FBCC considers management options for Municipal Golf Course

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

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.”

Dan Zimmer

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

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.

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Nicholas Velvet
Nicholas Velvet (@guest_59590)
3 years ago

I do not play golf I have never played golf but I recall when we came to the island 10 years ago that golf course was an absolute disaster. Since when does the city manager have any idea how to run a golf course? This is yet another attempt to expand the city of Fernandina beaches workforce. More people to manage. One would think that the overall condition of the golf course has improved. Sometimes it’s not about saving every penny but running a business operation to the benefit of City taxpayers. Eliminate the golf course eliminate the beach walkovers and at the end of the day what benefits do City residents have other than a higher tax rate?every time I turn around there is another recommendation from the city manager to include another operation under his management. he had so much to do in the last several years that now we have an assistant City manager? Enough already.

Perry Anthony
Perry Anthony (@guest_59608)
3 years ago

Hi Nicholas, your response is definately on-track and I couldn’t agree with you more.

Dennis Engers
Dennis Engers (@guest_59598)
3 years ago

Interesting discussion on golf course, appear to be missing the underlying issue. Play is off due to the poor conditions at the course. Look at rounds played over past ten years and ask why?

Bruce Smyk
Bruce Smyk (@guest_59599)
3 years ago

There is a level of expertise necessary that I doubt anyone on the City payroll possesses. Anyone in the City an agronomist who can devote full time to the course? Anyone know the difference in the sales of a Titleist vs. a Topflite? Anyone know how much food to order for a dinner for 100 or how to prepare it? Can it handle a tournament for 100 and still put other players on the course? Casper went through several managers and course superintendents before the current crew, which now has added stability. The superintendent is overseen by a Casper regional agronomist. Casper has the stable to bring in someone new and competent on a minute’s notice. Does the City?

Frank Quigley
Active Member
Frank Quigley(@frank-quigley)
3 years ago

The answer always seems to be “add more staff”. Same as the building department, “add more staff”. Like the old “more cowbell” skit from SNL. But it isn’t funny. The City has not proven “business acumen” and avoids any pressure to do so. We don’t follow the RFP bid process and we spend six figures, regularly, for consultants. What we do is to “add more staff” and raise taxes and fees. Easier that way.

This possible move seems to indicate that the City has simply given up on the golf course. If so it begs the question – why not sell it or simply convert to open space?

Dave Lott
Dave Lott(@dave-l)
3 years ago

Simply a negotiating tactic to get IGP to lower their fees on a renewed contract or a sincere belief the management can be done within the city and still produce the same (or better) course condition and better profitability? Let’s go back before the IGP (BCG) contract when the city did manage the course. You had a course that hadn’t seen any significant capital improvement in years and a deteriorating condition. Only after then Mayor Bill Leeper led a determined investigation into the finances of the golf course did everyone else realize the golf pro/manager’s contract was so self-serving to the detriment of the profitability of the course. Due to the COVID pandemic, the City mandated a closure of the course to public play for a number of months cutting off all revenue but maintaining the expense of daily maintenance of the course and purchasing new equipment. All the while when the Professional Golf Association released a set of guidelines that would permit play under restricted capacity and still meeting CDC guidelines. Other golf courses in the area followed these guidelines and remained open not only providing revenue but also providing a healthy outdoor experience.

Reviewing a management contract after a 5 year period is a good business practice; but waiting until 30 days before the termination of such contract to formally raise the issue at the public level is certainly not one. The city should go out with a formal RFP process to weigh IGP’s response with other companies (remembering that when the City did this back in 2010 there was only 1 other company that bid) with a thoroughly baked City management option as one of the bids.

Frank Quigley
Active Member
Frank Quigley(@frank-quigley)
3 years ago

I agree with Dave Lott. Put it out for bid and let the City compete. Show exactly what the service-level agreement would be, against costs and revenues. Pick the best provider – either in-house or vendor – and manage the contract closely.