Loading...
HomeMy WebLinkAbout10/10/2002 B A K E R S F I E L D Mike Maggard, Chair Harold Hanson Mark Salvaggio Staff: Darnell Haynes MEETING NOTICE BUDGET AND FINANCE COMMI'I'rEE of the City Council - City of Bak~ersfield Thursday, October 10, 2002 - 4:00 p.m. City Manager's Conference Room, Suite 201 Second Floor- City Hall, 1501 Truxtun Avenue, Bakersfield, CA AGENDA 1. ROLL CALL 2. ADOPT SEPTEMBER 12; 2002 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Discussion and Committee recommendation regarding Kern Economic Development Corporation (KernEDC) funding request m Tandy 5. NEW BUSINESS A. Staff update and Committee recommendation regarding Kern-Tech, Inc. repayment of Economic Development loan m Kunz B. Staff report and Committee recommendation regarding Park Development Fee -- Rojas C. Staff report and Committee recommendation regarding acceptance of Financial Statements for the Bakersfield Centennial Garden and Convention Center -- Klimko D. Staff report and Committee recommendation regarding contract language -- Thiltgen 1. Risk mitigation language 2. Indemnity language 6. COMMITTEE COMMENTS 7. ADJOURNMENT S:\Damell'~.OO2Bud&FinanceCom mittee~bfO2oct I Oagen.doc DRAFT B A K E R S F. I E L D Alan Tandy, ~ity M~ger Harold Hanson Staff: Darnell W. Haynes Mark Salvaggio AGENOA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Thursday, September 12, 2002, 4:00 p.m. City Manager's Conference Room, Suite 201 Second Floor, City Hall, 1501 Truxtun Avenue, Bakersfield, CA 1. ROLL CALL Called to Order at 4:06 p.m. Present: Councilmembers Mike Maggard, Chair; Harold Hanson and Mark Salvaggio 2. ADOPT JULY 18, 200') AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Discussion and Committee recommendation regarding Kern Economic Development Corporation (KernEDC) funding request City Manager Alan Tandy explained staff is not ready to make a recommendation on the request for funding from KernEDC. The decision on the aquatics center has not been finalized and needs to precede the decision on an allocation to KernEDC. Some progress has been made. Staff has met with Mr. Collins and discussed what the City would like to see accomplished. Staff will continue to work on the issue and bring a recommendation to the Committee. Patrick Collins, President and CEO, KernEDC, shared information on four potential prospects that have shown interested in locating in this area. At the City Manager's request, he has been working with Economic Development staff to share information on the status of jobs the City is competing for to allow for their input. He also outlined an informational report that could be generated if it is of interest to the City. D AFT AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Thursday, September 12, 2002 Page - 2 - The Committee requested staff to continue to work toward designing a performance/payment plan, and as the timing of a recommendation is tied to other funding issues, to keep Mr. Collins informed when this item is scheduled to return to · the Committee. B. Staff report and Committee recommendation regarding Economic Development Loan Program policy Economic Development Dire(~tor Donna Kunz provided an overview of the proposed lOan policy guidelines (Included in the Committee packet). The guidelines include: -basic tenets; qualifications; cost-benefit analysis; objectives such as creating or retaining jobs, reducing blight or encouraging revitalization; security/collateral; and repayment, which would require at least an annual payme, nt (no balloon payments). The City has never had a specific policy for the CDBG and EConomic Development loan programs. In the past the City has made fOrgivable loans and grants. Staff has developed a proposed policy that meets State and Federal guidelines for the funds being used. These loans would be for applicants who already have financing, but need working capital or have cash flow needs. Since the passage of SB 975, there have been no applications for loans. It was discussed these guidelines would provide a frame work to evaluate requests. and provide applicants with a clear understanding of the requirements. The Committee unanimously approved staff proceeding with the loan policy. 5. NEW BUSINESS A. Staff report and Committee recommendation regard Charter/Code requirements for street maintenance/repair City Manager Alan Tandy explained over the last few years, the City Council has put increasing emphasis on road repairs being a priority for'the City. Staff has. responded in a major ~effort the past two or three years. The vast majority of the work has been contracted. However, there has also been an increase in the amount of time City.crews have spent on this effort. The City has an application in to the California Transportation Commission, which will be considered in December, for $12 million for road maintenance. This money was previously reserved for right-of- way acquisition on the Wests/de Parkway. If the $12 .million is released, all of the work will be contracted. The City Manager strongly discouraged any action by the Committee/Council that would give up the City's ability as an organization for City workers to respond promptly to Council priorities and needs. The City can respond to requests for street repair usually in one to two weeks time. Going out to bid is a time consuming process. Staff is not proposing a fundamental shift in how the City operates, and the lion's share of road repairs will continue to be contracted. DRAFT Budget and Finance Committee Meeting Thursday, September 12, 2002 Page - 3- Public Work Director Raul Rojas provided a presentation in response to questions raised in a letter .to the City Council from Mr. Troxel who represents a group of contractors who had concerns about City crews doing road work. The Streets Division has always maintained City roads and performed short-term maintenance on arterials and on a long-term basis prepared other projects. Since the turn of the century, the City has been maintaining roads and has not expanded that role. The City's focus has been changed because of the condition of the arterial roads, which needed to be repaired before they completely failed. Workshops were held in front of the Council. There were requests from Councilmembers to add another City crew. There was also a huge push in the contract amount. The City purchased new equipment (paving machine, pulverizer and two dump trucks) for $685,000. The paving machine was actually not additional; it replaced the old machine, which went into a backup role. The old paving machine had about 50 days of downtime the previous year. Fifty days constitute about 30% to 40% of the _window to do road work. When this equipment goes down, trucks are loaded with asphalt that cannot be used on roads and residents are stuck. The new pulverizer has helped increase efficiency. It allowed doubling the road repair miles: completed on the residential side. The two new dump trucks were needed to work with the pulverizer and three personnel were added to operate the equipment. Streets Division personnel have years of experience and are well qualified to inspect road work. The City does not test its work for compaction and oil standards. Tests are performed on work on the capital improvement side. Testing is required for all contract work. It was discussed the City Charter contains an exception for street maintenance and repair and the Municipal Code provides the process authorizing such work to be performed 'by the City, which requires City Council approval of expenditure (adoption of the budget) and delegation of the project approval responsibility to the city manager. All members of the Committee agreed no change in policy is warranted and spoke in support of Public Works and Streets Division' employees who have done agreat job working on our roads and requested Public Works staff in attendance to convey their thanks and appreciation to all employees who work on our roads. 