New COO vows to get Carnival Center on budget
By Wayne Tompkins
After the Carnival Center for the Performing Arts received a $4.1 million county bailout last week, the center's chief operating officer is vowing that next year's occupancy costs will come in at or under budget.
"I'm on record," Terea Hebert said. "If we don't hit it, something happened in the market that we couldn't help. We had a hurricane or utilities went up."
While CEO Michael Hardy has been the public face of the $472 million downtown Miami landmark, Ms. Hebert, a Miami-Dade government veteran hired in May, was brought in to clean up an occupancy-cost debacle that forced last week's embarrassing financial rescue by county commissioners.
"The sustainability of the center and fiscal responsibility are going to be my two major focal points," Ms. Hebert said. "I'm going to focus primarily at the beginning on all of our contracts," reviewing them and making sure the pricing levels and the terms are beneficial for the center.
That financial credibility will be important not only in keeping the center open but in securing the funding to keep it updated with the latest technology.
Ms. Hebert oversees areas such as building maintenance, security, janitorial and waste pickup. She is in charge of design and oversight of renovation projects and will assist the chief financial officer in developing annual budgets.
Ms. Hebert said that she has already found at least $200,000 in annual cost savings through changes ranging from bringing some of the center's contracts in-house to restructuring utility payments.
Working directly with the vendors instead of through third parties is "going to eliminate some of the pass-through costs" while improving communication and efficiency, Ms. Hebert said.
"Having savings of a couple of hundred thousand right off the bat, it's not huge, but those are just simple things," Ms. Hebert said. "Then I'll be looking at the larger picture. Do I want to hire in-house staff" or maintain contractors? "I have to weigh personnel costs."
The biggest advantage, however, is that the center now has most of a year's experience to draw from in calculating its expenses and needs.
Ms. Hebert is no stranger to the center that opened in October. She's been involved with the Carnival Center project since 1999, planning, organizing and directing the administrative and financial operations from her position as director of administration for the county's Performing Arts Center Management Office.
"Her experience in the management of major projects and her close familiarity with the center are tremendous assets," Mr. Hardy said. "I worked with her for five years and was always impressed with how on top of things she was," especially her skill with budgets, her institutional memory and her knowledge of the building's physical structure.
The Carnival Center has endured weeks of headlines about mismanagement that have overshadowed positive reviews of the facility. Like a sighing parent peeling off a $20 bill and telling a teenager "OK, but this is the last time," Miami-Dade commissioners agreed to make up a $4.1 million shortfall as part of a supplemental budget.
Problems stemmed from errors ranging from the use of square feet instead of cubic feet to calculate the cost of air conditioning to criticism over inadequate parking and what County Manager George Burgess described as "inadequate assumptions used to project the complex's occupancy costs" including utilities, insurance, maintenance and security.
The cash infusion raises the county's support of center operations from $3.75 million to just less than $8 million for the year. Operation costs for next year are estimated at just less than $9 million, expected to come from a county allocation of hotel, food and beverage tax revenues. That allocation would be just over $5 million more than the previous year.
"Mistakes happen in the first year," Ms. Hebert said. "The center did what they thought they should do: Hire a consultant who knows what they're doing. And they took the advice of the consultant, and they budgeted accordingly to what the consultant recommended."
Her established relationships with the center's contractors and county officials from her years with Miami-Dade County also should draw immediate benefits, she said.
"I know who put up our stone, I know who made our tiles and who built our air-conditioning," she said.
She will be involved in negotiations with center users, including the resident companies, on rental and usage fees but said it is not known if fees will be increased.
What went wrong in the first year is a tough question, she said, but she agrees with Mr. Burgess' assessment that there was no similar performing-arts center to benchmark expenses against.
The center's occupancy costs of $15.62 per square feet were more than double the original estimate of $7.50 per square foot.
While 27 comparable performing-arts centers in the US were studied to arrive at the $7.50 estimate, Mr. Burgess said that estimates did not take into account significant differences in building types, the higher costs of startup operations, utility cost increases and "idiosyncrasies in the way that occupancy costs are accounted for in other performing-arts centers."
While Ms. Hebert believes the center's parking situation is not as bad as the media have reported it, "no woman wants to walk a block in her high heels all dressed up."
She said the county is working on building a parking garage while in the meantime, the center is talking with the neighboring Omni and School Board complexes and the Miami Parking Authority to secure parking. A shuttle service also is being considered.
Ms. Hebert also has served as budget analyst for the county's Office of Management and Budget, senior administrative officer for its transit agency and commercial accounts supervisor for the Department of Solid Waste Management.
She has a bachelor's degree in business administration from Florida Atlantic University and an MBA from Nova Southeastern University.