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HomeMy WebLinkAboutStaff Report 382-10City of Palo Alto City Manager's Report TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: COMMUNITY SERVICES DATE: OCTOBER 18,2010 CMR: 382:10 REPORT TYPE: ACTION SUBJECT: Approval of a General Services Agreement with ValleyCrest Golf Course Maintenance, Inc. in the Amount of $1,875,000 for Maintenance Services and Sale of Used City Golf Course Maintenance Equipment for $125,000; and Referral of Golf Course Financial Planning Issues to the Finance Committee EXECUTIVE SUMMARY Due to the ongoing fiscal challenges facing the City of Palo Alto's (City) General Fund the Community Services Department (CSD) recommended, and the Council approved, the exploration of "contracting out" Palo Alto Municipal Golf Course ("Golf Course") maintenance services during the 2011 budget process. The recommendation to explore private maintenance was also suggested in the findings of the Golf Course operational study conducted by Economic Research Associates (ERA) in 2008. The Executive Summary of the ERA study is attached as Attachment A. This report describes the Request For Proposal (RFP) process for Golf Course maintenance that has resulted in the recommendation of an award of contract to ValleyCrest Golf Course Maintenance, Inc. (ValleyCrest) to assume Golf Course maintenance responsibilities, beginning November 1, 2010 for a 30-month term ending on or soon after April 30, 2013 at a cost of $1,850,000 and a purchase of used golf course equipment at a cost of $125,000. ValleyCrest is recommended for an award of contract due to its extensive golf course maintenance services experience, low cost proposal relative to the public maintenance option, and its commitment to enhance the City'S existing Integrated Pest Management (IMP) program, customer service and, most importantly, to improve the quality of Golf Course maintenance services to ensure the Golf Course will remain competitive with neighboring golf courses. The proposed contract between the City and ValleyCrest is attached as Attachment B. The report also discuses related Golf Course issues that require the Council's direction and action in the near future. The current outstanding issues include: • The need for flood control project mitigation, not only for the physical disruption to the Golf Course but also for anticipated revenue losses from decreased play during levee reconstruction; and CMR 382:10 1 of8 • Consideration of the establishment of an infrastructure reserve for the Golf Course to pay for capital improvements from positive Golf Course cash flow to reduce the need for future capital improvement-related debt. Staff requests that these two items be referred to the Finance Committee for further discussion. Finally, the report also discusses the intent to make coterminous both the Golf Professional contract with Brad Lozares and the Pro-Shop lease agreement with Brad Lozares, so the agreements will terminate concurrently in the month of April 2013. Staff will make a recommendation to the Council before the end of calendar year 2010. RECOMMENDATION Staff recommends that the Council: 1. Authorize the City Manager or his designee to execute the General Services Agreement (Attachment B) in the amount of $1,850,000 with ValleyCrest for a term of 30 months beginning November 1, 2010 ending April 30, 2013, and the sale of used golf course maintenance equipment (Attachment C) to ValleyCrest for $125,000; and 2. Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with ValleyCrest Golf, Inc., for related, additional but unforeseen work that may develop during the project, the total value of which shall not exceed $185,000 (1 0% Contingency); and 3. Refer to the Finance Committee the question of how staff should propose fair and reasonable mitigation for anticipated lost revenues at the Golf Course during the San Francisquito Creek Joint Powers Authority's (JPA) flood control project. 4. Refer to the Finance Committee the question of whether staff should develop for the Council's approval a proposal to establish a new infrastructure reserve fund in the amount of the annual savings above the fully loaded operating costs of the Golf Course for the eventual replacement of anticipated infrastructure needs at the Palo Alto Municipal Golf Course. BACKGROUND The Golf Course was constructed in the mid-1950's on 184 acres of flat former salt-marsh and bay fill. The course was designed by noted golf course architect William R. Bell of Pasadena, California. The Golf Course was designed as an 18-hole facility with a par of 72. The Golf Course is a classic 18-hole championship course that measures over 6,800 yards from the back tees. The facility includes a large practice putting green, a three-building Eichler-designed­ clubhouse/golf shop complex and parking lot. In the mid 1970's, improvements were made to replace the clubhouse buildings. At that time, holes 3, 10, 11, & 18 were renovated under the direction of golf architect Robert Trent Jones, Jr. The Golf Course is a City of Palo Alto General Fund operation. All excess revenues or shortages are returned to the City'S General Fund. The Golf Course currently generates sufficient revenues to support debt service, direct and indirect expenses, and City cost plan charges. There is no reserve or replacement fund for the Golf Course, consequently; additional debt service is taken on by the Golf Course when new capital improvement needs arise. The debt service for the Certificates of Participation, which represents approximately $570,000 annually, will be fully retired in June 30, 2018. CMR 382:10 20f8 Presently, the City has entered into both a Golf Professional management agreement and a Pro Shop lease agreement with Brad Lozares (Lozares) for golf operations. As a result of Internal Revenue Services (IRS) debt issuance limitations, the management agreement and the lease for the building are separate contracts. The management agreement includes the following responsibilities: reservations; green fees collection; starting; and marshalling services. The lease agreement for the building includes: responsibility for managing golf cart rentals; the driving range; merchandise sales; and instruction services. The Lozares management agreement with the City for operating the Golf Course expires December 31, 2010. The lease agreement with Lozares for lease of the building expires in April 2013. The building lease also includes an . option to extend the term of the concession 10 additional years, if the option is exercised at the City's sole discretion. There is also a separate lease agreement with R&T Restaurant Corporation (R&T) for food and beverage services at the Golf Course. The R&T lease agreement for food and beverage operations expires April 20, 2018. Currently Golf Course turf and irrigation maintenance services are provided by CSD's Parks, Open Space and Golf Division. CSD oversees daily turf and ground maintenance operations that include coordination of services between the tenants and City maintenance staff in order to provide a seamless experience for visitors to the Golf Course. The Real Estate Division of the Administrative Services Department oversees tenant leases. The Club House and Pro Shop building maintenance (exterior) and janitorial services are provided by the City'S Public Works Department, Facilities Management Division. In 2007, the City Council authorized staff to proceed with an operational analysis of the Golf Course. The operational analysis was conducted by Economics Research Associates (ERA) (Attachment A), and provided information on the Bay Area golf market and conditions of the Golf Course facility; and the current and alternative operating models available for the Golf Course. The ERA study was presented to the City Council on November 17, 2008 (CMR: 446:08; Attachment D). The study concluded that, despite a Bay Area wide decline in golf play, the Golf Course performance has been relatively strong when compared with similar municipal facilities in the market area. The recommendations to sustain the long-term viability of the golf course program from the staff report are summarized below: 1. Retain a golf course design consultant to work with the JPA and the City's staffs to design an environmentally friendly flood control project that will balance flood control and recreational use solutions and also benefit the Golf Course. 2. Recalculate the Cost Plan allocation for the Golf Course to a more traditional golf course operation allocation. This would allow for excess funds to be set aside to establish a replacement reserve to fund ongoing minor capital improvement andlor more intensive maintenance. 3. Align the two tenant leases and management contract so they expire concurrently. This would allow consideration of other, potentially more effective and efficient, operating options and a smoother transition of operation, should that be deemed advantageous in the future. CMR 382:10 30[8 4. Commit to a plan of cost-neutral capital improvements to ensure the Golf Course remains competitive. That is, proceed with improvements that are economically justified by increased net operating income stemming from the improvements. 5. Direct Community Services and other relevant City staff to work in cooperation with the labor union to further evaluate the advantages and disadvantages of private versus public maintenance. Since the 2008 Golf Course study was presented to Council, the Golf Course has continued to experience a decline in annual rounds of play from 74,000 in 2008, to· 72,000 in 2009, and to 68,500 in 2010. In order to keep the Golf Course financially viable budget cuts were made in 2009 and 2010 that continued to erode the resources available for the City-operated maintenance program. Although the Golf Course managed to end FY 2010 with net revenues of $77,000, this was achieved with a 40% reduction in staff, which is less than the level of staff needed to provide comprehensive quality Golf Course maintenance. As the FY 2011 budget process began, it became clear the City needed to make significant structural budget reductions to the General Fund with an anticipated deficit of $7.3 million. As CSD considered alternatives for budget reductions, . the "contracting out" of Golf Course maintenance services was recommended, not only for the potential cost savings, but also to return maintenance levels to a standard that allows the Golf Course to remain competitive with the objective of increasing golf rounds, which has been compromised through numerous years of program budget cuts. Staff recommends the approval of a Golf Course maintenance services agreement with ValleyCrest and replacing in-house maintenance staff with contract personnel. Below, staff will provide information on the process that was used to arrive at this recommendation and will discuss the progress and current thinking on the other recommendations listed above, stemming from the ERA Golf Course study. DISCUSSION The process for exploring "contract out" Golf Course maintenance services began in spring 2010 by notifying SEIU of the City's intent to explore contract maintenance services for the Golf Course. The City and SEIU engaged ina discussion about the City'S financial challenges and rationale for the need to consider an alternative service delivery for Golf Course maintenance. Although some ideas were discussed to mitigate the need for contracting out Golf Course maintenance, such as a regional golf course maintenance agreement between several neighboring cities, this suggestion was deemed by the City to be financially infeasible. CSD staff prepared a detailed scope of service, with input from several other City departments including Public Works, Utilities and Administrative Services (ASD). The Request for Proposal (RFP) was released in June. A mandatory pre-solicitation meeting was held at the Golf Course which included a tour of the Golf Course that allow all interested parties to walk the Golf Course and ask specific questions during the hole-by-hole walk. Five potential bidders attended the pre­ bid meeting. Four proposals were received in August when the responses to the RFP were due. CSD assembled an evaluation panel to evaluate the proposals. The eight member panel included members of the Golf Advisory Committee, CSD Director, Palo Alto's Golf Course CMR382:10 40f8 Superintendent, Recreation Division Manager and the Parks, Open Space and Golf Division Manager. The stated RFP criteria used to evaluate the proposals were: A. Quality and completeness of proposal; B. Qualifications & experience of proposer in providing Golf Course Maintenance Services as stated in this RFP; including experience and qualifications of project manager & key staff to be assigned to project; C. Similar experience and expertise in the type of work required, with the City, or with other municipal golf courses or private golf courses; D. Demonstrated understanding of the scope of services requested, timeframes, scheduling ability, ability to provide back up or follow up services, if needed; E. References/Financial stability of Firm; and F. The Cost to the City. Of the four proposals, based on the RFP criteria above, two were determined by the evaluation panel as more responsive to the RFP. The proposals were submitted by Lozares and ValleyCrest. Both companies were invited to interview with the panel; the interviews occurred in September. At the conclusion of the interviews each company was asked to provide a Best and Final proposal with an emphasis on reducing overall costs with minimal or no impact to the scope of services defined in the RFP. The "Best and Final" offers were received in mid September. Concurrently, reference checks were made and, where feasible, site visits were conducted to evaluate maintenance levels at other golf courses maintained by the firms. At the conclusion of the RFP process ValleyCrest was unanimously determined by the evaluation panel to have provided the most complete responsive proposal and thereby it recommended ValleyCrest as the party to provide private Golf Course maintenance services to the City. The factors that weighed most heavily on the ValleyCrest recommendation was the depth of experience exhibited by ValleyCrest and the proposed overall cost savings, which is approximately $300,000 below the Lozares' "Best and Final" proposal, and" approximately $500,000 below what it would cost the City to continue Golf Course maintenance services in­ house over the 30-month term of the proposed contract. Furthermore, the ValleyCrest management team displayed a commitment to customer service and high quality maintenance that the City desires for the Golf Course. ValleyCrest is very interested in working closely with the City'S water quality control program, environmental goals and the IMP program. ValleyCrest brings a wealth of knowledge and expertise in horticulture and agronomy that staff believe will serve the City well as we continue push the boundaries toward excellence in Golf Course maintenance, sustainability and environmental conservation. ValleyCrest Golf Course Maintenance is one of five operating divisions of the ValleyCrest Holding Co. and Subsidiaries. It is the country's largest horticulture maintenance, golf course maintenance and construction company. ValleyCrest currently maintains over fifty golf CMR 382:10 50f8 properties located in California, Texas, Florida, Georgia, North Carolina, South Carolina, Pennsylvania, New Jersey, Massachusetts and Michigan. Furthermore, ValleyCrest is open and enthusiastic to providing displaced City Golf Course maintenance staff with an opportunity to join the ValleyCrest Company. Staff was very encouraged to hear this and will work with ValleyCrest to connect displaced employees with ValleyCrest. Of the seven regular staff affected by contracting out Golf Course maintenance four have already made the decision to retire, one has found other employment, and one has bumping rights per the SEIU labor agreement with the City and will move to the Parks, Open Space and Golf division of CSD, The remaining staff member will be laid-off as of November 1, 2010; however, staff is hopeful that a vacancy may emerge in the Parks Open Space and Golf division over the next month that will provide an opportunity for a transition. As CSD staff will need to maintain the Golf Course until the effective date of the transition to ValleyCrest, the proposed negotiated sale of City-owned Golf Course maintenance equipment to ValleyCrest is preferred for the effective and efficient transition from public to private maintenance. The City'S Public Works fleet management staff valued the existing Golf Course equipment, staff then negotiated a fair and reasonable price with ValleyCrest, which has agreed to pay $125,000 for all major equipment. As described in the contract (Attachment B), ValleyCrest will occupy the Golf Course maintenance yard and facilities therein to deliver the Golf Course maintenance services. The City Attorney's office, ASD Budget and Purchasing Divisions together with Risk Management provided support in drafting the contract, including review and approval of the occupancy terms and insurance requirements for use·ofthe City facilities and property. A third party furniture, nxtures and equipment consultant will be retained by the City to determine the fair market value (FMV) of all other minor items (tools, supplies and materials) that remain at the Golf Course maintenance yard. ValleyCrest has agreed to pay for the remaining items based on this FMV independent furniture, fixtures and equipment consultant's valuation. This will be completed on or before November 1,2010. Discussion of Related Golf Course Issues The topics below relate to the staff recommendations from the 2008 ERA Golf Course study, summarized on page 3 of this staff report and in CMR: 446:08 Operational Analysis of the City of Palo Alto Municipal Golf Course (Attachment D) The action items before Council at this time is the recommendation refer items 1 and 2 below to the Finance Committee for further discussion. 1. San Francisquito Creek Joint Powers Authority -Flood Control The Council has requested that the JP A retain a golf course design consultant to work with the Joint Powers Authority and City staff to design an environmentally friendly flood control project that will balance flood control and recreational use solutions and that will also benefit the Golf Course. The JPA has been very supportive of the City's need for fair and reasonable mitigation measures to the Golf Course for levee improvements; the impact to the Golf Course will include the need to re-design 4 to 6 holes due to levee realignment and encroachment onto the Golf Course. The JP A hopes to begin work in summer 2011, but the likelihood of this occurring is CMR 382:10 60f8 unknown at this time. The impact and related mitigation to the physical impacts to the Golf Course is moving in a positive direction and staff is confident that a workable win/win design will be developed. However, the loss of City revenue during the levee reconstruction is difficult to quantify. Staff does not have a specific recommendation to mitigate expected lost revenues at this time but does want to bring this issue to the Council's attention and ask that this issue be referred to the Finance Committee. A possible mitigation to consider is to seek additional and more comprehensive Golf Course design and planning beyond mitigating for the golf holes impacted by levee realignment. For a point of reference, during the major capital improvements at the Golf Course in 1998-99 the City experienced a 25% reduction in annual play; such a reduction today would translate to $500,000 annually in lost revenues. Staff is working with the JP A to explore appropriate mitigations as the timeline and levee design work progresses and look forward to discussing options with the Finance Committee. 