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HomeMy WebLinkAboutResolution No. 2009-73the KENAI, ALASKA CITY OF KENAI RESOLUTION NO. 2009 -73 Suggested by: Administration A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROVING A FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER WITH THE KENAI CONVENTION VISITORS BUREAU, INC. WHEREAS, the Kenai Convention Visitors Bureau, Inc. (KCVB) has managed the Kenai Visitors and Cultural Center (KVCC) since January 1, 1992; and, WHEREAS, the KCVB desires to continue to manage the KVCC and provide visitor and cultural related services for the City of Kenai; and, WHEREAS, the City is satisfied with the performance of KCVB and desires to have KCVB continue to manage the facility; and, WHEREAS, the new management agreement more clearly defines the scope of work and the responsibilities of the contractor; and, WHEREAS, the City Administration has conducted an independent analysis of the cost of managing the KVCC and providing visitor and cultural services; and, WHEREAS, the City Administration and KCVB has found $125,000 per year to be a fair and reasonable compensation for the services required; and, WHEREAS, the effective date of the new management agreement will be January 1, 2010. NOW, THEREFORE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, the City Council approves the Facilities Management Agreement for the Kenai Visitors and Cultural Center with the Kenai Convention Visitors Bureau, Inc. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA this 16th day of December, 2009. ATTEST: Carol Freas, City Clerk PAT PORTER, MAYOR KENAI, ALASKA V MEMO: TO: City Council FROM: Rick Koch DATE: December 9, 2009 I Kfi'age with a Past, Cc with a Future 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 I Telephone: 907 283 -7535 FAX: 907 283 -3014 1 111 11 1992 SUBJECT: Resolution 2009 -73, Facilities Management Agreement for the Kenai Visitors and Cultural Center The purpose of this correspondence is to recommend Council approval of the above referenced facility management agreement with the Kenai Convention Visitors Bureau, Inc. (KCVB). Administration performed a detailed analysis of a proposal submitted by the KCVB and of the 2009 KCVB Budget. The analysis is attached as a letter dated November 18, 2009. My analysis determined that a fair level of compensation to the KCVB for the management services required by the City to be in a range of $95,000 to $115,000 per year, this includes 10,000 for advertising in the Visitors Guide. After several exchanges of additional information and several meetings to define the scope of the management agreement an agreement in principal was reached defining both the scope, and level of compensation. Attached please find the form of the management agreement which includes compensation in the amount of $125,000 per year. While the compensation is slightly in excess of my analysis, there are many tasks performed by the KCVB which justify this level of compensation. The KCVB will submit quarterly reports to the administration identifying work performed in the previous quarter. Thank you for your attention in this matter. If you have any questions, please contact me at your convenience. the cite o f November 18, 2009 Ms. Natasha Ala, Executive Director Kenai Convention Visitors Bureau, Inc. 11471 Kenai Spur Highway Kenai, AK 99611 Subject: Facility Management Contract for Kenai Visitors Cultural Center Dear Ms. Ala: The purpose of this correspondence is to discuss my review of your proposal for a Facility Management Contract for the Kenai Visitors Cultural Center dated September 11, 2009, as well as provide a detailed explanation of the analysis used to determine the scope and an appropriate level of compensation. While it does appear the current level of compensation should be increased, the City proposes a substantially smaller increase than what is being proposed by the KCVB. The t f financial it in the KCVB al and supplemental i ire is vci vt imdnCi.a] detai. in ui. i�� propos.. information dated September 18, 2009, was insufficient to analyze the proposed income and expenses for services required by the City. The KCVB financial documents did not delineate between revenue /expense for services required under the proposed management contract and those that are not required under the proposed management contract. Because it is not appropriate for the City to share in revenue /expense outside the scope of the management agreement, revenue /expense for services required by the City and other KCVB activities must be separated. As a result, I used the KCV t 2009 budget document (as of 11/3/09) as the base data for my analysis. My analysis shows the estimated expense for services required by the City to be approximately $251,600, and the estimated income to be $238,400 (includes City funding of $79,000). lVi /iaye with a PM'st, £e/ with a F {t tre" 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907- 283 -7535 FAX: 907 283 -3014 The KCVB 2009 Budget does not identify separate budgets for services required by the City and for other KCVB activities (not required under management contract). I have attempted to allocate an appropriate expense to each category. The budget line items most affected by shared AikAmeIkaGly 1992 udget Category 2009 KCVB budget Est. tudget for Activities equiter➢ by City Est. Budget for Other KCVB Activities Excess Expenses in KCVB Wudget Total Income 433,739 238,356 195,383 0 Total Expense 