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THE CITY OF 11 11.1. m CITY COUNCIL AGENDA REPORT pLE ASANTON. June 1, 2010 Parks and Community Services TITLE: APPROVE GOLF COURSE OPERATOR AGREEMENT WITH PLEASANTON GOLF, LLC (CourseCo, Inc.) SUMMARY The five -year Operator Agreement with Pleasanton Golf, LLC (CourseCo Inc.) is scheduled to end on June 30, 2010. Staff from the City Attorney's Office, Finance, and Parks and Community Services departments have been meeting with Pleasanton Golf, LLC management for the past year to re- negotiate the Agreement and as presented it addresses all relevant issues including staffing, payment practices, course policies /procedures, environmental permit requirements, accounting, insurance default provisions, etc. The recommended Agreement is for a term of five (5) years. In accordance with the Agreement, Pleasanton Golf, LLC would not have an ownership interest in the golf course, but merely manage the maintenance and operations of Callippe Preserve for the City. Expenses would be passed through for reimbursement by the City from golf course revenues. Pleasanton Golf, LLC would receive the noted "fixed" fee each year of the contract, with any "incentive" fee payments tied to meeting aggressive revenue goals, including green fees, cart rentals, driving range, merchandise, lessons, and food and beverage. PARKS AND RECREATION COMMISSION RECOMMENDATION That the City Council approve the Operator Agreement with Pleasanton Golf, LLC for management of Callippe Preserve Golf Course. RECOMMENDED ACTION Approve the Operator Agreement with Pleasanton Golf, LLC for management of the Callippe Preserve Golf Course. FINANCIAL STATEMENT In the first year of the Agreement, the combined fixed /incentive fee cannot exceed $180,000. The combined management fee (fixed and incentive) increases by a maximum of $6,000 each year for the remaining four (4) years (approximately 4% each year). The City will utilize revenues generated from golf course operations to pay for all operating costs, with any excess funding used first to make annual debt service payments on the bonds sold to finance the course construction, and second, to pay back the General Fund.