|
Back to Calendar
Return
|
| |
County Administrator's Report 16. 7.
|
| BCC Regular Meeting |
Budget & Finance Consent |
|
|
|
| RECOMMENDATION: |
Recommendation Concerning Payment of the SMG Incentive Fees for the Pensacola Bay Center - Amy Lovoy, Assistant County Administrator
That the Board approve and authorize the issuance of a Purchase Order to pay incentive fees to SMG Management Services for Fiscal Year 2016, for performance incentives in the amount of $157,286.60, as part of the SMG Management Services Agreement, approved by the Board on February 16, 2012, and amended May 21, 2015.
[Funding: Fund 409, Bay Center Management Fee, Cost Center 360401, Account 53401] |
| BACKGROUND: |
On February 16, 2012, the Board approved to extend the Pensacola Civic Center Management Services Agreement with SMG, a three-year Agreement for management services at the Pensacola Bay Center, commencing October 1, 2012. The extension allowed for 5% commission on all food and beverage revenues and an incentive fee of 35% of any reduction in the net loss up to $250,000 over a pre-established benchmark or 40% of any reduction over $250,000. The Agreement also required that SMG pass an annual facilities inspection to qualify for any incentive.
On May 21, 2015, the Board approved the Amendment to Management Services Agreement between the County and SMG for the Pensacola Bay Center to allow for the negotiation of an adjusted benchmark used to determine the SMG annual incentive fee in the event of an increase to net operating loss, due to the Pensacola Bay Center Ice Hockey Lease between Escambia County and the Pensacola Ice Flyers.
Article 16.2 of the Pensacola Civic Center Management Services Agreement was amended as follows:
16.2 Incentive Fee. In addition to the fixed fee, Escambia County shall pay to Management Company an annual Incentive Fee (beginning October 1, 2011) based upon financial performance. The Incentive Fee shall be prorated for any partial Fiscal Year upon termination or expiration of this Agreement. The Incentive Fee shall be calculated as a percentage of the improvement in actual New Operating Loss compared to the Net Operating Loss Benchmark, as follows:
| % of improvement |
% to County |
% to SMG |
| Up to $250,000 |
65% |
35% |
| Greater than $250,000 |
60% |
40% |
The total Incentive Fee that may be earned by Management Company during any Fiscal Year may not exceed 150% (or $263,250 or in subsequent years an amount equal to 1.5 times the amount of the base fee adjusted for inflation as shown in Section 16.1) of the annual Fixed Fee during any Fiscal Year. Qualification for the Incentive Fee shall be contingent upon satisfactory annual inspection of the Pensacola Civic Center as provided in Section 5.4.4.
If the anticipated Net Operating Loss should increase during any Fiscal Year due to the use of the Pensacola Bay Center for professional ice hockey pursuant to the terms and conditions of the Pensacola Bay Center Ice Hockey Lease or for waivers made by the County, in whole or in part, for any applicable user fees or operational expenses referenced herein then County and Management Company agree to negotiate in good faith to determine an adjusted Net Operating Loss Benchmark for the purpose of calculating Management Company's annual Incentive Fee.
The Fiscal Year 2016 Food and Beverage Incentives were paid for October 1, 2015, through August 31, 2016, in the amount of $98,574, on October 6, 2016. The September 2016 Food and Beverage Incentives were paid in the amount of $7,078, on May 17, 2017. |
| BUDGETARY IMPACT: |
| Funding: Fund 409, Cost Center 360401, Account 53401. |
| LEGAL CONSIDERATIONS/SIGN-OFF: |
| N/A |
| PERSONNEL: |
| N/A |
| POLICY/REQUIREMENT FOR BOARD ACTION: |
| Board approval is necessary. |
| IMPLEMENTATION/COORDINATION: |
| N/A |
|
|
|
|