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HomeMy WebLinkAboutM-84-0922CI" Or MIAMI. RLOOIDA INTER -OFFICE• N�UMc Yro. Mr. P ward Gary OATS July 16, 1984 City Manager FOUR: SUBJECT Coopers Lybrand Contract FROM. Maurice A. Ferri REFERENCES. Mayor ENCLOSURES.1 Please place early on the agenda for the July 30th meeting the subject of Coopers and Lybrand, Metropolitan Dade County and Industrial Revenue Bonds, and the possibility of Miami advertising for a new audit firm. For your information, the IRB's are under serious fire in Congress because of abuses such as the current Coopers and Lybrand bond being issued by Dade County's-Industrial Development Authority. Enclosed is a copy of a letter from Robert C. Ellyson, Managing Partner for Coopers and Lybrand in Miami. He claims to have informed me of the pending move out of the City. I do not recall the conversation, but I am sure he is correct and I do not question his statements on the matter. V -d" While the'City is working diligently to build up the Downtown area known as the central business district, here we have Metro making low financing available to a firm already established in our community and helping them move from Miami to the unincorporated area at tax -payers expense. Other than in the construction of the building itself, not one new job is being created. On a totally unrelated matter, some Commissioners at Metro want to impose a road cost for street improvements on Cordis Corporation, an employer of 1, 500 people in Dade County, who wants to expand to 2,500 employees and are upset enough with this community to the point they are looking for alternatives to move out of Miami. I have stated to Sharon Bro%m, the Coopers & Lybrand partner in charge of the City of Miami, that my problem with Coopers in no way concerns the quality of the exceptionally fine work done by the firm. I have also told Sanson Kline Jacomino that if we were to give the contract to another of the big eight accounting firms, that would not jeopardize their relationship with the City of Miami. In other words. I have no problems with the minority firms. ��. would the Administration carefully study the issue and came back to the Commission with a remotion on July 30. I have a series of alternatives I would like to outline for the Commission to comider: 1. Coopers 4 Lybrand should not go ahead with their moving project. I realize they can get dwaW space out of the City of Miami, but if everyone were to follow that logic, than we would no longer have coamlercial properties in Miami as, obviously, dwre is dlVer land and it is cheaper to build two-story buildings than 20-story AM Ha4MANMN Mr. Howard Gary July 16, 1984 Page 2 buildings. Under that logic, Southeast Bank would not have built their tower, and Citicorp, Barnett, NCNB, Lincoln Properties, Equitable and so many others should no longer build in Miami. For the City of Miami to allow Coopers & Lybrand to do this and remain on our account is, to me, totally unacceptable. 2. To request Metro to reverse their offer --confirmed by Director John 11ailey-- of Industrial Revenue Bonds for $8.5 million at a payback of 621 of the payment rate which, at the current time would make the interest close to 8%; in other words, 381 under the market. In addition, since the interest is tax exempt, it is obviously the tax payers w)w would be subsidizing the move of Coopers Lybrand from Miami to the unincorporated area. It would thus transfer 200 well - paid people who now work in Miami, out of the City. I would like to request that the Manager invite at least an Assistant County Manager to attend the Commission meeting of July 30, to discuss this particular issue, if nothing else, so that Metro will not issue any further bonds that do not V -ar create jobs but, rather, transfer jobs out of Miami. To put it in proper V0. perspective for our sister government, how would they feel if the State of Florida gave 8% interest financing to Cordis to move to Palm Beach? 3. If Coopers 6 Lybrand insists and Metro does not desist in offering this damaging financing to them, the City should cancel their contract at the end of the current fiscal year, structure a selection committee similar to the ones we have used in the past to select professional contracts, and open up the process for a public bid. Three firms have been our auditors since I have been Mayor: Bob Morgan's firm which subsequently merged with Touche Ross; Peat Marwick; and now Coopers & Lybrand. At the last bid procedure, a statement was made to Coopers that their contract would last from three to five years, which is reasonable and proper under the standards of well managed city governments in the U.S.A. As a matter of fact, Coopers themselves used this argument in the discussions as to whether we should rebid the Peat Marwick contract. The present Coopers contract is for five years, three of which will have gone by at the end of September. We have the -t right to cancel at that time. It is my opinion that we should do so unless this utter is clarified. The City Commission has the fiduciary responsibility of protects the people of the City of Miami. i wy.asn Emi. cc: Hon. Conaissioners J. Garcia Pedrosa R. Rosenkrantz C. Garcia S. Brown public acmunlaMs I9EM AVVM kl m+, Ronda 33M in pinapal areas of the W&fd Maurice A. Ferre Mayor City of Miami 3500 Pan American Drive Miami, Florida 33133 Dear Mayor Ferre: ieleovirm (305) 358.6363 July 5, 1984 At a recent commission meeting you made a comment that Coopers b Lybrand was moving outside the City of Miami and that such action would be deemed inappropriate since we are auditors for the City. You will recall that we were sensitive to the possibility that city officials might have some adverse reaction to our move and, accordingly, we took the initiative in discussing the matter with you over a year ago prior to any commitment on our part to move into the unincorporated area. I discussed the matter with you'and you indicated you had no problem at all with such a move; however, you suggested I discuss the matter with the other City Commissioners and the City Manager. I thereupon talked to Mr. Howard Gary and Commissioner Carollo. Sharon Brown talked to Commissioner Plummer, and she and I both met with Commissioner Dawkins, all of whom indicated they had no adverse feeling about the move. We tried on several occasions to contact Commissioner Perez but it was necessary for him to cancel two meetings that had been arranged. We were never able to speak directly with him. As you can see, we were sensitive to this issue and did everything that, in my judgement, should have been necessary to assure ourselves that there would be no adverse reaction from the City Commission even though our planned move has never been intended to diminish our commitment to the City of Miami. I thought perhaps you might have forgotten our conversation. Robert C. Ellyson cc: Commissioner Carollo Commissioner Dawkins Commissioner Perez Commissioner Plummer City Manager Howard Gary J6