Mayor’s Deal on Overture (Updated)

Well, here’s the latest info . . . .just hours before the 7:00 meeting tonight.

The cliff note version from the Mayor’s press release is this:

Employment: Custodial and maintenance employees will remain city employees, and 201 State will pay the city for these services. All other employees will be offered a job with 201 State by January 1, 2012 at their current salaries. 201 State will recognize labor unions currently at Overture and will bargain with those unions on future terms and conditions of employment. Employment changes will take place on July 1, 2012. Until then, all current employment agreements will stay in place.

Maintenance: The City and 201 State agree to a roughly 50-50 split of long-term maintenance over the next 15 years.

Performance Standards: 201 State must meet and report on several financial and programming performance standards annually, including ensuring educational outreach, number of performances and other measures detailed in the agreement.

Governance: 201 State will be governed by a 21-member board with a five member executive committee. The city will have three appointments to the board and one to the executive committee. In addition, 201 State must create a community-based advisory committee that will advise 201 State on programming diversity, community engagement activities and how to spend 201 State funds dedicated to community activities. The city will appoint half the members of the committee. In addition, the existing resident company advisory board will continue.

A TWENTY-ONE MEMBER BOARD . . . great idea. I wonder what other gems will be in the 12 page term sheet? Or the city attorney’s memo on legal issues on employment.

If you read it all faster than I do, shoot me an email with your impressions.

Here’s some of my impressions/notable items:
1. This is only a 5 year agreement, so we could be back in 5 years.
2. The agreement doesn’t go into effect until July 1, 2012.
3. City takes ownership July 1, 2011.
4. 201 will make an offer of employment, to be effective 07/01/12, to all permanent (full and part-time) employees (represented and non-represented) of the City working at the Overture Center as of 09/01/11.
5. Wage rates for current employees transferring from the City shall be at a level not less than the level in effect on 01/01/11.
6. 201 will be paying us $498,400 in rent starting 7/12 and $818,801 for maintenance.
7. Union employees have bumping rights and the City will work with non-represented City employees who wish to remain City employees to determine if suitable positions are available at the City for application by the employee(s). They have until March 2012 to find a position or bump.
8. IATSE and AFSCME 60 will be recognized by 201.
9. Employee benefits and liabilities are transferred to 201.
10. 201 can re-negotiate contracts with the resident groups.
11. 201 will address the housing of the Klais organ with the owner of the organ.
12. The city will get regular financial reports.
13. They have a schedule for who pays for what that is supposed to be attached but isn’t.
14. Should either party, at the time a system or any part thereof and/or any materials requires replacement, determine to replace the system with a different but reasonably comparable system or materials (e.g., replacement of travertine tile floors with granite floors), the other party shall be notified. The other party may provide for replacement with a system or materials of greater expense that also is a reasonably comparable system and shall be responsible for the incremental cost thereof.
15. In the event there is a dispute regarding maintenance, repairs or capital improvements, the dispute shall be resolved through a dispute resolution process. Each party shall select one engineer or architect and, in turn, those professionals shall select a third architect or engineer, and the panel of those three (3) persons shall hear, consider and decide the resolution of such dispute.
16. 201 will seek comment and input from its advisory committees and the public prior to adopting its annual budget.
17. 201 will prepare an annual “Report to the Community” within 90 days of the close of the fiscal year, and will invite the public to a meeting on the report, encouraging community input.
18. 201 will prepare and submit to the City no later than December 1, 2011, a strategic plan, which will be updated and submitted at least every three (3) years.
19. 201 will submit to the City an annual plan with objectives with respect to fund-raising, paid attendance, non-paid or reduced price attendance, seats sold, and the other performance standards. In 201’s annual report to the Community, 201 will compare actual results to determine if they materially differ from the plan. 201 will share with the City the causes of failure to meet the objectives, and provide strategies to meet objectives in the future. The City may declare a default in the event of the repeated failure to meet the objectives, subject to the right of 201 to cure such default within one year.
20. Upon reasonable notice, the City may inspect any records of 201 related to the operation of Overture, and may, at the City’s expense, conduct an operational or performance audit of 201.
21. The parties agree no jury trial if they go to court.

