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HomeMy Public PortalAbout2006 Appraisal Services For Key BiscaynePhone:74} .39=2515 Fax: (704):,p9=0384 Mobile: (704) 9,5,-9780 - Email address.'lflemmMg7a american-appxaisal.com United States American Appraisal Associates' 8833 Westmoreland Lake Drive Cornelius, North Carolina 28031 Telephone (704) 439-2515 Mobile (704) 953-9780 Fax (704) 439-0384 www amencan-appraisal corn International September 15, 2006 Founded in 1896 (Revised September 21, 2006) Mr. Randy White Village of Key Biscayne 88 W. McIntyre Street Key Biscayne, FL 33149 Dear Mr. White: American Appraisal Associates, Inc. ("American Appraisal") is pleased to submit our recommendations and proposal for the valuation of specified buildings, contents, and land improvements of the Village of Key Biscayne (the "Village"). In developing our recommendations we have given consideration to the property schedule that you provided to me, and our past experience and expertise in addressing the insurance valuation needs of numerous municipal clients, including members of the Florida Municipal Insurance Trust. PURPOSE AND BENEFITS A professional appraisal is essential for proper insurance planning because it: Provides the insured with the proper basis to determine the amount of coverage to be carried Allows for competitive and well -thought-out bids on insurance coverage Properly segregates values between buildings and contents risk, as well as other floater items In the event of a loss, this appraisal can serve as a foundation to generate proof of loss documentation. Most insurance policy provisions require an inventory, scope of damage, and values to be current "as of the date of the loss". This can only be Village of Key Biscayne 2 September 21, 2006 2505-06-047 completed after a loss has occurred, but our report can serve as the guideline for this process. Provides a solid basis for economical perpetuation of valuation information on a go - forward basis. Assures proper accountability The purpose of our appraisal, therefore, effort will be twofold: First, to establish current insurable values for insurance placement; Second, to establish a method to keep the values up-to-date, on an annual basis, considering physical changes in the buildings and structures and changes in the cost of labor and materials. INCLUSIONS The assets to be included will comprise the buildings/structures with a value of $100,000 and above, contents on a modeling basis and insurable land improvements as listed in the Schedule of Properties provided to us (attached and marked Exhibit A). The above -described quantities are subject to revision based on input from the Village and can be modified with a corresponding adjustment in fees. We will work with Village staff to identify locations that should be deleted or added to the scope of work before initiating our field investigation The following types of properties will be excluded from our appraisal: • Licensed Vehicles • Leased properties • Property not -in-service or pending disposal • Personal property of employees or others • St. Agnes Properties • School Properties METHODOLOGY - Buildings/Structures/Contents/Insurable Land Improvements A. The professional services we shall perform will commence with a preliminary meeting with Village staff and our project manager for the purpose of: • Reviewing the procedures and methods we will follow. Identifying the specific nature of property coverage including possible variances from standard policy requirements, such as functional replacement or agreed amount endorsements. Establishing a mutually agreeable work schedule that will not interrupt operations. Village of Key Biscayne 3 September 21, 2006 2505-06-047 Developing procedures for admission to the facilities and discussing any restrictions Arranging for work space and identification badges, if needed. Gathering any information relevant to the work such as blueprints and drawings. Discussing our standard report format to see if minor changes should be made to accommodate any internal requirements the Client may have Village participation will be minimal and generally limited to providing access to locked areas, supplying building plans and assistance in locating property in remote or unmarked areas. B. Following this meeting, our Project Manager and assigned staff will perform the field work phase of the engagement, which will include: An inspection and inventory of the pertinent data such as size, type of construction, configurations and classification of buildings, building fixtures, building services, interior and exterior finish, roof type Confirmation of addresses and zip codes for each location An independent gathering of local prices for labor and materials applicable to the properties Site plan for each location will be provided An inspection and valuation of property in the open (land improvements) will be made, to include improved parking lots, signage, antennas, radio towers, outdoor lighting, fencing, etc. Digital color photograph of each structure. CONTENTS — MODELING