Loading...
11/19/2011 Audit 1 1 1 1 1 AUDIT REPORT OF KEY WEST 1 INTERNATIONAL AIRPORT REVENUE: ON -SITE CAR RENTAL AGENCIES HERTZ AVIS BUDGET 1 DOLLAR THRIFTY 1 1 November 17, 2011 1 1 ...� Vitt is GOUNTy 14. , N cfp 1 • . &;\ ' C� 1 ti c • q ��, , E CouNI * 1 1 Prepared by: Internal Audit Department Clerk of the Circuit Court Danny L. Kolhage, Clerk Monroe County, Florida 1 1 1 AUDIT REPORT OF KWIA REVENUE: ON -SITE CAR RENTAL AGENCIES 1 TABLE OF CONTENTS 1 P- age I. SCOPE AND OBJECTIVES 1 1 II. METHODOLOGY 1 III. BACKGROUND 2 1 W. CONCLUSIONS 3 V. AUDIT FINDINGS A. Contractual Compliance 1. Definition of gross receipts for the on -site car rental agencies is too narrow. 2. 4 -7 2. Time & mileage re- allocation reduces concession revenue by $15,376.11. 8 -10 1 B. Contract items 1. There is not an active contract with Avis Rent A Car System, Inc. 11 -13 2. Three (3) of the five (5) on -site car rental agency contracts do not state a due or 1 a late date for the monthly rental space payments. 14 -16 3. Four (4) out of the five (5) on -site car rental agency contracts do not state a due or a late date for the monthly concession payments. 17 -19 1 4. The KWIA yearly rate adjustment letters for the on -site car rental agencies are not being transmitted in a timely manner. 20 -21 5. KWIA has been using an incorrect time period for Thrifty's on -site rental fees. 22 1 C. Billing 1. KWIA's yearly adjustment letter concerning on -site location rates resulted in i $1,385.82 being under- billed. 23 -24 2. KWIA contracts do not include FL 7.5% tax on all of the fees that make up the rental charges for the on -site car rental agencies. 25 D. Written policies and procedures. 26 -27 E. Insurance, performance bond 1 1. Budget, Thrifty, and Avis car rental agencies do not have a separate /individual performance bond for KWIA. 28 -29 2. Thrifty and Avis car rental agency may not have adequate 1 insurance coverage. 30 -31 1 1 1 1 VI. EXHIBITS A. February 13, 2001 Airports Revenue Audit memo. B. May 19, 2010, Budget Rental Car Agreement Marathon airport. C. May 19, 2010, Avis Rental Car Agreement Marathon Airport. D. Summary of Excluded Accounts. E. "Avoiding Ambiguities in Concession Agreements" article. F. Gross revenue inclusions & exclusions. G. Northwest FL Regional monthly certified reports. H. Louisville statement and reports. I. Hertz February 21, 2001 Agreement. J. Avis September 5, 1986 Agreement. K. 2001 Internal Audit T &M allocation. L. Avis 06/20/01 lease amendment. M. Avis June 16, 2004 KWIA. N. Hertz March 16, 2005 Lease Extension. O. Budget 05/17/2000 Concession Agreement. P. Dollar 07/07/1987 Contract. Q. Dollar rate increase letters. R. Thrifty rate increase letters. 1 S. DTG 02/18/04 Rental Car Concession Amendment. T. Dollar 07/15/2003 Rental Car Concession Amendment. U. Dollar 2010 rate adjustment letter comparison. V. FL DOR Technical Advisement. W. KWIA Hertz credit approval letters. X. Thrifty October 15, 2003 Amendment. Y. DTG performance bond. Z. Avis Performance Bond KWIA. AA. Avis name change. 1 BB. Tampa's Avis Budget car rental Agreement. CC. DTG COI. DD. Avis COI KWIA. 1 VII. AUDITEE RESPONSE 1 A. County Administrator's response. B. Avis car rental's response. C. Clerk's Finance Department response. 1 1 1 1 1 I. SCOPE AND OBJECTIVES A. At the request of the Monroe County Clerk of the Circuit Court, the Internal Audit Depaiunent has completed an audit of the on -site car rental agencies for the Key West International Airport (KWIA). B. The audit objectives were to determine whether the tenants adhered to contract provisions, correctly reported and timely remitted fees, and complied with insurance and ' bonding requirements. The audit also reviewed whether Monroe County properly accounted for those receipts. II. METHODOLOGY A. We interviewed the following personnel during the audit to obtain information about Airport tenant contracts: 1. The Director of Airports 2. The KWIA Business Administrator 3. The KWIA Senior Administrator Assistant 4. The Assistant County Attorney 5. The Clerk's Finance Department personnel 6. Rental car financial contacts 7. Various airport Internal Auditors B. The Internal Audit Department examined the following documents: 1. Tenant contracts 2. Rental agreements 3. Various tenant financial statements 4. Past audit reports 5. Various KWIA correspondence 6. Checks paid to KWIA 1 C. The Internal Audit Department scheduled contract payments, recomputed fees, and reviewed payments from the car rental agencies. 1 D. We examined documentation of compliance with insurance conditions. E. We examined documentation of compliance with bonding requirements. F. We obtained previous audit work papers and looked for follow up items. E 1 1 III. BACKGROUND A. On -site car rental agencies: KWIA has five (5) on -site car rental agencies, Dollar, Thrifty, Avis, Budget, and Hertz, . which are controlled by three (3) separate corporations. Dollar and Thrifty are both part of the DTG Corporation (Dollar Thrifty Automotive Group, Inc), while Avis and Budget fall under the Avis Budget group corporate umbrella and Hertz is part of the Hertz Group. The contract for each of the on -site car rental agencies are all similar in terms and prevents Monroe County from offering more favorable terms to other rental car agencies. These contracts require the on -site rental car agencies to pay a monthly rent for terminal space based upon the square footage. These contracts also exact a monthly concession fee, which is the greater of a negotiated 1 minimum payment or 10% of the gross revenue. Gross receipts are contractually defined as the total charges for Time, Mileage, and Personal Accident Insurance payable by customers for vehicles contracted for, rented, or delivered at the airport. These contracts also allow for 30 parking slots for each of the five (5) on -site car rental ' agencies. B. Concession agreements: A variety of concessionaires have contracts with Monroe County to conduct business at the airport. These include car rental, gift shops, restaurants and lounges, fixed base operators, bus service, parking, and advertising displays. Airport Management is responsible for initiating, implementation, renewal, amendment and 1 termination of concessionaire contracts with the approval of the Board of County Commissioners. Ensuring compliance with the terms of the contracts is the responsibility of the contract manager. 1 1 1 1 2 1 IV. Audit Conclusions Al. The definition of gross receipts for the on -site car rental agencies is too narrow. The contracts define gross receipts to include charges for net Time, Mileage, and Personal Accident • Insurance after discounts shown on the rental agreement. Potentially, KWIA could have generated $2,067,222.89 in additional concession revenue from the current five (5) on -site car rental agencies if the contracts had been changed. 1 A2. Monroe County's contracts with on -site rental car companies define gross receipts to include p :� p charges for net time, mileage, and personal accident insurance after discounts shown on the rental 1 agreement. Hertz and Avis are re- allocating /reducing a part of the Time & Mileage fee to other none concessionable accounts resulting in $15,376.11 in lost revenue to KWIA from January 2008 — April /May 2011. B 1. Avis car rental agency do g y es not have an active contract with KWIA. B2. Three (3) of the five (5) on -site car rental agency contracts do not state a due or a late date for the monthly rental space payments. 1 B3. Four (4) out of the five (5) on -site car rental agency contracts do not state a due or a late date for the monthly concession payments. 1 B4. The KWIA yearly rate adjustment letters for the on -site car rental agencies are not being transmitted in a timely manner. B5. KWIA has been using an incorrect time period for Thrifty's on -site rental fees. C1. KWIA's yearly adjustment letter concerning on -site location rates resulted in $1,385.82 being 1 under- billed. C2. KWIA contracts do not include FL 7.5% tax on the capital improvement portion of the rental charges for the on -site car rental agencies. D. Written policies and procedures are not fully documented and need improvement. El. Budget, Thrifty, and Avis car rental agencies do not have g tS' g e separate /individual performance bonds for KWIA. E2. Thrifty and Avis car rental agencies may not have ty g y e adequate insurance coverage. Thrifty car rental is not listed as an insured on the certificate of insurance. The certificate of insurance has "DTG Operations, Inc. Dba Dollar Rent a car" listed as the insured. The Avis certificate of insurance has "Avis Rent A Car System, LLC." as insured versus Avis Rent A Car System, Inc. per the contract. 1 3 i c V. AUDIT FINDINGS A. Contractual Compliance 1. Definition of gross receipts for the on -site car rental agencies is too narrow. I Finding: Monroe County's contracts with the on -site rental agencies define gross receipts to include "charges for net time, mileage, and personal accident insurance,... (after any discount specifically shown on the car rental agreement)..." Car rental agreements have many categories of charges besides Time & Mileage and Personal Accident Insurance. Monroe County doesn't receive 10% of true gross I receipts as a result of KWIA defining gross receipts so narrowly. Potentially, KWIA could have generated $2,067,222.89 additional concession revenue from the current on -site car rental agencies if the contracts had been changed. 1 This narrow definition of oss receipts resulted in the on -site car rental agencies excluding $r p g dung vanous revenue accounts from their computation of the monthly commission payment to KWIA. Internal Audit identified this as an issue in reports issued in 2001 and 2009. I Internal Audit issued an Airport Revenue Audit report on February 23, 2001 identifying the issue of having a narrow definition of gross receipts and the County Administrator's response was "The next lease will include a clearer definition of gross revenues for the purpose of calculating the airport 1 access fee." See Exhibit A — February 13, 2001 Airports Revenue Audit memo. I Estimated Additional Potential Revenue Additional # Average I Contract Contract Number of of years: Additional Estimated Effective expiration years per per 10/01/11 Potential Potential Agency date date contract expiration date Revenue Revenue I Dollar 7/15/2003 06/30/14 06/30/14 10.96 26,124.20 286,311.16 Thrifty 10/15/2003 10.71 12,311.43 131,827.52 Hertz 3/16/2005 04/20/14 9.10 49,883.03 453,693.16 I Avis 6/20/2001 06/30/04 ** 3.03 7.25 50,389.55 518,036.25 Budget 6/16/2004 06/15/19 15.00 45,171.42 677,354.80 I 10/01/2011 ** Avis month to month, still using latest contract. TOTAL 2,067,222.89 The above estimate is based upon the new definition of gross revenue as written in the Avis and I Budget Marathon contracts for the Marathon Airport. The County Attorney's office has reworded the Avis and Budget on -site car rental agency contracts, and both are dated May 19, 2010 for the Marathon Airport. The County Attorney changed the definition of gross "receipts" to gross I "revenues ", expanded the list of items included in /as gross revenue. The contract also states in section 4 that "It is the intent of the County that the definition of gross revenues be construed as I broadly as permitted by law and that the only exclusions to the definition of gross revenues shall be 4 1 1 I state, federal and local taxes." See Exhibit B — May 19, 2010, Budget Rental Car A Y � g Agreement Marathon Airport and See Exhibit C —May 19, 2010, Avis Rental Car Agreement Marathon Airport. 1 Other airports also have a broader definition of gross receipts that include a more extensive listing of accounts and definitions of gross receipts to be included and excluded. We have included an I example of Tampa's 2010 agreement with Avis Budget Car Rental, LLC Section 6.5 Definition of Gross Receipts. See Exhibit BB — Tampa's Avis Budget car rental Agreement. 1 The numbers in the table above are based upon the actual accounts and dollar amount per car rental agency for 2008 and 2009. We determined the average additional potential revenue based upon I those two years and applied it to the specific car rental agency then to each of the latest contracts. Since Avis does not have a current contract, we used the latest contract's effective date and extended the expiration date to October 1, 2011. I Internal Audit created a detailed summary for each of the five (5) car rental agencies listing the g g account names and amounts that had been excluded due to the narrow definition of gross receipts 1 per rental car agency for 2008 - 2010, and 2008 - 2011 for Hertz. See Exhibit D — Summary of Excluded Accounts. Several examples of accounts that were excluded from the gross revenue I calculations by the rental car agencies are; additional driver fees, drop charges, rental extensions, and underage driver fees. I We believe that this is a reasonable estimate since it is; based upon the specific car rental entity and their dollar amounts, there is no off -set /addition for interest lost on revenue (Time Value of I Money), no CPI effect added /deleted, plus the 2008 — 2009 numbers used fall in the mid -point of the active contracts in place, which run from 2001 to 2019. I Internal Audit contacted a professional organization, the Association of Airport Internal Auditors (AAIA) and obtained information concerning revenue from their on -site car rental agencies and contracts. We were able to obtain an article written by Ricks Shields CPA, CFE that was published 1 in the Airport Magazine December /January 2008 issue titled "Avoiding Ambiguities in Concession Agreements ". See Exhibit E — "Avoiding Ambiguities in Concession Agreements" article. This I article is an overview of various items to be aware of, specifically concerning contracts with airports and concessions. Mr. Shields also shared with us a much more detailed outline with suggestions specifically tailored for car rental agencies at an airport and suggested wording for exclusions and 1 inclusions of gross revenues. "See Exhibit F — Gross revenue inclusions & exclusions. The following airports also have a broader definition of gross receipts which is evident by their I certified statements. Northwest Florida Regional Airport requires a monthly certified statement of gross receipts which displays individual accounts such as insurances, fuel, other drivers, concession I recovery fees, cell phones, ski racks, child seats and navigation equipment. See Exhibit G — Northwest FL Regional monthly certified reports. The certified statement also includes bank account information if the payment is made electronically. Another example of a certified statement 5 1 1 is from Louisville Regional ort, which includes a list of required �P q ed reports. See Exhibit H Louisville statement and reports. 1 ' Recommendation(s): 1. We recommend that Airport Management determine the best way to address the contractual definition of the monthly commission payments, be it via extensive inclusions, exclusions, and ensure that the contracts are amended as needed. 2. We recommend that Airport Management require a certified detailed gross revenue report from 1 the concessionaire that contains the account name and dollar amount to ensure that the gross revenue calculation includes all required line items. Refer to exhibits "G" and "H" for an example. 1 County Administrator's Response: We concur with these recommendations, as we do with all the recommendations of this audit. The definition of gross revenue, as the auditors have pointed out, go back to the original agreements of 1986. This time frame, of course, was well before the internet and our more modern, electronic way of living. No one at that point in time could have envisioned that car rental agencies would ' have been charging for internet service, GPS, XM satellite ratio, etc. etc. As an editorial note, one wonders if the car rental agencies will start charging extra for the air in the tires. However, if they do, we will be asking for our 10% of that charge. ' The airport cannot recall this issue when it was brought up in 2001, but when it was brought p ought to our attention in 2009, we made the appropriate changes to the rental car contracts as they expired, ' specifically at Marathon Airport. In 2003/2004, the emphasis was elsewhere. Avis and Dollar both had ready car areas that had ' recently passed the 15 year leasehold mark, and they became the property of the airport. At this time, their rental amounts increased nearly 800 per cent: from $6,886 per year to $53,472 per year ' for Dollar, and from $8,820 per year to $63,720 per year for Avis. In addition to that, after we obtained ownership of the property, we found that more than ' $1,000,000 of capital improvements would have to be made to those facilities. So, we entered into agreements to continue to collect the increased rental amount, AND put the burden of the capital improvements on the rental car agencies themselves. This resulted in $1,250,000 of capital ' improvements being made to our property for which the Airport paid absolutely nothing. We also charged the 3 rental car agencies that did not have separate ready -car facilities on site (Thrifty, Budget, and Hertz) each an additional $30,000 per year, which resulted in a total of $90,000 of additional revenue per year, which is still being collected today. 1 6 1 1 I So, while we did not choose, at that point in time, to expand the definition of `gross revenue' (although I must admit I don't recall if that was even a consideration or not), we did receive $1,250,000 of capital improvements, plus $90,000 per year for the last 7 years (totaling $630,000), 1 plus the increased rental from 2001 forward for the ready -car sites, as detailed in the table below. 1 AGENCY original amt increased amt add'I per year # of years total add'I 1 Dollar 6,886.00 53,472.00 46,586.00 10 465,860.00 Avis 8,820.00 63,720.00 54,900.00 10 549,000.00 I Hertz - - 30,000.00 7 210,000.00 Budget 30,000.00 7 210,000.00 Thrifty - - 30,000.00 7 210,000.00 I RENTAL INCREASE 1,644,860.00 CAPITAL IMPROVEMENTS 1,250,000.00 1 TOTAL VALUE OF RENTAL INCREASES + CAPITAL IMPROVEMENTS 2,894,860.00 1 1 Perhaps we should have paid closer attention to the 2001 audit comments and tried for the additional $2,067,450.36 in increased fees, as the audit suggests. But since we had just increased fees I for $2,894,860 (plus CPI), by going in this direction, we netted significantly more. For example, the Avis service facility amount is now $77,067 per year, and the Dollar service facility is now $65,629, due to the CPI increases, which is not reflected in the table above. 1 However, that was then, and this is now, and the time is right to re- examine this issue, especially since some of those leaseholds will be coming up in the next 2 -3 years. 1 1 1 1 1 7 1 I A. Contractual Compliance 2. Time & Mileage re- allocation reduces concession revenue by $15,376.11. Finding: I Monroe County's rental car contracts Section 4. Definition of Gross receipts includes "charges for net time, mileage, and personal accident insurance,... (after any discount specifically shown on the car rental agreement)..." See Exhibit I — Hertz February 21, 2001 Agreement and Exhibit J — Avis 1 September 5, 1986 Agreement. 1 Based upon the information supplied by Hertz car rental, Hertz has underpaid KWIA $5,053.19 from January 2008 to April 2011 due to the `bundling' of Liability Insurance Supplement (LIS). In this case, Hertz bundles or allocates an amount of money from the Time & Mileage fee and transfers I it to LIS since the rental agreement is for a flat rate and LIS coverage is included, but not broken out on the rental agreement. 1 Below table summarizes the LIS costs that Hertz allocated from Time & Mileage and placed into the LIS unbundled account and excluded from the monthly commission payments to KWIA. 1 Hertz allocated from Time & Mileage 1 2011 2008 2009 2010 (Jan - April) January 1,190.35 1,807.90 2,139.05 1,279.85 1 February 1,047.15 635.45 1,494.65 1,467.80 March 1,736.30 1,038.20 1,879.50 787.60 April 1,548.35 1,109.80 2,076.40 2,595.50 I May 2,174.85 1,378.30 1,745.25 June 644.40 510.15 483.30 1 July 930.80 1,002.40 1,145.60 August 1,602.05 1,423.05 1,691.55 September 680.20 868.15 429.60 I October 814.45 1,038.20 993.45 November 993.45 1,074.00 1,879.50 December 859.20 1315.65 1,020.30 1 TOTAL per year 14,221.55 13,201.25 16,978.15 6,130.75 1 10% commission 1,422.16 1,320.13 1,697.82 613.08 Total Due $5,053.19 1 Based upon the information supplied by As car rental, As has underpaid KWIA $10,322.92 from January 2008 to May 2011 due to the re- allocation of amounts from the Time and Mileage account 1 8 1 to the Avis Loss Damage Waiver (LDW) insurance account. The Time g (I- � and Mileage account is included in the computation of the monthly concession payments, while the LDW is not. The table below summarizes the LDW insurance costs that Avis allocated from the Time and Mileage account, transferred to the LDW account and excluded from the monthly commission payments to KWIA. 1 Avis allocated from Time & Mileage 2011 ' 2008 2009 2010 (Jan - May) January 2,090.00 1,430.00 1,563.40 2,240.00 February 4,920.10 1,660.00 2,520.00 2,350.00 ' March 3,710.00 2,310.00 2,710.00 2,860.00 April 5,213.95 3,010.00 1,940.00 2,570.00 May 4,200.00 2,733.95 1,626.00 2368.00 June 4,280.00 3,070.00 1,200.00 July 4,150.00 1,320.00 2,550.00 ' August 4,090.00 4,090.00 1,630.00 September 3,260.80 1,430.00 1,610.00 October 2,663.00 1,810.00 1,600.00 November 2,140.00 1,410.00 1,810.00 December 2 1 1 TOTAL per year 42,797.85 25,483.95 22,559.40 12,388.00 10% commission 4,279.79 2,548.40 2,255.94 1,238.80 1 Total Due $10,322.92 Internal Audit issued a report February 23, 2001, identifying a similar finding. The Avis and Hertz rent a car agencies were both allocating money from the Time & Mileage (a concessionable account) and transferring it to LDW (a non - concessionable account). Due to this allocation from Time and I Mileage to LDW, it cost KWIA $306.20 for February 2000 to Avis in lost revenue and $3,674.40 for a one (1) year period to Hertz in lost revenue. See Exhibit K — 2001 Internal Audit T &M allocation. ' The current audit shows that Avis is still allocating funds from Time & Mileage to LDW as noted in above table. The current audit shows that there was $10,322.92 KWIA lost in revenue due to this allocation from January 2008 — April 2011. The current audit shows that Hertz has corrected this allocation from Time & Mileage to LDW. The current audit shows that Hertz is including the allocated LDW costs in the 10% concession payments to KWIA. The current audit shows that Hertz is not including the allocation from Time & Mileage to LIS. 1 9 1 1 Recommendation(s): 1. We recommend that Airport Management should collect the $10,322.92 balance due from Avis and the $5,053.19 due from Hertz, and pursue the additional balance due after the audit. 2. We recommend that Airport Management pursue Avis for further LDW funds, other than the ones identified above since the error was identified in 2001 and has not been corrected in the last ten (10) years. 1 3. We recommend that Airport Management ensures that the car rental agreements include penalties for late payments. The late fee penalty should be high enough to reduce any incentive for delaying payment and penalties should be promptly assessed. 4. We recommend that Airport Management should monitor compliance with contractual terms as a matter of policy. 1 County Administrator's Response: ' 1. We concur with these recommendations, and will turn these issues over to legal staff to collect the amounts owed. 2. We concur with these recommendations, and will turn these issues over to legal staff to collect ' the amounts owed. 3. We concur; we will have legal staff draft language to charge penalties for late payments. 4. We concur; we now have adequate staff to accomplish this. Hertz car rental's Response: No response. Avis car rental's Response: I have an issue with the findings because our K records represent the reclassification of revenue relating to our packages sold to our customers. These K records are reclassifying the LDW portion of the package sold from T &M where it is originally coded in either an A or B transaction and moving the LDW portion of the package to the LDW column where it truly should reside as it is LDW revenue and not T &M revenue. 10 1 1 B. Contract items 1. There is not an active contract with Avis Rent A Car System, Inc. 1 Finding: The original lease with Avis car rental agency was effective September 5, 1986 and covered the on- site counter space rented and the cost per square foot. It also required that Avis pay KWIA 10% of the gross revenues resulting from the rental of cars. See Exhibit J — Avis September 5, 1986 agreement. On June 20, 2001 the County and Avis entered into a lease amendment that extended the original (September 5, 1986) lease to June 30, 2004. See Exhibit L — Avis 06/20/01 lease amendment. There are no contracts or addendums effective after June 30, 2004 for Avis car rental agency. ' Nor is there an active contract for Avis's Service Facility. Avis uses the Service Facility to maintain, service, clean their rental fleet and are renting space per square foot on KWIA. On June 20, 2001 the County and Avis entered into a lease amendment that extended the Avis Service Facility (September 5, 1986) lease to June 30, 2004. See Exhibit L — Avis 06/20/01 lease amendment. There are no contracts or addendums effective after June 30, 2004 for the Avis 1 Service Facility. The Service Facility lease and the original lease with Avis both have the same effective date of ' September 5, 1986 and are both affected by the June 20, 2001 lease amendment (extension of the contract to June 30, 2004). ' Avis and the County have a lease addendum effective June 16, 2004 that only affected the original lease, which are the on -site counter space and the payment of 10% of the gross revenues to KWIA for concessions fees resulting from the rental of cars. See Exhibit M — Avis June 16, 2004 KWIA. ' This addendum allows for a one (1) year extension for every $50,000 Avis spent on capital improvements and Avis must supply satisfactory evidence to the KWIA Director for the total spent on capital improvements; then the KWIA Director shall certify in writing the additional ' number of years that the lease will be extended to both Avis and Budget. The contract also stipulates that these capital improvements must be completed within 24 months from the effective date of the addendum (June16, 2004). Internal Audit was unable to locate evidence of a contract, addendum, or agreement between the County and Avis or Budget, concerning the extension of the lease agreement based upon ' expenditures by Avis for capital improvements. Based upon the capital improvements outlined in the contract, Avis and Budget can potentially extend their contracts by 10 — 15 years ($500,000 - $750,000). Assuming that there was $750,000 in capital improvements that was reviewed by the ' KWIA Director and that the work was completed within the time period, Avis's new contract would be from June 30, 2004 — June 29, 2019. Budget's extension would be from June 16, 2019 — June 15, 2034. 1 KWIA could potentially generate an estimated $1,433,080 in additional revenue if they extend the Avis and Budget leases by an additional 15 years and address the definition of gross receipts. 11 1 Avis and Budget Estimated Additional Potential Revenue Number of Contract Contract years per Average Estimated Lost Agency Effective date expiration date contract Yearly Loss revenue Avis 06/30/04 06/29/19 15.00 50,389.55 755,601.75 Budget 06/15/19 06/14/34 15.00 45,171.42 677,478.47 TOTAL 1,433,080.22 The above estimate is based upon the new definition of gross revenue as written in the Avis and ' Budget contracts for the Marathon Airport. The numbers in the table above are based upon the actual accounts and dollar amount per Avis and Budget 2008 and 2009. We determined the average additional potential revenue based upon those two years and specifically applied it to Avis or Budget car rental agency then to each of the latest contracts. Since Avis does not have a current contract, we used the latest contract's effective date. If the Avis contract date is later /after the 06/30/04 used in the table above, then the estimated potential revenue will be an additional $50,389.55 per year. See Exhibit B —May 19, 2010, Budget Rental Car Agreement Marathon ' Airport and See Exhibit C —May 19, 2010, Avis Rental Car Agreement Marathon Airport. ' Internal audit was unable to locate evidence that the KWIA Director reviewed the work completed by Avis for capital improvements. Nor were we able to locate written documentation from KWIA to Avis documenting the number of years that the Avis and Budget contracts were to be extended. 1 Internal Audit performed a brief review of the various receipts for capital improvements that show that the bulk of the work occurred after the contractual completion deadline of 24 months. The effective date of the addendum is June 16, 2004 which means the completion date would be June 15, 2006. Avis submitted the first payment application in January 2007 for $31,325 which a portion of the work occurred after the contractual deadline. To date, Internal Audit is unaware of ' an extension awarded by KWIA to Avis for completion of capital improvement work. Since June 30, 2004 Avis has not had a valid /active contract with the County. They have been ' going month by month for the rental of on -site counter space at the airport, the payment of the 10% of the gross revenues to KWIA for /as concession fees, and the use of the Service Facility. 1 Recommendation(s): 1. We recommend that Airport Management ensures that the County enters into a contractual ' agreement with Avis covering the rental of on -site counter space, the 10% concession fee for the rental of cars, and the service facility. 2. We recommend that Airport Management ensures that the issue of gross revenues and the ' definition of gross receipts (Finding #A1) are addressed. The need for a due and past due date for rental space fees and concession payments (Findings #B2 and #B3). The addition of a late fee and penalties (Finding #B2 and #B3, recommendation #1 and #2). ' 3. We recommend that Airport Management consider setting up the rental car concession payments as EFT or to have the checks directly mailed to the Clerk's Finance Department to ensure the timeliness of the payments. 12 1 4. We recommend that Airport Management consider limitin g future contracts to shorter time periods, not 15 years. County Administrator's Response: 1 1. After checking with legal staff, we are told that we do have a lease agreement with Avis; however, it needs to be amended as soon as possible to reflect the capital improvements that ' they have made on their service facility and to establish a termination date for their franchise agreement. Without these amendments, we are told that the agreement in place basically serves as a month -to -month contract. ' 2. We concur; we will have the new gross revenue provisions in this lease, as well as any future new leases or addenda. 3. We strongly concur with setting up rental car payments as EFT payments. However, before we 1 would agree to having all the checks being sent directly to the Clerk's Finance Department, we would have to meet with the Finance Department to review their procedures to insure that we would be informed of the receipt of funds, along with the dates they arrive, especially if the Airport is going to be charged for the responsibility of monitoring such payments. 4. We will consider limiting contracts to shorter time frames. However, since capital improvements are often involved (as they have been in the Dollar and Avis facilities, and with the new Hertz /Teen Center facility), it is difficult to limit these agreements to short term contracts, especially when large capital investments are required. 1 1 1 1 1 1 1 1 13 1 B. Contract Items 2. Three (3) of the five (5) on -site car rental agency contracts do not state a due or a late ' date for the monthly rental space payments. Finding: Three (3) out of the five (5) on -site car - rental agency contracts with Monroe County do not state a due or a late date for the monthly rental payments. According to three (3) out of the five (5) 1 contracts for the on -site car rental agencies, their contracts, addendums, or lease extensions state the rental rate per square foot but do not state a payment due date. Dollar's 01/03/1989 Addendum ' and Thrifty's 10/15/03 amendment were the only agreements that Internal Audit was able to locate a rental payment due date, which was the 15t day of each month. ' Below is a summary of the five (5) on -site car rental agencies that Internal Audit was able to locate from the various contracts. 1 Hertz car rental agency's 03/16/2005 Lease Extension Section 3 "Rental and Fees" parts (a) Counter Space and part (b) Office Space discuss the rate to be charged per square foot, but ' neither has a payment due date. Section 3(d) "Concession fees" of the 03/16/2005 Lease Extension describes a monthly $2,500 payment to KWIA for capital improvements be paid by the 1 of each month. This monthly payment and due date specifically concerns capital 1 improvements, not Counter or Office space. Section 11(a) "Lessee's Obligations" of the 02/21/2001 contract is the only other place that Internal Audit identified where the ' contracts discuss payments, but it did not have a specific due date. See Exhibit I — Hertz 02/21/2001 Contract and Exhibit N — Hertz 03/16/2005 Lease Extension. ' Avis car rental agency's 09/05/1986 Agreement Section 3(a) "Counter rental" concerns the rental rate per square foot, but does not have a due date. Section 14(a) "Lessee's Obligations" of the 09/05/1986 contract is the only other place that Internal Audit ' identified where the contracts discuss payments, but did not have a specific due date. Nor did Internal Audit note an addendum, amendment or lease extension to the 09/05/1986 ' Agreement that included a due date on the rental space payments. See Exhibit J — Avis 09 /05 / 1986 Agreement. 1 Budget car rental agency's 05/17/2000 Concession Agreement Section 3(a) Counter and part (b) office discuss the rate to be charged per square foot, but neither has a payment due ' date. Section 11(a) "Lessee's Obligations" of the 05/17/2000 contract is the only other place that Internal Audit identified where the contracts discuss payments, but did not have a specific due date. Nor did Internal Audit note an addendum, amendment or lease extension to the 05/17/2000 Concession Agreement that included a due date on the rental space payments. See Exhibit 0 — Budget 05/17/2000 Concession Agreement. 14 1 1 s[ The following table reflects the average number of days (after /before the 1 day of the month) that the rental car's rental payments were recorded in the financial records of the County. The recorded 1 date can be affected by things such as the issue date of the check, the time the check spends in the car rental agency's mailroom, the time it takes to deliver the check to KWIA, the time it spends in I KWIA being reviewed, the time for the check to go from KWIA to the Clerk's Office. This table is based upon the County's financial records and the recorded date reflected within it. 1 Rental Space Payments Recorded: Average # of days after the 1s` day of the month Fiscal Fiscal Fiscal Fiscal 2011 2008 2009 2010 (Sept '10 —March '11) I Dollar 1 day after 2 days after 3 days after 3 days after Thrifty 1 day after 2 days after 3 days after 3 days after Avis 1 day before 4 days before 3 days before 1 day before 1 Budget 1 day before 4 days before 2 days before 1 day before Hertz 4 days after 4 days after 6 days after * 4 days after 1 * Note includes the fact that the Hertz June 2010 rental payment took 38 days to be booked. The June 2010 payment was not issued until July 1, 2010. I This finding concerns the fact that three (3) out of the five (5) contracts for the on -site car rental agencies do not state a due or late date for the monthly rental payments. The two (2) contracts, Dollar and Thrifty, that do contain a due date has a due date of the 1 s day of each month. I Internal Audit roduced the above table to show, or measure how many days after or before the 1S` p � Y Y 1 day of the month that the rental payments are actually being recorded by the County. In this case, the table shows that on the average, that the rental payment dates are being recorded in a timely manner. 1 Recommendation(s): 1. We recommend that Airport Management ensure that the amendments to the Hertz, Avis, and I Budget car rental contracts reflect a specific due date for the monthly rental space payments. 2. We recommend that Airport Management ensure that the amendments to the Hertz, Avis, and I Budget car rental contracts include penalties for late payments for the monthly rental space. The late fee penalty should be high enough to reduce any incentive for delaying payment and penalties should be promptly assessed. 1 3. We recommend that Airport Management consider setting up the rental car concession payments as EFT or to have the checks directly mailed to the Clerk's Finance Department to 0 ensure the timeliness of the payments. County Administrator's Response: IMP 1. We concur. We will ask legal staff to include such language in future contracts and contract amendments. 1 15 i 1 2. We concur. We will ask legal staff to include such language in future contracts and contract amendments. 1 3. We strongly concur with setting up rental car rental space (along with concession) payments as EFT payments. However, before we would agree to having all the checks being sent directly to I the Clerk's Finance Department, we would have to meet with the Finance Department to review their procedures to insure that we would be informed of the receipt of funds, along with the dates they arrive, especially if the Airport is going to be charged for the responsibility of 1 monitoring such payments. 1 1 1 1 1 1 1 1 1 1 1 1 1 16 L . B. Contract items 3. Four (4) out of the five (5) on -site car rental agency contracts do not state a due or a late 1 date for the monthly concession payments. Finding: I Four (4) out of the five (5) on -site car - rental agency contracts with Monroe County do not state a due or a late date for the monthly concession payments. Their "Concession fee" is 10% of the prior 1 month's gross receipts. Internal Audit was unable to locate a specific due date within the contracts concerning the concession payments. 1 Thrifty's 10/15/03 amendment is the only contract that has a due date for the concession payments. The amendment's Section 2 states the following, "DTG must pay the County a franchise fee of 10% I of all gross Thrifty sales, payable by the 30th of each month for the gross sales of the prior month..." 1 Below is a summary of the five (5) on -site car rental agencies that Internal Audit was able to locate from the various contracts. 1 Hertz car rental agency's 02/21/2001 contract Section 3(d) addresses the "Concession fee" and it being 10% of the prior month's gross receipts, but does not indicate a due date. I Section 11(a) "Lessee's Obligations" of the same contract is the only other place that Internal Audit identified where the contracts discuss payments, but it did not have a specific due date stated. Refer to Exhibit I — Hertz 02/21/2001 Contract. I Dollar car rental agency's 07/07/1987 contract Section 3(c) addresses the "Concession fee" I and it being 10% of the prior month's gross receipts, but does indicate a due date. Section 14(a) "Lessee's Obligations" of the 07/07/1987 contract is the only other place that Internal Audit identified where the contracts discuss payments, but it did not have a specific due date 1 stated. Refer to Exhibit P — Dollar 07/07/1987 Contract. I Avis car rental agency's 09/05/1986 Agreement Section 3(c) addresses the "Concession fee" and it being 10% of the prior month's gross receipts, but does not indicate a due date. Section 14(a) "Lessee's Obligations" of the 09/05/1986 contract is the only other place that I Internal Audit identified where the contracts discuss payments, but it did not have a specific due date stated. Refer to Exhibit J — Avis 09/05/1986 Agreement. 