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02/23/2001 Audit • RECEIVEDi • aa�- -0 COMMISSIONER MCCOY AUDIT REPORT OF MONROE COUNTY AIRPORTS REVENUE February 23, 2001 ,� to.COUNTY 14, _1• F Tom► S v: "t ' men10 41p:� . o r; . 4. yp••''••.. ..•• ••'Q� �� O COUNTY. Prepared by: Internal Audit Department Clerk of the Circuit Court Danny L. Kolhage, Clerk • Monroe County, Florida it 1 coUNry �av r V: e rimer' °P 3o VS .�o't4 • . �,. annp I.. 1&otIjage BRANCH OFFICE CLERK OF THE CIRCUIT COURT BRANCH OFFICE 3117 OVERSEAS HIGHWAY MONROE COUNTY 88820 OVERSEAS HIGHWAY MARATHON,FLORIDA 33050 500 WHITEHEAD STREET PLANTATION KEY,FLORIDA 33070 TEL.(305)289-6027 KEY WEST,FLORIDA 33040 TEL.(305)852-7145 FAX(305)289-1745 1'EL. (305)292-3550 FAX(305)852-7146 FAX(305)295-3660 February 20, 2001 The Honorable Danny L. Kolhage Clerk of the Circuit Court Re: Audit of Monroe County Airports Revenue Dear Mr. Kolhage: The Clerk's Internal Audit Department has completed an audit of Monroe County Airports Revenue. We examined whether tenants adhered to contract provisions, specifically, the timeliness of rental and concession fee collections, the accuracy of information reported, and the propriety of management review. We also studied management's emphasis on controlling reimbursable expenses. We would like to thank Airport Management for their cooperation while conducting the audit. Our audit revealed that some tenants are not complying with their agreements and additional amounts are due to Monroe County. Some agreements need to be amended to include clearer definitions of such items as gross revenue (rental car contracts), and exempt amounts (fixed base operators). Future contracts should include meaningful charges for late payments. The monitoring of the contracts should be enhanced. As more governments enter into contracts with private business organizations to administer public programs, the emphasis has changed to include strong financial and internal controls in the contract and equally important government management oversight. Airport revenues are administered on a contractual basis and should have strong administrative and management oversight by the County. The accompanying audit report is provided for your information. Additional copies of the report will be provided upon your request. • Sincerely, Sandra L. Mathena, CFE, CPA Director of Internal Audit cc: Board of County Commissioners (5) James Roberts, County Administrator James Hendrick, County Attorney Sandee Carlile, Clerk's Finance Director Marva Green, External Auditor til i } AUDIT REPORT OF MONROE COUNTY AIRPORTS REVENUE TABLE OF CONTENTS Page I. SCOPE AND OBJECTIVES 1 II. METHODOLOGY 1 III. BACKGROUND 3 j IV. CONCLUSIONS 5 V. AUDIT FINDINGS A.Ground Transportation Resolution 1. Off-site rental car companies self-determine permit fees 8 _ 2. Resolution needs "right to audit" clause 9 B. Contractual Compliance 1. Airport access fee 10 2. Time & mileage allocated 11 3. Promotional discounts deducted 12 4. Capital expenditures credit 13 5. Fuel flowage fees - Marathon 14 6. Fuel flowage fees - Key West 15 7. Fuel flowage fees not conforming to Minimum Standards 16 8. Lessee revenue documentation not provided 17 9. Performance bonds not found i8 C. Rent Receipts 1. Deficient receipts 19 2. Late receipts 20 3. Late charges 21 4. Sales tax not applied to total rent 22 5. Sales tax applied to privilege fee 23 D. General standards 1. Written policies and procedures 24 I i i i 1 �I t 1 ' AUDIT REPORT OF MONROE COUNTY AIRPORTS REVENUE TABLE OF CONTENTS Page 2. Certain leases not offered for bids 25 3. Parking meters - Key West 26 VI. EXHIBITS A. Lease and Concession Agreement - Marathon Airport A B. County Attorney's Opinion - Rental Car Concession Agreement B C. Additional Income Due C D. Corporate Rental Vehicle Contract D E. Hillsborough County Aviation Authority Rental Car - Definition of Gross Receipts E F. County Attorney's Opinion - Anderson Outdoor Advertising F G. Monroe County Board of County Commissioners Resolution 138-2000 G VII. AUDITEE RESPONSES Sr ; _ 1 AUDIT REPORT OF MONROE COUNTY AIRPORTS REVENUE I. SCOPE AND OBJECTIVES A. At the request of the Monroe County Clerk of the Circuit Court, the Internal Audit Department has completed an audit of the tenant contracts for the Key West and Marathon Airports. B. The audit objectives were to determine whether 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 County Administrator 2. The Director of Airports 3. The Airports Business Administrator 4. The Assistant County Attorney 5. Concessionaire Financial personnel 6. The Clerk's Finance Director 7. The Clerk's Finance Department personnel 8. Risk Management personnel B. The Internal Audit Department examined the following documents: _f 1. Code of Federal Regulations 2. Florida Statutes related to airports 3. Florida Statutes related to sales tax 4. Monroe County Minimum Standards for Commercial Aeronautical Activities 5. Monroe County Ground Transportation Resolution 1 j 6. Monroe County Code 7. Tenant contracts fJ C. The Internal Audit Department reviewed files of contracts with airports tenants to verify proper approval. We also reviewed the fair market value of rents as defined by the Federal Aviation Administration. We ascertained whether the contracts allow Monroe County to audit tenant books and records. D. Internal Auditors scheduled contract payments, recomputed fees, and reviewed revenue sources excluded from gross receipts. We traced receipts to Monroe County finance records, and determined whether Airport management applied contractually specified charges to late payments. E. We examined documentation of compliance with insurance conditions. F. We examined documentation of compliance with bonding requirements. G. We obtained previous audit workpapers and looked for follow up items. 1i ti j1 I1 - 1 , 2 III. BACKGROUND i_ A. Key West International and Marathon Airports Monroe County operates two airports, Key West International Airport (KWIA) and _1 Marathon Airport. Their financial activity is accounted for in two enterprise funds. Enterprise funds account for operations that are financed and run similarly to private business, where user charges pay for the costs of providing service to the public. Federal Aviation Administration regulations require airport revenues to be used exclusively for airport purposes. For fiscal year 1999, KWIA reported net income of $776,808, while Marathon showed a net loss of$725,945. B. Concession agreements A variety of concessionaires have contracts with Monroe County to conduct business in the airport terminals. These include car rental, gift shop, restaurant and lounge, fixed base operators, bus service, parking, and advertising displays. Most of these contracts charge monthly rents based on square footage and a percentage of gross revenues. Airport management initiates the implementation, renewal, and termination of concessionaire contracts, with the approval of the Board of County I ~' Commissioners. C. Rental Car Agencies KWIA has Avis, Budget, Dollar, and Hertz rental car agencies located on-site, and Marathon Airport has Avis, Budget, and Enterprise. The rental car companies' contracts all have similar terms. Each contract restricts Monroe County from offering more favorable terms to other rental car concessionaires. The contracts require them to pay monthly rent for terminal space based on square footage. Currently Monroe County charges from $15.88 to $22.25 per square foot per year. These contracts also exact a monthly concession fee, which is the greater of a negotiated minimum payment or 10% of gross revenue. Gross receipts are contractually defined as the total charges for time, mileage, and personal accident insurance payable by customers for vehicles rented, contracted for, or delivered at the airport. The airports provide these concessionaires with ready spaces for their rental spaces. D. Parking Lots Monroe County charges the public to park at KWIA, but offers free parking at the Marathon Airport. On November 3, 1992, the County contracted the management of KWIA's parking lot to James C. Berry, d/b/a Republic Parking System. This management contract has been renewed three times, currently running to October 31, 2002. Republic manages 198 long-term parking spaces and 28 short-term, metered parking spaces. The Board of County Commissioners annually approves Republic's operating budget, and pays Republic's operating expenses. The County also pays Republic a management fee of $1,250 per month, and a data processing fee of $400 per month. Additionally, the contract affords Republic an incentive bonus of 2.5% of the gross, based on the Airport Director's evaluation of its operation. Republic has estimated fiscal year 2001 revenue of $175,000 and operating expense of $113,788, leaving Monroe County a profit of$61,212. 3 E. Airports Business Administration There are three administrative employees at KWIA. The Airports Business Administrator is responsible for billing airport tenants and monitoring receipts. The Airports Business Administrator uses a computer system to record billings and collections in billing/receipt summaries for each Airport tenant. The Administrator transmits collections to the Clerk's Finance Office with copies of relevant invoices. F. The Clerk's Finance Department The Clerk's Finance Department deposits and records airport revenues in their respective accounts. On request, the Clerk's Finance Department provides Airports management with appropriate financial reports. ) I . , 4 I _ IV. CONCLUSIONS A. The Ground Transportation Resolution requires off-site rental car companies to pay Monroe County for allowing their courtesy vehicles to use Key West International Airport (KWIA). However, the Resolution does not require enough documentation to compare KWIA passengers with car rental contracts. Without such documentation, off-site rental car companies self-determine which customers must pay the airport fee, leaving Monroe County with no method to test their determinations. B. The Ground Transportation Resolution allows off-site rental car courtesy vehicles to use KWIA in exchange for a fee based on a percentage of their sales. However, it does not provide means to verify those sales. If the Resolution included a "right to audit" clause, stating that the other party must make its books and records available to Monroe County for inspection, then the County could gauge the reasonableness of amounts received under the terms of the Resolution. The former and present Ground Transportation Resolutions leave Monroe County without any means to confirm the l_ ; off-site rental car companies' calculations. C. On-site rental car companies' contracts require them to pay Monroe County 10% of their gross revenues. At Marathon Airport, Enterprise Leasing Company collects and remits this 10% fee only on commercial passengers and Paradise Aviation customers. Enterprise should be collecting and remitting the 10% of gross revenues on all car rental agreements originating at Marathon Airport. For this audit period, Enterprise owes Monroe County an additional $48,714.34. Based on this underpayment percentage, we estimate that Enterprise may owe yet another $270,000 from the contract's commencement, yielding a total underpayment of$318,714.34. D. Monroe County's contracts with on-site rental car companies define gross receipts to include charges for net time, mileage, and personal accident insurance after discounts shown on the rental agreement. Avis and Hertz provide their corporate customers with free loss damage waiver (LDW) coverage, and don't charge it on corporate car rentals. However, Avis and Hertz allocate part of their time and mileage revenue to f ' LDW, and do not pay Monroe County its airport access fee on those amounts. Some airport authorities define "gross receipts" as the total amount actually charged to the customer by the concessionaire, then individually lists all exceptions, if any, to that definition, and use a standard reporting form. From May 1999 through April 2000 �� Hertz allocated $96,608.72 from time and mileage to "unbundled" LDW. This allocation cost Monroe County $9,660.87 in contracted revenue. E. Avis Rent A Car pays commission discount checks to certain customers. These discounts do not appear on the car rental agreements. Avis has been deducting these commissions from monthly gross revenue, and has been paying Monroe County's airport access fee on the reduced amount. Monroe County's contract with Avis defines gross receipts to include charges for net time, mileage, and personal accident insurance after discounts shown on the rental agreement. This deduction cost Monroe County $58.48 in contracted revenue for February 2000. 