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HomeMy WebLinkAboutR-83-0321J-83-255 rr RESOLUTION NO. S3�.�tiY A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT, IN SUBSTANTIALLY THE FORM ATTACHED, WITH MIAMI CAPITAL DEVELOPMENT, INC. (MCDI), PROVIDING MONIES IN AN AMOUNT NOT TO EXCEED $500,000 FROM CAPITAL IMPROVEMENT FUNDS, _ TO FACILITATE AN INSURANCE BUSINESS DEVELOPMENT PROGRAM IN CONJUNCTION WITH THE INSURANCE EXCHANGE OF THE AMERICAS WITH FUNDS THEREFOR ALLOCATED FROM CAPITAL IMPROVMENT FUNDS. WHEREAS, on July 22, 1982, the City Commission by Motion 82-660, approved the allocation of $500,000 in stand-by credit to the Insurance Exchange of the Americas; and WHEREAS, on December 9, 1982, the City Commission adopted Ordinance No. 9534 making appropriations for capital improvements, continuing previously approved capital improvement projects, and establishing new capital improvement projects to begin during fiscal year 1982-83; and WHEREAS, Insurance Exchange of the Americas, Inc. has requested authority to borrow funds to meet start-up costs of that corporation; and WHEREAS, the City cannot legally provide loans to for -profit businesses; and WHEREAS, Miami Capital Development, Inc. (MCDI) has determined that support of the Insurance Exchange of the Americas, Inc. will help carry out the objective of MCDI to stimulate business development within the City; and WHEREAS, the City is desirous of assisting MCDI to promote local business development within the insurance industry; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: �17lJ_ A. PP, G 1983 83-321. t r Section 1. The City Manager is hereby authorized to execute an agreement, in substantially the form attached, with Miami Capital Development, Inc. providing monies in an amount not to exceed $500,000 to facilitate an insurance business development program in conjunction with the Insurance Exchange of the Americas, Inc., with funds therefor hereby allocated from Capital Improvement Funds. PASSED AND ADOPTED this 6th day of April , 1983. Maurice A. Ferre _ MAURICE A. FERRE M A Y 0 R ATTEST: RAPPH G. ONGIE, CITY CRK PREPARED AND APPROVED BY: ROBERT F. CLARK DEPUTY CITY ATTORNEY Li CITY OF MIA:1I li INSURANCE BUSINESS DEVELOPMENT CONTRACT 83-321 3. 4 lime n dme n t s ARTICLE IV 4.1 Termination Clause U-11:4 i9'"MIi7 5.1 Signatories 7 7 83-321 f r CITY OF MIAM1, FLORTDA INSUPANCJE BUSINESS DEVELOPMENT CONTRACT THIS AGREEMENT, entered into this day of , 1983, by and between the City of Miami, a political subdivision of the State of. Florida, hereinafter referred to as the "CITY", and Miami Capital Development, Inc., hereinafter referred to as "MCDI", a corpor- ate body fully organized and existing, by virtue of the laws of the State of Florida, as a non-profit corporation, having its principal office at 100 N. Biscayne Boulevard, 9th Floor, Miami, Florida 33132. 11 I T N E S S E T I1 WHEREAS, the City Commission, on December 9, 1982, adopted Ordi- nance No. 9534 making appropriations for capital improvements, conti- nuing previously approved capital improvement projects, and establishing new capital improvement projects to begin during fiscal year 1982-83, and; WHEREAS, this Ordinance appropriated a sum of. $500,000 from FY183 Florida Power and Light Franchise Revenues for an "Insurance Exchange'' project, and; WHEREAS, the City Commission, in April 1983, adopted Resolution No. authorizing the City Manager to enter into a contract with MCDI to facilitate an insurance business development program in conjunction with the Insurance Exchange of the Americas, Inc. ("IEA") , and; WHEREAS, IEA was incorporated in 1981, under the authority of Chapter 629.401 of the Florida Statutes to provide a facility for the underwriting of: 1) reinsurance of all kinds of insurance; 2) direct insurance of all kinds on risks located entirely outside the United States; and, 3) surplus lines insurance eligible for export under 5.626.916 or 5.626.917 and placed through a licensed Florida surplus lines agents, and; 0 83-321 V 1i ICIi[:RFES, IEA is desirous of having the authority to bor.rG:•i funs to meet start-up costs of the Corporation, and; 10EPEAS, IEA contends that havillq such authority will facilitate the Corporation's ability to borrow funds from private lending insti- tutions, and; WHEREAS, MCDI has determined that support of ILA will help MCDI carry out its