6. COMMITTEE COMMENTS 7. ADJOURNMENT The meeting adjourned at 6:06 p.m. DRAFT Budget and Finance Comm~ee Meeting Thursday, September ~2, 2002 Page - 4- Staff present: City Manager Alan Tandy, City Attorney Bart Thiltgen; Assistant to the City Manager Damell Haynes; Public Works Director Raul Rojas; Assistant Public Works Direct Jack LaRochelle; Economic Development Director Donna Kunz; Public Works Civil Engineer Arnold Ramming; Public Works Operations Manager Brad Underwood; Street Superintendent Luis Peralez; Street Supervisor Mike Connor; Construction Superintendent Stuart Patteson; Construction Supervisor Rick Millwee; and Public Works Civil Engineer Nick Fidler. Others present: Patrick Collins, President and CEO, Kem EDC; Brad Troxel, Asphalt Contractors; Chuck Waide and Denny Haynes, CCAPE; bfO2s~pl 2summa~ A K E R $ F I E L OFFICE OF THE CITY MANAGER MEMORANDUM October 4, 2002 TO: Budget and Finance C°mmittee FROM: Alan Tandy, City Manager // SUBJECT: Financial Contribution to Kern Econ6mic Development Corporation At your last meeting, I requested an additional month to think over options and alternatives for continuing our financial contribution to Kern Economic Development Corporation. Since that meeting, our staff has met with Mr. Patrick Collins to discuss the issues in greater detail. Back.qround As presented to you in earlier discussions, KernEDC initially requested a $150,000 contribution for Fiscal Year 2002-03. Such an increase would have been 150% over the existing $60,000 base funding agreement. In addition to this base, there is an additional $40,000 in potential incentive funds that can be earned by KernEDC. This incentive portion of the agreement has been in effect since FY 1998-99. Of the $160,000 in potential incentive monies available since that time, only $'70,000, or 44%, has been claimed by KernEDC. Recommendation I recommend providing KernEDC with a $20,000 base contribution for FY 2002- 03 and an additional $50,000 in potential incentive funding. This provides KernEDC the opportunity to earn a potential $70,000 in the current fiscal year. The term of this proposed agreement would be for one year, retroactive to July 1, 2002. There are five key points of the proposed funding arrangement: 1. Calculation of Incentive: Current a.qreement: KernEDC can earn $5,000 for each (50) jobs any one employer creates in the first two years of the employer's existence in the City. Proposed chan.qe: $5,000 could be earned for each increment of (50) jobs that may be created at more than one company in the first two years of the employer's existence in the City. This change would be a cumulative total that would allow credit for, say, two companies at (25) each, five companies at (10) each, etc. However, the (50) would remain the trigger for any incentive payment to be made. S :'~}amellX2002 Bud&FinanceCommittee\--KEDCmemooct02.doc Budget and Finance Committee October 4,2002 Page 2 2. Payment of Incentive: Current a.qreement: Payment of the incentive is made in a lump sum during the following fiscal year for work performed in the current fiscal year. Proposed chan.q~: Payment of the'incentive would be made when each cumulative (,50) job benchmark has been reached. This proposed change would provide a more immediate payment of the incentive for the work KemEDC completes. 3. Reference to Clients: Current a.qreement: The documentation of "meaningful contacts" related to companies that would qualify KernEDC for the incentive payment must include · the file number. Proposed change: KernEDC no longer uses file numbers but, instead, refers to the client by a name, such as Project Smart. 4. Registration of Clients: Current agreement: This issue is not addressed in the current agreement. Pr. oposed addition: KernEDC and City staff would develop a mutual list of contacts that fall under the terms of the contract. Should the contract not immediately be renewed, this list would document those clients that both parties agree are covered under the contract for payment once the employer creates the necessary jobs. 5. Presentations to City Council: Current aqreement: This issue is not addressed in the current agreement. Proposed addition: KernEDC would make two presentations to City Council during the term of the agreement to provide an update on activities. Additional point requested by KernEDC I do not support an additional point requested .by Mr. Collins but include it for your information. Mr. Collins requested that the jobs eligible for incentive payment be expanded beyond those created at new companies moving to the City. He asked that the contract (1) recognize the new jobs that are created at existing companies that are directly tied to KernEDC's efforts, and (2) calculate incentive payments at the same rate' as for new jobs at new companies. Mr. Collins feels this would recognize KernEDC's efforts .to develop local industry clusters and create additional job opportunities that, in turn, make Bakersfield more attractive to new employers. dl:\S :\Dameil~2002Bud&FinanceCommittee\--KEDCmemooct02.doc Budget and Finance Committee October 4,2002 ,,Page 3 I believe the expansion of a company's workforce is a function of many variables, including the community's overall business climate, changes in the company's industry, pressures to remain competitive and, hopefully, the positive experiences the company has had with local government. Each of these factors allow the company to undertake the financial investment and risk necessary to expand its workfome. The City of Bakersfield has a longstanding record of financial support of KernEDC and is one of its founding members. Our goal in this support has been the creation of jobs in Kern County and, specifically, in the City of Bakersfield. As mentioned previously, a significant portion of our funding arrangement has been incentive-based. While I support the first five points detailed above, I do not support including jobs created at existing companies among the jobs that would qualify KernEDC for incentive payments. dl:~S :~amell~2002 Bud&FinanceCommittee\--KEDCmemooct02.doc BAKERSFIELD PUBLIC ~WORKS DEPARTMENT MEMORANDUM TO.' ALAN TANDY, City Manager FROM: RAUL M. ROJAS, Public Works Director DATE: September 30, 2002 SUBJECT: Park Development Fee The Park Development Fee was referred to the Budget and Finance Committee at the July 3 l, 2002, Council meeting. Attached is the following background information: · Original administrative report and attachments submitted to Council at the July 31 st Council meeting. · Copy of a letter addressed to the BIA (dated July 24, 2002). This letter was prepared by staff in response to verbal questions raised by the BIA. · Copy of letter (dated September 9, 2002) and attachments sent to the BIA in response to a written request for information. G:\GROUPDATXMemoX2002\Park Dev Fee.doc ADMINISTRATIVE REPORT I MEETING DATE: July 31,2002 ~ AGENDA SECTION: Hearings I ITEM: 9.b. TO: Honorable Mayor and City Council APPROVED FROM: Raul Rojas, Public Works Director DEPARTMENT HEAD /Y~..~ DATE: July 1,2002 CITY ATTORNEY CITY MANAGER SUBJECT: Headng to consider a Resolution approving and adopting an adjusted fee for the development and improvement of parks within the City of Bakersfield. (All Wards) RECOMMENDATION: Staff recommends adoption of resolution. BACKGROUND: In accordance with Section 15.82.060 of the Bakersfield Municipal Code, the following is the Public Works Director's annual report to the City Council with updated, new or additional information regarding the fee amount collected for the development of parks within the City. City staff recommends the following changes to this fee: PARK DEVELOPMENT FEE PER DWELLING UNIT Proposed Type of Dwelling Unit Proposed Fee Amount Current Fee Amount Increase Single Family Dwelling $653 $635 $18 Duplex Dwelling Unit $653 $635 $18 Multiple Family Dwelling Unit $653 $635 $18 Mobile Home $653 $635 $18 The park development and improvement fee proposed for fiscal year 2002-03 is adjusted in accordance with the inflation rate of 2.8% as indicated in the Apdl 2002 Consumer Pdce Index attached' hereto. The park development fee was last adjusted in January, 2001. Informational notices were mailed to the Building Industry Association, Amedcan Institute of Architects, and North Bakersfield Recreation and Parks District. RESOLUTION NO. RESOLUTION APPROVING AND ADOPTIN'G AN ADJUSTED FEE FOR THE DEVELOPMENT AND IMPROVEMENT OF PARKS WITHIN THE CITY OF BAKERSFIELD WHEREAS, Chapter 15.82 of the Bakersfield Municipal Code requires the Public Works Director to submit an annual report to the City Council with updated, new or additional information regarding the park development fee amount to be collected for each new dwelling unit, and that a public hearing shall be conducted if the City Council determines that the fee schedule should be adjusted; and WHEREAS, on July 31, 2002, said Public Works Director's report was submitted to the City Council to consider adjustment of a fee for the purposes of developing and improving parks and recreational facilities within the City of Bakersfield; and WHEREAS, on July 31, 2002, the City Council held a public hearing to receive public comment regarding the proposed adjusted park development and improvement fee schedule; and WHEREAS, informational notices were mailed to the Building Industry Association, Architects Association and North Bakersfield Recreation and Parks DisuSct: and WHEREAS, the law and regulations relating to the preparation and