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6.7 Kenwood Cove Concession Agreement AmendmentCITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 02/25/2013 4:00 P.M. ORIGINATING DEPARTMENT: FISCAL APPROVAL: AGENDA SECTION NO: 6 BY: PARKS AND RECREATION FINAL APPROVAL: ITEM NO: Page 1 7 BY: Dion Louthan BY: ITEM: Resolution No. 13-6984 A resolution authorizing a first amendment to the Kenwood Cove Concession Agreement with Hungry Cats, Inc. BACKGROUND: Hungry Cats, Inc. has operated as the concessionaire at Kenwood Cove for the last three years. Overall the service and products have met the requirements set forth in the existing contract. Feedback from users indicates that customers enjoy the offerings, but would like to shorten wait times. As part of the first amendment to the contract, language has been added to include the use of a mobile concession cart during peak hours and Hungry Cats, Inc. will pay an additional 1% in gross sales to the City of Salina. Because Kenwood Cove was financed with bond proceeds, the agreement must comply with certain requirements imposed by IRS Regulations relating to, among other things, the form of compensation payable to Hungry Cats, Inc. Although the IRS Regulations are less stringent during the “initial start- up period” for bond-financed facilities, the City’s Bond Counsel has advised that the agreement is now likely to be subjected to more stringent requirements, since Kenwood Cove is approaching its third year in operation. However, Bond Counsel also advised that the Concession Agreement can be exempted from these requirements if the total cost of the concession area can be shown to represent less than 5% of the proceeds from the bonds issued to finance Kenwood Cove. City staff consulted with Jones, Gillam, Renz Architects, Inc., the lead architect and designer for Kenwood Cove, and obtained written confirmation that the total cost of the concession area represents less than 5% of the net proceeds from the bonds. Accordingly, Bond Counsel has approved the Concession Agreement as compliant with federal law, and no changes are needed to the form of compensation payable to Hungry Cats, Inc. FISCAL NOTE: The gross sales amount due to the City from Hungry Cats, Inc. will increase from 23.5% to 24.5%. CONFORMANCE WITH STRATEGIC PLAN: The city will provide the highest quality of services, consistent with governing body direction, available resources and staff commitment to quality. RECOMMENDED ACTION: Staff submits the following options for City Commission consideration. 1. Adopt Resolution No. 13-6984 authorizing a first amendment of the Kenwood Cove Concession Agreement with Hungry Cats, Inc. 2. Reject proposed changes to the Kenwood Cove Concession Agreement and maintain existing contract. 3. Provide different or additional changes to the Kenwood Cove Concession Agreement. City staff recommends option 1. AMENDMENT TO CONCESSIONS MANAGEMENT AGREEMENT This Amendment to Concessions Management Agreement (“Amendment”) is made and entered into this 25th day of February, 2013, by the CITY OF SALINA, KANSAS, (“City”) and HUNGRY CATS, INC., a Kansas corporation, (“Hungry Cats”). Recitals A. The City and Hungry Cats are parties to a Concessions Management Agreement dated April 26, 2010 (“Agreement”) under which Hungry Cats agreed to provide food and beverage concession services at the City’s aquatic park known as “Kenwood Cove.” B. The parties desire to make certain modifications to the Agreement affecting the compensation payable to the City, and the timing and scope of services provided by Hungry Cats at Kenwood Cove. FOR AND IN CONSIDERATION of the mutual and reciprocal promises and agreements set forth herein, the parties agree as follows: Section 1 – Amendment of Section 2. Section 2 of the Agreement is amended to read as follows: 2. Compensation. Hungry Cats, Inc. shall pay to the City for the right to conduct the Concession Operation at Kenwood Cove the sum of 24.5% of the gross sales per calendar month from the Concession Operation for each month of the Season, payable on or before the 10th of each following month (June 10th, July 10th, August 10th and September 10th). If, however, the average daily attendance at Kenwood Cove for the days of operation during any calendar month of the Season is greater than 1,900 persons per day, the percentage to be paid by Hungry Cats, Inc. to the City will increase to 28.5% of gross sales for that calendar month. Attendance numbers will be