HomeMy WebLinkAboutResolutions - 2021.08.05 - 34791MISCELLANEOUS RESOLUTION #21322 1 August 5, 2021
BY: Commissioner Kristen Nelson, Chairperson, Legislative Affairs and Government Operations Committee
IN RE: PARKS AND RECREATION COMMISSION — COVID-19 PANDEMIC ACCOUNTS RECEIVABLE
WRITE-OFF WITH FULLER OAK MANAGEMENT, LLC FOR ADDISON OAKS CONFERENCE CENTER
AND GLEN OAKS CONFERENCE CENTER AND GRILL ROOM
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS Oakland County and Fuller Oak Management, LLC entered into a 10-year contract (County
Contract #004048) for food and beverage services at Addison Oaks Conference Center and Glen Oaks
Conference Center and Grill Room (collectively "Facilities") with an effective date of January 1, 2016
("Contract"), approved by Miscellaneous Resolution #14020; and
WHEREAS during the COVID-19 Pandemic, certain prohibitions/restrictions were placed on the use of the
Facilities and food and beverage services at the Facilities; and
WHEREAS because of these prohibitions/restrictions and the decrease in revenues, Oak Management
approached the Oakland County Parks and Recreation Commission requesting forgiveness of certain fees
under the Contract; and
WHEREAS the Oakland County Parks and Recreation Commission Chairperson created a Work Group to
examine this request and, with the assistance of the Department of Corporation Counsel, drafted the
attached Contract Amendment to resolve the issue; and
WHEREAS because the attached Contract Amendment provides for forgiveness of certain fees required
by the Contract, Miscellaneous Resolution #93135 requires Oakland County Board of Commissioners
approval; and
WHEREAS the Oakland County Parks and Recreation Commission recommends the Oakland County
Board of Commissioners approve and authorize the execution (pursuant to Oakland County Purchasing
Policies and Procedures) of the attached Contract Amendment with Fuller Oak Management to provide for
debt forgiveness pursuant to Miscellaneous Resolution #93135.
NOW THEREFORE BE IT RESOLVED the Oakland County Board of Commissioners approves and
authorizes the execution (pursuant to Oakland County Purchasing Policies and Procedures) of the attached
Contract Amendment with Fuller Oak Management, LLC to provide for an accounts receivable write-off
pursuant to Miscellaneous Resolution #93135.
BE IT FURTHER RESOLVED to write off $41,932.80 in Fiscal Year 2020 for Glen Oaks Conference Center
and $55,585.35 in Fiscal Year 2020 for Addison Oaks Conference Center.
BE IT FURTHER RESOLVED to write off $52,435.79 in Fiscal Year 2021 for Glen Oaks Conference Center
and $69,507.90 in Fiscal Year 2021 for Addison Oaks Conference Center.
BE IT FURTHER RESOLVED the FY 2021 budget is amended as follows:
PARKS AND RECREATION FUND #50800
Expenses: FY2021
5060427-160044-732046 Uncollectible Accounts Receivable $ 94,369
5060417-160044-732046 Uncollectible Accounts Receivable $125,093
5060666-160666-796500 Budgeted Equity Adjustments 219 462
$-0-
Chairperson, on behalf of the Legislative Affairs and Government Operations Comme�ove the
adoption of the foregoing resolution. �
Commissioner Kristen Nelson, District #5
Chairperson, Legislative Affairs and
Government Operations Committee
LEGISLATIVE AFFAIRS AND GOVERNMENT OPERATIONS COMMITTEE VOTE:
Motion carried on a roll call vote with Kochenderfer absent.
FINANCE COMMITTEE VOTE:
Motion carried on a roll call vote with Moss voting no.
lF"1LLQ_INI�1�i.�A1N1\I �tl �i ���
OAICLAND COUNTY PARKS &
RECREATION
JULY 7� 2021
To: Chairman McGillivray and Commission Members
From: Susan M. Wells, Interim Executive Officer
Phil Castonia, Chief of Business Operations
Submitted: 06/15/2021
AGENDA ITEM NO. 13
BUSINESS OPERATIONS
Subject: Oakland Management Debt Resolution Agreement (Contract Amendment) - Approval and
Forward to BOC
INTRODUCTION AND HISTORY
The COVID-19 Pandemic has hit many businesses very hard in 2020 and 2021 may not be any better. This is
particularly the case for the Conference Centers where large indoor gatherings of people are the norm. We
have met with Oak Management and with Chairman McGillivray and Chairman Woodward to bring the debt
from FY2020 to a resolution.