This makes me nervous:

Meetings of the 201 Board of Directors will be open to attendance by the public unless otherwise determined by 201. The Board may establish in its bylaws the method and circumstances for holding meetings that are not open to the public. Nothing herein is intended to subject 201 to any open meetings law.

Also, this might be a mistake or I misunderstood something . . .

The initial subsidy shall be One Million Four Hundred Ten Thousand Dollars ($1,410,000) plus an amount equal to the rent provided in Paragraph 3, above, for calendar year 2012.

What if this doesn’t work out?

In the event either party defaults in its obligations under this Agreement, the other party may give a notice of default. The defaulting party shall have the right to remedy the default. The remedy and cure period shall be defined to be a specific period that is related to the nature of the default. By way of illustration and not limitation, failure to provide insurance coverage must be cured within 10 days; failure to provide a copy of an audit shall be cured within 45 days. If not remedied within that time, the other party may pursue any and all legal remedies, including termination of this Agreement. If no other time is established for remedy of a default, the default must be remedied within 60 days. Failure to remedy a default provides the non-defaulting party with the right to pursue all legal remedies, including termination of this Agreement.

What if 201 doesn’t meet their financial goals?

The annual audited financial statements, prepared in accordance with GAAP, shall contain an unqualified opinion as to going concern status. The annual audited financial statements shall contain positive unrestricted net assets when adjusted for the amount invested in capital assets (also called expendable net assets, i.e., excluding the assets and liabilities associated with capital assets). If either condition is not satisfied in any material amount, 201 will present a plan to the City to remedy the condition within two fiscal years. Failure to make substantial progress on that plan in the first year will constitute a default by 201. Failure to satisfy the plan after the second year will constitute a default by 201, and 201 will be given 90 days to remedy the default.

But then what? City takes it over?

I’m not sure that this means anything or that they would have to comply with these laws . . . at least not to the extent one might think . . . I’ll have to look at that closer:

201 shall be subject to the Living Wage, Prevailing Wage, Non-discrimination and Affirmative Action requirements of City’s ordinances, according to their terms.

Here’s the programming agreements:

Host a high-quality and diverse array of local, regional, national, and international programming:
i. 201 will present or co-present a minimum of 35 performances per year (including Broadway at Overture), on a three-year rolling average, to increase based on market conditions and opportunities. 201 will make reasonable efforts to attract promoter and co-promotion activity in all venues.
ii. 201 shall not require any local promoter to enter into an exclusive agreement that restricts their use of other Madison venues in order to program activity at the Overture Center.

Support the activity of resident companies:
i. 201 will continue to provide primary performance venues to arts organizations designated as “resident companies”. 201 will continue its cooperation and partnering with resident companies to deliver education and outreach to the community.

Attract significant community support through paid attendance and contributed income:
i. 201 will operate its own presentations in a financially sound manner.
ii. 201 will meet the revenue generation requirements identified in the City Contributions section of this agreement.

Ensure broad-based community access through inclusive planning and affordable program options:
i. The Community Based Advisory Committee will be made up of an equal number of appointees from 201 and the City. The City appointments will be made by the Mayor, with confirmation by the Common Council. The City may seek input from the Madison Arts Commission on its appointees.
ii. The Community Based Advisory Committee shall meet on a regular basis with staff on programming diversity, audience development, and community engagement activities.
iii. This committee shall make regular committee reports to the 201 Board.
iv. 201 shall continue to cooperate with the Madison Community Foundation (MCF) with regard to the Civic Center Foundation Fund administered by MCF for support of such programs.
v. 201 shall continue to provide community rental subsidy programs.
vi. 201 will continue or implement free or reduced cost programs.
vii. 201 will continue to provide free access to public galleries.
viii. 201 will annually identify anticipated funds from MCF, subsidies or other sources to be used to meet the obligations for community based activities and will review recommendations from the Community Based Advisory Committee on how such funds should be allocated.

That’s it, that’s what I got of substance out of the agreement, in a half hour or so.