A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATIONS OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE, AT ITS APRIL 17, 2020 AND APRIL 24, 2020 MEETINGS, AND APPROVING THE USE OF CULTURAL ARTS COUNCIL ("CAC") FUND BALANCE AND CAC ENDOWMENT FUNDS (WHICH INCLUDE A COMBINED FUND BALANCE OF $4,048,873), FOR THE PURPOSE OF (1) COVERING THE FY 2020 RESORT TAX CONTRIBUTION OF $1,473,000 TO THE CAC, TO THEREBY PERMIT AVAILABLE RESORT TAX FUNDS TO BE REALLOCATED FOR OTHER RESORT TAX PURPOSES; AND (2) ESTABLISHING A "CULTURAL ARTS EMERGENCY FUND", IN THE AMOUNT OF $1,000,000, TO PROVIDE FINANCIAL ASSISTANCE TO MIAMI BEACH-BASED CULTURAL ORGANIZATIONS EXPERIENCING REVENUE LOSSES DUE TO THE COVID-19 CRISIS; FURTHER, AUTHORIZING THE ADMINISTRATION AND THE CAC TO DEVELOP THE CRITERIA AND PROCEDURES FOR THE CULTURAL ARTS EMERGENCY FUND GRANT PROGRAM, AND TO REVIEW GRANT APPLICATIONS AND MAKE ADVISORY RECOMMENDATIONS TO THE CITY COMMISSION, WITH THE FINAL GRANT AWARDS SUBJECT TO THE PRIOR APPROVAL OF THE MAYOR AND CITY COMMISSION.

The Miami Beach Cultural Arts Grant Program ("Grant Program"), originally created in 1998 as an essential component of the mission of the Miami Beach Cultural Arts Council,  is charged to develop, coordinate, and promote the arts and culture in the City of Miami Beach community.  Since the Grant Program inception, the Mayor, Commission and Cultural Arts Council ("CAC") have awarded approximately $18 million in cultural arts grants, supporting thousands of performances, exhibits, and other cultural activities in Miami Beach. The Grant Program is managed by Tourism and Culture Department.

In 2001, the City set aside 1% of the Resort Tax for a cultural arts reserve fund and those funds support only cultural affairs grants and programs and the Quality of Life Fund for North Beach, Mid-Beach and South Beach programming. Currently the 1% Resort Tax set aside is distributed as follows: 10% to CAC, 30% to Quality of Life and 60% to Transportation/Trolley operation.  

The funding to cultural arts grants and programs is divided into two (2) restricted funds, that are managed by appointed members of the Cultural Arts Council, which reviews and makes recommendations for Commission approval.  The two (2) funds, essential to the operations, quality and growth of Miami Beach cultural arts programming are as follows:

Cultural Arts Council Fund Balance

In 2014, the Cultural Arts Council recommended, to the City Commission, to create a Cultural Arts Council Fund Balance (“Fund Balance”) in the amount of $2,467,000, that is capped (providing for an annual increase for inflation). This recommendation was approved on September 10, 2014 by  Resolution No. 2015-29045. The original City Commission (Resolution No. 2014-28732)  referencing the fund balance, contained a scriber error in the fund amount referenced and was replaced by Resolution No. 2015-29045. The purpose of the Fund Balance is to set aside rainy day funds that will ensure the Cultural Affairs program operation and grants continue for a period of two (2) years, in the event of an emergency, unforeseen difficulty, trouble or need.  All funds remaining, at the end of each fiscal year, are rolled over to the following fiscal year.

Cultural Arts Council Endowment

For fiscal year 2020, all grant agreements have been executed totaling $850,000 in grants. First payments (50%) have been distributed and $425,000 for second payments remain. In addition to the grants, the Cultural Arts Council Fund includes $254,000 for administration and operational costs, $127,00 for Arts for Learning, Arts in the Park and grant submission software, and $300,000 for temporary art installations. The total budget is $1,531,000 and the 1% Resort Tax Quality of Life contribution is $1,473,000.

Due to the COVID-19 pandemic, Miami Beach arts organizations are facing unprecedented revenue losses. To date, Miami Beach based cultural organizations are collectively reporting over $3.7M in lost revenue, reflective of the first few weeks after closures. Depending on social distancing guidelines and community perceptions, it may be more than a year or more before Miami Beach institutions are able to operate at full capacity, if they survive at all. Venues such as the Colony Theatre, managed by Miami New Drama, receive 40% of their annual revenue from ticket sales. The management of Miami New Drama has estimated approximately $615,000 in lost revenue should the theatre remain closed through June 2020. To date, Miami New Drama is reporting $280,000 in lost revenue. Staff is working with each organization to track revenue losses. An overview of Miami Beach based cultural organizations reporting lost revenue may be found in Attachment 1.

The Administration suggests that should a Miami Beach Cultural COVID Relief Fund ("Relief Fund") be created, the budget should be $1 million to reflect a realistic amount that can truly support the recovery of our beloved non-profit cultural community. The Relief Fund would provide meaningful emergency grants that would mitigate and alleviate the financial and programmatic hardships created by the current COVID-19 pandemic. Funds would support administration, operations, programming, marketing, facility rentals, and contract employees.

A suggested criteria would include selecting applications from:

• Current grantees of the City of Miami Beach Cultural Arts Council (FY 2020). (This will ensure all applicants have complied with grant requirements, including 501(c)3 verification and meet eligibility requirements of Cultural Arts Council grant process);

• Grantees with proof of 1:1 match for requested amount;

• Grantees operating and located within the City of Miami Beach;

• Relief Funds need will be determined by the following:

    +evaluating demonstrated negative immediate revenue and operational impacts;

    +new or expanded needs the organization and its constituents are facing as a result of the   COVID-19 pandemic (creation of digital platforms, technologies, etc.);

    +evaluating how funding will be leveraged to provide positive long-term recovery results and benefits;

    +evaluating grantee short-term and long-term recovery plan, including how grantee is mitigating any impact COVID-19, strong board participation, and efforts to find alternative funding sources; and

    +grantee must demonstrate strong operational, fiscal and programmatic measures, plans and processes; and

• Selection of recipients and funding level will be reviewed and recommended by the CAC to the City Commission.

With respect to the Cultural Arts Council Endowment, the renovation of the Rotunda in Collins Park ($800,000), could be postponed and revisited by the City Commission at a later date.

The combined fund balances for the Cultural Arts Council total $4,048,873. As part of the FY 2020 budget balancing plan presented to the Finance & Economic Resiliency Committee on April 17, 2020, Administration recommended funding the FY 2020 budget allocation of $1,473,000 from the CAC fund balance instead of the 1% Resort Tax for Quality of Life to free that allocation up for other purposes such as supporting the trolley system or other resort tax purposes. This amount could potentially be less depending on how much the CAC actually spends during the fiscal year. The creation of a $1 million Miami Beach COVID-19 relief fund for cultural organizations would further reduce the combined fund balance. The total impact from these items would reduce the fund balance from $4,048,873 to $1,575,873 as shown in the table below.

During the April 24, 2020 Finance and Economic Resiliency Committee ("FERC") meeting, the utilization of the Balance Fund and Endowment to FY2020 and creation of a Cultural Emergency Fund was recommended.