HomeMy WebLinkAboutM-79-0092s
FL.C+f?ICA
Joseph R. Grassie
City Manager
Richard L. Fosmoen
Assistant City Manager
;, FEB 13 1079
BILE
Marina Operations and Expansion
' r I.. CNCF9.
RECOMMENDATIONS
1. Immediately seek consultant services to prepare preliminary design plans and
obtain permits for the expansion and renovation of Dinner Key 2. Elevate the
Division of Marinas to full department status and recruit a qualified director
3. Adopt at the earliest possible date the marina plan as City policy for marina
expansion 4. Undertake expansion of Dinner Key, including the annex, using City
issued revenue bonds 5. Establish a waterfront improvement fund to be capitalized
from each marina 6. Approve the management contract for Miamarina for a maximum
of four years 7. Consider the management concept for Dinner Key after reconstruction
and expansion has been completed.
Background
At the last City Commission Meeting, January 18, 1979, the City Commission called
for further consideration of the Waterfront Trust concept at the Committee of the
Whole on February 22, 1979. They further continued the public hearings on the
management agreements for Dinner Key and Miamarina to 7:00 pm that same day. The
reasons for calling for further discussion of the Trust were twofold: 1) proponents
of the Trust were making their case during the hearing on the management, and
2) the Commission requested Trust proponents to restructure their previous proposal
for possible reconsideration.
Subsequent to the Commission Meeting, the attached letter has been circulated
suggesting yet another alternative to the Trust which would involve appointment
of a "blue ribbon" committee to manage Dinner Key Marina and the expansion of
facilities (Attachment A).
While there was not a specific directive from the Commission to further evaluate
the alternatives for expansion and management of Dinner Key, I believe it is
necessary for the staff to attempt to clarify some of the issues that have
surfaced during the past two years concerning expansion and management of Dinner
Key Marina.
It was, in fact, early in 1977 when the initial directive surfaced from the
Commission to prepare a "request for proposal" for the lease of Dinner Key.
Late in 1977, specifications were reviewed by the Commission. The availability
of Dinner Key and Miamarina for private operation was advertised nationally early
in 1978 and proposals were received in the spring of 1978. The Manager then
appointed a committee to assist in the analysis of the proposals. At about the
same time, the concept of a Waterfront Authority/Trust was put forth for
Page 1 of 5
, wc., ;. lam,,.
79-92
Joseph R. Grassie
City Manager
0
consideration. Considerable public debate ensued, and the Commission in July 1978,
upon recommendation of the City Manager, directed the staff to negotiate a
"short-term" management agreement with Biscayne Recreation. The Commission also
requested further analysis of the Trust concept, and this was prepared and
considered in September 1978. There have, of course, been efforts by some members
of the public to exacerbate the decision process by indulging in innuendo and
suggestion of wrongdoing by members of the administration and others (see attached
response to E.P. Iaconis' statements of 1-18-79). In my view, there are a series
of alternatives that have been presented and which require additional clarification
and comment.
Alternatives
1. Do nothing - The Commission always has the choice of maintaining the status quo
for marina operations. 0f course, expenditures would be required to maintain the
facility and emphasis should be placed on improving the day to day operation of
both Miamarina and Dinner Key Marina. This alternative would foreclose the needed
expansion of Dinner Key and forestall major repairs that are necessary until some
future date. Rates, of course, could be kept to a minimum and the current disparity
between Dinner Key rates and others would increase. Further, the rates charged for
liveaboards, i.e., approximately $120 per month for a 40 foot boat, for all services,
taxes, electricity, water and City services would, in all likelihood, be maintained.
2. Lease of Dinner Key - The original request for proposals for private development
and management of Dinner Key were issued on the basis of a potential 30 year lease.
It was anticipated that private financing would be used to expand and reconstruct
the facilities at Dinner Key, and that a reasonable period of time was necessary
for the private sector to amortize the cost of their investment. While considerable
time and effort was expended in analyzing proposals submitted for Dinner Key and
Miamarina, it was finally concluded that a 30 year agreement with a private firm
was not appropriate for Dinner Key or Miamarina.
A number of interesting proposals surfaced for Dinner Key expansion, and the
Commission, based on the attached recommendation from the City Manager (Attachment B),
directed the administration to negotiate a short-term management agreement for
expansion and operations of Dinner Key using City issued revenue bonds. It is my
understanding from the City Commission action that a long-term lease with private
financing is no longer considered a reasonable alternative for Dinner Key.
3. Management Agreement - Based on City Commission action of 7-28-78, the adminis-
tration has negotiated with Biscayne Recreation for management agreement. The
Commission is aware of the contents of the agreement, which has been the subject
of one public hearing.
One of the difficulties of the management agreement concept is that with the
anticipated use of City issued revenue bonds, under the State Industrial Revenue
Bond Act, the City must, and should, retain control of operating expenses and
rates. Further, the contract has been subordinated to a future revenue bond
ordinance, and this, in all likelihood, will be a major subject of debate once
the bond ordinance is prepared.
The concept of a management agreement for the day to day operation of Dinner Key
and Miamarina is viable. The difficulty is that since Dinner Key is going to be
reconstructed, the management agreement becomes mixed with the construction period,
causing a longer term to be considered.
Page 2 of 5
a!a+e. "wimp.,ors
Joseph R. Grassie
City Manager
4. Waterfront Trust - In spite of the suggestion that the Trust has not received
a fair analysis, there are still two basic problems with the Trust concept.
First, there is a political question of retaining control, not only of Dinner Key
but also all potential marina developments within the City. The same problem
that applies to the management agreement with reference to revenue bonding applies
to the Trust concept as proposed. There are a set of legal issues that revolve
around the Trust, including the ability of the Trust to hire and fire personnel,
enter into contracts, method of appointment and tenure of Trust. State law would
be necessary to give the Trust the level of authority requested.
Second, while it is understood that the Trust would not receive a management fee
for their services, there is no assurance that a Trust would provide efficient
management.
Analysis
One of the major problems in attempting to determine a development and management
course for marinas in the City is that the issues have focused on Dinner Key and
Miamarina, and not on an overall strategy. The decision to seek private development
proposals was made prior to the City fully analyzing the alternatives for marina
development City wide and at Dinner Key. We have recently completed and will
present on March 8, 1979 a marina development plan for the City that encompasses
all City owned waterfront. This plan, if fully implemented, would add hundreds of
slips within the City in addition to improved storage and launching facilities and
ancillary services as needed. The Commission and the community all have indicated
a desire to expand and improve Dinner Key. If the marina expansion plan is accepted
by the Commission, then the emphasis on marina facilities City wide would be increased.
In all likelihood, the function would require a full department status and a different
set of skills that the current housekeeping functions call for. In my opinion, the
marina function has not received the level of attention it deserves. The point
should be made that the marine oriented sector of our economy is important, and
certainly a major part of our overall economic development strategy.
If the policy that Dinner Key should be expanded is accepted, then three methods
of financing appear possible: 1) private financing; 2) revenue bonds; 3) expansion
from current revenues. The alternative of private financing has been previously
rejected because of the attendant extraordinary lease time required.
We have previously demonstrated to the Commission that a $4.5 Million revenue bond
issue is feasible with moderate rate increases, and including management fees.
Also, the revenue bond approach would guarantee the City a fair return to the
general fund and spinoff a depreciation fund that would be available for additional
work designed to improve and extend the life of the facility. In fact, a reasonable
case could be made that a portion of the rate at Dinner Key and Miamarina be used
to establish a marina improvement fund that would insure additional waterfront
improvements such as launching ramps, beaches, fishing piers, etc. This suggestion
is based on the premise that, while a slip is rented, it is not available to the
general public, and the occupant of the slip has an obligation to provide access to
Page 3 of 5
Jospeh R. Grassie
City Manager 0
a
the water for those members of the public who are not occupying that slip.
Attachment C indicates potential cash flow from Dinner Key, assuming a full
department status with all other assumptions remaining constant.
To reconstruct and expand Dinner Key from cash flow as opposed to bonds and
using the same revenues and expenditures as Attachment C and assuming a 13t per
foot per day rate, it would take nearly six years to replace the existing number
of slips. This is based on a projected cost of $50,000 per slip and net revenue
available after expenses of approximately $300,000.
