HomeMy WebLinkAboutR-96-0946,1
J-96-1333
12/23/96
RESOLUTION N0.
A RESOLUTION, WITH ATTACHMENTS, AUTHORIZING
THE CITY MANAGER TO EXECUTE AN
INTERGOVERNMENTAL COOPERATION AGREEMENT, IN
SUBSTANTIALLY THE ATTACHED FORM, BY AND AMONG
THE GOVERNOR, THE FINANCIAL EMERGENCY
OVERSIGHT BOARD AND THE CITY OF MIAMI.
WHEREAS, on December 3, 1996, the Governor acknowledged that
the City is currently in a state of financial emergency and
invoked the powers afforded to the Governor by law to oversee and
assist the City towards a resolution of the fiscal emergency; and
WHEREAS, the Governor created the Financial Emergency
Oversight Board to oversee the fiscal affairs of the City for the
period as specified by the Intergovernmental Agreement; and
WHEREAS, in order to implement such cooperative
intergovernmental actions and carry out the actions as set forth
in Executive Order 96-391, it is necessary for the City to enter
into a Intergovernmental Cooperation Agreement by and among the
Governor and the Financial Emergency Oversight Board;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY
OF MIAMI, FLORIDA:
Section 1. The recitals and findings contained in the
Preamble to this Resolution are hereby adopted by reference
thereto and incorporated herein as if fully set forth in this
Section.
ATTACHMENT (S)
CONTAINED
CITY COMIUSSIOIR
MEETING OF
DEC 2 3 1996
Resolution No.
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Section 2. The City Manager is hereby authorized to
execute an Intergovernmental Cooperation Agreement, in
substantially the attached form, by and among the Governor, the
Financial Emergency Oversight Board and the City o Miami.
Section 3. This Resolution shall become effective
immediately upon its adoption.
PASSED AND ADOPTED this 23rd day of December 1996.
CAROLLO, MAYOR
ATTEST
WALTER J. FO
CITY CLER
APPROVED AS TO FORM AND CORRECTNESS:
n t/
A,, j i I I I
CITY ATTO Y
W1338:BSS
Intergovernmental Cooperation Agreement
by and among
the Governor, the Financial Emergency Oversight Board
and
The City of Miami
THIS INTERGOVERNMENTAL COOPERATION AGREEMENT (the "Agreement")
made and entered into as of the 23rd day of December, 1996, by and among the Governor of the
State of Florida ("Governor"), the Financial Emergency Oversight Board (the "Oversight
Board"), a body established by Executive Order 96-391, and the City of Miami (the "City"),
Dade County, Florida.
WITNESSETH
WHEREAS, on December 2, 1996, the City Manager of the City informed the Governor
of the financial distress of City accounts, and requested the Governor to conclude, pursuant to
section 218.503, Florida Statutes, that a state of financial emergency exists within the City,
WHEREAS, on December 3, 1996, pursuant to the City's request, the Governor
acknowledged that the City is currently in a state of financial emergency according to the
provisions of section 218.503, Florida Statutes (1996), and
WHEREAS, the Governor has the responsibility to ensure that the health, safety and
welfare of the residents of and visitors to the City of Miami is maintained during this financial
emergency, and
WHEREAS, negative economic ramifications, such as lower credit ratings and higher
interest costs to the City of Miami, as well as possible spillover effects to other local
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governments and the state, could result without state assistance and intervention in this local
government financial emergency, and
WHEREAS, the Governor created the Oversight Board to oversee the fiscal affairs of the
City for a period of three years after the City has produced two successive years of balanced
operations, and none of the conditions listed in sections 218.503, Florida Statutes, for
determining a local government financial emergency exist, and
WHEREAS, the Oversight Board and the City intend to cooperate with each other so that
the City of Miami is no longer in a state of financial emergency, and
WHEREAS, in order to implement such cooperative intergovernmental actions and carry
out the actions set forth in Executive Order 96-391, it is necessary to further define and detail the
undertakings of the Governor, the Oversight Board and the City in this Agreement, and
WHEREAS, the Oversight Board has authorized the execution and delivery of this
Agreement, and
WHEREAS, by majority decision of the City Commission, the City has authorized the
execution and delivery of this Agreement by the City, and
NOW, THEREFORE, for good and valuable consideration, and intending to be legally
bound hereby, the Governor, Oversight Board and the City agree as follows:
1. Financial Recovery Plan for Fiscal Year 1996-97. On or before
January 3, 1997, the City shall approve by a vote of the City Commission, and shall submit in
writing to the Oversight Board a financial recovery plan for fiscal year 1996-97 (the "1997
Plan"). The 1997 Plan must (a) eliminate the approximately $68 million deficit as estimated in
the Strategic Financial Recovery Plan prepared by Merrett R. Stierheim dated November 15,
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1996 (the "Stierheim Report"); (b) eliminate at least 60% of the recurring deficit amount, as
estimated in the Stierheim Report (approximately $48 million), and such recurring deficit amount
must be reduced with recurring revenues or recurring expense reductions; (c) base all underlying
assumptions and information on the Stierheim Report; and (d) contain a statement by the City
and its Commission that if the 1997 Plan is approved under this Agreement, the City and its
Commission is fully committed to and will move forward with the implementation of every
component of the 1997 Plan. The 1997 Plan shall be submitted to the Oversight Board in a
format which must be agreed to by the Chief of Staff to the Oversight Board and the City
Manager. The City Commission shall meet diligently and as often as necessary so that it may
develop, write and approve the 1997 Plan.
2. Review of the 1997 Plan by the Oversight Board. The Oversight Board
shall promptly review the 1997 Plan in light of, among other things, the criteria and requirements
set forth in this Agreement. By no later than January 20, 1997, the Oversight Board, in its sole
discretion, will either approve or reject the 1997 Plan; and the Oversight Board will then
promptly notify the City of its decision. In the event that the Oversight Board approves the 1997
Plan, the City shall implement immediately and expeditiously, but by no later than forty-five (45)
days-V from the date the Oversight Board approves the 1997 Plan, each component of the 1997
Plan, including the adoption of any necessary ordinances. In the event that the Oversight Board
rejects the 1997 Plan, the Oversight Board shall notify the City by stating in sufficient detail the
reasons for such rejection ("Rejection Notice of the 1997 Plan"). Within ten (10) days of
receiving the Rejection Notice of the 1997 Plan, the City shall approve by a vote of the City
1/ The word "days" as used in this Agreement shall mean all days, both business and non -business,
holiday and non -holiday.
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Commission, and shall submit in writing to the Oversight Board a revised 1997 Plan ("Revised
1997 Plan") that specifically redresses the reasons for rejecting the 1997 Plan, as set forth in the
Rejection Notice of the 1997 Plan and otherwise meets the requirements of this Agreement. The
City Commission shall meet diligently and as often as necessary so that it may modify, write and
approve the 1997 Plan.
3. The Five Year Plan. On or before April 15, 1997, the City shall approve
by a vote of the City Commission, and shall submit in writing to the Oversight Board a five year
financial recovery plan (the "Five Year Plan"). The Five Year Plan shall be based on official
estimating conference forecasts for revenues, expenditures, cash flow and deficits ("Estimating
Conferences"). The Oversight Board shall establish and designate the members of the
Estimating Conference for revenues, expenditures, cash flow, and deficit. Estimates by the
Estimating Conference will be divided between recurring and non -recurring, and short-term and
long-term estimates. Such estimates shall be projected for at least a five-year period. The first
estimates of the Estimating Conference shall be completed by no later than February 28, 1997.