APPROACH Following completion of the physical inspection of buildings, American Appraisal will use its internally developed, proprietary database to estimate the insurable value of the contents of each included building. Replacement costs for each building's contents are based on the usage of each building, (i e administration buildings, municipal facilities, maintenance or general use buildings). We use a unique database that contains contents data from thousands of municipal buildings appraised by American Appraisal's Property Appraisal Services Group. This system categorizes buildings by like type (those hsted above) and develops an average contents value per -square -foot of building area. This unique approach generates a replacement cost estimate for a given building's contents (based on building type and size) without requiring the lengthier and more costly physical inventory inspection process. Village of Key Biscayne 4 September 21, 2006 2505-06-047 Using statistical analysis, the database has building content models for all standard public buildings. Further, it has the ability to alter the models, when necessary, to account for above or below average contents values, based on observation by our staff during the inspection process. Specific items of property excluded from coverage, per the terms of Village's current insurance policy, will be excluded from the building valuation. In order to accurately recognize insurance exclusions, a copy of the policy section specifying the components excluded must be provided to American Appraisal Associates prior to the commencement of fieldwork. If a copy of the appropriate section(s) is not provided, property exclusions will not be considered in the valuation process. PREMISE OF VALUE A. Based upon the data gathered, our appraisers will perform a pricing phase in order to determine our opinion of: Cost of Reproduction New (CRN), defined as the amount required to reproduce a duplicate or a replica of the entire property at one time in like kind and materials in accordance with current market prices for materials, labor and manufactured equipment, contractors' overhead and profit, and fees, but without provision for overtime, bonuses for labor, or premiums for material or equipment. Cost of Reproduction New is synonymous to the insurance industry term "Replacement Cost". B. The appraisal will not consider the replacement of the property to conform with local building codes, ordinances, or other legal restrictions; nor will it consider the cost of demolition in connection with reconstruction or the removal of destroyed property. C. It should be noted that the pricing phase of the engagement is critical to the accuracy of our opinion Sources of information which we use in this phase include: • Manufacturers' price lists, catalogs, and quotes • Distributor and supply company catalogs • Industry publications, directories, and trade journals • Consulting, cost engineering, cost estimating manuals, and handbooks • Technical and pricing subscription services and pricing guides • Contract documents/invoices you may supply • Technical service organizations and industry experts D. Our appraisers who perform the on -site fieldwork complete the pricing phase themselves, utilizing their own notes from the field and the other sources mentioned above This then is Village of Key Biscayne 5 September 21, 2006 2505-06-047 reviewed by managers in the firm as part of our extensive Quality Review Program We believe that our clients are the ultimate beneficiaries of this attention to detail. REPORT A After completion of our fieldwork and pricing, we will furnish our report to you in duplicate. We plan to use our proprietary software to generate your reports. The report will include. We will provide reports on 8 1/2" x 11" laser printed -paper and in PDF form on CD-ROM Photographs Contents Valuation - Modeling B. We are interested in your complete satisfaction, and therefore, after you receive our reports, we will contact you to discuss any questions or comments you may have. C. We will provide a Summary Appraisal Report, intended to comply with the reporting requirements set forth by the Uniform Standards of Professional Appraisal Practice ("USPAP") for a Summary Appraisal Report. As such, the report will present only summary discussions of the data, reasoning, and analyses used in the appraisal process to develop American Appraisal's opinion of value Supporting documentation concerning the data, reasoning, and analyses will be retained as a part of our work papers. The depth of discussion contained in the report will be specific to your needs as the client and for the intended use stated below. As an insurance appraisal, it is appropriate to only use the cost approach in our appraisal. American Appraisal is not responsible for unauthorized use of its report. You confirm that the purpose, your intended use, of the report will be for insurance placement purposes. ANNUAL UPDATE SERVICE American Appraisal's experience has shown that appraisals have an effective useful life of up to five (5) years depending upon such factors as: Quality of reported changes Level of asset activity (additions, retirements, changes) Inflationary level of economy Continuity of the reporting officials Periodic authorization of additional on -site time The appraisal renewal service, based on office re -pricing, provides the following benefits 1 A detailed program to establish an ongoing procedure for recording and reporting changes in the property appraised. Village of Key Biscayne 6 September 21, 2006 2505-06-047 2. By prior arrangement, our appraisal representatives will assist in the verification of property changes and preparation of your report of changes. 