5 F. Anderson Outdoor Advertising took a $4,901.50 credit for capital expenditures incurred before its contract with Monroe County began. Allowing Anderson credit for capital expenditures incurred before this contract's effective date cost Monroe County earned revenue equal to the amount of the credit. G. Monroe County requires Marathon fixed base operators (FBO's) to pay a fuel flowage fee. Our examination indicated that Monroe County had been underpaid $875.62 by one FBO. The auditee stated that his bookkeeper during that period did not understand the fuel reporting procedure. H. Monroe County requires FBO's at Key West International Airport to pay a flowage fee per gallon of fuel received or bought by the FBO, less gallons pumped into exempt aircraft. There is no written definition of exempt aircraft. To maximize revenues under these contracts, Airport management should collect flowage fees on all applicable gallons. I. The Board of County Commissioners has adopted Minimum Standards for FBO's at Monroe County Airports. These standards direct FBO's to pay Monroe County a flowage fee per gallon of aircraft fuel pumped, except for fuel pumped into exempt aircraft. Monroe County's leases with Marathon FBO's apply flowage fees to fuel sold, rather than pumped, as the minimum standards require. This distinction is significant when FBO's store and pump, for a fee, fuel owned by others, e.g., airlines. Some FBO's have avoided fuel flowage fees in this way. J. Monroe County's contracts with certain airport tenants routinely require tenants to provide documentation supporting their reported revenues. We found no such supporting documentation on file, and Airport management stated that they had no such documents from the tenants. K. Monroe County's contracts stipulate that on-site rental car agencies furnish $25,000 performance bonds to guard against the risk of concessionaires' nonpayment of required fees. We found no current performance bonds for four of seven on-site rental car concessionaires. L. Monroe County's airport concessionaire contracts call for monthly rent payments. Three concessionaires underpaid Monroe County during our audit. M.Monroe County's contracts with Anderson Outdoor Advertising specified various charges for late payments. Anderson has paid Monroe County late 29 times since 1996 without being assessed late charges amounting to $757.87. By permitting Anderson to pay late without charging contracted interest, Monroe County lost interest on its earned revenue. - 6 N. Monroe County's concessionaire contracts call for timely rent payments. However, certain contracts do not include a charge for late payments, as the FBO contracts do. A "late fee" could impel concessionaires to pay Monroe County timely. O. Monroe County has not been correctly collecting and remitting sales tax on certain revenues. Airport management had been backing sales tax out of these revenues, effectively reducing both rent and tax collected. Florida Statutes state that sales tax shall be in addition to total rent or license fee. i P. The Clerk's Finance Department backed sales tax out of one concessionaire's annual privilege fee payment, and remitted it to the Florida Department of Revenue. Airport management should request the County Attorney's opinion regarding the applicability of sales tax to privilege fees. Q. As previously reported in the audit report dated February 8, 1994, Airport management has no formal written policies and procedures. Li R. The Board of County Commissioners has extended two concessionaires' leases without soliciting public bids. The Federal Aviation Administration (FAA) requires fair market value for non aeronautical facilities and services. Also, Florida Statutes authorize the Board to lease real property "to the highest and best bidder..." As a result of not asking for bids from the public, Airport management cannot show that Monroe County received the highest and best offer, or fair market value, for this lease. ( S. The parking lot at KWIA has 28 metered parking spaces. Coin-operated parking meters are inherently hard to control. Consequently, the public becomes accustomed to abusing metered parking. Long-term parking also generated 36.5% more revenue per parking space than metered parking in our sample months. These meters appear to be less efficient and effective than the attendant-controlled lot in generating parking revenue. ifl 7 V. AUDIT FINDINGS A. Ground Transportation Resolution 1. Off-site rental car companies self-determine permit fees Findings: The Ground Transportation Resolution requires off-site rental car companies to pay Monroe County 8% on all airport-generated rentals for allowing their courtesy vehicles to use Key West International Airport (KWIA). The resolution further directs courtesy vehicle operators to furnish the names of their customers upon request. However, nothing requires retention of those customers' names. The names are necessary in order to compare passengers picked up at KWIA with car rental contracts issued by the off-site rental car companies. Without a list of airport customers, off-site rental car companies self-determine which customers must pay the 8% airport fee, leaving Monroe County with no reasonable technique to test the accuracy of their determinations. We examined off-site rental car contracts for February 2000. We found that Enterprise Leasing Company charged the 8% airport fee to their customers on 4.7% of their contracts. By contrast, Alamo charged the 8% airport fee to their customers on 52.9% of their contracts. We can not judge from the available documentation whether this fairly presents the number of contracts to which the airport fee should have been applied. Li Recommendations: 1. The Board of County Commissioners should consider requiring off-site rental car companies to retain the names of their airport customers for a reasonable period to allow for audit of Ground Transportation Resolution payments. County Administrator's Response: 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. - 8 r�l i 2. Resolution needs "right to audit" clause Findings: The Ground Transportation Resolution allows off-site rental car courtesy vehicles to use KWIA. For this privilege, the resolution requires these off-site rental car companies to pay Monroe County 8% on their airport-generated rentals. When a resolution bases its fees on variables such as outside parties' sales, it needs to provide for verification of those variables. One way to do this is to include a "right to audit" clause in the resolution. A "right to audit" clause states that the other party must make its books and records available to Monroe County for inspection. Such inspection would allow Monroe County to gauge the reasonableness of amounts received under the resolution. The former and present Ground Transportation Resolutions contain no "right to audit" clause, leaving Monroe County without any means to confirm the off-site rental car companies' calculations. j Recommendations: 1. The Board of County Commissioners should consider amending the present Ground Transportation Resolution to include a "right to audit" clause applicable to all Li privileges that are charged variable rates. County Administrator's Response: 1. The Administration will recommend to the Board of County Commissioners that a ! "right to audit" clause be included within the Ground Transportation Resolution. - i 9 B. Contractual Compliance 1. Airport access fee Findings: On-site rental car companies' contracts with Monroe County require them to pay Monroe County 10% of their gross revenues the previous month. The contract defines this gross as "the total sum...paid...by the customer to the Concessionaire for or in connection with the use of vehicle contracted for, delivered or rented to the customer at the Airport..." See Exhibit A - Lease and Concession Agreement - Marathon Airport. Reviewing car rental agreements from Marathon Airport revealed that Enterprise Leasing Company collects and remits this 10% fee only on commercial passengers and Paradise Aviation customers. From May 1999 through April 2000 Enterprise collected and remitted the 10% fee on revenue of $232,105.76, or 32.27% of that period's total revenue, $719,249.13. The County Attorney's Office has opined that Enterprise should be collecting and remitting the 10% of gross revenues on all car rental agreements originating at Marathon Airport. See Exhibit B - County Attorney's Opinion - Rental Car Concession Agreement. For this audit period Enterprise owes Monroe County $48,714.34. See Exhibit C - Additional Income Due. The contract provides for Monroe County to deem Enterprise in default if, after 30 days' written notice, it fails to pay amounts owed to the County. Internal Audit has requested the monthly airport access fees report from the beginning of this contract, November 15, 1994. This report separates monthly car rental amounts charged the 10% access fee from those not charged. Enterprise has not supplied these reports as yet. Based on the percentage underpaid during the audit period, we estimate that Enterprise may owe an additional $270,000 from their contract's commencement through April 1999, yielding a total underpayment of$318,714.34. Recommendations: 1. Airport management should immediately demand the $48,714.34 underpayment from Enterprise. 2. Airport management should recalculate the 10% access fee payments from the contract's inception, and demand payment of the difference. County Administrator's Response: 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. 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. 10 2. Time & mileage allocated Findings: 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 $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 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 Receipts. Recommendations: 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. jCounty Administrator's Response: 1.Future lease agreements will include a prohibition against allocating time and mileage revenue to loss damage waiver coverage in calculating airport fees. 2.If approved by the legal department, Airport management will recalculate airport access fees and demand payment for the difference. i �f 11 3. Promotional discounts deducted Findings: On-site rental car agencies allow discounts to certain customers. These discounts do not i appear on the car rental agreements. Avis has been deducting these discounts from L. monthly gross revenue, and has been paying Monroe County its 10% airport access fee on the reduced amount. The contract with Monroe County defines gross receipts to include "charges for net time, mileage, and personal accident insurance,...(after any discount specifically shown on the car rental agreement)..." In February 2000, Avis deducted discounts of $584.76 from gross revenue in Key West, costing Monroe County $58.48 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 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 Receipts. Recommendations: 1.On-site rental car agencies should not deduct discounts 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. County Administrator's Response: 1.The next lease will include a clearer definition of gross revenues for the purpose of calculating the airport access fee. 2.Airport management, in conjunction with the legal department, will require Avis and Hertz to recalculate the airport access fees. 12 , � I 4. Capital expenditures credit Findings: Monroe County contracted with Anderson Outdoor Advertising to obtain advertising at Key West International Airport. This contract began December 1, 1999, for a term of five years. The contract gives Anderson a credit against its monthly payments to Monroe County for capital expenditures, with prior approval by the Airport Manager. The credit is 50% of the capital expenditures. Anderson took a $4,901.50 credit for capital expenditures against its January 2000 payment to Monroe County. This represents capital expenditures of twice that amount, or $9,803. Airport management required no documentation from Anderson to support the amount credited, and did not document any prior approval by the Airport Manager. Reviewing subsequently provided supporting invoices revealed that Anderson incurred these expenditures before this contract began. See Exhibit F - County Attorney's Opinion - Anderson Outdoor Advertising. Allowing Anderson credit for capital expenditures incurred before this contract's effective date cost Monroe County earned revenue equal to the amount of the credit. Recommendations: 1.Airport management should consider monitoring compliance with contractual terms as a matter of policy. 