provided to Hungry Cats, Inc. by the City on or before the third day of operation following the qualifying calendar month. The parties acknowledge that the point-of-sale hardware and software provided by the City will enable both parties to monitor and verify gross sales from the Concession Operation. Section 2 – Amendment of Section 9. Section 9 of the Agreement is amended to read as follows: 9. Time of Operation and Related Duties. Hungry Cats, Inc. shall conduct the Concession Operation during all times Kenwood Cove is open to the general public and during special events at the direction of the City. On regular days Kenwood Cove is open to the general public, Hungry Cats will commence the Concession Operation from 15 minutes prior to the scheduled opening time to one-half hour before the scheduled closing time. During weekend hours and/or 2 heavy use periods, Hungry Cats, Inc. will provide and staff a food/beverage cart at an agreed upon location within the facility. Section 3 – Amendment of Section 27. Section 27 of the Agreement is amended to read as follows: 27. Equal Opportunity. (a) In conformity with the Kansas act against discrimination and Chapter 13 of the Salina Code, Hungry Cats and its subcontractors, if any, agree that: (1) Hungry Cats shall observe the provisions of the Kansas act against discrimination and Chapter 13 of the Salina Code and in doing so shall not discriminate against any person in the performance of work under this Agreement because of race, sex, religion, age, color, national origin, ancestry or disability; (2) Hungry Cats shall include in all solicitations, or advertisements for employees, the phrase “equal opportunity employer,” or a similar phrase to be approved by the city’s human relations director; (3) If Hungry Cats fails to comply with the manner in which Hungry Cats reports to the Kansas human rights commission in accordance with the provisions of K.S.A. 44-1031 and amendments thereto, Hungry Cats shall be deemed to have breached this Agreement and it may be canceled, terminated or suspended, in whole or in part, by the City; (4) If the Hungry Cats is found guilty of a violation of Chapter 13 of the Salina Code or the Kansas act against discrimination under a decision or order of the Salina human relations commission or the Kansas human rights commission which has become final, Hungry Cats shall be deemed to have breached this Agreement and it may be canceled, terminated or suspended, in whole or in part, by the City; (5) Hungry Cats shall not discriminate against any employee or applicant for employment in the performance of this Agreement because of race, sex, sexual orientation, gender identity, religion, age, color, national origin, ancestry or disability; and (6) Hungry Cats shall include similar provisions in any subcontract under this Agreement. 3 (b) The provisions of this section shall not apply to this Agreement if Hungry Cats: (1) Employs fewer than four employees during the term of this Agreement; or (2) Agreements with the City for cumulatively $5,000 or less during the City’s calendar fiscal year. Section 4 – No Other Changes. Except as otherwise stated in this Amendment, the Agreement, as amended herein, shall continue in full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment to be signed by their duly authorized representatives on the day and year first above written. CITY OF SALINA, KANSAS By: ________________________________ Norman M. Jennings, Mayor ATTEST: By: _____________________________ Lieu Ann Elsey, CMC, City Clerk HUNGRY CATS, INC. By: ___________________________________ Brian Wise, President RESOLUTION NUMBER 13-6984 A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE A FIRST AMENDMENT TO THE KENWOOD COVE CONCESSION AGREEMENT WITH HUNGRY CATS, INC. BE IT RESOLVED by the Governing Body of the City of Salina, Kansas: Section 1. That the Mayor is hereby authorized to execute an agreement with Salina Area Chamber of Commerce to provide Economic Development Services, in an amount not to exceed $ subject to the terms and conditions of the agreement. Section 2. That the City Clerk is hereby directed to file the original agreement and retain according to the City of Salina Records Management Policy. Section 3. That this resolution shall be in full force and effect from and after its adoption. Adopted by the Board of Commissioners and signed by the Mayor this 25th day of February 2013. Norman M. Jennings, Mayor (SEAL) ATTEST: Lieu Ann Elsey, CMC, City Clerk