C7Q - Increase Rhythm Foundation Funding to $150,000

Resolutions - C7 Q

COMMISSION MEMORANDUM

RECOMMENDATION

The Administration supports accepting the recommendation of the Finance and Economic Resiliency Committee (FERC) at its June 11, 2025 meeting to provide the Rhythm Foundation with a nine-year management agreement extension and an increase in the annual funding contribution provided by the city to $150,000 to be considered as part of the Fiscal Year 2026 budget process and to renegotiate the agreement in three years for a possible increase in funding. The Administration further recommends waiving by 5/7th vote the formal competitive bidding requirement in Section 2-367(e) of the City Code, finding such waiver to be in the best interest of the City and the Rhythm Foundation, Inc. for the nine-year term commencing on October 1, 2028 and expiring on September 30, 2037, and authorizing the City Manager to negotiate and execute the agreement. Continued existing funding provided by the City to the Rhythm Foundation for the rental waiver program, North Beach Socials, Arts in the Parks, and annual Youth Music Festival program should remain intact.

The Administration recommends that while the City Commission evaluates an amendment to the Rhythm Foundation Management Agreement to include a new nine-year management agreement and an increase in the annual funding contribution provided by the city to $150,000 to be considered during the FY 2026 budget process, it also carefully considers several critical factors that will significantly impact the General Fund budget, beginning in FY 2026:

1. The City’s increasing unfunded capital improvement program. 2. Long-term General Fund financial projections indicating a potential shortfall in upcoming fiscal years. 3.The passage of Amendment 5 in November 2024, which increases the homestead exemption and further constrains the growth of taxable property values.

These considerations are essential to ensure that decisions regarding amending the management agreement with the Rhythm Foundation to include a new nine-year management agreement and an increase in the annual funding contribution provided by the City aligns with the City’s broader long-term financial stability and strategic priorities.

BACKGROUND/HISTORY

During the May 21, 2025 City Commission meeting, the Mayor and City Commission referred a discussion item to the Finance and Economic Resiliency Committee (“FERC”), to discuss an amendment to the Rhythm Foundation agreement with the City of Miami Beach for the management of the Miami Beach Band Shell to include a nine-year management agreement extension and an increase in the annual funding contribution provided by the City to be considered during the fiscal year 2026 budget process. (Exhibit A)

As outlined in the referral memo, on April 23, 2014, the City issued Invitation to Negotiate No. 2014-215-LR for Band Shell Management Services. On September 10, 2014, the City Commission adopted Resolution No. 2014-28722, authorizing the administration to negotiate with The Rhythm Foundation (TRF), as the top-ranked proposer pursuant to the ITN, for the management and operation of the facility (then referred to as the “North Shore Band Shell”). The City entered into a Management Agreement with TRF for an initial term of two years, with the option of up to three additional one-year terms. The agreement included an initial annual contribution from the City towards the operation of the facility for the first fiscal year of the agreement in the amount of $30,000. Thereafter, the annual contribution from the City for the balance of the term and any renewal terms was $45,000. (Exhibit B)

On June 5, 2019, the City Commission adopted Resolution No. 2019-30846 accepting the recommendation of the City Manager waiving the 5/7th vote, the competitive bidding requirement, finding such waiver to be in the best interest of the City, and approving and authorizing the City Manager to execute a management agreement between the City and TRF for management of the City’s North Shore Band Shell, for a period of five years, with two successive two-year renewal options. The agreement included an annual contribution from the City towards the operation of the facility for the first contract year of the agreement in the amount of $45,000. Thereafter, the $45,000 annual contribution from the City is increased annually by CPI or 3% whichever is smaller, for the balance of the term and any renewal terms. (Exhibit C)

On May 10, 2024, a renewal of the bid waiver agreement pursuant to Resolution No. 2019-30846 for the management of the Miami Beach Band Shell by TRF was completed, renewing the agreement under the same terms, conditions, and pricing set forth in the agreement for two years. (Exhibit D)

At the June 11, 2025, FERC meeting, the Committee unanimously recommended not only to support the nine-year management agreement extension, but also to increase the annual contribution provided by the City to the Rhythm Foundation to $150,000 and to renegotiate the agreement in three years for a possible increase in funding.

ANALYSIS

It is important to note that the original 2014 Management Agreement between the City of Miami Beach and the Rhythm Foundation did not include a provision for annual adjustments to the City’s contribution based on the CPI. The 2019 agreement does allow for CPI with a cap set at 3%.

The City also provides funding support to the Rhythm Foundation for the rental waiver program issued through the City’s Cultural Arts Council, the North Beach Socials, Arts in the Parks, and the annual Youth Music Festival managed by the Rhythm Foundation.

The Administration supports a new nine-year agreement (Exhibit E) and waiving, by a 5/7th vote, the formal competitive bidding requirement in Section 2-367(e) of the City Code, finding such waiver to be in the best interest of the City. The Administration also supports the recommendation of the FERC to increase the annual funding contribution provided by the City to the Rhythm Foundation to $150,000 to be considered during the FY 2026 budget process. Continued existing funding of the rental waiver program for 12 waivers valued at up to $4,000 per day (with a maximum of 4 days), the $15,000 allocated annually for the North Beach Socials, the $25,000 allocated annually for Arts in the Parks, and the $51,000 for the annual Youth Music Festival will also remain in place.

FISCAL IMPACT STATEMENT

If the Commission accepts the Administration’s recommendation, the total budgetary impact would be an additional $100,000 to provide a flat base annual contribution of $150,000 in addition to continued funding of the rental waiver program for 12 waivers valued at up to $4,000 per day (for a maximum of 4 days), the $15,000 allocated annually for the North Beach Socials, the $25,000 allocated annually for Arts in the Parks, and the $51,000 for the annual Youth Music Festival.

Does this Ordinance require a Business Impact Estimate? (FOR ORDINANCES ONLY)

If applicable, the Business Impact Estimate (BIE) was published on: See BIE at: https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/

FINANCIAL INFORMATION

N/A

CONCLUSION

Attachments: Exhibit A – Referral Memo from May 21, 2025 Commission Meeting Item C4 I Exhibit B – Resolution 2014-28722 Exhibit C – Resolution 2019-30846 Exhibit D – TRF Renewal Extension #1 Exhibit E – Management Agreement Between the City of Miami Beach and The Rhythm Foundation

Applicable Area

North Beach

Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

If so, specify the name of lobbyist(s) and principal(s):

Department

Parks and Recreation

Sponsor(s)

Co-sponsor(s)

Condensed Title

Increase Annual City Funding Rhythm Foundation/Execute New Management Agmt. PKS 5/7

Previous Action (For City Clerk Use Only)