2.Airport management should require repayment from Anderson Outdoor Advertising. ' County Administrator's Response: 1.Airport management agrees with the audit recommendation. 2.Airport management agrees with the audit recommendation. r�l 13 5. Fuel flowage fees - Marathon Findings: Monroe County requires fixed base operators (FBO's) at Marathon Airport to pay $.04 per gallon of fuel sold. Our examination of FBO fuel records indicated that Grantair Service, Inc. had underpaid Monroe County by $875.62 from January 1, 2000 through August 31, 2000. Grantair's owner stated that his bookkeeper during that period did not understand the fuel reporting procedure. Recommendations: 1.Airport management should collect this $875.62 shortage from Grantair, plus applicable interest. County Administrator's Response: 1.Airport management will demand payment of the $875.62 from Grantair, plus applicable interest. I 14 6. Fuel flowage fees - Key West Findings: Monroe County requires fixed base operators (FBO's) at Key West International Airport to pay $.06 per gallon of fuel "received or bought by the Company...less the number of gallons pumped that month into aircraft exempt from fuel flowage fees pursuant to agreement with the Lessor." We found no written definition of which aircraft are exempt. In July 2000 one FBO reported exempt gallons at 69.6% of all fuel pumped. To maximize revenues under these contracts, Airport management should collect flowage fees on all relevant gallons "received or bought by the Company." Recommendations: 1.Airport management and affected FBO's should agree in writing which aircraft are exempt from fuel flowage fees, and commence remitting and collecting the fees accordingly. _i County Administrator's Response: 1.There needs to be a clearer definition of those aircraft that are exempt from the fuel flowage fees. In the future, a clearer definition will be included in lease arrangements. In the interim, Airport management will attempt to amend existing agreements for the _ purpose of collecting fees prior to the establishment of the next lease. These provisions will be extended to the Marathon Airport. 15 1 � 7. Fuel flowage fees not conforming to Minimum Standards Findings: The Board of County Commissioners has adopted "Minimum Standards for Commercial Aeronautical Activities by Fixed Base Operators (FBO's) and other Aeronautical Service Providers at Monroe County Airports." These standards state that "...the Fixed Base Operator will pay the county the fee for aircraft fuel pumped into aircraft for any purpose, except for that fuel pumped into aircraft exempt from fuel flowage fees pursuant to agreement with Monroe County." Monroe County's leases with FBO's at Marathon Airport apply flowage fees to fuel sold, rather than pumped as required by the minimum standards. This distinction is significant when FBO's pump, for a fee, fuel owned by others. Some FBO's have avoided fuel flowage fees in this way. To be more nearly self-supporting by maximizing revenues under these leases, Airport management should collect fuel flowage fees in conformity with the minimum standards. Recommendations: 1.Future FBO leases should follow the minimum standards regarding fuel flowage fees. County Administrator's Response: 1.There needs to be a clearer definition of those aircraft that are exempt from the fuel flowage fees. In the future, a clearer definition will be included in lease arrangements. In the interim, Airport management will attempt to amend existing agreements for the purpose of collecting fees prior to the establishment of the next lease. These provisions will be extended to the Marathon Airport. 16 8. Lessee revenue documentation not provided Findings: Monroe County's contracts with certain airport tenants charge them percentages of their revenue. Contracts listed below routinely require tenants to provide documentation supporting their reported revenues. We found no such supporting documentation on file, and Airport management stated that they had no such documents from the tenants. Tenant Required Documentation Period Conch Flyer private operating statement six months sales tax records monthly Island City Flying Service fuel purchases invoices monthly Recommendations: 1.Airport management should require tenants to submit the revenue documentation specified in their respective contracts. County Administrator's Response: I_ 1.Airport management agrees with the audit recommendation and will attempt to do spot checking to be sure there is compliance with the requirement. 1 17 9. Performance bonds not found Findings: Monroe County's contracts stipulate that on-site rental car agencies provide $25,000 performance bonds. Such bonds afford security against the risk of concessionaires' nonpayment of required fees. We found no current performance bonds for four of seven on-site rental car agencies. Without performance bonds Monroe County lacks assurance of concessionaires' continued fee payments. Recommendations: 1.Airport management should require the delinquent on-site rental car agencies to furnish the described performance bonds. 2.Airport management should consider periodically monitoring compliance with this performance bond condition. County Administrator's Response: 1.Airport management agrees with the audit recommendation. 2.Airport management agrees with the audit recommendation. (Note that there is some disagreement with the number of performance bonds not identified by the Internal Auditor. Airport management believes only two of the seven are unaccounted for.) 18 C. Rent Receipts 1. Deficient receipts Findings: Concessionaire and fixed base operator (FBO) contracts call for monthly rent payments to Monroe County. Comparing rent receipts to contract terms revealed the following differences: In the April 8, 1998 amendment to its lease, Conch Flyer, Inc., agreed to pay Monroe County $75 per month for sewer service, with annual Consumer Price Index increases. Monroe County has not received any such payments, which total $2,463.56 as of November 30, 2000. The Airport Gift Shop paid no rent for May 1998. Grantair Service, Inc., paid no rent for the first 21 days of its lease, April 10 through April 30, 1998. Also, Grantair's rent payment for March 2000 was short $51.00. The cause of these shortages is unknown, but the result is clearly lost revenue to Monroe County. Recommendations: 1.Airport management should monitor rents received under concessionaire and FBO leases for contractual compliance, and should act to collect shortages when they occur. 2.Airport management should collect the sewer service charges due from Conch Flyer presently and prospectively. 3.Airport management should collect this $512.03 rent from the Airport Gift Shop, plus sales tax. 4.Airport management should collect this $1,241.00 rent from Grantair, plus sales tax and applicable interest. County Administrator's Response: 1.Airport management agrees with the audit recommendation. 2.Attempts to collect the sewer charges due from the Conch Flyer are already in process. 3.A review is underway with the Airport Gift Shop and collection of the amount plus sales tax is in process. 4.Airport management is reviewing the statistics and will collect the amount from Grantair, if appropriate. 19 2. Late receipts Findings: Monroe County's 1996 and 1999 contracts with Anderson Outdoor Advertising require Anderson to pay the County by the 15th of each month, and specify an interest charge for payments after the 15th. The 1996 contract called for interest "computed at 12% per year." The 1999 contract computes interest at the rate established by section 55.03, Florida Statutes. This audit showed Anderson paying Monroe County late 21 times under the 1996 contract, and eight times under the 1999 contract. Unpaid interest amounts to $557.04 under the 1996 contract, and $200.83 under the 1999 contract. Permitting Anderson to pay late without charging the applicable interest rate cost Monroe County its negotiated compensation for the lost use of its own money. Recommendations: 1.Airport management should require Anderson Outdoor Advertising to pay all previous and future late charges. County Administrator's Response: 1.Airport management will require Anderson Outdoor Advertising to pay all previous and future late charges. ' ` 20 3. Late charges Findings: Concessionaire contracts call for timely rent payments to Monroe County. Our review revealed that certain contracts do not contain a charge for late payments, as the FBO contracts do. Such a charge or "late fee" should be sufficient to impel concessionaires to make timely payments. From January 1999 through August 2000 the Airport Gift Shop paid its rent late 3 times, averaging 61 days late per occurrence. As a result, Monroe County lost the timely use of earned revenue. Recommendations: 1.Airport management should consider including meaningful charges for late payments in future on-site concessionaire contracts. County Administrator's Response: 1.Future contracts will include charges for late payments. _ I I 21 4. Sales tax not applied to total rent Findings: Monroe County has not been correctly collecting and remitting sales tax on advertising space and fixed base operator (FBO) lease rents. Airport management collected no sales tax from three lessees, then began backing sales tax out of one lessee's payments, effectively reducing rent received and tax collected by over 6.9%. Section 212.031 (3), Florida Statutes, states that the tax shall be in addition to the total rent or license fee. Monroe County's airport concessionaire contracts require them to pay all applicable taxes. See Exhibit F - County Attorney's Opinion - Anderson Outdoor Advertising. Recommendations: 1.Airport management should recalculate the sales tax, and charge Anderson and the FBO's the difference. 2.Airport management should charge Anderson and the FBO's sales tax on the total monthly rent. L__ 3.Airport management should consider monitoring compliance with contractual terms as a matter of policy. County Administrator's Response: 1.Airport management agrees with the audit recommendation. 2.Some of the policy will be changed to require all such entities to pay sales tax on the total monthly rent, including Anderson Outdoor Advertising. 3.Airport management agrees with the audit recommendation. 22 5. Sales tax applied to privilege fee Findings: The Clerk's Finance Department backed sales tax of $840.64 out of the Airport Gift Shop's annual privilege fee payment, and remitted it to the Florida Department of Revenue. Discussion with the County Attorney's office indicates that sales tax does not apply to privilege fees in excess of rents. Misinterpretation of the contract and statutes has cost Monroe County at least this much in lease revenue. Recommendations: 1.The Clerk's Finance Department should stop backing sales tax out of privilege fee payments. 2.Airport management should request an opinion from the County Attorney's office regarding the applicability of sales tax to privilege fees. County Administrator's Response: 1.Airport management agrees with the audit recommendation. 2.Airport management agrees with the audit recommendation. Clerk's Response: 1.In response to the comment regarding sales tax being backed out of the Airport Gift Shop's annual privilege fee, upon further research, we noted the following: The Clerk will request an opinion from the Florida Department of Revenue concerning the application of sales tax on privilege fees as described in the Airport Gift Shop lease. The Finance Department will immediately stop payments of sales taxes on privilege fees to the Department of Revenue until the opinion is received. In addition, the Finance Department will research any prior remittances to the Department of Revenue and will request a refund. 