1 Budget car rental agency's 05/17/2000 Concession Agreement Section 3(d) addresses the "Concession fee" and it being 10% of the prior month's gross receipts, but does not indicate I a due date. Section 11(a) "Lessee's Obligations" of the 05/17/2000 contract is the only other place that Internal Audit identified where the contracts discuss payments, but it did 1 17 I 1 not have a specific due date stated. See Exhibit 0 — Budget 05/17/2000 Concession Agreement. 1 The following table reflects the average number of days (after the prior month's end) that the rental ' car's concession payments were recorded in the financial records of the County. This resulted in Budget having the fastest average recorded concession fee of 14 days after month's end for fiscal 2008 and 2009 while Hertz had the slowest average recorded concession fee being made 26 days 1 after the prior month's end for September 2010 — February 2011. Note: the average for all of these is less than the contractually required payment due within 30 days of the prior month's end. ' Concession Payments Recorded: Average # of days after the 1" day of the month Fiscal Fiscal Fiscal Fiscal 2011 2008 2009 2010 (Sept '10 — Feb `11) Dollar 19 days 18 days 19 days 18 days Thrifty 19 days 18 days 19 days 18 days Avis 15 days 15 days 16 days 16 days Budget 14 days 14 days 15 days 16 days Hertz 21 days 22 days 25 days 26 days * Please note that the booked date can be effected by things such as the issue date of the check, the time the check spends in the car rental agency's mailroom, the time it takes to deliver the check to KWIA, the time it spends in KWIA being reviewed, the time for the 1 check to go from KWIA to the Clerk's Office. 1 Recommendation(s): 1. We recommend that Airport Management ensure that the amendments to the Hertz, Dollar, Avis, and Budget car rental contracts reflect a specific due date for the monthly concession payments. 2. We recommend that Airport Management ensure that the amendments to the Hertz, Dollar, Avis, and Budget car rental contracts include penalties for late payments for the monthly concession payments. The late fee penalty should be high enough to reduce any incentive for delaying payment and penalties should be promptly assessed. 3. We recommend that Airport Management consider setting up the rental car concession payments as Electronic Funds Transfer (EFT) or to have the checks directly mailed to the Clerk's Finance Department to ensure the timeliness of the payments. it County Administrator's Response: 1. We concur. We will ask legal staff to include such language in future contracts and contract amendments. 2. We concur. We will ask legal staff to include such language in future contracts and contract 1 amendments. 18 1 1 3. We strongly concur with setting up rental car concession payments as EFT P a Y ments. However, before we would agree to having all the checks being sent directly to the Clerk's Finance Department, we would have to meet with the Finance Department to review their procedures to insure that we would be informed of the receipt of funds, along with the dates ' they arrive, especially if the Airport is going to be charged for the responsibility of monitoring such payments. 1 1 1 1 1 1 1 1 1 1 1 1 1 19 B. Contract items 4. The KWIA yearly rate adjustment letters for the on -site car rental agencies are not always being transmitted in a timely manner. Finding: 1 The KWIA yearly rate adjustment letters for the on -site car rental agencies are not always being transmitted in a timely manner. KWIA sends out a yearly letter to the on -site car rental agencies concerning the change in the rental rates for their on -site locations. These yearly rate adjustments are based upon the changes in the Consumer Price Index (CPI). Internal Audit reviewed the yearly letters that KWIA sent out to both Dollar and Thrifty Rental Car agencies for the years covering 2007 to 2010, which equates to a sample group of eight (8). Of these ' eight (8); Four (4) of the KWIA adjustment letters were dated after the first day of that fiscal year. Three (3) of the KWIA adjustment letters were dated prior to the 1" day of that fiscal year. ' One (1) of the KWIA adjustment letters was not located. Internal Audit applied the same fiscal periods that KWIA used, January 24, `07 — January 23, `08 for ' Thrifty and July 1, `07 — June 30, `08 for Dollar. Please note that the time period that KWIA used for Thrifty was incorrect and refer to finding #B5 for more detail. One (1) of the four (4) rate increase letters that KWIA sent to Dollar Rental Car was dated after the 1s` of July, which is the first day of the fiscal year. The adjustment letter for the 2008 year was not ' located and two (2) were dated prior to the beginning of Dollar's fiscal year. Refer to the following for a summary of the Dollar Rental Car results for: 1 Fiscal year July 1, 2007 — June 30, 2008: KWIA letter dated June 4, 2007 which is 27 days prior to the beginning of the fiscal year. Fiscal year July 1, 2008 — June 30, 2009: No letter was found. ' Fiscal year July 1, 2009 — June 30, 2010: KWIA letter dated August 17, 2009 which is 47 days after the beginning of the fiscal year. Fiscal year July 1, 2010 — June 30, 2011: KWIA letter dated June 10, 2010 which is 21 days prior to the beginning of the fiscal year. ' See Exhibit Q — Dollar rate increase letters. ' Three (3) of the four (4) rate increase letters that KWIA sent to Thrifty Rental Car were dated after the 24t of January, which is the first day of the fiscal year per KWIA. One (1) of the four (4) letters 20 1 was dated prior to the beginning of Thrifty's fiscal year. Refer to below for a summary of the results for Thrifty Rental Car: Fiscal year January 24, 2007 — January 23, 2008: KWIA letter dated December 8, 2006 which is 47 days prior to the beginning of the fiscal year. Fiscal year January 24, 2008 — January 23, 2009: KWIA letter dated June 24, 2008 which is ' 152 days after the beginning of the fiscal year. Fiscal year January 24, 2009 — January 23, 2010: KWIA letter dated August 17, 2009 which is 205 days after the beginning of the fiscal year. ' Fiscal year January 24, 2010 — January 23, 2011: KWIA letter dated February 10, 2010 which is 17 days after the beginning of the fiscal year. 1 See Exhibit R - Thrifty rate increase letters. ' When the date that the rate increase letters are transmitted is inconsistent, it affects the timely receipt of location rental payments. ' Recommendation(s): 1. We recommend that Airport Management transmit all of the rate increase letters in a timely manner. 2. We recommend that Airport Management transmit a copy of the rate increase letter to the Clerk's Finance Department. This will help ensure the accuracy of the adjustments and the timeliness of the letters. 3. We recommend that Airport Management ensures that future contracts, amendments, or agreements that include a change to fees charged based upon the Consumer Price Index (CPI) ' be more specific. The annual CPI to be used needs to be specifically named within the contracts, addendums, or agreements. County Administrator's Response: ' 1. We concur. We will establish a procedure to transmit all rate increase letters on the same date each year, and in a timely manner. 2. We concur. We will copy the Finance Department on all of our rate increase letters. 3. We will ask legal and OMB staff to help us in this regard, so that we specifically name which CPI will be included in the contract, addenda, or agreements. Upon further review, we find no ' consistency as to what time of the year is used, however, we receive CPI information one time per year from OMB, usually in February. Therefore, we need to tailor our leases to implement CPI in February or March of each year, after this data is received from OMB. We will continue to work to find solutions for these issues. 21 B. Contract items 5. KWIA has been using an incorrect time period for Thrifty's on -site rental fees. Finding: KWIA has been using an incorrect time period for calculation of Thrifty's on -site rental fees. KWIA I has been using January 24, `07 to January 23, `08. The contractually correct time period should be from July 1, `07 to June 30, `08. Thrifty Rent a Car was added to the contract with DTG in an amendment dated 02/18/04. Section 2. of the amendment states that "The County leases an ' additional area of 100 square feet adjacent to DTG's existing counter for use as a Thrifty Rent A Car counter (the Thrifty premises)..." See Exhibit S — DTG 02/18/04 Rental Car Concession ' Amendment. ' The DTG contract amendment dated 02/18/04 section 1. also makes this amendment part of the prior 07/15/03 amendment, which contractually sets the time period being from July 1, `07 to June 30, `08, not January as KWIA is using for Thrifty. The Dollar contract dated 07/15/03 specifically ' states in section 4 "Thereafter, the counter rental rate and the rental rate for the office spaces will adjust annually, effective July 1 of each year, by a percentage equal to the percentage increase in the CPI for urban consumers for the preceding calendar year. ". See Exhibit T — Dollar 07/15/2003 Rental Car Concession Amendment. ' Using the correct contractual time period for Thrifty will make it the same time period as Dollar Rent a Car. Having the same time period may help to ensure that the yearly rate adjustment letter is sent out in a timely manner. Recommendation(s): t 1. We recommend that Airport Management adjust Thrifty's time period to the contractually required date. This way, both the Dollar and Thrifty rate adjustment letters can be done at the ' same time. 2. We recommend that when Airport Management sends a copy of the change in Thrifty's time period that they also send a copy of the letter to the Clerk's Finance Department. ' County Administrator's Response: 1. We concur. We will establish a procedure to transmit all rate increase letters on the same date each year, and in a timely manner. 2. We concur. We will copy the Finance Department on all of our rate increase letters. 22 C. Billing 1. KWIA's yearly adjustment letter concerning on -site location rates resulted in $1,385.82 being under - billed. Finding: A math error was made on KWIA's 2010 yearly adjustment letter to Dollar Rental Car concerning on -site location rates resulted in $364.11 not being billed by KWIA or paid by the car rental agency. Plus the 2009 yearly adjustment letter to Hertz Rental Car has a $219.20 under - billing. These under - billing errors, if not corrected are then carried forward to the following years. Therefore the total 1 under- billing of $1,385.82 is comprised of the Dollar $364.11 under- billing for the 2010 and 2011 adjustment letter plus the Hertz $219.20 under - billing for 2009, 2010, and 2011. Internal Audit reviewed the yearly letters that KWIA sent out to both Dollar and Thrifty Rental Car agencies for the four (4) years covering 2007 to 2010. Internal Audit identified a math error resulting in $364.11 not being billed by KWIA or paid by the Dollar car rental agency. Internal ' Audit applied the same fiscal periods that KWIA used, January 24, `07 — January 23, `08 for Thrifty and July 1, `07 — June 30, `08 for Dollar. The fiscal year that KWIA used for Thrifty was incorrect refer to finding B5 for more detail. The yearly adjustment letter to Dollar Rental Car dated June 10, 2010 contains a mathematical error. ' This error in the formula resulted in $364.11 not being billed or paid for the July 1, 2010 to June 30, 2011 time period. KWIA used the following incorrect 2009 numbers for the 2010 Dollar Adjustment letter calculations: `Counter Space - $3,033.49' ' `Office - $2,204.68' `2 " Floor Office - $2,805.96' KWIA should have included 2009's 4.1% CPI adjustment for the `Counter Space', `Office', `2 " 1 Floor Office' on the 2010 adjustment letter. See Exhibit Q - Dollar rate increase letters for the two rate adjustment letters 08/17/09 and 06/10/10 to Dollar. Internal Audit has created a detailed ' outline of the mathematical error described above. See Exhibit U — Dollar 2010 rate adjustment letter comparison ' The Hertz 2009 yearly adjustment letter is also incorrect. It is $219.20 short because the adjustment did not use the proper starting balance for 2009, which is /or should have been 2008's ending balance for the Office & Counter Space adjustment plus 2008's CPI adjustment. These errors directly affect the current year and the following years because the location rental rates are adjusted yearly by the Consumer Price Index (CPI) percentage, IE year `07's ending rate per square foot is year '08's starting rate per square foot times the CPI percentage. 1 23 • Recommendation (s): 1. We recommend that Airport Management develop a review and approval process to ensure accurate billing. 2. We recommend that Airport Management send a copy of the yearly rate increase letter to the Clerk's Finance Department. 3. We recommend that Airport Management ensures that future contracts, amendments, or agreements that include a change to fees charged based upon the Consumer Price Index (CPI) be more specific. The annual CPI to be used needs to be specifically named within the contracts, addendums, or agreements. 1 County Administrator's Response: 1. We concur. We now have a Financial Consultant under contract (Newton & Associates) who we plan to utilize in this and various other functions. 2. We concur. 3. We concur. We will task legal staff with including the recommended language in the contracts, addenda, and agreements. 1 1 1 1 1 1 1 1 1 1 24 1 c 1 C. Billing 2. KWIA contracts do not include FL 7.5% tax on the capital improvement fees that make up the rental charges for the on -site car rental agencies. Finding: Internal Audit reviewed the contracts for the five (5) on -site car rental agencies and identified the various fees that are charged to maintain an on -site location. The following fees listed below are charged but do not include the 7.5% FL tax. ' The $2,500 monthly fee to be used for capital improvements charged to Budget. p p g udget . 1 The $2,500 monthly fee to be used for capital improvements charged to Thrifty. The $2,500 monthly fee to be used for capital improvements charged to Hertz. According to Florida's Department of Revenue 2005 -2009 Technical Assistance Advisements concerning Sales and Use Tax "...capital improvements required by a lease agreement as a condition of occupancy that remain with the lessor after the term of the lease would be considered "rent I consideration" for purposes of 212.031, subject to sales tax under 212.031, F.S. ". See Exhibit V - FL DOR Technical Advisement. ' Recommendation(s): 1. We recommend that Airport Management ensure that the $2,500 monthly capital improvement ' fees include Florida's 7.5% sales tax. It should be collected by KWIA and paid by the Clerk's Finance Department. 2. We recommend that Airport Management ensure that any future amendments and contracts include the 7.5% Florida sales tax for capital improvement fees. ' County Administrator's Response: 1. We concur. We will inform legal staff of this audit's recommendations. 2. We concur. We will inform legal staff of this audit's recommendations. 1 Clerk's Finance Department Response: ' 1. Clerk's Finance Department will ensure that sales tax revenues received from the KWIA Revenue on -Site Care Rental Agencies are remitted as instructed by Florida's Department of Revenue. 1 1 1 1 25 1 1 D. Written policies and P rocedures Findi : Policies and procedures relating to airport operations were not fully documented and need improvement. Procedures consisted mainly of how to update spreadsheets and billing documents I each month. Management approved policies and procedures help to ensure that staff members understand I management's objectives, and their duties. Written procedures also assist in staff training. For example, Hertz car rental agency applied a $13,835.55 credit to their May 2010 concession I payment. This credit was due to Hertz discontinuing the use of additional parking spaces from March 2009 to May 2010 ($12,870.30 for 15 months plus $965.27 tax). KWIA approved a $12,012.28 credit; 14 months at $852.02 (didn't include a credit for tax). The $1,823.29 difference, Hertz credit taken versus KWIA approved is due to the fact that Hertz applied 15 months plus tax and the KWIA approval is for 14 months and no tax. See Exhibit W — KWIA Hertz credit approval letters. Internal Audit was unable to locate management level approval/review by the Director of KWIA or a contract amendment /BOCC approval for this credit. If this additional space rental fee for Hertz was an informal agreement, Internal Audit was unable I to locate documentation showing management approval and review of the credit by the Director of KWIA. If there was a BOCC approval or an amendment to the contract for this credit, Internal Audit was unable to locate either of these. I Documentation of an activity helps to ensure that there is �' p not over reliance on one individual who is the sole expert on a certain operation. Documentation of the process would enable the function I to carry on uninterrupted. This finding related to written policies and procedures was previously reported in airport audits I dated February 8, 1994 and February 23, 2001. Recommendation(s): 111 1. We recommend that written airport policies and procedures be documented and approved by management. When necessary, this should include reconciliations and that the related work is reviewed and approved by a supervisor. I 2. We recommend that all managers and employees should know who is authorized to carry out which activities, and the scope and terms of such authorizations should be clearly defined and communicated. I 3. We recommend that airport employees be cross - trained in the various responsibilities. 4. We recommend that the Clerk's Finance Department pursue a $965.27 tax refund due to the credit Hertz applied to the May 2010 concession payment. County Administrator's Response: I 1. We concur. We will consult with our Financial Consultant to establish procedures. 2. We concur. We will consult with our Financial Consultant to establish procedures. I 3. We concur. 26 4. We concur. �• Clerk's Finance Department Response: 4. The Clerk's Finance Department will pursue the $965.27 tax refund directly. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 27 i I 1 E. Insurance, performance bond 1. Budget, Thrifty, and Avis car rental agencies do not have a separate /individual 1 performance bond for KWIA. I Finding: The May 17, 2000 contract with Budget requires that Budget car rental have a $25,000 performance bond that the BOCC can use to ensure contractual compliance. Refer to section 3. the last I paragraph Exhibit 0 — Budget May 17, 2000 Concession Agreement. After discussions with Internal Audit, Budget car rental procured a performance bond. 1 Thrifty car rental does not have a separate /individual performance bond for KWIA. According to the October 15, 2003 amendment between the County and DTG Operations, Inc., f /k /a Dollar rent I a car Systems, Inc (DTG) Section 1 adds Thrifty to the July 7, 1987 agreement. Section 2 of the amendment sets the square footage of counter space, cost per foot and Section 3 of the amendment sets forth that all other terms and conditions of the original agreement (July 7, 1987) apply. See 1 Exhibit X — Thrifty October 15, 2003 Amendment. I The July 7, 1987 original agreement contains the various insurance requirements, Sections 10, 14g and 17 and the performance bond requirement is under section 3, the last paragraph that apply to Thrifty. See Exhibit P — Dollar July 7, 1987 contract. I Based upon discussions with the County Attorney's office, it appears that the July 7, 1987 original agreement and the October 15, 2003 amendment that the Thrifty car rental agency should have a 1 separate $25,000 performance bond for KWIA since it is a subsidiary of DTG. I Thrifty disagrees; they believe that Thrifty is covered under /via the "DTG Operations, Inc. dba Dollar rent a car" $25,000 performance bond since the amendment was signed by DTG. See Exhibit Y — DTG performance bond. If Thrifty and Dollar are covered under this $25,000 1 performance bond, then it is not meeting the $25,000 requirement per bond. It should be a total of $50,000; $25,000 for Dollar plus $25,000 for Thrifty. We recommend that KWIA obtain a written opinion and recommendation from the County Attorney's office concerning the $25,000 1 performance bond from Thrifty for KWIA and ensure that the opinion and recommendation are followed. The September 5, 1986 original contract with Avis Rent A Car System, Inc. section 3 requires a $25,000 performance bond. See Exhibit J — Avis September 5, 1986 Agreement. Internal Audit has I a copy of the performance bond, but it is issued on behalf of "Avis Rent A Car System, LLC." versus Inc. See Exhibit Z — Avis Performance Bond KWIA. It appears that Avis has had a name I change since the original 1986 contract and that this needs to be addressed. We recommend that KWIA obtain a written opinion and recommendation from the County Attorney's office concerning the $25,000 performance bond from Avis for KWIA and ensure that the opinion and 1 recommendation are followed. The following exhibit is a rider from Avis's insurance carrier 28 1 1 changing the name from "Avis Rent A Car System, Inc." to "Avis Rent a Car System, LLC." See Exhibit AA — Avis name change. The performance bond amount of $25,000 was established with the first contracts. This amount appears low as security to ensure conformance with the contract provisions. We obtained a copy of Tampa airport's 2010 Avis /Budget contract and in Article 7 Security for payment it requires security for payments and gives the car rental agencies a choice of a performance bond or a separate ' irrevocable letter of credit. Both are for amounts equal to the total of three (3) months of fees plus charges payable to the airport. See Exhibit BB — Tampa's Avis Budget car rental Agreement. ' KWIA may also consider adding on the cost of fees, professional services and other costs incurred when exercising the performance bond or letter of credit. Recommendation(s): 1. We recommend that Airport Management obtain a written opinion and recommendation from the County Attorney's office concerning the individual /separate performance bond for Thrifty car rental agency for KWIA and ensure that the opinion and recommendation are followed. 2. We recommend that Airport Management obtain a written opinion and recommendation from the County Attorney's office concerning the $25,000 performance bond from Avis for KWIA and ensure that the opinion and recommendation are followed. ' 3. We recommend that Airport Management research and determine; whether a $25,000 performance bond is adequate coverage for a 3 -month time period. Determine whether a performance bond, letter of credit, or other type of security ensuring payment is the industry norm. Determine whether a performance bond is the appropriate instrument to use because the steps required to execute it are cumbersome and costly. Determine whether to include contract language that would require the car rental agency to cover any costs incurred if the performance bond or letter of credit was exercised. County Administrator's Response: onse: P 1. We concur. We will ask for legal opinion from the County Attorney's office. 2. We concur. We will ask for legal opinion from the County Attorney's office. 3. We concur. We will ask for legal opinion from the County Attorney's office. We will research and determine as recommended. 1 29 E. Insurance, performance bond 2. Thrifty and Avis car rental agency may not have adequate insurance coverage. Finding: Thrifty car rental is not listed as an insured on the certificate of insurance. The certificate of insurance has "DTG Operations, Inc. Dba Dollar Rent a car" listed as the insured See Exhibit CC — DTG COI. According to the October 15, 2003 amendment between the County and DTG Operations, Inc., f /k /a Dollar rent a car Systems, Inc (DTG), Thrifty rent a car is identified as a wholly owned I subsidiary of DTG (the 3rd whereas). Section 1 of the amendment adds Thrifty to the July 7, 1987 agreement. Section 2 of the amendment sets the square footage of counter space, cost per foot and Section 3 of the amendment sets forth that all other terms and conditions of the original agreement Quly 7, 1987) apply. See Exhibit X — Thrifty October 15, 2003 Amendment. The July 7, 1987 original agreement contains the various insurance requirements, Sections 10, 14g and 17 and the performance bond requirement under section 3. See Exhibit P — Dollar July 7, 1987 1 contract. Based upon discussions with the County Attorney's office, it appears that the July 7, 1987 original ' agreement and the October 15, 2003 amendment is that the Thrifty car rental agency is a wholly owned subsidiary of DTG and that it should have the appropriate insurance coverage as required per the July 7, 1987 original agreement. The Certificate of insurance does not identify or list Thrifty ' rent a car as an insured, we are unable to determine whether Thrifty has adequate insurance coverage. See Exhibit CC — DTG COI. Thrifty disagrees; they believe that Thrifty is covered under /via the "DTG Operations, Inc. dba Dollar rent a car" certificate of insurance. See Exhibit CC — DTG COI. If Thrifty and Dollar are covered under this certificate of insurance, then any of the aggregate insurance totals will be half, if both Dollar and Thrifty are covered. We recommend that KWIA obtain a written opinion and ' recommendation from the County Attorney's office concerning insurance coverage for Thrifty at KWIA and ensure that the opinion and recommendation are followed. ' The September 5, 1986 original contract with Avis rent a car system; Inc. section 10, 14g, 17 requires various insurance coverage. See Exhibit J — Avis September 5, 1986 Agreement. The certificate of insurance covers "Avis Rent A Car System, LLC." versus Avis Rent A Car System, Inc. See Exhibit DD — Avis COI KWIA. It appears that Avis has had a name change since the original 1986 contract and that this needs to be addressed. We recommend that KWIA obtain a written opinion and recommendation from the County Attorney's office concerning insurance coverage from Avis for KWIA and ensure that the opinion and recommendation are followed. The following exhibit is a rider from Avis's insurance carrier changing the name from "Avis Rent A Car System, Inc." to "Avis Rent a Car System, LLC." See Exhibit AA — Avis name change. 30 1 1 Recommendation(s): 1. We recommend that Airport Management obtain a written opinion and recommendation from the County Attorney's office concerning insurance coverage and whether there is a need for other adjustments (assignment change to contracts, add /list Thrifty as an insured subsidiary...)for Thrifty at KWIA and ensure that the opinion and recommendation are followed. 2. We recommend that Airport Management obtain a written opinion and recommendation from the County Attorney's office concerning the appropriate name change /changes needed to ensure that the Avis insurance coverage is applicable to KWIA. ' 3. We recommend that Airport Management review the insurance coverage to ensure that it covers current insurance requirements since the Thrifty coverage is based on a 1987 contract 1 and the Avis coverage is based upon a contract written in 1986. County Administrator's Response: 1. We concur. We will ask for legal opinion from the County Attorney's office. 2. We concur. We will ask for legal opinion from the County Attorney's office. 3. We concur. We will work with the County's Risk Management department to review the 1 insurance coverage for all the car rental agreements. 1 1 1 1 1 1 1 1 31 E VI. EXHIBITS E 1 EXHIBIT A February 13, 2001 Airports Revenue Audit memo 1 1 1 1 1 1 i , MEMORAND UM t TO: Sandra Mathena, CFE, CPA Director of Internal Audit FROM: James L. Roberts County Administrator DATE: February 13, 2001 SUBJECT: Airports Revenue Audit M AAAAAAA AAAAAAAAAAAAA AAAAAAA AAAAAAAAA The Administration has reviewed the Preliminary Draft Audit Report in reference to Airports Revenue and provides the following responses: A1-1: The Administration will recommend the change to the Ground Transportation Resolution to require statistics to be kept for up to one year by off -site rental cars for analysis of revenues and appropriate fees to be paid to the County. A1-2: The Administration will recommend to the Board of County Commissioners that a "right to audit" clause be included within the 1 Ground Transportation Resolution. B1 -1: The Administration will request the assistance of Finance and request the County's legal department to initiate collection proceedings. Future contracts will require a yearly audit to be submitted to the County. B1 -2: With assistance from Finance and the legal department, the Administration will undertake the recalculation of the access fee payments from contract inception and demand payment of the difference. B2 -1: Response — Future lease agreements will include a prohibition against 1 allocating time and mileage revenue to loss damage waiver cover in calculating airport fees. 1 B2 -2: If approved by the legal department, Airport management will recalculate airport access fees and demand payment for the difference. B3 -1: The next lease will include a clearer definition of gross revenues for the purpose of calculating the airport access fee. 1 1 1 1 EXHIBIT B May 19, 2010, Budget Rental Car Agreement Marathon airport 1 1 1 1 1 1 1 1 1 1 • LEASE AND CONCESSION AGREEMENT MARATHON AIRPORT BUDGET RENT A CAR SYSTEM, INC. THIS CONTRACT OF LEASE (hereafter "contract ", "lease ", or "agreement ") is made and entered into on the 19th day of May , 2010, by and between MONROE COUNTY, a political subdivision of the State of Florida, whose address is 1100 Simonton Street, Key West, Florida, 33040) (hereafter "Lessor" or "County "), and BUDGET RENT A CAR SYSTEM, INC., whose address is 6 Sylvan Way, Parsippany, New Jersey 07054 (hereafter "Lessee" or "Concessionaire "). WHEREAS, Lessor desires to grant to Lessee a non - exclusive right to operate an automobile rental concession at and from the Marathon Airport at Marathon, Florida, hereinafter referred to as Airport; and WHEREAS, Lessor and Lessee desire, in connection with said operations, to provide for the leasing by Lessor to Lessee of certain space in and around the Airline Terminal at the Airport for the establishment of a Rental Car Concession to accommodate the Lessee's customers and provide space for the temporary placement of rental ready vehicles and for other purposes in connection with said operations, all as hereinafter more specifically provided; now, therefore IN CONSIDERATION of the premises and of mutual covenants and promises hereinafter contained, the parties hereto do hereby agree as follows: 1. Premises - Lessor hereby leases to Lessee for its exclusive use as a rental car office, space #101, located in the airline terminal at Marathon, Monroe County, Florida, said space containing 247 square feet, and being designated "Auto Rental Office /Counter," as shown on Exhibit A, attached hereto and made a part hereof; and in addition thereto, hereby provides 6402 sq. ft. of car prep. area and fourteen (14) rental car ready spaces in the parking lot. 2. Term - This agreement is for a term of five (5) years, commencing May 19, 2010, and expiring on May 18, 2015. 3. Rental and Fees - Lessee shall become responsible for payment of rental and fees effective the first full calendar month in which Lessee takes possession and begins operations at the Airport. Lessee, for and during the term hereof, shall pay to Lessor for the use and occupancy of said Basic Premises and for the rights and privileges herein granted it at the following scheduled rates and fees: (a) Counter Rental: Office /Counter space rental shall be aid at the rate of $6 872.04 plus tax P $6,872.04, tax, per year. The Office /Counter space includes that space physically enclosed by the counter, side partitions and backwall. This rate includes the operating and maintenance expense directly related to the airline terminal cost center plus allocated administrative cost plus return on investment. (b) Car Prep. Area — this 6402 sq. ft. area will be paid at the rate of $3,517.68, plus tax, per year. Additionally, the utilities for the car prep area to be paid by Budget. -- (c) Fourteen (14) Car Ready Spaces - Exhibit C - no charge. (d) Utilities - Electricity, water and trash removal service will be assessed to Lessee at a surcharge of $379.65 per month. E The above rates will be adjusted annually, commencing May 19, 2011, by the percentage increase in the Consumer Price Index for urban consumers (CPI -U) for the preceding calendar year or in accordance with the Airport's standard rates and charges as revised annually, whichever is greater. ' (e) Concession Fee: The Lessee agrees to pay monthly ten (10) percent of gross revenues for the previous month. A performance bond in the amount of $25,000 (twenty-five thousand dollars) shall be provided to ' the Board of County Commissioners and shall be held in escrow as security to insure conformance with the contract provisions. It is not the intent of the County to call the bond for rental payments unless there is a violation of the contract. 4. Definition of Gross Revenues - As used herein, the term "gross revenues" shall mean the total charges for time, mileage, any and all insurance coverage charged to the renter, any and all fees, plans, charges or surcharges of any kind whatsoever including but not limited to roadside service fees, road side service plans, drop off fees, fuel fees, received or receivable, whether by cash or credit, before any federal, state or local tax and after any discount specifically shown on the car rental agreement for the rental of all motor vehicles by the operator to customers picked up at the airport for and in connection with the rental of a motor vehicle regardless of where the payment is made or where the vehicle is returned. It is the intent of the County that the definition of gross revenues be construed as broadly as permitted by law and that the only exclusions to the definition of gross revenues shall be state, federal and local taxes. The Concessionaire for the purpose of its concession rentals shall report all income, both cash and credit, in its monthly gross revenues statement. 5. Accounting Procedures - The Concessionaire shall keep records of all sales and revenues, whether for cash or credit, whether collected or not from its operations in a manner generally accepted as standard to the automobile rental industry located on Airports. Lessee agrees to operate its business upon the Airport so that a duplicate rental agreement invoice, serially pre- numbered, shall be issued for each sale or transaction whether for cash or credit. Lessee further agrees that it will make available to Monroe County, a full and complete book of accounts and other records required by the County to provide a true account of all revenues pertaining to its operations under the provisions hereof. The County, acting through its Finance Director or other authorized representative, shall have the right to inspect and audit the Concessionaire's books of accounts and other records directly generated at the Marathon Airport office or otherwise pertaining directly to this agreement. Knowingly furnishing the County a false statement of its gross revenues under the provision hereof will constitute a default by the Concessionaire of this agreement and the County may, at its option, declare this contract terminated. The Lessee retains the right to have its controller or a representative assigned by its controller to be present during any inspection or audit by the County. Ten (10) business day's notice must be given of intent to audit by the County to allow Lessee's controller sufficient time to schedule said presence. 6. Investment by the Lessee - All leasehold improvements and their titles shall vest immediately in Monroe County upon their acceptance by the County. Furniture, furnishings, fixtures and equipment will remain the personal property of Concessionaire and may be removed upon the termination of the agreement, provided all of its accounts payable to the County are paid at that time. 7. Leasehold Improvements - Lessee has the right during the term hereof, at its own expense, P , at any time from time to time, to install, maintain, operate, repair and replace any and all trade fixtures and other personal property useful from time to time in connection with its operation on the Airport, all of 2 1 EXHIBIT C May 19, 2010, Avis Rental Car Agreement Marathon Airport LEASE AND CONCESSION AGREEMENT MARATHON AIRPORT AVIS RENT A CAR SYSTEM, INC. THIS CONTRACT OF LEASE (hereafter "contract ", "lease ", or "agreement ") is made and entered into on the 19 day of May , 2010, by and between MONROE COUNTY, a political subdivision of the State of Florida, whose address is 1100 Simonton Street, Key West, Florida, 33040) (hereafter "Lessor" or "County "), and AVIS RENT A CAR SYSTEM, INC., whose address is 6 Sylvan Way, Parsippany, New Jersey 07054 (hereafter "Lessee" or "Concessionaire "). WHEREAS, Lessor desires to grant to Lessee a non - exclusive right to operate an automobile rental concession at and from the Marathon Airport at Marathon, Florida, hereinafter referred to as Airport; and WHEREAS, Lessor and Lessee desire, in connection with said operations, to provide for the leasing by Lessor to Lessee of certain space in and around the Airline Terminal at the Airport for the establishment of a Rental Car Concession to accommodate the Lessee's customers and provide space for the temporary placement of rental ready vehicles and for other purposes in connection with said operations, all as hereinafter more specifically provided; now, therefore IN CONSIDERATION of the premises and of mutual covenants and promises hereinafter contained, the parties hereto do hereby agree as follows: 1. Premises - Lessor hereby leases to Lessee for its exclusive use as a rental car office, space #102, located in the airline terminal at Marathon, Monroe County, Florida, said space containing 247 square feet, and being designated "Auto Rental Office /Counter," as shown on Exhibit A, attached hereto and made a part hereof; and in addition thereto, hereby provides 7,124 sq. ft. of car prep. area and fourteen (14) rental car ready spaces in the parking lot. 2. Term - This agreement is for a term of five (5) years, commencing May 19, 2010, and expiring on May 18, 2015. 