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HomeMy WebLinkAboutCity Council Committees - Operations - 11/15/2011 ENT WASH IN O T O N OPERATIONS COMMITTEE MINUTES November 15, 2011 Committee Members Present: Elizabeth Albertson, Debbie Raplee, Chair, Les Thomas The meeting was called to order by D Raplee at 4:39 p.m. Committee Chair D. Raplee introduced Councilmember Elizabeth Albertson as a new Committee member. D. Raplee advised that Item 5 has been moved to Item 3. 1. APPROVAL OF MINUTES DATED NOVEMBER 1, 2011. L. Thomas moved to approve the Operations Committee minutes dated November 1, 2011. E. Albertson seconded the motion, which passed 3-0. 2. APPROVAL OF VOUCHERS DATED OCTOBER 31, 2011. E. Albertson moved to approve the vouchers dated October 31, 2011. L. Thomas seconded the motion, which passed 3-0. 3. MERCHANT INVESTMENTS (NIZAR ALIMOHAMED) APPEAL OF FINANCE DIRECTOR'S DECISION. (MOVED FROM ITEM 5) Mr. Nizar Alimohamed, Project Manager, Merchant Investments dba Global Venture, 7412 S. 262nd Street, Kent, WA 98032. Mr. Alimohamed provided a photo (attached) and also referenced the attached letter he sent to the City of Kent explaining his water bill concerns (due to a water leak) and to request an appeal of Finance Director, Bob Nachlinger's decision to not grant a leak adjustment. Mr. Alimohamed stated that he understands the decision was based on Kent City Code Section 7,02/300 C.2. which specifies: "This rate adjustment is permitted on a one (1) time basis only and can be applied to only (1) billing period. To be eligible for this rate adjustment, the affected water system must be owned by or subject to the exclusive control of the customer and be located between the city's water meter and the owner's residence or structure." Mr. Alimohamed agrees that his situation does not meet the requirements as stated in the City Code since it was found that the leak was in one of the sprinklers located in the landscaped area behind the building. Mr. Alimohamed is asking for reconsideration based on the following two points; 1) After receiving his 08/31/11 bill for $3043.05, he immediately took action by contacting the City of Kent Utility billing and contacting his landscaping company to come out and inspect for a leak. Once the leak was found, he had the water cut off to the sprinkler system. He does not understand why he received a courtesy letter from the city two weeks after receiving his bill, he feels he should have been notified right away of a possible leak, even before receiving the bill. 2) He has talked to two other companies that stated they have received courtesy/compensation for utility billing. He is asking for courtesy. Nachlinger explained his decision based on City Ordinance. Committee members stated while they understand Mr. Alimohamed's situation, someone has to pay for the water used and if not him, the residents of Kent would have to bear the responsibility. Committee feels they need to stick to the letter of the law, the Ordinance does not allow for an adjustment in this case. Committee members discussed the possibility of making adjustments to the Ordinance for future situations, although those changes will not apply in this situation. City Attorney, Tom Brubaker explained that previous Council has enacted this Ordinance, the language of the Ordinance is very clear and requires that the leak occur between the structure and the meter, that is not where this leak occurred. The committee agreed that they need to follow the wording of the Ordinance and therefore cannot provide any relief to Mr. Alimohamed. Mr. Alimohamed thanked the Committee for listening and withdrew his appeal. The Committee further discussed with Nachlinger how unusually high water usage readings could be better and more quickly communicated to customers in the future. No motion was required by Committee since Mr. Alimohamed withdrew his appeal. 4. MOVE TO RECOMMEND COUNCIL AUTHORIZE THE MAYOR TO SIGN THE FIRST AMENDMENT TO THE LICENSE AGREEMENT BETWEEN THE CITY OF (CENT AND THUNDERBIRD HOCKEY ENTERPRISE, LLC. Operations Committee Minutes November 15, 2011 Page: 2 Economic and Community Development Director Ben Wolters advised that the fundamental purpose of this amendment is to help put the ShoWare Center on sounder financial footing by making some needed changes to how the agreement had the City charge for and make revenue on suite sales. Wolters noted that the Seattle Thunderbirds would be the sole contractor for the sale of suite licenses for hockey games only and SMG, as the City's agent, would sell suites on an individual basis for all non-hockey events. After accounting for any commission due, the Seattle Thunderbirds would receive 60 percent and the City would receive 40% of the net proceeds of the sale of suites for hockey games. After accounting for Thunderbirds' commission, if any, the City would retain 100 percent of the net proceeds from the sale of suites for non-hockey events. Club Seats would be reduced to $975.00 per seat on a Season Ticket basis. The City would receive the first $75.00 on each ticket sold on a Season Ticket basis, and the remaining $900 would be split with Thirty Percent (30% or $270) to the City, and Seventy Percent (70% or $630) to the Thunderbirds. Wolters referred to Exhibit D. the Minimum Regular Seat Revenues (page 16 of the packet). Wolters stated that these proposed changes are recommended by both the City and SMG, our operator. The City believes this creates an opportunity to rebuild the revenue out of suite sales. E. Albertson questioned if the basic change is that SMG will now be selling suites, Wolters replied yes, that is the basic change. D. Raplee asked for verification of the City/Thunderbirds split. Wolters verified it is a 40/60 City split, 40% to the City, 60% to the Thunderbirds, for hockey only. For non-hockey events, 100% to the City. L. Thomas moved to recommend Council authorize the Mayor to sign the first amendment to the License Agreement between the City of Kent and Thunderbird Hockey Enterprise, LLC. E. Albertson seconded the motion, which passed 3-0. S. MOVE TO RECOMMEND APPROVAL OF THE AMENDMENT TO THE KENT EVENT CENTER SALES, MARKETING, AND OPERATIONAL MANAGEMENT SERVICES AGREEMENT. Economic and Community Development Director Ben Wolters advised that this is the second amendment being proposed to put ShoWare Center on sounder financial footing. This new agreement with SMG, the current building operator, takes in to account the new economic realities. This agreement has the following terms; in return for a 3 year extension of SMG's operation of the facility, they have agreed to a $120k annual reduction in their fee to $130k annually. In addition, we are reducing the possible incentive they were to earn. It was up to almost $20k this year, that would be cut in half to $10k, that incentive would be tied to SMG bringing in shows. In addition, this amendment allows the City to repay its current outstanding loan with SMG. That loan has a current balance of $400k; this is a no interest loan that SMG provided us to pay for equipment, furniture, and fixtures related to the kitchen/catering. We would be able to repay that at $100k per year, in years 1 & 2 of this extension. We would have a balloon payment of $200k in year 3 to pay off the loan. E. Albertson moved to recommend approval of the amendment to the Kent Event Center Sales, Marketing, and Operational Management Services Agreement_. L. Thomas seconded the motion, which passed 3-0. Th eeting was adjourned at 5:31 p.m. by D. Raplee. ancy Cla Operation ommittee,,, ecretary I