUNDING OF $6.0 MILLION WHICH HAS NOT BEEN APPROVED BY THE CITY COMMISSION. PAGE NUMBER 11 OF 13 MOREOVER, THE SECTION 108 APPLICATION FOR THE HOMEOWNERSHIP ZONE PROJECT FOR $5,145,184 IS CONTINGENT ON FEDERAL APPROVAL OF AN ECONOMIC DEVELOPMENT INITIATIVES GRANT APPLICATION IN THE AMOUNT OF $3,679,416. NOTE 4: FOUR (4) PROJECTS APPEAR TO HAVE FAIRLY GOOD PRIVATE SOURCE REPAYMENT POTENTIAL AS FOLLOWS: S.W. STH STREET PLAZA - $ 5,600,000 HAS A STRONG PRIVATE DEVELOPER AND MAJOR TENANTS EDISON PLAZA CENTER - $2,700,000 HAS A STRONG MAJOR TENANT IN WINN DIME SUPERMARKETS. HOWEVER, THE PROJECT IS CONTINGENT ON THE FINALIZATION OF J A JOINT -VENTURE AGREEMENT BETWEEN THE TACOLCY ECONOMIC DEVELOPMENT CORPORATION AND BELAFONTE TACOLCY, INC. WYNWOOD FREE TRADE ZONE - $10,000,000 PURSUANT TO A COURT ORDER THE CITY APPLIED FOR SECTION 108 LOANS FOR A TOTAL OF $10 MILLION, $5.5 MILLION FOR PHASE I AND $4.5 MILLION FOR PHASE 2. THE $4.5 MILLION FOR PHASE 2 IS CONTINGENT ON THE SUCCESS OF PHASE I WHICH THEREBY HELPS TO LIMIT THE CITY'S IMMEDIATE EXPOSURE. THE PROJECT APPEARS TO HAVE POTENTIAL FOR SIGNIFICANT ECONOMIC DEVELOPMENT AND JOB CREATION IMPACTS. THE PRINCIPAL SOURECOF REPAYMENT IS THE PROJECTED RENT PAYMENTS FROM THE FACILITIES TO BE DEVELOPED WITHIN THE ZONE. CITADEL OFFICE BUILDING - $ 2,500,000 THIS PROJECT HAS CHANGED IN FOCUS FROM A RESTAURANT/SPORTS BAR COMPLEX TO A STRICTLY OFFICE USE CONCEPT. PARTIAL LEASING HAS BEEN ACHIEVED AND SPACE BUILD -OUT HAS COMMENCED ON THE GROUND FLOOR.THERE IS INDICATED INTEREST IN THE SECOND AND THIRD FLOORS OF THE BUILDING. PAGE NUMBER 12 OF 13 E NOTE 5: G } THE SECTION 108 LOAN FOR THE SOUTHEAST OVERTOWNIPARK WEST PROJECT IS FOR $8.0 MILLION THE APPROVAL FOR TINS LOAN WAS REQUESTED TO FINANCE A BUY-BACK OF OUTSTANDING REDEVELOPMENT BONDS AS A MEANS OF MITIGATING THE CITY'S RATING PROBLEMS RELATIVE TO THE ISSUED BONDS. $5.1 MILLION HAS BEEN DRAWN DOWN AGAINST THE TOTAL LOAN ALLOCATION OF $8.0 MILLION. THE COMMUNITY REDEVELOPMENT AGENCY DOES NOT EXPECT TO DRAW DOWN ANY ADDITIONAL FUNDS DURING THE FY96-97 FISCAL YEAR. THE EXPOSURE OF THE CDBG ENTITLEMENT IS FOR THE FULL $5.1 MILLION PLUS THE INTEREST DUE IN ACCORD WITH THE SECTION 108 LOAN TERMS. PAGE NUMBER 13 OF 13 Friday, November 08, 1996 PAGE NUMBER 13 OF 13 I1:00AM ill ` City of Miami U.S. HUD Section 108 Loan Program N Page 1 CITY OF MIAMI NET LOAN PORTFOLIO AS OF JULY 31. 1996 CITYWIDE LOAN PILOT PROGRAM Loan Name of Date of Maturity Ethnic Target Original Outstanding Amortized Next due Interest late Fees Paid In Delinquent Legal Payment Telephone Number Borrower Loan Dates Class Area Amount Amount Date Paid Collected Full Action Amount Number 7-7WWI LBenilez-B.B.6Sons'. 10121188, 01/OV94 Hispanic AllapatWh, 44,Q§;251 708.78 44,244A7 08101194- :;2,308.81 0.00 - - - 708.78 Judgement 7.10.54 7-799602 1_ Silver -Mayfair Wall 10/21/88 11/01/97 Anglo Wynwood 47,000.00 45.253.98 1.746.02 04/01/90 459.14 81.69 MOVED -NO ADD 45.263.98 Judgement 551.29 573-3337 7799064 RRot>insorJhop O Leuridry:'; 16,31,88 r:04,61,94 Blade OveAorm -• 45 qgo oo;;: .39,687.79 5,33221 j01/919 : -54262 _ .' 0.00 -- 39,667.79 Judgement .154.41 .a Above Overtown P. W. Cleaners 111 193 0801196 Blade Overlown 5,000.00 2,21279 2.767.21 01101/95 157.19 0.00 GEORGE WYSONG See above L 154.41 624-1515 7-799006 V.D.Fieern nA1AF*Mi ,.: 12127/88..- :02J01/96 Black Wyrmcod . ;-:.: 34984 5;;- :::0.00 34.964.75 - - : -. : 2,7a230 ..:,- 0.00 PAIDINFULL-,.; 500.00 573-0333 7-799010 R.3 G.Ped6 hamlFiairs 07/24/89 01/01/03 Black AIW ttah 10,000.00 6.640.81 3.459.19 11/01/94 87270 190.06 6,540.81 Legal 75.00 6384743 TOTALS 166,918.00 94,384.15 92,533.85 7.127-76 271.69 0.00 92,171.36 MODEL CITY PILOT LOAN PROGRAM Loan Name of 'Date of Maturity Ethnic Target Original Outstanding Amortized Next due Interest Late Fees Paid in Delinquent Legal Payment Telephone Number !Borrower Loan Dates Class Area Amount Amount Date Paid Collected Full Action Amount Number 7-702003 - L6 W. Parker/Parker Set. 03/09/88 . 02/01/98 Blade Model City ` 41,129.50 •-' 25,437.80 15.691.70 03/01/94 -": 4.324.18 298,28 25.437.80 Judgement 300.00 756.0970 7-702004 P.F. Rasheed/Rasbeeds J. 03104188 06/01/98 Blade Model City 20,000.00 6.386.80 13.613.20 10101/95 2,088.49 513.17 Judgement 200.00 576-1840 7-702009 -R B T. Seari/Davrs ff9L'- 03/11188 .. 06/01/99 Black Model City '21 1250'0 11.435.87 9,689.13 05/01/94 , 2,418.96 21523 11.435.87 Judgement 200.D0 757-9573 17-702011 J. P. CasseauslFumidure 04/12J88 11/01/97 Blade Model City 19,963.00 5.037.68 14,925.32 09/61/95 1,968.48 126.30 Judgement 200.00 407-2744388 7-702015 W. 6 M. Calhourn/ K.w the - 12IM88 06101/98 Blade Model City 42,927.38 41,817.79 1.109.57 09/01/92 995.43 41.817.79 Judgement 150.00 758-5445 7-702g16 M.B. C. Sheffer/Sherrer 6 06/17/88 1010198 Black Model City 00 14,5.00 e.558.79 7.941.21 03I01/95 1.067.80 Judgement 200.00 759-5006 17-702017 . T. Benjamin/ B. Pj6Aing_ , 10/25/88 05/01/94 Blade Model City. 75 000.09 54.527.77 20,47223 09107193� _ 1;SB247 200.00 - 54,527.77 Judgement -7-702018 J. d M. Sweet/ Jasper Pa. 02103/89 11/01/94 Blade Model City 50_000.00 9.144.68 40,855.32 0210V95 4.036.75 750.00 Chapter 7-4194 G. WYSONG Judgement 250.00 757-2468 7-702020 B. HardemomWs Market 08113190 08101102 Blade Model City 25,000.0Q 20,131.45 4;868.55 -06/01/97 . :124.55. -, 11.10 - 22,741.75 Judgement 100.00 PRINC.ONLY 7-702021 V. V. Tim sorJr. Bus Lin. 08/14/90 12/01/03 Black Model City 66.000.00 41.610.20 24,389.80 04/01/96 8,162.70 50.00 Judgement 500.00 756-8551 TOTALS 375,6M.88 222,088.83 153,556.03 26,769.81 2,164.08 0.00 165.960.98 OTHER COBG LOANS Loan Name of Date of Maturity Ethnic Target Original Outstanding Amortized Next due Interest Late Fees Paid In Delinquent Legal Payment Telephone Number Borrower Loan Dates Class Area Amount Amount Date Paid Collected Full Action Amount - Number 11-110159 Martin Luther 10n9 ED,Cr"--'."-12l12l82.-. -�12fl2J02 Black -Model City, -"::. �:', g00,000 _00-: ;",.394,937.37 - 5,06263 07f0I/95_;'-"48,943:37 ":`Monthty,, = '- _ -':` -.- --PENDING-- 1500.00 757-7652 :8-7086W Grovites/Goombay Pura 03120185 Black Coo Grove 500,000.00 500.000.00 0.06 Pending OLGA RAMIREZ 108 LOA Legal Dept SEE CGLDC 443-3213 . 17-701001 . `..- AllapatleA Med. Phannary- 11/14168". _Pending -11/01/06 - WlNIH ABapatlah. . -. ...; : � Q,OP -- �. .': 213,693.00 -86,307.00 0910U96 : ;!;137 614,06, WJ/SIO - .. .6164.51 635-5203 16-?iW12 Tacol. Ekxul.DevJSpic Spa _ 03=88 01/01/96 Black Model City 28,000.00 0.00 17,833.93 9.40838 J/A/J/0 PAID IN FULL 74259 757-3737 I'MIM05 • 7acol.Ec orLDe47Ed�-on Mk _ ' - 09121IM9 i-04/01/14 -Black Model Cdy -"; ? '"i]. SOIfOQ., - -. 162,631.36 - .9.66ti d l .071611.96 - 7.9416 ,141.000.00 ;- 1/A/JfO`_ ... -. , ....: ;.. - ; ' 2875.24 7573737 fl-3U 01 Belafonte Tae/Edisori Pla 07/18183 03/31/35 Black Model City 400,000.00 400,0W.00 0.00 10/01/96 J/A/J/0 3000.00 757-3737 7.611''001 - : CAMACOU T�2AOE,�LrE7�! ER:.. 04/13/611 _g5/0I- Hispanic -. L�Hevane :.-,- A`. { 0,,,,O�. i :--. i16.021.64 .6,s7t1.36 s:d9(D 't .,i: b`- j2--%MonllilY...: - - .- :550.94 .642.3870 17$12002 C"601.1 PARKING LOT 05124/88 .. lismit03 Hispanic LHevana 33.000.00 26.734.03 6,265.97 0910V96 382442 Monthly 197.85642-3870 17.6i20U3 Xobtiean.Mtd,-L?- b3 41N9 Black-.`- Edison i/R - ,=:x �r�.:..'..11ib,000.00 ::.0.00 07/201922, , .-'F1711JAM:.:. - LAW DEP.T .:_�,I50.000.00 - Legal::.:` - _,19f1o.13 r7-61120g6 ., --. Edward J. Geffb 03/20/91 .03/01N4 OS101I08 Angb Wynwood 500,000.00 365 571.83 134 425AT 08/01198 4,690.61 f4enihty 2893.24 8 573-2465 7fi12007 Z-_Medbrs� tom' Pi.. Stole,_ y:..-: '.ov10/9i . ovol/09 eladr - Mode! Modell �7! ;_:v57S,6W.00 --0.00 . '. 0?IO 193 tir ... -_ .- �,i C ... LAW OEP,Y: - .,;625,000.00.: Legal.' .. . ::.-_..-.. 7.668003 . .,.. J.6 A Rashidllanjabil- 05/05/89 09/05189 Black Coc. Grove ..:.3%y�.'...r�...r£Os 4,600.00 � � 0.00 , 697.63 GKLWT . 339 32 Re5o 896-534 07/1 U96 - 448-1733 7412b00 � P - - -- - eoplesDrugsJLely( W.,'' ;. 09%27191 ..`.03/07/06 Black-, Overlown. `-. ` _r.:-�i Q0�1 't.:':135000.00 - 0.00. _�`G} AFf7 „' .,, ,. -. - - Reioi05-564 _ - OT11 5 . HatianAmer.Found.lne. 061 193 12Jo1/98 BLACK EdisonLJR 139350.51 0.00 6.00 GRANT Motion495-729 1026/95 Disbursed: 139350.61 758.3338 UDAG 7-116041 Civic Pstk-Plaza .: ::.. 09 dims ` owli 0 Hispanic Anapatla h ; 80 , , ..:.:445,578.65 31.51215 -. OB/01198 ;+:=:4$199.05 - : hiomhly = - - 184200 J. Cetdan - r71820- , - -. B'rscaynoview Icam Dev. 0=0186 10/01/21 Black Overtovm .-��3jr090 5.643.000.00 66,13,000.00 0.00 05/01/02 00 JJ.. Cerdan ' ::AeiwTwPWLid_02/05/B7 .' ��101/79 NMM OveAovn _ T4Mbbb0.00 "- a6 J J00, _ - .:- - ,.- ,._ .., .- ,-: --.- . _ .. -:•.0 - Cerdao7112001 TOTALS 13.9&1.441.31 13,532,367.68 293.954.48 402.499.92 0.00 675.W0.00 5�t Lil ✓ 44 I 19 L CITY OF MIAMI DEPARTMENT OF NET HOUSING DIVISION LOAN PORTFOLIO AS OF OCTOBER 15, 1996 SINGLE FAMILY (CDBG) $ 9,745186.95 N = 1�,$S� C '�+ i•��" 100000-600014 L SINGLE FAMILY _ c, 654 465.00 �# ��II59 Cb'jc.ny!) (CDBG) 700000-702122 L= �I G, 4 ( I U�) SINGLE FAMILY (CDBG) 621,919.66 h = a ;11°� ('a4Is) 800000.808620 L 6-v� SINGLE FAMILY 1,048,105.72 (CDBG) 900000-902406 �'�R j{I li �° 11113 yi 4IIi11 t � T t i L .ttl td ! MULTIFAMILY ) (CDBG 20,118,003.00 'b,3a�.k�� CN 6l6(4o k) 610000-610085 Lc q �k,yiy (.t{ b e o0 (4 MULTIFAMILY 5,944,128.00 (RENTAL REHAB) 630000-630074 UDAG (2nd Mortgages) 976,101.69 . d ��S `�I,1� ri �� 625000-625737 e it i� � C (-? S 1)1) SCATTERED SITE 379,345.00 (Single Family) 752000-752016 !f HOME 699,583.00 (Single Family) k%%4qzj CVaY�N, 2l 935000-935020 L r' I1 Tso �,� Ct3700!� CODEC (CODEC) 640075 295,322.44 3,1 326,179.71 3,020.881 427,155.16 4,424.581 17,320,4 7 2.87 .83,670.58 5,772,842.54 63,512.061 602,801.89 27,247.091 371,010.06 1 687,374.16 3,517.881 i��I�I�� �I7 819 2 M WMI CAPITAL DEVELOPMENT, INC. LOAN PORFOLIO STATUS REPORT as of September 30,1996 { t EDA1CiTY i EDAiCiTY i City 1 of i LittieHavana i 1 I 1 PERCENTAOE ( JOBS NOTES: i EDA I Recapitat j _ E�@•�s'� Impt-Expt i HUD I Miami { Project I �� ! ._, ¢_I Bayside i EDA•HAERIRLF I __t TOTAL i 1 Orig. I I Outs I Presv I Creat I f ten= I — 11: HUDfguresinuudastwobansfmm •�•a�=���ss•f s•��==n" , 1 1 I i_l I 1 7,812.475-00 1 1 1 1 I 1 I 1 1 Miami Citywide Devetopment, Inc. GRANTS i I 4.800.000A01 375,000001 112,500.001 960,000.001 399,561241 1.000.000.001 971.500.00I 1,998,000.001 18.029A75.001 1 i ( 1 12-Recavedesare not lnchdedInthe Total. 1 1 13- City recoveries inckde$149,766.00from I 1 125,000.001 37,500.001 (399,59124)1 221,500.391 1 (221•500M)1 1 I 1 ! I 1 Supersave Sups et given to the City 1 I I I I 1 i 1 I (37500•00)1 I { (125,000.00){ I I ( I 1 1 1 f 1 { 1 s a Gift and zed r�ry, uzixrx�aviM ` -- -3 Total tralude�n 1 4 I4- front µ aI ^Y'",aa�''P�".+...�.'x< S`'vrcz:$"�`s� ,,.^ .,.' �..3{ GarceSCommerclalCoOege.Butdoesnot ` V -.: w? M.sl,,,;,,,,,,,,-••,c - 's *.., �...,.-as t intiudeS 44.0()D.00 from Pete's Fountain ifXr22 1MH, >;D AfE ... .` ' 's i9T 8: 09000zI��� 604 ii i �i W ' ^ 1 (($221, 1 �� ---1 �' a'a�-{ � -1-•��$'�'"-! �•=f �•"'•=a�1 j 00.39) j — I ===a= 1 s: (Sn1.5oo�sy Monies returned w C ryrRLF _��:••� No. Outs. Loam { •�==u�•�•�_! 1 441 �'� I 5( ��" — ! a>� 0 I 31 851 151 1 1 f 31 j 331 { 188 1 1-1-1 1 1 2231 11531 from BAYSIDE. — I —1 6- ($399,561 24) Monles returned to City/RLF STATUS -Current I 1 1 2.621,654AS 1 t 415,642231 I 0.001 34.708.551 4,135,500.31 1 367,986.42 I 30,473.131 0.001 987.03651 1 0.001 8593,203.60 1 597,503,391 27.4% 1 19%1 81.1% 1 1 1 from HUD. 5.6%1 1 17- Additions since transfer from LHOPto -30days - 60 days 1 76,023S91 I 0,001 0.001 0.01311 0.001 0.00 I 0.001 521.479.601 tim1 0.00 1 0.001 0.001 0,001 0,001 timo t 0.0% 1 0.0% j I I City RLF $ 413,872.00 -90days { 0.001 0901 0,001 0.001 319.757.901 0.001 0.001 105,000.001 153208.641 424,757.g(i1 984296.'i51 1.4%F 3.1%1 4.11%1 1 18.-Soo,Op0.00GinzaSushlLoartAswrttedby 9.3%1 1 ( TeriyaldTempteo(Bayside,Iaa.S90M. -Nan•ped. i 72.411.001 0.001 0.001 . 0.001 686,638.581 36.982-131 34,956.001 I i —1— 19: Fully reearered charged -of wens are Outs. Portfolio t 2,770,089.04 1 415,84223 1 0.001 34,703.551 5.663.376591 404,96855 1 65,429.131 1245.347.151 10.599.761241 33.7% 1 100.0% 1 1 I rdported as Loans Paid. —1 10•The Community DevewpmentRLF was Amortization i 1.343.910.961 69,157.77 I 0.001 205291AS 1 1.468.40131 1 207.031AS 1 94,570.871 125,652.851 3,524,017.661 112% 1 1 1 1 returned to theCitja(WamtSS53Mw/no No. Chalge-Off Loans I— 0t ___� 1 tea. 01 �s..