The Five Year Plan must (a) contain forecasted revenues and expenses, recurring and non-
recurring, for the five fiscal years beginning with fiscal year 1996-97; (b) for fiscal year 1997-98
and each year thereafter, eliminate 100% of the recurring deficit amount, as agreed upon by the
Estimating Conference, and such recurring deficit amount must be reduced with recurring
revenues or recurring expense reductions; and (c) contain an initial operational recovery plan
which addresses the managerial, operational and other deficiencies which were discussed in the
Stierheim Report, as well as any other deficiencies that may be disclosed in any official audits of
the City, or as may be determined by the Oversight Board ("Operational Recovery Plan"). It is
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anticipated that the Operational Recovery Plan will be updated from time to time, as the
improvements thereunder are implemented, or as additional information becomes available. The
State of Florida shall assist with the preparation of the Five Year Plan. By no later than May 15,
1997, the Oversight Board, in its sole discretion, will either approve or reject the Five Year Plan;
and the Oversight Board will then promptly notify the City of its decision. In the event that the
Oversight Board approves the Five Year Plan, the City shall implement immediately and
expeditiously each component of the plan, including the adoption of any necessary ordinances
and any ordinances specified by the Oversight Board. In the event that the Oversight Board
rejects the Five Year Plan, the Oversight Board shall notify the City by stating in sufficient detail
the reasons for such rejection ("Rejection Notice of the Five Year Plan"). Within twenty days of
receiving the Rejection Notice of the Five Year Plan, the City shall approve by a vote of the City
Commission, and shall submit in writing to the Oversight Board a revised Five Year Plan
("Revised Five Year Plan") that specifically redresses the reasons for rejecting the Five Year
Plan, as set forth in the Rejection Notice of the Five Year Plan and otherwise meets the
requirements of this Agreement. The City Commission shall meet diligently and as often as
necessary so that it may modify, write and approve the Five Year Plan.
4. Approval of the City's Budgets and Spending. At least ninety (90) days
prior to the beginning of each fiscal year, the City shall approve by a vote of the City
Commission, and shall submit in writing, to the Oversight Board a proposed budget for the
upcoming year ("Proposed Budget")?'. Within twenty (20) days of receiving the Proposed
2/ It is assumed that the Proposed Budget submitted under this paragraph will not materially differ
from the final budget. At any time that the City anticipates that the Proposed Budget will be
materially different from the final budget, the City shall immediately notify the Oversight Board of
such difference.
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Budget, the Oversight Board, in its sole discretion, will either approve or reject the Proposed
Budget; and the Oversight Board will then promptly notify the City of its decision. In the event
that the Oversight Board approves the Proposed Budget, the City shall take all necessary steps
toward preparing and adopting a final budget that is based on the Proposed Budget. In the event
that the Oversight Board rejects the Proposed Budget, the Oversight Board shall notify the City
by stating in sufficient detail the reasons for such rejection ("Rejection of the Proposed Budget")
Within twenty days of receiving the Rejection Notice of the Proposed Budget, the City shall
approve by a vote of the City Commission, and shall submit in writing to the Oversight Board a
revised Proposed Budget ("Revised Proposed Budget") that specifically redresses the reasons for
rejecting the Proposed Budget, as set forth in the Rejection Notice of the Proposed Budget and
otherwise meets the requirements of this Agreement. The City Commission shall meet diligently
and as often as necessary so that it may modify, write and approve the budget. All budgets
prepared and approved by the City shall be approved by the Oversight Board. Beginning on
February 1, 1997, the City shall be prohibited from spending any funds if it is not operating in
accordance with a budget approved by the Oversight Board, except such approval is not required
for the payment of debt instruments of the City. Any budget amendments requiring City
Commission approval shall also be approved by the Oversight Board.
S. Revised Five Year Plan. The City shall (a) within thirty (30) days of the
fin A adoption of the budget for each fiscal year, and (b) within thirty (30) days of any change in
the .forecasts by the Estimating Conference, revise its Five Year Plan ("Revised Five Year Plan")
by bringing the Five Year Plan into compliance with the final budget adopted by the City
Commission or into compliance with the latest official Estimating Conference forecast. Within
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twenty (20) days of receiving the Revised Five Year Plan, the Oversight Board, in its sole
discretion, will either approve or reject the Revised Plan; and the Oversight Board will then
promptly notify the City of its decision. In the event that the Oversight Board approves the
Revised Five Year Plan, the City shall take all necessary steps toward implementing each
component of the plan, including the adoption of any necessary ordinances. In the event that the
Oversight Board rejects the Revised Five Year Plan, the Oversight Board shall notify the City by
stating in sufficient detail the reasons for such rejection ("Rejection Notice of the Revised Five
Year Plan"). Within twenty (20) days of receiving the Rejection Notice of the Revised Five Year
Plan, the City shall approve by a vote of the City Commission, and shall submit in writing to the
Oversight Board an amended Revised Five Year Plan ("Amended Revised Five Year Plan") that
specifically redresses the reasons for rejecting the Revised Five Year Plan, as set forth in the
Rejection Notice of the Revised Five Year Plan and otherwise meets the requirements of this
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Agreement. The City Comm g Commission shall meet diligently and as often as necessary so that it may
modify and approve the Revised Five Year Plan. The City may periodically revise its Five Year
Plan, as additional information becomes available; provided that such revisions are approved by
the Oversight Board (under the procedures set forth in this paragraph).
6. Components of the Five Year Plan, the Proposed Budget and the
1 Revised Five Year Plan. The Five Year Plan, the Proposed Budget and the Revised Five Year
Plan (collectively referred to as the "Plans") shall reflect a level of detail as may be necessary for
the Oversight Board to act under this Agreement; and shall be submitted to the Oversight Board
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in a format which will be agreed to by the Chief of Staff to the Oversight Board and the City
Manager. The Plans shallY:
a. Contain components based on projected revenues and expenditures
approved by the Estimating Conference;
b. Contain a twenty-four (24) month cash flow analysis, which reconciles the
components of any financial recovery plan that have been approved by the Estimating
Conference, except for the Proposed Budget which shall contain a twelve (12) month cash flow
analysis;
C. Beginning with fiscal year 1997-98 and each year thereafter, eliminate all
known deficits and provide for a structurally balanced budget where recurring revenues are
aligned with recurring expenditures;
d. Balance the current fiscal year budget and subsequent budgets through
sound budgetary practices, including but not limited to, reductions in expenditures,
improvements in productivity, and increases in revenues;
e. Provide procedures to avoid a fiscal emergency condition in the future,
including establishing adequate cash reserves and providing appropriate fund reserves to cover
other unfunded liabilities;
f. Enhance the ability of the City to regain access to the short-term and long-
term credit markets;
g. Increase managerial and operational accountability;
h. Consolidate or eliminate City programs and services;
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3/ It is not intent of this Agreement to list all of the components for the Plans.
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i. Improve record keeping practices;
j. Increase collection of existing revenue sources;
k. Sell City assets, as appropriate;
1. Improve procurement practices, including competitive bidding procedures;
in. Review compensation and benefits for City employees and the City's .
employee union contracts and negotiating practices;
n. Establish strong internal auditing practices;
o. Improve the City's organizational structure; and
P. Contain a schedule of projected capital commitments of the City and
proposed sources of funding for such commitments.