adoption of Negative Declarations as set forth in CEQA and the City of Bakersfield local implementation procedures have been duty followed by the City staff: and WHEREAS. for the above described resolution, Ciw Council approved a Negative Declaration on October 17, 1990: and WHEREAS, new residential development generates a need for improved public parks and recreational facilities; and WHEREAS, the fee addresses the City of Bakersfield's particular needs for the provision of improved local public parks for new residential development; and WHEREAS, Policy Three of the Parks Element of the Metropolitan Bakersfield 2010 General Plan requires new residential development to provide improvements and. or in-lieu fees for parks; and WHEREAS, the requirements of Section 66001 of the Government Code have been met; and -l- WHEREAS, the Consumer Price Index indicates an inflationarv increase of 2.8 percent for the year ending April 2002; and WHEREAS, the City Council desires to adjust the fee for inflation in accordance with the Consumer Price Index; and WHEREAS, the City Council, from time to time, may consider adjustment to the fee schedule to reflect new information effecting the fee, as specified in Ordinance No. 3327; and WHEREAS, the amount of the fee shall be levied as follows, except as specified as exempt in Ordinance No. 3327. Single Family Dwelling $653 Duplex Dwelling Unit $653 Multiple Family Dwelling Unit $653 Mobile Home $653 NOW, THEREFORE, IT IS HEREBY FOU.'ND AND RESOLVED AS F ' OLLOWS: I. The above recitals, incorporated herein, are true and correct. 2. All required public notices have been given. 3. The provisions of CEQA have been followed. 4. The Negative Declaration approved and adopted on October 17, 1990 is adequate for the proposed adjustment in the amount of park fee. 5. The fee is in the public interest and is necessary for public convenience, health, welfare and safety,. 6. The fee established by this resolution is for the purposes of developing, improving and/or enhancing public parks and recreation facilities within the City of Bakersfield. 7. The fee shall be used to defray all or a portion of the cost of developing, improving or enhancing of public parks and recreation facilities serving new residential developments. These parks and recreation facilities shall be identified in the capital improvement plan, the Parks Element of the Metropolitan Bakersfield 2010 General Plan or other comprehensive plans concerning parks. 8. There is a reasonable relationship between the fee's use and the type of development project on which the fee will be imposed because the fee is calculated in relationship to the number of people resid, ing in the development and the current estimated cost of developing, improving or enhancing of public parks and recreation facilities. 9. There is a reasonable relationship between the amount of the fee and the cost of parks and recreational facilities or portion thereof attributable to the residential development which the fee is imposed. 10. There is a reasonable relationship between the need for parks and recreational facilities and the type of development project on which the fee is imposed because new residential dwelling unit development creates or contributes an additional demand for developed parks and recreational facilities at the level of service (standard rate) required by the General Plan. 1 I. The requirements of Section 66001 of the Government Code have been met. 12. The requirements of Bakersfield Municipal Code Chapter 15.82 relative to the Public Works Director's Amnual report have been met. 13. Such fee as stated above is hereby approved and adopted, effective sixty (60) days upon adoption of this resolution. ................ o0o ................ G: GROUPDATADMINRPT2002 Jul 3 1 pkde', t'e~.res. WlXt -3- .ON~;UMER PRICE ]NDEXES ~' PACIFIC CITIES AND U. S. CITY AVERAGE ALL ITEMS INDEXES ~' (1982-84=100 unless otherwise noted) APRIL 2002 ALL URBAN CONSUMERS . URBAN WAGE EARNERS AND CLERICAL WORKERS PERCENT CHANGE PERCENT CHANGE Year 1 Month Year ] Mont INDEXES ending ending INDEXES ending endin MONTHLY DATA APR. MAR. APR. MAR. APR. APR. APR. MAR. APR. MAR. APR. APR 2001 2002 2002 2002 2002 2002 2001 2002 2002 2002 2002 200 U. S. City Average ............... 176.9. 178.8 179.8 1.5 1.6 0.6 173.5 174.7 175 8 1.2 1.3 0. (1967=100) .................. 529.9 535.5 538.6 - - 516.7 520.2 523 7 - Los Angeles-Riverside-Orange Co.. 176.6 181 1 182.2 2.8 3.2 0.6 169.6 173.8 174 8 2.8 3.1 0. (1967=100) .................. 521 7 535 ]. 538.4 - - 501.3 513.7 516 7 - West ............................ 180 4 184 0 185.1 2.2 2.6 0.6 175.8 179.0 180 0 2.1 2.4 0. (Dec. 1977 = 100)'. ......... 291 6 297 4 299.2 - - - 282.8 288.0 289 6 - West - A* ....................... 182 5 186 2 187.2 2.3 2.6 0.5 176.0 179.5 180.5 2.3 2.6 0. (Dec. 19'17 = 100) .......... 297 6 303 7 305.2 - 284.9 290.6 292.2 - West - B/C~*(Dec. 1996=100) ..... 110 6 112 8 113.7 1.9 2.8 0.8 110.4 112.2 112.9 1.6 2.3 0. Year' 2 Months Year 2 Mon INDEXES ending ending INDEXES ending end BI-MONTHLY DATA APR. FEB. APR. FEB. APR. APR. APR. FEB. APR. FEB. APR. A 2001 2002 2002 2002 2002 2002 2001 2002 2002 2002 2002 2 San Francisco-Oakland-San Jose ....... 189.1 191.3 193.0 1.8 2.1 0.9 184.9 186.8 188.8 1.8 2.] (1967=100) ..................... 581.3 588.0 593.3 - - 562.9 569.0 575.0 - - Seattle-Tacoma-Bremerton ............. 184.2 187.6 188.8 2.0 2.5 0.6 179.4 182.5 183.6 1.8 2.3 (1967=100) ..................... 561.7 571.9 575.4 - - 532.0 541.2 544.6 - - *Size classes: A = 1,500,000 population and over,**B/C = less than 1,500,000 population. Dash (-}= Not Available Release date May 15, 2002. The next monthly release is scheduled for June 18, 2002 and the next bi-monthly releases is schedu for July 19, 2002. For more information call (415) 975-4350. Anchorage (907) 271-2770 Los Angeles (310) 235-6884 San Diego (619) 557-6538 Seattle (206) 553- Honolulu (808) 541-2808 Portland (503) 326-2081 San Francisco (415) 975-4350 ' This card is now available on the day of release by electronic distribution. Just Go to www.bls.gov/bls/list.htm and sign u the free on-line deligery service. * For questions, please contact us at BLSinfoSF@BLS.GOV or (415) 9'15-4350. * If you no longer want to receive this mailer, simply cross out your address on the front of this card and drop it in a mailb ftp:#flp.bls.gov/pub/special.requestslsanfranciscolpacities.tx! 61171201 BAKERSFIELD PUBLIC WORKS DEPARTMENT 1501 TRUXTUN AVENUE BAKERSFIELD, CALIFORNIA 93301 (661) 326-3724 RAUL M. ROJA. S. D[REC'TOR · CITY ENGIIqlLER July 24, 2002 Building Industry Association 1415 18~ Streei, Suite 420 Bakersfield CA 93301-4~.~.2 Attention: Brian Todd Dear Mr. Todd: This letter addresses issues you raised regarding the proposed 2.8% rate increase for the Park Development Fee, which is scheduled as a hearing item on the July 31st council agenda. Essentially, you asked why there is a need for a fee increase with the recent influx of State funds. You also asked if Park Development fees have been used for the Kern River Parkway. Further, you expressed concerns that if park development fees are used for the Kern River Parkway, then why is an increase in the development fee needed with the additional state funds. All expenditures funded by Park Development fees are tracked in detail by the Recreation and Parks Department. In addition, each expenditure is tracked by zone of benefit. We have confirmed with Recreation & Parks that no Park Development fees have been used for the Kern River Parkway, which boundaries include the Kern River corridor between the levees. The 32 acre Rio Vista Park (a community park) falls outside of these Parkway boundaries and is proposed to be partially funded with Park Development Fees. These fees, as well as some of the park lands, were obligations of several developers near the site who relocated several park sites within the development zone under their control, to the Rio Vista site in order to provide a larger community park to better serve the area. In short, the State funds used for the Parkway have no relationship to the Park Development Fee. The purpose of the Park Development fee is to provide funds for neighborhood and in some cases community parks to serve new residential development. The fee was established in order to provide for basic park development and amenities for these facilities in lieu of the developer providing the actual developed park and facilities. Recent State Bond measures have provided some funds for local Recreation and Park projects; however, they are being used for enhancements beyond basic facilities and are distinct from those provided by the Park Development Fees. In addition, these are one time funds