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HomeMy Public PortalAboutAB 03-69 Attachment McCALL MUNICIPAL GOLF COURSE AMENDED AGREEMENT FOR PROFESSIONAL GOLF SERVICES THIS AGREEMENT, made and entered into this 22nd day of May, 2003, by and between the CITY OF McCALL, IDAHO, (the “City”) a Municipal Corporation, organized and existing under the laws of the State of Idaho, and Allan Morrison, whose address is 6130 Davis Avenue #38, McCall, Idaho, hereinafter called (“the Professional”). WITNESSETH: WHEREAS, the City owns a Twenty-Seven (27) hole golf course and clubhouse and desires to contract for five (5) years ending December 31, 2007, for the operation thereof by the Professional upon the terms and conditions hereinafter set forth; NOW THEREFORE, the parties do hereby mutually agree as follows: I. QUALIFICATIONS OF PROFESSIONAL: Professional shall be a Class A member of the Professional Golf Association (PGA) in good standing for the duration of this agreement. All services rendered shall be in conformity with the PGA Code of Ethics. II. GENERAL CONDITIONS: A. Definitions: 1. Professional: Allan Morrison; 2. City: The City of McCall, Valley County, Idaho; 3. Director of Golf and Parks Operations: The Director of Golf and Parks Operations as appointed by the McCall City Manager, pursuant to McCall City Code § 1-9-9; 4. Season: The official golf season shall run from May 1 through September 30. The length of the Season may be adjusted as weather permits. 5. Golf Advisory Committee: The Golf Course Advisory Committee, as established by the McCall City Council, pursuant to McCall City Code § 1-10-1; 6. Course: McCall Municipal Golf Course 7. Data: In addition to other data required to be provided in this Agreement, the Professional shall provide the following minimum data to the City Treasurer: (1) daily tee sheet log; (2) marshal payroll records; (3) season/discount pass sales; (4) prepaid tournament entrance fees; (5) trail PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 1 fees; and (6) locker fees. The City Treasurer has authority to require additional data and to establish the form in which the data must be submitted. 8. Information: In addition to other data required to be provided in this Agreement, the Professional shall submit the following minimum information to the City Treasurer: (1) any and all information necessary to perform an audit, including payroll data; and (2) profit and loss information for Restaurant operations. The City Treasurer has authority to require additional data and to establish the form in which the data must be submitted. 9. City Manager: The City Manager of the City of McCall, as appointed by the McCall City Council, pursuant to McCall City Code § 1-7-1; 10. City Treasurer: The Treasurer of the City of McCall, as appointed by the McCall City Manager, pursuant to McCall City Code § 1-9-9; 11. City Auditors: The independent financial auditors of the City McCall, employed by the City pursuant to Idaho Code § 67-450B; B. The Professional shall be an independent contractor and not an employee of the City. C. The Professional shall be solely responsible for hiring, training and supervising all assistants, marshals, starters and such other employees as are necessary to satisfactorily perform his duties under this agreement. D. The Professional shall attend all meetings of the Golf Advisory Committee, and meet periodically with the City Manager and the Director of Golf and Parks Operations in order to maintain effective communications and enhance the quality of overall operation and maintenance of the City’s Golf Course and Golf Club House; it shall be the responsibility of the Director of Golf and Parks Operations to inform the Professional of the time and place of Golf Advisory Committee meetings, and the Professional is entitled to reasonable vacations, one or more of which may conflict with such a meeting; E. The Professional shall propose to the Director of Golf and Parks Operations recommended changes in the fee structure following each season for the coming year. The Professional is required to facilitate at least one meeting with the Golf Advisory Committee when formulating the fee structure recommendation. The Professional and the Director of Golf and Parks Operations will jointly present the recommended structure to the City Council for action. The Professional shall request approval from the City Manager for any temporary changes in the adopted fees to allow for discounts to help increase play during underutilized times. PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 2 F. The Professional shall meet on a weekly basis with the Director of Golf and Parks Operations to discuss the Professional’s performance under this agreement as well as any areas of concern the Professional may have with the maintenance of the course. The Director of Golf and Parks Operations will report any unresolved concerns to the City Manager in writing, with a copy to the Professional, within two working days of the meeting. If the Director of Golf and Parks Operations is unavailable, the Professional shall meet with the City Manager. G. The Professional shall conform his conduct to all applicable laws and regulations, including but not limited to, payment of payroll taxes, provision of worker's compensation coverage, and obtaining and maintaining all necessary business licenses. H. The Professional's responsibility shall extend throughout the Season at the Course and such period of time immediately prior and subsequent as are necessary to prepare for seasonal operations and to conclude each season's activities. I. The Professional shall, at his expense, maintain such records as are directed by the City Treasurer so as to provide meaningful cost and revenue data on the major elements of his operations, including revenue and expense breakouts for each major element of his operation. This shall include at a minimum, cost- revenue data for the 1) practice range, 2) pro shop merchandising, including costs of goods, 3) Restaurant operations, 4) daily and seasonal passes and trail fees, and 5) cart and equipment rentals. J. The Professional shall also remit all receipts to the City on the next business day along with summary reports, journal tapes, and “Z” tapes annotated with explanations for any differences between register tapes and actual receipts; itemize state sales tax separately from sales price on all individual transactions at the Restaurant, and to account separately for sales tax in all reports furnished to the City in cooperation with the City; and to provide a change bank for each cash register The Professional will collect and remit all sales taxes to the State of Idaho within the prescribed timeframe. K. The Information format and reporting cycle(s) shall be at the discretion of the City Treasurer who shall be authorized to