3. Rental and Fees - Lessee shall become responsible for payment of rental and fees effective the first full calendar month in which Lessee takes possession and begins operations at the Airport. Lessee, for and during the term hereof, shall pay to Lessor for the use and occupancy of said Basic Premises and for the rights and privileges herein granted it at the following scheduled rates and fees: (a) Counter Rental: Office /Counter space rental shall be paid at the rate of $7043.76, plus tax, per year. The Office /Counter space includes that space physically enclosed by the counter, side partitions and backwall. This rate includes the operating and maintenance expense directly related to the airline terminal cost center plus allocated administrative cost plus return on investment. (b) Car Prep. Area — this 7,124 sq. ft. area will be paid at the rate of $4,012.44, plus tax, per year. Additionally, the utilities for the car prep area to be paid by Avis. (c) Fourteen (14) Car Ready Spaces - Exhibit C - no charge. (d) Utilities - Electricity, water and trash removal service will be assessed to Lessee at a surcharge of $379.65 per month • 1 The above rates will be adjusted annually, commencing May 19, 2011, by the percentage increase ' in the Consumer Price Index for urban consumers (CPI -U) for the preceding calendar year or in accordance with the Airport's standard rates and charges as revised annually, whichever is greater. (e) Concession Fee: The Lessee agrees to pay monthly ten (10) percent of gross revenues for the previous month. A performance bond in the amount of $25,000 (twenty-five thousand dollars) shall be provided to the Board of County Commissioners and shall be held in escrow as security to insure conformance with the contract provisions. It is not the intent of the County to call the bond for rental payments unless there is a violation of the contract. 4. Definition of Gross Revenues - As used herein, the term "gross revenues" shall mean the total charges for time, mileage, any and all insurance coverage charged to the renter, any and all fees, plans, charges or surcharges of any kind whatsoever including but not limited to roadside service fees, road side service plans, drop off fees, fuel fees, received or receivable, whether by cash or credit, before any federal, state or local tax and after any discount specifically shown on the car rental agreement for the rental of all motor vehicles by the operator to customers picked up at the airport for and in connection 1 with the rental of a motor vehicle regardless of where the payment is made or where the vehicle is returned. It is the intent of the County that the definition of gross revenues be construed as broadly as permitted by law and that the only exclusions to the definition of gross revenues shall be state, federal and local taxes. The Concessionaire for the purpose of its concession rentals shall report all income, both cash and credit, in its monthly gross revenues statement. 1 5. Accounting Procedures - The Concessionaire shall keep records of all sales and revenues, whether for cash or credit, whether collected or not from its operations in a manner generally accepted as standard to the automobile rental industry located on Airports. Lessee agrees to operate its business upon the Airport so that a duplicate rental agreement invoice, serially pre - numbered, shall be issued for each sale or transaction whether for cash or credit. Lessee further agrees that it will make available to Monroe • County, a full and complete book of accounts and other records required by the County to provide a true account of all revenues pertaining to its operations under the provisions hereof. The County, acting through its Finance Director or other authorized representative, shall have the right to inspect and audit the Concessionaire's books of accounts and other records directly generated at the Marathon Airport office or otherwise pertaining directly to this agreement. Knowingly furnishing the County a false statement of its gross revenues under the provision hereof will constitute a default by the Concessionaire of this agreement and the County may, at its option, declare this contract terminated. The Lessee retains the right to have its controller or a representative assigned by its controller to be present during any inspection or audit by the County. Ten (10) business day's notice must be given of intent to audit by the County to allow Lessee's controller sufficient time to schedule said presence. 6. Investment by the Lessee - All leasehold improvements and their titles shall vest immediately in Monroe County upon their acceptance by the County. Furniture, furnishings, fixtures and equipment will remain the personal property of Concessionaire and may be removed upon the termination of the agreement, provided all of its accounts payable to the County are paid at that time. 7. Leasehold Improvements - Lessee has the right during the term hereof, at its own expense, at any time from time to time, to install, maintain, operate, repair and replace any and all trade fixtures and other personal property useful from time to time in connection with its operation on the Airport, all of 2 which shall be and remain the property of Lessee and may be removed by Lessee y ssee pnor to or within a reasonable time after expiration of the term of this agreement; provided, however, that Lessee shall repair any damage to the premises caused by such removal. The failure to remove trade fixtures or other personal property shall not constitute Lessee a hold -over, but all such property not removed within ten (10) days after Lessee receives a written demand for such removal shall be deemed abandoned and thereupon shall be the sole property of the Lessor. Leasehold improvements shall include any installation of walls, partitions, doors and windows, any electrical wiring, panels, conduits, service connections, receptacles or lighting fixtures attached to walls, partitions, ceilings or floor, all interior finish to floors, walls, doors, windows or ceilings; and all floor treatments or coverings, other than carpeting, that is affixed to floors; sanitary disposal lines and sinks, commodes, and garbage disposal units; all heating, air treatment or ventilating distribution systems, including pipes, ducts, venthoods, air handling units and hot water generators; and all refrigerator rooms or vaults and refrigerated waste rooms including refrigeration or ventilating equipment included with same. Any furniture, fixtures, equipment, carpeting and draperies not classified as leasehold improvements above shall be the personal property of the Concessionaire. 8. Damage and Injury - Lessee covenants that it and all of its agents, servants, employees, and independent contractors will use due care and diligence in all of its activities and operations at the Airport and the Concessionaire hereby agrees to repay or be responsible to Monroe County for all damages to the property of the County which may be caused by an act or omission on the part of the Concessionaire, its agents, servants, or employees and except to the extent that such damage to the property is covered by insurance required to be provided by the Concessionaire under any provision hereof, or is provided by Monroe County (except subrogation rights of the County's carrier), Concessionaire shall pay, on behalf of the County, all sums which the County shall become obligated to pay by reason of the liability, if any, imposed by law upon the County for damages because of bodily injury, including damages for care and loss of service, including death at any time resulting from bodily injury and because of injury to /or destruction of property, including the loss or use thereof which may be caused by or result from any of the activities, omission, or operations of the Concessionaire, its agents, servants, or employees on the Airport. 9. Other Development of Airport - Monroe County reserves the right to further develop or improve the landing area of the Airport as its sees fit, regardless of the desires or views of the Concessionaire, and without interference or hindrance; provided, however, that in no event can the County deprive the Concessionaire of reasonable and direct routes of ingress and egress to the premises. 10. Terminal Area Planning - Lessee acknowledges that Monroe County has Master Plans including terminal area revisions. Lessee hereby agrees to cooperate to the fullest with the County, especially in those areas of terminal improvements which may at some time cause relocation of rental car facilities. 11. Lessee's Obligations - Lessee covenants and agrees: (a) to pay the rent and other charges herein reserved at such times and places as the same are payable; (b) to make no alterations, additions or improvements to the demised premises without the prior written consent of Lessor, which consent shall not be unreasonably withheld; (c) to keep and maintain the demised premises in good condition, order and repair during the term of this agreement, and to surrender the same upon the expiration of the term in the condition in which they are required to be kept, reasonable wear and tear and damage by casualty, not caused by Lessee's negligence, not and civil commotion, excepted; 3 EXHIBIT D Summary of Excluded Accounts 1 1 r 1 1 1 Avis Excluded Account Summary: January 1, 2008 - June 30, 2010 1 Calendar year Calendar year Jan. 1, - June 30 Account Account Name 2008 2009 2010 Total I One Way Fee 300.00 2,474.43 - 2,774.43 Chains 70.00 24.00 94.00 Additional Driver 1,275.16 1,550.24 1,359.00 4,184.40 I 169. Keys 1,010.00 835.00 - 1,845.00 Cleaning Maintenance 169.00 I Rental Extn /Late Fee 7,715.00 5,740.00 13,455.00 Other or combination 942.50 2,183.99 743.85 3,870.34 Detail Fee - - 175.00 175.00 I Child safety seats 1,999.22 2,393.50 1,894.56 6,287.28 Under 25 Years Renter 77.00 27.00 104.00 Emergency Sickness Protection - - 15.00 15.00 I Valet Service 900.00 560.00 150.00 1,610.00 Underage fee 14,316.00 5,487.00 1,836.00 21,639.00 Energy Recovery Fee 5,059.08 16,383.39 8,135.23 29,577.70 1 GPS charges 3,014.44 - - 3,014.44 Government surcharge 16,120.00 9,805.00 1,565.00 27,490.00 Navigation Unit 4,401.65 6,743.50 3,806.83 14,951.98 I DVD Unit 49.75 - - 49.75 Others - 159.71 - 159.71 I Gas 43,865.92 38,011.72 20,588.15 102,465.79 Pre -pay gas 20,304.69 22,892.86 15,415.07 58,612.62 Auto Chauffeur Drive - - 1,417.00 1,417.00 I LDW 132,585.16 104,843.42 67,306.20 304,734.78 PEP 2,372.48 2,021.91 1,068.69 5,463.08 ALI 15,303.75 18,742.47 11,166.12 45,212.34 I Surcharge 104,427.65 89,084.73 9,238.56 202,750.94 Intercity Split 8,729.33 7,169.53 6,005.35 21,904.21 APO Fee 146,037.05 142,405.51 76,377.73 364,820.29 1 FTP Tax 1,309.13 1,664.94 1,127.21 4,101.28 Vehicle License Fee - Surchg - - 5,572.62 5,572.62 State Surcharge - - 4,530.00 4,530.00 I Road Safety Fee - - 23,064.00 23,064.00 Roadside Safety Net - - 64.87 64.87 I Tire & Battery Surcharge - 154.50 154.50 Govt Admin Fee 840.00 840.00 Total Excluded Revenue 524,638.96 483,151.85 269,383.54 1,277,174.35 I C Commission (10% Total) 52,463.90 48,315.19 26,938.35 127,717.44 t L L L Budget Excluded Account Summary: January 1, 2008 - April 30, 2010 I Calendar year Calendar year Jan. 1 - April 30 Account I Account Name 2008 2009 2010 Total One Way Fee 0.33 1,341.50 300.00 1,641.83 Additional Driver 6,899.64 4,283.12 1,589.11 12,771.87 I Keys 500.00 75.00 - 575.00 Cleaning Maintenance 25.00 25.00 Rental Extn /Late Fee - 7,450.00 4,160.00 11,610.00 1 Other or combination 606.16 1,773.56 363.76 2,743.48 Child safety seats 2,330.10 2,378.29 1,357.56 6,065.95 Under 25 Years Renter - 550.00 225.00 775.00 Valet Service 750.00 750.00 150.00 1,650.00 Underage fee 8,380.00 6,480.00 1,593.00 16,453.00 I Energy Recovery Fee 4,443.85 18,387.26 8,233.46 31,064.57 GPS charges 1,937.49 1,937.49 Government surcharge 8,015.00 12,865.00 4,970.00 25,850.00 • Navigation Unit 3,676.05 4,351.74 2,707.25 10,735.04 DVD Unit - 59.70 - 59.70 Gas 35,174.28 37,013.72 19,515.15 91,703.15 Pre pay gas 25,446.70 26,789.57 13,375.31 65,611.58 Others 4.99 4.99 LDW 69,970.83 80,638.30 47,357.52 197,966.65 PEP 495.00 605.00 615.00 1,715.00 Ill ALI 27,228.77 23,607.48 11,341.98 62,178.23 Surcharge 100,808.29 91,872.99 11,425.44 204,106.72 Govt Admin Fee - - 4,325.00 4,325.00 Intercity Split 6,619.70 6,543.51 3,921.17 17,084.38 APO Fee 128,170.95 142,865.67 67,653.62 338,690.24 1 FTP Tax 547.42 716.28 466.75 1,730.45 Auto Chauffeur Drive - - 2,236.00 2,236.00 I Vehicle License Fee Surchg - - 4,369.05 4,369.05 Road Safety Fee 2 4,892.00 24,892.00 Roadside Safety Net - - 19.96 19.96 L Tire & Battery Surcharge - 124.83 - Total Excluded Revenue 432,000.56 471,427.68 237,287.92 1,140,716.16 Commission (10% Total) 43,200.06 47,142.77 23,728.79 114,071.62 E 1 E 1 1 1 1 Dollar Summary of excluded accounts January 1, 2008 - May 31, 2010 1 Calendar Year Calendar Year Partial 2010 Account Account # /Name 2008 2009 (Jan - May) Total 4112 Baby Seat 1,079.91 1,092.93 564.00 2,736.84 I 4113 Additional Driver 30,382.07 25,730.41 13,556.46 69,668.94 4114 Underage Driver 12,075.72 11,651.45 4,347.19 28,074.36 4115 Collision Damage 1 Waiver 113,609.60 113,731.51 49,700.12 277,041.23 4122 Uninsured Motorist 2,137.70 3,396.23 2,145.45 7,679.38 Protection 4123 Emergency Sickness 171.57 187.53 59.85 418.95 Protection I 4130 Drop Charges 3,748.80 16,706.36 10,731.91 31,187.07 4365 Supplemental Liability 20,448.41 23,461.01 12,952.52 56,861.94 Insurance 1 4712 Tour - Baby Seats 253.04 80.14 132.00 465.18 4713 Tour - Additional 3,408.76 3,498.98 1,519.00 8,426.74 Driver 4714 Tour - Underage Driver 1,139.82 1,064.22 135.00 2,339.04 I 4715 Tour - CDW 24,046.31 22,469.11 8,507.46 55,022.88 4722 Tour - UMP 637.80 1,015.02 153.99 1,806.81 4723 Tour Emergency 162.57 47.88 - 210.45 1 Sickness Protection 4730 Tour Drop Charges - 956.00 656.00 1,612.00 4765 Tour - SLI 3,167.06 3,572.52 1,332.32 8,071.90 6101 Tour - Gasoline 2,156.43 1,995.50 322.85 4,474.78 Recovery I 6102 Gasoline Recovery 32,378.08 18,898.69 7,792.39 59,069.16 6103 Tour - Prepaid Fuel 1,222.54 2,390.77 2,602.51 6,215.82 6104 Prepaid Fuel 8,275.23 10,036.19 10,665.13 28,976.55 1 Total excluded revenue 260,501.42 261,982.45 127,876.15 650,360.02 Commission (10% total) 26,050.14 26,198.25 12,787.62 65,036.00 1 1 1, 1 1 1 1 1 I Thrifty Summary of excluded accounts January 1, 2008 - May 31, 2010 Calendar Calendar Partial 2010 Account I Account # /Name Year 2008 Year 2009 (Jan - May) Total 4112 Baby Seat 707.76 755.40 612.00 2,075.16 4113 Additional Driver 15,328.41 16,004.42 11,978.18 43,311.01 1 4114 Underage Driver 7,477.48 6,157.78 2,160.14 15,795.40 4115 Collision Damage Waiver 50,434.61 56,045.57 37,765.59 144,245.77 I 4122 Uninsured Motorist Protection 1,966.06 1,495.45 984.19 4,445.70 4123 Emergency Sickness Protection 335.16 79.80 2,064.34 2,479.30 4130 Drop Charges 4,991.19 10,348.07 7,269.00 22,608.26 111 4131 Handling Fee 13.25 - - 13.25 uppementa Liability Insurance 14,672.70 10,451.09 5,775.28 30,899.07 1 4712 Tour - Baby Seats - 79.92 - 79.92 4713 Tour - Additional Driver 0.38 1,019.47 719.42 1,739.27 I 4714 Tour - Underage Driver 100.00 567.00 297.00 964.00 4715 Tour - CDW 391.32 3,062.76 1,847.97 5,302.05 4722 Tour - UMP 150.09 408.19 221.92 780.20 1 4730 Tour Drop Charges - 50.00 100.00 150.00 4765 Tour - SLI 123.93 623.38 402.43 1,149.74 6101 Tour - Gasoline Recovery 78.62 217.07 360.40 656.09 I 6102 Gasoline Recovery 16,725.24 12,638.23 5,085.82 34,449.29 6103 Tour - Prepaid Fuel 0.24 449.04 559.85 1,009.13 I 6104 Prepaid Fuel 4,361.10 7,918.49 11,608.49 23,888.08 Total Excluded Revenue 117,857.54 128,371.13 89,812.02 336,040.69 Commission (10% total) 11,785.75 12,837.11 8,981.20 33,604.07 1 1 1 1 1 1 1 1 i Hertz Summary of excluded accounts January 1, 2008 - April 30, 2011 Calendar Calendar Calendar 2011 Account I Account # /Name Year 2008 Year 2009 Year 2010 (Jan - April) Total LDW 3140 142,909.22 178,234.63 181,118.41 70,274.52 572,536.78 LIS 2169 33,491.11 32,250.46 37,418.91 12,839.48 115,999.96 1 MVLT 2217 69,336.58 74,749.66 85,701.35 37,871.68 267,659.27 AGE DIF 3103 5,564.00 5,654.00 4,535.00 2,065.00 17,818.00 I AAO 3104 9,996.60 8,991.99 14,717.54 8,595.21 42,301.34 SVC CHG 3130 2,517.00 4,425.00 5,335.00 1,025.00 13,302.00 CHILD SEAT 3132 1,005.00 1,796.00 2,255.00 1,587.00 6,643.00 I NEVERLOST 3137 4,595.04 1,211.00 3,795.99 4,522.01 1,002.26 227.50 13,915.30 SATL RADIO 3139 324.85 395.00 2,158.35 NICK PLYR 3178 186.45 - - - 186.45 I VLF 3711 14,332.44 16,827.96 15,311.56 1,308.53 47,780.49 REFUELING FEE 3720 3,229.20 3,229.20 REFUEL 3721 37,668.29 38,318.55 44,342.16 20,532.68 140,861.68 I FPO 3721 27,462.25 18,858.78 22,711.75 18,300.60 87,333.38 ITV AP SVC 3751 5,675.76 905.26 2,144.45 936.87 9,662.34 AP SVC 3752 112,857.00 131,561.99 141,053.34 64,889.59 450,361.92 1 BUSING 3753 - 15.80 11.85 - 27.65 TRAF 3754 685.00 - - - 685.00 I ENERGY FEE 3755 706.58 7,521 06 8,350.21 3,872.80 20,450.65 PREM RD SC 3756 500.34 148.61 648.95 TOTAL Excluded Revenue 473,428.52 524,231.98 570,423.88 245,477.33 1,813,561.71 1 Commission (10% total) 47,342.85 52,423.20 57,042.39 24,547.73 181,356.17 1 1 1 EXHIBIT E "Avoiding Ambiguities in Concession Agreements" article 1 1 MEASUREOFTHEMONTH 1 o Avoiding Ambiguities in Concession Agreements s cn At most airports, concessions are The wording can be phrased differ- be able to use GAAP as a model for cc a critical element of revenues that ently, but the idea is the same — that revenue inclusion. Conversely, if the m' subsidize diverse projects and fund is, everything is subject except what airport does not want GAAP applied general and administrative operations. specifically is listed as exempt. This to the computation of revenues, that I Concessions include rental cars, park- approach has the advantage of sim- be stated in the contract. A ing, food and beverage, gift shops and plicity in that it doesn't specifically mechanism sometimes used when other business ventures. While con- limit the revenue streams that are sub- concessionable revenues are listed I cessionaires can review draft agree- ject to concession. Such an enumerat- is also to include examples of rev - ments and make requests for altera- ed list could be construed as exhaus- enues not subject to concession with tion prior to signing them, the airport tive and complete. But this approach the proviso that those are the only is generally the drafter of the agree- also has limitations. For example, revenues not subject. In addition, I ment. If contract law stipulated that a concessionaire may consider that contracts may include a list of prohib- what was not expressly permitted was certain receipts merely are reimburse- ited reductions from revenue such as not permitted, the process of draft- ments of cost, such as fuel charges or discounts, rebates, coupons, bad debts I ing concession agreements would be even property tax recoveries on rental and out-of-pocket expenses. much simpler. Unfortunately, that is cars. Given the rule that all ambigui- Of course, all considerations regard - not the path the courts have chosen. ties are the responsibility of the party ing revenues also apply to expenses Rather, that which is not expressly drafting the agreement, the airport in the event that the contract allows I prohibited either by contract lan should consider whether certain the vendor to apply operating or guage, statutory law or case law, is receipts should be listed expressly as other expenses to offset revenues. generally considered to be permitted. subject to concession. Numerous restrictions will have to Thus, it is the airport's responsibil- If the airport decides to list all rev- be contemplated to avoid a situation I ity to include all necessary contract enue streams subject to concession, a where the contract allows the vendor provisions that protect its interests. comprehensive data - gathering process to apply expenses that were not the Although certain contractual issues should be undertaken. This should intent of the airport. I may seem obvious and implicit to the include participation of the depart- Airports also should consider add - drafting party, the best policy is to err ments of finance, internal audits, and ing a clause to the contract that "each on the side of meticulous detail. For properties. The airport also should party and its counsel have partici- example, what if the agreement does consult with industry associations pated fully in the review and revision I not mention discounts? If it is not as there typically are new sources of the agreement." This precautionary expressly prohibited in the contract of information and mechanisms to measure establishes the general rule the concessionaire may interpret and capture additional revenue from that "ambiguities are to be resolved I probably will be able to include dis- concessionaires that other airports against the drafting party shall not counts in its computation of revenues have noted. An example of this in apply in interpreting this agreement," subject to concession. Given these fac- rental cars concessions is language and that "the language in this agree - tors, an airport will want to spend a that allows the airport to apply a ment shall be interpreted as to its I considerable amount of time when it concession percentage to insurance fair meaning and not strictly for or updates or prepares new agreements payments for business losses. Some against any party." This may assist with concessionaires to ensure that airports have included this as part of the airport in the event the language concession fees are paid in accor- their standard contracts for several of the contract is not completely clear I dance with the airport's expectations. years, but many airports still do not on all points. However, enforcing this Different approaches are used to include this language. The same prin- clause is by no means a certainty. ensure all revenue streams the airport ciple can be applied to other conces- Depending on the interpretations and I wants included for concession are sionaires. Also, the airport may want evidence presented by both sides and covered by the agreement. One meth- to include contractual language as to the authority hearing those arguments od is to use wording such as "Gross whether revenues as defined by the (judge, jury, mediator), it may or may Receipts shall include all amounts contract are in accordance with gener- not prove to be dispositive. There also I received from customers except the ally accepted accounting principles is a possibility that the concessionaire following... ". The assumption here is (GAAP). If this wording is left out of will request removal of this clause in that if there is a revenue source that the contract, once again this may be the drafting stage because it creates a I is not mentioned in the list of excep- interpreted against the drafting party significant advantage for the airport. tions, then it is subject to concession. and, as a result, the airport may not In addition to considering all 34 AIRPORTMAGAZINE.NET I DECEMBER/JANUARY 2008 1 1 1 possible revenue streams that the airport uses to write a clear, unam- Rick Shields of Potter fi Co. (www.mspotter.com) is I airport wants to include as part of the concession, the airport also is biguous contract will pay dividends a CPA and CFE with to years of experience in public and enable the airport to pursue addi- accounting. He began working with airports in 1995 and has performed rental car, parking, concession and typically responsible for enforce- tional projects. Arc— financial statement audits for seven airports. Contact 1 ment of the contract through audit. him at rshlelds mspotter.eom. Some contracts require the conces sionaire to obtain an audit in compli- ance with GAAP from a third -party I CPA, but there are problems with using that as a safe - harbor approach. Typically the focus of an audit done by a CPA will be to ensure that the A I overall amounts shown in the basic statements of the company aking Flight are correct. These include year -end I amounts for assets, liabilities and other accounts that may have no rel- evance to the concession agreement. First Southwest Company has the experience to help your capital Generally, the airport will want the improvement programs take off. We are one of the top financial advisors 1 option of using its own resources to in the municipal industry, and one of the few investment banking firms to audit the concessionaire. The con have professionals that specialize in the aviation industry . tract should include provisions that I address records retention, financial accountability, and timeliness of Whether your airport is looking to expand its facilities, add a high-speed data provided by the concessionaire. train, make airfield and roadway improvements, or restructure existing A contract may include a provision debt, we can help. I that if audit requests are not satis- fied within a specified time period, For more information call 800.678.3792 or visit www.firstsw.com . a penalty is assessed. Generally, the I penalty is a per -day fine such as $10 1 : First Southwest Company or $100. Airports that include this Investment Bankers S;nce 94fi clause will want to carefully apply audit procedures to mark the date of 1 Arbitrage Rebate 1 Asset Management 1 Capita! Markets 1 Disclosure 1 Financial Ailcisory 1 1 each request. Sending all requests by 1 Government Investment Poos 1 underwrrtrruJ e -mail can accomplish this task effi- ciently. In addition, contracts often r include penalties and interest provi- onfere co • • ,- - ;- - ~. * - 1 Mons for concession revenues recov- - S ered through audit. As is the case in �- r other venues, penalty clauses often I are used as bargaining chips in nego �� tiations when the concessionaire is challenging the findings of the audit. O F 1111--' tr Ambiguous or incomplete con - 1 Mark your calendars for next J . St. tracts can cost an airport substantial Y concession revenue every year those - ence of the Americas will be held at contracts are in place. As lease agree - . esta Maho Beach Resort. The 2008 conference follows last year's I ments expire and are updated, air conference in Cancun, Mexico. Airport and civil aviation officials from more ports would do well to remember the tha 20 Latin American and Caribbean nations will be invited to attend. Don't responsibility they have in the pro miss this opportunity to network and make valuable contacts in this part cess of updating those agreements to of the world. For more information, contact Joan Lowden at joan.lowden@ 1 ensure that revenue expectations are aaae.org or Susan Lausch at susan.lausch@aaae.org. met and included. The resources the AIRPORTMAGAZINE.NET 1 DECEMBER/JANUARY 2008 35 1 1 1 ' EXHIBIT F Gross revenue inclusions & exclusions 1 1 1 1 1 1 1 Exhibit A - Gross Revenues definitions Comparative examples for the first two types above are provided. The first in :ed, the second in blue. These are taken from current or former agreements at various airports with all proprietary information removed. Certain sections are highlighted for discussion. After each comparison, comments are made regarding the differences and specific audit issues. A single example is provided for the restrictive definition. Definition la - Comprehensive with specifications "Gross Receipts" shall mean all monies paid or payable to or considerations of determinable value received by the Concessionaire, after discounts and coupons deducted at the time of rental, as set forth below, including all charges billed by Concessionaire which are in any way related to the rental of a vehicle or the providing of products or services at or from the Airport, regardless of where the Vehicles, products or services are delivered to or returned from. Discounts can only be excluded from Gross Receipts if they are separately stated on the rental agreement and are granted at the time the rental agreement is entered into with the customer, and are recorded and reported in separately documented accounts. No exclusion shall be allowed for the portion of retroactive rebates, dividends or refunds to any customer upon the attainment of a specified volume of rentals attributable to revenue or as part of any other marketing plan which does not list the discount on the rental agreement at the commencement of the rental transaction. Sufficient detail must be maintained for all adjustment to support their exclusion from Gross Receipts. Gross Receipts include, but is not limited to the following, regardless of the specific names used for the services provided by the Concessionaire: 1 Time and Mileage 2. Rental Charges ' 3. All Insurance charges including (but not limited to) the following: a. Collision Damage Waiver (CDW) b. Loss Damage Waiver (LDW) c. Personal accident insurance (PAI) ' d. Personal Effects Coverage (PEC) or Cargo Coverage e. Life Insurance f. Supplemental Liability Insurance 1 g. Safe Trip Insurance h. Extended Protection i. All other insurance products 4. All fees, assessments and /or charged to customers including (but not limited to) fees charged for the following: a. Additional Driver(s) b. Underage Driver(s) c. Vehicle Upgrades ' d. Fuel Charges e. Petroleum Products f. Intercity Fees (drop charges /one way fees) ' g. Concession Recovery Fees h. Fees for the Late Return of Rented Vehicles i. Guaranteed Reservations j. Vehicle License fees ' k. Frequent Flyer Related Fees I. Delivery or Pick up Charge m. All other fees assessed for services, products or penalties. 5. Equipment charges including (but not limited to) charges for the following: ' a. Child Restraint Seats b. Cellular Phone Fees c. Racks for Recreational Gear & Luggage (i.e. ski and bike racks, etc.) t d. Recreational Gear, including (but not limited to) the following: i. Bikes ii. Ski Equipment iii. Boating Equipment iv. Fishing Tackle v. Golf Clubs e. Tire Chains 1 A -1 1 1 f. Navigation Systems g. Satellite Radio h. Other Electronic Equipment ' i. All Other Equipment for which an additional fee or charge is assessed or collected. 6. All charges attributable to any vehicle, product or service originally rented or purchased at the Airport, which is exchanged or returned at any other location of the Concessionaire. 7. All proceeds, or amounts received from the long -term lease of Vehicles from any location on the Airport. 8. The amount charged to Concessionaire's Customers and which is separately stated on the rental agreement as an optional charge for waiver by Concessionaire of its right to recover from customer for damage to or loss of the Vehicle rented. Gross Receipts shall also include the value of pre -paid coupons and vouchers sold to corporations, tour companies or individuals, either in advance, or invoiced after use, even if the rental charges are not shown on the actual closing rental agreement. The only sums that may be excluded from Gross Receipts are the following: 1. Federal, State or Municipal sales or similar taxes that the Concessionaire is required by law to collect from customers. The taxes must be separately stated on the rental agreement, and collected by Concessionaire from the customer. No deduction will be allowed for items including franchise taxes or taxes levied on the Concessionaire's activity, facilities, equipment or personal property. 2. Any money received by the Concessionaire as compensation for damage to vehicles or other property. ' 3. Amounts collected from customers for vehicles returned at the Airport which were originally rented at another location at which Concessionaire pays a concession fee. 4. Customer Facility Charges which Concessionaire is required to collect and remit. ' All exclusions must be segregated as separate accounts in the Concessionaire's General Ledger. In the event that Concessionaire provides products or services through the use of authorized subcontractors, all revenue received or derived by the subcontractors shall be included in Gross Receipts. (regardless of what 1 portion, if any, is received or retained by Concessionaire. Gross Receipts shall not be reduced by any commission or other amount paid or rebated by the ' Concessionaire to travel agents or others with respect to any rental. Nor shall gross receipts be reduced by any write -offs and/or adjustments to time and mileage or other charges. The Concessionaire shall not allocate revenue related to the rental of a vehicle at the Airport to any other location (regardless of where the vehicle is returned) unless otherwise provided for herein. The risks associated with extending credit shall be borne solely by Concessionaire and shall not affect the computation of Gross Receipts. There shall be no deduction from Gross Receipts for bank charges, uncollected or uncollectible credit accounts or collection agency fees. Bad debt losses made on installment or credit shall be treated as a transaction for the full price in the month during which such charge or transaction is made, regardless of the time when the Concessionaire receives payment (whether full or partial). The retroactive adjustment by Concessionaire of Gross Receipts designated as volume discounts or any other designation or for any other purpose is prohibited. In no event shall the Concessionaires Gross Receipts from any rental be negative in any revenue category for purposes of this Agreement. 1 1 1 A -2 1 Definition 1 b - Comprehensive with specifications LL•• The term "gross receipts" as used herein shall be construed to mean the total amount charged by Concessionaire, whether by cash, credit or otherwise including any separately stated fees and charges, related to Concessionaire's operation of its car rental concession at the Airport as authorized by this Agreement, any activities related directly to that operation, and any other business of Concessionaire elsewhere at the Airport, including but not limited to fixed base operators, private and corporate hangars and charter operator facilities. Gross Receipts applies to all cars supplied by Concessionaire to its customers at the Airport or receipts generated at any other car rental facility within five (5) miles of the Airport terminal building, as defined, without regard to the manner in which or place at which the car rental contract is entered into and without regard to whether the car is owned, leased or otherwise held by Concessionaire. Gross Receipts includes all charges for the month in which the service is rendered, regardless of when payment therefore is received by Concessionaire. All revenue is included in Gross Receipts unless specifically excluded by this Agreement. Examples of Gross Receipts 1 Gross Receipts include, but is not limited to. 1. Time and Mileage. The time and mileage charges paid or payable to Concessionaire whether by cash, credit or otherwise. 2. Insurance. All monies paid or payable from the sale of personal accident insurance, or any insurance of a similar nature, as part of an authorized vehicle rental agreement. 3. Waiver. Fees received by concessionaire to waive deductibility in insurance. 4. Fuel. All monies collected from or charges to customers as reimbursement for refueling a car returned pursuant to a rental agreement under which the customer is obligated to return the car with a full tank of gas or all monies collected from or charged to customers in advance for gas, pursuant to a rental agreement. 5. Intercity Fees. All Intercity Fees received by Concessionaire. 6. Vehicle Exchange. Monies paid to Concessionaire for car rental contracts entered into at the Airport although the car initially rented is exchanged elsewhere and a new contract is submitted therefore. 7. Other money Collected. All other monies collected from customers (including, but not limited to, ' monies from additional or underage drivers, rental of portable telephones, child restraint seats, ski racks, satellite navigation systems or other technology and other items of personal property) except those specifically excluded by this Agreement. 8. Concession Recovery Fee. Any amount that Concessionaire separately states and charges to ' customer to recover amount of concession fee or any other fees paid to County not specifically excluded by this Agreement. Exclusions 1 Unless revenues from Concessionaire's car rental concession are expressly and particularly excluded from Gross Receipts under this Agreement, such revenues shall be included in Gross Receipts. Revenues that may be derived from sources similar but not identical to those described herein shall be included in Gross Receipts unless expressly excluded by this Agreement. Gross Receipts specifically excludes: 1. Recovery of Damages. Charges to Concessionaire's customers for repairs to cars damaged by such customers. 2. Taxes. Monies. collected from Concessionaire's customers for federal, state, county or municipal sales taxes specifically identified as such now in effect or hereinafter levied. No deduction from Gross Receipts shall be allowed for such items including franchise taxes, payroll taxes, or taxes levied on Concessionaire's activities, facilities, equipment, operations, real or personal property. 3. Theft. Uncollected charges arising upon theft or conversion of Concessionaire's car, unless and until such charges are collected, provided that this provision shall not apply to uncollected bad debts where Concessionaire has not actively pursued criminal prosecution. 1 0 4. Customer Facility Charge. The Customer Facility Charge collected from customers by Concessionaire. b A -3 Prohibited Reductions Concessionaire may not reduce Gross Receipts by any of the following. ' 1. Volume Discounts. Corporate or volume rebates unless Concessionaire can establish for each corporate or volume customer invoice: a. the amount of the rebate; b. that the customer has a contractual right to the rebate; and c. that the amount Concessionaire claims as an exclusion from Gross Receipts is attributable to rental car transactions at the Airport by that corporate or volume customer. Gross Receipts may not be reduced by volume discounts unless the discount is documented for each corporate or volume customer and the documentation is submitted with Concessionaire's monthly report. 2. Credits for Out -of- Pocket Purchases. Credits given to Concessionaire's customers for such things as out -of- pocket purchases of gas, oil or emergency services, regardless of where made may not be ' deducted from Gross Receipts. 3. No Diversion of Rental Car Revenue. Diversion, through direct or indirect means, of rental car revenues from inclusion in Gross Receipts, as defined in this Agreement is prohibited. 4. Bad Debts. Concessionaire shall have the right to conduct all or a part of its business on a credit basis; provided, however, that the risk of such operation shall be borne by Concessionaire, and Concessionaire shall include as Gross Receipts any charge Concessionaire customarily makes for goods and services even though Concessionaire fails to actually collect such a charge (i.e., there shall be no chargebacks of bad debt). Comments / Differences: • la includes rental cars rented at other locations and returned at the airport unless the other location has a ' concession charge. Similar tax credit for taxes paid in other jurisdictions. This presents certain audit issues b/c the reports generated for audits frequently are only for cars rented from the airport location. Auditor would need to specifically ask for a report that shows all returns and do side -by -side comparison against the listing that is used for the monthly concession report. • la specifically denies the rental car company the ability use customer adjustments against concessions. Frequently rental car companies will assume that the concession is charged against the net contract price after adjustments. ' • 1b includes the "5 -mile radius" rule. This requires the auditor to gather data for any locations within 5 miles of the airport. An internet search will generally accomplish this goal, however the contract does not specifically define what 5 miles means in terms of road miles or air miles. ' Definition 2a - Comprehensive without specifications Gross Revenue- Shall mean, for the all purposes hereof, all revenues received and services performed for cash, on credit or otherwise, of every kind, name and nature arising out of or from Concessionaire's operations at the Airport, regardless of actual collection. Gross Revenue shall specifically exclude: 1. The amount of any federal, state or municipal sales or other similar taxes separately stated and collected from customers of Concessionaire now or hereinafter levied or imposed; 2. Any sums received by Concessionaire as compensation for damage to automobiles or other property of Concessionaire, or for loss, conversion, or abandonment of such automobiles; 3. Any amounts paid by customers separately billed as additional charges for waiver by Concessionaire of ' its rights to recover compensation from its customers for damage to the automobile rented (commonly referred to as "CDW" or LDW "); 4. Any amounts collected from customers for refueling an automobile rented pursuant to a rental agreement under which the customer is obligated to return the automobile with the same amount of fuel as when rented (commonly referred to as "fuel to fill "): and 5. Any amounts collected from its customers as Contract Facility Charges. 