THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTION.
This action approves the First Amendment to the existing Self-Service Baggage Cart Concession Agreement to increase the maximum charge for renting a self-service baggage cart from $4 to $5 in all areas of FLL, including the Federal Inspection Services Facility (FIS); to reimburse Smarte Carte in an amount not to exceed $4,000 for the cost of installing three relocated cart management units in the FIS for cart dispensing and storage; and to change the percentage fee paid to the FLL from 25% of gross sales to 7%.
The Office of Economic and Small Business Development (OESBD) established a race neutral assignment for Airport Concession Disadvantaged Business Enterprise (ACDBE) participation for this Agreement. No ACDBEs are currently participating in this project, and there are currently no certified ACDBE firms in this industry in the local market areas of Broward, Miami-Dade, and Palm Beach Counties (Exhibit 3).
On October 5, 2010 (Item No. 11), the Board directed the Broward County Aviation Department (BCAD) staff to negotiate an agreement with Smarte Carte that allowed baggage carts to be offered to passengers for $4 in the domestic arrival, domestic departure, and international departure areas and free of charge to arriving international passengers in the FIS Facility.
On November 9, 2010 (Item No. 43), the Board approved the Agreement to provide for a non-exclusive self-service baggage cart concession at FLL for a five year term, effective December 1, 2010 and expiring on November 30, 2015 under the following terms and conditions:
• Smarte Carte was to provide 1,000 carts and 40 cart management units (CMUs) at various locations in the terminals, parking garages and Rental Car Facility.
• Smarte Carte was to pay 25% of gross revenue from cart rentals in domestic arrival and departure areas and international departure areas.
• There was no Minimum Annual Guarantee (MAG).
• Smarte Carte was to provide carts free of charge to arriving international passengers in the FIS Facility.
• The County would reimburse Smarte Carte at the rate of $1.50 per cart used free of charge by international passengers in the FIS Facility.
Also, on November 9, 2010, the Board directed BCAD staff to provide a six-month report for the self-service baggage cart operation at FLL. On June 16, 2011, the Director of Aviation sent a Memorandum advising Board members of the performance of the self-service baggage carts operation for the first six months of the Agreement, from December 1, 2010 through May 26, 2011 (Exhibit 5).
As a result of the performance, on April 17, 2012 (Item No.36), the Board directed BCAD staff to negotiate a new fee structure that would equalize the fees for self-service baggage cart operations in the FIS Facility and all other FLL locations; to provide information reflective of the number of passengers surrounding equalization of the fees; and to provide passengers the option to rent baggage carts using credit cards.
A report for historical baggage cart usage at FLL (Exhibit 4), which lists the cart usage from January 2011 through April 2014, shows revenue paid to support the free FIS Facility baggage cart operation. As discussed by the Aviation Director at the Budget Workshop with the Board in early May 2014, the baggage cart operation has resulted in a significant loss of revenue to BCAD. To date, the net amount paid by the County to Smarte Carte totals $1,213,581.
Therefore, BCAD is requesting Board approval of the proposed First Amendment to provide for the following changes in the fee structure for the self-service baggage cart operation at FLL:
• Smarte Carte will charge a $5 use fee per cart rental at all locations at FLL, including the FIS Facility.
• BCAD will receive a percentage fee of 7% of gross sales from all FLL locations.
• BCAD will reimburse for the actual cost of installing 3 relocated CMUs, in a not to exceed amount of $4,000.
• Smarte Carte will provide a minimum cart count of 650 with 37 CMUs, with 30 days written notice to provide up to 1000 carts.
• A revised Exhibit A indicating relocated CMUs.
• A revised Exhibit G (Monthly Reporting Form) to include the gross sales generated from the FIS in order to report gross sales and usage from all FLL locations.
• All CMUs shall be equipped with the ability for passengers to utilize credit cards to pay for the carts.
Examples of other Florida airports self-service baggage cart prices are included in Exhibit 6.
Five negotiation meetings were held with Smarte Carte representatives on September 24, 2012, December 5, 2012, July 18, 2013, November 15, 2013, and May 14, 2014, resulting in the proposed First Amendment.
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