��a1 1 -- 1 181 411 21 - art 41 ��� f . 31 �__===��I 1101 { 1 — j — I-- I recourse. 1 416( 949111-Miama Rim GmupwanswerocanceWby City of Miami Resolution 196-11$19:201A { 421 Amort¢atim t 510,189.89 1 0.00 1 0.001 153,130291 89621324 1 41,615,551 6,749.0T { 1 9234.32 1 I 1,617,132.36 1 i 5.1% 1 1 } 1 I i—f—i LEGAL -Charged Off 1 I t 2,361,647.11 I 1 O.OD 1 I 0.001 i I 1 568,071.71 1 1A24,08528 1 33,384A5 I 651250M 1 105,765.681 0.001 5.6442M.16 1 (427A5598)i 18.0% 1 -Reoavaries { (136.732.48)1 0.001 0.001 (45,89I.50){ (238,12655)1 CMDM1 (6,680.45)1 No.O(L.oansPaid 1 Tit at 41 281 621 51 21 21 1741 1 1 7521 12111 AmaadP*M I 4,526,546.18 1 0.0D j 150,000.00 1 916,450.U0 1 4.075.419.66 1 165,000.00 1 113,500.00 ( 77,000.001 10,023,918A4 I 31.9% Loam Assumed j 1 I I l (40.000• )t ! 40.000•001 0.001 0.001 { { 1 { TOTAL l 11512,363-18 I 505,000.00 ( 150,0DO.00 1 1,877,652.00 1 13,977,497281 852.000.00 1 971,500.00 1 1,563,000.00 1 31AW.032.46 1 100.0% 1 1 13911 33131 01 ,s- Merrett Stierheim ro City Manager Herbert J. Bailey :ROM ` Executive Dir&tt Community Red( CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM DATE: SUBJECT: REFERENCES: Agency ENCLOSURES: October 16, 1996 Section 108 Loans FILE: Currently, there are two Section 108 loans involving the CRA. The first loan, 90-MC-12-0013, whose approval dates back to 1990, was requested by the City Manager's Office to finance a buy-back of outstanding Redevelopment Bonds, as a means of mitigating the City's rating problems. The total loan allocation is for $8 million dollars, but only $5.1 million have been drawn -down. The CRA does not expect to draw -down any additional funds in connection with this loan during the current fiscal year. The exposure of CDBG entitlement with reference to this loan is for the full $5.1 million, as required by HUD regulations. The second loan, 93-MC-12-0013, an economic development effort of the CRA, constitutes a pass through loan in the amount of $2.5 million, of which all moneys have been drawn -down. The exposure of CDBG entitlement is also for the full amount of the loan, i.e., $2.5 million. However, in. this case, the loan is secured by a 2nd mortgage on the property (last appraised at $5 million), held jointly with HUD, as well as an Assignment of Rents, Issues and Profits; an Assignment of Contract of Sale of the Mortgaged Property; a personal Guarantee Agreement executed by the principals of the Citadel Arena Corporation, a Promissory Note guaranteeing the full amount of loan, as well as interest, fees and expenses; and a Stock Pledge Agreement, in compliance with HUD underwriting guidelines. The only senior debt to ours is that of the Bank of Tokyo, in the amount of $690,000, which the developer is in the process of refinancing to take advantage of lower interest rates and long-term financing. With reference to a Bank of Tokyo letter, dated October 8, 1996, please note that said letter was submitted to the City pursuant to paragraph 11 of the Agreement between the City of Miami, the Bank of Tokyo and the Citadel Arena Corporation which specifically stipulates that the Bank of Tokyo shall take no action to accelerate a foreclosure action without giving the City the_iight to cure a monetary or non -monetary default by the borrower. In this specific case, the -amount in arrears arose as a result of delays in the closing of the refinancing of the project, and an agreement has been reached between the developer and the bank to cure said monetary default. Also noteworthy is the fact that on August 1st, 1995 the City issued $22 million Special Obligation Non -Ad Valorem Revenue Bonds, Series 1995 (Administration Buildings Acquisition Project) for the purpose of (i) acquiring the FPL building; (ii) acquiring a building in the Southeast Overtown/Park West Redevelopment District for the CRA; and (iii) providing funding for the Hadley Park project. Bond indenture documents specifically mention a $2 million figure for the acquisition of a building for the CRA. In the event a building could not be acquired, the CRA had anticipated being able to maintain a reserve account in order to protect the City's interest against any potential defaults with reference to this project. However, the $2 million in bond proceeds previously identified in the City's FY 95-96 budget have yet to be transferred to the CRA. 9 6 - 5*19 r Finally, both Loan Guarantee Agreements underwent Public Hearings and Determination of No - Significant Impact procedures, were approved by the City Commission by Resolution and were duly approved by the City Attorney and executed by the City Manager and the Secretary of Housing and Urban Development. Should you have any questions, please do not hesitate to contact with me at extension 6025 �i so • ' Merrett R. Stierheim City Manager FROM':' Elbert L aters, Director Community Development/NET CITY OF MIAMI. FLORIDA INTER -OFFICE MEMORANDUM GATE October 4, 1996 FILE SUBJECT : I Section 108 Loan Program REFERENCES' ENCLOSURES: With respect to the proposed Special Oversight Committee on U.S. HUD Section 108 City loan projects, attachbd, please find a brief financial and status report on existing and pending •108 projects. Please be advised that developers have not been able to secure the involvement of specific local area banks with the approved Section 108 Loan applications. Many of these proposed projects were only recentl? approved by HUD. Accordingly, they remain in the development stage where bank financing has not yet been obtained. In addition, please be informed that the Section 108 loan application of $1.5 million for the Flagler Street Marketplace recently approved, but not yet submitted by the City, represents an actual liability of approximately $2.4 million, which includes interest to be repaid by the City, from future years CDBG allocations. We are also in the process of submitting an Economic Development Initiative (EDI) grant to U.S. HUD. This grant however, requires that the City apply for accompanying Section 108 loan, as such, the City will be required to submit one Homeownership .Zone Section 108 loan in the amount of approximately $7 million. The Special Oversight Committee may wish to reconsider the above, in light of the City's current financial crisis. If you have any additional questions, please feel free to ask. ELW/vh cc: Carlos F. Smith, Assistant City Manager Roger Carlton, Acting Assistant City Manager William Hampton, Acting Assistant City Manager George Burges, Acting Assistant City Manager <memos>smerrett 96.- 819 a According to U.S. HUD CRF 570-705(A)(1)(1): Any one entitlement may be limited to $35 million in outstanding commitments/liabilities. Currently Have Another Of the available $25.3 million under HUD contract $ 5.6 million to -be approved $30.9 million Committed Iiabilities $ 4.1 million Capacity available $35.0 million Total Capacity as per HUD $ 4.1 million wy - $ 1.5 million To be submitted (Flagler Street) - $ 7.0 million To be submitted (CRA/Homeownership Zone 108) (-$ 4.4 million) In excess of HUD capacity City of Miami U.S. HUD Section 108 Loan Program Project jAmount Istatus S.E. Overtown/Park West (CRA) $8,000,000 On -going. Citadel Restaurant/Office $2,500,000 Near completion/leasing space. Edison Plaza Center $2,800,000 Approved by HUD; City and HUD documents not completed. $670,000 (EDI) _ Approve_d by HUD; City and HUD documents not completed. Wynwood Free Trade Zone (Phase 1) _ $5,500,000 Wynwood _Free Trade Zone (Phase II) Goombay Plaza $4,500,000 $2,000,000 _ _ Recently approved by HUD (July, 1996), HUD agreement not yet signed by City. — In receipt of HUD/City contract --drafting City agreement with developer. $300,000 (EDI) S.W. 8th Street Plaza $5,600,000 Recommended by Jacks_on_ville HUD. Not yet approved_ by Washington. _ Flagler Street Marketplace — TOTAL: Section 108 $1,500,000 $32,400,000 Approved by City Commission on -September 12, 1996. To be submitted to HUD. ------. ___ -------------------- --- -- EDI $970,000 (7J h-i GL Cp City of Miami ! Section 108 Loan Program PROJECT tXJ APPLICANT ADDRESS PRINCIPAL PARTY I� Wynwood Free Trade Zone Dade Foreign Trade Zone, Inc From N.W. 22nd Street north Mr. Oded Meltzer, President/Dade Foreign Trade Zone side from 2nd Ave. to 5th Street and Mr. Martin Comart Village Oaks/64 Cowpen Road, Miami Lakes, FL 33014 Goombay Plaza Coconut Grove Local Development Corporation, Inc. 3677 Grand Avenue Coconut Members of Groynes United to Survive (GUTS), Board of Grove Directors of Coconut Grove Local Development Corporation, Inc. Mr. David Alexander, Exec. Director P.O. bOX 330075 Miami, FL 33233-0075 Edison Plaza S.W. 8th Street Plaza Flagler Street Marketplace Tacolcy Economic Development Corp. (TEDC) S.W. 8th Street Plaza Ventures, Ltd. City of Miami, on behalf of Downtown Development Authority Southeast Overtown/Parkwest City of Miami/CRA Citadel Citidel Arena Corporation N.W. 62nd Street and Belafonte Tacolcy Corporation and Board of TEDC 2nd Avenue Mr. Lorenzo Simmons, President 645 N.W. 62nd Street Miami, FL 33137 S.W. 8th Street Mr. Harvey Taylor Taylor Development 1815 Griffin Road, Suite 102 between 2nd and 3rd Avenues Dania, FL 33004 Downtown Flagler Street Ms. Patty Allen Director, and Mr. Adam Lukin, Design Proj. Manager City of Miami/Downtown Development Authority 200 Biscayne Boulevard Way, #1816 Miami, FL 33131 Overtown Redevelopment Mr. Herbert J. Bailey, Director District City of Miami/Community Redevelopment Agency 300 Biscayne Boulevard Way,'Suite 401 Miami, FL 33131 49 N.W. 5th Street Daniel Airas Mr. Herbert J. Bailey, Director 300 Biscayne Boule J Way, Suite 401 it fl; CITY OF MIAMI-NET Revised: ApdI 24, 19,9� SECTION 108 LOAN PROGRAM Note: (1) Pursuant to U.S. HUD CFR 570-705(A)(1)(1), the amount any one entitlement public entity may receive may be limited to $35,000,000.00. (2) In addition, the following limitation applies as per CFR 570.705(A)(2), no commitment to guarantee shall be made ... (whereby the amount already obligated) ... equals to five times the amount of the most recent (CDBG) grant made to the public entity. (3) Example, 1996 - 1997 CDBG grant is $13,320,000.00 X 5 = $66,600,000.00 total amount of loan guarantees permitted. Page 1 r REPORT ON TASK FORCE REVIEW AND EVALUATION OF USHUD FUNDED LOAN AND GRANT PROGRAMS IN AN EFFORT TO IDENTIFY OPTIONS WHICH WILL ASSIST IN RESOLVING THE CITY OF MIAMI'S FISCAL PROBLEM I. SUB -TASK # 3 : Identify current and alternative uses of CDBG and other USHUD funds to help reduce the current budget shortfall. II. SUB -TASK ACTIVITIES: Obtain and review a copy of the most current Grantee Performance Report listing all outstanding CDBG/USHUD funded projects/activities and current related financial reports. Obtain and review a copy of any proposed allocation/action plan pending approval which includes funding for future projects not reflected in the Grantee Performance Report. III. RECOMMENDATIONS: It is recommended that the City of Miami take immediate and more aggressive steps to reprogram its current and unspent prior years allocations of Community Development Block Grant funds which are estimated to total $ 39,055,963 in an effort to fund other eligible City activities with a particular emphasis on eligible capital projects. IV. EXECUTIVE SUMMARY: Summary Background and Analysis Loaned Executives from the City of Miami Task Force have reviewed various documents relating to the current allocations of the City's Community Development Block Grant (CDBG) and other USHUD funds in an effort to identify options for and the extent to which the reprogramming of these funds would be feasible and appropriate in an effort to resolve the current fiscal crisis. Based on this review it has been determined that in April, 1996 the City submitted to USHUD its Annual Action Plan for the Fiscal Year starting on June 1, 1996 and ending on May 30, 1997. 