1 A-4 Definition 2b - Comprehensive without specifications Definition of Gross Revenues. As used herein, the term "Gross Revenues" shall include for purposes hereof, the aggregate of the entire amount of all revenues received, goods and products provided and services performed for cash, on credit or otherwise, of every kind, name and nature arising out of or from Lessee's operations at or from the Airport, regardless of actual collection. Notwithstanding the above definition, the following shall be excluded from Gross Revenues: 1. The amount of any federal, state or municipal sales or other similar taxes separately stated and collected from customers of Lessee now or hereinafter levied or imposed; 2. Any sums received by Lessee as compensation for the sale of capital assets, damage to automobiles or other property of Lessee, or for loss, conversion, or abandonment of such automobiles. Comments / Differences: • 2b includes Liability Damage Waiver / Collision Damage Waiver while 2a does not. • 2b includes all fueling charges while 2a only captures prepaid fueling. o What defines prepaid fueling vs. refueling has been disputed in the past. See the following explanation from one of the rental car companies: Rental car position - "Since all cars are rented with a full tank, none of the options are selling prepaid fueling. Each is simply a different way to pay for refueling. We then interpreted that fuel was not a concessionable stream of revenue and concluded that we didn't have to pay a concession fee on those streams of revenue." Auditor's response - "As was discussed in the meeting and has been discussed prior to that, prepaid fueling is not fuel -to -fill. The explanation that all cars have a full tank of gas...is not persuasive nor a reasonable interpretation of the agreement. Add to that, your company reversed its practices in the middle of the contract, took a credit for previously reported revenues based on a change of accounting practice, and the fact that other agencies are not taking this track; it leaves no options for a third -party reviewing your reports. At this point, the reports are not in compliance with the agreement. In order to resolve this, you will have to speak with (the decision -maker at the Airport)." • The definition of taxes is the same for 2a and 2b and can be problematic when you attempt to apply to "Vehicle License Recovery" - also known as VLF, a surcharge by the rental car companies designed to recover costs from property taxes on inventory. In the past, the rental car companies have taken the position that the property tax is part of the "similar taxes" mentioned above in that it is a tax that is levied on the cars and is included in the rental agreements strictly as a cost recovery. Observe the difference in the way this is defined in la and 1 b. Both of those examples reduce the room for interpretation. Definition 3 - Restrictive "Definition of Gross Sales" - Gross Receipts shall be defined as the gross revenue received for time and mileage charges for the rental of automobiles by the Lessee at the Airport, and shall include premiums collected by Lessee from the sale of Personal Accident Insurance. "Gross receipts ", as used in this Agreement, shall be defined further as the time and mileage charges by the Lessee for renting automobiles from the Airport station to air travelers arriving at the Airport, or from short term (transient) rentals made to any employee or operator on the Airport, or from rentals originating at the Airport, or made to air travelers where the rental shall be diverted by the Lessee from the Airport station to any other location. Comments: • By specifically defining what is concessionable, the contract reduces the possibility for unreported revenue streams. Any revenue streams which are not mentioned are generally deemed not subject to concession. • The definition does address diversion in the case of air travelers, but does not specifically address local rentals. However, the first sentence does not restrict itself with respect to local rentals. • Restrictive definitions may not generate findings as often as comprehensive definitions because what is concessionable is clearly defined. However, if your airport switches from a restrictive to a comprehensive definition, there frequently will be problems with unreported revenue due to the expansion of revenue streams that are concessionable. A -5 Other specific items re Gross Receipts definitions: ' Local rentals 111 If you allow an exclusion or discount for local rentals (customers that are not airport passengers), will want to include language that specifies documentation requirements for those exclusions or discounts. E.g. - copy of driver's license. Insurance recoveries Amounts excluded... Any sums received by Company from customers or insurance carriers for damage to automobiles or Company property, or for loss, conversion, or abandonment of such automobiles. This exclusion does not include any sums received by Company in lieu of rent for those vehicles. Sums recovered by Company for damage to, or for loss, abandonment, or conversion of Automobiles or other I property of Company. (However, this exclusion does not include any sums received by Company in lieu of rent for those Automobiles); Not something you will find on the contracts or contract summaries. Will have to specifically request the information from the rentacar companies. Can also use the general ledger as a source. Has resulted in recoveries - particularly in instances where insurance proceeds are commingled (property recovery and rent recovery). If the RAC commingles and cannot provide a breakdown of property recovery vs. rent recovery then all may be considered subject to concession. Customer Facility Charges As defined: "Customer Facility Charge" means a per day fee payable by Customers, collected, accounted for, and ' remitted by Company to the Airport (whether collected from Customers or not), and adopted by resolution by the Airport on --DATE---, for the reimbursement for capital improvements, including, but not limited capital expenditures (i.e. interest) benefiting Company for rental Automobile operations, maintained by Company in a separate trust account. 1 A -6 EXHIBIT G Northwest FL Regional monthly certified reports CONCESSION AGREEMENT AND LEASE 1 MANAGEMENT AND OPERATION OF A NON - EXCLUSIVE RENTAL CAR CONCESSION AT NORTHWEST FLORIDA REGIONAL AIRPORT I Monthly - Certified Statement (Exhibit E) II Rental Car Co( OKALOOSA COUNTY, FLORIDA II MONTH: YEAR: 1 CONTRACTOR: CONTRACT NUMBER: AIRPORT: Okaloosa Regional Airport I AGREEMENT TYPE: Concession Agreement and Lease REVENUE CODE: TENANT TYPE: Rental Car LOCATION CODE: I GROSS RECEIPTS Time & Mileage Charges Other Vehicle - Related or Service Charges I Other Equipment $ Insurances Cell Phones PAC Ski Racks $ PEC $ Child Seats $ SLI Navigation Equipment . Other $ Other $ Total Total $ L Waivers Other* LDW $ I CDW $ $ Other $ Total $ Total $ - *Identify all over .0125% of Gross Receipts L Fuel Charges ab Prepaid Fuel TOTAL GROSS RECEIPTS $ Fuel Service I Gasoline Recovery $ CALCULATION OF PRIVILEGE FEE FOR MONTH Total $ I Other Vehicle Charges GROSS RECEIPTS $ - Inter -City Fees Vehicle Exchange $ in Other Drivers PERCENTAGE FEE DUE (10 %) $ Total $ Less Monthly Payment of Minimum Annual Guarantee si III Fee Recoveries $ Concession Recovery Fee Net Amount Due to the County Other $ I Total $ - RENTAL TRANSACTIONS for month = RENTAL TRANSACTION DAYS for month = I certify that this is a true and accurate statement of Gross Receipts in accordance with the terms of our Concession Agreement and Lease with Okaloosa County, Florida, for the month and year listed above. I Signature: I Title: Phone Number: ( ) I Date: Mail payment and Certified Statements by the 20th of the following month to: Airports Director ' Okaloosa County, Florida Northwest Florida Regional Airport State Road 85 North Eglin AFB, FL 32542 1 By Wire Transfer* to: SunTrust Bank 9 -digit routing number: To Credit: Okaloosa County Account Number: `Subject to change by County upon twenty (20) days written notice to Operator. Exhibit E 1 1 1 1 1 1 1 1 EXHIBIT H Louisville statement and reports 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 C a) Y « io o? c C C • • a v) s ': : a) a " ' a) vi r OD y r0 _c N V O a) a) 1 - //., C u C 7 O a! OA >. V (0 > CO 0 0 • c , a) s CV rl U to a 0 0 7 a co a vt RI c 00 a1 E 3 u O w , - a) t -o a) c 'i O 0 U 0 r -0 O C a '2 L `- 4 O T U R - 0 = d O CO 5) 7 O c �, M C a) tD 4, VI N VI O > a C s to t0 CO Q Q t a) O r -c a ` E a+ C a) u v, a) CO 4, C CO 0 C N "O a) E C '- — co C r CC r ` 3 - E a) c6 • r O N . '0 3 IA 1- N O o. a) E c o a co 0 to O v O ° ac 'C o >, C c u m n C a) CO o v X . � C ( p O 0 U L Q> v t a) ti co L u V , � a) a) � L .+ ✓ 4 - N = to Q r .c O 5) t o �+ C o° a s ' t T VD `� o co :5 a) •L C E O r j c E a) c o U c L ca O co 4 H ,} x U a O O. 0 j C 44. N +- O N LL1 0 t - O ` c O L C 1/1 3 — 01 �" i.. r co o c g u o C p = t o CO u • C o C t ' o E t c v - o v m a) E o> o- L a � Q 0 5 0, > ti4 . c ` 0 3 > r Y O • ca . C N C O (5 V 7 N °' C a) ra ' co E 0 0 ..c '° C +' �o c 3 a) -° C .0 >, c u tf° 3 a c v a m :° o c v v , o ,.= a, c a © E n Y L r '- y a) C U U ny ` • C C C a) co 0 O" -o w •o O u ca E ) + t C U t o `n O 0 o •C N r r (o v, 0 CO r O "O 0 L C 00 O 'n r a o 4O C C v O a) ? c O O 2 ea > '^ c °- E L u 4 .a w r to }, •6 v ID N t9 0 7 t0 O u -0 CO C 'p s.. a) a, C a (0 O a (D u v = , a) IA O X cc .- 0 ■ O = co a) u — c ca ut E p 4 1 vi �' O T v v ? r 0:3 � L a v — a) c o o co -.- 5 -C 3 v •- C aui a) : C .0 a C U CO 0 I 0 03 L CO ` ) o a) X .r., o Vi 7° E E v '''.a. + v . a C v L^ L o ° c a a 0 ; ° u aJ C C a1 s co t413 N -0 C ° C 3 C O C = 2 4. o a u' . •- E o o O ‘.9 c Q v, v U v E a < • m c 'c v o w° N v, > o a `0 , o ° ("4 �' to L u, O O N r 0 Q C p i O •� G IA .CO CO .0 4- -c .0 L a) t v , CO a) v- of o N n r U 0 •+ u a) o 3 Q ° -c o � t r a) a u co a p N Q (5 4 `. i o n to c°- 0 N a s c '•- a I c C7 t^ co to a o o o= a) >..c .c o u y Q ° V+ s a ;° c c v, cr E a � o _a > • 3 a a ° t ° ° L N 3 °' c Q 0 E vi u 0 s .co E n X ° C o r u co H cu o 3° ,� o o U I 0. 5) 0 O - N ,,, a E v x Y o o co 4 c c 7 of s Z O CU ° •f23� t C b a) c — o s ° CL a) c c 0 0 0 _ �o a ) r us E Q a T.-, O)(/) OI x r N C 0 = CO N Q o N w �' C i ) O O O w a) m w 3 v 3 o r r VI a '° o ° u v o u I O y Q— = x • co V, C a L a) C co to t0 O f0 — t/) E LA fa .��` a) /����t .... w 0 0 CO t0 VI C O c -- t+ .° f 0 a) Vi. CU 00 © V C • E CD N a c vii O O 4.4 Q a) s m ._ w t (13 a, a) 0 N N a, ti a) ;, o a a v (5 s m� mew = C ,° c o v v a a, ° C u r E) a`) 3 - c u I o 03 ° a n ,� .c C o a C u = c C -p ;o U C U • a E f- U a o O Q a) t° ° co .0 vi r 0 U v, no E H a) v) X t w o • C 0 a) a, o 3 v t Q m C.) 0 w U L 0 Y ) a CD N CO c a) CV m.c Y E c ^ o v 0 A E c W 2 u.0I n 1- re I I EXHIBIT H Monthly Reporting Form Statement of gross receipts and Business Privilege Fees and Contract Fee due to Louisville Regional Airport Authority for the month of and year of . Location #I Location #2 Location #3 TIME & MILEAGE $.00 5.00 $.00 DROP CHARGE 5.00 $.00 $.00 BABY SEAT /CHILD RESTRAINTS $.00 5.00 5.00 CELLULAR PHONES $.00 5.00 $.00 UPGRADES $.00 $.00 $.00 UNDER 25 AND ADDITIONAL DRIVER $.00 5,00 $.00 PERSONAL ACCIDENT INSURANCE $.00 $.00 $.00 LOSS DAMAGE WAIVER $,00 $.00 $.00 LIABILITY INSURANCE SUPPLEMENT $.00 $.00 $.00 PERSONAL EFFECTS COVERAGE $.00 $.00 5.00 OTHER INSURANCE COVERAGE $.00 $.00 5.00 FUEL 5.00 $.00 $.00 SALES TAXES $.00 $.00 5.00 CONCESSION FEE RECOVERY $.00 $.00 5.00 OTHER REVENUE $.00 5.00 $.00 GROSS REVENUES $.00 5.00 5.00 • LESS EXCLUSIONS: DISCOUNTS ($.00) ($.00) (5.00) ADJUSTMENTS ($.00) ($.00) (5.00) SALES TAXES ($.00) ($.00) (5.00) CUSTOMER CONTRACT FEE (5.00) (5.00) (5.00) TOTAL DEDUCTIONS ($.00) (5.00) (5.00) GROSS RECEIPTS SUBJECT TO 10% PRIVILEGE FEES 5.00 S.00 5.00 THE GREATER OF: (A) 10% OF GROSS RECEIPTS $.00 $.00 5.00 OR (B) MINIMUM MONTHLY GUARANTEE 5.00 $.00 $.00 (Paid for the reporting month.) LESS: B above 5.00 $.00 $.00 Business Privilege Fee due with this report: 5.00 $.00 5.00 CUSTOMER CONTRACT FEE: Number of rental transactions 0000 0000 0000 Customer Contract Fees ($5.00 X TOTAL RENTALS) 5.00 5.00 5.00 TOTAL AMOUNT OF CHECK 5.00 5.00 5.00 Authorized company official Signature Date ! . 1 i 0 U J a o 2 °1 z U Z Z z • al .� oak . 1 U C� Z en I a Q . J M U F- W a w IV I x -4 X Q (/1 N }. H n z Z O 0 0 1 S D O d CC 7 C U W W M CC 5041 1 a r 0 0 w m? j Q p Z FF 7 Z . N y W ....�� X J y QI N j ct 1- E �z w N 0 U LL • W LL N W xx 12 a U F Q E h V WW U d R J pp6 N F0� . Ox J 0 w p w 2 I. K W 0 5 7 Q 3 k 0 w 1 of 1 1 1 ' EXHIBIT I Hertz February 21, 2001 Agreement 1 1 1 1 1 1 1 1 1 1 1 1 1 LEASE AND CONCESSION AGREEMENT KEY WEST INTERNATIONAL AIRPORT ,,� jr THIS CONTRACT OF LEASE is made and entered into on the 7-/ day of ��-0 00(1 by and between MONROE COUNTY, a political subdivision of the State of Florida, hereinafter referred to as Lessor, and THE HERTZ CORPORATION, qualified to do business in the State of Florida, hereinafter referred to as Lessee or Concessionaire; WHEREAS, Lessor desires to grant to Lessee a non - exclusive right to operate an automobile rental concession at and from the Key West International Airport at Key West, Florida, hereinafter referred to as Airport; and WHEREAS, Lessor and Lessee desire, in connection with said operations, to provide for the leasing by Lessor to Lessee of certain space in and around the Airline Terminal at the Airport for the establishment of a Rental Car Concession to accommodate the Lessee's customers and provide space for the temporary placement of rental ready vehicles and for other purposes in connection with said operations, all as hereinafter more specifically provided; now, therefore, IN CONSIDERATION of the premises and of mutual covenants and promises hereinafter contained, the parties hereto do hereby agree as follows: 1. Premises - Lessor hereby leases to Lessee for its non - exclusive use the rental car counter located in the airline terminal at Key West, Monroe County, Florida, said counter containing 116 square feet and office space containing 116 square feet as shown on Exhibit A, and in addition provides 30 rental car ready spaces, as shown on Exhibit B, both exhibits are attached hereto and made a part hereof. 2. Term - This agreement is for a term of five (5) years, commencing on April 21, 1999. 3. Rental and Fees - Lessee, for and during the term hereof, shall pay to Lessor for the use and occupancy of said Basic Premises and for the rights and privileges herein granted it at the following scheduled rates and fees: (a) Counter Counter space rental will be paid for at the follow rates: Key West Airport - $22.25/sq. ft. /per annum + tax. Counter rental space includes that space physically enclosed by the counter, side partitions and backwall. (b) Office Office space rental will be paid for at the follow rates: Key West Airport - $15.88/sq. ft. /per annum + tax. These rates are subject to rates and charges as approved by the BOCC, or with an increase equal to the CPI percentage increase for the prior year. (c) Car Ready Spaces Exhibit B - no charge. (d) Concession Fee Guaranteed minimum annual concession fee for each contract year of the five (5) year term of this concession agreement shall be $107,700.00 per year. The Lessee agrees to pay monthly ten (10) percent of gross revenues for the previous month or one twelfth (1/12) the guaranteed annual minimum, whichever is greater. In the event the total amount paid during any one year period under this method exceeds ten percent of gross revenues or the annual minimum guarantee, whichever is greater, for that one year period, an adjustment will be made to the first months rent for the next subsequent period or, at the end of the fifth year, reimbursement will be made within thirty days. A performance bond in the amount of $25,000 (twenty -five thousand dollars) shall be provided to the Board of County Commissioners and shall be held in escrow as security to ensure conformance with the contract provisions. It is not the intent of the County to call the bond for rental payments unless there is a violation of the contract. 4. Definition of Gross Receipts - As used herein, the term ''gross receipts" shall mean the total sum of money, from charges for net time, mileage, and personal accident insurance, paid or payable, whether by cash or credit, (after any discount specifically shown on the car rental agreement), by the customer to Concessionaire for or in connection with the use of vehicle contracted for, delivered or rented to the customer at the Airport, regardless of where the payment is made or where the vehicle is returned. The Concessionaire for the purpose of its concession rentals shall report all income, both cash and credit, in its monthly gross receipts statement. ' 5. Accounting Procedures - The Concessionaire shall keep records of all sales and revenues, whether for cash or credit, whether collected or not from its operations in a manner generally accepted as standard to the automobile rental industry located on Airports. Lessee agrees to operate its business upon the Airport so that a duplicate rental agreement invoice, serially pre- numbered, shall be issued for each sale or transaction whether for cash or credit. Lessee further agrees that it will make available to Monroe County, a full and complete book of accounts and other records required by the County to provide a true account of all revenues pertaining to its operations under the provisions hereof. The County, acting through its Finance Director or other authorized representative, shall have the right to inspect and audit the Concessionaire's books of accounts and other records directly generated at the Airport office or otherwise pertaining directly to this agreement. Knowingly fumishing ' the County a false statement of its gross sales under the provision hereof will constitute a default by the Concessionaire of this agreement and the County may, at its option, declare this contract terminated. 6. Abatement of Minimum Guarantee - In the event that (1) for any reason the number of passengers deplaning on scheduled airline flights at the Airport during any period of thirty (30) consecutive days shall be less than sixty percent (60 %) of the number of such deplaning passengers in the same period of preceding calendar year, or in the event that (2) in the opinion of the Board of County Commissioners, the operation of Lessee's car rental business at the Airport is affected through no fault of Lessee by shortages or other disruption in the supply of automobiles, gasoline, or other goods necessary thereto, and said shortages or other disruptions results in the material diminution in Lessee's gross receipts hereunder for a period of at least thirty (30) days, and said shortages or other disruptions are not caused by a labor dispute with Lessee, such diminution to be satisfactorily demonstrated by Lessee to the Board Cm, then, in either event, the Minimum Guarantee Fee should be abated for the period of of County time om such issioners condition continues to exist. During said period of time, Lessee shall continue to pay to the Lessor ten percent (10%) of gross receipts from the operations hereunder as hereinbefore defined. 7. Investment by the Lessee - All leasehold improvements and their titles shall vest i• immediately in Monroe County upon their acceptance by the County. Furniture, furnishings, fixtures and equipment will remain the personal property of Concessionaire and may be removed upon the 111 termination of the agreement, provided all of its accounts payable to the County are paid at that time, or in the event the County does not purchase same. 8. Leasehold Improvements - Lessee has the right during the term hereof, at its own expense, at any time from time to time: to install, maintain, operate, repair and replace any and all trade fixtures and other personal property useful from time to time in connection with its operation on the Airport, all of which shall be and remain the property of Lessee and may be removed by Lessee prior to or within a reasonable time after expiration of the term of this agreement; provided, however, that Lessee shall repair any damage to the premises caused by such removal. The failure to remove trade fixtures or other personal property shall not constitute Lessee a hold -over, but all such property not removed within ten (10) days after Lessee receives 2 1 a written demand for such removal shall be deemed abandoned and thereupon shall be the sole property of the Lessor. Leasehold improvements snail include any installation of walls, partitions. doors and windows. any electrical wiring, panels, conduits. service connections. receptacles or lighting fixtures attached to walls. partitions. ceilings or floor. all interior finish to floors, walls, doors. windows or ceilings; and all floor treatments or coverings, other than carpeting, that is affixed to floors: sanitary disposal lines and sinks. ' commodes, and garbage disposal units;' all heating, air treatment or ventilating distribution systems. including pipes. ducts, venthoods, air handling units and hot water generators: and all refrigerator rooms or vaults and refrigerated waste rooms including refrigeration or ventilating equipment included with same. Any furniture. fixtures, equipment. carpeting and draperies not classified as leasehold improvements above shall be the personal property of the Concessionaire. 9. Damage and Injury - Lessee covenants that it and all of its agents. servants, employees, and independent contractors will use due care and diligence in all of its activities and operations at the Airport and the Concessionaire hereby agrees to repay or be responsible to Monroe County for all damages to the property of the County which may be caused by an act or omission on the part of the Concessionaire, its agents. servants, or employees and except to the extent that such damage to the property is covered by insurance required to be provided by the Concessionaire under any provision hereof, or is provided by Monroe County (except subrogation rights of the County's carrier). Concessionaire shall pay, on behalf of the County. all sums which the County shall become obligated to pay by reason of the fiobility, if any. imposed by law upon the County for damages because of bodily injury. including damages for care and loss of service, including death at any time resulting from bodily injury and because of injury to /or destruction of property, including the loss or use thereof which may be caused by or result from any of the activities, omission, or operations of the Concessionaire, its agents, servants, or employees on the Airport. 1 10. Utilities - Electricity and water will be supplied to the leasehold area by the Lessor. 11. Lessee's Obligations - Lessee covenants and agrees: • (a) to pay the rent and other charges herein reserved at such times and places as the same are payable: (b) to make no alterations, additions or improvements to the demised premises without the prior written consent of Lessor, which consent shall be not be unreasonably 1 withheld; (c) to keep and maintain the demised premises in good condition, order and repair during the term of this agreement, and to surrender the some upon the expiration of the term in the condition in which they are required to be kept, reasonable wear and tear and damage by casualty. not caused by Lessee's negligence. not and civil commotion, 1 excepted; (d) to observe and comply with any and all requirements of the constituted public authorities and with all federal, state or local statutes, ordinances, regulations, and standards applicable to Lessee or its use of the demised premises. including, but not limited to, rules and regulations promulgated from time to time by or at the direction of Lessor for administration of the Airport: (e) to pay all taxes assessed or imposed by any governmental authority upon any building or other improvements erected or installed on the demised premises during the ' term of this agreement and to remit to Lessor for payment to the State any sales or use tax imposed on the rental charge or concession fee: 1 2 EXHIBIT J w Avis September 5, 1986 Agreement 1 1 1 1 1 RENTAL CAR CONCESSION AGREEMENT THIS AGREEMENT, made and entered into this 5th day of I! September , 1986, by and between Monroe County, a municipal corporation organized and existing under the laws of Florida (hereinafter called "Lessor "), and Avis Rent A Car System, Inc., a Delaware corporation, qualified to do business in the State of Florida (hereinafter called "Lessee "); WHEREAS, Lessor desires to grant to Lessee a non - exclusive right to operate an automobile rental concession at and from Key West International Airport at Key West, Florida (hereinafter called the "Airport "; and WHEREAS, Lessor and Lessee desire, in connection with said operations, to provide for the leasing by Lessor to Lessee of certain space in and around the Airline Terminal at the Airport I! for th establishment of a Rental Car Concession to accommodate the Lessee's customers and provide space for the temporary placement of rental ready vehicles and for other purposes in connection with said operations, all as hereinafter more specifi- cally provided; ' NOW, THEREFORE, in consideration of the premises and of mutual covenants and promises hereinafter contained, the parties hereto do hereby agree as follows: 1. Premises - Lessor hereby leases to Lessee for its non- exclusive use the rental car counter located in the airline terminal Key West, Monroe County, Florida, said counter contain- ' ing 225 square feet, to be replaced by a new 288 square foot counter /back office area effective November 1, 1985, as shown on Exhibit A attached hereto and made a part hereof; and in addition thereto, hereby provides 30 rental car ready spaces as reflected by the attached exhibit B in area designated "Rental Car Ready Area ". 2. Term - This Agreement is for a term of five years, commencing May 1, 1985. 0 3. Rental and Fees - Lessee, for and during the term hereof, shall pay to Lessor for the use and occupancy of said Basic Premises and for therights and privileges herein granted it at the following scheduled rates and fees: (a). Counter Rental: Counter space rental will be paid for at the following rates: Key West International Airport - $11.12 /sq.ft. /annum Counter rental space includes that space physically enclosed by the counter, side partitions and backwall. These rates, which are currently equal to the airline rental rate for publicly exposed space, will be adjust- ed biennially. This rate includes the operating and maintenance expense directly related to the airline terminal cost center plus allocated administrative cost plus return on investment. In 1984 airline terminal operating, maintenance and allocated administrative costs accounted for $7.09 of the $11.12 rate at Key ' West. The biennial adjustment will equal the actual percentage increase, not to exceed 10%, in the operat- ing, maintenance and administrative components of the floor rental rates. (b). Ready spaces: No charge. (c). Concession Fee: Guaranteed minimum annual conces- sion fee for each contract year of the five (5) year ' term of this concession agreement shall be in the following amounts: ' For the First year of said term: $ 35,496.00. For the Second $ 36,504.00. ' For the Third $ 37,500.00. For the Fourth " If $ 38,496.00. ' For the Fifth " " . $ 39.504.00. The Lessee agrees to pay monthly ten (10) percent of ' gross revenues for the previous month or one twelfth (1/12) the guaranteed annual minimum, whichever is greater. In the event, the total amount paid during any one year period, under this method, exceeds ten ' 2 percent of gross revenues or the annual minimum guaran- tee, whichever is greater, for that one year period, an ' adjustment will be made to the first months fee for e 62 the next subsequent period or, at the end of the fifth ' year, reimbursement will be made within thirty days. A performance bond in the amount of $25,000 (twenty five thou- sand dollars) shall be provided the Board of County Commission- ers and shall be held in escrow as security to ensure confor- mance with the Contract Provisions. It is not the intent of the County to call the bond for rental payments unless there is a ' violation of the Contract. 4. Definition of Gross Receipts - As used herein, the term "gross receipts" shall mean the total sum of money, from ' charges for net time, mileage, and personal accident insurance, paid or payable, whether by cash or credit, (after any discount ' specifically shown on the car rental agreement), by the customer to concessionaire for or in connection with the use of vehicle I P contracted for, delivered or rented to the customer at the airport, regardless of where the payment is made or where the vehicle is returned. The concessionaire for the purpose of its concession rentals shall report all income, both cash and credit, in its monthly gross receipts statement. 5. Accounting Procedures - The concessionaire shall keep records of all sales and revenues, whether for cash or credit, ' whether collected or not from it operations in a manner general- ly accepted as standard to the automobile rental industry ' located on airports. Lessee agrees to operate its business upon the airports so that a duplicate rental agreement invoice, ' serially pre- numbered, shall be issued for each sale or trans- action whether for cash or credit. Lessee further agrees that ' it will make available to Monroe County, a full and complete book of accounts and other records required by the County to provide a true account of all revenues pertaining to its opera- tions under the provisions hereof. The County, acting through its Finance Director or other authorized representative, shall ' have the right to inspect and audit the concessionaire's books 1 3 of accounts and other records in Monroe County, Florida. Know- ingly furnishing the County a false statement of its gross sales under the provisions hereof will constitute a default by conces- sionaire of this agreement and the County, may at its option, declare this contract terminated. 6. Abatement of Minimum Guarantee - In the event that (1) for any reason the number of passengers deplaning on scheduled airline flights at the airport during any period of thirty (30) consecutive days shall be less than sixty percent (60%) of the number of such deplaning passengers in the same period in the preceding calendar year, or in the event that (2) in the opinion of the Board of County Commissioners, the operation of Lessee's car rental business at the airports is affected through no fault of Lessee by shortages or other disruption in the supply of automobiles, gasoline, or other goods necessary thereto, and ' said shortages or other disruption results in the material diminution in Lessee's gross receipts hereunder for a period of ' at least thirty (30) days, and said shortage or other disruption is not caused by a labor dispute with Lessee, such diminution to be satisfactorily demonstrated by Lessee to the Board of County Commissioners then, in either event, the Minimum Guarantee Fee should be abated for the period of time such condition continues to exist. During said period of time, Lessee shall continue to pay to airport ten (10%) of gross receipts from the operations hereunder as hereinbefore defined. 7. Rental Reimbursement - In consideration for the ' concessionaire paying for the demolition of the existing rental counter /office area and the construction of the new counter and ' back office area which shall mean outside walls, interior counter shell and supporting back office wall, connecting doors acrd- IRAAAA4 and the paving of the rental car ready area at Key ' West, which the County acknowledges is its responsibility, the monthly rental due the County as per this agreement will be used to offset the amount paid by the concessionaire to independent contractors for work actually performed on the counter 45.1f4 c at rea * Key West including materials furnished or labor performed in 1 4 connection therewith. The County will contract for the paving of the rental car ready area. Minimum annual guarantee, per- centage fee and square footage rental rate will be fully abated until the concessionaire's prepayment of the construction cost ' of the ready car area paving and rental counter /back office area are recovered. The concessionaire shall cause the keeping of records that will clearly distinguish between cost associated with the construction of the counter shell and leasehold im- provements. The cost of construction will be shared by all concessionaires equally. 8. Investment by the Lessee - All leasehold improvements and their titles shall vest immediately in Monroe County upon their acceptance by the County. Furniture, furnishings, fix- tures and equipment will remain the personal property of conces- sionaire and may be removed upon termination of the agreement, ' provided all its accounts payable to the County are paid at that time, or in the event the County does not purchase same. 9. Leasehold Improvements - Lessee has the right during the term hereof, at its own expense, at any time from time to time: to install, maintain, operate, repair, and replace any and all trade fixtures and other personal property useful from time to time in connection with its opera- tions on the Airport, all of which hall be and remain the property of Lessee and may be removed by Lessee prior to or within a reasonable time after expiration of the term of this Agreement, provided, however, that L. Lessee shall repair any damage to the premises caused ' by such removal. The failure to remove trade fixtures or other personal property shall not constitute Lessee ' a hold -over, but all such property not removed within ten (10) days after Lessee receives a written demand for such removal shall be deemed abandoned and there- upon shall be the sole property of Lessor. Leasehold improvements shall include any installation of walls, partitions, doors and windows, any electrical wiring, panels, 1 5 conduits, service connections, receptacles or lighting fixtures attached to walls, partitions, ceilings, or floor, all interior finish to floors, walls, doors, windows or ceilings; and all floor treatments or covering, other than carpeting, that is affixed to floors; sanitary disposal lines and sinks, commodes, and garbage disposal units; all heating, air treatment or ven- tilating distribution systems, including pipes, ducts, vent - hoods, air handling units and hot water generators; and all refrigerator rooms or vaults and refrigerated waste rooms includ- ing refrigeration or ventilating equipment included with same. Any furniture, fixtures, equipment, carpeting and draperies not t classified as leasehold improvements above shall be the personal property of the concessionaire. ' 10. Damage and Injury - Lessee covenants, that it and all of its agents, servants, employees, and independent contractors, will use due care and diligence in all of its activities and operations at the airport(s) and the concessionaire hereby agrees to repay or be responsible to Monroe County for all damages to the property of the County which may be caused by an act or ' omission on the part of the concessionaire, its agents, servants, or employees and except to the extent that such damage to the property is covered by insurance required to be provided by the concessionaire under any provisions hereof, or is provided by the concessionaire under any provisions hereof, or is provided by ' Monroe County (except subrogation rights of the County's carrier) concessionaire shall pay, on behalf of the County, all sums which the County shall become obligated to pay by reason of the liabil- ity, if any, imposed by law upon the County for damages because of bodily injury, including damages for care and loss of service, including death at any time resulting from bodily injury and because of injury to /or destruction of property, including the loss or use thereof which may be caused by or result from any of the activities, omission, or operations of the concessionaire, ' its agents, servants, or employees on the airports. 11. Other Development of Airport - Monroe County reserves the right to further develop or improve the landing area of the 1 6 1 airports as its sees fit, regardless of the desires or views of the concessionaire, and without interference or hindrance, provided; however, that in no event can the County deprive the concessionaire of reasonable and direct routs of ingress and egress to the premises. 12. Terminal Area Planning - Lessee acknowledges that Monroe County has Master Plans including terminal area revisions. Lessee hereby agrees to cooperate to the fullest with the County, ' especially in those areas of terminal improvements which may at some time cause relocation of rental car facilities. The County ' will provide space for rental car facilities in any new terminal area. Costs for relocation will be borne by the County. 13. Utilities - Electricity and water will be supplied to ' the leasehold area by the Lessor. A monthly fee will be charged for the use of a trash dumpster which will shared by all airline terminal tenants. 