7. Estimating Conferences. All Plans and all budgets prepared by the City,
shall be based on official Estimating Conference forecasts for revenues, expenditures, cash flow
and deficits. Estimating Conferences will be held as updated financial information becomes
available; and as deemed necessary and appropriate by the Oversight Board; and the City shall
adjust their estimates in accordance with the official estimates.
8. Payment of Debt and Transfer of Monies to a Trustee. The Oversight
Board has established a Fiscal Sufficiency Advisory Board ("FSAB ") and named its
Chairperson. The FSAB will, in its sole discretion, appoint an independent third party trustee
("Trustee") for the purposes of this Agreement. Upon the request of FSAB, the City shall (a)
establish segregated debt service funds; (b) maintain the appropriate balances in the segregated
debt service funds to ensure the timely payment of debt service on outstanding bonds and other
debt obligations; (c) deposit with the Trustee revenues pledged to the payment of bonds and
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other debt obligations; (d) for general obligation bonds, transfer to the Trustee such moneys from
ad valorem taxes levied for debt service as they are collected for deposit to the appropriate debt
service fund securing payment of general obligation bonds; (e) transfer to the Trustee such other
ad valorem taxes or other lawfully available funds in the event there is ever a deficiency in the
amount necessary to provide for the timely payment of debt service on the City's outstanding
general obligation bonds and other forms of debt obligations; (f) for bonds subject to annual
appropriation or other obligations on forms of indebtedness not secured by a specific revenue
source, transfer to the Trustee from lawfully available moneys a pro-rata portion of debt service
coming due on such bonds or obligations and continue to make such payments monthly until all
such bonds or obligations have been paid in full. The City shall also make such other payments
required and comply with the covenants contained in the legal documents authorizing the
issuance of such bonds or debt obligations. Any excess moneys, including interest earnings,
from pledged revenues remaining with the Trustee after providing for debt service on revenue
bonds due on the next payment date and maintaining any required reserves at their appropriate
level may be transferred to the City. The City will fully cooperate with the Oversight Board and
its representatives to implement this paragraph and take such other measures as the Oversight
Board or the FSAB deem necessary and proper in connection with debt repayment. The City
will cooperate with the FSAB; and the City's Finance Director or his/her designee shall attend
all meetings of the FSAB and shall provide the FSAB with any information or documents
requested by the FSAB .
9. Collection of Revenues Due to the City. The City has begun and shall
continue to make every effort, by any and all means available, including private contract, to
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collect all revenues due to the City under all enacted ordinances and contracts. The State of
Florida will assist with such efforts.
10. Incurring Debt. The City shall not incur any form of debt or liability
without the prior approval of the Oversight Board, for so long as the Oversight Board deems
necessary and appropriate.
11. Contractual Obligations. Effective immediately, the City shall not enter
into, amend, renew, or extend any new or existing contracts (including labor and union
contracts), leases, or any 'other binding agreements, which have more than an insubstantial
financial impact, including the sale of assets, (collectively referred to as "Contractual
Obligations") without the prior approval of the Oversight Board or its designee. By January 7,
1997, the Oversight Board and the City will develop a written understanding that will detail the
process for the City obtaining approval from the Oversight Board under this paragraph. Such
understanding will include, among other things, a working definition of the term "insubstantial
financial impact;" and include a means for the Oversight Board or its designee to advise the City
as to any suggested modifications to the Contractual Obligations or the reasons why any
Contractual Obligations were rejected by the Oversight Board or its designee. Nothing in this
Agreement shall limit the rights or impair the obligations of the City to comply with the
provisions of any contract in effect on the effective date prior to the execution of this Agreement,
or shall in any way impair the rights of the obligees of the City with respect to any such contract.
The City shall provide the Oversight Board with a list of any Contractual Obligations incurred
since December 11, 1996.
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12. State or Federal Assistance. The City shall not seek any state or federal
legislative action or any form of state or federal financial assistance that relates to the City's
financial emergency, unless such action or assistance is contained in the approved 1997 Plan, the
approved Five Year Plan, or as approved by the Oversight Board.
13. Documents and Information. The City shall provide sufficient
supporting documents to the 1997 Plan, the Five Year Plan and the Revised Plan. Upon the
request of the Oversight Board, the City shall immediately provide any additional information or
documents. Beginning on February 1, 1997 and every month thereafter, the City shall provide
the Oversight Board monthly reports which compare the actual revenues and expenditures for the
month with those included in any plan approved by the Oversight Board under this Agreement.
Upon notice from the Oversight Board, the City agrees to permit such persons as the Oversight
Board may designate to visit, inspect and observe the operations of the City; to examine, inspect
and copy any and all books, records, and other information of or pertaining to the City; and to
discuss the affairs of the City with any or all of the officials, employees and independent
accountants of the City. The Oversight Board will comply with applicable laws and regulations
regarding confidentiality of records maintained by the City.
14. Failure to Comply with the 'Terms of this Agreement. The City shall
notify the Oversight Board immediately, in writing, if the City or any City Commissioner
determines that the City has violated or anticipates a violation of any of the terms or conditions
of this Agreement, including but not limited to: (a) the failure of the City to submit any plan
under this Agreement; (b) an act of commission or omission by the City that jeopardizes the
City's financial recovery; or (c) deviation by the City from any plan hereunder approved by the
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Oversight Board ("Non-compliance of the Agreement"). If the Oversight Board determines that
there is a Non-compliance of the Agreement or anticipates a Non-compliance of the Agreement,
the Oversight Board shall notify the City in writing ("Notification of Non-compliance"). The
Notification of Non-compliance shall set forth in reasonable detail the terms or conditions of this
Agreement that the Oversight Board determined have been violated or anticipate will be violated.
The Oversight Board shall promptly notify the Governor of any Non-compliance of this
Agreement so that he may take any action necessary to protect the health, safety, and welfare of
the City's residents.
15. Independent Review by the Oversight Board. The City agrees that the
Oversight Board may conduct or cause to be conducted such independent audits, examinations,
or studies of the City as the Oversight Board deems appropriate and necessary.
16. Duration of this Agreement. This Agreement shall take effect on
December 23, 1996 and shall extend until a period of three years after the City has produced two
successive years of balanced operations, and none of the conditions exist that are set forth in
section 218.503(1) of the Florida Statutes.
17. Severability of the Provision in this Agreement. The provisions of this
Agreement are intended to be severable. If any provision of this Agreement shall be held to be
invalid or unenforceable in whole or in part, such provision shall be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity or enforceability
of the remaining provisions of this Agreement.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
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19. Bankruptcy Filing. The City acknowledges that it shall take no action to
file for bankruptcy unless it has so notified the Oversight Board and procured the approval of the
Governor, as required under § 218.503 of the Florida Statutes.
20. Amendments or Modifications of this Agreement. It is anticipated by
the parties that the terms and conditions of this Agreement will be periodically amended or ,
modified. Such amendments or modifications must be in writing and must be duly executed by
all parties to this Agreement; except that the Oversight Board may, in its sole discretion, waive
compliance by the City with any provision of this Agreement or extend the time specified for
performance by the City of any term or condition of the Agreement ("Waiver by the Oversight
Board"). Any Waiver by the Oversight Board shall be effective only to the extent specifically set
forth in writing and shall not, unless so specified, apply to any other or subsequent failure on the
part of the City to comply with any provision of this Agreement.