with special requirements which cannot be relied on for basic park development. G:~GROUPOAT~Dan~BIA Park Fees,doc Building Industry Association July 24, 2002 Page 2 For example, Proposition 12 funds (Park Bond Act of 2000), are comprised of numerous funding types/programs. The City received a special allocation of $2.5 Million specifically for use on the Kern River Parkway. These funds are planned for Parkway related projects such as bike path and equestrian trail enhancements as well as additional call boxes along the Parkway. Prop 12 funds also include the Per Capita Grant Program; Roberti, Z'berg, Harris Block Grant Program; and the competitive portion of the Roberti, Z 'berg, Harris program. Each of these programs has specific requirements for the types of eligible projects. The Per Capita and Roberti, Z'berg, Hards Block Grant Program funds have been earmarked for the proposed Aquatic Center and the Ice Facility. These projects are designed to address significant unmet community-wide recreation needs. This new State funding will address some of the unmet recreational needs of the community, but there is still a need to fund basic construction of local park facilities required because of new residential development. Proposition 13 funds (The Water Bond Act of 2000), also included language specifically allocating $2.5 Million in improvements for the Kern River Parkway Project, between the mouth of the Kern River Canyon and Interstate 5. The pdmary purpose of Prop 13 was to provide funds for improvements to water quality and supplies state-wide, as well as some specific river parkway enhancements. The City used funds designated by the State for the Kern River Parkway for construction of improvements to the Bellevue Weir, the extension of the Kern River bike path from Stockdale Highway to Enos Lane and construction of recharge lakes near Stockdale Highway and Buena Vista Road. Again these projects address unique unmet community needs beyond the provision of basic parks. Proposition 40 bond funds have not been allocated to the local agencies as of this date. The State has yet to provide information as to how and when these funds will be allocated. The proposed 2.8% increase represents the cost of living increase to provide sufficient resources to develop and construct park facilities required by the City's General Plan. The last fee increase was approved in January 2001. 2.8% represents the one year increase in the consumer price index as of April 2002. Therefore in summary, consistent with the Parks Element of the 2010 General Plan, the proposed increase in the Park Development fee is required to ensure sufficient funds are available to meet the parkland needs of the newly developed areas. The recent influx of State monies will go to address some of the unfunded, and unmet, needs of the community. If this letter does not address your concerns, please feel free to call me. At your convenience, we can also arrange a meeting between yourself and City staff. As a reminder, the Resolution proposing the 2.8% increase in the Park Development fee is scheduled to go before Council at its regularly scheduled meeting on July 31,2002. Very truly yours, Raul M. ~~'~-Works Director cc: City Manager's Office Recreation and Parks Department G:\GROUPDAT~Dani~BIA Park Fees.doc B A K E R S F I E L D PUBLIC WORKS DEPART~,fENT 1501 TRUXTUN AVENUE BAIGERSF~FI r), CALIFORNIA 93301 (661) 326-3724 RALrL M. ROJA.S. D[REC"TOR · CITY E~GII~.ER September 9, 2002 Brian J. Todd Building Industry Association of Kern County 1415 18th Street, Suite 420 Bakersfield CA 93301 Re: Park Development Fee Dear Mr. Todd: In response to your letter of August 22. 2002. requesticg Park Deveicoment Fee information, please refer to the attacheC memo from cu," Recreatioc and Parks Department. Please feel free to contact me at 326-3596 should you have any fur't..?er quest!ohs. Very truly yours, Raul M. Rojas Public Works Director G:\GROUPOAT~Letters~2002~.BIA Pks Quos.dec CITY OF BAKERSFIELD Recreation &Parks DATE: September 6, 2002 TO:' Georgina Lorenzi, Assistant to Public Works Director FROM:/~ ?. Ken Trone, Park Construction & Facilities Planner SUBJECT: Building Industry Association of Kern County Park Development or Improvement Fee Response The following is provided in response to.the request from the Building Industry Association of Kern County in a letter dated August 22, 2002 regarding the Park Development Fee. 1. The total amount of state park/open space/public recreational amenities funding (e.g. bond, grant, etc.) received by the city for each of the past five years. California Department of Forestry (2000) $24,000 California Integrated Waste Management (2001) $25,000 California Integrated Waste Management (2001) $25,000 2. A list of City of Bakersfield park/open space/public recreational amenity projects that received full or partial state funding in the past thee years. The $24,000 Department of Forestry funds were used to purchase and plant 15 gallon size trees at various park sites throughout the city. The $50,000 Integrated Waste Management funds were used for labor and materials necessary to provide rubberized ADA surfacing at Tevis, Stonecreek, Beale, Saunders, Windsor, Kroll, Deer Peak, Grissom, Bill Park Greens, Martin Luther King, Jr., Jastro, and Centennial playgrounds. 3. A list of all projects funded by the Park Development Fee over the past( three years. 2001-2002 Martin Luther King, Jr. Pool Heater $ 69,740 Silver Creek Pavilion Canopy $ 40,500 - Mesa Marin Sports Complex $ 600,000 2000-2001 Beale Driveway $ 23,808 Grissom Playground $ 99,700 Centennial Playground $ 69,200 Jastro Playground $ 52,111 1999-2000 Pool Repairs $ 21,000 1999-2002 Reimbursement to Developers by Agreement for Park Development of Stonecreek, Seasons, Silver Creek, and River Oaks Parks. $1,216,823 c Rebecca Jamison p:BIAre$ BU" DING INDUSTRY ASSOCIP-"ON " OF KERN COUNTY BAKERSFIELD, CA93301 PHONE (661) 633-1316 FAX (661) 633-1317 President August ??, 2002 Pat H~nncb¢~'. -- C'~.w[,: & C,,,,kc C~dij'brnia. Inc. Mr. Raul Rojas, Director Executive Vice President City of Bakersfield, Public Works Department Brian J. Todd 1501 Tmxrun Avenue First Vice President Bakersfield, California 93301 Roger Mclntosh ~l:'bu,,~it & Associates Sent bv Facsimile and U.S. Mail Second Vice President Oregc. ry Petrini Dear Mr. Rojas: Petrini Construe:ion. Inc. In order to complete our evaluation of the proposed increase in the city's Secretar?' Park Development Fee, we are in need of the following information: Calvin R. Stead. Esq. &.'ton. Perrini &Conron. LLP 1. The total amount of state parLE/open space/public recreational Treasurer amenities funding (e.g. bond, ~ant, etc.) received by the city. for John Cicerone each of the past five years; ~.l.,:,::~d,'; tTe:r Brw:o. LLC Immudia£e Past President 2. A Iisi of City. of Bakersfield parLE/open space/public recreational Da'. id T_:rner amenity.' projects that received full or partial state funding in the past D:r..'.;.d .~. T:u'~:er Homes three years; Board of Directors $fenn Davis 3. A list of all projects funded by the Park Development Fee over the S:a:.~' ,,r'.Sr,,c'kdcie past three years. x. lichael Hair. Jr. .~.,r.,;:-. ,~',,,,.,,~.,, We are in need of this information by' Friday, August 30, so that we may tbrmulate a meaningful determination of the appropriate level for the fee. K~ !e Ca:':er .;,":? C:,':e,' Ho,,:~s. h~c. Sincerely, '~"O!'gt,"~t.'..tl Homes. [nc. D re:=, Hash Fa/i.,,utrer-Rhr~des Brian J. Todd ,r.U.5'Lt~'.:.t?¢'c' A ',,eno'les Executive Vice President Marion \la!aroma ?h'vt A~te,'ica/~ T/tie Mike Kane Gram're C. nstrucrion Cc: Budget and Finance Commit-tee Alan Tandy, City Manager D:,-rr'. ! T::cker Georgina Lorenz/, Public Works Department ~[c.4[/i ;,.'er Ranch/J~tsman :~r; ',lc.: Dc' ~'['dn ~.[ikc Gr:Ln/ec ~te:~;r: T/tie' Barbich ~ngcrier moper &~g Accoun 'racy Corporation Bakersfield Centennial Garden & Convention Center Financial Statements Year Ended June 30, 2002 I I I I CONTENTS Pa~e(s) I IndependentAuditors' Report On The - ' ' Financial Statements 1 I Financial Statements I Balance sheet 2 Statement of revenue and expenses 3 Statement of changes in retained deficit 4 I Statement of cash flows 5 i Notes to Financial Statements 6 - 14 Independent Auditors' Report on the i Supplementary Information 15 Supplementary Information I Schedule of operating expenses 16 I IndependentAuditors' Report On ComplianceAnd On Internal Control Over Financial Reporting Based On An Audit Of Financial Statements Performed In I Accordance tFith Government Auditing Standards 17 I I I 'l I Barbich I gcrier oper l Act~m~[i°ll Independent Auditors' Report 1 SMG, Inc. Bakersfield Centennial Garden & Convention Center I Bakersfield, California , We have audited the'balance sheet of Bakersfield Centennial Garden & Convention Center as of June 30, 2002, and the related statements of revenue and expenses, changes in retained deficit and cash flows for the year then ended. These financial statements are the responsibility of the City's facility management company, SMG, Inc. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued bythe Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bakersfield Centennial Garden & Convention Center as of June 30, 2002, and the results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles. 5001 E. Commercenter Drive, Suite 350 · EO. Box 11171 · Bakersfield, California 93389 · Fax (661) 631-0244 · (661) 631-1171 1319 Marsh Street · San Luis Obispo, California 93401 · Fax (805) 541-4024 · (805) 541-2500 I010 South Broadway, Suite I · Santa Maria, California 93454 ° Fax (805) 349-7702 · (805) 349-7705 In accordance with Government Auditing Standards, we have also issued a report dated August 13, 2002 on our consideration of SMG, Inc.'s internal, control over financial reporting and our assessment of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Bakersfield, California August 13, 2002 I I Bakersfield Centennial Garden & Convention Center I Balance Sheet June 30, 2002 I ASSETS I Current Assets Cash $ 1,892,849 I Accounts receivable, trade 276,612 Accounts receivable, other 62,764 Prepaid expenses 74,935 I 2,307,160 i Property and Equipment, at cost 47,919 Less accumulated depreciation 32,257 15,662 I $ 2,322,822 I LIABILITIES AND RETAINED DEFICIT I Current Liabilities Accounts payable, trade $ 33,680 Accounts payable, other 229,896 I Accrued expenses 177,696 Deferred revenue · 1,626,900 Advance from City of Bakersfield 1,869,002 I 3,937,174 Commitments I Retained Deficit i Unappropriated (1,614,352) $ 2,322,822 I See Notes to Financial Statements. 1 I I I Bakersfield Centennial Garden & Convention Center I Statement of Revenue and Expenses For the Year Ended June 30, 2002 I I revenues: Net Facilities rent $ 1,597,960 Event expense reimbursements 1,000,776 I premium seats 707,669 Suite and Concession commission 537,929 Signage and advertising 414,013 I Parking 211,654 Ticketing fees 206,181 i Merchandise 62,320 4,738,502 I Direct event expenses: Event labor 1,209,712 Other direct event expenses 311,279 I Event advertising 223,552 1,744,543 I Gross profit 2,993,959 Operating expenses 3,329,659 I Operating loss (335,700) I Nonoperating income: Interest income 7,283 I Net loss $ (328,417) I See Notes to Financial statements. I I I I Bakersfield Centennial Garden & Convention Center I Statement of Changes in Retained Deficit Year Ended June 30, 2002 I Retained deficit, beginning ofyear $ (1,285,935) Net loss (328,417) Retained deficit, end of year $ (1,614,352) I See Notes to Financial Statements. 1 1 1 1 1 1 1 I I I Bakersfield Centennial Garden & Convention Center I Statement of Cash Flows For the Year Ended June 30, 2002 I i Cashflowsfrom operating activities: Operating loss $ (335,700) I Adjustments to reconcile operating loss to net cash provided by operating activities: I Depreciation 16,020 Decrease in accounts receivable 141,700 i Decrease in prepaid expenses 55,909 Decrease in accounts payable (215,595) Increase in accrued expenses 85,537 i Increase in deferred revenue 274,265 Net cash provided by operating activities 22,136 I Cash flows from investing activities: Payments for purchase of property and equipment (8,335) I Interest income 7,283 Net cash used in investing activities (1,052) I Cashflowsfromfinancing activities: Net increase in advances from the City of Bakersfield 423,187 I Net increase in cash and cash equivalents 444,271 I Cash and cash equivalents at beginning of year 1 ,448,578 Cash and cash equivalents at end of year $ 1,892,849 I i See Notes to Financial statements. I I Bakersfield Centennial Garden & Convention Center Notes to Financial Statements Note L Nature of Business and Significant Accounting Policies Nature of Business: The City of Bakersfield (the City) owns the Bakersfield Centennial Garden and (the Facilities). The Centennial Garden is an arena, built by the Convention Center City, which was completed and began operations in October 1998. It is the only building of its kind in the Bakersfield area. On August 6, 1997, the City issued a request for proposals for services prior to the opening of the Centennial Garden and the operation and management of the Facilities thereafter. In an agreement dated January 28, 1998, the City contracted with Ogden Entertainment, Inc. (Ogden) for these services for an initial period of five years. The contract term was subsequently extended for an additional five-year term and the agreement is effective through June 30, 2008. The Company worked during the January 14, 1998 through June 30, 1998 pre-opening phase and assumed management responsibilities of the Facilities on July 1, 1998. '. Ogden was hired by the City for its expertise in the management, operation and marketing of public assembly Facilities. Ogden sold its entertainment business division to ARAMARK Corporation effective- June 2, 2000. The operation of the Facility is still being conducted under Ogden's name. All contracts and leases, with the exception of the administrative services agreement with the City, are transferable to ARAMARK Corporation. The City approved the transfer of the administrative services agreement to ARAMARK Corporation. See Note 4 for terms of the administrative services agreement. On September 13, 2000, ARAMARK sold and assigned all of it's rights, obligations, liabilities and indemnities as manager of the Facilities to SMG, Inc. (the Company) for $10. All contracts and leases, with the exception of the administrative service agreement with the city, are transferable to the Company. The City has approved the transfer of the administrative services agreements to the Company. See Note 4 for terms of the administrative service agreement. I I Notes to Financial Statements I I The activity of the Facilities is recorded in a special revenue fund of the City's accounting records. The City owns all the assets of the Facilities and accordingly, all I amounts related to the operation of the Facilities to the The belong City. Company has a fiduciary responsibility under the management agreement to maintain and I operate the Facilities in the best interests of the City and the community. Fund accounting: I Enterprise Funds are used to account for operations that are: (a) are financed and operated in a manner similar to private business enterprises - where the intent of the I governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges or, (b) where the governing body has decided that I periodic determination of revenue earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purpose. I Revenue Recognition: I Suite andpremium seat contracts Revenues from suite and premium seat contracts are recognized over the contract I period per the contract terms. Contracts are billed twice a with the entire contract year amount payable prior to the contract period. The suite and premium seat payments are recorded as deferred revenue until earned and recognized over the contract period. I Signage and advertising contracts I Revenues from signage and advertising contracts are recognized over the contract period per the contract terms. Contracts are billed according to the contract terms. Payments are recorded as deferred revenue until earned and recognized over the I contract period. 