As with most contracts, these Contracts include a "Force Majeure" clause." Force Majeure is a French term
that means "superior force." Force majeure clauses are written differently, but they all address circumstances
under which parties to a contract may be excused from contractual obligations. This clause comes into play
when events occur that neither party could foresee or control and that made a party's performance impossible.
Generally, force majeure events are limited to only the very most significant of events. Said another way there
is a very high standard for force majeure. The Force Majeure Clause, in the Oak Management Contract,
provides:
Notwithstanding any other term or provision of this Contract, neither Party shall be liable to the other for
any failure of performance hereunder if such failure is due to any cause beyond the reasonable control
of that Party and that Party cannot reasonably accommodate or mitigate the effects of any such cause.
Such cause shall include, without limitation, acts of God, fire, explosion, vandalism, any law, order,
regulation, direction, action, or request of the United States government or of any other government,
national emergencies, insurrections, riots, wars, strikes, lockouts, work stoppages, or other labor
difficulties. Reasonable notice shall be given to the affected Party of any such event. The Contractor is
expected, through insurance or alternative temporary or emergency service arrangements, to continue
its obligations under this Contract in the event of a reasonably anticipated, insurable business risk such
as loss of gas and electricity service, business interruption and/or any insurable casualty or loss.
With this information as a background, there can be no doubt that the COVID-19 pandemic and related
Executive Orders issued by the Governor are "force majeure" events. Specifically, Executive Order 2020-011,
effective March 17, 2020, issued a temporary prohibition on large assemblies and events of more than 50
people and closed schools. Executive Order 2020-20 closed restaurants, food courts, cafes, and other places
of public accommodations offering food and beverage for on -premises consumption from March 22, 2020 to
April 13, 2020, regardless to the number of people present. Furthermore, Executive Order 2020-21 issued a
temporary requirement to suspend all activities that were not necessary to sustain or protect life from March
24, 2020 to April 13, 2020. These types of orders continued throughout the rest of 2020, making normal
business impossible for these vendors. They adapted the best they could.
Page 2
Oak Manaaement Reouest (March 2020)
"As a trusted partner of Oakland County for over the past 40 years, we feel confident in our ability to address
the concerns and anxiety of our shared clients and your constituents. We have been a steady hand in dealing
with every issue that had been posed to us concerning this unprecedented virus shutdown, and all of our
clients have been very supportive of our handling of their concerns. We will continue to provide the answers
that will provide for the best outcomes for the people that have put their trust in our business, as we are sure
you would expect us to.
As hard as it is for the experts to stay ahead of the COVID19 Pandemic, it is as equally difficult, for a small
business, like Oak Management, to assess the outcome that this will have on our future. One advantage that
we do have is that we are in constant contact with our clients, and we are seeing trends, and having
conversations that are truly unsettling. Every decision to this point is made to get us past one week, then one
more. The dynamics of this shutdown change daily, sometimes hourly. As we are told that the apex of this
virus is weeks/months out, so is the fallout for our clients and Oak Management. The longer that this continues
the more likely there will be unfortunate results.
Areas of concern:
• This has hit us at a point when there are a smaller number of critical events (wedding), since it is early
in our season. Some of these clients have been able to move their events later this year, which is good. As we
go forward the number of critical events increases and they will be hit with less quality choices, and will tend to
cancel and seek other options. We have already seen this starting. This is where the shutdown will start to
show a great impact on revenues as we see loss of business and cancellations increase (refunding of
deposits).
• Another area of concern is the reduced numbers of guests at each event. Guests will not want, or will
not be able, to travel. Expected revenue from scheduled events will be down.
• Cancellations are ongoing, some clients will lose their jobs causing additional cancellations. This will
impact us for this year and is already showing a sign for decreased events for 2021 (like 2008).
• Parties may fall out of favor, given the concern of being in large groups due to ongoing governmental
mandates or personal requirements for social distancing. Shelter in Place has already mandated that we
cancel several months of bookings.
Given the situation described above, the outlook looks dire for 2020 and possibly 2021. We would greatly
appreciate relief of rent and utilities this year. The additional funds would allow us to rehire many of our
employees and stabilize our company for a rocky 2021."
Oak Management History
On January 1, 2016, the County and Fuller Oak Management, LLC ("Oak Management') entered into a 10-
year contract. This Contract requires Oak Management to provide and gives them the exclusive right to
provide Services at Addison Oaks Conference Center and Glen Oaks Conference Center and Grill Room
("Facilities"). These Services include all food and beverage (alcoholic and non-alcoholic) products and
services and all other products or services provided by Oak Management at the Facilities or elsewhere when
the food and beverages are prepared at the Facilities. This Contract was approved by the Board of
Commissioners in Miscellaneous Resolution #14020. Section 5 of this Contract sets forth the following
payment obligations for Oak Management.
