Broken Arrow City Council
Meeting of: 06-20-2016
To: Mayor and City Council
From: Parks and Recreation Department
Title:
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Approval of and authorization to execute the City of Broken Arrow Golf Course Professional Management Services Agreement with Greenway Golf Associates, Inc. on city owned land known as the Battle Creek Golf Course
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Background:
The City presently utilizes a professional manager to assume responsibility for the complete operation of the Battle Creek Golf Course including, but not limited to, general administration, facility and equipment operation and maintenance, and pro shop and food service management. The professional manager is needed to provide the maintenance and operation of this course at a service level equal to or better than that being provided to competitive courses in the Tulsa Metropolitan area with restaurants, meeting rooms and beverage lounges.
Greenway Golf Associates, Inc. has the expertise with respect to successful and efficient management and operation of golf course facilities on comparable sites and has effectively and efficiently managed the Battle Creek Golf Course since September 1, 2006. The original agreement terminates June 30, 2016, and the new Golf Course Management Services Agreement is proposed with Greenway Golf Associates, Inc. for an additional 5-year period beginning July 1, 2016.
Highlights of Greenway Golf Associates accomplishments at Battle Creek Golf Course:
• Over $250,000 improvement on annual net operating income: The course now consistently operates as a self-sustainable business. A result of utilizing Greenway’s proven systems and programs to improve marketability of club with a focus on quality products, friendly service, fun programs and disciplined expense management.
• Accounting integrity: Implemented centralized monthly accounting and financial controls supervised by company’s director of operations and corporate accountant. Consistently receive favorable reviews on annual audits.
• New marketing plan: Implemented new marketing plan and philosophy that the golf course is “not in the golf business” but in the “entertainment business.” Under this approach, all programs, services, products and marketing was redesigned to promote fun entertaining experiences. Additionally, reassessing the day parts and offering golf rates and programs based on what day and time of day as well as a public golf loyalty program have increased revenues of the golf course. This pricing approach offers guests an opportunity to choose price, time or frequency as their most important factor. By offering more flexibility in the pricing and more fun experience, golf rounds have increased annually by over 3,500 rounds.
• State of the art point of sale system: Installed industry-leading EZLinks point of sale and customer relations management system. Allows guests online tee times, quicker check-ins and ongoing email communications. The systems back-in reports provide valuable data for marketing.
• Good safety record: implemented extensive safety training program to insure a safer working environment, resulting in very low injury rate and reduced insurance costs.
• Strong management team: Recruited and sustained highly talented onsite management team led by the relocation of one of Greenway’s most experienced course managers to Battle Creek. Only one course manager the entire term of agreement has provided the golf course facility great stability.
• Remodel of clubhouse interior: Developed and completed interior remodel plans of clubhouse to include new appearance with new amenities for guests including pool table, shuffle board, darts, new paint color, service counter and bar and improved traffic flow.
• Improved property exterior curb appeal: Designed, installed, and implemented clubhouse landscaping areas to better improve appearance of entrance to property. Presents a quality brand representation for the golf course facility and the City of Broken Arrow.
• Renovation of course bunkers: Developed plan and completed major renovation of all golf course sand bunkers, which were in very poor condition and beyond repair. Greenway served as project manager and secured notable Oklahoma course architect Tripp Davis for major course bunker renovation project.
• Agronomic problem solving: An expanded team of company experts in agronomics, equipment, safety and maintenance programs supports Battle Creek’s onsite Golf Course Superintendent. This allows for better results in conditions, costs and lower staff stress due to a full team approach. This support was best displayed when the course lost fairway turf from winterkill. Greenway analyzed the problem, which was very serious and developed a more cost effective approach by utilizing a unique Greenway patented overplanting machine to replant 14 acres of damaged bermuda turf. This saved over $100,000 and kept the golf course from losing significant revenue with much quicker reopening than conventional sprigging.
• Proprietary “Greenway Turf Management Program: Greenway’s course maintenance teams, led by industry top agronomist Marc Logan, are turf science experts in applying old-world methods with modern techniques. Using Greenways exclusive methods, Battle Creek course staff have been trained on implementing and managing this unique proprietary turf program. Course operating costs and conditions are now, dollar for dollar, consistently best public course greens in region. And, better than many private courses.
• Significant reductions in course maintenance chemical applications: First company and only in the region to put into practice 100% eco-friendly and organic material applications on turf management. Resulted in 73% annual reductions in fungicide applications at Battle Creek golf course.
Over the past 10-years, Greenway Golf has developed an understanding of City of Broken Arrow policies and operating procedures, they work closely with city departments to accomplish the goals at Battle Creek Golf Course. Greenway staff has built goodwill with golfers, banquet facility users, surrounding homeowners and homeowner associations, with the community, and with city staff. Battle Creek Golf Course continues to be a premier golf course in the Tulsa Metropolitan Area.
The new Golf Course Professional Management Services Agreement is proposed with the following noteworthy changes:
A. Section 6.1: The term of this Agreement shall be for a period commencing on July 1, 2016, through June 30, 2017, and may be renewed each year for a one (1) year term beginning on July 1 of each year for four (4) consecutive years…
a. Previously the term was 10-years.
B. 7.1.1. Company will be paid an Annual Management Fee, based upon 4.0% of Gross Revenue…
a. Previously the Annual Management Fee was 2.5% of gross revenue.
b. For comparison purposes, based upon the fiscal year 2017 budget for Gross Revenue, the company will receive an annual management fee of 4.0% or $62,598.24, compared to the previous agreement of 2.5% or $39,123.90.
C. 7.1.1.2. Incentive fee is 50% of net operating income.
a. Previously the Incentive fee was a sliding scale from 50% to 60% based on the amount of net operating income.
b. Based upon the fiscal year 2017 budget for net operating income the company will receive $15,021.00 as an incentive fee.
D. 10.7.8 Oklahoma Sex Offenders Registration Act and Mary Rippy Violent Crime Registration Act was added.
E. 10.8.1 Water will be charged to the course at the current residential rate.
Staff and Greenway Golf Associates, Inc., representatives are present to answer any questions the City Council may have.
Cost: $0
Prepared By: Scott Esmond, Parks and Recreation Director
Reviewed By: Finance Department
Human Resources Department
Legal Department
Assistant City Manager - Operations
Approved By: Michael L. Spurgeon, City Manager
Attachments: City of Broken Arrow Golf Course Professional Management
Services Agreement With Greenway Golf Associates, Inc.
Recommendation:recommend
Approve the City of Broken Arrow Golf Course Management Services Agreement with Greenway Golf Associates, Inc., and authorize its execution.
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