establish such audit controls as the Professional deems appropriate including, but not limited to, such Information and documents as necessary to perform an audit. The City Treasurer and the Professional shall develop the format and timeframes and provide a copy of the formats and timeframes to the City Manager for review and approval prior to May st 1 each year. The City may withhold payment to the Professional if the required Information is not provided as outlined in the approved timeframe. This shall require provision of individual payroll data for all employees as well as compensation to any individuals working as independent contractors. This data PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 3 shall be deemed confidential in nature, with disclosure limited to the City Treasurer, the City Manager, the Director of Golf and Parks Operations, and the City Auditors. Public disclosure shall be exempt pursuant to Section 9-340 Idaho Code, unless otherwise agreed to by the Professional. L. At any time discussion of the data referred to herein is required between the City Council and the Professional, such discussion by the City Council would be open to the public. Therefore, it is understood that the Professional will request an executive session with the City Council to hold this discussion in private. Failure to request an executive session will be deemed to be consent by the Professional for public disclosure of such data discussed. M. All services and facilities shall be offered and operated on a non- discriminatory basis to all members of the public in conformance with the fees and rules established by the City of McCall. N. The City Manager, or his designee, shall be the City’s representative for the administration of this contract. Unless otherwise directed by the City Manager, the Director of Golf and Parks Operations is that designee for all operational issues. O. The Professional may at its expense install and provide equipment, appliances, fixtures, or other improvements to areas under the Professional’s control with the prior written approval of the City Manager. Unless otherwise agreed to, all items installed by the Professional under this section will become the property of the City upon the expiration of this Agreement, unless removed by the Professional prior to that date; if the Professional thus removes any appliance, fixture or improvement installed by it, it shall at its expense return and reinstall any stored City equivalent. The City shall add improvements made under this section to the items subject to buy out by the Professional’s successor. III. PROFESSIONAL SERVICES: A. Duties - Control of Golf Play 1. The Professional shall be responsible for collecting and remitting all fees associated with play at the City's Course including daily fees, seasonal pass fees, trail fees, locker fees and fees, if any established for City-owned public cart storage. All fees, including applicable sales tax, shall be remitted to the City or its designee the first business day following receipt. In addition, the Professional shall provide a listing of season pass holders’ names and addresses when remitting the fees to the City. 2. The Professional shall accept tee time reservations and schedule regular play in conformity with the regulations adopted by the City during the Season as determined by the City. The tee sheet daily log of all players PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 4 shall be forwarded daily to the City Treasurer. Seasonal and life passes shall be honored for play. 3. The Professional shall monitor play and players upon the course so as to ensure timely progression of play, observation of golf etiquette and preservation of turf conditions. Toward this end the Professional shall provide vehicles for and employ golf course marshals for not less than 750 hours for the Season as required to enforce golf course rules and regulations; provided, however, the City reserves the right to assume directly the responsibility for employment and supervision of the marshals; in such event, the management fee shall be subject to adjustment to reflect any reduction in costs to the Professional. 4. The Professional shall provide an adequate supply of high quality score cards and pencils sufficient for play during the Season. The Professional can include advertising on the score cards to defray costs. 5. The Professional shall have the authority to remove or prohibit anyone from the course who willfully violates course rules, regulations or accepted golf etiquette; such decisions may be appealed in writing to the City which shall set a hearing within sixteen (16) days of receipt of the appeal. The City's decision on such matters shall be final. Appeals shall be mailed to: City Clerk, City of McCall, 216 East Park Street, McCall, Idaho, 83638. A valid appeal must be received not later than fifteen (15) calendar days after the event or incident. 6. Course rules and regulations and playing fees shall be established and approved by the City Council, and shall be published and posted by the Professional together with locker rental, cart storage and trail fees in a conspicuous place at the Golf Course Clubhouse and filed with the City Clerk. 7. It is agreed that at a minimum the data to be provided to the City Treasurer or designee is the following: a. Daily Tee Sheet Log - daily b. Marshall Payroll Records - pay cycle c. Season/Discount Pass Sales - as received d. Prepaid Tournament Entrants - as received e. Trail Fees - as received f. Locker Fees - as received B. Duties -Tournaments 1. The approved annual tournament schedule shall include conduct of the following: PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 5 a. McCall Amateur b. McCall Chapman c. McCall Pro-Am d. Two Man Best Ball e. Two Lady Best Ball f. Two Man Scramble g. Idaho BSU Tournament (or comparable event) h. The McCall Seniors Tournament i. The Idaho Junior Golf Association Tournament. 2. The Professional shall be responsible for setting the actual dates of tournament play in coordination with the Idaho Golf Association Tournament Committee. No greens fees are chargeable for these approved tournaments, provided that with the exception of the Junior Amateur tournament, a surcharge of $10.00 for each participant to a maximum of $20.00 per player per event, will be paid to the City. Tournament round payments to the City will be net of applicable sales tax but not subject to other reductions. Proposed changes to the above schedule of approved tournaments shall be first submitted by the Professional to the Golf Advisory Committee for review and recommendation prior to submission to the City Council for possible action; if approved by resolution it shall be deemed incorporated in this agreement by reference. The Professional shall so manage tournaments as to assure that no less than nine (9) holes of the golf course remain available for public play during tournaments unless approved in writing by the City Manager or, in the event of adverse weather, by verbal approval by the Director of Golf and Parks Operations. All twenty-seven (27) holes will be used for the two days of 2 Man Best Ball and the two days of the McCall Amateur tournament. 