objective to stimulate business development within the City of Miami, and; WHEREAS, the City is desirous of assisting MCDI to promote business development within the insurance industry; NOW, THEREFORE, the CITY and MCDI agree as follows: ARTICLE I 1.1 Contract Provisions A. Upon execution of this Agreement, the CITi' shall establish a financial transaction system whereby MCDI may promptly obtain from the CITY the funds necessary, up to $500,000, to make loans to finance the operation of IEA. It is understood that the term "financial transaction system" as used in this Agree- ment shall encompass a procedure whereby the CITY will make said funds available to MCDI; in the event said funds are not forthcoming to !.ICDI from the CITY for any reason, then notwith- standing any other term hereof MCDI shall have no obligation whatsoever to fund said loans. B. It is understood that all the provisions of this contract will be contingent upon 14CDI executing a contract with the Insurance Exchange which is approved by the City Manager, which approval shall not be unreasonably withheld. Such contract shall contain but not be limited to the following provisions: -2- 83-321 C f (1) That subject to the provisions of Paragraph 1.1A of this Agreement, the IEA may barrow up to $500,000 from MCDI for operating expenses. (2) Such loan may be drawn down at the rate of $100,000 per month beginning in JApril, 1983. (3) All of the loan funds to be requested must be requested by September 30, 1983. (4) Interest payments shall be made by the IEA to MCDI on a quarterly basis. The interest rate shall be the same as the prime interest rate of the bank at which the CITY con- ducts most of its business. The rate will be adjusted on a quarterly basis for the next succeeding quarter as of the first business day of each such quarter. For example, if the bank's prime interest rate on October 1, 1983 was 10% and the outstanding loan was $500,000 as of October 1, 1983, IEA t,.ould be required to make an interest payment to MCDI of $12,500 ($500,000 X 10-) . 4) for the period October 1, 1983 through ^ecember 31, 1983. (5) IEA shall make the interest payment to MCDI by the tenth of the month following the end of each quarter.. (6) No interest shall accrue on the loan until October 1, 1983. The amount of interest payable for the quarter ending December 31, 1983 shall be based on the amount of funds loaned to IEA as of October 1, 1983. (7) Payment of loan principal shall begin as of October 1, 1985 and be sent quarterly by IEA to MCDI on the tenth calendar day following the end of each quarter. The final payment of principal must be made by January 10, 1992. The quarterly payments must be made in sufficient amounts to retire the loan by January 10, 1992 ($17,857.15/quarter on a $500,000 loan). IEA may prepay any part of the loan in increments of. $5,000 at the end of each quarter or may repay the entire loan at anytime without Penalty. - 3- 83--321 C f (8) t•ithi.n ninety (90) da•,, from the datc' M(7C f anc_! T":, enter into an A(ireement providin(t fnr. a $50(),()()') lc»ri to TE.,r and tho CITY shall jointly develop an affirriat.i e actio plan specifying what ac.t i n i will be t:ar:en by eac: 1 of th(_, parties to encouracfe and promote the irivolvcmr-nt )f rdnori tie,-; in the activities of IFA. Implc,mr�ntotion of the plan sh_+11 begin immediately after the! plan i s developed. 2•.CDI and Iil� shall prepare a progress report at the end of each fiscal year beginning October, 1983 during the term of the loan agreement regarding the implementation and success of the affirmative action plan, and shall submit said report to the City's Department of Economic Development- by October 31st of each year. The City's Department of Economic Develop7ent shall prepare a progress report by November 30, 1983 and sixty (60) days after the end of each fiscal Year theret:fter during the term of the loan agreement as to the implementation and success of the affirmative action plan. (9) IEI: agrees to assume the leadership role in developing a three-tier educational program with local education institu- tions to assure that there is a skilled labor pool available to support the growth of the insurance industry in Miami. Employment projections (see attached) provided by IEA indi- cate that 1,869 jobs will be generated during the period of 1983-86. IEA shall make every