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HomeMy WebLinkAboutAgenda Statement 1981/12/22 Item 18COUNCIL AGENDA STATEMENT Item ~ . 18 Meeting Date »/~~/R~ TI~fLE: Resolution /Q~~~, Approving a month-to-month agreement with Golf Pro 1BMITT D BY: Assistant City Manager ~ (4/5ths Vote: Yes No X ) he cu rent five-year agreement with Joe Warburton, Golf Professional, expires December 31, 981. We are proposing a new month-to-month contract with Mr. Warburton pending final eterm nation of whether the City should seek proposals from private operators to not only erfor the duties and provide the services heretofore provided under the Golf Pro's contract,, ut al o incorporate in one single contract maintenance responsibility of the entire Golf ourse heretofore provided by City forces. The concept of contracting total responsibility or ma ntenance and operation of municipal golf courses to private concerns has been gaining avor mong a large number of cities throughout the State, with the City of Oceanside the atest city to request proposals for such an operation. Our investigation reveals that all ities that have embraced this concept to date appear satisfied with the arrangement and, urthe have found that the private operator for various reasons has been able to make the unici al golf course a~revenue producer for the city whereas past history of most municipal ourse indicates difficulty in breaking even. Our investigation has also revealed that the ommun ty and the golfers are generally satisfied with the level of maintenance and operation f the courses. deta led report, which will probably recommend that we seek requests for proposals for the perat on of the Chula Vista course will be before the Council early in January, 1982. We ave b en studying the matter for the better part of six months and, for this reason, we did no attempt to negotiate a new multi-year agreement with Mr. Warburton in order to avoid estricting the City's flexibility in seeking proposals. While the delay in negotia- ting a new contract with Mr. Warburton or seeking proposals for that service has resulted in app ehension on the part of Mr. Warburton, he has agreed to accept a month-to-month contra t until a final determination can be made on the broader issue. As the City Council is awa e, Mr. Warburton has served the City well for about sixteen years and the City's intere t in looking at other methods of operation in no way reflects dissatisfaction with Mr. Wa Burton's current or past performance. It would be our intention, if the City Council reject the idea of receiving proposals (or even if the City Council decides to receive propos is and ultimately rejects the acceptance of any of the proposals), to renegotiate anothe multi-year contract for Golf Pro services with Per. Warburton. In view of the above, it is v RECOMM NDATION: That the City Council approve the month-to-month agreement and authorize the Mayor to sign same. BOARDS COMMISSIONS RECOMMENDATION: N.A. DISCUS ION Approv 1 of the resolution providing for a month-to-month agreement would essentially provid for continuation of the service under the same terms and conditions as found in Mr. Wa Burton's current contract. The proposed agreement, of course, would be on a month- to-mon h basis with termination possible upon 3q days' notice by either party. Section 8 of the month-to-month agreement has been revised to convert the gross profit formula from annual to monthly. This would mean that Mr. Warburton would be eligible for a percentage of monthl greens fees collected dependent upon his gross sales from the various activities he is esponsible for at the Golf Course. continued orm A- 13 (Rev. 11,/79) Page 2, Item 18 Meeting Date ___12/22/81 s mos of the members of the City Council are aware, P1r. Warburton over the past five ears, and even prior to that time, has had an agreement which has allowed him, in xchan e for promoting the Golf Course and providing professional management services at he Co rse, to derive all the income he is able to earn from the leasing of golf carts, evenu s from golf lessons, sales from the Pro Shop, repairs of golfing equipment, and evenu s earned from the driving range. In addition, he has been contractually able to eceiv a percentage of the total greens fees on an annual basis, based on a sliding per- entag scale tied to the gross profit from those sources enumerated above. For example, f Per. Warburton's gross profit for a given calendar year was more than $115,000 but less han $ 20,001, he was entitled to 2% of the total greens fees collected during that calendar ear. If, for example, the areens fees collected during a given year were $180,000 and r. 41a Burton's gross profit before expenses on his operation was between $115,000 and 120,0 0, the City was obligated to pay an additional $3,600 ($180,000 times 2%) to him. he pr posed month-to-month agreement would simply convert those annual gross profit figure to an equivalent monthly amount with the same percentages being retained. he Ci y Council should be aware that my recommendation to extend the agreement on a onth- o-month basis under essentially the same terms and conditions of the present agree- ent i not necessarily indicative that any subsequent multi-year agreement would include he sa e terms and conditions as contained in the expiring five-year agreement or in the ropos d month-to-month agreement. I do think, however, that in fairness to Mr. Warburton nd hi many years of service to the City, as well as the uncertain position in which he ow fi ds himself, justifies the month-to-month extension under the same terms as the xisti g contract. INANCtAL IMPACT f the monthly greens fees collected at the Chula Vista Municipal Golf Course are $25,000 n a g ven month and Mr. Warburton's gross profit on a monthly basis ranges anywhere between 9,583 and does not exceed $10,000, he would be entitled to $500 as his pro rata share of he $2 ,000 greens fees (2% times $25,000 equals $500). If his gross monthly profit is ess t an $9,583 or more than $10,000, the percentage of greens fees he would be entitled o wou d increase or decrease in 1/2% increments dependent upon his actual monthly gross rofit picture. ERA:ma Y F ~~ a _v is -~~.~~ -;