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
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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