effort to generate 1,869 jobs during the period of 1983-86. IEA, in conjunction with the City of Pliami, will convene meetings with the Dade County Public School system to discuss and finalize arrangements to provide information, lecturers, and consultation to senior high school students to orient them about potential career opportunities in the insurance industry. IEA will provide the lecturers to the school system. Also, IEA will arrange meetings with the Miami -Dade Community College and four-year and graduate level univeroities to develop and institution- alize undergraduate and graduate level courses in approved university curriculum. All. arranooments and curricula should -4- 83-321 C C he formalized by September 30, 1983 and IEA shall be respon- sible For assuring that the ;e activities occur.. The IIlA. will provide an annual report on these activities and accorm, plishments to the City of Miami on tecember 31, 1983. There- after, annual reports on these acLivi.ties will. be provided to the City thirty (30) days after the end of the City's fiscal year. (10) IEA will conduct or sponsor annual seminars and conferences on the insurance industry designed to bring insurance and reinsurance buyers to the CITY and to provide continuing educational programs for the industry personnel. IEA c•7ill assist in promoting and participating in trace fairs and will sponsor an International Insurance and Reinsurance Con- gress in Miami in 1984. C. MCDI and the CITY further agree to the following: (1) Within five (5) calendar days from the receipt by 11CDI of the interest payment, MCDI shall deliver to the CITY all of the interest payment actually received less one percent (lc) of the loan rate to be retained by ?MCDI for administrative expenses. Therefore, using the aforementioned example, MCDI would remit to the CITY a sume of $11,250 (10% - 10 _ 90/9% X $500,000 = $45,000/$45,000 _ 4 = $11,250) and retain $1,250 for administrative expenses for the quarter ending December 31, 1983. (2) Within five (5) calendar days from the receint by MCDI of any loan payment by IEA, MCDI shall deliver to the CITY the net amount of the loan payment as described in Paragraph 1. 1B (G) hereof. (3) Any payment of interest or principal which becomes due on a CITY holiday, Saturday or Sunday, shall be payable on the following business day. (4) The CITY's Finance Department shall monitor the receipt of all funds due the CI`1'Y from MCDI and shall i.mmodiately notify -5- �3-321 6 t the Director of. the CTTY's 1)cpart-ment of Economic Develon- ment should the pa, ment be Mite or the ilmount of payment be incorrect. 2.1 Term ARTTCLE II This Agreement shall commence on April 11, 1983 and shall terminate January 10, 1992. 2.2 City Authorization For the purpose of this Agreement, the CITY's Department of Econo- mic Development will act on behalf of the CITY in the fiscal, programmatic monitoring and control of this Agreement and will — serve as the CITY's liaison to IEA. 2.3 Non-Delegability It is understood and agreed that the obligations undertaken by the parties hereto pursuant to this Agreement shall not be delegated to any other person or firm unless the other party shall first consent in writing to the performance of such services or any part thereof by another person or firm. 2.4 Construction of Agreement The parties hereto agree that this Agreement shall be construed and enforced according to the laws, statutes and case laws of the State of Florida. 2.5 Successors and Assigns This Agreement shall be binding upon the parties herein, their heirs, executors, legal representatives, successors, and assigns. ARTICLE III 3.1 Review Rights MCDI shall maintain accurate accounting records covering its loans to IEA. The CITY shall have the right to review said records on - G- 83-321 61 a quarterly basis commencing April 11, 1983 and on reasonable notice to MCDI. Said right shall exist during the period of this Agreement and for a period of three (3) years followinq the date upon which final rOT)ayment of its loan is made by IEA to MCDI. 3.2 Indemnification MCDI shall defend, indemnify and save the CITY harmless from and against any and all claims, liabilities, losses, and causes of action which may arise out of MCDI's activities under this Agree- ment, including all other acts or omissions to act on the part of MCDT or any of them, including any person acting for or on its behalf, from and against any orders, judgments or decrees which may be entered thereon, and from and against all costs, attorney's fees, expenses and liabilities incurred in the defense of any such claim or investigation thereof. 