Several arguments have been made as to why the private sector should be used in
the development of Dinner Key. First, it is suggested that private management
expertise is required to efficiently operate our marinas. The alternate is to
escalate the marina operation to a full department status and obtain a fully
qualified marina manager, perhaps even from the private sector. Second, it has
been suggested that the private sector can achieve the desired result of marina
expansion in the shortest time. The City has one of the largest engineering
operations in South Florida, and is responsible for literally millions of dollars
of construction annually. The reconstruction and expansion of Dinner Key, assuming
assistance from a design engineering firm, could easily be handled by the City's
Department of Public Works.
Recommendation
Based on the foregoing review of the efforts to expand Dinner Key, the apparent
difficulties in the creation of a marina trust, and the premature negotiations
for a management agreement, it is my recommendation that the City proceed on the
following course:
1. Hire an engineering firm to prepare an expansion plan for Dinner Key (funds
to be used from the Dinner Key reserve to pay for the expansion plan).
2. Escalate the marina function to a full department status and recruit a
qualified department director.
3. Adopt the marina plan as the City policy for marina expansion and direct
the Department of Marinas to implement the plan.
4. Undertake expansion of Dinner Key with revenue bonds using City, DPW for
construction management.
5. Establish a waterfront improvement fund to be capitalized from each marina
for other marine oriented improvements.
6. Let the contract for Miamarina to New World Marinas for two years plus a two
year renewal option.
7. After expansion of Dinner Key, consider again the management concept on a
short-term basis based on the experience of Miamarina.
Page 4 of 5
79-92
IuuI III IUII...Alwl.
Joseph R. Grassie
City Manager
•
It has been nearly two years since the idea of private management of Dinner Key
was first discussed. During that time, plans could have been prepared and
revenue bonds issued, and reconstruction of Dinner Key could be well underway.
It is not that the City is incapable of achieving the Commission's desired ends.
It is that during this two year period, our efforts have been directed at a
private management and expansion concept which will be extremely difficult at
best to achieve, given the desired use of revenue bonds for expansion of Dinner Key.
Page 5 of 5
January 22, 1979
To the City Manager, City of Miami, and its Commissioners;
The Undersigned offer to the City their services on a Board of Directors
to serve as a Citizens Committe without cost to the City. Their function
shall be to oversee the development of the City's Waterfront and Marina
properties according to the wishes of the City Commission and its Master
Plan(s). They will negotiate contracts as astute private businessmen for
ratification by the City Commission, and see to their proper execution.
They will serve the City in this capacity for the fee of $1.00 each per
year. This they will do if the City Commission agrees not to enlarge the
Committee or appoint additional members unless approved by a majority of
the Committee. They shall serve for no fixed term, and the Committee may
be disolved by the Commission or by their own termination.
The Committee will address itself to theirnv?diate implementation of:
Design and construct adequate and convenient laundry facilities
Sale of fuel, food and ice and bait in an attractive facility.
Provision of marine related services without, if possible, competing
with private businesses established in the immediate area so as
not to discourage or undermine private enterprise.
Improve secutity if needed through the installation of electronic
surveillance equipment and trained personel.
Improve and modernize the shower and restroom facilities to meet
the needs of the boater.
Install a numbering system for the waiting list to ensure fairness
and accuracy in the application of slips as they come available.
Design and construct a dockmaster facility in a location where
the movements and control of the facility can be better super-
vised with a view of the whole facility.
It is the belief of the Committee that this can be done with revenues only
and that the physical facilities can be expanded and improved from the
increased monies received from proposed ancillary services outlined above
or others that may be provided.Improved fiscal controls will be implemented.
WE, as concerned private citzens, believe that our service to the City of
Miami in this capacity is a privilege,
Stephen Carner, 3399 Poinciana Ave. Miami. Property Manager, builder, banker.
Gus Harrison, Jr. Coconut Grove Bank, Banker, securities manager.
Lester Pancoast, 3379 Mary Street, Miami, Architect, planner, designer
Robert Calvin Bishop, 3370 Poinciana Ave., Businessman, executive, manager.
An attorney knowledgeable in civil law and corporate contracts to be
selected by the Committee,J1f impecable reputation and who will serve
for the same fee and conditions as the other members.
If this concept has any merit on behalf of the proposed group I would be
pleased to discuss it further and in greater depth with you.
Stephen Carner
•
fY OF MIAMI. FLORIDA
. INTER -OFFICE MEMORANDUM
r
Mayor and Members of
this City Commission
1%
Joseph R. Grassie
City Manager r
DAT(:
July 25, 1978
FILE:
SUBJECT: Marina Lease Recommendation
REFERENCES:
ENCLOSURES:
After considerable evaluation of the proposals that were presented
to the City for the management of Miamarina and the development and
management of Dinner Key, and after a thorough evaluation of the
separate alternative of creating a marina trust to be responsible
for all marina development and operation within the City, the re-
commendation of the City Manager is as follows:
1. That the City immediately proceed to negotiate short-term
management contract with Biscayne Recreation for the operation
of Miamarina.
2. That the City begin negotiations with Dinner Key Marina, Inc.
on a construction management contract for Dinner Key not to ex-
ceed 4 years, and an additional short-term operating management
contract for the entire facility.
3. That the City, proceed to raise the capital required to improve
Dinner Key and Miamarina through the issuance of revenue bonds
guaranteed by the improved facilities.
4. That the City work with the successful management firm of Dinner
Key j-n the preparation of necessary plans to obtain permits for
the expansion of Dinner Key Marina in accordance with.accepted
marina design standards.
5. That the City begin negotiations with Coconut Grove Sailing Club
for its expansion and relocation.
6. That the City work with the successful management firm of Dinner
Key and with the Coconut Grove Sailing Club to expand boat mooring
facilities in the Dinner Key area immediately.
7. That the City Manager be authorized to appoint an advisory committee
to assist the City in the development of a marina master plan for
the City.
The acceptance of these recommendations would constitute a policy
choice on the part of the City in favor of private contract management
of its marina facilities in contrast to further pursuing proposals in-
volving the creation of a Marina Facilities Trust. This policy choice
is recommended to the City Commission.
0
CiTY DF MIAMt, PIN'1ER KEY RECONSTRUCTION PR0CRAM
ASSUMPTIONS
Liveaooards
Non-liveaboards
Sailboats
Cormercial Boats
Transient Boats
Moorings
Other
REVENUE C'1 CASH
FLU.: BASIS
llveaooaros
Non-Liveaboards
Sailboats
Comerciai Boats
Transient Boats
Moorings
Other (Gas fee,
Space rental. etc.)
Total Cock Revenue
1NVESr'E'1T 1NC'!
Reserve tuna
Renewal & Replacement
Special Reserve on Hand
Total Interest
TOTAL GROSS REVENUES
DIS3C7,S'1TS
1 F1 Expense plus ordi-
nary Expense(1)
Net Revenues
Debt Service not other-
wise provided (2)
Net Income available for
Other contractual pay'ts.
Beg.
CON7RACTu-i PAr'F'.TS
TO CiTY
SDI of Lebt Service
1/15 of Bond Issue for extra-
ordinary repair & replacement.
(ordinary FL; is included in
annual operating budget) (3)
Total to City
TO MN-'FR
ITT-FP-0 :eented Dockage
1/105 PFPD Fentals exc. 12e
10: Mooring Fental
Total to Manager
SURPLUS FUNDS
(50: ea. City & Manager)
FUND BALANCES. ENO OF PERIOD
construction i rru a�.1)
Debt Service Reserve
R & R Reserve (&pre.)
Interest Account
Special R 1 R
* Available for other
Improvements &
Departmental Costs
1/1/79 thru 6/3n/so 7/1/r0 thru (00/31
10365' x 11G PFPD
4200' x 61 PFPD
20 x 121 per mo.
15 x 560 per nro.
550.000 per year
1/1/63 0 $40 per mo.
(11565' x 13t PFPD)
20 x S15 per mo.
15 x $100 per mo.