1 I 'l I I Notes to Financial Statements I I Ticket sales IThe Company, its contract with sells tickets through Ticketmaster, to Facility events as an agent of the event holder at the on site box office location and through telephone, internet and outlet locations. All revenues from the sale of tickets belong to the event I holder. The ticket sales are recorded as deferred revenue when sold. After the event has occurred, settlement with the event holder takes place. The net of total ticket sales i less event expenses such as facility rent and reimbursement of direct event expenses is then paid to or received from the event holder. The event ticket revenues are removed from the deferred revenue account at the time of settlement. I The Facilities eam a ticketing fee on the sale of event tickets that take place through telephone, internet and outlet locations. Revenues are recorded as deferred revenue at I the time of sale and are recognized at the time of event settlement. Event revenues I Revenues from Facilities' events such as facilities rent, direct event expense reimbursements, concession commissions, parking and merchandise are recognized at I the time of event settlement. Basis of accounting: I The accompanying financial statements have been prepared on the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned and I expenses are recognized when incurred. Use of estimates: I The preparation of financial statements in conformity with U.S. generally accepted i accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of I revenues and expenses during the reporting period. Actual results could differ from those estimates. I Cash and cash equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash on hand I and amounts deposited with banks. i -8- I I Notes to Financial Statements I I Categories of deposit risk: I Accounting Standard Board Statement No. 3, the In accordance with the Governmental City's deposits are categorized to give an indication of the level of risk assumed by the i City at June 30, 2002. The categories are described as follows: Category 1 - Insured or collateralized with securities held by the entity or by its i agent in the entity's name Category 2 - Collateralized with securities held by the pledging financial I institution's trust department or agent in the entity's name. Category 3 - Uncollateralized. (This includes any bank balance that is I collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the entity's name). I Catego~_ Carrying Market 1 2 3 Value Value I Cash and cash equivalents $ 100,000 $ 1,792,849 $ -0- $ 1,892,849 $ 1,892,849 I 2002, carrying amount of financial institution deposits was $1,892,849 At June 30, the and the bank balance was $2,130,999 of which only $100,000 is covered by federal i depository insurance. Concentration of credit risk: I Credit is extended, in the form of accounts receivable, to customers located primarily in California. I Property and equipment: I Property and equipment are recorded at cost. Depreciation is computed using the straight line method over estimated useful lives of 3 - 5 years. 'l I Notes to Financial Statements Maintenance and repairs of property and equipment are charged to operations and major improvements are capitalized. Upon retirement, sale or other disposition of and equipment, the cost and accumulated eliminated from the property depreciation are accounts and gain or loss is included in the statement of revenues and expenses. Note 2. Deferred Revenue Deferred revenue at June 30, 2002 consists of the following: Suite contracts $ 438,000 Advertising contracts 167,675 Ticket sales, furore events 933,805 Event deposits 53,400 Ticket rebates 34,020 $ 1,626,900 Note 3. Advance From City of Bakersfield During the normal course of business, the City pays expenses that are allocated to the operation of the Facilities. These expenses include payroll and related expenses for the City employees and rent and utilities for the office space used by the Company. The amount of the advance fluctuates throughout the depending allocated year on monthly expenses and additional cash flow needs. The advance is an inter-company account that is eliminated in the consolidation for the preparation of the City's financial amount at June 30, 2002 was $1,869,002. statements. The due Note 4. Administrative Services Agreement The Company provides administrative services for the City under an original five-year agreement, which was subsequently extended for an additional five-year period. Compensation for these services is a base fee of $150,000 for the first year, paid in equal monthly installments. The base fee increases by 3% per year each year thereafter until the agreement has terminated. I I Notes to Financial Statements ! In addition to the base fee, the Company receives an incentive relative to the amount of the reduction, if any, in net operating loss for each fiscal year. The incentive is based upon the net operating income or loss after the base fee. The calculated Company receives an incentive of 1) 10% of the first $350,000 in net operating loss reduced; 2) 20% of the next $500,000 in net operating loss reduced; 3) 30% of any net operating surplus in any one fiscal year. All of the incentive calculations are based upon a projected annual net operating loss of $850,000. Beginning July 1, 2003, in addition to the above amounts, the Company will receive an incentive amount of $25,000 for every year the net operating loss is below $300,000. If the net operating surplus in any fiscal year reaches $350,000, then the incentive fee will cease. For the year ended June 30, 2002 the Company received $251,082 in management and incentive fees. The computation of the incentive fee is based upon the books and records of the Facilities maintained by the Company. The accounting records for the Facilities must be maintained in accordance with U.S. generally accepted accounting principles and industry standards. The Company is required under the agreement with the City to have an annual audit at the end of the fiscal .year. Under the management agreement with the City, the Company has the right to operate or contract with others to operate concession and catering services for the Facilities during the initial five-year term of the contract, effective through June 30, 2003. The City portion management agreement. The Company is has not extended this of the currently operating under a contract with ARAMARK to operate these services. As of the date of this report, the parties are having a new contract drawn up to make the parties desire for clear and separate obligations into two separate contracts. The Facility is entitled to receive 35% of the first $1.2 million in gross concession receipts and 40% of receipts in excess of $1.2 million and 15% of gross concession receipts to the suites. For the year ended June 30, 2002 the Facility received $686,064 in gross concession and catering receipts from the Food and Beverage division. The Facility is entitled to receive 75% of the net novelty receipts and the Company receives the remaining 25%. For the year ended June 30, 2002 the Facility received $62,200 and the Company received $18,838 in net novelty receipts from the Food and Beverage division. I I Notes to Financial Statements 1 Note 5. Commitments Company long-term contracts and leases. The has entered into various At June 30, 2002 outstanding commitments consist of the following: Ticket sales The Company has entered into a licensed user agreement with Ticketmaster to be the exclusive provider for ticket sales for any event presented by the Company at the Facilities. Under the agreement, Ticketmaster has the authority to act as an agent for the Company for ticket sales to the general public by any and all means including telephone, interact, and outlet locations. Ticketmaster earns fees from the ticket sales such as inside ticket charges, customer convenience charges, credit card charges, handling charges and ticket sales royalties. Some fees are subject to increases throughout the contract term. Ticketmaster collects these fees as tickets are sold and the net amount is remitted to the Company weekly. The initial term of the agreement is for five years and the agreement is effective through August 31, 2003. The contract automatically renews for one two-year period unless terminated in accordance with the provisions of the contract. Concert promoter The Company has entered into service a booking agreement with Nederlander- Bakersfield, Inc. as the exclusive musical concert promoter for the Facilities. Nederlander has contracted to pay a minimum annual guarantee of $120,000 in rent and reimbursement of direct event expenses through the concerts it facilities promotes at the Facilities. Nederlander is entitled to 50% of amounts in excess of the minimum annual guarantee based upon various target levels. The facilities rent and annual guarantee amounts are subject to escalation each year over the contract period based upon increases in the Consumer Price Index, but not more than 4% per year. For the year ended June 30, 2002, Nederlander paid $115,502 in facilities rent less reimbursement of direct expenses with an estimated amount of $-0- due for the excess of the minimum annual guarantee. The contract year is different than the Facilities fiscal year. Therefore, the excess of the minimum annual guarantee is allocated over two of the Facilities' fiscal years. The agreement is effective through December 31, 2003 unless terminated earlier in accordance with the provisions of the agreement. I Notes to Financial Statements I I Personnel services I Company an independent contractor's agreement with Staff Pro, The has entered into Inc. to provide personnel services for the Facilities, which include ushers, ticket takers i and security. Under the agreement, Staff Pro, Inc. receives the actual wages for personnel working at the Facilities plus a payroll overhead