447,589 251,589 189,525 6,475 Net Income (Loss) 13,850) 13,233) 5,858 6,475) allocation of expenses are salaries and other personnel costs. There are a few broad categories of services that are required by the City, and Other KCVB Activities. These would be as follows: Services Required by the City 1. Recreation/Visitors Guide 2. Ad sales 3. Fundraising 4. MASST Grant 5. Membership 6. Retail Sales 7. Advertising for Visitors Conventions 8, Cultural Exhibits Displays Other KCVB Actuvities (Not I "equired by City) 1, Saturday Market 2. Meetings (Rentals) 3. Art Shows 4. Charitable Gaming 5. Operation of a Museum 6. Restoration of Museum Artifacts 7. Kenai River Marathon The table below provides a summary of the attached analysis of the 2009 KCVB budget, identifying revenues and expenses for activities required by the City, other KCVB activities and excess expenses in the KCVB budget: *Some expenses shown in this category, such as 60000 Advertising may be excess expenses either in whole or in part which would increase the net income in this category and increase the loss in the Excess Expenses category. Following my analysis, t have some specific questions as to the purpose /scope of some line items in the KCVB 2009 Budget. 1 do not believe the conclusions put forth in my analysis will be significantly affected by the answers to these questions: 1. (N /A- Admissions) Budget is $0, income and expense, includes note stating "Moved to Patrons Budget In 2009 did the KCVB charge admission to the Visitors Center? If so, for what activities? 2. (40801- Saturday Market Grant Income) Budgeted income is $5,000. What grant provides this income? What organization is the grant recipient? 3. (41300- Patrons of the KVCC) Does this represent income from admissions? If so, what is admission charged for? 4. (60000 Advertising) Budgeted expense is $40,000. Using advertising expenses from the KCVB proposal I have determined there may be excess expenses budgeted (for activities required by the City) in the amount of $21,534. I am unable to determine if these the $21,534 is advertising to support the Saturday Market, An Shows, Museum, etc., or is an over estimation of the cost of advertising for activities required by the City. I have calculated advertising for city required activities to be $18,466. Do you agree with this analysis? 5. (60600 Community Relations) Budgeted expense is $4,500. What does this expense represent? 6. (60950 -Dry Cleaning) Budgeted expense is $500. What does this expense represent? 7. 61850 Membership/Dues /Subscriptions) Budgeted expense is $4,550. What does this expense represent? What are the specific memberships /dues /subscriptions? 8. (62300 Professional Fees) Budgeted expense is $1,000. What professional service(s) does this represent? In my analysis, some expense items have been allocated between "Services Required by the City and "Other KCVB Activities," The majority of these have been allocated 70% to required services and 30% to ether KCVB activities, as I estimate that is the split of staff time. One major exception is (61520) Insurance Employee Health. My analysis recognizes 70 or $7,000 of the cost of Insurance- Employee Health as was provided for in the KCVB 2008 budget as a required service. The KCVB 2009 budget has increased health insurance from 9,910 (2008) to $39,573 (2010), an increase of $29,663 or 300 The City does not require its contractors to maintain any specific level of health insurance and the 2009 budgeted expense is significantly in excess of what I believe the market cost for this item under a typical contracted management agreement. Description of In -Kind Contribution by City to KCVB (Annunai) Amount Meeting Space for KCVB Events and Rentals ($100 x 20) $2,000 Saturday Market Space ($100 x 14) $1,400 Janitorial Service (30% of total) $1,440 Office Space for KCVB (30% x 400s.f. x $1.65 x 12) 2,376 Kitchen Space for KCVB Events Rentals ($100 x 20) $2,000 Art Show Space ($1,500 x 4) $6,000 Snow Removal (30% x $2,500) 750 Buildin Utilities (30% x 24,000) $7,200 Total Estimated 1n -Kind Contribution $23,166 While appropriately not included in the KCVB budget document, 1 believe it is important to recognize and to quantify the City's contributions to supporting the KCVB's other activities not required by the City. The table below attempts to identify and quantify the City's in -kind contributions to the KCVB. In summary, my analysis shows the City presently pays the KCVB approximately $13,233 less than what it costs the KCVB to perform the services the City requires under the proposed Facilities Management Contract. Under the present agreement, the City pays the KCVB $69,000 annually, and an additional $10,000 for advertisement in the Visitors Guide, or 79,000 total. The City proposes to increase the overall level of compensation to $95,000 per year, inclusive of the Visitor Guide advertising. Please find attached a spreadsheet showing my Facilities Management Contract. I look forward to your response to the questions 1 have asked in this correspondence and a subsequent meeting with you and your executive board. Sincerely, CITY OF KENAI i c. Koch City Manager ancia analysis and an amended draft of the Notes /Remarks 1 KCVB budget shows moved to Patrons Income Reduced to 20K from 35K by KCVB. 10K Income from City Moved to Patrons Budget 1 What grant provides this income? Patrons Budget 5A509 I 1 Estimated Income from Other KCVB Activities 1 l 0O000`S 1 000 155,000.00 1 00'288`11 