DRAFT MINUTES
Parks and Recreation Commission
Minutes of Meeting
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*~~Please note that the action taken by the Commission relative to hiring a private management company for the municipal golf course, as reported below, was taken up again by the Commission on March 1, 2011 because the agenda posted for this meeting did not fully describe the action to be taken, as required by City ordinance.~ Please see minutes of March 2, 2011 meeting.~ ~
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Date and Time:~~~~~ Tuesday, February 15, 2011, 6:45 p.m.
Meeting Location:~ Parks and Recreation Department, 5 Broad St.
Members Present:~ Chair Leslie Tuttle, Amy Everitt,~ James Shea, Bob Callahan, Chris Burke
Members Absent:~
Others Present:~~~~~ Doug Bollen – Director of Salem Parks, Recreation and Community Services
Recorder:~~~~~~~~~~~~~ Stacy Kilb
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The meeting is called to order by Chair Tuttle at 6:45PM (Recording: Folder A, Tracks 13 - golf course RFP, 14 - applications for rentals)
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Approval of January minutes
A motion to approve the minutes is made by Callahan, seconded Everitt and passes unanimously,
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Visitors
Sean O’Brien – Golf Tournament
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*Tom Watkins - Golf evaluation committee
Mr. Watkins is accompanied by Mr. Rich Viscay.
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Mr. Watkins updates that an RFP was put out; he shows a PowerPoint that gives a background of the RFP process, the Evaluation Committee, the company that put forth a proposal and the Committee's recommendations.
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Copies of the PowerPoint are handed out to Commissioners. Chris Carter of Golf Facilities Management, Inc. (GFMI) is also present in the audience.
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Several steps were involved to get to the RFP, including the proposal itself and a site visit.
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The Review Committee consisted of Amy Everitt, Doug Bollen, Chris Burke, Tom O'Shea, Richard Viscay and Tom Watkins. They reviewed the technical proposal, which met all requirements; this company ranked Highly Advantageous or Advantageous in all ranking criteria categories, which provided a breakdown of minimum criteria. Further criteria, such as quality of the operations and management, quality of course maintenance, financial analysis, and benefits to golfers and residents were also taken into consideration.
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The Committee agreed that use of this company would be an improvement on what's in place now, due to:
· Provision of a general manager
· Having a Class A-1 on-site PGA golf pro
· Employment of a course ranger
· On-site golf-specific technology and data reporting
· Ability to market to a broader audience
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It is also agreed that Dick Drew does an excellent job, but GFMI could do just as well. The company would designate Mr. Garrity of Lynn to be Head Superintendent. Staff would also include a full time mechanic and seasonal maintenance staff.
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GFMI would provide up to $45K of capital improvements in each year of 5 the year lease, including:
· $25K in cart path repair
· $10K in tee repairs
· $10K in drainage work
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Additionally the first year would include installation of a fuel station, which would then be deeded to the City of Salem. Currently there is no fuel station, and gas cans get carted to the gas station, filled and returned, which is not efficient and poses a liability issue. The cost of installation is approximately $30K.
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Lease payments to the City are outlined as follows:
Year 1 - 70K
Year 2 - 80k
Year 3 - 90k
Year 4 - 100k
Year 5 - 110k
Note that these figures do NOT include the $45K per year capital improvements mentioned above, which would be in addition to lease payments made.
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This proposal shows a steady revenue increase; as the system is now, there is no such guarantee. The GFMI model assumes cost will increase each year and revenues will vary depending on the economy, weather and other external factors. This will be a guaranteed revenue flow to allow for better future budgeting.
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If the city hired its own manager/PGA professional, additional costs of $50,000 per year would be incurred, as shown in scenario 2. By privatizing, the City also does not incur the risk of workers’ compensation, unemployment insurance, health insurance costs and other unpredictable, costly benefits.
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The Committee feels that the benefits of the current proposal outweigh those of managing the course internally and then managing the accompanying external risks.
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Benefits to Salem golfers and residents would include:
· A professional approach that will increase tee times & speedy play
· All current seasonal passes will be honored
· Increased course quality
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GFMI has been managing golf courses for 24 years, has experience in clubhouse and course management, and operates a restaurant, function hall and bar in Beverly and also the Hillview Country Club.
