Item Coversheet

Resolutions - C7  K




COMMISSION MEMORANDUM

TO:Honorable Mayor and Members of the City Commission 
FROM:Alina T. Hudak, City Manager 
DATE:October  13, 2021
 



SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING, IN SUBSTANTIAL FORM, THE LETTER AGREEMENT WITH THE FRIENDS OF THE BASS MUSEUM OF ART, INC., (THE FRIENDS), 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, 2022; AND FURTHER, AUTHORIZING THE CITY MANAGER AND CITY CLERK TO EXECUTE THE FINAL LETTER AGREEMENT WITH THE FRIENDS.

RECOMMENDATION

The Administration recommends approving the annual agreement between the City of Miami Beach and the Friends of the Bass Museum, Inc.     

BACKGROUND/HISTORY

The Bass Museum was established from its inception as a strong public/private partnership through a contractual agreement entered into in 1963 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     $ 512,000

FY 2010/11     $ 536,495

FY 2011/12     $ 623,391

FY 2012/13     $ 585,501

FY 2013/14     $ 651,000

FY 2014/15     $ 651,000

FY 2015/16     $ 651,000

FY 2016/17     $1,201,000*to assist with re-opening of Bass

FY 2017/18     $ 651,000

FY 2018/19     $ 884,058

FY 2019/20     $ 905,000

FY 2020/21     $ 905,000

ANALYSIS

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. In 2018, 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.

 

On July 20, 2018, the Finance and Citywide Projects Committee recommended a retroactive $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. The increase in funding recommended by FCWPC reflected an accumulation of the CPI increase since FY 2013/14.  During the 2019/20 budget process, the CPI increase was included and approved by the City Commission on September 25, 2019, resulting in an allocation of $905,000. The 2021/22 proposed annual agreement is attached here as Exhibit A and remains at an allocation of $905,000.

 

The FY 2021/22 total operating budget for the Bass Museum as presented by the Friends of the Bass is $3,989,499 (attached as Exhibit B). The City’s annual contribution of $905,000 will be used to cover the following operating costs detailed as follows:

 

Administrative Costs               $215,734

Facilities Cost                         $346,356

Permanent Collection Costs   $342,910

Total                                       $905,000

 

SUPPORTING SURVEY DATA

The Bass Museum (Museum) was established from its inception as a strong public/private partnership through a contractual agreement entered into in 1963 between the City of Miami Beach (City) and John and Johanna Bass, whereby the City accepted the gift of the art collection of John and Johanna Bass (the Collection), in exchange for making the Collection open and available to the public in a building maintained by the City (the 1963 Agreement and all subsequent amendments thereto are hereinafter referred to as the "1963 Bass Agreement")
Amount(s)/Account(s):
This amount was approved as part of the City's FY 21/22 budget process and is administered annually through the Tourism and Culture Department. 

CONCLUSION

The letter agreement with the Friends of the Bass Museum of Art, Inc. further delineates the responsibilities the Bass Museum of Art, Inc. would be required to meet in exchange for the funding.

Applicable Area

Citywide
Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? Does this item utilize G.O. Bond Funds?
No No 

Strategic Connection

Prosperity - Market and promote Miami Beach as a world class arts, culture, and quality entertainment destination.
Legislative Tracking
Tourism and Culture

ATTACHMENTS:
Description
Exhibit B FY 21-22 Bass Operating Budget
Resolution and Agreement