After a lengthy discussion last Tuesday evening, the Seminole Utilities Authority tabled a proposed agreement with Heyday Entertainment for management of the city-owned family entertainment center.

The Authority, comprised of city council members, was tasked at its April 14 regular meeting with reviewing and possibly approving the public/private partnership agreement. After about an hour of questions directed at City Manager Steve Saxon and City Attorney Brad Carter, the proposal was tabled for a future session. On Thursday, a special meeting was called for Tuesday, April 21 at 6 p.m. at the Seminole Public Library.

Under the agreement, the City of Seminole, via the Utilities Authority, will provide all startup and ongoing operating expenses including personnel costs. Per a 2023 election, funding will be provided by a one-cent sales tax and the city’s four percent hotel tax. Heyday will be reimbursed, likely on a semiannual basis, for all expenditures and will also receive a percentage of the gross revenue. The results of Tuesday’s special meeting, including any changes made to the agreement, will appear in a future edition of the Producer.

The agreement, as presented to the Authority, appears below in condensed form. No key components have been excluded.

Manager (Heyday) shall have the responsibility for the administration, operation, and management of the Facility, including building maintenance, equipment maintenance, food and beverage provisions, the hiring and training of employees and personnel, merchandise, and service.

Manager is responsible for determining appropriate staffing needed to efficiently and effectively manage the Facility. All individuals performing work for the Manager pursuant to this Agreement will be employees or agents of the Manager, and not of the Authority. All payroll costs, including wages, salaries, payroll taxes, benefits, and workers compensation premiums shall be paid exclusively from the Operating Account funded by the Seminole Utilities Authority. PROVIDED, the foregoing payroll costs shall not include any bonuses or incentives which are based upon net profit. Manager shall not be required to advance funds for any payroll or employment- related expenses.

Manager must maintain accurate records of receipts derived from the Facility and complete a daily report of all transactions and ensure funds collected are deposited daily.

Manager shall be responsible for routine and preventative maintenance of the Facility, with all costs paid from the Operating Account.

Manager shall remit payment for all utilities from the Operating Account.

Manager shall maintain accounts and records, including personnel, property and financial records, adequate to identify and account for all costs pertaining to this Agreement and such other records as may be deemed necessary by the Authority to assure proper accounting of all funds.

Manager shall negotiate, consummate, enter into, and perform such agreements and leases as the Manager deems necessary or advisable for the furnishing of food, utilities, concessions, entertainment, equipment, or repairs and other materials and services as the Manager determines are needed from time to time for the management and operation of the Facility.

All property purchased by the Authority items remain the property of the Authority but may be used by the Manager during the term of this Agreement.

In purchasing operating supplies, operating equipment, inventories and services for the Facility, Manager may enter into arrangements with affiliates or utilize its purchasing procurement services and/ or other group buying techniques involving other facilities managed by Manager or its affiliates, provided that the cost thereof shall be competitive with that which would be charged by non-affiliated third party vendors in an arms-length transaction. For any equipment or materials with a purchase price over and above the sum of $10,000, Management shall follow procurement policies of Seminole Utilities Authority and City of Seminole as outlined in Title 7. Chapter 1A-4B.

Not later than Oct. 1 before the beginning of full fiscal year for the Manager ending Dec. 31 (“Fiscal Year”), Manager shall submit to the Authority for its written approval of a proposed annual business plan and operating budget (“Annual Plan and Budget”), which shall include financial goals, objectives, estimated revenues, operating expenses and capital expenditures for the next Fiscal Year. Each Annual Plan and Budget shall be subject to the Authority’s prior written approval.

The Authority shall give its written comments and approval within sixty days after Manager delivers the Annual Plan and Budget to the Authority. The parties intend that the Annual Plan and Budget will be agreed upon by the Authority and Manager no later than the first business day of the Fiscal Year, but in the event the Authority has not approved an Annual Plan and Budget before the first business day of the Fiscal Year, Manager shall continue operating the Facility under the Annual Plan and Budget then in effect.

The Authority shall have the right to audit or review financial records of the Manager related to the operation of the Facility to ensure that expenses are properly documented, and the calculation of revenues are accurate.

Prior to the commencement of this Agreement and at all times during the term hereof, Manager agrees to maintain such insurance as will fully protect it and the Authority and their officers, agents, employees, and volunteers from incidents, accidents and claims for personal injury, bodily injury, and property damage which may arise from or in connection with the performance of the work under this Agreement.

Manager agrees to maintain the insurance coverage set forth in Exhibit B attached hereto throughout the term of this Agreement and the policies securing said insurance shall include the Authority as an insured party.

The Authority shall establish an Operating Account for the deposit of all funds received in connection with the management and operation of the Facility (the “Gross Revenues”).

No later than ninety days prior to scheduled opening, the Authority shall deposit into the Operating Account an amount sufficient to fund all start-up costs and at least three months of projected Operating Expenses (“Opening Reserve”). Upon opening, the Opening Reserve shall be recalculated monthly on a rolling three-month basis to establish the minimum balance to be maintained in the Operating Account (“Required Reserve”). Manager shall deposit all Gross Revenues, as collected by the Manager, into the Operating Account on a daily basis. Manager shall not be required to advance any funds. In the event that the amount in the Operating Account falls below the Required Reserve and the Manager reasonably projects insufficient funds to pay the operating expenses of the Facility for the next three month(s) and the Authority fails to replenish the Operating Account to the Required Reserve, the Manager and Authority shall collaborate in good faith to develop a plan for the suspension or curtailment of Facility operations until such time as there are sufficient funds in the Operating Account to fully operate the Facility in accordance with the provisions of this Agreement.

Manager understands that it will be reimbursed for all Operating Expenses from the Operating Account. Manager shall receive an Overhead Reimbursement Fee of five percent of Gross Revenues, In addition to reimbursement of Operation and Management Expenses, the Manager shall be paid a monthly management fee based on a tiered percentage of the Gross Revenues received in connection with the management and operation of the Facility during each respective month during the Term of the Agreement.

During the first twelve months of operations under this Agreement, the Management Fee shall be an amount equal to five percent of the monthly Gross Revenues each respective month. Thereafter, and beginning on the thirteenth month, the Management Fee shall be in accordance with the following schedule (expressed as a percentage of total Gross Revenues): Annual “Gross Revenue Amount Goal” $0 - $1,500,000: 0% of total $1,500,00 - $2,000,000: 5% of total $2,000,001 - $3,000,000: 10% of total $3,000,001 - $3,600,000: 12% of total $3,600,001 and over: 15% of total

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