3. The Professional shall also be responsible for scheduling convention tournaments, men’s and women’s golf association tournaments and league play and such other tournaments, including convention related play, as can be reasonably accommodated at the golf course considering weather, seasonality, course playing conditions and utilization by season pass holders. 4. The Professional shall cooperate with the conduct of the McCall "Calcutta." 5. In lieu of maintaining a separate trust account with the City named as joint trustee for prepaid tournament fees; the Professional shall provide a $200,000 Performance bond payable to the City as protection against the possible misuse of tournament funds, failure to remit sales tax owed on funds paid to the City or appropriate handling of funds due to the City. In addition, a list of all tournament entrants, to include mailing addresses, PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 6 shall be provided to the Treasurer as funds are deposited. The Professional shall be responsible for covering all tournament expenses and prizes in an amount equal to the tournament fees less the $10.00 greens fee surcharge paid to the City. 6. The Professional shall maintain an adequate inventory of golf equipment, accessories and apparel so as to guarantee a reasonable selection of merchandise as prizes for tournament review. 7. The Professional shall maintain a waiting list for all tournaments and provide a copy of the list to the City at the conclusion of each tournament. 8. The Professional shall maintain a participant list for all tournaments, to include contact information for each player, and provide a copy of the list to the City at the conclusion of each tournament. C. Duties - Instruction 1. The Professional, or a PGA Assistant, shall conduct twenty (20) hours per year of free golf instruction to at least ten (10) area youth between nine (9) and fifteen (15) years old. Scheduling shall be coordinated with the City's Recreation Department. In the event that reasonable recruitment efforts are undertaken and the Professional fails to locate sufficient numbers of youth to undertake these lessons, failure to achieve this provision of the agreement shall not be cause for termination provided the Professional is able to document the recruitment efforts. 2. Instructional staff shall be made available for private instruction in conjunction with the Practice Range. The Professional and his staff have the exclusive right to instruction at Course, and may set their own rates. D. Duties - Storage/Locker Area The Professional shall be responsible for the operation of the club and cart storage and locker area within lower level of the Clubhouse facility. This shall include policing and cleaning the storage and locker areas generally. The Professional shall allocate the lockers and storage area in an equitable manner, collect all established fees and remit same as provided above to the City. E. Duties – Restaurant and Bar 1. The Professional shall have the exclusive right to operate the Restaurant, which shall include performing the following duties, as well as other duties necessarily implied herein: PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 7 a. To hire, fire, and supervise all Restaurant employees engaged in the operation of the business of the Restaurant, to include bartenders, wait persons, bus and cleaning persons (except such as are furnished by caterers contracting with persons reserving the building for an event, provided the Professional approves use of the facility for a catered event); to be responsible for salaries and benefits and ensure compliance with all state and federal labor laws including FICA, state and federal income tax withholding, unemployment insurance and workman’s compensation insurance; b. To furnish the City with a Certificate of Insurance evidencing Workman’s Compensation Insurance for its employees; to provide $500,000 single limit insurance in the following categories: general liability, products (food and drink), maintenance, and liquor liability; to provide $10,000 cash loss, theft or embezzlement bond or insurance; and to provide a Certificate of Insurance evidencing such insurance and the naming of the City as an additional insured on all such policies; c. If the Professional elects to accept credit cards, to request proof of identity of the cardholder submitting the card if that identity is not already known; d. To provide the necessary food, beverages and consumable supplies used in the business of Restaurant and to operate the bar; e. To determine the prices to be charged for food and drink served in Restaurant, none of which prices shall be stated to include sales tax; f. To do no act which in any way implies that the Professional has any interest in the beverage dispensary licenses applicable to the Restaurant, which are and will remain the property of the City or are issued by and revocable by the City; g. To comply with all terms of the Special Use (Conditional Use) Permit for the golf clubhouse, insofar as relates to operations of the Restaurant; h. To furnish each month a profit and loss statement for the Restaurant operations in form and content satisfactory to the City Treasurer, including a full statement of expenses with supporting receipts, and proof of payment of unemployment insurance, payroll taxes and withholding, sales taxes and PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 8 workman’s compensation insurance; to track differences between the sales documented and the actual deposits made by the Professional and make the City whole for any shortage on a monthly basis; and not later than sixty days after the end of operations for each year of this Agreement, to furnish a complete financial report to the City to include balance sheets, and profit and loss statements, in form and content satisfactory to the City Treasurer; i. To, at a minimum, operate the Restaurant during the Season during daylight hours, handling all bookings and coordinating services; arranging and paying for telephone, garbage, lights, heat, water, and sewer as necessary for clubhouse use, during the period of this Agreement; to handle all reservation- making for the use of the Restaurant or Clubhouse; and to inspect the premises daily to ensure that the heating and other systems are functional. During the times, if any that the Course is closed by weather or other causes beyond the Professional’s control; the Professional may in its