A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING RESOLUTION NO. 2019-30834, WHICH AUTHORIZED THE ADMINISTRATION TO NEGOTIATE AND EXECUTE AN AGREEMENT WITH MIAMI BEACH TENNIS MANAGEMENT, LLC (MBTM), PURSUANT TO REQUEST FOR PROPOSALS NO. 2019-046-WG FOR TENNIS MANAGEMENT AND OPERATIONS SERVICES AT THE CITY’S FLAMINGO TENNIS CENTER (THE RFP); THIS AMENDMENT, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER AND: (1) TERMINATING NEGOTIATIONS WITH MBTM; (2) REJECTING ALL OTHER PROPOSALS PURSUANT TO THE RFP; (3) TERMINATING THE RFP PROCESS; (4) AUTHORIZING THE CITY MANAGER TO TERMINATE THE AGREEMENT; (5) AUTHORIZING THE CITY’S PARKS AND RECREATION DEPARTMENT TO TAKE OVER THE MANAGEMENT AND OPERATION OF THE CENTER AS A PILOT PROGRAM, BEGINNING IN FEBRUARY, 2020 AND ENDING ON SEPTEMBER 30, 2020; AND (6) AUTHORIZING THE CITY MANAGER TO NEGOTIATE AGREEMENTS WITH EXISTING MBTM STAFF OR OTHER PROFESSIONALS/SERVICE PROVIDERS, AS NECESSARY, TO MAINTAIN OPERATIONS FOR FRONT DESK DUTIES, COURT MAINTENANCE, AND PROGRAMMING AT THE CENTER, SUBJECT TO THE APPROVAL OF A BUDGET AMENDMENT TO COVER SUCH PROJECTED OPERATING AND STAFFING EXPENSES, IN THE APPROXIMATE TOTAL AMOUNT OF $715,000.

The Administration recommends that the Mayor and City Commission adopt the Resolution.

The City and Miami Beach Tennis Management, LLC, (“MBTM”) entered into an agreement on July 14, 2014, to provide professional tennis management and operations services at the City’s Flamingo Park and North Shore Park tennis centers, for an initial term of three (3) years with two (2) additional one-year terms.

On July 26, 2017, the Mayor and City Commission adopted Resolution No. 2017-29935, approving Amendment No. 1 to the Agreement , providing for the removal of the North Shore Tennis Center from the scope of the Agreement and accordingly reducing the Minimum Guarantee payments due to the City (the Agreement and Amendment No. 1 shall be collectively referred to herein as the Agreement).

At the May 16, 2018 City Commission meeting, City Commission approved Amendment No. 2 to the Agreement, in part to acknowledge the renewal of the last one-year renewal option for June 1, 2018 – May 31, 2019 and to update various contractual provisions to standardize both tennis centers.

On February 13, 2019, the Mayor and City Commission approved the issuance of the Request for Proposals No. 2019-046-WG (the “RFP”) for Professional Tennis Management and Operational Services at the City’s Flamingo Park Center (the “Center”).

The Parks and Recreation Department has noted several deficiencies with MBTM, which have included check payments to the City with non-sufficient funds; financial reporting deficiencies; and other contract violations. As such, the Department issued MBTM with several Notices to Cure as follows:

·       September 5, 2019 – Violation of Sections 4.2 and 4.2.1 of the Agreement for submitting two payments to the City with non-sufficient funds;

·       October 15, 2019 – Violation of Sections 3.1, 9.3.1, 9.3.2 and 10.7 of the Agreement for securing extra courts without approval from the City to host a tournament thereby limiting court availability to the public;

·       November 26, 2019 – Violation of Sections 4.2.3 and 8.4 of the Agreement for failure to provide the City with the required financial reports on the due date and for not correcting an issue with a customer within the City’s expected timeline; and

·       December 10, 2019 – Violation of Sections 3.6 and Section 13 of the Agreement for failure to background a potential employee who was working at the Center and for bouncing a payroll check to an employee.

Additionally, the City has received several complaints and concerns from employees of MBTM, as well as from the public. The Department addressed the complaints and concerns presented by speaking with employees of MBTM as well as the public. The Department was able to substantiate some concerns such as late payroll payments to employees and bounced checks, violations of court booking procedures during peak times, overpayments to customers and raising lesson fees without receiving City approval.

The Department has also been working with the Office of the Inspector General to conduct an audit on MBTM. It is anticipated that the audit will conclude at the end of January 2020.

As a result of these issues, the City Manager recommends terminating negotiations for a new agreement with MBTM, and rescinding the award of the RFP to MBTM.  In light of the time that has expired since the adoption of Resolution No. 2019-30834 (May 8, 2019), the City Manager also recommends terminating the original RFP and rejecting all other proposals.  Furthermore, the City Manager recommends terminating the Agreement and having the Parks and Recreation Department take over the operations and management of the Flamingo Park Tennis Center as a pilot program.

The management of the Flamingo Park Tennis Center by the Department, as a pilot program, would begin in February 2020 and end on September 30, 2020. During the pilot program, the City would analyze the tennis center and make a recommendation on the best path forward.

Parks and Recreation Department staff would assume responsibility for overseeing programming, maintenance, money collection and front desk operations. As a gap measure, all current employees of MBTM (front desk and maintenance personnel, tennis instructors, etc.) would have the opportunity to retain their employment by executing agreements with the City, as independent contractors. All staff will be subject to performance evaluations, and retention will be based on need and performance. Additionally, the Administration may need to hire additional outside contractors in order to adequately staff the Center. 

The budgetary impact for the Parks and Recreation Department to assume the overall operations of the Flamingo Park Tennis Center is calculated at:

Projected operating expenses: $75,000

Projected staffing expense: $640,000

Projected revenue: $665,000

Delta: -$50,000

The Parks and Recreation Department requests amending its current budget, at a further date, to reflect up to $715,000 in projected operating and staffing expenses and $665,000 in projected revenue. The Department will work with the Budget Office to ensure proper budgeting procedures are followed.