172.000 per year
100 x 540 per mo.
$615.681 (5681,642)
136.080 (
11,160 18,000
16,200 18,000
75,000 72.000
24,000 48,000
N.A. N.A.
$878,121 $837.642
$ 15,300 $ 30,600
6,750 13,500
22,250 15.000
1 44,300 $ 59,100
1922,421 1896,742
$670,712 1514.432
251.709 382,310
-0- -0-
251,709 3E2,310
$ 85.312 $170,625
-0- -0-
•
$ 85,312 5170,625
$ ut,e r l 5-52; 434-
---it:
i--2-400
-L- .i1051 •$ £2.471
5 05, 346--1468-
(1 42,Ot0) (3 74.6A:)
$3,501,000
408.000
-0-
341,250
200,000
$ 166,397 $ 211,685
7/1/81 thru 6/10/82
(21701' x 130
)
20 x S80 per mo.
15 x S120 per mo.
$110,000 per year
200 x 550 per mo.
($1,015.607)
19,200
21.600
110,000
120,000
N.A.
$1,236,407
5 30,600
13.500
15,C00
$ 59.100
$1,345.507
$ 572,770
772.737
235,625
537,112
$ 203.125
50.000
$ 253.125
$ 78.124
7,a1'
121'a0-
$ 283,687
ATTACHMENT C
7/1/22 thru 6/10/R3
(21701' x 140
)
20 x SRO per mo.
15 x 5120 per mo.
1110.000 per year
200 x $50 per mo.
($1,093,730
19,200
21,600
110,000
120,000
N.A.
51,354,530
$ 30,603
13,500
15.000
$ 59,100
$1,423,530
S 604,272
819,358
406,375
411,983
$ 203.187
100,000
'S 303,187
$ 78,124
�5%-'4
1' ^ln
$ 108,796
7/1/83 thru 6/30/R4
(21701 x 15t)
(20 x 180 per mo.
15 x 5120 per mo.
$110,C30 per year
200 x $50 per mo.
(51.171,854)
(( 19,200
21,600
110,000
120,000
N.A.
$1,442,654
S 30,60G
13,500
15,000
$ 59.100
51.501,754
$ 637,507
864,247
406.125
459,122
$ 203.062
100.000
S 303,062
$ 155,060
• 79-92
OF
CERTIFIED CORPORATE SERVICES, INC.
MBMNINMIuisKMN®INItNlIllMNi1BN11M 3399 POINCIANA AVE.
COCONUT GROVE, FLORIDA 33133
1-3050442-0404
February 9, 1979
Mr. Joseph Grassie, City Manager
City of Miami City Hall
Pan American Drive
Miami, Florida 33133
Re: Dinner Key
Dear Mr. Grassie;
•
Following up on our conversation of the fifth, I have
investigated some of the areas that we discussed and
feel that the following are the basic items to make up
our implementation of the City's needs.
We do not feel that the present City employees that
make up the operating staff would be maintained. The
problems in retraining and overcoming the present inertia
outweigh any desire to avoid displacing the staff. We
would bring in our owo operational and security people.
Bookkeeping would be under C.P.A. audit controls, and
our books would be open to City auditors.
The City Commission would have the oportunity to ratify
any contract in excess of $25,000..
We will let the City know within thirty days if, and
under what terms we would take over Miamarina and other
facilities, both existing •and planned.
We need to know if the City's present insurance, both
casualty and liability, will remain on the facilities?
Will the property remain covered by police ticketing?
Will we have the right to file collection suits in the
name of the City?
Construction will begin at once on laundry, shower and
toilet facilities, the establishing of rules to keep
the marina clean and attractive, vacate undesirable
tenants and upgrade the fee schedule and bring equity
to the waiting list. An imediate study of all the
previous design work, combined with the most contemporary
marina planning, will begin at once to expand the total
marina to its maximum income potential.
Responsible Representation for the Foreign or Domestic Real Estate Investor
February 9, 1979
Mr. Joseph Grassie, ctd.
This program will be implemented under the umbrella
of a non-profit corporation, Consolidated Marine
Development Corporation, The directors of the corporation
will be those named in our first letter, serving
without compensation for their directors duties.
Our role will be one of management, supervision and
as landlord. There will be no burden to the City of
Miami taxpayers, and equity for the tenants of the
Marinas of the City. Rumors of favoritism and graft
will be laid to rest, and the City will have the
benefit of proven business men to set the direction
and follow through to achieve the goals of the citizens
of Miami and its Commissioners. A simple management
contract with our corporation will avoid the threatened
litigation, accusations of sell -out, and other undes-
irable publicity that has followed these negotiations
fo the past year. W»lhin a reasonable timetable the
Marina will have operating ancillary facilities run
by capable operators with leases that specify the
income to the corporation or the eviction of the
tenant, with adequate security deposits and other
safeguards.
Our not removing slips from the rent roll as called
for in the lease presently before the Commission will
result in $35,000. a year in income maintained. All
profits from vending machines, sub -leasing of space
while tenants are cruising, repairing shops, shops for food
and botiques, recreation room income, fees from
charterers; the list is as long as a business mans
imagination. We anticipate income for the Dinner Key
Marina and surrounding lands included in the proposed
lease to reach no less than $250,000. at the end of
the first year of operation. That is why we believe that
the construction work can be fully funded through income.
If bonding should prove an appropriate course of action
sometime in the future it should be implemented when the
market is right and income is up, again funding will be
from income to initiate that action, the bond broker
works for their fees.
iI■ n
•
February 9, 1979
•
Mr. Joseph Grassie, ctd. #3 =
Mr. Grassie, the time is right in this community to
take advantage of any offer that has substance and can
save the taxpayers money. Using the private sector in
the manner we suggest not only will be beneficial in
this case, but could provide the impetous for others
to serve their community and give back to it some of
the good that they have received. With the backing
and support of your office and the City Commissioners,
we can set an example that could ignite the imagination
of the whole City.. Think of it, hundreds of thousands
of dollars in time donated for the Citys good. A rebirth
of civic enthusiasm and pride through personal partici-
pation. Can the City afford to pass this opportunity up
by entering into a contract that asks the City to give
up millions of dollars worth of land and improvements
and pay for the privilege? Will the contracts on the
other waterfront facilities be equally onerous when
acceptable alternatives exist? We believe that you
have the best interests of the City as your motivation,
and are confident that you will recommend our proposal.
Very truly yours,
tv<z_ t �Lc
e he Carner for
Consolidated
p
Marine Development Corporation (proposed)
SC:ac
cc: City Commissioners
C.M.D.C. Directors
Asst. City Manager
J. Reid, City Planning
Note: The name of Lester Pancoast will be deleted from
the Directors list. If our plan is accepted, we
will fill the remaining two vacancies with an
attorney and architect of equal repute.
January 22, 1979
To the City Manager, City of Miami, and its Commissioners;
The Undersigned offer to the City their services on a Board of Directors
to serve as a Citizens Cornmitte without cost to the City. Their function
shall be to oversee the development of the City's Waterfront and Marina
properties according to the wishes of the City Commission and its Master
Plan(s). They will negotiate contracts as astute private businessmen for
ratification by the City Commission, and see to their proper execution.
They will serve the City in this capacity for the fee of $1.00 each per
year. This they will do if the City Commission agrees not to enlarge the
Committee or appoint additional members unless approved by a majority of
the Committee. They shall serve for no fixed term, and the Committee may
be disolved by the Commission or by their own termination.
The Committee will address itself to the iini,ied iate implementation of:
Design and construct adequate and convenient laundry facilities
Sale of fuel, food and ice and bait in an attractive facility.
Provision of marine related services without, if possible, competing
with private businesses established in the imrmediate area so as
not to discourage or undermine private enterprise.
Improve secutity if needed through the installation of electronic
surveillance equipment and trained personel.
Improve and modernize the shower and restroom facilities to meet
the needs of the boater.
Install a numbereing system for the waiting list to ensure fairness
and accuracy in the application of slips as they come available.
Design and construct a dockmaster facility in a location where
the movements and control of the facility can be better super-
vised with a view of the whole facility.