discretion close the Restaurant. The Professional shall obtain at its own expense any menus not on site; j. To provide fresh drinking water to golfers at no less than 5 locations on the Course using City provided containers; k. To reasonably ensure employees do not smoke while working in the Restaurant food preparation area or behind the bar; l. To reasonably ensure that employees do not consume alcohol while working; m. To ensure all employees are dressed professionally, are clean, courteous, efficient, and neat in appearance and are health certified (T.B., etc.), for food handling and preparation; n. USE OF PREMISES BY THE CITY FOR MEETINGS: The City may use a portion of the restaurant for meetings without charge. Said meetings will not be deemed to cause a disruption to the Professional. Notice of such meetings shall be given by the City as soon as they are scheduled and such meetings will be rescheduled by the City if prior reservations have been made of Clubhouse use. F. Duties - Other PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 9 1. The Professional, in cooperation with the McCall Men's and Women's Golf Associations, shall provide for sanctioned handicapping in coordination with the USGA and IGA to include collection and payment of fees. The Professional shall also coordinate league play and tournament play activities with both organizations. 2. The Professional shall make himself available to the City's Golf Advisory Committee for information and consulting purposes so as to facilitate their duties as advisors to the City Council of the City; The Professional shall likewise cooperate with the Director of Golf and Parks Operations so as to deal appropriately with Course conditions and tournament play. 3. The Professional shall develop and implement a marketing plan for promoting, advertising and developing play at the Course; the cost associated with this shall be borne by the City subject to their review and prior approval; the initial annual budget figure is $2,500.00, subject to change on an annual basis. The marketing plan shall include, in addition to a proposed budget, targeted objectives and a summary of planned activities designed to progress towards these objectives. The Professional shall review the plan with the Golf Advisory Committee prior to submission to the City, the final plan must be provided to the City prior to March 31 annually for the following golf season commencing March 2004. 4. The Professional shall cooperate with the City’s Auditors. IV. FACILITY OPERATIONS AND MAINTENANCE: A. Pro Shop 1. The Professional shall have exclusive right to operate the area set aside as a pro shop within the Clubhouse for the purpose of displaying and merchandising golf and sporting equipment, accessories, and apparel. The Professional shall maintain a level of inventory throughout the season sufficient to permit an adequate selection for patrons of the Course, including tournament players. Daily and seasonal golf passes, as well as cart, club and locker rentals shall be available through the Pro Shop. 2. The Professional shall provide staff and operate the Pro Shop so as to maximize play available to the golfing public, course conditions and weather permitting. 3. The Professional shall, at a minimum, keep the Pro Shop open and staffed from 7:00 a.m. to 9:00 p.m., each day from June 1 through September 5th; operating hours prior to June 1 and subsequent to PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 10 September 5th shall be based on hours playable due to weather and daylight. If the Course is closed by the Director of Golf and Parks Operations, the Professional may close the Pro Shop. 4. The Professional shall maintain through-out the playing season a Pro Shop telephone (634-7200) and will cover the costs of one line for call in purposes. In addition, the Professional shall make arrangements for an answering system in the off-season. The phone number is the property of the City. B. Practice Range 1. The Professional shall have exclusive right to operate the area set aside as a practice range for the use of the golfing public. The Professional shall likewise be entitled to exclusively conduct golf instruction at the range for remuneration. Instruction shall be made available to individuals and groups, PGA qualified instructors shall be available at reasonable times. 2. The Professional shall be responsible for providing quality range balls, baskets and clubs in sufficient numbers to assure their availability throughout the season and may charge fees for their use. Responsibility for collecting, cleaning and disbursing the balls shall likewise be the Professional’s responsibility. Portable tee mats may be made available at such time as are necessary to permit use of the range when use of the turf tee area is undesirable. Permanent tees, other than natural turf may be installed at the Professional's expense, but only in consultation with and subject to the approval of the Director of Golf and Parks Operations. Likewise, any structures or facilities used for storage or disbursing of range balls shall be subject to like conditions and approval. If approved, they are included in the Professional’s buy-out as herein provided. 3. Turf upkeep and mowing is not the responsibility of the Professional, but the Professional shall coordinate his operations with the Director of Golf and Parks Operations to permit timely turf maintenance activities by the Director of Golf and Parks Operations. 4. The Professional shall be responsible for policing the tee area of the practice range, as well as the maintenance of any equipment utilized by him in conjunction with the operation of the practice range. 5. The Professional shall keep specific records reflecting daily volume, revenues, expenditures, and all other income or expenses, direct or indirect, which can be reasonably attributed to the management and operation of the practice range. These records shall be summarized PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 11 monthly and made available to the City or its designee at least monthly or upon request. C. Clubhouse and Restaurant 1. The Professional accepts the Restaurant in its present condition, after complete inspection of the same. The Professional shall furnish the City a dated inventory, signed by the Professional, of all equipment and fixtures found by the Professional at the Restaurant when taking inventory in anticipation of possession. The Professional may remove City-owned fixtures and appliances at the Professional’s expense, and replace them with equal or better also at its expense, provided the Professional first obtains the written consent of the City Manager as to the change and as to storage or disposition of City property. 