3. An annual revised Statement of Insurable Values that reflects current values of the property under service Our update of values will reflect the following factors: • Changes in real and personal property reported to us by the Village Selective re -pricing and adjustment of the appraisal base tailored to the building and equipment mix to reflect current material and labor prices in the area through customized adjustment factors. 4 If the appraised property is damaged or destroyed, we will work with the Village to provide consultation, as required Our fee for this annual appraisal update is shown as an optional service in the Fee section of this proposal. PROJECT SCHEDULE/DELIVERY Assuming prompt notification of acceptance, a project of this type will require approximately sixty (60) days to complete following completion of the fieldwork. PROFESSIONAL FEES We estimate our fees for this engagement, inclusive of related expenses, to be as follows: PRIMARY SERVICE Building/Contents/Land Improvements Appraisal $4,750.00 OPTIONAL SERVICE Annual Update Service $ 500/year This fee is based on our estimate of professional services to be furnished, according to our understanding of your requirements; should the scope of these requirements change, American Appraisal Associates, Inc. ("AAA") and Client will mutually revise the fee to reflect those changes in services. Our fee is in no way contingent upon the outcome of our conclusions. Fees include professional time for planning and executing the work through, and including, our final report Expenses include those costs for such items as office and report processing, travel, living, Village of Key Biscayne 7 September 21, 2006 2505-06-047 computer charges, postage and copying, which are directly incurred by our staff while executing the work. It is understood that our fees will be net of any applicable remittance or withholding taxes; any such applicable taxes will be the responsibility of the Client. American Appraisal Associates will invoice you for professional services rendered . Invoices are payable by the Client upon receipt and will be issued as the engagement progresses as follow: 30% Balance Upon commencement of fieldwork During the progress of the work For your convenience, we are providing our remittance address and wire transfer instructions Remittance Address: American Appraisal Associates, Inc. Bin 88391 Milwaukee, WI 53288-0391 Wire Transfer Instructions Bank Name/Address: M & I Bank 170 North Water Street Milwaukee, WI 53202 Routing Number: 075000051 For the Credit to the Account of: American Appraisal Associates, Inc. Account Number - 0024274888 We reserve the right to withhold delivery of our preliminary conclusions or final report(s) if, when either of these are ready for delivery, any previously issued invoice remains unpaid. Further, we reserve the right to issue our final invoice if preliminary conclusions or a draft report have been outstanding for more than 30 days In the event that you issue a purchase order to us covering this engagement it is agreed that such purchase order is issued for purposes of authorization and your internal use only, and none of its terms and conditions shall modify the terms and conditions of this letter and/or related documentation, or affect either party's responsibility to the other party as defined in this letter. Should AAA incur additional costs as a result of failure to pay invoices in accordance with the terms stated herein, Client will be responsible for all costs (including, but not limited to attorney's and collection agency's fees) associated with the collection of any and all unpaid amounts to which AAA is legally entitled. Further, AAA reserves the right to charge interest for Clients failure to pay on a timely basis. Village of Key Biscayne 8 September 21, 2006 2505-06-047 You have the right to terminate this assignment at any ttme, in which case there will be no further obligation on the part of either party to continue. In such event, you will be obligated to pay only for the actual time and charges accumulated through the date of cessation ENVIRONMENTAL POLICY American Appraisal will make no investigation of, nor assume any responsibility for, the existence or impact of any hazardous substance, which may or may not be present on the property, in the development of American Appraisal's conclusion GENERAL SERVICE CONDITIONS Agreement — The