| | | | | | | | | Resolutions - R7 I
COMMISSION MEMORANDUM |
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| | | | | | | | TO: | Honorable Mayor and Members of the City Commission | | FROM: | Jimmy L. Morales, City Manager | | DATE: | September 26, 2018 | | |
| SUBJECT: | A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING THE LETTER AGREEMENT WITH THE
FRIENDS OF THE BASS MUSEUM OF ART, INC., (THE FRIENDS) IN THE
FORM ATTACHED TO THE COMMISSION MEMORANDUM ACCOMPANYING
THIS RESOLUTION, TO MEMORIALIZE THE PARTIES' RESPECTIVE
OBLIGATIONS WITH REGARD TO CERTAIN MANAGEMENT AND OPERATION
RESPONSIBILITIES OF THE MUSEUM THROUGH SEPTEMBER 30, 2019;
AND FURTHER, AUTHORIZING THE CITY MANAGER AND CITY CLERK TO
EXECUTE THE FINAL LETTER AGREEMENT WITH THE FRIENDS, SUBJECT
TO REVIEW AND FORM APPROVAL BY THE CITY ATTORNEY.
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| | | | | | | | RECOMMENDATION
| Adopt this Resolution.
BACKGROUND
The Bass Museum was established from its inception as a strong public/private partnership through a contractual agreement entered into 51 years ago when the City accepted the gift of the art collection of John and Johanna Bass. This agreement stipulates that the City will "maintain the collection in perpetuity...provide for the exhibition of the collection, keep it open and available to the public," and provide basic funding for the maintenance and exhibition of the collection. The City fulfills this obligation by funding the operational elements of the Museum, and maintaining the building, which is a City asset. The agreement further stipulated that the Bass Museum, as an operating entity, should be overseen by a Board of Trustees with responsibility for Museum policies and procedures, as well as day-to-day management through the staff it employed. With respect to the Executive Director, the Parties acknowledge and agree that, notwithstanding any provision to the contrary in the Bass Agreement, at the request of the Friends, the City has continued to employ the Executive Director as a City employee, to accommodate the Director’s pre-existing pension and related benefits.
In addition to the City and the Board of Trustees, a third entity has existed to promote and further the mission of the Bass Museum of Art: The Friends of the Bass Museum, Inc. This private and separate 501(c) 3 organization was established in 1978 as the membership and fundraising arm of the Museum. The President of the Friends chairs the Board of Trustees. The Friends' Board of Directors served as advisory to the Trustees, advocated and raised funds for the Museum, and sponsored Museum programs, which included all special exhibitions and educational programs. The Museum's membership, education, development and marketing efforts were realized by employees of the Friends of the Bass Museum. Thus the current Museum staff consists of City employees (both classified and unclassified) and Friends employees, with substantial differences in benefits and pay scales.
The Administration began working with the Museum's staff and Boards to streamline the current governance model and to standardize employment practices. The need for a modification of the Museum's governance structure was also identified through a Strategic Planning Process and Peer Review. While the City remains fully committed to the Bass Museum and its success, both the Administration and the Museum felt that the City can continue to fulfill its contractual obligations without having actual City employees working at the Museum, while funding for the Museum may be better allocated if the Museum is able to function independent of certain City processes and contracts. To this end, two recently-vacated City positions at the Bass, the Assistant Director and Curator, have been filled as employees of the Friends. The objective is to transition all Bass Museum positions to the Friends of the Bass over time, which will allow for significant savings to the City in salaries and benefits (especially pension). Additional savings in certain operational line items have also been identified.
At the June 3, 2009, City Commission Meeting, Resolution No. 2009-27089 was approved, which authorized the transfer of $137,000 to the Friends of the Bass Museum. In addition to providing them with direct oversight and management of these operational issues, this also allows the Friends to pursue potential savings by using non-City contracts for services such as carpet cleaning or for the purchase of office supplies, for example. This action also began the process of transitioning much of the day-to-day administration and oversight to the Friends. This was an important step in moving towards increased simplification of the Museum's governance structure, which has been considered essential for the future well-being of the institution and was included in the Museum's own five-year strategic plan.
Concurrent with the above, in August 2009, the Administration, the testamentary representative of the Bass Family, and representatives of the Friends, developed a new governance model for the Museum, which included an overhaul of the existing by-laws of the Friends, culminating in reconstituting that 501(c) 3 nonprofit organization as the Bass Museum of Art, Inc. (which entity replaced the Friends as the new governing entity for the Museum).
On March 10, 2010, the City Commission adopted Resolution No. 2010-27349 amending the agreement between the City and Dennis Alan Richard (as Successor in Interest to John and Johanna Bass). This new Agreement, among other things, replaced both the existing Bass Board of Trustees and the Friends of the Bass Museum, Inc., with the Bass Museum of Art, Inc., a 501 (c)3, composed of actual stakeholders (as opposed to the then current Board of Trustees, who maintained their seats by virtue of their contractually designated positions under the 1963 Agreement). The City Manager retained membership on the new governing board, with voting power equivalent to 20% of the membership of the Board, comparable to the City Manager's representation on the previous Board of Trustees. The day-to-day responsibility to ensure the City’s contractual obligations to maintain the Collection would be handled by this new governing body through a separate management agreement with the City.
