HomeMy WebLinkAboutCommittee of the Whole Packet for 04/03/2017
AGENDA
Committee of the Whole Meeting
6:00 PM - Monday, April 3, 2017
7th Floor, Conferencing Center, 7th Floor, City Hall – 1055 S. Grady Way
1. Puget Sound Access Agreement Amendment
a) AB - 1878 Administrative Services Department requests authorization to sign a lease
addendum that provides Puget Sound Access $40,000 in consideration for its continued
management of Carco Theatre's operations in 2017.
b) Addendum to Carco Lease
2. Sound Transit Vehicle License Fee Calculation
AB - 1878
City Council Regular Meeting - 27 Mar 2017
SUBJECT/TITLE: 3rd Addendum to Carco Lease Agreement with PSA
RECOMMENDED ACTION: Refer to Committee of the Whole
DEPARTMENT: Administrative Services Department
STAFF CONTACT: Jan Hawn, Administrative Services Administrator
EXT.: 6858
FISCAL IMPACT SUMMARY:
This proposal for additional funding in the amount of $40,000 will be paid from the Leased City Properties
Fund (Fund 108).
SUMMARY OF ACTION:
Since 2013, the City of Renton has leased Carco Theatre to Puget Sound Access (PSA), a non -profit 501c3
business. PSA produces a public channel and manages programming and rentals at Carco Theatre. PSA started
as a public access channel and originally received most of its funding from Comcast as a result of the franchise
agreements from a consortium of cities.
Prior to moving to Carco, PSA was based in Kent where it had offices and studio production facilities. PSA's
lease at its Kent location expired at the end of 2012. At that time, the City was managing Carco Theatre, but
revenues from programming and rentals were not covering the City's operating costs. When PSA's lease in
Kent expired, the City of Renton explored options and offered PSA space at Carc o Theatre with an agreement
that PSA operate the theatre.
PSA has continued to have difficulties in meeting operational expenditures. The City of Renton, in response to
these financial difficulties, decided in July 2016 to provide a lease waiver for PSA through December 31, 2018.
However, even without paying rent, PSA continues to experience financial difficulties. It should be noted that
theatres are often subsidized with other revenue in most jurisdictions, including Carco Theatre when it was
managed by Renton.
PSA has taken various actions in an attempt to address the financial issues. It has new management; they have
increased the number of clients at the theatre, cable television access, and video productions; they have made
improvements to facilities; they obtained a liquor license and made arrangements with Arts Unlimited to host
art exhibits in order to enhance revenues at the theatre. Carco Theatre bookings and revenues have
consistently grown with revenues increasing from $62,258 in 2015 to $126,162 in 2016 and are projected at
$135,587 in 2017. More recently, they have cut back hours for key staff positions, including the Executive
Director, Theatre Manager, and Media Services Manager.
The 2017 Statement of Profit and Loss for PSA reflects a shortfall of approximately $100,000 for total
operations; however, with the staff reductions, the shortfall should more likely be around $40,000, which is
the approximate shortfall for the theatre operations. Staff recommends a lease addendum providing for a
one-time contribution of $40,000 in consideration for PSA maintaining the theatre's 2017 operations through
AGENDA ITEM #1. a)
the end of the year. Staff also commits to providing the City Council an analysis prior to year -end in order to
determine the best option for providing these services in 2018 and beyond.
EXHIBITS:
A. PSA 2017 Statement of Profit and Loss Projections
STAFF RECOMMENDATION:
Authorize the administration to sign a lease addendum that provides Puget Sound Access $40,000 in consideration for its
continued management of Carco Theatre's operations in 2017.