2. The Professional may, at its sole discretion, offer complimentary staff meals, and complimentary food and beverage to select guests as a promotional tool. D. Club/Cart Rentals 1. Rental of powered and pull carts, bags/clubs - The Professional shall provide, each day the course is open at least fifty (50) golf carts, electrically powered carts preferred, all in good repair, for rental to golf course patrons. The Professional shall pay all expenses related to said carts, and shall receive all rental income for his own account. Rental rates for use of equipment shall be determined by him. 2. This right to rent carts, bags and clubs shall be exclusive. 3. The Professional shall have exclusive rights to lost ball/water ball concession. E. Maintenance 1. The Professional shall be responsible for routine cleaning of the areas for which the Professional has facility responsibility and as otherwise detailed below. The Professional shall report any problem with building maintenance and utilities to the Director of Golf and Parks Operations. The Professional has no authority to contract for parts or services for building maintenance or utilities. The City shall perform all maintenance and City shall perform such maintenance as soon as reasonably practical. The City shall coordinate its maintenance with the Professional’s operation. PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 12 a. Inspection: The Professional shall make or cause to be made a daily physical inspection of the Clubhouse and adjacent grounds, including the parking lot, putting green, and practice range tee area reporting any unusual or unsafe conditions to the Director of Golf and Parks Operations immediately. b. Clubhouse: The Professional shall provide janitorial services for the pro shop area upstairs and the lower level in its entirety, including lower level restrooms. These shall include, but not be limited to cleaning of windows, shampooing and cleaning carpets, and cleaning of restrooms, storage and locker areas. c. Grounds: The Professional shall police daily or as necessary the Clubhouse grounds, putting green, parking lot and practice range tee area, collecting and disposing of any litter accumulation. d. Equipment Maintenance and Repair: The Professional shall be responsible for routine cleaning of City owned fixtures and equipment used by the Professional and shall secure approval from the Director of Golf and Parks Operations prior to hiring out that service or purchasing replacement parts for such item. The exhaust hood system and the fire suppression system are the City’s responsibility. e. Restaurant: The Professional shall ensure that the facility is kept clean and attractive, including maintaining upstairs lobby, deck and restrooms as well as providing towels, tissue, soap and other supplies, to include cleaning all furniture, fixtures and appliances devoted to Restaurant use, including the interior walls and floor coverings, normal wear and tear excluded. The facility shall acquire and maintain at an A rating upon any inspection by authorized governmental agencies. f. Utilities: The Professional shall assume full responsibility and expense for all private telephone service, electrical or gas cart service, and routine cleaning of cart storage areas. The Professional shall also assume responsibility of his personal taxes, merchant invoices, and all other liabilities with respect to his operation of the clubhouse and restaurant. g. Supplies: The Professional shall provide at his expense, supplies and tools necessary for carrying out his maintenance responsibilities, including light bulbs, soap, paper products and like consumables. PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 13 2. The City shall be responsible for all facility and ground maintenance and repair otherwise required, including electrical, plumbing and any structural matters, upkeep of landscaping and turf conditions and paving. V. FEES: A. Compensation 1. Fixed fee compensation. In consideration of the professional services being rendered and the management, operation and maintenance of the City facilities as set forth in this Agreement, the Professional shall receive nd an annual management fee of $150,000 payable one-tenth (1/10) on the 2 th and 4 Friday of the months May through September. Payment is contingent on the Professional providing the monthly reports required under this agreement. Compensation is based on the calendar year. 2. All time compensation. In the event total revenues from the Clubhouse rents and Restaurant sales exceed $150,000, the Professional and the City shall split the excess revenues on a basis of 10% to the City, 90% to the Professional for amounts between $150,000 and $209,999. Clubhouse and Restaurant revenues at or above $210,000 shall be split 5% to the City and 95% to the Professional. In the event that golf operations (i.e. greens fees, season passes, trail fees, and locker rentals) exceed $500,000 and Clubhouse rents and Restaurant sales exceed $175,000, the Professional and the City shall split the excess golf operation revenue on a basis of 92% to the City and 8% to the Professional. If golf operations revenue exceeds $530,000, those dollars above $530,000 shall be split 50% to both the City and the Professional, provided the Professional uses these funds for approved equipment or facility improvements, which will be included in the Professional’s buy out. 3. The Professional will be granted, upon written request, an advance of all time compensation in an amount equal to 90% of actual restaurant sales. 4. The Professional shall receive the Professional’s portion of the all time compensation B. If either party to this Agreement believes that a change in the annual management fee would be justified, they shall submit a request for renegotiation supported by a justification. The annual fixed fee schedule for the balance of the term following the completion of the first year's operation, may be renegotiated to a maximum adjustment of 5% up or down. C. All golf operations will be collected by the Professional on behalf of the City. The Professional shall remit to the City the full amount collected, less an PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 14 agreed upon credit card discount and sales tax due, for green fees, season passes, trail fees, locker rentals, refunds and reimbursements, interest revenue, private contributions, sales of surplus property, restaurant sales, alcoholic beverage sales, and clubhouse rental. The professional shall remit to the City $10.00 per approved tournament round less sales tax. The Professional shall remit the funds on the first working day following the collection of the revenues. When the $150,000 Clubhouse threshold is met, the Professional shall reduce the Clubhouse related revenues to the appropriate City split for the remainder of each calendar year. Tournament entries must be documented on a daily basis defined above. All