Contract governing this engagement including these General Service Conditions represents the entire agreement between American Appraisal and the Client It supersedes any prior oral or written agreement and may not be altered except by the mutual written agreement of all parties thereto Assignment — Neither party may assign, transfer, or delegate any of the rights or obligations hereunder without the prior written consent of the other party; unless such assignment is based upon the lawful transfer to a successor in interest of all or substantially all of the party's assets or business interests. Client of Record — Only the signed Client(s) of Record may rely on the results of American Appraisal's work. No third party shall have the reliance or contractual rights of American Appraisal's Client(s) of Record without American Appraisal's prior written consent. No party should rely on the results of American Appraisal's work as a substitute for its own due diligence Communication — With the exception of the signed acknowledgment of this Contract, electronic media including voice -mail, e-mail, and faxes are acceptable vehicles to communicate all materials unless such communication forms are expressly prohibited in the Contract. Client shall not assume or deem the Client Service Team assigned by American Appraisal to any work contemplated by the Contract to have knowledge of information provided to others not part of that team. Contingent Fees — American Appraisal's compensation is not contingent in any way upon its opinions or conclusions or upon any subsequent event directly related to those opinions or conclusions. Client shall pay American Appraisal's invoices in accordance with their stated terms. Confidentiality — American Appraisal will maintain the confidentiality of the Client's confidential information with the same degree of care that American Appraisal uses to keep its own materials confidential and shall not disclose it to anyone or use it for any purpose whatsoever other than Client's engagement, provided that in the event that American Appraisal is legally compelled to disclose such information, American Appraisal shall provide Client with prompt written notice so that Client may seek a protective remedy, if available American Appraisal shall have the right to provide access to work files as required to comply with any quality or compliance audits administered by any necessary accreditation or standards organizations with which its employees are associated. Any such access shall continue to be subject to the same confidence by both American Appraisal and the applicable organization. Information shall not be treated as confidential if: (i) it is now or later available to the public, (u) at the time of disclosure to American Appraisal, the Village of Key Biscayne 9 September 21, 2006 2505-06-047 information was already in its possession, or (in) the information was obtained from a third party under no obligation of confidentiality to Client Unless mandated by applicable laws or governmental regulations, Client shall not disclose any part of American Appraisal's work product, its confidential materials, or its role in the engagement to anyone not stipulated in the Contract, without the prior written consent of American Appraisal. American Appraisal shall have the right to include Client's name in American Appraisal's client list Force Majeure — Neither the Client nor American Appraisal shall be liable for delays or for failures to perform according to the terms of the Contract due to circumstances that are beyond their individual control. Governing Law, Jurisdiction and Venue — This Contract shall be governed by the law of the State of Wisconsin within the jurisdiction of any state or federal court located in Milwaukee, Wisconsin, having subject matter jurisdiction Indemnification — Client shall indemnify and hold harmless American Appraisal against and from any and all losses, claims, actions, damages, expenses or liabilities, including reasonable attorneys' fees, to which American Appraisal may become subject in connection with this engagement, except to the extent finally judicially determined to have resulted from the negligence or intentional misconduct of American Appraisal. Client's obligation for indemnification and reimbursement shall extend to any controlling person of American Appraisal including any director, officer, employee, subcontractor, affiliate, or agent American Appraisal's liability to Client shall in no event exceed the fees it receives as a result of the engagement, except to the extent finally judicially determined to have resulted from the negligence or Intentional misconduct of American Appraisal. American Appraisal shall indemnify and hold harmless Client against and from any and all losses, claims, or expenses for bodily injury or property damage, in proportionate part to that which is caused by American Appraisal personnel or representatives during the performance of the engagement, except to the extent of Client's negligence. While on Client's premises, the personnel