21. Contact Person for the City and the Oversight Board. All activities
pertaining to implementation of this Agreement shall be coordinated on behalf of the City by and
through the City Manager, who shall be the official contact and representative for the City. All
activities pertaining to implementation of this Agreement shall be coordinated on behalf of the
Oversight Board by and through the Chief of Staff designated by the Oversight Board, who shall
be the official contact and representative for the Oversight Board.
22. Notices and Communications. Any and all notices, advices or other
forms of communication, permitted, required or desired pursuant or related to any provision of
this Agreement shall be served (i) by facsimile transmission; and (ii) personal delivery or
overnight courier, as follows:
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To the City: City Manager
Att: Edward Marquez
City Manager's Office
Miami Riverside Center
444 S.W. 2nd Ave.
Miami, FL 33131
Telephone: (305) 416-1025
Facsimile: (305) 400-5042
To the Oversight Board: Chief of Staff
Att: Charles Wolfe
Financial Emergency Oversight Board
Miami Riverside Center
444 S.W. 2nd Ave.
Miami, FL 33131
Telephone: (305) 416-1025
Facsimile: (305)
To the Governor: Chief of Staff for the Governor
Att: Linda Shelley
The Capitol
Plaza Level 5
Tallahassee, FL 32399-0001
Telephone: (904) 488-5603
Facsimile: (904) 922-4292
23. Binding Effect. This Agreement shall be binding upon and enforceable
against any successors of each respective party, including but not limited to, successive City
Managers, City Commissioners, Governors, and Oversight Boards.
24. Intent to be Legally Bound. By signing this Agreement, the parties
hereto confirm and state that they have carefully read the Agreement, that they know the contents
thereof, that they fully expect to carry out each and every provision, and that they intend to be
legally bound by the rights and obligations set forth herein.
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25. Headings. The headings for each paragraph in this Agreement are for the
purposes of reference only and shall not limit or otherwise affect the meaning of any provision.
IN WITNESS WHEREOF, the parties hereto execute this Agreement, and they
affirm that they have the power to do so on behalf of the City and the Oversight Board.
M101/224787.1
EDW RD MARQU
City Manager
LT. GOVERNOR BUDDY MACKAY
Chair, Financial Emergency Oversight Board
GOVERNOR LAWTON CHILES
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CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
Honorable Mayor and Members December 20, 1996
To ` of the City Commission DATE : FILE
SUBJECT
Intergovernmental
Cooperation Agreement
FROM : 1;� d Marquez REFERENCES:
City Manager
ENCLOSURES:
RECOMMENDATION
It is respectfully recommended that the City Commission adopt the attached Resolution
authorizing and accepting the terms set forth by the attached Intergovernmental
Cooperation Agreement by and among the Governor, the Financial Emergency Oversight
Board and the City of Miami.
BACKGROUND
Due to the financial crisis of the City of Miami ("City"), pursuant to provisions of section
218.503, Florida Statutes, the City was declared by the Governor to be in a state of
financial emergency. In response, the Governor created the Financial Emergency
Oversight Board ("Oversight Board") to oversee the fiscal affairs of the City for a period
of three years after the City has produced two successive years of balanced operations,
and none of the conditions listed in section 218.503, Florida Statutes, for determining a
local governmental financial emergency exist. The Board has authorized the execution
and delivery of this Agreement to further define and detail the undertakings of the
Governor, the Board and the City in the following manner:
1. On or before January 3, 1997, the City shall approve and submit in writing to the
Oversight Board a Financial Recovery Plan for fiscal year 1996-97 fulfilling the
following requirements:
a) eliminate the approximately $68 million deficit;
b) eliminate at least 60% of the recurring deficit amount, and such recurring deficit
amount must be reduced with recurring revenues or recurring expense reductions;
c) base all underlying assumptions and information on the Stierheim Report; and
d) contain a statement by the City and its Commission that if the 1997 Plan is
approved under this Agreement, the City and its Commission is fully committed
to and will move forward with the implementation of all the components.
2. No later than January 20``', 1997, the Board will Review the 1997 Plan. In the event
that the Oversight Board approves the 1997 Plan, the City shall implement the 1997
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Plan .no later than forty-five (45) days from the date the Oversight Board approves
the 1997 Plan including the adoption of any necessary ordinances. In the event the
Oversight Board rejects the 1997 Plan, the City will be notified by the Oversight
Board by stating in sufficient detail the reasons for such rejection. Within ten (10)
days of receiving the rejection notice, the City shall approve by a vote of the City
Commission, and shall submit in writing to the Oversight Board, a revised 1997 Plan
that specifically redresses the reasons for the rejection.
3. On or before April 15, 1997, the City shall approve by a vote of the City
Commission, and shall submit in writing to the Oversight Board a Five Year
Financial Recovery Plan. This plan shall be based on official estimating conference
forecasts for revenues, expenditures, cash flow and deficits. Estimates by the
Estimating Conference will be divided between recurring and non -recurring, and
short-term and long-term estimates. The first estimates of the Estimating Conference
shall be completed by no later than February 28, 1997. The Five Year Plan must (a)
contain forecasted revenues and expenses, (b) eliminate 100% of the recurring deficit
amount for fiscal year 1997-98 and each year thereafter, and (c) contain an initial
operational recovery plan which addresses the managerial, operational and other
deficiencies which were discussed in the Stierheim Report. By no later than May 15,
1997, the Oversight Board will either approve or reject the Five Year Plan. In the
event the Oversight Board approves the Five Year Plan, the City shall immediately
implement all components of the plan including the adoption of any necessary
ordinances. Should the Oversight Board reject the Five Year Plan, the City shall
approve by a vote of the City Commission, and shall submit in writing to the
Oversight Board a revised Five Year Plan the specifically redresses the reasons for
rejecting the Five Year Plan.
4. At least ninety (90) days prior to the beginning of each fiscal year, the City shall
approve by a vote of the City Commission, and shall submit in writing to the
Oversight Board a Proposed Budget for the upcoming year. Within (20) days of
receiving the Proposed Budget, the Oversight Board will either approve or reject the
Proposed Budget. In the event that the Oversight Board approves the Proposed
Budget, the City shall take all necessary steps toward preparing and adopting a final
budget that is based on the Proposed Budget. Should the Proposed Budget be
rejected, the Oversight Board will inform the City by stating in sufficient detail the
reasons for such rejection. The City then must submit a revised Proposed Budget to
the Oversight Board within twenty (20) days that specifically redresses the reasons for
rejecting the Proposed Budget as set forth in the rejection notice. In fact, all budgets
prepared and approved by the City shall be approved by the Oversight Board.
Beginning on February 1, 1997, the City shall be prohibited from spending any funds
if it is not operating in accordance with a budget approved by the Oversight Board,
except such approval is not required for the payment of debt instruments of the City.
Any budget amendments requiring City Commission approval shall also be approved
by the Oversight Board.
96®946
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5. Within thirty (30) days of the final adoption of the budget for each fiscal year, and
within the thirty days (30) of any changes in the forecasts by the Estimating
Conference, the City shall revise its Five Year -Plan by bringing the Five Year Plan
into compliance with the final budget adopted by the City Commission or into
compliance with the latest official Estimating Conference forecast. Within twenty
(20) days of receiving the Revised Five Year Plan, the Oversight Board will either
approve or reject the Revised Plan; and the Oversight board will then notify the City
of its decision. In the event that the Oversight Board approves the Revised Five Year
Plan, the City shall take all necessary steps towards implementing each component of
the plan, including the adoption of any necessary ordinances. In the event the
Oversight Board rejects the Revised Five Year Plan, the Oversight Board will notify
the City with sufficient detail the reasons for such rejection. Within twenty (20) days
of the rejection notice, the City must then submit in writing to the Oversight Board an
amended Revised Five Year Plan that specifically redresses the reasons for rejecting
the Revised Five Year Plan. The Oversight Board will allow the City to periodically
revise its Five Year Plan, providing that such revisions are approved by the Oversight
Board.
