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Date
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December 22,
2008
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Agenda
Item No. 39 Roll
Call No. 08-
Communication No. 08-753 Submitted by: Donald
M. Tripp Park
and Recreation Director |
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AGENDA
HEADING:
Accepting proposal of C-Corporation for the management
of
SYNOPSIS:
Recommend approval of the Golf RFP Evaluation and Selection
Committee’s and Park and Recreation Board’s recommendations to authorize the
City Manager to negotiate and execute a contract with C-Corporation, (Jeff
Chiodo, president) for the management of
FISCAL
IMPACT:
Amount: Using an average of the past two fiscal years,
under the recommended action the Golf Enterprise Fund (Golf Fund) would receive
about $175,000 more in revenue annually than under the current operation
arrangement. The Golf Fund will use the increased revenue to continue to pay PILOT,
Indirect Costs (administration and support), and police and fire services
provided by the General Fund. Any net
revenue will then apply to the balance owed to the General Fund.
Staff does not anticipate debt retirement in the
foreseeable future. Under the current
agreement with Des Moines Water Works, the City does not pay for water at
facilities that do not generate a profit.
An outcome of this agreement would be that the City will not pay for
water usage at the golf courses until such time as the entire debt is retired.
Additionally, C-Corporation will provide a capital
investment of $1,097,500 to the two courses over ten-years. Over the past ten years the City has been
able to fund $425,550 in capital improvements.
Funding Source:
Management fee payments from C-Corporation to the City for
Grandview and Waveland Golf Courses, deposited to the
Operating Budget, Golf Operations Fund, EN201 PKS010704 (Grandview) page 250
and EN201 PKS010707 (Waveland) page 251.
ADDITIONAL
INFORMATION:
The City of
From FY 2000 through FY 2007, Golf Fund expenses exceeded
revenues by an average of $327,000 annually.
These losses contributed to the City’s current General Fund’s Golf
Enterprise Fund loan balance of $3.7 million.
The C-Corporation agreement at Blank has proven to be more of a
financial benefit than the existing City operating management agreement
currently in place for
On November 8, 2006, at a City Council budget
workshop, staff recommended evaluating the success of the A.H. Blank Golf
Course fully-privatized management agreement and pursuing similar operating
agreement changes when the Grandview and Waveland management agreement term
expired after the 2009 golf season.
At the November 26, 2007, City Council budget
workshop, staff recommended that an RFP be developed for the private management
of
On August 25, 2008, by Roll Call No. 08-1522, the
Des Moines City Council authorized issuance of the Golf Management RFP (RFP
V09-20) for the private management of Grandview and Waveland Golf Courses, in
which the awarded proposer would be required to pay the City a guaranteed fee
for the exclusive right to operate and manage both Grandview and Waveland Golf Courses. The RFP was sent out to seventeen potential proposers;
seven companies participated in securing the addendums and questions to answers
and four organizations submitted proposals. Those that submitted proposals
included: Billy Casper Golf (
Among the general terms and conditions set forth in
the RFP are: City’s right to set fees and charges for the golf course operations
as set out in the City Ordinance, with the City Council approving green fees,
badge fees, cart rentals, etc. and the Park and Recreation Board approving
concession prices; approval of all
capital projects prior to any improvement work commencing at either Grandview
or Waveland Golf Courses; required use of the City’s Point Of Sale (POS) cash
register; an electronic tee time reservation system; maintaining the City’s
sledding offerings during the winter months; and complying with the City’s
agreement with The First Tee of Greater Des Moines.
The Golf RFP Evaluation and Selection Committee,
appointed by the Des Moines City Council, was comprised of the Park and
Recreation Board President, two Park and Recreation Board Members (both of whom
also serve on the Park and Recreation Board’s Citizen Golf Advisory Committee),
the City’s Economic Development Administrator, the City’s Budget and Research
Officer, the Park and Recreation Services Manager, and the Assistant Park and
Recreation Director. Two additional
members, the Executive Directors of the Iowa Golf Association and Iowa Golf
Course Superintendents’ Association were also appointed to this committee but
were unable to fulfill their commitment as both were out of town on the date of
the public presentations and closed session interviews that followed with each
of the proposers.
As a part of the overall review, the RFP required
proposers to submit two years’ financial statements and evidence of equity
capital and financing necessary to fulfill the obligations of their
proposal. The RFP evaluation criteria
were: history of company, contractors’ experience and reputation (20 pts.);
references, client list, complexity of events (outings, banquets (10 pts.);
compensation to the City (30 pts.); business plan (30 pts.); environmental
practices (10 pts.); and local preference (1 pt.) for a total of 101 available
points.
The table below illustrates the RFP Evaluation and
Selection Committee’s final score based on a ten-year contract value to the
City:
|
Criteria |
Pts. |
Billy Casper |
C- Corporation |
H.G. Golf |
Vanscoy Mgmt. |
|
Total Score |
101 |
78.67 |
90.00 |
67.95 |
68.32 |
|
Ranking |
|
2 |
1 |
4 |
3 |
Within the individual proposals, C-Corporation
provided the best financial outcomes to the City in both operating cash and
capital investment. C-Corporation also
scored high in: their business plan detailing specific course condition
improvements (tees, greens, traps, etc.); capital improvements (cart storage
for electric golf carts, upgrading the irrigation systems, building a new maintenance
facility at Grandview and assisting with the fixtures and furnishings of the
new Grandview Clubhouse; marketing and promotional efforts (creating a call
center allowing the public to call one phone number for all courses to book a
tee time, golf outing or banquet, offering babysitting services at Grandview
for stay-at-home parents, establishing a Ryder Cup tournament involving all
three City courses, continuing the three-course season badge, reaching out to
East High School parents and alums to book events and sports banquets,
etc.). C-Corporation has over 37 years
of experience operating and managing Blank Golf Course including both the
clubhouse and golf course maintenance operations and provided evidence of
financing and equity capital to achieve their stated outcomes within their RFP
response.
The City of
Staff
further recommends that the City Manager, or his designee, be authorized and
directed to negotiate and execute a contract based on the response to the RFP
for an initial term or ten (10) years with up to two (2) additional four (4)
year options for renewal, subject to review and approval as to form by the
Legal Department, and to execute any additional documents that may be necessary
under such a contract.
PREVIOUS COUNCIL ACTION(S):
Date: August 25, 2008
Roll Call Number: 08-1522
Action:
Issuance of request for private
management of
Date: July 10, 2006
Roll Call Number: 06-1385
Action: On agreement with C Corporation, (Jeff Chiodo, President) for the A.H. Blank Golf Course and Clubhouse Management Agreement from July 1, 2006 through January 15, 2019, continued from June 19, 2006 Council Meeting. (Council Communication No. 06-443
) Moved by Kiernan to adopt. Motion Carried 6-1. Nays: Hensley.