6,000.00 1 00'000`9 00'005`£ 00 Estimated Income from Services Required by City S 20,000.00 s00001 00 002 00'000`69 30.00 1 700.00 25,876.00I I- ill 00'055'91 35,000.001 ES 65,000.00 1 I 5,000.00 $1 00'001 300.00 00 952 822 2009 KCVI Budget 20 500.00 I 00'00£ 00'000'69 0002 700.00 I 25,876.001 5,000.00 100'0SS`9I 00000'9 35,000.00 1 1 155,000.00 00'288`11 I 1 6,000.00 1 65,000.00 00'000`5 1 1 8,000.00 00'00I I I 3,500.00 00'002 433,739.00 Income Item Description Admissions Ad Sales Rec. Guide Ad Sales Lobby LCD Screen Art Show Auction Brochure Distribution leua� {o AID suo{ss{w W 03 Donation Box Fundraising 1 sIueJ9i awoaul }ueJg 4agie{n{ Rep./rues 1 MASST Grant Income 1 AASLH Grant Income 1 Kenai River Marathon san0 dp {vagwav'J1 I Membership Programs (Bugg wool PIO aulweg I Patrons of the KVCC ;Program Income (mo45 NV) salneH I s3uU aayy/sieauay sale5 11e1a81 !Retail Sales Art (Retail sales Commission Sales I Saturday Market 1 Sponsorships 1 Vending Income awoul tsaaalull 'Sales tax Discount saad 3SNI awoaul Jew! apop 1a8png V/N 40100 1 40150 1 I V/N 1 40250 1 1 40300 1 oonnt 1 40700 1 1 40750 1 1 40800 1 40801 1 Z080t 1 40804 I 40900 1 41000 OOIIt I 00ZIV I 1 41300 1 41400 1 41500 0091v I 1 41700 1 41800 0061V I 000Zt 1 42100 1 42300 00008 I 00018 I 1 84000 m 0 An*sis of KCVO ZOL Notes /Remarks Combination of Excess Non Visitor Cultural, KPTMC is appropriate organization for lower 48 marketing for Kenai Peninsula destination marketing Moved to Patrons Budget ft 1 tsyl leyMl 1 csiip sp legMI 170% Visitors Cultural Center, 30% Other Activities 1 170% Visitors Cultural Center, 30% Other Activities ft [70% Visitors Cultural Center, 30% Other Activities ft 70% Visitors Cultural Center, 30% Other Activities ft 170% Visitors Cultural Center, 30% Other Activities J 170% Visitors Cultural Center, 30% Other Activities City supports health care as in 2008 budget, 70% Visitors Cultural Center, 30% Other Activities Estimated Excess Expenses for Services Required by City Estimated Expenses for Other KCVB Activities 21,534.00 ft 0039 Si I 00000 4,500.00 00'005' 500.00 O517TT'1 00•05t O8'TTS 05•90£'4 1 09'9Z1 08055 l 32,573.00 Estimated Expenses for Services Required by City 32,500.00 1 oo'os 3,750.001 00 "088 35700 1,620.00 1000b6'T 3,750.00 2,500.00 1 00 56T't oo rocs'£ 00059 2,000.00 $1 1 480.00 5 1 1 1,700.00 $I 00009'1 1 $1 00'005'1 1 1$ 100.00 5 1 05'009'8 1 OOOSE 1 OCt'6C'T 1 10,048.50 ()VW 1 1 16,550.00 0 1 I 1,785.00 7,000.00 2009 KCVB Budget 00 00'05 1 OO OSL'E 5 1 001zES`TZ 00'088 357.00 1 1 00'089't 00'O1,6'T 5 3,750.001 2,500.001 00 '561't 0OtzLS'£ 2,000.001 1 480.00 00 5 1 00'00L'T 00 00 009'T 1 4,500.00 1 4,000.00 00'00T 1 1 500.00 00'STL'E 1 00'005 1 1 1,706.00 00 $1 00884 5 1 00 055'91 0058L'1 5 00'9£8'1 00'£LS'6E uopaduasao wail asuadx3 COGS Retail COGS Retail Art 1 I aso: aulooiys pue 1yaiaid COGS Retail Commission Sales Advertising Rack Cards 1 Alaska Magazine- lune Visitors 1 Kenai Municipal Airport Sign 1 isoaapoi aping A.anoas0 Gordon's Travel Guide Bells Travel Guide Jauueld uoileaeA ateaS Iepl;l0 VI1V appn9 paned Ailuno9 uogeeAl Local Print Radio (Advertising Museum 1 (Bank Fees I BankFees Gaming peaay seed peril sand pdea3ueg [Board Enrichment aupoeaspue1 /'lupegg auipppngl suoyepay A}punwwo9 1 Comouters /Tech nologv suogeuopl aumeap Al() 1 Equipment Lease 1 Eoulo. Repairs /Maint. 1 ESC Expense Employer 1 FICA Exoense Employer IFUTA Expense Employer 1 MASST Grant Expense Insurance Board Liability Insurance General Liabity tflleala eaAOpdw3 eauetnsup m� 00005 1 000L5 1 001 TS 1 1 52000 1 00009 00009 1 00109 1 1 60200 u(uy 05E09 00409 00509 00909 00L09 1 00609 1 05609 00019 tl 00119 1 05119 1 09L19 1 OLR9 1 25819 1 o 0 0 Cn CD 0 m sal]IAIPV 1a %0E'JaluaJ IetnllnJ B SJO1ISA %0L 70% Visitors Cultural Center, 30% Other Activities 1 100% Other Activities 11 What Are these? Moved to Patrons Budget 1 Moved to Patrons Budget 70% Visitors Cultural Center, 30% Other Activities. What are these, how is these different from Office Supplies (62656) 70% Visitors Cultural Center, 30% Other Activities 1 Moved to Patrons Budget 1 70% Visitors Cultural Center, 30% Other Activities 1 Moved to Patrons Budget 100% Other Activities Moved to Patrons Budget 100% Other Activities, What is this? Moved to Patrons Budget sailph&V 1ag10 %OE 'laluaJ Iein1InJ 1 9 vo]IsIA %0L1 170% Visitors Cultural Center, 30% Other Activities 1100% Other Activities 70% Visitors Cultural Center, 30% Other Activities fi 70% Visitors Cultural Center, 30% Other Activities 100% Other Activities 1100% Other Activities 100% Other Activities 1100% Other Activities Moved to Patrons Budget OCES 1 01 •EOT'L VI 100'982'£ VI 100000'9 [0'001 oo'ogo1 VI 1- 600.00 Vic 1 00'0rn l 00051 4 VO 100 "005 co oon $1 DO' DOVE T $I 00't'86'6 $J 1 33,280.00 9,360.00 00 "9t9'S 00'09E'st $11 $1 00'006 500.00 500.00 10 OE 56t 2,573.901 100'006 00'00E 0009? 00'Oss'4 1,400.00 1 00090'4 350.00 I I 700.00 00•000 1 30,800.00 1 23,296.00 00'048IZ 1 0040t'EI $1 00009'! 3,800.00 $1 D0'6LZ 3,677.001 900.00 1 3,286.00 300. 