It is the belief of the Committee that this can be done with revenues only
and that the physical facilities can be expanded and improved from the
increased monies received from proposed ancillary services outlined above
or others that may be provided.Improved fiscal controls will be implemented.
WE, as concerned private citzens, believe that our service to the City of
Miami in this capacity is a privilege,
Stephen Carner, 3399 Poinciana Ave. Miami. Property Manager, builder, banker.
Gus Harrison, Jr. Coconut Grove Bank, Banker, securities manager.
Lester Pancoast, 3379 Mary Street, Miami, Architect, planner, designer
Robert Calvin Bishop, 3370 Poinciana Ave., Businessman, executive, manager.
An attorney knowledgeable in civil law and corporate contracts to be
selected by the Committee,lf impecable reputation and who will serve
for the same fee and conditions as the other members.
If this concept has any merit on behalf of the proposed group I would be
pleased to discuss it further and in greater depth with you.
Stephen Carner
7
Olt
CITY OF MIAMI, FLORIDA
INTEROFFICE MEMORANDUM
TO:
Joseph R. Grassie
City Manager
FROM: Richard L. Fosmoen
Assistant City Manager
DATE FEi 13 1979
SUBJECT
RECERENCES
FILE
Response to E.P. Iaconis' Comments
at January 18, 1979 City Commission
Meeting
ENCLOSURES
At the City Commission Meeting of 1-18-79, the City Commission requested that
a written response be prepared to Mr. E.P. Iaconis' allegations of administrative
misrepresentation as he presented in verbal form at that meeting. I have reviewed
the transcript of that meeting, and the following is my response to those items
which are somewhat specific.
Comment - "The proposal review group that was put together was loaded with two
gentlemen from the Marine Council who were very very positive about
one particular proposer, and as you remember in previous discussions,
the poor marina tenants representative was supposed to be buried."
Response - Obviously, since the other two members did not agree with Mr. Iaconis'
view, they are therefore, suspect, and Mr. Iaconis has concluded that the group
was loaded.
Comment - "The Spencer Meredith memo, which you all received a copy of, and I have
right here, was presented to you by the City Administration, yet one of
the pages indicates that this summary of the Miami Marina Waterfront
Trust was prepared by City staff following meetings with Messrs. Iaconis
and Dixon, who presented their concepts. This was not presented, this
was not prepared by Mr. Spencer Meredith. You were misled by the City
Administration, and this is what you were handed, and I have a copy of
that particular memo."
Response - This is a total misrepresentation of the facts. The information that
was distributed was identified as being received from Dinner Key Marina, Inc.
The cover memorandum, dated July 25, 1978, listed three items which had been
provided to the City and raised issues relative to the Waterfront Trust concept.
Mr. Iaconis' allegation was taken totally out of context from material distributed
to the City Commission under cover dated July 25, 1978.
Comment - "However, it was also stated that there was to be a public hearing in
December, and your December meeting, I believe, was December 12 or 14 --
there was no public hearing. We brought that to your attention. When
we discussed that with the City Administration, they feigned total
ignorance. They were not aware that it was in the motion, and if you
recall, it was I who brought it to the City Commission's attention on
the floor of the Chambers -- no one remembered it."
p79-9'
Jospeh R. Grassie �l
City Manager
Response - At the December 14 Meeting, the City Commission was brought up to
date on the status of the proposed contract with Biscayne Recreation Development
Corporation, and it was pointed out that a public hearing was called for in the
Commission's motion of July 28, 1978.
Comment - "Mr. Grassie, in his inimitable wisdom, created two userss groups,
Tom Dixon, Iaconis out in limbo, a second user's group made up of the
marina representatives, then proceeded to do their work."
Response - Attached are copies of letters sent to the two groups outlining the
responsibilities that the Manager was requesting. Also attached are a list of
the members that were asked to serve on those two groups. Subsequently, the two
groups were merged at the suggestion of Mr. Roth, since there was overlapping of
the two groups.
Comment - "Mr. Fosmoen and Mr. Walker attended a December meeting of the Marina
Operation Review Committee. At that meeting, one of their more
members unfortunately had the audacity to ask them how far along they
were in the construction of the contract, and how much longer it would
be before we would be able to see that contract. Mr. Fosmoen indicated
that it was a long, long time."
Response - At the December meeting, a draft contract with Biscayne Recreation was
presented. I did not say that we were a long way apart. In fact, a draft contract
was being reviewed with the Committee at that meeting. Mr. Roth has indicated to
me that I did not make that statement, and that the minutes of the Committee
reflect that I did not make that statement.
Comment - "What you are now aware of is that there were two reports -- there was
a report of September 11, which I just mentioned to you, which is in
your files, and there is a second report of September 6 signed by
Mr. Condon. There is no preliminary stamp, there is no draft stamp, there
is no 'for internal use only' stamp."
Response - Attached are copies of the September 11 and September 6 reports signed
by Mr. Condon. It is not unusual for staff to review reports intended for the
City Commission, nor is it unusual for staff to ask for more indepth analysis
when certain facts are apparently and obviously missing.
If there are any further comments which Mr. Iaconis wishes to make, which suggest
that it is the Administration that is misleading the Commission, I would be happy
to respond to those.
TO:
CITY OF MIAMI. FLORIDA
INTER•OFFICC MEMORANDUM
Joseph R. Grassie
City Manager
FROM. Richard L. Fosmoen
Assistant City Manager
DATE
SEP 8 1978
FILE
:ue�ECr Dinner Key Committee Appointments
nE'FNENCEA
ENCLOSUREF..
In accordance with the City Commission directives to appoint several
committees to assist in planning and redevelopment of Dinner Key,
the following persons have been contacted to serve on the committees:
User's Improvement Review
Letters sent to:
Mr. E. P. Iaconis
Mr. Thomas Dixon
Ms. Sylvia King, Pier 1
Mrs. Evelyn Milledge, Pier 2
Mr. Fred Roth, Pier 3
Mr. Dunston Smith, Pier 4
Mr. Dick Oakley, Pier 5
Operations Oversight
Letters sent to:
Ms. Sylvia King, Pier 1
Mrs. Evelyn Milledge, Pier
Mr. Fred Roth, Pier 3
Mr. Dunston Smith, Pier 4
Mr. Dick Oakley, Pier 5
Mr. Gene Gibson, Owner
Gordon's Bait & Tackle
Committee
Those accepting:
Mr. E. P. Iaconis
Mr. Thomas Dixon
Ms. Sylvia King, Pier 1
Mrs. Evelyn Milledge, Pier 2
Mr. Fred Roth, Pier 3
Committee
Those accepting:
Ms. Sylvia King, Pier 1
2 Mrs. Evelyn Milledge, Pier 2
Mr. Fred Roth, Pier 3
Mr. Gene Gibson, Owner
Gordon's Bait & Tackle
TO: MAYO„
SEP 8 1978
TRPNC: 111T 7, .,. ...J...--
•
Joseph R. Grassie
City Manager
Letters sent to:
Mr. Joe Taylor, Spokesman for
commercial fishermen
Mr. Allen Bliss, Owner of
Biscayne Sailboat Rentals
SEP 8 118
Those accepting:
Mr. Joe Taylor
Mr. Allen Bliss
Further, we have requested the chairpersons or presidents of the following
organizations to designate an individual to represent their group on
an Environmental Review Committee:
Mr. Erik Speyer
Director of Exhibits
Planet Ocean
Mrs. Jean Yahle
Rosenstiel School of Marine
and Atmospheric Sciences
Ms. Maureen Harwitz, President
Izaak Walton League
Mr. Brian Logan, President
Sierra Club
We have requested the following people to
Advisory Committee to assist the Planning
Mr. Robert Carter
Dinner Key Marina
Mr. Richard Cummins
Go Boating Magazine
Mr. Robert Fielder
Alexander & Alexander, Inc.
Mr. Robert H. McTague
Past Commodore
Coconut Grove Sailing Club
Mrs. Marjory Stoneman Douglas
President
Friends of the Everglades
Mr. Dan Bentley -Baker
President
Tropical Audubon Society
Mr. Alexander Stone
Marine Wilderness Society
serve on the Marina Development
Department in marina planning.