assigned by American Appraisal to any work contemplated by the Contract shall comply with all posted safety instructions or safety procedures requested by Client Independent Contractor — American Appraisal and Client shall be independent contractors with respect to each other. American Appraisal reserves the right to use subcontractors in executing the engagement. American Appraisal is an equal opportunity employer. Limits on the Use of the Work — American Appraisal's report may be used only for the specific use or uses stated in the Contract, and any other use is invalid. Reliance on Information Provided by Client — American Appraisal is entitled to rely without independent verification on the accuracy and completeness of all of the information provided by Client or its advisors. Retention — Unless stipulated to the contrary in the Contract or in a related written agreement, American Appraisal will retain as its property all files, documents, work papers, and other results, developed during the course of the engagement. Such materials will be retained for a period of at least seven years. During this retention period, Client shall have access to these documents to assist Village of Key Biscayne 10 September 21, 2006 2505-06-047 it in completing the specific use or uses stated in the Contract, subject only to reasonable notification. Scope of the Work — American Appraisal shall be obligated only for services specified in the Contract, and only for changes to the scope of those services that are set forth in any subsequent written agreement. As a result, the scope of the work does not include unrelated services or the responsibility to update any of the work after its completion. Further, American Appraisal reserves the right to decline to perform any additional services, if American Appraisal believes such services would create an actual or perceived conflict of interests, or would be illegal or in violation of applicable regulations or professional standards. Standards of Performance — American Appraisal shall perform the engagement in accordance with applicable professional standards. However, professional services usually involve judgments made in an uncertain environment and based on an analysis of data that may be unverified or subject to change over time Client and other parties to whom Client provides access to the results of American Appraisal's work shall evaluate the performance of American Appraisal based on the specifications of the Contract as well as on the applicable professional standards. Testimony — American Appraisal's services do not include giving testimony or participating in or attending court or any other legal or regulatory hearing or inquiry unless provided for in the Contract or in a subsequent written agreement Village of Key Biscayne 11 September 21, 2006 2505-06-047 AUTHORIZATION This Agreement is provided in duplicate; if it correctly reflects the your understanding of American Appraisal's agreement, please confirm such by signing and returning one copy. Client hereby affirms that its stated purpose is to use the report created by American Appraisal for financial reporting and property control purposes only. To avoid any delays, please fax the signed Agreement to me at (704) 439-0384. Thereafter, please forward the original to my assistant, Shicann Phillips, at American Appraisal Associates, Inc., 2839 Paces Ferry Road SE, Suite 400, Atlanta, GA 30339. We look forward to the opportunity of serving the valuation needs of the Village of Key Biscayne and assure you, if selected, that the work will receive our careful and continued attention Respectfully submitted, Lori Flemming Director LF/sp CLIENT OF RECO : Village of K SIGNATURE: TYPED TITLE: DATE: OC.t� %ER, i0 2,3 d-6 V I tAAm, F OVAWINSEt2 Please initial below to include the services offered: Primary Service Building/Contents/Land Improvements Appraisal Optional Service Annual Update Service Village of Key Biscayne 12 September 21, 2006 2505-06-047 Composite Property Schedule Village of Key Biscayne Key Biscayne, Florida Balance Additions + Balance Additions + Balance Loc # Address Zip Code Construction Occupancy 9/30/03 Deletions - 9/30/04 Deletions - 9/30/05 #1 Bus Shelter Crandon Blvd 33149 Block/Steel Roof Across from Village Green $37,378 00 $0 00 $37,378 00 $0 00 $37,378 00 Village Green Restrooms 33149 CBS Village Green Restrooms $149,790 00 $0 00 $149,790 00 $0 00 $149,790 00 $4068,366 00 560 Crandon Blvd 33149 CBS New Fire Station $4,068,366 00 $0 00 $4,068,366 00 $0 00 $6,760,204 00 $6,760,204 00 I $0 00 $6,760,204 00 $0 00 88 West McIntyre Street 33149 CBS Village Hall/Police Department $1,438,217 00 $1,785,868 00 $3,224,085 00 Site Improvements 33149 560 Crandon/88West McIntyre $1,438,217 00 $0 00 #2 Bus Shelter Crandon Blvd 33149 Block/Steel Roof Near Intersection of Harbor Drive $0 00 $63,256 00 $63,256 00 $0 00 $63,256 00 10 Village Green Way 33149 Poured Concrete Community Center $0 00 $0 00 $0 00 $9,424,243 11 $9,424,243 11 Totals $12,453,955 00 1 $63,256 00 $12,517,211 00 $11,210,111 11 $23,727,322 11