14. Lessee's Obligations - Lessee covenants and agrees: ' (a) to pay the rent and other charges herein reserved at such times and places as the same are payable; (b) to pay all charges for the trash dumpster assessed to him; (c) to make no alterations, additions, or improvements to the demised premises without the prior written consent of Lessor, which consent hall not be unreasonable withheld; ' (d) to keep and maintain the demised premises in good condition, order, and repair during the term of this Agreement, ' and to surrender the same upon the expiration of the term in the condition in which they are required to be kept, reasonable wear and tear and damage by casualty, not caused by Lessee's negli- gence, riot and civil commotion, excepted; ' (e) to observe and comply with any and all require- ments of the constituted public authorities and with all federal, state, or local statutes, ordinances, regulations, and standards applicable to Lessee or its use of the demised premises, includ- ing, but not limited to, rules and regulations promulgated from ' time to time by or at the direction of Lessor for administration of the Airport; 7 (f) to pay all taxes assessed or imposed by any governmental authority upon any building or other improvements ' erected or installed on the demised premises during the term of this Agreement; (g) to carry fire and extended coverage insurance, if obtainable, on all fixed improvements erected by Lessee on the demised premises to the full insurable value hereof, it being understood and agreed that for purposes hereof the term "full insurable value" shall be deemed to be that amount for which a prudent owner in like circumstances would insure similar proper- ty, but in no event an amount in excess of Lessee's original cost ' of constructing said fixed improvements; and, (h) to control the conduct, manner, and appearance of ' its officers, agents and employees, and any objection from the Director of Airports concerning the conduct, manner or appearance ' of such persons, concessionaire shall forthwith take steps necessary to remove the cause of the objection. ' 15. Lessor's Inspection and Maintenance - Lessor and its authorized officers, employees, agents, contractors, sub- ' contractors and other representatives shall have the right to enter upon the demised premises for the following purposes: (a) to inspect the demised premises at reasonable ' intervals during regular business hours (or at any time in case of emergency) to determine whether Lessee has complied and is complying with the terms and conditions of this agreement with respect thereto; or ' (b) to perform essential maintenance, repair, relo- cation, or removal of existing underground and overhead wires, pipes, drains, cables and conduits now located on or across the demised premises, and to construct, maintain, repair relocate and remove such facilities in t future if necessary to carry out the master plan of development of the Airport, provided, however, that said work shall in no event disrupt or unduly interfere with the operations of Lessee, and provided further, that the entire cost of such work, including but not 1 8 limited to the cost of rebuilding, removing, relocating, protecting or otherwise modifying any fixed i m improvements at any time erected or installed in or upon the demised premises by Lessor, Lessee or third parties, as a result of the exercise by Lessor of its rights hereunder, and the repair of all damage to such fixed improvements caused thereby, shall be borne solely by Lessor. ' 16. Indemnification - Lessee shall indemnify and hold Lessor forever harmless from and against all liability imposed upon Lessor by reason of legal liability for injuries to persons, or wrongful death, and damages to property caused by Lessee's operations or activities on such premises or elsewhere at the Airport, provided that Lessor shall give Lessee prompt and timely notice of any claim made against Lessor which may result in a judgment against lessor because of such injury or damage and promptly deliver to Lessee any papers, notices, documents, summonses, or other legal process whatsoever served upon Lessor or its agents, and provided, further, that Lessee and its insur- er, or either of them, shall have the right to investigate, compromise, or defend all claims, actions, suits, and proceedings to the extent of Lessee's interest therein; and in connection therewith the parties hereto agree to faithfully cooperate with each other and with Lessee's insurer or agents in any said action. 17. Liability Insurance - The Lessee agrees to indemnity and hold the County of Monroe free and harmless from any and all claims, suits, loss or damage, or injury to persons or property of whatsoever kind and nature in its operation, construction, and maintenance of this concession or in the exclusively occupied area of the concessionaire. A. GENERAL Iry The Lessee shall procure and maintain insurance of the types and to the limits specified in paragraphs (1) through (4) inclu- sive below. 1 9 0 The Lessee shall require each of his subcontractors to procure and maintain, until completion of that subcontractor's work, insurance of the types and to the limits specified in para- graphs (1) through (4) inclusive below. It shall be the respon- sibility of the concessionaire to ensure that all his subcontrac- tors comply with all of the insurance requirements contained herein relating to such subcontractors. B. COVERAGE Except as otherwise stated, the amounts and types of insur- ance shall conform to the following minimum requirements: (1) Workmen's compensation - Coverage to apply for all employees for Statutory Limits in compliance with the applicable state and federal laws. In addition, the policy must include Employers' Liability with a limit of $100,000 each accident. (2) Comprehensive General Liability - Coverage must include: L a. Minimum limits of $100,000 per person and $300,000 per occurrence for Bodily Injury Liability and $25,000 for Property Damage Liability. b. Premises and /or Operations. c. Independent Contractors. d. Products and /or Completed Operations. e. Additional Insured - Monroe County is to specifically be included as an additional insured (including products). (3) Business Auto Policy - Coverage must include: a. Minimum Limits of $100,000 per person and 11 $300,000 per occurrence for Bodily Injury Liability and $25,000 for Property Damage Liability. b. Owned Vehicles. c. Hired and Non -Owned Vehicles. d. Employer Non - Ownership. i (4) Certificate of Insurance - Certificates of all insurance required from the Lessee shall be filed with the County. Certificates from the insurance carrier, stating the types of coverage provided, limits 1! 10 of liability, and expiration dates, shall be filed with the County before operations are commenced. The P required certificates of insurance shall not only name the types of policies provided, but shall also refer specifically to this contract and section and the above paragraphs in accordance with which such insurance is ' being furnished, and shall state that such insurance is as required by such paragraphs of this contract. If the initial insurance expires prior to the completion of the contract, renewal certificates shall be furnished thirty (30) days prior to the date of expiration. 18. Non Discrimination - Lessee shall furnish all services authorized under this agreement on a fair, equal, and non- discriminatory basis to all persons or users thereof, charging fair, reasonable, and non - discriminatory prices for all items and 11 services which it is permitted to sell or render under the provisions hereof. Provided, however, that nothing contained in this paragraph or in any other paragraph of this Agreement shall be construed as requiring the Lessee to seek approval by Monroe County before or after Lessee establishes or alters its rental car rates. 19. Rules and Regulations - Lessee agrees to observe and obey, during the term of the contract, all laws, ordinances, rules and regulations promulgated and enforced by the County and y any other proper authority having jurisdiction over the conduct of the operations at the airports. Within thirty (30) days from th date of this contract, the County shall provide the Lessee a written list of all rules and regulations which it has promulgat- ed up until that time and which will effect the Lessee's opera- tions hereunder. In the even new rules and regulations and contemplated, written notice of same shall be furnished to Lessee, and Lessee will be given thirty (30) days to comply. In the even that Lessee should determine that any contemplated rule 11 or regulation unreasonably hinders him in his operation under this Lease, the Lessee shall so notify the County, and the 11 parties hereto agree that any problems arising incident thereto 11 1 1 EXHIBIT K 2001 Internal Audit T &M allocation 1 1 1 1 1 1 1 1 1 2. Time & mileage allocated ` Findings: L I Monroe County's contracts with on -site rental car agencies define gross receipts to include "charges for net time, mileage, and personal accident insurance,...(after any discount specifically shown on the car rental agreement)..." Avis and Hertz provide certain customers with free loss damage waiver (LDW) coverage (see Exhibit D - Corporate Rental Vehicle Contract), but show no charge for it on corporate car rental agreements. However, they allocate part of their time and mileage revenues to LDW, and do not pay Monroe County its 10% airport access fee on those amounts. In February 2000, Avis allocated $3,062 from Key West, and $616 from Marathon airport rentals to "free" corporate LDW revenues. From May 1999 through April 2000 Hertz allocated I 1 $96,608.72 from time and mileage to "unbundled" LDW. Hertz' allocation cost Monroe County $9,660.87, or 10% of those amounts, in contracted revenue. Car rental agreements have many categories of charges besides time & mileage and personal accident insurance. Thus, some airport authorities define "gross receipts" as the total amount actually charged to the customer by the concessionaire, then specifically list E 1 all exceptions to that definition. Monroe County doesn't receive 10% of true gross receipts as a result of Airport management defining gross receipts so narrowly. See Exhibit E - Hillsborough County Aviation Authority Rental Car - Definition of Gross 1 Receipts. Recommendations: !F° 1 1.On -site rental car agencies should not allocate time and mileage revenue to LDW in calculating the airport access fee due to Monroe County. 2. Airport management should require Avis and Hertz to recalculate airport access fees due from the inception of these contracts, and pay Monroe County the difference. I County Administrator's Response: 1. Future lease agreements will include a prohibition against allocating time and mileage 2 revenue to loss damage waiver coverage in calculating airport fees. 1 . If approved by the legal department, Airport management will recalculate airport access fees and demand payment for the difference. 1 I , I , I 1 1 1 EXHIBIT L Avis 06/20/01 lease amendment AO L 1 1 LEASE AMENDMENT Avis Rent A Car - KWIA THIS LEASE AMENDMENT is made and entered into on the 24) day of t`l , 2001, by and between MONROE COUNTY, a political subdivision of the State of Florida, and the owner of Key West International Airport (KWIA), hereinafter referred to as Lessor, whose address is 3491 South Roosevelt Blvd., Key West, FL 33040, and AVIS RENT A CAR SYSTEM, INC., a corporation authorized to do business in the State of Florida, whose address is Avis Rent A Car System, Inc., 900 Old 1 Country Road, Garden City, New York 11530, hereinafter referred to as Lessee; WHEREAS, on September 5, 1986, the parties entered a lease agreement (the original lease) for a parcel of land at KWIA for Lessee's use for vehicle parking and maintenance; 1 WHEREAS, the original lease - without an extension - will expire on July 31, 2001 while Lessee's KWIA concession agreement with Lessor will not expire until June 30, 2004; and WHEREAS, the parties desire to make the original lease term coextensive with the concession agreement term; now, therefore IN CONSIDERATION of the mutual promises and covenants set forth below, the parties hereto do hereby agree as follows: 1. A copy of the original lease is attached to this lease amendment and made a • part of it. 2. Paragraph two of the original lease is amended to read: The term of this lease begins on August 1, 1986 and terminates on June 30, 2004. 3. Paragraph three of the original lease is amended by the addition of the 1 following: Commencing with the rental year that begins on August 1, 2001, the 1 annual rental is $63,720 ($5,310 per month) plus applicable sales tax. The annual rent for the rental years beginning on August 1st, 2002 and 2003 must be increased by a percentage equal to the percentage increase in the 1 CPI for all urban consumers for the previous calendar year. The rent for the period August 1, 2003 - June 30, 2004, must be reduced by one - twelfth 1 t from what the 12 month rental year amount would be in order to properly adjust for the shortened year. 4. Except as provided in this lease amendment, in all other respects the terms and conditions of the original lease remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the • x first above written. ..-- ( ,,) A I , , - r f l MONROE COUNTY BOARD OF COUNTY .. ■ : '� � NY L. KOLHA&E, CLERK COMMISSIONARS Cir.__ ki e-t....4...s ,i_cf -------- f` Deputy Clerk Mayor /Chairman (SEA AVIS RENT A CAR SYSTEM, INC. ATT ST: ho • as S. Finn 7 JI 1 By ./� Title Assistant Secretary Titl Vice President Jdairportaviskwia APPROVED •, TO R y B I /i.IAI �A �. .// •ii■B gFE • DATE '` 1 1 V1d') o is , 1 VW2•J Ju t,�: 2 1 . L EXHIBIT M Avis June 16, 2004 KWIA 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 LEASE ADDENDUM AGREEMENT Avis Rent A Car System, Inc. THIS lease addendum is entered into by and between Monroe County, a political subdivision of the State of Florida (County) and Avis Rent A Car System, Inc., a corporation (Avis). WHEREAS, Cendant Rental Group, Inc. (Cendant) is the parent company of Avis and Budget Rent A Car System, Inc. (Budget); WHEREAS, Avis and Budget are both tenants at Key West International Airport (KWIA); WHEREAS, Cendant, through its Avis subsidiary, desires to make certain capital improvements to its Avis facility at KWIA at an approximate cost $500,000 to $750,000, in exchange for a lease term extension for the Budget and Avis leases at KWIA; WHEREAS, Secs. 332.08 and 125.35, FS, authorize the County to negotiate airport leases without competitive bidding; now, therefore, IN CONSIDERATION of the mutual covenants and promises set forth below, the parties agree as follows: 1. This agreement is an addendum to the County /Avis lease dated September 5, 1986, as amended in the County /Avis amendment dated June 20, 2001, (collectively the original Avis lease), both of which are attached to this addendum as Exhibit A and made a part of it. 2. a) Avis must make certain capital improvements to facilities leased to Avis in the original Avis lease. The capital improvements required are depicted in Exhibit B which is attached to this addendum and made a part of it. The improvements must be completed within 24 months from the effective date of this addendum, although the time for completion may be extended by the KWIA Director for good cause. 0 b) The parties anticipate that the capital improvements described in subparagraph 2(a) will cost approximately $500,000 to $750,000. Upon Avis furnishing evidence satisfactory to the KWIA Director that an increment of $50,000 has been spent on the Avis facility capital improvement by Cendant, then the term of the original Avis lease shall be extended by one year for each $50,000 spent. Upon completion of the Avis facility capital improvements, and Avis' furnishing of evidence satisfactory to the KWIA Director of the total amount spent, the KWIA Director shall certify in writing the additional years by which the original Avis lease is extended. The KWIA Director's certification will then become part of the terms and conditions of the original Avis lease. If the final increment spent by Avis is Tess than $50,000, then the original Avis lease will be extended by the number of days calculated as a percentage of the year that is equal to the percentage of the final increment paid is to $50,000. c) Avis shall be permitted to use its facility to service, store and park Avis vehicles as well as Budget rent a car. 1 0 3. a) Avis shall maintain all books, records, and documents directly pertinent to performance under this addendum agreement and the Avis original lease (hereafter collectively the Agreement) in accordance with generally accepted accounting principles consistently applied. Each party to this Agreement or their authorized representatives shall have reasonable and timely access to such records of each other party to this Agreement for public records purposes during the term of the Agreement and for four years following the termination of this Agreement. b) Governing Law, Venue, Interpretation, Costs, and Fees. This Agreement shall be governed by and construed in accordance with the Law of the State of Florida applicable to contracts made and to be performed entirely in the State. In the event that any cause of action or administrative proceeding is instituted for the enforcement or interpretation of this Agreement, the parties agree that venue will lie in the appropriate court or before the appropriate administrative body in Monroe County, Florida. The County and Avis agree that, in the event of conflicting interpretations of the terms or a term of this Agreement by or between any of them, the issue shall be submitted to mediation prior to the institution of any other administrative or legal proceeding. c) Severability. If any term, covenant, condition or provision of this Agreement (or the application thereof to any circumstance or person) shall be declared invalid or unenforceable to any extent by a court of competent jurisdiction, the remaining terms, covenants, conditions and provisions of this Agreement shall not be affected thereby; and each remaining term, covenant, condition and provision of the Agreement shall be valid and shall be enforceable to the fullest extent permitted by law unless the enforcement of the remaining terms, covenants, conditions and provisions of this Agreement would prevent the accomplishment of the original intent of this Agreement. The County and Avis agree to reform the Agreement to replace any stricken provision with a valid provision that comes as close as possible to the intent of the stricken provision. d) Attorney's Fees and Costs. The County and Avis agree that in the event any cause of action or administrative proceeding is initiated or defended by any party relative to the enforcement or interpretation of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, court costs, investigative, and out -of- pocket expenses, as an award against the non - prevailing party, and shall include attorney's fees, court costs, investigative, and out -of- pocket expenses in appellate proceedings. Mediation proceedings initiated and conducted pursuant to this Agreement shall be in accordance with the Florida Rules of Civil Procedure and usual and customary procedures required by the circuit court of Monroe County. e) Binding Effect. The terms, covenants, conditions, and provisions of this Agreement shall bind and inure to the benefit of the County and Avis and their respective legal representatives, successors, and assigns. f) Authority. Each party represents and warrants to the other that the execution, delivery and performance of this Agreement have been duly authorized by all necessary County and corporate action, as required by law. 2 g) Adjudication of Disputes or Disagreements. County and Avis agree that all disputes and disagreements shall be attempted to be resolved by meet and confer sessions between representatives of each of the parties. If no resolution can be agreed upon within 30 days after the first meet and confer session, the issue or issues shall be discussed at a public meeting of the Board of County Commissioners. If the issue or issues are still not resolved to the satisfaction of the parties, then any party shall have the right to seek such relief or remedy as may be provided by this Agreement or by Florida law. h) Nondiscrimination. County and Avis agree that there will be no discrimination against any person, and it is expressly understood that upon a determination by a court of competent jurisdiction that discrimination has occurred, this Agreement automatically terminates without any further action on the part of any party, effective the date of the court order. County or Avis agree to comply with all Federal and Florida statutes, and all local ordinances, as applicable, relating to nondiscrimination. These include but are not limited to: 1) Title VI of the Civil Rights Act of 1964 (PL 88 -352) which prohibits discrimination on the basis of race, color or national origin; 2) Title IX of the Education Amendment of 1972, as amended (20 USC ss. 1681 -1683, and 1685- 1686), which prohibits discrimination on the basis of sex; 3) Section 504 of the Rehabilitation Act of 1973, as amended (20 USC s. 794), which prohibits discrimination on the basis of handicaps; 4) The Age Discrimination Act of 1975, as amended (42 USC ss. 6101- 6107) which prohibits discrimination on the basis of age; 5) The Drug Abuse Office and Treatment Act of 1972 (PL 92 -255), as amended, relating to nondiscrimination on the basis of drug abuse; 6) The Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (PL 91 -616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; 7) The Public Health Service Act of 1912, ss. 523 and 527 (42 USC ss. 690dd -3 and 290ee -3), as amended, relating to confidentiality of alcohol and drug abuse patent records; 8) Title VIII of the Civil Rights Act of 1968 (42 USC s. et seq.), as amended, relating to nondiscrimination in the sale, rental or financing of housing; 9) The Americans with Disabilities Act of 1990 (42 USC s. 1201 Note), as maybe amended from time to time, relating to nondiscrimination on the basis of disability; 10) Any other nondiscrimination provisions in any Federal or state statutes which may apply to the parties to, or the subject matter of, this Agreement. i) Cooperation. In the event any administrative or legal proceeding is instituted against either party relating to the formation, execution, performance, or breach of this Agreement, County and Avis agree to participate, to the extent required by the other party, in all proceedings, hearings, processes, meetings, and other activities related to the substance of this Agreement or provision of the services under this Agreement. County and Avis specifically agree that no party to this Agreement shall be required to enter into any arbitration proceedings related to this Agreement. j) Covenant of No Interest. County and Avis covenant that neither presently has any interest, and shall not acquire any interest, which would conflict in any manner or degree with its performance under this Agreement, and that only interest of each is to perform and receive benefits as recited in this Agreement. k) Code of Ethics. County agrees that officers and employees of the County recognize and will be required to comply with the standards of conduct for public officers and employees as delineated in Section 112.313, Florida Statutes, regarding, but not limited to, solicitation or acceptance of gifts; doing business with one's agency; ' 3 1 unauthorized compensation; misuse of public position, conflicting employment or contractual relationship; and disclosure or use of certain information. I) No Solicitation /Payment. The County and Avis warrant that, in respect to itself, it has neither employed nor retained any company or person, other than a bona fide employee working solely for it, to solicit or secure this Agreement and that it has not paid or agreed to pay any person, company, corporation, individual, or firm, other than a bona fide employee working solely for it, any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or making of this Agreement. For the breach or violation of the provision, the Avis agrees that the County shall have the right to terminate this Agreement without liability and, at its discretion, to offset from monies owed, or otherwise recover, the full amount of such fee, commission, percentage, gift, or consideration. m) Public Access. The County and Avis shall allow and permit reasonable access to, and inspection of, all documents, papers, letters or other materials in its possession or under its control subject to the provisions of Chapter 119, Florida Statutes, and made or received by the County and Avis in conjunction with this Agreement; and the County shall have the right to unilaterally cancel this Agreement upon violation of this provision by Avis. n) Non - Waiver of Immunity. Notwithstanding he provisions of Sec. 286.28, Florida Statutes, the participation of the County and Avis in this Agreement and the acquisition of any commercial liability insurance coverage, self- insurance coverage, or local government liability insurance pool coverage shall not be deemed a waiver of immunity to the extent of liability coverage, nor shall any contract entered into by the County be required to contain any provision for waiver. o) Privileges and Immunities. All of the privileges and immunities from liability, exemptions from laws, ordinances, and rules and pensions and relief, disability, workers' compensation, and other benefits which apply to the activity of officers, agents, or employees of any public agents or employees of the County, when performing their respective functions under this Agreement within the territorial limits of the County shall apply to the same degree and extent to the performance of such functions and duties of such officers, agents, volunteers, or employees outside the territorial limits of the County. p) Legal Obligations and Responsibilities: Non - Delegation of Constitutional or Statutory Duties. This Agreement is not intended to, nor shall it be construed as, relieving any participating entity from any obligation or responsibility imposed upon the entity by law except to the extent of actual and timely performance thereof by any participating entity, in which case the performance may be offered in satisfaction of the obligation or responsibility. Further, this Agreement is not intended to, nor shall it be construed as, authorizing the delegation of the constitutional or statutory duties of the County, except to the extent permitted by the Florida constitution, state statute, and case law. q) Non - Reliance by Non - Parties. No person or entity shall be entitled to rely upon the terms, or any of them, of this Agreement to enforce or attempt to enforce any third -party claim or entitlement to or benefit of any service or program contemplated hereunder, and the County and Avis agree that neither the County nor Avis or any agent, officer, or employee of either shall have the authority to inform, counsel, or otherwise 4 F indicate that any particular individual or group of individuals, entity or entities, have entitlements or benefits under this Agreement separate and apart, inferior to, or superior to the community in general or for the purposes contemplated in this Agreement. r) Attestations. Avis agrees to execute such documents as the County may reasonably require, to include a Public Entity Crime Statement, an Ethics Statement, and a Drug -Free Workplace Statement. s) No Personal Liability. No covenant or agreement contained herein shall be deemed to be a covenant or agreement of any member, officer, agent or employee of Monroe County in his or her individual capacity, and no member, officer, agent or employee of Monroe County shall be liable personally on this Agreement or be subject to any personal liability or accountability by reason of the execution of this Agreement. t) Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be regarded as an original, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by singing any such counterpart. u) Section Headings. Section headings have been inserted in this Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not a part of this Agreement and will not be used in the interpretation of any provision of this Agreement. 4. This addendum is part of, and incorporated into, the original Avis lease and supersedes any inconsistent provisions in those original lease. In all other respects the terms and conditions of the original Avis lease remain in full force and effect. 5. This addendum constitutes the parties' final mutual agreement and replaces any prior communications or understandings, whether written or oral. 6. This addendum will take effect on the signature date of the last party to '3 -01e addendum. err /- --\ ? 0 ! / -' : ti %I A' * ESS WHEREOF, the parties hereto have set their hands and seals the day and year ,,,... ,.., V., ,t ,:) 1 '• � %,':yy BOARD OF COUNTY COMMISSIONERS �+ ` � -T tiA IY L. KOLHAGE, CLERK OF MONROE COUNTY, FLORIDA „, A - 3 c o F . BY BY c o ^ ' r C7 I Date uty CiGlerk so. Mayor /Chair rson t - *1 c C p _ ,.y C7; r. 12 (SEAL) A RENT A CAR SYSTEF 1 . 2 m 10 Attest: 2 r . . c N c-, ( / '61.11.7A,,f_ va, /r;� /"vv r*t J CD E Robert Muhs, Assistant Secretary Robert Bouta, Senior Vice President 11 l VIP/ For Properties & Facilities for Cendant Car Rental Group, Inc. Date $—j] an authorized repr entative of Avis Rent A Car System, Inc. jaircendantAvis L APP • I VED .0 • ', FO; 1 5 BY f Y';'‘ 'S OFF1 DATE - 6 7 EXHIBIT N Hertz March 16, 2005 Lease Extension 1 1 1 1 LEASE EXTENSION AGREEMENT KWIA THE HERTZ CORPORATION THIS LEASE EXTENSION agreement is entered into this day of ,,/x 2004 by and between Monroe County, a political subdivision of the State of Flortaa, THE __- hereafter Lessor, and HERTZ CORPORATION, qualified to do business in the State of Florida, hereafter Lessee. WHEREAS, on the 21st day of February, 2001, the parties entered into a car rental lease and concession at the Key West International Airport, hereafter original lease, copy of which is attached to this extension agreement and made a part of it; and WHEREAS, the term of the original agreement was for five years, commencing on ' April 21, 1999, but the parties desire to extend the original agreement term by ten years; now, therefore, IN CONSIDERATION of the mutual promises and covenants set forth below, the parties agree as follows: 1. Paragraph 2 of the original agreement Is amended to read: ' 2. Term. This Agreement is for a term of ten years, commencing on April 21, 2004 and expiring on April 20, 2014. 1 2. Paragraph 3 of the original agreement is amended to read: 3. Rental and Fees Lessee, for and during the term hereof, shall pay to 1 Lessor for the use and occupancy of said Basic Premises and for the rights and privileges herein granted it as follows: (a) Counter space, includes that space physically enclosed by the counter, side partitions and back wall. Rental for this space will be paid for at the rate of - $38.32 per square foot per annum plus tax, with a guaranteed minimum total counter space rent of $4,778.50, per annum, including tax. (b) Office space rental will be paid for at the rate of $30.66 per square foot per annum plus tax, with a guaranteed minimum total counter space rent of $3822.30, per annum, including tax. (c) Car Ready Spaces as described in Exhibit B - no thane. (d) Concession Fee Guaranteed minimum annual concession fee for each contract year of the ten year term of this concession agreement shall be $107,700.00 per year. The Lessee agrees to pay monthly ten percent of gross revenues for the previous month or one twelfth the guaranteed annual minimum, whichever is greater. In the event the total amount paid during any one year period under this method exceeds ten percent of gross revenues or the annual minimum guarantee, whichever Is greater, for that one year period, an adjustment will be made to the first months concession fee for the next subsequent period or, at the end of the tenth year, reimbursement will be made within thirty days. Lessee also agrees to pay to the Lessor $2500 per month, payable in advance by the first of each month, to be used by the County for capital improvements to the existing KWIA terminal building, or a new terminal building, if the BOCC elects to construct a new terminal building. A performance bond in the amount of $25,000.00 shall be provided to the Board of County Commissioners and shall be held in escrow as security to ensure conformance with the contract provisions. It is not the intent of the County to call the bond for rental payments unless there is a violation of the contract. These rates are subject to rates and charges as approved by the BOCC, or with an increase annually, by a percentage equal to the percentage increase in the CPI for urban consumers for the preceding calendar year. In the event the KWIA Public Works area becomes available, Lessee desires to lease the property from the Lessor for twenty years, at appraised Fair Market Value, with a $1,000,000 fee up front. Commencing on the date Hertz leases the Public Works area, the additional $2,500 per month fee will no longer be applicable, per 2(4). Upon possession of the Public Works area, the $2500 per month added fee will terminate. ( -- twee- a Ise- agfees -to- day - Abe- Eeanty- $27500- per- -month - $-30 Ref/ -per year) 7.7 - payable +tt- adirar►ee -byrt# first- ef-eectr- month,- to- bevsed Orthe C oantp - improvements -to - the - existing - K - W1A termrtnat building - tor - a - new terminat the - Ge+ y s -Beefd €er r-- armtntissianers el ects-tQCOnstruct -a-new-termtnat 3. Except as set forth in paragraphs two and three of this lease extension agreement In all other respects the terms and conditions of the original agreement remain in full force and effect. 4. General Insurance Requirements for Airport/Aircraft Activities. Prior to the commencement of work governed by this contract (including the pre- staging of personnel and material), the Vendor shall obtain, at his /her own expense, insurance as specified in the attached schedules, which are made part of this contract. The Vendor will ensure that the insurance obtained will extend protection to all Contractors engaged by the Vendor. The Vendor will not be permitted to commence work govemed by this contract (Including pre - staging of personnel and material) until satisfactory evidence of the required insurance has been furnished to the County as specified below. The Vendor shall maintain the required insurance throughout the entire term of this contract and any extensions specified in any attached schedules. Failure to comply with this provision may result In the immediate suspension of all activities conducted by the Vendor and its Contractors until the required insurance has been reinstated or replaced. The Vendor shall provide, to the County, as satisfactory evidence of the required insurance, either a Certificate of Insurance or a Certified copy of the actual insurance policy. The County, at its sole option, has the right to request a certified copy of any or all insurance policies required by this contract. 1 EXHIBIT 0 Budget 05/17/2000 Concession Agreement • atlib 1 LEASE AND CONCESSION AGREEMENT KEY WEST INTERNATIONAL AIRPORT THIS CONTRACT OF LEASE is made and entered into on the /7 day of / , 2000, by and between MONROE COUNTY, a political subdivision of the State of Florida, hereinafter referred to as Lessor, and BUDGET RENT A CAR SYSTEMS, INC., qualified to do business in the State of Florida, hereinafter referred to as Lessee or Concessionaire; WHEREAS, Lessor desires to grant to Lessee a non - exclusive right to operate an automobile rental concession at and from the Key West International Airport at Key West, Horida. hereinafter referred to as Airport; and WHEREAS, Lessor and Lessee desire, in connection with said operations, to provide for the leasing by Lessor to Lessee of certain space in and around the Airline Terminal at the Airport for the establishment of a Rental Car Concession to accommodate the Lessee's customers and provide space for the temporary placement of rental ready vehicles and for other purposes in connection with said operations, all as hereinafter more specifically provided; now, therefore, IN CONSIDERATION of the premises and of mutual covenants and promises hereinafter contained, the parties hereto do hereby agree as follows: 1. Premises - Lessor hereby leases to Lessee for its non - exclusive use the rental car counter located in the airline terminal at Key West, Monroe County, Florida, said counter containing 135 square feet and office space containing 119 square feet as shown on Exhibit A, and in addition provides 30 rental car ready spaces, as shown on Exhibit B, both exhibits are attached hereto and made a part hereof. 2. Term - This agreement is for a term of five (5) years, commencing on April 21. 1999. 3. Rental and Fees - Lessee, for and during the term hereof, shall pay to Lessor for the use and occupancy of said Basic Premises and for the rights and privileges herein granted it at the following scheduled rates and fees: (a) Counter Counter space rental will be paid for at the follow rates: Key West Airport - $22.25/sq. ft. /per annum + tax. Counter rental space includes that space physically enclosed by the counter, side partitions and backwall. (b) Office Office space rental will be paid for at the follow rates: Key West Airport - $15.88/sq. ft. /per annum + tax. These rates are subject to rates and charges as approved by the BOCC, or with an increase equal to the CPI percentage increase for the prior year. (c) Car Ready Spaces Exhibit B - no charge. 3 0 o O -, (d) Concession Fee Guaranteed minimum annual concession feet ac� year of the five (5) rr- contract y ()year term of this concession agreement shall ber��T�12.t� O per year. The Lessee agrees to pay monthly ten (10) percent of gross reverfor the previous month or one twelfth (1/12) the guaranteed annual minimum, ver" i� c greater. In the event the total amount paid during any one year period'I r 's method exceeds ten percent of gross revenues or the annual minimum„ Ou'ctan , tr whichever is greater, for that one year period, an adjustment will be macj tcgth st 0 months rent for the next subsequent period or, at the end of the fifth year, reimburser nt O will be made within thirty days. • A performance bond in the amount of $25,000 (twenty -five thousand dollars) shall be provided to the Board of County Commissioners and shall be held in escrow as security to ensure conformance with the ► contract provisions. It is not the intent of the County to call the bond for rental payments unless there is a violation of the contract. 4. Definition of Gross Receipts - As used herein, the term "gross receipts" shall mean the total sum of money, from charges for net time, mileage, and personal accident insurance, paid or payable, whether by cash or credit, (after any discount specifically shown on the car rental agreement), by the customer to Concessionaire for or in connection with the use of vehicle contracted for, delivered or rented to the customer at the Airport, regardless of where the payment is made or where the vehicle is returned. The Concessionaire for the purpose of its concession rentals shall report all income, both cash and credit, in its monthly gross receipts statement. 5. Accounting Procedures - The Concessionaire shall keep records of all sales and revenues, whether for cash or credit, whether collected or not from its operations in a manner generally accepted as standard to the automobile rental industry located on Airports. Lessee agrees to operate its business upon the Airport so that a duplicate rental agreement invoice, serially pre- numbered, shall be issued for each sale or transaction whether for cash or credit. Lessee further agrees that it will make available to Monroe County, a full and complete book of accounts and other records required by the County to provide a true account of all revenues pertaining to its operations under the provisions hereof. The County, acting through its Finance Director or other authorized representative, shall have the right to inspect and audit the Concessionaire's books of accounts and other records directly generated at the Airport office or otherwise pertaining directly to this agreement. Knowingly furnishing the County a false statement of its gross sales under the provision hereof will constitute a default by the Concessionaire of this agreement and the County may. at its option, declare this contract terminated. 