AGENDA ITEM #1. a)
Puget Sound Access 2:48 PM
2017 Profit and Loss Projections 1212912016
Cash Basis
Carco Theater PSA PSA Channel TOTAL
Ordinary IncomeIExpense
Income
Concessions Income 10,000.00 0.00 10,000.00
Production Equipment 5,000.00 0.00 5,000.00
PSA-City Clients 0.00 72,081.51 72,081.51
PSA Production Services 0.00 58,000.00 58,000.00
Facility Rental 150,000.00 0.00 150,000.00
Media Sales 0.00 500.00 500.00
Total Earned Revenues 165,000.00 130,581.51 295,581.51
Special Events 0.00 0.00 0.00
Uncategorized Income 0.00 0.00 0.00
Total Income 165,000.00 130,581.51 295,581.51
Cost of Goods Sold
Concessions Inventory 150.00 0.00 150.00
Media Sold 0.00 6.26 6.26
Total COGS 150.00 6.26 156.26
Gross Profit 164,850.00 130,575.25 295,425.25
Expense
Bad DebtsNjrite off 1,850.00 1,505.00 3,355.00
Other Expenses 12.00 119.19 131.19
SPIP Policy 400.00 400.00 758.08
Concessions 3,500.00 0.00 3,259.39
Automobile Expense 0.00 50.00 41.10
Travel &Meetings Expense 150.00 600.00 750.00
Taxes B&O 600.00 500.00 1,100.00
Bank Service Charges 0.00 50.00 61.17
Dues &Subscriptions 188.00 1,600.00 2,282.87
Meals &Entertainment 50.00 300.00 338.70
Finance 0.00 0.00 0.00
Reconciliation Discrepancies 0.00 0.00 0.00
6,750.00 5,124.19 11,874.19
Insurance
Crime Insurance 300.00 300.00 600.00
Liability Insurance 2,300.00 2,300.00 4,600.00
Total Insurance 2,600.00 2,600.00 5,200.00
Licenses &Permits 300.00 300.00 600.00
Marketing/Public Relations
Advertising 800.00 0.00 732.54
Events 1,000.00 200.00 1,200.00
Printing/Reproduction 250.00 250.00 500.00
Marketing/Public Relations -Other 25.00 0.00 5.50
Total Marketing/Public Relations 2,075.00 450.00 2,525.00
Membership Dues 80.00 200.00 280.00
Postage
Postage,Shipping,Delivery 100.00 100.00 200.00
Postage -Other 25.00 25.00 50.00
Total Postage 125.00 125.00 250.00
Occupancy Expenses
Gas and Electric 6,435.43 715.05 7,150.48
Janitorial Service 5,254.61 0.00 5,254.61
RenULease 0.00 0.00 0.00
Telephone/InterneuServer 338.99 339.00 677.99
Total Occupancy Expenses 12,029.03 1,054.05 13,083.08
Professional Development
Travel 0.00 400.00 400.00
Staff DevelopmenuTraining 100.00 500.00 600.00
Training Resources 150.00 10.00 160.00
Total Professional Development 250.00 910.00 1,160.00
Professional Fees
Carco-Event Staff 38,000.00 0.00 38,000.00
PSA-Event Staff 0.00 39,000.00 39,000.00
IT 100.00 3,500.00 1500.00 5,100.00
Accounting 3,000.00 3,000.00 6,000.00
Legal 1,841.50 1,841.50 3,683.00
Consulting 300.00 0.00 300.00
Contract Labor
Contract Labor -Other 1,000.00 1,000.00 2,000.00
Professional Fees -Other 3,000.00 200.00 3,200.00
Total Professional Fees 47,241.50 48,541.50 1500.00 97,283.00
AGENDA ITEM #1. a)
Salaries &Related Expenses
Employee Benefits -Insurance 9,400.00 13,228.00 372.00 23,000.00
Payroll Expenses -Wages
Salary &Wages 106,928.05 104,254.30 6,473.00 217,655.35
Payroll Expenses -Wages -Other 900.00 1,000.00 1,900.00
Total Payroll Expenses -Wages 117,228.05 118,482.30 6,845.00 242,555.35
Employer Taxes &Deductions
Payroll Taxes 13,000.00 12,000.00 750.00 25,750.00
Total Salaries &Related Expenses 130,228.05 130,482.30 7,595.00 268,305.35
Supplies -General
Janitorial 430.29 17.53 447.82
Carco Tech Supplies 500.00 0.00 500.00
Building Improvement Supplies 389.17 24.81 413.98
Equipment Rental 2,000.00 50.00 2,050.00
PSA-Production Equipment/Media 0.00 1,500.00 1,500.00
Office Supplies 400.00 50.00 450.00
Supplies -General -Other 1,000.00 150.00 1,150.00
Total Supplies -General 4,719.46 1,792.34 6,511.80
Uncategorized Expenses 0.00 0.00 0.00
Total Expense 209,456.51 191,579.38 9,095.00 401,035.89
Net Ordinary Income
Other Income/Expense
Other Income
Retailer Refund 574.42 15,756.15 16,330.57
Other Income 4,545.47 4,730.46 9,275.93
Dividend Income-Securities 0.00 12.53 12.53
Total Other Income 5,119.89 20,499.14 25,619.03
Other Expense
Lease Excise Tax 1,203.75 1,203.75 2,407.50
Other 7.00 491.84 498.84
Total Other Expense 1,210.75 1,695.59 2,906.34
Net Other Income 3,909.14 18,803.55 22,712.69
Net Income -40,697.37 -42,200.58 -9,095.00 -91,992.95
Capital Development
PSA Foundation
Government 30,000.00 30,000.00
Corporate Foundation 40,000.00 40,000.00
Total PSA Foundation 70,000.00 70,000.00
AGENDA ITEM #1. a)
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DRAFT‐‐ADDENDUM “C” TO CARCO THEATRE LEASE
This Addendum C, dated April 4, 2017, is between the City of Renton (“City” or “Lessor”), and Puget
Sound Access, (“PSA” or “Lessee”) and made with respect to the Carco Theatre Lease (“Lease”), dated
January 28, 2013 and designated as LAG 13‐001.