• Flat Fee. A Flat Annual Fee for use of the Facilities. In 2016, this amount was $115,000.00;
• Equipment Fee. An Annual Equipment Fee for the use of County -owned equipment. In 2016, this
amount was $20,000.00;
• Food and Bever? Fee. An Annual Food and Beverage Fee based on annual sales according to
sales amounts--5 /o for Gross Receipts from $1,500,000.01 to $1,750,000.00;6% for Gross Receipts
from $1,750,000.01 to $2,000,000.00; and 7% for Gross Receipts over $2,000,000.00; and
• Utilities. Payment of gas, electricity and heat utilities at the Facilities and municipal water and sewer at
Glen Oaks.
The Flat Fee, Equipment Fee, and Food and Beverage Fee are due October 20'h each year covering the
previous year. Beginning on October 1, 2017, the Flat Fee and Equipment Fee have been increased by 3%,
each October 1.
Page 3
Given the current crisis Oak Management e-mailed staff on March 31, 2020 requesting relief under its
Contract.
Oak Manaaement Current Financial Situation
Addison Oaks and Glen Oaks Past Due Utilities (January 2020 — March 2021) - $88,906.25
Addison Oaks and Glen Oaks Past Due Flat Fee (Fiscal Year 2020) - $125,663.61
Addison Oaks and Glen Oaks Past Due Equipment Fee (Fiscal Year 2020) - $21,854.54
Grand Total through March 31, 2021 - $236,424.40
Addison Oaks and Glen Oaks Estimated Utilities (April 2021 — June 2021) - $12,500.00
Addison Oaks and Glen Oaks Upcoming Flat Fee (Fiscal Year 2021) - $129,433.51
Addison Oaks and Glen Oaks Upcoming Equipment Fee (Fiscal Year 2021) - $22,510.18
Fiscal Year 2021 Fees Due in October: $161,943.69
Loan/Grant Name Applied for Year
Amount Received
Paycheck Protection Program (PPP) 2020
$276,761
Paycheck Protection Program (PPP) 2021
$381,920
Sales Data Year
Revenue
Addison Oaks FY19
$1,678,142.56
Glen Oaks FY19
$1,470,742.18
TOTAL FY19
$3,148,884.74
Addison Oaks FY20
$843,924.08
Glen Oaks FY19
$671,909.55
TOTAL FY20
$1,515,833.63*
*90% of this revenue was captured prior to the
Pandemic.
Addison Oaks FY21
$691,899.01
Glen Oaks FY21
$508,618.01
TOTAL FY21
$1,200,517.02**
**Estimated revenue provided by Oak Management
Neootiated Resolution
To resolve the current outstanding debt of Fuller Oak Management LLC the following resolution contained in a
Contract amendment is proposed:
Fuller Oak Management Shall:
• Pay past due Utility Reimbursements (January 2020 — March 2021), in full, $88,906.25 on the
date the Contract amendment is fully executed. Including the April — June 2021 amount which
will be available by this time.
• Move utilities into Oak Management's name moving forward.
Page 4
• A one-time payment $50,000.00 toward the FY2020 past due amount of $147,518.15 in Flat
Fees and Equipment Fees on the date the Contract amendment is fully executed. (34% of the
total)
• A one-time payment $30,000.00 toward the FY2021 Flat Fees and Equipment of Fees amount
of $151,943.69 by October 15, 2021. (20% of the total)
ATTACHMENTS
Contract Amendment
BOC Resolution
STAFF RECOMMENDATION
Staff recommends approval of the attached Contract Amendment with Fuller Oak Management LLC and forward
to the Oakland County Board of Commissioners for approval and debt forgiveness.
MOTION
Move to approve the attached Contract Amendment with Fuller Oak Management LLC and forward to the
Oakland County Board of Commissioners for approval and debt forgiveness.
�i
COAKLANDF
C_O_UNTY MICHIGAN
PURCHASING
(Department)
OAKLAND COUNTY EXECUTIVE DAVID COULTER
Purchasing
(248) 858-0511 1 purchasing@oakgov.com
AMENDMENT OF CONTRACT [Contract Number]
AMENDMENT [Change Order Numbers
AMENDMENT DATE: July 9, 2021
Buyer
This AMENDMENT OF CONTRACT (hereafter this "Amendment") is made and entered into by and between
the Contractor named and identified below, (hereafter "Contractor") and the COUNTY OF OAKLAND
(hereafter "County") whose address is 2100 Pontiac Lake Rd, Waterford, MI 48328.