6. Abatement of Minimum Guarantee - In the event that (1) for any reason the number of ' passengers deplaning on scheduled airline flights at the Airport during any period of thirty (30) consecutive days shall be less than sixty percent (60 %) of the number of such deplaning passengers in the same period of preceding calendar year, or in the event that (2) in the opinion of the Board of ' County Commissioners, the operation of Lessee's car rental business at the Airport is affected through no fault of Lessee by shortages or other disruption in the supply of automobiles, gasoline, or other goods necessary thereto, and said shortages or other disruptions results in the material diminution in Lessee's ' gross receipts hereunder for a period of at least thirty (30) days, and said shortages or other disruptions are not caused by a labor dispute with Lessee, such diminution to be satisfactorily demonstrated by Lessee to the Board of County Commissioners, then, in either event, the Minimum Guarantee Fee should be abated for the period of time such condition continues to exist. During said period of time, Lessee shall continue to pay to the Lessor ten percent (10 %) of gross receipts from the operations hereunder as hereinbefore defined. 7. Investment by the Lessee - All leasehold improvements and their titles shall vest immediately in Monroe County upon their acceptance by the County. Furniture, furnishings, fixtures and equipment will remain the personal property of Concessionaire and may be removed upon the termination of the agreement, provided all of its accounts payable to the County are paid at that time, or in the event the County does not purchase same. 8. Leasehold Improvements - Lessee has the right during the term hereof, at its own expense, at any time from time to time: to install, maintain, operate, repair and replace any and all trade fixtures and other personal property useful from time to time in connection with its operation on the Airport, all of which shall be and remain the property of Lessee and may be removed by Lessee ' prior to or within a reasonable time after expiration of the term of this agreement; provided, however, that Lessee shall repair any damage to the premises caused by such removal. The failure to remove trade fixtures or other personal property shall not ' constitute Lessee a hold -over, but all such property not removed within ten (10) days 2 after Lessee receives a written demand for such removal shall be deemed abandoned and thereupon shall be the sole property of the Lessor. Leasehold improvements shall include any installation of walls, partitions, doors and windows, any electrical wiring, panels, conduits, service connections, receptacles or lighting fixtures attached to walls, partitions, ceilings or floor, all interior finish to floors, walls, doors, windows or ceilings; and all floor treatments or coverings, other than carpeting, that is affixed to floors; sanitary disposal lines and sinks, commodes, and garbage disposal units; all heating, air treatment or ventilating distribution systems, including pipes, ducts, venthoods, air handling units and hot water generators; and all refrigerator rooms or vaults and refrigerated waste rooms including refrigeration or ventilating equipment included with same. Any fumiture, fixtures, equipment, carpeting and draperies not classified as leasehold improvements above shall be the personal property of the Concessionaire. 9. Damage and Injury - Lessee covenants that it and all of its agents, servants, employees, and independent contractors will use due care and diligence in all of its activities and operations at the Airport and the Concessionaire hereby agrees to repay or be responsible to Monroe County for all damages to the property of the County which may be caused by an act or omission on the part of the Concessionaire, its agents, servants, or employees and except to the extent that such 'damage to the property is covered by insurance required to be provided by the Concessionaire under any provision hereof, or is provided by Monroe County (except subrogation rights of the County's carrier), Concessionaire shall pay, on behalf of the County, all sums which the County shall become obligated to pay by reason of the liability, if any, imposed by law upon the County for damages because of bodily injury, including damages for care and loss of service, including death at any time resulting from bodily injury and because of injury to /or destruction of property, including the loss or use thereof which may be caused by or result from any of the activities, omission, or operations of the Concessionaire, its agents, servants, or employees on the Airport. 10. Utilities - Electricity and water will be supplied to the leasehold area by the Lessor. 11. Lessee's Obligations - Lessee covenants and agrees: (a) to pay the rent and other charges herein reserved at such times and places as the same are payable; (b) to make no alterations, additions or improvements to the demised premises without the prior written consent of Lessor, which consent shall be not be unreasonably withheld: (c) to keep and maintain the demised premises in good condition, order and repair during the term of this agreement, and to surrender the same upon the expiration of the term in the condition in which they are required to be kept, reasonable wear and tear and damage by casualty, not caused by Lessee's negligence, riot and civil commotion, excepted; (d) to observe and comply with any and all requirements of the constituted public authorities and with all federal, state or local statutes, ordinances, regulations, and standards applicable to Lessee or its use of the demised premises, including, but not limited to, rules and regulations promulgated from time to time by or at the direction of Lessor for administration of the Airport; (e) to pay all taxes assessed or imposed by any governmental authority upon any building or other improvements erected or installed on the demised premises during the term of this agreement and to remit to Lessor for payment to the State any sales or use tax imposed on the rental charge or concession fee; 1 3 EXHIBIT P Dollar 07/07/1987 Contract RENTAL CAR CONCESSION AGREEMENT THIS AGREEMENT, made and entered into this 74 day of J u t 1t.) , 1987, by and between Monroe County, a a political subdivision of the State of Florida (hereinafter called "Lessor "), and Sundance Carriage Corp. d /b /a Dollar Rent A Car of Key West, qualified to do business in the State of Florida (hereinafter called "Lessee "); WHEREAS, Lessor desires to grant to Lessee a non - exclusive right to operate an automobile rental concession at and from Key West International Airport at Key West, Florida (hereinafter called the "Airport); and WHEREAS, Lessor and Lessee desire, in connection with said operations, to provide for the leasing by Lessor to Lessee of certain space in and around the Airline Terminal at the Airport for the establishment of a Rental Car Concession to accommodate the Lessee's customers and provide space for the temporary placement of rental ready vehicles and for other purposes in connection with said operations, all as hereinafter more specif- ically provided; NOW, THEREFORE, in consideration of the premises and of mutual covenants and promises hereinafter contained, the parties hereto do hereby agree as follows: 1. Premises - Lessor hereby leases to Lessee for its non- exclusive use the rental car counter located in the airline terminal Key West, Monroe County, Florida, said counter contain- [1. ing 70 square feet, to be replaced by a new 288 square foot counter /back office area as shown on Exhibit A, attached hereto and made a part hereof; and in addition thereto, hereby provides 30 rental car ready spaces as reflected by the attached Exhibit B in area designated "Rental Car Ready Area ". 2. Term - This Agreement is for a term of five years, commencing October 15, 1985. 3. Rental and Fees - Lessee, for and during the term hereof, shall pay to Lessor for the use and occupancy of said Basic Premises and for the rights and privileges herein granted it at the following scheduled rates and fees: (a) Counter Rental: Counter space rental will be paid for at the following rates: Key West International Airport - $11.12 /sq.ft. /annum. Counter rental space includes that space physically enclosed by the counter, side partitions and back - wall.These rates, which are currently equal to the airline rental rate for publicly exposed space, will be adjusted biennially. This rate includes the operating and maintenance expense directly related to the airline terminal cost center plus allocated administrative cost plus return on investment. In 1984 airline terminal ' operating, maintenance and allocated administrative costs accounted for $7.09 of the $11.12 rate at Key ' West. The biennial adjustment will equal the actual percentage increase, not to exceed 10%, in the operat- ing, maintenance and administrative components of the floor rental rates. (b) Ready Spaces: No charge. (c) Concession Fee: Guaranteed minimum annual conces- sion fee for each contract year of the five (5) year term of this concession agreement shall be in the following amounts: L . For the First year of said term: $17,748.00 For the Second " 18,252.00 lb For the Third 37,500.00 For the Fourth " 38,496.00 For the Fifth " 39,504.00 The Lessee agrees to pay monthly ten (10) percent of gross revenues for the previous month or one twelfth (1/12) the guaranteed annual minimum, whichever is greater. In the event, the total amount paid during any one year period, under this method, exceeds ten 2 percent of gross revenues or the annual minimum guaran- tee, whichever is greater, for that one year period, an adjustment will be made to the first months fee for the next subsequent period or, at the end of the fifth year, reimbursement will be made within thirty days. (d) Rebatement Program. The rebatement program, along with the payment procedures for Counter Rental and Lb Concession Fees must be reported as indicated on im "Exhibit C" attached hereto. A performance bond in the amount of $25,000 (twenty five thou- ' sand dollars) shall be provided the Board of County Commission- ers and shall be held in escrow as security to ensure confor- mance with the Contract Provisions. It is not the intent of the County to call the bond for rental payments unless there is a violation of the Contract. ' 4. Definition of Gross Receipts - As used herein, the term "gross receipts" shall mean the total sum of money, from ' charges for net time, mileage, and personal accident insurance, paid or payable, whether by cash or credit, (after any discount specifically shown on the car rental agreement), by the customer to concessionaire for or in connection with the use of vehicle contracted for, delivered or rented to the customer at the airport, regardless of where the payment is made or where the vehicle is returned. The concessionaire for the purpose of its concession rentals shall report all income, both cash and credit, in its monthly gross receipts statement. 5. Accounting Procedures - The concessionaire shall keep records of all sales and revenues, whether for cash or credit, whether collected or not from it operations in a manner general- ly accepted as standard to the automobile rental industry located on airports. Lessee agrees to operate its business upon the airports so that a duplicate rental agreement invoice, serially pre- numbered, shall be issued for each sale or trans- action whether for cash or credit. Lessee further agrees that it will make available to Monroe County, a full and complete book of accounts and other records required by the County to F! 3 provide a true account of all revenues pertaining to its opera- tions under the provisions hereof. The County, acting through its Finance Director or other authorized representative, shall have the right to inspect and audit the concessionaire's books of accounts and other records in Monroe County, Florida. Know- ingly furnishing the County a false statement of its gross sales under the provisions hereof will constitute a default by conces- sionaire of this agreement and the County, may at its option, declare this contract terminated. 6. Abatement of Minimum Guarantee - In the event that (1) for any reason the number of passengers deplaning on scheduled airline flights at the airport during any period of thirty (30) consecutive days shall be less than sixty percent (60%) of the number of such deplaning passengers in the same period in the preceding calendar year, or in the event that (2) in the opinion of the Board of County Commissioners, the operation of Lessee's car rental business at the airports is affected through no fault of Lessee by shortages or other disruption in the supply of automobiles, gasoline, or other goods necessary thereto, and said shortages or other disruption results in the material diminution in Lessee's gross receipts hereunder for a period of at least thirty (30) days, and said shortage or other disruption is not caused by a labor dispute with Lessee, such diminution to be satisfactorily demonstrated by Lessee to the Board of County Commissioners then, in either event, the Minimum Guarantee Fee should be abated for the period of time such condition continues to exist. During said period of time, Lessee shall continue to pay to airport ten (10X) of gross receipts from the operations hereunder as hereinbefore defined. 7. Rental Reimbursement - In consideration for the concessionaire paying for the demolition of the existing rental counter /office area and the construction of the new counter and back office area which shall mean outside walls, interior counter shell and supporting back office wall, connecting doors and the paving of the rental car ready area at Key West, which the County acknowledges is its responsibility, the monthly 4 rental due the County as per this agreement will be used to offset the amount paid by the concessionaire to independent contractors for work actually performed on the counter office area at Key West including materials furnished or labor perform- ed in connection therewith. The County will contract for the paving of the rental car ready area. Minimum annual guarantee, percentage fee and square footage rental rate will be fully abated until the concessionaire's prepayment of the construction cost of the ready car area paving and rental counter /back office area are recovered. The concessionaire shall cause the keeping of records that will clearly distinguish between cost associ- ated with the construction of the counter shell and leasehold improvements. The cost of construction will be shared by all concessionaires equally. 8. Investment by the Lessee - All leasehold improvements and their titles shall vest immediately in Monroe County upon their acceptance by the County. Furniture, furnishings, fix - tures and equipment will remain the personal property of conces- sionaire and may be removed upon termination of the agreement, provided all its accounts payable to the County are paid at that time, or in the event the County does not purchase same. 9. Leasehold Improvements - Lessee has the right during the term hereof, at its own expense, at any time from time to time: to install, maintain, operate, repair, and replace any and all trade fixtures and other personal property useful from time to time in connection with its opera- tions on the Airport, all of which hall be and remain the property of Lessee and may be removed by Lessee prior to or within a reasonable time after expiration of the term of this Agreement, provided, however, that Lessee shall repair any damage to the premises caused by such removal. The failure to remove trade fixtures or other personal property shall not constitute Lessee a hold -over, but all such property not removed within ten (10) days after Lessee receives a written demand 1 5 for such removal shall be deemed abandoned and there- upon shall be the sole property of Lessor. ' Leasehold improvements shall include any installation of walls, partitions, doors and windows, any electrical wiring, panels, ' conduits, service connections, receptacles or lighting fixtures attached to walls, partitions, ceilings, or floor, all interior ' finish to floors, walls, doors, windows or ceilings; and all floor treatments or covering, other than carpeting, that is affixed to floors; sanitary disposal lines and sinks, commodes, and garbage disposal units; all heating, air treatment or ven- t tilating distribution systems, including pipes, ducts, vent - hoods, air handling units and hot water generators; and all refrigerator rooms or vaults and refrigerated waste rooms includ- ing refrigeration or ventilating equipment included with same. Any furniture, fixtures, equipment, carpeting and draperies not classified as leasehold improvements above shall be the personal property of the concessionaire. 10. Damage and Injury - Lessee covenants, that it and all of its agents, servants, employees, and independent contractors, will use due care and diligence in all of its activities and operations at the airport(s) and the concessionaire hereby agrees ' to repay or be responsible to Monroe County for all damages to the property of the County which may be caused by an act or omission on the part of the concessionaire, its agents, servants, ' or employees and except to the extent that such damage to the property is covered by insurance required to be provided by the ' concessionaire under any provisions hereof, or is provided by the concessionaire under any provisions hereof, or is provided by Monroe County (except subrogation rights of the County's carrier) concessionaire shall pay, on behalf of the County, all sums which the County shall become obligated to pay by reason of the liabil- ity, if any, imposed by law upon the County for damages because of bodily injury, including damages for care and loss of service, including death at any time resulting from bodily injury and because of injury to /or destruction of property, including the loss or use thereof which may be caused by or result from any of 6 the activities, omission, or operations of the concessionaire, its agents, servants, or employees on the airports. ' 11. Other Development of Airport - Monroe County reserves the right to further develop or improve the landing area of the airports as its sees fit, regardless of the desires or views of the concessionaire, and without interference or hindrance, ' provided; however, that in no event can the County deprive the concessionaire of reasonable and direct routes of ingress and ' egress to the premises. 12. Terminal Area Planning - Lessee acknowledges that Monroe County has Master Plans including terminal area revisions. Lessee hereby agrees to cooperate to the fullest with the County, especially in those areas of terminal improvements which may at some time cause relocation of rental car facilities. The County will provide space for rental car facilities in any new terminal ' area. Costs for relocation will be borne by the County. 13. Utilities - Electricity and water will be supplied to the leasehold area by the Lessor. A monthly fee will be charged for the use of a trash dumpster which will shared by all airline ' terminal tenants. 14. Lessee's Obligations - Lessee covenants and agrees: ' (a) to pay the rent and other charges herein reserved at such times and places as the same are payable; (b) to pay all charges for the trash dumpster assessed I! to him; (c) to make no alterations, additions, or improvements to the demised premises without the prior written consent of Lessor, which consent hall not be unreasonable withheld; (d) to keep and maintain the demised premises in good condition, order, and repair during the term of this Agreement, ' and to surrender the same upon the expiration of the term in the condition in which they are required to be kept, reasonable wear and tear and damage by casualty, not caused by Lessee's negli- gence, riot and civil commotion, excepted; (e) to observe and comply with any and all require- ' ments of the constituted public authorities and with all federal, 1 1 state, or local statutes, ordinances, regulations, and standards ' applicable to Lessee or its use of the demised premises, includ- ing, but not limited to, rules and regulations promulgated from time to time by or at the direction of Lessor for administration of the Airport; (f) to pay all taxes assessed or imposed by any governmental authority upon any building or other improvements erected or installed on the demised premises during the term of 1 this Agreement; (g) to carry fire and extended coverage insurance, if obtainable, on all fixed improvements erected by Lessee on the demised premises to the full insurable value hereof, it being understood and agreed that for purposes hereof the term "full 1 insurable value" shall be deemed to be that amount for which a prudent owner in like circumstances would insure similar proper- ty, but in no event an amount in excess of Lessee's original cost of constructing said fixed improvements; and, 01 (h) to control the conduct, manner, and appearance of its officers, agents and employees, and any objection from the Director of Airports concerning the conduct, manner or appearance of such persons, concessionaire shall forthwith take steps 1 necessary to remove the cause of the objection. 15. Lessor's Inspection and Maintenance - Lessor and its authorized officers, employees, agents, contractors, sub - 1 contractors and other representatives shall have the right to enter upon the demised premises for the following purposes: 1 (a) to inspect the demised premises at reasonable intervals during regular business hours (or at any time ' in case of emergency) to determine whether Lessee has complied and is complying with the terms and conditions of this agreement with respect thereto; or (b) to perform essential maintenance, repair, relo- cation, or removal of existing underground and overhead 1 wires, pipes, drains, cables and conduits now located on or across the demised premises, and to construct, 1 maintain, repair, relocate and remove such facilities 1 8 1 ' in the future if necessary to carry out the master plan of development of the Airport, provided, however, that ' said work shall in no event disrupt or unduly interfere with the operations of Lessee, and provided further, that the entire cost of such work, including but not limited to the cost of rebuilding, removing, relocat- ing, protecting or otherwise modifying any fixed improvements at any time erected or installed in or ' upon the demised premises by Lessor, Lessee or third parties, as a result of the exercise by Lessor of its rights hereunder, and the repair of all damage to such ' fixed improvements caused thereby, shall be borne solely by Lessor. ' 16. Indemnification - Lessee shall indemnify and hold Lessor forever harmless from and against all liability imposed upon Lessor by reason of legal liability for injuries to persons, or wrongful death, and damages to property caused by Lessee's operations or activities on such premises or elsewhere at the Airport, provided that Lessor shall give Lessee prompt and timely ' notice of any claim made against Lessor which may result in a judgment against lessor because of such injury or damage and promptly deliver to Lessee any papers, notices, documents, ' summonses, or other legal process whatsoever served upon Lessor or its agents, and provided, further, that Lessee and its insur- er, or either of them, shall have the right to investigate, compromise, or defend all claims, actions, suits, and proceedings ' to the extent of Lessee's interest therein; and in connection therewith the parties hereto agree to faithfully cooperate with ' each other and with Lessee's insurer or agents in any said action. 17. Liability Insurance - The Lessee agrees to indemnity ' and hold the County of Monroe free and harmless from any and all claims, suits, loss or damage, or injury to persons or property ' of whatsoever kind and nature in its operation, construction, and maintenance of this concession or in the exclusively occupied area of the concessionaire. 4 A. GENERAL The Lessee shall procure and maintain insurance of the types 1 and to the limits specified in paragraphs (1) through (4) inclu- sive below. 1 The Lessee shall require each of his subcontractors to procure and maintain, until completion of that subcontractor's ' work, insurance of the types and to the limits specified in para- graphs (1) through (4) inclusive below. It shall be the respon- sibility of the concessionaire to ensure that all his subcontrac- tors comply with all of the insurance requirements contained herein relating to such subcontractors. B. COVERAGE Except as otherwise stated, the amounts and types of insur- 1 ance shall conform to the following minimum requirements: (1) Workmen's compensation - Coverage to apply for all employees for Statutory Limits in compliance with the applicable state and federal laws. In addition, the ' policy must include Employers' Liability with a limit of $100,000 each accident. (2) Comprehensive General Liability - Coverage must include: a. Minimum limits of $100,000 per person and $300,000 per occurrence for Bodily Injury Liability and $25,000 for Property Damage Liability. ' b. Premises and /or Operations. c. Independent Contractors. ' d. Products and /or Completed Operations. e. Additional Insured - Monroe County is to specifically be included as an additional insured (including products). 1 (3) Business Auto Policy - Coverage must include: a. Minimum Limits of $100,000 per person and ' $300,000 per occurrence for Bodily Injury Liability and $25,000 for Property Damage Liability. b. Owned Vehicles. 1 c. Hired and Non -Owned Vehicles. d. Employer Non - Ownership. 1 10 (4) Certificate of Insurance - Certificates of all insurance required from the Lessee shall be filed with ' the County. Certificates from the insurance carrier, stating the types of coverage provided, limits of liability, and expiration dates, shall be filed with the County before operations are commenced. The ' required certificates of insurance shall not only name the types of policies provided, but shall also refer ' specifically to this contract and section and the above paragraphs in accordance with which such insurance is being furnished, and shall state that such insurance is as required by such paragraphs of this contract. If the initial insurance expires prior to the completion of the contract, renewal certificates shall be furnished thirty (30) days prior to the date of expiration. ' 18. Non Discrimination - Lessee shall furnish all services authorized under this agreement on a fair, equal, and non- discriminatory basis to all persons or users thereof, charging fair, reasonable, and non - discriminatory prices for all items and services which it is permitted to sell or render under the provisions hereof. Provided, however, that nothing contained in this paragraph or in any other paragraph of this Agreement shall be construed as requiring the Lessee to seek approval by Monroe County before or after Lessee establishes or alters its rental ' car rates. 19. Rules and Regulations - Lessee agrees to observe and ' obey, during the term of the contract, all laws, ordinances, rules and regulations promulgated and enforced by the County and y any other proper authority having jurisdiction over the conduct of the operations at the airports. Within thirty (30) days from ' th date of this contract, the County shall provide the Lessee a written list of all rules and regulations which it has promulgat- ed up until that time and which will effect the Lessee's opera- tions hereunder. In the event new rules and regulations are contemplated, written notice of same shall be furnished to ' Lessee, and Lessee will be given thirty (30) days to comply. In 1 11 1 1 ' EXHIBIT Q Dollar rate increase letters 1 1 1 1 1 1 1 1 1 1 1 1 l d i BOARD OF COUNTY COMMISSIONERS r` Mayor Mario Di Gennaro, District 4 O 11. 160 Mayor Pro Tem Dixie M. Spehar, District 1 C UNTY o f 1ON ROE ., _ = � ;' George ent, District z KEY WEST F LORIDA 330 :�� . ±I� Charles gs "Sonny" McCoy, District 3 1305) 294.4641 `•r... .'�1• ►1' �` Sylvia J. Murphy, District 5 Agil? Airports Business Office Key West International Airport 3491 S. Roosevelt Boulevard j Key West, Florida 3 3040 "._± June 4, 2007 DTG (Dollar Rent A Car) PO Box 33167 Tulsa, Oklahoma 74153-1167 Attn: Susan J. Speaker Re: Rent — Key West International Airport Dear Ms. Speaker: Per your lease agreement, rent for the period ofJuly 1, 2007 through June 30, 2008, will be as noted below. The rental amount reflects a 3.4% adjustment. Counter 246.63 Office 179.24 2 " Floor Office 228.13 Service Facility 4,990.82 Tax 423.36 Total Due Monthly $6,068.18 Should you have any questions, please contact us at 305 -295 -5197. 1 Sincerely. 111 31 joetinev_ Maria 1. Ramos I Airports Grants /Finance Coordinator 1 • • _ • • • 0 KEY WEST INTERNATIONAL AIRPORT 3491 S. Roosevelt Boulevard Key West, Florida 33040 (305) 809 -5200 / Fax (305)292 -3578 August 17, 2009 Dollar Rent A Car (DTG) 5330 E. 3 1" Street Tulsa, Oklahoma 74135 To Whom It May Concern: Per your lease agreement with Monroe County for leased space at Key West International Airport, rent for the one year period commencing July 1st, 2009 the increased amount will be ' calculated monthly as noted below: Counter Space - $3,033.49 Adjustment (4.1 %)- $124.37 ' Tax - $236.83 Total Yearly- $3.394.69 ' Monthly - $282.89 Office- $2,204.68 I Adjustment (4.1 %)- $90.39 Tax -5 172.13 Total Yearly- $2,467.20 Monthly - $205.60 I 2 Floor Office - $2,80.5.96 Adjustment (4.1 %)- $115.04 Tax - 5219.07 I Total Yearly - $3,140.07 Monthly - $261.67 Service Facility- 561,387.08 Adjustment-(4.1%)-$2,516.87 Tax - 54,792.79 • Total Yearly - $68,696.74 Monthly - $5,724.72 z d� C We apologize for the delay in this billing. Please submit the adjusted amounts with your next payment If you have questions feel free to contact me at (305) 809 -5200. Sincerely, Kim McGe Sr. Administrative Assistant • A ..P'a /i r • J 7. 1 , 1 KEY WEST INTERNATIONAL AIRPORT 3491 S. Roosevelt Boulevard ' Key West, Florida 33040 (305) 809 -5200 / Fax (305)292 -3578 1 June 10, 2010 1 Dollar Rent A CAR Corrected Office 5330 E 31 Street Space Totals Tulsa, OK 74135 1 To Whom It May Concern: Per your lease agreement with Monroe County for leased space at Key West 1 International Airport, rent for the one year period commencing July l 2010 the increased amounts will be calculated as noted below: Counter Space- $3,033.49 3 /15. 9p Adjustment (2.7 %)- $81.91 Tax - $233.66 ' Total Yearly- $3,349.06 Or Monthly- $279.09 1 Office Space - $2,204.68-7 a , 0-6) C Adjustment (2.7 %)- $59.53 ' ' Tax - $169.82 Total Yearly- $2,434.03 Or Monthly- $202.83 Second Floor Office - $2,805.96 \_ Adjustment (2.7 %)- $75.76 Tax - $216.13 d- F/, 2 Total Yearly- $3,097.85 Or Monthly- $258.16 1 • Service Facility- $63,903.95 / `� � • Adjustment (2.7 %)- $1,725.41 / 6 1 Tax - $4,922.21 Total Yearly- $70,551.57 Or Monthly- $5,879.30 Please be advised that from October of 2009 through June of 2010 there was an 11 overpayment monthly in the amount of $29.53. The total monthly rent amount was $6,445.35 and the amount paid was $6,474.88. There is a total credit due for ' this period in the amount of $265.77 please begin paying the adjusted figures with your July payment and credit that payment with the $265.77 due DTG. If you have questions feel free to contact me at (305) 809 -5200. Sincerely, I Kim McGe Sr. Administrative Assistant 1 1 1 1 1 1 1 1® 1 1 1 1 EXHIBIT R Thrifty rate increase letters 1 1 1 1 1 1 1 1 , -tv I ''' _ --_ pj ! BOARD OF COUNTY COMMISSIONERS ii^ _ ._ Mayor Mario Di Gennaro, District 4 9 ,f 11:x' Mayor Pro Tem Dixie M. Spehar, District 1 ._ 0 U N TY o�M O N RO E ,...,„:-.1347,.,,,,'; George Neugent, District z 1 KEV wESr F LORIDA 33040 ;� "T14: � i Charles "Sonny" McCoy, District 3 + te ,. (305) tea -asap ' •`..1..4 Sylvia J. Murphy, District 5 10 at ' . ; F : e L,h • Airports Business Office I Key West International Airport 3491 S. Roosevelt Boulevard f . `' ' -, Key West, Florida 33040'' i� 7 December 8, 2006 Thrifty Rent a Car — DTG Operations 1 Properties & Contracts 5330 E 31 Street Tulsa, Oklahoma 74135 1 Re: Rent — Key West International Airport I It Per your lease agreement, rent for your counter space is to be adjusted as of January 24, 2007. Rent as noted on the enclosed spreadsheet, reflects a 3.4% increase. I The added concession fee of $2,500.00 per month, remains the same. 1 Should you have any questions, please call this office at 295 -5197. I Cordially, :.,' {1 / I,i,, r 1 Maria I. Ramos Airports Grants /Finance Coordinator 1 Enclosure 1 1 4 „, 1 1 1 1 1 • 1 1 1 1 1 _ 1 1 • 1 L o 1 2 N L d C p I . C 3 L U d c x co co I 2 F-H F-- o v CO M O O) O N ((D O CD I c`7 O I` e CO 0 Cn p N N Q • Q if) C'') • C Q Q - M p O 1,7 N 3 ("\I ch L0 w CO Z V V E a) co C CJ CO is C co a) 0 o • O p V T N coo ch 1 Y7 Cn Mo (1) h L6 LL 4 3 co O M - p • F—i-0 Q • 1 SEP -17 -2008 15:18 From:PROPERTIES 9186693005 To:913052923578 P.1'l t 1' 11 f1 i` KEY WEST INTERNATIONAL AIRPORT 3491 S. Roosevelt Boulevard Key West, Florida 33040 (305)809 -5200 / Fax (305)292 -3578 .fune 24th, 2008 Thrifty CORRECTED TOTAL, MONTHLY FEE 5130 E 3I" Street Tulsa, Oklahoma 74135 hrgif:F17 RE: Lease- Kcy Wcst International Airport Per your lease agreement with Monroe County, rent for the one year period commencing Jnnuary 23rd, 2008, will br calculated as noted below: Yearly Rent-S4,207.74 Adjustment (2.5 %)- $105.19 PROPERTIES • l ax- 5323.44 SEP 0 3 2008 Tutul- $4,636.39 (ONEESSION a D Monthly - $386.37 SEP 0 2 2008 Added fcc- $2S00.00 Aleenosta TiPlAyeb1e Total Monthly Fec- 52,886.37 There has been a change in staff duties and we apologize for the delay in this billing. Please be advised that the difference between the old year monthly rate and the new year monthly rate is 59.43 per month. At this time there is au additional 556.58 due from January 2008 through .tune 211118. Your prompt remittance will be greatly appreciated. If you have questions concerning this matter feel frcc to contact one al the number noted above. "Thank you. 9 ‘-7 Sincere r � )\-- Kim McGee -Sr. Ad inisirative Assistant p‘Vt r �. r � 1 1 KEY WEST INTERNATIONAL AIRPORT 3491 S. Roosevelt Boulevard ' Key West, Florida 33040 (305) 809 -5200 / Fax (305)292 -3578 August 17, 2009 1 DTG) • . 31 Street Tulsa, OK 74135 To Whom It May Concern: Per your lease agreement with Monroe County for leased space at Key West International Airport, rent for the one year period commencing January 24th, 2009 the increased amount will be calculated monthly as noted below: Counter Space- S4,312.93 I ® Adjustment (4.1 %)4176.83 Tax - $336.73 Total Yearly - $4,826.49 ' Monthly - $402.20 ' Your added concession fee remains the same at $2,500.00 per month. We apologize for the delay in this billing. Please submit the adjusted amounts with your next payment If you have questions feel free to contact me at (305) 809 -5200. Sincerely, Kim McGee Sr. Administrative Assistant le 1 1 : • . • ' KEY WEST INTERNATIONAL AIRPORT 3491 S. Roosevelt Boulevard ' Key West, Florida 33040 (305) 809 -5200 / Fax (305)292 -3578 February 10, 2010 I Tty 5330 hrif E. 31" Street Q/ Tulsa, OK 74135 To Whom It May Concern: ' Per your lease agreement with Monroe County for leased space at Key West International Airport, rent for the one year period commencing January 24, 2010 the increased amount will be calculated monthly as noted below: I top Counter Space - $374.15 y y' y 7 . cf'° Adjustment (7.41%)-$10.11• / al /, o - 7 Tax- $28.82 Monthly - $413.08 4/, 6 / /, a o 4 4 q// Added Fee - $2,500.00 Total Monthly - $2,913.08 3 V - <2 ' Your added concession fee remains the same at $2,500 per month. 'yI 95 /2 9/ Y � Please begin paying the adjusted amount with your February payment. M.0 We apologize for the delay in this billing. If you have questions feel free to contact me at (305) 809 -5200. 1 Sincerely, ' im Mc ee Sr. Administrative Assistant 1 ; 1 1 I EXHIBIT S DTG 02/18/04 Rental Car Concession Amendment 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 • ® AMENDMENT TO RENTAL CAR CONCESSION AGREEMENT THIS AMENDMENT AGREEMENT is entered into on this 18th day of February , 2004 by and between Monroe County, a political subdivision of the State of Florida (County) and DTG Operations, Inc., f /k /a Dollar Rent A Car Systems, Inc., (DTG) WHEREAS, the County is the owner of Key West International Airport (KWIA); WHEREAS, DTG is, and has been, a tenant at KWIA since 1987 providing the traveling public with rental vehicles; 1 WHEREAS, DTG desires to have its wholly owned subsidiary, Thrifty Rent A Car, establish a counter at KWIA terminal building together with ready car parking spaces at the 1 KWIA parking lot; WHEREAS, the County is willing to lease DTG the counter space and parking spaces; now, therefore In consideration of the mutual covenants and promises set forth below, the County and DTG agree as follows: 1 1. The concession agreement between the parties dated July 7, 1987, as amended on January 3, 1989, September 24, 2000, and July 15, 2003, hereafter original concession agreement, is attached to this amendment agreement as Exhibit A and made a I part of it. 2. Paragraph 3(a) of the original concession agreement is hereby amended by the addition of the following: The County leases an additional area of 100 square feet adjacent to DTG's existing ' counter for use as a Thrifty Rent A Car counter (the Thrifty premises). The Thrifty premises are depicted on Exhibit B which is attached to and made a part of this amendment agreement. The rent for the Thrifty premises is $38.47 per square foot per year, plus sales tax payable by DTG, or $320.58 per month, plus sales tax, payable monthly in advance on the first of each month. The Thrifty premises rent will increase annually by a percentage equal to the percentage increase in the CPI for urban consumers for the preceding calendar year. In the event of a deflationary CPI, ' no adjustment in the rental rates will be made. DTG is responsible for all construction costs needed to establish the Thrifty counter including telephone removal and the relocation of the Orion Bank ATM. DTG must pay the County a ' concession fee of 10% of all gross Thrifty sales, payable by the 30th of each month for the gross sales of the preceding month. DTG also agrees to pav th o unty $2500 per month, payable in advance by the first of eaonth, to be used by the County solely for capital improvements to the existing KWIA terminal building or a ' new terminal building if the County's Board of County Commissioners elects to construct a new terminal building. The County must provide DTG with 30 additional ready car parking spaces for Thrifty rental cars in the KWIA parking lot. This amendment agreement will terminate on June 30, 2014. 1 1 1 3. Except as set forth in this amendment, all other terms and conditions of the 1 1, original concession agreement remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day 1 and year first above written. (SEAL) BOARD OF COUNTY COMMISSIONERS ATTEST: DANNY L. KOLHAGE, CLERK OF MONROE COUNTY, FLORIDA 1 / E B as........ - By 1 Deputy Clerk ayor /Chairman I (SEAL) DTG OPERATIONS, INC. Attes By // - By 4 I Title Vicki ;I_ V i iman, Secretary Title ... a45 - ' . - . 1 1 )airDTGThrifty 1• 1 1 ti cs - T1 2 O — 0 m r r 1 Z D s rn 0 r.tvE -< N 11 ORN c r) - CO s F IA.. x � ° s 1 oo" � E� P 2t c alp rn AlL 'ROB 0 0 I _ Dee 1 10 1 1 L EXHIBIT T Dollar 07/15/2003 Rental Car Concession 1 Amendment 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 • 1 AMENDMENT TO RENTAL CAR CONCESSION AGREEMENT 1 THIS AMENDMENT AGREEMENT is entered into this 15th day of July, 200310 and 1 between Monroe County, a political subdivision of the State of Florida (County) - T. DTG Operations, Inc., f /k /a Dollar Rent A Car, (DTG) L-SjSfGwtS, l 't?'