96 819 i This Action Plan outlines the proposed expenditure of funding totaling $29,571,150 for the following programs: Community Development Block Grant (CDBG) HOME Investment Partnership Program (HOME) Emergency Shelter Grant (ESG) Housing Opportunities for People with AIDS (HOPWA) TOTAL $ 16,680,150 (Estimated Entitlement of $13,709,000 is included in this figure) 4,038,000 494,000 8,359,000 $ 29,571,150 With the exception of the CDBG funding, these funds are special purpose grants targeted to addressing particular community problems such as the lack of affordable housing (HOME), special needs housing for AIDS victims (HOPWA), and special needs housing for the homeless (ESG). CDBG funds are allocated for a variety of eligible activities meeting high priority needs in the low and moderate income target areas within the City of Miami in the categories of social services, public improvements, economic development, housing and preservation, and program administration. With the exception of spending caps in two (2) of these categories, the City can expend these CDBG funds in any manner it .chooses for eligible activities and projects. The two areas with federally mandated spending caps are program administration and social services. The cap for program administration is 20% of the City's entitlement amount plus program income, and the cap for social services is 15% of the City's entitlement amount plus program income. In effect then, taking into consideration the limitations imposed by the special purpose HOME, ESG, and HOPWA grants, the City has the flexibility to expend all of its CDBG funds less an allowance for program administration costs on eligible capital or public improvement projects. In an effort to respond to the City Manager's request to Departments for creative solutions to assist in resolving the City's fiscal crisis, the Department of Community Development/NET has reviewed its current and prior year funding allocations to determine the availability of fiords for reprogramming. Based on this review the Department has recommended 1) the reprogramming 1 of $1,370,232 in allocations to fund eligible projects thereby reducing the burden on the City's General Fund, and 2) a $10 million Community Development Float Loan to fund shortfalls in City Capital Improvement Projects. f It is recommended, in view of the City's crisis specifically as it relates to an estimated shortfall of $18 million in the FY96-97 capital budget, that a more aggressive approach be taken to the reprogramming analysis. In this context the entire FY96-97 CDBG allocation of $16,680,150 1 should be considered for major reprogramming as well as all prior years unspent CDBG allocations estimated at $22,375,813 as of 5/31/96 according to the City's Grantee Performance 96-- 819 r Report submitted to USHUD in August, 1996. This combined total of $39,055,963 should be thoroughly reviewed and evaluated for reprogramming potential. In ' addition, given that a thorough review may take some time, the City can take advantage ' of the unspent balance available in its CDBG program account by utilizing the CD Float Loan process to immediately fund eligible capital projects with the maximum repayment term of 2.5 years with the available and to be reprogrammed funds serving as the repayment source. Cost Savings/Revenue Increases (One-time or Recurring/Partial 96-97 and Full Year 97-98) Not Applicable Benefits Implementation of these recommendations would provide a source of funding for the City's capital budget shortfall, which is estimated at $18 million. Potential Pitfalls/Liabilities With a major reprogramming of CDBG funds, funding for activities meeting other community needs would have to be deferred. In addition, capital projects funded with CDBG funds will have to meet USHUD requirements for direct benefit to low and moderate income persons and will have to pay federal wages for construction workers in accordance with the Davis -Bacon Wage Act. Implementation Strategy/Timing The recommended actions could be implemented immediately. ATTACHMENTS: Memorandum from Elbert Waters, Director, Department of Community Development/NET to Merrett Stierheim, City Manager dated October 4, 1996 RE: Community Development Financial Assistance to City's Cash Flow 96 819 TO ` Merrett R. Stierheim City Manager CITY OF MIAM1, FLORIDA INTER -OFFICE MEMORANDUM GATE : October 4, 1996 FILE : SUWECT Community Development Financial Assistance to City's Cash Flow FROM : • REFERENCES Elbert L. ters, Director Department of Community Development/NET ENCLOSURES: I would like to submit for your consideration the following short term assistance initiatives to aid in resolving the cash flow problems of the City of Miami: 1} $10 Million Community Development (C.D.) Float Loan to finance Capital Improvement Projects that are fund deficient. This can be approved by the City Commission after an advertised public hearing that approves the C.D. Float Loan, and amends the 1996-97 CDBG application under the following conditions: a) 'The Float Loan will be at 0% interest and will not exceed a repayment term of 2.5 years. It will need to include a repayment plan. An extension on repayment requires a new public hearing and reinitiation of the process. b) The Float Loan does not include repayment or cost already incurred. That event would trigger preagreement cost which are not eligible under federal regulations. c) The Capital Improvement Projects directl benefit low and moderate income individuals and must be eligible for funding. d) The Capital Improvement Projects will pay federal wages for construction workers as dictated by the Davis Bacon Act. 2) Increasing the allocation of Community Development for' Code Enforcement by $450,000.00, from $450,000.00 to $900,000.00. This would fund the 21 inspectors operating in the low and moderate income areas of the City, and leave a balance of eight (8) inspectors to be funded by the General Fund. To obtain the funding, it would require a public hearing at the City Commission to amend the existing CDBG application. 3) Increase the funding for the Community Redevelopment Agency (CRA) from $150,000 to $570,232.00. The CRA Board approved such increase without amending the CDBG application. This will increase the City's General Fund by $420,232.00. Again, this could be accomplished through a public hearing at the City Commission to amend the CDBG application. 96-- 819 �:r 4) Create a new project to be called Interim Assistance with $500,000 from CDBG funds. This activity may be undertaken on an interim basis, in low and moderate income areas exhibiting objectively determinable signs of physical deterioration, where the City has determined that .immediate action is necessary to arrest the deterioration, and that permanent improvements will be carried out as soon as practicable. The execution of special garbage, trash and debris removal, including neighborhood cleanup campaign, but not regular curbside collection of garbage or trash in an area, is eligible. Under this category, an allocation of $500,000.00 from Community Development would alleviate the City's General Fund and permit the funding of temporary employees and City of Miami Department of General Services Administration sanitation employees to work in special pickups in designated areas and neighborhood cleanup campaigns. The allocation of these funds would follow the same procedure as the other items. Items 2,3 and 4 require a reallocation of $1.,370,232.00. We would attempt to do this reallocation causing the least disruption possible to existing programs. We are presently working on closing out existing projects and developing a list of alternatives to create a Contingency Fund for these initiatives. r If you concur with these short-term cash -flow initiatives, please let me know so that we may initiate the federal allocation process immediately. ELW:mb cc: Carlos F. Smith, Assistant City Manager Roger Carlton, Acting Assistant City Manager William Hampton, Acting Assistant City Manager George Burges, Acting Assistant City Manager ��� 819 5 r REPORT ON" ASK FORCE REVIEW AND EVALUATION OF USHUD FUNDED . LOAN AND GRANT PROGRAMS IN AN EFFORT TO IDENTIFY OPTIONS WHICH WILL ASSIST IN RESOLVING THE CITY OF MIAMI'S FISCAL PROBLEM I. SUB -TASKS # 4 AND #5 Review and quantify the amount of all available grant reimbursements not received but still available for pursuit. Identify all grant funding opportunities to address the current funding crisis. H. SUB -TASK ACTIVITIES: Obtain and review a current comprehensive schedule of grant awards and draw downs which indicates dollar amounts of pending reimbursements and dollar balances remaining to be drawn down from federal and state sources. Obtain a status report on all pending reimbursements not yet received indicating any problems in the processing of such requests. Obtain and review current and proposed CDBG/USHUD project allocations and identify alternative federal or state grant opportunities which could reasonably be pursued. III. RECOMMENDATIONS: Based on a review of the available reports and other documentation regarding pending reimbursements from federal and state sources it is recommended that the City provide and commit the necessary resources to pursue the full and complete receipt of funding reimbursements totaling approximately $ 2,959,448. i It is also recommended that the City continue to identify pending reimbursement opportunities and aggressively pursue the repayment of the funds due. IV. EXECUTIVE SUMMARY: Summary Background and Analysis Loaned Executives from the City of Miami Task Force have reviewed available information relating to grant awards, draw downs, and pending reimbursements from federal and state 96 s19 [i sources. The available information clearly indicates a substantial and ongoing problem the City has had in obtaining reimbursements for activities and programs implemented by the Neighborhood Jobs Program. 'It appears that the key factors related to this problem are 1) inadequate administrative staff to provide effective fiscal management for the numerous grant programs operated through this program; and 2) lack of adequate financial reports and records to substantiate and facilitate the preparation of fiilly documented reimbursement requests. Information provided regarding the status of pending reimbursements indicate that an amount totaling approximately $469,068 is due to the City from the federally -funded Department of Health and Human Services Refugee Employment and Education Program; and that an amount totaling approximately $ 2,490,380 is due to the City from various employment and training implemented through contracts with the South Florida Employment and Training Consortium. These pending reimbursements represent a subtantial amount of funds which should be pursued for full reimbursement in accordance with the respective grant terms and requirements. In reviewing the City's current and proposed CDBG/USHUD allocations it was clear that there are numerous areas of high priority need in the City of Miami. Particular areas of need are social services, housing, and economic development. In this regard, while it is clear that the available resources at the state and federal level are constrained, the City should and must pursue all avenues of grant opportunities and attempt to leverage scarce City funds to the greatest extent possible. Particularly, the City should vigorously seek funding through the grant programs of the U.S. Department of Commerce Economic Development Administration, the U.S. Department of Health and Human Services, and the U.S. Department of Housing and Urban Development. Cost Savings/Revenue Increases (One-time or Recurring/Partial 96-97 and Full Year 97-98) The recovery of these pending reimbursements would result in a major one-time recoupment of funds. However, by improving the fiscal and program management related to these employment and training programs, the City can avoid accumulating a backlog of reimbursement requests in the future. Benefits The most significant benefit is the recovery of funds which will help to ease the City's cash flow problems. Potential Pitfalls/Liabilities The major problem which could adversely impact the City's ability to obtain these reimbursements would be the lack of financial records and documentation to fully substantiate the payment request to the funding sources. ��- 819 r �A -�1 Implementation Strategy/Timing Efforts to pursue these pending reimbursements can proceed immediately with the commitment of adequate staff resources and support from the City's Finance Department in terms of reports and financial documentation of expenses incurred and paid by the City. ATTACHMENTS: -Schedule of Pending Reimbursements from the U.S. Department of Health and Human Services for Contract Year 94/95 and 95/96 -Schedules of Pending Reimbursements from the South Florida Employment and Training Consortium for Program Years 93-94, 94-95, and 95-96 -Memorandum from Elbert Waters, Director, Department of Community Development/NET to Merrett Stierheim, City Manager dated October 1, 1996 RE: NET/Neighborhood Jobs Program Re -structuring CITY OF MIAMI NET/Neighborhood Jobs Program Department Of Health And Human Services Community Aid Family Strengthening Project Refugee Employment and Education Program .......... ............ . . . . . . . . . . . . . . ....... .. . 90RS0065/01 94/95 238,276 -0- ... 238;276 90RS0065162— F-95/96 230,792 -0- 230,792 . . . ..... .. .. -4 ............ ... .......... .......... ... .. . .. . ... CITY OF MIAMI NEUNEIGHBORHOOD JOBS PROGRAM Contract and Budget Information South Florida Employment Training Consortium Pik 93-94 C.C5- Cv, CITY OF MIAMI CD NEUNEIGHBORHOOD JOBS PROGRAM 4 Contract and Budget Information South Florida Employment Training Consortium 0D 4� PY 94-95 II -A 294-027 464,178.00 342,994.82 121,183.18 1 246,510.00 246,507.00 3.00 217,668.00 96,487.82 121,180.18 II-C 204-017 474,519.00 399,727.32 74,791.68 254,134.00 246,510.00 7,624.00 220,385.00 153,217.32 67,167.68 OF WHICH $57,082.62 PAID TO PARTICIPANTS III 304-002 304,017.00 151,341.91 152,675.09 100,318.00 100,318.00 0.00 203,699.00 51,023.91 152,675.09 III 394-007 509,000.00 300,324.84 208,675.16 254,396.00 254,395.01 0.99 254,604.00 45,929.83 208,674.17 DHRS 993-007 61,900.00 54,746.00 7,154.00 51,430.00 51,206.00 224.00 10,470.00 3,540.00 6,930.00 114 794-006 48,761.00 0.00 48,761.00 7,941.00 0.00 7,941.00 40,820.00 0.00 40,820.00 II-B 494-014 582,991.00 506,011.29 76,979.71 212,960.00 199,540.00 13,420.00 370,031.00 306,471.29 63,559.71 OF WHICH $306,471.29 PAID TO PARTICIPANTS MASON PY'95 70,000.00 42,983.46 27,016.54 70,000.00 42,983.46 27,016.54 0.00 0.00 0.00 O AIx.: ;::_2 I '36G.90. :.t 791? I29 G4x 7t7 636 ,.1,i93 689400 J ki CITY OF MIAMI NEUNEIGHBORHOOD JOBS PROGRAM Contract and Budget Information South Florida Employment Training Consortium PY 95-96 r CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM TO Merrett R. Stierheim DATE : October 1, 1996 FILE City Manager SUBJECT :NET/Neighborhood Jobs Program Re -structuring FROM : Elbert aters, Director REER FENCES : Revised October 15, 1996 Community Development/NET ENCLOSURES: In response to your general directive to: • Aggressively pursue accelerated grant drawdowns from state and federal governments; • Aggressively pursue recovery of state and federal grant reimbursements; • Evaluate all available prior year federal funds for reprogramming; • Maximize all indirect and direct charges to grant funds; and • Aggressively pursue state and federal grant fund opportunities, I am submitting this proposal for your review and consideration. Consistent with some of the comments made by Ms. Warren, NET Community Programs Administrator in her letter to you dated September 25, 1996, the NET/Neighborhood Jobs Program is currently staffed with several individuals who have limited or no experience in the field of Employment Training Services or Contract Management. In addition, the division has benefited from City operational services without recognition of the cost for those services reflected in the division's operating budget ( rent, annual audit expenses, etc.). This is a grants funded entity and with proper staff and management, can operate within the limits of the funding provided, including picking up all of those operational costs that have previously been supplied by the City. In Ms. Warren's memorandum of September 25, she recommended several actions that we feel will move the division into that posture. However _ I am vehemently opposed to the creation of a new department to carry out our current mission for Job Development and Training. We have requested the authority to establish four (4) new grants management and two (2) clerical support positions. If this request is granted, it will give us the opportunity to bring in individuals with the professional experience and expertise to fulfill the specific requirements of federal and state funded projects. More importantly, the infusion of professional grants management staff will allow the department to provide a greater and more efficient level of service to our economically disadvantaged and unemployed citizens. To enable us to accomplish these programmatic and financial enhancements within current budget limits, we propose to delete nine (9) currently filled positions in the division and transfer one (1) additional individual to a vacant Sr. Job 96-- 819 a ri Training Specialist position. The savings from then personnel changes will exceed the cost for the new positions, and will provide revenue to cover our unbudgeted operational expenses. The positions to be deleted are presently held by 7 non -classified employees and 2 classified employees. Upon your approval of this re -structuring plan, we will make this information available to the Department of Personnel management for processing. The individuals selected for layoff in many cases were assigned to the Neighborhood Jobs Program for reasons other than their qualifications to perform the jdb. In other cases, after many years of "non" or "under" performance, the management time and energy required to retrain, monitor behavior, attitudes and attendance, is a drain on the division's limited resources. In providing an assessment of one area of service, Ms. Warren has stated, "Six (6) positions were assigned to enhance the staffing level in the NET Offices and provide job placement assistance to the community. Since starting employment with the City in March, I can assure you that the cost benefits with the current structure are not there. Even though the six positions are JTPA grant funded, the level of service provided JTPA certified clients is minuscule at best. In addition to their creating contract and budgetary compliance issues, a general unstated attitude has been that their special circumstances which led them into the division did not impose a requirement to contribute to the work of the division. Consequently, over the last several years, grant requirements have not been fulfilled, performance levels have not been met, reports have not been filed, and reimbursement documents have not been processed. Without the reimbursement requests, the funding sources have not provided payments and the City has, in many cases, carried operational costs, including salaries and fringe, from general funds." Under this re -structuring and re -organization the division will be able to respond to your call for reduced costs and increased revenue. We will be able to move quickly on securing funds that are owed to the City (approximately $700,000 from PY 95-96) for services provided, and we will be in a position to aggressively respond to new funding initiatives. As the attached chart indicates, $142,621 will be available to cover City related expenses. In addition, prior year grant reimbursements may still be available which would provide additional assistance during this crisis. If you approve the proposed reorganization and financial restructuring, please indicate with your initials below. I look forward to discussing this proposal of restructure as soon as your schedule permits. Approved: Merrett R. Stierheim Carlos F. Smith, Assistant City Manager Angela Bellamy, Assistant City Manager Roger Carlton, Acting Assistant City Manager George Burgess, Acting Assistant City Manager Bill Hampton, Acting Assistant City Manager Gwendolyn C. Warren, NET Community Programs Administrator Attachments (1) City Manager 96- 819 In ri ATTACHMENT NET/Neighborhood Jobs Program Reorganization and Proposed Cost Savings PY 96-97 I. peleted Potions and Cost Savings ;,•.,.: U. 4\.::.vv .........: .., .n...:......:..........:.: ,.,z.:.{••. • v v+., ..}.. hG, ::�: ;•i}.ti:..{.::•1•::•iY;.: x'fitl to �e;I.Yattit:............:...,.. �:�:::::. is v.::::.iuv.:......,.....:. yi}�.::..i: :..:.:.�.�::. �,: :.. �:::::::::.,.. ..; .......:........:..: ....n... .....�QJ��:..........:... v. . �t� •:::::.�:.�:::::u:::::::.:.. ;::CCU atr4fi�ii�>. . .... . .. �::::.: �:::. �:.� �s>`i'8's�:AarithE�#:c�:::�:::�::: •:::::....:::::::::::: :.. �::::.: �:. �. �. ,....w...... .v. .. n .... v x. a \\ \...v .M.::•...,....., ,..u...+ .n...., n.... ..... .......:.::.................,...,...........,.........:...........::...................:.::.�:>:::.�:!:::: ........... ...,.....::. •! ::?•:•:::.u::. ..u,, .t. .::........r...r.::::::::1•i::.:•::.•v:::•;:.•v:: n•. �::: n.::: ..•.....:.:. yy�y�. IIC3'::Y:•i:vtii , i'. �'. dti::: iiii::•}}:v::::! i•:� +iiiiii:?i:^:...:........ Hannah, Delphine 262-95-6319 Sr. Job Training Specialist 639 8706 $25,986 Dorce, Jean 266-25-9921 Sr. Job Training Specialist 3297 8706 $44,834 ** Gainer, Allen XX'X7= Jules, Herbert 591-40-5319 Resource Specialist 9428 9249 $24,451 Killings, Fredrick 264-89-6157 Sr. Job Training Specialist 8403 8706 $27,457 Peoples, John N. 263-11-2999 Vocational Counselor 3295 7018 $41,848 De Cespedes, Gelcys 266-70-6919 Sr. Job Training Specialist 684 8706 $31,245 Johnson, James 422-58-9950 Sr. Job Training Specialist 9335 8706 $25,462 Thompson, Karen 261-27-8303 Sr. Job Training Specialist 8783 8706 $28,831 Sears, Phillip 264-76-1508 Community Involvement Specialist 3895 7021 $37,492 +" Soto, Manny xxxxxxxxxxx XXXXXX )00(XX)= 5:�•::::.<:::'s::i:>::>::�?>s::::::;:?:;?rs::s::>:::>:::<� �:><:d:<:<z<�:::::>::>::>::i:>isi.'t::::::s::?;:»:<:>::'s:i<'ss>»! a . :«, •• :�:;>#:>:>i::;E;>;>:::»:<:Ei::::i:<::z>::>:::::;:::<::::<::::<::::>:<:>E>:::»::>::>:<>:::>::;; mom ............................. ** Allen Gainer is being transfered from Vocational Counselor to Sr. Job Training Specialist ** Manny Soto is a Housing Rehabilitation Officer, his annual salary is not included as a salary savings because he is not included in this division's budget. However, he is assigned to this department. II. New Position Reauest Administrative Assistant iI Currently Budgeted as Temporary Position Typist Clerk III Currently Budgeted as Temporary Position Program Planner/Grants Coordinator Currently Budgeted as Temporary Position Finance Services Coordinator $39,528 Client Services Coordinator $52,000 MIS Analyst $39,528 96- 819 I ATTACHMENT CONTINUED III. Total Salary and Fringe Benefit Savings A. Deleted position cost savings for the remaining three quarters: $324,971 (October 1, 1996 - June 30, 1997) B. New.position request amount for the remaining three quarters: $142,109 (October 1, 1996 - June 30,1997) C. Position cost savings reassigned to City overhead cost and expenses: $142,621 (All cost assignments are subject to the approval of the funding source) d 96- 819 M. �A City of Miami Parks & Recreation Department Management Review Team Summary of Recommendations A. Revenue Enhancements 1) Eliminate park user fee waivers. 2) Increase park user fees when appropriate (Estimated revenue increase $301,325.00). 3) Develop a park marketing program to enhance revenues (existing and new). 4) Establish a process to credit the Parks and Recreation Department for existing and new revenues generated by the parks. • DCPS Contracts • Special Events (movie ventures, festivals etc.) 5) Review concession permits/revenues (including mobile vendors). 6) Review/simplify process to obtain Grants (Federal, State, Private). 7) Sell inappropriate park properties (or revert them to original donors). B) Organization/Structure Improvements 1) ,Conduct a cost/benefit analysis of recent transfer of the Park Maintenance Department to the Public Works Department. C) Operating Practices 1) Establish a preventive maintenance program for park facilities and equipment. 2) Consider maintenance costs and other operating costs prior to the approval of Capital Improvement Projects (i.e. swimming pool). 