23 I ' • D. General standards 1. Written policies and procedures Findings: Airport management has no formal written policies and procedures. Management approved policies and procedures help to ensure that staff members understand management's objectives, and their duties. Written procedures also assist in staff training. This finding was previously reported in the audit report, "Airport Operating Revenues," dated February 8, 1994. Recommendations: 1.Airport management should consider drafting and approving policies and procedures. County Administrator's Response: 1.Since there are some policies and procedures in place, Airport management requests further clarification from the Internal Auditor concerning background for this finding. Apparently there was insufficient contact between the Internal Auditor and the Airport management on this issue during the audit process. 24 2. Certain leases not offered for bids Findings: Monroe County extended Republic Parking System's lease from 1997 to 1999, and again from 1999 to 2002, without requesting bids from the public. The County also approved extending the Conch Flyer's lease to 2005, with an option to renew the lease for one additional five-year term, without soliciting public bids. The Federal Aviation Administration (FAA) requires a self-sustaining airport rate structure, meaning fair market value for non aeronautical facilities and services. Also, Section 125.35, Florida Statutes, authorizes the Board of County Commissioners to lease real property "to the highest and best bidder..." As a result of the Board not soliciting bids from the public, Airport management cannot show that Monroe County received the highest and best offer available for this lease. Likewise, without seeking public offers, management cannot demonstrate that Monroe County received fair market value for the property leased. Recommendations: 1.Airport management should consider establishing a policy to secure the highest and best bid, and to obtain fair market value, in future leases. County Administrator's Response: 1.Airport management will recommend to the Board of County Commissioners a policy to secure the highest and best bid in reference to lease arrangements. r-, u 25 r , 3. Parking meters - Key West Findings: The parking lot at Key West International Airport (KWIA) has 28 metered spaces. This metered parking provides convenience for a fee, because it is located closest to the terminal. Republic Parking System collects the parking meter revenue and deposits it for Monroe County. Coin-operated parking meters are inherently hard to control. Enforcement is too costly to be efficient, as are effective cash controls. Consequently, the public becomes accustomed to abusing metered parking. Long-term parking also generated 36.5% more revenue per parking space than metered parking during our sample months. In our test only one of the twelve vehicles parked at expired meters bore a parking ticket, and that vehicle had been there for four days. Resolution 138-2000 defines each hour at an expired meter as a separate violation, and regards any vehicle parked at an expired meter over four hours as abandoned. See Exhibit G - Monroe County Board of County Commissioners Resolution 138-2000. These meters appear to be less efficient and effective than the attendant-controlled lot in generating parking revenue. Recommendations: 1.Airport management should consider abolishing metered parking for better control over parking spaces and their accompanying revenue. County Administrator's Response: 1.In reference to comments concerning enforcement, Airport management will refer the question to the Sheriff's Department which is responsible for enforcement on Key West Airport property. In the past, a higher fee was charged for short-term parking. The Board of County Commissioners determined that it wished to have convenient access for short-term parking by the public and that the fee should be lowered. The fees charged are a matter of County policy. 26 VI . Exhibits I i Exhibit A Lease and Concession Agreement Marathon Airport Li • ri n 11 r-. •,__1 1 - LEASE AND CONCESSION AGREPMENT MARATHON AIRPORT 17( THIS CONTRACT OF LEASE is made and entered into on th e ILI_ day of , 199 6 by and between MONROE COUNTY. a political subdivision of the State of Florida, hereinafter referred to as Lessor, and ENTERPRI G SE LEASING COMPANY, a Florida Corporation, hereinafter referred to as Lessee or Concessio naire; WHEREAS, Lessor desires to grant to Lessee a non-exclusive right to operate an Airport al automobile rental concession at and from the Marathonp 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 Terminal at the Airport for the establishment of a RentalAirline __ 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 hereb• y agree as follows: V. • 1• Premises - Lessor hereby leases to Lessee for its exclusive use as rental office space #106 located in the airline terminal at Marathon, car -; Monroe County, Florida, said space containing 247 square feel, and being designated "Auto Office/Counter," as shown on Exhibit A, attached hereto and Rental made a part hereof; and in addition thereto, hereby provides 7142 sq. ft. of car prep. area and fourteen (14) rental car ready spaces in the parking lot. f- n • __; 2. Term - This agreement is for''Q term of five. 5 g � (' ) years, commencing November 15, 1994, and expiring on November 14, 1999. 3. Rental and Fees - Lessee will 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 if at the following scheduled rates-and fees: • (a) Coupler Rental: Office/Counter space rental will be paid for at following rates: the Marathon Airport - $20.00/sq. ft./per annum + tax. Counter/office rental 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. These rates, which are currently equal to the airline rental rate for publicly exposed space, will be adjusted yearly. The annual adjustment shall be made in accordance with percentage change in the Consumer Price Index (CPI) for Wage Earners and Clerical Workers in the Miami, Florida, area index, and shall be based upon the annual average CPI computation from January 1 through December 31 of the previous year. (b) p ea - 7142 sq. ft. - .395/sq. ft./per annum - utilities to be paid by Lessee. Lessor shall obtain any development permits, use permits and occupational licenses necessary for the washing and other preparation, other than mechanical repairs, of cars for rental. (c) Fo u�en f 14) Car Readv Spaces - Exhibit Cz•- 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 $27,000.00. 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 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. 4 , •.,. . 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. 11 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-number ed,ed, 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 3 , Concessionaire's books of accounts and o'ther records directly generated at the Marathon Airport office or otherwise pertaining directly to this agreement.9 nl, Knowingly furnishing the County a false statement of its gross sales under the provision hereo f 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 ifs 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 lime to schedule said presence. 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 month shall be less than eighty percent (80%) 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 ca r 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 necessarythereto,to, and said shortages or other disruptions results in the materiaL,dlminution in Lessee's ross g 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, either event, the Minimum Guarantee Fee should be abated for the period of lime such condition continues to exist. During said period of time, Lessee shall continue to .t I i1 __ _ ,•.: .. . . .___ pay to the Lessor fen percent (10%) of gross receipts from the operations p lions hereunder as hereinbefore defined. 7. Investment b the Lessee - All leasehold im. provements and their titles shall vest immediately in Monroe County upon their acceptance Furniture, furnishings, fixtures and equipment willby the County. remain the �� personal properly 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. 8. Leasehold Improvements - Lessee has the right 9 during the term hereof, at its own expense, at any lime from time to time, to install, maintain, operate, replace any and all trade fixtures and other personal P ale, repair and property useful from time to time in connection with its operation on the Airport, all of which shall be and d remain the property of Lessee and may be removed by Lessee prior to or within a reasonable after expiration of the term of this agreement; provided, time however, that Lessee shall repair any damage to the premises caused by such removal. The rofailure 10 remove trade fixtures or other personal property p rty shall not constitute Lessee ahold-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 hall be the sole property of the Lessor. Leasehold improvements shall include any installation of wal ls, partitions, doors and windows, any electrical wiring, panels, conduits, servic e connections, receptacles or lighting fixtures attached to walls, partitions, ceilings or floor, alt interior walls, doors, windows or ceilings: and all floor treatments finish to floors, or coverings,9 , other than 1, , 5 L_ Il carpeting, that is affixed to floors; sanita6, Tines,and sinks, com • modes, and garbage disposal units; all healing, air treatment or ventilating distribution systems, s, including pipes, ducts, venthoods, air handling units and hot water generators; and all e refrigerator rooms or vaults and refrigerated waste rooms including refrigeration or ventilating equipment included with same. Anyfixtures, a furniture, equipment, carpeting and draperies not classified as leasehold improvements above shall be the personal property of the Concessionaire. 9. Damaae and In'ury - Lessee covenants that if and all of its agents, servants, employees, and independent contractors will use due care and diligence in all of ifs 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 art p of f he Concessionaire, its agents, servants, or employees and except 10 the extent that such dama ge 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 ch the County shall become obligated to pay by reason of the liability, if any, imposed bylaw upon the County for damages because of bodily injury, including damages for care and loss of service, including death at any lime 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, ifs agents, servants, or employees on the Airport. _ 10. Qther Development of A - 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. 11. Terminal Area Plannin - 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. 12. Utilities - Electricity, wafer and trash removal service will be assessed to Lessee at a surcharge of $250.00 per month, which monthly fee shall be adjusted) sted for each contract year commencing November 15, 1995, in accordance with the percentage change in the Consumer Price Index (CPI) for Wage Earners and Clerical Workers in the Miami, Florida, area index, and shall be based upon the annual average CPI computation from January I through December 31 of the previous year. 13. Lessee's Obligations - Lessee covenants and`bgrees: (a) to pay the rent and other charges herein reserved at such limes 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 consen be unreasonably withheld; 1 shall be not (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 9 tobe 7 . . .