2. Golf Course Infrastructure Reserve Regarding the revision of the Cost Plan allocation for the Golf Course to a more traditional golf course operation allocation will occur with the reduction of 7 Full Time Equivalent (FTE) to .45 FTE staff previously dedicated to the in-house Golf Course maintenance operation, as city Cost Plan is allocated based on FTE. The result of the Cost Plan revision, coupled with the lower overall cost of private Golf Course maintenance, will be a positive cash flow for the Golf Course, if annual rounds played hold steady at 68,000 or more. It is recommended that revenues above and beyond the cost of operating the Golf Course be considered for a infrastructure reserve for ongoing capital improvement needs for the Golf Course. This recommendation aims to reduce the need for debt when the 1998 bond debt of $570,000 annually expires in 2018. The Golf Course Advisory Committee believes creating an infrastructure reserve, paid for by the golfing community, as a very important step for the long-term financial health of the Golf Course. Staff recommends that this item also be referred to the Finance Committee for further discussion Other related items for that staff would like Council to be aware of are: 3. Aligning Golf Course Contracts -Food and Beverage, Professional Services, Golf Course Maintenance and Pro Shop The recommendation to align the two tenant leases and management contract at the Golf Course, so they will expire concurrently, remains a staff recommendation. Specifically alignment of contracts would allow consideration of other, potentially more effective and efficient, operating options and a smoother transition of operation, should that be deemed advantageous in the future. The ValleyCrest maintenance contract is strategically aligned with the existing lease agreement with Brad Lozares for operating the Pro-Shop. Moreover, staff intends to bring an extension of the existing management agreement with Lozares to the Council before the end of 2010 to align the management agreement with the Pro-Shop Lease and the proposed ValleyCrest maintenance agreement expiration date. This would result in 3 of the 4 Golf Course contracts to expire at the same time, April 2013. The lease' with R&T Restaurant Corporation, who operates the Bay Cafe, has a term that expires in 2018; options for re-aligning this lease with the other three Golf Course contracts is also being considered. 4. Capital Improvement Lastly regarding the recommendation to commit to a plan of cost neutral capital improvements, to ensure the Golf Course remains competitive, the only CIP improvements recommended at this CMR 382:10 70f8 time are those related to the improvements derived at through cooperation with the JP A to design an environmentally friendly flood control project that will balance flood control with long-term financial viability and improvements to the Golf Course. RESOURCE IMPACT The cost of the proposed ValleyCrest contract for Golf Course maintenance is $1,850,000 for a term of 30-months and a contingency of $185,000. The CSD budget has sufficient funds to address the contract and 10% contingency. In addition staff has negotiated a fair and reasonable price »,ith ValleyCrest for all major City-owned Golf Course maintenance equipment on-site for $125,000. The total cost savings to the City for entering into the ValleyCrest contract, as compared to the cost of the City to provide Golf Course maintenance, is expected to be approximately $500,000 over the term of the proposed contract. . ENVIRONMENTAL REVIEW No environmental review is needed at this time. However, should a Golf Course capital improvement project be considered at a future date all appropriate environmental review and consideration will take place prior to approval. ATTACHMENTS Attachment A Attachment B Attachment C Attachment D Economics Research Associates Golf Course Operational Study - Executive Summary General Services Agreement between the City and ValleyCrest List of used City Golf Course maintenance equipment CMR: 446:08 Operational Analysis of the City Palo Alto Municipal Golf Course PREPAREDBY: ____________ ~ __ ~ __ _=~=_ __ ~~ ____________ ___ ROBDEGEUS Division Manager, Recreation Services DEPARTMENT HEAD APPROVAL: --~--=::.=?4L-"-~~~--~"----------------~S ' Director, Community Services Department CITY MANAGER APPROV AL: --_fL-I-----~f__-_I_,I__----- CMR 382:10 80f8 Attachment A Economics Research Associates Palo Alto Muni Operational Analysis Executive Summary The City of Palo Alto provides golf services through its municipal golf course -Palo Alto Muni. Presently, the golf course operation and foodoand beverage functions are the responsibility of private sector providers, while the City maintains the golf course. • The Bay Area golf market, like nearly every major metropolitan market in the country, has experienced very soft market conditions over the past six to seven years. The Bay Area public golf market has been more severely affected and recovered more slowly than most markets. • Play at Palo Alto Muni has declined from about 90,000 rounds in 2000 to 76,240 rounds in 2007, a decline of 16 percent over the 2000-2007 period. By comparison, the average play per public access course in the Bay Area has declined about 12 percent since 2000, with play at the more relevant competitive set of public access courses down about 17 percent. • Conditions at most Bay Area public courses have stabilized and there has been modest improvement in play levels over the past two years. Over the next five-to ten-year period, the regional golf market is expected to continue to gradually improve as the "baby boom" population ages in-place and limited expansion of the inventory of public golf courses occurs. • Annual play at competitive Bay Area courses ranges from 57,000 to 87,000 rounds, averaging 70,700 rounds. Palo Alto Muni, at 76,000 rounds, ranks third among the 15 competitive courses surveyed. • Greens fees at Palo Alto Muni of $36 weekdays and $47 weekends, excluding cart, are near the top of the range among competitive Bay Area courses, and are deemed at, or approaching, market levels. • Palo Alto Muni revenue performance generally is favorable: The average greens fee is $30.40 which compares with an average of $28.89 for competitive courses over a range of $19.31 to $37.92 per round. Cart revenue per round is $4.08, lowest among competitive courses due to very low cart utilization which stems primarily from the limited course topography and short distance between greens and tees. 10990 Wilshire Boulevard Suite 1500 los Angeles, CA 90024 310.477.9585 FAX 310.478.1950 www.econres.com Los Angeles San Francisco San Diego Chicago Washington DC New York London Range revenue averages $13,600 per tee per year for the 26-tee facility, ranking the facility among the top of the competitive set of courses. Merch~ndise sales at Brad Lozares Golf Shop are at a very high level, ranking Palo Alto Muni as one of the top golf retail operations at municipal courses in the country. Given the limited capacity of the clubhouse to accommodate special events, food and beverage revenue is consistent with the performance at competitive facilities. • Approximately 20 percent of Palo Alto Muni golfers reside within the City, with the majority of others residing in other South Bay communities. • A survey of golfers at Palo Alto Muni revealed a high satisfaction level in terms of the tee time reservation system, tee time reliability, marshalling, and pace of play. Nearly 90 percent of golfers deemed weekday and 73 percent weekend greens fees acceptable. • A very high percentage of golfers rate golf operations (instruction, customer service, merchandise) "excellent" or "good," while only about one-half rated food and beverage facilities/services at this level. • The majority of golfers rated golf course conditions as "fair" or "poor." • Of those respondents who stated that Palo Alto was not their primary course, primary reasons were: Course quality/play experience: 41.1 % Location: 23.4% Fees: 12.5% Tee time availability: 6.8% Clearly, course quality and play experience, and not fee levels or tee time availability, are the primary reasons why most people choose another facility over Palo Alto Muni as their primary course. • About 40 percent of the golf course master plan improvements were completed in the 1998-1999 course renovation. In light of the cost of completing the master plan improvements, and the threat of major disruption/impacts related to the San Francisco Economics Research Associates Project No. 17383 Page 2 Creek Flood Control project, it is prudent to consider limited targeted improvements to the course. • The highest priority capital improvements needed for the golf course to remain competitive in the marketplace are summarized below: Component Golf Course Driving Range Maintenance Yard Clubhouse Soft Costs/Contingency Total Amount ($000) $ 870 600 100 ~ $1,884 • The $870,000 allowance for the golf course improvements addresses primarily problems with original greens and bunkers which require rebuilding. Completion of the full master plan improvements would likely cost $4 to $5 million, or more, and is not considered to be cost-effective at this time. At least in the near-to mid-term, it would appear to be more appropriate to intensify golf course maintenance -including resumption of the fairway sanding program -than investing in extraordinary golf course improvements. • Maintenance staffing levels at Palo Alto Muni compared with Bay Area competitive facilities is summarized as follows: Palo Alto Muni Comparative Courses Range Average Course Maintenance Employees Full Part Time Total Time (FTE) (FTE) 9 10-15 12 0-3 2 10 12-17 14 • Excluding irrigation, annual maintenance costs at Palo Alto Muni are compared with benchmark facilities, as follows: Economics Research Associates Project No. 17383 Page 3 Palo Alto Muni Public Provider Range (5 courses) Average Private Provider Range (10 courses) Average Annual Maintenance Expenses ($000) $1,195 $1,033-1,336 $1,171 $ 474-1,105 $ 778 • As with most public agencies, the City of Palo Alto assesses a charge to the golf course for Citywide overhead services such as human resources, legal, accounting, budget, management, purchasing, insurance (the City is self-insured), and similar functions. Referenced as the Cost Plan, currently the assessment totals about $380,000 per year. • Clearly, there is a value of the overhead services provided by the City. While it is difficult to precisely determine the value of these overhead services, an estimate based on assessing the cost of these services if provided by a typical owner/operator can be offered: Overhead Service On-Site Accounting Audit Insurance (liability, general) Contract Management Other Services* Total Annual Amount $ 50,000 25,000 40,000 35,000 75000 $225,000 *Represents portion of typical professional management fee related to providing human resources, budget, cash management, accounting and reporting systems, and other required overhead services. • Net income accruing to the City from golf operations for FY 2007 is shown after deducting an allowance for the Cost Plan: Economics Research Associates Project No. 17383 Page4 City Net Operating Income Less: Debt Service Cost Plan Adjusted Net Income FY 2007 Net Income ($000) As Reported Adjusted $992 $992 ( 558) ( 558) ( 380) ( 225) $ 54 $209 • Under the current operating structure, and assuming completion of the limited capital improvement program, the golf course is expected to generate $950,000 per year in net operating income at a stabilized play level, prior to debt service ($559,000 existing plus $145,000 related to financing proposed capital improvements) and the City's Cost Plan (overhead) allocation. This compares with about $900,000 reported for 2007 (after deducting an allowance for capital improvement replacement reserves). Thousands of 2008 Constant Dollars Projected at Stabilized Play Actual Cost Adjusted 2007 Plan Cost Plan Revenue $2,851 $3,148 $3,148 Less: Operating Expenses' 1 859 2098 2098 Net Operating Income $ 992 $1,050 $1,050 Less: Existing Debt Service $ 558 $ 558 $ 558 New Debt Service 145 145 Cost Plan 380 380 225 Replacement Reserve ~ ---1Ql -1Q1 Subtotal $1.033 .$.LJJH $1,029 Net Cash Flow ($ 41 ) ($ 134) $ 21 While net cash flow is projected to decline slightly following the completion of capital improvements, a more precipitous decline would be expected in the absence of such a program as the course becomes less competitive. • The current golf operations agreement is a hybrid structure which is slightly favorable to the concessionaire. Hypothetically, the golf operations function could be converted to a more traditional facility lease (concession agreement) or fee-for-service management agreement. If the City continues to maintain the golf course, nominal improvement in net cash flow would result from a change in the operating structure. • The differential between City and private providers maintenance function of the golf course is estimated at $250,000 to $300,000 per year. Thus, any form of Economics Research Associates Project No. 17383 Page 5 management, with private maintenance, would likely increase City net income by this amount of cost savings. • The City funded the $7 million 1998-1999 capital improvements with a tax-exempt bond issue. To maintain the tax-exempt status of the bonds, the IRS requires compliance with several provisions including the form and structure of management. These provisions, in large part, have influenced the current structure. Altering the operating structure to a traditional concessionaire agreement or leasing the facility likely would require modification of the current debt structure. Economics Research Associates Project No. 17383 Page 6 Attachment B CITY OF PALO ALTO CONTRACT NO. Cll136681 GENERAL SERVICES AGREEMENT THIS AGREEMENT made and entered into on the 1st day of NOVEMBER, 2010, by and between the CITY OF PALO ALTO, a California Chartered Municipal Corporation ("CITY"), and V ALLEY CREST GOLF COURSE MAINTENANCE, INC. , a California Corporation, located at 24151 Ventura Blvd, Calabasas, Ca 91302, Telephone Number: 818-737-3110 ("CONTRACTOR"). In consideration of their mutual covenants, the parties hereto agree as follows: 1. SERVICES. CONTRACTOR shall provide or furnish the services ("Services") described in the Scope of Services, attached as Exhibit A. 2. EXHIBITS. The following exhibits are attached to and made a part of this Agreement: 1:8:1 "A" -Scope of Services 1:8:1 "B" -Schedule of Performance 1:8:1 "c" -Compensation 1:8:1 "D" -Insurance Requirements 1:8:1 "E" -Performance and/or Payment Bond 1:8:1 "F" -Liquidated Damages CONTRACT IS NOT COMPLETE UNLESS ALL EXHIBITS ARE ATTACHED. 3. TERM. The term of this Agreement is from November 1,2010 to April 30, 2013 inclusive, subject to the provisions of subsection 3.(b) and Section Q and V of the General Terms and Conditions. 4. SCHEDULE OF PERFORMANCE. CONTRACTOR shall complete the Services within the term of this Agreement in a reasonably prompt and timely manner based upon the circumstances and direction communicated to CONTRACTOR, and if applicable, in accordance with the schedule set forth in the Schedule of Performance, attached as Exhibit B. Time is of the essence in this Agreement. 5. COMPENSATION FOR ORIGINAL TERM. CITY ~hall pay and CONTRACTOR agrees to accept as not to exceed compensation for the full performance of the Services and reimbursable expenses, if any: The total maximum lump sum compensation of dollars ($ );OR The sum of amount of dollars ($ dollars ($ ) per hour, not to exceed a total maximum compensation );OR o A sum calculated in accordance with the fee schedule set forth in Exhibit C, not to exceed a total maximum compensation amount of One Million Eight Hundred and Fifty Thousand Dollars ($1,850,000.00), paya.ble over the3Q:;monthtel'l1i,{)fthis'Agreemerit;"'tor:iSefYltesi'peffolrried; as follows: CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY. Tritheeventthilicurrent Golf COul'secoJifiguratiori~; are . changed or : re..:desigrted;a$.(j.,festilt'ofClTY, Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII 136681 Contract Draft Document (2).doc B, The City has set aside the sum of ()ri¢~fhind£et'tEighiYFiVe:Th~ousfujah)61i~s($i8510Dd.nn) for Additional Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY's request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRACTOR's proposed maximum compensation, including reimburs<tble expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a negotiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set forth above for Additional Services. Payment for Additional Services is subject to all requirements and restrictions in this Agreement. 6. COMPENSATION DURING ADDITIONAL TERMS. o CONTRACTOR'S compensation rates for each additional term shall be the same as the original term; OR B CONTRACTOR's compensation rates shall be adjusted effective on the commencement of each Additional Term. The lump sum compensation amount, hourly rates, or fees, whichever is applicable as set forth in section 5 above, shall be adjusted by a percentage equal to the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco­ Oakland-San Jose area, published by the United States Department of Labor Statistics (CPI) which is published most immediately preceding the commencement of the applicable Additional Term, which shall be compared with the CPI published most immediately preceding the commencement date of the then expiring term. Notwithstanding the foregoing, in no event shall CONTRACTOR's compensation rates be increased by an amount exceeding five percent of the rates effective during the immediately preceding term. Any adjustment to CONTRACTOR's compensation rates shall be reflected in a written amendment to this Agreement. 