100'000'9 260.00 1 100'oot 00'000'1 4,550.001 2,000.00 100 "008'5 500.00 1 15 500.00 00 "000'1 700.00 20,000.00 1 44,000.00 1 33,280.00 1 33,280.00 1 31,200.00 000ZL'8I I 00•09E'ST 1 7,600.00 1 3,800.00 1 6,500.00 1 500.00 1$ 500.00 1 ail aaAoldw3 anuemsul 1 'dwoj s,uewgioM- aaueinsul Internet /DSL 1 Interest Expense JatoldLu3 Vdl Kenai River Classic Kenai River Marathon 1 License /Fees 1 1 Oulwe9 saa j/asuaaq Meals Entertainment 1 suogdinsgn5 /san0 /dagsiagwavi wnasnW 'sgns /san0 /'gwai' Museum Collection Maintenance I Office Expense Portrait Project 1 aae1sodl (Postage Museum Oullulid 1 Printing- Museum IuawoolaAao lanpoad 1 Professional Development !Professional Dev. Museum 1 Professional Fees 1 Financial Staement Review 1 Professional Fees Museum 1 Program Expense 1 Raffle Expense 1Rec Guide Expense ('09) l olaan0 aA0naaxg Alelesi 1 Salary Dir. Membership Marketing 1Salary Dir. Programs Exhibits 1 Dir. Retail Visitors Services 1 Dir. Finance Human Resources 'ISSV 1 /;a3 Aepmies'np 1 Visitor Info Asst. Summer 1 Visitor Info Asst. Summer asuadx3 laN'1eIAl AepJnses[ luawdola /suo 12lay 3Ie1S 1Staff Training 1 Storage Museum sallddnS I IZSI9 1 1 SZ5T9 1 92519 L ZSI9 1 055L9 00919 00L19 1 1 61750 1 1 61750 1 00819 1 1 05919 1 1 61850 1 61855 1 00619 ZSZI9 1 1 62000 1 62000 OOTZ9 ODIZ9 1 1 62200 1 62300 1 62300 1 62300 1 62350 1 62400 1 62500 1 62525 1 62550 1 62550 1 62550 1 62550 1 62550 1 62550 1 62550 05529 1 1 62555 095 Z9 1 1 62575 1 62600 62650 0- 0 ul 0 a 0 sj Analysis of KCVB 200, Budget cn 0 N E N B 0 N E m 0 0 E 0 N a o c m o m =1 aa o c v W O (0 m :0 O 2 m o 0 o o N 0 0 O ✓i 04 o N VI N V O O 41 01 00 N CI 00 G N Q) CO 0 00 c O O 'O W e °O .c 0-' a 1" o c E o N o O W 9 N 0 0 a1 v v N m O G O N N .D f` N I n N W CO E° p1 v E -o a s v s v er y 0) v a E s m E E 00) v w -o E a t Q ro m cr o p E t a N v 0 (2 0 3 Q o`a z c u Y v a m G w o m m a w o 0 a c m n V v O c m y a; O -0 L 0 0 a; 0 C -c �j p0 N a L 0 O m 'O u O Y G N u Y O O m y u i Y O 0 C E �n m E N y0 !0 u E N a 00 c v m 0 N LL G m 3 0 0 E.� f0 0 u o 2 u u u E o Y Y Y W ri N m a LA to 1c. c0 an ri :-I oo 0 0 co FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER The parties to this Agreement are the City of Kenai (City), whose address is 210 Fidalgo Avenue, Kenai, Alaska 99611 and the Kenai Convention and Visitors Bureau, Inc. (KCVB), whose address is 11471 Kenai Spur Highway, Kenai, Alaska 99611. The purpose of this Agreement is to define the roles and obligations of the parties regarding the management of the Kenai Visitors and Cultural Center (Center) owned by the City and located at 11471 Kenai Spur Highway in Kenai, Alaska. The parties agree as follows: Section 1-- General The KCVB agrees to perform the services set forth in this Agreement. The KCVB agrees to perform the services under this Agreement with due diligence and care and in a good and professional manner. Section 2 Period of Performance This Agreement shall be in effect from January 1, 2010, through December 31, 2013, unless terminated earlier as specified in Sections 7- 9, below. Section 3 Scope of Services The KCVB shall manage the Center and shall, in addition, provide the following services which services shall take priority over its other activities it performs at or in relationship to the Center: 1) Specific Services A. Create, design, and produce an annual visitor's guide as well as other brochures and related sales materials designed to attract both in -state and out -of -state visitors to the City of Kenai. The City of Kenai will receive pages in the annual visitor's guide, the design of which shall be provided to the City and approved by the City Manager in advance of publication. The cost to the KCVB to provide this service regarding the annual visitor's guide is estimated to be $10,000 annually, plus the cost it incurs for design of the pages, and compensation for this service is included as part of the compensation provided for under this Agreement. B. Maintain a website designed to provide visitor information to attract both in -state and out -of -state visitors to Kenai. FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page I of 12 C. Maintain a rack card area at the Center and at the Kenai Municipal Airport. These areas are designed to allow KCVB members to display brochures for distribution to the general public. The KCVB will also produce and display materials advertising the City for inclusion in the city rack card display areas. D. Annually attend a minimum of two (2) in -state trade shows to distribute materials, answer questions, and provide a face -to -face experience with potential visitors to the City of Kenai. Examples of appropriate trade shows that would satisfy this requirement include the Great Alaska Sportsmen Show and Mat -Su Outdoorsman Show. E. Provide for advertisements in print and in online media in commercial quality publications and/or websites, such as: 1. Alaska Magazine; 2. The Milepost; 3. Kenai Peninsula Tourism Marketing Council (KPTMC) Discovery Guide; 4. Bell's Travel Guide /Alaska Mapbook; 5. Alaska Travel Industry Association (ATIA) Official State Vacation Planner; 6. Vacation Country Travel Guide; 7. ATIA Trade Show Brochure and, 8. Gordon's Travel Guide. 2) General Services A. KCVB shall target consumer groups to encourage their members to visit and lodge in the City of Kenai through the distribution of press releases. Examples of the types of groups and/or interests the KCVB shall target are: 1. Wildlife and bird viewing; 2. Kenai sport, commercial, and personal use fisheries; and, 3. Attendees of conferences and conventions to be held in Kenai. B. Promote various City special events to attract visitors to the City of Kenai. C. Encourage tour groups to spend more time in the City of Kenai for visits, meals, and /or overnight lodging. 