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Finance Committee

Meeting Date:	08/11/2020
FROM:	Bill Gallardo

Subject:

Reimbursement Agreement with Western Golf Properties (WGP) for Brea Creek Golf and Birch Hills Golf Courses

RECOMMENDATION

Approve reimbursement agreement with Western Golf Properties.

BACKGROUND/DISCUSSION

In September 2019, the City Council awarded a contract to WGP to manage the Brea Creek Golf Course (BCGC) on an interim basis until a permanent operator could be identified through a Request for Proposal (RFP) process. In early 2020, the City and Imperial Golf mutually agreed to terminate the contract for maintenance and operations of Birch Hills Golf Course (BHGC). Since the permanent contract for BCGC had not been awarded, City Council directed staff to modify the RFP to include selection of a permanent operator to manage both courses. In the interim, WGP was awarded a contract to also manage BHGC, effective July 2020. A revised RFP for permanent management and operations of both courses will be issued in the coming months.

BCGC closed mid-March 2020 as a result of the required closure of non-essential businesses due to COVID-19. WGP was successful in receiving payroll assistance through the Federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) prior to the course reopening in late April.  The payroll assistance allowed WGP to give the City a credit on the monthly management cost and provided an opportunity to make improvements at the course. As part of this partnership, WGP would use additional labor from WGP's other properties/businesses not currently allowed to open while the City provided the supplies for the projects. The projects included painting the interior and exterior of the clubhouse and deck, adding a new drop ceiling, installing new carpet in the clubhouse, trimming palm trees, installing new windows at clubhouse and adding screening around the maintenance building. The City-provided supplies for the projects totaled $31,200.

Other interior improvements to the BCGC clubhouse included new restaurant equipment, an electronic menu board, tables, chairs, cabinets and countertops.  WGP completed these improvements in good faith since they did not use any CARES funding and were entirely funded by WGP. The cost of these materials and equipment was $49,970.

At BHGC, Imperial Golf removed most of their equipment and materials before leaving the property that included, but was not limited to, patio furniture, kitchen equipment and clubhouse fixtures. WGP is in the process of replacing these items at their cost to make the golf course fully functional. These costs are estimated at approximately $100,000 and will be verified by actual receipts.

The RFP will require the permanent operator to cover the estimated $150,000 in expenses for both courses not covered by CARES funding. The reimbursement agreement will allow WGP to be reimbursed for these expenses in the event they are not awarded the permanent operator contract. Since the selected operator will be required to pay for these expenses, there will be no net cost to the City.

SUMMARY/FISCAL IMPACT

The City will reimburse Western Golf Properties for expenses incurred at Brea Creek and Birch Hills Golf courses if WGP is not awarded the permanent operator contract for both courses. Any reimbursement will be recouped through the permanent operator RFP.

RESPECTFULLY SUBMITTED

William Gallardo, City Manager
Prepared by: Bill Bowlus, Public Works Superintendent
Concurrence: Tony Olmos, P.E., Public Works Director

Attachments
Reimbursement Agreement