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AGENDA REPORT
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| | | | | | | | DATE:
| May 19, 2020
| TO:
| Mayor and City Council
| FROM:
| Stefan T. Chatwin, City Manager 
| | SUBJECT: | Resolution 2020-65 of the City Council of the City of Fairfield Approving the Sixth Amendment to the Management Agreement with Kemper Sports for Golf Course Operations at the Rancho Solano and Paradise Valley Golf Courses |
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| | | | | | | | | RECOMMENDED ACTION | | Adopt resolution. |
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| | | | | | | | | STATEMENT OF ISSUE | | On March 19, the City closed both golf courses in response to Gov. Newsom’s State of Emergency declaration regarding the Covid-19 outbreak (Executive Order N-29-20) and Solano County Order 2020-04. Closures of the golf courses has had a direct impact with no revenue to offset any expenses and Kemper Sports Inc. (Kemper) has agreed to adjust the current Management Agreement (Agreement). The proposed amendments will reduce Kemper’s management fee by 25% for the operation and management of the Rancho Solano and the Paradise Valley Golf Courses. |
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| | | | | | | | | DISCUSSION | Rancho Solano Golf Course (RSGC) opened in March 1990 and Paradise Valley Golf Course (PVGC) opened in June 1993. The City has been in contract with Kemper for golf course operations since 2002. The current term of the Agreement with Kemper is through December 31, 2022.
On March 19, 2020, the City closed both golf courses, RSGC and PVGC, due to State and County mandates to “Shelter at Home”. With the realization that each course would not be collecting revenues, staff met with Kemper for an immediate reduction of all operation expenses.
Staff and Kemper agreed to continue security and maintenance work during the closures, while focusing on minimizing operating expenses until the golf courses emerge from the closures. Below is the reduction required of Kemper:
• All salary employees to become hourly, with pay reduced by 25%.
• Tournament Director to be furloughed.
• Eight maintenance employees to be laid off.
• Kemper Management Fee to be reduced by 25%.
• Terminate all special projects
• Reduce Bookkeeper to 20 hours
• Reduce grounds operating expenses
Typical monthly operation budget for both courses is $190,000. With the implemented reductions, the adjusted operating budget is now $123,396 for both courses. Staff will continue to monitor the level of service required at the golf courses, as play begins to phase back to normal, and make the necessary adjustments to operation staffing and expenses. All reductions have occurred with exception to the management fee, which requires an amendment to Kemper’s contract. Kemper’s management fee is $31,715.75. This amendment will reduce the fee to $23,786.81 and Kemper has agreed to reduce the fee effective April 1, 2020. With the golf courses reopening on May 1st, this temporary management fee reduction was in effect for only one month.
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| | | | | | | | | FINANCIAL IMPACT | | This amended agreement will reduce the General Fund subsidies of the Golf Enterprise over the next few months. |
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| | | | | | | | | CITY COUNCIL WORKPLAN | Community Safety
| Community Infrastructure | Quality of Life | | Financial and Operational Sustainability | Economic Development | Travis Air Force Base |
| City Council Goal this item supports:
Financial and Operational Sustainability |
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| | | | | | | | | PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION | N/A
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| | | | | | | | | ALTERNATIVE ACTION | | The City Council could choose to not approve the amended agreement, or to modify terms of the agreement. |
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| | | | | | | | | STAFF CONTACT | Thomas Martian, Public Works Construction Manager
(707) 428-7478
tmartian@fairfield.ca.gov
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| | | | | | | | | COORDINATED WITH | City Attorney's Office
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| REVIEWERS: | | Reviewer | Action | Date | | Panganiban, Ryan | Approved | 5/5/2020 - 11:43 AM | | Kaushal, Paul | Approved | 5/5/2020 - 11:54 AM | | Alexander, Amber | Approved | 5/7/2020 - 3:38 PM | | Alexander, Amber | Approved | 5/8/2020 - 6:38 PM |
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