16TO:
FROM:
DATE:
SUBJECT:
BACKGROUND:
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CITY OF SOUTH MIAMI
OFFICE OF THE CITY MANAGER
INTER-OFFICE MEMORANDUM
The Honorable Mayor & Members of the City Commission
South Miami
bOd
;'fiW
2001
Hector Mirabile, Ph.D., City Manager f 1 /' 1_
April 25, 2012 Agenda Item NO.: __ lP_
A resolution revising the language within section 2 of Resolution 75-12-13632
to define the cap on the cost of operations to include and be increased by the
revenue generated by the pool without increasing the City'S obligation.
The Mayor and City Commission approved of Resolution 75-12-13632 on
April 3,2012, providing the City Manager with instructions on how the City
Commission desires the City Manager to proceeds with regard to the proposed
Murray Park Community Pool. Section 2 of Resolution 75-12-13632
authorized the City Manager" ... to move forward with the selection of a design
build firm and construction of the pool with the understanding that the pool
shall be designed so that its operating costs shall not exceed Fifty Thousand
($50,000.00) Dollars." The current language requires the City to maintain the
pool with operating costs not to exceed Fifty Thousand ($50,000.00) Dollars
annually, irrelevant to the revenues generated which would offset operating
costs. Operating cost increases are highly probable due to inflation and
revenues would also increase accordingly; hence offsetting the same value to
the operating costs threshold directed by the Commission. By adding revenues,
the pool may possibly be open for more time during the year, as long as
revenues cover some of the operating costs. After the City's Chief Financial
Officer reviewed the language, he recommended that by adding "revenues," the
pool may possibly be in operation longer, as long as revenues continue to cover
some of the operating costs.
Resolution 75-12-13632
Email dated 4/2312012 from Alfredo Riverol
1 RESOLUTION NO. __ _
2
3 A resolution revising the language within section 2 of Resolution 75-12-13632
4 to define the cap on the cost of operations to include and be increased by the
5 revenue generated by the pool without increasing the City's obligation.
6
7
8 WHEREAS, the Mayor and City Commission approved of Resolution 75-12-13632 on
9 April 3, 2012, providing the City Manager with instructions on how the City Commission desires
10 the City Manager to proceeds with regard to the proposed Murray Park Community Pool; and
11
12 WHEREAS, in Section 2 of Resolution 75-12-13632 authorized the City Manager " ... to
13 move forward with the selection of a design build firm and construction of the pool with the
14 understanding that the pool shall be designed so that its operating costs shall not exceed Fifty
15 Thousand ($50,000) Dollars;" and
16
17 WHEREAS, the current language requires the City to maintain the pool with operating
18 costs not to exceed Fifty Thousand ($50,000.00) Dollars annually, irrelevant to the revenues
19 generated which would offset operating costs; and
20
21 WHEREAS, operating cost increases are highly probable due to inflation and revenues
22 would also increase accordingly; hence offsetting the same value to the operating costs threshold
23 directed by the Commission; and
24
25 WHEREAS, by adding revenues, the pool may possibly be open for more time during
26 the year, as long as revenues cover some of the operating costs; and
27
28
29 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
30 COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA:
31
32 Section 1: Section 2 of Resolution 75-12-13632 is hereby amended to read as
33 follows:
34 Section 2: The City Manager is hereby authorized to move forward
35 with the selection of a design build firm and construction of the pool with
36 the understanding that the pool shall be designed so that its annual
37 operating costs shall not exceed revenue generated by the pool plus the
38 sum of Fifty Thousand ($50,000.00) Dollars. The City shall request from
39 the South Miami Community Redevelopment Agency ("SMCRA") a Fifty
40 Thousand ($50,000.00) Dollars payment per year for the operating costs of
41 the pool and the City shall pay any amount of the Fifty Thousand
42 ($50,000.00) Dollars operating costs that the SMCRA is not authorized to
43 pay. The City shall also request that the SMCRA contribute an additional
44 Fifty Thousand ($50,000.00) Dollars, on top of the original Fifty
45 Thousand ($50,000.00) Dollars commitment that the SMCRA made, to
46 pay for the design of the pool so that the SMCRA's total commitment to
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pay for the design of the pool will be One Hundred Thousand
($100,000.00) Dollars.
Section 2: This resolution shall be effective immediately after approving this resolution
by vote of the City Commission.
PASSED AND APPROVED this __ day of _____ , 2012.
ATTEST:
CITY CLERK
READ AND APPROVED AS TO FORM,
LANGUAGE, LEGALITY AND
EXECUTION THEREOF
CITY ATTORNEY
2
APPROVED:
MAYOR
COMMISSION VOTE:
Mayor Stoddard:
Vice Mayor Liebman:
Commissioner Harris:
Commissioner Newman:
Commissioner Welsh:
RESOLUTION NO. 75-12-13632
A Resolution providing the City Manager with instructions on how the
City Commission desires the City Manager to proceed with regard to
the proposed Murray Park Community Pool.
