AG 2005 07 14 - Laserfiche WebLink

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Office of the County Manager Memorandum To: Board of Commissioners Mike Downs ((nO- Deputy County Manager From: CC: John Day County Manager Date: July 6, 2005 Subject: Arena and Events Center - Food & Beverage (F&B) Contract After reviewing the operations of the Cabarrus Arena and Events Center for the last three years it has become apparent that changes need to be made in how the county provides the F&B service if the county wants to make the arena successful and reduce the general fund contribution needed each year to balance the arena's operating budget. The county currently has a contract with Eurest, Inc to provide this service. The contract calls for an automatic management fee with the county paying all expenses. The current contract as designed does not provide for any incentive for the contractor to operate efficiently or provide quality service. Attached is a budget spreadsheet illustrating the operating budget of the food and beverage operation for the last three years. You will notice that the F&B service has been operating at a deficit for each of these years. In an effort to improve the service and eliminate this deficit, the staff has approached SMG to submit a proposal for them to provide the F&B service at the arena. Their proposal and a cost analysis of continuing to operate under the Eurest contract and/or operating under the SMG proposal are attached for your review. Please note that under the Eurest contract the county will continue to realize a deficit for several years where the SMG proposal begins to show a profit in the first year. In view of these figures the staff recommends that we notify Eurest of our desire to discontinue their contract and accept the proposal from SMG. G-s ~ ~ NORtH CAIIOUIIA * Cabarrus County. 65 Church Street, SE . Post Office Box 707 . Concord, NC 28026-0707 Phone: 704-920-2100 . Fax: 704-920-2820 . www.cabarruscounty.us