., i:l WHEREAS, the County is the owner of Key West International Airport (KWIA ; 1 WHEREAS, DTG is, and has been, a tenant at KWIA since 1987 provI ng the traveling public with rental vehicles; 1 WHEREAS, the concession agreement between the parties will expire on June 30, 2004; 1 WHEREAS, the lease between the parties for the service facility dated September 15, 1987, will also expire on June 30, 2004; WHEREAS, in consideration for a 10 year extension of the concession agreement and service facility lease, DTG will undertake certain capital improvements at KWIA that benefit the County, the public using KWIA and DTG; and 1 WHEREAS, the County desires to extend the term of DTG's concession agreement and service facility lease by an additional 10 years; now, therefore 1 In consideration of the mutual covenants and promises set forth below, the County and DTG agree as follows: 1 1. The concession agreement between the parties dated July 7, 1987, as amended on January 3, 1989 and September 24, 2000, hereafter original concession agreement, is attached to this amendment agreement as Exhibit A and made a part of it. 1 The service facility lease agreement between the parties dated September 15, 1987, as amended on October 16, 2002, hereafter the original service facility lease, is attached to this amendment as Exhibit B and made a part of it. 1 2. DTG, at its own expense, agrees to construct the following on its leased premises at KWIA: drainage and paving; restroom upgrade; fencing replacement and auto gate; and landscaping. The improvements are more particularly described on Exhibit C which is attached to and incorporated into this amendment agreement. The improvements described in this paragraph and in Exhibit C must be completed by June 30, 2004, unless the time for completion is extended by the KWIA Director for reasons beyond the control of DTG. 3. The lease terms of the original concession agreement and the original service facility lease are hereby extended until June 30, 2014. 4. Paragraph 3(a) of the original concession agreement is amended to read: 3. a) Rental rate for the counter space of 108 square feet is $25.06 per 1 square foot, which is $2,706.48 per year or $225.54 per month for July 1, 2004 - June 30, 2005. Rental rate for office space of 110 square feet is at 1 1 $17.88 per square foot, which is $1,966.80 per year or $163.90 per month for I July 1, 2004 - June 30, 2005. The rental rate for upstairs office space of 140 square feet (Room 209) is $17.88 per square foot, which is $2,503.20 per year or $208.60 per month for July 1, 2004 - June 30, 2005. Thereafter, the I counter rental rate and the rental rate for the office spaces will adjust annually, effective July 1 of each year, by a percentage equal to the percentage increase in the CPI for urban consumers for the preceding calendar I year. In the event of a deflationary CPI, no adjustment in the rental rates will be made. The rental payments are payable in advance on or before the first business day of each month if paid monthly or on or before the first business day of July if paid annually. DTG shall be responsible for any sales or use 1 taxes assessed on the lease rental payments. 5. Paragraph 3 of the original service area lease is amended to read: 1 3. The monthly rental for the period July 1, 2004 - June 30, 2005 is $4562.94 per month, payable in advance on the first business day of each month. I Thereafter, the service area rental rate will adjust annually, effective July 1 of each year, by a percentage equal to the percentage increase in the CPI for urban consumers for the preceding calendar year. In the event of a deflationary CPI, no adjustment in the rental rates will be made. DTG shall be responsible for any sales 1 or use taxes assessed on the lease rental payments. 6. Except as set forth in this amendment, all other terms and conditions of the original concession agreement and the original facility lease remain in full force and effect. I IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day I and year first above written. (SEAL) BOARD OF COUNTY COMMISSIONERS ATTEST: DANNY L. KOLHAGE, CLERK OF MONROE COUNTY, FLORIDA .• By go c LW 4,,A,-.):w By ,( .L !.i. » 4 De u / � r p V --� _ � S_ 43 Mayo /Chairman (SEAL) . DTG OPERATIONS, I� I Attest: By � : � "� By Jr 14 i Add: id I Title Via; 3. A.A. rvta n. Title A • rl Se c re fax) '' = Si " Jairpolfar -DTG en A PROV • 1 6 1.:-.•:_ O Q A `�AST �FO C c� _ .,, RM (:e= DATE 4a r • FE ch —i'—'.5) 0 1 � CM U = w W O �] ass Q O ° r EXHIBIT U Dollar 2010 rate adjustment letter comparison 1 1 1 1 1 1 1 1 1 1 1 1 'Dollar 2010 rate adjustment letter comparison: li 2010 Ietter Correct 2010 should be #'s I 2010 KWIA #s used used Blue = the #'s red = wrongs #s that should be used used I Counter Space 3,033.49 3,157.86 �\ 85.26 3,033.49 2009 Counter Space CPI @ 2.7% 81.90 124.37 2009 4.1% adjustment Tax @ 7.5% 233.65 243.23 - 3,157.86 2010 sb number calculation II year total $3,349.05 $3,486.36 per month $279.09 $290.53 I office Space 2,204.68 2,295.07 �� 2,204.68 2009 Office Space CPI @ 2.7% 59.53 61.97 90.39 2009 4.1% adjustment Tax @ 7.5% 169.82 176.78 2,295.07 2010 sb number calculation 0 year total $2,434.02 $2,533.81 per month $202.84 $211.15 I 2nd Floor office 2,805.96 2,921.00 _ 2,805.96 2009 2nd floor Space CPI @ 2.7% 75.76 78.87 115.04 2009 4.1% adjustment I Tax @ 7.5% 216.13 224.99 2,921.00 2010 sb number calculation year total $3,097.85 $3,224.86 per month $258.15 $268.74 I Service Facility 63,903.95 63,903.95. _ was computed properly p Y CPI @ 2.7% 1,725.41 1,725.41 1 Tax @ 7.5% 4,922.20 4,922.20 year total $70,551.56 $70,551.56 per month $5,879.30 $5,879.30 6 Variance Dollar '10 year $79,432.48 $79,796.59 $364.11 ill $ '10 monthly $6,619.37 $6,649.72 $30.34 li KWIA 2010 rate adjustment letter sent out to Dollar Rental Car was incorrect. KWIA used the incorrect dollar amount for the 'Counter space', 'Office space', and '2nd floor office' (incorrect numbers in red). The correct #s that should have been used are in Blue. This error resulted in $364.11 not being billed, or $30.34 per month. NOTE: this table compares what was actually sent out (incorrect calculation) versus what should have been sent. In order to see the incorrect number and determine the correct numbers, refer to Dollar adjustment letters 08/17/09 and 06/10/10. 1 1 1 1 ' EXHIBIT V FL DOR Technical Advisement 1 1 1 1 1 1 1 1 1 II -iew Page 1 of 7 1 State of Florida 1 Department of Revenue 2005 -2009 Technical Assistance Advisements Sales and Use Tax ' SUMMARY QUESTION: Whether "concession .fees" paid to Airports under a concession agreement are subject to tax under section 212.0361, F.S.? ANSWER: No. Pursuant to Section 212.02(10)(j), F.S., ' privilege, franchise, or concession fees, or fees for a license to do business, paid to an airport, are not payments for leasing, letting, renting, or granting a license for the use of real property. Therefore, these ' fees are not subject to sales and use tax under Section 212.031, F.S. However, capital improvements required by a lease ' agreement as a condition of occupancy that remain with the lessor after the term of the lease would be considered "rent consideration" for purposes of 212.031, F.S. As such, the value of the improvements would be subject to sales tax under 212.031, E.S. August 8, 2006 Re: Technical Assistance Advisement 06A -024 ' XXX ( "Taxpayer ") FEIN: XX Concession Fees Paid to Airports Sales and Use Tax ' Sections 212.02(10)(j) and 212.031, Florida Statutes ( "F.S. ") Rule 12A- 1.070, Florida Administrative Code ( "F.A.C. ") Dear : ' This response is in reply to your letter dated XX and additional information provided on XX, requesting the Department's issuance of a Technical Assistance Advisement ( "TAA ") pursuant to Section 213.22, ' F.S., and Rule Chapter 12 -11, F.A.C., regarding the Department's position on the issue of concession fees paid to airports. An examination of your letter has established that you have complied ' with the statutory and regulatory requirements for issuance of a TAA. Therefore, the Department is hereby granting your request for issuance of a TAA. ' ISSUE nos://taxiaw.state.fl.us/view.asox?id=15792018dile=sut taa format =3& banner= Sales %20and %20Use... 9/20/2011 1 1 ' EXHIBIT W KWIA Hertz credit approval letters 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 KEY WEST INTERNATIONAL AIRPORT 3491 S. Roosevelt Boulevard 1 Key West, Florida 33040 (305) 809 -5200 / Fax (305)292 -3578 December 29, 2009 Hertz PO Box 26531 1 Oklahoma City, Oklahoma 73126 To Whom It May Concern: Please be advised that you are due at credit in the amount of $8,580.20. The credit is based on a ten month period that Hertz was paying $858.02 per month for additional parking spaces here at KWIA. When paying the next monthly amount please adjust your payment accordingly. Your prompt attention concerning this matter will be appreciated. If you have questions feel free to contact me at (305) 809 -5200. 1 Sincerely, r Kim McGee Sr. Administrative Assistant 1 1 1 1 1 I I I i b 1 . ACCOUNTS PAYABLE ,10 2 09 083349 _ DC41 P008000419 1NVOICF7CKEDITMF'MU TYPE DESCRIPTI GKOSS DISCOUNT NEf ■ 102809 11091TAX 091027 001 12141 12141 102809 11091COUNTER 091027 001 42328 42328 j 102809 11091PARRINO 091027 001 85802 85802 I 102809 11091MISC IMPVTS 091027 001 250000 250000 102809 11091OFFICK RENT 091027 001 33733 33733 1 r[Eg111T1T yon I L NOV 0 3 20)9 J / N( I I , By 1 I 1 me 4 ISlMrcnIRASOOCRUFD4I01'F. I()I. \I. 424004 I 424004 I 1111' 11111111111111111 ?1 1111 II 111111111 721 j — REMOVE DOCUMENT ALONG THIS PERFORATION -- - 1 I I I :wt A.,- .:.01 ;. 6"41 ZLIMT. TUALM ''�,i,.l�M -1 K 1 T1I�T.`I TD^C =Z TT?R' T1'7I R : i • a . . r - MIMI : -. • aigatieleffel a2__. I ADVANTAGE JPMorran Chase Bank. N.A. I 7107 -09 ;°r �n CHECK NO PO Box 26531 sT"" N � 08334946 Oklahoma City. Oklahoma 73126 id Ater 80 Days MOUNT PAY FOUR THOUSAND TWO HUNDRED FORTY DOLLARS FOUR CENTS DATE 10-28-09 V A1 $4,240.04 L H , COUNTY OF MONROE 1H1 AIRPORT FINANCE 4 "kr" 3491 SOUTH ROOSEVELT BLVD `O. KEY WEST FL 33040 1 Al : rimar2l0 *r,. MN). L L 1 1 1 .403,11,Essmcp ^s13 KEY WEST INTERNATIONAL AIRPORT 3491 S. Roosevelt Boulevard ' Key West, Florida 33040 (305) 809 -5200 / Fax (305)292 -3578 1 � May 12, 2010 ,1 - The Hertz Corporation Southeast Florida Region Attn: Mark K. McBee 1 3541 Stone Mountain Highway \i Snellville, GA 30078 1 Dear Mr. McBee, Enclosed please find a copy of a letter dated December 29, 2009 in regards to a credit for payment of additions •arkin• at Hertz is no longer utilizing. The credit at the time of the previous letter was $8,580.20. The additional parking continues to be paid to date. This has resulted in the credit now being $12,012.28 (see copy of April check #0843334). The amount being overpaid monthly is $858.02. We would appreciate your assistance in applying this credit to your May /June and July (partial credit) payments or credit the monthly payment by $858.02 for twelve months. If you have questions feel free to contact me at (305) 809 -5200. Sincerely, ' Kim McG e Sr. Administrative Assistant 1 L 1 i� ' EXHIBIT X Thrifty October 15, 2003 Amendment 1 1 1 1 1 1 1 AMENDMENT TO RENTAL CAR CONCESSION AGREEMENT t y THIS AMENDMENT AGREEMENT is entered into on this /� day of October, 2003 by and between Monroe County, a political subdivision of the State of Florida (County) and DTG Operations, Inc., f /k /a Dollar Rent A Car Systems, Inc., (DTG) WHEREAS, the County is the owner of Key West International Airport (KWIA); WHEREAS, DTG is, and has been, a tenant at KWIA since 1987 providing the traveling public with rental vehicles; WHEREAS, DTG desires to have its wholly owned subsidiary, Thrifty Rent A Car, establish a counter at KWIA terminal building together with ready car parking spaces at the KWIA parking lot; WHEREAS, the County is willing to lease DTG the counter space and parking spaces; now, therefore In consideration of the mutual covenants and promises set forth below, the County and DTG agree as follows: 1. The concession agreement between the parties dated July 7, 1987, as amended on January 3, 1989, September 24, 2000, and July 15, 2003, hereafter original concession agreement, is attached to this amendment agreement as Exhibit A and made a ' part of it. 2. Paragraph 3(a) of the original concession agreement is hereby amended by the addition of the following: The County leases an additional area of 100 square feet adjacent to DTG's existing counter for use as a Thrifty Rent A Car counter (the Thrifty premises). The Thrifty premises are depicted on Exhibit B which is attached to and made a part of this amendment agreement. The rent for the Thrifty premises is $38.47 per square foot per year, plus sales tax payable by DTG, or $320.58 per month, plus sales tax, payable monthly in advance on the first of each month. The Thrifty premises rent will increase annually by a percentage equal to the percentage increase in the CPI for urban consumers for the preceding calendar year. In the event of a deflationary CPI, fr no adjustment in the rental rates will be made. DTG is responsible for all construction costs needed to establish the Thrifty counter including telephone removal and the relocation of the Orion Bank ATM. DTG must pay the County a franchise fee of 10% of all gross Thrifty sales, payable by the 30th of each month for the gross sales of the preceding month. DTG also agrees to pay the County $2500 per month, payable in advance by the first of each month, to be used by the County fr solely for capital improvements to the existing KWIA terminal building or a new terminal building if the County's Board of County Commissioners elects to construct a new terminal building. The County must provide DTG with 30 additional ready car parking spaces for Thrifty rental cars in the KWIA parking lot. This amendment agreement will terminate on June 30, 2014. L 3. Except as set forth in this amendment, all other terms and conditions of the original concession agreement remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year first above written. (SEAL) / = BOARD OF COUNTY COMMISSIONERS ATTEST: !�[' LHAGe,`CLERK OF MONROE COUNTY, FLORIDA l • • 5 ' � f ✓ 1 B ._ C .a��w _ � /�� #14 By ii 0.5 2 42„.4.4.} ...ty : Mayor /Chairman (SEAL) DTG OPERATIONS I C. Attest _ fly (J 1 By By Ail ��1. Title Vic _ 7 1� ✓ytct v, , Title 1 ceATEWRl11"r -a. .. ... 5e"' `A man. , I JairDTGThrifty 1 1 UN. p 'T1OBNE OR MONROE nO , O • PQ %� II d /4 116 / WOF CH1Ef s15 " Date 1 c') u _ 1 t■ CG • U7 _3 O a Z� W --, 4 v L c c I EXHIBIT Y DTG performance bond 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Dollar Thrift Automotive Group Inc. 1 r I OFFICE OF AIRPORT RELATIONS Kim Bias Airport/DBE Coordinator October 8, 2010 DTG Operations, Inc. Direct Dial: (918) 669 -3071 I Facsimile: (918) 669 -3005 E -Mail: kim.bias @dtag.com VIA UPS Ground Delivery I RE: Continuation Certificate - Bond No. 674013016 I Mr. Peter J. Horton Director of Airports Key West International Airport 3491 S Roosevelt Blvd I Key West FL 33040 Dear Mr. Horton: ik Enclosed is the Continuation Certificate for bond number 674013016 in the amount of $25,000.00 on behalf of DTG Operations, Inc. dba Dollar Rent A Car for the period beginning October 23, 2010 and ending October 23, 2011. 1 • Please feel free to contact our office If you have questions or require additional information. Very truly yours, I iiii/ ) Kim Bias 1 1 1 1 1 1 Dollar Thrifty Automotive Group, Inc. 5330 E. 31st Street i P.O. 80. 35985 Tulsa. Oioanoma 74154-0985 918 - 669-3000 1 1. �,. 1 CONTINUATION CERTIFICATE 1 1 Liberty Mutual Insurance Company 1 THE Liberty Mutual Insurance Company (hereinafter called the Surety) hereby continues in force its Bond No. 674013016 in the sum of Twenty Five Thousand & 00 /100's Dollars ($25,000.00), on behalf of DTG Operations, Inc. dba Dollar Rent A Car in favor Board of 1 County Commissioners of Monroe County, FL for the (extended) term beginning on the 23rd day of October, 2010 and ending on the 23rd day of October, 2011 subject to all the covenants and conditions of said bond. 1 This Continuation is executed upon the express condition that the Company's liability tY shall not be cumulative and shall be Iimited at all times by the amount of the penalty stated in I the bond. IN WITNESS WHEREOF, the Company has caused this instrument to be signed by its 1 duly authorized Attorney -in -fact and its corporate seal to be hereto affixed this 21St day of September, 2010. 1 DTG Operations, Inc. dba Dollar Rent A Car Liberty Mutual Insurance Company Principal Surety By: _ V �c�W B � ,f,( 1 Cathy He Y• Y• � -�C i er, ttorne -In -Fact Form G- 23175 -B 1• 1 1 • THIS POWER OF ATTORNEY IS NOT VALID UNLESS IT IS PRINTED ON RED BACKGROUND. 2275359 This Power of Attomey limits the acts of those named herein, and they have no authority to bind the Company except in the manner and to I the extent herein stated. LIBERTY MUTUAL INSURANCE COMPANY 110, BOSTON, MASSACHUSETTS POWER OF ATTORNEY L. KNOW ALL PERSONS BY THESE PRESENTS: That Liberty Mutual Insurance Company (the 'Company'), a Massachusetts stock insurance company, pursuant to and by authority of the By -law and Authorization hereinafter set forth, does hereby name, constitute and appoint BRIGETTE BURGESS, JANET L. JENKINS, DIANE KERN, CATHY HEILIGER, WILLIAM A. GRANT, III, STUART F. DESELMS, JEFFREY W. HOLMES, ALL OF THE CITY OF TULSA, STATE OF OKLAHOMA k , each individually if there be more than one named, its true and lawful attomey -in -fact to make, execute, seal, acknowledge and deliver, for and on its behalf as surety and as its act and deed, any and all undertakings, bonds, recognizances and other surety obl in the penal sum not exceeding FIFTY MILLION AND 00/100 DOLLARS ($ 50,000,000.00 ) each, and the execution of such undertakings, bonds, recognizances and other surety obligations, In pursuance 01 these presents, shall be as binding upon the 6 Company as if they had been duty signed by the president and attested by the secretary of the Company in their own proper persons. That this power is made and executed pursuant to and by authority of the following By -law and Authorization: _ ARTICLE XIII - Execution of Contracts: Section 5. Surely Bonds and Undertakings. I Any officer of the Company authorized for that purpose in writing by the chairman or the president, and subject to such limitations as the chairrnan or the president may prescribe, shall appoint such attorneys -in -fact, as may be necessary to act in behalf of the Company to make, a execute, seal, acknowledge and deliver as surety any and all undertakings, bonds, recognizances and other surety obligations. Such 'C w attorneys -in -fact, subject to the limitations set forth in their respective powers of attomey, shall have full power to bind the Company by their n - o signature and execution of any such instruments and to attach thereto the seal of the Company. When so executed such instruments shall be a m as binding as if signed by the president and attested by the secretary. C sc C O By the following instrument the chairman or the president has authorized the officer or other official named therein to appoint attomeys -in -fact t ,p g Pursuant to Article XIII, Section 5 of the By -Laws, Gamet W. Elliott, Assistant Secretary of Liberty Mutual Insurance Company, is hereby R m authorized to appoint such attorneys -in -fact as may be necessary to act in behalf of the Company to make, execute, seal, acknowledge and , o deliver as surety any and all undertakings, bonds, recognizances and other surety obligations. 0 ,., 17) 0 1- That the By -law and the Authorization set forth above are true copies thereof and are now in full force and effect I 2008 C IN Libe WITNESS rty Mutu WHEREOFInsurance Comp any , this Power has of been af Attorney fixed has thereto been in subPlymouth scribed by an Meeting authorized Pennsylv offi ania cer this 30 or offic ial of day the of Company Janua and ry the corporate seal of C , Q M ' , a G o LIBERTY MUTUAL INSURANCE COMPANY h. C C m " Gamet W. Elliott, Assistant Secretary y o m` COMMONWEALTH OF PENNSYLVANIA ss C . I 0 a COUNTY OF MONTGOMERY o t 06 On this 30th day of January , 2008 , before me, a Notary Public, personally came Gamet W. Elliott, to me known, and acknowledged Mai - that he is an Assistant Secretary of Liberty Mutual Insurance Company; that he knows the seal of said corporation; and that he executed the above 22 ; II I 4" C Power of Attomey and affixed the corporate seal of Liberty Mutual Insurance Company thereto with the authority and at the direction of said corporation. o 2 2 IN TESTIMONY WH P ; . unto subscribed my name and affixed my notarial seal at Plymouth Meeting, Pennsylvania on the day and year t a v first above written. 0. ., ( co > ` i 41 O� K. y CChHA0 EN �+ ` N'CAUnP1 1 /, �� w C I o OF Taosa P e & N;xay Pabst c 00 O a B y Q, � 2--C 14 Z u . ` � P ` .,y ,; Ter sa Pastelia, Notary Public v 0 44 P CERTIFICATE 10 P' " "•� "mASSOaarm w ya.M� I, the undersigned, Assistant ecretary of Liberty Mutual Insurance Company, do hereby certify that the original power of attorney of which the foregoing is a full, true and correct copy, is in full force and effect on the date of this certificate; and I do further certify that the officer or official who executed the said power of attorney is an Assistant Secretary specially authorized by the chairman or the president to appoint attomeys -in -fact as provided in Article XIII, Section 5 of the By -laws of Liberty Mutual Insurance Company. L This certificate and the above power of attorney may be signed by facsimile or mechanically reproduced signatures under and by authority of the following vote of the board of directors of Liberty Mutual Insurance Company at a meeting duly called and held on the 12th day of March, 1980. VOTED that the facsimile or mechanically reproduced signature of any assistant secretary of the company, wherever appearing upon a I • certified copy of any power of attorney issued by the company in connection with surety bonds, shall be valid and binding upon the company with the same force and effect as though manually affixed. IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed the corporate seal of the said company, this 21 S t day of L Sept , 21)10. { By :` % Daey, Ass t Secretary 1 EXHIBIT Z Avis Performance Bond KWIA 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 e- 40111. Travelers Casualty and Surety Company of America 1 TRAVELERS J Hartford, CT 06183 1 CONTINUATION CERTIFICATE FIDELITY OR License No. SURETY BONDS /POLICIES 1 In consideration of $ 213.00 dollars renewal premium, the term of Bond/Policy No. 103116532 in the amount of $ 25,000.00 , issued on behalf of AVIS RENT A CAR SYSTEM, LLC. whose address is 6 Sylvan Way Parsippany, NJ 07054 In favor of MONROE COUNTY, FLORIDA whose address is PO Box 1680 Key West, FL 33040 in connection with Concessionaire Bond - Key West Intn'I APO. Key West FL Is hereby extended to April 30, 2012 subject to all covenants and conditions of said bond/policy This certificate is designed to extend only the term of the bond/policy It does not increase the amount which may be payable thereunder. The aggregate liability of the Company under the said bondrpolicy together with this certificate shall be exactly the same as, and no greater than It would have been. if the said bond/policy had origmaly been written to expire on the date to which it is now being extended. Signed, sealed and dated March 16, 2011 TRA ; ERS CASUALTY AND SURETY COMPANY OF AMERICA By; ` . S. dra M. Martinez Attomey -+` 'Fact 1 F -58 -M (2 -95) L 1 1 1_ WARNING: THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER POWER OF ATTORNEY TRAVELER Farmington Casualty Company St. Paul Mercury Insurance Company Fidelity and Guaranty Insurance Company Travelers Casualty and Surety Company Fidelity and Guaranty Insurance Underwriters, Inc. Travelers Casualty and Surety Company of America St. Paul Fire and Marine Insurance Company United States Fidelity and Guaranty Company St. Paul Guardian Insurance Company Attorney-In Fact No. 223059 Certificate No. 0 0 3 9 8 4 3 7 7 KNOW ALL MEN BY THESE PRESENTS: That St. Paul Fire and Marine Insurance Company, St. Paul Guardian Insurance Company' and St. Paul Mercury Insurance Company are corporations duly organized under the laws of the State of Minnesota, that Farmington Casualty Company, Travelers Casualty and Surety Company, and Travelers Casualty and Surety Company of America are corporations duly organized under the laws of the State of Connecticut, that United States Fidelity and Guaranty Company is a corporation duly organized under the laws of the State of Maryland, that Fidelity and Guaranty Insurance Company is a corporation duly organized under the laws of the State of Iowa, and that Fidelity and Guaranty Insurance Underwriters, Inc., is a corporation duly organized under the laws of the State of Wisconsin (herein collectively called the "Companies "), and that the Companies do hereby make, constitute and appoint Debra J. Doyle, Diane M. O'Leary, Douglas M. Schmude, Geoffrey E. Heekin, James B. McTaggart, Jennifer L. Jakaitis, Judith A. Lucky, Karen E. Bogard, Karen L. Daniel, Kathleen J. Mailes, Kimberly Bragg, Linda M. Iser, Richard A. Moore Jr., Sandra M. Martinez, Sandra M. Nowak, and Susan A. Welsh of the City of _ Chicago , State of Illinois , their true and lawful Attorney(s) -in -Fact, each in their separate capacity if more than one is named above, to sign, execute, seal and acknowledge any and all bonds, recognizances, conditional undertakings and other writings obligatory in the nature thereof on behalf of the Companies in their business of guaranteeing the fidelity of persons, guaranteeing the performance of contracts and executing or guaranteeing bonds and undertakings required or permitted in any actions or proceedings allowed by law. 23rd IN WITNESS WHEREOF, the Compagig eve caused this instrument to be signed and their corporate seals to be hereto affixed, this day of November lZU Farmington Casualty Company St. Paul Mercury Insurance Company Fidelity and Guaranty Insurance Company Travelers Casualty and Surety Company Fidelity and Guaranty Insurance Underwriters, Inc. Travelers Casualty and Surety Company of America St. Paul Fire and Marine Insurance Company United States Fidelity and Guaranty Company St. Paul Guardian Insurance Company 41.SU4 tt 11� 4` O \� P +,Mdyy ''ATV•.°. y�01� 2YP' "Y Or ♦ T a �f `" �v0. , ,:. . ^.. ...: 4e �' 'ate ^ �i P4Oltifr � %Ill 'O ,, ', i m Z CD, �" Yr? ��S EAL o' o`SBat i ® S � 1) a ` °'` :11 rS lN � 1r- State of Connecticut By: Arr. City of Hartford ss. Georg.j Thompson, j ice President On this the 23rd day of November 2010 before me personally appeared George W. Thompson, who acknowledged himself to be the Senior Vice President of Farmington Casualty Company, Fidelity and Guaranty Insurance Company, Fidelity and Guaranty Insurance Underwriters, Inc., St. Paul Fire and Marine Insurance Company, St. Paul Guardian Insurance Company, St. Paul Mercury Insurance Company, Travelers Casualty and Surety Company, Travelers Casualty and Surety Company of America, and United States Fidelity and Guaranty Company, and that he, as such, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing on behalf of the corporations by himself as a duly authorized officer. o,Ter In Witness Whereof, I hereunto set my hand and official seal. 1 TAR t W w— l , • My Commission expires the 30th day of June, 2011. p � � " I * Marie C. Tetreault, Notary Public 1 58440 - 4 - 09 Printed in U.S.A. WARNING: THIS POWER OF ATTORNEY IS INVALID WITHOUTTHE RED BORDER 1 1 ACKNOWLEDGEMENT BY SURETY STATE OF ILLINOIS COUNTY OF KANKAKEE On this 16 day of March, 2011, before me, Kathleen J. Mailes, a Notary Public, within ' and for said County and State, personally appeared Sandra M. Martinez to me personally known to be the Attorney -in -Fact of and for Travelers Casualty and Surety Company of America and acknowledged that she executed the said instrument as the free act and deed of said Company. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, at ' my office in the aforesaid County, the day and year in this certificate first above written. • �' ` Notary Public i the State of Illinois County of Kankakee OFFICIAL SEAL KATHLEEN J. MAILES ' NOTARY PUBUC, STATE OF ILLINOIS MY COMMISSION EXPIRES MAR. 26.2014 1 1 1 1 1 1 Vie EXHIBIT AA ' Avis name change IWO WON SIM WINO NMI CENDANT Car Rental Group Tuesday, October 31, 2006. TO: MONROE COUNTY, FLORIDA Attn: Bevette Moore Airport Business Office Key West International Airport 3491 S. Roosevelt Boulevard 1 Key West, FL 33040 CC: David Stark. RE: Bond No. 103116532 Rider & continuation certificate — Avis Rent A Car System, LLC In favor of Monroe County in connection with concessionaire bond- Key West International Airport, FL Dear Bevette Moore, Please find enclosed the original bond Rider amending the Principal name from Avis Rent A Car System, Inc. to Avis Rent A Car System, LLC effective April 1, 2006. Additionally, please find enclosed the original continuation certificate for the above named bond extended to 1 April 30, 2007. If you have any questions please do not hesitate to contact me at any time. Regards, 1 1 Laura Mariana Wood - Risk Analyst Risk Management & Insurance Department ' 6 Sylvan Way, 2nd Floor, Parsippany, NJ 07054 P: (973) 496 2781/ F: (973) 496 0280 1 laura.wood@avisbudget.com 1 Cendant Car Rental Group, Inc. �,.. WS: 1 Campus Drive • • Parsippany, New Jersey 07054 -0865 L RIDER To be attached to and form part of: Bond Number 103116532 dated 5/1/2005 issued by the TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA in the amount of $ 25.000.00 on behalf of AVIS RENT A CAR SYSTEM, INC. (Principal) and in favor of MONROE COUNTY, FLORIDA (Obligee) Now therefore, it is agreed that in consideration of the premium charged, the attached bond shall be amended as follows: The principal name shall be amended: FROM: Avis Rent A Car System, Inc. TO: Avis Rent A Car System, LLC. It is further understood and agreed that all other terms and conditions of this bond shall remain unchanged. This Rider is to be Effective this 1st day of April, 2006. Signed, Sealed & Dated this 1st day of April, 2006. AVIS RENT A CAR SYSTEM, LLC. By: (Principal) TRAVELERS ' • SUALTY AND SURETY COMPANY OF AMERICA (Surety) By 7 Sandr. artfnez , Attorney -in -Fact • 1 1 ` EXHIBIT BB Tampa's Avis Budget car rental Agreement 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 . ORIGINA[ 1 1 1 1 AGREEMENT FOR ON- AIRPORT CAR RENTAL CONCESSION Tampa International Airport L Company: Avis Budget Car Rental, LLC Board Date: January 7, 2010 L L . Prepared by: Properties and Contracts Administration Attn: Debbie Northington Hillsborough County Aviation Authority P. O. Box 22287 1 Tampa, Florida 33622 1 1 F. Common Fuel System For management and routine maintenance of the common fuel system, Company will be billed its pro rata share of the monthly cost based on Market Share. Any maintenance or repair costs directly attributable to the carelessness, negligence or accident of Company's employees, agents or invitees will be charged to Company. G. Utility Charges Costs for electric service, water, and sanitary sewer will be billed to Company based on its pro rata share of the monthly cost of said services based on Market Share. H. Improvements by Company For the final costs of the improvements referenced in Section 10.2, Company will pay according to its payment plan which will be incorporated into this Agreement by letter. Insurance Premiums Company will reimburse Authority for the annual cost of premiums for property insurance purchased by Authority. 6.2 Concession Fees In addition to and separate from the rent for Premises above, Company will also pay a Concession Fee which will be the greater • of either the Minimum Annual Privilege Fee or Percentage Fee in accordance with the following: A. Minimum Annual Privilege Fee (hereinafter referred to as "MAPF ") For the initial 12 month period of the Agreement, Company agrees to pay Authority the following MAPF: $6,300,000.00. For each subsequent 12 month period, the MAPF will be adjusted by Authority to an amount equal to 80% of the Concession Fee paid the prior twelve months. However, the MAPF will never be lower than the initial 12 month period MAPF. OR B. Percentage Fee 9.5 percent of Company's annual Gross Receipts during the term of this Agreement, said Gross Receipts being hereinafter defined in Section 6.5. Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airport Car Rental Concession 14 • 6.3 Payment of Rent and Concession Fees 1 A. Company will remit its first rent payment to Authority under this Agreement on the Commencement Date, and thereafter rent will be paid on or before the first day of each month. For any period of less than one calendar month that this Agreement will be in effect, rent will be calculated on a pro -rata basis. 1 B. One - twelfth of Company's MAPF due hereunder will be paid in monthly installments, in advance and without demand, on or before the first day of each calendar month after the Commencement Date of this Agreement. For any period of less than one calendar month that this Agreement will be in effect, said MAPF will be calculated on a pro rata basis. C. Company will remit all Percentage Fees due hereunder by the 10 day of the month, beginning with the month immediately following the Commencement Date. 6.4 Waiver of Minimum Annual Privilege Fee In the event that (1) for any reason the number of passengers deplaning on scheduled airline flights at the Airport during any calendar month is less than 75 percent of the number of such deplaning passengers in the same month in the previous year or (2) in the opinion of Authority the operation of Company's car rental business at the Airport is affected, through no fault of Company, by shortages or other disruption in the supply of automobiles, gasoline, or other goods 1 necessary thereto, and said shortages or other disruption results in the material diminution in Company's Gross Receipts hereunder for a period of at least 30 days, and said shortage or other ' disruption is not caused by labor dispute with Company, such diminution to be satisfactorily demonstrated by Company to Authority, and the final decision to be solely that of Authority; then, in either event, the MAPF set forth in Section 6.2(A) herein will be waived for the period of time such condition continues to exist. During said period of time, Company will continue to pay to Authority 9.5 percent of Gross Receipts from the operations hereunder as hereinbefore defined and Authority will credit Company toward future payments the pro rata portion of any MAPF which may have been prepaid. 6.5 Definition of Gross Receipts A. Amounts to be Included. 1. As used herein, the term "Gross Receipts" shall mean the total amount actually charged by Company for or in connection with the use of a vehicle and any additional services or accessories contracted for, delivered, or rented to, or picked up by the customer at the Airport, as shown on the Rental Agreement, Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airport Car Rental Concession 15 1. 1 regardless of where, how (cash, credit, or barter) or by whom the payment is 1 made or where the vehicle is returned. Unless revenues from Company's rental car business are expressly and particularly excluded from "Gross Receipts" under this Agreement, such revenues shall be included in Gross Receipts. Revenues derived from sources similar but not identical to those described herein shall also be included in Gross Receipts unless expressly excluded by this Agreement. L 2. It is understood and agreed that all losses or charge -backs are to be borne solely by Company and Authority is to be paid on Gross Receipts without charge or reduction for costs of losses. 3. Gross Receipts shall include, but is not limited to, time and mileage charges, liability damage waiver, collision damage waiver, personal accident insurance, any other insurance product, cellular phones, child restraints, drop charges, additional driver fees, underage or overage driver, global positioning navigational system services, guaranteed reservations, daily and weekly service fees for toll road passes, third party vehicle comps for promotional services rendered as a travel promoter, agent or otherwise, and all other transactions and charges of whatever nature, including any fees, surcharges and all other charges, rising from or incidental to Company's rental car concession under this Agreement unless expressly excluded by this Agreement. B. Amounts Excluded and Restrictions on Exclusion The term "Gross Receipts" shall not include: 1. The amounts of any federal, state, or municipal sales taxes separately stated on the aft Rental Agreement, collected from customers of Company, and which are payable directly to the taxing authority by Company. The $2.00 per day Florida surcharge is also excludable. No exclusion shall be allowed for taxes levied on Company's activities, facilities, equipment, or real or personal property, payroll taxes, income taxes, taxes on frequent flyer miles paid directly to the airline, license or tag fees, or other charges which recoup operating costs. L Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airport Car Rental Concession 16 1 2. Any sums received by Company from customers or insurance carriers for damage 1 to automobiles or Company property, or for loss, conversion, or abandonment of, or loss of use rentals assessed on such automobiles. 3. Any sums received by reason of Company's disposal of capital assets and /or trade fixtures. 4. Any amounts billed and paid for refueling services by the customer named on the Rental Agreement as the driver of the vehicle. 5 Any discounts separately stated on the Rental Agreement which are granted at the time the rental transaction commences, and are recorded and reported in separately documented accounts from non -excludable discounts. Company forfeits exclusion of all discounts in the event otherwise allowable discounts are commingled with any non - excludable amounts. No exclusion shall be allowed for any amount retained by a third party as a financing discount which may apply by reason of Company's acceptance of credit cards or other credit arrangements. No exclusion shall be allowed for the portion of retroactive rebates, dividends or refunds to any customer upon attainment of a specified volume of rentals attributable to revenue or as part of any other marketing plan which does not list the discount on the Rental Agreement at the commencement of the rental transaction. 6. Customer satisfaction program adjustments applicable to revenues included in Gross Receipts which are subsequently refunded by Company and recorded and reported in a separately documented account from non - excludable adjustments. 1 Company forfeits exclusion of all customer satisfaction program adjustments in the event otherwise allowable adjustments are commingled with any non - excludable 1 amounts. Non - excludable adjustments are those which affect amounts already excludable from Gross Receipts (examples: retail refueling or taxes) since this would result in a duplicate deduction from Gross Receipts. 7. The actual costs of the tolls, traffic tickets, parking tickets, impound fees and 1 towing costs may be excluded. However, all associated administrative fees and charges are Gross Receipts. 