CC - Agendas - City Council - REGULAR - 5/13/2014

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Prescott City Council Regular Voting Meeting Page 9 April 8, 2014 Joe Baynes, Recreation Services Director, noted that Council initiated the request for the proposal for the operation and maintenance of Antelope Hills Golf Course, with the City retaining the maintenance function, on June 25, 2013. He said with proposals were received and the committee unanimously recommended Billy Casper Golf (BCG). BCG was rated the best marketing firm and provided a detailed transition plan with resources to complete the objectives. BCG also gave the best examples of how they would increase the rounds and revenues. Mr. Baynes said the contract was for a five year term and additional two five year terms with mutual consent. BCG proposed an operating budget of $1.2 million which will be approved by the City of Prescott annually. The BCG annual management fee is $84,000.00 and includes travel. BCG will guarantee the City $1.3 million annually, as a minimum net income. Mr. Baynes said that if they do not reach that amount in two consecutive years, they can cue that amount by paying four months of management fees at $28,000.00 for each of the remaining three years or by paying the aggregate difference between the net operating income for each fiscal year and the guarantee it is not met. Mr. Baynes said the golf carts will continue to be included as an operating budget item with the remaining debt service owed and paid, and BCG leasing the new carts to enforce the City owned fleet as it wears out. The City may terminate for any reason after two years, with a 120 day notice and no penalty. He discussed incentives for BCG and said that revenues were restricted to greens fees, range passes, annual passes and 10 percent of the gross profit margin from food and beverage sales in excess of $500,000.00, and 15 percent, in excess of $40,000.00 for merchandise in the pro shop. He said the annual incentive is capped at not more than the annual management fee. Mr. Baynes said the fiscal year 2015 projections anticipate a $2.9 - $3 million annual budget. Craig McConnell, City Manager, said there would be one budget for Antelope Hills, which will be a City adopted budget. He said the budget will reflect the input of the management firm and Recreation Services. Mr. Baynes described what would be in the budget. He said $50,000.00 would go in a bank account for Antelope Hills golf management that will be controlled by the City. Mr. McConnell noted that the money is working capital. Mr. Baynes continued by saying revenues from that account would pay Antelope Hills Golf Management Company, including the employees of the pro shop and food and beverage, as well as other expenses. The employees will be BCG employees. Mr. McConnell said that all of those expenditures are reflected in the budget that the Council approves annually. Douglas White, Vice President Billy Casper Golf and Chris Jones, Regional Director of Operations addressed the Council. Mr. White congratulated the staff for the development of the request for proposal. He said that they spent a lot of time with City staff to make sure that the agreement is in direct correlation with the goals of the City.