7. INVOICING. Send all invoices to the CITY, Attention: Project Manager. The Project Manager is: Joseph Vallaire, Golf Course Superintendent, Community Services Dept., Parks and Golf Division, Telephone: 650-329-2175. Invoices shall be submitted in arrears for Services performed. Invoices shall not be submitted more frequently than monthly. Invoices shall provide a detailed statement of Services performed during the invoice period and are subject to verification by CITY. CITY shall pay the undisputed amount of invoices within 30 days of receipt. GENERAL TERMS AND CONDITIONS A. ACCEPTANCE. CONTRACTOR accepts and agrees to all terms and conditions of this Agreement. This Agreement includes and is limited to the terms and conditions set forth in sections 1 through 6 above, these general terms and conditions and the attached exhibits. B. QUALIFICATIONS. CONTRACTOR represents and warrants that it has the expertise and qualifications to complete the services described in Section 1 of this Agreement, entitled "SERVICES," and that every individual charged with the performance of the services under this Agreement has sufficient skill and experience and is duly licensed or certified, to the extent such licensing or certification is required by law, to perform the Services. CITY expressly relies on CONTRACTOR's representations regarding its skills, knowledge, and certifications. CONTRACTOR shall perform all work in accordance with generally accepted business practices and performance standards of the industry, including all federal, state, and local operation and safety regulations. C. INDEPENDENT CONTRACTOR. It is understood and agreed that in the performance of this Agreement, CONTRACTOR and any person employed by CONTRACTOR shall at all times be considered 2 Rev. January JI, 2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc an independent CONTRACTOR and not an agent or employee of CITY. CONTRACTOR shall be responsible for employing or engaging all persons necessary to complete the work required under this Agreement. D. SUBCONTRACTORS. CONTRACTOR may not use subcontractors to perform any Services under this Agreement unless CONTRACTOR obtains prior written consent of CITY. CONTRACTOR shall be solely responsible for directing the work of approved subcontractors and for any compensation due to subcontractors. E. T AXES AND CHARGES. CONTRACTOR shall be responsible for payment of all taxes, fees, contributions or charges applicable to the conduct of CONTRACTOR's business. F. COMPLIANCE WITH LAWS. CONTRACTOR shall in the performance of the Services comply with all applicable federal, state and local laws, ordinances, regulations, and orders. G. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONTRACTOR shall, at its sole expense, repair in kind, or as the City Manager or designee shall direct, any damage to public or private property that occurs in connection with CONTRACTOR's performance of the Services, including the storage facility located on site, made available to Cdntractor by CITY for use during Tertnof Agreemeht at no Cost. CONTRACTOR shall maintain the building to a minimum of the same condition as when CONTRACTOR took occupancy. CITY may decline to approve and may withhold payment in whole or in part to such extent as may be necessary to protect CITY from loss because of defective work not remedied or other damage to the CITY occurring in connection with CONTRACTOR's performance of the Services. CITY shall submit written documentation in support of such withholding upon CONTRACTOR's request. When the grounds described above are removed, payment shall be made for amounts withheld because of them. H. WARRANTIES. CONTRACTOR expressly warrants that all services provided under this Agreement shall be performed in a professional and workmanlike manner in accordance with generally accepted business practices and performance standards of the industry and the requirements of this Agreement. CONTRACTOR expressly warrants that all materials, goods and equipment provided by CONTRACTOR under this Agreement shall be fit for the particular purpose intended, shall be free from defects, and shall conform to the requirements of this Agreement. CONTRACTOR agrees to promptly replace or correct any material or service not in compliance with these warranties, including incomplete, inaccurate, or defective material or service, at no further cost to CITY. The warranties set forth in this section shall be in effect for a period of one year from completion of the Services and shall survive the completion of the Services or termination of this Agreement. I. MONITORING OF SERVICES. CITY may monitor the Services performed under this Agreement to determine whether CONTRACTOR's work is completed in a satisfactory manner and complies with the provisions of this Agreement. J. CITY'S PROPERTY. Any reports, information, data or other material (including copyright interests) developed, collected, assembled, prepared, or caused to be prepared under this Agreement will become the property of CITY without restriction or limitation upon their use and will not be made available to any individual or organization by CONTRACTOR or its subcontractors, if any, without the prior written approval of the City Manager. K. AUDITS. CONTRACTOR agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for three (3) years from the date of final payment, CONTRACTOR's records pertaining to matters covered by this Agreement. CONTRACTOR agrees to maintain accurate books and records in accordance with generally accepted accounting principles for at least three (3) following the terms of this Agreement. L. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights under this Agreement. M. INSURANCE. CONTRACTOR, at its sole cost, shall purchase and maintain in full force during the term of this Agreement, the insurance coverage described in Exhibit D. Insurance must be provided by companies with a Best's Key rating of A-:VII or higher and which are otherwise acceptable to the City'S 3 Rev. January 11,2010 C:\DoclIments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI I 136681 Contract Draft Document (2).doc Risk Manager. The City's Risk Manager must approve deductibles and self-insured retentions. In addition, all policies, endorsements, certificates and/or binders are subject to approval by the Risk Manager as to form and content. CONTRACTOR shall obtain a policy endorsement naming the City of Palo Alto as an additional insured under any general liability or automobile policy. CONTRACTOR shall obtain an endorsement stating that the insurance is primary coverage and will not be canceled or materially reduced in coverage or limits until after providing 30 days prior written notice of the cancellation or modification to the City's Risk Manager. CONTRACTOR shall provide certificates of such policies or other evidence of coverage satisfactory to CITY's Risk Manager, together with the required endorsements and evidence of payment of premiums, to CITY concurrently with the execution of this Agreement and shall throughout the term of this Agreement provide current certificates evidencing the required insurance coverages and endorsements to the CITY's Risk Manager. CONTRACTOR shall include all subcontractors as insured under its policies or shall obtain and provide to CITY separate certificates and endorsements for each subcontractor that meet all the requirements of this section. The procuring of such required policies of insurance shall not operate to limit CONTRACTOR's liability or obligation to indemnify CITY under this Agreement. N. HOLD HARMLESS. To the fullest extent permitted by law and without limitation by the provisions of section M relating to insurance, CONTRACTOR shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from and against any and all demands, claims, injuries, losses, or liabilities of any nature, including death or injury to any person, property damage or any other loss and including without limitation all damages, penalties, fines and judgments, associated investigation and administrative expenses and defense costs, including, but not limited to reasonable attorney's fees, courts costs and costs of alternative dispute resolution), arising out of, or resulting in any way from or in connection with the performance of this Agreement. The CONTRACTOR's obligations under this Section apply regardless of whether or not a liability is caused or contributed to by any negligent (passive or active) act or omission of CITY, except that the CONTRACTOR shall not be obligated to indemnify for liability arising from the sole negligence or willful misconduct of the CITY. The acceptance of the Services by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section survive the completion of the Services or termination of this Contract. O. NON-DISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONTRACTOR certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONTRACTOR acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. P. WORKERS' COMPENSATION. CONTRACTOR, by executing this Agreement, certifies that it is aware of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and certifies that it will comply with such provisions, as applicable, before commencing and during the performance of the Services. Q. TERMINATION. The City Manager may terminate this Agreement without cause by giving ten (10) days' prior written notice thereof to CONTRACTOR. If CONTRACTOR fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, the City Manager may terminate this Agreement immediately upon written notice of termination. Upon receipt of such notice of termination, CONTRACTOR shall immediately discontinue performance. CITY, CITY shall pay CONTRACTOR for services satisfactorily performed up to the effective date of termination. If the termination if for cause, CITY may deduct from such payment the amount of actual damage, if any, sustained by CITY due to Contractor's failure to perform its material obligations under this Agreement. Upon termination, CONTRACTOR shall immediately deliver to the City Manager any and all copies of studies, sketches, drawings, computations, and other material or products, whether or not completed, prepared by CONTRACTOR or given to CONTRACTOR, in connection with this Agreement. Such materials shall become the property of CITY. R. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written 4 Rev. January 11,2010 C:\Docliments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc consent of the CITY. No amendments, changes or variations of any kind are authorized without the written consent of the CITY. S. CONFLICT OF INTEREST. In accepting this Agreement, CONTRACTOR covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of this Contract. CONTRACTOR further covenants that, in the performance of this Contract, it will not employ any person having such an interest. CONTRACTOR certifies that no City Officer, employee, or authorized representative has any financial interest in the business of CONTRACTOR and that no person associated with contractor has any interest, direct or indirect, which could conflict with the faithful performance of this Contract. CONTRACTOR agrees to advise CITY if any conflict arises. T. GOVERNING LAW. This contract shall be governed and interpreted by the laws of the State of California. U. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the entire agreement between the parties with respect to the services that may be the subject of this Agreement. Any variance in the exhibits does not affect the validity of the Agreement and the Agreement itself controls over any conflicting provisions in the exhibits. This Agreement supersedes all prior agreements, representations, statements, negotiations and undertakings whether oral or written. V. NON-APPROPRIA TION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Contract are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Contract. W. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONTRACTOR shall comply with the City's Environmentally Preferred Purchasing policies which are available at the City'S Purchasing Department which are incorporated by reference and may be amended from time to time. CONTRACTOR shall comply with waste reduction, reuse, recycling and disposal requirements of the City'S Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Contractor shall comply with the following zero waste requirements: • All printed materials provided by Contractor to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Contractor on behalf of the City shall be purchased in accordance with the City'S Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Contractor, at no additional cost to the City, for reuse or recycling. Contractor shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. X. AUTHORITY. The individual(s) executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. Y. CONTRACT TERMS: All unchecked boxes do not apply to this Contract. IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. 5 Rev. January 11,2010 C\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI1136681 Contract Draft Document (2).doc CITY OF PALO ALTO City Manager or Designee (Required on contracts $85,000 and over) Approved as to form: Senior Assistant City Attorney V ALLEY CREST GOLF COURSE MAINTENANCE, INC. By ____________________________ ___ Name -------------------------------- Title ---------------------------------- Telephone: ______ ..,..-__ ---, ______________ _ 6 Rev. January II, 2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI I 136681 Contract Draft Document (2).doc EXHIBIT A SCOPE OF SERVICES SPECIFICATIONS & REQUIREMENTS Contract No. C11136681 GOLF COURSE MAINTENANCE PROJECT Specifications for the services of Golf Course Maintenance of The City of Palo Alto Municipal Golf Course: I. SCOPE OF WORK-Golf Course Maintenance CONTRACTOR shall provide the highest quality of Golf Course maintenance services and materials, The Contractor agrees to provide the highest quality commercially accepted methods, procedures and scientific controls for Golf Course maintenance. "Scientific Controls" is understood to mean practices based upon recommendations of the University of California, The U.S. Forest Service, or similarly qualified experts; recommendations in University of California Cooperative Extension Publications, Consumer Products Safety Commission Playground Guidelines and information in standard landscape industry references; This shall include the use of proper knowledge, skills, materials' and equipment of a timely basis to maintain all areas in a clean, safe, healthy, and aesthetically acceptable manner during the entire term of this contract. The Contractor agrees to be continuously alert in locating and defining problems and agrees to exercise prompt and proper corrective action. Action times will be prioritized, and low priority items will be given a time line for corrections. A PRELIMINARY WRITTEN REPORT SHALL BE SUBMITTED FOR MAJOR CORRECTIVE PROBLEMS NOT COVERED IN THE CONTRACT. The Contractor shall communicate to the City ALL hazards that are seen while on site. II. GOLF COURSE MAINTENANCE SPECIFICATIONS 1.0 GENERAL REQUIREMENTS The following Special Conditions and Specifications apply to the Palo Alto Golf Course, City of Palo Alto, CA. The Contractor shall furnish all labor, equipment, materials, tools, services and special skills required to perform the landscape and other maintenance as set forth in these specifications and in keeping with the highest standards of quality and performance. 7 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc NOTE: Any and all references to the role or duties of the Golf Services Manager (GSM) do not relieve the Contractor of any obligation to maintain the golf courses in conformance to the specifications outlined. 1.1 SAFETY 1.1.1 The Contractor agrees to perform all work outlined in these specifications in such a manner as to meet all accepted standards for safe practices during the maintenance and operation and to safely maintain equipment, machines, and materials or other hazards consequential or related to the work; and agrees additionally to accept the sole responsibility for complying with all local, County, State or other legal requirements, including but not limited to full compliance with the terms of the applicable OSHA and CAL OSHA Safety Orders, and at all times protecting all persons, including operator's employees, vendors, members of the public or others from foreseeable injury or damage to their property. The Contractor shall identify and inspect all potential hazards at said areas under maintenance and keep a log indicating date inspected and action taken. 1.1.2 The Contractor shall ensure all required certifications and training methods are adhered to and current. 1.1.3 For the safety of the public and contracted employees, the Contractor shall adhere to all handling and use requirements for pesticides, chemicals and fungicides used within the scope of these services. The use of hazardous pesticides or chemicals will require proper certification of applicators. Notices will be prominently posted in public areas for the use of hazardous chemicals or pesticides. 1.1.4 When performing work, the Contractor shall make every effort to keep sidewalks, vehicle travel lanes and driveways open at all times, and honor golf etiquette by performing maintenance tasks within acceptable golf play conditions. 1.1.5 It shall be the Contractor's responsibility to inspect and identify any condition(s) that renders any portion of the areas under maintenance unsafe, as well as any unsafe practices occurring thereon. The GSM shall be notified immediately of any unsafe condition that requires correction. The Contractor shall be responsible for making corrections, including but not limited to filling holes and replacing valve box covers so as to protect golfers and other members of the public from injury. The Contractor shall cooperate fully with the City in the investigation of any accidental injury or death by the public, the Contractor, or its employees, agents and representatives, or any other entity occurring in the contracted areas, including a complete written report thereof to the GSM within twenty-four (24) hours following the occurrence. 8 Rev. January ll, 2010 C:IDocuments and SettingslesolheilLocal SettingslTemporary Internet FileslOLK341CII136681 Contract Draft Document (2).doc 1.2 PROTECTION OF PROPERTY 1.2.1 During Periods of Inclement Weather: The Contractor will provide supervisory inspection of the golf course during regular hours to prevent or minimize possible damage. The Contractor shall submit a report identifying any storm damage to the GSM attached to a site map identifying location of damage. The Contractor's workforce shall continue to accomplish work not affected by such weather (i.e. clean-up and facility maintenance, as well as work caused by the inclement weather). 