Their customers are satisfied and the Committee voted to recommend that Parks & Recreation approve this proposal, but if they do it is still subject to City approval. Of the 63 municipal golf courses in state, only 10 are run with municipal employees.
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Chairwoman Tuttle opens to the public. There are no comments.
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Shea asks some questions which are answered by Mr. Carter.
The life expectancy on the fuel station is discussed – one that GFM I previously installed has been in use for 15 years and is still in use; tanks must be replaced every six year.
The golf pro would work a minimum of 40 hours each week, including weekends, and in the summer s/he would probably work closer to 60 hours per week. The pro would be employed year round, with more flexible winter hours to make up for the busy summer season. They would teach lesson and clinics.
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Rate increases also come up – the Parks and Recreation Department would be involved in this and will be reviewing them. The topic was not mentioned in the RFP, but GFMI has agreed not to adjust rates during the first year. In Beverly rates are jointly controlled by the City and by GFMI via mutual discussion.
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Capital improvements to the clubhouse itself would be made by the City, not GFMI, but day-to-day maintenance of the clubhouse and vehicles would be the responsibility of GFMI.
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Shea asks if the policy of allowing groups with passes and guaranteed tee times would continue. The pass system would continue but tee times would no longer be guaranteed; more tee times either before or after leagues would be available to new members. One possibility is a rotation process like the one used at other courses that is fairer to everyone.
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The snack bar would also be run by GFMI and would offer hot dogs, hamburgers, sandwiches, etc. and would have a seasonal beer and wine liquor license.
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Capital vs. general improvements are discussed. There is some disagreement as to what constitutes each category. Mr. Carter explains that capital improvements are those mentioned above – cart paths, tee renovations and drainage work. Callahan argues that, with the exception of cart paths, these are things the every golf course must do regularly and thus are only “improvements.” Mr. Carter says that the tee renovations and drainage work are major projects; whereas simply “re-seeding” the tee would be standard, re-sodding it is a much bigger project. He clarifies that minor improvements would be made by the superintendent, and capital improvements are things that would be beyond those duties. They get funded through a separate capital improvements budget. For example, repairing drainage
damaged during the winter is standard maintenance, but re-lining the entire pipe, installing new pipe, and excavating the area involved, are capital improvements. It is up to GFMI and the Commission to determine what projects they would like completed each year, within that $45K figure. Callahan points out that that amount will not go very far, as GFMI just spent $300K of Beverly’s money on cart paths. Mr. Carter states that $45K is the figure they are willing to put in.
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Currently Robert Garrity is the assistant superintendent of the Lynn Golf course; his involvement with Salem is not yet definitive but has been proposed. He would be the head superintendent of the Salem course only, not for the region. He has been at Gannon for 12 or 13 years.
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According to the RFP lease and revenue payments would not be made up front; payments would be made monthly with bonds to guarantee the full year’s payment. Mr. Carter is amenable to up-front payments if necessary, as this is the situation in Beverly.
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Callahan agrees that tee times could be more efficient and professionals could do a good job, but he questions the wisdom of the method. Tee times are currently full; if the golf course attracts more people to already full tee times, how will it work out? Who will “give way” to make room for the new people? Mr. Carter states that his company would maximize tee times, and Callahan agrees that they have a good reputation.
times. Callahan says they have a good reputation.
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Shea asks about the City’s $100K investment in new equipment and how ownership of it would play out. The lease company would take possession of and maintain the equipment. Shea asks about what happens to the equipment at the end of the lease period; does the City have an inventory of it? We do, and it was included with the RFP. All equipment is insured through the City, but if a GFMI person was injured on it, it would be the company’s responsibilities and costs to bear. The City would still be insured if accidental loss occurred to the equipment. Mr. Carter says each situation is unique and outlines some of the other scenarios. They also carry an additional policy as a rider.
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Some questions arise as to the state of the equipment, for example, if a $30K piece of equipment is turned over to GFMI in decent shape, but dies the next day, whose responsibility is it to replace it? That would be the responsibility of GFMI, according to the RFP. They have already had mechanics examine all equipment but are
prepared to replace it if needed and could share if absolutely necessary, with other facilities.
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Burke asks about Hillview, as the rates there are the same for residents and nonresidents. He asks if rates would be lower for Salem residents, and what incentive there is for GFMI to do that for Salem. The situation in North Reading has to do with their receipt of a state grant during an eminent domain takeover in 1987; to give residents a discount they would have to pay back the grant plus interest. Resident rates would continue in Salem, though the general discount is small.
