Background

A contract discussion before the village council, Thursday, April 29 is about the performance of a contractor who has substantially violated the contract terms. Audited annual CPA-prepared financial statements and a board of 10 directors who are supposed to live in Islamorada are among the contract’s specific requirements; yet, for many recent years, no such professionally audited financials have been submitted, and among the only six board members, at least a few no longer live in the Keys. In the 15 years, this organization has had the contract, it has not met these requirements.  

Why should the village consider giving a 15-year renewal to a vendor that is in multiple defaults of its initial contract? The vendor has publicly stated a million dollars has been raised and spent, but there is zero accounting to the village or taxpayers representing where the funds have gone.

Staff also publicly stated a lack of concern about this although no written mandatory financial reports have been recently submitted, and village staff thus has no records to back up any of their renewal recommendations.  

The parks and recreation citizens committee, who are good folks but only meet for 3-4, hour-and-a-half sessions a year, were coached by village staff at their recent meeting to opine that it would be fine to continue with the same vendor for another 15 years. 

It is not fine. The contractor has violated many terms of the contract for many years. This does not pass the smell test, and is clearly not in the best interests of the village. Our village residents deserve complete fiscal transparency from every operation that raises money from commercial activities on public land purchased and maintained by our taxpayers -- not decisions based upon friendships with minimal public accountability. 

Click here to see Islamorada Community Entertainment Board of Directors.

CONCERNS

Use of Park:  The Village is entitled to 270 days/yr; ICE is entitled to at least 90 days/yr, and to the balance of any days not used by Village.

Renewal of contract:  Either party "shall" provide notice of intent to renew "at least 180 days prior."  If either party fails to so provide, the contract "shall expire at the end of the initial term."  Further, "If this Agreement is terminated for cause due to an Event of Default on the part of the Managio9er (sic) (ICE), the Manager shall not be entitled to a reimbursement of ICE's Contribution."

Financial Information:  " Within ninety (90) days following the end of each year, ICE shall provide the Village with audited financial statements prepared in accordance with generally accepted accounting principles by a certified public accounting firm satisfactory to Village, showing Gross Revenues and Operating Expenses. The statement must be accompanied by documentation..."

     "ICE must make available to Village upon demand all of its books and records pertaining to the operation of the Facility.  In addition, ICE must require that all Third Party Contractors make available to Village upon demand complete, permanent and accurate books and records, including records of all sales at the Facility.  All books and records must be preserved for at least six (6) years..."

     Three former Village Councilors have reported that during their terms they do not recall ever seeing or having discussed such financial reports about money-making ICE-sponsored events held in Founders Park.  The lack of financial transparency and mandatory reportage alone is a fundamental violation of this contract!  

      The Taxpayers of Islamorada who paid for Founders Park, and their elected Councilors, should have full and detailed knowledge of how the "about a million dollars" raised on their property has been operationally expensed, and how the remainder has been dispensed -- and to whom it was distributed, and in what balance and equity in accordance with Community values.

     This is particularly so since ICE CEO David Feder publicly proclaimed (shortly after 4:15 pm) at a recent Parks and Recs Committee Zoom meeting (on April 20, 2021) that ICE had made money on selling beer, and "have made about a million dollars" -- but no accounting of the raising or distribution of such monies appears to have been provided for many years in direct contradiction to the specific requirements of the contract!

[In order to confirm verbatim the statements being attributed herein as notations taken from the Zoom presentation, readers are advised to view the video replay of the April 20, 2021 Parks and Rec Committee meeting between approximately the 4:12 and 4:36 time frames to clarify any inadvertent scriveners errors.]

     During the same conversation with the Committee, CEO Feder further stated that his "team" works for ICE, and that they are paid; and when the Committee Chair asked about the finances (at 4:24), Feder responded with respect to Third Party groups that "...we do not look at their books..." -- and at approximately 4:25 Maria Bassett said "...we don't ask for records..."                                                                   

      At 4:26 one of the Committee members suggested the Village Council should ask about the money, to which Feder responded for the second time that the 990's (IRS short form) are filed annually so "it's kind of covered, right?"  990 filings would not seem to come close to fulfilling the contractual requirement for "audited" financial statements by a "certified public accounting firm"..."accompanied by documentation" (see full text above). 

     Further, Florida Public Records Law states that records made or received by an "agency" in connection with the transaction of official business are open for public inspection.  The definition of "agency" includes "...any other public or private agency, person, partnership, corporation, or business entity acting on behalf of any public agency..." (Fla.Stat.  119.011(2)(2009)

     This clearly means that financial records of ICE and all of its Third Party Contractors must be made available to the Public, regardless of the degree of Village Council oversight -- or laxity thereof!

Security:  "ICE is responsible for providing security at the Facility, at ICE's expense, including police protection if required...ICE shall provide adequate traffic management for events..."

Costs:  ...ICE is solely responsible, as an Operating Expense, for all costs incurred in providing events, performances, activities, programs and services and the staging of the foregoing..."

Employment:  "...ICE must give qualified Village residents priority consideration for any employment opportunities at the Facility.  ICE will give preference to businesses located in the Village as Third Party Contractors."

Board of Directors:  "...(a) its Board of Directors shall have at least ten (10) members (b) at least eighty percent (80%) of the members of the Board of Directors of ICE shall consist of Village residents and/or property owners, and (c) members of the Board of Directors shall not receive any compensation..."

     The ICE website currently shows only 6 members of their Board, whose demographics are not clearly stated.

No Joint Venture:  "...ICE shall be considered an independent contractor for all purposes" 

Financial Interests:  "No elected official, officer, agent or employee of the Village shall have a financial interest directly or indirectly in this Agreement or any compensation to be paid under it...nor any elected or appointed officer of the Village...may be a partner, officer, director or proprietor...no such...may have a material interest in ICE...direct or indirect ownership of more than 5% of the total assets..." 

ICE Events of Default: 19.1 Failure to Perform:  "ICE's failure to perform any material obligation or fulfill any covenant or agreement..."  19.2 False Representation:  "If any representation or warranty made in the Agreement by ICE is false, misleading, or breached in any material respect."

RECOMMENDATION

     The Village Council ought to ask many serious questions about ICE's apparent disregard for many significant aspects of this contract, most especially the lack of accountability for "about a million dollars" in funds raised on public land and spent without public oversight, and consider suspending its renewal immediately, and starting over with a new RFP containing far more mandatory and detailed oversight.

Click here to see the Village contract with ICE.