Submitted by Suanne Z. Thamm
Reporter – News Analyst
November 18, 2020
At their November 17, 2020 Regular Meeting, the FBCC considered a proposal from City Manager Dale Martin to trim expenses at the golf course by returning operations in house.
The current five-year agreement between Billy Casper Golf (BCG) — re-branded as Indigo Golf Partners (IGP) — expires on December 13, 2020. The City’s analysis of the management agreement indicated a projected savings of approximately $200,000 annually if the City resumed internal operations of the Golf Course.
The FBCC considered Resolution 2020-175, declaring the City’s intent not to renew its contract with IGP/BCG, but decided it needed more information prior to taking action.
Dan Zimmer, IGP Vice President of Operations, addressed the FBCC on behalf of his team, who were heavily represented at the meeting. Zimmer took issue with the savings that the City had calculated it would see by returning the golf course operations in-house. He also expressed his company’s interest in remaining the operator of the city golf course.
The consensus of the FBCC was to direct the City Manager and IGP/BCG to meet and discuss the significant differences highlighted in both parties’ analyses of costs and savings and return to the FBCC on December 1 with a better picture of the costs and benefits of renewing the contract or returning the operation in-house.
Vice Mayor Len Kreger was the only Commissioner to clearly state his belief that golf course management should remain in the hands of IGP/BCG. He underscored the advances that the golf course has made under current management, savings through bulk purchasing power, and overall maintenance. He suggested that a negotiation between the parties could result in lowered costs and net savings for the city.
The Golf Course financial condition has been the subject of significant discussion, culminating with the 2019 Integrated Financial Sustainability Analysis (commonly referred to as the Stantec report). In that report, the authors recommended additional General Fund support to eliminate the Golf Course’s cumulative cash flow deficit (owed to other City funds) which was projected at approximately $1,264,000. Under the Stantec model, the cumulative cash flow deficit would have been eliminated within five years. Although the City had approved a plan to eliminate debts, FBCC pushback on support for a flat millage rate for FY2020/21 over covid concerns caused those plans to be abandoned, leaving the financial sustainability of the Golf Course unresolved.
According to Martin, the City’s relationship with BCG has been an extremely professional and cordial. BCG leadership and staff have been supportive of City efforts and events. Despite this relationship, Martin suggested that the City must find additional opportunities to address the financial sustainability of the Golf Course, and the likely savings to be realized by returning the Golf Course to internal City operations cannot be overlooked.
While the move away from IGP/BCG appears to have taken some in the city by surprise, this suggestion has been discussed between the City Manager and Commissioners individually over a period of months. Ms. Jodi Henson, University of North Florida Small Business Development Center, had earlier prepared at City request a document entitled, “Getting the Fernandina Beach Golf Club to Profitability.”
During his presentation Zimmer expressed his company’s appreciation for the opportunity to work with the City over the past ten years. He questioned the underlying assumption in figures that the City had put forward to justify not renewing the contract. “Ultimately, we want to help you make the best decision for the future of your golf course,” he said. Zimmer cited his company’s reduction in labor costs over the past ten years from about a million dollars to $650K while at the same time making major improvements in the greens, service levels and maintenance.
Zimmer spent considerable time walking Commissioners through each service his company provides as well as explaining those areas where he and the City disagreed over expenses or cost savings.
Commissioner Mike Lednovich called for a City analysis of IGP/BCG’s analysis to determine where the real savings could be found. “It’s not that I don’t believe either one of you,” Lednovich said, “but I’d like to come to some agreed on numbers prior to making a decision. What do we gain by ending the contract? What do we gain by renewing it?” He also agreed with Vice Mayor Kreger on the need for some negotiation. He also expressed interest in exploring a hybrid version of the current contract, in which the City would take over some activities currently provided by IGP/BCG.
Based upon the need for additional information, the FBCC deferred consideration of the action recommended until the December 1, 2020 FBCC Regular Meeting.