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GFMI would seek to renew their contract in five years. Salem Greens also has a 10th hole, which would continue to be free when not in use for lessons, though there is a liability issue if someone gets hit by a ball there. As it is now the area is free-form and Burke does not want to see mats put out, asking if they could have someone monitor the area. Mr. Carter describes the setup.
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Everitt asks about the public using the golf course in winter for skiing, sledding, cross country snowshoeing, etc. GFMI is still open to allowing those uses; the City will plow parking lot for that. The City could also have access to the clubhouse for events.
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Tuttle asks what chemicals they use at Gannon as it is next to the reservoir - are they 'green'? Mr. Carter answers that they follow all state regulations, with more restrictions in North Reading than at Gannon in Lynn, since the former is a straight aquifer system with the town well directly next to the course. All chemicals go to the state for approval, and the DEP makes many visits. Specifications in the RFP were very specific regarding nitrogen levels on the greens, etc. Fungicides and insecticides used are more regulated by the state.
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Callahan asks about them maintaining current price levels during first year and what they anticipate future price increases to be. They do not have any projections; it is year-to-year depending on the number of rounds played. One suggestion is to go up $1 per 9 holes; typical increases at other facilities occurred every 2 years. They do plan to keep yearly permits available.
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Rate increases are further discussed. GFMI would involve the Parks and Recreation Commission in the process but it is not described in the RFP. Shea would like to protect Salem residents from large fee increases which would keep them off the course; Mr. Carter points out that his business would not be successful if he “priced out” his customers. The RFP states that GFMI will control fees, but could be re-worded so the Commission has some input, with a clause in the contract in case both parties do not agree. Everyone would sit down with Salem’s legal department to go over this if the RFP gets approved.
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Mr. Carter adds that rate increases are not always the way to increase business; his company would prefer to see more people use the course at a lower rate than see fewer at a higher rate, as they specialize in municipal, not high end, courses. The average increase at other courses was $1 per 9 holes every 2-3 years, with perhaps a 3% ($25) permit fee increase every other year. This is more like a cost-of-living increase every other year. Other courses have come down. N. Duxbury established their maximum rates in the RFP since they had an issue with this.
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Callahan says he can see prices going up, but with Salem's demographics company will still fill Tee times, however given these demographics, they may force some Salem residents out. Even a $1 or $2 increase will push Salem residents out. Others will take their place. Is course there to fill times or for residents?
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Leslie says we have NOT raised fees since 2002 so regardless, we may need to. Burke points out that seniors on fixed incomes would be especially vulnerable to price increases. Mr. Carter says that if rates do increase after the first year, they would be applied across the board; he suggests that seniors may be price sensitive but perhaps not as time sensitive. Thus, if lower rates are kept for seniors, they would simply be more restricted in the times they could play. When Burke asks Mr. Carter if he thinks that the senior rate of $4.25 is low, Mr. Carter responds that he thinks it is a great deal (price applies to weekdays 7-3) but that he does not have enough data to answer the question; the answer would depend on which tee times were used the most. 10-3 is a slow time and could be used to expand senior membership.
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Joe Piedmonte asks about the financial analysis of the golf course. Viscay answers, saying they have an operations budget each year; certain costs are identifiable like salaries and maintenance, but other things are elsewhere in budget like insurance, etc. The 3rd part is soft costs – the city trying to recapture the cost of what it would realize if that was private and what revenues it would receive. Gross profit and net profit are displayed as there are 2 ways to look at the data. Mr. Piedmonte asks if conclusion was a net loss [last year]. In fact there was a net profit, but if the 'soft costs’ of tax and water, if private, were taken into account, and then there is a net loss.~ The middle green bar is a more accurate representation of what it would be, while the bottom bar is what it is if those two soft
costs are taken into account.
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Burke says the City will still be incurring some costs such as capital costs on the clubhouse and equipment, and asks if that will cut into the profit paid by GFMI. Viscay says we own those assets, so costs are for equipment we own, though they don't go away.
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Callahan asks Viscay about the increasing revenue figures each year and what percentage of the City’s budget they comprise. Viscay answers that the operating budget is $127 million, so $70K is a fraction of a percent.