WHEREAS, the purpose of the Lease was, in part, for PSA to manage and operate Carco Theatre,
providing the City and the community a valuable service;
WHEREAS, the parties previously amended the Lease by Addendum A, extending the lease term through
December 31, 2025;
WHEREAS, in 2016, the parties previously amended the Lease by Addendum B, assisting PSA with its
financial challenges to cover the costs of operating Carco Theatre and to pay for improvements to the
Theatre;
WHEREAS, PSA is in need of additional funding to continue to manage Carco Theatre and has agreed to
amend the terms of the Lease as consideration for such additional funding; and
WHEREAS, the City Is willing to provide additional funding to assure Carco Theatre remains open for
business with uninterrupted programing while the City contemplates how Carco Theatre will be
managed and operated in 2018 and beyond; and
NOW THEREFORE, in consideration for valuable benefits to each party, the City and PSA agree to amend
the Lease as follows:
1. Section 1.1 is amended to reflect a new lease termination date of December 31, 2017.
2. Section 1.6.1 is amended to read as follows:
This Lease shall terminate on December 31, 2017. Prior to termination of the Lease, PSA and
the City will meet and confer to discuss viable plans for the future long term operation and
management of Carco Theatre. If the parties reach agreement, this Lease may be extended or
replaced by a new lease.
3. Section 1.7 is amended to add a new Section 1.7.1 to read as follows:
PSA shall utilize Carco Theatre to continue providing public access channel services separately
contracted for with the City pursuant to Consultant Agreement CAG 16‐149.
4. Section 1.9 is amended to reflect that the City will not charge PSA any base rent, excise tax, or
revenue sharing for use of Carco Theatre in 2017. If this Lease is amended to extend beyond
2017, the parties will mutually negotiate terms for rent and other charges. Moreover, to enable
PSA to continue to provide the services required by Section 5.2, as amended herein, the City
agrees to make a one‐time payment in the amount of $20,000 to PSA within 15 days of the date
this Addendum C is fully executed and additional payments of $10,000 on or before July 31,
AGENDA ITEM #1. b)
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2017 and October 31, 2017. Each $10,000 payment is conditioned upon PSA not being in
default under this Lease and its demonstrated ability to continue performing under the Lease
without default of its obligations to the City or third parties. The City may withhold either or
both $10,000 payments if it reasonably determines that, even with such payments, PSA will be
unable to continue to operate as required by this Lease through the end of 2017. Generally, the
City expects that at the time of payment, PSA’s contractual obligations (including accounts
payable and payroll) will be current, and the current and reasonably projected revenues equal
or exceed current and projected expenditures. PSA will provide the City with all requested
documentation as contemplated by Section 5.2.1.1.
5. Section 5.2 is amended to add a new Section 5.2.1.1 to read as follows:
PSA shall continue using its best efforts to operate Carco Theatre and its business in a financially
responsible and sustainable manner. This obligation includes, but is not limited to, (a) fulfilling
its existing contractual obligations, (b) actively marketing and making the Theatre available for
additional paying customers, and (c) timely paying its liabilities. To enable the City to enforce
this section, PSA shall, upon request by the City at any time, provide the City with all requested
documentation supporting PSA’s efforts to comply with this section and sufficient financial
documentation to demonstrate its ability to continue providing services for the term of this
Lease without defaulting on its separate contracts and liabilities, including, but not limited to,
payment of its employees’ wages. Such documentation may include, but is not limited to,
monthly reconciled bank statements and monthly financial statements showing actual
expenditures and revenue.
LESSOR: City of Renton
By: ____________________________
Denis Law, Mayor
LESSEE: Puget Sound Access
By: _________________________
Jeffery D. McCord, Executive Director
Date: __________, 2017 Date: ___________, 2017
Attest:
By: ___________________________
Jason A. Seth, Clerk
Approved as to form:
By: ____________________________
Shane Moloney, City Attorney
AGENDA ITEM #1. b)
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AGENDA ITEM #1. b)