1.2.2 The Contractor shall exercise due care during the performance of work in protecting from damage all existing facilities, structures and utilities both above surface and underground the City's property. Any damage to City property deemed to be caused by the Contractor's neglect shall be corrected and paid for by the Contractor at no cost to the City. 1.2.3 If the City requests or directs the Contractor to perform work in a given area, it will be the Contractor's responsibility to verify and locate any underground utility systems and for taking reasonable precaution when working in these areas. Any damage or problems shall be reported immediately to the GSM. 1.3 INTEGRATED PEST MANAGEMENT. The City of Palo Alto is a charter signatory to the Bay Friendly Landscape Declaration and has an award-winning Integrated Pest Management (IPM) Program (2003 Department of Pesticide Regulation IPM Innovator). The IPM has been successful in large part to efforts of both the Parks and Golf Divisions to reduce pesticide use (see 2009 Annual Pest Management Report Attachment 1). Proposals will be evaluated in part by the Contractor's ability to collaborate with City staff to proactively and effectively reduce the amount and toxicity of pesticides in favor of non-chemical controls and least-toxic products when chemical control must be used. The goal of the City of Palo Alto's IPM Program is to reduce the amount and toxicity of pesticides used on City property in order to protect water quality and human health and to avoid ecotoxicity; ecotoxicity is defined as toxicity to birds, fish, bees, and aquatic indicator species, and potential secondary or non-target poisoning from consumption of rodent baits based on product Material Safety Data Sheets (MSDS) and other resources. Preferred pest management techniques include encouraging naturally occurring biological control, using alternative plant species or varieties that resists pests; cultivating, pruning, fertilizing, and irrigation practices that reduce pest problems and optimizing habitat to reduce pest development, selecting pesticides with the least toxicity to humans and non-target organisms and applying pesticides only as a last resort. Toxicity levels are based on criteria used in the City's Pesticide Tier Review Methodology Attachment 2); 9 Rev. January 11,2010 C:\Documents and Seuings\esolhei\Local Seuings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc The followl!la IPM provisions must be met: .The Contractor must work closely with the GSM and the City's IPM Coordinator (IPMC) to achieve annuallPM goals which strive to reduce the amount and toxicity of pesticides that are used while maintainin the health and aesthetics of the b. Within 30 days of the contract award and annually on the anniversary of this Agreement, the Contractor shall submit to the GSM and the City's IPMC, an Integrated Management Plan that complies with the City of Palo Alto's IPM Policy. The plan shall be reviewed annually for updates and modifications. Frequent and thorough site inspections on foot will be needed to ensure no major fungal or insect infestations occur. c. Fungicides, insecticides and herbicides will be approved prior to use by the GSM with the IPMC consultation. New pesticides may not be used without prior authorization. Pesticides will be selected in accordance with the City's goal to minimize the use of ecotoxic, "Tier 1 JJ pesticides and the total amount of pesticides (active ingredient) as defined in the City's annual pest report. d. The Contractor must maintain any pre-existing IPM strategies used at the golf course unless otherwise determined by the GSA in consultation with the IPMC. e. Reduction of Tier 1 fungicides has been a key component of the Golf Course reducing its pesticide toxicity. When use of fungicides is necessary, Tier 2 fungicide use must be maximized prior to the use of Tier 1 fungicides. If Tier 1 fungicides must be used, then Tier . 1 fungicides that are not ecotoxic (a subset of Tier 1 pesticides) must be used first. See Attachment 3 for a list of current fungicides that are used including the preferred Tier 2 products. The City's Environmental Compliance Program will provide technical assistance in determining product toxicity and Tier rankings. f. The City reserves the right to disallow any pest control measure that it determines may jeopardize the health and safety of people or the environment or which conflicts with the intention of the City's IPM policy. g. Rodent control will be performed by trapping. Baiting or fumigant use is prohibited unless authorized by the GSM in consultation with the IPMC. Trapping will be performed using devices that are . 10 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C I I 13668 I Contract Draft Document (2).doc preapproved by GSM using humane trapping procedures in order to minimize stress or animal discomfort. h.. For insect or other invertebrate control, the first priority will be to address conditions that are conducive to insect pests and conserve naturally beneficial insects (or other invertebrates). Selective applications of the least-toxic pesticides may be used only when non-chemical control measures have been exhausted. The following products may not be used for insect control: i.' Products labeled with the signal word "danger" ii. Organophosphate products (e.g.,diazinon or chlopyrifos) iii. Carbamate products (e.g., carbaryl) iv. Pyrethroid-containing products Biological controls will be based upon sound information such as that provided by the University of California. City staffwiH provide site-specific historical data for known infestations. i. The Contractor must provide regular pesticide reporting information in electronic format using the City's Contractor's Pesticide Application Form (Attachment 4) to be emailed to the GSM and the City's IPM Coordinator by the 15th of each month for the previous • month's work unless otherwise agreed upon and approved by the IPM Coordinator. The Contractor must also have internet access and the ability to enter pesticide use information online if the City provides that reporting mechanism. j. For the City's Annual Pest Management and IPM Report, the Contractor must also provide information confirming appropriate training of staff, an annual inventory of hazardous materials and hazardous wastes to ensure expired or prohibited products are appropriately disposed and a written summary of the challenges and successes of IPM program efforts annually. The brief report format, i~provided.brrsity, ___ &1_ --- k. Per the City's shared Municipal Regional Storm water permit, IPM training must be provided to staff at a minimum of once every three years. I. Requests for information from the GSM or IPM Coordinator must "be responded to within 48 hours. All materials used shall be in strict accordance with and applied within the standards set forth in the EPA regulations and the California Food and Agricultural Code. 11 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc The Contractor is responsible for obtaining all required permits and maintaining the required usage documentation and to comply with all requests from the Santa Clara County Agricultural Department to inspect records, licenses, training certificates, equipment and storage facilities. All applicable regulations shall be strictly adhered to, and all required reporting shall be the responsibility of the Contractor. 1.3.1 Pesticide Application Timing: Pesticides shall be applied at times that limit the possibility of contamination from weather, irrigation or other factors. Early morning or evening application shall be used when possible to avoid contamination from drift. If applicable, drift control skirted booms must be used when golfers are present if applicable. Small backpack applications may be performed based on weather protection and with provisions made for the safety of golfers. Applicator shall monitor forecast weather conditions to avoid making application prior to inclement weather to eliminate potential runoff of treated areas. Irrigation water applied after treatment shall be reduced to eliminate runoff. When water is required to increase pesticide efficiency, it shall be applied only in quantities per the label requirements and of which each area is capable of receiving without excessive runoff. 1.3.2 Handling of P~sticides: Care shall be taken in transferring and mixing pesticides to prevent contaminating areas outside the target area. Application methods shall be used which ensure that materials are confined to the target area. Spray tanks containing leftover materials shall not be drained on the site to prevent contamination. Disposal of pesticides and tank rinsing materials shall be within the guidelines established in the California Department of Food and Agricultural Code or EPA regulations. 1.3.3 Equipment and Methods: Spray equipment shall be in good operating condition, quality, and design to efficiently apply material to the target area. Avoiding high pressure applications and using water soluble drift agents will minimize drift. 1.3.4 Recommendations: All pesticide applications shall be in accordance with written recommendations provided by a licensed Pest Control Advisor (PCA) with copies of the written recommendations sent to the GSM. A licensed Qualified Applicator (Qualified Applicator Certificate) shall be kept on site during application. 1.3.5 Selection of Materials: Pesticides shall be selected from those approved for golf course use by California Department of Food and Agriculture and in compliance with Section 1.3 listing prohibited pesticides. 1.4 SOUND CONTROL REQUIREMENTS 1.4.1 The Contractor shall comply with all local sound control and noise level 12 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc rules, regulations and ordinances, which apply to any work performed pursuant to the contract. 1.4.2 Each internal combustion engine used for any purpose on the job or related to the job shall be equipped with a muffler of a type recommended by the manufacturer of such equipment. No internal combustion engine shall be operated on the project without said muffler. 1.5 EQUIPMENT AND ACCESSORIES The Contractor to provide all necessary equipment needed to meet the expectations set forth in this scope of services. The Contractor shall take all necessary precautions for safe operation of equipment and the protection of the public from injury and damage from such equipment. All accessory equipment must be maintained in a clean, safe, functioning condition at all times and repainted as required to present an aesthetically pleasing appearance. Accessory equipment shall include but is not limited to the following: NOTE: Must be same or equal to current types and any changes require prior approval of the GSM. Repair and replacement of signage, shoe brushes, trash receptacles, ash urns, greens cups, NCGA tee markers, benches, sand rakes, flags and poles, ball washers, fairway yardage poles, and sprinkler yardage markers are the responsibility of the Contractor. 1.6 INQUIRIES AND COMPLAINTS 1.6.1 The Contractor shall have designated responsible management personnel to take the necessary action regarding all inquiries and complaints that may be received from or through the City and/or private citizens during normal work hours. Copies of any and all public correspondence will be 13 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 1.1136681 Contract Draft Document (2).doc provided to. the City's centract manager. 1.6.2 Whenever immediate actien is required to. prevent impending injury, death er property damage to. the facilities being maintained, the City may after reasenable attempt to. netify the Centracter, cause such acticn to. be taken by the City werk force and shall charge the full cest thereef to. the the Centracter. 1.6.3 All cemplaints shall be abated as scen as pessible after netificatien to. the satisfactien ef the City. If any cemplaintis net abated within a reasenable time, the City shall be netified immediately ef the reascn fer net abating the cemplaint, fellewed by a written repert to. the GSM within three (3) days. 1.6.4 Menthly gclfer surveys will be cenducted, gelfer satisfactien efgelf ceurse cenditiens indicating geed cr excellent is expected frem 80% er mere ef respenses. 1.7 MAINTENANCE EMPLOYEES/UNIFORMSNEHICLES 1.7.1 Empleyees: A designated full-time Class "A" Gelf Superintendent and Mechanic must be assigned full time at the gelf ceurse. Also. an English­ speaking superviscr, who. is fully trained in all maintenance respensibilities, must be en-site at all times while werk is being perfermed at the Pale Alto. Gclf Ceurse. The Centractor shall provide to. the City, upen cemmencement ef agreement, all Jeb Classificatiens and Jeb Descriptiens for duties, respensibilities and services to. be perfermed at gclf ceurse as described in the agreement. The Centracter may use temperary empleyees in case ef absences or emergencies if these emplcyees are trained in gelf ceurse maintenance, etiquette, and are in uniform so. that we maintain set standards. All maintenance empleyees shall present a neat, well-greemed appearance at all times. Empleyees shall act in a ceurteeus, professienal manner at all times. Every effert shall be made to. perferm the werk while creating minimum disturbance to. the gelfers. Any empleyee who. is determined by the G8M 14 Rev. January 11,2010 C:\Documents and Settings\esoIhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc to be incompetent, disorderly, intemperate or otherwise behaving objectionably, shall be immediately removed from the crew and replaced with a satisfactory replacement. 1.7.2 Uniforms: The Contractor shall pay for and bear the maintenance cost of uniforms for all employees working on the golf course. The uniform shall be worn as a complete unit and befitted properly. The uniform shall be cleaned and pressed with no rips, tears or permanent stains present. The uniform shall include an insignia or logo that refers to "City of Palo Alto Municipal Golf Course." In cool weather when a jacket or sweatshirt is needed, the jacket or sweatshirt shall be worn as the outer garment. All shirts and jackets shall have the golf course logo and the worker's first name on them. Protective golf staff equipment shall be determined by the Contractor when working on the golf course. When working elsewhere at the facility, but not within the actual field of play, a cotton uniform cap with either of the golf course logos may be worn, but must be worn with the bill facing forward at all times. 1.7.3 Vehicles: All vehicles used on the course shall be maintained in good mechanical and body repair. The vehicles shall be clean both inside and out at all times. The vehicles driven on public road ways shall bear the Contractor's company name, which is visible on both sides of the vehicles. The vehicles used on the course will also display an adopted insignia or logo that refers to "City of Palo Alto Municipal Golf Course." Each vehicle shall be equipped to hold all tools and equipment in a neat and orderly fashion. 15 Rev. January 11,2010 C:\Docliments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2l.doc 1.8 THE CITY'S RIGHT TO DO WORK I The City reserves the right to do work as required within the contract area. The work referenced herein may include but is not limited to capital improvements and/or alterations intended to improve golf course facilities and infrastructure. If such projects materially affect the cost to meet the requirements of the agreement, the Contractor will be asked to submit justification to support the additional costs. The Contractor and the City will review the justification in order to consider modifications to the Financial Conditions of the agreement. 2.0 / SPECIFIC MAINTENANCE REQUIREMENTS 2.0.1 The Contractor shall notify the City prior to use of a sub Contractor on the golf course. All sub Contractors shall have appropriate insurance and safety requirements and shall be trained in golf course etiquette procedures prior to any work being performed. 2.0.3 All golf course related pJans are property of the City and use is restricted to premises. The Contractor shall make copies as required to ensure the original s~t of plans remains in good condition. 2.0.4 The Contractor shall perform any required maintenance activities, such as but not limited to ropes, stakes, traffic control, turf aerification, and overseeding as a result of golf cart use on the course. 2.0.5 The Contractor shall meet weekly with the golf professional to coordinate golf events and maintenance activities. 2.1 MAINTENANCE RECORDS The Contractor shall provide the GSM with a written schedule of the work to be performed during the following month which includes but is not limited to: general golf course maintenance, aerification, tree trimming, pond maintenance, herbicide/insecticide application, fertilization and replacement of color plants. The report shall be provided in a format developed by The Contractor and City and approved by the GSM. If the Contractor finds that it is not possible to maintain the submitted schedule, the GSM shall be advised and a revised schedule submitted. 2.1.1 The Contractor shall maintain and keep current a log that records all on­ going, seasonal and additional work, and maintenance functions 16 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C I 1136681 Contract Draft Document (2).doc performed on a daily basis by the Contractor's personnel. Said report shall be in a form and content acceptable to the GSM and shall be submitted to the City concurrent with the monthly invoicing. The monthly payment will not be made until such report is received by the City. 2.2 TREES 2.2.1 Trees trimmed as needed. All tree trimming shall be performed on a schedule approved by the GSM and in accordance with the tree, shrub and other wood plan maintenance pruning practices outlined by the American National Standards Institute, Inc. (ANSI) and International Society of Arboriculture (ISA) BMP standards. However, such trimming and pruning is a minimum level and shall not relieve the Contractor of other responsibilities set forth herein. The Contractor shall consult with the City's Managing Arborist on issues concerning the removal or treatment of trees at the Golf Course. 2.2.2 Trees shall be kept in healthy condition and pruned as required to remove broken or diseased branches. The Contractor shall develop a pruning program, which will promote proper tree scaffolding, strength, and appearance consistent with its intended use. The Contractor shall prune trees to allow wind to pass thro,ugh the tree, reducing and preventing a "sail" effect when needed. 2.2.3 Trees located adjacent to vehicular and/or pedestrian traffic ways shall be maintained so as not to obstruct vehicle and/or pedestrian visibility and clearance. Trees interfering with airport tower vision must be trimmed and lowered as needed. 2.2.4 Fertilization shall be scheduled as often as required to keep trees in a healthy and desirable condition per soil analysis and identification of nutrient deficiencies as outlined in the pruning specifications. Avoid applying fertilizer to root ball or base of main stem; instead spread evenly in area of drip zone. 2.2.5 Tree stakes, ties, and guys shall be checked and corrected as needed. Ties will be adjusted to prevent girdling. Remove unneeded stakes, ties, and guys as required. Re-stake trees as required using lodge pole stakes. 2.2.6 Prune trees along sidewalks and cart paths to-allow a ten (10) foot clearance for pedestrians and golf carts and fifteen (15) feet above curb and gutters for vehicular traffic. 2.2.7 Ailing or stunted trees which fail to meet expected growth will receive additional nutrient treatments to correct any deficiencies. Terminally diseased trees are to be removed per the City's removal policy and procedures. 17 Rev. January 11,2010 C:\Docliments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc 2.2.8 Surface roots, which become maintenance or appearance problems, will be removed or additional soil and sod cover shall be placed as required to prevent damage to adjacent areas, mowers and golf carts. No weed whip marks or herbicides around exposed roots or trunks. 2.2.9 Any trees that are blown over shall either be removed and replaced or topped and righted at the Contractor's expense. 2.2.10 The Contractor shall develop a Tree Management Plan within six (6) months of commencement of the Agreement, approved by the GSM, for maintenance of existing trees, removal of dead or diseased trees, and replacement of aging trees. The Plan will be reviewed by the City's Managing Arborist for comments and amendments before being accepted by the City. 2.2.11 Any dead tree at no fault to" the Contractor shall be removed (with the City's prior approval), including stump grinding and repair of such area at the Contractor's expense. 