6. The Components of the Five Year Plan, the Proposed Budget and the Revised Five
year Plan, ("Plans") shall be submitted to the Oversight Board in a format which will
be agreed to by the Chief of Staff to the Oversight Board and the City Manager. The
Plans shall:
A. Contain components based on projected revenues and expenditures approved by
the Estimating Conference;
B. Contain twenty-four (24) month cash flow analysis which reconciles the
components of any financial recovery plan approved by the Estimating
Conference. The Proposed Budget shall contain a twelve (12) month cash flow
analysis;
C. Beginning with fiscal year 1997-95 and each year thereafter, eliminate all known
deficits and provide for a structurally balanced budget where recurring revenues
are aligned with recurring expenditures;
D. Balance the current fiscal year budget and subsequent budgets;
E. Provide procedures to. avoid a fiscal emergency condition in the future
F. Enhance the ability of the City to regain access to the short-term and long-term
credit markets;
G. Increase managerial and operational accountability;
H. Consolidate or eliminate City programs and services;
I. Improve record keeping practices;
J. Increase collection of existing revenue sources;
K. Sell City assets, as appropriate;
L. Improve procurement practices, including competitive bidding procedures;
M. Review compensation and benefits for City employees and the City's employee
union contracts and negotiating practices;
N. Establish strong internal auditing practices;
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O. Improve the City's organizational structure; and
P. Contain a schedule of projected capital commitments of the City and proposed
sources of funding for such commitments.
7. All Plans and all budgets prepared by the City, shall be based on official Estimating
Conference forecasts for revenues, expenditures, cash flow, and deficits.
8. The Oversight Board has established a Fiscal Sufficiency Advisory Board who will
appoint an independent third party trustee who will oversee the Payment of Debt and
Transfer of Monies.
9. The Oversight Board requests the City continue to make every effort in the
Collection of Revenues Due to the City.
10. The City shall not incur any form of debt or liability without the proper approval of
the Oversight Board.
11. Effectively immediately, the City shall not enter into, amend, renew, or extend any
new or existing contracts (including labor and union contracts).
12. The City shall not seek any state or federal legislative action or any form of state or
federal financial assistance that relates to the City's financial emergency.
13. The City shall provide sufficient supporting documents to the 1997 Plan, the Five
Year Plan and the Revised Plan. Beginning February 1, 1997 and every month
thereafter, the City shall provide the Oversight Board monthly reports which compare
the actual revenues and expenditures of the month with those included in any plan
approved by the Oversight Board under this Agreement.
14. The Oversight Board is to be notified immediately, in writing, if the City or any City
Commissioner determines that the City has violated or anticipated a violation of any
of the terms of this Agreement.
15. The City agrees that the Oversight Board may conduct or cause to be conducted such
independent audits, examinations, or studies if deemed appropriate.
16. This Agreement will become effective December 23, 1996 and shall extend for a
period of three (3) years following the two (2) year balanced operations.
17. The provisions of this Agreement are intended to be severable.
18. This Agreement shall be governed by and construed in accordance with the laws of
the State of Florida.
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19. The City acknowledges that it shall take no action to file for bankruptcy unless it has
so notified the Oversight Board and received the approval of the Governor.
20. It is anticipated by the parties that the terms and conditions of this Agreement will be
periodically amended or modified.
21. The City Manager is charged with the coordination of all activities pertaining to
implementation of this Agreement on behalf of the City.
22. Notices and Communications will be served to the Office of the City Manger on
behalf of the City. All communications to the Oversight Board will be served to
Charles Wolfe. All communications to the Governor will be served to Linda Shelley.
23. This Agreement shall be binding upon and enforceable against any successors of
each respective party, including but not limited to, successive City Managers, City
Commissioners, Governors, and Oversight Boards.
24. By signing this Agreement, the parties hereto confirm and state that they have
carefully read the Agreement are legally bound by the rights and obligations set forth
herein.
M
96 - 946
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Intergovernmental Cooperation Agreement
by and among
the Governor, the Financial Emergency Oversight Board
and
The City of Miami
THIS INTERGOVERNMENTAL COOPERATION AGREEMENT (the "Agreement")
made and entered into as of the 23rd day of December, 1996, by and among the Governor of the
State of Florida ("Governor"), the Financial Emergency Oversight Board (the "Oversight
Board"), a body established by Executive Order 96-391, and the City of Miami (the "City"),
Dade County, Florida.
WITNESSETH
WHEREAS, on December 3, 1996, pursuant to the City's request, the Governor
acknowledged that the City is currently in a state of financial emergency according to the
provisions of section 218.503, Florida Statutes (1996), and
WHEREAS, the Governor has the responsibility to ensure that the health, safety and
welfare of the residents of and visitors to the City of Miami is maintained during this financial
emergency, and
WHEREAS, negative economic ramifications, such as lower credit ratings and higher
interest costs to the City of Miami, as well as possible spillover effects to other local
10
U
governments and the state, could result without state assistance and intervention in this local
government financial emergency, and
WHEREAS, the Governor created the Oversight Board to oversee the fiscal affairs of the
City for a period of three years after the City has produced two successive years of balanced
operations, and none of the conditions listed in sections 218.503, Florida Statutes, for
determining a local government financial emergency exist, and
WHEREAS, the Oversight Board and the City intend to cooperate with each other so that
the City of Miami is no longer in a state of financial emergency, and
WHEREAS, in order to implement such cooperative intergovernmental actions and carry
out the actions set forth in Executive Order 96-391, it is necessary to further define and detail the
undertakings of the Governor, the Oversight Board and the City in this Agreement, and
WHEREAS, the Oversight Board has authorized the execution and delivery of this
Agreement, and
WHEREAS, by majority decision of the City Commission, the City has authorized the
execution and delivery of this Agreement by the City, and
NOW, THEREFORE, for good and valuable consideration, and intending to be legally
bound hereby, the Governor, Oversight Board and the City agree as follows:
1. Financial Recovery Plan for Fiscal Year 1996-97. On or before
January 3, 1997, the City shall approve by a vote of the City Commission, and shall submit in
writing to the Oversight Board a financial recovery plan for fiscal year 1996-97 (the "1997
Plan"). The 1997 Plan must (a) eliminate the approximately $68 million deficit as estimated in
the Strategic Financial Recovery Plan prepared by Merrett R. Stierheim dated November 15,
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1996 (the "Stierheim Report"); (b) eliminate at least 60% of the recurring deficit amount, as
estimated in the Stierheim Report (approximately $48 million), and such recurring deficit amount
must be reduced with recurring revenues or recurring expense reductions; (c) base all underlying
assumptions and information on the Stierheim Report; and (d) contain a statement by the City
and its Commission that if the 1997 Plan is approved under this Agreement, the City and its
Commission is fully committed to and will move forward with the implementation of every
component of the 1997 Plan. The 1997 Plan shall be submitted to the Oversight Board in a
format which must be agreed to by the Chief of Staff to the Oversight Board and the City
Manager. The City Commission shall meet diligently and as often as necessary so that it may
develop, write and approve the 1997 Plan.