1 Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airport Car Rental Concession 17 1 C. Diversion of Gross Receipts Company shall not intentionally divert, through direct or indirect means, any of Company's rental car or related business with Airport's Customers to off airport locations of Company or affiliates of Company without including the Gross Receipts of such transactions, as defined in Section 6.5, in Company's reported Gross Receipts. Any such intentional diversion of Gross Receipts shall constitute a breach of contract and Authority shall have the right to immediately terminate this Agreement upon determination by Authority or its auditors that an intentional diversion exists or has occurred. D. Misrepresentation Company shall not modify its accounting treatment or rename or redefine services or products which under the terms of this Agreement would be subject to the Percentage Fee. Except as provided in Section 6.5(B) all other fees or charges collected from the customer shall be considered Gross Receipts and shall not be withheld from the percentage calculation. Company understands Authority does not support the practice of directly transferring Company's obligation for payment of the Concession Fee due herein to its customers. Except as already referenced herein, Company agrees that if such additional charges or fees are collected from the customer for the purpose of collecting the concession fee due herein, such fees will be disclosed to the customer at the time of rental. If indicated on the Rental Agreement, the preferred language to indicate such fees is, as "Company's cost of doing business at the Airport", and shall not otherwise be represented as an Airport tax. 6.6 Monthly Reports Within ten days after close of each calendar month of the term of this Agreement, Company shall submit to Authority, in a form as shown on Exhibit I, Monthly Reporting Forms, attached hereto and by this reference made a part hereof, and with detail satisfactory to Authority, a statement of its Gross Receipts which details (i) Gross Revenues for the prior calendar month (ii) separately identifies any exclusions from Gross Revenues as provided herein to calculate Gross Receipts upon which the percentage payments to Authority set forth in Section 6.2(b) are computed; (iii) Gross Receipts per brand operating at the Airport (iv) lists the number of rental transactions, rental transaction days and average rental price occurring during the calendar month; and (v) is signed by an authorized official of Company. This form may be required to be submitted electronically in the future. In addition, each month Company shall provide Authority with a computer text file recorded on a compact disc (CD) or transmitted via email that details monthly sales information by contract number, as outlined in Exhibit J, Rentals for Tampa International Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airport Car Rental Concession 18 1 . Airport, Month 20XX, attached hereto and by this reference made a part hereof. The monthly 1 sales detail presented in Exhibit J must agree with the total amounts reported on Exhibit I. The parties recognize Authority will incur additional administrative costs if Company is late in providing all of the monthly information in the monthly statements and CD's or email required by this section and the amount of those costs is difficult to determine with certainty. Consequently, 1 the parties agree the Authority may assess and Company will pay, in addition to all other financial requirements of this Agreement, ten dollars every calendar day for each report Company is late in submitting all of the monthly information in the formats required by this section. Said charge will continue until specific performance is accomplished and shall not be offset against any other amount due Authority as detailed in this Agreement. 6.7 Quarterly Reconciliation of Concession Fee Payments Within thirty days of receipt of Company's gross receipts report for the final month of the 1 2 "d, 3rd, and 4 calendar quarters, Authority will prepare an analysis of the 9.5 percent of Gross Receipts due versus total Concession Fees paid to date. In the event Company's cumulative payments during the year exceed the greater of the cumulative percentage fee due Authority or the cumulative Minimum Annual Privilege Fee due, Authority will issue a credit memo indicating that said overpayment shall be credited to the fees next thereafter due from Company. In the event the Company is not in full compliance with all reporting and payment requirements detailed in this Agreement, the quarterly analysis will be deferred until the Company is in full compliance. 6.8 Annual Reconciliation of Concession Fee Payments Following receipt of the Company's annual audit report as required in Section 8.2, Authority shall prepare and submit to Company a statement showing Gross Receipts for the applicable period; if the sums paid by Company during the said period exceed the Minimum Annual Privilege Fee or 9.5 percent of the Gross Receipts, whichever is greater, Authority will issue a credit memo indicating that said overpayment shall be credited to the fees next thereafter due from Company. If Company has underpaid the Minimum Annual Privilege Fee or 9.5 percent of the Gross Receipts, Authority will invoice Company for the sums due. Said invoice shall be due and payable in ten days after the date of such invoice. L Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airpert Car Rental Concession 19 6.9 Interest on Delinquent Charges or Fees Without waiving any other right available to Authority in the event of default in Company's payment of rents, fees or charges under this Agreement, in the event that Company is delinquent in paying Authority any such rents, fees or charges, for a period of five (5) business days after the payment is due, Authority reserves the right to charge Company interest thereon, from the date such rents, fees or charges became due to the date of payment, at the Federal Reserve Bank of New York prime rate in effect on the date of delinquency or the date the audit report is issued as appropriate plus four percent (FRBNY prime +4 %) or twelve percent (12 %) per annum, whichever is greater. ARTICLE 7 SECURITY FOR PAYMENT 7.1 Security Options To provide security for rents, charges and payments required hereunder, Company will comply with either of the following two options prior to October 1, 2010 and maintain such security in effect during the term of this Agreement: A. Company will post with Authority a separate surety bond to be maintained throughout the term of this Agreement in an amount equal to the fees and charges payable to Authority hereunder for a period of three months. Such bond will be issued by a surety company acceptable to Authority and authorized to do business in the state of Florida, and will be in a form and content satisfactory to Authority; OR B. Company will deliver to Authority a separate irrevocable letter of credit drawn in favor of Authority upon a bank which is satisfactory to Authority and which is authorized to do business in the state of Florida. Said irrevocable letter of credit will be in an amount equal to the fees and charges payable to Authority hereunder for a period of three months. 7.2 Satisfactory Performance Any release of liability of the surety bond or irrevocable letter of credit required pursuant to this Article 7 will be conditioned on the satisfactory performance of all terms, conditions, and covenants contained herein throughout the entire term of this Agreement and continue one year thereafter. Notwithstanding the above, security pursuant to 7.1 will at all times be current. Upon termination of this Agreement, the release of liability of the surety bond or Irrevocable Letter of Credit will not occur until the Authority has accepted the findings of the audit in Section 8.2 hereof or successfully Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airport Car Rental Concession 20 conducted an audit in accordance with Section 8.3 hereof and Company has paid Authority all amounts due and owing in full. ARTICLE 8 ACCOUNTING RECORDS AND AUDITS 8.1 Books and Records Company shall maintain during the term of this Agreement all books of account and records customarily used in this type of business operation, in conformity with generally accepted accounting principles, and for such period of time thereafter as provided herein, unless otherwise approved by Authority. Company shall maintain records and controls pertaining to each Rental Agreement written at the Airport. The Rental Agreement shall be identified to indicate that Tampa International Airport is the originating location. All Rental Agreement forms used by Company in its operations at the Airport shall be sequentially numbered, in a numbering series exclusively for Tampa International. Accounting records of Company shall be stored sequentially, or in such other manner approved by Authority, to provide reasonable and expeditious access for audit purposes hereunder. In the event the Company does not maintain exclusive sequential numbering for Rental Agreements commencing at the Airport, the Company agrees to provide copies of Rental Agreements from other rental locations included in the nonexclusive sequence to Authority or its auditors for the purposes of testing reporting completeness. 8.2 Audit Within 90 days after each annual anniversary of the Commencement Date of this Agreement Company shall provide, at its sole cost and expense, an annual audit report by an independent certified public accountant, licensed in the state of Florida and acceptable to Authority, of monthly Gross Receipts, as defined under Section 6.5. The first such examination shall cover 12 full calendar months from the date of commencement of this Agreement. Each subsequent annual report shall cover successive 12 -month periods. The last such report shall include the last day of operations. There may be no limitation on the scope of the examination that would preclude the auditor from expressing an unqualified opinion as to the correctness and completeness of the reported receipts. The examination shall include a schedule of Gross Receipts and concession fees for each month of Company's operations under this Agreement, prepared in accordance with the comprehensive basis of accounting defined under terms of Agreement and reported in format acceptable to Authority. The auditor shall consider in determining scope, the appropriateness of classification of car rental receipts for Rental Agreements being written at remote Airport or Company locations that fall within Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airport Car Rental Concession 21 the definition of Gross Receipts under Section 6.5. The examination shall be conducted in accordance with generally accepted auditing standards. In addition, the examination shall also comprehend compliance procedures to determine whether accounting records are being maintained in accordance with this section. The auditor shall report such procedures and findings in a separate letter to Authority. Any change in scope from that described above shall be included in the report. Any Percentage Fee due on unreported receipts determined by the certified report are considered due ten days following the invoice date. If the Company has overpaid, a credit memo will be issued by the Authority indicating that said overpayment shall be credited to the fees next thereafter due from Company. Delivery of an audit report finding containing a qualified opinion, or an adverse opinion, or a disclaimer of opinion as defined in the Statements on Auditing Standards, or as same may from time to time be amended or superseded, issued by the Auditing Standards Board of the American Institute of Certified Public Accountants, or any successor board or agency thereto, shall be deemed a material breach of this Agreement. 8.3 Audit By Authority Notwithstanding Company's annual audit requirement hereunder, Authority or its representative shall be permitted to perform audits of all or selected operations including ACDBE participation and examine all such books of account and records at any time during normal business hours, including all federal and state tax returns relating to Company's operations hereunder and including franchisee /licensee records and audits of all business transactions and records of sale at any business locations of Company within three miles of the Airport boundary. If Company utilizes a computerized accounting system, Authority will be allowed to download information from the system for the purpose of verifying Gross Receipts. Company agrees that records and instruments will be available to Airport for at least three years after each annual period. If the books of account and records are kept at locations other than the Airport, Authority shall have the option to have said books and records brought to a location convenient to Authority's auditors to conduct the audit as set forth in this Article or to transport Authority audit team to Company's headquarters for purposes of undertaking said audit. In the event the audit discloses a deficiency of 3% or greater, Company agrees to pay all reasonable expenses of said audit regardless of the location of the audit. Company agrees to deliver to Authority's location all records requested by Authority's auditors within 60 calendar days of the request at the initiation of the audit and to deliver to Authority's location all other records requested during the audit within 14 calendar days. The parties recognize Authority will incur additional costs if records requested by Authority's auditor are not provided in a timely manner and the amount of those costs is difficult to determine with certainty. Consequently, the parties agree Company shall pay Authority ten dollars, in addition to all other contractual financial requirements, for each item in a records request every calendar day for each time Company is Avis Budget Car Rental, LLC February 10, 2010(Final) Agreement for On- Airport Car Rental Concession 22 owe r. EXHIBIT CC .1' DTG COI IMMO ONO Ade PROS TWOOY CERTIFICATE OF INSURANCE Date: (MM /DD/YY) Primary Self Insured 1/28/2011 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY I Lockton Companies, LLC AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER, 5847 San Felipe, Suite 320 Houston, TX 77057 THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE 866 - 260 -3538 (Phone) COVERAGE AFFORDED BY THE POLICIES BELOW. 866 - 492 - 1055 (Fax) INSURERS AFFORDING COVERAGE 1 INSURED: Insurer A: ACE American Insurance Company DTG Operations, Inc. Insurer B: Self Insured Dba Dollar Rent A Car 5330 East 31st Insurer C: AmeriGuard Risk Retention Group, Inc. Tulsa, OK 74135 Insurer D: Indemnity Insurance Co. of NA COVERAGES 1 THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY L REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY BE EXHAUSTED BY PAID CLAIMS. J TYPE OF INSURANCE POLICY NUMBER EFFECTIVE EXPIRATION LIMITS LTR DATE DATE GENERAL LIABILITY EACH OCCURRENCE $ 1,000,000 A X COMMERCIAL GENERAL LIABILITY HDOG25524949 2/1/2011 2/1/2012 FIRE DAMA (ANY ONE FIRE) $ 500,000 X OCCURRENCE PERSONAL & ADV INJURY $ 1,000,000 XCU INCLUDED GENERAL AGGREGATE $ 1,000,000 PRODUCTS /COMP OP.AGG $ 1,000,000 C x EXCESS GENERAL LIABILITY AMGGL110201 2/1/2011 2/1/2012 $ 1,000,000 EA. OCCURRENCE /AGGREGATE I EXCESS OF GENERAL UABILITY POLICY NO HDOG25524949 ABOVE AUTOMOBILE LIABILITY FL Certificate No. 4605 11/25/2010 11/24/2011 Primary Liability extended to Renters: BODILY INJURY - PER PERSON $ 10,000 B X ALL OWNED AUTOS BODILY INJURY- PER ACCIDENT $ 20,000 x HIRED AUTOS PROPERTY DAMAGE - PER ACCIDENT $ 10,000 B X NON -OWNED AUTOS Corporate Agreements 2/1/2011 2/1/2012 Primary Liability extended to Certain Corporate Renters up lo. $100.000 BI per persor4300,000 81 per aaident/$25. 000 PD per accident. B Self Insured 2/1/2011 2/1/2012 DIFFERENCE IN PRIMARY LIMIT AND $1.000,000 B X EXCESS AUTO LIABILITY Self Insured 2/1/2011 2/1/2012 $1, 000,000 EXCESS OF $1.000,000 SELF INSURANCE WORKERS' COMPENSATION WORKERS' COMPENSATION STATUTORY AND EMPLOYERS LIABILITY _ D WLRC46470205 (AOS) 1/1/2011 1/1/2012 EL EACH ACCIDENT $ 1,000,000 A SCFC46470229 (WI) 1/1/2011 1/1/2012 EL DISEASE -EA EMPLOYEE $ 1,000,000 A WLRC46470217 1/1/2011 1/1/2012 EL DISEASE - POLICY LIMIT $ 1,000,000 • L GARAGE LIABILITY AUTO ONLY -EA ACCIDENT OTHER THAN AUTO ONLY A ,, OTHER THAN AUTO ONLY GARH08633745 2/1/2011 2/1/2012 EACH ACCIDENT $ 2,000,000 AGGREGATE $ 2,000,000 REMARKS' DESCRIPTION OF OPERATIONS /LOCATIONSNEHICLES /EXCLUSIONS ADDED BY ENDORSEMENT PROVISIONS: :,HECK ® WAIVER OF SUBROGATION IS GRANTED IN FAVOR OF CERTIFICATE HOLDER ON ALL POLICIES WHERE AND TO THE EXTENT REQUIRED BY WRITTEN CONTRACT BOX WHERE PERMISSIBLE BY LAW. ® CERTIFICATE HOLDER IS NAMED AS AN ADDITIONAL INSURED (EXCEPT FOR WORKERS' COMP /EL) WHERE AND TO THE EXTENT REQUIRED BY WRITTEN CONTRACT. L Re: 3495 S. Roosevelt, Key West, FL CERTIFICATE HOLDER: CANCELLATION: SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE 1 EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. County of Monroe Board of County Commissioners AUTHORIZED REPRESENTATIVE: 1100 Simonton Street C —,- L Key West. FL 33040 L 0 EXHIBIT DD Avis COI KWIA MOM IMO WOO AIM 1TY U - • 1 . Date (MMIOO/YYYY) 7/2/2010 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND AON RISK SERVICES CENTRAL, INC. CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE r DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE _ FICA AON RISK SERVICES, INC. OF MINNESOTA POLICIES BELOW. 8300 NORMAN CENTER DRIVE, SUITE 400 COMPANIES AFFORDING COVERAGE MINNEAPOLIS, MN 55437 -1027 TEL: (866) 283 -7122 COMPANYA CONTINENTAL CASUALTY COMPANY INSURED COMPANY B PV HOLDING CORP. / BUDGET TRUCK RENTAL, LLC. AVIS BUDGET GROUP, INC.; AVIS BUDGET CAR RENTAL, LLC, ITS COMPANY C AMERICAN CASUALTY COMPANY OF READING, PA I SUBSIDIARIES INCLUDING AVIS RENT A CAR SYSTEM, LLC, BUDGET COMPANY D TRANSPORTATION INSURANCE COMPANY RENT A CAR SYSTEM, INC. AND BUDGET TRUCK RENTAL, LLC. 6 SYLVAN WAY COMPANY E ACE PROPERTY & CASUALTY INSURANCE COMPANY PARSIPPANY, NJ 07054 COMPANY F I COMPANY G MVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD I INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL. THE TERMS, EXCLUSIONS AND CONDRIONS OF SUCH POLICIES, LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LIMITS SHOWN ARE AS REQUESTED 1 CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS LTR DATE(MM/DO/YYYY) DATE(MM/DDNYYY) GENERAL LIAggregate ILITY General Aggregate $2,000,000 A GL001603190 7/1/2010 7/1/201 Products- Comp/OP Agg $2,000,000 X Commercial General Liability r Claims Made X Occur Personal Injury _ $2,000,000 I Owners Contractor's Prot Each Occurrence $2,000,000 Fire Damage (Any one fire) $2,000,000 Med Exp (Any one person) SO I A AUTOMOBILE LIABILITY BUA001700830 7/1/2010 7/1/2011 Combined Single Limit $1,000,000 X Any Auto All Owned Autos Bodily Injury (Per person) Scheduled Autos Hired Autos Bodily Injury (Per accident) Non-Owned Autos B SELF INSURED 7/1/2010 7/1/2011 Property Damage L GARAGE LIABILITY _ Auto Only - EA ACpoent S100.000 _ . A Any A GL001603190 7/1/2010 7/1/2011 Other than Auto Only - EA Acc. $100,000 Other than Auto Only - Agg. EXCESS LIABILITY Each Occurrence $4,000,000 I E I Umbrella Form G24907624 7/1/2010 7/1/2011 1 Other than Umbrella Form Aggreg $4,000,000 i C WORKERS COMPENSATION AND 1 W04014101700 - 7/1/2010 7/1/2011 X Statutory L,mts EMPLOYERS LIABILITY D WC401411011745 -CA WC4014101731- 7/1/2010 7/1/2011 Each Accident $1,000,000 Disease • Policy Limit $1,000,000 RETRO Disease - Each Employee $1,000,000 1 Other DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLES /SPECIAL ITEMS Each Occurrence / Aggregate See Attached CERRFICME -- HOLDER GiNCELLA SHOULO ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE COUNTY OF MONROE EXPIRATION DATE THEREOF. THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT. BUT FAILURE TO MONROE COUNTY BOARD OF COMMISSIONERS MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE C/O MONROE COUNTY RISK MANAGEMENT COMPANY ITS AGENTS OR REPRESENTATIVES. 1100 SIMONTON ST. AUTHORIZED REPRESENTATIVE 166 KEY WEST, FL 33040 I c �M Fw 1 �� USA ��a4 atna Certificate Holder: Cert Number: COUNTY OF MONROE 166 I CERTIFICATE HOLDER IS INCLUDED AS AN ADDITIONAL INSURED TO THE EXTENT REQUIRED BY WRITTEN CONTRACT, AS THEIR INTEREST MAY APPEAR. RE: Avis Corporate operations at Key West Airport, Key West, FL. Certificate Holder is included as additional insured ATIMA.THIS CERTIFICATE OF INSURANCE (COI) RELATES TO A POLICY (POLICIES) ISSUED TO THE NAMED INSURED AND IS INTENDED TO DEMONSTRATE COVERAGE AS PROVIDED SOLELY TO THE NAMED INSURED AND IS FOR INFORMATIONAL PURPOSES ONLY. THE CERTIFICATE HOLDER I LISTED ON THIS COI MAY BE INCLUDED AS AN ADDITIONAL INSURED UNDER SUCH POLICY (POLICIES) ONLY TO THE LIMIT THAT SUCH CERTIFICATE HOLDER'S INTEREST APPEARS ONLY IF SUCH INCLUSION IS REQUIRED IN WRITING SPECIFICALLY AND EXPRESSLY STATING THAT SUCH CERTIFICATE HOLDER BE NAMED AS AN ADDITIONAL INSURED UNDER SUCH POLICY (POLICIES). UMBRELLA COVERAGE MAY BE SUBJECT TO DEDUCTIBLE AND /OR SELF INSURANCE. P L L. 1 1 1 1 1 1 1 1 1 1 1 1 VII. AUDITEE RESPONSE c E E , ' I AUDITEE RESPONSE A � County Administrator's response 1 1 1 1 1 1 1 1 1 1 1 irr BOARD OF COUNTY COMMISSIONERS Mayor Heather Carruthers, District 3 Mayor Pro Tem David Rice, District 4 OUNTY o M ON ROE Kim Wigington, District i KEY WEST FLORIDA 33040 George Neugent, District 2 (305 294 -4641 Sylvia ]. Murphy, District 5 Monroe County Board of County Commissioners Office of the County Administrator The Historic Gato Cigar Factory 1100 Simonton Street, Suite 205 Key West, FL 33040 (305) 292-4441 — Phone (305) 292 -4544 — Fax November 9, 2011 Clerk of the Court Ms. Sandra Mathena, CPA, CFE, CIA 500 Whitehead Street Key West, Florida 33040 ' RE: Draft Audit Report of Key West International Airport Revenue: On -Site Rental Agencies Dear Ms. Mathena, On behalf of the Key West International Airport, I would like to thank the Clerk's Office for ' preparing this audit. We learn a lot every time your staff conducts an audit, especially when the issue is something as complicated as the car rental agencies. 1 In 2009, we suspected that we weren't getting all of the revenues that we deserved from the off -site car rental agencies, so we requested an audit of those entities. It's my understanding that this audit ' of the on -site car rental agencies is an offshoot of our request in 2009. Until relatively recently, only one person (Bevette Moore) was handling our airport finance and bookkeeping functions. However, with the growth of the Airport, those duties are now most recently split between 3 individuals, and supervised by our Business Manager. ' Please see our comments included below regarding each of the items identified in this audit. Sincerely, Roman Gastesi, r. 1 Monroe County Administrator 1 1 A.1. Definition of gross receipts for the on -site car rental agencies is too narrow. Reconunendation 1 and 2 Responses: We concur with these recommendations, as we do with all the recommendations of this audit. The definition of gross revenue, as the auditors have pointed out, go back to the original agreements of 1986. This time frame, of course, was well before the internet and our more modern, electronic way of living. No one at that point in time could have envisioned that car rental agencies would have been charging for internet service, GPS, XM satellite ratio, etc. etc. As an editorial note, one wonders if the car rental agencies will start charging extra for the air in 1 the tires. However, if they do, we will be asking for our 10% of that charge. The airport cannot recall this issue when it was brought up in 2001, but when it was brought to our attention in 2009, we made the appropriate changes to the rental car contracts as they expired, specifically at Marathon Airport. In 2003/2004, the emphasis was elsewhere. Avis and Dollar both had ready car areas that had recently passed the 15 year leasehold mark, and they became the property of the airport. At this time, their rental amounts increased nearly 800 per cent: from $6,886 per year to $53,472 per year for Dollar, and from $8,820 per year to $63,720 per year for Avis. In addition to that, after we obtained ownership of the property, we found that more than $1,000,000 of capital improvements would have to be made to those facilities. So, we entered into agreements to continue to collect the increased rental amount, AND put the burden of the capital improvements on the rental car agencies themselves. This resulted in $1,250,000 of capital improvements being made to our property for which the Airport paid absolutely nothing. We also charged the 3 rental car agencies that did not have separate ready -car facilities on site (Thrifty, Budget, and Hertz) each an additional $30,000 per year, which resulted in a total of $90,000 of additional revenue per year, which is still being collected today. So, while we did not choose, at that point in time, to expand the definition of `gross revenue' (although I must admit I don't recall if that was even a consideration or not), we did receive $1,250,000 of capital improvements, plus $90,000 per year for the last 7 years (totaling $630,000), plus the increased rental from 2001 forward for the ready -car sites, as detailed in the table below. c c 1 1 October 27. 2011 ' Page3ofl5 Airport Comments regarding the September 29. 2011 Draft Audit Report of Key West International Revenue: On -Site Car Rental Agencies 1 AGENCY original amt increased amt add'I per year # of years total add Dollar 6,886.00 53,472.00 46,586.00 10 465,860.00 Avis 8,820.00 63,720.00 54,900.00 10 549,000.00 Hertz 30,000.00 7 210,000.00 Budget - - 30,000.00 7 210,000.00 ' Thrifty - RENTAL INCREASE 30,000.00 7 210,000.00 1,644,860.00 CAPITAL IMPROVEMENTS 1,250,000.00 TOTAL VALUE OF RENTAL INCREASES + CAPITAL IMPROVEMENTS 2,894,860.00 1 Perhaps we should have paid closer attention to the 2001 audit comments and tried for the additional $2,067,450.36 in increased fees, as the audit suggests. But since we had just increased fees for $2,894,860 (plus CPI), by going in this direction, we netted significantly more. For example, the Avis service facility amount is now $77,067 per year, and the Dollar service facility is now $65,629, due to the CPI increases, which is not reflected in the table above. However, that was then, and this is now, and the time is right to re- examine this issue, especially since some of those leaseholds will be coming up in the next 2 -3 years. 1 1 1 1 1 October 27. 2011 ' Page 4 of 15 Airport Comments regarding the September 29. 2011 Draft Audit Report of Key West International Revenue: On -Site Car Rental Agencies 1 1 1 A.2. Time & Mileage re- allocation reduces concession revenue by $15,376.11. Recommendation 1 and 2 Responses: We concur with these recommendations, and will turn these issues over to legal staff to collect the amounts owed. Recommendation 3 Response: We concur; we will have legal staff draft language to charge penalties for late payments. 1 Recommendation 4 Response: We concur; we now have adequate staff to accomplish this. 1 1 1 1 1 1 1 1 1 1 1 October 27, 2011 Page So /15 Airport Comments regarding the September 29. 2011 Draft Audi[ Report of Key West International Revenue: On -Site Car Rental Agencies 1 1 B.I. There is not an active contract with Avis Rent A Car System, Inc. Recommendation 1 Response: After checking with legal staff, we are told that we do have a lease agreement with Avis; however, it needs to be amended as soon as possible to reflect the capital improvements that they have made on their service facility and to establish a termination date for their franchise agreement. Without these amendments, we are told that the agreement in place basically serves as a month -to -month contract. Recommendation 2 Response: We concur; we will have the new gross revenue provisions in this lease, as well as any future new leases or addenda. 1 Recommendation 3 Response: We strongly concur with setting up rental car payments as EFT payments. However, before we would agree to having all the checks being sent directly to the Clerk's Finance Department, we would have to meet with the Finance Department to review their procedures to insure that we would be informed of the receipt of funds, along with the dates they arrive, especially if the Airport is going to be charged for the responsibility of monitoring such payments. 1 Recommendation 4 Response: We will consider limiting contracts to shorter time frames. However, since capital 1 improvements are often involved (as they have been in the Dollar and Avis facilities, and with the new Hertz/Teen Center facility), it is difficult to limit these agreements to short term contracts, especially when large capital investments are required. 1 1 1 1 1 1 • 1 October 27. 2011 1 Page 6 of 15 Airport Comments regarding the September 29, 2011 Draft Audit Report of Key West international Revenue: On -Site Car Rental Agencies 1 1 • 1 B.2. Three of the five on -site car rental agency contracts do not state a due or a late date for the monthly rental space payments. Recommendation 1 Response: We concur. We will ask legal staff to include such language in future contracts and contract amendments. 1 Recommendation 2 Response: We concur. We will ask legal staff to include such language in future contracts and contract amendments. Recommendation 3 Response: We strongly concur with setting up rental car rental space (along with concession) payments as 1 EFT payments. However, before we would agree to having all the checks being sent directly to the Clerk's Finance Department, we would have to meet with the Finance Department to review their procedures to insure that we would be informed of the receipt of funds, along with the dates ' they arrive, especially if the Airport is going to be charged for the responsibility of monitoring such payments. 1 1 1 1 1 1 1 1 1 October 27. 2011 Page 7 of 15 Airport Comments regarding the September 19. 2011 Draft Audit Report oj'Key West International Revenue: On -Site Car Rental Agencies 1 1 1 B.3. Four out of the five on -site car rental agency contracts do not state a due or a late date for the monthly concession payments. Recommendation 1 Response: We concur. We will ask legal staff to include such language in future contracts and contract amendments. 1 Recommendation 2 Response: We concur. We will ask legal staff to include such language in future contracts and contract amendments. Recommendation 3 Response: We strongly concur with setting up rental car concession payments as EFT payments. However, ' before we would agree to having all the checks being sent directly to the Clerk's Finance Department, we would have to meet with the Finance Department to review their procedures to insure that we would be informed of the receipt of funds, along with the dates they arrive, 1 especially if the Airport is going to be charged for the responsibility of monitoring such payments. 1 1 1 1 1 1 1 1 1 October 27. 2011 1 Page 8 of 15 Airport Comments regarding the September 29. 2011 Draft Audit Report of Key West International Revenue: On -Site Car Rental Agencies 1 1 1 B.4. The KWIA yearly rate adjustment letters for the on -site car rental agencies are not always being transmitted in a timely manner. Recommendation 1 Response: We concur. We will establish a procedure to transmit all rate increase letters on the same date each year, and in a timely manner. 1 Recommendation 2 Response: We concur. We will copy the Finance Department on all of our rate increase letters. ' Recommendation 3 Response: We will ask legal and OMB staff to help us in this regard, so that we specifically name which CPI will be included in the contract, addenda, or agreements. Upon further review, we find no ' consistency as to what time of the year is used, however, we receive CPI information one time per year from OMB, usually in February. Therefore, we need to tailor our leases to implement CPI in February or March of each year, after this data is received from OMB. We will continue to work to find solutions for these issues. 1 1 1 1 1 1 1 1 October 27, 2011 Page 9 of lS Airport Comments regarding she September 29, 2011 Draft Audi! Report of Key West International Revenue: On -Site Car Rental Agencies 1 E B.S. KWIA has been using an incorrect time period for Thrifty's on -site rental fees. Recommendation 1 Response: We concur. We will establish a procedure to transmit all rate increase letters on the same date each year, and in a timely manner. ' Recommendation 2 Response: We concur. We will copy the Finance Department on all of our rate increase letters. 1 1 1 1 1 October 27. 2011 Page /Ooj15 Airport Comments regarding the September 29. 2011 Draft Audit Report of Key West International Revenue: On-Site Car Rental Agencies c C.1. KWIA's yearly adjustment letter concerning on -site location rates resulted in $1,385.82 being under- billed. Recommendation 1 Response: We concur. We now have a Financial Consultant under contract (Newton & Associates) who we plan to utilize in this and various other functions. Recommendation 2 Response: We concur. ' Recommendation 3 Response: We concur. We will task legal staff with including the recommended language in the contracts, addenda, and agreements. 1 1 1 1 1 1 1 1 1 1 October 27. 2011 ' port e of 15 Airport Comments regarding the September 29. 2011 Draft A udit Report of Key West International Revenue: On -Site Car Rental Agencies C.2. KWIA contracts do not include FL 7.5% tax on the capital improvement fees that make up the rental charges for the on -site car rental agencies. Recommendation 1 Response: We concur. We will inform legal staff of this audit's recommendations. Recommendation 2 Response: 1 We concur. We will inform legal staff of this audit's recommendations. 1 1 1 1 1 1 1 1 1 1 1 1 October 27. 2011 1 Page 12 of lS Airport Comments regarding the September 29, 2011 Droll Audit Report of Key West International Revenue: On -Site Car Rental Agencies 1 1 D. Written policies and procedures. Recommendation 1 Response: We concur. We will consult with our Financial Consultant to establish procedures. Recommendation 2 Response: ' We concur. We will consult with our Financial Consultant to establish procedures. Recommendation 3 Response: We concur. ' Recommendation 4 Response: We concur. 1 1 1 October 27. 2011 ' Page 13 of 15 Airport Comments regarding the September 29. 2011 Draft Audit Report rt o/ Key West International Revenue: On -Site Car Rental Agencies • E.1. Budget, Thrifty, and Avis car rental agencies do not have a separate /individual performance bond for KWIA. ' Recommendation 1 Response: We concur. We will ask for legal opinion from the County Attorney's office. 1 Recommendation 2 Response: We concur. We will ask for legal opinion from the County Attorney's office. Recommendation 3 Response: ' We concur. We will ask for legal opinion from the County Attorney's office. We will research and determine as recommended. 1 1 1 1 1 1 1 1 1 1 October 27. 2011 Page 14 of 15 Airport Comments regarding the September 29. 2011 Draft Audit Report o /'Key West International Revenue: On -Sire Car Rental Agencies 1 1 1 1 E.2. Thrifty and Avis car rental agency may not have adequate coverage. Recommendation 1 Response: ' We concur. We will ask for legal opinion from the County Attorney's office. Recommendation 2 Response: ' We concur. We will ask for legal opinion from the County Attorney's office. Recommendation 3 Response: We concur. We will work with the County's Risk Management department to review the 1 insurance coverage for all the car rental agreements. 1 1 1 1 1 1 1 1 1 1 1 October 27, 2011 Page 15 of 15 Airport Comments regarding the September 29, 2011 Draft Aida Report of West International Revenue: On -Site Car Rental Agencies 1 AUDITEE RESPONSE B 11. Avis car rental's response 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Mike Stanek From: Mike Stanek [mstanek @monroe- clerk.com] Sent: Thursday, October 13, 2011 4:06 PM To: 'Frey, Robert' Subject: RE: KWIA Avis draft response Robert, Thanks for the response Robert. I'll cut your 10/11/11 response and paste it into the report. Michael D. Stanek CIA, CCSA Monroe County Clerk of Courts Internal Audit Department Office: (305) 292 -3591 From: Frey, Robert [mailto:robert.frey @avisbudget.com] Sent: Thursday, October 13, 2011 3:41 PM To: Mike Stanek Subject: RE: KWIA: Avis draft response Mike. You are correct, our stance is that the K records indicated as errors is a reclassification of LDW from T &M to LDW as LDW was part of the package sold to customers which is netted in the T &M amount where it is originally coded in either an A or B transaction and moving the LDW portion of the package to the LDW column where it truly should reside as it is LDW revenue and not T &M revenue. Thanks Robert F. Frey RAC Accounting Manager Avis Budget Group 6 Sylvan Way Parsippany, NJ 07054 Phone: 973 -496 -3307 Fax: 973- 496 -3529 From: Mike Stanek [mailto :mstanek @monroe- clerk.com] Sent: Thursday, October 13, 2011 3:31 PM To: Frey, Robert Subject: RE: KWIA: Avis draft response ' Robert, Is this /below Avis's official response to the finding? Our finding is based upon Avis records that show that $103,229.20 was removed from T &M (which is concessionable) and being re- allocated to LDW (which is non - concessionable) from January 2008 — May 2011. The RA's show an amount for T &M, but nothing /$0 for LDW. The re- allocation of money into LDW is done in the monthly detail report. Contractually time, mileage, and personal accident insurance (after any discount specifically shown on the rental agreement) makes up concessionable revenue. Thanks Robert. 1 am Michael D. Stanek CIA, CCSA N Monroe County Clerk of Courts Internal Audit Department Office: (305) 292 -3591 From: Frey, Robert [ mailto :robert.frey @avisbudget.com] Sent: Tuesday, October 11, 2011 4:17 PM To: Mike Stanek Subject: RE: KWIA: Avis draft response Mike, I have an issue with the findings because our K records represent the reclassification of revenue relating to our packages sold to our customers. These K records are reclassifying the LDW portion of the package sold from T &M where it is L originally coded in either an A or B transaction and moving the LDW portion of the package to the LDW column where it truly should reside as it is LDW revenue and not T &M revenue Thanks Robert F. Frey RAC Accounting Manager I Avis Budget Group 6 Sylvan Way Parsippany, NJ 07054 Phone: 973- 496 -3307 Fax: 973 -496 -3529 From: Mike Stanek [ mailto:mstanek @monroe- clerk.com] I Sent: Wednesday, October 05, 2011 10:52 AM To: Frey, Robert Subject: RE: KWIA: Avis draft response N Robert, Attached several examples of T &M being re- allocated to LDW. Michael D. Stanek CIA, CCSA Monroe County Clerk of Courts I Internal Audit Department Office: (305) 292 -3591 1 From: Frey, Robert [ mailto :robert.frey @avisbudget.com] Sent: Tuesday, October 04, 2011 6:43 PM To: Mike Stanek III Subject: RE: KWIA: Avis draft response Mike. Can you provide me with support for your findings of moving T &M revenue to LDW? Thanks Robert F. Frey I RAC Accounting Manager Avis Budget C,r uuup 6 Sylvan Way I Parsippany, NJ 07054 2 E w. .� AUDITEE RESPONSE C Clerk's Finance Department response rJab IOW Win From: Sandra Carlile, Finance Director CC: Danny Kolhage, Clerk of the Circuit Court Date: 11/17/2011 Re: Response to the Audit Report of Key West International Airport Revenue on -Site Car Rental Agencies My response to the above report is as follows: Section V. Audit Findings C. Billing 2. KWIA contracts do not include FL 7.5% tax on the capital improvement fees that make up the rental charges for the on -site car rental agencies. Recommendation: 1. We recommend that Airport Management ensure that the $2, 500 monthly capital improvement fees include Florida's sales tax. It should be collected by KWIA and paid by the Clerk's Finance Department Clerk's Finance Department Response: The Clerk's Finance Department will ensure that sales tax revenues received from the KWIA Revenue on -Site Care Rental Agencies are remitted as instructed by Florida's Department of Revenue. D. Written Policies and Procedures Recommendation: We recommend that the Clerk's Finance Department pursue a $965.27 tax refund due to the credit Hertz applied to the May 2010 concession payment. Clerk's Finance Department Response: The Clerk's Finance Department will pursue the $965.27 tax refund directly. 1