Mr. Alex M. Balfe
Merrill -Stevens Yachts
Mr. Thomas Bilhorn
General Development Corp.
Admiral John F. Michel
Attached are copies of letters that were sent to each of the committee
persons with a description of the responsibilities and processes that
the committee will use.
0114
•
awe
Mr. E. P. Iaconis
7951 S. W. 146 Street
Miami, Florida 33158
AUG 3 0 1978
Dear Mr. Iaconis:
At the City Commission meeting of July 28, 1978 the City Commission
directed me to establish a User's Improvement Review Committee to
assist the Administration in reviewing various proposed improvements
to the Dinner Key docks. As you may know, the City is currently
considering improvements which would amount to approximately $100,000
and the contract award for these improvements will be before the
City Commission on September 14. In addition, you may be aware that
the City Commission has selected Biscayne Recreation, Inc. as the
successful bidder for undertaking management of Dinner Key and for
expanding current facilities at Dinner Key. The Administration has
begun negotiations with Biscayne Recreation, Inc. As plans develop
for the improvement of Dinner Key, I would like the User's Improvement
Review Committee to comment on the proposed improvements and provide
input to me on the current and future needs for facilities at Dinner
Key.
I am requesting that you serve on the User's Improvement Review
Committee to meet with the Director of Stadiums and Marinas in
order to
1) review and comment on the currently proposed improvements
and maintenance work that is going to be considered by
the City Commission on September 14, 1978, and
f
2) review and comment to me on the plans for expansion and
improvement of the Dinner Key Marina as they are generated
by Biscayne Recreation, Inc.
If you are willing to serve on this committee, I would appreciate
hearing from you at your earliest convenience, but in no case
later than September 5 so that I may consider other appointments
if you are not able to serve on this committee.
P. . Grassie-
City Manager
• soli
•
AUG 3 0 1978
Ms. Sylvia King
Pier 1, Slip 31
Dinner Key Marina
Miami, Florida 33133
Subject: OPERATIONS OVERSIGHT COMMITTEE
Dear Ms. King:
As you know, the City of Miami is currently negotiating with
Biscayne Recreation, Inc. in order to expand and improve
facilities at Dinner Key. There are a number of day-to-day
operating questions which need to be addressed during our
negotiations with Biscayne Recreation, Inc. as well as questions
of a more immediate nature that need to be addressed by the City
in its management of Dinner Key. I am, therefore, inviting you
to serve on a committee which would be titled, "Operations
Oversight Committee" to work with Mr. Robert Jennings, Director
of Stadiums and Marinas and Mr. Hector Gai, the Marinas Manager.
Issues that I would expect to be addressed would include the
current state of repairs on the docks, services that are
currently provided or should be provided under a management
contract, and other issues that effect the day-to-day operations
at Dinner Key. I would expect that this committee would be
on -going, and that membership would be rotated among the
commercial occupants and that pier representatives would serve as
ex-officio members.
Please let me know prior to September 5, 1978 if you will be able
to serve, so that this committee can be put in place and made
operational as quickly as possible.
Sirc-rel ,
•
Josep ,R. Grassie
City Manager
1
William R. Hough & Co.
OLD PORT COVE
1212 U.S HIGHWAY ONE
P O BOX 1+o9f
NORTH PALM REACH. FLORIDA )34oS
(iO11 626 )911
Mr. Joseph Grassie
City Manager
City of Miami
3500 Pan American Drive
Miami, FL 33133
Dear Mr. Grassie:
September 6, 1978
/ ', CA'
1_`".
`A....(„ -✓
.L. ,l. ,y,--
JOE S WISE
RESIDENT MANAGER
RAYMOND V CONDON
n
, C.:.. C aa'
As per your request, William R. Hough $ Co. has completed an up -dated
analysis of the Marina proposals, including the proposal to create a
"Miami Waterfront Trust". The 500-slip, 200-mooring Dinner Key Marina
model was up -dated and used in the analysis. Certain assumptions
included in the original model were revised to provide the City of Miami
more flexibility in terms of rates, especially during the construction
period.
The original model assumed that rates would be increased prior to
construction to pay the interest expense of the Revenue Bonds during
construction. The revised model includes a Capitalized Interest Fund
so that rates do not have to be increased prior to completion of the
project. An annual contribution of $10,000 to the Renewal and Replacement
Fund was included in the Operating Expense. The Bond Issue was increased
to $4,525,000 to reflect the Capitalized Interest Fund.
Our up -dated analysis included a pro -forma cash flow for the first 10 years
of operation at the various rates included in the proposals (see Exhibits
3-5). A summary was prepared to show the revenue available to the City
and each of the proposers at the given rates (see Exhibit 1). The cash
flow projections and the revenue estimates were based on the data included
in the Marina model.
A review of Exhibit 1 reveals that the Waterfront Trust would yield the
maximum return to the City at all of the proposed rate schedules with the
exception of the 5-cent and 10-cent rate. Biscayne Development Company
would provide the highest return at those rates. However, the Company
would operate at an estimated $85,000 loss over the first 10 years of
operation. The analysis also revealed that rates would have to be
increased above their present level to provide adequate revenue coverage
to prospective bondholders. We estimate that a coverage requirement of
1.40x is necessary to market the Bonds at a favorable interest rate.
At a 1.40x coverage factor, revenues would have to exceed the debt service
payment by 40%.
STATE. COUNTY AND MUNICIPAL BONDS
William R. Mouth & Co.
Mt. Joseph Grassie
September 6, 1978
Page Two
While we were not asked to comment on the financial feasibility of the
proposals, a review of Exhibit 1 demonstrates that the before -tax return
to a profit motivated firm is not very attractive at any rate combination
other than the 15-cent and 18-cent schedule. (Only one of three proposals
included the 15-cent and 18-cent rate.) In addition, there is no depre-
ciation expense available to the corporations since the City will be
providing the construction capital.
While the Miami Waterfront Trust appears to provide the highest potential
yield to the City at the lowest cost to the boat owners, there are
unresolved questions regarding the quality of management. The Trust
proposes 10 members representing marine users, marine associations, civic
groups, environmental groups and the public at large. We are told by the
Trust proposers that the Trust concept can provide excellent management
ability as evidenced by the Public Health Trust. However, we have not
been given the specific names of any proposed members and, therefore, we
are unable to comment on the quality of management proposed.
There will be certain legal expenses incurred if the Waterfront Trust is
accepted. Legislation will have to be passed authorizing the creation of
the Trust. A management agreement must be drafted including provisions
to insure complete compliance with the proposed Bond Resolution. All of
the above, including appointment of the Trustees, must be completed prior
to the issuance of the Bonds. We assume all legal expense is to be paid
by the City.
Any legal expenses could be offset by the potential revenue to the City.
As is customary in revenue bond financing, a city -approved engineering
firm would be selected to design, plan and supervise the marina construction.
In addition, the firm would report at least semi-annually to the City on
the marina operations over the term of the bonds. Additionally, William
R. Hough $ Co. would review all financial audits to insure compliance with
the Bond Resolution and Trust Indenture. A Trustee acting on behalf of
the bondholders would also review the marina operation. The above
independent supervision will assist the City in recognizing early changes
needed to assure an operation that will serve the users of the marina in
a safe manner, while assuring the City of an efficient operation.
Based upon our financial analysis, the proposal to create a "Miami Water-
front Trust" offers the City the most attractive financial return at the
lowest cost to the Marina users. However, there are questions regarding
their management expertise to be settled. At the same time, Biscayne
Recreational Development Company's proposal is the most attractive of
the profit -motivated proposals.
William R. Hough $ Co. recommends that the City enter into further nego-
tiations with the "Miami Waterfront Trust" to explore the management
expertise and terms of a management contract. At the same time, the City
William R. H.uth & Co.
eft
Mr. Joseph Grassie
September 6, 1978
Page Three
should enter into negotiations with Biscayne Recreational Development
Company. Only after all unresolved questions regarding management, terms
of the management contract, etc., have been resolved can the City make a
final decision.