--, r r-- I .. . ., . . . . . , kept, reasonable wear and tear anet%damage by casualty, Lessee's negligence, riot and civil commotion, excepted: not caused by (d) to observe and comply with any and all requirements of the tutes, j J constituted public authorities and with all federal, state ' or ordinances, regulations, and standards applicable to Lessee cor Its al useof the demised premises, including, but not limited to, rules and regulations promulgated from lime to time by or at the direction.of Lessor for ad ' of the Airport; mmistralion !' I_ i (e) to pay all taxes assessed or imposed by any governmental authority upon any building or other improvements erected or installed on the demied premises during the f erm of this agreement; and • demised (f) to control the conduct, manner end appearance agents, and employees, and any objection from the Director of Airportsicers, _ concerning the conduct, manner or appearance of such persons, Concessionaire shall forthwith take steps necessary to remove the cause ause of the 14. Lessor's Inspection and Maintenance -Lessor and its authorized officers, employees, agents, contractors, subcontractors and other representatives shal l II have the right to enter upon the demised premises for the following purposes: li (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 ter this agreement with respect thereto; or ms and conditions of (b) to perform essential maintenance, repair,:refocation, or removal of existing underground and overhead wires, pipes, drains, cables and conduit now located on or across the demised premises, and to construct, maintains repair, relocate and remove such facilities in the future if necessa tothe Master Plan of development of the Airport; provided, howeverr,that a doul � work shall in no event disrupt or unduly interfere with the operations of Lessee, and provided further, that the entirecost of such work, including but not limited to the cost of rebuilding, removing, relocating, protecting or otherwise any fixed improvements at any time erected or installed in or upon Ih e 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 10 such fixed im r caused thereby, shall be borne solely by Lessor. P ovements 8 ‘• •y •• ' 15, )ndemnificafion - Lessee shall indemnify and,hold Lessor forever harmless from and against all liability imposed upon Lessor by reason.of legal liability for injuries s 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 ifs agehts, and 9 provided further that Lessee and its insurer, 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 intere st 1 ! 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. (a) Insurance - Lessee shall 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 property, but in no'event an amount in excess of Lessee's original cost of constructing said fixed improvements. (b) Coverage - The Lessee shall procure and maintain insurance of the types and to the limits as contained in Exhibit "D", which is hereby made a part of this Lease. 16. 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-discriminator y prices for all items and services which if is permitted to sell or render under this agreement shall be construed as I^ � • r • requiring the Lessee to seek approval by Monroe County before or after Lessee establishes or alters its rental car rates. Franchisee shall not discriminate in its • employment 'practices against any person on the basis of 'race, sex, creed, color, ( national origin, age or any other characteristic or aspect which is not job related. • 17. Rules and Regulations - Lessee agrees to observe and obey, during the term of this agreement, all laws, ordinances, rules and regulations promulgated and enforced by the County and by any other proper authorityhaving jurisdiction over the conduct of the operations at the Airport. Within thirty (30) days from the date of this contract, the County shall provide Lessee a written list of all rules and regulations which it.. has promulgated up until that time and which will effect the Lessee's operations 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 the event that Lessee should determine that any contemplated rule or regulation unreasonably hinders him in his operation under this agreement, the Lessee shall so notify the County, and the parties hereto agree that any problem arising incidental thereto will, as much as possible, be worked out between the parties without the . necessity to resort to further legal remedies. 18. Furnishing of Service -.The Lessee further covenants and agrees that he will, at all times during the continuance of the term hereby demised and any renewal or extension thereof, conduct, operate, and maintain for the benefit of the public, the rental car concession provided for and described herein, and all aspects and parts and services thereof as hereinabove defined and set forth, and will make all such it 10 to"-' , facilities and services available to the pubfic•and that he•will devote his be st efforts for the accomplishment of such purposes. 19. United States' Re uirements - This lease shall be subject and subor dinate to the provisions of any existing or future agreement between the Lessor and the United States relative to the operation or maintenance of the Airport, and execution of which ch has been or may be required by the provision of the Federal Airport Act ct of 1946, as amended, or any future act affecting the operation or maintenance of the Airport, provided, however, that Lessor shall, to the extent permitted by law, use its best efforts to cause any such agreement to include provisions protecting and preserving P ing the rights of Lessee in and to the demised premises and improvements thereon, and to compensation for the taking thereof, and payment for interference therewith f and for damage thereto, caused by such agreement or by actions of the Lessor or the United States pursuant thereto. 20. Lessor's Covenants -The Lessor covenants and agrees that: (a) Lessor is the lawful owner of the property demised hereby, that it ha lawful possession thereof;and has good and lawful authority to execute this s Lease; and (b) throughout the term hereof Lessee may have, hold and enjoy peaceful and uninterrupted possession of the premises and rights herein leased and granted, subject to performance by Lessor of ifs obligations herein. 121• Cancellation by Lessor - If any of the following events occur, the Less ee shall be deemed to be in default of its obligations under the agreement, in which case Monroe County shall give the Lessee notice in writing fo cure such default within thirty 11 (30) days, or the concession will be autonigtitally canceled'at the end of that lime and such cancellation will be without forfeiture, waiver, or release of the County's right to any such of money due pursuant to this agreement for the full term hereof: (a) if Lessee shall make a general assignment for the benefit of creditors, or file a voluntary petition in bankruptcy or a petition or answer-seeking its reorganization or the readjustment of its indebtedness under the Federal Bankruptcy Laws of any other similar law or statute of the United States or any stale, or government, or consent to the appointment of a receiver, trustee or liquidator of all or substantially all of the property of Lessee; (b) if any order or decree of a court of competent jurisdiction Lessee shall be adjudged bankrupt or an order shall be made approving a petition seeking its reorganization, or the readjustment of its indebtedness under the Federal Bankruptcy Laws of any law or statute'of the United States or any state, territory, or possession thereof or under the law of any other state, nation, or government, provided, that if such judgment or order be stayed or vacated • within ninety (90) days after the entry thereof, any notice of cancellation given shall be and become void and of no effect; (c) if by or pursuant to any order or decree of any court or governmental authority, board, agency or officer having jurisdiction, a receiver, trustee or liquidator shall lake possession or control of all or substantially all of the property of Lessee for the benefit of creditors, provided, that if such order or decree be stayed or vacated within sixty (60) days after the entry !hereof or during such longer period in which Lessee diligently and in good faith contests the same, any notice of cancellation shall be and will become null, void and of no effect; (d) if Lessee fails to pay the rental charges or other money payments required by this instrument and such failure shall not be remedied within thirty (30) days following receipt by Lessee of written demarl'd from Lessor to do so; (e) if Lessee defaults in fulfilling any of the terms, covenants, or conditions required of it hereunder and fails to remedy said default within thirty (30) days following receipt by Lessee of written demand from Lessor to do so, or if, by reason of the nature of such default, the same cannot be remedied within thirty (30) days following receipt by Lessee of written demand from Lessor to do so, then, if Lessee shall have failed to commence the remedying of such default within thirty (30) days following such written notice, or having so commenced, shall fail thereafter to continue with diligence the curing thereof; (f) if the Lessee shall desert or abandon the premises for seven 171 consecutive calendar days; 12 • • (9) if the concession or the estate of the Lessee hereunder shall be transferred, subleased, or assigned in any manner except in the manner as herein permitted; (h) if the Lessee shall fail to pay any validly imposed tax; assessments; utility rent, rale or charge; or other governmental•imposition; or any other charge or lien against the premises leased hereunder within tiny grace period allowed by law, or by the governmental authority imposing the same, during which payment is permitted without penalty or interest; in complying with this subparagraph the Lessee does not waive his right to protest such tax, assessment, rent, rate or charge; or (i) if the Lessee fails to provide service as required by specifications for five days during any thirty day period, unless such failure is caused by an act of God, national emergency or a labor strike of which the Lessee has given the County immediate notice, the concession may be canceled within thirty (30) days of the giving of notice by the County and the Lessee shall not be permitted to cure such default. 22. Additional Remedies - In the event of a breach or a threatened breach by Lessee of any of the agreements, terms, covenants and conditions hereof, the County shall have the right of injunction to restrain said breach and to invoke any remedy allowed by law or equity, as if specific remedies, indemnity or reimbursement were not herein provided. The rights and remedies given to Monroe Count are Y distinct, separate and cumulative, and no one of them, whether or not exercised by the County, shall be deemed to be in exclusion of any of the others herein or by law or in equity provided. No receipt of monies by Monroe County from Lessee afte r the cancellation or termination hereof shall reinstate, continue or extend the term, or affect any notice previously given to Lessee, or operate as a waiver of the right 9 of the County to enforce the payment of rentals and other charges then due or thereaf ter falling due, or operate as a waiver of the right of the County to recover possession of 13 • • the premises by suit or otherwise. It is agreed that, after the service of notice to cance l or terminate as herein provided, or after the commencement of any proceeding, or g 1 after a final order for possession of the premises, the County may demand and collect any monies due, or thereafter falling due, without in any manner affecting such notice proceeding, or order; and any and all such monies and occupation of the premises, or at the election of the County on account of Lessee's liability hereunder. The parties agree that any litigation arising out of the agreement shall be brought in Monroe County, Florida, and determined under the laws of the State of Florida. The prevailing party shall pay any reasonable attorney's fees incurred by the other party in the event of litigation. Lessee will pay any reasonable atforney's fees incurred bythe County in the enforcement of the agreement other than through litigation, including but not limited to all costs and attorney's fees in collecting, bankruptcy or reorganization proceedings, or appeal of any such matter. 