other revenues shall remain with the Professional. In the event that a patron makes a purchase on a credit card that includes revenues due to both the Professional and the City, the Professional shall reimburse the City the full amount of the City’s portion of the transaction, less proportional credit card fees and sales tax. The Professional’s revenues include cart and equipment rental, driving range fees, pro shop sales, lessons, and tournament revenue other than as mentioned above. The Professional shall provide supporting documentation as determined by the City with all payments made. D. The Professional’s net taxable income earned through his duties under this contract shall not be permitted to exceed the fixed management fee of $150,000. Compensation is net taxable income actually earned by the Professional himself, and as defined by applicable provisions of the Internal Revenue Code. The collection of fees in the Clubhouse for uses or services provided elsewhere shall be deemed an incidental use. Upon the close of the Season, and prior to the close of the calendar year, the Professional shall be obligated to determine, and advise the City, in writing, whether or not the fee limit has been exceeded. In the event it has been, the excess remuneration shall be deemed City fee revenues and remitted forthwith to the City. E. The parties to this Agreement shall at all times comply with the covenants relating to the tax-exempt status of the bonds and other obligations issued by the City to finance improvements to the Course. To the extent of any conflict between the terms of this Agreement and the provisions of the City's covenants relating to tax exemption on its bonds and other obligations, the covenants relating to tax exemption shall prevail. VI. CITY’S GENERAL OBLIGATIONS: A. The City shall maintain the Course, including practice range, to its own standards. This does not preclude advice from the Professional on such matters, but such advice does not obligate the City to take action. B. The City shall determine the official opening and closing days each season, as well as any necessary closures during such season. The decision to close shall be made by the City. The susceptibility of the course to damage from play, personal safety of the golfers, and the like shall be the criteria upon which such PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 15 decisions shall be made. Inclement weather conditions alone shall not constitute grounds for closure unless its degree or duration gives rise to the adverse consequences outlined. C. The City does not guarantee an uninterrupted supply of water, or electric current; nor does the City guarantee uninterrupted service in providing any utilities. The City shall not be liable to the Professional for any loss, damage, cost or expense which may result from the interruption or failure of any utility services. D. The City shall obtain all liquor licenses at the City’s expense, and shall keep them in effect at the City’s cost, for the duration of this Contract. VII. MISCELLANEOUS: A. This agreement is assignable, only upon the City's prior written consent and approval. The City shall not unreasonably withhold such consent. B. The Professional, at his expense, may make improvements to the pro shop, the Clubhouse, and/or the Restaurant, such as painting, draperies and floor coverings with prior written approval of the City Manager. The actual cost of any such approved expenditures shall be included in the Professional’s buy out. C. Each party to the Agreement shall bear the risk of loss to the individually owned fixtures, equipment, inventory, or structures. Each shall obtain and maintain such casualty insurance as they deem desirable or appropriate to protect against the risks involved, whether damage, theft, or other loss. D. Persistent difficulties with the public, as evidenced by public complaints which are detrimental to the Golf Course operation, shall be deemed cause for not renewing the agreement or cause for termination. Public complaints about the operation of concessions or the golf play activity shall be deemed those submitted in writing, signed, and addressed as follows: City Clerk, City Hall, 216 East Park Street, McCall, Idaho, 83638. Such complaints shall be copied to the Professional and entered into a file in the City Clerk's office and shall be considered at the Agreement renewal time or if action to terminate this Agreement is commenced. E. The parties to this Agreement shall not conduct or suffer or permit others to conduct any golfing business activity (e.g. manufacturer’s demonstration day) on the Course except as specifically enumerated herein, unless it is agreed by both parties that it is mutually beneficial. F. The Professional shall not engage in any form of unlawful activity on the premises of the Course, and shall not permit or condone any such activity by employees, customers, or others. If observing illegal conduct by employees, customers, or others, the Professional shall report the matter to the police. In that PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 16 connection, the Professional shall reasonably attempt to provide a drug-free workplace and shall promptly discharge any employee found to be engaging in any unlawful activity or sexual harassment. G. The Professional agrees to buy out the previous Professional for on hand Professional-owned inventory and fixtures, equipment and golf carts, except for distressed or damaged merchandise in the manner described in paragraph VIII.G. below. H. Golf play activities and concessions shall be operated in a business-like manner and, unless addressed by the terms of this Agreement, the Professional shall have the right to conduct these businesses otherwise unhindered by the City. I. Business financial information furnished to City by the Professional shall be confidential and protected from disclosure as allowed under I.C. § 9-340. Such information may be made available by City to the City Manager, City Treasurer, City Attorney, and City Auditors. In the event of termination of this Agreement by either party, the most recent two years of financial data shall be provided by the Professional to the top five incoming candidates as identified by the City. If the Professional is unavailable, the City will release the summary information relating to sales and expenses. J. This Agreement contains all agreements of the parties. All prior negotiations and discussions, and all prior agreements if any, are merged into and extinguished by this Agreement. K. The Director of Golf and Parks Operations and his staff, the Professional, his spouse, his children, and his staff shall be exempt from paying greens fees. Additionally, the Professional may provide complimentary rounds to visiting professionals or to other parties as a marketing tool, provided the round is reported as such. The Director of Golf and Parks Operations may limit the number of complimentary rounds. The City Manager may provide free or discounted season passes in support of charitable organizations on a limited basis. L. Should the expenditures exceed revenues for two consecutive seasons, the City reserves the right to request a renegotiation of the contract with six months prior notice. VIII. TERMINATION: A. The parties hereto agree that this agreement is for a term of five (5) years. Should the City seek to terminate the Professional, it may do so only upon the following terms: 1. Termination shall not be allowed without a material breach on the part of the Professional. Material breaches include, but are not limited to, PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 17 sexual harassment, racial discrimination, drunkenness on the job, or gross failure to perform according to the terms of this Agreement. 