3) Hours of Operation A. The KCVB shall provide visitor information services at the Center no less than between the hours of 10:00 AM to 6:00 PM, seven (7) days per week during the summer season of Memorial Day through Labor Day. FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 2 of 12 B. The KCVB shall provide visitor information services at the Center no less than between the hours of 9:00 AM to 5:00 PM, Tuesday through Friday, and between the hours of 11:00 AM 4:00 PM on Saturdays during the off season after Labor Day to Memorial Day. The City Manager may agree to modifications to the hours of operation. 4) Kenai Visitor and Cultural Center Displays, As time and funding allows, the KCVB will provide exhibits and displays relevant to the Kenai area, including: A. General Information about the area B. Historical and Cultural 1. Display(s) informing the viewer of the cultural history of the Kenai'tze Indians, including present day presence in the community. 2. Display(s) informing the viewer as to the past and present Russian contributions and involvement in the community. 3. Display(s) informing the viewer about the Federal and State Homestead programs and the contributions of homesteaders and pioneers in the community. C. Industry 1. Display(s) informing the viewer of the history of oil and gas industries and about the importance and contribution of the oil and gas industries to Kenai. 2.Display(s) informing the viewer of the history of commercial fishing in the Kenai and Cook Inlet and of its importance to the cultural and financial development of the area. D. Sport Fishing display(s) informing the viewer of the history and importance of sport fishing in the Kenai area and in Cook Inlet. 5) The City Collection of historical artifacts. A. By January 15 of each year of this Agreement, the KCVB shall provide the City Manager with an inventory of all items in the Center's collection and shall designate whether such items are owned by the City, the KCVB, or another person or entity. B. The KCVB may not accept either additions to the City's collection, or loans of items to the City. without the written permission of the City Manager. C. By January 15 of each year of this Agreement, the KCVB shall provide the City Manager with a list of all items in the City's collection which the KCVB considers surplus or not needed. 6) Visitor Outreach Reporting The KCVB shall provide the City Manager with a quarterly report of its activities under this Agreement containing at least the following information: A. Visitor Contacts Track the number and nature of visitor contacts to the Center. This should FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 3 of 12 include contacts made by phone, mail, and other forms of communication. B. Visitors at Center Track the number of visitors to the Center by month. C. Website Traffic Track the number of visits to the Center website by month. D. Mailings Track the number of communications mailed from the Center. E. Requests for Information Track the total number of requests for information per month. 7) Fee/Donations —The KCVB is permitted to charge fees for special events held at the Center. 8) Annual Budget Requests The KCVB shall submit any budgets requests, including any requests for additional funding for the services it is required to provide under this Agreement, by January 15 of each year for consideration in the City of Kenai fiscal year budget beginning on July 1. Budget requests should be of sufficient detail to be fully analyzed by the City and should include back -up information and an explanation of why the KCVB desires additional compensation or funding to perform services. The City is under no obligation to approve supplemental budget requests. 9) Sales of merchandise Revenues derived by the KCVB from the sales of merchandise shall be used to defray the KCVB's operating expenses in managing the Center. Section 4 Other KCVB Activities The KCVB may undertake the other following activities at the Center. These activities are subordinate to those the KCVB is required to provide under Section 3, above: 1) Leasing of the Center (or portion of the Center) for events A. The KCVB may lease the Center, or portions of it, for events such as meetings, weddings, receptions, and other gatherings. The KCVB is solely responsible for all expenses and liabilities incurred in these leasing activities. The KCVB may retain any revenues earned in these leasing activities. B. The KCVB shall use a standard lease form to be approved by the City Manager for its leasing activities. C. Commercial lessees must have a current valid State of Alaska business license and be registered for sales tax with the Kenai Peninsula Borough. 2) Saturday Market A. The KCVB may hold a Saturday Market at the Center. The KCVB is solely responsible for all expenses and liabilities incurred in this activity. The KCVB may retain any revenues earned in this activity. B. The KCVB shall use a standard vendor application form approved by the City Manager for its Saturday Market activities. FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 4 of 12 C. Saturday Market vendors must have a current valid State of Alaska business license and be registered for sales tax with the Kenai Peninsula Borough. 