2. Review of the 1997 Plan by the Oversight Board. The Oversight Board
shall promptly review the 1997 Plan in light of, among other things, the criteria and requirements
set forth in this Agreement. By no later than January 20, 1997, the Oversight Board, in its sole
discretion, will either approve or reject the 1997 Plan; and the Oversight Board will then
promptly notify the City of its decision. In the event that the Oversight Board approves the 1997
Plan, the City shall implement immediately and expeditiously, but by no later than forty-five (45)
days17 from the date the Oversight Board approves the 1997 Plan, each component of the 1997
Plan, including the adoption of any necessary ordinances. In the event that the Oversight Board
rejects the 1997 Plan, the Oversight Board shall notify the City by stating in sufficient detail the
reasons for such rejection ("Rejection Notice of the 1997 Plan"). Within ten (10) days of
receiving the Rejection Notice of the 1997 Plan, the City shall approve by a vote of the City
1 / The word "days" as used in this Agreement shall mean all days, both business and non -business,
holiday and non -holiday.
M1011224707.1
3
Commission, and shall submit in writing to the Oversight Board a revised 1997 Plan ("Revised
1997 Plan") that specifically redresses the reasons for rejecting the 1997 Plan, as set forth in the
Rejection Notice of the 1997 Plan and otherwise meets the requirements of this Agreement. The
City Commission shall meet diligently and as often as necessary so that it may modify, write and
approve the 1997 Plan.
3. The Five Year Plan. On or before April 15, 1997, the City shall approve
by a vote of the City Commission, and shall submit in writing to the Oversight Board a five year
financial recovery plan (the "Five Year Plan"). The Five Year Plan shall be based on official
estimating conference forecasts for revenues, expenditures, cash flow and deficits ("Estimating
Conferences"). The Oversight Board shall establish and designate the members of the
Estimating Conference for revenues, expenditures, cash flow, and deficit. Estimates by the
Estimating Conference will be divided between recurring and non -recurring, and short-term and
long-term estimates. Such estimates shall be projected for at least a five-year period. The first
estimates of the Estimating Conference shall be completed by no later than February 28, 1997.
The Five Year Plan must (a) contain forecasted revenues and expenses, recurring and non-
recurring, for the five fiscal years beginning with fiscal year 1996-97; (b) for fiscal year 1997-98
and each year thereafter, eliminate 100% of the recurring deficit amount, as agreed upon by the
Estimating Conference, and such recurring deficit amount must be reduced with recurring
revenues or recurring expense reductions; and (c) contain an initial operational recovery plan
which addresses the managerial, operational and other deficiencies which were discussed in the
Stierheim Report, as well as any other deficiencies that may be disclosed in any official audits of
the City, or as may be determined by the Oversight Board ("Operational Recovery Plan"). It is
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anticipated that the Operational Recovery Plan will be updated from time to time, as the
improvements thereunder are implemented, or as additional information becomes available. The
State of Florida shall assist with the preparation of the Five Year Plan. By no later than May 15,
1997, the Oversight Board, in its sole discretion, will either approve or reject the Five Year Plan;
and the Oversight Board will then promptly notify the City of its decision. In the event that the
Oversight Board approves the Five Year Plan, the City shall implement immediately and
expeditiously each component of the plan, including the adoption of any necessary ordinances
and any ordinances specified by the Oversight Board. In the event that the Oversight Board
rejects the Five Year Plan, the Oversight Board shall notify the City by stating in sufficient detail
the reasons for such rejection ("Rejection Notice of the Five Year Plan"). Within twenty days of
receiving the Rejection Notice of the Five Year Plan, the City shall approve by a vote of the City
Commission, and shall submit in writing to the Oversight Board a revised Five Year Plan
("Revised Five Year Plan") that specifically redresses the reasons for rejecting the Five Year
Plan, as set forth in the Rejection Notice of the Five Year Plan and otherwise meets the
requirements of this Agreement. The City Commission shall meet diligently and as often as
necessary so that it may modify, write and approve the Five Year Plan.
4. Approval of the City's Budgets and Spending. At least ninety (90) days
prior to the beginning of each fiscal year, the City shall approve by a vote of the City
Commission, and shall submit in writing, to the Oversight Board a proposed budget for the
upcoming year ("Proposed Budget").21. Within twenty (20) days of receiving the Proposed
2/ It is assumed that the Proposed Budget submitted under this paragraph will not materially differ
from the final budget. At any time that the City anticipates that the Proposed Budget will be
materially different from the final budget, the City shall immediately notify the Oversight Board of
such difference.
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Budget, the Oversight Board, in its sole discretion, will either approve or reject the Proposed
Budget; and the Oversight Board will then promptly notify the City of its decision. In the event
that the Oversight Board approves the Proposed Budget, the City shall take all necessary steps
toward preparing and adopting a final budget that is based on the Proposed Budget. In the event
that the Oversight Board rejects the Proposed Budget, the Oversight Board shall notify the City
by stating in sufficient detail the reasons for such rejection ("Rejection of the Proposed Budget")
Within twenty days of receiving the Rejection Notice of the Proposed Budget, the City shall
approve by a vote of the City Commission, and shall submit in writing to the Oversight Board a
revised Proposed Budget ("Revised Proposed Budget") that specifically redresses the reasons for
rejecting the Proposed Budget, as set forth in the Rejection Notice of the Proposed Budget and
otherwise meets the requirements of this Agreement. The City Commission shall meet diligently
and as often as necessary so that it may modify, write and approve the budget. All budgets
prepared and approved by the City shall be approved by the Oversight Board. Beginning on
February 1, 1997, the City shall be prohibited from spending any funds if it is not operating in
accordance with a budget approved by the Oversight Board, except such approval is not required
for the payment of debt instruments of the City. Any budget amendments requiring City
Commission approval shall also be approved by the Oversight Board,
S. Revised Five Year Plan. The City shall (a) within thirty (30) days of the
final adoption of the budget for each fiscal year, and (b) within thirty (30) days of any change in
the forecasts by the Estimating Conference, revise its Five Year Plan ("Revised Five Year Plan")
by bringing the Five Year Plan into compliance with the final budget adopted by the City
Commission or into compliance with the latest official Estimating Conference forecast. Within
M101/224787.1
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twenty (20) days of receiving the Revised Five Year Plan, the Oversight Board, in its sole
discretion, will either approve or reject the Revised Plan; and the Oversight Board will then
promptly notify the City of its decision. In the event that the Oversight Board approves the
Revised Five Year Plan, the City shall take all necessary steps toward implementing each
component of the plan, including the adoption of any necessary ordinances. In the event that the
Oversight Board rejects the Revised Five Year Plan, the Oversight Board shall notify the City by
stating in sufficient detail the reasons for such rejection ("Rejection Notice of the Revised Five
Year Plan"). Within twenty (20) days of receiving the Rejection Notice of the Revised Five Year
Plan, the City shall approve by a vote of the City Commission, and shall submit in writing to the
Oversight Board an amended Revised Five Year Plan ("Amended Revised Five Year Plan") that
specifically redresses the reasons for rejecting the Revised Five Year Plan, as set forth in the
Rejection Notice of the Revised Five Year Plan and otherwise meets the requirements of this
Agreement. The City Commission shall meet diligently and as often as necessary so that it may
modify and approve the Revised Five Year Plan. The City may periodically revise its Five Year
Plan, as additional information becomes available; provided that such revisions are approved by
the Oversight Board (under the procedures set forth in this paragraph).
