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The 5-year agreement enabled greater operator continuity for golf course operations, planned improvements, and event promotions for the City and encouraged the contractor to generate more revenue in order to receive their maximum management fee. The increased revenue enabled the City to make annual debt service payments on the bonds sold to finance the course construction, and secondly, to pay back the loan from the General Fund faster. The City Council approved the 5-year term Agreement, which expired on June 30, 2015. The fee structure was equally divided by 50 percent between both (fixed and incentive) fees and could not exceed $204,000. In 2015, the City entered into a 5-year extension of the Operator Agreement with Pleasanton Golf, LLC (CourseCo) that ended on June 30, 2020. However, due to COVID-19, City Council approved a 6 month extension of the agreement to allow staff to finalize contract negotiations with CourseCo for a long-term agreement for continued operation of Callippe Preserve, present the Agreement to the Parks and Recreation Commission, and bring back the Amendment to City Council prior to December 31, 2020, when the 6 month extension expires. DISCUSSION The proposed Operator Agreement is attached for the Council's review. Staff representatives from the City Attorney's Office, Finance, and Operations Services departments have been negotiating with Pleasanton Golf, LLC (CourseCo) management for several months. The Agreement addresses a term extension of five years with options to extend the term, payment practices, and minor language cleanup to the agreement, including updated insurance requirements. Listed below are brief explanations of what staff considers the primary deal points: • Term — The proposed Extension and Amendment of the Agreement with Pleasanton Golf, LLC (CourseCo) is for a period of five 5 years with an option to extend the agreement for one additional 3 year term and one 2 additional year term. Now that the golf course bonds have been paid off, the contract term is no longer subject to the Internal Revenue Service (IRS) limits on the length and payment options for management contracts. Therefore, a five 5 year extension to the current agreement is allowable and is the most beneficial at this time. Both staff and Pleasanton Golf, LLC (CourseCo) representatives have had a mutually beneficial relationship and based on our experience during the past 15 years, staff supports retaining Pleasanton Golf, LLC (CourseCo) as the City's golf course operator. • Management Fee — Proposed payments are divided between both a "fixed" and "incentive" management fee and are outlined below. The first year "fixed" fee is $120,000, and the combined management fee (fixed and incentive) cannot exceed $150,000. Each subsequent year the management fee increases by a maximum of the Consumer Price Index (CPI) on July 1, 2021 and every July 1st thereafter. In addition, an equal amount "incentive" fee can be achieved based on gross revenues (excluding food and beverage, merchandise, and lessons) after established revenue thresholds have been achieved. In year one, Pleasanton Golf, LLC (CourseCo) would receive 15 percent of all gross revenues in excess of $3,000,000. In addition, they would receive Page 3 of 5