mark-up of 33.7% of the wage rate and a management fee of 10% of the actual wages plus overhead mark-upi i The Company guarantees $30,000 for the minimum annual management fee for the initial year. The management fee is subject to negotiation on the anniversary date of the agreement. The agreement is effective through August 1, 2002. Subsequent to i year end, the Staff Pro, Inc. agreement was extended for 60 days. The Company subsequently decided to bring these services in-house as of October 1, 2002. I Hockey lease The City has entered into a lease agreement, which has been assigned to Flying Puck, I Inc. for exclusive use of the Facilities for West Coast Hockey League (WCHL) games. Flying Puck, Inc. has agreed to pay a minimum of $160,000 per season for use of the Facilities. As of June 30, 2002, the $160,000 consists of lease fees of $5,150 per game I played plus 7.5% of ticket sales above certain levels which increase the per year, over contract term. The lease fees are subject to increase beginning in the third year of the contract and every two years thereafter based upon the Consumer Price Index I adjustments. Flying Puck, Inc. receives $5,000 for each suite leased for hockey tickets. For the year I ended June 30, 2002, Flying Puck, Inc., Inc. received $120,000 for the twenty-four suites leased. The agreement is effective through June 30, 2004 or ten days following i the date the last WCHL playoff game of 2004 is played, whichever occurs first unless terminated earlier in accordance with the provisions of the agreement. The contract has two options for renewal for terms of seven years each. Prior to the exercise of i either option, the parties shall negotiate new lease fees. 1 I I I Notes to Financial Statements 1 I Basketball lease I Company entered into a lease agreement with the Cal State University The has Bakersfield Foundation (Cal State) for exclusive use of the Facilities for Cal State : · University Bakersfield men's and women's basketball games. As of June 30, 2002, a I lease fee of $4,120 per game plus 7.5% of ticket sales above certain levels is charged for use of the Facilities. Cai State receives $2,500 for each suite leased that includes i basketball tickets. For the year ended June 30, 2002, Cal State received $56,250 for suite ticket options. Cai State exercised its option to renew the lease agreement on November 1,2001 for five years through October 31, 2006. I Arena Football lease I The Company has entered into a lease agreement with Bakersfield Arena Football, LLC (Bakersfield Blitz) for exclusive use of the Facilities for Bakersfield Blitz arena football games. Bakersfield Blitz has agreed to pay $7,500 per exhibition, regular and I playoff games for use of the Facilities. Bakersfield Blitz receives 10% of gross concession sales, excluding suite and catering sales, when actual drop count is 5,000 or more. For the year ended June 30, 2002, Bakersfield Blitz received $3,033 for concession sales. Bakersfield Blitz is also entitled to all revenue generated from advertising sales within the Arena, including: dasherboards, program sales, and temporary signage. Bakersfield Blitz is responsible for selling 100% of video I advertising for the scoreboard. The will receive 10 video Company spots to use on event day. Bakersfield Blitz is also entitled to 15% commission on all permanent signage deals within Centennial Garden. For the year ended June 30, 2002, I received $-0- for signage income. The agreement is effective Bakersfield Blitz through the last game of the 2005 Arena Football season, and shall be for all regular season professional indoor football home games each year plus playoff and tournament I games and practice time. I ! [ Barbich ngcrier [ nooper I Accretion Independent Auditors' Report on the Supplemental_ Information SMG, Inc. Bakersfield Centennial Garden & Convention Center Bakersfield, California For the year ended June 30, 2002, the accompanying information shown on page 16 is presented only for purposes of additional analysis and is not a required part of the basic financial statements. Our audit of the basic financial statements was made for the purpose of forming an opinion on those statements taken as a whole. The acCompanying,information has~ been subj4cted to the procedures applied in the audit of the basic financial statements. In our opinion, the accompanying information is fairly stated in all material respects in relation to. the basic financial statements taken as a whole. Bakersfield, California August 2002 13, I 1 5001 E. Commercenter Drive, Suite 350 · PO. Box 11171 ,, Bakersfield, California 93389 · Fax (661) 631-0244 · (661) 631-1171 1319 Marsh Street ,, San Luis Obispo, California 93401 · Fax (805) 541-4024 ° (805) 541-2500 1010 South Broadway, Suite I · Santa Ivlaria, California 93454 · Fax (805) 349-7702 · (805) 349-7705 I Bakersfield Centennial Garden & Convention Center I Schedule of Operating Expenses Year Ended June 30, 2002 I Full time staff $ 1,130,996 Utilities 773,689 Management fees 251,082 I Insurance 213,766 Equipment rental 156,306 i Supplies 150,856 Security 140,954 Hockey premium 120,000 i Part time staff 108,877 Credit card fees 53,907 Marketing 40,832 I Telephone 38,614 Travel 28,210 Professional fees 27,582 I Printing 20,321 Office supplies 18,661 Depreciation 16,020 I Repairs and maintenance 13,966 Miscellaneous 7,882 Postage 5,288 I Dues and subscriptions 3 38 Contract maintenance 2,615 Uniform 2,320 I Employment 1,988 ad fees Training 1,589 I $ 3,329,659 I O I Barbich [ ngcrier [ n_ooper Independent Auditors' Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards SMG, Inc. Bakersfield Centennial Garden & Convention Center Bakersfield, California We have audited the financial statements of Bakersfield Centennial Garden & Convention Center as of and for the year ended June 30, 2002, and have issued our report thereon dated August 13, 2002. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. , Compliance Compliance with laws, regulations, contracts and grants applicable to Bakersfield Centennial Garden & Convention Center is the responsibility of the City's facility management company, SMG, Inc. As part of our audit, we assessed the risk that noncompliance with certain provisions of laws, regulations, contracts and grants could cause the financial statements to be materially misstated. We concluded that the risk of such material misstatement was sufficiently low and that it was not necessary to perform tests of SMG, Inc.'s compliance with such provisions of laws, regulations, contracts and grants. I 1 I ii 5001 E. Commercenter Drive, Suite350 · PO. Box 11171 · Bakersfield, California 93389 · Fax (66I) 631-0244 · (661) 631-1171 I 1319 Marsh Street · San Luis Obispo, California 93401 · Fax (805) 541-4024 · (805) 541-2500 ~ 1010 South Broadway, Suite I · Santa Maria, California 93454 · Fax (805) 349-7702 · (805) 349-7705 ' Intemal Control Over Financial Reporting In planning and performing our audit, we considered SMG, Inc.'s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of management, others within the organization and the City of Bakersfield and is not intended to be and should not be used by anyone other than these specified parties. Bakersfield, California August 13, 2002 Mr. Alan D. Daniel, Deputy City Attorney CITY OF BAKERSFIELD 1501 Truxtun Avenue Bakersfi...e!d, CA 93301 Subject: Design Consultant Contract Indemnity Provision [:)ear Mr. Daniel: Between October 2001 and May 2002, a~d md~,e specifically during the "Request for Qualiffcation for Architectural Services" phase Of the Fire Station #15 project, we had several c~qcerns and 6emr~unications, including a meeting with you, regafcling consultant agreement clauses. All but one of said concerns appear to have been resolved except for the Indemnity Provision. In reference to your letter, dated 9 May 2002 (copy enclosed)', we.feel that the k~st Architecture twO lines of the Indemnity Clause re_ading: "Whether or not caused in.part by a 0,.~a~d party indemnified hereunder,-except for City's sole_active negligence or'willful sanJ0se misconduct" are most certainly not fair or beneficial to all concerned. 