Following the June 3, 2009 resolution, funding for the Bass Museum has been appropriated through the annual budget process each year, and subsequently authorized by a resolution authorizing the Manager to enter into a letter agreement with the Bass Museum for the amount appropriated through the budget process. Resolution No. 2009-27216 was approved, authorizing the allocation of $512,000 to the Friends of the Bass Museum, to fund certain operating expenses for Fiscal Year 2009/10. The City Commission approved similar resolutions in each fiscal year, increasing each year to $651,000 in FY 2013/14.
FY 2009/10
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$ 512,000
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FY 2010/11
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$ 536,495
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FY 2011/12
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$ 623,391
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FY 2012/13
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$ 585,501
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FY 2013/14
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$ 651,000
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FY 2014/15
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$ 651,000
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FY 2015/16
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$ 651,000
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FY 2016/17
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$1,201,000* to assist with opening of Bass
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FY 2017/18
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$ 651,000
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With the exception of FY 2016/17, the City has been funding the Bass Museum at the $651,000 level annually since FY 2013/14. The Bass Museum contended that the City’s annual funding responsibility under the agreement was significantly higher than the $651,000 allocation. It was reasonable to assume that necessary funding levels have increased since 2013. The proposed $233,000 increase for the FY 18/19 Letter Agreement was calculated as a result of compounded increases using the Cost Performance Index (“CPI”) methodology for Miami-Fort Lauderdale-West Palm Beach from 2009-2018. In 2009-2010, the City paid the majority of The Bass Museum of Art salaries directly and began an annual allocation to The Bass Museum of Art to support operational and collections expenses. Since this time, all but two positions, Executive Director and Administrative Assistant, were transferred to the Friends of The Bass Museum of Art.
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| | | | | | | | ANALYSIS
| On July 20, 2018, the Finance and Citywide Projects Committee recommended a $233,000 increase for the FY 18/19 Letter Agreement with the Friends of the Bass Museum of Art, Inc. for a total allocation of $884,058.appropriated through the FY 2018/19 budget process.
As shown in the background section above, the Bass Museum funding has remained constant since FY 2013/14 at $651,000 despite inflationary increases related to maintaining and exhibiting the collection. The increase in funding recommended by FCWPC reflects the cost of living increases since FY 2013/14. The 2018/19 proposed annual agreement is attached here as Exhibit A.
The funding amounts noted above exclude salaries ($319,000), ongoing capital expenses ($701,000), Cultural Arts Council Grant ($29,750) and other internal charges ($297,000) which currently total $1,346,750 and are paid directly by the City for a total of $2,230,750 in City funding for the Bass Museum, noted as follows:
Funding
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Description
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Amount
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Capital Ongoing
Funded in FY 16/17
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Purchase of Furniture for Outdoor Café- Bass Museum Requested to delay furniture purchase pending outcome of pilot program
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$100,000
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Capital Proposed FY 18/19
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Roof Replacement
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$397,000
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Capital Proposed FY 18/19
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Freight Elevator
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$100,000
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Capital Proposed FY 18/19
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Administration Office Flooring Replacement
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$44,000
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Capital Proposed FY 18/19
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Fire Pump Replacement
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$60,000
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FY 18/19 Total Capital Ongoing and Proposed
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$701,000
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Operational
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Proposed Internal Service Charges for Central Services, Property Management, Fleet, Insurance and IT
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$297,000
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Operational
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Letter Agreement- Management and Operation of Bass Museum
Proposed $233,000 increase is a result of compounded increases in the CPI relating to the period from 2009-2018.
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$884,000
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Operational
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Cultural Arts Council Grant
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$29,750
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Operational
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Salaries (Executive Director/Administrative Assistant)
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$319,000
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FY 18/19 Proposed Operational
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$1,529,750
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PROPOSED FY 18/19TOTAL
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$2,230,750
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The total operating budget for the Bass Museum as presented by the Friends of the Bass is $3,328,485 excluding the direct City payments (attached as Exhibit B).
The City’s annual contribution of $884,058 will be used to cover the following operating costs detailed as follows:
Administrative Costs
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$ 414,088
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Facilities Costs
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$ 222,685
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Permanent Collection Costs
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$ 244,035
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Marketing Costs
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$ 3,250
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Total
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$ 884,058
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Further, the letter agreement with the Friends of the Bass Museum of Art, Inc. delineates the responsibilities the Bass Museum of Art, Inc. would be required to meet in exchange for the funding.
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| | | | | | | | CONCLUSION
| The Administration recommends approving the annual agreement with between the City and the Friends of the Bass Museum, Inc.
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| | | | | | | | KEY INTENDED OUTCOMES SUPPORTED Enhance Cultural and Recreational Activities |
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| | | | | | | | Legislative Tracking Tourism, Culture and Economic Development |
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