2. Should the City allege a breach of a material term of this Agreement, the first step in the process shall be for the City to provide the Professional written notification of the alleged breach and the names and substance of the witnesses which have convinced them that such a material breach has occurred. The City is not required to take every criticism or opinion from any person to them as an actionable material breach. If , however, the allegation is deemed material, the City and the Professional shall submit the issues to the City Manager. If the City Manager does not find a material breach, the matter shall be deemed final. If the City Manager finds a material breach, the Professional shall be placed on one month probation to allow him to cure or remedy, to the best of his ability, the alleged breach. 3. For a second or subsequent alleged material breach the parties shall submit the issues to non-binding mediation. The mediator shall be a person upon whom the City and the Professional can both agree. If the mediator finds no material breach, the matter shall be deemed final. If, however, the mediator finds a material breach, the City shall have the option of going on to the arbitration for termination as set forth below, or to fashion some other remedy which it finds acceptable. 4. The procedure required for termination of the Professional for a material breach of this Agreement shall be for parties to submit the same to binding arbitration. In that respect, should the City seek to terminate the Professional, the City shall select one arbiter, the Professional shall select one arbiter, and the two selected arbiters shall select a third arbiter. The matters which the City contend justify the termination shall be submitted in writing to the Professional at least 30 days in advance of the arbitration panel selection commencing. Upon selecting the arbitration panel, the parties shall provide testimony in accordance with the rules of arbitration as adopted in Idaho at the time. 5. The parties acknowledge the difficult position of the Professional in dealing with the public and agree not to seek mediation for matters which are not clearly material breaches of the Agreement or which are not the direct fault of the Professional. B. The Professional may terminate this Agreement with thirty (30) days written notice for any non-payment by the City, or for other material cause or breach of the terms of this Agreement. In such event, the City has ten (10) days from receipt of the Professional’s notice of termination to cure the defects in such notice. PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 18 C. In the event the Professional is unable to perform due to death, physical disability or mental incapacity, this Agreement shall be deemed terminated. D. In the event of non-performance by either party of non-material terms of this Agreement, the other shall provide written notice of the basis of non-performance; the notified party shall have thirty (30) days to cure the default. If it is not cured within that period, the parties agree to meet and try to come to an agreement as to how to handle the problem. Non-performance of non-material terms of the Agreement is not grounds for termination. E. Upon termination, if it should occur in the first year of this Agreement, the annual amounts, if any, accrued and payable to Professional by the City shall be determined and pro-rated as necessary as of the date of termination; the basis for pro-rating shall be based on the following monthly values: January—May $1,000/month June—October $25,000/month November—December $10,000/month F. Upon termination any year after the first year of this Agreement, the Professional shall receive payment from the City of the amount he would have made for one full year following the date of termination, such amount to be based on the performance of the Professional for the first year of the Agreement. G. Upon termination, the City agrees to require any successor contractor to buy out the Professional, or his guardians, heirs or estate, as the case may be, for on- hand Professional-owned inventory and fixtures, equipment and golf carts, except for distressed or damaged merchandise (as determined by the evaluators set forth below if a dispute exists as to the issue of distressed or damaged merchandise), as follows (a list of said inventory, fixtures, equipment and golf carts is attached hereto as Exhibit ___): 1. Buy-out as used herein means a cash payment in full, not on terms; and 2. On-hand inventory - actual cost; 3. Fixtures, equipment and golf carts - the fair market value as agreed to by the successor and Professional or representatives, provided those items were either purchased as part of the Professional’s initial buy out obligation or purchased thereafter with the written approval of the City and identified as subject to buy out upon termination; 4. The time limits for buy-out are as follows: PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 19 a. The Successor and Professional shall have 10 calendar days following appointment of a proposed Successor to negotiate the values (the appointment of a proposed Successor shall not be in excess of 90 days from the date of termination unless otherwise extended by the Professional). If the appointment is not extended, the time period for the following buy-out provisions shall commence between the City and st Professional on the 91 day following termination; and b. If the Successor (or City if applicable) and Professional are not able to reach an agreement over the values within the foregoing 10 day period, they have a total of 7 calendar days thereafter to agree on one or more (up to 3) third parties to determine the values of all disputed items; and c. The third party evaluator(s) shall have 14 days from the date of their selection to place a value on all the disputed items. The values so determined are binding on the Successor (or City if applicable); and d. The Professional shall have 5 days from the date of his receipt of the final valuation to agree or reject the values; and e. If the Professional accepts the evaluation, the Successor has 45 days to pay for the same in cash (no terms); and f. If the Professional does not accept the valuation within the time set forth above, the City and the Successor are relieved of their respective duties to require a successor contractor to purchase the inventory, fixtures, equipment and golf carts. 