23. Cancellation by Lessee - Lessee shall have the right upon written notice to Lessor, to cancel this agreement in its entirety upon or after the happening of one or more of the following events, if said event or events is then continuing: g (a) the issuance by any court of apparent "� ction of an injunction, order, or decree preventing or restraining the use by Lesss pelenl lee of all or any substantial part of the demised premises or preventing or restraining the use of the Airport (or usual airport.purposes in its entirety, or the use of any thereof which may be used by Lessee and which is necessary for Lessee's operations on the Airport, which remains in force unvacated or unstayed for a period of at least one hundred twenty (120) days; (b) the default of Lessor in the performance of any of the terms, covenants or conditions required of it under this instrument and the failure of Lessor to cure such default within a period of thirty (30) days following receipt of written demand from Lessee to do so, except that if by reason such default, the same cannot be cured within said thirty (30) days, then Les of e 14 shall have the right to cancel if Lessor shall/have failed to commence to re such default within said thirty (30) days following receipt of such written medy demand, or having so commenced, shall fail thereafter to continue with diligence the curing thereof; (c) the inability of Lessee to conduct its business at the Airport in substantially the same manner and to the same extent as theretofore conducted, for a period of at least ninety (90) days, because of (i)-any law, (ii) any rule, order, judgment, decree, regulation, or other action or non-action of any Governmental authority, board, agency or officer having jurisdiction thereof; (d) if the fixed improvements placed upon the demised premises are totally destroyed or so extensively damaged that it would be impracticable or uneconomical to restore the same to their previous condition as to which Lessee is the sole judge. In any such case, the proceeds of insurance, if an by reason of such loss shall be apportionedY• payable between Lessor and Lessee, Lessor receiving the same proportion of such proceeds as the then expired portion of the lease term bears to the full term hereb y granted, and Lessee recei balance thereof. If the damage results from an insurable cause and isvingo l the y partial and such That the said fixed improvements can be restored to their prior condition within a reasonable time, then Lessee shall restore the same with reasonable promptness, and shall be entitled to receive and apply the proceeds of any insurance covering such loss to said restoration, in which event this agreement shall not be canceled but shall continue in full force and effect, and in such case any excess thereof shall belong to Lessee; (e) in the event of destruction of all or a material portion of the Airport or the Airport facilities, or in the event that any agency or instrumentality of the United Stales Government, or any state or local government occupies the Airport or a substantial part thereof, or in the event of rnilitary mobilization or public emergency wherein there is a curtailment, either by executive decree or legislative action, of normal civilian traffic at the Airport or the use of motor vehicles or airplanes,by the general public, or a limilpufon of the supply of automobiles or of automobile fuel, supplies, or parts for general public use, and any of said events results in material interference with Lessee's normal business operations or substantial diminution of Lessee's gross revenue from its automobile rental concession at the Airport, continuing for a period in excess of fifteen (15) days; (f) in the event that al any time prior to or during the term of this agreement, Lessee's presently existing right to operate an automobile rental concession at the Airport is withdrawn, canceled, terminated, or not renewed by Lessor; 15 • (g) the faking of the whole or 6n • part exercise of any right of condemnation or m eminent domaihe n: premises by the (h) if at any time during the basic term or option term of this lease a majority of the scheduled air transportation serving the local area no longer operates from the Airport; or (i) if at any time during the basic term hereof or Ihe.option periods, the Airport or terminal building is removed to a place more than three (3) road miles in distance from ifs present location. (j) If at any time Lessee desires to terminate the lease without cause, and provides thirty (30) days prior written notice to the County, and pays two (2) month's rent and the greater of (a) 10% of the equivalent of two (2) month's gross, or (b) 2/12's of the minimum guarantee; or if Lessee desires to terminate the lease without cause and provides no notice or less than thirty (30) day's written notice, and pays three (3) month's rent and the greater of (a) 10% of the equivalent of three (3) month's gross, or (b) 3/12's of the minimum guarantee. For purposes of this paragraph, gross revenues shall be based on the immediately preceding two months or three months, respectively, depending upon whether thirty days notice is given. 24. Lessee's Reserved Rights - Nothing contained in this Agreement shall limit or restrict in any way such lawful rights as Lessee may have now or in the future to maintain claims against the federal, 'state, or municipal government, or any department or agency thereof, or against any interstate body, commission or authority, or other public or private body exercising governmental powers, for damages or compensation by reason of the taking or occupation, by, ondemnation or otherwise, of all or a substantial part of the demised premises, including fixed improvements thereon, or of all or a material part of the Airport with adverse effects upon Lessee's use and enjoyment of the demised premises for the purposes hereinabove set forth; and Lessor hereby agrees to cooperate with Lessee in maintenance of any just claim of said 16 it ___, • •.! and nature, to refrain from hindering, o' pposing, or obstructing the maintenance thereby by Lessee. • • 25. Assignment and Subletting - It is expressly agreed and understood that any and all obligations of Lessee hereunder may be fulfilled or discharged either by Lessee or by a Licensed member of Enterprise Rent-a-Car, duly appointed thereto by Enterprise Rent-a-Car, and that any and all privileges of every kind granted Lessee hereunder extends to any Licensee so appointed; provided, however, that notwithstanding the method of operation employed by Lessee hereunder any appointed Lessee always shall continue to remain directly liable to Lessor for the performance of all terms and conditions of this lease. Except hereinabove set out, the premises may not be sublet, in whole or in part, and Lessee shall not assign this agreement without prior written consent of Lessor, nor permit any transfer by operation of law of Lessee's interest created hereby, other than by merger or consolidation. 26. Other Use - Lessee shall not use or permit the use of the demised premises or any part thereof for any purpose or use other than an authorized by this agreement. 27. Liens - Lessee,shall cause to be removed any and all liens of any nature arising out of or because of any construction performed by Lessee or any of its contractors or subcontractors upon the demised premises or arising out of or because of the performance of any work or labor upon or the furnishing of any materials for use at said premises, by or at the direction of Lessee. 17 i. 28. . Time - In computing Lessee's term within which to commence construction of any fixed improvements or to cure any default as required`�- by this Lease, there shall be excluded all delays due to strikes; lockouts, acts of God and the public enemy, or by order or direction or other interference by any municipal, State , Federal or other governmental department, board, or commission having jurisdiction, or other causes beyond Lessee's control. 29. Para ra h Headin s - Paragraph headings herein are intend ed only to assist in reading identification and are not in limitation or enlargement g menf of the content of any paragraph. 30. Notices - Any notice of other communication from either party to the other pursuant to this agreement is .sufficiently given or communicated if sent by registered mail, with proper postage and registration fees prepaid, addressed to the party for whom intended, at the following addresses: For Lessor: Monroe County Board of County Commissioner P. O. Box 1680 s Key West, Florida 33040 __ • 41 For Lessee: Enterprise Leasing Company 2150 N. State Road 7 Lauderdale Lakes, FL 33313 or to such other address as the party being given such notice shall from ti i me io time designate to the other by notice given in accordance herewith. 18 { :'' t- r 31. The County hereby agrees ,not to enter into any automobile rental concession agreement with any person, partnership, or corporation other than the Concessionaire unless the same shall be upon terms no more favora ble than those herein granted to the Concessionaire, and shall require automobile rental service s substantially equivalent to those available from automobile rental conce sslonciires upon comparable airports ' of size throughout the United Slates. Nothing g herein contained shall limited the County from making such reasonable distinctions between the automobile rental concessionaires with respect }Q afl .the assignment or allocation on of rental counter space and parking areas as may appear 10 it to be justified by the differing operational requirements of the sl respective rental car concessionaires• onaires by ` reason of the differing amounts of Airport automobile rental business done by each of the respective concessionaires. II IN WITNESS WHEREOF, the parties have caused these presents to be executed by their respective officer or representative thereunfo duly authorized, the day and year 4- first above written. (SEAL) ATTEST: DANNY L. KOLHAGE, CLERK. MONROE COUNTY BOARD OF COUNTY COMMISSIONERS --/-4.4.4e_44.ixt.,..c, • y BCS1 Deputy Cle y Mayo -hairman ENTERPRISE LEASING COMPANY Wanes (._______ 77 By Witness Title: ice President/Genera!-Manager— b/AIR/enlerrac.doc !,-._111. cur.•-.Eh•.Y _______LOA 6/.?.:5". 19 ---- - ---- —---- -- - ---- - - - -- ---- --- - -- - -- -- - - - - -- - - - - • MARATHON TERMINAL [:: to IG�vi■v� ) —■—.�,� . , s_____._________ „_. L 1 NT.- �Ff cETOR. I= 0 FI CE OFF!CE • ( � _ 1 02 (pG oPF� SPA CE" - AV1S Bur?c,_cr . .. ., E p�I Ste.------ri 1 D5 (AFCt 1. • tii I n RENTS . 0 . •• . C4 8 RELrLa E it x • CAR fr.''' • • • • Cr • 1• 4. 1-1 n ,� . — _ �__ -- '� _. - - '- - - — _ 7' - — - !wg) ► . I 137 X ..rAl =.L.71x5L. .7.-le- I e,..5576--rri4-:21 Xi( I X I • /37.. i . xsp i*rso �NieAPa: Ii in: • • r 23•X C - /11- S ITT! C. /�{2� a')r � /og' q lailiffIlill 6) .3,..f A OR-41^✓ ' • «Xsrs :Si+ia 33 X so = moo' • . 6..3x6/ =.3ry3ziii X K x— 6� � f ,c 3 ,� = �� r7 s I iii: • -______.) / f C x _X Xit.:L: ' ' 1 ffetti t ` `eI :.8e, 1 i AL 4e. .wir41k7t1fit i o . *ram r T 0 o 1 3 5 6. 7 8 ? to 11 i2 13 /4- bili • C- k1TQI'_ Pil i SG vr .DfdAcks ) Fiti?Q q > . < aD zT (12 SP/1c:.r.$) EuvG-ET .. ..... rr Ii I . . 1 2 3 i 4- .5' 6 7 r 9 Jo // 1� \ ►. i B a l RENTAL CAR RA/CIfki� "1.I• tlREADY ' f _ U .r . 1 Avis . . Avis - ' ' + , , 0;.?•sP.9c s} • '1) . . . • / • . f / 1213 1 •54- . 13- 16 171 • r1 9' /o // !a 13 . Exhibit B ` County Attorney's Opinion - Rental Car Concession Agreement ( , BOARD OF COUNTY COMMISSIONERS __ MAYOR Shirley Freeman,District 3 OUNTY o MONROE ej �2.;.1.�--; KEY WEST FLORIDA J�aao / '`71- ••'hti 46 a Mayor Pro tem George Neugent,District 2 (3061294-4641 i` •��0 I . v. Wilhelmina Harvey,District 1 • J.th�' IL,;; 1 ,'� Nora Williams,District 4 Mary Kay Reich,District 5 Office of the County Attorney r 502 Whitehead Street- 3rd Floor ,� iWA �) Key West,FL 33040 K.a'Yt�•; tr. 305/292-3470- Phone �te�l•� 305/292-3516 - Fax 4m•.•rt MEMORANDUM - TO: Sandra L. Mathena, Internal Audits Li • ( �� . FROM: Suzanne A. Hutton, Assistant County Attorney DATE: July 28, 2000 j ! RE: Rental Car Concession Agreement. I i You have provided to me copies of the lease and concession agreement with L Enterprise leasing company for use of premises at the Marathon Airport, copies of first page of rental agreements for Enterprise at 9400 Overseas Hwy. and Budget at the same location, and a letter dated July 5th requesting an opinion as i-! to whether Enterprise should be remitting 10 percent of gross revenues on all invoices generated at the Marathon Airport. You are correct in your interpretation r of the contract with the County. i✓� All airport leasing agreements for car rental companies provide for 10 percent of the gross revenues for the previous month to be remitted and define gross receipts (receipts and revenues being equivalent) as "the total sum of money, from charges for net_time, mileage, and personal accident insurance, paid or payable, whether by cash or credit, ...