|April 9, 2013 - Regular Meeting|
Agenda Item #31
Amendment to the Pope Golf, LLC / Manatee County Franchise License Agreement
Contact and/or Presenter Information
Contact: Cynthia Gray - x6002
Presenter: Mike Whelan - Policies/Programs Coordinator - x6005
Authorization for the County Administrator or his designee to execute the Third Amendment to the Franchise License Agreement between Manatee County and Pope Golf, LLC., allowing Pope Golf, LLC to withhold up to an accumulated $434,640 from current and future monthly CIP payments in order to retain enough funds to pay for operating costs during the replacement of greens at both golf courses; Manatee Golf Course in 2013 and Buffalo Creek Golf Course in 2014.
- Manatee County Code of Law, Chapter 2-26, and per the delegation by the County Administrator, effective August 10, 2009.
- Article 22 of the original agreement which states..."This Agreement may be amended only by written document, properly authorized, executed, and delivered by both parties hereto."
- August 9, 2011 – The Manatee County Commission granted a golf course Franchise License Agreement to Pope Golf, LLC.
- October 1, 2011 – Pope Golf, LLC took over maintenance and management operations of all aspects of the Manatee County golf courses.
- This amendment will provide a different mechanism for accounting for the capital projects to replace the greens at both golf courses. The original agreement included some of the operating costs that will be incurred in the greens replacement under the category of capital projects. Because of the accounting definitions of what is allowed to be charged as capital projects, these costs could not be reimbursed to Pope Golf. This amendment would not increase the total cost that has been programmed in the agreement for these two projects or affect Pope Golf's required franchise payments to the County as non-project revenues.
- This has been reviewed by the Clerk of the Circuit Court's office. The Parks and Recreation Department is recommending approval from the Board of County Commissioners for the attached amendment to the Franchise License Agreement
- The Franchise License Agreement calls for Pope Golf, LLC to make monthly payments to the County of roughly 23% of Gross Revenues. A portion of those revenues are earmarked for CIP projects that are listed on Exhibit D of the Franchise License Agreement. The CIP List is reassessed and updated annually by County and Pope Golf staff.
- The scheduling of improvement projects is based on the estimated amount of funds accrued in the CIP account and the estimated effect the improvement will have on the golf course bottom line.
- The replacement of the greens at Manatee Golf Course will start in May 2013 and the replacement of the Buffalo Creek greens will start in May 2014. Replacement activity is scheduled during the summer months when the number of golfers using County courses declines.
- In estimating the cost for greens replacement, Pope Golf, LLC included golf course operating expenses during the +/- four months that the greens replacement will take place. In order to keep costs down and maintain golf course staff, without lay-offs, Pope Golf will use their staff to manage the grow-in of the new greens and pay them out of CIP funds. There will be little golf course generated income during this grow-in period.
- This amendment allows Pope Golf to pay their planned operating expenses directly, which will create economies for both the County and Pope Golf. Without this amendment, Pope Golf would be paying the County for operating expenses incurred during the grow-in period through their monthly earmarked CIP payments, and then apply for reimbursement of those same funds in order to pay those expenses.
- This will then allow Pope Golf, LLC to withhold an appropriate amount for County approved operational expenses incurred for these two CIP projects, from their current and future monthly CIP payments, up to a total of $434,640.
- Within 90 days of acceptance of completion for each of the greens replacement projects, licensee will provide County with documentation of actual operational expenses incurred. At that time, Licensee will either provide a payment to the County for any amount withheld in excess of approved operational expenses, or make final application for expenses incurred and needed to reconcile any document shortfall. Such final reconciliation and total project operational expenses are capped at a total amount of $434,640.
- Because a percentage of varying gross revenues on a monthly basis is earmarked for capital projects, an estimate based on past history was used to establish a baseline for determining how long a time period money's would need to be withheld to meet Pope's Operating Budget needs. Should the amount estimated to be needed be accumulated prior to that estimated time period, this amendment change in percentage withheld would immediately revert back to that listed in the original agreement.
- The cost breakdown for Greens Replacement at both Manatee County golf courses is as follows: Manatee Greens Replacement: $500,000 (Greens: $281,180 / Operating: $218,820). Buffalo Greens Replacement: $406,000 (Greens: $190,180 / Operating: $215,820). Total Greens Replacement: $906,000 (Greens: $471,360 / Operating: $434,640).
County Attorney Review
Formal Written Review (Opinion memo must be attached)
Explanation of Other
Instructions to Board Records
Originals: One to Board Records and one to Cynthia Gray, Parks and Recreation Department.
Cost and Funds Source Account Number and Name
Manatee Greens Replacement: $500,000 - #0010013502 / Buffalo Greens Replacement: $406,000 - #0010013503
Amount and Frequency of Recurring Costs
+/-$434,640 (Incrementally withheld from golf course earmarked CIP funds on a monthly basis, until satisfied or November 2014, whichever comes first.)
Attachment: Pope Golf Course Management and Maintenance Agreement.pdf
Attachment: Agreement Amendment 1.pdf
Attachment: 2nd Amendment-FranchiseLicenseAgree.pdf
Attachment: Pope Golf - Third Amendment to Franchise License Agreement.pdf
Attachment: RLS-13-039 Third Amend to Pope Golf Concession Agrmt.pdf