8akerslield s~. Luis 0b~sp0 "' VVhile we understand that the City'does not want to limit the consultant's liability to the coverage provided by the consultant's insurance, we cannot understand why, in any given case, the consultant should be 100% liable even if, for ins}anee, the consultant is only 5% at fault. Surely, the conCe, pt of cocnparative negligence would be most appropriate. Thus, and unless the City's Indemr~ity Provision is amended accordingly, BFGC cannot enter into any agreement for consulting services with the City of Bakersfield for any of your future projects. This is most regrettable especially since BFGC has enjoyed an excellent.professional relatiorchip with the City for over 50-years resulting in many significant __and successful buildings. We understand that the City is planning an addition or expansion to the City Hall and we feel it would be most unfortunate, if. we could not be considered for that project due to-unreasonable contract language. Therefore, we would appreciate a response to this letter hopefully changing requirements detrimental to qualified local firms participating in your projects. Enclosure cc: Mayor Harvey Halt Members of The City Council 5500 Ming Ave. Suite 450 frank a. ghezzi, a.i.a. Bakersfield, CA 93309-4531 principal.architect 661.836.4300 Fax 661.836.4311 w~v. blgc.com ~V~ olx'~naC~li~P ~dev Ii~V~A KER $ F ACITy O FtF I R £ & I~O L~CCl6 4.~ ~ .w~d CITY ATTORNEY Bart J. Thiltgen '-- ' -~" Robert M. Sherry !. * Alan D. D-~niel Allen M. Shaw " , ', "' · W~lter H. Pon', Jr. "~" :' - - ' ' '- "'a?? 1 " Michael G. Allford ' ' ~,i,eS,~,~,, CITY OF BAKERSFIELD ~.~' · '" Virginia Gcnnato ~-~.. ,. Andrew C. Thomson OFI;'ICE OFTHE CITY A'I'rORNEY "' '" ' 1501 TRUXTUN AVENUE -... ADMINISTRATIVE ASSISTANT BAKERSFIELD. CA 93301 ..... ' Lori A. Shepherd TELEPHONE: 661-326-3721 · ~-. FACSIMILE: 661-85.-.0.0 · May 9, 2002 Frank A. Ghezzi, A.I.A. BFGC ARCHITECTS PLANNERS, INC. 5500 Ming Avenue, Suite 450 Bakersfield, CA 93309-4631 Re: Design ConSultant Contract Indemnity Provision Dear Mr. Ghezzi: i have reviewed the proposed indemnity clause which was sent by your insurance carrier with the. City Attorney and ,we propose the City's clause may be amended to read as follows: INDEMNITY. DESIGN CONSULTANT shall indemnify, defend, and hold harmless CITY, its officers, agents and-employees against any and all liability, claims, actions, causes of action or demands whatsoever against them, arising from DESIGN CONSULTANT's neglige.n_ce, fraud, willful misconduct, criminal conduct, errors and omissions, or breaches of contract, or any of them, before administrative or judicial tribunals of any kind whatsoever, arising out of, connected with, and to the extent caused by DESIGN CONSULTANT, DESIGN CONSULTANT's employees, agents, independent contractors, companies, or subcontractors in the performance of, or in any way arising from, the terms and provisions of this Agreement, whether or not caused in part by a party indemnified hereunder, except for CITY's sole active negligence or willful misconduct. (Emphasis added) Thank you for your time in this matter. Please let us know your thoughts as we continue to attempt a resolution for future contracting purposes. Very truly yours, ~~ALAN D. D~ ADD:Isc Deputy City Attorney ~c.c_:..Ba...rt .J...Thiltgen, City Attorney The following documents pertain to the: BUDGET & FINANCE COMMITTEE meeting of Thursday, October 10, 2002 at- 4:00 PM. HANDOI~ AT OCTOBER 10, 2002 I~fEET~[-NG B A K E R S F I E L D OFFICE OF THE CITY MANAGER MEMORANDUM October In onno TO: Alan Tandy, City Manager FROM: John W. Stinson, Assistant City Manager SUBJECT: 2001-2002 Centennial Gardenand Convention Center Audit The 2001-2002 Centennial Garden and Convention Center Audit has been completed and was referred to the Budget and Finance Committee for review. The a~dit shows SMG's operation of the facility has resulted in a savings of $809,523 compared to operations prior to-the contract between Ogden and their successor SMG and the city. A spreadsheet is attached which shows annual savings over the past four years. During this time the city has saved $2,937,409. Document2 City of Bakersfield Convention Center/Arena (Centennial Garden) Revenue and Expenditures Net Reduction Profit In Net Annual (Loss) Loss 1997-98 Convention Center- City (12 mos.) -' Revenues 743,102 Expenditures (1,881,042) (1,137,940) Base Yr. 1998-99 Conventien Center (12 mos.) and Arena (gmos~). Ogden · 'Revenues ' 3;0~043 ' ' E~enditures (3,688,150) (594,107) 543,833 1999-00 ConVention Center/Arena- Ogdea Revenues 4,231,019 E×p~'nditures (4,458,642) (227,623) 910,317 20P0-0-1 Convention Center/Arena~ Ogden Revenues Expenditures . 4,0.94.,348 - . . (.455~552) (464~20~ 673~7.3~ 2001-02 Convention Center/Arena - SMB Revenues -'" 4,745,785 Expenditures · (5,074,202) (328,417) 809,523 S:~KimG\Gr~Wksht. CentGard-Rev&E~:~(LS 8/28/2002 HANDOITf AT THE OCTOBER 10, 2002 I~EETTNG BUILDING INDUSTRY ASSOCIATION OF KERN COUNTY NATIONAL .'~SSOC[ATION BAKERSFIELD, CA 93301 PHONE (661) 633-1316 FAX (661) 633-1317 President Pat Hcnneberry October 10, 2002 £'~ixtA' & Cooke Cali~brnia. Inc. Executive Vice President Brian J. Todd Budget and Finance Committee, Bakersfield City Council 1501 Truxtun Avenue First Vice President Bakersfield, California 93301 Roger .M_ fntosh ,~lc'[nr~.,.xh & Associates Dear Councilmembers Salvaggio, Hanson and Maggard: Second Vice President Gte?fy Petrini Thank you for the Opportunity to comment on the proposed increase in the Petrini Cc,nstruction, Inc. city'S Park Development Fee. Our concerns with the fee are as follow: Secretary CaMn R. Stead. Esq. 1. The state park funds received by the city are generated by state B,,rr(,n. Petrini & Conron. LLP income taxes. These taxes come from both new and existing Treasurer homebuyers. However, since the city spends these funds .l~,im Cicerone exclusively on parks in existing neighborhoods, this amounts to .'~,~,,,,,-,a.,';~ View Bravo. LLC double-taxation of new homebuyers. We request that credit for state funds received be applied to each new unit before an increase in the Immediate Past President Park Development Fee is considered or approved. David Turner D~a':'d.4. T, trner Homes 2. The proposed increase is based upon the Consumer Price Index Board or Directors (CPI). The inflationary index appropriate for such projects is the Ole:m Da:'is &,',k qfStockdale Cost of Construction Index, as reported by the Engineering News Report (ENR.com). Michael Hair. Jr. Binglc.v So,nes 3. The Park Development Fee is calculated from the average number Kvle Carter of residents per unit, as determined by the U.S. Census report. Kr/e Ca~:ter Homes, Inc. Industry trends indicate that the average number of residents per unit may have decreased since the 1990 Census, which would lead to a Ro~ Ray ' decrease in the Park Development Fee. In any case, since the 2000 Co/cma,: Homes./nc'. Census data is available, when will ~taffur)date the Park Grog Ha,h Develonment Fee? We beheve It is premature to adopt any increase F'~d/.'.,aqte/'-Rhodes ~n the tee betore tne current Census data has been applied. [ll.Xitl'Uilc'e Mari,m Malamma We respectfully request that you delay action on increasing the Park b'ir.,t American Title Development Fee .until these issues have been resolved. We look forward to working with staff in arriving at a fair and appropriate fee. Mike Kcmc (/r..itc ('.n.s'truction Sincerely, DtLrl'vI Tucker 3h '.,~//i.~ w r Ranch/Jasman [.)(' 1'('/~ ;[~IIICII! D:tvid Dm, ~howski I' ' !jcct D('~i,'4n Consttltants Executive Vice President :¥1ikc (.h'antee .%'tc'~t.rt Title - ~ HANDOUT AT THE OCTOBER 10, 2002 I~EETING. State .Farm Insurance Companies State Farm California Public Affairs September 24, 2002 900 Old River Road Bakersfield, CA 93311 Patrick J. Collins -President/CEO, KernEDC 2700 M Street, Suite 200 Bakersfield, CA 93302 .... Dew Patrick, ....... I'would like to take this oppommity to thank you for all of the work that Danielle McKinney and Darlene Fisher put in on behalf of State Farm throughout our visitation process. The PowerPoint presentation was -incredible and gave a new perspective to those that are considering the move to Bakersfield. The most exciting part of our presentations came at the end of the day when we had . ~sociates from both Costa Mesa and Westlake approach Bakersfield representatives and thank us fOr the materials that were'presented and tell us that they are looking forward to moving to. the community. Many are feeling that their lives are falling apart as they consider this move. We were able to provide the opportunity to see a lighter side; that the Bakersfield 'community has a lot to offer. Your team was instrumental in this. Not only. were they able to provide us with the-PowerPoint, but gathered, materials fi'om around the city to generate excitement and intrigue. We look forward to continuing our work with the Kern Economic Development Corporation through the transition, especially during the site visits in October, and beyond. Your team is truly outstanding. If there is ever anYthing we, or State Farm, can do to be assistance; please do not hesitate to' call. Sincerely, , - . ..-~12~ablic A~rs--Specialist' California ~an Resources Assistant Manager .'. HOME OFFICES: BLOOMINGTON, ILLINOIS 61710-0001