3.3 Non -Discrimination MCDI agrees that there shall be no discrimination as to race, sex, color, creed, national origin or physical handicap in connection with any operatons of this Agreement. 3.4 Amendments The CITY may at its discretion, amend this Agreement to conform with changes in applicable City, County, State and Federal laws, directives, guidelines and objectives. Notwithstanding the fore- going, however, no amendments to this Agreement shall be binding on either party unless in writing and signed by both parties. Such amendments shall be incorporated as a part of this Agreement upon review, approval and execution by the parties hereto. ARTICLE TV 4.1 Termination Clause The CITY, by giving written notice specifying the effective date, may terminate this Agreement .in whole or in }part for cause which ^ �1 83~-321 k 4 Shrill include: (1) Failute, For any reason, of MIU)T to Fulfill in a timely and proper mannr�r its obligations und,3r this Aare(. ment or with directives as may become generally applicable- at any time, (2) Submission by NCDT to the CITY, of reports that are incorrect or incomplete. in any material respect; and (3) Ineffective or improper use of funds provided under_ this Agree- ment. Further, it is mutually agreed that MCDI shrill irm-nediately, upon demand by the CITY cease and terminate any and all. activities including but not limited to divesting itself and any subsidiary(s) of specific assets and or projects and that upon demand of the CITY any and all accumulations thereon, shall be delivered to the CITY and become the sole property of the CITY. ARTICLE V 5.1 Signatories The legal representative(s) of this Agreement for MCDI shall be the President and Vice President of the Board of Directors or any other person the Board designates by resolution or affidavit. Said resolution or affidavit will be attached and made a part of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names by their duly authorized officers and the corporate seals to be affixed hereto, all as of the day and year first above written. WITNESS our hands and seals on this day of 1983. ATTEST: RALPH G. ONGIE, City Clerk ATTEST: Secretary AC'I'PrJVE,D 1":13' TO F•'OPM AM) CITY OF MIAMI, a municipal corpora- tion of. the State of Florida HOWARD V . GARY , City Manager MIAMI CAPITAL DEVELOPMENT, INC, a Florida corporation not -for -profit By: 1 JOSE R. G IyRCIA- PEDROSA, City Attorney" President 83--321 11 EMPLOYMENT The international insurance and reinsurance world is by definition free of ethnical, racial and birth or background status inhibitions. This has to be the case because clients come from every possible source and background. Its work force plays an immense part in meeting the need for all people in the industry to get on with each other and to pool their common contacts, influences and skills. The employment possibilities and opportunities this in consequence encourages and creates need careful understanding. The Exchange work force of the future will be made up of the following elements and these are already being recruited by the appropriate sectors acting independently. They will use search and advertising facilities: • Brokers and staff • Underwriters and staff o Exchange staff • Supporting administrative Agencies • Professional support (e.g., accountants, attorneys, banks, etc.) Each sector has its own special needs and these are identified in Table 1 at the end of this part of the memorandum•. In summary, based on current Exchange Membership levels the employment figures shown in Table 2 are the likely trend. The future creation of new employment in Miami is not confined to the white collar areas. Already work has been created for the construction, office equipment, utilities and transport employers. For example, in the Exchange Building alone some 30 to 40 new offices have been created and equipped. Similar things have happened elsewhere and this will grow as maintenance takes over from set up activities. It will be a continuing process. During the promotion of the Exchange, care is taken to encourage widespread investor, broker and professional