CONTRACTOR
Vendor]
Vendor Number: [Vendor Number]
ADDRESS
The County and Contractor agree and acknowledge the purpose of this Amendment is to modify, as
provided herein, and otherwise continue the present contractual relationship between the Parties as
described in their current contract with the same contract number as above.
In consideration of the extension of the mutual promises, representations, assurances, agreements, and
provisions in the Contract and this Amendment, the adequacy of which is acknowledged by the Parties, the
County and Contractor agree to amend the Contract as follows:
1. Section 5.6 of the Contract is deleted entirely.
2. Section 8.3.5 of Exhibit II is deleted and replaced with the following language: "Bills for the utilities (the
provision of gas, heat, and electricity at all Facilities and municipal water and municipal sewer at the
Glen Oaks Conference Center (including the Grill Rooms and Pro -Shops at Glen Oaks Conference
Center, but excluding the Golf Course)) shall be transferred to and placed in Contractor's name upon
execution of this Amendment. Contractor shall pay for the utilities listed in the previous sentence
when due. Until the utilities are transferred to and placed in Contractor's name, Contractor shall
reimburse OCPRC for all aforementioned utilities. OCPRC shall be responsible for the costs of
operation, maintenance, repair, and replacement of any septic systems, wells, or water filtration
systems located at the Facilities."
3. Contractor shall pay all past due utility payments, in the amount of eighty-eight thousand, nine
hundred six dollars and twenty-five cents ($88,906.25), for January 2020— March 2021 on the date the
Contract amendment Is fully executed. Contractor shall pay the quarterly utilities for April 2021—June
2021 on the date the Contract amendment is fully executed.
4. For Fiscal Year 2020 only, the Equipment Fee and Flat Fee required by Sections 5.2 and 5.3 of the
Contract are amended and changed to a collective total of fifty thousand dollars ($50,000.00). This
amount is due and payable to OCPRC on the date the Contract amendment is fully executed.
AMENDMENT OF CONTRACT [Contract Number]
Page 1 Rev 2020/09/16
COAKLANIPP
CO U NTY M I C H I G AN
OAKLAND COUNTY EXECUTIVE DAVID COULTER
PURCHASINC, Purchasing
(248) 858-0511 1 purchasing@oakgov.com
5. For Fiscal Year 2021 only, the Equipment Fee and Flat Fee required by Sections 5.2 and 5.3 of the
Contract are amended and changed to a collective total of thirty thousand dollars ($30,000.00). This
amount is due and payable to OCPRC on October 15, 2021.
6. Any and all defined words or phrases in the Contract between the Parties will apply equally to and
throughout the Amendment.
Any and all other terms and conditions set forth in the Contract between the Parties shall remain in full
force and effect and shall not be modified, excepted, diminished, altered, or otherwise changed by this
Amendment, except as otherwise expressly provided herein.
The undersigned execute this Amendment on behalf of the County and Contractor and by doing so legally
obligate and bind the County and Contractor to the terms and conditions of the Contract and this
Amendment.
THE CONTRACTOR:
THE COUNTY OF OAKLAND:
xxx
SIGN / DATE:
[Vendor]
SIGN / DATE:
Scott N. Guzzy, CPPO, MBA, Purchasing Administrator
AMENDMENT OF CONTRACT [Contract Number
Page 2 Rev 2020/09/16
Resolution #21322
Moved by Nelson seconded by Gingell the resolution be adopted.
AYES: Markham, McGillivray, Miller, Moss, Nelson, Powell, Spisz,
Charles, Gershenson, Gingell, Jackson, Kochenderfer, Kowall, Kuhn,
NAYS: None. (0)
A sufficient majority having voted in favor, the resolution was adopted.
August 5,2021
Weipert, Woodward, Cavell,
Long, Luebs. (19)
a,,, Q ,
1 HEREBY APPROVE THIS RESOLUTION
CHIEF DEPUTY COUNTY EXECUTIVE
ACTING PURSUANT TO MCL 45.559A (7)
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and
accurate copy of a resolution adopted by the Oakland County Board of Commissioners on August 5, 2021,
with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the Circuit Court at Pontiac,
Michigan this 51^ day of August, 2021.
Lisa Brown, Oakland County