WHEREAS, the City has secured grants for an estimated amount of one million two
hundred thousand ($1,200,000.00) dollars to build a community pool; and
WHEREAS, the City Manager has requested directions from the City Commission as to
how the City desires the City Manager to proceed with regard to the construction of the
community pool; and
WHEREAS, the City Manager has suggested the following possible courses of action
("COA"):
COA 1: Continue negotiating with the YMCA for the management of the Gibson-Bethel
Community Center as well as the pool, terminate the YMCA's lease of the South Miami
Park and, if a pool operator's agreement can be, in the City Manager's estimation, timely
executed, hire a design build firm and construct the pool.
COA 1A: Continue negotiations with the YMCA for the management of the Gibson-
Bethel Community Center as well as the pool, renegotiate the YMCA's lease of the South
Miami Park and, if a pool operator's agreement can be, in the City Manager's estimation,
timely executed, hire a design build firm and construct the pool.
COA2: Continue the process of hiring the design build contractor and construct the pool
with the City of South Miami operating the pool. The City would either enter into a
contract with the YMCA to act as the pool operator or the City would absorb the total
operational and maintenance costs associated with the pool.
COA3: Same as COA2 but the CRA would absorb the costs associated with the total
operation and maintenance of the pool provide this course of action is approved by the
the CRA and Miami-Dade County.
COA4: Continue the process of hiring the design build contractor and build the pool and
during that time attempt, for a third time, to find a pool operator using the RFP process.
COA5: A combination of any of the aforementioned COAs or an alternative.
COA6: Discontinue any further attempts to build the pool and return the money already
expended (approximately $198,000) to Miami-Dade County from the City'S General
Funds.
Page 1 of2
~es. No. 75-12-13632
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA THAT:
Section 1. The recitals set forth hereinabove are hereby made a part of this resolution by
reference.
Section 2. The City Manager is hereby authorized to move forward with the selection of
a design build firm and construction of the pool with the understanding that the pool shall be
designed so that its operating costs shall not exceed Fifty Thousand ($50,000.00) Dollars. The
City shall request from the South Miami Community Redevelopment Agency ("SMCRA") a
Fifty Thousand ($50,000.00) Dollar payment per year for the operating costs of the pool and the
City shall pay any amount of the Fifty Thousand ($50,000.00) Dollars operating costs that the
SMCRA is not authorized to pay. The City shall also request that the SMCRA contribute an
additional Fifty Thousand ($50,000.00) Dollars, on top of the original Fifty Thousand
($50,000.00) Dollars commitment that the SMCRA made, to pay for the design of the pool so
that the SMCRA's total commitment to pay for the design of the pool will be One Hundred
Thousand ($100,000.00) Dollars.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND ADOPTED this 3 rd day of April, 2012.
ATTEST: APPROVED:
COMMISSION VOTE: 4-1
Mayor Stoddard: Yea
Vice Mayor Liebman: Yea
Commissioner Newman: Nay
Commissioner Harris: Yea
Commissioner Welsh: Yea
w:\my documents\resolutions\resolution coa murray park pool 2012 amended and streamlined by ca.doc
Page 2 of2
Korth. Jennifer
From:
Sent:
To:
Cc:
Subject:
Manager,
Riverol, Alfredo
Monday, April 23, 20126:21 PM
Hector Mirabile
Korth, Jennifer
Pool $50,000 Operating Expenses Cap
As per your request, I have reviewed the language within section 2 of Resolution 75-12-13632.
As I read and understand the section, specifically, " ... with the understanding that the pool shall be designed so that its
operating costs shall not exceed fifty thousand ($50,000) dollars." The City must be sure the operating costs do not
exceed $50,000 (I am assuming annually), irrelevant to the revenues generated which would offset operating costs.
Below, please find the definition of operating costs as defined by www.investopedia.com :
Definition of 'Operating Cost'
Expenses associated with administering a business on a day to day basis. Operating costs include both fixed costs
and variable costs. Fixed costs, such as overhead, remain the same regardless of the number of products
produced; variable costs, such as materials, can vary according to how much product is produced.
http://www.investopedia.com/terms/o/operating-cost.asp#axzzlsu09nZOO
Therefore, the definition above is consistent with the General Accepted Accounting Principles (GAAP) definition
of operating expenses.
Furthermore, due to inflation, the $50,000 operating costs cap, which was passed by the Mayor and Commission
via the above mentioned resolution, would reduce the value of the operating cost annually hence possibly
reducing the use of the pool do to the mandated operating cost cap.
Consequently, it is my recommendation that the resolution be revised to include "net of revenues" in the
resolution language, which would address the above stated issues. As operating costs increase due to inflation,
revenues should increase hence providing the same value to the operating costs. Furthermore, by adding "net of
revenues," the pool could possibly be in operations longer, as long as revenues continue to cover the operating
costs, not to exceed the $50,000 city funded cap.
Alfredo Riverol, CPA Cr.FA
Chief Financial Officer
Finance Department
City of South Miami
6130 Sunset Drive
South Miami, FL 33143
0: 305-663-6343
f: 305-663-6346
ariverol@southmiamifl.gov
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