Here is a break-out of the monies that the City of Worcester paid to the management company, SMG, if the DCU in FY2015, while the tax-payers of Worcester was losing $904,118:


  • Base fee:     309,744
  • CPI:   2.1%
  • Total fee;      316,248


  • Revenues:    $5,341,927
  • Revenues in execs of $4,500,00:      $841,927
  • 50% of revenues in excess of $4,500,000:    $420,964


  • Base fee:     $316,248
  • Incentive fee:   $316,248 (although the incentive fee was 420,964 it could not exceed Base fee)
  • Total fee:    $632,496


We, the tax-payers of Worcester, not only paid a :

  1. Base Mgmt fee to SMG of $316,248 in FY2015
  2. We paid them an “INCENTIVE FEE” of an additional $316,248
  3. In total SMG was paid $632,496 in MGMT fees
  4. Meanwhile the tax-payers of Worcester paid $904,188 towards the DCU center


Is it it just us, but does it seem contradictory to pay anyone an incentive fee of $316,248 when it costs the tax-payers $904,118?   Maybe the “INCENTIVE FEE” should have been tied to the profitability of the DCU not the gross revenues as we pointed out in November of 2014??  

 Think about that we paid a SMG $632,496 in FY2015, while we (the tax-payers) lost $904,188.   We would hate to see how much we pay them if we ever make money??