6. Components of the Five Year Plan, the Proposed Budget and the
Revised Five Year Plan. The Five Year Plan, the Proposed Budget and the Revised Five Year
Plan (collectively referred to as the "Plans") shall reflect a level of detail as may be necessary for
the Oversight Board to act under this Agreement; and shall be submitted to the Oversight Board
M101/224787.1
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in a format which will be agreed to by the Chief of Staff to the Oversight Board and the City
Manager. The Plans shall:
a. Contain components based on projected revenues and expenditures
approved by the Estimating Conference;
b. Contain a twenty-four (24) month cash flow analysis, which reconciles the
components of any financial recovery plan that have been approved by the Estimating
Conference, except for the Proposed Budget which shall contain a twelve (12) month cash flow
analysis;
C. Beginning with fiscal year 1997-98 and each year thereafter, eliminate all
known deficits and provide for a structurally balanced budget where recurring revenues are
aligned with recurring expenditures;
d. Balance the -current fiscal year budget and subsequent budgets through
sound budgetary practices, including but not limited to, reductions in expenditures,
improvements in productivity, and increases in revenues;
C. Provide procedures to avoid a fiscal emergency condition in the future,
including establishing adequate cash reserves and providing appropriate fund reserves to cover
other unfunded liabilities;
f. Enhance the ability of the City to regain access to the short-term and long-
term credit markets;
g. Increase managerial and operational accountability;
h. Consolidate or eliminate City programs and services;
3/ It is not intent of this Agreement to. -list all of the components for the Plans.
8
H1017224787.1
i. Improve record keeping practices;
j. Increase collection of existing revenue sources;
k. Sell City assets, as appropriate;
1. Improve procurement practices, including competitive bidding procedures;
M. Review compensation and benefits for City employees and the City's
employee union contracts and negotiating practices;
n. Establish strong internal auditing practices;
o. Improve the City's organizational structure; and
P. Contain a schedule of projected capital commitments of the City and
proposed sources of funding for such commitments.
7. Estimating Conferences. All Plans and all budgets prepared by the City,
shall be based on official Estimating Conference forecasts for revenues, expenditures, cash flow
and deficits. Estimating Conferences will be held as updated financial information becomes
available; and as deemed necessary and appropriate by the Oversight Board; and the City shall
adjust their estimates in accordance with the official estimates.
8. Payment of Debt and Transfer of Monies to a Trustee. The Oversight
Board has established a Fiscal Sufficiency Advisory Board ("FSAB ") and named its
Chairperson. The FSAB will, in its sole discretion, appoint an independent third party trustee
("Trustee") for the purposes of this Agreement. Upon the request of FSAB, the City shall (a)
establish segregated debt service funds; (b) maintain the appropriate balances in the segregated
debt service funds to ensure the timely payment of debt service on outstanding bonds and other
debt obligations; (c) deposit with the Trustee revenues pledged to the payment of bonds and
6
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other debt obligations; (d) for general obligation bonds, transfer to the Trustee such moneys from
ad valorem taxes levied for debt service as they are collected for deposit to the appropriate debt
service fund securing payment of general obligation bonds; (e) transfer to the Trustee such other
ad valorem taxes or other lawfully available funds in the event there is ever a deficiency in the
amount necessary to provide for the timely payment of debt service on the City's outstanding
general obligation bonds and other forms of debt obligations; (0 for bonds subject to annual
appropriation or other obligations on forms of indebtedness not secured by a specific revenue
source, transfer to the Trustee from lawfully available moneys a pro-rata portion of debt service
coming due on such bonds or obligations and continue to make such payments monthly until all
such bonds or obligations have been paid in full. The City shall also make such other payments
required and comply with the covenants contained in the legal documents authorizing the
issuance of such bonds or debt obligations. Any excess moneys, including interest earnings,
from pledged revenues remaining with the Trustee after providing for debt service on revenue
bonds due on the next payment date and maintaining any required reserves at their appropriate
level may be transferred to the City. The City will fully cooperate with the Oversight Board and
its representatives to implement this paragraph and take such other measures as the Oversight
Board or the FSAB deem necessary and proper in connection with debt repayment. The City
will cooperate with the FSAB; and the City's Finance Director or his/her designee shall attend
all meetings of the FSAB and shall provide the FSAB with any information or documents
requested by the FSAB .
9. Collection of Revenues Due to the City. The City has begun and shall
continue to make every effort, by any and all means available, including private contract, to
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collect all revenues due to the City under all enacted ordinances and contracts. The State of
Florida will assist with such efforts.
10. Incurring Debt. The City shall not incur any form of debt or liability
without the prior approval of the Oversight Board, for so long as the Oversight Board deems
necessary and appropriate.
11. Contractual Obligations. Effective immediately, the City shall not enter
into, amend, renew, or extend any new or existing contracts (including labor and union
contracts), leases, or any other binding agreements, which have more than an insubstantial
financial impact, including the sale of assets, (collectively referred to as "Contractual
Obligations") without the prior approval of the Oversight Board or its designee. By January 7,
1997, the Oversight Board and the City will develop a written understanding that will detail the
process for the City obtaining approval from the Oversight Board under this paragraph. Such
understanding will include, among other things, a working definition of the term "insubstantial
financial impact;" and include a means for the Oversight Board or its designee to advise the City
as to any suggested modifications to the Contractual Obligations or the reasons why any
Contractual Obligations were rejected by the Oversight Board or its designee. Nothing in this
Agreement shall limit the rights or impair the obligations of the City to comply with the
provisions of any contract in effect on the effective date prior to the execution of this Agreement,
or shall in any way impair the rights of the obligees of the City with respect to any such contract.
The City shall provide the Oversight Board with a list of any Contractual Obligations incurred
since December 11, 1996.
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12. State or Federal Assistance. The City shall not seek any state or federal
legislative action or any form of state or federal financial assistance that relates to the City's
financial emergency, unless such action or assistance is contained in the approved 1997 Plan, the
approved Five Year Plan, or as approved by the Oversight Board.
13. Documents and Information. The City shall provide sufficient
supporting documents to the 1997 Plan, the Five Year Plan and the Revised Plan. Upon the
request of the Oversight Board, the City shall immediately provide any additional information or
documents. Beginning on February 1, 1997 and every month thereafter, the City shall provide
the Oversight Board monthly reports which compare the actual revenues and expenditures for the
month with those included in any plan approved by the Oversight Board under this Agreement.
Upon notice from the Oversight Board, the City agrees to permit such persons as the Oversight
Board may designate to visit, inspect and observe the operations of the City; to examine, inspect
and copy any and all books, records, and other information of or pertaining to the City; and to
discuss the affairs of the City with any or all of the officials, employees and independent
accountants of the City. The Oversight Board will comply with applicable laws and regulations
regarding confidentiality of records maintained by the City.
14. Failure to Comply with the Terms of this Agreement. The City shall
notify the Oversight Board immediately, in writing, if the City or any City Commissioner
determines that the City has violated or anticipates a violation of any of the terms or conditions
of this Agreement, including but not limited to: (a) the failure of the City to submit any plan
under this Agreement; (b) an act of commission or omission by the City that jeopardizes the
City's financial recovery; or (c) deviation by the City from any plan hereunder approved by the
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Oversight Board ("Non-compliance of the Agreement"). If the Oversight Board determines that
there is a Non-compliance of the Agreement or anticipates a Non-compliance of the Agreement,
the Oversight Board shall notify the City in writing ("Notification of Non-compliance"). The
Notification of Non-compliance shall set forth in reasonable detail the terms or conditions of this
Agreement that the Oversight Board determined have been violated or anticipate will be violated.