3) Develop a system to improve internal communications (staff meetings, employee interaction meetings) 4) Establish the right of managers/directors to hire, promote and discharge employees based on qualifications and job performance. 96- 819 o r City of Miami Parks & Recreation Department Management Review Team Summary of Recommendations - Page 2 C) Operating Practices ( continues) 5) Remove "politics" from the employee hiring and promotion process. 6) Establish a "bottom - up"/participatory budget preparation and monitoring system. 7) Design and implement a comprehensive employee training program. 8) Develop an operating manual for Parks and Recreation facilities/employees. 9) Develop a procedure for processing/prioritizing work orders. 10) Restructure procedures for bidding/selecting contractors. 11) Develop a formal vehicle maintenance and replacement program (referred to the Fleet Management Task Force). w v� 96- 819 City of Miami Parks & Recreation Department Management Review Team ` Executive Summary Our Team conducted meetings with Parks and Recreation Department employees. We met with the Director and the Assistant Director, conducted two meetings with twelve park managers and two meetings with seven senior staff members. The "Interactive Improvement Meeting" technique was used to encourage participation using the "brainstorming" and "brainstacking" methods (see methodology in the Appendix). The meetings lasted approximately 5 hours each. The Director and the Assistant Director were excluded from the employee meetings. Our task force also visited four typical City of Miami Parks (Douglas, Grapeland, Hadley and Moore). All participant groups were very candid and objective in their comments. We are impressed with the attitude of the park managers and the staff members and the candor that they exhibited at all times. The cooperation and assistance that we received from the Director and the Assistant Director deserve recognition. They provided us with accurate information about the important issues/problems affecting their department. They worked hard and went the extra mile to satisfy all of our information requests in a timely manner. Parks and Recreation is a department with 65 full time employees and approximately 150 part timers, with an operating budget for fiscal 1997 of $4,924,082.00. There are approximately 121 parks of which only 25 are considered active. The active parks are manned by a park manager with a very limited or non existent staff. Parks Maintenance was at one time part of the Parks and Recreations Department. Recently, the Maintenance Department was transferred to the Public Works Department. Park managers feel that they have no control in the schedule and actual maintenance work to be performed in their respective parks including the adequate preparation of the facilities for special events. According to the employees, the city does not have formal preventive maintenance programs for the parks. Park managers claim that the processing of repair/maintenance work orders is inadequate and receives low priority. In the opinion of the park managers, the present organization structure causes communications problems and undermines the authority/ability of park managers to provide services. In our opinion, both groups, park managers and staff members have a remarkably similar perception of the current situation. Employees claim that they do not have controlAnput over their budget. They feel that continuous cuts in their budget throughout the years have undermined their performance and currently they are doing the best they can. The employees feel that the Parks Department is low priority for the City of Miami. There is a great deal of frustration expressed by employees regarding current hiring and promotion practices. They feel that "politics" plays a major role in this process. Employees claim that promotions are not based on qualifications and job performance. This is also the case in the bidding/selection process to hire outside contractors for the City of Miami. 95- 819 r City of Miami Parks and Recreation Management Review Team Executive Summary - Page 2 j On October 4, 1996, the Director of Parks and Recreation, Mr. Albert Ruder proposed by memorandum to the City Manager the following cost reductions to the budget: 5% Reduction = $357,681 10% Reduction = $606,893 15% Reduction = $738,612 We did not analyze these figures in detail. We agree with the proposed reduction of 4 % Cola and Anniversary for all full-time employees. However, the ten and fifteen percent scenarios include the closing of two year-round pools most of the year except for the 8 weeks summer period. This may contribute to the deterioration of the facilities if maintenance during the inactive periods is not properly performed. This action could also conflict with plans to use the facilities for revenue enhancement programs. Park managers and staff members claim that current park fees are low and are not applied consistently. They do not see the revenues they generate since the fees collected from users go into the city general fund. They feel that these fees could be increased in a manner that would not drastically affect the users and still produce additional revenues to the City of Miami. We believe that a revision of the park user fee rates should be conducted to reflect present market conditions. We understand that the last review took place in 1988. Park managers provided specific suggestions for increasing the fees in their respective parks. These suggestions for revenue increases are available upon request from the park managers and staff. Any proposal to increase park user fees would require action and approval from the City Commission before it is implemented. A relimina valuation of recommendations made b the ark managers and the staff P rY Y P 9 resulted in potential additional annual revenues of approximately $300,000 from increased user fees. These fees would come from organizations that charge the children for their services but pay little or no fees to the parks (i.e. baseball academies). These recommendations don't include capital investments or contributions from the private sector. I Park managers and staff identified several institutions and businesses that could become i potential marketing partners of the City of Miami to promote new revenue generating 1 programs at city parks. Some of these organizations are colleges and universities, movie companies, media, professional sports teams, sporting goods manufacturers etc. i t City of Miami Parks and Recreation Management Review Team Executive Summary - Page 3 Parks and Recreation employees feel that there is little communication between management, staff and park managers. Many employees claim that there are no formal/regular staff meetings held between park managers and the department management/staff, We feel that the operations of this department could be enhanced by improving the overall communications aimed at producing "input and buy -in" from the bottom of the organization up through top management. During our meetings and visits to city parks, we were able to observe that park managers do not have standard procedures to operate the parks. Park managers are doing a good job under the circumstances but they lack formalized training. The processes for issuing permits for the use of the facilities and for the operation of concession stands is not consistent. According to the employees, capital improvement projects for park facilities are frequently approved without taking into consideration the costs to maintain and operate the new facility/expansion. Federal and State Grants are among the most important sources of revenue for the Parks and Recreation Department. Employees feel that the process to obtain Grants is complicated and inefficient. It is the consensus of our team that the Department of Parks and Recreation is not only an asset to the City of Miami and the community in general, but a potential for revenues that could contribute to making the department a more self-sufficient unit. In our opinion, the quality of services can be improved without creating additional burden to the taxpayers. This could enhance the image of the City of Miami in the eyes of the community. Our Team will be available to the City Manager for clarification and questions regarding the issues discussed in this report. Mr. Leland Hunter and Mr. Larry Adams will be available to provide additional assistance in a pro-bono basis if needed. Respectfully submitted, Larry Adams- Team Leader Gorman Daniels Ramon Ferrer Raymond Gallardo Leland Hunter 96-- 819 i FA Step #1 What: How: Step #2 What: II,FM Step #3 What: How: TEAM PROBLEiVI SOLVING Identify the major problem which is keeping you from doing a perfect job. Brainstorming and Multi -voting. Identify the root cause or causes and verify the conclusions (data gathering and analysis. Brainstacking and Multi -voting. Solution Selection. Brainstorming and Multi -voting. Step #4 What: Designate Implementation Plan. How: Brainstacking and Multi -voting. i. I &i► L 1 r•. oil 11910, A meeting that is conducted in a specific manner so as to stimulate a group into creative output. Originally developed in the U.S. in the 1940's, Brainstorming when properly done can bring amazingly creative and useful ideas out of a heretofore non -creative group. This technique has been used by the .Japanese, who have been traditionally less creative than other Asians, to produce their many miracles of the past fifty years. Unfortunately, few U.S. organizations have used Brainstorming correctly, even though it was developed here. Copyright 1994 by Leland Hunter 96-- 8`19 5di bRAINSTACKING DEFINITION The act of "stacking" a body of knowledge from a group through effective Discussion Leading Techniques. We have found that individually each member of a group has knowledge of a discussion subject that they are not aware they possess or do not think is of importance. The synergy created by artful discussion leading brings this total knowledge out of each member of the group and adds to the total "stack" of knowledge of the group ... sometimes producing awesome results. Frequently, the total "stack." of a group who professed they knew very little about a subject will approach the total "stack" of a group of experts in the field. Copyright 1994 by Leland Hunter r Multivoting techniquds are important because they are used to help the Team Members reduce their large brainstormed or brainstacked list into a smaller list of no more than five items. The "Multivoting Technique" has tremendous value because it helps to reduce the quantity of suggested items on the team's list rapidly. More importantly, multivoting helps to dissolve members' identification with any particular suggestion and arrive at consensus. This technique also helps to reinforce the Team Members as a working group, rather than just individuals. The Multivoting Technique is a value rating system to narrow the list of themes down to at least three but no more than five items. Copyright 1994 by Leland Hunter 1 96- 81,9 :!. � r �►.. ,.! .: ° .. �, .. i City of Miami Parks and Recreations Management Review Task Force Meeting 1 Date: October 17, 1996 Attendees: Larry Adams - Team Leader Gorman Daniels - Metro -Dade County Parks (Retired) Ramon Ferrer - FPL Terry Griffin - City of Miami Leland "Bud" Hunter - LH Management Consultants Alberto Ruder - City of Miami Summary of Main Problem Areas ( As presented by the Director of the Parks and Recreation Department, Alberto Ruder): Organizational Issues 1) Parks and Recreation Department (PRD) not a high priority for City of Miami (asks but does not get - PRD Budget only 6% of total City Budget) 2) Lack of stability in the City (four reorganizations within the last two years) 3) Recreation Budget has been considerably reduced over the last few years 4) Lack of performance indicators for the department 5) Park ground maintenance and property maintenance problems (Electric work, plumbing, grass cuffing, etc are not under the control of parks department - They are under the Public Works Department) 6) Union restrictions limit ability of management to hire/promote the "best qualified person for a particular job". 