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Tuttle calls for a motion; Everitt motions to accept the proposal as long as they can put in some sort of agreement over how to negotiate fees, is seconded by Burke, and the motion passes 3-2, with Callahan and Shea against and Tuttle, Everitt, and Burke voting in favor of the proposal.~
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Applications for rentals
Fidelico dog walk
Fidelico Guide Dog Foundation would like to do a walk-a-thon June 4th at the Willows; space is available. Callahan motions to approve the application, Shea seconds, and the motion passes unanimously.
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Sean O’Brien is resubmitting his golf tournament application but could not be here as he had to work; a letter, the application and financials are included. Shea motions to approve, Callahan seconds and the motion passes unanimously.
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The Polar Plunge group was cancelled due to weather. They want to do it April 3rd. Callahan motions to approve, Shea seconds, and all are in favor.
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Finance Report
Golf-Witch House-Meters-Winter Island
Very small deposits were made in each case and not much has changed as of yet.
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Capital Projects
Superintendent’s Report
Spring-Summer brochure
This will go out at the end of March. They have sold 8 pages of ads which amounts to $4K of income, so it is moving along. The cover is nice.
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Parks & Facility
Playground update
Bollen went to the Phoenix school with a plaque. He also went to meet with Collins senators to get ideas for the playground and more meetings are forthcoming to move forward on the Broad St. playground. There was also a meeting with Pickman Park parents. The basketball court was resurfaced there.
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As for the playground they would like to call in and interview three companies, all of which would be under state bid and not pressed into an RFP; the design would then come before the Commission. The City is putting in $20K and they have raised $3K on their own, and would like to spend a total of $30K. Two playground companies will be interviewed March 1st. Pickman Park would like the sort of playground that can accommodate additions, to be built in May. DiBiasi will be completed as soon as the weather breaks. Tuttle agrees to go to the Pickman Park meeting.
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Callahan asks about the skateboard park and Furlong Park. There is no news on cleanup of the latter - liaison McCarthy will look into that. They are looking at $700K for remediation costs. Originally the area was filled in with buried fly ash then capped, and it is now exposed. This is in contrast with the $250K figure from earlier on.~
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Budget
The good news is they are asking for level funded but we don't have the full numbers yet.
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CBDG – Splaine and Skateboard Park
Bollen wanted the Gallows Hill skateboard park to have a fence that could be locked, as that's what other parks do when there are problems. McCarthy opines that Obama has cut Community Development Block
Grant (CDBG) funding and this may affect things. Bollen estimates costs for the new fence at the skateboard park and at Splaine Park would be$19K. Logistics are discussed.
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Winter Island Master Plan Committee report Feb 22 - Public hearing will be on the 3rd floor at 120 Washington St.
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Gangway and Float
NS Marine was awarded this for the Willows - $46K was the lower bid.
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Olde Salem Greens
As above, Golf Cart and Concession RFP’s were put out in case privatization did not go through. They do not have to be rewarded; if they are, though, they would go to the Council. A letter would be submitted to the mayor, who then asks about entering into lease agreements, then to the City council in next Thursdays' meeting, then referred to the Lease Committee, then to Council. It must be time sensitive as the course opens April 1st. Golf carts must be followed through so they are ready to go. Dick Drew has agreed to stay until someone is hired, so this issue is very time sensitive. Callahan asks about the signing of the lease [in the event of privatization] and if not signed in a timely manner, are first year payment affected?
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Tuttle says it would start April 1st, 45 days away.
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Park & Rec Appreciation Awards were on Feb 9th. Keep in mind those to nominate for next year.
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Movie fundraiser March 3
The Common Association will be working on this event, to be held at Hawthorne Hotel. Parts of the movie were filmed in Salem. They will charge $5.
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The 2nd round of interviews for the Winter Island manager position is wrapping up.~ A decision will be made soon.
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Old Business
New Business
Executive Session – Concession at Willows old bathhouse
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Adjournment: Next Meeting March 15, 2011
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A motion to go into executive session is made by Everitt, seconded by Callahan, who also moves to allow liaison McCarthy to stay, and all approve.
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This meeting ends at 8:20PM and Executive Session runs until 8:20PM.
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Respectfully submitted,
Stacy Kilb
Clerk, Salem Conservation Commission
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