3) Art Exhibits /Shows A. The KCVB is authorized to hold art exhibits and /or shows at the Center. The KCVB is solely responsible for all expenses and liabilities incurred in this activity. The KCVB may retain any revenues earned in this activity. B. If any cultural exhibits /displays need to be temporarily removed to accommodate art exhibits /shows, the KCVB shall submit a written request for authorization to the City Manager. The request shall include a schedule identifying the display, when the display will be removed and replaced, and shall be made to the City Manager at least fourteen (14) days in advance of the exhibit/show. 4) Sales of merchandise exclusive to other KCVB activities are allowed at the Center and the expenses and liabilities incurred and revenues earned belong to the KCVB. 5) Any other use of the Center must be approved in advance by the City Manager. Section 5 Building Maintenance, Operation Capital Improvements 1) The City shall be responsible for maintenance of the Center, including making building repairs and maintenance, providing restroom, plumbing and electric supplies, and incurring other costs ordinarily incidental to the maintenance of a public facility (except as expressly provided herein). The City shall provide the utility service (water, sewer, electricity, heat and garbage removal) for the Center. 2) The City, its officers, employees, agents, and representatives shall be permitted to enter the Center during operating hours to examine the premises in furtherance of these obligations. The City will attempt to notify the KCVB by telephone to the Executive Director or to another designated person (as appropriate to the nature of the emergency) if the City requires emergency entry after operating hours; notwithstanding, the City has a right to enter the Mechanic's Room during all hours and without prior notice in order to perform necessary maintenance and repairs. 3) The KCVB shall take all reasonable precautions to prevent unauthorized entry by third parties into the Center, including the placing of signs or other devices intended to deter or restrict such entry. The KCVB shall develop and follow policies and procedures relating to issuing keys, handling cash and deposits, opening and closing the Center, and dealing with difficult patrons. 4) The KCVB shall not to make any alternations or renovations to the Center premises without prior written consent of the City. Approved projects will require an actual cost report to be filed with the City at completion of the project. FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 5 of 12 5) The KCVB shall keep all facilities of the Center in a clean and sanitary condition during the period of operation. 6) The City shall be responsible for providing janitorial services, snow removal and landscaping, and grounds keeping for the Center. 7) Smoking will not be allowed within the Center or within twenty (20) feet of its doors. 8) The City shall be responsible for the maintenance of any exhibits displayed on the exterior of the Center, including on the grounds. KCVB shall not place or accept outside exhibits to be displayed out of doors without the prior permission of the City. Section 6 Insurance 1) The KCVB shall maintain in good standing the insurance described in subsection 2 of this Section. Before rendering any services under this Agreement, KCVB shall furnish proof of insurance required by this Agreement in a form acceptable to the City Manager. 2) The KCVB shall maintain a Comprehensive General Liability policy with a minimum coverage of $1,000,000 per occurrence and an Employer's Liability and Worker's Compensation policy for its own employees (as required by statute). Each policy of insurance required by this Section shall provide for no less than thirty (30) days' advance written notice to the City prior to cancellation or change in insurance amount, and shall also include a waiver of subrogation against the City. The City shall be named as an additional insured on the Comprehensive General Liability policy. 3) The City shall maintain a museum contents policy with a minimum coverage of $1,600,000 for its property located at the Center. The City shall also maintain broad form property damage insurance for the structure of the Center in an amount equal to the estimated replacement cost of the facility. 4) The KCVB shall be responsible to maintain insurances on all property, goods, and materials owned by KCVB or accepted by it at the Center (other than that owned by the City). 5) All policies acquired under this Section 6 shall be written by an insurer rated "A-" or better by A.M. Best. 6) The KCVB shall promptly report all incidents of accident or injury at the Center in writing to the City Manager. 7) Each party hereto shall give to the other prompt and timely written notice of any claim made or suit instituted within its knowledge that is related to either party's performance under this Agreement. Section 7 Compensation FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 6 of 12 1) The City will pay KCVB One Hundred Twenty-Five Thousand Dollars ($125,000) per calendar year for the services provided by the KCVB under this Agreement. The City shall pay this amount in prorated monthly payments within 14 days after billing by the KCVB. Any compensation due for portions of a month for which services are provided shall also be prorated. 