2.2.12 Any dead tree at fault of the Contractor shall be removed (with the City's prior approval) and replaced per the City Tree Ordinance at the Contractor's expense. 2.2.13 The Contractor shall plant and care for up to 50 new trees each year of the contract. Trees will be provided by the Contractor. Salt tolerant trees, recycled water tolerant, wind breaks, maximum height requirements (airport) will be considered when selecting trees. 2.3 SHRUBS 2.3.1 Prune shrubs to retain as much of the natural informal appearance as possible. 2.3.2 Shrubs used as formal hedges or screens shall be pruned as required to present a neat, uniform appearance. 2.3.3 Remove any spent blossoms or dead flower stocks as required to present a neat, clean appearance. 2.3.4 Plants growing over curbing and/or sidewalks shall be trimmed on a natural taper rather than vertical so as not to appear to be hedged. 2.3.5 Schedule the application of a commercial fertilizer as often as required to promote optimum growth and healthy appearanceto all shrubs. 18 Rev. January 11,2010 C:IDocliments and SettingslesolheilLocal SettingslTemporary Internet FileslOLK341CII136681 Contract Draft Document (2).doc 2.3.6 Any plant requiring removal shall be replaced by the Contractor. 2.4 GROUND COVER -NATIVE GRASSES 2.4.1 Apply all chemical control (e.g. pesticides) as required and in conformance with the Golf Course Integrated Pest Management Plan that will be approved each year (page 6; section 1.3) to control or prevent pest infestations to protect ornamental plantings. 2.4.2 Trim ground cover adjacent to walks, walls and/or fences as required for general containment to present a neat, clean appearance. 2.4.3 Cultivate and/or spray herbicide to remove broad-leafed and grass weeds as required (and in conformance with the Golf Course Integrated Pest Management Plan that will be approved each year (page 6; section 1.3). Shrub beds shall be maintained in a weed free condition. 2.4.4 Keep ground cover trimmed back from all controller units, valve boxes, quick couplers, or other appurtenances or fixtures. Do not allow ground covers to grow up trees, into curbs, or on structures or walls. Keep trimmed back approximately 4 inches from structure or walls. 2.4.5 Fertilization: Schedule fertilization of all ground cover areas with a commercial fertilizer as often as required to promote healthy appearance. Any fertilizer or chemicals must be applied is strict adherence with manufacturer's directions to avoid contamination of waterways or disturbance of natural resources. Fertilizers that contain pesticides must be reported to the IPMC on the Contractor's Pesticide Application Form. 2.4.6 Ground cover plants shall be added as needed to ensure a solid mass planting in conformance with the original intent. 2.5 PEST CONTROL ON PLANTS 2.5.1 The Contractor shall provide complete and continuous control and/or eradication of all plant pests or diseases in conformance with the Golf Course Integrated Pest Management Plan (page 6; section 1.3). 2.5.2 The Contractor shall supply the proper chemical designated for the pests to be controlled. Any pesticides or chemicals must be applied in strict adherence with manufacturer's directions to avoid contamination of waterways or disturbance of natural resources and be in conformance with the Golf Course IPM Plan that will be approved each year. 2.5.3 The Contractor shall obtain all necessary regulatory permits and assume responsibility for the use of all chemical controls. 19 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2),doc 2.6 IRRIGATION SYSTEM: The Contractor will assume all responsibilities for maintenance and repair of all 2 inch and smaller pipe and all components of the irrigation system such as sprinkler heads, valves, valve boxes, restraints, gaskets, swing joints, quick couplers, saddles, electrical, controller satellites, and hardware of the Palo Alto Golf Course irrigation system. All expenses for parts and labor will be paid for by the Contractor. When replacing steel nuts and bolts the Contractor will use only highest grade stainless steel. All components will be replaced with same manufacture and models as components being replaced unless otherwise approved by GSM. 2.6.1 EFFICIENT USE OF WATER: 2.6.1.1 Considerations must be given to soil texture, structure, porosity, water holding capacity, drainage, compaction, precipitation rate, run off, infiltration rate, percolation rate, evapotranspiration, seasonal temperatures, prevailing wind condition, time of day or night, type of grass, plant and root structure. This may include syringing during the day and watering during periods of windy weather. 2.6.1.2 The Contractor shall be responsible for daily monitoring all systems within premises and correcting for coverage, adjustment, clogging of lines and sprinkler heads, removal of obstacles, including plant materials which obstruct the spray. 2.6.1.3 The soil moisture content on greens, tees and fairways shall be checked regularly and appropriate adjustments made. Adequate soil moisture shall be determined by visual observation, plant resiliency, and turgidity, examining cores removed by soil probe, moisture sensing devices and programming irrigation controllers accordingly. 2.6.1.4 The Contractor shall observe and note deficiencies occurring from the original design of facilities and review these findings with the GSM so necessary improvements can be considered. 2.6.1.5 All leaking or defective valves, lines, sprinkler heads, and quick couplers shall be repaired within twenty-four (24) hours at the expense of the Contractor. A report of such repairs shall be given to the GSM weekly. 2.6.1.6 The Contractor shall turn off all controllers when it is not necessary to irrigate due to adequate rainfall. 2.6.1.7 The Contractor shall monitor reclaimed water and potable water. Reclaimed water shall not exceed 65% and potable water costs shall not exceed $250,000. The Contractor shall notify GSM if these costs exceed $225,000. As conditions dictate GSM may approve additional potable water use. 20 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc 2.6.2 SYSTEM MAINTENANCE The Contractor is aware of the current state of the golf course irrigation system and accepts full responsibility for the repair and maintenance of the system as is. Any required replacements, repairs, and maintenance to existing components of the system to ensure the system remains in operation are the sole responsibility of the Contractor. Appropriate personnel shall be trained in the use of the master irrigation computer. 2.6.2.1 All controllers are to be kept pest-free, clean and visible. All parts and repairs necessary to maintain the operation are the responsibility of the Contractor. 2.6.2.2 The computer and software (including annual service agreements) necessary to operate and maintain the irrigation control systemshall be maintained by the Contractor. The Rainbird Support Agreement shall be kept current at all times. Computer and Controller information will be properly kept. 2.6.2.3 Any repairs made by the operator shall be made in accordance with the industry standards and conforming to all related codes and regulations. 2.6.2.4 The Contractor shall be responsible for adjusting the height of sprinkler risers necessary to compensate for growth of plant materials. 2.6.2.5 Automatic controllers and/or enclosures shall be locked while unattended. 2.6.2.6 All controller enclosures must be painted or replaced as needed to maintain a good appearance. 2.6.2.7 Sprinkler heads and valve boxes shall be kept clear of overgrowth which may obstruct maximum operation. Missing or broken valve boxes will be replaced by The Contractor. 2.6.2.8 Repairs and/or upgrades made to the irrigation system must be made in accordance with the system's original design with products equal to or higher quality than currently provided. 2.6.2.9 The GSM should be notified regarding any interruption of water service to the golf course. 2.6.2.10 All irrigation repairs and maintenance including, but not limited to, sprinkler heads, piping, fittings, valves, controller boxes, controller supplies, and controller face plates must be performed utilizing the same manufacturer and type of product as existing materials. Any change to existing materials must have prior approval by the GSM. 21 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc 2.7 ANIMAL AND RODENT CONTROL The Contractor shall continuously, at a minimum on a weekly basis, control and eradicate rodents and other animal pests as necessary to prevent hazards, holes and destruction of plantings on golf course property in accordance with the Golf Course IPM Plan which will be drafted annually and following specifications for rodent control. Damage to public or private property due to erosion as a result of rodent activity shall be repaired at the Contractor's expense. 2.8 WEED CONTROL OF PAVED SURFACES The Contractor shall control all weeds growing in cracks, expansion joints and other hard surfaces by the use of mechanical weed control or with limited use of chemicals in accordance with the Golf Course IPM Plan. 2.9 WEED CONTROL IN LANDSCAPE AREAS Weed control in landscaped areas shall be accomplished by mulching and the use of mechanical weed eradication. 2.10 STRING TRIMMERS Care shall be exercised with regard to the use of string trimmers to prevent damage to building surfaces, walls, header board, light fixtures, signage, etc. A minimum of 12" bare soil or mulched buffer zone shall be maintained around the circumference at the base of all trees in landscaped areas. 2.11 GREENS Maintain all turf in accordance with playability and industry wide standards as determined by the G8M, observing the following minimum requirements: 2.11.1 Greens shall be mowed daily with an approved greens reel type mower at a height of 130 or as recommended by the superintendent and approved by the G8M. Frequencies and height of cut may be modified from time to time as deemed necessary by the golf course superintendent with the 22 Rev. January 11,2010 C:\Docliments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc prior approval of the GSM. All grass clippings must be collected and removed from the site during each mowing operation, including dispersed in a method to prevent unplayable conditions. Greens must be mowed, and rolled if performed, prior to first golfer of day reaching each respective green, including the putting green. Care will be given on clean-up lap mowing to reduce turf loss and playability. 2.11.2 Ball cups are to be relocated daily to USGA Standards to enable worn turf spots to recover. Putting green cups to be changed every other day. Hole positions will be rotated using front, middle, and back locations for each three hole sequence. Pin placement shall be in healthy turf area according to rotation plan. Hole plugs set at proper grade. 2.11.3 Verticutting of greens shall be scheduled bi-weekly or more including double verticutting during periods of active turf growth. Each verticutting shall be at 90 degrees to the previous cut. Verticutting activities should match the agronomic requirements of plant growth. This function shall be coordinated to compliment the aerification and topdressing schedules. Combing or brushing may also be done. Verticut depth should be appropriate to playing conditions and agronomic needs. If play conditions are such that greens are not smooth for ball roll (bumpy), the Contractor shall utilize verticutting and other agronomic methods to improve golf ball roll. 2.11.4 Aerify greens at least two (2) times per year in spring, either March or April, and fall, either September or October, or more frequently if needed. Plugs will be removed the same day. Aerification shall be carried out with a minimum of interference to play. Aerification shall be scheduled at least 6 months in advance with the GSM and golf professional. All aerification hole sizes with a minimum of 5/8 inch hollow tine utilized, and spoil locations shall be pre-approved by the GSM. Aerification holes shall penetrate to a depth of three inches. Care should be taken to have as minimal disturbance to green surface from manual and equipment applications during aerification process. Aerification of greens for agronomic purposes, other than annual regularly scheduled aerifications, shall be reviewed and scheduled with the golf professional and GSM to reduce golfer impact. 2.11.5 Following all annual regularly scheduled aerifications, a topdressing sand material approved by the GSM shall be applied and brushed into the turf with follow applications performed as needed. Application shall be done with an approved topdressing spreader or blown in with walking blowers. Spot topdressing may be applied to repair damage from ball marks or any other damage. Light topdressing will be done every two weeks during the active growth season to maintain turf playability and agronomic conditions. Turf irrigation requirements shall be adjusted during process to ensure proper agronomic conditions are met. 23 Rev. January 11,2010 C:\Documents and Settings\esoIhei\Local Settings\Temporary Internet Files\OLK34\CII13668I Contract Draft Document (2).doc 2.11.6 The Contractor shall have the soil analyzed after the start of the term of the contract and once every year thereafter on dates preapproved by the GSM. Apply fertilizer and nutrients in the quantity and type recommended by soil analysis and growing conditions at the time of treatment and in a manner to provide uniform growth of turf. Under normal conditions, 0.5 to 1.2 pounds of actual nitrogen per thousand square feet shall be applied per growing month. Typically, a variety of granular slow release types of material or liquid sprayable fertilizer may be utilized. Use of materials to control salt damage and water infiltration shall be applied to meet the requirements of the turf and playable conditions. Fertilizer shall be applied every 3-4 weeks during the active growing season and every five (5) weeks for the remainder of the year. 2.11.7 Treat greens with proper chemicals to control insects, disease, weeds and other pests in conformance with the City's IPM Plan. 2.11.8 Greens shall be kept free of non-native and/or invasive grasses and/or broad leaf weeds that tend to creep in from the edges. A threshold level of 0-2% has been set for weeds and disease: Insect threshold has been set at 0-5%. No foreign grass encroachment from collars. 2.11.9 EC readings should be taken during spring and fall to determine salts levels and if they are above normal, corrective action taken to reduce to appropriate levels to promote optimum health of the turf. 2.11.10 Green speed should be consistent daily on all greens with the difference between the lowest green speed and the highest green speed no more than one (1) foot in variance on the stimp meter through out golf course. Green speeds should be no lower than 8 feet in average daily during the months of May, June, July, August, September, and October, and no lower than 8 feet 6 inches daily for the other months. Green speeds should be maintained as high as agronomic conditions and play conditions allow. 2.11.11 Debris from trees shall be cleared prior to mowing and during day as needed, no standing water or severe turf loss areas, pest and vandal damage to be repaired, and bare and stressed areas sodded or plugged to ensure quality playing conditions. 2.11.12 Ball marks shall be repaired daily. 2.12 COLLARS, APPROACH, BANKS AND GREEN SURROUNDS Maintain all turf in accordance with playability and industry wide standards as determined by the GSM observing the following minimum requirements: 2.12.1 Collars shall be mowed a minimum of two (2) times each week to 24 Rev. January 11,2010 C:\DoclIments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc maintain a height of % inch, mowing with a triplex mower. 2.12.2 Green surrounds shall be mowed a minimum of (1) time each week to maintain a height of 1" to 1-1/4" inch or a height as recommended by the superintendent and approved by the GSM. If a rotary mower is used, it shall be specifically designed to prevent scalping of the turf. 2.12.3 Fertilization frequency, types of material, and analysis shall be determined from results of annual soil nutrient level testing and growing conditions at the time of treatment. Under normal conditions, 0.50 to 0.75 pounds of actual nitrogen per thousand square feet shall be applied every 6-S weeks during the active growth season and every S-1 0 weeks for the remainder of the year. Typically combinations of granular slow release type of materials may be utilized. 2.12.4 Mowing directions should be changed to prevent turf depressions and turf loss. 2.12.5 Approach shall be mowed a minimum of two (2) to three (3) times each week to maintain a height of % inch or a height as recommended by the superintendent and approved by the GSM, cut with a greens-type triplex mower. 2.12.6 Grass clippings shall be removed and dispersed properly Jo avoid affecting golf play. 2.12.7 Bunker banks shall be mowed to ensure no rutting occurs and proper turf heights are maintained. If rutting occurs, areas shall be sodded for repair. 2.12.S Verticutting shall be performed at least two (2) times per year. All other provisions of section 2.11.3 shall be followed. 2.12.9 Aerify at least two (2) times per year in spring and fall, or more frequently if needed, and remove plugs the same day~ Aerification shall be carried out with a minimum of interference to play. Aerification shall be scheduled each year for the following year in conjunction with the GSM and golf professional. All aerification hole sizes, with a minimum of 5/S inch hollow tine utilized, and spoil locations shall be pre-approved by the GSM. Aerification holes shall penetrate to a depth of three inches. Care should be taken to have as minimal disturbance to the turf surface from manual and equipment applications during aerification process. Aerification for agronomic purposes other than annual regularly scheduled aerifications shall be reviewed and scheduled with the golf professional to reduce golfer impact. 2.12.10 Following all annual regularly scheduled aerifications, a topdressing sand material approved by the GSM shall be applied as needed. Application shalLbe done with an approved topdressing spreader. Turf irrigation 25 Rev. January 11,2010 C:\DoclIments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Do.cument (2).doc requirements shall be adjusted during process to ensure proper agronomic conditions are met. 2.13 TEE MAINTENANCE Maintain all turf in accordance with playability and industry-wide standards as determined by the GSM observing the following minimum requirements: 2.13.1 Service tees daily by moving tee markers, removing trash and checking benches and ball washers. Change tee towels and water weekly and keep ball washers filled to proper level with water and appropriate cleaning agent. Tee markers shall be moved daily to healthy turf areas, placed at appropriate direction to play. Tee markers placed in healthy areas with tee markers set flat to ground and direction of play. 2.13.2 Mow tees two (2) times weekly with reel type mower, with baskets, at height of 1/2 inch or a height as recommended by the superintendent and approved by the G8M. All grass clippings will be collected and dispersed . properly for playable conditions. 