support from all sources. This is essential if the circumstances described in the opening paragraph of this memorandum are to be attained and it is the collective needs this produces that necessitate both white and blue collar employment. A 83-321 I Go BrokerAgencies Broker Underwriters r n 0 de r r wr* ters Exchange Staff Administrative Professional* Support Table 1. Exchange members: Table of Forms of Employment Trained clerical (Incl. Business Data Book- Youth Intake Blue Collar Insurance Typing) sing keepers Production Processing Executives X X X X X X X X X X X X X X X X X X X X X . conveAdjrsant with insurance and -------Th—,s —9r--P will also need new trained attorneys, etc Loss usters in particular. claims work: it comprises Attorneys, AccountnBanks and W� F GD F� Table 2. Employment Projections (A) (B Type of Member Current No. of Firms Existing Staff Nos. Involved Future Projections For Yr. 1983 ��-- 1984 Brokers 52 150 300 from 75 Members 350 from1C Members Underwriters 28 40 75 from 45 Members 100 from 6C Members Admin. 14 8 40 from 25 Members 80 from 3( Members Ex. Staff 1 10 20 30 Professional 43 Not possible to calculate Not possible to calculate 435 Not possik to calculi 560 207 NOTE: 1. Of these Columns: (A) would at present represent 1/3 new jobs ; and (B) 1/2 new jobs; and (C) 75% onwards 2. 3. THESE FIGURES WILL ESCALATE ONCE INTENSIFIED UNDERWRITI CONSERVATIVE.. IF MAJOR SUPPORT OCCURS THEY WILL BE HIG On the assumption (which seems safe to make) that the E over 5 years the foregoing figures will need reassessme The professional persons involved will no doubt be draw first. nowever, we expect involved. Manynofl00 theserms willfneedoextratnewAemployees assvolumesOfrs to and Banks to be work grows. ram. CITY o;- MIA, ;7.-C RID INTER -OFFICE MEMORANDUM Howard V. Gary City Manager Charlotte Gallogly Director L- ` Department of Economic Development March 25, 1983 Resolution To Approve The Contract Between The City And Miami Capital 'Development, Inc. To Provide $500,000 To The Insurance Exchange Of The Americas, Inc. "It is recommended that the City Com- mission approve the attached resolution authorizing the City Manager to enter into a contract with Miami Capital Development, Inc. in an amount not to exceed $500,000 from Capital Improvement funds to facilitate an insurance business development program in conjunction with the Insurance Exchange of the Americas, Inc." On December 9, 1982, the City Commission adopted Ordinance No. 9534 and appropriated a sum of $500,000 from Capital Improvement funds to the Insurance Exchange of the Americas, Inc. in order to help defray the costs of establishing the Insurance Exchange of the Americas, Inc. office within the City of Miami. Since the City cannot provide business loans to for -profit insti- tutions, Miami Capital Development, Inc. (MCDI) is being used as the intermediary to provide these funds to the Insurance Exchange of the Americas, Inc. In turn, MCDI will execute a contract with the Insurance Exchange. The basic provisions contained in the proposed contract state that the $500,000 will be provided by MCDI to the Insurance Ex- change as a ten-year term loan with interest charges pegged to the prime interest rate. Interest and principal payments will be made by the Insurance Exchange to MCDI on a quarterly basis. MCDI will deliver to the City all of the interest payment less one percent (1%) of the loan rate which will be retained by MCDI for administering the loan. The benefits of the City entering into this agreement include the provision of assistance to the Insurance Exchange to offset its first year operational costs to ensure immediate success, the development by the Insurance Exchange of a three-tier educa- tional program with local educational institutions to assure that 83-321 41 Page 2 there is a skilled labor pool available to support the growth of the insurance industry in Pliami, the creation of approximately 1,800 jobs during the period of 1983-86, the sponsorship by the Insurance Exchange of annual seminars and conferences on the in- surance industry designed to bring insurance and reinsurance buyers to the City and to provide continuing educational programs to industry personnel, and the sponsorship by the Insurance Exchange of an International Insurance and Reinsurance Congress in Miami in 1984. CG/j u Attachments 83--321.