2) The obligation of the City to provide funding under this Agreement is subject to the availability of funds lawfully appropriated for that purpose. The termination of this Agreement due to fiscal necessity and /or non appropriation of funds by the City shall not constitute a breach or default of the City. In the event of a non appropriation of funds, the City may terminate this Agreement under Section 9, below, however termination shall not be subject to 60 days' notice. Instead, the City shall give reasonable advance notice as soon as practicable but in no case shall notice be less than ten (10) days in advance of the effective termination date. 3) Except as otherwise provided in this Agreement, the City shall not provide any additional compensation, payment, service, or other thing of value to the KCVB for its performance under this Agreement. The parties understand and agree that administrative overhead and any of its costs the KCVB may incur in the performance of its obligations under this Agreement have already been included in computation of the KCVB's fee and may not be charged separately to the City. Section 8 Termination of this Agreement for Cause If, through any cause, the KCVB shall fail to perform any of KCVB's covenants, agreements, stipulations, and /or obligations hereunder, and the KCVB has not cured the default(s) within 14 days after delivery of written notice from the City to the KCVB specifying the default(s), the City shall have the right, at its election, then, or at any time thereafter while such default(s) continue(s), to give the KCVB notice of termination of this Agreement which termination may then be of immediate effect or of a later date as may be determined by the City. All finished or unfinished documents, data compilations, studies, surveys, reports, and /or other material prepared by the KCVB under this Agreement are the property of the City and the KCVB hereby agrees to peaceably return all such items to the City by or upon the effective date of termination and as may be further instructed by the City. The KCVB shall be entitled to receive compensation in accordance with the payment provisions of Section 7, pro rata to the effective date of termination. Section 9 Termination for Convenience of the City The City may terminate this Agreement at any time by giving written notice to the KCVB of its intent to terminate this Agreement. The City shall provide the KCVB with at least 60 days' advance FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 7 of 12 notice of its election to terminate under this Section, except as set out in Section 8, above. All finished or unfinished documents, data compilations, studies, surveys, reports, and/or other material prepared by the KCVB under this Agreement are the property of the City and the KCVB hereby agrees to peaceably return all such items to the City by or upon the effective date of termination and as may be further instructed by the City. The KCVB shall be entitled to receive compensation in accordance with the payment provisions of Section 7, pro rata to the effective date of termination. hereto. Section 10 Modification/Amendment This Agreement may not be modified or amended except by a writing signed by both parties Section 11 Equal Employment Opportunity The KCVB shall operate in compliance with all federal, state, and local equal employment and civil rights laws and regulations. Section 12 Assignability The KCVB may not assign any interest in this Agreement or delegate or subcontract work or services under this Agreement without the prior written consent of the City. Section 13 Non Waiver The failure of the City to enforce a provision of this Agreement shall in no way constitute a waiver of the provisions of this Agreement or a waiver of any subsequent breach of the same or similar condition or provision of this Agreement, nor shall it in any way affect the validity of this Agreement. Any forbearance by a party in seeking a remedy for any breach by the other party shall not be deemed a waiver by the non breaching party of its rights or remedies with respect to such breach. Section 14 Permits, Laws and Taxes The KCVB shall acquire and maintain in good standing all permits, licenses, and other entitlements necessary to the performance of this Agreement. All actions taken by the KCVB under this Agreement shall comply with all applicable statutes, ordinances, rules, and regulations. The KCVB shall collect and /or pay, if applicable, any taxes pertaining to its performance under this Agreement. FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 8 of 12 Section 15 Relationship of the Parties The KCVB shall perform its obligations under this Agreement as an independent contractor of the City. This Agreement is not intended to create, and nothing herein should be construed to create, a joint venture between the City and the KCVB. Section 16 Contract Administration The Kenai City Manager, or the Manager's designee, shall be the representative for administering this Agreement on behalf of the City. The Executive Director of the KCVB shall be the representative for administering this Agreement on behalf of the KCVB. Section 17 Integration This Agreement contains the entire agreement of the parties. All prior negotiations, statements, representations, warranties, and assurances, whether oral or written, and which are in any way related to the subject of this Agreement, are merged and integrated in this Agreement. Section 18 Defense and Indemnification The KCVB shall indemnify, hold harmless, and defend the City from and against any claim of, or liability for, negligent acts, errors or omissions of the KCVB under this Agreement. KCVB shall not be required to indemnify the City for a claim of, or liability for, the independent negligence of the City. If there is a claim of, or liability for, the joint negligent error or omission of the KCVB and the independent negligence