City Council Agenda and Packet 2010 03 02

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City Council Meeting Minutes February 16, 2010 Page 4 of 15 Mayor Sisk requested a Staff presentation. City Manager Fleming provided background information on the Golf Course Management Service agreement between the City and Western Golf Properties LLC (WGP). On August 4, 2009, Staff notified WGP of their intention to st terminate the exiting agreement which expires on March 1. WGP provided a written response proposing terms for a new agreement on October 7, 2009. The agreement presented the following concerns: 1) the existing agreement’s requirement that the City pay WGP $96,000 per year in addition to covering all their costs for operating the golf course; 2) no provisions in the existing agreement provides an effective way for the City to evaluate WGP’s performance on patron satisfaction, revenues, golf course maintenance and overall golf course operations, and 3) no incentive in the existing agreement for WGP to make capital improvements to the golf course. With those concerns and the overriding objective of improving the golfer’s experience, Staff determined it was necessary to implement a new approach to managing the Golf Course. The key provisions of the proposed agreement with WGP are as follows: WGP pays the City $180,000 annual fee and 10% of gross revenue over $1.9 M. No management fee. Western pays for all expenses, except water, and keeps revenue except for 10% of gross revenue over $1.9 M. All budget, payroll and operation expenses are the responsibility of WGP and subject to annual review and audit by the City. The City may elect to fund or assist with funding capital improvements. WGP will fund capital improvements as approved by the City, but will be compensated on a pro-rata basis if the contract is terminated without cause. WGP may purchase all or some equipment from City and will be responsible for all maintenance and operating equipment. The City will not purchase or maintain equipment. City may conduct annual customer service surveys to determine whether or not WGP is meeting customer expectations. If unsatisfactory, the City may elect, with 180 days notice, to cancel the lease without default. Parks & Recreation Director Stevens invited a Focus Group to convene. The Group consisted of different golf groups at Coal Creek Golf Course, two members of City Council and persons who did not play golf, but had a business or non-golf perspective regarding the City’s golf course. The Focus Group met on October 29, 2009 and reviewed the highlights of WGP’s proposal and considered information regarding the status of public golf courses. There was consensus amongst the Focus Group to continue negotiations with WGP. ïè