We further recommend that no major improvements be made to the Marina
until completion of an engineering report. It is essential that William
R. Hough $ Co. and the engineering firm have representation at the
negotiations with the proposer.
Respectfully,
WILLIAM R. HOUGH F, CO.
'ymond V. Condon
RVC/js
Enclosures
Uiilliam H. Hough & Co
OLD PORT COVE
1212 U.S HIGHWAY ONE
P.O. BOX 14095
NORTH PALM BEACH. FLORIDA 3)408
()M 626.39I1
Mr. Joseph Grassie
City Manager
City of Miami
3500 Pan American Drive
Miami, FL 33133
Dear Mr. Grassie:
September 11, 1978
JOE B. WISE
RESIDENT MANAGER
RAYMOND V. CONDON
a
You have asked us to evaluate the presentation made by Messrs. E.P. Iaconas
and Thomas Dixon that a Public Trust be formed (such as the Trust managing
Jackson Memorial Hospital for Dade County) which would enter into a manage-
ment contract with the City to manage its Marinas. They did not make a
formal proposal and their idea was not made within the time frame for
receipt of proposals.
Our only knowledge of their idea was through:
1. Reading the minutes of the City Council meeting of June 22, 1978.
2. The slide projection presentation at the City Council meeting of
July 28, 1978.
3. A memo which you addressed to the City Commission of your
impression of their plan, dated July 25, 1978.
4. A meeting with the aforementioned gentlemen arranged for us in
the City Hall on the morning of August 25, 1978.
There are three areas we would like to discuss:
1. Formation of the Trust.
2. Expertise of the Trust membership to be formed.
3. The financial aspects as furnished to us.
1. The Trust has not been formed nor fully researched legally. The Trust
proposers would have to work with their attorneys to draft a bill which
would legally grant powers necessary to their carrying out the duties of a
management contract. This has not even been discussed with the City in
much detail, so far as we know. The City Attorney and the Bond Attorneys
would have to study and agree that the contents of the Bill would adequately
protect the City and the security expectations of the bondholders.
We have assumed the City has come to the conclusion, as we have recommended,
that the cheapest cost for the construction would be through the issuance
of tax exempt Marina Revenue Bonds, issued by the City of Miami.
p.79-92
'lilliim a Mwg6 & to.
Mr. Joseph Grassie
September 11, 1978
Page Two
The Bill, if acceptable by all parties, would have to be passed by the
State Legislature. We forsee this entire process as taking one year.a
We have no idea what the entire process would cost, but since the Trust
proposers obviously have no funds, we were told that the City would have
to finance the cost. We do not know if the money would come from the
General Fund, Marina revenues or bond proceeds.
We have been advised that an Interim Committee would be formed to handle
management of Dinner Key Marina during the time between the City's
acceptance of the "Miami Waterfront Trust" idea and the formal and legal
organization and appointment of Trustees in a manner suitable to the City.
We do not know just what legal status an Interim Committee would have,
who the people would be or what they know about running a marina, nor very
importantly, whatever role they may have in the planning and construction
thereof.
2. We have been given a briefing of the idea and method of selecting seven
voting members of the Trust. This may or may not result in a Board having
members qualified in the decision -making required in the proper and
economical management of the Marina. Therefore, we are not in a position
to give a point of view as to the quality of management.
3. Regarding finances, the Trust idea proposers have very sketchy figures
showing how they can keep service rates at the present 5 and 10 rates
after the rental of 500 slips (22,500 feet). Realistically, their expec-
tation cannot be achieved by a very wide margin (see Exhibit of Adjustment).
The proposers show gross revenues of $787,300 based on this assumption,
yet we cannot quite reconcile this. They show expenses of $310,000 and
debt service on an issue of $2,000,000 Bonds, leaving $309,500 before a
minimum guarantee to the City of $150,000. The Trust is not in a position
to guarantee funds to the City since it does not have funds of its own.
These figures show a favorable total return to the City, but on the basis
presented, is not attainable.
The Bond Issue of $2,000,000 is unreasonable to accomplish the construction
of 500 slip spaces, especially when the available construction funds are
reduced by the normal reserves included and issuance cost of bonds. It is
unreasonable to believe that $310,000 will cover expenses when 500 slips
are in operation because more space will require greater expenditures and
more service space than the 1977-78 estimated expenses used in their
calculation. True, their figures were used as a comparison with other
proposers, but they are not supportive and are all we have to look at.
'�Uillism a Hsu & Co.
W. Joseph Grassie
September 11, 1978
Page Three
In an attached additional report, we deal with concepts more realistic
as to plan, income, operation and maintenance expense, construction casts,
size of bond issue, debt service requirements and return to the City.
Respectfully,
WILLIAM R. HOUGH $ CO.
Raymond V. Condon
RVC/ j s
Enclosure
EXHIBIT OF ADJUSTMENT
The following is a readjustment of the Trust
figures when 500 slips are in place:
Revenues at 54 and 104 Rates
Plus Income on 200 Moorings (which Trust did not include)
Interest on Reserves (which Trust did not include)
Total Revenues
Operation and Maintenance Expense
Renewal $ Replacement Reserve
Total Expenses
Net Revenues
Less Debt Service
a
$787,300
96,000
50,325
$933,625
$467,470
10,000
$477,470
$456,155
-406,000
Surplus $ 5r,0,155
William H. Hough & Co.
OLO PORT COVE
1212 U.S. HIGHWAY ONE
P.O. BOX 11095
NORTH PALM BEACH. FLORIDA 33401
I303) 626.3911
Mr. Joseph Grassie
City Manager
City of Miami
3500 Pan American Drive
Miami, FL 33133
Dear Mr. Grassie:
September 11, 1978
JOE B. WISE
RESIDENT MANAGER
RAYMOND V. CONDON
ir
As per your request, William R. Hough & Co. has completed an up -dated
analysis of the Marina proposals, including the proposal to create a
"Miami Waterfront Trust". The 500-slip, 200-mooring Dinner Key Marina
model was up -dated and used in the analysis. Certain assumptions
included in the original model were revised to provide the City of Miami
more flexibility in terms of rates, especially during the construction
period.
The original model assumed that rates would be increased prior to
construction to pay the interest expense of the Revenue Bonds during
construction. The revised model includes a Capitalized Interest Fund
so that rates do not have to be increased prior to completion of the
project. An annual contribution of $10,000 to the Renewal and Replacement
Fund was included in the Operation Expense. The Bond Issue was increased
to $4,525,000 to reflect the Capitalized Interest Fund. This may be
reduced to the extent the City may elect to dedicate all or a portion of
the funds on hand for renovation which is expected to amount to $293,390
on October 1, 1978.
Our up -dated analysis included a pro -forma cash flow for the first 10
years of operation at the various rates included in the proposals (see
Exhibits 3-5). A summary was prepared to show the revenue available to
the City and each of the proposers at the given rates (see Exhibit 1).
The cash flow projections and the revenue estimates were based on the
data included in the Marina model.
A review of Exhibit 1 reveals that the Waterfront Trust would yield the
maximum return to the City at all of the proposed rate schedules with
the exception of the 5-cent and 10-cent rate. Biscayne Development
Company would provide the highest return at those rates. However, the
Company would operate at an estimated $85,000 loss over the first 10
years of operation. The analysis also revealed that rates would have to
be increased above their present level to provide adequate revenue
coverage to prospective bondholders. We estimate that a coverage require-
ment of approximately 1.50x is necessary to market the Bonds at a favorable
interest rate. At a 1.50x coverage factor, revenues would have to exceed
the debt service payment by 50%.
•
LtmINIv. AN.LI.-M1JIs IIP_A.t ..Hc�trns
William R Hough & Co.
Mr. Joseph Grassie
September 11, 1978
Page Two
While we were not asked to comment on the financial feasibility of the
proposals, a review of Exhibit 1 demonstrates that the before -tax return
to a profit motivated firm is not very attractive at any rate combination
other than the 15-cent and 18-cent schedule. (Only one of three proposals
included the 15-cent and 18-cent rate.) In addition, there is no depre-
ciation expense available to the corporations since the City will be
providing the construction capital.