2.13.3 Aerify and topdress tees, with sand and mulch pre-approved by the GSM, at least two (2) times per year, or more frequently if needed, using the appropriate equipment with the minimum of interference to play. Aerification shall be carried out with a minimum of interference to play and plugs removed the same day. Aerification shall be in conjunction with the golf professional and the G8M. All aerification hole sizes, with a minimum of 5/8 inch utilized, and spoil locations shall be pre-approved by the GSM. Care should be taken to have as minimal disturbance to tee surface from manual and equipment applications during aerification process. Bare areas sodded and leveled. 2.13.4 Fertilization frequency, materials and analysis shall be determined from results of annual soil nutrient level testing and growing conditions at the time of treatment. Under normal conditions, 0.50 to 0.75 pounds of actual nitrogen per thousand square feet shall be applied every 6-8 weeks during the active growth season and every 8-10 weeks during the remainder of the year. Typically combinations of granular slow release type of materials may be utilized. 2.13.5 Repair worn and damaged turf areas as they occur by topdressing, overseeding or resodding to ensure playability at all times. No standing water or mud holes and pest and vandal damage repaired. 2.13.6 Tees shall be overseeded, with approved perennial rye seed by the GSM, following aerification and before topdressing at a rate of 9 Ibs. per thousand square feet of tee area. 26 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc 2.13.7 Treat tees for control of insects, disease, weeds and other pests as necessary to maintain healthy turf. All treatments shall be in compliance with the City's IPM Plan. A threshold level of 25% has been set for weeds and disease. Insect threshold is 33%. Spot spraying by location basis only when thresholds are exceeded. 2.13.8 Trash receptacles are to be emptied daily. 2.13.9 A sand and seed container, approved by the GSM, must be available on all Par 3 holes, for use in repairing divots. A container must be set at each respective set of tee markers for each hole. Tee divots shall be filled with sand and seed at a minimum of once per week on all holes and twice per week on Par 3 holes. 2.13.10 Sufficient scorecard and pencil supplies shall be kept in stock at the scorecard station between the No.1 green and the No.2 tee. 2.13.11 Tee yardage plaques, stations and signs shall be maintained and edged at all times. 2.13.12 Tee station items, such as markers, signs, trash cans, ball washers, etc. shall be in good condition and repaired or replaced as needed. All tee station equipment cleaned and painted and ball washers operational. 2.13.13 Recycle trash containers shall be utilized and all recyclable glass, paper, plastic, aluminum and other recyclable material shall be collected and turned into appropriate recycle centers. 2.14 FAIRWAY MAINTENANCE Maintain all fairways in accordance with playability and industry wide standards as determined by the GSM, observing the following minimum requirements: 2.14.1 Mow fairway two (2) times weekly at height of 5/8 inch or at a height as recommended by the superintendent and approved by GSM. 2.14.2 Aerify all fairways at least one (1) time a year. The equipment used to aerify the fairways shall be Power Take-Off (PTa) or self engine powered to enable a three (3) to five (5) inch coring depth (John Deere2000 Aercore Aerator or equivalent) utilizing hollow coring, with a minimum of 3/4 inch hollow tine, as recommended by the superintendent and approved by the GSM and cores shall be removed from the fairways. Aerification shall'be scheduled in conjunction with the golf professional and the GSM. All aerification hole sizes and spoil locations shall be preapproved by the GSM. Care should be taken to have as minimal disturbance to turf surface from manual and equipment applications during aerification process. Slicing of the fairways at various intervals is 27 Rev. January 11,20 I 0 C:\DocLlments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII13668I Contract Draft Document (2).doc recommended to promote turf growth, improve water infiltration, and improve salt damage. 2.14.3 Overseed all fairways once per year, in fall and at a preapproved date with the GSM and golf professional, with perenial rye grass, pre-approved by the GSM, at a minimum rate of 400 Ibs. per acre. All seed shall be slit seeded into the soil to ensure adequate soil and seed contact. A post seed application of fertilizer (15-15-15 or equivalent) shall be applied with four (4) weeks of the overseed process at a rate of one (1) Ib per thousand of nitrogen. Overseed and topdress (or re-sod) of worn or bare areas of fairways as necessary. 2.14.4 Treat turf to control weeds, invasive grasses (i.e. Kikuyu), diseases, insects, and other pests as necessary to maintain fairway threshold level. A threshold level of 35% for weeds, 50% for disease and 40% for insects has been set. Spot spraying by location basis as needed when thresholds are exceeded. All treatments shall be in compliance with the IPM Plan. 2.14.5 A proper fertilizing and nutrient program shall be performed per soil testing recommendations each calendar year. Fertilization shall be performed a minimum of every 8-10 weeks during the active growth season and every 10-12 week during the remainder of the year. 2.14.6 Policing to control litter shall be done on a regular basis for the removal of all paper, leaves, cans, bottles, tree branches, etc. 2.14.7 Excessive turf clippings shall be dispersed by a method of dragging, baskets, vacuumed or blown to ensure proper playable conditions are provided. Grounds under repair painted with appropriate white turf paint and roped off neatly and consistently throughout the golf course. Grounds under repair include those under repair by the The Contractor and those areas where turf is at a level that is not consistent with other associated turf areas. Yardage markers and sprinkler head yardage markers in place and maintained. Cart traffic management devices in place; bare or stressed areas properly addressed. No standing water or mud holes. Pest and vandal damage repaired. 2.14.8 Excessive turf clippings shall be dispersed by a method of dragging, baskets, vacuumed or blown to ensure proper playable conditions are provided. Grounds under repair painted with appropriate white turf paint and roped off neatly and consistently throughout the golf course. Grounds under repair include those under repair by the The Contractor and those areas where turf is at a level that is not consistent with other associated turf areas. Yardage markers and sprinkler head yardage markers in place and maintained. Cart traffic management devices in place; bare or stressed areas properly addressed. No standing water or mud holes. Pest and vandal damage repaired. 28 Rev. January 11,2010 C:\Documents and Settings\eso1hei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc 2.15 ROUGHS MAINTENANCE Maintain all turf in accordance with playability and industry wide standards as determined by the G8M, observing the following minimum standards: 2.15.1 Mow one (1) time per week at a height of 1-1/2 inches or a height as recommended by the superintendent and approved by the G8M. 2.15.2 Rodent control and repair as needed. All rodent control shall be in compliance with the IPM Plan. Pest and vandal damage repaired. 2.15.3 Overseed and topdress (or resod) worn or bare turf areas as necessary. 2.15.4 Fertilization frequency, materials and analysis shall be determined from results of biannual soil nutrient level testing and growing conditions at the time of treatment. Fertilization shall be performed a minimum of every 8- 10 weeks during the active growth season and every 10-12 week during the remainder of the year. 2.15.5 Treat turf to control weeds, disease, insects and other pests as necessary to maintain rough threshold. All treatments shall be in compliance with the IPM Plan. A threshold level of 100% for insects and disease. Weed threshold has been set at 50%. 8pot treatment by location basis only when thresholds are exceeded. 2.15.6 Grounds under repair painted with appropriate white turf paint and roped off neatly and consistently throughout the golf course. Grounds under repair include those under repair by the The Contractor and those areas where turf is at a level that is not consistent with other associated turf areas. No standing water or mud holes, hazards properly marked, and free of debris that affects play. 2.16 OTHER TURF AND MAINTENANCE AREAS These areas consist of areas not detailed above. 2.16.1 All debris such as litter and branches shall be removed from the course daily. 2.16.2 All yardage, course markers, ropes and stakes, and signage shall be straight and damage free, and repaired and replaced as needed. 2.16.3 Any item that is a safety hazard shall be repaired or replaced immediately, 2.16.4 The Contractor shall submit annually to the G8M a written report for the preceding 12 months detailing annual fertilizer, pesticide, fungicide and other related applications for the golf course. The report will conform to the requirements of the IPM Plan (Appendix A). 29 Rev. January 11,20 I 0 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc 2.16.5 The Contractor shall flush drainage inlets once a year. 2.16.6 The Contractor shall utilize wood chipping machinery to produce wood chips from tree pruning and care. Wood chips may be spread throughout golf course in preapproved areas by the GSM. No permanent dumping of course debris such as branches, wood stumps, etc. is approved on the property. The Contractor is responsible for costs associated with any removal of debris. Any other course-generated debris such as earthen spoils shall be dispersed at locations and with methods preapproved by the GSM. 2.16.7 Turf areas surrounding the clubhouse shall be mowed one (1) time per week at a height of 1-1/4 inches. 2.16.8 The Contractor shall provide, at The Contractor's sole expense and liability, an effective goose control program to eliminate goose activities, including use of control dog, motorized hand controlled boats, noise makers, and other methods. 2.17 SAND BUNKERS 2.17.1 Sand bunkers shall be cleaned and raked by mechanical method or by hand a minimum of three (3) times per week with Fridays being one of the three days. No excess sand buildup on high side. 2.17.2 Sand depth shall be randomly checked monthly for depth of sand and shall be maintained no less than four inches (4") deep. Additional sand will be added at the The Contractor's expense. 2.17.3 Turf shall be mechanically edged along sand bunker edges monthly, or more frequently if required, to ensure a neat appearance. Care shall be taken to maintain the design outline of the bunkers to insure the integrity of the bunker shape. Bunkers should have 1" lip on lower side. Chemical control of sand edges through use of a non-selective herbicide or growth .regulator around sand bunkers shall be allowed with preapproval of GSM. 2.17.4 Excess sand in the turf surrounding the trap shall be removed on a regular basis. 2.17.5 A minimum of two (2) to five (5) rakes are to be available, depending on bunker size, at all sand bunkers at all times. Rakes properly maintained. (Color and style are subjectto GSM approval.) 2.17.6 Bunker sand shall be cultivated as needed, or at a minimum of once per month, to ensure sand is not compacted. Methods should be used to not disturb existing soil below the sand. 30 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc 2.17.7 All debris such as pine needles and cones, branches and other debris shall be removed as needed to ensure playable conditions and reduce sand contamination. No animal boroughs. 2.17.8 Excessive water ponding and silt accumulated by rain falls and irrigation applications shall be removed prior to bunker raking. 2.18 CLUBHOUSE AREAS 2.18.1 SHRUB BEDS 2.18.1.1 Clean-up shall occur on a regular basis to ensure that beds are kept free of trash and debris such as paper, cans and bottles, fallen branches, excessive leaves and weeds. Mulch in proper areas, beds to be weed free, properly trimmed, and watered properly; not overly dry or wet. 2.18.1.2 A fertilizer program shall be a minimum of three (3) applications per year or as needed for health and color. 2.18.1.3 Spent flowers, leaves, dead or diseased plants, and other landscape debris shall be removed from plant areas daily, or as required. Flowers changed by schedule or as needed. 2.18.2 SEASONAL COLOR BEDS 2.18.2.1 Annual flowers in place and healthy and missing plants replaced in kind and number. All color beds shall be regularly cleared of paper, bottles and cans, fallen branches, excessive leaves and weeds. 2.18.2.2 Weed control shall be accomplished by hand weeding, mulching, by the use of mechanical equipment or by the selective use of herbicides. A prescribed pest control spray program may be done as often as necessary for pest control in accordance with the IPM Plan. 2.18.2.3 Beds shall be cultivated by mechanical means on a regular basis or as required, or as directed by the GSM. 2.18.2.4 Color plants shall be replaced a minimum of twice annually and shall be performed on a schedule submitted to and approved by the GSM. The replacement plants shall be 4-inch potted size spaced per industry standards and planted with the appropriate soil amendments. 2.18.3 PERIPHERY AREAS (Including the Planted Traffic Island on Embarcadero Way) 2.18.3.1 All periphery areas shall be maintained in a manner consistent to industry standards to ensure a healthy and aesthetically pleasing 31 Rev. January 11,2010 C:\DoclIments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc appearance at all times. 2.18.3.2 Areas shall be mowed, weeded, cleared of litter and other debris on a regular basis (a minimum of once per week). Watering should occur if the area is covered by the irrigation system. 2.18.3.3 Special attention shall be given to periphery areas adjacent to public roadways since these areas are highly visible to the general public and constitute a "first impression" of the overall service level of the course. 2.18,.3.4 All areas are to be inspected for erosion problems and repaired as needed. 2.19 PARKING LOTS 2.19.1 Parking lots shall be maintained in a safe condition for use by both vehicles and pedestrians, and cleaned each day to ensure a clean, crisp appearance free from litter, debris, and weeds including all landscaped planters on or adjacent to the lots (including the traffic island on Embarcadero Way near the primary entrance to the Golf Course). 2.19.2 All parking lot lighting shall be inspected daily and repaired as needed or reported to the City's PW Facilities Maintenance Division. 2.19.3 "Disabled Parking" signage and other signage shall be maintained in accordance with all City, County, and State regulations. 2.19.4 All parking lot signage shall remain in place, maintained and readable. 2.19~5 Parking lot asphalt shall be inspected daily by The Contractor. The City's PW Facility Maintenance Division shall be called for repairs. Free of debris, litter, leaves, and trimmings. The Contractor shall inspect and clean daily. 2.20 GRAFFITI 2.20.1 Golf course shall be inspected dailyfor evidence of graffiti. Special attention shall be given to restrooms, signs, markers, block walls, curbing, paving, tees, utility poles/boxes and/or any other structures or fixtures. 2.20.2 All graffiti shall be removed within twenty-four (24) hours of detection. 2.20.3 Graffiti requiring paint over shall be painted over with a color consistent with that of the original surface. 2.20.4 Graffiti on non-painted surfaces shall be removed by sand or water blasting and area returned to the preexisting condition. 2.21 CART PATH/STEPS/RAMPSIWALKWAYSI BREEZEWAY 32 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc 2.21.1 Cart paths to be swept or blown clear of debris every Friday or more often as needed. No standing water. 2.21.2 Concrete paths to be edged and scraped c1ean,a minimum of one (1) time per month or as needed. Cart paths weed free. See IPM Plan. 2.21.3 The Contractor shall identify all potholes and/or other surface damage or defects on concrete cart paths and report to the City for repair. If damage is the fault of the Contractor the repair cost will be the responsibility of the Contractor. Base Rock utility roads on holes #9, #12, and #13 will be graded smooth weekly. Additional base rock added as needed at the expense of the Contractor. 2.22 RESTROOMS AT HOLE #5 2.22.1 Inspected daily by the Contractor, clean and stocked daily by the City's PW Facility Maintenance Division. 2.22.2 Inspected daily by the Contractor, sinks, toilets, walls, screens, and floors shall be sanitized daily by the City's PW Facility Maintenance Division. 2.22.3 Paper supplies shall be checked and restocked daily or as needed. 2.22.4 Inspected daily by the Contractor for odor and operation. PW will be contacted for corrections and repairs. 2.22.5 Leaking or malfunctioning fixtures shall be reported to the City's PW Facility Maintenance Division immediately upon detection. 2.22.6 Lighting fixtures are to be checked daily with repairs of faulty fixtures provided as needed at time of detection. The City's PW Facility Maintenance Division will be contacted for repairs. 2.22.7Restroom floors which are wet for any reason, including mopping, shall be so indicated with proper temporary signage. 2.22.8 No graffiti. The Contractor will inspect daily and contact the City's PW Facility Maintenance Division for graffiti removal. 2.22.9 No worn spots in concrete, wood walls, or corrugated fiberglass barriers. The City's PW Facility Maintenance Division will be contacted for repairs. 2.23 MAINTENANCE FACILITIES 2.23.1 The City shall make available for use by the Contractor, at no charge to the Contractor, a maintenance facility at the golf course for the storage of golf course-related equipment, materials and/or supplies. The facility will 33 Rev, January 11,2010 C:\Docliments and Settingslesolhei\Local SettingslTemporary Internet FilesIOLK34\C 11136681 Contract Draft Document (2).doc be available to the Contractor on an "as is" basis. The Contractor will conform its use of the maintenance facility to all applicable laws, rules and regulations regarding the storage of materials on the City's premises, including, but not limited to, the storage of hazardous, toxic or flammable materials. The City assumes no responsibility for any theft, destruction or damage to the Contractor's personal property that is stored in this facility. The Contractor will return the facility to the City in its original condition as of the date of commencement of the contract between the City and the Contractor, normal wear and tear excepted. 2.23.1..1 Permitted Usag~: The Contractor may usethePremises forthe following uses: Storage, Files, Office area or other similar uses, premises may not be used for any other purposes without City's prior written consent, which consent may be withheld in the sale and absolute discretion of the City. 2.23.1.2 RrohibitedOses. The Contractor shall notu$e Premisesfor anypurpo$~not expresslypermitted hereunder.. The Contractor shall nqt create, cause, maintainorpermitanynuisanceor \fI/aste.,in,qn,·· oraboutth.eRremises, .