The Oversight Board shall promptly notify the Governor of any Non-compliance of this
Agreement so that he may take any action necessary to protect the health, safety, and welfare of
the City's residents.
15. Independent Review by the Oversight Board. The City agrees that the
Oversight Board may conduct or cause to be conducted such independent audits, examinations,
or studies of the City as the Oversight Board deems appropriate and necessary.
16. Duration of this Agreement. This Agreement shall take effect on
December 23, 1996 and shall extend until a period of three years after the City has produced two
successive years of balanced operations, and none of the conditions exist that are set forth in
section 218.503(1) of the Florida Statutes.
17. Severability of the Provision in this Agreement. The provisions of this
Agreement are intended to be severable. If any provision of this Agreement shall be held to be
invalid or unenforceable in whole or in part, such provision shall be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity or enforceability
of the remaining provisions of this Agreement.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
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19. Bankruptcy Filing. The City acknowledges that it shall take no action to
file for bankruptcy unless it has so notified the Oversight Board and procured the approval of the
Governor, as required under § 218.503 of the Florida Statutes.
20. Amendments or Modifications of this Agreement. It is anticipated by
the parties that the terms and conditions of this Agreement will be periodically amended or
modified. Such amendments or modifications must be in writing and must be duly executed by
all parties to this Agreement; except that the Oversight Board may, in its sole discretion, waive
compliance by the City with any provision of this Agreement or extend the time specified for
performance by the City of any term or condition of the Agreement ("Waiver by the Oversight
Board"). Any Waiver by the Oversight Board shall be effective only to the extent specifically set,
forth in writing and shall not, unless so specified, apply to any other or subsequent failure on the
part of the City to comply with any provision of this Agreement.
21. Contact Person for the City and the Oversight Board. All activities
pertaining to implementation of this Agreement shall be coordinated on behalf of the City by and
through the City Manager, who shall be the official contact and representative for the City. All
activities pertaining to implementation of this Agreement shall be coordinated on behalf of the
Oversight Board by and through the Chief of Staff designated by the Oversight Board, who shall
be the official contact and representative for the Oversight Board.
22. Notices and Communications. Any and all notices, advices or other
forms of communication, permitted, required or desired pursuant or related to any provision of
this Agreement shall be served (i) by facsimile transmission; and (ii) personal delivery or
overnight courier, as follows:
HI01/224787.1
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To the City: City Manager
Att: Edward Marquez
City Manager's Office
Miami Riverside Center
444 S.W. 2nd Ave.
Miami, FL 33131
Telephone: (305) 416-1025
Facsimile: (305) 400-5042
To the Oversight Board: Chief of Staff
Att: Charles Wolfe
Financial Emergency Oversight Board
Miami Riverside Center
444 S.W. 2nd Ave.
Miami, FL 33131
Telephone: (305) 416-1025
Facsimile: (305)
To the Governor: Chief of Staff for the Governor
Att: Linda Shelley
The Capitol
Plaza Level 5
Tallahassee, FL 32399-0001
Telephone: (904) 488-5603
Facsimile: (904) 922-4292
23. Binding Effect. This Agreement shall be binding upon and enforceable
against any successors of each respective party, including but not limited to, successive City
Managers, City Commissioners, Governors, and Oversight Boards.
24. Intent to be Legally Bound. By signing this Agreement, the parties
hereto confirm and state that they have carefully read the Agreement, that they know the contents
thereof, that they fully expect to carry out each and every provision, and that they intend to be
legally bound by the rights and obligations set forth herein.
M101/224787.1
(Signature Page Follows)
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25. Headings. The headings for each paragraph in this Agreement are for the
! purposes of reference only and shall not limit or otherwise affect the meaning of any provision.
IN WITNESS WHEREOF, the parties hereto execute this Agreement, and they
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'1 EDWARD MARQUEZ
1 City Manager
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M101/224787.1
LT. GOVERNOR BUDDY MACKAY
Chair, Financial Emergency Oversight Board
GOVERNOR LAWTON CHILES
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1. Improve procurement practices, including competitive bidding procedures;
M. Review compensation and benefits for City employees and the City's
employee union contracts and negotiating practices;
n. Establish strong internal auditing practices;
o. Improve the City's organizational structure; and
P. Contain a schedule of projected capital commitments of the City and
proposed sources of funding for such commitments.
7. Estimating Conferences. All Plans and all budgets prepared by the City,
shall be based on official Estimating Conference forecasts for revenues, expenditures, cash flow
and deficits. Estimating Conferences will held as updated financial information becomes
available; and as deemed necessary and appropriate by the Oversight Board; and the City shall
adjust their estimates in accordance with the official estimates. �'7. 3.3
8. Payment of Debt and Transfer of Monies to a Trust". The Oversight
Board has established a Fiscal Sufficiency Advisory Board (FSAB 'D and named its
Chairperson. The FSAB will, in its sole discretion, appoint an independent third party trustee
("Trustee") for the purposes of this Agreement Upon the request of FSAB , the City shall (a)
establish segregated debt service funds; (b) maintain the appropriate balances in the segregated
debt service funds to ensure the timely payment of debt service on outstanding bonds and other
debt obligations; (c) deposit with the Trustee revenues pledged to the payment of bonds and
other debt obligations; (d) for general obligation bonds, transfer to the Trustee such moneys fiom
ad valorem taxes levied for debt service as they are collected for deposit to the appropriate debt
servifund �)payu�eat of general obligati . $.mds; () transfer to the Trustee such other
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ad valorem taxes or other lawfully available funds in the event there is ever a deficiency in the
amount necessary to provide for the timely payment of debt service on the City's outstanding
general obligation bonds; (f) for bonds subject to annual appropriation or other obligations on
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forms of indebtedness not rocpived-by a specific revenue source, transfer to the Trustee from
lawfully available moneys a pro-rata portion of debt service coming due on such bonds or
obligations and continue to make such payments monthly until all such bonds or obligations have
been paid in full. The City shall also make such other payments required and comply with the
covenants contained in the legal documents authorizing the issuance of such bonds or debt
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obligations. Any excess moneys, including aemued-taterest, from pledged revenues remaining
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with the Trustee afar providing for debt service on revenue bonds4enerally one -sixth (1/6) of re,Ao re ?
interest and one -twelfth (1/12) of princip4 due on the next payment date and maintaining any "e.,.
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required reserves at their appropriate level may be transferred to the City, ' ,
The City will fully cooperate with the Oversight Board and its representatives to implement this If
paragraph and take such other measures as the Oversight Board or the FSAB deem necessary
and proper in connection with debt repayment. The City will cooperate with the FSAB; and the
City's Finance Director or his/her designee shall attend all meetings of the FSAB and shall
provide the FSAB with any information or documents requested by the FSAB .
9. CoUtedon of Revenues Due to the City. The City has begun and shall
continue to make every effort, by any and all means available, including private contract, to
collect all revenues due to the City under all enacted ordinances and contracts. The State of
Florida will assist with such efforts. 1 7. k 1.'. 4
10. Incurring Debi. The City shall not incur any form of debt or liability 3.1 ', C.
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