7) Lack of consistent payroll procedures for the departments 8) Complicated/inefficient grant management system process 9) Lack of effective employee evaluation program 10) Contracts and concessions in parks are not under the control of parks and recreation (Handled by Asset Management) 11) Inadequate work force working at parks (lack of control - homeless living in parks, vandalism, negative impact on city-wide recreation programs etc) 12) Lack of effective workmen's compensation management 13) Parks transportation vehicles are old and not reliable 14) Maintenance costs not considered in capital project funding decisions (Swim Pool example - emphasis on initial cost and not maintenance costs 9 `6 819 i i I - Revenue Generation Programs 15) The departments abilityto generate revenues is limited (Miami's 4th poorest major city in the nation) 16) Special events and functions fees are low 17) Lack of consistency in the application and waver of park usage fees (park user fees are waived for some youth and senior citizens organizations) 18) Parks do not have adequate concession areas 19) Mobile vendors operate in parts without vending permits 20) Some park properties do not generate revenues or provide recreational 1 opportunities but represent a maintenance expense j 21) The rates for paid events at city parks have not been changed since 1988 22) Revenues collected from paid events in parks are not properly accounted for. 23) Recreational programs produce little revenue (basically break even) 1 24) Lack of a police athletic league in the City of Miami ` 25) Money generated by Sports Authority and police funds might be going to outside agencies (Boys Clubs, etc) 26) Lack of promotions (public relations through media for park programs and activities) ( Budg_e1ary Issues I 27) PRD does not control its budget 28) Lack of specific procedures to handle financial transactions. 29) PRD has no input on budget ` 30) PRD budget is not related to the department's goals and objectives 31) Lack of information on methodology used to calculate department budget (Amounts determined by budget department) Operations/Maintenance Issues 32) No preventive maintenance program for park facilities I 33) Parks facilities are old and they are not energy efficient 34) No comprehensive plan of action for PRD 35) Lack of training programs for employees 36) Resources do not allow PRD to complete accurate physical inventories 37) Lack of controls to monitor the time and attendance of park employees (high employee absenteeism) 38) Maintenance costs not considered in capital project funding decisions (Swim Pool example - emphasis on initial cost and not maintenance costs 39) Lack of pro -active safety programs in park facilities (Risk management 900 out of 3300 cases) g 819 4 I� City of Miami Parks and Recreations Management Review Task Force Meetings 3 and 6 Dates: October 22 and 28, 1996 Attendees: Larry Adams - Team Leader Gorman Daniels - Metro -Dade County Parks (Retired) Ramon Ferrer - FPL Raymond Gallardo Gallardo & Associates (Attended 10/22 only) Leland "Bud" Hunter - LH Management Consultants City of Miami Parks and Recreation Department Employees: Barry Friedman - Chief of Operations Maria D. Perez - Support Services Coordinator Barbara Wade - Youth at Risk Coordinator Marcia Spevak Breiter - Disabilities Division 17 Program Coordinator Carmen Evans - Day Care Division 18 Administrator Charles Hudson - Park Planning Coordinator Robert Starks - Special Events Coordinator (Attended 10/28 only) Participants were informed that the meeting would be held according to the basic principles of an Interactive Improvement Meeting. The participants were provided with 4, information about the technique of "Brainstorming". Participants were then asked to .; express ideas which could contribute to solve the City of Miami's $70 million budget deficit. The following is a summary of the main issues discussed resulting from the Brainstorming a session: 7 , �o Ideas Generation and Clarification Staggg k. N � 6' (a 1) Eliminate useless non -productive people 5i 2) Eliminate non -usable facilities - f 3) True empowerment for the directors to run own shop and budgets. If 4) Eliminate Capital Projects based on political careers. i 5) Information - being informed 3 S 6 ' 6) User fees increases 12 7) Evaluate needs and fund City programs first as opposed to outside programs. 2 ( 8) Eliminate nepotism - reassess hiring practices according to qualifications. 4 9) Restructure procedures for bidding and hiring contractors. 1,2 , 10) Poor organizational structure. 11) 6 Pursue grants more actively. 9 12) Develop system for grant administration. ;Si 13) City support to meet grant requirements (compliance). 96- 8 19 r J •2 2 City of Miami Parks and Recreation vManagement Review Task Force - Meeting # 3 and 5 October 22 and 28,1996 - Page 2 Q S 14) Listen to middle managers and everybody. 2 4 5 15) Designate day to day budget person within the department. 2 5 16) Safety transportation 2 6 17) Poor maintenance (preventive) in Parks 2, 4 6 18) Consolidation of Parks Administration and Park Maintenance 4 19) Staff training 6 20) Maintain continuity of functions - adequate staff to carry out functions 1) Maintain integrity of qualifications in jobs 3 22) Top management (of department and above) do not attend meetings, events and programs at parks. 4 4 6 23) Salaries are too high at the top (perks) 2 24) More computerized systems needed 3 25) Reevaluate volunteer programs 4 26) Some office space sub -standard 2 6 27) Need for investigation of NETs 28) Division K (disabilities) employees are not receiving equitable pay as a result of the reorganization ( 2 full-time employees). The following three issues were selected by the group as the most important after the evaluation stage ( The technique of "Multivoting" was used to achieve consensus among the participants): a) Eliminate useless non -productive people. b) Salaries are too high at top (perks) c) Increase user fees The team decided to work on the issue of "Increase user fees" first. Participants were asked to provide estimates of the annual lost revenues (lost opportunities) resulting from not charging baseball academies operating in various city parks (without the impact of marketing). The following estimates were provided: Grapeland Park ($25,000 to $30,000), Coral Gate, Shennandoah, Comstock, More and Fern Isle ($10,000 to $12,000 each), Douglas and West End ($15,000 to $20,000), Hadley ($5,000 to $10,000), Curtis ($10,000 to $20,000) and Robert King High ($5,000). The team estimated approximate revenues for the baseball academy operating at Grapeland Park. Assuming that the academy serves approximately 600 kids at $50.00 per month per participant. The monthly revenues would be $30,000. The estimated annual revenue is approximately $360,000. 19 �i City of Miami Parks and Recreation Management Review Task Force - Meeting #3 and 6 October 22 and 28, 1996 - Page 3 It was agreed by the group that park managers do not take the necessary interest in their parks because there is no incentive to generate fees. Current fees are inadequate, inconsistent, and when applied, the monies do not go back to the park managers for improvements. It was suggested that park user fees should be determined according to the following simple equation: Fees = Operation Costs ¢ 20% mark-up. A portion of the 20% profit could be allocated to the park managers for re -investment in the parks. It was also agreed that three types of fees could be established. Fees for profitable organizations, non-profit organizations and others ( chambers of commerce, private citizens, community groups etc.) Participants were also asked to provide names of institutions and businesses which could represent viable "Marketing Possibilities" for City of Miami parks. The Brainstorming technique was used again to obtain the following list of costs: 1) Colleges and Universities (sports management, players assigned to parks - Trinity University, UP, FIX, Barry etc.) 2) PR and ad agencies 3) Film industry 4) Direct Mail 5) 100 Black Men 6) Black and Hispanic Lawyer Associations 7) The Miami Heat 8) Sporting goods manufacturers 9) Businesses/corporations 10) Radio/T.V. stations - special day in 24 parks 11) City T.V. NET 9 12) Marlins (Sheffield), Dolphins and Panthers 13) Pro -player involvement 14) Recording companies 15) "X" Generation (20 t) money generating activities 96- 8i' [M. I 2 0 0 City of Miami Parks and Recreations Management Review Task Force Meeting 2 and 6 Date: October 21 and 29, 1996 Attendees: Larry Adams - Team Leader Gorman Daniels - Metro -Dade County Parks (Retired) Ramon Ferrer - FPL Raymond Gallardo - Gallardo & Associates Leland "Bud" Hunter - LH Management Consultants Barry Friedman - City of Miami Parks and Rec. Chief of Operations City of Miami Park Managers: Oscar Nieto - Roberto Clemente Park (579-6942) Manuel Pelaez - Morningside Park (754-12421757-0174) Mike Moreno - Grapeland Park (634-5624) Rodolfo Rivas - Jose Marti Park (575-5265) Sergio Hernandez - Kinloch Park (442-0382/442-0386) Ron Lopez Elizabeth Virrick Park (445-0160) Bobby Snipes - Williams Park (579-6978) Gwen Kitchen - Range Park (757-7961/291-4963(Bpr)) Sharon Mason - Moore Park (633-2089/324-4444 X2535) Gregg Dean - Hadley Park (634-5791) Participants were informed that the meeting would be held according to the basic principles of an Interactive Improvement Meeting. Park Managers were provided with information about the technique of "Brainstorming". Participants were then asked to express ideas which could contribute to solve the City of Miami's $70 million budget deficit. The following is a summary of the main issues discussed resulting from the Brainstorming session among City of Miami Park Managers: Ideas Generation and Clarification Stages 1) Wasted Resources 2) Realistic park usage fees need to be imposed. orgenizat+®as:- 4) Cuts have taken place in staff and capital improvement projects. 5) Ideas for improvement from other cities and institutions must be taken in consideration. Poor communications. Only one of the park managers present at in the meeting is a member of a Parks and Recreation professional organization. 6) Improve communications with the community. Promotion of park programs through local media. 819- [A a ? City of Miami Parks and Recreation Management Review Task Force - Meeting # 2 and 6 a October 21 and 29, 1996 - Page 2 N � O 7) 8) Improve internal ca-M-m-unic-2-tions (among City depiartmenLR). The City of Miami could manage park activities, concessions, academies etc. i 6 9) Equipment quality is low. 10) There is no accountability for functions. Park maintenance is under Public Works Department. Responsibility without authority. 4 19) 13) Limited ces urces Poor planning 14) More site surveys needed (survey of community members and park users) 15) Limited access to parks 16) Limited department budget to meet needs 1 i 17) Lack of trust in system and management 18) Lack of dedication of some employees 3 to 19) 20) Reduced work force - too much work and not enough people Limited Iradi --ad ctoff at ! O 21) parks Political groups have priority 3 22) No involvement from the private sector in parks activities - sponsorships, donations, volunteers etc. .5 23) Crime factor affects park potential o 261 27) Lack of leadership i 29) Raise taxes to increase revenues for parks i rwasded- 13 91 31) ` Lack of continuous training for Parks personnel 2 32) Lack of risk management controls 2 i i 33) Need• to take advantage of potential of existing parks and land. The following three issues were selected by the group as the most important after the evaluation stage ( The technique of "Multivoting" was used to achieve consensus among the participants): a) Realistic park usage fees ' b) Employee accountability/organizational structure c) Limited Budget 96- 819 City of Miami Parks and Recreation Management Review Task Force - Meeting # 2 and 6 October 21 and 29, 1996 - Page 3 Park managers were asked to provide estimates of the annual revenues that could be generated by their respective parks from potential events, activities or from organizations that are currently using parks for free. The resulting estimates are: Morningside Park ($20,000.00), Moore ($15,000.00), Roberto Clemente ($4,000.00), Grapeland($44,640.00), Hadley ($40,000.00), Kinloch Park ($4,600.00), Williams ($15,000.00), Jose Marti ($17,000.00), Virrick ($5,000.00) and Range ($18,000.00). The total estimated annual amount was $183,240.00 (approximately $18,000.00 per park). Park Managers were also asked to provide the costs incurred by the City of Miami Parks and Recreation Department during activities for outside organizations using the parks. The Brainstorming technique was used again to obtain the following list of costs: 1) Electricity 2) Water usage/sewer 3) Field Marking materials and equipment 4) Parks staff hours 5) Park maintenance activities ( special mowing) 6) Cleaning supplies 7) Paint 8) Trash clean-up after and during events 9) Equipment wear and tear 10) Property damage/repairs 11) Lost users fees Park managers were then asked to identify some of the most important problems caused by the current organization structure (accountability). The following are the issues listed by the participants: 1) The maintenance work order process does not work properly/efficiently. 