•. orpermi.tor allow.the Premises to be u$edforany LIn lavvru I or immoral purpose. The CQntractorshallnot dopr permit to be done anything in . any mannerwhichunreasonably.disturbs·the usersofthe·City Pr8perty or the occup~ntspf neighboringpr8perty. Specifically, a9dwithoutlirnitin~.theabove,.TheContrastor~greesnotJo cause(lnyunreason(lplE1\odo(,inois~,vibration,·poWE1[emission, orotheritem toeman(lteJromthe Premises. No·· materials or artiql~$qf(l nyn~tu rerh(lllbE1storedoutside .. uppn·~nyportionof the.Premises .. The ·Cpntractorwillnotuse Property in a·· manner th~tincreas~rthe risk9f fir~icost of fireinsural"1.ce or improvel11.ents.Jhe~eqp'···N9.~nreason~blesignorpl~~ardshall bepaiptecJ.jiinscribed·brplace~ .. inqr9I1isaid.Prope~yr~9d nO tree orshrub thereon shallbedestroyedorTemov~cJ9rother wastecommittedofsaidPr9perty,. No bicycles, .motorcycI 7s, automobiles.orother mechanical means of transportation shall be placed or stored anywhere on the Property. exceptforthe g(lrageqr driv~\Vay. N9rep~ir, overhaulorm8~ifi.cmion of any motor"e~iclE1/shal.lt~kE1pl~ceonthE1prppe~yorthe~tr77t·in front of said Property; TheContractor,athis/herexp~nse, shall ~eept.h~Propertyin~sgood·con~itio~.asit.~cl!5atth~ 9~gi9nin~.8f·th7termsh7re9f,exc7pt.pa(ll.C3g78sc~~i()nedby ordinarywear(lnd.tear,anqexcE1ptdal11(lgefQtgE3>rgpf, side\V~I.k~.andunderground plumbing,which is nottli~faultof theContractoL 2.23.1.3 Conditi0I1,UseofPremises. CitYimakesno~?~r~l1tyor rE1pre~entationof.an¥kind. c08g~rn.ingtresondition()tthe Premises, orthefitnessof the Premises for the use intended by 34 Rev. January 11,2010 C:\Docllments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C 11136681 Contract Draft Document (2).doc 2.23.2 The maintenance facilities shall be kept clean and neat at all times with all material inventories and supplies stored in a manner in keeping with CAL-OSHA regulations, the City's Fire Department regulations, and all City, County and State regulations. Fire extinguishers must be operational and inspected by the Fire Department. 2.23.3 Maintenance buildings and surrounds inspected daily. Report needed repairs to GSM within 24hrs. 2.23.4 The maintenance area shall be locked or otherwise secured when unattended to discourage unauthorized entry. 2.23.5 Office and lunchroom floors are to be vacuumed or swept five times per week and mopped at least once a month at The Contractor's expense. 2.23.6 Rain gutters shall be kept clear of debris and cleaned a minimum of once per year prior to fall rainfall period at The Contractor's expense. 2.23.7 Any security system shall be maintained and utilized at The Contractor's expense. 2.23.8 The maintenance facilities shall be maintained by performing required daily, monthly and annual maintenance of garage doors, inside and outside doors, inside and outside windows, air conditioning or heater unit, lighting, shelving, etc. All repairs to such facility are the responsibility of the Contractor. The City is responsible for repair to the roof or outside structure. The Contractor shall obtain and be responsible for quarterly service to air conditioner and heating unit, and any subsequent repair or service costs, and shall supply copy of written agreement to the GSM. 2.23.9 All facility and associated golf course maintenance utility costs are the responsibility of the The Contractor, including telephone, gas, electric, potable water, sewer, and trash. 2.23.10 Adherence to all City, County, and State regulations for proper storage and disposal of materials is required. 2.24 CLUBHOUSE AND FACILITY LIGHTING All lighting systems shall be inspected by the The Contractor on a regular basis for faulty bulbs, fixtures or other malfunctions repaired and/or 35 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI 1 136681 Contract Draft Document (2).doc replaced as needed by the City's PW Facility Maintenance Division. 2.24.1 Walkways, breezeway, surroundings, ramps, driving range walkway and tees cleaned of litter, dirt, and landscape debris daily. All garbage containers at clubhouse and surrounding area must be emptied daily. 2.24.2 Exterior lighting working and scheduled properly. Report needed repairs to the City's PW Facility Maintenance Division. 2.24.3 All signage accurate and readable. 2.24.4 A threshold of 50% has been set for disease and weeds 60% for insects. Spot spraying by location basis only when thresholds are exceeded. Any use of pesticides must conform to the IPM policies and procedures. 2.25 NETS/FENCES/GATES 2.25.1 The Contractor will be responsible for net repair and material costs on holes 3,6,10, and Driving Range. 2.25.2 All fences and gates shall be inspected regularly with repairs made as needed to ensure a safe, secure and aesthetically pleasing condition at all times, no holes in fences. Repairs and materials are the responsibility of the Contractor. 2.26 POND MAINTENANCE 2.26.1 Algae and cattail control program shall be maintained as approved by the GSM. 2.26.2 Pond shall be inspected daily with all visible litter/trash removed upon detection. 2.26.3 Pond water levels shall be maintained to ensure bank stability and aesthetic. 2.26.4 Properly marked as water hazard. 2.26.5 A threshold of 25% on Aquatic weeds. 2.27 CONSTRUCTION AND/OR REMODELING OF GOLF COURSE Any and all changes in the physical characteristics of any portion of the course or structures such as addition or removal of sand traps, trees, water hazards, native vegetation or other features shall require prior approval by the GSM. The Contractor will be paid for time and materials for any golf course 36 Rev. January 11,2010 C:\Documents and Settillgs\esolhei\Local Settillgs\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc renovation or construction work not listed in this scope of work. Quotes will be submitted to the GSM for approval with itemized list of individual job classifications, their time and hourly rate expense. (Complete Table 3, Attachment C-1). Material will also be added along with any other expenses to complete the Project. Time and Material rates to be included within bid proposal. (Include on Attachment C-1; Table 3, Schedule of Rates) 2.28 PRACTICE AREA I DRIVING RANGE MAINTENANCE 2.28.1 Turf shall be mowed weekly or as required at agreed-upon height by the GSM. 2.28.2 General turf maintenance shall conform to procedures outlined in Sections 2.11/Greens (page 17), 2.13/Tee Maintenance (page 19), and 2.15/Roughs Maintenance (page 20. 2.28.3 All Artificial Turf will be inspected weekly and repaired at the designated Range closure time which is 5:00am -8:30 am every Thursday or at a time which is approved by the Pro Shop Manager. 2.28.4 Light topdressing will be done once annually followed by brushing to maintain integrity of Artificial Turf. Supplemental brushing required every 6 months. 2.28.5 Practice Bunker will have at least 4 inches of sand and kept trimmed and edged. Bunker edges that are raised due to excessive sand build up will be lowered by the Contractor when they reach one and a half feet over original grade. Practice Bunker will be raked daily. 2.29 EXTERIOR OF THE CLUBHOUSE, RESTROOM BUILDINGS, STRUCTURES AND GROUNDS The City will be responsible for the repairs and maintenance of the building exteriors and interiors. GOLF COURSE WETLAND AREAS Wetland areas must remain undisturbed to traffic, fertilizers, pesticides and equipment. Litter and debris must be removed daily. Wetland signage must be clean, readable and placed along both sides of Wetlands. Replacements of all signage will the responsibility of the Contractor. V. GENERAL CONDITIONS A. Permits/Parking 37 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc The Contractor shall be issued a free maintenance permit from the City's . Department of Transportation. This will allow the Contractor's crews to use City parking facilities at no charge during the term of this contract and only while doing landscape maintenance work for the City's Open Space and Parks Division. B. . Payments and Inspection Payment will be made for work satisfactorily completed as called for in this contract. The City's Representative shall inspect and notify the Contractor of any unsatisfactory work. Unsatisfactory work shall be corrected within 24 hours. The Contractor or the Contractor's representative shall meet with a representative from the City at least once a month during the life of this contract to inspect Work performed. The Contractor will bill the City by the 5th of the month following service. The City will pay the Contractor on a monthly basis for labor, equipment and materials provided during the monthly billing period. C. Use of Sanitary Landfill The refuse disposal facilities of the city of Palo Alto Sanitary Landfill located adjacent to East Embarcadero Road in said City will be made available to the Contractor through the 2011 calendar year for the disposal of all trees, rubbish and construction debris generated on work site. The Contractor shall pay all dump fees. The Contractor shall at its sole expense load, haul and deposit said rubbish and debris during normal landfill operating hours. All landfill regulations will apply to all debris deposited by the Contractor. Any questions regarding landfill rules and regulations shall be directed to the Landfill Supervisor. A digest of the refuse disposed area rules and regulations have been appended to this contract. At the end of the 2011 calendar year, the The Contractor shall at is sole expense load, haul and deposit all rubbish, debris and green waste' to a transfer station located at the City of Sunnyvale. D. Spare the Air Days The Contractor must comply with regional "Spare the Air" recommendations on designated "Spare the Air Days" that occur throughout the year. At a minimum, no gasoline powered equipment shall be used after 10 a.m. on "Spare the Air Days". The Project Manager will notify the The Contractor when a "Spare the Air" alert has been designated. The Contractor must coordinate work schedules to accommodate "Spare the Air" recommendations. 38 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\C I 1136681 Contract Draft Document (2).doc EXHIBITB SCHEDULE OF PERFORMANCE CONTRACTOR shall perform the Services so as to complete each task within the time period specified in the Scope of Services, attached to this Agreement as Exhibit A. CONTRACTOR shall provide the specified services according to the frequency and schedule specified in Exhibit A. CONTRACTOR shall execute the use of proper knowledge, skills, materials and equipment of a timely basis to maintain all areas in a clean, safe, healthy, and aesthetically acceptable manner during the entire term of this contract. The Contractor agrees to be continuously alert in locating and defining problems and agrees to exercise prompt and proper corrective action. Action times will be prioritized, and low priority items will be given a time line for corrections. Upon request CONTRACTOR shall provide a detailed schedule of work consistent with completing the required Services as needed. 5 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI 1136681 Contract Draft Document (2).doc EXHIBITC SCHEDULE OF FEES CITY shall pay CONTRACTOR, for the completion of Services performed to the reasonable satisfaction of the CITY, a not to exceed sum in accordance with the schedule below. Any services provided or hours' worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein, without prior authorization from CITY, shall be at no cost to City. A. Schedule of Payment: CITY shall pay CONTRACTOR a maximum compensation amount of One Million Eight Hundred and Fifty Thousand Dollars ($1,850,000.00), payable over the 30 month term of this Agreement, for Services performed based on current Golf Course configuration, as follows: Year One, November 1, 2010 through April 30, 2011: $350,000.00, in monthly increments of $58,333.33. Year Two, May 1,2011 through April 30, 2012: $750,000.00 in monthly increments of $62,500.00. Year Three, May 1,2012 through April 30, 2013: $750,000.00 in monthly increments of $62,500.00. B. Equipment Purchase Compensation is based on CONTRACTOR's Lump Sum Purchase of CITY's existing capital equipment, as listed on Attachment 5 ofRFP 136681and attached herein as Attachment 1 for a Sum Total of $ ..... ,.v,'v -- 8 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI I 136681 Contract Draft Document (2).doc EXHIBITD INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. A WARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW' MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH YES YES YES YES NO YES OCCURRENCE AGGREGATE WORKER'S COMPENSATION STATUTORY EMPLOYER'S LIABILITY STATUTORY BODIL Y INJURY $1,000,000 $1,000,000 GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY $1,000,000 $1,000,000 LIABILITY DAMAGE COMBINED. BODILY INJURY $1,000,000 $1,000,000 -EACH PERSON $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, -EACH OCCURRENCE $1,000,000 $1,000,000 INCLUDING ALL OWNED, HIRED, PROPERTY DAMAGE $1,000,000 $1,000,000 NON-OWNED BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT . PERFORMANCE ALL DAMAGES $1,000,000 THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUB CONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL. II. CONT ACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" 10 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI I 136681 Contract Draft Document (2).doc A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON­ PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 11 Rev. January 11,2010 C:\DoclIments and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CII136681 Contract Draft Document (2).doc EXHIBITE BONDS [ATTACH BOND FORMS IF BONDS ARE REQUIRED] 12 Rev. January 11,2010 C:\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI1136681 Contract Draft Document (2).doc EXHIBITF LIQUIDATED DAMAGES It is mutually agreed by Contractor and City that if completion of the Services to be provided by the Contractor under this Agreement is delayed beyond the time specified in the Schedule of Performance, plus any authorized extensions of time, City will suffer damages and will incur other costs and expenses of a nature and amount which is difficult or impractical to determine. Accordingly, City and Contractor, agree, as a method to fix the damages and not as a penalty, that in the event of any such failure to perform, the amount of damage which shall be sustained by City will be the sum of $ for each and every calendar day during which the Services remain uncompleted beyond the time specified for completion, plus any authorized extension of time. Should Contractor fail to pay the liquidated damages to City, Contractor agrees that City may deduct and withhold the amount of the unpaid damages from any amounts due or that may become due to Contractor under this Agreement. BY PLACING THEIR INITIALS BELOW, CITY AND CONTRACTOR· ACKNOWLEDGE THAT THE AMOUNT SET FORTH ABOVE HAS BEEN AGREED UPON AS THE PARTIES' REASONABLE ESTIMATE OF CITY'S DAMAGES. CITY CONTRACTOR 13 Rev. January 11,2010 C;\Documents and Settings\esolhei\Local Settings\Temporary Internet Files\OLK34\CI 1136681 Contract Draft Document (2).doc Unit Year Manufacturer Model 22;03 1997 JOHN DEERE 5200 2206 2000 FORD RANGER 2209 1997 JOHN DEERE 5310 2210 1986 CASE 480LL 2213 1997 TY-CROP TD460 TOP DRESS 2215 1997 JOHN DEERE 5300 2216 2008 TORO GREENSMASTER 2217 2008 TORO GREENSMASTER 2221 1992 TORO HYDROJECT 3000 2241 2005 TORO WORKMAN 2110 2242 2005 TORO WORKMAN 2110 2243 2005 TORO 3280-0 2248 2006 TORO PROCORE648 2250 1996 CHEVROLET C3500 2252 2001 JOHN DEERE TURF GATOR 2253 2001 JOHN DEERE TURF GATOR 2254 2001 JOHN DEERE PROGATOR 2020 2255 2000 JOHN DEERE PROGATOR 2020 2256 2000 JOHN DEERE PROGATOR 2020 2257 2001 JOHN DEERE 1200A 2258 2003 TORO GREENSMASTER 2259 2000 TORO GREENSMASTER 2262 2000 TORO GREENSMASTER 2263 2003 LASTEC 721XR 2264 2003 JOHN DEERE 3235 2265 2002 JOHN DEERE 3235 2266 2007 TORO REELMASTER 2267 2008 LASTEC 721XR 2275 1965 FMC (BEAN) FG1010 2276 1980 GANDY N/A 2280 1999 TURFCO SP-1530 2281 1988 TORO GROUNDMASTER 62 2282 1990 TURFCO METERMATIC II 2283 1987 FORD 786A 2295 2001 JOHN DEERE AERCORE 2000 ---------- Attachment 1 City Equipment List Description UTILITY TRACTOR -FOUR WHEEL DRIVE XCAB TURF TRACTOR TRACTOR LOADER TD-460 TOP DRESSER UTILITY TRACTOR -TWO WHEEL DRIVE 3100 GREENS MOWER W/8 BLADE CUTTING 3100 GREENS MOWER W/8 BLADE CUTTING WALK-BEHIND TURF AERIFIER UTILITY VEHICLE. (TURF) UTILITY VEHICLE (TURF) ROTARY TURF MOWER WALKING GREENS AERATOR TWO YARD DUMP TRUCK UTILITY VEHICLE UTILITY VEHICLE UTILITY VEHICLE W/2WD CARGO BOX UTILITY TRUCK W/HD200 SPRAYER BUNKER RAKE 3100 GREENS MOWER W/11 BLADE CUTTING 3100 GREENS MOWERW/8 BLADE CUTTING 3100 GREENS MOWER W/11 BLADE CUTTING TRACTOR-MOUNTED ROUGH MOWER FAIRWAY MOWER FAIRWAY MOWER TRIPLEX TRIM MOWER (3100-0) TRACTOR-MOUNTED ROUGH MOWER SPRAY RIGyTRAILER MOUNTED (200 GALLON) SPREADER BOX TOWABLE TOP DRESSER TURF MOWER TOWABLE TOP DRESSER THREE-POINT FLAIL MOWER ATTACHMENT FAIRWAY AERIFIER ------- Current Mtr 5,456 32,597 5,595 2,993 0 5,796 852 637 590 1,747 1,558 523 58 15,220 24,560 20,602 3,927 3,435 446 4,577 3,141 3,911 3,433 0 2,685 3,992 1,134 0 out of service out of service 0 0 out of service out of service 0 Orig Cost 18,935 17,717 23,748 52,317 18,048 24,520 0 0 25,000 8,725 8,725 18,654 18,426 32,391 6,917 6,917 23,196 17,215 20,582 11,929 18,895 20,297 20;297 17,861 39,817 40,602 26,659 0 0 5,000 0 0 5,500 0 27,014 I >-.-;- .-;- Sll n ::r" 8 ('[) ~ .