of the City, the indemnification and hold harmless obligation shall be apportioned on a comparative fault basis. "KCVB" and "City," as used in this section, includes their respective officers, employees, agents, and other legal representatives. The term "independent negligence" is negligence other than in the City's selection of KCVB as its contractor and the City's administration, monitoring, or review of the KCVB and its work under this Agreement. Section 19 Interpretation and Enforcement This Agreement is being executed by the parties following negotiations between them and both have had an equal opportunity to provide language for this Agreement. Accordingly, any rule of construction or interpretation allowing for construction or interpretation against the drafter of this Agreement shall not apply. The Agreement shall instead be construed according to the fair intent of the FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 9 of 12 language as a whole, not for or against any party. The titles of sections in this Agreement are solely for convenience of reference and shall not affect meaning, construction, or effect of this Agreement. Section 20 Understanding The KCVB acknowledges that its governing board has authorized the Director to sign this Agreement. Section 21 Severability If any section or clause of this Agreement is held invalid by a court of competent jurisdiction, or is otherwise invalid under the law, it is the intent of the parties that the remainder of this Agreement shall remain in full force and effect. Section 22 Jurisdiction, Choice of Law This Agreement shall be construed and governed by the laws of the State of Alaska. Any disputes related to this Agreement shall be litigated in the superior courts for the State of Alaska, Third Judicial District at Kenai. Section 23 Notices Any notice required to be delivered under the terms of this Agreement shall be personally delivered or mailed by prepaid first class, certified mail, to the following addresses and shall be effective upon receipt: FOR THE CITY: FOR THE KCVB: City Manager City of Kenai 210 Fidalgo Kenai, Alaska 99611 Executive Director Kenai Visitors and Convention Bureau 11471 Kenai Spur Highway Kenai, Alaska 99611 Section 24 Counterparts and Effective Date This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original but all of which taken together shall be deemed a single instrument. This Agreement shall be effective upon the later of signature by both parties or January 1, 2010. FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 10 of 12 Section 25 Survival of Representations and Warranties The representations, warranties, covenants, and agreements of the parties under this Agreement, and the remedies of either party for the breach of such representations, warranties, covenants and agreements by the other party, shall survive the execution and termination of the contract. Section 26 Financial Reporting The KCVB agrees to keep reliable accounting records and to prepare annual financial statements in accordance with generally accepted accounting principles. The City may require such financial statement to be reviewed by a certified public accountant; provided, however, that should the City require the KCVB's annual financial statement to be reviewed by a certified public accountant, the City shall pay costs of this review in excess of one thousand dollars ($1,000). The KCVB shall arrange for such review and submit for approval to the City the cost proposal from the certified public accountant prior to the work being undertaken and after which review the City may determine to proceed with the KCVB's proposal or seek other quotes for the work or elect some other review. The KCVB agrees that its accounting records shall be available for inspection by the City of Kenai upon reasonable notice. The City may request a copy of the KCVB's accounting records and the City may direct an audit of the KCVB's books and records at the City's expense. The KCVB shall provide to the City its annual budget when adopted or amended by its Board of Directors. The KCVB shall annually provide the City a copy of its federal income tax return when completed. Section 27 Board Meetings The KCVB agrees that it will hold its meetings of its Board of Directors in public and open to the public; however, the KCVB Board of Directors may move into executive session to discuss matters that public bodies may discuss in executive session as outlined in Alaska Statute 44.62.310. below. IN WITNESS WHEREOF, the parties have executed this Agreement on the date(s) shown CITY OF KENAI KENAI CONVENTION AND VISITORS BUREAU By: By: Rick Koch Natasha Ala FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page I I of 12 City Manager Executive Director DATE: DATE: ATTEST: Carol L. Freas, City Clerk STATE OF ALASKA ss. THIRD JUDICIAL DISTRICT STATE OF ALASKA ss. THIRD JUDICIAL DISTRICT Approved as to form: Krista S. Stearns City Attorney The foregoing instrument was acknowledged before me this day of 20 by RICK KOCH, City Manager for the City of Kenai. Notary Public for the State of Alaska. My Commission Expires: The foregoing instrument was acknowledged before me this day of 20_, by NATASHA ALA, Executive Director of the Kenai Convention and Visitors Bureau, Inc., an Alaska Corporation, on behalf of the corporation. Notary Public for the State of Alaska. My Commission Expires: FACILITIES MANAGEMENT AGREEMENT FOR THE KENAI VISITORS AND CULTURAL CENTER Page 12 of 12