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." This provision makes it perfectly clear that if any portion of the rental transaction occurs at the u airport, Enterprise Leasing (as well as all other car rental agencies leasing space at the airport) is responsible for payment of 10 percent of the gross revenues to the County. The contract makes absolutely no mention of rentals which are generated from commercial flights or from Paradise Aviation, which apparently is all that Enterprise is remitting. The contract requires 10 percent of the revenues of rentals made at the airport to everyone, including people who walk in off the street and have no other airport business other than the renting of a car. • Please call if you have any questions. SAH/ak , , Ir i u J� I 1 i � Exhibit C Additional Income Due i I Enterprise Rent -A-Car Marathon Airport Additional Income Due Total Total Time Difference Additional & Mileage Due May 99 24,501.67 58,611.14 34,109.47 3,410.95 June 99 12,494.19 46,957.79 34,463.60 3,446.36 July 99 10,777.52 41,045.06 30,267.54 3,026.75 August 99 12,642.97 42,600.15 29,957.18 2,995.72 September 99 6,162.69 33,588.75 27,426.06 2,742.61 October 99 8,713.59 31,596.75 22,883.16 2,288.32 November 99 18,328.81 45,471.57 27,142.76 2,714.28 December 99 15,775.38 56,438.28 40,662.90 4,066.29 January 00 31,023.64 88,221.26 57,197.62 5,719.76 February 00 31',040.65 90,989.85 59,949.20 5,994.92 March 00 35,222.56 102,680.89 67,458.33 6,745.83 April 00 , 25,422.09 81,047.64 55,625.55 5,562.56 Total 232,105.76 719,249.13 487,143.37 48,714.34 % of Total Revenue 32.27% . 100.00% 67.73% 1 !` . 'FLORIDA02/29/2000/29/2000 5:11:35 J77PA E00066 41/86 86 AIRPORT ACCESS FEES (DR ACTIVITY ONLY) MONTH 02/00 GPBR 4186 10.00 PERCENTF CINC IINC PA= SUBTOTAL 3171 t'. 1480 1481 1486 • .:-- TOTALS FOR TICKETS CEGD AAF 3072.33- .00 31040.65-i/ 30881.65- 159.00- TOTALS FOR TICKETS' , NOT cEGD AAF G 586.07- 59949.20- X yC' /C 58862.52- 500.61- 86 TOTALS ^.C.1 , 9 2 tee ,. N \ A'g: ,y 89744.17- 659.61- / 1y �L.�, 586.07- `5 L t T L\ T�. %.i�. • BRANCH 86 TOTAL TICKETS .i` ` WITH 3171 CHARGES 127 BRANCH 86 TOTAL TICKETS. +/ NOT CHARGED A 3171 FEE 358 TOTAL TICKETS FOR BRANCH 86 485 TOTAL NUMBER OF DAYS FOR BRANCH 86 819 4041.13- TOTALS FOR REGION E , I NONCONCESSIONAIRL CAR RENTAL COMPANY M.dNThL( REPORTING MONROE COUNTY MONTH OF: FEBRUARY, 2000 COMPANY: ENTERPRISE RENT A CAR *A: TIME& MILEAGE CHARGES $30,881.65 *B: P.A.I. $159.00 *C: S.L.P *D: DROP CHARGES TOTAL CHARGES SUBJECT TO FEE: $31,040.65 10.00% FEE REMITTED TO THE COUNTY: $3,104.07 REPORT PREPARED BY:JENNIFER SOLANO TITLE:ACCOUNTING SUPERVISOR This report is due on the fifth(5th)day following the month in which charges were collected. *Airport derived customers only. I_- i�AR r 5 Ply !i r- Exhibit D Corporate Rental Vehicle Contract I � 1 ,s (WED) 11. 1' 00 11 :fit. 'T. 1 1 .•01. "NO. 40631 1 07 15 p 6 • RENTAL VEHICLE CONTRACT EFFECTIVE DATE—January 1, 1999—December 31,2002 1. Scope State rental rates available uniformly at any on-airport or off-airport rental location operated by the vendor,except in Masks,Hawaii,New York on weekends and holidays, other countries, and the out- of-state cities listed in Section 22 that have city surcharges added to the daily rental rates. *See Section 22 for further information on New York Metro area restrictions. —I 2. Special Rates • -'I Any special rate available to all customers at the time of rental,which will result in a lower net rate including primary insurance coverage in the amounts of$100,000/$300,000 bodily injury and S50,000 pruperry damage,payment of the Loss Damage Waiver fee and the cost of Fuel,than that offered herein,will be provided at the time of rental. 3. Reimbursement for Fuel Purchased 1 � - Rental rates for all classes of vehicles rented in Florida include gasoline; therefore it is not necessary to refuel the vehicle prior to return. To obtain reimbursement for fuel purchased for rental vehicles provided by the vendor, it will be necessary to retain and turn-in receipts for fuel purchases to the vendor's rental counter at the time the vehicle is returned. The company will make cash reimbursement to the driver for all fuel purchased if receipts are turned in at the counter at the time of return. Out-of- state rentals do not include gasoline,therefore no cash reimbursement are made by Avis Rent A Car for fuel for out-of-stale rentals. h, 4. Drop-off Charge No drop-otr charges in Florida between cities where vendor has rental locations. Drop-off charges do I—, apply to out-of-state rentals,when a rental occurs in one city and is dropped in another. Out-of-6tare L._ drop-off charges will vary based on location- In 5. Insurance Coverage Primary insurance coverage is provided in the following amounts: S100,000/1300,000 bodily injury and$50,000 property damage insurance. Vendor assumes all are, accident, and collision losses. Collision damage is assumed by the vendor and payment of the daily CDW, Collision Damage Waiver, or LDW, Loss Damage Waiver, fee is not authorized. All drivers must have a valid driver's license. NOTE; The rental vehicle contract includes an insurance override agreement that covers licensed drivers,other than the individual that rented the vehicle, that use the vehicle with the permission of the renter with all Insurance and benefits provided under the rental agreement. Renter trust pick up vehicle. This coverage is provided business associates,spouse,and children above the age of l$ that are living at home. Marry rental agreements do not provide ill insurance coverage if other than the r renter is operating the vehicle. 3 Exhibit E Hillsborough County Aviation Authority Rental Car - Definition of Gross Receipts L� r1 '�I the final decision to be ' solely that of Authority; then, in event, the Minimum Annual Concession Fee set forth in Paragraph 5 .2 (a) herein shall be waived `for the period of time such condition continues to exist. Durin saidperiod of , g time, Concessionaire shall continue to pay to Authority ten percent t of Gross Receipts from the operations hereunder as hereinbefore defined and Authority will return to Concessionaire the pro rata Portion of any Minimum Annual Concession Fee which may have been prepaid. -- 5 .3 Definition of Gross Recei ts. (a) Amounts to be Included. As used herein, the term "Gross Receipts" shall mean the total amount actually charged to the customer by the Concessionaire 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, regardless of where or by whom the payment is made or where the .vehicle is returned. • (b) cluccluded The term "Gross Receipts" shall not include (1) the amounts of any federal, state, or municipal sales separately stated on the rental agreement and collect tar collected froms customers of Concessionaire now or. hereafter levied or imposed, (2) any sums received by Concessionaire from customers for damage to automobiles or Concessionaire property, or for loss conversion, or abandonment of such automobiles, 3 or , ( ) any sums received by reason of Concessionaires disposal of capital Car Rental Concession Agreement -- 1 Addendum No. 1 Incorporated 11/17/97 assets and/or trade fixtures, or (4) any amounts billed and paid by customers fo r refueling services, or (5) any amounts separately stated on the rental agreement and paid by customer for waiver by Concessionaire of its right -to recover for damage to the vehicle rented, or (6) the portion of a retroactive rebate or refund to a corporate customer upon attainment of a specified volume of rentals attributable to revenue otherwise included in gross receipts hereunder. In the event Concessionaire utilizes "all inclusive vouchers" in its operation at the airport, any amount allocated ("unbundled") for Collision Damage Waiver in excess of thirty percent (30W) of the total voucher shall be considered by Authority as gross receipts and shall be included in the concession fee payment due. The voucher must state that it is all-inclusive, detail the services included, and be available for inspection by the Authority' s auditors. • It is understood and agreed that all losses, or charge-backs are to be borne solely by Concessionaire and the Authority is to be paid on Gross Receipts without charge or reduction for costs of losses. (c) Diversion of Gross Rec ip Concessionaire shall not intentionally divert, through direct or indirect means, any of concessionaire' s rental car or related business with Airport' s Customers to off airport locations of Concessionaire or --Car Rental Concee®ion Agreement 1 11/17/97 Addendum Ho. 1 Incorporated li EXHIBIT E STATEMENT OF GROSS RECEIPTS AND PRIVILEGE FEES DUE TO,;HILLSBOROUGH COUNTY ; i AVIATION AUTHORITY FOR THE MONTH OF TIME & MILEAGE DROP CHARGE $.00 BABY SEAT $ .00 UPGRADES $ .00 UNDER 25 AND ADDITIONAL DRIVER $.00 $.00 -- PERSONAL ACCIDENT INSURANCE $.00 COLLISION DAMAGE WAIVER EXCESS LIABILITY $.00 PERSONAL EFFECTS COVERAGE $.00 OTHER INSURANCE COVERAGE $.00 FU EL $.00 SALES TAXES $.00 STATE SURCHARGE $.00 _ OTHER REVENUE $.00 $.00 GROSS REVENUES , LESS: DISCOUNTS (per contract) ($.00 ) DEDUCTIONS PER SECTION 5.3 (b) SALES TAXES ($.00 ) STATE SURCHARGE ($.00 ) FUEL ($ .00 ) TOTAL DEDUCTIONS ($.00 ) GROSS RECEIPTS SUBJECT TO PRIVILEGE FEES $.00 PRIVILEGE FEE: THE GREATER OF: (A) lot OF GROSS RECEIPTS $.00 OR (B) MINIMUM PRIVILEGE FEE $.00 $.00 Car Rental Conceoaion Agreement • 11/17/97 Addendum No. 1 Incorporated • • I^� . Exhibit F • County Attorney's Opinion - Anderson Outdoor Advertising ,^I L_J I � • � f • Li 4• ' .4 4j,, _•.t BOAT D OLCOUr11Y COMMISSION[RS OUNTY fMONROE "' MAYOR Shirley i reemun,(,lair's/3 KLrwesr non,w„aw li ' '4 t' '• „i,s'' Muyor Pro fem GeorgeNeugent,District 2 j , rAsl:n4•4eu ry_,�� E Wilhelmina Harvey,District 1 /'I ,I, ,, ;1 Kitten Williamc,Dirtr•ici 4 • Office of the County Attorney Mary Kay Reich,District 5 Pt P.O.Box 1026 i. "ltl St .. Key West,FL 33041-1026 •_ I . t., 305/292-3470-Phone ,i 1,y�.,f.- 305/292-3516 - Fax -fitkv.• MEMORANDUM . • TO: Sandra L. Mathena, Internal Audit Finance Department f ' FROM: Suzanne A. Hutton, Assistant County Attorney DATE: September 18, 2000 RE: Anderson Outdoor Advertising. I was a little puzzled by your August 23, 2000 letter in which you stated that we do not pay sales tax on our concession agreements with the rental car companies. I went back to the other items which you have provided to me and realized that we must have had a conversation at some point when you told me that we did not pay sales tax for the car rental leases. My response in that conversation about rental of things was apparently misplaced as it is pretty clear by Section 212.03(6) that rental of space for motor vehicles is a taxable privilege as well as the tax imposed by Section 212.031 for the lease or rental of or licensed in real property. I can see why we would not pay tax on the concession fee payment from the car rental properties since the concession fee is based on car rental income, on which a sales tax has already been assessed. Section 212.031(2)(b) specifies that the legislature intended that "only one tax be collected on the rental or licensed fee payable for the occupancy or use of any such property, that the tax so collected shall not be pyramided by a progression of transactions..." However, I can find nothing in the statutes which would exclude from state taxation the rental fees for the counter and car preparation areas. Getting to Anderson Advertising, the County is doing more than merely granting a privilege for the use of real property. A license allows (or may allow) ' other licensees to make use of said property. In this case, Anderson Outdoor Advertising is actually utilizing space which is not available for any other entity to use. Accordingly, it is my opinion that the advertising agency agreement Constitutes a lease of advertising space. . ' •d r 1 '1f' " -7 P.M' n7t'i 11 n\I • I r i l',i•ri 1• • . :rn nn r rI.,c- 1 ; I he fact that there may be no lax on the services being rendered by Anderson to its clients is irrelevant to the issue of whether the County is renting some portion of real property which is subject to taxation under Section 219 n31. With respect to your September 11 th letter requesting advise regarding monthly payments, I can find no documentation of any agreement to initiate the capital expenditure 50% credit prior to the commencement date of December 1, 1999 for the current advertising agency agreement. Accordingly, those capital expenditures prior to December 1, 1999, including those items for which Anderson Outdoor Advertising had contracted prior to December 1, 1999, would not be available for the 50% credit. With respect to your last question, yes, Anderson owes a monthly minimum of $3,000.00 regardless of the total of all other months. The contract is not written to provide a minimum $36,000.00 per year; it is written to provide a minimum of$3,000.00 per month. Please let me know if you have any other questions. SAH/ak 2 r •d `'' 1 `1(` r-nr . . . . , .1 1111 1 l e. iG Exhibit G Monroe County Board of County Commissioners Resolution 138-2000 l ' County Administrator RESOLUTION NO. 138 - 2000 . A RESOLUTION OF TILE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA, REPEALING RESOLUTION NO. 580-1992; ESTABLISHING A 15 MILE PER HOUR SPEED LIMIT AT KEY WEST ST INTERNATIONAL RNA1 IONAL AIRPORT; REGULATING TIIE PARKING OF VEHICLES AT SUCH AIRPORT AND PROVIDING FOR TIIE TOWING OF VEIIICLES PARKED IN - VIOLATION OF THIS RESOLUTION AND PROVIDING FOR CERTAIN PENALTIES FOR TIIIJ OWNERS OR OPERATORS O1+ • VEHICLES PARKED IN VIOLATION OI+ TIIIS RESOLUTION; PROVIDING FOR SEVI;IZABILITY; AND PROVIDING EFFECTIVE DATE, tt vi. Ckilpiii- Li BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA TI IAT r o o Section 1. Resolution No. 580-1992 is hereby repealed. • o h r , rrn Section 2. This Resolution is adopted pursuant to the authority granted in Scc l zi_- c�• r— I -11 . . 