2) Park maintenance is not always under the control of the Recreations Department. 3) Emergency work orders do not receive adequate priority. 4) Park Managers have "little" input in park maintenance (operations) personnel performance. 5) There is lack of communications between park managers and maintenance employees which affect scheduled park activities. Park managers were asked to review their records and evaluate revenue enhancement opportunities at their respective parks for discussion during our next meeting. 9~<;'- 819 City of Miami Parks and Recreation Management Review Task Force - Meeting # 2 and 6 October 21 and 29, 1998 - Page 4 During our meeting of October 29, 1996, the park managers provided the following estimates of potential revenues that could be generated at their parks by charging higher user fees or charging those organizations that are currently not paying fees: Morningside $70,000.00 Kinloch $ 1,425'.00 Roberto Clemente $52,000.00 Williams $17,000.00 Hadley $75,000.00 Jose Marti $14,000.00 Moore $20,000.00 Virrick $10,600.00 Grapeland $35,000.00 Range $15,300.00 Total $301,325.00 i 1.7 The baseball academies operating in Grapeland charge approximately $30/ kid ($18,000/mo or $216,000/year). Fees are not collected for academies. Grapeland revenues are approximately $20,000.00 2.- Actual revenues from Roberto Clemente Park are approximately $2,650.00/year. 3.- Revenues from Hadley Park are approximately $18,000.00/ year. Currently the charges to use the pool are $0.75 per adult. Park Manager claims that the user fee for the pool could be increased to $2.00 per day. (approx 300 kids use the pool daily during the summer months). Charging $0.50 for the use of lockers would represent additional $4,000.00/year. Currently DCPS pays $10.00 for using the pool for Northwestern and Jackson Senior High Schools. 4.- Moore Park has a new track field. Miami Edison and Miami Jackson High Schools use the field for free. There is also a track and field academy ( approx. 300 kids) using the field. There is an 11 court Tennis Center which is expected to be adopted by a private institution which will make renovations and market the center. 5.- Kinloch Park has limited facilities. It has a NET office and a ADC office in the park. 6.- Jose Marti Park made approximately $1,900.00 last year from user fees. Miami Senior High School uses the pool. There are baseball academies using the park i which charge from $25 to $30.00/kid and pay no park user fees. Crime and homeless are serious problems for the facility. Movie ventures use the park for several days at a time for a fee of approximately $300.00. The park manager does not see this revenue and has no control over it. 7.- Riverside Park (inactive) is used by a baseball academy which runs the park. 8.- The city has a facility by the lake at the Slue Lagoon area. The City of Miami does not operate this property. The facility is used by jet skiers and campers. 9.- Park managers claim that the City of Miami donates approximately $65,000.00 per year to run the "Domino Park" in Little Havana. 10.- Range Park is used by an athletic football club which charges approximately $50.00 per kid (approx. 200 kids). The club runs the concession stands. Estimated sales from the concessions are approximately $2000.00 per week. There is a pool which is only open during the summer. Children have free access to the pool and adults j pay only $0.75 each. 96- 819 Ale r 96- 819 ROEERTO CLEMENTE PARK FINANCIAL REPORT Baseball /Softball Field Rental...............................................$1,000.00 Recreation Building............................................................... 300.00 Other Activities..................................................................... 300.00 Exercise Room..................................................................... 500.00 Staff..................................................................................... 400.00 Political Ralleys..................................................................... 150.00 SpecialEvents....................................................................... Total ...................................... $2,650.00 GiveAways.......................................................................... FREE NETOffice.....................................................................($20,800.00) ASPIRA (Non -Profit School) ........................................... (6,240.00) A$PIR.A Youth Ralleys..................................................... (100.00) Religious Organizations..................................................... (1,400.00) KidCo............................................................................... (60.00) BoyScouts........................................................................ ( 2,080.00) Wrestling Team. ................................................................ (15,600.00) Chess -Club ........................................................................ (2,080.00) Zulu Nation Youth Club ................................................... (5,200.00) Other Non -Planned Activities ............................................ (1,000.00) Staff (1300 hours)............................................................. (18,200.00) Supplies........................................................................... (200.00) SpecialEvents.................................................................. Total ................................. ($72,960.00) h - KINLOCK PARK :.... Days Year ADC Program - 230 X $ 60.00 = $13,800.00 give away .:. CityBusiness .- :- -NET- Office 260 X $ 80.00 = $202800.00 ,give away City Business peeks Year K Kiwwis Kinlock Soccer League 40 X $105.00 = $42200.00 give away Coach Payment Soccer Summer Camp $1,425.00 .. Park Facility Community Building can be rented for: Days: Per Dour $ l 5.00 Nights: Per hour $30.00 ... . - ' ger Sergio Hernandez, P co o" 3 OAY, ..�;..VAiilehewoW&'tsiiggestwhich :or' delayed; some' :'he' prcjec.,I -b�`c vr_ JiobabV ut ' skid; Pbbc-aus6`j6i,,6aifi't drink c ampagne.:on.a h beet budget.' : Meanwhile; W.Stiviheini, A0'. ' n10c returns to -direct the Greater Miami Conirention.& Visitors Bureauon Now- - 15;,..is .!gearingup to gear down!!; as a new: -administration g..: p GS�.71. steps in-.::-:, Bk'CANP ERWE�:' LAoCKN Smpiissioner. J.L.,..Plummer .."'Among thi 'ise d6fitials " Mianii"s"p . in: agreed that :a local candidate; for city, nianaget."presents a different cimilent city c manager should possess is thb abil- scenario" than onefrom outoftqwn,. ity. to hit theoun'd running, ob- but said the city won't.stdrt on or servers say. And even then, the job resume any project,"until we take a will be dauntinj.,..,-. long look• at the 04nicial,situa- ,,,;i"Iunderstdnd there are local and out-d-town- candidates,�?. Interim tion." In. -light ' of the. circumstances City. MaxieigeT'Merrett.. Stierheim :surrounding :the it'piesent" IS'idd said. Monday, -."If Commiisidii6i.]P`ihzrd Dunn, "my 'tr�' selected is an.experienced profes- top prio D help priority,'is: t Al thC,b111dg'CW!An5r�tbh; g else sional who can hit the deck; run- -ning, that's alremend6s asset lance 'Whe TJt..b6 #iyj�kqjqct or the' .Whenlle�ve I intend to put on y 8 0, b.Q.Aec`nd­' mayors h 61d o ary. n lit said, 'I do have one; area Of the Able. an qyppllassessment of concern I beheye pan.liqlO., to:` al 9 the:: city. administration : And :its .vamzc** q ;o!rqT#ni.ty; ',es . is that, need to weakne ses —, flings t..,s,..oiz chil. &6n. OA6' area I'*c. .be-dhan�ed..,These are things that I'Ye.bPen Working. on-,,�ithithc 15 y! J ' biii*er 'diiapp'bintid mjs-bur- flask f6rces these last few weeks. C" & J*ki" -R6&iiti6W- , " " ­ . ' " - " I., , , � I' yTq` b '-With peif.",g, -come'up .3'11. include blue- print with the alternatives on how. .. iom6dreative and iiii6iitiv; idea's the city can return to fiscal sol- flor'p rivate "corpora. rations'. to help n sponsor some recreational tuyLyg ...o -termcipitalpi6jeds that Jon programsfgryoungpeople. t6ietech poit -ffili the city xrporate�*sponsorsqps-�could fries VSWWA .a4 ieduce or,el1M1ngtR-.c1W:expense *hild 6e mg kdibut'bf-trouble sitfatbiWiUOrobiblicontinue to , ''- ii1fit:even.i&r iew4dminis. 7sat 1 t66onis1iisWl Mr: 9ti6rheim sat . •'projects `are 'not im- .`.`Capital Mime.. e sald."That goes to the long=term i6liiti6idthis pioblem. This is not Al3:A';;d-A1dfx' _this is major sdrgerywith'A long period of 96- 8 1 19 r 04/07/94 DADE COUNTY LOCAL GOVERNMENTS AND POPULATIONS 1) Miami 359,076 2) Hialeah 207,002 3) Miami Beach 921939 4) North Miami 49,541 5) Coral Gables 40,404 6) North Miami Beach 35,270 7) Homestead 27,221 8) Opa-L•ocka 15,187 9.) Sweetwater 14,036 10) Miami Springs 13,193 11) South Miami 10,449 12) Miami Shores 10,095 13) Key Biscayne 8,500 14) Hialeah Gardens 81,479 15) Florida City 5j,887 16) West Miami 5,724 17) North Bay Village 5,490 18) Bay Harbor Island 4,676 19) Surfside 41129 20) Biscayne Park 3,041 21) Bal Harbor 3,026 22) E1 Portal 2,447 23) Virginia Gardens 2,202 24) Golden Beach 783 25) Medley 707 26) Indian Creek 44 27) Islandia 13 Unincorporated 1,007,533 Dade County (Total) 1,937,094 ri The following table lists the 10 pootes(chles It! thb Uhh6d slates with a popUlatlod of 100,000 or gfep CITY POPULATrUN POVthtYIIATt� 1. Laredo 122,899 37.29 6/, ................................. ............. ................. .................................. . .... . .................................... ...... ............ .02. .. ...... ... . .. ..... ... New 0 i3 O'h ... ....... ................................................ ........... I. .... ... 8. Flint .... ............... . .......... . .......... ................. . . ..... . . .................... . ......... ................ 66.4.6. ... . ................................ . . .. ... . . ........ . . ......... . . .... .. .......... ... . . .. % 7. Waco 108,5901 .... ................................... Hartiord 6Id .... ...... .................................. . ELSEWHtRE M tLORIDA 51. Tziftipul 4 ......... . •it eis ....... ...................... ............. (..••••••••..••id9,377 83. rott LaUdordalL 121. St. 230.629 .................. ............ 13.55 6/6 .............................. ............... ............................... ............. .............. ........ ................ . • .......... . ....................... , ...... . . ........ . 149. Holl•yWbod•0 d/() tt ............................... . ... ........................... ............... .................. .... . . .... R B ............................. M The poverty rete Is for persons, hot Nmillbs. SOURCE: U.S. Census t3ureau. m A r I ade.:1�d8 �f - hard:;..: Gesso ' ?;' err. Y �• P 0:? 1 ia� k. der amen. . t:. ,9 dive m poyet .N,METAL D&ECTORSM- OK,16 >By:JODI�MAiLAWDER±:► 4. .. uto-. tietyald.Steff Weiler the given be£or.e ;they,.sti g lc, viith �ufac the'B(�s and`ho►w #©.wnte'their :�7; the `name ,Iindergartners, ,:m Dade, :the ' leaarn,:the:-'liardest`leSson :of all:. ,,. whafif' marks to be` oos or ` Wie.''