-;- n Attachment D TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: COMMUNITY SERVICES DATE: NOVEMBER 17,2008 CMR: 446:08 REPORT TYPE: STUDY SESSION SUBJECT: Operational Analysis of the City Palo Alto Municipal Golf Course EXECUTIVE SUMMARY In 2007 the City Council authorized staff to proceed with an operational analysis of the Palo Alto Municipal Golf Course ("Golf Course"). The operational analysis (Attachment A), was conducted by Economics Research Associates (ERA), and provides information on the Bay Area golf market and conditions of the Golf Course facility; and the current and alternative operating models available for the Golf Course. The study found that, despite a Bay Area wide decline in golf play, the Golf Course performance has been relatively strong when compared with similar municipal facilities in the market area. The ERA study and staff report recommends several actions for future success of the Golf Course, which includes: making relatively minor but strategic investments in the Golf Course infrastructure and operating structure along with actively participating in the planning of flood control alternatives for San Francisquito Creek to find a balanced flood control/recreational use solution that would benefit the Golf Course. Additional recommendations include aligning tenant contracts to expire concurrently and to evaluate options to enhance Golf Course maintenance, including the advantages and disadvantages of private versus public maintenance. Various Golf Course operating models are described in the ERA report, each with advantages and disadvantages. In the short term, no recommendation is proposed to alter the current operating model until the flood control plans for San Francisquito Creek, which may impact the Golf Course, are clearly defined. Staff is presenting this report to Council for information and preliminary feedback. This item will be placed on the Finance Committee agenda in the future for further discussion and recommendations to Council. BACKGROUND The Golf Course was constructed in the mid 1950's on 184 acres of flat former salt-marsh and bay fill. The course was designed by noted golf course architect William R. Bell of Pasadena, California. The Golf Course was designed as an I8-hole facility with a par of 72. The Golf Course is a classic 18-hole championship course that measures over 6,800 yards from the back CMR: 448:08 Page 10f8 tees. The facility includes a large practice putting green, a three-building Eichler-designed­ clubhouse/golf shop complex and parking lot. In the mid 1970's, improvements were made to replace the clubhouse buildings. At that time, holes 3, 10, 11, & 18 were renovated under the direction of golf architect Robert Trent Jones, Jr. In 1992, the City Council initiated a Master Improvement Plan process (CMR 453:92) for the Golf Course that would incorporate the findings of all prior studies, as well as look to the future for necessary improvements to the aging facility. The firm of Halsey Daray Golf was selected to prepare the Master Plan. Subsequently, in 1998, Certificates of Participation (COP's) were issued in the amount of $7,750,000 (CMR 357:98) to fund the master plan improvements, and work commenced on the driving range, fairways, greens and tees in 1999. Due to escalating project costs and funding limitations to make the annual debt service payment the COP issuance only addressed 40 percent ofthe proposed master plan improvements. The Golf Course is a City of Palo Alto General Fund operation. All excess revenues or shortages are returned to the City's General Fund. The Golf Course currently generates sufficient revenues to support debt service, direct and indirect expenses, and City cost plan charges. There is no reserve or replacement fund for the Golf Course, consequently; additional debt service is taken on by the Golf Course wh~n new capital improvement needs arise. The debt service for the COP's, which represents approximately $570,000 annually, will be fully retired in 2018. Presently, the City has a management agreement and a lease agreement with Brad Lozares for golf operations. As a result of Internal Revenue Services (IRS) debt issuance limitatipns, the management agreement and the lease for the building are separate contracts. The management agreement includes the following responsibilities: reservations; green fees collection; starting; and marshalling services. The lease agreement for the building includes responsibility for: managing golf cart rentals; the driving range; merchandise sales; and instruction services. Mr. Lozares's management agreement with the City for operating the Golf Course expires December 31,2009. The lease agreement with Mr. Lozares for lease of the building expires in April 2013; . the building lease also includes an option to extend the term of the concession 10 additional years, if the option is exercised at the City'S sole discretion. There is also a lease agreement with R&T Restaurant Corporation (R&T) for food and beverage services at the Golf Course. The R&T lease agreement for food and beverage operations expires April 20, 2018. Golf Course turf and irrigation maintenance is provided by the City's Community Services Department, Recreation and Golf Division. The Club House and Pro Shop building maintenance (exterior) and janitorial services are provided by the City's Public Works Department, Facilities Management Division. The Recreation and Golf Division Manager of the Community Services Department oversees daily operations that include coordination of services between the tenants and City maintenance staff in order to provide a seamless experience for visitors to the Golf Course. The Real Estate Division of the Administrative Services Department oversees tenant leases. CMR:448:08 Page 2 of8 Faced with increased competition in the regional golf market, challenges in the golf facility physical product, and increased pressure on City finances, a study was conducted at the request of former City Manager Frank Benest, and funding was approved as part of the 2007 budget process, with the following two key objectives: a) provide analysis on the Bay Area Golf market and conditions of the Golf Course facility; and b) provide analysis of the current and alternative operating models available for the Golf Course. In 2007, a scope of services was developed and an RFP process followed to retain a·consultant to conduct the analysis. Economics Research Associates (ERA) was selected for their reputation in the industry, experience conducting comparable studies for similar golf courses, excellent references and reasonable fee proposal that met the City's budget for the project. DISCUSSION The ERA report (Attachment A) provides detailed information regarding the Golf Course that will help put into context how the Golf Course has performed in recent years in comparison to nearby courses, along with recommendations and options for future success of the· Golf Course. Extensive public outreach was undertaken to capture the views and interests of stakeholders. Among them were the Golf Advisory Committee, members of the Parks and Recreation Commission, golfers who frequent the Golf Course, interested residents, and Baylands enthusiasts, among others. A Golf Course survey was available at the course for six weeks and 2,500 surveys were mailed to golfers who frequent the Golf Course; 454 responses were received and are summarized in the ERA report (Section V). The study concludes that the Golf Course, as with others in the region, has been negatively impacted by market forces over the last decade. With the entry of many new public and private golf courses in the region, the market has become significantly more competitive. Due to this extraordinary golf course inventory expansion, along with a downturn in the regional/national economy, comparable Bay Area golf courses, on average, report a 17% decline in annual rounds played from 2000 to 2007. The Palo Alto Golf Course has experienced a 16% decline in annual play during this period. Sound management decisions, cooperation among the tenants, loans from the General Fund, strategic maintenance choices and enhanced marketing have enabled the Golf Course to continue to recover the costs of operations, fund related debt service, and to cover City and Community Services Department (CSD) allocated overhead charges (Cost Plan). The study points out that, despite the decline in play at the Golf Course, the operating performance has been relatively strong compared to similar municipal facilities. There are several options for the future of the Golf Course, each with its own set of challenges and opportunities. The long term Golf Course operating models that the City may want to consider include: Facility Lease; Management Agreement; City Self Operation; or a Hybrid Model such as the City has currently. The advantages and disadvantages of these options are described in Section VI of the ERA Report. CMR: 448:08 Page 3 of8 In the near term, the choices for Golf Course improvements andlor changes to the operating model, which the City may wish to consider, will likely be influenced by the results of the pending flood control plans for San Francisquito Creek, being conducted by the Joint Powers _ Authority and the Army Corps of Engineers. Consequently, below are three alternatives to help spur discussion on the future of the Golf Course, with a focus on the possible impacts and opportunities the flood control plans for San Francisquito Creek may present. A brief summary of three possible alternatives for moving forward are discussed below: I. Make no changes, and work with the Joint Powers Authority (JP A) for San Francisquito Creek flood control to minimize Golf Course impacts The flood control plans for San Francisquito Creek, being conducted by the Joint Powers Authority and the Army Corps of Engineers, has begun with the key objective of identifying potential options to reduce flooding along the creek. A list of short-term projects will be complete as early as 2010, with the possibility of breaking ground on an actual project by summer of 2011. The flood control plans for San Francisquito Creek remain an important factor in planning for changes and improvements at the Golf Course because the creek is adjacent to the Golf Course and, at one time, traversed the land occupied by the course. Some of the recommendations that come out of the flood· control study may necessitate modification of portions of the Golf Course. One course of action may be for the City to work with the Joint Powers Authority to find flood control solutions that have minimal to no impact on the Golf Course. The ERA report states that the Golf Course operating performance is satisfactory, particularly in light of a very soft Bay Area golf market. Within the short term, two to three years, the operating performance will likely remain stable with no significant change to the operating structure or major investment in capital improvement to the Golf Course. The study does not identify any urgent capital improvement needs or operational problems that need to be addressed in the short term. On the contrary the Golf Course, as compared to the key competition, is performing better than average. Given this fact, it is not unreasonable to, at least for the short term, make no significant changes. II. Actively participate in the planning of flood .control alternatives for San Francisquito Creek, to explore possible balanced flood control I recreational use solutions that would benefit the Golf Course; and pursue strategic operational modifications and Golf Course improvements as outlined in the ERA Report This alternative is most consistent with the ERA report and is also the alternative that staff believes to be the most prudent at this time. The goal would be to optimize financial performance through some strategic investments while working closely with the Joint Powers Authority on a flood control project for San Francisquito Creek that will enhance the golf course. The specific actions under this option would include the following: o Retain a golf course design consultant to work with the Joint Powers Authority and City staff to design an environmentally friendly flood control project that will CMR: 448:08 Page 4 of8 balance flood control and recreational use solutions and also benefit the Golf Course. o Align the two tenant leases and management contract so they expire concurrently. This would allow consideration of other, potentially more effective and efficient, operating options and a smoother transition of operation, should that be deemed advantageous in the future. o Commit to a plan of cost neutral capital improvements, as outlined in the study (summarized on page 1-12), to ensure the Golf Course remains competitive. That is, proceed with improvements that are economically justified by increased net operating income stemming from the improvements. o Recalculate the Cost Plan allocation for the Golf Course to a more traditional golf course operation allocation. This would allow for excess :fu.rids to be set aside to establish a replacement reserve to fund ongoing minor capital improvement andlor more intensive maintenance. o Direct Community Services and other relevant City staff to further evaluate the advantages and disadvantages of private versus public maintenance. The City will meet and confer with the union on any labor issues which arise. TIl. Embark on a sigttificant redesign of the Golf Course with or without a concurrent . restructuring of the Golf Course operation that takes advantage of possible flood control funds that may become available The ERA report finds that the Golf Course is presently operating at a satisfactory level with respect to cost recovery and annual rounds of play as compared to other comparable golfcourses in the region, and can be maintained a~ such with minimal additional investment. However, if the City aspires to build or move toward developing a true destination or signature golf course, a new vision would need to be formulated. This could take several forms. For example, significant design changes to the c.ourse could reflect more of a links-style course with wide-ranging natural wetland grasses and round contours that provide undulations and slopes for a' more unique golfing experience. Another concept could be to extend the lake on hole 11 through the fairways on holes 3 and 18 to create two or more signature holes. These would be unique, challenging holes that would bring golfers back to play again. Moreover, this concept may include partnerin~ with an entrepreneur to build and operate a destination restaurant, one that overlooks the 18t hole and vistas of the airport; a restaurant with appealing ambiance and character for residents to take out of town visitors to dine. Several members of the community share this vision in one form or another. They believe that with the right people and private investment, it is possible to create a better Golf Course that has a unique design, providing a long term competitive advantage in the market place. A significantly enhanced Golf Course, coupled with a destination restaurant, could be a successful strategy. Although this is a compelling vision, funding a comprehensive re-development project at the Golf Course, even with possible flood control funds, would be very challenging, particularly in the current economic environment. CMR: 448:08 Page 5 of8 Related to the idea of a comprehensive Golf Course redesign, at Council's direction, staff has investigated the possibility of re-designing the Golf Course in order to create room for playing fields (CMR 168:06). This concept was extensively studied by the Planning staff and also explored by the Parks and· Recreation Commission. In 2006, City staff and the Parks and Recreation Commission concluded that the concept of playing fields at the Golf Course should be deferred until the flood control options become more certain. Creating new playing fields could be re-investigated as part of a comprehensive re-design but again this would add additional expense which would be particularly challenging in the current economic environment. Staff Preferred Alternative At this time, staff recommends pursuing Alternative II. This alternative entails making relatively minor but strategic investments in the Golf Course infrastructure and operating structure as outlined in the ERA report along with actively participating in the planning of flood control alternatives for San Francisquito Creek. The goal would be to find a balanced flood control and recreational use solution that would both improve creek flood control and benefit the golf course. Joint Powers Authority flood control concepts include the Golf Course and provide a unique opportunity for possible Golf Course enhancement if the City actively participates in the design and development of the project. With regard to strategic investments in the Golf Course infrastructure and operating structure, prior to the most recent economic downturn the golf market was. expected to remain relatively stable for the next three years, the current economic conditions will likely present new challenges in maintaining a stable level of play. Although the Golf Course is performing reasonably well today, staff believes maintaining the status quo (Alternative I) is too passive a strategy in a market that is increasingly competitive and dependent on discretionary income. Given the current economic climate, it is imperative to commit to strategic investment in course improvements and maintenance practices to ensure the City is providing the best possible golfer experience. This will maintain or improve the City's place in the market and enable the City to reach cost recovery targets. Moreover, minimal cost neutral capital improvement, enhanced marketing such as the implementation of online reservations and better course maintenance are all needed to ensure long term success. Alternative III, which paints a more dramatic picture of chang~ and redesign of the Golf Course is a compelling option and remains possible. This option can be preserved by addressing the issues of aligning contracts and lease expiration terms and addressing the advantages and disadvantages of private versus public maintenance as outlined in Alternative II. lt also keeps open the potential for a more comprehensive re-design project that may have additional recreational benefits such as adding playing fields. RESOURCE IMPACT Working with the JPA on a ·flood control/enhanced Golf Course design project will require Community Service staff input, golf course design expertise, and public input. Golf course design expertise may require consultant costs. CMR: 448:08 Page 6 of8 In 'an attempt to maintain the standard cost allocation plan across City departments staff recommends that, after further analysis by the Administrative Services Department, any reduction in City Cost Plan charges to the Golf Course be reallocated within the Community Services Department so as to not unfairly impact other General Fund activities. The ERA report indicates potential savings of $250,000 to $300,000 to the City should the City pursue private Golf Course maintenance. Staff will continue to monitor the increasing expenses to employee benefits currently at 50 percent of salary and determine if maintaining in-house operations is more economically or operationally efficient versus contracting out services. Staff will work with the labor union to ensure that, ultimately, the best services are provided to the community. Staff will continue to monitor ongoing revenue and expenditures to ensure that the Golf Course operation is a viable operation for the c~mmunity. The ERA report also points out the need for strategic capital investment in the Golf Course that includes rebuilding of selective greens and bunkers and improved· golf cart storage to increase the number of carts in order to attract more and larger tournament play. The actual resource impact is to be determined with further analysis; however, the goal will be cost neutral capital improvement, as outlined in the study. That is, improvements which are economically justified by increased net operating income stemming from the improvements. As mentioned above staff recommends that the Golf Course study be forwarded to the Finance Committee to work through the alternatives available to ensure ongoing success of the Golf Course operation and to return to Council with a feasible plan on how to proceed. ENVIRONMENTAL REVIEW No environmental review is needed at this time. However, should a Golf Course capital improvement project be considered at a future date all appropriate environmental review and consideration will take place prior to approval. ATTACHMENTS Attachment A: Attachment B: CMR: 448:08 Economics Research Associates -Operational Analysis of the City of Palo Alto Golf Course Executive Summary (Bullet Point Version) Page 7 of7 PREPARED BY: ______________ ~--~---J=-----~hL--~--- DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL: CMR: 448:08 nterim Director, Community Services Department Page 8 of8