While the Miami Waterfront Trust appears to provide the highest potential
yield to the City at the lowest cost to the boat owners, there are
unresolved questions regarding the quality of management. The Trust
proposes 10 members representing marine users, marine associations, civic
groups, enviornmental groups and the public at large. We are told by the
Trust proposers that the Trust concept can provide excellent management
ability as evidenced by the Public Health Trust. However, we have not
been given the specific names of any proposed members and, therefore, we
are unable to comment on the quality of management proposed.
There will be certain legal expenses incurred if the Waterfront Trust is
accepted. Legislation will have to be passed authorizing the creation of
the Trust. A management agreement must be drafted including provisions
to insure complete compliance withthe proposed Bond Resolution. All of
the above, including appointment of the Trustees, should be completed prior
to the issuance of the Bonds. However, the City could continue to operate
the Marina during an interim period when the enabling legislation would be
passed and the formal Trust organized. We assume all legal expense is to
be paid by the City.
Any legal expenses could be offset by the potential revenue to the City.
As is customary in revenue bond financing, a city -approved engineering
firm would be selected to design, plan and supervise the marina construction.
In addition, the firm would report at least semi-annually to the City on the
Marina operations over the term of the Bonds. Additionally, William R.
Hough $ Co. would review all financial audits to insure compliance with the
Bond Resolution and Trust Indenture. A trustee acting on behalf of the
bondholders would also review the Marina operation. The above independent
supervision will assist the City in recognizing early changes needed to
assure an operation that will serve the users of the Marina in a safe
manner, while assuring the City of an efficient operation.
Based upon our financial analysis, the proposal to create a "Miami Water-
front Trust" offers the City the most attractive financial return at the
lowest cost to the Marina users. however, there are questions regarding
their management expertise to be settled. At the same time, Biscayne
Recreational Development Company's proposal is the most attractive of the
profit -motivated proposals up to the 10 and 13-cent rate schedule. At the
15 and 18-cent schedule, Dinner Key Marina, Inc. offers the most attractive
return to the City. We might point out once again that the 10 and 13-cent
rate offers little benefits to any profit -motivated proposer.
ft. wog' i. i.o.
Mr. Joseph Grassie
September 11, 1978
Page Three
William R. Hough F, Co. recommends that the City have further discussions
with the Biscayne Recreational Development Company as directed by the.
Commission toward the development of a management contract of telatively
short periods.
We further recommend that the City determine if it wishes to pay the cost
of the legal and other expenses of the formation of a Trust and endure the
delay which would ensue. If this is found to be satisfactory, the City
should enter into discussions with the proposers of the Trust leading
toward a management contract. We realize this will be difficult since the
Trust does not exist and there are a great many provisions which have to
be dealt with.
Since there is so little in writing of their plans, it would be helpful
for all concerned if they were requested to reduce to writing, in detail,
what their plan is dealing with the legal powers they would seek as well
as realistic financial results. Only after all unresolved questions
regarding terms of the management contract have been resolved can the
City make a final decision on a contract with any proposer.
We further recommend that no major improvements be made to the Marina until
completion of an engineering report. It is essential that William R.
Hough F Co. and the engineering firm have representation at the negotiations
with the proposer.
RVC/js
•
Respectfully,
WILLIAM R. HOUGH F, CO.
"ymond V. Condon
79-n
Biscayne Dev.
Dinner Key Inc.
Ecclestone Mgt.
Public Trust
Biscayne Dev.
Dinner Key Inc.
Ecclestone Mgt.
Public Trust
Biscayne Dev.
Dinner Key Inc.
Ecclestone Mgt.
Public Trust
Assumptions:
DINNER KEY MARINA
CASH FLOW PROJECTIONS
MARINA OPERATORS
1979 - 1988
5 cents - 10 cents (1979-1981)
8 cents and 13 cents (1982-1988)
Total Fee
Paid to City Total Revenue
1979 - 1988 Received
$1,700,000
1,440,000
1,492,772
1,614,461
10 cents and 13
$1,785,965
1,440,000
1,877,444
2,059,794
15 cents and 18
$2,287,224
2,510,021
2,270,595
5,493,182
1. Marina operators would be
assumed rates.
2. All excess revenues would
by the Public Trust.
$1,614,461
1,614,461
1,614,461
- 0-
cents
$2,059,794
2,059,794
2,059,794
- 0-
cents
$5,493,182
5,493,182
5,493,182
- 0-
EXHIBIT 1
a
10-Year
Profit
or
Loss
$ (85,539)
174,461
121,688
N/A
$ 273,829
619,794
182,350
N/A
$3,205,958
2,983,161
3,222,587
N/A
willing to operate the marina at the
be pledged to the City's General Fund
a 10.J Lt., l... 1.L,1Li•• • •
FISCAL YEAR 1978
•
EXISTING MARINA
(14,565 Linear Feet)
.05 and .10 Rates
Live -aboard Slips - .10 x 10,365 Linear Feet
Non -Live -aboard Slips - .05 x 4,200 Linear Feet
Sailboat Berths - $31.00 per month - 20 Slips
Commercial Berths - $66.00 per month - 15.5 Slips
Transient Space - 20 per foot, per day
TOTAL PROJECTED REVENUE
PROPOSED MARINA
(22,500 Linear Feet)
.05 and .10 Rates
Live -aboard Slips - .10 x 16,020
Non -Live -aboard Slips - .05 x 6,480
Sailboat Berths - Estimated
Commercial Berths - Estimated
Transient Space - 20 per foot, per day
TOTAL PROJECTED REVENUE
PROPOSED }ARINA
(22,500 Linear Feet)
.08 and .13 Rates
Live -aboard Slips - .13 x 16,020
Non -Live -aboard Slips - .08 x 6,480
Sailboat Berths - Estimated
Commercial Berths - Estimated
Transient Space - 20 per foot, per day
TOTAL PROJECTED REVENUE
PROPOSED MARINA
(22,500 Linear Feet)
.10 and .13 Rates
Live -aboard Slips - .13 x 16,020
Non -Live -aboard Slips - .10 x 6,480
Sailboat Berths - Estimated
Commercial Berths - Estimated
Transient Space -.20 per foot, per day
EXHIBIT 2
$373,140
75,600
7,440
12,2l6
50,000
$518,456
$584,730
116,640
11,629
19,187
78.149
$810,335
$ 749,736
186,624
11,629
19,187
78,149
$1,045,325
$ 749,736
233,280
11,629
19,187
78,149
TOTAL PROJECTED REVENUE $1,091,981
PROPOSED MARINA
(22,500 Linear Feet)
.15 and .18 Rates
Live -aboard Slips - .18 x 16,020 $1,038,096
Non -Live -aboard Slips - .15 x 6,480 349,920
Sailboat Berths - Estimated 11,629
Commercial Berths - Estimated 19,187
Transient Space -.20 per foot, per day 78,149
• TOTAL PROJECTED REVENUE $1,496,981
Assumptions:
1. The ratio of live -aboard versus non -live -aboard would remain
constant.
2. Revenues attributable to sailboat and commercial berths and tran-
sient space would be maintained in the same proportion to gross revenues in
the new marina as they were in the existing marina.
Marina Revs.
Mooring Revs.
Int. on Reserve(1)
TOTAL Revenues
Operating Exp.