5. The Professional and Successor (or City if applicable) shall split evenly the cost of the evaluators; and 6. If the Professional seeks to sell the Professional-owned inventory, fixtures, equipment and golf carts to someone other than a successor contractor, the City shall have a first right of refusal and has the option to purchase all, but not some, of the above-mentioned items. The right of first refusal applies to any sale by the Professional to a third party within 14 days of the finality of the foregoing buy-out procedure. Should the Professional not desire to sell, he has no obligation to provide the City with a first refusal. IX. COVENANT NOT TO COMPETE: A. Grant of Covenant. Within the geographic area and during the time period set forth in Section IX.A.2 hereof, the Professional shall not (unless acting as an employee of City or with City’s prior written consent): PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 20 1. Accept employment or conduct business as a golf Professional for or on behalf of any golf course within the prohibited geographic area. Employment or business as used herein shall mean any activity by the Professional, directly or indirectly, whether or not for compensation (as proprietor, partner, stockholder \[except that a less than one percent (1%) ownership interest in a public corporation shall be permitted\], officer, director, agent, employee, consultant, trustee, affiliate, individual, or otherwise), with or for any golf course, and will include the conduct of any business, activity, advise, assistance, or the like which is, or as a result of the engagement or participation of the Professional, would become, competitive with, or adverse to, the City’s golf business. The City’s golf business shall herein be referred to as the “Protected Business”; 2. Permit his name or any derivation thereof to be used by or in connection with any business or activity (even if without compensation) competitive or adverse in any respect with the Protected Business, whether by way of advertising, solicitation, promotion or otherwise; 3. Solicit or divert, or attempt to call on, solicit or divert, any customer or client (whether presently or potentially a client or customer) of the Protected Business with whom he became or becomes acquainted during his involvement with the Protected Business, or otherwise, either for himself/itself or for any other person, firm, entity, LLC, partnership, or corporation; or 4. Induce or attempt to induce any person who is an employee, agent or consultant of the Protected Business to leave the employ of the Protected Business; or 5. Assist or participate in any manner whatsoever with a friend, relative, or acquaintance with any golf activity which could be competitive or adverse in any respect, material or not, with the Protected Business. B. Scope of Covenant. The Covenant granted in Section A shall remain in effect for a period of two (2) years from the date hereof (the "Covenant Term"), and shall preclude the Professional from carrying on any activity described in Section A, including the normal evolution thereof, anywhere within the Counties of Boise, Idaho, Valley or Adams, in the State of Idaho. The Covenant shall terminate (i) upon the expiration of the Covenant Term; (ii) if and to the extent that the protected Business shall be abandoned without sale or transfer to a successor or assign; or (iii) upon the mutual written agreement of City, on the one hand, and the Professional, on the other hand. C. Payment for Covenant. PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 21 1. Covenant Fee. The consideration for this Covenant is the contractual terms hereof which both parties deem of significant importance to warrant the Covenant. D. Effectiveness of Agreement. The parties agree that this Agreement shall not be effective nor binding between the parties until the Execution Date. E. Remedies. The Professional (i) acknowledges that this Covenant is an integral part of, and a condition to the obligations of City under this Agreement, (ii) acknowledge that the City is relying on the promise of the Professional to refrain from any activity which would or could be damaging to City’s business in any way, (iii) acknowledges that a breach, no matter how minor, of the Covenant contained herein will result in irreparable and continuing damage to City and the Protected Business for which there will be no adequate remedy at law, and (iv) agrees that in the event of any breach of the Covenant, City shall be entitled to injunctive relief, in addition to any other and further relief as may be proper. X. EXECUTION: This Agreement is executed for the City by the Mayor, attested to by the City Clerk, with the imprinted seal of the City and executed by Allan Morrison, the Professional, attested to by ________________. DATED this _____ day of _____________________, 2003. __________________________________________ Allan Morrison ATTEST: ______________________________ Barbara Bauer, City Clerk CITY OF MCCALL Valley County, Idaho __________________________________________ Ralph Colton, Mayor PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 22 ATTEST: ______________________________________ Barbara Bauer, City Clerk STATE OF IDAHO ) : ss County of Valley ) On this ____ day of __________________, 2003, before me, the undersigned, a Notary Public in and for said State, personally appeared Allan Morrison, known or identified to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that the Professional executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. ____________________________________ NOTARY PUBLIC FOR IDAHO Residing at __________________________ My Commission Expires:_______________ STATE OF IDAHO ) : ss County of Valley ) On this ____ day of ___________________, ______, before me, the undersigned, a Notary Public in and for said State, personally appeared Ralph Colton, Mayor of the City of McCall, known or identified to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that the Mayor executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. ____________________________________ NOTARY PUBLIC FOR IDAHO Residing at __________________________ My Commission Expires:_______________ PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 23 PROFESSIONAL GOLF SERVICES AGREEMENT – PAGE 24