Broward County Commission Regular Meeting
Director's Name: Mark Gale
Department: Aviation Division: Business
Information
Requested Action
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MOTION TO APPROVE Fifth Amendment to First Amended and Restated Business Technology Service Centers Concession Agreement between Broward County and Fort Lauderdale Business and Currency Services, LLC to adjust the Minimum Annual Guarantee for Contract Year seven and modify the Assigned Areas; and authorize the Mayor and Clerk to execute same.
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Why Action is Necessary
In accordance with Chapter 26.4 of the Broward County Administrative Code, Concession Agreements require Broward County Board of County Commissioners (“Board”) approval.
What Action Accomplishes
Adjusts the Minimum Annual Guarantee (“MAG”) to the First Amended and Restated Business Technology Service Centers Concession Agreement (“Agreement”) between Broward County (“County”) and Fort Lauderdale Business and Currency Services, LLC (“FLBCS”) and modifies the Assigned Areas at Broward County’s Fort Lauderdale-Hollywood International Airport (“FLL”).
Goal Related Icon(s)
☐County Commission
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Previous Action Taken
None.
Summary Explanation/Background
THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTION.
This action adjusts the MAG for Contract Year seven (i.e., April 1, 2024, through March 31, 2025) of the Agreement and modifies the Assigned Areas.
On February 27, 2018 (Item No. 65), the Board approved the Agreement for the non-exclusive right to operate a Business Technology Service Concession at FLL. The Agreement commenced on April 1, 2018, with a termination date of March 31, 2023. The Agreement required a capital expenditure of no less than $200,000.
On September 29, 2020, the County Administrator, authorized by Board action on June 16, 2020 (Item No. 68), approved the First Amendment to the Agreement to waive the monthly MAG portion of the Privilege Fee payments for the months of April 2020, May 2020, and June 2020, resulting in a total MAG waiver amount of $61,626. MAG relief was provided through the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.
On September 29, 2021, the County Administrator, authorized by Board action on June 1, 2021 (Item No. 70), approved a Second Amendment to the Agreement providing for MAG relief in the amount of $246,507 for the County’s 2021 Fiscal Year. MAG relief was partially funded by the Coronavirus Response and Relief Supplemental Appropriate Act (“CRRSA”) in the amount of $16,248 and the remaining was funded by other unrestricted FLL funds in the amount of $230,259.
On June 1, 2022, the Director of Aviation, authorized by Board action on January 25, 2022 (Item No. 64), approved the Third Amendment to the Agreement providing rent and MAG relief in the amount of $108,251. MAG relief was provided through the American Rescue Plan Act of 2021 (“ARPA”).
On March 20, 2023 (Item No. 55), the Board authorized the Fourth Amendment to the Agreement, which extended the Agreement for an additional three years through March 31, 2026, with an option for a one-year renewal.
FLBCS submitted a letter on December 26, 2023, detailing the difficulties they have faced as a result of the reduction in international flights, which has negatively affected their luggage wrap services, as well as a drop in demand for currency exchange, automated bank teller machines (“ATM”), and money transfer services. Therefore, FLBCS has requested a reduction of the MAG and percentage fees for Contract Year seven (April 1, 2024, through March 31, 2025).
The MAG for the Agreement was initially set at $175,000, which was based on FLBCS’ performance under their prior agreement with the County. The MAG adjusts annually based on FLBCS’ performance during the prior contract year; however, the Agreement does not provide for a reduction of the MAG where demand for services is decreased or eliminated completely. For Contract Year one, the luggage wrapping component of FLBCS’ business accounted for $91,709 of the percentage fees. Because the MAG is performance-based, the MAG for the second contract year was set at $246,508, which is 85% of the prior contract year’s privilege fees paid. Due to changes and eliminations of certain international destinations served by FLBCS from FLL, the demand for luggage wrapping services has diminished, making that service no longer viable. Furthermore, the ATM and Foreign Currency Exchange services have been declining as a result of more passengers shifting to cashless and contactless payment methods.
The proposed Fifth Amendment adjusts the MAG to $130,000 for Contract Year seven and modifies the Assigned Areas. The adjustment to the MAG will allow FLBCS to fulfil their privilege fee obligations and cover operational expenses. With respect to Contract Year eight (April 1, 2025 through March 31, 2026), the final year of the Agreement, the MAG will be set to the greater of 85% of Contract Year seven’s Privilege Fee payments or $130,000.
Source of Additional Information
Mark E. Gale, A.A.E., CEO/Director of Aviation Department, 954-359-6199
Fiscal Impact
Fiscal Impact/Cost Summary
FLBCS will pay to County a Privilege Fee that is the greater of the adjusted MAG for Contract Year seven ($130,000) or the percentage fee of gross revenues.