Replace. Reserve(2)
TOTAL Expenses
Total Revenue
Total Expenses
Revenue Avail.
for Debt Service
Debt Service
Surplus Revenue
Coverage
ns
1979
an.l _10 Rate's
DINNER KEY MARINA
PROJECTED CAS;; FLOW
.05 and .10 Rates (1)
.08 and
1980 1981 1982 (1)
$518,450 $575,055
48,000 96,000
170,710 86.287
$737,160 $757,342
$420,000
10.000
$430,000
$737,160
(430,000)
$307,160
(236,313)
$ 70,847
1. 30x
$443,100
10,000
$453,100
$757,342
(453,100)
$304,242
1236,313)
$ 67,929
1.29x
$ 810,335
96,000
50.325
956,660
EXPENSES
467,470
10,000
477,470
$1,045,325
96,000
50.325
$1,191,650
$ 493,18G
10.000
$ 503,180
$ 956,660 $1,191,650
( 477,470) ( 503,180)
$ 479,19u
(406,000)
$ 73,190
1. 18x
5 688.470
(406,006)
$ 282,470
REVENUE TO CITY
Biscayne Dev. $150,000 $150,000 $ 175,000 $
Dinner Key Inc. -0- -0- 180,000
Ecclestone Mgt. 50,000 54,200 111,900
Public Trust 70,847 67,929 73,190
1.70x
175,000
180,000
182,396
282,470
EXHIBIT 3
.13 Ratps-
1983 1984-1988
$1,045,325
96,000,1
50,325
$1,191,650
520,305
10,000
$ 530,305
$1,191,650
( 530,305)
$ 661,545
(466,000,
$ 255,345
1.63x
$ 175,000
180,000
182,396
255,345
$5,226,625
480,06u
251.625
$5,958,250
$3,317,000
50,000
$5,367,000
$5,958,250
53,063,570
52 , 894 , 6�,i,
2,330,060 )
S 864,680
1.43x
$ 875,000
900,000
911,880
864,680
Assumptions:
1. Marina rates would increase to eight cents non -live -aboard and thirteen cents
live -aboard in 1982.
2. Operating expenses would increase 5.5 per cent per annum.
3. The interest portion of debt service would be paid out of capitalized interest
fund (bond proceeds) during construction period (two years).
4. Marina operators would pay minimum guarantee to the City regardless of avail-
able revenues.
S. For analysis purposes, we have projected revenue for the years 1984-1988,
holding the rates at tight cents and thirteen cents while expenses continued
to increase at an annual rate of 5.5 per cent.
Notes:
1. Interest on reserves was estimated at 6.50 per cent per annum during construction
and included fifty per cent (50") of construction fund, fifty per cent (50°„ of
capitalized interest, debt service reserve and replacement reserve. The interest
earning was estimated at 7.125;, after construction and included only the debt
service reserve and replacement reserve.
2. Replacement reserve requirement .is 2.Sdhcr :'_,t of the annual debt service payments.
•
1
Marina Revs.
Mooring Revs.
Int. on Reserve(1)
TOTAL Revenues
Operating Exp.
Replace. Reserve(2)
TOTAL Expenses
Total Revenue
Total Expenses
Revenue Avail.
for Debt Service
Debt Service
Surplus Revenue
Coverage
Biscayne Dev.
Dinner Key Inc.
Ecclestone Mgt.
Public Trust
DINNER KEY MARINA
PROJECTED CASH FLOW
.10 and .13 Rates •
1979 1980
$518,450 $715,580
48,000 96,000
170,710 86,287
$737,160 $897,867
$420,000
10,000
$430,000
$737,160
(430,000)
$307,160
(236,313)
$ 70,847
1.30x
$150,000
-0-
76,148
70,847
$443,100
10,000
$453,100
$896,867
(453,100)
$444,767
(236,313)
$208,454
1.88x
$150,000
-0-
109,360
208,454
1981
$1,091,981
96,000
50,325
$1,238,306
EXPENSES
$ 467,470
10,000
$ 477,470
$1,238,306
( 477,470)
$ 760,836
(406,000)
$ 354,836
1.87x
REVENUE TO CITY
$ 185,745
180,000
211,492
354,836
1982
$1,091,981
96,000
50.325
$1,238,306
$ 493,180
10,000
$ 503,180
$1,238,306
( 503,180)
$ 735,126
(406,000)
$ 329,126
1.81x
185,745
180,000
211,492
329,126
EXHIBIT 4
1983
$1,091,981
.,96,0003
50.325
$1,238,306
$ 520,305
10,000
$ 530,305
1984-1988
$5,459,905
480,000
251.625
$6,191,530
$3,317,000
50,000
$3,367,000
$1,238,306 $6,191,530
( 530,305) (3,367,000)
$ 708,001
(406,000)
$ 302,001
1.74x
$ 185,745
180,000
211,492
302,001
$2,824,530
(2,030,000)
$ 794,530
1.39x
$ 928,730
900,000
1,057,460
794,530
Assumptions:
1. Revenue in 1979 was based on existing slips, rates and one hundred moorings.
Revenue in 1980 was based on fifty per cent (50,) of new slips, increased rates,
and two hundred moorings.
2. Marina rates would remain constant at ten cents and thirteen cents.
3. Operating expenses would increase at an annual rate of 5.5%.
Notes:
1. Interest on reserves was estimated at 6.50 per cent (6.50%) per annum during
construction and included fifty per cent (50%) of construction fund, fifty per
cent of capitalized interest, debt service reserve and replacement reserve. The
interest earning was estimated at 7.125% after construction and included only
the debt service reserve and replacement reserve.
2. Replacement reserve requirement is 2.5 per cent (2.5%) of the annual debt service
payments.
1
r"
Marina Revs.
Mooring Revs.
Int. on Reserve(1)
TOTAL Revenues
Operating Exp.
Replace. Reserve(2)
TOTAL Expenses
Total Revenue
Total Expenses
Revenue Avail.
for Debt Service
Debt Service
Surplus Revenue
Coverage
Biscayne Dev.
Dinner Key Inc.
Ecclestone Mgt.
Public Trust
1979
DINNER KEY MARINA
PROJECTED CASLL FLOW
.15 and .18 Rates
1980
$518,450 $ 919,418
48,000 96,000
170,710 86,287
$737,160 $1,101,705
$420,000
10,000
$430,000
$737,160
(430,000)
$307,160
(236,313)
$ 70,847
1.30x
$ 443,100
10,000
$ 453,100
1,101,705
(453,100)
$ 646,605
(236, 315)
$ 412,29`
$150,000 $
-0-
76,148
70,847
Assurrtions :
2.74x
1961.
$1,496,981
96,000
50,325
$1,643,306
EXPE\SriS
$ 467,470
10,060
$ 477,470
1982
$1,496,981
96,000
5u.325
EXHIBIT 5
1983
$1,496,98J.
96,000,
" 50,325
$1,643,306 $'1,643,306
S 493,160
10,000
$ 520,303
13.063
$ 503,180 $ 530,305
,643,306 $1,643,306
( 477,470) ( 503,180)
$1,165,656
(406, 000)
$ 759,386
2.87x
REVENUE TO CITY
105,256 $ 240,496
-3- 379,693
170,511 252,992
412,292 759,386
$1,140,126
(406,000)
$ 734,126
2.81x
$1,645,300
( 530,305)
$1, 113,001
(406,000)
$ 707,601
2.74x
1984-1988
$7,484,905
480,03
25i,6�5
$8,216,530
$3,317,006
50 .000
$3,367,000
$6, 210 ,556
C3,367,000)
$4,649,530
(2,030,06q
S2,619,530
2.39x
$ 246,496 $ 246,496 $1,232,460
367,063 353,500 1,409,765
252,992 252,992 1,264,960
734,126 707,001 2,819,530
1. Revenue in 1979 was based or. existing slips, rates and one hundred moorings.
Revenue in 1980 was based oa fifty per cent (500) of new slips, increased rates,
and two hundred moorings.
2. Marina rates would remain constant at ten cents and thirteen cents.
3. Operating expenses would increase at an annual rate of 5.5%.
Notes:
1. Interest on reserves was estimated at 6.50 per cent (6.50%) per annumm during
construction and included fifty per cent (50%) of construction fund, fifty per
cent of capitalized interest, debt service reserve and replacement reserve. The
interest earning was estimated at 7.125% after construction and included only
the debt service reserve and replacement reserve.
2. Replacement reserve requirement is 2.5 per cent (2.5%) of the annual debt service
payments.
79-92
DINNER KEY MARINA
SOURCES AND USES
BOND PROCEEDS
SOURCES
Principal Amount of Bonds $4,525,000
Less: Underwriters Discount (2.5%) (113,125)
TOTAL Source $4,411,875
USES
Construction Cost
Debt Service Reserve
Renewal and Replacement
Capitalized Interest
Engineer's Report
Issuance Expense
TOTAL Uses
$3,450,000
406,000
180,000
339, 375
10,000
26,500
$4,411,875
EXHIBIT 6
a