0n• CO31G.000(3)(b)(3) and 332.08(2)(b), Fla. Stat. o :r,•. Section 3. Speed limit at Key West International Airport -', _� • n Ol U a. The speed limit at Key West International Airport is hereby established at 15 miles per hour. The Director of Airports shall post the airport with signs stating the I speed limit which signs shall be so placed and so painted as to be plainly visible in daylight or in darkness when illuminated by headlights. b. Violation of the speed limit established pursuant to this section may be --i punished as set forth in Secs. 316.6 55 or 332.08(2)(b), Fla. Stat. tiros- 1 I 1 1 (---4 11 �`f t/ 0"., • Section 4. Parking in certain dcsitmatecl areas at Key West lntcrnational.Airport. a. No person shall park any vehicle in the designated no 6 parking areas at Key West International Airport. The Director of Airports shall post the no public parking areas with signs conforming to the manual and specifications of the Florida Department • of Transportation in sufficient number to adequately apprise members of the public of the no parking areas. b. Any vehicle parked in a designated no parking area in excess of four(4) hours shall be considered abandoned by the owner or operator of the vehicle and shall be towed and impounded at the vehicle owner's expense. Except, however, any unattended vehicle parked in a designated no parking area which is also a fire lane or cross walk may be towed and impounded at the vehicles owner's expense immediately if the law enforcement officer at the scene determines that the vehicles so parked constitutes a threat to the safety of the public or to Airport employees. Section 5. Parking arca reserved for employees. a. No person not an employee at Key West International Airport shall park any vehicle in the area designated employee parking. The Director of Airports shall post ---' employee parking only areas with signs conforming to the manual and specifications of the Florida Department of Transportation in sufficient number to adequately apprise members of the public of the employee only parking areas. b. Any vehicle not owned or operated by an airport employee parked in the designated employee parking area in excess of four(4)hours shall be considered abandoned by the owner or operator of the vehicle and shall be towed and impounded at the vehicle owner's expense. I • Section 6. Disabled parking violations a. No person shall park a vehicle in a parking space designated for disabled individuals who have an exemption permit or license plate issued pursuant to Secs. ,---- 316.1958, 320.0848, 320.084, 320.0842, 320.0843, or 320.0845, Ha. Stat. The Director of Airports shall post and mark each parking space for disabled persons in the manner set forth in Sec. 316.1955(4), Fla. Stat. b. Any vehicle parked in violation of this section, shall be towed and impounded at the owner's expense. Additionally, the vehicle.will be cited for a violation of Sec. • ' 11-2, Monroe County Code.($250 fine). All penalties collected pursuant to this section shall be utilized as provided in Sec. 11-2, Monroe County Code. However, any person who is chauffeuring a disabled person shall be allowed, without need for an identification parking permit or special license plate, momentary parking, in a disabled individual 2 . _, parking space for the purpose of unloading imposed upon the driver for such momentary parking. I�d person. No penalty shall be Jl • Section 7. Double narking, • a. No person shall park or stand a vehicle adjacent to another manner as to block any lane otherwise open to vehicular or bicycle traffic.vehicle in such a is hereinafter termed double parkin g, or Such violation International Airport with signs conforming to the manualof and ts shallifications post Key Westf e - Florida Department of Transportation in sufficient number to clearly apprise the public that double parking is prohibited. members of i Li b. If an unattended double parked vehicle is impeding traffic threat to the safety of the public, the vehicle may bel impounded d atithe�`��sing a towed an owner's expense, vehicle Section 8. Expired parkin, meters 1 • a. No person shall park a vehicle in any metered parking space with an "Expired" • flag showing. Each hour the vehicle is parked beyond that designated by the meter constitute a separate violation of this section. shall b. Any vehicle parked in violation of this section in excess of four 0) be considered abandoned by the owner or operator of the vehicle and towed and urs shall impounded at the vehicle owner's expense. c. It shall be unlawful to deposit in any Airport anything other than a lawful coin of the United Slates of my America International - this subsection shall be punishable as provided in Sec. 332.08(2)(b), F la. Stat.violalion of Sect—__10n 9. Wally section, subsection, sentence, clause or provision of this Resolution is held invalid, the remainder of this Resolution shall not be affected by such invalidity. Section10. This Resolution shall take effect after the promulgation requiredin Sec. 332.08(2)(b), Fla Stat. PASSED AND ADOPTED bythe r Board of Commissioners of Monroe County Florida,at a regular meeting and hel the /9 day of. 2000. h of the Board held on . ! i 3 I • Mayor Freeman yes Mayor Pro '1•em Neugent yes • Commissioner Ilarvey yes Commissioner Reich yes Commissioner Williams yes BOARD OF COUNTY COMMISSIONERS ems--.. K1 1 OF MONROE COUNTY, FLORIDA - 0,., ,�7� r,1 ANNY I KOLI IAGL CLERK •_,j •'•t, ,<,.• ` c�my erk BY Mayor/ChaiHSIan • • • • • • APPROVED A c rr• ,z"-• RUBL•R1 IJ v; .,I: DATE ( _CO q VII. Auditee Responses '21 •I' MEMORANDUM TO: Sandra Mathena, CFE, CPA Director of Internal Audit FROM: James L. Roberts County Administrator DATE: February 13, 2001 SUBJECT: Airports Revenue Audit The Administration has reviewed the Preliminary Draft Audit Report in reference to j Airports Revenue and provides the following responses: Al-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 Ground Transportation Resolution. B 1-1: 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. B 1-2: 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 allocating time and mileage revenue to loss damage waiver cover in calculating airport fees. 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. B3-2: Airport management, in conjunction with the legal department, will require Avis and Hertz to recalculate the airport access fees. II B4-1: Airport management agrees with the audit recommendation. B4-2: Airport management agrees with the audit recommendation. B5-1: Airport management will demand payment of the $875.62 from Grantair, plus applicable interest. B6-1: There needs to be a clearer definition of those aircraft that are exempt from the fuel flowage fees. In the future, a clearer definition will be included in lease arrangements. In the interim, airport management will attempt to amend existing agreements for the purpose of collecting fees prior to the establishment of the next lease. These provisions will be extended to the Marathon Airport. B7-1: - See previous answer for B6. B8-1: Airport management agrees with the audit recommendation and will attempt to do spot checking to be sure there is compliance with the requirement. B9-1: Airport management agrees with the audit recommendation. B9-2: Airport management agrees with the audit recommendation. (Note that there is some disagreement with the number of performance bonds not identified by the Internal Auditor. Airport management believes only two of the seven are unaccounted for.) C 1-1: Airport management agrees with the audit recommendation. C 1 2: Attempts to collect the sewer charges due from the Conch Flyer are already in process. C 1-3: A review is underway with the Airport Gift Shop and collection of the amount plus sales tax is in process. C1-4: Airport management is reviewing the statistics and will collect the amount from Grantair, if appropriate. U C2—l: Airport management will require Anderson Outdoor Advertising to pay all previous and future late charges. C3-1: Future contracts will include charges for late payments. II J 2 � I C4-1: Airport management agrees with the audit recommendation. C4-2: Some of the policy will be changed to require all such entities to pay sales tax on the total monthly rent, including Anderson Outdoor Advertising. C4-3: Airport management agrees with the audit recommendation. C5-1: Airport management agrees with the audit recommendation. —I C5-2: Airport management agrees with the audit recommendation. D1-1: Since there are some policies and procedures in place, airport management requests further clarification from the Internal Auditor concerning background for this fording. Apparently, there was insufficient contact between the Internal Auditor and the airport management on this issue during the audit process. D2-1: Airport management will recommend to the Board of County Commissioners a policy to secure the highest and best bid in reference to lease arrangements. D3-1: In reference to comments concerning enforcement, airport management will refer the question to the Sheriffs Department which is responsible for enforcement on Key West Airport property. In the a higher fee was past, g charged for short-term parking. The Board of County Commissioners determined that it wished to have convenient access for short-term parking by the public and that the fee should be lowered. The fees charged are a matter of County policy. D4-1: It is the Administration's understanding that this issue has been discussed between the Internal Audit Department and airport management. It is also our understanding that the item will be removed from the audit. The Administration appreciates the development of the Internal Audit and the recommendations made. Although there is some disagreement with some of the points, most of the findings and recommendations are designed to improve operations. The Administration and airport management will proceed to make the changes within its authority and to recommend to the Board of County Commissioners other changes. l J f/h 6 Ai, James L. Roberts County Administrator j r 3 j - - bOOUNrk A V c•)e l aaffiI ice : 0'. l'hr.may • s annp IL. 1&or jage BRANCH OFFICE CLERK OF THE CIRCUIT COURT BRANCH OFFICE 3117 OVERSEAS HIGHWAY MONROE COUNTY 88820 OVERSEAS HIGHWAY MARATHON,FLORIDA 33050 500 WHITEHEAD STREET PLANTATION KEY,FLORIDA 33070 - TEL.(305)289-6027 KEY WEST,FLORIDA 33040 TEL.(305)852-7145 FAX(305)289-1745 TEL.(305)292-3550 FAX(305)852-7146 FAX(305)295-3660 February 23, 2001 Sandra Mathena Director of Internal Audit Re: Audit Comment C.5, Sales tax applied to privilege fee In response to the comment regarding sales tax being backed out of the Airport Gift Shop's annual privilege fee, upon further research, we noted the following: The Clerk will request an opinion from the Florida Department of Revenue concerning the application of sales tax on privilege fees as described in the Airport Gift Shop lease. The Finance Department will immediately stop payments of sales taxes on privilege fees to the Department of Revenue until the opinion is received. In addition, the Finance Department will research any prior remittances to the Department of Revenue and will request a refund. S CajjAjG2-). _1