`.than 62 percent. of the ,.,Oveat.. Adds in' public kindergarten' last year lived below the. poverty l4E, 16A level, a . state - researcher told .the Dade School.Board on Wedne§-: day. The number isAmpoftant` :to . ....educators because-iairpiloneoy- income se:has proven to be'.,the most , powedp1 predictoii cif h!0* Well i' . child. willperform' in .scliooL Davie students' chances for sum: cess are hampered Eby two other. major factors: About 33 percent of kindergartners last year came from single -parent homes, --and 26 percent of those had mothers 'with less than a high school edu- .cation. "I don't want to sound like the - - prophet of doom," said Michael Resnick, a professor of pediatrics at the .University of Florida and a chief researcher in a four-year study of Florida cchnolchild-An. File 1992 • "But people in your cities have IB0: ei+VM' » .A:'.•i,.., »;;PTR:...&A..'.i S w s 9 - 819 r U is govei•r'"',nt." Last h;;he.urgec. ow Radicals Dade s share of needy children is far beyond the- national' bench- mark, f 25..percent.:=-;-or oiie.out of foti children, The'federal.pov- erty level for. a: family. of -four" is an annual income :of .less,. than $13,400. Reshipk's • statiitids on -Dade children hre.'.pait ::of a:larger,.-, statewide regort'• °that...will • •be given to•the Legislature m Janu- ary. Risearchers at UF•arid Flor-. ida State Uifiversi • have: been trackipg. 80,000 o�,'the.'state's youngest students foc `four years . to gauge the eflbctiveness of early childhood .programs The Kgroap's early.. tesearch shows -`•=that poor, children+ho were'pdt inpublic•prekiiidergar ten programs, had a 40 ppeercent --higher success rate than.chlldren who didn't' ;receive; 1 the early attentign and waited et' •ggo straight- into `kindergarten 'like most, Iudi; : Resnick . said The prekindeigarten :ciiiidren:• were less likely to bd' I bed in* ,special programs for learning problems and other disabilities • arc they grew older, he said: In Dade, where almost 1.5,000 kindergartners , live ' below : the' poverty, level; only one in five is enrolled. in. prekindergarten • because of lack of ••space-. and money.. ' Urging the board .to adopt* a "war. zone mentality," Resnick recommended slashing unsuc- cessful programs. He said Dade schools should team up with the Department of Health. -and Reha- bilitative Services to end the • duplication that comes when two agencies try to help the same kids. Resnick advocated increased funding for school districts like Dade that have a higher share of children with poor, under -edu- cated parents. His advice ranged from the simple — read to a child for 20 minutes.a day from age 2 and up — to the complex — create public school programs There is solid reasoning 1-':end._ are. annoyed •with' -the:( this —The Radicals' are.-loi 66 : • with which Vie: pact' *aLt . '•• Researc`'fiers have coiiipited.these 8ie4isti�sabdtat Dada's°;-' �. youngest resddents nnd.thir.:femtliss as partpi3 study of.the'state's 'programs early childhd 1!'Abmut 14,796 kindorgart= ' . ■ AboiA'1,V0 gins between_. .:.:viers-or•62 percent of children 15 and 17 became staMng public:school.• .. tiklii, 1992 4.percent of ail tilittis` d" . .poverty last year. Almost go per-. . Dade that year. About• 120 of the . cent of black. kindergartners; 65 new mothers were youngsr:than - ..:: pei cerit of Hispanic kinderyart-- ' Hers and 23 percent of white .. ; 15r ' . i! AboW 'i;200 Dade children . nor+ -Hispanics kindergartners :.... ages newbdrn to 5 were identi- were poor..• .. tied as abused or•neglected by ■ About 33 pamnt of:tt �.kfn� :the Department of Healikiaiid . :deMartners came from single= lRehabilltative Serviomin .: .. parent hom®% 26 percent of the 'mothers had Less than a high: ;` . • ■ More tfum 430 children in school education.,...".... ;that age group wet® in emer- iilrnost 8 petnsitt of Dade . ' ` agency shelters. ,ne*bom's last'yearbad a.low.,.. birth weight, less than SA'. " „ • .. . {SOURCES: ilnivers11t IFfor(da and Florida State llniventty pounds. :focus on children who face the "Mda crippling odds - those who :,..Fare poor,''hve with one"parent �aAd have a mother who never .graduated from' high.schooL Like. fnationat research, Florida'ssludy' alias blind that these three. factors shave :a'profaund affect on stu- :"•denis'.grrades-'and behavior. 'Resnick' contention that "we don't have :to do too much" for the kids at the opposite. end of the. spectrum' those with 'a good -home -'environment, good health, and college -educated par- ents —.drew.protests.from board member Michael Krop, "That's wrong," krop said. "What you're getting is aside-ef fect, people fleeing from cities' because they don't .feel the needs f h ' hid be'n to serve kfds from infancy. to pre- school . Ideally, state social • workers should contact schools as soon as a single, poor mother gives birth, alerting educators to the special care the future student will need, Resnick said. Amid the gloomy statistics *for Dade, there.were a few, bright spots; The percentage of babies with low birth weights has remained at 8 percent since 1980. Teen pregnancies actually have dropped from 5.8 percent in 1980 to 4.2 percent in 1992. • And, most significantly, neona- tal deaths in Dade have been' cut in half in the past 12 years, from 10.4 percent to 5 percent. But Resnick urged educators to o. t air c i ran are i g addressed. We have to make sure we have a mix of people and pop. ulations because it's those kids who will help these others." Resnick eventually agreed wit! Krop, but. still insisted that at risk .students need almost triple the amount of money spent of average students. With no expec tations -to. receive that kind o cash, educators worried that the may have io'.cut their own bue gets to make room for preschoc classes for the needy. . "We need to look at the big pi( ture and put priorities on pr( grams," said Superintendel Octavio Visiedo. "But is prekii dergarten more important the math? Those are the real ha calls." 361 311 261 211 16 CITY OF MIAMI POPULATION, POVERTY & UNEMPLOYMENT RATE COMPARISON POPULATION POVERTY UN'LliPLOY MENT 346,865 3 y%48 100% 111,867 84,982 31.2% 24.5% 39,440 # i 23,934 11 % r� :;r,:, 1980 1990 FIGURES DO NOT INCLUDE 30,000 ILLEGAL RESIDENTS 96- 819 ' 11 Violent Crimes Murder, Rape, Robbery,* Agg. AsIt. Thousands 18 16 14 12 10 8 6 4 2 0 82 83 84 Sa 86 87 88 89 90 91 VIOLENT CRIMES ® 9,963 9,784 10,928 11,186 11,676 11,309 12,963 14,224 15,653 15,645 a r FINAL EDITION Study: ]Beep kids .busy after school Fee -time risks acute in Florida By KIM BERLY CROCKETT And APRIL WITT Herald Stall writers Half of America's 20 million children between ages 10 and 15 are in danger of not reaching their full potential because nobody watches them after school, wams a study released Thursday by the Carnegie Council on Adolescent Devel- opment. Unless they are kept busy -- in recreational programs rang- ing from sports leagues to Scouting — more and more will spend their free time doing drugs, joining gangs, commit- ting crimes and having sex, the study says. To prevent that, programs must be better funded and organized to attract young adolescents. The risk is more acute in Florida, which faces a boom in BM 1L KEMM 1 Miami Hi nW Staff SHUFFLE: Driver Ellyn Okrent and son, Michael, pick up'boys students Erika Baskind, left, and Okrent's daughter Nancy. adolescents. The 1990 census "many ,of the girls wont tell showed a 48 percent increase in anybody'they are Scouts. the number of children under It takes money and commit - age b in Florida during the last ment to keep kids occupied and decade. interested, said Ellyn Okrent, a The problem worries Dade Lauderhill mother of two who County parents like Loretta works at the Fort Lauderdale Jones, who involves her chil- Juvenile Assessment Center. dren in band and Scouting. It "I work like a dog to pay for isn't easy, said Jones, who runs it and to drive them around," Girl Scout troops in North said Okrent of her own chil- Miami. There is so much nega- tive peer pressure, she said, PL84SESEE CHILDREN, 33A r NATIONAL NEWS F FRIDAY, DECEMBER111,1992HERALD 33A i- THE MIAMI AMI HERALD ee ids ds after schow stud asks CHILDREN, FROM 1A WILL.TER UMOT 1 Mi" Herald stun wrw canag row mvaus. • . sche. Carnegie report urges MOVING UP. Brownies Annie Perez, left, Melissa Coronado, center, and Kimberly Dawson take part In ools, families, health agencies, - the candlelight ceremony to become Girl. Scouts At.Avocado Elementary in Homestead on Thursday. Colleges, foundations, social ser- JcC agencies and the govern- report said. Center.for•'Children &Youth. neat: o "step up to the plate^,; There are ,woefully few pro- :"There is no one taking the lead- andhr'tid off an impending crisis. • grams locally to lure adolescents• ership role for this group. It is a Cgi.nizations - that provide oft the streets after school, chil- committee that doesn't exist." after -school activities must find dren's advocates said. Although Florida is an affluent new ways to attract kids, as well - "Recreation? There really isn't state, it ranks 43rd when it comes is Il provide more programs, by any," said Okrent of Fort Lau- to gauging the health and well- using'the elderly and college stu- derdale's Juvenile Assessment being of its children, Levine said. dents -as volunteers. Center. ' r "There is no greater gap between "We're not asking them to do it "I see children here at high risk wealth of a state and the health of alone;' said Jane Quinn, Carne- for criminal delinquency;- prosti- its children." gie:ptoject director. "We under- tution, sexually transmitted dis- Florida has over 750,000 chil- stand they are strapped." eases," she said. "I see kids who dren in'the 10-to-15 age group Io, the long run, failing to spend are so severely abused, and I . and expects a teen explosion. on'js) Fventive }programs results want long-term treatment for When that happens, it "will ialiiiore expensive rehabilitative them and it doesn't exist.". test our' middle schools, recre- prpgr'ams;•such as criminal jus- It's true, said Jack Levine;"'ation and other 'facilities to the Vhealth care and welfare, the • 'executive director of the Florida' limit," Levine said. "If we don't -55 j put systems in place today to pre- ' i I pare, this population will over- ::•.: y .jew study b the Camegie Council wams that about 10 whelm the system." The most disturbing finding in 61104t young adolescents are in danger of becoming delinquent the Carnegie report was the inac- :,-O wOse they are not supervised nearly half the day. cessibility of programs, particu- ' o adolescents spend their waking hours larly for low-income children, Quinn said. It's not that !ow -in- , s37Q0 �,�OjO come kids don't want to be involved; they are shut out' XBoing s•..: • Free choice because of transportation prob- lems or a lack of money. .*Ouctive ■Televisio 21%•, Okrent agreed. N�; allying 3.5°J. �. ..•,••• _ / playing, s : ,;,; ; ; ,.. They are economically disad- ;5'vantaged; there is no family to >11' . ailing 14% ... hobbles;: €: art;99S . ; . . �::. s t:.. ::.. t:a. follow through," she said. "Even ?i if 1' do make a recommendation �;: , �/ <,;.. ->>" ■ Sports, outdoor.: for' them to join a city baseball �� s. .« sj x ' activities 7% team, who is going to take them? th , ; R1alntaloing£ ` :',a r,.Church 25% Who is going to buy their uni- ;� tvea A g 10a ' / Ysiting 2.59i' form. Who is going to register them. It's almost a joke to make a recommendation like that." ;/ Pgrsonar• care 6.59. <; But poor kids aren't the only %/Household work, � '. -����.; :�? 'SOURCE: How ones who suffer from nothing to g chores,'<' ;::::., Children Use Time, do. errands 4.5% by S.G. Timmer, ., J.Eccles "I've seen kids very well off involved in gangs, just like ones RlcKBROWNLEErMlamlHerWa_SW 'who don't have a lot," said Jeff — Nichols, director of the Lester H. White Boys Club in Fort Lauder- dale. The changing nature of the family is why many organiza- tions no longer offer programs between 2 p.m. and 6 p.m. With working parents, few can volun- teer during those hours or pro- vide transportation. Junior Achievement, for exam- ple, has merged its program into the public and private schools and gotten away ' from after= school and Saturday programs.. That way it can reach more stu- dents without having to worry about transportation. 9S- 81{9